April 30, 1997

GOVERNMENT SERVICES ESTIMATES COMMITTEE

The Committee met at 7:00 p.m. in the House of

Assembly.

CHAIR (Mr. R. Wiseman): Order, please!

My name is Ralph Wiseman. I am the Chair for the

Government Services Committee.

Before we move along here, I think the Committee

has a copy of the Minutes, and if we could move the adoption of both April 28

and 29?

On motion, Minutes adopted as circulated.

CHAIR: We are here tonight to examine the

budgets of the Department of Municipal and Provincial Affairs and the

Newfoundland and Labrador Housing Corporation.

The procedure has not changed. The minister will

have fifteen minutes for opening remarks and someone on this side, Jack or Bob,

will have fifteen minutes to respond.

I want to introduce to you the Committee members:

the Vice-Chair, Mr. Jack Byrne; Robert French, the MHA for Conception Bay South;

Gerald Smith, the MHA for Port au Port; and Anthony Sparrow, the MHA for

Placentia & St. Mary's. We have one member who has not yet arrived but I

understand he is in the building and will be along shortly.

We will change up every ten minutes or so, if it is

agreeable. Minister, I want to welcome here tonight, you and your staff, and you

may begin by introducing your staff, then continue with your fifteen-minute

statement if you so wish.

MR. A. REID: On my right, Mr. Chairman,

representing Newfoundland and Labrador Housing, is Clyde Granter, the new CEO,

and Ed Heath is Vice-President of Finance. Sitting here on my left is Bob

Noseworthy, the new Deputy Minister; Ramona Cole, the brand new Assistant Deputy

Minister; Felix Croke, sitting behind me, is the Manager of Financial

Operations; and John Moore is the Director of Local Government Policy.

If you do not mind, Mr. Chairman, I am going to

read my opening remarks and most of the remarks, I think, in the opening

statement refer to my Municipal and Provincial Affairs Department, but I will be

making some comments about Housing. And to be quite honest about it, if you

would prefer, I would prefer to do Housing first and let them go, if the

Committee is satisfied with that rather than - because I think most of the

questions will probably come from Municipal Affairs, so why keep them around for

two or three or four hours, the length of time we will be here tonight.

CHAIR: Well, if the Committee is agreeable with

that and want to do Newfoundland and Labrador Housing first, no problem? Okay,

Minister.

MR. A. REID: Mr. Chairman, and members of the

Estimates Committee, I am pleased to be here with my staff to present the

Estimates for my department. I have two sets of Estimates to present. The first

set of estimates will cover the Department of Municipal and Provincial Affairs

and the second will cover the Newfoundland and Labrador Housing Corporation. The

Newfoundland and Labrador Housing Corporation is represented by, as I said, Mr.

Granter and Ed. Heath and with the indulgence of the Committee, I would like to

make some introductory remarks.

The mandate of the Department of Municipal and

Provincial Affairs is to work closely with municipalities to help them to be

better able to manage and plan their affairs. In addition to facilitating the

development of local government, the department is responsible for matters

relating to local government policy, municipal finance, municipal training,

urban and rural planning, the provincial Emergency Measures Organization and the

office of the provincial Fire Commissioner. A new, independent agency is now

being established to handle property assessment and will be fully operational by

June 1.

Mr. Chairman, my department currently manages a

budget of $130 million and has a total staff component of 135 including 118

permanent and seventeen temporary. As well, the new assessment agency will have

a total complement of seventy-one. The department has regional offices in St.

John's, Gander, Corner Brook and Happy Valley - Goose Bay. Since our last

appearance before this Committee, the Department of Municipal and Provincial

Affairs, and indeed, all departments and agencies of government went through an

extensive exercise of program review, whereby each department was asked to

determine if programs and services:

a) are in the public interest; or

b) if they

are affordable; and

c) Are they being carried out efficiently? Many of the

decisions affecting Municipal and Provincial Affairs were highlighted in the

Budget, however, I do want to elaborate on the new and/or future direction which

is now being established by my department. I am sorry, I gave the wrong figures

- fifty-nine is the total staff complement in the assessment agency.

All levels of government are having to adjust to

the new economic and fiscal realities of our current financial environment. It

is challenging all of us to find new ways to deliver programs and services on a

more rationally efficient basis, ideally without increasing cost.

The announcements that were made in the budget are

consistent with the views of the Department of Municipal and Provincial Affairs,

and they must work more with, rather than for, local government, and

municipalities must move to positions of self-reliance. In keeping with this new

philosophy, municipalities must move to positions of greater autonomy and

self-reliance. The first step in that direction is to create more financially

viable units which can better plan and move with confidence towards a greater

degree of independence.

In the last budget, Mr. Chairman, government took

the position that a portion of the savings realized through reductions in

certain assistance measures - i.e., the Municipal Operating Grant and the water

and sewerage subsidies - are to be channelled back to assist those

municipalities which are most in need of financial help and assistance. As we

now know, an amount of $10.5 million has been allocated to reduce to manageable

levels the long-term debt of approximately 150 - and I repeat, 150 - of the

Province's 290 municipalities. These municipalities spend more - the 150 I

referred to are today spending more than 30 per cent of their revenues on debt

and find it almost impossible to finance that debt through private lending

institutions.

It might be interesting to note here, especially

for some people who have experienced municipal financing, there is one community

out there whose debt is 112 per cent of their total revenues. Their debt is 112

per cent of their total intake. I cannot see how that can be true, but it is

true.

Many of these same municipalities have debt burdens

in excess of 50 per cent. Some have 60 per cent, or as high as 70 per cent and,

like I said, there is one over 100 per cent, and are in serious financial

trouble. These municipalities, for the most part, are rural communities which

have been or are being adversely impacted by difficult economic conditions.

The government's decision to financially help these

troubled municipalities serves in a significant way to offset the reductions to

the Municipal Operating Grant and a reduction in other government departmental

assistant programs.

The basis, and the extent by which these

municipalities will benefit, and the degree, will depend on their tax capacity,

the economic outlook of the towns, and their overall financial conditions. It

will not be simply a matter of passing government assistance over to these

municipalities. These financially troubled municipalities will be expected to

take action, as well, including the imposition of tax levels that bear a greater

resemblance to the actual cost of providing municipal services.

We will look at the current mil rates and their tax

revenue bases, and ensure that they are trying to do everything possible on

their own to address their particular financial problems. We propose to

negotiate with all municipalities on an individual basis.

At this time, the department is spearheading

systematic reform to local government. These reforms will reflect fundamental

changes as they relate to the role of the department and to the role of the

municipalities. In future, the department will endeavour to foster the necessary

local government environment to accommodate the changing times to ensure that

municipalities have the tools to meet the challenges ahead.

As indicated, the department will change from

directly providing assistance to supporting municipalities in serving their own

needs. As well, it will endeavour to maintain the integrity of all our

municipalities by guiding their direction without dictating their decisions.

Mr. Chairman and the Committee, the department

proposes to assume a more pronounced role in the professional development of

municipal administration. Our task will be to create greater financial equality,

stability, and accountability among municipalities.

In our view, Mr. Chairman, local government must be

structured and financed in a way that will enable municipalities to deliver the

types of services people will require into the 21st Century. Together with the

debt-reduction initiative, we have a number of programs in place to provide

municipalities with the tools to achieve more autonomy and financial

independence, and I would like to make reference to some of the larger and more

significant ones.

The department proposes to assist municipalities

with the implementation of enhanced information technology systems, to

facilitate a more effective and efficient system of local government. We plan to

introduce legislation to enable municipalities to more effectively collect their

outstanding tax arrears, one of the major problems we have had for years, as

Jack knows. Probably one of the hardest jobs that municipalities have is to

collect arrears.

We propose to assist municipalities in their

efforts to generate increased revenue by revisiting the issue of municipal

taxation of machinery and equipment. It will be our intention to bring forward a

new municipalities Act, later this year, that will significantly enhance the

autonomy of municipalities, giving municipalities more say in what is going on.

We also plan to revisit the Urban and Rural Planning Act with a view to enacting

new and amended legislation that will provide significantly more autonomy for

municipalities in the area of municipal planning.

Mr. Chairman and Committee, it is my pleasure to

have announced on Friday of last week, the approval of 193 separate projects

under Capital Works and Infrastructure, a program valued at approximately $70

million. As I indicated in the House of Assembly, the two projects combined will

create 24,000 person weeks of employment which equates, based on a 20-week job

span, approximately 1,200 jobs. The announcement marked the earliest date ever

for approval in capital works and infrastructure and it means that construction

can start on projects as soon as the frost is out of the ground. I will add

something here as well, that we should be ready in the next couple of days to

notify all communities, consulting engineers in the Province, that, there will

be time restrictions placed on contracts, to force contractors, consulting

engineers and towns to get as much work as possible of that $70 million

completed before the frost starts later this Fall.

