May 5, 1998

SOCIAL SERVICES ESTIMATES COMMITTEE

The Committee met at 9:00 a.m. in Room 5083,

Confederation Building.

CHAIR (Mr. Mercer): Order, please!

Welcome, Minister; it is nice of you to be with us

this morning. Before we get started, just to introduce the members of the Social

Services Committee, starting at my far left we have the gentleman from Torngat

Mountains. Introduce yourself, Wally.

MR. ANDERSEN: Wally Andersen, MHA for Torngat

Mountains.

MS M. HODDER: Mary Hodder, MHA for Burin -

Placentia West.

MR. G. REID: Gerry Reid, MHA for Twillingate &

Fogo.

MR. MERCER: Bob Mercer, MHA for Humber East.

MR. SULLIVAN: Loyola Sullivan, MHA for

Ferryland.

MR. H. HODDER: Harvey Hodder, MHA for Waterford

Valley.

MS S. OSBORNE: Sheila Osborne, MHA for St.

John's West.

MR. WHELAN: Don Whelan, MHA for Harbour Main -

Whitbourne.

CHAIR: Those are the members of the Committee.

The procedure will be the same as in previous years. Minister, we will give you

up to fifteen minutes to make an opening remark. Try to contain yourself within

that time frame. We will then come back to the Chair. The Vice-Chair will ask

the first questions and then we will rotate amongst the members until all the

questions have expired or, in Harvey's case, until three hours have expired,

okay? We will try to do that, and try to make sure that everyone has a chance to

ask all the questions they wish to ask.

Having said those very few, brief, introductory

remarks, I will also ask, when your officials are speaking, that they identify

themselves for the purposes of the gentleman from Hansard, so he can get all of

that straight and clear. You are on, Sir.

MR. GRIMES: Thank you, Mr. Chairman.

It is a pleasure for me to have an opportunity,

along with some of the officials from the Department of Education, to give

further detail to the Social Services Committee with respect to the budget items

regarding education for the year 1998-1999.

I understand, having been here before, that a brief

introductory comment is usually appreciated. We have so much news this year that

I would really like to have about an hour or so of your time, but I will try to

shorten it and allow for more questions; noting as well, I am sure, that myself

and Mr. Hodder, as the Opposition Education critic, will explore more of these

matters in detail in subsequent Question Periods and things of that nature.

There were two or three things. Before I go into

them, I will just introduce the staff I have with me today. On my right is Mr.

Wayne Green, who is the Deputy Minister. I think many people in this room would

know Mr. Green from his many years in the public service, his many different

involvements in many different departments. Most recently he has been the Deputy

Minister of Government Services and Lands, before moving to Education early in

the new year, and had prior service and experience in the Department of

Education in a previous administration when there used to be two departments,

one for K to XII and one for post-secondary. Mr. Green was in that particular

department - I think it was career development and advanced education at the

time - (inaudible).

We also have Mr. Bob Young with us, who is our

Assistant Deputy Minister for Finance and Administration. Many in the room would

again know Mr. Young from some of his experiences - in the last few years in

particular when he was with Treasury Board and actually, before he came to

Education, had been the Director of Budgeting for the Province in the previous

budget exercise we went through a year or so ago. He also had extended

involvement with federal government agencies and the private sector as well.

I am joined, as always - the government doesn't

like for me to go very far without my Director of Communications because they

are always afraid of what I might say, so Mr. Cooper is here to make notes of

any comments in case he needs to issue any corrections at a later date on behalf

of the government.

WITNESS: A busy man are you, Carl?

WITNESS: What a job he has, hey? The transcript

(inaudible) is going to look some nice in Hansard.

MR. GRIMES: (Inaudible) would be from note

taking and careful observation for Mr. Cooper to make sure we do not make any

mistakes or errors in trying to provide information and answers for the

Committee. I will give whatever limited knowledge... I know, in most cases, I

will likely have to defer to the deputy and the assistant deputy minister to

give you the details I know you will want and desire.

A couple of things though, if I could, Mr.

Chairman, just to highlight the features of the budget that we think are worth

focusing upon - and the Committee may or may not deal with it in more detail -

this budget is the one that contains, for the first time ever, the $50 million

Education Investment Development Fund and the establishment of a new corporation

to do that so we can meet the government's commitment to clean air in the

classrooms, extensive repairs and renovations, maintenance, extensions and so

on, to the existing physical structures that are out there serving our students

in K to XII.

Also, there is some flexibility with that

corporation for post-secondary use if it is desired or needed or becomes an

urgent issue, so it is not exclusive or restricted to K to XII. We certainly

expect there are enough needs in the K to XII system to use the full $50 million

over the next two years, but if there is an urgent matter in a post-secondary,

publicly funded institution that needs to be addressed, this fund is available

to these for consideration. As well, of course, the fund has to deal with new

construction needs over the next couple of years as well.

The corporation, the committee itself, is headed by

Mr. Young. He served with officials from Works, Services and Transportation and

from Treasury Board, which help them monitor the actual cash flows and those

types of things. They are starting their initial meetings now. We are hoping to

be in a position to make some definitive announcements as to how we will start

using this fund within the matter of another week or ten days or so.

The committee itself has (inaudible), I understand

from Mr. Young, even from the old construction board that was in place just for

a short period of time under the previous Schools Act, that we have well in

excess of $50 million worth of requests. The challenge, of course, will be to

deal with it on a priority basis to see what it is that we need to have done at

the earliest opportunity.

The other thing as well, once we take care of the

physical plans for K to XII, if I could continue on with my comments for a few

minutes, Mr. Chairman, is the notion that this is the budget as well in which we

added back some 200 teaching units above and beyond what normally would have

been taken from the system because of student decline. That was a system that

had been in place some twenty years. My recollection, actually, is that Ms Verge

was the Minister of Education in the early 1980s when we moved to the current

allocation formulas, and the practice had been - because decline had already

started in the system - that every year since then there have been some teacher

lay-offs; because every year since then there has, in fact, been a decline in

the number of students. For a period of time, how many lay-offs were determined

by a clause in the teachers' collective agreement that said, regardless of the

decline, no more than 2 per cent of the existing teaching force could be laid

off in any one year; but there were lay-offs every year for almost twenty years

now.

This year, following the same kinds of formulas

that were in place, there were some 450-or-so lay-offs that were scheduled. We

reinstated 200 of those units and also made another significant move that is

playing itself out for the first time in the Province. We moved to establish

what were called small necessarily existing schools.

I know that the Opposition Education critic, a

member of your Committee, has, on behalf of parents in certain areas, questioned

how it is playing out in some regions of the Province; because it is a new

experience for us in terms of establishing small necessarily existing schools

where we establish a minimum number of teachers that are needed to provide the

minimum program that must be available in every school in Newfoundland and

Labrador. Those schools - there are eighty-four of them - are basically done

outside of the regular teacher allocation formulas. There is an assessment made

of how many teachers are required, regardless of the student population in the

school, to ensure that at least the provincial minimum program can be delivered

in those schools. It was on that basis that a discussion occurred, and that is

playing itself out for the first time in the Province. They will be in existence

for the first time in our history when schools open in September.

This is the budget as well, Mr. Chairman, in which

we make the first steps towards implementing the recommendations of the Special

Matters report by Dr. Patricia Canning. Altogether, in three or four different

subheads of this budget, we have a total package of initiatives that equates to

just about $5 million worth of things that are being done to try to respond to

some of the recommendations in Dr. Canning's report - so, a very important first

step for us.

The biggest feature, of course, is that there are

up to seventy additional special education, special needs, units available to

school boards. How many go into any one school board are determined by how many

assessed students with special needs are in any particular area of the Province.

The history in the last little while is that the

numbers of these special needs students are increasing in and around the

metropolitan St. John's area, not because there is any disproportionate

representation in the population for any reason other than our research and

follow-up show that families that have mobility, capability, in the Province,

and have children with severe special needs - learning disabilities, severe

physical disabilities and others - are choosing to move in and around St. John's

because the other support services they need from the health care system and so

on are also available in this region. If they can find a way to move into the

city itself, to move into Conception Bay South, into the Goulds area, into the

Northeast Avalon, families with special needs children are making conscious

decisions to do that, so that kind of population has become over-represented in

this particular area, in this particular board, compared to other parts of the

Province.

There is a representation and a cross-section of

them throughout the Province, but there has been a shift noticed in the last

several years whereby these types of families are gravitating towards a city for

access to a whole range of services, not only those that are provided in the

schools. So we would not be at all surprised if both of those units end up being

required in the schools that are administered by the board in Avalon East, and

that a few others might be disbursed elsewhere in the Province, because that is

where the students are. This is driven strictly by student assessment and need

rather than by any (inaudible) allocation of so many per board, and those types

of things.

This budget also, Mr. Chairman, shows a small but

continuing increase in the budget for student assistants. We might all cast our

minds back and recall the opening of school last September when I was

expressing, on behalf of government, some surprise that we were having

difficulties, even to the point of parents keeping their special needs students

out of school because they felt that the level of service was decreasing.

My surprise was based on the fact that this is the

one budget heading that through all the years of restraint, even in the last

decade, this budget head has increased every single year so that the resources

made available in schools for student assistants, as one of the tools that help

deal with special needs students, is the one area where there has been constant

growth ever since the program was introduced, and there is a slight increase

anticipated again this year.

That package of measures, along with some pilot

projects, some special materials for special needs students, some special

equipment, some piloting on some preschool initiatives, some literacy

initiatives, and those types of things that will be helpful for these students -

the increase in units and the increase in the student assistant hours that are

available - we believe that the school boards are better equipped in September

of 1998 to offer a range of services to special needs students than they have

ever been in the past. There is a great need. This won't meet all of it, but it

is certainly, again, a move in the right direction.

I think the school board representatives have

already indicated that they think they will have, clearly, a better capability.

They know that they will still have certain parents and certain children who

would suggest that they need a greater range of services and a level of services

than what we have provided to them, but they should be able to provide a better

level in September of 1998 than they did any year previous to that.

As well, there is the other continuing feature in

this budget with respect to K to XII. Then I will stop at that, Mr. Chairman,

and make just a few brief comments with respect to post-secondary. The other

continuing feature in this budget that positions the school boards to be in a

position so that they can probably have a better year in 1998 and 1999 than they

have had in the recent past is the continuation of the policy that says on the

operational side of their budgets, that if they effect any efficiencies and any

savings, the government does not recover them. They keep them. So that even with

our operational grants on a per pupil basis, we already know that the projected

enrolments last year through kindergarten enrolments that are already in place,

versus the number of graduates who are expected to leave the system, that there

will be in the range of 4,000 fewer students in our schools in September than

there are today. There is a grant in place for each one of those students.

What happens is that operational grant funding

stays in place next year even though the students leave. So the money for those

4,000 students stays in the system and the school boards actually, on a per

pupil basis, get an increased grant on a per pupil basis for operational

matters, for instructional materials, for assistance in the schools. Also, the

school boards that are contemplating now and have even announced some school

closures and some school consolidations, the money that is in their operational

base for running those schools - the heat, the light, snow clearing, all those

issues -, they keep that money and they use that to make improvements in the

remaining parts of the system.

