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March 28, 2018

HOUSE OF ASSEMBLY PROCEEDINGS

Vol. XLVIII No. 6

The

House met at 10 a.m.

MR. SPEAKER (Trimper):

Order, please!

Admit

strangers.

Orders of the Day

MR. SPEAKER:

The hon. the Government House

Leader.

MR. A. PARSONS:

Thank you, Mr. Speaker.

First

from the Order Paper, I would move Motion 9. I would move, pursuant to Standing

Order 8(8), that this House adjourn at 5 p.m. today, Wednesday, March 28 until

Monday, April 16, 2018.

MR. SPEAKER:

Shall the motion carry?

All

those in favour, 'aye.'

SOME HON. MEMBERS:

Aye.

MR. SPEAKER:

All those against, 'nay.'

The

motion is carried.

The hon.

the Government House Leader.

MR. A. PARSONS:

Thank you, Mr. Speaker.

I would

call from the Order Paper, Order 3, third reading of Bill 2.

MR. SPEAKER:

The hon. the Government House

Leader.

MR. A. PARSONS:

Mr. Speaker, I move, seconded

by the Minister of Natural Resources that Bill 2,

An Act To Amend The Electrical

Power Control Act, 1994 And The Public Utilities Act be now read a third time.

MR. SPEAKER:

It is moved and seconded that

the said bill be now read a third time.

Is it

the pleasure of the House to adopt the motion?

All

those in favour, 'aye.'

SOME HON. MEMBERS:

Aye.

MR. SPEAKER:

All those against, 'nay.'

This

motion is carried.

CLERK (Barnes):

A bill,

An Act To Amend The Electrical Power Control Act, 1994 And The Public

Utilities Act. (Bill 2)

MR. SPEAKER:

This bill has now been read a

third time and it is ordered that the bill do pass and its title be as on the

Order Paper.

motion, a bill, “An Act To Amend The Electrical Power Control Act, 1994 And The

Public Utilities Act,” read a third time, ordered passed and its title be as on

the Order Paper. (Bill 2)

MR. SPEAKER:

The hon. the Government House

Leader.

MR. A. PARSONS:

Yes, Mr. Speaker, I would

call Motion 4.

MR. SPEAKER:

Okay. Proceed.

MR. A. PARSONS:

I would move, seconded by the

Minister Responsible for the Status of Women, for leave to introduce a bill

entitled,

An Act To Amend The Status Of Women Advisory Council Act, Bill 4, and

I further move that the said bill be now read a first time.

MR. SPEAKER:

It is moved and seconded that

hon. the Government House Leader shall have leave to introduce a bill entitled,

An Act To Amend The Status Of Women Advisory Council Act, Bill 4, and that the

said bill be now read a first time.

Is it

the pleasure of the House to adopt the motion?

All

those in favour, 'aye.'

SOME HON. MEMBERS:

Aye.

MR. SPEAKER:

All those against, 'nay.'

The

motion is carried.

Motion,

the hon. the Minister Responsible for the Status of Women to introduce a bill,

“An Act To Amend The Status Of Women Advisory Council Act.” (Bill 4)

CLERK:

A bill,

An Act To Amend The Status Of Women Advisory Council Act. (Bill 4)

MR. SPEAKER:

This bill has now been read a

first time.

When

shall the said bill be read a second time?

MR. A. PARSONS:

Tomorrow.

MR. SPEAKER:

Tomorrow.

motion, Bill 4 read a first time, ordered read a second time on tomorrow.

MR. SPEAKER:

The hon. the Government House

Leader.

MR. A. PARSONS:

Mr. Speaker, I call Motion 5.

I would

move, seconded by the Minister Responsible for Natural Resources, for leave to

introduce a bill entitled,

An Act To Amend The Pension Benefits Act, 1997, Bill

5, and I further move that the said bill be now read a

first time.

MR. SPEAKER:

It is moved and seconded that

the hon. the Government House Leader shall have leave to introduce a bill

entitled,

An Act To Amend The Pension Benefits Act, 1997, Bill 5, and that the

said bill be now read a first time.

Is it

the pleasure of the House to adopt the motion?

All

those in favour, 'aye.'

SOME HON. MEMBERS:

Aye.

MR. SPEAKER:

All those against, 'nay.'

The

motion is carried.

Motion,

the hon. the Minister of Service NL to introduce a bill, “An Act To Amend The

Pension Benefits Act, 1997.” (Bill 5)

CLERK:

A bill,

An Act To Amend The Pension Benefits Act, 1997. (Bill 5)

MR. SPEAKER:

This bill has now been read a

first time.

When

shall the said bill be read a second time?

MR. A. PARSONS:

Tomorrow.

MR. SPEAKER:

Tomorrow.

motion, Bill 5 read a first time, ordered read a second time on tomorrow.

MR. SPEAKER:

The hon. the Government House

Leader.

MR. A. PARSONS:

Yes, Mr. Speaker, I call from

the Order Paper Motion 1, the Budget Speech.

MR. SPEAKER:

The hon. the Opposition House

Leader.

SOME HON. MEMBERS:

Hear, hear!

MR. HUTCHINGS:

Thank you, Mr. Speaker.

It's a

privilege to rise today to respond to the budget presented yesterday. This is

the third budget of the current administration in their mandate after being

elected in the fall of 2015.

The

budget presented this year was presented by a new Minister of Finance, new in

terms of the executive and the government on the other side. The first two were

presented by the prior Finance Minister, and I'm looking forward today to

sharing some commentary on what we heard yesterday.

In any

government's mandate there's a period they lay out, depending on the fiscal

situation, what that is and what they find themselves in over a longer period,

even longer than the four-year mandate. I guess what this administration has

done and often references is a seven-year period that they look at and out to

2022-2023 in regard to where we're going with the current deficit, where we're

going with a surplus and when we get back to a balanced budget.

There

was a lot of discussion yesterday and in past years on getting there. Is it

realistic what government has laid out and what the Minister of Finance laid out

yesterday? I would suggest as I go through this morning and make some comments,

I'm not sure whether that plan is realistic. I think there's some

acknowledgement of that specifically, and I'll talk about it later.

Some of

the reviews that were done by the Auditor General, specifically in 2017 in

regard to that seven-year plan and getting to where we needed to get based on

what they have laid out of 2022-23, if based on economic conditions whether it's

reasonable to think we would get there and achieve what's been laid out.

We've

had in this province tremendous wealth and royalties from our oil and gas

reserves over the past decade. There has been dramatic reduction in those, in

the barrel of oil over the past couple of years, certainly seen by Alberta and

Saskatchewan as well, oil producing provinces in our country. That has had

significant effect in the economies of Alberta, Saskatchewan and here in

Newfoundland and Labrador.

It was

interesting, in prior years we heard some of the Members of the Opposition, when

they were in Opposition, talk about we were addicted to oil, we were too

dependent on oil; yet, all the forecasts and some of the information they're

using now to project where they want to get in 2022 is literally all based on

oil projections, what the cost of oil will be, what our production rate will be.

It's tied directly to the overall deficit reduction.

The

minister talked yesterday about oil projections using 11 forecasters that

provide technical advice in regard to what they're seeing on the world stage in

where this is going, what the cost is going to be. It's pretty well the same 11

companies we had used as well.

What

they do is they try and give the best projections they possibly can in what's

happening geopolitically around the world, what's happening in regard to OPEC,

those producers now. There are some large producers that are outside of OPEC

that have significant influence now on world oil prices.

You look

at, as well, countries like Russia and the amount of oil they're producing. You

look at the United States and the new direction they've taken in regard to, not

only to become self-sufficient in oil production but also looking to export,

which is a new phenomenon for the United States because it was always about

being self-sufficient. If you need to look at how they've changed the outlook is

they want to be an exporter with shale oil and gas and the production of that;

especially, they've been doing it for 60 years in North and South Dakoda.

The

expansion of that into the US allows them to be a bigger international player in

the oil and gas scene where now they become – and the agenda is not only to be

self-sufficient in the US, but to be a player and exporter in the world and be a

player in that overall market for oil and gas. Which, again, brings some

uncertainty and looks at the stability in how that would function in the world,

and getting back to those 11 companies that try and project where oil is going

to go and what a barrel of oil is going to be.

There

are more factors today, I think, involved in that determination to try and

identify where that stability is and how it's going to function in years and

decades ahead. So it's complex. We recognize that in terms of identifying the

barrel of oil, but my point being is that this administration was critical in

the past of us and how we used oil in generating wealth for the province.

The

reality is we have some of the greatest reserves yet untapped in our oil and

gas, in regard to what's offshore here on the Island and certainly offshore in

Labrador. So all of that I think, and I think it's agreed, bodes well for our

future in regard to those resources and what's available as we go forward.

Oil is a

big part of our economy. It will continue to be. We all talk about diversifying

our economy and making sure we can draw wealth from various areas of our

economy.

As we go

through – and we'll talk this morning about other areas – certainly our fishery

has traditionally been a huge part of why we settled here originally over 500

years ago in harbours and coves in Newfoundland and Labrador and how that drove

our economic activity, and still do today. While we're having some challenges,

when we look at last year and the amount landed, there are concerns because

aquaculture has been reduced in regard to the amount landed.

When you

look at the value, that's because of the prices and those sorts of things, the

landed value has increased but the real concern is that the amount that has been

landed has continued to decrease. That's from various species whether it's

shrimp, crab, groundfish, capelin. We look at now what the issue is in regard to

capelin, capelin stocks and the role that plays in their ecosystem. There's even

some discussion about whether we should look at banning a capelin fishery in

regard to the role that plays in the ecosystem of our fishing industry.

If you

go back and look at years ago in Iceland, what happened there when they saw the

downturn in their groundfish and their fishing industry, they basically

determined they were going to close down the capelin fishery. Basically from the

perspective, as I said, that was the major feed of the ecosystem and, based on

that, they did that and rebuilt their fishery.

We know

where the federal fishery policy comes from; it comes from Ottawa. We can debate

that in terms of how that benefited us since 1949 in terms of having input into

our fishery. I'll talk about that too as I go through and the financial side of

that and what it means for Newfoundland and Labrador.

There

has been discussion as well in joint management of that fishery in regard to

what we can do in terms of having a say. Because as I said, it's a centralized

fisheries policy now, it comes out of Ottawa, very little input in regard to the

Province of Newfoundland and Labrador having input and making sure the best

interest of Newfoundland and Labrador – in some cases, the best interest of

Atlantic Canada is looked at. A lot of the quotas in Eastern Canada are part of

an Atlantic Canada quota and the fish management plan is reflective of that, but

one of the things that are certainly discussed in the past is a similar example:

the Canada-Newfoundland and Labrador Offshore Petroleum Board.

That

could be established and was established through the Atlantic Accord, which came

about in 1985, to allow shared jurisdiction, shared control, shared regulatory

framework to drive that industry for the best interest of Newfoundlanders and

Labradorians in conjunction with the federal government and with Canada. But we

have right here, established in the province, the C-NLOPB, which is shared

partnership, shared jurisdiction and regulatory control. We have equal

representation on the board, equal representation from the administration point

of that body. Why couldn't we replicate something like that for the fishery of

Newfoundland and Labrador?

I know

in mandate letters, in the minister across the way, that has been part of it in

terms of shared jurisdiction. I guess if you look at just what transpired very

recently in the past three to four weeks in regard to a decision on surf clams

and how that decision came about, what transpired and then, at the end of the

day, it was just an arbitrary decision made by a federal minister in Ottawa that

we're reducing a quota by 25 per cent, which is very important to a place like

Grand Bank – certainly, Clearwater, a company out of Nova Scotia, and others.

Because some time ago, I think there were four or five licences that were part

of that industry and, through a process, they came out and they were combined by

others.

SOME HON. MEMBERS:

Oh, oh!

MR. SPEAKER:

Order, please!

I'm

having difficulty hearing the speaker.

