-• VOL. 1 PRELIMINARY UNEDITED TRANSCRIPT HOUSE OF ASSEMBLY FOR THE PERIOD: 3:00 p.m. - 6:00 p.m. TUESDAY. JULY 24, 1979 NO. 8

July 24, 1979 The House met at 3:00P.M. Mr. Speaker in the Chair. MR. SPEAl<Elil.: (SL'!MS) MR. SPEAKER: PREMIER PECKFORD: Tape ~TO. 230 nw - 1 Order, please: 000 The hen. Premier. Mr. Speaker, if I may before we get into the regular order of business,! would like to finish off- if that is the right terminaloqy;I do not imagine it is - the officers of the House and therefore I would like to mcve the hen. member for Humber West (Mr. Baird) take the office of Assistant Deputy Speaker and Deputy Chairman of COmmittees. SOME HON. MEMBERS : MR. SPUKER: MR. 0. J1\MIESON: ;.,R. SPEAKER: Hear, hear! The hen.

Leader of the Opposition. We second, ~x. Speaker. Is it the pleasure of the House to adept the said II'Ction1 Those in favour "Aye", contrary "Nay". is ca=ied. The motion ORM. QUESTIONS MR. SPEAKER: The hen. Leader of the Opposition. MR. O.JAMIESON: Mr. Speaker, I have a question for the hen. the Premier. We are all 1 obvicusly, all of Newfoundland is deeply troubled and concerned about the possibility of a fuhermen's strike. I thin.k there is a unanimity of view that at this particular time such a close­ down of the principal industry in employment terms would be disastrous to say the least.

I have no interest at the moment in engaqinq in any kind of argument as to techniques or methods or what has transpired to this date. I merely would like to ask the Premie~ first of all, if the process which he announced here in the House -late last week is proceeding or what o~her steps supplementary to those that ~~e govern­ ment may be in a position to take. 575

July 24, 1979 Tape liTo. 230 ow - 2 !1R. SPEAn:R ( S L'IMS) : The hen. the Premier. I'REMIER PEC!':roRD: Mr. Speaker, I am sure the Leader .of the Opposition has expressed the concern or aJ..i. non. memberl> of tni.:> ROuse 1 and I imagine a lot of citizens around the Province 1 that situation as it relates to a possible strike in the fishery is a very serious matter, especially given the time of the year when in many parts of tile P~vince the fishery is really at its peek.

The process that was set in motion .on Frida?, ~- Speaker, is being followed today and no supplementary action has been taken or no action in addition to that process has been initiated bv government-What we intend to do is to go through the process announced on Friday and then this eveninq we can assess how successful or now we predict or see the success of that process. If it is felt this evening or tomorrow morning that that process does nat seem to be doing the joe that we thought ±t would do, then we would have to re-assess and perhaps take other initiatives.

But: . at the present moment we ar= letting that process follow throughT MR. Jli.."!!ESON: A suppl-nta.ry , Mr. Speaker. MR. SPEAn:R: Opposition. MR. JAMIESON: A sup;:~lementa.ry, the hon. Leader of the Just so that I 576

Jul.y 24, 1979 Tape N'o. 231 ~m. JAMIESON: ~derstand the process fully, Mr. Speaker. A question for the hon. the Premier; Am I to ~derstand that the three steps that were outlined as the NM - 1 basis for a possible resolution are now in the process of being discussed among the various parties and with a government presence, or is it simply a matter of ~~is proposal or combination of proposals having been sent and the government waiting to see what kind of response might emerge from tl'l.em? I ask that question, Mr.

Speaker, because, since the proposal was put on the table by the Premier last Friday,obviously the decision to go ahead with strike action has been taken. I do not want to read too much into that as to whether that means a rejection of the proposa1 1 but I wonder if the Premier is in a position to be a bit more specific as to just what actual face to face or other talks may be underway. ~. SPEAKER (Simms): The non. Premier. PREMIER PECI<FORD: Yes, Mr.

Speaker, I think that the other process of the ~ion by moving towards a strike situation was in place and that they had already announced before last Friday their intention to meet again today or yesterday and decide upon a date and this has not in any way impaired the initiatives that we took on Friday and we had anticipated that such would occur yesterday, that the union would make such an announcement. As I understand it, Mr.

Speaker, the !llembers of the Department of Fisheries and the Department of Labour and Manpower will be presenting on paper to the other two groups the proposal, the outline of which was presented in the House on Friday. ~. JAMIESON: ~. SPEAKER: :m. JAMIESON: One final supplementary. The hon. Leader of the apposition. Once again I want as a prelude t~ my question to emphasize that there is nothing argumentative about what I am saying at the present time. It is a 'Tery genuine effort to 577

.71Uy 24. 979 '!'ape ~o. 231 NM - 2 MR.

JAMIESON: discover 'N'hi_ch way we may be able to rasol'll'e this matter rather than - perhaps it m.iqht even be ruled, Your I!Onour,"hypotheti.ca.l - but assuminq that tomorrow there is - s~q of substance w:i.th reqa.rd to the talks, would the non. the Premier, or perhaps the !louse Leaders 1 cc:~nsider some means t!u:ouqh which a 1110r1t collqirehensive assessment ,of the situation might be undertaken .by the liouse or in comad ttee or somewhere rather tllan have tiJ rely upon what emer<;es either from che Question Perioc:l or a ministerial statement or somethirtq of that nature?

I leave it as qeneral as that at the IDCment, but I think the B.Quse would aqree that if it appears that there ia a very serious .breakdown that this House should be seized of it a.t the earliest possible oppor~ty in a.s much detail as possible. l'!ll. SPEAKER (Simms l : ~ PEO.<FORD: The llon. Premier. Yes, Mr. Speak-er, qiven that eventuality I a willinq to consider the kind of a,lternatives 578

July 24, 1979 Tape 232 l?K - l Premier l?eckford: that t..'le Leader of t..'le Opposition has just presented, and therefore on tomorrow if the situation has deteriorated or whatever I think we can set up some consultative mechanism to keep the whole E!ouse info:caed,either generally through this House or t!u·ough some other mechanism that the hen. the Leader of the Opposition just mentioned. MR. ROBERTS: Standing Order 23 _,- I should think. MR. SPEJUCER (SIMMS): The hen. member for Baie Verte-white Bay. MR. RIDEOUT: Mr. Speaker, I have a question for the Minister of Mines and Energy (Mr. Barry).

A few days ago in questioning the minister on the development of Gull Island power in terms of a possible intertie with the Province, the minister gave the House the indication if that were to come about, there appeared to be a concensus that Muskrat would be the most likely for development in the immediate future. Now studying the proposals that Hy~o has placed before the PUB, it appears that they are looking for favourably at Gull Island and Muskrat further down the road.

I wonder if the ~ster could tell me whether or not there is some conflict between government plans on the development of the Lower C.'lurchill and, say, Hydro? MR. SPEAKER: The hon. Minister of Mines and Energy. MR. BARRY: Mr. Speaker, I am sure the hen. member does not intend to do this but he is putting words into my mouth.

In responding to his question I believe I made it quite clear that the thing that is going to determine which will be the first site to be developed will be the report that is presently being prepared by a very high powered team of consultants who are revising the cost estimates for the Gull Island site and preparing cost estimates, as I understand it,for the Muskrat Falls site.

And my statement •o~as that I understood that there was a possibilitY-nothing mre definite than that, that there was a possibilitY-if the cost estimates came in when this review process is campleted,and that will not be until the end of 1979, early 1980, when this process 579

July 24, 1979 Tape 232 PK - 2 Mr. Barrv: is completed chere is a possibility that the Gull Island site might be the more attractive, even though it will be on a kilowatt hour basis in all likelihood more expensive, it might be more attractive because it will be a smaller capital cost. However, at the present time the plan under which the ~ewfoundland and Labrador a:ydro Corporation should be proceeding 1 because this is the one that has up to now received thorough consideration and an initial cost estimate prepared 1is the development of the Gull Island site.

I am just trying to say that we should not rule out the possibility of Muskrat Falls being the first site to go. MR. RIDEOUT: A supplementary. MR. SPEAKER (SIMMS): A supplementary, the non. member for Baie Verte-white Bay. MR. RIDEOUT: Yes, Mr. Speaker. I thank the hen. !ll.inister and I think that is a cl•arer stat11111ent than Ransard sor of gave from its response last week. MR. BARX!': The paper confused the statement tha1: I made. I know one of the papers, The Daily News I think it was. MR. RIDEOUT: the minister. Mr.

Speaker, I have a supplementary for And again 1 in view of the fact that Newfoundland Hydro admits that were it to develop the LOwer Churchill power in terms of an intertierand were that development to begin immediately, sao

July 24,1979 Tape No. 233 AH-1 MR. RIDEOUT: it would be at least 1986 before that power could be developed and the intertie could come in play 1 I wonder could the minister tell the House whether t:ne government 1 .1.l1 new or ti!.at lor.~.ime down tile road happening or possible happening , whether the government has any ot.~er contingency plans to protect the cons'WIII!r of electricity in this Province from the all too frequent increases in the cost of electric:i ty? MR. SPEAXER: (Si.Dms) Mines and Enerqy. MR.BA:RRY: The hon. Minister of Mr.

Speaker, first of all vi th respect to the 1986 date, I believe that is premised upon this updating of cost estimates beinq ccmpleted in early 1980. So that it is not the fact that we have to await this report will not taean an addi tilonal year being tacked on so that it is 1987. We have a year of planning that is involved in that

schedule you speak off. As to al ternata plans , Mr. Speaker, the Newfoundland and Labrador Hydro Corporation is presently briefing government with respect to a proposal for the development of the crpp.r Salmon River, as I am sure the hon. meatber is aware, and there are a aumber of options that are available. ::1 ther the Gpper Salmon and Cat Arm Rivers are developed on the Island of Newfoundland, or a fourth unit is placed on the thermal plant at Holyrood. These are expensive propositi~s.

These are ehe best of the alternatives that are facing the Province; however, and I miqht say that these are alternatives that are much more favourable than those facinq some of our neighbouring provinces because we do have hydro power still ;,.vailable

whereas they do aot. So let us not paint too black a picture. But I make no bones about the fact that until we have a Labrador power infeed, the consumers of this Province, anymore than the consUII!ers in the rest of Canada, can not expect to see stable energy prices if the price of petroleum is going to continue to increase. "nle cost of our energy is directly related to the cost of the oil that will be burnt to produce it and if the oil qoes up, Mr. Speaker, and that is a factor over which we 581.

July 24,1979 D. BARR!': price of ene%9!' will c;o \JP. MR • . JMIESON: MR. S~: (Simlna) Opposition. MR. JAMIESON: Tape No. 233 have no control, then the A suppl-ntaz:y. Hon. member of the On that last point of the hon. the minister: It is of course a fact of life,as has been said 1 that oil pr.ice11 are .i:1e:reasiDq. What I would like ta ask him is whether or not he is -are as to whether or not the Newfoundland Hrdro's subllisaion,which I believe he has in !%ant of hi.lll - it appears to be a simular qcCU!IIeftt in any event - is c;oinq to be al tared even before 582

July 24, 1979 Tape 234 E.C - l MR. ~ESON: it gets to the Public Utilities Board, because there is an asterisk whic!l. says that all of these calculations we.re macit:o pr~r .;o tile most recent O?.:;c incrtteLI:iO:OS? ln ociler worW. , .i.!> t:he N'ewfoundlanci and Labrador Hydro Corporation prepared to qo ahead with the ten and six,wnic:il is really more than sixteen, as being the minimum?

And do we read into what the non. minister has said, the fact that the mnthl.y surc.'1arge, the energy surcharge or whatever the offici.al name of it is , is also likely, in addition to the ten and six, to be increasing in relation to oil prices as is now being forecast pretty un:iversally? MR. SPEAKER: (Simms) and Industrial oevelopmant. MR.~: The non. the Minister of Mines and Energy Mr. Speaker, I would have to verify just wh.at the impact of the most recent OPEC prices will be on the rate increases and I have to preface rirf remarks with the statement that I do not have fi.rm info:anation on tills point.

However, I tlUnk it should be mentioned that 1 as I understand it, l:lle impact of the OPEC prices will not be felt in North America until sometime this Fall, so that the effect upon tile application for the initial percentage would be somewhat less , if any, than we would otherwise expect, that before the oil that is purchased gets into the pipeline and comes out this end. or into the tankers and comes out tills end, !olr. Speaker, there is a gap. So I can only say that I will take note of the question raised by the Leader of t.'le Opposition and attempt tomorrow to supply additional information on it. MR.

JAMIESON: MR. SPEAKER: Leader of the Opposition. MR. JA!.UESON: A final supplementary, Mr. Speaker. A final supplementary, the hon. the While the non. minister is doing that would he simply see if he can find a simple answer - it is a very complex issue - but a simple answer to this question?

Because I believe that t:nose who will be making ::epresentations to the Public Utilities Board will want to know this, namely, whether the 10 per cent and 6 per cent next year is qoing to be the totality of any projected energy cost increase or whether the liiJnthl.y fuel adjustment levy is qoing to be subject to all of the 583

.July 24, 1979 MR. JM4:reSON: ~SPEAXER: (Sl:MMS) and IndUstrial Development. MR. BARRY: Tape 234 EC-2 pendin9 increases in oil price·& as -11. The hon. tbe Minister of Mines and Ene:rqy 'les, Mr. l:ipeaJcer, aqain, first of all, we should !lOte that there has beea. no approval o£ the 16 per c:ent application, that this is a request. AN BON. MEMBER: The Cabinet has appzoved it. Mil. BAIUI.Y: 'rhe Cabinet has not approved anything as far as the rate application is concerned, Mr. Speaker, and tbe hon. melllber is not stating the facts correctly. SOME BON. MEMB~' Oh, oh! Mll. SP~: Order, please! The hon. minister. - 584 :

JW.y 24, 1979 Tape No. 235 so - l MR. r.. BARRY: Mr. Speaker, Wider the leqi.slation passed by this ben. El=e,by law, Newfoundland and La.bradcr Hydro CQZ:POration is entitled. to maJc:e application for rate increases to keep it in a viable financ~l position. And the lxln. member, I am sure, WiLli here when that statute went throuqh the House. ~. S. NEARY: With the approval of the Minister and the Cabinet. MR. SPEAKER: (Simms) MR. L. BARRY: Order! Order, please! Now, Mr.

