,!!£:._ ----- --- Volume 1 PROVINCE OF NEWFOUNDLAND THIRTY-SEVENTH GENERAL ASSEMBLY OF NEWFOUNDLAND 1st. Session VERBATIM REPORT TUESDAY, MARCH 23, 1976 SPEAKER; THE HONOURABLE GERALD RYAN OTTENHEIMER Number 35

Y.arch 23, 1976 The House met Rt 3:00 P.~'. Hr. Speaker in the Chair. ~ffi. SPEAKEP. (Dr. Collins) : Tape 1355 Order, please! STATElffiNTS BY MINISTERS: }ffi. ROUSSEAU: }lr. Speaker, I would like to bring the House up to date on the negotiations j_n respect of the Churchill Falls dispute as acting Ninister of Hanpower and Industrial Relations. The minister will be back this evening. I would like to give a report to the House. Negotiations aimed at settling the dispute at Churchill Falls,which were recessed yesterday,have not resumed in as much as the union negotiating committee did not return to IB-1 St.

John's last night after travelling to Churchill Falls to attend a membership meeting to discuss t\vO outstanding items, wages and vacation. The union reported back to the conciliation officer that the membership have instructed the negotiating committee not to negotiate below the wage and vacation package recommended by the Conciliation Board. The corporation,on the other hand~has refused to fully meet the Conciliation Board recommendations in these two areas.

Consequently the conciliation officer has advised that any further meetings at this time would not appear to be advantageous while both parties continue to maintain their positions on these two items. In the meantime the conciliation officer is standing by. As soon as there :f_s some indication that further meetings are desirable the parties ~Jill be brought back together again. HR. NEARY: The union is still in Churchill Falls? ~lR, ROUSSEAU: The union is still in Churchill Falls and the corporation are do~n here. MR. SPEAKER (Dr. Collins) : The hon. Leader of the Opposition. HR.. ROBI:RTS: Mr.

Speaker, I ''ould like to make a very brief 361G

~larch 23, 1976 Tape 1355 IB-2 MR. ROBERTS: comment on it and to say two or three things. First of all I think we all regret the fact that the negotiations appear to have broken down, and I think that is what we must read into the minister's statement, that negotiations are not at present going ahead and the advice he has had from his conciliation officers is at this stage there appears to be no point in bringing the parties together again. The minister is nodding acquiescence. Am I stating the situation correctly? I am 1I gather. Well, Ur. Speaker, I think we regret that, and then I would say just two things.

First of all,a lot of us find it very hard to understand why the company will not accept the Conciliation Board report since it has recommended a wage level that is the same, maybe a month or two difference in the timing, but the same as that which the comparable employees here on the Island are getting. I believe the wage rate is $8.17 an hour. That is the figure which I understand is in the report. Secondly, it recommends a Northern allowance which is comparable to that paid other public servants.

We are, a number of us, Sir, with all the good will in the world, are unable to understand why the CFLCo will not accept that. All that I can say is that I hope the minister will be able to give us an explanation,or the Minister of Mines and Energy speaking for the corporation. I would hope also Sir, that unless there is something we do not know about, the government will press the company to accept what has been recommended by the Conciliation Board. Mr. Gordon Easton was chairman of that board and he has a very high reputation. Let me also say, Mr.

Speaker, that if the negotiations are broken down,and if in fact there is no hope of getting the parties together,! wonder if the minister would reconsider the decision which his colleague, the minister, has taken, namely not to hold the industrial enquiry and if he would reconsider that decision, ~r. Speaker, with a view to holding the industrial enquiry. We have now got an 361~

''arch 23, 1976 Tape 1355 ?'R. P.OBEr.Ts: intractable strike , apparently both sides, Sir, unable to make a oiddle tround and thus reach a settlel!le r:t. •Jell, Sir, "'e Ill-3 have to find a way out of it and I believe it is the governmen t's job to <lo what they can to try to do that and certainl y setting up such an enquiry , I believe, would help. SO?lE !10:'1. ~'EJ.ffiEJl5: !lear, hea r! rm. SPEAKEn (Dr. Collins): Are there other statements? Pr~SENTING PETITIONS: ~~ .• SPEAKEr (Dr. Collins): Tile hen. member f~r Fogo. CAPT. E. HINSOR: t!r .