MR. HUTCHINGS:

Thank you, Mr. Speaker.

So those

quotas did exist and they consolidated. I think there are two now with

Clearwater. They continue to drive the industry.

That's

great, but up to 2015-2016, I believe, and prior to that, there was only about

50 per cent of the surf clam quota that was taken in any given year. In 2016,

that was maximized. But the point being there are opportunities for others

within that fishery. When you look at the various species that are under that

quota, it's not only surf clams, there are a a whole other range of species that

are there that could be used and should be used to expand the fishery right here

in Newfoundland and Labrador.

That

gets to the point of the joint management or a formalized process where the

regulatory framework and the control of that are shared with Newfoundland and

Labrador, so we do have an actual say and how that fishery is done and laid out.

The federal government has decided that through our Aboriginal groups and some

of the things over our history, a reconciliation process, which is very

understandable, but have determined that this industry is a way to deal with

that. I guess that's a public policy decision, but over and above that the

reality is there are a lot of companies in Newfoundland and Labrador and in

Atlantic Canada that would like to see access to that industry.

They

talked about a monopoly and reducing a monopoly. Well, there's no new operator

that's allowed to enter, based on the decision that's been made. So the point is

why not open up that industry, open it up to new operators –

SOME HON. MEMBERS:

Oh, oh!

MR. SPEAKER:

Order, please!

Can I

ask the Members, if they wouldn't mind, to please take their conversations

outside? It is really difficult to hear the Opposition House Leader.

Thank

you.

Please

continue.

MR. HUTCHINGS:

Thank you, Mr. Speaker.

So from

a fisheries policy point of view and how important it is to our economy,

certainly to a budget that we heard yesterday and some of the things we've seen

in regard to landings being down this year and last, that's a concern.

The

answer to – we need to expand that range and access of other species. Just as an

example of what's happened in the last number of weeks, surf clams and those

types of species are an option that we don't seem to be pursuing, or it's not in

the direct benefit of Newfoundlanders and Labradorians and the industry here in

Newfoundland and Labrador.

That's

certainly an important industry for us, the oil and gas sector, the fishery. We

look at our traditional forestry industry and what's been – certainly on the

West Coast and Central Newfoundland, it's been a tremendous driver of the

economy. Not only something like the mill in Corner Brook, and I think it's 500

or 600 people now that are employed there, but it's the spinoff from that and

the many people who are involved with that industry, whether it's harvesters,

whether it's those small companies, whether it's the other sawmills. All of that

provides employment to Newfoundland and Labrador.

When you

look at that side of it, and some of the challenges in what's happened with the

production of newsprint over the past decades and the reduced newsprint

production, or newsprint use in the world, and especially in North America, has

significantly affected various other paper mills we had in the province. We know

what happened with those. Right now we have Corner Brook.

When you

look at some of the directions that have been taken in the US in regard to

tariffs and the renegotiating of NAFTA, and some of the challenges that's posing

for us from an economic point of view, it's extremely challenging. That's why we

need strong leadership in dealing with that.

Last

summer, we knew the administration in the United States was looking at some

tariffs based on the renegotiation of NAFTA, and two direct tariffs actually.

One was announced in early January, a countervail tariff. Then just recently, an

anti-dumping tariff. Collectively, I think the range for that tariff was

somewhere around 30 per cent.

So you

can imagine; you're sending a product into the United States and there's a 30

per cent over and above your operations today. I don't know how many companies

out there, big corporations even, that have a margin of 30 per cent that they

can soak up and all of a sudden still be competitive and still be productive in

putting things into a certain market.

We've

seen very little action on the other side in dealing with this. The Leader of

the Opposition has asked a number of questions over the past number of months

in, how do we deal with this and how do we make sure we're being heard in regard

to dealing with this? Again, it's very important in regard to our economy and

the budget and how we generate wealth.

Part of

the budget that was talked about yesterday is getting to a balanced budget in

2022-23. We have a major megaproject. Muskrat Falls is coming to an end in the

next while. Over 4,000 people are employed with that. A tremendous amount of

people are drawing a salary from that that is driving the economy. We look at

the businesses that are tied to that and all of that. That's coming to an end.

When you

look at those industries and some of the ones I talked about and outside of

that, what's government doing to create that environment? I say create that

environment because fundamentally governments don't create jobs. They create the

environment where investors want to invest, where there's an environment, a

taxation system where young families want to stay and raise their families and

contribute to their communities and pay taxes and build communities in those

regions. That's government's role, to create that environment.

High

taxation, disincentives to stay here, especially in difficult times or financial

challenges is problematic. We need to get to the point – I think when you look

at some of the indicators in the budget, the economic indicators are not going

in the right direction. When you look at things like population; population

growth is not going in the right direction.

immigration strategy, that's good, but you need people who are staying here or

living here today to stay, and you need people you are trying to attract to come

and live here, you need to demonstrate to them there's an environment here that

they would want to come and financially and socially and other reasons –

financially is one that the standard of living, the cost of living is equivalent

to other jurisdictions and we're competitive. That's something government really

needs to continue to look at. This budget, I don't think, reflects that. It

doesn't look at people's incentive to stay or people's incentive to come and why

they would want to be here, because that's important.

We know

where our demographics are going. We know we have an aging population. One of

the fastest aging populations in Canada based on province to province to

territory. Without that incentive and without that influx of new people, it's

certainly challenging to us and challenging for our economy as we move forward.

mentioned the forestry, that's certainly one that when we look at the tariffs

and the challenges we have, we need to continue to grow that and continue to be

strong to the federal government, to make sure the International Trade minister

and the folks up there are fully cognizant of the issues of concern.

I think

there was a MP from BC asked a question to the minister of trade in the current

Liberal government in Ottawa. I think when she responded, she didn't even

reference Corner Brook or reference the challenges faced here in Newfoundland

and Labrador related to that.

I know

there was an issue that came up in regard to the NAFTA negotiations and the

rules – or I think it was in regard to steel and the tariff that would go on

steel that goes into the US. I know the prime minister went to a couple of steel

plants in Ontario and was supportive of the workers and told them we're there

for you and we're going to work hard. When this challenge hit Corner Brook, we

had no visible display of support from the federal government or from the prime

minister in regard to that issue which is, in and of itself, concerning.

So as we

look for those industries to drive the economy, which we hadn't seen in the

budget yesterday a plan to do it, the issue of NAFTA and continuing to drive our

economy, how that may be a disincentive for many of the activities in our

economy as we move forward, when we look at the economic indicators, they're

again a huge concern as we move forward.

We look

to new Crown land, what that's going to do to drive agriculture, but yesterday

in the budget there was no reference to what the success has been, what the

return has been, how many new farming entities have been established, how many

new farmers. None of that was identified yesterday to give us an indication of

where the economic growth is coming from to reach targets that are laid out for

2022-2023.

Referring back to the NAFTA negotiations, there is some concern in regard to the

issue of rules of origin around the automobile sector. It was an issue that was

brought up in NAFTA negotiations and how there was huge concerns about parts

that were made in Canada, often have two or three trips back and forth across

the border to build that car, wherever it's built, whether it build in Canada or

built in the US. That, through past discussion with the federal government and

the US, has been taken off the table. The interest now or discussion now is:

Okay, if that was taken off, what are the repercussions of that? What was given

up?

One of

the things that have been talked about in the agriculture and other sectors is

related to supply management. Was Canada willing to or would entertain any move

in supply management in regard to offsetting what they're talking about in

regard to rules of origin? So would they look at that?

That's a

huge concern in the agricultural industry and where it's going. So that's

something, again, we need strong representation from the province here and

certainly from the federal government as we move forward with that particular ….

Those

industries that I've just referenced, the IT sector continues to need growth.

Tourism has had success in the past decade. I know we started a process of

putting well in excess of $10 million into our advertising and marketing in

Newfoundland and Labrador. Some of the companies that were involved with that

were internationally recognized for the commercials and the marketing program

they had, and numerous awards. That spurred on, I think, the start of something

exceptional for Newfoundland and Labrador.

We're

continuing to see growth in the tourism sector, which is indeed positive. I

certainly acknowledge on the other side that they've continued that significant

investment, which they should, and continue to promote this Province of

Newfoundland and Labrador as a place to come and spend. I know last year, if I

remember correctly, non-resident visitors were up, which is certainly good.

Because that means there's new dollars coming to the province. We're not

circulating the same dollars in the economy. We have new money coming in from

outside.

We look

at some of our airports. Torbay comes to mind, and Deer Lake, in regard to the

amount of people that are coming through. That all drives the industry and

drives particular activities here in the Province.

On the

tourism side – again, from my particular area and where I represent, from the

Goulds area to St. Shott's – it's huge and has been significant in regard to the

amount of investment and what happens in the tourism industry. We have a number

of operators, small businesses. Whether it's the service sector, whether it's

B&B. We have non-profit groups that provide tremendous environments for visitors

to come.

We have

the Colony of Avalon, to name a few. We have the UNESCO designation in Portugal

Cove South, Cape Race-Portugal Cove South Heritage Inc. All of those groups –

and that's only a couple. There are many throughout the area that provide

tremendous benefits for the industry, and that's right around the Irish Loop.

That's enormous, significant, in what transpires and how you drive it.

The

other day I did a Member's statement on the Edge of Avalon in Trepassey, the

Edge of Avalon Inn. Some of the things – just an example of an entrepreneur who

revitalized the hotel in Trepassey, Carol Ann and John Devereaux. That's where

entrepreneurs were – there was an opportunity there with some of the traffic

we're seeing from the UNESCO site in Portugal Cove South, the new designation in

Through

that, there were entrepreneurs who took the risk, were assisted by government

and – were assisted, but then they took the risk to drive those initiatives that

were important to those. So I think that's very clear, that where an opportunity

exists and you create that environment, entrepreneurs, with encouragement,

hopefully will take that risk and drive economic opportunity.

We've

had some challenges on the UNESCO piece in regard to investments on the other

side in that provincial designation as a World Heritage Site. I don't believe,

and I haven't seen it in the budget, but I certainly look forward to seeing

details, if there is any new money to assist with the UNESCO site in Portugal

Cove South. With those great volunteers up there that run a board which has been

in place, various names and so forth, but the volunteers have been – to get it

to the point of it got listed on the UNESCO list, a lot of work done.

supported that as a government in getting the dossier and all the documentation

and everything done to make sure it could get reviewed. It did get reviewed in

Turkey in 2016 through the normal process, United Nations, when they meet to

consider those applicants and those that are on the list. Luckily enough, it was

given that designation. It was an exciting time, and great appreciation to all

those who were involved with that.

With

that comes a management plan and that management plan for UNESCO designation is

to make sure the plan and the details of it are met because your designation is

tied to that. With that comes a need for an input of dollars because this

designation is a provincial designation in regard to World Heritage Sites. The

rest in the province are with the federal government or with Parks Canada, but

this is the first that's provincially designated a UNESCO site.

It's a

World Heritage Site, and obviously the world comes and the world recognizes

that. But to the best of my knowledge it hasn't been demonstrated – there has

been no new money invested by this current government in a provincial designated

UNESCO site. This year in the budget, I haven't seen it, but I'd hope there

would be. Last year I know there was a meeting with the then minister in regard

to that site. There was an ask for, I think, $75,000 to try to help in regard to

the administration of the site.

there's an

interpretation site in Portugal Cove South that had been built

through cost sharing over the past number of years. That's operated by

volunteers. That serves not only Mistaken Point, but Cape Race and all the

visitors that go out to these two entities.

I think

last year the numbers continued to grow. There may be somewhere between 8,000

and 10,000 people visited that site and would have went to Mistaken Point or

seen the fossils and the replicas of them in the

interpretation site would have

had that experience – not go on site but had it within the building and/or went

out to Cape Race and seen the Myrick communication station out there which would

have been –

AN HON. MEMBER:

(Inaudible.)

