VOLUME 3 PP.ELIMINARY UNEDITED TRANSCRIPT HOUSE OF ASSE}ffiLY FOR THE PERIOD: 2:00 P.M. to 6:00 P.X. MONDAY, 20TH. NOVEMBER, 1978 NO. 111

~~ovem!:>cr 20,1978 The P.ouse n:et at 2:00' P.~!. Yr. Speaker.in the Chair. ~-'R. SPEAKER: Tape ~o. 5206· Al!-1 Order, please! I am· pleased to welcome to the galleries a group of fifteen students from Lyndale Elementary School in Bay Roberts accompanied by their teacher~Hr. Hesley Stagg. I know all han. members join me in 'Jelcoming these students and their teacher to the House of Assembly. so:::; HON. n::·BERS: ;-;~. SPEAKER: IIear, hear! I am also. pleased to ~-tel come on he half of ~on. members the council from the town .of Durrell. The councillors are '!r. Clarence P.ogers, ~~rs.Earle, ~~r.

Bob Stockley, Mr. Lloyd lVhite, and the 'l'o~m Clerk of the Durrell Town Colincil, Hr. Dave Burton. I kno"' also that hon. members join me in '~elcoming the. councillors and to~m clerk. l'!l. SPEAKER: l'RS ~ciSAAC: Hear, hear~ PFESENTING PETITIONS Hon. member for St. George's. ~r. Speaker, I beg leave to present a petition on behalf of one hundred and seventy-three householders in the Codroy· \'alley area. This is from the North side of the Codroy Valley area. The prayer of the petition is: "t·:e, the concerned residents of the Codroy Valley in the electorial district of St.

George's,do hereby petition the ~overnment of Newfoundland and Labrador to repeal the 1976 amendment to the ~·'aste Disposal l-et allatJing the said act to stand as it Has stated in 1973. We feel that there was sufficient . legtslation in. the original act to safeguard our environment from the abusive disposal of waste materials and benefits to the people of the Codroy Valley would be threefold: firstly, to repeal this said amendment would permit many ~alley residents to dispose of !Jaste materials in. the manner they chose provided that they do not violate subsection (2) of

section 4 of the act and without the extraction of fees for a service they may not want; secondly, the

Tape 1-:o. 5206 Ml-2 t~ould help to subdue the anger and resentment of other residents who may wish to freely participate in · t~e existing waste collection service but who object to feeling obligated to doing so~ thirdly; this tJould also release

November 20, 1978 Tape 5207 PK - 1 Mrs .. Me Isaac: the Codroy Valley Waste Disposal Committee from the unpleasant .task of taking civil action against residents 11ho refuse to pay collection fees.ultimately resulting in the imposition of fines or possibly imprisonment of these innocent people. "We petition the Minister of Consumer Affairs and the Environment to see the wisdom of this move and speedily act upon it so as to prevent problems ·similar to those which have beset the Cod roy Va 11 ey in recent months from occurring in other non­ municipal areas throughout Newfoundland.

We ask our member to present this petition during the present session of the House of Assembly." I have had this petition, Mr. Speaker, in my possessionqor parts of it,since June, but it dribbled in in different sections; in fact,there are still three sections to arrive. In speaking to this petition,! have nothing against Waste Disposal Committees although I support this particular petition because of the way in which the Waste Disposal Committee was formed in the Codroy Valley area.

And in 1976 there was an amendment to the Act making the payment of fees compulsory whether or not garbage or waste disposal was collected. The people in this area were not advised-up until June of 1976- it was on a voluntary basis-and they were never advised of ·this legislation. They did not know the Waste Disposal Committee was informed and asked to pass it on; it was never passed on to them. And the· next thing they found out·about it_ was when they received· a summons in July of 1977, ·a year later, notifying them that they would have to pay the fees for the previous year.

And in this particular . area waste· disposal is a problem, and I think it has been confirmed by the Department of Health that it has created pollution to the water system in the area

Tape S2:)f1 and resider.ts on t~1e north si~e of t~e Codroy Valley are very upset and this is Hhy t~ey are looking to have this part of the act repealed.

I am not asking that it be repealed, I thin!: it is a good thing,but in the l!!eantine r;ry stand is that the·Department of £nvironment shoulrl: !Jecome more involved in setting up ·those vraste disposa! comJllittees and have puhlic meetings <:i"ere people are· elect eel to the co=i ttees :!1e people <Jere not elected,t!tey ,.,ere appointed ancl. this ;;e_s :::ore or less - the ;:>eople feel crammed do1m their throats and for that reason they are very, very un!1appy out in that area.

The area is polluted,there is garhage all over the place,and it -is certaic:ly not Hhat you ,.Joule! expect from a disposal committee,an open •vaste disposal pit. Along with the fact that the ~vater is polluterl ,I have contacted the Def.!artme:·,t of 1\nviror..ment, T'epartment of realtl--., arJ.d ~he '!)epa::-tr,:ent of !lnnicipal Affairs a couple of tJeeks ago. and asked that the t!'!ree departments get t:oeether >~ith the hope that naybe the)' could resolve the problem tl11.1.t exists there ~-!it!~ polluted lvater.

So I still do not t~nOI·T if there t-;1.11 he a meeting or lvhen it ~rill be,but I tvould like to ask t!~at this petition l)e placed upon the tahle of the House and referred to the department or departments to ,,,hich it relates. Thank you. SO~IT: r!ON. t-1EiT·E'8.S: ·Hear, ·.1ea r! ' JIJIS'iiERS TC' QUESTIO!l3 FOR \ffiiC!i \!OTICf. 1Wl BFT-:li (;I'lEH '-S.. SPEAKER: The !lon. ~~inister of Erlucation. :-:IL lv. HOUSE: A question that :-;as asked by the bon. mem~er for Baie iierte - l'hite (nr.

Rideout) on the '·!ork:nen' 5 Compensation ·review. !h'is -revie1~ •·as completed ty ~he conmittee and presented to government some time ago for _the required ·action. Such aas been de:tl t ~-ith and all the C..ecisions have he en _rr.ade on it. r:ost of the legisladve requirements are incluc.ed in the prMe'lt ':>:!.11 '!F. 'lhich is noH on th~ Order Paper in that there are 17 arr.ennments t!1ere ·:!.ealit'~g wit~ financial r.:atters as "'lell c.s sorr-?. coverage ch::!.'lges.

:·i:·: - l t<:at ara :~m; ii1 process. ORAL QL'ESTIOcTS: :·8.. SPEA.'<ER: T:1.e hon. Leader of the Opposi tio:1.. :<?.. '.J. J.OHE: I -.ronder, ~·r. Speaker, if t'::e House L.eade.r could ~ell us t,.,het:'1ar the Pre.r.ier is goii"tg to srace ~i:e I'::e ~en. ~·i~ist::::r of J'ustice. ~lr. Speal.:.er, the. Premier is attendir .. g a funeral and I uould sedou;:;ly doubt he ~·cill be here within t::e ~fP~. iiEARY: He is attending ''hat? :lR. W, ROI·IE : A funeral. ~-!r. Spea!-:eJ;, then ir:. ~lis atsence I uould lil~e t.:> direct a question to t:<e :1on. ti1e Deputy fret:ier.

Ti1e '.:ord is going around, Sir, that Abitibi Price h2.ve been tl1e ones who have i;een c.'1osen by the government to take over the Linerboard nill. I Jo not ~ow if Lhat is true or untrue.. t~ould tile hen. the Deputy Premier indicate to the House whether in fact a decision ilas beea made and if so if Abitibi Price are the ones who have been chosen by the goverru:tent to take o.ver t:1e Linerboard mill1 ~ rR. SPEl.l<Ef: : 1"ne hen, ;:inister of Justice. ::R. HICl:CW<: e:r.

Speaker, there has not beea a government decision to date, to this minute, as to who has l:een the successful bidder and/or proposer to buy the Linerbaard mill at Stephenville. MR. \~. ROWE: A supplementary, Sir. :-!?... SPEA.'<ER: A supplementary, ::he hen. Leader of the Opposition. c'!R, H. ROHE: Hould the hen. !·:inis ter of Finance indicate to the House "·hen a decision oii the .takeover of the Lir.erboard mill is .?.nticipated b"y the government? Are •.;e talking about days? Are we

:·iovz::1ber 20, 197S Tape :·lo. 520? t:al:~ing aLout t.reei~s? ! .. re we close to a decision i:aving been ::~ade on that? ~:R. SPEAKER: The hon. ::!inis ter of Justice. ~'!\. HICIC·lAN: \.Je are reasonably close, Hr. Speaker, to a decision being made. The lion. gentleman 1··ill appreciate tl1at before taat decision is made,and before that decision is announced, certain regulatory bodies, such :lS security commissicnii ,:1r.ve to he ~.:!.tile. Dut t:~~re are cc~tain very rieid requirer.1ents t~~.~t i71aj or corporati.ons must meet. Ilut I repeat

november 20, 1978 Tape 5210 EC - 1 ~IR. HICKIIAN: it will not be very long, it will .not be a month. MR. W. N. ROWE: Mr. Speaker, a supplementary question. ~PEAKER: A supplementary, the bon. the Leader of the Opposition. HR. lv. N. ROI·TE: In the general area of the takeover of defunct plants, would the bon.

Deputy Premier indicate to the House whether the government have made a position known to Peat Marwick and Mitchell or to the first mortgagees, Kleinwort Benson and those others like Kleinwort Benson, ECGD in the U.K., whether the government have made a position known to them regarding the announcement made by Peat Mar~ick last week that they at least up to now have favoured the proposal made by First Arabian or have the government merely stayed back and away fro~ the situation altogethe·r? HR. SPEAKER: The bon. the minister. HR. IIICKHA!l: Mr.

Speaker, to my knowledge, certainly not as a matter of government policy, the government have not indicated to Kates, Peat, Marwick and Company, the trustee - the receiver rather, not the trustee - the receiver with respect to the Come By Chance bankruptcy what our position is. I note by this morning's press that the receiver indicates they have several months of hard bargaining with the First Arabian Bank before they reach a final conclusion.

In the meantime,as to the details~ if there are further details with respect to government policy on that.matter, I think that the House; if there is any additional information to obtain, could obtain that more properly from my colleague, the bon. the Minister of Industrial Development,who is very close on a day-to-day basis with matters of that kind. MR. W. l'l. ROHE: arises out of the answer. :•IP,. SPEAKER: A final supplementary, Sir, which A supplementary.

~ovember 20, 1978 Tape 5210 EC - 2 MR. HICKMAN: To m~ or to the Minister of Industrial Development? MR. W. N. ROWE: I will direct the question to the hon. the Minister of Industrial Development, the qu•stion being the one that I a~ked the hon. the Deputy Premier,but added to it the following: Does the governnent intend to take a position on one or other of these proposals and make its position known to Peat Mar~ick or to ECGD or to any other party involved in the

November 20, 1978 Tape 5211 PK - 1 Mr. W. N. Rowe: Come By Chance bankruptcy or wi 11 they wait · the outcome of the proposal which has now been accepted by Peat, Marwick before they make a decision one way or the other? i~hat is the government's position,in other words, Sir? MR. SPEAKER: MR. DOODY: The hon. Minister of Industrial Development. Mr. Speaker, the Premier made, I thought, the position of government abundantly clear on Friday in this particular area.

The government's position on this is the position that we must look after the people of the Province first and. our involvement and the Province's involvement first whichever - r.1R. NEARY: What are they gPi ng to do about it? MR. DOODY: Kotter is back, Sir. Excuse me. Do you want to add something? MR.NEARY: MR. SPEAKER: MR. DOODY: I wi'll later on. Order, please! Excuse me, Sir. The point is that we are looking at the situation very carefully. The receiver is keeping us informed .as thing go along: They have expressed · thei\•·.preference for a particular proposa 1 which was offered to them.

On the surface there appears to be nothing detrimental to the Province's interest in that particular proposal. We look at it from a day to day position. If things change, if it appears as though the Province is being short-changed somewhere along the line,we will have no more hesitation about voicing our concerns in this area than we did when the Ultramar proposal came in a few months ago. The first decision, the first choice, the first interest · that has to be expressed is that of the receiver working on behalf of the first mortgage holder ..

Obviously the Province's position is a great deal stronger and heavier and more involved than that of a second mortgage ho 1 der. The refinery, the asset is obvious 1 y here in the Province. and we· have our people to consider as well as cur investment. So to that end, as· I say, we are monitoring the situation. If it appears that it is getting out of hand, that the Province

November 20, 1978 Tape 5211 PK :.. 2 Mr. Doody: and its people are not getting .the best deal,then. we will certainly express our opinion at that particular time. To date we have no reason to interfere with what appears to be a reasonable . procedure. MR. NEARY: A supplementary, Mr. Speaker. MR. SPEAKER: A supplementary, the hon. member for LaPoile. MR. NEARY: Could the hon. gentleman indicate. to the House what . happens in connection ~~ith the v1harf that v1as built by the Government of Canada,paid for by the taxpayers of Canada to the tune of tv1enty-odd million dollars at Come By Chance?

Has First Arabian or any other person who is making proposals, have they cleared the way to use that dock in Come By Chance to the minister's knowledge? What will happen in the·

clove::~ber 2(), 1973 Tape No. 5212 case of che t.fharf? Can the Goven1nent of Cano~a, if t!l.ey 1;a,1t to, slwot down the de!'.l by sa;ting, "Hell,you cannot use that w:1arf," or ''You can ·use that >1harf. n Who has the autitority over it? AJ-,c.! 1,•i1at about the wharf? W"not future, w:1at role would it play in any deal that is made aa far as Come By Chance is concerned?

T:1e hon. ~~i~ister of Industrial Government of Canad.:t r.rith respect to th:1t Phnrf 1;es expressed by a Liberal Minister of Public llorks some ;•ears a:;>:o, Hhich I probably should not get i.."tto because t!:at is history .:011 and it really is not conpletely relevant.

The Government of Caneda obviously has a very real concern, and a very :o:eal interest in the .d~.spos1.t:!.o;: of the asset ~·1 hic1t they control. ':J!tat arrangement they m:?.k.e \-.1ith >rhc~aver t:1e ::;uccassful ~idder for the refiner)' asset is is something ob\•iously that tve hove no control over. 1·?e tdll certainly be involved, I 1-rould hope, in eny decisions that the ~-overninent of Canada rnal::es in that regard.

The asset is in the !'rovince of Newfoundland and is en integral part of the community of l'e~;rfoundland a!!d I '·!Ould hope thnt the Governnent of Canada ~vill consult us !'l:J.d talk to us about :·ihate\rer decisions t:1ey ll'.o.!:e Pith regard to the t·!h2:rf.

