VOL. Z PRELIMINARY UNEVITEV TRANSCRIPT HOUSE OF ASSEMBLY FOR THE PERIOV: 10 : 00 a:m. - 1:00 p.m. TUESVAY, JUNE 14 , 19 77 NO.1 ZZ

June 14, 1977 Tape no. 4219 Page 1 - ms The House met at 10:00 A.M. Mr. Speaker in the Chair. MR.. SPEAKER: Order, please! STATEMENTS BY MINISTERS: MR. SPEAKER: The hon. Minister of Mines and Energy. }ffi. PECKFORD: Mr. Speaker, I would like to indicate without having a written statement before me that the Department of Yines and Energy h~s decided that we will put a date of July 11 on receiving written submissinns as it relates to the white pa~er on oil and gas regulations.

The July 11 date is not what one would classify as a firm and hard and fast date !f it can be demonstrated by organizations or companies or individuals that additional time is going to be needed to get their comments and views together. In talking to a number of organizations and companies and individuals most have indicated that they would be able to respond in a meaningful way bv the end of June. And it was with that in mind that we put the date of July 11 as the date for receiving submissions relative to the white paper. MR. SPEAKER: The hon. member for Eagle River. MR.

STRACHAN: I think the date of July 11 is a reasonable date. In fact probably most of the companies and corporations involved would have their work done on the white paper. Certainly I would imAgine they are in a prettv good state now since most of. the information in the white paper is facts and figures which thev are fairly familiar with anyway and concepts they are familiar with. So I would imagine that bv July anvway most definitely we think that they will get most of these thines in. I also feel that there is a question in that one cannot delay bevond a certain period of time.

I think most of these companies and corporations know the concepts, know the i<ieas. !t is only a matter of getting a position paper together and presentine it. So I feel that certainly July would be an excellent time and certainly not too late. 1.1998 :e '· ~ 1-

June 14, 1977 Tape no. 4219 Page 2 NOTICES OF MOTION: MR. SPEAKER: The han. Minister of Municipal Affairs and Housing. MR.DINN: Mr. Speaker, I give notice that I will on tomorrow ask leave to introduce a bill, "An Act To Amend The Department Of Municipal Affairs and Housing Act," and 11An Act To Amend The Local Government Act." MR. SPEAKER: The han. Minister of Finance. MR. DOODY: I give notice, Mr. Speaker, that I will on tomorrow ask leave to introduce a bill, "An Act To Amend The Liquor Control Act, 1973." These are regulations of the Liquor Commission. ANSWERS TO QUESTIONS: }fR. SPEAKER: The han.

Minister of Mines and Energy. MR. PECKFORD: In response to a verbal question asked me some time last week as it related to the present status of the generators at the Upper Churchill site, the generating units and what we were doing.about it, the problem at the site is not relegated to any one manufacturer or to any particular plant. It is an industry problem and has shown up on the Canadian General Electric units at Churchill Falls at an early stage, but it has also shown up on others.

Canadian General Electric is one partner in a consortium known\ as Churchill Falls Machinery Consortium and CFLCo deals from a legal point of view with this consortium. The number one unit failed on December 25, 1975, and we have been trying to make repairs on that unit. Number seven unit failed on August 15, 1976 in a similar manner as number one unit. By mid 1976 the seriousness of the problem was totally recognized and the plan for repair of the damaged units and rehabilitation of the other units was finalized.

The CGE units are numbers, 1, 3, 5, 7 and 9 and the current situation is; unit one, rewind complete, scheduled· in service June 1977; unit three, disassembly scheduled for July 1, 1977, back in service November 1977; unit five, shutdown for rewind May 1977, scheduled in service September 1977; unit seven, rewind ninety per cent complete, scheduled in service July 1977; unit nine, scheduled for April 1978 temporary repairs early in 1977. 1.1999

June 14, 1977 Tape no. 4219 Page 3 - ms MR. PECKFORD: Marine Industries Limited units are numbers 2, 4, 6, 8, 10 arid 11. Apparently the generator winding problems have not been as severe as with the CGE units. However,at this time we cannot ignore possible occurrences on these units as well.

A ?rogramme of rewedging has been undertaken on the following as a status ; unit two, partial rewedge early 1975, presently satisfactory; unit four, presently satisfactory; unit six, scheduled for complete rewedging July 1977; unit eight, presently satisfactory; unit ten, presently satisfactory; unit eleven, presently satisfactory. There have been a fair amount of penalties involved in relation to our contract with Hydro Quebec. Up until May 31, 1977 capacity deficiency penalties in the amount of $4,988,170 have been paid to Hydro Quebec.

For the most part this can be attributed to the generator problem even though over the period other maintenance on the units required outages. These miscellaneous outages would normally have been handled without penalty if the generator problem did not exist. An arrangement has been worked out with Hydro Quebec to accelerate the rehabilitation of the generators this Summer without incurring capacity deficiency penalties for this problem. Advantage has been taken of this to make additional units available during this time. There may still be a risk of penalties , however.

The legal position - the writ was issued in April 1977 in Superior Court in Montreal against CFMC alleging that as a result of the cirumstances involved in the repair to the units CFLCo had suffered damages in the amount of around $6 million. These amounts were as of March 1977 and will be adjusted as a result of subsequent penalties, damages and repair costs. In effect,the writ protects the company's position with regard to prescription whereby the company might lose its rights to recover from the consortium.

Legal counsel for CFLCo, CFMC and Acres Canadian Bechtel, engineers and project managers and interested parties have agreed to suspend the legal process for purposes of starting negotiations to settle the matter. That is the current status as it relates to the problem at the Upper Churchill site. 1.2DOO

June 14, 1977 Tape no. 4219 Page 4 - ms ORAL QUESTIONS: MR. SPEAKER: The hon. Leader of the Opposition. MR. ROBERTS: Mr. Speaker, a question, I guess, to the Minister of Justice in his capacity as the senior minister in the House AN HON. MEMBER: Rear, hear! MR. MORG.A..'i: (Inaudible) . MR.

ROBERTS: - and also I am sure it is of interest to him I would say for the benefit of the }linister of Transportation and Communications, I realize that the Minister of Justice may not be the most important minister in the House given the fact that the ~~nister of Transportation is here, but the Minister of Justice, Sir, is the senior minister present in the House and I am sure the question will also be of interest to him in his capacity as 12001

June 14, 1977 Tape 4220 EC - 1 :8.. ROBERTS: the ;nember for Grand Bank district (:!r. Hickman). •mat I want to know, Sir, is what action the govern.'!lent are taking to cushion or to avert the - SO~ HO~T. MEMBERS: tffi.. RO!lERTS: Oh, oh! :1r. Speaker, there is a rull'ble going on over to 7our ~onour's immediate left and that is a .geographic description, not necessarily a political one, Sir. But :ny question is for the :rinister of Justice, I ''ould like to know '"hat action the governl:lent are taking to cushion or to avert the decision which ~~can have taken to suspend oper­ ations at the mine in St.

Lawrence. ~!R. SPEAKER: c::R. :UCIC!A..'i: The hon. ~!inister of Justice. ~r. Speaker, "JI'f anslver to that question has to be very, very careful at this time. On Friday past t"o senior officials from Alcan visited St. John's and indicated for the first time to the Premier, to the han. the Hinister of l·fi.nes and Energy and myself an outline of internal studies that they have been carrying on ••ithin tQe company to ascertain the future viability or othenvise of the mining operations at St.

Lawrence. !;le salv this for the first time and agreed that before there could be any comment there >>auld have to be very intensive study by the appropriate technical officials in the Department of ~·cines and Energy~ and I ••auld assume also by the Government of Canada, this week. And it was decided there that it would not be appropriate to make a statement indicating the nature of the L"lternal studies >vhich have been going on for several months to the knowledge of everyone in this Province or at least those Hha are interested and particularly those from St. Lawrence. [~. RO:lERTS: A supplementary, ]!r.

Speaker. :-:R. SPEA...l{ER: The han. member. :CR. ROBERTS: Can the minister tell us Hhen we may expect some definitive answer? And I ask that because, as he pointed out,it has been ••ell known, indeed there have been questions in the C<.:ouse, it has been He1.1 knmm that, you !--now, the future of St. Lawrence <,ras under question~ as it c;ere,and then given the visit of these officials here las': week and 1.2t02

June 14, 1977 Tape 4220 EC - 2 ~~. ROBERTS: the vert uncommunicative communique issued ':>y the 'finister of ~fines and Energy, I think everybody in St. Lawrence now feels that the axe has fallen. But be that as it may, can the government tell us, can the minister tell us ;,;hen ~re may expect a definitive answer? :Because everybody in St. La1-1rence novi is living under the s'••ord of Darnocles 1-1aiting for it to ' fall at any time. ~·::It. SPEA..'GR: The han. minister. C.(r. Speaker, I am notitl a position, nor is government, to give an indication as to when. 1::R. ROBERTS: A further supplementary, ?·[r.

Speaker. ~1R. SPEA..'<ER: A further supplementary. ''R . ROBERTS: I see the Premier is here now. I 1.rould have addressed the '1Uestions to the Prel'lier if he had been here when the House met, but since he '·las not I Kill continue with the minister. Can he tell us whet!ler the .;,.lean companies have asked for any assistance,financial or otherwise,from the government? If so, what? And if so, what response? HR. SPEAKER: The han. minister. :·!R. HICK!(ft.N: Hr. Speaker, I am not in a position to comment on that at this time. ~::R. SPEA..l\ER: The hon. member for Terra ~-ova. ~!R.

ROBERTS: What a help for people! ~!R . LUSH: A question to the :·!inister of Hines and r:nergy~ I wonder if the minister is in a position to inform the House today just what is the status 1·1ith respect to legislation that 1.rill hring Hydro under the Public Utilities Board, ,..hether it is ready today and just ~.;hat the essence of the legislation •..;ill be? ~'R. SPEAKER: The han. l!inister of }!ines and Energy. MR. PECKFO'!ID: The bill will be circulated momentarily. r!R. SP!':AKER: The han. member for Eagle :?.iver. ·~R. STRACHA..\1: A question for the ~'!inister of Transportation.

It is our understanding t hat 01 ~ ·rarine have prepared recommendations to 12(03

June 14, 1977 Tape 4220 EC - 3 }!R. STHACHk1': the federal Department of Transportation concerning the freight and the claims on freight on '.loard the \Hlliam Carson. I wonder whether the minister can indicate whether his department has commu.."licated with the federal Department of Tra."lsportation or '~ith CT ~~rine and has any information whatsoever on their status and 1vhat recom- mendations they have made? '~. SPEA..:ZER: The ~inister of Transportation and Co=unications. :-!B.. 110 RGA:'{ : ~!r. Speaker, yes, we did T"'ake represen- tations in fact last week to }~.

Tingley, the senior official of C~ ~~rine and also to the ltinistry of Transport, the hon. Otto Lang, ~nd the representations made •..rere along the lines ,ye 1vould like to have the CN ~ke a decision in co-ordination with the ~inistry of ~ranspcr~ as soon as possible with regards to honouring the claims made by the people, either the shippers or the consignee in the Labrador part of the Province. 'and the claims to the insurance companies. If the goods are shipped f.o.b. St. John's as earlier mentioned the shippers are responsible and if they are shipped f.o.b.

Goose Bay it would mean that the carrier and the people in Goose Bay are responsible. The CN ~'arine,I unde!:"stand no"'' has given all details to the rtinistry of Transport and hopefully they can get a decision made as soon as possible and that was some of the representations we made along these lines, to get a decision made as soon as possible to indicate to the people in Labrador in particular what the situation is regarding their clai~E for insurance. A supplementary, '·'r. Speaker.

A supplementary. l'R. 5TPAC't~i: I underst.'!nd that the C~< !!arir.:= have made the recommendations and I am just wondering whether the minister has !:een in touch ·~ ith them or could he get in touch with them as soon as possibl: and find out what these recommendations are concerning the freight, because,as I say, every day is important to some of the busi- nesses which are facing imrr~diate bankruptcy. 12C04

Ju.l1.e 14, 1977 Tape 4220 EC - 4 :·m.. SPEl1..'<ER.: The hon. minister. ~!R. ~\ORGAN: Nr. Speaker, I do not think it would be of any benefit to anyone at this "time to make public the reco=endations that Ql Harine has put forward until the 11inistry of Transport in co-ordination Tvith c:r ~·!arine has made a decision. I do not think making these recot!II!Iendations public at this time ,;auld be of any benefit to anyone. Eowever, again I repeat that we will be pressing nttaua and hoping, in fact, that Hr.

Lang will be in ::ontact otith us en other matters today by telephone and ue will be discussing 'dth him then also the situation regarding Cl l!arine and the claims for insurance coverage on the lost freight. A final supplementary. ~'R. SPEAKER: A supplementary. Is the minister then indicating that he is aware of the CN ~!arine 1 s recomendations, but in fact, in essence :,e does not wish to make them public until the federal department have made them public? My main concern is that the minister is on top of it and he knows that the recommendations have been made and what these recom- mendations are. c1R.

SPEAKER: The hon. member for Stephenville. ~·<:R. ~kNElL: A question to the Minister of !!unicipal Affairs and 'lousing. Could the minister tell the House '"'hat is the present status of negotiations regarding the construction of seventy to one hundred housing units at the Atlantic Design Homes Plant? The hen. Yinister of c1unicipal Affairs and ~ousing. :'P .. DI~<: Hr. Speaker, '"e have sent the request to 0tta,;a that ''e have approved here in the Province.

