March 22,

1994 HOUSE OF ASSEMBLY

PROCEEDINGS

Vol. XLII No. 17

The House met at 2:00 p.m.

MR. SPEAKER (Dicks): Order, please!

On behalf of hon. members I would like to welcome to the

public galleries fifty-two students from Whitbourne Central High School, in the

district of Bellevue, accompanied by their teachers, Mr. Roy Gosse and Donald

Skinner.

SOME HON. MEMBERS: Hear, hear!

Statements by Ministers

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

DR. KITCHEN: Thank you, Mr. Speaker.

Mr. Speaker, I would like to take a few moments to

acknowledge that March is Nutrition Month in Canada.

The Department of Health places great emphasis on good

nutrition, largely because of its importance in preventative medicine. Recent

initiatives have emphasized the health benefits that can be realized from a

healthy and active lifestyle which includes appropriate diet. Public awareness

campaigns have made an effort to demonstrate to Newfoundlanders and Labradorians

that a healthy lifestyle will substantially reduce the risk of heart disease,

stroke, cancer and a number of other serious illnesses.

Mr. Speaker, in many cases, illnesses requiring extensive

medical treatment and hospitalization can be prevented by healthy living. In

keeping with government's goal of focusing on long-term solutions to health care

through preventative measures, we are establishing regional community health

boards across the Province whose mandate includes health promotion and illness

prevention.

Children, especially, have much to benefit from educational

campaigns. The Canadian and Newfoundland Dietetic Associations have recognized

the need to reach young people through education and awareness programs. The

theme of Nutrition Month is "Nourishing our Children's Future". The Newfoundland

Dietetic Association is working towards creating healthy eating habits that

contribute to the physical and emotional well-being of our children. The

Department of Health, in particular our Health Promotion Division, is committed

to working with the Newfoundland Dietetic Association to reach these common

goals, not only during Nutrition Month, but throughout the year. As parents,

teachers and citizens, it is our responsibility to emphasize the importance of

nutrition and to set an appropriate example for the Province's youth.

Mr. Speaker, I would like to extend my support to the efforts

of the Newfoundland Dietetic Association. As well, I encourage all

Newfoundlanders and Labradorians to recognize Nutrition Month and the importance

of disease prevention through maintaining a healthy lifestyle.

Thank you.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Placentia.

MR. CAREEN: Thank you, Mr. Speaker. In the absence of my

colleague for Ferryland who is the critic for health and on behalf of my

colleagues here today, I would like to extend support to the Newfoundland

Dietetic Association and their theme for the children but I wonder where the

minister has been, March is nearly over. I guess he has other priorities but

anyway they claim that the regional community health boards will promote this

but what I've been given about the community health boards is that they are

amalgamating across the island, their chief mandate is to save money. Also this

government's history over the past five years has been one of a force feed diet.

Force feed diet on the people of this Province on a diet of grits. Well today

I'm glad to hear that people are getting sick and tired of grits, Mr. Speaker,

getting tired of grits. They know the price of everything and the value of

nothing. Thank you.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Minister of Employment and

Labour Relations.

MR. GRIMES: Thank you, Mr. Speaker.

I rise to provide an update with respect to discussions

regarding the Income Supplementation Proposal that was publicly released on

December 14, 1993 and subsequently forwarded to the federal government for

consideration.

While there is no immediate prospect that the proposal in its

entirety as developed by the Economic Recovery Commission will be introduced

this year, the federal government has expressed considerable interest in the

concepts that form the foundation of the proposal (particularly the shift from

obvious disincentives to an incentive-based approach) and the federal government

has established with the Province a work plan consisting of 12 different

elements. Federal and provincial officials have been assigned to work on each of

these elements including technical components, implementation scenarios and cost

impacts.

The federal government has raised the idea of introducing the

education supplement component of the Income Supplementation Proposal as a pilot

project in our Province in the coming fiscal year. Discussions are in the

preliminary stages and a public update will be provided at the earliest

opportunity.

As well, the Province will participate fully in the overall

national social security reform agenda that the federal government is pursuing

over the next two years with a view to having some form of income

supplementation as a fundamental component of any future social security program

for the country.

The federal and provincial governments are also exploring the

possibility of joint parliamentary hearings in Newfoundland and Labrador as a

way of ensuring effective consultation with the people of this Province on both

the broad social security reform agenda and the Income Supplementation Proposal.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Kilbride.

MR. E. BYRNE: Thank you, Mr. Speaker. I am astounded

today that this government is completely and still considering the Income

Supplementation Program. The minister just announced that the federal government

is looking at this with considerable interest. I say to my colleagues in the

House I guess they are looking at it with considerable interest. In raising the

qualifying weeks of UI from ten, twelve to twenty, I guess they are looking at

it with some considerable interest. This program is an attack on seasonal

employment in this Province, is an attack on seasonal industries and if the

government pursues it they will encounter the same if not more of the violent

opposition they have incurred on Hydro.

SOME HON. MEMBERS: Hear, hear!

MR. E. BYRNE: And finally, Mr. Speaker, I'd like to say

that if this government plans federal hearings -

MR. SPEAKER: Order, please!

The hon. member's time has elapsed.

MR. J. BYRNE: - or provincial hearings, consultation is a

new concept to their mandate and their type of governing.

Thank you.

MR. SPEAKER: Does the hon. the Member for St. John's East

have leave to address the House?

SOME HON. MEMBERS: By leave.

MR. SPEAKER: The hon. the Member for St. John's East.

MR. HARRIS: Briefly, Mr. Speaker, I would just like to

say that I am also surprised that the government would be waving around this

Income Supplementation Program after the Federal Government has already taken

the hint, increased the amount of time available, required for unemployment

insurance, and the government's plans are to go further and require people to

work for a full twenty weeks before they are eligible at all. I think it is

going to get worse and we should stop this now.

SOME HON. MEMBERS: Hear, hear!

Oral Questions

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

MR. SIMMS: Mr. Speaker, I have a few direct questions I

would like to put to the Premier concerning privatization of Hydro.

I have heard him say on many occasions that a new

privately-owned Hydro would be good for the Province because it would be more

efficient and it would do a lot to revitalize the private sector. I want to ask

him: If that is true, why would new Hydro need massive tax breaks - tax breaks

that, in total, are ten times greater than all of the tax breaks you provided in

your Budget last Thursday to all the other businesses in the Province?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Hydro is not getting or would not be

getting a single tax break that every -

SOME HON. MEMBERS: Oh, oh!

PREMIER WELLS: Listen now. Hydro wouldn't be getting a

single tax break that every other business in this Province would not be

getting. They pay their full provincial income tax; they would be getting sent

back to them, the federal component of the income tax that the federal

government would rebate to us. That doesn't go to new Hydro. If that doesn't go

to new Hydro, then the electrical rates in the Province get increased by

precisely the same amount. It goes right to the cost of electricity just -

MR. WINDSOR: How about what you are selling to Light and

Power?

PREMIER WELLS: It is precisely the same as now, as far as

Hydro is concerned. They don't pay any tax now so they have nothing; no, they

don't need to collect any money to enable them to have money to pay taxes.

MR. WINDSOR: They would before.

PREMIER WELLS: They would before on a privatized basis

but the Federal Government pays 85 per cent back to the Province. The Province

is giving that back to the electrical industry so that the rates can be reduced

by precisely the same amount, so Hydro, as Hydro, is not getting a tax break, it

is the taxpayers of this Province. We could do it differently; we could pay it

in a different way. We could pay it as a direct subsidy if you wanted to towards

electrical rates. Any way you judge it, it goes solely to reduce the electrical

power rates, and to categorize it as a tax break for Hydro is totally incorrect.

MR. SPEAKER: Order, please!

A supplementary, the hon. the Leader of the Opposition.

MR. SIMMS: Mr. Speaker, that is simply fancy footwork and

nothing else. The Premier has just now admitted there is a tax break, not only

for the new Hydro company but also for his old friends at Fortis. That's what it

is, a tax break - call it what you want.

Now, I want to ask him this. If a privately-owned Hydro will

be so efficient and will revitalize the private sector, as he often claims, why

will new Hydro have to raise electricity rates 5 to 10 per cent over the next

five years for all customers, including other businesses? In other words, how

does he explain how a company that is supposed to revitalize the private sector

ends up adding to the cost of all other businesses in the Province? Can he

explain that?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: I am just making a couple of notes so that

I don't forget the matters he raised.

I emphasize again, there is no tax break for Hydro. The

shareholders of Hydro will not benefit one dollar from that, not one dollar. The

only people in this Province, or in this country, who will benefit from that

will be the rate payers, the hydroelectric rate payers. Now, for the Leader of

the Opposition to call that a tax break for Hydro is an atrocious

misrepresentation of the truth, Mr. Speaker.

His next question: if the privatized Hydro is going to be so

efficient as to revitalize the provincial economy. I never, ever said any such

thing and I don't want to allow the Leader of the Opposition to stand in his

place and make that allegation without challenging him. A privatized Hydro will

make a great contribution to the private sector economy, but it will not and

cannot, on its own, revitalize the Newfoundland economy, which is what the

Leader of the Opposition just said.

Hydro, itself, will not revitalize the Newfoundland economy.

What we are doing, all of the policies that we are implementing, including

privatization - at the express request of the people of this Province, we are

doing privatization. At the express request of the people of this Province, we

are proceeding with our total program of privatization.

MR. TOBIN: (Inaudible) Board of Trade (inaudible)!

PREMIER WELLS: Not just the Board of Trade - everybody

who appeared before the Advisory Council on the Economy in the consultation on

the Strategic Economic Plan.

SOME HON. MEMBERS: Oh, oh!

MS. VERGE: Why didn't you put it in your report?

MR. SPEAKER: Order, please!

PREMIER WELLS: Why didn't we put it in the report? Why

didn't you read the report? It is there. Why didn't you read the report? It is

there!

SOME HON. MEMBERS: Hear, hear!

PREMIER WELLS: Could you get it for me, it is on my desk.

I will have it sent down. With the consent of the House, Mr. Speaker, before the

end of Question Period, I will read precisely what they said.

Mr. Speaker, the next question was: if it is going to be so

efficient and so on, why is there a possibility of a rate increase of 5 per cent

or 10 per cent, or whatever he said. There is a possibility of a rate increase

based on the estimates. They are only estimates that have been put forward.

There is a possibility of a rate increase because we had the honesty to make the

estimates on the basis of assuming there would be no efficiencies, no

improvements and no job loss, that all of the costs that are there now would go

forward with no improvement whatsoever.

I have to say that frankly I don't believe there will be no

improvement whatsoever. I think there will be significant improvement. I hope

there will not be great job loss, and if there is job loss, I hope it will be

through attrition or early retirement. I also remind the House that the biggest

job losses in Canada, or some of the biggest job losses in Canada, have been in

Ontario Hydro and New Brunswick Power - two Crown corporations, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SIMMS: A supplementary, Mr. Speaker.

MR. SPEAKER: A supplementary, the hon. the Leader of the

Opposition.

MR. SIMMS: Mr. Speaker, I'm flabbergasted, and frankly,

I'm not surprised why the people of this Province don't believe the Premier any

more when he talks on this issue. You are totally misleading the people of the

Province and you know you are totally misleading them.

Let me ask him this question: If a privatized Hydro will do

so good to the economy as he has said, his ads have said on radio and everything

else - surely, he has heard his minister saying it here in the House and outside

the House - I want to ask him, how come this new Hydro company is going to get

the use of our water resources for nothing? Why can't they pay for the use of

our water? Can he answer that question?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, I don't believe I am hearing

what I am hearing. I don't believe that any person sitting in this House could

so misunderstand how the system works as to advocate that. If Hydro had to pay a

million dollars tomorrow for the use of water, who is going to provide the

million dollars? The rate payers.