Speaker, the process is that there will be a Public Utilities aoa.rd hearinq, interveners will have an opportunity to object ta the iiiiiOWlt of the increase, includi.tlq, I llliqht say, Mr. Spa.a.ker, interveners whom qovermaent 'flill be supplyinq with fi.ca.ncial assistance in order 1:0 obtain leqa.l <::ounsel t:.o fiqht for the <::on=er interest 1beca.use we believe that the only way that we will see an efficient operation by a:ydro and reasonable rates for the cons1.1111er is in the process of open debate before the Public Utili ties Board. Just one fina.l point, brief point, Mr.

Speaker. 'il'ith respect t:.o the first part of the question,there was one very important factor I ommi tted t:.o mention and that is t:.he cheapest anerqy that we have available in t:.his Province t:.oday, t:.he cheapest enarqy is not llydro, is not thermal, is net nuclear~ The cheapest enerqy is the enerqy that we save by conservation- And - have) toqether with the Federal Gover:nment,.Mr.

Speaker, a proqra~~~~~e wilich will reBUlt in the spendi.nq of saae, I ~ it is ~ll million on conservation in t:.hi.s Province, and that is a very important proqramme, ta see t:he enerqy needs of this Province beinq met in the short teen. AN !ION. MEMBER: Hear, hear. SOME HON. MEMBERS : Mr. Speaker, Mr. Speaker. MR. SPEAKER: I believe I will allow the final supplementary from t:.he Leader of the Opposition (Mr. o. Jamieson) 585

July 24, 1979 Tape No. 235 so - 2 MR. SPEAKER: (Simms) on that particular subject but we will allow the IDI!IIIber who raised the subject cne final supplementary. The non. member fer Baie ~erte - White aay. MR. T. RIDEOUT: Thank you, Mr. Speaker, and it is the fi.aal supplementary on that issue from me. In my previous suppl-enta.ry question to the minister, I aak.ed him alxlut alternatives ami he listed Cat Arm and. Upper Salmon and. a couple of others. I Wlde:rstazld f:rcm Hydro's own documents that there is theoretically at least about 800 megawatts of undeveloped. power on the Island. it:aelf.

I was 'ti!Ond.erinq whether the gcvernment and. the lllinister has any policy cr any plan to direct B:yd:ro to begin an accelerated p:roq~e of en-Island development but net losing sight, of course, of the cievelo;:aant cf the Lower Churchill wil.ich would come in with intertie itsel.f'2 MR. SPEAKER: Development. MR. L. BARRY: The non. Minister cf IDdust:rial Mr.

Speaker, as the ?remie:r ~ mentioned th.ere was an accelerated programme which commenced with. th.e aillds La.Jte cieve.lopment,but I think th.at we should also point cut that when I was minister,in 1974 o:r l975 1 I believe it was, I asked for a anvizonmental assessment to 586

Jul.y 24, 1.979 Tape !1o. 236 NM - l MR. BARRY: be carried out of the remaining hydro sites on the Island and there are some considerable environmental problems ~tith some of those areas that are included in that 800 megawatts. For example, I think the Terra Nova River is one, the Premier could correct me, that - PRE.'liER PECKFORD: The Lloyds River. MR. BARRY: This is the point I am making, that the Terra Nova River wcuid be a tremendously difficult site to develop because of the environmental considerations.

There are no megawatts in the Lloyds River but Lloyds River is the cheapest energy by ~~I probably in North America today. You could bring that in apparently at seven mils per kilowatt :1our. Now environmental considerations MR. FLIGHT: (Inauctible:). MR. SPEAKER (Simms): Order, please! MR. BARRY: - nowever, as the hon. member for Windsor-Buchans (Mr. Flight) is aware, environmental considerations mean tHat it is very difficult to proceed with ~~t . type of project. SOME HON. MEMBERS: MR. SPEAKER: MR. SI.~ONS: Hear, hear! The hon. member for aurgeo-6ay d'Espoir. Mr.

Speaker, the b.on. the Premier undertook some days ago, a week ago, I believe, to get the answer to a question which I raised in connection with the access route for the proposed Opper Salmon development, I wonder if he has had an opportunity to do so yet? MR. SPEAKER: The hon. the Premier. PREMIER PECKFORD: Yes, Mr. Speaker, I checked it out. I think ~~e hen. member for Burgeo-Bay d'Espoir (Mr.

Simmons) might be referring to - I think during the election campaign there ·~e some people in the BaY d'Espoir area who wanted some assurance that the road would be going in, if and ~then the Opper Salmon development went ahead, it would be going 587

July 24, 1979 Tape No. 236 NM - 2 in from the Bay d 1 Sspoir Access. I think there is a telegram on file with somebody in Bay d 1 Espoir indicating that Hydro haa advJ.sed me tiliu: tney intended to use c.n .. Bay d 1 Espoir route as the access route to the Upper Salmon davelop~~~ant, with a conaequenca to that in reviewing the whole question of the Upper Salmon development no final decision has been made by government as it relates to what access will be used if and when the upper Salmon Development goes ahead. I think it is the view of the Hydro Corporation that the access be from Bay d 1 Espoir.

Government has not taken a final position on that at the present moment. MR. SPEAXER {Simzlls): Burgeo-Bay d 1 Espoir. MR. SIMMONS: A supplementary, the hon. member for The Premier does refer to a telegram. I assume it is ~~e same telegram of which I have a copy here from his office during the election. In addition to that, a spokesman for him during the election stated in writing that, "'The Upper Salmon Read will lead from Bay d 1 Espoir.

This ass~ce has been given ~e by Premier Peckford today, June 14th., in a telephone conversation.• And I wonder i~ the Premier now,in light of that information- it is a signed letter, I can give him a copy if he wishes - a signed letter frcm a spokesman for him, I do not think 588

July 24, 1979 Tape 237 EC - l HR. SIMMONS: it is important that we mention the name publicly though I have no reason liqb.t of that, if the Premier has been quoted co=ectly in the letter that he had indeed given the assurance that the route would be thxough. Bay d'Espoir, could he enlighten us now as to why there has been a change 1 or indeed, if this is correct information in the first instance? MR. SPEAKER: (Simms) PREMIER PEOFORtl: The non. the Premier. No, Mr. Speaker, there has been no change. The dlange h.as been that no decision has been made.

At the point in time when that e.J.egram was sent and the lattar sent, the people wi:l.o were conta~ted about the Upper SaJ.mgn development were, of course, the !iydro Corporation, and the !iydro Corporation did indicate that they intended to build the access to the Upper SaJ.mgn development, if and when it went ahead, f::om the Bay d'Espoir area. A full. briefing on the Upper SaJ.mgn development hu since ensued since the gove:mment took office and no final decision on where the access wauld go from to the Upper Sa.lmcn development !las been made.

The information that •o~as at our disposal at that time was that the access road would go in from Bay d'E:spoir and the people were so informed on the basis of advice received from !iydro. MR. SIMMONS : Mr. Speaker, a supplem.nt.uy. MR. SPEAKER: A supplementary, the hon. the member for Burgee - Bay d'Espoir. MR. SIMMONS: Mr.

Speaker, I am sure the h.cn. the Premier 1111.1St re~:z:e that there is a matter of credibility llere insofar as he and l1is administration are conce:rned, in that the andertaiting was quite definite to the ~ple of Say d'Espoir, an ~mdertakinq that the road - and it is not the road, I am sure hon. members will appreciate, but it is the 1,000 jobs that the road will make possillle during the short t~rm, during the three year const.:uction period.

It is the 1,000 jobs that the people are interested in plus the permanent implications of having a connection between the present Bay d'Espoir generating station development and the proposed Upper Sal,mgn. The road has become just the nomer, but perhaps the lllisnomer 589

July 24, 1979 Tape 237 EC - 2 MR. SIMMJNS: in some respects. It is the whole project with job implications. And I started to say to tile Premier, through you, Mr. Speaker, that there is somewhat: a ma.t':er of credibility inwlvad hare, aD.d could he indicate ta th6 House why there h..u been this decision to review? lias something come up either environmentally or some other econamic consideration?

I understand that the consultants for some months now have placed before Hydro. and, in tw:n, to government, four possibilities for access routes to the Upper Salmon, If the decision was so final on June 14th tbat a definitive statement could be made, what has transpired in the interim? Is it aD. economic consideration now or an ecological one? What has happened since that has required the matter to come under further review? MR. SPEAKER; (Simms) PREMIER PECl.CFORD: Tha hen. th.a Pramier. Yes, Mr.

Speaker, there is a vecy definite q.uaation of cradibilit:y hare and I want to be totally and absolutely hcnest wi. th both the hon. the member for Burgao - Bay d' Espoir (Mr. Simmons l and the peopla to whom I coDZWli.cated on June 14th. That is why I am indicating as claarly a.a.d as honestly as I can hera right now, l{r. Speaker, to tile hen. the lllllllllbar for Burqeo - Bay d 'Espoir that that telegram and that letter wera coDZWlicated to those people based upon advice received from Newfoundland and t.abradcr Hydro.

I was net in my office at the time, aD.d we sent out that telegram on the basis of info:z::mation received. The whole Upper Salmon development had not been reviewed by Cai:linet or by me up to that point in time. So there is a real question of 590 :

July 24, 1979 Tape 238 PK - 1 Premier Peckford: credibi~ity here. And I am saying quite definitely,because I want to be total~y honest on the matter, is that to the people who had enquired. At this point in time, since the full review of the (Jpper Salmon has been completed in light of environmental considerations, wildlife considerations,as well as hydro considerations,there has been no final decision by Cabinet or by government as to ·~at route will be taken. MR. FLIGHT: MR. SPEAKER (SIMMS) : supplementary. MR. FLIGH'r: A supplementary, Mr. Speaker. The hen. member for Windsor-Buchans on a Mr. Speaker, my supplementary is to the Premier, and as he knows as a result of meetings he has taken

part in himself over the last couple of months, that the development of the CJpper Salmon has been dangled in front of the !3uchans residents, the presently unemployed and the ones who will become unemployed by,I might say, the Premier. And all I want to do now, Mr.

Speaker, is ask the Premier if he wil~ mke a commitment to this H:ouse - Hinds Lake was dang~ed in front of them by way of employment, and that employment and any benefits were denied as a result of denying access-that any contribution to the Buchans economy or any benefits coming from the Opper Salmon will not be denied to them again as a result of access to the Upper Salmon being denied.

And I might remind the Premier here that it was the Premier, both in his capacity as the Minister of Mines and Energy and as the Premier,who made that commitment or said the things that allowed the people of Buchans and the people who are looking at or wanting some industry-created or job opportunities to take advantage of quaranteeing the economy, it was he h~elf who made the commitments and said the things about the Opper Salmon that had them believe that they would indeed participate in the construction and he knows the only way they can do that is by having access to the site. 59:1.

July 24, 1979 PREMIER PECKFORD: MR. SPEAKER (SIMMS): question briefly please? MR. FLIGHT: Tape 238 Pte - 2 Mr. Speaker, what was the question again? I wonder would the hon. member state his Yes.

Is the Premier prepared to stand by his commitment to the people of the Buchans area - havinq justified the government's poaition of denying them access to the Hinds Lake site, .:ienying them any benefits, jobs, spinoff or any other wise from the E!inds taka site - that he held out the development of the Opper Salmon, he held out the development of the Upper Salmon as being one of the projects in Central &ewfoundland that would have the effect of creating jobs for the people who will become unemployed in the Buchans area? &ow will the Premier indicate to the House if he intends to see that that will indeed happen, and that the people from the Buchans area will have access through Millertown,as he indicated 1 to the Opper Salmon?

MR. SPEAKER (SIMMS) ' PREMIER ?ECXFORD: The hon. the Premier. Yes, Mr. Speaker, I do not think that the hon. member is correct when he states that I indicated that the access to the Opper Salmon would be ~gh Millertown. r do not chink I ever said that. I have indicated to the people of Suchans on many, many occa~ons that the Opper Salmon development 592

July 24, 1!?79 Tape No. 239 OW - l PREMIER PECXFORD: provides an opportunity for govern- ment with the people of Buchans to participate in perhaps developing some of the ore reserves that were in the Upper Sal.II'On area so that the two developments could go ahead. There is some indication the Price Minerals that there mic;ht be economic deposits of copper .1nd other ores in that general area that, with the development of the Opper Salmon 1 we could also participate in havinq that aevelopment go ahead and in some way assisting - and enhancinq those ore deposits in CC~~~inq onstream and developinc; another mine.

There are many problems associated rith the []pper Salllcn development. First of all - have the~prcblem of unemployment in the Bay d' Espoir area; secondly 1 we have the problem of unemployment in the 9uchans area; thirdly, we have the problem of the environment; fourthly, we have the problem of the wildlife and all of those nave to be rationalized by the non. gen~eman who is now ~star of Mines and Energy (Mr. 9arry) 1 and by the Cabinet in its ongoing discussions of the Upper Sal.II'On dave~opment.

I am coc;nizant, sensitive, sym­ pathetic towards the people of Buchans and have demonstrated that, I think, on many, many occasions in Buchans, in this R:ouse and in other places . I can assure the hon. gentleman that in any green lic;ht given to the Upper Salii'On development, that the people of Buchans will have to be one of the areas that will have to be given hic;h priority for job opportunities on that development. MR. SPEAIEER (S DIMS) : Order, please! I am adnsed that the time for oral Questions has expired. NOTICES OF MOTION MR. SPEAKER: The hon. Minister of Health. MR. HOUSE: Mr.