The Province has approved the plan to build seventy homes and additional if required, and C~!!l:C - the local office here - have held negotiations with us a.TJ.d nou it is sone to Otta'm and ue are ,.,aiting for a reply fro~. ntta•·Ya rip;ht nm;. ::r_. ~-'c~TEIL: A supplementary, "r. Speaker. 1ZG05 ~ ''· 1-

June 14, 1977 P:C - 5 "Jt. SPC.,\KER: A supplementary. VR. ~~cNEIL: 1/hen do you expect to receive a reply back from Ottawa? ••auld it be. in the col!!ing week? 'les, ~~r. Speaker, I would have expected to ;,ave received ;;. reply by nat;, and it =Y be <!mvnstairs. I an el'..-pecting it at any :O.our. _-\nd ,,,hen it is, of course, the appropriate anncunce~ent \vill "!Je ;,:acle. :r:. SPE_\~CER: TI1e han. me~ber for Lewisporte. : ~r.

Speaker, I have a q ues ::ion for the '~inister of Justice, a::J.cl it is relat:ive to the contro l s t:1at have been carried out by the ~-c:;p in connection •..rith inpaired drivers. I :10nder if t~e -;:ninister could tell us \-;hetD.er or ~ot there has :.een au.y easiP.g off on the road:Jlocks in connection ·.,;it:1 breat~alizers? ,\!lc'. I :.render if t~e minister could tell us in vicT.v of the fact that in Grand ~c.lls a couple of ni;:;hts ago there •.vere :1inety cars stopped and not a single one of the drivers w-as charged, you k"1ow, "'here the fine lir;e corr:es Jetween harassment and safety patrols? :!R.

SPEAKER: :m. arc:_c~_:i!: The han. minister of Justice. The procedures, ~:r. Speaker, bei:1g carried out by the ~Cl:P are pursuant to the recent anend:nents to the Criminal Code of Canada. T;;e reports I have been getting from the RCliT', and, you know, I cannot give figures, indicate a ,-ery massive reduction in notor vehicle accidents on the hi;:>;hway and also in ti1e city of St. John's. ALd I am told this and this is certainly heresay, that if you check the Outpati:nts DepartC~ent of any hospital in this Province they will verify a very 12(;06 t-

June 14,1977 Tane 4221 - Morning AH-1 offi. HICK¥AN: delightful reduction in accident cases co~ing in to their departments. The other thing which is also equally encouraging is the very strong public acceptance there has been to this kind of law enforcement on the highway. And anypersons I have met, and from what the RC~ have told me, the word is that they just welcome it. A person whose ability to drive is not impaired as a result of alcohol does not mind being stooped because they know their concern is with the motorist whose ab~lity to drive is impaired.

And if they have to be stopned for a minute or two it is the most effective and most salutary lifesaving n_rocedures in law enforcement that I know of on the highway. 'fR. SPBAKER: "!R. WHITE : A supnlementary. Mr. Speaker, the minister should tell that to a few peonle who have called me in the past couple of days. My sunplementary deals with the aircraft patrol that is also being carried out by the RCMP on the highway. Let me sav, Mr. Sneaker, that it certainly does not bother me.

But I would like for the minister to tell us whether or not this aircraft patrol is ~oing to be extended beyond the Avalon Peninsula during the coming months? MR. HICKMAN: I do not know the answer to that question, ~r. Sneaker. The policy of traffic enforcement on the highway that has been followed with a great deal of success by the RCMP is that they keep almost daily statistics of accident rates and they can tell where enforcement must be increased on a particular

section of the highway and they lvill do that. So I am assuming that if that same philosophy applies to their aircraft surveillance, their helicopter surveillance,that if they see that there is a desirable reduction in motor vehicle accidents and violations of the Highway Traffic Act on the Avalon that they will very quickly move on to some other part of the Province. It is a first-class helicopter, a· very expensive machine and one that ts capable of flying to any part of the ~rovince without 12G07 ,_

June 14,1977 ~fR. HICKMAN: Tane 4221 - Morning AH-2 any difficulty. So I am sure that from that ooint of view there is no orohlem in their going there. MR. SPEAKER: Hon. member for Eagle River. MR. STRACHAN: A question for th~ Minister of Transnortation . again concerning the Carson business. Last week I asked a ouestion concerning the community of Cartwright and I still understa~d from yesterday's discussion with CN that the Ambrose Shea ,~ill not be calling into Cartwright.

Could the minister assure us that he ~11 use the powers such as they are of his department to impress on the CN Marine that the community will be cut off unless the vessel does call in and that the vessel calling ~11 only call in for a couole of hours. It is only two or three hours out of its iourney and there will be no other vessel because the rest of the vessels are filled up. The Petit Frrte and Taverner cannot handle the existing traffic.

So I wonder if the minister could give some assurance to the oeople that they will be using the Powers of his department to Persuade the CN Marine to change their. decision1 !{R. 'I ORGAN : Well, !1r. Speaker, yesterday when the question was asked I indicated then that we would make representation to CN Harine on that matter. CN Marine's olans~by the way1 are not finalized with regards to the operations of that service to Labrador and that is obvious from their statements they have made to date.

I am expecting a statement to be made today by CN ~3rine outlining their procedures, what course they will take this Summer. As a Province we are totally opPosed to taking a service off the Gulf and outting it on to some other part And we want to see the service re-establishedto Labrador as a result of the loss of the William Carson.Rowever,we do not want to see a reduction in the level of service in the Gulf from .~gentia to Nort~ Sydney or from Port aux Basques to North Sydney.

And CN Marine has now officially stated that thev are going to have the Ambrose Shea on service for two weeks to Labrador and after that they will out the Marine Cruiser on for the rest of the Summer which means a loss of a boat into Argentia from North Sydney. And we expect 1.2(;08

June 14,1977 Tape 4221 - Morning AH-3 MR. "!ORGAN: an influx of tourists this year looking at the '77 Surnmer Games. We expect an increase over the movement of passengers across the Gulf over last year and therefore the removal of one boat is going to reduce the level of service. So we have now been in contact with the Minister of Transport, the ~on.

Otto Lang~asking him to give approval immediately to CN Marine to acquire, and when I say•acquire~not necessarily purchase, but lease or some other means of a boat by CN to make sure the level of service across the Gulf is maintained and also the service to Labrador is replaced with regards to the loss of the William ~ MR. ROBERTS: MR. SPEAKER: MR. ROBERTS: A supplementary, Mr. Speaker. A supplementary. What the minister says is very reasonable and makes a great deal of sense. I mean,there is one boat less now to Provide the service and it happens to be I think probably one of the bigger boa~s.

The Carson was not the biggest of the ferries but a large one. The question is this - it is the right thing to ask ~r. Lang in Ottawa to authorize CN Marine to go ahead and acquire by purchase or by charter,as the case may be,an extra boat but has the minister any indication or has he made any efforts to find out whether this is a feasible suggestion? Can these ships be acquired? They are specialized vessels.

Can they be acquired on short notice,particularly in a season which I would have thought was the busy season, just as it is the busy season in Newfoundland, the busy season elsewhere in Europe or elsewhere in the world, '>7herever it may be1 that we are looking for these ships 7 So has the minister any reason to suspect - I do not know one way or another - has he any reason to suspect or if not has he made any efforts to find out whether such a ship might be available any­ where,. because this might be the stumbling block,not a weakness or a reluctance on the part of Ottawa to authorize a replacement for the Carson or another ship for the service.

Ann they could 1.2l09

June 14,1977 Tape 4221- Mornin~ AH-4 r1R. ROBERTS: rejuggle - because they need an icebreaker for the ~orthern run; that is not the problem.The ~roblem is is such a vessel available or are we just building hones falsely? MR. SPEAKER: The hon.minister. MR. XORGA.~: That is a good question, ~r. Sneaker, and I am hoping today- in fact,I have b~en informed that the C~ ~arine will be making an official statement or a press release indicating '"hat the present status is.

Of course,if they cannot find a vessel that is another situation, but if they can find a vessel throufh some means of leasing or other means of getting it on the service,I am honing that CN will nut forward their view on that matter today. But what we have asked ~r. Lang to do is to- along the lines,we are assurning,that the CN people can find a vessel,and that therefore we want the ~inistry of Transoort to approve CN to acauire that vessel. So today rather than me make the statement indicating CN's position, C~ Marine will be making a statement today outlining their official nosition. MR.

ROBERTS: A further supplementary. MR. SPEAKER: A supplementary. MR. ROBERT!': Mr. Speaker, given the assumption,it is a reasonable deduction; ~ut my question still is, is the assumntion a reasonable one?

Now I know the minister is not in the ship brokering business nor is it his resnonsibility to find a vessel, but none the less given the urgent nature and the imPortant nature of the problem and given the fact that the minister is so intimately involved in transportation matters, might he not give some consideration at least to asking one of his officials to get on the phone - I understand there are only three or four ship brokering firms of any size in this type of field - and finding out whether or not a ship is available?

Becau~e that is the heart of the question. :It is all very well to make representations to 11r. Lang to say,"Dear, Otto give CN the authority to charter a new ship or buy one, as the case may be 1to replace the Carson. But the realquestion is is one available? 1.2L10

June 14,1977 Tape 4221 - Horning AH-5 ~. ROBERTS: These ships are not stockpiled. They are very specialized vessels,esoecially designed and custom built in most cases, custom designed and custom built. So would the minister give some consideration to trying to help Ottawa and maybe speed them up ? Time is of the the essence, Sir. XR. SPEAKER: The hon,minister. 11R.MORGA..lll: ~!r.

Speaker, we have done our investigative work and our homework on that matter but rather than the provincial Department of Transportation make a stateJ:Ient on that matter when it is strictly a federal government jurisdiction,we are waiting for the CN ~Iarine to make their release• .~hich I understand will be coming today outlinin~ their position on the matter. And we will refrain from making any comment on what we think should be done until after the CN has made their statement.

But we have done our investigative checks on t~is natter and we are of the ooinion that there should be a boat put back in service immediately. And we are not saying that there is no a boat available. MR. ROBERTS: MR. SPEAKER: MR. MORGAN: M!t. HODDER: But are you saying there is one available? Hon. member for Port au Port. Let CN indicate that today. A question for the Minister of Transportation and Communications.

The Highway Traffic - I believe it was called the Highway Traffic Advisory Board or the Highway Safety Traffic Advisory Board travelled throughout the Province in the Summer of 1975•:tnd I believe they did the 'Jhole Island. I was wondering if that board passed their report in yet to the Department of TransPortation and Communications? '~. MORGAN: Mr. Speaker, the Highway Safety Advisory Board had done considerable IJork over the past year 1.2L1.1.

June 14, 1977 Tape !'o, 4222 - l as an a~visory board to ?-overnMent. They travel ;til over t~. e "rovince. T'ley have llelc heari~:;s if'. practically every

section of the Province, public hearin~s, including Labrador and they now have their report being compiled and ~hey will be in a position to present the report to l'le, in fact this ••eek, hut because of the House of Assembly beinf.! in session, etc., ! Hcnt to sit C.Olm anc' talk ~·'itil them ,,•hen they present the report to me. The board is in the position to :=-ive ~.e the report ri[''lt i'l~·':otY and I ··•i.ll "e in a position to accept the report at the early part of next •··eek. ~~ 1{0\IDS".: A sunnler:entary, }'r. Speaker. ',.,., SPE!-S":P: A supplenentary. ' !'P.

H~"'Tlf'ET'I: T.Till the report be !!!ac'e public? ~r:' SPE.:\ITP.: ihe hen. l'inister of Transportation anc C:o!"!T'unications. ~r:n ~·orcf)T: I t·rill tnke that under ndvisement. "" SPE .. A,1{."2D: Tl1e 'bon. mell'.her for ierra ::ova, followe~ bv the hon. mer:her for Lewisporte. '11.. Ll'SP: ~'r. Speaker, a question for the "inister of !education.

The tee.chers of tl-tis Province have been t<lithout the services of a !'lOst important position - or a most important person for a year no•• and possibly !"Ore, anc that is, nal!'eJ.y, a reading cor..sultant ~and I cronder ''hether the TTJinister can inform the l'louse whether that position has heen ~ille~ yet? ::he han. ~'inister of Sducation. HOFST-:: '~r. Speaker, tl-:.e t:>osition has not been filled. It has been advertised perioc'ically for the last year and a half.

The main problem is the fact that '.·re are not ?,etting the nul!'l:er of aual ifiecl . people who could do the joh, l"CSt c f '~hem nre tmrkinp: u:!th sc1--.ool boarc:ls and t·muld prefer to work with school boards. }'J'. LUSH: A suppJ.e~entary, ~!r. ~peaker. :~. SPE:'.KER: A supplementary. In view of the poor results that our students obtained last year in t~e Cnnadian test of 'b<~sic skills, 1 am '•'Once ring 12012 .!:

June 14, 1977 Tape llo. 4222 '"' LTTSH: Hhat urgency the rinister attaches to this particular position? PP. SPEAKER: ~-· f!C'USE: The hon. ~':inister of :":ducation. ~·r. Speaker, the results of the basic skills test did not sho~r tn.e that there ~~as any real problem at the cieparttlental level.

As a !l'.atter of fact.,that showed me that we •,rere improving our reading and this was, I think, the result of the fact these people are at the district level, the consultants are at t:,.e district level, anc1 rost of the consultants that l·!e CJ.ave in the Province, seven or eight of them, are on a curriculum cornnittee on reading and that is hea~ed up by the Assistant Director of r:urriculum.

So while we rio put an urgency on it we cl.o 'lot think that the reading instruction in the Province is uncl.ulv sufferinp-. :""' SPE.\KEP.: The hon. member for Eagle !'iver. ~., STP},CHftll: The }'inister of Tourism is not here. I <•!ant to direct a question to the !'inis ter of fisheries concerning the ~ox Farbour plant and concerning the recent announcement of spending- so~r.e money on the Labra~.or Coast. Number one, coulc he tell us lvhat the situation is with the Fox Harhour plant?

I unoerstand he maoe representation to the company concerned indicating to them that they had to virtually get a move on and develop it in a proper manner. Secondly, could he indic~te the situation regarding the funding of some of the fish nlants and so on on the South roast theTe 1-1hich he indicatec1 and may have revielved. Could he indicate any change in that? :'T' .• SP"'.!-1CE1'.: ':11e hon. 1:inj_ster of Fisheries. c'!l. cl. CAPTEr : ~·r. Speaker., we ha.ve !'lade representation to the cornpanieR.

