VOL. 3 PRELIHINARY UNEDITED TRANSCRIPT HOu"SE OF i'.SSEMBL.l FOR 'I'HE PERIOD: 2:00 p.m. - 6:00 p.m. MONDAY, APRIL 3, 1978 NO. 14 ,_.

Tape No. 430 The House met at 2:00 P.N. Mr. SpPaker in the Chair. Order, please! PRESE~ I~G PJ::TITIO:<S: MR. SPEA.Xl::R: The hon. member for Fogo. W·\- l CAPTAIN iH:ISOR: I beg to present a petition, signed by sixty- seven voters of Fredcrickton, in Fozo district. And the prayer of the petition is, '~e. the undersigned people o[ ?rederickton, do stronzly protest the stand the government has taken regarding the registration of these small, one and two men cabins that are built and vill be built in th~: interior and along the coast which cost a large su;n of money to register.

These cabins are the means of · providing i:len to earn their livelihood." I get the gist of the petition, !-ir. Speaker, and in supporting it I can understand the concern of a great num~er of people, net only in Fogo district but in other districts in the Province. . Now to register a nutaber of these cabins,· and ! think the minister pointed out when I directed a question to him some time ago, whether the new regulations were involved, the cabins which fishermen use for fishing purposes.

For,as an example, fishermen can have a cabin on an island outside of their co~unity for lobster fishing where they would have to stay overnight and then when the lobster fishing season is over of course they move on to where they occupy the codfishery. And of course they also have small cabins there. But the minister I think pointed out th~t tile new tegulation did not apply to those such cabins, so we take his word for it.

But the cabins that are built or constructed or just put there.- I do not think they grow there- but certainly it does not ea~e long to construct a s~ll one and two £an cabin in the interior, 2Dd here again they have sometimes ~re than one. They have one for ·DbhU catching and many, many miles away they have another one for 1192 \

·. J.pril 3, 1978 Tape No. 430 :.·u - 2 CAPTAIN IJL~SOR: big game hunting. The ccst i~volved, Mr. Speaker, can be burdensooe to a great number of those people. A.~d I do not think they object to some control over Crown lands. I do not think that is their motive here at all.

But the problem is,of course, with the high rate of $25 registration, and then to have to get ,that piece of land where that cabin is surveyed- now this is the preble~, getting the surveyor in many miles in the country to survey that piece of land where there is a cabin-is going to cost a great s~~ of money and I am very m\ich afraid that a great number of those hunters and fishe~en are not going to be ~ble to afford to do it. So alo~ those lines, l~r.

Speaker, I would sub cit that perhaps tile ::lepart:m.cnt of ~riculture, Forestry, wl1ichever department is responsible for the licencing of those caoir • .;. take another look at it and i.E the occupants catmot get the land surveyed what is the sense of bringing in a regulation where perhaps the winis;:er may be conscious of ~!~-:! fact that it is going to be difficult 1:0 cet those cabins surveyed,apart from the cost. So, }~. Speaker, it is a matter of conce~n to those people or otherwise they certainly would not send in a petition objecting to it. I support the petition, Hr.

Speaker, and ask to have it placed on the table of the House and referred to the department to which it relates. MR. SPEAKER: The hon. member for Terra Nova. MR. LUSH: Mr. Speaker, I would like to support this petition presented by the hon. mecber for Fogo (Captain Winsor). The point about this entire legislation, }~.

Speaker, is that !t goes against a tradition in Newfoundland, a tradition among tne paople, particularly fishermen and loggers and hunters in particular, vho for years went into the interior of thi3 Province and put up caops or cabins, whatever you want to call them, and it is a long time tradition with them. And now this legislation requiring the:n to get the land surveyed, and some of these cabins are a long distance from the homes of tile p.<oplc 1193

April 3, 1973 Tape No, 430 NM- 3 1:!!!_ LUSH: concerned and it does,! think, put an unncessary expense on these people, You know,here we are in a province with mo~e land per capita than any other land cass I suppose in North America and here we brought out this unnecessary legislation 1194

April 3, 1978 Tape 431 Mr. Lush: to put our people through this difficulty, to stop them from in effect of having a camp or a cabin for their livelihood. But, PK- 1 Mr. Speaker, in later years as well that many of these people have been putting cabins up for recreation purposes. These people cannot afford to go South and bathe in the warmer waters of better climes, so they have built cabins so they can take their family eight or nine miles away from home to get out and have a little swim, and enjoy the sunshine, and again we are preventing these people from U .ving a lifestyle according to their . means.

And again I quote with the cremendous amount of land that we have available for. us per capita in this Province to put these people through this unnecessary measure, I think it certainly is not necessary, and I believe that the government could have come up with a more humane means, and I am not at all knocking the legislaticn which requires or Mith the intent of trying to map out the land in this Province.

There is nothing wrong with that at all, a..1d I think that we need to have our land mapped out to f::.nd oui:. who got claims to what land, <md to knew exactly where all the land is in relationship to the peo~le ' occupying it. There is nothing wrong with that at all. But I think the procedure is an undesirable one, and one that is going to put our people through expens~ and through much inconvenience, so I whole-heartedly support the petition presented by the han. m~ber for Fogo (Capt. E. Winsor). MR. SPEAKER: The hon.member for Windsor-Buchans. MR. FLIGHT: Mr.

Speaker, I would like to raise a few points in supporting this petiticn sc ably presented. Sir, I think· th~ whole approach is wrong. Mr. Speaker, under the new legislation when Crown land has be.en granted for lease in Newfoundland now it will C03t the recipient of that land $25 per year, but that is in form of rent paid on the land. Now under this regulation, the tbreat to the people vho are making application is that they have to pay $25 in order to register their application. And the minister admitted in the 11.95

April 3, 1978 Tape 431 PK •· 2 Mr. Flight: before the Easter break that ev('n if that land wen~ rejected, and we are having applications for cabins and Crown land in Newfoundland rejected every day,then that $25 is not refundable. And I do not think that is in keeping with justice at all, Mr. Speaker. What we are saying to our people is that you are going to pay $25 for the right to apply, and even if your application is rejected you have to pay,the $25 is not refundable.

And I believe the minister should reconsider that aspect of the regulation, and if indeed the land is rejected by Crown Lands, which it might well be, then that $25 would be refunded. And I doubt, Mr. Speaker, if there is any real reason to have $25 submitted vith the application. It is ti~e enough to charge the $25, which is possibly a ridiculous high figure anyway, when the land indeed have been approved, the application has been approved. Now, Mr. Speaker, the other thing that goes against the grain in a sense is that I do not recognize or I do not agree with the government's right to impose this regulation.

What they are saying is that if you have not applied in one year then we will sue you, we will bring you into court and lay charges against you. And, Hr. Speaker, the fact is the minister knows, I do not believe the minister deliberately misled the House, but the minister indicated recently that the time for processing Crown land applications is now down to six months. That is just not so, Mr. Speaker. I am actively, personally working on applications for Crown land in excess of sixteen months, and the thing still has not cleared Crown lands. SOME RON. MEMBERS : Bear, hear! MR.

FLIGHT: So I do not recognize the government's right to sue a person of this Province if he goes over a deadline of one year when the governUient themselves take si."Cteen to twenty-four months to clear an application. SOME RON. MEMBERS: Hear, hear! MR. FLIGHT: It just does not make sense. And, Mr. Speaker, what is sauce for ~he goose is sauce for the gander. If we as an administration need twenty-four months to clear title tc either 1196

April 3, 1978 Tape 1.31 PK - 3 Y.h:. Flii!:ht : accept or r eje ct an application,then certainll t e applicant should have the same consideration. So, Mr . Speaker , I would ask the minister to withdraw the $25 insofar as i t applie s to the application, Mr . Speaker . It is ridiculous to think that people on islands, fishermen's cabin s, hunters, trappers, would be expected to pay $25. 1 think the minister should tiithdra10 ~hat. bas ed on And I ·wouLd' further request, 1197'

April 3,197ts ~IR. FL!t;ET: Tape No. 432 .AH-1 the fact that it is still takicg sixteen to twenty- four mcnths or longer to nave Cro1o1n land approved 1 ! would ask that ne would consider an extension, withdraw the clause that says "if the application has not been made by Ma::ch 3lst~ 1 which h.:lS now passed that ne woulo.l consider an extension to give t l1e people in this Province at least the same time t~t tae gover~ent requires to process ~n applica~ion. PRESE~iiNG REPORTS BY STt-.~lllNG AND SPECIAL CmiMITTF.FS HR. SPEAKER: }~. HICK}W~: lion. ~linister of. Justice. Mr. Speaker, pursuant to

Section 178.22 of the Crir.linal Code of Cauada,I table the an!lual report thereunaer to His Honour the Lieutenant Governor. ~.lR. SPEAKER: lion. Hinister of Justice. HR. l:!I CiC·lA!i : Hr. Speaker, on behalf of my coll~ague,the hen. the "1-tinister of Rehabilitation and Recreation,! give r'.Otice that I will on tomorrow ask leave to introduce a bill,".An Act Respecting the Rehabilitation of Disabled Persons." MR. SPEA.l(E.a: MR. HICQ!AN: A..'~S';o"ERS IO QUESTIUiiS FOR w1iiCh NOTIC.<:. i:iAS £Et;,, G::E~i Eon. Minister of Justice. ~~.

Speaker, I table the answer to Question No.35 on the Order Paper of Monday l~ch 20,1978 asked by the hon. the member for LaPoile. MR. SPEAKER: l:[R. W. ROWE : ORAL QUESTIONS Hon. Leader of the Opposition. I would like to ask the Government House Leader, Mr. Speaker, is the Premier of the Province in the Frovince at the 1110menr::? !-!R, HICIOIA..~: Mr. Speaker 0 the Premier of the Province's plane touched down at approximately tvo minutes of two of the clock today at Torbay Airpo~t which ia in the Province of Newfoundland. ~.W.RO.,.'E: So he is no longer Acting Premier.

Well, can 1o1e expect the hon.House to be graced by the Premier's presence, Mr. Speaker,this afternoon? 1198

April 3,1978 :HR. ~1. P..Ow"E: hi.r!i. HR. HICKi·IA..~: Tape No. 432 AH-2 A numb~r of us had some questicus to put to I am sure, ~~. Speaker, that the hon. the Premier is hasting toward this liouse with the utmost dispatch. quickness and speed and accuracy - HR. NEARY: And well tauned. MR. HIC!G!AN: -and will come straight to this House as soon a<> he gets within the confines of this ancient and honourable structure. ~!R. SPEAKER: Opposition. MR. W.ROWE: A supplementary. The hon.

Leader of the Is the hon. minist~r and his colleagues aware of the fact that Your Honour and my colleague were in Halifax yesterday and managed to get in to meet the House at its opening to dan \.;'Liy cannot the Premier of the Province be here, Hr. Speaker? SOME RON. NillBERS: Hear, hear! MR. W.ROWE: That is the question that I put to the bon. House Leader; Why cannot the Premier of the Province be in the Province when the House of Assembly opens after ten d~ys holidays down South? K R, HICJO!A;.'l": Mr.

Speaker, this is purely hearsay, and I am sure the hon. gentleman being a mauber of the bar will realize the difficulty and t~e risk of answering questions based on hearsay evidence, but my understanding was that yesterday most of the affairs of state of this Province were resolved in the Lord Nelson Hotel by the hon. the Premier, the hon. the member for LaPoile (Mr.Neary), and the referee was Mr. Speaker. Today,as they all has:ened to get on the plane,EPA decided to take them on, because there were not many seats,in the order of the depth of their suntans and the Premier had to come in on the last one.

Hy understanding is that he could not get on the plane with the two hon. gentlemen but rather he came in on a plane that was suppose to land at two minutes to two. Now that is pure hearsay.I cannot - HR.W.ROWE: Mr. Speaker, one final question. Would the House Leader speakL,g for his side of the House consent to delay the 1199

April 3 1 19,73 Tape No. 432 .\H-3 MR.W.ROWE: Question Period for one h:1lf hour or so? &mE llO :~ . :·lE.:lBERS: !:lear 1 hear! HR. Iii CK.l L<\l·i : No 1 oo! ~nt.W.ROWE: There are some very important questions affecting everybody in this Province which I would like to put to ::he Pre.c>ier. The Province t.• 12:Jo

April 3, 19i8 Tape 433 EC - 1 MR. U. N. ROi-JE: is in turmoil. the government is disintegrating, and I would li~e to see what tr.e Premier has to sav about it, Hr. Speaker. ~m.. NEARY: Hear, hear! ~rR .• w. N. Rf117E: It is very important . MB.. SPV.!G':R: The hen. the !-!inistrr of Justice. ~- me~~~: Mr. Speaker, on behalf of the gove.rnment that is well manned and fit fer the voyage ahead, we cannot consent to th:!.s. !':11. , !lOLA.'{: MR. SPEAKER: Conception Bay South. MR. NOI.Al:j: A supplementary, \fr. Sneaker.

A supple .rnentary by the hon. mel'!l:Jer for The question, supplernentary,to t~e House Leader opposite and the Deputy Prel!lier~ Would the :-~nister of Justice be good enough to tell us whether he has the resignation of the ?rem:!.er in his pocket or any other resip;nations, a.'ld if sc 'I."Culr. he table them now? ~lR. ~7.ARY: P.ear, hear! MR. SPEAKER: the hon. the ~inister of Justice. MR.

RIC'IC'R!: That question is frivolous, vexatious, contrary to all the rules,and for the record the only people who want t_he Premier to resign are t'f-te hon. gentlemen opposite because they '~ill never win an election as long as he is Leader. SOME H07'1. HF.!-!BSRS: Hear, hear!. MR. SPEAKER: The hon. member for LaPoile followed hy the ,hon. member for Baie Verte - White ~ay. ~.NEARY: Mr.

Speaker, I would sugges't that t'1e real reason the flight did not get in vesterday was not the weather, 1t was that the pilot had heard that there 10ere a number of r.1in-tsters r!m--n at the airport waiting to greet the Premier with their resign~tions. 'ffil. W. N. ROWE: llanted to stop the bloodshed. MR. NEAP.Y: Hr. Speaker, I woul~ like to dir<!ct , a question to the ~finister of Justice, Sir. 12H1

To.pe 433 EC - 2 ~. NFARY: In view of the fact that the Auditor General pointed out in his annunl report that Affiliated "arine ''etals bad been paid $143,866 ~d.thout any cOI.lllt of the nUI'I~e!' of cc.rs that were collected -in other words, the I!'.Oney paid out illegally - would the minister indicate to the House if any police investigation or any action of any kind has been taken to investigate this serious matter that ~•as brought to light by the Auditor r.eneral in 'l:lis report this year? ?'R • SPEM~~ : ~fP.. HIC!C''N:: The hon. the Hinister of Finance.

