June 24, 2005 HOUSE OF ASSEMBLY PROCEEDINGS Vol. XLV No.

The House met at 1:00 p.m.

MR. SPEAKER (Hodder): Order, please!

Admit Strangers.

This afternoon before we begin the formal proceedings, the Speaker would like

to welcome former Speaker, James Russell. The Speaker from 1972-1975 and

1982-1985 to the Speaker's gallery.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: We would like to welcome the Member Elect for the District

of Exploits, Clayton Forsey, to the Speaker's gallery.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The Chair is of the understanding that the format for this

afternoon will continue as per the arrangement when we first began this debate

with a Question Period and that the rules be somewhat relaxed. I will, however,

ask members if they could formulate their questions within the minute time frame

and also responses likewise.

Oral Questions.

Oral Questions

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

MR. REID: Thank you, Mr. Speaker.

My questions are for the Premier. Mr. Speaker, since this whole FPI Income

Trust proposal was put forward in the House of Assembly over two weeks ago,

there have been changes in commitments and statements by the Premier that this

proposal may not be the final document. All members on this side of the House

have already spoken, so our time is up, we cannot speak again on it, even though

this proposal seems to be changing and a moving target. Just a half hour ago, I

got the latest edition.

I ask the Premier: Is this the final document that we are voting on here

today or is there still a possibility that there may be changes made today,

tomorrow or down the road?

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER WILLIAMS: Thank you, Mr. Speaker.

Mr. Speaker, I thank the hon. Leader of the Opposition for that very fair

question. We received that final term sheet position from FPI just before lunch.

That is it. That is the final position. They basically have signed off and that

is as far as they are prepared to go on any of the issues. So, what we have

before us here today, for purposes of the vote, is the final position.

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

MR. REID: Thank you, Mr. Speaker.

Mr. Speaker, the Premier has stated throughout this entire process that he

was not defending the actions of the company, FPI, and the government was not

promoting this Income Trust proposal. However, in recent days the Premier seems

to be out defending FPI's position to the point where he says that the

expectations of the people of Harbour Breton are too high.

I ask the Premier: Why has your approach changed and why do you now be, or

appear to be, supporting the messages put forward by the Board of Directors of

FPI?

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER WILLIAMS: Thank you, Mr. Speaker.

That is absolutely incorrect. That is not what I have been doing. As Premier

of the Province I feel I have a duty to kind of lay out before the members of

the House and also the residents of Newfoundland and Labrador and the people who

have a vested interest in this and the communities that are affected, to try and

lay out all the options. That is exactly what I have been doing. I have been

laying out all the information. Now, if various reporters, or the media, or the

Leader fo the Opposition, or anyone else, interprets that as being me moving one

way or the other, I can tell you right now, that is absolutely wrong. Up to, I

would say, 11:00 o'clock this morning, I had not decided on which way I was

going to vote and I will be indicating to the House this afternoon which way I

am going to vote, but that is accurate, very, very accurate.

So, there is no attempt - what I am basically saying to the people of Harbour

Breton is that we have done quite a bit for the people of Harbour Breton. We got

a lot and I will go through it when I get an opportunity to speak this

afternoon, and if the Leader of the Opposition wants me to listen. But, as

recently in the last round, we have added an environmental indemnity for the

plant which could have a significant consequence, significant liability for the

company. It is unquantifiable. We have added $1 million to refurbish the plant.

The committee asked me if they could keep the red fish line which is in

operation, which I saw in the plant. We have achieved that and we also have some

red fish quota for them as well.

SOME HON. MEMBERS: Hear, hear!

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

SOME HON. MEMBERS: Hear, hear!

MR. REID: Thank you, Mr. Speaker.

The Premier might say that the media are misquoting him but I heard him

myself with my own ears when he said their expectations are high. He went on to

say that they are stretching the elastic band too much.

Mr. Speaker, if government passes this proposal today there is nothing to

prevent FPI from selling all of their Value-Added and Marketing Division, a part

of the company that generates 60 per cent of the profits. By so doing, this

could be considered a resource giveaway of massive proportions.

I ask the Premier: Isn't it true that the passage of this proposal will, in

effect, eliminate any power the people of this Province have over the company

and might be the first step in what could become the total liquidization of FPI

as we know it?

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER WILLIAMS: Thank you, Mr. Speaker.

First of all, it would not be the government passing it. If it passes here

today it will be the votes of all members. So we will see where members are

going. I am sure there are members on both sides of the House who are going to

be voting pro and con on this particular resolution and that is what a free vote

is all about and that is why we have done it. This has been a good process. Like

it or not, it has been a very, very good process because of good open debate,

and people have had an opportunity to express their views and people in the

public have had an opportunity to express their views, and people with strong

opinions have expressed their views.

With regard to the consequences and the loopholes, we will still have the

Act. What has been done here is there is a provision which will allow the Income

Trust. So, the Act is still there. The Act is not being removed off the table.

The Act does not disappear. However, as I said here weeks ago and within answers

to some of your questions, there are no safeguards in all respects. There are

loopholes here. There are off ramps, for want of a better term. It is not as

tight as a drum. I will make no bones about it, and I said it when I was on my

feet before in answers to questions, that it is not perfect and that is the

truth of the matter. So, in fact, yes, FPI could acquire more. There could be

further dilution down the road. But with regard to the Government of

Newfoundland and Labrador losing control of the company through legislation, no,

that is not correct, because the legislation still stands.

SOME HON. MEMBERS: Hear, hear!

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

MR. REID: Thank you, Mr. Speaker.

The Premier might say it has been a good process, I beg to differ. It is a

moving target and we still do not know if we have the final documents in front

of us. We also see communities in this Province pitted against other

communities. If that is a good process, Mr. Premier, I will tell you, I think

you are the only one who believes that.

Mr. Speaker, if this proposal is passed, there is nothing to prevent John

Risley of Nova Scotia, Mr. Sanford of New Zealand, and the Icelanders, from

taking control of all of the U.S. value-added marketing division on top of their

current 45 per cent ownership share in FPI. This, in essence, would be allowing

these companies to achieve through the back door what they could not achieve

through the front door four short years ago. This could give upwards of 78 per

cent control of FPI to these three companies, direct competitors with FPI.

I ask the Premier: Does it concern you that these three companies could gain

direct control of FPI's decision-making process? Companies that do not have, I

might add, the interest of Newfoundlanders and Labradorians at heart.

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER WILLIAMS: I am not here to slander and impugn the motives of

people involved in this. That is not what this is all about. The other thing is,

as the hon. the Leader of the Opposition knows, when he was Minister of

Fisheries in this Province and the whole FPI issue came up before, the Premier

at the time and the Cabinet at the time did not ask any questions. Well, let me

tell you, we have asked, Minister, probably thousands of questions on this

particular file over the course of the last fourteen months? We have turned it

absolutely upside down. We have put every possible position, every suggestion

that has been made by the Opposition, every suggestion that has been made by

committees, every suggestion that has been made by our own members and our own

Cabinet, we have put to FPI and we have asked for a position. As a result, we

have gotten considerable concessions from FPI, but it is not perfect.

I do not know where your math of 78 per cent is coming from. I have no idea

how you possibly could calculate that, but I can tell you the Icelanders could

get 100 per cent of it because the Icelanders are not covered off, so you do not

even need to do the math on the other ones. There is a possibility here, because

there is only a best effort from the Icelanders, that they can acquire 100 per

cent of the Income Trust because that has not been covered. So if that answers

your question, that is a simple answer.

SOME HON. MEMBERS: Hear, hear!

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

MR. REID: Mr. Speaker, if we give up control of 78 per cent of FPI, this

ultimately allows outside investors to do whatever they want with a company that

was established by and for Newfoundlanders and Labradorians.

I ask the Premier: Is this a resource giveaway, something that you said you

would never allow to happen in this Province?

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER WILLIAMS: At the end of the day, Mr. Speaker, we are going to

have to see how the vote goes. We are going to have to see how people vote and

how it gets decided and what happens when this particular matter passes the

House. That is really what it is all about.

From my own particular perspective, I am not in favour of giveaways. I am

very clearly on the record of that. I have stated it time and time again. That

was based on the experience that I had when I sat in your seat and I watched

your government pretty well give away everything that came across the table.

SOME HON. MEMBERS: Hear, hear!

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

MR. REID: Thank you, Mr. Speaker.

I say to the Premier, if you allow this to be passed this afternoon you will

be giving away FPI. You will be giving away the livelihoods of thousands of

Newfoundlanders in this Province. That is what I say to you, Mr. Premier.

Mr. Speaker, the Premier has said that the provincial government is not

responsible for the allocation of fish quotas; that is the exclusive domain of

the federal government, and thus he cannot force FPI to leave Harbour Breton's

traditional quota in that community.

I ask the Premier: If he cannot get FPI to leave part of the quota in Harbour

Breton because it is federal jurisdiction, how can you claim that you will be

able to take these same quotas back from the company if they break their

commitments to towns like Bonavista and Fortune?

MR. SPEAKER: The hon. the Minister of Fisheries and Aquaculture.

SOME HON. MEMBERS: Hear, hear!

MR. TAYLOR: Thank you, Mr. Speaker.

Mr. Speaker, the Leader of the Opposition is correct. We do not have the

authority, constitutionally, to be able to determine what happens with FPI's

quotas as they currently exist; however, Mr. Speaker, over the course of the

past fourteen months what we have been able to achieve, should this resolution

and the amendments to the FPI Act pass here this afternoon, we will have secured

a contractual arrangement with the company whereby if they default on the

commitments that they have made to Bonavista, Fortune, or any of the other

communities and any of the other commitments that they have made under the

agreement, or the proposal that we have in front of us right now, Mr. Speaker,

there is a default, there is a penalty, and it is the groundfish allocations

associated with FPI's operations in Newfoundland and Labrador.

Mr. Speaker, that is where it is. Mr. Speaker, that is the contractual

agreement. Mr. Speaker, it is a far cry from the letter of commitment that his

government received from FPI back in 2001.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. the Opposition House Leader.

MR. PARSONS: Thank you, Mr. Speaker.

My question is for the Premier.

Premier, you adjourned the House in the middle of this debate because you

said communications were needed with the federal government and with FPI. We

raised the issue of the lack of security in this agreement earlier. We know you

have had discussions about the situation in Harbour Breton during the break.

Have you had discussions with FPI or the federal government since the House

adjourned to improve the security elements of this proposal?

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER WILLIAMS: Mr. Speaker, with respect to FPI alone, I did not have

any direct contact with the federal government; nor did I have direct contact

with FPI - it was actually done through officials - but there have been several

attempts made to improve the security provisions. Several alternatives have been

put to FPI, and they have rejected them. The alternatives that have been raised

are specifically ones that have been raised with regard to security on Fortune

and Bonavista. That, in particular, was actually raised.

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

MR. PARSONS: Thank you, Mr. Speaker.

Premier, the only security that FPI is offering is the groundfish quotas in

the term sheet we have here. Your Ministers of Justice and Fisheries have both

acknowledged, in early questioning, that consent from the federal government is

necessary to give teeth to even this limited commitment.

Have you talked to the federal government about solidifying the groundfish

quota as security for this deal?

MR. SPEAKER: The hon. the Minister of Fisheries and Aquaculture.

SOME HON. MEMBERS: Hear, hear!

MR. TAYLOR: Thank you, Mr. Speaker.

