March 28,

HOUSE OF ASSEMBLY PROCEEDINGS

Vol. XLII No. 21

The House met at 2:00 p.m.

MR. SPEAKER (Dicks): Order, please!

Oral Questions

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

MR. SIMMS: Thank you, Mr. Speaker.

I have, for the Premier, a question related to the Hydro

privatization issue. During the debate on Thursday night past on CBC television

dealing with the privatization of Hydro, the Premier said, and I quote:

`Government will make sure that before we proceed with a vote in the House of

Assembly we have the support of the people of the Province to proceed, otherwise

we will not proceed.' I would like to ask him, how is he going to make sure of

that support? Did the government have a poll commissioned, and if so, when?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: No, Mr. Speaker, but we are in the process

of looking at that now. A poll is one way to do it. We have occasionally asked a

question here or there on a ride on on other polls that have been done but never

a poll commission. We have been considering that in the last little while and

when the time is appropriate, if that is the best method to make the

determination then I have no doubt we will have a formally structured poll to

ensure that we get adequate information and not just a simple ride on or

something of that nature.

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

MR. SIMMS: Mr. Speaker, on a supplementary. Maybe the

Premier can help us understand precisely what he is saying here. He hinted at

add-ons and things of that nature. Is there some kind of polling being done that

the government is aware of and has agreed with to try to give you some

indication initially before you do a comprehensive poll? Is that what he is

telling us here today? Just so we understand.

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: No, Mr. Speaker, there is no polling being

done now.

AN HON. MEMBER: No tag-ons?

PREMIER WELLS: No. Last fall sometime there was one

dealing with a merger, and in early February, I think, there was another, but

not a formal poll as such.

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

MR. SIMMS: Mr. Speaker, back to my original question when

the Premier said we will make sure we have the support of the people, otherwise

we will not proceed. He has now indicated that polling may be one way, and

indeed he may undertake a comprehensive poll. Is there some other way he is

considering as well, and if so, what might that be?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: There is a variety of basis on which a

government would judge the political acceptability of the policy it is

following. For example, my office is literally inundated with calls of support,

not calls of opposition, with calls of support, literally inundated with calls

of support. Now, I know members opposite don't like to hear that, and they laugh

as though they know that isn't so, but the calls keep coming in, day after day,

they come into my house as well, and we are literally inundated with calls of

support, and very few that I know of are calls of opposition. So there is a

variety of ways, and as people are fully informed on the issue, I have no doubt

that they will be able to judge it properly, but, Mr. Speaker, I am not prepared

to have it judged in circumstances of the hysteria that has been created

recently, I want to make sure that it is judged fully and fairly.

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

MR. SIMMS: Mr. Speaker, I can understand the feeling that

the Premier has because I know exactly what he is talking about, being inundated

with telephone calls, I am getting them, too, at my home and in my office

morning, noon and night from all parts of the Province but unlike his, they

aren't calls of support for the Premier's position, they are calls of

opposition. I guess the Premier didn't hear Open Line this morning when

they took a pretty good poll and a pretty good gauge of public reaction as well.

Let me ask him this since he hasn't really given us any clear indication of what

other area he is looking at in terms of gauging public opinion, I can't seem to

extract it from him: Is he considering the holding of public hearings at all

around the Province, some sort of public hearings to give the public a chance to

have some say? Is there a possibility he may withdraw this bill in the next

couple of days?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Well, I can answer the last question

first. No, Mr. Speaker, there is no possibility that we will withdraw this bill

in the next couple of days, that won't happen. The government's position is that

privatization of the private businesses carried on by government is in the best

interest of the people of this Province, both from a point of view of long-term

economic benefit to the Province and immediate and longer-term financial benefit

to the Province as well, so we intend to proceed with our policy of

privatization. That's the second part of the question; the first part was -

MR. SIMMS: Public hearings.

PREMIER WELLS: No, Mr. Speaker, we have no plans for

public hearings. I have been watching these meetings that have been going on

around the Province, and while it wouldn't be true to say that it applied to

every single one of them, the vast majority of them seem to have the same five

or six characters who are making this a cause, a political cause for themselves

who seem to be present at most of them to express their views; Mr. Malone, I

think, is one of them, Mr. Abery is another, a lady named Susanne Kelland-Dyer

is another, Mr. Vetter is another, Mr. Andy Wells is another, and they just seem

to go from meeting to meeting to stir up, so we will just matters settle and

make sure that people are fully informed and then we will make our

determinations as to the course we intend to follow.

MR. SIMMS: A supplementary, Mr. Speaker.

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

MR. SIMMS: It is too bad the Premier decides to cast some

kind of a slur or aspersion upon the people whom he just mentioned himself

publicly. There is no need of that in the House of Assembly. I don't know why he

would even bother to do it.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

MR. SIMMS: I mean, what's wrong with those people

attending public meetings, Mr. Speaker, I ask the Premier? What is wrong with

those people holding public meetings or speaking at public meetings - is there

something wrong with that?

Let me ask him this. The Minister of Finance was on the news

lines over the weekend saying that the House will close sometime on Thursday,

Thursday evening, presumably to take a two-week Easter break. I would like to

ask the Premier, does he intend to ensure that the bill, Bill No. 1, I think it

is, privatization of Hydro, will be passed before the House adjourns for the

Easter break? Is that his intention?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Let me emphasize, Mr. Speaker, I never at

any time suggested there was anything wrong with the four or five people I named

attending all the public meetings. They can attend a thousand more if they want

to. What is wrong is the Opposition representing this as the collective wisdom

of the people of Newfoundland and Labrador. It is essentially the views fomented

and stirred up by the same half-dozen or so people at most of the meetings.

Mr. Speaker, the second part of the question was - I would

expect that we will make a determination as to when we adjourn and for how long,

depending on the progress we make during the next two or three days. Normally -

and I'm not suggesting we ought to vary it now - we have never sat on Good

Friday, as far as I know, and I don't think there is any reason to do otherwise

now, so I would expect the House will adjourn on Thursday. For how long it will

adjourn will be decided, I assume, between now and Thursday, depending upon what

government wants to achieve in terms of its order of business over the next

little while.

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

MR. SIMMS: A final supplementary, Mr. Speaker. In the

past, I have asked the Premier a question about the deadline or if there is a

deadline. He has always said no, there is no deadline, no finality to this in

terms of when we have to have this passed or this achieved and so on. We have

been told by the Minister of Finance that the House will adjourn for two weeks

after Thursday for the Easter break. He said it publicly on the airwaves on the

weekend.

I want to ask the Premier, in view of the fact that this is

now the second week in a row, the second week in succession, that the government

hasn't even called the privatization legislation - and today we are told we will

be dealing with interim supply - this is the second week in a row. Can we assume

that there is no deadline, that in fact if the debate is to carry on for the

next two, three or several weeks that it will be permitted to do so or does the

government intend to introduce closure once again?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, the hon. member stood up and

said the Premier told us there was no deadline on this?

MR. SIMMS: Yes.

PREMIER WELLS: The answer is still the same. I don't know

why you would think it would be any different. I still say there is no absolute

deadline on this. It's important that we proceed with the matter expeditiously,

that we not hurt the people of this Province by dragging it out and causing a

lesser return in the event of sale of this. This would be a dastardly deed to

perpetrate on the people of this Province. Maybe the Opposition might have a

great deal to answer for in the end because of that, but no, Mr. Speaker, every

time I've been asked that question I've given the Leader of the Opposition the

same answer. Now, I know he wishes it were another answer so he could attack the

answer but the answer is the same now as it was before.

With respect to the fact that the privatization legislation

hasn't been called for five or six days? I don't think it's been called since

the Budget has it?

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: One day only on it, I think.

PREMIER WELLS: Okay. Now remember, Mr. Speaker, we just

introduced the Budget ten days ago or less.

AN HON. MEMBER: The seventeenth.

PREMIER WELLS: The seventeenth - ten or eleven days ago

we introduced the Budget. We provided an opportunity for the hon. Member for

Mount Pearl to give his response and he took his one day to do that and that's

fine. Then, Mr. Speaker, we had Supplementary Supply and I believe we've been

debating Interim Supply for three days and it still - normally Oppositions

provide for a day or two debate on Interim Supply and then recognize that

government needs the Interim Supply for the first quarter of the coming year.

Now, Mr. Speaker, we've got to get Interim Supply before the end of this month

and government is intent on getting Interim Supply before the end of this month

so that the normal operations of government can continue, all of the public

servants, nurses and teachers can be paid. So we're in the process, as far as I

know, of debating Interim Supply.

AN HON. MEMBER: Yes.

PREMIER WELLS: So, we're going to debate Interim Supply

and when we have Interim Supply then we'll decide what the remainder of the

government's business will be, Mr. Speaker, before we adjourn before Good Friday

and at that time we will be able to make a determination of when we need to

resume.

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

MS. VERGE: Thank you, Mr. Speaker, I have a question for

the Premier.

This morning CBC Radio interviewed Cyril Abery, the former

Chairperson of Newfoundland and Labrador Hydro, about the negotiations with

Hydro Quebec that led to a fantastic opportunity two years ago for this Province

to achieve three major objectives, number one; to protect our interest in the

Upper Churchill and get billions of dollars of additional royalties and rentals,

starting right away, number two; to develop the Lower Churchill and sell the

power generated at a favourable escalating rate, and number three; to build a

transmission line to the Island and acquire 800 megawatts of cheap 3 mils power.

Mr. Abery revealed that when the parties were within very

close reach of a final agreement, the Premier ordered the negotiating team to

pull back and reverse positions taken on items already settled at the

negotiating table.

The question is: Why did the Premier scuttle the deal that

met all his government's original stated objectives?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, I don't intend to make any

comment today on what Mr. Abery said. I heard the radio broadcast this morning,

and I have never heard such drivel and tripe in my life. I also can't believe

that a person who had the temerity to call himself a senior public servant would

behave in that way, against the interest of the people of this Province in the

way in which he did. Anyway, I will deal with that, but I will wait to see if he

corrects, tomorrow, the mess that he made today, and I will deal with it then.

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

Humber East.

MS. VERGE: Thank you very much, Mr. Speaker. A

supplementary to the Premier.

Didn't the Premier scuttle the deal in part because back then

he was planning to merge Hydro with Fortis, or sell it on a stand-alone basis,

and having Crown owned Newfoundland and Labrador Hydro do the deal with Hydro

Quebec would spoil an opportunity for private interests to get the lion's share

of benefits out of the Lower Churchill, the same as BRINCO and other private

interests did out of the Upper Churchill?

Isn't the Premier's plot to sell Hydro a way of favouring

private interests over the public good, a scheme to make the rich richer and the

poor poorer?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, I will just say again that I

will deal with Mr. Abery's allegations when I have heard the remainder of them

and I can deal with them thoroughly, and I have no intention of being stampeded

into doing it now by these kinds of offensive remarks from the Member for Humber

East.

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

for Humber East.

MS. VERGE: Thank you, Mr. Speaker. A supplementary to the

Premier.

Wasn't the Premier's egotistical scheme to break the Upper

Churchill contract through the Electrical Power Control Act and

section 92(

a) of

the Constitution, the idea he spun out for Newfoundland Light and Power back in

1986, another reason for his thwarting a settlement on the Lower and Upper

Churchill? Wouldn't the Premier really rather have another long drawn out

expensive court case to test his pet theory rather than get an agreement to gain

billions of dollars of extra revenue now, and hundreds of thousands of jobs for

unemployed Newfoundlanders and Labradorians now?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, I will deal tomorrow with Mr.

Abery's comments and these comments.

I can assure hon. members if they want to they will be given

an opportunity to take that proposal to the people of this Province and ask them

for their support and we will take our position and see what the people of this

Province think.

SOME HON. MEMBERS: Hear, hear!

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

The hon. the Member for Bonavista South.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

The hon. the Member for Bonavista South has the floor, I

believe.

