March 20,

1997 HOUSE OF ASSEMBLY

PROCEEDINGS

Vol. XLIII No. 6

The House met at 2:00 p.m.

SERGEANT-AT-ARMS: All rise.

MR. SPEAKER (Snow): Order, please!

The hon. the Minister of Finance.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Mr. Speaker, I move that this House resolve

itself into a Committee of the Whole on Ways and Means and that the Speaker do

now leave the Chair.

MR. SPEAKER: The motion is that the House resolve itself

into a Committee of the Whole on Ways and Means and that I do now leave the

Chair.

The hon. the Minister of Finance.

MR. DICKS: Mr. Speaker, today the government presents its

second Budget. It is a Budget of firsts for this Province. It is the first time

government will set out a three-year financial plan. It is the first time

government has consulted comprehensively with its employees to improve services

and save taxpayers' money. It is the first time government has so clearly set

priorities for our Province's future.

This Budget is about choices: where to achieve savings and

where to make investments. It is about establishing priorities. It is about

consultation with the people of the Province. It is about making choices. We

have listened, we have considered, and today we are acting.

We are acting in a way that is both fiscally and socially

responsible. We cannot continue borrowing and adding to the public debt. On the

other hand, we cannot balance the books with ill-considered cuts that threaten

health care, education and social safety nets. While we have identified savings,

we have also identified necessary new investments.

While we must move to reduce and eliminate the deficit, we

must re-invest part of our savings in the highest priorities - health care,

education, helping those most in need, and revitalising our economy.

Mr. Speaker, the winding down of Hibernia construction and

the continued closure of the groundfishery caused declines in real gross

domestic product, employment and personal income in 1996. However, these

declines were less than anticipated. For example, real GDP declined by 2.1 per

cent, compared to a forecast decline of 4.3 per cent.

There are reasons for this improved economic performance. New

home construction increased 18.8 per cent. The volume of newsprint shipments

remained high. Fish landings grew by about 30 per cent. The value of seafood

exports rose by about 5 per cent. Mineral shipments increased 6.1 per cent and

mineral exploration reached a record $91 million. Two new gold mines and a

gypsum mine began production. The manufacturing sector grew for the fourth

consecutive year to $1.6 billion.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: The Province's economy is expected to decline

in 1997, and then begin to grow. Petroleum and mining will lead the way.

Hibernia will start production this year. The Terra Nova and White Rose oil

projects, the Voisey's Bay mine, mill, smelter and refinery, and the oil

transshipment terminal at Whiffen Head are all proceeding.

Mineral output will increase, particularly in iron ore and

gold. We are starting to recover from the fishery crisis. Aquaculture will grow.

Diversification in the fishery will continue. Landings are expected to increase,

particularly shrimp, crab and capelin. The groundfishery will recover slowly.

Newsprint exports are forecast to rise. Advanced technologies - such as marine

communications - will spur further growth in new industries. The Cabot 500

Celebrations will increase the number of non-resident tourists by at least 20

percent. There are 40,000 visitors booked for conventions in St. John's alone,

compared with 15,000 on average in past years. This is an increase of more than

250 percent.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Our Province's prospects are good for 1998 and

beyond. Yet, the financial situation remains difficult. We are forecasting

declines in economic indicators in 1997, including a decline in real GDP of

about 2.7 percent. Real personal income will fall by 2.9 percent, partly because

of the reductions in TAGS payments.

In light of this, and reduced federal transfers, Government

must make choices. Our public debt is high. Our ability to borrow responsibly is

limited. We must achieve savings while maintaining vital public services. We

must live within our means.

Mr. Speaker, last May, we set a deficit target of $44.8

million. Indeed, Mr. Speaker, the deficit is less than predicted, and will now

come in at $29.2 million.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Other than 1995-'96, which benefited from

one-time revenues, this is the lowest deficit since 1965-'66. It his is the best

fiscal performance our Province has achieved in thirty years.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Firm expenditure control and some favourable

fiscal developments contributed to this improvement in our fiscal position for

1996-'97. Firm expenditure control reduced spending by $40 million.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Personal and corporate income taxes increased

$47.5 million.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Lower interest costs and better currency

exchange rates resulted in a $16 million saving. Federal transfer payments

increased by $27.7 million.

Mr. Speaker, we have used these improvements in the fiscal

situation this year wisely. We have used this money to pay down debt, and to

make needed investments, particularly in health care and education. These will

be detailed in the course of the Speech. None of this, however, alleviates the

necessity to achieve significant savings in the next three years to maintain

fiscal viability.