Why don't we charge Newfoundland Power for it now? We aren't

charging them because we don't want to drive up the rates.

SOME HON. MEMBERS: (Inaudible).

MR. SPEAKER: Order, please!

One question at a time.

PREMIER WELLS: Mr. Speaker, that would be a matter that

would go directly to the rates - directly to the rates. If there was a million

dollars charged, there would be a million dollars collected, no more, no less -

no profit on it, or anything like that.

Mr. Speaker, while I am on my feet, the member asked what

about the report of ACE. Here it is. This is the report to the public. Let me

remind members of something else. The consultation paper prepared by the

government committee did not suggest privatization. You won't find it in the

consultation paper anywhere. It didn't originate with government; but here is

the report of the Advisory Council on the Economy, having had their sessions all

over this Province, in every sector of this Province, and they asked the people

what they wanted. When they reported back to government, here is what was said:

Item number 4, of the list of items this was the fourth one,

the goals, what ought to be the goals for the Province: Government should not

own or operate businesses.

MR. SPEAKER: Order, please!

I am having trouble hearing the hon. Premier.

PREMIER WELLS: Government should not own or operate

businesses, and should divest assets and activities to the private sector

wherever appropriate. There was a general consensus that government should not

be involved as operators of businesses, and that their involvement in existing

businesses should be phased out over time. Government, through appropriate and

prudent support, should encourage the private sector to be the engine of growth.

When that was received, Mr. Speaker, here is what the

government said. Here is my statement: I want to assure you -

MR. SPEAKER: Order, please!

PREMIER WELLS: Here is what I said to people. This will

only take ten seconds if they will just be quiet for it, Mr. Speaker. It will

only take ten seconds.

Here is my response at the time. I know they don't like

truth.

MR. SPEAKER: Order, please!

PREMIER WELLS: I want to assure you that your comments

have been heard -

MR. SPEAKER: Order, please!

PREMIER WELLS: - and to the fullest extent possible will

be incorporated in the Strategic Economic Plan.

MR. SPEAKER: Order, please!

PREMIER WELLS: Premier Clyde Wells gave that assurance.

MR. SPEAKER: Order, please!

The hon. the Member for Kilbride on a point of order.

SOME HON. MEMBERS: Hear, hear!

AN HON. MEMBER: (Inaudible).

MR. SPEAKER: Order, please!

The hon. the Member for Mount Pearl.

MR. WINDSOR: Mr. Speaker, I have a question for the

Minister of Mines and Energy.

Mr. Speaker, a number of days ago the Minister of Mines and

Energy confirmed that subsequent to the Opposition producing some documents that

apparently came from the Hydro Corporation, particularly dealing with the

contracts provided to Mr. Chalker's law firm, we have heard that as a result of

that security was tightened up. The minister confirmed that Hydro had tightened

up on security.

Mr. Speaker, we are hearing that security has indeed been

tremendously tightened up, and that in fact tremendous volumes of materials are

being shredded by Newfoundland and Labrador Hydro. Would the minister like to

confirm that volumes are being shredded, and would he like to tell us what the

great security risk is here.

MR. SPEAKER: The hon. the Minister of Mines and Energy.

DR. GIBBONS: Mr. Speaker, I have no idea how much or how

little might be getting shredded by Hydro or anybody else, not at all.

MR. SPEAKER: A supplementary, the hon. the Member for

Mount Pearl.

MR. WINDSOR: Mr. Speaker, if the hon. minister would

refer to the public tender exemptions tabled by the Minister of Works, Services

and Transportation, the exemptions to the Public Tender Act for January 1994,

page 20, he would find, under Newfoundland and Labrador Hydro the lease of one

cross-cut shredder; `Tender invitation not advisable shredder urgently required

due to security needs.' Would the minister like to tell us what is such an

emergency that we had to lease a shredder without going to public tender? What

great volumes of documents required this expensive shredder at $14,600, Mr.

Speaker, to lease a shredder?

MR. SPEAKER: The hon. the Minister of Mines and Energy.

AN HON. MEMBER: Like a barrel going down a hill, empty.

DR. GIBBONS: Yes, Mr. Speaker, I'm aware that Hydro has

leased a shredder for its executive offices, clearly it would have some

materials that it would need to shred and its shredding these materials, it's

very appropriate.

MR. SPEAKER: A final supplementary, the hon. the Member

for Mount Pearl.

MR. WINDSOR: Mr. Speaker, will the minister not confirm

that this is a deliberate breach of the Public Tender Act? That if there is no

great emergency then the corporation should have gone to public tender and if

there is such an emergency would the minister tell us what it is and stop trying

to cover up this breach of privacy here?

MR. SPEAKER: The hon. the Minister of Mines and Energy.

DR. GIBBONS: Mr. Speaker, there is no breach of the

Public Tender Act. What Hydro did was within the rules of the Public Tender Act.

It needed a shredder at the time, it obtained it and it obtained it by

appropriate means.

MR. WINDSOR: It is not appropriate at all.

MR. SPEAKER: Order, please!

The hon. the Member for Waterford - Kenmount.

MR. HODDER: Mr. Speaker, a question for the Minister of

Finance. Can the minister confirm that the tax administration branch of his

department has written school principals demanding payment of retail sales taxes

plus accumulated interest on chocolate bars and other items sold by kids to

raise funds to help the financing of their school programs?

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

MR. BAKER: Thank you, Mr. Speaker. That matter was

brought to my attention a few days ago and upon investigation I discovered that

there has been a problem with one distributor of such goods to charitable

organizations around the Province - one of the many distributors. There is a

problem with one of them and some notices have gone out to some of the

individual groups that have dealt with that one distributor. Mr. Speaker, I am

pleased to inform members of the House that I have since instructed my staff to

cease sending out such assessment notices and to notify the people who have

already received them that they are to be withdrawn. Within the next two or

three days, Mr. Speaker, I guarantee you that we will straighten out that

problem with that one distributor. So these have all been now withdrawn, Mr.

Speaker.

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

MR. W. MATTHEWS: Thank you very much, Mr. Speaker. I have

a question for the Premier. I understand that a good friend and supporter of the

Premier's, Mr. Norval Blair, has arranged a series of cocktail parties at his

home to raise funds to pay off the debt of the Liberal Party from the last

election. I wonder if the Premier could confirm that guests invited to Mr.

Blair's home are being asked to pay a minimum fee of $250 for admission to meet

the Premier and to drink cocktails with him? Can he confirm that for the House?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, we have, for a couple of

years, raised funds by that normal method. I guess it's something like the PC

luncheon's that they have and those kinds of things normally used to raise funds

or like the $200, $300, $500 or $1000 a plate dinners that the Conservative

Party has, like the $500 a plate dinners the Liberal Party has -

AN HON. MEMBER: (Inaudible).

PREMIER WELLS: Oh yes, I'm very much aware of them. You

do them for a variety of purposes to raise funds for the party. Yes, Mr.

Speaker, that method has been used and frankly I would think it would continue

to be used. It seems to me to be an eminently sensible approach. It's a good way

to have discussions with people, it's a good way to raise funds and it helps

contribute to the political process. I commend it to hon. members if they could

get anybody to go.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: A supplementary, the hon. the Opposition

House Leader.

MR. W. MATTHEWS: Thank you very much, Mr. Speaker.

Mr. Speaker, the investment brokers, the lawyers and the

bankers don't have the same reasons to come to our cocktail parties at $250 a

shot as they do going to the Premier's, I say to him.

SOME HON. MEMBERS: Hear, hear!

MR. W. MATTHEWS: Mr. Speaker, let me ask the Premier, in

light of the governments tax initiatives and my colleague from Mount Pearl just

raised an important issue, can the Premier inform the House whether or not those

funds, influence peddling monies, that are being raised at his friend's - Mr.

Blair's - home, will they be subject -

AN HON. MEMBER: Sit down, boy!

MR. SIMMS: Listen to the gorilla over there.

MR. W. MATTHEWS: Will these influence peddling monies

raised at Mr. Blair's house be subject to provincial tax?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, there are no influence

peddling funds raised at Mr. Blair's house. The hon. member's comments are....

AN HON. MEMBER: Offensive.

PREMIER WELLS: Yes, they are offensive, they are

insulting, they are dishonest in fact. He has no basis for saying any such

thing. To make those kinds of statements are totally incorrect, Mr. Speaker. The

question is not worthy of being dignified by an answer.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

Final supplementary, the hon. the Opposition House Leader.

MR. W. MATTHEWS: Mr. Speaker, I'm not having the $250

cocktail parties, I say to the Premier, he is, so I don't know why he is getting

so testy on the issue. I want to ask the Premier, who is attending those

cocktail parties? Are they lawyers, investment brokers, and bankers who are

paying a minimum of $250 to shake the Premier's hand? Will he table a list of

all companies and individuals in this House so we can see who is looking to

benefit from the golden handshakes with the Premier? Will he undertake to table

a list of companies and individuals who are paying a minimum of $250 a shot to

get the golden handshake from the Premier? Will he do that?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, I would go further and report

to the House that the full list of everybody in the Province who contributes

more than $100 to the Liberal Party will be listed and published for all to see.

The full and complete list. I hope the people opposite will do the same, because

that is what the law requires. I hope they do the same. Everybody!

SOME HON. MEMBERS: Hear, hear!

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

The hon. the Member for St. Mary's - The Capes.

MR. MANNING: Mr. Speaker, my questions today are for the

Minister of Environment and Lands. During recent questioning the minister has

stated that a study was done for her department that showed that 5 per cent of

the garbage in this Province is glass, soft drink bottles. I would like to ask

the minister if she would table this study in the House.

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

Lands.

MS. COWAN: Thank you, Mr. Speaker. It is not my study. It

was a study done by the Canadian Soft Drink Association, and whether or not they

would choose to make it available when we have a general announcement about our

anti-litter program I don't know. I can certainly ask them if it is appropriate.

It will be of course up to them whether they decide to release it or not. I

imagine that is the study that I was referring to.

MR. SPEAKER: The hon. the Member for St. Mary's - The

Capes.

MR. MANNING: Mr. Speaker, during the summer of 1991 a

high school in my District, namely Stella Maris in Trepassey, took the

initiative and carried out two different studies on roadside garbage. The

details of these studies I've forwarded to the minister today. These results

show that approximately 10 to 15 per cent of what they collected was glass soft

drink bottles. The minister seems to think we can't have returnable bottle

legislation and an education campaign at the same time. Why can't we have both?

Why, Minister, do we have to wait and continue to have our environment destroyed

with these bottles while with the stroke of a pen you could practically stop all

of this type of garbage from being discarded throughout the Province?

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

Lands.

MS. COWAN: Mr. Speaker, I have never said that the

education program and a deposit refund system could not go on together at the

same time. In fact, if this program that we are putting in place does not meet

certain quotas then that is what will happen. We will have a deposit refund

system and we will have an accompanying education program.

It is interesting to look - and I commend Stella Maris High

School for their study that they did. I was familiar with it. In fact I think

they might have received an environmental award, one of the awards that are

given out by the Province and the women's institutes of Newfoundland. I did some

quick figuring while I sat here - I didn't have time to get into percentages -

but I don't think the 15 per cent is quite accurate, but I don't want to be

guilty of what the Opposition is, of living in a fantasy world and fabricating

facts and percentages and so on when often they are not exact. I will take a

little more time and have a look at it.

What the study does show me is that there is a good deal more

litter in this world than aluminium cans, plastic soft drink bottles, and so on.

Just listen to some of this litter that they found now: car parts, pieces of

wood, pieces of cardboard, clothing - pants, gloves, shirts, sneakers, socks,

pieces of rope, oil cans, candy and bar wrappers, wire, broken glass. Am I going

to put a deposit refund on all this stuff? What else do we have here? - plastic

forks, diapers, Christmas decorations -

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

MS COWAN: I guess I have made my point. I hope I have

made my point.

