December

13, 1994

HOUSE OF ASSEMBLY PROCEEDINGS

Vol. XLII No. 79

The House met at 2:00 p.m.

MR. SPEAKER (Dicks): Order, please!

On behalf of hon. members, I would like to welcome to the

House of Assembly thirty students from Ascension Collegiate, Bay Roberts,

together with their teachers, Ed Wilding and Marlene Clarke.

SOME HON. MEMBERS: Hear, hear!

Oral Questions

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

MR. SIMMS: Thank you, Mr. Speaker.

This morning I listened with interest to an interview that

the Minister of Employment and Labour Relations did with the CBC Radio

Morning Show , and he was saying that he was still trying to negotiate an

emergency jobs program with both the Federal Government and his own Provincial

Government. In fact, I will quote from the interview: "You have to consider that

you also have to talk to your own people. You have to talk to your own

government, and you have to persuade them that this is the right way to go. You

know, if Tom Murphy was making the decision, this program might be in place

right now..." - quotes of that nature.

So I ask the Premier: Can he confirm that the minister indeed

is having difficulty getting the support of his own government for an emergency

job program?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: No, Mr. Speaker, he is not having any

difficulty. I heard the interview, and I have to confess, I was somewhat

surprised by the comments myself. Now, I put it down to the fact that the

minister probably wasn't fully awake at that hour of the morning; I don't know.

It may have been a variety of other things. I can only assume that the minister

was conveying the impression, which happens to be an accurate one, that he was

negotiating with the Federal Government; he was putting forward a proposal that

would see the Province involved in it as well, and that he had a responsibility

to take the lead within the Province as well as to negotiate with the Federal

Government.

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

MR. SIMMS: Mr. Speaker, I am not sure the minister is

awake at any time of the day, let alone that hour of the morning.

Let me say to the Premier that the word out of Ottawa, from

usually reliable sources in Ottawa, I say to the minister, is that the Federal

Government have already offered to put up $12 million in this program, and that

the problem is with the hesitancy of the Provincial Government here in putting

up its one-third share. Can the Premier tell me if that is factual or not?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: What the Opposition Leader just told me

comes as an utter shock to me. I don't know that there is an iota of truth in

it, and the minister confirms for me that there isn't, so I just remind the

Leader of the Opposition that his usually reliable sources are as unreliable as

they have always been.

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

MR. SIMMS: Mr. Speaker, my usually reliable sources are

sometimes his as well.

Anyway, Mr. Speaker, I don't want this to be considered some

kind of a humorous line of questioning because it is not. The question that

people are asking out there is why the procrastination? This has been going on

now for quite some time. The Premier is aware of the employment situation - the

unemployment situation I guess; surely, he is aware that this really is an

emergency situation. The minister, himself, says he is receiving dozens and

dozens of calls, as are we. We all know there is going to be 5,000 or 6,000

dropped off TAGS program in a couple of weeks.

In fact, Mr. Speaker, I heard today a story in Baie Verte

alone, the Social Services office out there has had fifty-eight new welfare

cases added to it in this month alone and that is a 15 per cent increase. So,

Mr. Speaker, it is a major crisis and it demands the personal attention, I

think, of the Premier. So I ask him, has he called or will he call his good

friend the Prime Minister, Jean Chrtien, and ask and insist for federal

support, if that is what this government is looking for, for an emergency job

creation program?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, I have complete confidence in

the minister who has been carrying on discussions - negotiations, I think he

said this morning in the radio interview. He has been carrying on discussions

with Mr. Axworthy, and there is no need whatsoever for me to interfere. The

Leader of the Opposition knows full well the position taken by the Federal

Government on these issues. I can't quarrel strenuously with their approach. Mr.

Speaker, I am quite prepared to leave it in the hands of the minister, I think

he is doing a good job.

MR. SPEAKER: A supplementary, the hon. the Leader of the

Opposition.

MR. SIMMS: Mr. Speaker, I think therein lies the problem,

the Premier being prepared to leave it in the hands of the minister, because the

reality out there - he may not be aware of it, I don't know, perhaps he is not

fully informed on this - the reality out there is that a lot of people are

facing poverty and for the first time in their lives, over the last couple of

months, have had to face the welfare lines. It is a really serious emergency

situation. I have often heard the Premier talk about make-work programs because

they don't really do much in terms of the long-term value for the economy, and

we agree, that is not the answer, but this is a different situation, it is an

emergency situation. So I ask the Premier, if all of the delay procrastination

is because of some negotiation with the Federal Government, why doesn't the

Provincial Government, as it has done in the past, at least put in place its own

program so that people could perhaps have a chance to put some bread and butter

on the table in the next little while because there are going to be enough

delays as it is.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, the Leader of the Opposition

with great respect is trying to find a parade to go out and lead. He has some

inkling that there may be something being discussed and he is rushing out to try

and find a parade to lead. The simple fact is the minister has been stating very

clearly what the position is. It is not certain at this stage. Leave it in the

hands of the minister and when there is something to announce he will announce

it.

Now, the minister just reminds me that contrary to what the

Leader of the Opposition has said there have been five separate programs this

year all of which have been cost-shared with the Province.

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

MR. SIMMS: Mr. Speaker, I resent the comments of the

Premier concerning my asking questions on this issue. We have been raising this

in the House for the last number of weeks and as usual the Premier has not been

listening. While he was in China, and while he was in Europe and all these other

places, I was travelling around the Province listening to people explain these

serious cases. I want to ask the Premier if he would stop this dillydallying,

this foolish attack on me because I asked the questions, and will he take action

today himself to try to get something put in place to help those people out

there?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, it is in the hands of the

minister. I have complete confidence in the minister otherwise I would ask for

his resignation.

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

MR. WOODFORD: Mr. Speaker, my question is to the Minister

of Works, Services and Transportation. In the last weeks the minister has tabled

the Public Tender Act exceptions from May to October. I would like to say to the

minister that between May and October there are a number of companies in the

Province, especially the companies that have to do with leased space, totalling

some $1 million, approximately eleven companies. I can take it from the amounts

involved in the exceptions it is coming early and playing Santa Claus for those

particular companies. Some of the names, Mr. Speaker, Ashley Holdings $53,000,

Fortis Incorporated $265,000, R & M Holdings $206,000.

I ask the minister if he could explain to the House why those

exceptions totalling almost $1 million are in his tender exceptions?

MR. SPEAKER: The hon. the Minister of Works, Services and

Transportation.

MR. EFFORD: Mr. Speaker, I will answer the question to

the best of my ability now and if there are any further questions I will take

notice and give the answers to the hon. member tomorrow.

One of the reasons for a lot of extensions of leases within

the exceptions of public tendering is the reorganization going on within the

Department of Social Services, and times the department will request an

extension for a year, several months or a year or whatever time until the full

re-organization is going ahead, and at the time of the complete re-organization

they will then ask the Department of Works, Services and Transportation to call

tenders for the property they require and also, any time where there is an

option to extend a particular lease, we will extend the option, but mainly, most

of the extensions we have given to date this year, is in the Department of

Social Services.

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

Humber Valley.

MR. WOODFORD: A supplementary, Mr. Speaker.

Nowhere in those exceptions, Mr. Speaker, does it mention

what the minister is saying. It mentions sufficient time in every one of them

but one.

Could the minister explain then, in all the exceptions here

including Fortis' $265,000, it was sufficient time - no time to complete space

requirements and no time to call tenders, Mr. Speaker, could the minister

explain why then there was an extension of two years for R & M Holdings for a

total tender call of $206,299 per year, until March 31, 1996, Mr. Speaker?

MR. SPEAKER: The hon. the Minister of Works, Services and

Transportation.

MR. EFFORD: Thank you, Mr. Speaker.

Mr. Speaker, I must admit I don't know who R and M Holdings

would be -

SOME HON. MEMBERS: Oh, oh!

MR. EFFORD: Well, I have a lot of buddies but I will have

to tell you tomorrow if that is an individual buddy; but what I will do, Mr.

Speaker, there are a lot of exceptions reported here and I cannot give him an

explanation for every individual exception in -

AN HON. MEMBER: You are the minister.

MR. EFFORD: I am the minister responsible and I take the

responsibility, but I will get the information for the hon. member on the

individual company, the company R & M you said or was it R & N, and I will bring

that in to the House of Assembly tomorrow.

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

Humber East.

MR. WOODFORD: A final supplementary, Mr. Speaker.

Could the minister tell the House if the exceptions to the

Public Tender Act since May, has anything to do, tied in to this new bill that

we are supposed to be dealing with this week, Bill 32, "An Act To Amend The

Public Tender Act", whereby government heads such as government ministers, would

have more flexibility in accepting tenders without going to tender?

MR. SPEAKER: The hon. the Minister of Works, Services and

Transportation.

MR. EFFORD: Mr. Speaker, that is absolutely not correct,

it is untrue.

The purpose of revisiting the Public Tender Act is to give it

more teeth and to be more accountable. I am asking for, in the new legislation,

the improvements in the Public Tender Act, is to make each minister responsible

for his or her own department when it comes to public tendering. Right now the

Minister of the Department of Works, Services and Transportation of the day is

the only minister responsible for the whole of the public tendering in the whole

of the Province of Newfoundland and Labrador. That is impossible for one

minister to control.

Mr. Speaker, what the new legislation will do is that each

minister will be responsible. In the case of the Department of Health, all of

the hospitals across this Province, no one minister can keep those hospitals

accountable and the purchasing of all the departments. Then in the new

legislation the Ministers of Health, Education, or whoever will be responsible

for his or her own department.

MR. SPEAKER: The hon. the Member for Waterford -

Kenmount.

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

Minister of Finance and Treasury Board. The government has announced its

intentions to deny motor vehicle licences to those who have not paid their

school tax. Driver licences are issued and retained pursuant to driver

competency. Paying school tax is totally unrelated to driver proficiency, and

the collection of school tax is a civil matter. Does the minister plan to

unilaterally take away a valid driver licence without due process and without an

impartial and independent hearing?

MR. SPEAKER: The hon. the Minister of Finance and

Treasury Board.

MR. BAKER: Mr. Speaker, the hon. member is referring to a

bill that was before the House and has been withdrawn and has not been put back

on the Order Paper again. That is not an indication that we intend to do this

unilaterally. If that is done it will be done with the full concurrence of the

House of Assembly.

MR. SPEAKER: Supplementary, the hon. the Member for

Waterford - Kenmount.

MR. HODDER: Mr. Speaker, I ask the minister, is it the

government's intention to withdraw the bill or is it simply, as the minister has

said, that he delayed it so he could add in another issue and another

collection? The minister has said that he withdrew it with the intent of adding

in collections for I think spousal support, for child support, and that he would

introduce it later in this session.

MR. SPEAKER: The hon. the Minister of Finance and

Treasury Board.

MR. BAKER: Mr. Speaker, I already answered but I will

repeat the answer again for the hon. gentleman in case he didn't hear. The bill

has been withdrawn from the Order Paper and it will not be put back before the

end of this particular session. If it is brought back in the spring at that

point in time a full debate will ensue.

I can't guess what a Cabinet will do next March or April, so

I can only say that right now it has been withdrawn and it is in the process of

being looked at.

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

MR. HARRIS: Mr. Speaker, my question is for the Minister

of Health. I wonder would the minister be able to confirm to the House and

explain why employees at the Health Sciences Complex are currently being trained

to handle, from a data point of view, admissions of children? This appears to be

contrary to the minister's statements publicly that there are no decisions made

about the closure of the Janeway Hospital, and I wonder if he can tell us why

this type of training is taking place if, in fact, no decision has been made?

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

MR. L. MATTHEWS: Thank you, Mr. Speaker.