MR. HUTCHINGS:

Yes, indeed, it is lovely.

It would

have been the first site for the Titanic

and that tragedy; the SOS would have been received at Cape Race and at the

Myrick communication site.

That's

all part of growing that cluster of activities in the area so you can bring

people in, you can see economic development but, in that case, we need

government support and it's been rare to find over the past little while in

regard to funding that which is a provincial, as I said, UNESCO heritage site.

Hopefully, in this budget, there's some help for those volunteers. At this point

now, it's even gone to the point where they're selling tickets and things like

that to operate the

interpretation site and this is a World Heritage Site that's

here in Newfoundland and Labrador provincially. In terms of driving tourism and

the other side talks about economic development, it's a prime example of how an

opportunity can be built be on, but it needs support and I hope in the days

ahead we'll be hearing about where that support is coming from.

That's

just a particular example of tourism and what it means to the economy in

Newfoundland and Labrador and how it's another area that we continue to grow and

continue to make better the opportunities we have here in Newfoundland and

Labrador.

My point

in picking out some of those industries that I've talked about, whether it's the

oil and gas sector, whether it's the fishery, whether it's the forestry,

tourism, IT, the other industries, all of those – the mining sector, we've seen,

over the past decade, some improvements in the mining sector. The commodity

market is volatile as well in natural resources in the mining sector, but we've

seen some promising finds, the Baie Verte Peninsula; you look about gold and

some of the things that have happened out there in the building of that out

there has been very positive in terms of our province and an economic driver in

that particular region as well.

Unfortunately, when you look at Voisey's Bay and the underground mine, we've

been asking for two years now what's happening there. There was a commitment

made to go underground, which would be huge in terms of the construction of

that. I think it was about 400 jobs for construction and then a couple of

hundred after in terms of operations. But that again, when you look at the

economic indicators we have and where they're going, in the wrong direction, we

need this opportunity and we need these opportunities to evolve and to kick in

so we can start to have those contributors to our economy which are so

important. Again, we've heard nothing on that.

There is

an agreement in place, there are commitments made and they should be held

accountable. We should be able to deal with that. The government on the other

side doesn't seem to want to do to deal with it.

Cobalt,

as a commodity, has increased in regard to its value worldwide, and my

understanding is that it's used in batteries. When you look at some of the

transitions that's going on in regard to getting off fossil fuel and building

batteries for vehicles and those types of things, it's well needed in this

particular time.

The

derivative from iron ore, my understanding is cobalt and that provides a huge

opportunity in regard to the underground mine and what we can do. It's not only

iron ore, but it can certainly be an advantage to marketing and making it

profitable. Yet, we're hearing nothing in regard to why this is not moving

forward, which is a concern.

There's

an opportunity there and I certainly wish government would get on and push that

opportunity to make sure we can continue to drive the economy. As I said

yesterday in the budget, while there was a forecast made in how we're going to

drive new opportunity in the economy, where it's coming from, what industry, the

details on that were scarce, as they would say. There was a reporter who would

say: Details are scanty. Yes, details were very scanty in regard to how we're

going to do that. It's great to put out forecasts, we're going to hit targets,

but you have to do the backfilling of information of how we're going to hit

that, and certainly that was lacking in what we heard yesterday.

Mr.

Speaker, mining, as I said, is one of those sectors that I talked about and how

it continues to grow the economy and it's important to us. That gets to the

indicators that we need in our economy to drive wealth and drive taxation and

all those things that we get to make Newfoundland and Labrador a place you want

to live and you want to raise your family. We need to increase our population,

as well, from the immigration point that I talked about earlier when I started

related to that.

Mr.

Speaker, I want to talk about – this is the third budget of this particular

government. I think it's important to look back and see what the original

direction was in the first year of the mandate, what were some of things

discussed and how the particular administration, in their mandate, was going to

deal with some of the issues that they were faced with. In starting out, I

talked about industry and what's important to Newfoundland and Labrador – and

there are others as well – and I tied that to the economic indicators that I

think, if anybody out there wanted to look, it's on page 13 of the

Budget 2018 – The Economy and it lists the various indicators in terms of

the economy, retail sales, housing starts, all of those indicators that allows

the economy to grow and returns dollars back to the economy.

industry doesn't grow and we're not supporting industry and we're not creating

that environment and that competitive environment dealing with other provinces,

that's a concern. That's what we think is lacking in this budget in regard to

that clear picture of where we're moving.

We went

back to the first budget in 2017 and the speech from the minister at that time –

a different minister than the one who gave the speech yesterday – there were

conversations about tough fiscal economic times; we could understand that. There

was talk about an evidence-based approach to projects, to programs, to services

and how they're supported.

Then it

went on; there was talk about bankruptcy and all those kinds of things but the

Premier said – and I agree, I don't think we're in a position where bankruptcy

is something when you look at the resources and everything else we have in this

province and we look at equity that we currently own, all of those things. I

think that's not where we need to be in regard to a province and looking

forward. We need to recognize there are challenges, but we need to talk about

and support all of those things that are available to Newfoundlanders and

Labradorians. Some of those industries I've talked about hold great potential. I

think it's important that we talk about that and, as I said, deal with the

challenges in a clear and concise path that we can lay out. Yet, let's stand up

as Newfoundlanders and Labradorians, as we always have done, to say we can make

our way through when there are huge opportunities that exist for us.

There

was also talk in the 2017 budget from the minister at the time, making hard

choices and asking taxpayers to dig deep into their pockets so we can close the

gap between our revenue and costs. I guess everybody would say they're still

digging deep into our pockets – everybody's pockets. We saw a little relief

yesterday in regard to some of the insurance costs, particularly related just to

automotive. All other insurance costs would stay. I think it's a 2 per cent

reduction of the 15 over the next number of years that would reduce it down to

10 per cent, if I remember correctly.

The

minister, at the time, talked about we were on a path to gain control of our

finances and strike the balance between better spending controls and valuable

investments in communities, people and the economy. Well, some would argue,

based on what we heard yesterday, and as I said earlier in regard to a path they

had laid out to 2022-23, we're not sure whether that's been realized. When you

look at some fundamental numbers in regard to program expenditures, overall debt

expenses, we were criticized for spending over and above in budgets. Yet, when

you go back and look at the program debt and total expenses for the three

budgets that we're talking about here, this government has continued to allow

those to grow.

So you

can't have it both ways. Either someone overspent and they shouldn't have, but

now you're going to bring in budgets that continues and don't make the necessary

changes in the expenditures to allow you to reach your goals. This is a pattern.

We've certainly seen it here and we've also seen it in the federal government in

Ottawa. In that first lead up, I guess, in that campaign and in 2015, the

current administration in Ottawa said they were going to run a $10 billion

deficit. At the end of the day, I think it came up to about $18 billion. Again,

this year, I think they're forecasting a deficit of $28 billion. So it seems

like we're copying what's happening in Ottawa. There's no indication of

reduction. At least here there's a plan, but I don't think they're going to

reach it, of 2022 of a balanced budget.

Ottawa

is saying they haven't even set a target to balance the books. Most economists

out there say with status quo, it might be 2045 and we might get there, but

that's highly unlikely because usually there's a recession or a slowdown in the

economy every so many years. So that's not factored in.

When we

look at the pattern here of expenditures and getting things in line, the current

format of the current administration in regard to getting there is not reflected

and certainly their plan cannot be achieved with numbers that we've seen in the

first three budgets.

So if we

look back again in 2017 in regard to how this was all set up and what we were

going to do, if you remember back then, as well, there was discussion about

future supplementary budgets. There was a budget given early in the first year

of the mandate. The first part of that, to deal with some of the fiscal

challenges, was we were going to have revenue generation. There were 300 fees

that were either increased or added that provided, if I can remember, maybe over

$900 million in new revenues, but the caveat to that was that later in the year

we were going to have supplementary budgets to deal with the expense side of the

ledger.

Lo and

behold, we never got to those preliminary budgets related to the expenditure

component. Now, we're not sure why because we asked here in the House many

times, what about the other side of the ledger? Why didn't we deal with that? To

date, we haven't heard that explanation.

We moved

on from the revenue side, and the revenue side continued to roll in last year's

budget with the continuation of the taxation that was brought in. As well, this

year, which I mentioned earlier, a very limited reduction in the taxation that

was brought in in the past two budgets.

Now, an

interesting comment in the 2017 budget, the first year of the mandate of this

particular government, “… tax increases must be balanced with tax

competitiveness.” They talked about doing an independent review of the tax

system. I'm not sure where that is or what's transpired. I don't think there was

a lot of reference to it yesterday.

When you

have some of the highest taxation levels in the country, it's pretty ironic that

in the third year of your term you're doing a taxation review to see, I guess,

to get some feedback on how you should handle taxation policy; yet, at the same

time, the current taxation policy that's being implemented is basically

negatively affecting your economy and making you uncompetitive with the other

jurisdictions across the country.

The

other issue that has come up, and doesn't seem to be talked about a lot and

wasn't mentioned yesterday. There seems to be a discussion that there's no new

taxes. Well, we have a carbon tax coming which is pushed on us by the federal

government. If we go back, and I'll speak to it a little later about some

initiatives we did in this House a while back in regard to the carbon tax and

what it is.

People

out there should not be confused with the fact that there's no new taxes. That's

a huge tax. Right now we have no idea how it's being implemented. There was no

indication of it yesterday in the budget, and it's really going to affect

directly every Newfoundlander and Labradorian.

When you

look at the gas tax that was put on, and it has started to be rolled back.

There's some indication that the last 4 or 5 per cent that was put on will be

used, will come off at some point. Maybe this year it will be announced some

time, and we'll put four or five cents back on and that will be the carbon tax.

Well, that's going to hit every Newfoundlander and Labradorian. If it's gasoline

tax, obviously, if you drive you're going pay it.

Second

to that, we know we live on an Island, and a lot of goods and services are

transported to Newfoundland and Labrador. So the companies out there and the

providers, the trucking companies and all of those, guess what they're going to

do? They're going to pass it on. They're going to pass it on to families,

they're going to pass it on to municipalities, they're going to pass it on to

buildings, to our educational system; anywhere where there is a requirement for

goods and services.

To say

there are no new taxes, there's a double tax coming. It's a direct pay by

Newfoundlanders and Labradorians, and the second one is through the whole

economy and how that filters through and trickles down. We talked earlier about

the economic indicators and what they are today and going in a negative

direction. You put that on top of it, that's not, I don't think, going to

benefit in any way in terms of reaching the so-called target of 2022.

Some

jurisdictions, I just saw recently – I think there are four provinces that talk

about reaching targets in terms of greenhouse gas emissions. I think there are

four or five provinces that haven't met it. Some provinces basically said

they're not in favour of the carbon tax, particularly related to what it can do

to the economy. I just made a small reference to that.

If you

look at the oil and gas sector, outside of a gas tax that people would – buying

their gasoline would have to pay and then filters down through the economy, but

outside in terms of the biggest industries and what that would mean. Again, a

big concern in regard to the overall growth of the province in terms of our

economy and how that's achieved.

The

carbon tax, again, is something that was directed by the federal government. I

don't think we had a lot of push back in regard to that particular aspect of it.

Although, if I do remember, we came through – here in the House of Assembly, we

had a discussion and we passed a bill and legislation in regard to a carbon tax.

That was prior to the federal government announcing a requirement for a carbon

tax.

The

discussion here, I think, was five industries in the province that there would

be a two-year review done of the emissions of those five entities here in the

province. Based on that – and I know we asked questions to the Environment

Minister in regard to this. I think he said some time ago that's still ongoing,

but that was a two-year review of the greenhouse gas emissions of these five

entities here in the province, and that didn't include the offshore. It included

those five industries here in the province.

