VOL. 1 PRELIMINARY UNEDITED TRANSCRIP1.' HOUSE OF ASSEMBLY FOR THE PERIOD 3:00 p.m. - 6:00 p.m. TUESDAY, JUNE 29, 1982 NO. 30

June 29,1982 Tape No. 1760 The House met at 3:00 p.m. Mr.Speaker in the Chair. MR.SPEAKER (Russell): Order, please! ah-1 I understand there are some members of the United Brotherhood of Carpenters and Joiners , Local Union 2564,in the galleries today and on behalf of all members I welcome you to the galleries. SOME HON. MEMBERS: Hear, hear! ORAL QUESTIONS MR.SPEAKER: The han. Leader of the Opposition. MR.NEARY: Mr.Speaker, now that the federal government in its Budget brought down last night has led the way by using Cabinet power - SOME HON.MEMBERS: Oh,oh!

MR.NEARY: hon. gentlemen should listen for the question - using Cabinet power, discretionary power to ask the Public Utilities Boards that come under federal jurisdiction to restrain prices on such things as transporta~ion to six per cent this year and five per cent next year, will the administration be asking the boards that come under provincial jurisdictio~ such as the Public Utilities Beare and the Rent Control Boards,to limit any increases on items that come under their jurisdiction to six per cent and five per cent in the next two years? That is for the Government House Leader. MR.SPEAKER: The hon.

President of the Council. MR. MARSHALL: Well, Mr. Speaker, obviously these are matters for assessment and consideration,and the Premier at the present time is on his way to Ottawa for the purpose of attending the meeting that was requested by the Prime Minister 1 so these would be matters for 3 7 ~r}

June 29,1982 Tape No . 1760 ah -2 MR .MARSHALL : assessment at the parti cular time . llowever ,it does have to be pointed out,par ti cularly with respect to the Public Utilities Board, that in the event that any =uture rai ses are restricted to si x per ce nt, and in the further event that there are incre as ed co sts incurred by utilitie s over and above six per cent which are beyond the control of the public utility concerned, that then and i.n that event that amount has to be paid, that amount will have to be paid. so that if you did it by restricting it to six per cent,any difference or any excess that would have to be picked up would hav e to be picked up by ge ne ral ta xati on .

So these are the issues and the 3 7 ;in

June 29, 1982 Tape 1761 EC - 1 MR. MARSHALL: questions that occur in response. The question in itself brings on a question in its answer and indicates the fact and the reason why we would have to consider and why the matter will be put under consideration. In due course the government will make its position known. MR. NEARY: Mr. Speaker. MR. SPEAKER (Russell): Opposition. MR. NEARY: The hon. the Leader of the Mr.

Speaker, then the han. gentleman, of course, is admitting in his answer that the administration have it in their power to effectively keep electricity rates down,to keep rents down, to keep telephone bills down and all other matters that fall under the jurisdiction of provincial boards, whether it be the Public Utilities Board or the Rent Control Board, that they have it within their power to keep prices down if they follow the example set by Mr. MacEachen in his budget last evening? MR. SPEAKER: The han. the President of the Council. MR. MARSHALL: Mr.

Speaker, there are lots of things in which we would not follow the example of Mr. MacEachen in his budget last evening. SOME HON. MEMBERS: Hear, hear! MR. MARSHALL: For instance, Mr. Speaker, this Province did not follow his example last year when despite the hints of doom and gloom during the election, very proudly we carne in with a surplus on current account. SOME HON. MEMBERS: Hear, hear! MR. MARSHALL: And this year we predict a surplus on current account, not to predict a $9 billion deficit on current account and turn up with a close to 3 7 ;; ,.,

June 29, 1982 Tape 1761 EC - 2 MR. MARSHALL: $20 billion deficit on current account . So we will not be following Mr . MacEachen's example . The situation is to \.;hat is \oli thin our control ; there are certain things, obviously, within provincial control as well as within federal control and our decision on that will have to be made after sober weighing of all the factors involved. \~e have to consider on the one hand the social good as well as the pri va tc gooc ,and we will be weighing all of these factors in coming to our decision. SOME BON. MEMBERS: Hear, hear! MR.

MARSH..JU.L : But I would make it quite clear to the hon . gentleman, as opposed to the hon. gentlemen there opposite who follow the federal government's examples like little lap dogs, t.hi s government, Mr . Speaker, will not be following by any means the lead of Mr. MacEachen as it comes to deficit financing and as it comes to keeping the cost to Canadians sky -high by failing to deal with such essential elements as interest rates. NR. NEARY : MR. SPEAKER (Russell) : A supplementary, Mr . Speaker . A supplementary, the hon . the Leader of the Opposition. MR .

NEARY : When it comes to cooking the books, the hon. gentleman can teach Mr . MacEachen ::\7111

June 29, 1982 Tape No. 1762 MJ - 1 MR. S. NEARY: an example, Mr. Speaker, and the pot calling the kettle black when it comes to a deficit. The debt of this Province 1which is $3.2 billion,is next to the Government of Canada - the per capita debt of this Province is next to the Canadian Government's debt.$3.2 billion and nothinq to show for it. SOME HON. MEMBERS: Oh, oh! MR. SPEAKER (Russell) : Order, please! MR. NEARY: I wonder if Your Honour keep the Muppets quiet for a few moments.

Would the hon. gentleman indicate to the House whether the administration will try to keep civil servants wages to the five per cent level that was announced by the provinical Minister of Finance (Dr. J. Collins) in his budget 1 or will the administration now opt for the federal government's six per cent in the coming year and five per cent in the second year? Which formula now will the administration use? Will they be using the five per cent .lllnounced by the Provincial Minister of Finance when he brought the budget down in the House 1 or will they be going for the six and five in the next two years? MR.

SPEAKER: MR. W. MARSHALL: The hon. the President of the Council. As to cooking the books 1 I refer the hon. gentleman to statement number one of the budget which shows clearly and concisely 1 after our auditors have gone through it, a $4.5 million· surplus on current account. Some cooking of the books~ SOME HON. MEMBERS: Hear, hear! MR. MARSHALL: It took some cooking, Mr. Speaker, it took some cooking,and the people of Newfoundland were not fried as they would have been had the hon. gentleman had anythinq ::17 l .,

June 29, 1982 Tape No . 1762 MJ - 2 HR. W . MARSHALL: to do with it. --- - -- As to the $3.2 billion debt he talk s of', ti1e hon. gentleman quite frankly forgets the fact that in 1971 the then administration which came to power inherited a $1 billion Cleht, \·lhich \'lith accumulated year after year interest on it,brinqs the :n tHl debt attributable to the Liberal Government to about $2,002,000,000. The rest of the debt, Mr. Speaker, can be traced to such things as bringing about the change in the Labrador Linerboard and wrestling with the mess that the hon. gentleman has left with us.

Now, I believe the hon. gentleman also asked a question but having gone into that flight of rhetoric I cannot remember. TThatwas it the hon. gentleman said? MR. NEARY: I wanted to know 1·1ill the Hinister of Finance (Dr. J. Collins) be using the five per cent wage increase or will or six per cent as directed by the federal government? MR. MARSHALL : Mr. Speaker, when this government speaks it speaks after ~ qreat deal of deliberation.

The budqet before last 1 the hon. the Minister of Finance brought in a budget, he predicted a surplus, the surplus occurred, d~spite the fact that between the time when the end of the year and the revealing of the end of year, there were all sorts of hints from the opposite side and charges and statements 1 and unfounded statements,to the effect that there was going to ~ 7i)

June 29, 1982 Tape 1763 PK - 1 MR. MARSHALL: be a huge deficit and not a surplus. The hon. Minister of Finance (Dr. Collins) made a very cogent Budget Speech, l~e best Budget Speech in the circumstances - SOME HON. MEMBERS : Hear, hear ! MR. MARSHALL: - that this Province has seen in all of its history. The only Province in Canada, Mr. Speaker, that predicts a balance on current account, the only Eastern Canadian Province that predicts a balance on current account. So I assume when the hon.

Minister of Finance speaks , he weighs things, and he weighs things very carefully, he has weighed things very carefully in his Budget Speech and I do not think that the Minister of Finance has seen any need to make any alterations to that as a result of Mr. MacEachen's speech, but I do not want that statement to be interpreted in any way, Mr. Speaker, as pre-empting or giving an indication as to what may result as a result of the conference of the First Ministers. That is a matter for consideration and weighing.

But I can certainly state to the hon. gentleman,and I know the Minister of Finance will concur,that it is not the administration's intention to change the major parts of the Budget , and that was one of the major elements. SOME HON. MEMBERS: MR. SPEAKER (Russell): Opposition. MR. NEARY: Hear, hear! The hon. Leader of the Mr. Speaker, would the hon. gentleman indicate if the Cabinet met in an emergency session to give the Premier instructions on what position he should take at the First Ministers' Conference in Ottawa tomorrow? ;pi :1

June 29, 1982 Tape 1763 PK - 2 MR. NEARY: Or is the Premier just flying by the seat of his pants to make up his mind at the conference? Or does he have instructions from the Cabinet of what policy to follow at the meetings in Ottawa? MR. SPEAKER (Russell): The hon. President of the Council MR . MARSHALL: Mr. Speaker , you know, the hon. gentleman then is projecting himself. He projects himself in the way in which the hon. gentleman was used to operating when he was in a Cabinet. And the situation is, Mr.

Speaker, that the Premier does not get directions or seek instructions, neither does he act on his own. 'l'hc bon. l'remh~r seek:; ~1dvice from his Cabinet and he gets the advice willingly from time to time. So obviously he discusses this matter with his Cabinet ministers and that is the way this government operates and that is one of the reasons the finances and the whole management of the Province is indicating that it has been handled in such an effective and efficient manner. SOME HON. MEMBERS: Hear, hear! MR. SPEAKER: The bon. member for Fogo. MR. TULK: Mr.

Speaker, I have a question for the Minister of Forest Resources and Lands (Mr. Power), and it concerns a brief that was presented by Loggers Local Union 2564, The United Brotherhood of Carrenters and Jointers of America,just over a year ago, I think it was May 26, 1981 it was presented to the Premier. I presume that the minister is aware of that brief, and I presume he is aware of the allegations that are in it, and that is that Abitibi-Price and Bowaters,because of the method of issuing permits in hhis Province,are getting cheap wood, are getting it at the expense :1 7 1 II

June 29 , 1982 Tape 1763 PK - 3 MR . TULK: of the woodcutter and his famil y by paying less than they would pay for timber cut on their own limits . And I know that he also understands that the b.def emphasizes a lack of fringe benefits th?lt are included for those ·people who cut on Crown limits :\ 7 i ;

June 29, 1982 Tape No. 1764 SO - l MR. TULK: under permits that are issued by the ministor. Now first of all I want to make sure the minister is aware of the brief, has he replied to the union's allegations, when did he reply and was the reply in writing? MR. SPEAKER (Russell) : The hon. Minister of Forest Resources and Lands. MR. POWER: Mr. Speaker, as it relates to the brief from the loggers union, we certainly are fully aware of it in the department. We have responded to the brief in writing and in great detail some time ago.

We have had numerous discussions with members of the loggers union, discussions with my departmental staff at the beginning, discussions with myself, discussions with the Resource Policy Committee of Cabinet. We have spent a great deal of time, as I say, in negotiations, discussions and deliberations with the loggers union as it relates to the points of contention in their brief. There are still some serious philosophical differences, if you want, between how the department and the government perceives wood cutting permits in the Province and how the union would like to have them done.

To this stage in the game we have, as I say, responded to the brief. I understand that there is a petition in the Province to be presented to the House very shortly as it relates to the items in the brief itself. And all I can say, Mr. Speaker, to all members of the House is that we are working as closely as we possibly can with members of the loggers union to obtain and attain their legitimate objectives,albeit we disagree sometimes with the format for doing that. MR. TULK: MR. SPEAKER: for Fogo. Supplementary, Mr. Speaker. Supplementary, the hon. member :17 ! h

June 29, 1982 Tape No. 1764 SD - 2 MR. TULK: Mr. Speaker, I presume that the minister refused the union's request for a two permit system for Bowaters and Abitibi-Price. I would like to ask him very ~imply, what reasons did he give the union for refusing their request for that two permit system or has he indeed refused it? MR. SPEAKER (Russell): The hon. Minister of Forest Resources and Lands. MR. POWER: Mr. Speaker, to this date we have refused the two permit system and we do not agree with it as it relates to the cutting and supplying of pulpwood in this Province.

The main reasons for us disagreeing with that as a government I guess is basically that in the market system that is there there has to be some way in which cutters of pulpwood can, I suppose, decide a price relating to the market conditions that are there, both the locally supplied pulpwood and wood that is needed for export. Our argument has been with the union that as in the past they have negotiated with the companv certain terms and conditions of a mutual agreement between the union and the company. One of the historical conditions in those agreements was the supply of pulpwood from Crown limits.