Speaker, I give notice that I will on toii'Orrow ask leave to introduce the following bills, ·~Act TO Amt!!nd The Pharmaceutical. Association Act," ; "An Act Repectinq Dispensing Opticians-"; "~ Act To Provide C'Or Provision of Lower COst Prescription Drugs,"; and ·~ Act TO Amend Embalmers and Funeral Directors Act·· 11975". 593

July 24, 1979 Tape !l'O. 239 OW - 2 MR.· SPEA1tER ( S:IMMS") : The !ton. President of the Council. MR. MARSHIU.L : Mr. Spealc:er, on behalf of the Minister of conSlmlltr Affairs and Envi.roiUIIellt ·(Mr. Brett) I qive • .n.ocice tlult I will on tomo:aow ask leave to int~v.ce. the followinq bills 1 "An Act '1"0 Amenci '1'0 ~d. The Depa%tllllmt Of Conswner Affairs Al1d Environment <"Ct, 1973"; and "lm Act Respectinq The orillinq of Water Wells Anci The consenation lmd Cse of Ground Water. • !m. SPEAXER.: The hOD. Minister of Fisheries • MR. if • CAR1'E'R: Hr.

Spealc:er, I give notice t.'ta t I will on tomor:ov ask lea.oue to int.roduce the followinq bills; "ll.n Act TO Amend The Fishinq And coastinq Vessels Rebv.ildinq Repairs Bounties Act • " ; nlm llll:t TO Amend 'rhe Fishinq I.n.d.ustry Is Advisory Board Act, 1975." MR. SPEAlCElt: !!4RS • I. • VEJ!GE : The han. Minister of Education. Mr. Speaker, I give notice that I will on tomor:ov ask leave to int:roduce a bill entitled., "lion Act '!.'0 Alllend The Schools Act" • 594

July 24,1979 Tape No. 240 AH-1 MR. SPEAJ\:ER: (Silnms) Worlts. The bon. Minister of Public MR. YOUNG: Mr. Speaker, I give notice that : -.rill on tcmcr:ow ask ~eave ':e i.:lt::t!~.lc~ a bill i.l"ti.. tleo:!, "ll<n Act Respectinq Gove:rnment Printinq. • MR. SPEAXER: The hon. Minister . of 1"1nance. DR.COLLINS: Mr. Speaker, I qi ve notice that on tCIIIOrrow I wUl ask leave to introduce a bill, "An Act Respec:ting The Garnishment Against Remuneration Of Public Officials." And I give notice that I will on tomorrow ask leave to introduce a bill, "An Act To Repeal Fuel Oil Tax Acts." MR. SPEAJ\:ER: The hon.

Minister of Tourislll. MR. ?OWER: Mr. Speaker, I give notice that I will on tomorrow ask leave to introduce a bill entitled "An Act To Amend The Historic Objects. Sites And Records Act." and , "An A~ To Provide For Natural Areas In The Province ~o Be Set Aside For Th~ Benefit, Education And Enjoyment Of Present And Future Generations In The Province. " MR. SPEAJ:ER: of Labour and Manpower. MR. DINN: The hon. ~.inister Mr. Speaker, I give notice that I will on tomorrow ask leave to introduce the following bills; "An Act Respecting l\II!Usement Rides." and, "lm Act To Amend The Workers Compensation Act." MR.

O'l"l"ENHEEMER: MR. SPDXER: The hon. Minister of Justice. SOME HON. MEMBEP.S: MR. OT'!"ENHEIMER: hon. members wanted me to give notice of these. 595 Mr. Speaker. Oh , I am sorzy! Hear, hear! I was not sure

July 24,1979 Tape No. 240 AH-2 MR. O'l."l'ENHEIMER: I give notice that I will on t:oaorrow ask lea"Ve to introduce the following bills; "An Act To Amend The Fire Prevention Act.", "An Act Respecting Small ClaiiiiS.'". "An Act To Ado;lt An Anthem For '!he Province." SOME HOM. !'!EMBERS: Hear, hear! MR. OT'l'ENHEI.MER: '"An Act To Amend The Intestate Succession Act." SOME RON. !4EMBERS : Oh, oh! MR. 0'1"1'!:NHEIMER: I am not sure but the hen. lllelllber for St. John's Center (Dr .McNicholas) will probably be introducing the Anthem Act. SOME HON. MEMBERS: Oh, oh! MR.

Cl'l"l'ENHEEMER: "An Act To Amend The Provincial Court Act, J.974.", "An Act To Amend The Chai.rlllan Of The Board Of COIIU!Iissioners of Public Utilities Pension Act, 1974. •, "An Act To Relllove Anama.lies And Provincial Leqislation That May Be Construed As Discriminatory.",· "!Ul Act To Amend 'n\e Distri~ Court Act,l976." MR. SPEJUCER: ( Silnllls) Mines and Energy . MR. BARRY: The hon. Minister of Mr.

Speaker, I give notice that I will on to1110rrow ask leave to introduce a bill entitled "An Act To Facilitate The De"Vel~ment Of The Hydro Electric Power Potential Of The ~r Churchill R:iver." SOME RON. !4EMBERS : Rear, hear! 596

July 24 ,1979 '!'ape No. 240 AH-3 ANSWERS TO QUESTIONS TO WHICH NOTYCE RAS BEEN GIVEN MR.SPZU:Elt: (SiiiiiiS) I!Ul. O'l"l'ENHEIMER: The hon. Minister of Justice. Mr. Speaker, I will <;rive the ~ now to three questions on the Order Paper of last Wednesday 1 aslced by the hon. member for I.aPoile. -In_ anawer to qu-tion one, that was the tablinq of the report of the Mahoney Royal commission, this report has not beeu subllli.tted to ~veD~~~~ent and obviously I c::annot table it. I refer to the Latin, L'lllllXim wnemo dat qu!Od non habet" - , nobody can qive what he does not have. SOME !!ON • MEMBE!IS : MR. NEARY: ~. OHENHEIMER·: Hear, hear! When do you expect to qet it? I do not. know. 597

.Jul.y 24, 1979 Tape No. 241 NM- l ~- OTTENHEIMER: I really do not know. I really do not know. All of the other questions, two and three, and two b.ad a. number of subdivisions, all of the other questions dealt with various police investigations, Essentially what the question was or,when it was corrected, because originally - I just say this for the benefit of b.on. !llelllbers in general - it was to table the police enquiries.

As hon. members know that cannot be done and as corrected it was to give what I wo•l..ld call a status report, whether it is completed or not and what charges, if any, or whether charges have , in fact,been laid. There are seven or eight iUid I will go throuqh each one of them. Before so doing ,I would like to make a brief statement because these are all related and this will be a statement of the approach that I have taken and intend to take.

So in answering these and similar questions which might be asked 1 I would point out to hon. members what my procedure will ~- Where the police investigation has not been completed, in those instances, I will indicate that fact b~t I will not comment further on it except to inform the House that charges have been laid, if in fact they have been laid, before the completion of t.'le investigation. To say more than that would not only impede the progress of the investigation but could also cast aspersions on innocent people. That is in situations where police investigations are not completed.

Where the investigations have :been completed obviously there are two possibilities, either charges have been laid or they have not. I will in the first instance indicate which of those is operative. Let 111e say that I attach the highest priority to the principle of equality before the law, therefore, t.'le general principle t.'lat I shall observe and insist upon is a.s follows : Where the evidence obtained or obtainable warrants it, charges 598

July 24, 1979 Tape No. 241 NM - 2 will be laid. Where the evidence obtained or obtainable does not warrant the laying of charges they will not .be laid. That is the general principle which I shall observe and which I shall insist upon. MR. NEARY: (Inaudible) MR. OTTENHEIMER: I would certainly hope so. Yes. In answer to the question on the ~~ investigations into alleged ~ongdoing at the Labrador Linerboard mill at Stephenville and with respect to the legging operations at Goose Bay, the RCMP investigation at the Labrador Linerboard mill at Stephenville is ongoing.

Charges have been laid to date against three individuals and companies. With respect to the investigation at Goose Bay, these investigations are completed. The evidence available does not warrant the laying of charges. With respect to the RC~ investigation into alleged commissions paid to Egret in Bermuda and allegedly involving the sal~ of Labrador Linerboard products, the investigations are ongoing. With respeci to ~ investigations into allegations made by a former project manager of Scrivener's, the investigation is ongoing. With respect to the question on police investigation into St.

John's and Happy Valley-Goose Bay, and wi~~ respect to alleged wrongdoing involving purchasing of material and supplies and letting of contracts by the St. John's Housing Corpora~ion and the Newfoundland and Labrador aousing Corporation, these are two distinc~,different investigations. The St. John's based investigation is complete. The evidence available does not Wa:crant the laying of charges. The investiga1:.ion in Happy Valley-Goose Bay is ongoing, not completed. Regarding police i nves1:.igation arising from the Fishermen's Gear Replacement Programme, this investigation is ongoing.

In one instance charges were laid and dismissed. In another instance charges are pending. Charges have been laid but the matter has not been disposed of. 599

July . 24. 1.979 Tape No. 241 NM- 3 With respect to a police investigation into procedures involving the awarding of contracts in the Oe~t o:f Public Works, the investigation is ongoing. To date charges ~ve been laic! against one individual. ~ith respect eo police investigations into d~lings between a number of inciiviciua.ls and fims in the Lacal. Improvement Board of Labrador City, these investigations have been completed and as a result charges have been laid.

With respect to the iiCMP investigations into SOciete TraDSidlippinq, the investigation is completed and beeause of insufficient evidence charges !>ave not been l.aici. 'ftlese are all of the questions the non. gentlemen asked me and I have one to table and one for the hon. member. ORDERS 'E' '!"EEE DA!!: Motion one, Committee of Supply. On motion, that the House resolve itself into Committee of the Whole on supply, Mr. Speaker left the Chair. 600

JW.y 24, 1979 MR. CRAIRMAN: (Butt) OR. J. C:OLI.DlS: Tape 242 EC - l The non. the Mi.nister of Finance. Mr. Chairman, in this vote we a.ra ciaa.Ling with Conaoliciated Fund Services and ~~~embers of t.'le Couai.ttee will recall that t.'U.s wte deals with the c:ilarqes assoc:iated wim the PIJQJ.ic debt and also with the mana.qement of pensions; various pension responsibilities !or which the government is responsible. I do not propose, Mr. Chairman , to qo into any great detail about this ,;•ad.ing, but a few remarks may be in order. It will be noted that under debt charges there has been an increase in costs.

The total increase is from roughly H46 • .5 million up to over $162 million, and this rafers, as would be expected, to t.'le increased intenst rates in effect in our society at the present time. 'l'here ara debts that the Province owes wilich are repaid and new ciabts talf..n on, and these new debts, of course, allllost invari.a.bly now-a-days do nave a nigher interest charge related to them. There is some off-setting advantage, I suppose, to the present situaticm too.

I ..,ill not refer to this in any great detail because "in Coftllittee we deal with outlay ratiler t.'lan 10ith revenue, but it 10ill be noted that Wlder Revenue, Temporary Investments, for instance, silows that we get an increase in the interest that accrues to the Province for the very same reason that interest rates are qoing up allllost yearly. Mr.

Chairman, members of the Collllllittee will note that Wlder t.'le Statutory Rental Purchase - again, I will not deal witil t:his in any great detail because Collllllittae i:;; not too concerned with this - but it will be noted that each one of these subheadings there refers,really, to a. separate small crown corporation. These ara ~raciually beinq paid off a.s time qoes by a.nd tile amounts there a.re the amounts tilat are being :?aid off thi:;; year.

Another point that r think might be made at this time is in term:;; of our expenses on debt management and it will be noted that the discounts and commissions related to the sale of the Province 's ciei:lentures are considerably le:;;s this year. There is something like $3.5 mi~lion less this year. The reason for ';hat is that we anticipate 601.

July 24, 1979 Tape 242 EC - 2 MR. J. CJLLI:t.S: offering two issues on the mazket tili.s year: as opposed to three last year, and also it is anticipated that these issues will be offered on the canadian and the American lllarket rather than the European market and the ccmmission rates are lower on the ~oren American market. Mr. Chairman, under Pensions , it will be noted that there are increased costs to the Province there 1 last year something of the order of ~12 million and this year something of the order of ~15 million.

This applies to UmoSt all pensions in the public domain - railway pensions, constabulary pensions, teachers' pensions and so on and so forth. And again, it indicates t."l.e numbers of people now qoing from the Public serVice into a pension situation. I have other details here, ;.tr. Chairman, and I have no dou.bt that as we qo down through the various su.bheads, various points will arise and I will make note of any questions that are asked and I have information here that I will be able to give readily.

If there is information that is not readily aw,ilable, · I think I can ob~:ain it in relatively short order from officials in the .department. MR. CHA.Il!MAN: (Butt) MR. CHAIRMAN: (Butt) MR. SIMMONS: MR. CHAIBMAN: Bay d'Espoir. Shall 105-03-o5 carey? On motion, 105-oJ-05, carried. Shall 105-oJ-08 carey? Mr. Chairman. The hon. the member for aurgeo - MR. SIMMONS: I hope, Mr. Ch~, for clarification, tb.a.t the first item has not been carried. I was standing to my feet lJe.fore the question was put. 602

July 24, 1979 Tape 243 PK - 1 MR. S:IM!«)NS : Sir, are we on 101? MR. CHAIRMAN Om. BU'l"l') : It is statutory, and it is not voted. MR. S!MP'ONS: I am 3.ware of all that, Mr. Chairman. I just ~t to make sure that we are going to get a chance to speak in the debate before the questions are put. on 101-03, is that correct? And I would hope that we are MR. CHAIRMAN: 105-03-05. MR. SIMMONS: I hope we are on the first head, Mr. Chairman. Is that correct? MR. CRJURMAN: Statutory. MR. SIMMONS: I am aware they are statutory, Mr . Chai:anan. Which head is being called, Mr. Chairman? MR. CHAIRMAN: lOS. MR.