Any training that is being undertaken at the moment at the

Health Sciences Complex with respect to staffing is being taken in the context

of what they are doing ongoing on a day-to-day basis. It has nothing to do in

fact or in substance with any plan that might or might not come forward in the

future with respect to the redevelopment or the rationalization of health care

in the city.

Thank you.

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

John's East.

MR. HARRIS: Mr. Speaker, could the minister, then,

explain why it is employees are being told that all employees will be so trained

by March 31 in order to be able to accommodate the admission of children to that

hospital? It seems to fly totally in the face of minister's assertions, and if

there is such development taking place, why are not more people involved in it?

An awful lot of people would be affected by this, not only employees, but also

people who fund-raise for the Janeway, people who are concerned about children's

health and children's medicine. All of these will be affected by this, and yet

there appears to be no consultation going on other than the back room meetings

that the minister's officials may be having.

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

MR. L. MATTHEWS: Thank you, Mr. Speaker.

The proposition that the hon. member is trying to allege or

create is almost preposterous. If there were a decision made already, or today,

to do anything of the sort that he is trying to put forward, that is, relocate

paediatric services to the Health Sciences, it would take years before that

could actually be done. Space would have to be provided, and all that sort of

thing.

In fact, as I have told this House on two or three previous

occasions during the last couple of weeks, no such decision has been taken with

respect to any facilities, any institutions in St. John's, as to whether or not

any will be changed in their usage or amalgamated with others or not. So what he

puts forward is really a scaremongering tactic of sorts to try to incite some

undue concern amongst health-care-givers in this Province who are out there

doing yeomen service, putting forth an exemplary effort, providing health care

in all of our facilities, and the member tries to put them in a position where

they are worrying about their jobs, worrying about their futures. I would say he

has more to worry about with respect to his job than the health care workers in

our system do at the moment.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. the Member for Baie Verte - White Bay.

MR. SHELLEY: Thank you, Mr. Speaker.

My question is for the Premier.

In view of the new policy the Environment minister made last

week on the importation of waste, can the Premier tell the House the status of

the Cliff Resources proposal to bury asbestos waste in Baie Verte? Is this

proposal now dead?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: I don't declare anything dead. I presume

it has to be subjected to the process, and if it meets the requirements, it

isn't dead. If it does not meet the requirements, then it is dead.

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

Baie Verte - White Bay.

MR. SHELLEY: First of all, Mr. Speaker, the question was

for the minister, himself, today, just to get him to confirm what he had said

last week.

I am sure that the Premier, the minister, anybody who has

visited the site in Baie Verte, realizes there is nothing short of an

environmental disaster in the pollution problem there. Now, I have to ask the

Premier this: If that proposal is dead, what plan does this government have to

clean up that mess in Baie Verte?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: The government has no immediate plans to

clean up any mess in Baie Verte, Mr. Speaker. We will see how the company that

is still operating on that site continues, and what happens. We will watch it

carefully and see what needs to be done, but the government has no resources to

rush in to clean up any mess in Baie Verte.

MR. SPEAKER: A final supplementary, the hon. the Member

for Baie Verte - White Bay.

MR. SHELLEY: Mr. Speaker, I can assure you, that is no

comfort to the people in Baie Verte and surrounding area who look at this site

every day and the time is long past now, Mr. Speaker. I would like to ask the

Premier, not just this government, will they continue to have discussions with

their federal counterparts to address this problem immediately, not put it on

the back burner for another three, four or five years, as this problem gets

worse by the day, I say to the Premier. It has to be acted upon immediately, not

three, four or five years down the road. Will he speak with his federal

counterparts to see if they will address this problem?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, I don't know, at this moment,

without having it go through the complete process, whether or not what was

proposed could be brought in to fill in those spaces in Baie Verte. That would

have to follow the policy guidelines and go through an environmental impact

assessment. That would be one sure way of filling the holes, then it could be

covered over, seeded and be in a much more presentable and a much safer

position; but whether or not the policy would exclude what has been proposed to

date or what might be proposed next year or the next, I don't know, you would

have to let it take its course and go through the normal processes.

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

Extern.

MR. J. BYRNE: Thank you, Mr. Speaker.

I have a question for the Minister of Municipal and

Provincial Affairs. The minister stated some time ago that assessments in

Municipal Affairs are becoming computerized and that it would speed up the

process. Could he give us the status of the assessment process?

MR. SPEAKER: The hon. the Minister of Municipal and

Provincial Affairs.

MR. REID: Mr. Speaker, I have recently written a number

of communities in the Province explaining to them that even though we have added

a substantial amount of computer equipment to our Assessment Division and also

hired some extra staff, which we only did a month or so ago, we are still

behind. What is happening now, Mr. Speaker, is that a number of the assessments

that were long past due, we are catching up with, and hopefully, in the new

year, with the new staff and new equipment, we will be able to do a larger

number in 1995. The hon. member is absolutely right in his assessment of that

particular division of my department. We have been really slow in the last

number of years for a number of reasons. Give me a chance and give the

department a chance, and I think the hon. member will be satisfied with next

year's production from that particular division of my department.

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

John's East Extern.

MR. J. BYRNE: Thank you, Mr. Speaker.

Mr. Speaker, in my district, in the Town of Bauline, it has

been seven or eight years since they had an assessment done. The Town of Logy

Bay-Middle Cove-Outer Cove, are in their tenth year without an assessment done.

Now, this is unfair to the Towns and to the citizens - unfair with respect to

lost revenue for the Towns, unfair to the citizens when they are hit with a big

increase. Could the minister inform the Towns when they can expect an up-to-date

assessment?

MR. SPEAKER: The hon. the Minister of Municipal and

Provincial Affairs.

MR. REID: To repeat very quickly, in part of the last

answer that I gave, I did admit we were a little behind but, Mr. Speaker, I

cannot allow the hon. gentleman to stand in this House and leave the impression

that municipalities don't have the authority to generate lost revenue.

Municipalities in this Province do not need an assessment to generate revenue.

Municipalities, at any time, can predict, if they want to, or whatever, and

raise taxes in their communities that would be at a level probably comparable to

an assessment level. So any time a municipality finds itself strapped for

dollars, please, don't stand in this House and leave the impression that the

reason they are strapped for dollars is because an assessment was not done,

because that is not correct.

MR. SPEAKER: A final supplementary, the hon. the Member

for St. John's East Extern.

MR. J. BYRNE: Thank you, Mr. Speaker.

That is the minister's solution - raise the mil rate all the

time, but if you raise the mil rate and then you get a new assessment, well,

then, the town is hit twice, or the taxpayers. Mr. Speaker, my understanding is

that - I am getting to the question that I want to ask - Municipal Affairs

averages the cost of assessments over a six-year period, the Town of Logy

Bay-Middle Cove-Outer Cove pays approximately $8,000 per year for an assessment

and, Mr. Speaker, they are in their fourth year now over and above the six

years, paying $8,000 a year basically for a computer printout. Would the

minister consider paying back to the Town of Logy Bay-Middle Cove-Outer Cove the

extra money they have paid, basically, for a computer printout?

MR. SPEAKER: The hon. the Minister of Municipal and

Provincial Affairs.

MR. REID: Mr. Speaker, the system that Municipal and

Provincial Affairs is using now is a system that was introduced to this Province

by the previous Conservative regime. That system basically charges every

municipality in the Province, on a per capita basis, a certain amount of money.

The Cities of Corner Brook, St. John's and Mount Pearl, and all the larger

centres, are charged a substantial amount for their assessment. In fact, Mr.

Speaker, I would say that it would probably cost them more doing it under this

system than if they had to get it done themselves, but there is a reason for

that. The reason is that there are a lot of smaller communities in the Province

which can't afford to pay large dollars for assessment services. So I suppose

the rich help pay for the poor, if that is the analogy you want to use.

That is the system we have had in the Province that I

basically spoke on back when the Member for Waterford - Kenmount and I were on

the Federation of Municipalities. We spoke out against that. We have accepted

it. I don't know when it was, 1986 or 1987, that it was brought in, and we still

have that particular system in place. There has been a number of representations

to me from the larger communities in the Province to do away with that scheme.

The problem, the dilemma that I have with it, is that if we do away with the

assessment scheme that we have in the Province now, where will the poorer and

smaller communities in the Province get the money to pay for assessments?

MR. SPEAKER: The hon. the Member for Ferryland.

MR. SULLIVAN: Thank you, Mr. Speaker. I would like to

direct a question to the Minister of Health. The minister has introduced Bill 61

in this House, which provides for a new levy system on insurers to recover

hospital service costs and medical care costs associated with third party

liability claims from motor vehicle accidents. I ask the minister: will he

inform the House how much money the government expects to recover on those

claims?

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

MR. L. MATTHEWS: Thank you, Mr. Speaker. The levy system

that he refers to is indeed embodied in the bill that is before the House. We

anticipate that this year we will collect without cost for litigation

approximately $2.6 million. Normally, that money in the past has been collected

by virtue of having to go to the courts and make the case and get it, and that

is costly. An arrangement has been made with the insurers of automobile vehicles

in the Province whereby they have accepted the proposition of an assessment per

vehicle that they ensure in the Province. That will not only ensure us the $2.6

million approximately that we anticipate getting but it will put us in a

position of not having to incur any costs for litigation to recover that amount

of money.

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

Ferryland.

MR. SULLIVAN: Thank you, Mr. Speaker. The department has

certainly analyzed what it is going to recover. I'm sure the department, too,

has analyzed the impact, as he just mentioned, that it is going to have on

insurance premiums in this Province. I ask the minister: would he now tell this

House what impact, in levies he referred to, it is going to have on insurance

premiums in this Province?

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

MR. L. MATTHEWS: Thank you, Mr. Speaker. The levy that

the member refers to will probably not have any impact on insurance rates. It is

saving the insurers as well as the government considerable time and expense in

dealing with claims that arise. The amount of the levy that we will be assessing

per vehicle is, I think, $11.61. In fact, I know it is $11.61 per vehicle, and

that would be the maximum net result that it could have in terms of impact on

rates. But I want to assure the member, that is not contemplated, as I

understand it, by the insurers or by the government, so this really is a win-win

situation all around. It makes things very neat and tidy for the insurance

companies, it provides for the recovery of money for government, and it is

probably one of the smartest things that the industry and the government have

agreed to do together in a long time.

MR. SPEAKER: A final supplementary, the hon. the Member

for Ferryland.

MR. SULLIVAN: Thank you, Mr. Speaker.

What the minister has said is we are going to have a user-pay

concept. The Premier said a year ago in September: The user fees may in the end

prove to be right, and if they are, I believe we will all have to resort to user

fees in order to protect the health care system. I ask the minister if

government has identified other areas where they plan to apply the user-pay

system.

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

MR. L. MATTHEWS: Mr. Speaker, the question, itself, is

not a factual one and is not a properly focused one, because this is not a user

fee that we are imposing. It is an assessment that has been agreed to by

insurers and the government. It is an arrangement where it will save the

insurance industry money and it will provide the government with additional

money. It has nothing to do with user fees per se in the health care system.

MR. SPEAKER: The hon. the Member for Placentia.

MR. CAREEN: Thank you, Mr. Speaker.

My question today is for the Minister of Health, whom I do

thank for returning my call on Sunday night, Sir. Since that call, in which I

made a complaint and let you know about the goings-on at a private nursing home

in Dunville, a residence where senior citizens, the frail, had been left without

heat from Thursday night until after midnight on Sunday, Sir, did you have a

chance to check into it?

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

MR. L. MATTHEWS: Mr. Speaker, yes. The hon. member did

call me late Sunday night with respect to a situation that did not seem to be

satisfactory in terms of senior citizens in a long-term care home in his

district.