He have got the lease on the Fox ~arbour facility. l~e have told the companv that l?e are not at all pleased "'ith their performance and unless they can show us an improvement, that ~~e ••ill endeavour to cancel the lease, but certainly ue <Vill refuse to renew it. 'lith respect to the other facilities, ~Ve e.re having a secon~ look ?t some of the proposed locations for faci]ities. 12L13

June 14, 1977 Tape !lo. 4222 - 3 YP. • H • C.'\Jl.TZ P : At one point ..re talked about l'ary's :1arbour . On the advice,I should say,of certain people in Labrador and certain committees,v7e are now looking at Hilliams Harbour and other places in the area of Labrador South. But certainly the money that is bein!! allocated will be spent thereJ and tve 1'1!11 certainly ensure that it is properly spent and spent in the rig"ht places. •rp. ST"ACF:.",!,T: ~7.. SPEAT·':ER: ~'E.. STRACH.A~: nuestion Period. Ts there time left in the nuestion Period? Yes.

There is still time left in the A question for the ~!~_nister of Transportation and Comr:mnications concerning his statements - ~•e are bac!-: on the Carson business and roads. The minister travelled over the ?reecom Poac, of weeks ago YP .• }'"!'Gk\1: over the road. ~. ST:lAC!T.A.\1: 1.f!' .. ROBEP~S : You drove - ~'P .• 'f()PGAN: ~11'. STPACHAN: H'? .• T?QBE"RTS: or I should say fleH over the Freedom Road a couole ~:o, no! ~To, no! The t-1hole road? - of it? I drove You did not drive the whole road. rcxcept for ten miles, that is all. Well, regardless. It is the hippity-hopping around. :-~ ..

STP fJ~HA~:: '·lell, regardless of it an;n.•ay the point that I an trying to ~~ke is that there is a great deal of ~ashout in the road and so on nnd the road rteeds a considerable sum of money. :!R. !!ODDER: :rn.. ROBERTS: i:R. STTIACHAN: Did the helicooter lift his car over the tmter? He walked on the '.Vater. He stated that one of the reasons wby they did not tvant to go aheacl •,rith cloing anything on the road t<as because there --,~s '10 ferrv link to tre Jslanc:' • ::.rmr that the ferry link is in there h'ith the ''!'trine C'ntsier takin?; over h·ol". the Stea, the ferry J ink 1.2L14

June 14, 1977 7ape ::o. 4222 ~:?' - 4 '"' ST?Af'lli2!: is there, could the minister indicate ,.,hether he is going to spend actual collars on the road so that the people from Churchill Falls and so on can drive dmm and get aboard a ferry and come on to the Island part? l·".'. SPEAKEP.: The hen. ~inister of Transportation and Communications. ~IT' ~ 'ORGk'i : Hell, ~·r. Speaker, first of all I did not fly over the road.

The fact that some of the press reports in Lahrador are saying th<>.t ~<'e flew the roac1, •1e cic'. not. :?e only flec·T over the parts t~at '"e could not get o'•er 'Jy vehicle, ~-;hich '-'<'.S apprcxi1'1ately less than ten niles. And the rest we drove ~y four ~-rr.eel drive all the ,.,ay to ":sker anc! l;)ac!~ tc C1'urchill ralls, 460 J".iles of rougt- . roac'l, driven l:ly my colleague, the member for :raskaupi (vr. Goudie) and mvself. He c1rove 460 miles up to £sker <md back to r::hurchill Falls. So "e are <]Uite fai'liliar w·ith the concition of the road in Labrador, know as the F.sl·.er P.oad.

Now the question is,\fuat are He going to do now? ::'hat is the ouestion. M~ EON. l'El"t!E" : Rear! ::!ear~ :~ P.OBERTS: And then why? "7. YOPGAN: TTpon I".eeting <Jith the people •Tho operate the railway service to 'Ssker froll' the '·/estern part of Labrador and th.e iron ore company and the Quebec ~! ort h Shore ant.! Lehrador ?ail,·Iay, hoth the rr.ember for 'Taskau?i (l·'r.

C.oudie), Hh o h as been «utol!latically~of cour~e,quite concerned ,.,ith the problems in LabradorJ u e uere very annoyed to S«y the least the the reaction «no the lack of enthusiasm ,y these two companies who seem to say to us,' h·7ay! l-Ie do not tJant the people to go out on V?..cation over that road to E,;ker dm.m to Goose Bav to the Is land part of the Province.' Th«t ••as in essence '"hat the~r sai~ .. ''·'e are not interesterl in supulying any on - off loading facilities et 1'ske-::-. '-'e are not interestec' i n suppl::t i ng any ;:>assenger facilities on the raih,a•r 12&15

June 14, 1977 Tape cia. 1,222 T'- 5 T.vith ref.ards to a car fer~r.' .o~~nC. this to !"e, well, I •·ill sav it end openly, Has annoying because r;e are talking al'-out ~'e~;foundla.nders uho live in t~e Lahrador part of our Province,who want to travel doFn by boat to the Island part of the :Orovince to their home part, if you want. ftnd the iron ore company and the La bran or l'aihrav, or !luebec ?:orth Shore a.nd Labrador Railuay showed very little concern at all.

""owever, ! am of the opinion ~-7e should overlool: that attitude or lac!~ of enthusiasm and He should r.'ake every atte!llpt to t:eep tl-te road open. But the fact is the cost of keepin~ the road open for three months uill be 1 according tc our enflineer's estrnates ,-,rho travelled ;rith us, $1.2 million. And th?.t is a ~air a!'"ount of money to invest in a road this Su'I"!:'.er .-:erely to keep it ooer, keeo it passa~Je, and then to find out thet the people cannot get frorr. the Lab racier - ~; abush area of the Province out to Sslcer to get onto the road.

So '<le are sincerely hoping that the Labraclor "ailway or tJ.e C)uebec C>Torth Shore and Labrador Raibvay and the iron ore company 1vill change their attitude and 'vill supply the facilities to people who are 1".ost of them their eiO.ployees, iron ore company employees. And supply the on - off loaring facilities at Esker and in fact passenger facilities while the cars are being moved by rail from 1·'abush to Esker. ~'?. EODDEP.: A final supplementary, rr. Speaker. ~. SP'!W:CER: The final supplementarv. I o•as just wondering about the log:!.stics of the minister's trip.

He says that :1e fleH and '".rove t~1e road. I ,.,as '~ondering how you drive and come to a ,.;rashout and then fly over that~ was the minister driving a batrnoblle? '·<1' ROBERTS : How many vehicles Here involved and ~ow nany ~·r. Speaker, the han. fentleman seems to t!:link I that Labrador is "'ay out there in an unknown land. There happenec' 12(;16

Ju!Oe lb, P77 Tape ~T o. !;222 . S\. ~ ~O?~G.:\l·!: t:J be vehicles on both c;ncls of !~at road, --·---- you !:noH. !~aybe the han. gea-T"J.tleman Hho is spol;:esL:la.n on transportation cutters for the Opposition should go to Labrador and find out ~~hat is going on in Labrador. Love to have the invitation. '\R. :tO:l.Glll~: The fact is •re ;lave vehicles in Churchill ------ F:Uls, ·,rhich drove down tmmrds Soose, ue drove up fro'-! Goose touards Churchill Falls and the place <·7e could not get over loy vel1icle 1ve fle11 over and net the ot!1er vehicle by the side.

Ilut t:1ere are vehicles on C>otc1 sides of t:1e road. :!!'-. STRAClLAli: Is t:1at service go in:; to be t:1ere all Sunmer? ~~t your spo:<.esman to ::ravel tc1e Province, boy, and learn the facts. ORDERS OF TilE TJAY: '•lR. SPEAKER: Order 1, the adjourned debate. • S'~. STRAC11AH ~ There are :1.0 - : !R. r.o!m:.<Ts . :To Order Papers. - Order Papers. ;.tR. SPEAKER: Order 1 is the Address-in-Reply . I understand t:1e Order Paper for today has not arrived yet, so Order 1. I am going by yesterday's Order Paper, Order 1 is the Address -in-~epl:r. :!R. STRACH.!I.li: I uonder, :rr.

Speaker, since it is some t:il:!e since I ha.'ld.ed in the amendment if tile Cl1air could give me a copy of ny amenument so that I could revie1·r it nyself. :tR. ROBERTS: A little adjouroent no~1 until <Ve get it, ~ ::r. 3!'-::!al:.er? :m. 5TRACHAH: Is ::hat in order? Yes. Actually I an not sure if you !aade the amdnenent or when you were speaking said, liow I run going to ::1ake an amendment. cl!'.. ST~\CHk'l: :lo. I nade the amendment and it Has actually seconded by t~e hon. member for Trinit y - ~ay cie Verde (~~r. r..owe~ nncl it 12U17 I•

June 14, 1977 Tape no. 4223 Page 1 - ms Mr. Strachan. was submitted,I"believe,and then I carried on from there for fifteen minutes. MR.. MUIU'HY : (Inaudible). MR. ROBERTS: Mr. Speaker, pe,rhaps we could have an adjournment for a moment or so. The hen. gentleman - let me say a word - the hen. gentleman moved an amendment. It was three or four weeks ago. The government have given him little notice that they Here calling the debate in these dog days of the session. I think it is reasonable, Sir, that the matter be put to the Rouse, and Your Honour is the one who must put all questions.

I think it is entirely proper to suggest that we have an adjournment for a moment or two while the clerks look it up and give Your Honour the wording as was put by the Chair late one night about a month or six weeks ago. I think that is entirely in order. MR. SPEAKER: I think that is the appropriate procedure. He have to have a copy of the amendment in front of us, so I would adjourn the House for five minutes. MR.. STRACHAN: Mr. Speaker, to that point. I believe the trouble was that it was changed before it was submitted to the Speaker. I cannot remember if the change was the actual one here. MR.

Sl>EAKER: We shall adjourn for five minutes. '!R . SPEAKE~. Order, please! We have located the amendment and, therefore, the debate may resume. The hen. member for Eagle River. XR. STRACHAN: A brilliantly conceived amendment, }!r. Speaker, very complicated. Mr.

Speaker, I am tryin2 to get back on track, because it was some weeks ago, five or six weeks ago, when we were talki~g on the Throne Speech, and I moved the amendment, At that time I was interested in talking on the development of some of the resou~ces, the natural and physical resources of this Province, with particular reference to oil and gas and to hydro develouments in Labrador, and also in particular later on we discussed the Churchill Falls taxation 1.2C18

June 14, 1977 Tape no. 4223 Page 2 - ms Mr. Strachan. which we discussed during a later speech during the Minister of Mines and Energy's estimates. I noticed that - in just brief reference to the Churchill Falls taxation - I noticed that in the newspaper articles following that debate, and also the impression gathered bv the ex-member for Twillingate (Mr. Smallwood) was that what we were doing - and it seemed to be strongly felt - was that what we were doing in the Churchill Falls taxation that we were proposing here was that we were interfering with a contract.

And I would like to stay here and now, we read the number of newspaper items, articles after that debate,which lasted a considerable period of time,and there seemed to be a feeling that what we were talking about in developing that resource and applying a taxation principle to it was that what we were doing was interfering with a contract between CFLCo and Quebec Hydro, and that in effect that anything·we did would be interfering with that contract and would be a breach of that contract and that statements that were attributed to us was that we were either near Communist or we were creating a Banana Republic by certain members and by the ex-member for Twillingate especially,who felt that to take a stance like this was far too harsh a stance.

I should indicate very clearly that what we were talking about - and he seemed not to listen to it,and others too - that what we were talking about was talking about a taxation outside of a contract, totally and absolutely. The contract itself still stands. The resource taxation we are talking about, with plenty of examples in Canada, plenty of exanples in Saskatchewan and B. C. and Alberta, is what we are talking about applving, a taxation principle totally outside of that contract so there is no breach of contract.

I should like to indicate that because it seemed from articles after that debate that the emphasis seemed to be that the reason why such a taxation principle would not work was because the taxation would interfere with the contract. And this is totally wren~. This is totally the wrong impression, this is totally the onnosite; if the taxation principle did interefere with the contract, then, of course, 1ZC19 ---- --........

June 14, 1977 Tape no. 4223 Page 3 - ms }!R, STRACHA...": there would be no basis for it whatsoever, and the whole idea would be totally foolish and ridiculous. And we had researched that very thoroughly and had checked it out very thoroughly to see that there were precedents elsewhere in Canada where the taxation principle had worked outside of any other contracts. There are a number of other contracts elsewhere which are different from the CFLCo - Quebec Hydro contract but the principle stili applies, and it applied with Saskatchewan in potash, the oil in Saskatchewan-as well,and also in other parts of Canada.

So I wanted to indicate that here. That night on that amendment I had intended to discuss a number of natural resources and development of the resources, and in particular I would have gotten into Churchill Falls or oil and gas and various other things. So I want to indicate right now that subsequent to that we h~ve had the debate on many of the points that I had intended to raise in the amendment. We have had the debate, and I have no desire whatsoever to waste the time of the House, especially in the month of June, by continuing on discussing things which have already been discussed.

But I still want to indicate that it seems to me that in the subsequent debate we did have concernin~ a portion of the amendment that I had wanted to get into,that part dealin~ with Churchill Falls, there seemed to be a wrong impression gathered of what we were statin~ from this side.

What we were stating was a taxation principle totally outside of a contract, and it seemed to be gathered, as I said, by many people in their attacks on that principle that we were espousing, it seemed to be gathered that we were intefering with that contract and, therefore, because we were interfering with that contract, we were totally wrong, that the principle could not be applied, And I would like to make that quite clear that we felt that some of the coverage, for inAtance, seemed to allude to the fact that ••e •~ere interfering with the contract, and we have researched this very thoroughly, and we have found that it is not so.

