May 21,

HOUSE OF ASSEMBLY PROCEEDINGS

Vol. XLIII No. 11

The House met at 2:00 p.m.

MR. SPEAKER (Snow): Order, please!

Before we get to the routine proceedings of the day I would

like to welcome forty-six students from Dunne Memorial of St. Mary's accompanied

by their teachers Margorie Gibbons and Thelma Stamp.

SOME HON. MEMBERS: Hear, hear!

Statements by Ministers

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

Labour.

MR. K. AYLWARD: Thank you, Mr. Speaker.

I am pleased to inform the House that the minimum wage will

increase in two stages starting on September l, 1996. At that time, Mr. Speaker,

the minimum wage will rise from $4.75 an hour to $5.00 an hour. Subsequently, on

April 1, 1997, the minimum wage will again rise from $5.00 an hour to $5.25.

SOME HON. MEMBERS: Hear, hear!

MR. K. AYLWARD: Mr. Speaker, this two-staged initiative

is an important first step in bringing the Province's minimum wage in line with

the other Atlantic Provinces. At the present time Newfoundland and Labrador has

one of the lowest minimum wage rates of the four Atlantic Provinces, not to

mention the rest of the country. The measures we are taking will change our

status in that regard and bring us much closer to achieving a harmonization of

the minimum wage with the other Atlantic Provinces.

My department made the decision to amend the Labour Relations

Act in consultation with the Labour Standards Board, and only after careful

consideration an analysis of the impacts of such a decision. The minimum wage

has not changed since 1991. This means that in real, 1996, dollars the

purchasing power of people earning minimum wage has actually decreased by 30 per

cent since 1976. Increasing the minimum wage will have a positive impact on the

income and spending powers of people who work in the retail trade, home and

child care, accommodation, food and beverage industries.

Mr. Speaker, I am also pleased to announce that Cabinet has

also approved changes to employment conditions including an expansion to

bereavement leave, additional vacation for employees with long-term attachments

to an employer, and a clarification of the definition of scheduled work.

The government believes that this amendment to the Labour

Standards Act brings with it a renewed sense of optimism for the future and an

opportunity for all workers in the Province to enjoy a better quality of life.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

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

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

We join with the government and applaud the increase in the

minimum wage today and to say that it is timely, not only is it timely, Mr.

Speaker, but long overdue. A member on this side of the House, about a year ago,

introduced a -

AN HON. MEMBER: Last spring.

MR. E. BYRNE: Last spring I believe, as my colleague has

informed me - introduced a Private Member's resolution to debate that very

point, so we applaud the initiative in saying that it is timely and long

overdue. We also, Mr. Speaker, with respect to the changes announced by the

minister to the Labour Standards Act, that while I do not have the specifics, on

the face of it, it sounds very good and I look forward to having a look at the

specifics of what the changes actually entail, doing a careful study of what

impact they will have, and making a further comment on it.

Thank you, Mr. Speaker.

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

Vidi, does he have leave?

AN HON. MEMBER: By leave.

MR. SPEAKER: By leave, the hon. Member for Signal Hill -

Quidi Vidi.

MR. HARRIS: Thank you, Mr. Speaker.

I, of course, would commend any increase in the minimum wage,

however I have to say that the amount -

SOME HON. MEMBERS: Hear, hear!

MR. HARRIS: The amount proposed is grossly inadequate.

The figure of $7.85 was used the other day by the CLC in order to bring the

minimum wage up to what it was in 1975, as the minister points out by talking

about the 30 per cent loss in the purchasing power. Last December, a colleague

on this side of the House, who is no longer here, proposed a one-dollar increase

which was not debated, so it is grossly inadequate but any increase is better

than nothing.

Oral Questions

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

MR. SULLIVAN: Thank you, Mr. Speaker.

My questions are for the Premier.

The government's economic forecast in six of the last seven

years has missed the mark. The Finance Minister told us last Wednesday and on

April 26 that this Budget would accurately reflect revised estimates of the

economic decline, job loss, UI reform, the phase- out of TAGS, an increase

demand for social assistance and other factors.

I ask the Premier, if he has confidence that the projections

in this year's Budget are based on sound analyses that accurately reflect the

Province's situation this year and that compensate for past errors?

MR. SPEAKER: The hon. the Premier.

PREMIER TOBIN: Mr. Speaker, I have great confidence in

the presentation of the Budget by the Minister of Finance and by the officials

of the Department of Finance and Treasury Board. In fact, I don't think I would

go very far astray when I say that there perhaps is no greater and more

confident Minister of Finance in Canada today than the gentleman who sits to my

right in the House of Assembly.

SOME HON. MEMBERS: Hear, hear!

PREMIER TOBIN: Mr. Speaker, I have noticed that the

Institute of Chartered Accountants of Newfoundland and Labrador have issued a

statement on the Budget. The statement says the budgetary problems presented to

government have accumulated from previous years and previous governments

spending habits - that is all governments of all political stripes, I remind the

Leader of the Opposition - `Given the resulting accumulating debt and the

servicing of it, government is acting in a very responsible manner,' said ICON

President Mr. Pelley. That is a pretty good endorsement of the government's

expenditure program.

SOME HON. MEMBERS: Hear, hear!

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

Opposition.

MR. SULLIVAN: Mr. Speaker, I asked if they have

accurately predicted and does he have confidence that they have, he said they

did. I ask the Premier, Stats Canada indicated that there were 11,000 jobs lost

in the first quarter of this year however your government said it is

substantially less, maybe only half that amount. I ask the Premier, what figures

did you consider in your projections and economic forecast for government

revenues, those of Stats Canada or your government figures?

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

MR. DICKS: No, Mr. Speaker, we use our own models which

have proven to be progressively more accurate than the federal numbers. The

statistics that the hon. Leader of the Opposition is referring to, were

statistics that showed in the first three months of this year that there was an

accumulative job loss of 11,000 in the Province, that was year over year, from

March to March, '96 to '95, a loss of between 15,000 and 17,000 positions. We

disagreed with that and said that in our estimate the year over year loss was

about 6,000. If the hon. member had been following the news he would have noted

that recently, when Stats Canada came out with these April figures, it showed in

fact that the year over year losses were 6,000, exactly what this Province

predicted.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: So, Mr. Speaker, we have much greater

confidence in the ability of our economics people to follow the economy and give

accurate projections for Newfoundland. We don't project for Canada. We find our

estimates for Newfoundland are much more reliable than the national ones.

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

Opposition.

MR. SULLIVAN: Thank you, Mr. Speaker. Stats Canada said

the year to year figures were 15,000 not 11,000 and 11,000 is for the first

quarter. They indicated that the April figures are by 5,000. Stats Canada

indicated that they are up by 5,000 in April, not in the first quarter as asked

the minister. So that is not accurate.

This government this year has asked for permission to borrow

up to $30 million as a contingency reserve fund if it deems that borrowing is

necessary, an approach that is most extraordinary if not unprecedented here in

this Province.

I ask the Premier: Does the government have specific reasons

to lack confidence in its budgetary projections by having to put aside a $30

million fund?

MR. SPEAKER: The hon. the Premier.

PREMIER TOBIN: Mr. Speaker, I quite frankly am amazed at

this line of questioning by the Leader of the Opposition. He began his first

question, and the House should note this, by saying that governments - he

conveniently said government, in the last six of the last seven years, has

missed the forecast, and that is correct; but what he could have said is that

governments, almost since Confederation, have spent more in the run of the

fiscal year than had been projected, including all of the Conservative

governments that were in power in this office.

Now, one of the reasons, I think, that so many groups -

business groups, Chambers of Commerce around the Province, indeed, the St.

John's Board of Trade, the Mount Pearl Chamber of Commerce, the Chamber of

Commerce in the City of Corner Brook, other business groups, the Canadian

Manufacturers Association, the Chartered Accountants of Newfoundland and

Labrador - have all endorsed the Budget, is that they see a government laying

its books, fairly, open, on the table, and a government prepared by providing

for a $30 million contingency for the fact that one of two things happens, or

has happened traditionally, to governments: One, revenues come in less than had

been forecasted; and, two, expenditures are higher than had been forecasted; and

the combination of both of those events has led to an adjustment in the Budget

late in the year.

Now, the Leader of the Opposition has been quoted as saying

these kinds of adjustments are destructive and they should not occur, and we

think that if they can be avoided at all they should be avoided. That is why,

bearing in mind what the Leader of the Opposition has said, that traditionally,

governments of all stripes have not kept strictly to the forecast that has been

made, we built in a contingency. That contingency, by the way, will only be

borrowed -only be borrowed, and only be spent, if, indeed, revenues are less

than expected or expenditures are up.

I ask the Leader of the Opposition to bear in mind that we

have 4,500 approximately of the 5,000 employees on the Hibernia site coming off

their jobs before the end of the year. We have 2,700 on the TAGS program, coming

off that program before the end of the year. So, bearing that in mind, the

prudent and responsible thing to do is to acknowledge there is a possibility of

costs being higher than is forecast strictly in the model, and to prepare for

it, and only to spend those dollars, or to borrow them, if that is required.

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

supplementary.

MR. SULLIVAN: Thank you, Mr. Speaker.

That is exactly why we need to look closely at our method of

forecasting. If you are wrong six out of seven years, it is time to change your

method, not put aside a $30 million fund.

Now, if permission is granted, in this Budget, for the

government to borrow the up to $30 million that we referred to, I ask the

Premier: Will he commit to bring before the House of Assembly for everyone to

see, the exact amount of the borrowing and the exact purposes of the

expenditure, and to do so prior to the money being borrowed and spent?

MR. SPEAKER: The hon. the Premier.

PREMIER TOBIN: Mr. Speaker, that is part of the Budget

process, precisely what the Leader of the Opposition is asking for. But I will

go further than that. I will tell the Leader of the Opposition that we will not

borrow the money unless it is first demonstrated that we need the money.

SOME HON. MEMBERS: Hear, hear!

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

Opposition.

MR. SULLIVAN: I asked the Premier, I ask him again, would

he come back to this House - if there is a need to borrow more and there is an

overrun on expenditures or shortfall, will he come back to the House and

specifically indicate where that money is needed and have it debated here in the

House of Assembly?

MR. SPEAKER: The hon. the Premier.

PREMIER TOBIN: Mr. Speaker, I want to say to the Leader

of the Opposition again, and ask him to listen carefully to what I am saying: We

provided for a $30 million contingency in our budgetary planning. We expect,

given the record - by the way, not in the last six of the last seven years, but

the Leader of the Opposition, I know, wants to be fair and open with the people

of the Province. Governments going back to 1949 have missed budget targets and

budget forecasts, and he knows that. Governments in every jurisdiction of

Canada, of every political stripe, have missed budget forecasts, and he knows

that, and we are putting in place a recognition of that reality by building a

contingency.

But I want to say to him, that money won't even be borrowed,

we won't go to the market and raise it, unless we need it. I can assure him I

would be glad to make him, and not only him, the people of the Province, aware

when and if that necessity arises. Unless that necessity arises, we won't even

borrow the money in the first place.

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

Opposition.

MR. SULLIVAN: Thank you, Mr. Speaker. The Premier still

has refused to indicate if he will come back to this House for approval if $30

million, if needed, if expenditures are up. It is neither prudent nor fiscally

responsible to write a series of blank cheques totalling $30 million without

having the details tabled in this House, debated, and voted on. Now, does the

Premier not think it would be far more accountable to take the conventional

course of action by coming to the House of Assembly later in the year with a

detailed supplementary supply bill to seek permission and for the purpose of

borrowing this $30 million?

MR. SPEAKER: The hon. the Premier.