The ~·!harf, as I understand it, 1,ras built on a user pay concept and I Hould think that that same arrangement I·IOuld be tr:msferred to t·!homever the successful bidder on the refinery asset is. :Sut that is something that ,,ril! have to be ••or ked out bett;een the Government of Canada and the receiver acting on behc:lf of whomeve: they think is most suited to take over that asset. HR. i~EARY: A supplementary, ::r. Spca:~er. ~·tl. SPEAKER; A supplementary, the hon. member for LaPoile. ,.!? •• NEARY; Hr.

Speaker, t~1e :1on. gentlei:tan in l1is 2..."1SHe:~s seens to be ta.k~:1.g .:1 very His~y-t;.;ashy poSitior. for so~e reason

~DV~D~er 20, 1978 Tape :·io. 5212 Xi1 - 2 : ~. :·:EARY: or otn2r a."1d 1 1vould like to try to pin the mi::lister down if I can.,\s far as this Government of this Province that is supreme in );eyfoundland is concerned, can t!1e minister tell us for sure, to assure this House definitely, that before any move is made for the tru,eover of Corne By Chance by a.•ybody, that this government vTill be the one that ~Vill say y.os or no 1 t~:;J.t this govern.'llent ;las t!1e authority because a;:c1 his colleagues trali.sferrerl the sh~res of ·r.~~ovi: .. clc.l ~~ef::.nery bad~ in '75 to Newfoundland r..efining? k'l liON. l-:LEMBER: vfl1y t:!J ti1ey do thatl :.!R. ~EARY: That is what I .would like to !~olv, ~v:1y they did it.

But I t:·ill come to that later. T:1e terns and conditions of i>urchasing that refinery, of Ne1vfoundland Refining purchasing that refinery uere not met and so therefore we still mm the pro?erty and why could not the government direct ::ho gets that oil refinery? J\.nd if it is !-!r. Shai-.een Hho has the best deal, ''llY does the gove=en:: not say yes or uof !hat is all "'e l>ant to know. tlever mind wishy-•vash:r answers. !·iR. SPEAI<LR: Order, please! . C•rder, please!

I must point out hon. memoers really· !!lust l~cep their remarks to asking questions rather than dcbati::J~ cl-.e, issue on lvhich information is sought. The hon. 1~inister of Industrial Development. !·!R. DOODY: I must first of all, Sir, co-:>.gratulate the metlber for LaPoile (:-1r. Neary) on his maiden speech of this session of the House. We are delighted to have him back and I think that somewhere in the heart of that diatribe there lvas a question a."1d I am trying to locate it .now. ·I think it Has something to do with 'vhetller or not the Province of - '!P .• ~EARY: :·!R.

DOODY: Hhen is the goverr~cnt supreme? - v7as· '<7hether or not the t:'.overr.ment of ~le1vfou..1dland, representiq~ the people of the Province, :1ad .:.u~:1ori ty ove::: tc"l(! land out at Come "By Ch:mc~.

~~ov~bcr 20, 1978 :-!R • ::<:I..RY : :m. JOODY: Tape No. 5212 Oh, no. :;,at is :-art of ::. t. ~Jell I better si!: dotm and asi' :-r.-: - 3 him to rephrase tile question, Sir. I misunderstood it in the diatribe. !!:\. S:?E..-\KER: The hon. member for LaPoile. '!.".' .• :mARY: ;.rr. Speaker, just to clarify the question. ~-~.1uld t~e nir1ister tell us· if t:1e government in this case, i£ t!-Je 0il ~cfir.~r'/ :ts conc:;rned? Is :::~.is government su~re~e? T'il.:it is :~. SPEAk"E?.: '-!?.. rOODY: The hon. :anister of Industrial Development. Hr.

Speaker, if I sul:-sc:-ibed to that theory I t•ould be a member of that party. The government is not supreme, Sir, the people are. sm~ liON. )-!E:'JlERS: :::i.. DOODY: Hear, hear! It is the sort of theory, <::J.c! :::1e sort of philosop:'lical approach that the ultimate leader of this p<!rty, t;le hon. gentleman in CttatJa~ takes from time to time, 'Since t:!1e press are against us, and since the Op!)os:!.tion arc agai!lst us, therefore· society r.~ust he against us. But t-;e must press ou. am;ay because Liberal t!1oug!.1t is good thought and good thought thctl :~.:1s to be t~e people's thoug~1t.' ::r-.. \'.

P..OHE: '·'E~.. DOODY: I do u.ot thin!~, Si;:,' t~at the.t is completely rele•12.nt to t!'lis particular s~.tuation. Our responsibility is - ~'iR. STI-!:'!ONS: . A~1 !!OH. ::E:ffiER: You are ::!<.king a fool of your.o;clf High i•eels is up. ~:P.. SPJ?..\KER: Order, please! I '"'ill r~cognize the 1-.on. gentlet:Jan f::om !lurgeo-B~y d 'Esp~ir (Ur. ~immons) follo\;e.d l.;y th~ ~1on. gentleman for Trinity-3;.-~y c;e ~VerC:e e!r. f .. ?..o,~c). Order, please!

November 20,1~7P. Tape No. 5213 AH-1 Actually I have already indicated that I ~Nould recognize next another hen. member. l'nless he yields, then obviously I ~~ill have .to stick with that decision. 1-<hat I·1~as going to say ~~as that I will point out to hon. members on both sides that the Question Period has quite specific: rules and they are outlined in our Standing Order 31, especially (

c) and the essence of Hhat it boils dow'Tl to is that questions should really ask for information ,.rithout dehate and the.t ministers 1 if giving answers,should give the i.nformation , if they· intend to ansHer it ,1-:ithout debate, It should not 1,e a period during l,•hich members debate different p0ints of vie,.· on the subject. I have indicated I think that I Hill recognize the hon. member for Burgeo - Bay d'Es.poir so I recoenize him. 'm,. Sil'}!ONS: ~lr.

Speaker, I 1~ould still very r.:uch like to hear the answer from the ~~inister of Industrial Development. :Te ·.dll give him time to thin!~ about it but in thP. meantime I ';auld li!:.e to raise a question to the Yinister of Nines and Energy. I •:onder 1muld he tell us whether or not he has heen T:lisquoted in the press over the weekend? Is it in fact true that the utinister in Quebec City committed this Province to being in support of an increC'.se in the price of a barrel of oil as of the first of January? !'F.. SPJ!Al':ER: Hon. :~inister of !lines and Energy. l-'r.

Spea!<-.er, this Province has taken the position that the federal government has broken an agreement with the province of Alberta as related to ongoing prices in the price of hydrocarbons at the wellhead in Alberta and Saskatchawen and that the Methorlology used by the federal g~vernment~•·h'ith was unilateral and which broke an agreement 1dth the province, is contrary to good federal-provincial co-operation It was on that basis that ~e wanted to rediscuss the whole question with the federal government.

MF.. S Il~'O~S; Tape l\o. 5213 A supplementary. A supplementary. JIJl-2 ~!r. Speaker, I assume, I guess I can assume from the answer that the. answer is yes, they have agreed to an i.ncrease in the price of oil as of January. That is ·1vhat I got from the ne1•s and the minister has not contradicted that. Hr.. FlUTE: Three cents a gallon in Newfoundland. ~-~-· S Ili-fONS : Hr. Speaker, perhaps· a supplementary should C.e> c':trectec! to the 1·:inister of Finance. ::'t if' ;;upplel"er,tary to the 0ne t have just asked.

I am tempted to say first that perhaps 1•e should be fighting our Ql,•:-. battles at these conferences instead of Alberta's battles. Sm!E HON. l!E}!BERS : 1·'R. Sil~!ONS: Hear, hear! Mr. Speaker, I recall the $50 million loan of sometime ago from Alberta. In light of the Province's stand at Quebec City over the ""eekeud,could the !{inister of Finance indicate to us ~;hether this now is the other half of the deal?

That the Province obtained the loan from Alberta having made certain commitments to support the Alberta position on oil prices even if that position flies in the face of our best interests as a Province 11vhich is clearly the case right no1v, Nr. Speaker? t'R. SPEAKER: ~~-· HICKr-~AN: Ron. Minister of Finance. :!r. Speaker, in the second half of the. question.

I may have to defer that to my han. colleague the Hinister of !Aines and Energy, but I 1vant to assure this House that the money that ~•as borrowed on very good terms ,but at the going market rate at the time,from the Alberta Heritage Fund had but one condition attached 9 which the government of this Province will.meet without any difficulty~ and that is the repayment of the. loan, principal and interest .,and no other·.

He have a responsibility as the government of this Province to look tvith apprehension upon every move by the national government to take a•1ay more and more prov:l.nc.ial control over our natur:1l resources. And we must learn- and I thank the han. gentleman for St. John's \·:est (Dr.Kitchen) for nodding his head in agreement as to tvhat I am saying .•

t:ovember 20,1978 Tape :;o. 5213 All-3 ~~~·~~: we must learn from the experience of 1;hat has happened so tragically to Alberta and to the province of Saskatcha1,;en where slmdy but surely, . but 1dth malice. of aforethought, their resources are being taken a1~ay, the control of their resources are being taken away from.them either by way of federal taxation or either by way of the regulatory powers. And if He have the kind or resources that I believe we have and hope we have,then the people of this Province and generations yet unborn would never foregive us if ;,•e abdicated our right

Tape\ 5211, Jl·i - 1 and saic:; r:~ ''·~ree ~•ith t!le attitude you are ta!:in3,nr. r-overnment of Canar1<' ,torJ<>.r•~S the I·:·~:> tern provinces~ because unf!uestionably if 11e strike these resources our turn 1dll be next. That, as I understand it,is the position that was put by the Province. of ~:ewfoundlanrl consistent:ly., consistently f.or the last five years. I am optimist'ic enough to believe that as a result of the - ( T.na wiib lc) '? ... ? .. ::IC!:!':,~:: I·: en, I rlicl. not aslr. t'•e ~rcivocl'.tive q,uestion, ''r.

Speaker. :!:t is my obligation to try tc ~).ve t11.e shortest possible ansHer I can.I c!o believe that .:~s a result of the position of this Province as put cut the recent First Hinister 1 s Conference ~y the Pr2tnier that 1ve are· go:l.ng to see some meaningful negotiations with this Province in a leat!ers~cip roJ.e ·,,lith respect to some constitutional entrenchment of resource rights in the provinces. If l'e do not have that then, ~'r. Speaker, t·re lvill llr.<J.uestionaf>ly face the same problems as the Hestern provinces are facing today. ;~. SI!~~ons: ::R. SPEAJ~R: 7.spoir. A. supr.'lcmentary.

A supplementary. lion. member for Burgee - Ray d' I say to my colleague·. for r.onception ::>ay South (!-'r. 'lolan) you did not Norry about them getting on the bench. If he rloes nobody will ever, get to jail because he will never finish a sentence. Nr. Speaker, that is a red 11er:ring, an absolute red herring. The ','question I [Jut to the 1\inister of Finance,anrl perhaps he can an1ver it this time: 1·7as there any deal tvith Alberta to sub;•art, to undermine our best interest as a Province in order to support Alberta on this red herring resource issue1 The real question, "r.

Spea!~er, 1-1hy is it? · !;;<y is it, :rr. Speaker, that a government representing the people of this Province,if you believe

'love!!!"er 20, 1978 Tnpe 5?.14 :..~.. s r.!! '.o~;s : the c'inister of Industrial >evelopt;~ent,~las gone to Quebec City and committed our people ::o pay an additional three·cents a gallon as of the first of January. Is it because there Has a neal - : 'R. rmi'!'E: vJhy? YR. SIY?~m:s: - are He going to pay nn extra three cents a gallon !ceca use there •,;as a de I'll ~-71th AlhP.rta :.ave a fe·.1 ::~ore questions for 1,in. l!R. HIC<~·:.'L:: emphatic ':<o'. '·LR. s I::c.r.o~;s : 1:!on. ministe!". Tb.e ansuer, ~1r. Speal:er, i3 an A suppleraentary. A supplementary. ··.r.

Speaker, will t!le nini.ster confirm that it is 10oing to cost t 1.1e consumer an additional three cents as of tc:e fi;:st of January or is there some - ~·'P.. F. 1·7HITE: ; !F:. S I!-u·'ONS :. Because of the Quebec agreement. Exactly,because of ~·!hat ~-·as underta 1·:en by the Province in Quelcec this week? Is it going to cost t:·1e consumer an extra three cents a sal len ns of t".e first of Janua:::'? '·':'.. SPEA!ZE!'.: non. minister. '.lr. Speaker, I canna t ansHer that question because no arrangement has been P:ade.

The position that this Province has taken in the past has been two fold: one, that ad2itional federal taxes coming out of the production of oil in luberta ancl illposed upon that ?reduction should he used tc t;·ebsidize petrole~~ products and/or the price of crude oil that is imported to trY anc'. keep t!'te price in Canada uniform E. 17ithout that, if there is no agreement,then' I can tell you; ''r. Speaker, that the price of oil in this Province ;?ill absolutely skyrocket. \·n1at a red herring!

:-:ovember 2~, 1~7~ Tape 5~ 11~ rvr - 3 · .o\nd t!1is is our concern, t'1at when thera ' is an agreement mace-and I HaS present at that agreement. It was made in the Prime i'inis ter' s residence about three years ago-that this policy on the part of the r~ver~ment of Canada ~~oulct be follov1ed. ~-lhen we see that that !-:as nm·' been varier!, a::.l •re can try and do is maintain still some eq uill.l..riUJ:l ~;i th respect to t!1e price of oil in Sanada, because if \·ie ever r.:et totally out on our O\·m,all i.1y ours~lv~s")t:te price c f petroleur-: product in this Provb.ce 1-rill be a:,solutely horrendous.. :m.

F. ~miT~: On the backs of ~(eHfoundle.nders. . ~::R. HIC!C•!AN: And . that is exactly 1·1hy,because ,.re cannot afford to allm~ the Government of Canada to ride on ·the backs of !!ewfoundlanders by breaking ar,reements with the r~vernment of Alberta. A supplementa;ry. Fi~al sup~lementa~;. Ron. ~ember then the hon. member for Trinity - 3ay de ITerde follo1~ec! by SL John's Hest. Hr. Speaker, ~Yh:•~· does r-.ot t~e ':inister of !"inance stop misleading the :\ouse on this one and zive us some ansHers .. Otte.Ha Han ted to keep the price of oil -:l.o1-:n, nne' I asked the ·minister - A point of or~er. FR.