MR. SPEAKER: The hon. the Member for St. Mary's - The

Capes, a final supplementary.

MR. MANNING: Madam Minister, when you do your

calculations you will find that 12.3 per cent of the garbage collected was soft

drink bottles. But, Mr. Speaker, of 126 million bottles of beer produced and

sold in Newfoundland every year, 97 per cent, 122 million bottles are returned

and refilled because of a bottle deposit and, along with saving the environment,

this regulation creates thousands of jobs. In the meantime, the 60 million

bottles and cans of soft drink sold in Newfoundland and Labrador annually are

producing a very minimal number of jobs but produce 100 per cent garbage. The

bottlers include Browning Harvey here in St. John's, and Coca-Cola, who now ship

in their garbage from a plant in New Brunswick. I ask the minister today, isn't

it time for this government to act decisively to clean up the mess and at the

same time create much-needed employment by bringing forward the returnable

bottle legislation promised during the election?

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

Lands.

MS. COWAN: My heavens, Mr. Speaker, that was a speech, I

think, instead of a question. It was very, very rhetorical and my answer can

simply be what it has been before, that we are aiming at cleaning up this

Province; we have already begun to clean it up, making marvellous progress with

our old vehicles, our derelict vehicles; they are coming in by the thousands and

providing employment and industry for two different companies, Mr. Speaker. And

I applaud the government for doing something which a lot of people said could

never be done, and is being done.

You can't go out on to the main highway now without passing

three or four tractor-trailer loads just of used vehicles - tattered, torn,

derelict vehicles, and that is a real, positive. Just on the road between here

and Clarenville, you can see that many, so we are on the way to cleaning up. The

ATV legislation - terrific! The litter - all these things that I read about,

diapers, the whole works, Sobeys bags, whatever else, we are aiming for, as I

said before, when spring comes, which is just around the corner, so you don't

have much longer to wait and we will be providing employment. Because, Mr.

Speaker, and I must emphasize this to the gentleman, the Member for St. Mary's -

The Capes, because we are going to be opening up recycling channels. This isn't

just simply a matter of going around and picking up garbage, I mean, you have to

do something with the garbage afterwards. Are we going to put it into our waste

disposal sites? No, we are not. I have been left by the former government with

the worst mess of garbage dumps in this Province and we are working towards

cleaning those up, too, Mr. Speaker, while we clean up the ditches and the

woodlands.

AN HON. MEMBER: Why (inaudible).

MR. SPEAKER: Order, please!

MS. COWAN: I think that you will live, Sir, to

congratulate us.

MR. SPEAKER: The hon. the Member for Menihek.

MR. A. SNOW: Thank you, Mr. Speaker.

My question is to the President of Treasury Board.

It appears that the government is headed for a public service

strike here in this Province. The President of Treasury Board keeps saying that

he wants a negotiated settlement through the collective bargaining process, but,

Mr. Speaker, in his Budget Speech, he says that he is going to be taking $50

million from the public sector compensation, one way or another, with or without

an agreement. If he has already made up his mind, Mr. Speaker, to take this $50

million, what is there to negotiate?

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

MR. BAKER: Mr. Speaker, our position as put before the

public sector unions is simply that we wish to achieve our objective without

either, an across-the-board reduction in take-home pay of public servants or -

and this is the significant part - or having to resort to layoffs to accomplish

our objectives. So we have asked the public sector unions to discuss

alternatives with us. We have done that by presenting an opening package to the

union leadership and initiating collective bargaining.

Right now, the unions he is referring to specifically, I

suppose, are NAPE and CUPE, which are in the process of taking their strike

votes, and, Mr. Speaker, after the strike votes have been taken, they have

indicated publicly that then they will be coming back to resume negotiations

with government.

Mr. Speaker, I will make the point once again, that I am

confident we can find a solution to this problem that is mutually acceptable for

two reasons. Number one, we understand the hardship that public servants have

gone through in the last three years, and, number two, we believe that the

public sector unions and their leadership understand the problems that

government is facing. I think with that kind of understanding, a solution can

ultimately be found.

MR. SPEAKER: The hon. the Member for Menihek, a

supplementary.

MR. A. SNOW: Mr. Speaker, the minister has confirmed what

he has said before publicly, that he is not prepared to negotiate the size of

the cut, he is just prepared to let the public service decide how the cut will

be done. He won't allow that, Mr. Speaker. In other words, public employees get

to decide which poison they have to swallow - that is the choice, Mr. Speaker.

Now, the minister knows that unions won't forever continue to cave in on these

issues. He knows that. Is he not deliberately setting out the strategy to force

a public sector union strike in this Province so that he can save his $50

million in that manner?

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

MR. BAKER: No, Mr. Speaker. I suppose, if we wanted to do

that, we could simply bring in legislation and cause an illegal strike in the

public sector. I suppose that is an option the government had open to it. No,

Mr. Speaker, we do not want to see a strike in the public sector of this

Province - we do not want to see our schools closed; we do not want to see our

hospitals and nursing homes closed. It is the last thing in the world we want to

see, and that, of course, is the ultimate weapon that is at the hands of the

public servants of this Province.

MR. SPEAKER: A final supplementary, the hon. the Member

for Menihek.

MR. A. SNOW: Mr. Speaker, the people of this Province

know that this is not a government that negotiates, it legislates. They are very

aware of that. Could he tell this House and the people of this Province what his

time line is on this, or will this government introduce legislation to freeze

public sector wages for the fourth year in a row, to reduce the wages? Is that

what their plan is? What will they do, and when will they do it, Mr. Speaker?

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

MR. BAKER: Thank you, Mr. Speaker. There are a number of

issues raised - first of all, his comment that this government simply legislates

and doesn't negotiate. I remind hon. members that last year we signed agreements

with every single one of our unions through a collective bargaining process and

that process, I hope, will work again this year. It is not our intention to

legislate. We want to make the process work and we still hope that it will work.

Hon. members should understand the collective bargaining process, and the fact

that it is a confrontational type of process that all of us, perhaps, wish did

not exist, and all of us, perhaps, wish there were a different process in place.

But it is a confrontational process and we hope that the results will be

positive for everybody.

MR. SPEAKER: Question Period has elapsed.

Petitions

MR. SPEAKER: The hon. the Member for Menihek.

MR. A. SNOW: Thank you, Mr. Speaker.

Mr. Speaker, I am pleased to have the opportunity of

presenting a petition on behalf of 1,437 residents of the towns of Labrador City

and Wabush, the towns comprising my district of Menihek.

The prayer of the petition, that these 1,437 people have

signed, is addressed to the House of Assembly, and I ask the House of Assembly

to accept the following prayer:

`Wherefore your petitioners urge the Government of

Newfoundland and Labrador to stop immediately the privatization of Newfoundland

Hydro, and to hold a referendum to ask the people of the Province their views as

to whether Newfoundland Hydro should be privatized or remain a Crown

corporation.'

Mr. Speaker, many, many volunteers have, in the last few days

in my district, after the Premier was in there last week and spoke - he met some

of the demonstrators who are concerned about this, and he is very aware of their

concerns up there, and these people are signing this petition. While I have

1,450 names here on this petition, there are probably another 1,500 or 2,000 on

their way to me in the mail, or through a package coming down on the airlines.

They are concerned because of the tremendous increases that

they face in Hydro and, of course, the fact that we, as people living in Western

Labrador, are facing huge increases in the cost, since we consume more because

of the nature of our geography and our climate.

They would like more consultation; what they want, before

this is passed in the House of Assembly, is to have public input. They don't

feel that a process of radio advertising or slick media advertising is the

answer to consultation. That's not consultation, Mr. Speaker. That is not

consultation, and that is what they want. They want meaningful input into

whether or not this should be, whether or not Newfoundland Hydro should be

privatized or sold. That is what they want, because they have a direct concern.

There have been suggestions from some of the ministers that

the people of this Province don't own this company. Well, they do. One of the

ministers is supposed to have said that the people of this Province don't own

Newfoundland Hydro, the government does. Now, Mr. Speaker, everybody in this

Province recognizes that the people of this Province own a Crown corporation.

The Cabinet dictates a public policy purpose, and the government, of Crown

corporations, but the people truly own it, and it was established for a very

good reason, and the people of this Province, specifically the people in my

district, have a concern that it should not be privatized, number one, and that

may be a very firm mind-set today, but they say in the prayer of this petition

they specifically want to have the consultation, and for the government to stop

the process now. That is what they say, because they want the government, before

we rush into this decision, they want to be convinced it is the proper decision.

It isn't much different from a husband and wife making a

decision to buy or sell a house or a car, a very large expenditure, probably the

two largest expenditures most families make in their lifetime, to have

consultation with each other, and their family, to decide whether or not they

should buy or sell their home. One just doesn't rush out and sell it and say,

trust me; it's in our best interest. You usually consult with your partners,

your wife and your children, and you get the agreement of your wife and your

children. Then you may decide to sell your home and move up or move down

depending on what is being dictated by finances.

Mr. Speaker, the people in my district, I would say, are

saying the very same thing that thousands of other people in the other fifty-one

districts in this Province are saying. It isn't any different in my district

from the way it is in your district. The ordinary Newfoundlanders and

Labradorians have a very, very heavy concern about the sale of Newfoundland and

Labrador Hydro. They specifically want more consultation, public input, and they

want the government to put this on hold, and they say this in the prayer.

I wholeheartedly support the prayer of this petition, and I

ask that the people in this House would support it, and anybody speaking to it.

Thank you.

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, I'm sort of happy to have an

opportunity to make a few comments on the response I found in Labrador West, in

the hon. member's district.

They told me of their concerns. They said: `Our member told

us we are going to lose all control of Hydro, we are going to lose the right to

develop the Churchill River, our costs are going to go through the roof because

of this' - a whole lot of other such nonsense. I said: `That isn't so.' They

asked: `Well, what is the real situation?' So I spelled out to them exactly the

real situation - I don't need to take the time of the House today to do it - all

of the things I've dealt with in the past.

They said: `Well, that is quite different - we think you

should get on with privatization.' Many of the people I spoke to said: `If we

had known that, we would never have made any complaint.' I asked: `Well, why

didn't you know that?' They said: `Well, the only thing we got is what our

member gave us or what we heard -

MR. TOBIN: Oh, oh!

PREMIER WELLS: `The only thing we got' - they hadn't had

it at that time. As a matter of fact, they got it the day after I was there, or

the day I was there, I've forgotten which. `The only thing we got is whatever we

got from CBC or our member. We don't get NTV.' I told them about the program I

had done with NTV that explained the government's position. They said: `We don't

get NTV. We don't hear the government side of it, or we didn't hear the

government view of it.'

I spoke with the Chamber of Commerce, I spoke with groups of

Liberals, I spoke with officials from - groups of workers in Labrador City. I'm

just trying to remember what other groups I spoke to now while I was there in

about a day-and-a-half period, a little over a day. I spoke to the town council

AN HON. MEMBER: They are against it.

PREMIER WELLS: I know, they are against it on the basis

of the information they had. Unfortunately, there were some other things that we

had to talk about. In the brief period the next morning that I had to speak with

the town council I didn't have time to go into the detail, but I did indicate to

them some of the totally wrong information that they've been getting.

One of the big concerns that I encountered was the impact on

the rates. People of Labrador West are quite concerned about the impact on the

hydroelectric rates. I explained to them what the impact could be solely because

of privatization and said: You weigh that against what the benefits to the

people of the Province were and come to your conclusion on that basis.

What I did say to them is it doesn't matter whether there is

privatization or not. There is likely to be some significant increase - I don't

know when it could be implemented or when it might be implemented or how long a

period it might be phased in over or what - but there is likely to be a

significant increase in the domestic electric rates in parts of Labrador. I

explained to them why. Everybody else in the Province is contributing to the

cost of subsidizing the diesel areas. They aren't doing that in Labrador, even

though much of the diesel is in Labrador. Even though much of the diesel is

there.

