June

3, 2010 HOUSE OF ASSEMBLY PROCEEDINGS

Vol. XLVI No. 32

The House met at 1: 30 p.m.

MR. SPEAKER (Fitzgerald): Order, please!

Admit strangers.

Today the Chair would like to welcome thirty individuals from the Golden

Rod's 50 Plus Club from the District of Cape St. Francis. The club is

accompanied by their President, Andr Loder, with Councillor Eileen Hatch of the

Town of Logy Bay-Middle Cove-Outer Cove.

Welcome to the House of Assembly.

SOME HON. MEMBERS: Hear, hear!

Statements by Members

MR. SPEAKER: The following members' statements will be heard: the hon.

the Member for the District of Port au Port; the hon. the Member for the

District of Signal Hill-Quidi Vidi; and the hon. the Member for the District of

Labrador West.

The hon. the Member for the District of Port au Port.

SOME HON. MEMBERS: Hear, hear!

MR. CORNECT: Mr. Speaker, I rise today in this hon. House to congratulate

the winner and nominees at the recently held Annual Premier's Athletic Award

Ceremony in St. John's. These athletes were recognized for outstanding

accomplishments.

Mr. Speaker, I am extremely proud of the fact that two athletes from my

District of Port au Port were honoured and recognized for their success and

achievement in their respective sports. I know the grants received from the

Premier's Athletic Awards Program will help these fine athletes to further

advance and excel in their sport.

I would like to congratulate Emily Alexander of Kippens for her dedication,

hard work and skill in the sport of Badminton. She also received this award, Mr.

Speaker, in 2009.

Also, Mr. Speaker, I want to congratulate and applaud Erica Noonan of

Stephenville for her discipline, perseverance and stamina in the sport of

swimming.

As everyone knows, it takes a lot of determination to excel in any sport.

Athletes must also have the training opportunities to allow them to perform to

the best of their ability and these awards help make this possible.

Mr. Speaker, I ask all hon. members of this hon. House to join with me in

congratulating Emily and Erica and all the award winners and nominees of the

Annual Premier's Athletics Awards on their significant achievements in sport.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for the District of Signal Hill-Quidi

Vidi.

MS MICHAEL: Thank you very much, Mr. Speaker.

Mr. Speaker, I stand in this hon. House today to recognize the significant

cultural contributions of the Hooking Our Heritage project. Frances Ennis, her

daughter, Laura Coultas, and all the women rug hookers of the Five Island

Gallery are continuing the generations old tradition of rug hooking in

Newfoundland and Labrador and introducing rug hooking to a whole new generation

of people.

Mr. Speaker, the rug hooking group has recently embarked on this project

which consists of more than thirty original rugs depicting images inspired by

the topic of the Irish-Newfoundland connection. This topic allows the rug

hookers to explore their own family heritage as well as to explore our

Province's history and connection with Ireland.

The images in the rugs on display at Five Island Gallery as part of the

Hooking Our Heritage project range from scenes depicting the streets of St.

John's in days gone by to rugs accentuating our unique geography, and pieces

that highlight the multiculturalism of our society, with Irish roots being just

one part of the cultural mosaic that makes our Province such a wonderful place

to live.

Frances and Laura are to be commended, Mr. Speaker, not only for continuing

the rug hooking tradition in the Province but also teaching a new generation of

rug hookers the skill and art. It is quite uplifting and inspiring, Mr. Speaker,

to see young rug hookers, such as nine-year-old Maya Morton-Ninomiya, the

youngest of the group, having such great time learning and creating these

wonderful pieces of folk art.

Mr. Speaker, I ask all hon. members of this House of Assembly to join me in

congratulating Frances Ennis and Laura Coultas for keeping the tradition of rug

hooking alive in our Province, ensuring our cultural traditions are preserved,

and inspiring the creation of Newfoundland and Labrador artwork from a whole new

generation of people.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for the District of Labrador West.

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: Thank you, Mr. Speaker.

Mr. Speaker, the fifth annual Labrador West Music Festival was held from

March 22-26 and ended with a gala evening on Saturday, March 27 of this year.

This wonderful music event brought over 500 participants of all ages from

the very young to the young at heart to the stage. Although this is a

non-competitive festival, awards and scholarships were presented thanks to the

support of generous sponsors. The following award recipients were chosen by the

festival adjudicators.

Nine merit awards which consisted of a trophy and $25 were presented. Solo

performances went to: Lucas Eldem, Jared Martin, Jack Brennan, Alex Penney,

Mitchell Mullen, Andrew Leriche, Megan Harrington, and Emily Costello.

Merit awards for group entry went to the A.P. Low Primary School - Grade 3

Choir for their choral entry.

Nine bursary awards, consisting of a trophy and $150, were presented as

follows, for solo performances: Sarah Hearn, Marcus Gibbs, Hayley Hynes,

Catherine Rogers, Jenna Etsell, and Andrew Noseworthy. Awards for the group

performances went to the group called Here Comes Treble for Ensemble Choral

Singing; the Menihek High School Senior Band for Instrumental Ensemble; J.R.

Smallwood Middle School Grade 7 Choral Speech Group for their Choral Speech.

The Linda Nuotio-Flynn Award for outstanding performance in Dramatic Speech

went to Ms Simons' Choral Speech Group, consisting of Katie Peddle, Kayla

Milley, Madison Hancock, and Nicole Maddox.

The Harold Stanley Memorial Award for future potential in voice went to

Ariana Pitcher.

The Sharon E. Whalen Award for the performance best expressing the joy of

choral singing went to the group called Les Versicolores.

This year the festival was very pleased to present two $1,000 scholarships

for the pursuit of further studies at Memorial University's School of Music.

These awards were sponsored by the Iron Ore Company of Canada and were presented

to Catherine Rogers and Andrew Noseworthy.

Mr. Speaker, I ask all hon. members to join me in congratulating the Labrador

West Music Festival organizing committee, the many volunteers, the sponsors and

participants for making this festival such a successful and truly inspirational

week of music and learning.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Statements by Ministers.

Statements by Ministers

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

SOME HON. MEMBERS: Hear, hear!

MR. KING: Thank you, Mr. Speaker.

I am pleased to announce today that beginning this fall all schools and

school districts will have access to a mass communication tool which will allow

them to send instant messages via telephone or e-mail to parents or guardians.

Government is investing approximately $150,000 annually to enable school

districts to purchase this service. Once in place, Mr. Speaker, every school in

the Province will have the ability to alert the local parent community about

important notifications. These could include, Mr. Speaker, emergency messages,

information on school closures, or changes to bus schedules, for example. It can

also be used to send a message to a specific home to report on individual

incidents, to give a homework reminder, or even to notify parents when a child

is not in class. The service is also capable of multilingual message delivery.

Communication between the school and home is extremely important. Parents are

engaged in their child's education and they require information in a timely

manner. Through this initiative, we are responding to that need and this funding

will enable all school districts across the Province of Newfoundland and

Labrador to purchase and implement this service.

Mr. Speaker, when we think about information technologies in education, we

often think of computers in the classroom or interactive whiteboards, but

government has also made tremendous investments in important technology outside

the classroom. For example, we invest $1 million annually to purchase software

licensing, including Microsoft licensing for schools and school boards,

providing a common software package for students and teachers. We provided

secure flash drives to every teacher in the Province who required one. More than

$430,000, Mr. Speaker, was allocated for anti-virus software licensing for use

in the entire K-12 system. As well, $1 million is being invested annually for an

additional twenty information technology support specialists to work with school

boards and support schools and school districts.

Investments such as these provide a solid foundation that contributes to

improve teaching and improve learning. All technology, Mr. Speaker, has a shelf

life and all technology continues to improve. We are working to equip schools

with technology that is functional, affordable and relevant. With today's

announcement, we are providing a new technology in schools that will meet the

needs of both the students and the parents.

Thank you.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for the District of The Straits & White

Bay North.

MR. DEAN: Thank you, Mr. Speaker.

First of all, I would like to thank the minister for an advance copy of his

statement, and certainly would suggest that a mass communication tool is a very

good initiative.

Certainly, in times of school closures and that kind of thing, when weather

comes down suddenly it is important that parents get the message out and that

students understand, and that teachers and everyone else involved understand the

changes they are making and that things can happen in a co-ordinated approach

and properly and so on. So any initiative to keep the communication lines open

between parents, the school and teachers is always a good thing. It is essential

that between schools and families we are building a trust relationship that

really fosters parental involvement and so on. I understand it is already in

place in some parts of the Province, I believe, and certainly look forward to it

being throughout the Province so that parents can use it at their convenience.

Of course, there are many other issues that we know, that we would encourage

government to continue to work on within the education system in our schools,

and so on, and that we would certainly encourage funding for the same. So it is

a good initiative, and it is just good to speak about this afternoon.

Thank you.

MR. SPEAKER: The hon. the Member for the District of Signal Hill-Quidi

Vidi.

MS MICHAEL: Thank you very much, Mr. Speaker.

I, too, thank the minister for the advance copy of his statement. I am glad

to see the announcements that are being made today by the minister. Obviously,

the tool that he first spoke to, with regard to getting the messages out to

parents and guardians should be a very important tool. I would imagine that the

schools will be careful that the numbers they are calling are where they can

actually get the person, either a cell phone or where they are on the day,

because not many people are in their homes these days. I assume that is

something they would be looking carefully at, that the parents and guardians

will get the message immediately because it is dealing with messages, for the

most part, that they would need to get right away.

I am interested in the fact that one of the things that the minister

mentioned was the possibility of letting parents know when children are not in

school. That does raise the issue of children who are missing school and how the

schools do follow up with parents after they leave the message, what else

happens? So follow up will be really important.

One of the concerns I have been hearing from parents are about students who

are suspended, and we do know that here in the St. John's area we are getting a

program, that is an important program, the YMCA Alternative Suspension Program

to provide activities and workshops for suspended students. So I put that out to

the minister as something else to look into when looking at things like being

connected with parents over the attendance of school children.

Thank you, Mr. Speaker.

MR. SPEAKER: Further statements by ministers?

The hon. the Minister of Innovation, Trade and Rural Development.

SOME HON. MEMBERS: Hear, hear!

MR. SKINNER: Thank you, Mr. Speaker.

Mr. Speaker, establishing formal trade linkages through Memorandums of

Understanding, or MOUs, creates a solid foundation to advance trade activity.

MOUs provide the platform for partners to learn more about one another; how they

can better work together; and how they can collectively better advance their

interests. In essence, Mr. Speaker, they plant the seeds to grow new

opportunities.

As a government, we recognize the significance of MOUs. We view them as a

valuable means of creating an environment for increased linkages and to opening

trade corridors - not trade solely from a good and services perspective but also

in knowledge and experience. Our approach to forming these agreements has

targeted those jurisdictions where we share a common bond.

In particular, our historical ties and relationship with the Atlantic Ocean

led to increasingly valuable and productive agreements with the State of Rhode

Island and the Republic of Ireland. The value of which was highlighted at last

week's Ocean Tech Expo in Rhode Island.

Based on the spirit and the intent of these MOUs, representatives from this

Province' ocean technology sector were joined last week by Ireland's Marine

Institute to showcase their capabilities and excellence to international

audiences.

This marks an important step in positioning the Province as the agent for

greater ocean-related activities in the North Atlantic. By building

relationships between Newfoundland and Labrador, Ireland, and New England we are

working to advance applied ocean research projects, business partnerships, and

trade development.