SPEAKER: Hon. minister. H!'.. HICK}!AN: On a point of order.i:f the ".on. g:mtleman 1~ants to get into a political !1arangue on the instructionc• of Prime i·~nister Trud·~au there is a time and forum to do it. :r.ut I do su'•mit t:hat suggesting that I have heen misleading the !louse is a flagrant breach of the rules and I ask Your Honour for the protection of the rules. !·'R. SPJ:AJ:::LR: Hon. member.

'!I! - 4 On the point of order, ;.cr. Speal·.er, I i1ave not saicl l~e !:a:; ~-een deliberately !!lisleading the I'.ouse because that woulcl a':ttibute a certain skill to ~1im. All I said that he· is misleading; the llouse,he is not telling the House the entire truth about this issue. '~. SPEAKER: Order,please! Our precedents 'lre certainly quite clear that any allegation of r~eceit is u-:1.parlianent.:iry

~ovember 20, 1978 Tape 5215 · EC - 1 ~R. SPEAKER: --------· who alleges that a member is deceiving the House or is wilfully or knowingly misleading. ge do have precedents whereby an hon. member accused another of misleading the House. There is not necessarily any connotation of deception. The House could be misled for a number of reasons: perhaps the House misunderstands what somebody says,or if an hon. member puts forward what he purports to be facts which maj or may not be facts or may be understood differently.

So as long as there is no connotation of deception then the House has generally regarded the term 'misleading' as neutral. SOME HON. MEMBERS: Hear, hear! !·IR. S IHHONS: Thank you, Mr. Speaker. My supplementary for the minister: Ottawa wants~and wanted over the weekend at Quebec City,to keep the price of a barrel of oil down, to keep the price of a gallon of oil down. AN HON. MEMBER: Both. HR.

S·IMMONS: I understand that our government, or a spokesman for the government of this Province,committed this Province to a higher price and that the net effect of that is that the consumer will pay three cents additional per gallon as of the first of January. Now, Mr. Speaker, my,question, I really fail to see how that can accrue to the benefit of any consumer in this particular Province - AN HON. l1EMBER: Hear, hear! MR. SIMMONS: -and the question really is: What is the government doing in bed with Alberta? Why does it not get in bed with our own people? And specifically, what will it cost the consumer?

Will the minister confirm that it will cost the consumers of·this Province an extra three cents per gallon as of January as a result of the irresponsible action taken by his cblleague in Quebec ~ity

~ovember 20, 1978 MR. SI~MOCS: SOME HOJ. MEMBERS: MR. SPEAKER: Tape 5215 this weekend? Hear, hear! The hen. minister. EC - 2 MR. DICKMAN: I am going to defer to my colleague, the Minister of Mines and Energy to answer the second part of that question, but· may I repeat again, Mr. Speaker, what has transpired to date. Number one, the tax that has been collected from the Province of Alberta on its ail by the Government of Canada pursuant to an. agreement entered into between the Government of Canada and the ten provinces was used to subsidize imported crude into Eastern Canada at the Venezuelan price. AN RON.

MEMBER: The world price. MR. HICKMAN: The world price. And this was, we thought, a very salutary thing to the Province of Newfoundland, because even though the price of oil was going up, it was not going up with the same rap~dity that it would have gone up if that agreement had not been entered into. Now the Government of Canada has indicated that it has unilaterally broken that agreement.

But what we are concerned about is that it has not indicated to the Province the methodology it will follow and what kind of an agreement it will replace it with; and unless and until that is done the Government of Newfoundland together with the governments of all the other provinces is not in a position to say yes or no.

But we do have a right to say to the Government of Canada,'We find it most unacceptable that you will break an agreement unilaterally that was entered into in good faith following intensive negotiations with the ten provinces,' an agreement which has been, in my opinion, beneficial to Newfoundland. No agreement ~as been accepted. I repeat, no agreement has been accepted yet, and unless and until that is done then it would be impo~sible for anyone to say what the increase in the price of oil in Atlantic Canada

November 20, 1978 ~IR. HICKHA~l: this year. i·!R • :mITE : HR. RICKMAN:· Tape 5215 P.C - 3 and in Newfoundland will be Three cents a gallon. It may very well be, I do not know, but just think what it would be if there were no agreement amongst provinces at all and there would be no subsidizRtion HR. F. ROHE :. Mr. Speaker. :·IR. SPEAKER: I will recoftnize the hon. gentleman from Trinity - Bay de Verde. HR. F. RO\~E: Mr. Speaker, I ask this question for the tenth time during this session and I am hoping to get an answer to it before the end of the session.

And .I ask the Government House Leader in the absence of the Premier. The Premier promised to table the contract for the Chairman of the Action Committee on six or seven occasions and it has not been done, Sir. I was wondering if the Government House Leader could undertake to make a commitment to this House that the contract of the Chairman of th~ Action.Committee, the length of that contract, the job description, the pension rights, any life insurance rights and all ~f the things that are involved in that particular contract will be tabled before this House before the House prorogues? NR.

SPEAKER: The hon. minister. HR. HICKMAN: The only undertaking I can give is that I will bring the hon. gentlem~n's question and request to the attention of the hon. the Premier as soon as he takes his s~at later on this aft~rnoon~ MR. F. ROI~E: ~!R. SPEAKER: MR. F. ROWE: A supplementary, Mr. Speaker. A supplementary. Could the Government Hou~e Leader indicate - he is a member of the Cabinet -

November 20, 1978 Tape 5216 Mr. F. Rowe: who is producing the various radio and T.V. ad? How much it is costing the Province for this particular Action Group? And are these films and tapes to be canned and saved for political purposes such as those films that were taken for the Fisheries Conference? MR. SPEAKER: The hon. Minister of Finance. PK - 1 MR. HICKMAN: I,not being in that business myself, despite· what hon. gentlemen said about my Budget Speech which was so well put together - AN HON. MEMBER: (Inaudible). MR. SPEAKER: Order, please! MR. HICKMAN: - I cannot answer that question.

But like all other Newfoundlanders find the programmes most impressive and factual - MR. NEARY: The Minister of Tourism cannot get his film. MR. HICKMAN: - and accurate. But I cannot answer . The other part; Who made them? Who they made them for? Whether they are going to be canned in the hope thatwe get an Oscar? MR. F. ROWE: MR. SPEAKER: do not know. I suspect we will. Mr. Speaker, a supplementary? A supplementary,the original questioner. think then I will recognize the hon. member for St. John's West. MR. F. ROWE: Mr.

Speaker, I find it passing strange that the Government House Leader, the Deputy Premier,does not know what is going on in his own Cabinet.Minister of Finance- MR. NOLAN: MR. F. ROWE: AN HON. MEMBER: MR. HICKMAN: makes two.of us. MR. F. ROWE: He does not ~ant to find out. The minister· of practically everythinq. Tha 1:' is \\'hy' he is there. I do not know why I am there either, so that Could the minister indicate, Sir, why another little subtlety is going on with respect to the advertisement with resoect· to the Action Group. The people are asked to call 737-3800, Your Government of Newfoundland.

Why is it not called the Action Committee? It might sound like a minor detail but it smacks of a paid political

November 20, 1978 Tape 5216 PK - 2 Mr. F. Rowe: advertisment to me. AN _HON_ .. MEMBER: The Moores Administration. AN HON. MEMBER: (Inaudible). MR. F. ROWE: Equally embarrassing. MR. SPEAKER: The hen. Minister of Finance. MR. NEARY: Send for George Mclean. MR. HICKMAN: have never been embarrassed, Mr. Speaker, and I am sure that nobody in Newfoundland_has been embarrassed over an advertisment that starts off by saying, "This is your Action Committee working for your Government of Newfoundland." MR. NEARY: MR. HICKMAN: SOME HON. MEMBERS: MR. NEARY: ~1R. HICKMAN: MR. F. ROWE:· now. AN HON. MEMBER: MR.

HICKMAN: 1-IR.NEARY: MR. HICKMAN: That is not what they say. Well,how do they say it? No. No. They say Government of Newfoundland. Government of Newfoundland. The Action Committee has disappeared altoqether. (Inaudible). Oh. well, I see what you mean. Oh I see­ We have two Premiers now. - the Government of Newfoundiand. Ah, ha! I have got to start listening. MR. F. ROWE: Not the legalist jargon. MR. HICKMAN: I have got to start listening to the radio or the television or the media. The Government of Newfoundland, Your Government of Newfoundland,is solicitinq enquiries from Newfoundlanders.

I have not heard the advertisment, and I have not consulted Cabinet. AN HON. MEMBER: MR. HICKMAN: advertisment - MR. F. ROWE: MR. HICKMAN: You said you heard it. I have not heard that advertisment, that particular You said you were very impressed. I have not heard that one, but if that one is on I can say without consulting .Cabinet that that is the kind of participatory democracy that we want.

November 20, 1978 Tape 5216 PK - 3 SOME HON. MEMBERS: Hear, hear! MR . SPEAKER: The hon. gentleman for St. John's West. DR. KITCHEN: Mr. Speaker,, my question is directed at the Minister of Housing, the new Minister of Housing. SOME HON. MEMBERS: Hear, hear! DR. KITCHEN: And in view of the desperate conditions of public housing in this city where we have-a profusion of authorities, The St. John's Housing Authority, The St.

John's Housing Corporation, The Department of Social Services, The Heritage Foundation, the City Council, which administers various housing progranmes, in addition to . these and other profuse authorities, each with its own policies about renting, rental,confused, profused, I wonder if the minister is contemplating any rationalization of the structures, any change in the structures by \'thich the housing programme, if you can call it such, of the Province is administered?

Any change in the structures, any change in the confusion of rates that the various authorities use \·:hereby some people, for example, in the St. John's Housing Corporation, in Pleasantville 1who are fairly well off get better subsidies than the people in the public housing authority, -is there any attempt on his part now, now that he has been in the Portfolio now for a little while, to eliminate some of this profusion and ·confusion and unfa:irness?

And is he going to set up some sort of a committee or a royal commission or a conference or something .to do something about this very serious situation confronting the people of the city of St. John's. MR. SPitAKER: The hon. Minister of Housing. · MR. HICKEY: Mr. Speaker, the onlY. thing that can say in response to one part of the .number of questions that was asked by my COlleague across the way> and that iS that it ~ S government Is' intentiOn hopefully to remove all 'the confusion and if there is any duplication.

That is one of ·a number of reasons for the establishment of a full-fledged, vigorous Department of Housing. We are pursuing that goal right now, and I hope that in the not too distant future when we are able to clearly· articulate the structural set up cif that department that a lot of the other questions will be ans~tered ._

November 20, 1978 Tape 5216 Pk - 4 ORDERS OF THE DAY MR. W. N. ROWE: Mr. Speaker, on OrdP.rs of the Day if the hon. House Leader will forebear, I think ~t is important, Sir, that the House go on record in view of recent tragic happenings down in South America involving this congressman, Leo Ryan,. well known to my hon.

7ape ::o. s~: 7 :!C: - 1 friend from Grand falls, ~JO"!o ;:as :~illed by a group down there along 1nt:1 sane nei·Isn:en, c:1at ~·:e ;J;O on ~he record as t.:!lting aotice of t:1is tragic accide::~t, or this tragic action having taken place, and that t:1e Souse send a tribute to the f~~ily of this congressman, a man t>ith·~nom every man in this Rouse, every t-roman in this lie use, every ;:>arson in t~1~s Ho~se, had taken strong e>:ce? tior:. to ui th r~gt.r-= · ~o t:lc ~·7as co:7irl\!tely">tiie2le!:ricnlly opposed to our positicr_.

But, Sir, I think ;:e all si1ould c·C ~i;:; hearted enough, and broad nincled enough, and obviously we ere rational human being3 enough to send to the family of Congressoan Ryan a letter or· telegran of condolences from this :~use, e};pressing our admiration for the ot!ler activities t~1.:!t that gentleman had been involved in Hhich of course inclcded prison abuse reforms, the Hatts riots and other th:!.r..gs that :H~ had been involved in. He thought he ~1as misguided 1-1hen it ca.':le to the seal hunt and the ;>osition he tool~ there.

An<.l I personally, and a number of my colleagues, and the member for Grand Falls (!1r. I.undrigan), forcefully brought it to the. attention of him and through him his colleagues in tl1e tid .. ted States Congress. ~;e were against that aspect of :1is activities. He did hm;ever take

part in other activities ••hici:; 1·1e could all beco~e associated with. I for one would li::.e to rise here in the House and go on record as sending tribute to the ::~an's political life and condolences for his tragic death. !~.. SPEAKER: The l1on. l·!inister of Justice. ~8.. HICI<l!Ai~: :lr. Spea:(er, on behalf of zoverruncnt 11e certainly will join with the l1on. the Leader of the Opposition in sending through t:le proper channels, 1·rhich I think is t!1rough the A'"erican US Ambassador in Otta~o~a for conveyance to the family of

Xovc:;ber "" ....... , :~. HICK'~A .. 'l: 1978 in their bereaveme~t. Tape No. 52li Co~gressman ?.yan, our s~pathy I think tve should in doing that take note of the state of uncertainty that ::;.~ems t.o be existing in t~e world today - Sltocki~g! : !P... !~. RO~·JE : That is right. T.n:-eeo of them. '·!!' ..

H.IC:C".:..\2~: - ~;~ell ~onourable, r.:uly elected reFrescntatives of a freedom loving country, democratic country such as the United States, in simply carrying out their duty to enquire into and protect US citizens, vlhich ·is Hhat Congressman Ryan tvas dcing, finds himself~ as uell as others, as 'Jell as members of the media and others, subjected to a very brutal nurder. It sometimes then poi~ts up just :1otv miniscule our little prc-bler.~s are v1hen you look at it on a global basis. o\ .. t1d certainly, I am s::re, !lr.

Speakar, that your office can, through the appr~;Jriate d~plomatic channels, convey the sympathy of the entire House. ~·8.. NEARY: Hear, hear! ~·!R. SPEAKER: The hon. Leader of tJ·.e Oppositi.on. 1!1' .• ;L ROWE: Sir, may I just add - I forgot t·7hen I ro:;e first, .the tHo NBC net,,smen a.ncl the nl?."smen from the, Se.r.

Fra~cisco Ex:ll:'.incr, I ':>elieva, if Your Honour uoulcl uct mir,d including that, our condolences to the families of the-se people as Hell because of course the nedia and political figures are closely associated in public life and they thenselves T.".n :!qually grave risks t-rl.th the political figure and of course came to the same tragic end, and I would like to 5ee them included in the nessa!je if Your Honour 1-rould see to it. ?·<:It.