Speaker, I beg leave to present a petition from the people of ~'ussrave Harbour and the petitio n is signed by 563 citizens o£ that comrntmity. The petition is similar to the scores of petitions which have been presented in this Rouse , nnd the people of that community strongly protest the ever increasing cost o£ electricity. tlr . Speaker, the people 11ho are mostly affected with this increase are the young couples who have recently constructe d ne~ and modern hoMes,and we all recall the advertising carried out by the Newfoundland Light and Power,advertising and recommending to people to electrify your homes.

It ~:111 be clear, 3617

March 23, 1976. CAPT. EARL wmNSOR: Tape 1356 RH- 1 cheaper, so on and so forth. However, Mr. Speaker, having done that they find now that they are unable to heat their homes sufficiently to make them comfortable because of the high costs. So, Mr. Speaker, they are a very concerned people and they certainly strongly protest the increase,and they are begging to government to see to it that the increase is kept at a minimum. The prayer of the petition prays just that. I support the petition, Mr. Speaker, and ask to have it placed on the table of the House and have it referred to the department to which it relates.

MR. SPEAY~R(Dr. Collins): The hon. member for Trinity-Bay de Verde. MR. F. ROWE : Mr. Speaker, I beg leave to present a petition on behalf of - actually it is a small petition - on behalf of twenty citizens of Greens Harbour in the district of Trinity-Bay de Verde.

The prayer of the petition reads as follows: "We, the undersigned, do humbly petition the Government of Newfoundland and Labrador to request that public hearings be held throughout our Province to obtain information and hear briefs on matters covered by the government White Paper on the proposed snowmobile legislation, and further, that no such legislation be enacted prior to the holding of such public hearings." Now, Sir, in speaking in support of this particular petition I realize the minister's sensitivities with respect to the white paper, and we do recognize that what we have heard so far has been a white paper.

It has not been legislation. I for one,and I do not think any of my colleagues have attempted to indicate to the people of Newfoundland that the l~hite paper is in fact law. He all know it is not law. So we do not need a lecture on what a white paper is. The minister has served notice that he is going to strike back if we try to make a political football out of this, Sir. MR. ROBERTS: Pretty formidable, I am sure. HR.

ROl•IE: So since I am here trembling in my shoes over that possibility, I would simply support the petition and ask the minister that public hearings be held th ~oughout the Province before such legislation is 3618

~1arch 23, 1976. ~ IR. ROHE: Tape 1.356 RH - 2 brought in. This is an area, Greens Harbour, where snowmobiles are more of a recreational thing,! RUess,than ~nything else. There are other areas of the Province, such as Northern Newfoundland and Labrador,where a snowmobile has a completely different meaning from what it does in an area such as Greens Harbour. However I do support the petition and I call on the minister to support the concept of having public hearings before any such legislation is brought before the House.

So, Sir, I ask that this petition be placed upon the table of the House and referred to the department to which it relates. MR. SPFAKER: The han. Minister of Tourism. RON. T. HICKEY: Hr. Speaker, I would certainly be glad to take the matter under advisement. I simply make one observation to my hon. friend and suggest to him would he not agree that, to all intents and purposes, we have gotten almost the results of publi 'c hearings in the kind of representations and the numbers of representations that we have received from across the Province.

I am not suggesting in any \<ay that probably, that we have heard from the same number of people. But would he not agree that for the most part the same points in the various areas of the Province have been brought to the attention of government by way of comment and brief and representation on behalf of the white paper? I might also say to him, Sir, that he can be assured that we are indeed aware of the peculiar problems in relation to the Northern part of the Island and the entire area of Labrador, and that we are addressing ourselves to those particular problems.

Before any regulations become law certainly those regulations pertaining to those critical areas where there are special problems will reflect our attention. HR. ROWE: Hr. Speaker, the Tourism Minister has asked me a question ~1hich I am not permitted to answer under the rules. HR. SPEAKER: Order! The Leader of the Opposition. HR. E. ROBERTS: l>fr. Speaker, if I might say a word or two in behalf of 3619

March 23, 1976. MR. ROBERTS: Tape 1356 RH - 3 my colleague ,who as he just said is prevented by the rules of answering the bon. gentleman from St. John's East Extern(Mr . Rickey), the Minister of Tourism. Let me say, 3620

Harch 23, 1976, Tape 1357, Page 1 -- apb lffi. ROBERTS: Sir, in supporting the petition that we do not think the process Hhich has been entered into and ~~hich has gone on is comparable to public hearings. We think it is certainly better than no process, we agree on that, of course, but we do feel there is still a need for public hearings whether it is to be done by a Select Committee of this House with leave to sit around thiR Province,or whether it will be done by the M.inister and some of his officials holding a number of meetings throughout the Province and asking people to come.