Firstly, may I say that there is ~o allegation in the Auditor ('..eneral' s report of illegaH.ty, or, put it another ~1ay, of cril"inalitv, and it :f.s only in these cc>ses that tl,e police would be called in to mal~e an investigation. And to rcy I:nc"·rle:lr-e they have not been callec1 in in this case. I cannot recall off the to!l of my head who of my hon. collengues is responsible for tl-tat: ~articular. facet of jZOVernment, hut in any event I aro .not in a position to 11:iv~ the details of whatever the naMe of the conpany is. ~lR. ~lEARY: ~. SPr A..U." : MR. NEARY: A Su1)plel'lentary questi~:~. Hr. Spe?.ker.

A supplementary. ~r. Speaker, in view of the fact thrtt the President of Affiliated ~~rine ~etals, the company that c=ollected the car wrecks and received the rip-off of the dollar that is put on the vehic=le licence in this Province, in view of the fact that the president of that company is now an employee of the government negotiati~g - J!1a uale of these cars, has the Attorney General and the ~linister of . ~ taken any action to investigate this situation to see if this ~ar gentleman is in a conflic=t of interest situation? m. V. 'N. ROWE: Hear. hear!

Good question. ~ ~EAT.ER: The bon. the M!nis::er of Finance . . l'!!t- lilC~A!: I most s.ssur.edly have not taken any ·· 8b!!p5 to :ln,_~igate. Yo•J do not investigate a matter unless there is ~ cause 'tO invest!~<:at:e it. The hon. member for LaPoile C:r. ::can·) 12\>2

l.pril 3, 197R Tape 433 EC - 3 has referred to a gentleman ~ho allegedly is now employed with the government. \,'hat: his duties are I dq not know. He is certainly not working with the nepartment of Justice. MR. SlY"!O~~S: ~. NOLA."l: HR. HICI0!A.~1: He does not know either. Is he out Ruarding the cars? Hell, if he is out ruardi ::l.!! the cars there certainly would be no conflict cf interest, ~~r. Speaker. If that is what the gentleman is •loing he is rendering a very essential public service, to protect - MR. H. N. r.om:: They are his cars. MR.

HICK'fAN : - cars that presu~ahlv have been purchaser:{ hy the r.overntr.ent of He•~foundland. m:. r:R. ~!P.. w. ~! .. ~OHr.: ~~r.b .RY: SPFN·:E"..: Payin~ out public fun~s to guar~ his cars. A supplementary <]uestion, '!r. Speaker. A supplementary. ~r. Spea~er, is it not the ~uty of t~e Attorney r~neral of this Province, the Vinister of Justice, to see t~at these matters are investigated?

In this particular case t~e Yere tole:! by the Minister of Consumer Affairs that the president of this com?any, Affiliated Marine ~~tals, registered in the companies' offices of this Province and doing business vith the government, and the president of that company is now an employee of the government; and at the same time he is an employee of the government negotiating for the sale of the }!T{. NFA11.Y: ear vrecks of trnich the government is •rithholding one hundred and sixty . odd·thousand dollars and the bank has the inventory.

And the government is withholding one hundred and sixty thousand dollars belonging to this eompany. This gentleman is now an employee of the government negotiating the sale of these cars, trying to get his one hundred and sixty thousand dollars. Mr. Speaker, I ask the Attorney C~neral and the Minister of Justiee if that is not a conflict of interest situation? MR. SPfA!~Er: The hon. the ~ : inister of Justicr.. ·. 1203

April 3, l G/~ !ape 433 .. _. I L\. • - ~ ! · ~ . Spea ke r 1 1 f •.lhat the hon . Rent le:nan from LaPoile (~ : r. ~eaq) says b . correct t:len it s.~ GI I S very clea rly c ;,;~r ~e ~ overn rr.ent is bein:::; '7e!'y prm!ent and ve:ry careful in the P't"Otecrion of the taxpayers' ll10ney. I gat he r from what t he hon. s:;entleman f rom LaPoile hes said , this company alleges that it is owed one , ~~dred and sL~ty thous and dollars by t~e government and that t he s overn:;;ent ~ eit!ler on the advice of ~~e Depart ment of Justice or financ e, or t.•

April 3, 1!17!! 'Iat:e 4J4 uw - 1 botil ,very properly wo•.1ld b~ vith-holdi~g this mouey,particularly if the company has secur<:a its assets to some other lending institution wltich again has been indicated by tile boo. tne member for .L.aPoile to be the case. If that is so,then rather than to be critised these two depart­ ments of government shou.ld ae ld:;hly colll!lle.nded for thei:- prud~nc~. An<i mosl: assuredly, Mr.

Speaker, it is not tne responsibl.ity of the Attorney General to initiate an investigation simply because t nere may be ao011e questions to accounting procedures. rltere has to be sc>me evidence,sowe proof some suggestion of culpability,not accounting practices or procedyres which may or may not be in accordance wit h the particular :Jepartmental l.ct of the ~· inancial :.dministration Act hR. tlJ::ARY: Resi~~. 'Alex'. boy. NR. aiCL(.'1Ar': aut if tbat is tile case, hr.

Speaker, then I cot:Imenci those w:.o have been so prudent to with-hold caese funds until tney ~re iu a posit~on to assess the status of tl.!.at company. If on tLe other nand,- if I may answer the 'Second part of the question by the hon. the member .for Lal'oile when he says - Ah lill~. Ml:Ji.Ol::R: Order: MR.

HICKMA.\'1: -"is there a conflict of interest when the fo~r- a person Yho at . one tiDe was allegedly presiGent of this coMpany is now an employee of the government engaged in trying to sell these car wrecks for government account, again I would say not only is there not a conflict of interest but presuming · that this gentleman during his term of office in that company aeqt:ired s'ome knowledge of the market of that kind of product, , th~presumably and fortunately fer the sovernment ve are taking advanta.ge of that expertise and that he will be in a much better position to get a better price for government account~not nis - MR.

NEARY: -:m. 1'iOLAN: .11o. No! You are lpck.y you 4re not oa:cl~ in your law office chaq;ing people for ac:lvice. 1205

April J, 1978 Tape 434 DW - 2 HR. lilCI<.."i.<\!1: - for government accour.t,bec::use. I undero<:and from _,hat the hon. gentleman from Lal'oile h.c.s saiJ tnat tile banks may l1ave some lien .and if that is tiu~ case then I can assure you it is for government account and ~st assuredly not for tbe benefit of .my individual. : SU~ JiO;i. !-!UlliERS: ~IR. •iEAK!: UR. SPEAJ.(.;R: . HR. NU.RY: liear, Hear! Supplementary, Hr. Speaker. Final supplementary • There is no way, Hr. Sj!eaker, the bon. minister of justice is ~;oing to get away witu that foulisi1 nonsense.

Sir, that answer the han. gentleman just gave the rlouse - MR.: SPEAJ.a.R: Order, please! Order! The ilou. gentleman will please proceed to the supplementary. MR. NEARY: - whicn is misleading by tile way. Hr. Speaker, is toe non.-I ~ant to put the question to the minister again because I want to onake sure tbat tile douse under<i ta:1J.; wua.t tile minister is saying. I he !:inister of Consumer Affairs confirmeod in this House before the i::!ouse rose for Easter that the presidoent of Affiliated ~:arine }~etals AN tiON. MEMBER: The fo~r president. MR..

NEARY: ,.. tb.e Millis ter of Transportation's buddy.!'io not the former-the president of Affiliated Marine Hetals, MR. ~u.ALY_ AN iiON. ME!-iBER: Is be still president 1 HR. NEARY: - he is still president,stiil president of the company. lie is an employee of the government <md \mile he is an employee of the government,watching the car wrecks that he collected that he got the dollar for,his own car wrecks,he is nego­ tiating the sale of these cara. ~k. Speaker, if there was ever a olat~nt e.xam-o>le of conflict of interest that is it.

He' is not pro­ tecting the government's iovescment,he is trying to protect his Ow"tl investment ami the governnent nas tlim on the payroll wi:ile he is 1206

april 3, 1978 Ta.,e 434 D'J - I. I am told this already by my colleagues: . I know it is not true and I know it cou.La not oc true without ~;;overrunent knowing as a wnole,and I can assure t.lis House that this is llCt su, so that takes care of that. Secondly,my understailding is taat once these wrecks loilere collected by this company, title to the property would vest in the Crown. And if this gentlecan is trying - MR. NEARY: do. The bank holds MR. HlCiiliAN: ."if this - wait now~ If the han. geo.tle= would only listen. If titlr· HR. ~~~ 1 <!rill listening. The hon. gentleman is mi6leading the Uouse, too.

MF. l:IICK!-L"w.'l: I au;. not IUisleading the ilouse. If title to these wrecks vested tli. the Crown when tbey were collected by that company as I suspect it did because - an~ the reasotl for it was that I have heard my colleague;the hon. tue Minister of Consumer Affairs,tell!ng the public that be is tr)ing to negotiate a sale of the same in ~ew Brunswick,which he could not do unless it was Crown property. If the gentle~~ in question who I understand used to be the president of that company - ·l!R. NEARY: The benk is trying ~o sell the wrecks. MR.

HICKM.A..'I: - used to be the president of the company is trying to sell them for government account,that is very com~~~endable. _MR. NEARY: Hot true! HR. HICKMAN: - If,onrtue other hand,the <.• 1208

April 3, 19i8, Tape 435, Page 1 -- apb MR. HICKM.li.J.~: bank has a lien on the property in question. Then again, Mr. Speaker, that is the bank's problem and not the governments. The government,regrettably, is not able to come to the assistance of the bank in that matter, all of which is very proper and very much above board. SOME HON. MEHBERS: Hear, hear! MR. SPEAKER: The han. member for Baie Verte - White Bay followed by the han. gentleman for Trinity - Bay de verde. MR. RIDEOUT: Mr.

Speaker, I have a question for the Minister of Tourism and I ask him this question in view of the fact that he was Minister of Transportation for a couple of years carrying on negotiations with Ottawa on our behalf, for the upgrading of the Trans-Canada Highway. I wander if the minister could tell the House whe~her or not the proposed deal that has been accepted by the Province, and I understand to be signed later on this week between Ottawa and Newfoundland, was that same deal offered the minister while he was negotiating with Ottawa on behalf of the Province? SOME HON. MEMBERS : Oh, oh! MR. RIDEOUT: Mr.

Speaker, maybe I could redirect the question to the present Minister of Transportation and Communications who is now the Minister of Intergovernmental Affairs, also. MR. NOLAN: over there? MR. MCNEIL: What is wrong with loose-lip If he can be like that for the rest of the year it will be great. .MR. SPEAKER: The hon. Minister of Transportation and Co~~unications.

.April 3, 1978, Tape 435, Page 2 -- apb MR. DOODY: Mr. Speaker, the T~ans- Canada Highway agreement that appears to have created quite a bit of interest on the opposite side of the House was a matter of great concern and of very deep involv~~ent by my predecessor. This government felt and still feels that it was entitled to a much better deal than a fifty/fifty deal because of. the ~ail situation in this Province and because of the second­ rate, to say tl:e very kindest .terms, of our road situation here.

The previous minister felt, and government concurred, that we should,in conjunction with the other three Atlantic Provinces, ask for a ninety/ten situation on the Trans-Canada Highway which was the situation under which the present Trans­ Canada Highway in this Province was built. Subsequently that position was reduced to a seventy-five/twenty-five. Ottawa still held firm on a fifty/fifty offer and refused to budge. The four Atlantic Provinces insisted that the seventy-five /twenty-five was the proper solution.

The impasse continued until the three Maritime Provinces collapsed, caved in, gave up and decided that they would - sign a fifty/fifty agreement. The Province of Newfoundland was then placed in the rather unfortunate position of either accepting a fifty/fifty agreement or getting nothing. We felt that under certain conditions it would be in the best interest of the Province to accept ·the fifty-fifty deal. This agreement has been negotiated wib~ the federal govermnent now along these lines. In the agreemeuc. we "have accepted the Sullivan Commission report.

Zt says quite clearly in the agreement that this will not be prejudicial in any way and that any suggestions that the Sullivan Commission might make on surface J2.i0

April 3, 1978, Tape 435, Page 3 -- apb M.'Q.. DOODY: transportation will be dealt with in isolation in this from this Trans-Canada agreement. This was one of the main problems and main points of contention of my predecessor and one which we successfully managed to get included in the Province of Newfoundland's agreement with tl1e · Government of Canada. We further managed to get a seventy-five/twenty-five front-end-loading for the first year and-a-half of the agreement and this, of course, will be very beneficial to the Province in the cash-flow situation and in our own local road building progr~~e.

So the programme that we will be signing with the Government of Canada, who unfortunately could not agree with the position of the Province in recognizing our position down here, will result in a net fifty/fifty deal over a period of three to four years. But hopef-ully, the Sullivan Cor..mis.sion nepo:;:-t will be such as to place us in a position whereby we can renegotiate at least part of that agreement. Certainly there is no conflict there and the Province is hoping to sign the agreement toward the middle of this month, and hopefully we will be working on the Trans-Canada later on this Summer. MR.

SPEAKER: One supplementary followed by the hon. gentlemen from Trinity - Bay de Verde and W~ndsor - Buchans. 1211

April ~. 1978 UR. SPEAKER: HR. RIDEOUT: Tape ~o. 436 NM- 1 The hen. me!:lber for Baie Verte -'.Illite Bay. Mr. Speaker, it was a long flow of words for the minister to end up saying, "Yes, it was a fifty-fifty deal that we eventually agreed to." Now,~~.

Speaker, I want to ask the minister, wnether ~ view of the fact we are getting seventy-five to twenty-five thia year, fifty-fifty for the next OJO years, are we in fact in the fourth year of the agreement goine to be ending up with the Province paying seventy-fi~e per cent of the deal and the federal govern~ent twenty-five per cent, which balances out to be fifty-fifty over four years anyway? Is that the type of deal that the minister has signed, that his predecessor is so upset about? HR. SPEA.T{ER: MR. DOODY: AN HON. HE~GlER: MR. 000~ The·hon. Miuister of Transportation and Co~unic~tions .

