Volum .e XLI Tuesday Province of Newfoundland FORTY -FIRST GENERAL ASSEMBLY OF NEWFOUNDLAND First Session VERBATIM REPORT {Hansard) Speaker: Honourable Thomas Lush [Preliminary Transcript] Number 47 5 December 1989

The House met at 2:00 p.m. MR. SPEAKER (Lush): Order, please! Statements by Ministers PREMIER WELLS: Mr. Speaker. MR. SPEAKER: The hon. the Premier. PREMIER WELLS: Mr. Speaker, I am tabling in the House today the Report submitted by the hon. Mr. Justice Mahoney, reporting on his findings with respect to the actions of the hon. the Minister of Social Services in the matter of the claims of his brother, Harold Efford, against Eastern Shipbuilders Limited and the Fisheries Loan Board.

With respect to the allegations made by Mr. ·Arthur Petten of Eastern Shipbuilders Limited that the Minister of Social Services has acted improperly with respect to his Company I accept totally the findings of Mr. Justice Mahoney. Accordingly, I conclude that the Minister of Social Services has not, as Minister, committed any impropriety with respect to Mr. Petten . or Eastern Shipbuilders Limited. SOME HON. MEMBERS: Hear, hear! SOME HON. MEMBERS: Oh, oh! MR. SPEAKER: Order, please!

I remind people that they are applaud or do in the galleries not supposed to anything to show Ll December 5, 1989 Vol XLI their approval or disapproval. The han. the Premier. PREMIER WELLS: Thank you, Mr. Speaker.

With respect to actions of the Minister of Social Services in arranging meetings for his brother and his brother • s lawyer with the Minister of Fisheries and the Minister of representations Minister to the Justice, Judge follows: Justice and the made by the Deputy Minister of Mahoney found as "It may have been ill-advised or imprudent of John Efford, as Minister, to have taken such an active role on his brother's .behalf t particularly after receiving advice from the Department of Justice on June 5th and June 7th. However, that is not a matter to be dealt with by me.

It does not come within my terms of reference.'' That is the end of Judge Mahoney's quote. Mr. Speaker, I have no hesitation in dealing with it and saying that such actions do not conform to a standard of behaviour for Ministers that is acceptable to this Administration. There is a strong tt"adition in this Pt"ovince that Membet"s of the House of Assembly, including Cabinet Ministers, fulfill the role of an ombudsman fat" all of their constituents.

Nevet"theless when it comes to a matter of a claim against the Ct"own ot" an agency of the Crown it is the responsibility of every Minister to resist such a claim and leave it entirely in the hands of the law off icet"s of the Crown to ensut"e both that the constituent is fait"ly dealt with No. 47 Rl

and the interest of the taxpayers is properly protected without pressure or persuasion by any Minister. I am however cognizant of the specific findings of Mr. Justice Mahoney that the Minister of Social Services: and here I quote three specific quotes from the findings of Mr. Justice Mahoney. First, the Minister of Social Services: .. had not completely shed his previous role as an action oriented Opposition M.H.A... Secondly: .. Moreover, I have found no evidence of any attempt by John Efford to obtain preferential treatment for his brother in this matter...

And Thirdly: .. nothing John Efford said or did, as a Minister of the Crown, throughout this affair constituted an impropriety ... In those circumstances I am asking Mr. Efford to resume his responsibilities as Minister of Social Services. However, he and all other Ministers are fairly warned that such actions on behalf of any constituent, related or otherwise, in the matter of a claim of a constituent against the Crown or any agency of the Crown is totally unacceptable and in future will result in a request for an immediate resignation. SOME HON. MEMBERS: Hear, hear! MR. RIDEOUT: Mr. Speaker. MR.

SPEAKER: The bon. the Leader of the Opposition. MR. RIDEOUT: Thank you, Mr. Speaker. Mr. Speaker, I think what is obvious from this particular statement is L2 December 5, 1989 Vol XLI the Premier • s own confession near the end of the statement that such action by the Minister in question or any other Minister is not an action that is acceptable to this Administration.

Yet, having made that statement, which I am sure most people would agree with, the Premier then goes on to do nothing more than to slap the Minister on the fingers, give him fair warning and say that if you ever participate in this kind of action again, then you are gone. So is it one chance, five chances, ten chances ~ Mr. Speaker? The bot tom line here is that it has been pointed out clearly that the Minister, because there was an action against the Crown, became involved in it for whatever reason. The reasons , I think we could probably find laughable.

It was because the Minister had not completely shed his previous role as an action-oriented Opposition MHA. Now, Mr. Speaker, all of us, I suppose, would not mind being tarred with that kind of a statement. We all hope that we try to perform on behalf of our constituents, but if you step over the line, if you step over the boundary line between what is right and proper for an MHA and a Minister, then you can be forgiven for doing that because you still have not shed your role as an action oriented Opposition MHA But the telling thing here, Mr.

Speaker, is the fact that the Premier has had to admit that the actions of his Minister were not proper actions and that he has now had to publicly tell all of his Ministers that if they ever participate in this kind of thing again, they wi 11 have to, forthwith, submit their resignation as a Minister. Now, Mr. Speaker, the other thing that No. 47 R2

needs to be said is that we said from the beginning, when Mr. Justice Mahoney was asked to carry out this assignment: No. 1, Mr. Speaker, I think it was unfair and ill-advised for the Premier to request a Justice of the Supreme Court of Newfoundland to carry out this kind of particular assignment and handcuff him in the bargain. There has never been another situation in Canada, according to the legal advice we have been given, Mr.

Speaker, where a Justice of the Court had been asked to carry out this kind of investigation and then had the ability or the inability to be able to call witnesses, subpoena witnesses, ask for testimony under oath, taken away from it. The surprising thing, Mr. Speaker, is that the gentleman concerned here was able to do any kind of a job at all, and that is no reflection on Mr. Justice Mahoney.

The fact of the matter is that he did not have an opportunity, as we said, and as others said at the time, to be able to carry out this mandate and do it in a way that was fair, and be seen to be fair by the public of this Province. So, Mr.

Speaker, we are not surprised by the statement, we have not had an opportunity yet to go through the attachment in detail, we will over the next few hours and no doubt we probably will have more questions at that time, but I can say now, that we are not surprised at the statement and this is not a good day for the Premier, it is not a good day for the Government and it is certainly not a good day for the Minister. SOME HOM. MEMBERS: Hear, hear! MR. SPEAKER: The hon. the Minister of Social Services. L3 December 5, 1989 Vol XLI The Minister, Statements. MR. EFFORD: on Ministerial Thank you, Mr. Speaker. Mr.

Speaker, I would like to say thank you, first of all to my colleagues in Cabinet and colleagues in caucus, because it has been a very difficult time over the last month. Thanks especially to the people in the Province as a whole and the people from the District of Port de Grave for the support they have given me through these difficult times. I want to make a comment to the Leader of the Opposition in relation to the statement 'it is a bad day for the Government of Newfoundland and Labrador'. I want to say to the Leader of the Opposition, Mr.

Speaker, I think it is a good day for the Government of Newfoundland and Labrador. At least we had the courage to face up to and deal with any mistakes, or anything that could have occurred. We did not hide behind a political attitude, we faced it head on and we dealt with it, and I am very proud to say, Mr. Speaker that I am satisfied, totally, with the statement handed down by Justice Mahoney. I answered all questions put before me as Minister of Social Services and even before.

And while the Leader of the Opposition says that it was not dealt with, it went back 'to 1987 when I was in the Opposition, and all questions pertaining to those things I answered without hesitation. I would like also, Mr. Speaker, in dealing with the statement put forth by the Premier to accept totally the standard put down by the - MR. SIMMS: On a point of order, Mr. Speaker. No. 47 R3

MR.. SPEAKER: The hon. the Opposition House Leader on a point of order. MR. SIMMS: I have to rise on a point of order, because what we are seeing here is something very unusual. Even the Minister, I am sure, would acknowledge that it is unusual and out of the ordinary. The Premier gave a statement under Statements by Ministers. Under the rules we are entitled to respond and that is it. Now the Member for Port de Grave, the Minister of Social Services, is getting up and he is commenting on the Statement by the ·Premier. This is a totally unacceptable practice; it has not been the practice in this House.

If the Minister wants to get up and make a Ministerial Statement as Minister of Social Services, then that is something else to deal with. I suggest to Your Honour it is something that you might wish to look at, because it is quite out of the ordinary. MR. SPEAKER: The hon. the Government House Leader" MR. BAKER: Thank you very much, Mr. Speaker . To solve the problem I would ask leave of the House for the Minister to respond? SOME HON. MEMBERS: No. No. PREMIER WELLS: You are not going to give leave to hear the Minister's (inaudible)? SOME HON. MEMBERS: No. L4 December 5, 1989 Vol XLI MR.

SPEAKER: The hon. the Opposition House Leader. AN HON. MEMBER: It is not correct, it is not (inaudible) . MR. SIMMS: That is right. That is the only point I make for the purpose of the point of order. SOME HON. MEMBERS: Come on! Come on! PREMIER WELLS : Mr. Speaker, on the point of order. MR. SPEAKER: The hon. the Premier. PREMIER WELLS: I do not disagree with the Opposition House Leader, I agree with him. It is not usual for another Member to make an additional statement. In the circumstances, where it invo .lves the Minister personally, I would think, Mr.

Speaker, that every single Member of this House would do the Member the courtesy of hearing his comments. Now if they do not want to, they do not have to" SOME HON. MEMBERS: Hear, hear! MR. SPEAKER: The han. the Opposition House Leader. MR. SIMMS : Mr. Speaker, the Premier need not bother to shout and bawl and scratch. That is not what we are debating. The point here that I raised was a legitimate point of order, and even now, by the confession and admission of the Premier, he agrees therefore it is No. 47 R4

incorrect. We are debating a point of order. We are not being asked for anything else at this point in time. It is up to the Speaker to rule on the point of order, then we will deal with the next matter subsequently. MR. SPEAKER: Does the Minister have leave of the House? MR. SIMMS: What about the point of order? MR. SPEAKER: It is a point of order, and the Minister would need leave of the House to carry on. Does the Minister have leave of the House? MR. SPEAKER: The han. the Opposition . House Leader. MR. SIMMS: Now, Mr.

Speaker, I cannot speak for everybody over here, but as far as we are concerned, if the Minister wants to make a brief statement we have no problem. Howeve.r, we would obviously have leave to make response to his statement. Is that acceptable to the Government? MR. SPEAKER: The han. the Premier. PREMIER WELLS: Mr. Speaker, I made a statement on behalf of the Government and the Opposition Leader responded. Now, it deals with the Minister personally, and the Minister personally, and only the Minister personally should be given leave to state his personal position. SOME HON. MEMBERS: Oh! Oh sure!

PREMIER WELLS: LS December 5, 1989 Vol XLI If they do not want it, well - MR. SPEAKER: The han. Leader. MR. SIMMS: the Opposition House So, in other words, Mr. Speaker, it is a one-way street, according to the Premier. They have asked · us for leave, and we are prepared to give leave to the Minister to make a statement. But we also ask leave for somebody on this side to respond to his statement. That is fair. What about fairness and balance? MR. SPEAKER: The han. the Premier. PREMIER WELLS: Mr. Speaker, it is fairly simple. I made a statement on behalf of the Government dealing with the issue.

The Opposition Leader made a statement on behalf of the Opposition dealing with the issue. It involves the Minister personally. The Minister personally wanted to state his personal position on it to the House. Maybe he even wan ted to apologize to the House. Let him do that. That doe .s not give rise to the right for another official statement from the Opposition. MR. SPEAKER: Order, please! PREMIER WELLS: If they do not believe, they do not. MR. SPEAKER: Order, please! The Chair has heard enough submissions.

In this particular event, Statements by Ministers, the procedure is, and the Standing Orders state, that a Minister give No. 47 RS

a statement and that there be accorded an Opposition reply. In this case, I gather, since the Opposition has not gathered a reply, that it is not in order for the Minister to continue. MR. SPEAKER: The hon. the Minister of Finance. DR. KITCHEN: Mr. Speaker, I take this opportunity to state this Government's position on the proposed Federal Goods and Services Tax. In doing so, I will also table a commentary on that tax prepared by the Department of Finance, which we intend to make available to interested members of the public. Mr.