The plan

was when we passed the bill here, was that would be looked at over the next two

years. Based on those greenhouse gas emissions, I think there would be a fund

set up and you would pay into that, and it would be an incentive for them to use

that to change their habits and reduce greenhouse gas emissions. And that could

be through new technology, it could be through other means, but that would be

the point of that.

Now,

that was done prior to the federal government saying they were going to regulate

a carbon tax. I remember asking here in the House to the then minister of

Environment, what happens if the federal government comes up with a new means

and mandates a tax. They said, well, that's something we'll look at then, and

that's something that we won't concern ourselves with right now because we're

doing our own thing. We're doing our made-in-Newfoundland-and-Labrador tax

regime.

What

came about afterwards – and I know the then minister had meetings. I think when

the federal government announced their carbon tax, the then environment minister

went to Ottawa, had some discussions, and actually left the discussions in

Ottawa because I think there was some discomfort with the fact that we were

mandated to pay a tax.

I think

the Premier said he had left on his own. There were some reports that he was

directed to leave. Either way there was some concern expressed about the carbon

tax which, in and of itself, was a good thing. But it seems we've given up on

that now and we're going to, based on the federal government, jam a carbon tax

on Newfoundland and Labrador. Which I said is two-fold, based on an individual

tax and a tax that's going to be filtered throughout the economy and trickle

down and cause the kind of negative effect that we don't need, and it's not

going to help any plan that's put in place here in regard to the economic

indicators here in the province.

MR. P. DAVIS:

It will impact everybody.

MR. HUTCHINGS:

It's going to impact

everybody, indeed.

So just

for those out there to give you an idea, because I don't know whether people

realize in regard to carbon tax and what it actually is, generally it's applied

to try and encourage people of the use of carbon dioxide they emit into the

atmosphere. There are two forms, being a carbon tax or be a cap and trade

program. Some jurisdictions in Canada – I think Quebec and Ontario – have gone

with a cap and trade, where you earn credits in regard to your performance, and

you can buy credits, and based on that there's economic-wide limits on emissions

and there are a lot of permits for emissions that can buy and sell with the cost

passed on to consumers.

always hear about carbon tax being neutral. No one's really explained how that's

neutral, because at the end of the day, the consumer or the folks living in

Newfoundland and Labrador, it's not going to be neutral to them when that money

is coming out of their pocket. And that's taking away already limited income

through the 300 taxes and fees we already have in this province. It's not going

to be very neutral to families in Newfoundland and Labrador, I can guarantee you

that, Mr. Speaker.

Some of

the things about the carbon tax, and we've got offshore here, our oil and gas

sector, and some of the challenges with that. That's something we can look at in

regard to the offshore industry.

The

critic here in our caucus last week presented a private Member's resolution in

regard to not enforcing the carbon tax at this time. I believe this side, this

caucus, supported it.

AN HON. MEMBER:

Yes.

MR. HUTCHINGS:

They did. Did the other

Opposition? I'm not sure.

Anyway,

we think in terms of where we are – and he certainly articulated very clearly in

terms of why we shouldn't, why it's not appropriate at this particular time, and

other jurisdictions in Canada reflects that as well in regard to what we can do.

If I

remember correctly – I'm not sure of the number – Canada produces 2 per cent of

the world's greenhouse gas emissions. I think Newfoundland and Labrador is maybe

2 per cent of that 2 per cent in terms of what our production is in greenhouse

gases.

Now,

everybody's concerned. There are things we need to do. There are things we have

done. But when you look at Newfoundland and Labrador – and the other point my

colleague made when he got up and spoke was that we've invested. We look at

hydro development in the province and what we've done for decades. With the

completion of Muskrats Falls, I think the number is 98 or 99 per cent in

reduction in terms of hydroelectricity development.

From

that perspective, we've made huge contributions already to greenhouse gas

emissions. When you look at the intent to take Holyrood out of commission and

everything that flows out of that facility, greenhouse gas emissions and we've

heard as well from this side in regard to what that means to region out there

and what they're exposed to in regard to those emissions, but overall, if you

take that out, why wouldn't we be recognized for that already for a carbon tax –

why would we pay a carbon tax?

Newfoundlanders and Labradorians have invested in all of our hydro and the

ratepayer – we've reduced the greenhouse gas emissions through that and now

we're being asked to be taxed again for making that investment. Not only that,

when you look at Upper Churchill and that amount of electricity that flows

through Quebec and they sell it, I think, it's a fifth of a cent – they've made

$28 billion off it; I think we've made $1 billion. Anyway, they send that off

and that's going into areas that are not using coal, aren't using fossil fuels

but are using electricity. So that has reduced greenhouse gas emissions.

When you

look at the partnership with Emera and the ability to sell excess energy into

the Atlantic provinces and the Eastern Seaboard, we look at places like New

Brunswick and Nova Scotia where they have, I think, maybe 60 per cent of their

electricity is generated by coal. The federal government, I think, has regulated

that needs to stop. I think it was 2020 and now they've extended into 2030.

Recognizing that it's very likely that our hydro development and our electricity

is going to offset the burning of coal in New Brunswick and Nova Scotia, yet

we're asked to pay again a carbon tax to do that.

We've

made our contribution; the taxpayers will have contributed to that. So again,

the issue of the carbon tax, we don't think, is going to help as we move forward

in regard to our carbon tax.

I did

mention earlier and I'll just go back and clarify that the federal Liberals said

the provinces and territories must put a price on carbon in order to slow

climate change.

SOME HON. MEMBERS:

Oh, oh!

MR. SPEAKER:

Order, please!

MR. HUTCHINGS:

It was October 3, 2016 the

prime minister at the time announced a floor price on carbon that requires all

provinces and territories to have some form of carbon prices in by 2018. I think

that's been moved up to July. If provinces do not implement a price, Ottawa

would impose a $10 carbon, which will increase yearly to $50 a ton to 2022.

That's

the centralized move again, I guess, from Ottawa to the province. We saw it

before, I mentioned earlier, (inaudible) when you talk about surf clams in the

fishery. Some of the other provinces – British Columbia have introduced the

carbon tax; Alberta has put their own floor in with regard to what they're going

to charge. It's offside a bit with the federal government. PEI says they have a

carbon tax which is fiscally neutral. I'm not sure if any tax is ever fiscally

neutral when you're taking out of the pockets of residents and then that's

affecting their disposal income on what they can spend or not spend in the

economy.

When you

look at the money, they talk about disincentives or using it to change behaviour

in regard to what is happening, all of those things. Again, we don't think at

this point in time this is where we need to go in regard to assisting the

economy.

I did

mention in regard to the discussions – and I just found it here in what we had

done in legislation. In June of 2016, we introduced legislation and we talked

about it here that it had flexible compliance options on reducing greenhouse gas

emissions, Bill 34, that would be monitoring emissions and then encouraging

large industrial emitters in this province to reduce their emissions. If they

did not meet the targets, there would be options for them to offset those

emissions on paying into a technology fund. That was introduced at the time by

the minister and it was the preferable in our province for our options.

Further

to that, in October, that's when Minister Trudeau announced, after the fact,

about the floor price on carbon and mandating the provinces that they had to pay

it. There was the Canadian Council of Ministers of Environment meeting, our

minister was there. We went there and said we didn't want to be part of it; but,

subsequently, what happened, happened. That exists today. It's still going to be

part, apparently, of what it is.

When we

go through that particular side of it; the carbon tax, as I said, people think

there are no new taxes here, there are. It's coming and it's going to filter

down through everybody in Newfoundland and Labrador, I guess, by July. The

Premier has said we would have that by the spring. I guess we'll wait and see

where that's going to be and what the result of it will be.

I talked

about some of the commentary in 2017 in setting up the long-term plan of this

government in regard to fiscal management. They talked about at the time, too,

about the expenses related to – they had their Way Forward program, they had the

government renewal initiative. I think there were a couple of more names they

threw around in regard to programs to deal with some of the issues.

There

was also talk about two elements that are important to short-term for the fiscal

year, zero-based budgeting and the implementation of a more efficient balanced

management structure. Now that's interesting, because just this year, zero-based

budgeting was supposed to be all done in 2017, implementation of a more

efficient and balanced management structure.

Just

this year, the Minister of Finance talked about – he was talking about ABCs and

talking about the fact that we were going to bring in legislation to deal with

their spending. Then it was, we had a discussion with them, or he did, and the

issue then was they were going to try and get them in line. The fact being, this

zero-based budgeting was supposed to have been done. I think the prior minister

talked about reviewing stuff line by line; yet, when the actual numbers I think

were identified in last year's budget, and we asked about those numbers, the

targets hadn't been reached with the ABCs, the agencies, boards and commissions.

That's not, I don't think, in line with what the terms of the plan is and what

was outlined to do that.

There

was some talk about as well, as I said: zero-based budgeting changes to

management structure, savings from agencies, boards and commissions, annualized

savings. All of those were talked about in regard to deficit reduction and how

that would be done.

When we

look at yesterday and some of the comments and some of the documents that were

put in with the budget, I think it's relevant to recognize some of the

discussions or some of the reviews that were done by the Auditor General in

October 2017, when he looked at the current outline of information and the

fiscal plan that was laid out, not only from a budget perspective but from a

seven-year plan that was laid out to 2022. That was talked about yesterday in

regard to reaching a balanced budget by that time and if it's realistic.

One of

the observations at that point in time, and we all know this: “The Province of

Newfoundland and Labrador generates more revenue, on a per capita basis, than

every other province. This suggests that revenue is not the primary issue

creating the deficits.”

They

talked about: “The 2016-17 Public Accounts shows a reduction in” expenditures

“of $68 million from the previous year.” And that's program expenses.

It goes

on to talk about debt servicing. We see that's significant this year. I think

it's gone up $600 million, if I remember correctly. He says in his October 2017

report in looking at the province's plan and what they've laid out long-term, he

said: “The Provincial forecast for the period 2017-18 to 2022-23 expects

expenses to drop by 2.3% over that period.”

His

concern with that is: “Expenses over the six year period to 2022-23 are forecast

by the Province to reduce slightly by $187 million – a 2.3% decline.”

The

issue with that was when you look at the plan that was laid out yesterday and

apparently the continued plan for 2017, is that amount of reduction and if you

look at variables like the cost of oil, the amount of production, other

intervening variables that may appear at a point in time in regard to the

economy, whether there's a slowdown. We have a slowdown now. There's no

indication in the information presented yesterday how that's going to improve

the economic indicators and those sorts of things.

The

Auditor General in 2017 talked about on a per capita basis, Newfoundland and

Labrador generates more revenue than any other province, per capita spending in

this province is substantially higher than per capita revenues and we spend more

than every other province by a considerable margin. He's concern, and I guess

the budget yesterday sort of recognized that, that the path we're on and the

projections that are given are really not going to hit what the government is

suggesting in 2022-23.

Newfoundland and Labrador spends in excess of 21 per cent more per capita than

the next highest province, which is Saskatchewan. So the 2.3 per cent reduction,

his point, is not going to hit the target that's being proposed.

talked about a risk to achieving a balanced budget. I guess that goes to what's

been talked about yesterday and what the minister brought in in regard to that

budget. He said: “A budget forecast involves making reasonable estimates based

on realistic assumptions regarding expectations of future outcomes. The longer

the forecast period, the greater the risk that expected outcomes may be

significantly different than expected.

The six

year revenue forecast to 2022-23 is based on assumptions regarding such items as

oil prices, oil production, exchange rates and future economic activity in a

variety of sectors of the economy.”

When I

started earlier, I talked about the oil and gas, the fishery, tourism, the IT

sector, the forestry industry. All of those ones that need to have activity.

Muskrat Falls is coming down. You have about 4,000 employed there; they're

coming out, all of those – and what's going to help meet these goals and targets

through economic activity because that's where the wealth needs to be generated.