The simple fact is, in Labrador West the rates that are

charged for most people, most residents of Labrador West, average out to about

15 mils. In Goose Bay, Central Labrador area, it averages about 30 mils. How can

we justify that difference? How can we really justify treating the people of

Goose Bay in a manner so totally different from the Menihek district? You really

can't do that. Now, either we should drop the rates in Goose Bay to be the same

as Labrador West or we should cause them to be levelled somehow to be fair to

people. You have to treat people fairly. The people in the Island part of the

Province, on average, for residential use, pay about 75 mils. How can we justify

that kind of disparity where it is 75 mils in, say, Bonne Bay, but it is 30 mils

in Goose Bay, and it is 15 mils in Labrador City? Is that what the people of

this Province should do?

I told the people with whom I was speaking, there is going to

be a hearing dealing with this whole issue. The matter will be discussed through

the Public Utilities Board dealing with this whole issue and they will decide

what the adjustment should be. They will hear all sides of the argument and try

to come to a fair and balanced decision that will treat everybody with fairness.

I have every confidence, Mr. Speaker, that the Public Utilities Board can

supervise that kind of a hearing and cause it to happen.

As soon as I explained the full situation to the people of

Labrador, they had a far better understanding and I got a lot of expressions of

support for the position, Mr. Speaker.

MR. SPEAKER: The hon. the Member for Burin - Placentia

West.

MR. TOBIN: Thank you very much, Mr. Speaker.

The Premier gets up, Mr. Speaker, and tries to convince the

House that everybody in Labrador West now supports privatization.

PREMIER WELLS: That's not so, as far as I know.

MR. SIMMS: What?

PREMIER WELLS: I don't think everybody in Labrador West

(inaudible).

MR. W. MATTHEWS: No, 99 per cent are against it.

MR. TOBIN: I can assure the Premier, the people of

Labrador West, like the people of Burin - Placentia West and every other place

in this Province, Mr. Speaker, don't support it.

The fact of the matter is, the Premier introduced the piece

of legislation in this House and ran away for five out of the eight days and

wouldn't come to the House to defend his legislation. Mr. Speaker, his ministers

weren't able to do it and he left it to the agents with the St. John's Board of

Trade to try to explain it, that's what's happening here, Mr. Speaker. The

Premier of this Province, who thought that this bill was powerful enough that he

wouldn't put it in the name of his Minister of Energy, he put it in the name of

the Premier - what did he do, Mr. Speaker? He packed his bags and got on the

first flight leaving St. John's after he introduced the piece of legislation.

Why did he do that if he's so comfortable with it? Very simple, Mr. Speaker,

because he couldn't defend the indefensible, that's why he did it, and his

ministers couldn't do it.

Ninety per cent of the people in Newfoundland and Labrador

are against it, Mr. Speaker, except the crowd who are going to benefit, the

clique that are going to benefit from this, the money bags of St. John's, in

particular.

AN HON. MEMBER: (Inaudible).

MR. TOBIN: There are a lot of people who can't get

involved in it, Mr. Speaker. The crowd who can afford to go to a $250-a-drink,

that's the crowd, Mr. Speaker.

AN HON. MEMBER: (Inaudible).

MR. TOBIN: I don't know about the Member for St. John's

South, Mr. Speaker, but I know a lot of people who can't pay $250 for a drink.

Probably he can, Mr. Speaker

MR. SPEAKER: Order, please!

MR. TOBIN: - probably he can, but a lot of people can't -

that's who is interested in the privatization of Newfoundland and Labrador Hydro

SOME HON. MEMBERS: Hear, hear!

MR. TOBIN: - the crowd who can spend $250 a shot to shake

the Premier's hand, that's the disgrace that's taking place in this Province.

Then you get the Board of Trade out preaching the signs, word for word of what

comes from the eighth floor in this building is what the St. John's Board of

Trade is preaching. Mr. Speaker, the St. John's Board of Trade are not the

people who are concerned if their light bill goes up by four or five dollars a

month, I can assure you that. But the men and women in this Province who are out

trying to make a dollar, Mr. Speaker, despite the fact that this government is

trying to drive it up to twenty weeks to qualify for U.I., those are the people

who are going to have a job to put bread and butter on the table.

The $250-a-drink people, Mr. Speaker, are not concerned about

the cost of the electric bill, but a lot of them are concerned about the profit

they are going to make, Mr. Speaker, a lot of them are concerned about how they

are going to pad their pockets, how they are going to skim off the cream from

the sale of Newfoundland and Labrador Hydro. That's the crowd who are concerned

about this, I say to the members opposite. I say to the Member for St. John's

South as well, the crowd who can afford to pay $250 a shot, Mr. Speaker, are

more concerned about the cream of Newfoundland and Labrador Hydro then they are

concerned about the increase in electric bills.

MR. SIMMS: That's who will buy the shares.

MR. TOBIN: That's what I mean, they are going to skim off

the cream, they are going to buy the shares. But I can tell you, Mr. Speaker,

there are a lot of people in this Province who cannot afford to buy shares. It

is the biggest scam, and nothing, Mr. Speaker, has smelled more like corruption

in my days in politics - nothing, Mr. Speaker, nothing.

MR. CRANE: I tell you one thing, you've seen a lot of

that.

MR. TOBIN: What's that?

MR. CRANE: I said you've seen a lot of that.

MR. W. MATTHEWS: Yes, he's looking at it now.

MR. TOBIN: Mr. Speaker, I say to the Member for Harbour

Grace, when I sit down, you can take your place and get involved in the debate.

You can take your place and get up, I say to the Member for Harbour Grace.

But there is something wrong, Mr. Speaker - this smells. I

say to members opposite, go to your districts and have public hearings, let the

people have input into something as important as selling off a public utility.

MR. MURPHY: (Inaudible).

MR. TOBIN: The Member for St. John's South, Mr. Speaker,

doesn't support the privatization of the St. John's dockyard. The Member for St.

John's South doesn't have the courage to take a position on privatizing the St.

John's dockyard, yet he is out advocating the privatization of a public utility

company.

MR. SPEAKER: Order, please!

The hon. member's time has elapsed.

MR. MURPHY: A point of order, Mr. Speaker.

MR. SPEAKER: A point of order, the hon. the Member for

St. John's South.

MR. MURPHY: Mr. Speaker, let me say to the hon. the

Member for Burin - Placentia West that the Newfoundland dockyard is better off

in the hands of where it is right now and I advocate that. Let me say to the

Member for Burin - Placentia West that when they offered Marystown for $1.00

they couldn't get a buyer, and now there is $150 million worth of contracts down

there, thanks to the Minister of Industry, Trade and Technology. Why don't you

smarten up, boy?

MR. SPEAKER: There is no point of order.

MR. TOBIN: Mr. Speaker, quite clearly there is no point

of order in what the member had to say. One thing is clear, Mr. Speaker, that

the member cannot have it both ways. He cannot speak out of both sides of his

mouth at the same time. He cannot say privatize the public utility but don't

privatize the St. John's dockyard. You can't have it both ways.

MR. SPEAKER: Order, please!

The hon. member is not speaking to a point of order, I think

he is continuing with some of his remarks on the petition.

The hon. the Member for St. John's East.

MR. HARRIS: Thank you, Mr. Speaker.

I rise to present a petition on behalf of 250 residents of

St. John's, Harbour Grace, Carbonear, Heart's Delight, and Clarenville in the

district of Trinity North.

These petitioners, Mr. Speaker, are opposed to the

privatization of Hydro. They believe that the sale of Newfoundland and Labrador

Hydro has not been proven to be in the best interest of the citizens of the

Province and they say that the production of electricity is an essential

service. Now, Mr. Speaker, this came to the point that the Premier was trying to

flummox the people of this Province with today. It is part of the disinformation

program that the government has been carrying out from the beginning. What the

Premier is trying to convince members of this House of, and perhaps he is trying

to convince his own backbenchers, is that the sale and privatization of

Newfoundland and Labrador Hydro is somehow contained in the Strategic Economic

Plan asked for by the people of Newfoundland and Labrador, and Mr. Speaker,

nothing could be further from the truth. If that were so, why is it that the

overwhelming majority of people in this Province, all over this Province, are

opposed to the sale of Newfoundland and Labrador Hydro?

Now, I see the Member for Trinity North shaking his head. I

say to the Member for Trinity North that people from all walks of life, from all

political parties, even die-hard Liberals, are opposed to this plan to sell

Newfoundland and Labrador Hydro. If the Premier and if the government is so

convinced that the people of Newfoundland support this well, why don't they have

public hearings across the Province to explain to people and let people have

their say? - ask them: is that what you meant when you said, we don't want the

government in business? Do you consider the generation and the distribution of

electricity an essential service, a monopoly? Is that the kind of business we

were talking about, or is it something else? Mr. Speaker, I think you will find

that the people of this Province consider Newfoundland and Labrador Hydro in a

very different light than they would consider the government being involved in

some sort of private enterprise that was making money and competing with the

private sector. The production, generation, and distribution of electricity is a

monopoly in this country. It is a monopoly and has been a monopoly since the

utilities have developed. They are regarded as public utilities and are

considered in a very different light from other types of enterprises.

Now, Mr. Speaker, the Premier may do everything he can to try

to convince the people that this is what was contained in the strategic plan but

that is not the case. As a matter of fact, when asked specifically - and I do

not know if this was before or after the Member for St. John's South was putting

up the trial balloon last spring, I know it was before the election - the

Premier denied that the sale of Newfoundland and Labrador Hydro was a part of

the government's plan. `It was wild speculation,' said the Premier, back in the

spring before the election. Now, Mr. Speaker, within a matter of months after

the election we have been faced with a decision on the part of the government to

get rid of Newfoundland and Labrador Hydro, one way or the other. The first

effort failed and now we are at phase two.

Mr. Speaker, if the government is so convinced of the

rightness of the cause, then why doesn't it have public hearings which are being

demanded across this Province? Why is he now moving into an attempt to salvage

this public relations disaster that they have created? Why is he doing that now,

instead of saying: Well, let's wait and we will consult widely with the people

of Newfoundland, and we will make a decision after that.

Mr. Speaker, these petitioners, along with the thousands of

people across this Province who have signed petitions, say that they want to

demand the Government of Newfoundland and Labrador not to privatize and sell

Newfoundland and Labrador Hydro, and to ensure that Newfoundland and Labrador

Hydro remains a Crown corporation.

Thank you, Mr. Speaker.

MR. SPEAKER: The hon. the Member for Menihek.

MR. A. SNOW: Mr. Speaker, I am pleased to have the

opportunity to rise and speak in favour of this petition that was so ably and

capably presented by my colleague from St. John's East.

AN HON. MEMBER: (Inaudible).

MR. A. SNOW: Probably, Mr. Speaker, but that's not what

we are talking about, the next election, what we are talking about is the

sell-out of one of the best resources we have in this Province, a company, a

Crown corporation, that has often been referred to as a 'crown jewel', Mr.

Speaker.

The people who signed this petition have asked that this sale

not proceed. That is in the prayer of the petition. They want to be consulted.

Now consultation used to be, in eighty-nine, a byword of this government, it was

a buzz-word, until they got elected. Then there was no more consultation.

Today they feel that the consultation process is going to

occur through an avalanche of slick ads, a slick advertising campaign, that is

going to be undergone in this Province. Slick advertising is not going to make

this a good deal for the people of this Province. It will not. It is snake oil,

and that is it.

AN HON. MEMBER: It is not snake oil.

MR. A. SNOW: It is snake oil; that is exactly what it is.

Mr. Speaker, the three slick ads they are talking about here,

they are saying municipalities are going to benefit by $1 million three years

hence in extra taxes, $1 million to all the municipalities in this Province in

extra municipal revenue. What they fail to mention is that the rates are going

to go up on the street lights. The Town of Wabush will have to pay 30 to 40 per

cent higher for electricity for the street lights.