Speaker, the Government of Newfoundland and Labrador is quite concerned about the negative impact that the proposed Goods and Services Tax would have on the people, the economy and the fiscal position of the Province. Our concerns are supported by three sources of data. First by an interprovincial study carried out by the Ministers of Finance of .the ten provinces and the two territories based on data supplied by the Conference Board of Canada, secondly, by studies carried out by our own Department of Finance, and, thirdly, by extensive consultations we have held with the business community in the Province. Mr.

Speaker, as far as the economic impacts of this tax on the Province, the Government of Canada is predicting a smooth economic transition to the GST. It is our opinion that the federal analysis is too optimistic, especially when it assumes that all savings from the existing L6 December 5, 1989 Vol XLI Federal Sales Tax would be immediately passed on to consumers and that wages would not adjust for GST induced inflation.

The inflationary impact of the GST would be higher in Newfoundland during the transitionary period than the federal forecast of 2. 25 per cent for the nation, due mainly to lower competitive pressures in the Province and to the taxation of transportation. The taxation of transportation discriminates against outlying regions, leading to a higher GST burden on consumer purchases and increasing the cost of Newfoundland goods sold in major Canadian markets.

The existing Federal Sales Tax, the FST, or manufacturer• s tax, as it is sometimes called, is fairer in this respect, since the tax burden is the same in all regions of the country. In the long term, the economy of the Province would benefit little from the Goods and Services Tax. National economic models, such as those used by Federal Finance in their studies, do not adjust for the realities of small regional economies. For example, supply restraints and excess processing capacity associated with the fishing industry are not taken into account in the analysis.

The future efficiency and economic output from the resource based Newfoundland economy would be influenced more by supply and capacity considerations, by the demand and price of specific commodities, by monetary policies and exchange rates, than by the removal of the Federal Sales Tax on business inputs. In addition, the markets of many Newfoundland businesses are restricted by a wide range of economic and geographic factors. The GST may No. 47 R6

potentially benefit some capital intensive industries, like mining and energy, however, it would not have a significant positive impact on the provincial economy. The replacement of the present Federal Sales Tax (FST) by the GST would result in a 35 per cent increase in Federal Sales Tax revenue from Newfoundland. This, coupled with the shift of tax burden directly to consumers, would result in individuals paying $115 million, we estimate, in extra federal taxes in 1991, even after taking into consideration increased sales tax credits and the planned reduction in the middle personal income tax rate.

This negative impact on consumers in the Province would be compounded by the increased cost of living caused by the tax, especially during the transition. Mr. Speaker, I also want to discuss administrative issues. If the GST proceeds, the administration and compliance complexities associated with the two sales tax systems would be enormous, horrendous, especially in Newfoundland and Labrador where the population is scattered and where the nearest tax professional could be many miles away. The general public would be confused and distressed by the imposition of another sales tax at the retail level.

The administration of the Province's Retail Sales Tax would be less efficient under the GST. The current Federal Sales Tax at the manufacturers • level presents few problems for the efficient administration of our Retail Sales Tax system, nor does our Retail Sales Tax impede the collection of the present Federal Sales Tax. Another problem we are encountering has to do with fiscal L7 December 5, 1989 Vol XLI impacts. During the first few years of the GST the Province's fiscal position will deteriorate significantly as a result of this tax.

The net result of revenue losses and increased expenditures would be equal to an additional two percentage points or more on the Retail Sales Tax. Also, since . business inputs are not subject to the GST, this Province would be pressured by businesses to have business inputs exempt from the Retail Sales Tax. Currently business inputs account for about one-third of our Retail Sales Tax base and we cannot afford the erosion of this tax base. Perhaps more serious than any of these three points is the fourth one. The increasing incursion by the Federal Government into the consumption tax field is a grave concern.

Under the Constitution, Provinces are restricted to direct taxation. Because of our weak income and resource tax bases, less affluent provinces, such as Newfoundland, are forced to rely heavily upon consumption taxes to fund basic services. Retail Sales Tax accounts for 40 per cent of our provincially generated revenues, so any additional incursion by the Federal Government into the consumption tax field would severely restrain our fiscal maneuverability and would impede our ability to discharge our constitutionally assigned expenditure responsibilities in such areas as health, education, and social services.

The Federal Government already has overwhelming control over income taxation. With the GST, the Federal Government would have control over sales taxation. The GST has the potential to alter No. 47 R7

dramatically and permanently the Federal - Provincial fiscal balance of power in Canada in favour of the Federal Government. The massive Federal incursion into the traditionally provincial domain of sales taxation would effectively confiscate a significant portion of provincial tax room hitherto available to mitigate any deteriorati 'on in provincial public revenues. In other words, not only would the proposed GST adversely affect the fiscal position of the Province, it would also restrict the fiscal maneuverability of the Province to respond.

The threat to fiscal balance is even greater for the less affluent provinces, such as Newfoundland, given our high reliance upon commodity taxation and the interaction of federal transfer programs. Furthermore, the danger would intensify because once established the GST mechanism would facilitate future expansion of the federal tax, thereby further crowding out provincial tax effort from the traditionally provincial doma in of Retail Sales Taxation. With respect to fiscal transfers, all provinces, Mr.

Speaker, would experience a gain in established programs financing cash transfers as a result of the personal income tax reduction. For the poorer provinces, however, this gain would be more than offset by decreased entitlement under The Equalization Program which would result from the tax. The Blenkarn Committee Report, re leased on November 2 7 , goes to great lengths to tinker with the original GST proposal.

Although there is some consolation from a few minor recommendations, its ma jor recommendations to tax all housing sales at 5 per cent, to L8 December 5, 1989 Vol XLI lower the general tax rate to 7 per cent, and to provide less compensation to low and middle income people, do little to alleviate the negative effects of the GST proposal. Mr. Speaker, despite all the shortcomings of the Goods and Services Tax, the threat to provincial finances of a national sales tax (NST) would be even greater. The revenue gain from base broadening would be offset by the effective removal of sales tax on business inputs.

The required provision of compensation to low income individuals in order to offset the increased burden caused by base broadening, plus the required adjustments to other consumption taxes, would result in a major deterioration in the Province's fiscal position. The loss would be equal to an extra 4 percentage points on top of our current RST rate of 12 per cent. The resulting National Sales Tax rate of 25 per cent would be totally unacceptable. Also the Province has little room in other revenue bases or on the expenditure side to offset this deterioration in the Province's fiscal position. Mr.

Speaker, in conclusion, the Government of Newfoundland and Labrador is strongly opposed to the introduction of the Goods and Services Tax because of the negative impact the proposed Federal Tax would have on the population, economy and fiscal position of the Province. We recognize there are problems with the present Federal Sales Tax imposed at the manufacturer's level. We also recognize that Governments in Canada, not just the Federal Government, need to address deficit problems. The No. 47 R8

proposed GST ignores the fact that Canada is a federation with provinces having major expenditure responsibilities under the constitution, but limited taxation powers. The Goods and Services Tax endangers the ability of provinces to provide adequate health care, education and other vital services, especially less affluent provinces which are forced to be heavily dependent upon consumption taxation. We believe that the Government of Canada should, in consultation with provinces, seek more equitable solutions to the fiscal problems faced by both levels of Government. And this, Mr.

Speaker, is the message that I intend to give to the Federal Minister of Finance and the Provincial counterparts when we meet on Thursday. Thank you. SOME HON. MEMBERS: Hear, hear! MR. SIMMS: Mr. Speaker. MR. SPEAKER: The hon. Leader. the Opposition House MR. SIMMS: Thank you, Mr. Speaker, and I thank the Minister for sending us a copy just before the House opened and fortunately, of course, a twenty-two page report and a nine - page Ministerial Statement would take more than a few minutes to try to digest and to try to read.

So I reserve any detailed responses until we have had a chance to go through what he has to say here. But I will make some general observations and comments, L9 December 5, 1989 Vol XLI if I might be permitted? AN HON. MEMBER: (Inaudible). MR. SIMMS: First of all, I have to take the opportunity, while it is fresh in my mind, since he mentioned the Blenkarn Committee's Report and their recommendations. I want to state 'here categorically and publicly, as a Conservative, that I was absolutely and totally disgusted with the approach made by Mr.

Blenkarn at the time when we were trying to get him to come here with his Committee to have public hearings. And I indicated my disgust to others in the Federal Government who I think may have communicated to Mr. Blenkarn on our feelings, certainly my own personal feelings and I am sure there are others who felt the same way. So I say that up front publicly, as a Conservative. I was absolutely disgusted with his approach. Now, Mr. Speaker, to get on to the rest of the statement.

We have here today the same Minister, the same Minister who carne to this House yesterday and said that he and his officials had badly underestimated forecasts in his own Budget, a Budget which he presented in June and a report which was put together in September, only four months later, carne in here yesterday to tell us how bad their forecasts were, he and his officials. So you have to ask the question: How can we be assured of the credibility of he and his officials comments on this particular issue? That is one question one would want to ask publicly.

Yesterday in that same statement, when he brought in the statement No. 47 R9

telling us how bad the economy was in this Province under his leadership as Minister of Finance, he tells us essentially that the bottom is gone right out of her. The bottom is gone out of her. And here today, Mr. Speaker, he is taking the opportunity to somehow turn around the negativity associated with his statement yesterday, turn around and take away from the responsibility of the Government and he, as Minister of Finance, and have a little flick at the Federal Government, and somehow try to blame, in a little way, the Federal Government for a lot of their problems.

That is what he is attempting to do here and everybody can see through it. Who, Mr. Speaker, I ask - who do they think they are to be pointing a finger at the Federal Government for tax increases? Just who do they think they are? The same Government that in June, six months ago, brought in a Budget here and introduced $100 million in extra taxes, $100 million worth of extra taxes in that area, in that category. And now we hear yesterday he has a surplus of $50-odd m~llion projected now, which I predict will change by the way. So they are doing nothing.

They have an extra $100 million from the taxpayers of this Province. They have a $50 million surplus forecast. They are doing nothing to help those who are so affected by the downturn in the economy which he described yesterday. And these I understand are still increasing. So you have to ask the question: What kind of ga ll has this Minister got to come in here and point the finger at somebody else? With respect specifically to the GST let me just say this. There LlO December 5, 1989 Vol XLI are some positives, the Minister acknowledges in his statement, and some need for tax reform. We agree with that.

And I am not going to get into the specifics because there are many of them there, fishermen, farmers will not have to charge taxes on their sales and the groceries generally speaking are suppose to be exempt from the tax and so on. There are also a lot of negatives, Mr. Speaker. We hear negatives about the impact on the real estate profession in this Province; housing; the additional tax on housing. That is a negative, no question about it. There is a lot of confusion going to be generated for Small Business people in having just to deal with the paper work. So, Mr.

Speaker, the GST, in my opinion, and in the opinion of my colleagues, I believe, the GST really is good for the Central Canadian economy where there is a manufacturing -base economy set-up. It is good for Central Canada, but it definitely will hurt Newfoundland. There is no question about that . And I can make it abundantly clear, and in case it is a bit of a surprise I will say it publicly, but we have said it on a number of occasions, and I can tell the Minister and the Government we have also indicated to the Government of Canada our feeling on the G. S.

T., and that is that we do not believe that the GST should be implemented as it now is stl"Uctured and as it now exists. And we agree with the Minister in his statement that further consultation and negotiation should take place. We absolutely 100 per cent support it . The only additional comment I will make is this: In the report on page 6, the Minister will know there is reference to work done by No. 47 RlO

the Conference Board of Canada, the survey or the study that they did. I think they were contracted to do a survey or a study on the GST. AN HON. MEMBER: By the Premiers. MR. SIMMS: Yes, by the ten provinces and so on. But there is no reflection of any of the things that the Conference Board of Canada said here with any respect to any positive impacts because I note, . for example, on page 6 just having a chance to glance through it, that from their report and their analysis they say the Newfoundland economy would gain from the G.S.T. by 1993.