Participants in the four day mission included AMEC, Compusult, Marport,

Oceanic Consulting, PanGeo Subsea, the Fisheries and Marine Institute of

Memorial University, and the Marine Institute of Ireland. While in Rhode Island

the delegation also marketed their products and strengthened relationships in a

variety of areas including military, energy, academic research, and boating.

Mr. Gary Dinn of PanGeo Subsea presented at the Ocean Tech Expo. He described

the mission as creating the platform to meet with potential clients, vendors and

industry leaders and found it effective in creating greater awareness of his

company in a key market.

A delegation from the Province will be looking to extend the positive

momentum generated in Rhode Island at the Maritime Systems and Technology

Conference in Washington, DC in late June. The delegation will be able to

explore and develop commercial and technology partnering opportunities in the

maritime security and defense sector.

Mr. Speaker, we are optimistic that the seeds planted through our MOUs will

continue to germinate and lead the Province and its partners to continuing to

expand our respective interests.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for the District of The Straits & White

Bay North.

MR. DEAN: Thank you, Mr. Speaker.

First, I would like to thank the minister for an advance copy of his

statement. MOUs certainly do provide platform for partnership and any time that

the Province can negotiate with foreign countries and other interest groups in

terms of developing business and so on, investing in our Province, then

certainly is a good thing.

Of course, we know the MOU for Ireland has been around for some time, back in

1977, I believe it was, when then Premier Brian Tobin announced that this

high-level committee was in place and the MOU was signed. Since then we have

seen good things and we continue to see good things, and that is good.

I certainly would wish the delegation that will be attending the institution

or conference in Washington well and trust that, again, good things will

continue to develop in this partnership.

MR. SPEAKER: The hon. the Member for the District of Signal Hill-Quidi

Vidi.

MS MICHAEL: Thank you very much, Mr. Speaker.

Mr. Speaker, I do thank the minister for the advance copy of his statement. I

do agree that the MOUs that the minister is speaking about are a valuable way to

promote trade and to get people connecting in a very practical way in the

industries that they are working in. Promoting ocean technology in particular is

certainly a commendable goal for us here in this Province. The connections that

are being made and have been made in the past are most commendable.

I say to the government, Mr. Speaker, that I would like to see them expend

the same level of energy and enthusiasm towards developing a provincial seafood

marketing program. The Minister of Fisheries has heard me speak of this before.

Offshore technology is an important and growing component of our economy but so

is our fishery, and I look forward to seeing leadership from the government in

the discussions that are ongoing in the industry to make sure that we do get

into a provincial seafood marketing program.

Thank you very much, Mr. Speaker.

MR. SPEAKER: Further statements by ministers?

Oral Questions.

Oral Questions

MR. SPEAKER: The hon. the Leader of the Opposition.

MS JONES: Mr. Speaker, yesterday we received a briefing from the C-NLOPB

regarding offshore drilling regulations. I must say, Mr. Speaker, instead of

hearing the Minister of Natural Resources in the House of Assembly in the last

few days going on about vegetable oil and the man in the moon, I can say it was

somewhat refreshing.

During the briefing, Mr. Speaker, we were advised that once an oil company

self-reports an oil spill under

section 115 of the provincial accord act, the

C-NLOPB is required to get written consent from the company before it can

release the information to the public.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

MS JONES: I ask the minister, in the spirit of openness and transparency,

will you commit to bringing forward amendments to this piece of legislation that

will clearly outline any information related to spills can be reported by the

C-NLOPB without permission from the companies?

MR. SPEAKER: The hon. the Minister of Natural Resources and Deputy

Premier.

SOME HON. MEMBERS: Hear, hear!

MS DUNDERDALE: Thank you, Mr. Speaker.

Mr. Speaker,

section 115 and 119 of the Atlantic Accord act does talk about

proprietary information and having to seek permission from the oil companies to

release information. However, Mr. Speaker, the practice has been, and will

continue to be, where it relates to environment and to safety, that all reports

that are made to the board are posted on their Web site and made public.

Mr. Speaker, we currently have a review of the regulation on practices around

oil spills taking place, prevention of oil spills and oil spill reaction, and

that is certainly something we will take under consideration once those

recommendations are made.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Leader of the Opposition.

MS JONES: Thank you, Mr. Speaker.

The C-NLOPB is indicating that because of the legislation, every time that

they reveal information to the public without having written consent, they are

in violation of the act.

So I ask you today, Minister, why not make the amendments in the legislation

to allow for a full open and full transparent process?

MR. SPEAKER: The hon. the Minister of Natural Resources.

SOME HON. MEMBERS: Hear, hear!

MS DUNDERDALE: Thank you, Mr. Speaker.

Mr. Speaker, as I said, the practice has been to report all incidents with

regard to human safety and to the environment. That practice will continue.

Once we have been through the review process, there will be a number of

recommendations made without a doubt. Mr. Speaker, perhaps more than one

legislative change is going to be required. That is something that will have to

take place between the Government of Newfoundland and Labrador and the federal

government, Mr. Speaker. That is a piece of work that we will have to do

together.

We have committed before, through the Premier and through myself, that

whatever the recommendations are, whatever requirements on changes to

legislation that might be required, Mr. Speaker, then we are committed to doing

that.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Leader of the Opposition.

MS JONES: Thank you, Mr. Speaker.

It needs to be noted that these companies are into a self-reporting process,

and in addition to that, they have legislation that really can protect them from

having this information released publicly. So there is no openness and

transparency.

Mr. Speaker, we also asked the C-NLOPB why independent monitors have not been

used as an option in the offshore area. In fact, Mr. Speaker, what their

response to me was is that it would be an inconvenience to the companies because

the capacity for accommodations does not exist on the rigs to be adding more

personnel as observers or as monitors.

So I ask you today, Minister: Why does it appear that we are more concerned

with inconveniencing the oil companies right now as opposed to ensuring full

oversight on these drill rigs?

MR. SPEAKER: The hon. the Deputy Premier.

SOME HON. MEMBERS: Hear, hear!

MS DUNDERDALE: Thank you, Mr. Speaker.

Mr. Speaker, I can only speak for the Government of Newfoundland and Labrador

and our issue with regard with monitoring for oil spills has nothing to do with

accommodation on platforms. Mr. Speaker, we have a number of people, dedicated

people, with the C-NLOPB, who monitor what happens on the rigs in terms of

environment and conservation. We have a series just about every day when there

is good flying weather, there is a plane in the air with trained oil spill

spotters on board and a protocol established where oil spills are reported.

Mr. Speaker, science tells us that that is the most effective way to spot oil

spills - from the air and not from stationary platforms.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Leader of the Opposition.

MS JONES: Thank you, Mr. Speaker.

There are no independent monitors on the platforms. In fact, Mr. Speaker, the

rationale that was given to us was only because they did not have the

accommodations.

I ask the minister today if she is prepared, Mr. Speaker, to make a

commitment to have independent monitors or observers on these platforms to

ensure that there is greater oversight and more protection from an oil spill.

MR. SPEAKER: The hon. the Minister of Natural Resources.

SOME HON. MEMBERS: Hear, hear!

MS DUNDERDALE: Thank you, Mr. Speaker.

Mr. Speaker, these are very serious issues. When we see what is happening in

the Gulf, that fact is brought home to us in a very, very strong way.

Mr. Speaker, I have attended two briefings - the same briefing twice from the

C-NLOPB. The same briefing that I asked the C-NLOPB to provide to members of the

Opposition, Mr. Speaker. At no time did I hear in the briefings that the only

reason we did not have independent monitors on platforms was because of

accommodation shortages.

The board is satisfied with the level of monitoring that takes place by their

employees on the board. Every day, as I said, where visibility is good there is

a plane in the air monitoring what is happening offshore. They have a protocol

that causes them to report to the board, Mr. Speaker, and that is the most

effective way of monitoring.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Leader of the Opposition.

MS JONES: Thank you, Mr. Speaker.

The minister had her officials and her communications director sit in on our

session, so maybe they can give you the information, Mr. Speaker, because the

questions and the answers were very clear.

Mr. Speaker, the minister keeps stating that air surveillance is the best

place to be monitoring any detection of a spill offshore. No one is arguing with

that, but what we have learned from the C-NLOPB is that there have been no

records related to surveillance flights. They do not co-ordinate these

surveillance flights, they do not keep records of these surveillance flights. In

fact, much of the data comes from Coast Guard or Transport Canada who are really

out there monitoring shipping lanes and fishing vessels and not mandatory rig

platforms, I say to the minister.

So I ask the minister today: If air surveillance is the best way of

monitoring, why does the C-NLOPB not have a mandatory program and recorded data

available?

MR. SPEAKER: The hon. the Deputy Premier.

SOME HON. MEMBERS: Hear, hear!

MS DUNDERDALE: Thank you, Mr. Speaker.

Mr. Speaker, Transport Canada, through the Coast Guard, employs or contracts

with PAL to do oil spill monitoring in our offshore - over 100 flights a year on

that contract. Transport Canada also uses its Dash 8 out of New Brunswick to do

periodic patrols of the offshore. Mr. Speaker, DFO also has a contract with PAL

on fishing surveillance on the offshore.

Now, Mr. Speaker, all of the people who are doing the monitoring for these

agencies are trained in oil spill detection. There is a protocol established

again with all of this monitoring that if there is any spills spotted it is

reported to the Coast Guard who reports it to the C-NLOPB. Mr. Speaker, there is

no need for an extra layer of surveillance.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Leader of the Opposition.

MS JONES: Thank you, Mr. Speaker.

We are well aware of the patrols that are happening on the ocean, Mr.

Speaker, and the contracts that exist. The issue that we have, Mr. Speaker, is

this: If air surveillance is the method, and the most convenient method or the

most proven method, as the minister likes to state, Mr. Speaker, why is it that

the C-NLOPB does not have a mandatory program for the oil rigs, and why is it

that they are not collecting the data from these air surveillances? Why is it,

Minister, that the only time that these aircraft are flying to rigs to look for

spill detection is when the C-NLOPB themselves request that that be done? Very

different!

MR. SPEAKER: The hon. the Minister of Natural Resources and Deputy

Premier.

SOME HON. MEMBERS: Hear, hear!

MS DUNDERDALE: Mr. Speaker, the whole area offshore is covered through

all of these flights; the contracts through the Coast Guard, Mr. Speaker, and

the contracts through PAL.

Mr. Speaker, PAL also does, once or twice a week, radar satellite imagery of

our offshore which is also very effective in detecting oil spills. So, Mr.

Speaker, they are only required to report to the C-NLOPB if they spot an oil

spill. It is not required to report on a daily basis.

So, Mr. Speaker, in addition to the monitoring, the self-monitoring that goes

on with the oil companies, the independent monitoring that goes on with the

C-NLOPB, we also have this overfly through federal agencies and they report when

there is anything to be reported.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Leader of the Opposition.

MS JONES: Thank you, Mr. Speaker.

It is unfortunate that the minister would hang her hat on all of this when we

know for certain today that the C-NLOPB has no firm data on how many flights -

how much air surveillance is done over those rigs on an annual basis, could not

provide us with the information, Mr. Speaker, and assured us that there is no

mandatory program.

Mr. Speaker, we have also raised the issue of establishing a task force which

has so far been rejected by the minister, but members of the C-NLOPB did not

raise any concerns related to this suggestion. They said it would have to be a

political policy decision of government.

So I ask the minister today: To ensure the most open, accountable and

proactive process of monitoring our offshore, will you commit to creating a task

force that will work with and make recommendations concerning the offshore

industry on a continuous basis?