In total, government approved 104 water and sewer

projects and fifty-seven road and reconstruction projects, so 132 communities

are sharing in the two programs and they represent a significant investment in

municipal infrastructure; they also represent an investment in the future of the

Province.

In conclusion, Mr. Chairman and Committee, the

Province's long-term growth and development will depend, to a large extent, on

the strength of local government, especially in rural Newfoundland. This

government is committed, therefore, to the principles of local government, local

autonomy and local accountability. Government wants the department and local

government to work together in a partnership to ensure that our municipalities

remain good places in which to work, live and raise a family. Those are my

introductory remarks.

CHAIR: Thank you, Mr. Minister.

I should say before we move on, any time anybody is

answering a question, he should identify himself for recording purposes; it is a

bit difficult sometimes from up there to know exactly who is speaking unless you

identify yourself before you speak.

Now, to my left (inaudible) to respond and we have

agreed that we are going to do Newfoundland and Labrador Housing first.

MR. J. BYRNE: I am Jack Byrne and I am going to

get right into Housing. I will come back to the minister's opening remarks when

we clue up with Newfoundland and Labrador Housing.

First of all, from what I can gather with respect

to Newfoundland and Labrador Housing these days, there seems to be a number of

people laid off in `dribs and drabs' from Newfoundland and Labrador Housing.

Would the minister want to comment on that? I would like to know if these `dribs

and drabs' are part of the overall cuts that will be coming to Newfoundland and

Labrador Housing or are we getting `dribs and drabs' now, and then a big cut

somewhere down the road?

MR. A. REID: I would not necessarily agree that

they are `dribs and drabs' but -

MR. J. BYRNE: People in there believe it.

MR. A. REID: - it is recognized in the budget

and spelled out in our Estimates, which you have had for some time, that the

Housing Corporation announced during the budget that there would be a downsizing

somewhat to the Housing Corporation, and we were looking at the possibility of

closing some regional offices as well as, at the time, the final RRAP program

that we were not sure we were going to get continued on for another year, and

that would have meant some lay-offs and so on, but I think the total number at

the end of the day was a lot less than what we thought because of the number of

people who took early retirement. There were sixteen or seventeen positions in

Newfoundland and Labrador Housing that were not filled, so it was not actually

bodies. We eliminated those.

I am going to ask Clyde to give you maybe more of a

breakdown exactly of where the figures were and what the figures at the end of

the day will actually mean.

MR. GRANTER: The only lay-off that has occurred

in the time since the beginning of this year at least is one that occurred just

last week where, at the end of the day, three people were terminated. There were

twelve positions that were declared redundant, but there were other placements.

Further reductions would relate to, as the minister

indicated, the RRAP program, assuming that is not reinstated for another year,

at the end of this one, and potentially lay-offs related to the sale of our

market rental portfolio, which has been talked about and announced, I think,

previously. As we decrease the number of market rental units that we have, we

would have to decrease the number of employees who are assigned to maintain

those units. That, essentially, is the outlook for now.

MR. J. BYRNE: That is an answer.

With respect to the announcement made last week, or

the week before last, with respect to Newfoundland and Labrador Housing now, the

Province taking responsibility for the federal program in housing here, what

impact would that have on the staffing to Newfoundland and Labrador Housing?

Would you expect the staffing to increase instead of being decreased?

MR. A. REID: For the time being there shows an

increase - not an increase in staffing, because that was one of the factors that

we used to reduce the number that we would have to lay off. The RRAP program

being reintroduced this year, as well as some responsibility we have for the

devolution of CMHC and for CMHC property, meant that, I think, was it eight...?

MR. GRANTER: The combination of the two were

fifteen. I think the devolution will account for between six and possibly seven

people.

MR. A. REID: So it basically means that we did

not have to lay off as many as we predicted in the beginning because those

people we kept on now and their duties would be more directed to the CMHC

portfolios.

To be honest about it, Jack, we were very lucky,

number one, to get the RRAP reinstated; number two, to put the devolution in

place; number three, to have seventeen vacant positions that they were not

allowed to fill over there. So even though we show on paper that we are laying

off as many as sixty people, at the end of the day we ended up actually only

having to lay off three people, so we did well.

MR. J. BYRNE: I find what you are saying now

and what you were saying at that news conference to be in contradiction to what

you were saying a year ago. A year ago you were complaining, and fighting

basically, that you did not want the Federal Government to download the CMHC

houses and buildings on to Newfoundland and Labrador Housing and the Provincial

Government. Now, all of a sudden, it is great. How do you explain the

difference?

MR. A. REID: I am not in a contradictory mood

tonight.

MR. J. BYRNE: That is too bad.

MR. A. REID: But I cannot remember ever

saying... I have been working now for two years - for two years - with the

federal minister, and for two years I have been chairman of the housing

ministers in Canada, and for two years the Federal Government has almost on a

daily basis communicated with me, with regard to not only getting a deal with

the Province of Newfoundland and Labrador but with the rest of the country. Bob

was chairman at the time, and I really do not remember when I was complaining

about them downloading their housing stock, because it is my estimation that the

money we got and will be continuing to get for the next thirty years, puts us in

a much better position today by actually having control over CMHC than it would

be if they stayed in the Province. So, I am not contradicting you, but I

challenge you to prove to me where I was complaining about them downloading on

us.

MR. J. BYRNE: Okay, I will see if I can find

some of your statements.

On page 253, Housing Operations and Assistance,

section 1.1.01, Grants and Subsidies: Why would Grants and Subsidies be

over-budgeted by $3,400,000?

MR. A. REID: That comes into effect because we

were predicting earlier in the year that we were going to make more profit and

sell more units. Clyde, would you?

MR. GRANTER: The 1996-1997 Budget was based on

a projection with respect to the number of market rental units that we would

sell during the year, and that projection proved to be somewhat optimistic. We

did not sell as many so the revenue from that source was lower, hence the

operating grant that we required from the Province was a little over $2 million

higher than budget.

MR. A. REID: I think, too, Jack, it would be

much lower and you can correct me if you want to. I think we sold, we finalized

a deal with Churchill Square after the 31st of March.

WITNESS: (Inaudible).

MR. A. REID: We did not? It was in there, it

was included in there? What were some of the big ones? Tell him what were some

of the big ones we expected to sell and we did not sell.

MR. GRANTER: One of those that was anticipated

to be sold was Elizabeth Towers, I think, and also rnold's Loop, in the

Pleasantville area. There are thirty-two or thirty-six units there that we had

projected would be sold, but they were not, and we still expect they will be

sold before the end of this fiscal year.

MR. J. BYRNE: In the same section, Grants and

Subsidies, I suppose the reverse of what you just said may be the answer. What

action has been taken or will be taken by government to reduce the expenditures

on Grants and Subsidies, by $1,365,000?

MR. GRANTER: That is the result of a

combination of things, one related to some efficiencies that we are aiming to

achieve in our maintenance operations, reduction in administration costs. There

is an impact as a result of the new social housing agreement that was just

signed a week or so ago, and essentially, those are the main ingredients

contributing to the difference. There is also some increase in rental revenue

projected.

MR. J. BYRNE: A question with respect to - you

have properties in Buckmaster's Circle?

MR. GRANTER: Yes, we do.

MR. J. BYRNE: Did you have some work done on it

recently in the past year or so, in Buckmaster's Circle on some of the

properties up there?

MR. GRANTER: As I understand it we did, yes.

MR. J. BYRNE: Is there any problem with the

contractor, with respect to not going back and completing the work or, is

Housing refusing to pay him because he did not have the work done properly, or

completed? I heard that there were apartments up there with the ceilings falling

down, doors not put back and that type of thing happening. Is there any truth to

that?

MR. GRANTER: I certainly cannot give you the

complete picture there, but as I understand it, there were deficiencies

resulting from the contracts that were partially attributable to design and I

think we have concluded that the opportunity to recover on those deficiencies

from the contractors, is probably not very good.

MR. J. BYRNE: Could you tell me what kind of

money we are talking about here?

MR. GRANTER: I cannot, off the top of my head,

no.

MR. J. BYRNE: Could you supply me with that

information?

MR. GRANTER: Sure, I can.

MR. J. BYRNE: I have no more questions on

Housing.

CHAIR: Mr. French.