This is the Conference Board of Canada survey done by or for the provinces. So, there obviously is a difference of opinion, a large difference of opinion between this study and between the finance officials and the Minister and the Government, and the other people. So, pardon me? AN HON. MEMBER: That is only one scenario. MR. SIMMS: Under one, yes, I know they did two scenarios, but they did say that. The Minister did not mention it in his statements is the only thing I am saying.

So I do not know what else might be in this report that might be of some positive interest that people should know about the Minister declining to leave out. We will have to have a chance to take the time to go through it with a fine tooth comb, scrutinize it a bit, and see whether the Minister is not simply trying to deflect away from the negativity associated with his own Governments Lll December 5, 1989 Vol XLI performance by attention to a brought in Government. somehow diverting negative tax being by the Federal But I can assure you, we oppose it. MR. SPEAKER: Further statement"s by Ministers? MR.

FLIGHT: Mr. Speaker. MR. SPEAKER: The hon. the Minister of Forestry. MR. FLIGHT: .Thank you, Mr. Speaker. I would, at this time, like to advise Members of the House of the Governments position with regard to the milk price increase announced on the weekend by the Newfoundland Milk Marketing Board. I would point out that by regulation the Newfoundland Milk Marketing Board has the delegated authority to set milk prices in the Province. For that reason, I have been involved with the issue of milk pricing on a consultative basis only.

The price increases sought by the producers and processors, 1 cent per 1i tre and 2. 5 cents per 1i tre respectively, have been requested to cover increased costs incurred since the last price increase - 16 months ago in the case of the processors, and 23 months ago in case of the producers. Hon. Members may recall that during the past summer the industry was considering a combined increase of 8.5 cents per litre. I was in no way prepared to agree with an increase of that magnitude. However, I informed the producers and processors, and the Milk Marketing Board or No. 47 Rll

through the Milk Marketing Board, that I would be willing to accept a price increase which would help cover increased costs if an interim assessment by the task force on Agri-Foods justified the increase . The task force was asked to provide me with such an interim assessment on the proposed increases, and this was delivered to me late Friday afternoon. On the basis of that assessment, which clearly justifies the increases, I will accept . the decision of the Milk Marketing Board with respect to the price increases announced on Friday.

However, I want to make it perfectly clear that my concurrence is conditional upon there being no further increases whatever in the prices of milk at both the product and processor levels until the task force on Agri-Foods has presented its final report and until cabinet have assessed its recommendations . Any additional increases in the prices of milk at either. the producer or processor level before that time will not be acceptable, and appropriate action will be taken by Goyernment to prohibit such increases. Than k you, Mr. Speaker. MR. WOODFO RD: Mr. Speaker. MR.

SPEAKER: The hon. the Kember for Humber Valley ·. MR. WOODFORD: Mr. Speaker, I do not know if I should respond to the G.S.T. or to the Ministerial Statement on the milk increases. In any case, I ~ sure a slip of the tongue is no fault of the mind. L12 December 5, 1989 Vol XLI In any case, Kr. Speaker, I guess the second paragraph of the Ministerial Statement says it all. And we point out that by regulation the Newfoundland Milk Marketing Board has a delegated authority ~o set milk prices in the Province. By rights there is no need for even a statement.

If the Minister had followed the rules and regulations that were inaugurated some time ago and given to the Milk Marketing Board of the Province, as well as other boards, there would be no need for the statement. He could go along with it . There is no need for -any Ministerial interference whatsoever unless requested. Further down it says that we could accept the increase if there was some reference .made by the task force, if the task force went along with it. The task force, Mr.

Speaker, and I stand to be corrected, is not included in the terms of reference of the task force to set prices for any commodity group in this Province, none whatsoever. The terms of reference for the task force is to look into the viability of agriculture in general in the Province and to report back to the Minister. It is suppose to be an independent group not interfering in any way with the producers, processors, or anybody else involved in the industry in the Province. The Touche Ross Report came in and recommended the increases. It was, I think, on two or three different consultants reports.

The amounts of the increases at first were questioned and they went back and asked for a second consultant's report and the producers in this case had to wait some twenty-three months before an answer was given. Then when the answer was given the Minister No. 47 Rl2

intervened and said that he would · have to make recommendations on whether the report would be rejected or not. Mr. Speaker, I think this is a prime example of tearing right at the guts of the small businesses in rural Newfoundland. If there is , going to be interference let there be interference one way or the other. Either say to the industry you are not doing the job so we will do it for you. Let them know where they stand. Either take the powers away from the Milk Marketing Board, or any other board in theis Province, or give it to them.

There is enough Government interference in this Province and everywhere else in Canada in small business. Do not let it happen here. And the last paragraph of the statement as well, Mr. Speaker, for anybody to see, is threatening in every sense of the word. No increases, if not I will take appropriate action. The only appropriate action the Minister can take is to bring · in legislation stripping the boards of their power - but let them know where they stand and do not let them hang. Help the small industry in this Province instead of hindering it. SOME HON. MEMBERS: Hear, hear! Oral Questions MR. RIDEOUT: Mr.

Speaker. MR. SPEAKER: The han. The Leader of the Opposition. L13 December 5, 1989 Vol XLI MR. RIDEOUT: Mr. Speaker, I have a question for the Minister of Mines and Energy.

The Minister will be aware, no doubt, that most of Central Newfoundland, including the Bale Verte Peninsula, have been reeling from the announcement made, I think it was on Thursday or Friday of last week, that 250 direct jobs are going to be lost at the paper mill in Grand Falls, and the Minister, no doubt, will appreciate that that will have an effect on the economy of all of Central Newfoundland, particularly as it relates to forest operations on the Baie Verte Peninsula, in Green Bay and elsewhere.

The Minister is also· aware that Bale Verte Kines have announced that they will be entering a one-month closedown beginning December 16th, so, Mr. Speaker, I would like to ask the Minister if he could tell the House what measures the Government is taking to ensure that the 400 or almost 400 jobs, 365 or 370 jobs, at Bale Verte Mines are protected. HR. SPEAKER: The hon. the Minister of Kines and Energy. DR. GIBBONS: Thank you, Mr. Speaker. Right now we are reviewing the situation with regard to Bale Verte Kines.

They have, unfortunately, announced the closedown, starting on the 16th, for what they say is about one month to resume operations of the dry process on January 15th, 1990 and we are reviewing that situation with the Company. Last week the Minister of Finance, the Minister of Development and I met with the President and Vice-President of Bale Verte Kines and reviewed their circumstances, No. 47 R13

and presently our staff members for the three Departments are reviewing the matter in light of a meeting of the Board last week, at which my Assistant Deputy Minister, who is Chairman of the Monitoring committee for Bale Verte Mines, reported on the present status of the sales of product from that operation. So we expect to be reporting further on that later. MR. SPEAKER: The hon. Opposition. MR. RIDEOUT: the Leader Thank you, Mr. Speaker. of the I certainly thank the Minister for his information. Mr.

Speaker, the Minister knows full well that the Province of Newfoundland and Labrador has stood behind that operation in many respects over the last eight years, I guess. There is no doubt about that. Could the Uinister tell the House whether or not those employees can expect the continued support of the Government of Newfoundland and Labrador in maintaining that operation and maintaining their employment opportunities? MR. SPEAKER: The hon. the Minister of Mines and Energy. DR. GIBBONS: Certainly, Mr.

Speaker, it would be premature for me to judge what we might conclude from the present assessment of the situation at Bale Verte, which we are doing with the Company. But presently, from what we know about the resource in the ground, ore in the ground at Bale Verte for at least two more years of operation of the dry process. I would like to see the operation continue until every L14 December 5, 1989 Vol XLI ounce of that ore is processed and sold on the world markets. The wet process that is being developed at Baie Verte Mines is nearing the commissioning stage.

Presently I am being told by the company that it should be due for commissioning in the next couple to three months, if everything can proceed on the present schedule. I am certainly going to try to do everything I can to keep that on schedule. KR. SPEAKER: The han. the Opposition. MR. RIDEOUT: Leader Thank you, Mr. Speaker. of the Again I thank the Minister for his answers. Mr. Speaker, the Minister made reference in answer to the first question of the Board of Directors meeting that took place in Baie Verte last weekend, on Thursday and Friday.

The Minister will no doubt recall that the Premier in June said here in this House that where it was appropriate and where there would be obvious impacts on districts represented by Members on this side of the House, that consultation would take place with that particular Member regarding the makeup of Government Boards or agencies. Now, Mr.

Speaker, in view of the fact that the Minister has recently appointed two new Government directors to the Board of Directors at Bale Verte Mines without any consultation with me by himself or his officials, can the Minister tell the House why it would not have been appropriate for him or his officials, at least, to seek the advice of the Member who represents that particular District in the House, No. 47 R14

consistent with statements made by the Premier in this House in June? MR. SPEAKER: The bon. the Minister of Mines and Energy. DR. GIBBONS: Yes, Mr. Speaker, I did make two changes in the four Government appointees on the Board. We reconfirmed the Assistant Deputy Minister as one of Government's appointees, we confirmed the Union representative as one of the Government appointees to the Board, we replaced the former Mayor with the present Mayor, after the election, and we replaced one other member of the Board last week, and I admit I did not consult with the bon. the Member for Baie Verte (Mr.

Rideout) in doing that. AN HON. MEMBER: Are you sorry? MR. WOODFORD: Mr. Speaker. MR. SPEAKER: The bon. the Member for Humber Valley. MR. WARREN: That is the second time now in two weeks, and the same Minister, by the way. That is the second time in two weeks. MR. SPEAKER: Order, please! The Chair has recognized the bon. the Member for Humber Valley. The bon. the Member for Humber Valley. MR. WOODFORD: Thank you, Mr. Speaker. L15 December 5, 1989 Vol XLI Mr. Speaker, my question is to the Minister responsible for Agriculture (Mr. Flight).

Would the Minister inform the House if, after being appointed to Cabinet, back in May 1989, -he received a brief from the Newfoundland Milk Marketing Board? MR.. SPEAKER: The bon. the Minister of Forestry and Agriculture. MR. FLIGHT: Mr. Speaker, I cannot be specific about the dates I received briefs from the Milk Marketing Board, but I can tell the hon. Member that since I was appointed to Cabinet on May 25 - was it May 25? - AN HON. MEMBER: May 5. MR.

FLIGHT: - Kay 5, that I have had more meetings with the Milk Marketing Board than I have had with any other board or any other group of people in this Province. - AN HON. MEMBER: Answer the question. MR. SPEAKER: The hon. the Member for Humber Valley. MR. WOODFORD: That is very positive news, Mr. Speaker. I am glad the Minister is showing an interest in the Board. I commend him, but, at the same time, he did not answer my question. My second supplementary, Mr. Speaker.

In view of the fact that the brief was submitted to the Minister back in Kay, some six months ago, and in . view of the fact that the Newfoundland Milk Marketing Board requested in that No. 47 Rl5

brief a Pricing Review Committee to be put in place that would involve members from the producers, the processors, the Department of Agriculture, Consumer Affairs and a member at large representing the consumers in this · Province, would the Minister tell the House if he will soon act on that request? KR. SPEAKER: The hon. the Minister of Forestry and Agriculture. KR. FLIGHT: Kr . Speaker, I dealt with any requests from the Milk Marketing Board. I am aware of the brief the hon. Kember refers to. I cannot confirm the exact date I received the brief.

I can assure the Kember tl:iat I went over the brief with my officials, and inasfar as when I will deal with anything that might have been in that brief, although the hon. Kember in his reply to the Ministerial Statement suggested that the Task Force on Agri-Foods had no bearing on the dairy industry or the Milk Marketing Board, I can te ll the hon. Member that I will not be making any more recommendations unless it is something we have to deal with on an emergency basis.

The Task Force on Agri-Foods will look at the dairy industry, the producers, the processors, the role of the commodity boards, and will recommend to me the right course of action to deal with the industry and the commodity boards, specifically the Milk Marketing Board, and we will consider any recommendations coming from that Task Force on Agri-Foods. MR. SPEAKER: The han. the Member for Humber Valley. Ll6 December 5, 1989 Vol XLI MR. WOODFORD : Mr. Speaker, I asked a question and a supplementary and I have not yet had answers to either. Both questions required a simple yes or no. I will ask again, Mr.