SIMMONS: lOS is being called, so we are on lOS. Right. I would assume that we are at liberty to make any comments about the other heads, the statutory heaas.- MR. CHAIRMAN: MR. SIMMONS: Yes,that is correct. - as the minister had opportunity to do so? Mr. Chairman, just a very brief and a <1ery prel~nary comment at this point. ~embers of the Committee will be aware that we have opportunity to raise questions under each individual subhead.

That being the case and it also being the case that we will have a Budget debate over the next few days probably interfaced with this Committee proceeding, it is not our intention at the present time to take any length of time debating points in Committee.

What we want to do is use it as the Committee procedure, and in light of the government's sta~ed intention to allow a fullfledged Budget debate, then we accept the spirit of that and it is our intention; therefore, to reciprocate by using the estimate's procedure in Committee to ask questions, basically, of information. we will allow an opinion or two along the route, and we will criticize and so on but basically it is going to be an infomation seeking process. At least,that is our intention at the 603

July 24, 1979 Tape 243 PK - 2 Mr. Simmons : outset and for that reason 1 at this point in time I have no questions except: - I have questions as we get further down mind you, but underneath Head lOS ! have no questions. My colleague for Bonavista North (Mr. Stirling) I believe has a question related to 103-04, if we might revert there for a moment, 103-04 is it 'Len'? MR. STI:RLING: Mr. Chairman, actually I do have a couple of questions specifically on that. MR. CHAIRMAN (BUTT) : The hon. member for Bonavista North. MR.

STIRLING: Maybe in the spirit in which we have discussed the importance of Committee and for the benefit of those of us who are new members,! appreciate the Chairman is also a new member, maybe if we can have this more info~l,as was indicated the Committee would be. I realize this is the Committee of the Whole, presumably the same rules do apply. Some of these questions may just be requiring some clarification for the benefit of those of us who are new members. I act~lly have a couple of questions on subhead 101, and maybe they are just for information, maybe the Minister of ?inance (Dr. J.

Collins) - if it is out of order, of course, I will not ask the question I will find another way. But going back to 101-20, in r.~hich there is a referral to revenue coming in from various sources 1 the indication is if you compare 1978-1979 with 1979-1980 that you are not expecting as many fisheries loans to be repaid, it is down by about 50 per cent. Is there any explanation for that? or is that an acceptable question? DR. J. COLLINS: Is the hon. member making a request now or will he finish his remarks first? MR.

STIRLING: well,I understood in Committee,at least- that I could ask a question and sit down and stand again. Thank you, Mr. Chairman. MR. CHAIRMAN: Yes. The hon. Minister of Finance. 604

July 24, 1979 Tape 243 PK - 3 DR. J. COLLINS: Mr. Chaiz!nan, that relates particularly to a repayment that the Province received last year under its ~e~~ciency quaran~ee loan 605

July 24 , 1979 Tape !lo. 244 so - l OR. J. COLLINS : arriUiqallllmt, a repayment from !'i..shery Products. If the hon .. 11111111Cer went back ta the Buciqet the year before, he would fillli tbat the UICWlt of repayment \l.lll!er that sul:llleacii.nq in 1977-78 would be very similar to the a~~~ount of repayment we anticip~ta in this year 1979-SO. An:i it -s in the year 1978-79 that there was a 'bump up', shall we say, there was an increased a~~~au.nt that year and that related to a repayment by .!'isbery .?rcciucts of a loaD wxi.r the guarantee deficiency arranqement. MR. L. S'l'J:RL.INC:.: Excuse me, Mr.

Chai.rman, the same question, I guess, on ecoi!Cllllic o:levelc:~piiiiU!.t loans, dCies ':!lat anticipate !:bat there wlll be a smaller amcn.:.nt paid there, Sl,.J70,000 dawn tCI S9l,OOO? For ather days, I wlll get a ecpy of the 1978 Buciqet. I took tl1is literaJ.J.y a.s 111ean.i.nq it wu revised. OR. J. CDLLINS : If the hon. gentl8111all would just give 1118 a IIICII.Ient there just to c:heck that one. Mr.

Chail:man, tne repayment of t::h.es4)1 loans -the interest Oll8 receives 1 I should say, on these loans daes vary accordinq tb wlletber the loans ~ve been repaid or li.Ct so there will be variations frcm. year to yf!ar. I do not have readily at nand --- hare !:lilt I c:lU1 certainly qat it for the hon. gentleman if he sa wishes .... I do nat have readily at nand. why there a that size of difference there.

I can tell the bon. 111em.ber wllat the repayments were or anticipated, I should say, for 1979-80. iie are anticipati.aq from Atla.D.tic Films and Electronics an interest payment of. $1, 2001 from SCiwaters N-found.land. I.iJIIited - $75,900, from Islam Products Limited - $1,9001 !rem. Newfourxilam Forest E'rcciucts - $12,700 giving a total of $91,700. So this gives a breakdown on tcciay, on this year's interest repayment. MR. CHAIRMAN: (Butt) Is that acceptable tc the hon. 111eml:ler f:rcm Bo:aavista North? MR. I.. STIRLING: Yes it is. 'l'hank you. I guess, Mr.

Cha.inlan, the point I am really getting at and may be the lllinister 606

July 24, 1979 Tape No. 244 SD - 2 MR. L. STIRLING: c.ln tell me whether it appears in iUlQther section, if it is ciec:ided that a loan which has been given in the a<:o.DQmic cievelopment area, f;:Jr a:ample, y;:J~ :u.cz::.~::e<i a Bo-tars'loan or some otbar loans, Atl&atic Fil.I;Js' loan, if a loan is act collectible or somebody has not pa.i.d. back or !las gone l:lanlcrupt, does this appear in this

section or is there another place that we can find that out or is this a ciiscretionary point where the goverlllllent can dec:ida that tbay will not press for recovery and tban it does not get recovered? Does that appear here or is there iUlQther part of the Budget or the estimates where we will finci tha~? MR. OiAIRMAN: (Butt) OR. J. COLLINS : The hen. Minister of Finance. Mr. Chairman, this particular heading 101-20, that refers to revenues received so this would not ac:tual.ly be where the Province has written off a loan.

The hen. memeer will nota that under subhead l04 -Loans Issued t1ndar Guarantee -this is where tbare have been loans given ~nder guarantee by the Province where there has been default and the Province has, tharafore, written o£f these loans. MR. CHAIRMAN: The hon. 1118111ber frc:m Eo:na.vista North. MR. L. STIRLING: Tbank you very much, Mr. C.'lairman, and I do appreciate the patience sh.own by the minister in helpinq me throu.gh this. There is a new item there, Municipal Councils, $226,000. Could the ministers explain? It is an income from Municipal Councils that is a new item. DR. J.

COLLINS : Mr, Cl:laizman, - MR. CHAIRMAN: The non. !tinister of Finance. DR. J. COLLINS : -that, Sir, refers to loans that were given by DREE i:1 the late 1960s and early l970s~I believe, and I believe they had to do with Winter Wcrlcs. Now, in last year's B~dget these were sat up. 607

JUly 24' 1979 Tape No. 245 ow - l DR. COLLINS : llthouqh they were qiven by DRE:E, there was a provincial responsibility there for them in part. And in last year's Budqet it was set up that it was anticipated that there woa.ld be repayment of these la.ns. But I doo-·not know if the non. 1118111ber will recall that a number of municipal authorities found that they could not ·~et their repayments arising out of these loans last year and so our anticipated retu:c\ actual.ly did not culminate in any money. So there was no return ac:tual.ly and that is why it is a blank fiqure there for t."l.a revised 1978/79 figure.

But we do expect now that there will be returns this year. We have set up $266 , 500,00 that will be returned to the Province arisinq out of those rather old OREE loans related to Winter worxs. MR. CKA:DMAN ('llUT'l') : MR. L. STIRLING: The hon. member for Bonavis-ca Nort.'"!. 102 - 10 refers - in c.he Rental Purchase area, just about all of those thinqs in Rental Purchase 7 the anDunts are very silnil.iar but in the Pepperrell a:ospital, the O:aneway Child Health centre, there is a substantial increase of about S50,000. Is there any explanation for that? The others are relatively nominal. MR.

C!IAIRMAN: The hen. !tl.nister of Finance. DR. J. COLLINS : I will have to get the hen . !N!!IIIber, M:r • Chairman, information on that. All I can say is that the Janeway Child Realth Centre did :retum, did pay back to the Provtnce more than was anticipated. I am not certain why they did pay back - I suppose it is conceiveable that there -s, for some reason,a greater amount of cash available and they decided to :repay back an extra amount. Bitt I will certainly look into that,! do not have that information readily at hand. MR. CHAIRMAN: The hen. member for Bonav::i.sta Nort.'t . MR. L.

STIRLING: (Inaudible l that my colleague deferred for,l03-04. I did get the opportunity to checx the l97B Estimates in this particular case and you budqeted $ 2 million, actually spent S 5 million and this year you are anticipating $1. 4 million and you gave the explanation that commission =ates are 608 '•

July 24, 1979 Tapa No • 245 r::f;l - 2 ,. MR. L. STIRLING: lower in North America and you are anticipatinq two issues rather than three. DOes that mean that last year you also antici~ted two issues? ~ould you require then an extra issue at double the colllllission rates? That $2 millian if we had it in Sonavista North could have handled a lot of problems. The hon. Minister of Finan~. OR. COLLINS: Mr. Chairman , there were three is sues last year. The borrcwi.nq requirements last year ware debated by this House and the amount was passed and that resulted in three issues last year.

Some , if not all - aqain I can get this information if the hen. member so wishes - of those issues were in Euro-dollars and the cOIIIIIIission for berrowinq in Europe is at a hiqh rate. The oollllllission in North America is 3011lethinq of the order of l per cent, l.l per cent, 1.2 per cent, that ranqe,whereas in Eu~e the commission rate is approximately 2.5 per cent. And this is not just specific for this Province 1 this is the general rate that is in effect in borrowinqs in Euro-dollars. MR. CHAIRMAN: The hon. member for !!urgeo - Bay d' Espoir. --MR. R.

SDIMONS: On that same point, I was just "WOndering what happened to the lonq-standinq tradition of this Bouse of havinq the senior official from the departlllent come in and sit with the minister? The minister is a very lcnowledo;reable person but he cannot be expected to lUt.ve all of the detail here and there is a detail here that he obviously does not have because - and I was abOut to suggest that perhaps we ouqht to revert to the old, well-established tradition of havinq the Deputy or whoever come in and sit with the minister durinq Estimates in Col!llllittee so he would have 609

July 24, 1979 Tape No. 246 NM- 1 !o!R. SIMMONS: the information literally at his elbow. But, Mr. Chairman, there has got to be more of an explanation ~ ~e m1Dister ~s giving the House on this one. ae is right in that the House gave approvals last year, but the amount in last year's budget was $2.4 million, which in the revision is up to S5 million.

And if you do some quick ~th between his three issues last year as compared to two this year, if all that is involved there is the three issues and I would assume that to be the case from the coll!lllents t.'le minister himself has made, then $5 million spread over three issues is $1.7 million per issue, and now he is telling us that two issues are going to cost about S. 7 million per issue, in which case, if that is the case I say to the minister, the discounts are not only less in North America, t.'ley must be less than half, if I follow his argument through.

Three issues cost of the order of Sl. 7 million each 7if it is fair to average them out to make my point. and new two issues are costing of the order of $.7 million each. so there is something more than meets the eye there. Perhaps the minister, if he has not gqt the answer at t.'le moment, can undertake it before these estimates go through committee in the next half hour or hour or so. There is something more to it and perhaps he now has the information. MR. CHAIRMAN (Mr. J. Butt l : The hen. Minister of finance. DR. J. COLLINS: Mr.

Chairman, I certainly ~orill in very short order now get the details on borrowings for the '78-'79 fiscal ye;u: which torill give us the detail on the $5,083, yoo_ under the sui:lhead Discounts and Commissions. I do not have that here torith ll'le but it might clarify matters in the meantime, anyway, if I just detail the $1,455,000 under that same subhead; Discounts and Commissions, for the current year, for these estimates, '79 - '80.

And it is anticipated that there would be a Onited States issue of $75 million ~orhich is equivalent to approximately $90 million Canadian, that is if one uses an e~hange rate of Sl.l7. One American dollar is equivalent to ~1.17 canadian. And at a 1 per cent commission the cost of that commission would be $877,500. So that is for one issue anticipated this year. For the second issue 6i.O

July 24, 1979 Tape No. 246 OR. J. COLLINS: anticipated this year, it is a $50 million Canadian issue and, of course, the exchange rates do not come in there and the commission is at the same rate, that is l per cent, so that would give you $500,000 there. Now, there is another amount, NM- 2 a smaller amount, which is an annual commission on some previous loans that were made in Europe, Euro and German loans and that annual commission comes to S77,500 this year.

So adding those three figures together,that is the commission on the United States issue, on the Canadian issue, and on ~~e annual amounts that app~z to some previous European loansywe get this Sl,455,000. MR. CHAil!MAN (Butt) : MR. SIMMONS : The hen. member for Burgee- aay d 'Espoir. I say to the minister that the figure ~~at is here in 103-04 is quite in range with what has been grovided for in estimates of last year and,indeed,I just checked the previous year too, '77-'78, and this figure of Sl.5 million to $2 million is exactly in order with the two or three issues as the case may be.

And that is why I am very surprised at the $5 million figure. There has got to be something there that is not meeting the eye at the moment. If you had three issues you could be talking of the order of $2 million plus, $2 million 2 or $2 million 3: but you are talking $5 million. The minister has left the Committee so I would presume he is looking for the information but I say to the Committee through you, Mr. Chairman, that there is something there, more than we have heard in Committee yet, for that S5 million amount. Perhaps enough said until the minister returns to the Committee to give us the information. 6U

July 24, 1979 Tape 247 EC - l MR. SIMMONS: To expedite 1 I might suggest if you want to call. scma of the F.eads, well and good. We have a question on an iWJa wtu.a1 is s~eutory anyway 7 so I wow.ll assume we can reve= w it when the minister comes back into the Chal:lber, but i.f Mr. Cha.i.:cnan wants to call. soll8 of the rum-statutory items to e:xpedite,than we can - MR. MABSHALL: MR. CBAI:RMAN: (Butt) :.m.. MARSHALL: I miqht say just for clarification - The hon. the President of the Council. -Mr. Chai.rman, if I may, it is only the liOn-statutory, as I know the hon. member recoqnizes, that are called. MR.