MR. SPEAKER: The hon. the Deputy Premier and Minister of Natural

Resources.

SOME HON. MEMBERS: Hear, hear!

MS DUNDERDALE: Thank you, Mr. Speaker.

Mr. Speaker, let me address the issue of data first. Mr. Speaker, the C-NLOPB

does have hard data, any data that is available on oil spills, which is the

issue. Mr. Speaker, they do not need to know how many times, because they know

that every day there is good visibility and good flying conditions there is a

plane in the air going over our offshore, probably several, Mr. Speaker. They

know that there is radar satellite imagery once to twice a week. What they need

to know about is: Is there any detection of oil spills? That data is sent to

them immediately, Mr. Speaker. So they do have that data which is most pertinent

to the discussion at hand and what we are talking about in terms -

AN HON. MEMBER: (Inaudible).

MS DUNDERDALE: Mr. Speaker, in terms of the other piece, the Premier

committed, and in effect now is a complete review of our legislative and

regulatory requirements for

MR. SPEAKER: Order, please!

The hon. the Opposition House Leader.

SOME HON. MEMBERS: Hear, hear!

MR. KELVIN PARSONS: Thank you, Mr. Speaker.

Mr. Speaker, this week government lost yet another court case. This time the

government lost an appeal against NAPE on the closure of thirteen winter

maintenance depots. This is after government already lost the case twice, first

in arbitration, and in the lower courts.

I ask the Minister of Treasury Board: Can the minister advise if he is going

to appeal this decision yet again? If not, can you provide an estimate of what

this is going to cost the people of this Province in terms of back wages to the

employees, government legal fees, and the legal costs which the court has

ordered that you must pay on behalf of NAPE for these various appeals?

MR. SPEAKER: The hon. the Minister of Finance and President of Treasury

Board.

SOME HON. MEMBERS: Hear, hear!

MR. MARSHALL: Thank you, Mr. Speaker.

The Court of Appeal did release its decision on this issue which has affirmed

the position of the government on two of the major issues that were before the

courts. The court, first of all, did affirm the government's ability as employer

to reorganize and to seasonalize for the summer season its headquarters area.

That was number one, and therefore overruled the decision of the arbitration

board and the Trial Division.

Secondly, the court affirmed the government's right as employer to layoff for

lack of work, thereby again, overruling the decision of the arbitration board

and the Trial Division. While the court affirmed the governments position with

respect to the right to seasonalize or to close for the summer the depots and

also to lay people off for lack of work, thereby protecting a very important

management right of government as an employer, the government did recognize that

in dismissing the employees, laying off the employees, there were certain

employees whose seniority rights and whose recall rights, bumping rights were

infringed and our government officials are getting together to review the

decision to determine the next step.

SOME HON. MEMBERS: Hear, hear!

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

MR. KELVIN PARSONS: Thank you, Mr. Speaker.

That is like the guy who was whistling past the graveyard. Now that you have

been ruled against, you decide what you liked about it. Pretty good.

Mr. Speaker, this case is one of the largest arbitration decisions upheld by

our courts in terms of dollar values. This latest legal debacle is going to cost

anywhere from $6 million to $7 million to cover the five years of back pay to

the workers which government improperly laid off in 2005. That amount does not

include the government legal fees and the NAPE legal fees. The people of the

Province are on the hook once again for all of these costs.

I ask the minister: Can you confirm that these figures are accurate, $6

million to $7 million for wages plus the court costs? I ask the minister, what

are your plans to resolve this issue?

MR. SPEAKER: The hon. the Minister of Finance and President of Treasury

Board.

SOME HON. MEMBERS: Hear, hear!

MR. MARSHALL: Mr. Speaker, as I indicated earlier, this particular court

case has reaffirmed the position of the government on two very important issues

which are important to government in its role as an employer, and that was very

important. Again, the Public Service Secretariat and Transportation and Works,

and Justice will get together to determine which employees may have had their

seniority rights infringed because of any improper layoffs and they will

determine if any salary and benefits are owed to these people and then the

Public Service Secretariat will get together with NAPE to make sure that the

appropriate redress is provided.

SOME HON. MEMBERS: Hear, hear!

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

MR. KELVIN PARSONS: Thank you, Mr. Speaker.

Despite the spin being put forward by the minister, I will tell you what this

court decision does make quite clear. Mr. Speaker, this case is entirely about

government's attempt to defeat the established principle of labour seniority

through a short-sighted move to get through the back door what you cannot

legally get through the front door.

I ask the minister: What steps will be taken by you, as President of Treasury

Board, to ensure that these costly labour mistakes will never happen again?

MR. SPEAKER: The hon. the Minister of Finance and President of Treasury

Board.

SOME HON. MEMBERS: Hear, hear!

MR. MARSHALL: Mr. Speaker, this case reaffirms the government's right as

employer to decide how it is going to organize its work and organize its

workers. That is the important principle in this case and the government's

position in this has been upheld.

In carrying out the layoffs, however, the government did not follow the

procedure that the court considered appropriate. Some people's seniority rights

and recall rights were affected and therefore Transportation and Works will

quantify those claims and will work with the Public Service Secretariat who will

work in turn with NAPE in order to ensure that the appropriate redress is

provided for those particular employees that need to be compensated.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for the District of The Straits & White

Bay North.

MR. DEAN: Mr. Speaker, thank you.

I questioned the Minister of Fisheries yesterday on the MOU process and the

concerns shared by many that it is not progressing fast enough to effectively

address the challenges confronting the industry at present. For example, we have

seen the turmoil created in the community of Jackson's Arm when its shrimp plant

abruptly closed last week.

Unfortunately, Mr. Speaker, this is only a taste of what rural communities in

this Province may see in months ahead, yet the government is refusing to offer

any meaningful assistance at this time outside job creation projects.

So I ask the minister: Until the MOU comes together, are you prepared in the

meantime to provide early retirement programs, worker adjustment programs,

community investment funds, or whatever it is that people need so that they and

their communities can weather this storm in their industry?

MR. SPEAKER: The hon. the Minister of Fisheries and Aquaculture.

SOME HON. MEMBERS: Hear, hear!

MR. JACKMAN: Mr. Speaker, the communities affected, we are very much

engaged with, and we will find our way through this.

Let me tell you, Mr. Speaker, where the problem arises. Anybody who would

have read the Cashin report in 2005 under a

section called management processing

capacity, a statement is made by Mr. Richard Cashin, he cautioned against the

wholesale increase in crab processing licence. Mr. Speaker, in 1996, down

further he just says: With full knowledge of the mess that the industry was in,

in 1996-1997 the provincial government, with the full knowledge of the mess,

allocated seventeen licences. Then in 1998-2000 they allocated another three and

then in 2001, Mr. Speaker, they issued another six twenty-six additional

licences.

No wonder we are in the mess that we are in, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for the District of The Straits & White

Bay North.

MR. DEAN: Mr. Speaker, with all due respect, we can all read history.

So I ask the question again: Until the MOU comes together, are you prepared

in the meantime to provide an early retirement program, a worker adjustment

program

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

MR. DEAN: or a community investment fund that would help the people

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

I ask the hon. member to pose his question.

MR. DEAN: The question, Mr. Speaker, is: Until the MOU process comes

together again, are you prepared in the meantime to provide an early retirement

program, a worker adjustment program, or a community investment fund whatever

you want to call them so that the people and communities can weather this

storm in their industry?

MR. SPEAKER: The hon. the Minister of Fisheries and Aquaculture.

SOME HON. MEMBERS: Hear, hear!

MR. JACKMAN: Mr. Speaker, 2001 is not that long in history, and I would

suggest that popular political decisions are not always the best ones to make in

the long-term interests of the people of the Province. I can assure you of that,

Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. JACKMAN: Mr. Speaker, as I have said, we have

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

The hon. the Minister of Fisheries and Aquaculture.

MR. JACKMAN: Mr. Speaker, we have not at any time, as a government,

failed the plant workers of the Province. We have stepped up for them in the

past. We are talking to mayors, union representatives and communities at large,

and Mr. Speaker, we will offer the supports that we can to get them through

this.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for the District of The Straits & White

Bay North.

MR. DEAN: Mr. Speaker, it is clear that the MOU process has become

nothing by a defence for government on these fishery failures, and in fact, many

are fearful that MOU is the new phrase for closing out plants and leaving plant

workers abandoned. Frankly, if this government was all serious about the MOU,

the most recent Budget would have allocated money for this process, and the

federal government, a key player in the industry, would be at the table.

So I ask the minister, if you are not prepared to provide the necessary

investments required to stabilize this industry now, and the federal government

is not prepared to step in, where does this leave the people and the communities

who are facing devastation of their livelihood?

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

The hon. the Minister of Fisheries and Aquaculture.

SOME HON. MEMBERS: Hear, hear!

MR. JACKMAN: Mr. Speaker, what I am hearing is that this member should go

out and say to the FFAW and the ASP that this MOU process is a waste of time. Is

that what he is saying? That is what I am hearing, Mr. Speaker.

I am telling you, Mr. Speaker, if this MOU process does not work, it will not

be because of the efforts that this government puts into it. We allocated

$800,000 to engage the parties in this process. As I have said, the parties that

can make the difference are at the table, and it will be in the best interests

of the people of this Province, the fishery, and rural Newfoundland and

Labrador.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for the District of Port de Grave.

MR. BUTLER: Mr. Speaker, last week I asked questions with regard to the

tender that was recently called to compact and redistribute the used tires being

stored in Dunville. We also asked for details surrounding the proposal, that the

minister mentioned would be coming on stream. Not surprisingly, Mr. Speaker, we

did not receive an answer.

So I ask the minister, yet again: What is the nature of this proposal and

when will we see a formal announcement?

MR. SPEAKER: The hon. the Minister of Environment and Conservation.

SOME HON. MEMBERS: Hear, hear!

MS JOHNSON: Mr. Speaker, while we are trying to work our way through a

solution for tires, and as the member opposite would know, this is not easy, as

there were two failed attempts under their watch, we are trying to do measures

in the interim to cut down on the costs, but also to cut down on the

environmental benefits, Mr. Speaker.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

MS JOHNSON: This tender that was put out was to look at if baling would

certainly work in the area. So we are just trying to get a feel for if it will

lower the costs. We believe it will, but of course, we want to wait for that

process to unfold to see if, in fact, that will happen.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for the District of Port de Grave.

MR. BUTLER: I say, Mr. Speaker, with all due respect, seven years and no

watch. I would also go as far as to say that the tires that were collected under

the former Administration probably have been burned for many months.

Mr. Speaker, I have heard the Minister of Environment state in 2007, 2008,

and yet again in 2009, and again this year that a plan for recycling tires is

imminent. It would be nice to finally see some details.

The minister stated recently that our tires were now being shipped to Quebec

to be burned and we were paying a shipping fee to get them there.

I ask the minister: What is the cost of shipping those tires to Quebec and

will the proposal currently being considered by government address this issue as

well?

MR. SPEAKER: The hon. the Minister of Environment and Conservation.

SOME HON. MEMBERS: Hear, hear!

MS JOHNSON: Thank you, Mr. Speaker.

I can get the exact details for him on the cost for shipping to Quebec.

Certainly, under their failed attempts in the past that is where the tires went

as well, so I imagine it would be somewhere in line when you had to ship them to

Quebec as well.