When I got in to the office on Monday morning, I spoke with

my deputy, my officials, I had some briefing notes prepared for me on it; we did

some checking on it and I can tell the member that as we speak, I have an

official of my department in that home, in that area, to check out the

situation. We are on top of things and we will look after the seniors and the

elderly.

MR. CAREEN: I thank the minister.

MR. SPEAKER: Question Period has elapsed.

Presenting Reports by

Standing and Special Committees

MR. SPEAKER: The hon. the Member for Burgeo - Bay

d'Espoir.

MR. GILBERT: Mr. Speaker, at this time I would like to

present the report of the Government Services Committee. The committee has

reviewed and approved for passage without amendment throughout the remaining

stages in the House of Assembly the following bills,

An Act To Amend The Public

Tender Act,

An Act To Amend The Mining And Mineral Rights Tax Act,

An Act To

Amend The Public Service Pension Act,

An Act To Amend The Teachers' Pension Act,

An Act To Amend The Financial Administration Act,

An Act To Amend The

Newfoundland And Labrador Computer Services Amendment Act, and

An Act To Amend

The Public Service Pension Act.

On motion report received and adopted.

Petitions

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

Bay.

MR. SHELLEY: Thank you, Mr. Speaker.

I am pleased to rise today to present a petition on behalf of

my constituents from the communities of Westport and Purbeck's Cove. I will just

read the prayer of the petition. We, the undersigned residents of the district

of Baie Verte - White Bay do hereby petition the House of Assembly to direct the

Department of Employment and Labour to immediately implement an emergency

employment program. With the economic conditions which exist we find ourselves

in a desperate situation. We ask the minister and his government to show

compassion and understanding in this urgent matter.

Mr. Speaker, after listening to the responses made by the

Premier today on this very serious, urgent situation, and by the last two words

in this petition I can see why people would sign it. They asked for some

compassion and some understanding. Day after day we came into this House, during

the last fifteen or sixteen days - we are starting to lose track now, because

day after day I come down and have to go back to my office with the same calls

coming in, and tomorrow morning again, day after day, hoping it is going to be

tomorrow.

Also, day after day maybe the minister has misled or

misinformed us, but I really believed that as of last week we were going to have

some reaction as to this emergency response. He said at one point, hopefully by

Friday. When he said hopefully by Friday we thought it was a good chance for

Friday past, but of course there was a storm but there is no excuse for

yesterday, or for today. What about tomorrow I ask the minister?

Mr. Speaker, from the sound of the interview this morning I

really do not know where this is being held up, and who is really listening and

understanding. I was really, really disappointed to hear the Premier's response

to those questions today, because I know that the members across the floor are

getting the same calls. I know the minister got them because my own district

people, after they call me they call him, too. They ask me if they should call

him and I say, that is up to yourself. He is the minister so why not ask him.

We are talking about people who cannot afford to put food on

their table. Some ministers think it is an exaggeration. Well, I had it again

this morning, Mr. Speaker. Two more people said to me that by Friday of this

week they are going to social services and they have never been there before.

They range in age from thirty-five to thirty-seven years old with two or three

kids in the family. They are going there for the first time in their lives. They

are seasonal workers, loggers, who went to Prince Edward Island for ten months

and still never got the insurable weeks they need.

These are the people who try and get work, Mr. Speaker. They

are not people scrounging around to get back on UI every year. They actually go

out and try. They were living with a bit of dignity up to this point. We are a

week and a half till Christmas. This House is going to close on Friday.

SOME HON. MEMBERS: Oh, oh!

MR. SHELLEY: By the sound of it this House will close on

Friday. It is a possibility it will close on Friday. If you want to make a point

of that it should never close until we get a response to this emergency response

program. Keep it open. I will stay here until Christmas Eve if I have to, to get

a response to this emergency program because it is urgent. The jokes that are

made across the House I have no time for because each one of them know how

serious it is.

Thank God we have three people on the other side so far who

had the gumption to stand up and say, yes, I will speak for my constituents. The

Member for Twillingate stood up and supported it because he knows darn well he

is getting the same calls I am getting. I made sure I checked, and I told the

Leader of the Opposition before, that in the Baie Verte office of social

services there were fifty-eight new cases in one month. With that growing rate

what are we heading into?

Then we hear the response by the minister to different media

saying they are going to go along with social reform of the country, and

committees are travelling all over the Province. All of that has to be blocked

out for one minute. All that has to be blocked out and you have to say: I know

there is social reform, I know there is federal government, but this government

and this Premier who is sitting here today should take the leadership and not

say it is in the hands of the minister, and say to his minister: Listen

minister, we are going to support you, there will be an emergency job program

tomorrow or today, not Friday, not next Monday and it is really sickening day

after day.

I don't want to come and present a petition tomorrow, I would

rather get up tomorrow and say: minister, thank God you delivered a program,

that is what I would like to say and we would commend him for it; but you are

late there is no doubt about it, you are late. There are people every day - and

the calls keep coming, I am sick of hearing the same call come back to me I tell

the people who are calling me, and now, I have to go back again, tomorrow

morning between nine and twelve, before we come down here, and say to them

again: well, I hope tomorrow; I hope tomorrow and, day after day, Mr. Speaker,

we have to say that and that is not good enough. It is not good enough from this

government.

Yes, negotiations and discussions continue; the Premier says

discussions are continuing, but disgusting is what it is, not discussions.

Disgusting that we cannot take the leadership here in our own Province and say:

yes, we have a very serious situation and statistics would prove this to be

probably the worst employment situation in this Province -

MR. SPEAKER: Order, please!

The hon. member's time is expired.

MR. SHELLEY: - and the welfare cases are growing and

growing. Mr. Speaker, we need an immediate reaction and I pray to God that this

minister can stand up tomorrow and make his Ministerial Statement.

MR. SPEAKER: The hon. the Member for Green Bay.

MR. HEWLETT: Thank you, Mr. Speaker.

I would like a few words in support of the petition from my

colleague from Baie Verte - White Bay.

Mr. Speaker, when you listen to the hon. the Premier, either

in this Assembly or in public speaking engagements he has made, you wonder if he

lives in the same Province as the rest of us and certainly in the same Province

as the constituents I represent. If one were to listen seriously to the Premier

you would have to take a line from the song: You know that the future is so

bright, I got to wear shades. Well I don't know what colour glasses the Premier

is wearing these days, Mr. Speaker, but the people I represent are not

altogether in very prosperous times.

MS. VERGE: He wears blinkers.

MR. HEWLETT: Yes, maybe the Premier wears blinkers, not

shades.

Mr. Speaker, it is late in the season; Christmas is coming

and there has been no sign of any kind of a program from the federal and/or

provincial government. This government was elected first and foremost to look

after the citizens of this Province and so far they seem content to throw their

plight into the arms of the federal government and hope that the federal

government are somehow going to reciprocate and come up with some sort of

program.

One hears the federal MP who represents my area, Mr. George

Baker, putting all sorts of stuff on the radio about there is federal money

available, you know, where is the Province? We want to get on with creating some

jobs. One hears the provincial minister say he has to talk to the federal people

and hopefully we are going to work something out. I kind of wonder, Mr. Speaker,

if the people are not just being led on in this period leading up to Christmas,

if both levels of government are just sort of playing off against each other,

shifting blame from one to the other, hoping that the situation or the people in

the plight will go away.

Well, Mr. Speaker, in my district, the people who can go away

have already gone away, they are in Alberta and in British Columbia. Those who

are left cannot go away either because they cannot afford the air fare or the

first and last month's rent to live in boom towns like we have in B. C., they

are stuck with remaining in Green Bay and the sad reality is, they have only one

option if they are not sixty-five years old, Mr. Speaker, their option is a trip

to the local welfare office.

It is rather unfortunate that in large sections of the

Northeast Coast today, Mr. Speaker, in districts represented by Progressive

Conservatives and Liberals, that the main growth industries in that neck of the

woods, Mr. Speaker, is welfare and retirement, and without those two industries

there is practically nothing for the people. Now, retirement at least is a

relatively steady income, Mr. Speaker, but you have to reach a certain age to

get there. The problem we have is that a lot of people who are middle-aged and a

lot of people even with young families have a long time to go before they can

expect to get a federal pension, Mr. Speaker, and it would look like they are

going to have a long time to go before they get a real job from this real change

government, so, Mr. Speaker, we need something now, we needed it yesterday and

we certainly need it tomorrow.

Thank you, Mr. Speaker.

Orders of the Day

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

MR. ROBERTS: Your Honour, before we call the first order

of business, I wonder if we could attend to a matter. I have consulted outside

the House with the members on both sides and I believe there is a willingness to

take tomorrow, which would normally be a Private Members' Day, and have it

devoted to government business. I raise the matter now in the hope that Your

Honour will enquire as to whether there is an understanding, and if so, if we

have unanimous consent, then we can make our plans accordingly.

As is I think well known and as I believe is universally

agreed, it is in the interest of everybody if we can conclude our business by

the end of this week. I want to thank my friend for Twillingate who says that he

would not raise any objection if in fact the House wished to take tomorrow and

go with government business. I wonder if Your Honour could raise that with the

House.

MR. SPEAKER: I would prefer to put it in the form of a

motion to the House, and that would be that it is moved and seconded.

AN HON. MEMBER: (Inaudible).

MR. SPEAKER: So moved then.

Motion, that tomorrow as Private Members' Day be dispensed

with and that it become a day for government business or for the regular Orders

of the Day.

MR. SPEAKER: All in favour of the motion?

MR. HARRIS: Point of order, Mr. Speaker.

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

point of order.

MR. HARRIS: I want to acknowledge that I was consulted by

the Government House Leader prior to this. I've been having some doubts since I

heard the Premier's comments today, but I assume that the postponement of

private members' business today would mean that the first debate -

AN HON. MEMBER: Tomorrow.

MR. HARRIS: Tomorrow, rather. It would mean that the

first Private Members' Day would be the continuation of the Member for

Twillingate's matter when we resume sitting. Would that be the understanding?

MR. SPEAKER: It is still on the Order Paper, I believe,

is the -

MR. ROBERTS: That (inaudible) my understanding, Mr.

Speaker, yes.

MR. SPEAKER: - continuation, yes, the second day.

MR. ROBERTS: It would either come to a vote if nobody

wished to speak, or members would speak if they so wished.

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

MR. W. MATTHEWS: Thank you. Just to that point, Mr.

Speaker. Since we are forgoing Private Members' Day tomorrow - ordinarily

Private Members' Day we would conclude at 5:00 p.m. Can we agree that we finish

at 5:00 p.m. tomorrow, or - I'm just wondering what the Government House

Leader's thoughts are on that.

MR. ROBERTS: I would have no problem agreeing we will

rise tomorrow at 5:00 p.m. The House may have to sit a little extended time on

other days this week, regular government days, but tomorrow let's - I think

people have made arrangements. In fact, I'm not sure if there is not a reception

tomorrow afternoon at 5:00 which members would all want to -

SOME HON. MEMBERS: (Inaudible).

MR. ROBERTS: Is it ours? Oh well, then there is no

question, Your Honour, if it is ours. I would say, Your Honour, we are working

through tonight to get to that happy point with a brief intermission for the

Opposition reception which I understand is scheduled for the close of business

tonight.

MR. SPEAKER: Is the House ready for the question on the

motion?

All in favour, `aye'.

SOME HON. MEMBERS: Aye!

MR. SPEAKER: Contrary minded, `nay'.

AN HON. MEMBER: Nay!

MR. SPEAKER: So is that a nay or -

MR. ROBERTS: Your Honour, would you please call -

MR. SPEAKER: Excuse me. Did I hear a `nay'. It does have

to be unanimous, I believe.