Mr. Speaker, we will build on this year's success. We are

committed both to achieving a balanced budget that can be sustained year after

year, and to maintaining health, education and other social priorities.

In order to achieve these goals, government conducted a

critical evaluation of all public sector activities. This was done through

Program Review, announced in last year's Budget. Program Review applied three

tests to all government activities: 1) Does the program fulfil a public

interest? 2) Is it efficient? 3) Is it affordable?

These tests were applied not only to government programs but

also to more than 200 external bodies and agencies in which government is

involved. In last year's Budget we announced the elimination of over twenty of

these agencies. This year, following Program Review, an additional twenty such

agencies will be eliminated, merged, or called on to realise major efficiencies.

Mr. Speaker, Program Review was the means to involve public

servants in all departments and agencies in a critical re-examination of what

government does and how it spends public money. It was the means to renew the

structure and operations of government to reflect our priorities. It was a

searching internal consultation on the role and function of government.

Mr. Speaker, government also sought input from people

throughout our Province. The Pre-Budget Consultation paper laid out the deficit

forecast for the next three years. It pointed toward areas where savings could

be achieved. The facts were clear: if we did not act decisively now, in this

Budget, hundreds of millions of dollars would be added to the Province's debt

over the next three years.

In the Pre-Budget Consultation, the public told us: Don't

raise taxes. They told us: health care, education and helping the most needy are

our top priorities. But, Mr. Speaker, one thing was made clear to me everywhere

that I went: It is time to end the cycle of deficits and debt. It is time to end

the uncertainty. In the 1997-'98 Budget, we are doing all of these things.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Today, government is putting forward a

three-year plan to achieve a balanced Budget. The deficit will be reduced to $20

million in 1997-1998, $10 million in 1998-1999, and we will achieve a

sustainable balanced Budget in 1999-2000.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: This represents new borrowings over three

years - if indeed these borrowings are necessary - of up to $30 million. These

low levels of borrowing have not been seen since the early 1950s. By contrast,

governments borrowed on average $137 million a year in the 1970s and $208

million a year in the 1980s to finance deficits. Mr. Speaker, our plan calls for

deficits to be reduced, and then to be eliminated.

Savings from Program Review are central to this. These

savings will be $65 million in 1997-98, $120 million in 1998-99 and $170 million

in 1999-2000, totalling $355 million over the next three years. This includes

increases to various fees and licenses and other measures to recover the costs

of providing certain services. These will generate an average of about $17

million a year over the next three years.

Mr. Speaker, let us be clear. While we are making important

new investments, such as for children and youth, the savings to be achieved are

even greater. The size of these savings means profound changes for Government.

The Departments of Industry, Trade and Technology; Mines and Energy; Finance;

Executive Council; Treasury Board; Forest Resources and Agrifoods; and Fisheries

and Aquaculture are some of the departments that have been asked to focus on key

goals and greatly streamline their operations. In other areas like Social

Services, there will be modest savings, and in Health there will be small

increases. Overall, Government is making deep cuts in certain areas so we can

maintain vital services, achieve needed savings, and make re-investments in

social programs.

None of this is painless. All of it creates a smaller

government and a more focused Government. But the choices set out in this Budget

are the right choices to meet the needs of the people of this Province. They

bring Government to a size and shape that we can afford. They allow us to

maintain vital public services in priority areas, especially social programs.

The materials that accompany this Budget set forth three-year

Budget figures for each Department. They set targets within which Ministers and

public service managers will plan and deliver Government services. Some

adjustments may occur from year to year in light of changing circumstances.

However, the overall integrity of our Budget plan will be maintained.

Mr. Speaker, we must stop adding to the public debt. We must

also deal with the problems caused by the debt accumulated since Confederation.

The Province's total debt - including direct obligations, guaranteed Crown

corporation and municipal debt, as well as the unfunded liabilities in public

sector pension plans - amounts to $9 billion. That works out to be $15,800 for

every man, woman and child in this Province. Interest payments on our direct

debt alone amount to $500 million annually. That is $900 each for every man,

woman and child in the Province. Debt interest is the third largest expenditure

in our Budget after health care and education.

Mr. Speaker, government must take steps now to address

unfunded liabilities in our public service pension plans. These liabilities

total $2.7 billion. If corrective action is not taken, government will not be

able to pay the future pensions of public employees, or those already retired.

We cannot postpone dealing with this problem.

Government pension funding was first established in 1980.