I thought I had made that clear, that the original - Give it to them in baby talk. - during the first year or duri11g the first t~·elve months of the agreement it will be seventy-five/ tT.-:e"t:.ty-five, seventy­ five per cent federal, twenty-five per cent provinc:ial:and the.second twelve month period it <o'ill be fifty - fifty, and the Province will be expected to pick up the seventy-five per cent share in the third twelve 1110nths.

Now at that time ~~e Sullivan Commission's ~aport will have been received, studied, analyzed and looked at, and hopefully we will be in 2. position to renegotiate with the Gcver11ment of Canada and come iD with a more favourable and more reasonable agreement.

But in the meantime, if the hon. gentlemen opposite feel that we should turn down this $30 million that Ottawa is offering for the Trans­ Canada Highway work then we will certainly pass that message along to the colleagues of my friends opposite and tell them that they are not in agreement with the generosity of the Government of Canada, but we will be o~y too happy to accept it. MR.. RIDEOUT: You are being blackmailed by Lang. 1212

April 3, 1978 Tape No. 435 NU - 2 !ffi. RIDSOUT: A supplementary, ~~. Speaker. HR. SPEA.'<.Eit: I had indicated that I "'ould recongi:::e the ho~. mecber for Trinity - Bay de Verde. !-IR. F. RO'.m: ~!r. Speaker • in the absence of the Premier and in the absence of the l!inister of Fisheries, I would like 1:0 direct a question to the Government House Leader.

Could the Minister of Justice indicate whether or not the ~tinister of Fisheries has suggested strongly to the Premier that the Nordsee proposal be revised so that ~ordsee would have forty-eight per cent of the shares, Ocean Harvesters forty-seven per cent,and tile government five ?er cent of the shares? Has this matter been brought to the Premier's attention.. or r.o Cabinet's by the Hinister of Fisheries. HR. SPEAKER: The Governme~t House Leader. MR. HICKHAN: Well, :·Ir. Speaker, I am not in a position to comment on anything that may or may not have been brought to the attention of the hon. the Premier.

I would not know and I do not knoH - ln<. F. RO\JE: You cia not know the answers. because that would be a matter uet~ee~ him and his colleaBues in Cabinet;and secondly,as to matters that come before Cabinet, the hen. gentleman,and this House,is fully ·aware that it would be totally improper and absolutely precluded and prohibited fer me to indicate to the House what has or what has not come before Cabinet. I can recall very vividly the rulings in this House when a colleague of mine, Mr. Earl, was chastised one time when be was in the Opposition for suggesting even that he knew What had come before Cabinet. MR.

SPEAKER: A supplementary, the bon. member for Trinity - Bay de Verde. tiR. F. ROWE: Okay, the minister is obviously filibustering. Mr. Speaker, a supplementary. Could the minister indicate whether or 1213

April 3, 1978 Tape No. 436 MR. F. ROl-lE: not the a •.le st i on of th(! Nor<Isee merg e r has c:ome before Cahin:!t, and wi;er.her any decision has been made with respect to it1 }:R. SPEAKER: The hon. Government House Leader. HR. UICK}!AN: Mr. Speaker, on the Nordsee matter, oy ID1- 3 colleague, the hon.

Uinis ter of Fisheries, and I believe as well the han. the Premier, has since this House opened in Narch, indicated to the House- and it may have been before the House opened- indicuted publicly, ~~e Premier did, on television that that had been dealt with by the government; that the Government of Ne~1foundland had indicated to the Government of Canada, and the appropriate ministers therein, the terms ar.d conditions under which the government was prepared to support the apylication that had then been made to FERA, whatever it is, the Foreign Exchange Review Board, by Nordsee.

Now what has transpired betw·een FERA and the hon. Jack Horner, who is the minister primarily responsible for the a~inistration of FERA, I do not know, and I au not in a position to indicate to tl1is nouse because I 1ust do not know. Governcent's »osition was articulated very clearly at that ti~e as it related to that particular application. Now bon. gentlemen have seen, as I have, pres• comments emanating from Ottawa which have indicated that the bon. Mr. Hon1er has suggested to Nordsee that they go bad~ and revise their application.

That is something I cannot answer, uor can any bon. gentleman here answe~, because they simply do not blow. It is a matter betveen the hon. Jack Homer, PC m., F. ROWE: ftl. "SPEAKER: !!L. F. ROWE: A supple~entary, Mr. Speaker, a supplementary. A supplementary. I assume from that lengthly answer, Hr. Speaker, - ~the Premier's position on the Nordsee deal is identical to what ' fC - originally, Could I ask the minister whether 1214"

April 3, 1978 Tape 437 PK- 1 Mr. F. Rowe: the Premier's proposal or concept with respect to the Nordsee is consistent with the motion moved by the member for Harbour Grace (Mr. Young) in which they require 51 per cen~ of Nordsee investment in Ocean Harvesters? MR. SPEAKER: The han. Minister of Finance. MR. HIClGLI-"1: Is the position of the hon. Premier consistent with the views of the hon. gentleman from Harbour Grace (Mr. Young)? I do not know, Mr. Spe~ker, I cannot answer that. I do know this - MR. F. ROWE: Do you try to get together at all? MR.

HICKMAN: I do know this that the resolution that has been placed on the Order Paper by the hon. the member for Harbour Grace (Mr. Young) very clearly articulates the views and ambitions of every fishermen, or certainly a vast majority of the fishe~en living in that part of the Province from, let us say, I - SOME RON. MEMBERS: Oh, oh! MR. HICKMAN: The hon. gentleman from Port de Grave (Hr. Dawe) vill correct me if I am wrong. SOME HON. MEMBERS: 'Wrong. MR. HICK}I.AN: I am wrong? MR. F. ROWE: Wrong. Absolutely wrong. MR. HICKMAN: I see. I am wrong. I am saying this, Mr.

Speaker, relying again on a press report quoting Dr. Goodwin, who I believe is ~soe!ated with a party that does not support the government. HR. F. ROWE: Yes, he is some fisherman. MR. DOODY: He is some catch over there. MR. F. Rot-TE: Yes. MR. HICKMA..'l': He is the leading Liberal,as I understand,in the Barbour Crace area. I would hope he is because he has been president of the association for so many years, and I assume that when Dr. Goodwin speaks. he speaks as a person very knowledgeable - SO'I'IE RON. MEMBERS: Oh, oh! HR. SPEAKER: Order, please! MR . HICKMAN: - of t he views of the people of Harbour Gr.ace .

SOME HON • MEMBERS : Oh, oh! 1215

April 3, 1978 Tape 437 PK - 2 MR. SPEAKER: Order, please! I do believe Dr. Goodwin's views might be somewhat peripheral. HR. F. ROWE: A further supplementary. MR. SPEAKER: A final supplementary then the hon. member for Windsor- Buchans. MR. F. ROWE: Could the Min:l.ster of Justice, if we could ever get him to answer a question, Ur. Speake<, indicate to this House whether any ministers, the Minister of Intergovernmental Affairs, the President of the Council, anybody have made representation to FERA, and what the nature of these representations were? MR. SPEAKER: The hon. Minister of Justice. MR.

HICKMAN: Mr. ~peaker, look,! apologize for taki~g the time of the House. Do I have to go back over all of this again? The bon. the Premier articulated publicly sometime ago that the position of the Gove~~ent of Newfoundland with respect to the applicatio~ of Nordsee to FERA. And as far as I know, b~tt I cannot say this personally, you know, speaking from direct kno..,ledge, that the hen. the Premier,having articulated the view of this government to the public,that this was made known to the Government of Canada.

But if the han. gentleman wants me to continue repeating it, and repeating it and repeating it it is with the greatest reluctance I will do it, but I do apologize fer being forced to trepass upon the valuable time of this hon. House. SOME HON. MEMBERS: Hear, hear! MR. SPEAKER: The hon. Minister for Windsor-Buchans. MR. FLIGHT: Mr. Speaker, I have a question for the Minister of Industrial Development, with regards to the statement over the Easter break that $6 million had been allocated for expansion or extension of the Western Memorial Hospital.

And in his statement I think he indicated that that $6 million would be forthcoming over a period of . three years, $2 million per year. Now the Minister of Health is not prtsent, but the next day the Minister of Health - AN HON. MEMBER: He fell out of bed. 1216

April 3, 1978 Tape 437 PK - 3 MR. FLIGHT; - the next day the Minister of Health indicated that, and I quote, "That having heard the news, having heard the minister's statement that he almost fell out of bed. That in fact the figure was $1.5 million, and that it was part of an ongoing "programme." MR. NEARY: Would the Minister of Industrial Development Did he actually fall out of bed? SOME RON. MEMBERS: Oh, oh! MR. FLIGHT: Would the Minister of Industrial Developmen~ clarify the situation, and does he stand on his statement that he made that there is $6 million over a period of three years? MR. SPEAKER: DR. T.

FARRELL: The hon. Minister of Industrial Development. :~. Sptake~, to clarify this statement - I do not know if the hen. minister fell out of bed or not. I have not seen him since. SOME RON. MEMBERS : Oh, oh! DR. FARRELL: The statement was to the f£fect that it: va.s alterations to an existing building,Phase 6 of the Western Hemoria!.

Hospital which loiould be approximately $1.8 !!<lllion in this year, and if it is continued to its conclusion, which it should be-and it is not new structure, it is the old Christopher Fisher Hospital, it is just alterations - it would cost between $5 or $6 million over three years if there is money in the budget over the next couple of years. MP.. FLIGHT: MR. SPEAKER: MR. FLIGHT: A ~~pplementary, Mr. Speaker. A supplementary. I want to try and get a straigbt answer here, Mr.

Speaker, because the minister must be aware of the impact that his statement had in the Central Newfoundland area, in particular, possibly Burin, Clarenville, but certainly in Central Newfoundland area. 1217

April. 3, ;1978 Tape No. 438 NM- l HR. FLIGHT: lUll the ~rovince, will the GovP.rD.I!lent of :rawfouil '.!land, spend over the next three years $5 I!!illion on the Western 1'-\emorial Hospital, or will it be $1.5 million that :he Hinister of l!ealth indicated after hearing the Hinister of Industrial Relations statemeto.t? Just what is the figure? Is it the $1.5 million that the llinister of Health is ti:!.lking auout and assuring the Province, or is it the $6 milliou that the Hinister of Industrial Development is quotio~;? :HR. SPEAKER: The hon. Hinister of Industrial Developoent. DR.

FARRELL: I thought I explained it pretty completely. This yea:- in the Budget there is $1.8 million for alterations to the old Christopher Fisher wing of the present Uestern Memorial Hospital, 'Which was part of the hospital system in Corner Brook prior to the new extension which went on the old Christopher Fisher, and phase six of that plan was alterations to the old Christopher Fisher wing which was a main part of their hospital system in Corner Brook up to that ti:ne.

Now this means we are now short in Corner Brook sixty beds, after opening up the new winz, sixty beds less :han we had when both hospitals were open an~ these alterations are to replace these sixty beds, some administrative work, and the::e is $1. B million in the Budzet this year, $1.5 million to $1.8 million, I am pretty sure it is $1.8 million. MR. FLIGHT: HR. SPEAKER: MR. FLIGHT: Mr. Speaker, one more supplementary. The final suppl .emenl:ary.

There is more than the two minister involved in this particular situation because I am sure the minister is aware that the Premier indicated in answer to a question that there ~~uld be DO funds spent for extension to the Western Memorial Hospital this year. MR. SPEAKER: The hon. Minister of Industrial Development. 1218

Apri1,3, : 1978 Tape No. 438 !nl- 2 DR. FARRELL: Sir, the statement that was made time and time again here, there were no funds available for new construction. This is basically all money for alterations to t~e old wing of the Western llemorial Hospital. ORDERS OF TifE DAY: On motion that the House resolve itself into Co:amittee of the Whole on estimates, Ur. Speaker left the Chair. NR. CHAIR!1A..'I: ------ Order, please! Estimates for Consolidated Fund Services, page three. HB.. NEA."l.Y: Mr. Chairman, is the hon. gentleman going to say a word or two on this heading? MR.

HICKMAN; In going through the past Hansards dealing with the Finance estimates ~nd Consolidated Funds, it has been more a question from the opposition and that is what I - MR. W.N. ROWE: Mr. Chairman, I will probably give the minister something which he not used to from his own colleagues, a little courtesy,·a chance to make a few remarks if he wanted to. Consolidated Fund Services, sir, most ~f it is statutory in any event, and the House has little control over whether it goes through or not now, unless we wish to bring in 3 bill to change it by legislation.

There are one or two things that occurred to me going down through the various subheads, Hr. Chainr..an, which I would like the Hinister of Finance to deal with. I will not deal with them one at a time, If the minister would not mind taking a few notes, I will just ask the questions as they occur to me here now. There will be some supplementaries afterwards and SOQe of my colleagues..-:-;-~ to get into it. We on!.y have an hour for this particula:. ·subhead in any event, and it is head of expenditure ia any r. ' 1219

·'-:"- - - April .3, 1973 Tape ~o. 438 l1R. :I. :i . r..o:;r;: : event so •re lo"!.ll try to ~;e t : h r ough !. ~ quickly. 1 would li~:e the mb.i!:ter to br i efly answ.:r t he following quest ions i f he vould , ~ 1r . C hai.r-...a~ . l Cl- 03-02 Treasury Bill s , up by so:ne $2 lililli on t his yea r. Would be jus t give ·.15 a brief idea as ~H - 3 to why Tre01sury Bills a::e up this ye.:~r and ge::te::.:llly s pc.<iking , that .foro of borrowing, ho•J it !.::; wor ki:tg ou t, and !.•hat icpact it is h.:~viog on the ge neral borrowing of ~h a Province? Just mak~ a :10te of it , Treasur1 !Ulls and 'then I ~·111 1220

-~· .. April J,l978 Tape No. 439 Ah-1 N:R, w, !<OWE: Hr. Chairman, Revenue I would like tl•e II'.i,:istcr to give an account of what 02, Fisheries Loan, what exactly that is all about. J::cono:nic Developl:lent Loans; I would like him to tell the House, the Co;::mittee 1,.ity the Economic Development Loans ;1:::e less than half of ..,hat they were under the revised estimates of 1977-1978, $145,000 estL~ated this year as against $335,000 last year. I 'W'':luld like him to indi:ate 'Why the revenue from to~~ councils is expected to be over $Z million this year when ti1e revised estimate~ for 1977-1978 was $233,000.

