Volume 3 PROVINCE OF NEWFOUNDLAND THIRTY-SIXTH GENERAL ASSEMBLY OF NEWFOUNDLAND 3rd. Session VERBATIM REPORT TUESDAY, MAY 14, 1974 SPEAKER: THE HONOURABLE JAMES M. RUSSELL Number 70

May 14, 1974 The Rouse met at 3:00 P.M. Mr. Speaker in the Chair. Tape No. 1625 MR. SPEAKER: The honourable the Premier. ------- HON. F. D. MOORES, PREMIER: Mr. Speaker, it is with a great NM - 1 deal of pleasure that I rise to recognize the accomplishments of a Newfoundland native son and to pay tribute to the tenacity and dedication that has brought him to the position he holds today.

I am talking about Clarence Wiseman, who has served as Commissioner of the Salvation Army in Canada and Bermuda since 1967, - and who has been designated to become the World Leader of that great organization during this coming summmer. Commissioner Wiseman was born in Morton's Harbour in 1907 and his forty year career began at the Army's training college in Toronto. He became generally known in Newfoundland but he was the first chaplin from his organization, the Salvation Army, to go overseas with the Canadian Army during the Second World War.

During the war he served in Europe, the Middle East and Asia, returning to Canada in 1945. He became Territorial Commander for East Africa in 1960 and in 1962 was made Principal of the Army's International Training College in London. Commissioner Wiseman is married and bas two children. In addition to his service as head of the Army in Canada, Commissioner Wiseman has served in Newfoundland for eight years. He will be honoured on several occasions in this Province during the month of July this year.

I know all members of this honourable Rouse will join with me in congratulating this great Newfoundlander on his contribution to the well­ being of the world and to Connnissioner and Mrs. Wiseman, all the best in their future endeavours. MR. SPEAKER: The honourable member for Hermitage. MR. SIMMONS: Mr. Speaker, I should like to add a comment or two to what the Premier has said in reference to a very great Newfoundiander, a gentleman that it has been my privilege to know extremely well over the years, General Clarence Wiseman. The Premier has indicated something of his background in this province. 6080

'Mav 14, 19 74 Tape No. 1625 NM - 2 Just let me say that he has certainly endeared himself to the hearts of many thousands of Newfoundlanders, not only Salvationists ~ut people generally throughout the province, during his eight years here as Colonel and Commander in Newfoundland from 1949 to 1957 and suhsequently on his visits to Newfoundland as the Field Secretary for the Army in Canada, then as the Chief Secretary of the Army in Canada and the last few years as the Commissioner, the Chie.f of the Army' s operation in Canada.

In his new job,which he takes over in July, the new General, as the Premier has pointed out, a native born Newfoundlander, will have charge of the Armv's ope ration and its 2.5 million people throughout ninety or ninety-one countries of the free world. It is a great tribute to a very great Newfoundlander and it is a great honour that Newfoundland should have one of its outstanding native sons to rise to the very head of the orp.anization and the cause to which he has chosen to devote his lHe.

I certainly endorse what the Premier said and take very much pleasure in saluting a very great Christian gentleman. ~ NF~RY:_ Mr. Speaker, I would like to get a plup. in here for the ~.c. 's, Sir. It has been drawn to the attention of the House, Sir, that another outstanding Newfoundlander,in the person of Bishop Carew, was just given a new appointment, representing the Vatican in the Holy Lands. Bishop Carew I think is well know in this province. I believe the government, the previous administration, had a state banquet for Bi s hop Carew when he was elevated to his high post. where it was he was - !-IR. WM.

ROWE: Inaudible. I forget now "'R . NEARY· Yes , that is ri~ht " Rip.ht! That is right. So, Sir, I am sure that the members of the House will join with me in extending sincere good wishes and good luck to Bishop Carew in his new undertaking. MR. SPEAKER: The honourable Minister of Education. - ------- · HON. r. ._O'ITE.~ EI!-1ER1 Minister of Educati on : Mr . Speaker, I helieve this is ecclesiastical day or ecumenical day . Certainly on behalf of honourable members on this side we are all pleased to be associated with the

May 14, 1974 Tape No. 1625 NM - 3 views expressed by the honourable gentleman from Bell Island in congratulating Bishop Carew who of course,as I think most of the people know, has had an extremely distinguished, illustrious career in the service of the Roman Catholic Church and in the service of humanity. Of course he has relatives in Newfoundland. His sister many members might know, Miss Helen Carew, who was Secretary to the President of the University for many years and is now the Secretary for the Board of Regents.

Certainly all members of the House are pleased to be associated with the views expressed in congratulating Bishop Carew on his recent appointment. MR. WM. ROWE : Mr. Speaker, may I suggest, Sir, undoubtedly the Premier would want to do it, but may I suggest that the Premier, seconded by perhaps my colleague from Hermitage, with regard to General Wiseman, and whatever wants to be done with regard to the other reverend gentleman referred to, Bishop Carew, that the Speaker be directed to write both these reverend gentleman with best wishes, commendation, congratulations, whatever the terms are on such occasions. MR.

SPEAKER: The honourable the Premier. MR. MOORES: Mr. Speaker, a telegram was sent this morning on behalf of the government but certainly the wishes of the House, through yourself, would certainly be in order for that side of the House, and I would thank the member for White Bay South for the idea. MR. SPEAKER: I shall forward a letter to each of these distinguished gentleman on behalf of the House of Assembly. PETITIONS: MR. SPEAKER: The honourable member for Trinity North. MR. C. BRETT: Mr.

Speaker, I beg leave of the House to present a petition on behalf of some 300 resiclents of the Communities of Hillview, Hatchet Cove and St. ,Jones 1-Tithin, in my District of Trinity North. The prayer of the petition is as follows, "We the undersigned, do humbly petition the Minister of the Department of Transportation and Communications to relocate hazardous portions of the road between the Trans Canada Highway and St. Jones Within, a distance of twelve miles, includin~ three towns, Hillview, Ratchet Cove and St. Jones Within. 6082

' 1av 14, 1974 Tape 'lo. 1625 This road is the only means of transportation for the children of these three ahove towns mentioned, to and from school hv bus, also en Rnd frnn- work and hospital. As this ro,id is in a serious dilapidated and hazardous condition, we do most humbly pray that you wou.ld give chis your immediate and earnest attention,to have the !ihove road relocated, un,i:raded and !)aved at the earliest possible cfrte. Thank you for your kind attention to this matter. Your humble neti tj_oners." }'.oP, "r. <;peaker, in sunporting the petition I would like to make the following points.

First of all T think this particular word "relocate " T do not know if it is a poor choice of words but I think what thev are referr1np to here is that there are some very narrow, winding turns in this

section of road and also the people in the Hillview Area have been looking for a new access to the Trans Canada ever since the existin p. cme was built, probably hack in 1965. That is the year when they had the slo"an, "We will finish the drive." Anyway, I think this is what they mean by relocate. The roads in this area, Sir, have,to the best of my knowledge, never been couched since they were built. Certainly it was lonp before I came on the political scene, many, many years before.

I feel that they should have been rebuilt and naved when the Trans Canada was completed thf>re in 1%5 ari<l it rn'l!?ht have then,had the people from this area had .some strong representation in the House of Ai;sembly at the time, which T helieve they d1.cl not. The lo,.rer

section of this area talked ahout, Hatchet Cove and St. Johnes Within, thii, probahly is even worse than up around the settlements of Hillview, Deep Rip.ht and so on. The road was dozed out down there quite a number of years ago, particularly between Hatchet Cove and St. Jones. l do not think it has ever been touched since. lt is a little more than a cow path, harcly fit to travel over and as was outlined in the prayer of che petition, Sir, they have to commute dailv to school, to work and so on and so forth. Sol would hope, Sir, the ROVernment in its wisdom will see fit to, if not pave it then certainly to start some reconstruction,upp.rading

May 14, 1974 Tape No. 1625 on this road this year. I ask that the petition be tabled and referred to the department to which it relates. MR. SPEAKER: The honourable member for Labrador North. NM - 5 MR. WOODWARD: Mr. Speaker, we on this side of the House support the petition that was presented by the member for Trinity North and the plea of the petitioners to have some of the road relocated because of the hazardous conditions and the worn out conditions of the road. Maybe the member do not seem to know when the roads were built - they were built maybe before he was born, were they not? possible.

That is But he says, "With the strong representation that they had under the previous government they did not see fit to upgrade or relocate the roads." Now I suspect,with the strong representation that we have with the honourable member in government, Mr. Speaker, I suggest that he has an in with the Finance Minister and the Minister of Transportation and Communications , we would like to see, Sir, that he will use his influence with his colleagues in Cabinet to see that there are sufficient funds provided this year to upgrade the roads and to meet the needs of the people in this area. MR.

SPEAKER: It has just been brought to my attention that we have in the galleries from the Municipality of Badger, Mayor Greg Colbourne, Councillors Joe Davis and William Stuckless. On behalf of all honourable members I would like to welcome you gentlemen to the galleries today and trust that your visit here is most interesting. REPORTS OF STANDING AND SPECIAL COMMITTEES: MR . SPEAKER: The honourable Minister of Industrial Development. MR . DOODY: I would like to table the Teshmont and Zinder Report on the Lower Churchill studies • Have you got a couple of young gentlemen there who can lug this onto the tables?

Just a minute now. this mi~ht be a kind of a do-it-yourself kit. Also the Shawmont Report on the Alternative Methods of Meeting the Load Growth on the Island of Newfoundland is here too. So I do not have copies for all the members but maybe we will try to work out a system of getting them for them. If 6084

"'ay 14, 1974 Tape No. 1625 NM - 6 anybody is really interested in reading it all, we shall see what we can do. ORAL QUESTIONS: MR.~EAKER: The honourable member for Labrador South. ~---.:"~R.!_I~:_ 'lr. Speaker, in the absence of the honourable 'linister of Justice J would like to direct a question to the honourable the Premier, I wonder if he can report to the House what progress might have been made on the Labrador Royal Commission Report which was due out two weeks ago I believe? MR~"!QOBcES: Mr.

Speaker, I received the synopsis really which was done because,as the honourable member for Labrador South knows, there were some seven volumes altopether. The synopsis I received just two days ago. It will be presented to Cabinet I think tomorrow. I see no reason where thereafter, sometime in the very near future, it should not be tabled in this House. MR. WOOD1,ARD: It will not be tabled before the House closes. MR. MOORES: That, Mr. Speaker, depends on when the House closes. MR. ~~SHALL: It never closes. It has never been closed. MR. SPEAKER: The honourable member for Bell Island . 'ffi. N1'~<1.P.Y: Mr.

Speaker, I wonder if the honourable and stubborn Minister of Agriculture and Forestry could indicate to the House whether his department or his government are now going to lift the land freeze in the greater St. John's Area,now that people are kicking up quite a fuss about j_ t and that the construction season is upon us. 'IR. SPEAKER: I would like to say that question is probably out of order, that the phr2seology used by the honourable member for Bell Island at the beF;inning he dispensed. ~-__!,lEARY: That is the only way I know how. ~IJ': SPEAKER: The honourable Minister of Fores try and AF;riculture. HON.

L MA_YNARD. Minister of 'Forestry and Agriculture: Well, "Ir. Speaker, the stuhborn Hinister will have to renlv. The situation is that we, as I have said before, have very little intention of lifting the land freeze as such. I did indicate that we would be doinr, a detailed soils analysi~

May 14, 1974 Tape No. 1625 NM - 7 survey in all the St. John's urban region area or the Northeast Avalon as soon as the snow is gone. We have i;;tarted that, We have had people on it for the last three weeks. They told me that it would take probably another four weeks to give a total analysis of the St. John's Area. At that time I will be making a submission to government as to what the future areas might be to be retained under Land Development Control. MR.

NF..ARY: Would the minister indicate whether it is the minister's own officials, the minister's own staff who are doing this survey or is it contracted out to a private firm, this soil analysis survey that the minister is talking about? MR. MAYNARD: No, the soils analysis people have been attached to our own staff for a ntnnber of years, Mr. Speaker. MR. NEARY: Mr. Speaker, supplementary; would the minister indicate to the House what recourse the individuals have now who feel that they have a grievance·?

When they want to build a house or develop their land for some other reason, do they have to still apply to the minister? Is there any recourse to appeal? MR. MAY!ITAlm, The recourse in the application is made in exactly the same way now as it has been for the last six to eight months, Mr. Speaker. A various number of people have appealed to me, The division of the Advisory Board has been set up to look at each application.