Mr. Speaker, shipping tires to Quebec is certainly, we know, the cheapest

option for the tires.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

MS JOHNSON: However, government committed to a made in Newfoundland and

Labrador solution, Mr. Speaker, and we want to make sure that this proposal

comes into place that it works for the long term. We do not want other failed

attempts, so we are working our way through it. There are things that come up

along the way with the proponents, but certainly we are working our way through

that and we really hope for a successful project at the end of the day.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for the District of Signal Hill-Quidi

Vidi.

MS MICHAEL: Thank you very much, Mr. Speaker.

Mr. Speaker, the C-NLOPB gave the Orphan Basin project the green light in

2006 for an environmental assessment known as the Screening Report. Previous to

2006 the environmental assessment rules included a comprehensive study which

would have included public consultations. This practice changed in November 2005

when the federal government relaxed the environment assessment rules for

offshore projects by eliminating the need for comprehensive studies at the

exploratory drilling stage.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

I plead to members once again. Members have asked their questions and

provided with answers. The Chair has recognized the hon. the Member for the

District of Signal Hill-Quidi Vidi. I ask members for their co-operation in

hearing the question put forth by the hon. member.

The hon. the Member for the District of Signal Hill-Quidi Vidi.

MS MICHAEL: Thank you, Mr. Speaker.

In hoping that the minister heard my preliminary comments, I now ask the

Minister of Environment and Conservation: How can she be satisfied to have a

less rigorous assessment done of the environment especially when dealing with

totally new areas of exploration?

MR. SPEAKER: The hon. the Minister of Natural Resources and Deputy

Premier.

SOME HON. MEMBERS: Hear, hear!

MS DUNDERDALE: Thank you, Mr. Speaker.

Mr. Speaker, as I have stated before in this House, environmental assessment

happens in our offshore under the auspices of the CEAA and the C-NLOPB. Mr.

Speaker, there are two environmental assessments that take place, first around

drilling. When oil is discovered, Mr. Speaker, there is another environmental

assessment done before production takes place, and as part of all of that, Mr.

Speaker, there are studies done on the possibility of oil spills and what might

happen in that case. All of these documents are public and available for

comment, and the public are included in the environmental assessment process.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for the District of Signal Hill-Quidi

Vidi.

MS MICHAEL: Thank you very much, Mr. Speaker.

Yes, I know the documents and I know they are public because, Mr. Speaker,

the original strategic and environmental assessment for the Orphan Basin

exploratory drilling program which was released in November, 2003, and which is

public, said that there was a lack of data on the environment. In the addendum

to the assessment that was released in 2006 there were observations by qualified

critics who said this lack of data on deepwater environment is a serious

concern, and I have read the gaps in data that have been identified. We know

very little about the environment two-point-six kilometres below the ocean

surface as it pertains to fish, mammals and benthos.

So, Mr. Speaker, I ask the minister: Why is this government willing to allow

exploration in the Orphan Basin before gaining a better understanding of the

environmental impact on the various life forms?

MR. SPEAKER: The hon. the Deputy Premier.

SOME HON. MEMBERS: Hear, hear!

MS DUNDERDALE: Mr. Speaker, as I said, there are two types of

environmental assessments that take place; one prior to drilling, Mr. Speaker,

and a second one once oil is found in the basin.

Mr. Speaker, as part of the Orphan Basin EA there was a study done on the

effect of an oil spill, a possible oil spill, Mr. Speaker. The model which was

done as part of the environmental assessment by an arm's-length agency that have

expertise in oil spills, Mr. Speaker, they modelled the loss of 30,000 barrels

of oil a day, every day for forty years, using the wind and wave data that we

have for that period of time. Mr. Speaker, the findings of that modelling was

none of that oil went outside of the basin area.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for the District of Signal Hill-Quidi

Vidi.

MS MICHAEL: Thank you very much, Mr. Speaker.

I say to the minister, that I am concerned about the area in the basin area

and we have very little understanding of what the damage would be in that area,

and that has been identified in the studies that she has talked about. The data

gaps are very significant.

Mr. Speaker, in 2007 government launched its Energy Plan with lots of hoopla

and the first stated goal of its Energy Plan was environmental leadership to

ensure the environment is improved and protected.

Mr. Speaker, I ask the Minister of Natural Resources, if it is leadership to

continue to allow exploratory drilling for oil in the Orphan Basin when the

environmental assessment admits that little is known about the environment in

which they are drilling?

MR. SPEAKER: The hon. the Minister of Natural Resources and Deputy

Premier.

SOME HON. MEMBERS: Hear, hear!

MS DUNDERDALE: Thank you, Mr. Speaker.

Mr. Speaker, I do not accept the premise that she has put forward. There are

stringent environmental studies done - pre-drilling and post-drilling - before

production, Mr. Speaker. The environment is extremely important to the people of

Newfoundland and Labrador. We are surrounded by the ocean. It has extreme value

over a variety of ways to all of us, Mr. Speaker. When we see what is happening

in the Gulf of Mexico it elicits a very strong response in all of us. Nobody who

is involved in this business and on this side of the House, Mr. Speaker, within

the government, is going to take an action that would deliberately or through

lack of intervention, pose an unreasonable risk to our offshore. We cannot

guarantee no risk, Mr. Speaker, but we will do our best to prevent

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The time allotted for questions and answers has expired.

Presenting Reports by Standing and Select Committees.

Tabling of Documents.

Notices of Motion.

Notices of Motion

MR. SPEAKER: The hon. the Minister of Finance and President of Treasury

Board.

MR. MARSHALL: Thank you, Mr. Speaker.

I give notice that I will move that the House resolve itself into a Committee

of the Whole to consider a Resolution Relating to the Advancing or Guaranteeing

of Certain Loans made under the Loan and Guarantee Act of 1957. (Bill 25)

Thank you, sir.

MR. SPEAKER: Further notices of motion?

Answers to Questions for Which Notice has been Given.

Petitions.

Orders of the Day.

Orders of the Day

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

MS BURKE: Thank you, Mr. Speaker.

I would like to call from the Order Paper, Order 9, second reading of a Bill,

An Act To Amend The Insurance Companies Act. (Bill 16)

Mr. Speaker, we had adjourned that debate on June 1.

MR. SPEAKER: The debate will be further heard on

An Act To Amend The

Insurance Companies Act. (Bill 16)

The hon. the Opposition House Leader.

MR. KELVIN PARSONS: Thank you, Mr. Speaker.

I appreciate an opportunity to have a few words on Bill 16.

Mr. Speaker, again, this is not a new act. We are just amending the Insurance

Companies Act. My colleague, the Member for Port de Grave, of course, is the

principal critic for matters that come under the Department of Government

Services. However, of course, under the rules of this House we are all permitted

to have a few words and pose some questions, if we might, to the minister as to

what the legislation is about, what the intentions of it are and so on. I

certainly appreciate the opportunity to do that.

Mr. Speaker, we have all kinds of insurance companies in this Province. They

are regulated, and of course there are all kinds of insurance. We have auto

insurance, we have home insurance, we have marine insurance, and we have life

insurance. There are all kinds of insurance that one can purchase. Of course,

there are companies involved, there are brokers involved, there are agents

involved, and of course there is the consumer involved.

One of the principal responsibilities of government, of course, is to ensure

that these people who are selling these products abide by certain rules and

regulations so that the consumer is protected. As time goes on, different

circumstances arise. Usually it arises when we find out that some individual or

some consumer has not received the protection that we feel he or she ought to

have gotten. Therefore, of course, we have to come back to the Legislature to

amend the legislation to ensure that the individuals in question get the

protection that they want. It is not only for that individual, of course. We

make legislation in this House so that it accords and provides the necessary

supports and protections to all consumers in the Province.

That obligation, from a personal point of view, an individualistic point of

view, rests of course with the minister. Once he hears these concerns - the

minister has to listen to the concerns. He usually has department officials who

would weigh out the concerns, determine what the facts are and decide what, if

any, course of action should be taken. Here we have an attempt again where we

have seen that government has been put on notice that some things are obviously

happening in the marketplace when it comes to insurance companies that do not

necessarily pass muster or at least we want to put further constraints and

requirements in place to ensure that the consumers are protected.

Now, I did not have the benefit of listening to the minister's comments when

he introduced Bill 16. I heard some of them, but not all of them. So if I repeat

anything that the minister has already addressed, well, that is fine. I would

appreciate as well my colleague, the Member for Port de Grave, did pose some

comments and questions. Normally, of course, the minister has two opportunities

to respond to any queries. He can respond to it in a general sense when he

closes off debate in second reading or, of course, he can deal with it more

specifically when we get to the committee stage. We are only at the stage that

they call second reading right here. Most ministers take the opportunity. They

have staff standing by, of course, who can give them information if we pose

questions and most ministers take the opportunity, if time permits, to deal with

the concerns that are raised by Opposition members when they close off the

debate in second reading. If not, of course, we always have another opportunity

to raise those questions when we get to the committee stage. In committee stage,

of course, we not only get to raise questions; we can pose amendments ourselves.

Amendments do not just have to come from the government members. An Opposition

member in this House is totally permitted to pose any amendment that he or she

wants to propose. That is the process.

Anyway, we are dealing here with the insurance amendments we are trying to

bring forward. In particular we are talking about the regulations; and,

according to the Explanatory Notes - whenever a bill comes before the House, you

always get, on the inside cover, the first cover, an explanation. Because these

laws, of course, or proposed laws, are drafted by the legislative draftsperson,

and that person usually tries to, in common language, explain what the

particular amendment says. Because sometimes if you read these amendments that

are proposed and you get boggled down in the

section numbers 95.1, sections 95.2

and 95.3 and subsections, of course, sometimes it can boggle your mind. You have

to be a Philadelphia lawyer to figure some of it out. That is why, of course,

the Explanatory Notes are there. So, along with the Explanatory Notes and, if

they are not explanatory enough, that is usually where the minister takes it

upon himself to provide that explanation, so that before we ultimately vote on

something in this House we feel comfortable. We know we have had our questions

answered, we know we have had the information given to us, and we can vote aye

or nay based upon the comfort level that you have with the particular piece of

legislation.

Now, I can say from the outset that this particular member, as the Member for

Port de Grave said, is certainly not opposed to this piece of legislation. It is

not a case of being opposed to it. It is not like in the Fatal Accidents Act,

which was called two days ago here. There is great opposition to that particular

amendment in the sense that it does not go far enough. It is our view, of

course, that if you are going to bring legislation to the House it should deal

with the issue and not take half measures. In any case, dealing with this,

according to the Explanatory Notes here, Bill 16 would amend the Insurance

Companies Act, and do a couple of things.

First of all, it would authorize the Lieutenant-Governor in Council - and a

lot of people wonder: Well, who is the Lieutenant-Governor in Council? You often

hear that phrase, but a Lieutenant-Governor in Council, of course, that is the

Cabinet, basically, made up of the Premier and his Cabinet ministers. That is

generally who the Lieutenant-Governor in Council is. A lot of people were

confused. Some friends of mine asked me one time: What is the difference between

a Lieutenant-Governor in Council and a Lieutenant-Governor? Anyway, we went

through those explanations, but the Lieutenant-Governor in Council basically

refers to the Cabinet, the Executive Branch of government, and that is, of

course, who brings legislation forward. Every piece of legislation that comes

into this House of Assembly for consideration has to be proposed, brought

forward and moved by a certain minister. In this case, of course, because

insurance company regulation comes under the Minister of Government Services,

that is why his name is on this bill, because he is the person who brings it

into this House and moves it for consideration.