Mr. Speaker, we have had discussions with the federal government on that

matter. I personally spoke with Minister Regan on a couple of occasions, and we

have exchanged some correspondence. We have received a letter from the Minister

of Fisheries and Oceans, Minister Regan. Obviously, given the discretion that

ministers have, just as we do here, it is difficult for absolute commitments to

be made on whether or not transfers would be entertained. However, Mr. Speaker,

they did acknowledge that if this should go through there is a contractual

agreement between FPI and the provincial government, and that they would

entertain a request on the transfer in the same light as they entertain requests

of transfers from other companies on probably a daily basis in the Atlantic

fishery.

SOME HON. MEMBERS: Hear, hear!

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

MR. PARSONS: Thank you, Mr. Speaker.

Premier, when I described this commitment of FPI on the groundfish quotas two

weeks ago, I compared it to receiving money from the bank to build a new home,

but you only had to put your shed up on that property as security for the loan.

Why are you content to let FPI do this Income Trust deal and only give

shed-like security, and not demand the proper security over all their assets,

including the shell fish quotas and the dragger fleet?

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER WILLIAMS: Thank you, Mr. Speaker.

Mr. Speaker, I have never said that I am content with this. That is not what

I have said, under any circumstances. As a matter of fact, the sad situation

that we have here according to our information, is that we could have a company

that loses its home and its shed and its garden and everything else that it has.

That is the problem that we have and that is the dilemma that we face here. We

have a company that is under stress, under financial difficulty, unable to raise

capital. The reason for this exercise, the reason they have put an Income Trust

forward, is that seems to be their only way to raise money at that particular

point in time. That is why it is being put before this hon. House for everybody's

equal and fair consideration.

To say that I am content with it or to say that I am advocating it, is

absolutely wrong. I have never advocated the company's position. I just have a

duty, as the hon. member knows from his own background and from mine, to lay out

the case, to lay it our for everybody, to try and give all the options and let

people know what the pitfalls are and what the strengths are. That is exactly

what we are doing here.

SOME HON. MEMBERS: Hear, hear!

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

MR. PARSONS: Thank you, Mr. Premier.

You are well aware too, that when anybody is in such a financial bind and

they do need the money they usually do provide the necessary securities, and the

securities that are requested. They are in no position, I would put to the

Premier, to refuse to give the securities if you ask for them.

My question, Premier, is - you seem to be prepared to authorize and approve

this deal; we will find out later in the day, obviously - what legitimate reason

exists for not insisting that they provide this security? Whatever happened to

your strategy of not leaving one penny on the table, insisting upon a fair and

proper deal, and not giving away resources?

Whereas here we seem content to

potentially leave everything on the table.

MR. SPEAKER: The hon. the Minister of Justice and Attorney General.

SOME HON. MEMBERS: Hear, hear!

MR. T. MARSHALL: Mr. Speaker, the proposal that is before the House is a

proposal of the company; it is not a proposal of the government.

Mr. Speaker, FPI indicated to government that they intended to do the Income

Trust proposal. They indicated they had a right to do it and were only, as a

courtesy, advising the government of it. The government had discussions because

of some uncertainty in the legal position. The government extracted further

concessions and safeguards from the company, and the government continued to do

that over a period of time.

These are the fruits of that negotiation, and the matter is now before this

House for all members to decide whether it is in the best interests of the

people of this Province and whether it is in the best interests of the company.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Fortune Bay-Cape la Hune.

MR. LANGDON: Thank you, Mr. Speaker.

Mr. Speaker, in The Telegram yesterday, the Premier said in relation

to Harbour Breton's position on the need for a quota, "....these demands

are now becoming unreasonable and unrealistic."

What is unreasonable about asking to be given a quota that has traditionally

been processed in the town? Exactly, Mr. Premier, what is unreasonable and

unrealistic in the town's position?

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER WILLIAMS: Thank you, Mr. Speaker.

I thank the hon. member for that question.

It is unreasonable in a sense, as he well knows, that the provincial

government cannot deliver that. We are not in charge of the quotas. Everybody in

this House knows that the federal government allocates quotas, so to ask us to

provide something that we cannot provide is unreasonable and unrealistic.

As the hon. member knows, we have taken this as far as we can get it, to a

point where we did manage to get some quota out of FPI and, in addition to that,

have said to the community that we will provide a reasonable amount of money for

a reasonable quota at a reasonable price.

What is more reasonable than that? We have done everything we can, within our

power. I just wanted to let the people of Harbour Breton know exactly what is on

the table, exactly what we got for them, but you have to turn your guns on

someone else. You have to turn your guns on the federal government.

I have said before, the Member of Parliament, Bill Matthews, has advocated

very strongly, as you have, sir, for your community, but you have to turn your

guns on the people who can deliver on this. There are certain people who are

very silent on this. The federal ministers should be involved, and they are the

ones who should be answering your question.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. the Member for Fortune Bay-Cape la Hune.

MR. LANGDON: Mr. Speaker, right from the very beginning, representatives

of the town made it clear to government that they wanted FPI to leave a portion

of their quota for the town. They made it very clear that the town needed a

quota in order to survive.

I ask the Premier: Have you given FPI the ultimatum that if they do not make

a reasonable portion of their quota available to Harbour Breton you will not

support the legislation?

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER WILLIAMS: Mr. Speaker, the hon. member will find out the answer

to that question within an hour, when I get a chance to get up and speak on this

matter.

What I can tell the House, and I think the hon. member knows this all too

well, Harbour Breton has, right now on the table, $3 million for Income Support.

It has $1 million which we have acquired for refurbishing of the plant. The

provincial government has committed $1.25 million in cash. The federal

government has committed a minimum of $2 million in the first year. That is

$7.25 million. The equipment that is coming with the plant was purchased three

years ago; it is worth $4 million. That $11.25 million. Added to that is the

plant itself, which will be provided environmentally free. That has value. Added

to that is the cost that the Province would have to incur in order to buy a

provincial quota. That could be $2 million to $3 million. So, now we are up to

$14.5 million plus the value of the redfish quota.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

PREMIER WILLIAMS: I cannot do any more than that.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Fortune Bay-Cape la Hune.

MR. LANGDON: Mr. Speaker, FPI has been arrogant, callous and

disrespectful, not only in the way they have dealt with the Town of Harbour

Breton, but they have also been the same way when they have dealt with the

provincial government. This is a company that had to start with taxpayers'

dollars and was built by hard-working Newfoundlanders and Labradorians.

I ask the Premier: When are you going to stand up to the company and demand

that they be good corporate citizens?

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER WILLIAMS: I am just as shocked at that question as I am by the

reaction of the community to what we have achieved here.

I do not know where the information is coming from, or who is trying to lead

this community in whatever direction, but we have done whatever we can for

Harbour Breton. As well, the minister and I were down in that community. We saw

it, we heard it, we felt it, believe me. Believe me, we did, and we are doing

absolutely everything we can for that community.

We have also made a commitment that we will not let Harbour Breton go. Now,

as Premier of your Province, I cannot do any more than that. If that is not

sufficient, well, that is all I can do, I am sorry.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Fortune Bay-Cape la Hune.

MR. LANGDON: Mr. Speaker, it appears that FPI is offering a lease

arrangement for 3O redfish -

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

MR. LANGDON: - fish that has particularly no value, and the Premier has

been told that by the IAS and committee, and Eric Day in particular. This 1,400

tons of redfish, if processed in the plant at Harbour Breton, would be about

three weeks work for plant workers. Does the Premier consider this to be a

realistic quota from FPI to the Town of Harbour Breton?

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER WILLIAMS: Thank you, Mr. Speaker.

Absolutely not! There is no doubt about it, and I have stated that publicly.

On the Open Lines I have indicated that when I spoke about that particular quota

that I felt it certainly was not sufficient. The Minister of Fisheries knows

that and everybody else knows it, but it is what we could achieve at that

particular point in time. It was what we could get from the company, but there

are other avenues.

The member knows quite well that over the course of the last couple of months

we have explored options with the federal Minister of Fisheries. We have

explored private options. We are looking at possibly purchasing a quota. Even

the shrimp quota that you were looking for, we also advocated for that on your

behalf. I have spoken to you about that, and I have spoken to the federal Member

of Parliament about that. So, we have explored every single, possible option and

as a fail safe to your community, sir, we have agreed to participate in

purchasing a quota if one can be acquired. We cannot do anymore than that.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Fortune Bay-Cape la Hune.

MR. LANGDON: Thank you.

Mr. Speaker, the Premier has hinted at the possibility of a shrimp quota for

Harbour Breton. Last week he indicated that the Province was waiting on a letter

of commitment from the federal government on the matter.

I ask the Premier: Has he been given any indication that the federal

government is prepared to offer the Town of Harbour Breton a shrimp allocation?

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER WILLIAMS: Mr. Speaker, there had been indications that they had

been prepared to favourably consider it, but they were certainly not prepared to

put it in writing. They were asked to put it in writing last week. It is a

question, I think, that should be quite rightly put to the federal minister, the

regional minister in this particular Province. That answer has to come from the

federal government. We can provide the loaves but we can't provide the fishes

and that is all we can do.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Signal Hill-Quidi Vidi.

MR. HARRIS: Thank you, Mr. Speaker.

My question is for the Premier and it has to do with Harbour Breton. We all

have to face the dilemma today of deciding on FPI, but the future of Harbour

Breton is in the hands of this deal and perhaps what can be achieved from the

federal government, but also the Province.

The Premier just mentioned efforts that are being undertaken to obtain a

shrimp quota for Harbour Breton and the Premier has talked about assisting in

other quotas that may or may not be available. Will the Premier say, on behalf

of this government, that his government, in his jurisdiction, will make

available processing licences to ensure that whatever quota that can be

obtained, whether it be shrimp, or herring, or anything else, that licences will

be available to ensure that this fish can be processed in Harbour Breton?

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER WILLIAMS: Mr. Speaker, I say to the hon. member, we will do

whatever we can to accommodate whatever quotas are made available. We cannot

sort of open up the book and start saying now that we can carte blanche issue

licences or agree to issue a processing licence for something that we do not

even know exists. That would be irresponsible as a government.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Signal Hill-Quidi Vidi.

MR. HARRIS: Thank you, Mr. Speaker.

This sounds a little bit like the commitment for an Icelandic company not to

purchase the best efforts kind of clause, which means no.

Are you now saying that if there is a shrimp allocation made available to

Harbour Breton you are not prepared to commit to allow it to be processed in

Harbour Breton, to allow some work to take place there, to allow jobs to exist

in Harbour Breton, if they are successful in achieving a shrimp quota?

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER WILLIAMS: What I am saying is we will cross that bridge when we

come to it. If they get a quota and they get the allocation, then we will

certainly have a look at it; as we would have a look at any other application

that came before government, but at this particular stage of the game there is

no allocation. So, we cannot do it. We cannot promise it if it is not already

there. So, at a time, if it is acquired and if it is achieved, then we will

certainly look at it. But, perhaps the community may want to just take the

royalties from that particular quota; they may not want to process it. So there

are options that the community might want to look at, but we have considered all

options.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Signal Hill-Quidi Vidi.

MR. HARRIS: Mr. Speaker, the Premier's statements today do not hold out

a lot of promise for the people of Harbour Breton. Yes, they may want to sell

the quota but they may want to process and have jobs there. Is the Premier not

being able to say today that he will facilitate the processing of shrimp, or any

other allocation that they get, in that plant in Harbour Breton so they can have

jobs and a future in that community?