Government accepts its share of the responsibility for unfunded pension

liabilities. Government will repay every cent it owes to the pension fund, plus

interest.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Our three year plan makes provision for

payment of $196 million in 1997-98, $113 million in 1998-99, and $123 million in

1999-2000. Similar payments will continue until government's obligation is

fulfilled.

But, these payments alone will not solve the problem. Public

employees must accept their fair share of the responsibility for unfunded

pension liabilities. We will work with public employees towards a consensus on a

fair solution.

Teachers have a separate pension plan. That fund will be

exhausted by 2004. That is only seven years from now. Recently, we reached an

agreement with the Newfoundland and Labrador Teachers' Association on measures

to deal with the unfunded liability of $1.2 billion in the Teachers' Pension

Fund. There is an additional $200 million in liability in the early retirement

fund of teachers. This agreement cannot work unless both the government and

teachers make significant commitments. The agreement, negotiated in good faith,

represents a fair and equitable solution to a difficult problem for both

government and teachers.

I repeat again, Mr. Speaker, if the Teachers' Pension Plan is

not addressed now, over $200 million will be required annually within the next

decade simply to make payments to retirees. Mr. Speaker, it is difficult to

believe that, in the absence of a solution, that kind of money will be found.

Neither government nor teachers can afford to wait much longer for an answer.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Mr. Speaker, for the first time in some years,

last year's Budget did not include reductions in the wages and benefits of

public employees. Mr. Speaker, neither will this year's Budget. We will deal

with wage and benefit issues in the normal process of collective bargaining with

our employees.

As well, Mr. Speaker, we will also honour our commitment to

pay equity in the public service by continuing to increase wage rates for

female-dominated jobs. The total cost of meeting this commitment in 1997-98 will

be $27 million.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: However, Mr. Speaker, if we do not reduce the

size of the public servants' wage packages, then we must reduce the size of the

public service. The additional measures announced in this Budget will eliminate

up to 1,100 full time equivalent positions over the next three years. This

represents a four percent reduction in public sector positions. This is in

addition to other reductions already underway, such as those from health care

restructuring, education reform and declining student enrolments.

However, approximately 1,000 public service employees and

another 1,000 teachers will be eligible to retire over the next three years.

This will reduce the number of lay-offs of both public servants and teachers. To

assist employees leaving the public service, $2 million per year will be

provided through a Labour Force Adjustment Fund. As well, $10 million has been

provided for a Voluntary Departure Program this year. These programs will reduce

the number of lay-offs, especially of younger employees.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Mr. Speaker, let us emphasize something: in

the past, deficit efforts have led to large-scale lay-offs each spring and often

each fall. This is coming to an end. When the fiscal plan set out in this Budget

is implemented, the Province will have achieved a balanced Budget. When that is

done, large-scale lay-offs to battle the deficit will no longer be needed. At

that time, public servants who perform their jobs well can have renewed

confidence those jobs will continue to be there for them.

Mr. Speaker, the harmonization of the provincial and federal

sales tax systems will reduce taxes by more than $100 million a year. This will

lead to increased economic growth and employment, as well as lower consumer

prices. One of the best contributions Government can make to the economy is to

leave more money in the pockets of taxpayers. With the new HST, sales tax will

fall from nearly 20 percent to 15 percent on most purchases. 1997 will mark the

biggest tax cut for Newfoundlanders and Labradorians in our history.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Families at all income levels will pay less

tax as a result of harmonization. However, larger portions of poorer families'

incomes go for fundamentals such as heat and light. Government is prepared to do

more to ensure that those most in need are helped.

Mr. Speaker, we are announcing today a new $7.6 million

provincial sales tax credit of $40 per adult and $60 per child, which will be

paid in addition to the existing federal GST credit. For a family of two adults

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: - and two children, the combined credit will

rise by $200 to $808 annually. This is money that will directly benefit those

who need it most, especially the working poor and those receiving social

assistance, and will in fact, extend to 140,000 individuals in this Province.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Government is also sensitive to the

implications of tax harmonization for the people of Labrador. We are therefore

announcing that we will continue to provide sales tax relief on building

materials purchased for residential construction in the Labrador portion of our

Province.

Mr. Speaker, health care is our first priority. Last year,

government promised stable funding for health care for three years. We are

extending that commitment another year, to 1999-2000. We are also providing

additional funding for selected priority needs.

We will build a new hospital in Harbour Breton, at a cost of

$7.8 million.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: We are coming to that.

Planning and development will take place this year;

construction will follow next year.

The $30 million Lake Melville Hospital in Happy Valley-Goose

Bay will proceed this year.

SOME HON. MEMBERS: Hear, hear!