The snowmobile regulations, Mr. Speaker, I suppose have produced as great an outcry and an uproar from our people as anything that any government has ever done. I do not intend to enter into a debate now,I am not allowed to, but I think it large measures the outcry was because many people felt, and I believe correctly, that the regulations were not adequately designed to meet the needs of this Province. In view of the fact it took the government four years to produce the White Paper, Sir, many people felt that the White Paper was not really a very good effort.

The merit of public hearings, Sir, is that there could be a two-way discussion and not just the one-way discussion which has been underway now. The White Paper was published and people reacted in outrage. The tone of most of the documents ~~ich I have seen 1and I have seen many of those sent to the minister - copies have come to me or to my colleagues and there may be many more I have not seen - but the tone of most of them, Sir, is very positive but at the same time has within a note of outrage, a feeling that the regulations are not adequate .

I know that in large parts of the Province, in Labrador, for example , the gentleman from Naskaupi (Mr. Goudie) has been · most vehement in his objections to the - indeed 1he and the minister have had some notable differences of opinion, I believe. I know the gentleman from Labrador West- the gentleman from Henihek, I am sorry! Olr. Rousseau) has similar feelings, I understand. My friend and colleague from Eagle River (Mr. Strachan) has run into 3621

March 23, 1976, Tape 1357, Page 2 -- apb MR. ROBERTS : it. I have run into it in the Straits of Belle Isle,and others around this Province. I think there is a very good case to be made for public hearings and I would say to the minister that if - as I believe,he is anxious not to make politics out of this - and the reason he is anxious not to make politics is that he would get his hide skinned on it, in political terms - but the way to do that, the way to avoid politics, Mr. Speaker, · is to hold public hearing. I would now invite, Sir, the gentleman from Bay of Islands (Mr. Woo<"row) to speak on this petition.

I think, Sir, he would have something to add and I hope, Sir, he will get up and say a word or two in support of it, SOHE RON. MEMBl RS : Hear , hear! AN RON. MEMBER: one is that? The gentleman from the Bay of Islands? Which MR. ROBERTS: There is only one gentleman from the Bay of Islands, MR. SPEAKER: Are there other petitions? MR. LUSH: Mr. Speaker, I have a petition. MR. SPEAKER: The hon. the member for Terra Nova. MR. LUSH: Mr. Speaker, I beg leave to present a petition on behalf of 363 residents of Brooklyn, Jamestown, Portland and Winterbrook.

The very responsible, industrious and concerned citizens of these communities are protesting, one,the abominable condition of the roads passing through and joining these communities and,two, they are very concerned about the condition of a bridge known as Southeast Bridge between Lethbridge and Brooklyn. Mr. Speaker, in recent months I have been over these roads and can attest to the validity of the statement in the petition condemning the deplorable condition of the roads. Mr.

Speaker, may I say that many of the men and many of the women whose signatures appear on this petition have to commute daily over these roads to work in the national park, Gander, Clarenville and various other communities, The costs of damage to their vehicles 3622

~mrch 23, 1976, Tape 1357, Page 3 -- apb HR. LUSH: while bouncing over these =oads are very considerable. Daily, of course, "'onday through Friday , students are bused over these ronds, sru.tents froM Kindergarten t o Grade Xr. They have to commute on buse~ to elementary schools in Lethbridge and the hi~th school in ~!uszrav etow-n. Parents and teachers have related to me on several occ~ions the various incidents of younger child r en in pa rticular "ho have got ten ver y sick as a result of the bumpy ride on the bu!l over these roads. }tr.

Speaker, t he bridge referred to in the peti tion is very narrow and unsafe for heavy traffic . The bridge also adjoins the rond at a rather sharp angle,which is another factor contributin s to the danger of this bridge . Just recently a school ~us was involved in an accident approaching this bridge . Fortunately there '~ere no injuries . Hr . Speaker , good,

March 23, 1976 Tape 1358 PK - 1 Mr. Lush: safe roads in these towns of Brooklyn, Portland, Jamestown and Winter Brook would not only provide a safe and convenient trans­ portation system,which I am sure these people are entitled to, but it would also be a great incentive to providing the people of this area,or a great motivation to helping those people to develop the tremendous tourist potential of this area.