MR. FRENCH: Under Housing on page 253, Grants

and Subsidies, I guess everything is kind of lumped in together. So what I would

like to ask, and I would like this in writing, is the amount of money that was

spent in Professional Services - i.e., engineering or whatever, professional

services - for 1996-1997, who got the work and so on, and the amounts that they

received from Newfoundland and Labrador Housing. As well, I would like the same

information, again in writing, for 1997-1998, the amount of money you propose to

spend in engineering costs, where it is going, and so on.

MR. GRANTER: No problem; we can provide that.

MR. FRENCH: I have just one other question,

because something about Newfoundland and Labrador Housing has always intrigued

me.

MR. A. REID: There are a few things over here

that intrigue me, too.

MR. FRENCH: I know. Well, this is one of the

things that really intrigued me, Minister, the contract work for apartment

buildings, and this type of thing. I have people in my own district who do this

work. I do not see a lot of ads. I am just wondering, is there a list that you

use for contractors and so on? What happens? If there is a list, then how would

somebody - because I have been asked this question - how would a contractor go

about, whatever business he is in, having his name placed on this list, if there

is such a thing, you know, that type of thing? Is there a list kept, and how

could somebody get on that list if they wished?

CHAIR: Is it a patronage list?

MR. FRENCH: I do not know what kind of list it

is.

MR. GRANTER: I can -

MR. FRENCH: Wait now. Is the Chairman saying

that there is such a thing as a patronage list?

CHAIR: What kind of list are we looking for?

MR. FRENCH: Well, I do not know because I do

not see many tenders called.

MR. A. REID: No, there is a list.

MR. FRENCH: There is a list?

MR. A. REID: Yes, there is a list of bonded

contractors. Let Clyde answer the question.

MR. GRANTER: It is linked to the size of the

contracts. I stand to be corrected, but I think if the contract value is under

$7,000 we generally look at our list and sort of rotate around that list.

MR. FRENCH: You just get three prices, right?

MR. GRANTER: That is right. If it is higher

than that, we are required to public tender these, so it would be announced in

the normal process through the media and so on.

If there is a contractor who is concerned that he

may not be on that list, then he can contact our people, or me, for that matter,

and we will ensure that he is there.

MR. FRENCH: Okay.

When you send me a list, or even before, if you

have a business card, if you could leave me several, because there are two or

three contractors in my district who would certainly like to be placed on that

list. Whether they ever bid a job and get it - you know, if they do not bid it

they will never get it, but I would like for them to have the opportunity.

MR. GRANTER: We will provide you with that, no

problem.

MR. FRENCH: Thank you.

CHAIR: Well, I want to thank the officials of

Newfoundland and Labrador Housing.

MR. A. REID: Mr. Chairman, before they leave I

just want to make a comment here. Even though you are looking at it, I hope you

realize, going through the estimates, exactly what... Your estimates, especially

on your first page, $6,835,000, that is the contribution the Province will be

making to Newfoundland and Labrador Housing, so we will be spending almost $100

million.

MR. GRANTER: $120 million.

MR. A. REID: One hundred and twenty million

this year. That funding comes from CMHC, is cost-sharing. It comes from the

monies we generate in regard to our rental units and so on, so government over

the years have been decreasing. If you go back and look two or three years ago,

it was up to $11 million, $12 million, $13 million. The Provincial Government

has been decreasing because the Housing Corporation itself has been increasing

its profits, so that means that the Province has to decrease its commitment. The

Provincial Government's commitment to us this year is $6.8 million, even though

we are going to spend $120 million.

I want to say that, because I do not think there is

anywhere else in government where you can get the bang for the dollar that you

can in the Housing Corporation.

MR. J. BYRNE: Does that not include the

property sales (inaudible) in Admiralty Wood and what have you?

MR. A. REID: Yes.

MR. J. BYRNE: But you are now phasing that out,

are you not?

MR. A. REID: That is gradually going, and will

reach a point one of these days where we will not have anything left to sell,

then the Province would probably have to increase its commitment to us. That is

true.

MR. J. BYRNE: Exactly.

MR. A. REID: Thank you gentlemen.

(Inaudible) John Murphy from CBC will be calling

you tomorrow to look for some of those figures on the employment thing, and I

told him that you will give him full details on whatever he wants.

CHAIR: Okay, Mr. Byrne.

MR. J. BYRNE: First of all, with respect to

your statement at the beginning, or your opening remarks, could I get a copy of

that, probably tomorrow?

MR. A. REID: Yes, Sir.

MR. J. BYRNE: You referred to the assessment

division as being in Municipal Affairs - people being let go. Could you explain

to me and the people here, how you see that benefiting the procedures you are

planning, the group you are putting in place, how it is going to benefit the

municipalities in the Province?

MR. A. REID: I guess it goes back long, even

before my time as President of the Federation of Municipalities, but the

municipalities around the Province, especially the larger ones, have been

pressuring consecutive governments for the past twenty years to free up the

assessment division. And I guess, as you know, the assessment division of

Municipal Affairs for years, has taken five and six, seven and eight, nine years

for reassessments to be done in a number of communities.

If I remember correctly, and I stand to be

corrected, the hon. member, on numerous occasions in this House, complained

about the fact that people were having to wait for eight or nine years to be

reassessed and so on. We reached a point this year, where, in consultation with

the Federation of Municipalities, and a large group of municipalities, we

decided that we would ask them to make a recommendation to us as to what exactly

we could do with the assessment division as it relates to efficiency, as well as

giving the municipalities some control over that efficiency and over the

operations of the assessment division.

So Cabinet and government agreed, just before the

Budget process and in fact, I think it was a day or two before the Budget was

actually announced, that we finally came to an agreement with the Federation of

Municipalities and a number of groups and organizations around the Province,

that we would not privatize the assessment division at the present time, that we

would set a

schedule of about three years to unload the assessment division from

my department; and in that three-year interim, we would continue to fund, on a

reducing basis, the amount of money that was needed to operate the assessment

division.

The assessment division now, will be owned and

operated by the department, first of all, because of the amount of money we are

putting into it, but we will not have control on the board of directors. There

will be a new board of directors appointed that will be made up of

representatives from the Federation of Municipalities, the Administrators, the

municipalities from our department and taxpayers.

MR. J. BYRNE: Not to interrupt you, I

understand the process which is planned, but the question was: How is it going

to directly benefit the municipalities? Is this going to be another downloading

to municipalities that is going to cost the municipalities more for their

assessments?

MR. A. REID: It is going to cost some

municipalities more for their assessments.

MR. J. BYRNE: Right on.

You mentioned self-reliance for the towns and

trying to get the towns grow to be more self-reliant, you mentioned the mil

rates and it seems to me that you want the municipalities to have like a common

or an average mil rate across the Province, and basically, if you do that, it

will go right back to the taxpayer, of course, and there will be less money

coming from the Provincial Government.

I have to ask this question, and it goes back

mostly to rural Newfoundland. I mean, we see people leaving right, left and

centre; we see businesses closing down and we see people out of work, leaving

the Province to find jobs. Where do you expect the taxpayer to come up with this

money? There is only the same pot of money there for everybody to grab. I just

do not understand where you expect the municipalities, especially in rural

Newfoundland, to come up with these dollars.

MR. A. REID: I do not.

MR. J. BYRNE: Well, then -

MR. A. REID: I do not, but I expect people who

live in rural Newfoundland, and enjoy services that town councils are providing

them, to pay for the services. I do not expect people in rural Newfoundland, and

I certainly do not expect people living in communities in the Province who are

paying for those services, to subsidize people who are not paying for the

services.

I throw a question back to you. If you are living

in a rural community in Newfoundland and you have a service - let us say you

have cable service, which costs you in excess of $500 or $600 a year - if you do

not pay your bill, what happens to your service?

I suggest to you, Sir, that if you want to live in

rural Newfoundland today and you want services - you want snow clearing, you

want water and sewer, you want good roads, and you want recreation facilities -

then I think you have to pay, on an average, the same amount for those services

as they pay in any other community. If they do not pay for the services, then I

ask you: Who should pay for them?

MR. J. BYRNE: Who should pay for them? These

towns in rural Newfoundland are not getting the same services. Plus, these

people in rural Newfoundland are paying their HST, they are paying their RST,

they are paying all kinds of taxes. They pay taxes, so they have to get

something for their money, I would imagine.

MR. A. REID: Sure, if you are living in St.

John's -

MR. J. BYRNE: Let me finish, now; you asked me

the question.

MR. A. REID: Yes.