SPEAKER: It ·Till be noted the tdsh of the House t01at a communication be 1r.ade Hith the House's condolences ,.rith respect to the death of Ccngress1r.an Ryan and t;1e mem!:>ers of tile

:::·I - 3 ::r: .. S?EA..;a;R: media Hilo accompani:=d t:len. ORDEF.S OF T:IE ";;AY: Comcittee of Supply. On motion that the House resolve itself into. Committee of t!le 1\hole on Supply, Hr. Speaker left t:!e CI1air. ,. \ . '

Tape :-:o. 5218 1\ll-1 Order, please: The hon. MeMber for LaPoile. '!R. !·:!O:ARY: ''"P-. CHAII:.l'.t"~: ~!r. Chairman, during my abse.nce - Bill 56 ~1e t4ere discussing. ~~. NEARY: I presume we are continuing debate on that loan bill for the government to borrow $150 million. I do not think, Sir, that this government is fit to borr01~ 150 cents let alone ns0 million. nuring my absence, Sir, I am told that everything has ':>een s••eetness and lifht, everybody is almost kissing counsins in the ~'ouse and I hardly knm,• •.-1hat to say this afternoon.

I feel so nervous standing in my position here, Sir, I feel so nervous that I ~~ght rock the boat. But I hope, Sir, before my time is up that I Hill have riveted a message to the people of this Province that .this government, Sir, are not fit to borrow $150 million, they have not shown good stewardship, they have not shotm good management -in the past, over the past six or seven·years and I hope to prove it in a few minutes. I will give the House an example of the kind of mismanagement that we have seen in this Province in the last six or seven years.

I have !!ready given outsfde of the House a number of examples c:,( why I tl~ink and our party feel that this government is not liit to be entrusted~ith $150 million. Mr·. Chairman, if I 1~ented to this afternoon I could give you a list of reasons the length of this Assembly of v!hy this government have mismanaged the affai.rs of thin Province and are not fit to go to the bond market to borro1~ Sl.SO million.

Although I understand, Sir, I understand full well that the gove1:nll\ent, t.Yhen the House was arbitrarily closed by the Premier, · abruptly closed by the Premier, arbitrarily closed down Hhen the r.overnment Reuse Leader was ·away,that the government got themselves boxed in so to speak.. fhey $150 million to carry on a capital works programme. and all of a sudden the House is closed and they have no authority to borrow the money. So what have they been doing in the interim, in the intervening period? F'hat have they been doing?

Nove~ber ~~.1~78 Tape No. 5218 JI.H-2 That is the question. That is the question 1 my colle;;q;ue said. That is the question. Did the Minister of Finance go down to the banks and arrange iterim financing to carry on the government programme?.. If so, Sir, then. the peop~e of this Province are paying through the nose for that interim financing.~r did the government have enough money, sl·fficient money in the bank to ti,te them over, They die'. not have to go to the banks to arrange interim fin.:l!~cine? '·'e '·:ould li!--.e to knot-7.

Because if they did arranr.e interirr. financing, Sir, tl-:at is <>.nether reason Hhy the peopJ.e of th:.s Province are paying such high taxes. As I say~I can go on and on, Sir, and I can give all kinds of reasons vhy we cannot trust this government ~rith 150 cents let alone SlSO million.and I hope to prove it in a fet,• moments, Sir.

I tdll prove it by talking about a situation that has arisen in connection with the Labrador Linerboard mill. !Ion. me1:1bers, Sir,tri.ll recall that on ~!ovember 1,1978 1 1 fonrarded to the !:inister of Justice documents pertaining to the peculiar relationships . . bettveen Labrador Linerboard Limited and its sales agents, International Forest Products of Boston, ~assachusetts. Now, }!r.

Chairman, since these documents - and the !{inister of Transportation,! believe it is not•, the han. gentleman said from Ottawa, "Ch 1 it is one of ~!eary's pipe dreams, just another Neary dream." The former Chairman of the board, :•.r. Crosbie,vi.ciousl.y reacted like a t•ounded animal. ".'lethini<s t;1at he doth protest ·too much'~ for scr.1e reason or other.

And the Premier ·..1ent out in Gander - and the l1on. n.nister of Finance is continuously reminding the House that it is we t;ho raise the personal chnracter assassination and the smear tactics,and let me remind the hon. gentleman t-that ti--e hon .. the Prerr.ier did cut in Gander tJI:cn I raised this matter on he!lalf of the people Gf this Provir.r:e. Fho was the smear artist and who t,•as the person then 1·7hose character got attacked? •-:r. ChairmP.n, let r.1e rer.:ind the Premier of this Provin::e that we may not in this .Province practice the same kind of politics

November 20, 1978 Tape 5219 EC - 1 NR. NEARY: as they do in Manitoba for the simple reason we do not have the same kind of a Premier and the same kind of a gover~ment, and I hope he will communicate that message· to the person who made that statement, and I a~ sure he can. I do not intend, Mr. Speaker, to dwell on these documents that I par.sed over to the Minister of Justice 1 who was shrewd and cute enough not to make any statement, no reaction.

The minister said, 'I ~till not react until I read the statements.' Maybe the Minister of Transporta~ion should have followed hin in ihat example and maybe the Premier and Mr. Crosbie should have followed that example. Was it a pipe dream, Sir, when the minister immediately launched an RCMP investigation, called in the RCMP commercial and fraud squad? Was that a pipe dream? I am not going to dwell on the documents now, Sir, since the Royal Canadian Mounted Police are presently investigating these matters and I do not wish. at this moment to comment further on them. I do, however, }{r.

Chairman, want to table now in this hon. House another document, an affidavit from a distinguished citizen of the United States, from a gentleman who is a resident of New York, which has a bearing ·on Labrador Linerboard, Sir, where some of this money was squandered and wasted. And I want to comment on its choice of international sales representatives as well as the peculiar game, Sir, of musical chairs that was played by the top management of both International Forest Products and Labrador Linerboard while the mill at Stephenville was the direct responsibility of Mr.

John Crosbie as its chairman and executive director, coincidental with his Cabinet responsibility as Minister of Finance in this Province.

~ovecber 20, 1978 Tape 5219 cc -· 2 :·!R • :~EAR Y : And before I get to the document, Sir,· I yant to dray ~o the attention of the hon. members of the House why it is so difficult to get the Minister of Justice·and his colleagues to move on investigations into the Labrador Linerboard that we have been calling for for four or five years in this House. One investigation, I understand, involving the purchase of equipment, another capital outlay, has been goine on for some time. And the minister has been asked for advice by the Royal Canadian Mounted Police. What kind of advice?

And has the minister given the advice? That investigation is ongoing now for three years uncovering all kinds of dirt and scandal. Why, Mr. Chairman, is it so difficult to get a judicial inquiry or a Select Committee of the House that we have asked for so often, which we have repeated in this House? Why is it so difficult, Sir? Well, I will tell the Rouse why it is so difficult~ why I think it is so difficult. Mr. John Crosbie 9 who was the chairman of the board of directors and the chief executive officer at that time,had as his board of directors the hon.

'lover.tber 197r. Ta!)e 521"'1 :m - 1 T. ,'.lex Hicl·.rnan. According to the registry office, Sir, back in those days the hon. ". Alex Hickman, it says on this document, Con fe·:leration :lu:!.l~ing, St. John's 1;as a r.1ember of the noard of Directors of Labrador . line rboarrl. !-'hat? :::;o Honcer, Sir, no wonder we cannot get at the trut!~ .. 4.nd 1.ffio else was on that Board of Jirectors at t~e tir:1e~ ~'one ot!1er, Sir, than the 1-.on. gentleman '"ho has G:Ovec:. fron just :!.:1£~C.e t:le rail directly not-i bel:intl the :".inistzr of Justice anc! ::'.i.nister of Finance.

It says the hen. 1:illi.an: l'.arshall, Confederation Juil<'.ing,Has also a wer.1ber • of the r.oard of Directors that allm•ed this extravangance and ~1aste_ and conflict of inte-::est and dE;reliction of duty on the part of t~e people that Here ev.ployed by that nill. c!o Homier, :_·r. 1':11<'.:i.::-!:lan, He cannot get an inquiry and an investigation 2n:·: a select c:omnittee of the Rouse. And not ·only that, Sir, t!:at 1;as 1~7:!: in 1'l73 John Crosl1ie, ~Yilliam r•oody, Ed. ':aynarc\, UoHard E.

Ingrahal'l, a name that I am going to bring up shortly, and Robert ?-:raft. l'ere we have on the Board of Directors, Sir, ~o))er~ !:raft, our sales agent on the Board of Directors of Labrador linerhoard, that was 1'?73; 1!:'74 the hen. John Crosbie, G. Fill:l!l'TI >oocly, hen. John Crosbie, hen. lvilliam l'oorly, "::1.on. Ed. ·~aynar"., ''o·:.;arc1. E. Ingraham, and I might say, Sir, in passing about the ton. Hill ian noociy -vlho is mentioned in this rlocument that so far in thj.s hon.

House I think I can sa:' Hithout fear of contradiction the only ;;;inister, the only one that I have been able to get straight ans"'ers from on the government side of the Itouse, is the hen. gentleman anti I hope the hen. gentleman will be equally as straig!,.t ,,hen it comes to t!1e scandal involved. in Labrador Linerboard. &~cl then in 1n76,the hen. gentlP.t:!an 1~as the C!1airman of the Ilea rd. Mr. Ingraham· and }~r. Kraft are kicked off now and replaced with Mr. Lundrigan and rlr. Rousseau.

~·7ovember ~I'\ ~.!, :1' .. S .:T.\RY: 1978. T<~pe sno And tl:en in 1977 "'"'"ave :1oorly, Lurtdrigan and '1.ousseau. These, ~ir, t~.:r:se r~.re t!1.e o::~ocuments and I will table t!1em to show uho the i\oard of the Directors of the linerboard mill, who the. ':.oard members were at that time according to the registry office

7ape No .. 5~21 vhich comes under tC.e :·!inister of Justice, so these documents cannot be questioned. I lay it on tite tabl~ of the ~ouse, Sir, for members to have a peep, t:> have ,, ~ool~ in t:lcir spare time. N01·T havinz presented that ::-acl~ground, :·!:.-.

Ch.<lima1•, let ce come back to the ta'.:>li:tg of an r.ffidavit. llut evan before I C:.o that, Sir, let me remind t:1e t:ouse, let !.le refrc.s:t t:~c ;ni;-.is ter 1 s memory on u. !)ress release t~at was made by t=:e. hon. ::!:e P:r.a=niar iJacl~ on ~love:J.ber 17th.~ 1~72. * 1 :-'ollord.:•g: ls a stateneilt ily Premier Frt.r.k D. :\cores at a press conference. ?~·e.r.ier Frank C. ~·foores," and :-!r. !:oores, by t!te Hay, it says in this state1:1eat and all t!1e other statecents I have seen, t;tat tl;e Prerr.ier was the man who handled this deal, t·Tho !tandled it, not the ministers.

It was :1andled personally by the Premier l1imself for some :;trange reason back in 197i.

"Premier Frank }1oores a."lnounced t:1at the government and Labrador Linerboard 11.;:·•<= ~ompleted arrangements to appoint a sales agent for t;,.e mari:eting of t:-,e Labrador Linerboard product of Labrador Linerboard Limite:i." And it goes on to say that, "International Forest Products ;;as selected only after extensive negotiations." • ".N HON. i1E!IilER: Anci it sa:,·s further down (Inaudible) • l-lell,we ~Jill come to that in a "'inute. t!taf"International Forest and its organization tvill provide LD.brador Linerboard upon request t·:ith expert technical help and assistance in the operation and t~ai;::.ter,ance of the mill and the start up." And I will come to that, Sir, because that is misleading and untrue. -And then, Sir, over on the ne~t page of that statement that Has made in November, 1972 by the hon. the Premier at a ne1-1s conference, "The governr.tent and the corl!!ultants, "~Hho Here the consultants?- ·"The government ::ond the consultants." ~-:e <1ere never told t~ho ~.;ere the consultants and ~-re co not kno~~ to this day, but in my research I ;,n,-~ .:: pretty good :l<!ea '·'nO they ""ere anc I 1-1ill tell the !louse in due course.

Tape No. 5221 :-r· - :-~ .. ~:E.:\.KY: "TI1e zc-1.'ern.."nent and the consultant nee:!.:!& for the government have discussed marketing arrangements." ,\no then further d61-m, Sir, it says, "International Forest Products Cor;>oration and its related company have been investieated ti10roug:11y." That is just not true, Sir. That is nisleading. Internat:!.onal F'or.ast ?roducts v1ere not investi~?ated thoroughl:r as t~1is statament indicates, probably ~it ten by :·(r. George ;.:.cLean, ;r.:.ddle of every

~:cver.ober 20, 1 °78 Tape 5222 PK - 1 Mr. Neary: big deal ever since, every ripoff that has taken place ever since;lhoroughly by the government, and it has been found that they have an excellent reputation!' International Forest Products ·did not exist before the linerboard deal. The Premier is telling us they ·are thoroughly investigated and they have an excellent reputation.

What foolish nonsense~ ''Also an organization has been formed for marketing in the United States and Europ.; 1~ith persons and agents of proven capacity"- now listen to this; this is very important what I am going to say in a few minutes ..!'also an organization has been formed for marketing in the United States and Europe with persons and agents of oroven capacity in that field." And then the mention the name, " Allan E. Miller will be participating with Robert K. Kraft in the capacity of Executive Vice-President,· Allan: E. Miller"- listen to this now -''Allan E. Miller will be participating with Robert K.

Kraft in'the capacity of Executive Vice-President." ·Mr. Chairman, that is completely false, misleading, and untrue. And I will tell the House why it is untrue. I duq out all of the statements and all the documents in connection with Internatjonal Forest Products and th'e linerboard mill right from day one, and that is how I came across this, and I rinq the name of Mr. Al.lan E. t·1iller,and I got in touch with Mr.Allan E. Miller to find out if this statement was correct. And Mr.

Miller was good enough to fly up from Fl ordi a on Thursday, where he is living, where ~P. h~s an estate, fly up from Flordia anaimeet me in New York, and .I flew down to New York, in case my hon. friend is worried, at my expense, flew down to New York where I met Mr. Allan E. t1iller, and I had a long, long conversation with Mr. Miller, If I told everything that Mr. Mil~er told me that is not in the affidavit it would make the hair of ministers and the Premier of this Province stand on end. And I will deal with that in due course, too, and that information will be put in the appropriate place. Mr.