It is not the principle we are espousing. It is not the principle we are talkine about. We are talking about somethin2 entirely outside of the contract and, therefore, it can work because it is outside of the contract. 12C20 I 1-

June 14, 1977 Tape no. 4223 Page 4 - ms Mr. Strachan. Suffice it for that part: the only other part that I want to get in briefly and discuss would be the concern of the oil and gas scene. Of course, since then we have had the white paper, the draft regulations on oil and gas. And possibly I would like to just expose a little bit on our feelings on this. The resources, as I saw it anyway fer considerable years, the resources of this Province,I have always felt, nonrenewable resources, belongto the people.

And if we follow that concept to its limit what ''e must regard then is that all minerals within this Province are under the ownership of the people of this Province, That does not mean to say that what we are talking about is either leftist or socialist or anything at all. What we are talking about is that because they do belong to the Province thev, therefore, belong to the people, and we should never concede that right awav. We should never concede ownership away to any outside corporation in any form. Now c-oncessions were the run of the day at one time.

Concessions of virtually giving away large chunks of the Province seemed to be the way to go. It also was the same right across Canada and also the same in mauy of the countries around the world; that what one had to do was to concede your rign~ to minerals or • concede areas, large chunks of land to companies, allow them to search for the minerals on that and allow them, therefore, to obtain these minerals at a fairly cheap rate, That seems to be the policy followed in this Province. And I have no qualms about any previous administrations, be they the P.

C. administration now or the previous Liberal administration in the way they did it, but I have ah•avs disagreed with this basic principle of conceding away resources. In fact~ if anyone '~ants to go to Labrador Ci tv and see the si t11ation there, we could almost solve the unemployment problems of this Province, I believe, by some pretty drastic action, but it could be solved by some good legislation, and you could see the twin towns of Labrador City and Wabush jump from about 28,000 now, I think it is - 22,000 is it? - Labrador City is 12,000 - is it? - 12&21.

June l4, l977 Tape no. 4223 Page 5 - ms MR. ROUSSEAU: You would have to count the people in the basements who do not go on the census role, because they are not supposed to be living there until the housing is completed. MR. STRACHAN: Yes. AN RON. MEMBER: They are still people. MR. ROUSSEAU: Pardon? AN HON. MEMBER: They are still people. 1.2{]'22

June 14, 1977 Tape 4224 PK - 1 MR. ROUSSEAU: But they are not counted in the actual figures, they do not surface in the census. If they surface the fire chief would have to kick them out, you know. MR. STRACHAN: There seems to be a great deal of trouble with actual population figures in Labrador anyway. MR. ROUSSEAU: About 16,000. MR. STRACHAN: About 16,000 the minister says. Because I remember last year's census, the 1976 census, showed a total population of Labrador of 32,000. That is the figure - MR. ROUSSEAU: The census figures for Labrador West was 11,000 for Labrador City-Wabush. MR.

STRACHAN: I was reading this morning in which they come up with the census figures 32,786. That was the census in 1976, and I am sure there seems to be something far wrong with that figure. MR. ROUSSEAU: It is more like 39,000 or 40,000. MR. STRACHAN: Yes, closer to 40,000. In other words, that shows how accurate the census is in Labrador when you can miss 8,000 people, Qr 6,000 people can be missed out of a census. MR. ROBERTS: Twenty per cent of the total. MR. STRACHAN: Well, 20 per cent must be hidden off in the woods. MR. CHAIRMAN: (MR. YOUNG): Would the hon. member yield? MR. STRACHAN: Of course. MR.

CHAIRMAN (MR. YOUNG): I would like to welcome to the galleries on behalf of all han. members eight Gra~e IX students from James Moore Central High School in Carbonear accompanied by their teacher, Mr. Case. I trust that your visit will be an enjoyable one. SOME RON. MEMBERS : Hear, hear! MR.. CHAIRMAN: The hon. member for Eagle River. MR.

STRACHAN: What I was indicating was that I am sure if the resources had been developed properly that, for instance, Labrador City and Wabush, the twin cities there, could easily accommodate a population of 50,000 very easily by further refining of the ore instead of shipping out the ore to Quebec and on to Central Canada where it is refined by utilizing the resources within Labrador, electricity for the electric 1.2023

June 14, 1977 Tane 0.224 PK - 2 ''r. Strachan: smelters, and the development of the iror. ore there we could very easily solve the unemployment problems in this Province by developinff along these lines.

However,we have entered into situations in which there are concessions, there are contracts, there are ~~ays of doing it, Ihe most we have is a oelletizing ooeration, and it is ghirmed out and this l••as all part of the old contract, the· old ··ay of doing ~m> in order to change that one "'auld have to tnlk about legislation or legislating changes or trying to get the conoanies to move in a different wav, and that requires a fair amount of ne~otiations and a fair amount of guts.

But ~>hat I am getting at was the fact that under the concession nrinciple most of the resources were conceded to co:noanies, companies Here ;!iven all r~?:hts to them, and they could virtually do willy-nilly what they wanted.

If the concessions run out or become uneconomic one year, then they could consider closing: do~-m or in the case of Buchans~for instance,,>hich is faced with it now there will he a time coming l>hen Buchans "1ill close down; whether it is this year or next year or tim years from no~•, Buchans will close out and we do see therefore the end of a to•.-m, because the only reason for being for Buchans is for that mine. Once that mine is gone there is no reason for Buchans to be there at all. ~. WHITE: Create something else.

So what we got to do then is start looking at something bevoncl. the •>hole situation, start lookin~, and the same thing Hill nccur eventually,of course,but not tn the same time frame, the same thing •71.11 occur in Labrador Cit:1 e.nd •Jabush where we are going to end up 11ith then is a situation in ~-1hich ""e conceded away the· -resources, ~ained very little back, and we have nothing left in the end but scars in the ?.round or holes in the ground which they have extracted everything from.

Follo,•ing the same principle then, it Has ~•hen the ~inister brought in his oil and gas regulations, his draft oil and ~as reo:ulations. that I '"as nleas;!ntly surnrise<i ... nr_,....4 .J.j(,jLf{. - should not have been

June 14, 1077 Tar>e 4224 PIZ - 3 'fr. !0 trach<>r.: of course. I ]cno~· soT'!e of the men hers •,•orkinf in t~e rni~istar' s c'eDartnent,Cabot ~!artin and a fe~~ nore of the!!! 1Fho S'Pent a great deal of time researchirrg the problem and researching the oroblem else,here in the uorld and lookin!!: at the situation elsewhere - and it <?as with a pleasant surprise that I sa~,, that they took some of t~e attitudes they did take in the drafting of the regulations.

Em-rever~ there '·'as one coint I felt t'hat <·Te sl,ould al'IT'ost .o:o to a bit more, and !!laybe t!le rdnister later on sor.etime cal'. discuss it ~-lith us. in that I have always felt that we should t':lerefore mm- if '·'e mm the non-reneHable resource, if He are going to fiP.:ht Otta•,a, f:!g;ht Otta"'a in order to mm the oil and gas,cr if ··'e mm a mineral, then i~ ••e mm that mineral "'hy ~et into any <Josi.tion in '·7hich ,.,e share or turn that mineral over?

I·Thy not get into a nosition in •·Thich becor •e the C''•'Tier and therefore a person '·7ho comes in becomes a contractor~is contracted to to.ke that out for us? Rut "hen it is taken out it is still owned by us; all they are doing is removing that mineral. It is taken out and owned by us, and ~,e in turn will sell that mineral maybe back to the company '~he took it out, •N'hO 'VOuld get soecial -pre:l!erence, if necessary, if they are maintaining a l!larket price, but it •··auld also keep them on their toes.

It •muld mean that they could not - if there was no long term contract for them, such as has occurred elsewhere, it would mean therefore that they could not nush or they could not start squeezing us in obtaining something for nothing, obtaining minerals for •1ery little and selling them else'"here and amassing the profits outside of this Province instead of puttinz something back into the Province, because :nost of the situations ''e are dealing Hith they have nut very little back into this Province. ~ost of the idea is to exploit the Province, take everything out of it, make your money else•Jhere, pick up your monies in various ~-rays along the line, and put nothing back into the Province.

P.nd ::: have often felt then that ,,,hat we should lock at is an oil cornoration,possibly,in this nrovince ,;hich owns t!1e oil, '·'e contract Eastcan,cr <Jhatever other comuany, to get the oil out 12C25 . -

Jcne 14, 1977 Tape 4224 PK - 4 ' 1r . Strachan: for us, but Hhen it has been gotten out of the seabed it is then ours to sell, and if Eastcan wish to buy it,or ~p or Shell wish to buy it, whoever wishes to buy it, then they buy it on, say, a three year oeriod or a five vear block period and they buy it from us at market prices, and it is renegotiable after the five year period. But the fact is •<hat tve are doin?; here is tr;rin<>; to ?et into a situation in Hhich ~~e own, and they are in a contractual situation, they are ~ot in a concession situation or o~T-ing it by any "'-eans lik e that.

Ap1'arently this has heen ~Jerking in s"me areas, and I tO"lr= this out hecause I feel it is an idea ~•hich could possihlv be developed. It is an angle tl-at could be thought about anc\ I throtv it out and r cssii:l:r the minister and I can discuss some of the as-pects I am talking about. Essentially that is as much as ! ••=-s~ to say on this "-r.Jer.clr:ent. I :1ave no ··•ish at this tir.Je,nor do I have the feelir<ts or the desire to kee p the :'louse foinf!;. '"R. HURPRY : ---- - - ~es, and your backbenchers have all gone. MR.

STRACR.AJ.'I: My backbenc!1ers ~Jere gone all day yesterday too. /01 RON. ~~:BER: And there are some missing on the other side. - ------- ' 1"" ST'P..ACEA~T: -------- Yes, tCJ.e member for :laskaupi ('rr. Goudie) and I decided to !J:D goose huntinr,even t!loueh the "inister of Tourism tells us it is out of f] season. \.Je d<;> not minrl. ""' 1 en::": "-" ! r!r:!.ve the boat and ~e s~oots,I do not r.1ind. HR. ~1UP.PHY : I think I know why vou like that arrangement. :'Jt. "TRACHAN: Otherwise. ~r. Speaker, I sup,ort the anendr.1ent. ------- Is the Eouse ready for the auestion? All ::_'1l.:_ .fY.!_AKER (HR.

YOUNG): Con tray minded? 'fR. S~AKE'< (~!R. YOU!'TG): In MY opinion the "'layes" have it. ~~. ROB!'~_T<; : Put the main question. 12u26 ·.

Jt'ne 14, li:J77 :."apP. 4224 ?K - 5 NR.~~ (:<:R. YOUNG): Is the :-:ouse ready for the main question? HR. STRACP.AN: Yes. ~. SPEAKE_! (~. YOUNG): All those in favour "Aye". MR. SPEAKER (MR. YOUNG) : Contrary minded. "Nay 11 • HR. SPEA.'<F~ (MR. YOUNG): In mv opinion the "Aves" have it. Oh, oh! MR. PECKFORD: Bill No. 114. 12<.: 27

Ju!le 14, 19 77 Tape ::a. 42:05 ~!'[ - l :-m.. :rurJ>h"Y :

An act: to provide for tile closing of the House pernanently. ;m. ROBERTS: Are there still no Order Papers? :m. ~::UPJ'HY: )lot up yet, boy. :-iR. PECKFORD: Bill No. ll4. :l:R. ~OBEitTS: T~1ere is a regular '~ay of runrling a House. :m. PECKFORD: Dill :lo. 114 . :m.. ~!URPHY: Emergency !"leasures legislated and "e use yesterday's Order Papers. :!R. SPEAKER: It is noved and seconded that the said bill '.Je no~-r read a second time. : !7.. ROBERTS : :!R. SPSAKER: :rR. r.OBERTS: Hey! :{ey! First time! Sorry.

Bill era. 114, Sir, I do !lOt have an 0rder Paper in front of ne, but ~>as this not the one in respect of 'lhicll :::1e mi!lister gave notice today? ~rR. SP'SAKER: Yes. ~.fR. ?..OBERTS: \!ell t::ten 1;re are not going to read it today, :!r. Speaker, are lve? Notice is given, there is tventy-four ~ours. :!R. :!URPHY: :!P .• ROBERTS: It :1appens. Yes, I do not have t!:le Order Paper. A most irregular 1~ay to proceed, but I guess "e have no choice but if t:1is is one in respect of 1-rhich the minister - :m. SPEAJ.<ER: ":!!.. RODEP.TS: Order, please! Order, please! - 3ave notice today, :fr. Speaker ..

I am speaking to a voint of order - then there is going to he no first reading or no second reading of this bill today unless there is consent, a.'1d at :::1is staGe no consent :1as been asl:ed for or given. ''[R. SPE/I.KER: To that point of order - -~~ RON. 're~rnER: Inaudible. !lR. ROBERTS: "ell, it 1muld not have happened if 'Alec Hiclcrnan' "ere here. ·m. SPEAKER: Order, please! To that point of order, does the hon. House Leader ~1ave leave? :12C28

Ju:1.e 14, 1077 , ~a p e :To. 4225 i'io. ~re viithdra~v t1"e bi!l fran second readin~. ~'P.. SPEf._T(E" : It is ~~ithdrawn. : '11 • PE ITF"1'Cl : 0rder 9, 13i] 1 No. Zl, "An Act To ~.l!lend 'n:-.e Stephenville Liner':Joard ''ill (Agreement) ..'\ct, 1972 .'' other one. l)fi()!JV' : 'Brian: '''oulc you !'lease call, J3ill :ro. 73, uhich is :~otio:n 3. ''hy? I Fas _iust inforeed to call tre Yot' can no it if you <·rant to.!:mt I have not ~ot it here <t;•:rith tr'e. T:1e Stephenville Linerboard :!ill one? l"" DOC!1Y: Yes. ~1ell~the PreT".ier told P'.e one tr.ing and you 2.re telling roe soroething: else.