MR. J. BYRNE: If one of these individuals

living in rural Newfoundland has to go to a hospital fifty, sixty, seventy,

eighty, or 100 miles away, he has to pay more taxes on the gas he has to

utilize. That is just one. There are all kinds of factors that have to be

considered with these individuals in these towns. It is not simply black and

white, as you are trying to make it out to be.

MR. A. REID: So what are you suggesting?

MR. J. BYRNE: I suggest that there has to be

some kind of a happy medium.

MR. A. REID: Which would mean that the

government would have to put more money into municipalities?

MR. J. BYRNE: Yes, definitely so.

MR. A. REID: And I guess there is no trouble

for us to take that out of the health care budget? Is that what you are

suggesting?

MR. J. BYRNE: You just put out $2 million today

for the Trans City fiasco through the health care budget. That was $2 million

there.

MR. A. REID: So that is where we will get it.

We will cut the health care budget and give it to municipalities.

MR. J. BYRNE: That is not what I am saying.

MR. A. REID: Well, social services.

MR. J. BYRNE: You are trying to be smart and

smug and arrogant. The answer was: There was $2 million today put out because of

this Administration - $2 million for legal fees for the Trans City fiasco.

MR. A. REID: So what is the point of that? We

could have given that to municipalities if we did not have to pay for it.

MR. J. BYRNE: Proper administration.

MR. A. REID: Well, let me go back. There was

$26 million put out for the Sprung Greenhouse. I suppose if I had that I could

have given municipalities some money, too.

MR. J. BYRNE: There is $40 million for the

fiasco with Trans City; there is $10 million you spent on the hydro development

last year. What about this? So do not throw Sprung back. Sprung created 300 jobs

for two years, man. That is where the money comes from. You are trying to give

your smart answers again.

MR. A. REID: You still have not told me where I

can find the money.

MR. J. BYRNE: I did, but you are not listening.

With respect to the autonomy that you are talking

about giving the towns, other than with respect to the zoning of the town plans,

where is this autonomy going to be given, and what do you expect to get in

return for it?

MR. A. REID: What do I expect to get in return

for it? I do not want anything.

MR. J. BYRNE: The Provincial Government. What

new autonomy are you going to give the towns other than with respect to zoning?

MR. A. REID: Zoning regulations, taxation, in

the larger towns give them control over their own act, in Mount Pearl and Corner

Brook and St. John's. There are all kinds of ways that we can allow communities

to dictate themselves what they want in their communities; rights and

privileges, I suppose, that in a lot of cases, government control right now. I

do not think that the Department of Municipal and Provincial Affairs should be

out from an office in the Confederation Building on Confederation Hill dictating

to someone living in Torbay, a council that is working out of Torbay or Pouch

Cove or Carbonear or Port aux Basques, and saying: We know more about your town

- we bunch of townies in here know more about your town than you know yourself.

My attitude towards it is: Let those people who are

duly elected in a community - now within reason -

MR. J. BYRNE: I agree with -

MR. A. REID: - go out and do what they want to

do in their own towns; but, in doing what they want to do in their own towns,

then they will have to take responsibility and, I suppose, the repercussions of

doing anything that they should not be doing. So that, basically, is what the

word `autonomy' means, giving them more freedom to determine their own

destinies, and right now I do not think we are doing that.

MR. J. BYRNE: I ask the question, not to

criticize the action, because I believe that is the proper thing to be doing,

and I know you took it that way.

MR. A. REID: I know you agree with it.

MR. J. BYRNE: Anyway, the next question. With

respect to the Executive and Support Services of the department, it has

increased by $725,000, 39.1 per cent, while Support to Municipalities,

Assistance, Infrastructure and Municipal Protection Services are being cut by

$2,591,300 which is 25 per cent, $8,339,400 which is 7 per cent and $4,716,400,

72 per cent respectively. Why is the minister increasing administrative

expenditures while cutting basic services to the municipalities? Now, that was a

mouthful, I know.

MR. A. REID: Well, it must be. I think you had

better write it up and give it to me because there is no increase in support -

MR. J. BYRNE: Well, if you look at the 1996

Estimates and look at the 1997 Estimates you will see that Executive And Support

Services is increased by $725,000.

MR. A. REID: The 30-odd per cent you are

talking about was a transfer of salaries and operating funds from the Department

of Rural Renewal and Government Services and Lands. My department now is doing

the administrative duties for both the Department of Development and Rural

Renewal as well as Government Services and Lands, and when that work was picked

up by my staff, then that part of their budget had to be transferred to ours. So

you are looking at an increase in that particular

section of 31 per cent or

something and that is what it reflects.

An increase of $209,000 in the targets in the

department's IT budget, that is the only change from last year, and that is

technology, computers and so on. So there is no increase in -

CHAIR: Okay. May we move now to - Did you

indicate that you had a question, Gerald?

MR. SMITH: Mr. Minister, the whole matter of

regionalization - I know there have been a number of meetings that have been

held throughout the Province, and as a matter of fact, I am attending a meeting

in my district this Sunday at the request of one of the local service districts.

Where is that whole issue right now? What has happened to it, or are there going

to be further ongoing discussions and deliberations with regard to that? Just

where is the matter right now?

MR. A. REID: The Committee have finished their

work. The last hearing was last week. They have now until about the end of the

month to the middle of June to finalize their report to me.

WITNESS: (Inaudible).

MR. A. REID: The middle of June. The commitment

is the middle of June but they are hoping to have it before then. All the

hearings are over and hopefully, by the middle of June, I will have the report

back. I have sworn that I would not make a comment on it between now and then

and I would prefer to keep it that way. I do not know what is in the report, I

have not spoken to either one of the Commissioners; I do not know what the

recommendations are going to be, or what they heard out there other than what I

have read in the paper, so I am in no position to say. When the report comes in,

well, then the government will look at the report and decide whether they are

going to proceed or withdraw or whatever they are going to do at that particular

point in time.

MR. SMITH: Yes. It seems to be causing some

concern in my area. Right now, a lot of people are operating under the

understanding that, what we are going to see here is, just an introduction of

property tax right across the board to all areas of the Province. Issues like

that are causing a great deal of concern. For example, these are questions that

I have been asked to speak to at the meeting on Sunday, which I found a little

bit disconcerting. Because I did attend meetings that you held in Stephenville

with the town councils there, and we certainly were not talking specifics of

that type, more or less, I guess. My understanding is, with what we are talking

about with regionalization, it is the level of services that people want. I

guess, the only area that I see - like in my district, because geography has

made it fairly fortunate for me because we cannot go any further west than we

are. We are bordered by the Gulf, so we have nobody on the back of us to worry

about. Our backs are to the ocean.

The only thing is, in terms of if an LSD right now,

if they are satisfied with the level of what they have, and for most of them it

is just waste disposal - mainly that is the only concern that they have - most

of them have their own supply of drinking water, they look after their own

sewerage all on their own property, so beyond that, other than snow clearing -

and this seems to be the concern - for example, when we are talking snow

clearing as a service to these communities I have always assumed that we are

talking about anything other than the main road that goes through the community.

A main road that goes through the community would be, to my understanding,

maintained by Works, Services and Transportation, so it would be the secondary

roads - would that be fair? Is that what we are talking about? That is what we

are looking at in terms of if they have to accept responsibility for snow

clearing, this is what it would be.

MR. A. REID: You are asking me a question I

cannot answer, because based on where the community -

MR. SMITH: I am asking you because that is what

they are going to be asking me on Sunday.

MR. A. REID: Yes, well, the main road

through... Can you get up and make a commitment that government will, forever

and a day, snow clear a main road that is not on a highway, say, getting from

point A to point B, that the Department of Works, Services and Transportation

will continue?

I have a local service district in my area,

Freshwater - Bristol's Hope - the infamous Bristol's Hope, the one I was accused

of making a comment about, which I did not make. It is off the beaten track. It

is not on the main highway. Can I go out and stand up and say to the people of

Bristol's Hope that the Department of Works, Services and Transportation will,

forever and a day, snow-clear your road? I am the minister and I cannot do that

because I do not know what will happen. I do not know what the financial ability

of the Province will be in two, three or ten years, so I cannot say that. It

might be that if it happens that Bristol's Hope - if the Department of Works,

Services and Transportation decides tomorrow that we are not going down to

Bristol's Hope, somebody has to plough the road in Bristol's Hope. So who is

going to plough the road to Bristol's Hope? It has to be the residents who are

living there. Now, how do they do that? What would they do at that point in

time? Would they appoint a committee? Or would they go to Works, Services and

Transportation and buy the service? Or would they contract it out? I do not

know.