Miller,by the way, Mr. Allan E. Miller is a

~ovember 20. 1978 Tape 5223 EC - 1 MR. !lEARY: distinguished businessman in New York who belongs to the most exclusive clubs in New York including some of the millionaires clubs. The man is a millionaire himself who at one time ran seventeen businesses and is today under contract with a paper company in Chicago, under contract and therefore he cannot work for other firms. has an impeccable reputation. He is in demand. The man Wherever I have gone with ~r.

Miller,businessmen, industrialists, shook his hand and said, 'How ~re you, embraceci hir.t and Allan?' He is well known and he is also, by the way, in case the hon. gentleman is worried about Hr. Hiller's credentials, he al~o has a degree in law and a deBree in business administration, I believe, from Harvard University, uho played on the same football team with President Ford. and he is no slouch, this man. The minister looks up at me, Mr. Chairman. That gentleman, Sir, could have ignored me and he could have said, 'Look, go back to your little old island province! Go on back.

I do not want to have anything to do with this.' But thank God, Sir, as I have said before, once in a while you meet a person with a social conscience. And when this gentleman told ~e about all the goings on in connection with Labrador Linerboard, Sir, I coutd hardly believe it. And I asked Mr. Hiller if he would be kind enough on behalf of 535,000 poverty st=icken people in Newfoundland to put some of his statements in writing for me, because, Sir, that is the only ~ay it would have any credibility; otherwise it would be just word of mouth, heresay. And the gentleman was g?od enoueh to do it.

And, Mr.Chairman, before I read the ·document I want to say this. This affidavit is submitted to the House in the sincere desire to assist the Royal Canadian :taunted Police in their investigation into the possibility of crimes being committed ag~inst the people

November 20, 1978 Tape 5223 zc - 2 ~R. NEARY: of this Province. Mr. Chairman, I do hope, as I said earlier, that the hon. the Minister of Justice, who was a member of.the board of directors of Labrador Linerboard Limited at the time when these event~. occurred, covering the time that these events took place by both the affidavit and the documents that are

~ovember 20, 1978 Tape 5224 EC - 1 ~R. NEARY: a1rea~y in the hands of the RCMP, that the Minister of Justice will be extremely concerned and will expedite in every way possible the current investigation so that· his own name and the reputation of those who were close to him may be cleared of any intentional involvement in this sad.story as it unfolds, Sir. And as I say, the best course of action for the ninister to take, ~r.

Chairman, is to recommend to this House immediately, without one more moment's delay, Sir, that a Select Committee be appointed independent of the late Public Accounts Committee to investigate this whole matter for operational irregularities and to set up guidelines that will preclude such happenings in the n~gotiation for the sale of the mill that is now going on. The frightening part of it, Mr. Chairman, is that these same gentlemen today are out negotiating the sale of that mill. Now, Sir, the document. I know ny time is li~ited and I do not want to take up too much time this afternoon.

I want to say first, Sir, that I want to table the envelope because there is a label on the front of the envelope that the Minister of Justice will understand. It says, 'To· be tabled in the House of Assembly for Ptovince of Newfoundland and for no other purpose.' I want, Sir, to table the envelope first, and then I will read the document which I am going to table. And this is the original, and it is the orily signed, notarized copy that is available on the face of this earth. "State of New York, county of New York: Allan E.

Killer, being duly sworn, de~oses and says~ one, I reside at 900 Park Avenue, City of New Yor~, State of 3ew York, United States of America. Two, I have been requested by Stephen A. Neary, a member of the House of Assembly of the Province of Newfoundland and Labrador,to furni5h an affidavit regarding certain matters which I have

November 20, 1978 Tape 5224 EC - 2 HR. !lEARY: voluntarily related to hi~ and which are contained in this document. Three, it is my understanding that all statements being made in this affidavit are for the sole purpose of transmittal by Hr. Neary to the House of Assembly in session." And the reason for that, my han. friend knows that this man does not want to be harassed by people. He was good enough to ~ake this-

::overn•,er 20,19 7F. Tape ~!o. 5225 AII-1 (inaudible) if there is an1•tl~ing in t!1nt <ln~ument •·:i~:, relation to the investigation - ~;o,~arassed by ne1-1S media etc., etc. The gentleman is a v.ery, very respectable,digni fied American businessman ~·:he has tO go about his !msineSS, l•rho. llRS good enough to make ·~r.is affidavit and as far. as any enquiry or any investization i.s concerned let tr.e rut my hou. friend's l'lind at ease, that I believe that ~·r. ~'iller '·:auld make th:i.s look lil:e a :>i~le if he ever gets a chance to net ~efcre ar.. enquiry.

But the r.iinister l·.'ill not eive liS nn. er~c:uiry. C:i.ve us the enquiry. Let us find out if :·r. :'iller is rrepare<l to mah:! certain statements. Let us have it and not be harassed "or controlled '1y an investigation that the minister can control. The lllinister knm,·s ··~hat I am talking about." Three, It is my understandine that all statements being made in this affidavit are for the sole purpose of transmittal by }~r.

Neary to the House of Assembly and for no other ;:mrpose t~hatever-except for consideration as the House may see fit in the proseci1tion of its legislative duties, and, further, with the understanding tho.:: .this affidavit '"ill not be furnished by Hr. Neary to any other persons other than heretofore Sf't forth." Not~ I made a commitment that this document 1~ould be brought and laid on the table of the House of ~.ssemhly and I am fulfilling my commitment to ~~r. Miller who was so kind to do this.

"It is my understanding that the contents of this statement are therefore privileged in the c:!.rcumstances and are to be restricted only for the purposes herein described.

Four, In 1972,I was soli'cited by one f'obert K.Kraft to·beccne a stockholder of Internationl Forest Products Corporation and to manage the marketing of that company with relation to the sale of all its products,t~hich,to begin t~ith~consisted of linerboard and subsequently included pulp and any of its derivatives.'' Now I did not knotV, this is the first indication that I had,although I do not !-:not,• everything, it is the first indication that I had that the Labrador Linerboard mill sold pulp. Perhaps the minister ~ no1~s about it. But I can talk about a very peculiar deal involving pulp that \:f. (, \ 0

Tap~ No, 5225 AH-2 is not in this afficavit, that I am pr~pared to talk about in the House at a later date, a very, very, strange deal indeed. l~e alHays thought - I do not know if my hon. friend kne1~ they Here marketing pulp1 .~! !!ON, ~'E}~ER: }~. NEARY: Yes. :-1y hon. friend says y~s. That is fine I accept that. "The breakdown of distribution of its products, as exprP.ssed by ~~r. Kraft,-v.·as to· be approximately 40, per cent in the rnited States and.· 60 per ct:nt e.'.~n=here.

He proposed to me"- that is Kraft-''that I •,1ould receive tt-~enty·-five per cent of the capital shares of International Yarest Products Corporation, that I lvould h"vP. an employment contract for four years and the option to renew that contract for an additional four years. The contract in·question would provide for my representation of International Forest Products in the sale of the entire output of the Labrador Linerboard Mill,Limited at Stephenville on the l-'est Coast of Ne.~rfoundland.

I 1.;oouid be paid a salary and pe.rquia lt1•,s I·Thich together would exceed $100,000 per year," that I <JOUld function out of an office to be opened in New York 5ity and the stock would be delivered to me 1~ithout any payment of cash, security,or consideration other than my services. Furthermore, Hr. Kraft told me that he had an option to acquire the Labrador Linerboard mill and in the event he exercised that option,he would give me the opportunity to participate in that opti·on to the extent of twenty-five per cent thereof.

This latter factor did not weigh in my.consideration to associate with the company since as a businessman and a professional, a .long time in the industry, I regarded such a proposal as ludicrous, taking into account the vast sums of mcney involved in such an acquisition and my kno-<·Tledge of l!r .·Kraft's 01m :tet Hort;L "tve, After having this conversation '"ith Hr. !':raft ,I then Hent about investigating his oackground and credentials:' ·something that the Premier told us in his ne1.;o release that he had done very thoroughly." I found that he··­ Kraft-'' l)as the son-in-laH.

Tape :·:o. 3226 '<·< - 1 of ~.:1 old friend of r.tine, :·:r. Jacob ~iatt, a :.:ar. •·.'b.c ~-7as t.Tort:: in excess of $3 million and the Presicient of ?..and i>'i1itney Co:1tainer .company or 1-lorchester, ~lassachusetts, a company engaged in tile manufacture ·;,f cor-::ugated boxes. In my conversations witlt ''!r. Hiatt concerning his .o;on .. in-la:-·,", :·cr. Krafr• ":·:r. Hiatt assured me he 1·:as one hunc!reci per cent business. Ee~1ond :rr. Hiatt's personal assurance, I ~an say t:~l~t I Has totally unir:pressed with :·ir. !.Craft's background in the lb.erboard field.

He was a = in his late t>·7enties ~-lrlO , to tl-.e best of my k:1C1·:ledge at the ti.J:;e and as later confirmc•i, ~.Jas completely incompetent and inexperienced in t:te field of marketing lineboard, or anything else, having only re~ently finished school. I azree!l, however, to undertake employr.."'r.t witll this company, having been firmly assured that I,as executive vice-;:-resident, ;Jould be co:npletely in charge of the marketinc 0f the products produced hy .Labrador Linerboard Limi-ted. 11

(6) I=ediately thereafter, on November 17, 1972 in a press release uhich I have seen,I'remier Frat.k ;). :·ioores of the Province of Newfoundland)announced that I l<ould be participatine in t:1c cperation of International Forest Products Corporation,uith Robert K •. Kraft, in the cap<>.city of executive vice-president· :·loh•, !tr. Chairman,. listen to this, "Tilis statenent was not accurate and misleading. ''

(7) At the time,I learned from :·\r. !:.raft that one Howard Ingraham, 1Jho 1Jas thert an employee of the ~eaJ t::orporaticn, also producers of linerboard,~1ad entered into an arrangement •·lith him ~/hereby ~!r. Ingraham liould help to see to it that the }!ead Corporation supplied R<>.nd h'hitney Company t."ith a greater uninterrupted flo1< of ra~• material for their corrugated b?x r,eeds. :or this favour to hin,I:raft promiseci Ingr.::~1am a position as top executive of L.'l'.Jrador Linerboard Limited, t·::-,:.ch ,.,as then ;,eing form~d.

::-:·:.::~:ber 20, 1978 Tape ;;o. 5226 :r.< - 2 11 (S) '-'pon the execut:!.on .Jf t;le contract bet1,;een Labrador Linerboard Limited and Iatemat!-:lnc.l Fores:· Products Corporation, that very job of to~ ~ana~er becar.e available and Hr. Ingrahar.l, coming out of no~;here, having no credentials, having no bacl,gr(')ur.d in the production of p!!.per or in the mar\~etinr, of paper, became General ~<anager of Labrador Linerboard Limited, of ~mich ,I understand, t a.s::ad ~'tr. :(i::::.ft,"-just !i·sten to t!1is l.fr. Ch2.i:.-TT1an• "K~o~ving this," says t!Je affidavit, "I asked ~!r.

Kraft !"loH such a man Cil!i1.d be a?pointec! to the top ac!ministrativ,e position in the comrany. Mr. :<raft told Y".e not: to be concerned 1-rith this, that :~r. Ingraham is 'in our uocket 1 and t:ull: i1e v10uld clo precisely uhat he was told. "We Fere taking care of vario:.s ~roblems in ~·ds life, such as payir<g for ;ds ir.co-u.e t~o:s." I:> that .,,hat t:·,e off- shcre corr.pany to;.::s set up down in r.ermuda fo•·, to pay ;,,!r. Ingr ah.:l!Il' s taxes? "

(9) Subsequently,in a conversation "'i ~h ~·!r. Jacob Hiatt, he made me a~qare of the :1eed to r;uari:mtee the credit of Labrador Linerboard Lir.lit.::d, lvhich :1ad no creC:it." And I do not understa.'1c! •:h:.o the marketing agent, Sir, why tile markzti:t~ agent should be going around trying to LJCddle :he Li::eriloard mill, trying ~o borrow mo:1ey l'ecauBe t!":.ey ~i.ad no credlt·. ':his is t:1e sales ag"-nt.

Is that a part of t:.eir agreewmt: "To do th;::,t, 11 so ti1e aff:!.davi t says, "it \-las necessar; to place seve!'al millions. of dollars in security iu ;!Scrm-1, as collateral for loans." And I ~~ould love to be able to tell the House, I a;r. just getting a1·1ay from the affidavit for a :noment, I would love to 0c able to tell ti1e House .,.,:1at i·lr. liiller told me tl·.e ~scrm·T was:. I -;.;ould love. I crumot do it at the moment. ":~r. Hiatt told u.e that he expected me,as a condition of my emp~c~"ent,to co~tribute o::c:;. :,alf of that security >:hicil. :1ould b2 on deposit for at least a year.

I advised '·!r. :I:!.att tl':at I Hould not participate in

Tape :;o_. 5226 e:1at ~o.·us a cor.dition of anployr.E.:J.t,I could not r.rocee<l." :·ct the Premier announces all this is :1unky-dory.

November 20, 1978 Tape 5227 PK - 1 Mr. Neary: "Ten. Thereafter,! met with Mr. Hiatt and Mr. Kraft at their attorneys' office in Boston, Massachusuets,to close the contract for my employment. My attorney. was a 1 so present representing me. It was at that time that I learned for the first time in ·perusing, the draft contract which was submitted to me.,that my stock interest in International Forest Products Corporation was to be 10 per cent instead of 25 per cent. I objected to this sudden reduction in my stock interest and Mr.

Kraft attempted to justify the modification by telling me that I ~1as not aware of all the other expenses the corporation would inour,including payments to Mr. Theodore Sorenson of New York City and many others." Payments! Payments" including payments to Mr. Theodore Sorenson of New York City and many others." I have my own theory, Sir, of ~!ho the many others are. Getting back to the affidavit -incidentally, in case anybody does not remember Mr. Sorenson1 he was the solicitor.

By the way, Sir, it is illegal, it is a crime in the United States for a solicitor to act for .two parties, and in this particular instance Mr. Sorenson,who used to be with Mr. Kennedy, ~resident Kennedy at one time, the late President Kennedy, was acting for two parties, acting for the Newfoundland Government and acting for International Forest Products, which is a crime in the United States. "Afterwards, I ~1as told by Mr. Kraft that the expense to Mr.