A number of applications have been approved by me,after being turned down by the Advisory Board for various reasons1 a number of applications have been rejected, But the procedure now is exactly the same as it was before. What procedure will be used,after the soil analysis has been determined and new boundaries if necessary have been determined, will be announced at that time. MR. NEARY: Mr. Speaker, another supolementary to the minister, Sir, this is a very important matter.

Would the minister indicate if his department are now in a position to purchase any of this land, If the owners of the land want to dispose of it and sell it to the government at the going price, 6086

'May 14, 1974 Tape No. 1625 NM - 8 whatever that is, will the minister's department purchase the land from these owners? 1"11<. MAYNARD: There has been no decision made by government yet, Mr. Speaker, as to the future purchase of land in the agricultural develonment area. MR. t:FARY: "r.

Speaker, a question for the honourable the Premier, On the unemployment figures in Newfoundland, up 2.6 per cent or 4,oon more people unemployed this year than at the same time last year, would the Premier indicate what steps his government are taking to deal with this record unemployment in Newfoundland for this time of year1 ~- ~OORES: Mr. Speaker, first of all,as the honourable member well knows, the unel"nloyment rate is down from last month, not as much as I would like to see it certainly but it is down and also there were a great many more people employed this year than there were this month last year.

It is our intention, with the seasonal nature of our work, in che fisheries for instance, to try to get as much year-around employment as we can. ~r. Speaker, the answer to that question,as the honourable memher well knows, involves every area of the economic society, Through development of the Lower Churchill, through forestry pror,rammes, this government is doing everything possible to try to get year-around jobs with some security and some stability to them.and Mr.

Speaker, after the industrial development policy of the past, it has taken a great deal of effort and a lot of time to try to put some order into the chaos that we inherited so~e two years ago. MR. NEARY: J indicated earlier that the rate of unemployment this year is 4,000 - there are 4,000 more Newfoundlanders unemployed now than this time last year. Is the Premier aware that the vocational schools all over the province and che College of Trades and the Collepe of Fisheries will he turning out students and the high schools within the next month or two?

Will the Premier indicate if his administration are taking any extraordinary measures to try to find jobs for these people or to create work for all these students that will be corning out of schoolsc 6087

Nay 14, 1974 Tape No. 1625 NM - 9 MR. MOORES: Not only che students, Mr. Speaker, but also the adult population that have been unemployed during the winter and are at the present time. There will be programmes in virtually every department and every area, to try to get the full employment as quickly as possible. MR. NEARY: Mr. Speaker, supplementary, I have been trying to squeeze out of the Premier for the last few weeks the number of men who will be actually employed on the construction of the Lower Churchill this year.

Could the Premier now indicate, this is,several weeks have gone by, how many Newfoundlanders will be employed down on the Lower Churchill this year? MR. MOORES: Hopefully all that will be employed will be Newfoundlanders,this year. MR. KEARY: How many? MR. MOORES: Mr. Speaker, the honourable member for Bell Island well knows, as does this House and the public of the province, that in order to get the Lower Churchill Falls project u~derway it takes a tremendous amount of effort.

If you take the transmission line which we are negotiating now with the federal government and the power plant itself, the inter-island tie, and all the others, we are talking in excess of $1 billion. The financing for that project has to be done. All I can say, Mr. Speaker and I say this in all sincerity, is that this government is working as fast and as hard as we possibly can to bring that very important project to fruition as quiclly as possible. MR. NEARY: The Premier probably misunderstood my question, Mr. Speaker, so I would like to repeat the question again.

I fully appreciate what the Premier said because Don Jamieson told us all that yesterday on one of the radio stations, about financing the road and the transmission line,but Mr, Speaker, would the Premier indicate and if he is not in a position to tell the House perhaps he could tell us when he will be in a position to tell the Bouse how many men, whether they are Newfoundlanders or Mainlanders, how many will be employed on the Lower Churchill this year? Will it be 100, 200, 500, 1,000, how many? i'!R. MOORES: Mr. Speaker, the honourable member for Bell Island refers to 6088

May 14, 1974 Tape No. 1625 NM - 10 what Mr. Jamieson said on the air yesterday. The member for Bell Island obviously did not read the Budget Speech where it said that 600 oeople would be employed in 1974-1975. MR. NEARY: Okay, Sir, that is fine. Now a supplementary question. Would the Premier indicate what kind of work it will be? Will it be survey teRms? How many will be Newfoundlanders? MR. MOORES: ~r.

Speaker, if I might, this will be the last time I will reply to this sort of questioning at this stage because the honourable member well knows, until the engineering teams move in, until it is decided exactly what drilling has to be done, what survey work, what road work, what right-of-way cutting, what drilling, all that is the engineering firm's responsibility, he knows darn well that there is no way anyone in this House could know the answer to this sort of question. I would suggest to the member for Bell Island he is becoming very oicayune at this time. MR. NEARY: Mr. Speaker, I am being very serious.

At the rate of unemployment we have we should be concerned. I would like to put another question and another subject to the honourable the Premier, Can the Premier assure the people of this province that there will not be a repeat of Labrador South and Hermitage in the misuse of government aircraft and helicopters and planes and civil servants in the federal campaign that is coming up? MR. SPEAKER: Order please! MR. NEARY: Or what steps the administration will take to reimburse the public treasury if there is a 6089

May 14, 1974 Tape 1626 (afternoon) IB-1 misuse of government facilities, MR. SPEAKER: Order, please! The qi,.estion by the honourable member for Bell Island is a hypothetical question. The question is out of order. MR. NEARY: Well, Sir, there was an abuse. Would the Premier care to answer the question? MR. SPEAKER: The Chair has ruled that it is a hypothetical question. MR. NEARY: Well, Sir, let me put the question to the Permier again and perhaps this might not be so hypothetical.

Will the Premier indicate what steps his administration have taken to assure the people of this province that there will be no misuse nor abuse of government facilities in the federal campaign that is coming up? MR. MOORES: Mr. Speaker, the member for Bell Island has a problem in that he does not realize that there has been a change of government and this party pays its own way as opposed to what happened in this province in the past. MR. MARTIN: Mr. Speaker, I wish to direct a question to the honourable the Minister of Fisheries.

Since the spring fishery is about to gear up and get under way, there have been reports that a large number of fishing vessel owners, both small and large veesels,are having trouble getting fishing crews. I wonder if the minister can confirm whether or not this is correct? If it is correct, what steps are being taken to correct the situation? MR. H. COLLINS (MINISTER OF FISHERIES): Mr. Speaker, it has been a problem this past couple of years.

From the information which we have been able to get, it would seem that too many young men are being discouraged from entering into the fishery because of the inequities if one wants to, in the unemployment insurance programme. I can only tell the honourable member that we have made strong representation to the federal government. Prior to the federal election being called there was every indication that a new programme was about to be introduced. I am optimistic that a new programme will be introduced but in view of the election I cannot say when. MR. MARTIN: I have a question, Mr.

Speaker, for the acting Minister of 6090

May 14 , 1974 Tape 1626 (afternoon) Highways. I wonder if he can indicate to the House whether or not the highway between L'Anse-au-Clair and Red Bay has been reopened after being closed this weekend? IB-2 HR. J.G. ROUSSEAU (MINISTER OF HIGHWAYS) (ACTING): We have had some problems up on the Northern Peninsula and Southern Labrador. There are some washouts. We have had some heavy rains. Apparently Saturday night there was some rain and last night there was some heavy rain. Everything is being done possible to keep the roads open. During all daylight hours we have the equipment at work up there.

We expect that within two or three days, hopefully when the waters subside, that we will be able to keep them open in a better way than they are now. They are in passable shape right now and within two or three days we hope they will be in much better shape. MR. MARTIN: Supplementary to that, Mr. Speaker: There have been reports from the district that the local highways depot foreman was instructed not to put his crew on too much overtime. I wonder can the minister comment on that? Whether or not it is true and if this is going to hamper the maintenance programme? MR.

ROUSSEAU : In an emergency situation the foreman in any area, of course, knows much more of the situation than the people here in St. John's. So, by and large, as I recall from a meeting I had this morning with the officials, if there be an emergency situation, then he can use what equipment he needs within a reasonable time span. If extra work is needed for a washout or for an emergency, certainly he can be authorized,because phones are near to do so, as much as he needs in an emergency situation.

Otherwise, of course, they have to use the best judgement and keep the roads passable in a situation like we have now or keep them in as good a shape as possible when we do not have the situation which is now occurring on the Southern Coast of Labrador. !!R· WOODWARD: Mr. Speaker, I would like to direct a question to the Minister of Industrial Development. I would like to know if the minister can tell the House if in the programme for the Lower Churchill this year, included in that work programme, if the road from the Lower Churchill to the Upper Churchill will be upgraded and made serviceable 6091

May 14, 1974 Tape 1626 this summer? HON. W. DOODY(MINISTER OF INDUSTRIAL DEVELOPMENT): Yes, Mr. Speaker, it is our intention to do that and it is part of the preliminary work on the Lower Churchill. ORDERS OF THE DAY : IB-3 On motion of the Hon. Minister of Education, a bill, "An Act Further To Amend The Local School Tax Act," read a first time, ordered read a second time on tomorrow. On motion of the Hon. Minister of Municipal Affairs and Housing, a bill, ;;An Act Further To Amend The Local Government Act, 1972, 11 read a first time, ordered read a second time on tomorrow. On motion of the Hon.

Minister of Justice, a bill, "An Act To Amend, Revise And Consolidate The Law Respecting The St. John's Memorial Stadium," read a first time, ordered read a second time on tomorrow. On motion of the Hon. Minister of Justice, a bill, "An Act Further To Amend The Agreements Ratified By The Avalon Telephone Company Act, 1938," read a first time, ordered read a second time on tomorrow. On motion of the Hon. Mr. Marshall, a bill, "An Act Respecting Certain Building Supplies," read a first time, ordered read a second time on tomorrow. On motion of the Hon.

Minister of Justice, a bill, "An Act To Amend The Motor Carrier Act," read a first time, ordered read a second time on tomorrow. On motion of the Hon. Minister of Justice, a bill, "An Act Further To Amend The Judicature Act," read a first time, ordered read a second t i me on tomorrow. On motion of the Ron. Minister of Justice, a bill, "An Act Further To Amend The Grand Falls Hospital (Management) Act, 1961,·· read a first time, ordered read a second time on tomorrow. On lllOtion that the House resolve itself into Committee of Supply. Mr. Speaker left the Chair. MR . CHAIRMAN (MR. STAGG): Order, please! 6092

May 14, 1974 Tape 1626 IB-4 Head (1501-01), Minister's Office, Industrial Development. We have twenty-three minutes remaining. MR. DOODY: The honourable member for White Bay South - Y,r. Chairman, will you tell the honourable member for Bell Island to control himself? He is delaying the proceedings of the House. The questions raised by the member for White Bay South last evening,as we closed,dealt with the Lower Churchill project and the availability of alternate sources of energy. Toward th~t end we table this afternoon the Shawmont study on the alternate sources of energy.

So, I think that it would not be in the interest of the time that is available to go into it in any detail. We can go into that in the main bit. He spoke about the possibility of the discovery of oil off­ shore and what effect this would have on the energy situation here in the province. Obviously if we can get cheap or relatively cheaP, reliable hydro power here on the island,from the Labrador area, it would be far more beneficial both in terms of environmental quality of life in the province of Newfoundland, both in Labrador and on the island,and in terms of the economics of the thing.

If oil continue to soar in price as it has been doing, it shall be far more beneficial to us, I think, for us to sell it at the world prices and use cheaper hydro energy here at home. This appears to be the consensus of opinion of the people who are knowledgeable in these areas and it is certainly one which we are looking at very closely. On the economics of the building of the project itself, the transmission line, the site, the inter-tie, the crossing - it is absolutely true that the inter-strait and the soaring escalation costs are a source of worry and a source of concern.

I am sure they are in every facet of life. Every business enterprise and every individual has been injured and affected by it. Once again it is a relative thing. As the cost of the development of the project increases, it is equally certain that the cost of alternate sources of energy will increase in direct proportion to these. It would be a great deal more beneficial to us if somebody 6093

Uay 14, 1974 Tape 1626 IB-5 or some system could be found to control soaring inflation and exorbitant interest costs. In a general concept of the whole situation, it does not change our need for energy here on the island nor the need for the development of the Lower Churchill and the interest of the province as a whole. I do not lmow what else was raised here last evening but I am sure the member for White Bay South and some of his colleagues can question me on some other facets of it. MR. W.

