Newfoundland and Labrador Hansard — Members' Statements; Statements by Ministers — 19 December 2002 (44th General Assembly, 4th Session, Vol. XLIV No. 49)
2002-12-19
Newfoundland and Labrador — Debates (Hansard)
December 19, 2002 HOUSE OF ASSEMBLY
PROCEEDINGS Vol. XLIV No. 49
The House met at 1:30 p.m.
MR. SPEAKER (Snow): Order, please!
Statements by Members
MR. SPEAKER: The hon. the Member for Port de Grave.
SOME HON. MEMBERS: Hear, hear!
MR. BUTLER: Thank you, Mr. Speaker.
Mr. Speaker, a 116 page HIV/AIDS awareness and self-help manual launched in
June by a group of volunteers dedicated to curbing the outbreak of the disease
in Conception Bay North has gone farther afield than any of them ever dreamed.
AIDS advocates and victims of the worldwide epidemic are using the booklets
across Canada, in San Francisco, North Carolina, and Pennsylvania in the United
States, and a world away in hospices in Burma, in south-east Asia.
Since its inception in 1990, the Conception Bay North AIDS Interest Group has
worked tirelessly to educate people about the disease. The manual, which I hold,
Opening Doors To Self Care: Living With HIV/AIDS, was published with funding
through the Provincial Strategic Social Plan and cost in the vicinity of
$25,000.
The manual is dedicated to those living with HIV/AIDS, their families and
friends, and those who have died of the disease. It contains a wealth of
information and describes the physical, emotional and spiritual aspects of the
disease.
Mr. Speaker, I would like the hon. members of this House to join me as I
congratulate the Conception Bay North AIDS Interest Group on creating an
HIV/AIDS awareness manual so effective that it is being used in different parts
of the world. I would also like to commend the residents for taking the steps
necessary in educating others about the issues of HIV/AIDS.
Thank you, Mr. Speaker.
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: The hon. the Member for The Straits & White Bay North.
SOME HON. MEMBERS: Hear, hear!
MR. TAYLOR: Thank you, Mr. Speaker.
Mr. Speaker, I would like to take this opportunity to extend congratulations
to two young people in my district. On Saturday, December 14, seventeen-year-old
Christopher Smith and his thirteen-year-old sister, Katherine Smith, attended
the annual Tri-Service Cadet Speak-off held this year at Gonzaga High. The
speak-off featured over ninety cadets from the air, army and sea cadet movement
from throughout our Province.
Christopher Smith placed second in the senior division of the speak-off, with
his speech on, Canada's Role in the War on Terrorism. Katherine placed in the
top ten in the junior division with her speech, My Most Memorable Camp
Experience.
Mr. Speaker, Christopher and Katherine are members of the 774 St. Anthony and
area Air Cadet Squadron.
I would like to ask all members of this House to join with me in
congratulating Katherine and Christopher Smith on a job well done, and also to
extend our appreciation to all the officers, volunteers and parents who dedicate
so much of their time to our youth and the cadet movement in our Province.
Thank you, Mr. Speaker
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: The hon. the Minister of Mines and Energy.
SOME HON. MEMBERS: Hear, hear!
MR. MATTHEWS: Mr. Speaker, may I have leave to present my first member's
statement?
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: Does the hon. member have leave?
SOME HON. MEMBERS: By leave.
MR. SPEAKER: By leave.
MR. MATTHEWS: Mr. Speaker, I would like to take this opportunity to
congratulate the St. John's Clean and Beautiful Organization for its
first-place ranking in the Keep America Beautiful Incorporated Innovation Award.
This international award recognizes the top innovative partnerships developed
by the 500 Keep America Beautiful affiliates across Canada, the United States
and around the world. To take first place in such a large group is truly
remarkable. This year's award recognizes the partnership forged between St.
John's Clean and Beautiful and the Canada Post Corporation.
Entitled the "City in Bloom! Campaign 2002" the partnership engaged
the services of 150 postal workers throughout 2001 and 2002. The postal workers
passed out door hangers, thanking residents and businesses in the city who take
the time and effort to make their properties green and beautiful.
Mr. Speaker, this campaign, like all of those designed by St. John's Clean
and Beautiful, was designed to recognize those private and corporate citizens
who take pride in their piece of the city; and who better to acknowledge their
efforts than Canada Post carriers, who see the properties every day?
Mr. Speaker, St. John's Clean and Beautiful is a non-profit, volunteer
organization dedicated to reducing litter through environmental awareness and
encouraging beautification projects involving the community. I take particular
pleasure in the group's ongoing success, having been one of its founding
members in 1991 -
SOME HON. MEMBERS: Hear, hear!
MR. MATTHEWS: - and having served as its first chairperson.
I congratulate the current chairperson, John Drover, for this latest
achievement which is shared equally with the Canada Post Corporation. This
award-winning partnership was acknowledged recently with a ceremony at St. John's
City Hall.
I would like the House of Assembly to add its congratulations and best wishes
for continued success in keeping our capital city clean and beautiful.
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: The hon. the Member for Humber East.
SOME HON. MEMBERS: Hear, hear!
MR. MERCER: Thank you, Mr. Speaker.
Mr. Speaker, I would like to take this opportunity to inform hon. members
about a unique fundraising project for breast cancer research.
Polaris Industries of Canada has provided sleds and will pay the expenses of
an all-female, cross-Canada snowmobile run which will begin in St. John's on
January 11. This run is intended to recognize the large number of women who are
involved in the sport of sledding and to raise funds for breast cancer research.
Three female riders have been selected from each province, to be responsible
for raising money through pledges and other fundraising activities and to relay
at one another's provincial boundaries until the ride ends in Squamish,
British Columbia, some time in late February.
The three riders selected to travel the 1,000 kilometre
section of the
Newfoundland ride are all members of the Western Sno-Riders Club out of Corner
Brook. They are Penny Brake of Meadows, president of the Sno-Riders and
vice-president of the Newfoundland and Labrador Snowmobile Federation; Susan
Tipple of Humber Village, treasurer of the Sno-riders and also treasurer of the
Newfoundland Snow Mobile Federation; and Sherry Howell of Corner Brook,
secretary of the Sno-Riders.
At various points along the way, the Newfoundland trio will be met by
representatives of other local Snowmobile Clubs who will organize local
fundraising events, provide celebrity riders, and escort the Newfoundland trio
through their zone.
I encourage all hon. members to support this worthwhile effort and to give
generously in helping the Newfoundland riders raise money for breast cancer
research and to demonstrate to all Canadians that we really are the caring and
giving people that all believe us to be.
Thank you, Mr. Speaker.
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: The hon. the Member for Carbonear-Harbour Grace.
SOME HON. MEMBERS: Hear, hear!
MR. SWEENEY: Thank you, Mr. Speaker.
I rise today to make all members aware of the historically significant
opening of the
section of the Veterans Memorial Highway, from Tilton to
Riverhead-Harbour Grace.
SOME HON. MEMBERS: Hear, hear!
MR. SWEENEY: This highway has already been beneficial to the people of
Conception Bay North area. It has made travel to and from the area much more
convenient and is another positive factor in encouraging economic development in
the region. It is also significant, Mr. Speaker, that the highway is named in
honour of the contribution of our veterans who fought for the freedom we enjoy.
It is important, Mr. Speaker, that all members be aware of the scale of the
road work which has occurred in this region to appreciate the truly historical
significance of this new infrastructure. Approximately $7 million has been spent
constructing the 6.7 kilometre
section of the highway from Tilton to Riverhead-Harbour
Grace.
MR. SPEAKER: Order, please!
MR. SWEENEY: The total budget for the Veterans Memorial Highway is $48
million, of which $45.5 million has been invested to date.
MR. SPEAKER: Order, please!
I ask the hon. member -
MR. SWEENEY: In total, approximately 42 kilometres new and existing road
MR. SPEAKER: Order, please!
Our Standing Orders indicate that statements that are made by members in the
House ought to be of a non-political nature, and it indicates the kind of things
that members statements could be about, like anniversaries, special events in a
community. I think the hon. member has stepped outside that particular realm
right now.
SOME HON. MEMBERS: Hear, hear!
Statements by Ministers
MR. SPEAKER: The hon. the Minister of Mines and Energy.
SOME HON. MEMBERS: Hear, hear!
MR. MATTHEWS: Mr. Speaker, the early signs of joviality in the House, I
think, is only a good omen, I hope, for expeditious proceedings throughout the
day.
Mr. Speaker, I rise in the House today to congratulate the Resource
Development Council and the Voisey's Bay Employers Association on the signing
of their collective agreement for construction activities at the Voisey's Bay
mine site and mill/concentrator site in Labrador.
This afternoon's signing ceremony is indeed another milestone for the
Voisey's Bay project. We have already witnessed the establishment of important
infrastructure at the Voisey's Bay site, including a new road, temporary
airstrip, port facilities, and an expansion to the camp facility which have
employed in excess of 200 people. The signing of this agreement now paves the
way for the expansion of an already impressive work program which will continue
to grow next year.
Mr. Speaker, the Resource Development Council represents seventeen unions at
the Voisey's Bay site. This organization will act as the negotiating body for
all of the unions at the site, making the negotiation process much more
efficient. This organization also understands the adjacency commitments made to
the Labrador Inuit Association, the Innu Nation and qualified Labradorians.
Government has been assured that this adjacency principle will be followed.
Mr. Speaker, government has continued to monitor the activities associated
with the Voisey's Bay project since the signing of the Statement of Principles
in June. I am pleased to say that the commitments that were made by the Voisey's
Bay Nickel Company Limited during the past work seasons have been kept.
Eighty-four per cent of the workforce employed with the Voisey's Bay project
were from Newfoundland and Labrador. This is a very impressive figure and
government expects to see an increasing number of Newfoundlanders and
Labradorians employed with this highly beneficial project moving forward.
Mr. Speaker, I ask this House to join me in congratulating the Resource
Development Council and the Voisey's Bay Employers Association on the signing
of this contract. I am certain that the substantial majority of Newfoundlanders
and Labradorians who support the Voisey's Bay project have once again realized
that this government reached a good deal for this Province.
Thank you, Mr. Speaker.
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: The hon. the Member for St. John's East.
MR. OTTENHEIMER: Thank you, Mr. Speaker.
In the Statement of Principles, we find that under the heading, project
description, which is under clause 8, it states, "During the various
operating phases, the Project will create the following estimated employment
levels: mine and mill/concentrator processing plant - 400 people; research and
development program - 200 people; underground exploration - 85 people; the
underground mine operations - 800 people; and hydrometallurgical processing
plant - 400 people".
Mr. Speaker, there are some apparent inconsistencies between this Statement
of Principles and the final document, the binding agreement, that was recently
entered into. We only hope, and I am sure all Newfoundlanders and Labradorians
only hope, that the real figures are the figures that will closely resemble the
numbers that are found in the Statement of Principles to ensure that there is a
maximum benefit for all Newfoundlanders and Labradorians.
With respect to the numbers of individuals working on the project, the
question that has to be asked is: Why is there 16 per cent that are not
Newfoundlanders and Labradorians? Is it some of the design work? Is it some of
the engineering work? Is it some of the highly technical work that I am sure
would be there for Newfoundlanders and Labradorians? So the question that has to
be asked, and the question that I would ask the minister to, perhaps, answer
during the day: Why is it that 100 per cent of the work that is available on
this project is not for Newfoundlanders and Labradorians? In fact, have there
been opportunities given to Newfoundlanders and Labradorians for this very
important work?
MR. SPEAKER: Order, please!
The hon. member's time is up.
MR. OTTENHEIMER: Thank you, Mr. Speaker.
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: Order, please!
The hon. member's time is up.
The hon. the Member for Signal Hill-Quidi Vidi.
MR. HARRIS: Thank you, Mr. Speaker.
I just want to congratulate the parties on the signing of this collective
agreement and to note that we have had concerns. My colleague from Labrador West
has raised concerns, over the fall, about the carrying out of the adjacency
principle as it relates to non-native Labradorians and the expectation that this
collective agreement would honour those commitments. I know it is difficult for
the construction unions to realize that their workers need jobs, but the
adjacency principle has been recognized and we need to adhere to it.