Speaker, on my third supplementary . The Newfoundland Milk Marketing Board and the processors have acted in a competent, responsible and diligent manner. If this review committee had been set up, the Minister would have been off the hook, in any case. It would have been dealt with by the Commit tee. Would he tell the House now whether he is going to abide by the request of the Milk Marketing Board and give them an answer one way or the other? Yes, or no. MR. TOBIN: Answer the question. KR. SPEAKER: The hon. the Minister of Forestry and Agriculture. MR. FLIGHT: Mr.

Speaker, it is not my judgement that it is competent and the proper thing to do, to ask for an 8. 5 cent increase in milk prices in this Province. The bon. Member suggests that the Milk Marketing Board acted in an honourable way, and I am sure they did, and I have no question or criticism of the way they have acted with regard to their representation to me. If the industry, the processors and the producers, believe they need an 8.5 cent increase, then I would accept that they believe that.

It was not my information, and it was not my intention to increase, at that point in time, the price of milk in this Province .by 8.5 cents. Other than that particular issue, I have had a good working No. 47 R16

relationship with the Milk Marketing Board and the industry, and I hope it continues. The Task Force on Agri-Foods will be looking at the whole dairy industry. Any recommendations that the Milk Marketing Board cares to make will be apprised and recommendations will be made as to what Government's proper course of action should be relative to both the industry and the Milk Marketing Board. MR. SPEAKER: The hon. the Member for Humber Valley. MR. WOODFORD: One final supplementary, Speaker. Mr. I still have not had an answer.

I do not know if the other fifty-one people in the House have it, but I certainly did not get it. I mean, a simple question! SOME HON. MEMBERS: Oh, oh! MR. WOODFORD: Do not shuffle it off on the Task Force. The Task Force is to look at the viability of the agriculture industry in general in the Province. It has nothing to do with the pricing of milk or anything else in this Province. They made a specific request, representing everybody in the Province, that a price review committee be set up. Is it or is it not going to be set up? MR. SPEAKER: The hon. the Minister of Forestry and Agriculture. MR. FLIGHT: Mr.

Speaker, the price review committee will be set up if it is deemed the right thing to do. I L17 December 5, 1989 Vol XLI have not accepted that it may be the exact right lhing simply because somebody recommended it, who may or may not have a vested interest. It may or may not be set up. I may well rely on the Task Force on Agri-Foods to advise me as to whether this is a good mechanism or not. And when I have that advice, I will report to the bon. House. SOME HON. MEMBERS: Hear, hear! MR. SPEAKER: The bon. the Member for Green Bay. MR. HEWLETT: Thank you, Mr. Speaker. Mr.

Speaker, a few short weeks ago the Premier and the Minister of Energy touted the fact that Ontario had joined our hydro talks with Quebec. It appeared that finally we would get to see a situation where maybe we could sell at least part of our power to a customer other than Quebec. Now, out of the blue, Ontario has stepped aside or been pushed aside from these talks. Given the fact that hydro development planning takes months, maybe years, can the Minister explain this very sudden, abrupt reversal? MR. SPEAKER: The bon. the Minister of Mines and Energy. DR. GIBBONS: Thank you, Mr. Speaker.

I would not say that there has been an abrupt reversal, Mr. Speaker. Ontario offered, in August I think it was, to encourage these talks to get started because they wanted to be No. 47 Rl7

a customer for the energy. Ontario told us last Thursday that they are still interested in purchasing energy from Labrador. However, over the last few months, in making an assessment of the situation, Quebec has concluded that really they do not see any need for a third party. They have a need for the energy themselves ~in the time frame when it would become available, in about 1998, 1999 or the year 2000, so they have made a proposal to us now to have joint development of the Churchill River resources, including all components that we were discussing before.

That would include the Gull Island/Muskrat Falls sites, and, as well, possible upgrading of the Upper Churchill. What Quebec is really telling us is that anything that is surplus to our needs at that time, we, Newfoundland and Quebec, could agree on a pricing formula and sell it to the highest bidder, which could include Ontario at that time. MR. SPEAKER: The bon. the member for Green Bay. MR. HEWLETT: Thank you, Mr. Speaker. It would appear, Mr. Speaker, that the Ontario ace card has turned out to be a joker. I would ask the Minister again, Mr.

Speaker, does he expect us to be so naive as to believe that this Government's negative stand on the Meech Lake Accord has no negative spillover into other areas of intergovernmental relations? MR. SPEAKER: The hon. the Minister of Mines and Energy. DR. GIBBONS: Mr. Speaker, as far as I am L18 December 5, 1989 Vol XLI concerned, we are dealing here with a commercial enterprise. Quebec realizes the need it has for power at the end of the next decade, and they are looking at this as a commercial enterprise because they do need the power. MR. SPEAKER: The hon. the Member for Green Bay. MR.

HEWLETT: A final supplementary, Kr. Speaker. On October 30 the Premier assured me in this bon. House that he would make sure that Ottawa meets its constitutional obligations to see that we get our goods to market. I ask the Minister of Energy, Mr. Speaker, now that Ottawa is probably mad at us, now that Quebec is probably mad at us, now that Ontario has chickened out, what steps has the Minister taken to ensure that we can sell our power to another customer, for instance the United States of America? MR. SPEAKER: The bon. the Minister of Mines and Energy. DR. GIBBONS: Thank you, Mr. Speaker.

I would not say that ottawa is mad with us, Mr. Speaker. We have been making some great progress with Ottawa on the Hibernia side lately, some great progress. They are not mad with us at all. On the hydro side, we do not see any indication that Ottawa is mad with us, and I am sure they are not, because they would like to see us make progress here as well. As for finding a way to sell the power ourselves to the United States, no, at this time I am not looking at alternatives for that. No. 47 R18

MR. SPEAKER: The bon. the Member for Humber Valley. MR. WOODFORD: My question again, Mr. Speaker, is to the Minister responsible for Agriculture.

In view of the fact that the dairy industry is comprised of some seventy-two dairy farmers in the Province and employs approximately 1, 000 people across the Province and has an investment of some $50 million in infrastructure, comprising a significant number of employed people in the rural areas of our Province, would the Minister now tell the House whether the Minister will let the Board act under the rules and regulations that it was instituted to so do, or by the dictatorial whims and wishes of the Minister and the Cabinet? MR. SPEAKER: The bon. the Minister of Forestry and Agriculture. MR. FLIGHT: Mr.

Speaker; I thank the bon. Member for his question. I want the Member to know that we recognize and we are very proud of the contribution the dairy industry, as he points out, makes to the economy of the Province, and we are going to protect that industry in whatever way necessary. We are also, Mr. Speaker, going to protect the rights of the consumers in this Province, as well. I want to say to the bon. Member that the Milk Marketing Board has more responsibility than the pricing itself, they control quotas, they control new entries. There are lots of things they control.

At this point in time, the Milk Marketing Board will go Ll9 December 5, 1989 Vol XLI on and do the things they are mandated to do. But I was very specific, Mr. Speaker, in my Ministerial Statement that we will not permit another increase in the price of milk in this Province until such time as the Task Force on Agri-Foods have reported and the Cabinet have apprised and implemented whatever recommendations they intend to implement. MR. SPEAKER: The bon. the Kember for Humber Valley. MR. WOODFORD: My second supplementary, Mr. Speaker.

Would the Minister, who knew full well at the time that the Milk Marketing Board had a right to bring in the new pricing policy, why did he act in the way he did and interfere with the way the Board acted in their request for a price increase and the actual increase itself? MR. SPEAKER: The hon. the Minister of Forestry and Agriculture. MR. FLIGHT: Mr. Speaker, it is very simple. I acted out of a desire and an obligation to protect the consumers of this Province. There are a lot of people in this Province, Kr. Speaker, and it is very doubtful if they can afford to buy milk. That is why I acted when I acted.

It says so in the statement. And the hon. Kember reminds me, Mr. Speaker, that I acted unfairly. Well, I said in fairness to the Milk Marketing Board here yesterday, the Milk Marketing Board did not necessarily support No. 47 Rl9

an 8. 5 cent increase in the price of milk back mid-summer, but I can tell the Member that the industry wanted 8.5 cents and put up an awful fight when they were told they were not going to get it. Now these are facts. And you can answer a question with a question I suppose, Mr. Speaker. Would the hon. Member have approved an 8. 5 cent increase in the price of milk in mid-August, if he were in my position? MR. SPEAKER: The hon. the Member for Humber Valley. MR. WOODFORD: My last supplementary, Mr. Speaker. Just a straightforward question.

Would the Minister tell the House if he is going to introduce legislation to strip the Board of its right to increase prices? MR . SPEAKER: The hon. the Minister of Forestry and Agriculture. - MR. FLIGHT: Mr. Speaker, I do not know why the Member is asking this. Yesterday, there was the question, did I intend to abolish the Milk Marketing Board? The answer is no, Mr. Speaker, at this point in time I have no intention. Am I going to bring in legislation to strip the Board? The Member should know I may not have to bring in legislation.

If I wanted to do that and the Cabinet decided it was the thing to do , I can do it without bringing in legislation; it can be done under the existing regulations. No, Mr. Speaker, at this point in time I have no intention of doing anything that will affect the operations of the Milk ·Marketing L20 December 5, 1989 Vol XLI Board as we presently know it, except that I will be very vigilant and not permit any price increases in milk in this Province until the Task Force reports. SOME HON. MEMBERS: Hear, hear! MR. SIMMS: . Mr. Speaker. MR. SPEAKER: The hon. the Opposition House Leader. MR. SIMMS: Mr.

Speaker, I have a question for my good friend, the Minister of Employment and Labour Relations. In the past, the Minister has publicly criticized the Private Sector Employment Program and has inferred, or maybe she has been more clear than inferred, she has probably said the Program was useless - she certainly inferred. In view of the fact that the St.

John's Board of Trade, representing a respected and large number of Newfoundland business firms, has publicly disagreed with the Minister's opinion of that Program and publicly called on ?er to reinstate the Program, does she now still feel that this Program was terrible, too terrible to initiate, or will she be giving serious - the Premier says, yes, but I am asking the Minister - consideration to the Board of Trade's request? What exactly does she plan to do? MR. SPEAKER: The hon. the Minister of Employment and Labour Relations. MS COWAN: Thank you, Mr. Speaker. The Board of Trade is only one No. 47 R20

L: lobby group in the Province. I am certainly happy to listen to them and intend to consult with them from time to time on employment programs, however, they are just that one group expressing their opinion and I take it under advisement. MR. SIMMS: We will see. We will see. MR. SPEAKER: The han. the Opposition House Leader. MR. SIMMS: So the Minister, I take it from her answer - she did not acknowledge the first part of the question. I assume the Minister says that the program was useless. She agrees with the Premier who just said yes, it was useless, the Private Sector Employment Program.

But the Minister has also said in the past that she will be developing her own new program. I think that is what she has said on occasion. I want to ask her this: Will the Minister be consulting with the Chairman of the Economy Recovery Commission, Dr. House, in putting together this so-called new program which she talks about? And would she, therefore, say then that she would consider recommendations from Dr. House to be more sound and more acceptable probably than the Private Sector Employment Program that we had brought in?

And can she elaborate a little on why she would be more inclined to accept recommendations from Dr. House than anybody else? MR. SPEAKER: The han. the Minister of Employment and Labour Relations. L21 December 5, 1989 Vol XLI MS COWAN: Mr. Speaker, I am flabbergasted!

But, anyway, I was only too pleased, actually, a couple of weeks ago to have a morning in the appropriate Division in my Department with the ~enior officials in Employment, at which I had present one of the members of the Economic Recovery Commission who made an absolutely splendid contribution and was extremely well received by the officials of my Department. I would certainly be only too delighted to have the input of that Commission at any time. That does not mean that I necessarily am going to act upon it, but I certainly am delighted by it and would - SOME HOM. MEMBERS: Hear, hear!