All regionalization is, basically, is to put an

area like local service districts and communities all together so one can help

the other, and put some sort of a forum of government there - not for taxation

reasons, because from day one, I was saying, and I have said it in the report,

even though there are a lot of people in the Province who do not want to read

and do not want to understand, and do not want to believe what we are saying,

because they are sceptical of government anyway, that the only services that you

pay for are the services you are getting; and I do not think anybody in those

local service districts will argue. They will tell you they are paying for their

garbage collection; they will tell you they are paying for the street light on

their corner; they will tell you they are paying for a certain amount of

snow-clearing in certain areas; they will tell you they are paying RST and GST

and all the other things, and we are not saying they are going to be charged any

more than that for them.

I have a question for some of them. Are they paying

for fire-fighting in Bristol's Hope? No, they are not paying anything for

fire-fighting. When the truck is not ready to come from Bristol's Hope, or from

Harbour Grace, they will phone the fire department in Carbonear. Now, there is

where the problem begins. If they are using that service, then do you not you

believe they should be paying something towards that service - something?

Regionalization is basically a way to bring

communities together. The whole principle of regionalization did not reflect

from day one any great seriousness about local service districts. We were more

interested in seeing that Carbonear, Harbour Grace, Bay Roberts, Spaniard's Bay,

Tilton, and all of those bigger communities, could probably come together and

start to share services, which would ultimately make it cheaper. Why do I want

eighteen fire departments in Conception Bay North, when possibly, nine would do?

I do not know, I am only just saying that. So that was the idea of

regionalization.

CHAIR: I want to interject here for a moment.

We could sort of shorten up the answers. I know it is difficult to give a short

answer because of the type of question that is asked. And one has a tendency to

give a total answer, because you have so much information and so much knowledge

about the whole Municipal Affairs that you are just caught up in what you are

saying. But, Gerald, you have about a minute. Could I ask you to give that

minute to Mr. French? He has to leave at eight o'clock and has not had an

opportunity, really, to - okay?

MR. SMITH: Go ahead, Mr. French.

MR. FRENCH: There are always questions, of

course, Minister, concerning Salaries, and on page 239, there are questions -

The other night, in Transportation, you know, there seemed to be a lot of

movement on salaries because of the way the department was restructured and so

on, and what we did on Salaries, we had a question on Salaries and, I think

either Terry McCarthy or John, somebody made a note of it and what they were

going to do was, over the next couple of weeks, they were just going to respond

to me in writing so that we would save some time. So, if I ask a question and

you want to do that, I have no problem with that at all, okay?

MR. A. REID: Okay, that will be alright.

MR. FRENCH: Salaries, on page 239, have

increased by $60,000, that is in the Minister's Office under Salaries. They went

from $158,400 to $218,400 in 1996-1997 and this year, we are up to $160,400 but

there was an over-budget of $60,000.

MR. A. REID: Walter Milley.

MR. FRENCH: Who?

MR. A. REID: Walter Milley. Walter Milley has

been with the department, with government since 1989. Up until this year,

Walter's salary has been down in -

MS COLE: We have not actually received funding

for Walter Milley's salary. He is an employee, a special assistant that the

minister has for working on special projects, but we have been funding him from

within the total salary budget of the department, so it is up in the Minister's

Office but it is down somewhere else to make up for that.

MR. A. REID: So they have it recorded here but

I am - What she is saying is, it would come out of this. The money will not be

spent out of this vote, it will be spent somewhere else.

Walter is a special assistant on a special

assignment. For example, what he is working on now and has been for the last

three months, is pensions for foresters. The forestry units, the one overseas

and he is working closely with the Senate and a number - so he does special

projects for me, through Provincial Affairs, as well as for the Premier and for

the government as a whole. He is has been with me for four years and I think he

was with Dave Gilbert before that and a number of other people.

WITNESS: (Inaudible).

MR. A. REID: No, he is the only person I have

in Provincial Affairs, and you know, Provincial Affairs, the Lieutenant-Governor

and the Legion and, in this case, the foresters unit. Now, I will ask you, the

media is not here, but I will ask you, quite honestly - we are in the

preliminary stages of asking the Federal Government, would they reconsider the

foresters - and you know who the foresters are. They have been trying for years

to get recognition as veterans, which would allow them pensionable service and

some other things. We are working towards that goal right now and that is what

Mr. Milley has been doing for the last three or four months.

MR. FRENCH: Under Executive Support, the

expenditure in Salaries was over by $58,100.

MR. A. REID: That is retirement entitlements

for executive staff, the retirement packages. Bob, do you want to explain that?

MR. NOSEWORTHY: The severance and what have you

come through the Department of Finance. Basically, it is paid leave essentially

for executives who have retired over the past year or so. Essentially, that is

what that is.

MR. FRENCH: Okay. On the next page, page 240,

again under Salaries, they were over-budgeted by $92,500 - that is under

Administrative Support.

MR. A. REID: That was where we seconded an IT

consultant from Treasury Board and we ended up having to pick up his salary.

Ramona?

MS COLE: That accounts for about half of that

figure. The additional amount was some additional temporary employees that we

hired during the summer to assist in the accounts office in the administrative

areas for the three departments for which we carry out administration.

MR. FRENCH: Further on down the page,

2.3.01.12, Information Technology, has gone up by $208,300.

MR. A. REID: Provision is made for the

development and maintenance of local government profiles and a new computer

system for the Fire Commissioner's Office.

Funds are also proposed for the development of a

new computer system due to the shifting of greater responsibilities to

department's regional office and municipalities. It is all part of our scheme to

put things out to the region and then ultimately to the municipalities, mostly

IT stuff. Am I right?

WITNESS: (Inaudible).

MR. A. REID: Yes, computers and information.

MR. J. BYRNE: I think I should jump in. Why

would that not have been budgeted for?

MR. A. REID: Why would it not have been

budgeted for?

MR. J. BYRNE: Yes. You went from $131,000 to

$340,000.

MR. A. REID: No, that is for the 1997

estimates. We are putting $340,000 in this year. We budgeted and revised. There

was less than $1,000 difference in last year's and what we budgeted.

MR. J. BYRNE: Okay.

MR. A. REID: So we are putting in an extra

$340,000. That has to do with that autonomy I was talking about with regard to

municipalities, okay?

MR. FRENCH: Okay. There are a couple at the top

I will leave to Jack, but down under Municipal Assessment Services, Purchased

Services have increased by $167,000.

WITNESS: Page 241.

MR. A. REID: Page 241? Is that the vacant

positions?

WITNESS: No.

MS COLE: The increase in Purchased Services is

to provide the rental cost for the new agency. They will be moving out of the

Confederation Building complex into their own office space.

MR. FRENCH: That is assessments, right?

MR. A. REID: And the Grants and Subsidies -

MR. FRENCH: Assessments.

MR. A. REID: Yes, and the transition grant is

$750,000. That is where we are going. That is the next one, gentlemen, Grants

and Subsidies. There is nothing there for the last two years. $757,000 is what

we have to contribute to that new agency this year as our share - Assessment

Services Agency.

The next one, the increase in Information

Technology is because additional funding is provided for the development of a

new property assessment system. Jack was asking me earlier what we were going to

do to make things better. This is one of the things.

Increased revenue will result from an increase in

the minimum assessment rate from $10.50 to $15. Municipalities were made aware

of that two years ago. Alright?

MR. FRENCH: Okay.

MR. A. REID: I do not believe I have any new

money in there at all, boys, to be honest about it. It is not stuff that...

There is no increase in new money. If anything, we are reduced in most areas.

MR. FRENCH: Okay.

Mr. Chairman, I will go back to Jack now. Thank

you.

If I could be excused?

MR. A. REID: You are finished?

MR. FRENCH: Yes.

MR. A. REID: You have your answers? You do not

need us to give you anything in writing?

MR. FRENCH: No, just the stuff that they are

going to send me.

MR. A. REID: Great.

MR. FRENCH: Before I go, as I usually do, I

thank the minister and his staff for coming tonight. Unfortunately, I have

something else on and cannot stay, so I certainly appreciate your coming. Thank

you.

CHAIR: Thank you, Mr. French.

Mr. Byrne.

MR. J. BYRNE: Back on page 240, Salaries, under

Administrative Support, Ramona, you mentioned that $92,000 was it - that half of

that was for employees during the summer months?

MS COLE: Approximately half of it.

MR. J. BYRNE: Well, give or take.

MS COLE: A little over half was for the IT

consultant from Treasury Board, about $55,000. The balance would have been for -

MR. J. BYRNE: If there were summer employees,

why would that not have been budgeted?