As all han. members are aware these communities are on the periphery of the National Park, hence are in an ideal position to capitalize on the Summer tourist industry because of its closeness to the National Park. These communities are admirably located and positioned for the tourist industry, and endowed with much Newfoundlandia and natural beauty. No attempt has ever been made by any government, at any level,to capitalize on the tremendous tourist industry in these areas. Now, Mr. Speaker, I submit that a good road system is an absolute necessity to develop this area. Mr.

Speaker, it is my: understanding that the present Minister of Transportation and Communications 1when he was a member or when he was a backbencher, he,like me today,stood in this hon. House and presented a similar petition on behalf of the .same people of these same communities for upgrading and p.ving of these roads. These residents are now counting on the minister to seriously and realistically and tangibly demonstrate his sincerity and concern for the people in these areas. They believe that the minister now has the power to grant the wishes of this petition. Mr.

Speaker, the government in giving heed to the prayer of this petition will not only be providing a much needed and better transportation systemtbut we will have started,in my belief, the major incentive and the major ingredient on which a ma~or tourist industry may begin.. It is my sincere wish that the government will see fit to pay careful attention to and support this petition. Mr. Speaker, I ask to have this petition placed on the table of the House and referred to the appropriate department. SOME HON . }ffiMBERS; Hear, hear! 3624

March 23, 1976 Tape 1358 PK - 2 HR. SPEAKER (DR. COLLINS): The han. Minister of Transportation and Cotrununications. liON • J • HOP, CAN : Nr. Speaker, I would like to say a few words in support of the petition so ably put fon~ard by the han. member for Terra Nova district (Mr. Lush). Many of the signatures on that petition I know are good friends of mine, after being their member in the area for the pas t three or four years.

The road to Jamestown and Winter Brook through Portland and also through the community of Brooklyn is in need of reconstruction and paving, the same as the road leading to Canning's Cove in the same area, the road leading to Sweet Bay in the same area, the road leading to Plate Cove and King's Cove and Knights Cove and Noonan's Cove and- AN HON • ME~IBER : Hear, hear! ?1R. ~IDRGAN: - all these areas in my own district. All these roads are in desperate need of reconstruction and paving.

And I sincerely hope over the next number of years that sufficient funds will be found to have all of the roads where school buses are being used in rural areas of the Province 1 sufficient funds found so that the roads can be reconstructed and all paved. AN HON . MEMBER: Hear, hear! HR. SPEAKER (DR. COLLINS): Are there any further petitions? The han. member for Port au Pott. HR. J. HODDER: I beg leave to present a petition on behalf of 763 residents in the district of Port au Port. The petition is the same as the one recently presented hy my colleague from Trinity-Bay de Verde (Mr.

Rowe) to the effect that the residents request public hearings to be held throughout the Province, to obtain information, to hear briefs on matters covered by the government's 1.J'hite Paper. It is the feeling of the residents of my district that because of varying opinions and the variety of problems existing in different areas of the Province that the holding of public hearings would provide a proper public forum for the gathering of pertinent and detailed information from all over the Province on which proper legislation could be subsequently based.

These public hearings would allow all of the clubs and associations together with the general public to be heard. 3625

March 23, 1976 Tape no. 1359 Page 1 - lllW Hr. Hodder. I am aware of what the purpose of a White Paper is, and that it is to elicit comment, and I understand that a White Paper,or most White Papers show the government's intent. When the White Paper first came out the Minister of Tourism took a strong attitude about it. There was no doubt at the beginning of what the minister's intent was.

Now the minister has taken a slightly softer stand, and when my colleague, the member for LaPoile presented a similar petition last week, the minister said that the Opposition did not understand what a White Paper was and that it was only meant as a starting point. MR. SPEAKER (Dr. Collins): Order, please! In presenting a petition the number of petitioners and the prayer of the petition and comments related to that can be engaged upon, but hon. members should very carefully avoid any semblance of debate. The hon. member for Port au Port. MR. HODDER: Thank you, Mr. Speaker.