I.et us call the other one. '"'"!-'. SPEAI~Ei'.: 0r.c1er, please! I 'nove the <'!djournT"ent of the Rouse . _ , . PErKFOP.D: Bill 73. I'P .• !JOODY: J3ill 73, motion 3, I move the Rouse into rommittee of the •fuole to consider certain resolutions in relation to the 2.c1-1ancing or guaranteeing of certain loans. On motion that the House resolve itself into Connittee of the T-fuole, ''r.

Speaker left the C'hair. r0~'J"I'T'TEE OF THE ~-!H'lLE : 1Jrc1er, please: That it is expeclient to bring in a me<!sure further to aT"enc'l t'oe !.oan and Guarantee .l.ct, 1957, the .'ct ')o. 70 of 1957 and to provide for the acvanced loans to the guarantee of the repaYl".ent of bonds or debentures issuec' by or loans aclvanced to certain corporations. Shall the resolutjon carry? Not ouite, Sir. It is ahvavs one of the more significant bills brought before the House.

This narticular bill, as the notes jnc"icate, is one of the S"taller 1'uarantee acts that '-ave ''een brou~"-t hefore the Fnuse, cert2.inly durin~ !T'V ;->eriorl 1ZV29

June 14, 1977 "'ape ~!o. 4225 of time in the ~ouse. T:l.e re are t•·•o guarw."l tees specifically; one of them is the P.alland I'orest Products 8Uarantee of $200,000,anrl that is a sawmill_industry in the Bay Q'Espoir area which is currently experiencing great difficulty anc1 that $200,000 r,!hich governT'lent guaranteed some time ago is now_ in ieopardy.

The Banl: of 'Tova Scotia leas called that S201'),11nn, \fuether or not government, through the "epartirent of Industrial T'\eve2 om'!'eP..t. can fine! a •. ,ay out of t:he problem that the coir.pr.my is in remains to be seen hut as of this moment that $21'l0,nn~ guarantee is in both principal and interest - ~'P !'.OEER~S: Phat security is ]eft there? I reall ;r do not know what secur t ty is J.e "t t'o<r.J. there nmv.

Ir. 1?76 :'all<md ap':lroachen governi".ent For financ~a~ assistance because it was really incurring operatin~ losses, very huge operatin!': losses,a lot of •··hich ,.,ere the result of the wood situation down there. There was an ongoing dispute bet••een tbe C'onne Piver sawmill ·voods area and the area rvhich had been 2llocated or Hhich the company had felt rvas allocated to thel!'. ~:ow the investl'!ent in the corepany as of Au~ust 1'?76 totalled approximately $2 millian.

There 1vas $aZ8,000 in direct investl'!ent by or contingent liability on s'lareholders and there is a $921, ()()() llewfoundland !'evelopment Corporation involvement. ~ere is S230,000 in ""EE money ard there is ~42S,nnn in trace creditors. The company- ~-/hat 1-1as that? The ~irect investPent by our contingent liability on shareholcers is ~428,000. ''1? "OBEPTS: Dir~ct investment - Our contin."ent lia!:lility vhich -!.s ;:>ersonal 1.2030 .:

June 14, 1.977 Tape ':o. 4~25 'T'f - !.J !"'.. ::nnnY: guardntees of tre shares. If t!le minister l•muld permit since '·-•e are in Cotr'l!littee, l1m.r much is ,.,hat? I mean, that is an impressive sounding total, '"r. Chairman, until - the public accounts please, not a report of - the public accounts of the Province, how nuch of it is direct - })ow Il'UCr. of it is casr. and how IT'.uch of it is ~uarantees and ~uarantees are >7 orth only '''hat the p;uarantor is ,.,orth.

I mean~a personal !!Uarantee from the minister night be "orth a great c:1.eal and a personal gurantee froM ne might he worth very little in terms of the bank. "o can t'b.e minister ::;ive us a further 'JreakrlC">m? "m,· much cash is actually in it? v!e l-ave got $1,9'll'),nno:nnc Money- ,.,., DOODY: The total investment ir the co~pany as of Au~ust 1"76 is about $2 million. nf which $1.6 million is from public sources of one sort or another? ""' • D'lOJ'IY : $921 ,oon 'vas :!lLDC, :!ewfounclland and Labracor revelopment Corporation.

There was $~30,000 from nBEF. ~e other $425 ,noo is trace creditors, This 1.rould appear to me to be accounts payable. }"' • :'0BERTS : The normal at'lount of unsecured creditors. And no'" !;3200, 000 from us going into it. ~{oT-T mnch cash is a.ctually -tn this? ~.,. nonT'Y: Let me run through this docmnent an<i maybe some of the answers are in there. I ,,,as horing that th.ere nir,ht be so'r.!ething there from - See if Mr. Lunc'rip-an is ar<mnc' i.n there, ;70ulc you please? The company requested assista.nce at that til!'.e then, i,n August of 1976 totalling $575,000. Government agreed to 12031

June 14, 1'!77 Tape ':c. 4225 '~A' - 5 2-'J' .• DQI'DY: purcl-.ase equitv in the company arnunting to $375 ,oon and provide a guarantee to the bank in tr_e amount of $200,000.

Approxirnatel~· $175,000 of this assistance •·•as to be repaid to government or its agencies as foll~·s, and it says here >4as to be repaid. ~73 ,000 Netvfoundland T~arc'••ooC!. s LiMitecl for the sawmill inventor-y p"t"ogral"'"e. lvell, ttis is a p.ro3ratn!"e Hhich the :lepart!!'ent of Industrial :-JeveJ.opT'!ent- or Pural T)evelopl'lent introdu c etl last vear to finance the i!!ventories of various sa•,.,i:!.ls t·•llich t•ere in difficulty.

The: r pnrchasec'. the t•mod cf various sa•·'!'!ills prior t o t;,e i r selling them to ot"er peo!'le. .6nd t~en as, the (ll.onies ••ere received for the sale the arnounts •·rere - '· ~ . "P :~ .. MR. !f!' ·'·T .• T?_n~ "R ,.,_.,..~! JC(11'1JY: T"J('BLPT~: DC''lDY: rOBERTS : DO\IDY: POJlE"!TS: ~e report of the public accounts. 'Tl,i s is ,,,.hat the hon. l'leT'!cer '""-s - Yes, there it is, the public accounts. :O::z:cept tJ1ese are l<J75, you knm•, but - Close, but no cigars! I was just showing them as a specimen to the - It is not the Public .~.ccounts C:o11ll1littee !'eport.

It is tl e pub lie accounts of the "rovince. Period. 'That is right . ~f,(), ~')() HaS OVed to the :1e•Jfcundland c;tcheauer, and I presuT'!e that is S.S.A. Is that stumpage? ~5n ,f11n to tre ''evrfoundland ::~che<'uer Account. I guess that is S.S.A. on sales •mdoubtedly.

And c.-,ere is a $4:J,DOO anount m;ec' to t he '1e t·!1'oundland and Labrador "eve ' op.,.ent rc!"C)or;~tio:'l~ t·:hic!J is that portion of the interest an c. principal arrears. .~.s of this date the company has effectively received its financial assistance from government 1Yith the exception of the $175,00() referred to abov~ And that is the s~~ total of these three amounts 1.2(}'32

.June ll;, l~77 Tape :;o. 4225 ':».. P.O:EP'!'S: l-!ell,d5.d the govern~ent !:>uy eouity in it now? ''P. J:I00DY: It appears that the government is purchas:!.np: or has undertaken to purchase eauity in the company amounting to S375,QQO. :Im.r that $375,'100 equity purchase is in pos:i.tiou then the $200,000 ~arantee '"'~· ~rp. '"? .• the ?.0RFRT~: D0"DY: ".0:!lE""TS: equity - Is over and above the $375,0n0. Is over and n~ove the $37s,nno. '·'ell »hat did r-re r.et for our ~375 ,001) if ~~. nni)DY: It t.rould appear to l!!e as though He ~Jere buying equity in a c-onpany in "'hi.ch there is very 1.Z033 ,I

Ju~e 14, 1977 Tape 4226 r:.:c - 1 ~IR. DOODY: little of substance. :-!R. ROBERTS: Thank you very much. :IR.. DOODY: And so t;,.at is ••hy I was asking if the han. - the minister is not out there? Y:R. P.OBERTS: l·:R. DOODY: "" __ ...... F.O:SERTS: 0h, yes. Can it stand over'/ Yes. Because,'Bill', to put a hal£ million ~ucks i!lto a co~pany t!l.at - at least on those figures - is hopelessly insolvent. l'R. :JOODY: That is right. The notes that I have here - ~3'.. ROBERTS: 1·1hy do we not leave that and go on to talk about the :<abush 3us Company and caybe 'A'e could - :'R. DOODY: f'Jkay.

By that time - -~::z.y, the ::2.bush - ::11.. ROBE?.TS : I :nean, if they ••ere sell ins pickles, Heinz would not even look at them. : IJ1.. ')(JODY: Hell, that is right. Unfortunately that is true of a great many of the sawmill industries in the Province Juring the past year or so. ~'R . <.OBERTS : I agree, and we should have a good debate on that. :lR. DOODY: And, you know, this one •·ras to have been one of the answers to everything because they had the - He have some new modern ones. ::P .. DOODY: Yes, they had th~ kiln in there, t;,.e drying process. The expertise was in there.

It was originally Ed Ralph End ~rnie 5 trickland ~~ere the two principals. :!R. ":.ClBEP.TS: Ernie Strickland.. But is not Ed Ralph out of it now? '·!R. DOODY: Ralph, I understand, sold his interest in the conpany to - : ~. ?.03:':BTS: The Harvey Dawe ;;eople - 1.2G34

June 14, 1977 Tc.pe 4226 ::c - 2 :8.. DOODY: - the firm of Dawes i~ Grand Falls, and I think that most of this personal guarantee and ~Dst of the direct investment is Dawe's investment or that company's investreent and they have been in effect carryingthat load ever since they got involved in it. :~. ROBE!?.TS: It seems folly to put - :'P,. D00DY: I understand that they met - I ,,,as asld01g somebody the other day and I think that the Dawe co"!pany !:let that company's payroll from their own bank account during the past c'R. R03ERTS: It seems folly to put ~ore money into it,does it not? '2. DOODY: That is right.

And on the other hand if that sawmill down there cannot succeed with the kind of tale~t t!1at <vas there and the equipment ti-.a t they have had and so on, you know, it nakes one wonder about the - YR. l"DBERTS: lve1l,add that to the Hawkes 3ay on wh~re the Lundrigans and Bowaters agreement has cost - what? - four or five million dollars down there. :1R. DOODY: - the Hawkes Bay mill and the big mill out near Gander which - :!R. ROBERTS: - is nmv in the receiver's hands. l1R. DOODY: - in the receiver's hands and so on. And so the answer is obviously "" ....... \..

ROBERTS: The only one making a go of it is Peter Byrne in Roddickton. :IR. DOODY: And now the Canada Bay mill,without the pulp sales somewhere they are going to be in difficulty. l·lR. ROBERTS: Yes, I mean, they were saved by the pulp sales - :·!R. DOODY: That is right. But that is finished now. 1.2V35

June 13, 1977 Tape 4226 EC - 3 NR. ROBERTS: - and thus we will pay for tha~ through the linerboard account. HR. DOODY: That is right, so that is an indirect or direct subsidy, whichever, So as you say, we can let that one sit here for a minu~e and I will try to deal with the Habush situation. Order in Council No. 451-73 as the note says authorized the issuing of a guarantee to the extent of $250,000. There are actually tw·o guarantees; one was for $50,000 and one was for $200,000.

At that time in vlabush there were two alternatives tvith regard to transportation of school children and also there were company contracts particularly with the Habush lli.nes~ I think,more than roc , but roc also. This particular company was most anxious to get involved in that business and felt that they could do it, and do it well, and we were most anxious to give it to a local company rather than have the other bidder from Quebec. HR. ROBERTS: l!R. DOODY: by Peter Walsh. HR. ROBERTS: the P.C. Association. r!R. DOODY: in the - MR. ROBERTS : HR. DOODY: :-ffi. ROBERTS: c!R. DOODY: Who were the shareholders?

The company,as I get that,is owned Oh, yes, he used to be President of That is right, and he was a candidate Oh, the candidate. The candidate - That is ri~ht, yes. - in 1971. In 1973 the loan bill that was brought forward at that time listed only the $50,000 amount and not the second one for $250,000, but fortunately the original amount of $50,000 has been completely repaid and the $200,000 - HR. ROBERTS: That makes it $200.000. }!R. DOODY; The $200,000 amount is now in a situation whereby the garage whicn tv-as built burned down and subsequent 1.2U36 ·. - -- ·---- -

J=e 14, 1977 Tape 4226 EC - 4 l1R. DOODY: to that the government of the Province took away the school bus contract from ~r. Walsh, because we felt we were being overcharged, if I may express it tactfully. HR. ROBERTS: Put it aelicately. ~!R. DOODY: And we undertook to finance the purchase of buses by the school ~oard up there. This, of course, resulted in some difficulty for the company. The company has subsequently sold many of their buses.

They still have the contracts with the two companies for the transportation of workers, The result of that was that we deferred the two principal repayments of $5,600 each which amounts to $11,200 in arrears. ~ow the interest on the full loan has been kept up to date, and also all the subsequent payments have been kept up to date. .~d, of course, this one is - I am very familiar with - the personal guarantee of ~ lr. l~alsh is in place. The security for the loan include the floating charge, the first mortgage on the fixed assets, the chattel mortgage and an assignment of all the insurance.

The government is more than adequately secured on this particular one. That two months deferment of principal saved the company during that difficult cash flm~ period which resulted partially from the burning of the garage and partially from, as I say, the loss of the big chunk of his business which we felt was just not reasonable or sensible to hold in place. .~d so I think we have managed to keep the company afloat and at the same time protect the government's interests. And that one, as I say, I have absolutely no problems with at all.