I hope, Mr. Speaker, that the Resource Development Council has good success
with the collective agreement that it has negotiated and is able to ensure that
their workers are treated properly under this agreement -
MR. SPEAKER: Order, please!
The hon. member's time is up.
MR. HARRIS: - and that it works successfully for both sides.
SOME HON. MEMBERS: Hear, hear!
Oral Questions
MR. SPEAKER: The hon. the Leader of the Opposition.
SOME HON. MEMBERS: Hear, hear!
MR. WILLIAMS: Thank you, Mr. Speaker.
Merry Christmas, Mr. Speaker. In the spirit of Christmas, we should all be on
our best behavior today, as a special gift to the Chair.
Mr. Speaker, my questions are for the Premier, if that is okay with the
Government House Leader.
Mr. Speaker, most agencies of the Crown do not have any requirement to report
to the House of Assembly on the discharge of their responsibilities. Yet,
approximately one-third of these agencies have bank indebtedness of $123
million. The management letters that were provided by the Auditor General, or
private sector auditors, listed the following very serious infractions:
Five Agencies did not comply with the Public Tender Act; two agencies
borrowed without authority; four agencies did not comply with legislation; and
dozens of agencies had instances of weaknesses in controls over capital assets,
in controls over purchasing of goods and services, of access to computerized
information, and weaknesses over collection of accounts receivable.
Mr. Speaker, would the Premier please explain to the people of the Province
how he can stand by and allow these Crown agencies to break the law and invoke
inappropriate accounting procedures day after day, month after month and year
after year?
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: The hon. the Premier.
SOME HON. MEMBERS: Hear, hear!
PREMIER GRIMES: Thank you, Mr. Speaker.
I very much appreciate the question from the Leader of the Opposition, and I
can indicate to him, quite clearly, that the Auditor General named agencies and
boards and so on. If the Leader of the Opposition wants to ask about a
particular board or agency or particular incident, then the minister responsible
here in the House will gladly answer the question in detail.
Aside from that, Mr. Speaker, as we have indicated, many of these same boards
and agencies, while there is no requirement for them to table an annual report
right here in the Legislature, they do table annual reports at their annual
meetings. They are public documents. Anyone in the Province who has an interest
in what a board or agency or commission has done has access to it.
Mr. Speaker, if there are particular questions, I am sure the ministers
responsible will gladly answer them.
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: The hon. the Leader of the Opposition.
SOME HON. MEMBERS: Hear, hear!
MR. WILLIAMS: Thank you, Mr. Speaker.
As the chief executive officer and as the chief officer of the Province, Mr.
Speaker, the people of the Province expect the Premier to be responsible and the
Premier to be accountable for these questions, and I would hope that he would
answer them.
Mr. Speaker, in an August 19, 2002 letter to all deputy ministers, the
Secretary of Treasury Board stated, "that for many departments documented
collection procedures for their particular programs did not exist or were
obsolete."
The Auditor General stated in the sixteen Crown agencies there were
weaknesses in the accounts receivable collection procedures, collection efforts
were inadequate, and government should be more diligent in collecting amounts
owed to it.
Mr. Speaker, would the Premier please explain to the people of Newfoundland
and Labrador, what he plans to do about the $488 million which is owed to
government, of which $260 million is deemed to be uncollectible? Will he
continue to ignore the concerns of the Auditor General when our accounts
receivable are more than our deficit of $473 million last year?
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: The hon. the Premier.
SOME HON. MEMBERS: Hear, hear!
PREMIER GRIMES: Thank you, Mr. Speaker.
I think the Leader of the Opposition knows that in the agencies that are
there, the staff, and in some cases with the boards and commissions the
volunteers that chair these things and sit on the boards, they are not law
breakers, Mr. Speaker, and I think it is a disservice to them to describe them
as such. They do the very best they can, Mr. Speaker, and we appreciate and
respect the views of the Auditor General in trying to be a bit more efficient
year over year. We take the advice seriously.
With respect, again, if there any particular ones - because it is unfair to
the people who run these agencies and corporations on behalf of the people of
the Province to just say there are sixteen of them and they have poor collection
records. They are named in the Auditor General's report. If the Leader of the
Opposition has specific concerns about any one of them, stand up and name them
like the Auditor General did and we will have the minister respond and give the
explanation and the rationale.
With respect to the money that is uncollectible and has been written off over
the years, maybe the Leader of the Opposition already knows that the $268
million that he talks about, the vast majority of that is fishery related
expenditures and loans that were granted while the Opposition was the
government, and have been uncollectible and are deemed as such. No misdoing, no
wrongdoing, just that when people like the Member for Lewisporte were Fisheries
Ministers, they supported the fishing sector because it is very important to
Newfoundland and Labrador. There has been a moratorium since, some businesses
have collapsed, the money is deemed to be uncollectible, most of it related to
fishing enterprises, and the loans were ones that were issued while the
Opposition was the government in the Province.
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: The hon. the Leader of the Opposition.
SOME HON. MEMBERS: Hear, hear!
MR. WILLIAMS: Thank you, Mr. Speaker.
Mr. Speaker, the Eastern Residential Support Board performs an extremely
important and a very much needed service to people with developmental
disabilities; yet, the Auditor General reports evidence of gross mismanagement,
inadequate monitoring and lack of financial information.
Mr. Speaker, the very basic obligations of any employer, whether within
government or otherwise, is a remittance of payroll deductions. Would the
Premier confirm that due to its failure to remit payroll deductions, the board
has incurred penalties to Revenue Canada of $150,000 and $6,700 respectively?
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: The hon. the Minister of Health and Community Services.
SOME HON. MEMBERS: Hear, hear!
MR. SMITH: Thank you, Mr. Speaker.
Indeed, the issue that the hon. member raises is an issue of concern. It is
an issue that, when we became aware of it - obviously, as the hon. member would
know, these boards do have a certain amount of autonomy but certainly we work
closely with them. These issues that are raised are of concern and we have been
working with the boards to correct these.
Mr. Speaker, I think what we have to remind ourselves as well is that these
boards perform a very important service. They are involved with providing a
service to a very vulnerable group in our population. They perform a very
important service. The boards themselves came about as a new structure that was
put in place around 1998, when a number of existing boards were collapsed, and
certainly situations like this, we are not happy when they do arise but we have
taken the necessary efforts to work with the boards to correct these and try to
ensure that this sort of thing does not happen in the future.
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: The hon. the Leader of the Opposition.
SOME HON. MEMBERS: Hear, hear!
MR. WILLIAMS: Thank you, Mr. Speaker.
Mr. Speaker, while acknowledging the very important service performed by this
board and other boards, the Auditor General is concerned, however, about the
lack of controls, the lack of accountability, and the lack of financial
reporting for these particular boards, and that reflects on this government.
Mr. Speaker, not only is this board doing a poor job in spending money but it
is also doing a poor job in collecting money. Could the Premier please explain
why the board, which is entitled to a 50 per cent rebate on all HST amounts that
are paid up to the time the Auditor General completed his study in October,
2002, why the board has never filed for this rebate since its inception in 1997,
despite being advised to do so by its auditors?
SOME HON. MEMBERS: Hear, hear1
MR. SPEAKER: The hon. the Minister of Health and Community Services.
SOME HON. MEMBERS: Hear, hear!
MR. SMITH: Thank you, Mr. Speaker.
In fact, again, these issues that have been highlighted in the Auditor
General's report are issues that we have been aware of, and these are issues
that we have acted on. In fact, I agree, in terms of the situation, it is a
situation that should not be allowed to happen or continue. When these things do
come to light - again, as I have said repeatedly in this House in my capacity as
minister with responsibility for a number of these areas - we cannot
micromanage. This is why we have boards that operate under us in delivering
these services, and we have to depend on these boards to do that. We provide
them with the resources and we do trust that they are going to deliver the
service on behalf of the constituents, or the people of the Province, as they
have been mandated to do so.
When situations do arise, we do move to try to correct these, and this is
another instance where, in fact, action has been taken, Mr. Speaker.
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: The hon. the Leader of the Opposition.
SOME HON. MEMBERS: Hear, hear!
MR. WILLIAMS: Thank you, Mr, Speaker.
Mr. Speaker, nobody expects government to micromanage, but they do expect
them to manage, and that is why the health care system has the problems that it
has. It is not only lack of resources -
SOME HON. MEMBERS: Hear, hear!
MR. WILLIAMS: - it is also due to very, very poor fiscal management.
Mr. Speaker, in January of last year, the position of general manager and
financial manager of the board was vacated at an annual salary of $60,000. The
following month, the same board hired a consultant to carry out the same duties,
at an annual cost of $140,000, nearly two-and-a-half times the original salary.
Mr. Speaker, would the Premier agree that this is a blatant waste of money
for over two years? Would he now instruct the Minister of Health to follow the
recommendations of the Auditor General and fill this position immediately?
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: The hon. the Minister of Health and Community Services.
SOME HON. MEMBERS: Hear, hear!
MR. SMITH: Thank you, Mr. Speaker.
I have to say that I certainly follow with interest this line of questioning.
I do take seriously the issues that are raised. It is rather interesting that
repeatedly in this House, in the last session of the House, on a daily basis, I
had the hon. members opposite rising and questioning an operational review that
we had funded, and condemning the fact that we were spending the money to do an
operational review to try to ensure that funds that we were making available to
our Health Care Corporation were being properly spent.
Just recently, within the last couple of days, the Health critic has been on
his feet criticizing the fact that we have, within the last few days, again
commissioned an amount of money to bring in someone with some outside expertise
to work with our people to deal with the various sorts of issues that the hon.
member is now referencing.
Mr. Speaker, it begs the question: Which way does the Opposition want it? One
day they are up talking on one side of their face, another day the other. I
would ask the hon. Leader of the Opposition today, which side is it? Which way
do you want it? You cannot have it both ways.
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: A supplementary, the hon. the Leader of the Opposition.
SOME HON. MEMBERS: Hear, hear!
MR. WILLIAMS: Mr. Speaker, this is just basic good fiscal management,
good common sense. Anyone would understand, that if you can save $140,000 by
putting back a $60,000 salary, that is just very simple. I do not need a
consultant to tell me that.
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: Order, please!
MR. WILLIAMS: Mr. Speaker, the Auditor General says that there are no
policies in place for selection of housing units, funding, rental terms or
conflict of interest situations. Mr. Speaker, the Auditor General has indicated
that, as a result of participating on a committee, a member became aware of the
board's intention to rent a housing unit, and subsequently the spouse of that
member purchased that unit and entered into a rental agreement with the board.
Mr. Speaker, would the Premier not agree that the purchase of a property with
inside information, and the subsequent rental of that property to a government
for five years at $28,200 a year, is very inappropriate behaviour and activity
for a government board?
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: The hon. the Minister of Health and Community Services.
SOME HON. MEMBERS: Hear, hear!
MR. SMITH: Thank you, Mr. Speaker.
Again, in terms of the issue that the hon. member references, indeed, we have
concerns when issues of this nature come to light and are brought to our
attention. Again, I have to say, as I indicated in an earlier response to an
earlier question, in fact that with these boards - and they do operate similarly
to a lot of the governance which we have in a number of our areas in the
Province in delivering of health care services - that we do provide these boards
with a certain amount of autonomy. We do, certainly, have expectations for them
and we do what them to deliver the service that they are mandated to do on
behalf of the constituents for whom they are providing the service. Situations
do arise and when they do arise we try to deal with them.
Mr. Speaker, I think it is wrong to (inaudible) from the point of view that,
in fact, all is out of control here, that nothing good is happening in these
areas. The real fear that I have when we get into that situation - not that we
do not need to ask the questions and demand accountability because I certainly
expect it of my officials and I think we need to provide it on behalf of the
people of the Province. I think we have to be very careful that we do not
undermine the good work that these boards are doing on behalf of the people of
the Province, because it is an important service. It is a service that has been
put in place to try to deal with a very real issue out there. The model that we
have right now, as I said -
MR. SPEAKER: Order, please!
I ask the hon. minister now to conclude his answer.
MR. SMITH: - is fairly recent, going back to 1998, and was put in place
to try to deal with a very real concern.
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: A supplementary, the hon. the Leader of the Opposition.