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER WILLIAMS: Mr. Speaker, I can only repeat the answer to a previous

question. You know, when we have commitments and/or commitments from government

in the future to purchase quotas that total $14 million for the community of

Harbour Breton, that is a significant commitment. That is a significant

achievement for one community. If we had to get that for 700 communities in this

Province, there would not be enough money around to be able to do it. So, we

have achieved quite a bit for this community.

What we are trying to do for the community is take care of their short-term

money problems, and they have lots of them down there. There are people under a

lot of stress. We are also with the federal government trying to work towards

medium-term solutions. We are also going to try and refurbish that plant and get

it ready to go when there is product to go into it. Besides that, there is cash

available on the way through. I mean that positions them very, very well for the

future. That is what we are trying to do and I think we have done very well in

achieving that. I just hope the community appreciates it.

SOME HON. MEMBERS: Hear, hear!

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

MR. PARSONS: Thank you.

My question is for the Premier again. The Premier used the word off-ramp, but

I submit, this term sheet appears to be one big off-ramp from a security point

of view.

Premier, the communities of Fortune and Bonavista are looking at the

commitments in this deal as a means of protecting their communities in the

future. As a means of security, will your government insist and demand that a

portion of the funds raised through the Income Trust - if it is approved today -

would be placed in trust to ensure that the company fulfills its commitments

that they made with respect to these towns?

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER WILLIAMS: I can give the hon. member the assurance that up until

very, very late last night I made that specific request to FPI. I insisted and

demanded that be a part of the agreement, and they said no.

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

MR. PARSONS: Thank you.

I guess it is pretty evident, Mr. Speaker, that it is FPI who carries the big

stick on this file.

Premier, some people familiar with the fishery and Income Trust are

questioning whether or not the Income Trust proposal, even if approved, will go

anywhere near raising the $100 million that is being tossed about. Let us

assume, for a moment, that it does. They have said they would use $30 million

towards debt relief and they would use $10 million or so to improve the

infrastructure in this Province.

What assurances, Premier, does this government have that the other $60

million, if raised, would be used for the benefit of the people of this Province

and not the shareholders of FPI?

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER WILLIAMS: Thank you, Mr. Speaker.

Mr. Speaker, according to my calculations we have commitments now on the term

sheets, actual cash commitments, of approximately $53 million. If you are

working on $100 million that is approximately 53 per cent. As well, there are

other hard assets that have been passed over, which would be the machinery and

equipment and, of course, the plant in Harbour Breton. Let us say it is worth $4

million to $5 million. Those are significant commitments. As well, we have gone

to the shareholders and we have put restrictions on the shareholders'

dividends which have been put in place in order to prevent stripping out. We

have also put restrictions on possible amalgamations for non arm's-length

transactions. The hon. member understands that. We have tied up as much of that

$100 million as we can.

The ultimate hammer, at the end of the day, is that if they are in default

they lose their quotas. That is the ultimate breach. That is a significant,

significant remedy. That is what we have done.

Now, if there is $40 million left out of $100 million, well then that is the

reason the company is doing this in the first place. The company is doing it to

get some liquid cash so they can go out and make some new investments so they

can grow their company and grow their business. That is really what this whole

exercise is all about.

SOME HON. MEMBERS: Hear, hear!

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

MR. PARSONS: Thank you, Mr. Speaker.

Premier, again they have made a commitment on quotas that you know and we

know there is absolutely no security over in terms of enforcement here, and you

are prepared to accept that. I think that is unbelievable here.

Premier, let's assume that they don't raise the $100 million. We have

talked about the process here, we have talked about all the good things that FPI

might do if they went with the Income Trust and they got the $100 million.

What discussions have taken place? What if they don't raise the $100

million? What is the backup plan? What security does your government have in

place to protect this sector of the industry for the benefit of this Province,

if the so-called plan of FPI on the Income Trust does not work?

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER WILLIAMS: Thank you, Mr. Speaker.

Mr. Speaker, we have no way of knowing what they are going to raise, whether

they will raise $100 million or whether, in fact, down the road, through further

issuances, they could raise even more than $100 million, so there could be even

more than that available. I think the hon. member needs to know that and

understand it.

The one thing that I can assure him, though, is basically, as I said, it is

nearly a 50-50 proposition. Fifty is going to be in the company's control, and

about 50 per cent of it, the $50-odd million, of course, will be specifically

allocated.

The comfort that we have as well is that $30 million of that $50 million is

going directly towards debt, so our $20 million to $25 million should have first

priority on any proceeds and therefore we would be in a very strong position to

get those monies first.

Thank you, Mr. Speaker.

MR. SPEAKER: Order, please!

The time allocated for Oral Questions has expired.

Orders of the Day

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

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

I guess we are moving towards Orders of the Day, I think you called, and

resumption of debate on this particular bill, Bill 41,

An Act To Amend The

Fishery Products International Limited Act.

It is my understanding, according to our agreement, so that we clearly

understand that we are about to conclude second reading, all members of the

Opposition have had the opportunity to speak. I believe we have two members on

this side who wish to speak, who will be left to speak, that being the Minister

of Finance and President of Treasury Board, followed by the Premier. Then it

would be my understanding that we would move towards - so we are clear with you,

Mr. Speaker - a vote on second reading. If that passes, then we would move into

Committee to deal with the amendments that are before the House.

With that I move now, Mr. Speaker, Order 6, second reading of a bill,

An Act

To Amend The Fishery Products International Limited Act.

MR. SPEAKER: Before we proceed, just for clarification, the Speaker's

understanding is that there can be more speakers, of course, on second reading;

however, there are certain motions that will be called in the second reading and

there is one amendment that will be called in Committee of the Whole.

We will call the amendments in the order in which they were presented, and

the debate on the amendments will proceed then as per the arrangements that have

been made, with each party representative having twenty minutes to speak to each

amendment.

So, continuing debate, the Chair recognizes the hon. the Minister of Finance

and President of Treasury Board.

SOME HON. MEMBERS: Hear, hear!

MR. SULLIVAN: Thank you, Mr. Speaker.

I think it is safe to say that this issue is one that has galvanized people

all over the Province, I guess, on one side of the issue or the other side. The

fishery has been our reason why we existed. Like most people here in this

Legislature, we grew up around fishing communities. I grew up in a fishing

community. I spent all of my life, pretty well, around the sea. My father left

school at thirteen to go fishing, and raised twelve children from the fishery.

We had to practically drag him from a fishing boat at the age of seventy-two.

I have spent a lot of my early life around the fishery. I fished in the

summer. I spent a year and a half over five different summers and springs

working in fish plants. I have also had an opportunity to look at it from the

other side of the industry, too. I spent twenty years in the business, and there

are other perspectives that I can bring to it.

I was Mayor of Fermeuse, and I chaired a local action committee for the

entire region back twenty-five years ago when the Lake Group announced they were

closing the plant in Fermeuse. That was a year-round operation. Trawlers were

landing there. There was significant activity. It employed people in the whole

region. At that time we were dealing with probably the only main employer and

big employer in the whole region. Quotas were landed there, trawlers landed

there, and, despite the fight, nothing was left.

Mr. Speaker, lives were disrupted, as is happening in Harbour Breton, and

families suffered. They found a new owner. Then they found another owner. They

found FPI, and then they found somebody else. The company then went into

bankruptcy. Since that time, back in the early 1990s, there has hardly been any

fish processed at the plant there. It did not employ anybody this year, within

the plant, ten or a dozen last year, more the year before, and it has dwindled

down where there is nothing left.

Mr. Speaker, Trepassey is an area that has probably faced as much devastation

as anybody in the industry. I will read from something that was written by

somebody in that area at the time. Trepassey is now in my district. It was not

at that particular time. In fact, it was before I got into politics, just

shortly before that.

Here is a statement written by someone in the community. It said, "On

January 5, 1990, Mr. Vic Young, the President of Fishery Products International,

announced the permanent closure of the plants in Trepassey, Gaultois and Grand

Bank. The announcement came via the radio airwaves." That is how the people

found out.

It said, "Note that this was a full thirty months prior to the

announcement of the cod moratorium by the federal government in July, 1992, and

we certainly were not ready for it. As one of Canada's oldest European

settlements, and having been a fishing port for nearly five hundred years, the

shock waves were gut wrenching and immobilizing. All residents from the area

were shocked and people stood in a trance of disbelief. There were no thank you

letters, no golden watches, there were few severance packages, and the blow was

direct and painful."

The provincial government came to the scene and agreed to put in funding to

employ people for twenty weeks in 1990 and twenty weeks in 1991 to help

subsidize, to keep it open. It went on to say, "Sadly, the devastation

became a reality on September 21, 1991, when the FPI plant in Trepassey closed

permanently."

Mr. Speaker, there were 924 people employed in the operation or on trawlers

in that plant. Seven hundred and twenty-six full-time people; 657 production

workers; thirty-six trawler men; thirty-three in management. It was a

devastating blow to the town.

In 1992, Fishery Products sold that facility to the Town of Trepassey for the

grand sum of $1. That is what the town got from Fishery Products International

back in 1992.

It went on to say: The Trepassey Management Corporation provided funds to

maintain security until July, 1994, and the unavailability of sufficient funding

saw that come to an end.

Just a couple of other notes from that community. There were 75 per cent of

the businesses closed in that community. That town had 1,600 people. Today,

approximately 800 people. As one person wrote: "The only thing FPI did for

us was to sell that plant for $1." It made international news. There were

numerous newspapers all over the world that carried stories.

I am just going to read a couple of sentences from The Wall Street Journal .

It said, "Trepassey was so bursting with promise that the government in the

1960s paid for families to move here from remote hamlets in this Canadian

province. But by 1991, overharvesting had decimated fish stocks around the Grand

Banks, one of the world's richest fishing grounds for 500 years and Trepassey's

plant shut. Stripped of its machinery by an overseas buyer, the decaying,

vandalized factory now sits as a grim omen for a centuries old community facing

a precarious future." Mr. Speaker, that is a sad footnote on the epitaph of

a once prosperous community.

FPI was created out of

an act of this Legislature. It is a publicly traded

company with share restrictions. Fourteen months ago, when FPI talked about an

Income Trust, there was absolutely no commitment from that company to any of the

communities in which it served. This Premier took that file, became passionate

about it. He has fought for numerous aspects and kept saying no, no, no. In

fourteen months he has advanced that file as far as it possibly can get. You can

wait a month, you can wait two, you can wait five, the time has come - fourteen

months of trying to advance that file.

The company has given a commitment, a contribution to their debt of an Income

Trust. They raised the funding of $30 million. In Fortune, a commitment of about

$8 million in secondary processing to procure raw material, even elsewhere in

the world to continue, as it has done with Burin. Also, a commitment of a plant

in Bonavista, that should be in the $5 million range; a commitment of IT over

three years of $4 million; a one million dollar R & D over two years.

If you looked on the Harbour Breton issue, it has come into focus on this. An

Income Trust was intended to be on a purpose to move a company forward, but

Harbour Breton has become very much a part of that. The Premier has taken that

issue very personally himself and has worked to squeeze and twist whatever he

can out of the company there that operated in that community and made money in

that community and felt there is a responsibility they have to the community.

That responsibility was never passed on when the former FPI companies existed.