On the Ralland Forest Products Limited, I really do not have enough information to supply the Committee. Perhaps the hon. }tinister of Industrial Development may be able to supply us with more detail. llR. ROBERTS: \.Tell, c!r. Chairman, before we get into the Ralland one where perhaps the :!inister of Industrial Development 1.2037 .. j:' I

June 14, 1977 Tape 4226 EC - 5 ''lR. ROBE!l.TS: can give us some information and I know my colleague from Burgeo - Bay d'Espoir (Mr. Simmons) will want to comment upon it. He has good firsthand knowle .dge and I would say to my colleague that the situation as revealed by the ~linister of Finance on the notes he had is really very disquieting. But let me say a word or two on what seems to have been a very unusual series of transactions involving this Wabush Transportation Limited.

And let me preface it by saying that I am not going to oppose the - I am not going to vote against it in resolution stage or in the House,simply because that js pointless. The guarantee has already been advanced. Whether the House ratifies it or not the government have no choice except to honour that or see the whole credit structure come tumbling down. And I do not know the answer to this particular conundrum.

The government must have authority in certain cases to guarantee on the Province's credit even though the House has not ratified it and that puts the House in the position then of being a complete and an utter rubber stamp. We have no choice. If the House does not ratify this bill, not only does the government fall, but the bank or whoever advanced the money on the government's guarantee could still sue on it~I am quite sure. MR. DOODY: MR. ROBERTS: debate. MR. DOODY: MR.

ROBERTS : That is the advantage of the bill - Well,they would allow some retroactive Then you revealed what, you know - Well some of the information is revealed and I think the minister is more forthcoming than some of his predecessors of both political stripes have been. I just want to say that based on l<hat I have been told today of the Wabush Transportation situation - and that is really all that I know about it. I had not heard of the company and I must confess I am not particularly concerned about the company. There are bigger fish to fry than $250,000 guaranteed to a bus company in Labrador.

And I must say, based on what the minister says, you know, the government seem to have operated with a degree of prudence. They have deferred a couple of 12038

June 14, 1977 Tape 4226 EC - 6 MR. ROBERTS: capital repayments. They have also extended a further line of credit. And what we are doing is being bankers. ~bviously this company could not raise money on its own through the normal routes which include personal loans. Obviously the principals in this were not able to raise the money on personal loans. Obviously they were not able to raise it on chattel mortgages or assignment of their contracts - again, you know, unusual; most businesses are financed by a combination of these things or on personal investments of one sort or another.

And I do not find it particularly objectionable that the principal in this company is the former P.C. candidate. Some people could call it a pay-off, but I know Mr. Walsh - I have come to know him fairly well the last little while. Perhaps his political views are becoming more advanced than they were but - ~lR. DOODY: Maybe because of the school bus contract. MR. ROBERTS: Well I think it is mainly because of the member from Minihek (Mr. Rousseau) and the government, but 1.2039

June 14, 1977 Tape no. 4227 Page 1 - ms :1r. Roberts. I was not even aware of the school bus contract. And if the government took it away, well, you know, I do not quarrel with that and Hr. Walsh has never mentioned that to me,n~r has anybody. I was not aware he had the contract nor was I aware he had lost it. That is irrelevant. What concerns me is that the government a couple of years ago- I am sorry, at some time in 1973 -~ow I assume that was subsequently ratified by legislation. I have not looked up the - :IR. DOODY: No, that is what I pointed out. T;1ere were t'm - obviously I did not :nake that clear.

And as I was saying,titis is. the point that I find embarrassing on t.'tis ?articular thing. It is not :1r. lolalsh or the :.labush situation. That one is perfectly clear, and there is absolutely no problem or impropriety to it. And as I say,it was either help finance that particular company or have a company from Quebec move in and do the transportation in the area. There were o~o guarantees issued that year; one for $50,000 which was for the cost of erecting a building to house the new buses which ,.ere needed; and there was ;,200 ,000 to finance the purchase of t;1e new buses.

Only one of these amounts apr,eared in the bill. The $50,000 amount ~ppeared in the bill and that $200,000 should have been in that same bill as the $50,000, and it never was. And in fact this year the Province of Newfoundland has only issued one guarantee. That is the Ralland Forest Products one. _'nd we are bringing now to light the fact that '~e did not - it 'vas either through a printer's error or through some other error, but it never did appear on the order Paper. And that is •..;hy as I say, I hestitate , because I do not want to strain the credibility or the credulit ;r of members. MR.

ROBERTS: I thank the minister, and I am not going to accuse him of trying to cover it up. l·!R. DOODY: ~!R. ROBERTS: No, I am :::.ot - I mean it was an error somewhere along the iine, whether i t was a printer's error or a clerical error. \{e can ~lame i t

June 14, 1977 Tape no. 4227 Page 2 - ms l1r. Roberts. on gremlins down in the printing shop, the Queen's printer,if you ••ant. 1!R. DOOi)Y: HR. ROBERTS: I do not want to blame the printer either. I suspect that the real problem was that some law;er or someone would have picked it up ~d said, This guarantee as it now stands is not tvorth the paper on which it is written.

Because the former guarantees, unless it is changed, used to say, Ordered that, you know, the proposal of XYZ Lioited for a guarantee be and is hereby approved on security to ce determined by the ~inister of Justice subject - and these are the concluding words in the vrder, the Uinute of Council - subject to subsequent ratification by the House of Assembly. So in effect the loan,if it was in that form, the guarantee, the loan made under the guarantee, was not secure.

And I would assume at some point the bank solicitors would write a polite letter to the minister saying, you know, Please honour the commitment to have it ratified by legislation. That is not- you know, that is by'the bye. I mean, everybody concerned,I am quite willing to assume,has acted in good faith. And if they have acted in good faith, and if there is none of the sort of hanky-panky that went on with work orders in Public Works, there is nothing to get upset about.

Hhat does concern me, and I merely want to note them are two things: First of all, the guarantee, it says in the explanatory note, >vas issued for a three year period.Now that is blinding the devil in the dark, because once a gua=antee is issued, if money is advanced under that guarantee, it does not matter if it is limited to one day or one thousand days or one thousand years. It is like short-term borrowings in the government. I mean it is ridicrulous to say if a note is only for ninety days it does not affect our credit. At the ninetieth day it must be paid off or renewed.

And the mere fact that it is only for ninety days does not mean our obligation to repay eva~orates on the ninety-first day. So, you know, a three year guarantee - the guarantee is the guarantee and it will have to be paid 1.2041. ,_

June 14, 1977 Tape no. 4227 Page 3 - ms Mr. Roberts. off either by the borrower, in this case the Wabush Transportation Limited firm,or by the government as guarantor. MR. DOODY: three years. HR. ROBERTS: The firm undertook to repay it in Yes, that is a better way to put it. The minister says,"The firm undertook to repay it in three years. 11 And if all goes well, and if their plans are me~, they will repay it. But let us not be deluded, let us not delude ourselves into thinking that the presence of a three year time limit on the guarantee somehow increases our position.

We are on the back of the note and if the borrower does not pay it, we pay it, and it does not matter if he pays it in thirty years or in three years. We may have an action against him if he cioes not pay in three years. But if he does not pay in three years, it is presumably because he cannot afford to pay in three years and that is worth as much as, for example, one with which I am intimately familiar, the Reid one in Bide Arm. You know , we may have guarantees there but,I mean~what are they worth?

The minister, I think, has sent in the bailiffs to seize some of the property there, you know, under the various mortgages we have~but so what? I do not know what it is worth. What concerns me here - and I will not take long on it, but I want to say it - 'is that this is obviously a case of favoured and preferential treatment to a political supporter of the present government. The government are not in the habit of going around the Province and guaranteeing school bus contrac .ts. Indeed, I do not know of any others they have guaranteed.

There are hundreds of school bus contracts throughout this Province and all of them, with the exception of this one, are done without government guarantees. I do not know - the Minister of Education could tell me how many contracts there are, but I ~uppose there are literally hundreds of separate contracts. :12(;42

June 14 , 1977 Tape no. 4227 Page 4 - ms MR. SllOONS: Many hundreds. MR. ROBERTS: ~Y hundreds says my friend from Burgeo- Bay d'Espoir (Mr. Simmons) who administered them. How many from the Springdale Board in Green Bay? MR. SIMMONS: ~. ROBERTS: Twenty-eight in one district. The GEeen Bay Integrated school district was run with great success by my friend as superintendent. They had a few staffing weaknesses in some of their schools, but with particular reference to the gentleman from Green Bay (Mr. Peckford) I do not want to say anything about any other teachers in the school.

But there were twenty-eight in that district alone. Well, in all these cases, Mr. Chairman, the - HR. SIMMONS: where the - ~. ROBERTS: ~IlL Sll1MONS: MR. DOODY: l>IR. ROBERTS: He was an excellent teacher. That is not Was he an excellent teacher? An excellent teacher. Go back to teaching, 'Roger'. A better teacher, Mr. Chairman, than anything else. He makes a good kindergarten debater too But let me go back on this point, because it is obvious that this is a situation where there has been a degree of favouritism, a degree, an unusual degree and perhaps an unwarranted degree. It is obviously political patronage.

I do not say it is improper or unlawful. But as far as I am aware every single school bus contractor in this Province finances his o\m buses. Friends of mine in St. Anthony recently bid. The integrated board had put up their contract. A friend of mine happened to be the low bidder, and the board are deciding whether to award him the contract or whether to operate the buses themselves. They will do whatever they think is best. But in either case,if new buses have to be purchased or if buses have to be replaced,the financi~g will be done either by the board,out of their slender resources,or by the contractor, 1ZG43

June 14, 1')77 Tape no. 4227 Page 5 - ms ~-1r. Roberts. and I do not know of another case anywhere in the whole Province. The contractor may very well go to. his bank or the lAC or whoever is financing his equ~pment for him and say, Look, there is my contract, I will assign it as security. That would be a normal proceeding. It is done in bus~ess all the time, ·you know, to assign a contract. l-1R. HOUSE: l·1R. ROBERTS : We usually give a contract for three years. Well, the l1inister of Educations says they usually give a contract for three years.

That is one of the reasons why, because it would take three or four years~! would assume,to amortise a bus and as a contractor you would have to have a degree of security or else you would have to build all your capital costs into the first year, and that would profit nobody. So the point I am making is that there are literally hundreds of these, twenty-eight in the Green Bay Integrated school district alone a couple of years ago. There are literally hnndreds of them, but only one has been Singled out for a government guarantee which is worth at the very least a point or two on the inter~ rate.

At the very least it is worth that at the bank, and at the very most it might be the difference between being in business or being out. So I think it is obvious-.- l1R. CHAIR..'!AN: ?-1R. ROBERTS: MR. CHAiro1AN: ~1R. ROBE.Iii.TS: ios should be 115. Hr. Chairman? I am sorry. I am sorry, Mr. Chairman. I was not sure whether I had transgressed one of the infinitely varied rules, that Your Honour was bringing me to task. But it is obvious that there has been some political and partisan action here. I do not say that in any way censurial of any of the principals in the company.

But I think it should be noted that the government 'a.ave in my vie~• acted improperly - and in view 1.2044

June 14, 1977 Tape no. 4227 Page 6 - ms Mr. Roberts. acted improperly, not unlawfully. But I would predict now ~ and I would assume the government have no choice except to welcome any school board, bus contractor in the Province who is having a little difficulty •Jith his financing, wandering in now and he will get his money, he will get a guarantee from the Minister of Finance. I mean the precedent is set. And the mere fact that one of the pri~cipals in the company happened to be the PC candidate in that district, that surely did not enter into the government's decisions. Surely, it did not!

But, you know, let it be recorded now, and I hope that the press will note it down~that the government 1-lave a new policy : School bus contractors now can get backed by the government. l!R. DOODY: They have got contracts with roc. HR. ROBE::;.TS: - - -- Well now~ I will come ~o that. That is the second half. The minister said that this firm had two kinds of contracts, one was a school bus contract, which in this case, I believe, was given by the government directly. MR.·musE:: No! l!R. DOODY: No! NR. ROBERTS: No? By the board. Okay,so there is not even that. That is fine.

Now then the company also had a contract with the companies, the 1ron ore companies, to carry men back and forth to work. HR. DOODY: \fuich t!::J.ey 1vould have lost because - :1R. ROBERTS : Now1 is not that interesting, ~r. Chairman? First of all it says something about the credit rating of that company, forget any individuals, the company, that they could not get buses and interim and working capital on the strength of contracts with the Iron Ore Company and Wabush ~-lines.

And secondly, it says something about the gutlessness - if that is a parliamentary word - of a government that would allow these two companies that are doing so very 1.2D45

Jnne 14, 1977 Tape no. 4227 Page 7 - ms Mr. Roberts. well out of our Province to hold us up to this sort of ransom. We now have His Honour, Judge Bartlett of the district court holding hearings on questions relating to Quebec, workmen coming in and issues of that sort. Perhaps he should look into tl1is arrangement. These two companies, in effect, then said, Oh. 1ve ~rill give it to this man but if this man cannot get the financing, if he has not got the money, we will give it to a Quebec firm, and, :1.2046

June 14, 1977 Tape 4228 PK - 1 :·~ r. Roberts : in effect,blackmailed the government of this Province to come in to make a loan to the man or the company with the bus contract. It says volumes for the member for Menihek. soeaks volumes of the relations of the <~ay in which this government and this country is treated by these companies. I think it is outra~eous. The school bus one I can at least live with, prepared,as I am sure the minister is,to accept the f act that there will be many ~undreds noH.

But it is easier, I say to the ~ inister,"o justif y the school bus con tract, backing that one, than it is to justify backing the companies. I would have thought a contract of these ~NO companies would have been as good as money in the bank. They ~=e reputable companies. They are large co~anies. They are not fly-by-night operations. All you have to do is perform your services and you will get your money. I find i t hard to believe there is not a bank in the •mrld that would not lend money on the strength of that.