MS COWAN: To date, I have had no reason to believe that the direction they might offer to me would be inadvisable for me to accept. MR. SPEAKER: The han. Leader. the Opposition House MR. SIMMS: Well, Mr. Speaker, very interesting. SOME HOM. MEMBERS: Oh, oh! MR. SIMMS: this is really I have listened If Members will settle down, I will tell them why I find it interesting, Mr. Speaker, and I will ask the question while I am doing it. Cou~d she tell us, then, in ·view of ·her answer, how she can have such a contradictory position with respect to recommendations from Dr. House and No. 47 R21

the Commission, and his recommendations that were contained in the Royal Commission Report which you have also accused us of not implementing in the past? And specifically, what would she say if I told her that Dr. House praised the Peckford Administration, in a letter published publicly, on May 7, 1989, for responding and bringing in initiatives in response to his Royal Commission Employment Program, and specifically chastized those who misrepresent the facts by saying the Government did not bring in any new initiatives, such as the Premier and others?

But specifically I want to ask the Minister this: Is it not strange that the Minister to whom this Government - MR. BAKER: (Inaudible). MR. SIMMS: Is it not strange? that is a question. The hon. the Member for Gander does not understand, obviously. Is it not strange that the person in whom this Gove~ent has placed such confidence openly disagrees with the Premier, openly disagrees with the Government about new initiatives? In fact, Mr. Speaker, this s'ame Chairman of the Royal Commission has publicly praised the previous Administration for bringing in the Private Sector Employment Program.

That is my entire point. SOME HON. MEMBERS: Hear, hear! MR. SPEAKER (A. Snow): The hon. the Minister of Employment and Labour Relations. MS COWAN: Mr. Speaker, found strange the only was the L22 December 5, 1989 thing I premise Vol XLI actually of the Member. MR. SIMMS: No answer, obviously. MR. GILBERT: Mr. Speaker, I cannot hear what is going on down here with ' the crowd across there. SOME HON. MEMBERS: Oh, oh! MR. SPEAKER (Lush): Order, please! The bon. the Member for St. John's East. MS DUFF: Thank you, Mr. Speaker. My question is to the Minister of Finance (Dr. Kitchen).

Yesterday, the Minister tabled his mid-year Financial Report in the House which indicated that the projected current account surplus had gone from $5.3 million to $52 million. In view of this tenfold increase in the projected current account surplus, is the Minister prepared to be flexible with requests from his Cabinet colleagues for funding for important and necessary projects and activities which were not funded in this year's budget? MR. SPEAKER: The hon. the Minister of Finance. DR. KITCHEN: Mr.

Speaker, I have no intention to be wishy-washy. 'The budget deficit for this coming year is estimated to be $200 million, and when you are in the hole that much, you are not very fussy about spending ex~ra money. SOME HON. MEMBERS: Hear, hear! No. 47 R22

MS DUFF: I think the Minister is well aware that there is a difference between his - MR. SPEAKER: Order, please! I did not mean to stop the hon . Member in flight, but I had not recognized her. And there was a lot of noise, and I wanted to bring complete order for the Member. The hon ~ the Member for St. John's East. MS DUFF: Thank you very much, Mr. Speaker. I am sorry I forgot to wait to be recognized. The Minister, I know, can play with figures all he likes, but he is well aware there is a difference between capital and current account.

What we are talking about here is a current account surplus which is certainly in a far better position than anyone ever anticipated. And since this particular area of the budget was used as an excuse not to fund a lot of necessary programs, I would ask the Minister · again, dealing strictly with the current account surplus which has had a tenfold increase, if the Minister of Health were to go to Cabinet with a request for a Special Warrant in order to obtain funding to open the Agnes Pratt Home and the Dr.

Hugh Twomey Center, which he has indicated are terribly important and that he is desperately seeking funding, now would he help his desperate colleague by supporting a request for a Special Warrant? MR. SPEAKER: The hon. the Minister of Finance. L23 December 5, 1989 Vol XLI DR. KITCHEN: I do not like this distinction between current and · capital. It is not a distinction that is used in every jurisdiction. The fact remains that we have the highest per capita debt in Canada, apart from the Federal Government, and we have to watch it very carefully. Also, I might remind the hon.

Member that these figures were at the end of September. We still have six months to go before the end of the year. We have certain serious situations happening in the Province, and how that ' will end up by the end of March is very difficult to say. Secondly, I want to say, too, that not only is the hon. the Minister of Health asking for money, but so are all the other 14 Santa Clauses on this side, and so are all the 25 on the other, and what we have to be careful of is to protect the fiscal position of the Province. SOME HON. MEMBERS: Hear, hear! MR. SPEAKER: Question Period has expired. MR.

SIMMS: Could we just check with the Table, I understood from the Table that question period started at 2:45 . Is that correct? MR. SPEAKER: No, no. It started at - MR. SIMMS: Pardon . MR. SPEAKER: No, no, it started ~ AN HON. MEMBER: Do not question the ruling. MR. SIMMS: No. 47 R23

I did not question the ruling, I asked the clerk. MR. SPEAKER: No, it started at minutes (inaudible)- AN HON. MEMBER: (Inaudible). MR. SIMMS: seventeen Do not be so mad just because I tore strips off you yesterday, you do not have to get mad today. MR. SPEAKER: Twenty two minutes to - sorry. No problem, that is okay. Question period has expired. Answers to Questions for which Notice has been Given MR. SPEAKER: The bon. the Minister of Works, Services and Transportation. MR. GILBERT: Answer to question No. 37 proposed by the Member for Kilbride.

A list of all the highway projects approved since the passing of the 1989 - 1990 Budget in July of 1989, the estimate of the ·cost, the final accepted tender, the amount of the Federal money spent on the project, also, the amount of Provincial money spent on the project, when was the tender awarded, when is the expected completion date and who was the successful bidder. Attached is a list of the projects contained in the Provincial program together with the Tender Board reports for these projects. The Tender Board report contains the Department's estimated cost and the successful bidders.

All projects were tendered within thirty days of tender closing. The Provincial L24 December 5, 1989 Vol XLI program consists of a thirty million dollar program, at this point in time, a small carry over is anticipat~d, so the entire thirty million will not be spent. Federal money was not spent on these projects approved since the passing of the 1989 - 1990 Budget. Orders of the Day MR. BAKER: Order 11, Mr. Speaker. Motion, second reading of a Bill, ..

An Act Respecting The Economic Recovery Commission,.. (Bill No. 40). MR. SPEAKER: The bon. The Opposition House Leader. MR. SIMMS: Thank you, Mr. Continuing debate on introduced yesterday by The Premier, I suspect, did not quite hear. MR. SPEAKER: Bill 40. Yes, Recovery. MR. SIMMS: The Speaker. the Bill the bon. is it, I Economic Okay. Thank you, Mr. Speaker. Now, Mr.

Speaker, yesterday I made a few brief preliminary remarks at the beginning because the House was due to adjourn at 5: 00, so I really could not get into the thrust of what it was I wanted to say with respect to this particular piece of legislation - Legislation to introduce An Economic Recovery Commission. Now, Mr. Speaker, I made some reference to it today in question period by asking the Minister of Employment a couple of questions which I thought were rather • No. 47 R24

related to this legislation for a number of reasons, because yesterday in my preliminary remarks there were shots across the floor from Members of the Premier's Cabinet as well as Private Members, when I made reference to recommendations of the Royal Commission on Employment and Unemployment, and that we had, in fact, initiated a number of those recommendations, and the cat calls came from Members opposite saying, no, he did not, nothing was done, nothing was instituted and so on. Oh yes, Mr. Speaker, perhaps I .could read from Hansard for bon. Members.

Perhaps they would like me to read it from Hansard, if I can find it. In any event, Mr. Speaker, I know distinctly what Members over there said, and they said, we did not. So are you saying now then that we did implement a fair number of the recommendations? AN HOM. MEMBER: We never commented. MR. SIMMS: Oh, you never commented, no. Mr. Speaker, they said, we did not respond and act on the Royal Commission Report that was set up by Dr. House when he was doing it a couple of years ago. Page 48 and page 49 of Hansard, if the bon. Member would want to read through it, he wi 11 see there are clear references.

Not only that, today I think it was the Minister of Development, I am not sure but I am even going to see if I can get the Premier's attention in this somehow. I am not sure but · ·that the Premier might have suggested that we did not initiate any response to Dr. House's Royal Commission on L25 December 5, 1989 Vol XLI Unemployment and Certainly, Members suggest that. Employment. opposite did Well, Mr.

Speaker, I am pleased to say today that I did a little research overnight and I happened to find some references publicly where the Chairman of the Royal Commission, who is now the Chairman or Chairperson of the Economic Recovery Commission in fact denied any suggestions made by people in . the public including Members Opposite when they were in Opposition, denied that the Commission Report was not acted upon. He said that is not accurate , that is unfair.

Here is what he says in 'The Evening Telegram' of May 7, 1989 -Members may want to have a look at it. 'The former Chairman of the Royal Commission on Employment and Unemployment has disputed claims that the Commission's Report was ignored by the former Peckford Administration. ' So Dr. House himself has disputed the claims of those who suggested that the Report was not acted upon, and Members opposite here yesterday clearly said, that we had not acted upon it, which was not true. Mr.

Speaker, he goes on to say in a letter of the same date, a letter to the editor, Members opposite I re commend you read it, it is a letter to the Editor, highlighted and headlined 'Report Employment and Unemployment Victim of Misperceptions says Commission Head.' That is Dr. House. And he writes to say that he wants the opportunity to correct two common misperceptions about the report of the Royal Commission on Employment and Unemployment. First, I want to point out that the Report is not just about rural development and large scale No. 47 R25

industry, there was a misperception about that. Secondly, he says, the second common misperception is that the Report has not been acted upon. On the contrary says Doug House in this letter to the Editor, it has acted as a catalyst ' helping to shape many new initiatives, not only by both orders of Government, Federal and Provincial, but also by several non-governmental groups and agencies. So when the Minister of Development said yesterday across the House that we did not act on any of those recommendations from the Royal Commission, he was not exactly being fair and accurate. He did say it.

Now he can try to squirm out of- it, he said it. When I made reference to it yesterday, he said it, Mr. Speaker.

The Chairman of the Royal Commission, and now the Chairman of the Economic Recovery Commission says - if I could now get the attention of the Minister of Employment and Labour Relations because I want her to hear this, he says, on the contrary the report has been acted upon and has acted as a catalyst and so on, such initiatives include the Provincial Government's Private Sector Employment Program, highly praised by the Chairman now of the Economic Recovery Commission, contrary to the views expressed by the Premier, by the Minister of Employment and by others over on the other side, quite contrary.

Now, this is the same individual in whom all this confidence has been placed as the new Chairman of the Economic Recovery Commission who says publicly, and praises publicly, initiatives such as the Pr-ivate Sector Employment Program, yet · the Premier and the Minister of Employment and Labour Relations both say that is nonsense. The L26 December 5, 1989 Vol XLI reason I make the point, of course, is that if they are going to place so much confidence in Dr.

House, then obviously with this kind of differing view on employment programs, or programs that are suppose to create jobs, they will have a tough time getting along together. Not only, by the way, did Dr.

House praise the former Peckford Government for bringing in the Private Sector Employment Program, but he went on to praise the previous Government for bringing in the Newfoundland Stocks Savings Plan, for the organizing structure of the new community college system, he praised us for that, for the Newfoundland and Labrador Development Corporation's proposal to improve information availability in communications throughout the Province. I make that point because I think that is part of the mandate, responsibilities, and duties of the new Economic Recovery Commission. It is already covered by the NLDC.

He also praised -the Government for new support for the service sector in our economy. He talks about some of the Federal Government's initiatives like ACOA. AN HON. MEMBER: Where did you get your glasses? MR. SIMMS: I got them at Woolworth's. When you are in Opposition you cannot afford the big expensive glasses like you fellows over there. New support for entrepreneurial initiatives both within the Government and within the private sec tor. Mr. Speaker, the growth of the Great Northern Peninsula Developoment Corporation and the support it received from both Federal and Provincial Departments of Fisheries.