SIMMONS: (Inaudible)by leave and go back and a.sk questions after. MR. MARSHALL: 'las. No:r:mally the others do not have to be voted !lut we want to give the fullest information possible to the Committee. MR. SL~NS: For the cl.arifica.tion of 1Wf good friend, the President of the Council, what I did say was exactly what h.e said, that I am suggesting that we c:a.l.l. the only ones the Chaizman i1a.s to call, naD8ly, the liOn-statutory, if we can have tha undertaking that when the mnist!!r returns to the Clamiler we can ask questiona on some · of tl·1e statutory items we have sJc.ipped over.

That is what I am saying in effac:t. On motion, l05-QJ-Q5, carried. On motion, 105-QJ-08, carried. --· MR. CBAI:RMAN: (Butt) The hon. the member for Burqeo - Bay d'Espoir. MR. SIMK:lNS: Now, before we pass on to the Estimates for the next department, I would hope the minister is going tc return mmentarily to the iiouse. MR. MARSHALL: If the hon. member who is speaking would contint:e to speak for a couple of minutes, I will (Ina~lel 90 out~ find wut ~~ere ~a~­ lllinister is. MR. S:IMMONS : Let the record show, Mr. Chairman, that it is the first ti11111 the member for St. John's East (Mr.

Marshall) ever wanted ma to speak in this Chamber about anyth.inq. So we are into a new era of co-operation. AN E:ON. MEMBER: (~audible) to say? 612

July 24. 1979 Tape 247 EC - 2 MR. SL~NS: No, Mr. Speaker, there is an issue that I want to raise, bu-r. it would be pointless t:c raise it in the absence ot the llli.nis't.er ~cause I rill want t:c re~at it again. by ear until he comes in. Let us play it MR. ROBERrS : The !'linister (Inaudible) app:u-ently. Here he COllieS! MR. CHAI:RMAN: (But't.) Bay d'Espoir. MR. SL'!MONS: The h.on. the member for aurqeo - I put a question to the minister about 103-Q4 and I assume he undertook to qet the answer. MR. CHAI:RMAN: The hon. the Minister of Finance. CR. J. COLLINS: Yes, Mr.

Olai.:z:man, I am in the process of qettinq that brought up. The question asked referred to the 1978 - 1979 Budqat, no't. the present Budget, and that information will be .brouqht llp as soon as possible. MR. SIMM:JNS: Mr. ChaiZ111iU1 , to expedite, could we just have the minister's undertaking,notwithstanding that the C.F.S. estimates will have passed Committee, that he will provide Committee with the information at the appropriate time? I would like also to ask a question in reference to l05-03-o2, Gav.rnment of Canada Pensions.

If tila tllinister would be qocd enouqh, first of all, to tell !Ill! what they are and secondly, I note from last year's Budqet, the originally budqeted figures, that the qoverNN!nt had budqeted $110,000 for that ieem, of which apparently none was spent accordinq to the revised item hare, revised for 1978 - 1979, I that is - two questions: What are these pensions? Who are they for? And why was an item budqated last year and then subsequently 1 apparently not spent? MR. CHAIRMAN: $Butt) DR. J. COLLINS: i::ne hen. the Minister of Finance. Mr.

Chairman, the GaverNN!nt of Canada experienced some difficulties, some computer problems last year so that there were no payments ·recorded in 1978 - 1979, :Out we de anticipate tilat there will. be soma payments required in 1979 - 1980. This was not a problem f:rom our side of things, it was f:rom the federal side, anci that is the explanation there. 613

J'uly 24, 1979 '!'ape 24i EC - 3 DR. J. COLI. PIS: 'rhe other q1ies-tion was, To whom de they re:fe.J:.? Aqain, I de not have preQise detai~ on ~1;., but there were HR. SIMMCNS: (Inaudible). detail? DR. J. COLLINS• WeU, I mean, it depends llpOil how liiUd1 detail the hon. lllllllll:le·r wants. coes be want ~s, acidrasses; 614

July 24,1979 Tape No. 248 AH-1 OR. COLLINS' families, grandmothers, uncles, aunts or which : There were a number - AN !ION. MEMBER: (Inaudible) 011 .• COLLINS: If tt-'! ll.~.- l'IR. CHAI:RMAN: (Butt) order, please! OR. COLLINS: If the hon. member, Mr. Olaiman, will just allow me to say Jl!'f piece and if ne thinks it is not satisfactory I will be qlad to amplify it. But there were a number of eJIIPloyees for which the Newfoundland gove:r:nment was responsible who were subsequently transferred to federal employee. MR. ROBERTS: Cl3C ~- OR. COLLINS: And saae of these.

We have some c:ontinuinq responsibility towards their pensions and we do qet Dilled by the federal qove:rnment for our responsibility, our part responsibility for these people. And as I nave mentioned, we did not actually have any out-pay last year because of some c:cmputer difficulties at the federal level but that we do anticipate that this year these difficulties will be overcome and that we will be Dilled an estimated S210,COO. on mation, Head !.• Consolidated Fund Services without amendment, carried. Shall 201-01 carry? !'IR. NEARY : !'lr.

Chaiman, this miqht be the opportune time to raise the matter, Sir, of the - MR. CHAimmN: Tt,e hen. member for Lal'oile. MR. NEARY: .- number of IIIIUIIbers that we have here in the Rouse of Assembly. I want to make my annual complaint about the fact that I think there are too many members representing too many districts ~ this !!cuss. !m. DINN: On which side? 615

July 24,1979 Tape No. 248 AH-2 MR. NEARY: Mr. Chai.:man, fifty-two lllembers are too many !118111bers for this Province, for this House. In the first Place we cannot afford it and in the second place, .SiL, it .i.s a. higher repre&c.ltation per .:a~ita t.~;m i."l my othe= province of Canada or probably any other place in the free world.

There are teo many lllelllbers and it is too expensive tc operate this House and I aqain, Sir, would liJte to suqqest to the hon. born-aqain Premier that he reactivate the ccllllllittee that was headed up by the late Judqe Hiqqins to define the electoral boundaries in this Province - . SOME liON. MEMB:US : Hear, hear! MR. NEARY: - and that was Frankiemandered by the former Premier of this Province- and let us get back at. it and let us be r-llstic this time and not just set up a co=U.ttee and then tell them that they had to brinq in five new seats, I think it was, five new ones. ~ey had no choice.

They could not reduce the number. They .had to increase the number by nine. MR. SIMMONS: MR. NEARY: Party-two to fifty-one. That ~s right, from forty- two tc fifty-one. There was a dual riding at the tillle, Harbour Main, that had t....a members, so that were forty-two members. Then they set up the !:lectoria1 Boundary C0111111ission which was supposed to be independent and they were not allowed tc use their own discretion/ they were told that the number of seats in the Howse had to be incr•ased by nine and 1110•t of the nine, by the way, Sir, were in urban centers, IIIC•tlY in the city of St. John's.

And we can see the result of it today. lfe argued at that tille that you could qet a lopsided government in this Province that represented the urban centers and that is exactly what happened in the last election. as a result of the gerrymandering that was done by the former Premier of this Province. You now have a government that represents, in the !ll&in,. St. John's and the urban centers and you have an Opposition that represents the rural parts of the Province. '!he distribution of the seats is not equally divided on both 616

July 24,1979 Tape No. 248 AH-3 sides of the House. And that vas one of the adverse effects of monkeyinq around with the llectoral Boundaries Commission. They should have been left alone. ~ D their quidalines and in their tems of reference they should not have been told that they had to increase the number of members in this House by nina, that should have been left at their discretion. They may have decided, Mr. Chairman, to reduce the nUII!ber of seats in this House which would be more in Line with the population of the Province. Givinq that exua seat to Labrador waa a qood move.

Because - also ~ed that, Sir, if my bon. colleac;ues who sat in the House bac:k in 1974, I thinlc it was, before the 1975 election, we arqued here niqht and day to give Labrador four seats in this House and finally the n- Premier caved in before the last election, for poll tical reasons more than anythinq else, because he could get a little political mileaqe out off it and gave the fourth seat to Labrador. Well., well ~d good but there are still too many. MR. SIMMONS: He lost a seat. MR. NEARY : Be lost a seat. That is right. There are still too 111any. 617

July 24, 1979 Tape No. 249 NM - l PREMIER PEC!a'ORD: Count them. Thirty-three and nineteen. MR. NF.ARY: Thirty-three eity slickers - PREMIER PECKFORD: Thirty-three to nineteen. MR. NEARY: Thirty-three city slickers, nineteen members representing the rural parts of the Province, representing the fishing coiiiiiiWlities of Newfoundland. Mr. Chai.z:man, the non. gentleman is over there blowing his own horn, Sir. The hen. gentleman got himself surrounded by a group of city slickers, including the qentleman who sits to his right, the unofficial Premier.

The hon. gentleman is only being manipulated by the bon. gentleman who sits to his right. AN HON. MEMBER: Corner boys. )Ill.. !lEARY: Yes, corner boys. Ther@ is the real Premier • The gentleman who sits to the hon. Premier' s right is the real ?rE!!!Iier of the Province. MR. SIMMONS: · Would the real Premier please stand up. MR. NEARY: That is right. The Premier is surrounded by a group of townies. MR. STIRLING: Four standing up behind him. MR. ~lEARY: And, Mr. Speaker, that was one of the ---·-·- ·- MR. SIMMONS: There he is. There he is. Look~ The real Premier is standing up. MR.

NEARY: The real Premier ,as we will find out as time gees on, the real Premier is seated to the right of the hon. gentleman. That is the gentleman who calls the shots. And unless my hon. friend has the courage to stand up to the city sliekers,then this will be a government that will be run by this, really and truly, by the martini crowd in st. John's ~ast. MR. YOUNG: The same old speech you had last year 'Steve' . 618

July 24, 1979 MR. NEARY: Mr. Speaker. MR. YOUNG: MR: SIMMONS: Tape No. 249 No, it is not the same old speech, The same old speech. - commitment, that is all you got. NM - 2 MR. NEARY: Diqgin 'em Dillon is back in the eouse, Sir. I ?resume that bill the hon. gentleman announced today is for the benefit of the hon. member there, the mortuary bill. MR. SIMMONS: MR. NEARY: The last fellow who will let you down. That is right. So, Mr. Speaker, I do not want to delay the proceedings of the Committee but I do want to strongly protest again, Sir, the number of seats we have in this eouse.

I think it should be far less than what it is. Thirty-five or thirty-six seats in this hen. eouse is sufficient to govern this Province, with a Cabinet of about ten or a dozen ministers. eaving said that, Sir, I know at this point in time we still have three or four years to go before the next -eiection. It will not become an issue. The hen. gentleman sits over there and talks about electoral reform, about bringing in a new bill covering election expenses and so fort."l.

Well, I would say that the hen. gentleman should make this a part of the package and if the hon. gentleman is sincere about his electoral reform,then set up, reinstitute this commission and let th~ go at it and let them see if we need fifty-two seats in this eouse. I think thirty-five or thirty-six is sufficient to govern this Province and it would be far less expensive. We cannot afford it. We are over governed. There is too much regimentation. There are too many people sitting around doing nothing.

There are teo ~y people milking the Public Treasury by subsidizing their income, dropping in once in a while, picking up their cheques and then going downtown practicing la~ or whatever other profession they are in. MR. YOUNG: You are talking about your former leader . 619

J'uly 24, 1979 't'ape NQ. 249 NM- 3 mt. NEARY' I am talkinq alxlut, Sir, anyl:lody in that category, that is who I am tal.kinq about, .tmmaterial of wbat side of the aouse they are on. TheY have their big law businesses 1 mcs.tly downtown, and they just droJ? into the House, Sir, just to get sworn in, to qua.lify for th!lir - to say, "Well, I can pick up !flY cheque now with a clear conscience," and then they are gone and you never see them ac;a.in. ADi yet these are the first ones you hear advocatinq that if you. want to get good people in public life in this Province you have to pay them S30,000 or S40,000 or SSO,OOO a Y~- AN liON. MEMBER: Name them. Name them. 620

July 24, 1979 Tape 230 EC • l MR. NE;.RY: ~30,000 or ~4o,ooo or ~so,ooo a year. I am al.l for it providing that they malta it ~ full.-time occupation and law offices and in the other offices downtown. And this is only ju:it enough to pay their income tax. 'l1le little cheque they pick up here, ~12,000 or ~13,000 or ~14,000, is just a subsidy. AN HON. MEMBER: You made more last year. MR. m:ARY: Yes, I did, as a :na.~ter of fact. That is right, I did, but I worked for it. I guarantee you, there is one thing you cannot accuse 1118 of in this House, of not doing rrry homework.

And I think if you are going to do a job in this House , :oir. Chai:z:man, that you nave to devote full time to it. I think politics - but not for fifty·t"iio a.mbers - politics is a full-time occupation for thirty·five or thirty-six members, everybody working at it full time, doing a good job for t..'leir districts and for their Province. And I think that is the way it should be, Mr. Cha.i:z:man.

And it know it is too early in the game now - we are go.i.o.g to have to wait four or five years !lefore a general. election is callea- but it will bec:cme an issue :Oefore the next election again, and •.-e will see if we canno-c persuade the hon. gentlema.c. who now occupies the Premier's c!lair, see if we cannot persuade him that we were right, that when they did gerrymander the electoral .boundaries in this ?rovince that what you got then was a gove:rnment t.'lat represented the Trans-canada Highway and an Opposition that represented the rest of the Province, the rural areas.