SOME HON. MEMBERS: Hear, hear!
MR. WILLIAMS: Mr. Speaker, this type of behavior would not be tolerated
in the private sector and it should not be tolerated in the public sector.
SOME HON. MEMBERS: Hear, hear!
MR. WILLIAMS: Mr. Speaker, can the minister confirm that the Eastern
Residential Support Board purchased a house for $92,500, spent $22,000 on
renovations, and then sold the House two years later for $65,000, or
approximately half of its original cost?
SOME HOME MEMBERS: Hear, hear!
MR. SPEAKER: The hon. the Minister of Health and Community Services.
SOME HON. MEMBERS: Hear, hear!
MR. SMITH: Mr. Speaker, again, as I have repeatedly stated in response to
questions here in the House with regard to the operations of the board and,
indeed, situations like this that, when we become aware of them, we have asked
the questions as well, we are not happy when situations of this nature arise. I
have to repeat that this minister, nor any department, has the ability to
micro-manage. When we are aware of concerns we certainly act on them and try to
see that they are redressed. That is what we are doing in this particular
situation, Mr. Speaker.
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: The hon. the Member for Ferryland.
SOME HON. MEMBERS: Hear, hear!
MR. SULLIVAN: Thank you, Mr. Speaker.
My question is to the Minister of Finance and President of Treasury Board.
During the four year period, from 1993 to 1996, under Clyde Wells, special
warrants were issued totaling $169.3 million, of which 21.8 per cent were issued
in March. During the last four years, since the last election, special warrants
were issued for $319.3 million, of which 86.4 per cent were issued in March. It
is unusual, Mr. Speaker, that emergencies or urgencies now occur almost
exclusively in March.
Will the minister agree with the Auditor General's reason, that this
happens because government tends to produce whatever financial result it
desires?
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: The hon. Minister of Finance and President of Treasury
Board.
SOME HON. MEMBERS: Hear, hear!
MS AYLWARD: Thank you, Mr. Speaker.
Mr. Speaker, the way government spending occurs is that there is a certain
amount of money allocated in a budget, you watch it over a period of time, and
if you know, say in January or February, that you are coming close to the end of
what you need to provide your service and that service is required to carry on -
oftentimes March, as everybody knows, is the end of our fiscal year, so it often
arises in March that we actually need to put more money into a program for a
continuation of a service, whether it is the drug program, Income Support
Program, or whatever it is. That is how it works.
The only thing that I can honestly confirm here is that, very often the
budget will come to a conclusion sometimes sooner than March, sometimes in the
early weeks of March or the last of February. Then, it goes through the process.
It has to go through Cabinet, at which point a decision is made based on an
urgent need put forward by the ministers of the various departments. It comes to
Cabinet and it is either approved or rejected for additional funding which then
follows the format of special warrants.
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: A supplementary, the hon. the Member for Ferryland.
SOME HON. MEMBERS: Hear, hear!
MR. SULLIVAN: Thank you, Mr. Speaker.
If we follow that reasoning, there have been two by-elections this year for
$160,000 unbudgeted, we should expect a Supplementary Supply Bill here to this
House today to approve that before the House adjourns.
A special warrant was issued for $720,000 for court recording that was
considered urgent by government. A special warrant was issued on March 15, 2002.
According to the Department of Justice, breakdowns and malfunctions were
occurring throughout 2001-2002 and some equipment was held together with rubber
bands and tape.
I want to ask the minister: Why was it urgent to issue a special warrant on
March 15, when this House sat on March 11, 12, 13 and 14? On Friday it was
issued, and we were back in the House again on March 19 until March 22. Where is
the urgency, Minister? A rubber bank broke on the morning of Friday, March 15?
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: The hon. the Minister of Finance and President of Treasury
Board.
SOME HON. MEMBERS: Hear, hear!
AN HON. MEMBER: If you are not careful, you are going to blow a gasket.
SOME HON. MEMBERS: Oh, oh!
MS J.M. AYLWARD: Your rubber band is going to break.
I have to say to the member opposite, who talked about a special warrant
coming before the House today, I have certainly looked at information, I have
spoken with the appropriate deputy, and we are looking to try to find savings to
achieve those necessary to get us through to the end of the fiscal year. So, we
are not going to issue a special warrant to cover off two by-elections when we
might find the money in the various sections of the Legislature. Members
opposite know there are various sections. It includes the Auditor General's
Office, the Children's Advocate Office and our own Legislature. So, before we
would, today, come forward at your suggestion, I say to the member opposite, to
issue a special warrant, we have to do due diligence and we have to look at all
the money and financing available. We are not in the habit, as he would suggest,
and obviously he would do, of writing a special warrant just because he thinks
he might need it. We are certain we need it before we issue it.
I will further say, Mr. Speaker, with respect to the issue from Justice, I
had a request brought forward to me, which I referred on, obviously, to Cabinet,
on the urgency of this matter, because -
MR. SPEAKER: Order, please!
I ask the minister now to conclude her answer.
MS J.M. AYLWARD: - we all believe it is quite important that the court
proceedings be adequately recorded, not only for posterity but, also, for the
actual procedures that need to be done -
MR. SPEAKER: Order, please!
I ask the hon. minister now to conclude her answer.
MS J.M. AYLWARD: - and we believe that they are deemed very important and
very necessary and urgent, as the member identified.
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: A final supplementary, the hon. the Member for Ferryland.
SOME HON. MEMBERS: Hear, hear!
MR. SULLIVAN: Thank you, Mr. Speaker.
The minister knew that Bonavista North was vacated in April and Conception
Bay South in August. How long do you need for due diligence? The end of the
fiscal year - that is months and months you know and, therefore, you should have
checked.
SOME HON. MEMBERS: Oh, oh!
MR. SPEAKER: Order, please!
MR. SULLIVAN: The House of Assembly was sitting from March 11 to March
27. On March 26, this House, including the Opposition here, approved an Interim
Supply Bill for $1.23 billion. Now, all of the amounts that were issued in that
month under warrants could have been included in that Interim Supply Bill to be
a part of the 2002-2003 Budget.
MR. SPEAKER: Order, please!
The hon. member is on a supplementary, I ask him to get to his question.
MR. SULLIVAN: Instead, government decided to break the law.
I want to ask the minister: Why didn't the minister include these amounts
in that Interim Supply Bill and, thus, abide by the law?
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: The hon. the Minister of Finance and President of Treasury
Board.
SOME HON. MEMBERS: Hear, hear!
MR. E. BYRNE: Answer that.
MS J.M. AYLWARD: I have no problem answering it. If you will give me the
opportunity, I am happy to answer it.
First of all -
AN HON. MEMBER: Answer it truthfully.
MS J.M. AYLWARD: Now, I take exception to the Member opposite for
Ferryland saying, answer it truthfully, because every answer that I give is
answered truthfully.
SOME HON. MEMBERS: Hear, hear!
MR. SULLIVAN: I didn't say that.
MS J.M. AYLWARD: I heard the member say it.
Every answer I give in this House is the truth, I say to the member opposite.
You judge your own questions, but I will judge my own answers.
Further I will say, Mr. Speaker -
AN HON. MEMBER: Tell the truth.
MS J.M. AYLWARD: I will give the truth, I say to the Member for
Ferryland, if you care to listen.
SOME HON. MEMBERS: Oh, oh!
MR. SPEAKER: Order, please!
The hon. the Minister of Finance.
MS J.M. AYLWARD: I will say to the member opposite that the Supplementary
Supply that we look for is in the year that it is expired. The Interim Supply is
in the new year. So, while we are pretty good on predicting what we will need in
our Budget, there are times, before the end of the year, where we have to spend
money -
AN HON. MEMBER: (Inaudible) put it in the Budget?
MS J.M. AYLWARD: The answer is because the Budget ends March 31, and when
you go to look for Interim Supply, you are looking for the first three months of
the next year.
AN HON. MEMBER: (Inaudible).
MS J.M. AYLWARD: That is right. I just wanted to explain the process to
the member from -
AN HON. MEMBER: Oh, I understand.
MS J.M. AYLWARD: I am not sure he does understand, because the questions
reflect otherwise.
SOME HON. MEMBERS: Oh, oh!
MR. SPEAKER: Order, please!
I ask the hon. minister now to get to her answer.
MS J.M. AYLWARD: Thank you, Mr. Speaker.
The questions asked reflect otherwise, that perhaps he does not understand.
Interim Supply is for the budget year coming. The Supplementary Supply on
special warrants is because there was not enough money in the previous year to
cover off all the costs. That is why we did it under Supplementary Supply. We
did not break the law, as the members speaks. We did it all within the
requirements of the timing put forward in the law and we followed it to the
letter of the law.
Now, what the Auditor General would say, it is not urgent. We beg to differ.
MR. SPEAKER: Order, please!
I ask the hon. the minister now to conclude her answer quickly.
MS J.M. AYLWARD: Health care, putting forward the money necessary in
Justice, in our view, was an urgent need, and we are the government and we made
that decision to put the money there, Mr. Speaker.
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: Order, please!
The hon. the Opposition House Leader.
SOME HON. MEMBERS: Hear, hear!
MR. E. BYRNE: Thank you, Mr. Speaker.
Mr. Speaker, all through 1998 and 1999, questions were asked in this House to
ministers opposite regarding the sale of Marystown Shipyard. In particular, the
record will show that questions were asked about what were the guarantees that
we had for transferring the assets. Government said that we had all types of
guarantees.
Mr. Speaker, in the Auditor General's report it clearly shows that this
Province sold the Marystown Shipyard for $1. We gave $86 million worth of assets
to a company called Friede Goldman for $1. We gave them $2.2 million more to
operate it and, not only that, we did not receive any security that if it went
bankrupt that those $86 million worth of assets were to come back to the
Province.
My question is this, for the Premier: Given the fact of your excellent
negotiating record with companies on our resources, how can you justify or try
to sell your ability to put together any type of deal for the people of this
Province?
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: The hon. the Minister of Justice and Attorney General.
SOME HON. MEMBERS: Hear, hear!
MR. PARSONS: Mr. Speaker, in regard to the Marystown issue, first of all,
this must be a blast from the past by the hon. the Opposition House Leader
because, as he is aware, there is certainly nothing new contained in the Auditor
General's report of this year concerning Marystown.
Let's go back for a minute. The hon. member talked about what this
Administration and this Premier might do in terms of a future. The Marystown
transaction was all about securing a future, a future for the people on the
Burin Peninsula.
SOME HON. MEMBERS: Hear, hear!
MR. PARSONS: There was a policy decision made by this Administration that
the best way to go to secure that future was in a fabrication yard rather than a
shipbuilding yard. There is nothing decided in that transaction that was
contrary to what government wanted and intended to do. They were not in the
shipyard business because there was a great opportunity with the Peter Kiewit
people to have a new industry so those people could have a new future, a
brighter future, and look forward to 2003 when you actually see the cutting
torches working in Marystown.
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: Order, please!
The hon. the Opposition House Leader, time for one quick supplementary.
SOME HON. MEMBERS: Hear, hear!
MR. E. BYRNE: Thank you, Mr. Speaker.
Nobody in this House, on this side or the other side, wants to put in
jeopardy the future of any fellow Newfoundlander and Labradorian, and to spin to
suggest it is unbelievable!
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: Order, please!
MR. E. BYRNE: Mr. Speaker, let me ask the minister this question where he
did not answer it. Let me ask the Premier this question. I will ask it again.
Based upon your excellent negotiating skills where you turned over $86 million
worth of public assets for $1, gave $2.2 million more to the people of the
Province without securing them if something went wrong, how can you, as leader
of the Province and Premier of the Province, try to sell any deal to the people
of the Province based upon what you believe is in the best interests of the
people of the Province?
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: The hon. the Member for Signal Hill-Quidi Vidi.
MR. HARRIS: Mr. Speaker, my question is for the Minister of Forest
Resources and Agrifoods.
SOME HON. MEMBERS: Oh, oh!
MR. SPEAKER: Order, please!
The hon. the Member for Signal Hill-Quidi Vidi.
MR. HARRIS: Mr. Speaker, my question is for the Minister of Forest
Resources and Agrifoods and has to do with the Auditor General's comments on
our $700 million forest industry.