Sorenson was to consist,in addition to his normal legal fee,of a commission of fifty cents a ton for all products shipped by International Forest Products." Not a bad legal fee, Sir. My hon. friend will be glad to participate in that,! ani sure,if it is straight. "At the time I d·id not know that.Mr. Sorenson was also acting as counsel for the Government of Newfoundland. To me this is a highly irregular method of doing business. I had never heard of a lawyer in the paper business being paid,in addition to his legal fee, a percentage of tonnage produced by the client. This unusual practice,revealed to me by Mr.

Kraft,was one of the deciding factors·

November 20, 1978 Tape 5227 PK - 2 Mr. Neary: leading me to remove myself from proceeding further in the execution of the contract~ "Eleven. Upon until this meeting in Boston when the contract was to be formalized,! had been performing my duty for the company pursuant to our oral agreement. In the course of my work, I had occasion to meet Mr. George Mclean"-a. gentleman whose name has risen ·;n this House. on numerous occasions. "I knew him to be the oublic relations man for Labrador Linerboard Limited but that is all I knew about him." Ooes my hon. friend know that Mr.

Mclean ~1as the PR man for Labrador L i nerboard? AN HON. MEMBER: MR. NEARY: AN HON. MEMBER: MR. NEARY: (I naudi b 1 e). No, Sir, this is the first indication we had,· Now! ''I did not know"- listen to this -"I did not _know who pa1d his salary nor to whom he was responsible. ~Jhen l inquired oFMr. Ingraham as to why he was working for the company,Mr. Ingraham told me that he was enhancing the company's image in.the European market so th?.t WP. could sell our product there.

To me~the at:fidavit says,"this seemed to be an anomaly since in my experience in the trade, there was no evidence to my knowledge anywhere of any bad image of Labrador Linerboard Limited. To the contrary,it was accepted and known as a welcome new source of raw material in a very tight period in the paper industry;' . And it was tight at that time. And today, Sir, I might say in passing, linerboard is in demand all over the world, right at a time this government are going to give the mill away in Stephenville. "Twelve. The emplQvment of Mr.

Mclean in such a function struck me as being odd in view of the fact that Mr. Ingraham insisted on cutting the price in the European market on the premises that they had to overcome. a bad existing image, which proposition ran coun~~r to the justification for Mr. Mclean's employment. Furthermore) the cut in orice in Europe ran counter to my business judgment since the company's product could be sold in the New England market on an acceptable basis,despite the fact that there was a freight differehtial

November 20,· 1978 Tape 5227 PK - 3 Mr. Neary: involved. This surel.v was one.of the great liiysteries of the trade at that time, why Labrador Linerboard Limited was selling at cut prices to the European market, ~1hen they could get a higher price in the New England market. Finally, the extragant costs of having ships 16cked into port by ice for weeks at a time, with their consequent.demurrage charges ·was a cost factor which !=OUld not be borne

November 20, 1973 Tape 5228 EC - 1 ~!R. c!EARY: by a company that was . to be profitable i~ this_ business. This technique was undoubtedly one of the ~ain reasons why Labrador Linerboard Limited failed in its business end.eavours." And,_ Sir, the affidavit is signed by Allan E. Miller and it is sworn to by a Notary Public in the State of :lew York. And I want to lay this on the table of the House, Mr. Chairman. up, as I said earlier. Row, Mr.

Chairman, to wind After hearing the sad story that I just related, Sir, and after re~ding the documents - and I have sent them to all members of the House - that the RCMP are investigating, can you trust this gove~nment, Sir, to borrow one cent, let alone $150 million? And the best course of action, Mr. Chairman, for the minister to take is to recomme"nd to the House of Assembly immediately, without a moment's delay, that a Select Committee be appointed to investigate this whole matter. Those individuals, Mr.

Chairman, who were re•ponsible for this horrible mess and directed the individuals who work for Labrador Linerboard and who gave the contracts and who ran the operation and who sold the paper, they must pay the penalty and not be allowed to walk away scot-free with heads held high and erect, run off to Ottawa, when we have ample evidence, Sir, of costly mismanagement such as has .surfaced in this whole sad affair. Mr. Chairma.n, the dire cost to the taxpayers of Newfoundland and Labrador during Mr.

John Crosbie's connection with successive departments of government is devastating in the extr~me - the Fisheries Department gear replacement scandal, the needless •nd costly takeover of the Churchill Falls organization, the potentially - worst of all - mismanagement of the L~brador linerboard mill and the sabotaging of the oil refinery at Come By Chance.

~ovember 20, 1973 Tape 5228 EC - 2 1·!R. ::EAR Y: So, Mr. Chairman, I do no: :hink it makes any difference whose toes we walk on, Sir. The people of this Province are paying the highest taxes in Canada because of the kind of situation that I just related to the House, and it has to be investigated. The RCMP will only look at the criminal aspect~ of it and probably limit their investigation to this one case with Stirling International in San Francisco. There is Quch more to it than that, Mr.

Chairman, and when I get a chance I will tell the members of the House and the people of this Province how they financed a professional tennis team down in Massachusetts, but that is another story, Sir. SOME HON. MEMBERS: MR. CHAIRMAN: (Mr. Young) he closes the debate. MR. HICKMAN: Hear, hear! If the hon. the minister speaks Mr. Chairman, not being a professional tennis player,! will not ~espond to the last com~ent of the hon. gentleman from LaPoile.

The affidavit that he has just tabled in this House, in my opinion, contains nothing more .than some negotiations going on between two managers trying to acquire the services of a Mr. Miller, whom the han. gentleman says is highly com~etent. And if he is one­ third as competent as the hon. gentleman from LaPoile says he is,·then he was underselling himself when he was offering his services for $10U,OOO per annum plus 25 per cent stock in a new company.

In any event, so that there can be no misunderstanding, that document is now the property of the House and it is a public document and it can be used as anyone deems it appropriate so to do in dealing with matters that may be of interest with respect to Labrador Linerboard Limited.

November 20, 1978 Tape 5228 EC - J ~IR. HICK:IAN: The other great revelation by the hon. the member for LaPoile (Mr. Neary) was the names of the directors of Labrador Linerboard Limited, names that have been given here time after time after time, people who were appointed pursuant to the Act that the hon. gentleman supported in this Rouse in 1972, the Labrador Linerboard Act creating the Crown corporation which provides that there must be ministers of the Crown on that board. And th~se ministers come and eo in accordance with the portfolios that they hnld.

So there is no great revelation there, nothing sinster, just carrying out the duties of the ministers as imposed upon them by legislation which was greeted with ent~usiasm at the time it came before this Legislature. How, Mr. Chairman, there are two or three other questions, most of which I think I had answered in respondin2 to questions put by other hon. members.

The hon. the Leader of the Opposition - I apologize to the House as my throat leaves something to be desired today by being somewhat slow in getting this out - the hon. the Leader of the Opposition made reference to the fact that this Province has a Baa Provisional I .rating. Well, Mr. Chairman, that certainly, and I aJree, is not the best rating enjoyed by governments in Canada, but may I remind this Committee that it is an improvement, and a very substantial improvement, in the rating from that fd-6d-(

"' .:.', 19 7S DF -· 1 ':-ecaus:> in 1'?1';3 this Province <~as assignecl a P.aa ratinf: .~n-1 a J:'aa provisional one rating,l·lhich t~e "lave r.:<?.ncoged to maintain since July 1974;is a miniscule stet> helot< tllat /. rating for which t:e all hope and I have reason ~~e will see this Provin.ce reac:--. -in the foreseeable future. T.:•ere is made public - they are public cocuwents and I ~~111 not bore t~e committee ~:y roor,arrive at- (Inaudible) ~':I'.. A. HICI~·'A!l: - that they have H!1en t!1ey arrive at these ratings.

One of the comnents in the "oony bond survey Hith respect to the Province's, iiewfoundlanc's I:saa I ratinz: sairl"'i t reflects the Province's still •mrea).~:::~d rP.source po.tent1.:tl, t!':e :nodest econor.~ic prospects, the hip) death burden and servicing costs, and also considers the impact of ~jor federal revenue sharing progrannnes and the fiscal· realism. and control evidenced by the present administration.,. And· that is a very significant stater.;ent, l~r.

Chairman,. because I do believe that this administration and this governme~t and this Province do have the cor fidence of bot~1 ~·cody's and Standard and Poor at this ti 1'1e. There is a Hhole multitude of - lryl_, S. HEA~Y:· You "ill stake your life on it. ~;ell, I ~:ill not stal:e li'.y life 0':1 it but one thing is a fact that He have irn,roved the rating sin~e 19E!l. In 195?' ;-:r •. Chairman the rating f:or :-7cHfoun:iJ.and liaS O}aa .1 - ~ -· E - ll: 1974lsix years,later it moved up from Daa to provisional one. ~'P .• S. :'~:!:A1W: Stannard anrl Poor says · that the e.oonorr.y ;,as deteriorated since 1972.

I beg your pardon,I ':l:r;e it r!ovr. That, 0fr. Sp~al:er, is r\n irr:prove!Ilen t ir,

·.·ov~r·: .. ~~r 1"-'=' -· I :,+ r~tine for us if in(!eed the .;\nd ~.nother fact' !:r. c::airt".tl!"q that should be l'lade kno'm to this Committee is that even though t~~e agencies :;ave rated the Province of '·!eH:f'ound.:and at a lesser c:edi t ::acing than Quebec,,.;ho is Aa, l:ewfoundland 's bot1d:.: are prese~tly tradi~~ at a i:luc;, ~etter price that"'~ Quet:ec' s.

T~~.is ir~ .price of the puc1t1ing is in tl':e eating and I repe.at tl":at :·e,·;foundlan<' ''onc!s \ave oeen trading at a better price! \·rif:·, our 3aa provisio!'!al one~ill'.proved u.t1der t:lis administration to provisional one, tl1an the Aa rat ins of c:-:.e Province of ~cebec. I also in• 1.icated the ve.ry satisfactory and salutary sale that ue ~tad in F.'urore in the Sprinz and out of all Canadian municipalities ar..d governr,;ents in there our acceptance ,.,ac better than any of the otherc. T!-:e hon.

Leader of the Opposition asl··.ed if I tvoulrl obtain infornation uith respect to Hhen there is some major debts =turing in this Province. There 1-1ill be one m.<>.turin[l. T:te big year is 1081. These Here monies borro,•ed some years ago ann in that there will be $25.4 million Canadi.an; $1.6 million r;.s. ; 12 million Deutchmarks; 24 million swiss francs; 34 British pounds for a to till of $-~ 7 million .

November 20, 1978 Tape 5230 EC - 1 :tR. HICKHAll: falling due in 1981, and that is based on ~he historic prices for that day. Mr.· Chairman, I am somewhat at a loss to find out what the position of the Opposition Party is with respect to our rating. The hon. the Leader of the Opposition adopted a statesmanlike approach and expressed great concern over the rating and Newfoundland's ability to ~aintain that rating, that incre~sed rating, and he put it in proper perspective. But then .he was followed by the hon. the member for St. John's West (Dr.

Kitchen) who articulated the views of the Opposition, otherwise if he did not articulate the views of the Opposition someone would have had to rise in his seat and say that what the hon. ge~tleman said was not true, did not reflect the views of his colleagues. In referring to the rating he said - and it is on Tape 5201 of yesterday's Hansard at the bottom of the page- "But the reason we are bo~rowing·- I do not care if we slip from Aa to Bb to Cc, we will borrow it if we can sell to the bond markets or anywhere else what it is we are doing and it will pay off at the end. If you have a good idea we can do it.

And that is what is going to happen." Now is the position of the official Opposition,as articul"ated by their leader, that they are ~oncerned. that we maintain and hopefully improve our rating in the bond market or is it the p~sition articulated by the hon. the member for St. John's West1 The ar.swer has been provided by the hon. the member for Bellevue (Mr. Callan). He has lifted the banner high with a picture of 'Bill Rowe 1 • So I say to the hon. che member for St.

John'~ West that he did not articulate the views of the Opposition, he is totally and absolutely out of step with the policies an enunciated by his leader, and I would suggest to his leader that he view with the gravest disquietude the possibility that the hon. gentleman

::ove~:~bcr 20: 197::! Tape 5230 EC -· 2 from St. John's West is on his back, and if he wants any advice .as to how to guard himself, I offer Exhibit A, the han. the Premier of Newfoundland. SOME HON. MEMBERS: !'ear, hear! MR. HIC~!AN: Other than that, Mr.

Chairman, ~ think in concluding this debate - and it has been a good one: there has been by and large a very concerned rational approach to the economies of this ?rdvince and the borrowing policies of this Province - may I, in concluding, 'say that I believe I have riow answered in my modest way all the questions that have been put to me to the absolute satisfaction of all han. gentlemen. MR. LUSH: Hear .. hear! MR. HICKf!AN: I thank the hon. the member for Terra Nova (Mr. Lush) for confirming and corroborating that statement. SOME HOU. MEMBERS: Hear, hear!

Motion, that the Resolution be submitted to a Committee of the Whole House in relation to the raising of funds by the Province, carried. On motion, Clauses 1 through 5, carried. Motion, that the Committee report having passed the Resolution and a bill consequent thereto, carried. On motion that the Committee rise, report progress and ask leave to sit again, Mr. Speaker returned to the Chair.

November 20, 1978 Tape 5231 PK - 1 . MR. SPEAKER: The hon. Chairman of Committees. MR. CHAIRMAN: Mr. Speaker, the. Committee of the Whole have considered the matters to them referred and have directed me to re~ort it has adopted a certain resolution and a bill consequent thereto and recommends that said bill be introduced to give effect of the same. MR. SPEAKER: The Chairman of the Committee reports that they have considered the matters to them referred and have passed a certa(n resolution with a recommendation that a bill be introduced thereto and ask leave to sit again.

On motion report received and adopted now., Committee ordered to sit again p~esently. Motion, a !-i11, "T~e 1.c-:on .~.ct, 1978", (~ill No. 56) · read a firs~. second and third time, ordered passed and its title be as on the Order Paper~ MR. HICKMAN: Supply. The House resolve itself into Committee of On motion that the House resolve itself into a Committee of the House on Supply, Mr. Speaker left the Chair. MR. CHA IR11AN: I MR. HICKMAN: COMMITTEE OF THE WHOLE Order, please~ Motion·4, Bill No. 39 Resolution: That it is expedient to bring in a measure respecting the gasoline tax act. MR.