MR. FITZGERALD: Thank you, Mr. Speaker. A question to the

Minister of Social Services. I would like to ask the minister if he is aware of

the fact that prescription drugs are allowed to be dispensed to residents at the

Whitbourne Closed Custody Centre by youth care workers?

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

MR. LUSH: Mr. Speaker, whatever procedures are in place I

expect are in place, but I'm not aware of that situation specifically.

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

Bonavista South.

MR. FITZGERALD: I would like to ask the minister if he

can tell the House what if any training these youth care workers have in this

particular field, since such activities are normally performed by a member of

the medical profession, such as a nurse or a certified nursing assistant.

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

MR. LUSH: Mr. Speaker, as I indicated to the hon.

gentleman, I'm not aware what the procedure is for the dispensation of drugs,

but I expect whatever procedure is in place, I could only hope that the people

doing it are qualified to do so.

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

Bonavista South.

MR. FITZGERALD: Mr. Speaker, I'm aware of what procedure

is in place, and I understand that at the present time the youth custodial

workers are allowed to dispense prescription drugs without any training while

two nursing assistants are on staff. Since there are two full-time nurses on

staff at the Closed Custody Centre - both, I might add, at the present time

working day shifts only - I would ask the minister to recognize this possible

health problem and immediately assign the duties of dispensing medications to

those two trained, registered nursing professionals.

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

MR. LUSH: I will check out what procedures are in place

there, Mr. Speaker, and see that things are done correctly. Rest assured that we

will have the matter checked into.

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

Kenmount.

MR. HODDER: Mr. Speaker, in view of the continued absence

from the House of the Minister of Education I would like to address a question

to the Minister of Finance. Most people in the Province want the best for our

youth. That includes the option of attending a post-secondary institute of

learning. Tuition costs are going up, the cost of textbooks is going up,

accommodation costs are going up, and real assistance from the government is

going down. Mr. Speaker, does the minister not see that the changes to the

student aid programs are being counterproductive to the interest of

post-secondary students?

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

MR. BAKER: Mr. Speaker, first of all let me indicate that

the Minister of Education is out of the country leading a national delegation.

He is representing all of the education ministers in Canada at a conference in

Spain. That is why he is out of the House. Normally we don't dwell on such

matters.

Secondly, no, I know that it is difficult to come up with a

solution to provide more money where it is needed in the education system. We

believe that this proposal on student aid provides more money to the students

where it is needed and makes the necessary changes in the process so that

students can access more money. Then there is a partial forgiveness program at

the end of it. We believe this puts more money in the hands of the students, Mr.

Speaker.

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

Kenmount.

MR. HODDER: Mr. Speaker, students now get by on student

grants, student loans, help from parents and the occasional summer job. The

reality is that there are very few summer jobs and more and more parents are

unable to help their children financially, and the government has eliminated

student grants. The plain truth is that the government has lost faith with the

youth of the Province and the student debt loads are going to double in the

future. We can expect debt loads of $25,000, with interest on repayment. We are

talking about a $50,000 repayment, and of course the government therefore is

transferring the cost of education from its debt load to the sons and daughters

of cash strapped, overtaxed, and more often than not, unemployed parents.

Would the minister undertake today to withdraw the changes to

the student aid program and do something to encourage our children to stay in

school rather than stay at home?

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

MR. BAKER: Thank you, Mr. Speaker. I will try to deal

with the member's disjointed presentation.

First of all, Mr. Speaker, he makes the case very well that

there were problems with the student loan program that, in many cases, it

required and insisted on far too much parental contribution, especially in the

low and middle income brackets.

Our provincial student loan program takes care of this

problem and doesn't insist on as much parental contribution where the parents

can't afford it, so it makes that very necessary change. At the same time it

makes allowance for the fact that there are not as many summer jobs as there

used to be twenty years ago. It makes allowance for that fact and, in fact, puts

more money in the hands of the students. So that's what the provincial student

loan program does.

I would like to remind hon. members that the taxpayers of

this Province already contribute 85 per cent of the cost of a university

education. The taxpayers, through government, already pay for 85 per cent of the

cost of a university education for every single student attending post-secondary

education, and particularly attending Memorial University, so the taxpayers do

make a significant contribution.

There are many solutions to the problems that students had.

One of them was to be able to provide an extra $20 million or $30 million or $40

million by way of grants. Mr. Speaker, we could not ask the taxpayers of the

Province to do that, and that's why we have decided to go to the loan program to

make more money available and then to have a partial forgiveness at the end.

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

for Waterford - Kenmount.

MR. HODDER: Mr. Speaker, the current program is the

beginning of the end of student aid. Within a year or so we will see the

complete privatization of all aspects of student aid. Already the colleges and

university in this Province have indicated they are going to be putting up their

tuition fees, and students feel abandoned by their government. In fact, the

Student Advisory Committee that was set up some years ago met for the first time

in eighteen months on Budget day.

Will the minister undertake today to assure that the Student

Aid Advisory Committee is brought into discussions with the government in a

consultative role, and that the people who are most affected, the students, will

become totally involved in changes to the student aid program?

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

MR. BAKER: I would like to remind members opposite that

in better times it was a Liberal government that caused tremendous expansion to

Memorial University in the post-secondary education in this Province. It was a

Liberal government that insisted that more and more students go to university.

It was a Liberal government that actually, at one point in time, paid students

salaries to go to university. It is a Liberal government that has expanded

tremendously the availability of university courses outside St. John's to the

rest of the people of this Province.

Mr. Speaker, it is offensive to suggest that this government

is going to abandon student aid.

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

MR. A. SNOW: Of course, we all know that's when the

government were truly Liberals.

SOME HON. MEMBERS: Hear, hear!

MR. A. SNOW: Mr. Speaker, my question is to the President

of Treasury Board.

AN HON. MEMBER: You were in the NDP then.

MR. A. SNOW: So true.

MR. SULLIVAN: Now you've seen the light, haven't you?

MR. A. SNOW: And now I've seen the light.

SOME HON. MEMBERS: Hear, hear!

MR. A. SNOW: Mr. Speaker, my question is to the President

of Treasury Board, who also used to be a member of the NDP party.

Last year public sector employees were told that stripping

employer contributions from the pension plan was a one-shot deal. The minister

said at the time that it couldn't be repeated because it would weaken the public

sector pension fund. Now, of course, we all know that it is already in

difficulty. Can the minister tell us why you are proposing to withhold your

contributions again this year?

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

MR. BAKER: Thank you, Mr. Speaker.

The hon. member is totally wrong in his introduction to his

question, absolutely, totally, completely wrong.

Number one, Mr. Speaker, I pointed out quite extensively at

the time, that what was done with the pension plan last year did not in any way

weaken the pension plan, that in fact, there were probably some pluses on an

actuarial basis, Mr. Speaker, in terms of the plan. I pointed that out quite

clearly, that it did not weaken the plan, that it did not damage the plan. We

have all kinds of actuarial studies, Mr. Speaker, to show that, and I would be

willing to show it to the hon. gentleman if he so desires; there was no

weakening of the plan.

Now, Mr. Speaker, to deal with the substance of his question,

which was: Last year we said this is a one-shot deal. Yes, Mr. Speaker, it was a

one-shot deal in the sense that it didn't affect any permanent changes. Had we

been able to find the $70 million or the $60-odd million last year in a

permanent manner, we would not now have a problem this year, Mr. Speaker, we

could be negotiating on a totally different basis, so in that sense, it was

something that had effect for one year only.

As to his question about what's happening in collective

bargaining now and why is government proposing - government, Mr. Speaker, has

presented an opening package to the unions of this Province; there has been very

little discussion and, in some cases, no collective bargaining to this point and

I hope we get back to collective bargaining, so that we can come to a

satisfactory conclusion.

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

supplementary.

MR. A. SNOW: Mr. Speaker, for the fourth year in a row,

government is stripping monetary benefits from the public sector compensation

package. Now, you justify this on the basis that you can't borrow more money to

pay the bills, but, Mr. Speaker, I ask the minister, why are you, in this round

of negotiations, trying to strip away the non-monetary benefits that are in the

contracts, such as you are doing with the nurses union? This cannot help your

deficit. Are you just out to force a confrontation with the public employees for

some political gain?

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

MR. BAKER: Mr. Speaker, first of all, let me say and let

me repeat again, that we have presented an opening package and we hope that

collective bargaining will clarify those positions as time goes on; we will see

what comes out of the process, Mr. Speaker. These were simply opening positions.

Government is not the only involved party here; in terms of the hospitals and so

on, there is the Hospital and Nursing Homes Association; in terms of the teacher

negotiation, there is also the secondary school, the School Trustees Association

that are also party to the negotiations and have particular interest in terms of

negotiation as well. So, Mr. Speaker, it is simply an opening package and we

will see how things go in the next few weeks in collective bargaining.

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

for Menihek.

MR. A. SNOW: Public sector employees have been very

understanding of the government's plight, the situation that government find

themselves in over the past few years. They have been more than accommodating to

this particular government, Mr. Speaker. Doesn't the minister realize that his

attack on non-monetary benefits, has convinced public employees that the

government's real motive is to break public sector unions. Is that what you are

really up to then?

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

MR. BAKER: No, Mr. Speaker, and that's the very reason

that I can't comment very far beyond what I have today, that we believe in the

process and we believe the process will happen, and that we will eventually come

to a conclusion, as we did last year. Last year we signed agreements with all of

the unions, so it was not legislated, it was not enforced and we hope that we

can do the same thing this year.

Mr. Speaker, as to his comment about stripping the contracts

for three years in a row, yes. We have gone through some very difficult times

and so have the public sector unions and the union membership has gone through

some very difficult times, but I would like to remind the hon. member, that as

revenues have disappeared and as revenues have fallen, what we have been doing

for the last couple of years, is protecting jobs. Rather than be forced to have

massive layoffs, we have had to resort to other measures, Mr. Speaker, we have

been protecting jobs in this Province.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

Question Period has elapsed.

Notices of Motion

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

MR. ROBERTS: Mr. Speaker, I give notice that I shall on

tomorrow move that the following heads of expenditure be referred to the

Government Services Committee: Finance, Works, Services and Transportation,

Employment and Labour Relations, Municipal and Provincial Affairs, Newfoundland

and Labrador Housing Corporation and the Public Service Commission; that the

following heads of expenditure be referred to the Social Services Committee:

Social Services, Education, Health, Environment and Lands and Justice; and that

the following heads of expenditure be referred to the Resource Committee:

Fisheries, Forestry and Agriculture, Mines and Energy, Tourism and Culture,

Industry, Trade and Technology. Members will recognize, this is the normal

motion to refer the Estimates through the Standing Committees for detailed

consideration in accordance with, I think it is Standing Order 113 of the

Standing Orders of the House.

MR. SPEAKER: The hon. Member for Kilbride.

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

I give notice that I will on tomorrow introduce the following

private member's resolution,

WHEREAS post-secondary education must be accessible to all

residents of Newfoundland and Labrador; and

WHEREAS it is in the best interest of the Province of

Newfoundland and Labrador and its economic future to have a skilled and educated

population; and

WHEREAS changing economic conditions in Newfoundland and

Labrador require at least, post-secondary training before the average young

person can gain full employment and contribute to our economy;

BE IT RESOLVED that student grants be reinstated at

BE IT FURTHER RESOLVED that needs assessment criteria for

student grants be updated and, as well, take into account the changing

demography of the student population by recognizing the special needs of

students with dependents; and

BE IT FURTHER RESOLVED that students be involved in

decision-making that affects their financial status by ensuring that they are

consulted on a regular basis when student aid is being revised.

Petitions

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

West.

MR. TOBIN: Thank you, Mr. Speaker.

I would like to present a petition on behalf of thirty-six

people from my district regarding the privatization of Newfoundland and Labrador

Hydro. Mr. Speaker, the prayer of this petition has been read in the House

several times in the past and I don't think it is necessary for me to really get

into the prayer of the petition again. I can say, Mr. Speaker, that this

petition was signed by thirty-six people from the Burin - Marystown area who are

very concerned that government may privatize their public utility company.