PREMIER TOBIN: Mr. Speaker, I want to assure the member

that there is no Sprung Greenhouse secret planned in the back room that we are

going to spring upon the Legislature later in the year. We have no funny ideas

about huge development projects. I want to say that all that saved the day at

the time was the deft and professional handling by the former minister when he

was brought in to clean up the mess created by the previous administration.

SOME HON. MEMBERS: Hear, hear!

PREMIER TOBIN: The only member on that side of the House

that did not look like he was weaned on a pickle at the time was indeed the

Member for Humber Valley. Mr. Speaker, the answer to the question that the

Leader of the Opposition asked is quite straightforward, there is a Budget

process, and we are in the middle of it now. The Budget has been presented and

there will be a Budget debate. All of these matters will be debated and will be

discussed. With respect to the contingency fund I say to the Leader of the

Opposition that it will not even be activated unless it is clear later in the

year that in fact targets have not been met.

I am prepared to undertake here and now in the name of Budget

transparency that the Minister of Finance, I say to the Leader of the

Opposition, will stand in the House if and when those borrowings become

necessary, indicate that the borrowings are necessary and indicate in detail why

they are necessary.

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

MR. SULLIVAN: Thank you, Mr. Speaker.

That is the question I asked a little while ago. I want the

Premier to clarify this point for the record. The $30 million contingency

reserve as approved in this Budget is the Premier saying that if the budgetary

projections this year are off by up to $30 million there will be no further

program cuts or layoffs this year but that shortfall will come from the

contingency reserve?

MR. SPEAKER: The hon. the Premier.

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

is not seriously interested in debating the Budget. As a matter of fact it is

strange that in the first day the House is back, after the Budget, the Leader of

the Opposition does not want to talk about the Budget. I wonder why? Could it be

because the Health Care Association of Newfoundland and Labrador has said: We

are relieved that the Minister of Health, his officials, and the government in

general, listened to the association, its members, and indeed the public this

past fall when we stated that health care should be a priority and that the

government has acted in that manner to make it a priority? Could it be because

the Newfoundland and Labrador Medical Association has said: During the election

and the pre-Budget consultation process the Newfoundland and Labrador Medical

Association and other health care groups urged government to make health care

top priority, and it appears that is exactly what they have done? Could it be

because health care critics in Western Newfoundland have lauded the Budget?

Could it be because the Chamber of Commerce in Mount Pearl, the Chamber of

Commerce in Corner Brook and the Board of Trade have lauded the Budget? Could it

be because the people of Newfoundland and Labrador have recognized that with a

$290 million deficit this government has brought in a responsible Budget to deal

with our problems at this time? Is that why the Leader of the Opposition is

nit-picking and doing a poor job of it?

SOME HON. MEMBERS: Hear, hear!

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

MR. OTTENHEIMER: Thank you, Mr. Speaker.

My question is for the hon. Minister of Justice. The $3.6

million a year cut in the Province's RCMP funding has cost some thirty highway

patrol positions and five highway patrol units at Marystown, Clarenville,

Gander, Glovertown, and Corner Brook. My question to the minister is, have these

changes already come into effect or are they scheduled for a later date, and if

so, when?

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

MR. DECKER: Mr. Speaker, they have not yet come into

effect. They will be phased in over the next twelve months.

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

supplementary.

MR. OTTENHEIMER: Is the minister concerned that this

future cut in highway patrol service may compromise the safety of the travelling

public, especially now as we begin the busy tourist season and the busy traffic

season?

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

MR. DECKER: At the present time there are forty-three

RCMP officers engaged in the highway patrol. Now, they are not the only police

officers in Newfoundland who will be patrolling traffic. Even up to this time

police officers who are stationed in various detachments around the Province do

take part from time to time in highway patrol. That is quite evident on long

weekends. The hon. member no doubt is aware of the seven casualties which took

place on the highway this past weekend and the 24 of May traditionally has been

the busiest weekend for traffic in the Province. On this weekend, as every other

weekend for the last number of years, members of the highway patrol plus members

from the various detachments have been patrolling the highways to try to stop

speeding.

Am I concerned about the potential of taking off people from

the highway patrol? Of course, I am. I am also concerned that we do not have

enough, even before these cuts, to have maybe, one patrol officer for every

driver. I suppose that's the only absolute way that you could ensure that there

would be no fatalities, no casualties as a result of speeding. What is the right

number, Mr. Speaker? The way you deal with this issue is, the force will take

the number of patrol officers that it has and will deploy them in various parts

of the Province, so a driver never knows from day to day whether there will be a

patrol officer at Point X or Point Z or whatever the case might be. It is

impossible for us to have enough patrol officers, the secret is in deployment

and I have every confidence, Mr. Speaker, that the RCMP is capable of handling

the deployment so that they will be used to the maximum benefit to control the

speed on the highway.

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

a supplementary.

MR. OTTENHEIMER: Thank you, Mr. Speaker.

My question is again to the hon. Minister of Justice and

Attorney General.

The government has replaced mandatory vehicle inspections

with roadside checks by police. Our speed limits only work when there are

sufficient police to provide the deterrent of fast driving. My question, Mr.

Speaker: How can the public feel as safe today, or when the cuts in fact are

introduced, when the police presence on our highways is being significantly

reduced and when drivers know they have less chance than ever of encountering a

police vehicle while on the highway?

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

Attorney General.

MR. DECKER: Mr. Speaker, I think the public is well aware

in this Province that because of the massive debt which has been run up by

previous administrations, especially that administration over there for

seventeen years, the people are aware that we are spending over $500 million a

year in interest, Mr. Speaker, paying off such silly, stupid ideas as Sprung

Green Houses and various contributions -

AN HON. MEMBER: Frank Moores (inaudible).

MR. DECKER: Frank Moores' two explosions on each side of

the Strait of Belle Island, Mr. Speaker, which cost millions of dollars; we are

paying off all those stupid things the previous administration did. If we did

not have to pay off all that, Mr. Speaker, we would be able to provide more

services to the people of the Province which we would like to have. The reality

is, we are in a very difficult situation. We are dealing with very difficult

times and the people of the Province can be confident, that, at no other time in

our history, did we have a more competent administration to deal with all the

issues that the hon. member would want to raise.

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

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

I would like to talk about the Budget as well and my question

is for the Minister of Education.

Can he confirm that as a result of the budgetary cutbacks to

Memorial University, that what students will face in the University will be

increased tuition costs, a possible introduction of differential tuition fees

and also less course offerings? Can the minister confirm that?

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

MR. GRIMES: What I can confirm is that we have had

discussions with the representatives of the University and they have committed

to follow the government's lead in terms of trying to reduce administrative

costs to the greatest extent possible, to reduce staffing costs to the greatest

extent possible and to also have other related expenses such as travel,

telephone, other types of administrative costs reduced to the absolute

bare-bones minimum before they look at increasing fees to students.

However, Mr. Speaker, I think everybody understands that even

with the maximum administrative type of efficiencies attained at the University,

they have put everybody on notice that they do expect that they may have to

increase tuition fees. The amount will be decided by the Board of Regents in the

Senate at their next meetings.

MR. SPEAKER: The hon. the Member for Kilbride, on a

supplementary.

MR. E. BYRNE: Mr. Speaker, I can't believe what I have

just heard today.

The reality is, because of the budgetary cuts this year and

because of the ones we have seen over the last five years, that there will be an

increase in tuition fees, that you will see a differential fee increase

introduced, and that students who are now, Mr. Speaker, in programs of study in

their third and fourth years may not find the courses they need to graduate in

the manner and time they thought they would.

Let me ask the minister this: Is he not concerned that the

continued assault on Memorial University's budget, and the deterioration of the

only people in this Province who will be able to attain a university degree will

be those who can afford it? Is he not concerned that that is what is happening

in this Province today?

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

MR. GRIMES: Thank you, Mr. Speaker.

That is clearly not what is happening in the Province today.

There is no assault on Memorial University, or the college system, or the school

system. There is a fair distribution of the resources of the Province and the

government through the taxation process of grants and aid to the post-secondary

institutions, including Memorial.

The news that everyone should continue to understand is that

at the present time tuition fees at Memorial University, for example, are the

lowest in Atlantic Canada, lower than anywhere in Ontario. There are some

universities in Quebec that charge a lower fee for other reasons unique to the

Province of Quebec, and they are still lower than in Western Canada, and lower

than almost everywhere in the country except a few universities in British

Columbia of which everybody understands. The British Columbia Government, in a

completely different financial circumstance from that of this Province, has

decided to put some additional resources into post-secondary education in some

of the universities.

So the tuition fees stay the lowest in the country, and the

only thing that restricts students and potential students from registering at

Memorial University is if they do not meet the 70 per cent average that is

required to be considered as a candidate for courses of study at the university.

We do understand that the tuition fees likely may increase,

and if there is an increase it will be decided by the university at their next

meeting and will be announced in time for students to try to make adjustments to

it, but it would be incorrect to describe any of the actions of the government

as an assault on the university. There has been no assault; we will still have

the lowest priced tuition in Memorial University in St. John's, Newfoundland,

and in Corner Brook, and in Labrador West, in the first university courses of

anywhere in the country, with a couple of understandable and notable exceptions.

Differential fees that the hon. member asked about are an

issue that has nothing to do with the Budget but are being debated across the

country generally as to whether or not you should charge the same tuition for

the programs and the courses in an arts degree as are charged in an engineering

degree or in medical school and so on. That has nothing to do with the Budget;

it is an ongoing debate in the country with respect to tuition fees and

differential rates, and has nothing at all to do with this Budget.

MR. SPEAKER: The hon. the Member for Kilbride on a

supplementary.

MR. E. BYRNE: Mr. Speaker, I don't know what province the

Minister of Education has been living in, or where he has been, but in the last

five years tuition has increased in this Province to post-secondary students by

140 per cent; the debt load on students has almost doubled, and in some cases

tripled, and yet he can stand up calmly in the House and say that there is no

assault on post-secondary education or the university. It is downright shameful.

Let me ask the minister this: Will he commit to the House

today that he will, with me and a delegation from this House, sit down with

Memorial University, hear their concerns, and bring back to Cabinet a plan that

will see the proposed cuts to the university axed, and levels of funding that

were previously in last year's Budget be reintroduced so that all people who

that today, Mr. Speaker?

SOME HON. MEMBERS: Hear, hear!

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

MR. GRIMES: Thank you, Mr. Speaker.

We have had the discussion with the university and the good

news from Memorial, despite the fact that their grant and aid is being reduced,

is that they asked for and received consideration from this government for a

three-year planning cycle so that they would not have to take drastic impacts

with respect to students and/or course offerings and programming in any one

year.

What we have now is the fact that we still maintain, after

this Budget and throughout the next couple of years, the best educational value

in the country at Memorial University. We will continue to have the lowest - the

lowest - tuition fees, 15 per cent lower on average than anywhere else in

Atlantic Canada, where many of our students go voluntarily and agree to pay 15

per cent more, 5 per cent lower than the universities in Ontario where some of

our students go voluntarily, 8.5 per cent lower on average than the whole

country, and it will continue to be lower even after any increases that Memorial

University intends to apply as a result of the latest budgetary reduction.

So, Memorial University have indicated to us that while they

would like to have no decrease in grant and aid, they appreciate the fact that

they have been given a three-year planning cycle, and that they will, through

administrative efficiencies and by following the lead of the government, make

all kinds of administrative reductions first, and to leave any kind of

programming and tuition increases until a last resort. That is the commitment

they have given the government, Mr. Speaker, that is the commitment they have

given the students of the Province, and that will leave us with the lowest

tuition in the country.

MR. SPEAKER: Order, please!

The hon. the Member for Bonavista South.

MR. FITZGERALD: Thank you, Mr. Speaker.

My question is to the Minister of Environment and Labour.