As I understand it, that is still a negotiated item in the Bowaters union agreement, it is not an item in the Abitibi agreement,and government's basic reaction to the brief and to that part of the brief is simply that the union could easily sit down and inthe negotiating process with the companies, such as negotiating salariesand fringe benefits, can also easily negotiate the amount of pulpwood that should become available to Abitibi-Price from Crown limits, Done that way, then there is no need for simply having two cutting permits in the Province,which would cause some severe restrictions on other persons who produce pulpwood in the market place. ') ..., . -, ."1 I ! :

June 29, 1982 Ml~. 'l'ULK : MR. SPEAKER (Russ ell ): for Fogo. MR. TULK: either talking like a company Tape No. 1764 so - 3 Supplem entary, Mr. Speaker. Supplementary, the hon. member Mr. Speaker, the minister is ::17 i q

June 29, 1982 Tape 1765 NM - 1 MR. TULK: man or he is naive enough to believe everything that the company tells him. Now the union alleges, Mr. Speaker, that not ~nly are the companies getting wood ~or cheap labour, for cheap prices, but that some of the people cutting this wood are living in tar paper shacks and that they travel perhaps up to seventy miles each way back and forth to get to work. I want to ask the minister,very straightforwardly, is this true? Has he indeed investigated this matter? And what has he found as a result of his investigation?

Perhaps he can also tell us how many workers are involved in livinq in those kind of conditions in the Province? MR. SPEAKER (Russell) : and Lands. MR. POWER: The hon. Minister of Forest Resources Mr. Speaker, let us set the record absolutely straight. I am not a company man, nor am I a member of the loggers union. We are responsible for administering the forest lands in this Province and the forest resource, which we are doing, better than it has ever been done in the history of Newfoundland. SOME HON. MEMBERS: Hear, hear: MR.

POWER: This administration has put into place certain things in the last three years,and in the last seven or eight years particularly,which make the loggers life going to be a lot easier one and a lot more secure and safer one over the next 30 or 40 years by putting into place good forest management practices, by forcing the companies to invest in silviculture, by creating much badly needed jobs in the Province, at the same time improving the forest resource. Mr. Speaker, we co-operated with the union in many, many given instances to improve and increase the value of the Newfoundland forest resource. ~7il"l

June 29, 1982 Tape 1765 NM - 2 MR. POWER: As it relates to whether I went out and ins pected sone of the instances that are mentioned in the loggers brief, that is absolutely correct.

I, along with the president of the local in Grand Falls, and some of his members and some of my staff, went to some of those locations, looked at the facilities; we talked to the persons involved .we had negotiations and discussions also with not only the companies but the independents involved, and we are still as a government convinced that the union process can effectively play a role in this area; That if those persons are not getting enough money, or an appropriate or adequate amount of money from the companie s for the pulpwood that they produce, then there is a union process~ the union can go out and organize, the union can get those persons in the union agreement, and then in the confines of the union agreement any negotiations with the company, you can negotiate price, you can negotiate working conditions, and you can also negotiate the amount of pulpwood that is allowed to go into Abitibi-Price or Bowaters from Crown limits.

MR. TULK: MR. SPEAKER (Rus·sell) MR. TULK: A supplementary, Mr. Speaker. The hon. member for Fogo. Mr. Speaker, I want to refer the minister to a letter that he wrote to Mr. Gonzo Gillingham, international rep=esentative of the union,on December lOth., 19 81, in which he pointed out, "On the issue of working conditions," and I quote from his letter, "of loggers employed by contractors on Crown areas, I will also be taking some definite steps. There is of course existing legislation through the Departments of Health and Manpower covering this area:• ;17'Jfl

June 29,1982 Tape No. 1766 ah-1 MR. TULK: ''I wili be instructing my staff to ensure that the appropriate agencies are notified immediately of any breach of these regulations by contractors!' Now was he referring to the Logging Camp Act which perhaps does not, it does not as far as I know, even require that there be a floor ·in the place where a person has to live? Did he indeed notify the agencies,namely the Department of Health, about the living conditions of some of those workers and is he saying that as a result of his trip the conditions are not as the union describes them in that brief?

MR.SPEAKER (Russell): The hon. Minister of Forests Resources and Lands. MR.POWER: Mr. Speaker, I have some disagreement with some of the things and some of the way things are stated in the union brief as given to us. I do not disagree with the union when it comes to say that some of the conditions that those independent loggers have to live with are certainly not what you would expect any worker in the Province to have.

I have talked to the Department of Labour, I have talked to our own c.lcpartmental people when we issue cutting ~ermits,and we are doing as much as is possible to improve a very long-standing problem in the forest industry in Newfoundland. And as I mentioned earlier,we think that the department and this government has made significant moves in improving the forest space and also in improving both the livelihood, the safeguard to ' livelihood of the job itself,and also the conditions under which those persons have to work.

It is not something that can be done overnight, it is something that is going to take · a fairly significant amount of time,and we are ~oing everything possible, both our department and the other departments of government,and in conjunction with the union and the companies,to make those things as livable ;17 ',11

June 29,1982 Tape No. 1766 ah-2 MR. POWER: and as workable as is humanly possible in as short amount of time considering the traditional nature of the problem• MR.TULK: A supplementary. MR. SPE AKE R (Ru ss ell) : A final supplementary. The hon. member for Fogo. MR.TULK: Mr. Speaker, the minister also in that same letter made a commitment that he would see that those people that were cutting on Crown limits for Abitibi-Price and Bowaters became organized in order that they would get a better price for their wood. That is in that same letter.

I would like to ask him what steps he has taken in regard to seeing that those people are indeed organized? Has he contacted the union and asked the union to organize them, has he undertaken through his own department to organize them so that they can indeed perhaps get a better price for that wood? MR.SPEAKER: The hon. Minister of Forests Resources and Lands. MR.POWF.R: Mr. Speaker, the member for Fogo (Mr.Tulk) seems to be a little bit confused or does not understand the role of the Department of Forest Resources and Lands, the role of the Department of Labour, the role of the loggers union..

Certainly it is not my function or the function of any departmental staff to go out and force persons to organize. What I said in my letter to Mr. Gillingham at the time 1 which I will continue to reiterate and which I believe in now as much as I did when I wrote the letter, that there is a process for organizing those persons. We have had many of those independent contractors into the department - MR.NE!\RY: You should have had them. ::\7? )

Ju~e 29,1982 Tape No. 1766 ah-3 MR . SPEAKER (Russell) : Order, please ! MR. POWER: - told them of the approac h that could be used, told them that if they want the increased benefits , the fringe benefits of health and life insurance an.:! things that the union persons have who work with ·the companies,then that can be easily obt,ained by becomin g organized themselves i£ they so wished . Th€' conipany obviously knows the list of contractors and employers that are involved in the independent cutting of pulp- wood.

Certainly this department has no intention c:>f going out and forcin~ thosP. r,nmr.."\n; ... ,. tn ho nrf!-'\!15. -..;oA . We will encourage it if the working conditions are better and if it get more money into the Province and makes working conditions better for the workers involved ,but certainly we have no intention as a department of geing out and intimating those small independant workers to get organized unless they wish MR . SPEAKER: The hon. member for Eagle River. MR.BISCOCK: My question, Mr. Speaker, is to the Hinister of Education (Ms Verge) concerninq the community or Paradise River . ;\ 7? \

June 29, 1982 Tape 1767 EC - 1 MR. HISCOCK: I have written the Minister of Education on this several times before concerning schools only up to Grade VIII, particularly Black Tickle, Paradise River, Northern Bay, Lodge Bay, Pinsent Arm, Williams Harbour and Charlottetown,who have to send their students out after Grade VIII. And now with the Grade XII, of course, they will have to send them out much longer.

The question I want to ask is Paradise River has notified me today that out of their students, four went to Cartwright last year and passed under bursary programmes, next year they want to send six students, but the people in Cartwright will not take their students for several reasons. One reason is the amount of money they are receiving from bursaries from the students,and the other one is, of course, acco~odations itself.

The question I have to ask is can the Minister of Education inform this House and the people along the Labrador Coast whether she will bring in any plans to have some type of dormitory set up in Cartwright with group parents? MR. SPEAKER (Russell): The hon. the Minister of Education. MS VERGE: Mr. Speaker, the matter of accommodations at Cartwri0ht for students completing their high school programme from nearby communities is one that I am prepared to pursue with the Labrador East Integrated School Board, which J understand would be the school board involved. A related matter which the member for Eagle River (Mr.

Hiscock) addressed in his

preamble is "the amount of the bursary paid by the Department of Education to cover the cost of accommodations :17?1.

' June 29, 1982 Tape 1767 EC - 2 MS VERGE: of students having to leave horne ~o complete high school. That is a matter which is now being considered within government. I recognize the need to increase the amount of the bursary since it has not been increased for the past few years and it has not kept pace with the cost of living increase. MR. HISCOCK: A supplementary, Mr. Speaker. MR. SPEAKER (Russell) : A supplementary, the bon. the member for Eagle River. MR.

HISCOCK: With regard to the part of these smaller schools on Coastal Labrador as well as Northern Newfoundland, with respect to Grade XII, does the Department of Education have under review - because they closed down the dormitory, let us say, in Northwest River five or six years ago, the drop-out rate has continued to increase in these local communities. What steps is the Minister of Education ~oing to take to make sure that the students on Coastal Labrador are not relegated to being second-class students in this Province? MR. SPEAKER: Education. MS VERGE: The hon. the Minister of Mr.

Speaker, the dormitory, the boarding school at Northwest River was closed at the same time as high schools were opened in most of the coastal communities, thereby rendering the boarding school at Northwest River unnecessary. That arrange­ ment of serving students through their completion of high school in their horne communities is one that was preferred by families along the Coast of Labrador and I think that arrangement has amounted to an improvement in the quality of education for Labrador residents. 37'J'i

June 29, 1982 Tape 1768 ~K ~ ~ MS. VERGE: I realize that there are a few very small communities on the Coast of Labrador, the ones that the hon. member referred to,which cannot justify having high school in their own communities because of the smallness of their population. And for those students the bursary h~s been made available so that they can go to another school on the Coast of Labrador, for example, at Cartwright o~ at Mary's Harbour or in the North at Natn or Hopedale,to complete high school. Mr.

Speaker, the school boards operating the schools on the Coast of Labrador, there are four boards, the Labrador East Integrated Board, the Vinland Tntegrated Board, the Pentecostal Board and the Labrador Roman Cathol'i.c Board are offerring in most cases fine programmes. They ha,ve · been able to attract good quality teachers and the problem of recruiting teachers has decreased over the years. There has not been the same kind of teacher turnover as ther.e once was. So all the evidence points to a continuing improvement in the calibre of education for Labrador Coastal students. MR. HISCOCK: A supplementary, Mr.

Spea,ker. MR. SPEAKER (Russell): A final supplementary, the hon. member for Eagle River. MR. HISCOCK: With regard to Grade XII being brought into the Province - with regard to what the minister said of these smaller communities, that is quite true. But closing down Northwest Rive~ I would like to know has the minister done any follow-up studies as to whether there was an increase in students finishing their grades? Because by closing down Northwest River we do not have any increase in actual fact the problem has go~ten worse 1particularly in :17?r,

June 29, 1982 Ta,pe 1768 PK ~ 2 MR. HISCOCK: the North where there is a higher dropout rate even though there are high school grades in those communities. And I am a little bit concerned with ~nese smaller ones, Black Tickle, Northern Bay, ~7?7

June 29, 1982 Tape 1769 NM - l MR. HISCOCK: Lodqe Bay, Pinsent Arm, Williams Harbour, and Charlottetown, P.ut all those students together you would get approximately 250 students, and not one of them are reaching Grade XI. If you had a school here in St. John's or on the Island th;.t· ::::;o students, starting from Kindergarten to Grade Xl or Xll, never got through, 1. t would :Oe of epide1uic proportion that this Province would not tolerate.

And I w·ould like to know what steps is her department - increasing the bursaries is not going to be the answer, it is more complex and complicated than that-and I would like to know is the minister going to have some follow-up of an internal study with regard to smaller schools, not only in Labrador but in Newfoundland, the Province here, with regard to the implementation of Grade XII? MR. SPEAKER (Russell) : The hon. Minister of Education. MS. VERGE: Mr.

Speaker, there is underway,as there has been over the past year, a comprehensive monitoring system to evaulate the phase in of the reorganized high school programme. There are several participants in that exercise, including representatives of school boards who directly deliver the programme to students, as well as other agencies involved in education. But, Mr. Speaker, there is also ongoing on the part of the Department of Education, in co-operation with those other agencies, an evaluation of all education programmes from Kindergarten through senior high school.