ROWE: Ordinarily,if we were net going to be gagged in about twenty minutes, we could go into it at some length now and again at some length when the bill comes up,because it is such an important topic that we should spend some time on it. MR. DOODY: It will be in better shape for the study there. MR. W. ROWE: Unfortunately, we are being gagged and guillotined by the arrogant government majority in the House, Mr. Chairman. We cannot do much about it. So, to switch the topic rather drastically: Will the minister comment on the auditor's report to the shareholders of Burgeo Fish Industries Limited?

It is contained in the Province of Newfoundland,Accounts of Crown Corporate Agencies Boards and Authorities, etc., 1973,where Ridell Stead and Company,Chartered Accountants,say to the shareholders of Burgeo Fish Industries, "We have examined the balance sheet of Burgeo Fish Industries Limited as of May 31, 1973 and the statements of loss and deficit and source and application of funds for the year then ended and have obtained all the information, etc.

"We have obtained all the information and explanations we have required except that we have been unable to obtain a satisfactory explanation for a decrease in supermarket gross profit. Our examination included a general review of the accounting procedures and such tests of accounting and so on. Depreciation for the year has been calculated on original cost,affixed assets and not on appraisal value as required by generally accepted accounting principles . ' A couple of serious irregularities there, Mr. Chairman. 6094

May 14, 1974 Tape 1626 IB-6 '"In our opinion and according to the best of our information and the explanation is given to us as shown by the books of the company, except for the effect of,one; excluding the appraisal increment from the calculation of depreciation ; and two, any adjustments which might have been required had the decrease in supermarket gross profit been satisfactorily explained, these financial statements are properly drawn so as to exhibit a true and correct view. ,. What happened in the Burgeo Fish Industries, Mr. Chairman?

Would the minister give us an explantion of two rather serious irregularities,I would submit,if this had been a privately o~med company. The shareholders would seem to have some cause for complaint. Since it is now a crown corporation, the shareholders being the ministers presumably who sit on the board and the ultimate shareholders being the people of Newfoundland , could the minister explain to our satisfaction, if possible, why these two irregularities occurred? MR. DOODY: Well, Mr.

Chairman, the supermarket gross profit picture decrease was accounted for by the fact that they had a rather serious fire down there the previous year. AN HONOURABLE MEJ'13ER: Inaudible. MR. DOODY: Pardon? Could I finish, Mr. Chainnan? There was a rather serious fire dot-m there during the year. The beauty salon went and the laundromat went and the supermarket went, the hardware store and the drygoods store and the whole bit and piece went.

During the interim while the insurance adjusters were doin g their survey or coming in to do the survey, while the stock-taking process was being done, there were some rather drastic shortages in stock discovered. Those things that had been some weeks prior were found no longer to be in existence. They disappeared . It would appear that some of the good people in Burgeo found opportunity to take advantage of the fact that there were great openings in op1ortunity in acquiring things at tremendously low cost.

So, not only does that in itself have a marked effect on the profits of the supermarket operation, when the thing opened up for business again, they found that sales in many commodities were down for several months. 609::i

~_ay 14, 1974 Tape 1626 IB-7 It would appear that many of the local people had found an opportunity to stock their homes with various and sundry items and there was a fire sale on there at the same time. When Ridell, Stead say that they are unable to obtain a satisfactory explanation, they mean exactly that, that they were never able to trace down all the missing inventory effects that were in there. AN HONOURABLE MEMBER: Inaudible. MR. DOODY: Yes, that is right. It would have made it a great deal easier for me but unfortunately Ridell, Stead did not see fit to do so.

AN HONOURf.BLE MEMBER: They are being gagged in fifteen minutes. MR. DOODY: In fifteen minutes time and all they want to do is talk about being gagged and they are not even interested in my supermarket down in Burgeo.

On the other thing, the depreciation being calculated on the original cost of the fixed assets and not on the appraisal value as required by generally accepted accounting principles, it says here on note five, "The depreciation which amounts to $131,342 for the year, if appraisal values had been used as the basis of calculation, depreciation would have amounted to ~644,000." So, what has been done there in actual fact is to lower the value of the place or the fixed assets by considerably less than is the standard practice .

This is a bookkeeping system that was followed for some reason best known to the accountants down there. I really have no other explanation for it than that. It is simply a bookkeeping item and it does not affect the profit and loss picture at all in the long run. MR . W. ROl,JE: The minister has given us an explanation which apparently Ridell, Stead, an esteemed firm of chartered accountants 1apparently did not accept. I do not know if the minister himself or the minister's officials gave this explanation to them or not. Anyway here we have the very damaging auditor's report with two glaring irregularities.

I will not pursue that, Sir, we do not have time. We are being gagged in f ifteen minutes by that honourable gentleman across the way there. 6096

May 14, 1974 Tape 1626 IB---4i MR. CROSBIE: We have been gagging for seventy-four. MR. W. ROWE: Now, Mr. Chairman, here that? Just an attempt - the lee Water Kid '' . ·crusty Crosbie " strikes again . How pleasant this committee is, Sir, when certain honourable gentlemen are away. MR. CROSBIE: Why did they spend twenty hours at my estimates? MIL W. ROWE: Because the honourable minister is ripping off the people of Newfcundland , another per cent increase in the sales tax. That is why. Is that not right,gentleman? Now, we will talk about it in the Budget Debate and when the bill comes up.

Let me t1ove on, Sir, to one or two other thin gs here. We are going to be gagg ed in a minute. Would the minister give us sort of a statu s report on Newfoundland

May 14, 1974 Tape 1627 (Afternoon) PK - 1 Forest Products. What is the situation there now from the government's standpoint, the government involvement? Also could he give us some kind of an idea as to how the Newfoundland and Labrador Development Cornoration is making out? Does the minister consider it to be successful or unsuccessful?

One of his supporters, the Member for Bonavista,got up in the Committee there some months or ,eeks ago and lashed out at the Newfoundland and Labrador Development Corporation saying that it was a horrible failure compared to the Rural Development Authority which he thought was a brilliant success. I would like to hear what the minister has to say about the Newfoundland and Labrador Development Corporation. How is it doing? Ia it successful? If not, quite as successful as it might be,whst changes are going to be made in the future.

You know, generally .what is the situation present and future of the Newfoundland and Labrador Development Corporation? MR. DOODY: Mr. Chairman, the Newfoundland and Labrador Development Corporation, in my estimation and the estimation of many people who have had occasion to use their services, is an excellent organization and it is doing an excellent job. It may be that there are people who feel that they have not lashed the money out with enough abandon and have not bee~ as carefree with the peoples funds as they wouid .like to see them.

I think that Frank Spencer and his people down there are doing an excellent job of assessing the various proposals that have come in to them and have winnowed out what in their opinion were the least desirable among them. It was set up as you know as a federal/provincial agency design to improve medium and small business in the province. Now the programmes are aimed at providing both debt and equity financing and to this exten t many oeople felt I suppose that equity was available, that it woul d be an excellent opportunity to get the full load of an operation or the full cost of an operation borne by the agency.

But to date they approved financing for forty-seven projec_ts involvi~2 over nearly $6 million in term loans and $600,000 in equity funding . These new businesses and expansions are located throughout 6098

May 14, 1974 Taoe 1627 (Afternoon) PK - 2 the province,which will provide 800 full-time jobs and about little less than 300 part-time jobs, seasonal jobs. They cover a pretty wide range of activities. There is over $1 million gone into the fishing industry, a little over $1 million in the forest industry, to larger or integrated sawmills. There is almost $1 million in mining. This went to the Green Bay ~ining Company which reactivated at Bunk Mine here in the province and is working quite well.

There is a firm that is producing such things as safety boots, alumin\1111 products, fur and leather clothing, in manufacturing generally. there is about $1.5 million in loans and there is little less than $1 million for tourism. There is a quarter of a million in loans for agriculture. These are plants providing further processing of poultry and vegetables and so on,and there is about a-half million dollars only in the serviced industries.

The corporation has not really encourage~ applications from the general service sector such as service stations or lounges or retail stores,due to the tremendous nU111ber of these that are already in existence in most areas. They are however anxious to ass1st companies engaged in specific or specialized services which are of an economic benefit in their own right or which facilitate the establishement of manufacturing and processing operations. As I say.the key part of this programme is the fact that equity financing is available.

This gives the corporation an opportunity to provide equity funding for people who do not have any money or very little money of their own to put in. Of course, they insist that some money be available even when they get involved in the equity side of it. The tremendous number of inquiries that originally came in, of course, have been winnowed out and weeded out to a relatively few but we had I think it was oretty well over 1,200 applications, informal applications.

These were all sent back to the people who sent them in; with regular application formR attached,which outlined the present information that was necessary and a brouchure explaining the functions of the corporation. I think there were less than ten per cent of these eventually came in as formal applications and these are pretty well all 6099

May 14, 1974 Tape 1627 (Afternoon) PK - 3 being processed now. This gives the corporation the opportunity to get more involved in its management help and assistance progranmes, that area of business assistance which is badly needed in the province and in which they are building up some expertise. Not only are they in the direct loan business, as I say, they also have a team of people available who can go to a company that appears to be in trouble and assist them with ~anagement help and advice.

They are also now in the position of searching out the business opportunities,snall maufacturing opportunities,and trying to interest the people of the province in getting involved in these things. I would seem to me,as I say,that the corporation is filling a very great need here in the province. They have not made as much noise perhaps as some other agencies of government. I think they have being running a pretty tight ship. I never heard any accusations of political bias nor any other type of accusations against them. I think they are running a good ship.

They have got an independent board of business people,who were jointly appointed by the federal and provincial ~overnment~ in the early stages. Now that had one shortcoming, in our estimation. All the board members were appointed from St. John's and it had certain deficiencies. Recently we have taken steps to expand the board and we are in the process of appointing three new members, one federal appointee and two provincial appointees who will be coming from outside of the St. John's Area. I know that that announcement will be made very thortly,as soon as the federal people give it their blessing.

Now I have at hand here the list of enterprises that have been assisted and of those that have been rejected and the reasons for them and so on. These can be made available to honourable members if they d$sire to see them. I hesitate to read them all out because I think we will not get through it in five minutes. Is it five minutes we have? MR. CHAIRMAN: The Member for Labrador North. MR. DOODY: Oh, I forgot one other thing_. It is the forest product bit. The operation5up there,as members well know,have been fraught with troubles. It has been the most difficult thing to get moving. Bowaters and Lundrigans 6.:oo

May 14, 1974 Tape 1627 (Afternoon) PK - 4 have had a difficult time with it. Government have gotten involved with loans. The mill was closed down, it was scheduled to reopen this month, to get back into production this month. They have a crew of men working in the woods. They have got them in there now for some time,getting a supply of logs ready. It appears from the projections or from the anticipation of our people on the board of directors that a brighter future appears in si~ht for the coming months for that thing. I cannot say that I am any more optimistic about it than that.

It does not appear to me to be the greatest answer to the sawmilling problems of the Province of Newfoundland. We have three or four others started,with the help of this Newfoundland and Labrador Development Corporation,which will, I think, do a great deal more for the 11.DDber industry of the province. The thing is moving along though. They have changed management and they have used the government loan to buy new equipment and re-equin the mill and partially re-finance the· operation; All I can say is at the present time they are getting back into operation.

In maybe a couple of months time we will be in a position to give a more detailed status report on it. MR. M. WOODWARD: Mr. Chairman, there are five minutes left. Just a quickie for the minister.

There appears to be some difference of opinion between the present developers of Churchill Falls, the BRINCO people,and the federal people and the province on the feasibility of bringing the power line across the Straits of Belle; if this be economically feasible or if they can do it,from a construction and an engineering point of view,to make it safe, So I want the minister maybe to tell the Committee, maybe a categorically yes or no, if his department or if his govermnent are satisfied that this can be done as a result of the present reports that they have filed in the Committee today? MR. DOODY: Yes, Mr.