AN HON. MEMBER: (Inaudible).

MR. A. SNOW: The hon. the Minister of Finance, the

President of Treasury Board, is suggesting that I have emptied the galleries.

Well maybe I have, Mr. Speaker, but I was also elected to come in here and speak

up for the people of Western Labrador, and I am speaking up for the people who

signed this petition who couldn't come here. They would stay. The 250 people who

signed this petition, if they were in the gallery, they would stay and listen.

Slick ads is not going to make this work. It is not going to

make it a good deal for the Province, simply put, because it is not a good deal

for this Province. They say in the slick ads, they also mention that this is

going to strengthen the economy by privatizing. How does it strengthen the

economy by taking money out of the pockets of people living in this Province and

sending it off to Shaughnessy, or sending it off to Westmount or Richmond Hill,

because that is what happens. The people who are going to buy this are going to

be looking for their dividends, paid in spades, in Shaughnessy, or in Richmond

Hill, or in Westmount. That is who is going to get the profits out of this.

They also talk about the private sector being strengthened.

How can that strengthen the economy in the private sector, when the very people

who pay these profits, pay the dividends, are going to be small businesses, too.

The small business operators in this Province are going to pay more. The person

who owns a store down on Water Street will pay more for electricity. The person

who owns a store in Labrador City will pay more for electricity. How does that

strengthen the economy, by removing money from a business, who has to charge

more to get a return on his or her investment; so what do they do? They charge

more to the consumer; the consumer pays more for the product. That removes

disposable income from individuals, apart from the fact that they have to pay

more for the goods and services they will be getting, and for their own

electricity in their own homes.

In this slick advertising they talk about how this is going

to improve the debt of this Province. It is going to remove the debt and thus

improve the credit rating in this Province. It is not. It has absolutely nothing

to do with the debt, no matter how slick their ads are. I don't believe that the

people are going to buy it. Now, Mr. Speaker, they won't buy it because it is,

as I suggested earlier, it is not true and it is not just my saying it, it is

the people who established the credit rating in this Province, have said it time

and time again, that privatization of Newfoundland Hydro will have nothing

whatsoever to do with affecting the credit rating of this Province, so the slick

ads, Mr. Speaker, are misstatements, they are untruths, and they are not going

to work into making this a good deal because it is a bad deal, and the people of

this Province are sick and tired of cooked-up deals that harm the Province down

the road and they won't put up with it anymore.

Thank you, Mr. Speaker.

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

MR. BAKER: Mr. Speaker, any further petitions?

MR. SPEAKER: I think that's it; yes. The hon. the

Minister of Finance.

MR. BAKER: Mr. Speaker, I have received a message from

His Honour, The Lieutenant-Governor.

SERGEANT-AT-ARMS: All rise.

MR. SPEAKER: The message is to the hon. the Minister of

Finance, it is dated March 1, 1994:

I, the Lieutenant-Governor of the Province of Newfoundland,

transmit Estimates required for the Public Service of the Province for the year

ending March 31, 1995. By way of Interim Supply and in accordance with the

provisions of the Constitution Act, 1867, I recommend these estimates to the

House of Assembly.

Sgd.:______________________________

Frederick A. Russell, Lieutenant-Governor.

MR. BAKER: Mr. Speaker, I move that the message together

with the bill be referred to Committee of Supply.

On motion, that the House resolve itself into Committee of

the Whole on Interim Supply, Mr. Speaker left the Chair.

Committee of the Whole on Interim Supply

MR. CHAIRMAN (L. Snow): Order, please!

The hon. the Minister of Finance.

MR. BAKER: Thank you, Mr. Chairman.

This is the normal Interim Supply bill that government brings

in every year. The function of the Interim Supply bill, as all members know, is

to provide funding for government for the period of time when the Budget is

being debated and before the Budget is passed in this House.

This year we are asking for the usual three months supply.

Last year, Mr. Chairman, the amount was over $1 billion, this year it is

slightly under, it is $996,691,800 and that should do us, Mr. Speaker, for the

next three months.

Normally, Interim Supply is intended to provide the

continuation of ongoing government programs and only the continuation of ongoing

government programs. It is not normally intended to fund new projects, however,

Mr. Chairman, it is possible for the bill to authorize new capital account and

current account expenditures if such items are spelled out for the House of

Assembly and I would like to start debate on this bill, Mr. Chairman, by

spelling out the new current account and capital account expenditures that this

bill would authorize.

This bill would authorize spending for the Federal-Provincial

Road-Bridge program of $45,900,000. It would authorize a provincial road-bridge

program of $18,500,000; it would authorize new expenditure for the

Canada-Newfoundland Infrastructure Program of $35 million and the new

expenditure for the John Cabot 500th anniversary celebrations of $1,145,100 for

a total new expenditure, Mr. Chairman, of $100,545,000, so, Mr. Chairman, this

in general is what the bill is about and I look forward to comments both from

members opposite and from members on this side of the House.

MR. CHAIRMAN: The hon. the Member for Mount Pearl.

MR. WINDSOR: Just a short break. I will take up from

where I was so rudely interrupted late last night and carry on from there I

suppose.

AN HON. MEMBER: Oh, you weren't rudely interrupted

(inaudible).

MR. WINDSOR: No, that's true.

Mr. Chairman, there are a few things I would like to pursue

with the minister, since some new information that has come to light since last

night, I say to the Minister of Finance. If he is alive and well and listening.

I'm told that the minister has advised veterinarians - I

don't know if the minister is listening, or who he is listening to. I'm advised

that the minister has told the veterinarian profession that first of all

veterinary services are taxable under the retail sales tax act. I must confess I

wasn't aware of that, but it appears from - maybe the minister could confirm

this for me.

MR. BAKER: Oh, sorry.

MR. WINDSOR: I can wait till the House Leader is finished

chatting there with him.

SOME HON. MEMBERS: Oh, oh!

MR. WINDSOR: Thank you. I hate to interrupt the hon.

gentlemen opposite, Mr. Chairman. There we are. Let's get back to the minister.

I'm advised that veterinary services are taxable. Maybe the minister could tell

me, is this something new, or how long that has been in the act? It really

catches me off guard that professional service, medical service to animals, is

any different than services of a doctor or a dentist to others, yet I'm told

that is a taxable service. Does the minister want to respond to that?

MR. CHAIRMAN: The hon. the Minister of Finance.

MR. BAKER: If I can remember correctly off the top of my

head, a pet is considered as property, and the services on a pet, even though it

is alive, are not considered the same as services done on a human. It is

considered under the law to be property, real property, and therefore services

to real property are taxable under the regulations. This is something that has

always existed and the vets have been aware of it for a number of years, but I

don't think the law has been enforced.

The other side of that is that things like the pet food and

so on that some veterinarians provide for pets, that also is taxable, because

that is in competition with other pet food stores and so on that sell the

materials as taxable materials, and therefore it is taxable when the vets

provide it. So yes, the hon. gentleman is right.

MR. CHAIRMAN: The hon. the Member for Mount Pearl.

MR. WINDSOR: Mr. Chairman, I thank the minister for

confirming that. That is my understanding, that apparently the legislation has

been in place to tax it. I find it incredible. Certainly we are talking about an

animal; we are talking about a live animal here. I'm aware in other

jurisdictions where basically it has been ruled that such taxes could be

detrimental to the welfare of animals. It has been argued successfully that

taxation on veterinary services is a disincentive for persons to give proper

medical care and treatment to an animal.

I really would ask the minister to have a look at it. Unless

we are getting into a situation where all goods and services are taxable as they

are under the Goods and Services Tax Act, which I don't think we are, unless the

minister is bit by bit moving towards harmonization here. I realize they are

subject to GST. Everything is subject to GST. Haircuts are subject to GST but we

don't pay retail sales tax on it. Labour is subject to GST but we don't pay

retail sales tax on it. There is a big difference in RST regulations and GST

regulations, and I would hope that there always will be. I find it really

incredible that services relating to the care of animals is treated any

differently under the tax act. I appreciate the minister's explanation.

MR. BAKER: It is spelled out (inaudible) in 1990, I

believe, or 1989, or some late-eighties, early-nineties -

MR. WINDSOR: (Inaudible) department issued a tax update.

MR. BAKER: Yes, and the veterinarian association was

aware of the issue at that time but it has never been followed through on.

MR. WINDSOR: Never been followed through on.

MR. BAKER: Some vets have got an RST number, some

haven't. There is a great deal of disparity out there in the way that is

handled.

MR. WINDSOR: The minister has sent the association a

letter dated March 4 of this year.

MR. BAKER: Yes, yes.

MR. WINDSOR: I have copy here I'm referring to. The

minister has now confirmed that the tax update issued in December of 1990 is in

effect. The minister has also confirmed that it is his intention to introduce

legislation to make drugs and medications sold and administered by veterinarians

also taxable. I don't have an argument when the minister talks about pet food,

collars, leashes, brushes, combs, these types of items that are commercial

retail items. Simply, they relate to pets or animals. It may not only be pets,

it may be farm animals as well. I don't have a problem with those. Those are

commercial items that could be purchased in any number of businesses and

therefore should be taxable. The veterinarians I don't think have a problem with

that.

I do have a problem with drugs and medications being taxable

and that is what the minister is suggesting. Is the minister aware that there is

no other province in Canada that taxes veterinarian services except Quebec which

taxes it at 8 per cent? There is no other province in Canada which taxes drugs

except Quebec which taxes at 4 per cent. The minister is proposing to make both

taxable in Newfoundland. Would the minister like to explain the rationale behind

that? Would he also like to tell me, Mr. Chairman, if he intended to make these

changes as he says in his letter: I am proposing to introduce legislation in

this session of the Legislature that would remove the exemption provided to

drugs sold or used by veterinarians.

Would the minister like to tell me why that was not announced

in the Budget Speech? This letter was written on March 4. The minister was fully

aware of proposed changes to legislation, tax legislation, on March 4, yet he

brought in a budget on March 17 which made no reference to it. Would the

minister like to explain that to us?

MR. BAKER: I think if the hon. member goes back two or

three years, back to I believe 1990, these changes were announced at that time.

The problem has been that the Province has not followed through on the necessary

legislative changes to make it clear. This was announced back I believe in 1990,

1989 or 1990, I'm not sure. One of these budgets. The announcements were made at

that time and they were meant to come into effect at that time, but I've simply

indicated to them that we intend to make it clear in legislation what the

situation is. Because this should have been done a while ago. The announcement

was already made and the notifications were out back in 1990.

MR. CHAIRMAN: The hon. the Member for Kilbride.

MR. E. BYRNE: Thank you, Mr. Chairman. It gives me some

pleasure to participate in the debate on Committee of Supply to I guess bring

out a couple of points on the Budget Speech that the minister of Finance read

into the House last week.

Certainly in the area of provincial student grants and the

whole student loan system it amazed me last week that the Minister of Finance

announced categorically that the grant system for student aid in this Province

would be axed and that would be converted to an entire student loan system.

Then, in the same breath, indicated and spun out information that the government

would be increasing funding for students in the Province and this somehow would

be very beneficial in the long term for students.

He also indicated at that time that there would be a

remission portion. That in extreme cases students who upon graduation had high

levels of debt load could be forgiven certain amounts of loans. In the

questioning that has been taking place in the media on that particular issue in

the Budget of late that we've come to discover that really the Province has no

rules set out for who would be forgiven loans, at what levels they would be

forgiven. The Province has had no rules or regulations designed to that effect.