The department has a good working relationship with the school boards serving Labrador. We recognize that there is a serious dropout problem in the communities referred to by the member for Eagler River (Mr. Hiscock), as there is in other parts of our Province, and that problem is going to be addresssed in a comprehensive way over the next year, which will follow many studies by the aqencies with the leadership of the Federation of School Boards. ~7?8

June 29, 1982 Tj!pe 1769 . NM - 2 MS. VERGE : The dormitory as part of a boardin g school at Northwest River was closed really in response to the people formerly served by that institution, because the .:";:unilies indicated that they preferred to have their children remain at home to complete high school and high schools were added in sev eral communities along the Coast of Labrador. When the dormitory was final ly closed a couple of years ago,there were only about nine students left in that large building and the continued operation of the dormitor y could no longer be justified .

And all the evidence su~teo an overall improvement in the quality of education for the Coastal Labrador students, even though I admit there is a very high dropout problem among those students . ;\7?0

,June 29, 1982 Tape No. 1770 MJ-1 MS. L. VERGE: The solution will involve il qr;1du<1l onqoing improvement in the progranuncs - MR. NEARY: This is an abuse of the rules of the House ( Inaudible ) . SOME HON. MEMBERS: Oh, oh! MR. SPEAKER ( Russell ) : Order, please! MS. L.VERGE : - and teacher effectiveness to serve those students where possible in their home community. Mil. STMm'l: A ~ood, geod answer. MR. E. HISCOCK: One final supplementary, Mr. Speake:,:-, MR. SPEAKER: A final supplementary, the han. the member for Eagle River. MR. HISCOCK : Will the Minister of Education ( Ms. L.

Verge ) - if her department will study this problem - will the Minister of Education undertake the possibility of not building large dormitories, as were in Northwest River, but a small bungalow having a parent with probably five or six students in it? Will the minister look at that possibility of having one maybe in Port Hope Simpson, one in Cartwright, maybe one in Nain. Something has to be done to have not only accomodations . Som0 of these students are staying in with larger families. There are T.V.'s on the go, there are radios on the go and it is not conducive there for study.

The minister has closed down, or this government has closed down Northwest. River and has not increased the bursaries and are basically leaving the students now and the communities up to whatever capabilities they have themselves. And I think that the answer could be having small dorms in some of the larger communities. MR. SPEAKER: The han. the Minister of Education. MS. VERGE: Mr. Speaker, as I said before, the han. member's suggestion is one that I am willing to pursue. ;17111

June 29, 1982 Tape No. 1770 MJ-2 MS. L. VERGE: However, the agency directly responsible for the Coastal Labrador students is the school board - or r~ther the four seperate school boards which directly deliver programmes to people along the Labrador Coast. MR. W. CALLAN: ~'lr. Speaker. MR. SPEAKER( Russell): The hon. the member for Bellevue. MR. CALLAN: Mr. Speaker, I think there is about half of a minute left in the Question Period. I want to ask the Minister of Finance ( Dr.J. Collins ) if in that brief time he could give us an update on what may be happening at the Come By Chance oil refinery?

Are there any onoging negotiations with Petro-Canada to revitalize and reactivate the refinery? What is the status of the Come By Chance refinery? We have not heard anything about it for a couple of years. MR. NEARY: Good question. MR. SPEAKER: The hon. the Minister of Finance. DR. J. COLLINS: Mr.

Speaker, when Petro-Canada bought the refinery - and I reported this to the House on at least one occasion, and.I think several -they undertook to carry out studies that would be related not only to technicaJ feasibility but to crude supply and also to markets, and those three elements would have to bear on their decision or otherwise to rehabilitate and reactivate the refinery.

We have had meetings with them since they purchased the refinery and the information from them at that stage was that either they had not completed their studies or, having completed completed their studies, the time was not appropriate for them to take action. The last time we had a communication from them it was very much the same message. But we arc now anticipating having some meetings with them, 3 7 'l

June 29, 1982 Tape No. 1771 SD - 1 DR. COLLINS: I would say likely in the next month or so,and try to get a bit more detail from them just to see exactly where they stand on matters other than just a report , shall we say, a brief written report or a brief verbal report saying that the time is not yet appropriate. MR. SPEAKER (Russell): Order, please! Time for the Question Period has expired. I would like to welcome to the galleries today two members from the Town Council of Cottlesville in the Twillingate district, Mr. Victor Cassell and Mr. Carl Philpott. SOME HON. MEMBERS: Hear, hear.

PRESENTING REPORTS BY STANDING AND SPECIAL COMMITTEES MR. SPEAKER: The bon. Minister of Finance. DR. COLLINS: Mr. Speaker, I ask leave to table a document entitled The ~-c:~n9~.¥. -·~982 . This is a document that really relates also to the budgetary process and I think that hon. members will find it instructive. It relates to the economy of the Province but in the context of the Canadian and international economy. NOTICE OF MOTION MR. SPEAKER: The hon. Minister of Finance. DR. COLLINS: Mr.

Speaker, I give notice that I will on tomorrow ask leave to introduce a bill entitled "An Act To Amend The Gasoline Tax Act, 1978". ANSWERS TO QUESTIONS FOR WHICH NOTICE HAS BEEN GIVEN MR. SPEAKER : The bon. Minister of Finance. DR. COLLINS: Mr. Speaker, answer to Question 94, the request was dated May 27th from the hon. member for Port au Port (Mr. Hodder) . :17:-i')

June 29, 1982 Tape No. 1771 so - 2 PRESENTING PETITIONS MR. SPEAKER (Russell) : The hon. member for Fogo. MR. TULK: Mr. Speaker, I rise to present a petition on behalf of Local 2564 of the United Brotherhood of Carpenters and Joiners. Before presenting that petition, I understand that it is normal procedure in this House to ask the member perhaps from the district to do that and in this case I understand that the member for Exploits (Dr. Twomey) was asked and felt that he could not present the petition. Mr. Speaker, the petition is signed by 3,694 loggers and concerned citizens throughout the Province. Mr.

Speaker, I would like to start the presentation of this petition by reading the prayer of the petition~ 'Loggers Local 2564, United Brotherhood of . Carpenters and Joiners of America, has over the years negotiated wages and working conditions that arc second to none in the forest industry 1 and health care and other benefits that provide protection to ourselves and to our families. These benefits have been accomplished against tremendous odds. The government ,through its present forest management policy , now threatens to take these benefits away. If the government does not heed the facts of the brief :l 7 ~ ·:~

June 29, 1981, Tape 1772, Page 1 -- apb MR. TULK: 'being presented in the prayer of this petition, many loggers will have their working and living conditions revert back to what they were prior to 1959. These conditions were, in part, ably described by one of Newfoundland's most respected Supreme Court judges, the late Sir Brian Dunfield.

We quote from his royal commission of enquiry into the logging industry in 1960: "The extemporized habitations of the rnen,rnade out of anything that carne to hand, and equipped with bits and pieces, are really dark and squalid hovels which would not be used for hen houses except by the most primitive farmer. Dirt is every­ where. Rats are common. Dilapidation is the rule. It is not the fault of the jobber but of the system". 'It is unimaginable that our government should set up and administer a policy that will again inflict such hardship and injustice on the loggers of this Province.

The prayer of this petition is that the government dowhat has been recommended in the brief and that regulations,or legislation if necessary,be enacted to ensure insofar as possible that the loggers of this Province shall never again be subjected to such a threat. We,the undersigned, support the brief and the prayer of this petition.' Mr.

Speaker, in presenting this petition let me make some things clear 0 The petition is not asking that the export wood market be subject to the prayer of the petition; they are not asking that conditions apply to sawmill operators who cut pulpwood as a by-product of their logging operations; and,nurnber three, Mr. Speaker, the petition is not against individuals who cut wood for Abitibi-Price-Bowater, Rather, in their brief, the brief that the union talks about-and it was presented to the government I think it was last May - they show a degree of understanding of ~ 7-=\ I,

June 29, 1982, Tape 1772, Page 2 -- apb MR. TULK: of what those individuals have to go through as the point out that they also have to make a living, those individuals. So, Mr. Speaker, Speaker, the concern here is the issuing of permits for production of pulpwood off Crown lands that becomes a part of the wood requirements of Abitibi-Price and Bowater. The brief referred to in the petition, and I will table that brief, Mr. Speaker, is concerned with a number of things. Number one, the paper companies are getting cheap wood off Crown lands as a result of permits that are issued by this government. Mr.

Speaker, I am given to understand, and I know this to be true, that if a person cuts timber, pulpwood in this Province for Abitibi-Price off Crown lands through one of those small operators, then he is liable to receive something like seventeen dollars per cord,

whereas if he had worked on either one of the company limits he would be receiving something like twenty-five dollars per cord. The second thing that the briefpointsout and the petition is concerned with, is the living conditions of some of those people who have to work for those smaller contractors. The brief, Mr. Speaker, points out, and again ~7~'1

June 29, 1982 Tape 1773 NM - 1 MR. TULK: I saw some pictures today which are atrocious, which Charles Dickens could have a field day with in describing the working conditions of loggers in this Province. MR. NEARY: Not Charles Power, Charles Dickens. MR. TULK: Not Charles Power, no, Charles Dickens. The brief, Mr. Speaker, point out that people who cut cheap wood for Abitibi-Price and Bowaters in this Province, have to either live,still in the twentieth century,in tar paper shacks, or,Mr. Speaker, they may have to travel up to seventy miles each way per day. As I said, Mr.

Speaker, I saw the pictures of some of those places today - as a matter of fact I worked in some of them myself in 1965- and what I saw is unbelievable. Mr. Speaker, the brief is also concerned about another very legitimate concern and that is it is concerned about the fringe benefits that some of those loggers are missing out on as a result of the union not being able to orqanize those people as a result of their cutting on Crown lands. They mention such things as pension plans, medical and drug care plans, group life insurance, and so on. As a matter of fact, Mr.

Speaker, they mentioned twelve items that are missing from the lives of those people. They also point out, Mr. Speaker - MR. SPEAKER (Russell) : Order, please: I would like to advise the hon. member that we will let him have another thirty seconds to finish up his remarks. MR. TULK: Mr.

Speaker, in view of the contention of the minister today 1let me sum up by saying that I would ask the minister,if he is not prepared to accede to the demands of the brief,will he then stand in his place today and commit himself to appoint a group of representatives made up of all sectors of the industry to study this problem that is alleged to be in place by the union. MR. ROBERTS: Hear, hear! Well said. 37:lG

June 29, 1982 MR. SPEAKER (RUssell) Resources and Lands. Tape 1773 NM - 2 The han. Minister of Forest MR. POWER: Mr.

Speaker 1 as outlined in the response to questions that we just had relating to this brief that was presented I guess over twelve months ago from the union itself, and certainly the negotiations and the discussions that have been ongoing since then, I can just reiterate what I have said during the response to questions, We are fully aware of the problem. we have fully committed ourselves in every way, shape and form to co-operate with the union, to improve the conditions under which their loggers work, to make sure that as much as is possible under the economic system that we have that benefits accrue to the people and to the Government of Newfoundland rather than to some foreign based company.

I can only say to you, Mr. Speaker, that I will be glad to table the response that we have made, the very detailed response to the loggers union some time ago, outlining in detail the point by point references as it relates to the union arguments in the brief itself. Let me say, Mr. Speaker, before I get involved in the first part of my arguments, just let me say that the member for Exploits (Dr. Twomey) was invited to present a petition to the House and I do not think that anyone in this House or outside of it would care to question the honourableness of the member for Exploits.

The member for Exploits will continue, as I have had discussions with him earlier this afternoon and many other times as it relates to the union and loggers' problems, will continue to support the loggers in their legitimate objectives; he disagreed with the wording of the petition and being an honourable gentlema11 refused to present it. ~rP '--

June 29, 1982 Tape 1774 PK - 1 MR. POWER : It does not mean in any way that he refuses or has refused to co-operate either with the union or with its membership. Let me say, r.~r. Speaker, and I can read from my response to the union brief sometime ago if you want it, we still as a government arld as a department fully believe that the problem of how much pulp goes from Crown linits into the companies is subject of negotiation between the company and the union who represents the loggers. We understand that we are talking of.less than 10 per cent of the full and total wood requirements of the company.

There is an agreement in place now between the union and - §_OME HON. MEMB~S ..:_ MR. POWER: -- -- Oh, oh! - Bowater Company in Corner Brook which works to the satisfaction of union members andthe company. There is no negotiated agreement between the union and Abitibi -Price. In joint negotiations and discussions that we had when I called in both parties to our offices and we sat down and discussed it, the union and the company appeared to be on an equal footing where they could go out and negotiate a settlement.

The company has told us and has told the union that they are willing to sit down at any time in the union negotiating system and negotiate the amount of pulp wood that comes from Crown limits,as used to be in their old agreements. He firml:r believe in our department and in the government that that can work, it has worked before,and that there is no need,as the member for Fogo (Mr. Tulk) keeps sayin~ across the House,to strike a committee. The committee representing the loggers, some of Nhom are in the gallery, being the Union itself are the.I;e.