Exactly 27,959 Newfoundlanders qualified for income support through the TAGS

program and were guaranteed to remain on that program for two years. On May 11,

the federal Liberal Government kicked 1,684 Newfoundlanders off this program.

Will the minister inform the House if his government has a plan to help those

thousands of fishermen and fish plant workers as they continue to be dropped off

the income support program from now until 1999 or until the moratorium is

lifted?

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

Labour.

MR. K. AYLWARD: Mr. Speaker, I am going to defer the

question to the Minister of Development and Rural Renewal who is responsible for

the employment

section of the portfolio. Thank you.

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

Rural Renewal.

SOME HON. MEMBERS: Hear, hear!

MS FOOTE: Thank you.

Mr. Speaker, this government is well aware of the numbers

that are coming off TAGS, and yes, it is a concern for us just as it is for

anyone on the other side of the House. Sixty per cent of those exiting off the

TAGS program in May of 1996, in this month in fact, had some earned income in

1995, thereby mitigating the effects of coming off TAGS. I do know that

altogether we have about 2,700 coming off in this month. Yes we are concerned,

but it is not only people coming off TAGS who are having difficult times in this

Province. We are going to have to have a look closely at what is happening with

anybody who is being impacted by unemployment, and particularly those coming off

TAGS.

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

Bonavista South.

MR. FITZGERALD: Would the minister inform the House as to

how many displaced fishermen and plant workers have received mobility assistance

and have moved out of this Province to other provinces within the past year?

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

Rural Renewal.

MS FOOTE: Mr. Speaker, that is not a number that I have,

but I will take it under advisement to get that information for the member.

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

Bonavista South.

MR. FITZGERALD: Thank you, Mr. Speaker.

It is common knowledge that the TAGS program is in big

financial trouble, and it comes as no surprise since this particular program was

underfunded right from the beginning. I am certain the minister is monitoring

this program very carefully with her cousin in Ottawa, Mr. Young. Can the

minister assure the fishermen and fish plant workers of this Province that they

will continue to receive moratorium funding, and for the full amount, and for

the full period specified as projected in their notice of qualification?

MR. SPEAKER: The hon. the Premier.

PREMIER TOBIN: Mr. Speaker, in fact, the minister and I

were in Ottawa as recently as last week, and together we met with the Minister

of Human Resources Development to raise these very points and to press upon the

the level of financial assistance now being made available to people on TAGS. In

income level of those who are receiving TAGS in this Province, as was planned

through to the end, even if it means making other adjustments.

I want to say to the member that we on this side of the House

have - and I should point out, not just in the last few weeks, but members on

this side of the House have for years fought very hard to ensure that assistance

is continued for fishermen and for plant workers who have been displaced from

their way of life and from their work because of the mismanagement by the

Federal Government of the fishery. The Federal Government has the exclusive

jurisdiction for the fishery. The Federal Government and the Federal Government

alone, sets the harvest quotas, TACS, the Federal Government and the Federal

Government alone, licenses fishermen, and the Federal Government and the Federal

Government alone, insofar as harvest is concerned, has to take responsibility.

That is why the current Federal Government brought in a

program called TAGS which the members opposite will recall replaced a program

called NCARP. When the NCARP funding ran out, the previous government - you will

recall this very well I know - refused to give a commitment of an extension of

NCARP or the introduction of a new program. It was the previous Liberal

government that said if they were elected they would bring in a new five year

program and indeed they did at a cost of $2 billion and I know the member

opposite wants to recognize that as well with his questions today.

MR. SPEAKER: Question Period has ended.

Order, please!

Question Period has ended.

Presenting Reports by

Standing and Special Committees

MR. SPEAKER: The hon. the Minister of Mines and Energy.

DR. GIBBONS: Mr. Speaker, I am pleased today to table the

annual report for 1995 for the Newfoundland and Labrador Hydro Group of

Companies. In tabling this report I would like to note a couple of points of

interest;

(1) In 1995 a new record was set in total energy sales on the total

interconnected systems that is in Newfoundland and Labrador of 6,420 gigawatt

hours of electricity. On the island interconnected system the gross energy

production for all of Hydros generating stations was 6,036 gigawatt hours. This

was an increase of 2.3 per cent above 1994. Just to make clear to those who

believe otherwise, that there was an increase in production and sale of

electricity last year.

MR. SPEAKER: The hon. the Minister of Government Services

and Lands.

MR. McLEAN: Mr. Speaker, as directed by

Section 56.1 of

the Automobile Insurance Act, I table the annual report of the Board of

Commissioners of Public Utilities on the operations carried out under the

Automobile Insurance Act for the period April 1, 1995 to March 31, 1996.

Notices of Motion

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

MR. E. BYRNE: Thank you, Mr. Speaker. I rise today that

on tomorrow I will ask leave to introduce the following Private Members'

Resolution;

WHEREAS ensuring ready access to high quality post-secondary

education is crucial in developing a productive workforce and building a vibrant

economy; and

WHEREAS the provincial government after having reduced

Memorial Universities operating budget in real terms by substantial amounts in

recent years as announced in this years Budget that the universities total grant

will be reduced by a further $8.1 million in 1996-97 by a further $3 million in

'97-'98 and another $3 million in '98-'99; and

WHEREAS these deep cuts, coupled with rising costs, will

oblige the University to consider such significant measures as further tuition

fee increases, program cuts and course offering reductions; and

WHEREAS the elimination of first year university courses, in

perspective students, especially those living in rural areas; and

WHEREAS higher tuition fees will further discourage and in

many cases prevent perspective students from attending university unless they

are otherwise wealthy; and

WHEREAS a decrease in university programs and course

offerings could place new obstacles before students seeking to graduate, could

force some to endure the extra costs and other difficulties associated with

going to institutions outside this province and could undermine the quality of

university programs and its good reputation.

BE IT THEREFORE RESOLVED that this House urge the provincial

government to guarantee the operating grant for Memorial University will not be

less than its 1995-96 level in 1996-97, 1997-98 and 1998-99. Seconded by the

Member for Baie Verte.

Petitions

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

MR. SHELLEY: Thank you very much, Mr. Speaker.

I rise today to present the first of many petitions which I

intend to bring before this House over the next few days and weeks, as long as

the House stays in session. I will read the petition first of all.

The petition of the undersigned residents of the Province of

Newfoundland and Labrador, known as the 'Fighting Newfoundlanders', ask for the

House of Assembly to accept the following prayer; We the undersigned residents

of Newfoundland and Labrador do hereby petition the Government of Newfoundland

and Labrador to support our petition to do one of the following; (

a) open a food

and recreational fishery to all Newfoundland families or (

b) close a food and

recreational fishery to all other Canadians.

Mr. Speaker, as we all know, as of right now, and over the

last few weeks and months, there is a group that have organized themselves known

as the 'Fighting Newfoundlanders' who want to pay special attention to these

particular issues and apparently other issues as they come up around the

Province but this one in particular with the food fishery.

Mr. Speaker, all of us in this Province, and, I am sure many

members of this House have enjoyed being able to go out in Newfoundland waters

and jig a fish to eat - for recreational purposes and just simply to be able to

jig a fish to eat.

It has been a tradition in Newfoundland for years and years

and years, and I am always reminded of the quick story, of seeing a black and

white clip one time, of a man who said he would not vote for Confederation back

in 1949 because he was afraid he would see a day when, in this Province, you

could not go out and jig a fish to eat. Maybe that Newfoundlander, at that time

back in 1949, really did know what he was talking about. Maybe he really did

know what he was talking about.

There are many people around this Province today, as we hear

reports over and over of a man who has gone out to jig - the last time I heard

of a man who had nine codfish in his boat, he was arrested, was charged a $2,000

fine, and lost his boat for jigging nine codfish.

Ever since the first experimental food fishery of some two

years ago now, many people in this Province have decided that law is one that

they will not abide by. Now, we don't support anybody who decides to break the

law, but we have to consider why these people, these Newfoundlanders - 'Fighting

Newfoundlanders', as they call themselves - have decided to break the law. Why

have they decided to go out against the rules of this Province and jig a fish to

eat? I guess the first reason you can say is that they feel they have the right

and the tradition and a privilege in this Province to be able to do that.

The first experimental fishery, of course, some of the

arguments used by the now Premier, then fisheries minister in Ottawa who made

that decision, was that first of all there were low catches. Well, everybody

knows that when the experimental food fishery was opened, many people in this

Province, doctors, lawyers, business people and so on, went out in their boats

and decided to try to catch a few fish to eat, for the recreation sake of it. Of

course, the argument was used by the then Minister of Fisheries that, of course,

they are such small catches and there is no cod.

The first thing a fisherman will tell you is that you can go

out in a boat all day long, and if you don't know the berths, if you don't know

the fishing grounds, you can go out in a boat for two or three weeks on end and

never catch a fish; so that argument doesn't wash with the fishermen. Fishermen

say that people went out in their boats for two weeks and didn't catch a fish -

those were the reports that were coming back when the experimental food fishery

was open - but the fact is that the people who were fishing did not know where

to go to fish.

Now, there are all kinds of reports that there are many fish

in the bays in Newfoundland and Labrador, and that is not comparable to the

offshore amounts of fish - that is why the moratorium was brought into place -

but fishermen from all around this Newfoundland Island today, and up and down

the Coast of Labrador, will tell you, and I am sure that the Minister of

Fisheries has heard it over and over, that there are many bays in this Province

that are full of codfish.

Mr. Speaker, there has not been significant strong evidence

that there is a difference in the bay stock and the offshore stock of cod, and

there certainly hasn't been a lot of scientific research that supports that

there is lots of fish off Nova Scotia and Prince Edward Island but there is not

enough off Newfoundland, and that is the strongest point that these people in

this particular petition - and I will have many chances to get up again on

petitions on this, and make different points - but it is one of the strongest

objections they have, that you can go to Nova Scotia, Prince Edward Island,

Quebec, and New Brunswick, and fish cod for your ten fish, but you cannot do it

in Newfoundland. For them to think that you can go to Prince Edward Island on a

holiday and you are allowed to go out, as a Newfoundlander, or from any part of

this country, you can go out in a boat in Prince Edward Island and jig your ten

fish.

MR. SPEAKER: Order, please!

The hon. member's time is up.

MR. SHELLEY: Mr. Speaker, could I just have a minute to

clue up?

MR. SPEAKER: Does the hon. member have leave?

SOME HON. MEMBERS: Yes, by leave.

MR. SPEAKER: By leave.

MR. SHELLEY: Thank you, Mr. Speaker, and I thank the

member.

I would just like to clue up by saying this is the first in a

long line of petitions that I plan to bring forward to this House on this

particular issue, and I will be able to make a lot of points on it because there

are a lot of points that can be made in support of this petition, and I support

a food fishery for Newfoundland and Labrador.

Thank you, Mr. Speaker.

MR. SPEAKER: The hon. the Member for Bonavista South.

MR. FITZGERALD: Thank you, Mr. Speaker. I stand today to

support the petition as put forward by my colleague, the Member for Baie Verte -

White Bay.

All of us went around here a couple of months ago knocking on

doors and talking to our constituents, and I am certain that the members on the

opposite side heard the same stories that I heard, especially members who

represent coastal communities and coastal districts. One of the things that came

through loud and clear on a lot of doors that I knocked on is: Where are we

living? I thought we were living in Newfoundland, a place where we could enjoy

going out and jigging a codfish, cutting a bit of firewood, going in the woods

and extracting some timber to build our houses.

Mr. Speaker, they were things that we prided ourselves on as

Newfoundlanders. We built some sweat equity into everything that we did and it

made us proud. That is why I suppose today that many of us can never leave this

Province and be happy. Everybody who I know of is just waiting for a trip back

to our Province again because they have always been able to enjoy such a thing

as going out cod fishing.