Chairman, the Government of the Provin"ce is convinced on the evidence that has been presented to it, through the reports and studies that have been done,that it is both economically feasible and technically practical to bring the cable across the Straits 61.01

May 14, 1974 Tape 1627 (Afternoon) PK - 5 AN HON. MEMBER: The federal government - MR. DOODY: The federal government have not said that this is not so. What they have said is that they would like an opportunity to examine in depth the studies that have been done and to cross-examine the people who have done the studies in order that they can he as satisfied as we are on the project. They, like him, have not had as much access to the information as we have had. MR. WOODWARD: They go along with BRINCO; they are not satisfied from a technical point of view. MR. DOODY: Did BJUNCO say that it cannot be done? MR.

WOODWARD: BRINCO did not say it could be done or it could not be done. MR. DOODY: That is right •••• federal government. MR. t,IOQDWAIID: Have not satisfied themselves that it can be done either. MR. DOODY: That is right. MR. BARRY: They did not have anything to do with looking at the submarine crossings. BRINCO did not do a study on it. MR. WOODWARD: MR. BARRY: MR. DOODY: MR. WOODWARD: :MR. DOODY: MR. BAitRY: MR. DOODY: MR. lolOODWARD: MR. DOODY: MR. NEARY: Who did it? Our consultants. I tabled a study here this afternoon. Just the general terms.

No there is a huge - Why does he not read the report first and then - There is a huge technological - How many people are working down in the Straits of Belle Isle? I would have gone into more details but I got - It has been said, Sir, - AN HON. MEMBER: Inaudible. ~ . NF.ARY: It has been said, Mr. Chairman, - AN HON. MEMBER: Inaudible. MR. NEARY: Sir, I hope you are deducting all of this time when we are getting interruptions and interference from the other side. It

t#ay 14, 1974 Tape 1627 (Afternoon) PK - 6 has heen said, Hr. Chairman, that Joey Smallwood,the former Premier of this Province,was the best salesman that Newfoundland ever had. I do not think, Sir, that anybody can deny that. The man went out, promoted Newfoundland, sold people on the idea of coming into this province and developing this province. Now, Sir, all of that is changed, everything now is grinding to a halt but old Joey is still in there, Sir. We heard an example of that today when he wired the Premier, the present Premier of this Province,from Cuba.

Even when he was down there doing something that had nothing to do at all with government, wired the Premier to try and sell linerboard from Newfoundland to Cuba. AN HON. MEMBER: It had already been done. MR. NEARY: It was not done, Sir. It was not done. It was not done, Sir. AN HON. MEMBER: It took Joey to do it. MR. NEARY: It took Joey. It took Joey, ~r. Chairman, to do it. It is going to take somebody with Joey's thinking and Joey's philosophy to get this province back on the rails again and get her moving, get her moving forward again. AN HON. MEMBER: Inaudible. MR.

NEARY: I do not know who it will be but it will have to be somebody with the energy and the drive and the initiative and the understanding and the desire to do something for Newfoundland to get her back on the rails again. AN HON. MEMBER: • ••• Leadership. MR. NEARY: Sir, it is too bad that we are going to be gagged in another five or ten minutes, Sir, because this is a topic of this minister. Mr. Chairman, this minister has had a gentle ride in this Committee now for two years. I was hoping to get here last night - AN HON. MEMBER: Inaudible. MR. NEARY: Oh, yes, he is a witty individual. MR. W. N.

ROWE: A cagey guy. MR. NEARY: Cagey, Sir, and go<id personality but, Sir, look at what

May 14, 1974 Tape 1627 (Afternoon) PK - 7 that department has done in two years; absolutely nothing. Everything is grinding to a halt in this province. No imagination! No initiativel Nothing being done! Nothing! Nothing on the drawing boardl No wonder, Sir, we have the highest rate of unemployment at the present time that we have ever had in this province. Unemployment,at the moment eighteen point eight per cent , two point six per cent more than last year, over 4,000 Newfoundlanders, more Newfoundlanders unemployed at the present tillle than there was a year ago. MR. CHAIRMAN (STAGG): Order, please!

The seventy-five hours AN HON. MEMBER: Inaudible . MR. NEARY: By leave of the committee, Mt:. Chairman. MR. CHAIRMAN (STAGG): May the honourable gentleman have leave? MR. NEARY: May I have leave? MR. CHAIRMAN (STAGG) : Leave is not granted. MR. NEARY: The Minister of Mines and Energy says . yes, Sir. AN HON. MEMBER: Inaudible. MR. NEARY: By leave? MR. CHAIRMAN (STAGG): Order please! MR. NEARY: The Premier is the boss,not the nasty Minister without Portfolio. What does the Premier say? MR. MOORES: No overtime. MR. NEARY: No overtime!

We are being gaggedJ Well, Sir, I will tell you this that I will not sit in this Committee and watch these estimates go through without a debate. MR. CHAIRMAN: (STAGG): Order, please! Well in vie•~ of the fact that the honourable gentleman has left, it i s unnecessary for me to suggest that he resume his place. However for the benefit of all honourable gentlemen in tre Chamber and for anyone else who may wish to take note of it, when the Chairman or the Speaker stands it is customary in the parliamentary system that the person who has the floor res=e his place . We will now call each item.

There will be no debate under the ru!E. s. 6.~04

May 14, 1974 Tape no. 1628 Page 1 - MW On motion, Department of Industrial Development, 1501-01 through to 1506-06, carried. carried, On motion, Legislative, 201-01 through to 201-09-01, carried, On motion, Executive Council, 301-01 through to 305-08, carried, On motion,Department of Education, 601-01 through to 616-03-07, On motion, Department of Rehabilitation and Recreation, 901-01 through to 911-10, carried. AN HON. MEMBER: May we have a quorum call? MR. CHAIRMAN (Mr. Dunphy): bells. We do not have a quorum. Ring the Will the clerk count the committee please? We do have a quorum.

On motion, Department of Health, 1001-01 through to 1018-03, carried. MR. NEARY: There is no quorum in the cononittee, Mr. Chairman. MR. CHAIRMAN (Mr. Dunphy): Ring the bells. Will the clerk count the cononittee please? We do have a quorum. On motion, Department of Mines and Energy, 1101-01 through to 1105-05, carried. On motion, Department of Forestry and Agriculture, 1201 through to 1209-03, carried. On motion, Department of Tourism, 1301-01 through to 1308, carried. On motion, Department of Fisheries, 1401-01 through to 1408, carried.

On motion, Department of Public Works and Services, 1801-01 through to 1809-03-04, carried. On motion, Department of Provincial Affairs and Environment, 2001-01 through to 2008-05, carried, On motion that the committee rise, report progress and ask leave to sit again, Mr. Speaker returned to the Chair.

May 14, 1974 Tape 1629 Page 1 - NM MR. DUNPHY: Mr. Speaker, the Committee of Supply have considered the matters to them referred and report having passed certain items of expenditure under the following heads: Head XV, Industrial Development; Head II, Legislature; Head III, Executive Council; Head VI, Education; Head IX, Rehabilitation and Recreation; Head X, Health; Head XI, Mines and Energy; Head XII, Forestry and Agriculture, Head XIII, Tourism; Head XIV, Fisheries; Head XVIII, Public Works and Services; Read XX, Provincial Affairs and Environment, all items and ask leave to sit again.

On motion report received and adopted. Motion second reading of a bill, "An Act Further To Amend The Newfoundland Municipal Financing Corporation Act." MR. SPEAKER: The honourable Minister of Finance. MR. CROSBIE: Mr. Speaker, this is not a major amendment but it is one that is necessary in order to attempt to float a loan to the Newfoundland Municipal Financing Corporation this year.

The present legislation now permits the debentures or debenture stock perpetual or otherwise to be issued by that corporation for municipal loans and we want to add, "or any other securities whatsoever," and in two other places to add, "bonds and debentures or loan notes." The reason for that is because we are hoping to do an issue in the United States shortly and the people who are going to float the issue - MR. NEARY: Inaudible. MR. CROSBIE: We are going to float our bond issues, Mr, Speaker, wherever we can to raise money, hopefully in Canada and the United States.

In any event they want to loan the money and to have loan notes delinred rather than bonds or debentures. That is the purpose for the amendment. This corporation of course, Mr. Speaker, is the corporation that raises money for municipal purposes guaranteed by the government, water and sewerage systems and the like and a lot of that kind of work has been done in the last two years. We are hoping to have a $30 million issue during the present year and we hope during the next month or two. So that is the purpose for the amendment, 6.!.06

May 14, 1974 Tape 1630 (Afternoon) PK - 1 XR. SPEAKER: The Honourable Member for Labrador South. MR. M. ~.ARTIN: Mr. Speaker, I do not know why the honourable minister even bothers to get up and explain this. We might as well take the whole works and have it all passed after the digusting spectacle which we have .1ust witnessed. I do not see any point in debating any of the rest of it. Let it all go through. MR. SPEAKER: The honourahlP Member for White Bay South. MR. W. N. ROWE: I must say, Sir, the Member for Labrador South took the words right out of my mouth. It is exactly what I was going to say, Sir.

Here we are, Sir, the Minister of Finance makes a rollow mockery out of the parliamentary process by bringing in this bill pretending now that, you know, here is the House giving its authority to him to do this sort of thing. They allowed~a minute or two ago, hundreds of million of dollars of public money to go through without a whisper of debate or question or anything else. A digusting display, Mr. Speaker. A digusting displayf I rise to add my support to the sentiment expressed by the Member for Labrador South.

They might as well take all of these bills, I know this is what the government would want to do, this Bill No. 56 and all the rest of the bills and just have them passed in cabinet or perhaps even passed. That is the next logical step, Sir, pass them through cabinet first and have no reference to the House whatsoever. Then it would go to the kitchen cabinet, the Premier and one or two of his stalwarts, in which case the Minister of Finance would not have much say in what goes on, lacking political clout as he does.

Pretty soon we will have two people or three people in this province making all of the decisions affecting everyone. It is a logical progression of the arrogance, the digusting display shown by the government this afternoon in putting hundreds of millions of dollars of estimates through this House without debate or question. MR. NEARY: Mr. Speaker, I wish I could third what my honourable friend said, Sir, but I certainly concur with what both gentlemen said. Mr.

Speaker, the minister when he was introducing this bill let it slip out, Sir, that the government would taking to the bond market in the United States very shortly,to borrow the money that is needed there 6.:.07

May 14, 1974 Tape 1630 (Afternoon) PK - 2 and the municipal financing corporation.

Sir, that reminded me that only a few weeks ago I heard the same honourable minister state as a part of the philosophy and a part of the policy of his administration that from now on they were going to keep their money home, they were going to borrow money within the boundaries of Canada. teaving the impression that the poor old people of this province, Sir, they were not going to borrow Euro dollars any more, they were not going to borrow French francs and Germany marks and they were not going to go down in the United States and borrow any money. They were going to borrow it all in Canada.

The minister was boasting about the fact that the reputation of the government had been so - MR. SPEAKER: Order, please! The honourable Member for Bell Island I think is not being relevant to the principle of the bill as introduced by the Hon. Minister of Finance. MR. NEARY: We are talking about municipal borrowing, I believe, Sir. I do not know how I can be any more relevant, Your Honour. I am not questioning Your Honour's ruling. But, Sir, the minister did boast about the fact that the government had earned themselves such a reputation that they could borrow money now in Canada,for the first time, we were told.

Now we are told - how mq~h is the minister going to borrow down in the United States? AN HON. MEMBER: Inaudible. MR. NEARY: Fifteen, twenty, fifty, one hundred m:1.llion. How much? AN HON. MEMBER: Inaudible. MR. NEARY: I have eh? The minister did not just make a statement a few minutes ago that they were going on the bond market in the United States? AN HON. MEMBER: Inaudible. MR. NEARY: He only replied. Well, Sir, I thought I heard the minister make that statement; I could be wrong.

We certainly left a great foundation because the borrowing of this administration now, Sir, is at the rate of I think $1 million a day. Is it $1 million a dav? AN HON. MEMBER: Oh, yes, more than that. 6108

May 14, 1974 Tape 1630 (Afternoon) PK - 3 MR. NFARY: Not bad for a poor old orovince that was left bankrupt by Joey when he got kicked out. AN HON. MEMBER: We pulled her together again. MR. NEARY: Pulled her together? MR. W. N. ROWE: They had a bond issue about a week after they took power, $90 million. i!R_. SPEAKER: Order, please! MR. NEARY: But, Sir, I do not begrudge the municipal corporation, the loan corporation that money at all. We still have too many communities in this provincethat do not have the facilities of water and sewerage.and that is what this money is for, Mr. Chairman.