He is successful in getting - initially, it was $1.4 million requested by the, I

think, the committee and the community. Then he got up to $3 million; a

commitment of $1 million on the refurbishing of that. Some commitment on 3O red

fish. While it may not be significant, it is something. The red fish line and,

of course, other equipment. It may have price tags, I think, to put it there.

One number I heard was in the $4 million range.

There are other commitments the Premier has been successful in, on behalf of

the government and people of this Province; commitments on board commitment and

appointments; limits on trust ownership. He has looked at getting a marketing

agreement, the distribution of trust proceeds and extraordinary dividends. Also,

a commitment to harvest quotas here in our Province. If they breach those

quotas, there are certain repercussions that could occur, Mr. Speaker, where

they would revert to the Province under a ten-year lease back.

There are no hard and fast commitments in many aspects, and I do have

concerns on many of the things that are raised. There is the potential of

dilution of that particular ownership by acquisition, because acquisition could

dilute the actual ownership. We acknowledge that. I understand that. But we do

need a strong rural Newfoundland and Labrador, and how do we ensure that? What

impact is a yes vote going to mean on the future of rural Newfoundland and

Labrador? What impact is a no vote going to mean on rural Newfoundland and

Labrador? I am not convinced, really, that defeating it is going to accomplish a

stronger rural Newfoundland and Labrador. I have a concern, Mr. Speaker, that

defeating it may not only take Harbour Breton down, but it might take others

with it. I want to see Harbour Breton survive. It is more unique than other

areas of the Province. It is a hub of the Connaigre Peninsula. It is very

significant to the economy and to the growth and to the future, a little like

Trepassey.

Trepassey is over a two-hour drive here from St. John's. It was out in

isolation on the southern tip of the Avalon, too long to commute to work

anywhere else. It faced a devastating future and you can see it there in houses

that have gone for as low as $100, $200, $300. People gone to Alberta. They

could not afford to pay their rent up there and pay for their taxes back home,

and the houses have either been sold or confiscated and sold by the town. We

have seen hardship. We want to see it survive. I do not think there is anybody

in this Province whose heart does not bleed for the people in that area.

Mr. Speaker, I believe we have to find a solution collectively for Harbour

Breton, and I hope we can find it through this process, but we cannot go out and

start pitting communities against communities because it will only bring us

failure.

There are certain things that are certain, Mr. Speaker. There are certain

things that are very certain. One is that FPI cannot survive without cash. When

you have over $800 million in sales, and you get a return on your profit line of

one-fifth of 1 per cent, who is going to invest? Would you or anybody invest

their money in a company that is giving you one-fifth of 1 per cent return?

Absolutely not. It is worth nothing to an investor in its present form.

If FPI cannot acquire cash to pay down their heavy debt, to modernize, to

keep pace with a very rapidly changing and very competitive marketplace, Mr.

Speaker, FPI will die on the vine, and with it will die the lives and the hopes

and the aspirations of thousands of other men, women and children, their

families who depend on FPI for a future. We are seeing a decline in resource

availability. Resource is going down; quotas are going down.

Our Province has come to the plate. We have indicated, and the Premier has

stated, $1 million in Income Support, what is a short-term measure. He has

looked at $250,000 for a business plan to look at the area, to look at Harbour

Breton, to look at the region. That is important. An agreement to purchase

quotas so those quotas will stay in our Province - we purchased, we made an

arrangement, a shared arrangement, out in Arnold's Cove, to be able to keep

$3.5 million on the line so those shares will stay in our Province. The year

before we took government, that very former government allowed shares from

National Sea to go to John Risley and be bought, and not a squeak out of it, not

a word. We have been committed to keeping quotas here in our Province to employ

Newfoundlanders and Labradorians, and that is what we did in Arnold's Cove.

That is what this government and the Premier have indicated we will do here in

our Province.

The federal government has indicated they will contribute a minimum of $2

million. I am appalled, Mr. Speaker, that our federal minister, who has been a

champion of people in rural Newfoundland and Labrador, has been silent on an

issue so vital and so important not only to the people of Harbour Breton and the

Connaigre Peninsula but an issue so dear to people all over this Province;

because history has shown that communities have suffered immense pain over the

last decade and fifteen years and twenty years because of fish plant closures in

their communities. Some have struggled, some have found new owners, and some

have prospered, but there is a future around the fishery and there is a future

for rural Newfoundland and Labrador.

Mr. Speaker, the federal government controls quotas and they, too, have a

very important responsibility, because the people of Harbour Breton and the

Connaigre Peninsula, the people of this Province, are citizens of Canada. We

brought a resource to this country, and that resource of this country was used

as a bargaining chip to gain greater favour in the international arenas by

trades of other commodities in this country. It was used, and it is a

responsibility for which they have to step up to the plate and do something

significant, and they have been very, very silent on this issue.

This is a difficult choice and, I can tell you, it is one that I do not think

anybody here takes great pleasure in having to deal with. I am certainly very

sympathetic. I feel a solution has to be found, but I do not feel that we have

to compromise the future of other communities to do it.

We do not want to put Fortune, Bonavista, or any other community in the

position that Harbour Breton is in today. They are in a very difficult

situation. To be honest with you, if we look at voting yes for this, I have a

reasonable degree of discomfort with voting yes, and I do have a lot of

misgivings on many aspects of it. Mr. Speaker, to be honest with you, I am more

uncomfortable in voting no, because I think a no vote will begin the

disintegration of FPI and with it the demise of communities across Newfoundland

and Labrador. Mr. Speaker, I do not want that to be my legacy.

Thank you.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER WILLIAMS: Thank you, Mr. Speaker.

Mr. Speaker, first of all, what I would like to do is thank all members of

this hon. House. This has been tough for all of us. It has been excruciating,

quite frankly. We had an interesting caucus meeting this morning, everybody

expressed their views, and it is really interesting the distribution of opinions

and views and slants around the table as to what we should be doing here.

The process has been a good one. There has been a lot of antagonism in this

House, in this Chamber, over the course of the last couple of years. That has

been absent in these proceedings. I am just proud to be part of the process,

because I think it has been a very good process. The reason it has been a very

good process is that this is a monumental issue for the people of Newfoundland

and Labrador, extremely, extremely important, not black or white, lots of grey

areas, as important an issue as abortion and capital punishment, because at the

end of the day this decision can affect the lives of Newfoundlanders and

Labradorians, and particularly rural Newfoundlanders and Labradorians.

In my experience, in my life experience, and also in my experience in this

Chamber, this has been the toughest decision that I have had to make,

particularly in political life. I have agonized over it and looked at all sides

of it. What I hope to bring, from my perspective, to the table in this is some

business background, some legal background, to try and analyze what the

strengths are, what the weaknesses are, what the loopholes are to try and see

what we can do to plug those, and to keep an open mind throughout.

When I stood here during Question Period today and indicated that I hadn't

made up my mind until eleven o'clock this morning, that is the truth, and that

was a decision that was very difficultly arrived at. Even as late as last night

I was oscillating back and forth, trying to determine what was best for the

various communities, trying to be fair to the company, trying to make sure that

we had the best result for communities like Harbour Breton and Fortune and

Bonavista in the long term, trying to analyze where the weaknesses were, where

the off-ramps are, something that I sat in that chair across the House and

criticized the previous government for, not closing the loopholes and pointed

them out to them to try and assist them. Well, they have done the same thing.

What they have pointed out to us, of course, we were already aware of, because,

through the Minister of Fisheries and through the Minister of Justice and the

Attorney General, we have asked all these questions, we have posed all these

questions.

We have gone back to the company time and time again. We have tried to hire

the best legal advice that we could get to advise us on this, because there are

some very technical issues. When this first came to us, the first question was:

Can this company do it without us? Can they, within the confines of the

legislation as it is presently constituted, can they just go ahead and do it? We

had mixed opinions on that. In fairness to the company on that particular issue,

they could have gone off themselves half-cocked, started this procedure and then

forced us to go to court to try to stop that. Our legal opinions indicate that,

that would have been a difficult process. That was the very first thing.

When this first came to the table and was looked at generally by Cabinet, and

some of us ministers individually formed a committee, our first reaction was to

say no to this, because we had the concerns that had been expressed by hon.

members in this House over the course of this very worthwhile debate. We had

some very serious concerns. The concerns were, were we going to open up the door

and allow this company to get out of the grip of the people of Newfoundland and

Labrador?

It is interesting, one of the editorials in the Telegram some time

ago, probably about a month ago, the last few paragraphs said: It is difficult

to both try to gain the best possible returns for its shareholders - this is in

reference to the company - and serve the kind of public policy role that the

provincial government would like it to serve, and indeed which all members would

like it to serve. The problem as it stands, FPI has to do both. As with that

other well-known hybrid, the mule, it is a situation that has rendered FPI

fundamentally sterile. That is the problem that we had.

The company is basically saying: If you do not allow us to do this, then we

cannot grow, we cannot expand and therefore the alternatives would not be pretty

for the people of Newfoundland and Labrador. On the other hand, our concern is

that if we allow them to do this - in order for them to be successful in an

Income Trust, you cannot close all the loopholes because otherwise the Income

Trust would not be marketable. So we went through that process, and as a result

of going through that process and considering it we wrote back to FPI and we

said: I'm sorry, no. That was a letter, I think, that came from the Minister

of Fisheries, if I remember correctly - and said no to FPI, and that was back in

June of last year. That is some twelve months ago.

Then what happened is the communities came back to us and the FFAW came back

to us and they said: We would like this to happen. So, as a government, then we

were in a very difficult position because we had a situation where we felt that

this was not the right thing to do, the best thing to do under the circumstances

because FPI was putting nothing on the table. They just wanted to get the Income

Trust, take the money and do with it as they see fit. Once the communities and

the workers came back to us and said: Look, we want this to go ahead. We think

this is good for our community. We think this is good for our union. Then we had

an obligation to the people of this Province to reconsider it. That is exactly

what we did, but we only reconsidered on the basis that we could get extra

commitments.

From my personal perspective, at that time, I was opposed to it. So, I

figured if the only way that we can possibly deal with this is let's assume

that the worst could happen and that the company could possibly strip out this

cash. Let's look at it from what we would be left with. In other words, let's

protect the Newfoundland and Labrador assets for the people of Newfoundland and

Labrador. That is when we got into a detailed discussion with regard to the

various concessions, for want of a better term, that the company gave. So that

was a long process. Over the course of time, as we are aware now - and I am

going to deal with the Harbour Breton issue first because that has come to the

forefront, but it is a focus because it is a community that is under extreme

stress, and I have seen it first-hand.

I want to just read some of the hundreds and hundreds of e-mails that we have

received from people in Harbour Breton. I think it is fair to say that it was

these e-mails and what we have seen and what we have heard is the reason why

myself and the minister went down to see it first-hand, because you do not have

a really true appreciation unless you talk to the people. This e-mail says, from

a young woman in Harbour Breton - this is several weeks ago. This is not

current, Mr. Speaker. "I know that you can probably sympathize with the

community of Harbour Breton, but, do you Mr. Williams see the tears pouring over

my mother's, and aunt's, and uncle's face when you go to bed at night?

Well, believe me, sleep doesn't come easy after that. Please vote NO

tomorrow..."- and this was the last time we were in this House -

"...and wipe the tears off my family's and community's face."

Another young woman from the community, "I am..." such and such -

and I will not name her. She might not want to have her name on television.