The federal government in its wisdom when it brought about

the moratorium saw fit after a couple of years into the moratorium to do away

with the recreation or the food fishery, as we know it. The amount of cod that

was caught in a food fishery when it was last open was estimated to be

approximately 2,000 tons. An amount of cod, 2,000 tons, represents probably the

same amount that we take today in the by-catches of other fisheries in our

Province. You talk to fishermen around the coastal area who go out and take

part

in the lobster fishery or take

part in other pelagic fisheries and they will

tell you that the cod stocks in the bays can certainly support a food fishery.

It has been pretty well unheard of up until now to go out and pull lobster pots

and to find them instead of full of lobster full of codfish. That is a very

common sight.

It was only the other day in fact that I had to call on

behalf of a constituent of mine who wasn't allowed to put out a black-back net

in order to catch bait for his lobster pots. The reason he couldn't put out the

net is not because he didn't have a licence or he didn't have a permit; it was

because the by-catches of codfish were too high. Here we are today denying

Newfoundlanders, our common people out there, going out and jigging a codfish

for food purposes.

They are not looking to go out and set fishing gear, they

aren't talking about putting out gill nets, they aren't talking about cod traps.

They are talking about putting a hook and line over the side of a boat and

taking ashore a meal of codfish to put food on the table to help support their

family. Always part of our diet, always part of our culture, to be able to go

out and do that. I suppose what flies in the face of Newfoundlanders is the fact

that up in the Straits of Belle Isle they can look out and see the lights of

other boats from other provinces there doing things that they aren't allowed to

do, being punished because we happen to belong and live in this Province of

Newfoundland. It is a shame that those people are denied that opportunity.

What a perfect sentinel fishery. Right now we are having

people in other bays go out and set gill nets and take

part in a sentinel

fishery. What a perfect way to find out how much cod is really out there, by

letting people who know the grounds, who know where the berths of fishermen, be

able to go out and jig a fish or catch a fish. Because I think we should do away

with the jigger, I think we should do away with that as well. You catch a fish

by hook and line and if it is small then we can let it go and swim away and it

will survive. We all know what happens when you catch one with the jigger. For

the most

part it will float to the top and a gull will take it and that is the

end of it. I think that we should do away with the jigger and I think we should

allow the hook and line fishery to continue and to allow people to go out and

take

part in a food fishery that they have always been able to enjoy.

What a shame when you hear people working with CN Marine

saying that they go up to Nova Scotia to join the boat and they go up a couple

of days in advance before they are supposed to go to work so that they can go

out and jig a bit of fish for the winter. Not allowed to do it from their own

hometown here in Newfoundland but have to go to another province in order to jig

a fish. I'm not convinced for one moment that the same fish that swims Bonavista

Bay may not end up over in the Gulf of St. Lawrence. Fish swim and I don't think

they are very particular as to which bay they go in or how far they have to go

in search of food. I suppose the same is true for us people as Newfoundlanders.

When you look at the amount of fish that is being caught

today in herring and gill nets and the like you will find I believe that we can

support a food fishery. I think we owe it to every Newfoundlander to be able to

go out and take

part in such a fishery and to be able to do -

MR. SPEAKER: Order, please!

The hon. member's time is up.

MR. FITZGERALD: - what he has always been able to do and

that is, put food on the table.

Thank you very much.

MR. SPEAKER: The hon. the Member for Waterford Valley, on

a petition.

MR. H. HODDER: Thank you very much, Mr. Speaker.

It is my pleasure today to rise and present a petition on

behalf of some of the residents in my district, Waterford Valley, who have been

listening to the debate on the application for increases from Newfoundland

Hydro, and these residents of my district have asked me if I would present their

viewpoints to the Legislature.

Now, Mr. Speaker, we have had a lot of debate on this

particular issue and considering the comments of the minister, I didn't take

great comfort however, from the fact that he has said that his government is not

going to take a direct position. However, I do compliment him for standing in

the House and commenting on it.

Mr. Speaker, my concern today arises from the Budget

documents that were tabled a few days ago, and as the minister is fully aware,

the consolidated fund services are a part of the Budget in the guarantee fees

there in item 1.3.01, there is a revenue indicated of $19,396,300 and of course,

we know that that is really coming from Newfoundland Hydro. In addition, in

section 2.2.01 in the Department of Finance estimates, there is here from Crown

Agencies - Recovery of $31,800,000 making a total of about $51,296,000 that

would be recovered. Mr. Speaker, our concern is that that is approximately $19

million to $20 million more than last year's fees, and we don't take a great

deal of comfort from a half a comment made by the Minister of Finance and

Treasury Board in the Budget that this shouldn't cause any impact on the

application for fee increases being made by Newfoundland Hydro.

Mr. Speaker, when we look at the application that has been

made by Newfoundland Power, we know that they have to get the money somewhere,

and to find that the Province is taking an extra $20 million approximately out

of the system, and then to hear the minister say: well, it should not have any

impact, we are asking ourselves: where is that $20 million going to come from,

and the fear of the consumers in this Province is that that will come from them

through increases and through the regular, you know, system of applications and

responses that will come from the Public Utilities Board.

Now, Mr. Speaker, the concern that people have is that this

particular corporation, and we are talking about Newfoundland Power, had a

profit last year of $27.8 million so, Mr. Speaker, they are not exactly poor,

and we are not saying that there shouldn't be adequate return on investors

investments, but we are saying that we have to look at the people who have the

biggest investment. The people who have the biggest investment are the people of

Newfoundland and Labrador.

Now, Mr. Speaker, we want to make it clear, we on this side

of the House believe that we have to give a strong voice to the Public Utilities

Board to say that we do not want to see the residents in any part of

Newfoundland, particularly those people who have limited incomes, the people who

are on pensions, and I remind the Government House Leader that the people of

this Province who are on government pensions have not had an increase since

1989, therefore many of them find themselves on very limited incomes. There are

people who are dependent on social services for their income, and, Mr. Speaker,

these people will be severely stressed if we are going to have increases in

their cost of electricity; and of course, we are reminded as well, that many of

the people in this Province were encouraged by Newfoundland Power to reduce

their consumption and now they are told that if you reduce your consumption, we

are going to increase your rate, therefore they are in a no win situation.

Mr. Speaker, our fear is that we are going to be penalizing

the poorest people in the Province, the people who cannot afford, the people who

struggle from week to week, and month to month to make ends meet. We have had

the Minister of Social Services say: do not come to us if you consume more

electricity than we are going to be paying for under our allocations.

MR. SPEAKER: Order, please!

The hon. member's time is up.

MR. H. HODDER: By leave, Mr. Speaker.

MR. SPEAKER: Does the hon. member have leave?

SOME HON. MEMBERS: Agreed.

MR. SPEAKER: By leave.

MR. H. HODDER: We have had the various ministers say that

this Budget is a firm, solid document. We have documentation that says the

Minister of Social Services has been very, very firm when she said that her

department is not going to be giving any extra money for people who happen to

consume more electricity than they would normally have budgeted for.

So, with that kind of policy we are afraid that this

government is going to be condoning the increases that have been asked for by

Newfoundland Power, and if they get those increases they are not going to give

the kind of support to the most needy people, namely, those on fixed incomes by

way of pensions, or those who are on incomes offered by the Department of Social

Services by way of various subsidies.

Mr. Speaker, we ask the government to listen to the people of

Newfoundland and Labrador. We also say to the minister that maybe he would like

to rise in his turn and explain how come we can have a $19 million increase in

revenues to government but we have not had any real clear statement as to the

impact of that on Newfoundland Power's balance sheet and where that money is

going to come from.

Thank you very much, Mr. Speaker.

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

MR. OSBORNE: Thank you, Mr. Speaker.

I stand in support of this petition today for a number of

reasons. Just to start, I spoke today to a woman from my district who is on a

fixed income. She has a food budget of $51 every two weeks after her other

expenses are paid, and with an increase in power utility rates this $51 - her

food budget would be even less. It is people like this, people on fixed incomes,

who are going to suffer as a result of power increase rates.

When a public utility makes almost $30 million a year, and

they look for a further rate of return on their investment, I find that

appalling in this type of economy. With the economy in the position it is in

right now, I think that public utility boards, as well as other large

corporations, should also be trimming as opposed to passing it on to the

consumer. There are several facets of the economy today, especially as I

mentioned, people on fixed incomes, who just cannot afford to pay a higher

utility bill. I feel that members in the House of Assembly should oppose any

increase in power utility rates by Newfoundland Power. I feel that the Public

Utilities Board should also oppose any increase in rates by Newfoundland Power.

As a matter of fact, I feel, that if public utilities boards

have such a huge profit that we should look at the percentage of rate of return

on their investment, and there should be a ceiling. Once you get up to 8 per

cent, 9 per cent, or 10 per cent, they should not be allowed to seek a rate

increase on their investment. So I ask the members of the House of Assembly to

give serious consideration, and to please oppose any increase in power rates by

Newfoundland Power.

Thank you, Mr. Speaker.

MR. SPEAKER: The hon. the Member for Bonavista South.

MR. FITZGERALD: Thank you, Mr. Speaker.

I rise today to present a petition presented by residents of

the town of Elliston and the town of Bonavista. This petition to the House of

Assembly reads: To the hon. the House of Assembly of Newfoundland in legislative

session convened, the petition of the undersigned residents of Newfoundland and

Labrador - and I won't read all the whereases, Mr. Speaker -

WHEREFORE your petitioners humbly pray that your hon. House

may be pleased to request the Government of Newfoundland and Labrador to do

whatever is required to prevent an increase in Newfoundland power electricity

rates.

Mr. Speaker, time after time we have heard members from this

side of the House get up and present on behalf of their constituents, petitions

that have been provided to them. It is not a situation where members went out

knocking on doors looking to get signatures on petitions. The big concern that

is out there in rural areas of Newfoundland today where you have unemployment

levels in some communities, I would suggest, probably as high as 80 per cent and

85 per cent. Those of us who are fortunate enough to have a job, Mr. Speaker, in

most cases are living on fixed incomes and I talk of the many seniors out there

and the people who are there today either on TAGS moratorium or social services.

When we look at the rate increase in the minimum wage that

was put forward by the Minister of Environment and Labour today - and it was

certainly a step in the right direction - if you look at twenty-five cents an

hour, forty hours a week, Mr. Speaker, I guess that translates into about $10 an

hour, $40 a month. If you look at what the average electricity bill is in rural

Newfoundland and Labrador, especially when you consider the type of housing that

is in some of those areas - many, many houses are older houses without the

proper insulation, proper windows, proper doors, etcetera - you will find that

their electricity rate, in many cases, with the hike that this utility is

looking for, will increase by about $56, $60, $65 a month. So the increase in

the minimum wage, Mr. Speaker, will not even be enough to offset the cost of the

increase in this one particular bill alone.

Mr. Speaker, a $28 million profit I think is a tidy sum for

any company to make in view of the economy we live in today, especially here in

Newfoundland. I don't doubt for one minute, Mr. Speaker, I don't think for one

minute that this utility will have any problem raising money for new investment

or to continue with the status quo in their business.

If you look at the cost this utility still passes on to

consumers, Mr. Speaker, it is actually frightening. Not only do we have a

utility here that is providing a service, a monopoly in the Province of

Newfoundland and Labrador, but in most cases, if we want to access power when we

live in, not a remote area but an area that is probably just a little bit

removed from the general population, it is not uncommon for this same utility to

come forward and charge you $300 and $400 for each pole that they have to erect,

the cost of labour for stringing wires, the cost of wire and everything else.

Not only do they charge just one person but if there are three or four people

living there, Mr. Speaker, the same cost has to be absorbed by all.

I remember an industry down in my district, a very viable

industry, a lumber company that started up and employs fifteen to twenty people.