I will not have time to answer all. HR. t:. ROli""E: ~ell, Hr. Speaker MR. HICK:IA.:l: I ~ not goinR to be able to answer all tha:. Okay. Let it JI:O at that, ~lr. Chairn.an. for the time being. MR. HICKKI;H: Mr. Chairman, firstly if I may deal w.ith the Treasury Bills and the Treasury Billsoperation. rnis ~as, I will not say a new innovation but, well it started two or three years ago, The l~!t on the Treasury oill financir.g at t~t time was $3 millio~.

Tnis is probably, ar,Chairman the best type of borrowing that the ~rovince - l anc the cheapest type of borrowing, the oost satisfactory t~pe of borrowing that the Province can embark upon. rne way it works is this; every Wednesday bids come in from the bonding hcuses and the chartered banks indicating bow much interest they are prepared to PB:Y on Treasury bills for ninety-·one days and the best bidder is accepted and the monies are then used for several purposeE,one being to rollover SOQe of the outstanding Treasury bills and another is to pay for the general operation of the Province out of borrowed money.

As I say the interest rate - if I can lay my hands on it and I did have it here this afternoon - here we are, the interest rate that has been applying to us has been very satisfactory i~eed. Mr. Speaker, the interest rate,fot instance~on the last bid,which was last Wednesday, vae 7.25 per cent. We have under Treasury bills now a total amount of borrowings at $62,364,660. ~i.R. Nt:A.RY: I-. "here are y0u hettin;z I hat kind of money for seven an:i a half per cent? 1221

.\pril 3,1973 Tape No, 439 AH-2 HR.HICK!IA~: Seven anc..l one l:.>lf per cent? loiell,I IJill read them out load,givi!<: "':J. opportmdty, I guess I = not making it clear. There is a whole list of very reputable financial institutions in Canada and the United States who kno" that this Province-and this practice is not peculiar to the Province of !\ewfo"L.:ndlanC:-know that every Wednesday this Province has an auction of $5 million worth of Treasury bills; in other words, we will borrow $5 millioOJ. so they all bid. They ~o not come in an<! take $5 million, you know one person, one company.

I will give you an idea of so~:~e of them. HcLeod,Young,Wcir & Company on the Narci1 30th bid t~ey took $1,473,375 at 7,25 per cent; ~ood Guudy the saoe, 7.25 per cent; Greenshields paid 7.20 per cent for $1,960,000 and again on April 6th they took $2.946.000 ; Dominion Securities, A.E. ~es 1 Equitable Life, Wood Gundy, Canadian Imperial Bank of ComQerce paid 7.25 per cent for a ~98,000 note, Bank of Nova Scotia, 7.22 per cent and that - MR. ROWE: How long are they for? MR. RICKl·!AN: They are for niLety-one days. MR. NEARY: Oh1 I see, !-ffi.

HICKHAN: And the thing is that this is very satisfactory borrowing because of the rollover · provisions. MR. NEARY: But then we end up on the lor.g haul probably paying about eleven or twelve per cent. MR. HICKMAN: No, no! TI.is is the beauty of it, we continue paying 7.35 per cent because we continue to roll it over if necessary and a lot of 1222

April 3, 1978, Tape 440, Page 1 -- apb MR. HICIGMAN: that money goes into rolling over of notes. It is t~e most satisfactory borrowing activity, I think, that this Province has ever embarked upon and - MR. DOODY: Reinvest it. MR. HICKMP.N: Yes. And as the former Minister of Finance says, which so often happens, we take some of that money and reinvest it if we are not going to use it. It is almost a daily occurrence. There is what they call the government account in the Bank of Montreal which is more than one account, but the government ledger rather.

For instance, we have invest .ed, just to show you how prudent we are, we have invested right now total Canadian investments of $82,731,065, as of March 29, 1978 and, Mr. Speaker, this is almost a day to day operation of the Depart~ent of Finance insofar as the treasury bills are concerned, and it is a very satisfactory way indeed to borrow money. If you go into the long- term market obviously you are into 10 per cent, 10.25 per cent, some provinces have gone away beyond that, some municipalities in Canada have gone even higher. MR. NEARY: You just cannot keep rollin~ it over forever.

At some point or other you have to face reality. !'..R. HICIQ.<..AN: Yes, you can. MR. NEARY: The former Minister of Finance has a smile on his face because he knows the question I am asking is a proper one; what happens in the long haul? HR. HICKMAN: What happens is this, ·.llr. Chairman, that we have available at all times an amount up to $65 million at an interest rate averaging about 7.25 per cent. And I suppose if the time ever came when our treasury bills were not very salable 1223

·- April 3, 1978, Tape 440, Page 2 -- apb MR. HICK."!AN: product~, we would say, •All right now, no trouble to get bids on them." MR. NEARY: That is not the ~1ay we hear it. MR. HICKMAN: No trouble to get bids on them at all, and the credit of this Province is good. Make no mistake about it, Mr.Chairrnan, it is good. MR. NEARY: Yes, and Newfoundland is being looked 1.lpon today as a Banana Republic in the international business world. MR.

HICKI>!.M1: Mr.Chairman, we are very proud of the fact that the lenders, particularly the Euro-dollar market right now are negotiating with us because they want us to borrow their money. And may I say there was a province thai: \vent into that market in December that apparently found it was not a satisfactory time to go in and this Province could have gone in at that time.

I su.y that si.mply to indicate that t:he credit of this Province is exceptionally good, an·d the treasury bill process which is, as I say, not peculiar to this Province at all, has turned out to be a very satisfactory one and one that yields us a great deal of low interest money. Now, Mr. Chairman, the Fisheries Loan. That is interest, by the way, on loans that have been made to fishing companies many, many years ago. If hon. gentlemen will bear with me while I am wending my way through my notes here - MR. NOLAN: Page seventy-five. MR. HICKYJI.N: It is not seventy-five. MR. NEARY: Page three, boy. MR.

HICKMAN: Here, I have it. I will give you a break- down, ~..r. Chair:nan, of the monies tha.t will be paid under 1224

April 3, 1978, Tape 440, Page 3 -- apb MR. HICK¥~: that subhead, Interest on Fisheries Loan. Bona\'ista Cold Storage Company Limited, $17,062.50 on loan number one, this is interest,Bonavista Cold Storage Company Limited $25,499.a5 on loan number two. Fisheries Products Limited $157,199, Gaultois Fisheries $55,367.71 and T.J .Hardy Compan::,;• Limited, $4,233.35, Mifflin Fisheries $3,240, Newfoundland Fur Farmers $7,051.43. MR. NEARY: Is that still functioning, Newfoundland Fur Farmers? lolR. HICKMAN: their interest.

Well, they are still paying Newfoundland Quick Freeze $1,069.57 - at least, to put it this way, as fa.r as I know they are paying their interest and it is shown here that they anticipate that they will pay this year. MR. NEARY: As far as you know, but you are not sure. MR. HICK~~: - Quinlan Borthers $2,625.60, and Wadman Enterprises $510. That is

April 3, 1~73 EC - 1 the interest paid 0:1 these fisheries lca7ts, IT<any of which go back onany, many years, bl!t to rr.y kno1de<ir,e they have been kept current and then 1o:hcn the estimates :>!"tow that that amount of money will be received this year, that is a realistic ;:zc..tt.. ~m. w. ~i • PJl;.."E : Are there any in default? MR. HIClVX~: Not that I am aware of, ~-fr. Chairr;,nn. The other question asked by the ~on. the Leaner of the .Opposition was with r<'~;r,ect to t~l! tlifference in the monies that we anticipate receiving this year from municipalities. That, !-lr.

Chai:man, is a result of rnon1e:; ·- if hon. pentle!'len will ':lear with me while I find the paRe - Iffi. m:ARY: Well, We> only have an :1our so. Why do you not just get sorr.ebody in to give you :t h<Jnd? }'P.. RICI::'W7: ~io, I do not neecl ;onyone to r:ive l'".e a hand. Well, maybe I do, and if I do I w J ll ask somebody to cor..e in ancl find it for me in my notes here because ""' notes are VE~: ex!:.e!!siv(' .. Before we get on to the municipal one th<'re is the econol'lic develotJ!l'.ent loans.

These again o.'ill be interest pay:•hle this year by various cor..panies -Atlantic Films $7,::100; Bowaters $88,97"!.Jii; Island rroduce S2,!i7S'.L•l; Newfoundland Forest Products $13,886.38 :md Newfouncland rrardwoods $J2,S74.09. tTow with respect to the town council loau5, Mr. Chairman, the situation is this, that loans to town councils made by DREE through the Government of Newfoundlnnd and then passed on to the town councils who undertook to repay t!lera pursllJlnt to the DR..~E loans, hilve finally been calculated.

There are $5,144,~00 of which amount will ~ave to be paid this year by the co~•cils to the r.overnrnent of Newfoundl~•d for transmitting to the Government of Canada, $1,749,100.

In addition to thia there are some other monies owing under the DREE loans - and this is not just to~~ councils because there is so~e school board money in there too - if the hon. the Leader of the Opposition vill recall when he ~as Minister of Commlm.ity and Social Development that the first monies for DRFE schcols were partl v p:r;1n t and partly loan, anr! t!~r· :;r!"'n 1 '.o.1 r.::; ~ari to un r'c rt .c; •' to repay to the government.again for transmlttin~ to the' Govenment of 1226

/>~ril 3, 19 78 Tape 441 FC - 2 HR. RIC~W:: Canada,the loan part. The Government of Canada has now struck an amount to be paid annually on account of these loans in the total, as I indicated, of ~1. 749 ,1n0. In aridit.i.on to that there are some other particular Dr..EE projects that ~•er.t on in certain mlli<icipalities such as Arnold's Cove, Bishop's Falls, . . llawkes Bay, Port au Choix, St.

Lawrence and Stephenville vhich will also have to be repaid and ~•hich did not become payable until this fiscal year, anc'l that is ~•hy we have the clifference ir, the a!Tlcunt that "rill be payahle tl,is year than .in previous ye11rs. '·'e do not anticipate any difficulty there. The to•·m councils ,as T unriersta!'.rl, negotiated -..rith ey coJ.lea:;ue, the han. t'le l'inister of "•micipal ' . Affairs and l'ousing 1 and the school bol.'r<"s ~Tith the ~·'inister of "duc<>ti.<>n, and that :=elated revenue will col'le in this year. /md I >=Uess it is ~us t in and then out ~gain to the r.overn~nt of ranada. ~.

H. ~T. :10'Tf.: ~~r. Chairman, I than1- ~he 'lon. r.r!.r.i3ter for his full ex~la:nation. In other t.rorcls, the r{ay of reckonine: has n"·~ arrived for sorn.e of the councils and school roards on t~e TI".fE loans .,nd grants. ~IR. HIOO!AL'Il: No. Dree loans' repay~ent started as far back as the late 1960s. It will be very interesting norv to see how one copes vith that problem during the years ahead since it seems to be mounting up. 1227

... April. 3,_. 1978 Tape 442 PK - 1 Mr. 'il. Rowe: Hr. Chairman, one other point of interest under the 101-20 subhead related revenue is 01-08, the Gull Island loan. Now presumably that amount of money is being paid to the government by Newfoundland and Labrador Hydro Corporation on a loan which the government made to Newfoundland and Labrador Hydro in respect of the premature development of the Gull Island power site; is that correct, Mr. Chairman ? MR. HICKMAN: Keep going for another minute or two until I get my notes oa that. · UR. W. ROWE: Mr.

Cnairman, why does not the minister get someone in who knows what is going on. MR. HICKMAN: MR. W. ROWE: Because he cannot. I know what is going on, - Something as important, Mr. Chai~an, as the Newfcundland and Labrador Hydro fiasco of MR. NEARY: Wasting the hour! MR. w. ROWE: - $110 million of public money, spent by this government on the abot:pt:ive, perm:\turE' startup of the Lower Churchill Gull Island Development in the weeks leading up to an election and during that election, Mr.

Chairman, you would think the minister would at least have the grace to have some knowledge about it and try to put a good face on that scandalous and disgraceful situation which be is now responsible for, and was responsible for than as a member of this administration. MR. HICKMAN: . MR. W. ROWE: Be careful now. The question I am asking, Sir,seems to be a fairly simple one even for the hon.

Minister of Finance, is whether this $7,830,000 is a repayment of interest or capital or a combination of both in respect of the $110 million most of vhich went down the ~ain on that startup, that blasting off of a few firecrackers on ~her side of the Strait of Belle Isle in the weeks and ~cnth~ 12ading up to the election, and during the election itself, which you .til recall, Sir, having taking

part in that election yourself,that not long after that election the development of Gull Island closed down and 1228

April 3, .1978 Tape 442 PK - 2 Mr. 'W. Rowe: and the money which 'loo"as spent there, $78 million or $80 million we thought at the time,was of no avail to this Province. Now the Minister of Finance casually mentions d•;ring his Budget speech that the amount is apparently $110 million of public funds. MR. HICKMAN: 'Who casually mentioned tt? MR. 'W. ROWE: Now I would like the minister to let us know whether this is in respect of that tiasco, that financial fiasco, the largest financial fiasco, Sir, in the history of this Province - SOME RON. MEMBEF.S: MR. W. ROWE: SOME RON. MEMBERS: MR. 'W.

ROWE: Hear, hear! - done with malice of forethought, - Hear, hear! and in a deliberate attempt to win over public opinion in this Province during an election, and it now has cost this Province over $100 million of public money. SOME RON. ME.~ERS: Hear, hear! MR. 'W. ROWE: Now, Sir, I would like to hear what the minister has to say about that because i.t is a very interesting item c:o see in the Consolidated Funds Services,an item which says that $7,800,000 is going to be paid to the government as revenue from some source or other.

Now I can only assume it is Newfoundland and Labrador Hydro, which means that the revenues of that particular corporation are being drained by that amount,$7,800,000,this year, last year and for every year for the foreseeable future at the same time that that corporation is forced to go before the Public Utilities Board and ask for massive increases in electrical rates so that people on fixed incomes, pensions, and low incomes, Sir, are forced to pay more for their electricity when they can ill-afford to do so, all hecause of this blatant piece of deception on the part of this ~nistration ~Jo or three years ago.

J .. SOME HON. MEMBERS: l!L ll. ROWE: He3.r, hear! I would like to bear the minister have a word or two ~o say about that, Sir. SOME HO~- MEMBERS: liear, hear! 1229

April 3, 1978 Tape 442 PK- 3 MR. CHAIR!-l-1.:-1: The han . Mi nister of Financ e . MR. HICK!-IAN: Mr. Chairman, there are two or three things. Let me first make one thing abundantly clear. MR. W. ROWE: Yes,Mr. Nixon. MR.