The money is to pay off loans and guarantees that have been out to municipalities and town councils to install water and sewerage. I do not think any of the money is for the road sharing programme, the road paving programme. lt is all for water and sewerage I would say, Mr. Chairman. I do not begrudge ~he municipalities this privilege a bit, Sir, but I could not help but commenting on that, Sir, could not help it. I hope we will hear no more of that kind of hypocrisy from the Minister of Finance.

We did leave this province in good shape otherwise the minister would be - he would not be over there now, Sir, he would have resigned or he would be with the NDP, he would not stay over there. AN HON. MEMBER: He would not be able to crawl. MR . SPEAKER: If the honourable minister speak now he closes the dehate. MR. CROSJ\lE: Mr. Speaker, I will just touch on a couple of the points made by members opposite. Well there were not really any points made. In respect to the Member for Labrador South,! do not know why he is acting in such a juvenile manner.

Seventy-five hours were allotted for consideration of the estimates. It is not the ~ault of the government nor members of the government, if members,of the official opposition in particular, choose to waste a tremendous amount of time on several departments. lf they choose to do that and did not want to go on to discuss the estimates of all the departments,then the responsibility surely rests on them not on the government. I think every provincial Gl09

May 14, 1974 Tape 1630 (Afternoon) PK - 4 legislature in Canada, Mr. Speaker, has a time-limit on the estimates and as the House Leader has pointed out there was only one ses.sion in the House of Assembly in Newfoundland since 1949 where longer than seventy-five hours was spent on the estimates, I think that was 1971 when we had a vigorous opposition that kept to the point,that had cogent criticism and that covered every department of government in I think eighty odd hours of debate.

So the Member for Labrador South should have directed his criticism where it should go,at the Member for Bell Island and one or two like him who insisted on wasting - AN HON. MEMBER: On a point of order, Mr. Si>eaker. MR. CROSBIE: I am answering a point, Hr. Speaker, that - MR. SIMMONS: On a point of order. MR. SPEAKER: Order, please! MR. SIMMONS: Is this relevant to the principle of the bill, Hr. Speaker? MR. CROSBIE: On that point of order, Mr. Speaker, I am answering the points that were made by the members opposite, Now I did not think that the point they were making was relevant.

We did not object since we could see that they wanted to make a point. Now the point has been answered. Surely it cannot be ruled out of order now when they were allowed to make these co11111ents themselves. MR. NEARY: On that point of order, Sir: The minister and all his colleagues had the opportunity, Sir, to stand on a point of order and - MR. EVANS: the time. MR. SPEAKER: MR. NEA.1!.Y: The honourable member is getting more ridiculous all Order, please! Mr.

Speaker, the minister did not stand on a point of order, Sir, he did not point out to Your Honour that anybody on this side of the House was being irrelevant. I would suggest, Sir, that if the minister be permitted to carry on, that the same privilege, the same scope be given members of this side of the House. The same rules apply to this side of the House that apply to that side of the House, Sir; that

May 14, 1974 Tape 1630 (Afternoon) PK - 5 is all we are asking, Sir. MR. SPEAKER: Order, please! Honourable members are well aware that the rule of relevancy is a most difficult one to rule on. The Hon. Minister of Finance was replying to statements made by honourable members to my right 1 although I think the relevancy to the particular bill in question is a bit farfetched. MR. CROSBIE: The honourable gentlemen do not have much faith in their arguments. When I started to answer them they qualied, quivered, shook, jumped to their feet on points of order.

I can assure honourable members opposite that their arguments are not going to impress the public. The public of Newfoundland know that of the-seventy-five hours, they wasted at least sixty-five hours of them in jejune and frivolous arguments that should have been delivere~ in the Budget Speech. Now I will leave that point, Mr. Speaker. I do not want to upset them, I do not want to arouse them. In my usual conciliatory manner, I will not say any more about that except to say that any blame, if there be any, should be ascribed to the honourable leather lungs opposite and several of his cohorts.

The Leader of the Opposition is not here today. Now the Member for Bell Island,also known as honourable Leather Lungs,said or rather quoted me. He said that I had said that the Government of Newfoundland were from now on going to borrow in Canada only. I made no such statement, Mr. Speaker. I said that "We had adopted a policy of borrowing in Canada and the United States first. If we find~because of interest rates or other factors,it should become desirable to borrow in Germany or elsewhere we would,but we prefer to restrict our borrowing to Canada and the United States. It is a simple fact, Mr.

Speaker, that the government have too much borrowing to do to be able to restrict it all to Canada, both direct and indirect. We therefore hope to borrow both in Canada and the United States of America this year. AN HON. ME!-'RER: What about Liechtenstein? MR. CROSBIE: Liechtenstein is an area that is very familiar to members Glll

May 14, 1974 Tape 1630 (Afternoon) PK - 6 of the last government and to the people they supported in this province, John C. Doyle and the others,and the government of the day were very well acquainted with Liechtenstein. Societe Transshipping of Liechtenstein, Mr. Speaker, was paid $4 million by Canadian Javlin for alleged wood rights that they were given by honourable gentlemen opposite. So they are quite familiar with Liechtenstein. So, ~r. Speaker, there has been no statement that we are going to borrow in Canada only.

We hope to borrow in Canada and the United States, We are hoping to do a $30 million issue for this corporation so ~hat the government will be enabled to give its consent to other borrowing by municipalities for water and S'l!Werage projects and the like. As to whether we are borrowing too much or not, Mr. Speaker, that is a question of opinion. We are borrowing what we have to borrow to keep this province on the move.to carry out our dynamic policies of development, all of which is being well accepted by the people of Newfoundland.

I am sorry to hear criticiBUI directed; apparently some honourable gentleman opposite do not want our municipalities financed. They suggest that. we are borrowing too much, The honourable gentleman for Bell Island suggested that. Perhans he wants us to restrict municipal borrowing, if he should not I hope that he shall support this bill so that we can get on with a $30 million issue. 0n motion bill read a second time, ordered referred to a Committee of the Whole House on tomorrow.

On motion that the House resolve itself into A eommittee of the ~Thole To Consider A Resolution In Relation To The Raising Of Loans On The Credit Of The Province , Mr . Speaker left the Chair. COMMITTEE OF THE WHOLE 6112

May 14, 1974 Tape 1630 (Afternoon) PK - 7 MR. CHAIRMAN: Order, please! The Hon. Minister of Finance. MR. J. C, CROSBIE: Mr. Chairman, this Resolution and the bill that accompanies it is the lean bill that is required for this year,for the authorization by the House to the Lieutenant Governor-in-Council to raise monies for the purposes of the revenues and expenditures of the province. The principal amount that we are asking the Coimnittee to authorize is $168,700,000. The monies that would be spent, of course, are authorized by the estimates of expenditure presented to the Committee. The bill also, Mr.

Chairman, would repeal last year's Loan Act so that any authority to borrow under that Act,if it has not already been exercised,would be terminated. So this bill would terminate last year's Loan Bill and would authorize the borrowing this year of $168,700,000 for the purposes of the province. MR. CHAIRMAN: The honourable Member for Bell Island. MR. NEARY: Mr.

Chairman, I wonder if the minister, Sir, who has preached,when the minister was on this side of the Coll!lllittee preached so much about democracy,having the House of Assembly approve monies, whether it was for borrowing or for any other purpose, Sir, having the Committee know all the details, Sir, about the money that is being borrowed, I wonder if the minister now could enlighten the Co11111ittee as to what this money is going to be spent for. Surely the minister must know now, Sir.

Here it is the middle of Hay, the minister should be able to tell us now, Sir, item by item,what this money is going to be used for. I cannot help, Sir, but observe again that the much-abused former Liberal Administration must have left this province in a pretty fair shape when the Minister of Finance can go out year after year, Sir, and borrow a couple of hundred million, $168,700,000. Sir. Look let us get this out of our system for once and for all!

Is the minister prepared now to admit that he was ~"Tong when he went around this province i for a couple of years, especially in two provincial general elections, preaching at the people of Newfoundland that the province was bankrupt,

May 14, 1974 Tape 1630 (Afternoon) PK - 8 that Joey had turned her belly up? Is the minister prepared now to admit that he was wrong? I do not think, Sir, in his wildest imagination, that the minister expected that he would be coming into the Committee on May 14, 1974, as Minister of Finance.and asking approval for the province to borrow almost $169 million. If he did, Sir, the minister certainly did not expect at the time that he would ever be in that posit~on, the Minister of Finance for the province. Is he prepared to admit now that he was wrong, that he had fooled the people of this province?

That the financial cendition of this province was in pretty fair shape when the administration took over? That old Joey was not as bad as he was painted? That the administration had no trouble at all to borrow money? No trouble at all, Sir, they have no problems at all. As a matter of fact, there has been record borrowing.by the Minister of Finance, by the Progressive Conservative Administration,since we got thrown out. There has been record borrowing in this province, Sir~ So I would say that speaks very well for the much-abused previous Liberal Administration.

We certainly laid a pretty good foundation but, Sir, I am more interested at the moment and I would like to hear the minister confess that he was wrong, but I am more interested at the moaent in finding out what this money is going to be used for. AN HON. MEMBER: Inaudible. MR. NFARY: Ha! Sir, I will not even recognize that. Mr. Chairman, I am more interested now in what old Scrooge, the Minister of Finance,has to say. Would the minister give us an item by item accounting of this $169 million.

Tell the Committee what it is ~oing to be used for, to democratize the Committee and the House, get the power out of the hands of the cabinet, bring it into the House of Assembly. If we are going to approve this, Sir, we have a right to know what it is going to be spent on. I ak the Minister of Fina~ce now to give us some more details not just get up and try and brush it off and say, "Oh, this is to carry on public servies." What public services? AN HON. MEMBER: For water and sewerage. MR. NEARY: It is not for water and sewerage; there is more than that inv olved in it. What about the regional college?

Is that included · 6114

May 14, 1974 in that borrowing? AN HON. MEMBER: Hear! Hear! MR. NEARY: Hear! Hear! what? AN HON. MEMBER: Inaudible, Tape 1630 (Afternoon) PK - !) MR, NEARY: What about the new fish plant for Burgeo,is that in here? AN HON. MEMBER: Hear! Hear! MR. NEARY: It is in there. I will sit down and give the Minister of Finance an ~pportunity to get up and tell us what they are going to spend this money on, MR. CROSBIE: Mr. Speaker, I believe the honourable gentleman 1e one of the veterans of this House. Verily I do believe that he said here just a few weeks !IBO he was elected in 1962.

Now how could a member o.f this House be elected in 196,' and sit here in fourteen sessions, Mr. Chainnan, in three separate Rouses of Assembly in this Province,and still G.~15

·.I. May 14, 1974 Tape no. 1631 Page 1 - MW know as little as he appears to show here this afternoon. I mean I never thought in my wildest dreams that the Member for Bell Island had sat here those fourteen years and learned nothing. The honourable gentleman asks: "What are these aonies going to be for?" There was a budget Sl)eech in this House in April. All the estimates have been tabled in the committee.

The budget speech showed that we had a total expenditure of - well, let us put it this way: We have on capital account an expenditure of $197 million and (I am using rolllld figures) related revenue of $57 million. We had to borrow $140 million for purposes of capital account. Now what is it to be spent on? It is to be spent on the building and paving of roads. It is to be spent on the Health Sciences Centre at Memorial. It is to be spent on the extension to the Carbonear Hospi~ll. It is to be spent on the extension to the Western Memorial Hospital.

It is to be spent on the extension to the Mental Hospital, the Waterford Hospital. Twenty-five million of it is to be spent on school construction. We have raised the amollllt to be paid to denominations for school purposes to $10 million and so on and so forth. It is to be spent on our capital account. The difference between the revenue we are receiving and the amount we are going to spend, the net amollllt after one takes off a contribution from current account, is $134 million in rough figures. In addition we have $20,825,000 worth of bonds colling due this year that we have to refinance.

That is borrowing done by the Smallwood Administration that has now come due or will come due during this year and ~e have to refinance it, We have to pay $14 million into sinking fllllds. We are borrowing that money to put into sinking funds, The total comes to about $168 million. Mr.chairman, what this asks the committee.to do is to authorize it, to borrow these monies to spend in accordance with the estimates that the cOlllllittee has now approved, In addition to the aanunt

May 14, 1974 Tape no. 1631 Page 2 provided in this Loan Act, there might be guarantees for other purposes. This is to carry out what the budget speech indicates will be done this year and what the estimates suggests will be done. That is the purpose. Now, Mr. Chairman, I realize that the Member for Bell Island might not be familiar with this because under his administration, the Smallwood Administration, the government did not have to get the consent of the House of Assembly at all to borrow. They amended the Revenue and Aduit Act so that they could borrow at whim; they could borrow by an Order-in-Council.