As I

said, the Auditor General said the six-year revenue forecast to 2022-23, the

assumption based on such things as oil prices, oil production, exchange rates

and future economic activity in a variety of sectors of the economy. He also

goes on to say: While it is possible that the forecast may be exceeded, there is

considerable risk that the revenue forecast may not be achieved. For example,

oil royalties may be less than expected as a result of lower than expected oil

prices, lower than expected production.

As I

said before, this was an administration prior to an Opposition, when coming in,

said we were addicted to oil; yet, everything here really on this is – the major

component of it is related to oil.

When we

look at revenues through the taxation and what's been implemented, there was

indeed an increase. I guess on the reverse side of that, one needs to ask, what

effect did that have on the economy. You're taking disposable income out of

Newfoundlanders and Labradorians pockets. The economic indicators – we'll look

at in a little while – show the trickle-down effect of that is it's taking money

out of the economy and people don't spend.

Then the

other side of it talked about our population, our demographics and to have

people stay and live here in the province. If people wanted to move here, if you

don't have that environment where people want to come and raise their families –

small business want to come, entrepreneurs want to come and invest – that

becomes problematic in driving the economy.

The

Auditor General said as well: “Oil royalties represent” – at that time – “about

14% of total revenue” from where it was in 2011-2012.

This is

the other point too; on the expenditure side we talked about a 2.3 per cent

reduction, which is marginal, and whether it could ever be achieved. Then he

talked about on the revenue side, “… the six year period to 2022-23 is forecast

by the Province to grow by $1.1 billion.” So that's the revenue side of it. The

forecast is a growth of $1.1 billion in revenues by the time we get to 2022-23.

Where's that coming from?

The

Auditor General looked at that, and this is what he said: “Almost 27% of this

growth is expected from oil (predominantly increased oil prices).” So that's

back to what we talked about earlier in regard to those 11 agencies that gives

forecasting and some direction or some thoughts on how we're getting, in the

future, to a certain percentage or a certain dollar for a barrel of oil.

Then it

factors into, from the exporting side of things, what the cost is and the

exchange rate and all those kinds of things. There are variables there that are

very tenuous. They're up and down, based on the geopolitics of the world and

what is going on, who's producing and who's not, who's in OPEC and who's not.

All of that is factored into what the oil price is.

The AG

recognizes that based on the forecast that's given by this current

administration, there are many variables in place on that $1.1 billion in new

revenue – yes, $1.1 billion, which is significant.

Some of

the other things he talked about in regard to the results of: “Other tax revenue

may be negatively impacted by a slowing economy.” This is the Auditor General,

and this is what we've said and what we've talked about, is that there is huge

concern and has been – and I think we've seen the result of that in the amount

of taxation and what's used in that particular case.

Again, I

keep repeating, you're taking the money out of people's pockets. The

entrepreneurs, the businesses aren't seeing what they usually would see in

activity in their companies. Just all along it causes concern.

The

Auditor General recognized: Other tax revenue may be negatively affected by a

slow economy. If you're going to take $1.2 billion and raise new money, where

are you getting it from? If you're taking it out of the economy, you're taking

it out of people's pockets. That doesn't help the economic indicators that we

talked about in regard to this.

Muskrat

Falls revenue – and this is one of the key areas that has been talked about

before in regard to where this money is coming from – the $1.2 billion. I don't

know if I read that, but the Auditor General on using the reference to the

revenues of $1.2 billion says: “Almost 27% of this growth is expected from oil

(predominantly increased oil prices) and the remaining 73% from other sources

(including expected profit from Muskrat Falls).”

Now

that's interesting, because folks on the other side have said and the Premier

has said no one wants to buy the power; yet, the Auditor General in reviewing

the fiscal forecast of his government says that 73 per cent of the $1.2 billion

they expect to raise by 2022-23 to put in the coffers, 73 per cent is coming

from other sources including expected profit from Muskrat Falls.

We know

when we wrote – and I have it here somewhere – a while ago, asked a bunch of

questions on Muskrat Falls operations and what had transpired. We asked a number

of questions, and I think it was November 2016 I wrote the minister – no, that's

when a response came. It was prior to that, a few months, I think maybe three

months prior to that. I know she told me she had to go to Nalcor and Natural

Resources to get all that information. And that would have been under the new

CEO, Mr. Stan Marshall, who was brought in by the current administration and

would have been related to the new board of directors that were appointed. So

that's where this information would have come from.

regard to that reference of what the AG said: 73 per cent of that growth in

revenue is going to come from profit from Muskrat Falls. We said in the fall of

2015, we asked: it was suggested by the CEO of Nalcor in a report to government

that there was the potential of a $3.3 billion in electricity export revenue

that was not counted in the project's finance. That was the question we asked to

Nalcor and the new CEO after the changes were made.

At that

time we also asked – we talked about excess power and how much power is expected

to be exported over the next 35 years at what rates. What will both the cost and

revenue from the export of excess energy sales be?

We were

looking for the project in regard to the sale of excess energy, because it was

always the intent that the excess energy would allow for reduction in

electricity rates. So that would help offset. That's why we were looking for the

information from the new CEO of Nalcor.

committed to maximizing the value – and this was some of the response we got

back. We are committed to maximizing the value of the province's energy assets

for domestic use and export. Nalcor actively markets and sells our available

excess energy to external customers via spot markets. My understanding for that

is that at any particular time energy is put into the spot market and there is

bidding done on that particular electricity at a particular time, and the rates

can fluctuate up and down in terms of what that would be.

Obviously, in much needed times of the year, whether it's cold temperatures, or

in the US in a hotter environment where you have air conditioning, that sort of

thing going on. It depends on the time of the year and what the spot market will

deliver. No doubt, over that period of time you would demonstrate an average

rate or rate of return or what that cost would be over 12 months.

response to our question in regard to the revenues and the potential of $3.3

billion that was referenced by the CEO of Nalcor – we were told they would be

into the market and spot market and generate what they need to generate. They

gave us a report that: attached represents the current forecasts for surplus

energy and outlook for electricity prices.

This

would have included all the assumptions, all the information they had in regard

to electricity forecast and rates. Now, interestingly enough, prior to the new

CEO coming in – obviously, assumptions were done and forecast and all those

types of things in energy. But after he came in, they changed somewhat. They

were told they were changed. Yet when he came in and took over, the same people

stayed in place. There was no one let go. The project manager for Muskrat Falls

stayed, the VPs all stayed, there was nobody changed.

We were

told the assumptions changed and the assumptions were wrong. Maybe they were, I

don't know. Maybe the inquiry will determine that they were wrong. But it is

kind of different that the same people who were always there – shortly after he

came in, he told us the assumptions were wrong. What was it based on because the

same people who were there prior to had, I guess, come up with the assumptions,

yet after the fact they were wrong. I guess at some point someone will explain

that.

When you

look at the excess power again and what we asked for, we also continue to

explore other potential options to export Newfoundland and Labrador surplus

electricity. An interconnection to the North American grid will open up

additional opportunities.

The

minister brought in a bill the other day which deals with the interconnection

and the regulatory framework we need to follow as we move forward with the line

coming from Labrador into the Island and then on to Nova Scotia and into the

Eastern Seaboard, so that provides that circuit. We certainly supported that and

that was always part of the original plan to do that because obviously you need

that. You need to comply with the FERC rules; the Federal Energy Regulatory

Commission is how it's referred to. In Quebec they have the parallel, Régie I

think it's called, and that does similar things.

That

means non-discriminatory actions in regard to the transmission of electricity.

So if one jurisdiction is doing it and they allow you to do it, you need to

complement and do the same thing. We need to do that to allow us to flow and do

what needs to be done, and that just brings it in line. So we had a good

discussion and that. I thank the minister and her colleagues. We had a really

good discussion on that, and her staff. It was very well done.

Getting

back to what we asked for in regard to the excess energy, what we were given,

and the interconnection to the North American grid – now bear in mind, the

Premier said there's no one who wants the energy, they can't sell it, yet we

have seen in the past number of months, even, I think it was Massachusetts or

New Hampshire got together and put out a broad proposal for seven or eight

terawatts of power to flow down to them. There's a little roadblock, but I think

Hydro-Québec had won that proposal to send that electricity down. Obviously, the

market is there and there's a need for it, which is important.

So when

you look at the question that was asked in regard to a reference made to

electricity, the cost of $3.3 billion electricity export revenue that was not

counted in the project's finances, we just look for details.

So what

we got was a chart and it said: Forecasted excess energy, energy available for

export. So when you go across, starting in 2020 – and we're told that first

power from Muskrat would probably be in 2019 now – it shows the production of

energy that's available. Then it looks at total export sales, net revenue in

millions of dollars.

starts in 2020. In 2020, it says $153 million, then it goes to $135 million,

$123 million and then it goes on to 2027, $167 million. So what it's recognizing

here, from the CEO of Nalcor and the folks over there and the information they

provided, is that the excess energy, here's what we're projecting.

The

Auditor General identified that in government's forecast, for their seven-year

forecast, they're recommending a $1.1 billion increase in their revenues to get

to their balanced books in 2023-23 and up to 70 per cent of that could be

profits from Muskrat Falls. So I assume they're using this information as part

of that, but it's kind of difficult to get that understanding when the Premier

said no one wants the energy.

Anyway,

we'll go back to what was presented to us. From 2020 to 2040, the excess sales,

it ravages from $100 million a year, $150 million a year to, I think, the

highest is $190 million a year. So from 2020 to 2040, over a 20-year period,

it's about $3.5 billion. That's what it works out to.

So this

is information that we didn't calculate. We didn't come up with this. This came

from Nalcor and from the minister on direct question of the excess sales and

what are you projecting and what is your forecast. I think it ties in nicely to

what the Auditor General had said, in 2017, when he looked at some of the

forecasts. The forecast is the government is going to get these revenues and

where are the revenues coming from. This is the government's plan. It's not

anything we – it's theirs and the AG looked at it and this is the supporting

documentations in regard to what they're suggesting. As I said, that was from

Nalcor and the minister; we asked for and got it I think in the fall of 2016.

regard to that as well, we had discussions about: Has the total net revenue from

the sale of excess energy been factored into the project's finances? Please

demonstrate where this is factored in and the impact on the cost of the project

and domestic power rates in this province. That was the question we proposed. At

that time the answer was: No, the revenue from the sales of energy in excess of

Newfoundland and Labrador Hydro's base block entitlement was not factored into

the estimated domestic electricity rates released on June 24, 2016 or this

project cost update at the time.

That was

the question we asked regarding the actual rate and the excess energy, because

we don't get much discussion on that. We hear comments that no one wants it, we

can't sell it, yet the Crown corporation that's overseeing all this with the new

CEO, the new board of directors, this information came out after that and it's

clearly identifying that they're projecting over a 20-year period over $3

billion sales in excess revenue, and the government is using that in their

forecast. That's the information that's made available to us.

Mr.

Speaker, that goes to that issue and ties into that budget and, as I started

today, talked about looking at the projections that are being made for seven

years to get us to 2022-23 – is it conceivable? Can we get there? I talked about

the fact that expenses are going to reduce about by about 2.3 per cent. When you

look in and factor in those other variables related to commodity prices, in

particular oil prices, those types of things, whether there's a recession or

not, whether the economic indicators we have here and most going in wrong

direction, whether they can help to drive the economy and create some of that

wealth that supposedly is going to be created, I guess we'll see.

We also

asked about – because we had a discussion here in the House about this – Quebec

and whether discussions are going on. A number of months ago, the Energy

minister in Quebec said there were discussions going on but when you asked here

they said no, there was no discussions going on.

We also

asked at that time: Is the current government exploring the option of selling

excess energy through Hydro-Québec? Have any negotiations commenced with

Hydro-Québec? Answer: Nalcor has been already selling excess energy in Labrador

using Hydro-Québec's transmission system for several years. That's not new. The

company continues to explore opportunities with multiple customers to enhance

the value of energy that is surplus to the province's needs. This says: Neither

the Government of Newfoundland and Labrador or Nalcor Energy has been involved

in discussions with Hydro-Québec on Muskrat Falls power.