That was a commitment we had made last year that on

the operational side the operational budgets would be frozen for three years,

and any efficiencies that are there because of decisions that boards make with

respect to facilities they operate, and the decline of the population, that

extra money would stay with the boards so that they will have increased funding

to apply to the remaining portion of their system they are operating on behalf

of the students.

In total we think that there is a very good package

of initiatives in this particular budget for K to XII. There are still some

issues of course that arise from time to time. It is always extremely

contentious when any one school in any one area is being slated for closure by a

school board for any reason. Parents and students get attached to the school

they have been attending, they want it to stay open, and it is always a

difficult issue. Some of those will play out and so on. I think the funding

initiatives that are driven by this particular budget, in our view, position the

boards better than they have been for any number of years in terms of being able

to deal with the pressures that are on them.

At the post-secondary level, I have just three or

four little comments. I think people in the Province are well aware of the $4

million scholarship fund that has been established to help the students with the

greatest indebtedness at this point in time. It is intended to be a bridge to

the Millennium Scholarship announced by the federal government. The federal

government has been encouraging the provinces to try and harmonize our efforts

with respect to reducing student debt and student indebtedness. We felt that

with the limited resources available to us one of the best things that we could

do would be to put in place a scholarship fund with basically the same criteria

as the Millennium fund that will be available to our students two years in

advance of the federal scholarship fund coming on stream.

We recognize that it is inadequate in terms of the

need being maybe double or triple this, but with the resources that we have the

students have indicated that they are pleased with this as a good start and hope

that it is a signal to government to be able to do more of this in future

budgets if money and circumstance allow.

The other thing that did not get as much attention

publicly is that in the student loan program, in one of the issues of getting

access to loans in the first instance, we did extend the definition of a term

with respect to entitlement of student loans to increase the length of a term at

the University from sixteen weeks to seventeen weeks. The effect of it actually

is that for each semester in University, students get access to borrow an extra

$275 per semester: $110 of it from us and $165 from Canada Student Loan. They

like the feature that it puts more money in their pockets, but of course all of

us know, and they know, that at the end of the piece all it does is increase

their indebtedness at the end of the day.

It is a two-edged sword. They do get a bit more

money to meet their expenses on the way through, but at the end of their total

borrowing period they will be in debt by a bit more than they would have if we

had not added the extra week. On balance it solves the shorter term problem for

them. They hope to work with us to make sure that there are other measures in

place by the time they get to the end of their borrowing period of four or five

years to help them eliminate the accumulated debt.

We still have the student loan remission program in

place in our Province which caps the debt for those that meet the criteria. The

stories you hear of $40,000 and $45,000 worth of debt in borrowing under normal

circumstances cannot exist in Newfoundland and Labrador. Because our program

says that if you complete your period of study on a timely basis, which means

the projected period plus a year - so if you are doing a four year degree

program, if you complete it within five years your total indebtedness is capped

at a maximum of $22,000. You may have borrowed $40,000, but at the end of the

piece what that means is that the government and the taxpayers, on behalf of the

student, immediately pay cash for the difference above $22,000 and they are left

with a debt of $22,000. It is really only ourselves and British Columbia, at

this point in time, that have a well defined remission program in place.

We were hoping, and there was a big representation

made by us and the Canadian Federation of Students, as well as our own bodies

here, to the federal government, that that feature would be a part of those

things announced by the federal government in the last Budget. It was not. They

took other initiatives with respect to easing debt and burden, but our remission

program is still in place. The first year where it became fully operational was

in the last budget year. We did not have as much uptake as we had anticipated

and that is reflected in some of the numbers in our budget, but we fully expect

that as students become more aware of the program - and of course they are

obviously very much in need of it - the uptake on that particular program would

increase in this year and in coming years as students qualify for remission.

The other two things that we did do in this budget

is we have provided stable funding for the College of the North Atlantic -

actually, the figures show a slight increase of $1 million or so - because we

have gone through the major reorganization, going from five colleges to one.

Most of the money that were reduced from provincial sources, almost all of it

was reduced because we had streamlined the administration. Just as we did with

school boards, we had other (inaudible) pressures that were at bear and other

needs for the money. We did not leave the administrative savings in the system.

When we eliminated the headquarters that had been in Grand Falls-Windsor,

Clarenville, here in St. John's, and in Happy Valley-Goose Bay, the monies for

those administrative structures were not left in the system, they were used for

other fiscal priorities for the government. The programming monies from the

provincial sources have basically stayed the same and have been increased in the

budget reflecting this year by $1 million or so.

The other aspect of it of course is that the

college itself has always been in the process of re-evaluating its program

offerings in trying to make sure that it is offering the programs that are tied

to labour market research that shows the greatest prospects for jobs and career

opportunities for the students. That is a constant ongoing annual operation of

adjusting programming.

At Memorial University the budget reflects the

third year of the three-year plan. The expected decrease in funding is there.

They made their plans for that three years ago. There are no surprises at the

University with respect to that. Our contribution of matching their Opportunity

Fund is also reflected. They have been very successful, by the way, with the

Opportunity Fund. They are closing in on their target of $50 million over five

years that they will use to build the new student centre, and also to put about

half of the money into scholarships, bursaries and award programs so that they

can help their students relieve some indebtedness through money that the

University has itself to disburse to its qualifying students.

The last feature that is here with respect to

post-secondary is that there is a budget increase that provides the opportunity

for the Province to reinstate and go back to more active monitoring of the

private training institutions in the Province. We had a more active monitoring

program several years ago. It was largely funded by money that had come from

Human Resources Development Canada as a result of the large influx of displaced

fishery workers into the private schools, and into the College of the North

Atlantic as well. Some of that money disappeared a couple of years ago.

The monitors were released, and we moved to a

system of going to schools basically on a need basis rather than doing spot

checking and regular monitoring. We will now revert back to the old program of

having designated monitors in three areas of the Province whose total job will

be to visit the schools, unscheduled, unannounced, on a regular basis as the

monitors see fit to do compliance audits to make sure that the private training

licence that they are granted to operate in the Province.

Those are the features, Mr. Chairman, that I wanted

to highlight. There are others and I could go on for some time, but I know that

the best and most productive use of the Committee is for us to provide the

information that the Committee members require. There are issues that I am sure

are near and dear to your hearts that I may not have thought of, or may not have

highlighted or featured here, that you would like more detail or more

information on, we are here to serve and provide the information if we can. As

you know, from our experience in the Legislature, I may not know many of the

answers, but we have people we can get them from and hopefully they are in the

room with us today.

CHAIR: Thank you, Minister.

Before we move to the Vice-Chair to start his

questioning, I will just remind you that there is coffee at the back of the

room, for the Committee members who have been asking repeatedly for coffee to be

available.

I will ask the Clerk to call the first head and we

will start debate and discussions under that particular head for the entire

Budget.

CLERK (J. Noel): Subhead 1.1.01, the Minister's

Office.

CHAIR: Loyola, and then we will go to Gerry

Reid.

MR. SULLIVAN: I have just a couple of things

initially, and then I will follow in sequence. I am glad to hear the minister

say that he now sees a need to monitor private colleges; that is certainly a

positive indication.

With reference to a remission program on student

loans, what dollar value is budgeted this year and what was expended last year

under the remission? Is the length of time to complete your post-secondary still

the same? Has there been any alteration? I understand there probably has not

been. Has there been a change in that?

One thing I find is that a lot of people, because

of financial reasons, are forced to take a semester off, or try to get a little

bit of part-time work in here and there, and therefore it lengthens out the

semester. Obviously there are other reasons which I am sure the minister is well

aware of also - maternity, probably. For example, child care and other concerns,

family concerns that increase the length of time to be able to get a degree or a

post-secondary diploma, or whatever the case may be. Is there any consideration

to changing that length of time? How much has been expended and projected for

this year, too?

MR. GRIMES: Thank you, Mr. Chairman.

The issue raised is actually on page 192 in our

Estimates. That is where I can probably direct you, to give you an explanation

as to the answer. As always, I will attempt to provide the answer as I know it.

The officials will interrupt because they will make sure I don't give any

misinformation, Mr. Chairman, to the Committee. If they think I am saying

something that is not quite correct, they will interrupt me and make sure you

have the right information.

As I understand it, in the heading 3.4.03 - and I

think Mr. Young will either nod or give me a dig if I am referring to the wrong

issue - in this

section last year, in 1997-1998, we had budgeted $10,981,100.

That covers two things. That is the amount that is budgeted to cover the fact

that the government has an obligation to the remission program and also that the

government, in student loans, pays the ongoing interest on loans. That is what

we do for that, at some period first when they start and so on; government pays

the interest while the loan is active and up to when the student actually starts

paying, so we have an ongoing obligation.

I don't know, and if Mr. Young has the details he

can tell us, what the actual split is in those particular numbers. The reason

the $10,981,100 came in at an actual of $8,240,500 - which is the issue I think

the Vice-Chairman has raised - that is not because the interest was less than we

expected; it was because the take-up on the remission was less than we had

expected. That is why the number is now back up to $11,322,000, because we do

expect increased activity in the remission program in this fiscal year, above

and beyond what was there last year.

There is no doubt, and one of the officials

(inaudible). The last comment I would make is that there is no doubt, because

the student officials... There is a committee that works with student aid that

has representatives of the CSU, representatives of the Newfoundland and Labrador

Federation of Students, and people from the office of the Director of Student

Aid. They have been trying to find some other way to give people entitlement to

the remission rather than under current rules, because the issue... There is no

denying the issue that you have raised. The university, through its

administration - I checked this with Dr. May, and he has done some research and

passed it along to us as well. We are very interested in it and would like to

find - this is intended to benefit the students, and it is not much point in

having it here if it is not going to be a direct benefit to the students.

The difficulty has been that they are finding that

less than 60 per cent of their students are completing on time - on time meaning

the year plus one - because of those types of things that you mentioned in your

question and commentary: that they find it necessary, because of debt and so on,

to leave university for a semester sometimes, and sometimes for a full year, to

seek out some money, to get some work, to even pay down some existing debt.

Because the other thing that I think has been known in the Province, and in the

country, is that the level of student loan that you can borrow has not changed

in over ten years, but in the whole country tuition costs have increased, the

cost of living has increased. So, even if you borrow the maximum student loans,

students and families are having to get other monies elsewhere to pay the cost

of their post-secondary training. Because of that, you would find an increasing

number of students who are not able to go through their training period

uninterrupted.

The remission program does provide for an appeals

process and provides for forgiveness if there is an understandable absence from

the university. Then that period gets added on to your five years for a

four-year program, but so far very few people have been able to convince the

committee that their absence was (inaudible). Usually it is for some

circumstance of crisis in the family where you had to leave; it may have been a

death or a serious illness that caused a student to leave. At this point they

have not considered leaving to get work as being one of those eligible criteria,

so we are discussing it. The committee members are -

MR. H. HODDER: Is pregnancy included?