AN HON. MEMBER: Aye.

MR. SPEAKER: Aye?

MR. ROBERTS: I thought I heard no nays but - how is that

for a sentence?

MR. SPEAKER: A nay or a bray, but I heard something, so I

thought I would check it out. Thank you.

The hon. the Government House Leader.

MR. ROBERTS: The motion has been adopted? Is that...?

MR. SPEAKER: Motion carried.

MR. ROBERTS: I'm not sure about the syntax of "I thought

I heard no nays." I'm not sure how that is going to look in Hansard.

Your Honour, would you be good enough to call Motion 4. That

is a leave to introduce. Then we will carry on with the substantive debate,

beginning with

An Act To Amend The Mining And Mineral Rights Tax Act. Motion 4

first.

Motion, the hon. the Government House Leader have leave to

introduce a bill, "An Act To Amend The Family Law Act, The Reciprocal

Enforcement Of Support Orders Act And The Support Orders Enforcement Act,"

carried. (Bill No. 64)

On motion, Bill No. 64 read a first time, ordered read a

second time on tomorrow.

SOME HON. MEMBERS: (Inaudible).

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

MR. ROBERTS: Your Honour, I would say to my friends that

I think when they see that bill they would concur it is a very wise one. It

simply is a bill, now that we've given leave to introduce it, to authorize

social workers to appear in the Provincial Court in certain very narrow and

defined circumstances. My guess is the hon. Member for Humber East will be the

first to endorse it when she sees it, and I suspect whoever deals with social

services matters on behalf of the Opposition would as well. But let's wait and

see. I understand it is printed. It will be distributed as soon as it is here.

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: I'm sorry?

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: Your Honour, I would say to my friend for

Grand Bank, as I've said before, what the government is going to ask the House

is very simple. With the exception of Order No. 2 we intend to address all the

matters on the Order Paper. That is why we put them there.

Your Honour, could we -

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: I would say to my friend for Burin -

Placentia West, he will have at least a half-day Christmas, I assure him.

Your Honour, could you call Order No. 25, second reading of

the mining and mineral rights tax act amendment bill. My friend the Minister of

Finance and Treasury Board will introduce the bill.

Oh, I am sorry; my friend, the Minister of Natural Resources

will.

Motion, second reading of a bill, "An Act To Amend The Mining

And Mineral Rights Tax Act." (Bill No. 36).

MR. SPEAKER: The hon. the Minister of Natural Resources.

DR. GIBBONS: Thank you, Mr. Speaker.

Mr. Speaker, to me this is a good news bill. It is a bill

initiated by some review of our mining taxation to encourage the mineral

exploration sector and mine development in this Province.

Back in 1993, in the winter, when we brought down the Budget,

we announced that we would be revising this particular act, the Mining and

Mineral Rights Tax Act, to ensure a positive climate for investment in mineral

development in Newfoundland and Labrador. The legislative changes to implement

these budget decisions have now been finalized by an interdepartmental committee

made up of representatives of my department and the finance department.

In addition to the significant changes that we are making

here to help encourage the industry, there are a number of housekeeping changes

being made as well, and that is why this piece of legislation seems so thick;

there are just some word changes.

In passing this bill to have effect as of January 1 coming,

we will have completed another commitment of the Province's tax reform process

and fulfil action point thirty-seven of the Strategic Economic Plan.

There are a number of significant points I would like to

make. I don't want to go through clause-by-clause in the bill, but I may refer

to some. There are a number of significant changes we are making, the first one

relative to a mining tax credit. This new tax credit will allow a company to

deduct from mining tax the amount of corporate income tax payable to

Newfoundland in the same year for the first ten years after achieving commercial

production. This is covered by clause 3 of the bill, and it is an amendment to

section 4.1 of the act.

While the cost of this initiative could be quite low, it is

expected to attract significant attention from potential investors and new mine

development, so that the positive benefits to the Province will far outweigh any

negative from this particular deduction.

A second point is related to depreciation. Presently we have

a ten-year depreciation

schedule in the Mining and Mineral Rights Tax Act for

investment in mining ventures, a ten year schedule. It is a very long time at

only 10 per cent per year. Federal corporate income tax legislation allows a

much more rapid rate of depreciation, at 25 per cent. What we are doing here

with the change in depreciation is bringing our Mining and Mineral Rights Tax

Act in line with the federal Income Tax Act, and these measures will delay the

timing of the receipt of some tax revenues because the write-off can be done

sooner, but we would encourage small mine development, and we would pick up on

the taxes in the later years.

A third point relates to a processing allowance in the

processing of minerals. The processing allowance will be enhanced to provide a

higher rate of 15 per cent for smelting activities, as opposed to the general

rate of 8 per cent, and a new minimum benefit level of 15 per cent of taxable

income. This change will encourage investor interest in developing local

smelting presence. We do not presently have a smelter in Newfoundland and

Labrador, and we believe that by improving this particular deduction we may have

some opportunity in the future for getting some further processing, maybe as

much as a smelter.

A fourth significant point relates to exploration expenses.

Revisions to this legislation allow for a five-year carry forward of exploration

expenses incurred anywhere in the Province as opposed to the current treatment

which only allows exploration expenses incurred off site on an annual basis.

This measure could, in particular, extend the life of mining operations by

encouraging further on site exploration, particularly - I emphasize,

particularly - with regard to smaller mines, mines that would normally be seen

to have a short life.

These last three significant points that I mentioned on

depreciation, processing allowance and exploration expenses are covered in

section 4 of the bill and

section 5 of the act. We are making some other changes

which, as I said earlier, are primarily housekeeping. These changes include the

addition and amendment of certain

definitions. A variety of new

definitions are

added for clarity; the elimination of some unreasonable deductions that were

difficult to interpret and approve in certain cases, clarification of the powers

and responsibilities of inspectors, improvements to fines - I emphasise the word

`improvements': what we are really saying here is an increase in the fines for

any infringement on this law - replacement of an inefficient mining tax review

board with other appeal mechanisms and clarification of the liabilities of

directors. In particular, we are disbanding the mining tax review board. For the

last twenty years, we have had a mining tax review board that we have only used

once in twenty years, and we see no need to maintain such an expensive structure

for appeals. Overall, the legislation will be much clearer for the industry to

understand, making it easier for potential investors to evaluate and more

effective for compliance purposes for those who have to implement this act.

I would like to say a few words about the financial impact.

Almost all the changes of a financial nature in this bill affect a profits-based

tax component of the Mining and Mineral Rights Tax Act, from which this Province

is currently receiving almost no revenue, to the extent that investors are

encouraged to consider exploration in the Province which may lead to the

establishment of new mines paying taxes. The tax enhancements may serve to

improve resource development and improve taxation revenue. The magnitude of the

revenue improvement would be dependent, of course, on the many economic and

financial factors relevant to each project. These include the quantity and

quality of the resources, market demand and price, etcetera. But, in general,

ladies and gentlemen, these changes to this act are very positive steps towards

encouraging new investment in exploration in this Province and new investment in

mining development in this Province and I believe that we are already seeing the

benefits.

This year, 1994, we have seen more significant discoveries

than in any of the recent years in my memory. In the past few days I was given a

briefing in which I was told that we had eleven drills operating on the Island

of Newfoundland, itself, right now this month, drilling on some significant

prospects. In addition to that, of course, we are all aware of the major

discovery in Labrador which, to my mind, also came about because of people being

encouraged to explore because they saw these changes being put forward.

Mr. Speaker, I am pleased to move second reading.

MR. SPEAKER: The hon. the Member for Burin - Placentia

West.

MR. TOBIN: Thank you, Mr. Speaker.

I want to say that I had the opportunity - the minister has

given me some information as it relates to the bill. I -

AN HON. MEMBER: (Inaudible).

MR. TOBIN: You're having a party?

AN HON. MEMBER: We're going to a party.

MR. TOBIN: Oh, I thought you and Roberts were hosting a

party. I was going to say, that will be an expensive one.

AN HON. MEMBER: It won't last long.

MR. SULLIVAN: It would be expensive and nobody would show

up.

MR. TOBIN: I am sure you contributed two dollars each.

MR. SIMMS: You could have asked Alec Snow to chip in with

you.

MR. TOBIN: Mr. Speaker, I want to be very, very brief on

this. I am very happy to have the opportunity to go through this bill. Actually,

I sat down with the minister and he offered me a briefing with his officials,

but unfortunately, I was unable to make that briefing. The minister did provide

me with the briefing notes and, Mr. Speaker, anything that is going to enhance,

help develop or further the mining industry in this Province, we, on this side

of the House, support it thoroughly.

Mr. Speaker, the minister has stated what the bill has

contained and we certainly hope that the minister will - it has reached the

point in time, basically, for mining industry in this Province to receive

support and to be encouraged to go out and do what is needed to be done. The

minister mentioned in his comments that there are eleven drilling operations

taking place on the Island. It is encouraging news, Mr. Speaker, to know that is

taking place.

We, on this side, Mr. Speaker, support anything that is

positive. As I said, the minister made reference to the fact that drilling

operations are taking place on the Island. There are eleven rigs, I believe he

said, operating on the Island. I sincerely hope that he will continue to support

and become directly involved in the mining industry.

As we are aware, in 1993 the Newfoundland Budget basically

dealt with this, offering a mining tax credit and other aspects to the mining

industry in this Province dealing with the exploration and other financial

impacts. Rather than get up here and prolong or delay the discussion on this, I

say that basically we support what the minister has said as it relates to this

bill.

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

MR. HARRIS: Mr. Speaker, I also would like to assist in

encouraging the development of mineral activities in the Province, but I do have

some concerns that with this legislation and other legislation before the House,

such as the EDGE corporations, we are creating an environment in which the only

people who pay taxes are the individuals in this Province. We see the Federal

Government now getting into a situation where they want to back out of any

obligation to the provinces, particularly for some aspects of social services,

health care, education and that sort of thing, and are talking about

transferring tax points to the Province.

Well, Mr. Speaker, in the case of Newfoundland and Labrador,

if we start transferring tax points to the Province of Newfoundland and we have

all the legislation that is being proposed saying that corporations don't have

to pay taxes well, then, what it means is that individuals all the way down the

line are going to have to bear the tax burden as individuals, as opposed to

corporations. In addition, without being able to raise sufficient revenues to

look after the level of services we have become used to, particularly in the

areas such as health care, education and social security, as a result of these

taxes there won't be anything left to tax except the individuals in this

Province. And we will have a regime where taxation is being taken away from the

corporations and being transferred to the individual.

This is a trend that has taken place in Canada over the last

twenty years, where the share of income taxes paid by corporations has reduced

dramatically and the share of income taxes and other taxes paid by individuals

has gone up.

I will give you some examples. In 1992, a company called

Royal Oak Mines, which we are familiar with, made a pre-tax profit of $11.4

million, and paid income tax at a rate of 0.9 per cent. Less than 1 per cent of

its pre-tax profits was paid in income tax. That is a company called Royal Oak

Mines, which we are familiar with as being the operators of the Hope Brook gold

mine and also involved with the Giant gold mine in Yellowknife. There are

companies such as Noranda, for example, which in 1992 made $104 million in

pre-tax profits and paid income tax at a rate of 1.9 per cent. I only have to

ask the Speaker what income tax rate he paid last year on his income, or other

members of the House who are paying income tax on incomes at a rate considerably

higher than 1.9 per cent or 0.9 per cent. I say that because throughout this

country the trend seems to be to let the big corporations off the hook. For

example, the Molson group of companies in 1993 had a pre-tax profit of $175

million. On that $175 million, they have paid income tax at a rate of 5.5 per

cent, or less than $10 million of this $175 million in profits that they make.