CHAIRMAN: Shall Clause (1) carry? MR. HICKMAN: Mr. Chairman, purely for the record the reason why I call this bill right now is to give hon. gentlemen a slight respit<:! before we move on to another. This bill does not involve any increase in taxes. ~Jell ,I should not say that now, I am not being critically correct. It does involve an increase from five-point nine three. nine cents to six cents per litre. That should ~mrk out to ·1~ about once a year you pay an extra cent, but this is something to do with metric conversion. am being technically correct here.But I did

November 20, 1978 Tape 5231 PK - 2 Mr. Hickman: indicate to this Committee earlier this session that under the leadership of Mr .. James Ryan, Q •. c. and Mr. Ronald Penney, the Legislative Counsel it was decided to try and unify the language in several tax bills. We did it with respect to the income tax, not so much/ the retail sales tax,and this bill presently before the House. I do not think there is anything really new in the Act.

It is not anything that goes beyond administrative' procedures and policies that have been recommended by officials as a result of . their years of experience but it does not increase the burden on the taxpayer of this Province. MR. CHAIRMAN: Does the resolution carry? On motion resolution carried. The hon. Leader of the Opposition. MR. W. N. ROWE: Just very briefly, Sir. As the hon. Minister of Finance has said this is purely a housekeeping bill in order to make some changes which are necessary, especially with regard to the change·~o the metric system.

It should be noted,howeve~ that there i~ an increase in taxation, gasoline, not counting the three cents increase that we are going to have on the lst. of July as ~ result of the agreement made by the government to support the position·of rich Alberta as against supporting our position here as a have-not Province whereby we should not have any increases in fact we should have decreases where these necessities of life.

In adeition to that three cents per gallon that is likely to come, we should note that in Clause (3) because of the change over from gallons to litres, which necessitates a change in the amount of tax to be collected on the litres as against the gallons 9 there

:-:ove:::;,er :·:J, 19 i3 T:1pe ::o. 5232 ;-:v - 1 ~-Till :,a an increase of ·.061 cents per litre, sixty-one/ten thousands of a dollar. I did not think that that increase in taxation should go unnoticed, :-!r. C:.1ai rn.an. I take the han. r.!cm!:lc r' s :-;ord , obviously,having looked at t:~e previous ac:: ant! looked at this cne, t:1ct c:1ere are no ot!1er substantive policy change::; t<l-.t t:lc .:tct 'here t1H? .. t in certain other of the clauses, \.:hich I ':·.!ill not refer to lvhen the clauses are called,but in certain ot:1er of the clause·s certain things are exenpt fror.~ gasoline ~ax.

For example,gasoline used by aircraft is exe!ll't from gasoline tax. Perhaps tr.e mi:-.i.ster might indicate :vhy air craft should he exempt from gasoline tax. Clause (ll),"The tax in?O!;ed by this act is not paid in respect of gasoline used b~· Her :~:'.je::;ty's Government or ased by any department of government, St. John's ?:unicipa:I Council;' and then"gasoli:le used by aircraft;'

section (c). ~Jhy l,,ould that be so because it is important I think that 1.;c sl1ould have some consistency of thought on that? Or"gasoline delivered as ships' stores to any commercial vessel normally operating in extraterritorial waters," another example of an exemption which on first blush at least, !·ir. Chairman, does not indicate 1-1hy there should be that kind of an exemption available to those people.

The hen. minister 1oas correct I believe in saying that n0ne of the other matters mentioned in tile act are of ar.y subatantive nature and therefore do not require any amount of cletai.led debate in thi:; hor:.." House. On motion resolution carried. i·iotion, that the resolution be resolved in­ to a Co~ittee' of tne ~ole House in relation to a ~eAsure res~~ctin~ the Gasoline Tax Act. ·On motion clauses 1 through 23, car::-ied.

I:-t :!4 (b) "i:-t the.'hands of a:-ty ::rus::ee" i:> deleted. I take the ~on. ger.tlem:m, the ::.inister of Incus trial Deyelopnent,t:~oved that deletion. · Yes, !1e did. :·m. c:t:un::A}T: noes the amendment 'as stated to Clause 24, carry? Carrie-d. Does the clause a:; anend=:! carry? 0~ rr.o tio:l cla,.;ses 2l·. throug:1 40, carriecl. :·m.

DOODY: to this particular act .• this section (3), "Hhen he has reasonable cz.use to suspect t:v:it ;;o;asoline is kept, sol::, !"Jrc':lased or used "r d~nlt <-rith ir.. ar.y •·:a:: ~-rhatever, on or in any .r>renises, motor \'~".icle~' sh:!.~ nr bo?.t. contrary to thi.s o.c:: or t:!c re3ulai:ions, inspector may 1vithout a 'Jarrailt ,' but upo:: productio~· •. of evidence of :1is authority, er,ter ar.d search prer::ises, '"otor '7ehlcles,.-sltips or ~'oats." Does the amendment to claus.c 41 as stated carry? Carried. Does clause 41 as amer-,tiec carry? Carri~.i. . .... ·

~ove~her 20,1978 Tape No. 5233 AH-1 Or. motion cl~uses (42) through

(57) Carr1.ed. The han. ~inistcr. In'

Section 58 (1), ~·r. Chairman, "An appeal may be taken from a decision of a judge of the District Court upon any point of la~-1 raised upon the. hearing before the judge. ·.• The '"!Jrds 'to the Court of Appeal' should be inserted between the ,.:ords ·taken and the wore from. I:oes the an:er.d:cent to Clause (1) of Clause 58 carry? On motion Clause (1) of Clause (58) as .amended,carried. On motion clauses (59)through (79) carried. Motion that the Committee report having passed a bill, "An Act Respecting A Tax Upon The Consumers of Gasoline And Other Like Liquids." (Bill No. 39) Carried.

On motion that the Committee rise, report progress and ask leave to sit again. ~r. Speaker returned to the Chair. YR. SPEAKE'P.: The han. Chairman of Committees. ;.m. CHAIR11ft.N: Y.r. Speaker, the Comr.tittee of the Hhole have considered the matters to thel!'. referred and have directed me to report as adopted { a certain resolution and a bill as amended consequent thereto and recommends that said bill · be introduced to r;ive effect to same. On motion report received and adopted. Co~ittee ordered to sit again presently. On motion, amendments ·read a first and second time.

On motio~, bill No. 39 read a first, second and third time,· ordered,passed and its title be as on the Order Paper. On motion, that the House resolve itself into a Cor.unittee of the Hhole on Supply, Hr. Speaker left the Chair. CO~ITTEE OF SLTPLY.

November 20, 1978, Tape 5234, Page 1 -- apb MR. HICKMAN: MR. CHAIRMAN: in a measure respecting MR. CHAIRMAN : MR. HICKMAN: MR. CHAIRMAN: MR. HICKMAN: Motion 2, Bill No. 40. Order, please~ RESOLUTION The That it is expedient to bring Insurance Premium Tax Act. Does the resolution carry? Mr. Chairman. The hon. House Leader. This bill, bill No. 40, "An Act Respecting A Tax Upon Persons Who Pay Certain Insurance Premiums," this act again is an attempt to try and make unifo'rm the taxing legislation in the Province.

The main principle of the bill is to g.ive effect to the increase in insurance premiums tax announced by me as Minister of Finance o~ March 17, 1978 and which has been collected pursuant to ~arliamentary practice and custom and good law ever since. Mr. Chairman, other than that any other provisions in that act which are not contained in the old act are purely administrative.

There is a slight change with respect to the filing of a certificate with the Registrar of the Supreme Court, an amendment authorizing the issuance of a third party demand on the person who is indebted to an insurer's agent, an amendment to require an insurance agent ~o·deposit a bond with the minister as security for the tax collected. None of these, as I say, impose upon the taxpayer and/or the tax collector any additional burden, the only burden that is imposed is the increase in the tax upon the insurance premiums which had been announced by me when the budget was brought down on March 17. MR. SIMMONS: MR.

CHAIRMAN: Bay d'Espoir. MR. SIMMONS: Mr. Chairman. The hon. member for Burgee - Mr. Chairman, it is now a number of months· since we were,in this Province, aware of the government's proposal to increase the insurance premium's tax.

November 2o,· 1978, Tape 5234, Page 2 -- apb MR. SIMMONS: They have the legislative clout, or the parliamentary numbers to do so assuming we can keep them in the House, and I must say,· since the member for Bonavista North (Mr. Cross) has been given the extra cap, the extra hat, he seems to be keeping the fellows in the House just a little better. Perhaps he just needed that little bit extra incentive and now he has it.perhaps he will do his job a. little better.

We have demonstrated in this House that despite their greater numbers we find them at times not in the House in sufficient numbers to be able to pass their .legislation. But I have no doubt that this bill will pass. It will not pass with our blessing, Mr. Chairman. We have already said in this budget debate and at other times in this House over the past few months, that we were very much against this particular increase.

We understand that it is the government's intention to get authority for its present financial programme and we also understand that the government is intended that it will give us another Speech from the Throne fairly soon if we can dispense with some of the items on the Order Paper. It is in that spirit that we will not be saying very much about this particular tax bill. It is not because we do not have strong objections to it, we do, and these are in the record and have been stated during the budget debate some months ago. There is, Mr.

Chairman, an item apart from the fact of the increase, or the proposal to increase, there is another item that is g~rrnane here and which, perhaps, needs mentioning once again and that is the collection rate, the success the government is having collecting insurance premium taxes. Now I have no doubt about its success rate insofar as companies licenced in the Province are concerned but as you know, Mr. Chairman, there are a number of companies which are not licenced to do business in the

~ovember !0, 1978 Tape 5235 F.C - 1 ::R. 5U!;10liS: Province which actually operate from some office outside the Province, Halifax,for example, or Moncton or Montreal, and a number of such companies are peddling insurance through the mails to bona fide residents of the Province. MR. :·IOLAN: you recall? stabbeci? :•IR. S U!?·!ONS: Fhat happened on that taximan deal, 'Roger', do ~ernember when they got stabbed or may have been ~y colleague from Conception Bay South makes r~ference to the taximan issue which is an important one, but quite a different one from the one I am raising here.

The taximen were dealing through a local company, or at least a company licenced to do business in the Province. But I am talking rather about companies which are not licenced to do business in the Province, that are not established in the Province, indeed, they are operating in other jurisdictions,.in Nova Scotia, New Brunswick, Quebec and in some cases from rositions in the United States, and .. they are selling insurance policies to bona fide residents of this Province.

And in many, many cases, I am told, the tax on the premiums that these companies collect are never collected~ the taxes on these premiums are never accrued to the provincial Treasury. HR. HI C K!·fAN: These are sold fron outside the Province. HR. SHfHONS: Yes, sold from outside the Province. Again, I wanted to be clear that I am not in any way criticizing or casting any aspersions on companies in the Province in this respect; they are not the culprits here.

I am talking about companies operating from headquarters outside the Province who are collecting premiums from residents of this Province but are not transmitting the tax due on these premiums to the provincial Treasury. The last time I checked into this matter, which would have been seven, eight or nine

··lovember 20, 1978 Tape 5235 f.C - 2 ~~!HONS: months ago, there· was then no. mechanism in place at the provincial level t~ insure that these taxes were being collected. I understand that the amounts I am talking about are substantial. I would not want to give a ballpark figure n6w because I may well be quite off the mark, but the amounts I am talking about are substantial, amounts whi~h should accrue to the provincial Treasury, which would be extra money in the pocket for us as a Province, but these amounts are not forthcoming because the mechanism does not exist.

Now the Minister of Finance might want to comment on this particular one. I know the amounts are substantial. I recognize that because of the difficulty involved in ascertaining just who it is outside the Province who is selling insurance, it might be fairly costly from an administrative standpoint to set up the proper mechanism, but that aside; I would like to hear from the minister what has been done or if the idea has been abandoned altogether. The minister is aware of the item to which I am alluding, is he not? MR. HICKMAN: Right. HR. S INHO~S : And perhaps later in the debate he might want to comment on it.

Other than that, Mr. Chairman, on behalf of my colleagues, t just want to say that in the interest of expediting the b~siness, we will not be saying very much more about this particular bill. That should not be construed to mean that we do not object to it; we object to it very, very strenuously, and aside from a few comments about specifics that one or two of my colleagues will be making, including for example, my colleague from Baie Verte- White Bay (Mr. Rideout), we will be saying very little else about it, but we will be v~ting against the bill.

-; November 20, ~973 Tape 5235 EC - 3 :·!R. RIDEOUT: Hr. Chairman. -·------- MR. CEAIRMAH: (~r. Young) The hon. the ~ember for Baie Verte - White Bay. MR. RIDEOUT: I just want to raise a question here and I will do it now before we get into it clause by clause so the minister can rispond to it. I am worried about Section(51).

It says, "From and a·fter the 18th day o€ :'\arch, 1978, subsection (1) of Section (3) of the former Act is amended to read as follows." And it goe,;;. on with, "Ever:' ;>erson in the Province who enters into a contract of insurance shall pay a tax of 11 per centum of the premiums for such insurance and shall remain liable for the tax until it has been collected and remitted and paid to the r.1inister." Now looking at that in light of Section (52), says, "This Act,except

Section (5l),comes into force on the 1st day of July, 1978." Part t1~o says, ''Section (51) comes into force on the day that this Act is assented to." :·io~' Section (52) means, as I ~nderstand it, that all the Act except Section (51) did come into force.on the 1st July.

Section ~1) says that the rest of th~ Act which is only Clause '(51) itself, does not come into force until the Act has been assented to. Now does that mean that the ' 11 per cent tax on insurance has since the

November 20·, 1978, Tape 5236, Page 1 -- apb MR. RIDEOUT: budget carne down on the 17th, of March,been illegally charged by insurance companies in the Province? Well, I would like the minister to explain it. I do not profess to be learned in the law. ·MR. HICKMAN: That is tax wording that is used to ratify, that is the way you ratify the budget. MR. RIDEOUT: You can get up - MR. HICKMAN: Well, if I may, just for a second and I will ~ot take away from the hon. gentleman's time.

Obviously, when the Minister of Finance brings down his budget the tax must come into effect immediately, otherwise people would be taking advantage of the situation and, in order to avoid the tax between then and the time the Legislature passes the act, it would reach inequities. So in every parliament that I am aware of in the llritish system, the minute the Finance MiniSter brings down his budget these taxes are payable.

It is .subsequently ratified; that is the tiine honoured., tried and true and interpreted wording that is used for the parliament to ratify what has been done since the date of the budget speech. So nobody has been illegally collecting a tax. MR. RIDEOUT: Very good,Mr. Chairman. I thank the minister for the explanation.