However,to finish what I was just saying. This was not the minister's attitude on a Here and Now programme in Corner Brook. His attitude then was defending it. It seems to me that a White Paper must be what the government is thinking of doing, though it is released to the public for comment first. Now, Mr. Speaker, I have acquainted myself with some of the American studies which I think that maybe the White Paper was based on,and those studies were done in alfalfa fields where the snow machines were run over the fields for a gneat number of times and certain studies done.

And many of our Newfoundland snowmobilers users existing trails and wood roads, and as well much of the travelling in Newfoundland is done over bogs which have as much as six feet of snow cover. Another mistake is that it is a mistake to combine legislation for snowmobilers with other types of vehicles. MR. WELLS: Hr. Speaker, a point of order. 3626

March 23, 1976 Tape no. 1359 Page 2 - mw MR. SPEAKER (Dr.Collins): A point of order has been raised. MR. WELLS: You know it is very interesting what the han. gentleman is saying, but he has not entered into the realm of debate which is not permitted, Mr. Speaker. MR. SPEAKER (Dr. Collins): The han. Leader of the Opposition. MR. ROBERTS: Mr. Speaker, to that point of order. With all deference to the gentleman from Kilbride (Mr. Wells), Sir, I have been listening to what my friend and colleague has been saying, and I do not think he has been entering at all into the realm of debate.

He has been entering into nothing more or less than a few comments in support of a petition he has been mak1.ng, and to explaining and expounding upon the contents of that petition, Sir. Debate is completely different in nature and in intent and in kind. MR. SPEAKER (Dr. Collins): The han. member did seem to be explaining the reasons behind the petition, and I think he may continue,but I would remind him that in presenting a petition comments should be limited to five minutes in total. The hen. member may continue. llR. HODDER: Mr.

Speaker, as I was saying, it is a mistake to try to combine legislation for snowmobiles with that of other types of vehicles. The snowmobile travels on cut trails well covered with snow and on bog land. All vegetation on the latter, the bog land, must likewise be well covered with snow otherwise the machine would sink into low growth and become inoperable. The heavier vehicles used by the power companies, the J-5 vehicles and other can push through low growth and is more likely to cause damage to vegetation. As well, Mr.

Speaker, the residents of my district feel that the Wltite Paper lacks some important points; namely, that a system of trails with standard signs and basic facilities should be developed, that trail maps should be made available to the public of areas such as old woods roads and other areas where snowmobiling may be desirable,and that a programme should train 362 "i

March 23, 1976 Tape no. 1359 Page 3 - mw .I!U'. ttoddet. the snowmobiler in the safe handling of the machine and its impact on the environment. The White Paper leaves out much that should be· there and it is b~d on a lot of incorrect ili.fo:nuation. This lllllkes it imperative that the infonnation shoul .d be ,gathered by a select committee who should be empowered to t.alk to peo.ple all over the Island aad as well to look at studies on snoWI!lobiling and talk to environmentaliSts. I ~k· that this petition b.e ta]:)led and referred to the department to which it r .elates. 3628

Harch 23, 1976 Tape 1360 IB-1 YR. SPEAKER (Dr. r:!ollins): The hon. tUnister of Tourism . ~~ . HICKEY: t'r. Speaker, I would just like to offer a few comments in relation to v1hat my han. friend has said. I am sure that he does not tvish the House to be misled. I am sure he does not make his comments - he possibly feels that he is right in the comments he has made in relation to my stand initially in my particular stand today c>r on previous days in this House.

I wish to say tc> him and to the House,indeed,that my position on the White Paper has never chaneed from day one. ~fy posi.tion t>as very firm on the need for something to be done to regulate those vehicles in the Province. l'.epeated state­ ments by me to the net.;s media in an effort to convince the public at large that the Hhite Paper was indeed but a White Paper, not regulation, that indeed there was a necessity for it, and in fact that there was public demand for it.and that that is why GOVernment ~dshec1 to regulate the movement of those vehicles.

At no time,and indeed in Corner Drook - and I well remember the tape done in Corner Brook - clicl I say that there ~10uld not be changes, that government ~·as in any '"ay inflexible or not flexible to the representations by people.

