December

9, 1992

HOUSE OF ASSEMBLY PROCEEDINGS Vol.

XLI No. 81

The House met at 2:00 p.m.

MR. SPEAKER (Lush): Order, please!

Oral Questions

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

MR. SIMMS: Mr. Speaker, I have a question today for the

acting Minister of Health, since the minister is not here, I am not sure who it

is I presume it is the Minister of Education maybe, in any event I will ask the

question. If you look at the Budget documents both the ones presented in March

by the government and the mini-Budget, supplementary documents attached, you

will see that the net expenditure projected in March versus the net expenditure

projected now in the mini-Budget, that the Minister of Finance tabled last

Friday, indicates that the government expects to achieve net current account

savings of $6.5 million from the health care budget and that is only for the

balance of this year which is now less than four months, which would amount to

an annualized cut of in excess of $25 million. I would like to ask the acting

Minister of Health where on earth in the health care system does the government

expect to find such substantial savings in the next three-and-a-half months?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, the Minister of Health is

around the building somewhere and he will be in shortly and I have no doubt he

will provide the details. The Leader of the Opposition is quite correct, the

total amount spent on current account in this fiscal year will be less than we

budgeted last year. That is the level of the achievement that it took to address

this problem, so he is quite correct and there will be that reduction that he

talked about in the health care sector. The minister will be around shortly and

rather than give less than full information I will wait until the minister comes

and ask him to provide the details to the House.

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

MR. WINDSOR: Mr. Speaker, in the absence of the Minister

of Finance perhaps I could address the questions to the Premier. The minister's

recent financial statement makes great reference to a firm commitment on behalf

of the government to the strategic economic plan and indeed, the Premier I

believe had some meetings with the Prime Minister a week or so ago in which both

first minister's confirmed such strategies and the federal minister in fact

confirmed his commitment to the federal prosperity initiatives, I believe they

call it.

Now, Mr. Speaker, we saw the federal minister in his budget

come down with some measures to control spending without raising taxes that was

the general thrust that the federal minister put forward in his document. We saw

him in spite of that statement, put forward $500 million in capital

expenditures, major capital initiatives, part of which Newfoundland will benefit

from and some incentives for business, Mr. Speaker, which I think are even more

significant, investment tax credits, flow through shares to certain

corporations, ability to invest RRSP's into new housing, research and

development tax improvements, about $400 million worth in fact and significant

PIT reductions for this year. In contrast to that the provincial government has

drastically increased taxes and provided no incentives of any significance to

industry this year, how does the minister justify the two statements of

commitment to strategic economic development and yet complete reversal of

direction as it relates to stimulating industry and taxing the people?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: I thank the hon. member for lobbing that

nice gentle one at me, because it is fairly gentle. In fact, you see, he has

misrepresented the position or misunderstood, I do not know which. The Province

will be supporting the federal government to a fairly significant degree in the

federal government's tax measures because do not forget our own tax rate applies

after the taxable income is determined.

Now, some of the measures that the federal minister announced

affects the determination of taxable income, so the same reduction of federal

income tax that is achieved is also proportionately achieved by provincial

income tax, I am sure the member understands that, and to the extent that the

federal measures apply before determination of taxable income, then the

provincial tax also makes a contribution.

Secondly, the Province, Mr. Speaker, did reduce corporate

income tax from 17 per cent to 16 per cent. We did reduce manufacturing and

processing tax, effective January 1, 1993. We did reduce manufacturing and

processing income tax from 17 per cent to 7.5 per cent; we did cut the small

business tax from 10 per cent to 5 per cent; we did provide that new jobs

created by new businesses or additional jobs added to existing businesses during

1993 would not be subject to the payroll tax and the standard that we are

applying is the same businesses that would be entitled to the federal ministers

reduction in unemployment insurance premiums, would also be entitled to

exemption from payroll tax charges during 1993, so the hon. member, with great

respect to him is not accurate when he says: the two are different, going in

opposite directions. They are going in precisely the same directions as far as

stimulus to businesses is concerned.

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

MR. WINDSOR: Well, Mr. Speaker, the hon. Premier, with

great respect to him is not accurate in his statements either I would suggest

quite seriously, when he says that government has reduced certain taxes on

corporations. All that government has done is, undo the tax increases that they

have instituted since they became the government and put us back, in the case of

the corporation tax, equivalent to Nova Scotia, finally, to be competitive, Mr.

Speaker. The minimal benefits in payroll tax to new companies: first of all, how

many new companies do we expect to start business this year, that will have a

payroll greater than $100,000? Very few, so there will be no benefit there. How

many companies will be increasing employment this year? Very few. In fact, they

have laid off people because of the impact the payroll tax has had in the past.

So there will be no benefit from increased employment because they do not have

the money to increase employment, Mr. Speaker.

There is indeed a great difference. Let me ask the Premier

this: how does he justify this great thrust forward with the Strategic Economic

Plan when his own budget for the Department of Industry and Technology - or

whatever it's called this year -

MS. VERGE: ITT.

MR. WINDSOR: Development! It's still Development in my

mind. The Department of Industry and Technology this year has been cut, the

current account, by $3.4 million for the balance of the year. Realising that

there's only one-third of the year left, that amounts to something like $12

million on an annualized basis, or 33 per cent of the budget that was left for

the rest of the year. Does that represent a commitment to a strategic economic

plan?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, I'll answer the first

question that he raised that was really in the form of a statement to correct

him and say he's dead wrong. The tax was reduced from 17 per cent to 7.5 per

cent on manufacturing and processing. Now when did the former government ever

have 7.5 per cent corporate tax on the manufacturing and processing sector?

When? Anybody know? Never.

The small business tax was cut from 10 per cent to 5 per

cent.

MR. SIMMS: Like we've been asking you to do for two

years.

PREMIER WELLS: They read it in the Strategic Economic

Plan and ran out and proclaimed it to all the world! The only difference is, Mr.

Speaker, they were plagiarists. They wouldn't admit the original authors were

over here. They plagiarized it out of the Strategic Economic Plan.

Now, have no doubt either that the federal Minister of

Finance decreased the tax that he originally increased at one time too. So

there's no difference. We're operating in the same direction with the same

objective at the same time. So there is no difference.

The other question that he asked was how does the Minister of

Industry, Trade and Technology expect to be able to perform adequately with this

reduction in the budget? Now I'll let the minister answer that part of the

question. He's here, he's more able to do it than I am.

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

Technology.

MR. FUREY: Mr. Speaker, like all other departments we

took a 1 per cent reduction in our salary budget and a 3 per cent reduction on

operations. We also went back inside our department - not just our department -

I can tell the hon. House that we also went inside Enterprise Newfoundland,

inside the Economic Recovery Commission, and every agency that reports -

MS. VERGE: (Inaudible) when you got inside there?

MR. FUREY: I beg your pardon?

MS. VERGE: Did you get a fright when you got inside

Enterprise Newfoundland?

MR. FUREY: Mr. Speaker, as I was saying, we did

everything that was necessary to trim the budgets and bring them in line with

the requests of the Minister of Finance to deal with this very serious problem.

In fact, we went back and had a second cut at it, Mr. Speaker. Because, in

reality, nobody likes to cut budgets, but when you are faced with these very

difficult problems you have to deal with that which is before you. We went

inside and found further savings by restricting consultants, by restricting

dollars that we would pay out, for example, for advertising. There was $30,000

left in the budget to promote enterprise in the newspapers of our Province and

we withdrew that, as an example. We tried to do it in areas that would have the

least effect on businesses, Mr. Speaker, and I think we have been very

successful.

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

MR. WINDSOR: Mr. Speaker, I will first of all deal with

the Premier's statement as it relates to corporate taxes. The minister yesterday

told us that the net impact would be a $10 million decrease in taxes to

corporations, at the same time that there is a $100 million increase in other

taxes throughout the Province, so that is no way to stimulate the economy. Let

me ask the Minister of Industry, Trade and Technology if reducing his capital

budget by $5.6 million for the balance of this fiscal year - which is a 56 per

cent decrease on an annualized basis - is his concept of how Enterprise

Newfoundland and the Economic Recovery Commission are supposed to be helping

private enterprise?

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

Technology.

MR. FUREY: I think the hon. member is engaging in

selective amnesia. If he were being honest with himself in the House he would

also look at the record of this government with respect to federal/provincial

agreements, and we have been very successful in that regard. He doesn't rise in

his place and talk about the Strategic Industrial and Investment Development

Agreement, a $30-million agreement into which this government puts 30 per cent

for the next four years to stimulate large corporate investment, to track down

companies from around the country and around the world to come and invest here.

AN HON. MEMBER: (Inaudible).

MR. FUREY: Well, it is $30 million and the hon. member

decides to ignore it. He doesn't talk about the good track record of the $29

million Rural Development Agreement that this government signed, or the $8

million ACOA Enterprise network which links every single small businessman

irrespective of geography in this Province on the electronic highway that this

government put in place, Mr. Speaker. He doesn't talk about the new Tourism

agreement which has $21 million to flow over the next four years. So, Mr.

Speaker, do not engage in selective amnesia, talk about the full record.

AN HON. MEMBER: (Inaudible).

MR. FUREY: Yes, we are going through tough times, yes, we

are trimming our budgets, yes, we are cutting back, and yes, we are trying to

del with a very difficult problem. But, Mr. Speaker, you cannot have it both

ways, you cannot be schizophrenic on this. You cannot say you have to deal with

this major deficit problem with the left hand and then with the right hand say

everything that you have done is foolishness and stupid. Of course, there are

tough decisions, of course, it was painful, of course, it was difficult, but as

the Premier rightly points out, we aimed this Budget directly at small

businesses to give them breaks, right across the Province.

SOME HON. MEMBERS: Hear, hear!

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

MR. SIMMS: Mr. Speaker, I held off on my line of

questioning because I assumed the Premier said the Minister of Health was coming

- but there is no sign of him, half of Question Period is gone, and I am not

sure if he would know the answers to these questions. That is why I asked the

Acting Minister of Health, who I assume is the Minister of Education. I do not

know who the Acting Minister of Health is, but I want to pursue some questions

along the lines of health care cuts.

Can the acting minister confirm that some hospitals have

already told the minister's department, in response to the requests that went

out from the government several weeks ago, that they will, indeed, have to take

some drastic measures to save the amount of money that the government has asked

for, because they have already spent more than three-quarters of their budgets?

Can he confirm to this House that a number of these hospitals

have, in fact, told the government that some of the things they would have to do

in order to reach these serious cuts would be things like reducing outpatient

clinics, closing operating rooms for periods of time, performing only emergency

surgery, and not replacing hospital workers who are off on sick leave and annual

leave? Are those the kinds of things that the minister's department has been

told?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, I have checked. The Minister

of Health will be here in the House at 4:00 p.m. He is unavailable until 4:00

p.m.

I will ask the Minister of Health to provide full detail

tomorrow of where the expenditure cuts are expected to be achieved. I can say to

him generally that I know that during Christmas and sometimes in the summer,

there is a slowdown in activity. If you extend that two days at the beginning

and two days at the end, you add a week of slowdown to that period and that will

also effect some savings.

I am not aware, personally, of any of the kinds of

suggestions that the hon. member is now making. The Minister of Health will be

able to provide the detail when he arrives at 4:00 p.m.

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

MR. SIMMS: A supplementary, Mr. Speaker.

I take the Premier's word that he will instruct the Minister

of Health to provide the House with some information tomorrow as to where they

expect to find these savings.

While he is at it, would he also tell us, or can he confirm

for us, or at least, provide the information to us, that hospitals and nursing

homes have been told that the cuts to their budget this year will continue over

into the 1993-94 fiscal year? I believe that is the fact the Minister of Finance

has already referred to.