Preliminary planning will be undertaken for health care

facilities in Bonne Bay and in Stephenville.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: This is in conjunction with the Western Region

health care needs assessment which will commence shortly.

Construction will begin this year on the new Janeway Child

Health Care Centre at the Health Sciences Centre site. Major renovations will

also be carried out to St. Clare's Hospital. This represents a $100 million

investment in health care for the Province in these facilities alone over the

next three years.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Government will move immediately to re-design

the James Paton Memorial Hospital in Gander, as recommended in the Central

Newfoundland Health Services Review. Government is committed to shelling-in the

extension this year and proceeding with the next phase of construction to the

hospital.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: New funding will be provided for a renal

dialysis service at the Central Newfoundland Regional Health Care Centre in

Grand Falls-Windsor.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: In recognition of the 10th anniversary of the

"Man in Motion" world tour, we are contributing $500,000 to the Rick Hansen fund

to establish a neurotrauma - spinal cord and head injury - research fund for the

benefit of the people of our Province.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: The Department of Health has budgeted $4.5

million this year and next for the purchase of hospital equipment. Mr. Speaker,

we are announcing today that, in light of this year's improved financial

performance, an additional $2.5 million has been allocated for the purchase of

hospital equipment for 1997-98.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Health care foundations will be encouraged to

seek private sector contributions to match this special one-time payment.

Mr. Speaker, it is time to deal with the shortage of

physicians in rural areas. This is a serious concern. Today, government is

taking a number of steps to address this. Mr. Speaker, we are today announcing

today a $2.6 million increase in salaries for our rural physicians.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: This will increase the pay scale of rural

physicians in Newfoundland and Labrador so that it is competitive with those

elsewhere in Canada. This measure, in addition to a bonus program, is central to

our efforts to provide quality health care to rural areas of our Province. We

must have equity in health care, Mr. Speaker.

Mr. Speaker, Program Review savings have made possible these

strategic health care investments in modern hospital facilities, new hospital

equipment, and rural physicians' salaries throughout our Province.

After health care, education is our next priority and our

largest expenditure. It accounts for about one dollar of each five that we

spend. In 1996, significant structural changes were made to the Province's

education system. The number of school boards was reduced from twenty-seven to

ten. The Provincial Colleges were consolidated from five to one. Streamlining

administration allows us to realize savings that can be redirected to where it

counts - the classroom.

Current funding will be maintained for the Provincial College

in 1997-98. The College will be called upon to identify further efficiencies in

the following two years.

The ten new School Boards have a new mandate, operating under

new legislation. But they are burdened with old debts. The Boards take up a new

task bearing an old burden. Government will support the new Boards in their

challenge to implement educational reform. We will lift the burden of old debt

from these new Boards.

Mr. Speaker, we are announcing today that government will

retire all existing School Board debt, at a cost of $24 million.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: In future, the Boards will not be permitted to

borrow without government approval. The School Boards of this Province will get

a fresh start, free of debt, free of interest costs. This is another one of the

investments we are able to make because of our improved financial performance

this year.

School Boards' administrative grants will be reduced in line

with amalgamation and declining student enrolments. However, operating grants

for the schools themselves will be maintained at the 1996-97 level for each of

the next three years.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: In each of the last two years, we have

budgeted $4 million annually for new schools and school maintenance. Mr.

Speaker, this was too little, but it was all we could afford in advance of

Program Review. It was not enough to build new schools where enrolments were

increasing and buildings needed replacement, as in certain communities in

Labrador. Nor was it enough to renovate schools where there were consolidations.

Nor was it enough to fix problems with roofs, heating, and ventilation systems.

That is why, Mr. Speaker, we are today announcing a total of

$38 million for new schools and school maintenance.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: There will be $14.2 million in 1997-98 and

$23.8 million in the next two years. This $38 million is more than double what

was spent in the last three years.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Of this, $10 million will be used to build new

schools in Nain, Rigolet and Hopedale.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: The balance will be used for needed

maintenance and renovations to accommodate school consolidations.

Mr. Speaker, every Newfoundlander and Labradorian is

justifiably proud that we are the first province in Canada to have connected all

our schools to the Internet. This is a goal U.S. President Bill Clinton has set

for all American school systems by the year 2000. But Newfoundland and Labrador

is already there.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Mr. Speaker, we must now press ahead, maintain

our advantage and give our children more opportunities to learn, to compete, and

to win in a competitive global economy.

Mr. Speaker, we are announcing today that government will

provide an additional $2.5 million this year for School Boards to purchase new

computer hardware and software.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: We call upon the public and the business

community to match this commitment to the future of our youth so that we can

make a total investment of $5 million to provide computers for our children.