Now, what it is going to do, first of all, the proposal here, is, it will

"authorize the Lieutenant-Governor in Council to make regulations respecting the

underwriting, rating and market conduct practices of property and casualty

insurance companies." Now, just dissect that for a second. I direct some of

these questions, of course, by way of explanation, to the minister. Maybe he

could explain to us some distinctions here. People like to understand. We know

we have an insurance company, we know there is underwriting, we know that there

is rating, and we know that there are certain market conduct practices.

Now, I ask the minister: Is there anything in particular that has happened in

the marketplace to the consumers which has sparked this particular piece of this

amendment? Normally, we do not just get someone who sits in government, for

example, in the minister's office or somewhere, who says: My God, I think we

will go out and review the Insurance Companies Act and change that.

Normally, it is precipitated and brought about because something has

happened. Normally, there is some seminal event that took place in the

marketplace: somebody got burnt, they felt, by some insurance company, some

practice that they did in the marketplace. Usually you hear about it being

talked about on open lines and Letters to the Editor. Anyway, it eventually

finds its way to the minister's office and the minister says: We have to deal

with this.

So, I am asking the minister: I wonder, is there some particular incident

that brought this about? By the way, folks, we are talking here about giving the

minister the authority the Lieutenant-Governor, and the minister is a part of

that Lieutenant-Governor in Council we are talking about giving authority to

make regulations respecting the underwriting, rating and market conduct

practices of property and casualty insurance companies. Obviously, we are not

dealing with life insurance here; we are dealing with property and casualty

insurance here.

So my question to the minister is: What has happened to make this amendment

to this act necessary? In particular, can you tell us what it is you are going

to do in the regulations? For example, when we dealt the other day with

amendments to the Small Claims Act, it referred to amendments being made to the

Small Claims Act, and regulations being made by the minister, one of which

dictated, or could decide, the limit of suing someone in Small Claims Court. The

minister, in that case, told the audience, told the public who were watching

this, that what we are going to do when we get this authority from this

amendment is make a regulation that is going to take the limit from $5,000 up to

$25,000. It was very clear why the minister felt that it was necessary to make

this amendment and have this authority.

My question to the minister is: What happened to bring the amendment about;

and, besides simply saying that you are going to have the authority to make the

regulation, what is it you anticipate doing in the regulation?

People sometimes like to know that; because we have had cases in this House,

for example, where government says: We want the authority to make a regulation.

The Opposition will ask: Well, okay, once you get the authority to make the

regulation, what is it you intend to do? Do you know at this point?

It might be a case where the minister has not decided right yet. That might

be legitimate. That may be legitimate. Maybe the minister says: Look, I have 100

things I might do. We have not decided definitively what it is we want to do,

but before we go anywhere we have to have the authority to do it.

So, maybe he is just there at this point saying: Pass this amendment; give us

the authority so that we can make these regulations - but I think it is helpful

to the public. It is certainly helpful to the people who are voting here. For

example, maybe the minister is going to pass a regulation after this law gets

brought into effect here, this amendment, maybe he is going to do something and

everybody in this Province might say: That is crazy. Why did we ever agree to

that? That was a stupid move.

I am just trying to get some idea to gauge what it is that the minister

intends to do. I will give you an example of where that happened. I will give

you an example of where a regulation came about. The government used the

regulation and it caused wholesale anguish in the public. I am talking, of

course, about the trail sticker users back a few years ago. We had amendments

brought into the House and they needed authority, of course, to be able to

impose a fee structure in the Province for people who would use certain

property, certain rail beds and stuff like that. We got here in the House and we

said to the government at the time: Why is it you are doing this? They told us

why: because they wanted to have the authority to be able to put a fee structure

in place when it came to trail users. We said: Okay, that is fine. What do you

plan on doing? What is the fee structure going to be? We have not worked that

out yet. When are you going to bring it in? We have not worked that out yet. So,

you just want the authority.

Anyway, they brought in the particular fee structure and, as they say,

H-E-double-L broke loose. That is exactly what happened. The people went crazy

because their government did not tell them up front what it is they were going

to regulate. They knew what they were going to regulate, but they did not tell

them what the regulation was going to be.

So, I put it to the minister. He gets two opportunities now. He will get the

opportunity when he is closing off second reading and he will get another

opportunity when we come back in committee stage and deal with this. We will see

if, at any point, he is going to tell us what it is he intends to put in the

regulations that this amendment is going to allow him to do.

So, people would like to know that. God knows, and as the people in this

Province know, it does not take very long for this government to have out a

notice, to put something out on the Web site, to take out an ad in the

newspaper, to say we did this or we did something else or we are going to do

something else. As I have often said in this House, Mr. Speaker, we have had

enough press releases from this government in the last seven years that we could

have kept both the Stephenville and the Grand Falls-Windsor mills going. That is

how many press releases we have had. So, I say to the minister, here is an

opportunity, now, in second reading, give us some hint. Let's have the people of

the Province - give them a little bit of insight into what it is you are going

to say in these regulations to protect it.

Now, of course, that is just the first part of the explanatory note here. I

will move on to the second part. I do not know if I will get enough time in this

session to address all of the concerns that I have. I might have to wait until

we get to committee stage, of course, because there is a lot to this little

piece here. Even though it is only two pages, and it only takes up one page on

the paper, it is actually pretty detailed.

The second

part I will get into, it says this change would allow, it would

add a provision to clarify that an insurer shall not decline to issue, refuse to

renew or terminate a contract or refuse to provide or continue coverage on a

ground prescribed in the regulations. So now, we already know, from the

regulations and the authorities that exist, that the government has already

decided what certain prescribed prohibitions are certain things you cannot do.

You cannot refuse to give someone, for example, coverage. You cannot refuse to

renew their contract of insurance. You cannot terminate a contract of insurance.

You cannot refuse to provide or continue the coverage for insurance on certain

grounds.

So, I am just wondering, from the minister, if he could educate us again,

inform us what kinds of actions by insurance companies do you see coming out in

these regulations. We know what we are saying the regulations are going to allow

you to do. We know that you need the authority to be able to make these

regulations, but again, can you give us some insight as to what types of

activities are currently going on by insurance companies that might need to be

addressed by bringing in this law? Are there any particular incidents that have

happened that have caused this to be necessary? Obviously, the information, the

laws that we had previously, did not provide this authority. If it had provided

this authority, of course, we would not be here today. So, something has

happened that the minister had to change it and he wants to do something. I

would like to know what it is, what circumstances have occurred that require

this.

Now, of course, the other thing that this piece of legislation is going to

do, it is to add a provision to clarify that an insurer shall not use a ground

in a risk classification system that is prohibited in the regulations. Now, I

say to the minister, I do not understand personally. I have tried to unravel

some of the pieces, but like you say, I am certainly not one to think I know

everything about everything. That is why, of course, we ask the informed

ministers who have the knowledge at their fingertips. That is why we ask them.

If we do not understand something, this is the purpose to ask the question,

right here in the House. Sometimes we get to do it in Question Period, but as

everybody knows who watches the TV program or sits in this hon. House as a guest

and watches, we do not often get answers from these ministers when you ask them

in Question Period.

Now, this is a different story. This is not a case here where we are in

Question Period and the minister does not have enough time or he only has a

limited amount of time. The minister can take whatever time he wants to answer

these questions that anyone might pose here. He can do it. We are prepared to

give him leave to answer whatever. As long as it is complete and it is detailed,

that is all we are looking for. We do not care if he has to go get a book and

come in here and read from the book to us. We do not care if he has to get a

briefing note and come in here and read from it. I understand he is one of the

ministers, of course, who uses briefing notes. We had some over there who did

not need them. The former Minister of Health did not need briefing notes. His

head was big enough to handle it all. He did not need any.

Anyway, I wonder if the minister could explain to us what exactly a risk

classification system is. I have some idea about it. I have some basic idea

about it, but I admit I do not understand how it works. For example, once we

explain what it is - and we are saying, under this third part that I am

referring here, that you are looking for some authority so that you can add a

provision here which will clarify that an insurer shall not use a ground in a

risk classification system that is prohibited in the regulations. That is a

little bit complicated to me.

Now, of course, other members in the government will be getting up speaking

on this issue too, so I look forward to hearing from them. Maybe they have the

answers. Maybe they have the answers and the minister does not need to respond,

but it would be very helpful if we could have that kind of explanation. I often

get asked by people who watch TV a lot of people watch these proceedings and

they say: Well, what was that all about? You get a phone call or you get an

e-mail and they say: You fellows were talking about something today, we know it

was about insurance but we do not have a clue what it was.

So part of our obligation, of course, as parliamentarians, is to explain what

it is. There is no doubt that all forty-eight in the House here or

forty-seven, because the Speaker does not get involved in the voting have an

obligation to understand it. We are going to vote on it. We do not always

understand it and that is the purpose of this legislative debate session. It is

not a debate. A debate sometimes implies that two people are on opposite sides

of the fence. We are not on the opposite side of the fence with the minister

here with this piece of legislation not from what we understand of it but we

just want to be certain that what we do understand is correct.

So I look forward to some of this level of detail from the minister, some

explanations, so that when we make our decisions we will be fully informed.

Thank you, Mr. Speaker, for the opportunity to speak to this issue.

MR. SPEAKER: The hon. the Member for the District of Cape St. Francis.

SOME HON. MEMBERS: Hear, hear!

MR. KEVIN PARSONS: Thank you, Mr. Speaker.

It is indeed an honour today to stand up here in this House and represent the

beautiful District of Cape St. Francis and say a few words on Bill 16.

I suggest to the hon. member across the way who just spoke to us that he

should talk to his partner, the hon. person for - where is it to - Port de

Grave. Two of them are not on the same page because last week we heard from the

hon. Member for Port de Grave and he was fully in favour of this bill.

An Act To Amend The Insurance Companies Act, I believe this is one of

fourteen bills that the hon. the Member for Gander, the Minister of Government

Services, is going to bring in. This is a very important

AN HON. MEMBER: What a minister.

MR. KEVIN PARSONS: What a minister indeed. This is a very important

department in government. It is a department in government that I realize a

little bit more about these days since I got into government. Most of us look

outside; we look at departments like Transportation, Education, Municipal

Affairs, Health, and we look at those as the most important departments in

government. As I got in government, I realized that the Department of Government

Services is so important. From the time you are born until the time you die,

this department has something to do with your life.

This act that we are bringing in here today is very important to the people

of the Province. I am going to give the hon. member a couple of examples where

it does affect the people in the Province. This government, since 2003, has done

a lot for the consumers in this Province. This is another bill that we are doing

to do to protect the people of this Province, who, through no reason of their

own, are finding that they have been unfairly treated.

Mr. Speaker, today we look at insurance companies, and they have many means

of charging different rates for different things that you want to do. Recently,

my son went through the insurance to try to get the best possible cost he could

on his car insurance. The variance was $1,100 from one insurance company to

another. So you can see that they have a right to charge basically whatever they

wanted.

I have a friend of mine who sells insurance, so what I did, I gave him a

call. I wanted to know a little bit more about house insurance. It was very

interesting what he was telling me. I asked him about a scenario. I said a house

that cost $200,000-$250,000, what are you looking at for a cost for insurance?

He told me it could be anywhere probably between $600, $800 or $900. He said,

however, there are a lot of rates that can be reduced. A lot of cost can be

reduced, depending on the insurance companies.