CHAIR: Order, please!

Could you identify yourself when you speak so that

the recorder upstairs will know who you are.

MS COLE: Ramona Cole.

Sometimes we have to hire additional temporary

staff for whom we have not budgeted. Sometimes we may move funding from other

areas, and you may have noticed that revised is down in some other areas if

there is a greater need for additional, temporary hiring in the administration

section than there is in other areas.

MR. A. REID: This is not students or anything,

Jack, this is stuff that goes on during the year.

MS COLE. No.

MR. J. BYRNE: Very good.

WITNESS: (Inaudible).

MR. A. REID: Yes, there might be; it might have

been, I do not know.

CHAIR: (Inaudible) there may be work terms for

students?

MR. A. REID: I doubt if it was there though,

under work terms. I think it would have been covered up in other areas; it might

have been, some of it.

MR. J. BYRNE: On page 241, under Support To

Municipalities, these basically, 01, 02, 03, 04 and 06; these budgeted amounts

were not reflected in the 1996-1997 Estimates book. Could the minister advise,

with reference to the 1996-1997 Estimates Headings, where these appropriations

came from? They were not in 1996-1997 but they are now in 1997-1998, in the

Estimates book.

MR. CROKE: Are you talking about 2.1.01?

MR. J. BYRNE: 2.1.01? Yes, that is right.

MR. CROKE: Last year, that was shown up as four

separate activity numbers -

MR. J. BYRNE: Yes.

MR. CROKE: - Inspections and Engineering, and

this year we have them combined into the one activity number.

MR. J. BYRNE: So, there is no need for me to

try to figure that out, they are still roughly the same figures?

MR. CROKE: They have just been restated and

combined.

MR. A. REID: And the figures are lower this

year than they were last year.

MR. J. BYRNE: 2.1.02, Municipal Assessments

Services, no need to get into that because it is going to be all the same

answers anyway.

On page 242, Policy And Planning, Local Government

Policy: Transportation and Communications: budgeted $4,200, spent $8,500 and you

are back to $5,200. Could you explain what is going on there?

MS COLE: The Director of Local Government who

is here with us this evening, accompanied the minister on a lot of the

regionalization meetings that he had across the Province.

MR. A. REID: I did not know we spent that much

money on you. You will not be skipping that much (inaudible) next year, I tell

you that much.

MR. J. BYRNE: Page 243, Urban And Rural

Planning. Could you explain why the salaries went up again by $50,000 over what

was budgeted?

MS COLE: If you notice down below in

Engineering Services, the revised figure for Salaries is down. We had a vacant

position in Urban and Rural Planning and in Engineering Services, and rather

than fill both positions, we hired one staff member who works just part-time in

both sections, but his salary is completely charged to the Urban and Rural

Planning vote.

MR. J. BYRNE: Administration and Planning:

2.3.01, subsection 12, Information Technology: Why reduce it now to $4,000 from

$9,500?

MS COLE: The $9,500 was for a digital mapping

project which is pretty well completed now. The $4,000 is just to finish it up.

MR. J. BYRNE: Page 244 -

MR. A. REID: She must be from down around your

way somewhere, Jack?

MR. J. BYRNE: No trouble to know, she has the

answers.

MR. A. REID: No trouble to know, buddy; I

guarantee you.

MR. J. BYRNE: Engineering Services, page 244,

Industrial Water Services: Salaries, a drop of $36,000 from what was spent last

year to this year. Is the position gone?

MR. A. REID: No, not a position gone. The

reduction has been applied as a result of the government's decision to transfer

the operation of maintenance to some of the industrial water systems, and in

providing municipalities and industry users over the next three years, so we are

downloading. To make it simple for you, Jack, I will say downloading because

that is what you would think anyway, but that is where that is coming from.

MR. J. BYRNE: Transportation and Communication.

MR. A. REID: It is one-third reduction this

year, gentlemen, because a number of communities have told us that they are

willing to take over the industrial water system, and we are doing it. We have

three or four already done.

MR. J. BYRNE: You said they have asked you?

MR. A. REID: Yes.

MR. J. BYRNE: Transportation and

Communications, 2.3.02.03: What action has been taken to reduce the expenditures

by $13,100?

MR. A. REID: You are asking why it is down from

$25,000 to $12,000?

MR. J. BYRNE: Right.

MR. A. REID: We are not going to let anyone

travel this year. Ramona, can you explain that?

MS COLE: The revised is up. We had some

overruns on some of the systems because we had additional travel related to

going out to negotiate with the municipalities for the takeover.

MR. A. REID: Oh, yes, okay.

MS COLE: The 1997-1998 Estimate number is down

one-third from the 1996-1997 Budget number.

MR. J. BYRNE: Under

Section 06, Purchased

Services, it decreased by $325,000. Which purchased services will be eliminated?

MS COLE: Again, the revised was up because of

some overruns on some of the systems, and that is something we have no control

over on a year-to-year basis.

MR. J. BYRNE: When you say overruns on some of

the systems -

MS COLE: The industrial water systems - the

actual cost of maintaining the industrial water systems.

MR. J. BYRNE: In other words, if you run into

problems. Is that what you are talking about?

MR. A. REID: I will give you an example. There

was a bit of a hurricane on the South Coast and it upset the industrial water

system in Marystown. When I say upset it, I mean, clay came off it and we had

holes in it everywhere, and this sort of thing, so we had to go in and repair it

because it was our system. That happens periodically throughout the year; a

system breaks down and we have to send somebody in to fix it. It costs us money

to do it.

MR. J. BYRNE: Under Revenue - Provincial, 02,

you had $1,010,000 there for last year and that is down to $714,000.

MR. A. REID: Yes, we sold a couple of our

viable systems. We have made some money on some of the systems. A vast majority

we do not make anything on, but there are some systems - Stephenville,

Marystown, and a couple of others - where we actually make a profit.

MR. J. BYRNE: They are the ones you sold?

MR. A. REID: What?

MR. J. BYRNE: They were the ones you sold.

MS COLE: They were the easiest ones to turn

over. They were the ones the municipalities wanted.

MR. J. BYRNE: Just like when you tried to sell

Hydro.

MR. A. REID: So it is going to get less and

less. You are going to see less and less there continuously. Government's policy

is to get out of it altogether.

MR. J. BYRNE: I just thought it was your policy

to sell off things that made money.

On page 245 -

MR. A. REID: Well, I would have a different

approach from government on the Newfoundland and Labrador Housing Corporation if

that were the case.

MR. J. BYRNE: What about Newfoundland Hydro?

Page 245, Municipal Operating Grants, Grants and

Subsidies: Can the minister indicate the impact of this $4,743,500 cut to

operating grants to municipalities? We had enough rackets over that already, I

suppose. Do you want to comment on that?

MR. A. REID: Grants and Subsidies, you are

talking about?

MR. J. BYRNE: Yes.

MR. A. REID: Well, there is a decreased amount

there basically because there is a drop in the older loans. You see, we pay out

of our -

WITNESS: (Inaudible).

MR. A. REID: Where is he talking about? Which

ones?

WITNESS: Municipal Operating Grants.

MR. A. REID: Oh, he is on the next one. I

thought he was talking about the first one.

That is basically program review and a drop in the

Municipal Operating Grants. You said it right. That is it. That is what you see

there, $31 million down to $26 million.

MR. J. BYRNE: How much longer do I have? My

goodness. However many pages are left, I have lots of questions on every page.

Under

Section 3.1.02, Municipal Operating Grants

again, Revenue - Provincial, can the minister provide an itemized account of the

$200,000 revenue allocation? Where is it coming from?

MR. A. REID: I can provide it. Do you want to

tell him? Go ahead.

MR. CROKE: Up to this year there have been

adjustments made to Municipal Operating Grants after the financial statements

have been submitted to the department. The figure for 1997-1998 is down because

there will be less adjustments required, and eventually that will be eliminated

with the reduction in the grants.

MR. A. REID: Do you understand what -

MR. J. BYRNE: Yes.

MR. A. REID: Okay.

MR. J. BYRNE: Special Assistants, Grants and

Subsidies, $2,516,800; the question is: Has there been any special assistance

given to any municipalities this year or, is there any planned?

MR. A. REID: None yet. I try to hold back on

special assistance until at least my Estimates are read and the Budget is

approved in the House, so, Jack, that is the money that I have for fire-fighting

equipment, local service district and that little slush fund that I have. Also

included in that $2.5 million, Jack, is the $1 million increase from last year,

to help municipalities that are in financial difficulties.

MR. J. BYRNE: Yes. You put $1 million there but

you are taking away - what was it, $4 million or $5 million up above.