That is what you got as a result of the qerrymander. ,•IR. SIMMONS: Genydoodied. MR. NEARY: Pardon? MR. SIMMONS: It was Ge=;'doodied. It was to cater to Gerry and Doody, do you remember? MR. NURY: That is :::ight. .5o, anyway, I have said rrry little piece, Sir, and I am glad I said it. And next year I will repeat it again~ And leading up to the election I will nave another go at it1 and I hope that the hon. gentleman somewhere along t.."l.e line will soften up and see the a1erit 62:1

.July 24, 1979 Tape 250 c:c - 2 o1R. ;:.."EA,RY: of my argument, that we have too many memeers in tilis !iouse. There is need to set up a Royal Commission to !.;ick i=.~ :=e ~lec"toral boundarieS,.And that commission,if it is set up, should be completely independent, should not be dictated to by t."le government, they should be left on their own to make their own dacisi .ons, and maybe they would come to the conclusion tilat there are too many memi:lers in the !iouse and tilat all we need are thirty-five or tnirty-six good men and wo11111n to run this ?rovi.nce. MR. MR. MR.. Bay On motion, 201-01. carried.

On motion, 201-02-01 and 02-02, ca~ied. CHAI~: SIMMJNS: CHAI~: d'Espoir. (Buttl Shall 201-02-03 carry? Mr. Chairman. The hen. the member for aurgeo - MR. SIMMJNS: Mr. Chairman, I would asswzre that the difference in amount for 201-02-03, Commonwealth Parliamentary Association, llliqilt have related to t.'J.e dut.i.es which our folll!er Speaker (Mr. Ottenheimer) b.~ undertaken with an exacutive qroup of the Parliamentary .>.ssociation. I am wonderinq what the Sl:atus of ::.h.at amount is now, whether that amoum: of :tEJney is needed there anymore?

I am assuming that - perhaps I can get the eye of the former Speaker, the Minister of Justice. The i.nCUIIICent Speaker, tile present Speaker, I. say to tile Minister of Justice, does not automatically succeed to his position with C.P.A. Is that - MR.. OTTEN~MER: MR. SIMMONS: MR. OT'l'ENHEIMER: MR. SL'MJNS ·: Not automatically. lie does not automatically succeed. (Inaudible) resigned (inaudible). he would not. It would be - Oh, you are still in the position? All he would have to do is to be elec:ted. If I resigned it would probably go to another province. MR. OT'I'E.'ffiEIMER: MR.

SIMMONS: Your absenting tile Speakership does not disqualify you. No, that is true. Of course not. Thank you, Mr. Chai:rman. 622

July 24, 1979 Tape 251 P!< - 1 MR. SIMMONS: I am ~lad to hear that I say to Minister of Justice (Dr. J. Collins). MR. CHAIRMAN (MR. BU'rl'l : The Minister of Finance. DR. J. COLLINS: Mr. Chairman, perhaps I might give a furt.'ler amount of clarification on that. Each province is a member of the Commonwealth Parliamentary Association, and each province has a representative there, and that representative to the Parliamentary .\ssoci­ ation itself is usually the Spealcer. It a.lJIIost always is the Speaker. I do not know but it a.lways is the Speaker. For all practical ten~~s, it is. MR.

OTTENHE:rMER: I refuse to comment. DR. J. COLLINS : Now1 the subscription fee for each province is $4,000, a:owever, it was requested by the Co1111110nwealth Parliamentary Association that a once-and-for-all capital fund be set up, that the various Members of the Association contribute an amount to a capital fund, and the interest from that capital fund would be used to undertake certain desira.l:lle activities rel~ted to Parliamentary functions .tbrouqhout the Col!llllonwealth in ensuing years. That fund would always be there and only the interest would be used.

And the amount t.'lat this Province was asked to contribute to that capital fund was S5,400. so that is where the $9,400 comes from. our usual subscription of $4,000 plus a once-and-for-all capital fund contribution of $5,400. MR. CHAIRMAN: MR. OTTENBEIMER: MR. CHAUMAN: MR. OTTENHEIMER: Shall 20l-o3 carry? Mr. Chairman, if I may? Just briefly - The hon. Minister of Justice. This is just in supplement to what the hon. Minister of Finance (Dr. J. Collins! . said. Yes, that additional amount from $3,900 to S6,900 that is a one-shot deal.

It was requested at the Commonwealth Association,as ~'le hon.minister suggested,that a capital fund be set up so that the interest could be used. The essential use of the interest will be in the underdeveloped countries of the Commonwealth to help them in terms of setting up Parliame.'1ts. For example, in a place like Nigeria there will 623

July 24, 1979 Tape 251 PK - 2 Mr. Ottenheimer: be allout twenty state Parliaments '"ithin six or seven months, or at least it is assumed that there will be, and one federal one. And a number oi the ~aerdeve~opea or iess developed or developing, and in some ways perhaps more developed, that is a bit of a prejudical term, but in certain of these countries of the Colllllon-.realt.i. that is what is intended. It is not for the wealthier countries. MR. CHADl.M1IN CBUTrl : Shall 03 carry? On motion 03 carried. On motion 04 and 05 carried. MR. CHAIRMAN: Shall 06 carry? MR.

SIMMONS: The hen. member for Surgeo-Bay d'Espoir. Mr. Chairman, I say eo the Minister of Pinance 1 in the absence of the Government House Leader, I would assume this is not a nominal item as such, because it is $10,000, but it is an item put here without any particular intent on the part of government as to what committees it might be considering to appoint, have the Rouse appoint this yeu. There is no particulu reason is there why it is $10,000 this as opposed to nothing last yeu? It is just a new provision of "the new administration" to make provision for all contingencies. Is that a fair assessment?

Are there any pa:yicular select committees in the wings that we have not heard about? MR. CHAIRMAN: The han. Minister of Finance. DR. J. COLLINS: Mr. Chairman, the hen. member is correct. This is just a preliJIIinary figure, and the amount that will actually be expended will be dependent on the discretion of the Cabinetas to how many committees will be formed. amount to get that Headinq in place. !IIR. S~: A kitty. But this is a preliminary MR. 0Tl'ENREI~3.: There was an amount there last year, lolhatever it was I do not recall, but since none of it •.as spent that is why it shows zero opposite.

There was either SS,OOO or SlO,OOO in there last year. It may have been $10,000. 624

V\J.ly 24, 1979 MR. CHAIBMAN: MR. NEARY: MR. CHAIRMAN~ .MR. NEARY: Tape 251 On 1110tion7 06 carried. Shall 202-0l carry? Mr. Chairman. . ·-------- ·· - '----'- -- PX - 3 The bon. member for La.Poi.le. Mr. Chaiman, I want to have a few wor!3,s here on t.ha Department of the Auditor General, Sir. And I Wa11l.d like to ask the - SOME HON. MEMBERS': Oh, oh! MR. C!!JURMAN: order, pleasel MR.. NEARY: - qentleman if the gavermnent has it in mind to broaden the tezms of reference of the Allditor General so that the Auditor General's Department can aadit aU accounts of not only the Newfoundland Government but of Crown corporations? 625

July 24, 1979 Tape ~o. 252 OW - l MR. S. NEARY: we discovered, l".r. Olai:rman, durinq the linerboard controversy, al.l t..hO! scandals involved wit.'! !.abrador ::.i!:e:::.boardr that the .•.udi t~r General. was never cal.led in, the services of the Audi tcr General. were never availed of to audit - indeed the Auditor General was not allowed to audit the accounts of Labrador Linerboard. Not allowed!

Even though the auditors, the independe:a.t auditors '"he told t!le government and told this House t.'l.at it was i.n;lossible for them to audit the acc:aants of Labrador Linerboard because of insufficient information that -s given to them by the ministers involved ,,that the Auditor General was not even asked to look over the audited repo:t of Peat ,Marwic:k and Mitchell. ~ey were not allowed to do it.

The qove:mment just accepted the fact that Peat, ~arwick could not audit the accounts of Labrador Linerboa.xd and: let it go at that and would not even give the members of the House of Assembly the audited reports until Abitibi came in to take over 'Labrador Linerboard. That is the first time ·we saw the audited reports of t.a.brador LinerboaJ:d in this hen. House. It was the firSt time! And if we did not have a new Premier we miqht not have even seen them then. They were buried down in the Department of Fiaance. And I wrote the Minister of Finance (Dr.

Collins) the other day and asked the hon. gentleman to send me copies of the reports. I have not received the copies yet.I presume the hon. gentleman is qoinq to let me have the audited reports that were done by Peat, Marwick. But I would like to see the Auditor General's department, Sir, allowed to qo into every Crown corporation. Why should they not? The Auditor General is completely independent of politics, completely independent of everybody, the Auditor General is beholding to nobody, answers to nobody but this hon. House .

And that is why I think t..\o)t!' Auditor General should be given the power and the authority to audit all !he accounts of government agencies, crown co~rations and the like. If the Auditor General did that the qove:mment might not run into some of the problems that they have run into with these crown corporations, . especial.ly tr.e Labrador Linerboard one. 626

July 24, 1979 Tape !lo. 252 ow - 2 MR. s • NEARY: Every year we have a report submitted to this House by the Auditor General and in tl1e main that is where a lot of the information comes from that is 'looked into !:ly t:.J.e PUblic ACcounts ~ ttae. And we will get ancther Auditor General's :::eport again this 1ear that will show all kinds ~f d.isc:::epancies and criticism of governml!lnt, and government proc:eddres. But I also bel.ieve , Mr.

Chai:rman, and I bel.ieve they d!O it in Ottawa now 7 that the Auditor General should also be ailowed to comment upon whether or not the expenditure made by government is wise, in many instances, or whether or not it merely constituted ext:avaqance and waste on the part of the administration. I notice the Auditor General of Canada is doing that now and I believe - should ..

If the Auditor General here in this Province does not have the authority I think we should give him the authority to say whether or not - I think everybody in this House will remember the example of the BOnaventure, the spending on re.furbishing the Bonaventure there a few years ago and the criticism· of the Auditor General on that particular project. Wel.l, there ar1! al.l kinds of instances in this Province, Mr.

Chai%llan, where we would wel.come an opinion from the Auditor General of. whether or not a government programme was a good programme or a bad !?roqramme, whether or not the money was wisely spent or whether it was flung away. And I believe the AUdi.tor General should have this lcind of authority and this ltind of power.

Granted, Sir, having said that 1 I :::eal~ that the Auditor General's staff and his department are not big enough at the present time to handle that job.If we allowed and gave the Auditor General the ~r to audit the accounts of crown corporations and govern­ ment aqencies 7 no doubt we would have to give the Auditor General mre staff._ Well, I say to that, 'So what:?' If you are getting an honest decent job done and you are bringing out the trut.~ and 627

July 24, 1979 Tape No. 253 so - l MR. S • NEARY: bringing o~t the facts fer the taxpayers of tiU.s Province, well, why net do it? That is the only way we are c;oinq to qet straiqht,honest,fcrward infcz:mation in this House is have the A~ditor-General qive it to u.s. The Auditor-General, I believe, is th.e only independa.ut servant of this iiou.se. No, there is another one-­ the Olllbudsman.

We have two people who are caaplately independant of politics '\OihQ are servants of this House, there is the provincial OIII:Ndsma.n and th.e Aud.itor-General •• "Ulli I would like to see the Auditor General qiven mere power and I would like for the hen. Minister of Finance (Zlr. J. Col.J.i.Ds) to caument en that because I believe, Sir, that - would qat a better job done. Crown corporations and. canpanias l.ilca Labrador Linerl:loard can slo~gh off, brush aside ind.ependant acco~ntants like Labrador Linerboard <ii<i with Peat,Marwick. They siU.d, "Okay, that is fine. You have done your job.

You have carried out the audit in accordance with generally accepted principles and procedures even thauqh you said you did net have sufficient info:r:mation tD do a proper audit. That is fine. Here is your 1110ney. iiere is your pay cheque. You are on your way. Good-bye a.cd so l,Q:cq. When we need you again we will send fer you." And that is what happened. And that is wnat is ha.ppeninq in a c;ood lllilllY crown corporations and. aqencies. And we can net do ~thinq about it in this iiouse even thouqh we set up - they are creatures of this !louse - the Crown corporations and· tile agencies.

And the Auditor-Ge.llllral is net allowed to qet at the accounts, to qet at the root of their revenue alld expenditure. We set them. up, they qo out ami qat illdependant audits acne, bring their annual. reports into the iiou.se and. we rutlber stamp them.. iiow cra:r.y is the system, Mr. Chai:r:man? It is absolutely crazy • And we should hang our heads in shame for allowing that procedure tc exist as lonq as it has. And we saw ·.rhat happened in the case of Labrador Liner.boa.rd. God only knows, Mr. Chairman. we hear of all the extravagance ami waste in Newfoundland Kydro that are now back 628

July 24, 1979 Tape No. 253 SD - 2 MR. S. ~: lQQkinq for another sixteen or seventeen per cent increase. We can not get at tham. We have never h.ad a proper acc:ouna.nq o~ tile ravem~e ani expellliii;ure~ of li-ioWl<i~.aml Hydro in tl1i.s Hause. I WOilld like to parade the officials i.n here on the floor of this HOilSe so we could cross-examj ne them. And if - can not - ;ui liON. MEMBER: We get the annual report. MR. S. NEARY: Oh, we get the annual report, I said tha.t. ~ little rubber stamp that is all we put on it, a. rWlber stamp.

All of these annual reports that came in here, the hen. gentleman lalows, are all cut and dried. And all the members have to do is just - tlley are are passed Ollt, the ben. gentluuu!. will stand in his pl.ace 1 now in due course, with a nice coloured :book, a. lxlak with a nice coloured cover on it showi:lq, pl:O.bably,on the inside a picture of the president of llewfoundla!Xi aydro, prcbably in colour, and a picture bf the minis.ter with ilis nice curly ha.ir. AN HON. MEMBER: A nice picture. MR. S. NEARY : A nice picture of the little qentlama.n. I was going to say ,.!r.

Cha..izmaa-we have got the new st:yle now, SOME liON. MEMBERS : Oh, oh! MR. S. NEARY : - I am not allgwed to refer to the gentlellliUl a.s the little professor 7 ;a. r.ew style in the Bouse. now, Sir, and I tell you it. is a. job to rutra.in yoursel.f scmetimes. But, Mr. Cha.izman, I will 110t b:l:eak the rules as the ben. gentleman did the other day, started by the hen. qentl&lllall fr0111 St. John's llorth (Mr. J. Carter) • When I brought in a. resolution, Mr. Chai.nlan, to set up a.

Fair Prices Review Council to pl:Otect the consumers against price gouging in tllis P1:0vince by the 1110110polistic capitalists, the h.cn. gentleman from st. John 1 s North a.ccused :ne of being a. communist. SOME BON. MEMBEBS: Oh, oh! 62S

J'!Uy 24 • l979 Tape No. 253 so - 3 MR. CRAIRHA.'t: (Butt) Order, please! I would like to remi;:d tlle han. member for LaPoile (Mr. s. Neary) that he nas one lllinute left. MR. S • NE.A.RY : su. SOHE !ION. MEMBERS : MR. S. NEAR! : My God, there are a~e new rules aqain , Oh, oh! iiowever, Sir, I t:hi.nk I nave made the point. I have made the point and I saw the Minister of Justice (l{r. G. Ottellb.e:i.mer) . sort of !lCddinq his approval. and I saw tha hen. the Premier payi.Dq strict attention to what I '.olilS sayinq.

Thay are qettinq away with too much in these crown cOJ:]j)Orations and qovernmant aqencies, qettinc; a-y with teo much and there is too DWCh covered liP and there is too much axtraqava.nce and waste and. it is t.ime that we let the Awiitor-Gelleral. loose and. his staf£ and let ~ qet into the l:loo.ks aJXi the records of these crown corporations and crown aqenc;ies so thAt we can qet a. proper a.wiit done and a proper acc:ountinq made to this hen. !louse. MR. CHAIRMAN: ShaJ.l. Ol carry? Oh! The hen. !lleJDt)er from aaia 'lerte - White say. MR. T. !UIJEOOT: Mr.

Chairman., : wcnd.er if the llli.nister wishes. to respollli to by coll.eaque before we qo into 630

July 24, 1979 MR. RIDEOUT: them two or three at a timer AN HON. MEMBER: 1-!R. RIDEOUT: Tape No. 254 GH-1 - something else or does he want to handle l Inauai.D.l.e i Bounce them off his chest. Anyway, Mr.

Chairman, I notice in 202 under the ~ead of the Auditor General, that one of the responsibilities of the Auditor General's Department is municipalities, municipal councils, and I want to say a word or two to whatever minister - I know the Auditor General answers to the House - but I want to say a word or two to the minister responsible for this particular part of the estimates and say to him that as far as I am concerned on what I can learn in deaLing with the municipalities in my particular district, that the Auditor General for no reason other than he does not have ~~e staff to do it,cannot do a proper audit of practically any of the municipalities in this Province, and I know that there are dozens of municipalities in my riding that have not been audited by anybody from the Auditor General's Department for the last five, six, seven or ten years, in some cases.

Now, thank God t."'at in most cases, in all cases t.."'at I know of, "'e have representatives of the people in charge of those municipalities who are honest, who are doing the books properly and consequently nothing has gone astray. _fut 1 I do not think we ought to leave that kind of thing to stay as it is. I think that the Auditor General is either going to be provided, Mr. Chairman, with the staff to do a proper audit of every municipality in this Province, maybe not every year but certainly within the term of the particular council, in four years, for example in the AN HON. MEMBER: It is required annually.

MR. RIDEOUT: I know it i:> required annually according to law, but I can tell this Committee that there have been dozens of communities in my district and they have told me,.,hen I have asked them; that they have never seen an auditor from the - AN HON. MEMBER: (Inaudible) 631.

Jul.y 24, 1979 Tape !lo. 254 GH-2 MR. RIDEOUT: - yes, in a second - that they have never seen an aud~tor from the Auditor General's Department in years and fortunately those communities are going along okay. E'ortunately, the books are okay because there are honest people doing that jo.b. And I do not think it is proper, Mr.

Chairman, for new councils being elected every four years, or every two years as in the case of cOliiiiiWlity councils, I do not think it is proper for those people to have to come in and take responsibility for a set of books that have never, in four or five or six or seven years, ~een audited. So, it is one thinq or the other. It is either provide the Auditor General's Department with the sufficient staff so that that can be done properly or, espec~lly in the case of small councils, provide the cODDunity council with sufficient funds so that an auditing firm can be hired.

The larger councils, I am aware, the larger towns may have the financial capability of hiring an auditing firm and having that done on their own, but certainly the small municipalities, the small community councils, just do not have the two or three thousand dollars, whatever it takes, to engage an auditin<r firm.

Many of them, as I am sure Your Honour is aware, operate on budgets of ten or twelve or fifteen thousand dollars a year, so they do not have those kinds of funds, the Auditor General does not have the staff and, consequently, the aud~ting never gets done, and if it does get done, it is sort of in a cursory manner and it is never an indepth audit of the books. So, I would hope that the minister responsible for that particular department would take my, I would hope it is constructive criticism as advice and provide some avenue for ~,e councils in that regard. MR. WDIDSOR: MR. CHli.IRMAN: (Mr. Butt) MR. WINDSOR: Mr.

Chairman. The bon. minister. If I may just respond to that last statement, not only will I take the bon. member's advice, it is good advice ~ut he is a little too late. We have already put in place a mechAn~sm whereby this year,working very closely in co~operation with the Auditor General, I might say, whereby he has now identified to us the municipalities that he will be able to audit this year with his staff. 632

July 24, 1979 Tape No. 254 GH-3 ~-WINDSOR: He has given us a list of the ones that he will be doing and it is not just going here, there and everywhere. It is cei.Dg done on a regio.nal basis so th.i.t. h~ will tAke. a.r.· =ea ar.d he will do all the municipalities in that area, and he will go over here and do another area, and the Northern Peninsula perhaps and do another area and so forth.

The remainder of the municipalities will be done by privata auditing firms with the exception of very, very small communities where I do have the authority to waive an audit in a particular year, provided, however, that I must have one of my tax people ~r, sorry, one of my finance advisors from the Department of Municipal Affairs and Housing go in there and do a thorough investiaation of the books. So, the hon. gentleman is right; in tlw past there have been municipalities that have not had adequate auditing services. We have been concerned about it and I think this new program will take care of it.

However, the cost will have to be come by the municipalities and, in fact, the Auditor General will be revising his rates to reflect the cost to him rather than as previously.It ~s a nominal fee, but now he will be charging basically on a cost re~overy basis. 'Nhat it costs him to do the audit, he will charge back to the municipality. And, of course, on the terms of the private auditors 1 they will charge 633

- - -- ---- - --· July 24, 1979 Tape 255 EC - 1 MR. N. WINDSOR: charge their normal. auditing fees. But basically, every municipality t.'lat needs an audit will be done. MR. STIRLING: MR. ~: (Butt) MR. S'nRLING: Mr. Cb.a.irman. The hon. the member for Sonavista North. Emanating from that question, I take it ttlat is the item that appeU"S in 202-20 where it shews an increase in audit fees of $320,000 from $34,000, which is about a tenfold increase. Ooes that indicate that ttlat is coming !.rem the lllunic:ipalitiesi' Maybe the Minister of Finance can answer that . MR. N. wnrtlSOR: municipal audit fees, no. MR.

RIDEOUT: MR. ~. WINDSOR: MR.. CHAIRMAN: (Butt) OR. J. COLLINS: I am not sure that that item rtoiers to You are not sure (inaudible). I da not think so. The hon. the Minister of Finance. Mr. Cha.iman, it daes, in fact, refer to that. The note I have here from the Auditor General - the Auditor General, as hon. JDallll)ers lalow, is answerable to ttlis House, he is not answerable to any lllinistar.

But he has supplied us with some information for the benefit. of han. members and the information qiven in regard t.o that, which is 202-2o-01 , is to put the audit fees on a more competitive basis with local chartered accounting firms. The .luditor General is aligning his audit fees to all municipalities on a. cost recovery basis to cover all direct costs connected with such audits, and as the subhead there says, this is estimated to come to $320,000. MR. CHAIRMAN: MR. S'nlU.ING: 'the hon. the 1118111Qar for Bonavi:lta North. Thank you, Mr . Cllai%m.an.

My colleague has just qiven me some helpful information and suggests if we are in general debate we da it on the main subh.ead and wait until I get. clcwn th.ere t.o ask specific questions. And. I would like to qo back to· that then in the qeneral debate. Now that I have this information, obviously municipalities last year should not pay back all the things we have referred to earlier, things tha.t we thought they were qoing t.o be able 634

July 24, 1979 Tape 255 IB-2 MR. STIRLING: to pay, you now expect to get paid from IIIUilicipall.ties. A question I should ask is real.ly a two fold question. Have municipalities been told that they are now going to h&V8 to pay competitive au.dit fees, one• And, secondly, will they be given grants to offset that? l~ill we find that so11tewnere else in the budget we have to municipalities an extra S300,000 to look after these unanticipated costs? MR. CRAUMAN (Btl'l'Tl ; The non. Minister o! Municipal. Affai.rs and Housing. MR. N. WINDSOR: the Department of Municipal. Affairs and Housing but it is a vall.d question.

The answer is, as I understand it, no there will not be any grants made available but they are well aware of this. The Federation of Mayors and Municipalities nave been invalved in th.is ~in fact,are welcoming it because they have also expressed concerns that the h.on. gentleman for Baie Verte :tMJ:. Rideout) expressed, that lllunicipalities ~ave not been g:iven proper audits and they are to..tally in support of this new programme. MR. CHAI:RMIIN (!30T'l'l : The hon. IDI!UIIber for Windsor-Buc:hans. MR. FLIGHT: Mr. Chaizman, this co~~~~~ent is directed t.o the Minister of Finance (Dr. Collins).

If I understood him right in answering one o! my co11eaque 's quastions, he indicated that th.e Auditor General is qoing to charge municipalities based on the competitive rates by the other auditing companies in the l'rovince and I think of Doane and others. AN HON. MEMBER: (Inaudible). MR. PLzGHT: Well that is what I understood. MR. !!l. WII'IDSOR: Cost recovery basis. MR.

FLIGHT: The minister indicated and the record will shew that he did -use the words 'cost recovery basis' but he also indicated that the Auditor General's C.epartment would be charging rates that would be comparable to the priwate accounting and auditing fi.rms in this l'rovince. Well, okay, for a. point of clarification t.o the minister, is my

interpretation of what he said fact, that the 635

July 24, 1979 Tape 2'53 IB-3 MR. FLIGHT: rates cl\~d by the Auditor General to raunicipali ~es \ri.ll l:le competitive witb, ~ r"tes beix).q cba.rqeci by the private accc .untinq fiula in the ProVince. ~· lion. Minister of Fu..nc::e. DR. COLLINS: .lfr. Chili.z::llllin, actWllly I am ~ti.nq the report. or the infon~&t:l.cn given to us by the Auciitor General llimsel.f .so I Qan do no II!Dra than that. Ka did llQt say C!Qli!.P&titive, he said mDre c:ompeti tive biiSis. I think th"t the inta~reation would be that the fees would go more towards what is generall.y in effect.

But I de not know i.f they would be identical with it. The weirds used ~re 'ma:re competitive' • :a. Chai.z:man, there is an obvious CCIIIII8nt to t.'l.at. As the Minister of Municipal Af£airs (Mr. N. Windsor) indi.c:ated 7 that up to this point in time in lots of the - 636

July 24, 1979 Tape 256 IB-l MR. FLIGHT• smaller communities who probably could not afford an audit in the first place, if they were forced into a private audit they could not have afforded it, there was a nominal f~e charged :by the Auditor General to do their bocks. Whether they wanted them done or not the auditors walked in did the books and they received a bill for twenty or thirty or fifty dollars, whatever the nominal fee. And one of the rami£ication~ here, as far as I am coru:erned,is that we are heading towards forcing the municipalities.

If the Auditor General is going to charge them rates comparable to the private auditors in this Province, why should the municipalities not go to the private auditing outfits and say, You do our books and the Auditor General will not do them. So we are creating a bit of a gold mine here for the private auditors in the Province.Eecause the minute the Auditor General's charges and rates get competitive with the private operators, with the private accounting fi:z:ms then the municipalities, for no other reason than that 7 why would they bother with the Auditor General's department?

This is going to cost the Department of Municipal A.f.fairs or the town councils monies they cannot afford, Mr. Chairman, and,of courseJat the same time it is going to enrich the coffers of the private auditing people. I think it is a step in the wrong direction,totally. MR. N. WINDSOR: Mr. Chairman, if I could speak for a minute. MR. CHAIRMAN (BUTTl : The hen. Minister of Municipal Affairs and Sousing. MR. N. WINDSOR: What the hen. Minister o~ Finance (Dr.

Collins) said was that the Auditor General was realigning his rates to bring them more in line. !ie is not competing with and he will still be below the private auditing firms. There are a number of municipalities in this Province who have been,for a number of years,getting private auditors;particularly the larger municipalities, have been payi.'lg private auditors to do their audits for them because they give a much more thorough sort of audit.

They give other information, back- up information, that the Auditor General will not provide to the municipalities, very useful information and statistical information that they can use that the Auditor General would not provide in doing 637

July 24, 1979 Tape 256 IB-2 MR. N. WINDSOR: just a straightforward audit. So there are advantages to 1-.aving a private audit firm come in and do a very thorough examination of the books and give advice on the whole accounting and financial system that the municipality has in place. So a number of municipalities have been payinq for it all along.

If we say now that, all right, all municipalities must be audited and the Auditor General will do some at a nominal fee and the rest of them would be done by private auditors, you can see the discrepancy now between a municipality that is being done by a private auditor and one that is being done by the Auditor General. So how do you dete~ne which one will be done at a very low rate and which one will be done at the nonnal. auditinq ratel' So in fairness to both we have tried to balance it out and also to, of course, aid the Auditor General in increasing his staff and to bring more revenue in there.