At the time that they started in this particular area - that they thought was a

viable place to set up business - there was only single phase power there.

AN HON. MEMBER: (Inaudible).

MR. FITZGERALD: Jamestown Lumber, I say to the minister.

He is quite familiar with it, we looked at it the other day. Mr. Speaker, in

this particular area, they had to take power and put another line down, put some

hardware on poles and take another line down to supply this particular sawmill

with three phase power in order to make it viable and in order to be able to use

electric motors to plane lumber and saw lumber, etcetera. That particular

company had to go out and sell shares and raise thousands and thousands of

dollars in order to pay for that extra line going down to service their mill.

They did not get any breaks on their hydro bill, I can assure you. They still

had to pay for the full amount of power they were using. In fact, they had to

pay a demand charge. Even in times when the mill was shut down, their

electricity bill was still very, very high because the company's argument was

that they had to supply power once during the year and they wanted somebody to

compensate them for the remainder of the year in order to make it viable. So it

is not a situation where you go and pay your utility bill and that is the end of

it. Many, many times you will find -

MR. SPEAKER: Order, please!

The hon. member's time is up.

MR. FITZGERALD: Okay. Many, many times, Mr. Speaker, you

will find that not only do you have to pay your utility bill but you also have

to come forward and pay the cost of doing business with the company as well.

Thank you.

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

MR. OTTENHEIMER: Thank you, Mr. Speaker.

It is with pleasure that I support the petition that has been

brought forward by my colleague, the hon. the Member for Bonavista South. Again,

this is a very pressing issue which is facing Newfoundlanders and Labradorians.

We have seen since commencement date of these proceedings here in the House that

it has been indeed an issue that has been on the agenda and has been the subject

matter of many a petition.

I am pleased to state, as the member of the House of Assembly

for the District of St. John's East, that I will be presenting in due course

petitions with approximately 1,500 names of residents of the District of St.

John's East who have voluntarily and freely signed a similarly worded petition

with respect to their opposition to the proposed rate increases being requested

by Newfoundland Power.

It is fair to say, in supporting this petition we feel that

this company, having made some $27.8 million in profit last year, is clearly not

in need of extra funding. This is an issue that we obviously oppose, and the

people of this Province have spoken, when we look at the various numbers of

petitions and the various numbers of individuals who have signed these petitions

over the past recent weeks and months.

A Consumer Advocate has been appointed by this government,

and it is the job of this Consumer Advocate to represent the public with respect

to points of interest and points of concern during the public proceedings before

the Public Utilities Board. We will recall, a while ago in this very House it

was passed by the members on the opposite side that resources would be put in

place to allow the office of the Consumer Advocate - resources and personnel and

funding would be made available to the office of the Consumer Advocate so that

he could do an efficient and effective job in patrolling the issues and concerns

with respect to this application on behalf of the public and on behalf of the

people of the Province of Newfoundland and Labrador.

My question that I raise at this time is: What funds have

been provided by members opposite, what resources have been provided by members

opposite, what personnel have been provided by members opposite, to allow the

office of the Consumer Advocate to do his job effectively and appropriately in

carrying out his office before the Public Utilities Board of this Province? It

would be interesting to note what additional resources, personnel and funding,

etcetera, have in fact been made available to allow this person to do his job.

I have no difficulty with it whatsoever, and as indicated

earlier it is indeed with pleasure that I support the petition brought forward

by my colleague, the Member for Bonavista South. We will very shortly, certainly

on this side of the House, be presenting many more petitions signed by many more

Newfoundlanders and Labradorians who equally oppose the rate increase as being

proposed by Newfoundland Power. In due course, it will be shown before this

House that such petitions will be brought forward in great numbers.

Thank you, Mr. Speaker.

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

MR. E. BYRNE: Mr. Speaker, I also stand today to present

a petition dealing with the proposed rate increase of Newfoundland Light and

Power: To the hon. House of Assembly of Newfoundland in legislative session

convened, the petition of the undersigned residents of Newfoundland and Labrador

that:

WHEREAS not having had a rate increase since 1992 is no

justification for a rate increase in 1996 - and many others, Mr. Speaker. I

won't belabour the point because I've presented petitions on this matter before

and will continue to do so.

They say: WHEREFORE your petitioners humbly pray that your

hon. House may be pleased to request the Government of Newfoundland and Labrador

to do whatever is required to prevent an increase in Newfoundland Power

electricity rates, and, as in duty bound, your petitioners will ever pray.

Back in March, Mr. Speaker, when the House first opened after

the election, we debated this in a private member's resolution. It was amended

by the House and agreed upon by all members of the House, and then the petition

was passed unanimously. But while we were debating a proposed rate increase by

Newfoundland Light and Power of 4.5 per cent, the government of the day was

behind the door cooking up a deal that would see the GST and PST harmonized.

Now, the impact upon electricity rates is clear. As a result of that deal,

people in this Province, all of us as consumers, will see our electricity rates

increase by 8 per cent. That does not include the possible increase that the

Public Utilities Board will give or will grant Newfoundland Light and Power. As

a result, we could see an increase of power rates in this Province to the tune

of 10 per cent to 11 per cent. Frankly, Mr. Speaker, I find that unacceptable,

and I believe, too, that the people of this Province find that unacceptable.

Government have just presented a Budget. They have outlined

where and why they made certain cuts; they have gone at length to determine

that. That is what government has to do, and they have done it in their Budget,

but government also has the power to exempt basic commodities such as

electricity or home fuel from the GST, PST harmonization, and it has to be done.

Nobody, especially those who can ill afford it, those who are on social

assistance, those who are on fixed incomes such as seniors, single parents,

mostly, a fact of our society, are women; these are the people who are going to

be hit the hardest.

Last week when I presented this petition, the Minister of

Mines and Energy responded to it and floated out the argument that as a result

of the GST, PST harmonization, all of us, as taxpayers, are going to pay less,

and he was right to one degree. He was right in terms of what is normally

covered under GST and PST now, but what he failed to say is that the tax base

will be broadened on other goods and services such as electricity rates, such as

home heating fuel rates.

Mr. Speaker, government has the opportunity before it to say,

with respect to the GST, PST harmonization, that it will exempt electricity

rates from the GST, PST harmonization, thereby, not passing on to consumers,

indirectly, a 10 per cent to 11 per cent increase in a basic necessity and a

commodity that we all use. That is the reality of it.

Government also has the opportunity to demonstrate clearly to

the people of the Province that they see this increase in electricity rates

unacceptable as well. The House Leader has the opportunity to stand and do it -

AN HON. MEMBER: Does he want it written down, put it

(inaudible) or what?

MR. E. BYRNE: That is exactly what I am looking for, now

that he mentions it. Would the Government House Leader -

AN HON. MEMBER: (Inaudible).

MR. E. BYRNE: No, no; what we are talking about now is

not the projected rate increase from the Public Utilities Board. You have

provided the resources to the Consumer Advocate; we will let that arm's length

board do its work. Nobody, including this member, would like to interfere with

that process; but, what I am saying that I would like printed and put in big

letters by the government is that the harmonization of GST and PST does not

include, or will not be extended to a basic commodity such as electrical rates,

and that the 8 per cent increase that will cause -

MR. SPEAKER: Order, please!

The hon. member's time is up.

MR. E. BYRNE: By leave, Mr. Speaker, just to clue up?

MR. SPEAKER: Does the hon. member have leave?

SOME HON. MEMBERS: Agreed.

MR. SPEAKER: By leave.

MR. E. BYRNE: That, as a result of harmonization, an

agreement between the Federal and Provincial Governments -

AN HON. MEMBER: (Inaudible).

MR. E. BYRNE: No, that is not true. The Vice-President of

Newfoundland Light and Power was on, saying clearly that it would not. You can

float all of that out.

AN HON. MEMBER: (Inaudible).

MR. SPEAKER: Order, please!

MR. E. BYRNE: The member can float all of that out if he

wishes, but he knows clearly, as all members of this House know clearly, that as

a result of harmonization electrical power rates will increase between 7.7 per

cent and 8 per cent; and if the Public Utilities Board gives or grants

Newfoundland Power the 2.9 per cent increase that they are looking for, we are

up around 10.8 per cent to 10.9 per cent. Those are the facts of the matter. We

can debate them all we want. Government has the power to exempt it, and I am

asking them today to do it.

Thank you very much.

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

MR. H. HODDER: Thank you, Mr. Speaker.

I just want to rise for a moment to support my colleague, the

Member for the District of Kilbride, and to ask the government if they would

begin to listen attentively to the pleas of the petitioners who have been asking

this House for weeks and weeks on end, to pay attention to what is being said.

Now, Mr. Speaker, what people are concerned about is the

impact on their personal lives. They are concerned about their ability to be

able to live a decent life. They are concerned about their ability to be able to

provide food, clothing and shelter for their children. And they look upon this

particular application before the Public Utilities Board as being a way in

which, probably the system is going to cause them economic hardship.

Now, Mr. Speaker, what we have before the House day after day

and petition after petition, and week after week if necessary, we have a

responsibility on this side, to put before this House the plea and the prayers

of the people of Newfoundland and Labrador. I would encourage all members

opposite whom I know are getting petitions just the same way as we are, but they

are not allowed to stand in their places and offer petitions to this House. We

rarely, rarely, rarely see a member on the government side rise and present a

petition.

Mr. Speaker, that must be so because there has to be a

concerted effort on behalf of the governing party opposite to say, no, when you

get your petitions, don't present them; please, please don't do that, we do not

want to have petitions coming forward that might be critical of the government

stand.

Mr. Speaker, we know that there are petitions over there

because people have told us on this side that they have presented those

petitions. They have said: We have asked the member to stand in his place or the

lady member to stand in her place and to put those prayers before the House of

Assembly. What we have responsibility to do on this side is to make sure, for

the people of Newfoundland and Labrador, that their voices are heard clearly in

the House, and on this issue, there has rarely been such an endorsement of a

petition as there is to this one which is circulated throughout Newfoundland and

Labrador. The number of petitioners by this time must be into the thousands,

into tens of thousands.

AN HON. MEMBER: Pardon?

AN HON. MEMBER: (Inaudible) whatever comes (inaudible).

AN HON. MEMBER: You will sign?

MR. H. HODDER: Mr. Speaker, I say to the hon. member

opposite, I am pleased to hear him say, he supports the plea of the petition. I

invite him to stand in his place and to say on behalf of the people of Terra

Nova that he supports this petition, but I have not seen the member yet stand in

his place. So I am inviting the member and all members opposite who have a

concern for those people who cannot pay, those people who are on fixed incomes,

those people who are living on minimum wages, although it has gone up now from

$4.75 to $5.00, they are still going to have great hardship. I want to say on

behalf of those people who are the working poor in Newfoundland and Labrador,

who go month to month and week to week and year to year living on very, very

minimal amounts of income, these people have fear put into their hearts when

they see these applications before the Public Utilities Board.

I say to the Government House Leader, it is for him to stand

up on behalf of his constituents, to represent them, and for him to say to his

Cabinet colleagues: no way can we ever, ever let this kind of increase be passed

or be accepted by the government if it should indeed result in that

recommendation from the Public Utilities Board.

So, Mr. Speaker, I say to all members of the House, start

listening to the people. We talked about consultation on the Budget. Mr.

Speaker, what more consultation can you have than tens of thousands of

petitioners - what more consultation can you have than that? Week after week and

day after day people are saying: Hear our voices, listen to our pleas and harken

unto what we want you to do for us, but we don't hear that coming from members

opposite.

I don't see members rising up in their places and saying: I

want to speak up on behalf of my constituents on this particular application; I

haven't seen one person yet stand up and say, We have heard the pleas.