Mr. Speaker, because the number of students in kindergarten

to grade 12 is declining, and as a result the number of teachers will also

decline, the time has come to ask ourselves if we can afford to maintain a

pupil-teacher ratio that is better than British Columbia's, Alberta's and

Ontario's, the three richest provinces in Canada. Should we move to the national

average? If we did we would still have the best student-teacher ratio in the

Atlantic Provinces. This issue, and others, will be discussed with our major

educational partners.

Last year, government made a three-year funding commitment to

Memorial University. Funding for the fourth year in 1999-2000 will be discussed

with the university. Memorial University has also launched the MUN Opportunity

Fund, with a goal of raising $25 million from the private sector. Government has

committed to matching private sector donations dollar-for-dollar, to total $50

million for the university. So far $6.3 million has been raised from the private

sector. We congratulate Memorial University and thank their private-sector

contributors. Mr. Speaker, we are announcing today that government will honour

its commitment using savings we have achieved from this year's improved

financial performance. We will match the full amount of $6.3 million.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: This will allow the university to proceed in

the days ahead with new capital projects.

Mr. Speaker, one year ago we promised to review this

Province's social services policies, and develop a comprehensive plan that would

take bold new measures to solve old problems. Since then, we consulted

internally, through the Program Review process, with those involved with the

delivery of social programs. Next, we consulted widely with the public through

the Social Policy Advisory Committee, whose interim report we received last

fall, and whose final report we received last week. We followed the committee's

hearings closely. We agree with the public assessment - the status quo is no

longer acceptable.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Mr. Speaker, for too long we have contributed

to a cycle of dependency. For too long we have seen people who want to work get

caught in the welfare trap. It is time for bold measures. It is time we allowed

people to gain new skills and find meaningful work. It is time for a new

partnership with the Federal Government in service delivery and retraining. It

is time for change.

Today, the government is announcing that, on April 1, 1997, a

new Department of Human Resources and Employment will replace the existing

Department of Social Services.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Programs of the Department of Social Services

will be combined with the employment programs now administered by the Department

of Development and Rural Renewal. The new Minister of Human Resources and

Employment, the Honourable Joan Marie Aylward

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: - will provide further explanation today and

in the days ahead on this first phase of reform.

The second phase will take place on April 1, 1998, one year

later, when community services - such as home support - will be transferred from

the Department of Human Resources and Employment to an enlarged Department of

Health and Community Services.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: These programs will be delivered through

Regional Community Health Boards which will be mandated to deliver co-ordinated,

multidisciplinary services focused on prevention and early intervention. This

year will be used to plan a smooth transition. In the meantime, we will protect

front-line service delivery to the public. Accordingly, there will be no staff

reductions or office closures in 1997-98 as a result of this restructuring.

Mr. Speaker, Government is very concerned with growing

numbers of youth who are becoming dependent on social assistance, even though

their parents are not themselves receiving assistance. Therefore, effective

April 1, 1997 young, single, able-bodied clients who are living with relatives

and are between the ages of 18 and 21 will have their parents' resources taken

into account in determining their eligibility for social assistance.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: In keeping with its commitment to provide for

the fullest possible community living for persons with developmental

disabilities, Government will continue with its efforts to downsize and close

group homes with a view to further integration into the community. This

initiative is consistent with current policy direction and will be achieved

through the use of more appropriate and less restrictive residential

environments such as Co-operative Apartments and Alternative Family Homes.

This Government places great value on services provided to

seniors and persons with disabilities in this Province. We acknowledge the

critical role of home care workers in assisting both seniors and disabled

persons who remain in their own homes. Mr. Speaker, Government is announcing

today an additional $4 million to increase salaries for home care workers and

will also provide them with worker's compensation coverage.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: At present, these workers have no coverage for

injuries sustained on the job. We will now pay for that coverage. This

initiative also removes a potential burden from home care clients who could be

held personally liable by the courts for injuries suffered by home care workers.

We are placing special emphasis on re-investing savings for

those most in need, especially children and youth. $200,000 will be provided for

a day care subsidy for social assistance recipients, particularly single

parents. This will help meet children's developmental needs and permit parents

to pursue employment or training.

The Province is participating in the design of a new National

Child Benefit program with the Federal Government and other provinces. This will

assist low income families with children in the transition from social

assistance to employment thereby reducing child poverty.