Certainly in Stephenville ,t·:hcn I!ly friend tied in the member for Lal'oile (~~r. !~cary) and his comments, and the nwmber for LaPoile (~'r. ~:cary), I am sure, ca.n very quickly verify that in his company c>n our l 'ay to Port aux Basques in l'leeting the news media in Stephenville I n1ade it very, very clear that the h'hite Paper 1-ms indec<! but a t-'orkinr, paper, but a startinc; point,and government's intent to bring this very critical and important issue before the people,in the strict sense of the word to see pure de!'locracy at work and ~::ive the people an opportunity to reflect their wishes to us 1 in that particular stance, ~·r.

Speaker, my position is unchanged. It ll.:>s never been so firm as not to agree,and indeed acknowledge,that some of those regulations would eventually not become la~r in their present fonn. 3629

Narch 23, 1976 Tape 1360 IB-2 MR . SPEAKEP (DR . Collins): Are there any further petitions? The bon. member for Trinity-Bay de Verde. _!TR. F. ROHE: Y.r. Speaker, I w1.sh to speak in support of the petition so ably brought to the House by my colleague from Port au Port (Mr. Hodder), anrl, Sir, I congratulate him on his positive suggestions.

This gives me an opportunity really under the rules to answer a question put to me by the minister in reaction to my petition when he asked me whether or not there has already been enough information put into government so that it would not necessitate the holding of public hearings throughout the Province, Well, Sir, I think that what we are hearing here today and what we have heard in previous days, the number of petitions coming from the public and the people of Newfoundland,is the answer to the minister.

Wi have had so many petitions asking for public hearings that it is pretty obvious that people want these public hearings and they want to get more information and they want to have more input into any forthcoming legislation. Sir, the minister also pointed out that the White Paper came about as a result of a public demand,and I commend the minister for bringing forth this White Paper. Now we have a second public demand and that is for public hearings. I would just simply appeal to the minister to have these public hearings.

After all, Sir, this was the government that promised that it would listen to the people and it would tell it the way it is 9 and in keeping with that philosophy I would ask the minister to have these public hearings. MR. ROBERTS: Well said. MR. SPEAKER (Dr. Collins): Are there any further petitional NOTICES OF HOTION: MR. SPEAKER (Dr. Collins): The hon. Minister of Finance. MR. DOODY: rlr. Speaker, I have a series of mbtions, Sir, relative to supply. One~I hereby give not:lce I will on tomorrow move the hon. House into a Cor:nnittee of Ways arid J!eans of raising supply to be granted to Her Maj esty.

Also,I give notice that I will on tomorrow move the bon. House into a Committee to Consider Supply to be granted to Her Majesty. I give notice that I will on tomorrow move that the 3630

~· " arch 23, 1976 '!npe 13GO _:-r.. DOODY: Hou~e resolve itself into a Committee of the \/hole to consider ce rtain re :;ol u tions for the z ranting of :interio supply to Her IB-3 ':tjl'sty . And I Dlso give notice, Sir, th:lt I w:ill on tomorro"' move th.:l t the House resolve i tself into Commi ttee of the Whole to consider certain resolutions for the granting C'f suppl ementar y supply to Her ~lajesty . ~!R . ROllSRTS: ~: o inte rim supply? l'P . • DOODY: Yes, that Has the third one. NR. ROBERTS : Oh! That 1.'85 interim. 363 1

}larch 23, 197fi Tape No. 1361 N¥- 1 >.m WELLS: I mtght say the Rouse is a~· are that it is intended to have the ~udget Speec h on Friday. ANSHERS TO O:JESTIONS FOR WHICH NOTICE HAS BEEN GIVEN: '·'R. SPEAKER (DR. COL:.INS): The hon. }\inister of Health. ~. COLLINS: ~r. Speaker, I undertook yesterday to provide some :Information to ~he House with regard to ~'edicare payments and for }fedicare payments in various provinces of the country. I indicated that some of the provinces, perhaps most of them, did indeed have some form whereby recipients of those services pay a fee or a premium or whatever.

The latest information which I got today from the ><edicare Commission indicates that Ontario, Alberta, British Columbia and the Yukon Territory do have a premium system. The Province of Quebec has a charge based on income and the Province ofNbva Scotia has a balanced billing system. I have adequate copies for all the members and the press. ~m. ROBEWTS: No deterrent fee. ~~-. C0LLINS: That is semantics. ~~-. ROBERTS: It is not semantics. ORAL QUESTIONS: ~!R. SPEAKER (DR. COLLINS): The hon. Leader of the Opposition. I'T' • R!'BEPTS: Thank you, Mr. Speaker, I will go at the ~finis ter of Health later.