The company has said that they ~re willing to negoti~te, And we just believe, Mr. Speaker, that it is an unnecessary interference ~ 7 -~ ~~

June 29, 1982 Tape 1774 PK - 2 MR,____KOWER: on behalf of the government to get involved in that process. We will continue to issue permits as we have, arid we will continue to work with the L..:'rn!Jany. As in my letter to them, which I will table, He have told them that we will do anything possible to help in negotiating an organizational structure for independents on Crown limits. To this date some persons have not come to us with any kind of impetus to get organized, and we still think that is certainly the prerogative of the union to get involved in the organization of those workers. Mr.

Speaker, in conclusion I can only say that we as a government and a department will continue to work with the union. We have made significant gains in the Province in making the loggers life a lot easier.In co-operation with the union and the companies we will continue to do that. And I can only say , Mr. Speaker, that if any independents care to come to my department and ask for assistance in organizing,! will gladly ~efer them to the union and they will become represented by one of the best unions in this Province. Thank you. SOME HON. MEMBERS .; Hear, hear! ,, ,. MR.

SPEAKER (Russell)~ Before I recognize the hon. Leader of the Opposition (Mr. Neary) 1 I would just like to welcome to the gallery Councillor Tessier from Gander and Mayor Regular and Councillor Regular from Ming's Bight. S'OME RON .__J1EMBERS: ~R. SPEAKER.=_ Opposition, MR. NEARY: Hear, hear! The hon. Leader of the Mr. Speaker, first of all I want to congratulate my colleague for presenting this petition on behalf of the 3 1 600 residents of ~ 7 ~i Q

June 29,1982 Tape No. 1775 ah-1 MR NEARY: this Province who feel that conditions in the woods, in the logging operations of this Province are deteriorating because of the policy that is presently being carried out by the Minister of Forest Resources and Lands (Mr.Power). Mr. Speaker, a petition, I suppose, is the most democratic way there is in our society for citizens to express their views and their complaints and their gri~vances on matters that concern them in this Province.

And whether or not a member disagrees with the wording or disagrees with the petition itself,it is incumbent upon that member, it is his duty and his responsibility when he is called upon to serve his constituents and to present petitions . And, Mr. Speaker, we have had occasions in this House when members have tabled - MR.MARSHALL: MR.SPEAKER (Russell): of the Council. MR.MARSHALL: A point of order. Order, please! The hon. President A point of order. The hon. gentleman is obviously playing to the galleries.

The hon. gentleman should know full well that nobody can get up in this House and speak on a petition unless one supports it. That is the issue at stake in this particular situation. MR. SPEAKER: Order, please! I am not sure the hon. member has raised a valid point of order,but I would suggest that the hon. Leader of the Opposition should speak to the petition or not. whether he supports it MR.NF.~RY: Mr.

Speaker, I am supporting the prayer of the petition and I would hope that all hon. gentlemen on both sides of the House will support this petition, unless thev ••rant the logging operation to go back to the pre IWA days. And I am afraid, Mr. ;17 :, n

June 29,198 ·2 Tape No. 1775 ah-2 MR.NEARY: Speaker, that is what is going to happen unless the minister is prepared to face up to this problem . Now the minister just got up in his place and did not say whether or not, Mr. Speaker, by the way, whether he was supporting the petition or whether he was opposed to it.The minister just rambled on for f ive minutes saying we are willing to co-operate and \-'e ar.e aware of the problem and we are prepared to continue our co- operation with the company and with the union .

But in the meantime, Mr.Speaker,while the bon. gentleman is sitting on the fence the situation in the woods is getting worse. The paper companies are taking advantage of the current recession by exploiting the sm~ t 1 contract o r·s and the loggers who are forced to go to work ~or those contractors and the situation, Mr. Speaker, is becoming worse . And the minister can be as pious as he wants and he can sit on the fence, Mr. Speaker, all he wants but the fact of the matter is that as long as he ;\ 7 il .,

June 29, 1982 Tape 1776 EC - l MR. NEARY: continues to do that then we are going to have people living in tar paper shacks in the woods and sleeping on the ground and so forth and so on. And the hon. gentleman is well aware of the problem because we understand, Mr. Speaker, that the union took the hon. gentlemanhiMself out in the •·mods to view these conditions, so the hon. gentlemap is aware of the conditions. So, Mr. Speaker, we need something more than just to have the hon. gentleman stand in the House and say we are prepared to co-operate. That is no good, what we need is action.

And the only way to get action, Mr. Speaker, is to meet the problem head-on. My hon. colleague made an excellent suggestion and one, I am sure, Mr.

Speaker, that the union will agree with, and that is to set up an independent committee to study this matter and make recommendations to the department, if the department cannot make up their own minds; if the minister cannot make up his mind what to do about this problem, then to farm it out to an independent committee, get the views of the union and the views of the company and the views of the men who are forced to go to work for less than union wages without any fringe benefits that the members of the union are getting. These fringe benefits and these wages, Mr.

Speaker, were fought for over a period of years? It was a tough fight to get these benefits,and now they are gradually being taken away for the simple reason that we are in the middle of a recession, that the company feels that men now will go to work for practically nothing and they do not want fringe benefits. I think, Mr. Speaker, that is a terrible situation and if we ~ 7 it')

June 28, 1982 , Tape 1776, Page 2 -- apb MR . NEARY: do not watch it , I am a£raid we are going to go back to what conditions were in the woods back before 1959 . MR . HODDER : It is getting worse, is h. not? MR . NEARY: It is getting worse. I would hope that the hon . gentleman would give se rious consideration to the prayer of the petition and the recommendation made by my hon. colleague . MR . MARSHALL : of Supply . MR . SPEAKER: ORDERS OF TBE DAY Motion No. 2, Committee Motion No .

It is moved and seconded that I do now leave the Chair for the House to resolve it self into a Committee of the \'lhole to consider certain resolutions relating to the imposition of a tax on the income of individuals and the imposition of a tax on the income of corporations . On motion, that the House resolve itself into a Committee of the Whole on said resolutions, Mr . Speaker, left the Chair. COl-tMITTEE OF THE \-THOLE MR . CHAIRMAN (Aylward) : Order, Please ! Bill No . 49 ~ 7 i: .{

June 29, 1982 MR. CHAIRMAN (Aylward): DR. J. COLLINS: Tape No. 1777 MJ - l The hon. the Minister of Finance. Mr. Chairman, as the hon. member opposite points out, what we are doing in actual fact is debating a resolution. And the resolution is quite brief. It says: "BE IT RESOLVED by the House of Assembly ~n Legislative Session convened as follows, that it is expedient to bring in a measure to amend the Income Tax Act." And during the debate on the resolution we will in actual fact also debate the provisions of the bill that will be introduced subsequent to the resolution, presuming that the resolution is passed.

So we will deal with the bill in Committee in all its aspects. Now, Mr. Chairman, this resolution is introduced,and the bill that will flow from it is introduced as a result of the Budget Speech. And the particular point that we are debating at the present time is an increase in the provincial income tax, that is one aspect, and another aspect is an increase in general corporation income tax rate.

In regard to the provincial personal income tax, the rate is effectively increased from fifty-eight per cent of the federal tax, it is increased from that to sixty per cent of the federal income tax as of the lst of July. Now the wording of the actual bill itself is a bit different than that but it comes out to be the same thing.

The actual wordinq of the bill is that there will be the usual fifty-eight Fer cent for previous years,and then for this present fiscal year, from the beginning of the fiscal year, the rate will be fifty-nine per cent -right from the beginning of the fiscal year - and then subsequently the rate will be sixty per cent. Now it was done in that way so that it could conform with the federal income tax legislation. In other 3 7 (, !,

.. June 29, 1982 Tape No . 1777 M.J - 2 DR . J. COLLINS: words, our agreement with the federal income tax people for collection of our provincial pe~~onal income tax is such that they could not bring in the rate that we wished them to brin g iP ideally as of the lst of July . they could make changes for the whole fiscal year . So it is done in that way, fifty-nine per cent for this fiscal year,sixty per cent subsequently. But it does come to the same thinq whether you charge one per cent for twelve menths or two per cent for six months is the same amount of mc:mey that the tax payer pays. ?o 7 ;. c,

June 29, 1982, Tape 1778, Page 1 -- apb DR. COLLINS: Just to give an idea of the amount that a taxpayer would pay, it might be useful ·•just to consider a married taxpayer supporting a wife and two children and earning a total income of $20,000. Now, his tax for this year, and, of course, this tax, as I mentioned will only effectively apply for half the year, his effective tax increase for this year will be seventeen dollars and seven cents. For a full year, when the effect of 2 per cent applies for a full twelve month period, such as it will in 1983-'84, his taxing will be thirty-four dollars and fourteen cents.

So the impact on an individual taxpayer, and, I suppose, you might consider a family of four as reasonably typical, is not very onerous, it is fairly mild. Now, of course, the more you earn, obviously the more impact it would have. For instance, the same family where the wage earner has a total income of $50,000, his effective tax this year will be ninety-three dollars, and in the full year, $186.00. But even at that, probably, it is not an onerous increase. MR. ROBERTS: a question, Mr. Chairman? DR. COLLINS: MR. ROBERTS: Would the minister permit Surely.

I am just wondering if the minister has a total of the estimated revenue that will be raised - seventeen dollars from an individual taxpayer and, of course, that is not necessarily multiplied by the number of taxpayers, could he give the Committee, Mr. Chairman, an estimate of the total amount to be rai$ed by each of these two tax increases? because there are two in the resolution, or two in the bill, anyway. Yes, two in the resolution. ;\7~h

June 29, 1982 Tape 1778, Page 2 -- apb DR . COLLINS : Yes, the estimated amount of revenue that would be raised according to the notes I have immediately in front of me, and perhaps the hon. member could point out if need be the two amounts he has in mind there. MR . ROBERTS: Well, the corporation tax is being raised, and the personal income tax. DR. COLLINS : Oh, yes, that is right. Well, just taking them in turn, for the personal income tax the amount that will be raised is estimated to be $6 million. ") .... " ., I ''

June 29, 1982 Tape 1779 NM - l DR. COLLINS: And then I was going to say a word on corporate income tax, that the amount there is estimated to be just under $3 million. MR. ROBERTS: DR. COLLINS: On the corporate. On the corporate. As hon. members will recall from the Budget Speech, not only are we increasing the provincial personal income tax, but again I would point out that the amounts of tax that an individual taxpayer would pay are not very onerous, and of course we do also recall 1 and I have alluded to that already, that the personal income tax mechanism is what is called a progressive mechanism.

In other words,it bears lc«st on those least able to pay, and it bears more heavily on those more able to pay because of their total annual income. So in that respect if you have to increase taxes, and I am afraid that the realities of life are that occasionaly taxes have to be increased, if you are going to increase taxes, using the progressive personal income tax mechanism is probably one of the fairest - well I suppose it is the fairest that we have been able to devise.

Now turning to the other one though, the qeneral corporation tax will increase from the present 15 per cent of taxable income for the corporation, will increase to 16 per cent. There is a l per cent increase there and this increase is deemed to come into effect as of the lst. of July, 1982. There are certain other provisions in the bill there which indicate that if a company had its year start a different time than January lst., there is a proration in relation to the number of days of their own year, their own fiscal year,in relation to the government's fiscal year. ~ 7 ;, q

IJ June 29, 1982 Tape 1779 NM - 2 DR . COLLINS: I would poin t out that in terms of thi s increase it relates to large corporations . It does not relate to small businesses and the vast majority of businesses in ~~is Provi nce fall into the small business category . We use the same definition as the federal government in differentiatinq bet ween what is a large corporation and what is a small corporation .

Most jurisdicitions use that particular definition and all I can say on th at is the vast majority of businesses in the Province of Newfoundland and Labrador will not see an increase in their corporate income tax because they will fall under the definition of small business. It might be of interest to hon. members, ;i 7 :, :.s

June 29, 1982 Tape 1780 PK - 1 DR. COLLINS: Mr. Chairman, to note where we stand in relationship to other provinces on corporate income tax. MR. ROBERTS: - ·----- They are all lower than we are. DR. COLLINS: They are all lower , although Nova Scotia, Manitoba - I should not say they are all lower, actually British Columbia is the same, but Nova Scotia and Manitoba are just 1 per cent lower. In regard to small business we do find it necessary to have the largest tax rate in Canada, but it is 12 per cent as opposed to the 16 per cent which will be applied to large corporations. With those explanations, Mr.

Chairman, I move the adoption of this resolution and the subsequent introduction of a bill such as has been circulated to give effect to these changes. SOME HON. MEMBERS: Hear, hear! 1\N HON. MEMBER: A good point. MR. CHAIRMAN (Aylward) : ~he hon. member for the Strait of Belle Isle . MR. ROBERTS : Mr.