MR. A. REID: Oh yes, but you will not see the

$9 million reflected here, you will find it over in Mr. Dicks' estimates. When

you do those, you will see the $9 million, the $10.5 million that we have put

aside for municipalities, but it is not in my budget yet, it is in the other

one.

MR. J. BYRNE: You mentioned earlier in your

opening remarks, something about the $70 million?

MR. A. REID: Yes.

MR. J. BYRNE: Infrastructure was $58 million,

was it not - Municipal Infrastructure and Municipal Operating Grants?

MR. A. REID: Yes.

MR. J. BYRNE: Both were announced last week;

that was $58 million, was it not?

MR. A. REID: Yes, but we are levering $12

million; the towns are going to put $12 million in themselves, Jack. Okay?

(Inaudible) $70 million.

MR. J. BYRNE: You make it sound good.

MR. A. REID: Oh, you have to make it sound

good, yes. Would you not do that?

MR. J. BYRNE: Pardon?

MR. A. REID: When you become minister one of

these days, you will do the same thing.

MR. J. BYRNE: Yes, and I have a good teacher,

too.

MR. A. REID: You can hire me as your deputy

minister.

WITNESS: Go ahead, Jack.

MR. J. BYRNE: Not likely, let me tell you.

MR. A. REID: Not likely, no.

MR. J. BYRNE: Municipal Infrastructure, Debt

Financing. Can the minister indicate which appropriations under this 1996-1997

Estimates Heading, are contained under this Heading, and provide a breakdown of

the allocations based on the 1996-1997 Heading? Do you understand what I am

asking you?

MR. A. REID: No.

MR. J. BYRNE: What is in this Heading here, can

you break it down -

MR. A. REID: Yes.

MR. J. BYRNE: - as related back to 1996 -1997?

MR. A. REID: Break it down by community?

MR. J. BYRNE: No.

MR. A. REID: You see Grants and Subsidies, that

$36 million, I believe is our share of the debt, is it not, now?

WITNESS: Yes, our share of the principal

(inaudible).

MR. A. REID: Our share of the principal

payments on - Yes. In order for me to break that down, I would have to give you

a full list, Jack, of our payments for municipalities on the principal.

MR. J. BYRNE: Not the Debt Expenses now but the

Grants and Subsidies itself, the $36 million. I am trying to relate last year's

to this year's.

MR. A. REID: Okay. We will provide you with it.

MR. J. BYRNE: Do you know what I am asking for?

MR. A. REID: Yes, we can provide you with that.

MR. J. BYRNE: Canada-Newfoundland

Infrastructure, Professional Services: it was $90,000 down to $36,000 down to

$20,000. Which professional services were eliminated to reduce the expenditures

by this amount of money?

MR. A. REID: Felix?

MR. CROKE: The figures for 1996-1997 was an

estimated amount as a result of the approved projects under the Infrastructure

Program. The figures for 1997-1998 reflect, I guess, more the actual figures

that we are going to spend this year. The agreement is pretty well wound down

and there will be less requirement for Professional Services.

MR. J. BYRNE: Under the same section, Grants

and Subsidies,

Section 10, from $15 million, which was $20 million budgeted,

down to $15 million and this year, I suspect it is going to be reduced by

another $1,035,000. So, which Grants and Subsidies were eliminated to reduce the

expenditures by that kind of money?

MR. A. REID: That is the tail end of the

Infrastructure Program and our share towards the debt servicing. Am I correct?

WITNESS: And the extension.

MR. A. REID: And the extension.

MR. J. BYRNE: What was that?

MR. A. REID: We have the finance of our

department, through NMFC, for our share of the infrastructure program. At budget

time last year we were looking at $20 million. We did not spend $20 million, we

went only to $15 million and that is coming down this year because we are

getting to the tail end of the last infrastructure program and now we just

announced the other one. So those figures go like that all the time, but as you

get further away from the actual construction of those things, it decreases and

comes back to zero. Do you follow what I am saying?

MR. J. BYRNE: So would that not go up this year

now?

MR. A. REID: No.

MR. J. BYRNE: Because you have the new one?

WITNESS: It will go up another -

MR. A. REID: It will go up -

MS COLE: On Budget day, at the time of the

Estimates, the actual amount of the infrastructure agreement was not settled, so

the figure that is in there reflects a lower amount than was actually finally

agreed upon. It will be higher.

MR. A. REID: Next year you will see that up to

$20 million again, or more. It will be a revised amount. When you are here next

year, question me; I will be able to tell you the same thing.

MR. J. BYRNE: You will tell me the reverse.

On page 247, Water And Sewer Servicing - Coastal

Labrador, under 3.2.03, subsection 05, Professional Services -

MR. A. REID: Yes.

MR. J. BYRNE: - $305,000 to $150,000 and back

up to $350,000; why would that be?

MR. A. REID: Which one was it he asked? I am

sorry, I missed it.

WITNESS: Professional Services.

MR. A. REID: $305,000 budgeted. Felix, go

ahead.

MR. CROKE: The funding that was in the budget

for Professional Services as well as Purchased Services was an estimate at the

time, but these funds were combined and redirected into Grants and Subsidies in

the 1996-1997 year.

MR. J. BYRNE: Why?

MR. CROKE: Next year's figures are up because

we have a new one-year agreement.

MS COLE: At the time the Budget Estimates were

printed, as Felix said, it was just an estimate. Once the projects come in for

review under that agreement, some portion of them may be actually - the

municipalities may want grants in order to do the projects themselves, so we do

not contract for those projects. We would give them the money and they would

contract for it.

MR. J. BYRNE: Okay.

MR. A. REID: And the increase to $3.2 million,

Jack, is the fact that it looks like there is going to be a new one-year

agreement for that in Labrador.

MR. J. BYRNE: That was my next question, the

$3.2 million up from $1.6 million.

MR. A. REID: We had to increase our

contribution there because we have been notified that there will be another

one-year agreement in Labrador of $2.9 million, so we had to put our share in

there, which was around $1 million or so.

MR. J. BYRNE: Can you drop down to the next

one, then, (10) $1.372 million? It went in there, was not there - in there and

not there. What is that?

MS COLE: Again, as I just explained, some of

the projects that we carried out in 1996-1997, rather than us tendering for

them, we gave the grants, gave the money, directly to the municipality, so that

would have been shown as a grant and subsidy.

That may happen again this year. It depends on what

projects the Committee agrees to for those (inaudible).

MR. J. BYRNE: Where did that money come from?

MS COLE: From the $2.7 million that we had in

the Purchased Services budget. If you notice, the 1996-1997 budget -

MR. J. BYRNE: Okay, got you - good.

MS COLE: Okay?

MR. J. BYRNE: Good, alright.

MR. A. REID: Robbing Peter to pay Paul.

MR. J. BYRNE: Page 248 next, I suppose, under

Emergency Planning, Salaries, 4.1.02.01: $153,000 revised to $162,000. Why is it

up $9,200?

MS COLE: The budget for 1996-1997 was $159,000.

There was a position there that would have been vacant for a couple of months at

the beginning of the year. We now have it filled, and the difference between the

two budget figures would be strictly step increases or upscale.

MR. J. BYRNE: Under Supplies in the same

section, 4.1.02.04: $20,000 budgeted and it went up to $34,000.

MS COLE: That covers materials that are used

for training programs on emergency preparedness with different groups and

municipalities across the Province, and it is difficult to project at the

beginning of the year exactly how much we will need. It depends on the demand,

the requests that we have for training for seminars.

MR. J. BYRNE: Subsection (12), Information

Technology, went from $5,000 to $14,400.

MS COLE: If you look above at Property,

Furnishings and Equipment, there is a drop there. There had been budgeted some

money for an emergency generator and we are considering relocating the Emergency

Measures Office, so there was no need to buy the emergency generator. Therefore,

they transferred the money and put it towards some much-needed computer

equipment.

MR. J. BYRNE: Thank you.

Under Disaster Assistance For Infrastructure,

4.1.03, Property, Furnishings and Equipment, what actually has been taken to

reduce it by $2,600,000, from $3.2 million down to $600,000? If you had it in

there for $3.2 million, you must have been planning on buying or purchasing

something.

MR. A. REID: It had to do with the Federal

Government, did it not?

MS COLE: The $3.2 million was put in at the

time a claim was gone to the Federal Government for damages under hurricane

Louise out in the Clarenville area, and the bulk of that was actually paid by

Works, Services and Transportation so we did not need to spend it.

MR. J. BYRNE: Page 249.