$70,000 will be provided to develop a program for foster

parents training. A new $175,000 initiative will eliminate long waiting lists

for post-adoption services.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: In addition to these measures, I am pleased to

announce two other significant initiatives for students. Both provide

opportunities for students to earn money to pursue post-secondary education.

Today, we are announcing that $2.5 million will be provided

for a student summer employment program in this Cabot 500 year.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Mr. Speaker, in addition to this, we have just

received confirmation that the Federal Government will partner with us in this

new initiative by providing an additional $2 million, for a total program of

$4.5 million.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: These public funds will lever substantial new

investments from the private sector. In all, this will provide summer employment

for 3,000 students.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: In dealing with this issue, we benefited from

the advice of students, in particular through the Council of the Students Union

at MUN and Sir Wilfred Grenfell College.

As well, Mr. Speaker, I am pleased to announce that a new

"Tutoring for Tuition" program to assist students in low income families will be

introduced with funding of $500,000. This program will enable high school

students to earn money to attend post-secondary institutions by providing

tutoring to students of low income families. This represents a valuable

re-investment in our youth.

Mr. Speaker, Government recognizes that single parents and

two parent families who have children are often unable to access sufficient

funding through the Canada-Newfoundland Student Loan Program to be able to

afford to pursue post-secondary education. Therefore, Government remains

committed to provide additional resources to these students to support their

education. Nevertheless, we must also address continued fiscal pressures. In

this context, we are announcing today that effective this September, students

with dependents will be required to access the maximum available student loan.

Social assistance will be available as a supplement where living requirements

exceed the living allowance provided under student aid. Under this initiative,

students will not experience a reduction in the total available funds to pursue

their education, but a higher proportion will be available in the form of loans.

Decent affordable housing remains a key factor in the overall

health and stability of families. It is particularly important for proper chid

development. Newfoundland and Labrador Housing Corporation will focus on its

core responsibility of ensuring adequate and affordable social housing. This

remains a strong commitment of this Government.

The Federal Government is vacating the area of social

housing. That is why we are negotiating the transfer of federal housing in the

Province from Canada Mortgage and Housing Corporation to the Newfoundland and

Labrador Housing Corporation. As part of that transfer, there will continue to

be some financial assistance from the Federal Government. This devolution of

social housing responsibility affords the Province the opportunity to achieve

more efficient operation of public housing. We will take various steps towards

this end, wherever we can, in partnership with the private sector.

Mr. Speaker, social housing in Newfoundland and Labrador will

move to a rent geared to income scale in line with other provinces. Currently,

all tenants pay rent based on 25 per cent of household income. The new scale

will range from 25 to 30 per cent depending on income and household composition.

The new scale will be sensitive to tenants with the lowest incomes.

The Government will limit its role in land development,

continuing to divest of market rental housing and move to greater partnering

with the private sector. The Corporation will refocus on highly efficient

delivery of social housing to those who need it.

Mr. Speaker, local services should be directed and delivered

by local governments. Decisions must be made closest to where people actually

live.

For example, School Boards have been given broad authority

over their finances and greater capacity to establish local priorities in the

expenditure of education dollars. Regional institutional and community health

care boards reflect local needs in the provision of health services. We have

strengthened the role of local representatives in economic development through

the new Regional Economic Development Boards in each of the twenty economic

zones. We will continue to give greater autonomy to communities and regions for

health care, education, economic development, and the provision of local

services. We need to work with municipal governments to ensure that they can

provide local services more effectively.

Municipalities must become more self-reliant. The Province

will work with municipal leaders toward this goal. There are differences among

municipalities. Some have the revenue base to support adequate local services.

Others do not. Government will therefore provide $9 million this year to the

Newfoundland Municipal Financing Corporation. This money will be used by

selected municipalities to restructure their debt, while assuming more

responsibility for local services.

There will be no reductions in municipal operating grants

this calendar year. However, commencing January 1, 1998, the municipal operating

grants are being reduced by 20 per cent in each of the next three years.

The present cost sharing structure of 65 per cent provincial

versus 35 per cent municipal does not reflect the appropriate level of municipal

responsibility for services. The municipal share of debt servicing costs for

municipal water and sewer debt will be increased from its present level of $343

per household to $400 in 1998 and by a further $50 per household in each of the

next two years to $500 per household by the year 2000.

Mr. Speaker, a one-time payment of $4 million before the end

of the 1996-97 fiscal year, will be shared by St. John's and Corner Brook as

transitional funding for the elimination of firefighting grants. In addition, we

have set aside $5 million to assist in the construction of a new civic centre

for the St. John's area.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Mr. Speaker, government is committed to a

strategic partnership with the Federal Government and the municipalities of St.

John's, Mount Pearl, and Paradise toward the first phase of the St. John's

Harbour Clean-Up. We applaud the municipalities for their leadership and join

with them in funding our one-third share of $1.5 million to the proposed $4.5

million harbour clean-up this year. We call upon the Federal Government to

commit assistance so that Phase 1 can begin without delay.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: The Province and the Federal Government have

agreed to a one year extension of the Infrastructure Works Program which will

result in the spending of $30 million on municipal and other infrastructure in

1997-98. This is in addition to the $25 million allocated for our regular

municipal capital works program.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Finally, in line with a long-standing request

of the Federation of Municipalities, municipal assessment services will become a

new agency run by a board composed of municipalities and the Province.

Mr. Speaker, the Province will also continue to be policed by

the Royal Newfoundland Constabulary and the Royal Canadian Mounted Police.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: We will not institute changes to the existing

jurisdictional arrangements for this year. However, we will ask both forces to

find efficiencies and achieve savings in their budgets.

In these challenging times, it is essential that we create

opportunities for economic growth and new jobs.

Government remains fully committed to working with the

Regional Economic Development Boards in the twenty economic zones. This will

reinforce local decision-making for economic development. We are negotiating

with the Federal Government to establish single window business support offices

within each zone.

Government will combine its efforts with its local and

federal partners to ensure that less money is wasted on red tape and

duplication, and more money is spent on support services to entrepreneurs and

small businesses.

Under the Federal-Provincial Strategic Regional

Diversification Agreement, we will support development activities in the zones

and will utilize zone plans in allocating development support. We will support

every viable opportunity to generate growth and create new jobs in our rural

communities. We will do this because the need is great, and the prosperity of

our rural areas is essential to the future of our Province.

We will foster growth in our Province through the $17 million

Strategic Enterprise Development Fund; this will target growing sectors for

which conventional financing is not available and will also support external

investment prospecting activities for the Province.

We are negotiating a new five-year comprehensive development

agreement with the Federal Government that will be worth over $50 million.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Expenditures will focus in strategic areas in

the export trade, advanced technologies, and rural development. This is in

addition to the existing $100 million Economic Renewal Agreement, which

concentrates on aquaculture, tourism, and information technology.

Another example of partnering for development is the new

Newfoundland and Labrador Film Development Corporation. This will involve

expenditures of $1 million over the next five years. Government will work with

the Corporation, and our partners in the public and private sectors to create

new opportunities for the film industry of our Province.

We have been challenged to make choices in this Budget. In

making these choices, we have carefully examined those commercial businesses

that government subsidizes. We will take steps to phase out these subsidies in

an orderly manner. Accordingly, government will dispose of its interest in

Newfoundland Farm Products Corporation. The new Board of Directors has been

instructed to proceed as soon as possible with the sale of the Corporation. The

taxpayers' subsidy to the Corporation, as well as those to the Province's

chicken producers, will be phased out.

Mr. Speaker, where and when appropriate, government remains

willing to consider public-private partnering and privatization options for the

Bull Arm site, the Marystown Shipyard and Marble Mountain.

The Province's transportation system is vital to the economic

and social development of the Province. To this end, Government will be spending

$77 million on highway construction in 1997-98, an increase of $12.2 million

from 1996-97.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Transportation in Labrador offers unique

challenges and opportunities for future development. We have proposed a Labrador

Transportation Initiative to the Federal Government. Under this plan, the

Province will take over Marine Atlantic's Coastal Labrador Service and the Trans

Labrador Highway will be completed. We await a reply to its proposal to the

Federal Government.

The Department of Works, Services and Transportation will

pursue alternative delivery systems for its services. The Department will

identify opportunities to work with the private sector, municipalities,

community agencies and employee groups to improve services and achieve savings.

Our Province is entering a new period of growth and

prosperity fuelled by our resources, notably petroleum and minerals. To gain our

full and fair share of these benefits, we must have effective management

structures and appropriate fiscal regimes. This is especially true for major

projects, such as Hibernia, Terra Nova, White Rose and Voisey's Bay.

Last year, we put in place a generic royalty regime for

petroleum projects. This year we will reform our mining tax system. Great care

is being taken in developing these proposals since they will have major

implications for the economy and the people of our Province in the coming

decades.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Mr. Speaker, today we are making choices. This

Budget has forced us to take a long and careful look at where we spend our

money. The Estimates indicate significant savings in some areas and investments

in others. Detailed press releases and backgrounders have been prepared by each

department.

Government is challenging the status quo. In years past, we

did not have sufficient funds for pay equity in the public service, salary

increases for rural doctors, a clean-up of the St. John's Harbour, or new

computers for our schools. Mr. Speaker, we did not have these things because we

could not afford them. We could not afford them because we were unwilling to

make difficult choices. These choices have been made. We are announcing our

priorities today. And we are reshaping government to fit those priorities.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: The people of our Province have exercised

discipline and restraint. Their government should do no less. We do not rely on

increasing deficits. We are moving to eliminate them. We are not increasing

personal or corporate taxes. And, Mr. Speaker, while we now have the doubtful

distinction of being the highest retail sales tax jurisdiction in Canada, that

doubtful distinction finally comes to an end on April 1, 1997.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: We will break the cycle of dependency,

deficits, and debt. The years of borrowing the most and taxing the most have not

helped. They have hurt us deeply. Those days are over.

In the foreseeable future, we are moving toward a permanent

end to deficits. We are moving to a point where we can ask ourselves whether,

four years from now or sooner, we should pay down our debt, make new investments

for better services or lower our taxes. These are the choices this government

wants the people of our Province to face. They are the kinds of choices our

people will have before them at the completion of the three-year plan set out in

this Budget. We will ask the people of Newfoundland and Labrador to give us

their answers, to tell us their choices.

Mr. Speaker, I repeat: We are challenging the status quo.

Together, we will work for growth and job creation, especially in rural areas.

We will guard the integrity of our treasured social programs. We remain prudent

in our spending, progressive in our thinking.

We are witnessing today the re-awakening of a spirit of

entrepreneurship, ingenuity and confidence that is fundamental to the character

of the people of Newfoundland and Labrador. The Cabot Year is less about

celebrating the past and more about shaping the future that we know can be ours.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Mr. Speaker, today the Government of

Newfoundland and Labrador has put a plan for partnership to the people of our

Province. It is a measured plan designed to bring a prosperous and confident

Newfoundland and Labrador into the next millennium.

Mr. Speaker, may I say: In the spirit of John Cabot:

Our course has been charted, our sail has been fastened. Let

an exciting new journey begin.

SOME HON. MEMBERS: Hear, hear!

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

MR. DICKS: Mr. Speaker, I move that the debate be

adjourned until tomorrow, Monday, at 2:00 p.m.

On motion, debate adjourned until tomorrow Monday, at 2:00

p.m.

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

MR. DICKS: Mr. Speaker, I wish to inform the House that I

have received a message from His Honour, the Lieutenant-Governor.

MR. SPEAKER: All rise.

The following message is addressed to the hon. the Minister

of Finance and Treasury Board:

"I, the Lieutenant-Governor of the Province of Newfoundland,

transmit estimates of sums required for the public service of the Province for

the year ending March 31, 1998, in the aggregate of $2,820,553,900, and in

accordance with the provision of the Constitution Act, 1867, I recommend these

estimates to the House of Assembly."

Signed by: ________ ___

A. M. House, Lieutenant-Governor

We will take a few moments to have the documents distributed

to the members of the House.

The hon. the Minister of Finance.

MR. DICKS: Thank you, Mr. Speaker.

I move that the Message, together with the Estimates, be

referred to a Committee of Supply.

MR. SPEAKER: It is moved and seconded that the Message

from His Honour the Lieutenant-Governor, together with the Estimates, be

referred to a Committee of Supply and that I do now leave the Chair.

On motion, that the House resolve itself into Committee of

Supply, Mr. Speaker left the Chair.

CHAIR (Barrett): Order, please!

The hon. the Government House Leader.

MR. TULK: Mr. Chairman, I move that the Committee rise,

report progress and ask leave to sit again.

On motion, that the Committee rise, report progress and ask

leave to sit again, Mr. Speaker returned to the Chair.

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

MR. BARRETT: Mr. Speaker, the Committee on Supply have

considered the matters to it referred, and wishes to report tremendous progress

and asks leave to sit again.

MR. SPEAKER: The Chairperson of the Committee of Supply

reports that the Committee have considered the matters to it referred and has

directed him to report progress and asks leave to sit again.

On motion, report received and adopted, Committee ordered to

sit again on tomorrow.

Notices of Motion

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

MR. TULK: Mr. Speaker, I move that the remaining Orders

of the Day do stand deferred and that this House, on its rising, do adjourn

until tomorrow Monday, March 24, 1997, at 2:00 p.m. and that this House do now

adjourn.

On motion, the House at its rising adjourned until tomorrow,

Monday, March 24, at 2:00 p.m.