Chairman, the minister and the committee will not be surprised to know that we on this side do not intend to vote for this resolution nor for the bill which will be introduced to implement it 1 assuming as I do the resolution will carry given the immense majority to the minister's back. our reasoning for it, I can state very simply- my friend and colleague, the Leader of the Opposition (Mr. Neary) will doubtless be with us again shortly; he is off giving an interview to one of the media people, Unlike the Premier who is no longer talking to them, the Leader of the Opposition certainly is. i7~n

June 29, 1982 MR. TULK: MR. BAIRD: MR. ROBERTS: Tape No. 1780 PK-2 He broke that last night. (Inaudible) again. My friend from Humber West (Mr. Baird) has once again erupted from the bowels of wherever he erupts from these days. I am simply stating the facts, Sir, nothing but the facts. Now, Mr. Chairman, the Leader of the Opposition (Mr. Neary) - as I was about to say before the rude interruptions of the rude gentleman opposite, who did interrupt - will doubtless be able to give

chapter and verses to the reasons why we are not prepared to vote for this legislation. They rest with the fact that we do not entirely approve of the use to which the government puts this money. And this bill, if approved, will flog an extra $9 million out of the taxpayers of this Province. The taxpayers of this Province are already the most heavily burdened in Canada, bar none, there may be one or two who are as heavily taxed as the Newfoundland taxpayer, but none who are more heavily taxed.

And secondly, the capacity to pay in Newfoundland and Labrador is, of course, far below that which pertains elsewhere throughout this country of ours. And that is not something the government are proud of, it is not something we are proud of, it is not something anybody is happy about, butit is a factor which in our view ought to be taken into account. :i7==il

June 29, 1982 Tape No. 1781 so - 1 MR. ROBERTS: So here we have a case of a government that is on a profligate, spendthrift, wastrel course,as has been documented so often and so very effectively by most of my colleagues here and particularly by the Leader of the Opposition (Mr. Neary), and on the other hand we have them raising, extracting and exacting,an extra $9 million from the taxpapers of this Province,from taxpayers who 1 of all the taxpayers in Canada,are least able to bear that exaction, least able to support the extraction.

Now my friend, the Leader of the Opposition, is back and in due course he will be able to give us some more of the shining examples of the way in which this government spends its money and makes it mark with the taxpayers. I wanted simply to make one or two points about the minister's figures which are funny, although I am sure he did not intend them to be strange. I am perplexed by this $17 average taxpayer figure, and this is the sort of thing that Finance ministers trot out from time to time. HR. HODDER: Fiddle with. MR. ROBERTS: Now Finance ministers are an unusual breed, they walk apart from human kind.

It does not matter whether they are here or in Ottawa, people pass them on the side of the street, they shun them, their children are pointed out in the schoolyards. And generally when a Pinance minister walks into the room there is much whippering behind the hands. And that applies not simply to the hon. gentleman who so graces the office here in Newfoundland today, it applies also to his counterpart, his contemporaries, his colleagues, his confreres, whatever they are 1 across the country 1 because it is them against us. :=: 7::.; ')

June 29, 1982 Tape No. 1781 so - 2 MR. ROBERTS: We are all taxpayers and they are on the other side with all of us. They are all prone to trot out these marvelous little figures. And the minister l. "s given it as his opinion that- and I have no doubt :n :; ~

June 29,1982 Tape No. 1782 ah-1 MR.ROBERTS: his officials have told him so;the minister is certainly not misleading the House, he is certainly not attempting to deceive iri any way - he has told us that the two per cent change in income tax -one per cent of it is to come in this year and the full two per cent to come in next year; it is sixth of a per cent a month and since there is only six months left in this year we are only going to have to pay one full per cent during this calendar year.

It is a sixth of a per cent a month, so next year with twelve calendar months in a year , twelve months in the tax year for individuals,we will have to pay a full two per cent and that is what the ministry are doing and for good or bad there it is. And the minister has told us that this year this will be $17.00. An'average'tax- payer will contribute $17.00. And if I heard him correctly he spoke of a taxpayer making $20,000 a year and supporting a spouse and two children.

I think that was the example he gave and it is a fairly typical family situation I suppose and it is a fairly typical example. $20,000 a year would certainly be above the mggian income in Newfoundland , well above the per capita income. I have no idea where it stands in the range of taxable income,but it is well above the tuxable income or the income - because I suspect the minister was speaking of income and not of taxable income-of the income that most people in Newfoundland have to come and go on. Now, Mr. Chairman, the miilister and his parliamentary secretary are deep in a huddle.

Hopefully the parliamentary secretary will educate the minister. It certainly will not be the other way around, I assure Your Honour. Now, Mr. Chairman, let me take it a step further. :1 7 'i I;

June 29,1982 Tape No. 1782 ah-2 MR.ROBERTS: I hope both of them will listen because I hope one of them will respond because I have a most interesting point to make . The minister said it was $17:00 for an average taxpayer,as he defined the average or the typical taxpayer. He certainly did not say it was $17.00 an ave_rage. Now I would like him to tell us a little more about that because he then went on i.n response to mY question to say that this measure would extract $6 million from the people of Newfoundland this year.

Now if you divide $17.00 into $6 million by my car -eful mathematics you get 353,000, which would"indicate that the minister will be extracting on an average - now I realize that he was talking of typical and not necessarily averages,but I am just going to take his figures and try to put them into perspective that 353,000 taxpayers were ·each going to contribute $17.00. Now that is sheer nonsense. We do not have 353,000 taxpayers in Newfoundland today. Would to God we did! What have we got? 600,000 people, 580,000 whatever the - MR. NEARY: 565,000. MR.ROBERTS: 565,000.It is going down,is not? Tory times!

People are voting with their feet and they are leaving the Province. But the total population is about 580,000, Mr. Chairman. I.ct us assume that half of them ., ""! - •• \·~ J .... ~

June 29, 1982 Tape 1783 NM - 1 MR. ROBERTS : are children under the age of sixteen or seventeen, that brings us down to under 300,000, And certainly not everybody else pays taxes, because to pay taxes you have qot to have some income at least. And I know that with the corning of such marvellous Liberal benefits as the child tax credit and other ways to enable the federal treasury to pour into the hands of individuals, more people are joining the taxpayers rolls so they can get money back as opposed to paying money in. I do'not think we have 353,000 t_axpayers.

What I arn saying is for the benefit of the minister, and more importantly the gentlemen and ladies of the press who presumably have carefully scribbled down that this new tax increase is $17 for the typical Newfoundlander: Well that just is not so. It may well be $17 _for the minister's example; I do not suggest the minister is mis­ leading us, I do not suggest he is trying to deceive us .. What I do say is that his example is not an illustrative one, does not give the truth. This particular piece of legislation, Mr.

Chairman, if approved, will take $10 from every single person in the Province today. $581,000 into $6 million is near enough to $10 per person. And so the family of four will contribute $40, not the $17 of which the hon. minister speaks. Now I am using mathematical averages and I want to go on to point out that there are some,such as the hon. the minister - you know, the ministers in this Province today, Mr. Chairman, are making $iOO,OOO a year and will pay tax on that kind of money this year, or they ought to. If not they have trouble with the tax authorities.

Those people, people at that level of income,will be paying a great deal more than $17 each. But I want to knock on the head this Finance Minister's figure of $17, 3 r; r,

Jun e 29 , 1982 Tape 1783 NM - 2 MR. ROBERTS: it is this minister's figure in this debate , but of course Finance ministers everywhere are prone to it and as I say that is why people shun them, that is why pec~te wa lk on the other side of the street when they see a minister of finance coming and of course this Minister of Finance {Dr. Collins) is no better and no worse than all of those who have honoured that position over the years. The other point I wanted to make, Mr .

Chairman , before I le t some of my other colleagues have at the minister on this one . because of course we only debate it here in Comm~ttee, we can speak over and over again , 1 do not think we have a seventy-five hour rule,do we? The hon . gentlemen opposite have not as yet used t.heir majority to l imit debate here . They probably will. They probably will . But as yet they have not so we can debate this as long as we want - MR . CARTER: The longer the better . ~7';7

June 29, 1982 Tape 1784 EC - 1 MR. ROBERTS: Mr. Chairman, my friend from St. John's North (Mr. Carter) who, you know, has reached a niche in life, his niche in life that he is a tormentor MR. CARTER: Nitch. MR. ROBERTS: Nitch? The hon. gentleman may think it is nitch, I think it is niche or nicht, which means 'nothing', which might perhaps suit the hon. gentleman. But what I am saying is he has arrived at the point now where his only ambition is to try to irritate me.

Well, he does not irritate me, he does annoy me and, Sir, the difference between irritation and annoyance is like the difference between catastrophe and disaster. If the hon. gentleman from St. John's North were to fall into the St. John's harbour that would be a d,is.aster, Sir, but if someone were to pull him out that would be a catastrophe. SOME HON. llliMBERS : Hear, hPO'!J:"! MR. ROBERTS: And that is the difference between annoyance and irritation. Now, let me carry on without the benefit of not even the half blank comments of the hon. gentleman from St.

John's North, not even the infinite percentile blank comments of the hon. gentleman. Let me simply come to a point about the $3 million which corporations are going to pay. I am the first to say that the corporations ought to pay their share of the freight. But we have to go on in recognizing that principle - and I am sure that the minister will agree with this in philosophy, he may not agree in application - we have to realize that it is Cape St. Mary's that pays for all, to mix the metaphor, and if we want to :17~R

June 29, 1982 Tape 1784 EC - 2 MR. ROBERTS: have a vibrant free enterprise society, if we want to fatten the goose that lays ·the golden egg, using the corporation as being the goose and the golden egg as being the taxes, then we are going to have to look carefully at the fact that we have the highest corporate tax rate in Canada. There may be another province or two that equals us. I have not attempted to keep track and I have not bothered looking it up for this particular debate at this time - easily available, but we are taxing corporations very heavily. And I will say, Mr.

Chairman, that the minister and his colleagues are going to have to look at that. I wonder whether perhaps we are at the point of diminishing returns. Individuals, Sir, have little mobility in that sense of the word. Your Honour is a land surveyor when Your Honour is not surveying from the Table and from the Chair of the House. Your Honour's mobility is limited. So if the personal tax goes up, Your Honour can only mutter and then,when the election comes, do the appropriate thing, whatever that is. But a corporation, Sir, is mobile.

And one of the reasons, I suggest, why we are seeing a dearth, a pronounced dearth of economic activity in this Province, a pronounced lack of entrepreneurship, is the fact our corporate tax rates are so very high. I know that ~ 7 S 'I

.Tunc 29, 1982 Tape 1785 PK - 1 MR. ROBERTS: there is a small business rate, because , of course, our rules are precise!~ the same as those of the federal government. That is as the minister said. Because the federal government collects taxes for it. They do it for every province except Alberta, Ontario, and Quebec. There are three provinces that are wealthly enough or large enough to have their own corporate tax collection systems.

But we, Sir, simply hire Ottawa, I do not know if they charged us very much or anything, but thev do collect this tax under the authority of the legislation which this House has enacted and in now being asked to amend. So I simply say to the minister as a point of practicality, while the corporations must carry their share of the load,we are coming to the point where entrepreneurs are shunning Newfoundland and Labrador,deliberately turning away. part of it is the attitude of the government of which he is a part, but part of it as well is the tax levels of which bill forms a part.

It applies to corporate taxes, it applies to personal taxes too. We talk of the oil companies coming in, we talk of people coming here, we talk of our own Newfoundlanders taking advantage of it; a Newfoundlander gets his training and he can leave here then and go to another province,· What is Alberta - half our tax rate? Actually it is not , it is thirty-two againct sixty. It is near enough to half. You know, that is something we have got to take into account. I know the government need revenue, and I know that we can only tax what there is to be taxed. But at the same time, Mr.

Chairman, we have got to realize that if we kill the goose that lays the golden egg there will not be any more eggs, scrambled or otherwise, Now I will let my colleagues carry on. The Leader of the Opposition (Mr. Neary) has retu~ned ~7r.rt

June 29, 1982 Tape 1785 PK - 2 MR. ROBERTS: re~reshed, armed for the fray; my friend for Port au Port (Mr. Modder) has a few thous .and cogent words that he will address to the minister in an effort '-o help the minister 1 and generally if we move smartly along by about Friday at noon we should be ready to consider putting part of this resolution to the vote, That is before the amendments come,of course. So, Mr. Chairman, let me just say that , first of all, the minister 1 s figures are fun ny - they are not incorrect, they are not - MR . BARRETT: (Inaudible) . MR. ROBE~TS: - .- - I am sorr y? ~he hon.