I know that and I understand it, but then it did not seem to make sense to put in section (52) which says, "All of the bill except (51) comes in force the 1st. of July - or whenever you bring down the budget:- but the rest does not come into force until the act is assented to." That was the part that I found rather bothersome. MR. HICKMAN: Yes. MR. RIDEOUT: I thank the minister for"the • explanation. MR. HICKMAN: Mr. Chairman - Do you want to? MR. DOODY: I just wanted to comment briefly,

November 20, 1978, Tape 5236, Page 2 -- apb MR. DOODY: Sir, on the point raised by the hon. member for Burgeo - Bay d'Espoir (Mr. Simmons) which is a very legitimate and reasonable point which deals with the collection of taxes, insurance premiums taxes which are collected, or at least which are owed by companies from outside the Province. It has been a matter of contention and concern for quite awhile. In many cases the amounts are relatively small but the sum total of the amount is rather large.

I know that there are insurance companies in Australia and New Zealand and all over the place who sell policies to people in the Province and in theory 1 and indeed in fact, should indeed pay the government, pay the Province the tax due thereon. The .collection of that tax in many cases,it has appeared to us as we have gone into it over the years, it would cost more than the actual value of the tax itself.

In the Dominio_!,l of Canada, in the country itself·, from Province to Province, it might very well be that we can get into some sort of .a reciprocal tax arrangement with the other provinces' as we have with the SSA which works well with all the provinces with the exception of the Province of Quebec,which always seems to be an exception.

Perhaps somewhere down the line we can work out an insurance premiums tax collection operation with these provinces, that is the majority of the money that has not been collected- up to dat.e, as have these companies selling from outside the Province and do not have an office in . the Province. The nuisance taxes the ones that the Auditor General very often refers to, the cost of collecting them,· in the judgement of the minister.·. and of these advisers, is very often more onerous than the value of the tax itself.

And that is kind of an unfortunate situation because those people who do pay, obviously are penalized by the cost of

November 20, 1978, Tape 5236, Page 3 -- apb MR. DOODY: do not. collecting from those who I do not honestly know what the answer is or how you can go about correcting it~ There has to be a limit or there has to be a reasonable demarcation line whereby you can say it just does not pay us to send people to Australia or to wherever to take legal ·action against some company who owes the government $200, or ·$300, or $400, .or $500.

I do not really know what the answer to that is, but it is a question that has heen plaguing the Tax Division of the Department of Finance for quite a while and it is one that they are not unaware of and one vlhich,hopefully, we will be able to correct over the years as we go through. That was the only comment I wanted to make on that, Sir. MR. RIDEOUT: I thank the hon. member. MR. CHAIRMAN (Young) : The hon. member for St. John's West. DR. KITCHEN: I hav.e a. question as to how much I':'.oney is involved in these out-of-Province potential taxes .

Are we talking about hundreds of thousands or thousands or hundreds? MR. HICKMAN: Mr. Chairman, I do not know the amount, but as' the hen. Minister of Industrial Development, ·who was in the Finance Portfolio at' the time this came- I think it was discussed in Finance at the Public Accounts' Committee and I believe it is contained in their report. I do know - AN HON. MEMBER: MR. HICKMAN: tabled in the House. It is.

It is in the report which was ·I do know that as a result of discussions ·that were held flowing from that report, the machinery has been tightened as much as it can be, and there has been an improvement. But I would be hesitant to give the amount and then find that what -I am saying is not

November 20, 1978, Tape 5237, Page 1 -- apb MR. HICKMAN: in accord with what is in the Public Accounts Committee. But it is in the House. On motion, resolution carried. Motion, that the resolution be submitted to a Committee of the Whole House in relation to a measure respecting the Insurance Premiums Tax Act, carried. A bill, "An Act Respecting The.Tax Upon Persons Who Pay Certain Insurance Premiums." 16, carried. MR. CHAIRMAN : On motion, clauses 1 through Shall clause 17 carry? MR. HICKMAN: · Mi-. Chairman; strike out the words 'in the hands of any trustee' in 17 ( 2) (

b) and in 17(3) (

b) as moved by the Minister of Industrial Development. 33, carried. MR. CHAIRMAN : MR. HICKMAN: On motion, amendment carried. On motion, clauses 18 through Shall clause 34 carry? Again in 34, (inaudible) taking the first line 'to the Court of Appeal," which again the Minister of Industrial Development moves. 52 carried. On motion, amendment carried. On motion, clauses 35 through Motion, that the Committee report having passed the bill with ~endment, carried. On motion that the Committee rise, report progress and ask leave to sit again, Mr; Speaker returned to ·the Chair. MR. SPEAKER: The.hon. member. MR.

CHAIRMAN) Young): Mr. Speaker, the Committee of Supply reports having considered a certain resolution and a bill with amendment thereto and .recommends that the said bill be introduced and ask leave to sit again.

November 20, 1978, Tape 5237, Page 2 -- apb On motion, report received and adopted. On motion amendments read a first and second time, bill ordered read a first time now, by leave. On motion, bill No. 40 read a first secane and third time ordered passed and its title be as on the Order Paper. On motion that the House resolve itself into a Committee of the Whole on Supply, Mr. Speaker left the Chair.

November 20, 1978, Tape 5238, Page 1 -- apb COMMITTEE OF SUPPLY MR. HICKMAN: Motion 1, bill No. 37, "An Act Respecting A Tax On Users Of Tobacco." MR. CHAIRMAN(Young): Order, please! RESOLUTION That it is expedient to bring in a measure respecting The Tobacco Tax Act. MR. CHAIRMAN (Young) : LaPoile. Shall the resolution carry? The hon. the member for MR. NEARY: Mr. Chairman, I just want to say a few words on this bill. This is one, perhaps· if I can have a few brief remarks, the Government House Leader and myself might have a few words behind the curtain.

The last tax bill just a few moments, Sir, slipped through. Oh, yes, slipped through while I. was out doing some interviews. Yes, I know, then· it slipped through - MR. SIMMONS: We allowed it to slip through on a condition·. MR. NEARY: Right. That is right. I am coming to that. It slipped through while I was out on a condition, and I have to start communicating with my colleagues as soon as I am in a position to do so. But the tax bills, Sir, are a real golden ·opportunity for members in this House to have a minute budget debate, really, if you want to. ·AN HON. MEMBER: A mini budget debate. MR.

NEARY: A mini budget debate, if you want to because what you are doing, you are asking - although it is a tobacco tax - if you are going to charge a tax probably the best place to put it is ori booze and tobacco but the tax bill that just went through is one that will

November 20, 1978, Tape 5238, Page 2 -- apb MR. NEARY: affect the consumers. You could say that the people who drink booze and who smoke and use tobacco are also consumers but they are consumers in a different way. Insurance is almost something that is compulsory

whereas you do not have to smoke and you do not have to drink. It is a luxury tax and,if you are going toput a tax on,probably that is the best place- MR .. H. COLLINS: (inaudible) MR. NEARY: Is the hon. Minister of Health concerned .about me not being on the subject, or what? The hon. gentleman should pay attention and be very concerned about the effects of alcoholism in this Province. Mr. Chairman, I do not want to repeat myself on what I said earlier this afternoon. Newfoundlanders are now paying the highest taxes in Canada. We have the highest gasoline tax.

We have the highest income tax: if not the highest, the second highest. we have the highest S.S.A~ tax. We have the highest insurance premium tax. We have practically all around, wi·th l!laybe one or ·two exceptions 1 we have the highest taxes in the whole of Canada. And why do we have the highest taxes, Mr. Chairman? In my opinion, the reason we have the highest taxes is because of the squandering and the extravagance and the waste of this Administration. e Now, here we are back again, Sir.

The Government is collecting this tax, I might say, in my opinion, illegally, although the Minister of Justice, then the Minister of Finance will give us an argtirnent that is traditional to collect the tax and then get the legislation for doing so ratified in the House at a later date. In my opinion, that is not•the way to do things and certainly not the way this Administration said they were

November 20, 1978, Tape 5238, Page 3 -- apb MR. NEARY: going to do things. They used to always condemn the Smallwood.administration for running the affairs of the.Province that way, and when· they came in nothing was going to be done in the way of increasing taxes,or going to Ottawa with hat in hand and begging, or any other_ thing was going to be done without the approval, without the authority of the Legislature.

And the Government, the Minister of Finance has been collecting this tax now since the 1st of April and _anybody in this Province could have _gorie down in the court and could have protested and said, "This is illegal." The Government has no authority to collect these taxes, the· increase in the S.S.A. tax, the tobacco tax, the insurance premium tax, the gasoline tax because we also have a bill before us, Sir, which on.the surface appears to be an innocent type of a bill to change, to convert, the distribution of gasoline to t~e metric system.

And what it does,Sir, and the Minister of Finance, I_ believe, will be the first to admit that - what it does, it increases the price of gasoline by one cent, .9 cents a gallon, one cent, in the conversion process to the metric system. A kind of a hidden, a little sneak-it-in sort of tax. So, Sir, we are opposed to any increases in taxes by this Administration. As a matter of fact,

19iS ]r. - 1 ?roviace is t::1e sC1r.'tc t!"ling as t3ay ciicl i:: California, Pro~C'1s:i.ti.o:1 13 - i~sue e.n ultim~t:!.un to t:tis g,overnmcnt to lower t:axes, cut ta.xes. ''-•C. as t!tc !Unister of Consumer Affairs, Hho shoulC: be in i1is ::lace i::-. t~u~ House and says !te c·.'Ould not ~ratify the House b:r coming :1:!re because it is so ur.<!if,nifieci, ~·cho use& to all<ays go to Let for t:·:.~ ?OOr man's ch.:u:aj1agne, , . .,ho noH i·ri1.1. not even. bot~H~r to cor.ie ~o ~he L-atest· thin~\.i:lg o:1 al!. t~1a~e i.r.creeses ~.r.. taxes.

Fe should l..c .:oiHg ~hat t~1ey are doing ia Califo~ic:, Proposition l3.

Cut the public service - ~•d I do not ~e~• lay peo~le off either - get rid of th~ C:ea<l \-.1 e::f.3:1ts, ·zet ric! of the poiit:!.cal a?pointncnts, -z;ct rid of the .tction Group crmvd, ~et rid of all that croud dmm in ~lt~:·cfounclland Hydro '"~10 failer'. tn business end •.-Jere pulled 'in cff the streets and s~ovcd dmvn in ?;eufoundland Hydro, given !11acle jobs, top oositions, $20,000 and S2S,OO'J a year and then :naybe He can louer t!te electrici::y rates i:: this l'rovir.cc. ~e.t rid of ell t:1e ~utbeems end the Rex ~·turp.hys and all t:ult croud. Get riC. of tl,en .>11. Kick t~1em off the pay!'oll.

They nre not doinr.: nnyt!<ir.g to .iust:t.fy their e}:istencc. And, :tr. Ch::lirm<ln, t!:e :1or.. (':Cntler.vu., the >ci'... '~.:tnister ~f FishP.ries mny leo!: .'lt n~. n:cd sny, "~·!ell, but t':lf?.y :~~c :10t on the !)ayroll. '' They ~.re Sir.. T:-.c.·, ~.rl?. fee.dinr.. et the,pul~lic trough either directly or indirectly. They arc either 3etting it throu?,h the front door or t:1c b.:;ck coor, anc~ ?.:td forth •.dth their little I!UP\lics. :\ ':.elicopter. l..:.ncls at co~e i:-., t:1e:y ~1uve the sall to come· ·in e.nd aslt:. us for iacr~ases in ta.:(;~S.

F.clicopters! 'i!-',e cost lu..····.:ur~ous and e:-:pensiv~ ~1clico?ter

mondne· at pu~lic ;.::xpe::sc: \·itil ... c:~o.rlie ?ride 0:1 a tour of Trir.ity B.l;:r nr-~d. t~1e Co:1ception 3ay. A:!d t!u~n a round of golf. Do;..rn for a round of golf with :1:.s ro:;al :1i;;•1ess ~1i1o gets so up~et. ile: snys do not take to t~:e open lir,es to critize l·;ear~i', do not tc:!:~e tO th~ open li.~cs. 0ur ?Clit:!.cs her~ is r~.ot ::he bra:1d t:1at you find i:1 ;~a.~itoba. ?:-e::1i2r or the !;:i-::-.cl of a .;:over .. :;..eat you fii.:d i~ : ~ar:i to btl, ei:her. Our rolitics is strancie an~ peculiar. ~e conr~"'lair:., :.:::-.

Chairman, He coop1ain about increase i:1 taxes 1Ject1usc of all t:1e squenderins:; and the e}:travagence and '.·Jaste, and for t:u,_t <·:e arc cor:.denmed. \.;'c ere not ,lil:e :-!anitoba. They do not tlo that in :·Ianitooa. 0:-..ly in ;.:eHfountllanci that l:ay>pcns. .".nci so Sir, before tl:e govern ..

":lcnt 1;ct these bills and :1avc ti1e zall to come in and ask t!1e consu:r,er, the ordinary person in this Province, to put up any more noney, let then cut out their cxtravagence and their squanc.lerin~ and their 1.;aste and let then get these deadbeats off tile government payroll anc off t!le payrolls of the Cro1m corporations. You cannot beef up your iJ:".age - :!r. Chairman, c.loes the P1:emier realize that :1e is running such a sloppy admi;:;istration, careless administration l1e c.:mnot beC!f up :1is image by !1iring on all the nel·ismen in the rrovince.

You could hire all' ::he :1ewsmen t.!mrr. in t:te Taited Stctes a;:.d across C.O!:J.ada ancl you :;till cannot beef up your image unless you do thi1tgs 'richt. You may buy off a neHsman or t1·:o momentarily to try to help you beef up your inage, you mig!1t. You night be able to rob a Pr. man from CP.nadian National to try to beef up your ir.tage. Jlut they cannot do it \·.'hen they do not have anything to uor~ l·iith. ·:r. Chairman, here you :1ave a governnent asking for increases in taxes t!lat in my opinion, Sir, is onc.of the most corru!'t in ..

1~cvember 20, 1978 Tape 5240 GH-1 :-m. ;:EARY: the history of Newfoundland and in the history of Canada. MR. MORGAN.: ________ l:hat.ahout your P.R·. man in the Trades College. Ah, my P.R. man at the Trades College has retired ·a fine, decent. hon-ourable gentleman who has never put his hand down in the public treasury like the hon. gentleman's friend that he is carrying on a controversy with to try to get a filr.l that he lvill not give up that he 1-1as paid for. ;JR. MORGAN: He is not my friend. HR. ilEARY: Ah, Hr. Chairman, my hon. gentleman says Mr. McLean is not his friend. Mr. McLean is