"...I am 17 years old...all I think about is having to move away, move away

from my hometown, making new friends - which is not going to be an easy task. I

am so sick of it all... Everyday I come home crying, wondering what time we're

leaving. I am so depressed to see what is happening to us... I now have a broken

heart. I'm so afraid of leaving my family and friends and, most of all, having

to move away and graduate with completely different people. It is not what I

wished for. Please consider this and, from the bottom of my heart, Save our

community, Save Rural Newfoundland."

"My name is...and I am 14 years old..." - another young woman from

the community. "Half of Harbour Breton is gone away to Alberta, Halifax,

New Brunswick and more. 10 years from now there might not be anything left of

this town because everyone will be gone. Maybe not even 10, probably 5. If

everyone were to leave this town and come back to see what is happening, all

there will be left is hills and probably some dirt roads."

The final one, Mr. Speaker, comes from a young man: I am writing to you about

the FPI. proposal. When you vote, please say no for your and our sake. Maybe

because I'm 13 you may think you don't have to listen to me cause I'm just

some little kid. If you really want everyone's respect, you will. This is a

big issue and I hope you say no.

Now, I am sure, over the years, as the Minister of Finance has indicated,

there have been lots of little kids who have felt that. They probably had not

written it. They probably did not send it. They probably did not have e-mail.

But I can tell you that those e-mails and what we saw in Harbour Breton had a

huge impact on us, a huge impact on us. What was stated in those e-mails, we saw

it firsthand. I can visually see most of the women in that room, in that hall,

crying. I can visually see a half-dozen young females over on the side, probably

from sixteen to nineteen years of age, openly weeping. I saw men come to the

microphone with their children and express the fact that they have to leave

their community. That is what we are dealing with. There were open tears. There

was a lot of passion, an awful lot of emotion. As a Member of this House of

Assembly, and as Premier of this Province, that has a huge impact.

When we were in Harbour Breton we said that we are going to do whatever we

can, and we have made a commitment to Harbour Breton. We are not going to let

Harbour Breton go, we cannot. We simply cannot. Not only is it a fine community

but it is also the anchor of that whole peninsula. There are all kinds of

communities that are dependent on Harbour Breton's success. So, we started

from scratch and we did absolutely everything we could to try and get as many

concessions as we can.

When we first met with the committee - and we met with the committee on every

single occasion that they asked. Originally, there were three major items. They

wanted Income Support, they wanted the plant and equipment, and they wanted

quotas. The committee, in all fairness to them, they have been very consistent

in that. They have asked for those throughout. In the beginning they were going

to have a plant that was very tainted, that was environmentally damaged, for

want of a better term, and structurally damaged. The equipment was questionable,

what equipment was going to come and go. There was a question of how much Income

Support they were going to get. They asked us to ask for $1.4 million. As well,

they were looking for quotas, and they were looking for quotas from FPI right

from the start.

So, we went and got the commitment on the plant and the machinery and

equipment, but we do not take credit for that because, in all fairness, I think

that was coming anyway. I think the plant, without the environmental clearance

and some of the equipment, was coming anyway. The $1.4 million; we, as a

Cabinet, felt was too low. We said: we are going to look for more, and we feel

that it should be $3 million. Now, there has been some discussion as to whether

that is really $3 million because in order to get that extra $1.6 million the

community of Harbour Breton has to give up its right to sue or to start an

action under the Labour Relations Board. Our preliminary opinions from within

government - I understand that opinions the union have gotten as well indicate

that it is quite possible that the residents of Harbour Breton who start that

action will not be successful. So, based on that, we felt: Look, a bird in the

hand is worth two in the bush. We will try and get that number up. So, take $1.6

million now instead of trying to fight for $2.5 million or $3 million down the

road and being unsuccessful and get nothing. So, on that basis, we went from

$1.4 million to $3 million.

The question of quotas. FPI has also been as consistent as the committee and

has said no to quotas throughout. So, we then went back again for another round.

One of the things, or several things that the committee mentioned to us, they

wanted an environmental indemnity for the plant because they did not know what

they were going to get into. If they got the plant for $1 they could end up with

an environmental mess. We, in fact, have achieved an indemnity. That is an open

chequebook because the company does not know what the environmental consequences

are down there. So to get that concession from the company, even though they

have an obligation to do it, was still a significant concession.

As well, the committee came back very late in the negotiation and said we

would like to keep that redfish line that is actually on the plant floor. We

went down, we went through that plant, and we had a look at it, and we could see

why. There was a redfish line that was being stored in the back of the plant,

and the committee said: They can have that one, but we want the one that is on

the floor. We thought that would be very difficult at that stage to get that. We

got that as well.

The other thing they were concerned about was that they would inherit a plant

or get a plant for $1 that, even though it might be environmentally clear, still

required a lot of work. We went through that plant and, I must say, I was

pleasantly surprised. Obviously there is some deterioration in certain sections

of it, but the gentleman, Eric Day, who took me through it, indicated that there

were certain sections that could be salvaged, could be improved. Others were

very good sections that needed minor adjustments and minor tweaking in order to

be workable. On that basis, he convinced me that we should go back and try and

get $1 million from FPI in order to achieve that, which is exactly what we did,

and we got that.

As well, we kept pressing them for a quota, and the only quota that we did

achieve was the 3O redfish quota which, in fairness to the committee and in

fairness to the people of Harbour Breton, is not enough. That is not what they

need.

While we were trying to get that quota, we were exploring the option of

possibly purchasing another quota from another company that might be available.

We were also trying to explore the possibility of a herring industry down the

road for the South Coast of the Province, which would include Burgeo and Harbour

Breton. As well, we were supporting the community on looking for a shrimp quota.

All of those activities were taking place, but us fully realizing, as I said

during Question Period, that all we can do is try and get what we can from the

company and at the same time agree to stand up for the community and provide

cash in order to assist them in purchasing a quota down the road.

As a result of all of that, we did end up getting the Income Support from

$1.4 million to $3 million. We ended up getting $1 million for the plant. That

is $4 million. The provincial government, from day one, said: We are there for

you. We will be there for you. We will provide assistance. We committed $1

million without hesitating, in order to make sure that community was comfortable

that they were not going to be destitute, and that money has been available

throughout. At the same time, we agreed to put up $250,000 so that they could

develop a business plan to look at their future, whether that involved the

fishery or something else, or a combination of both. That has been put aside,

and I understand that plan will probably be available in August.

Since then, the federal government have stepped in and said that part of

their money will go toward the business plan, so they will pay for the business

plan. Well, if they pay for the business plan, then our $250,000 is in addition

to the $1 million, so you will still get the benefit of that.

The missing link in all of this was the federal government. Despite the

efforts of the Member of Parliament, Bill Matthews, they were not stepping up.

As the Minister of Finance said, there was someone conspicuously absent from

this process, and that was the regional minister. That was the Minister of

Natural Resources. That is the person who voices our concerns, the Province of

Newfoundland and Labrador's concerns, at the federal Cabinet table. So, in the

absence of that input, we still proceeded forward. The Minister of Fisheries had

several conversations with the federal Minister of Fisheries, and we kept

pressing and pressing and pressing.

I spoke, as I indicated here in this House, to the Minister of Human

Resources, Belinda Stronach, on three occasions. I spoke specifically to

Minister Regan. I spoke to the Prime Minister on this. When he was in town on

the foreign overfishing conference, I specifically mentioned Harbour Breton

because I wanted it on his radar. I wanted to make sure that he knew about the

community and he knew there was a problem. We had also been speaking with

all the buttons, doing absolutely everything we can.

Late in the week before last, the federal government were not at the table.

When we decided we were going to postpone debate, we still felt that we needed

to get more from FPI; but, equally important, we did not have anything from the

federal government. Even though we talked to federal ministers, there was no

commitment from Minister Stronach, no commitment from Minister Regan, no

commitment from Minister McGuire, who is the Minister of ACOA. I am sorry. In

all fairness, no, ACOA had sent a letter.

We wanted to make sure that we got everybody together. By having the delay,

we were able to get, on the following Monday, a meeting of federal officials

here after I had agreed, together with the minister and the Minister of

Fisheries, to lead a delegation to Ottawa to advocate on behalf of the people of

Harbour Breton. When I sent a letter off on Thursday to those three ministers,

on Friday we had a response that: We do not want - this is not what they said,

but they were obviously thinking - we do not want Williams back in Ottawa again.

It is not another Accord situation. We will come to you. We will come down and

we will sit with your officials.

That is what they did. We had to twist their arms in order to get them there.

That is why, from my perspective yesterday, I was so disappointed that Harbour

Breton did not feel that me, personally, and we, as a Cabinet, and we, as a

government, had not left a stone unturned in order to try and get whatever we

could for Harbour Breton, and we are still trying.

When you add it up, you know, we have the $3 million. We got $1 million for

the plant; the provincial government, $1.25 million; the federal government, at

least $2 million. They have said a minimum of $2 million. That is $7.25 million.

The redfish line which we have gotten back is worth at least another four

hundred, which means that the other equipment that is left in that plant, when

it was bought, was worth $3.6 million. That is now a value of cash and assets of

$11.25 million for the people of Harbour Breton. In addition, we have gotten the

redfish quota. If it is worthless, it is worthless. If it has some value, add

that on. As well, they have the plant. Even though they will pay $1 for it, it

will be environmentally clean so that has value. As well, we have said that we

will do what we did for the people of Arnold's Cove. In order to save their

community - which is what we did in Arnold's Cove, and we saved 350 jobs in

Arnold's Cove - we ponied up and we bought a quota for Arnold's Cove to make

sure that they survived. This government is prepared to do that, and it is

prepared to do it with Harbour Breton. When you add that up, if that is a $3

million figure, that is $14.25 million.

My concern for the people of Harbour Breton was more of a concern of

frustration, that they might turn their back on this and lose some of it. They

would not lose the federal government commitment, they would not lose the

provincial government commitment, but they could lose some or all of the FPI

commitment. It is a significant amount of money, and it also positions them, I

think, reasonably well. It positions them so that in the short term they have

the money they need. In the medium term, we are working with ACOA to look at

some jobs that could be created, and I am told from the last federal meeting

that we could immediately create thirty jobs and then follow up within sixty

days with another forty jobs. That is seventy. That is a start. It is not the

answer, but it is a start. At the same time, we could be refurbishing the plant

in Harbour Breton. We could be getting it environmentally cleaned up. That would

create some more work down there, so that coming out of the winter, when we have

the plant up and running and ready to go, we are in a good position then to go

after some quota, whether we buy some quota, whether we get some quota from the

federal government, no matter how we get it.

We are also able to say to the federal government: Our community is pumped up

now. We are buoyed up, but we need something from the federal government - and

let's not get it lost on people. There is going to be a federal election early

next year. What a great time to be going to the federal government and looking

for a quota.

That was the plan that we had in place. I do understand and I do appreciate

that the people of Harbour Breton need a quota to survive, but there is only so

far that the provincial government can go, and we have done everything we can,

but we will not give up. We will not stop there. That is not going to be the end

of it for the provincial government with regard to Harbour Breton. We will

continue to fight for Harbour Breton.

I just wanted to lay it out for the people in Harbour Breton exactly what we

are prepared to do for a community, what we are prepared to do for rural

Newfoundland and Labrador. Nobody knows it better than the minister. She nods

her head there because she has put her heart and soul into restoring rural

Newfoundland and Labrador, as we all have as a Cabinet, as we all have as

members. We are committed, and the test was last night.