Parliamentary Secret speaks again . Now ,Mr . Chairman , let me say the min±ster's figure are funny because they do not show a true picture . They are like the ·mirror in the crazy house that when you stand in front of it it shows a dintorted picture and that is what the m±nist ·er 1 s figures show . This bill, this tax wi ll cost Ne.wfoundlanders a great deal more than $17 for a family of four; on a mathematical average it \-11111 cost $40 for a family of four. taxpayers wi ll end up pay.inq far more than the $17 figure which the minister spoke of. ~ 7 ll I

June 29, 1982 Tape 1786 NM - 1 MR. ROBERTS: ~nd more importantly, Sir, I think we have qot to have a lonq hard look at how our money is spent. Our main obiectiv~ to this resolution is that the bill itself seeks authority to raise money for the government to spend and we do not think they are spending money wisely,and so we are going to oppose them abstracting even more from the taxpayers of the Province. SOME HON. MEMBERS: Hear, hear! MR. CHAIRMA."J (Aylward) The hon. Minister of Finance. DR. COLLINS: Mr. Speaker, the hon. member opposite raised a number of points.

I think the first subject he got into was the undesirability of raising taxes and that he did not feel that he could support this bill because of the way that this government uses the taxes raised. Well,now the bon. member is not here to hear my response to the points he raised but nevertheless I will give them anyway.

And I could say this1that if the federal government had not changed the Fiscal Arrangements Act -as was their right this year, they did change it; they have a right to negotiate changes every five years and that is what they did this year,so I am not quibbling with their right-· but if they had not changed it the way they did,we would not have had to bring in the tax changes we qid bring in. Because the tax changes we brought in in fact almost exactly offset the decreases in provincial revenues that resulted from the change in the Fiscal Arrangements Act, which as I say was negotiated by the federal government.

I am not say that the federal government is responsible for our taxation levels, All I am saying is that the changes in our taxation this year were the result of the changes that flowed out of the new Fiscal Arrangements Act. We had to find, unless we wanted :17!-i~)

June 29, 1982 Tape 1786 NM - 2 DR. COLLINS: to decrease essential services - and we felt that we could not cut back on health care services, we could not cut back on post - 3 7;:: ·~

,Tune 29, 1982 Tape No. 1787 so - 1 DR. COLLINS: secondary education services and certain other services that are funded by the fiscal arrangement mechanism. We felt we could not cut back on those - so if we did not want the cut back on them we had to find some means of picking up the slack that was left by the fiscal arrangement changes. And unfortunately the only way we could pick it up was through the taxation mechanism, and this particular way of doing it is part of the taxation mechanism.

Now the other thing - I am glad to see the hon. member is still within earshot there he says that finance ministers are shunned. I do not kno~ if that is true or not,but I think there are a few points to be said . Firstly., the hon. member holds the Liberal Party philosophy 1 and I quite' agree with him that Liberal Ti'inance ~1inisters tend to be shunned. MR. BARRETT: Hear, hear . DR. COLLINS: I fully agree with him in that respect. He is familiar with Liberal Finance Hinisters so that I do not wonder that he tends to think that Finance Ministers are shunned because of that perception of Finance Ministers.

But, however, I think there is another bit of evidence that he might consider, that the voters in St. John's did not shun this Finance Minister, the provincial Progressive Conservative Finance Minister. MR. BARRETT: Hear, hear. DR. COLLINS: As a matter of fact, the good folk in St. John's South not only did not shun this Finance Minister, they gave him an overwhelming vote of confidence 1 for which I am duly grateful. SOME HON. MEMBERS: Hear 1 hear. DR. COLLINS: So I think that the hon. member should consider these points when he makes such a statement.

Now the other point that the hon. member got into was with certain mathematical machinations :1 7;:.; ,,

June 29, 1982 Tape No . 1787 SD - 2 DR. COLLINS: there and be tried to show that because I said a married taxpayer supporting his spouse and two children would pay this year $17.07 more than paid last :'ea r on personal income tax , that the figures were funny . I do not s.ee he said they were wrong , he was careful to say they were not wrong, he said they were funny. And, of course, the only funny thing is that he figured a funny \vay. No one says that $17.07 is the average amount that the taxpayers of this :17 ;) ;

June 29, 19 82 Tape No. 1788 MJ - l Dl<. J. COLLINS: Province will pay. I just gave an example, I did not claim it was an average, I just said that this was a somewhat typical family grouping and I wanted to show what such a typical family grouping would pay. So it was the funny way the hon. member opposite came up with his point, which was not a valid point, that led him to think that our calculations were funny. In actual fact our calculations were based on information given to us by the f.ede~al government, which, as the hon. member opposite rightly said, collects our income tax for us.

It is an arrangement we have with the federal government that they in actual fact collect our personal income tax and remit it to us and that is part of the Confederation deal. Now the final point that the hon. member made was that corporations are shunning this Province because of our tax levels. I am sure that companies would wish our tax levels were less, I am sure that individuals would wish that our tax levels were less 1 but I do not think there is any evidence that at the present time that our tax levels are causing co~panies who would ordinarily come here, not to come here.

I think we have to remember that most companies operating in this Province are doing one of two things; they arc either operating on the basis of our natural resources, or they are attracted by the consumer market here. In other words,we are not an exporter of manufactured goods or whatever like that 1 so that people would not tend to set up business here for the export of manufactured goods. They set up here to process our natural resources and to service our consumer market.

And I do not think our tax rates in any way are diminishing the services we get from companies in processing our natural resources or in serving our consumer markets. As a matter of fact, in terms of cons1~er markets, there is a considerable '17"" ,'1 I t: ~

....... June 29, 198 2 Tape No. 1788 MJ - 2 DR . J. COLLINS : amount of competition to the local ent repre neurs from entrepreneurs outside the Province ana l-7e see this about us every day of the week in terms of supermarkets as opposed to th e corner grocery store and so on and so forth . MR. B.I\ .RRETT : Good answer . DR . COLLINS: So my colleague behind me says I am giving extrem ely good answers and I am gra teful for his suppo rt and with that sort of sup port I hope that this resolution and this bill will pass shortly. AN HON. MEMBER: Hear , hear ! MR . S. NEARY: Mr. Chairman . MR .

CHAIRMAN (Ayl ward) : The hon. the Leader of the Oppos iti on . MR . NEARY: The Minister of Finance (Dr . J . Collins) must have misunderstood my colleague . It was not shun that he meant at all. You hav e to substitute the 'h' for a 't', it was stunned that he 1-1as talking about , Mr. Chairman . And the hon . gentleman who is seated behind the minister, looking up at hi m with his mouth open,wild-eyed ,sa id that the h'on. gentleman is giving good answers. Well one of the answers that the Minister of Finance gave 1vas completely untrue . ?.7;.,7

June 29,1982 Tape No. 1789 ah-1 MR.NEARY: The han. gentleman took the cowardly way out again and blamed Ottawa for the increase in income tax in this Province by saying that because of the rearranging of fiscal matters concerning this Province that they had to whack on an additional tax to recover the money that they were short-changed. Well, Mr.

Chairman, I have here in front of me a table that was prepared by the Department of ·Finance,March l982,and it forcast the amount of money that this Province would receive from Ottawa from this year up to 1986/87, from 1982/83,in that fiscal year, up to the fiscal 1986/87 and , Mr. Chairman, I want han. members to llsten to this, to listen to it to see and just compare it to the statement just made by the Minister of Finance (Dr.Collins) that we are going to lose money as a result of the new fiscal arrangement. That is what the han. gentleman said. MR. SIMMS: True.

MR.NEARY: And the member for Grand Falls (Mr.Simms) says we are. '1R. SIMHS: Under the old system. MR.NEARY: Mr.Chairman, whether we are under the old system or the new system we are going to get more money from Ottawa than we did last year. ~1R . S H1~1S : But not more than we would have got under the old system. MR.NEARY: Oh , I see. That is the complaint 1 not more than we w·ould have gotten. I see. ~7ell let us see what we are going to get, SOME HON.MEMBERS: Oh, oh! ~ 7 ~; •!

June 29,1982 Tape No. 1789 ah-2 MR.NEARY: Well let us see what we are going to get, Mr. Speaker. Last .year in equalization payment the Province received approximately $431 million. Now what will we receive this year? The hon. member for Grand Falls (Mr. Simms) who says that the Minister of Finance (Dr.Collins) is giving good answers,well could the han. gentleman hazard a guess? MR. SIMMS: You have the sheet. MR.NEARY: I certainly have got the sheet and it contradicts the statement made by the Minister of Finance (Dr.Collins).

It says this year we will receive in equalization payments approximately $522 million, $522 million compared to $431 million last year. MR. SIMHS: Now, what would we have received under the old system is we were paid the same way? Do you have that figure? MR.NEARY: Mr. Chairman, let us see what we are going to receive in Established Funding Programmes. SOME HON.MEMBERS: Oh, oh! MR.NEARY: In ·EStablished Funding Programmes we received last year $165 million and this year we will receive $5 million less, $160 million. Okay.

Now, in the Established Funding Programmes tax transfers,last year we received $56 million and this year we will receive $65 million. MR. SH1MS.:_ We woula have received $70 million. ::n :~ ;j

June 29, 1982 Tape No. 1790 apb-1 MR. NEARY: No, we would not have received - SOME HON. MEMBERS: Yes. ~1R. NEARY: Mr. Chairman, there was no guarantee that we would have received anything until it was put into the constitution. Now it is a part of the constitution of Canada. MR. BARRETT: Thanks to Premier Peckford. MR. NEARY: Thanks to the Liberal Government --- in Ottawa. Prior to that, Mr. Chairman, there was no guarantee that we would receive anythinq, there was no guarantee. And Mr. Diefenbaker and the Tories proved that back in 1959 with term 29 when they altered the equalization payments to this Province.

But now, thanks to the Liberals, it is enshrined in the constitution. MR. SIMMS: Hear, hear for the Liberals. MR. 'I'ULK: What did you have for breakfast? MR. NEARY: So, Mr. Chairman, we are going to get $9 million more in tax transfers. And we are going to <.Jet another $7 million that we did not get last year and it is called - listen to this, Mr. Chairman, just listen to this - Provincial Tax Collection Change, $7 million. We did not get thnt last year. Not Revenue Increase Due To Budget Tax Changes $6 million, and $1 million, another $7 million that we did not get last year. So, Mr.

Chairman, in actual fact what are we going to get in payments of various kinds from the Government of Canada in the Current fiscal year ~s roughly $800 million compared, last year, to $652 million. Close to $800 million of revenue will come into this Province from the Government of Canada as a result of equal- ization and transfer payments of one kind of another, and tax adjustments and amounts to offset other transfers. So, Mr. Chairman, we are going to receive ~77fl

!.:..;:.. June 29, 1982 Tape 1791 NM - 1 MR. NEARY: around $800 million. Next year, 1983/84,we will get $847 million; 1984/85 we will get $945 million; 1985/86 we will get $1 billion from the Govc~nment of Canada. In 1986/87 we will be getting $1,172,000,000 from the Government of Canada. Mr. Chairman, in a five year period, between five and six years,here is what we will get in this Province from the Government of Canada. We will get $4,774,000,000. Why that is better than oil, $4,774,000,000 from the Government of Canada in the next five or six years. Mr.

Chairman, if we were producing oil, which we are not and we will not be for the next fifteen to twenty years, during the twenty year, estimated l:i.f'e span of Hibernia, not one of these years will the revenue cominq to this Province equal what we are going to get from the Government of Canada, not one out of the twenty years. We will h0 a have not province for the twenty years. Mr.

Chairman, if Hibernia was producing, and it will not be for the next twenty years or so, if it was producing-the estimated life of Hibernia is twenty years- during that twenty year period, based on the figures I have in front of me, not one out of the twenty years will we be considered to be a have Province. The definition of a have province being that we would get no equalization grants from the Government of Canada, from Ottawa, Under the formula worked out between the provincial and federal qovernments. MR. ':.'OBIN: It is not worked out yet. MR. NEARY: What formula is the hon. gentleman talking about?

Owning the resource? AN HON. MEMBER: No. MR. NEARY: Yes, Mr. Chairman, owninq the re- source, charging world prices per ba+rel of Clil.. 'T'h<> hon. gentleman should go down to the Petroleum Directorate, dig out (.771

June 29, 1982 Tape No. 1792 SD - 1 MR. NEARY: the figures and then the hon. gentleman will get the shock of his life ,that not one out of the twenty years will we be considered as a have Province. Now if we had two oil fields, two like Hibernia, possibly in the twenty year period we could make money, we would reach the break even point. Mr. Chairman, so the statement made by the hon. gentleman is incorrect, it is false, it is untrue. AN HON. MEMBER: No it is not. MR. NEARY: It is completely untrue.

Up to the time the Constitution was brought back to Canada there was no guarantee that we would receive one cent from Ottawa. Thanks to Mr. Trudeau and the Liberal Government it is now enshrined and entrenched forever in the Constitution for the first time in our history. MR. TOBIN: You are digging the hole down deeper boy. MR. NEARY: Digging a hole deeper for what? SOME HON. MEMBERS: Oh, oh. MR. CHAIRMAN (McNicholas): Order, please! The hon. member's time has elapsed. MR. NEARY: Well, we will get back at it again. But, Mr.