Mr. Speaker, amongst the Auditor General's complaints, there have been no
annual reports from the department since 1999-2000, no aerial photography in
some districts since 1990 to determine inventory, that the paper companies have
been allowed to self report and monitor harvesting with no verification by the
department, that of the thirty-six five-year harvesting plans required to be
filed under the Environment Assessment Act, not one was submitted on time and
eleven have not been submitted at all, and that annual operating plans have not
be submitted on time or approved on time.
Mr. Speaker, given this indictment by the Auditor General, wouldn't the
minister agree that this Province's forestry management might more
realistically and properly be called forestry mismanagement?
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: The hon. the Minister of Forest Resources and Agrifoods.
SOME HON. MEMBERS: Hear, hear!
MR. WOODFORD: Mr. Speaker, I beg to differ with the hon. member.
We have - and it is not only recognized by this Province but recognized by
other provinces in Canada - one of the best forest management practices in the
country.
SOME HON. MEMBERS: Hear, hear!
MR. WOODFORD: Having talked about five-year operating plans and annual
reports, Mr. Speaker, every annual report by the companies or any integrated
system in the Province was in on time. The only ones that were not probably
submitted on time, or had some lapse in reporting, was by the Crown itself.
Every other report was in.
The planning process, Mr. Speaker, with regard to the plans, the 1999 plan,
was already out. The 2001 plan has already been printed and, in fact, last year's
plan is at the printers now to be printed.
With regard to aerial photography, there are all kinds of ways of dealing
with the AACs and looking for plans and five-year plans in this Province. We do
not have a policy on aerial photography in the Province. There is a
three-pronged process in this. You do a lot of ground work, you do some other
mapping besides that. That is the type of system we use in this Province. It is
not altogether different from a lot of the other provinces, Mr. Speaker.
MR. SPEAKER: Order, please!
I ask the hon. the minister now to conclude his answer quickly.
MR. WOODFORD: Based on our AACs that we have in the Province, and the
recognition by other provinces, it is one of the best forest management
practices in the country.
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: A supplementary, the hon. the Member for Signal Hill-Quidi
Vidi.
SOME HON. MEMBERS: Hear, hear!
MR. HARRIS: Thank you, Mr. Speaker.
Given the fact that the Annual Allowable Cut has gone down 27 per cent since
1985, and the Auditor General blames it on a failure of reforestation and
silviculture programs to produce results, and under-reporting of harvesting by
150,000 cubic metres or more and overcutting of the resources, are we not facing
in our forestry industry the same danger that the cod faced in becoming extinct?
Is that not the problem that we face in our forest industry, the danger of
potential extinction?
MR. SPEAKER: The hon. the Minister of Forest Resources and Agrifoods.
SOME HON. MEMBERS: Hear, hear!
MR. WOODFORD: Mr. Speaker, since I became minister in this department,
and since we have been dealing with AACs and five-year plans and one-year
permits and so on, that is one thing we are not doing. Every day - not in this
House, but just about every week - we get requests for AACs, to increase the
AACs. I get it every day in my office, to increase quota somewhere in the
Province. Mr. Speaker, we are not going to do it. It is easy to say yes. It is
easy to be all things to all people and issue permits. We are not doing that, to
try to avert the same thing as the member alluded to with regard to the fishery.
We have an excellent forest management process. Our AACs are based on good
management practices, good information, and there are other things to take into
consideration when you talk about AACs.
MR. SPEAKER: Order, please!
I ask the hon. the minister now to conclude quickly.
MR. WOODFORD: This was recognized not yesterday but some twenty-five to
thirty years ago. We are addressing that problem and right now we have our AACs
in line with a good forest management process in this Province.
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: Question Period has ended.
Presenting Reports by Standing and Special Committees
MR. SPEAKER: The hon. the Minister of Finance.
MS J.M. AYLWARD: Thank you, Mr. Speaker.
I would like to table today the Annual Report of the Newfoundland and
Labrador Municipal Financing Corporation.
MR. SPEAKER: The hon. the Minister of Justice and Attorney General.
MR. PARSONS: Mr. Speaker, I am pleased today to table copies of the
Annual Work Plan Reports of the twenty Regional Economic Development Boards in
the Province, as well as new five-year performance contracts for thirteen of the
REDBs.
We are still in the process of finalizing new five-year performance contracts
for the remaining seven boards. Their existing performance contracts were tabled
in this House by the hon. Ernest McLean on December 14, 2000, and I will table
the seven new contracts immediately upon their being finalized.
These documents will provide valuable information to all members of the House
on the important work being undertaken by the twenty Regional Economic Boards in
this Province in strengthening the economy in all regions of this Province in
partnership with government.
Thank you, Mr. Speaker.
Petitions
MR. SPEAKER: The hon. the Member for Bonavista South.
SOME HON. MEMBERS: Hear, hear!
MR. FITZGERALD: Thank you, Mr. Speaker.
I rise again to present a petition to the House of Assembly, and hopefully
this will be the last time presenting this petition to that crowd over there.
SOME HON. MEMBERS: Hear, hear!
MR. FITZGERALD: Mr. Speaker, the petition reads: To the hon. House of
Assembly of Newfoundland and Labrador, in legislative session convened, the
petition of the undersigned residents of Newfoundland and Labrador;
WHEREAS Route 235 from Birchy cove to Bonavista has not been upgraded since
it was paved approximately twenty-six years ago; and
WHEREAS this
section of Route 235 is in such a terrible condition that school
children are finding their daily trips over the road very difficult.
WHEREFORE your petitioners urge the Government of Newfoundland and Labrador
to upgrade and pave the approximately three kilometers of Route 235 from Birchy
Cove to Bonavista.
And, as in duty bound your petitioners will ever pray.
Mr. Speaker, this is another one in a series of petitions that has been
brought forward regarding a
section of roadway where there has been a feeble
attempt for the past four years by this administration to try to upgrade and
repave one of the main roads leading into the Town of Bonavista.
Mr. Speaker, at this particular time of year I am getting a lot of complaints
from people calling saying that the road is in such bad condition that the
operators, the snow clearing operators, and
the snow clearing equipment is unable to even remove the snow off the road.
When the grader, or when the loader, passes over that particular
section of road
there are still three or four inches of slush left on the road because of the
condition of the road, the way it is tipped and the way the service is put
forward there through the continual upgrading, of having to put gravel almost in
the centre of the road in order to make the road allowable for driving over.
Mr. Speaker, as I have said, this is one of the main roads leading into the
Town of Bonavista. It is a route that is used continually in the summertime by
the tourist trade going to that particular
section of the Province. The only
complaint I hear - people talk about the hospitality of the people, they talk
about the beauty of the area, they talk about the services in the area, they
talk about the service that is available for accommodations - the only complaint
I get is the condition of the roads.
The Minister of Tourism talks about the rubber tire traffic coming to the
Province. The rubber tire traffic comes, some of it goes up the Northern
Peninsula, a lot of it goes to the Bonavista Peninsula, one of the tourism focal
points of the whole of the Province. Mr. Speaker, as they go down Route 230,
come up 235 in order to make the loop around the Bonavista Peninsula, this is
the
section of road that they have to drive over.
School children travel this particular
section of road everyday in order to
go to the schools in Bonavista.
MR. SPEAKER: Order, please!
The hon. member's time is up.
MR. FITZGERALD: By leave, Mr. Speaker, just to clue up?
MR. SPEAKER: Does the hon. member have leave?
AN HON. MEMBER: Yes.
MR. SPEAKER: By leave.
MR. FITZGERALD: The people in this area, Mr. Speaker, have made it a
priority. It is where they want to see government focus their attention on
roadwork in this coming construction season. I ask the government to pay
attention to the people's wishes and upgrade and completely repave this
section of Route 235.
SOME HON. MEMBERS: Hear, hear!
MR. SPEAKER: The hon. the Member for St. John's West.
SOME HON. MEMBERS: Hear, hear!
MS S. OSBORNE: Thank you, Mr. Speaker.
I have a petition to present.
To the hon. House of Assembly of Newfoundland and Labrador, in Legislative
Session convened:
The petition of the undersigned residents of Newfoundland and Labrador.
WHEREAS eight Chancellor Park residents are waiting for the government to
decide whether they will be displaced from Chancellor Park and from the Province's
home care system now that their money has run out or if the government will
instead step in to assume the costs of their care; and
WHEREAS these residents, who are especially vulnerable because of their
advanced years and frail health, did not anticipate being left in this uncertain
position and are distraught that they may be displaced from their home;
WHEREFORE your petitioners urge the Government of Newfoundland and Labrador
to show compassion in these particular cases by finding a solution that will
allow these residents to remain in their home at Chancellor Park.
And as in duty bond your petitioners will ever pray.
Mr. Speaker, the people who have placed their names on this petition, in
particular on behalf of the eight people - and the majority of these eight
residents involved were on waiting lists for a long period and they were
unsuccessful in obtaining placement in one of the public long-term care
facilities. They needed some care, and so they found themselves having to go to
Chancellor Park. In fact, at least one of the residents that is involved applied
for the single entry wait list in November, 2001, was approved in April, 2002,
and is now on the list for 250 days, or more than nine months. So, basically,
what they are saying is that in many instances they did not have a choice but to
go to Chancellor Park, they have now run out of money, and there is actually a
shortage of beds in the Province.
In 2001-2002, there was a projected surplus of 131 beds, when actually, in
2001- 2002, all 1,015 beds were, in fact, occupied and there was a long waiting
list. In 2002-2003, there is a projected surplus of 111 beds. In fact, on
October 16, 2002, all 1,015 beds were occupied and there were 166 Level III
residents on the waiting list.
Basically, what the people who have signed this petition are saying, and the
people that they have signed it on behalf of, is that many of the people
involved found themselves with no other choice but to go to a facility like
Chancellor Park. Unfortunately, they have run out of funds and now find
themselves in this position. Basically, they do not want to have two or three
moves -
MR. SPEAKER: Order, please!
The hon. member's time is up.
MS S. OSBORNE: Can I have time to clue up, Mr. Speaker?
MR. SPEAKER: Does the hon. member have leave?
AN HON. MEMBER: By leave.
MR. SPEAKER: By leave.
MS S. OSBORNE: They do not want to find themselves at their age, with
such frail health, having to make two or three more moves before they have a
permanent placement.
Thank you, Mr. Speaker.
SOME HON. MEMBERS: Hear, hear!
Orders of the Day
MR. SPEAKER: The hon. the Government House Leader.
MR. LUSH: Motion 2, Mr. Speaker, Bill 21.
On motion, that the House resolve itself into a Committee of the Whole, Mr.
Speaker left the Chair.
Committee of the Whole
CHAIR (Mercer): Order, please!
Continuation of debate on a resolution to implement Bill 21.
The hon. the Member for Baie Verte.
SOME HON. MEMBERS: Hear, hear!
MR. SHELLEY: Thank you, Mr. Chair.
I certainly want to rise today to add a few last comments, I guess, to this
particular bill. We did spend some time a couple of days ago on this particular
bill and, of course, my colleague from Ferryland has made numerous points on
this particular bill. We will not prolong it for much longer, Mr. Chair, but I
do want to stand today and make a few more comments that I did not finish a
couple of nights ago.
Mr. Chair, actually, I was concluding the other night, when I ran out of
time, the point on exploration, because that is what this bill is all about,
exploration. For anybody who has lived in any area of the Province where they
have seen exploration and the effects of exploration, as I have, then they
understand it thoroughly.
In the late 1980s, when I was living in Baie Verte, and still am today, the
flow through shares from the federal government encouraged a lot of exploration
throughout the Province. As a matter of fact, I had just moved back to Baie
Verte at the time and found that exploration had picked up tremendously. You
could see the effects of it throughout the community. You have to remember
something about explorationists, if you know them well - my brother worked with
one particular company at that time - they are the type of people who go into
the woods and they are hidden. They are the quiet workers. You do not see
explorationists a lot, because they are under trees and rocks and looking. That
is what their job is. It is a very quiet job and, for the most part, Mr. Chair,
what you have to understand, if you know the industry, is it is a quiet job and,
at the same time, they always have this hope that they are going to find
something because it is a risky business.