We went into rural Newfoundland and Labrador. We went into a seat that was

not our seat. It was a seat that we had not had for a long, long time. I went

around door to door. I could quote the member for Grand Bank-Fortune in an

interview with CBC: I hear now again this morning that Bonavista will get a new

plant out of this proposal, so there are good things here for rural Newfoundland

and Labrador.

She has acknowledged it, and when I went door to door the people in rural

Newfoundland and Labrador were saying: We believe you. We really believe that

you are doing something. Because what we have not been doing, Mr. Speaker, we

have not been sort of heralding all of the great things we have been doing. We

have had our heads down, we have had our sleeves rolled up, and we have not

stopped working since we got elected; and, I have to tell you, I am getting

pretty tired because we have not had a clear break. Hopefully during the month

of July we are going to get a week or two and maybe get some time off.

We have not been out saying all of the good things that we are doing, but our

major focus is rural Newfoundland and Labrador, and last night, with Clayton

Forsey elected in Exploits, that was a huge endorsement and a huge affirmation

by the people of this Province that we are doing something right.

SOME HON. MEMBERS: Hear, hear!

PREMIER WILLIAMS: We are not doing everything right, and we do not

pretend to. I had some great discussions. I had discussions at the door with one

man who said he did not want to talk to me because I increased his moose licence.

I said: No, let's have a chat. No, no, I just don't want to talk to you. I

said: Okay, but you need to understand why that happened, why we did it, because

we had some fiscal problems and we had to raise some money. At the end of the

day he still did not want to hear it, but at least I got a chance to hear him

and that registered with me.

I also talked to store owners in that particular district who are concerned

about some of the licence fees. This is not something that will be lost on us as

a government. We have to go back - we have a Red Tape Reduction Committee - and

we are going to have to start and look at some of these, but hopefully we will

be in a position to be able to do something when we can turn the fiscal

situation around in this Province. That is why we fought so hard on the Atlantic

Accord. We worked really hard. We took on Ottawa. There were times when people

kind of thought, oh no, we will never be able to talk to Ottawa again - but we

have a new respect from Ottawa. We now, as a Province, have respect. The people

of Newfoundland and Labrador are proud people and we deserve respect from the

federal government.

SOME HON. MEMBERS: Hear, hear!

PREMIER WILLIAMS: Mr. Speaker, to get back to the issue at hand, just to

lay out for the people of Harbour Breton where they are. Of course, at the end

of this I will give you an indication of where I am going.

Then we went back to FPI to try and cover up the loopholes. We, as a Cabinet

and as a government, had concerns, the Department of Justice had concerns, to

make sure that we could try and cover off some of the issues. Would the

shareholders take the extra cash and bleed it out? So, we put in a dividend

policy that covered that. Would we be breaching the 15 per cent control

situation? We managed to get a concession from them on two out of three but,

because of some interpersonal relationship between the shareholders, they are

unable to bring the Icelanders to the table. That is a concern. That is a

concern of members of this House. It is a specific concern of mine.

The restrictions on dividends I have already mentioned, but the other thing

as well is, they are selling 40 per cent of the Income Trust and we will have

control of the Board of Directors. Those were two other major issues. The point

is, though, however, that those directors have a fiduciary relationship to the

trust or to the company that they represent, so FPI is not in a position

necessarily to control what they do on the board of an Income Trust. The reason

is that they have a specific duty to that specific Income Trust, so that is a

concern. That is something that cannot be prevented. As well, FPI have indicated

that they are going to sell 40 per cent to an Income Trust. There is no way of

keeping that horse in the barn once it gets out. So, in fact, that 40 per cent

could be more than 40 per cent, and it could go much higher. That is a concern.

These are loopholes that we tried to cover. We went back to them. We had

legal opinions involved in order for ways for us to do it. On analysis, if you

are going to put the Income Trust before this House and ask for it to move

forward, then it has to have a chance to succeed, because if it does not succeed

then it has just been a complete waste of time. Some of those restrictions, if

the fetters had been put on them too tightly, then that Income Trust would not

have carried.

We then went back to the company and we started to look for concessions. As I

said, given those concerns - and those are concerns that I have, personally, and

still have - we said: Let's assume the worst possible scenario. What can we do

to protect Newfoundlanders and Labradorians, rural Newfoundlanders and

Labradorians, and the Newfoundland and Labrador assets?

One major concession that we got was on quotas. That was something, I think,

that raised even the Minister of Fisheries' eyebrows. We pushed hard for that

and we got it. As well, we got a commitment from the company that they will land

and process their groundfish in the Province of Newfoundland and Labrador,

something that they are not obligated to do. That was a major concession, and

that concession has been made whether the Income Trust carries or not. That is a

huge concession.

The default of their groundfish quotas, as well, is significant, because if

they breach any of the conditions of this particular agreement then the remedy

is for the default of the groundfish quotas. It is difficult to value groundfish

quotas. We had to place a value on the ones in Arnold's Cove when we saved

that community, but if that size of quota for that community has a value of $3.5

million, then you can do the math pretty easily and realize just how valuable

the groundfish quotas are for FPI.

Those were some of the legal concerns. On the monetary side, the question

which we all asked is: What are you going to do with the money? You are going to

get $100 million here. We are going to try and keep you from stripping this out

and passing it off to shareholders, collapsing the valuable asset, which is the

marketing arm, and then leaving it and leaving us with nothing.

First of all, we had an agreement from them that they would place $30 million

worth of these proceeds down on debt, so that is 30 per cent of 100 per cent

going to go down on debt. We have also asked for a further commitment from them

that, in addition to that, if there is any future monies raised, that they would

maintain the same reasonable debt-equity ratios to make sure that they have a

continued commitment to put more debt back into the pot. On the IT side there

was a commitment of $4 million. On the R&D side there is a commitment of $1

million. We know the concessions and commitments that have been given to Fortune

and, as well, to Bonavista; very, very important, obviously, for the members of

this House representing those districts and for the people in those communities,

very, very proud fishing communities. We have to remember that the situation in

Fortune was not a good one. As well, we have a commitment in the term sheet that

the people of Fortune will also be looked after, in the interim, until such time

as that plant is completed. As well, as a result of discussions between the

Member for Bonavista and the council and FPI, we had a concession for a new

plant in Bonavista, which was a huge victory for the people of Bonavista. Then,

of course, we have Harbour Breton as well.

When you start to add up those cash commitments, as I said before - and I may

be out by $1 or $2 million here, because these are just the most current numbers

that I have - there is about $53 million in cash alone. As well then, we have

the assets. As well, we have community commitments of five years. People say:

Well, you know, five years is nothing in the fishery. Is that all you can get?

No company in this particular industry can commit beyond that. The commitment

was made for five years. It is subject to economic viability, which everyone

will say: Well, maybe that is a wishy-washy test. The definition that we have in

the term sheet is as strong a definition of economic viability as we could put

together, so that was significant. Then you are dealing with Marystown, Burin,

Port au Choix, Port Union, and Triton. All these communities, as well, are

affected by that commitment, and that is, again, a significant commitment.

As well, as the Minister of Finance indicated when he was on his feet, there

is a seven-year marketing commitment which has been given from FPI, because they

are very good marketers. That is what this Income Trust is all about, the asset

they are selling. Let us not lose sight of this. The members of the House of

Assembly should not. The marketing arm is the one that has value here. The

domestic Newfoundland and Labrador arm of FPI does not have the value. They are

trying to sell off the crown jewel which is the marketing arm. If they were

going to do that and they were going to place it into an Income Trust, then we

have asked the company to get a commitment, a seven-year commitment, so that

Newfoundland and Labrador products can be marketed through that seven year

period.

Those are the main concessions, and I can go down through them, and they have

been repeated before, but I know time is getting on. I just wanted to sort of

give people an overview of exactly what we have done. We have come from a

request for an Income Trust with nothing on the table to all those concessions

that I have just indicated to this hon. House. That is what makes our decision

so difficult. If we could go back to the decision that we had last June when

there was nothing on the table, it would be easy for all of us to vote no and

walk away and say: Well, that is fine, they were not prepared to put up

anything. They got $100 million, they were going to walk away with it, we are

not going to agree to that.

However, the reality of what we have to face here is, we do have a business

that is in trouble. Now, there has been all kinds of people who expressed

opinions on the airwaves and everything, and that is good, quite frankly,

because I have listened to them. I listen to as many as I can - especially

travelling around during the by-election - just to hear what they are saying,

what the different point of view is, and everybody brings a different

perspective. We learn something every time one of them speaks. But that company,

rightly or wrongly, is in trouble. So, the question then is: Do we agree with

this plan? Do we allow them to do this or do we force them to stay and keep

going and continue on as they are? That is the decision. An extremely, extremely

tough decision. No tougher than any other decision in the fishery, because in

our fishery the sad news is that we are facing declining stocks. We have to try

and manage our way through it, that is what RMS was all about.

We all know the crab fishery is declining. We do not like it. We cannot do

anything about it, but as John Crosbie said: we can't put the fish in the

water. We can't put the crab back in the water. So, we, as a government, are

trying to assist the communities to work through these difficulties. That is why

we were so adamant on RMS. In this particular situation, it is the same

situation. We have a very scarce groundfish in this Province. It has been that

way for a long, long time. Again, we are trying to manage through difficult

situations. As the Minister of Finance indicated the story in Trepassey, very

analogist to what Harbour Breton is going through. But Harbour Breton has some

major concessions on the table.

The bottom line on this, is that this has not been easy. This has been

extremely difficult. It has been really hard on all our members. You had to be

in that caucus room this morning at 11:00 o'clock and listen to conversations.

You would have been really pleased. You would have been pleased with the

membership, the representation that you have in your Province. To hear the

expressions and the points of view that are being expressed. People who know the

fishery right from their heart. Right from their guts they know it, and in there

saying exactly what they thought. People bringing a business perspective. People

trying to make the right decision. It is like being on a jury. Exactly the same

as being on a jury. People torn, not knowing which way to go. That is why this

is so important. That is why a free vote in this House of Assembly is so

important, and this is a true free vote. There is not one caucus member here

today who will not say that I said to them this morning: if I have to take a

position and I stand alone, I stand alone. That is just the way it is, and that

is the beauty of a free vote. That is why I am really pleased with the way this

process has evolved. Again, I pay full marks to the way that we have conducted

ourselves in here, both sides of the House. Sure, there has been a little bit of

banter. That is all part of it, but the importance of it has not been lost on

the members.

Now, to get down to the crux of it. From day one I have had some difficulty

with this because I see us all in the situation where we are damned if we do and

we are damned if we do not. If we decide to vote yes and let the company go

ahead and the company does some of the things that it can legally do by

manoeuvring around the various clauses and the various corporate structures -

because they have a very complex corporate structure set up. If they decide that

they are not going to act in good faith and they move around some of these

structures, then it is quite possible that the horse will get well out of the

barn and we will never, ever get that horse back.

The other decision, unfortunately, is that if we do not do something we are

going to have a situation, probably as early as Monday morning, where this

company can say: If we don't have this money, then we can't move forward.

Therefore, Harbour Breton, we can give you some of the things that we promised

you, we can let you keep some things, but we are going to have to take some of

that money off the table because we just do not have the money to operate. The

company is probably going to say to Fortune: I'm sorry, we can't do what we

would like to do, which would make good business sense to do. They will say to

Bonavista: I'm sorry, we heard your member, we heard your Committee, we heard

your council. We know that is the right thing to do, but we do not have the

money to do it. But, the question is: Do we have the security? Have we closed

the loopholes? Have we prevented all the off-ramps?