Indee~ I would be very interested in seeing letters or documentation from the ban k which surely was included in the request for the loan as supporting evidence. I ,;auld like to see a letter from a bank turning down advances on the secur i ty of that contract. "'R. DOODY : I am not sure how long these contracts are for. '-iR. ROBERTS : I do not know how long they were for. ~ rP.. DOODY : I mean, a one year contract I knm~ nothing about the whole situation. ~'R. DOODY: The b2nk " ould be hesitant if it is a one year ----- contract. ''!R. ROBERTS: You know, this is the sort of thing that makes our blood boil.

Now that brings up another question of course, how long was Habush Transportation in business? Has this another of these dan~y little companies that has been incorporated since, say , to take a date, 1 9 t~. of January, 1972? '· fl' !.JI)ODY : ~o,the y have be en - ''1'.. R0EERT'' :lou long- ".ave they l:>een in business? ----- :12C47 =

June ll., 2.977 Tape 4228 p~ - 2 Lonrrer than that. "!R. ROBERTS : ------- I mean, I do not know. I could go and loo~ it up in the Registry of Deeds. ~. ROUSSEAU: ---·--- They handled the school bus transportation when I Has principal there. lfll • ROBERTS : ------ ~<ow,okay, if they handled that, the !·!inister of - "hat is he? the Hinister of Public ~:arks these days, and Investigations, says that they handled the school bus contracts when C!e o:as principal of the Catholic school,I believe it was,in Habush, the Catholic half of - ''R. ROUSSEAU: Both Habush and Labrador City. ''R. ROBERTS: I am sorry? !'R.

ROUSSEAU: !loth Wabush and Labrador City. HR. ROBERTS: Both '·!abush and Labrador City. :'Tow if the como any was ab!e to get financing then without getting guarantees, how come they get guarantees nm<? You know, the more you get into this, ~·!r. Chairman, the more curious it becomes. I mean,just what is the full story on it? Do ~•e need another judical enquiry? You know. everything we rum to these days, Hr. Chairman, seems tc get more and more curious.

I say if the com!>anY has been in business for a ..rhile, and I accept that they have, and if they were able to finance their school buses before, how come all of a sudden in 1973,shortly after the government are in office,they need a guarantee to get school buses, nresumably to get new school buses, a company that had established track record? Nm< there is something ~rron!!: some~·here there ,is there net? There must be. It is bad enough if it were a new company just started up like the infamous A. B. Walsh f i = to take advantage of the changing political fortunes, and that is why ~.B.

Walsh Limited was founded, obviously it was. Hhether they did it properly or lawfully ~Jill be found out in due course by enquiries. But that is not the case here. Here is a company that was dning business for a whi!e, doing rrecisely this sort of husiness, taking contracts from school :1.2048 (

June 14, 1977 Tape 4228 PK - 3 "r. Roberts: boards and running children back and forth to school. Hell and good. And all of a sudden they need a guarantee? You know, there is something wrong somewhere there, ~lr. Chairman. There is something - and I do not think the !1fnister of Finance is withholding anything - but there is something that is being withheld from the Committee. He are not getting anything like the full story of •,;hy this guarantee »as asked for or why it Has made.

For the companies, why are ~Te in the business of a Province of financinp: Iron Company and '·!abush :unes. ~le could pass legislation banning a Quebec bus company coming in here, that could be done with a flick of a wrist, it would go through the House instantly, and any nonsense of any company saying if you do not finance this bus company '"e will give it to a Quebec firm should be met with the Premier of the Province saying definatively you try that and '-1e "ill legislate on it. And if they are foolish enough to defy that warning then hring a bill before the Rouse and you ••ill get unanimous support for it.

I mean the '"hole thing is tin-pot politics. It is pretty shoddy. Hhat is the truth? The Minister of Finance has told us what he knows. He do not have the full story. What is the truth? Why was this company given a guarantee? It gets more and more curious. It is like the whole A.B. Walsh thing where we started with a few innocent comments from the Auditor General.

And to :-tear the han. ~inister of Public Harks speak when he ~ade his statement after a month or so 1you would think it was really all quite straightforward, there was hardly anything to it. get into '·!e noT,; have ~•o judical investigations, and one police investigation into one firm's dealings of one kjnd or another with the government, and there is more to come. We are not anywhere near the bottom of that particular barrel of slime and sludge yet. So what is the story here? Bus companies all over the Province,contractors, take school board contracts and finance it on their own.

So that is unusual:He have one company favoured. Is it a ne~' company? 1.2U49

June 14, 1977 Tape .!c228 PK - 4 !1r. ?,ocerts: Is it having a little trobule getting started? No, it is a company that has been doing business. I did not know that. The gentleman from :-lenihek (i'!r. Rousseau) tells me it was. So v7hy then does that c~any get sin!J;led out? You know, it is very unusual. ~!y friend for Burgeo-Bay d'Espoir (Hr. Simmons) has administered sc~ool boards and has been involved; have you ever heard of the government guaranteeing a school bus contract? 'ffi. SI"lMONS: :'-!R. R0'3ERTS: I have heard of the government refusing to do it. Ah! Ha!

He has heard of the government refusing to do it. Sure. I am sure there is a •;hole room in Finance filled with files containing letters saying, Dear bus cornpany11-1e are sorry we are not able to accede to your request for a guarantee to enable you to finance your buses for the school bus contract with the ABC Board;you will have to do it on your own. But this one co~pany is singled out and favoured. 1!ov7 why? I think before tte Committee is asked to adopt this, to ratify it.::: I mean ••e are on the hook anyway, the Cabinet have made sure of that. The gentleman from Menihek (~!r.

Rousseau) three years ago made sure of that, four years ago. '1R. ROUSSEAU: HR. ROBERTS: ~1R. ROUSSEAU: No. Excuse me,if I may? Yes, sure you may. I can say to the hon. ~ember\because I thouzht that point might be raised, the hon. member was not involved in this. It '"as a straight business transaction. I •;as not aware of it. I was told about it after that an application had been made and that is the extent of it, and I can assure the hon. Leader of the Opposition that those are the true facts. ~-- ROBERTS: Nr. Chairman, I accept the gentleman's 1-1ord1 no question.

But I 1•70Uld point out that what he says is not right. He ,,•as involved in it. It '"as an Order-in-Council, and the hon. gentleman 1-'as a member of the Cabinet. . m RON. 'fE}1BER: '~. ROBERTS: l!o1he Has not • In 1973? 12050

June 14, 1977 Tape 4228 PK - 5 ~<R. ROUSSEAU: Yes, I ~~as. :m. ROBERTS: F.e certainly was. It ~Jas one of the few good things done by the government in 1973 . SOME RON. MEMBERS : Oh, oh! HR. ROBERTS: Yes,after the 1972 election the hon. gentleman was promoted to the r.abinet. ~ffi. DOODY : After Burgess was defeated. ~'R. ROUSSEAU: December 1972. MR. 'WBERTS: And it 1-1as one of the fe•<T "ise appoineants the Premier has made. ~ffi . ROUSSEAU: Insofar as being a member of the Cabinet,yes. '·'R.

ROBERTS: Yes, well ,I mean,that is the only - I am not suggesting the hon. gentleman ha:s a piece of \Vabush Transportation or anything else, I am not suggesting that. :·'R. ROUSSEAU: ~lor did I lobby on his behalf. : 1R. ROEf.P.TS : ------ ~o.I am not saying that he lobbild or did not ~ob<>y. I do not know what passes behind the Cabinet tvalls, I could not care less. All I know is that the Cabinet authorizej an Order-in- Council in 1973 and the minister t<Tas a member of that Cabinet and therefore is fully and completely responsible for everything the Cabinet does. XR. ROUSSEAU: Most certainly. ~ffi.

ROBERTS: ------- And the more we look at the company's jnvolvement the more curious it becomes. First of all He are told, oh well a very little innocent school bus contract, but it turns out that no other company in this Province,out of hundreds,has been so favoured. TI1at is an interesting point. AJ."' HON. l"ElillER: Yes, Sir. ~!R. ROBERTS : Secondly when we say, Oh \Jell 1 maybe :! t is a new company 1 we are told it is not a ne1<1 company. It is a company that has been doing business of this pcacise nature for a number of years. So that makes it even more curious that this one col!':pany is fr.vaurP.c',.

And then ,,,e are told ,Oh t<ell~ I Or. ~r.d ~,)abush 'Cine~ ere ~etting 1.2051.

June 14, 1977 Tane 4228 PK - 6 tough. And ~~hen you look at that ~ith all respect is pretty thin grule, pretty thin gruel indeed. To begin ~th a Quebec company cannot licence buses in this Province unless we licence them, and they are operating on public roads. · They are not operating only on mine roacs. And to finish ~rith,the writ of this Legislature still runs to roc and lJabush 'fines. They are not above the la~~. So the Hhole thing is curious. You kn01v, the ~1hole thing is very curious.

T\·.e fact that the princiTJal :.n the company apparently is a - or the apparent principal in the company 1 the man we are told is the principal, and I do not doubt he is, is a former P.C. candidate, certainly did not h•.:rt hi:> cause any !!!.ore ':han the fact that the farner P. C. candidate on Bell Island,l·'r. Fitzpatrick,•·ras given a Rural Development loan and vou know, so!".e otheli .. We could go on and on. So I think one of the ministers, ~ 1 r. Chairrnan,ought to l'e a little more forthcoming on this. It is curious. Apparently the Province has not lost any money as yet. The loan seems to be up to date.

It seems straightfo~ard. I l!lean,"hat is the truth on it. Can the papers be tabled? Can we be given a full explanation? There is obviously something not before the Rouse. This company has tleen favoured. being favoured 1 And I get very suspicious, Mr. Chairman, of companies very suspicious. And I think on the evidence that hco.s come before the Public Accounts Committee and the evidences that have been presented before judical enquiries to date, pttblic evidence, public hearings~: have every right to be suspicious, and so do the people of this Province.

And "e are going to go on questioninr: these things, because 12052

June 14,1977 Tape 4229 - ~orning AH-1 ~IR. ROBERTS: we feel that there is something rotten in the state of Denmark and the deeper 1~e get the more we find. So nerha!ls one of the ministers, ~4.Chairman. could explain. Before we ~ 0 on to talk about the Ralland one,I might say to my friend from Burgee-Bay d'F.spoir (Mr.Si~ons) the Minister of Finance auite candinly admitted that he was not in full possession of all the information. Really his colleague the gentleman from Grand Falls (~r. Lundrigan) would have to deal with it, but H- i" c·~tainJ v on en to some discussion.

And then there are a few other loans I would like to talk about in the Public Accounts. This is a good ,lace to talk about them because they were issued under the Loan and Guarantee Act, the authority of it,or a!lproved by the Loan and Guarantee Act. Perha!ls the gentleman from Yenihek ('Ar. Rousseau) or somebody could tell us a little more. mt. ROUSSEAU: ~. ROBERTS: I do not knm., the details. Well 1it is not good enough. Here are the government waltzing in and saying we have spent $200,000 of your money and we do not know anything about it.

And I get up and ask a few innocent questions and the more questions I ask the more it becomes obvious that there is something wrong. I am not sure what it is, it may just be incompetence but it may be more than that. You know, Mr. Chairman, it is not a joking matter now. Does ~our Honour realize there are three judicial investigations under way into this government at present?

Three judicial investigations into actions of the government or the public service,and in it one police investigation! \\Tell, two if you want to count the fisheries one, We have not touched on that one yet, We have not begun to get to the bottom of that particular unsavoury mess. So Your Honour will have to understand we are very tender, we are very much aware of the fact that the way this government are running things is not the right way, and so we ouestion everything and we question it with a suspicious mind. If I may say, Sir, that I think on the recorn 12053

June 14,1977 Tape 4229 - Morning AH-2 l1R. ROBERTS: we are justified in being suspicious. The whole A.B. Walsh thing seemed to be so innocuous in the Auditor General's report. And to hear the minister talk about it: He looked up and said, "Sure my friend has'1' the minister's first answers when we asked a few questions,"It all .seems straight forward." Well,I do not know what Mr. Justice Mahoney is going to find, I have no idea.

But I know what I suspect and I know that what has come out to date - you know, police in, the R01P have taken the books of the company, seized them, a big investigation going on, obviously there is something wrong. So we are suspicious of this one, we would like to have some more information. I do not know which minister is responsible. The gentleman from ~enihek (Mr.

Rousseau) says he know nothing about it, the Minister of Finance does not know very much more about it,and yet somebody must know about it These are reasonable ouestions, Sir. $200,000 is a lot of money, a lot of money, It is a fifth of what Alec Walsh or A. B. Walsh Ltd. gets in a year for work done without contract. It is probably as much almost as his profit. He makes about $300,000 profit a year on government business. That is the estimate I get from people in the trade 1 that it is worth about $300,000 a year cash in that company's pocket. It is a lot of money we are talking about.

I am not going to vote against it because it has been done anyway~but I do think the committee are entitled to some information, Sir, and so I ask the ministers to give us that information. If we get it then we will happily steam ahead~ If not, well~ Regatta Day is still two months away and there is no time limit on committee and I would like to have another go at it if we do not get some information. MR. SPEAKER: Han. Minister of Finance. MR. DOODY: Mr. Chairman, it is difficult to give information other than that which I have already put forward to the committee.

The Labrador City-Wabush area,as the han. members know9 is not an 12054

June 14,1977 Tape 4229 - Morning AH-3 1{R. DOODY: area in which there are that many comPetitive or - . competin!l groups who are in a position to get involved in this sort of business enterprise,and I thi~~ government quite nroperly did what could be done to see that this particular company - and indeed had it been some other particular company I have no doubt the same situation would have occured - was in a position to adequately take advantage of the opportunit~es that were there. Now it is quite clear, I suppose, that we could have lellislated Quebec companies out of the Province.