The minister spoke about risk the other day and talked about finding these
explorationists, who are in the field doing the work, hoping that if they have
something to bring back, they are going to be able to excite somebody to fund
them so that they can go further. Exploration starts from just trouncing around
the woods. If anybody has read anything on mineral development and so on, even
with IOC in Labrador, Tilt Cove on the Baie Verte Peninsula, Little Bay, some of
these older mines, you will find through the history books a good story of the
explorationists. You will find a story about the person who first walked into
the back woods of Labrador or throughout the Island portion of the Province. You
will find a good story about explorationists.
The same in this Province, Mr. Speaker. I knew in the 1980s, when I saw
through the flow through shares in Ottawa, the encouragement for exploration in
this Province. In the community I lived in, I saw it firsthand. The gas stations
were busy. The hotels were full because there were explorationists from all over
the Province. In that particular part of the Province, which I know best, the
Green Bay-White Bay area, to this very day, if you ask somebody in the mining
department, they will tell you that it is probably one of the most exciting
parts of the Province for exploration.
With our history - and you just have to go back and look through the history
books and come to the White Bay-Green Bay area and look at the history, and you
will find out about Betts Cove, Goldenville, Tilt Cove; Tilt Cove, which today
has a population, Mr. Chair, of around fifteen people. I have pictures of Tilt
Cove that shows you where there was a bowling alley, a post office, buildings
throughout. This was, back in those days, a very prosperous community and there
was a great story behind that, on how somebody walked through the wilderness and
found a rock or found something and that is where it grew from. The point being,
that is where exploration starts. That is what is so important. Nothing else
starts until that starts. That is the key to it all.
Mr. Chairman, we all remember the discovery of Voisey's Bay and how in this
Province it started a surge of exploration throughout the Province, especially
in Labrador, in the Voisey's Bay area, and how exciting it was, and all not
just directly to the explorationists but the spinoff. That is why I call it the
silent job, the quite job, the people fifty miles out in the outback of
Newfoundland, you can say, or the outback of Labrador, who are just picking
away. If some of you have read the story on Voisey's Bay, they talk about how
they went over it and over it and saw this rusty rock. That is all it started
with. Then, lo and behold, we see the development that we see today.
What we have to also remember is, because exploration starts it off, that is
where we have to begin, the chances are very low of discovery. Over 90 per cent
- I forget the exact statistic - over 90 per cent, it is safe to say, of
exploration work that goes on turns up nothing. That is why it is high risk. It
may not be high risk to the prospector of the day, at the time, but it is high
risk in the fact that that prospector, who is just doing his field work, working
on a very low budget, not making a lot of money, has to go out and he has to
prove, encourage and entice investors to take a chance on what he has found.
Because, after you first hit the rock, it does not all come into play. Then
there is dredging, then there is drilling.
I remember all the activity in Springdale with the drilling companies that
were there, hiring people all over the place. Anybody who was in the Green Bay,
Baie Verte, Springdale area at the time saw the activity going in the last
1980s. It was exciting and it was spinoff. That is why a lot of times in this
Province that particular industry is not noticed or recognized until they hit
something big. To this very day - as a matter of fact, I have just spoken to an
explorationist in my district right now who, hopefully, in the very near future
- as a matter of fact, in the new year, has attracted an investor to continue
work on a property that looks very exciting.
Now, I do not know if members in the House know people in the exploration
industry very well, but to see these people and their passion for exploration.
As a matter of fact, Mr. Chairman, I had a little bit to do with exploration in
the early years. In my first year in university, I started as a geologist. I
switched later to education - sometimes you wonder if you did the right thing -
but as you met people in that particular course, and their love for the
wilderness, and being outside, and minerals and everything, it is a whole new
group of people who find this exciting. Their passion in life is to find that
motherload. That is what it is all about.
When Voisey's Bay was discovered, talk to any junior explorationist in the
Province, any junior company, and what that did - a lot of those were asleep at
the time - it brought them back to it. We know, through the history of geology
and the geology of this Province throughout Labrador and Newfoundland, that we
have some very good prospects. I am excited because I am hoping in the new year
we are going to here some great developments.
My area of the Province had the very first gold producing mine, and right now
we have the only gold producing mine in Newfoundland and Labrador, and we are
very excited about that. Right now in King's Point, Hammerdown, they are still
exploring in that area. Everybody - and I say this to all members in the House
today, because I have heard some different things in debate and sometimes, I
guess, rhetoric takes over and we do not say what we really want to say, but I
have heard different times about us getting our value from our resources. I do
not believe there is one member in this House who does not want full and fair
share of benefits from our resource.
Now, without a deal on Voisey's (inaudible), that is an issue that we have
spoken on and will continue to speak on, but at the end of the day every person
in this House, I believe - I respect that - every member in this House wants the
best value we can get from our resources. The people in King's Point today,
with the only operating gold mine right now in this Province, just adjacent to
their very boundaries, now, with the Minister of Municipal Affairs, have a
request in to extend their boundaries to take in that gold mine, and they want
their fair share.
The people of King's Point have been rational, reasonable people, who saw
that a company would be next door to them, and right now, hopefully, they are
asking a request, through the Minister of Municipal Affairs, for an extension of
that boundary. All they are saying is that we want our fair share from the
resource - a resource right now that is being mined by a company in Richmond,
Quebec, that is mining there right now. Hopefully - and we all want this - we
want the company and the people adjacent to that resource to live in harmony and
work together in partnership, so that everybody gets a fair share. That is all
we have been asking. That is all the people of King's Point, Rattling Brook,
Harry's Harbour, all that area, are asking for. They are all being affected by
the mining operations there.
That is a good example for the Province of saying to the government that we,
as a people in the Province, believe we should get a fair return of our
resource, something reasonable, that is fair. I do not think the people of King's
Point are asking for something unreasonable.
I am hoping and believing and trusting that the company that is there now,
that has been there in Nugget Pond and now operating and mining, actually, in
Hammerdown, are going to co-operate and they are going to get together and we
are going to work something out here for the benefit of everybody. The Mayor of
King's Point wants good things for his town, the same as the mayor of any
community in this Province, so they will have decent roads to drive over, decent
water systems. That is what is all about. A fair resource - I think all of us in
this House, and every single person in this Province, are just asking for their
fair share of a resource that is going to be developed.
Another important thing to remember about mining, we have said it so often
but it is a fact - because I grew up in a mining town - the day that mine opens
is the day it begins to die. So let's get our fair share of the resource while
it is ongoing.
With that in mind, because a mine shuts down over a period of time, that is
why I say today and emphasis the importance of exploration, the importance of
the person on the ground, the person in the field doing that exploring and
looking for minerals in our Province, that is going to benefit every single
Newfoundlander and Labradorian.
It is strange, Mr. Chairman, but just the other day I talked to a person in
the exploration industry who gave the same analogy of the fishery. He said: The
fishermen in this Province warned years ago about the negative implication of
overfishing and the problems in the fishery. Today, we are warning. We are the
people in the industry. We are the explorationists. We are the ones out there
day after day looking and looking, so we are the ones who know the industry
best.
Letter after letter to the government and to the Premier has emphasized that
this change will be a negative impact on the mining industry in this Province.
That is the problem.
AN HON. MEMBER: (Inaudible).
MR. SHELLEY: Now, the Minister of Fishers says no, and I am not going to
get back and forth today with the minister. I am standing and making my points,
and I am going to have a few minutes to do it. If the minister wants to stand,
he can.
All I can tell the minister, or any member of government, or any member on
this side of the House, the people in the industry -
CHAIR: Order, please!
The hon. member's time is now up.
MR. SHELLEY: To conclude?
CHAIR: Does the member have leave to continue?
AN HON. MEMBER: (Inaudible)
MR. SHELLEY: I will get back up if the minister is going to sit me down.
I will get back up.
AN HON. MEMBER: (Inaudible) if he wants.
CHAIR: By leave.
MR. SHELLEY: Do I have leave, Mr. Chairman?
CHAIR: By leave.
MR. SHELLEY: I will get up again and go another ten if the minister wants
me to.
The point being today, Mr. Chairman, because we have made the specific points
on the taxation and how much, and there were things thrown back and forth about
20 per cent, it is not 20 per cent. It is 20 per cent on top of 37 per cent. It
is 57 per cent. That is the bottom line. To get away from that for a second - we
have covered those issues - what I am getting to is the analogy that the
fishermen drew to this, the analogy that the fishermen were saying back years
ago: We know the industry best. Let us have our say. We know what the negative
implications are.
Well today, Mr. Chairman, letter after letter, phone calls I have had over
the last number of days, speaking to people in the industry, the people who are
going in the wood and tapping rocks and looking for the minerals, they are
saying, with no doubt whatsoever, that this will be having negative implications
and ramifications for the exploration industry in Newfoundland and Labrador.
Now, Mr. Chairman, it is either the government is right in saying that there
are no negative implications, or do we believe that the people in the industry
know what they are talking about, and there are negative implications? All I can
say today is - because we are standing here today with our last few comments -
the reality is this: This will be law soon. This will be law very soon, and I
hope that the explorationists are not 100 per cent sure and that we will see
other big major exploration developments in this Province. I hope that happens,
but I hope that we do not have to come back in two, three and four years from
now and find out that, at the end of the day, exploration certainly has had a
negative setback, that it was a negative setback.
Mr. Chairman, just a couple of things. For example, over the number of days
of debating this, Bill 21, it has been called a royalty tax, fugitive tax, the
John C. Doyle tax. It is a mineral rights tax. To really simplify it and get it
down to this, the only difference - and they talked about how it is not a new
tax. No, it has been on the books but it has never been a prospector tax. The
fact is this: There is no net gain to the Province, none. The only difference is
that you would be taking it from the prospectors and not Inco. Now, what is
Inco? Inco is a major multi-billion dollar company. Good for them; we are glad
to see prosperous companies in our country. There is no problem with that, but
we are talking about a company who is going to extract from this Province at
least - and let's be conservative and say - $15 billion worth of nickel. Now,
I think that is the ovoid. We am not talking about underground. We are talking
about billions and billions of dollars.
Mr. Chairman, just for the record today, I want to make sure that I made note
of this, I am still not so sure that we are not getting full and fair benefit
from the copper that is in Voisey's Bay, which we raised some three or four
years ago and which analysts are still saying could be a viable possibility for
copper development in this Province. So I do not know if we did get our fair
share, which is an issue for another day, but it is something that we brought up
as a concern a long time ago.
The bottom line is that there is no net gain to this Province. The only thing
here to simplify this whole thing, it has been switched around. If there was no
third party involved in Voisey's Bay, there were no prospectors, Inco would
pay. Mr. Chairman, over the life of it - and this is the calculation I have
seen; I trust it is accurate - if Inco was to absorb the mineral tax right,
their effective tax burden would increase by approximately .48 per cent, and it
would still remain the lowest tax in Canada.
AN HON. MEMBER: In Canada.
MR. SHELLEY: In Canada. So where have we really switched this?
I would be glad to hear the minister's calculation on this, that it is not
correct. That is the calculation I have. I do not profess to be any expert on
taxation, but that is the calculation we have. Less than a half per cent would
be on Inco over the life of that.
Mr. Chairman, this is not about Archean. This is about the future of
exploration in Newfoundland and Labrador. This is about all those people out
there who got excited for Archean and everybody else who are in their industry,
because they are one of very few and were lucky. That is what it comes to in
mining a lot of times - luck - where you go, where you hit the next rock. That
is what it all comes down to. In this Province, for people who go in the
wilderness, it is a vast area on the Island portion of Newfoundland. Go out in
the middle of Central Newfoundland where there is exploration going on as we
speak today, and you will see explorationists out there in the field. Then go to
Labrador, the big land, where there are so many possibilities, but all of those
possibilities are going to slow down - hopefully never stop, but probably slow
down - because of this piece of legislation. I hope that does not happen. I hope
that when this is all said and done that the explorationists - and these letters
that we have gotten over and over and over from different companies that are
outside Newfoundland now looking to come here and explore. I will just give you
an example of a couple of them today.