What the government has done on the one hand, in the

short-term they've said: We've increased money for students, we've recognized

that there is a need to give more money to students over their University term,

but we've converted it all to a loan portion. What they've done, Mr. Chairman,

in one fell swoop, one policy change, is that they've doubled the debt load

immediately. Effectively, without question, those who would have graduated with

$12,000, $14,000 to $15,000 student loans can now look forward to $27,000,

$28,000 to $29,000 student loans. That's what the government's policy initiative

has done.

In terms of attracting and creating an economic climate by

where we can become an educated, prosperous, industrious people, I say to the

minister and the government that this particular initiative flies in the face of

will further inhibit those people from rural Newfoundland who want to get an

education. It will further inhibit them from doing so and how will it do that?

In Nova Scotia they have a system and in BC a similar student

aid system as the minister has announced, where it's a tax credit system, mostly

loan portions and they have found that it has cost government more in the long

run to operate such a system. More, not from the point of view of handing out

money in terms of loans but more from the point of view in that less and less

people repay their loans. Students, post-secondary students from University,

Cabot Institute, Marine Institute, any of the private colleges, have by far the

best repayment rate. Two per cent I believe do not repay loans, which is almost

nil, I say to the minister, as he knows, which is exceptional but what this

policy on student aid announced by the Budget will do is effectively inhibit

ones ability to go to Memorial.

Now the governments say, well that's not necessarily true.

They may say we've provided more money up front so that students can pay for the

courses but at the end of the day, Mr. Chairman, at the end of the day when a

student, upon graduation, who's gone through the student loan program, owes

$30,000, that is so far behind the eight ball that he/she is not even on the

table. It is not like when the minister graduated from university. He could pick

his job wherever he wanted to on the island as a teacher. School boards came to

the University and said: where would you like to go? He and colleagues in the

Faculty of Education could pick their jobs but today students not only do not

have that opportunity but they don't even have a chance or a hope of getting any

employment in this Province, a very limited chance of getting employment or a

very limited chance of creating a life that they can know they will be here for

some time to come.

I also heard the Minister of Mines and Energy indicate that

upon graduation he had to go to the States for a couple of years. Sure that's

still an option that some students will have to go. What century are we living

in, I ask the Minister of Finance? When today where education has been

incentives are we really offering to students to go to university, to go to

trade school, to go to the Marine Institute, to hone their skills, sharpen their

skills, what is the incentive? The incentive that this government has offered,

Mr. Chairman, is a high debt load, a huge monkey on the back of rural

Newfoundlanders in particular, who have to come from outside of St. John's to

stay at the University, on campus or off campus, and this is what's been

offered. The minister and the government surely must have more compassion then

that.

Someone asked me the other day: well, why should students be

exempt from budgetary cutbacks?.... and a legitimate question. My answer to the

minister and the government would be simply this, that students have not been

exempt from the tough economic times that we find ourselves in. They have not -

categorically have not been exempt. Since 1984, students in all post-secondary

institutions in this Province have faced higher tuition costs, higher standards

of living, higher costs for books but yet they have faced the same levels of

student aid and student grants for the last ten years. Students last year were

receiving the same maximums as I did as a student in 1983 and 1984. So they have

not been exempt, I say to the minister.

The university itself in concert with the provincial

government, whether directly or indirectly, the high increases in university

tuition costs over the last five years, some 39 per cent increase and

anticipated this year, I say to the minister, as a result of his Budget, that we

have not heard yet, that we will see increased tuition costs at other

post-secondary institutions such as Memorial and such as Cabot. At Memorial, I

can tell the minister, they are today talking about introducing differential

fees for different degrees. That is what they are talking about doing today, a

second class, third class, first class, sort of university system, as a result

of the Budgets, not only this Budget but previous Budgets of this government.

Now, what sort of government on the one hand holds up a

document and says Strategic Economic Plan, and the cornerstone of it, its wish

and hope for the people of this Province is to be an industrious, well educated,

well trained people, so that we can take advantage of a more prosperous life?

Now, what government on the one hand walks the walk, or talks the talk on doing

that and in one fell swoop on the other hand picks up the Budget and cuts out

incentives for students to get a higher education so that they can better

themselves? That is a government that does not walk the walk but only talks the

talk. It is wrong and someone should hold them accountable.

I ask the Minister of Finance: What was it that drove him and

students coming out of the high school system in this Province? What was it that

drove him to say, yes, we will give you more money each week, each month, for

the short-term but in the end you will double what you owe? As a matter of fact

what you are going to owe is going to be more than a car, what you would pay for

a car payment. What you will owe after coming out of university will be 30 or 40

per cent of what you would have to pay down on a $100,000 house. What drove the

government in their thinking to say this was a positive thing, and to stand up

in this House and say to the people of the Province, we have given them what

they wanted. They wanted more money up front so that is what we have given them.

You have given them a huge, huge monkey on their back I say to the Minister of

Finance and it is something that can be reconsidered.

The government should reconsider it, and there is a way to do

it if the political will exists. I say to the Minister of Finance, if he cares

to listen, I will tell him what the impact of this decision will be. In the end

this decision will cost government more than $10 million. In the end this

decision to develop to a full loan program is going to cost the government many

more tens of millions of dollars in terms of people who cannot pay back student

loans five or six years from now.

MR. BAKER: You said you have all kinds of ways to

(Inaudible).

MR. E. BYRNE: I said to the minister it can be changed if

the political will exists to change it.

MR. BAKER: To what?

MR. E. BYRNE: I can tell you this, if you would increase

corporate income tax and not try to give incentives to friends of the government

and stop putting it on the backs of students, that may be one way that the

minister might look at it. I say to the minister that the tax concessions given

to Hydro, the $15 million rate adjustment fund, those are some of the things the

minister should consider. Do you want me to get into more of the details on it?

What about the $2.5 million, or more, spent on the Economic Recovery Commission,

an unelected, unaccountable body that decides what social, economic policy is in

this Province and not the people in this House? That may be one way the minister

may have a look at it.

I say to the minister and his government that in this

particular decision it takes political will to make the decision and this

government does not have the political will to make the decision for the

students and young people of this Province. They have clearly demonstrated, I

say to the minister, over the past five years that there was no commitment to

the youth of this Province. They have increased their debt loads, they have

increased the debt loads they will have upon graduation, and they have decreased

the opportunities for young people in this Province and that is where the

political will is lacking I say to the minister.

MR. BAKER: (Inaudible).

MR. E. BYRNE: Well, I have just given the minister a

couple of examples. If he would like a more detailed analysis of how student aid

could be implemented, and a better program could be implemented, then I invite

him to call me and I will come down and show him. That is what I say to the

Minister of Finance. If he wishes to have a full detailed analysis of how the

student aid program could be streamlined, giving more money to students and a

better program, give me a call and I would be willing to sit down in his office

at any time for an hour, or at length, to -

MR. BAKER: I offer you the opportunity right now.

MR. E. BYRNE: I have ten minutes right now, I say to the

minister. I have ten minutes right now.

Mr. Chairman, what else have we seen in this Budget in

Municipal and Provincial Affairs? Let me tell you. Six short months ago, in

October, the federal Liberal campaign came down in this Province and they said:

We will kick-start the local economy of Newfoundland, a $6 billion

infrastructure program, cost-shared by the federal government one-third, the

provincial government one-third, municipalities one-third. That was the program,

and what is the deal we see today? The people in my district were ecstatic. St.

John's City Council allocated three of their top five priorities, and they were

for my district, the District of Kilbride, mainly areas in Kilbride and the

Goulds, but what will we see now? We are not going to see that because the

Province has not lived up to its commitment.

Once again they were willing to stand and talk the talk, but

once again they could not walk the walk. That is the problem with this

government and this Budget, that they say one thing on the one hand and do

something else clearly different on the other hand.

Municipalities -

MR. CHAIRMAN: Order, please!

The hon. member's time is up.

MR. E. BYRNE: Thank you, Mr. Chairman.

MR. BAKER: By leave, Mr. Chairman.

MR. CHAIRMAN: By leave.

MR. E. BYRNE: Municipalities, Mr. Chairman, who have

managed their debt loads, who have been good money managers for their taxpayers,

have been penalized because of the government's decision on water and sewer.

I ask the minister: What is water and sewer if it is not

infrastructure? The city or municipalities, now have to borrow two-thirds - not

one-third, two-thirds.

MR. BAKER: Instead of three-thirds. That is not bad.

MR. E. BYRNE: Two-thirds. That was not the deal, I say to

the Minister of Finance, and you know it. The deal was one-third funding from

the Province, which you agreed to during the election, one-third from the

federal government, one-third from municipalities, and you didn't come through.

You did not come through, and the people of this Province are paying for it

today.

It was a scam to take advantage of federal funding; that's

all it was, and now I ask the minister: Was it new money? Somehow I doubt it. As

a matter of fact, I know it wasn't.

MR. BAKER: Do you want an answer to that?

MR. E. BYRNE: Yes, go ahead.

MR. CHAIRMAN: The hon. the Minister of Finance.

MR. BAKER: Thank you, Mr. Chairman.

I enjoy listening to the hon. gentleman from Kilbride. He

does a good job in making his presentation. He is incorrect in what he is

saying, of course, but he does a good job in saying it, so I congratulate him.

In terms of the infrastructure program, we did have a choice.

We could have gone with the one-third, one-third, one-third. That would mean, in

this Province, that the people who have the money would get the money. That

would mean that there may be a dozen of the larger communities in this Province

that would be able to take advantage of the program, and the other hundreds and

hundreds of communities around the Province would not be able to.

Now we had that choice to make and I suppose we could have

chosen it. We could have said: Alright, to heck with all of these small

communities around the Province. We won't give one cent to all of rural

Newfoundland - not a cent - and we will put it all in St. John's and Gander and

Grand Falls and Corner Brook. Being from Gander, you know, it would have been

nice for me to announce tens of millions of dollars for Gander.

Mr. Chairman, I don't think that's the fair way to do things

in this Province. I don't think it's the fair way to do things, because these

larger communities depend upon the smaller communities for their survival. The

smaller communities don't have the business base that the larger ones do. The

people in the smaller communities spend their money that eventually goes to the

businesses in the larger communities, and the councils there tax these

businesses and they've got all kinds of money to operate with.

Mr. Chairman, that is the reality of our Province. Had we

dealt with the infrastructure money the way the hon. gentleman suggests, very

few large communities - the urban parts of the Province would get 99 per cent of

the money and all the rest of the communities nothing. We felt there was a

fairer way to do it, and we have come up with that fairer way. That's why were

are doing it the way we are doing it.

MR. CHAIRMAN: The hon. the Member for Kilbride.

MR. E. BYRNE: How are smaller municipalities, with no

ability to borrow, going to benefit? Can you explain that, in some detail, to me

again? I must have missed something there, obviously. In terms of trying to

distribute the money from the infrastructure fund to as many people in the

Province as possible, how are those who could not take advantage because they

did not have the ability to borrow, because -

MR. BAKER: They don't have the one-third - simple.

MR. E. BYRNE: As simple as that?

MR. BAKER: In all these communities government is paying

the full two-thirds.

MR. E. BYRNE: That is how you've done it?

MR. BAKER: That is (inaudible).

MR. FITZGERALD: Just for a point of information. How

about the communities that are more than ninety days behind on their funding to

Newfoundland and Labrador Financial Services, municipal financial services? Can

they avail of that money if they are more than ninety days behind in their

payments?

MR. BAKER: At the present time no. It is a basic

government position that number one, we deal with the infrastructure money the

same way we deal - most of it, about 70 per cent of the infrastructure money,

let's put it that way - we deal with it the same way we deal with our regular

programs. For recreation centres there would be an 80/20 cost sharing of the

two-thirds. For water and sewer it depends upon the ability to pay. It could

vary from the Province paying 100 per cent of the two-thirds to the town or city

paying 100 per cent of the two-thirds. For municipal roads it would be a 60/40

cost-sharing of the two-thirds.