MR. GRIMES: I am not sure. We can get an answer

for you at a later date. I expect that it would be and should be, but I do not

know of examples where it has come forward. We can check it for you. Again, if

you want the details, either Mr. Green or Mr. Young can give you a split as to

how much of (inaudible) -

MR. SULLIVAN: Yes, I am interested. Actually, I

am interested in knowing know how much of that amount was for remission as

opposed to paying interest, on the breakdown on $8.2 million.

MR. GRIMES: Mr. Young will introduce himself,

as per the instructions of the Chair. That is for the record of Hansard, for the

Committee. They all know who you are, Bob, but the machine needs to know.

MR. YOUNG: Thank you very much, Mr. Minister.

The original budget of about approximately $11

million - I will just give you some rough splits on the $11 million. We can

confirm those more precisely after the Committee's deliberations, but the rough

splits are for the loan remission program. The budget was approximately $3

million, and for the interest subsidy portion which the minister talked about

there was $4.5 million.

There is another program there that is called the

risk premium, and that is to ensure the banks, in case of default of loans and

so on, it alleviates the banks from having to pay out all the possible defaults

that may occur (inaudible) -

MR. SULLIVAN: It covers a percent of the total

pot, basically, the same as government guaranteed loans in other areas.

WITNESS: That is correct. That is approximately

$2 million, but those are the substantive issues. There are a couple of other

items in here like interest relief for specific purposes and so on, apart from

the interest subsidy, but the expenditures against those... On the loan

remission program, our expenditures last year were approximately a million

dollars against the $3 million budget; and our expenditure on interest subsidy

was $3.5 million as opposed to $4.5 million. The interest rates were not as

great as we had anticipated. On the risk premium, we did budget and pay out the

$2 million. Those are rough numbers.

MR. SULLIVAN: Yes. That is basically the

question I asked. We really only spent $1 million when we anticipated spending

$2 million.

WITNESS: Three.

MR. SULLIVAN: We anticipated spending three,

sorry, and we only spent one on loan remission.

My other part of the question was: What do we

anticipate spending again? We are back roughly to the same amount projected this

year, so is our forecast now changed on remission? Is it roughly still $3

million in the Budget or have we changed that, revised that, in light of only

spending a million?

WITNESS: No, we anticipate this year to spend,

in fact, the $3 million. The loan remission program really cut in in 1998-1999

because the program was introduced in 1994-1995 and the first (inaudible) people

coming through would have been 1998-1999, having completed their four years of

university. It really cut in, in effect, in 1998-1999, and the take-up was not

as great in 1998-1999 for reasons we are still trying to investigate. For

example: Are students aware of the program? Did they not complete their course

on a timely basis and so on? Are they going the extra year? Did they move off to

graduate school? Did they move off to another post-secondary type of training

and whatnot, so that they are still in the system?

The take-up was not as great as had been

anticipated, but we fully anticipate this year - we have done additional

advertising and so on of the program; we put out brochures at the university,

through the Student Aid Office and so on, to make all students aware of the loan

remission effort and so on that is under way. So we fully expect this year,

being the fifth year of the program, to spend the full allocation.

MR. SULLIVAN: Sixty per cent basically, I

think, was referenced, that does not fall into that because of time periods and

so on. I understand there are time limits in applying for that remission, too.

Would that be correct, that there are time limits in which you have to apply for

remission? If there are, and they elapsed last year, there certainly (inaudible)

be elapsed even more so this year in those aspects. I know there are new ones

coming on stream.

The point I am trying to make here overall is that

if we are not utilizing what is budgeted, maybe we should look at changing the

qualifying criteria for remission so we can give students the benefit of $3

million, not just the benefit of $1 million, on that particular point. Because,

are we going to be coming back next year and looking at the final figures again

and saying: Look, we budgeted $3 million but we only spent $1 million. Why can't

we get that $2 million in the pockets of the students through the financial

institutions, to get some of the burden off the backs of students so they can

stay here in this Province and not have to go to greener pastures to try to

retire debt.

MR. GRIMES: It is a good point as well, Mr.

Chairman. What we did, if you look at that same page, 3.4.03 and then the

heading above it in 3.4.02, one of the things that encouraged the government and

enabled the government, I guess, to establish the Scholarship Fund - because in

the meetings that we had, both myself and the Premier, with the student

representatives, it was clear, around Christmas time or so, the last time we met

with them, that the take-up on the remission was not going to be as great as

expected. The students made that point in their meeting with the Premier. They

said: Premier, it looks like there might be $1.5 million or $2 million here that

was intended to alleviate student debt that might not get spent.

As you can see here, what we did of course was we

took that $2 million and another $2 million - because we do want to alleviate

debt - and we put it into the Scholarship Fund in that same fiscal year. So we

took the $2 million that was a shortfall and put another $2 million with it from

some other shortfalls elsewhere in the government - in terms of expenditures not

being what they had been anticipated - and created the $4 million Scholarship

Fund.

The students themselves are on the committee, with

student aid officials, now finalizing the actual rules for the disbursal of that

money, so we were very (inaudible). They made exactly the same point that you

made, Mr. Vice-Chair, in terms of the fact that the money was intended to

alleviate debt. For whatever reason, it had not gotten into the hands of the

students as intended under the remission program, so we have made it available,

that and another $2 million, to get into the hands of the most needy students

with the greatest debt.

The students themselves are working with us to

determine the final criteria as to how that will be disbursed. The issue is that

it will likely be disbursed to a slightly different group of students because

there are some who probably thought they were going to be eligible for remission

but in one way or the other did not qualify. Whether or not they will ever be

able to qualify at this point in time, I could not answer that for sure; but it

is a continuing issue of discussion. Particularly, it seems to dominate mostly

with the representatives of the Council of the Students Union at Memorial where

the indebted levels are higher because of the longer length of the program

(inaudible). These programs, at this point - and correct me (inaudible) - I

don't believe the remission programs are restricted at all, because it depends

on what your goal is, but the periods of it will only really apply at the

university because of the nature of debt and how it is structured in the first

instance.

Maybe it is useful as well, a quick reminder as to

where it came from, because what it was, was a switch that was made

three-and-a-half or four years ago. We used to have a front-end grant system.

You would get a grant at the beginning and then you would borrow if you met the

qualifications. What we did was eliminate the grant system, let everybody borrow

to the maximum, and then gave remission at the end. A lot of people at that

point in time indicated that they thought it was a good change because the grant

at the beginning, in many instances, was available to every beginning student.

Even those people who, for whatever reason, were not successful, even the

Christmas drop-outs, had already accessed the grant. So we were spending a lot

of money in grants for students who never, ever completed their training. We

felt that the incentive component of this was that if you were successful you

would get the equivalent of the grant and more at the end, with remission for

your loan.

As you pointed out, the remission program obviously

is not working to the extent that all of us had hoped and wished, but we are

looking at adjustments. The committee is actively considering it. We have

indicated to them that if they can find ways to make it function better and get

relief to the students, we would certainly contemplate implementing the changes

when we can manage to do that.

MR. SULLIVAN: I guess overall, when you look at

the Budget, there is an increase of over $13 million in the education budget. It

was a little higher last year. I know the scholarship fund through special

warrants was really paid out of the last fiscal year. That is why, I guess,

there is only $140-some thousand reflected in that heading here this year.

There is a reduction of $13 million in spite of an

extra pay period. I guess Mr. Young might have just a rough figure. I would

assume the extra pay period equates to $20-odd million within the department

budget this year. Would you be able to confirm that?

MR. YOUNG: Yes, sir. The principal reason for

the decline has showed up in the capital budget side, and I think that is the

best area to look at. You will see, for example, if you look at our capital

budget, which has to do with the corporation the minister just expressed, the

$13 million really shows up there as the majority of the reasons for the

decline. Just let me get my note.

MR. SULLIVAN: Yes, and the proportion, that

might be the dollar value for that extra pay period.

MR. YOUNG: The extra pay period does show up,

but as I said the majority of it is in the presentation of the Estimates of how

the capital corporation funding is treated. You will find in 1997-1998, if you

are comparing the two years, there was a budget in there of about $14 million on

the capital side and nothing in for 1998-1999, because the money is showing up

in a different section, if you want, under the new corporation. I will just find

that page for you.

MR. GRIMES: A pay period, in the meantime, Mr.

Chairman, is roughly in the $13 or $14 million range for teachers. Anytime there

is an extra one we can expect it to go up by $13 or $14 million.

The reference I think Mr. Young is trying to direct

you to is on page 182, where the reason you see a difference in the overall

budget is in the one-time expenditure in the development of the Investment

Corporation. At the bottom of page 182 in

section 2.1.09 there was a $25 million

one-time infusion at the end of the last year that was not budgeted for. So last

year's number is up by $25 million. Therefore you see this one is down. We are

going to make the regular contribution this year in capital, which is the $16

million, but that $25 million inflates last year's budget by $25 million beyond

what would be expected.

MR. SULLIVAN: The same as the scholarship

thing.

MR. GRIMES: The whole notion of it is that in

fact our budget, compared to what we had budgeted last year without these

additions at year end, actually is up to accommodate the extra pay period. It

shows down overall, but the $25 million is just one instance. There is another

$4 million for the scholarship fund and so on. There are one-time infusions in

what is here that were not contemplated to establish things like the scholarship

fund, like the development corporation and so on, that drove last year's

Estimates above and beyond what were normally projected. Now they are showing a

decline because those one year things are not featured again in this year's

budget. There is also an extra pay period, and I believe - Mr. Young can correct

me - it is in the range of $13 million for a teachers' payroll for a two-week

period.

MR. SULLIVAN: Then there are the departmental

and other payrolls too that should bring the total budget in the vicinity, I

would assume, of $20-some million. Because most of the education budget is

salary overall, whether it goes out to public colleges or wherever it goes.

Just one other topic, and then I will give someone

else an opportunity to ask questions. It is about Memorial University. I think

three years ago there were three-year figures given on funding to MUN. My

understanding, and I am sure you will correct me if I am wrong, is it was

supposed to reduce funding to Memorial from a figure of roughly - I think at one

point we were up to about $112 or $115 million, and I think it was going to take

it down to $102 or $103 million. Now it was my understanding that that was

exclusive of the Opportunity Fund. I think last year the figure was roughly $102

or $103 million, including the Opportunity Fund.

Has that been a federal cut-back? Have you used

contributions to the Opportunity Fund to reduce, really, the overall funding to

MUN? Because it is only showing, I think, $98 million, in 3.2.01, page 190. It

is only showing $98 million, total vote $99 million, and we can see it is down

somewhat overall. That is a further reduction this year again. I know MUN

received a three year - I think that ended the last fiscal year. Would that be

correct?

MR. GRIMES: No, Mr. Chairman. This number, this

$98,725,700 is the last (inaudible).

MR. SULLIVAN: This is the third year.

MR. GRIMES: This was the number they were given

notice of three years ago.