For example, insurance companies, if you have your vehicle insured you can

get up to a 25 per cent discount on your home insurance just for having a

vehicle insured with that company also. If you use electric heat, for example,

you can get a 10 per cent deduction in your cost; an alarm system, you can get

up to 5 per cent. If you are over the age of fifty you can get a deduction there

of up to 10 per cent, and if your home is less than three years old it is

another 10 per cent. As you see, there are many ways how home insurance can

decide what rate you get charged. The one interesting thing that really

surprised me, he said insurance companies can decide whether or not to insure

you based on your financial situation.

Now, Mr. Speaker, I look at that and think that is so unfair. When you look

at insurance companies, property and casual insurance companies can charge

higher rates for home and auto insurance for people who have low credit ratings.

They are saying because they are at a higher risk. Also, Mr. Speaker, they can

give the people who have high credit ratings a deduction. A person who is doing

really well, they can give them a deduction and they can put down the person who

is not doing so well. Well, that is against every standard we have here in this

government.

If anyone looked at our poverty reduction, what we are doing to make sure

that residents of this Province come up on an even keel with everyone else

through our poverty reduction plan, this is not flying at all. Because a person

finds themselves - it could be unemployed, they could have a marriage breakup.

There are many different reasons why you could have your credit rating changed.

Now, Mr. Speaker, since this was introduced, since the minister introduced

this bill - and I tell the hon. member, he was wondering why - the Opposition

House Leader was wondering why we put this burden on government, why this is

happening now. Well, I have a great case since this bill was introduced, in my

district. I had a call from a constituent of mine who, her and her husband had

some financial difficulties in the last number of years. When she went to get

her home insurance renewed this year she paid $600 last year, and this year

her rate went up to $1,300. When she asked why, she was advised because it was

her credit rating. She was also told she either had to pay it or go elsewhere

and look. So she did.

She checked around with other companies and she got a suitable price, almost

the same price that she was paying the year before. She told the company that

she was going to get her insurance through; she told them the reason why she

went from this company to the other company was because the previous company

that she had her house insured with, it was because of her credit rating. They

told her that this company did not do that. So she called back a couple of days

later, she wanted to know how much to put on her postdated cheques. She was

paying so much down and she wanted to know how much to put on her postdated

cheques. When she called back, Mr. Speaker, they told her that it went to head

office and she was turned down again because she had a high credit score.

Mr. Speaker, that is so unfair. This lady, who called her previous insurer

and told them that she was going to go with another company, was left a weekend

without insurance. This is when she called me, and she was very, very stressed

out over it. To put a person through this was unbelievable. She went the whole

weekend hoping that nothing would happen to her home. On Monday she called and

got another insurance company and finally got her insurance for $900; which is

$300 more than she paid the year before.

Mr. Speaker, I believe that this government has made great changes in helping

the people of this Province. I talked to the guy from the insurance and he told

me today they are more people with house insurance than ever before in this

Province. I think it is because of what this government is doing to put more

money in people's pockets so they can afford to pay for important things like

house insurance.

Mr. Speaker, in my district housing has increased unbelievably in the last

ten years. It is one of the fastest growing areas of the Province. The average

home in Torbay right now, a new home is at $307,000. That is the highest in the

Province, per capita, and under any municipality. Mr. Speaker, anyone who can

afford a $307,000 home, their credit rating is pretty good and they do not have

to worry about getting insurance. It is the people in my district who are on

fixed incomes, like the lady I just spoke about. They do have to worry about it.

It is so unfair, because of their credit or because of their financial

situation, like I said that they get themselves in sometimes, that they be

penalized.

Mr. Speaker, today the value of everything is up so high and it is very

important that we have insurance. We have insurance on vehicles; some that have

skidoos, trailers, cabins and whatnot. There is no bigger investment that we

will have, I know there is no bigger investment I will have in my life than my

home, and it is so important that we protect our investments. If you look today,

there are people with mortgages twenty-five, thirty, thirty-five years.

Something they invest their whole life in just to have, and if something ever

happened to lose that they would want to have the security of insurance. So we

should not be denying people insurance.

Mr. Speaker, insurance companies can basically decide what they want to do.

Recently, I read an

article back a little while ago on the City of St. John's,

where downtown St. John's people were either denied insurance or the rates even

tripled because of the area they lived in. I think that is unfair also. I think

it is discriminatory that they can say because you live in one area or live in

another area that we are not going to insure you. So we have to look at the

regulations that we do have with insurance and make sure that they are fair to

all people in the Province.

House insurance is so important because it is a sense of security that we

get. Mr. Speaker, if your house ever happens to burn down - and nobody wants

their house to burn down. There are so many different things, I know with my

home there is sentimental value. There is sentimental value in your home. I have

some pictures downstairs of my kids that mean a whole lot to me. I have a wall

downstairs, and I know the hon. Member for Ferryland will like this one, called

the Herder wall. There are some pictures down there of all the Herders where we

beat the Southern Shore. They mean a lot to me also. So if you ever lost your

home, there is a lot of sentimental value in your home that you would lose but

the one thing that home insurance gives you, it gives you a chance to get

everything back that you lost with your home - the place where you live. So,

again, home insurance is just so important to people for security.

Now, I am going to tell you a little story. About fifteen years ago my

parents went on vacation. Every year they used to go on vacation, and they left

me with the job of taking care of their home. While they were gone every day - I

live pretty close to them. I am the closest one who lives to their house. Every

evening I used to walk up and I would flick on the light in the living room and

then I would come up in the morning before I went to work and I would turn the

light off, just to show that somebody was in their home while they were away so

nothing would happen. My father came home late at night, they come back from

their holiday late at night, the phone rang, and he said: Kev, why did you cut

off the lock downstairs in my room? I said: I didn't cut off the lock in the

room downstairs. So he called my brother, Robert. He said: He did it. So, he

called Robert, and Robert did not do it. So I went on up to see, and by the time

I got up there he was after realizing that they were robbed. Someone was after

going into their home I did not know the place was robbed robbed all of his

small tools. Everything was gone. He had a room downstairs where he kept all of

his papers. He had a trucking company. He kept cheques there, he had different

things, and all of this was stolen. My mother had some rings and jewellery; that

was gone. The VCR was gone. I never noticed the VCR being gone. Anyway, the

thing was, they lost

AN HON. MEMBER: Some job you did.

MR. KEVIN PARSONS: I did a great job, yes. If anybody wants their house

watched, I will not do it.

Anyway, Mr. Speaker, my point is that they lost a lot, but what they did lose

they got replaced because they had insurance. Was it hard for those people - my

parent's home, the doors were always open; now they have a security system and

they are locked. They got everything back that they replaced. They got it all

back again. So I would say to all hon. members: I am not going to watch any of

your homes any more.

That is an example of what home insurance does for people so that they can

replace things.

Mr. Speaker, also if you look at home insurance, if anybody comes to your

home and happens to have an accident, you can be sued and your home insurance

will cover you. It will cover your legal bills and it will cover any damages up

to a certain amount that you are insured with. So that is another great way -

home insurance that we all need.

The other thing, I had an example in my home where I had a leak come down

through the ceiling. It ruined a lot of things and cost me a couple of hundred

dollars for the deductible, but the $2,000 or $3,000 it cost to repair it was

covered.

Mr. Speaker, it is so important that we do not deny people home insurance. It

is very important that they have that sense of security and everybody wants it.

Mr. Speaker, since 2003 this government has done a lot for people in this

Province. If you look at the poverty reduction plan, in 2003 there were 63,000

people who fell below the cut off point; by 2007 we have 30,000 fewer people on

that. Right now, we are considered the third lowest in all of Canada and we are

investing this year $134 million, which is $482 million since 2006.

Different other things we have done: the minimum wage. Increasing the minimum

wage is putting more money in people's pockets. The prescription drug plan,

12,000 more people are under this plan, putting more money in people's pockets.

This year we have $42.8 million in tax reductions. Since 2006, that is $1.2

billion in tax deductions that we are putting in people's pockets so they can

pay for things like home insurance.

Mr. Speaker, this government has looked at insurance for auto insurance. In

2007, this government introduced the elimination of the Retail Sales Tax, 15 per

cent. The RST applied to the insurance premiums for property and casualty

insurance properties on vehicles and homes means $75 million a year that this

government is paying to help people with their insurance. In 2004-2005, we

introduced the Automobile Insurance Act, in which this eliminated people being

discriminated because of age, gender or marital status.

Mr. Speaker, you can see that there is a lot that this government has done

when it comes to insurance. I applaud the minister. I think he is doing a

fantastic job. I hope that he gets a cheer rather than a jeer on this bill

because he is doing such a good job. The reason why he is doing a good job, Mr.

Speaker, is because, like the hon. Member for Baie Verte-Springdale says, we

care.

Thank you very much.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER (T. Osborne): The hon. the Member for the District of Signal

Hill-Quidi Vidi.

MS MICHAEL: Thank you very much, Mr. Speaker.

I am happy to have an opportunity to speak to this bill, which is

An Act To

Amend The Insurance Companies Act. I was unable to be in the House yesterday

when the discussion began, so I am happy that I still have an opportunity to

speak to it.

It is a simple bill in many ways, Mr. Speaker, as has been pointed out, Bill

16. It is short. It is an amendment to a major act, the Insurance Companies Act.

What this bill is doing is making sure that all forms of insurance are covered

when it comes to certain aspects of insurance. Insurance is a fact of life and

many, many people really find it difficult to have insurance, which is sometimes

more than an inconvenience for them when they cannot afford to have insurance.

For example, when you hear of fires that take place in rental properties the

property itself will be insured because the landlord will have insurance. The

landlord who owns the building has to have insurance. They cannot be renting a

building, cannot have a mortgage on it, they have to have insurance. The people

who rent the property, the people who live in the rental property very often

cannot afford to have insurance. If a fire happens in the rental property while

the landlord will get the insurance for the damage to the structure, the person

living there will not get anything for the things that they owned in the rental

property.

So often you hear of that. You hear of fires where people had no insurance

and after the fire they have to be put up sometimes by the Salvation Army or Red

Cross, and people collect things for them because they do not have the money to

replace what they lost in the fire. So, insurance can be very expensive. There

are times when we have no choice over insurance. For example, if we own a car,

we have to have insurance on that car. There are many times when accidents

happen that a person does not have insurance, well they get penalized for that.

Most other insurances, of course, are optional. If people want to get life

insurance, it is optional. It is not something that they have to get. You have

insurances now on mortgages so that if something happens, you become unemployed,

and in the interim because you are unemployed would have difficult paying your

insurance, if you have insurance on your mortgage then your mortgage will

continue to be paid. We have health insurance. We just have massive amounts of

insurance. We all know that the insurance companies are doing very well in our

society because many people carry insurance for years and years and years and

never ever have to claim it but they are afraid not to have it. I would be; I am

afraid not to have it. Of course I have insurance on the things that I own

because I do not want to run the risk if a fire happened, for example, I do not

want to run the risk of not being able to replace what was destroyed in a fire.

Insurance is a part of life. The majority of people who have it are people

well, all of the people who have it are people who can afford it, but for the

most

part low-income people do not have it because they cannot afford it. If

they are blessed enough to be able to have a car, they obviously have to have

it. Very often, you will find that low-income people who are able to have a car

because they need it, especially if they live in a rural part of the Province,

may not have the insurance because they cannot afford it and they run the risk

of owning the car and using the car without insurance. So, insurance is a tricky

thing in our lives and many people have good experiences of having had

insurance, and yet there are also experiences that people have that are bad.

It is incumbent on the government, it is the responsibility of Legislatures

to make sure that legislation is in place to protect people vis--vis insurance

companies. That it what the act is called, actually, the Insurance Companies

Act, and the amendments that are being made are amendments that will apply to

classes of insurance other than automobile, because the automobile has quite a

bit of legislation covering it the automobile insurance so, the amendments

that are being brought into the act are broadening some areas of concern to

other classes of insurance, and I think that is extremely important. It is

extremely important that anybody who needs insurance, or who believes he or she

needs insurance, is able to access that insurance. That is why clause 95.2 is so

important, that "An insurer shall not decline to issue, refuse to renew or

terminate a contract or refuse to provide or continue coverage or an endorsement

in respect of a contract on a ground prescribed in the regulations."

Now, as has been pointed out, Mr. Speaker, we do not have the regulations

with this bill. Regulations do not come here to the House to be approved;

regulations are under the aegis of the Lieutenant-Governor in Council and they

get put together under departments, under the minister responsible, and will

always and should always reflect the spirit of the legislation that the

regulations flow from.

So the thing I think I would expect from the minister and he may have done

it when he presented the bill in the House yesterday. As I said, unfortunately,

I was not able to be in the House at that time, so I apologize to the minister

if what I am asking for has already been done. I could, I guess, get Hansard now

and see if it is there, but I would like to have the minister give us an idea of

the full gamut of what the regulations will cover, the regulations that will go

along with the amendment. Will they cover all potentialities? We have had some

examples used here in the House already today that somebody who was used to

having insurance, all of a sudden their credit rating changes and they are being

refused by an insurance company.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

MS MICHAEL: Insurance companies, too, very often raise insurance quite

liberally, benefiting the insurance companies, and individuals suffer from that.

So I would like to have some idea from the minister of what it is that the

regulations will be covering, because the regulations will be extremely

important in determining when companies cannot act arbitrarily. It will stop

them from acting arbitrarily with regard to changing a contract, with regard to

terminating one, or even with regard to refusing to enter into a contract with

an individual who is seeking insurance.

Mr. Speaker, we have heard a lot about insurance. I do not think I need to

add to what we have heard, except to say that while I understand why regulations

are not coming here, I would like to hear from the minister about what he hopes

to see in the regulations, to assure our listeners today, to assure people in

the Province, that the new regulations will benefit them completely, that the

new regulations will make sure that anybody who is insured is protected at all

times while they are insured, and anybody who wants to access insurance is able

to access the insurance.

With that, Mr. Speaker, I will take my seat and I look forward to hearing

from the minister.

Thank you.

MR. SPEAKER: Order, please!

The hon. the Member for the District of Lewisporte.

SOME HON. MEMBERS: Hear, hear!

MR. VERGE: I was not about to start without the applause, Mr. Speaker.

AN HON. MEMBER: We will give you another one.

SOME HON. MEMBERS: Hear, hear!

MR. VERGE: Mr. Speaker, it is indeed a pleasure for me to stand here

today, as the Member for Lewisporte district, and speak on another piece of

legislation. I say that with all sincerity; it is an honour and a privilege to

be able to speak at any time in the House. Before I even start to talk about the

legislation, though, Mr. Speaker, I would like to take this opportunity to

congratulate you, Deputy Speaker, on becoming a grandfather today.

SOME HON. MEMBERS: Hear, hear!

MR. VERGE: May you have lots of pleasant times, grandparenting.

This piece of legislation,

An Act To Amend The Insurance Companies Act, the

approach that I have taken with this piece of legislation, Mr. Speaker, is,

whenever I get the opportunity to speak, I kind of look at it and I read the

legislation and I say to myself: What is it here that I understand, and what is

it that I do not understand? Then I try to, I guess, frame my comments around

that, and hope that, when I am done, some people who listen to this through the

media, or some people in the House - we might all have a better understanding,

and I might be able to share a little something that is of value.

The Insurance Companies Act enables government to make regulations respecting

underwriting. That is one of the things that I want to talk about, because when

I read this piece of legislation the first thing I did, as a lay person, I said

to myself: Well, what is underwriting - respecting the underwriting, rating and

market conduct practices of property and casualty insurance companies. It goes

on for another couple of clauses, but I want to talk for a while on

underwriting: what is it that it does, and who are they and what do they do?

Insurance underwriters, what they do, they evaluate the risk and the exposure

of potential clients. It is these people who decide how much coverage a client

should receive, how much they should pay for it, and sometimes whether even to

accept the risk of insuring the client at all. Underwriting involves measuring

the risk exposure and then determining, based on the risk exposure, the premium

that is going to be charged to insure that risk. So the function of an

underwriter really is to acquire or to write business that will make the

insurance company money, and to protect the company's book of business from risk

that they feel would result in a loss. It is very important piece of the pie;

the underwriter determines how much a person, really, is going to pay for

insurance based on a whole set of factors.

Insurance, of course, is all about risk. When you get an insurance policy,

that company is taking a risk on you. If you drive a car, we all have a risk

that the car could be damaged in an accident. When we have auto insurance and

the car gets damaged in an accident, then the insurance company pays for that

damage. So, when we have insurance we are, ourselves, at a lower risk.

The insurance company makes up for the risk it takes by charging premiums and

also by setting certain deductibles on their insurance. If the company charges

too little and there is a large claim that comes in - the company charged too

little well, the company could go bankrupt. We, certainly, as government and

as citizens, do not want to see insurance companies not being able to make

enough money to survive and to provide us with the protection that we need. So,

what we want, we want to see insurance companies be able to profit, yes, but we

do not want to see them profit at too much of our expense, so the underwriters

should be able to help the insurance calculate all the risk and then give that

insurance company a premium that they should charge us, as the client, that will

protect the interests of the business but also protect the interests of us, the

client.

Now, insurance underwriting is very important, and I guess as residents we

need to know that. Insurance companies want to stay competitive and they want to

stay open for business, so underwriting is important. If they charge too much,

well, people are going to start shopping around and going other places. If they

charge too little, and then they get claims coming in that are exorbitant, then

they are going to be at a deficit position there. Why is it important to me? Why

is it important to the members of the House or the residents, the people of

Newfoundland and Labrador?

Well, when you apply for an insurance policy your application is looked over

by the underwriter. That underwriter's opinion is going to determine how much

you pay. For example, if you were applying for life insurance, the condition of

your health would be taken into account. If you are applying for auto insurance,

maybe your age, your experience as a driver. Maybe what could be taken into

account could be your driving history. Have you had an accident in the past,

were you at fault, how many accidents did you have? So, the underwriter looks at

these things and that then determines what your classification is going to be.

It could even be simply as something as little as you made a mistake on your

application, and that could put you in a different class in terms of a premium.

So, you say to yourself: well, I will go and apply for insurance at company

X, and they come back and say: no, we consider you too big a risk; we are not

going to give you insurance. So you say to yourself, I guess that is no big

deal. I can go down to the next insurance company and apply for insurance, and

hopefully I will get insurance there. I think a word of caution here. In this

day and age in which we live, everything is digital. We talk in terms of

databases today, and what company X knows probably company Y knows, and because

it is all connected, there is a digital memory of the applications that have

been made. So you go down and the first thing they say is: well, you already

applied to our competitor and they turned you down, so we are not going to

accept you either. So, there is something to be careful of there. These things

are very important.

Each insurance company has its own set of underwriting guidelines to help the

underwriter determine whether or not the company should accept the risk. The

information used to evaluate the risk of an applicant for insurance is going to

depend on the coverage involved.

Now, the factors - and this is where we get into this piece of legislation, I

think the meat of it is here. The factors that insurers use to classify risk,

they should be objective, they should be clearly related to the likely cost of

providing coverage, they should be practical to administer, they should be

consistent with applicable law, and they should be designed to protect the

long-term viability of the insurance program.

The Minister of Government Services, when he opened up debate on this piece

of legislation back on Tuesday, the Government House Leader and the Leader of

the NDP both had questions about the regulations that might follow from this

piece of legislation. The minister - and I guess if they checked Hansard they

would see this outlined, I thought was very clearly, about some of the things

that he had as a concern. One of the things that insurance companies have taken

the liberty to consider right now when they decide how much of a premium someone

should pay for insurance, one of the things that they have taken the liberty to

consider is a person's credit score. What is their credit history? Somehow they

have come to the conclusion that if you are somebody who has a poor credit

score, maybe you have gone bankrupt, maybe through no fault of your own - and

this happens folks, this happens out in the real world everyday. Good people go

bankrupt. Good, honest people go bankrupt.

We have seen marriages break up, where if two people were together, and

together they could care for the financial burden and the debt that they have

assumed but when they separate this burden becomes too much for one person to

bear because there are additional costs and they see that they cannot manage

this any more. What happens is that some of these people end up filing for

bankruptcy. Now, that does not mean that the people are dishonest. It does not

mean that they are at a greater risk. Maybe there is a family emergency, maybe

there is a big health problem in the family, maybe one of your children, maybe

one of the children out there somewhere in Newfoundland and Labrador, the family

comes down with a big financial burden. So they have to decide. Every cent of

money that they have goes into trying to care for the health and wellbeing of

that child. So the person ends up filing for bankruptcy. Things fall in around

them. What happens a little while later? They go to an insurance company, they

are filing for insurance, and the insurance company says: Look, you filed for

bankruptcy; you are at a bigger risk for making a claim. Therefore, instead of

$600 for your house insurance I do not know, it could be $900, it could be

$1,000.

The thing is that we see evidence of people doing this, and I am not saying

that every insurance company is doing it, but we see evidence of people doing

it, insurance companies doing it, and the current legislation does not prohibit

it. So our Minister of Government Services has brought in this piece of

legislation. Why? We want to protect the citizens of Newfoundland and Labrador

from unfair practices. We want to make sure that all people in Newfoundland and

Labrador have a fair opportunity and somebody saying to you that you are going

to pay a lot more for your home insurance or your car insurance or whatever just

because you have a poor credit history, we think that is wrong. We think that is

wrong, Mr. Speaker, and when this piece of legislation comes in and the

regulations that follow, we certainly hope and the plan is that that practice

will no longer be legal. It will be prohibited.

We have done a lot of things in terms of insurance in the Province. Just last

year or the year before memory fails me, if it was last year or the year

before we eliminated the tax on insurance. That was a 20 per cent reduction in

insurance across the Province. As a government, I want to reiterate, I have

heard the minister say and I could pat the minister on the back for this. I

have heard the minister say that we are not adverse to any company or any

business making an honest living and showing a good profit. Do you know why? We

need that in Newfoundland and Labrador. We need a climate and an atmosphere

where people in this Province are able to run a good and a profitable and a

sound business. We need that and we encourage it, but at the same time we do not

want to see people unfairly done by.

I could share a story of somebody I know, a friend of mine, who filed for

bankruptcy a while back and that person is a very honest person. That person

would never do anything that was dishonest, or at least I have never seen him do

it. Do you mean to tell me that when that person goes to apply for home

insurance he should pay more than me? No, I do not think there is anybody in

this House that agrees with that.

Mr. Speaker, Ontario and Alberta, they already prohibit the use of credit

scoring for automobile insurance. New Brunswick has announced their intention to

prohibit the use of credit scoring in the underwriting and the rating of

homeowner insurance. When this bill is passed the practice of having people pay

more for insurance in this Province just because of a low credit score that will

be prohibited.