This

response was generated in late 2016, if I remember correctly – yes, indeed it

was. I just think that ties in nicely to the seven-year plan that this

administration talks about. It ties in nicely to the Auditor General and what he

reviewed in 2017, how he talked about the balance sheet and the expenses, talked

about the revenues and talked about the 2.3 per cent and I'm not sure whether

that's going to get you to 2022. And what they talked about yesterday in terms

of getting back to balanced books and surplus and as well from determining, from

the revenue side of things, whether you can reach where you need to reach and

where that revenue is projected to come from, I think that ties in and certainly

poses a lot of questions in regard to what the current administration talks

about when they talk about their expenses and revenues.

I wanted

to talk about too, Mr. Speaker, go back and look at some of the budgets in

regard to – we heard about investments from the federal government. No doubt,

much like past administrations at various times there has been significant

dollars allocated for infrastructure. In Canada, my understanding is as the pot

goes up or the money goes up for infrastructure, it's divvied up per capita.

So we've

asked here, and I know my colleagues have asked – and we've talked about the

federal government, we're getting more money, we're getting this and we're

getting that, we said well, show us, outside of per capita of any other

province, how much we're getting and what the extra money is. But we have been

unable to get that. I guess we're just like any other program in Canada; we're

getting per capita funding. If the infrastructure goes up or some money goes up,

it's shared up across the country on a per capita basis.

If you

look back at some of the expenses in regard to what our expenditures are and you

look at those dating back to 2015-2016, we know the biggest contributor to our

expenses is health care and the challenges we have with health care. We know the

new health and social transfer – the three main transfers for the federal

government, I guess, are health, social transfers and equalization.

Equalization, we're not getting very much on that, but on health and social

transfers, the health, if I remember correctly a number of years ago, there were

discussions by the various provinces and I think the Harper government had

talked about at the time, I think there was 6 per cent in terms of growth in

health care spending in Canada and what the transfer would be to the provinces.

The negotiation was they wanted to keep it at 6 per cent and then they had

negotiations after the new prime minister came in.

I think

the old Harper government had recommended going down to 3 per cent and the

current administration, Prime Minister Trudeau had gone with that, the 3 per

cent. I remember at the time there was discussions and our Premier went up and

other premiers went up and they talked about 3 per cent wasn't enough and they

weren't going to sign. But then shortly after, they went out of the room and

they were all lined up signing the 3 per cent.

understanding right now is 3 per cent or up to 3 per cent based on economic

indicators, that's how federal funding to the provinces for health care every

year, that's the formula that's in place. We saw some moderate increase in

transfers from the federal government for health care, so I assume that's the 3

per cent or something close to it that brings it up to a small increase. Social

transfers, I think it's the same thing. There's a calculation done to bring it

up. So there's really no new money in that just for Newfoundland and Labrador.

That's just money on a per capita basis or on a formula basis for all

jurisdictions in Canada when that's done.

The

other item is the cost and spending and expenditures, what that relates to. So

you go back to 2015, the revised 2014-2015 was roughly $7.9 billion and that was

our last year. Then in 2015-2016, it went to $8.0 billion. In 2016 it was

revised to about $8.1 billion. In budget 2016-2017, it went to $8.4 billion.

That's our expenses. So that's $8.4 billion and then we get to 2017 it was

revised to $8.4 billion budget, went down a little to $8.1 billion and the

budget for this year, in terms of overall expenses, is almost up to $8.4 billion

again.

When you

talk about reducing expenditures and critical of some of the things we had done,

it doesn't bear fruit when you look at the actual numbers and what's transpired

since this administration has come in in 2016.

The

other interesting thing when you go back and look at the previous budgets – and

I reference the federal government and while we continuously hear about the

investments being made and the extra investments being made and our great

relationship with Ottawa and what's that doing for us, it's interesting when we

go back and look. In 2015, health and social transfers were about 9.9 per cent.

Other federal resources were about 6.5 per cent. So total federal transfers were

6.5 per cent, when you go back and look at the budget documentations for prior

years. That was 2015.

If you

look at 2016, actually it went down – no, sorry, it went up to 17.5 per cent. So

about a percentage point. From 16.5 per cent to 17.5 per cent, and the health

and social transfers were 10.6 per cent and other transfers about 6.9 per cent.

When you

go through and look at these years, really, the per cent or half per cent

increase in federal government expenditures or funds coming to this province is

solely related to a formula for social transfers, or for health transfers. It's

not based on any new money that's been directed toward Newfoundland and

Labrador. It's based on a per capita basis and it's based on a formula that's

already in place.

If you

look at 2017, and you look at the expenditures as well, the federal government

from that perspective, I think in Budget

2016 it was 17.5 per cent, in Budget

2017 it's 17.1 per cent. So it went down 0.4 per cent. If we look at the

documents that were presented yesterday in regard to federal transfers and where

we are, again, the health and social transfers are about 9.7 per cent and the

other federal transfers are about 7.3 per cent. So that means about 17 per cent.

When you

look at the numbers in total from federal transfers:

Budget 2015 it was 16.5 per cent; budget '16 it was 17.5 per cent;

budget '17 was 17.1 per cent, and Budget

2018 was 17 per cent. Really, there's been no change in terms of overall

contribution to Newfoundland and Labrador from the federal government; yet, we

seem to hear a different story. In actual fact, the numbers don't bear that out.

Now

that's related to health and social transfers and other federal sources. Those

federal sources could mean being able to leverage federal dollars for things

like infrastructure, small crafts and harbours, a whole range of initiatives.

Again, as I said, that's on a per capita basis.

We look

at our taxation levels and where our revenue comes from, that as well is

significant because that ties back to what we talked about in terms of the

economy and doing what we need to do. We're almost 51 per cent in regard to

where the taxation comes from. We're picking up 51 per cent from business, from

the economy, from Newfoundlanders and Labradorians and taking it out of their

pockets. That's where it's coming from. That's directly tied to the economy, to

the people of Newfoundland and Labrador, and trying to make sure we can drive

the economy and make use of the targets that have been outlined by this current

administration in regard to some of the things they are talking about.

talked about the transfers. One of the ones we've had a discussion about for the

past while is related to equalization and some of the initiatives in regard to

that and some of the actions that have been taken or not taken by the current

administration.

I'll say

upfront, and I've talked to this over the past couple of years and asked

questions here in the House. I know in the initial budget of this government in

2016, I think the minister at the time – or maybe it was 2018 – referenced the

fact of the unfairness and what's happening in that. Really, in the first two

years that side wasn't allowed to talk about equalization, wasn't allowed to

discuss it.

I think

the Premier said at one point: it is what it is, we can't ask Ottawa. With the

dramatic cut in a barrel of oil, I know the Premier of Alberta, the Premier of

Saskatchewan were quick to ask about the three-year rolling average for

qualifying for equalization and to get you in. It wasn't really receptive of a

dramatic drop in oil prices and how negatively that affected – I don't think

there has ever been in Canada a type of reduction that transpired over that

period of time that affected Newfoundland and Labrador as well.

There

was a lobby started by two of those jurisdictions with the federal government –

we never took part – to look at is there a means or mechanisms to do that. Under

the formula there is a small caveat, is my understanding, to look at the whole

fiscal piece related to the dramatic drop in oil prices. I think when the

calculation was done it was only about $30 million that we could get access to

in regard to that.

We had

said and lobbied: Well, let's start the discussion. Let's at least start the

discussion on equalization. I think 2019 is the period to start, but with that

three-year moving average and with two years in between –

SOME HON. MEMBERS:

Oh, oh!

MR. SPEAKER (Reid):

Order, please!

The

noise level in the House is a little high. I ask Members to keep their comments

low, unless they're speaking.

MR. HUTCHINGS:

Thank you, Mr. Speaker.

AN HON. MEMBER:

(Inaudible.)

MR. HUTCHINGS:

Yes, indeed, and there's more

to come.

Thank

you, Mr. Speaker.

So with

the whole equalization piece in regard to lobbying and advocating the formula as

it's set up now, and most people agree, it doesn't reflect changes in Atlantic

Canada, changes in demographics and the direction we're going, and it's based on

a per capita basis. When you look at some of the challenges we have in regard to

delivery of service and the demographics of where we're going, I think everyone

agrees it needs to be looked at. It's not fair. It's not fair for Newfoundland

and Labrador and it's not fair for other jurisdictions. I think we really need

to look at the caveat of natural resources and what's included in the

calculation and the fiscal capacity. The last time we signed 50 per cent of oil

royalties would be used in that fiscal capacity.

When you

look at that and non-renewable resources that are allowed into the fiscal

capacity, and then you compare it to the non-renewable that's not included, and

particularly related to Quebec – and nothing particular against Quebec, but

they've been able to avail of a program and avail of it to an extreme advantage

to them. So right now, as an example, the hydro from Upper Churchill, the

figures in regard to what Quebec has earned is in excess of $20 billion on that

and Newfoundland and Labrador probably a billion and a half over that same

period of time. But in the calculation right now, those revenues that they've

derived from our river, Upper Churchill, that's not included in their fiscal

capacity, in the calculation. Yet ours, in regard to natural resources, 50 per

cent is indeed included.

Further

to that, my understanding is Hydro-Québec does a whole range of leasing of

property to the provincial government, which again generates revenue through

Hydro-Québec, but it's not included in the overall fiscal capacity in terms of

determining what ability provinces have to raise revenue and, in doing that,

under the constitution of Canada, it is that you provide reasonable level of

taxation for reasonable level of services. That's a fundamental principle. And

if you can't do that, the equalization program is supposed to be responsive to

the needs of that particular province.

So what

we saw here in the province in 2016, and continuing, is a very increased level

of taxation that is hindering the province, hindering growth, hindering a

province where people want to do business, entrepreneurs want to invest, people

want to live and raise their families, we want to attract people here so all of

that – and that's a decision that the current government made in regard to the

level of taxation and their ability to drive and create the environment for

economic activity, but the general principle of the equalization is that that

shouldn't happen. There should be a means there to address that in what

transpires in regard to the economy. It's much more reflective than a five-year

period where you have a three-period to review the data, you have two years then

after that before it's implemented.

I think

the fiscal capacity issue needs to be changed and also the fiscal cap, which

looks at how much is taken into consideration in regard to revenue generation.

As I said Newfoundland and Labrador, 50 per cent of our natural resources,

non-renewable resources, are introduced on part of that.

I talked

about the payments from Ottawa, the three streams. I talked about two of them

but if you look at equalization in 2018-2019 and what's going to flow to some of

the provinces, the equalization pot this year in 2018-2019 is almost $19

billion. It's $18.9 billion.

When you

look at those that are receiving it, significant dollars: Prince Edward Island,

$419 million. I'll look at the Atlantic provinces: Nova Scotia, $1.9 billion.

Nova Scotia just recently brought down a budget and showed a surplus with a $1.9

billion equalization number; New Brunswick, again very high, almost $1.9 billion

in equalization payments. Quebec, this year, will receive $11.7 billion. Last

year, it was a little over $11 billion. So $700 million it's gone up, which is

amazing when you think about it. We don't want to talk about it here.

The

federal support to Ontario, under the third phase of transfers from the federal

government, equalization, at $963 million. Ontario in the past number of years

dating back to 2013-2014, $3.1 billion; the following year, $1.9 billion; $2.3

billion; 2016-2017, $2.3 billion; 2017-2018, $1.4 billion; and this year will

receive $963 million. So that's just a framework when we talk about

equalization, transfers and those types of things that we need to do.

As I

said, we've been vocal on that. We've asked the current administration to take a

look and get our local MPs to make the case. I think there was a case made. Many

of the articles that have been done – even the parliamentary officer in Ottawa

just recently did a review, looked at the cases, and looked at the various

provisions of – what if you changed some variables of the equalization formula?