MR. SULLIVAN: Yes, because initially I think in

a statement the minister probably made in the House, and certainly it has been

the public forum, he said that it was supposed to drop to $102 million at the

time, I think that statement showed. Why would it be going down another $3

million or so? Are you are trying to recoup what is given under the Opportunity

Fund? The cuts have been more severe than were forecasted for the three-year

plan.

MR. GRIMES: No, Mr. Chairman. I think if there

was a number of $102 million that looked like that was the end of the piece

instead of the $98.7 million, it would have been because the total grant to the

University, both in current and capital, might have been in that particular

number. What has actually happened, and the University concurs, is that these

are the numbers they were fully expecting and aware of, that their operations

grant would be the $99,097,900 that is reflected in the bottom line for 3.2.01.

The normal capital grant that (inaudible) at the

University every year is $1 million. What the budget for next year, the current

year of operating, and these Estimates cover, Mr. Chairman, in 3.2.02, instead

of $1 million it is $4 million. Because it is the normal $1 million we give them

for capital plus $3 million to match what they have raised for the Opportunity

Fund. We have not shortchanged one for the other. This was the expected

operating number for the University.

Maybe in some press release someone had lumped the

two together to show that at some point in time the total contribution might be

$102 million at the end of the piece. They fully expected in the range of $98

million to $99 million for operations, and $1 million or so for capital which

has been the government's annual contribution for the past four or five years.

Then there is an additional $3 million because we have verified with them that

their fund-raising effort has gotten $3 million from private and other sector

donors that we are now matching as agreed to in the establishment of the

Opportunity Fund.

CHAIR: Gerry, and then we will go on to Harvey.

MR. G. REID: I will ask all mine up front so I

don't have to ask any later on. The necessarily existent, isolated or small

school. You have a (inaudible) where you allot an extra teacher or so to those

schools. How many actually exist in the Province?

MR. GRIMES: There are eighty-four, I believe,

if I am not mistaken. There was a consultation process engaged in. Mr Young was

personally involved in most of it, along with our director of school services.

They visited with each of the school boards. Because of the kind of thing I

think that is in the news these days, with respect to a school or two in the

Province, particularly on the Northern Peninsula where people are now suggesting

that they would like to have the issue revisited.

Everything that is done with respect to planning,

whether it is small necessarily existent schools, the allocation of teachers and

so on - and it has always been to the advantage of the system -, it is done

based on current year enrolments. We have estimates for the next year. Of

course, if we project it ahead, then we know there are people leaving, and if we

start taking out teachers and so on then we would have fewer resources in the

system. School boards and so on have always been extremely pleased that the

government allows them to plan for next year based on this year's numbers

because that gives them additional resources to work with.

When we looked at the small necessarily existent

schools issues with each of the school boards, we dealt with this year's

enrolments, this year's schools, and didn't contemplate that they were closing

any or anything else. Because they were in a position at that point in time to

tell us whether they were or they weren't. If they did, of course, they had

other resources they could put back into the system.

There were eighty-four of them. I think there were

incidents in several of them where the assessment done by the officials and the

officials at the school board indicated that current teacher allocations in

those schools were inadequate. Maybe half a unit or a full unit in some cases

were added, because it was felt that to have the proper minimum programs in

place - they were actually, in some cases, fearful that students were being

shortchanged. The act requires that every school that is opened can only open if

it can guarantee that the minimum requirements within the act, with respect to

programming, are available to those students. In some instances the officials

came to the conclusion that they weren't 100 per cent, that it was borderline,

so they assigned additional units to those schools. Not in all cases. In some

cases they were satisfied that the minimum program at least was already doing

that, and current year allocations.

I think there was only one or two of the

eighty-four where there was agreement at the end of the piece that a teacher or

two could be removed from the schools. Because school boards, for certain

reasons - I guess peculiarities would be the best way to describe it - had shown

that even in the same school board, schools of exactly the same configuration -

meaning K-12, K-6, whatever they were, and the same size in terms of student

population - had very different teacher allocations.

Of course, school boards have always had the right

to decide where the teachers went. I guess they had their own local reasons as

to why they had placed fifteen teachers in this school and only twelve in the

other when they were the same size and the same grades. When they were

challenged by the departmental officials - because we have to have some

consistency in the Province - they agreed to a number that would guarantee the

delivery of programs in the schools.

There are eighty-four of them. It is a new

initiative. There are some strange things happening, as I see it. There are some

parent groups now which are suggesting that they only really want to count the

teachers that are actually what they would call classroom teachers. Where there

are six or seven units in the school, they are out actually making public

statements that we only have four teachers. This is a brand new phenomena that I

have never heard of before in my life, people to actually be out suggesting that

there are fewer teachers in the schools then there really are. They are out

making public statements that there are fewer teachers than the school board has

already told them they have for the next year. Because they have some view in

their mind that a principal does not teach at all.

The real circumstance in our small schools in

Newfoundland and Labrador - as a number of former educators and people who have

been involved with school boards in this room would know - is that it is a rare

circumstance where administrators in our Province don't do a considerable amount

of teaching. Parents are trying to build a case suggesting that: We cannot count

that person who is actually in our building because they are the principal.

Except for about a dozen or so very large schools in the Province, very large in

our definition being very small in other jurisdictions, these people have always

had some teaching duties. I guess in order to make a case at this point in time

they are suggesting there may be other things that are necessary.

We still have some points of interaction between

the government and the board. The board still has complete flexibility to assign

teachers in the other schools, but in the ones that have been designated small

necessarily existing schools there has already been a full dialogue between

government and the school boards. There has already been a determination of how

many teachers, how many teaching units, are going to be in those schools. That

is determined now, gazetted by law, and in place. That system gets reviewed on

an annual basis in terms of whether or not circumstances have changed so that

the designation of a small necessarily existing school should be altered in any

way, shape or form.

MR. G. REID: The reason I ask is because I

would assume most of the schools in Coastal Labrador are included (inaudible),

are they?

MR. GRIMES: In the southern Straits most of

them are, because of the nature of students. On the north coast, in Torngat

Mountains, the area served by Mr. Andersen, as the member would be aware,

because we visited the schools a year or so ago, they get the same

consideration. Not necessarily through designation of small necessarily existing

schools, but because they have a native component in their schools. There is

another feature of the teacher allocations, some of it supported by native

agreement provisions, but also provided by a

section of teacher allocations that

provides additional units for native education.

Because in most of the schools in Torngat, for

example, there is a two-stream, much like in other parts of the Province. People

might relate to schools where there is French Immersion, where there is a French

Coast of Labrador there is an opportunity, to some degree, for a Native stream

extra allocations under a native allocation formula.

It was agreed with the Labrador Board that for

those particular schools on the north coast that have the large native

components - at a point in time, by the way, we fully expect that the Aboriginal

communities will take over full control and operation of the schools as we

evolve more towards self governance and dealing with land claims issues and so

on. That is fully contemplated to be part of the overall scheme of things.

Presently, it was agreed that they did not need to

be designated as small necessarily existing schools. They are, in many cases,

small. They are absolutely necessarily existent, because there is nowhere else

for the students to go. The same additional assistance that they would have

gotten through this feature of the Schools' Act they have been getting and

continue to get through a native education component that meets their needs.

There has been, in that area of the Province, complete satisfaction. They are

getting served from that component as well as, if not better, than if they had

been designated small necessarily existing schools.

On the Southern Straits of Labrador, there may be a

school in the Forteau - L'Anse-au-Clair area that is not small and necessarily

existent, but I believe all the others are. There is a list. That board,

District #2, which serves the tip of the Northern Peninsula and the Southern

Straits of Labrador, only operates thirty-four school altogether. Twenty of them

are small necessarily existing schools, and most of those, I would say, are in

the Straits of Labrador.

MR. G. REID: I would like to see one other

thing included, and that would be necessarily existing isolated schools. The

problem I have on Fogo Island is that there is only one school system over

there. It is not considered small because it is a K to XII school. The argument

they use is that because they are an island - the issue is greater than that of

education. Their argument is that, for example, with declining enrolment if they

lose a unit it may be a music teacher, and that cannot be picked up elsewhere on

the island like it would be available in Gander. You may be able to find someone

to teach music privately in Gander,

whereas it is not available on the island.

Their argument has always been that if they lose more teachers they are going to

lose more programs on the island, not just in the school but things that were

available to the community before.

I don't think it would be that many, would it, if

you included the clause of necessarily existing isolated schools? There would

only be a few islands, I think, in the Province, wouldn't there?

MR. GRIMES: Most likely. It is a very

interesting concept that you raise, and one that we are interested in pursuing,

because it would be restricted to maybe just half a dozen or so (inaudible).

MR. G. REID: Because the Change Islands' one

falls under the small necessarily existing schools. Right? I think most of them

would.

MR. GRIMES: Mr. Chairman, the current one of

small necessarily existing schools, which is the point that the member is

raising, is our first step. What it has done and what the school boards are

encouraged about, and I think what the parents in Fogo would be encouraged

about, is that for the first time it has given us an opportunity to move away

from these formulas and actually decide how many teachers should be in a school

to preserve the programs. So far what we have done is say: You do have to meet

the two criteria. You have to be necessarily existing by virtue of the fact that

there is nowhere else to go, but you have to be small.

I think the education critic raised the issue as

part of a question in the Legislature a while ago. The small version, which is

where you get back to numbers again, kind of arbitrary numbers, is that the mean

grade enrolment has to be twelve or less. You pick an arbitrary number.

Therefore, in a place like Fogo where the students don't have a choice, they

qualify for part of the formula but not for the others, so they are lumped in

under the regular (inaudible). What the school boards are hoping we will be able

to do, and what we are hoping we will be able to move towards as well, is to

take maybe the next logical extension, which is the one you suggest, to move

from small necessarily existing to necessarily existing, period.

Because the other thing that we are hesitant to do

at this point in time is to go to... The proposition that the boards have put to

us - and the Committee might be interested in hearing this - through the last

year or so is that they believe they would like to get to a position where they

come in to the government annually and negotiate the number of teachers based on

programs for each of their schools. Not a bad concept.

MR. G. REID: How would that work?

MR. GRIMES: Basically, you would look at the

schools you have today, how many teachers you have, what program you have been

able to run under current allocations, and then unless there are major shifts in

the population, unless something has happened in a town where half the

population left, the government would commit to make sure that they can run the

same program in the same school next year, as long as the school has to exist.

The difficulty in moving to that right now is that

we do have circumstances - and probably the most remaining opportunity for it is

right in the St. John's area. This board acknowledges they have many

opportunities to consolidate services, that they have many more schools than

they need. I have heard the chair of the board on suggesting that there could be

fifteen or twenty buildings that they are in today that they were in for

traditional reasons that they probably don't need to use. It would be difficult

to move into a process with all the boards. Because in this area the board has

acknowledged that because they have lost 2,500 students in the last three or

four years and closed no schools. They have given notice now they are going to

close two or three next year.