During the past month or so, Mr. Speaker, the Opposition has

been constantly standing up and expressing the views and the wishes of the

people of Newfoundland and Labrador who are opposed to the privatization of

Newfoundland and Labrador Hydro. There was a clear indication today, Mr.

Speaker, on the VOCM Open Line program where the people calling in to the

poll - over 140 people, I believe - have made their wishes known, and 70 per

cent of them called upon government not to privatize Newfoundland and Labrador

Hydro. Mr. Speaker, I can say that our own internal polls are showing that the

people of this Province as well are - what's that?

AN HON. MEMBER: (Inaudible).

MR. TOBIN: Yes, sure, polls are public. It's a public

poll - a press release has been done on it. There was one question: Do you agree

with the privatization of Newfoundland and Labrador Hydro, yes or no?

AN HON. MEMBER: Here is the question.

MR. TOBIN: `The Provincial Government is considering the

privatization of Newfoundland and Labrador Hydro. Are you for or against the

privatization?' Mr. Speaker, the result was -

AN HON. MEMBER: It was 87.1 of decided voters against.

MR. TOBIN: Mr. Speaker, 87 per cent were against it and

13 per cent were for it - 87 per cent to 13 per cent, Mr. Speaker.

MR. SIMMS: Of the decided vote.

MR. TOBIN: Yes, of the people who responded, 87 per cent

to 13 per cent, Mr. Speaker, were the results of that poll, I say to members

opposite.

MR. W. MATTHEWS: The VOCM poll was the same.

MR. TOBIN: The VOCM poll was basically the same if you

factor in the undecided, Mr. Speaker. The VOCM poll was exactly the same. So let

there be no doubt about it.

Now, Mr. Speaker, you can doctor polls, I say to members

opposite, you can doctor polls. There was one doctored in this Province prior to

the 1989 election, Mr. Speaker. You can doctor polls and there are masters at

doing that - there was one doctored in this Province the week before the vote in

the 1989 election campaign and it is clearly spelled out, Mr. Speaker, in the

autobiography of the Premier, I say to members opposite. When this party was in

Opposition and going into the vote in the 1989 election campaign there was a

poll, Mr. Speaker, we all know what happened. It appeared in the Premier's

autobiography as to why - the one you did with Mr. Hoy, the one you sat down and

wrote with him, I say to the Premier.

MR. SIMMS: Claire Hoy told about it in his biography.

What he said was the Premier conspired with senior people in the Liberal Party

to concoct a fictitious poll.

MR. TOBIN: Now, Mr. Speaker, that is what is happening.

The Premier decided to get somebody to write his autobiography with him, that is

what they put into it, I say to members opposite.

There is only one question as relates to the privatization of

Newfoundland and Labrador Hydro and that is whether they agree with privatizing

or disagree with it. Mr. Speaker, people can make up their own minds in this

Province as to whether they support or disagree with privatization. The Premier

has clearly stated, and I admire the Premier for saying it, government will not

proceed unless the people of this Province support it and are behind it. One can

only assume that government is going to seek out a way to achieve that. The

Premier has not been specific as to how he chooses to do it, whether it will be

with a poll -

MR. SPEAKER: Order, please!

The hon. member's time has elapsed.

The hon. the Member for St. John's East.

MR. HARRIS: Mr. Speaker, I rise to support the petition

of the Member for Burin - Placentia West. It is one of the petitions

representing some, I think, in excess of 12,000 people who have had their

petitions presented to the House of Assembly so far saying the same thing. Now,

we know there are other petitions. The Premier has had petitions from 5,500

petitioners delivered to his office in Corner Brook, we hear, and they haven't

been presented in the House. The Member for St. John's North is hiding petitions

in his desk over there that he had presented to him and they haven't been

presented in the House, and I don't know how many others over there have

petitions that they have not presented to this House because they don't want the

information to get out, that the public is totally opposed to this.

Mr. Speaker, we have heard over the last little while -

MR. SPEAKER: Order, please!

The hon. the Member for St. John's North, on a point of

order.

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

I rise to ask the Member for St. John's East to clarify. I'm

not sure I heard him correctly when he said that the Member for St. John's North

is hiding a petition in his drawer that he refuses to bring forward to the House

and that was presented to him by his constituents. If that is what he said I ask

that he clarify it.

MR. HARRIS: Mr. Speaker, that is a point of interruption,

not a point of order. I don't know whether he is hiding it in his drawer or

where he is hiding it. All I am told is that he was given a petition to present

to this House and we haven't seen it yet.

MR. L. MATTHEWS: Mr. Speaker.

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

MR. L. MATTHEWS: Mr. Speaker, I still can't believe what

I have heard from the Member for St. John's East, but if he stands by his

allegation, or statement, that the Member for St. John's North is so closeting a

petition from his constituents, then I would have to advise the House that if

not lying to the House, he is deliberately misleading the House by giving

forward information that is unfactual, unfounded, and unacceptable, and I ask

you, Mr. Speaker, to ask the member to so withdraw unless he can otherwise

substantiate his claim.

MR. SPEAKER: Order, please!

The hon. member is not allowed to use words such as `lying in

the House' and I ask him to withdraw that particular point now.

MR. L. MATTHEWS: Mr. Speaker, if I have used

unparliamentary language, I withdraw it but I want to reiterate that the hon.

the Member for St. John's East is deliberately misleading the House by virtue of

his comments.

SOME HON. MEMBERS: Oh, oh!

AN HON. MEMBER: You can't say that, boy!

MR. L. MATTHEWS: I understand there are rules of

Parliament that have to do with misleading the House, but I don't know of any

rules that say that a speaker can't rise on a point of privilege and tell the

truth. If there are rules against the truth then I would like to hear them.

AN HON. MEMBER: Hear, hear!

MR. SPEAKER: Order, please!

The hon. the Member for St. John's East.

MR. HARRIS: Thank you, Mr. Speaker. I guess the Member

for St. John's North is taking back any unparliamentary language he used in the

past and in the future when he made his comments, because he continued to make

unparliamentary language.

What I said to the House is that the Premier - it is on

public record that the Premier was provided with 5,500 signatures on a petition

that has not yet been presented to this House. I've been told that the Member

for St. John's North is hiding a petition. I don't know where. Whether it is in

his desk or in his drawers or where it is, where he is hiding it. That he hasn't

presented a petition to this House opposed to Hydro. I don't know how many other

members over there have petitions that they have refused or failed to present to

this House. Because they don't want the truth about the opposition to Hydro to

be known.

SOME HON. MEMBERS: Oh, oh! Oh, oh!

MR. HARRIS: The Premier himself -

MR. SPEAKER: Order, please! Order, please!

MR. HARRIS: The Premier himself today said, he

contradicted -

MR. SPEAKER: Order, please! Order, please!

The hon. Member for St. John's North.

MR. HARRIS: This must be a point of order, Mr. Speaker.

MR. L. MATTHEWS: I would ask the direction and advice of

the Chair as to how one could deal with unfounded, frivolous, incorrect,

inaccurate, false, misleading information that is being spouted, that is being

dribbled, from the mouth of the Member for St. John's East. The Member for St.

John's East is deliberately misleading this House. If he is not doing it

deliberately, he is doing it in great ignorance and he is doing it with great

gusto. I would ask him to withdraw in the same spirit of enthusiasm that he has

made the false allegations.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

The hon. members' time has expired.

SOME HON. MEMBERS: Hear, hear!

SOME HON. MEMBERS: Oh, oh!

SOME HON. MEMBERS: No leave!

MR. SPEAKER: Order, please!

The hon. Member for St. John's East said in his comments that

he understood the Member for St. John's North was hiding a petition. It was

challenged on a point of order and it is technically not a point of order to

have a disagreement over what are alleged facts. The hon. Member for St. John's

East then said that he didn't know where he was hiding it but he understood he

had one. Members rise on points of order or points of privilege to clarify these

situations, but technically they are not points of order or points of privilege.

Once a point is made and to some extent clarified I think we should let it go at

that.

I caution members that they should as well try to stick as

close to the facts as they know and can prove and not push other hon. members

with things that really are not - at least, can't be verified publicly. Thank

you.

MR. HARRIS: Point of order.

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

MR. HARRIS: Mr. Speaker, I have what is actually a point

of order as opposed to what the Member for St. John's North said. In his last

remark before the Speaker stood up the Member for St. John's North said that I

had deliberately misled the House. Mr. Speaker, the Government House Leader will

advise the Member for St. John's North, as will the Speaker, that that is

unparliamentary language and he is required to withdraw that point.

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

MR. ROBERTS: To that point of order, Mr. Speaker. It was

very difficult to hear what any hon. member was saying because of the

provocative remarks by my friend for St. John's East. I have no doubt, and my

friend for St. John's North is here and of course will speak for himself, that

if he used in the heat of debate unparliamentary langauge, of course he will

withdraw it. Any one of us would. There is no member of the House, I venture to

say - and certainly I would be the last to say - no member of the House who has

never used unparliamentary language. We all slip into it on occasion in the heat

of debate.

MR. SPEAKER: On the point of order. I don't need to hear

from the hon. Member for St. John's North. It is unparliamentary to call someone

a liar or to accuse someone of deliberately misleading. I understood earlier the

hon. Member for St. John's North to have withdrawn those remarks and -

MR. HARRIS: And he made them again!

MR. SPEAKER: I think he might have used the words

deliberately misleading again. I just clarify that if it was then I suspect it

would be withdrawn.

The hon. the Member for St. John's North.

MR. L. MATTHEWS: Thank you, Mr. Speaker. To the extent

that anything I may have said, Your Honour, was unparliamentary, I withdraw it

with pleasure, but to the extent that the spirit of his remarks was inaccurate,

I stand by the spirit of my having said to him he was misleading. Because I do

not have a petition in my drawers.

SOME HON. MEMBERS: Hear, hear!

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

MR. HARRIS: Thank you, Mr. Speaker. I have a new

petition.

AN HON. MEMBER: Oh, oh!

MR. SPEAKER: I believe - Order, please! Order, please!

I recognized the Member for St. John's East on a point of

order but I feel it appropriate to go to another member to present another

petition. I believe the member for Ferryland was on his feet. I will come back

to the hon. member subsequently.

The hon. the Member for Ferryland.

MR. SULLIVAN: Thank you, Mr. Speaker.

I would like to present a petition from people from the Bay

of Islands district, from the district of the Premier, thirty-six members -

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Well, it will probably take me five

minutes, so I will condense it.

We, the undersigned residents of Newfoundland and Labrador

who wish to avail themselves of their right thus to present a grievance common

to the House of Assembly in the certain assurance that the House will therefore

provide a remedy, we submit - so I will go to the wherefore -

The undersigned, your petitioners, humbly pray and call upon

Parliament to demand the Government of Newfoundland and Labrador not privatize

and sell Newfoundland and Labrador Hydro, and ensure that Newfoundland and

Labrador Hydro remains a Crown corporation, as is duty bound your petitioners

will ever pray.

Now the Premier of this Province has given the wrong

impression to the people on the rate of increase on their electric bills.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: No. According to the figures - if you would

listen you would find out in a minute.

First of all he has stated, in his media release, in the

closed-door session on the Friday before last, he gave information, and he

circulated in this little flyer to households across Newfoundland and Labrador,

that -

AN HON. MEMBER: You are shouting.

MR. SULLIVAN: It is necessary in order to be heard.

He stated that people will have an increase in their electric

bills of $1.25 per month, which is $15 per year, based upon 700 kilowatt hour's

consumption of electricity. He very well knows that is not the average rate of

consumption of electricity in this Province, and I took the effort to find out.

There are 173,000 households in this Province served by

Newfoundland Power, of which 99,000 are served by electric heat, and 74,000 are

served by other than electric heat, with the basic electricity.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: I try to keep busy, because the busier you

are the more facts you get. Most people are not interested enough to be busy

enough to get the facts.

Now the Member for Eagle River wanted to hear it, so I will

ask you to listen and let him hear these figures.

The average consumption of electricity by households in this

Province served by Newfoundland Power is over 1,300 kilowatts. If you just took

the Premier's figure, almost double that, it would be an increase of $30 on each

light bill, not considering that the big majority of households in this Province

use electric heat.

I said in this House before, I stated in this House last week

and the week before, that we are putting an impression out into the public that

their lights bills are going to increase by $15 a year. For the average

household, even without electric heat, we are looking at almost $30 a year.

Those with electric heat, and I've got a copy of my latest bill that has 5,382

kilowatt hours, and when you increase that and multiply it by the figure, you

are getting an increase, at the rate that I consume in my household, that is

only a very modest size house, you are going to have about $115 increase alone

on this bill based on that rate.

Now the Premier has tried to smooth it over. He has tried to

put in the rate subsidization to smooth things over for two or three years,

beyond the next election, for three years of subsidizing the rate to consumers

of electricity of this Province, to try to hoodwink the people in this Province

into believing that electricity is not going to increase. When the Premier

admits that it will increase 11 per cent, you can be guaranteed, or bet your

bottom dollar, it is probably going to increase for the majority of consumers by

about 20 per cent in this Province, excluding Labrador where he has admitted it

is going to go up 30 per cent, and now we will probably see an increase

substantially higher in Labrador in the Province.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: I don't care what you call it. Most members

are not willing to listen to facts, and they are facts that I researched. They

can be corroborated, I am sure, by any authorities. I can tell you where to find

them, if you want to see me, and get these facts. We are getting misinformation

from the government on this issue, a lack of information and I think it is very

important that the people in this Province get the facts on the table to make an

informed decision. The government has failed to hold public hearings; they have

failed to give people an opportunity to hear the facts on these issues, because

they are afraid that if people find out the facts, the resistance against the

privatization of Hydro will be resounding, it will be almost 100 per cent in

this Province.

We have seen over 80 per cent of the people opposed to it

without having access to the facts. I have limited time here under this

discussion to get into the financial aspects of privatization but it is a

burden, financially, on this Province, to privatize, and I will address it in

speaking to another petition, when I have the opportunity again, to look at some

other financial aspects that I haven't been able to address here in this House

in sufficient detail.

MR. SPEAKER: Order, please!

The hon. member's time has elapsed.

SOME HON. MEMBERS: By leave?

SOME HON. MEMBERS: No leave.

MR. SULLIVAN: By leave?

MR. SPEAKER: No leave. The hon. the Member for St. John's

East - I said I would get back to him.

MR. SULLIVAN: I will be back.

MR. HARRIS: Thank you, Mr. Speaker.

I want to say that I support the petitioners in their efforts

to get this House of Assembly to direct the government to stop the Hydro

privatization act. Mr. Speaker, we don't know how many petitions are being

hidden over on the opposite side in the desks of various members. We do know,

Mr. Speaker, that the Premier's office has received 5,500 signatories that have

yet to be presented to this House, and I see the Minister of Industry, Trade and

Technology tearing up what looks to be petitions, Mr. Speaker, as well, of

people who are opposed to the privatization of Hydro. Now, Mr. Speaker, there is

a great effort on the part of members opposite to hide the fact that the public

is against this deal.

The Premier himself, today, Mr. Speaker - and one has to

listen very carefully to the Premier because he wants you to dissect every

single word he said. On Friday, we heard the Minister of Finance say: no, no, we

haven't done any surveys, we are not doing any surveys, we haven't tested public

opinion, but if you listened carefully to the Premier today, what did he say? Oh

well, we might have added one or two questions to surveys that somebody else was

doing; we might have one or two questions to surveys that other people were

doing. The public opinion surveys, polls being done by other people, we might

have added one or two questions but we haven't commissioned our own full survey;

so now, Mr. Speaker, the Leader of the Opposition didn't question him further on

it but what the Premier admitted was, that they have found out what the people

of this Province think because you only need to ask one question, you can tag it

on anybody's survey, and the question is: Are you opposed to the privatization

of Hydro?

MR. MURPHY: (Inaudible).

MR. HARRIS: The Premier knows the answer to that question

and the Minister of Finance knows, too, what the people of this Province want,

because they already have the survey results, Mr. Speaker, and I challenge the

Member for St. John's South to deny it. They already have it, they know the

people are opposed and they are trying to figure out what to do next. They are

trying to figure out whether it is possible that they can spend more government

money to propagandize people and make them believe that something is a good

thing which clearly isn't. They don't want people to know, Mr. Speaker,

including the Member for St. John's North, who does not want people to know that

there are so many people opposed to Hydro because if they did, and if he did, he

would find a way to present that petition to the House even though the Premier

says no!

AN HON. MEMBER: What?

MR. HARRIS: Even though the Premier tells him not to, he

would still find a way to present that petition in the House, if he really

wanted - and I would be prepared to defer right now, Mr. Speaker, in the middle

of my speech, to allow the Member for St. John's North to present to the House

any petitions that he might have over there in his drawer. He is looking very

carefully, he might come up with a petition yet, because he has been uncovered,

Mr. Speaker, he has been discovered to be failing to present the wishes of his

constituency adequately and instead has been bowing to the wishes of the Premier

all the way along. I mean, he was one of the backbenchers - with the exception,

the notable exception, I would say, of the Member for Pleasantville - who was

involved in the conspiracy of silence. He participated fully in that conspiracy

of silence, Mr. Speaker, and he is one of those who now refuses to recognize

that the people of this Province are overwhelmingly opposed to the privatization

of Hydro.

The Member for St. John's North knows - he knows and other

members over there know because they have already polled the Province, Mr.

Speaker, the Premier admitted it today. He said, well we added maybe one or two

questions to existing polls. We didn't do our own poll. We didn't commission a

poll separately but, Mr. Speaker, everybody knows that polling firms every week

are doing polls across this Province and if you want one question added on to

it, you can pay someone to get it added on. In fact, I hear that sometimes

they'll add on questions for nothing. Mr. Speaker, what the Premier has admitted

here in the House today, without telling us the results, is that the government

does actually know. I would say, Mr. Speaker, that they have an obligation to

reveal to the people of this Province what they have already discovered because

I think they have discovered what other polls have discovered, what the internal

PC poll - now I wouldn't ordinarily rely on an internal PC poll and I'm not sure

I would rely on this one but it sounds to me like they are only asking one

question, they're not trying to smooth over the results, what do they call it?

massage the results, as their (inaudible). Their (inaudible) the massage

results.

MR. SPEAKER: Order, please!

The hon. member's time has elapsed.

MR. HARRIS: By leave, Mr. Speaker?

AN HON. MEMBER: No leave.

MR. SPEAKER: No leave.

MR. ROBERTS: (Inaudible).

MR. SPEAKER: Order, please!

The hon. the Opposition House Leader.

AN HON. MEMBER: Does he have a petition there - the hon.

the Member for St. John's North?

MR. W. MATTHEWS: Mr. Speaker -

MR. SPEAKER: I had not seen St. John's North. I've

recognized the hon. -

MR. W. MATTHEWS: Thank you, Mr. Speaker. I know the

Member for St. John's North was standing and I thought he was going to stand to

present a petition, but that's fair enough.

AN HON. MEMBER: (Inaudible).

MR. W. MATTHEWS: Oh, yes, I know. Mr. Speaker, I want to

present a petition on behalf of seventy-two residents of the district of Grand

Bank.

MR. SIMMS: I thought he wasn't allowed to speak.

MR. W. MATTHEWS: I don't know, the Speaker didn't

recognize him.

MR. SPEAKER: I didn't see the Member for St. John's North

standing.

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

I want to present this petition on behalf of seventy-two

residents of the district of Grand Bank - the towns of Grand Bank, Fortune and

one or two others there, Grand Beach, and so on - who are opposed to the

privatization of Newfoundland and Labrador Hydro. They are calling upon the

government to scrap the privatization deal and to ensure that Newfoundland and

Labrador Hydro remains a Crown corporation; that's basically the prayer of the

petition, Mr. Speaker.

I want to take the opportunity this afternoon to present the

petition on their behalf and to say, as other speakers before me have said, that

the opposition out and about the Province to the privatization of Newfoundland

and Labrador Hydro is overwhelming. On a daily basis it is becoming more and

more clear that the people are really strongly opposed to it. I guess, over the

next two or three days, we will have further indication of that, once the

government gets its own polling done and other groups, organizations and

agencies get polling done.

Based upon what we have seen so far, Mr. Speaker, with the

survey that we did on Friday and based upon the call-in show this morning by Mr.

Rowe, both are almost identical, I say to the Member for St. John's South, who

sits with a half-grin on his face. The results are almost identical when you

take into consideration the decided vote - those who are for, opposed and those

undecided - actually the two surveys come out almost identical. I think the

call-in's to Open Line this morning was approximately 150 something

call-in's - 101 opposed, 43 in favour and a very low `undecided'. In the survey

that we did, one of the things we found was that of those - there were more

undecided in the survey we did, by the way, than there were in favour of

privatization.

AN HON. MEMBER: Yes, but you didn't just do a phone-in.

The `undecideds' (inaudible) phoned in.

MR. W. MATTHEWS: No, true, but what I'm saying is there

were people this morning who called the Open Line and said they were

undecided but when we did our 274 calls, the majority - I think there were

thirty who said they were undecided, something like that.

MR. SIMMS: No, 29 in favour, 194 against and 51

undecided.

MR. W. MATTHEWS: And most of those indicated that they

didn't have enough information to make their decision. I would say that most of

those who said they were undecided, said they didn't have enough information to

make the proper judgement. But when you look at both surveys, they were very,

very similar, almost identical stats, really, which tells me that the mood is

sort of set on the issue, but, I guess, that will unravel a bit more over the

next two or three days.

MR. SIMMS: Another tomorrow.

MR. W. MATTHEWS: Another one tomorrow, and then probably

the next day another, and so on.

MR. ROBERTS: It is something to look forward to.

MR. W. MATTHEWS: Well, I am not surprised, I say to the

Minister of Justice, and I don't think, in all honesty, the government is

either. I don't think the Premier is surprised anymore nor are government

surprised. We haven't been surprised since the fall.

MR. SIMMS: Yes, bring back `Baker'.

MR. W. MATTHEWS: Yes, the government has already brought

in closure on second reading of the bill, I say to the Minister of Justice. I

say now, the best thing they could do is withdraw the legislation. And even

though the Premier said today he is not going to do that, I would say that over

the Easter recess, for the two or two-and-a-half weeks, that hopefully, we will

be out of here - hopefully, I say, because I don't like making any commitments.

AN HON. MEMBER: You never know.

MR. ROBERTS: It depends on whether one gets his pay

cheque or not.

MR. W. MATTHEWS: I think that is what will happen. We

will let the dust settle for awhile and then the government will reassess and

re-evaluate. Maybe when they come back after Easter they will then say, it is in

spades now that the people do not want it and they just may withdraw the bill,

which, I think, would be very wise. Certainly we would be satisfied and the

majority of people, 75 or 80 per cent of the population, I think, will be most

relieved if that happens. There is still hope yet.

I wanted to present this petition on behalf of those

seventy-two people of the district of Grand Bank who are opposed to this

situation, and I know from the survey that we did from our office that the

people in the district of Grand Bank are overwhelmingly opposed to it.

MR. DUMARESQUE: (Inaudible)

MR. W. MATTHEWS: Yes, I say to the Member for Eagle

River, very much opposed to it. As a matter of fact, there was only one person

on the survey who said they supported it.

MR. SPEAKER: Order, please!

The hon. member's time has elapsed.

The hon. the Member for Ferryland.

I am sorry, the hon. the Member for St. John's North.

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

I never, ever considered myself to be a Ferryland-type but to

be identified so here today really throws me for a loop.

I want to speak to the matter of petitions because I have

become interested in petitions this afternoon in a particular way. The Member

for St. John's East alleges there is a petition that has been developed out of

St. John's North and the suggestion that I am sitting on it and I refuse to

present it to the House, is an erroneous and preposterous proposition to put

before the House, to say the least. I have listened for the past three weeks and

I was particularly interested in the debate on petitions two or three weeks ago

when the Opposition were coming up with all of those one, two and three-name

petitions. I listened intently to see if, in fact, there was a petition going to

be presented from the other side as being representative of something that came

out of St. John's North, and to this day, I have not heard anything brought

forward from the residents of St. John's North.

Now, I want to say, Mr. Speaker, if there is a petition on

the go from St. John's North, one of two things has happened to it - either it

has been given to members on the opposite side of the House to bring forward,

and I have not been done the favour of being given a copy of it, or else,

however it was supposed to have been conveyed to me, it must have gotten lost in

courier or in the mail, because I can categorically state that I have not seen,

nor have I heard of, nor am I aware of, nor do I have any evidence that there

exists a petition from St. John's North with respect to the Hydro issue, whether

it is against privatization or for privatization. I can tell hon. members on the

other side, however, that I personally did a poll on Thursday evening of this

past week, before my newsletter was circulated, but after all of the television

commentary has been seen by the residents of the Province, and of those who had

an opinion for or against the privatization issue of Hydro, of those who had a

stated opinion, yes or no, of those who had their minds made up one way or the

other, I can tell you that the residents of St. John's North, by virtue of the

mini-poll that I did personally, were two-and-a-half to one in favour of

privatization. They answered yes to the question of privatization.

Now, whether or not they were influenced because of the fact

that I called, I wouldn't be so immodest as to suggest that. I have great

respect for the people in my district. They are independent-minded, they are

smart people, they are sharp people, they think clearly, they know the issue,

they have analyzed the situation, and they vote with their heads and not their

hearts; and if members on the other side would use their heads more than their

hearts, and their heads more than their mouths, and their heads more than

emotion, and let the people respond to information, not mischievous

misinformation, they would get the same results when they do their polling in

their regions.

So I would suggest, Mr. Speaker, that polling is important

when you are polling people who are intelligent and have the thing figured out,

and the residents of St. John's North told me on Thursday evening, from 8:30 to

10:30, that they were two-and-a-half to one in favour of privatization.

I will admit to the members on the other side of the House

that there is a significant number of undecided out there, and I would also tell

them that those who told me they were yes but they weren't sure went down as

undecided. So of those who were clearly understanding of the issue, and had an

opinion, my poll says, Matthews says on behalf of St. John's North, they are

two-and-a-half to one for privatization, and I would suggest that you fellows

take that message and tell your -

I would challenge any of you to give the people of your

district, give the people of this Province, the facts. Give them the facts.

Don't put words in their mouth. Let them put words in your mouth. You are too

busy putting words in your constituents' mouths. You need to give them a chance

to put words in your mouth, and when they speak to you they will speak common

sense. When you speak to them, they don't know what they hear. They hear

nonsense. What you want to hear from them is common sense, and I would suggest

that you let the people speak.

MR. SPEAKER: Order, please!

The hon. member's time has elapsed.

MR. L. MATTHEWS: Give your constituents a break over

Easter.

MR. SPEAKER: Order, please!

The hon. the Government House Leader.

MR. ROBERTS: Mr. Speaker, I compliment my friend on a

very effective and well-delivered speech, with considerable more truth and

substance in it than some of the others we have heard from other members

opposite.

Mr. Speaker, unless somebody else wants to speak on this

petition here -

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: Alright, I would yield then. I will then

give notice, when my friend, the Member for Ferryland finishes, I will move that

under Standing Order 21, we go on to debate interim supply, this never-ending

debate.

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

MR. SULLIVAN: Thank you, Mr. Speaker.

Well, I will tell the Member for St. John's North, if you

want to arrange a meeting in the city and debate merits of privatizing Hydro,

financial and otherwise, I will be available at any time.

SOME HON. MEMBERS: Hear, hear!

MR. SULLIVAN: At any point, and I have a copy -

MR. L. MATTHEWS: I have no problem with merits. I have

all (inaudible).

MR. SULLIVAN: I didn't interrupt you when you spoke, so

if you would give me an opportunity to finish.

I have a copy of the member's letter to the residents of St.

John's North, and it puts forward very, very, weak arguments. He talks about two

or three little items, and none of the facts.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: I am speaking to the Member for Grand Bank.

If you would like for me to present another -

AN HON. MEMBER: (Inaudible) petition.

MR. SULLIVAN: I am supporting the petition not to

privatize Hydro, and the arguments presented for privatizing it by the Member

for St. John's North are not valid arguments.

He said they are going to follow a strategy to strengthen the

private sector to allow it to produce employment opportunities that we so

desperately need. How many people really think that privatizing a monopoly and

driving up costs in the process - and I would like to just touch on costs that

would not be there if we left Hydro as it is. So just think for a second, I will

just point out five or six costs that are there solely because of privatization.

Number one, there is a cost associated with retiring the

debt. Now, Hydro has a net debt of $1,028,000,000. They are going to retire $283

million of that debt right away. Immediately, they are going to retire $283

million. It will cost $20 million to retire that debt, in associated costs. By

the way, they are figures that the Premier gave in the closed session, so if you

don't agree with these figures, you certainly can ask where they came from and I

will let you know exactly where they came from.

There are other fees. The fees and commissions and so on that

are going to deal with the sale, will be $15 million to $20 million. So we have

$20 million by the fees associated with retiring $283 million of that debt, we

have the fees and so on associated with retiring the debt. We have $15 million

to $20 million that is commission on the sale of shares in the new Hydro. We

have to establish the unrecognized foreign currency at the time. That is $90

million to $100 million. These are going on the rate payers, and I will get to

that, how they are going to be financed. Ninety million dollars to $100 million

- and the Premier used that figure, $90 million. If you want to reference it I

will point out exactly where to.

They are also using - and I will tell you why I'm using it

now when we get to the defeasance part - also, the new Hydro has accepted part

of the unfunded liability that is out in that pension plan now. The government

has accepted a portion and it won't even deal with that now under taxpayer

costs. They've accepted a liability of $25 million to $30 million, is the

portion that new Hydro is accepting.

AN HON. MEMBER: Shouldn't we do that?

MR. SULLIVAN: Oh no. I'm just getting to the point now -

the point I'm making here is what is going on to the new rate payers here. That

is factored into the rate payers.

On top of that they will be responsible, the new Hydro, up to

$5 million for any land. Anything beyond that - according to the bill, the

government would have to accept responsibility beyond that $5 million. We have

also costs of purchasing and so on, servicing and maintaining the agreement

involved with defeasance of the remaining debt. I mentioned $283 million. It is

going to cost $20 million in costs. The remaining debt, they are going to

defease $260 million of that over five years, and they are going to take the

remaining $485 million and there is going to be a long-term defeasance on that

debt. That is going to cost about $15 million to do that.

Every other cost associated with forming the new company and

getting rid of this is going to be added on also. Those costs I just referred to

add up to $265 million by the government's figures. However, we are not so naive

as to think it is only going to be $165 million. I would say when the final

tally counts, depending on where we stand with the Canadian dollar and other

associated costs, it could be closer to $200 million. I will get to a few other

aspects that affect rates after but these alone, just those items I mentioned

alone, would not occur if we didn't privatize.

MR. BAKER: You mean to say we would have no foreign

exchange liabilities if we didn't privatize?

MR. SULLIVAN: I'm saying -

MR. BAKER: You are a genius if you can (inaudible).

MR. SULLIVAN: I'm not saying that. Here is what I'm

saying. When they become due, these bonds, when they are held, we will be paying

that right now. In five years' time -

MR. SPEAKER: Order, please!

The hon. members' time has expired.

MR. SULLIVAN: - when some bonds come up -

MR. BAKER: It could be worse.

MR. SULLIVAN: - as they come up -

MR. BAKER: It could be worse.

MR. SULLIVAN: The dollar has been at one of its lowest

points.

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

MR. ROBERTS: Mr. Speaker, I can't speak to the petition -

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

MR. ROBERTS: I can't speak to the petition and so I

won't, except I will say to my friend for Ferryland, if he would like the full

story I will give it to him on the Interim Supply debate which we are about to

get to. Because he is filled with nonsense in the stuff he just gave.

MR. SULLIVAN: (Inaudible) figures!

MR. ROBERTS: The figures are correct, the

interpretation

is wrong.

I would move, Mr. Speaker, pursuant to Standing Order 51,

that the Orders of the Day be now read.

MR. SPEAKER: It is moved and seconded that the Orders of

the Day be now read.

All those in favour of the motion, `aye'.

SOME HON. MEMBERS: Aye!

MR. SPEAKER: Contrary-minded, `nay'.

Motion carried.

Orders of the Day

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

MR. BAKER: Mr. Speaker, there is a slight problem we have

here. In accordance with the interim report of the Select Committee on the

practice of public accountancy tabled by the chairperson on Friday past I would

like to move that the resolution as adopted by the House on December 3, 1993, be

amended by striking out the words `31st of March, 1994' and substituting the

words: June 30th, 1994.

The reason, Mr. Speaker, is that because of some procedural

difficulties the Committee will not be ready to report by March 31 and therefore

we need to give them a new deadline. By leave of the House I would like to put

that motion.

MR. SPEAKER: Is leave given to the hon. minister to put

the motion at this time?

I recognize the hon. Member for Mount Pearl.

MR. WINDSOR: Thank you, Mr. Speaker. Just very briefly to

respond. We have no problem with the particular motion. We just want to point

out the difficulty is not with the Committee. The Committee has met, but it is a

logistical problem with Hansard and getting the transcripts of the meetings. As

soon as those are available - which I hope will be some time over the Easter

period when Hansard, if we do break for Easter, the Hansard staff will be able

to catch up and provide the Committee with the information. My colleague will no

doubt call the Committee together and we will proceed with our hearings.

MR. SPEAKER: All those in favour of the motion to delete

March 31st and substitute June 30th 1994, `aye'.

SOME HON. MEMBERS: Aye!

MR. SPEAKER: Contrary-minded, `nay'.

Motion carried.

The hon. the Government House Leader.

MR. ROBERTS: Mr. Speaker, the journals of the House, if

they would, should record that I took no

part in that discussion as I have

declared a conflict in that.

Mr. Speaker, could we do Motions 2 and 4 which simply are

first readings and then I will ask if Your Honour will be good enough to call

Order 2 (

a) which is the Interim Supply debate.

Motion, the hon. the Minister of Finance to introduce the

following bills entitled:

"An Act To Amend The Income Tax Act", (Bill No. 10).

"An Act To Amend The Retail Sales Act", (Bill No. 11).

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

I am having a little difficulty hearing the Clerk reading the

bills.

On motion, Bill Nos. 10 and 11, read a first time, ordered

read a second time on tomorrow.

MR. SPEAKER: The hon. Government House Leader.

MR. ROBERTS: Your Honour, could you call Order 2 (

a) which is the adjourned debate on the Interim Supply, and I have checked with the

Clerk at the table, by the clock or the tally being kept by the officials, Your

Honour, we have now used three hours and forty-five minutes on the debate. I

don't say that in any pejorative sense except simply to remind members of the

score sheet as it were, because this time comes out of the seventy-five hours

allowed by Standing Order, I think 117, whatever the Standing Order as it

applies.

MR. SPEAKER: It is moved and seconded that I do now leave

the Chair for the House to resolve itself into Committee of Supply respecting

the granting of Interim Supply to Her Majesty.

On motion, that the House resolve itself into Committee of

the Whole, Mr. Speaker left the Chair.

Committee of the Whole

MR. CHAIRMAN (P. Barrett): Order, please!

The hon. the Government House Leader.

MR. ROBERTS: Mr. Chairman, I would like to say just a few

words if I could, with respect to some of the points made by my friend from

Ferryland in a petition he presented in the House a few moments ago because this

is three or four times he has used these numbers - I don't quarrel with him

using the numbers; in fact in my understanding, they are correct; the numbers

themselves are accurate but his

interpretation of them is not, and if he wants

to get into an argument, we can. I am here simply to put on the record what I

understand to be the facts of the matter, hon. members can make what they wish

of it; but I made some notes as my friend from Ferryland spoke and he spoke of

$1,028 million being the net debt of Hydro, that's my understanding of

AN HON. MEMBER: (Inaudible) million.

MR. ROBERTS: That's right, $1,028 million I said which is

$1,028,000,000, the same thing, I say to my friend.

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: Yes. The net debt, that's the gross debt

less the sinkers. I have it as $1,030 million and I don't want to be heard to

say: what's a million but I think my friend and I will agree that the figures

are essentially the same. Hydro's net debt as of today is about $1,030 million;

$1,030,000,000. He went on to say that $283 million of this will be paid off

right away should privatization occur and I accept the number, I haven't check

the Premiers speech, I think the Premier used the figures here in the House when

he introduced the bill at second reading -

MR. SULLIVAN: A net of $283 million.

MR. ROBERTS: A net of $283 million is to be paid off. Now

I would say to my hon. friend, that is nothing more or less than the short-term

debt of Hydro that is due right away; it has to be paid off at some point or

rolled over and there is no difference in one sense if it is paid off by new

Hydro or old Hydro, there is a difference in another sense in that if it is paid

off now it will not be on the debt of the contingent liabilities of the

Province, it will still be a debt of Hydro either way, but that -

MR. SULLIVAN: No, my

interpretation of that is that,

initially from the sale of shares should realize let's say, $750 million, we

will use that as a figure -

MR. ROBERTS: I have no idea what -

MR. SULLIVAN: (Inaudible).

MR. ROBERTS: Alright.

MR. SULLIVAN: (Inaudible) $400 million -

MR. ROBERTS: Yes.

MR. SULLIVAN: That would leave $350 million, they are

going to amortize a lot of the costs, which meant out of the sale of shares, the

difference, they are going to pay down $283 million out of that $1,028,000,000.

Then they are going to take the remaining debt and do two defeasions on the

remaining debt.

MR. ROBERTS: Hold on now. My friend will agree, he

shouldn't confuse the source of financing with the use to which it's put, and he

may be in danger of doing that, so let me see if I can perhaps help.

I don't know what the proceeds of the sale of shares will be.

I don't know how many shares there will be, or what the price would likely be; I

don't know that, but money will come in.

Hydro has short-term debt, which I believe is defined as

being one year or under. I could look up the annual report, but that's the $283

million in my figure. Hydro will pay that off. New Hydro may well choose to use

proceeds from the sale of Treasury shares for that. That's up to them, but it's

no net cost to anybody. All that happens is -

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: No, my hon. friend now agrees with me, but

earlier he was saying there was $165 million cost. He took that $283 million and

said that's $15 million to $20 million a year every year. That is not correct.

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: I agree it is not correct. My hon. friend

from Ferryland has said in the House repeatedly - I believe he said here in

committee as well -

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: That is not a cost of privatization, as he

has said. That is simply a matter of Hydro's debt. Hydro owes the $283 million.

It falls due in this twelve months, so if it's paid off by Hydro it is not a

cost of privatization. If Hydro chooses to go out and sell shares to pay off

that debt, as opposed to continuing to carry at the bank, it doesn't change

anything unless the cost of equity is higher than the cost of debt, and I will

come back to that.

He then went on to talk about the $15 million to $20 million

in fees on privatization. Now I do not know what the amount is, but I will

acknowledge that that is a cost that would not be incurred if Hydro is not to be

privatized. There is no question at all, that $15 million to $20 million is not

to be incurred if Hydro is not privatized.

Now he went on then to talk about the foreign exchange loss,

which is of the order, we understand, of $90 million to $100 million. There is

an unrecognized foreign exchange loss. It is in Hydro's statements, if one wants

to look it up, but as with many of these things it is in an accountant's note.

You have to be an Aramaic accountant to understand, and I am not an accountant

of any sort, let alone an Aramaic accountant, but that loss, I would say to the

committee, and I would say to my friend, has got to be paid sooner or later in

any event. That is simply we went overseas, I believe it was in the seventies,

the mid-seventies, and borrowed Swiss francs and Japanese yen.

Now when one borrows foreign one takes a chance, unless one

hedges, and there were no hedges in those days. The Canadian dollar has gone

down against both of those currencies, and the result is that a $50 million or

$60 million loan, whatever the amount borrowed in Swiss francs and Japanese yen

produced when converting to Canadian dollars back in 1973 or 1974, will now cost

$150 million to service, to pay off. In other words, it now takes three Canadian

dollars to buy a given quantity of Japanese yen,

whereas fifteen or twenty years

ago it took one Canadian dollar. Now that's a recognized hazard when one borrows

in a foreign currency and incurs an obligation to pay in foreign currency. I am

not trying to be penny wise and pound foolish. Governments of all ilks have

borrowed in foreign currency in this and in other jurisdictions. The other side

of it is, one gets a lower interest rate.

MR. SULLIVAN: (Inaudible if it is privatized we will now

have to evaluate that at the current value today, or whenever the transaction,

whereas the bonds, a lot of them are not due until 2016.

MR. ROBERTS: Mr. Chairman, these loans are not secured by

bonds. The foreign exchange loans are all short-term loans, carried as such in

the books of Hydro, would have to recognized for that value whenever. In fact,

my hon. friend, if he checks into it at all, will find that Hydro has already

come forward to the Public Utilities Board in its last rate hearing with this

amount, and has asked for some relief to be given for it. That amount properly

has to be paid, I think my learned friend will agree, by the rate payers,

because they had the benefit of it.

If we had borrowed Canadian - or, in fact, not us - if the

government of the day, or Hydro of the day, with the authority of the government

of the day, had borrowed Canadian, they would not have had the foreign exchange

loss, but they would have had a much higher interest rate, so the rate payers

would have the benefit of it. So it follows that the foreign exchange loss, in a

discussion of the cost of privatization is a complete red herring. It has no

bearing one way or the other. It is no greater, it is no less. It has to be

recognized, it has to be dealt with. Hydro may not pay it off. That is up to

Hydro. Hydro may choose to hedge.

Those are three of the items he mentioned. Let me go on to

the unfunded liability of the pension plan. The Premier has dealt with that, how

it is divided into a number of parts. New Hydro will assume the part that

properly belongs to Hydro employees. Again, that is not a new cost. It is simply

recognizing a cost that is there. In fact, the Province benefits from that,

because whatever amount new Hydro assumes, because it is attributable to its

employees, comes right off the unfunded portion of the Province's liability for

pensions. We have, as my friend the Minister of Finance has made clear, this

incredibly large unfunded liability. Part of it is for Hydro, or Hydro's

employees. So when Hydro's employees move out the unfunded liability goes with

them. The same as when NLCS employees move out, if we carry through with our

plan to privatize NLCS. That unfunded liability goes with them. We pay our share

of the liability. In the case of Hydro we are assuming it by means of - I think

it is a fifteen year debenture. It is dealt with in the privatization act.

Then he talks of $5 million for land. Mr. Chairman, well, no

more than $5 million. There is a cap that Hydro has to bear. All that says is

that if there are compensation claims brought forward Hydro will have to absorb

up to $5 million worth. So be it. Hydro has to absorb that now.

AN HON. MEMBER: Oh, oh!

MR. ROBERTS: My friend for Kilbride, (inaudible).

MR. E. BYRNE: If all we are doing is transferring assets

from old Hydro to new Hydro, (inaudible) why is there a need for an

expropriation (inaudible)?

MR. ROBERTS: We are transferring assets and liabilities

from old Hydro to new Hydro, as the act says. That is

section 4 of the act, I

say to my friend for Kilbride. The concern is that there may be somebody out

there with a third-party claim which has not come forward and yet is valid in

law. So new Hydro will absorb up to $5 million of that. The payment is to be

determined in accordance with the principles of the expropriation act. It is not

a new cost. It may come to nothing. It is just a provision. If somebody comes

along and says: Hydro's diesel plant is built on my land, and accordingly Hydro

owes me some money, because the act deems it to be expropriated, then new Hydro

pays that money. It is not a new cost. It is a liability that is there. It may

be unrecognized, it may be unquantified, but it is still there. It is not a new

liability, and above all it is not a liability that is incurred because of

privatization. It is there.

Then he talked about servicing the defeasance agreement. My

friend for Ferryland mentioned that in the first five years, I think it is $260

million to be defeased?

MR. SULLIVAN: (Inaudible).

MR. ROBERTS: Yes, and then the rest over a longer period.

Mr. Chairman, there is no cost to that. That is simply replacing Hydro's

mid-term debt - not long-term debt - with other debt. The cost will be the same.

There should be no increase one way or the other.

What it comes down to - and I simply say to my hon. friend -

the facts of the matter are that there are two costs which privatizing Hydro

will generate. The first is whatever fees and commissions may be incurred. One

can't question that. One may question the amount of them or the necessity for

them, but whatever is incurred has to be paid by somebody and whatever is

incurred is the result of privatization.

MR. CHAIRMAN: Order, please!

The hon. member's time is up.

MR. ROBERTS: So soon. Well, another time.

MR. CHAIRMAN: The hon. the Member for Ferryland and the

Opposition party Whip.

MR. SULLIVAN: Thank you, Mr. Speaker. I made a couple of

notes there on what the minister stated. The cost of defeasing, the cost of

servicing and managing and so on this defeasance, will be placed with a

custodian and they will use the security that is there against it, so the

possibility, we will say, where the Province is alleviated from it. There is a

cost with that. The minister is setting up a defeasance agreement. There are

costs. Probably $10 million to $15 million costs associated with setting up and

servicing and maintaining this defeasance agreement. For the minister to say

there is no new cost at all for setting up this, that is entirely incorrect. The

Premier mentioned there is going to be a custodian; I think is the word he used.

I can assure you they are not going to do it free. They all attach with fees.

There is a $15 million to $20 million he might make a note of.

I indicated on land that they would have to pay up to $5

million. That is a possibility. Up to $5 million. I said beyond that the

government is going to assume, according to the bill we were debating before the

House, I said it could be up to $5 million. It could be none, but it would be up

to $5 million. Once it goes beyond $5 million the Province accepts it then, and

the taxpayers of the Province pay it out. If it's $10 million the taxpayers pay

$5 million and $5 million comes under new Hydro which will be paid by the

ratepayers in the Province.

It's my understanding too that at the date of transaction

your unrecognized foreign currency is deemed to have been valued at the date of

sale. If it continues as it is now we do not have to pay these as of today, some

will be next year and some the year after and the year after. I've never stated

that it will never have to be paid. What I'm saying is we now have an

unrecognized foreign currency of $90-$100 million that we're sort of cashing in

at a time when the dollar is weakest. If the dollar was on a par - if the dollar

was valued higher, much higher, in comparison with the Swiss franc and Japanese

yen, we wouldn't have this unrecognized foreign currency but it is there now and

we are cashing it in at the weakest time. The dollar, who knows, could get

weaker or at least it's been maintaining at a very low level. So that's a real

cost that's going to have to be met today, not in 2016 or in 2014.

I've stated in the House before that I didn't knock the

government for going out and getting Swiss francs and Japanese yens, I've never

made that point. The point I made, I've stated before and you'll read it in

Hansard, is that if you go to the market you can get cheaper borrowing somewhere

else, more power to you if you can get cheaper borrowing. That's what you try to

do is borrow as cheaply as possible -

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Yes and I've indicated that it is

unfortunate that it would be transacted now when it has hit its weakest time to

have to sell your foreign currency, technically. If you've going to visit the

United States, when the dollar is at its weakest point, if it's up over ninety

cents or up to a dollar, you're not getting the same - it's going to cost and

that's the price we have to pay. That's what I stated before in this House

several times and I'll state again. There are fees and commissions that we've

looked at, $15-$20 million, who knows they could be underscored. I think $15-$20

million could be the bottom side of what we're going to get out on the market.

These are costs - what I'm referring to - all borne by the rate payers. I ran

out of time before I got to mention other costs.

We're going to have new equity into this new Hydro. We're

going to have to give this new Hydro probably 6-7 per cent more return on their

investment then Hydro is receiving on its investment and that's gone out to -

probably a rate of return like Newfoundland Power received, at 13.84 per cent

over the last five years - we're going to have to pay that extra 6-7 per cent to

a new company, a new business. Investors in this new company expect to get a

return on their dollar, on their investment, that they would get in a similar

type company anywhere else in this country. If not, they're not going to invest

in this new company. Its prices are going to fall and it's not going to be a

positive place to invest. We're obligated to give that rate of return. If the

Utilities Board doesn't do it, we're going to have a new company that's in

trouble on the markets and that is going to cost in the vicinity of $20 million

a year, those extra costs.

I never said debt premiums and so on related to the retiring

of that short-term debt of Hydro are going to be on an ongoing basis, I didn't

say that. It is a one time cost associated with it, I never made that point at

all. In fact, a lot of those one time costs that we might - like the sale of

shares and so on, they're one time costs but they're not going to be paid out

this year. They would be amortized in a normal debt of the Province over a

period of - let's say, twenty, thirty or forty years. If the company has the

cash flow to retire some of that down, fine but I would assume all these costs

are going to be amortized over a longer term.

Another point, that is going to cost the rate payers too that

I didn't get to, as the company reduces its debt and increases its equity we're

going to have to give a further return in the future to these investment people.

We are further going to have that added on to the rates that are charged for

electricity in this Province, as we convert debt to equity. So there's a whole

range of costs. If you took all those costs - whether one time or ongoing costs

- and just increased them 6-7 per cent, the extra return is an every year cost

from now and forever more on the rate payers of this Province. We have some one

time costs that should cost - those one time costs alone - just a one time cost

should cost around $15-$20 million a year amortized over, let's say thirty

years. That's not counting, as I mentioned, our costs that are going on forever

as the debt to equity is reduced, that return, the return that's also going to

be found on the higher profits given out to shareholders and so on and the

owners of that company.

There is a very clear, distinct, increase in rates to the

taxpayers, and the Premier has admitted it is going to go up 4 per cent higher.

He said 4 per cent higher than if we did not privatize. He has admitted it is

going 4 per cent higher on your light bills. That is stated in his media

release, and it is shown on the back of the chart. I do not know if you have a

copy. We had to try and get a copy some way. We were not allowed into the

meeting, the closed door session. If you want to see it, come over after.

I find there are a lot of things that have not been shown to

the public, have not been shown to us, and have not been brought out. We are

showing a 700 kilowatt consumption, and things of this nature. It is very

misleading information and not getting the true facts out. It is unfortunate

when you have people here, elected people in this House of Assembly who are

refusing to put a public forum out there, to debate these things in a public

forum. One way communication, whether through TV or through a householder does

not give the public an opportunity to ask questions. There are maybe merits in

some part but I can guarantee you there are a lot of demerits in a lot of other

parts of it, and so on. Over all it is going to cost, between the rate payers

and taxpayers of this Province, more money than if we never privatized, and that

is the bottom line. It will cost us more money.

Yes, we will save $25 million a year in financing that debt

as long as that debt is there, whether it is forever or whether it is for thirty

or forty years, that is the only financial figure in the plus column of this

privatization deal. I have not seen any other positive signs on the positive

side of the ledger in this deal, but I have seen a whole ever increasing array

of negatives, from the advertising campaign $100,000. How many more $100,000 are

they going to blast over the media and on radio and television over the next

while? How far more are they going to accelerate to sell something that the

public is not willing to accept? How many more dollars are going to be wasted in

the process?

AN HON. MEMBER: How much would you like to have?

MR. SULLIVAN: I would like to have none wasted. I would

like to face the music and face the truth now, deal with it, and get this

privatization bill out of the way. The Premier told us we need both bills, on

Tuesday, told us in a plea and confession to the public of this Province. Then

he came back Thursday and said we do not need the privatization bill now. How do

we know what to believe? Information has been kept from us, kept from the

public, and when you do tell it you come back the next day and tell us it was

not true.

AN HON. MEMBER: Phone Bas.

MR. SULLIVAN: I phoned Bas twice in my life and Bas

phoned me once, and that is as often as I phoned. Anybody will tell you. You do

not have to be Bas. You can be Bill, you can be John, Mary or anybody, and they

will tell you that if you are naive enough to think that the people in this

Province are, number one, in support of Hydro -

MR. CHAIRMAN: Order, please!

The hon. member's time is up.

The hon. the Government House Leader.

MR. ROBERTS: Mr. Chairman, I will try to be very brief. I

want to continue the point I was making and then deal with one or two comments

by my friend for Ferryland so that these matters are on the record and members

and people can do as they wish with them.

Let me first, in a preliminary way, say to my friend that

there is nothing more public than the House of Assembly, nor should there be.

That is why the House is here.

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: We are in Committee of the Whole now, I say

to my friend. There are two costs which are incurred by Hydro's privatization.

One is the fees and commissions, and the second is the cost of servicing equity

as opposed to the cost of servicing a comparable amount of debt, because the

debt equity ratio will increase from the present 18-82 equity to debt to, I

think it is 57-43, 43 equity and 57 debt.

MR. A. SNOW: (Inaudible)

MR. ROBERTS: My friend for Menihek is not in his seat,

and he is out of order, so in both counts he is acting in the usual way. He is

also being rude and that is not unusual, I fear, for him, as well.

Now, let me come back to the gentleman for Ferryland. Those

two costs, Mr. Chairman -

MR. A. SNOW: (Inaudible)

MR. ROBERTS: Mr. Chairman, the gentleman for Menihek is

not going to shout me down, he is certainly not going to think me down, so he

might as well possess his soul in patience and when his turn comes we will hear

his contribution, if any.

Now, let me come back to my friend for Ferryland. There are

these two costs that would be incurred. One is a one-time cost and the second is

a continuing cost, we have acknowledged these quite readily, we have from the

start. As against that there is the continuing saving of whatever it may be - we

have used the number of $25 million - the annual interest costs - forgetting

principal amortization - the annual debt service costs, the annual interest

costs on the capital sum that we would get as the net value of our equity.

Mr. Chairman, I just want to put those on the record. My

friend may well get up again and use his numbers again, but let me say the

record is complete.

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: The numbers my friend used are correct; it

is just the

interpretation is wrong, and let him know what the facts are. The

facts are there are these two one-time costs.

Now let me talk about the foreign exchange. My friend waxes

eloquent about this; it is in the financial statements. I am reading page 31 of

Hydro's 1992 Annual Report, and it says: with respect to foreign currencies at

each balance sheet date - that is December 31 for Hydro - monetary assets and

liabilities, except for long-term debt and its related current portion, are

translated using exchange rates at that date. In the case of Hydro, long-term

debt, including the current portion, is translated in accordance with rate

making practices at exchange rates prevailing when the debt is incurred.

That is what I meant about Aramaic accountancy. You've got to

know that means there is a large unrealized foreign exchange loss there. It goes

on -

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: The long-term debt is about $60 million on

the foreign exchange, about $150 million in Canadian dollars. It is carried at

$60 million and will cost about $150 million to pay it off. That is the

unrealized amount, and I am using round figures; I don't have the numbers right

to hand, but that is the one we have been talking about as the foreign exchange

debt.

The note goes on: Therefore no recognition is given in the

accounts to unrealized gains or losses, except that commencing in 1992 the

Public Utilities Board requires Hydro to provide $1 million a year provision for

an unrealized foreign exchange loss on its Swiss franc denominated debt. This

provision is included in interest expense. And my hon. friend will acknowledge

that since it is included in interest expenses it is paid for by the rate payers

as one of the operating costs of the company.

The point I make very simply is not that the debt is not

there. The debt is there. It has not been realized, but it has to be paid by the

rate payers and, in my view, is a proper cost. It will not get any larger

because of privatization; it will not get any smaller.

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: No, the debt will be the same. It will just

be transferred from the contingent books of the Province on over into Hydro.

MR. SULLIVAN: (Inaudible) these factors will also impact

on this estimated rate, including - the Premier stated that in his release.

MR. ROBERTS: Yes. Of course it will have an impact on its

rates.

MR. SULLIVAN: It will all impact on it also in addition.

MR. ROBERTS: Of course. It's got to be serviced -

MR. SULLIVAN: In addition to that extra (inaudible).

MR. ROBERTS: That debt has got to be serviced. It is

being serviced in part now, except a million dollars is probably an under

provision.

Now my friend from Ferryland seems to thing we should go

careening around in foreign exchange, we should speculate on what the dollar is

likely to do. I acknowledge the dollar is down right now. It may go up, it may

go down, but the Province, in my view, ought not to be speculating.

Be that as it may, the point I am making is that the foreign

exchange loss is not created by privatization. It is not increased by

privatization. It is not decreased by privatization. It is simply there. It has

been there all along. In fact, it was there from the moment in 1973 or 1974, or

the possibility was there, from the moment in 1973 or 1974, when the Cabinet of

the day, of which I was not part, authorized Hydro to borrow the money overseas.

It is not long term. I understand these are short-term loans that simply are

being rolled over.

Now, Mr. Chairman, one other point, my hon. friend says the

cost of servicing the defeasance is $10 million to $15 million a year. I can

only say my hon. friend -

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: One shot then.

MR. SULLIVAN: (Inaudible) setting up defeasance and so on

are primarily a one-time shot, establishing it. There could be some managing

costs ongoing (inaudible).

MR. ROBERTS: The management costs are inconsequential

because Hydro already manages its own debt. My friend and I can agree on that,

but the one-time costs, I have no idea where he gets these numbers, because they

are not real. There is no cost in acquiring - all the defeasance is going out

into the market and buying securities of a certain type, AAA, of a maturity and

in an amount sufficient to set off against the debt the government has

guaranteed. There is no more mystery to it than that, and as they are matched

off -

MR. SULLIVAN: (Inaudible) cost.

MR. ROBERTS: There is no cost. It is the same cost, the

cost of servicing the debt. The cost is there.

MR. SULLIVAN: What about the cost of managing?

MR. ROBERTS: The cost of managing, my friend and I just

agreed, is inconsequential. The cost of managing is borne by Hydro already. It

is already managing its own debt. All that they do, Mr. Chairman - let's suppose

Hydro has an obligation to pay $20 million in the year 2010, to take a number.

All its issues are listed in the annual report.

MR. SULLIVAN: You are saying (inaudible) -

MR. ROBERTS: Hydro has a maturity of $150 million coming

out in 2017. That is Series X, borrowed in 1992. One hundred and fifty million.

Hydro will go out and it will acquire in the market securities adequate to match

that $150 million. Instead of paying the interest on the debt the government

will simply get the money from Hydro. Hydro is now paying the interest on that

debt every year. It is part of its interest expense. Hydro will take the money

it earns on the securities, the interest it is getting it now owns, pay it over

to the government, the government will use it to pay the interest. At the end of

the day, through the combination of sinkers and the balloon payment at the end

of the maturity period, the debt will be retired in full. It is really a very

simple concept.

MR. SULLIVAN: Did you say the cost to acquire?

MR. ROBERTS: The cost to acquire what -

MR. SULLIVAN: (Inaudible) purchase of the securities

under the defeasance agreement is costing nothing? Is that what you are saying?

MR. ROBERTS: It is inconsequential.

MR. SULLIVAN: Is there a figure? Could you give me the

figure?

MR. ROBERTS: I don't have a number but -

MR. SULLIVAN: Could you give me a ball park figure?