Mr. Speaker, I think we would do well to do something to

encourage activities for exploration. I don't know if a ten-year tax holiday for

income taxes for all mining companies in the Province as a result of this

regime, is maybe going too far, Mr. Speaker. I think that obviously, something

to encourage that type of activity is important, but to go so far as to say

there will be a total tax holiday for ten years - in some cases, the life of a

mine is measured in only ten years. So, what we are saying here is that there

may be a commercial deposit that is going to be totally extracted in a period of

ten years and this Province, in terms of income tax, will get, in fact, no

benefit in terms of corporate income tax from these companies. So creating a new

regime for the corporate world, the EDGE corporations, the mining companies,

they will pay no taxes but yet we keep telling ourselves how rich and valuable

we are in natural resources. If that is true, if we have such valuable, rich

natural resources in this Province, then we ought not to give away our right to

tax these corporations in order to encourage investment.

Mr. Speaker, the rise in value of the shares of Diamond Mines

Corporation as a result of the find in Labrador certainly wasn't dependent upon

mineral tax regime which would guarantee them tax-free status for ten years.

Whether or not that mines goes into production or not I don't know. Maybe the

whole thing is designed as a share promotion on the Vancouver stock exchange.

Who knows what goes on in the mining ventures and the stock markets, from time

to time, with relation to this kind of activity?

I see, Mr. Speaker, there have been in the past some very

good incentive programs for mineral exploration. The Federal Government had a

tax incentive for exploration where you could deduct from income taxes, monies

paid into an exploration fund that could be deducted from taxes because you

would be encouraging mineral exploration. I think mineral exploration is the

key, and anything that can be done to encourage mineral exploration should be

emphasized rather than the other end of it, and once the minerals have been

found, the people of this Province should obtain the maximum possible return for

the minerals that are in our ground and one of those ways, of course, is by

corporate income taxes.

I don't see why corporations who mine minerals ought to be

exempt from taxes and corporations who manufacture or sell fish, or manufacture

fish-related products are not exempt from income tax, if they make a profit, or

any other corporations who have a taxable income ought to be paying income tax

the same as everyone else. This is an unlimited type of thing, Mr. Speaker. What

exactly are the amounts of tax relief being granted here nobody really knows. We

can forecast, we can guess, but just as with the EDGE corporations, which we

discussed yesterday, there is no indication whatsoever as to what this is going

to cost in terms of foregone revenues.

Mr. Speaker, obviously, the minister is very pleased with

this legislation because he believes that it is going to encourage further

mineral production and mineral activity, and I have no doubt that it will, but

at what cost to the taxpayers of this Province who are going to have to raise

the revenue that would otherwise be obtained through mineral production some

other way? It is all very well to say it is going to generate jobs and economic

activity, sure, it will, as does every corporate activity in this Province.

Every time anyone hires another employee, every time anyone engages in business

activity in this Province, it generates employment and generates revenue by way

of retail sales tax, and generates other spin-off development, but there has to

be a very, very strong reason why all commercial mineral production, according

to this act, is now going to be on the basis that they are going to be remitted

for a period of ten years, their income tax in any year in which there is

commercial production which is defined at 60 per cent of capacity for thirty

days. That is what is defined as commercial production in this act. I have no

hesitation, and I don't think anybody in this House could disagree that we, as a

Province, would like to encourage mineral exploration, mineral activity, just as

we would any other activity, but why are we looking to our revenue sources and

saying, `Well, we will forego all corporate income tax revenue on this level of

activity'? Why would that not apply to Abitibi-Price, or Corner Brook Pulp and

Paper? Why would that not apply to every other corporation engaged in industrial

or economic activity in the Province? Why would it not apply to Newfoundland

Light and Power? Why would it not apply to them, that they would forego the

revenue there? Is it going to apply to IOC in Labrador? I don't know. The

minister shakes his head, so I assume he is talking about new mineral activity

or new commercial enterprises engaged in after this date.

It is a very, very significant tax concession being given on

a general basis, not with any promise of any particular development. I can see a

negotiated deal, as a result of a very substantial investment being made by a

particular company in an area where the Province may know it is very difficult

to attract investment, and saying, well, for this one case we will make a

particular exception because of the size of the investment engaged in, because

of the marginal nature of a particular find, perhaps, that we would engage in a

regime which would provide the tax concessions for a particular case; but to

say, holus-bolus, to all future mineral entrepreneurs that we will not collect

any income tax is a very potentially expensive giving-up of our corporate income

tax power and a potentially large revenue from this Province.

With that, Mr. Speaker, I conclude my remarks on this bill. I

have no quarrel with the intent. I have no quarrel with the principle of

encouraging mineral development, but I would want to see substantial caps put on

the foregone revenue that is contained in this bill.

Thank you, Mr. Speaker.

MR. SPEAKER: The hon. the Member for Menihek.

MR. A. SNOW: Thank you very much, Mr. Speaker.

I am pleased to rise and speak for a few minutes on Bill 36.

AN HON. MEMBER: How long?

MR. A. SNOW: Two or three minutes, that's all - just a

few minutes.

AN HON. MEMBER: We have somewhere to go at 5:00 p.m.

MR. A. SNOW: We have to deal with the business of the

people rather than the business of going out and enjoying the parties of

Christmas. We have to look after the people's business. We have a responsibility

to look after it.

MR. ROBERTS: Do you want to stay here tomorrow night

after 5:00 p.m.?

MR. A. SNOW: If necessary, if that is what it takes to

look after...There is only one member who wasn't invited to tomorrow's

festivities, I am told. The only member who wasn't invited to tomorrow's

festivities is the Government House Leader, I am told by a member from the other

side. He said he ruined one last year. He has almost ruined the Liberal party,

so now he wants to come to our Christmas party; he will ruin that, so they

wouldn't invite him.

MR. ROBERTS: (Inaudible). If we only had an extra week I

would have had a fourth seat in Labrador.

MR. A. SNOW: The Government House Leader knows that greed

gets a lot of people into a lot of trouble and he, above anybody else in this

House, should recognize that. He should recognize that greed, whether it is

greed after seats or greed after money, whatever it is, it is going to get him

into trouble again.

MR. SULLIVAN: Escobar proposal.

MR. A. SNOW: Escobar proposal, is it, the four seats?

Now, Mr. Speaker, to get back to the people's business, this

Bill 36, I am pleased to see that the minister brought the bill forward. It is a

bill that should encourage more mineral exploration in this Province. This

Province is in dire need of more economic activity and mineral exploration

should enable more economic activity in the long run.

AN HON. MEMBER: (Inaudible).

MR. A. SNOW: It's happening now. Yes, there is some

exploration that could stimulate more economic activity in the mining industry

apart from just the spin-off from the exploration, I am not discounting that a

couple of million dollars or four or five, ten million dollars is not a lot of

money but it is not a lot of money when you see that mineral exploration of the

type that was done and discovered. The ore deposit in Boise Bay, that could

generate a tremendous amount of economic activity for this Province. It is

legislation that is necessary, it is legislation that is late in coming, it is

legislation that people of this Province should have, especially the mining

industry, Mr. Speaker.

The mining industry is an area that has been neglected by

this government, neglected since this government was elected in '89; it is not

just this particular piece of legislation that is necessary to correct but some

of the things that occurred in the mining industry. Mr. Speaker, some of the

things that occurred we have to address, the government should address the

problems with regard to the Workers' Compensation Act as an example, Mr.

Speaker.

The Workers' Compensation we know, affects every employer and

every employee in this Province, one of the employers who employs the most

people in this Province, pays the highest salaries in this Province of any

private sector employer, Mr. Speaker; they hire more people than anybody else in

this Province; they are one of the world's leaders in the mining industry and

this Province does not even see fit to appoint a representative from the mining

industry or specifically from the Western Labrador mining industry, a

representative on the Workers' Compensation Board of Directors, but that is the

type of recognition that is necessary to allow the company and its employees and

the employer, access to what is happening within the Workers' Compensation

field, Mr. Speaker, so it is not -

If you want to really encourage the mining industry to

properly develop and to have proper representation in the actions of this

government, you just cannot sit here and pass a law in a vacuum; you have to do

other things and one of those things is to allow the mining industry to have

representation, whether it is the employer or the employee, on the Board of

Directors of the Workers' Compensation.

My good friend and colleague from St. John's East talked

about what we are changing in the country, how this country is changing how we

are collecting revenue for government, Mr. Speaker, how there is a larger

percentage coming from employees, from individual contributions rather than from

corporate contributions. Well, I only say, Mr. Speaker, that I believe firmly

that everybody should pay their fair share of taxes and it is necessary to have

a framework that allows the capitalistic system to work - that is the world we

are living in - you have to allow it to work, you have to allow it to properly

develop thus creating more opportunities for employment which will allow more

opportunities for these people to pay taxes.

The people in my district pay the highest per capita income

tax in this Province, and they make good money, Mr. Speaker, they are the

highest paid miners in the world and they are the best miners in the world. The

Iron Ore Company of Canada is the best iron ore producer in this world today;

their product is the yardstick when people are buying iron ore products whether

it is pellets or concentrate, their products are what measures the quality of

ore anywhere in this world.

Now, Mr. Speaker -

MR. ROBERTS: (Inaudible) you are on a roll right now

anyway, (inaudible).

MR. A. SNOW: I know one Ed who should quit, Mr. Speaker,

and everybody on the other side is agreeing with me, they are nodding an

agreement that there is definitely one Ed who should quit.

Mr. Speaker, this bill should encourage more mining

explorations. It will allow for new mines operating, a greater freedom in

processing and secondary processing which is something towards which this

government should be moving more. We have to create a tax regime that is going

to allow and encourage mining companies not to just ship out raw product, which

is happening just south of Nain now. That should never be allowed to occur in

today's economy here in this Province. We have to put together a tax regime that

will encourage more investment, not just take the raw product out and ship it

out.

A prime example is what has occurred in Western Labrador with

the pellet plant, which is secondary processing. It is a value-added. That is

where the jobs are, that is where we can get more employment, more wealth for

this Province, by having secondary processing. That value-added in the pellet is

where the most jobs are in Western Labrador. I'm hoping that bills like this can

be improved upon, that we will encourage more of this secondary processing. Not

just a smelting process, Mr. Speaker. That is important, but we should use the

tax regime to encourage more investment for the secondary process and do it also

in a manner that can be punitive, if you will. If they do not have a value-added

process in this Province then we should be taxing them to get more revenue from

the mining companies that are operating, or anybody that is operating.

This applies I believe very similarly to the fishing

industry, any resource. We should be encouraging, giving them more tax

concessions or tax breaks, whatever you want to call it. We should be

encouraging more investment to create especially more secondary professing,

because that is where the real jobs are, that is where the real wealth is.

Anyway, Mr. Speaker, thank you very much for the opportunity

for speaking to this bill. I support most of the changes that are presently in

(inaudible).

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

Bay.

MR. SHELLEY: Thank you, Mr. Speaker. I just rise to make

a few brief comments on this particular piece of legislation. I commend the

minister for bringing in this piece of legislation. I think it is much needed at

this time, especially in a time when the potential for exploration in the

Province in mining is - I think it is coming to a peak, that we are going to see

some major developments in mining very soon in this Province. In the Labrador

area as recently.

Also in my own district of Baie Verte - White Bay the

minister well knows that the potential for mining development there looks very

promising. Nugget Pond, the company Noveder out of Quebec, are now in Baie Verte

at the Nugget Pond site. It looks like almost a certainly that we will have a

full-fledged mine there by the spring or next summer, with maybe eighty to 100

men. I think those are the numbers right now that I hear. That is great news for

everyone I say in the mining industry.