They have also suggested publicly that it may be

possible to have a better education system in and around St. John's in fifteen

or twenty fewer buildings. When they get to the point where they have the

optimum number of buildings I think then the government would be very interested

in saying: This is the number of buildings you are definitely going to need. You

cannot close schools now because you need them. If we get to that point with

each of the boards where you have the schools that you need to have, I think

then it is clear, and it should be clear to all of us, that if we are going to

arbitrarily then reduce teachers on the basis of declining enrolment or anything

else, we can only expect to reduce programs.

I think all of us in this room have probably had

stories told. Okay, the basic formula is, say, twenty-three to one. Even if you

have a high school where you are offering five or six grades, and maybe there

might be two classes of the same grade, in a case like in the metropolitan area,

twenty-three students could leave the building but there might not be any more

than three of them in any one move. So you take a teacher; now, from what room

does the teacher come out? So the formula works but it does not do anything with

the school.

We would be very interested in the not too distant

future in using the model of negotiation that we used for small necessarily

existing schools. Mr. Chairman, the member has made a good point, that maybe we

can follow through in the next step. Which is to say, those that are necessarily

existing by virtue of physical location like Fogo Island, but may not be small,

maybe we should do a negotiation with them next. Then leave the ones where there

are still options in our larger areas, like in Corner Brook and St. John's and

so on, where they still may have some physical consolidation options that, when

they get their consolidations done, hopefully we will be in a position to

negotiate so that we can maintain programs for all of the schools. Maybe over a

five- or six-year period we could then abandon formulas altogether. That we just

look at how many teachers we have now, which programs are you offering now -

they are obviously all valuable, they are all good -, and get us in a position

where we can fiscally then bear that. That looks like the ideal way of doing it.

MR. G. REID: You might end up with comparable

programs across the Province then. Something that is closely or somewhat related

now. You are talking about the efficiencies that can be found in operational.

(Inaudible) is going to be capped for how long?

MR. GRIMES: When we did the Budget last year we

committed to a three-year period, so this would be the second year. There is one

more year after this. What the boards are now finding, because we have not yet -

the next year out, hopefully I guess, if the government follows its target of a

couple of years ago, and it goes through that exercise again, we might be able

to give them that commitment. They haven't gotten a commitment now beyond next

year. They know that this year any monies that they save they keep. They know

that next year any monies they save they keep. There are no guarantees because

we have not been able to provide them for beyond that.

What boards have been finding is that those that

made some moves last year - and there were some; there were a few that were

reversed because of Justice Barry's ruling in the court -, but there were a

number of boards that made substantial moves last year. They are now starting to

reap the benefits of it this year. Because they have the money and they can put

the additional money, by virtue of their closures and so on, back into their

remaining schools and their remaining students. We have already had examples of

where, in the Labrador area for example, Labrador West, because they made some

adjustments and moves last year in consolidating, they were able to re-institute

a music program, refurbish the band equipment in the school. They were able to

refurbish completely their computer systems, moving up to the Pentium models for

the whole thing. They were able to put a local area network in the school

because they had savings from a consolidation that they made the year before.

Now boards are now recognizing that.

I guess it is a little bit of incentive that the

more quickly they can move to whatever consolidations make sense, the longer the

period they would have had the money available to them. Now the longer it takes

them to make the changes, unless we can get into a... I think the intention of

the government, in my discussions with the Premier and the Finance Minister -

and they will bring that to the government at that point in time when they can

see their way through - is that if we can move that commitment forward to

another two- or three-year cycle we would like to. I guess particularly the

finance department is still doing more investigation of what kinds of things

might be possible for future budgets. As a policy and as a program that works

and is giving opportunities out there to actually get more money into the

curriculum and materials and instructional materials for students, the program

is paying off dividends for some boards this year.

If anything, again I guess, the biggest board in

the Province is the one that has not taken advantage of it because they did not

manage to do any kind of consolidating. They will have the least benefit of it

because there are some students who have left - I think there are 800 or 900

students who have left the system -, so the money for the 800 or 900 students is

still in the system to be dispersed amongst the other 32,000 students. It is not

a great (inaudible). Had they been able to consolidate eight or ten schools and

keep the money for heat and light, snow clearing, insurance, and those kinds of

things, they would have had hundreds of thousands of dollars, if not maybe a

couple of million extra dollars, that they could have kept in the system to use

to improve programs and improve the facilities for the remaining student body.

MR. G. REID: I do not think it should continue

forever, because then the school board which could do the most consolidation

would end up with the most money down the road in ten years from now. In a case

like - and I have talked to you before about it - New World Island, where we

have five schools now, if they were consolidating one, which they are proposing

to do, would you consider allowing them to keep the operational money for a

longer period of time so that they could mortgage a new building and maybe pay

it off, and in the end save government a lot of money? Rather than, say, it

could be closing five and having one remain open. I think there could be enough

efficiencies there to pay for it, but you would not be able to do it in three

years obviously, or two years or one. Maybe if you could mortgage the building

in that light it might be okay.

MR. GRIMES: Again, it is an interesting

concept, Mr. Chairman. We have had some discussions. One of the things that

limits that kind of a commitment is that any particular government is hesitant,

and I think rightfully and properly so, to put in commitments in the longer

term. Because another succeeding government, whether it is of the same stripe or

a different stripe, may have different priorities.

I do not think it is right or proper for someone to

- other than through a regular capital budget, the same as we would mortgage

your house and know we have a set mortgage for twenty or twenty-five years. If

you are trying to find innovative and creative ways to use current account

expenditures by giving savings on a current account for an extended period,

there is a good argument to be made that it is not only unfair but improper to

go beyond what would normally be the life of any mandate that you have been

given as an elected government. Because another succeeding government might have

a different set of priorities and would come in and find out that the previous

government tied their hands to the point that you could not do certain things

that might be a priority for the group.

We have tried to be creative. Mr. Young and his

group have worked with school boards, for example, to suggest that this

particular government has a mandate in the Province. We want to invest, to be in

existence for another three years, or approximately that range, almost three

years; so we would not hesitate to make, say, a two-year commitment to somebody,

knowing... Unless there is some strange circumstance, this group is likely to

still be in charge and likely to live with the consequences of its own

decisions. Once it gets beyond that, if we get the request for three- or four-

or five-year commitments, we are very happy to enter into an arrangement for

those kinds of practical reasons. It is not that it is not a good idea, and not

that (inaudible) find any creative way to help somebody get that facility that

they need now, particularly if it seems to be better than the current

educational organization, but there are other restraints that apply to the

system, Mr. Chairman.

WITNESS: Back to the $50 million, that seems to

me like a lot of money. I have never heard it announced in education before; $50

million for capital construction, is it?

MR. GRIMES: Again, it is a fund that is

designed to take care of the capital requirements. When we had the provincial

construction board - maybe many members in the room, on behalf of people in the

area, might have been asked to at least write a letter of support to the

construction board because the school board in their area had asked for a new

school or major renovation or repairs, those kinds of things, in their area.

There was a debate as to - one of the things that happened last year, for

example, just to give an example, the construction board, because they had

available to them in the range of $13 million or $14 million, had over $100

million worth of requests and there was a debate as to which was capital and

which was operating. One of the issues was defective roofs, as we recall.

I think all of us in the Legislature about a

year-and-a-half ago were a bit surprised to hear that the roof trusses on some

of these buildings had failed and (inaudible) joists had failed. When that

happens, you have to go fix it. Even if it is not budgeted for, it is an

emergency. You cannot let the roof collapse in a school or any other public

building.

If it is going to be several million dollars -

fixing a roof is normally considered to be a normal operating cost. You should

expect your roof to leak or fail every now and then and you go fix it. They did

not usually apply to the old denominational education committee to fix the roof;

you fixed it out of your regular budget. There were so many of those that had to

come out of the capital budget because there were so many of them - it was

extraordinary - and that then put restraints on how many new projects could be

done and so on.

What we have tried to do here is that where there

are major repairs we are going to try to fund them out of the $50 million fund,

and as many of them as we can do, even in the summer. It is true that some

boards, with their repairs and maintenance budget restrained last year, have had

to defer a number of repairs and maintenance projects that they would have

ordinarily done. So there will be some monies that ordinarily we would say to

the boards: Do it out of your own budget. This particular investment

corporation, chaired by Mr. Young, will try to accommodate a good number of

those requests in the short term.

Again, secondly, there are some major extensions

and renovations required to accommodate some of the consolidations that school

boards have decided to do. They have closed out some schools; they have moved

some people to an area. They have requests, for example, because they are

reconfiguring and because the student populations in certain buildings are

increasing, they need a cafeteria which they never had before. They may have

only had 100 students before and the custom, because they are all from local -

they might have all gone home to lunch. Now, the same school might be serving

three communities. There is no prospect of sending them home. They have to have

lunch in school, and rather than have them eat at their desk and so on, which

happens in some schools, the boards in certain areas, part of their planning

says: We need a cafeteria. So you get a cost that in some cases runs well beyond

what the normal operating budget could accommodate, and those types of issues

are being dealt with through this fund.

It is true that the fund - I think the historical

record will show that over a two-year period since Confederation there has not

been anything that comes close to $50 million made available. At one point in a

previous administration, since 1989, there was a year where there was $20

million made available at one point because that was seen to be a major

investment. The annual investments have been in the range of $8 million and $10

million before that, and that $20 million (inaudible) went back to $4 million.

So, over a two-year period, a large amount of money.

We are continuing to investigate, and Mr. Young is

leading this. There are many, many major companies and corporations, and local

companies as well, interested in the idea of private/public partnering which is

occurring in our neighbouring provinces of Nova Scotia, New Brunswick, and

Ontario, whereby private investors raise the capital, build the school,

(inaudible) the building, and lease it back to the school board. Now the school

board has complete control with respect to the educational programming and so

on, but the cost of actually building it is borne by a private sector investor;

in other words, a lease/buy-back arrangement. So we are investigating that

further, hoping that this $50 million fund might actually be able to become $100

or $150 million; and there are lots of expressions of interest.

So, rather than have to do new school construction

over an eight- or ten-year period, which would be the norm, if we have enough

interest and if it is done in compliance with the appropriate public tendering

legislation and so on in the Province, we will accelerate the opportunities to

get the educational needs, on a physical (inaudible) side, done more quickly

than we ever could have imagined before.

Our focus this summer will be addressing the

recommended air quality improvements, because there are a number of those that

have to be done, addressing immediate repairs and renovations that have to be

done, also committing to the construction projects that were already sanctioned

by the old construction board, and any other new construction and major

renovation projects that we can also accommodate within the short term.

MR. G. REID: On that private/public

partnership, government itself would still control the schools and what is

taught in them?

MR. GRIMES: Absolutely!

MR. G. REID: Because I was listening to a

commentary last week by one of our (inaudible) friends who was saying that

basically she was worried that if (inaudible) happened, a company like IBM would

not only control the school but control the minds of the individuals in it. I

don't happen to believe it. I think it is a good idea. I think IBM has

(inaudible) in Nova Scotia. I would certainly like to see one in my district

like that, because at least you would be assured that you would have decent

computers.

CHAIR: Thank you, Mr. Reid.

Harvey Hodder, and then we will go back to Mary

Hodder.