They never did have to ask the House to authorize borrowing. We have amended the legislation so we have to get the permission of the House of Assembly each year before we go out to borrow money for the coming year. This is what this now asks the House to approve for the purposes of the estimates and capital account in particular that have now been presented to the House and approved. I hope that satisfies the honourable gentleman. Now there is nothing here for the regional college because that has been built and leased to the government. I hope that answers these questions. MR. NEARY: Mr.

Chairman, I managed to get some information out of the honourable minister. The minister started off his remarks, prefaced his remarks by saying that I, as one of the veterans in this committee, should know better. Well, Sir, I asked the right question. I asked precisely the ~ight question. I did not get all the information that I wanted to get out of the minister but I managed to drag some of it out, Sir. I did not keep an accounting of it, I did not tabulate it as the minister was reeling it off. I can only take the minister's word that it came to about $169 million.

Now, Sir, the minister could not resist getting his little dig in about the former administration. Well that minister knows full well, Sir, that his statement was grossly exaggerated, that 6117

May 14, 1974 Tape no 1631 Page 3 his administration has borrowed and will continue to borrow money. The Lieutenant Governor-in-Council will still borrow money but all they have to do is to come back to the Rouse and get it approved retroactively. I would like to ask the minister now if they need to guarantee say $100 million in the middle of July, for some harebrained scheme that the administration dreams up; would the minister insist that the Legislature be open to approve that? AN HON. MEMBER: We do not have to. MR. NEARY Do not have to? Sir, that is right.

I have been around here,as the minister says, fourteen years and I am not going to swallow that kind of propaganda that he just flung across the committee at us. They would go out and guarantee the money, Sir, and then they would come in and do precisely what the minister is doing now and that is to bring in a bill, "An Act To Authorize The Raising Of Money By Way Of Loan Of The Province." That is how they would do it, Sir. They would ask the Legislature, members of the committee, to approve it retroactively. Mr. Chairman, there is really not all that much difference, Sir.

The reform is not as great as the minister would lead us to believe. I did manage to get a bit of information out of the minister, Sir, but I can only give him fair warning that next year; before we approve this kind of a bill, that he better bring in a list of the projects. Mr. Chairman, we were told last year that the minister would not have a surplus in current account. We discovered, Sir, when the minister brought his budget into the House.that there was a surplus of $14 million transferred over to capital account. Are we going to have a recurrence again this year?· ls that the situation?

Does the minister anticipate that he will have more money than he knows what to do with? Will he have money running out of his ears that will be used in capital account and they will not have to G.!.18

May 14,1974 Tape no. 1631 Page 4 borrow this much money? This minister seems to be hepped up on the idea, Sir, that money is taken from current account so there will not have to be as much borrowed for capital account. The minister is telling us here now that he is going to borrow $168,700,000. Does he expect that to be more or less this year? Well there be a surplus on current account? If so, will the borrowing here be less? Will the minister collect taxes on inflated dollars that ,,ill keep this borrowing down? The minister also hinted, Mr. Chairman that there would be other loans and guarantees.

Could the minister lead us into the light of what these loans and guarantees are going to be for? Surely, Sir, in the middle of May, the government knows what its capital progrSlllllle is going to be for the year. Mr. Chairman, apart from what the minister gave out in his budget speech, will there b~ any other borrowing? Will there be any other loans and guarantees? If so, Sir, here it is the middle of May and my understanding, Mr. Chairman, is that the committee is going to adjourn on Friday and we will not be back any more until sometime in June.

If the minister do not have the information now, surely in June,he shall be in a position to give the connnittee the information. We have a right to know this, Sir. If they are going to do things in a proper manner,as the minister indicated, then Sir, I hope they will go all the way and give us all the information that we require. Mr. Chairman, I would like to ask the minister when he is winding up his few remarks if he would tell us if the administration anticipate any more loans or guarantees, any more borrowing that the committee has not been told about at the present time?

If we cannot be told now, we can be told in June when we come back. We will probably be here half the summer passing legislation that we could have passed two and one-half months ago. We have been just marking ull9

May 14, 1974 Tape no, 1631 Page 5 time here for the last two or three months, clawing one another's eyes out, clawing at one another, sticking daggers into one another because we did not have anything to do. There was no legislative programme on the Order Paper. MR. MARSHALL: Mr, Chairman, on a point of order: The honourable member is being irrelevant, It is completely irrelevant to be talking about the legislative programme. We are talking about a borrowing bill now. MR. NEARY: Is "Froggy" finished now, Mr. Chairman? MR. MARSHALL: We are talking about a supply bill, Mr.

Chairman, Would the honourable member mind sitting down? Sit down. Mr, Chairman, we are talking about a bill with respect to the borrowing of money. I do not think we should enlarge it any longer by listening to the honourable member's irrelevancies. MR. NEARY: Mr, Chairman, I am going to give the Minister of Finance an opportunity now to reply to my few questions that I put to him, Sir. MR. CHAIRMAN (Mr.

Stagg): Before the other members speak, I must say that the House Leader was rising on a point of order which may or may not have been a point of order in which I would rule in his favour, However, I do think when an honourable member has the floor he has the right to be referred to by his parliamentary name. I would suggest that some of the names that honourable members have been calling others this afternoon are certainly not in the - I do not know if they are unparliamentary but they are certainly discourteous a1.1d they add nothing to the general tenor of debate in these chambers. MR. CROSBIE: Mr.

Chaiirman, this Loan !ill is only involved with the direct borrowing of the government and it carries out what is expressed in the budget speech as the government's programme for this year and the projects that are contained in the estimates that the committee has dealt with over the last few weeks, As far as any other loans or guarantees are concerned, there is also 11 loan and guarantee amendment to come before the committee. That , 6.t20

May 14, 1974 Tape no. 1631 Page 6 is for loans and guarantees apart from municipalities. There is another Loan and Guarantee Act which deals with municipalities. They are both distributed now. What loans and guarantees there may be during this year, we do not J,,now now except that we have said in the budget speech that $14 million is needed to get the Lower Churchill underway this year. That is our best estimate. That will be arranged by way of a guarantee by the province. That is very likely to be guaranteed during the summer. Of course there will be another Loan Act before the committee, Mr.

Chairman, which I have given notice of,in connection with the purchase of the CFLCo. shares and water rights in Labrador. Mr. Chairman, the only other guarantees we know of at the moment are in Bill No. 73,which has seven loans,for a very small total. We have not been guaranteeing very many loans in the last year. The answer to that is,as far as I know, as far as the guarantees are concerned during the year coming up, there will be $14 million possibly for the Lower Churchill and there is another Loan Act to come before the committee in connection with the Churchill Falls and the hydro rights in Labrador.

The other purpose of this money is to carry out the government's programme for this year. The Province of Newfoundland has not had a surplus since 1949. Mr. Chairman, the only correct way to look at it is to put capital and current account together and see do we have to borrow money. If one has to borrow money, one do not have a surplus. We do not have a surplus. We have a contribution from capital account, hopefully this year of $7 million. That may or may not be accurate; we do not know. Revenues may be higher than expected. Expenditures may be higher than expected.

We do not know whether we will have a surplus or not. We may find that we may have to do something else on wages and salaries. That will have an effect on us.

May 14, 1974 Tape no. 1631 Page 7 Mr. Chairman, all I can say is that the forecast at the moment is that hopefully we will have a contribution from current account to capital account of at least $7 million. If we do, that will mean that it is $7½ million less that we will have to borrow, unless our expenditures are up for some other reasons. That is the purpose of the bill, to authorize this direct borrowing. MR. W. N.

ROWE: Mr, Chairman, here we have before us a bill and a resolution, the resolution being that it is expedient to bring in a measure to authorize the raising from time to time of nearly $169 million. Now, Sir, when the legislation was brought in a year or so ago, whereby this House was supposed to be the last or supposed to have the last word on the raiaing of money, it was hailed as a great reform, a great step forward.

I believe that when the Minister of Finance, as I believe he did, bro~ght in that original bill, taking it out of the hands of the government, the executive, and placing it into the hands of the House as to whether money wou~d be borrowed or not in certain specified amounts, I believe he thought it was a -great reform, a great progressive step forward. It had already been in exiseence before.

On the advice of officials, the previous administration decided to get rid of that and to allow themselves to do it by Order-in-Council, Unfortunately, Sir, the Minister of Finance fell under the sway or influence of the honourable House Leader on the government side. We have had introduced into this House in the past certain rules which cut down drastically on the amount of debate that can be done on estimates, budget, supply and everything else. Mr.

Chairman, this bill, which is really a blank cheque to the government to borrow an amount of $168 million, with no authority, with no limits as to what the money is spent on0 this is really a blank cheque to allow the government to borrow that amount of m.cmey. 6.t22

May 14, 1974 Tape no. 1631 Page 8 Now, Mr. Chairman, aside altogether from the fact that the government can later on this year go out and borrow money of its own accord and have it ratified retroactively, aside from that which demolishes - AN HON. MEMBER: (Inaudible). MR. W. N. ROWE: Well they can do it by guarantee. Aside altogether from that aspect of it, Mr.

Chairman, what we have to remember is that when this great reform was first proposed by this government and lauded by the honourable House Leader it was supposed to be in conjunction with other parliamentary traditions of this House; namely that there was 1110re or less unlimited debate on the budget, the estimates, so that all answers to questions could be obtained by the members of the opposition and also, Sir, on the premise that when ministers were asked certain things during the debate on their estimates, they would be forthcoming with some information, they would answer some questions • If we asked the Minister of Highways - MR.

CHAIRMAN (Mr. Stagg): Order please: The honourable member has been very clever but I suggest that the matters he is now speaking about are irrelevant to this particular resolution. MR. W. N. ROWE: I thank you. Your Honour. In any event, Sir, we have here a bill which authorizes the government to raise nearly $169 million. There was a time when such a bill did not have to come before the House at all. The government could just go out and raise money secretly, Mr. Chairman, with bond issues, prospectus AN HON, MEMBER: (Inaudible). all over the countryside.secretly. MR. W. N.

ROWE: One can still do that. 6ne can still guarantee, Mr. Chairman. 6123

May 14, 1974 Tape no. 1631 Page 9 In any event, if this government wanted to live up to the spirit of its so-called great reforms as well as to the letter of its reforms, something like this bill would have some meaning before the House of Assembly .

We would know that $168 million is being borrowed; we would know that $30 million is going to be spent on the roads,and where; we would know that $14 millio~, as the minister has told us off-the-cuff, is going to be spent on the Lower Churchill Development; we would know that $40 million or $50 million is going to be spent on municipal development,and where,if the government wished to live up to the spirit of this legislation. But no, Sir.

They bring in a bill which asks for blanket authority to borrow $168 million and they have consistently refused, either by cutting off debate because of the gag rule the Minister without Portfolio has brought in or when debate has been allowed, before the seventy-fire hours guillotine finally came, no minister, the Minister of Transportation, the Minister of Municipal Affairs, no minister would tell any member of this committee what the money is going to be spent on. Mr. Chairman, what is the purpose of this -billt I would submit I am being relevant. What is the purpose of the bill? 'What is the point of it?

Come into the House and ask for blanket authority, $169 million. If the government should want some more money, come into the House.with their arrogant majority once more,and pass another bill for another $168 million. Do not ~ive the co111111ittee any information, Mr. Chairman. No, they are too arrogant to do that. I would submit that the Minister of Finance would not mind giving us some information but he has fallen into the thrall, the sort of bad influence of the Minister without Portfolio,and will not give information and insists on cutting off debate. 6124

14 , 1974 Tape, no. 1631 AN HON. MEMBER: (Inaudible). MR. W. N. ROWE: 'Who gave information? AN HON. MEMBER: (Inaudible). Page MR. W. N. ROWE: Yes, lots of information forthcoming. No information was given as to whe.re this money was going to be spent. It is a useless, hypocritical p.iece of legislation, Mr. Chairman. There is no point to it whatsoever.

The only reason I waste my breath on it at all, Sir, is that I want to point out to the members of the committee and any members of the public who may be list.ening that this government since it got in power two and one-half years ago has f•llowed consistently this practiee of saying one thing out of one side of their 1110uth and doing and saying sol!lething entirely different out of the other side. There is no correlation, no cohesion between theory and practice between this government.

Bring in a bill, "An Act To Authorize The Raising Of Money By Way Of A Loan By The Province Into The House," it gives the impression that • I 25· l.) ....

~.ay 14, 1974 Tape 1632 IB-1 here they are, open, democratic, giving out information, Giving that impression to the public, Sir• yet at the same time using every opportunity to cut off debate, stifle debate, give no information and do whatever they want to do in any event. Completely hypocritical, Mr. Chairman! This bill should be recognized for what it is worth, nothing but a blank check.with no information, a theoretical limit of $169 million on what the government can spend in the coming year but a theoretical limit only , Sir, no practical limit whatsoever. They can guarantee what they want.

I would submit that they can raise money and have it retroactively ratified by this House. There is no reason why they cannot do that. The Minister of Finance says, "No, we cannot do it'·. I submit, Sir, that if this government wanted to do it, it would do it and would not hesitate to do it, That too would be consistent with the general practices of this administration in the past couple of years. We have no objection to passing the bill. All we say is why waste the tilne of the House with mealy-mouthed platitudes as to how democratic, how informational such a piece of legislation isl It is just useless, Mr.

Chairman. We might as well pass it without any further comment. On motion resolution in relation to the raising of loans on the credit of the province, carried. MR. MARSHALL: Mr. Chairman, I might suggest we could really report back to the Speaker now but we wanted to call other motions here . So, perhaps with leave of the House we could stay in committee and report them all back at once. AN HONOURABLE MEMBER: Inaudible. MR . MARSHALL: Leave of the House? We have been referred for the consideration of motion number (6),which the Speaker has called.

Normally we would have to now report back to the Speaker,having completed that which was delegated to the committee. I am suggesting that instead of just going back into the House and coming back into committee right again, why do we not do (1), (2), (3), and (5), these resolutions,and we can report them all back at once rather than go through - 6.~26

May 14, 1974 Tape 1632 IB-2 MR. W. ROWE: On that point, Mr. Chairman, we will be happy to facilitate and expedite the business of the House by doing that,if the honourable House Leader would simply agree with the Leader of the House to allow us to ask a few questions on the estimates just put through. There are some questions we wanted to ask. A few more hours will not do anyone any harm. We would agree to do anything to expedite the business of the House if the House Leader with the leave of his colleague would allow us to ask some questions on the estimates. Will we be able to do that? MR. MARSHALL: 't-'.r.

Chairman, you know there is an old saying, "I hate to see a grown man cry". I hate to see one man make a fool out of himself; it is really tragic when we see nine. We have not got the leave,obviously. So, I move that the committee rise. AN HONOURABLE MEMBER: They do have the leave. MR. MARSHALL: Well, we are not accepting leave on that condition. I move that the co11D11ittee rise, report progress and ask leave to sit again. On motion that the committee rise, report progress and ask leave to sit again. Mr. Speaker returned to the Chair. MR. STAGG: Mr.

Speaker, the Committee of the Whole have considered the matters to them referred and have directed me to report having passed a certain resolution in relation to the raising of loans by the province and ask leave to sit again. On motion report received and adopted. On motion resolution read a first and second time. On motion bill no. 75 read a first time, ordered read a second time on tomorrow. MR. MARSHALL: I move that the House go into Committee of the Whole to consider motions (1), (2), (3) and (5). On motion that the House go into Co11D11ittee to consider motions (1), (2), (3), and (5). Mr.

Speaker left the Chair. MR. CHAIRMAN (MR. STAGG): Motion (2), bill no. 52. ~~_CROSBIE: Mr. Chairman, this is a resolution to amend the Retail Sales Tax Act of 1972. The point of the bill is to increase the rate .,. ·I 2-, \) .l, .

May 14, 1974 Tape 1632 IB-3 of the sales tax from seven per cent to a rate of eight per cent. Actually, Mr. Chairman, 1t is with some reluctance that the government move this but as is evident from the budget presented to the House and the estimates of expenditure presented to the House it was necessary to have a small increase in taxation this year. That is the purpose for the increase in the rate. Now, Mr. Chairman, this whole matter has been canvassed thoroughly in the debate on the estimates of the Department of Finance. for some twenty hours.

If necessary it can be debated again and the same old arguments can be gone over.

The facts are that in order to continue to expand services to the people of Newfoundland, in order to make it possible to increase grants to school boards, in order to make it possible to carry on with the health services of the province, in order to help meet some of the calls of the opposition for greater and greater expenditures - we hear them calling every day in every way for more and more money to be spent - in order to provide for greater expenditures in the development of fisheries, industrial development and the like, it has been necessary to have a small increase in taxes this year.

I would also like to say, Mr. Chairman, that the people of this province have accepted that this is necessary. That have accepted the fact that there have to be these small tax increases because they accept the fact that government cannot provide new and better services without the taxpayer ultimately having to pay for the same. Now an increase in sales tax is nothing new in this province.

I think I explained in the previous debate on the estimates of the Department of Finance some of the increases there have been in the sales tax in recent years, the five per cent in 1963Just after a certain member joined the House, was elected in 1962, an increase to six per cent in 1967, an increase to seven per cent in 1968. Then in those years the tax was extended to laundry and dry-cleaning and the various services in hotels and the like. Then in 1972 there was an exemption to remove childrens' clothing and shoes from the sales t ax . T hat was done by the present administration.

There was an amendment of the regulations,in January of 1974,to eliminate heating and fuel oil 6128

May 14, 1974 Tape 1632 IB-4 from the sales tax. Now there is an increase in the rate to eight per cent,with those essentials having been removed from the tax. So, it is regrettable that this has to be but it is necessary this year. As I pointed out in the House before, Mr. Chairman, we are not the only province in Canada with the sales tax at eight per cent. The Province of New Brunswick has a similar rate, the Province of Quebec and one other province. Let us see, I probably have the figures here somewhere. There is one other province also which has an eight per cent sales tax. I think it is Manitoba.

I therefore move that the resolution be adopted by the committee. HR. W. ROWE: Mr. Chairman, I will not detain the coDDnittee too long. I was not in the coDDnittee when the minister's estimates went through and the debate took place on this sales tax increase. I would like to take this opportunity to register my dismay and opposition to this bill and this resolution. I do it on a couple of grounds, Sir. First as a matter of principle. Sales taxes-property taxes, these are among the most retrogressive taxes that countries use to raise finances for government expenditure.

A sales tax, Sir, hits by far those who are less able to pay, hits them by far harder than it does those who are more well-off. When we have progressive income taxes where the more one makes the more one pays, not just because they made more money but because the government takes a bigger bite,proportionately bigger bite out of the amount they make leaving,them a proportionately lesser amount but still sufficient to get by on.

In the case of that kind of a progressive tax,nobody can have much complaint with it as long as it is done equitably and fairly and there are no loopholes to allow people to get out of paying their riRht rate of taxation. In the case of a sales tax, Sir, on principle any raise in it must be protested against most vehemently unless there is good, strong reason why it should be imposed because, as I said before, it hits the less well-off people much harder than it hits the well-off people. So, I oppose it on that ground alone, Sir. 6129

May 14, 1974 Tape 1632 IB-5 Also, the minister mentions that over the years,from 1962 or whenever it was onward, that the former administration kept increasing the sales tax. That is true, Sir, no doubt about that. I would venture to say that the government of that day, this country, this province at that time was not so well-off as it is now. This government is so well-off that they are able to budget for a surplus on current account. What is the amount? $9 million or something? AN HONOURABLE ~BER: $7 million. MR. W. ROWE: $7 million in current account.

In other words, Sir, the amount that this Minister of Finance is budgeting for, the amount of a surplus that this Minister of Finance is budgeting for is only somewhat less than the amount which he is going to get as a result of this sales tax increase, $10 million,by a one percentage point increase in this sales tax. Why would the honourable minister want to do that? Why would he want to impose a retrogressive tax, one that hits the poor worse than the rich?

Why would he want to do that and at the same time budget for a surplus almost equal to the amount which will be brought into the province by this sales tax increase? It just boggles the imagination as to why he would want to do that, Mr. Chairman. Add to that the fact that this government.mainly as a result of inflation and other considerations as well, greater growth in other regions of Canada, is getting money from Ottawa in a far greater amount than any previous administration ever had in this province, money from Ottawa coming in here, Sir.

The Minister of Finance does not know what to do with half the money coming into this province. He could pay off, I suppose, part of the debt of the province. I think that also would be a retrogressive step. Much better that the debt stay where it is or is increased over the years,if we can provide public services to the people of this province,and let it be paid off over the next 100 years or 200 years for that matter.

Here we have a government which is getting money lashed out to it by Ottawa, which is budgeting for a surplus almost in the amount tha t it is going to collect as a result of the sales tax increase and yet i t imposes this most retrogressive, most unprog~essive 6130

May 14, 1974 Tape 1E32 IB-6 of truces, a sales true. I do not know why they do it, Mr. Chairman. Add to that fact that there are millions of dollars of public money being flung out needlessly in this province. I am sure that the colleagues of the tfinister of Tourism cringe every time they see him on television or every time he appears in cabinet to suggest some other haretrain scheme for the Twenty-fifth Anniversary of Confederation, How much money is going to be spent on that?

I would say, Sir, that fully one half of the amount of money which will be brought into the treasury of this province by this sales tax increase will be flung out needlessly, down in a sink hole by the Minister of Tourism and the other departments who are participating in this Confederation Celebration. I have no complaint about some celebration, Sir, a modest celebration for the Twenty-fifth Anniversary.

But to throw away money needlessly as this government seems to be determined to do on this kind of a project or on other projects mentioned by the Minister of Finance in an earlier speech involving political patronage, ~r. McLean and others like that - the minister readily admitted that this was going on - when one thinks of the money that is being wasted on this kind of a thing , Mr. Chairman, then one can only ask why the Hinister of Finance insists or his colleagues have forced him to insist on raising the sales tax, the t·orse possible method of taxation in such a poor province as Newfoundland.

I must confess,candidly,that I do not know the answers to the questions I have raised. Perhaps the minister can give me some elucidation when he stands up again. He has already spoken at length. I read through the Hansard report, the verbatim report of his remarks when his estimates were going through the House. I still have not found the answers to those questions.

Unless the minister can in the next few minutes when he rises to speak give me some reason as to why this sales tax should be increased in the face of the arguments that I have brought up against it, especially the surplus, especially the wastage of money which is going on in this province, then I am afraid, Sir, that I have no choice but to vote against it as will my colleagues.

~..ay 14, 1974 Tape 1632 IB-7 If this were necessary, if the government or the minister could point out to me that therewerenot millions of dollars being wasted, that he was not budgeting surpluses, that every cent being spent was absolutely necessarily spent and that the people were going to benefit in the long run by the imposition of this sales tax, then, Sir, I would gladly vote for it even though on principle it is the worse kind of retrogressive tax. The minister has not presented convincing arguments that this is necessary. I and my colleagues, Sir, will vote against it. MR, CROSBIF: Well, Mr.

Chairman, if the honourable gentleman did read the Hansard on the debate on the Department of Finance's estimates and is still not convinced, I do not think there is anything I can do to convince him now. I agree with the honourable gentleman,as anyone agrees,that the sales tax is a regressive tax. Unfortunately it is the only major source of taxation this province has. A one per cent increase in the sales tax is calculated to bring us in around $10 million in increased revenue. A one per cent increase in the personal income ta,i: only brings us in about $1 million in increased revenue.

One per cent on the corporation tax brings in around $900,000 or $950,000 and so on. Although this is a regressive tax,it must also be remembered that exempt from it are all items of food, certain items of fishermens' equipment, children!! clothing and ahoes and also there is exempted from it heating and fuel oil. So, the worse regressive effects of it are meliorated by that fact that there are these exemptions.

Now the plain fact is that the projected contribution to capital account from current account this year is$ 7 million which is a very small amount in the budget of - well, on current account it is about $550 million. That may or may not materialize. Certainly, Mr. Chairman, if we increase wages and salaries this year, we agree to make an additional pa}'IDent, that $7 million will disappear right there. Now, how it will all work out during this year we do not know. The ~oint is that it is necessary to have an increase in revenue if we are going to cut down our borrowing. We are already 6132

May 14, 1974 Tape 1632 IB-8 borrowi ng a tremendous amount. The members c-pposite pointe d out i n t he loan bill it 1,1as a large amount to borrow -. We have got to shov the financi-al community that we have a contribution from current accou nt towar ds capital account, t~at we do not have to borrow everyt hing we spent on capital account . That is very important also. We could could not nake the increase all on the income tax because it would be too big an increase i o the incollle tax. We have already had to say that we are raising that four points, two chis year and two next.