When I sat over on that side of the House, I criticized the Voisey's Bay

exercise, I criticized the Lower Churchill exercise, on the basis that I did not

feel that the documentation was tight enough and was secure enough. I even made

the statement, which I made in the House today, that there were more off-ramps

than the 401. In this documentation here, we have done everything we can to

squeeze out every little bit and to cover as many loopholes as we can.

From a personal perspective, I have to be consistent. I cannot stand in this

House and be inconsistent from what I advocated on that side of the House. That

was when the hon. members opposite were in government and I felt that it was not

closed tight enough, the situation where we could prevent no more giveaways; a

slogan that we personally campaigned on and assured people that we were not

going to give away the resources of the Province. I wanted to make sure it was

as tight as we could. We went as hard as we could on this. We have secured

everything we can. We cannot take it any further. That is why we asked for the

extra couple of weeks to see if we could squeeze out some more concessions. As a

result of that, I am not satisfied. I cannot, in my gut, vote yes for this

particular amendment. That means I will be voting no. Now, that has to be

weighed against what a yes vote means for all the other communities.

What I tried to do here today was lay it all out, as best I could, to let you

know what the options are, what the concessions are, what the advantages are. If

this is defeated today, my job will get a lot tougher Monday morning, but I am

not prepared to stand here, myself personally in this House today, and vote -

and it might be a little bit of a legal background - for a document that I am

not comfortable is tight enough to give us the assurance that this may not be a

giveaway. Now if, in fact, everything pans out, everything is done in good

faith, all the commitments are honoured - this is a huge win for Newfoundland

and Labrador if there was a yes vote and if the Income Trust is successful.

However, having seen the legal opinions, having worked through the legal

opinions, I am not satisfied that this is tight enough. So I will be voting no.

After a long time of considering this, as I said oscillating back and forth,

it is our job, as members of this House, to try and weigh the pros and the cons,

the positives and the negatives. I do not envy my colleagues in a decision that

they are going to have to reach. I know they will reach the right decision at

the end of the day. I certainly will stand behind them, no matter what the

decision is, but I want the people of Newfoundland and Labrador to know that we

have agonized over this. We have done absolutely everything we can, and

hopefully it works out best for the people of Newfoundland and Labrador.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: I think, by agreement - are there further speakers at this

stage in the debate?

I hear no further speakers. The Speaker then will call the amendment put

forward by the hon. the Member for Signal Hill-Quidi Vidi, to move as follows:

That all the words after the word "That" in the motion at second

reading be deleted and substituted by the following: "Bill 41,

An Act To

Amend The Fisheries Products International Limited Act, be not now read a second

time but that it be read a second time this day three months hence."

The hon. the Member for Signal Hill-Quidi Vidi.

MR. HARRIS: Thank you, Mr. Speaker.

The motion that I made before the House two weeks ago was made in the context

of an agreement by all parties to bring the matter forward for debate over a

two-day period. Ultimately, to come to a vote on the Friday of two weeks ago, on

June 10.

I moved the motion early in the debate. I moved the motion saying that I was

not satisfied that there were enough players at the table, that the federal

government was missing, that no commitments had been obtained and not enough

work had been done to ensure that they were a part of what I call the puzzle,

with respect to the people of Harbour Breton.

I said that I could not support the legislation, although it had some merit,

without some further concessions from FPI because I was not satisfied that they

were bringing everything to the table that they were capable of making available

to the people of Harbour Breton. I proposed what is known technically as a three

month hoist, which would allow an opportunity for the federal government to be

sought as participants in the future of Harbour Breton, to take their

responsibilities for the future of this community seriously, and for FPI to be

requested, lobbied, insisted upon, to come forward with something more for the

future of Harbour Breton. It was not necessarily intended that a full three

months need to be taken.

At the end of the day on Friday, two weeks ago, it was agreed that the House

would adjourn, effectively achieving an opportunity for events to unfold with

seen, certainly, some movement. We have seen a commitment of a specific amount

commitment to make available monies from other programs based on whatever future

opportunities or options are pursued in Harbour Breton from a business

enterprise point of view.

We have also seen some further commitments from FPI, the commitment to ensure

that any environmental deficiencies of the plant in operation in Harbour Breton

will be their responsibility and not the responsibility of the people of Harbour

Breton. It is an unknown quantity, Mr. Speaker, but it is a significant worry,

concern and uncertainty that would obviously diminish the options for the people

of Harbour Breton. There is a commitment of an additional $1 million to

refurbish the plant in operations in Harbour Breton. There is a commitment of a

redfish quota which may or may not have significant value, but it is not

nothing. It is some access to the use of some quota.

I was disappointed to hear today the Premier say that he wasn't prepared to

commit a licensing, processing, for shrimp and for other possibilities, whatever

quota may be obtained for Harbour Breton. That is a serious deficiency, Mr.

Speaker, a very serious deficiency.

The question then remains: Is there a point at this stage of the debate to

put the matter off for a further two-and-a-half months or three months? Will the

change, if it is a discretionary matter that is not going to come to fruition

until this time next year? Is it possible in the next two or three months that

the quota that the Premier has talked about assisting in the purchase of will

become available? Is that worth waiting another three months to see whether it

will transpire? Is it possible that the options for Harbour Breton will

crystalize in the next two or three months? I do not know. I do not know, but

the other question, I guess, we have to ask ourselves at this stage is: Is it

worth the additional three months of agony, of concern, of uncertainty, of

angst, that the people not only of Harbour Breton will face but the people of

Bonavista, Fortune, Marystown, Port au Choix, Triton, and the other places where

FPI operates, to put them through that uncertainty that is now before their

communities as well as that of Harbour Breton?

In a sense, Mr. Speaker, while it is possible that something could happen

over the next two or three months, the purpose of my motion that I made two

weeks ago appears to have been achieved, at least to the extent that we have

seen improvements in the position of the commitments of FPI to Harbour Breton

Breton. So, should we wait another three months and see what happens, and leave

this company, the communities not only of Harbour Breton but everybody else, in

uncertainty, or should we face up to our responsibilities today to either

approve or not the bill before the House?

I think, Mr. Speaker, upon reflection, and having seen that the last two

weeks have done something to at least find out what the bottom line is, that is

may not make sense to continue to delay matters by waiting another three months

to put this bill to the House of Assembly.

Mr. Speaker, having put the motion, the motion is there. It can either be

voted on by members of this House, or if the House wishes to have it removed

from a vote then I would be content to do that. I do not necessarily want to put

people through a vote on that if it is not necessary, but under our agreement

each caucus represented in the House has the right to speak for twenty minutes

and I certainly would not want to deprive anyone of the right to speak to that

particular motion, to talk about the difficulties that we are all facing here

today in terms of the future of communities in this Province, of a company that,

as I said in my speech two weeks ago, something that I had been very proud of,

as a corporation that had a mandate and a vision and conducted itself over a

long period of time in what I feel was the best interest ultimately of the

Province. That did not mean they did not close plants, Mr. Speaker. I heard the

Member for Ferryland, the Minister of Finance, talk about this. They did close

plants, even though they carried on. We cannot have a company that cannot ever

close any plant, but the question remains, Mr. Speaker, do we come to grips

today with this decision or do we wait three months?

I think, on balance, Mr. Speaker, we should make the decision today. I

understand the Leader of the Opposition is going to speak to this motion. We can

bring it to a vote if members wish, but I would be content if leave were to be

granted to remove the motion from the floor and allow us to continue to debate

the other amendments that might bring some changes to the legislation or see

what happens to it.

Having said that, Mr. Speaker, I will take my place and allow other members

to speak to this issue. If they wish to grant leave to remove it, then we will

do so.

MR. SPEAKER: The hon. the Leader of the Opposition, speaking to the

amendment.

MR. REID: Thank you, Mr. Speaker.

Normally when I stand, I say that I rise with pleasure to speak today, but

this is not certainly one of those occasions. I think what we are being asked to

do today is probably vote on the most important piece of legislation that we

have seen in this House of Assembly in quite some time, certainly in the years

that I have been here, and that is just about ten years now, Mr. Speaker.

What we are being asked to do today is to vote to allow FPI to sell off its

American assets, its value-added and its marketing division that exists in the

United States, that makes up 60 per cent of the companies profits. Those profits

are distributed, not just amongst the companies in the United States but it sort

of keeps those fish plants that we have here in this Province alive, that

managed to survive through the moratorium and so on.

In return for allowing FPI to sell off these assets, the most valued assets

that the company has, FPI has made a number of commitments to the Province, what

they are going to do. The most important of those, I guess, are: they are going

to build a brand new fish plant in Bonavista in the fall of 2007; and they are

going to redevelop a fish plant in Fortune where they are going to do some

secondary processing. The question is: What are they going to do for the people

of Harbour Breton and the plant in Harbour Breton? The people who are sitting in

the gallery here today from Harbour Breton, the IAS committee, and the chair of

the local union down there, have told me, without fish Harbour Breton will not

survive.

Mr. Speaker, there is nothing in this piece of legislation today, or in this

commitment that we have from FPI, that gives Harbour Breton fish. They talk

about a few tons of redfish. Anyone involved in the industry, including the

Minister of Fisheries and the people sitting in the gallery, know that 3O

redfish is valueless. In fact, Mr. Speaker, FPI left redfish in the water last

year because it was not profitable to catch, let alone process and try to market

or export. So being offered that is very little.

We have heard about what else is on the table; the $3 million that the people

of Harbour Breton think they are owed already. That is no gift. We talk about $2

million from the federal government; well, I hope that the federal government

would come to anyone's aid, any town's aid, in this Province when their main

employer goes under and give them $2 million. The Province talks about putting

$1.5 million into a make-work program. I would expect them to do that anyway.

What have we got for Harbour Breton? As far as I am concerned, without fish

there will not be a Harbour Breton. We are being asked to decide that today. We

are being asked to say, basically, for a new plant in Bonavista and one in

Fortune and nothing for Harbour Breton, that we should allow FPI to sell the

most valued asset.

Let's go through the three things that I just talked about, Mr. Speaker.

Let's talk about the sale of the American assets. Anyone who knows FPI knows

that is the most valued asset. That is the asset that the previous board of

directors, and those before them, bought and established in the United States,

because they realized in order to make the towns and the plants that they

operated in this Province profitable they needed a marketing division, in order

to sell their fish and compete globally which they do and did well. They also

started a secondary processing facility in Danvers, Massachusetts and I think

there was one in another state in the United States before that. Because they

were very successful with that division, they were able to subsidize, in hard

times, the operations back here in the Province. That was the intent of FPI when

it was established by this government with the aid of the Federal Government of

Canada. That is what happened back in the 1970s when they were collapsing the

groundfish fishery and plants were going bankrupt, the government of the day had

the wisdom to pull it all together and make one company out of it, with the

intent of stabilizing the fishery and helping protect the communities and the

residents of those communities in rural towns all around this Province.

We are being asked today to change the legislation that would allow these

people to be able to buy up all of the secondary processing and the marketing

division that exists in the United States. I have a big problem with that, Mr.