MR. A. REID: If I had known it was there I

would have spent it.

MR. J. BYRNE: I am not going to be able to keep

you here all night.

MR. A. REID: I am too good, Jack.

MR. J. BYRNE: What?

MR. A. REID: I am too good, boy; you cannot be

doing that to me.

MR. J. BYRNE: I can if I want, I suppose.

MR. A. REID: A couple of hours anyway, to make

it interesting.

MR. J. BYRNE: Page 249, Joint Emergency

Preparedness, Loans, Advances and Investments, $200,000 down to $100,000.

Explain that.

MS COLE: The amount of expenditure that is

budgeted there is directly related to the amount of money that we expect to get

from the Federal Government. They cost share most of that, and they have

actually been reducing their share of it, so we budget on that basis.

MR. J. BYRNE: Okay.

Fire Commissioner's Office, Salaries, $315,000 down

to $285,000 and back up to $311,000; what is going on there now?

MS COLE: I am sorry, I did not -

MR. J. BYRNE: Fire Commissioner's Office,

Salaries, dropped by $26,500.

MS COLE: There were two vacant positions for

most of the year.

MR. J. BYRNE: And they are going to be -

MS COLE: They actually have now been filled.

MR. J. BYRNE: Okay.

MR. A. REID: It is a great way to save money,

you know, Jack. If you have a vacancy in the department, leave it alone for a

few months and you will save a few dollars.

WITNESS: (Inaudible).

MR. A. REID: I am sorry, Mr. Chairman.

MR. J. BYRNE: I noticed with the department we

did the other day, that was the type of answer we were getting. We were looking

at the salaries, and they were saying all along that it is people not being

replaced and what have you, but they will be replaced, and they were saving

hundreds of thousands of dollars. I find it hard to believe but, anyway, sobeit.

Transportation and Communications, 4.2.01.03,

$78,500 went to $83,500 and back to $78,500.

MR. A. REID: 03?

MR. J. BYRNE: Fire Commissioner's Office, page

MR. A. REID: Oh, sorry, back again.

Ramona?

MS COLE: The revised is up slightly. I would

assume it was just additional travel by the Fire Commissioner to attend

seminars. He travels around the Province and talks to the fire chiefs, and

inspects the volunteer fire departments.

MR. J. BYRNE: Okay.

Municipal Fire Operations, Grants and Subsidies,

page 250; $2 million, went up to $6 million, and nothing this year.

MR. A. REID: That is the annual grant to the

St. John's and Corner Brook fire department protection services that has been

eliminated. We paid them up front in one payment, remember, of $3.2 million for

the City of St. John's, and .8, which is $4 million, so that brings it back. In

1997-1998 we do not have to budget anything for it.

MR. J. BYRNE: The grants and subsidies to the

St. John's fire departments now have been cut. Back to my pet peeve with respect

to the Town of Logy Bay - Middle Cove - Outer Cove being treated very, very

unfairly with respect to fire-fighting in this Province today, now there is

going to be another what is it, $2 million, cut from them, or $6 million?

WITNESS: (Inaudible).

MR. J. BYRNE: So that is going to have to be

now prorated out over the different areas.

MR. A. REID: Not this year or next year.

MR. J. BYRNE: But it is coming.

MR. A. REID: Oh, yes.

MR. J. BYRNE: And you made statements before

that they should be paying their fair share, and there was a deal worked out

which was not quite accurate, when you referred to it in the House, that they

had agreed to pay the money. It was only the back amount that they had agreed to

pay. They were going to cut it by 30 per cent, but then the assessments went up

last year. The new assessments, because they had waited almost ten years for it,

went up by 40 per cent to 50 per cent, so now that is going to bump the rate

from $100,000, if you exclude the 30 per cent, back up to $150,000 again, plus

this here.

I still find it very, very hard to accept that you,

as minister, enforced that upon the Town of Logy Bay - Middle Cove - Outer Cove.

CHAIR: I sense that there are no more

questions.

MR. J. BYRNE: I am not finished yet.

CHAIR: So I will ask the Clerk to call the main

subheads.

MR. J. BYRNE: What is that? I am not finished

yet.

CHAIR: You are not finished yet?

MR. J. BYRNE: No, I am not.

CHAIR: How many more questions do you have,

Jack?

MR. J. BYRNE: I do not know; I make them up as

I go.

CHAIR: Okay, you have a few more minutes.

MR. J. BYRNE: I just have one question right

now here on the end.

MR. A. REID: Leave the man alone. Go ahead,

Jack.

MR. J. BYRNE: Is the minister aware of the

increasing strain being placed on municipalities by this government's cutbacks?

Is he not concerned that the cut of a $6 million grant to the Cities of St.

John's and Corner Brook for fire protection services will impair the ability of

the cities to provide adequate fire protection to the people they represent?

MR. A. REID: The answer is yes, Jack, I am

concerned, quite concerned, and I will be honest and say this to you: When we

looked at cutting the grants for fire-fighting services to the Province, it was

because of the fact that not only myself, but a number of ministers around the

table who were familiar with municipalities and what we were doing and so on,

were concerned. That is why we came up with the $4 million this year, which

basically came out of last year's money, cash as such, and I am hoping, quite

honestly - I do not know if it will ever happen or not, but I am hoping - that

at least for the next two years we have a break with regard to providing from my

department that money to both cities. I am hoping that if we are in better shape

in two years time, something will be done to either add back some money, or

something will be done to assist the fire-fighting service on the Northeast

Avalon either in taxation of government buildings, or something along that line,

whereby they can recover at least some of that money. We do have at least two

years breathing room.

The answer to your question is, yes, I am

concerned.

MR. J. BYRNE: You are concerned, and you are

hoping to be able to do something about it.

MR. A. REID: Hoping, and I think you would

agree that if things keep going the way they are and we do not make any more of

those booboos you mentioned tonight, that the economy is going to pick up, and

maybe within the next couple of years this Province may have some more money to

be able to put back into municipalities and into the Northeast Avalon and so on.

MR. J. BYRNE: The Northeast Avalon, yes.

MR. A. REID: But it makes it hard.

MR. J. BYRNE: Pardon?

MR. A. REID: It makes it hard when you are

trying to save money on one hand and you are hurting people on the other. I do

not mind admitting that, because that is what we are doing.

MR. J. BYRNE: Big time.

Anyway, I am happy now.

MR. A. REID: Thank you, Sir.

CHAIR: Thank you very much.

I now ask the Clerk to call the remaining subheads.

CLERK (Ms E. Murphy): 1.1.01.

On motion, subhead 1.1.01 carried.

On motion, Newfoundland and Labrador Housing

Corporation, total head, without amendment, carried.

On motion, subheads 1.1.01 through 4.2.02, carried.

On motion, Department of Municipal and Provincial

Affairs total heads, without amendment, carried.

CHAIR: I would like to thank you, Minister, and

your staff, for being here tonight and being so forthright with your answers. I

look forward to seeing you again probably next year with much more pleasant news

for us, right, Jack?

MR. J. BYRNE: Yes.

CHAIR: Thank you, Jack, and the Committee, for

this evening.

We did put on coffee, by the way, so if you want to

have a coffee you can certainly join us. I think some of the staff are up there,

and they can certainly join us, too, if they so wish.

MR. A. REID: By the way, the people in the

audience, Mr. Chairman - these are three gentlemen who have moved over to my

department, and they found it within their hearts tonight to come along and

listen and see what was going on, and to get a bit of experience. So there are

three new people for me, and I am glad to see them here.

CHAIR: Well, they are certainly welcome to join

us for coffee if you desire. We are going to be in the caucus room there and

security, I think, can hear us, or they can -

MR. J. BYRNE: Can I say a word?

CHAIR: Sure, go right ahead, Jack.

MR. J. BYRNE: I would like to thank the

minister and his staff for coming here tonight. To be quite honest, when I came

tonight, they had all of these questions prepared and I was not going to ask a

question because I am still a bit peeved off about a certain issue, but I

decided to ask the questions just to get the minister and his staff on record.

In the meantime, I thank them for their answers tonight. I found the staff to be

very well informed on the issues and the questions that were put forth, so,

thank you.

MR. A. REID: (Inaudible) Jack, you must be

surprised. She just came into the department about two months ago and I am

surprised. I told the boys - I whispered while you were asking questions of her

- I told the two lads behind me, `Watch her, boys, because she knows it all.'

Then she must be from down your way to know it all.

MR. J. BYRNE: (Inaudible).

MR. A. REID: You are not surprised?

CHAIR: Can we have a motion to adjourn?

On motion, Committee adjourned.