HICIO!A.N': The monies that are payable by Newfoundland Hydro to the Government of New~oundland on account of the interest on the Gull Island loan do not show up in Gull Island's application for rate increase before the Board of Commissioners of Public Utilities, and if it did, it was excluded by the Board of Commi ssioners of Public Utilities as being an expense that should be taken into consideration in looking at the power rates to be charged by the Newfoundland Hydro. SOHE HON. MEMBFRS: AN HON. MEMBER: MR. HICKMAN: AN HON. MEMBER: MR. HICKMA..N': Oh, oh! That is not so, Mr. Chairman. That is so, Mr. Chairman.

How can you separate them? Obviously, Mr. Chai~~n, the bon. gentlemen opposite have not re~d the decision of Mr. Clarence W. Po~ell and his Board, and it was excluded. So before hon. gentlemen get too excited about it, there was a loan made by the Government of Newfoundland to Gull Island for $78,300,000 at an interest rate of 10 per cent. 1230

April 3, 1978 . . Tape No. 443 NH- 1 MR. HICY.!·!A.'l: Gull Island Power Corporation have an obligation, or ~ewfoundland Hydro, to repay annually that ten per cent interest. And they are not taking it out of rates or monies that they earn from the sale of power to Nefoundland Light and Power Company Limited, they are borrowing it. And they will continue to borrow it until the government's fiscal advisers say that it is now in the best interest of the Govern:nent of Newfoundland to convert that into a straight loan for the Province. At the prtse:.t tiUle this a far more satisfactory way in which to proceed.

Now it is not correct to say, by any str~tch of the imagination, that that $78,300,000,or even one nickel thereof. has been money misspent; not only is it not money misspent, but it is money that will inure to the benefit of the people of this Province · when Gull Island goes as it must go.

And there is very little doubt in ~y mind that when the Gull Island development is financed,and if and when we can enter into an agreement that is satisfactory to the peaple of this Province with the Goverrunent of Canada,·that the Province's investment, that their feasibility studies, very necessary feasibility studies done in the Straits of Bell Isle, that work done on the right of way and the surveys of the right of way, that all of that work is part of the project, part of tbe project financing, and the Government of Newfoundland will certainly and most assuredly, in my opinion, be in their right to ask that that be credited as part of the project financing.

So it is not money wasted. There is absolutely nothing that has been done, paid for out of that $78 million, that sometime, if we can ever get a satisfactory agreement, will "not be beneficial to the project anc!, ~lr. Speaker, I repeat that no way, in absolutely no conceivable way, that the mo~ey that is payable by'Gull Island for the interest on this loan to the Go<ernment of Newfoundl~ ~n no conceivable way does that reflect in any hydro rates ~-~sently charged by Hydro to the consumers distributor, 1231

April 3, 1978 tape No. 443 NM- 2 Ne~foundland Light and Po~er Company L~ited, and this was done at the time as being the preferable way of financing that work that was being done on Gull Island because we were told it was nc~ !n the Province's interest to take a major equity investnent ::.n the llycro organization at: this time and indeed there was an opinion expressed that it would be con~~ary to the present legislation.

And also it gives the Province the kind of flexibility that it needs so that the Province can repay or convert the l.t-an to equity, or, and han. gentleL"'Ien will realize what at that time, tt·:O years ago, appeared to be some>l'hat unlikely, may now become very realistic an~ that is the right or the desirability of converting this money into equity. Because if ~1e can reach a satisfactory agreement with the Government of Canada for the development of the Lower Churchill, one sug~es:ion t~at has been made by the Government of Canada iz that there be an equity position . by both governments.

We have to be very, very careful on that, ~1r, Speaker, because we have to be sure t~1at the equity does not carry with it the right of the other investor, namely the Government of Canada. to dividends from the operation of Gull Islaad. HR. NEARY: !lR. HICIC!AN: You are going -.;ray off again or a tangent. No. No• I am not, I am getting back to this. and I re{leat again, I am going MR. NEARY: (Inaudible) m. HICK11A..~: Look,the hon. gentleman, these are very, very valuable figures in my opinion that the Co~ttee should have.

And the hen. the Leader of the Opposition has made the statement that the $78.3 million was not an expenditure in the be~t interest of the Gull Island development and I say. Mr. Chairman. that it was a very approp~iate and prudent expenditure because it is one that if we get into an equity position with the Government of Canada. that we can justifiably say, "There is our equity right tiOI#. We have got $78.3 million in there,'' if 1232

April 3, 19 7S Tape 44~ r.c - 1 that is the way we should do it, hut we do have that flexibility, and it is a flexibility that 1-re coulC. only have, Hr. Chainr .. ;m, by follo~ring that route. !-!R. Cl-!AI 11.'1~T: the Opposition. ~. W.

N. pQI,'E: The hon. the Leader of One final little conment on this, Sir, an~ then ;:ny hen. friencl and colleague, the Opposition f'ouse I.eader, would like to have a t-rord or two to say about this suhject. lie ls also a little ex~rcised, as I a~, about this blatant misuse of ~u~lic funds, Sir. ~'e will not go into it in any tletail notJ, Sir, because the Minister of !!i.nes and Ener~y will have allocated a lot more time for his departt!lent. The '!inister of 1-'ines and Energy can give his version, a papered over vP-rsion of the facts in this case as lvell, Sir. Just let tr.e y,o on record as sayinp;, ''r.

Chairman, that the ~inister of "ina:tce knoiJS or should have known that there t.;as misuse of puhlic funds in this particular case. T~m.; he as an int~llil!ent man, a professional man,can stand up in this House and say that at a time when there was an election called, an election undenray, $73 million at that time, which has now apparently escalated to $110 million - SlOO million of public funds could be spent on a project, Sir, at a time When the government of this Province had no idea any more t~an a child as to where the remaining $2~ billion of financing was going to come from, }fr.

Chairman, at a time When the government and fJewfotmdland P.ydro had no markets whatsoe,Ter for the hydro ~ich was supposed to be developed in the Cull Island site . and, ?{r. Chairman, at a time when the government had no way, Sir, of getting the hydro,even if they did have markets, to those mar~ets outside of the Province of Quebec- !!r.

Chairman, how the Hinister of Finance can credibly stand up in this House and pretend to the people in this Rouse and to the public and to the press, Sir, that $10n million of government money, public money spent in those circumstances of no markets, no financing arran red in "-~'Y ·~;~y, shape or fnrm 'ln£1 no •-mv to get it to the ~~rkets even if there had be~n mar~ets, Mr. Chairman, 1233

April 3, 1978 Tape 444 FC - 2 }ffi.. W. N. ROl-lE : how he can sa.y that that was money well- spent on behalf of this Province boggles everybo~y's i~~~ination in t~is hon. House, Sir. Even his own colleagues do not believe it and they are e~barrassed by the scectacle of their minister stanting up and trying to persuade this House or the press or t:he oublic th-'lt this $lllfl n•illion . . . was in fact well-spent.

It wQs ~Dney down the drain, Sir, or ~ su~stantial portion thereof, an~ I say here now that enough t:!oney uas "'as ted on t!;at prccature, ?artisa~ political suppose~ start-up of t~e Gull Island development, Sir, enoug'!'l. money <·ras ..raste~, puhlic fm1ds, to start :JTld co!!!plete all the necessary \os.,ital construction that shoul ~ 'l,e goir.7. ahead this yeP..r in this Province and for the next t·~o or three years. I make that statell'ent, Sir, and I k.no~>: t~:at t!1at statej;\ent cannot ~ · c contradicterl. by any cor:crete evi~ence of cony kind.

And this is the kind of position that this government has r-ot us i.nto toda:r ~>•here ~:e have to lay on ~2 for each indiviaual ser.~ce fo~ a c~ild ~no goes to a dentist and an incr.ea~e in th'= ,:al'=s tax and an incr'=aS~ ht t~e <:'JSt:: of electricity to cons~ers an~ a ~3 ward fee for people going to hospital through no desire or fault of their own, all because, Sir, of the mistranagement of the public: funds of this Province, cf 1.;hich t~e Gull Island pre~ture political start-up, so-called, is one of the ~est blatant example.

One hundred ~~Ilion dollars or a stilistantial portion thereof of public money down the drain, which has caused this government to be in the straits it is to~2y, Sir. '1-!R. NEARY: Mr. Chairnan. ~lR. lUCKtfA!<: Y~y I answer the hon. gentleman and then I will - l!R. NEARY: Well I can put a few more questions to ~e minister and then if the minister wants to he can answer the~ all at the same time. ·. MR. • Hn:lO'..Al'l : Okay. -~. NEARY: We only have one hour on this particular head, Sir, and over half of t~at is gene nou. 1234

April 3, l97S f.C - 3 Uell, before I s~ling bn ck to the point r aised by my hon. collengue, the Leader of the Opposici~r., ! Honder if t he hon . the "inister of Finance could ~r.ake a fe1• cotes on other questions . First of ell ,could the ~inister =eke a note to let the llcuse koo1-1 ~hat the total debt of the Province is at the pres ent tirne , t he total debt of the Province . I woulo suspect that it is scl'lewhere in tho vicinity of $2.E billion. /mel if hon . members will recal l, vhen the former 1235

April 3,1973 Tape No, 445 AH-1 ~~: maligned Liberal Administration left offic~ in 1972 on January 18, 1972 toe total debt of the Province vas less than $800 million, it was soiOle..,here around $700 million. In less than six years the present administration have more than trebleci t;1e debt of the Proviacc. AD.d we will find out in a moment vl:en the Hinister of Finance tells the House what the total deb~ is of ~his Province at the P.resen~ time.

And would the minister also tell the House that when the bovernment go to the bond market for a loan,to float a Uand issue,they l~v.e to present to the people in the United States, to t!1e Security, I presume, to the Security Commission - HR.W.ROWE: SEC. MR. NEARY: SEC in the United States, they have to present a prospectus outlining the various activities,economic and othe~•ise, that are going oa in the Province.

And I nave looked over these prospectuses for the last several years and I note in the prospectus that tne amount oving by the Linerboard mill, the botal cost of t:1e L!nerboard ~ill has d.~cpped .:md not i!J.creased, Despit~ t!"!e fa~~ that millions and millions of dollars have been pi.AI!lped into the Lir:e.rboa.rd mill since it started operation, the cost now showing in the prospectus is less than it was three or four or five years ago. How can toat happen? Is that not fraudulent, Mr.

Chairman1 It tl~t not a fraudulent atatement7 And if the government is caught making fraudulent s~at~ents under the Security people in Washington that they could be not only sueu, I suppose,but they could be barred from going into the market again, ever again. I have three prospectuses here, Sir, and there are three separate totals of production, of the production of that mill and the cost bas gone do-~ even though this House has approved literally millions of dollars for the cost of operating that mill.

It is now ahown in the latest prospectus as bei.Ilg less thau it has ever been and I do not know how this can happen. We find the same thing with the oll refinery. Could the minister tell the House if Provincial Refining 1236.

April 3,1971! Tape No. 445 AH-2 MR. NEARY: and if Newfoundland Refining are still function:l.n); 7 And if so,would the cinister tell the House,if. Provincial Refini~ is still functioning,who represents the government on that board of directors,and if any interesc has ever been paid to the government and if not has the interest bceu a<.ided on to the capital cost and shown in that same prospectus that I am talking about'l Did the minister get that question? MR.W.ROWE: Yes. He is reading the resignation now. MR.

NEARY: $30 million was the initial amount of money that was given to Provincial Refinery; $30 cillion was paid out in cash over a period of three years to build the Eefinery. MR. HIClQlf~: Secured by a second mortgage. MR. NEARY: Secured by a second wortgage. But I understaw.i that it is now a total. of $47 million. Tne interest has been added to the capital cost of the refinery, is that not correct? MR. HICKHA.."{: MR. NEARY: prospectus? MR. HICKNJ\N: a prospectus. MR. ~.-cARY: MR. HI CIOIAN: Yes. That is correct.

But is tl~t shown in the I should not think that you would show tha·t in You would not show it in the prospectus. I do not know. MR. NEARY: Well,if you do not you are giving a false L~pression to_ the people who are investilfg their money. The total should uot be $30 mlllion 1 it should be $47 million because ti1ere is an outstanding amount of interest of $17 million. The government has never collected one cent in interest. The Premier,! believe,is on that Provincial Refin;lng and so is Mr. Crosbie •·' Mr. Crosbie should be kicked off because he is no longer a representative of this governoent.

And are these two companies still functioningl rney are registered in the Registry Office. AN HOY ME..'lliEI<.: .·). The minister fell out of bed • 1237

.wru 3,1978 Tape No. 445 All-3 The ndoister fell out of bed. AN HON •. HE·1BER: No. Ue is back. MR. NEARY: So, Mr. Speaker, I would like to find out i.f these prospectuses are scrutinized by the Attorney General and the 11inister of Justice of this Province because if they are not, Sir, the day may not be to far away when they wfll be questioned in Washington by the Security pe~ple and i .t liiight turn out to be a source of elllbarrassnent to this Province where false inforttation has been put into the prospectus that could do this Province an a'Wful lot of damage. 1238

April .J, _1978 Tape No. 446 NH- 1 MR. lfEARY: Mr. Chairman, those are two questions I would like to get the answer to; the total debt, 'and I would like to find out if we have a sinking fund no·w? And how much goes into that sinking fund this year to pay off tha:: total debt that I am talking about? Now, Mr. Chairman, I do not want to take too much time. There may be other me~ers who want to get in o~ this.

But I want to come back to what ~ han. friend, the Leader of the Opposition, •ms talking about, the $78.3 million that. was paid out in con."lection with the setting off of a couple of firecrackers on either side of the Straits of Bell Isle before the '75 election. ~~. Chairman, I am told, and the hon. gen~le~n in answet· to my hon. friend a few moments ago told the House, and probably did it without knowledge of the facts, told the !louse that most of the work that was done will be beneficial to the Province if and ~<hen the d~velop!I'.eP..t of the Lower C!1urchill takes place. That, Sir, is r.ot. so.

I cannot call the hon. gentleman a liar·. I aa nut allo;.;ed, Sir. But, :·Ir. Chai=n, the hon. gentleman, deliberately or otherwise, gave the ~ou5e incorrect information because most of the work done will not be beneficial to the Province if and when the development of the Lower Churchill takes p~ace. Host of the moo.ey, as TJrf hon. friend indicated, was wasted and squandered : And I will give the House an example, Mr. Chaircan. Teshmoo.t, the company that was overseeing the project, moved a lot of their employees, a lot of their staff, into St. John's around that time.