We want to know: Does that mean that the cut in the health

care budgets for 1993 would be the annualized amount that I suggested earlier in

my initial question, you know, comparable to what is required for the balance of

this year, the annualized expenditure would be somewhere in the area of $25

million, or in excess thereof? Will he be able to confirm for us tomorrow that

is what they are looking at, as well, for next year?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: The Minister of Health will be able to

advise the House specifically on those points. I can say to him from my own

knowledge that generally, in terms of all of the areas where there was

expenditure restraint, some of them were one-time expenditures, but others will,

indeed, carry on into next year and will, in effect, be multiplied by a factor

of four. That is quite correct. But some of them, of the total amount of $55

million that were expenditure cuts from the total $75 million we addressed,

there was $11 million in tax and another $9 million or so in other one-time

revenues. The $11 million in tax will have a multiple and will multiply up to

$44 million or $45 million. Some, but not all, of the $55 million in expenditure

cuts will also continue on into next year, but some are one-time expenditure

cuts.

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

MR. SIMMS: Mr. Speaker, just one final supplementary, to

which the Premier may or may not know the answer. If he doesn't, I hope he will

ask the Minister of Health to provide the information to the House.

In addition to the 3 per cent in operating grants and the 1

per cent savings in salaries that agencies, and hospitals in this case that I am

talking about, have been asked to save, can the Premier confirm that the

government now has also asked to take $1.5 million from the capital budget of

the Department of Health in the remaining three-and-a-half months or so? That is

a pretty hefty amount of money to be taken, in the remaining three months of the

fiscal year, from capital.

Specifically, we would like to know, first, if he can confirm

it; secondly, does that mean, if it is true, that construction could be delayed

on some health care projects that are already under way around the Province; and

thirdly, would it have any effect on design work and planning, announced back in

October by the Minister of Finance, to clinics and extensions and new hospitals?

Would it have any effect on any of that, if, in fact, it is true?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, I can get the specifics, but

I can also say that due partly to efforts to restraint expenditures this year

and so reduce our overall borrowing requirements, the capital expenditure will

be down by, I think, about $25 million. Now, it may well be that there is $1.5

million of that that is in health. I don't think any specific portion of it came

about as a result of what we have done in the last three or four weeks. I think

that may have been there anyway, but I will get the minister to confirm that.

My best recollection is that there was no restraint applied

to the planning that is being done for the additional hospital facilities that

the minister announced some weeks ago, that that is continuing. I don't expect

it will have any direct impact on the capital expenditures for medical

facilities that was planned for next year, but again I will ask the minister to

provide full details.

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

Extern.

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

the Premier.

Three-and-a-half years ago the Premier established the ERC -

the Economic Recovery Commission. Today our economy is in a desperate state and

this commission has served no useful purpose. Would the Premier abolish the

costly ERC?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: If the premises were correct I would

certainly consider it, but we announced the establishment of the ERC to do some

thinking and planning, and planning the orderly development of our economy, and

develop initiatives for economic development in a planned and organized and

orderly basis instead of the helter-skelter, ad hoc basis of the former

administration, because that had proven to be an absolute disaster. So we wanted

to do things on a planned and orderly basis.

Now, Mr. Speaker, members can go back and look at my

statements in the House and they will see warnings: Do not expect it to produce

results tomorrow. It takes time. It take effort. The first period will be

planning and organizing.

Now this costly and expensive organization has four

commissioners; we should have five - there are four, and it has twelve direct

employees. It is doing a good deal of excellent work in planning and organizing,

developing initiatives and so on.

As a matter of fact I just recently read a speech that was

delivered by the chairman of the commission to, I believe, the St. John's Board

of Trade. I will get it. Maybe we should have it published. Maybe we should go

through a bit of expense to have it published, because it is a first-rate

explanation of what the commission is doing and its real value, particularly

from a point of view of changing from running around like a chicken with your

head cut off, to operating in an orderly, planned, and organized way. That is

the difference in the approach, and that comes from the Economic Recovery

Commission.

The major thing they are doing for us right now is an

assessment of an income support program on a long-term basis, and working with

the federal government on that. I am looking forward to that report probably

around March some time I hope.

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

Extern on a supplementary.

MR. PARSONS: Mr. Speaker, the Premier asked for time for

those people to do their work. Certainly three-and-a-half years is a lengthy

period of time as far as Newfoundlanders and Labradorians are concerned.

I want to ask the Premier: Will he confirm that the Economic

Recovery Commission cost the taxpayers of this Province $2,542,672 last year?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: I will get the precise figures, and I

suggest to the hon. member that the figure is probably getting pretty close to

about correct. It is probably about $500,000 less than the original budget that

we had projected, because we operated on a cautious and a controlled way; but I

will get that figure and confirm it to the House.

I think I will also get the chairman's speech published. The

minister has probably read it, too. It gives a pretty good explanation and the

people of the Province should know it and should hear it.

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

Extern.

MR. PARSONS: Mr. Speaker, I think that Dr. House wrote

some sort of a statement about six years ago, but it certainly has no

implications today when we see the situation this Province is in.

I want to ask the Premier: Does he really believe that this

money is wasted, when health and education are being cut, income tax going up in

leaps and bounds, and what they were supposed to cure - unemployment - is now at

22 per cent? Does the Premier think that this money could be better spent and

for better use for the people of Newfoundland and Labrador?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, we are losing $49 million in

equalization this year. Why? Because the impact of the recession on the economy

of this Province has been less severe proportionately than the impact on Ontario

and Alberta. Now that is true. The figures are there.

In 1991 of the total employment lost in the country, 63 per

cent was in Ontario. Those aren't my figures, they're Statistics Canada figures.

Of the total employment lost in the country in 1991, 1.5 per cent was

Newfoundland, and we had 1.7 per cent of the work force.

Now I don't know specifically -

SOME HON. MEMBERS: (Inaudible)!

PREMIER WELLS: You can tell when the truth starts to cut

them. They make all this great noise to prevent it from coming out. I don't

know, Mr. Speaker, specifically, how much of that is attributable to the efforts

of the Economic Recovery Commission. I don't know how much. It's impossible for

anybody to say. But certainly they didn't cause it any harm. Mr. Speaker, it's

probable they also had a significant and valuable contribution. But I'll let the

report and the speech speak for itself. They have made a valuable contribution.

It was never expected that they would head off the national economic recession

in Newfoundland and Labrador. They were not designed to do that. They weren't

expected to do it. It's wrong to present it as such.

MS. VERGE: (Inaudible)?

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

John's East Extern.

MR. PARSONS: Final supplementary, Mr. Speaker. If the

Premier can see what this Commission has done then he has the best vision in

this Province.

MS. VERGE: The emperor has no clothes.

MR. PARSONS: Mr. Speaker, I want to ask the Premier also:

will he confirm that Enterprise Newfoundland and Labrador, ENL, could do most of

what the Economic Recovery Commission was supposed to do? If so, I ask the

Premier again - because of what it is costing Newfoundland and Labrador - to

rise to his feet and say: yes, he will abolish this monstrosity.

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, that's one of the great

achievements of the Economic Recovery Commission, the creation and resuscitation

of ENL. Which was the old moribund NLDC.

SOME HON. MEMBERS: (Inaudible)!

PREMIER WELLS: The Newfoundland and Labrador Development

Corporation. That was moribund, achieving nothing, wasting vast sums of money.

The primary task we gave the ERC was to resuscitate it and give it some life,

and give it some focus, and ensure that it could do the job properly for the

people of this Province. Ensure that it simply wasn't a group looking at one

another in an office in St. John's. To ensure that it was distributed around the

Province, bringing financial help and advice to the people of this Province

where it was needed. That's what the ERC achieved with ENL. It's now a proper

and properly functioning agency achieving its objective instead of a moribund

group wasting money sitting in St. John's.

SOME HON. MEMBERS: Hear, hear!

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

MR. HARRIS: Thank you, Mr. Speaker. My question is for

the Premier and concerns the hearings on the North American Free Trade

Agreement, which has been called the economic constitution of Canada. The House

of Commons committee just ended the scheduled hearings in Quebec City, hearings

in five cities excluding Newfoundland and four other provinces. I want to ask

the Premier what efforts his government has made to attempt to have the people

of Newfoundland and Labrador have their say and have hearings come into

Newfoundland to discuss this very important free trade agreement? What efforts

did this government make? I know the Liberals and the Conservatives in the House

of Commons refused to allow extended hearings across the country. I wonder what

efforts his government made to make sure that all Newfoundlanders and

Labradorians had an opportunity to have a say on this very important document

and agreement.

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: If the hon. member describes NAFTA as the

economic constitution of Canada, he's got a funny concept of the economic

constitution of Canada. It's a trade arrangement between three countries -

Canada, the United States and Mexico. It deals with the running of trade and the

international relationship between those countries in the conduct of trade, and

is in no measure the economic constitution of the country.

I know what his particular political party thinks of NAFTA. I

know what they thought of the free trade agreement. I know what they think of

free trade generally. But, Mr. Speaker, while I'm no fan of the US/Canada free

trade agreement as it has been put in place, I basically support the concept of

free trade. We will all benefit by the concept of freer trade and by

implementing freer trade, but that particular free trade agreement that was

entered into with the United States is very unfair in terms of the extent to

which the United States retained its ability to impose duties and tariffs to

protect their own industry against Canada.

Now, Mr. Speaker, having entered into that agreement with the

United States, and the United States having started discussions with Mexico to

enter into a free trade agreement with Mexico, I say to you, Canada has no

alternative but to do one of two things, either terminate the US Free Trade

Agreement immediately or, participate with the United States in the North

American Free Trade Agreement, otherwise it is going to do immense harm to

Newfoundland and Labrador and, Mr. Speaker, I can only say to you that, in the

circumstances where we are party to the US/Canada Free Trade Agreement, we have

no alternative but to join with the US in working out this free trade agreement

with the United States. It is essential otherwise we will really be left out in

the cold.

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

a supplementary.

MR. HARRIS: Thank you, Mr. Speaker.

The Premier knows that the NDP along with other parties agree

with freer trade but that it ought to be managed. Now, Mr. Speaker, the Premier

says it has nothing to do with the economic constitution of Canada or the

Constitution in general, but he knows that the free trade agreement with both

the Americans and NAFTA, will place restrictions on the ability of governments

in Canada, including this government, to take actions to protect its own

citizens, so in that respect it is, as the Premier says, capable of causing

immense harm to the ability of this government to carry out its responsibilities

to its citizens. So I ask him once again, why is he and his government not

taking the same position with respect to the citizens' of this Provinces right

to participate in, to know fully the consequences of and to have access to this

agreement and to be able to make comments on it just as it did or he did and the

government did on the Constitution of Canada and the amendments thereto? Why is

he standing to one side and allowing our economic future to be dictated by

somebody else making the agreements with the Americans and the Mexicans?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, my quarrel was with the hon.

member's description of it as: 'the economic constitution'; it is not the

economic constitution, it has a significant impact so let us not treat it as

though we are dealing with the Constitution of the country and put it in the

same classification. That is a misrepresentation.

Now, Mr. Speaker, the Minister of Industry, Trade and

Technology, has been a participant in all of the discussions and has been fully

briefed on the process. Mr. Speaker, if there are people in the Province, and we

have not received a request from one single group in the Province who wants to

make representation or wants the committee to come to Newfoundland, if there are

significant numbers of groups or people in the Province who want the committee

to come, I will certainly take steps to do it. Rather than put the national

government through the expense of bringing the whole committee down here to hear

the minister, we sent the minister to make direct representations.