"Y question now, Sir, would be addressed to the Premier, and it is nice to see him back in the Province and even in the House. Vould the Premier, Sir, confirm that negotiations have been begun with the Province of Quebec to reopen the contract under which the Churchill Valls Labrador Corporation sells a large part of the Upper Churchill po,·rer and perhaps all of it, or nearly all of it, to Hydro-Ouebec. >·IP,. SPEAKER (DP.. COLLINS) : The hon. the Premier. PRE}!IER ~ IOnRES: First of all, Hr. Speaker, I ~•ould like to say in reply to both parts of the comment and the question of the Leader of 3632

Tape No. 1361 N~'<- 2 PREHIF.P.. t'f10l'ES: the Opposition that I did get hack from Ouehec City in time to be at the !louse today. He could not make it last week from Hogan's Pond. Having said that - MR. RnBERTS: That was because of lousey snow clearing operations. PRE'M'IER }'OO'P.ES: - I will go into the second part of the question in saying that in any conversations and discussions we had ~rith Ouebec ~-rj 11 obviously be discussed in this House when any decision is to be made. ~'R. ROBE'f:TS: "r.

Speaker, a supplementary, in vie1>1 of the fact I do , not have government jets and the government cannot keep the roads ploughed, may I ask the Premier - PRE}fiER ~!nORES: Why do you not fly on your own? ~. ROBERTS: Mr. Speaker, the Premier has already been reprimanded in this session for hi~ lan~uage. I would urge him to try to keep himself under control, Sir. MP. SPEAKER (np. COLLINS) : Order, please! ><R. r.nRF.'f:TS: }<ay I ask the Premier, Sir, by way of a supplementary question - SOJ'J': llf'N. }'EMJ3El'.S: Oh, oh! Take it easy, ~·R. SPEAKEll (DR.

COLLINS): Order, please! }f'R. 'P.f1BF.RTS: Tf hon. gentlemen do not wish to observe the rules, Sir, perhaps they should have absent themselves from the House. tl.ay T ~tsk the T'r<>mier by "'"'Y of ~rr.. uTNmnrm: ro ahc:~.d. ~!'P.. ROllE'PTS: I thank hon. gentlemen, Sir, for their graciously allowing me to proceed under the rules of the House. It is very decent of them.

Would the Premier, Sir, give the House an assurance that no commitment to supply Lo•rer ChurchHl Power to the Province of Quebec or to Hydro­ Quebec at preferential or uneconomic rates is involved in any reopening of the contract under which the Upper Churchill power is supplied? P'RE~~ER ¥On1lY.S: Mr. Speaker, I am not sure what the Leader of the Opposition 363~)

March 23, 1976 Tape No. 1361 NM- 3 PREMIER MOORES: was saying but I will say yes anyway. ¥R. SPEAKER (DR. COLLINS): The hon. member for LaPoile. Mr. Speaker, would the hon. Premier indicate to the House if during his visit to Quebec did he discuss the possibility of the development of the Lower Churchill, the tunnel underneath the Straits of Belle Isle and the transmission line 0 and if so could the Premier let-the~ouse have a few details about these matters? PREMIER MOOORES: The fact is, Mr.

Speaker, yes,these things obviously were discussed and we discussed the situation as far as energy is concerned in Quebec and in Labrador and how it can beneficially effect both Provinces. There were discussions and before any decision is made and any agreement is reached they will be discussed in this House. MR. SPEAKER (DR. COLLINS):. The hon. member for Eagle River. MR. STRACHAN: Y.y question for the Minister of Tourism.

Could the ~!inister of Tourism tell the House whether in view of the statements yesterday that his department is not involved in enforcement of the new caribou regulations but that it is the jurisdiction of the police, I presume he meant by the police the RCMP, whether he is intending to disband the Wildlife Enforcement Division, operating,! believe,under the asupicies of his department? MR. SPEAKER (DR. COLLINS): The hon. Minister of Tourism. MR. HICKEY: Mr. Speaker, - ·that question is not clear. Would the hon. gentleman repeat it~ ~. STRACHAN: You wish it repeated. MR. ROBERTS: Try it again 'Ian'. ~.