MR. ROBERTS: I will see if I can get one. It is no

different than when my hon. friend was in business on his own, before he came

into politics to manage the public business, he may have owed debt. All that

would mean is that he went out and instead of owing a long-term debenture to the

bank or some bond holders, he would go out and buy other securities, he would

get the interest on the securities, pay it over to the people who held the debt

to pay his obligation, and that is all it is.

MR. SULLIVAN: (Inaudible) custodian to do this, to manage

(inaudible) -

MR. ROBERTS: Yes, there is a custodian between - but

there is a custodian there now for Hydro's debt.

MR. SULLIVAN: I know. He has mentioned a custodian as a

result of this new debt. So -

MR. ROBERTS: There is a custodian but - there is a

trustee.

MR. SULLIVAN: Can you give a figure?

MR. ROBERTS: No I can't.

MR. SULLIVAN: Can you provide a figure?

MR. ROBERTS: I can try to get them but I don't have them.

MR. SULLIVAN: I'm saying it is $10 million. Can you

provide a figure? One million dollars, two million dollars?

MR. ROBERTS: I will try to get it, I said to my friend.

MR. SULLIVAN: Sure.

MR. ROBERTS: He can badger me -

MR. SULLIVAN: That is what we would like.

MR. ROBERTS: - but I can't give it to him now. All of our

debts, Mr. Chairman, either in Hydro or in the Province, have trustees on them.

That is the basic form of the financing -

MR. SULLIVAN: (Inaudible) defeasance (inaudible).

MR. ROBERTS: Mr. Chairman, the hon. gentleman is exposing

his lack of knowledge of how these things work. It is a very simple agreement.

Just knock the zeros off - a lot of zeros on it, I acknowledge - but knock the

zeros off and they make sense. I'm about to run out of time and I don't want to

trespass on the Committee.

MR. CHAIRMAN: Order, please!

The hon. member's time is up.

MR. ROBERTS: So soon.

SOME HON. MEMBERS: By leave!

MR. ROBERTS: If hon. members insist I just want to say

one other thing. To come back to the $5 million cap on the land claims. The land

claims, we know of none. The Hydro officers have not been able to identify any

to my recollection and understanding. There is a possibility there may be some.

All that was done was a very sensible arrangement was made that new Hydro would

bear anything up to $5 million. The best estimate we have is that these will

come to well under $5 million. In fact, if memory serves me from one of the

meetings I attended, Hydro has notice from some people. It is going through the

legal process. They estimate it may cost $25,000 or $50,000.

There is a possibility that somebody may come along and say:

Hydro's building is on my land and I have a claim. In which case they would not

be able to pursue the claim. They can't make the building come off the land, but

Hydro would have to pay the cost. There has been an arrangement struck that the

first $5 million in those costs would be borne by new Hydro. Anything beyond

that would be taken up by the Crown, or by old Hydro. That is in the bill and it

is very clear.

That is not a new cost. It may be an unrecognized cost at

present. If in fact there are costs and are not now unrecognized then there are

unrecognized costs. It is not a new cost, it is not an additional cost, it is

not the result of privatization. I thank the Committee, Mr. Chairman.

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

MR. SULLIVAN: Thank you, Mr. Chairman. I will take a

couple of minutes before I sit down. The minister stated - and I find it very

difficult to believe - that establishing a defeasance agreement for the

remaining debt, the $260 million and the $485 million, very difficult to believe

when a custodian is established to acquire, purchase and to manage that there is

no fee. That is unrealistic. There is nobody going to establish and set up a

defeasance agreement because a defeasance agreement is an agreement that puts

money into certain securities established and a custodian for these securities.

There is a one-time cost I am saying, a minimum of $10 million needed here and

the Government House Leader said: no cost, he said very little cost. He has

failed to provide a figure for that cost. He has probably gone to get the figure

now but I can assure you there are several million dollars, a minimum maybe of

$15 million there and I want to clarify that point, that what the minister

stated is incorrect. Nobody is going to set up an agreement, and we keep in mind

we don't need to have any agreement if Hydro remains privatized.

If Hydro is sold, we need the defeasance agreement to sort of

shift, not legally but shift the debt from this Province on to new Hydro by

virtue of having two defeasance agreements, one for five years and one for a

long term, that is going to be about $485 million in the long term, and I would

hope that the minister will get back and will give us a figure because they have

failed to provide it because they know there are many other new costs associated

with this agreement that are not there as it currently stands. They might have

the same - manage the funds but they are managing a whole separate type of

securities now that has to be purchased, that has to be serviced and it has to

be managed and there are new costs associated with it, he has failed to address

that and I am quite sure that we will find out in due course exactly what the

cost of carrying out this agreement is.

Now overall, there are substantial costs to rate payers,

others, I didn't even get to touch on in the shifting the $15 million rate

subsidization, the shift on to residential consumers of electricity in this

Province are going to increase, it's going to be cushioned for three years and

then it is going to take quite a jump from year one. We can see they will

cushion it, they will try to absorb it so it will be much more politically

acceptable, these rate increases during the short term, but he is not going to

solve the problem when the Premier stands up and admits in this House, that it

is going to go up a minimum of 4 per cent and then the Government House Leader

tried to tell us that there are only two costs associated with privatization,

that is totally incorrect, it is wrong and time will certainly tell and when he

comes back with the figures on these costs again, we will find out what the true

figures are.

We have been saying it all along, they have been hiding

figures, eventually they get into the public forum and make an admission, so

much so that the Premier went into a closed-door session with the media to make

sure he provided these figures to them, and he provided figures here and figures

I am using and figures here that the Premier has stated to the media, in spite

of what the Government House Leader states, he said: Electrical policy changes

influencing rates, and here is what is going to influence rates, in addition to

what's already mentioned, he said: Rebating the federal corporate tax to the

benefits of the customers and so on would certainly have an effect. If you don't

rebate it, it will go on to the rate payers of the Province; he says, we are

going to phase in municipal property tax; phase in taxes, there is only a very

small number of municipalities in this Province that would pay tax to Hydro. It

is only $1 million total out of all the municipalities which is very little,

practically nothing, except for the communities that are going to have the

opportunity and the money will be taken back in another avenue anyway; they said

we are going to eliminate over five years of subsidy paid by Hydro's Island,

industrial customers in respect of their rural deficit and so on.

In other words, what we are going to do, he is going to add

on a price tag that people in rural areas where it is more costly and more

sparsely populated are going to pay a burden for living where they are; in other

words, they are going to pay a higher cost there, they are doing it now in

municipalities through roads and all other aspects, they are being continuously

reduced and this is furthering that agenda there, it is going to be detrimental

to consumers of electricity from a residential point of view in this Province.

The figures that they are indicating here are not real figures and the

Government House Leader stated that there is no cost and before closing today I

hope he will get back to me with a figure on what the cost of this is going to

be.

Thank you, Mr. Chairman.

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

Extern.

MR. J. BYRNE: Thank you, Mr. Chairman. I rise today to

say a few words on the Interim Supply Bill, Bill No. 7. This bill is requesting

the approval of basically $1 billion which is almost one-third of the 1994

Provincial Budget Expenditures.

Mr. Chairman, I believe we all understand the importance of

this bill, in that it allows government to continue to operate and to pay its

bills after March 31. Mr. Chairman, since the government was first elected in

1989, they have pursued a policy of cut, cut, cut to the bare bones, and I

believe it is having a counter-productive effect on the economy of this

Province. They have reached the point of diminishing returns.

The Premier and his administration are trying to cure in four

or five years the debt load that was accumulated over forty-five years.

Now I understand that while it is very important to the tax

deficit, it is impossible to rid ourselves of this problem in a few short years.

The analogy I make is similar to a person having a mortgage on his home refusing

to heat his home, refusing to send his children to school, refusing to feed his

family, et cetera, so as to pay off his mortgage in four or five years. It just

doesn't make sense to have such a policy.

The hallmark of this administration, Mr. Chairman, is that

they always try to move to fast. This government refuses to listen to the

people. They create issues, they throw issues out to the public, they say they

will implement laws and regulations within months, they create havoc because

they simply try to rush things and deal with the consequences later. A few

examples of what I am speaking about are; the amalgamation issue, it was to be

completed in three months and here we are four years later still not done; the

restructuring of the municipal grants caused havoc in mid-year with the

municipalities, I don't know if they completely got over it yet; the ATV

regulations which are going to be implemented in four short days, poor planning,

rushed, as usual; and of course most recently, the privatization of Newfoundland

Hydro, there has been a lot of discussion on that over the past while and I'm

sure there will be a lot of debate in the future and I'm not going to get into

that today.

Mr. Chairman, each year we have had major cuts and salary

freezes to the civil service namely; the public service, the teachers, the

nurses, the RNC, wardens, fire-fighters and the list goes on. We have had cuts

to the hospitals, the educational system and every other government department.

Where do the cuts stop? Mr. Chairman, this administration has increased taxes,

has brought in the payroll tax, has increased the cost of every fee, license and

permit that government issues, some as much as 200 per cent. The municipalities

have had their grants cut by as much as 60 per cent and have been required to

increase their debt retirement by as much as 100 per cent. The civil service has

seen thousands laid-off with hundreds scheduled to go in this year's Budget. Mr.

Chairman, we have seen this happen each year since 1989, yet each year the

government comes back for more. After all this, I do not see the government

making progress, at least no significant progress. Each year we see more money

being budgeted for social services. I ask you, is it any wonder? We have a

government which campaigned on jobs. I've yet to see any jobs created other than

positions created for their political buddies and I have a list -

AN HON. MEMBER: Table it.

MR. E. BYRNE: Do you want to see it? I don't think you'll

want to see it. You don't want to make it public yet.

What I've seen is that almost every policy of this government

causes people to lose their jobs and the spin-off effect is causing more people

to depend on social services.

Mr. Chairman, I would like to say a few words about how the

cutbacks are affecting the health care system in this Province and, Mr.

Chairman, I'm speaking from first-hand knowledge. I realize that the health care

system in our Province consumes 24.5 per cent of our revenues or $788.395

million. A large chunk of money but, Mr. Chairman, what price does one put on

human life? That's a question that I cannot answer.

Mr. Chairman, I understand and realize that there is only so

much money to go around and that government has to determine where they can get

the best bang for the buck, no doubt there. Government has gone beyond monetary

issues in negotiations with the nurses this year. Government is attacking the

morale of the nurses which is so important to the health care of sick people in

this Province.

AN HON. MEMBER: (Inaudible).

MR. E. BYRNE: Off and on, yes.

Mr. Chairman, I want to get back to my first-hand knowledge

on the effects that cutbacks are having on hospitals and health care workers in

this Province. Let me first qualify my statements by saying that I believe the

nurses in this Province are very dedicated, professional and a caring group of

people who now find themselves being severely overworked, understaffed and who

are now under siege in this government's proposals for negotiations.

As you know I had the opportunity recently to be cared for by

the nurses on 5 North A - I believe this is where some of you people should

start listening - at the Health Science Centre and have nothing but praise and

respect for the nurses and doctors who cared for me during my stay there. I

believe we are quite fortunate in this country to have the facilities like the

Health Science Centre to go to when we become sick especially, when you look

around the world and see the turmoil, starvation, war and hardship.

Mr. Chairman, I was at the Health Science Centre in January,

1990 for the exact same procedure, therefore I'm in a position to make a

comparison over four years with the health care system in this Province.

When a person is going to hospital for a very serious

operation they do not need any extra stress, as you can well imagine. In January

1990 when I went to the hospital to be admitted I was admitted right away, but

in February 1994 when I went to the Health Sciences Centre to be admitted, after

being told to come in at a specific time, it took one hour to be admitted. After

the surgery in January 1994 I was sent to the special care unit for two nights

and then un to a private room which was all that was required in that situation.

In February 1994 I was sent to a special care unit for four nights, where only

two nights were required, but there were no beds available to take me out of

special care, no private rooms were available, which I was prepared to pay for

myself, and it cost the government extra money to keep me there in special care.