MR. SPEAKER: Order, please!

The Chair was about to remind the Premier that Question

Period had expired. The Chair was a little bit close to the time when it allowed

the Member for St. John's East to ask his question, his question was rather

lengthy, so I had to give the Premier a little extra time in answering, but we

have gone over the time today.

Petitions?

Orders of the Day?

MR. SMALL: Mr. Speaker.

MR. SPEAKER: I am sorry! If you will allow the Chair to

go back to Petitions. The Chair had called Petitions, but went on to Orders of

the Day. Back to Petitions.

Petitions

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

Bay.

MR. SMALL: Mr. Speaker, I rise today to present a

petition on behalf of the people of Great Harbour Deep. This petition is not

addressed to the House of Assembly, it is addressed to the Government of

Newfoundland and Labrador. I ask leave to present this.

MR. SPEAKER: Order, please!

I ask the hon. member to take his place, please.

Again, the Chair will not be accepting petitions that are not

done in the proper fashion. But, as always, if the House allows the hon. member

- I have not seen the petition but, as to whether I will accept one the hon.

members says is not in its proper form, in that instance the Chair says no.

MR. ROBERTS: Mr. Speaker, for those of us on this side,

all I can say is I have seen the petition. It is not a letter, which is the

objection. I hear what Your Honour says, but I think my view is well known that

what we need to do is to regularize what has become a very irregular procedure.

Given the way we have been giving leave to everybody else, I certainly suggest

we should hear the hon. gentleman on this petition.

MR. R. AYLWARD: Not everybody.

MR. ROBERTS: I have been prepared to give leave to

anybody who has extended me the courtesy, as the hon. gentleman from Baie Verte

- White Bay has done, of showing me the petition. The hon. member for Kilbride

didn't show me the courtesy anymore than he doesn't show the courtesy of letting

me speak -

MR. R. AYLWARD: (Inaudible) a $10,000 cheque.

MR. SPEAKER: Order, please!

MR. ROBERTS: - anymore than he doesn't show the courtesy

of letting me speak without interrupting me rudely.

Now, Mr. Speaker, for those of us on this side, we would be

more than willing to give leave to allow the hon. gentleman to present the

petition.

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

MR. HARRIS: Mr. Speaker, I have been one who has been

denied leave on a number of occasions in the House, but on this particular

occasion I would like to give leave to the people of Harbour Deep to have their

petition presented by the member for Baie Verte - White Bay.

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

MR. MATTHEWS: Thank you, Mr. Speaker.

We have no problem, either, giving leave to the hon. member.

We haven't seen a copy of what he has, but we are not going to be that sticky,

that I am going to insist, as Opposition House Leader, that I see what hon.

gentlemen have before I give leave for them to give petitions. I mean, I am not

as sanctimonious as that.

SOME HON. MEMBERS: Hear, hear!

MR. MATTHEWS: I don't want to see it.

Mr. Speaker, that brings me to make another point, there was

a rules committee, I think chaired by the Minister of Culture and Tourism, and

there are new rules waiting to be implemented for the running of this

Legislature. My understanding is that petitions are covered in that.

MR. SIMMS: Yes, I think they were.

MR. MATTHEWS: So, why don't we get on with implementing

the new rules, Mr. Speaker, as the former Government House Leader talked about

doing? Why don't we implement that? We struck a committee that went about the

country and did work, and they have been sitting on these new rules now for

months. Why don't we implement them? But we give leave to the member to present

his petition.

MR. SPEAKER: Order, please!

As all hon. members know, the Chair operates under the

present rules and the Chair is just telling hon. members that we have a

procedure for presenting petitions, and the Chair's responsibility is to follow

the position. If hon. members say it is fine, well then the Chair has no choice

naturally.

By agreement, the hon. the member for Baie Verte - White Bay.

MR. SMALL: Mr. Speaker, I have had this petition for a

few days now, and I have shown it to the Liberal House Leader.

AN HON. MEMBER: The Liberal House Leader?

MS. VERGE: He is not very liberal. That is the problem.

MR. SMALL: It is very interesting that this is going to

cause a controversy today at a time when the people from Harbour Deep, I guess,

were nailing me for not addressing their concerns.

So the prayer of our petition says: We, the undersigned,

petition the Government of Newfoundland and Labrador to construct a road

connection between Great Harbour Deep and the Province's road system. We think

that the construction of this road would be beneficial to the people of Great

Harbour Deep for the following reasons:

Now, there are a whole list of reasons. I would like to just

start by saying that, I guess, ever since Newfoundland joined Confederation, the

people of Great Harbour Deep have been asking for a road connection and I am

sure every representative that they have had in the House of Assembly have

promised that they would build a road for the people of Harbour Deep. Last Fall

during the election, I promised that I would do my upmost to see if we could get

a road for Great Harbour Deep. I would like to go on and talk about some of the

reasons why they think they should have a road. Harbour Deep borders a large

area of black spruce timber which has not been harvested for years and years.

When we see black spruce timber being brought over from Prince Edward Island to

Stephenville I think they have a good case.

Better access to employment available within their community:

People of Harbour Deep have been hit double fold over this last year. They lost

their salmon fishery and right on the heels of that there was a moratorium put

on our codfishery and that is the only two ways the people of Harbour Deep have

to earn a dollar and I guess they are the only community all along the northeast

coast of Newfoundland that is isolated.

Another thing, they need better access to high schools for

their children. There is no high school in Great Harbour Deep and they have to

scatter out all along the northeast coast, some of the kids go down to Englee,

some up to Jackson's Arm to live with their relatives and because they are

getting a very small bursary to look after them, this is why they think they

should have a highway so their kids can visit home every now and then.

Local and regional tourism: Harbour Deep has a scheduled

salmon river, it runs right out into the community and I think if there was a

road there, it would mean that more tourism would be going on in Harbour Deep.

Most of all, I guess, their service with a ferry from Jackson's Arm, which costs

the federal government a considerable amount of money and it also costs our

Newfoundland government a considerable amount of money Winter time because there

is an air service that goes into Harbour Deep and it is subsidised, so this

would be another means of saving money.

Also, there is a food airlift subsidiary to Great Harbour

Deep. I am sure there is a great cost involved in that but in this day I do not

think we should have a group of people that are isolated. I think there should

be a road built to Harbour Deep, it would increase the employment for the people

and have access to a vast area. It is going to cost a lot of money to build a

road to Harbour Deep. It can either connect with the hydro project in Cat Arm,

it could go across the country to Hawkes Bay or it could go to Englee. I guess

that is something that is going to have to be looked at, so I ask this House of

Assembly today to give full support to the people of Great Harbour Deep, thank

you.

SOME HON. MEMBERS: Hear, hear!

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

MR. WOODFORD: Mr. Speaker, I would like to take a few

minutes to respond to the hon. Member for Baie Verte - White Bay on his petition

concerning the people of Great Harbour Deep in their quest to try to get a road

to their community. This is not something new as I think the member stated in

his comments to the petition. It is not something new, it has been ongoing now

for some number of years. In fact between 1985 and 1989, I had some

correspondence, and some meetings, two meetings in particular personally with, I

think it was with the White Bay South Development Committee in Pollards Point.

They held an economic conference in Sops Arm - Pollards Point in 1986 and that

subject was brought up. At that time if I am not mistaken I think a figure of

something like $14.5 million was mentioned as the cost to put in the road. They

were talking about the Cat Arm road, a point on the Cat Arm road and Great

Harbour Deep.

At that time I had to be honest with the people of Harbour

Deep and the representative there at that particular time in saying that the

road from the Trans-Canada to Jackson's Arm was not done at that time. It was

almost, I suppose, inaccessible, really because it was a very poor dirt road. I

was honest and above board with them and told them at that time that unless some

federal funding could be found I could not justify having anything to do with

that access. In those three or four years the road between the Trans-Canada and

Jackson's Arm was completed, fully upgraded and paved, and now the people in

that area are fairly well serviced no doubt. This has come to light again in the

last little while. The member mentioned the fact that it would open up vast

timber stands. It is true, it will open up vast timber stands. You cannot just

say timber stands, Mr. Speaker, but timber stands that paper companies in the

Province today are looking for. They are look for Black Spruce, they are looking

for Spruce. That is where the fibre is that especially the mills in Stephenville

and Grand Falls need in order to put out the top quality paper they are putting

out today. That is one reason why the road should be opened up sometime in the

near future. The other is to give people access, whether they go north or

whether they come south to Jackson's Arm, or wherever, it will give them access,

and the monies that would be spent on the ferry, I just forget what it is a year

now, the monies that are spent on the ferry system there could be put towards

the road. Now, that is an ongoing expense, it is an expense to the people there

to have stuff brought down by ferry from Jackson's Arm to Harbour Deep.

Tourism is another big factor, and that is being taken

advantage of now by several people, especially with cabins and operating skidoos

on what they call adventure tourism in that particular area. That is being taken

advantage of now, especially the skidoo and adventure part of it. The hydro

sites on Cat Arm, there are two or three other developments there now that would

dictate, I suppose, a better economic situation for the particular area. I would

sort of go along with the hon. gentleman for Baie Verte - White Bay and try to

help out in some way to have funds made available, especially for a feasibility

study. I think there should be a feasibility study done without delay on what

that would mean to the people of Harbour Deep and the whole White Bay area in

general with regards to the economic nature of that particular project.

Mr. Speaker, without anything further to say I support the

member in his request for that funding, whether it is provincial or federal.

Thank you.

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

MR. ROBERTS: Mr. Speaker, may I say just a few word in

support of the petition which my friend presented so eloquently. I know the

member wants to speak but I used to represent Harbour Deep many years ago and I

have this deep affectionate link for it.

SOME HON. MEMBERS: Hear, hear!

MR. ROBERTS: Many years ago when I was even younger than

the hon. the Leader of the Opposition, Mr. Speaker, I represented Harbour Deep.

They are great people.

AN HON. MEMBER: (Inaudible)

MR. ROBERTS: He does not represent them now either. Well,

then all you have to do is give him leave and we will let him.

SOME HON. MEMBERS: Oh, oh!

MR. ROBERTS: Mr. Speaker, if I may, having been

recognized, I would like the courtesy that I propose shortly to extend even to

the gentleman for Mount Pearl, to allow him to speak in silence, to misquote the

old saying.

Mr. Speaker, what I wanted to say was that I would like to

support this petition. I do not know whether the government can do it or not. My

colleague will address that.

SOME HON. MEMBERS: Oh, oh!

MR. ROBERTS: Mr. Speaker, as far as I know the rules of

the House allow any member who is recognized to speak. The hon. lady for Humber

East I know knows nothing of the rules but must she prove it time and time again

here in the House? The rules allow anybody who is recognized by the Chair to

speak. All I want to do is say a few words in support of the petition which my

friend presented so very well. I hope the prayer can be granted. The people in

Harbour Deep are great people. Many of them were friends of mine for years and

are friends now. They did me the kindness to vote for me twice overwhelmingly,

and they voted for my friend who now sits for Twillingate overwhelmingly. I want

the message to go out to the people of Harbour Deep that if there is any group

of men and women in this Province today who will do what they can for them, it

is this government now.

So I stand simply to say I support the petition, and do it

with a heart and a half, Mr. Speaker.

SOME HON. MEMBERS: (Inaudible).

MR. SPEAKER: Order, please!

The hon. member is not entitled to speak other than....

SOME HON. MEMBERS: (Inaudible)!

AN HON. MEMBER: By leave?

AN HON. MEMBER: No leave!

MR. SPEAKER: Pardon?

AN HON. MEMBER: (Inaudible).

MR. SPEAKER: Point of order?

The hon. the Minister of Works, Services and Transportation

on a point of order.

MR. GOVER: Mr. Speaker, I'd like to request leave of the

House to speak to the petition.

AN HON. MEMBER: No leave!

MR. SPEAKER: No leave.

MS. VERGE: Point of order, Mr. Speaker.

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

point of order.

MS. VERGE: Thank you, Mr. Speaker. Perhaps you could

advise the Government House Leader that this House operates under Beauchesne's

rules, not Roberts' rules.

SOME HON. MEMBERS: Hear, hear!

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

point of order.

MR. ROBERTS: Mr. Speaker, to that point of order. If the

hon. lady could take the trouble to read our rules she will find Standing Order

1, that our rules prevail in this House, not Beauchesne, and above all, we're

not on the verge of disaster, which is where she'd have us.

MR. SPEAKER: Order, please!

I'd just point out to hon. members for further clarification

our Standing Orders with respect to petitions, page 31, Clause 92.1 says: "In

addition to the member presenting a petition only two other members, one each

from both sides of the House, may speak to a petition...." So it doesn't say

what positions they hold, it just specifically says the numbers of people.

That's what happened today.

MR. ROBERTS: Now, Mr. Speaker, Order 11, if you're going

to call Orders of the Day. Motion 11, I'm sorry. The hon. gentleman for Mount

Pearl, who will be heard I would hope with all the courtesy he doesn't extend to

us.

Orders of the Day

Private Members' Day

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

MR. WINDSOR: Mr. Speaker, you may rest assured I will be

heard and I don't need the Government House Leader's permission to do so.

MR. ROBERTS: I know you'll be heard, if only you would

say something.

MR. WINDSOR: Mr. Speaker, the resolution before us today

is a very general resolution....

SOME HON. MEMBERS: (Inaudible).

MR. SPEAKER: Order, please!

The hon. the Member for Mount Pearl.

MR. WINDSOR: It's a very general resolution, Mr. Speaker,

dealing with the failure of this government to stimulate the economy, the

negative impact that the policies of this government has had on the economy of

this Province - particularly on unemployment in this Province - and the ability

of private enterprise to work effectively within the economy of this Province.

It further states that the government has placed a tax burden

on individuals and businesses which has been harmful to the economy; has failed

to execute effective policies to stimulate the economy and decrease

unemployment; and therefore resolves that in an attempt to stimulate the economy

and create jobs government immediately take steps to reduce the level of

taxation in the Province.

That's a very general and very broad statement, and a very

broad resolution. I think it necessitates some debate as to the merits of them.

It's made in the light and in full knowledge of the financial problems facing

this particular Province and all of Canada at this point in time, and the

negative impact that the recession has had on the economy of Newfoundland and

Labrador in particular, and in Canada in general.

It's not meant to be an irresponsible statement, a motherhood

statement as often is quoted, of simply saying: let's reduce taxes. I don't

think there's anybody in this hon. House who would vote against a resolution

that says we should reduce taxes. Nevertheless I don't expect hon. gentleman

opposite to support this resolution, for obvious reasons. Because the government

policy has been stated clearly in the Budget and in the infamous mini-Budget

that was presented here last Friday.

Why would we make such a suggestion therefore? Recognising

the financial problems with which the government is faced, we don't do it

lightly. We do it in all seriousness. We have said many times in this House to

this government that the way to stimulate the economy is through the private

sector. Indeed the Premier, in his own words, was quoted in a recent newspaper

article as stating that he would have to call on the private sector to help

stimulate the economy. We would support that concept. That is exactly how we

will, if we will at all, recover from the situation with which we're faced.

How do we propose to recover? How do we expect private

enterprise to stimulate the economy if we put on them such a tax burden that

they can't possibly hope to compete in what now is becoming a much more

interprovincial economy? Just yesterday, I believe it was, the Minister of

Industry, Trade and Technology and the Premier were at meetings dealing with

further reductions of interprovincial trade barriers, as a means of reducing

some of the prohibitions in Canada of trying to do business in other parts of

Canada. And there is good and bad in that, we support it cautiously, but there

can be a lot of good that takes place with it. But, Mr. Speaker, it can never

work for Newfoundland as long as we have the disadvantages that we have in this

Province. Hon. members will have heard me several times before talk about the

natural, the inherent disadvantages that we have and I will deal with some of

those.

But what I am concerned about today in this resolution, are

the disadvantages that are placed on business by government. When you look at a

comparison of taxes in this Province and our competitors - and let us first of

all say, where are the competitors for Newfoundland and Labrador businesses? The

big competitors in many areas - depending on the type of business, the big

competition would obviously have to be the Atlantic Provinces, Nova Scotia, New

Brunswick and Prince Edward Island. Well, let us have a look at the tax rates,

Mr. Speaker.

The general corporate tax rate, this government has just now

reduced the rate in Newfoundland from 17 per cent back to the 16 per cent, the

level that it was in 1989 when they took office. Immediately in 1989, they

increase by 1 per cent. They have now finally seen the error of that and reduced

it back to 16 per cent. Prince Edward Island is still at 15 per cent, Nova

Scotia is at 16 per cent and New Brunswick is up at 17 per cent. So New

Brunswick now is slightly higher, but it shows the disadvantage that we have had

as it relates to Nova Scotia, particularly, which is our biggest competitor.

The small business tax now has been reduced to 5 per cent. It

has been at 10 per cent, it is now at 5 per cent; Prince Edward Island is at 10

per cent and will be going to 7.5 per cent in 1993; Nova Scotia is at 5 per cent

and New Brunswick is at 9 per cent. So, from the small business tax point of

view now, they have moved a little bit in the right direction and given us some

advantage over Prince Edward Island, but only, still, equal to Nova Scotia. So

we are now equal to Nova Scotia in both the corporate, the general and the small

business tax.

Manufacturing and processing, we have now come down to 7.5

per cent, which used to be 17 per cent, so that is a great reduction on

manufacturing and processing, a great reduction. It is too bad all our fish

plants or most of our fish plants are cut down, because the majority of our

processing in this Province is fish. Unfortunately, they are all shut down, but

this will help fish plants if and when there are ever enough stocks available to

reactivate some of those plants. We know a lot of them are still operating in

various areas of the Province, so, admittedly, this is a benefit to them. I am

not sure that it balances out the negative impact of the payroll tax though, we

will have to look at that a little more carefully; but again, it only puts us on

a level playing field with the other Atlantic Provinces.

The payroll tax, Mr. Speaker, is the obvious one, the 2 per

cent on payroll, which bears no reference to profitability of a company. Again,

let me use, for example, the impact on the fishing industry, Mr. Speaker,

because it is on this industry, I think, that it has had the most devastating

effect. Many, many fish plants in this Province have been operating in a loss

position, yet they are a labour-intensive business, a labour-intensive industry.

In other words, a very, very high percentage, a huge percentage of their overall

gross revenue and expenditures are labour-oriented versus the oil and gas

industry, which is a capital-intensive industry, where billions of dollars will

be spent on machinery and equipment, the labour component being very, very small

as compared to the fishing industry from a percentage point of view - in real

dollars, obviously, very significant, but from a percentage point of view.

So when you take a fish processing plant that is losing money

but has 400 or 500 employees - my friend from Lewisporte might relate to Comfort

Cove. I think the plant, with up to 600 employees at peak time, in Comfort Cove,

has been losing money constantly for the last three or four years and yet pays 2

per cent of its total payroll. Now, that gives it no credit for the fact that

that company, however they manage to survive with the loss position, is able to

create 600 jobs, and in thanks for creating 600 jobs, they get a penalty, a tax

of 2 per cent of payroll,

whereas down the street, Marine Atlantic, maybe

employing two or three people, probably make a large profit - no they employ a

lot more than that, but they could be making huge profits there. Marine Atlantic

is not a good example, because they are subsidized and are not making a profit.

The point I am making is that it is a capital intensive

business. So they may well be making huge profits, have small numbers of

employees, and pay very small payroll tax - a very small payroll tax. So the

payroll tax is clearly a disincentive to create employment.

As I explained, or tried to explain, briefly, during Question

Period, the benefit of the recent mini-Budget which is to reduce payroll tax on

new corporations - eliminate it for new companies, new small businesses in the

first year - on the surface you say, 'Well, that is good. That gives them a

chance to start out.' The Premier didn't mention the fact that the overall tax

exemption for small businesses for three years, that they eliminated, was in

place in 1989. Had they simply left things as they were, it would be a

three-year tax holiday for small business. Now, the Premier is saying, 'What a

great government we are because we are giving a one-year tax holiday on the

payroll tax.'

Mr. Speaker, clearly that policy is negative to business and

industry, and the payroll tax exemption for new employees for one year, while on

the surface would appear to be good, just does not take account of the fact of

how many employees were lost last year, how many were laid off because companies

had to pay a payroll tax. Government ministers, the Minister of Education, in

particular, will stand up and say, 'Complain all you want. We will not reinstate

the school tax.' Well, maybe you should reinstate the school tax. The average

employee paid $180 by way of a school tax. One hundred and eighty dollars is

what the average person in this area paid. That same employee, if that employee

is earning $30,000 the employer pays a school tax of $600. Either way, whether

it is paid by the employee through a payroll deduction, or by the employer, it

has an impact on the relationship, the salary relationship, between employee and

employer, and it is more than triple what was being paid on behalf of that

employee last year.

So to say that the payroll tax simply replaces the school tax

is clearly not being truthful and it is a major disincentive to employment in

this Province. Again, it doesn't matter if that company is losing money. The

company may be losing money; the shareholders may be pumping in money during

this recessionary period to keep their business operating, to try to keep their

good, long-time, dedicated employees in place, to protect them and their

families against job loss during a recession. Because they are doing that,

putting more shareholders' money in it, or losing money as a company and going

into debt, they get penalized for 2 per cent of the overall gross salary.

Mr. Speaker, we have said before and we say again, the

payroll tax should be immediately eliminated. I recognize that the payroll tax

brings in significant revenues for this government, but they can and should be

replaced in other ways. If savings cannot be effected to balance that, then

revenues can be found in other ways, and there are far less regressive ways of

raising revenues.

Personal income tax - let's compare that. We are now at 69

per cent of the basic federal tax - 69 per cent. That is a 15 per cent increase

in the provincial component of income tax since this government took office. We

have gone from 60 per cent to 69 per cent - a 15 per cent increase. Now, that

means a lot of money. To every member in this House it will probably mean close

to $1,000 this year - probably close to $1,000 extra income tax each one of us

will pay.

To the average family it has a significant impact. I can

quote you some numbers that were provided by the minister's officials, Mr.

Speaker: the average family with two people working, for example, would probably

have a total family income of about $50,000; and today, $50,000 sounds like a

lot of money, but for two people working, paying the expenses of working,

perhaps paying daycare expenses and whatever, $50,000 is not an exorbitant

amount of money. And they will pay almost $300 more this year - that is at the

$50,000 level. As I said, at the $100,000 level - which is far more than members

are making - but up at the $100,000 level, you are looking at a difference of

over $1,000. That is even taking into account the fact that the federal

component is decreasing by 1.5 per cent. So, at a time when the Federal

Government is going ahead with their previously announced plan of reducing the

federal income tax rate by 1.5 per cent, this government is raising the rate by

4.5 per cent. So, not only are we neutralizing the impact of the Federal

Government reduction, we are increasing by an additional 3 per cent on top of

that. So this government' tax will go up 4.5 per cent this year alone, as of

January 1. What a lot of people do not realize - the minister stood in his place

in the last few days and said: 'Oh, we are paying 67 per cent now, so it is only

2 per cent more, even though we are announcing 3 per cent; we are actually

taxing you at 67 per cent now.' And that is true - that is what has been

deducted over the last number of months. Because when the minister announced the

2.5 per cent increase some time ago - in his last Budget he announced 2.5 per

cent for April 1, 1992. I think, actually, the income tax came in place in July

1, 1992, and he announced an extra 1.5 per cent on January 1. The minister, in

his statement, said, We are announcing a 2.5 per cent increase over the whole

year, but he only had six months to get it, so in order to get his 2.5 per cent,

he had to increase the rate deducted by 5 per cent. So,

whereas people thought

that on July 1, income tax was increasing by 2.5 per cent, it was actually

increasing by 5 per cent or, in other words, it was retroactive to January 1 of

last year - the first time, I believe, that a personal income tax was raised

retroactively, went back three months to January 1. So, it was, in fact, 5 per

cent being collected. If there were no increase, that 97 per cent would have

reduced back again to 95.5 per cent, but because of the additional increase

here, now we are looking at 99 per cent, Mr. Speaker.

Now, Mr. Speaker, by comparison, Prince Edward Island is at

59.5, Nova Scotia is at 59.5, and New Brunswick is at 60. Now, what impact does

that have on employers, Mr. Speaker, this is a personal income tax but an

employer in attracting top qualified employees, has to look at an overhaul

package. the employee will look at the overall package. If an employee having an

opportunity in either Nova Scotia or Newfoundland is comparing the two, he or

she is going to look at the overall cost of living and the benefit package that

is being offered. Part of the benefit package is the salary and all of the

benefits therein: Medical plans, dental plans, insurance plans, vacation

benefits, sick leave benefits, and severance packages, all of the things that

employees today must look at in comparing two potential positions. He will also

look at the tax burden, provincial taxation and municipal taxation. He will look

at the cost of housing, all of which is part of the cost of living. He will want

to know, `What will it cost me for an equivalent standard of living in one

province versus the other?' Right away he is looking at a 9 per cent, or

greater, difference in the provincial tax component.

So, Mr. Speaker, that means that businesses in order to

attract that employee, assuming all other things were equal which they probably

are not, but assuming they were, business would have to pay that additional 9

per cent. Now, that is not 9 per cent of salary but the equivalent amount of tax

that would be paid, that employee would want to recover in order to be treated

equally.

So, Mr. Speaker, any way you cut it, that is a burden on

business and industry in this Province. It is no wonder, Mr. Speaker, that we

have gone over 20 per cent in our unemployment rate this year. It is no wonder,

Mr. Speaker, so many companies are in financial difficulty, have gone bankrupt

or are laying people off.

Now, we also have to recognize, as I have said many times

before, that in doing business in Newfoundland and Labrador one of the major

factors is the cost of transportation in many businesses. The cost of

transportation is one of our natural disadvantages that I spoke about, as I

began to speak. One of the natural disadvantages of doing business in

Newfoundland is the cost of bringing goods into Newfoundland and Labrador. We

know that most goods today are coming in by road, are being trucked. Outside of

the fact that we have the tremendous cost of building and maintaining so many

miles of highway, probably more miles per capita than any other province in

Canada except for the Northern Territories and the Yukon - on a per capita

basis, there are more miles of road per capita, I would suspect, in Newfoundland

than probably any other Province of Canada. The cost of building those roads

because of the geography of our Province, Mr. Speaker, is also extremely high in

comparison to other parts of Canada. But the cost of operating vehicles and

equipment on those highway is also very high.

In his recent statement, the minister has increased the tax

on gasoline and diesel fuel by two cents per litre. Mr. Speaker, two cents per

litre is an increase of 15 to 17 per cent, in that area. That, Mr. Speaker, is

going to put an incredible burden on the trucking industry and the

transportation industry in this Province. Again, it is another extraordinary

cost of doing business in this Province. When you compare the price of diesel

fuel -

MR. SPEAKER: Order, please!

The hon. member's time is up.

MR. WINDSOR: Just thirty seconds to clue up, if I may,

Mr. Speaker.

It is 17.6 cents per litre in Newfoundland and 14.3 cents per

litre in Nova Scotia. So we all know what has happened. There are truckers

coming into this Province who are buying all their diesel fuel in other

provinces and buying very little in this Province, even though they are doing

business here.

Now, Mr. Speaker, I will get a chance to revisit some of

these things when I close the debate a little later on, and I thank gentlemen

opposite for leave.

MR. SPEAKER: The hon. the member for Port de Grave.

SOME HON. MEMBERS: Hear, hear!

MR. EFFORD: Thank you, Mr. Speaker.

Mr. Speaker, I am going to take the opportunity to speak to

this private member's resolution for a few minutes. I don't know if I am going

to take up all the time that is allotted to private members on Wednesday

afternoon, but there are a few points that I want to make. It has to do totally

with the Province of Newfoundland and Labrador, the economy and the

ever-increasing unemployment statistics. It's getting to the point, Mr. Speaker,

where it's really getting to a state of desperation in this Province today. It

didn't happen in the last six or eight weeks, it didn't happen in the last six

or eight months. It's been building over the last number of years.

I think what we've done, we've reached such a peak today, and

it's at the the present time that it's really starting to make everybody in the

Province totally aware of the desperate state that Newfoundland and Labrador is

in.

The one thing that I find most interesting is that we all

seem to realize it at the same time and everybody all of a sudden has the

correct answer to solve the problems. That's the reason why I wanted to use this

opportunity. It's not very often that a private member gets the opportunity -

it's only on Wednesday afternoon - and on such an important resolution as this I

think it's important that we as private members be able to express our opinion

on what we see as wrong in the Province, and what has been wrong for a great

number of years.

You can't have an economy in the Province if you're totally

dependent on the income from a government source. I think that's the real basis

of our problem in this Province. The basis of the economy or the income, the

jobs, the creation of jobs, is either dependent provincially or federally. So in

other words it's pretty well on both forms of government. That's where our

problem really begins and that's what really brings us to the situation we are

in today.

Since 1949 governments have been trying to deal with the

economy and the creation of jobs in the Province of Newfoundland and Labrador.

That is a mistake. Governments cannot be the creator of jobs. They can show

leadership in direction, but they cannot be the creator of jobs. Only in the

most difficult economic times, temporarily, should government be involved. That

should be only in the extreme. All we have to do is look at our community

programs, both provincially and federally, in Newfoundland and Labrador, you can

see exactly what I'm talking about.

In the last twenty years that I've been involved in politics,

in just an executive position in my own district, up until 1985 I got elected to

the House of Assembly to today, I've seen millions of dollars thrown away and

thrown at people trying to get people to work, and trying to get people through

difficult economic times. We're back at square one at the end of the day with

very little done to the benefit of the long term. The short term, yes, but the

long term, no.

Here we are, 1992, and this has been going on in the last

twenty years at a rapid rate, but really since 1949. Let's take the last twenty,

twenty-five years in particular. I don't remember back beyond that because I was

too young to remember. Here we are, a resource rich province. If any other

province or any other country in the world - and I always use the comparison to

Japan. If Japan had the resources that we have around the Province of

Newfoundland, or eastern Canada, not only in the fishery but in forestry and

mining, we would not be a have-not province. We would be a have Province.

I'm not saying that very lightly. It is a fact. We have

billions of dollars worth of resource swimming in our waters and everybody but

Newfoundland is getting the advantage of it. Even today, with the desperate

situation the stocks of fish off Newfoundland coasts, are in, still people

around the world are reaping millions of dollars, and we are scratching, trying

to find ten weeks or four weeks or two weeks to try to get someone UI benefits.

This is where the Province of Newfoundland and Labrador

experiences a major problem. No business can operate unless it has a basis to

form an income. If it doesn't have the income no business can succeed or

flourish. Because a government is no different than a corporation. You must take

in money and spend it out. In order to take in money it must be new dollars

coming in. If it's just a circulation of its own money it's going to decrease

until there's no more. That's basically what's happening.

In order to create new dollars you have to have an industry

base. Now what do we have in Newfoundland for an industry base? First of all we

have to look at our geography, and our geography dictates that we are not going

to be an industrialized province like Ontario. We do not have the large forestry

that British Columbia has. We do not have the wheat fields that the Prairie

Provinces have. We do not have the industry base and technology that Quebec has;

nor do we have the population; nor do we have the geography. But we do have

resources, and we have always had the resources.

Now everybody will say that we cannot do anything about what

we have because of the treaties and because of the federal government. Well then

if we sit back in that mode of thought then we are going to remain as we are

now, ever on into the future. We can criticize each other all we like. We talk

about the debt. I know we all get political on both sides of the House, and I

was in the opposition four years and I did the same thing that the opposition is

doing today. We criticized the debt and the overspending. Even if you have a

resource managed and it is bringing in dollars, you still have to administer it

and manage the money properly or it will still be wasted.

Now what are we actually losing in tax dollars and job

creation in the Province? In 1990 the foreign ships on the Grand Banks, outside

the 200-mile limit, took 800 million pounds of fish - reportedly. My hon. friend

from Ferryland will listen to what I am saying because he knows what I am saying

is correct. His district, like my district, depends on what happens in the

ocean, like most areas around Newfoundland. But think about it for a second -

800 million pounds of fish was taken by the foreign ships. That same year, FPI

landed 200 million pounds and created 8,000 direct jobs. Think about it. A

spin-off factor of 1.5 is another 12,000 jobs. In other words, FPI created

20,000 jobs by landing 200 million pounds of fish.

If the foreign fleets took 800 million pounds - and they

reported that. I am not exaggerating that or making an assumption. They reported

taking 800 million pounds. That leaves us with four times as many jobs that FPI

created with 200 million pounds. Therefore, 80,000 seasonable jobs were lost

through the foreign fishery in 1990. Now we are talking about jobs for the

Province of Newfoundland and Labrador. We are talking now where we have probably

80,000 to 100,000 people unemployed, 20,000 fishermen out of work, on a social

services package. That is all it is, a compensation package, and we are trying

to come up with new ideas to create jobs. I just gave you an example where the

foreign fleets, every single year, take 80,000 jobs from our shores.

Now I know I am not foolish enough to stand in the House of

Assembly and say: Well we should have every fish that the foreign fleets are

catching. That is silly; but if we only had 50 per cent - if we are stopped

fishing, why are they not stopped fishing? If the cod stocks and the fish stocks

are in trouble, and they are starting to be reduced to a non-manageable

resource, why is it that we are the only ones who are stopped from working? Why

are they still out there?

I just told you about outside the 200-mile limit. Let me give

you an example, and I can see the great interest around the House of Assembly

and everybody listening to figures. I can see everybody is interested, because

we are talking some common sense for a change.

This came from the federal Department of Fisheries just two

days ago, my hon. friend from Eagle River. We are saying there is no fish within

the 200-mile limit. Well let me tell you what was given to the foreign countries

in this year, 1992.

In 1992, 34,950 metric tons of fish were given to the foreign

ships inside the 200-mile limit - 34,950. You are talking in excess of 70

million pounds of fish that was processed somewhere else in the world from

inside the 200-mile limit, and here we are talking about nobody working, and we

are talking about a new technology, a new industry, and all these new scientific

ideas to create jobs in Newfoundland. We just gave away, this year, several

thousand jobs that the foreign countries took forty-five miles off our coast,

and processed in their own countries; and we are wondering why we have 80,000,

90,000, or 100,000 people unemployed in this Province. I will ask somebody the

question. In the district of Port de Grave we have nine fish plants and I would

trade those nine fish plants tomorrow, who employ 1700 people on a seasonal

basis, and three on a full-time basis, if they will bring in 1700 permanent jobs

in some industry other than the fishery in Port de Grave. Seventeen hundred jobs

in the district of Port de Grave could be contributing towards the tax revenues

that this government need to operate the Province. Let us talk about new

industry. You tell me where we are going to get an industry that is going to

create 1700 jobs, whether they be seasonal or permanent, in the district of Port

de Grave. I am using that district as a example. Take any district in the

Province of Newfoundland and Labrador and the same can be said.

Let us bring in new technology, let the Economic Recovery

Commission bring in that type of technology to create those 1700 jobs and I will

pat them on the back. Why is it that we have a resource and we are going looking

for new ones that are not there? Why is it that we are so willing to give up

what matters to this Province? I spoke about the seal problem in this House last

week and I said in conclusion, in my last five or ten minutes, that after last

Wednesday when I was finished it would be forgotten about. Sure, enough, there

has not been a word about it since except that we got a picture of the IFAW

sending a seal picture to a Newfoundlander, and it says: not guilty. That is the

only thing it said, but we have eight million seals out in the water eating fish

every day.

I said last week use the example of one pound of fish per

seal per day, eight million pounds a day. How many jobs would that create?

Excuse the language, but if they ate only a lousy pound of fish a day that is

eight million pounds a day. And, it is not a problem? We do not want to upset

anybody. That is a day. Now, if those nine fish plants in my district had those

eight million pounds how many people would be working? They would not be out

there today, as they were when I attended a social service appeal hearing this

morning, begging for repairs to their stove or begging for food to go on their

table. That is the position we are in. It is not that we do not have the

resource, but it is that we are not utilizing the resource we have.

AN HON. MEMBER: About 800 jobs.

MR. EFFORD: At least 800 jobs and that is only one day.

Multiply it by 365 days a year. We do have the resources but we are not using

them. Any Minister of Finance knows exactly what I am saying is true. We are

living in a dream world if we thing we are going to solve the economic problems

without utilizing our resources to our best advantage. That is the point I am

making, utilizing the resources we have to the best advantage of Canada, and we

are a part of Canada, in this case our own stocks, our own resource adjacent to

our shore. First for Newfoundlanders and second for everybody else, but because

it is controlled by the federal government in Ottawa it is first for everybody

else and last for Newfoundlanders, and there lies our problem.

MR. DUMARESQUE: And there is our native son, Crosbie.

MR. EFFORD: And as my friend for Eagle River just said,

there goes our native son, Mr. Crosbie. He is right, because I have said 100

times in the past two years that foreign ships are fishing in our own waters

inside the 200-mile limit. The Minister of Fisheries federally said: Efford, you

are lying, you are misleading. He has said it 100 times. Now, this comes out

from his own office. I did not print it. Eric Dunne, the Director General of

Newfoundland Fisheries sent it out to my friend and colleague here for Eagle

River. They are not my words, 34,000 metric tons inside the 200-mile limit. I

was talking to a patrol officer the other day, one of the surveillance officers

on one of the boats that go out to the Grand Banks, and he said that just three

days ago there were more ships outside the 200-mile limit today than there has

been in the last several years. Why? Because nobody else is fishing and they

have it free and can take what they want.

AN HON. MEMBER: Do we have a Navy?

MR. EFFORD: Oh, yes, we had a Navy last year when the

Navy chased the Newfoundland fishing boats. When the fishermen from Ferryland,

from the Southern Shore, and the fishermen from Port de Grave were out fishing

they arrested those guys. One young fellow from Fermeuse had 13,000 pound of

fish and got a fine of $30,000 because he was trying to live and feed his family

and the foreign ships were taking want they wanted.

AN HON. MEMBER: Are you going to defend them for it.

MR. EFFORD: Yes, I would love to have the opportunity. I

would love to have the opportunity but you see, Mr. Speaker, at least I got the

guts, at least I got the guts to try and I would not charge them the fees that

you charge them. Yes, absolutely no fee, Mr. Speaker.

AN HON. MEMBER: Did you get your monies worth?

MR. EFFORD: I got satisfaction. But, Mr. Speaker, let us

get back to the problem at hand. We do have a problem in Newfoundland and

Labrador in jobs, and the creation of jobs and the wrong people are creating

jobs or the responsibility is in the hands of the wrong people. No government

can create jobs that are going to solve the financial problems of this Province.

We have a debt in this Province that requires $585 plus million a year interest

payments. Whether we believe it or not it is a fact of life and it is there and

who caused it is not an issue today, the fact is, it is there. In order to pay

that interest you have to have people working. People must be working and people

must be paying taxes and if that is not done than we will never be out of the

situation that the government was placed in just this past week of bringing down

a mini-Budget.

We cannot do it in any other way but to utilize the resources

that we have within the Province unless we have a magic tooth fairy somewhere

that is going to bring in those other resources that we do not know anything

about. This is 1992 and they are still not here, those jobs are still not here,

Mr. Speaker. It was interesting, I was reading a book written in 1905, the

Newfoundland Guide Book, and everything said in that book by D.W. Prowse, in

relation to the problems in Newfoundland and the fishery and the jobs, is

exactly still the same. The only difference was that England was sending - and

the Spanish fishing ships were coming over and England was raping everything and

the fish merchants were raping and cleaning out Newfoundland people, the only

difference now is that it is done in a political forum. Ottawa is raping us

because the best advantage of the trade relations between the larger provinces,

Quebec and Ontario and British Columbia and the wheat farmers has been traded

off and pawned off for Newfoundland. It is interesting, you should read this

book, we picked this up at a flea market. That is where I got that book at a

flea market, it is interesting but seriously -

MR. TOBIN: Do you go to flea markets?

MR. EFFORD: Why not, why not? The hon. Member for St.

John's East does not realize the problems that people are having around the

Province, financial problems, because he can collect his 30 per cent on the

backs of somebody else. He does not realize the problems that people are having

in this Province. I saw him last night on CBC talking about his court cases and

the people he is representing trying to get a financial settlement. I wonder why

he never said what he is going to get out of it.

AN HON. MEMBER: He earned it he should get it.

MR. EFFORD: Well then he should not be critical of other

people in the Province doing without money and hungry and try to pay some

contribution towards what the real problems in the Province are. Dammed if I

will ever stand up and defend him or any lawyer. Mr. Speaker, the real fact is

exactly what we see here today, very few people give a damn. Let me say those

harsh words in this hon. House of Assembly, very few people give a damn. They

can make fun but while they are making fun this Province is perishing. I think

it is time for the people that have a responsibility and every member in this

House of Assembly to realize that the fun and games are over. The fun and games

are over in this Province. People are hungry and people are used to being given

services -

MR. SPEAKER: Order, please!

The hon. members time is up.

MR. EFFORD: - and somebody better realize what is going

to be done to replace those services. Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

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

MR. SULLIVAN: Thank you, Mr. Speaker, first of all I

would like to make reference to our retail sales tax and the piggy-backing

effect. I would like to just read a part of a letter I received from the

reservations manager of Chateau Lake Louise in Alberta. I think it really hits

home to a problem we have here, we are trying to promote tourism in this

Province and to show off our Province to people outside and we have some

undeveloped potential here in this Province and the part of the letter reads: my

fiancee and I just recently returned from a vacation home to Newfoundland. Three

years ago we left Newfoundland to work in a resort hotel in the Rockies at Lake

Louise, Alberta. Although not frequent enough, we have always enjoyed our trips

home. This brings me to the purpose of this letter, and this letter by the way

is dated November 17. I cannot describe the frustration I felt purchasing items

of necessity at local stores and for that matter meals at local restaurants. I

was appalled at the final receipts. It is bad enough to have to pay the 7 per

cent federal GST, but to add an additional 13 per cent is just outrageous.

As a transplanted Newfie in my position, I have many

opportunities to promote Newfoundland to people from all over the world. I must

say the response is always favourable until we come to the topic of provincial

taxes. Imagine the response when you tell an American or a European that you

have to pay an additional 13 per cent on all items purchased on top of the

federal tax, even though the provincial tax is refundable only after you have

arrived home, filled in the appropriate forms and waited six weeks for your

refund. This means you are required to have that much more money when you

travel. This definitely deters people from making additional or extra purchases.

It is inconceivable to me, how anyone could live in Newfoundland and not find

that appalling.

Newfoundland will always be my home and I will continue to

promote it wherever and whenever possible. Tourism, in my opinion is definitely

in the future for Newfoundland, it is the most beautiful Province, with the most

special people and hospitality. I only hope that the outrageous provincial tax

in effect now will one day be diminished and in effect inviting more visitors to

our beautiful Province. That is from the reservations manager of Chateau Lake

Louise, and I think it really hits home on the effect that it is having on

Tourism and not only people coming to this Province, but in the extra tourism

dollars they could be spending in this Province.

For people living here in this Province, they have also had

to face a tremendous increase, an unprecedented increase during the term of

office of this government of personal income tax from sixty percentage points to

sixty- nine. In year one, 61 per cent, up 1 per cent, up another 1 per cent the

following year and just this past year, a 2.5 per cent, not to take effect

immediately with the Budget but retro-active to January 1, which has

necessitated, starting July 1, in the revised tax tables deducting from the

provincial share of the federal taxes, 67 per cent, and even though in January

with a 1.5 per cent plus the new 3 per cent, for a total of 69 per cent, people

are only going to notice a 2 per cent difference in their cheques on the

personal income tax side provincially, which is negligible, it is only 2 per

cent off 17 per cent if you are less than $30,000, it is 2 per cent off 26 per

cent if you are in the $30,000-$60,000 range of taxable income, and it is 2 per

cent of 29 per cent if you are in excess of $60,000 in taxable income, and that

is going to amount negligibly upon their take home pay or disposable income,

because they have been paying an extra, gouged, 5 per cent amount since July 1

and it is going to make it negligible.

What this has done to the economy is that it has taken money

out of the economy of this Province that would be circulated and used to create

more confidence by people, more spending. The consumer has tightened up on the

purse strings, they fear the worst in tough times, instead of government trying

to instill some confidence in the consumer in this Province. To top that off,

the Province brought in a tax on jobs. For every job in this Province, there is

a tax which the employer must pay. They have to pay a tax to the government if

they hire people. It is the greatest disincentive to industry and to putting

people into the work force that this Province has ever had. It is a

disincentive, it is a tax on jobs in the Province and I think it is unheralded

to tell a company that we are going to try to encourage and stimulate the

economy, get things moving, get money out there for people, but if you hire

somebody, you are going to have to pay an extra tax. It is a disincentive and

the payroll tax should be removed.

Also, in terms of public infrastructures, this government has

looked at spending a fair dollar initially on capital expenditures and they

removed in this recent cut, $23.9 million from capital expenditures or public

infrastructure investment in this Province. With a construction industry that is

crippling, in which many construction people did not get to work until late

August, all during this summer there were carpenters and people working in

construction companies, in paving companies and road work, sitting home with no

opportunity to go out and get a job and even alone not to get ten weeks, but

even to get two weeks work. It was a very desperate situation that fortunately

picked up a little near the end of the year.

So $23.9 million invested in the public infrastructure to

have a long-term affect on this Province would have created hundreds if not

thousands of seasonal jobs in the Province. That's why with figures published in

the papers this summer - the number of carpenters, plumbers, and all these other

construction people were out of work, one in six and one in eight, in different

trades. Because the money was not spent. Money was not spent until late August

when we should be trying to encourage a little bit of consumer spending in the

Province. If they don't have money to spend the consumers can't spend it.

Then the minister said, stating the Province's fiscal

position on page 6 of the mini-Budget: "I must reject emphatically the

suggestions from many people, some of whom are in this hon. House today, that we

should address the deterioration in our budgetary position by borrowing more, by

placing an additional burden on the citizens of the Province. To these people I

say no!"

Then, almost in the same breath, just moments later, on page

7 he outlined three fiscal strategic approaches that this Province is going to

take, and one of these says: "...to allow a prudent increase in the current

account deficit which would be financed through increased borrowing." The

minister is talking out of both sides of his mouth. To those who say we should

borrow we say no; and then he turns around and says we should borrow $70 million

to $80 million. That's an about face in less than one minute.

The people have lost confidence in the ability of this

government to control the fiscal affairs of the Province. They have to bring in

two Budgets to get them through one fiscal year. It's no wonder the bond rating

agencies are scared, that they might look for the only single A rating to maybe

drop to a triple B. Bond rating agencies look upon the ability of the province

to generate revenues and control expenditures, and they also look upon the

ability of the government to stick to its forecasts. To be able to predict and

show fiscal management. This government has shown fiscal mismanagement and the

bond rating agencies have every right to have concerns and fears. It's either

their inability to budget or its their ability to cook up a good set of books.

It comes down to one of these two things.

For the past three and a half years this government has done

more than any previous government to stymie the growth of business in this

Province. Even though the corporate income tax collected is only $44 million,

once it was over $70 million, they have said no to the business community. They

have not provided any incentives. They've increased initially the corporate tax

up to 17, which now is going to take affect and come back in January. It's not

here yet. It's not going to get results between January and March of this fiscal

year. How can you get results in three months? They should have dropped the

corporate rate of tax three and half years ago and put some confidence back into

the business groups across this Province. To help industry, encourage them to

invest, to hire people.

Also we've seen disincentives with the high rate of small

business tax. Even though it's going to be reduced it is too late to solve our

economic woes for the past three years. It has contributed to this government's

inability to be able to forecast properly. The revenues weren't generated

because the people weren't working in this Province. If we don't have incentives

to hire people....

Retails sales tax spent by the consumer generates about $40

million for every one percentage point. Personal income tax for every per cent,

amounts to about $7.5 million. Where do the consumers get the money to spend and

give the government retail sales tax and personal income tax? It comes from

giving incentives, not only to the public sector employees, but also to other

business employees across this Province. Money is not being circulated. The

consumer is protecting his or her money in this Province, and the businesses are

trying to protect the money that have in this Province, because both are either

taxed to death and they are turning people inward and trying to cut down on

expenditures, and their money is not being circulated. So we have a growing,

vicious cycle here of cuts and taxes that is not going to end unless some

responsibility is taken to stimulate the investment climate in this Province.

People today have far less disposable income than they had

three-and-a-half years ago. We have had 9 percentage points increase in personal

income tax. We have a piggyback of .84 per cent extra in retail sales tax. That

amounts to close to $40 million by piggybacking the RST, and we expect the

consumer to go out and spend. With inflation being controlled, to a certain

extent, their gross revenues and salaries not increasing, with personal income

tax increasing, retail sales tax increasing, there is far less disposal income

at the hands of the consumers than there was three-and-a-half years ago. It has

not only come by hitting the consumer in the Province, it has come by hitting

the main part of this Province that employs consumers, in the business sector of

the Province.

The hon. Member for Port de Grave referred to the fishing

industry. We have a monstrosity in the fishing industry. The federal free trade

agreement - yes, we have movements to reduce tariffs and to encourage further

development. We have a resource out here that employed people in this Province

for hundreds of years. We have an industry now that is crippling and almost on

its last legs. What needs to be done, if we are going to create jobs in this

Province, the only resource that has the greatest potential for development in

this Province is in the fishing industry.

We have exported whole fish. We have exported fillets in

unprocessed state. The Province has not given incentives to encourage and

develop the secondary processing aspect. For every job in the primary processing

area, we can create an increased number of jobs in the secondary processing. We

see fish go out of this Province that is processed in the United States. It is

processed in the UK and other European markets, and it is about time that the

mechanisms are put in place today to solve this problem down the road.

We cannot hope to invest dollars in two years time and expect

to revitalize and start a fishery when a moratorium is lifted in 1994. Now the

plans must be made. It takes investment and it will take dollars, but it is

going to reap benefits down the road. We are doing too much short-term planning

and not enough long-term planning. We should not be looking at where we are

going to be tomorrow. We should be looking at where we are going to be in five

or ten or fifteen years time.

I think it is about time that this Province accepted its

share of the responsibility in industries in this Province - in particular, the

one with the greatest potential is the secondary processing relating to the

fishing industry.

The government should take steps right now, and the Minister

of Fisheries hopefully will give this the utmost consideration, because we want

to have a Province here where we can employ people. If not, we are going to

have, and I stated it in a Private Member's resolution on the Wednesday when the

House first opened, that we are going to have a welfare state in this Province

far worse than the 50 per cent increase we have had in social welfare recipients

over the past three-and-a-half years. We are going to have a major problem - one

that this Province will not come out from under unless they do something today

to get this Province back on the road to recovery.

I have not seen anything except, just recently, some minimal

incentives to an economy that has shrunk so much in the business sector by

reducing taxes. They have given a little plug to that sector that equates only

into a few million dollars investment. That is all it is going to amount to in

these tax breaks. They only pay $44 million totally, and they are only reducing

the small business tax from 10 per cent to 5 per cent. That is less than

$200,000 income. They are going to reduce the primary and manufacturing aspect

in this Province. That is going to take over a 50 per cent cut, but the

corporate tax rate that brings in the total amount overall from 17 to 16, it is

only going to get a few million dollars. We need an influx of spending in the

tens of millions if we are going to plan to have a viable future in the fishing

industry here in this Province.

In closing I'll reiterate that we have followed a tax and cut

policy that has been a dismal failure. Cuts, and then taxes, and more people

looking inward and protecting the money that they do have. Their disposable

income is shrinking. It's no wonder the consumer wants to try to protect what

they have. They fear for their jobs and for their future. The business community

has taken the same direction as the consumer has in this Province. I think it's

about time if a government is going to accept the responsibility, they don't

just have a responsibility to manage their source of revenue. They have an

obligation to this Province to generate, to create and to come up with new

sources of revenue and stimulate the economy at least to maximize the return on

the sources of revenue that are there now.

This government hasn't done that. I think it's about time

they started to do something about it. Thank you, Mr. Speaker.

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

MR. RAMSAY: Thank you, Mr. Speaker. With reference to the

motion put forward by the hon. Member for Mount Pearl today, to comment

specifically on the proposal that he puts forward, on the clauses therein, the

hon. member states that the provincial economy is shrinking. Now I would somehow

have little problem in agreeing with that, as far as the growth of the

provincial economy has shrunk somewhat.

Again, it depends on what you compare it to. If you were

comparing apples with apples then you would be comparing today's economy, its

growth or contraction, with not just what happens entirely close to it, what

happened just before, but also what happened x number of years ago and the

relevant growth or contraction of the economy in previous years.

The point I'm making is that in relative terms we currently

have a larger work force in the Province than we had even five years ago. The

work force has increased by approximately 20 per cent since 1980. So in the last

eleven to twelve years we have approximately a 20 per cent increase in the

average labour force in the Province. So you've got to take things relative to

that which you're comparing them to.

I note the average labour force now in the past year for

which statistics are available of 241,000; in 1980, when the previous government

was in power, 205,000 people were in the work force. So you have to look at

these clauses of the said motion in relative terms.

Other than that we take the second clause here. The hon.

gentleman notes: "AND

WHEREAS the tax burden imposed on individuals and

businesses by this administration has harmed the economy." Now he states that

the tax burden has harmed the economy. I would dispute that. Although the tax

burden is a difficult cross to bear as a government, it is one which in some

cases we inherited in the event of the sales tax, which is quite high, which we

had little or no choice but to set up with the GST, where the federal government

encroached on provincial tax room in the manner in which it did.

We didn't have the luxury as some other provinces did of

charging both taxes separately. We had little or no choice in that. We chose to

put the provincial sales tax on - as it had previously been considered - the

value of goods plus the federal sales tax, or equivalent federal tax, being the

GST. Which, if we took the federal word for things, was that the GST was in fact

lowering the net cost or the overall cost of goods.

So therefore we would not really be taking a tax grab, so to

speak, on the basis of charging the provincial sales tax on top of the

retail value of goods plus the GST amount. The other clause

in here, I note the hon. gentleman has stated: and "WHEREAS the administration

has failed to execute effective policies to stimulate the economy and decrease

unemployment." Now, to take steps to reduce the level of taxation is one thing

but to fail to execute policies to stimulate the economy? Now what can we as a

Province as cash strapped as we are, do in the overall to stimulate the

provincial economy? There are certain limits as to what can be done by a

government, which is known as the poorest Province of the country to stimulate

the economy.

We can do our

part I am sure but we could also come close to

bankrupting ourselves in the process of trying to stimulate the economy. So, Mr.

Speaker, that contention in the statement by the hon. member, I would say is

based on a false premise. It is based on the premise that provincial governments

of our size are able to effectively stimulate the economy. If you take that as a

given, then possibly you could suggest that we fail to do so. Now, if in fact it

is impossible for a said government to stimulate the economy by any means, that

would certainly show us any overall benefit, because the reason for us to

stimulate the economy, if you look at those who preach social justice, is to

stimulate for the purpose of being able to generate the revenue for us to then

provide the social services and social programs that the public of the Province

demand.

So, if we are the ones who are going to stimulate, than

therefore we are robbing Peter to pay Paul and essentially not providing the

climate necessary for the private sector to stimulate the economy and the

private sector therefore to provide revenues with which we can then provide the

services necessary for those that require the social safety net.

Now, I also note here that the hon. member has stated: BE IT

THEREFORE RESOLVED that in an attempt to stimulate the economy and thereby

create jobs, again based on the false premise that we can do so, the provincial

government he states, immediately take steps to reduce the level of taxation in

this Province. Now, on this end, I do not entirely quarrel with his argument. In

the one case, in the hon. ministers statement on Friday he did note that we are

planning to lower the taxation, have lowered the taxation on business tax rates,

corporate tax rates for small business to effectively stimulate the economy. So

we have half of the equation of which he speaks correct.

Now the other side of thing is that we have the personal

income tax out there, the people who drive the economy, the consumers who drives

the economy, are being asked to pay a little more. Now again, if we look at the

statements made prior to our announcement, we had the Opposition stating that

they would prefer that we share the burden and do not make the public service of

the Province shoulder an unfair amount of the burden of the problem we are now

experiencing. Everyone who is in this legislature knows that the most reasonable

way of sharing the burden that is necessary to overcome our overall provincial

tax problems is through the tax provided under the personal income tax section.

So, therefore it is the easiest way to spread the burden, now it is an

inordinate amount, 69 per cent is an inordinate amount.

We have gained somewhat I suppose as to the burden we will be

affecting on the people of the Province because of the fact that the federal

surtax has been lifted. This, Mr. Speaker, will allow us to not cause a lot of

harm to people in the amount of actual take home pay. It will be less by a

smaller amount than it would have been I suppose if we had gone from 65.5 per

cent or whatever up to 69 per cent in a given move. Again, we suffer from the

fact that the 67 per cent was an increased amount for us to recover the amount

of tax based on a half years levy.

The other thing I want to mention, Mr. Speaker, concerns the

comments of members opposite about the social services and the social safety net

which we provide. Again, this has to be looked at in relative terms if in fact a

reason for taxing the people of the Province. Tax, as bad as it is, is a

necessary evil and the reason we do so is to provide social services for those

who are unfortunate enough to be caught in circumstances, the occasional chronic

user of the system who by virtue of no fault of their own, either through their

environment as they have grown up or the environment they have been subjected to

because of a variety of factors have no choice but to avail of social services

benefits.

This kind of assistance is available because of the overall

balance and the effect the economy has in allowing us to provide those services.

Now, again we have to look at it from the standpoint of the relative terms of

what it is we are doing. We remember from some days past that hon. members

opposite decided there was a terrible increase in the number of social

assistance cases. Mr. Speaker, we have to look at exactly what it was like when

members opposite on the front benches of the government of the day over the last

number of years, prior to our taking over government, experienced. Let us take a

look at exactly what the situation was in comparison to what the situation is

now. In 1981, as an example, Mr. Speaker, there were 208,000 people in the

average labour force in the Province. The average unemployment was 29,000

people, a low number in comparison to today's average unemployment, but again

let us compare apples to apples.

MR. EFFORD: What was that again?

MR. RAMSAY: There was an average unemployment of 29,000

in the year 1981. Unemployment as a percentage of the labour force was very

good. It was only 13.9 per cent. For that, I suppose, hon. members opposite

would try to take some comfort although if they looked at their situation in

comparison to the national average of the day they were not really that much

better off.

There is one thing I want to look at and that is in the

comparison of the employable social services cases as a per cent of the labour

force. In 1981 2.7 per cent of the labour force were employable social services

cases. I note that in 1991, ten years later under this government, the

percentage of the labour force that are employable social services cases are 2.6

per cent, less, Mr. Speaker. We are today showing less percentage of the

employable social services cases as a per cent of the labour force than in 1981.

It was 2.7 per cent in 1981 and in 1991 it is 2.6 per cent, so really as a

percentage, when you compare it in relative terms, today is not that bad. You

are looking at a 241,000 labour force versus a 208,000 labour force in 1981.

That is social services cases.

Now, if we go through the various years: in 1982 we had 2.4

per cent, it went down substantially in 1982, from 2.7 down to 2.4. Then it 1983

it rose again to 2.7 per cent. In 1984 it stayed at 2.7. Then in 1985 it dropped

a little bit to 2.6. In 1986 it jumped to 2.8 per cent, and in 1987 the year

just prior to the hon. member's opposite being booted out of office, it rose to

the unprecedented level of 3 per cent. Mr. Speaker, 3 per cent of employable

social services cases as a percentage of the labour force. It was up to 3 per

cent.

AN HON. MEMBER: (Inaudible)

MR. RAMSAY: What do you mean I do not know what I am

reading?

You probably would not even be able to read it. Anyway, Mr.

Speaker, in 1988, the last year of the hon. member's opposite tenure, the labour

force was 231,000. We had an unemployment level of 38,000 and we had a 2.7 per

cent - again, it was a level higher than it was today.

Now, in 1989, I will give the hon. members credit, on this

side of the House the amount lowered to 2.3 per cent, Mr. Speaker. We went down

to 2.3 per cent of -

MR. EFFORD: Explain what you're saying. I don't

understand what you're saying.

MR. RAMSAY: The employable social services cases, as a

percentage of the labour force - so those who are employable in social services,

as a percentage of the labour force, has dropped from 1980 to now. Now we are

down to 2.6 per cent. These figures really demonstrate that even though the

numbers of cases are rising, Mr. Speaker, the numbers of cases, as a percentage

of the total labour force, has dropped, in comparison to some of the years that

the hon. members opposite were in.

Again, they are a little higher than some other years. There

were two years in there where they were better when the Opposition was in power.

But on the majority they have dropped. I think this is a point worthy of note.

Now, what can you do as a member of the House of Assembly -

you, in the Opposition, we, here on the government side. We, I suppose

fifty-two, soon to be forty-six or less, of the members of the House of

Assembly, what can we do? If, in fact, the resolution brought forward by the

hon. member opposite is not correct, in that we feel that it is not something

that we can support, then what would we suggest?

Well, I would suggest that everyone get off their duff in the

House, every hon. member, including myself, get out into your communities, get

the ideas of the people and assist them with their ideas. Now I know I do this

kind of thing day-in and day-out for people in my district, as some hon. members

do, as well. The thing is, if a politician involves himself in the process of

trying to facilitate initiatives of the people in his district then possibly a

lot more activity would take place.

The thing we have to look at is that we, as legislators,

become too complacent with our activities as people who deal with legislation. I

think we have to get out there, be more active, if we are business-oriented at

all. Some of the people are generally, I suppose, problem solvers as opposed to

creators. Some of us purport to be creators of new initiatives and will assist

in training and assist in different things that are required in our districts to

get initiatives off the ground.

I note with the advances lately in computerization, these are

the kinds of things that we have to really stress and push, and the kinds of

things that we have to do to try to make the private sector be the provider of

tax dollars, as opposed to government spinning itself in a circle and on down

into the ground, where eventually we bankrupt ourselves trying to stimulate an

economy that we cannot stimulate by government means anyway.

Mr. Speaker, I think we have to look at it from an overall

perspective. The provincial economy is unable to stimulate itself. It requires

factors that are much larger than that which can be generated by a provincial

treasury alone. It requires the factors of a national economy to bring it along,

an international economy which hopefully will be led by the United States and,

in so doing, will provide some of the impetus necessary for those of us here to

provide the services that we like to provide, and need and want to provide, for

the people of the Province.

Mr. Speaker, I suggest that the hon. member's resolution is

faulted, that the hon. member is well-intentioned but again misinformed. In so

suggesting I ask that hon. members of this House not support the resolution of

the hon. the Member for Mount Pearl. Thank you very much, Mr. Speaker.

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

MR. A. SNOW: Thank you, Mr. Speaker.

I am pleased to have the opportunity to rise and speak on the

resolution so capably presented by my colleague for Mount Pearl on Private

Members' Day, to give this government some new ideas on what should be done with

the economy of this Province, so that we can improve the general quality of life

or general lifestyles here in this Province of ours, Newfoundland and Labrador.

Because that is what really we should be doing. It is not just taking political

potshots at each other. That is not what this is all about, Mr. Speaker. This is

supposed to be improving - we are supposed to be here to debate the issues, but

more importantly than debating the issues is to offer new ideas that can

stimulate and promote and develop the economy of this Province, and this

resolution says all that, Mr. Speaker, and if it were implemented, would do

that.

Mr. Speaker, we have seen what this government has suggested;

the hallmarks of governing of this Province, by this government, is cut and tax;

that is the only method they have, that is exactly what they do. Now, the

problem is, that is the very thing we should not be doing. What we have to do is

address the problem in a manner that we can get the solution because we realize

that in the three years you have attempted to tax and cut, you have created a

larger problem, so that isn't the answer to the problem.

You have exaggerated the problem; you made the problem

larger, and with your tax and cut policies, you are led into that by two

iron-clad rules that you live with, which are to never admit you are wrong, and

to blame someone else. You can see minister after minister stand in his place

and defend a mistake or mislead the House. Mr. Speaker, they will do one or the

other but they will never ever admit they were wrong. And then, of course, the

other iron-clad rule that they never break is that they then resort to blaming

somebody else: It was the feds who did it. Why don't we get the feds to pay for

it?

MR. R. AYLWARD: (Inaudible) bankrupt.

MR. A. SNOW: Exactly. Well, if the feds didn't cause it,

it was their predecessors who caused it - always blaming somebody else, never

accepting the responsibility of government. You never ever have done that since

you have been elected. I suppose it was the shock of finally being there, that

is what did it; that is what caused it I suppose. You just can't believe that

you now have not only the right to govern, you have a responsibility. So, when

you find that you have that right and you accept the responsibility, you will be

able to throw away those two iron-clad rules that you used, those of blaming

somebody else and never admitting you are wrong, and get on with governing.

But, Mr. Speaker, the resolution so capably presented by the

hon. the Member for Pearl, has brought forward an attempt to do something

differently, that is, to attempt to stimulate the economy. And there is nothing

new about that idea. The President-elect in the United States of America is

proposing this same type of agenda. The very same thing that he is proposing

down there, we are proposing here.

AN HON. MEMBER: (Inaudible).

MR. A. SNOW: I hear the hon. member on the other side

saying: Now, once the economy gets going down in the United States and once the

economy gets going upalong, we will do okay. If they are making more money in

Ontario and they send it down to us, we will be doing okay. If they make more

money in Alberta, we will do okay, but they do nothing, absolutely nothing to

stimulate the economy. Now, Mr. Speaker, we have to do this because I am sure

you are beginning to recognize that you have made a tremendous mistake with the

policies that you have adopted, because you have all begun to finally realize

that it is not working. So it doesn't work to tax and cut even more.

We have to realize the dilemma that the general public of

this Province is in. We have cut off, we have decreased, we have lowered, we

have picked every red penny out of their pockets, Mr. Speaker. That is what they

are saying in the Cabinet room. You are getting every nickel, every penny out of

their pockets, so the discretionary spending of the ordinary citizens is less

today than it was last year, less than the previous year, and less than the year

before that. Make no wonder the economy is shrinking - it has to shrink, because

you are taking the money out of their pockets.

A case in point is the infamous payroll tax that was imposed

on the people of this Province to replace the school tax. Because we have seen

what it did. In my area, we see the same people paying more money, the same

miners paying more money, the mining companies paying more money, and the

quality of education to the people who live in Western Labrador is not as good

as it was thirty years ago, let alone last year. That's what we are seeing. we

are seeing tremendous tax grabs that decrease discretionary spending, that

stifles and lowers the amount of money that people can spend and thus shrinks

the economy.

This payroll tax is going to grab $66.8 million. This tax on

jobs is going to slow down, is going to take out of the economy of this

Province, $66 million. That isn't going to help the economy of this Province.

Mr. Speaker, I think what happens with this group -apart from the fact that

after they got elected it was a such a shock to them, they haven't realised what

really happened to them. So now they are up in their Cabinet rooms and they make

all these decisions. They are up there in these - what is it? - two thousand

dollars a chair you get to sit on when you get into Cabinet?

AN HON. MEMBER: (Inaudible).

MR. A. SNOW: The Minister responsible for Forestry says

no, his is $3,000. Well, maybe he has a $3,000 chair, Mr. Speaker. When he sits

in there in his $3,000 chair and makes these decisions, they forget all about

the person who is out in the economy, out and about the Province, Mr. Speaker,

who is probably retired on a fixed income. Doesn't he realise what he has done?

- that the money that person is going to make, money he is going to have to

spend on groceries, money he is going to have to spend on clothing, is going to

be probably $1,000, $1,500, to $2,000 less now per year than when this group got

elected in 1989.

Just the other day in my district, a retired miner, a

Newfoundlander who had gone down to Labrador and worked in the mines and retired

and decided to live there, came up to me and suggested he is probably going to

have to leave because of the huge amounts of taxes that this government have

imposed upon him. He can't afford to live there anymore. We are going to drive

him out of the Province.

The previous speaker stood and talked about: Well, it doesn't

matter, really, about the income tax raise that we are going to have; the 3

percentage points are not going to be noticed that much. Really, the 3

percentage points that are coming on January 1 are not going to be noticed that

much by the people of the Province, because the feds lowered theirs.

He doesn't realise that what we're talking about is removing

money from the economy, taking money from these retired people. That is what

they are doing. He doesn't understand how it works. I suppose he is happy. He

has barrels of money - he is making $60,000, $70,000 a year, plus expenses. He

doesn't care about the retired person. You forget all about him once you get in

here - this group did.

Mr. Speaker, you