MR. H. HODDER: Well, at twenty after ten we are

CHAIR: Moving right along.

MR. H. HODDER: Two people have asked questions

and we have not gotten to the critic. We know that we are going to be here for a

while.

CHAIR: I was just thinking the same thing,

Harvey.

MR. H. HODDER: For the last hundred minutes

that we have been here, Roger has taken up ninety-two of them.

MR. WHELAN: You are going to take up another

fifteen before you start.

MR. H. HODDER: The Member for Harbour Main -

Whitbourne can be guaranteed that he is not going to get an early lunch.

MR. G. REID: I figured we would give everybody

fifteen minutes and come back, so I could have kept on going.

MR. H. HODDER: I just wanted to, first of all,

Minister, say how delighted I am that 2.1.04 appears in the way it does.

I assume, from my comment in the House last year,

that they could not have found the dollar that I said I would give them if they

could match it. I am talking about denominational commission. (Inaudible)

eliminated, it certainly is consistent with the approaches that I have espoused.

I would like to go right to - thirty years ago we

had 1,200 schools. We had 391, I think, this year; data that came by my desk.

How many schools are we going to have next year in this Province?

MR. GRIMES: I don't know at this point, Mr.

Chairman. It is an issue with which the school boards themselves are grappling.

From what I have heard, with respect to meetings that school board have

conducted and public plans that they have announced, it seems as if there may be

in the range of twenty or so closures this year.

One particular board on the Burin Peninsula, for

example, by resolution of the board, made a motion shortly after they were

advised of their teacher allocation, that basically they were going to do no

school closures this year. They would study it further and, even with the

reduced teachers, they would explain to parents that they would rather have some

program reductions for a year, if they have to, rather than close schools

immediately. So boards are empowered to make that kind of decision.

Other boards, for example, like District 5, are

undergoing a major reconfiguration. Even one town, Grand Falls - Windsor, are

closing out four schools and reconfiguring. So they are taking a different

approach altogether. So, depending on what the boards have done, my expectation

at the end of it is that it will likely be in the range of the high teens, and

probably not to exceed twenty in any event in this year.

Other boards, as we discussed earlier in Committee,

Mr. Chairman, like our biggest board in District 10, Avalon East, have indicated

that while they are only suggesting three or four closures this year - three, I

think, in the final analysis, that they decided upon just recently; one is

subject to a challenge in the courts on the basis of notice and so on - that

they do plan to do further consolidations, after another year of deliberation,

for the next year.

So we should expect that there are likely to be

some closures again for this school year coming up and probably the one after.

It will largely slow down after that because the boards are currently coming to

the conclusion that they are down to the minimum number of schools that they

will have to operate for the foreseeable future unless again there are, from

time to time, major shifts in certain areas of the Province because of some

economic reason and things of that nature.

MR. H. HODDER: A quick question - just data. We

were up to 162,000 students, I think it was in 1970-1971, and we are down now to

about 101,000; 608 I think is the number I got the other day. What is the

projection over the next five years? We know now, from our birth rates, what the

enrolment should be in five years hence. What are the demographics looking like

in terms of rounding off the data?

MR. GRIMES: The numbers that are being used by

the research analysis group in the Department of Education, and also by the

group that does the economic analysis and so on for the whole of government

through Executive Council, they are projecting that there will be in the range

of I think it is a 4.5 per cent or 4.6 per cent decrease in the student

population each year for the next four years, because the birth rates are

already accounted for, and that will be adjusted any one year if there are

changes because of out-migration or anything with respect to economic things

that occur in the Province. So if they find there has been a change in

out-migration patterns due to increased activity, or an increase in

out-migration activity because of some decline in economic activity, they will

adjust those numbers marginally.

Roughly, for purposes of calculation - and the

school boards concur with this because they are the ones involved and receive

these early kindergarten registrations, and they question their local health

authorities from time to time as to the birth rates and so on, they are

predicting, with us, that for each of the next five years, unless there is some

very strange circumstance, we can expect the student population to decline in

the range of 4,000 students a year. We are just over 100,000 now. In five years'

time they expect it to be down around 84,000 or 85,000.

MR. H. HODDER: Which is considerably less than

was predicted, say, five years ago. We were expecting it to level off at around

100,000.

MR. GRIMES: The expectation now is that the

school-age population, K to XII, could certainly go below 90,000 - again, unless

there are some countervailing circumstances in the Province - because the two

things I think that all of the statistical analysis have continued to show is

that not only has there been an out-migration pattern that has persisted, but

the birth rate has declined remarkably in this Province. I think that would be -

for the people who are doing the demographic research - of a greater concern to

them than anything else they have seen.

On the basis of population type of things, in

Newfoundland and Labrador today, because of the make-up of our population and

whatever other factors, we do not reproduce at a rate to sustain our population.

MR. H. HODDER: With the reorganization - and I

guess I should acknowledge that I went through the reorganization that occurred

within the (inaudible) system, having been active in the teaching profession in

the 1960s. It does take time and, having seen the adjustments there that

occurred with church-owned property moving to a public-owned property status,

and the transition that occurred over time, without getting into great detail -

because perhaps this is not the appropriate place to do it - what is the status

at the moment of negotiations that are occurring between, in particular, the

Roman Catholic Episcopal Corporation and the Pentecostal Assemblies of

Newfoundland and Labrador? - primarily with these, although there may be some

with the Seven Day Adventist as well, but not with the same categories. When do

we anticipate there will be a resolution to that problem? Has the government

taken any targets as to when there can be a satisfactory conclusion reached on

the use of the schools for educational purposes as the priority?

MR. GRIMES: It is a good question, Mr.

Chairman. I am glad it is raised and I will respond to it as briefly as I can.

It is a difficult issue at this point in time. I

guess the targets in terms of the government were outlined in legislation where

it clearly suggests that there be a twelve-month period whereby the school

boards and the denominational authorities would be given the opportunity to come

to agreement as to the disposition of properties when they are no longer needed

for education. If that is not successfully concluded - and we are into the fifth

month now, of course, because the act became effective in January - at the end

of that twelve-month period the Minister of Education and the government would

be given the authority to impose a resolution.

The difficulty occurs in that there are a number of

major renovations and so on to buildings that are already agreed to and slated,

most if not all of them involving former Roman Catholic properties, and

therefore involving the Episcopal Corporation, whereby a little bit of a wrinkle

was thrown into negotiations when the representative for that particular group

came to the table with - it was a committee of school board representatives

trying to work out this arrangement. It is an arrangement that is supposed to be

struck between the school boards and the denominational authorities and then

sanctioned by the Minister of Education.

The wrinkle is that there has been some difference

of opinion, I guess is the right way to put it, as to exactly what a school is

under the act and the period of time that it is actually a school. When is a

physical building actually a school? It is the whole notion that I was really

surprised at, that was brought forward by representatives of the Roman Catholic

authority, because that is the only place it has surfaced, suggesting that the

Schools Act requires instruction in a school for periods of time depending on

age and grade. I think it is three-and-a-half or four hours guaranteed for

primary and elementary students, and up to five hours for high school students

and so on, including break periods and overtime.

They are applying a very narrow definition,

suggesting that school boards only have unfettered use of the school during that

time. I think anyone who has an educational background understands - because

that is the argument sometimes even with people when they try to suggest that

teachers don't work that hard and so on. They say: Well, you only have a

five-hour day. The real answer is that a teacher's day... A teacher is like a

politician, sort of never off duty. They might actually be in the building with

the students for a certain number of hours, but even when you are in a grocery

store you can't say to some parent: I am sorry, I am not a teacher right now.

They happen to be a teacher all the time, and their day is a lot more than five

hours.

This particular negotiating group, on behalf of the

Roman Catholics, are trying to suggest that a school building is really only a

school for five hours a day, and that then these extracurricular activities that

occur afterwards, and things in the evenings where you want to meet with parent

groups, or have your school council meet, you would actually have to go and get

permission or authority to go in to use the building, and that there might even

be some charges for it; and if there are charges for use of the building after

hours, the question is: When is after hours for educational facilities? It is an

issue that we never, ever expected to be raised. It has proven to be quite

problematic and quite a surprise.

We hope that common sense will prevail so that any

particular denominational authority would not suggest that in the evening or on

the weekend, if you are running tournaments and those kinds of things - or even

practising, as they are in Mount Pearl; they need the use of the school for

their major spring production. They need it in the evenings, they need it on the

weekends so that they can go in, because they use the full of the gymnasium, the

full of the auditorium. They need access to the classrooms.

The suggestion was that maybe there should be a

charge for that and if the money accrued - because there are charges for use of

our schools now by school boards for outside groups, not for students; if there

are external groups, school boards have policies to charge a fee to recover the

janitorial costs and so on - the suggestion is that any fees that would be

charged would be proceeds that would be paid to the denominational authority.

Today if there are any fees, they stay with the board to be used in the school

to offset fund-raising needs for equipment, materials, supplies and so on.

So actually it would not be too strong a word to

suggest that the proposition put with a very narrow definition of a school,

(inaudible) these discussions, shocked the school board members. They were not

expecting it. It has not yet been officially removed from the dialogue, as I

understand it. They are convening meetings on a regular basis. They will

continue on. They hope to be able to resolve it. If not, the worst case

scenario, I guess, would be that a year would expire in negotiations and

discussions of that type and there may not be an agreement reached. Then the

Ministry of Education would, under the act, impose some kind of a resolution to

the issue.

If that pertains, however, there will be several

construction or major renovation type of projects that will not happen that are

now scheduled. They are funded, they are agreed to, but again there is no

circumstance whereby we can commit to spending major capital dollars out of the

development corporation on a property that was either formerly a Roman Catholic

property or Pentecostal property, if we don't have some agreement as to what

happens to it at the end of the (inaudible). This kind of a wrinkle that was

thrown into the discussion really set everybody back and has not yet been

resolved.

MR. H. HODDER: A supplementary. On the issue of

land title as opposed to building ownership, are these two things seen as

separate entities by the negotiation groups for the churches?

MR. GRIMES: As I understand it, yes. In many

cases they are and, as you would know through the integration process some years

ago, who owns the land and who owns the building often times are different

issues. They still are, but that does not seem to be nearly as contentious an

issue now as this other sort of thing that was thrown into it that nobody

expected to have to even deal with or discuss.

We are quite confident. I think Mr. Young and the

group are now suggesting to school boards - even in trying to establish clear

title and so on - that we should get to the position of maybe even accepting

affidavits from people rather than having them send us over boxes of documents

that in some cases are 100-or-more years old as to who owned the land, when,

where and what and so on. A clearer statement signed by somebody as to who

actually owns the property today, as opposed to who actually put that building

on it today, and who owns that building. As long as we know those two things

definitely then we can deal with this position.

Again, Mr. Chairman, I will give a quick example.