It also serves as a catalyst to other potential mining

investors around the country and even outside the country to look and see that

the government has legislation in place, like the minister has already said,

that is clearer legislation, something that is not too confusing to prospective

investors in the Province, and that is a good sign. I'm glad to see that in this

piece of legislation. Also we have another potential. Pine Cove is another gold

mine on the Baie Verte Peninsula, and now also, as the minister knows, there is

a potential at the Rambler mine site. There has been some new construction that

went on there.

All in all, as a province, but also in my district in

particular, this industry is very important. I just wanted to make a few brief

comments and to commend the minister on this piece of legislation. I hope that

it continues and that improvements are made to encourage - anything to encourage

exploration and also the start up of actual mines in this Province, I encourage

the minister to keep that up. We have to remember that there are small companies

that look to invest also, and not just the larger companies, and we have to make

ways for them so that they are not turned off by legislation, or by tax breaks

in this Province that would encourage them to come in and set up business.

I again commend the minister for this type of legislation. I

hope that we are going to see a lot more (inaudible), especially this spring and

throughout this summer, throughout the whole Province, and I hope so in the Baie

Verte - White Bay District. Thank you, Mr. Speaker.

MR. SPEAKER: If the hon. the Minister of Natural

Resources speaks now he will close the debate.

The hon. the Minister of Natural Resources.

DR. GIBBONS: Thank you very much, Mr. Speaker, I thank

the hon. members opposite for their comments. I agree with them. This is a very

positive - I will tell the hon. Member for Baie Verte - White Bay, it is very

positive for small companies as well as large. It encourages something like a

Nugget Pond to be developed, and that is now registered with Environment for

mining assessment, so it I believe will become a mine. There are a lot of

positive things happening in this Province on mining.

Thank you very much, Mr. Speaker. I recommend the bill for

second reading.

On motion, a bill, "An Act To Amend The Mining And Mineral

Rights Tax Act," read a second time, ordered referred to a Committee of the

Whole House on tomorrow. (Bill No. 36)

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

MR. ROBERTS: Your Honour, could we call Bill No. 52,

which is Order No. 26, The Leaseholds in St. John's Act?

Motion, second reading of a bill, "An Act To Amend The

Leaseholds In St. John's Act". (Bill No. 52)

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

MR. ROBERTS: Mr. Speaker, this bill addresses and

hopefully resolves a very long-standing problem that has occupied quite a lot of

the time of this House in the last twenty years.

Well legislation was first introduced in the 1920s - during

my first term in the House, before somebody else says it - and then we got on

with it somehow for a period of fifty or sixty years but in 1977 matters had

come to the point where it was necessary to adopt further changes to the act.

Mr. William Marshall, who is now Mr. Justice Marshall of the Court of Appeal,

was the proud father of the legislation and I guess all we are doing now is

tidying up one or two of the loose ends if I may. The legislation falls into two

parts; the first simply extends the present legislation by one year and that is

found in Clause 1 of the bill. All we have done is delete the words, `1994' and

add the words, `1995.' So if the House will adopt that it will simply continue

the status quo for the calendar year 1995. If the House does not act, the status

quo comes to an end on December 31, 1994.

Now, Mr. Speaker, that brings me to the second part of the

bill which is subject to proclamation. The bill very briefly or the act which

(inaudible) very briefly addresses a situation that grew up here in St. John's

because of a practice that was adopted in the last century. It carried through,

for at least the first part of this century, of leasing land upon which homes

were to be built and upon which commercial buildings were to be built for long

periods of time as opposed to the more modern practice of simply selling the

land, selling the freehold interest and allowing the purchaser of the land to

build his/her home or his/her business but up until the modern practice

leases, ninety-nine years was a norm and I have even seen them for longer

periods. Many of these leases, particularly in the older part of St. John's, the

area south of LeMarchant Road, east of Springdale Street and west of Prescott

Street, just in a general description, many of those leases were for very

nominal rents in modern dollars, although they may have been substantial rents

in 1890 or 1900.

In the 1920s the House moved to adopt legislation that gave

the lessees the right to purchase the freehold interest in the land in return

for a set payment - twenty times or forty times, it is set out in the act. It is

twenty times in the case of the newer leases, the post 1921 leases, and forty

times in the case of the older leases. Now that has given rise to a host of

practical problems over the years. There have been all sorts of difficulties as

to which lease was what, problems in getting hold of the lessors, many of whom

were originally residents of England who have since died. The matters are being

administered by estates, sometimes there is difficulty in getting people to sign

the necessary conveyances and even if they agree to sign there is often a fuss,

a delay and a trouble. So it has really been nothing but a make-work scheme for

lawyers and lawyers in this Province have lots to do without taking advantage or

getting involved in this kind of make-work scheme.

MR. BAKER: (Inaudible).

MR. ROBERTS: My friend from Gander, the Minister of

Finance, wants to know how lawyers will make any money. I assure him that

wherever there is a lawyer there will be money made by that lawyer.

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: Money lost? Perhaps. But certainly there

will be money made by the lawyers. I have infinite faith in my brethren and my

sisters at the Bar to flourish even in a desert.

Mr. Speaker, the solution -

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: I suspect this is an anti-lawyer joke, Mr.

Speaker. I am prepared to hear it, though.

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: I see. I say to my friend from Humber

Valley, the one he might wish to use is the difference between a dead lawyer on

the highway and a dead skunk - the skid marks by the skunk.

Your Honour, now that I have offended every lawyer within

hearing...

MR. SULLIVAN: What clause is that?

MR. ROBERTS: That is under the ancient lease, I say to my

friend from Ferryland.

Your Honour, the solution we suggest is very straightforward

and is described in detail in the explanatory notes to the bill. Now I know

members have read the notes assiduously, and have compared them with the act

itself. My friend from Gander has done it several times, but for those who have

only been through it once or twice, let me attempt to summarize what this bill

will do if it becomes law.

First of all, we ask the House to extend the area so as to

embrace all of the boundaries of the City of St. John's. Now that is intended

particularly to address a problem in an area called Penetanguishene out near

Windsor Lake where, for some reason, a developer a number of years ago, in the

fifties if I recall correctly, decided to develop residential property out

there, a subdivision, using relatively short-term leases of thirty or forty

years, so it addresses that situation. All of these people will now come within

the terms of the act and have the right to purchase. The right to purchase is

absolute. The price is a matter that has to be set according to the formula in

the act.

Secondly, Mr. Speaker, the act will vest title in the city,

will vest the lessor's title, the landlord's title, the freehold interest, will

vest it in a corporation, the body corporate, known as the City of St. John's.

The city will have the obligation to pay compensation to the lessor, to the

landlord, to the owner of the freehold interest, in accordance with the

established formula. We are not tampering with the formulas.

What that will do is end forever the necessity to try to

track down the heirs-at-law, or the administrators, or whatever form or shape

the person authorized to give good title takes, so that won't be necessary any

more. The title will be vested by act of the Legislature in the City of St.

John's, which will then have the power to convey it out. The landlord will come

forward. We are not expropriating the landlord's property, period. We are simply

saying the landlord will come forward and be compensated in accordance with the

established formula, the formula that has been in effect for more than seventy

years, but instead of looking to the lessee for it, the landlord will go to the

City of St. John's, which would be obliged to give the landlord a cheque - fine,

no problem. The City of St. John's, in turn, will look to the lessee. The lessee

has the right to purchase the freehold interest whenever she or he may wish, and

has an obligation to purchase it at certain times as set out in the act.

We have also put in a separate arbitration scheme for

commercial land. There have been a number of problems arising from commercial

leases that have led to some litigation, some of it to the Court of Appeal

level. The scheme for ancient commercial leases - these are the pre-1921 leases

- is, I think, quite ingenious. It is in clause 11 of the act. It amounts to a

form of final offer arbitration. Each of the parties will retain an appraiser if

they can't agree on it. Each appraiser will give his or her opinion, and where

the two opinions are within fifteen points of one another, they are simply

averaged and the average becomes the purchase price. Where they are not within

fifteen points of one another, the registrar of the Supreme Court shall appoint

a third appraiser and the two who are closest together shall be averaged, and

that shall become the price. That should solve a very difficult and troublesome

problem that consumes a great deal of lawyers' time and accountants' time, and a

great deal of clients' money and doesn't produce a great deal of benefit for

anybody beyond the people who are involved in it professionally.

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: Ever since I stopped being a lawyer in

practice, I say to my friend.

Other leases, the modern commercial leases and all

residential leases, the arbitration will fall under the Arbitration Act, which

is the standard code and I believe, in fact, was adopted before this

administration came into office, if memory serves me correctly, but it is a

standard, workable, practical, commercial code.

The only other point I make, Mr. Speaker, in asking the House

to read this bill a second time, is to say that the reason we have drafted the

bill so that

Part II comes into effect upon proclamation, is to allow anybody

who wishes to come forward and make comment on this to do so. We had a knotty

problem as to how to go about getting input into it, given the fact that we have

to act by the end of this year or face a form of legislative chaos. I say now,

on behalf of government, that if the relevant legislation committee wishes to

hold hearings on it, assuming the bill is adopted, as we hope will be the case,

and as we shall ask the House to do, then the government will be quite prepared

not only to do whatever we need to do to facilitate it, if we need do anything,

but will be quite prepared to provide any assistance that may be needed by way

of explanation, information, or so forth.

Our thought is to allow the City of St. John's, in

particular, to come forward if they wish to be heard. We have had consultations

with them at the officials level but we thought it appropriate not to hold

consultations at the public level until the House had first addressed the issue,

so our solution, as I have said, is to put out a solution, put out a suggested

course of action, which we believe is the appropriate one, and then to provide a

mechanism whereby any who wish to be heard may come forward. There maybe some

landlords who wish to come forward. There are some people who have a strange

idea about these things as to what their `rights' may be. My friend, the Member

for St. John's East, is chuckling. He may have run into some of them in his

private life, or in his professional life. And, of course, we would be prepared

to hear from the City because they are involved.

We put the bill forward as a practical and workable solution

to a very long-standing problem that requires a resolution, in our view, and so

I commend the bill to the House and ask it to be read a second time.

Thank you.

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

MS. VERGE: Thank you, Mr. Speaker.

I thank the Government House Leader for his explanation of

the bill. This seems to be a good attempt to address, in a permanent way, a

long-standing, thorny, legal problem here in St. John's. Those of us who have

practised law elsewhere in the Province have not had to contend with the hassle

of residential, long-term leaseholds, as have practitioners in St. John's.

Part

I, as the minister has indicated, is yet another stop-gap approach which extends

for another year the term of leases, and that comes into force immediately, just

in time to avoid the chaos the minister just mentioned.

Part II, with the delayed coming into force provision, sets

out what seems, on the face of it, to be a good practical, permanent solution. I

haven't had any practical experience with real estate law in St. John's and I

wouldn't be prepared to endorse

Part 11 wholeheartedly without more time to

consult people who are more experienced than I am in the area. For that reason,

I am glad the minister is allowing time for consultation with real estate law

practitioners, with the City of St. John's, and time for the Social Services

Legislation Review Committee to examine the bill.

These are all points I jotted down in advance of the

Government House Leader speaking. With respect to the committee, I am disturbed

that the committee has been virtually defunct for more than a year. The Wells

Administration initiated legislation review committees and, in their early

years, from time to time, with respect to particular bills, the committees

worked well, and I think, provided a valuable service. But, as the years go on,

the committees seem to be called upon less and less frequently. Ministers seem

to bypass the committees, and the committees exist, really, now, in name only.

I am speaking of the Social Services Legislation Review

Committee. Now, the reality of the Social Services Committee over the last

couple of years is a reflection of a very light, social legislative agenda on

the part of the government. The much-talked-about and long-promised legislative

reforms in education and social services have not materialized. The committee is

still waiting for education legislation, child welfare legislation, child care

or day care legislation.