Chairman, I would like to lay this document on the table of the House in case the news media want access to it to see the fallacy in the minister's statements, misleading statements that he has been making about this matter. MR. CHAIRMAN: Order, please! Before recognizing the hon. Minister of Finance (Dr. Collins) I would like to draw the attention of the Committee to a ruling I made the last sitting day. On looking into it, I was in error. This was about exhibiting objects. In Beauchesne, page 117, paragraph 333, it.clearly states that it is not in order to produce exhibits of anv sort in the Chamber.

There was 3 7 "i ')

June 29, 1982 Tape No . 1792 sn-2 MR . CHAIRMAN (McNICHOLAS) : a precedent set in 1972 in this House when a member of the Opposition produced a codfish , and ther e was a f urther precedent set by a member of the government side who produc ed a polluted sampl.e of water. So I think I will ask that the salad dressing be returned to the hon . member for Torngat Mountuin s ( Mr. Warren) . M~ . NEARY : Probably would be di f'ferent , Mr . Chairman, if it stank, or created a stink all over the Chamber . MR . CHAIRMAN: I did not open the 1979 bottle of salad dressing to check i t . The hon . the Minister of Finance.

SOME !:ION. MEMBERS: Hear , .hear ! D~. COLLINS: Mr . Chairman , 1 "'as unavoidably out of the House on Friday mornin g and I seem to have missed some­ thing , there were exhibitions going on, or objects were being passed around or \-lhatever . MR. SIMMS: Objects being exhibited . DR. COLLINS: Mr . Chairman , I do not kno\-1 if it is really going to do any good to respond to the hon . member on the line of argw.nent he was taki ng . First of nll he made o statement saying that I made a certain statement, ~7"J':I

June 29,1982, Tape 1793, Page 1 -- apb DR. COLLINS: but his statement about the statement I made was incorrect. I did not say we would get less money, but the burden of my message - MR. NEARY: changing your tune. DR. COLLINS: Oh! So now you are I am not changing my tune, I am just correcting a misrepresentation that the hon. member has made of the remarks I made. What I was saying was that if the fiscal arrangements had not been changed, we would have been able to exhibit the essential services funded by the transfers under that act without bringing in new taxation measures.

But because the Fiscal Arrangements Act was changed the way it was, there was going to be a short-fall in our revenues and we had a choice available to us, we could either make up for the short-fall, which is what we did by bringing in the two taxation measures, or we could have left the short-fall there but diminish essential services. And we made the choice that we could not diminish essential services, so to make up for that short-fall we brought in taxation measures.

Now, at no point in time did I say that there would be an actual decrease in monies transferred, although,as the hon. member himself pointed out, in one respect there was an actual decrease under EPF, Established Programme Financing, there was an actual decrease of $5 million in the amount transferred over that particular part of the fiscal arrangements. And, of course, when you bring in the inflationary factor, there was a greater drop than that, because a dollar in '82-'83 is not the same value of a dollar in '81-'82.

So rather than having a decrease under EPF we should have had an increase just to stay where we were. And we did not have that increase to stay where we were, we had the reverse, we had an actual decrease. 'l .., .. ,, I I':

June 29, 1982, Tape 1793, Page 2 -- apb DR. COLLINS: The only other point I would like to point out is this , that I think it gives a very wrong impression if people say governments giv~ things. Governments do not give things . The ~~ovincial government does not give things . The provincial government has no money o! its own, the federal government has no money of it~ own , no government has any money of its own . What governments do is make available to various parts of ·the community on some sort of priority basis monies that they coLlect from citizens.

So to say that the federal government gives Newfoundland money \VOuld be like saying the Newfoundland Government gives widO\vS money . We do not give .widows monies , we collect taxes from citizens and we give those to widows. It is no particular credit to us except that I hope we do it reasonably efficiently, and reasonably sensitively. And, I thin k, in the same way the federal government 3 7 { l:l

June 29, 1982 Tape No . 1794 PK - 1 on. COLLINS : does not give Newfoundland any money, it collects monies from Canadian citizens, and gives it under some set of priorities and that applie~ to Newfoundland too . The other point that I think is \.;orth remembering is that we are by no means, by no means, the only Province that gets transfers from the federal government. As a matter of fact, all provinces do . Even Alberta gets transfers from the federal government under EPF. It does not under equalization, but it does get it under EPF .

And many other provinces get just about the same level of total transfers we do on a per capita basis, so that we have nothing to apologize for in terms of tra~sfers we accept through the medium of the federal governmen t from the citizens of Canada. So on the basis of those remarks, Mr . Chairman, I again move the adoption of this resolution and request that a bill subsequent thereto be put to a vote in the House . Motion, that the Committee report having passed the resolu tion and a bill consequent thereto, without amendment, carried . ;\7"iC:

June 29, 1982 Tape 1795 EC - 1 MR. MARSHALL: DR. COLLINS: Motion 3, Bil] No. 48. Mr. Chairman. MR. CHAIRMAN (Dr. McNicholas): The han. the Minister of Finance. DR. COLLINS: Mr. Chairman, just a very brief word on this just to ensure that han. members of the Committee do have a full appreciation of the resolution and the bill. There are two points to it, one is that there is going to be an increased tax rate on tobacco and tobacco products; I think that was stated in the Budget Speech and I am sure that bon. members realize that that is the objective,or it is one of the objectives of bringing in tho thinCJ.

But there is another objective too and I do not want to be in any way, thought to be misleading the House on this. •mere is a change also for administrative purposes.

Let me put i1: l:nis way: Up to the present time, the Tobacco Tax Act contained a range, a narrow range of taxes, and the a.ctual tax was set by regulation by the Lieutenant­ Governor in Council, by Cabinet, and that necessitated, you know, frequent amendments to the regulations because, of course, the tax is an ad valorem one and we as the base cost of cigarettes went up, well,ther had to change the ta x on an ad valorem basis so that that was rather administratively clumsy. We had to continually change our regulation and we had I to bring it before Cabinet.

And quite often, as the law states, a tax was due, but Cabinet may not be sitting at that particular time and there could be some delay in actually bringing in the implementation of the tax law. So there is another change this time, and that is that the actual rate of taxation is now written into the bill, still an ad valoren1 tax rate , ';'.777

June 29, 1982 Tape 1795 EC - 2 DR. COLLINS: but it is actually written into the bill, it states a certain number; and secondly, that is now brought in as need be, as the base cost of cigarettes and tobacco changes, is brought in under the authority of the Minister of Finance. :1 r~ ~~

June 29, 1982 Tap~ 1796 MJ - 1 DR. J. COLLINS: There is no need for anyone to make a decision and therefore go to Cabinet, it is written into the act and therefore it is just-a case of the Minister of Finance (Dr. J. Collins) giving the permission, shall we say, for that to be implemented when the cost of a cigarette or an ounce of tobacco or whatever changes in the marketplace. So those are the two things: The bill brings in the new tax rate, but it also clears up that administrative difficulty. MR. NEARY: MR. CHAIRMAN (MCNICHOLAS): MR. NEARY: Mr. Chairman. The hon. the Leader of the Opposition.

I am not quite sure if I clearly understood the hon. gentleman or not, so I am going to give my version of what the hon. gentleman said, or what I thought he said, to see if I am right or wrong. Is the hon. gentleman saying that from now on it will not be necessary to come to the legislature for an increase in the tobacco tax, that the authority for increasing the tobacco tax will rest with the Minister of Finance. DR. COLLINS: No. MR. NEARY: DR. COLLINS: MR. NEARY: That is not what the hon. gentleman said? No. I hope not. Because that would be a very, very dangerous situation indeed. DR. COLLINS: No, it is not.

MR. NEARY: Well, perhaps the hon. gentleman can straighten me out. What is it the hon.gentle man is sa ying then? The hon.gentleman :id not make himself clear. And while the hon. minister is on his feet, could he also tell the House how much, what is the total amount of taxes on tobacco that is outstanding at the present time? I do not know if the hon. gentleman has th e figure ~77q

Jun e 29, 19 82 'l'ape No. 1796 MJ - 2 MR. S. NEARY: with him,but a couple of years ago the Auditor General mentioned a figure that was staggering. The outstanding tobacco tax owing to the Newfoundland Government was staggering, Mr. Chairman. I do not remember the exact amount,but it was up in the millions of dollars. Has that been reduced? ~nd how much is the tobacco tax in arrears at the present time? If the hon. gentleman does not have the figures with him,could the hon. minister send and get the figures?

Because we would be interested in knowing these figures before we approve any further increases, There is no point in increasing the tax on cigarettes and tobacco if the government is not going to collect the tax. What problems, Mr. Chairman, is the Department of ?inance encountering in collecting this tax? I understand that some of the taxes outstanding are now uncollectable because the brokerage firms and the businesses have gone bankrupt.

So what will happen in a case like that~ will they be written off?Will the government try to recover the tax from the estnte or from the receivers,or will the amounts just be written off? I understand that one large amount was owed by a St. John's brokerage firm. so I will oe - interested, Mr. Chairman, before we vote on this bill, in finding out just what the situation is now regarding tobacco and cigarette taxes in arrears. ::17f-11l

June 29, 1982 MR. CHAIRMAN (Aylward) : DR. COLLINS: Tape 1797 PK - 1 The hon. Minister of Finance. Mr. Chairman, I am not in a position to give the dollar amount of ~axes outstanding. Let me say this though,that taxes outstanding can be Broken ihto two large groups. One, taxes outstandinq ~re of a very current nature. In other words, there has to be a certain point in time when a tax is due and, of course, the tax is due every month in terms of tobacco tax, retail sales tax and those types of taxes, and even though it is due as of that time,it takes a certain period of time before the actual money comes in.

So during that brief period of time that tax is outstandina, andthe amounts outstanding can be quite large in that case. For instance,returns are supposed to be in the '20th. of each month~ But the tax is outstanding, really, from the point of sale of the item, and an item could be sold twenty-nine days before the next 20th. of the month comes around, and that is current outstanding taxes, and it can be a large amount. Now in addition to that there are amounts that are outstanding , you know, for a much longer period because tax has not been remitted at the earliest opportunity.

In terms of tobacco tax that is a very small amount in the vast majority of cases,because the distributors of tobacco products in this Province act as agents for the provincial government in that regard,and they remit their taxes very currently. It is unusual for them to fall behind more than one month. Now,there may be an instance, and I am not aware of it if this is so, but I will certainly get the information, there may be an instance whereby a distributor goes bankrupt and 1 of course 1 that will upset the normal ~ 7 H ·1

June 29, 1982 Tape 1797 PK - 2 DR . COLLINS : remission of taxe s. I am not aware - MR . NEARY : There was one case where $100,000 was outstanding for a period of five or six years. DR . COLLINS: Well,not at the present time. I would highly doubt that . I am not aware that one of the five tobacco tax, there are only abou t five, one of the five tobacco product tax distributors has gone bankrupt in this Province . And I do know that these particular five remit their taxes on a very current basis.

So I do not think 1 but I will get the figures to be sure about this, I do not think there is any significant amount of tax owing on other than a current basis,and it would be expected that there would be a tax owing on a current basis. Now getting bac k to the other point, the hon. member asked if this bill will in some way interfere with this House setting a tobacco tax . . 1 7 ;~I

June 29, 1982 Tape 1798 EC - 1 DR. COLLINS: It will not do that. This House sets an ad valorem tax, that is, a proportion of the selling price will be the tax rate, and that cannot be changed. That proportion, whether it is 5 per cent or 2 per cent or whatever it is, cannot be changed by anyone until this House gives its permission to do so. What can change is that if the base cost of tobacco products change - MR. NEARY: What we are doing is the same thing we did with the gasoline - DR. COLLINS: Essentially, yes. MR. NEARY: basis. DR. COLLINS: basis. MR.

NEARY: - putting it on a percentage Putting it on the percentage Well, that is the same thing as removing it from the House. DR. COLLINS: Well, it is not the same thing as removing it from the House, because the House says that if a product is sold, a certain proportion of that selling price will be tax. So if the product is sold for fifty cents and there is a 10 per cent tax on it, the tax will be five cents.

If a product is sold for a dollar and there is still the same 10 per cent tax on it, the tax collected will be ten cents. · So the House knows what it is doing when it brings in the percentage type of ad valorem tax. And that can only be changed by the House. The only thing that has to be done administratively is that someone has to say the base price of the product has changed and someone says, 'All right, collect a certain amount of money now from the sale of that product that fits in with the proportionate tax that the House has set, 1 7 ;{ ·~

June 29, 1982 Tape 1798 EC - 2 DR. COLLlNS: and that is what the Minister or l"iii·IOL:(' \~lll do now rathur than <.:o.binct . It is just <rn adrninistra ti ve measure . I think that anS\vers the points raised. A1otion, that the Cornmi ttee report havino passed the re solution and a bill consequent thereto, without amendment, carried. ~!R • MARSHALL : Motion 5, Bill No. 47. on. COLLINS : Mr. Chairman. l.ffi. CHAIHMAN (Aylward) : The hon. the Minister of Finance. DR. COLLINS: Mr.