In District 5, in the old integration, a school that was an integrated school,

that had invested with integrated authorities through a process that happened in

the late 1960s, is on land next door, of course, to the United Church, because

it was a sort of United Church community. The interest was that the United

Church - now it is still alive and well and actually expanding a bit - wanted

the land for parking but had no use for the building. Nobody else in the

community wanted it. So the arrangement that was struck, actually, was to revert

the land back to the United Church, to call a contract for the demolition of the

building, and to share the proceeds.

They did a tender process for the demolition of the

building, which the board gladly gave up because nobody wanted it. Somebody paid

them x number of thousands of dollars to demolish it, and gave half the money to

the school board and half the money to the United Church. Those kinds of

arrangements are what we are contemplating they will do, based on the history of

who put what there and who owned it some time ago.

MR. H. HODDER: Of the $6 million that the

denominational authorities kept from 1971 onward, when Bill Doody let them keep

the interest - they kept accumulating it for nearly thirty years, amounting to

about $6 million - how much of that money has been transferred back to the

Province for capital expenditures?

MR. GRIMES: I think the number is actually on

page 181. I think that is where it appears.

MR. H. HODDER: Is that the $1,719,200?

MR. GRIMES: Yes. In reconciling (inaudible)

there was in the range of $5 million to $6 million in the funds of the Roman

Catholic, Pentecostal and Integrated. Because they had that arrangement

(inaudible) they had arranged some commitments on a cash flow basis, differently

than we would with capital procedures of government. So there was a

reconciliation done with the department whereby they honoured certain

commitments. The money did go to pay out capital commitments that they had made.

Then the remaining amount, which was the $1,719,200, was sent over as a couple

of cheques to the government by way of revenue.

MR. H. HODDER: So that is part of the $50

million?

MR. GRIMES: No. This basically has gone into

the general revenues of the Province, but it shows up here as coming back to the

department. It went to the overall fiscal circumstance of the Province at the

end of last year.

MR. H. HODDER: Of that $50 million, how much

has been already committed?

MR. GRIMES: Basically, at this point, it is in

the range of somewhere between $15 million and $17 million, that was earmarked

by the previous construction board. What they did last year in the beginning, of

course, was already accounted for, and the $50 million fund, Mr. Chairman, was

established by taking $25 million of brand new investment money, which had no

commitments to it whatsoever, and marrying it up with the $16 million or so that

the old construction board was to get this year as their second disbursement,

and then the $9 million from last year.

So of the remaining $25 million, which is really

the remaining two years of the three-year construction board funding, not all

that $25 million had been committed over the three-year period. So we have

complete flexibility with the $25 million, a flexibility that the board is now

dealing with and will determine at their next meeting with respect to some

remaining part of the other $25 million, which most likely will turn out to be

in the range of $5 million or $6 million. We have some commitments that are

between $15 million and $20 million that we will honour.

The other thing that will give us increased

flexibility is if we have successes, particularly in moving some of the

commitments in year three, although (inaudible). If that can be done,

particularly in new construction, through a private/public partner, with Johnson

Air Controls, with IBM, or any of those other groups, if they can carry some of

those commitments it will free up even more money that the development

corporation will have available to deal with more immediate concerns.

MR. H. HODDER: Before we enter into

private/public partnering on school construction, because there is a lot of

literature on that - some of it is interesting, some it is not so positive -

will the Province be putting forward a proposal for public consultation?

MR. GRIMES: Yes. I think the necessary features

of it, as we see it - Mr. Young and his group are doing some research on this

now. It is clear that we would have to have a public dialogue and a public

education process as to what it is, what are the features of it, what does it

mean, how does it really work, and those types of things. The group, led by Mr.

Young, is actually getting really to bring some recommendations forward to us

for consideration; because it is clear that if we move in that direction, we

think in a preliminary fashion, it would be advantageous and would help us do

even more.

We can only go there if it is understood that it is

beneficial and that it is an add-on that actually helps, and it does not

restrain us in any way from doing the things we need to do for the primary

purpose, which is education. So if we can satisfy ourselves that that is a good

idea and a good concept, then it will be helpful and will also provide the

integrity of the basic precepts of it, things like the Public Tender Act. In

order to convince people of that, I think it will definitely need some kind of

public process to investigate the pros and cons of the concept generally.

MR. H. HODDER: We will do a public opinion

first, just to see what people think, and then we will say: Now we are going to

go out and give you consultation. In other words, public opinion polls will go

up from $58,000 to -

MR. GRIMES: I had better check and find out,

for public opinion polls, what is budgeted for us.

MR. H. HODDER: Where is the budget here for

public opinion polls?

WITNESS: (Inaudible) public opinion polls, then

we are riding roughshod.

MR. H. HODDER: Of the $69 million that you have

in for Regular Operating Grants -

MR. GRIMES: Harvey, by the way, I will refer

that comment. I will make sure the Premier and the Minister of Finance and

Treasury Board hear that comment, in case they do not get the transcript of the

Committee right away.

MR. H. HODDER: The (inaudible) any initiatives

here (inaudible) with (inaudible). We can't risk... Anyway, of the $69 million

for regular operating grants, that would be under head 2.1.02.10, School Board

Operations, how much of that is anticipated to be of a quasi-capital nature,

general repairs? Do you have any breakdowns of that particular category? I am

not interested in how much per cleaning and that kind of thing. I am interested

in seeing how much of that really will augment the $50 million.

MR. GRIMES: I will refer the detail of that to

Mr. Young, but I would just put it generally in this particular context. When

Mr. Young's division sends out the grants under operating to school boards, we

basically have moved to a system of block funding. No matter how we send it out

to them they can spend it how they want to. They like that. They like the

flexibility to be able to meet their needs. When we send it out, and determine

how much each board is entitled to of the $69 million, we do have three or four

distinct headings.

There is instructional materials type of thing;

there is a maintenance and repair thing which I believe is the question you are

asking. Because that is the kind of money they will expend from their own

budgets to go along with some of the $50 million to get the physical plants up

to a state where they are happy with them and that they are better than they are

today.

There is a breakdown, because I know we dealt with

it in detail when I was involved in the discussions with the Labrador Board

about the possible separate board in Labrador West, or no separate board in

Labrador West. They were very interested to know in Labrador West how much money

did the board get in Labrador for the four schools that were in Labrador West,

and what did they get it for? Because when we send out (inaudible), we do send

it out under discrete headings, but then the school boards under the act are

given the ability to transfer from one heading to the other if they run into a

difficulty.

Just in the general nature, I am sure Mr. Young can

let you know what the headings are exactly - because there are three or four of

them - and what portion of the $69 million in total actually goes into boards

for maintenance and repair, as opposed to structural repairs and operations even

like (inaudible).

MR. YOUNG: Thank you. The answer specifically

to your question on repairs and maintenance in the $69 million is $7 million for

repairs and maintenance that the school boards have at their disposal for minor

roof repairs or painting or playground (inaudible).

MR. H. HODDER: A supplementary to Mr. Young

then. What kind of criteria have we established to differentiate between what is

capital out of current, and what should come through the Education Investment

Corporation? Have school boards been given the authority to call tenders

themselves for this work? Where is the cut-off where they would call it as

opposed to the Department of Works, Services and Transportation?

MR. YOUNG: The first question you asked is:

What is the cut-off? It is approximately $15,000. That will be a decision that

we look at in respect of the specific project and whether or not we think an

item should be capitalized over time or expensed in the year in which it is put

in. We are generally looking at about a $15,000 cut-off range for projects.

The other question as to whether or not tendering

will be done by the school boards or by the Department of Works, Services and

Transportation is one of the issues we are currently looking at. Because we are

hoping to use some of the $7 million that the boards have in their particular

pots to assist us with some of the work that we want to do through the capital

corporation. We are still working with the Department of Works, Services and

Transportation and the school board to make a decision on the level at which

tendering will be done. We do not want to unduly delay projects by having

lengthy periods of time for tendering, but by the same token we have to abide by

the spirit and intent of the Public Tender Act.

MR. H. HODDER: Relating that to the air quality

studies, then, therefore the air quality studies will show, when the reports are

all received - and I understand they are being received now - some need for some

changes. There won't be need for changes in all fifty schools that have been

assessed because that would be unrealistic, but there will be some changes. In

financing those air quality remedial programs, how much of that is going to come

out of that $7 million, and how much do you anticipate will be coming out of the

regular Investment Corporation?

MR. GRIMES: Again, Mr. Young will have it in

case (inaudible) incomplete or incorrect. Again, it will depend on the nature of

the recommended remediation. I (inaudible) heard from a particular school that

had a study done even before we started our own, because some had been done

prior to this, that one of the recommendations, for example, was as simple as:

You should clean out the air ducts in your washrooms. Obviously they will not

apply to anybody for that. They talk to Mr. Young or his committee and they

would say: You should clean that out anyway. That's a normal repair and

maintenance type of thing that you should not have to apply to.

The other thing I think that the boards have been

giving assurance of is that they will be expected to do those regular

maintenance things. Any project that gets over $15,000 or so to do as an

individual project they can consider applying for, and it would be judged on its

merits at that point in time. The major ones, when people suggest that you need

a significant ventilation system installed, they will obviously come to the

development board and that is where they will be funded from. Because there is

no expectation that the boards, with their regular maintenance or repairs

budget, are going to be able to accommodate those kinds of issues without them

being left with no money even to put on a coat of paint (inaudible), where they

would normally do that in the summer.

That is the discussion and dialogue that has

occurred between Mr. Young and the directors of the boards and the financial

assistance directors of the board at this point.

MR. H. HODDER: My concern of course, with the

air quality studies, is that we will deplete the $7 million in bits and pieces,

and leave the school boards with no money to carry out the programs that in

essence led to the difficulties, in some cases, that we already are trying to

repair now. That does not make any sense and so we have to be carefully

monitoring it.

On the new schools; school boards I understand have

been asked to identify their priorities. There have been some public

commentaries about new schools for places like Buchans, Clarenville, Sop's Arm,

Pouch Cove and New World Island, (inaudible). When do you expect the Corporation

to be able to give answers to those new construction programs?

MR. GRIMES: The Corporation itself is going to

meet tomorrow to review the new list. Because of the list even that you

mentioned some of them are already committed to and announced from the old

construction board and will be carried forward, like Buchans, like Sop's Arm,

and so on. When you hear tell of a proposal for New World Island, that has not

been considered by the old construction board. That will be the first time it

will be considered by this particular group. They will be in a position to be

able to suggest, on a priority basis, which of those they think should proceed

now. Because there is a time issue that is important and somewhat urgent and

they need to be done.

What I am expecting they will come back to myself

as the minister, and to the government with, is that others they would expect

they would rate as what they think are good ideas they would like to defer

further consideration on, until we see whether or not in the next few months we

are going to be able to do some private-public partners. So that they can let as

many of those as they possibly can be funded. New ones that we have not heard of

before, except now, arising, we might try to get as many of those considered

under a private-public partnering process, if at all possible, and commit

funding to ones that are deemed to be more urgent and critical to meeting school

board plans that are imminent. Like, today.