That will bring us in aroun d $ 4 million or $5 million. Therefore we are faced with t he regretful choice of having co incrEase the sales tax. Now, the only way out of doing that would be greater assistance from Ottawa. Well, we are alrea dy receivin g considerable assistance from Ottawa , tax equalization. I explained in the budg~t speech how we are goin g co lose $5 million t his year on income tax through indexin g,which Ottawa took the position they were not going to reimburse us for. For all of these reasons it is necessar y to have this ta.~ increase. Now, I do not expect , Mr.

Chairman , the opposition to be responsible . I did not expect they were goin g to vote for the tax increase. They have u.!.33

May 14, 1974 Tape 1633 (Afternoon) not got the responsibility of governing and therefore they can afford the luxury of voting against this taK increase. I and PK - 1 other members on this side of the Committee cannot afford that luxury. We want to .continue to be able to keep our services g6ing and expand them,and to do that we must be able to borrow money and we must have the confidence of the people who lend money and we must remember that at least the rate is only going to eight per cent in Newfoundland in 1974

whereas it has been eight per cent in Quebec for the last seven years. It has been eight per cent in New Brunewi.ck for the last three or four years. It has been eight per cent in Prince Edward Island for the last three or four years. Now we have come to that unhappy state ourselves. So we are not as badly off as the three provinces that I have mentioned. So regretfully, Mr. Chairman, I have to move the resolution. On motion resolution carried. Resolution to be submiteed to a C011111ittee of the Whole House in relation to a measure further to Amend The Retail Salas Tax Act 1972 - Act No . 56 of 1972. MR.

CROSBIE: Mr. Chairman, this resolution is a traditional one. Under The Local Authority Guarantee Act the provincial government is empowered to guarantee for municipalitiei loans. This is done during the year by Order-in-Counci} but the legislation has to be amended every year to obtain approval by the House of Assembly of the loans made. I have a list here.I will just go through this - they are all mentioned in the Bill here.

I will just give the purpose of each,for the information of the Committee; Admirals Beach, $36,000; that was for a water system; Appleton Community Council, $400,000, that is for a water and sewerage system; Badgers Quay/Valleyfield/Pooles Island, $230,000, that was a loan guranteed for a water system; Bishop·'s Falls, $50,000, that was for work on their water and sewerage system; Bonavista, $1 million; that is for their water and sewerage system; Botwood, $190,000, that was for street paTing $140,000 and work on their water system $50,000; Carbonea~, $350,000, that was $150 , 000 for street paving and $200,000 for water and sewerage work : Catalina, $770 ,000, that is for water and sewerage; Clarenville, 6!34

May 14, 1974 Tape 1633 (Afternoon) PK - 2 $750,000, water and sewerage: Coachmans Cove, $50,000, that is a water system: Channel/Port aux Basques, $405,000, that is a water system; The City of Corner Brook, $1.5 million; that was $800,000 for street paving and $200,000 for water and sewerage; Corner Brook $750,000, that was to redeem debentures that came due.

They had issued debentures twenty years ago which came due: Deer Lake, $250,000, that was for street reconstruction and paving; Deer Lake, $135,000, water and sewerage; Deer Lake, $100,000, street reconstruction and paving; Englee, $100,000, water system; Fleur de Lys, $170,000, water and sewerage; Flower's Cove, $170,000, water system: Gander, $120,000, construction of a works depot; Garnish, $50,000, road reconstruction and paving; Glenwood, $150,000, street reconstruction and paving; Goose Cove, $60,000, a water system; the Goulds, $50,000, street reconstruction and oaving; Grand Falls, $80,000, water and sewerage;( It is a huge listJ Grand Falls, $350,000, street reconstruction and paving; Hant's Harbour, $60,000, water system; Happy Valley, $200,000, street reconstruction and paving; Harbour Breton, $75,000, road reconstruction and paving; Harbour Grace, $640,000, that is $440,000 for water and sewerage, $200,000 for street paving; Hare Bay, $408,000, water and sewerage; Heart's Desire, $300,000, that is water and sewerage: King's Point, $50,000, a water system; Lewisporte $155,000, street reconstruction and paving; Lumeden, $150,000, water and sewerage; Mount Pearl, $200,000, street reconstriction and paving; Musgr\ve Harbour, $500,000, water and sewerage (That is a project they have been waiting for for a long time because I remember seeing them in 1968): New Perlican, $120,000, water and sewerage; Nipper's Harbour, $75,000, water sytem: Old Perlican, $50,000, street reconstruction and paving; Peterview, $50,000, water and sewerage; Placentia,$1.1 million, water and sewerage, a new water and sewer system; Port au Choix, $50,000, street reconstructinn and paving; Port Union, $400,000, water and sewerage: Roddickton, $200,000, water and sewerage; St.

Alban's, $100,000, water and sewerage; St. Lunaire/ Criquet, $86,000, water system; St. Georges,a system is badly needed

May 14, 1974 Tape 1633 (Afternoon) PK - 3 there, $2, 800,000, that is water and sewerage; Seal Cove, $150,000, (The honourable gentleman's district did real well.), that is water and sewerage; Spaniard's Bay, $600,000, water and sewerage; $300,000, Springdale, that is $200,000 street paving and $100,000 water and sewerage; Stephenville Crossing, $50,000, that is a water system; Twillingate, $100,000, water and sewerage work; Victoria, $500,000, water and sewerage; Wesleyville, $50,000, that is water and sewerage; Whitboume, $200,000, street reconstruction and paving; Woody Point, $80,000, that is a water system.

I think that is the last one, Now, Mr. Chairman, that is a total, it is a huge total, $17,465,000 is the total. To summarjze,street reconstruction and paving is $3, 370,000; water systems only $1,402,000; water and sewerage $11,823,QOO; the retirement of debentures on the Corner Brook water and sewerage system.$750,000.

So water systems and so on total $13,975,000; road reconstruction and paving $3,370,000 and the construction of a works depot at Gander $12~,000, It makes a total of $17,465,000, All those loans were guaranteed by the government through Order-in-Council,at various branches of the chartered banks in the province. Now we have to ask the House of Assembly to approve that and the Newfoundland Municipal Finance Corporation hopefslly will have a bond issue and repay the banks and then we can start guaranteeing loans for more needed municipal public works. So I therefore as the Cotmnittee to approve the resolution. MR.

W. N. ROWE: Mr. Chairman, I must say we welcome it. We are delighted they are doing it. lt is too bad they are not doing 1110re, too bad there are not more names on this particular list. There are a number of places that have been left out again. I am sorry there are not more names there and more money being spent throughout the province on these much needed, especially the water and sewer systems. Pavement is great, you know,and much needed but water and sewer systems are not a luxury at all but a necessity. So we are delighted to see this happening. We are only sorry there are not more. 6.136

May 14, 1974 Tape 1633 (Aftemoon) PK - 4 There is one question, I notice some large amounts there, for example, one amount St. Georges,was it? $1.1 million. I am wondering does that come within the formula which the Department of ~unicipal Affairs has for subsidization? You know, as I understand it,the government can only under a certain formula nay a certain amount of money based on the ner capita, the number of people in the community.

It can only nay a certain amount of money by way of subsidy and many connnunities in the past have been turned down on those grounds because in order to put in a water and sewer system not enough revenue could he raised locally to nay off the interest and capital on a yearly basis, amortized over twentv or forty years, so the government have to subsidize.

Now I do not wish to be misunderstood, I am delighted that all the communities listed here are getting water and sewer systems.But I am wondering,are there any exceptions to that general rule that there is a certain formula over which the government at least in the past would not go as far as suhsidizing,the amortized payment for these huge loans? If there are exceptions, would the minister mind telling us on what grounds the exceptions are !llllde and if there is any criterion used for the exceptional circumstances? ' !R. F.ARLE: Mr.

Chairman, uerhaps th~ honourahle Minister of Finance "ould allow me to answer that cuestion. This $2,800,000, the Town of St. Georr,es, somewhat over 3,0()0 peonle involved. It i.s one of the larger cormnunities. I imagine with their revenue from their water tax and so on that they fall quite within any limits set by my department. I know there are several others with this record and I have mentioned ureviously where the subsidy is up to $250,000 a year. So I can well imagine that the Town of St. Georges,with their revenue,would get within that bracket. MR.

ROWF~ Is the minister aware of any excentions to the subsidy rule, the formula of the subsidy rule? MR. EARLE: I have not checked it, Mr. Chairman, I can easily do so but looking at some of the figures I have seen precedents made in the

May 14, 1974 Tape 1633 (Afternoon) PK - 5 the past, there must have been some tremendous exceptions. I would think so because they are compartively small communities that are subsidized beyond any realistic figure, so there must have been some exceptions. I do not know if there are any at present. MR. CHAIID-'AN: The Member for Labrador South. MR. M. MARTIN: I think my question too can be answered by the same honourable minister, Mr. Chairman.

We are delighted of course to see that these conmrunities are getting their water and paving but all it says to me is, it merely confirms what we have suspected all along, that Labrador communities have a very, very low place in the priorities of this administration. I am wondering if the minister could tell us whether or not there are in fact any other communities which will be getting water systems, which are not included here.

I refer to those incorporated communities in Labrador which,ae I mentioned a couple of days ago, the Medical Health Authorizes have turned down repeatedly, I am wondering if this year we are going to see any work done here? 'MR. EARLE: Some of the Labrador situations are attempted to be handled by the Labrador Services but in addition to that last year,aa I mentioned when I was talking on my estimates, we had the McClearn Organization and other consultants on the Labrador Coast doing studies of various conununities. We have some of the details on these at the present time.

Quite honestly,! do not know if we are going to be able to tackle them this year; the cost are exhorbitantly high in putting in these systems that are guaranteed not to freeze. I also mentioned that we are trying a couple of experiments on the northwest coast to see if they would work. It was only thiR afternoon I was talking to my deputy minister and I said that there is not much point in going ahead on some of these systems unless we are absolutely sure that they will not be frozen for six months of the year or eight months of the year.

I have not got sufficient assurance on that as yet,to say that we will go ahead with some of these systems. On motion resolution carried. ti.!.38

May 14, 1974 Tape 1633 (Afternoon) PK - 6 Resolution to be submitted to a Committee of the Hhole House in relation to the Act Further To Amend The Local Authority Guarantee Act, 1957. MR. l~ARSF.ALL: Inaudible. MR. CHAIRMAN STAGG): until 8:00 P.N. It now being 6:00 P.M. I do leave the Chair

May 14, 1974 Tape No. 1634 The committee resumed at 8:00 P.M. Mr. Chairman in the Chair. ~ . CHAIR.>.<J\N (MR. STA<.!f:): Order please! RESOLUTION: NM - 1 Be 1.t resolved hy the House of Assembly in ·Leg~latiw Session convened,as follows: "That it is expedient to bring in a measure further to amend the Loan and r.uarantee Act, 1957, the Act No. 70 of 1957, to provide for the advance or guarantee of a loan to a certain individual and for the advance of loans to and the guarantee of the repayment of bonds and debententures issued by or loans advanced to certain corporations." ~.

CROSBIE: This is a resolution on the Loan and Guarantee Act. ·----- Well, we have No. 73. The resolution just refers to the bill. Anyway, Mr. Speaker, every year~during the course of the year, occasions arise when 7-overnment may find that it has to guarantee a loan for some purpose which llllder the Loan and Guarantee Act can be done by Order-in­ Collllcil, but under the Loan and Guarantee Act, such guarantees had to be brought before the House bv way of amendment and be endorsed by the House of Assembly. Last year we had very few such loans or guarantees.

If one were to look at the bills for the past fifteen years, one would notice that there are verv few in comparison, very few loans guaranteed last year. The ones that were ,:.,uaranteed include Burgeo Fish Industries Limited, ,i $500,000,(That brought the total guarantees outstanding to $1,200,000). The purpose of the $500,000 guarantee was to provide the company with additional working capital. All of the outstanding shares of this company are owned by the Newfoundland Industrial Development Corporation and so it is completely owned by the Crown.

That company of course is operating the fish plant at Burgeo,and there will be legislation before the present sessi