It sounds a bit hi!lh-handed and it does not sound like a very reasonable or sensible approach to me to a situation but,however,that may very well be a way to do it. I can assure hon.gentlemen that there was nothing underhanded or there was nothinll unusual about all this. As I say,the security for the loan is there, the loan is up to date, the interest has been paid, t~e $50,000 guarantee has been liouidated.

The wonder of this situation on this particular resolution, Your Honour, is not the fact that there is a company to zero in on: It is the fact that there are only two companies who are under guarantee by the Province at·this particular time-or at least under this particular bill. The hon. Leader of the Opposition, who says that there is undoubtedly a file down in the Department of Finance that is full of letters to the affect that,"Deer Mr. Bus Company, l1e regretfully decline to accept your invitation to guarantee your loan" is undoubtedly and absolutely without question correct.

And I would also say that there is a whole filing cabinet or a whole room down there that is full of letters to the affect that "Dear !1r. Comoany. The govermnent regretfully df'clines your invitation to guarantee your particular loan." Once again I suppose the sin that this gentleman has committed was not the fact that he was in business, was not the fact that he applied for and was successful in getting a guarantee, nor that he operated in the remote area of the Province called Wabush-Labrador City. I 12C55

June 14,1977 Tape 4229 - Morning AH-4 ~. DOODY: guess his sin is the sin of being an ex-candidate or a candidate, an unsuccessful candidate at tpat~of the PC administration, or the PC party. And I can understand the tenderness of members opposite, Obviously they lost the election and subsequent elections and appear to be on the same trail this time and if it is possible to muddy the waters and bring Wabush Transportation Company and ~r. 1-lalsh and whatnot into the business of this House under these circumstances so it be; obviously hon. members have every right so to do.

The company,as I stated,was in business before. If it had not been in business before it ~Jould have been condemned for having been set up subsequent to the election. Since it had been in business before it has been condemned for not having enough assets to adequately take advantage of a business opportunity that presented itself. If there is indeed, as has been suggested, the possibility of an irregularity,! just can say that that just is not so.

If hon.members in the Public Accounts Committee want to discuss that or any other particular loan or guarantee I am absolutely certain that the officials of the department will be only too haopy to answer their questions as they have in the past. I think that the co-operation of the Department of Finance and Treasury Board has been all that the committee have asked for and I can assure hon.members that it will continue to be. There is nothing in that loan and Guarantee Act that we are bringing forward; particularly as it applies to Wabush Transportation Company,for which this government feels any shame at all.

It was not a matter of guaranteeing a school bus contract. As I have said,this government, despitethe fact that ~r. Walsh is sunposed to be allegedly is being favoured for being a PC candidate and was given these advantages and privileges because of that fact,subsequently government refused to approve the school board's acceptance of the tender bid of that company. The comoany applied and was the only one who tendered because it is the only company up there in Wabush which can tender on the school bus contracts for the schools, and when the request for aoproval came into government .1Z056

June 14,1977 Tape 4229- ~rning AR-5 MR. DOODY: it was analysed, looked at,and we thought it was far in excess of ~~hat it should be compared to other bus ~ontracts which had been issued by the department. We contacted the company and told them that in our opinion we were being overcharged.

The company told us that they could not make money unless they could make a profit, could not reasonably ooerate unless they got these rates, so government said,'~ell we are very, very sorry about all that but we are just going to regretfully have to enable the school boards to set up their own bus system." And this is a deoarture,as han. members are aware,from the norm.

Now if this is favouritism , political favouritism when you take away from the only school bus operator in the area,who happens to have the mortal sin of having been a candidate for the PC party four or five years ago,you take away the principal oart of his contract and virtually out him out of business because we feel that he is overcharging the government, if that is political patronage and if that is political favouritism and if that ~2057

Ju!'le 14, 1977 Tape l.23n PK - 1 ~{r .___Q£o§__:_ smacks of •rrongdoing and evil goings on, well I am willing to defend that sort of ~~ongdoing from here to eternity. I would assume that had the gentleman been of the Liberal persuasion and Fe cancelled these school bus contracts we ~~auld have been accused of political bias down the other side of the field or putting the fellow out of "business because he "as a Liberal.

The reason 1.re took the school bus contract away from hin ~.ras for the sal!le reason that we helped him get his bus~ness on an operating and even keel in the f~rst place because we felt it 1vas in the best interest of the Province and the best interest of that particular part of the Province. There is absolutely nothing •rrong. Hon. members can keep looking under toad stools and turning over sods and looking under rocks, and eventually I suppose they are going to find sane snakes or some snails somewhere along _the line.

But I respectfully submit to the Committee t~~t they are not going to find them under this particular toad stool because there are none. This "as done in complete propriety. I have absolutely no hesitation in saying so. And if the hon. member wants to stay here until Regetta Day~as he says so 1 to discuss it 1well,that is fine with me. We can stay here on Regetta Day also because it is not one of my favourite sports. t ~ave never attended.

It seems to me of something of interest to a lot of people, but it certainly does not impress me very much, although I used to work on various little concessions down there, helping out various charities selling tickets and that, but I can willingly give that uo this year if hen. members ·t•ant to stay here and discuss this particu:ar loan, this particular guarantee. The point of the matter is that the Pabush Transportation Company is a legitimate company, operating under the laws of the Province. Their hooks are an open secret.

There is nothing about them except - there is nothing about them that is questionable except for the fact that we merely pvt him out of business when '"e cancelled their - when ue told the - not that t<"e cancelled, we just told the school boards up there that we t?ould not SU]:'ply them with the money 1ZG58

Jur.e 14, 1977 Tape 4230 PK- 2 MR. DOODY: that uas necessary to honour the tender that Xr. Halsh' s company had put in~that we felt it ~as excessive, and we worked out an arrangement with the ttm school boards I think in tl1e area to buy school buses of their own, to hire their own people and to put up a garage in •,rhich to keep the buses, which is very necessary up there, particularly in the \.;intertime ~1hen they have to be preheated and so on. And I say this is a perfectly legitL~ate operation, money as loans.

The SSO,OOO guarantee has been completely repaid except for the two arreas, the $11,200 moratorium on two payments 1-1hich were deferred, and t~hich tvill be subsequently paid; the loan is up to date, interest is up to date, everything is completely legal and above board except for the fact that Mr. Halsh was unfortunate enough to have run for the Conservative Party . in an election, and that appears to be the only irregularity in this particular instance. The Habush Transportation Company if it disappears and goes out of business I can only asstr ,e that somebody else ~o~ill start up.

I sincerely hope that does not happen. I know '·lr. Walsh. I think he is an admirable gentleman, and he has t.;orked very hard. He started tdth nothing, and he has worked his 1vay up to operating a good business, a business that he himself has put a lot of time and effort and ··•ark in to, and you know, I can wish him well. As I have said.that was a guarantee that was done in 1973. The number of guarantees that were issued in 1976 ·was one.

I do net reall y think that the hon. members in this Committee C2Il say that government has been anything but diligent in protecting the Province and the commitments of the Province in the issuing of guarantees, and I I·Tould respectfull:' suhmit =hat Guarantee and Loan Bill that was brought fortVard before this Committee was far in excess of anything that is in this particular bill. But if hon. members wish to make political hay out of it then, you know, by all means go to it. There is nothing we can do about that.

He are all aware of the fact that these by-elections are in effect, and ~~e cannot blame,I suppose, hon. members for doing the best they can ~·l ith a bad job. 1.ZV59 ,.

June 14, 1977 ~IR. CFAIR.MA~: !·!R. SD!MONS: Tape 4230 PK - 3 The han. member for Eurgo-Eay d'Espoir. :~r. Chairman, that statement fr= the ~!inister of Finance during the past fe~-r moments must be one of the more convincing that vre have heard in this Chamber in a long time, at the same time one of the more pious, and I say that kindly, one of the most heart-felt statements we ha,_•e heard :·,ere in this House in a long time. And listening to the minister we can have very little reason to doubt him, because he is so convincing, he is obviously baring his soul, he is obviously telling us exactly as it is.

And let me say, !<r. Chairt!lan, I believe he is. I not being tongue in cheek. I believe the minister is telling us exactly as he understands it. TI1e last time I heard a statement that convincing from a minister, :~r. Chairman, the last time I heard a statement that nious from the minister 1-1as on l·farch 10, ~~hen -the 'linister of Public Parks bared his soul on the subject of Public Works spenr1.ing. And like the minister today, the Hinister of Finance, so -on Harch 10 I believed with all that is in me that the Minister of Public Works told us everything he knew at that point in time.

I believe in both cases the ministers concerned have given us what they consider with the knowledge that they have at hand, within their co1!ll'land,to be full statements. Now I have made reference to the statement of March 10 only by t<ay of an analogy, only by way of example to draw an inference in relation to the present situation. It is one thing for the 'linister of Finance to tell us all he knows about the situation.

But as we found out following the statement of :1arch 10 by the !·(inister of Public Harks, as I told him on ~~arch 7l three days before he made the statement, as I advised him then to make a very full statement because there was more to it than meets the eye, I am tmndering if we have before us today another one of those situations? One of those Pandora's boxes, ~r. Chairman, where on the surface it looks all so hunky-dory, it looks all so sensible, it looks all so straightfon~ard. And •<hy, Hr. Chairman, ~;auld we in the Opposition latch on to this one this morning? :12ooo

June 14, 1977 Tape 4230 PK - 4 Yr . ~ imm.ons ! It is a fairly small amount of money. lJell, "e have heard the reasons from the Hinister of Finance. His reasons are two: First of all he said it is because we l>ant to muddy the waters. Well,whatever he means by that, to that I would respond, that what I want most, Mr.

Chairman, at this point in time is to expedite the business of the P.ouse, to have a few days talking about the budget speech which should have been called a long time ago, but if ue have to wait until the end of June or the first week in July to talk about it then I feel strongly enough about what is in that budget to take my time then to say what I have to say. So with that proviso, with that understanding, ~fr.

Chairman, I otherwise want to get out of here just as fast as I can beca·use I have some other things I ~>ant to do, and I have been here too long already, thanks to the way the government has so badly managed the introduction of its legislation. Uow the minister says I 1-~ant to muddy the Hater. I counter it out by saying mainly I <>ant to get this over and out of here. He says we want to make some political hay. Well, Mr. Chairman, that must be a new one. That must be a motive never before ascribed to any politican in !lewfoundland. Imagine a politican wanting to make political r.a7! Perhaps he is right, Mr.

Chairman, because perhaps with our ability to sniff out something, as 1-1e have demonstrco.ted, perhaps there is something here <ve can make some political hay on, perhaps there is. If so, I tell the minister we will make political hay. He will make no apologies to him for making it. But in addition, ~fr. Chairman, let me give the minister a couple of reasons of my mvn r,;rhy I believe there may be more to this than meets the eye. Reason number one~ to my knowledge, Hr. Chairman, this is the one and only bus company in this Province ever to receive a government guarantee for its borrolvings.

The one, the only bus company ever in this Province to receive a government guaranteed loan for its borrowings, as security for its borro<>ing programme. '<m•r, Mr. Chairman, I believe that is pretty significant. And you had to ask ,,,hy? 'Thy? 1ZG61.

June 14, 1977 Tape 4230 PK - 5 'fr. S iiP.!!lons: You particularly have to ask why when you realize that this contract or these contracts of this particular company were in some measure related to the transportation of school students. Because it calls to mind the particular dilemma that the thirty-five or forty school boards face across this Province, a dilemma that they have taken to the government ~any, nany years, ever since this government came in, Indeed in about 1972 or 1973 1.2062

June lt., 1'177 'Cape ''o. 4231 \~f - 1 ! met l?ith people at Cabinet level on beh?J.f of a school board to discuss a request, :rr. C:'lai=an that the government "auld guarantee the borrm.;rings of a l-oard who >•anted to provide sorn.e ac!c:litional ec:lucational t<>.cilities for their youn11;sters. You Hant to kno" Fhat the ans"er rJas? ~iell, the ~'inister of Education can tell us because he knol JS. '!.'hat hoard, the Green 3ay :loarc', li1<e every other l;oarc:l in this Urovince, '•'aS refused 30Vern~r.ent 2Uc.rantees for itS borrm,ing progral"l!' .e. ~·r. rhair~r.an, die you hear what I ha,Je just said?

Every board in this Province, because every 1-,oan1 ::as r~quested either directly or throu~h t~e school 1-,oart' federation, every hoard in this Province at one time or another in the past three or four :Jears has been refused bv this :;overnl!'ent a govern~ent bc>.c!dn?,, a governl:'.ent guarantee for their borrowir:1: progra!'!I"e to orovice eY.tra capital f!ici.lities. ~.nc ""v? 11ell, the reason "e rvere 7-iven, the reason those boards "ave been given is that if we c'l:l.d that it waul~ effect ,.(lversely the overall credit rating of the Province. ~·ow that makes a lot of good fin<mcial sense, ''r.

C'h<>iT.'l!'an. I can buy that. I can buy that. They refused t!le boart'.s in this ?rovince because it ~roulc:l effect adversely the financial credit, the long-tE~ borrowin~ capability of the Province. That is a very pood reason. But 1vhv does the government not be consistent about it? ''ThY are t".ey so inconsistent? ''hy all of li sudden ,;hen they have refused every board, and the "inister of Ec'.ucation '"ight pender this one 'Jecause if he had the po~1er to assure his rollec>.gues in 3c1ucatinn that there '·'ere guarantees available from ~overrment ltis joh "oulcl be a lot easier today.

But he Must have <1uite a conundrt.tT!t ltere today when he realizes that the sal'!e government that is roughing it up for him by not allowing hi!!!, not >ei,r:!.nf, ~il". the authority to sav to his colleagues across the Province, "'·!e uill 3ive o'OU the [:OVernrrte!lt ?'Uarantee) t:1ar.: same ~C"vernn-ent is doing it for o""te col'tpl'.nv up in '·'abnsr, Labrador and ore are supposed not to as1: