PROVINCE OF NEWFOUNDLAND AND LABRADOR HOUSE OF ASSEMBLY Volume 1 Number 123 4th. Session 34th. General Assembly VERBATIM REPORT MONDAY, JULY :ZO, 1970 SPEAKER: THE HONOURABLE GEORGE W. CLARKE

July 20th, 1970 The House met at 10:30 A.M. Mr. Speaker in the Chair. Tape 1319 JM- 1 NOTICE OF HOTION: ~_{;.C. · ~!_OSBIE: Nr. Speaker, I give notice that I will on tomorrow move the following resolution: t~EREAS the United States Navy has reduced its activities at the Argentia Naval Base to that of a standby basis resulting in the loss of employment hy hundreds of Newfoundlanders living in the Argentia-Placentia area and thereby eliminating the main economic activity in the said area: AND

WHEREAS the Government of Newfoundland and Labrador were aware of the likelihood of such event occurring hut had developed no overall plan to meet this contingency: ~~D

WHEREAS it is the responsibility of both the national and the provincial govern­ ments to meet the crisis created in the Argentia-Placcntia area by the closing­ down of the main economic activity of the area by creating other economic opportunities in the area and maintaining public services while such other economic activities are established; AND WJIEREAS the problems of the Argentia­ Placentia area have been further complicated by the resettlement of other Canadians in the area under the terms of the National-Provincial Resettlement programme:

BE IT RESOLVED that the Government of Newfoundland and Labrador act immediately to meet the crisis in the Argentia-Placentia area by: 1. Appointing one Minister or one Department of the Government to take over responsibility for initiating and co-ordinating all programmes of assistance and development of the Argentia-Placentia area: 2. Taking all steps possible to have the Argentia-Placentia area declared to be a "special area·· under the terms of the Federal-Provincial DREE programme: 3. Establishing, with the assistance of the Federal funds available, a trade school in the Argentia­ Placentia area: 4.

Requesting the Government of the United States, through the President of the United States, t~ turn over to the Government of Newfound­ land the facilities of the U.S. Base at Argentia so that all buildin~s and other assets can be used immediately to encourage economic and industrial development at Argentia using the facilities so provided, such representations to be made through the Government of Canada and directly to the President of the United States of America: 5. Taking the necessary steps to ensure that the municipalities of the Argentia-Placentia area are enabled financially to '. 7904

July 20th, 1970 Tape 1319 JH - 2 MR. CROSBIE: ------ continue providing adequate municip .al services in the Argentia-Placentia area and including the provision of a new water system for the Town of Placentia: 6. Taking such fundamental steps as are necessary to ensure the continued operation and expansion of adequate school and educational facilities in the Argentia-Placentia area for the people living in the area and resettled in the area: and 7. Taking all such steps as are possible to assist those whose employment at the U.S.

Naval Base has been terminated in securring adequate termination pay and compensation for the years of service given to the naval station at Argentia. ANSWERS TO QUESTIONS: HON. J ·.R. SMALUIOOD(PREMIER) : Mr. Speaker, question no. 56 on the Order Paper of February 23rd in the name of the hon. the member for Bonavista North, question no. 229 on the Order Paper of March lOth in the name of the hon. the member for St. John's West, question no. 257 on the Order Paper of April 6th in the name of the hon. the member for St.

John's West, question no. 274 on the Order Paper of April 7th in the name of the hon. the member for St. John's West, question no. 299 on the Order Paper of April 8th in the name of the hon. the member for Gander, question no. 324 on the Order Paper of April 9t~ in the name of the hon. the member for Burin, question no. 4Rl on the Order Paper of April 23rd in the name of the hon. the member for St. John's West, question no. 521 on the Order Paper of May 26th in the name of the hon. the member for St. John's West. HON. G.A. FRECKER(MINISTER OF PROVINCIAL AFFAIRS)_: Hr.

Speaker, I should like to table the answer to question appearing on the Order Paper of April 9th, 1970 and ask by the hon. Leader of the Opposition. The information, Mr. Speaker, had to be obtained from the Dominion Bureau of Statistics so rather than refer it back since we are in such a short time zone, sort of, I thought I would obtain the information and here it is. The number of the question is 320 appearing on the Order Paper of April qth. HO~. J .R. CllALKER(MINISTER OF PURLIC \YORKS): Mr.

Speaker, ~ wish to tahle the answers to questions, I may say they are all similar, 551, 552, 554, 555 and 556 on the Order Paper of June 12th and ask by the hon. member for Gander a~d also 7905

July 20th, 1'170 MR. CHALKER: Tape 1319 JM - 3 the answer to question 5l,f1 on the Order Paper of June 4th ask by the hon. member for St. John's Centre. HON. E.M. ROBERTS(MINISTER OF HEALTH): Mr. Speaker, just before the House rose for adjournment the hon. member for Gander ask me a question about certain space which he understood we rented in the town of Gander.

I told him that we rented no space other than that in our hospital, the James Paton Hospital. lie then1 on a supplementary questionfask me if we would check further because it was his understanding that there was an office in the shopping centre that had on it the sign "Department of Health." I told him I would check into it. Hy officials have now told me that we rent no space at all. I believe they have been in touch directly with the hon. gentleman.

I gather he has told them that he had not seen the sign himself but that somebody told him about it and so he wanted to check"into itL 'l+e rent ,no space in Gander, the Department of Health, the only space we have is that in the James Paton Hospital. ORDERS OF THE DAY: MR. CROSBIE: On Orders of the Day, Mr. Speaker, I would like to ask the Minister of Highways whether there is any reconstruction proceedings on the road to Fox Harbour and if so were tenders called and when were tenders closed? MR. SPEAKER: This question could be more appropriately put on the Order Paper. MR. COI.LINS: Mr.

Speaker, before we get into Orders of the Day I have a question for the Minister of Highways 1 having to do with the very serious problem at Brown's Arm.which he is familiar with,! am sure, I have a copy here, Mr. Speaker, of a manifesto,which contains a couple of familiar looking faces, showing that the road to Brown's Arm was to be paved. Can the Minister say if he is reneging on that promise or if the road is to be paved? MR. HICKMAN: On Orders of the Day, Hr.

Speaker, again to the hon. the Minister of Highways: Has he been made aware of the dreadful condition of the highway that presently exists between Swift Current and Molliers and will he take any remedial steps to instruct the contractors or his officials to improve what is almost now an impossible condition? MR. COLLINS: He should give the hon. ~entleman an opportunity to report. MR. MURPHY: (Inaudible). .-·. 7906

July 20th, 1970 Tape 1319 JM - 4 MR. HICKMAN: That is up to the Minister of Highways to decide, Mr. Speaker, surely. MR. COLLINS: Or the Speaker. MR. HICKMAN: Or the Speaker. MR. CROSBIE: On Orders of the Day, Mr. Speaker, I would like to ask the Minister of Municipal Affairs whether he can tell the House 1 has the new subsidized rental housing scale proposed by the Government of Canada yet been accepted by the Government of Newfoundland and,if so,when will the new subsidized rental housing scale commence? MR. SPEAKER: This is the type of question which could more conveniently be. placed on the Order Paper. MR.

HICKMk~: Mr. Speaker, on Orders of the Day, I would ask the bon. the Minister of Municipal Affairs if he would i~dicate to this House from what source funds had been found to complete the water and sewage installation at Elizabeth Street, Corner Brook? MR. CROSBIE: Mr.

Speaker, on Orders of the Day, I would like to ask the Minister of Finance whether he would tell the House whether or not any Lieutenant-Governor's warrants have been issued since the House closed,four weeks ago,and before the House reopened and~f so 1 the date, the amount and the purpose of the expenditures for those Lieutenant-C~vernor's warrants? MR. SPEAKER: These are the type of question which require a notice and which would be more conveniently placed on the Order Paper. MR. HI CK."'tA.~ : ~lr.

Speaker, on tlrders of the Day one question that does not require notice; would the hon. the Minister of Public t-!orks indicate if work has commenced on the thl!ee Expo ,,buildings in Newfoundland? MR. CHALKER: Hr. Speaker. no but we are working on that project at the present time. MR. CROSBIE: Mr. Speaker, this question does not require a notice - MR. SPFAKER: The hon. member for Gander. MR. COLLINS: Mr. Speaker, I am sure the Premier will want to react to this.

Can he advise the House if there has been anythinp, new to report with regard to the resolution passed in the House of Assembly on the 24th of April 196R ·relative .-~ 7907

July 20th, 1970 MR. COLLINS: Tape 1319 JM- 5 to a recognition of the rights of the Pentecostal Church in Newfoundland? MR. CROSBIE: I gather, Mr. Speaker, there is no answer. I would like to ask the former acting House Leader whether he has checked to discover what the position is on Hansard as we have not received any copies of Hansard since sometime in May? MR. ROBERTS: Mr. Speaker, I have been trying to check but the Editor of Debates I am told has found that his duties take him elsewhere this morning so I have no information as yet.

I am trying to get it and as soon as I have the information I will give it to the House. ADJOURN DEBATE ON BILL 94(SECOND READING): MR. CROSBIE: Mr. Speaker, in rising to speak on the second reading of this Bill I would like to make it clear that I do not think a more important issue has come before the House of Assembly since 1949 than this present issu~ I therefore appreciate it if I could be allowed to speak without too many interruptions, Mr. Speaker, because this is a very serious matter that affects the future of Newfoundland to the extreme. Mr.

Speaker, Newfoundland is not the only underdeveloped Province of Canada, it is not the only underdeveloped area in the world. There are undeveloped areas all over the world - Africa, South America, Asia. All over the globe there are undeveloped areas. We are not the only Province or the only land where jobs are desperately needed, where industrial development is needed, where economic development is needed.

We are not alone,but I know of no other state, Province, country or nation that ever gave the concessions to private promotors that the Government of this Province proposes to give to the Shaheen group in the Legislation now being amended before this House. Newfound­ land has always been called a place which was a sport of historic misfortune. Does that mean. Mr. Speaker, that we must lie down and allow ourselves to be trampled on, all~· ourselves to be bullied, allow ourselves to enter into the most one-sided kinds of arrangementsJin our attempt to have economic and industrial development in this Province?

I say no. That is why I am against this legislation, That is why I resigned from the CabinetHn May H6R. That is the position I have taken since then and before then,when I was in the Government. 7908

July 20th, 1970 MR. CROSDIE: Tape 1319 JM - 6 We are not such a sport of historic misfortune that we have to accept this kind of an arrangemcnt,where the people of Newfoundland put up the money, put up-the credit and allow a private entrepreneur to take from the project practically all of the profits. l-Ie were unprotected ,where the,·deal is so one­ sided and where the promoters concerned,themselvcs do not have to invest, Mr. Speaker, one red cent in the project.

It has gone to such an extreme that in the amendments now before this House the Shaheen ~latural Resources Incorporative Company are so grasping, so one-sided in their outlook, so money mad that,in the amendments now before this llouse,we are ask to have this project,which we are financing one hundred per-cent 1 pay them back for surveys and moneys that they expended at Come Dy Chance in connection with the proposed construction of a wharf at Come By Chance by the Federal Government. When you look through the original agreement and when you look through these amendments, Hr.

Speaker, time after time you see that the Shaheen group is to have paid to them all their expenses and,in connection with supervising the construction of the refinery.all salary expenses of theirs plus one hundred per-cent,plus all other out-of-pocket expenses and in addition they get millions upon millions in fees. Never was there such a one-sided arrangement~ Never did a Province give away so much to get so little as this Province is giving away in the agreement now before the House. $165. million dollars of our credit, Mr.

Speaker, going out to provide at best 300 to 400 permanent jobs at Come By Chance,when up the road fifty miles.in Placentia-Argentia area,700 jobs have been lost this year so far and it will go to 900 or 1,000 with the closure of the Argentia Naval Base.Yet nothing approaching ~165. million or $100. million or $50. million or $25. million or SlO. million or $2. million or $1. million has been spent by the Government to alleviate the unemployment and distress in the Argentia-Placentia area. The Government is so fascinated, so carried away by this Come By Chance Oil Refinery project that nothing else matters.

It is a tragedy, Mr. Speaker, that the Government keeps blindly to this oil refinery project,year after year, grovelling before Mr. Shaheen,giving him everything he asks for. Now it is suggested to us that these amendments before the House art a great step forward. 7909 I '

July 20th, 1970 Tape 1319 JM - 7 MR. CROSBIF.: These are not a great step forward, Mr. Speaker, not at all. What is the propaganda that the Premier has put out about these amendments? Let us look at it briefly. The Premier says that these amendments will mean an additional cash payment of $76. million into the Provincial Treasury during the first thirty years of the project and another $88. million will flow into the treasury is under the Come By Chance Act;is what the Premier says. N0ne of thatAcorrect. None of that is exact. It just is not so.

The $88. million dollars is some wild figuring on cost benefit analysis, Mr. Speaker, that will come back to the Treasury of the Province from corporation income tax and the people employed there will pay tax and they will pay SSA tax and they will pay liquor tax,when they buy a bottle of beer, and so on and so forth, and all this is added up to $88. million dollars over thirty years and it is said that because of the Come By Chance agreement there is $88. million dollars coming to the Province over the next thirty years. Absolutely nonsensical.

That is not coming from that Come ' By Chan~e agreement,!£ it ever does come. $76. million is said to be coming from this agreement now, Not soJ Just look at one of the inexactitudes, to put it politely. It was said by the Premier that under this new arrangement Mr. Shaheen and his group were going to pay $10. million.To acquire the shares at the end of the fifteen years, the shares of our Crown Corporation, they are going to pay $10. million dollars. Not so, not a word of truth in it.

They are going to exercise an option to get these shares for $2,000, when the Government's loan is paid off, when the Government has no further liability, $2,000. the agreement now says that they will pay five per-cent of the net profit of the refinery project,from then on, five per-cent until they pay the sum of $10. million dollars to the Provincial Government. Mr. Shaheen is not spending one cent of his money. If we ever get that $10. million, if there ever is any net profit when Mr. Shaheen takes over and exercises his option, if there ever is, if we ever get it the $10. million dollars is not ~r.

Shaheen's money, it is money from the oil refinery established at Come By Chance by our credit, it is money of the people of Newfoundland being used, pretended to be used to pay for ~hese shares. The $10. million, not one red cent of that $10. million dollars is coming from Mr. Shaheen or Shaheen 7910 • I •

July 20th, 1970 MR. CROSBIE: Tape 1319 JM - 8 Natural Resources or Newfoundland Refining, not one red cent. So with our own money we are going to ftet our own money, The $10. million is ours and not Mr. Shaheen's. That is one more of the little inexactitudes. It is said the Province will save $1. million dollars annually in subsidy for electric power. This agreement is not changed at all.

Under this agreement the Province must pay the difference between two and one-half mills per kilowatt hour,for power supplied to the refinery,and the actual cost which is going to be at least six mills. 1t must pay the difference under the agree­ ment. That is not changed in these amendments. We are told that some company called Can-Carib, some subsidary of Mr. Shaheen>is going to sell oil to the power commission and somehow repay us the $1. million or more that we are spending on the electricity subsidy. Well that is only a way of giving business to Mr. Shaheen, That is not Mr.

Shaheen taking the burden of that $1. million a year or whatever it is ·off our backs, the backs of the tax payers of Newfound­ land, not for a minute. It is a device to give Mr. Shaheen a captive market for selling oil for the Newfoundland and Labrador Power Commission's steam plant located at Holyrood. That is all it is. What kind of tripe is it? It is not even in the agreement. There is no Act before this House that provides for it· We are told that Mr.

Shaheen ·is going pay, that Shaheen Company will pay the difference in the cost, not at all. ~It will mean $1. million (I am quoting the Daily News of July lOth) saved to the Treasury: ~t at all. Nothing of the sort. It will mean the captive market for the steam plant at Holyrood for oil sold to it by Mr. Shaheen and nothing else, That is what that means. We have not seen the letters yet. The hon. the Minister of Health is supposed to get us a letter but we have not seen them yet. MR. SMALLWOOD: If the hon. gentleman will allow me to table it, I intended to do it at the opening of the House. MR. CROSBIE: Agreed.

So when you look at these amendments, now there is one improvement, Mr. Speaker, they are to pay five per-cent. After the first mortgage is paid off in eight years ,hopefully, the project is to pay the Newfoundland Government five per-cent of the adjusted gross profits of the operation per year-:- of the gross profits. The trouble with that, Hr. Speaker, 7911

July 20th, 1970 MR. CROSBIF.: Tape 1319 JM - 9 is this that what the gross profits are will be determined by Mr. Shaheen. There is a formula given in the Act but anyone who knows business or commerce or any­ one who knows auditing or accounting knows how complex it is and that five per­ cent of the gross profits will be whatever Mr. Shaheen decides it will be.

If he wants to make the money outside Come By Chance,he can just lower his sale price for the production of the plant or up the price of crude oil he supplies to the plant or take a certain rate of depletion or take a certain rate of depreciation~ a hundred ways it can be done. The five per-cent of the ~ross profits can mean little or nothing, That is the only concession really in these amendments except concessions by Mr. Shaheen. Mr. Shaheen no longer has to carry out his obligation to sell S30. million dollars worth of bonds for the Newfoundland Government, not publicly but as a private placement. Mr.

Shaheen was supposed to have private purchasers, private investors,ready to take that $30. million dollars worth of honds,so it would not affect the financial markets at all, so it would not affect Newfoundland's credit rating at all. That is what he was supposed to do, that is ~.rhat he agreed to do but he did not do it. He had two years to do it till May 23rd, 1970.Ke had to do it, Mr. Speaker, plenty of time but he did not do it. He failed in his obligations under the agreement and on May 23rd, 1970 this Government was legally and morally justified in saying to Mr.

Shaheen~ ·~ou have not met the corlditions precedent. We will now impose nel.r terms and conditions on you, if you are going to go ahead with this.'' But did the Government do it? Not at alL Would the Government have even attempted to get this five per-cent if Ottawa had not insisted? No, they would never. On May 23rd, 1970 the Government had the opportunity to revise,in our favour,this whole agreement or to get new people to carry out the Come By Chance project, people who could perform, people who could pay the wages of their employees.

What faith are we to have in a company that is going to use assets of ours ,in an amount of $165. million ,.that cannot pay its employees their wages? 7912 I.

July 20th. 1970 Tape 1320 PK - 1 MR. CROSBIE: Captain Wallis and four or five more who were down at Come- by-Chance for months - could not get their wages and salaries from Mr. Shaheen. Because - why? The $5 million interim financing that this Government gave Mr. Shaheen was used up. And he apparently hss not resources enough of his own to pay ordinary wages to his marine superintendent and others at Come-by-Chance. The future of this whole oil refinery, this whole project is going to be put in the hands of a man who did not have enough asset to pay his employees down at Come-by-Chance.

What kind of madness is it? Mr. Speaker, there is no question to my mind but that this - the Government should not proceed with this project without a general election first,to see if the people of Newfoundland will approve. The people of Newfoundland,who watched for two days last March the proceedings of this House on T.V. and radio,and listened - got their eyes opened, They saw haw you could not get any information from the Government or Mr. Shaheen and his cohorts, W~ still have not got it. In the Premier's opening speech what information did we get? What new information? Nothing. Zero.

We got the press conference stuff, the misleading figures> tbe propagerida but no facts. We are not told what the gross profits of the refinery are estimated to be. We are not told what the annual gross sales will be. We are not told what the estimated net profit will be. We are not told anything of any value in the discussion. We are still as much in the dark now as we were in March~ no further information. The Government will not give any. The Government is to arrogant to give information. Who are we to ask for information?

We only represent certain districts in Newfoundland, and a lot of other people in Newfoundland~who no longer have faith or confidence in the present administration. They have their eyes opened, This refinery was never approved at a general election. It came up in 1967 first, after the election, a year later. And after all that has happened since 1967, nev~~ was there a project in the history of politics of any province or country, where an issue arose that was more fitting to be settled by a general election. If there is no general election 7913

I : July 20th. 1970 Tape 1320 PK - 2 MR. CROSBIE: before this deal goes through, 1f there is no general election, I suggest,Mr. Speaker,that no succeeding government should feel itself bound by this agreement. It is not approved by the people of Newfoundland. The Government is afraid to go ~o the people of Newfoundland to ask them to approve it. If the people of Newfoundland do not approve it in a general election,after what has happened in the last three years, it should not be considered binding on any government that succeeds this one. This whole project was suggested first in 1967, the winter of 1967.

There was a Bill passed then, Mr. Speaker, the Avalon Core.Chemical Building Act, No. 82 of 1966-67. The Government was to put up $30 million to get a first mortgage and lease a refinery of 30,000 barrels a day to Newfoundland Refining, Mr. Shaheen's company. That was what the project was then, when that Bill passed through the House. And when that Bill passed through the House there were certain conditions which Mr. Shaheen had agreed to, which were tabled in the House. Why where their conditions, Mr.

Speaker'- Because I had suggested to the Premier that there should be a Cabinet committee negotiate the details with Mr. Shaheen and the Cabinet committee and the member for Burin, Humber East, myseif and the present Minister of Justice met with Mr. Shaheen and his legal adviser, Mr. Don Dawe, to go over these suggestive conditions .to tie him down a bit. MR. SPEAKER: Before the bon. member continues I wish to point out once more that we do not want to engender a debate on a subject whichhas already -received the judgmen~ of the House.

I know it is difficult to speak on this . amendment without referring to ~he main Bill and other legislation that has come before the House before. But to open a general discussion on a matter that has already received the judgment of the House, I do not think it is to the best advantage of this sitting,at this particular time. ' I would ask the bon. member to try,as farnow as possible,not to go into a general debate on a matter that has already been decided upon in this House in another sitting. 7914

I: July 20th. 1970 Tape 1320 PK - 3 MR. CROSBIE: Mr. Speaker I just want to compare what was agreed then to these amendments or some of the points agreed then to these amendment - to show how little improvement there has be~n, even over what was originally agreed, Mr. Speaker. At that time Newfoundlartd Refining agreed to invest $10 million in this project, as equity. In other words, if the project did not succeed they lost their $10 million. That got changed afterwards to a loan of $10 million, subordinated debentures~ and that is not changed in the amendments now before this House.

It was agreed in 1967 that if there were.no ADA grant, Area Development Grant,of $5 million to the building cost of this refinery, Mr. Shaheen would supply the $5 million. Now, Mr. Speaker, there is no ADA grant for this refinery. Yet, Mr. Shaheen, is not supplying the $5 million - putting in $5 million himself, no. The extra $5 million is included in the $125 million that is being arranged to be financed in England. The Crown Corporation is just borrowing $5 million more. So that condition is gone by the boards and it is not included in these changes here, the ADA grant. Mr.

Shaheen was going to arrange for the purchase of the $30 million bonds. The purchasers were going to be private purchasers for the fifteen year bond issue. Now, Mr. Speaker, what is one of the changes before the House now? Our $30 million is no longer to be fifteen year bonds. The term of the loan is to be what the Lieutenant-Governor in Council decides, not fifteen years. And I suggest here and now that what is going to be is a bank loan of two or three years. So that our Newfoundland Government in two or three years time has got to go out and arrange a $30 million loan to repay the bank.

That is one change.in this agreement here, that is not to the benefit of Newfoundland. It ia not this Government, not this year, that $30 million is going to be borrowed 1 long term money, so it is settled and done with - no. This year it is going to be a ban~ loan for two or I three years. Arid the succeeding government. after the next election, whether it be this one or some other one, is going to have to cripple itself, is 7915

July 20th. 1970 Tape 1320 PK - 4 MR. CROSBIE: going to have to interfer with the bond market, by going out and borrowing an additional $30 million to repay this bank ~oan. That is what is going to happen. This Government worried about what is going to happen to another government in two or three Y,ears time, not on your life, not a bit worried. The Government probably knows it will not be the Government in two or three years time. Another condition , it was tabled in this House,was the feasibility study.We were going to be let see that.

A further condition was that the shares of Newfoundland Refining Company Limited, Hr. Shaheen's company, a subsidary of Mr. Shaheen that is the operator under this agreement - we are entering into an agreement with Newfoundland Refining Company Limited, a Newfoundland Incorporated Company that has no asset - none. The last time I looked ithad $20. worth of issued capital - $20. worth. No assets - that is who we are entering into the agreement with, The subsidary of Mr. Shaheen's company.

The shares of that Newfoundland Refinery Company, Limited were to be hypothecated to the Government of Newfoundland in 1967, under the agreement that we worked out. So that if there were any default we could take over that company. That is gone by the boards. That is not in the amendments now. It was also agreed then that Mr. Shaheen 1 · Shaheen Natural Resources Incorporated,would guarantee two years payment of rental. Now, Mr. Shaheen said; "my company cannot guarantee the whole $30 million or $40 million. It will interfer with our credit too ~uch. It will interfer with our other operations too much.

We cannot take on such a large contingent liability." I said~ "all right.fair enough. That sounds sensible and reasonable. .. .. But,I said: what about guaranteeing several years payment of rental - that is principal and interest~ So that if anything happens to the project r if you default or you are not running it properly and anything happens, you will have to pay the Government of Newfoundland two years payment - the principal and interest. That will~ive the Government of Newfoundland two years to go out and find somebody else to take over the project,that knows what they are doing. Give us some protection.

And it will 7916

July 20th. 1970 Tape 1320 PK - 5 HR. CROSBIE: mean that you will at least lose something. If through your fault this project is not profitable or it is not run right, you will have something to lose - two years payment of principal and interest. Because at that time it would be around $4 million.• That was agreed to by Mr. Shaheen and tabled in this House, Mr. Speaker. Yet that is not in these amendments, there is nothing like that. Mr. Shaheen will not lose one red cent, not one red cent, if this project fails. In fact, if the project operates for one or two years he will be in several millions of dollars.

The first year it operates he will get 5.1 percent of the gross sales of that refinery. It does not matter if the refinery is making money, it has got nothing to do with it. It has gross ~ sales- say of $150 million for the first year 1 Mr. Shaheen will get five percent of that $150 million, whether the company is making a cent or not- seven and a-half million dollars. Then, if it operates again the second year, he will get the $7.5 million·again. That is $15 million he will have back just under the one fee, the sales agency fee of 5.1 percent.

That is not counting the out-of- pocket expenses, the hundred percent of the salaries, the 27.8 percent of the net. It is not including any of that. In two years, Mr. Shaheen will have out of it at least $15 million. And you can forget all the rest he is going to make, the other kinds of possibilities for making money, for buying the crude and the selling the product and chartering the vessels and all the other ways there are for making money. So, Mr.

Shaheen, has got nothing at stake in this, except if it does not succeed he will not make the hundreds of millions of dollars that he is now going to make, if it is a success. What kind of a deal is that for any government to enter into? The conditions files in this House in 1967 are gone by the board, completely by the board. In the fall of 1967, Mr. Shaheen sent a draft agreement to the Government, which violated practically everypne of those terms. At that time, Mr. Speaker, I wrote the Minister of Justice and outlined my position on these agreements. The letter was November 17th. 7917

July 20th. 1970 Tape 1320 PK - 6 MR. CROSBIE: 1967, pointing out how these conditions were violated and the other things that were wrong with these agreements. And as a result there was a confrontation up in Toronto in November 1967, at the Royal York Hotel- between Mr. Shaheen, his legal advisers. A member of this House was there, Mr. Shaheen's legal adviser, the junior ~ember for Harbour Main; the Premier, the Minister of Justice, myself, the then Minister of Justice, the member for Burin; Mr. Dennis Groom and others. MR. A. MURPHY: Mr. Speaker, may I ask just one short question.

I do not want to get complicated here. Did the.hon. member say, Hr. Shaheen's legal adviser and the Junior }~mber for Harbour Main? Or the legal adviser who is the junior member for Harbour Main? MR. CROSBIE: Right. Who is? MR. MURPHY: I would just like to set this thing in its proper perspective. MR. CROSBIE: Who is the junior member for Harbour Hain. And that was to review the letter I had sent to the member for Burin, the Minister of Justice then, and to deal with these matters. So I will not go into all of that, Mr •. Speaker. But when I heard, Mr.

Speaker, on the public airways, a d~liberate attempt to deceive, a deliberate deception, the Premier stating that he had nothing to do with negotiating the original agreement, that was Wells and Crosbie, or word~ to that effect, it almost turns your stomach and makes you want to throw. Not an iota of truth in it. For months we struggled to get this deal improved, to try to salvage something. And time after time, Mr. Shaheen,in behind our backs to Mr. Smallwood, the Premier,· getting us reversed.

F.verytime we wanted to make a stand on this point or that point or something 1 to protect the Province of Newfoundland, in behind your backs there is the Premier, and you find yourself revesaed. we were nothing but legal draftsmen. The mistake we made was going on with it so long. That ia the mistake we made. We were against the worst features of this thing 7918

July 20th. 1970 Tape 1320 PK - 7 MR. CROSBIE: from the start. And what protection there is in it is due to the member for Burin, the member for Humber East and myself, against all odds. Because the bon. the Premier is incapable of bargaining in any kind of hard and sensible way with anyone who · suggest~ that they have a scheme for industrial or economic development in Newfoundland. Just too aaxious! Just too anxious to have anything! And they know hbw to take advantage of it. The Shaheens know how to take advantage of the Premier there.

If it is not a fault that is to the Premier's discredit - anxious to develop Newfoundland. But these people know how to play on that and how to use it, to squeeze from Newfoundland every dollar and cent that they can. Of all the people that I have come across in the Government,trying to get the Government to go into deals with them, this was the worst, the most merciless, the most mercenary of them all. And this agreement as it comes before us now is not improved enough to ever made me support it. Never. It is the worst industrial assistance agreement ever to come before a Newfoundland House of Assembly, Mr.

Speaker, the most one-sided, t~e most grasping on the part of the promoter, the one where we take the greatest risks where there is less for us than any other that has come before us. Melville by comparsion is monumental in its benefits to Newfoundland,cornpared to this. Rapaciousness, repacity - you could barely credit it. This Province is being squeezed by these people for their own private profit, not even a reasonable profit. Squeezed! We will be so dry that there will be nothing left but a hut, when they are finished with it, if this Government stays in power. Mr.

Speaker, made no doubt about it, do not deceive yourself, Mr. Speaker, for one minute,- the $165 million is money and credit of the people of Newfoundland. Do not accept this nonsensical argument that the Premier puts forward about Crown Corporations. We know the technical legal position. A Crown Corporation is not the Government, you cannot sue the Government if the Crown Corporation defaults, not legally. Not legally you cannot. He know that. That is the legal position. But Crown Corporations are owned 7919

July 20th. 1970 Tape 1320 PK - 8 MR. CROSBIE: by the Government, Government Corporations owned by the Queen, The Queen in right of Newfoundland. They are going-to borrow $165 million. Not $155 million. It is $125 million being raised in England now, $30 million from the Newfoundland Government and?.nother $10 million the Jacob report shows is spent down there. It is at least $165 million. And remember this, Mr. Speaker, when you are considering whether this should be supported, that originally, originally it was going to be a 30,000 a barrel a day refinery,of $30 million.

Then,if one looks through the papers and announcements of the last few years, what do you see? •Financial Post'~ November 18th. 1967·, "Mr. Shaheen says the 100,000 barrel a day refinery will cost $97 million"- November 18th. 1967, $97 million. In the Shaheen's feasibility report 1 in the winter of 1968, it is shown to be $103 million, the cost of the 100,000 barrel a day refinery, $103 million. Then, in March 1970, the "Financial Post", one of Mr. Shaheen's it officials gives the cost at $130 million.

March l970~is said to be $130 million. 'Newfoundland Government Bulletinwand we know that everything in the'Newfoundland Government Bulletin" is a hundred percent true, it is a fact. If it is in that Bulletin it is a fact. April 1970, the ''Newfoundland Government Bulletin'states that the cost of the 100,000 barrel a day refinery is $103 million. The 'Bulletin"came out two days before Mr. Shaheen and his group came into this House in Harch.l970, the end of March or early April, and when the question was asked Mr. Homer White the did not want to answer it. What? Say wha~ refinery was going to cost.

No, he could not do that. Why,that was a deep-dyed secret. The bon. the Premier told him to give the answer and he did. Imagine, he was not going to tell the members of this House and the public what the refinery was going to cost. How low we sunk - for some promoter to come in here and say that to us. With our , 7920

July 20 1970 Tape 1321 page 1. MR. CROSBIE: Money ehey are going to build a refinery and they will not tell us what it is costing. Well, the answer was given, $155 million gone up $25 million in two days. Yet we are asked to entrust the Shaheen group with the management and operation of this whole project Mr. Speaker, a project that they say will cost $97 million, then they say $103 million, then they say $130 million and now they say $155 million.

And I would not be surprised if it approached $195 or $200 million before it was through • How can we put our trust in thatr On their own word it has escalated $58 million, since 1967. Yet we are to us.e our credit for $155 million, and let them go ahead. We are even told that if this thing is not through by Thursday(the bon. the Premier• if it is not through by Thursday it may not go through and we here will be responsible for the loss of 2000 jobs to Newfoundlanders.

Man, oh man what you got to listen a to~ when you are in public life in this Province~ Here is~$165 million project and the Government tries to say to us,"Gentlemen, whip this through the House and whip it through pretty fast, or we will blame you for the loss of 2000 jobs," I say blame me for what you like. This should only go through this House when the issues are properly ventilated. And it can go through and be finished this week,if the Government is determined to carry it on. But never mind the threats, never mind the bluff. Agreements have to'be signed.

There were lawyers had to work on agreemenaand they are not going to start working on them unless this House passes this Bill. What, tripe, what utter madness. They know, the Government knows,they have the majority this Bill is going through. Their lawyers are working now. The other lawyers are working now. They are not waiting for this to pass thi_s House. Did they wait for it to pass this House before they drew it up? That is the effect of what the bon. the Premier is saying there. the In March we were told - April we were told~Procon contract was entered into ,it was signed.

The financing arrangements were signed, it was all 7921 I'

July 20 1970 Tape 1321 page 2. signed. Now the public is told that if we do not rush this through the House by this Thursday she is down the drain,because these agreements have to be signed. Well,.where is the truth? We have to rush nothing. We are going to rush nothing. We will not be bullied 9r bluffed by that kind of nonsensical talk. N6w, Mr. Speaker, let us look at this credit business.

I say; although legally the Crown Corporation debt is separate from that of the Province,it will be looked on in all financial circles as debt of the Province, that if there is a default in the oil refinery. if the principal and interest is not paid,the credit of this Province will be gone. Unless we pay it, we will never float another loan, never.

I want to quote from a letter: "As a Crown Corporation is involved as the borrower, the effect will be to have the Government guarantee all the capital~ That is the $100 million or aore - ~this will be so even though the excess over $30 million is not specifically guaranteed. The Crown Corporation is,after all, the Government in another guise, And for it to default on any part of its debt would be considered to be default by the Government itself." Who is the letter from? Mr. Denis Groom, financial adviser to the Government. Written on Nov. 27, 1967.

Here is the opinion of the man who was financial adviser to the Government and a very very successful one. Addressed to the Boo. Alex Hickman and a copy to myself. Given to us in Toronto when this whole thing was being discussed. Here is Mr. Groom's opinion. Here is my opinion. Here is the opinion of any one knowledgeable in the financial world. As a Crown Corporation is involved as the borrower, The effect will be .to have the Government guarantee all the capital, the $100 million or more. This will be so. even though the excess over $30 million is not specifically guaranteed.

The Crown Corporation is,after all, the Government in another guise, and for it to default in any part of its debt would be considered to be a default by the Government itself. 7922

July 20 1970 Tape 1321 page 3. Then Mr. GrBom goes on: -As a result of (

a) above investment analyst will add the full hundred million or more to the provincial debt for purposes of arriving at a per capita debt figure.- The Province is already out of line in this regard, and a further hundred million will add another $200 on to the per capita debt and make further borrowing more difficult. As all the money to be raised will be considrred by market too big borrowings for t~e Newfoundland Government." That is the financial advisers opinion.

As all the money to be raised will be considered by the market t~ be borrowings for the Newfoundland Government, the acquiring of this sun11-will undoubtedly have serious effects on the borrowings the Province wishes to undertake for its own purposes. It is therefore important that the Government get an early indication of the Shaheen groups proposal in this regard of the and ,further, it be made clear to Shaheen that ao sounding out/market should be undertaken without first of all consulting the Government. That is the position of the Crown Corporations.

The market will regard all of the money borrowed by the Crown Corporation and by the Government as borrowing by the Government. It will all be added to our provincial debt 1 when they are looking at our per capita debt figure. The Crown Corporation is a Government in another guise. There is the sensible, only sensible approach . by any body knowledgeable in this field. Advice given the Government Nov. 1967. Another thing the Government was advised, why are all these Crown Corporations involved7 Well this was to be the great tax, the great tax saver, tne great tax evasion device.

The Crown Corporation would not be taxable. That is why all these Crown Corporations had to be used. Now that was in Nov. 1967. The House will recall that the Federal Government, through Mr. Benson, changed the law with reference to Crown Corporations,so that they would be taxable if the shares of the Crown Corporation were under option to any private individual. That was changed in 1968, Why? To stop this fantastic loophole, that would permit every Province in Canada to try 7923 I . .

July 20 1970 Tape 1321 page 4. to attract industry by giving them tax free status as a Crown Corporation with an option to buy their shares. Now, we have done that in Newfoundland before, for twenty years,but smaller companies. - Newfoundland Hardwoods and this one and that one and all these Government industries, all tax exempt. But, they are small potatoes. But, when you got to an oil refinery, you are going to make that tax exempt that meant the Government of Canada would be losing tens of millions of dollars of revenue a year.

And if they permitted Newfoundland to do it and every other Province startea .to do i~ the Federal Government would lose hundreds of millions of dollars in tax revenue each year. Now, we knew that in November 1967. Mr. Groom pointed it out. From contacts I have with the Federal Government,! know that they are not happy about the Province entering into tax avoidance schemes such as this. It is within the powers of the Federal Government,at any time,to remove the tax exempt status of Crown Corporations of this type. If this does happen,the whole venture could collapse and be a considerable burden on the Province.

In assessing the degree to which this project is subsidized by the Province,the loss of the Province's share of the Corporation income tax should also be considered. That was the advice from our financial adviser. Mr. Gr90m knew. I knew because he told me. Others in the Government were told.by him, that it was likely that the Federal Government would have to atop this. And they did stop it. What else could they do? What did Mr. Benson do?

Was the Federal Government going to allow hundreds of millions of dollars of corporation taxes to slip away a year,by allowing us to go on' They had to change it and they did change it, and we were warned that it would be changed and it was changed. So the Government cannot pretend that thisJ only a thirty million.is going to affect the credit of the Province of Newfoundland. It is no good pretending that. No good at all. Nobody believes it. The financial adviser to the Government did not believe it. 7924

July 20 1970 Tape 1321 page 5. MR.SMALLWOOD: Would the bon. gentleman allow me to ask him one question? MR.CROSBIE: Sure! MR,SMALLWOOD: A hundred and twenty five million of this amount is being guaranteed by the British Government, for its life, for its whole life, which is eight years. For eight years, Come by Chance will owe $125 million dollars but for the same eight yea~s that it owes the money the British Government are guaranteeing it unconditionally, principal and interest.

How then can it be a burden on the Treasury of this Province or on the credit standing of this Province when the British Government are one hundred per cent behind it from the moment it is borrowed until the moment it is paid backl MR.CROSBIE: The answer to that Mr. Speaker is very simple.

That is,the English Government has to pay on its guarantee to the English banks or who- ever puts up the money in England they will take the place of the English banks or the people who put up the money in England and try to it collect/from the oil refinery. from the Crown Corporation whose debt it ~- MR.SMALLWOOD: Take it over - MR.CROSBIE: Take it over or try to collect it.

MR.SMALLWOOD: And give it to their own company to run.British Petroleum, or to some other big oil company. the MR.CROSBIE: And yes, - or they can come to~Newfoundland Government and ~ say;gentlemen,a Crown Corporation of yours owes us $125 million. Owes us $125 million, and we are expecting you the Province,tbe creater and the owner of this Crown Corporation, this arm of the Queen,to see that this $125 million is paid: That is what the English Government will do,naturally. MR.S~~LWOOD: That is not what - MR.CROSBIE: It is not going to take a loss. It is going to see that this 7925 i j

. ' July 20 1970 Tape 1321 page 6. P!ovince pays it if it has to. If it can operate the refinery profitabl~ than it would take it over and operate it or get somebody to do it. The $125 million is going to be added when the next bond issue goes out of this Province. If our financial advisers are doing their duty, they will show in the perspectus this $125 million debt of a Crown Corporation down at Come by Chance - MR.SMALLWOOD: Guaranteed by the British Government. MR.CROSBIE: They have to show it in the perspectus a~ a possible .liability of the Newfoundland Government.

MR.SMALLWOOD: They will point out that it is guaranteed by the Government of the United Kingdom. MR.CROS~IE: Sure~t~ey will point that out, naturally. They will point it out. HR.SMALLWOOD: Should make a little difference. MR.CROSBIE: Well, we hope it will make some difference. But this indebtedness is the same and considered to be the same as indebtedness of this Government.

And there is no~ay of getting around it,it is going to be added to our per capita debt and any analysis of our financial position •.• AN.HON.M§MBER: A guarantee according to - (inaudible) MR.CROSBIE: Yes • .•• ~ ;' he considers it guarantee, it is a Crown Corporation • So, that was in November 1967, we were given that advice. The advice was of a accurate because Mr. Benson did amend the tax exempt status/Crown Corporation. It vas accurate in that respec~ t was accurate in the attitude that Mr. Groom took to the Crown Corporation aspect of it, both respects.

Now from November to January 1968 the Cabinet Committee was engaged in legal drafting, Mr. Shaheen and his group, which resulted in the agreement attached to the original Eill. It was not enough, all the concessions that have been given in that agreement. Then the Shaheen group came to the Government,after having this wonderful arrangement,and said to the Governmen~we now need you to advance us money 7926

July 20 1970 Tape 1321 page 7 that we can spend at Come by Chance until all the bond issues are arranged. We need the interim financing. Imagine. a group that had this agreement could not go to Banks or Trust ·Companies or whatever and arrange a few million dollars credit on the strength of it. But our Government was now asked to go in and provide that interim financing too. In February 1968 we said no; the Cabinet Committee did not want to do that. The Premier agreed • It is no good going into past history too much. In May it was reversed,the Government decided to give the interim financing and we resigned.

We could take it no longer. I do not know how we took it that long. After that agreement,that sweetheart deal,Shaheen could not arrange a few million dollars interim financing themselves on the s.trength of it it -and had to come·,to this Government to get~and the Government unwisely gave it, and it is spent now partly at Come by Chance and partly in the United States and partly everywhere around the world. It is gone.

Is that a reason one wonders why when May 23 1 1970. came and we had the opportunity to negotiate the whole deal all over again afresh 1 that the Government did not do thatt The Government had $5 million gone down there and cannot get it back unless this project goes ahead. Talk about being suckers. Talk about patriotism and feeling for one's native land being used to squeeze the country. Yes. we want Economic Development in Newfoundland and we want promoters. But By God when they -By Heavens Mr. Speaker, when they come here we want them to contribute something, we do not want them to use us just as a doormat.

The sport of historic misfortune, that they are going to jump on and squeeze until they get every last cent out of us. Ghana does not accept it. Basntoland would not accept it. Zambia would not accept it. Tanganyika would not accept it. Zanzibar would not accept it. They are all unfortunate countries struggling to get their per capita income from a hundred to two hundred dollars. Why.compared to the~we are rich here in Newfoundland with a per capita of twelve or fourteen hundred or whatever it is.

July 20 1970 Tape 1321 page 8. Cannot remember exactly now. But they are not going to be taken advantage of like that. They have some pride. They are not going to enter into and one,sided deals as this,under the guise of economic/industrial development. Nor should we. That is why I am going to vote against this legislation. The sport of historic misfortune~ And all persrective has been lost in the Government,just to get an industry. We will do anything to 8et it. We will pay out more than we are going to get in.

To get an industry so that somebody can say I am a great industrial developer,! have developed this but Province. But at what costl The cost is nat: going to be obvious" as the years go on. With the $165 million,if we borrowed the $165 million~Mr.

Speaker, put it into a development fund and set out to develop this island this little, some lumbering here, some pulp and paper mill there, a mine here possibly, or whatever it might be, or secondary industry, after having these things checked out and looked at;,invested in the equity position or loaned them the money,with $165 million we would create four or five thousand jobs minimum. Give me the $165 million and if I have not created five thousand jobs in the next two or three years,hang me. Hang me. I will tell you Sir, I can do it.

Scoff at,as cautious and conservative and all the rest of it not willing to take risks, not at all. Just not willing to be a sucker for any promoter that comes in here to make his fortune off the sweat and toil and the blood and tears of the poor unfortunate Newfoundlanders. There are-thousands of them now out there looking for jobs, and cannot get them. And holding_Qut that there are going to be 1700 jobs at Come by Chance while construction is underway. So, what? What is the good of 1700 jobs while construction is underway? What does that matter, the jobs are gone in two years time?

If there are ever 1700 jobs there. And we are going to get 400 jobs there may be permanently. For $165 million. What is it 1 the mountain laboured and brought forth a mouse. That mountain of money is going to labour and bring forward a mouse or less than 7928

July 20 1970 Tape 1321 paga 9. a mouse. Thank God, Mr. Speaker, we have another chance to vote against this. I am delighted to have the chance to go on the record. Made a mistake in May of 1968 when the Bill came up for second reading,we did not vote for or against it, because at that time we were still shell-shocked by what h~d gone on when we resigned from the Cabinet. We voted against the interim financing clause when it went through committee but abstain on second reading of the Bill. I &hauld have voted against it then. But now,Thank Heavens~have the chance to redeem myself.! can vote against it now.

And I am going to vote against it now. And I am willing to go to a General Election now or I am willing to go to a by-election in St. John's West now,to see tf the voters in St. John's West will agree or disagree with my voting against this Bill. I am given the assurance,by the Premier,that in three weeks time he will put a candidate up against me in St. John's West,if I vote against this Bill. I will resign, tomorrow, so he can put it to the test; so much I am against this miserable excuse for an economic development policy. AN.HON.

MEMBER: Unaudible) HR.CROSBIE: I do not know what the bon. member is saying but I know it is quite important. Very good! Very pertinent and a wise comment. I am not going to get,Mr. Speaker,involved in any altercate with any bon. member. They can have their point of view and I have mine. I am expressing mine. The bon. member for Placentia West thinks differently,that is okay let him say so. The electorate will treat him whatever-way they think he deserves to be treated when the next election comes. So that is May 1968. Now, Mr. Speaker, I have the newspaper clippings here and I will uot go into ' them all.

The newspaper clippings for the last three years. I mean when you look through them you just wonder. My Heavens can this be so? Is this really what was said three years ago? And what has been said since? Here is November 18, 1967, -Financial Post,a reputable paper,quoting Mr. 7929

July 20 1970 Tape 1321 page 10. Shaheen. "Shahean told "Financial Post" this week the financing for $97 million refinery is all arranged." All arranged, 196 7, the financing." If that was so, we would have saved $58 million and the thing would be there now. Refinery would be there. ~Shaheen told F.P. this week the financing for the $97 million refinery is all arranged:not a word of truth in it. We can look back three years and see that. Not true. November 18, 1967. Oetober~ , ~4, 1968_. this was after the tax exempt status was changed, Mr. Speaker. This is Mr. Roy Fermark, financial expert of Mr. Shaheen.

"While the change:J tax position has adverse long term implications for the pr·oject, there are a number of short term benefits.'' He estimated the depreciation allowance of $100 million, a hundred million dollar refinery, would~give the company a ta~free position of about seven years. The company is not going to pay any taxes now for the first seven or eight years.because of to go accelerated depreciation, it is all going/off to pay the mortg~ge, so it is tax free for about the next seven or eight years,despite this. In addition the project would qualify for five million in Federal area develop- ment grants. MR.

SMALLWOOD: to the eight years or over it is only a postponement. MR.CROSBIE: Exactly. And in addition the project would qualify for five million in Federal area development grants and twelve million dollars for harbour development. Well we never got the five million ADA Grant. October 9, 1969, ·work to date cost $8 million.· Now this is important to remember when I come to the Jacobs Report, because the Jacobs Report says that none of the work done . down at Come by Chance so far is included in the cost of $155 million. A hundred and fifty-five million does not include these costs.

October 9, 1969, the breakdown given in the'tvening Telegram~ I think it waa in the "Newfoundland Gazette''also, of the work done to date. It cost $8 million. Eight Million. So to $155 million you must add eight- Hl.8MA\LW66D; The Gazette" or the"Bulletin·? 7930

July 20 1970 Tape 1321 page 11. MR.CROSBIE: The~ulletin·- So you have to add eight to the hundred and fifty-five million that it is going to cost • . .,W.,rk to date, Oct. 1969, $8 million.~ Well then we were given notice to repay $5 million. Dec. 6, 1969 •Globe and Mail•, Shaheen denies financing trouble:· There is no trouble about financing. Mr. Blake said yesterday between eight and nine million dollars has been spent:, excluding outside the development expenses, sales expenses, in Europe and so on. Some of the five million dollars went to companies in the Shaheen group. Tnat is the interim financing.

When are we going to see the audited report of the five million dollars interim financing? , Auditors were sent down to New York to audit where that five million dollars vas spent. As I understand,they could not find satisfactory records down there, to give us an audit report on it. Has the Government got a satisfactory audit report of where our five million dollars interim financing . went down in NeW York, the Shaheen group. have they got that yet? 7931 I i

July 20, 1970, Tape 1322, Pa~e 1 -- apb ~~~_fRO~: If so, will the Government table it here in the House? $5 million of the money of the Newfoundland public or between four and five million was spent. Auditors were sent from New York to audit the records. They could not find complete enough records. Have they found them? Is there an audited report? What was the four or five spent on? Should we not ask that question ~r. Speaker? Will the Newfoundland public lash us and thrash us if we ask that question? If we dare to ask what happened to four or five million of our money?

Are they going to be angry with us for hanging up the House? That we are delaying in the House? That we are daring to ask questions? Will they turn on us with ferocity,if we ask what has happened to our four or five million? Where is the audited report of what it was spent on? No reply from the Government, I hope we ~et a reply later. Then we get into ' Ottawa is not satisfied with the oil dock expenditure.'' I do not like to mention Mr. Arthur Lang's name in the House,it has such a choleric effect on the Premier. MR.. Sloi.M.Ll.'OOD : Good, good! MR.

CROSBIE: But he has been proven to be one hundred percent accurate ever since January. MR. SMALLWOOD: One hundred percent inaccurate. MR. CROS~IE~- When it was reported from January on,by Mr. Arthur Lang,that Ottawa wanted more information to justify the expenditure for the wharf, he has been proven to be accurate from then on. t~en he said that Ottawa was not satisfied that l-'I. Shaheen was putting enough in the project and when it was said that Newfoundland was not getting enough out of it, time after time, Mr. Arthur Lang has been proven right.

Because he and some others in the Federal Cabinet have taken that position,the Government has had to squeeze out of Mr. Shaheen this reluctant five percent. Don's five percent. Don Jamieson and the Federal Government insisted that Newfoundland must get some kind .of return from this oil refinery for all the credit and money we are putting into it. 79~2 Now, Mr. Don Jamieson, Federal Minister of Transport 1 is not going to come out publicly and say; "I did this.' ' He will do it later on in his autobio11:~aphy.

July 20, 1970, Tape 1322, Page 2 -- apb He cannot do it now while the Hon. the Premier is in office, it would strain relations between Ottawa and St. John's too heavily. It is already quite strained now. I would have liked to have been at Swift Current when Don said:" five percent, five percent,Premier, or you do not get your harbour or your wharf.'' That must have been an interesting day. I imagine the windows boome~·anged down in Swift Current the day that Don said; ''five percent or nothing." And to Mr.

Don Jamieson,Sir, we give our humble thanks for the modest improvement there is in the agreement now before the House. HR. SMALLWOOD: ---- Give it tc Don, give it to anyone but Joey huh? Anyone at all but Joey. MR. CROSBIE: I would even give it to Joey,if he earned it. MR. SMALLWOOD: No, no, no, the hon. gentleman would not. MR. CROSBIE: I would. MR. SMALLWOOD: No, no, not a chance. MR. CROSBIE: Oh Mr. Speaker, ~hen the time comes to write my memoirs •••• MR. SMALLWOOD: Anyone but Joey. MR. CROSBIE: What compliments I am ~oin~ to pay the hon. the Premier.

But while he is in office and a menace to this Province I will not. As long as the bon. the Premier is in office, carrying out this kind of policy,he is a menace to this Province. That is my sincere conviction. MR. SMALLWOOD: My autobiography will be interesting too. MR. SMALLWOOD: I will bet it will be quite a story. MR. CROSBIE: I only hope the bon. Premier has a long enough retirement to write it . MR. SMALLWOOD: Yes, I will. MR. CROSBIE: He should retire now and ensure himself the time. MR. SMAL.!:_WOOD: Never mind, I come from a long, large family. MR.

CROSBIE: I am hoping Sir, that we will have a great tourist ~ttraction here in Newfoundland in the person of the hon. the Premier, ensconced at Roache's Line for at least the next twenty years, but ensconced there privately not in the 7933

July 20, 1970, Tape 1322, Pa~e 3 -- apb office he is in now. MR. SMALLWOOD: ThE bon. gentleman 1 I can assure him, will never live in that house, never. He will never have the right. MR. CROSBIE: The hon. gentleman declines with pride,Sir, the invitation to live in that house, the bon. gentleman has a place at Hogan's Pond that he would live in if he ever became Premier. MR. SHALL WOOD: All future Premiers will live in that house, and that does not include the hon. gentleman. MR. CROSBIE: I will just have to bear with it. I will have to support the heavy burden of never being Premier.

By heavens! how will I ever stand it? MR. Sr"ALL,.JOOD: It will be hard. --- MR. CROSBIE: Yes it will be tragic. I ~11 become Prime Minister. MR. S~ALLWOOD: Everybody knows how hard that will be on the bon. gentleman. MR~C~OSBIE: I will give up the Premiership and become Prime Minister. SOME HON. NEHBERS: Hear, hear. MR. CROSBIE: - - - - - - Now, oh yes, J.R.S. says, Wednesday, March 4,"all obstacles overcome. Oil refinery at Come by Chance. Smallwood attacks and Crosbie quacks.'' •All obstacles overcome~' Well here we are, July 1970, the old obstacles are still there. We are taking the hurdles again.

The Newfoundland people are told that if we do not wang this through this week the deal is off. So, all obstacles were not overcome. MR. St-!ALLWOOD: I did not say the deal was off, I said it might cost us anything from two and one~half to five million dollars extra,from higher interest. MR. CROSBIE: Mr. Speaker, when one looks over the press clippings, it is just fantastic but, of course, everybody does not have press clippings to look over. Oh a Dilly! a Willy! a Joey it is, not a Willy.

Saturday, March 28, 'refinery will cost $20 million less','say;Joe, ··a better deal from the British." Now, how aomething can cost $20 million less and go from $97 million to $155 million, I do not know,Mr. Speaker. It is the Premier's arithmetic, not mine. I always thought that $58 million more than something meant that it was $58 million more, not $20 million less. But Obviously I am not Minister of Economic Development in this Province. HR~S}~~,~~ That is unworthv. even of the hon. aentleman. I •

July 20, 1970, Tape 1322, Pa~e 4 -- apb ~~_f~OSBIE~ The oil refinery expected ready within- yes, March, 27, 1970, 11 Globe and }!ail': " The company that has the contract to build, that has the contract to build the 100,000 barrel a day proposed refinery at Come by Chance, expects $130 million." The company that had the contract to build it expect · $130 million. The contract was for $130 million, now how has it :gotten to $155 million? 'March 27, 1970, expected to be completed in time to qualify for special tax exemptions granted under the Federal Income Tax Act last August ·:, M.P.

Venema, Chairman of the Board and Chief Executive Officer of Universal Oil Products Company of Desplains, Illnois said, " Procon (Great Britain Limited) will design and act as general contractors." They had the contract then,according to their story to the.Globe and Mail~ $130 million refinery. A few days later they were in this House and told us $155 million. AN liON. MB-1BER: Is that ~Arch 1970? ··-- --- ---- MR. CR,OSBIE: March 27 Sir, 1970. A week before •••.••••• AN HON. MEMBER: This year. MR. CROSBIE: Yes, this year, not last year, not next year, not five years ago, this year.

A few days later in this House a $155 million contract and now we are told no contract unless we walk this through this week. "A sixty million dollar refinery in Nova Scotia, no tomorrow if mistake made,'' says Hickman. Quite right. "Oil refinery profits will repay wharf loan." That was a story that five percent of the profits would be paid to Ottawa until the $16 million dock was paid off. MR. SMALLWOOD: And the hon. gentleman kn~fs how much truth there was in that. MR. CROSBIE: Arthur Lang,Sir, has been called a "' stupid jackass " by the Premier of this Province. A Federal, senior, Cabinet Minister ..•.• MR.

S¥.ALLWOOD: Not only by me, oh~ oh! I disclaim that. I share that ••..•.• MR. CROSBIE: Publicly the Premier of this Province called a .. Cabinet ~~inister a "stupid jackass." MR. SMALLt,'OOD: Yes, I share that MR. CROSBIE: There was never anything so discrediting or damaging done to a Province before. MR. SMALLWOOD: That honour I share with an awful lot of others. 7935

July 20, 1970, Tape 1322, Page 5 -- apb MR. SMALLHOOD: I am not the only one. MR. CROSBI~ That may be, that may be, but Mr. Arthur Lang,as a Cabinet Minister in Ottawa,does deserve more respect from the Premier or anyone else in public life, than to call him a stupid jackass publicly. A man this Province has to deal with for public works if for nothing else ••• MR. SMALLHOOD: He builds what he is told by his Government to build, he does not decide what to build. MR. CROSBIE: The bon. the Premier is saying that the Government in Ottawa is like his Government, everyone must do what they are told up in Ottawa. MR.

SMALLWOOD: The Cabinet orders, the Hinister of Public Works builds, yes, Hr. Lang does not decide. MR. CROSBIE: He is a member of the Cabinet that helps decide what the Cabinet and Government is going to do. MR. St-'.ALLWOOD: Yes, indeed. MR. CROSBIE: The Premier said that about him, it is coming back to roost every day. MR. SMALLWOOD: Oh no it is not. MR. CROSBIE: The Newfoundland Government Bulletin, Apd.l 1970, Page 3. I refer the public of Newfoundland because, they have it in their houses. They do not throw it away it is so valuable. Look at your bulletin, April 1970, page 3.

The Premier said . that it was one of the happiest days of his life. It was March 25, 1970, the place was London, England, it was the day and the place for the signing of a $130 million agreement for the oil refinery at Come by Chance. March 25th. was that happy day, $130 million agreement, that nine or ten days later in this House became $155 million. $130 million, it went up to $155 million, where is it going to go from here? Who is supposed to believe all of this mallarkey Mr. Speaker? Does this encourage one to believe in this project? Look at your Bulletins,people of Newfoundland)of April 1970.

Get them in from the outhouse, April 1970, Page 3 and see what this Government ••••.••• MR. S~~LWOOD: That sounds like a St. John's East snob. That sounds just like a St. John's East snob. 7936

July 20, 1970, Tape 1322, Page 6 -- apb MR. CROSBIE: Listen to that, ha, ha, ha. MR. SMALLWOOD: That is what it sounds like. MR. CROSBIE: I have not heard hate mentioned this morning Mr. Speaker MR. SMALLWOOD: Cocktail circuits. MR. CROSBIE: - ----- - No mention of hate at all this morning. MR. SMALLl-700D: ---- --- - No, not hate, just little old snobbery. MR. CROSBIE: Let us get a little old hate going. MR. S'I-!ALL\~OOD : Just a little old snobbery from the cocktail circuit. MR.

CROS~IE: Listen to the international voyageur.That intimate of Krupp, that intimate of industrialists all over the world, and he has to talk about snobbery. We all know,Sir, that in this Province there are still many places where there are outhouses. MR. SMALLl..UOD: Explain now. MR. CROSBIE: Despite the hon. Minister of }lunicipal AffaiTs great water and sewage pTojects, and that is where·the . Newfoundland Bulletin goes. Where it should go,in fact,! am going to put one up myself to put it out there. MR. SMALLWOOD: That would be a pretty sight at Hogan's Pond. MR. CROSBIE: The bon.

Don Jamieson,"the problem with Joe is that he can rationalize a situation so well that he ends up believinp; in it." How accurate that is, how accurate that is, That is what the Premier has done with this Come by Chance Tef:!lnery. He has rationalized it so well he ends up believing it. "I have u .. had my reservations about many of his schemes~ ." say Mr. Jamieson, especially tl e refinery if it does not also generate a petro-chemical complex. But when you are in Newfoundland you have to accept the unconventional. '' MR. SMALLWOOD: Will the bon. gentleman read that •.•••• MR.

CROSBIE: Do we have to accept such unconventionalities as contracts that go from $130 million to $155 million overnight ·: - eontracts that are siJ!:ned one week and unsigned the next week, contracts that are signed in March and not signed in July ~ ~ deals that have no obstacles in March and the House is called back in session in July? Do we have to be so unconventional in Newfoundland? , Po we have to be so unconventional in Newfoundland? Are we to be the butt for everything, to believe everything, be told that because we are in Newfoundland we have to accept

July 20, 1970, Tape 1322 , Page 7 -- apb the unconventional? What do they accept in Basutoland? What do they accept in the Sudan? What do they accept in Managua? MR. SMALLWOOD: Nova Scotia? MR. CROSBIE: In Nova Scotia? - ---- -- MR. ~ALLWOOP~ . Yes, what do they accept there? ~m. CBOSBI~. Oh yes, the hon. Premier is so deli~hted with that heavy water plant. MR. Sr.!ALLHOOD: No, no, I was not referring to the heavy water plant. Would the hon. ~entleman read that sentence again from Mr. Jamieson? MR. CROSBIE: --- ·- - - - I will Sir, in a few minutes. MR. SMALLtolOOD: Please, please read that again. MR. CROSBIE: Now, in the meantime Mr. Speaker, I will send the

article over to the Premier so that he can use it later. MR. SMALLWOOD: The one from Mr. Jamieson, will he read that? MR. CROSBIE: No, I have read that. MR . SMALLl.JOOD: Read it again. MR. CROSBIE: If I read it again I would be tempted to read more from it and that would only get the Premier mad. MR. SMALLWOOD: I will not get angry, read that sentence. I would like to hear the sentence read again. MR. CROSBIE: I will come back to it,if I have the time. MR. SMALLlf.TQOD: About the petro-chemical. MR. CROSBIE: If there is a petro-chemical. MR. Sl-4".ALLWOOD: No, the sentence. MR. CROSBIE: Mr.

Speaker, I would like to oblige the hon. the Premier and I will a little later. Now here is a study. We are considering these amendments.Mr. Speaker, and here is a study done by the Harvard Business School,on Shaheen Natural Resources Company Incorporated in 1968, and it is a very interesting study,done by people who know their business. Page 1, ''Shaheen Natural Resources is a highly leveraged holding operating company which is privately owned and controlled 7938

July 20, 1970, Tape 1322, Page 8 -- apb by John M.Shaheen.• By the way, one of their subsidaries is the Canadian Caribbean Oil Company a holding company with a portfolio of stocks, real estate and mortgages which serves as the chief borrowing vehicle for S.N.R. Now apparently this Canadian Caribbean is now going to supply oil to the Power Commission up here by Holyrood, they are going to supply them with oil now and save up a million dollars a year in the Power. But they are a holding company with stocks, real estate and mortages.

When this was done of course, they were constructing a $30 million anhydrous ammonia plant here. I flew over Come by Chance twice, ten days ago, and I did not see any anhydrous ammonia plant,but they were constructing it according to this study in 1968. MR. SMALLWOOD : Do not be too impatient, the paper mill will come. MR. CROSBIE: Page four of the same study. Hr. Alvin Smith who was in this House as a 1.ritness said this, he discussed the company's goals and strategy; "Our immediate goal is to maximize .our profits with a minimum of investment., . Was ever a truer word said,Sir,by any corporate officer?

"Our immediate goal is to J1UI.Xilllize our profits with a minimum of investment." That is what they have done in this agreement that is before this House. MR. SHALLWOOD: That is very unusual. MR. CROSBIE: Maximize their profits with a minimum of investment, no investment. A very unusual procedure for business men. MR. CROSBIE: A procedure that the Premier has embraced, glorified and enshrined in this legislation and this agreement. MR. SMALLt"OOD: It sounds pretty solemn. MR. CROSBIE: We have to obtain a much higher return than the major in order to undertake a proposed venture.

We look for projects that have fast payouts and that can get five and ten financing,which he explained was eighty percent debt - twenty percent equity. They have the fast payout here Mr. Speaker. Then he goes on to say that they have to ~ that marketing is the important thing for them, they have to control the market, then obtain their financing and begin integrating backwards. 7939 r I

July 20, 1970, Tape 1322, Page 9 -- apb Page five says how the refinery was under construction and scheduled to be completed in March 1970. It says, "F.N.R. was very impressed with the political climate and advantages Newfoundland offered to industries desiring to locate there." in I daresay, because, 1no other political climate would any company ever get the advantages that Shaheen has gotten in the agreement before this Bouse. No where, he could scour the world, he could search her, explore her, and he will never find a deal like he got from this Government.

Specialized refinery - now, page nine, they discuss electric power. "As a result of the Government hydro-electric power developments, electric power is available at two and one-half mills per kilowatt hour, a ,rate which can only be approached .in some areas of the Pacific coast. In the mid-west, electric power costs approximately twenty mills, the Gulf coast, seven mills and so on." They are getting cheap power here.

Page ten, " The majority of the refined products would be marketed in Canada." I have seen that denied since but that is what this report says. -The majority of the remaining refined products,after taking out the jet fuel, will be marketed in Canada. "One of the most favourable aspects of the refinery proposal,was the financing arrangements that were available." Yes, I would think so. They were delighted with the financing arrangements.

Long range plans, " If Shaheen Natural Resources decided to undertake the refinery venture, it would hopefully be followed by the construction of aimilar type petro-chemical process units contiguous to the refinery." ~.:_SROSBIE: "Shaheen would only consider developing the appropriate satelite . plants if an economically attraction existed for each.

This would require so and ao. ~urthermore, the rapid addition of satelite industries would require massive investments of capital." Page eleven, "the management team",the study concludes, "was faced with the decision as to whether this project, the oil refinery project at Come by Chance,met their standards for investment. They felt that conditions were changing so rapidly in the petro-chemical industry that any venture such as the one proposed would have to be a rapid payout." Now listen to this,Mr. Speaker, 7940

July 20, 1970, Tape 1322, Page 10 -- apb A.W.Smith stated; " in this type of induatr,y,where technology changes so rapidly, you cannot afford a twenty year payout. We need our money back within four or five years." This is the oil industry, and this is their statement. ~onditions change so rapidly in any venture,such as our Come by Chance,one.has to have a rapid payout. We need our money back within four or five years." They will have it back long before that, but we will not have it back,Mr. Speake~. We will not have our money back.

Here is what the Shaheen group said; " you must have a rapid payout in the oil industry - in the petro~chemical industry, because of technological changes. We must have our money back in four or five years." ls the Newfoundland Government going to get its money back in four or five years? Not on your life it is not. The first mortgage gets paid off in the first eight years and then they start on our second mortgage, our $30 million, which we do not get back until between the eight and the fifteenth year. MR. SMALL~IDOD: No, no, no that is wrong. MR.~SBI~ We will see if it is wrong when it goes through committee.

We come after the $125 million. Shaheen will have his investment I would say in the first two years, with five point one of the gross sales. They say themselves,in this study, they have to have their money back in four or five years to be safe because of the technological changes - the quickness of the technological changes in the oil industry, and Mr. Homer White, when I saw the feasibility studies the company had prepared itself in the winter of 1968, Mr. Homer White and Mr.

Roy Fermer: came to my home on Circular Road and sat there with myself and Dennis Groom, we were not allowed to have it by ourselves - they sat and watched us,it was so top secret. That evening 7941

July 20th, 1970 MR. CROSJHE: Tape 1323 JM- 1 he told me that the plnnt could be paid out in two and one-half years so I said; ''Why do you want us to have fifteen year bonds'l Why must we leave our money in for fifteen years?" They wanted the use of the money but they said that this refinery could be paid out in two and one-half years. It does not suit them to have us put up our money for two and one half years, they want that left there because they want to haul out everything they can and use it elsewhere,and we are being ask to look on them as Saviours.

The Harvard Business School study shows you what the philosophy is: maximize the profit, minimize the investment. In 1968 the gross sales were estimated at $143. million*they said the gross sales would be a year. Five per-cent of that was going to give them a fee, Mr. Speaker, of $7.5 million the first year, the second year and so on. Whether the refinery makes a cent $143. million was the estimated gross sales in 1968.

They estimated in 1968 that after all debts are repaid,over the fifteen years there would be $515. million profit in that refinery and at the same time they wanted us to give them power at two and one half mills, they wanted their salary costs for construction plus one hundred per-cent, they want all their out-of-pocket expenses, they want everything under the sun and their estimate was $515. million. Now you see at that time there was going to be no corporation tax as this was still supposed to be nontaxables.

That will show you the generosity of the Shaheen group. $515. million they estimated in their pockets:over the fifteen years and they still want it to scuffer us down to two and one-half mill power. '· When I ask them to increase the power, the cost, they said they could not afford.it, the project could not afford it.

Can you imagine a project they thought was going to make them $515. million bucks could not afford to pay this Province cost for its pot-rer'l They estimated $515. million in the fifteen years, a cash flow of $41. odd million a year,after meeting the debt payments,and then they estimated the cost to be $103. million dollars and then they wanted the interim financing, with all of that,they wanted our Government to give them interim financing as they could not arrange it through:the•banks themselves. We have a report from Jacobs Engineering, ~r. Speaker, or we received 7942

July 20th, 1970 Tape 1'323 JM- 2 MR. ~ROSUI.f._ : copies of a letter datecl May 6th, 1970 from Jacobs Enr,ineering Company., tt is supposed to be the independent feasibility study done under the agreemen~ as a . condition precedent under the agreement. The agreement has now been amended. They start out by saying; ''Of necessity the UOP feasibility study contains certain disclaimers of responsibility for items beyond their control or direct knowledge. we find these reasonable. " !~ell when we read this report Jwhat is ·the point of reading it? He are not told what disclaimers are of responsibility for items.

What good is this so called feasibility report to us? Anyone with any intelligence to read this cannot tell whether this project is feasibile or not,from the woraing of it. •we have examined the UOP feasibility report. The UOP designs and Ralph M. Parsons designs and specifications,with detailed checking in some incidents,and checking and re~onable reviews in others: that is all they have done. They say;based on tllis independent analysis,we feel it is technically feasible and economically viable project.

They go on to page (2), "'Procc-n Limited(Great Britain) has entered into a fixed price agreement for the construction of the plant,in accordance with these UOP and RMP designs and specifications." That is what Jacob says yet we hear the Premier on the air saying that,unless this thing is not through the House this week,so they can sign these agreements for construction and financing,the thing is doomed,and here we are told by the feasibility experts that Procon Limited(Great Britain) has entered into a fixed price agreement to construct the plant.

Now how can we place any trust in the Government who make all these ridiculous, contradictory statements? Page (3) they have examined charters as a firm committment for Kuwait etc. crudes, they have examined product sales contracts and there are firm committments for over sixty per-cent of the net liquid products and so on. It is their understandinr, that certain office facilities are going to be shared by the pulp and paper mill,with the refinery. They go on to talk about pollution. ''The facilities proposed meet current standards and are similar to those of many existing refineries. ..

That is reassuring about pollution. That is what Jacob says, ''With specific reference to environmental pro teet ion, that is air and water antipollution measures, the facilities proposed meet current standards and are 7943 I.

I' July 20th, 1970 Tape 1323 JM - 3 MR. CROSBIF.: similar to those of many existing refineries." Not good enough, Mr. Chairman. What is the good of the antipollution controls at Come By Chance being similar to those of many existing refineries,when we notice all over the world the trouble going on with oil spills,and yet they meet current standards. MR •. SMALLHOOD: Would the hon. gentleman yield for a moment? MR.__~~OSBIE: Hell, the hon. Premier can reply. MR. SMALI.WOOD: No, it is not a reply.

On the matter of pollution,the Govern- ment have retained the services of Professor Laird of the University and he is supposed to be one of the world's best authorities on the subject of pollution, to report to us on the paper mill now under construction at Stephenville, the oil refinery to be constructed at Come By Chance and the paper mill at Come By Cha~ce and report to us 7with advice to us,as to what we would need to do to prevent rollotion. "e is now, I think, one of the world's greatest authorities. MR. CROSBIE: That is welcome news, Mr: Speaker.

The gentleman in question is very highly regarded and it is a wise move on the part of the Government. Nm• just to finish the Jacob's study. Paragraph 7;'we understand that Procon has a firm price contract to build the refinery including the plant itself.: · Spare parts inventory, maintenance equipment, initial charge of catalysts and chemicals and financing charges during construction,the fixed price excludes, does not include, excludes the cost of two 6rl5,000 barrel crude tanks, some site preparation and tank foundations and engineering up to this point.~ That is why I say, Mr. Speaker, it is $165. million.

You see it is $155. million but that does not include the two 605,000 barrel tanks down there now, site preparations, tank foundations, engineering to this point. Also, and this could be significant, this price does not include Federal or , rovincial tariffs,if any, All this material is being constructed in England and it does not include any tariff that is going to be charger! on all the equipment manufactured in England. fear of So I say now,without contradiction it is not $155. million, it is not $HiS. million, it is goinr, to end up. Mr. Speaker, I prophesy today,end up a minimum of ~175. million.

If I am right, I will go in the engineering business. You do not even need to be an engineer to prophesy that. It is going to end $175. million minimum, tariffs are not included, what is s_pent ~'944

July 20th, 1970 Tape 1323 JM- 4 MR. CROSBIE: ------- - todate is not included . MR. SHALWOOD: The hon. gentleman is at least as good an engineer as he is a politican. MR. CROSBIE: How good he is a politican remains to be seen. MR. SMALLWOOD: No, no. MR. CROSBIE: It has been seen, eh? What the hon. gentleman implies is that if someone does what he thinks is right for his Province and his conscious, what he believes in, that makes him a poor politican and he is going to get the gears for doing it.

Well, if that is the case I will be quite resigned to being out of politics forever,if I am defeated, I will acce?t that. If to be a politiean means you must not do what you think is right for the Province or the country, if that is what it means,then I would •ooner be out of it, I do not think that is what it means,but we will know whether that i.s what it means or not when the next election comes. AN HON. MEMBER: (Inaudible). MR. CROSBIE: Look, if I made my mind up not to be bothered by the Premier I am not going to b'e bothered by any other member opposite, I am just not going to be bothered by him.

There is another matter I want to mention, in fact what it is, Mr.

Speaker, is ·this I want to move an amendment and the amendment is this: with reference to second reading of a Bill,with the motion that the Bill be now read a second time,I move that all the words after that be struck out and the following be subsituted therefore, '"In the opinion of this House the Government should not proceed with the refinery agreement and the Come By Chance oil refinery project until such time as better terms are secured from Shaheen Natural Resources Incorporated including a provision that the said oil refinery project be participated in by the Government of Newfoundland as a joint venture, that the Government of Newfoundland have at least a fifty per- cent equity interest in the said joint venture so that at least fifty per-cent of the anticipated profits of the oil refinery project accrue to the Province of Newfoundland for the benefit of the people of Newfoundland whose credit is making the entire project possible . . , I move that amendment and seconded by the hon. the Leader of the Opposition. 7945

July 2flth, 11)70 Tape 1323 JM- 5 HR. CROSRIF.: ----------· Row, Mr. Speaker. we do not move the amendment for any purpose of lengthening this debate,and the Government has agreed behind the scenes that they have no objection to my going on dinner hour which would be over our time limit and I can finish hy then certainly. I notice that the hon. gentleman opposite wants a copy. MR.SPEAKER(NOEL):The amendment moved by the hon. member for St. John's West and seconded by the hon.

Leader of the Opposition, with reference to the second reading of Bill No. 94 the refining agreement amendment Act, lq7fl,with reference to the motion that the Bill be now read a second time;that all the words after that be struck out and that the following be substituted therefor: ''In the opinion of this House the Government should not proceed with the refinery agreement and the Come By Chance Oil Refinery project until such time as better terms are secured from Shaheen Natural Resources Incorporated including a provision that the said oil refinery project be participated in by the Govern- ment of Newfoundland as a joint venture with the Government of Newfoundland to have at least a fifty per-cent equity interest in the said joint venture so· that at least fifty per-cent of the anticipated profits of the oil refinery project accrue to the Province of Newfoundland for the benefit of the people of Newfoundland whose credit is making the entire project possible.'' MR.

CROSBIE: Mr. Speaker. with reference to the amendment it explains itself. The amendment asks the House to direct the Government - MR. SPEAKER(NOEL): Order please! It has been questioned that the hon. member for St. John's West now is almost to the limit of the ninety minutes that would be allotted to him in speaking to the motion before the House The question arises as to whether or not the hon. member for St. John's West is not entitled to a further period of time in speaking to the amendment.

I do not know whether it is necessary for me to raise the question,in view of the fact that the bon. member said that he could go on. MR. SMALLWOOD: Mr. Speaker, I think perhaps it might be sound if we were to assume that the hon. gentleman has not yet moved the amendment and that he will do so just before he resumes his seat. I think I may assume that all hon. members in the House would be happy to have him continue his speech and forget 7946

July 20th, !CHO Tape 1323 JM - 6 that he has even mentioned the amendment,which he could do just before he sat down, I believe he intends to go on till lunch time and indeed,if he wanted to go on after lunch I do not think there would be any st·rong objection. However, there is a disposition, I believe, in the House to allow the hon. gentleman to speak,more or less 1 as long as he wishes too. MR. SPEAKER: The Chair takes it then that the House is willing for the hon. member for St. John's lol'est to continue speaking to the motion? MR.

MURPHY: I understood the motion has been moved and now the hon. member is speaking on the amendment, am I right in this, Sir, or not? MR. SPEAKER: I think the Speaker has the right to avoid making any precedent and will allow the bon. member to proceed on the basis that he is speaking on the motion. MR. CROSBIE:All right, Mr. Speaker, I will leave that for the last couple of minutes. I wanted to mention the business of the land, Mr. Speaker, also. The location of the plant, in the original Act that, passed through ·_this House, and the new location now given in the appendix to the amendments before the House,

Schedule part (2), as I see it,are two different parcels of land, Mr. Speaker, and as far as I know the Government has not explained why at this late date the refinery,which started in 1967,is in 1970 having its location changed from the land described in Bill No. 65, the earlier Act of 6~, why the location has now been changed from that land described in that document to other land described now in these amendments? MR. SHALLHOOD: Immediately beside it. MR. CROSBIF.: Yes, but other land ·, MR. S'fALT.h'OOD: Contiguous and with less bother. -r.m.

CROSRIE: The site,as I have heard, I do not know whether it is accurate, the site where for years it had been decided to build this oil refinery has been found to be unsaitable and therefore has to be changed to another site. MR. SMALLI-'OOD: No, no, that is not so. It is more suitable to move it a few yards or hundred feet. MR. CROSBIE: I would like some explanation, Mr. Speaker. HR. Sr-!ALT.I-'OOD: Hell, that is it, that is the explanation.

July 20th, 1970 Tape 1323 JM- 7 MR. CROSBIE: The original site was thousands and thousands and thousands of acres, that was what the original site was. MR. S~LTJJOOD: Not- Thousands and thousands and thousands. MR. CROSBIE: 1,032 acres in this original site. Now this site has to be left, after three years 1 and it has to be moved to another piece of land,with 32,000 acres. Obviously an engineering mistake was made or it appears obvious it was made. his is something else that does not give one any confidence in the project, Mr. Speaker.

How can for years it he pl~nned and in fact two tanks be built, two 600,000 tanks built, and the land described in the 1968 Bill be passed by this House and now.when this Act goes through the House the whole site changed again? It is another demonstration of incompetence or a reason not to have confidence in the promotors that the Government are dealing with. The Premier said, when he was opening the detiate ~, on this Bill, that the law passed in 196R was still the law of the land. Mr. Speaker, that is not the relevant point. The law passed in 1968 is still the law of the land but Mr.

Shaheen did not observe, did not meet his obligations under the law passed in 1968 - MR. SMALLWOOD: Because we stopped him. MR. CROSBIE: The Gover-nment stopped nothing. At May 23rd, 1970 Mr. Shaheen had not met his obligation to this Province and the whole thing was opened up again for renegotiation under the 6~ law,but the Government did not do that, it has not renegotiated any kind of a reasonable settlement. It is a new situation. The law passed in 1968 did not dictate to the Government that in 1970,when Mr.

Shaheen had failed to perform,the Government should not force him to accept a better agreement or get someone else or get someone else to carry out the Come By Chance agreement,better able to do ~o. Mr. Speaker, under these amendments,which we can go into in more detail when they go through Committee,even the · few details, the few obligations that were in the 196R agreement are gone. It is all left for the Lieutenant-Governor in Council, The term of the bond, the condition of !:the bonds, that is all now going to be left up to the Cabinet.

There is no fifteen years, no specification in the a~ree- 79~8 ment at all. How the money is going to be advanced is going to be decided by

July 20th, 1970 Tape 1323 JM - B HR. CROSBIE: ------ the second mortgage. He are not shown the second mortgage. We will never see the second mortgage. Under the old agreement,our money, the $30. million loaned directly by the Newfoundland Government,was to be advanced as the first mortga~e money was advanced, equally. That is what the agreement specifies.so that they would not get all our money first, it would be advanced side by side. Nm.r these amendments do away with that so that our S10. million, Mr.

Speaker, can go and be spent down at Come By Chance before any other money is spent there and we will take the risk of losing it, if anything happens during construction. We do not know what is going to be in the second mortgage. The Govern- has not said what is going to be in the second mortgage, what the conditions are going to be. not a word have they said. Is that reasonable? The Premier said; comparing this to BRINCO, that the Province is 8oing to get eight per- cent off the top from the BRUCO Hydro-electric Development at Churchill Falls- and I have his quotation here direct. MR.

SMALLHOOD: And all other BRINCO developments. MR. CROSBIE: The Premier said that BRlNCO had no assets except what we gav~ them and the Premier intimated that this was the same in this Come By Chance agreement, that it is a similar suitation. ·: '' MR. SMALLHOOD: No, I did not, no I did not. It-is the very opposite. MR. CROSBIE: The Premier, that is how I got this great idea for the five per- cent. MR. SMALLWOOD: Yes, I did say that. MR. CROSBIE: He said, ~I had thought up the eight per-cent of the BRINOO one and why did I? Because BRINCO had no assets except what we gave them." Now all we gave BRINCO, Mr.

Speaker, was the right to develop one of our natural r~sources, the water power at Churc~ill Falls, and BRINCO - MR. SHALLHOOD: A number,· not one, a dozen. MR. CROSBIE: BRINCO has developed it with money rRised by BRINCO. This Province has not guaranteed a cent, it has no money in it, it is not at risk in it and we are getting eight per-cent off the top from BRINCO,when they do it,yet here is Come By Chance, this Province is putting up every cent, every cent of $165., if it goes to $175. every cent of that, if it goes to $1R5 every 7949

July 20th, 1970 MR. CROSBIE: Tnpe 1323 JM - 9 cent of that. We are putting it up, not any of our natural resources. We are not just giving the Shaheen group our natural resources and they develop them with their own money, they are not spending their own money at all. There is no comparison 7950

July 20th. 1970 Tape 1324 PK- 1 MR. CROSBIE: and we are to get five percent. We get eight percent from Brineo,off the top. We have not got a cent into it. We have not guaranteed a ~ent. Yet from Come-by-Chance • where we put in every cent, guarantee every cent, take all the risks, we are going to get five percent,off the top. Mr. Shaheen is going to decide how big the top is. Does that make sense? Should we not at least get half the profits from this deal? We are putting up all the money. Would not that be sensible? It should be a joint venture.

We should have ownership of half - half of everything that is made should come to us. \-'e should be at least half owners. Is that being unreasonable when we are putting up a hundred percent of the moneyt Now granted, Mr. Shaheen has done a lot of work too and promoted it. He got the sales contact in the certain things he is doing. It would not be fair not to ~ay that there are not. I would be quite prepared for one,in a deal like this. to agree to fifty/fifty. Fifty/fifty. It is our money and he has got something to contribute. But not ninety-nine percent to one percent, as this is. That is not reasonable.

The Government has not come before us now with anything reasonable. There is nothing in the legislation , the amendment, Hr. Speaker, nothing that requires the Government to table in this House the agreements, the mortgage and so on. Why not? We have been kept in the dark about this from the start. That is a clause that should be in there. MR. SMALLWOOD: Would the hon. gentleman ":" .. I .tabled one thing. t-lould the hon. gentleman allow me to table three other agreements, now? MR. CROSBIE: Go ahead, Sir. MR. SMALLWOOD: One is the sales agency agreement.

The other one is the ~nagement agreement, and the other one is the construction supervision agr!!ement. MR. CROSBIE: Right! MR. MURPHY: C~pies. please? MR. SMALLt-lOOD: Well the copies will be made by the clerks office. in the normal way. 79;j1

July 20th. 1970 Tape 1324 Pk - 2 MR. CROSBIE: Well there should be a clause in then. Mr. Speaker, we are glad to see these things are tabled, where the Government will be obliged to table it the next session of the House, the first mortgage, the second mortgage and the other agreements, so anybody interested can peruse them. There is a clause like them in the Melville legislation. It should be here in this one also. MR. SMALLWOOD: It has to be registered •••• MR. CROSBIE: We have to remember - another thing that must be remembered, Mr.

Speaker, is this - that no matter how good an agreement is, or what clauses there are in it to protect us, to protect anyone~ these are only effective, if they arein .force, lf there is a party who wants them in force, who will see that they are enforced. Now whatever protection there is in this agreement for Newfoundland, it is of no value to us. if we do not have a Government and a Premier or a Minister of Economic Development who will see that the other side lives up to their obligation.

Now my experience leaves me to prophesy that this will not be done by.the present Government or the present Minister of Economic Development. That this agreement will not be enforced,where we do have some rights, and where we cannot send in auditors and accountants and engineers and the rest of it, where we have to approve the charter tanker rates, ·or where we have to do to prove certain things, that this will not be done with the scrupulous efficiency and ener~·that it should be done with,to protect our interests. Why not? Because the same story will be used by Mr.

Shaheen and his cohorts, as was used in the negotiations leading to this agreement. Whenever anybody asks that the two and a-half mill power be changed so that they pay cost - in to the Premier to tell him that the whole project would founder if that happened. That would go out. Whenever anybody suggested that a quarter of the profits or half of the profits should come to Newfoundland or when I suggested, for example, that Mr. Shaheen should 7952

July 20th. 1970 Tape 1324 PK - 3 MR. CROSBI~: be · obliged to reinvest in Newfoundland a certain proportion of the profits he is going to make from the refinery, when anything like that was suggested, then it was ·to Mr. Shaheen the Premier, to tell him that if these things were done, the whole thing would stop, would fail, would not go through. So the Pre~ier would squash that.