Because if they have to close a school - and again

if I may, Mr. Chairman, by way of giving an example - at St. Mary's, at Dunne

Academy, the school board has a plan for September coming, and the parents have

agreed. Myself and the member, Mr. Sparrow, met with them at St. Mary's and they

fully agree, there is no disagreement there, that the schools in the two smaller

communities should close and that they should all bus to a larger, expanded

school at St. Mary's. The school board has already made plans for that to occur

in September.

Between the construction board, this particular

group, some monies that the board itself has agreed to put in from its repair

and maintenance budget - because they were going to have to do significant

repairs on the building anyway if they were going to use it for any reason -, a

combination of needs to about $1.5 million to $1.6 million project because they

want to start right away and get finished for September. They will confirm the

arrangements on that.

Interestingly enough, you raised the question

before, that the only potential left to delay it is the fact that the Roman

Catholic Denominational Authority has not yet agreed on how to use the school

now and how to dispose of it in twenty or thirty years' time if it is no longer

needed as a school. That particular issue is complicating it a little bit. The

committee is going to deal with that issue tomorrow: what part of a project like

that is a commitment that must come from this fund and what is coming from other

sources.

When we have other ones that we are just now

hearing of - New World Island is an example - the board has sent their proposal

to us, as I understand it. I have not seen it; it is in the hands of the

officials on the board. There is an issue with respect to an area in Happy

Valley - Goose Bay where the board has looked at now closing the schools,

building a new single high school in the area using a couple of feeder schools,

because the school on the base might close at some point in time and all these

kinds of things.

There are some new ones that we have just become

aware of in the last few weeks that they will have to consider, and see which of

those could more appropriately be deferred three or four months until we can at

least have public dialogue that we need to have to come to some decisions as to

whether private/public partnering is going to be any part of this, or whether we

are going to have to do them all from the $50 million fund.

MR. H. HODDER: The New World Island one is

interesting because there is a significant cost benefit analysis there that I

assume has been done. Because it does essentially close five schools, I think it

is. The experience of that in the Island, or in the Province I should say - I am

more familiar with the Island

section of it - is certainly very positive. You go

back to the 1960s and you find out that that kind of arrangement in the long

term has benefits both in terms of programming and operating, and in terms of

teacher allocation. It has some very positive features to it. I had to put in a

plug for you, Gerry, because it is good, not because of any other arrangement.

There is real potential there.

MR. GRIMES: The key to the support of it, then

and now, if we do it, is the fact that parents would have to be convinced on

behalf of their students that there is an improved program.

MR. H. HODDER: Yes.

MR. GRIMES: That is what (inaudible).

MR. G. REID: They are all on side right now.

All the school councils are on side.

MR. H. HODDER: One last question, concerning

the Dunne Academy. One of the real problems we came across last winter was

tendering. For example, when Dunne Academy went to tender they called for a

tender for windows. We have three window manufacturers in Newfoundland. Their

specifications were such that only Euro-built windows that were coming out of

Nova Scotia could meet the specs.

Now they are doing all these air quality checks and

things. Are we now going to make sure that every single school board in this

Province is going to be told that when they write specifications, and they have

to tell their architects and business people, whoever it is, that when they

write their specifications that they are never to be written to exclude

made-in-Newfoundland products? Has that been done?

MR. GRIMES: I could not answer definitively if

it has been done with respect to us and the boards, but certainly it has been an

issue I think that has dominated two exercises that have occurred in the

Province. One was an exercise, I think, where the MHA for St. John's South

raised a related issue and had some discussion groups and so on, where people

brought that issue forward. It was, I think, determined as well that the crux of

the problem was not necessarily in the tendering process but in the

specifications that were put in, in the first instance.

MR. H. HODDER: Yes.

MR. GRIMES: As well, then when the minister in

the Department of Works, Services and Transportation that had responsibility for

the Public Tendering Act, in doing their review - I think in the one report they

have made back to us and our caucus they suggest that issue has dominated the

meetings, enough to the point that I think all of us are aware of it. The school

boards themselves, certainly in discussions I have had with them, in verbal

meetings that we have had with directors of the school boards and the chairs, we

have raised and discussed the issue.

Maybe the Deputy Minister or Mr. Young could let

you know whether we have actually followed up or not with written - if we have

not, I certainly think we should. The issue has been raised and everybody is

aware of the issue. If we have not followed up with a written memo to the boards

or a directive along those lines, I think we are very well reminded here today

that if we have not already done it we certainly should have, and should. I

don't know if we have. If we have not, I certainly give an undertaking that as

of today we will, because it is a critical issue in terms of not asking for any

preferential treatment.

MR. H. HODDER: No.

MR. GRIMES: Just asking that at least their

specifications clearly indicate that. Some of them will do enough research to

know that the specifications will not exclude the Newfoundland manufacturers

from being able to bid on (inaudible) in particular. Because we expect here that

not only the educational advantages, but it is another component, when there is

$50 million worth of work going out there (inaudible) in which we want to make

sure that Newfoundland companies that are qualified, capable and so on, and

there are many of them, at least get a fair shot at it. I (inaudible) you

raising the point.

MR. H. HODDER: The reason why I ask the

question is this. In my discussions with the Avalon West group, on this

particular issue they were very (inaudible) issue with the schools. The Member

for St. John's South has other examples. They were very non-apologetic for the

approach they were taking, and saw that the (inaudible) windows in their opinion

- based on no data that I could find that showed superiority - on their opinion

the (inaudible) windows were superior. Because they could make more of the parts

available, they could do this and do that, which was, in my opinion, a lot of

irrational justification. I wanted to give notice today that we will be

following up to make sure that this kind of situation does not occur either on

the work for the air quality or indeed on the general contracts. It is an issue

of: We have to make sure that our money is spent right here in this Province.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: A couple of years ago I raised

the same thing about Memorial University. Newfoundland companies were excluded

on the same thing. Certainly, I think as Harvey mentioned, that not only in the

funding, but there should be at least some discussion when monies are going out

from the provincial treasury, $400 million going to Memorial and various other

agencies out there, that there should be similar follow-ups, that we shouldn't

be excluding Newfoundland companies (inaudible. That was an issue two years ago,

if you remember an instance there.

MR. GRIMES: Mr. Chairman, I appreciate that.

Because the deputy indicates to me that it was an agenda item for one of our

recent discussions with school boards, but that we do not recollect having

followed up in writing. We will. Not only that, but as a result of the issue

being raised today we will also check and renew our efforts with Memorial

University and the Colleges of the North Atlantic.

MR. SULLIVAN: Yes, and the colleges.

MR. GRIMES: (Inaudible).

MR. H. HODDER: Also we need to send a message

out to the architects and all the engineering firms, the construction

association, and all of these groups. Because very often school boards are

getting the end-product, you might say, in terms of writing the specifications.

The other thing is this. There are all kinds of

rumours, and I do not know whether they are true or not, but someone said that

Memorial (inaudible) from the mainland. It is crazy.

WITNESS: (Inaudible) doing that every day.

MR. H. HODDER: That is why they should be

before the Public Accounts Committee.

AN HON. MEMBER: That is right, (inaudible).

MR. H. HODDER: Thank you very much, Mr.

Chairman.

CHAIR: Thank you. I had indicated earlier that

we will go to Mary, but Don has indicated he wishes to leave at 11:15 a.m., so I

will pass it to Don. Before I do, could someone perhaps show me in the heads

where the $50 million that we are referring to and have referred to many times

throughout the morning is to be found? Which head or a combination of heads?

MR. GRIMES: 2.1.09 on page 182.

CHAIR: Yes, there is $16,250,000 allocated for

this year.

MR. GRIMES: There was a $25 million one-time

cash payment right at the end of 1997-1998.

CHAIR: Okay, so that is where that figure is

coming from, it is an actual block of money from last year being spent this

year?

MR. GRIMES: Yes. The $25 million was actually

deposited with the corporation on the 31st of (inaudible).

CHAIR: Now I recall, okay.

MR. SULLIVAN: (Inaudible) special warrant, I

think, to (inaudible) it. (Inaudible) $41,250. (Inaudible) have there now?

MR. GRIMES: Yes, and the (inaudible) million

dollars will come on the first of April next year as it was the remaining money

that was in the old construction board.

MR. SULLIVAN: Seven million dollars or

something?

MR. GRIMES: Yes, the difference between that

and the (inaudible).

CHAIR: So it is $25 million basically carried

forward from last year as a result of the deposits -

MR. GRIMES: A one-time cash (inaudible) -

CHAIR: Sixteen million new dollars allocated

this year, and approximately $9 million which will be allocated effectively the

first of next year. That is where the $50 million is.

MR. GRIMES: Right.

CHAIR: Okay. That educates me. Don?

MR. WHELAN: Mr. Chairman, I was not going to

ask any questions, but I was listening to Harvey there and I lost track for a

little while. I am not sure whether he asked this or not.

Over the past number of years we have closed a

number of schools, I do not know exactly how many. I am wondering who has the

responsibility of the disposal of the schools, the ones that are not to be used

anymore. Who has the responsibility of disposing of them? In what way are they

disposed of? Are they sold? If so, who benefits from the sale of the buildings?

MR. GRIMES: That issue, Mr. Chairman, is one we

have touched on, as you have indicated, through previous questions. The

specifics of it are that it is an arrangement that is to be made between the

school boards themselves. The school boards themselves have title to and control

of the properties. They dispose of the properties, but for most of them

(inaudible) last year in part of your area for example. When it is no longer

needed for educational purposes and is to be disposed of, the board makes the

arrangement, but because the denominational authorities, in many cases, had

involvement in putting them there - some of them even actually putting some of

the cash in. In some cases they were actually built by the churches holus-bolus,

some of them, depending on the age of them. Some of them have some government

money in them, a combination, and so on.

They are instructed by the act to undergo a

negotiation with the appropriate denominational authority to agree to the

disposition of the property and how they will split the proceeds on an

appropriate basis, depending upon the historical infusion of monies over time

and so on. They can make any range of arrangements. They can sell the property,

they can demolish the property, they can rent the property, and they might even

rent the property to some group. I've heard of an instance in one community

where a group wants to buy a school and make it into a seniors home. Make some

renovations, have some apartments, for a seniors home.

The arrangement they will have to make with the

denominational authority is: Will they split the proceeds of the rent,

(inaudible) those kinds of things. That is between the school board and the

denominational authority that had some connection with the property prior to it

being invested in these interdenominational and then these non-denominational

school boards. So they do that. Hopefully they will be successful.

The only other thing that the legislation provides

is that after one full year of entering into this - because they have to enter

into a discussion about all the properties the boards are still using, about

disposition some time in the future. They are given a year to do that from the

time the act came into place in January 1998. If they have some remaining issues

where they are not able to come to an agreement by themselves, then the act

provides one further provision. It says: After one year, if there is no

agreement, then the minister will write an order and say: Here is what will

happen to the property if it is no longer in use, and here is who will get any

proceeds and so on.

They are hoping, and they would prefer, to make the

arrangements themselves rather than have whoever the minister of the day is just

walk in and say: We are going to sell the property and the church is going to

get half the money and the school board is going to get half the money, or

whatever. They would like to make the arrange