We felt that by putting that extra money into the regular

programs was the best way to distribute the money around the Province. That

means that the small municipalities that are already paying to the maximum per

household, when they get some work done, then the Province picks up the full

cost of the provincial share, which happens to be two-thirds.

Whereas places

like Gander, Corner Brook, Grand Falls, St. John's, and there are a few others,

because they are not up to the maximum per household and have that flexibility,

they would end up picking up 100 per cent of the two-thirds. That is only on

water and sewer projects. The roads would still be shared 60/40. The recreation

facilities would be 80/20, and so on. We felt this is the best way to share it

around the Province.

There still is a segment of that money that can be

distributed one-third, one-third, one-third. There is a segment of that money

that comes outside the normal municipal programs and it is about 30 per cent of

the total expenditure. That will be open for other proposals to come in, and

that would be one-third, one-third, one third shared.

MR. CHAIRMAN: The hon. the Member for Kilbride.

MR. E. BYRNE: Thank you, Mr. Chairman. I may well

understand more why the decision was made but it doesn't necessarily mean I have

to agree with it. I can tell you that the constituents in my district who have

been waiting, especially those living beyond Purcell's Turn and in the old Metro

St. John's and Goulds municipality, that immediately when amalgamation was

forced upon them - no consent, no discussion - that one of the main attractions

put forward by this government was that you would have increased services within

five years. The Member for St. John's South and I have talked about this. Was it

a good thing or a bad thing in the long term? Many residents are waiting for

water and sewer in a very heavily populated residential area and were going to

get it, until government made this decision. I can stand here in all honesty and

say that I disagree with that. Because my constituents will hurt because of it,

and will not receive the services that they hoped they would receive because of

it.

MR. BAKER: But now your friend for Bonavista South, your

friend for Baie Verte - White Bay, your friend for Humber Valley, and so on,

they would look at it the other way.

MR. E. BYRNE: As my friends on the opposite side of the

House who represent larger urban areas, I'm sure they looked at it another way.

However, this Budget, Mr. Chairman, doesn't offer any hope, in many ways. The

Minister of Finance stood up and said that he wanted to tell the people of

Canada, and indeed the people of the world, that Newfoundland and Labrador was

open for business. I have no problem in endorsing that the private sector is the

engine of our economy. But it is the small businessperson, the mom and pop

shops, the employers who employ less than fifteen people, they are the real

engine. These are the entrepreneurs that we should be helping. Not the large

corporations. Our incentives should be aimed at getting more people to work in

their local communities. That is through the small business sector.

This government did nothing again. They talked the talk on

opening the doors of Newfoundland and Labrador for business, but when it came

time to walk the walk with the small businessman or small businesswoman in this

Province they failed miserably. The payroll tax. How in the name of heavens is a

payroll tax an incentive to small employers in this Province? It is beyond me.

What the government says with their payroll tax is: You reach a certain level -

$100,000 on the one hand - then we are going to tax you. We will tax you for

hiring people. That is what we are doing. They refused to do something about the

payroll tax. It is a heavy burden on small business, a heavy burden.

In my district for example there are 116 businesses, ranging

from small corner stores to large dairy farmers to sawmill operators to

accountants, every time I speak with them, and I do speak with them frequently

on a monthly basis, and they tell me that the payroll tax is killing them, it's

choking them, it's not an incentive for them; it is hurting them and I would

suspect that the small businesses in my district are like the small businesses

in every district across this Province.

MR. BAKER: No matter what you say, we are not going to

bring back that school tax. You shouldn't be pushing for that.

MR. E. BYRNE: I would say to the Minister of Finance, I

was not around in the days when school tax was implemented and I was not around

in former decisions, but I can tell you this, that I did not advocate bringing

back the school tax but the payroll tax is something that is hurting small

businesses, you know it, the members in this House know it and we should clearly

do something about it.

Mr. Chairman, I will just conclude my comments with my

references to the Department of Education and the Department of Municipal and

Provincial Affairs and look forward at some time in the afternoon to get up and

speak about a couple of other departments.

Thank you.

MR. CHAIRMAN: The hon. the Member for Waterford -

Kenmount.

MR. HODDER: Thank you, Mr. Chairman.

Mr. Chairman, I have a couple of comments relative to the

budgetary matters and just to tell the minister that there is a great deal of

concern in the student bodies of this Province relative to the decision of the

government to change the way in which university and post-secondary education is

funded. In fact, over the last several days, since the Budget has been tabled, I

have had numerous requests from student council bodies both in this region of

the Province and from other parts of the Province as well on that matter.

In fact, just today the Member for Kilbride and I met with

the Council of the Students Union executive at Memorial and they have appraised

us of their real concerns, and certainly, when you examine the matter from their

perspective, and they clearly express the frustrations that they have in the

changes which are about to occur and as the minister has indicated, that he is

not prepared to look at the grant system to reinstate it, in spite of the fact

that his proposals which he is going to implement will mean that there are going

to be significant increases in the debt load to the sons and daughters of the

ordinary working families in this Province.

In particular, Mr. Chairman, I have been approached by

several single parents who are going to post-secondary schools, who find that it

is most difficult for them to be able to make ends meet now, and in fact, Mr.

Chairman, among other things that have come to my attention, is that a number of

post-secondary students now are availing of social programs like food banks, and

while the image of the ordinary student at Memorial or at the Cabot Institute or

at the Western Community College might be different in the public's mind, the

reality is many students are finding it very, very difficult already.

Mr. Chairman, the students who have been talking to my

colleague and I, have also expressed the real fear that they have of the impact

that it will have on students who cannot go to university and at the same time

live at home, and, Mr. Chairman, while we commend the government for their

initiative to open first year university courses in Clarenville and to continue

the programs they are offering other parts of the Province, the great majority

of students in this Province have to live away from home in order to avail of

post-secondary education. That means, Mr. Chairman, that they have to buy their

text books, they have to pay their rents or their costs of living; they have to

pay their tuitions and they, up to this point, have been able to attend because

they've been able to get some relief through the grant program.

Mr. Chairman, we know the grant program was designed to

specifically target those students who need help. What the government is now

saying is that these students must now bear a debt load of, perhaps twice as

much as they would have up until now. Mr. Chairman, what that means is that

students must now go to about $22,000 in debt before they have any prospect at

all of getting any relief from their debt load at the end of their graduating

years. Mr. Chairman, what that means is that many students will begin to think

twice. The reality is that if you have a son or a daughter who is living in any

part of this Province really but more particularly those students who have to

live away from home on campus or rent apartments or whatever, these students are

going to have to examine carefully what this investment will mean. This has to

be examined by families, by students and the reality is that I'm afraid many

students will look at the prospects of getting a job and they will probably

question whether or not the prospects of future employment are sufficiently

encouraging for them to want to invest the $20,000 or $25,000 that will result

if all of their funding comes from the student loan program.

Mr. Chairman, we also know that there are other conditions

that prevail. The learning institutions do not have the access to bursaries and

scholarships you find in other provinces so therefore the student who does not

come from well-to-do families, these students are going to face the prospect of

having to say: no, they can't go. Therefore, when you say you can't go to

post-secondary institutions, what in essence you've done is that you have

stifled the educational opportunities of students in the Province.

Mr. Chairman, as well I wanted to comment on the fact that

the government has no idea yet as to what conditions will prevail for students

to get forgiveness after they finish their post-secondary education when they

have accrued a debt of $22,000 or $25,000, there is no criteria. The minister

has said that in extreme cases they would look at the possibility of giving

these students some relief. Well, Mr. Chairman, that's not encouraging. It

doesn't say they will, it says in the extreme cases. So therefore, the change in

student loans however logical it might be from the governments perspective, is

going to have a disincentive effect in Newfoundland and Labrador, disincentive

in terms of encouraging students to pursue post-secondary education.

Mr. Chairman, as well I want to comment on the government's

proposal to reduce the number of teachers available in rural parts of

Newfoundland and Labrador. In particular, I want to comment on the proposal

which is contained in or reflected in the salary allocations for teachers in the

Province and it's commonly referred to as the 2 per cent savings clause. Mr.

Chairman, the net effect of the 2 per cent savings clause or the changes to it

will be to take hundreds of teachers out of rural Newfoundland. Up until this

year and I haven't had the data for the 1994-95 teacher allocations from the two

large boards in St. John's but up until this year, not one single teacher was

protected in the Roman Catholic School Board for St. John's or the Avalon

Consolidated School Board in St. John's under the 2 per cent savings.

MR. CHAIRMAN: Order, please!

The hon. member's time is up.

SOME HON. MEMBERS: By leave.

MR. HODDER: That means that the rural parts of the

Province, that is where the 2 per cent savings clause will have its greatest

effect, and certainly I say to the House that when we look at revisions to the 2

per cent savings clause, the net effect, we have to make sure that the programs

and the curriculum and the class sizes in rural Newfoundland are protected.

As I said yesterday in Question Period, we call upon the

government to initiate a comprehensive small schools policy, because it

certainly will be negatively reflected in achievement if we are to have

multigrade classrooms, if we are to have class sizes that are greater than they

are now, and we are to decrease the number of teachers available in rural

Newfoundland.

Mr. Chairman, as time progresses in this debate I will have

further comments, but I yield now to another speaker.

Thank you.

MR. CHAIRMAN: The hon. the Member for Bonavista South.

MR. FITZGERALD: Thank you, Mr. Chairman.

I rise today to pass a few comments on the 1994-'95 Budget. I

must admit that I, too, was very disappointed because it didn't offer any hope

for rural Newfoundlanders who are unemployed, or people with any hope of trying

to find a job or have any things happening in their own rural communities.

It almost seems like it is another slap in the face to rural

Newfoundland, especially when you look at some of the communities. There are

some communities in my district, and I am sure that they are no different from

communities in other hon. members districts in rural areas when you look at

works, services and transportation looking at handing back some of the local

roads to municipalities.

Mr. Chairman, I can assure you when you go to a place like

Duntara and Keels in rural areas, that those people today, with the amount of

taxes that is available because of high unemployment levels and no tax base in

their communities, I can assure you they are not capable of charging the top

rates for householders in Newfoundland to be able to avail of some of the

infrastructure work that is being put forward by the federal and provincial

governments.

Mr. Chairman, this is another situation, I think, where we

will see that if people want to live in their home communities in rural

Newfoundland, then they will have to pay for all services or do without them

altogether, and it is probably another way that the Premier is looking at moving

people from rural Newfoundland into his seventeen economic centres. They will

either have to commute to those centres and do without services where they live,

or live within those centres and probably be able to avail of some of the

services the government might be willing to subsidize.

The two colleagues who got up and spoke before me spoke of

student grants, which was a big concern. I can assure you, this is a big concern

to everybody who lives in rural Newfoundland, when you have to have a son or

daughter come to St. John's, pay their room and board, heat and light, tuition

fees, books, transportation costs, and all the other hidden costs involved in

attending a post-secondary institution. Those people will now come out of

university burdened with $20,000 and $25,000 worth of government loans that

somebody must pay for.

I think it is an understood thing that a society that is well

trained and well educated is a society that will offer many opportunities and

very low unemployment levels. I fear that we are going in the other direction

and that we will always continue to have the high unemployment levels that we

have because even today, in 1994, we are taking an opportunity away from our

rural Newfoundland students to be able to travel and avail of post-secondary

education because of the costs involved, and I think that is unfair and

unfortunate.

The minister challenged the Member for Kilbride to ask him

where he would come up with the money. Mr. Chairman, I am sure when you look at

the overall Budget there are lots of ways there where we could cut and trim a

little bit in order to maintain the level of student grants.

I think of the payroll tax, Mr. Chairman. It is one

regressive tax and probably the most regressive tax that we have in our society

here today. I have a friend of mine who is a small employer living in my

district and I've heard the complaint from him many times, that once he reaches

a certain level that that is it. There is no bloody way that he will hire

anybody else on because he is not interested and he can't be burdened with the

payroll tax that is being brought about by this government.