What if you took the cap off for natural resources? What if you included

renewable resources into the calculation? What would that mean for various

jurisdictions?

With

various changes to that, there would be significant changes for Newfoundland and

Labrador ranging currently anywhere from $300 million to $500 million that would

flow to Newfoundland and Labrador with a revised equalization formula. So think

about that today, at the very least if we had $300 million, $400 million, $500

million to $1.6 million, $1.7 million like Nova Scotia and New Brunswick, that

would get us to the principle that enshrined in the constitution of reasonable

levels of taxation for reasonable levels of services, instead of dealing with

these in excess of 300 taxes and fees – which there's another coming down the

pipe this year of a carbon tax, which really nobody is talking about or nobody

is really giving much detail in this budget for what it's going to mean for

Newfoundlanders and Labradorians and what it's going to mean for our economy.

Apparently, there's no analysis done of that and what it's going to mean for us.

Mr.

Speaker, the other issue that drives economic activity – and I spoke to it

briefly – is personal income tax rates both on a federal and provincial level,

and again how that speaks to the incentive for people to be part of this

province, want to stay here, and want to be part of growing the economy which is

hugely important for the long term and usually important if government has any

possibility of reaching its targets it set out yesterday and has talked about

for the past number of years in regard to getting to 2022-23 and getting into a

surplus.

Some of

the things we talk about in offshore oil production is varied in regard to what

happens. The Hebron oil project is expected to be in production and ramp up in

the next several years. We have an expectation that oil production is going to

move up. Minerals on one side from that perspective, there's some good news

there in that.

One of

the major concerns is capital investment. The capital investments over the past

number of years in various projects we've done, megaprojects. Where are we going

from here? We have Muskrat Falls that will be winding down. There are over 4,000

people employed with that. When you look at the various companies and those

types of things that are engaged and the spinoff from that, that's one of the

major indicators that's of significant concern in how we fill that void as we

move forward. There was nothing in the budget yesterday in regard to an

announcement on how that void is going to be filled or what the incentives are

to do it.

mentioned earlier about Voisey's Bay and the underground mine, there's nothing

on that. I spoke about the Grieg project that we left off, as a MOU was in

place. That hasn't progressed yet; significant ones to look at in regard to the

economy and how it flows ahead. Concerns, as I mentioned earlier too, in regard

to particular tariffs related to NAFTA and the free trade agreement, the

negation of that and how that's going to affect significant industries here in

the province. Capital investment is extremely important, where that's going.

To that

point, in our oil and gas sector, we had discussions too, a while back, in

regard to new environmental assessments that have been done by the federal

government and that's coming our way. A lot of concerns by Noia with what that's

going to mean by making it attractive and the timelines to get, especially,

exploration operational.

We look

at the process in oil companies around the world coming here and you look at

what we've done. Our administration invested heavily in seismic work and through

that we were able to establish data in what's offshore and use that data to sell

it to – or not sell it to, but make it available to those companies and they can

make informed decisions about prospectivity and what's actually out there.

We have

some control as well as to what's out there. We've seen record land sales in the

past number of years related to that and because of that, because of that

investment. Having said that, that's good to have, but to get to the next step,

I mean they'll do their exploratory work, but to continue the land sales – they

were down a little in the last year – you can't have barriers. You can't have

barriers to allow that development or exploration to occur.

Some of

the main concerns expressed in regard to this new environmental assessment is it

could slow down exploration. It gets heavy on the regulatory side of things in

terms of who can engage in a process to give perspective on an environmental

assessment and what transpires.

That's a

concern of the industry and I think it's going to affect or could affect our

industry and we really need to have a good discussion with the federal

government and be strong in our advocacy to make sure that the intent of the

1985 Atlantic Accord ensures jurisdiction, regulatory framework. The C-NLOPB has

functioned here to oversee our oil and gas sector over the past number of years

and we have equal representation. That should be the entity to do environmental

assessments.

I know

the minister has commented on that in the public before in regard to her

preference. I think, as a government on that side, they need to continue that.

If that breaks ranks with their federal colleagues, well, so be it, because the

issue here is Newfoundland and Labrador, the building of our industry to making

sure our oil and gas sector continues to flow. It has to continue to flow.

That's

one of the variables that we have to ensure it doesn't negatively affect our

industry because we get back to the same point in terms of the projections and

generating wealth and where wealth is coming from and all of those things. It's

all tied in. We can't have frameworks in place that's not supporting what we

need to do here in Newfoundland and Labrador. As I said, industry groups, I've

spoken to them myself in terms of concerns they have and how we move this

forward.

Now,

speaking of that side of it; yesterday and I guess the day preceding, the

minister talked about, I think there's a move afoot – and there wasn't much

detail in the budget in regard to Nalcor and separating out the oil and gas

entity within Nalcor and those groups of entities that are there. Not a lot of

detail. I'm not sure of the rationale. Is it a cost?

There

was talk about branding. I'm not sure about branding. We've had huge success

with the oil and gas sector in this province – huge success. When we look at the

wells, we look at the exploration that's gone on, talked about land sales,

talked about the seismic work that was done, talked about the activity in our

offshore and continuing to move that. I'm not sure if branding or what the

actual rationale was for it. Is there a cost associated to it?

The

entity of Nalcor would hold renewable and the non-renewable resources of our

province – the energy cluster of everything we have. Taking one out and pulling

it out and bringing it in to a line department. Right now it's been a Crown

corporation. The expertise is there, they've developed the knowledge, they've

got corporate knowledge, they have all of that and it's intertwined with all of

the assets that we use for energy and energy production. And really, it was

modelled after what we see in Norway and other areas of the world in regard to

bringing that cluster together and that shared perspective and synergies that

can be used for that.

So I

guess, in the days ahead, we'll get some enlightenment in regard to where that's

to, what it's all about, and how it holds best for Newfoundland and Labrador.

Because, at the end, that's what we're all concerned about, to make sure that we

can make sure we can move ahead.

Yesterday as well in the budget there was one component – and we had a lot of

discussion here in regard to the legalization of cannabis. I know the Leader of

the Opposition has asked a lot of questions in regard to the readiness of that.

I guess this is another issue where the big hand from Ottawa comes down and

tells you we're going to do this and here it is and go do it, a centralized

view. And a time frame was put in place to do this.

I know

yesterday in the budget, if I remember correctly, there was $2 million, in terms

of the revenue stream, that's supposed to be generated by the sale of cannabis

here in the province. Now, I know there were a lot of questions asked here in

regard to, well, what's the cost-benefit done, where are the evidence-based

decisions – if we've heard that once, we've heard it 1,000 times over the past

three years from across the floor. Yet when we ask the question about show us

the projections of sales, show us the projections of returns on taxation, show

us the cost of implementing it – there's $40 million in remittances from Canopy

Growth, their decision made with Canopy Growth in terms of them coming to the

province, and there's $40 million over a period of time that they're going to

get. But how does that factor in to the bigger picture? What's the return to the

people?

One of

the important questions that were asked was: Is this going to cost the taxpayer

of Newfoundland and Labrador anything to implement this? We still don't have the

answer. All we saw yesterday was a reference to a $2.2 million revenue line – no

idea where it's coming from, what it's based on. So hopefully over the next

discussion days, weeks we get into the budget we'll get some clear idea of what

that's all about and where it's coming from.

Interestingly enough, Nova Scotia tabled a budget just recently and they

factored in almost $30 million, $29.4 million relying heavily on cannabis sales.

Now, we're nowhere near that, obviously, at $2 million; but again, it's nice to

see, as we move forward in the weeks ahead, from the minister, exactly what the

details are and how that's going to roll out. I know we talked about there's a

component of education, certainly for our youth, educating our youth in regard

to the use of cannabis. There's the side of addictions; the

Highway Traffic Act , enforcement.

There's a lot of discussion in the country about how you determine if somebody

is under the influence of cannabis. Right now, my understanding is there's no

definitive test or blood test or anything that can be done to definitively say

that someone is under the influence of cannabis.

There's

also the issue of the use by our youth. Many in the science community and

medical professionals would say that the human brain continues to develop till

the age of 25, but my understanding is the legalization is a lot younger than

that. That poses concerns and we need to have that discussion. Some of the data

that's coming forward about those results is certainly concerning as well.

So the

whole financial side of it is of concern and that certainly needs to be brought

to light in the days and weeks ahead as we go through all of this.

As I've

spoken earlier this morning and started off and talked about those industries

and all the ones that are important to Newfoundland and Labrador and tied it

into the fiscal plan of this administration over the past seven years and what

was announced yesterday, there really was nothing announced yesterday to give

any hope or direction to why – I heard someone gave the example, so you have a

young family now with two kids that are in school. They're in sports. They're in

activities. Prior to yesterday if they were thinking about leaving or they were

thinking about making more decisions, what would have been in the budget

yesterday or what direction would have been given or plan laid out for them to

say no, we think there's opportunity and we're going to stick around.

I don't

think there was a lot. I think we need to continue to make that environment. I

didn't get to some of the economic indicators and where they're going, but

that's not the picture that I think we need to see going forward. If we don't

get there, it's not going to be for the benefit of Newfoundlanders and

Labradorians. Collectively, across on all sides, we want what's best for

Newfoundland and Labrador. We may not agree on everything, but I think we do

want what's best. I guess the rule is: How do we get there? So I think there'll

be a lot of questions in the weeks ahead and I look forward to having that

debate.

Mr.

Speaker, normally, on Wednesdays, we adjourn activity at this particular time.

So I'd like to put forward that I adjourn debate at this time on budget and will

pick it up at the next sitting of the House.

SOME HON. MEMBERS:

Hear, hear!

MR. SPEAKER (Trimper):

In accordance with

paragraph 9(1)(

b) of the Standing Orders, we will adjourn until 2 o'clock.

Recess

The

House resumed at 2 p.m.

MR. SPEAKER (Trimper):

Order, please!

Admit

strangers.

In the

public gallery today, I would like to welcome family and friends of Michael

Jones. He is the subject of a Member's statement.

Welcome

to you.

SOME HON. MEMBERS:

Hear, hear!

MR. SPEAKER:

Also watching the House of

Assembly over the live stream, I would like to send special greetings to the

students and staff of St. Paul's Junior High School here in St. John's. They

will be mentioned in a Member's statement today.

Welcome

to you.

SOME HON. MEMBERS:

Hear, hear!

Statements by

Members

MR. SPEAKER:

For Members' statements

today, we will hear from the hon. Members for the Districts of Mount Pearl

North, Labrador West, St. John's East - Quidi Vidi, Virginia Waters -

Pleasantville and Cape St. Francis.

The hon.

the Member for Mount Pearl North.

MR. LESTER:

Mr. Speaker, I rise

today to thank Visions Employment Plus Incorporated for the valuable service

they provide to their clients.

Established in October 1994, they are a not-for-profit,

community-based employment corporation providing employment services and

supports to individuals with a primary diagnosis of intellectual disability.

Visions Employment's objective is to provide the supports

and services necessary in the creation of equal employment opportunities for

their clients while providing ongoing support and assistance in the monitoring

and maintenance of existing employment placements.

Their client population is unemployed adults and youth with

a primary diagnosis of an intellectual disability eligible for services under

the Labor Market Agreement for Persons with Disabilities who face barriers to

employment. Employment partnerships and services extend throughout the City of

Mount Pearl and surrounding areas.

Mr. Speaker, I ask all hon. Members to join me in thanking

Visions Employment and their sponsors for all the valuable work that they do for

their clients.

SOME HON. MEMBERS:

Hear, hear!

MR. SPEAKER:

The hon. the Member for

Labrador West.

MR. LETTO:

Thank you, Mr. Speaker.

I rise in this hon. House today to pay tribute to Gordon

Parsons, a legend and patriot of Labrador.

Mark Twain once said, “Never pick a fight with someone who

buys ink by the barrel.” Such was the case with Gord when he was editor and

owner of The Aurora newspaper, but he

was fair.