Within the past six months, I can remember the Social

Services Committee dealing with only one bill, and that is the Justice bill that

is now on the Order Paper, the Advance Health Care Directives bill. I'm glad the

Government House Leader is allowing time for this amendment to the St. John's

Leaseholds act to go to the Social Services Committee.

I'm willing to say now that I support the principle of the

bill. It is unacceptable for people in St. John's who appear to own property and

whom neighbours regard as owning property, but who technically, legally, only

have leases, to be frustrated in their effort to get clear title so that they

can sell or mortgage, because of the archaic leasehold arrangement, and because

of the practical difficulties of dealing with absentee landlords. The Government

House Leader mentioned that in some cases the landlords are unknown, the

original lessor, in many cases, was in England, died years ago; estates are

messy. Even when the correct parties can be tracked down, sometimes there are

undue delays.

MR. ROBERTS: (Inaudible) don't have to sell (inaudible).

MS. VERGE: Sure, yes. So,

Part II seems to be a practical

solution to these problems.

Part II seems to provide, in a balanced way, redress

for both tenants or lessees, the people here in St. John's who are living in

houses or occupying commercial premises, to all intents and purposes owning the

property, to get clear title and, on the other hand, to provide fair

compensation for the landlords.

I support the principle of the bill. I'm glad

Part I is

coming into force in time to avoid the confusion that would result from the

expiry of the last amendment, which brings the leases only up to the end of this

year. I'm glad even more that

Part II addresses the problem in a more

comprehensive and permanent way. Thank you.

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

MR. HARRIS: Thank you, Mr. Speaker.

I want to speak briefly on this bill, because it is one of

great importance to my constituents. It is matter that I happen to know

something about, having practised law for over fourteen years in St. John's.

I do want to say that I welcome the legislation because it

will solve a large number of problems that individuals have when they are trying

to sell their houses. The problems that come up, are problems that come up

because the purchaser of these houses - and these are individuals who live on

one street and sell a house to move on another street, or have to sell their

houses for one reason or another, or even people who are mortgaging these houses

who can't get the title certified because they own leasehold property and the

lease is about to expire. Mortgage companies often make it a condition that in

order to grant the mortgage on a particular property, it must be transformed

from leasehold to freehold.

So, enormous problems come up, and they are problems that

often have to be resolved very quickly in a matter of a two- or three-week

period when a real estate closing is to take place and somebody is moving house.

And, quite often, they can't be resolved in that period of time, Mr. Speaker,

and people have their properties held up, their sales held up, sales fall

through, causing great hardship to individuals and their families - and this has

been going on for many, many years. I know there have been attempts through

various amendments and the creation, itself, of the Leaseholds In St. John's Act

in 1977, putting it into a separate act instead of a city act, to try to resolve

these problems.

I think this is a sincere attempt, Mr. Speaker, to perhaps

get these transactions out of the hands of individual landlords or landowners

and put them in the hands of the City Administration, which has an interest in

trying to resolve these problems. They, themselves, have engaged in providing a

service to the citizens of St. John's in trying to help them resolve these

questions; they have been doing that for a couple of years now, encouraging

people to buy out the freehold, providing their own employee to do work on

helping people to acquire this, and having some form of financial assistance, at

least from a cash flow basis, to individuals trying to buy out the freehold of

their properties.

So I say, Mr. Speaker, that although the Government House

Leader introduced it as a bit of lawyers' law, and certainly it is a complex and

tangly kind of legislation and area of the law, it is a matter that is of very

grave concern to a large number of people, particularly in the older part of St.

John's, in St. John's East, in St. John's Centre, and in St. John's South, in

particular, but there are other parts of St. John's where leasehold lands are

affected.

Now, I don't think this has solved all the problems, and I

don't think the Government House Leader would claim that it had solved all the

problems. Last year, around this time, we passed a very quick amendment to the

Leaseholds In St. John's Act to postpone for a year, the requirement of having

some substantial amendments; we are doing it here again, but I think that the

end is in sight. I think I would have been a lot happier if the legislation

committee had had this piece of legislation to debate over the Fall session, Mr.

Speaker, so that any things that needed to be fixed up could be fixed up. I hope

it will meet with general approval. I think it is wise to let people have their

say about this at the Committee stage, even though it has passed second reading

and perhaps third reading before we get out of here.

I know the rules don't really provide for committees to deal

with legislation after it has been passed by the House, but I think, certainly,

I would be prepared to consent to having the committee deal with this

legislation and hear from a lot of lawyers who have been involved in the tangly

kind of issues that come up. I know of one problem, Mr. Speaker, that a

constituent of mine has been bugging me about, writing me and consulting me

about for some two years now, and I have been in discussions with the Government

House Leader, in correspondence with him about this particular problem.

I don't think it is resolved even by this act, because it is

a piece of land which is composed of two leasehold parcels, one of which is an

ancient lease and another of which is a modern lease, and while the act resolves

the problem for ancient leases, the modern leases, those entered into after

1921, in order to come under this legislation and get the relief promised by

this legislation, they must be building leases, and this is a part of the land

of this individual, that there is no house built on or part of this individual's

house is built on, but there was no covenant in the lease requiring this

individual to build on this particular property.

I don't know if there is time during the further debate or

the Committee stage this session, to fix that problem, but if there is no

intention of proclaiming the legislation until the committee has had a chance to

look at it and consider it over the next few months, then when we get back in

the Spring and deal with the Committee's report, then perhaps there can be

amendments in the Spring before the legislation is proclaimed, or indeed, it may

be necessary to proclaim the legislation to solve the problems that it solves,

and in the Spring session of the House, to bring in further amendments to solve

other problems.

I would have been a lot happier, Mr. Speaker, if this current

legislation solved at least that problem. There are a number of others which I

don't think are necessarily resolved by this particular piece of legislation but

I do welcome it. I think that it has been a long wait for many people who have

had serious problems with their houses, their property and their titles because

of the tangly nature of the legal issues involved and in some cases the

obstinency of certain lawyers, certain land owners or certain percentage - one

land owner may only own one-tenth, one-twentieth or one-sixteenth interest in a

particular freehold property but that person has to also be participating in the

sale of a freehold and it is not easy, Mr. Speaker, to resolve all of these

problems.

The Government House Leader said that it was a make-work

project for lawyers. It certainly may be a make-work project for lawyers, Mr.

Speaker, but it is not one that lawyers often get paid for. Quite often lawyers

end up doing a lot more work on matters such as this that they cannot reasonably

charge for because it is unreasonable to expect someone to pay $2,000, $3,000 or

$4,000 to buy out the freehold of a piece of property when the purchase price

may only have been $600 or $700. Individuals have a great deal of difficulty

understanding why they should have to pay for that. In the end, what happens

often is that lawyers end up acting for individuals trying to buy out the

freehold, end up taking a very substantial reduction in fees or do the work for

next to nothing. So it is a make-work project certainly for lawyers but it is a

very large headache for most lawyers who are engaged in this who are trying to

do their best to help an individual purchase a property or mortgage a property

without having to pay very exorbitant costs for doing so.

So I welcome the legislation. I hope that the committee will

get together very shortly and publicize this bill and make sure that it is well

circulated within the community, particularly of St. John's, that some land

owners will have an interest in it. I understand that there are certain land

owners resident in the United States who have a very great interest in it and

their ideas of property rights are quite different from our own. They think

somehow the American Constitution protects them and have been very difficult in

negotiating with individual householders who are trying to sort out their own

title.

So there may be some further debate on it when individuals

get a chance to look at it and there may need to be some technical amendments to

make sure that it covers the kind of problems that lawyers are encountering

every day in trying to resolve difficulties that their clients, the citizens of

St. John's, face in trying to do - as what the Member for Humber East said, I

mean basically we are talking about people who brought a property, think they

own it but find out that in fact the freehold of the property is owned in part,

one-sixteenth, by some estate in England that nobody seems to be able to find

the relatives of and it makes it very difficult to comply with all the technical

requirements of the existing act.

So I welcome this bill. I would like to see speedy passage if

we can sort out one problem for one of my constituents while we are doing this.

Perhaps it might need an amendment at another stage and I am prepared to discuss

that with the Government House Leader before we get to committee stage on the

bill. With that, Mr. Speaker, I would close my remarks.

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

MR. ROBERTS: Thank you, Mr. Speaker.

I shall be very brief. I want to thank my friend from Humber

East and my friend from St. John's East. All I need say, in addition I think,

number one, I am familiar with the problem that my friend from St. John's East

speaks about. I had understood from the solicitors in Justice, who crafted the

bill, that it would address that issue but if it does not, we will come back at

one of two places, either in the committee stage or if we are not able to solve

it by then - my friend from St. John's will agree, it is a very unusual problem

and like many unusual problems it seems simple until you start to try to solve

it - but if not, the bill or the act will go to a committee and we will deal

with it there. If a further amendment is needed then the House is always here

and the House can always deal with it.

The other point I would make is to underline what both

learned members have said, Mr. Speaker, and that is I hope those with interest

in these matters; the landlords, the City of St. John's, lessees to some extent

if they wish to come forward, the lawyers and others will - once they've had a

look at the bill - will make representations to the Social Services Committee. I

am quite sure the committee will respond in the appropriate way and hold

hearings if that is the way to go and we will see what comes of that but the

major thing is that we were trying to move this matter forward to a final

resolution to get it solved for once and for all and I thank hon. members for

their support.

With that said, Sir, I move second reading.

On motion, a bill, "An Act To Amend The Leaseholds In St.

John's Act," read a second time, ordered referred to a Committee of the Whole

House on tomorrow. (Bill No. 52)

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

MR. ROBERTS: Your Honour, we have done two bills in an

hour. We are beginning to pick up speed here. My friend from Gander will now

show us exactly how quickly a bill can be moved and gone through the House.

Would you call Order 27, Bill No. 53?

Motion, second reading of a bill, "An Act To Amend The

Financial Administration Act". (Bill No. 53)

MR. SPEAKER: The hon. the Minister of Finance and

Treasury Board.

MR. BAKER: Thank you, Mr. Speaker.

This looks like a rather small piece of business; however, it

is a very, very significant piece of business. What this amendment does is

permit the Lieutenant-Governor in Council to issue debentures into the pension

fund - these debentures, of course, to cover the liability that government has

in terms of the unfunded liability of the pension plans. This is something that

has needed to be done for quite some time, and finally we are putting the

mechanism in place whereby that will be one action that we will be allowed to

take to try to solve this horrendous problem that is bearing down on us in the

future.

Mr. Speaker, I am very pleased to introduce this bill to

allow the Lieutenant-Governor in Council to issue debentures into the pension

fund.

MR. SPEAKER: The hon. the Member for Ferryland.

MR. SULLIVAN: Thank you, Mr. Speaker.

I guess the minister is very much aware as anyone that we

have, I think, a $1.775 billion unfunded liability in the pensions - $1.775

billion total - more now. That is the latest filed statement in the House as of,

I guess, March of 1993 I would assume, the most recent I have received. I don't

think the latest is tabled yet, to my knowledge, but it is growing at an

alarming rate. I know that government did indicate a few years ago they were

going to start to contribute to, for instance, the teachers' pension fund, I

think $20 million a year, and they made one payment. A commitment was made. They

indicated it was time to start putting into the fund and address these unfunded

liabilities, and we will do that over a period of time. They made a payment back

in 1990 or whatever, 1991, and then the next four years they talked about their

commitments to meeting the unfunded liability of between $700 and $800 million,

I think, in the teachers' pension fund, unfunded liability.