I can't understand. I fail to understand why a government

would bring in a tax that would be a disincentive for people to hire somebody.

It bothers me and I'm not so sure where it comes from. I think if the hon.

minister has his way that tax would disappear and he would allow people to have

a free rein in hiring people and get common Newfoundlanders back to work again.

The Minister of Employment and Labour Relations spoke about

changes to lay off electrical inspectors and boiler and pressure vessel staff.

He talked about allowing contractors now to do the work and I suppose in a way

to have it on their conscience. If they make a mistake that it would be

something that their conscience would dictate to them the reason it was done or

to justify having made the almighty dollar versus doing a good job. I'm not so

sure that will work because as you and I know many people put the almighty

dollar before safety and before anything else in this world today.

Being from the same environment I suppose or industry myself

I've worked with a lot of contractors down the road, and I can assure you that

there were many things down in those days just to get past the inspector. When

he went it was changed. I fear now you will see many more things being done, and

also you will see very unsafe conditions. Probably the worst of it might be in

the common household or in the domestic wiring that we see today in our areas.

I probably wouldn't have a great problem with the minister's

statement if he brought in some kind of rules and regulations which would state

that if anybody was to draw a permit then he or she would have to be a

journeyman plumber or electrician or whatever. At least we would know then that

people who were drawing the permits and doing the work would certainly be

qualified people. I'm sure that would give us some sense of responsibility and

would ease our minds a little bit in knowing that the people who were doing

those installations were capable of doing them in a safe and professional

manner.

Hospital beds, fifty hospital beds closed. From a government

that promised in 1989 that they would open hospital beds and provide people with

the health care that they need and they deserve in rural Newfoundland. Or in all

of Newfoundland, I suppose, because many people in rural Newfoundland take

advantage of the hospital care and professionalism that is offered here in St.

John's. I'm sure that we would be living in a dream world if we ever expected to

have people of all professions live in rural areas. I think the onus is on

government to provide hospital care to people who need it, as well as education,

and I know it is a costly venture. Sometimes we have to forget about the dollar

and put the meaning of hospital care and health care before saving money.

Atlantic Lotto commission. It was mentioned in the Budget

that commissions would be taken back from the owners of hotel establishments and

greater returns be given to government. I have no problem with that, in fact I

welcome that. Another suggestion that I might add, and some ways that Atlantic

Lotto revenues could be used, is to give some of our local athletes a chance to

travel and compete. Maybe we should direct some of this money in this direction.

I have a situation in my district today in Bonavista South where the Cabot

Collegiate team went and competed and won the provincial championship in floor

hockey. They've been deprived of going out and competing nationally because they

don't have the dollars to do that. I think it would be wise if we could look at

some of the revenues that would come from the Atlantic Lottery Corporation.

Maybe we could direct it in that kind of a way so we could put it back in our

communities and allow our athletes to be able to go on to a much larger arena

and compete and bring us pride back here to our Province.

Mr. Chairman, the hon. Minister of Social Services showed us

where we are going to have $29 million brought forward in his department, and I

applaud him for going to government and making those concerns known, and

government allowing him to have $29 million to be able to put forward. I can

assure you the need is out there for much more than that and I feel that as the

need arises the minister will be vigilant and bring forward the money that is

needed in order to address the concerns that will be brought forward at that

time.

Mr. Chairman, I would like to ask the minister to make sure

that some of that money goes towards emergency funding. I talk to people in my

district, and one particular case of a gentleman who is sitting down in Elliston

today who is totally blind and his wife confined to bed. His water is frozen and

when he gets up in the morning he has to depend on neighbours and call somebody

to bring them water. This shows there is a great need there, and I hope that

some of this money will be allowed to go to help those people who need it most

and are there at the mercy of government and other people, Mr. Chairman.

I know there is funding for the Economic Recovery Commission.

That is another way, I think, that we could probably divert money to be used for

a more useful purpose. It was with some interest a couple of weeks ago that I

attended an explanation of the income support program at Clarenville and it

showed everybody there how out of touch the Economic Recovery Commission is with

what is really happening in rural Newfoundland and Labrador. One fisherman got

up and gave an example of what would happen in his family with this income

support program that the Economic Recovery Commission would bring it. It was a

situation where his son worked at Hibernia and if that proposal was ever

implemented it would be a case where his son would have no other choice but to

leave his home in order for him to access any funding whatsoever under the

income support program. It is another prime example of families having to break

up in order to avail of that particular commission.

Another gentleman got up and made a very good point. At the

time he said, Dr. House, in your

preamble you said you supported rural

Newfoundland and fishermen, but if this is your idea of supporting us and

helping us, for God sake stop. We do not need your support and we do not need

your help. I think that is a prime example of what a lot of people feel. I think

this $2 million, or whatever money was put forward in this particular Budget

into the Economic Recovery Commission could certainly be better spent and put in

another direction that would help a lot more people.

The $1.2 million that was brought forward to be spent on RNC

and RCMP to counteract smuggling, Mr. Chairman. I think eventually down the road

we are probably going to have to follow the lead of other provinces. It might be

a situation where we have our $1.2 million spent and still have to do it in the

meantime in order to be realistic about what is happening and know that it is

impossible to service our whole coastline, the post office, and everything else.

I think it would cost much more money than the $1.2 million in order to put any

kind of a stop to the smuggling we see around our Provinces today when it comes

to tobacco and liquor supplies. It might be a situation where we spend our money

and eventually have to lower our prices anyway. Then we are taking a black eye

and getting a black eye on both causes.

Mr. Chairman, the fear of people out there today losing their

jobs. I do not know why but it continues to happen. It seems like Budget after

Budget the Minister of Finance -

MR. SPEAKER: The hon. member's time is up.

AN HON. MEMBER: By leave.

MR. FITZGERALD: - that the Minister of Finance continues

to show a figure where he must collect somewhere down the road, and I think that

is unfair. It is unfair in the fact that everybody who is out there today

employed by government is in fear of losing their jobs. They are in fear of

spending their money and it reflects back on the family, and I think that is

unfair. I think it is also unfair when the Minster of Finance built in, or

brought about the severance pay as an item that was put on the table for

negotiations. Many teachers out there today - and I met three the other night in

one school - stated they were retiring after twenty-nine years without dignity.

They were retiring because government has created this environment where they

are unsure of what is happening and in order to access money that was negotiated

and there for them, now they have to give up their jobs and retire a year before

the planning was done for this retirement and to go almost without dignity as if

they are being pushed from the school.

So, Mr. Chairman, in conclusion, I don't see any reason why

we should be out dancing in the streets because of this Budget. I realize we are

living in hard times and money is tight but I believe that there is a lot of

places where we could have made cuts and a lot of places where we could have

spent money, other than in the direction that was provided by the Minister of

Finance last Thursday.

Thank you.

MR. CHAIRMAN: Shall clause 1, carry?

The Chair, if nobody stands, has to call the vote.

The hon. the Member for Humber Valley.

MR. WOODFORD: The Minster of Forestry and Agriculture,

Mr. Chairman - I was going to speak on something else but now I think I will

speak on access roads. But I have another idea for the minister and I know he

will go along with it too; it is just a little further up the road from that, it

is almost to Big Falls, almost to Sir Richard Squires Park, Mr. Chairman, and I

am sure if the minister came out and we made another trip up there some morning,

he could put an access road into one of the best salmon holes on the river.

Mr. Chairman, on a more serious note, I missed the first few

comments the Minister of Finance made with regards to Works, Services and

Transportation and how much was going to be spent on roads and bridges, but the

Budget mentions a figure of $20 million anyway, he said $18 million and the

balance was monies that were supposed to be coming from the Canada-Newfoundland

Railway Agreement and only for that, Mr. Chairman, I say there would be very

little money spent on roads in the Province this year.

Now if there was ever a time when we needed infrastructure

money and capital funding spent on roads in the Province, it is now. It is one

of the best ways, I have said it before and I will say it again, it is one of

the best ways to create jobs and the fact that it is only seasonal work, it

would be an asset especially now where the unemployment rate is so high and a

lot of construction companies around the Province are having difficulties.

The two areas where we can create jobs and do it with capital

funding and something that can be spread out over a number of years, and

something that can add to the infrastructure of our Province, one would submit,

Mr. Chairman, that the last number of years, anyone who has been driving across

the Trans-Canada in this Province in the last four or five years, there has been

a real improvement to the transportation sector in this Province.

You can leave now and go across the Province and you can, at

least from Deer Lake or St. John's anyway, you can do it easily in a little over

six hours or a little over, when just a few short years ago it took almost eight

hours to drive from Deer Lake to St. John's and that is driving at the speed

limit, Mr. Chairman; that's driving the speed limit I say to the constable in

the back. I had to qualify what I was saying because he might be out on the

highway probably next weekend when I leave for the West Coast.

When I am talking about transportation, Mr. Chairman, when I

look at what has happened this year to the capital funding, I think it was $25

million to $27 million spent on provincial roads programs last year, this year

it is cut down to $20 million and I would say it is probably going lower than

that before the summer is over. That doesn't auger well for the construction

industry and is certainly not going to give to seasonal construction workers in

this Province any reason to be positive over the next couple or three months,

and that, coupled with the fact that the infrastructural program that was

supposed to be administered by the Department of Municipal and Provincial

Affairs is not going to have the funding in it that it was supposed to have - it

will have the funding with regard to the total sums, when you look at the

cost-shared agreement between the feds, the Province, and the municipalities,

but when you look at the total capital funding for that department for this

year, that is pretty well gone. You can safely say that the $59.6 million that

was in capital funding last year is pretty well gone. So that is certainly not

going to add anything, and help the employment rate in this Province in the

coming year.

Most of the funds from this particular program committed this

year will be ongoing for the next two or three years, and that is the danger of

it. If we are going to take from a capital program just to make sure that we

have the other one in place, by name only, we are certainly not adding, and

helping the unemployment problem that we have in this Province.

Mr. Chairman, someone - I think it was the Member for

Kilbride - mentioned earlier, the payroll tax, and how bad it was on businesses

in the Province. This has been referred to many times as a tax on jobs, and

there is no question, this is a tax on jobs. There have been companies around

the Province, both small and large, that have been stymied by this particular

tax, and there is no doubt about it, it has been one of the obstacles in

creating jobs in this Province, especially in these times. If everything were

okay, everything number one, the economy going fairly well and so on, everything

moving along, then maybe businesses in the Province could sustain something like

that, and could probably absorb the costs, but right now, with the way things

are, they have to cut corners every way they turn, everywhere they turn, with

regard to maintenance, with regard to keeping up their buildings, keeping up

their equipment and so on, but everywhere they turn they are hit, and this

payroll tax, just because they go out and hire somebody, Mr. Chairman, they are

penalized for it.

It is a disincentive to create work. It is a tax on jobs, and

members opposite realize the return; you take into consideration the number of

businesses in this Province and the total employment rate for the Province in

the last number of years, and the fact that the Budget, itself - the Minister of

Finance, the other day, admitted that the unemployment rate - what an indictment

for the Minister of Finance to stand up and read a Budget and say, up front,

that there is going to be no change in the unemployment rate for the year ahead.

Now, if there is ever a time for a Minister of Finance and an

administration to send a signal to people in the Province to try to be positive,

to try to get over negativity, when the Premier is on television and in the

papers every other day of the week saying that we have to change our attitudes,

if we don't change our attitudes we are not going to have - and the minister

responsible for employment, more specifically, is the one who should be worried

about it. Change your attitudes and so on, when the minister himself, and the

administration, comes on Budget day and says that the unemployment rate in the

Province is not likely to change for this year.

I say to members opposite and especially to the Minister of

Finance who, over the years has talked about - I remember when John Crowe was

Governor of the Bank of Canada. Members opposite would always get up ca