Because they figured the project was going to last four or five or six years, and so they would need a big staff into Newfoundland, so they moved a lot of their staff in here, and houses had to be bought for these people. And the houses lwere bought, Sir, by the employees of Teshmont, on money advanced to the~ frc~ Newfounlland Hydro at no interest, no interest, Mr. Chairman, or if 1239

AprU 3, 1978 Tape No. 446 NM- 2 MR. NEARY: there ~as an interest, very lo~ interest. I am told no interest. And so a large number of houses ~ere bought, these employees were moved into St. John's at public expense, they were given the money at public expense to buy the houses at no interest. But then after the project shut down, Sir, after a few months. the value of real estate had dropped in St. John's and these e~::ployees flew the cocp; took off back to wherever they came from, the houses were then sold by Royal Trust at a loss.

They were sold fer less than the employees paid for them in the first place, they were sold at a loss. And then Newfoundland Hydro had to pick up the loss for the sale of these houses. So they got shafted twice and a large number of houses were involved, several hundreds of thousa:td.s of dollars were paid out by Ne-..Jfoundlaml Hydro because of this foolish policy that was followed by Newfoundland Hydro, using this I'JOney that was passed over to them by the Province. v1ell wat is core serious than that, Hr.

ChairLla:l, I am told that the contracts that were issued to. the or J:Cade between tl:e various contractors that worked on the Lower Churchill, on the Gull Island project, that contracts tvere negotiated in sue~ a sloppy oanner, in such a careless way, that the contractors worked ou and on and ou and on charging ~P literally millions and millions and millions of dollars that was not contracted for in the original agreement. 1240

.. April 3, 1978 Tape 447 Plt- 1 ·. Millions of dollars, Sir, not thousands,Qillions of dollars, and final!y they had to be brought to a halt, they wer~ just working on and on and on without any control at all. And in this way millions and millions of dollars of this $100 millicn as my hon. friend referred to - MR. HICK1-!AN"; $7 8. 3 million. MR. NEARY: - were paid out by Newfoundland. Hydro, paid out unnecessarily. Can the minister tell us how this work is going to benefit the Province if and when the Lower Churchill Develop~ent takes place? The money is being squandered and wasted. Millions of dollars.

Look, Mr. Chaircan, the only way to bring this to a head, let the minister get the contracts and table the original agreements in this House, and then tell us how much was paid out to these contractors in the final analysis. Will the minister table the contract in connection with the development of the Lower Churchill of that $75 million? or $78 million? Does the minis~~r hear me1 MR. RIC¥-'1.:\N: I am listening. Yes. MR. NEARY: ~ill the minister table the contracts? Will the minister table the original agreements with the contractor? ~ith Teshmont and tee various subcontractors - MR.

HICKNAS: "Bill'; did you table these last year? !m. OOO!lY: Pardon? MR. HICKMA .. ';: Where they tabled in the debate here last year on Gull Island? MR. NEARY: No,they were not tabled, MR. HICKX\N: The year before was it? Yes. MR. NEARY: No,they were not tabled the year before either. MR. HICKHA.>i: Yes, I think they ~ere. MR. !lEARY: Mr. Chairman, I ~ asking the minister now if the minie~r will table the original agreements, and then the amounts that ~paid in each c~se to the contractors. Now that is fair en ough, St~. If ~e are going tD pass Consolidated Funds Sercive s . ~hen ~~ have a ri~ r :c :1241

Apr1.1 3, 1978 Tape 447 PK- 2 Mr. Neary: to this information. And I believe we will find out, we will find that literally millions of dollars were paid out that the contractors were working without control. There was no control over them. And then there is the ::ase of these houses that I just spoke about. And, Mr. Chai~~n, will the minister also make a note of ex-gratia payments, non-statutory which seems to be up by $700,000. Give us a list of payments made under ,this subhead. MR. HICKMAN: What is the number of that subhead? MR. NEARY: That is a way down 105-12.

Give us a list of the ex-gratia payments, non-statutory so we can take a look at that. So with these few remarks, Hr. Chairman, I hope the minister can give us some satisfactory answers for a change. SOME RON. MEMBERS: Hear, hear! MR. HICKMAN: ~That do you mean, for a change? Do not be saying nasty things like that. May I work backwards? MR. NEARY: From port to starboard. MR. HIC~.AN: That is right. I knaw. AN HON. MEMBER: In baby talk,too. MR.

HICKMAN: ~-gratia , payments for 1978-1979; this subhead includes payments, and part payments of pensions to individuals who for particular reasons could not be pensioned in accordance with existing legislation. This year's estimate also includes the amounts which will fall due pursuant to the Hart report, that is the big one, and pa~ent to widows who are ineligible for survivors pension under the pension legislation which did not provide for same. The increase primarily, Mr. Chairman, of $700,000 arises out of the implementation of the Hart report on the Waterford strike.

That vas $500.000 for survivors benefits, fifty widows at $2.000 per annum for two years retroactive, and $200,000 to other people going to pension in the Waterford. The ex-gratia, payments which have been the practice for a long time relate mostly to widows 1 as I recall it,and pensioners who- well, let me give you an example, I can recall in the 1960s when w~ implemented a lot of ex-gratia payments for widows of police officers 1242

April 3, 1978 Tape 1,47 PK - 3 Mr. Hickman: ~~o under their legislation at that t ice, it is changed no~, b~t in the la~e 1960s, and up until t he late 1960s no provisions for survivor benefits tc people -ho ucre getting pensions under the Constabalary Pensions Ac:,and thut ~ou ld be ~he fire deparcment and the penetentiary. And on several occasions - and ~t still happens -representation is made to government on behalf of a widow uho has no entitlement under the legislation that her late husband uent to pension on.

And the advice that ue foll ow is that rather than t ry to do it by legislation that it be done by way of ex -gr atja payment that cannot be considered as a precedent so that each case can be decided on its merits. 1243'

April 3, 1978 Tape No. 448 NH- 1 MR. HIClG-!1\~: No~, }rr. Chairman, the total indebtedness of the Province, as of the time of the bri~gins d~~ of the Budget, or Yill be,rather,at ~~e end of the '78 fiscal year, is $2,402,000,000, as shown in exhibit five of the public sector debt,and that includes the debts not just of the Province, :·!r. Chairman, but the Crow~ corporations, utilities, housin3, the municipal debt, school board debt and other Cro"~ corporations. ihe total Provinci~l direct debt is $1,669,000,000, the indirect debt is $965,000,000 for a total of $2,402,001,000.

The han. gentlecan from :::.aPoile (i!r. Neary) asked that I indicate what the amount is in the sinki01g fund. NOY that varies from one bor.d issue to another and where one borro~JS. For instauce 1 in the Canadian market,as I understand it, there is no sinking f~~Q at all.

In the American market,they i~sist on a sinking fund and sets forth when you start building up the sinking £u~a fund, generally about six years after the loan has been made, and there technically one is supposed to put the money into a separate account. ·\.'hat happens is t:1c Province borrows on sectlrities to th~t amount and places it in the sinking fund. In the European market the situation is quite different. They do not have in the Euro-dollar markP.t " Q~n'i..-1~~ .,':.In:! concept at all.

They set forth at the beginning of, I think it is the sixth year with most of our issues, we must start repaying the loan if it is a fifteen year, let us say, Euro-dollar cr Deutschemark loan, beginning with the sixth year there is a payment made on account of principle. !_IP- 1iEARY: MIL. UICIC-!A.~ : .. !£. !mARY: 'l'm.. lllClQ L \..'l': There is only a sinking fund In the US market, yes. No sinking fund for Canadian - As far as I know the Canadian ft:nd, most of which ve . , ~ from Canada Pension. :."lm- ~= ~ HIC::::1l\.."il: '"~- 000DY: "bon1ls. True. Ri&ht. It is ~ red~~pclon. You buy back so many 1244

April 3, .1978 Tape No. 448 NM- 2 MR. HlCK.!·!A:l: That is right.

There :l.s a phras2 for it that excapes my memory nov, but th<lt is wi1at I ac saying; you buy back so l!lany per year, starting :;enerally in the sixth year, TILis reduc~~ your interest on account of the bnlail.ce o: the loan and it is amorci::ed in such a way betwcen~say,the sixth and the fifteenth year that at the end of the last year, or the last year of the term of the bond, it is paid off. & • Chairman, so tl.at there can be no .U.s take about the procedure and policy that is follo\ved by this government when borrowing in the various money m:1rkets of the world ;mel !'"Tticularl;;­ in the US money =rket, which is one with,I suspect, the most strli1gent regulations, the procedure that is followed is that the prospectus is prt>rared by this Provin:=e in consultation with its fisc:ll agents: the prospectus is then filed with the P:rovince 's fiscal agents in the US, that is t~rrill Lynch a~d Associates, and it is then subjected to the SEC for very careful scrutiny.

If the SEC have any doubts about, or want a further amplif!cati0n not so much c!ouct - about the al!lplification of the information contained in the prospectus, they go back,as I understand it, to our agents wllo in turn ask us for clarification and eventually the SEC approve the prospectus.

As a further pro~ection to the investor, once the Land issue is ready to be floated and our fiscal agents advise us that this is a good time to go into the market. the }tlnister of Finance is obliged to go to New York and appear before a meeting that is know as a due diligence meeting. in the trade they call it a due dilly meeting.

And before that due dilly meeting are representatives·in this large auditorium of all of the companies that are goini to pcrchd5e our bonds, highly trained actuaries, chartered accountants, people skilled in the inveGtment market representing Prudential Life, ~~atever company it might be, and there the Uinister of Finance is obligated to briefly revie·,r the prospectus and then he has to await ques tiolls from the floor. 1245

April .3 , .1978 Tape No . 44S ~IR . HlCJC~ And he , ·.n th t he help of his advisers . will then try am! ans'I-'Ct' nny of the se questions ti1:1t arc put to us ~ith respe ct to ~ he ;utur e of t he Provi~cc. ~'ht.!n t i1e -:aung is bcint cocplc:ed by t he bonding houses ~ny !te~ have t o be tak en into acco~~t , many itez are the s u~ j ect :::at te!.' of scn: t ir.y by those who att end the due dili gence c:eeti11g. :~um!>e r one , and I find t hat this is 1246

April 3, 1978 Tape 449 Dw - 1 becoming increasingly i.::uportant in t i1e eyes of tne American investor in particular, .is the econoruic prospects for the future of ~ewfoundland and our resource potential. Ai:'l i:ION. HEN!lER: _HR. UICt-:.'1.\i~: I would think so.

The American investors: have a very strong affinity to this .t'rovince and our rat:.ing,despite most difficult timks-anu anyone would be a fool if he or she would not admit that dud.ng the l!HOs that this has been a difficult and expensive time for cverjone to do business- but during all of ti1at ti:ue we had managed to maintain the rating that was inheriteu by t his administration. ~Al<Y: !-lR.. H 1 C!OL~'l : What is it like at this time? Is i:: c~;;int; q:Jestic n ~d"?

It is not being questioneu, }.r. ~airman.There is no doubt in my mind,and the twp rating agencies · tllat is ~.oodys Incorporated a::ci Standard and coors-have continueJ to give us the same ratings we have had in the past. rr.e Needy rating is Baa and S~andard and Poor is an A rating. Now an A for Sta~carci and Poor may be the equivalent of a aaa rating With Y~ody's. •• second thing they look at is tbe jebt burden of the Frcvince and the &_ervicing costs, 3Ilci the third thing they look at, rtr.

Speaker, or tbe fourth thing or whatever you want to call it,anothar item,is the Federal revenue sharing programE and that is very very signific:aut in my opinion - MR. NEARY: That is the only thing that saves UB- MR.

HICIO'.AN: - very very significant in my opinio~ for any government, any provincial government or municipal governn:ent ia Canede presently going into the ao~d Markets of the United Sta:es that they believe that as being part of this Confederacy that the ' econooy'of Canada and the obligations ~xpressed or implied of the 50v~rnruent of Canada to;.:ards the orovinc:es is verv rPl""~"r in deciding on a rating and the aoility of the 1247

Tape 449 ~.R. diC!Oi.t\:~; Province to borrov. }.nether item. Hr. _Chairman. which is very very relevant .and =y I go back to what the hon. gentleman - I nave a note here that I do r.ot think people are a~are of because of it is not of too much vinta6e. There has been• lot .-;,f talk in this House,we have read it from' time to time in the financial ~gazines of Canada in particu­ lar when tt1ey puolish r tings at the vrovinces, tnat our ratint; has been lower tr.al .. that of the other Canadian provinces. ~. ~~:>l(Y; The worst in Canada.

HR. tiiCK!!A:'i: And bon. ge11 tleman •Will be proud,and this committee will be proud to note that even though these facts,~,d they are facts,have appeareG anu nave continued to appear since I do not know when-it was oefore,I suspect,most bon. ge~tleman were in politics;certainly when I first becaQe a member of tnis bon. House wy recollection is tnat t.he heady rating was Baa,the same as we have now despite all of th4t ~ ~~ HON. NE~irlER: Baa I MR. .r:U Cl<hA~ : ~aa I.

Even throu~h this publicity Standard and Poor have rated us on a par with the Province of New Brunswick and that should be good news to the people of this Province - MR. NEARY: aas~~ew Brunswick chang~d receotly? MR. 4ICKMAN.: Not that I a111 aware of·,Mr, ~na1:nr.an. I hate to disappoint the han. gentleman ~rom La?oil~ • but ' MR. N~AR~: In trouble in the ~niteu ~tates market.