The growth of No. 47 R26

Employment and Immigrations Canadas Communities Future Program, on and on, and on, it goes, Mr. Speaker. The Chairman, now, of the Economic Recovery Commission, on May 7 in a public letter, praised the previous Administration, so let us have no more nonsense from Members opposite about attacking this party because it was the Government for seventeen years and did nothing and all that sort of thing. I suspect the Minister of Social Services is getting ready to get up to respond.

I have a funny feeling he might be going next, so we look forward to his participation after having been out of the foray for the last four or five weeks. We look forward to his colorful interjection and I hope that he will speak to the Bill itself and address - AN HOM. MEMBER: Like you do. MR. SIMMS: Like I did. - and address comments that were made yesterday in the debate by the Premier. That is where these representations have come from. Yesterday, I talked a bit about the makeup of the new Commission. I talked about its mandate and I talked about its duties.

And, I talked about the similarity between the mandate and the duties of this new Economic Recovery Commission being suspiciously like the mandate and duties of many other Government Departments and agencies. Rural Development, the Department of Development, the Rural Development Loan Board perhaps you will listen to me, Mr. Speaker - and other Government arms and agencies. In other words it is a duplication of what is already in existence here. That L27 December 5, 1989 Vol XLI was the point I was trying to make yesterday in my few brief preliminary remarks. I also made the point, of course, therefore, Mr.

Speaker, that what is happening is that this Government and this Cabinet is abdicating its responsibilities. They have given this Commission more power than most Government Departments have. They have given up their own power. AN HOM. MEMBER: They do not themselves. MR. SIMMS: have faith in They do not have faith in themselves. That is precisely what has happened. All you have to do is read clearly, read through the Bill, and you will see the power that has been bestowed upon this new Economic Recovery Commission. Why do we have this agency?

We have Departments, we have agencies, we have Cabinet Ministers, we have a Government, we have a Cabinet. Why spend $25 or $30 million to duplicate the mandate and duties of Government Departments and agencies that are already in existence? That is the question. I made the point also yesterday about the survey. The Minister of Development was familiar with the survey that was done on Newfoundland businesses. Of 107 businesses surveyed in Newfoundland, twenty-four per cent of them did not know that a program like ACOA existed, for example. Now, that is a bit frightening, actually.

So, how is the Government proposing to overcome that lack of knowledge about a program like ACOA, which has been existence for three years and promoted all to pieces, with its new program, the Economic Recovery Commission? Who is going to know about the Economic Recovery Commission, Mr. Speaker? No. 47 R27

Mr. Speaker, we have heard Members on the Government side make reference to the fact that the Economic R~covery Commission is going to be a stimulant to business and to job generation. That is what the Government have been trying to say about the Economic Recovery Commission. I think it has also been said - and I think Dr. House himself has said it in a speech to Rotary some time ago - they will not be a lending institution. It is not their role to provide money; it is their role to guide people through the process, help cut out red tape, that sort of thing. Now, I believe - and the Member for Port de Grave (Mr.

Efford) can correct me if I am wrong - I believe he has said that publicly. It certainly is an impression that is out there. But, if you read the Bill,

Section 9 of the Bill says it will have the powers to lend and grant money to a person starting a business. But the Chairman of the Commission has said publicly, as far as I know, that that is not its role. AN HON. MEMBER: (Inaudible). MR. SIMMS: Yes, I Speaker. out. am pretty sure, Mr. I am sure I could find So there is obviously confusion out there. The press will remember it, for certain. So there is a point I would like somebody to clarify for me. The Chairman of the Commission says it is not its role to lend money to people to help them start businesses, yet, under the Bill,

Section 9, it says they have the power to lend and grant money to a • L28 December 5, 1989 Vol XLI person starting a business. Perhaps the Minister of Development (Mr. Furey), who is probably the most knowledgeable person on this piece of legislation, next to the Premier - AN HON. MEMBER: (Inaudible) sit on the Board of Directors of NLDC (inaudible). MR. SIMMS: I am not talking about sitting on the Board of Directors of NLDC, I am talking about the legislation. It provides for lending and granting money to a person to start business.

But, the Chairman of the Commission, in a public speech to Rotary, I believe it was, a couple of months ago, said it is not their role to lend money or grant money, their role is to help people through the system. So the Minister might want to check it. Perhaps he could check it. Now, Mr. Speaker, I pointed out yesterday, already we have $750,000, I suppose for salaries of commissioners - not $750,000, I am sorry, over $250 _,000 for salaries of the five commissioners that are there, hundreds of thousands of dollars for employees' salaries and expenses.

There is no limit in the legislation to the number of employees they can hire. Their budget this year is $3 · million. It may be less in terms of expenditure, but it is on the year-ends . But next year, it might be more. Who knows? - We really do not know, and I am sure we will get somebody to make that point. So, now we have, Mr. Speaker, a Cabinet, an Economic Recovery Commission, we have the Economic Council of Newfoundland and No. 47 R28

Labrador, we have Department of Development and Tourism, the Rural Development Loan Board, all of these Departments and agencies, all with the same duties and responsibilities, basically the same kind of mandate. But now, we have an Economic Recovery Commission, as well, Mr . Speaker, and we want to know what will it do? What exactly will it do instead of just helping people through the system, cut out red tape? If. that is what it is expected to do, well, then that is what Members and Members' staff are for.

So, I would like the Member for Port de Grave, the Minister of Social Services, perhaps, to comment on that in a legitimate way. Now, in addition to all of this, I understand the Premier has made a commitment, I believe, for Newfoundland and Labrador now to become a member of the Atlantic Provinces Economic Council, APEC: I believe he has given a commitment to that end, has he not? It has been reported that he ·has. AN HON. MEMBER: (Inaudible). MR. SIMMS: I am just wondering if he has given a commitment. I understand he has. AN HON. MEMBER: (Inaudible). MR. SIMMS: Well, he can answer when the time comes.

I just said I believe he has given a commitment. It has been publicly reported. Perhaps when he closes debate on the Bill, he can mention that, and tell us L29 December 5, 1989 Vol XLI what it costs. I understand that might cost $30,000 or $40,000, I am not sure. Another $30,000 or $40,000 to join APEC, would that be accurate? AN HON. MEMBER: (Inaudible). MR. SIMMS: Well no, in the full fiscal year. To become a member of APEC would the fee be anywhere between $30, 000 and $40, 000 would the Premier know? Or does he know offhand? PREMIER WELLS: If he wants to I will take thirty seconds? MR.

SIMMS: Sure, we will try it. PREMIER WELLS: If he will just yield for a minute. MR. SPEAKER: The bon. the Premier. PREMIER WELLS: What we have done, Mr. Speaker, is not become a member of APEC. There are quite a number of Newfoundland businesses that are members of APEC and have supported APEC over the years. Newfoundland and Labrador is one of the Atlantic Provinces, the Government felt it appropriate that Newfoundland and Labrador should contribute a reasonable amount to the cost of the very beneficial work that that organization does, because we get a great deal of benefit from it.

This year it will be $17,000. Next year for the full year it is expected to be something between $17,000 and $25,000. MR. SIMMS: Mr. ·Speaker. No. 47 R29

MR. SPEAKER: The hon. the Opposition. MR. SIMMS: Leader Thank you, Mr. Speaker. of the Okay well I appreciate the information provided from the Premier. The point I was trying to make, and the Premier perhaps was out earlier, was about the duplication. We have all the Government Departments, we have all these agencies, now we have an Economic Recovery Commission, ·we have the Economic Council of Newfoundland and Labrador, which is still in existence, I believe it is still in existence, I presume. Unfortunately I think it has been overshadowed by all of this.

And now .we are going to spend another $17,000 this year, it may be up to $25,000 next year to become apart of APEC. So there appears to be a considerable amount of duplication and that is the point, and ·where is all of this going to end? And when is somebody sort of going to take the bull by the horn? That is the point I am making. Somebody has to be the boss in all of this.

And aside from giving away all the powers of the Cabinet and the Government to the Economic Recovery Commission, which this legislation does, if you read it, well, the Premier can say no, but I will tell you there will be a lot of people who will disagree with him, Mr. Speaker. It will be interesting to see the first report of the Commission which is due, by the way, to the Premier within three months after the fiscal year ends. The f i:rst report is due within three months after the fiscal year ends.

I do not know why it would not be L30 December 5, 1989 Vol XLI required sometime before that because if the fiscal year ends the end of March, it would be perhaps up until the end of June before the Premier gets it. Then the Premier under the legislation does not have to give it to the House for thirty days after that. and if the House is not sitting then the report does not have to be tabled until thirty days after the House opens, which means we might never see a report until November, December, even though their year ended the end of March.

So maybe in Committee stage you might want to give some consideration to making some minor amendments there. Perhaps forty days would be adequate for a Commission to give its report to the Premier and in twenty days or fifteen days would be adequate for the Premier to report to the Legislature. It would be nice to have it before the House closes the end of June. It is not much point in getting it in November. So I make that point and perhaps he might look at amending

Section 18, Clauses (1) and (2), and also the

section which talks about the Premier which section. is a separate Now, Mr. Speaker, that is just a brief rundown through the bill itself. I had a chance to read through it myself, and some preliminary comments on some of the various issues. Now, Mr. Speaker, our approach to this bill, I will tell the Government now at the outset what our approach will be, it will be thus, we have sixteen Members at least on this side of the House who want to have their say on this piece of legislation, we have sixteen so far who want to have their say, who want to speak to the legislation, we consider it to be No. 47 R30

a significant piece of legislation, a significant undertaking by the Government and so we will be debating the bill thoroughly I can assure you. So I want to say that at the outset, in case anybody is wondering. There will be lots of questions that they will want to ask and the Premier, of course, will want to take note of all of those questions, those that he considers of importance, I suppose, and respond whenever he closes the debate. The Leader of the Opposition (Mr.

Rideout) who unfortunately who was not here yesterday to respond to the bill because he was ill, he is here today and he will follow me after the interjection over there from the other side, just to mention that. And he has a considerable number of questions which he will be asking. And in view of the Government's approach - MR. BAKER: What about amendments. MR. SIMMS : I beg your pardon? MR. BAKER: What about amendments? MR. SIMMS: Amendments? We will see about amendments when the time comes. The Government House Leader (Mr.

Baker) need not threaten us or I should not say 'threat' because he is not threatening us, he is encouraging us. The Government House Leader need not encourage us. There is no need of it. But I will say this in view of the approach by the Government on this particular piece of legislation, L31 December 5, 1989 Vol XLI in view of the fact that they have bypassed the process of sending legislation to Committees, in view of the fact that they have breached their agreement with respect to sending legislation to Committees, as per the ruling by the Speaker yesterday, AN HON. MEMBER: (Inaudible) . MR. SIMMS: Yes, Mr.

Speaker, as per the ruling, the Government has breached its agreement. That is what the Speaker ruled yesterday, if I can find it or if somebody can find it there for me. In view of that, Mr. Speaker, in not giving, contrary to their statements on June 30 publicly in this Legislature, by the Government House Leader in not giving the public the opportunity that it deserves to have input into this legislation, by sneaking it in through the backdoor just before Christmas when most people, he thinks or they think will not be listening, and will not be able to publicly scrutinize this, Mr.

Speaker, because of all of those lack of opportunities contrary to their commitment given in this House on June 30th, contrary to the resolution that was approved in this House by a majority. They have now breached their agreement in this regard.

So in view of the fact that that is the approach they have agreed to take and ,decided to take, then if the Government will not allow the public an opportunity to have their say on this legislation, if the Government will not allow the public and the Members, the private Members in particular, an opportunity to have some input into this legislation, as was perceived by setting up a committee structure in the first No. 47 R31

place, will not allow the public to have an opportunity to present some constructive criticisms. Mr. Speaker, I will just quote the Speaker's ruling yesterday in Hansard page R23, and this comes from the Speaker's ruling, "now the Government have decided that they are going to do otherwise, so, as the Chair has ruled in this particular case, clearly, the Government have, if you will, breached the agreement that they made. " So, Mr. Speaker, they can shake their heads all they want.