I say, Mr. Speaker, to all members opposite, when you are

talking about this application rise in your place and represent your

constituents. That is what you are here for, that is why you got elected, that

is why you knocked on the doors in February, that is why you had all this cold

and bitterness and wind in your face and you said to these people at their

doorways, I want to represent you. Now is the time to put your comments at the

doors in action. Stand in your place, do your job, that is what you were elected

to do. And when you go back to the people they might even be willing to say that

you have done a good job, if you stand up for them. What we have seen in the

last little while here is day after day nobody on the government side can

(inaudible).

MR. SPEAKER: Order, please!

The hon. member's time is up.

MR. H. HODDER: Thank you very much, Mr. Speaker.

Orders of the Day

AN HON. MEMBER: Motion 1, Mr. Speaker.

On motion, that the House resolve itself into Committee of

the Whole on Ways and Means to consider the Raising of Supply to be granted to

Her Majesty.

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

MR. SULLIVAN: Thank you, Mr. Speaker.

I have been waiting so long here to get an opportunity - I

even had a petition, too, but I said I would leave that until tomorrow.

I am disappointed that the Minister of Finance is not here,

we are dealing with the Budget Debate. I certainly had numerous things that I

would like to direct the minister's way and hopefully have some answers to

particular questions or comments.

I asked questions in Question Period today with reference to

our economic forecast. In six of the last seven years, in our economic forecast,

we have missed our projections.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Yes, regardless of whether it is

twenty-three or thirty-three, if we missed our projections in six out of seven

or nineteen out of twenty, there is something wrong and we have to readjust. And

we have to take the realistic approach, not the most optimistic approach. I

don't care if Brian Peckford did it or whether it was Premier Wells, whoever did

it, it is not right. There is something wrong when we keep missing our

projections.

I would like to look at the contingency fund. The Premier

said this morning he has every confidence that the projections are right. The

question I asked was: If you have every confidence, why do you need a

contingency fund? That is because you may be off in your projections. Now, 1994

was the only year - and we had tremendous growth in 1994. We had an increase

with employment at Hibernia -

MR. TULK: (Inaudible) about three-quarters of 1 per cent,

seven-eights of 1 per cent will throw you off $30 million.

MR. SULLIVAN: I am not talking about budgetary

projections, Government House Leader, I am talking about economic forecast, the

indicators out there today, GDP, I am talking about the retail trade, I am

talking about the personal income of people, those are the economic forecasters

that I am talking about.

When you look at the forecasters for the economy, when you

look at GDP growth, when you look at the growth in retail sales and personal

income, they affect the bottom line of revenues in our Province. I am not

talking about missing your budgetary projections; I am talking about the

economic indicators. If your housing is down, if the GDP is down, personal

income is down, retail sales are down, your government revenues and income tax,

retail sales tax and other factors are going to be down. If we miss our

projections on economic growth, we are going to miss our projections on income

into our Province, and that is where we are going wrong. We are taking the most

optimistic forecast in terms of economic growth in this Province. That is what

we have been doing. We have been looking at variations and have been overly

optimistic as to how the economy was going to perform in six of the last seven

years.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Yes, that is correct, six of the last seven

years.

MR. TULK: (Inaudible).

MR. SULLIVAN: We will know this next year, I say to the

Government House Leader, next year we will know whether those forecasts were

right. I am going on past performance, what is factual. What you have indicated

and what this Budget has indicated is that we are going to see a decline of

minus 4.3 per cent in GDP this year compared to last year. If it comes out to be

minus 5 per cent or minus 6 per cent, it is a wrong estimate. Only once in seven

years have you hit the target and that was in 1994, due to unexpected and

tremendous growth, mostly stemming from the increase in employment at Hibernia.

That is basically where it came from. How can you consider those figures and

look at an optimistic forecast? My concern is that our decline in the economy

this year -

AN HON. MEMBER: Do you think we are right?

MR. SULLIVAN: I think you could be wrong, and I am going

to state that now.

MR. TULK: You have all the figures. Are we right or

wrong?

MR. SULLIVAN: You were wrong six of the last seven and

who knows if you are going to be right or wrong until it happens.

MR. TULK: Go on the record now. Are we right or wrong

this year, yes, or no?

MR. SULLIVAN: Give me time, I say to the Government House

Leader. I say to the Government House Leader, on your projected growth in the

economy, I think you have taken the optimistic side.

SOME HON. MEMBERS: Oh, oh!

MR. SULLIVAN: I think it is, yes.

AN HON. MEMBER: You hope it is.

MR. SULLIVAN: No, I think it is. Some economists are

predicting that we could have a 5 per cent decline in economic growth in this

Province over the next year. I say to hon. members, when you look at a

contraction of 4.3 per cent in the economy that is a depression proportion, not

a recession, and when government is admitting it is minus 4.3, we will never

know. I say to the Government House Leader, next year when we file our GDP, and

what it was, it will not be accurate. That will be adjusted the year after as

other indicators and factors get reported. They are always adjusted for years

after in what the real figure is. That is traditional.

I have the adjustments for the last several years, when they

were made and at what points. In fact, we are only now getting the accurate ones

from 1992, because each year as we find out the performance of the economy based

on factors, it starts to factor in on what the real one is, and as we find out

these, government are getting more and more off in their projections when we

start getting the real figures.

So, I say to hon. members, that is the concern. If we cannot

accurately forecast - and we are not doing it - we are not forecasting our

revenues, how much income tax we are going to collect, because we are assuming

there is more growth and more jobs in the economy.

Now, I will just point out a figure in real jobs in the

economy. In the projections here The Economy 1996 tabled with the Budget,

they are indicating that employment in this Province is going to go down by 9000

people this year. Now, if employment goes down by 9000, which people do you

think are most likely to leave this Province and look for work? People who have

been on social assistance for two or three years and cannot get out of it, or

people who have been used to working, have been in the work force and do not

want to go to a sustained level of a lower family income. They cannot cope with

it because they have debt commitments. They are more likely to leave this

Province, thus increasing the problem, because in most of the things the Federal

Government is doing today, the population component, and our equalization is

going to be affected. We have less equalization.

Also, under the new strategy with Canada Health and Social

Transfer, they are now basing it 50 per cent on population and 50 per cent on

need. It used to be need based but now we are finding it is population based,

and as our population goes down we will get less money in the future. And that

is going to cause a very serious problem here, I say to members, in our economy.

We are not in, in years three and four, for good years. We are in for a rough

period of time in our economy and the projections that people are talking is not

just two years. And I will point out to hon. members some of the areas where I

see concerns that we have to address, which are not being addressed. I will do

that in due course here today, hopefully.

Also, the workforce in this Province is after shrinking. Just

in this past year we have a shrinking in the workforce from 241,000, the labour

force, to 233,000. In other words, our labour force is shrinking. It is going to

shrink this year by 8000 people. In other words, 8000 people are going to give

up looking for work and are going to be pulled out of statistics in the

workforce. Now, that causes a very big concern, and that is why I question the

unemployment numbers that are here.

We are told that the unemployment rate is going to get worse,

that it is going to go from 18.3 per cent to 19.4 per cent, only 1 per cent

worse when you consider that we have 5 per cent fewer people going to be working

and we have a labour force that is 3.7 per cent smaller. When you look at these

figures and do your comparisons, I have concerns that our unemployment rate - I

would be surprised if it does not exceed the 20-some per cent total, one of the

highest unemployment rates that we have ever witnessed and unprecedented in

other provinces in this country.

We have Saskatchewan with an unemployment rate down to about

5 per cent. Here in this Province - and I say it again for that minister, I said

if you look at The Economy on page 74 you will see that -

AN HON. MEMBER: Page 74.

MR. SULLIVAN: Page 74 in The Economy . If you just

look at the figure there, the labour force, down the column, our labour force is

going to decline from 241,000 to 233,000. In other words, we are going to lose

8,000 people from our workforce, who are going to leave the workforce. Maybe

some may leave the Province or whatever, or stay in the Province and have to

depend on either UI initially, and eventually find another job, or join the

social assistance lines. There is a certain percentage that does. You look at

the next line of how many are going to be employed. It is going to go down from

197,000 to 188,000. We are losing 9,000 people less going to be working in the

Province this year than last.

When you look at the unemployment rate it is only going to

change about 1 per cent. I'm indicating that the unemployment rate normally for

those changes would increase by more than 1 per cent because when you factor - a

lot of the unemployment decline you can see is going to come from major lay

offs. Just take Hibernia, phased down over the next year; high paid jobs are

going to be lost. There is a greater chance that people out-migrating are going

to be people who have been in the workforce, who have lost their jobs, had debt

payments, and are more inclined to depend upon (inaudible) source of income,

rather than somebody who may have had to depend on social assistance for the

last three years.

So we are going to have an out-migration I'm indicating that

is going to impact on two major aspects of revenues into this Province. Here is

how it is going to significantly impact, and I'm sure the Minister of ITT can

confirm it. Number one, equalization. We are going to be affected because our

population - equalization is population-based also. There are thirty-three

factors that affect equalization but population base is one. Number two, another

point that has happened this year for the first time, and that is a big concern,

is that with the elimination of EPF - Established Programme Financing - and CAP

we are moving into the Canada Health and Social Transfer that is going to be

roughly 50 per cent population-based now and 50 per cent need, as opposed to an

entire needs-based area.

That is going to have tremendous impact. In fact it is going

to pull out of our economy directly. Direct payments to this Province are going

to go down from last year of $427 million under CAP and EPF, in this year's

Budget it is down to $340 million, this year's Budget, $341 million this Budget

calls for. Next year if you look at it, it is going down to $281 million.

Another $60 million we have to find. Those figures, for anybody who wants to

look, are there in your Budget. It is going down another $60 million next year.

We are not in for a rosy time ahead. We can talk about

Voisey's Bay and what you will. We are not going to have economic prosperity at

the end of two years in this Province. We are going to have more pain. We are

shifting the debt from today to the future again. It is unfortunate now the

Minister of Finance and Treasury Board isn't here, but I will just point out -

MR. SPEAKER: Order, please!

I will remind the hon. Leader of the Opposition that it is

unparliamentary - and I refer to Beauchesne 481 (c). It is unparliamentary for

any member to "refer to the presence or absence of specific Members."

MR. SULLIVAN: Thank you, Mr. Speaker. It is unfortunate

the member I would like to refer to is absent because we are dealing with the

Budget debate here. The absent-minded member, or the absent member, who I would

like to refer to by his position - maybe, Mr. Speaker, I will refer to him as

the absent minister then.

AN HON. MEMBER: No, (inaudible).

MR. SULLIVAN: Oh, I can't say absent minister. Well, I

just said it, and, Mr. Speaker, I don't think Beauchesne could raise nay point

on that.

I have to say to somebody here, because the minister is not

here. I will say it for the record. When you look at -

AN HON. MEMBER: Only the junior ministers (inaudible).

MR. SULLIVAN: Pretty desperate now. The Canada Health and

Social Transfer is going to take $61 million less next year. We have a

structural deficit. We had one of $90 million last year. We still have an $87

million structural deficit. It is still there. Which means before we even start

next year we have to find $87 million in a structural deficit. Forty-two million

of that is allocated to an advanced borrowing this year of $42 million under

Term 29, and we also have $45 million coming in increased borrowing requirements

in order to balance the Budget; so we have an $87 million structural deficit

existing here in this Province and we are passing the burden of debt from today

onto the future.

Now, I would like to get back to The Economy , since

the Government House Leader was so engrossed and so interested. We are going to

have in this Province, a decline in retail trade this year of 4.7 per cent,

statistics that you would associate with a depression and the long-term

prognosis and plan of this government to deal with those projections in the

future is lacking; it is just not here.