AN HON. MEMBER: More than that.

MR. SULLIVAN: More again. Yes, $893.8 million I think, as

of the end of March, 1993.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Well, I am just reading from your Province

of Newfoundland pooled pension fund, teacher's pension plan, unfunded liability,

$893,800,000 as of December 31, 1992, so I would assume it is up around $1

billion now, is it? It must be, at the rate it is increasing.

The gist of this is proper. There has to be responsibility

there to meet those, because they are a liability on this Province, whether it

is an unfunded liability in the fund, or direct lease. So this is going to be a

debenture to that fund, in other words, to cover the government's guarantees,

commitment, on those unfunded liabilities that are there, so that is, I guess, a

positive. It is not going to enhance, of course, our overall fiscal position at

all, but it is going to meet a commitment in the fund, so I can certainly

support that amendment there.

MR. SPEAKER: The hon. the Minister of Finance and

Treasury Board; if he speaks now he will close the debate.

MR. BAKER: Thank you, Mr. Speaker.

The hon. member's numbers are essentially correct, except

that it grows month by month. The total unfunded liability probably is

approaching $2 billion at the current time, overall, and that would include all

four pension plans.

It is growing, obviously, because the previous government and

the previous, previous government, and the previous, previous, previous

government - in other words, all governments -

AN HON. MEMBER: (Inaudible).

MR. BAKER: No, not the current government.

All governments up to 1989-'90 allowed this thing to get out

of hand. Since that time the funding has been provided to cover the current

service cost for the first time in history, and there were changes made to two

of the plans, so some steps have already been taken. This allows us to go the

extra mile and put some mechanism in place whereby we can start to correct the

problem, but this is not a guarantee. The hon. member talked about a guarantee,

or a commitment we made of $20 million a year. That is not correct. We put one

$22 million payment and indicated that if there were surpluses that developed we

would try to put in what we could. Obviously the recession hit and we couldn't

put extra money in, we didn't have it. This is not a commitment to put specific

amounts in. It just simply allows us at some point in time when we are able,

when the financial situation is right, we will be then able to put the money in.

I hope, Mr. Speaker, this will be much sooner rather than later. I'm very

pleased to move second reading.

On motion, a bill, "An Act To Amend The Financial

Administration Act," read a second time, ordered referred to a Committee of the

Whole House on tomorrow. (Bill No. 53)

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

MR. ROBERTS: Mr. Speaker, now that my friend the Minister

of Finance and Treasury Board has shown us all how it is done, could we call

Order No. 28, Bill No. 56, the City of St. John's amendment act.

Motion, second reading of a bill, "An Act To Amend The City

Of St. John's Act". (Bill No. 56)

MR. SPEAKER: The hon. the Minister of Municipal and

Provincial Affairs.

MR. REID: Thank you, Mr. Speaker. The explanatory note in

the bill basically says it all. The rationale behind the amendment is to provide

the legislative authority for the Lieutenant-Governor in Council to approve the

retroactive date of January 1 1992, a formula once one is adopted by the

regional services board, because they have to adopt the formula, for the

calculation of rates or user fees to be paid to the City of St. John's by the

other municipalities served by the regional fire department.

I will say that I recently received a letter from six mayors

in the area representing six of the municipalities under the St. John's Fire

Department: St. John's, Mount Pearl, Paradise, Portugal Cove - St. Phillips,

Logy Bay - Middle Cove - Outer Cove, and Petty Harbour - Maddox Cove. They've

basically sent to me as far as I'm concerned the basis of a formula that could

be reached and settled among the six communities themselves. I'm sure the House

is aware that there were five different articles, proposals, in that particular

letter. Number three, which has nothing at all to do with setting the formula,

was the question of the 60-40 consideration by government in regards to picking

up some of the cost of the back money or the retroactive money owed.

Tomorrow morning I'm meeting with the four mayors of

Paradise, Portugal Cove, Logy Bay and Petty Harbour to discuss this particular

aspect of the proposal that has been agreed to by the six towns. Even though we

will be discussing this particular aspect, number three, that all

municipalities, including St. John's and Mount Pearl request favourable

consideration of your department in cost-sharing the outstanding fire cost for

the municipalities on a 60-40 provincial basis after the application of the 30

per cent reduction, that has absolutely nothing to do with the formula.

In respect to this piece of legislation which addresses

basically after we put the formula in place, the fact that we can go back then

to January 1 1992 and charge these communities, those four communities that I

just mentioned are fully aware of that and support the idea of paying back to

1992. In fact, number one of their proposal is that the original formula based

on the allocation of fire costs by assessed values be reduced by 30 per cent for

the years 1992, 1993, and 1994. They are basically agreeing that their bill has

been accumulating since January 1 1992.

With that, Mr. Speaker, I'm hoping now, as I told my hon.

colleague across the way the other day, that this may - I know I'm still going

to have some glitches in this, getting a deal - but I think in the end, in the

next little while, I'm hoping that in the next couple of weeks all the

municipalities will come to some arrangement with the City of St. John's. There

will be a formula put in place and recommended to the department, and hopefully

this thing will be solved once and for all.

Thank you, Mr. Speaker.

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

Extern.

MR. J. BYRNE: Thank you, Mr. Speaker.

It is a pleasure for me to rise to speak to Bill 56, "An Act

To Amend The City of St. John's Act". I had asked the minister last week in the

House, and last spring on a number of occasions, with respect to solving the

issue of fire-fighting on the Northeast Avalon, and last week the minister made

a statement that Bill 56 would go a long way to solving that problem. I don't

see Bill 56 going a long way to solve that problem because all it is doing is

making the formula that would be accepted by the municipalities involved in due

course retroactive back to 1992.

The government has basically stated they made a mistake by

allowing the municipalities, or the St. John's Regional Fire-fighting Committee,

to disband. They were told in the meantime, on a number of occasions, that it

wouldn't work, it couldn't work, for various reasons, and obviously it hasn't

and can't work.

Mr. Speaker, the outstanding bill that the minister referred

to when the towns wrote to the minister on that issue, they were basically

agreeing that a 30 per cent reduction in the bill for 1992-'93, they may be

willing to pay that if the government comes across with 60 per cent contribution

towards that bill after the City of St. John's approves the 30 per cent

reduction. What they are basically looking at in that situation is the amount of

money now that they can actually come up with and afford to pay, and that is a

big difference in the formula itself. Basically, they want to get that bill off

the books. They want to be able to do their budgets. They have been the past two

years wondering how much it is going to cost them in the future.

The Town of Logy Bay-Middle Cove-Outer Cove, for example,

their bill had increased by 850 per cent, and the reasons why I believe St.

John's has agreed to a 30 per cent reduction in the outstanding bill is

basically the common sense point of view, and it boils down to dollars and

cents. If Paradise, Portugal Cove and Logy Bay-Middle Cove-Outer Cove pull out

of that service and provide one for themselves, what will happen, the City of

St. John's will end up having to pay out the same bucks that they are paying out

now and not get the money that they would normally get from those three or four

municipalities.

I believe that this bill and this government again shows the

broken promises of the Premier. I remember being in a meeting with the Premier

when I was Mayor of Logy Bay-Middle Cove-Outer Cove, with three other mayors,

and the Premier quite emphatically and quite bluntly said to the minister of the

day - I think it was Mr. Hogan - that if a formula was to be based on assessed

value only it would not happen, and you could tell the Mayor of St. John's that,

but obviously that is what this is boiling down to. What it is boiling down to

now is that it is going to be based on assessed value only.

The minister referred to the committee itself approving a

formula in the near future and I, for one, would like to see it settled. I am

basically getting tired of this situation, speaking for the smaller towns, but

what we have to look at here is the representation. Again, the City of St.

John's, I think, has eight or ten representatives -

AN HON. MEMBER: Eleven.

MR. J. BYRNE: Eleven, and Mount Pearl has five or six or

seven, whatever the case may be, and the smaller towns themselves only have

four, so obviously they don't have a say. They have no clout on that committee,

so the formula that is going to be put forward is going to be a formula that is

going to be approved by the City of St. John's and no one else.

The cost recovery formula has to be and was supposed to be

approved by the Lieutenant-Governor in Council. This has been ongoing for two

years and has not been approved by the Lieutenant-Governor in Council. After the

formula is approved by the City of St. John's, the eleven members of the City of

St. John's, the Lieutenant-Governor has to approve that. I still think that the

formula based on assessed value is unfair to the smaller municipalities, and I

believe that they honestly believe that too. They are getting to the point now

they know it is going to be forced upon them.

Some of the factors that they have considered in the past and

I have looked at of course are the increased costs to the people living in these

rural communities for fire fighting. One would be the insurance costs. As much

as 25 per cent people living in rural towns people pay for fire insurance

because they are so far away from a fire station, and they pay more again if

they are so far away from a fire hydrant. That is a factor that should be

considered when the formula is being approved or considered by the

Lieutenant-Governor in Council, even after it may be approved by the committee.

Because the committee is weighted certainly in favour of the City of St. John's.

There is a business tax. The formula now if it is approved on

an assessed value only of property within the City of St. John's or within the

whole region, basically, percentage-wise you have business tax - a number of

businesses in this city that take advantage of the fire fighting protection from

within the city I think has to be considered. In that how much of the money that

is collected in taxes by the City of St. John's actually goes towards the

payment of the fire fighting bill.

The federal government buildings and the provincial

government buildings. From my memory the provincial government I think pays 15

per cent of the bill for fire fighting services within the St. John's region for

fire fighting. From my perspective I don't think that would cover the assessed

value of those buildings. The 15 per cent, I think if you had a proper

assessment done, would be much higher than that.

In the City of St. John's itself, compared to say Logy Bay -

Middle Cove - Outer Cove, or Portugal Cove, we have the potential for major

fires. There is special equipment needed to fight those fires. Big aerial

ladders. Special equipment for fighting basically fires of a - well, toxic fires

and that type of thing. There is a very low chance something like that would

happen in the rural towns. You have row housing within the City of St. John's,

which always is a potential for a serious fire. If we have a fire down in Logy

Bay or in Portugal Cove or what have you the chance of it being a multi-building

fire is very remote. I think that is a factor that has to be considered also.

I remember I made a proposal to the St. John's regional fire

committee a couple of years ago. It made a comparison of the costs of

neighbouring towns compared to Logy Bay - Middle Cove - Outer Cove. I brought

the comparable costs up before in the House before. The town of Logy Bay -

Middle Cove - Outer Cove has 1,800 people and there are somewhere around 600

homes. In 1992 the bill that they received would have been $130,000 for fire

fighting services. If they decreased that by 30 per cent - so it is just over

$100,000. The town of Witless Bay has 1,100 people and they pay $10,000. They

have a volunteer fire department. Bay Bulls is too small to even talk about. The

town of Flatrock in the same district, 1,000 people, 300 homes, they pay $9,000,

compared to over $100,000 for Logy Bay - Middle Cove - Outer Cove. The town of

Pouch Cove has 2,000 people, 200 more than Logy Bay - Middle Cove - Outer Cove,

600 homes, roughly the same, and they pay $30,000 a year. Yet the small town of

Logy Bay - Middle Cove - Outer Cove are expected to pay over $100,000.

Unreasonable and it is unfair. The town of Torbay has 4,000 people there, twice

the size of Logy Bay - Middle Cove - Outer Cove, 1,400 homes, over twice the

amount of homes, and they pay $60,000 to $70,000 for fire fighting, yet Logy Bay

- Middle Cove- Outer Cove are expected to pay double that.

As I said, the government has admitted the mistake. I took, I

won't say pleasure, but certainly it was good to hear the minister just say a

few minutes ago that he is meeting with the towns I believe tomorrow morning and

they are going to be look