It is a good bill, Mr. Speaker, it brings a higher level of fairness to the

industry. It is good for our people and I look forward to the passage of this

very important piece of legislation.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for The Straits &White Bay North.

MR. DEAN: Thank you, Mr. Speaker.

I, too, consider it a privilege this afternoon to be able to stand for a few

moments and speak to Bill 16 and the amendments that are being proposed in this

piece of legislation.

It has been mentioned by colleagues of the House already that insurance is

very necessary. All of us who owns property, as everyone practically do, it is

important that we have protection. It is important that we understand the

protection that is offered through the different insurance agencies and

companies and so on. Obviously, it is important that it is affordable to the

people. In this day, especially low-income families and those who may not have

incomes that others might have it, it is important that they can get affordable

insurance for their properties. So, broadening the areas of concerns regarding

insurance, bringing it more in line with perhaps the auto insurance act and so

on, then I see today as being a good thing.

The protection of renewal rights is one piece of this legislation. It is very

important that when the time comes for renewals that some of the circumstances

that clients have gone through in that past twelve-month period do not

negatively impact the ability for them to renew their policy. We all know of the

many things that can happen in terms of seasonal employments of people and at

times waiting for EIs to begin in the fall of the year and this kind of thing

and people losing jobs and many other things that affect our people from day to

day. Those things can all affect the ability of the client to pay on their

insurance policies at different times. So it is important that if they have gone

through that short period of delinquency, or whatever the case might be, that

they are not punished for that, so to speak, in terms of their renewal of their

particular insurance.

The addition of this new piece of legislation, in particular

section 95.2,

where it says: An insurer shall not decline to issue, refuse to renew or

terminate a contract or refuse to provide or continue coverage or an endorsement

in respect of a contract on a ground prescribed in the regulations. As the

minister mentioned some of the regulations in his speech just a day or so ago

that many of the areas that are covered are crucial to this particular piece of

importance for our clients.

It is worth noting that the only regulations that currently exist under the

Insurance Companies Act are the automobile insurance prohibited underwriting

regulations. Certainly, new regulations would be needed to set out prohibited

grounds referred to in this proposed section. It is good to see the minister

bringing this forward in this sitting of our House of Assembly.

The proposed amendments, ultimately, they are targeted at consumer

protection. In this day and age when consumers are challenged, I guess, from

many different avenues it is good to see I am not suggesting that insurance

companies are necessarily doing anything wrong, but it is good to see that we

are protecting our consumers as much as possible, that we are putting

regulations in place that insure that any potential loopholes that are in our

system are being looked after and so on. Really, what it is doing, it is

limiting the grounds on which insurance companies may refuse it if they so deem

necessary, or they may refuse to insure someone for something other than what we

consider to be legitimate reasons.

Some of the reasons of refusal that have been noted, things like age, or sex,

or marital status, things like past accidents or claims as a result of an

accident for which the person has not been at fault and so on. Whether it is

things like a person that has missed payments, as I mentioned, where the amounts

due were subsequently paid within a reasonable period of time, really not

putting the insurance company at risk, and really not jeopardising the

legitimacy of the policy and so on, past declines for refusal of insurance and

there have been times when someone has been refused that renewal policy, then it

is good to see that does not come against them.

One of the nicest things that I see in here, as was just mentioned by our

colleague, was the use of the credit score system to determine a person's

eligibility for insurance or to determine the rate classification that

particular individual would fall in. While the credit score is obviously a good

system and used in lending institutions and other institutions in particular,

certainly, I do not see either the need or where it would be necessary for a

particular person applying for insurance to have to go through a credit

evaluation to determine whether they are eligible and to determine the rate at

which they should pay. That purpose - I believe credit scores are for a

different purpose. It is for determining a person's credibility, it is for

determining the ability of a client to purchase a new home or to purchase an

automobile or to purchase some recreation vehicle, or whatever the case might

be, but I do not believe that it should be used to determine whether that person

can have insurance, number one, and number two, the amount that policy should be

in.

So, for it to influence rates of policy, for it to influence the premiums,

then I consider that to be an unfair practice. So I am pleased to see that it is

included in this piece of legislation, and I am pleased to see that the minister

has recognized that and that it will be a part of this amendment. Not having any

other insurance company policies with the insurance company is something that

people at times run into. Well, if you have your automobile policy with someone

else, so the fact that you do not have your automobile policy with me means that

I am not able to provide with your house insurance policy. Well, that is an

unfair practice in my opinion. Those are the kind of things that I believe that

this legislation hopefully will target against, and will protect the consumer

from and will better make the whole insurance industry a much more consumer

friendly industry, if you will, and one that protects the consumers in those

situations.

Our position, as an Opposition, Mr. Speaker, is very clear with this piece of

legislation. We certainly see it as a positive piece of legislation. It further

protects individuals seeking insurances, and it protects their ability to obtain

insurance, and the fact that it protects them from not being denied that renewal

or that new policy or that extension, or whatever the case might be, that they

are not denied on unreasonable grounds. So we see it as something that ensures

fairness, it ensures consistency in the process. We will not find one thing from

one company to another or from one town to another or from one particular part

of the Province to another, and so on. It will ensure consistency, that we can

expect the same thing from one insurance company to another when it comes to

dealing with applicants for insurance policies.

Not only that, it also expands on their protections as well because if we are

controlling the ability of the insurance companies to charge premiums based on

things like someone's credit score, then we are controlling the premiums

themselves. How I would see that, is that it will allow the consumer to get a

higher level of insurance for a lower premium simply because something in their

past that has come against them from a credit score point of view is not allowed

to be taken into consideration when their policy is being evaluated, when their

application is being evaluated for approval and so on. So I see that as a good

thing and it expands consumer protection towards their property and towards

casualty insurance and so on.

So for me this afternoon, Mr. Speaker, Bill 16, the amendment is a good

amendment and I am glad this afternoon to be able to stand just for a few

moments and to share my thoughts on it. I see it as something that certainly I

would want to support when the minister brings it forward for legislation.

Thank you, Mr. Speaker.

MR. SPEAKER: If the hon. the Minister of Government Services speaks now

he will close debate.

The hon. the Minister of Government Services.

MR. O'BRIEN: Yes, Mr. Speaker, it is certainly a pleasure to get up in

this House and close debate at second reading in regard to Bill 16,

An Act

Respecting The Insurance Companies Act, an amendment thereof.

I listened intently to all of the comments by the hon. members, the hon.

Member for Cape St. Francis, the hon. Member for Lewisporte and also the hon.

members across the House in regard to their comments on this act and the

amendment. I know they are at least I felt that they are in support. They can

see the merits in regard to this amendment in what it does to protect the

consumer from practices that might be carried out by insurance companies that

would set rates higher than the norm in regard to whatever type of a house that

they may have or a residence, cottage, or whatever it may be.

Certainly, I heard some questions in regard to why we need this amendment at

this time and what it might play out in regard to the regulations themselves

that come after we get this amendment. To be clearer to the hon. members in the

House and clearer to the people who are watching the proceedings here in the

House of Assembly, the only thing that I am asking for here today is an

amendment that gives the right to regulate homeowners insurance. We already have

the right to regulate auto insurance in this Province which happened in the

spring session of 2004, shortly after we took government. We took that right -

we regulated the auto industry and we certainly see a decrease in regard to the

premiums being paid by the people of Newfoundland and Labrador by approximately

a little over 20 per cent. They have been remaining steady at that decrease now

since 2004. It is a huge benefit to the people of Newfoundland and Labrador and

the consumers of auto insurance.

This amendment will give the department and me, as the minister responsible,

the right to bring in regulations that will govern the issuing of homeowners

insurance and the rates which are set to that particular type of insurance.

One of the hon. members across the House wanted to know what precipitated

that, and he is right. Sometimes we get complaints. Things are brought to our

attention in regard to either piece of legislation that we hold in Government

Services that would generate a review of that piece of legislation to address

the issue at hand. The issue has to be prominent in the marketplace before I

would go and regulate. It would not be just a one instance or whatever. It would

have to have merit before I would go and review that piece of legislation and

then bring in amendments thereof and then regulations after the amendment to the

piece of legislation. This piece I felt was absolutely needed in regard to

protecting the consumers and the people of Newfoundland and Labrador. I see one

instance alone in regard to regulations that we will certainly bring in, and

that is the use of credit scoring in determining rate and premium of insurance.

We will be definitely bringing that in shortly after this piece of legislation

is amended and gazetted and then becomes law in Newfoundland and Labrador.

I do not agree in regard to using credit scores to determine a rate of a

person. As I said in this hon. House earlier this week, I could not see the

correlation between a credit score and you having a claim. I could not see a

person who owns a $250,000 house here and the other person has a $250,000 house

down the street, each one of them paying a different rate for the same value of

the house, I could not see that. Just because they had a poor credit score, one

person did and the other person did not, I just could not see it. I could not

see that correlation. I think that is an injustice. As the hon. Member for Cape

St. Francis referenced, it flies in the face of our Poverty Reduction Strategy,

which is one of the best strategies being hailed all across this nation, all

across North America and probably the world as being one of the best ever tabled

and followed in regard to any government in the free world. It has certainly

shown great results.

Also, one of the foundations of this government is to protect those who are

most vulnerable. Again, this particular piece addresses this issue because

sometimes the person may have an absolutely great credit score all of their

adult lives and then run into a problem that they did not foresee, something

that they did not plan and something that they probably, nine chances out of

ten, certainly did not want. Anyway, just because of that, and in regard to the

break up of a marriage or whatever it may be, that they had a credit score that

is much less than what they had all of their life. Then, after that - that is

one thing in regard to that, and that is a trauma in itself to the particular

person at hand, but then to also have the trauma of going in to renew their

insurance the next year and find that the rate has gone from like $600 up to

$1,300. Well, then I have a problem with that. I absolutely have a problem with

that, and I cannot see the relationship between a credit score and an actual

claim. I just cannot see it. I have not seen the data, and I have asked for the

data. It is great for the insurance companies to produce the data, but I want to

see that data from a third party before I will ever be able to relate it to

being a claim.

That actually addresses the risk classification system that the hon. member

referenced in some of the questions he asked. That is the one we are looking at

there in regard to that risk classification system, is the use of credit scores

in determining a premium and a rate that a consumer would buy.

Other things that we are looking at and we are only looking at it. I also

said in this House, I believe it was Tuesday - I think it was on Tuesday when I

spoke in second reading on this particular bill and this particular amendment -

that I want, we want, the department wants, my division wants to work with the

insurance industry itself. As well, we want to work with the Brokers Association

of Newfoundland and Labrador. I met with them. I spoke to them only a couple of

weeks ago. They are a great industry. They are very, very professional and they

want to address these issues as well.

If they can address the issues - but they cannot address credit scores, they

cannot do that. That is a directive of the insurance company itself, which most

of the insurance companies, except two, are outside of Newfoundland and

Labrador, based out of Toronto, based out of Montreal and based out of places

like that. We only have two registered insurance companies in Newfoundland and

Labrador that are registered in this Province that are home to this Province. So

they cannot address that in regard to the Brokers Association because they can

only follow the rules of the insurance company that they are underwriting for,

so that is one that they cannot. Some of the things that they can address, I

guess, and we will work it through, but I want to be clear in this House that I

will regulate if I have to. I will regulate if the industry does not correct

itself in regard to protecting the consumer. I will regulate if I see denying

insurance for no reason, that no reason given would be contrary to what we are

trying to do in this Province. We all understa