Housing declined last year; there were 531 less housing

starts. That is one of the indicators of activity and growth in the economy and

spin-off jobs, people buying houses, more work for people in lending

institutions, more work for carpenters and plumbers and electricians, and all of

these people have extra work associated with housing starts. It is a very

positive sign when we see housing starts on an increase. Last year we had a

decline down to some of the lowest levels we have seen in years.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: No, I pointed out things we can do to

address it, and in due course you will see these. On housing starts, your

government is predicting this year that housing starts are going to decline even

further; they are going to go down another couple of hundred - another 137, to

be exact, from the projections here, if we can take that as being factual. In

the past we have not, but we will take it with some particular degree of

accuracy. So, they are predicting a drastic decline in the housing market, a

drastic decline in GDP, a drastic decline in the workforce, a drastic decline in

jobs, and overall with the measures that we have taken we are exactly in the

same position that we were this time last year before the Budget with structural

deficit. We still have an $87 million debt, structural deficit, compared to a

$90 million. We have no addressed it. We have borrowed from the future. There is

going to be a price to pay if the future is not as rosy as you are telling us it

is going to be, and I have every reason to indicate it is not going to be as

rosy as you think it is going to be.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: I will get to that in a minute.

The public sector debt has increased since 1989 by 42.11 per

cent. It has increased from an amount, and I will give that to the minister in

due course; it has increased from a total in 1989, the public sector debt, the

total public sector debt, when you factor in the debt for Crown corporations,

and then you deduct the sinking funds and so on, when you look at the bottom

total public sector debt, in 1989 it was $4.845 billion. Today our public sector

debt is up to $6.885 million, a 42.11 per cent increase in public sector debt.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: I went back and checked the public sector

debt from the Budget - it usually goes back about four years - then I used the

previous issue and went back for another four years and went back to 1989.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Yes, I know, but I also went back further

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: No, the total debt of this Province was

$4.8 billion. Refinanced and all, the total debt that we had with Crown

corporations in this Province in 1989 was $4.8 billion.

AN HON. MEMBER: (Inaudible) 42 per cent?

MR. SULLIVAN: I am saying it is a 42.11 per cent increase

based on your figures that you provided since 1989.

AN HON. MEMBER: It went up 100 per cent (inaudible).

MR. SULLIVAN: No, what happened, some of that is

attributed to and granted -

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: No, I will say to the minister, much -

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Basically what happened over all, I looked

at it right back to 1960, and right back to 1960 - the debt in 1962, for example

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: No, I don't have it at my fingertips.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: No. I was just going to mention to the

minister, while in dollars at that time, here is where the problem started I say

to the Minister of Industry, Trade and Technology. In 1962, for example -

MR. FUREY: (Inaudible).

MR. SULLIVAN: No, I went back to each year as Budgets and

researched them. I don't know what Jack's leader said -

MR. FUREY: Jack's leader said he (inaudible).

MR. SULLIVAN: I am not sure what advice Jack has for him

today, but it is a lot different from the advice that his former leader used to

give to him when he was their leader, I can tell you. Actually, in the early

1960s, 1962 I think it was, there was an over expense running at 38 per cent

more spent by Mr. Smallwood than he took in, in revenues.

Now we got ourselves into a cycle of high expenditures even

though in today's dollars they were not highly significant but when you get into

a commitment, some of this is a longer-term commitment and we built in to the

situation while the 42.11 per cent today may not be in extra expenditures; a lot

of it is in interest accumulating on that debt that we are using from our

revenues to meet that debt, that is why the debt is climbing because we are not

reducing it. We have never really reduced the debt. This year, what, $3.7

million dollars, we reduced it by not significant on 6.8 so we have never really

reduced the debt. We have never reduced the debt.

AN HON. MEMBER: It is the best Budget you have seen since

(inaudible).

MR. SULLIVAN: I have seen only about four and I am not

any more impressed I can assure you, I say to the minister. The Budget, several

things -

AN HON. MEMBER: Make up your mind, Loyola.

MR. SULLIVAN: Oh, I am coming to it and hopefully before

the day is out, if not before Thursday, if not before Friday. I am just

disappointed that somebody is absent who could be here and I could ask a few

questions. Whoever that absent person is -

AN HON. MEMBER: Are you good for the rest of the sitting?

MR. SULLIVAN: Oh I might be here for a month. Don't I

have unlimited time?

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: I thought I had unlimited time; I am only

getting started I say to the Government House Leader, go out and take a nap.

AN HON. MEMBER: Those are only the introductory notes.

MR. SULLIVAN: I haven't even got to any notes yet, I say

to the Opposition House Leader; I have not begun.

I would like to go to the absent minister's comments when he

read the Budget here last Thursday - now there is more than one minister absent

so I am not talking about -

MR. TULK: (Inaudible) we have been listening with bated

breath?

MR. SPEAKER: Order, please! Order, please!

I remind the hon. Leader of the Opposition that there are in

fact more than one minister absent but there is only one minister who read the

Budget Speech.

MR. SULLIVAN: I didn't use it in that context, Mr.

Speaker, but I am speaking to all absent ministers, not talking about them, just

indicating to them so they can be passed on by their colleagues here in the

House that - I will quote a Budget Speech; it is written, who ever read it we

will leave to the imagination: it said: The mine smelter and refinery will be

built in this Province. Maybe the Minister of Mines and Energy - is there a

commitment on a refinery? I was not sure if there was, I am serious, I am not

just - is there, in writing, a commitment on a refinery to be built in this - We

know a mine and a smelter are going to be obviously there but, is there a

written commitment on a refinery?

DR. GIBBONS: If there is no refinery there will be no

mine.

MR. SULLIVAN: But is there a written commitment on a

refinery, I ask the minister?

DR. GIBBONS: I don't know.

MR. SULLIVAN: The Minister of Mines and Energy doesn't

know if there is going to be one. Well, how do we expect the people of

Newfoundland and Labrador -

AN HON. MEMBER: There is going to be one.

MR. SULLIVAN: Pardon?

DR. GIBBONS: (Inaudible).

MR. SULLIVAN: But is there a written agreement? Ontario

has legislation that says there is going to be a refinery and where is their

nickel being refined?... in Norway. They have legislation.

DR. GIBBONS: It will be done.

MR. SULLIVAN: Bring in legislation, bring it in. Is the

minister going to bring in legislation to insure we have a refinery? You have so

much confidence in the word of Inco that has a budget and expenditures bigger

than this Provinces', so much confidence in it that you do not need legislation?

DR. GIBBONS: We have the legislation, we passed it last

(inaudible).

MR. SULLIVAN: To say that there must be a refinery?

DR. GIBBONS: Any further processing.

MR. SULLIVAN: What bill is that in?

DR. GIBBONS: One that we did last fall -

MR. SULLIVAN: So it is already in legislation that we are

going to have a refinery?

DR. GIBBONS: (Inaudible).

MR. SULLIVAN: I know you said we didn't need it at that

time and now you said it is there.

DR. GIBBONS: We passed it last fall to say that any

further processing has to be done in this Province and (inaudible).

MR. SULLIVAN: Does refinery come under that definition?

DR. GIBBONS: That is right.

MR. SULLIVAN: So, we have legislation that states it must

be refined in this Province?

AN HON. MEMBER: If economically feasible.

MR. SULLIVAN: If economically feasible or it must be

done.

DR. GIBBONS: (Inaudible).

MR. SULLIVAN: If economically feasible. So it isn't an

unconditional refining of ore in this Province. So in other words we are right

back to square one. Ontario has it specifically in its legislation and it is

being refined in Norway.

DR. GIBBONS: There is no question. You aren't familiar

with the Ontario legislation in that case.

MR. SULLIVAN: Maybe I'm not. It is only what I read about

it. The minister is not familiar with our legislation; if we didn't have one two

minutes ago and two minutes later we have it.

DR. GIBBONS: We passed it. I passed it.

MR. SULLIVAN: Yes.

DR. GIBBONS: Amendment to the mineral act.

MR. SULLIVAN: Who did you pass it to? I say to the

minister, you didn't pass it to us.

DR. GIBBONS: Last December (inaudible).

MR. SULLIVAN: I made reference a few minutes ago, and the

minister stated in this book, Budget 1996 , that we had a $90 million

structural deficit here in this Province leading into this year and they had to

take corrective action of course to do something about that. The corrective

action we have seen is an improvement of $3 million in the structural deficit.

We now have a structural deficit of $87 million, a 3 per cent improvement in the

structural deficit. It still leaves a substantial amount of money.

Another issue I would like to talk about here in the Budget,

and I made some brief reference to it, is the Canada Health and Social Transfer.

I've taken a look at projections under the Canada Health and Social Transfer for

the next several years. Last year, and the Budget figures show that, under

Established Programme Financing and under CAP - that is the social service

payments - we received $427 million into this Province. This year we are only

getting $340 million. We have lost $85 million, $86 million this year because of

legislation that went through the House of Commons which the Premier of this

Province in his place supported and he was a part of cutbacks of $85 million to

$86 million to this Province because of the Canada Health and Social Transfer,

as the minister representing our best interests; and allowed the Government of

Canada to base those payments for health, post-secondary education and social

assistance upon the population of a province rather than upon the needs of

people within a province.

One of the fundamental aspects of federation, of Canada as a

country, is its ability to be able to share from more prosperous provinces to

less prosperous by dealing with the need situation. We have just made a

decision, and it is going to have an impact that is significant in years to come

in increasing the gap between have and have-not provinces. We are going to see a

broadening. There are provinces of the country that do not want to have to give

to other provinces. We have seen a whole fundamental change in the philosophy of

federalism as we have known it since 1867, basically.

Next year we are only going to receive $281 million in Canada

Health and Social Transfer. Where are we going to get in our tax base another

$60 million next year to make up for the further cutbacks in Canada Health and

Social Transfer? Put that on top of the $87 million structural deficit we have,

and another $61 million on top of that, and we have $148 million to deal with in

shortfalls alone just because of that.

AN HON. MEMBER: (Inaudible) harmonization.

MR. SULLIVAN: I'm getting to that one. I will get to that

one a little later. They arranged that so it won't kick in fully until after the

next election. That is the way that has been arranged. I will get to that in due

course.

In fact, in the year 1997, which is ending this fiscal year,

we are going to get $341 million in Canada Health and Social Transfer. In 1998,

down to $263 million, another $18 million erosion. The year after it is going

down to $244 million. The year after, $239 million. Down to $235 million, and

then down to $233 million. So if you can imagine in a period of six, seven years

we are going to see our transfer for health, post-secondary education, and

social assistance reduced by one-half, in a time when our Province has a

caseload that is almost unbearable in social assistance.

It has post-secondary education getting priced out of

existence and one in which the health concerns of people are not going to get

addressed. These are some of the major things we are going to be dealing with in

next years Budget and the year after that we have to come to grips with.

If you look at other provinces in Canada, the provinces that

are better able to afford things - Ontario, for example, even though it has far

more people than Quebec, Quebec received more technically in transfers than

Ontario for CHST, even though it has substantially more. So it's the push by

Alberta, Ontario and BC who are not so willing in tough times to have to share

their wealth with other provinces of the country. We are going to have a

breaking down of federalism as we know it today. We are going to have a

devolution of powers which is going to be needed to a certain extent - but we

are going to have a devolution of powers that is going to make provinces have to

stand and be able to survive on their own. That is going to be difficult when we

have not been given the necessary tools to be able to survive. We have been

subjected to unacceptable levels of change in our Canada Health and Social

Transfer.

One of the things people in this country take pride in is

being able to avail of the same level of health care, whether you are in British

Columbia, Ontario or in Newfoundland and that is going to change because now he

who pays the piper calls the tune. Now that there is no money specifically

earmarked dealing with those needs it is not going to get spent accordingly. We

are going to end up with a ten tier system of health care in this country.