They do not like to hear the fact that they have been accused of breaching their agreement, but here is the ruling made by the Speaker, and, of course, it substantiates the argument. AN HON. MEMBER: (Inaudible). MR. SIMMS: The Speaker is wrong, is he? I see, it is only the Premier that is right, is that not funny? Nobody is right, only the Premier. Well, Mr. Speaker - AN HON. MEMBER: He is wrong. MR. SIMMS: He is not wrong. He is absolutely correct, Mr. Speaker.

This Government has backed off on its promise and its commitment, and backed off on a resolution that was passed by the whole of th~ House, on June 30th to send legislation, particularly legislation of importance to the committees so the committees could have public hearings around the · Province if they decided to, and they have decided to sidestep that, break their agreement, breach their agreement, come in through the back door, bring it L32 December 5, 1989 Vol XLI into the House, try to shove it through just before Christmas, a couple of weeks before Christmas when they think nobody is going to be listening.

Now that is what has happened. They can shake their heads all they want. And in view of the fact that they have done that, I want to tell them that we will be giving the Bill an extensive review, extensive scrutiny, and we may even have some other ideas and suggestions to tell the Government about as time goes on. Now, unless the Government is willing to relent and acknowledge, I mean either this is an important piece of legislation or it is not. There is certainly no emergency here which is the argument the Government House Leader tried to use for bypassing the agreement.

If there is an emergency - PREMIER WELLS: There was no agreement. MR. SIMMS: There was an agreement. Mr. Speaker, the Government House Leader got up yesterday and talked about the agreement we had. What is wrong with the Premier, does he read or what? Why will the Premier not reconsider this particular matter? Why will the Premier not send this legislation to the Committee with instructions, since it is so significant and so important, to have some hearings around the Province deal with the legislation, bring it back to the House whenever the time comes with its report.

I do not understand why the Premier is so headstrong on this. I cannot understand it, Mr. Speaker. Anyway, Mr. ask just a No. 47 Speaker , I wan ted to few questions. I do R32

not have a lot of time remaining. I cannot remember when I started. I want to ask a number of questions. and maybe the Premier can note them and tell me. And these. by the way. are questions and comments that have been put to me by individuals. and some members of some groups. community groups and organizations •. and I will tell him this is a fact. Here are some of the questions. How many jobs has this commission created since it was put in place six months ago? How many businesses has it created or helped to create? How much money in loans and grants has it distributed? Is Dr.

House to become even more visible than he has been in the past? These are questions that have been asked. Is he going to continue to speak for the Government on financial and economic matters? Why do we need a Minister of Development? These are all questions that people have been asking. and I hope the ~remier will mark them down and respond to them all. Why do we need a Minister of Development? Already this Commission has increased its power by taking over NLDC. even though it is generally acknowledged that NLDC has been highly successful. So the question is why? Why?

The president of NLDC has always reported directly to a Minister, now the new president will only report to Dr. House. himself. Who has the power here. the Minister or the Chairman of the Economic Recovery Commission? Mr. Speaker. Dr. House said in a speech not long ago. a business luncheon. •This commission that he heads is an Advisory body to the Government. • Now, Mr. Speaker, I think and I suggest that that is far. far from being forthcoming about the role of this particular . L33 December 5, 1989 Vol XLI Commission. It is not simply an Advisory Body to the Government.

He has said so publicly; I will get the quote for the Premi~r. The Bill clearly shows, if you read it. that it has much. much more power than that, more power than some Government Departments and Agencies have . They can do a lot of things directly. not simply advise the · Government. So it is not fair for him to suggest that they are an Advisory Body to the Government, but that is what he has said. What experience do the five members on the Commission have in the business field? As I understand it, it is very limited.

How can bureaucrats, unelected people who have never had to try to meet a payroll, tell those who have how to meet one?

How can bureaucrats who have never taken any risk themselves in the business world, never gambled in the business world, never had any entrepreneurial spirit, how can bureaucrats who have not got that kind of experience try to persuade others that they should do it, perhaps suggest that they might have to mortgage their homes to invest in a business. or they might have to spend a lot of their own personal money, even though these people themselves have absolutely no experience in that regard and, therefore, very little credibility in that regard? Mr.

Speaker, the most difficult thing to swallow is the Premier• s comment that neither his office nor any other arm of Government will direct the Commission on how to carry out its mandate. PREMIER WELLS : The day-to-day (inaudible). MR. SIMMS: No. 47 R33

Well, now, Mr. Speaker, the Premier denies everything. But I am saying to the Premier we can only go by what he has said publicly, is reported to have said publicly. He does not tell us in the House what he says, but that is what he is reported to have said. 'Neither his office nor any other arm of Gove ·rnment will direct the Commission on how to carry out its mandate.• If he says he did not say that, well then, I accept that, but certainly, the perception out there is that is what you have said, that the Commission will run its own show.

And if it is not correct, then I am delighted to hear the Premier acknowledge today that that is not correct, and that he was misquoted, or wrong, because, in fact, he will be directing the Commission on how to carry out its mandate, that is what he is saying here today. I hope I am correctly understanding and interpreting. But, Mr. Speaker, the mandate of this Commission and the duties and responsibilities of the Commission as outlined in the legislation is precisely the mandate and the duties given to Members of the Cabinet.

The Executive Council are the ones who have the responsibility to carry out the mandate and the duties outlined in this legislation, not the Economic Recovery Commission, I submit to Members opposite. Mr. Speaker, Dr. House, himself, has said publicly, has said publicly, and again I say I understand he has said it publicly, I have seen it in newspaper stories, he has said and he acknowledged the mandate is to create jobs. That is the strongest comment, I suppose, made by Dr.

House, himself, but he has gone on to admit already, and here is the most telling statement by L34 December 5, 1989 Vol XLI the Chairman of the Commission - I would really like the Premier to respond to this and acknowledge whether it is correct oF not that their mandate is to create jobs, but he has also gone on to admit publicly and I quote, as far as I know, • We are not capable of fulfilling it.• That is our mandate. So Dr. House, himself, publicly has said, 'We are not even capable of fulfilling our mandate. • The Premier is shaking his head.

I can tell . the Premier that is what the gentleman said at a business luncheon. He said it is up to the private sector, we are not capable of fulfilling our mandate. Now, he has hardly been in the job, he has only been there since June, and already he is admitting he cannot fulfill the mandate given to him under this legislation, and he says, 'It is up to the private sector. We are dependent on you, not vice versa.• That is where he made the quote about not being able to make loans or grants, or not going to make loans or grants, yet, Mr. Speaker, in the legislation, under

Section 9, it gives them the power to . provide loans and grants. So which is right? Who is right? What is what? Mr. Speaker, there is nothing but utter confusion, I submit to the Chair and to the Government. So the question then has to be asked, why are we wasting $3 million a year for eight or nine years, as the Premier says? He has certainly said that. The Premier said it will take eight or nine years to see anything fully developed out of this; $3 million a year, $25 million or $30 million. Why are we doing it if we have appointed a Commission whose Commissioner has publicly No. 47 R34

said, 'We are not able to fulfill our mandate'? Why are we doing it? It does not make sense, Mr. Speaker. Why does the Commission report only to the Premier? That is another question. Does the Premier have so little confidence in his colleagues, the Cabinet of this Province, the Executive Council, the Minister of Development, maybe? He does not have enough confidence in them for obvious reasons, Mr. Speaker. MR. TOBIN: Why are they (inaudible)? MR. SIMMS: I only have a few minutes left. Let me try to conclude, .now.

The hon. the Member for Burin - Placentia West, I will ask him this in response to his question to me. I asked the question, Why is he reporting to the Premier? I want to know why. I am not asking why not, I am asking why. Why, for example, should not the Minister of Development have a bit more involvement here? He is the Minister of Development. He is the Minister responsible for development in the Province. He is the Minister responsible for initiating new ideas to generate jobs and to generate new businesses. He is the Minister.

I would give it to the Minister of Development and let the Minister of Development deal with the Economic Recovery Commission, Mr. Speaker. He is the Minister with the most responsibility for that very same mandate described in this legislation for the Economic Recovery Commission. And the reason why not, by the way, is because the Government is made up of the Ministers. The Government is not the Premier. There are L35 December 5, 1989 Vol XLt fifteen Ministers around the table. That is the Government. So the Commission should report to the Government through the appropriate Minister, the Minister of Development.

It is a question that has been asked, Mr. Speaker. I guess I only have a couple of minutes left, Mr. Speaker, so I will simply conclude by saying this: Dr. House has not been elected to carry out this mandate. The Government of the Province has been elected to carry out this mandate, not Dr. House. That is the point I want to make, Mr. Speaker. Clearly, I guess, it is an abdication of the responsibility of the Members of the Cabinet. That is the argument and that certainly contravenes everything that we understand in a democratic society, a democratically elected Government.

It contravenes everything that we know about in a democracy, by abdicating their responsibility, giving away all their responsibilities and powers to an outside, unelected bureaucratic agency. I do not think that is correct. I do not think that is the right way to proceed. I do not think that is the right way to proceed, and I make those points and I express my views in that regard, which I have a right to do. Hopefully the Minister and the Premier will be able to argue and convince me that I should not have anything to fear. But I have a lot to fear at the present time, and I am not alone. Mr.

Speaker, I am not alone, I can assure you. I say again to the Government, I wish they would reconsider their harsh decision not to let the Committees, who have capable Chairpeople and Vice-Chairpeople, individuals who, as private No. 47 R35

Members, do not have the same opportunity for input into legislation by sitting around the Cabinet table, because they do not - they should have the opportunity to lead groups of MHAs around the Province to have public hearings, to let the public propose or put forth criticisms or put forth thanks, or whatever they wish to do, to these Members, so that the public has an input, and so that the MHAs, the private Members in this House in particular, have some opportunities as well. I leave my comments with that request.

I beg the Government House Leader, I beg him, to reconsider this matter because it is extremely important, unless they consider it is not all that serious or important, Thank you, Mr. Speaker. SOME HON. MEMBERS: Hear, hear! MR. SPEAKER: anyway. The han. the Minister of Social Services. MR. EFFORD: Thank you, Mr. Speaker. It is good to be called the Minister of Social Services again by Your Honour. It is certainly a good feeling today to have this put behind me once and for all.

I would have thought that Leader No. 2, or the second Leader of the Opposition, would have at least stayed in the House of Assembly, but I guess they do not want to hear any productive comment from the Government side of the House. I listened, we listened, in fact, all Members on this side of the House listened very attentatively to Leader No. 2 over there, and we thought in thirty minutes of L36 December 5, 1989 Vol XLI speaking, that we would have heard something positive. Because that is the job of the Opposition, to be critical. And nobody is going to downplay them for that.

They have a job to do, to be critical of Government and to be critical in a sort of constructive manner. When you take your job very seriously, you are going to find mistakes made by the Government side of the House. There is nobody perfect, and there is nobody on this side of the House trying to put forth the impression that they are perfect.

But when you stand in your place for thirty minutes and you talk about a Bill that is before the House of Assembly and you take up the time of the House of Assembly, the people's time, because the House of Assembly is the people's House, and where what affects the people of the Province is debated back and forth, you would think that something constructive would come out of thirty minutes speaking. I do not know how many years the Opposition House Leader was on this side, but we will say it was approximately ten years anyhow, ten years in an administration that formed the Government for seventeen years.

You ask the question, Why is the Economic Recovery Bill before the House? Why would a Government today have to do this? That is the question you have to ask. Is it because there is no need to have this particular Recovery Team in the Province of Newfoundland and Labrador? Is there absolutely no need for it? Do we have such employment here in this Province that we do not need Government activity? We do not need a Recovery Team, we do not need anybody put in place. The Economic Recovery Team is absolutely unnecessary, according No. 47 R36

to the Leader of the Opposition, Leader No. 2, the Opposition House Leader. Let me give you an example: In my first week in the Department of Social Services, as Minister of Social Services, I found that last year, in 1988, the former Administration took credit for creating a number of jobs in the Province of Newfoundland and Labrador. In fact, it was something like 8,000 or 9,000 jobs they took credit for last year.