Now when it comes to enforcing this agreement, it is discovered perhaps that charter tanker hire rates are higher than the international tanker market dictates or the sales prices are lower than they should be to enable this project to make a profit,or something else is discovered. And Mr. Shaheen has gotten after, If itis, (The ·old story will come back~ lf you enforce, the whole thing is going to flop. Wham! It will not be enforced. It is one thing, Mr.

Speaker, to have an agreement, but this Government has got no one, has not got the people, have not organized them yet or gotten others, in a unit, whose job it should be, with these agreements, to see that they are carried out and enforced; hard-nosed, that will not be interfered with by the Premier nor anyone else, when they come across people who are not living up to their agreements. That is nor going to be done, but it has to be done. There are a hundred ways, under this agreement, where Mr.

Shaheen can take us to the cleaners, dispite our right to approve this, that or the other, if we do not have competent people watching for us, who will not be stopped,by the Premier nor anyone else, from pointing out that they are violating the agreement. This is another great weakness in this. I do not think my past experience leads me to believe that that will ever be done. You can go right through the Agreement and all those areas that are so important to us. Mr. Shaheen you see, Mr. Speaker, is going to decide what the sale price for these products are. We have no right to check him, He is, his 79~3

July 20th. 1970 Tape 1324 PK - 4 MR. CROSBIE: company is going to decide what it sells for. This is a great omission in this agreement. which I did not realize until the amendments came up. We do not have the right to agree or disagree with the price ~ at which Mr. Shaheen ~ill sell the oil products. Now he can sell the oil products at a loss to the refinery at Come-by-Chance. but still make tremendous money himself because he gets 5.1 percent of the gross. They can sell $150 million of products the first year. The oil refinery can lose millions because they do not get a high enough sales price, hut Mr.

Shaheen will still get his seven and a-half million 1 under the five percent of the gross sales cost. We have no way of checking that. There is nothing in this agreement now that says that we must agree to the sale prices. He has to present sixty percent tak~or-pay contracts - take-or-pay contracts for sixty percent of the production for five years. For the other forty percent we do not know what he is going to sell it for. He can sell it at any price he likes. He can decide whether the refinery at Come-by-Chance will show a profit or not show it. We have no way of checking that - stopping it.

That is a bad oversight. The same with buying the crude ~ the price that he buys the crude at. Mr. Shaheen can manipulate this whole thing to suit himself,under this agreement. and do not fool yourselves about that for one minute, Mr. Speaker. MR. SMALLWOOD: Does the hon. gentleman remember that the crude has been brought,under contract,at a fixed price for ten years to come? MR. CROSBIE: Under the agreement sixty percent of the crude has to be arranged for a five year period. Now it ma~e arranged for ten years, but the bon, the Premier has not explained to this House - given this Bouse any real detail on this.

All we know is what we have seen in the papers occasionally. The hon. the Premier well knows that. Now there is a lot more things that could be said - 7954

July 20th. 1970 Tape 1324 PK - 5 MR. SMALLWOOD: By the way British Petroleum is virtually the British Government. The British Government are guaranteeing the bonds for eight years and the British Government controls British Petroleum,who are supplying the crude oil to Come-by-Chance. It is a pretty good check. MR. CROSBIE: Well, now if I might come to the amendment,just to finish up I think, Mr. Speaker. There is a lot more to be said, but it is better left for the committee, it hafto do with various clauses of these amendments.

The amendment is that,in the opinion of this House,the Government should not proceed with the Refinery Agreement and the oil refinery project until such time as better terms are secured from Shaheen Natural Resources Incorporated, lncluding a provision that the said oil refinery project be participated in by the Government of Newfoundland as a joint venture - with the Government of Newfoundland to have at least a fifty percent equity interest in the said joint venture, so that at least fifty percent of the anticipated profits accure to the Province of Newfoundland for the benefit of the people of Newfoundland whose credit is making the entire project possible.

So the amendment asked, Mr. Speaker, that the House agree that the Government not proceed with this project until the Government gets better terms 1 including an agreement that we participate in the ownership's fifty percent and in fifty percent of the profits. I do not think that anything could be mo~e reasonable. Because ,Mr. Shaheen will not agree to these terms? Jf Mr.

Shaheen will not agree to better terms, and with this Province to receive at least fifty percent of the profits - to be at least fifty percent owners of this facility that we are building with the money of the people of this Province and their credit. If he will not agree to that,then let us get other people to come in on this oil refinery project. There will be others willing to come in that will be more humane, more true friends of NewfoundlandthanMr. Shaheen. Mr. Shaheen has had the right for ten years now to establish a third pulp and paper mill in Newfoundland.

In 1967 he dropped that, because he got the oil refinery 7955 I;

July 20th. 1970 Tape 1324 PK - 6 MR. CROSBIE: concepts and saw that he could make his fortune, make hundreds of millions of dollars,with this oil refinery project that would not be taxable and the rest of it. He forgot the third mill, which,if it ever went and where feasible,would at least be based on our natural resources, and give us a lot more jobs. And went on with this oil refinery and for three years he has had the Premier and the Government hypnotized with this oil refinery from which we are going to get 300 jobs or 400 jobs at the most and tie up a lot of our cre dit.

It has been seven or ten years without getting the third mill. Now he is on the refinery. If he is not willing to give the people of Newfoundland a break in this deal, he is not willing to share the hundreds of millions that may be made - the feasibilty studies are right - with the people of Newfoundland,then we should not do business with them. Do it ourselves or get someone else to take it overJMr. Speaker •.

I think it is an awful pity that so much of the energy of this Government has gone on this oil refinery for the last three years, and not another aspects of economic development in Newfoundland are developing,generally, hypnotized with this refinery,which means little or nothing to Newfoundland unless a petro-chemical industry comes out of it. Unless! There is no assurance that any petro-chemical industry is going to come out of Come-by-Chance. MR. S~~LWOOD: Oh, yes there is. Oh, yes. MR. CROSBIE: No assurance, MR. SMALLWOOD: Oh, yes there is. MR.

CROSBIE: And no assurance that if one does come that the cost benefits are not going to be outrageous,on the cost side, if this Government is not going to give it two and a-half mill power and all the rest of the concessions that the Government are going to give him. MR. SMALLWOOD: I am not giving them any money,,any guarantee, any financial concession of any kind. 79~6

July 20th. 1970 Tape 1324 PK - 7 MR. CROSBIE: Mr. Sl-,aheen will use his best effort to see that there is a petro-chemical industry established, MR. SMALLWOOD: He has already done that. MR. CROSBIE: It is not even required that he use some of the profits from the oil refinery to establish a petro-chemical industry at Come-by­ Chance. Why is there no condition in their saying that at least twenty­ five percent, fifty percent of the profits? Supposing that it stays the same now, we are never to get the profits. Why is there no provision requiring Mr.

Shaheen even to invest back in Newfoundland half the profits he is going to take out of it if it is successful? Would not that have been reasonable? ~You, Mr. Shaheen will have to reinvest in Newfoundland one­ quarter of what the oil refinery makes. You will have to reinvest to Newfoundland•- would that have not been reasonable? All the profits that are going to be made as a result of our investment - would that have not been reasonable? No dice. Mr. Shaheen would not agree. I suggested it to him. He would not agree.

Not even to reinvest in Newfoundland a cent of the money that is going to be made at Come-by-Chance. MR. SMALLWOOD: There is no such agreement in Canada today from coast to coast. MR. CROSBIE: There is no such agreement as this one in Canada, the U.K - MR. SMALLWOOD: Yes, there are. MR. CROSBIE: The U.S. anywhere in the world. Nowhere. MR. S~~LLWOOD: The bon. gentleman is so wrong. Is so wrong on that. MR. CROSBIE: Look at the project, Mr.

Speaker, the one in Manitoba, the pulp and paper mill in Manitoba- anyone who reads ' ~ime Magazine;· and see~ the mess they have got into out in }~itoba,on that $92 million project that, the Government would not tell anyone about. Now the Government that succeeded the Conservative Government in Manitoba is trying to grasp that difficulty. There is nowhere that such a full-faced attempt at robbery baa gone through a House of Assembly, similar to the one contained in the 7957

July 20th. 1970 Tape 1324 PK - 8 MR. CROSBIE: agreement that we are amending here today. The promoter of it, a man who wants to make hundreds of millions, not willing even to agree to reinvest one cent of it back into this Province. We are suppose to praise him highly as a great entrepreneur, a risk-taker. What is an entrepreneur? A man who takes risks. Is there any risks being taken here by Mr. Shaheen? Not at all! No! The only risk is that if the people of Newfoundland gets a chance and change the Government . that something will be done to stop this highway robbery that is going on under this agreement. MR.

SMALLWOOD: Highway robbery is it? That is a new one. MR. CROSBIE: Yes. Ri~ht that is what it is equivalent to. MR. SMALLWOOD: Highway robbery? MR. CROSBIE: Yes that is what it is equivalent to • It is the most rapacious agreement. We have many private group,and the Government that ever came before this House. I mean,after all, Mr.

Speaker, when you consider that the public's money and credit is to finance the whole thing, a hundred percent,and then private people are to come in and manage it, construct it and run it and get all their expenses, plus a hundred percent of the salaries and fees of five percent of the gross sal~ twenty-seven percent of the net, and get it all _back, the indebtedness is paid off, all back for themselves,in fifteen years to own the whole kit and caboodle and will not agree to share the profits, except for this five percent. Don's five percent, forced by the Federal Government.

They fought and they kicked . and they kicked and they fought against that five percent. That is why this was not brought in~ in Harch or April, because Mr. Shaheen kicked like a steer. He did not want to pay this five percent cent on five percent. He fought against that from March to July. That is why thia is coming in July. We all know that, anyone who knows anything.

That is why he fought even 6gainst the five percent forced by Ottawa, but had to give in because Ottawa said,"no wharf without the five percent." We are doing all that for people who will not share the profits with ua, who will not even agree to reinvest a part of those profits back in 7958 t .

July 20th. 1970 Tape 1324 PK - 9 MR. CROSBIE: the Province of Newfoundland, And we are suppose to thank the Government and thank, and thank these great entrepreneurs for that. Yes, we should put up statues to them. They must be laughing. They were laughing here on Friday. They must be laughing up their sleeves at this poor gullible Province . which,because we have tot a heavy unemployment problem, because we need development so badly. It is a sport not only of a historic misfortune, Mr. Speaker, but the sport of historic fortune seekers, that is what we become.

The Province,that was the sport of historic misfortune, is now the sport of historic fortune hunters. That is what we are. Because they think we are down and out, because they think we have got no choice, we have got to accept their terms. The fortune hunters have had a heyday the last few years, because we have got a Province that does not have an Economic Development Department, we have a Province that has a Premier and a Minister of Economic Development, who was so anxious to be able to announce developments tbat they are announced before there are ever any conditions set.

And never did a man use that fact more than Mr. Shaheen, the fact that in 1967 this refinery was announced before there was any agreement entered into. Be knew the:political advantage they gave him - that the Government could not politically stand the embarrassment of it not going abead,once the Premier had announced it. He knew that. They all know that. The Premier's announcement went ahead,before the committee even had those sixteen points agreed with Mr. Shaheen. Then the bargaining starts, and of course, then they know they got you. Then they know they got the politicians.

Then they know the Government has announced it, and the Government cannot politically stand now not to have it go. So they come in and say this cannot go ahead without this, it cannot go ahead ~thout that, it cannot go ahead without the other. And it is politicians who announced the great project have to keep agreeing. So all those demands, no matter how outrageous, what I saw for the two yaara I was there. That is why I got out. 7959

July 20th. 1970 Tape 1324 PK- 10 MR. CROSBIE: Mr. Speaker, looking back on it, I do not know how I lasted so long in it. AN RON. MEMBER: Inaudible. MR. CROSBIE: Well it only matters to me if we can get it changed.

If we can get it changed and get a sensible economic development policy in this Province, a rational one - one of which we share the benefits - one of which things are checked out first before the announcements are made, one which the promoter cannot go in and just take everything and give us nothing 1 cne where the promoters are not going to use our misfortunes against us - our hunger for advancement against us. When that day comes about, if what happend in the last two years results in it thatAwill have been well worth while. It is not that anybody would say, Mr.

Speaker,that the Premier,who heads it,does not have a desire to do what is best for Newfoundland. We know the Government and the Premier do, But the Government and the Premier have lost the capacity to make the kind of decisions that are necessary to really advance the interest of this Province,in my view. They will grasp at anything,without it being properly checked, because it looks like development for Newfoundland or looks like a good thing polit