AN HON. MEMBER: (Inaudible) you are never satisfied.

MR. SULLIVAN: I am just pointing out the concerns. The

problem is your Premier sat around the table and voted for those changes to the

basic Canada Health and Social Transfer and supported it. That is what, and to

represent this Province with hundreds of millions and a declining state of the

economy in this Province and then he is signing giveaway deals to appease his

counterparts. I don't think that is acceptable.

AN HON. MEMBER: Are you going to Ottawa with him on that

(inaudible).

MR. SULLIVAN: He said last week he would put it in

writing to me but I have not received any letter yet and I am waiting. He said

he would put it in writing in the House last week. I asked him to put it in

writing and I will respond within a day or two at the very latest. I assured him

his request. I've said that, I said it last week, I said it again today and I

will do that. I said within a day or two he will have a written response back

from me. I am just asking him to live up to his commitment of what he stated

here, that he will put it in writing.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Wherever I go I will follow the wishes of

the people, that is what I will do and I don't care whether it is yes, no, maybe

or whatever. That is the proper and responsible thing to do.

AN HON. MEMBER: The wish of the people (inaudible).

MR. SULLIVAN: What? The wish of the people in my

district? Go back and check your figures. I did not campaign the referendum to

be honest with you. I did not campaign and did not participate in it. I had one

speaking engagement - requested to speak and I put forward a neutral perspective

to a rotary club here on both sides on why I was voting the way I was going to.

I was, you could say, a bit passive in the campaign. I wanted to hear what

constituents had to say and not what I was going to tell my constituents,

basically.

AN HON. MEMBER: Did you vote against it?

MR. SULLIVAN: I certainly did. I stood and voted against

it here in the House of Assembly.

AN HON. MEMBER: With the people in his district.

MR. SULLIVAN: That's right and now that the House of

Assembly, the Legislature of this Province that represents the people, and the

results of the referendum brought to this House of Assembly -

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: I said when the Premier does what he said,

I will do what I said. That is what I indicated.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: I did not say I needed a letter. He said he

was going to give one so I said -

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: It is in the House, I didn't ask him. He

said he would put it in writing. Yes, and I told him I will do

MR. TULK: (Inaudible).

MR. SULLIVAN: Sure that's no reason. So that means I

cannot go. I voted PC in the last election so I cannot go to Ottawa with a

Liberal Premier. This is a democratic system I tell the Government House Leader

and you have to function under democratic rules; that is what you have to do. I

will do what is right and proper.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: You're darn right I believe you should.

AN HON. MEMBER: (Inaudible) should not?

MR. SULLIVAN: Oh, you should do it. Yes, you should.

I had a news conference two weeks ago, I have said it

publicly many times, you should get on with it and do what you were told to do.

Don't be beating around the bush, waiting, trying to strike some sweetheart

deals behind the scenes. Get on with it and do what the people said.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Yes, exactly. I stood up as a member of the

House of Assembly, and I expressed the wishes of my constituents who put me

here, and once the Province speaks, after the fact, I will vote with the

majority of the people on what should be done in this Province - I have no doubt

about it - and when I don't do that, when I don't adhere to the rule of

democracy on which I was elected, and the rules of our society, it is time for

me to walk out the door, I say to the Government House Leader.

SOME HON. MEMBERS: Hear, hear!

MR. SULLIVAN: It is time to walk out the door, and I will

do that if it comes to that. I will walk out the door before I will defy the

rules; I will say that.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: The member doesn't know me very well. I

stand on principle.

AN HON. MEMBER: The majority of the people said to you,

(inaudible).

MR. SULLIVAN: No, they didn't.

AN HON. MEMBER: Yes, they did.

MR. SULLIVAN: People in other parts of the Province don't

speak to me. People in my district speak to me in referendums, and when the

House of Assembly votes and the collective vote of everybody determines where we

move I will get behind that, and I have done it from day one. I have never said,

from the results of this House of Assembly, and when being asked, that I was

opposed to Term 17 going ahead.

AN HON. MEMBER: You did.

MR. SULLIVAN: No.

AN HON. MEMBER: You said it here.

MR. SULLIVAN: No, I haven't. That was before it was

passed. That was before. That was part of the process. The minister can twist it

how he wants to, he can have a bit of fun with it, he can do what he wants to

with it; I have been clear, to the point, unwavering, have not waffled back and

forth. We are soon going to call the Minister of Education the giant waffle and

the Premier, waffle one and waffle two; that is what they are.

Finally, after turning their backs on the people and coming

back and not speaking with all stakeholders... I will just say for the record,

while we are on this, exactly where I was - I will say to the Government House

Leader, who sat in that caucus, if he wants to listen, here is why I voted no,

and I will tell him right now for the record. I said from day one that any

change in reform to Term 17, or any change in our education system, should only

occur when parents and teachers and school boards and churches and government,

when all stakeholders were involved. The government of the day decided to turn

their back on parents and school boards and teachers, and went to just one group

of people. They went to only a select subgroup of the stakeholders to education,

and turned their backs on the people, and brought legislation to this House.

Then they realized they did not consult anybody; then they went to the people.

When the people spoke, as the Member for Ferryland district, I voted with the

wishes of the people of my district, and once the House of Assembly voted to

change it I said: We have to follow the wishes of the people. I have done that,

I have stated it, and that is where I am on it, and if anybody disagrees with

that, I just beg to differ because I did what I felt was fundamentally right and

proper to do, and I will stand by that.

AN HON. MEMBER: You don't want consultation (inaudible)?

MR. SULLIVAN: Consultation?

Here is what I have stated, and I will say this also, and I

said it at my news conference, and you can have a copy: You can only change the

results of September 5 if you go back and deal with all the stakeholders who

were involved in rendering that September 5 decision.

That is what I said, and if there is unanimity by all

stakeholders from that decision, more power to the government; let's bring it on

and get the change. But they decided again, the Premier of the day, and his

Cabinet and government, decided just this past couple of months again, to turn

their backs on the people and only talk with select stakeholders again in

education, the churches - did not talk with parents or teachers or school

boards, and ignored those people - that is why they got in trouble. And when

they waffled again, and they had to waffle back again, and now they are doing so

much waffling people do not know whether they are for it or whether they are

against it, until the people held him accountable; that is the major waffler.

Now, I will get on to some other types. I will get back to

that later if we have some more time. There are some important things I would

like to address. I am getting a tremendous amount of static coming from that

side of the House, and I haven't seen anyone stand and ask permission to speak.

There has been interference, and continuous heckling and that. I don't mind some

sensible conversation. I will give them leave to speak, but I would like them to

at least listen when I'm speaking, and I will listen when they speak. I have no

problem with that. I just ask for common courtesy and the rules of the House I

would be very obliging on my time to do that. In fact, I would like to have had

some absent ministers here to be able to answer some of the questions I would

like to ask.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: If the Government House Leader can't answer

them, if he could at least take a little note and bring it in to the absent

minister to get me those answers.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: I asked him what are you going to do - last

year there was a $90 million structural deficit.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: I will ask the question and then I will

listen to you, and I will attempt to answer yours.

MR. SPEAKER: Order, please!

The hon. Leader of the Opposition has asked to be permitted

the opportunity to make a speech without interruption. I will ask that he be

granted that privilege.

MR. SULLIVAN: Thank you, Mr. Speaker. Above all I'm sure,

yes, the Government House Leader should be one who sets the decorum and the

standards by which the House operates. If the Government House Leader doesn't

set it who is going to set it? Who can we look to?

I will get to harmonization now. One of my colleagues

mentioned harmonization. If you look at the harmonization agreement, this

Province, we have sold out a substantial chunk of revenues on harmonization. I

will ask the minister across here - not the one who isn't here; I will ask the

one who is here - what are we going to do in year three and year four to make up

for the $100-some million shortfall in harmonization? What long-term plan? On

top of -

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: What are we going to do to make up for the

$100-some million shortfall under harmonization? The Minister of Finance and

Treasury Board mentioned back there was $105 million, he admitted, and then in a

later

article he said it could be $185 million in year three and year four of

this agreement. Because year one and year two, they are supposed to pick up the

shortfall, anything beyond 5 per cent. Anything beyond 5 per cent they will pick

up half of it in year three and beyond 5 per cent they will pick up 25 per cent

in year four. I'm asking: What plan does he have for a recouping or a generation

of those revenues in year three and year four?

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Yes. That is going to be roughly $130

million to $150 million.

SOME HON. MEMBERS: (Inaudible).

MR. SULLIVAN: Yes, the Minister of Mines and Energy will

probably say the economy is going to grow in that time, but you are projecting a

5 per cent decline in the economy.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: No, the provincial government is going to

pay the $348 million over four years. But I'm saying that is going to include, I

say to the Minister of Mines and Energy -

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: In year one, Minister, they are going to

make up 95 per cent of the difference, because there is a 5 per cent. In year

two they are going to make up 95 per cent. Year three they are going to make up

45 per cent, and year four they are going to make up 20 per cent. When you add

all those together that is your $348 million. That is how it is spelt out in

terms of the Memorandum of Understanding agreement that they signed.

I'm saying: What about the 75 per cent they don't make up, or

the 80 per cent in year four? Where are we going to get those extra $100-some

million, I would like to know? On top of a structural deficit of $80 million.

That is on top of Canada Health and Social Transfer cutting back next year of

$60-some million, another $100-some million, that is $160 million. We are up in

the $300 million deficit range. If you think after two years it is going to get

better I say you are wrong. After two years we are going to be facing some very

tough revenue decisions and a revenue crisis here in this Province.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: No it won't be rosy. That is why we

shouldn't be telling the people it is going to be rosy when it isn't going to be

rosy. You should be telling the truth to people. You should be upfront. If it is

going to be tough, tell them it is going to be tough. That is what you should

do.

The government has indicated that the money we are going to

lose in retail sales tax, the $100-some million a year forever, basically,

unless we get a new deal after four years -

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Well, the minister said $105 million,

difference. Then he said after in a Telegram

article it could be $185

million, it could be closer to it. Let's take $150 million, somewhere in

between. What the minister stated, or the Premier, when it was signed, he said:

We aren't going to need to make it up because - because of harmonization we are

going to cause the economy to grow by the amount of increase in our sales, in

our retail trade. It is going to increase enough that it is going to make up the

difference.

Now, just think for a minute: to get $105 million at 8 per

cent, 15 per cent is the harmonized rate, seven goes to the federal government

and the 8 per cent - to get $105 million we need more than $1.3 billion in sales

of goods and services in this Province.

MR. TULK: (Inaudible).

MR. SULLIVAN: What does that have to do with the 8 per

cent of the harmonization?

MR. TULK: (Inaudible).

MR. SULLIVAN: I know, but the point I am making to the

minister is, we have to sell $1.3 billion more; at 8 per cent, gives you $104

million; we have to increase sales by about 40 per cent. In other words the

economy of this Province cannot possibly grow substantially to the extent that

we are going to get back $105 more million in revenues from taxation. It is not

possible; it just will not grow because of that.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: No. Your government is predicting - I am

hoping it grows and we have prosperity in this Province.

MR. TULK: What was that question?

MR. SULLIVAN: I am wondering where are they going to get

AN HON. MEMBER: Where are they going to get -

MR. SULLIVAN: I will write it down. I will put it on the

Order Paper and maybe I will ask him in Question Period tomorrow.

I am saying the economy is not going to grow enough to make

up for the shortfall because of the harmonized rate. That is basically in the

bottom line of what I am saying.

We also have a big problem besides our debt, our public

sector debt of $6.8 billion, 42.11 per cent increase in debt since 1989. The

debt in 1989 when, I guess - no you weren't here then, before you took the

vacation in '89 and came back again -