Gord was born in St. John's, educated in Flatrock, moved to

Goose Bay in 1963 and to Labrador West in 1973. Gord quickly adopted Labrador as

his new home and he became immersed in the many activities of the Big Land. He

was part of the first group to travel Route 389 to Baie-Comeau and the

Trans-Labrador Highway to Happy Valley-Goose Bay long before they were called

highways.

Gord's many interests included birdwatching, ham radios,

pistol and rifle shooting, photography, and especially the environment, and he

became active in all organizations associated with them.

Gord loved the Labrador land

and its wildlife, especially birds, but most of all he loved its people. Gord

passed away on March 15 at the age of 73 years.

I ask

all hon. Members to join me in the celebration of a life gone way too soon.

Rest in

peace, my friend.

SOME HON. MEMBERS:

Hear, hear!

MR. SPEAKER:

The hon. the Member for St.

John's East - Quidi Vidi.

MS. MICHAEL:

Thank you very much, Mr.

Speaker.

I stand

on March 28, what would have been the 74th birthday of Michael John Jones –

father, grandfather, brother, uncle, visionary filmmaker, inspirer and mentor

especially of young people – had Mike lived two more weeks.

His

untimely death has brought to the general public the man behind the scenes, the

co-founder of the filmmakers co-operative, NIFCO, known to his peers as the

godfather of filmmaking in this province – a multi-million dollar industry now

that began with the iconic The Adventure

of Faustus Bidgood , the making of which in itself was an adventure. As

described by brother Andy Jones, “the crazy best outta control scariest most

passionate thing I have ever done and the closest attempt at pure art that I was

ever involved in.” What a description of Mike's life and work.

I ask

the Members of this House to join Mike's family, friends and colleagues in the

film industry as they celebrate his life and grieve the loss of this vital

person.

Thank

you, Mr. Speaker.

SOME HON. MEMBERS:

Hear, hear!

MR. SPEAKER:

The hon. the Member for the

District of Virginia Waters - Pleasantville.

MR. B. DAVIS:

Thank you, Mr. Speaker.

I, too,

would like to welcome the students and staff of St. Paul's.

I rise

in this hon. House to congratulate the students and staff of St. Paul's Junior

High on the fantastic Spring Fling this past weekend. This celebration is an

annual event organized by the students each spring with close to 400 people from

the community in attendance and it was a resounding success.

With the

theme, Movie Music and More, the students played classic numbers such as the

Mission Impossible theme song to more recent songs like How Far I'll Go, from

Moana . From small groups performances

and a cappella choir to string and percussion ensembles, the talent shown by

these students is amazing and keeps getting better.

This

show had the audience laughing and singing along, making it an enjoyable

afternoon for everyone involved. All in attendance were treated to a wonderful

assortment of desserts to enjoy as well as numerous unique auction items. It was

an exciting end to a magnificent event. The Spring Fling would not have been

possible without the dedication and commitment of the entire school community.

Thank

you to the students, teachers, staff and all volunteers who were involved in

this first-class production. Always remember: Students don't care how much you

know until they know how much you care.

Thank

you.

SOME HON. MEMBERS:

Hear, hear!

MR. SPEAKER:

The hon. the Member for the

District of

Cape St. Francis.

MR.

K. PARSONS:

Thank you very much, Mr. Speaker.

I rise today to congratulate the Northeast Eagles who,

on March 6, edged past the St. John's Caps to win the Don Johnson Hockey League

Atom B crown.

Mr. Speaker, it was a very special win for the Eagles,

not only because it was the first time the team has won from the Northeast

Eagles Minor Hockey Association, the crown, but it was also winning in front of

their hometown fans, and a great crowd it was at the Jack Byrne Arena.

The Northeast Eagles consist of nine and 10 year old

children from Torbay, Flatrock, Logy Bay-Middle Cove-Outer Cove, Pouch Cove and

Portugal Cove-St. Philips.

Members of the winning team were: Evan Adams, Cameron

Boland, Sam Chaulk, Ethan Fardy, Maria Groves, Alex Hickey, Drew Hudson, Olivia

King, Alexander Maynard, Lucas Mitchelmore, Ryan Mouland, Dawson Parsons, Owen

Parsons, Liam Rose, Nathan Ross, AJ Simms and Mark Youden. This wonderful group

was coached by Keith Maynard, Blair Boland and Ian Rose.

Mr. Speaker, the Eagles were already having a great

season. In January they won gold at the Canadian Hockey Enterprise tournament in

Montreal.

I ask all hon. Members to join me in congratulating the

Northeast Eagles on a successful season and wishing the team good luck in their

upcoming provincial tournament in Harbour Grace this Easter.

Thank you.

SOME HON. MEMBERS:

Hear, hear!

MR.

SPEAKER:

Statements by Ministers.

Statements by Ministers

MR. SPEAKER:

The hon. the Minister of

Fisheries and Land Resources.

MR. BYRNE:

The incredible outdoor

heritage we all share in Newfoundland and Labrador is a source of both pride and

enjoyment for so many of our province's outdoor enthusiasts.

Mr.

Speaker, to ensure this common heritage is made even more accessible to us all,

our government has made a number of progressive changes to expand hunting

opportunities and benefits to even more Newfoundland and Labradorians.

lowering the hunting age from 18 to 16 for big game, and 16 to 12 for small

game, Mr. Speaker, we bring youth closer to the resource while they learn

valuable life and conservation lessons from adult mentors who accompany them in

the field. We've improved access to hunting for people with disabilities by

amending the designated hunter regulations. We adjusted the big game licence

draw so people can apply earlier.

I remind

everyone, Mr. Speaker, in this House and outside, that the deadline for

submitting big game licence draw applications is tomorrow, March 29, at 4:30

p.m. Eligible hunters are encouraged to return completed applications to the

department offices, or apply online, which provides immediate confirmation that

the application has been received and is the quickest way to apply.

Mr.

Speaker, we are on target to print and mail notices of successful applicants by

early May of this year.

We are

also ensuring big game harvests continue to be available to community groups.

This year, a letter from the executive of the community group in question will

be required before a licence will be issued. This ensures the integrity of each

application and increasing our focus on conversation.

The

2018-19 Hunting & Trapping Guide , Mr.

Speaker, is now available online and can be viewed on mobile devices. Details of

the changes and information on regulations and safe hunting practices are

available now with the click of a button.

Mr.

Speaker, being able to spend time outdoors – whether in solitude, or with family

and friends, passing on the enjoyment, the life skills of hunting and trapping

and sharing our common outdoor heritage, is very important to us all. I even

believe it's what defines us as who we are as Newfoundlanders and Labradorians.

Thank

you very much, Mr. Speaker.

SOME HON. MEMBERS:

Hear, hear!

MR. SPEAKER:

The hon. the Member for Mount

Pearl North.

MR. LESTER:

Mr. Speaker, I'd like to

thank the minister for an advance copy of his statement. The Official Opposition

agrees with the concepts and prerogatives put forth by your department. The

lowering of age, in particular, is a responsible manner that can be beneficial

to our province's youth, as hunting is an important aspect of our cultural

fabric.

As was

noted, it promotes valuable life and conservation lessons throughout our

society, but of course it must be done through appropriate mentorship and

guidance from experienced adults.

Mr.

Speaker, while these are positive moves, the minister can't lose focus on other

key parts of his department. Issues concerning our province's caribou herds need

immediate attention, as do concerning reports regarding lack of enforcement on

our province's rivers.

So I say

to the minister, great job, take a moment to pat yourself on the back, but do

not take too much time because there's much work to be done.

Thank

you, Mr. Speaker.

SOME HON. MEMBERS:

Hear, hear!

MR. SPEAKER:

The hon. the Leader of the

Third Party.

MS. MICHAEL:

Thank you very much, Mr.

Speaker.

I, too,

thank the minister for the advance copy of his statement. It's great to see

youth and people with disabilities being given greater opportunities to embrace

our tradition of hunting, trapping and living off the land, particularly among

indigenous communities.

While

adult mentors are essential in teaching youth valuable life and conservation

lessons, government also has a role in ensuring all those who take

part in this

tradition are educated and knowledgeable on the appropriate safety precautions.

I wish

all those taking part this year a safe and successful hunting season.

Thank

you, Mr. Speaker.

SOME HON. MEMBERS:

Hear, hear!

MR. SPEAKER:

Further statements by

ministers?

The hon.

the Minister of Transportation and Works.

MR. CROCKER:

Mr. Speaker, I rise in this hon. House today to highlight initiatives undertaken

by the Department of Transportation and Works for increasing highway safety over

the winter season.

Earlier

this month, we expanded the Provincial Plow Tracker service to include all

depots on the Island part of the province and will continue to work to expand

this service to the Labrador region.

This

service has seen significant use this year and is a useful tool to help

motorists plan safer trips during the winter months.

recent weeks, we expanded our use of technology to help motorists make informed

decisions before travelling by adding two new highway cameras – one on the

Trans-Canada Highway at Whitbourne and another on Route 210 near Terrenceville –

for a total of 33 highway cameras motorists can now view online. We will be

adding an additional four cameras in the coming year.

This

year, we also introduced the province's first-ever tow plow on the Avalon

Peninsula – an innovative piece of equipment that plows and salts two lanes at

the same time. This is an initiative we will be expanding on for the next winter

season.

Mr.

Speaker, in Budget 2016 , we announced

we would

schedule overnight snow clearing shifts on nights when weather

conditions warranted it. Crews throughout the 13 routes were out overnight more

than 200 times this season. We also took advantage of mild temperatures during

the day to make road repairs that would otherwise not be possible in colder

temperatures.

Mr.

Speaker, even though winter has ended and spring is upon us, we encourage

motorists to continue to prepare for winter driving conditions, as we all know

too well that inclement weather can still lead to hazardous driving conditions

in Newfoundland and Labrador – even in April and May.

closing, Mr. Speaker, we should all commend the efforts of our more than 700

professionals who work at all hours and in severe conditions to keep our

provinces highways safe and clear.

Thank

you very much, Mr. Speaker.

SOME HON. MEMBERS:

Hear, hear!

MR. SPEAKER:

The hon. the Member for the

District of Conception Bay South.

MR. PETTEN:

Thank you, Mr. Speaker.

I want

to thank the minister for an advance copy of his statement and for the update on

the winter maintenance activities. Mr. Speaker, we are always pleased to hear

any practices of services that will improve road safety for the travelling

public in our province.

The plow

tracker is a useful tool and the additional highway cameras can be used

throughout the year to evaluate highway conditions. I was interested to hear the

snow clearing crews were out overnight more than 200 times this season. This

provides further evidence that your cuts to 24-hour snow clearing was an

ill-advised decision.

I look

forward now to the summer maintenance activities and seeing the many, many

potholes in our province disappear.

Thank

you very much, Mr. Speaker.

SOME HON. MEMBERS:

Hear, hear!

MR. SPEAKER:

The hon. the Leader of the

Third Party.

MS. MICHAEL:

Thank you very much, Mr.

Speaker.

I, too,

thank the minister for the advance copy of his statement.

SOME HON. MEMBERS:

Oh, oh!

MR. SPEAKER:

Order, please!

MS. MICHAEL:

It's good to see these new

initiatives. I'd be interested, however, in seeing numbers on how many are

accessing the online plow tracker service. I think it's a good service. I'd like

to know how many are using it.

I hope

the 200 overnight snow-clearing shifts were enough to keep our roads safe. That

doesn't tell me anything, Mr. Speaker. People often have no choice when they

have to travel the highways and they have to know that the roads are safe at all

times.

Most of

all, I commend the 700 professionals who do work night and day to keep motorists

safe, often under very trying conditions.

Thank

you very much, Mr. Speaker.

MR. SPEAKER:

Further statements by

ministers?

The hon.

the Minister of Advanced Education,