This is from Candor Ventures Corporation, which wrote the government
expressing their concerns, which said, "As the President of a Toronto-based
junior mining company, I must decide where in Canada my company's exploration
budget will be spent. In that respect, I am exactly the type of person that you
should be appealing to since my decision could result in hundreds of thousands
of dollars ultimately being spent in Newfoundland."
Mr. Chairman, these are the types of companies that say, when they look to
Newfoundland - they have been here before, this particular company. As a matter
of fact, they are active here in Newfoundland right now, today. They are going
to make decisions on tax regimes - sure, that is just an obvious thing for any
business - and what the possibilities are in the Province. It is common sense.
When they are telephoned by an explorationist or a geologist in this Province to
say they have something that is interesting, they have to convince these people
to come here and spend the money to develop this whole idea and then they have
to convince their investors that this is worthwhile. That is where the risk lies
and anybody in exploration knows that.
Mr. Chairman, Voisey's Bay was a big boost for this Province, no doubt. It
is a big boost for the people in the industry. What we are concerned about - and
we make no apologies for it. We have raised the concerns that were raised,
specifically, by the people who know the industry best, the people who live and
die by the industry.
Mr. Chairman, we hope that by the end of this day we will see positive
impacts in the exploration industry and that this will not be a deterrent to
this Province.
Thank you, Mr. Speaker.
SOME HON. MEMBERS: Hear, hear!
CHAIR: The hon. the Member for Signal Hill-Quidi Vidi.
MR. HARRIS: Thank you, Mr. Chairman.
First of all, I want to say that I am surprised to hear that almost all of
the debate during this Mineral Tax Act debate has been about the royalty tax to
Archean Resources. Almost all of the debate that we have heard has been
criticism of that particular tax and very little on the overall affect of the
Mineral Tax Act itself.
I want to sort of repeat, first of all, what I said the other night in second
reading, that we get very little as a percentage of our provincial tax revenues
from mineral and mining resources, our natural resource taxes and royalties
constituting around $50 million, when personal income tax is ten times that, and
when provincial sales tax is ten times that. Actually, income tax is twelve
times that, around $600 million, sales tax is around $530 million and other
taxes, including lottery taxes, are almost double what we get from our mineral
resources.
To me, Mr. Chairman, that is what the analysis of this legislation has to go
by. What are we getting out of our mineral resources? We know what Mr. Verbiski
and his partner Chislett are getting out of the ultimate resource. They are
getting 3 per cent of the net smelter royalties. Are we getting that much? Are
we getting 3 per cent? I am not sure, Mr. Chairman. I am not sure we are even
getting that much ourselves as a guaranteed return on the Voisey's Bay, in
particular.
AN HON. MEMBER: What do we get from Diamond Fields?
MR. HARRIS: The member says: What do we get from Diamond Fields? I think
we got a big goose egg from Diamond Fields, Mr. Chairman, a big goose egg. They
sold that resource to Inco for some $4.5 billion and the Province of
Newfoundland and Labrador got nothing for its resource. That is the resource of
the people of Newfoundland and Labrador.
When I hear the Minister of Finance talking about, we do not mind taxing Mr.
Chislett and Mr. Verbiski because that is what we get for our resource, my
question is: What are we getting from the resource from the people who are
developing it, other than the jobs that we are going to get to dig it out of the
ground and send it away to be refined and, hopefully, brought back to be
smelted? That is what we are getting. We are getting the jobs to take our
resource out of the ground and see it go out of the Province. The question then
becomes: What is our royalty? If Mr. Verbiski's and Mr. Chislett's royalty
is 3 per cent, what is the Newfoundland government's royalty? I asked the
Minister of Finance that the other night when she was speaking and she has yet
to answer me. She said: I do not know, I will find that out and I will tell the
minister, if it is not a secret.
So, Mr. Chair, I do not think we are getting a royalty from Inco out of this.
I think the royalty that we are going to get, or whatever we are going to get by
way of royalty, is by way of taxes, by way of this Mineral Tax Act. We have to
look at the adequacy of that in terms of whether we are going to get our fair
share. The reality is that this regime is not based on the value of the mineral
coming out of the ground nor is it based on the value of the final product. It
is a regime that is based on the profit that the company makes after all the
deductions, including a deduction for what they pay to Mr. Verbiski and Mr.
Chislett.
Now, let me deal, first of all, with that particular tax and that particular
royalty. My colleague from Labrador West has spoken eloquently on this a couple
of times over the last number of days in this debate. One of the points that he
made was that people come to explore not where the taxes are low. They are not
exploring for taxes. Explorationists and geologists and prospectors, they do not
look at the fiscal map and say: Where are the taxes the lowest?. I think I will
go and try and find the minerals where the taxes are low. They go and try and
find some minerals where the prospects of finding the minerals are high. We know
from the geology of this Province that the chances of finding minerals are very,
very high in this Province. We saw, of course, the find in Voisey's Bay, six
or seven years ago, which is one of the biggest finds in modern history in
Canada. So, people are going to go where the chances of getting the finds are
greater, not where the taxes are lower. So, I think, that point is well taken.
The second thing that has to be said is that this find was made during this
tax regime, that if what is being alleged was true, then this would never have
been found in the first place. They would have been exploring somewhere else.
They would be exploring in some tax haven. If they were exploring in a tax
haven, Mr. Chair, they probably would not have found what is now the Inco find
up in Voisey's Bay. They would have been exploring in some tax haven and not
in a place like Newfoundland and Labrador where this tax was in place when the
discovery was made. So, the logic does not really work.
Having said that, Mr. Chair, I do not think we are getting enough out of our
mineral resources. We are not getting a guarantee of anything from the Mineral
Tax Act with respect to Voisey's Bay. In fact, we have done the same thing
with this legislation as we have done in the offshore. We have a tax, after, on
income and profit which makes us, essentially, partners in the profit with our
own resource, instead of being, as the owners of the resource, paid upfront.
That would be like, Mr. Chair, if you happen to own a commercial premises and
somebody wanted to run a business out your commercial building, you have a
commercial building or a shopping mall, and you are going to say to somebody:
Well, we will not charge you any rent but if you make any money operating out of
our shopping mall we will take a small percentage of it. We will let you deduct
all your expenses, we will let you deduct all your costs, we will let you deduct
all your taxes, we will let you deduct everything else that you do and, in fact,
we will let you deduct all the money that you spent trying to find where you
were going to put your store in the first place. Then, if you make some money we
will take a small percentage out of it. We will undertake the whole cost of the
building and putting the building there and maintaining the building. We will
share the risk with you even though we are the owner of this building or this
mall.
That is the analogy that I want to make, Mr. Chair, with respect to this
Mineral Tax Act. We are the owners of this resource. We have seen it traded for
over $4 billion out of which we got nothing, yet we are the owners of this
resource. We are now seeing it developed and if there is a profit to be made,
and I hope there is, but if there is a profit to be made we will get a
percentage of that. We will not get a guarantee based on the dollar value of
each tonne of ore that goes out, based on the dollar value of each tonne or
pound of nickel that is produced, we will only get a share of the profits based
on formulas that are spelled out in this act.
After all the deductions are made, all the taxes that they pay the Government
of Canada, all the taxes they pay elsewhere, all the exploration costs, all the
costs they paid to Diamond Field Resources, I am sure, will be part of the
deductions that they make before they make a profit on this particular
enterprise. That is something that I find abhorrent, Mr. Chair, that this
resource which we, as the owners in Newfoundland and Labrador, are making
available to Inco we are only shares in the profit, we are not considered to be
in receipt of a guarantee of a portion of the value of the resource.
That is what a royalty is, Mr. Chair. That is what Mr. Verbiski and Mr.
Chislett negotiated with Diamond Field Resources at the beginning. They
negotiated a royalty. A royalty is a percentage based on the ownership of the
resource. That is what the partners in Archean are getting, they are getting a
royalty share and we are taxing that. We may, in fact, be getting more. There
maybe years, and certainly the first few years of operation we may, in fact, be
getting more from Mr. Verbiski and Mr. Chislett by way of tax than we are
getting from Inco. That is a shame, Mr. Chair.
That shows that this regime -
MR. NOEL: How can you do that?
MR. HARRIS: How can you do that, the minister says. How can you do that?
You can do that, Mr. Chair, because we are guaranteed. Mr. Chislett and Mr.
Verbiski are guaranteed to get money based on the value of the product. That
product will be produced for years without a recognizable profit for the
Government of Newfoundland, to get its share of without any taxable income. The
royalty that is paid to Verbiski and Chislett is paid regardless of profit, as
part of their cost of production. Their cost of owning the mine and operating
the mine is to pay the royalty to Mr. Chislett and Verbiski. We will get some
tax off that because we are going to tax them at 20 per cent of whatever it is
they get.
With respect to Inco itself, we are only taxing based on the profit that they
have. So they could have no profit in a particular year, yet pay Mr. Verbiski
and Mr. Chislett on their royalty.
AN HON. MEMBER: (Inaudible).
MR. HARRIS: The minister can speak on this debate if he wants. The
minister is asking a question. The question is whether or not Mr. Verbiski and
Mr. Chislett are entitled to their royalty payment whether or not Inco makes a
profit, and the answer is that they are. They will get their 3 per cent
guaranteed because they come off the top. Their percentage comes off the top and
we get 20 per cent of that as our tax. But, if there is no profit, there is no
income, there is no taxable income, the people of Newfoundland and Labrador get
nothing. That is my very point, Mr. Chairman, that we only get a tax on the
income, the profit and the taxable income that Inco makes, and Verbiski and
Chislett get their percentage regardless, because it comes right off the top and
we get our percentage of that.
There may be years, Mr. Chairman, when Mr. Chislett and Mr. Verbiski are
getting more than all the people of Newfoundland and Labrador and we are only
going to get 20 per cent of that. I have not heard a word of criticism about
that. I think that Mr. Chislett and Mr. Verbiski should pay their taxes, but I
think that Inco should pay their fair share, too, and we should get a royalty
from Inco, not -
CHAIR: Order, please!
The hon. member's time is up.
MR. HARRIS: If I may have a couple of minutes, Mr. Chairman, to clue up.
AN HON. MEMBER: Yes.
MR. HARRIS: In addition to our taxes on profit, in addition to our mining
taxes, we should also be getting a royalty payment based on a percentage of the
value of the mineral itself. It happens in Alberta, Mr. Chairman, on a barrel of
oil. On a barrel of oil, the provincial government in Alberta gets something in
the order of $4 a barrel as a royalty because they own the oil. What do we get
here in Newfoundland and Labrador? Well, we get a percentage of the profits,
after all the expenses are taken out, after all the capital costs are amortized,
after all the operating expenses are taken out. If there is a profit left over,
we will get a small percentage of that as our payment.
That is the same legislation that is before the House now; it is doing the
very same thing to the mineral mining tax operation of the Province. This is
even after the tax holiday that has been agreed to. In 1994, this unlimited tax
holiday was brought in for the first ten years. That has now at least been
capped to $2 million a year. That gives Inco a tax holiday of $20 million, which
is what is paying for the Inco Innovation Centre at Memorial University of
Newfoundland. So we have a tax holiday, a gift to Inco, and we have no royalties
coming from Inco. All we have is a tax on profit and that is dependent on the
profitability or otherwise of what Inco is doing.
I think that this mineral regime is wrong, Mr. Chairman. I do not support it.
I support the tax on the royalties that Verbiski and Chislett are required to
pay, but I think we should be guaranteed equally a return on what has been taken
out of the ground out of Voisey's Bay so that we, in fact, have a significant
royalty being paid to the people of Newfoundland and Labrador plus a tax on
profit when a profit is made.
Thank you, Mr. Chairman.
CHAIR: Order, please!
A bill, "An Act To Impose Taxes On Income From Mining Operations Within
The Province And On Income Obtained Or Derived From Persons Holding Rights To
Mine." (Bill 21)
Resolution
"That it is expedient to bring in a measure respecting the imposition of
certain mining and mineral rights taxes."
On motion, resolution carried.
On motion, clauses 1 through 47 inclusive carried.
Motion, that the Committee report having passed the resolution and a bill
consequent thereto, without amendment, carried.
CHAIR: The hon. the Government House Leader.
MR. LUSH: Mr. Chairman, Motion 5.