We have brought that in so that he can-or the Auditor General has increased his rates so that there is a cost recovery there but only a cost recovery, just what it actually costs him for his people to go out there and related expenses, not to compete in any way with private auditing firms. ae will still be •.rell below the cost of a private audit. MR. CHAI:RMAN (BU'l"l'l : The hon. member for Windsor-auchans. MR. FLIGHT: I have a comment, Mr. Chairman. Maybe it is the mistrust, I suppose,in me of some of the public auditing firms or various firms operating in this Province. Mr.

Chairman, we have seen government this past four or five years withdraw services that the general public in this Province had taken for granted. And the way they withdrew them was not a deliberate withdrawal as such and no more service but they brought their rates that they were charging the various sectors of the public into line with the public firms who were rendering the same services and it was a sure way of making sure that some of those companies had access to government money, Mr. Chairman.

Because if a municipality in Newfoundland owes an accounting firm x number of dollars,one ·~y or the other the minister is going to see that he gets it. Either they are going to insist ~~at the town raise the 638

July 24, 1979 Tape 256 IB-3 MR. N. WDIDSOR: liiODey by taxation or the minister is going to make a. grant. And either way what is going to happen, Mr. Chairman, is that the local auditing firms ill this Province are going to end up with ten times more business next year from the municipalities than they had last year. And I think it is a step ill the wrong direction and, Mr.

Chainnan, I do not think that the Auditor General. should be pen~itted by this House to bring the rates that he is going to charge the municipal.ities in line with the private canpanies operating in this Province because it is a sure way for the Auditor GeneralJlike we have seen in other government departments, Mr. Chairman, a. sure way for the Auditor General to get out of any responsibility for auditing municipalities in this Province and it is a. sure way to guarantee tripling the business of the private accounting firms. Mr.

Chairman, if you could take it far enough,there may be vested interests involved here too. so I do not think the Auditor General should be permitted to bring his charges or services that he renders, which this Province is PaYing for anyway, should bring them in line with the private · operators. The greatest benefactor here will be the private operators and not the Auditor General's Department or Municipal Affairs. 639 -

July 24, 1979 Tape NO. 257 OW - l MR. CHAIRMAN: (BU'I"l'l The hon. the minister. I suppose • The hon. gentleman should make up his mind. ThE' hon • member for Baie Verte - White Bay (Mr. Rideout) is saying that all the municipalities should be out of it, the hon. gentleman for Windsor - Buchans (Mr. Flight) is COII'Iplaining now because private auditing firms are going to get business. Of course they are • But if you are gaing to de the audits you have to have the auditors to do it and whether it is done by private firms or the Auditor General it is still going to make business for auditors.

It is as simple as that. MR. STAGG: They are all N-foundlandtirs. MR. CHAIRMMI (Btml : The hen. 1111!11\ber for Baie Verte - White Bay. MR. T. !UDEOU'l': Mr. Chainnan, this is a very important Head when it comes to a nUIIIber of Slllilll colllllllll1ities in this Province and it is unfortUBate that the jurisdiction, I suppose, is sort of divided hera between the Minister of F~ce (Dr. collins) and the Minister of Municipal Affairs (Mr. Windsorl who obviously has an intero!st in what we are talking about here since we are talking about the auditing of IIIW1icipalities.

But this is a very importantHead and I want to make sura that any lingering questions about this Head are cleared up before - give our assent to it. Now I want to say a couple of things to the Minister of MUnidpal Affairs. I am all for the auditing of every municipality in this Province I think it ought to be done. I think it ought to be statutory and 1111U1datory that it be done. Now, having said that let me go on md say that I am very concerned about thetproposed way that this audit is aboutt110 be done under the new arrangements that the minister enunciated a few minutes ago.

Larger municipalities, no doubt some of them having been doing it for years, can afford to pay whatever the going rate by private auditing firms in this 640

----~----- . - - - July 24, 2979 Tape No. 257 OW - 2 ·. MR. T. !UOE011I': Province is, maybe a couple of thousand dollars for an indepth study. I do not think that is unreasonable. Tnat figure, my co.l.l.eague t:el.ls me is what: u .. y have been paying in Burin over the last number of years. So there are,obviously, councils wh.o can afford to pay th.at kind of fiqure. One comes to mind.for example, the community of Ming's Bight. Its total budget I believe, for last year was something like $16,000.

Nov 7 if that commrmity has to have slough.ed off that Sl6 ,000, S2 ,000 for auditing fees then I am sure every member of this House and the hon. minister moat of al~ will be able to understand that it is less qarbage collection or it is less street lights or it is less something.

What I am concerned about is the small municipality, not the larger ones, they can obviously afford to pay for it , but the small , C01IIIIIU:1i ty council~ The coiiiii'Wli ty council on the coast of Labrador, for e:z:aJ~;~le, that would obviously have to have and ought to have, the audit done would be hit with heavy transportation costs even from the Auditor General's department.

So what I am saying to the minister is that I agree four square with having it done but we have to tread awful carefully and make sure that the smaller COIIIIIII:J,nities will not nave,because of the··fact they have to pay this heavy auditing bill, to decrease the service J and in many cases the fundaa.ntal basic services that they are only now rudimentary fashion offering to their people. That is the con::ern I have.

I am all for the proqr- and I am all for the COIIIII!Wli ties paying where they can afford to pay but smaller rura1 7especially iscalated COIIIIIIWlities,could be into a bind here yet they deserve as of right to have · those books audited and they should. so that is the quandary that I see and I again address those concerns to the minister out of qenuine concern. SOME HON. MEMBERS : Hear, near! 641.

JUly 24, 1979 MR. ~: (Butt) MR. N . WINDSOR: Tape No. 257 OW - 3 The hen. the minister. Just to reply very briefly aqain to that. The hen • gentleman 's point is quite valid when he talks about transportation eosu in particular areas. And this is precisely why, in eo-operation •.ri.th the Auditor General, we have identified reqicns so that, for instance, and let us use coastal Labrador just as an example, that an auditor eould go out there to coastal. Labrador and do four or fi'ftl small communities alonq the eoast but it would never be practical for an auditor to leave corner Break for St.

John's or wherever his head office is to qo to that one eoastal conmu.mity in Labrador. The cost of his audit would be 1110re than the whole budqet for the lllllnicipality for the year. ~ other point I would make is that if a municipality is in such desperate · financial position that they cannot ifford the cost of auditinq their books~then I suqqest they are in pretty bad shape that we had ,better have a look at whet.'ler or not they should be incorporated .

But on the other side, we h.ave also advised them in that audits would be done this year, that if there is a qreat hardship there, if they obviously cannot afford it~particularly this year since it is the first year, they h.ave not had a chance to really balance their whole financial position and to qear it up to putting this extra money in there to pay for the audits, that we would have a look at it and in special eases; i.f they can show us very clearly that this cost of an audit is an undue burden, then we eould perhaps make some assistance available by way of a special qrant or what- ever but that would be in exceptional eirc:umstulce.

I do not want to leave the impression that we have a fund available that we will pay part of the costs of these audits or all of the cost. But in exceptional circumstances, perhaps Minq' s BiU is an example_, we eould look at it. MR. CHA!RMAN: The hon. atell'.ber for Bonavista llorth. 642

---- - --· -· . July 24, 1979 Tape r;IO. 257 OW - 4 MR. L. STIRLING: Again this may be out of order, Mr. Chairman, but in keeping with the s~irit that the ~remier mentioned in setting u~ the eommittees, I wonder if it wculd be in order 643

J'ul.y 24, 1979 Tape No. 258 GH-l MR.

STIRLING: since this is the first time that we, certainly on this side.of the House, became aware of the Auditor ~eneral' 3 intention to char;e fees ~'tat, •11!!~~e: th~y 32"e c~~eti ti 'l:t~ or not, anticipate approximately ten times the income of last year, I wonder if the Premier would not consider that in keeping with the spirit, I think indicated by both sides, that audits should be done for the protection of the members of municipalities as much as anybody else, that audits shoul.d be done, but whether or not we should not ask the Premier to consider as part of this fresh look at eve~~ing whether or not this is not honestly something which the Province should consider as an expense to be borne by the Province and all the people of Newfoundland.

That_ regardless of how the audits are done or what fees are charged that they should not be a charge against the municipality, they shoul.d be a charge, in this new fresh look, a charge borne by the Province of Newfoundland and that the Auditor General be reimbursed from another

section rather than attempt to charge it back to these municipalities that cannot afford it. I think we are all in agreement with that if you could consider that kind of concept. MR. CHAIRMAN: MR. E'LIGRT: (Mr. Butt) The hon. member for Windsor-Buchans. Mr. Chairman, I would like to ask the Minister - obviously the Minister of Municipal Affairs and Housing (Mr.

Windsor) is answering most of the questions on this particular Head, but when the decision was made as to what towns would be the responsibility of ·the - ot what sections of the Province would be the responsibility of the Auditor General and which sections would be the responsibility of or be turned over to private,commercial auditing firms, did the minister have any input into that or did the Auditor General have to make th~ recommendation on which this particular advice was based? MR. CHAIRMAN: The hon. the minister. MR. WINDSOR: No, Mr.

Chai:rman, I had no input whatsoever other than I do have to authorize the municipality to hire a particular auditing fi:rm and cbs recommendations came from the Auditor General, then I ~ut my signature and have gone to municipality saying such and such 644

July 24, 1979 Tape l'lo. 258 GH-2 MR. WINDSOR: an auditing firm has been approved, you know, that you have approval to hire this firm to do your audit. I had no input whatsoever it was totally done by the Auditor General and sucaitted to my staff and my deputy minister. MR. CHAIRMAN: (Mr. Butt) MR. BISCOCX: The bon. member for Eagle River. Mr. Chainwl , I would like to ask il question on that. I am rather concerned that you said if the auditor or a company had to go to coastal Labrador it would go not froaa Corner Brook or St. John's to visit one area but four or five.

Then again, if the charter of an airplane comes in or a charter for a boat comes in, the people down North as always are being penalized because of transportation;

whereas St. Thomas or ~aradise or some other area is not, and I believe very, very strongly that this is where the government shoul.d be coming in and picking up this, And, better again, I would like to make the recommendation for all smaller communities,maybe with a budget of $15,000 or Sl6,000,that tbe government would look after the auditing themselves instead of turning around and giving it a competitive basis. MR. CHAIRMAN: The hon. the minister. MR. WINDSOR: Mr. Chairman: to just respond. 'l'he hon. gentleman's point is very valid.

In the case of many of these coastal Labrador communities, you will find that they are, as he said, very small communities. It is very likely that I would use the option of waiving audits in those particular cases, in which case a financial person from the Department of Municipal Affairs and Housing would go in and examine the books, and this is the purpose for which ·~e have recently or are in the process of establishing a regional office for Labrador so we ¥auld have a person situated in Happy Valley-Goose Bay that can look after Labrador only. SOME !iON. MEMBERS : !lear, hear! MR.

CID\IRMAN: !ion. member for Baie Verte-White Bay. 645

July 24, 1979 Tape No. 2.58 Gl!-3 MR. RIDEOO'l': Mr. Chairman, :t just have one fina~ question on thi$, and that is I understco~ the l!linister to say a few minutes &qo .that obviously ~ part of his l!linisterial duties he has the rigb.t and 1llUSt approve an audi tinq firm.

What I am concerned about is, you know, that !llWlicipa..lities a~so have the right to shop around to the various auditinq fizn\8 and look far the best price they can get, that they not be particularly tied down to - I will ~t use any names - any one firm wha,.bec:ause they would have a monopoly situation, then would. be in a position to charqe higher prices than the municipaUty can get elsewhere. There are plenty of excellent, reputable auditing firms around and :r would assume that what the minister means is 646

July 24, 1979 Tape 259 tB-l .MR. "!UDEOCT: that the councils in question could shop around; the one of their :;!lcice "JCU!d. ~ re::o::maended eo t.'le m.i."'lister ar.d !le •.o~CU.ld - sort of automatically, if it is a reputable fi~ at all, approve that re~endation; Alii I understanding the minister conectly? MR. CHAIRMAN (BUTT): 'l'he hen. Minister of Municipal Affairs and Housing. MR. N. WINOSOR: Yes, Mr. ChaiDDan, within certain restrictions as we talked about with transportation.

It would be pointless to appoint one auditing fi~ to go to a particular region to do five municipalities and one other municipality right in between these municipalities request a different auditing firm. In that case we 1o10uld suqgest to the municipality that put in the request that, look this auditor is going to do these five or six municipalities, do you have any strong objections against iti' You know we co-operate with our municipalities. We have had the requests come in for a particular firm and as far as I know they have all been honoured.

I have not been involved in it directly as I said. ! have been basically just rubber stamping the work that has been done between my officials and the municipalities. MR. CHAIRMAN (BU'l'T) : The hon. member for· Baie llerte-whi te Bay. MR. "!UDEOOT: All of us, I am sure, ·4nt to thank the minister for his detailed explanations that he has given us. MR. CHAIRMAN (BUTT) : The hon. member for aonavista North. MR. S'l"'BLLNG: Do t.'ley now have the question answered then?

Would the minister or the Premier, I asked specifically, consider a change of policy or an adjustment in polic<J whereby as part of a concept we agree that audits should be done but that it should not be a charge against the amaller municipalities, it should be a charge against the Province. MR. CHAIRMAN (BUTT): The hon. the minister . .MR. N. WINDSOR: Mr. Chairl!lan, we are always considering any option that is open to us to assist municipalities but I think it is time that municipalities bear some of the cost of operating. I think 647

Jul.y 24, 1979 Tape 259 IB-2 , MR. &. WINDSOR: you will find that the amount of subsidies given municipalities is quite generous and there comes a point in time where you just have to say that you have to accept some of the burden of administering your own municipality. We have various revenue grant systems, road maintenance grant systems, snow remover grants and so forth, recreation grants, any number of other special grants and capital works grants and th