Speaker. I say to you and I say to the people who might be listening here today,

even if Harbour Breton had a fish quota today that might be acceptable to them I

could not stand in this House and support what FPI is trying to do, to carve off

the most valued part of their company and sell it. What does that leave us with?

We have heard the CEO of FPI stand on many occasions and talk about what

value there is in groundfish and the competition from China and the dollar, the

fluctuation in the currency, and that basically there is no money in groundfish.

What is going to left in this Province if we allow FPI to sell off those assets?

I say to you, Mr. Speaker, if we allow FPI to sell their most valued assets,

then those who are least valued will not exist for much longer. I say to you,

Mr. Speaker, I doubt they will exist four or five years down the road. The least

valued assets are the ones that rest and reside in this Province. Mr. Speaker,

that is the selling off of the FPI thing.

FPI also talks about building a fish plant in Bonavista and rebuilding and

redeveloping the one in Fortune. They have a dollar value attached to it and

they have a time frame in which they are going to do it, but there are two

circumstances or two conditions, two caveats, under which this is going to be

able to proceed. Here is what we are being asked to do. FPI is saying: We will

build a new plant in Bonavista and we will redevelop a plant in Fortune under

two conditions, and the two conditions are: If there is resource availability,

and if the venture would be economically viable.

The Premier talked earlier about ramps in the Voisey's Bay agreement like

those on the 401. I say, Mr. Speaker, if we allow this to happen today, it is

not ramps on the 401, it is all a ramp. Just stop, anyone involved in the crab

fishery in this Province today, stop and think. I say to the Member for

Bonavista - I know his heart and his soul are with his people down there - but I

say to him: Realistically, do you think the resource in two years time, if FPI

wanted to dishonour their commitment, is strong enough? What you are signing on

to here today, do you think their commitment is strong enough that you are

convinced that you are going to see a plant in Bonavista? I am not.

Let me tell you why. They are saying they will build it if the resource is

available. Bonavista, I think, rests right on the line of the fishing zone, 3K.

All of my district is in 3K. What is happening to the crab resource in 3K? I

tell you today, there are no supplementary or full-time fishermen fishing crab

in that zone because DFO has closed it. If you listened to the FRCC last week,

when they made their prognoses of what was going to happen with the crab stocks

in that area in the next few years, Mr. Speaker, if they are right, we are in

for one dismal set of circumstances.

I am saying to the people of Bonavista, while they might think that I am

being cruel because I am not supporting them on this venture, don't be fooled

by commitments made by FPI because FPI knows right now, as does the FRCC, what

the state of the stock is going to be two years from now, and they know that

they have a loophole that they can drive a Mack truck through. They do not have

an off-ramp, I tell you, it is all off-ramps.

Mr. Speaker, let's talk about Fortune in their secondary processing. Great

idea, and I hope it works. Again, if you listened to Derrick Rowe on the

Fisheries Broadcast a couple of short months ago, when asked what the future of

FPI was, his answer was: The future of FPI is in shellfish. I do not think he is

talking about doing secondary shellfish in Fortune. What is he going to do with

it? What is he going to do with Fortune? Again, I do not like to disappoint the

people in Fortune, and I hope what the directors of FPI are saying, they do at

the end of the day. I really and truly do. I would have no problem standing here

four or five years from now, if that is the going concern, and saying I was

wrong, but I fear that I am not going to be. That is why I have problem with

this piece of legislation that we are being asked to look at today, Mr. Speaker.

What do we do? What do we do? They have made their commitments. They are

going to build a plant in Bonavista, they are going to build one in Fortune, but

they are not doing, as far as I am concerned, anything for the people of Harbour

Breton, so we have to cast them aside and forget about them and look at the

other options. Let's look at the people of Bonavista and Fortune. They say, in

the paper: If we do not - if we do not! - honour our commitments, what is going

to happen to us? What is going to happen to us? The Premier stood on a number of

occasions in the last couple of months and he said: If they do not honour their

commitments, we are going to take their groundfish quotas. I have two problems

with that. I heard the Premier, as late as yesterday, say publicly that he

cannot force FPI to put a groundfish quota into Harbour Breton because he does

not control the quotas, the federal government does. He does not have the

jurisdiction to tell FPI to land fish in Harbour Breton. Only the federal

government can do that. He cannot force them to share their quota with Harbour

Breton and with Fortune or Marystown. I do not have the authority, he said.

Just think about how foolish this sounds and how paradoxical it is. He is

saying, I cannot force FPI to put fish into Harbour Breton but I can take their

quotas if they do not honour their commitments. Think about that. I cannot force

them to put fish into Harbour Breton but I am going to take all of their

groundfish quotas if they do not honour their commitments to Bonavista and to

Fortune. How ludicrous! All you have to do is stop and think about how ludicrous

that actually is.

When asked today, has he contacted the federal government and got an ironclad

commitment that they will, indeed, be allowed to take the quotas from FPI if

they dishonour their commitments, the answer from the Premier is: No, we do not

have that written commitment. They are considering it. They will let us know.

That is what they are asking us to vote on here today: They will let us know.

Mr. Speaker, I am not going to belabour the point but I think I have just

shown - the Premier talked about off-ramps and the Premier talked about

loopholes. There are more loopholes in this document than I have ever seen in

any piece of legislation or any proposal that was ever put forward to this

House. The Premier talks about the loopholes of the Voisey's Bay agreement and

he said if he ever became Premier, he would tear up the contract. Well, he hasn't

done that yet. He has made trips to Voisey's Bay, talked about what a

wonderful project it is, but he hasn't torn up the contract yet.

Mr. Speaker, I can honestly say I have had calls from very well-respected

people who have been involved in the fishing industry all their lives, who have

told me: Don't vote for the legislation because it is going to be the biggest

or the largest resource giveaway in the history of this Province. Once we allow

FPI to sell off the most valued assets that they have, my concern is that FPI

won't exist in a few years and the commitments that they gave to the people of

this Province, in Harbour Breton, Fortune, Marystown, Port au Choix, Catalina,

and Bonavista - once the assets are gone and the company no longer exists, how

are you going to make them honour commitments? I can see that is what is going

to happen if we allow FPI to sell off its most prized assets.

These are not the assets, I say, of the Board of Directors of FPI or Mr.

Risley or Mr. Sanford or the Icelanders, these are the assets of the people of

Newfoundland and Labrador. These are the assets that we got from the federal

government and from the provincial government of Newfoundland and Labrador back

some thirty years ago. Who did we do it for? We didn't do it for the benefit

of a bunch of unknown faces, people we never see. I don't know if they ever

even visit the Province. We did it for the people, we did it for the

communities, we did it for the people who are sitting in the gallery today. To

say, go home you are finished, or to say to someone else, the hope of a plant -

it is not enough for me to vote for it, Mr. Speaker, and I said it from day one.

I could not look at myself in the mirror having voted to give away what I

consider to be one of our prized possessions, and that is the control we have

over FPI and the fishing industry in this Province.

Mr. Speaker, if the Member for Signal Hill-Quidi Vidi wants to remove his

amendment from the floor, he can put it for a vote, but I won't oppose him

doing it.

Thank you, Mr. Speaker.

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

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

Essentially, this is an amendment put forward in second reading, commonly

known in parliamentary terms as a hoist, put forward by the Member for Signal

Hill-Quidi Vidi. I can read it. It says: Bill 41,

An Act To Amend The Fishery

Products International Limited Act be now read a second time, but that it be

read a second time this day, three months from now.

Mr. Speaker, we talked about these amendments in caucus this morning.

Certainly, on this amendment it is our view that we not delay this any further,

that we not give it a hoist, particularly in view of the fact of what the member

who moved the amendment has indicated, that he would certainly be prepared to

withdraw the amendment based upon, when he originally presented it, it was with

the view that certain things should happen. I believe he has indicated that,

from that point of view, from the time he presented it until the time which is

now, some of the things he envisaged should happen have happened.

With that, Mr. Speaker, all members on this side of the House will not be

supporting the passage of this amendment to delay this vote for three months

from now.

MR. SPEAKER: I am calling the question on the amendment, unless there is

agreement that we have the amendment withdrawn from the House.

Question? The question has been called.

The amendment is as follows, put forward by the hon. Member for Signal Hill-Quidi

Vidi: That all words after the word "That" in the motion at second

reading be deleted and substituted by the following: Bill 41,

An Act To Amend

The Fishery Products International Limited Act, be not now read a second time

but that it be read a second time this day three months hence.

All those in favour of the amendment say aye'.

Those against the amendment say nay.'

SOME HON. MEMBERS: Nay.

MR. SPEAKER: The amendment is lost.

The second amendment put forward at second reading -

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

The second reasoned amendment put forward at second reading is by the Member

for Bay of Islands. It reads as follows: That all the words after the word

"That" be deleted and the following substituted therefor:

"This House declines to give second reading to Bill 41,

An Act To Amend

The Fishery Products International Limited Act, because the company's

shellfish quotas and primary groups fleet of vessels are not included as

security in the default provisions of the terms of the proposed agreement with

FPI."

The hon. the Member for the Bay of Islands.

MR. JOYCE: Mr. Speaker, I will only spend a few minutes on the amendment

and just explain why I put the amendment forward in the House.

I will go back three or four years when we went across this Province with the

all-party committee. We had more promises, at that time, from the existing Board

of FPI of what they were going to do, what plants they were going to keep, what

new plants, what new technology, the increases of employment, and none of it

happened, Mr. Speaker.

Here we have FPI now coming back asking us to approve the changes to the Act

today with all of these commitments again. For the people in Fortune, and I know

down in Bonavista, they are very pleased, but again, they are only commitments.

There is nothing confirmed. There is nothing concrete. There is nothing there

that is going to say: yes, ironclad that we are going to do it. I was glad to

hear the Premier today also say that this is not ironclad, because we heard it

before. The Minister of Fisheries and Aquaculture was with me, he was on the

committee, he heard it before.

Mr. Speaker, just go back, one of the recommendations that the all-party

committee made at the time - and this was when we went all across the Province,

and Harbour Breton was included. Here is one of the recommendations that we made

- the people opposite. The Member for Bonavista South was on the committee. He

was a part of this recommendation. The Minister of Fisheries and Aquaculture, he

was on the committee. Unanimously endorsed in this House, by all members of this

House. Here is what we put in to strengthen the FPI Act in the

preamble. I know

the Member for Signal Hill-Quidi Vidi was adamant in this also.

The committee recommends that the Act should be amended to include a

preamble. Here is the

preamble that we put in - and why now are we going back on

this

preamble? It was agreed to some three years ago, but now here we are, cut

and dry, going to cut Harbour Breton loose. Here is the

preamble everybody

agreed to, everybody. The Member for Bonavista South can remember this, and the

Minister of Fisheries and Aquaculture was adamant that we put this in there. To

recognize the need for a company which operates on the basis of sound business

and commercial decisions without undo disruption to the historical pattern of

harvesting and processing in the Province. That is what we agreed to put in to

force FPI to do in this Province.

Now, here we are today bringing this forward in the House with no guarantees

of what we, three years ago, went ahead and said we must force FPI to do. Here

we are now going around and saying that we have to approve this for FPI, but yet

look at what they are going to do around the Province of Newfoundland and

Labrador. What ironclad guarantees do we have? We have absolutely none. The only

thing that we have, we have groundfish going to be - if the federal government

approves it, which we have no guarantee - that then is going to revert back to

the Province.

The next sentence in the agreement is that the Province has to lease it back

to FPI. So I say to any member of