I move, pursuant to Standing Order 47, that the debate or further
consideration on the resolution and Bill No. 7 respecting the raising of money
by way of loan by the Province shall not be further adjourned and that further
consideration of any resolution or resolutions, clause or clauses,
section or
sections,
schedule or schedules,
preamble or
preambles, title or titles, or
whatever else might be related to Bill No. 7 shall be the first business of the
Committee of the Whole and shall not be further postponed.
CHAIR: Shall the motion carry?
All those in favour, aye'.
SOME HON. MEMBERS: Aye.'
CHAIR: All those against, nay'.
AN HON. MEMBER: Nay.
CHAIR: Carried.
MR. LUSH: Motion 2, Mr. Chairman.
CHAIR: Motion 1.
MR. LUSH: I am sorry, Mr. Chairman.
Motion 1, Bill 7.
CHAIR: Motion 1, Bill 7.
MR. LUSH: Mr. Chairman, my understanding is that in this procedure now we
have agreed - all of us - that we will speak for ten minutes each.
CHAIR: The hon. the Opposition House Leader.
MR. E. BYRNE: Are we operating under closure? I would just like to ask
the Government House Leader if we are operating under closure.
Yes, just to confirm for the record, that is the agreement.
MR. LUSH: I think the hon. the Leader of the New Democratic Party agreed
to that as well.
MR. HARRIS: I have had discussions with the Government House Leader and I
think it is agreed that ten minute speeches would be agreed to for the purpose
of this motion.
CHAIR: Motion 1, Bill 7.
To move that the House resolve itself into a Committee of the Whole to
consider certain resolutions relating to the raising of loans by the Province,
which debate shall be carried out under Motion 5 and each member wishing to
speak has ten minutes to speak, once.
The hon. the Member for Ferryland.
SOME HON. MEMBERS: Hear, hear!
MR. SULLIVAN: Thank you, Mr. Chairman.
We are here today debating a particular bill that government has seen fit to
invoke one of the strongest means at their disposal to shut down debate on a
bill, and that is basically introducing closure.
The closure motion was introduced four times in forty years, from 1949 to
1989, and about thirty times since. Government changed - and thirty times since.
This is giving the hobnail boots treatment here to push a bill through.
There are some unanswered questions on this bill. I am still waiting to hear
answers to certain questions. The minister said in this House, back in May, in
Question Period, when I asked questions on this bill, on May 8, she said,
"I can say unequivocally today, to the Member for Ferryland, the only thing
that we would spend this money on, if we are to borrow, and only if the interest
rates are actually absolutely good for us, would be on the $93.3 million
deficit."
I cannot see how a Minister of Finance would say - and she is not paying
attention to me because she knows she made a statement that is not accurate.
MS J.M. AYLWARD: A point of order, Mr. Chairman.
CHAIR: On a point of order, the hon. the Minister of Finance.
MS J.M. AYLWARD: Mr. Chairman, I am in my seat, I am listening. Unlike
the member opposite, because I do not happen to be sitting staring across at
him, I am able to sign papers and listen at the same time. I heard every word.
I will say to the member, it is a very important bill. I know what I said and
I will be very prepared to stand up and repeat it again at the appropriate time.
CHAIR: There is no point of order.
The hon. the Member for Ferryland.
MR. SULLIVAN: Thank you, Mr. Chairman.
I would like to ask the Government House Leader - while I am entitled to
twenty minutes, I am agreeable to ten minutes provided times on points of order
allow me that extra time to speak that I lose on points of order.
AN HON. MEMBER: (Inaudible).
MR. SULLIVAN: I want an opportunity to make some points and I would like
AN HON. MEMBER: (Inaudible).
MR. SULLIVAN: Well, I hope we are under that understanding because, if
not, I am fully entitled to twenty minutes on a closure motion. Each of us are
entitled to it. It is only fair that if I lose some of the ten I agreed to, I
should be allowed to get it back. That is all I am asking. I think the House
Leader agrees, and hopefully they will live up to that.
Why would the minister say that we only going to spend, out of this $200
million - and she said on May 8, in the House: Only on the $93.3 million
deficit. If we are only going to spend on the $93.3 million deficit, why don't
you only want $93.3 million? In fact, the minister said in this House the first
day it opened this fall, We are $30 million better in a position than we
thought.
So why don't you want $63.3 million now, not $200 million? - if you
followed the minister's reasoning. I know that we do not need money approved
in this budget to retire debt. Debt retirement is a non-budgetary item.
If you look at statement 1 in the Estimates for 2002, it states $295,134,000
is the non-budgetary transaction that is not needed to borrow to pay a debt. The
reason why it is not needed is because this debt was incurred through previous
budgetary approvals. That is an accumulation of debt, that was last year's
budget, the year before and the year before. That is why it is there. I cannot
see how a Minister of Finance would make that statement, Mr. Chairman, to tell
us that it is tied into the deficit directly. That is an erroneous statement
there. I hope she gets that clarified with people in the Finance Department,
because I do not see how that is tied, basically, directly to the deficit. There
is a link, I might add, there is a connection between borrowing and debt,
because if we have a surplus we do not need to borrow. We might even be able to
retire debt. If we have a deficit, obviously, we have to borrow more. If the
deficit is bigger, we have to borrow more.
When this bill was introduced for $200 million, the minister said our deficit
was $93.3 million, and now it is $30 million better. So it should be reduced by
that amount if we follow the minister's reasoning. We do not need to follow
that reasoning because what the minister said back in May, in response to me in
Question Period, is wrong. It just does not make sense. What does make sense
though, is that she should know that government does not have the budget for
debt retirement, it is non-budgetary, and I just gave the reasons why. This year
it is $295,134,000. The Auditor General, I think, made reference to what should
be a budgeted item; the $148,500 last year that referred to Pension Fund
Liability. That is a factor that should be considered because we owe that money.
That is a debt that our Province has to meet to put into those funds. That is
something that is a budgetary item as opposed to an non-budgetary item; debt
retirement.
We would not have retirement, we would not have debt, we would not have the
permission to borrow to have debt, if we did not get budgetary approval. So all
the budgetary approvals that went on in this House over the last number of years
to give us that amount are already spoken for and approved by this House. So the
minister was wrong when she stated that it is tied in directly to the Budget. Of
course, we all know there is a correlation between borrowing and spending.
I have one very important question to ask the minister in reference to this
$200 million bill. Why do we need the $200 million bill, I ask the minister? Why
do we need it? Could the minister tell me and tell this House - and I think it
is incumbent upon the minister to answer this one question on this bill, and
that is all. She does not have to answer as to why she said something that was
not accurate. That is fine. I know the answer to that, but this answer I do not
know. What are the cash reserves we now have, Minister, that are going to
require us to borrow $200 million? What are the cash reserves? If the cash
reserves are sufficient, that we do not need to borrow it, we should not have a
$200 million bill.
The minister should be able to stand here and tell us what the projected cash
reserves are to the end of this fiscal year so we could know the borrowing
requirements we need? Why get permission to borrow over and above what is going
to be needed? That is a lack of accountability. We have been talking about
accountability for the last few days. Since the Auditor General tabled his
report in this House, we have talked about accountability. Why would you go
somewhere and borrow money? If you were in business and wanted to borrow money,
why would you borrow $3 million when you have certain cash reserves and you only
require $2 million? Why would you borrow $3 million?
The cost of borrowing is greater than the money you are getting on your
interest, on your investment, whether they are in Treasury bills or what type of
deposits you have those in. So it is not wise to borrow if you do not need to
borrow.
Before this bill passes here - actually there is a closure motion to shut
down today, to shut down debate on it - the minister should be able to stand and
tell us our cash reserves at this point in time and projected cash reserves.
Because if she cannot do that, she is not being fiscally accountable, and not
telling us why we need to borrow it. Why the $200 million?
I don't doubt that we need to borrow, because at the rate this government
is putting us in debt, God knows we need to borrow. The reason they might want
to borrow more is because our situation is worse than they are letting on it is.
That is why. She said before, it is to do with refinancing debt, and she fully
knows what she said in the House. I have her quote, and I will just say it again
to find out if, when she stands, she could clarify that. She said: "I say
unequivocally today, to the Member for Ferryland, the only thing that we would
spend this money on..."- $200 million in this bill "...if we are to
borrow, and only if the interest rates are actually absolutely good for us,
would be on the $93.3 million deficit." Well, that is not correct. Why
would you spend it? Why are you going to borrow $200 million to spend on $93.3
million deficit? If we have certain cashflows, the reserves are there, why need
that amount?
The minister should know. I am sure her officials can tell us the amount of
money that is really needed. It is definitely not $200 million. It was $200
million when she presented this bill. It is now $30 million less, if the
minister's statement the day this House opened is accurate. It is at least $30
million less, if she is accurate. She must know, because today she did not want
to present a supply bill to this House because expenditures we knew in April
were not budgeted for, for the by-election. We knew in August there was going to
be a by-election; $80,000 a by-election, $!60,000. The minister knew these
expenses were going to be incurred and to the last day of the sitting for this
fall we have not had a bill to look for extra funds. The minister said today in
the House: It is not in the budget. It was not budgeted.
CHAIR: Order, please!
The hon. member's time is up.
MR. SULLIVAN: Just a minute to finish up, Mr. Chair?
CHAIR: Does the member have leave to clue up?
AN HON. MEMBER: One minute.
CHAIR: By leave.
MR. SULLIVAN: Just a minute to finish, to make up for the time I lost,
that is all I will ask for.
AN HON. MEMBER: (Inaudible).
MR. SULLIVAN: Mr. Chair, in response to the Minister of Fisheries and
Aquaculture there: Basically, the money was not budgeted for these, because they
do not budget. I am one who has been saying we should be budgeting on an annual
basis at least the average number of by-elections per year. Over the last
several years, we should be budgeting for that amount. Treasury Board do not
want to hear tell of that. They do not budget for it, so they have to try to
find the savings within the budget. I really think we should budget for this,
because now we are looking for $160,000. Maybe it can be found by transferring,
maybe it can. If not, what this minister will end up doing, between now and the
end of March, is going out and having a special warrant issued for that money.
Do you call that urgent, when we knew in April there was going to be $ 80,000
needed, we knew in August there was going to be another $80,000 needed, and that
is not included?
I say to the minister, I know the minister was on government business but it
is an issue that was discussed. I am a member of IEC and it was discussed. It is
a committee of this House. I am sure the minister has been briefed or brought up
to speed on it, where she was attending government business at the time. That is
an important issue.
Mr. Chairman, there are not appropriate addresses to people in this House,
but I will leave it at that. I will not make a point of order, because it will
only delay things further.
I will conclude and say that I want the minister to stand in her place and
answer this question: Why do we need $200 million? Can you tell us what the cash
reserves are here, now in this government, and let us know?
Thank you, Mr. Chairman.
SOME HON. MEMBERS: Hear, hear!
CHAIR: Before recognizing the hon. the Minister of Government Services
and Lands, I would just like to draw member's attention to a very
distinguished guest which we have in the gallery today. To the upper gallery, I
see Santa Claus has dropped by.
SOME HON. MEMBERS: Hear, hear!
CHAIR: I understand he is checking his list, he is checking it twice,
just to see who is naughty and nice. I would just like to draw his attention to
the fact that the hon. the Minister of Fisheries and the hon. the Minister of
Works, Services and Transportation have not been good boys. Perhaps a lump of
coal in their stockings might be appropriate. Welcome to the gallery, Sir.
The hon. the Minister of Government Services and Lands.
SOME HON. MEMBERS: Hear, hear!
MR. NOEL: Mr. Chairman, you have really thrown me off my stride now
because, having been informed that Santa Claus is in the House, I am going to
have to be much more constrained in what I say than what I was otherwise
intending to say. I guess -
AN HON. MEMBER: Santa's watching.
MR. NOEL: In keeping with the spirit of the season, I guess, that is not
inappropriate.
The previous speaker, Mr. Chair, does not seem to understand that this is not
a budgeting issue. We are not looking for authorization to spend an extra $200
million. We are merely looking for authorization to take advantage of the
financial markets to raise money at the cheapest possible interest rate if we
have the opportunity over the next period of time. That is in the public
interest and that should be something that the hon. member would encourage us to
do.