In the Department of Social Services alone 13,500 jobs were created by the Department of Social Services, by the former Administration, a Member of which stands in his place today and says we have absolutely no need for an Economic Recovery Team, Newfoundland is prosperous, Newfoundland does not need that any more. Thirteen thousand five hundred jobs were created for a ten week period, ten weeks at $200 a week, out of which people had to pay for all the essentials, rent, drugs, mortgage payments, food, money to send their children to school, to buy lunches, to buy books, to buy clothes.

Whatever the essential needs of a family of four or five, or whatever, that is what the limitations were, $200 a week for a ten week period. Then they were laid off for three or four weeks, in which period they had absolutely no income whatsoever. During that period of time they had to file for unemployment insurance which meant they had another waiting period of a week or two to get the UI benefits which resulted in approximately $124 to $125 a week.

Now they are talking about 13,500 jobs in the Province of Newfoundland and Labrador, jobs created by the former L37 December 5, 1989 Vol XLI Administration, jobs created for the people. That is the type of thing they stand and boast about. People cannot even afford to buy the basic essentials, a bit of decent food.

And when you talk to families in all the districts, and I cannot single out any one district in the Province, Port de Grave District is no different from any other District, you have a certain number of people who are not skilled in trades, who have probably dropped out of high school for some reason or another, who are not skilled to go off and find jobs in other parts of the country. They just do not have the initiative or the ability. You cannot fault human beings for that. But that is the system, some people are like that.

Now when you see a family with an income created by the former administration and which they were bragging about, creating jobs for $5 an hour, and when you talk to those families and you say, 'what is your problem? • The problem is this very simply, 'my son is going to High School,' and if anyone wants to question it they should have a second look at the position they are in. • My son is going to High School.

The only thing I could afford to feed him last week was rice. • And that is not exageration, that is not dramatising, that is not sensationalizing, that is factual, and no Member on this side of the House or that side of the House can stand up and say what I am saying is wrong. And 13 500 families who worked on those programs, Mr. Speaker, that is the conditions that they live under, and in many cases they cannot even afford to buy that type of food. They either have to make a choice of paying the light bill, or No. 47 R37

buying the bit of oil, and doing without a simple thing like a box · of rice. And that is the reason why you have so many. children going to school day after day, week after week, no mitts on their hands, no boots on their feet, and no food in their stomachs. Talk to the teachers in the High Schools, talk to the people. Now is it their fault, is it their fault? No, it is not their fault that there is no work there, that there is no jobs there, no productive jobs, no decent wages for them. They are people, in most parts, who have to contend with that. .

And the way the economy of the Province is going now, and the down-tum in the fishery and the crisis in the Province as a whole, I mean, you are going to get probably double that amount in the next 2 - 4 years before the whole mess is straightened out, people are going to be living under those conditions. So, what do you do? What is the Government supposed to do? Continue on with status quo, let everything remain the same, let all of the mistakes that the former Administration made, all the bungles, all the errors that they made, and the people that are left in desperation continue the same?

Is that what the people elected this Government for? If they had wanted that they would have put the 29 day Premier back in office, but they did not do that because they knew he had no better ideas than the former Administration because he was part of that Administration. They saw examples of their initiative to create a viable economy, the private sector program continuously asking questions back and forth to the Minister of Labour and Employment about the private sector program. The L38 December 5, 1989 Vol XLI private sector program basically was no better than the social services program.

It was short term employment in most cases. Probably there were some isolated cases where somebody went into the workforce, cost-shared by the Government into the grocery store for a six month or three month period, whatever the term the private sector program allowed, and probably there were two or three in some communi ties who did get permanent employment out of it. But when you look at the whole private sector program, and you take what it has accomplished and weigh it against what it was costing, there was really no significant gain to improve the lives of people.

There was really nothing significant coming out of it that the people could depend on like, I have a permanent job, I am getting some training in some sort of a skill that I can take on a permanent job that I could supply a decent living for my family. But that is the type of programs that the former Government put into being, and I have no doubt that Dr. Doug House did congratulate them on their ability. I congratulate a student in kindergarden on the ability that they can do to learn how to read because that is their ability in kindergarden.

You congratulate them on their ability and you pat them on the back, and if that is all the ability they had to create the private sector program, or to create the social services program, well, you congratulate them for that ability. And I suspect that is what Dr. House is talking about. He congratulated them on the initiative and the ability there because that was all that they were capable of doing. That is about the size of it. There is no question, we cannot argue that, Dr. House is pointing No. 47 R38

us right in making that kind of a statement. SOME HON. MEMBERS: Hear, hear! MR. EFFORD: As critic for the Opposition at the time, I was critic of Health, I was critic of Social Services, I was critic of Public Consumer Affairs, Public Works, I criticized the Government as I fought for the things that they should be doing that they were not doing. And I thought I was legitimate in what I was saying. Now, that I am Minister of Social Service, I have the responsibility of the things that I criticized, the things that I saw were being put into a form by the former Administration.

It is my responsibility now to implement that in my Department. And we have taken on the whole community development program. Can you imagine, Mr. Speaker, last year there was $30 million spent in the community development program to put 13,500 people to work for a ten week period, and then on U. I. benefits for the remainder 38-40 weeks on $124 a week. We spent $30 million to do that. What for? What did we gain for it? What purpose did we serve? I do not see that as Minister of Social Services when I criticize that particular program that I can be contented and be satisfied with it and allow it to go on.

What do I do now? What do I do? I look at that program. We have already drawn up terms of reference. We have talked to the Economic Recovery Commission and we are seeking their advice. Their mandate is to go out there and look at what the Province's ability is all about and to say, are these programs working? Is L39 December 5, 1989 Vol XLI what the former Government, regardless of their politics, because politics has nothing whatsoever to do with the Economic Recovery Team, they are not looking at the past, they are looking at the future. They have a job to turn around the economy of this Province.

To use the resources of this Province to keep the people employed in the Province and to do something about the young people in the Province, our greatest resource, to keep them in the Province. Because if we continue to lose the young people, our skilled ~eople and our tradesman to other parts of Canada and to Ontario, at the rate that we were losing them when the former Administration was in power, a generation or a decade down the road we are not going to have any young people in the Province. If you do not have young people in the Province you do not have any future.

No Province, no country, no area can survive without youth. The youth are the greatest natural resource that you can have in the Province. Now, what do we do with the $30 million in the Community Development Program? One, we take it and we start training the people. We start educating the people. Not everybody is an academic. Not everybody can be a doctor or a lawyer or a preacher.

You have to have skills in some other form of vocation, and if somebody has the ability but they cannot make it in school and they want to drop out of school, they want to learn something else, you do an assessment of their skills, and you put some money into it. You give them an opportunity, because their whole family probably cannot afford it, being on social services, or being dependent upon a low income or No. 47 R39

Private Sector Program or whatever. So you take that type of individual and you start to work with him, you start to assess their needs and assess their skills and try to get them away from the first, second, and third generation of social services. That is the type of thing you have to do if you want to work through a strong future a good economic future you have to work with the unskilled and the youth of this Province. You start there with some solid base.

You are not going to turn it around overnight, the Premier said the other day, he does not expect the Economy Recovery Team in the next one, two, or three years to turn around the Province and to put everybody into the form of work that everybody is going to have a job, the streets are going to be paved with gold, nobody has ever said that. But what the Premier did say, was we wanted to do something constructive. First, we admit there is a problem there.

We have a problem in the fishery, we have a problem in the private sector, we have a problem in the social services area, we have a problem with the population as a whole in the work force. There are not enough jobs in the Province for the people of the Province to earn a decent living. so firstly, we have admitted something they still have not admitted. Seventeen years in Government, six or eight months on the Opposition and they still have will not admit there is a problem in the Province. They still boast that everything they did was right.

We have about 40 per cent of the population of Newfoundland and Labrador living about $8,000 below the Canadian poverty level. Can L40 December 5, 1989 Vol XLI you image, 40 per cent of your population living about $8,000 a year below the poverty level in Canada. And they say that everything is all right. Well, I say to Leader number two over there, the Opposition House Leader, that something is drastically wrong. I was reading a statement, I think this must have come out of 'The Evening Telegram•. I will show you, to give you an idea of the type of respect now the bon. gentleman has in his own District.

When a gentleman from his own District says, 'six years ago when we lost no. 5 machine we got absolutely no satisfaction from the PC Government.' That is not this side of the House saying that. That is a quote in the paper from the Grand Falls area. 'And now he is saying that the Liberals are not going to be strong enough, they are not going to do enough, and he was our Member for the last six years, and he did absolutely nothing for us. ' That is not me, I am not saying that, that is on all your desks. Now, turning on us now about the No. 6 machine. And Mr.

Speaker, these are not something that had been dreamed up. These are facts. These are quotes made in the newspaper for anybody over there on the Opposition to read. First of all we have admitted there is a problem there but apparently you are still not listening. Now, if you wish me to come over, sit down and talk to you, whisper softly, anyway you can understand it, then I will certainly do it, but you certainly are not listening. I have stood here for the last ten or fifteen minutes and I told you exactly some of the steps that we are No. 47 R40

going to take, some of the things we are going to do. MS VERGE: (Inaudible) for Grand Falls and Central Newfoundland. MR. EFFORD: We listened this afternoon to the Member for Grand Falls (Mr Sinuns) saying that we will not give an opportunity for people to debate it, and the general public cannot hear it. What are we doing? Each and every Member over there has the opportunity to stand up and discuss it for thirty minutes, debate it for thirty minutes. They insinuate, threats accross the House, oh, we will keep you here until Christmas. I do not care if you keep us here until next Christmas.

I am just as contented in this House of Assembly as I am anywhere else in the Province of Newfoundland and Labrador. What I want is a better future. If you wish to light the Christmas tree here, by all means. If you wish to have turkey dinner served here, by all means. You are not going to threaten us whatsoever. In fact, if you want me to serve it I will even serve it for you. There is no problem whatsoever. It is no good for the Opposition House Leader to stand up and say, well, if the Members opposite do not give us some debate in this House we are going to keep you here until Christmas. AN HON.

MEMBER: (Inaudible) paper plates. MR. EFFORD: It would doing it. that. not be my first time I have no problem with MS VERGE: (Inaudible) have you? L41 December 5, 1989 Vol XLI MR. EFFORD: Yes. He also pointed out a number of times in his speech that a lot of people in the Province did not know anything about ACOA. Now, whose fault is that? Whose fault is it that the people of the Province do not know about ACOA? DR. KITCHEN: We can blame it on Santa Claus. MR. EFFORD: The Minister of Finance says we can blame it on Santa Claus.

Surely goodness you are not going to point fingers across the House and say, it is your fault over there that the businesses of the Province do not know what ACOA is all about. They do not know about the money they are allowed. It is inconceivable to know that they could not understand. The fact that the business people of this Province do not know about ACOA is not the fault of this Administration. They should look in the mirror and take the responsibility. But we are not interested. They do not want to take the responsibility. We do not care what happened in the past. We know they were a complete failure.

We know where they are sitting. Oh, it is so good to be over here and looking over there. It is so good. SOME HON. MEMBERS: Hear, hear! MR. EFFORD: Do I ever feel good when I remember the days when I stood up in the House · of Assembly and I pointed at those Ministers on the other side and said, your days are numbered, and sure were we right on that situation. But, I can tell you one thing, Mr. Speaker, No. 47 R41

they will be over there a lot longer than they were over here so they can prepare. Mr. Speaker, I do not know if gambling is allowed in the House of Assembly, but if it is allowed I will take the bon. Member's bet any time at all. I will have no hesitation. There is no question about it, Mr. Speaker, the time for something to be done in the Province of Newfoundland and Labrador is here. We cannot allow the people of this Province to go through the despair they went through for the last ten years under the former Administration and for the last seventeen years under the former Government.

We canot be a part of a Government, nobody on this side, in the Caucus or in the Cabinet, the Premier himself, or anybody connected with this Government can sit down and content themselves knowing that the future of the Province must continue on, and for that reason, Mr. Speaker, the Premier, in his wisdom, put together an Economic Recovery Team to ensure in any possible way they could to take a look at the Province. We have a Minister of Development. We have a Minister of Municipal and Provincial Affairs. We have a Minister of Fisheries. We have fourteen other Ministers and their job is a part of that.

It is to work together. That is the objecti