MR. i:iiC!OrA.'<: - our credit has not_ changed.&M I repeat,the credit rating of this Pr~vince has not changed for a long,lcmg time;th~ same credit rating in Moody's and in Standard and Poor is that which prevailed when the Moores administration came to office.-wu we have during the last six years,1il:lybe tile last ten yt:ars ,suffered frma an .. inflntion fact..1r that ,,o one coul<.l nave dreamt of or conceived when that rating v~s given the Provi~ce of Newfoundland sometime prior to that by these two rating agencies. 124S

Ap:!l 3, l97S ~tr . Chairman . a~taih c.;ec 011 W).th it. Dw - J I am t r)'ing .the he:\. :;cr. tl ~ - man has asked and the CoUI&llitt.ee have a r,;. ~nt to knew as to tht! format t t:at is follo~o• ccl by the rating a,;encies anci by t ile £EC and by tbe borrowers-or the lenders,rather, in ::he U::i t ed States lllarket to whom we t urn to bet our mont!y, Aud, }!r. Chair=:~, I re peat that tr..e inforl!latiou tnat is filed i:.y this "Province; ,uy its fisc a l 1249

April 3, 1978 Tape !.50 EC - 1 l!R. HICT:"Ail : a~<ents on 'hehalf of the Province after the most careful scrutiny by the Oepart!!':ent of finance, by the Department of Justice, hy the ':.oHe sor..etllir.g ];n.; firm i.n 7'eu York and by Herrill-Lynch and submitted to the sr:c, absolutely factual, and even then the SEC have, and very properly, a procedure that has to be followed tvhich allous them to double check thoroughly and to their satisfaction every fact set forth in our prospectus. Another note, '!r.

Chairml!n, because I would not want this Comnitt2e in any way to think that there is anyt~ing untoward happeninli w'1ich has in any ~o•ay affected the credit rating of t~is Province during the past several years, and I will. ~ivc a note I have here that even though the ~gencies have rated the Province of ~ewfoun~land at a credit ratin~ below that of Quebec - Quehec has a rating of A a - riewfoun<:!land 's bonds are presently trading a·t a t~uch better price t"han quelJec' s, and this, '·!r. Speaker, is just as important - !!R. :·:EA?.Y: ~. HICK?· '.~H: We have no se!'aratists rio<•n here. - as the ratin!!:, ~·r.

Chairman, that is imposed upon us by ~!oodys and Standard and l'oor, 1\ecause it shm.;s - and the ~eople who buy our bonds t~ey obviously before they buy them - nobody .in the United States, the insurance companies or those who administer trust funds - MR. NEARY: They are paying (inaudible) separatists. MR. HIC~iA~!: - they_ do not go out, Mr. Chail:"l!lan, and buy the bonds of the Province of Newfoundland without first consulting their fiscal advisors 1 whoever they may be.

And the fact that they are prepared to come in and pay a good price for Newfoundland - HR. ~iEA!lY : You are abusing the one hour, you know that. You are abusin~ the on~ hour. MR. HIC!0!AN: Mr. Chairman. look, the hon. gentleman gets up and he makes statements ahout the Province's credit rating is not what it should be,and I say, 1!r. Chairman. that if it takes twenty hours 1 have :m o'·.l L~at ion as "inister of rinance to insure t!lis CoCQittee that the credit rating of this Province is indeed still the 1Zi0

April 3, 197'2. Tape 450 EC -· 2 NR. EICK!lXl: sa~e as it has ~een for a long, long time. I would like to see it higher - no quest ion about it, I uouj d like, everyone 'Woul•l like to sec t:1e crerlit ratinf! hi;2.:1er. NR. !:EA~Y: The Minister is giving t!~c '4oul"" ;..,~<"r:-1'-ticn. Now w-e are over in Quebec. Quehec is payin~ tl-te nricc for .~epnretisr. .. '!TI. rii':T"'.~'': ~·r. r'l,airr"2n, you T·t~m·r, t"hc hon. [entle,.,,:m hat~s li~~e the tlic 1:ens to r.-:t infomntion tl1<1t sort of diffuses !!is ar~ul"~nt -"!n~ <lestrc>ys it. JJear, he.:o.r! Or <let", !)le<~l"e!

I c'o 'lave to :!.n for.n the C:onm.ittee that the tine given for this hea:'in::; ~as now expired. On motion, subheads 1"5-01-!17 and 105--o13-12 :-rithout aT:'.e!'.dr.ent, carried. Fina..'lce :Peeding 4, page 17. Does 4!11-~1 carry? The hon. me!".'ter fer La?oil,;,. !tr.Chairman, is the hon. gentler.~.n going to hive t"he Fouse - the hon. gentleman ~a~ an o~portunity, ~ir. I cUll just waiting for r.zy colleai1Ue, the. p,entlet:tan ~;t.o is shac'mdng tl-te minister, to return to his seat before we pet off the minister's salary, Sir, but there is a number - MR.. W. ~ • ROl:rE : MR. ~RY: MR. W. N. ROHE: MR.

NEAR.Y: What are we into? We are into Fin~nce. Oh, I see. There are a nunber of things, Sir, a number of questions that I put to the minister under the last sub-head that I alri going to put to the m:l.nister aga:ln now, and they have to do vith the oil refinery. And the minister did not give me the ammer stalled for time, dragged out his answer, dragged red herrings into the Rouse and killed the balance of the hour that was left, and the minister abused his privilege. After agreeing to one hour on consolirlat~d funrl servic~s,t''e ninister rli,J T'Ct ilTIS'.-ICt" all th,-, n.m~stions. i'.nc! Sir, tl~c 12Sf

April 3, 19 78 Tape 450 FC - J 1'11 • ~:F!\!\Y: hig question that r ~ave to put to the Minister of financP. in connection with the oil refinery 1252

April 3, 1978, Tape 451, Page 1 -- apb MR. NEARY: has to do with New~oundland Refinery and Provincial Refinery. I asked the minister under Consolidated Revenue, and I am going to ask the minister again, because the money was paid out by the Department of Finance originally,back in 1970 or 1971 I think it was, $30 million was paid out and some of it was paid out when this administration took of£ice. $25 million was paid out when the oil refinery started and the balance was paid out over a period of two or three years for a total of $30 million.

There has been an interest accumulated on that loan of $l7 million for a total now of $47 million. But, Mr. Chairman, I understand all this but .what I asked the minister was, who now represents the government on these two Crown corporations, Newfoundland Refinery and Provincial Refining? Newfoundland Refi~ing and Provincial Refining, who represents the government on these two Crown corporations? That is the question I put to the minister and the minister did not give me an answer and apparently is not prepared to give me an answer, MR. HICK~~= Yes.! was prepared to give you an answer. MR. NEARY: Now, Mr.

Chairman, the · question is once we find out who represents the government on these two Crown corporations,then I would like to put another question to the minister. So could the minister indicate to me now who represents the government on either one or both of these Crown corporations? MR. HICKMAN: I have that note because ~he bon. gentleman asked me the other day. I am speaking from memory now, but when the agreement - the Committee will recall that in 1975, I think it was, or 1974, when Mr. John C. crosbie was still Minister of

April 3, 1978, Tape 451, Page 2 -~ apb MR. HICK..'1AN: Finance, he and I went to London on two occasions and negotiated to get this Province relieved of its general guarantee of the Corne by Chance refinery. I think that that was, and I say this modestly, the most salutary thing that has been done in the financial history of this Province. SOME HON. ME~ffiERS: Hear, hear! MR. HICKMAN: Because if we had not been relieved of that general obligation that had been given - I have forgotten the year, I think it was 1971 - to give the refinery going - MR. NEARY: Mr. Chairman - MR. HICKMAN: Wait now, let me finish. MR.

NEARY: I yielded to give the hon. gentleman a chance to give me the names of the people. MR. HICKMAN: Yes, well the hon. gentleman - MR. NOLA.."<: Give him the names, boy, that is what we are asking for. MR. HICKMAN: Mr. Chairman, I repeat, I must finish what I am saying here in order to remind the Committee of the way the Provincial Refining was set up.

When we were relieved of the obligation, of any obligation for the general indebtedness of Newfoundland Refining, the Province not having any further interest in Provincial Refining and Provincial Holdings, and Provincial Building, and the companies no longer belonging to us because we had been relieved of the obligation, we were kicked off; to my knowledge there is no one from the Government of Newfoundland on Provincial Refining. Newfoundland Refining,which is a Shaheen company, again I am not aware 1254 ·

April 3, 1978, Tape 451, Page 3 -- apb MR. HICKMAN: that either administration, either the former administration or this administration had a representative on their board. I can recall that the former administration tried to negotiate someone getting on that board, but my recollection is that Mr. Shaheen steadfastly resisted. MR. NEARY: All right, Mr. Chairman, I have the answer I was looking for. The han. gentleman can now take his seat. The hon. gentleman told the House that the government does not have a representative on Newfoundland Refinery - MR. HICKMAN: As far as I know. MR.

NEARY: - or Provincial Refinery, as far as the han. gentl~~an knows. The han. gentleman is Attorney General and Minister of Justice and Minister of Finance in this Province, and the hon. gentleman cannot give me a definite answer as to whether or not the Goverr~ent of this Province have representatives on these two Crown corporations, is that correct? The minister cannot tell me for sure. Can the minister tell me? MR. HICKMAN: MR. NEARY: I am certain in my own mind - Can the minister tell me? Mr. Chairman, I am asking the minister to tell me definitely, to assure this House.

The minister told this House to his knowledge the government does not have representatives on either one of these board of directors, .i.s that correct? MR. HICKMAN: I said, to my knowledge. MR. NEARY: Mr. Speaker, I am asking the gentleman to give the House the information. MR. RIDEOUT: Let him send for it if he does not have it. MR. NEARY: The hon. gentleman should get somebody in who knows. 1255

April 3, 1978, Tape 451, Page 4 ~- apb MR. HICKMAN : Hold on,now ! I knew I was right! The shares were sold in Provincial Refinin g and Provincial Building to the Shaheen Company . I knew I was right! We do not have anyone on that company. SOME HON . HEHBERS : Hear, hear ! MR. NEARY: Mr . Chairman, the hon . gentl~~an again, Sir , said ~~at the shares were sold to Newfoundland Refining, is that correct? MR.

HIC~~: The shares in Provincial Building and Provincial Refining, these were the two Crown corporations that were incorporated in the 1960's by the Government of Newfoundland, that when the Government of Newfoundland was relieved of its general obligation to guarantee all the indebtedness of the Newfoundland Refining and the Come by Chance operation, which was about 1974 or 1975, the shares were then sold for $1 to the Shaheen company and as we 1256

April 3,1978 Tap<: ;!o. 452 AH-1 had no further interest in tlue::;e cOL"1panies, and it ~1as neve:r i<.tendo;:d th:1t we lo.>OulC: h.:lvc an intere:>t in the cor.!panics, t:~~c shareholder!; are t.1e no•~iu'"es ,).:: Hr. Shaheen and therefore we \.l'ould not have the rir,ht to have any one on tl.e board after that date. ~fit. NEARY: ~lr. Chairman, I nope ti:lat that information ha~ gone in. I hope that that information was picked up by Hansard. MR. l!ICIO!AN: I am sure it is. NR. NEARY: o1r.

Chairman, I hope that that information ha:; been picked up by l~usard and gone into the publlc record, Sir, because the statement that the han. gentleman made again is misleadiuo; :::o this House, Sir, grossly misleading. The hon. gentleman told us that the reason the government had representatives on these Board of Director·s in the first place was to protect the gover=~ut investments, to make sure the debts were paid, to make sure the creditors were paid. Is that correct? MR.

HICI(}1A.'l: Because of the contingent liability of the Government of Newfoundland for the general unsecured indebtedness of the :refinery, Nothinc; to do with the ~:~ortgagel~o.·e had our security on that, a second mortgage, that $47 million. But when the }wore's Administration came into office,lo and behold: the hon. gentleman will recall a letter of 1971,1 think it was,to the ECDG from the Governmen~ of Newfoundland saying that apart altogether from the money that we have advanced we will guarantee any indebtedness of Nevfoundla4J.d Refining.

Plat was an horrendous thing for the Province to· face and it was a contingent liability that would have to be shown up as being part of the Province,and we negotiated a release from that and having obtained a release from our obligation then of course we would naturally have no further interest in these two companies that have been set up for the purpose of building the Sewfoundland refinery. St. !lEARY: Mr. Chairl:lall, would the minister tell the House 125?

April 3,1978 . . Tape No. 452 IUl-2 HR. NEARY: if the situation is this,that the goven1mcnt had representatives on the Board of Directors of both of these comp<mies for money being paid out, to make sure the n10ney was paid out,t he creditors were paid but also to protect the Province's investment. Is this correct? MR. lli C!O !At 'I: You are all mixed up, 'Steve.' You are all :nixed up. ~IR. NEARY: I am all mixed up. HR. HICIOIA.'I: Yes. Do you want me to go all over it again? MR. NEARY: Beg your pardon! }IR. HI CIOL\..'1 : And the hon. gentlemm1, you know - MR.

NEARY: What I a:n getting at - let me put the question straight to the ;.:inister. What I am getting at is during this time when the government had represeutatives on Provincial Refinin& there was interest owing to the Province on tl~ $30 million tnat was paid out. Tne minister shakes his head. well,I can tell the minister that there is $17 million interest oweci to the Province, .u~.:; tn:t::; vas owing while the }:Oore 1 s Administration, while the :·loore .' s Administration had two members of their government on the Board of Directors of Provincial Refinery.

One ~entleoan,~y the t;a·./, in case the hon. ~iinister of l·iunici';lal Affairs is not aware, one gentlct nan was lir. Frank D. Hoores. }{r. Frank D. Moores was on tile Board of Directors of Provincial Refinery and still is 7because the company is still listed in the registery office. liR. HICIO!AN: That does not mean he is on the board. HR. NEARY: fir. Chairman, I got the share list only last week from the re~istery office. Mr. F. Duff l·loores, Mr. Frank D. Moores 1s a member of the Board of Directors of Provincial Refinery and t~e other gentleman who is on the Board of Directors of Provincial Kefinery is Mr.

John C. Crosbie. MR. liiCKMAN: Whe~ was their last share list filed? MR. NEARY: }{r. Chairman, }lr. John C. Crosbie 'Was on in his capacity - The company has never been stricken from the registery. 1258

April J, t978 Tape No. 452 JU - 3 MR. IliCK:·L\d: The hon. gentleman is talking about misleading the House. Could t;1~ hon. g~ntlel;lan tell the llouse tl1e date the last SLlare list was filed? HR. NEARY: }!r. Chairman, the ;10n. t;entlcru.an - NR. HICKHA.'·l: Because if he does not I ~ill find out and I will table it in tue House very quickly. MR. NEARY: Mr. Chairman, the han. gentlegan can table it. I can tell the hon. gentleman that the share list of Provincial Refinery has never been stricken from the company's record. It is still registerc<i. HR. HICI:G-iAN: Do not oe cute. Do not be cute.

You are caught now. }fK. NEARY: No, Sir, I am not being cute. HR. HICKJ.·IA...1: Oh yes 1you are. Come on now, tell us? MR. :-:t:AitY: Mr. Chairman, I am just uerely trying to find out. Sir, if the govenwent's investment was protected or not. <\ow, l-lr. Chain;:m, 1 ~uld like to have the ~linister of :1unicipal Affairs, Sir, silenced. If he 'Oants to chew on something, if he vants something in his gob,:1ave hii:1 go out to his own co=on rooc aad do i:: and not ir.sult Your Honour by being over there with his uouth going up and down chetving gom or candy or something in this hon.

House like a cow chewiug its cud, Sir. MR. DINN: A point of order. MR. CHAI&~~: A point of order has been raised. 1-!R. DINN: I am over here reading a document, Nr. Chairman, a pu~lic: document. MR. NEARY: Oh, Mr. Chairman, that is not a point of order. The bon. gentleman cannot even speak, Sir. The hon. gentleman is so discourteous to the Chair with something in his gob all day long. 1259

April 3, 1978 Tape 453 PK- 1 MR. NEARY: I wish the hon. gentleman would get something • sticky enough that would keep his gob closed. SOME RON. ~!EMBERS: Oh, oh! MR. NEARY: Mr. Chairman, we are discussing some very serious matters here, Sir, in connection with the provincial business. So, Mr. Chairman, I can only presume because the company is still registered and the Premier and · the former Minister of Finance is on that Board of Directors, and Mr.

Crosbie was on in his capacity as Minister of Finance, should have been kicked off if the company is still functioning, and the present Minister of Finance or the former minister should have been put on or the present minister put on. Now, Mr. Chairman, it is not really the intertst on the money that I am getting at, although I would like to have an explanation of why no interest was ever paid back, and the total amount now owing to the government is $47 million and not $30 million or not $45 million as the former Minister of Finance has referred to so often saying it is $30 million.

The total owing to the goverP~ent is $47 million because I checked this with the Auditor General during the Easter recess, and I got the

schedule of payout, and I got the

schedule of interest that is owing, when it was owed, and the company is in default. Okay. That is fine, Sir. Be that as it may. But, Mr. Chairman, the most serious thing that I want to get at is before the House rose for Easter I put a few . questions to the Minister of Finance, the Minister of Justice in connection with the $50,000 that was put up by my hen. friend the former Minister of Finance to join with the Japs who I said at the time were the enemies of the Province.

And the Minister of Justice got up and gave me some kind of a wishy-washy statement of how this was done to make sure that the creditors, both secured and non-secured, would receive any payments if the oil refinery was taken over by a new operator. That is basically what the minister said. And I argued with the minister, it was during the Oral Question Period, so l could not do anything except ask a few more supplementary questions of the minister, and I asked the minister if it was so that this was done 12.00

April 3 .. 1978 Tape 453 PK- 2 Hr. Neary: behind the Premier's back, and the Premier got a little red-faced, and he was probably a little redder than he is at the present time, and I happened to see him last night in Haljfax and he is pretty red at the present time, red as a beet after coming back from the South. So the minist~r indicated that this was all proper, there was nothing to worry about. All the government was doin~ 1 the former Minister of Finance,was not on a personal vendetta against Mr.

Shaheen, there was no venom involved in this, it was all done right and properly, and the government of this Province were joining with the Japs,who were the enemies of the Province, joining with the Japs and trying to get an attachment against certain of the Shaheen companies. Is that correct? MR. DOODY: MR. NEARY: MR. DOODY: 1940s. MR. NEARY: That is not correct- we are the enemies ~f the Japs. The Japs are - I thought there was a Peace Treaty signed in the late Mr. Chairman, there may have been a Peace Treaty signed in the late 1940s, Sir, but hon. geut.lemeli should takt Lhings a little more seriously.

It was the Japs that put the oil refinery into bankruptcy. MR. DOODY: MR. NEARY: It was the Japanese (inaudible) $300,000,000. Mr. Chairman, it was the Japs, sir, who put the oil refinery prematurely, aided and abetted by this Government, into bankruptcy. I have a document I am going to read to this honourable House shortly that will explode the Minister's of Justice arguments and the answers that the han. gentleman gave - MR. HICKHAN: That was the letter you read the other day from the lawyer to Mr. - what was his name?- Gough. AN HON. MEMBER: No, those are Carey's chickens. MR. HICKHAN: Carey, right. MR.

NEARY: Mr. Chairman, when the Minister of Jusice mad~ these statements, Sir - and I think it is about time, M~.Chairman, that somebody in this Province learned a little bit about lag. Certainly, the han. gentleman knows nothing about law. 12ti1.

April ,3, ,1978 Tape 453 RT-3 MR. HICKJ.'1AN: No, but I am listening. MR. NEARY: My hon. friend, the Ninister of Transpcration, who wtt;h the Minister of Justice gave the Japs, joined with the Jzps in trying to shaft }!r. Shaheen,when in actual fact what they should have been doing, they should have been trying to recover money and debentures from the Japs 1262

·"-'" April ~. 1978 Tape Uo. 454 Nll - 1 ~. Nf.ARY: that had been paid out in late 1976 I think it was, in 1 75 and '76. I:r. Chairman, ur.der the bo.ni,ruptcy laws in C.:mad:l - is the i:inister of .Justice listening to .,..;.at I am sayir: ..; ? ~lR. HICKHA .. '<: !IR. NE..o\.P..Y: Yes, I am listeninc, carefully. Unde~ the bankruptcy laws of Canada, and the minister should know this, that any transaction that takes place three =nths prior to the bankruptcy has to be made null and void. Is that not correct? Yes, that is right. ~!R.

NEAP,Y: The minister says that is right. h'ell,I will sho;11 the minister three examples of ~:here there 'Were transactions took place, where ~ebentures and money were paid to the Japs in less than three LlDnths before the bankruptcy and nothing was done a~-'out it and the govern:nent did not lift a finger, except the !Unister of Finance paid $50,000 to try to get an attachment against :tr. Shah€en · 1.1h~n they should have been tryine to get their DOney back from the Japs. Hr.

Chairman, I am goir.g to t<>.'>le t:lis letter 1 though I am going to read it for the benefit of the House just to s~~o ·.-1 how the llouse was given misleading information by the t~ister of Finance, and the Minister of Justice. It is addressed to me. "Dear Mr.

Neary, This firm represents John Shaheen personally and those of his companies in the United States ~nich are presently engaged in a litigation concerning the bankruptcy of Newfoundland Refining Company Limited and Provincial Refining Company Limited. ••r have been handed a copy of a portion of the transcript of questions and answers in the House of Assembly in Newfoundland on March 7, 1978 and I find that some of the hon. members of the Assembly are being badly misled as to the tr~e state of the facts, especially with respect to the relationships 12o3

April ?• 1978 Tape No. 454 l'm.. NEA!\.Y: between Att~ka, the unsecurej creditors in Ne1.1foundland, and Clarkson, the trustee in b~nkruptcy. Hr. Neary referred to Attaka as beins the ener.~ies of the Province and he questioned why the )!e•.•foundland Govern'lent NH - 2 was putting up $50,000 and the Japanese $250,000 to take legal action against Hr. Shaheen. "First let me say that the said legal action by Clarkson .::~gains:: Nr.

Shaheen was instituted l.:1st July and already a considerable amount of funds provided by the Province and the Japanese h<J.ve been •,rasted in the preparation of a great book "of exhibits" including accountinz entries going back as far as 1972 in an effort to get an <lttac:•ment ag::~inst the assets of llr.

Shai1een and certain of his co::~pauics. 11 After the wat:ter was thoroug!1ly briefed and argued to the United States District Court in whicl1 tae case is pending, the court held that the ~•e\~ York Attachncnt Statute ~--hich ~~as an:ended effective Septe~l:Jer 1st., l:J77 neither before nor after such amendment provided a st<J.tutory basis f<Jr the attachUJec.t soug!1t by Clarkson. Similarlv Clar::son' s efforts to obtain an attachment ~~der the Fraudulent ConveyGnc~s Act, based upon the statutes of Elizabeth, did not provide a legal basis for the attachment sought.

"In the concluding part of the opinion, the Court '-r-ent on to state -" I will not read that part but I will just go on to say, 1 will go on to the tnOSt pertinent part, "Later, Mr. Rickman, in referring to Clarkson as trustee in bankruptcy stated that the trustee has an absolute obligation to try and Tecover as much money as possible from the bankrupt estate, which money is distributed in keeping with the bankruptcy law.

The trustee in bankruptcy has absolute obligation to make sure that every dollar that he has spent during the operation of the bankrupt company, is accounted for, to see whether or not there are monies due and O'-r~ng to the bankrupt estate, bec:1usc if there are, then ••here it is benefici;1l 1264

April ,3, ,1978 Tape No. 454 NH- 3 UR. NEARY: to all unsecured creditors, in this case both to the Japs at d to the ~kufounulc:.nd co:nf.~u.nies in residence of Newfoundland, is that if money is recovered then it would be after the payraent to the secured creditors dis trilluted to the unsecured creditors on a pro rata basis. ftThese statements in their context clearly show that the Government of the Province has not kept fully informed." Listen to this, Xr. Chain:~an.

A la'.rJcr tlmm in Ne-,; York representing a firm, Sir, of Hanning and Carey, anu Carey is a brother of the Governor of the State of :ie" Yo::k NR. DOODY: ----- Oh,he is demoted. He was the sovernor the last time. HR. NEARY: :~o; he is a brother of the governor. llell, if I said he is the governor I made a mistake. I!R. DOODY: Ch, another little mistake. l1P.. NEA .. 'R.Y: Mr.

Chairman, just listen, "These statements in the:!.r C.O!l.!e:xt clearly she~' ~hat the Gc..,_ .. cr~2r:.t of t!l.C !':-ovince have not been kept fully informed as to what has happened, both prior to and subsequent to the filing by Attaka of the petition for bankruptcy of ~ewfoundland Refining and Provincial Refinin£ on February 13th., 1976." And just lis ten to this. UR. DOODY: I have another letter from Jimmy Carter, he is the President. MR. NEARY: Mr. Chairman, just lis ten to this • "Under

section 73 -" 1265

April 3, 1 97R Tape 455 EC - 1 'P-"'r.. ~·~[N'Y: Tloes the hon. f"entleran think th.1S is funny? t·!ell, just "ait =til I am finis...,cd. listening to you. ~m.. '<EAF.Y : I am finished, net tired. Ah, mv son, I ~n sic~ an~ tire~ ~r The hon. gentleman wil~ be sick hcfnre 11 Under

Section 73 of the Cana<'!ian ~ankruptcy Act all pa~ents rafe to, every obligation incurred by an~ every charge made upon the property of ari insolvent person within t~ree months of the ha ..... lcruptcy if' favour of any creditor -witl, a vie•.; to giving such crecUtor a preference over the other creditors is !'cere" void as ap,ainst the trustee anrl where suc'1 p:>.yment, o'>lir,ation or c;,,.r_;:e has the effect of riving any cre~itor a preference over other cr.e<iitors it is presumed primn facie, to have been ~ade with a view to givin~ such creditor a preference over other crer,itors. \~ile it is not cl~~r frol'! the :!3ankruptcy .Act ·~"ether t'lree =:~r:ths '~. :-:t;; fro:" ~he filin;:: cf the petition or the date of t~e issu~nce of the receiving order, I sh~lt assu~e for the purposes of this discussion t~at it is the latter date~• And then the letter goes on, Sir, to prove that on recem~er 1?., 1975, for instance.

Ataka forced ~me to pay $21, 7')1) ,0'10 to Ataka for past debts and on December 12, 1975 Ataka a-:~.d Sumitomc Bank caused PRr to pay $500,000 to Sanco which was not even owed to Sanco, and then on December 15th Ataka again caused $25 million in debentures to he paid over to Ataka and on ~ece~her 15th Ataka and the bank caused PRr. to get another $500,000 again to !':an co which was not even o~1ed. Anrl so, Hr. Chairman - I may not have time to finish this letter because I only have one minute left - l am going to table it.

I will listen to the minister's reply and I want tc come back and finish the letter.- MR.. RICKtWT: No, finish it. r.P... !-TFARY: Well, if the minister is satisfied 'l: vill just - 12o6

April 3, l'l7fl EC - 2 it can be seen that at least $21 million of t~c funds of Provincial Refining ~oc.pany and :·e~.rfotmdland Refining rol'".!Janv uere pnic1 to Atal:a or its associates, the Su:U.tomo ~ani·. nptl Snnco - Hit. DOODY: ~:r:. !:rN'.Y: Th~t is a coffee. $31 million''- Tl:e hon. e~ntler.mn thinks this is fn;my Rnc, ~- !r. r:hairnan, this is fiiludulent, this is a br2ach of t''C! Jn~o.•. The Attorney General and the "inister of Justice and the .. ir.ister of Finance should have taken action, •·rhich t~.ey !!ave not cione, on beh!!J. f of the Prov~. nce. -"~eainst ·-:ho~? Ar;ainst the J.:>ps.

Just a seconrl 1".0•.:. Sir, ! am conin~ to t~. at. Let re go ha::' ·:. Let !:',f.: s t -1.-ct that nar<'-&ra "':: ap;ain. You stooped at $31 rillinn. ~tar.t nt S31 nillion again. ~!R. c-;r.\JW: "From the foregoing it can be seen t\at at least $29 million of the funds of PP.C and tTRC were paid to AtaV.a or 1~s associates, the Sumitomo Bank and Sanco and charges amounting to over $31 ~~llion were placed on PRC assets an~ later realized upon in whole or in part, all of Which were pxeferences in favour of Ataka et al over other unsecured creditors and all of ~ich are prt~~ faci~ voi~ under the Bankruptcy Act,

Section 73 as against a trustee in bankruptcy." Now that is indefensible, Sir. MR. RIC!C'f.A.~: Will you table the letter? MR. NF.ARY: Yes, I m:1 going to table the letter, Sir . In the face of this, ~fr. Chairman,uClarkson, so far as we are aware," so the letter says, 11 has taken no action lolhatsoever to ohtain the return That is not true. 12o7

Aptil 3, 19 7-8 fC - ~ ~~. '!'!'. r.Y: It is true, Sir - "to tl:( u.'1secu~c' cre di tors , as :•r. t{ic 1<r:lan indicated t!1e truStee ~ar. t he J u ty to c:o ." :•r. C!l;'lirr.an, mab~ su re a! 1 th e !:.on. mcn~crs u::t tl erstmu~ ~ --·lat ! a~ saying here. "In t!le face of t his;• so tills lat·.')·e r is sr. ;tin one of the mosc