We make great efforts to try to manage the financial affairs of the Province
to the maximum benefit of the people of our Province, and we do a pretty good
job, Mr. Chairman. I think the Opposition would be far more beneficial to the
Province if they would encourage us in taking this kind of good management
initiative, to have the authority there to borrow if interest rates fall to an
appropriate level or if our circumstances make it sensible for us to do so. It
is no harm to the Province and stands to do the Province a lot of good.
Mr. Chairman, this year has been a very interesting year for our Province. It
has really served to illustrate the difference between both sides of the House.
We have achieved the Voisey's Bay agreement that is going to provide
tremendous benefits for our Province for decades to come.
SOME HON. MEMBERS: Hear, hear!
MR. NOEL: It has been opposed by the Opposition. The Opposition Leader
has said, that if he was the Premier, this agreement would not go ahead. With
everything that comes up, the Opposition likes to say that they would do a
better deal than we are able to do, but they have not been able to demonstrate
it.
SOME HON. MEMBERS: Hear, hear!
MR. NOEL: They were not able to demonstrate it when they were the
government previously, and they will not be able to demonstrate when they get to
be the government again in another decade or so, Mr. Chairman.
The reality is, that we have to raise revenues to provide the level of
services the people want in our Province. The Opposition is against all taxes.
They want us to lower all taxes. They want to raise all spending. Mr. Chair,
that is just voodoo economics. It makes no sense and the people of our Province
see through that. They see that these are merely political tactics that the
Opposition are trying to use to ingratiate themselves with the population of our
Province. Mr. Chairman, they are not going to succeed in doing that, because the
people of our Province realize that we are providing good government and they
support the kind of government that we are providing and they are going to
continue to support us during the election that we are going to have next year,
Mr. Chairman.
AN HON. MEMBER: Be more specific.
MR. NOEL: Well, isn't that specific enough? How much more specific can
you get than that, than warning you people that you are not going to have the
opportunity to serve on this side of the House once we have the election?
We are going to achieve the support of the people, Madam Chair, because of
the policies of this government, because we are for development, because we are
for raising revenues, because we are for delivering quality services, and
because we succeed in reaching labour settlements with the people who work for
the Province. We have a great record of achievement that we are very proud of. I
must say, Madam Chairperson, I am very proud to serve with my colleagues on this
side of the House. We have done a tremendous job of governing this Province over
the past couple of years in particular, under some difficult and trying
circumstances.
We all acknowledge what we have gone through, but we have succeeded because
of the competence, the energy and the intelligence of the team on this side of
the House: the diversified team, the well-balanced team, the far better gender
balance team that we have on this side of the House than you have on that side
of the House.
SOME HON. MEMBERS: Hear, hear!
MR. NOEL: I want to say, Madam Chairperson, that I am particularly proud
to serve with the women who sit on this side of the House because they are great
MHAs who are doing a tremendous service for our Province.
SOME HON. MEMBERS: Hear, hear!
MR. NOEL: I encourage the other side to do more than they have been able
to do in the past to make sure that they have proper representation from women
if they manage to elect enough people next time around to have a reasonable
distribution of seats on that side of the House. We intend to do so and we
intend to increase the number of women who will sit on this side of the House
next time, Madam Chair. I hope that it includes yourself. We look forward to
working together for another term, serving the people of our Province.
Getting back to the theme of what I was speaking about, we have succeeded in
getting a great Voisey's Bay agreement that is going to return tremendous
monies to our Province over decades. The people who need jobs in our Province,
the people who need income in our Province, really appreciate what the
government has been able to accomplish in that regard.
Madam Chairperson, we are hoping to have a Gull Island agreement in the next
few months as well. As we all know, the Opposition has gotten on with their
ususal fearmongering, poisoning people's attitudes about the possibility of
having a deal, misleading people about what may be included in the deal, and
generally making it more difficult for us to achieve a deal, a deal that could
provide for hundreds of millions of dollars in benefits to our Province every
year over a long period of years; a deal that will develop, create and build an
asset that will be of tremendous value to this Province for generations to come.
Madam Chairperson, we are going to continue to work on that deal, and hope that
we succeed and provide that great benefit for our Province.
As the people of our Province know, the Opposition has said that if they were
the government that deal would not go ahead unless they could get a better deal
on the Upper Churchill. They failed to get that during the seventeen years they
were the government previously. All governments of this Province have failed to
get a better deal on the Upper Churchill for thirty-odd years now. There is no
reason to believe you can get that, and it would be crazy to prevent the people
of our Province from reaping the benefits of having a profitable and a good deal
on the Lower Churchill development because of some kind of sentimentality, some
kind of nastiness, because we have not succeeded in persuading Quebec to renew
the Upper Churchill deal, which we all want to do, Madam Chair.
I have been working to that end ever since I have been a member of the
Legislature, and before that. I have been working to try to get a better deal
out of Confederation ever since I have been a member of the Legislature, and
before that, and that is the case with many members on our side of the House,
Madam Chairperson. We have a record of fighting for this Province.
The Leader of the Opposition would have the people of the Province believe
that he is a fighter for the Province, but who ever heard him fight for this
Province until he decided he wanted to be Premier of the Province? He was
looking after his own interests throughout the years of his adult life, Madam
Chair, when many of us were spending many hours and much energy trying to get a
better deal for our Province out of Confederation, a better deal on the
Churchill Falls agreement, and provide better services for the people of our
Province.
Madam Chair, we stand on our record. We are proud to stand on our record, and
the Opposition will see in the months to come that the people of our Province
approve of the record that we have developed in the years that we provided the
government.
Madam Chair, another aspect of the difference between the two sides has been
illustrated by the Opposition's position on the Mineral Tax Act. Everybody
knows that the people of our Province want government to ensure that we maximize
the benefits from the exploitation of our resources. They want us to do it in
all ways with all resources. We have now provided legislation to ensure that we
get a reasonable return for the people of the Province on the exploration of our
mineral resources. The Opposition want to do away with that, Madam Chair, and I
think the people of the Province have to be aware that if they achieve the
government, they have indicated that they will endeavor to change the Voisey's
Bay agreement, perhaps put an end to that development.
If we succeed in getting an agreement on the Gull Island, they have indicated
that they will put an end to that agreement unless they can get a better deal on
the Upper Churchill. Madam Chair, I have a fear that they will put an end to the
royalty tax on mineral resources in the Province if they were ever to succeed in
getting the government of this Province.
The people of our Province are too smart for that, Madam Chair. The people of
our Province will ensure that we continue to have the responsibility for looking
after our affairs and we are going to be very happy to continue doing so for
years to come.
Thank you very much, Madam Chair.
SOME HON. MEMBERS: Hear, hear!
MADAM CHAIR (M. Hodder): Before I recognize the next speaker, I would
also like to recognize that Santa Claus is in the gallery today. Santa, I am
asking you not to forget all of the little children in hospital this Christmas,
and to make sure that you visit all the little children in our Province,
especially the children in Burin-Placentia West.
I can tell you, Santa, from my experience here, they have been much better
behaved than the members of this House.
SOME HON. MEMBERS: Hear, hear!
MADAM CHAIR: Merry Christmas to everyone.
The hon. the Member for Waterford Valley.
MR. H. HODDER: Thank you very much, Madam Chair.
Madam Chair, I was just listening to my colleague on the other side talking
about, I guess, the political ambitions that the government has in terms of
hoping that they are going to get re-elected. Well, I can tell you that he must
have been inspired by Santa Claus in the gallery, because certainly the record
will show that Santa Claus is all about fantasy, is all about hope and this kind
of thing. The minister was obviously living in a fantasyland, or perhaps he was
a dreamer. If he was a dreamer, he was a dreamer par excellence, a dreamer of
some significance, because I heard him talk about the fact that they were all
going to get re-elected, and we on this side could get a few people elected, and
this kind of thing. That would be his prognostication on what was going to
happen in the next election. Well, we will have to wait and see.
You see, we on this side have been listening to what the government have been
saying all this year. The day before yesterday, on Tuesday, I brought reference
to what this government intended to do when they read the Speech from the Throne
on March 19. In that Speech from the Throne, this government promised to be open
and to have a practice of greater openness and accountability. They said the
real hallmark of this Administration was going to be real accountability. They
said they had adopted a policy of openness, of publicly releasing reports and
studies once they are received.
Of course, we note from the Auditor General's report that most Crown
corporations and other groups that access government money do not prepare
reports that are tabled in this House. Therefore, we say to the government that
MR. LUSH: When did the Auditor General first begin to recognize that?
MR. H. HODDER: I say to the Government House Leader that he will have his
opportunity to make his comments. The other day when he was talking in the
House, he made some very negative commentaries about the Auditor General's
reports. I would say that the Auditor General's job is to look at the evidence
that is presented, to look at it and see whether or not there are good
accounting practices followed. If you look at that, you would look to what this
government did with the Marystown file. You would not look to the Marystown file
and say: This is a good example of good accounting practices. This is the way we
should run things in this Province.
Certainly, if you were looking at many of the other things that the Auditor
General has identified, you would not say, on the balance of all of the
evidence, that this is a good practice to be followed. In fact, the Auditor
General's report this year has to be among the most scathing reports that I
have seen since I have been following these things, and that is for a
considerable number of years.
I draw members' attention to the very opening paragraph in the Auditor
General's report. On page 1 - actually, it is titled page 7 - the Auditor
said, "A fundamental principle of accountability is that an entity cannot
be accountable to itself." Therefore, they trust groups like the Auditor
General to hold them accountable. "True accountability requires that
entities be held accountable to those who provide the resources for their
operations. On behalf of the taxpayers of the Province, the House of Assembly
approves the allocation of resources to Government departments, Crown agencies
and Memorial University of Newfoundland. True accountability would require that
these entities, in turn, report back to the House of Assembly on their use of
the resources granted."
Madam Chair, the Auditor General this year makes note and says that not many
of these Crown agencies, not many of the government departments, actually file
reports and place them on file with the House of Assembly. Therefore, we have a
real issue of accountability. As a matter of fact, further on in the report the
Auditor General says, "In this Province, with the exception of the Public
Service Commission, no departments and only 9 of 83 Crown agencies prepared and
tabled annual reports for 2001 in the House of Assembly. While other
jurisdictions have been developing and implementing ways to modernize and
improve their performance reporting, as far as reporting information the House
of Assembly is concerned, this province is now further behind than it was in the
1980s and the early 1990s, when some departments were preparing and tabling some
form of annual report in the House of Assembly." He goes on to say that in
his opinion "...the only way that this situation can ever be resolved is
through legislation which specifically requires that Government departments, all
Crown agencies and Memorial University of Newfoundland prepare and publish
annual performance plans and performance reports and have them tabled in the
House of Assembly."
Well, nearly a year after the Throne Speech, why is the Auditor General
finding this government has done such a poor job of living up to its
commitments? Because, obviously, on the (inaudible) of an independent person,
the Auditor General, this government is not doing what it should be doing in
terms of being accountable.
Now, I just wanted to say to the hon. members, as well, today we are debating
the motion here, the supply bill, and it is to borrow $200 million, and we are
doing it under closure. Now, closure is a strong-arm tactic. It is provided for
in the Standing Orders of this House in section, I think it is 47, where it
gives the government - when it gets to the point where it believes that it has
to introduce it, it does. You know, from 1949 to 1989, closure was used in this
House of Assembly just five times. In forty years, closure was used five times
only. All throughout the political careers of Joseph R. Smallwood, Frank Moores
and Brian Peckford, closure was used only five times. From 1989 to 1996, closure
was used twenty-three times. In the Administration of Clyde Wells, closure was
used twenty-three occasions. Now, we note that four of those twenty-three times
were under Premier Tobin, actually, in 1996.
MR. LUSH: (Inaudible) the law.
MR. H. HODDER: Now, the point is - I am not saying to the Government
House Leader that it is not provided for in the rules. I made that quite clear
at the beginning. I am just saying to the Government House Leader and to the
people of Newfoundland and Labrador, that this is a strong-arm tactic. We, on
this side, when asking questions about what this government intends to use the
$200 million for, we have asked detailed questions. The critic for Finance has
been trying to find out why you ne