Speaker, this is referred t0 as t h<: ·.oan bill or the T.oan 1\ct, and what this act does is it places an upper limit on the amount which the Province may borrow through the issuance of securit ies, bonds and so on -not only bonds but various securit~es . 3 7 .·.1 ·,

June 29, 1982, Tape 1799, Page 1 -- apb DR. COLLINS: I think it is important to remember that this Loan Act refers to loans, through the sale of bonds and other mechanisms that the Province raises from the various capital markets. thisparticular bill does not refer, for instance, to the monies that we raise from the Canada Pension Plan, nor through treasury bills. We issue treasury bills every week and we raise funds through that mechanism. This bill does not refer to that, it just refers to monies we raise from the various capital markets.

Similarly, this bill does not refer to monies that we raise in regard to out­ standing bonds which are retired or refunded, we can borrow under another authority for roll-overs, as they are called. So this is just new borrowings that we are seeking authority for. Now, when we seek authority we do not necessaril y borrow the full amount that the authority gives us. The authority is usually somewhat larger than the actual amount we intend to borrow, the new borrowings we intend to get into. It is usually somewhat larger and that has been typically the case.

And there are a number of reasons for that: Firstly, there may be favourable market opportunities that come up through the fiscal year, and it is in the Province's best interest for us to have the flexibility to go ahead and borrow at any time and in any amount. Secondly, it may be desirable to actually preborrow. In other words, jn a particular year to borrow in unticipation of the requirements for the following year, and that is especially important at this time when interest rates are extremely variable.

And if one gets information that interest rates are going to go up, and we get this information on good authority, early next year, and we know that early next year we are going to need to '") 7 ~~ c. ,"1 I

.June 29, 1982, 1'ape 1799, Page 2 --ctpb DR. COLLINS: borrow funds, well, it would be in the best interest of the Province for us to borrow this year for early next year if interest 1·atcs an~ lower. Finally, of course, the Loan Bill permits us to borrow in round numbers. We borrow, say, in $50 million, $75 million and $100 million amounts, we do not borrow $37 million or $42.5 million or whatever. So there is a certain amount of rounding out there. Now, the amount requested 111 this year's Loan Bill is $220 million and perhaps I could give the Committee some information as to how that sum was arrived at. ....., ~1 ~ p ,1 I .-1 ''

June 29, 1982 Tape No. 1800 so - 1 DR. COLLINS: In the Budget itself the total requirements were laid out to be $336 million, that is the total requirement that the Province has for borrowinys this year. As I mentioned, this Loan Bill does not have to extend to borrowings that we get under the Canada Pension Plan. We will get $55 million this year, that is the amount allocated to us. Under the collections that the Canada Pension Plan will receive, that is the amount that can be loaned hack to us, $55 million, so that leaves a net amount of borrowing from the capital markets of $281 million.

Now again, as I mentioned, we already have authority to borrow for roll - overs and for sinking funds related to outstanding s~curities - MR. NEARY: Where did you get that from? DR. COLLINS: That is under previous acts. We do not have to renew that borrowing authority, and the Financial Administration Act permits us to do that. Those amounts, that is for redemptions and sinking funds, come to $168 million. So the new borrowings, exclusive of what we get under the Canada Pensions and what we need for roll-overs and so on, come down to be $113 million. Now, that is in Canadian funds.

We have put into this bill an additional $107 millil1n, c .. madian, bringing it up to $220 million and we have done that so that at the end of the year - we estimate from the information we have that it will be desirable, very likely, that we borrow additional funds next February for the following fiscal year. And so that extra amount of $107 million, Canadian, will pe .rrnit us to borrow an extra $75 million, U.S., next February. So it gives us that amount of flexibility.

Now it. may well be that we will not float an issue at that time because circumstances will change, but as we see it at the present time, it would not be in the best interest of the Province if we had no flexibility to pre-borrow a bit at the end of this fiscal year for the beginning of the next fiscal year when th e antici.pat inn is that interest rates ::17 ;( 7

.June 29, 1982 Tape 1800 JC - 2 DR . l'IJI,LfNS : will be higher . ~~ . Chairman, this is not the lurgcst amPunt that was borro\..,ed by the Province. The large st c.1mourt ill a Loan Bill - in 1975 there was a larger Loan Bill . MR. NBJI.RY : HO\v much ? -- --- Dl~ . COL.T.INS : In 1975 it l>'as $225 million . t-1R . NE/\RY : We are talking about $ 336 million here? IJ.R . COLLINS: No, that was in the Loan Bill . •rhe $336 million is not in the· Loan Bil l. MR. NEARY : $336 mill ion is the total borro wing Cor the Privince for thi~ year .

That is a record . lHL l'lll,l.l N!; : 'l'h.tl i :; not in l.h•• l.o..tn ll.i 11 . MH . NE.i\RY : No, but that is a record for this Province . DR . COJ.LINS : I do not think that it is, Mr . Ch.:tirman , I do not have that figure here with me - MR. NF.l\RY: Well, I am saying it is because it .i.s . DR . COLLINS : The amounts that we have pre - bor ::.·owed in the past - we have pre-borrov1ed in 1975 , for instance, q 7 ;. ·{

June 29, 1982 Tape No . 1801 MLe P-1 DR . J. COLLINS: and it was desirable to have that flexibility available in 1975 because it was really in the best interest of the Province . And that is the re ason why we have tt.::t extra amount in this time, that \.,re anticipate - in other words , we would be neglectful - MR. NEARY : DR . COLLINS: How much ar e we talking about? In the Loan Bill? MR. NEARY : For preborrowing . DR . COLLINS : Preborrowing? Ne are allowing ourselves a flexibility of $75 million U.S. MR . NEARY : That is scand alous, ilhsolutcly scandalous . DR .

COLLINS: '!'hat is an explanation r wi sh to give to the llouse to ensure that the Committe e and hon . member s understood why this particular size is there for the Lonn Uill . And if we did not, from the information that we have, allo \.r our ­ selves that flexibility, we would be neglectful and 1;1e would not be servin g the best interest oC the l're>vlnCl' . l-1R . CHAlRMAN(Aylward) : The hon. the Leader of the Opposition . MR. NEARY: Mr .

Chairman, either the hon. gentleman is naive or he thinks the Oppositi on and the people of this Province ur<! stupi d and n.1ive . 't'hc ac.:lnal f.1ct of t.ht• m.lltc>r ~ is, Mr . Chairman, that this Pro vince is borro win q at a record rate in this fiscal year . The Province is borro wing $.360 million. And the hon . gentleman can get up all he wants and say th at the Loa n Bill is not the lar ge st ever br ought into this Hou se, it is only $220 million, the second largest ever brouqht before the Lcqislature of this Province . 1; ; ••.•

.June 29, 1982 •rape 1801 MLep-2 t-m . :-ll·:J\RY: ·rhc fact of the matter is that the Province is borrowing $336 million, and that is an all time record for this Province . The Province is borrowing around $600 for (!v~ry man , woman and child living in this Province at the p't"escnt t.im e, $600 . '!'hey are increasing the public debt by $336 mHiion . Now, Mr . Chnlrman , the trighten ing part or the minister 's c~:plan.:~t ion is the fact. that there is $75 million included in Lhis ~mount for what he calls preborro wing .

In other words, what the mini.ster is sayi.m;, he is asking the House to qive him autqoritv now nt borrow $75 million for next year . l'lhy does not the hon . qcntlcman \.Jait until the House opens again? DIL COLl.lNS : When , in the Fall? . ---- ... ----- · MR. NJ•:/\J~Y: In the Pall <lr in the Spring , .Jncl nsk the IJouse tot• a bill, pass .:t bill to borr ·o\ .; for next year . Mr. 01airman, iL is unheard of . Not only is the minister asking the llousc to approve borrowing for this fiscal year , but he is also askiny us to approve borrowing for the next fiscal year , not even here Y<'t . ~ 7 n ')

June 29, 1982 Tape No. 1802 IB-1 MR. NEARY: And there is no guarantee, by the way, the minister gave us no assurance that this $75 million that he is talking about borrowing, preborrowing for the fiscal year 1983-1984, there is .. :1 guarantee that that money will not be spent in this fiscal year. The hon. gentleman should immediately deduct that amount from the $226 million. It is unnecessary. There is no need of having it in there. MR. MARSHALL : MR. NEARY: MR. MARSHALL: MR. NEARY: next year? MR. MARSHALL: more than $75 million. MR. NEARY: Seventy--five what? Seventy-five million dollars.

You have to have something there. For what? F'or prcborrowinq for You know we are going to borrow Mr. Chairman, the House should not give the minister approval to borrow one cent for the next fiscal year. We are dealing now with the current fiscal year. That is all we are concerned with. That is all the House should concern itself with, not cJiVC' the government, the administration , the authority to borrow $75 million for next year. Mr.

Chairman, this is a new financial policy that the administration has embarked on now. 'rhey may have done i t once be fore. r think the hon. gentleman indicated in 1975 they may have done it. I do not recall ever, ever approving a Loan Bill in this House that gave the government,any government previous to this administration, the authority to borrow money for another fiscal year, for a different fiscal year other than the one we are dealing with. Mr. Chairman, I am very concerned about this and I am sure that anybody who Foll ows the parliamentary process would be very concerned. I do not know if it is legal.

I am not sure if it is constitution~!. Mr. Chairman, I would like to get an opinion as to wheth er thls ~ 7:1 I

June 29, 1982 Tape No. 1802 IB-2 MR. NEARY: is constitutional,for the Minister of rinance (Dr . Collins) to ask for borrowing for two fisc<1J ycilrs . Haybc you could get away with it if you were making it retroactive, but the hon. gentleman is projecting himself into the next fiscal year. And I am not sure, Mr. Chairman, something tells me that that is not right, it is not leqal , it is unconstitutional. MR. CALI,AN : --- ---- the Budget last year . Mll .

Nt·:I\RY : Tell them what they did wit h uu t, <> f cou rsc, tho t is true us my hon . colleague to my left pointed out, after what they did last year,in the last fi scal year, spent taxpayer money without the authority of this House and then brought in a bill asking us to legalize an illegal act on the part or th~ administration ,. 1-lell,then ,after that, Mr . Chairman, I suppose you can expect anything from this administration . ~ 7 .J. . .,

June 29, 1982 Tape 1803 TM - 1 MR. NEARY: I am amazed, Mr. Chairman, I am amazed that the present Government House Leader (Mr. Marshall) who used to stand on this side of the Hou~e and criticize the Eormer, former administration for stripping the House of its authorities 1 for taking away from the House the right to make decisions on financial matters and moving them down to ·the eighth floor of the Confederation Building. The hon. gentleman was very concerned about that. But I have not heard a peep out of the hon. gentleman since he moved over Nith the other cro•,•d to form the Government of this Province. Mr.

Chairman, we are seeing all kinds of peculiar policies in connection with the running of the finances of this Province, emerging from this administration. They are finding all kinds of slick, sneaky, unorthodox ways to get around parliament, to get arounL1 the Legislature, to ignore the Legislature. It is unbelievable the contempt they have for the Legislature. Mr. Chairman, it is simply mind boggling. And unfortunately there is nothing we can do to stop them, they have a majority, they have a mandate, they have forty-four members.

And it seems to me that they interpret that mandate to do what they like with the finances of this Province, and with the Legislature :>f this land. And this preborrowing policy, Mr. Chairman, is wrong and it should be abandoned by the minister. I could stand here until doomsday and argue why these policies are wrong, but the minister wj 11 stand and poo!1 pooh the arguments as i r he was Cod, as i [ everybody else is wromJ and the minis t.cr is right.

The hon. gentleman thinks because they have forty-four members they can do what they like, they can ignore the legislature, they can remove the power of the purse and put it down on the eighth floor of Confederation :I 7 :; ·<

June 29, 1982 Tape 1803 TM - 2 MR. NEARY; Building and have the -- ·---- decisions made by bureaucrats. I would not mind if it was the cabinet that made the decisions, but it is a crowd of bureaucrats. Mr. Chairman, even with their forty- four members they still do not run the Province. :n :J

June 29, 1982 'l'ape No.l80tl JU\ - 1 MR. S. NEARY: Ministers still do not make their own decisions. "he decisions are made by the bureaucrats. They have a stranglehold on the administration. I cannot point to one minister at the present time who runs his own department, who can stand on his own feet, who is completely independ­ ent and say I will run my department,~1a we will run this Province and this government the