STRACHAN: The minister in his statement yesterday to the House indicated that the enforcement of the new caribou regulations were not carried out by his department but were carried out by the police agenices, I presume the RCMP, ·My question is that if this is so then does he intend therefore to disband the Wildlife Enforcement Division which is currently operating under the auspicies of his department? MR . SPEAKER (DR. COLLINS): The hon. Minister of Tourism. 3634

l'~- ~larch 23, 1976, Tape 1362 RH - 1 l'R . HICKEY: I did not say that the law was not enforced by any officia] of my department yesterday. What I said - the hon. gentleman asked me yesterday 1ohat I was going to c~o in the light of the fact that the residents of the Northern

section of Labrador had indicated they were going to disre~ard the law. I simply said that I was going to do nothing, because I do not do anything '~hen it comes to enforcing the 1 a'• by way of going out and physically enforcing it. I simply said t0 the hon. gentleman then,and I repeat it now,that the law enforcement people concerned with those regulations or law would obviously enforce it, namely, - I do not think I named them yesterday,but I will name them now -the R.C.M.P., wardens, certain forestry officials and any others that may be appointed under the Hild Life Act.

I can only reply again and say that those people would obviously be required to enforce the law if the residents disregard the law because,let us face it, ~lr. Speaker, people cannot choose the laws they wish to adhere to and keep the good laws and break the ones that they do not like. None of us can do that and we are all citizens of the Province. HR. STRACHAN: A supplementary, a supplementary. I thank the minister for his reply. I do not understand why he did not f!:ive it to me yesterday when I asked the question.

But while we are continuing on, in a further statement he stated that the regulations were being brought in,in his opinion,for his concern of the depletion of the herd. In other wor~s, the caribou herd was becoming depleted. I ask him 1f he could state this is so,especially in the light of the fact that a recent caribou census carried out by his department estimates an extremely healthy herd of caribou of 15n ,n'l() population '1-Thich are believed to be over-grazing? MR. SPEAKER: The hon. Minister of Tourism. }1R. HICKEY: Nr.

Speaker, obviously one of the concerns for not going all the Hay insofar as changing the regulations that the residents wanted, ls to insure that there is proper management of the herd and that there ~re some conservation methods included in that management programme. I 3635

March 23, 1976 Tape 1362 MR. HICKEY: can only suggest to my hon. friend that while his statistics might indicate that there is a very healthy herd - so is there a very healthy herd of moose on the Island part of the Province - that does not say that we are going to permit or allow wholesale slaughter. If, Mr. Speaker, there comes the day or there comes a situation when the caribou herd in Labrador is in such a healthy state what we can relax the rule so that people can take many more caribou, then certainly my department officials, I am sure, will be only too glad and will be the first ones to recommend it.

I can .assure my friend that I would be the first one to go along with such a recommendation. MR. STRACHAN : Mr. Speaker, a supplementary. MR. SPEAKER: The hon. the member for Eagle River. MR.

STRACHAN: Since the minister has explained about the conservation of the caribou, I would like to ask the question whether the enactment of stiff caribou regulations designed, as he states, to conserve the herd and being imposed on local Labrador hunters is so when his department is actively considering opening up the Northern herd to outside sports hunters, and also when RH-2 sports hunters from Quebec are killing considerable caribou within the boundaries of Labrador without any enforcement from this Province? MR. HICKEY: }fr.

Speaker, my only response to that question or that commentary can simply be that the wildlife resources of this Province are for all the people of this Province, be it Labrador or the Island. They are also, Mr. Speaker, they are also, as _part of the overall tourism package that this Province has been in the past and will continue in the future to promote, some involvement and some licences for out of Province people, he they from Quebec, be they from the United States or wherever, from Germany.

Certainly there have been instances when people have come from as far away as the Scandinavian countries and Germany and several other areas. I do not think, 3636

March 23, 1976 Tape no. 136 3 Page 1 - mw Mr. Hi~key. Mr. Speaker, that we can confine totally the caribou herd in Labrador to the people who live in Labrador. Our regulations presently certainly indicate an awareness by this government that the people of Labrador indeed have special needs and that those needs - I think this government have gone a great number of steps to recognize those needs and to improve the regulations from what they were. I said to my hon. friend yesterday, and I repeat it again,that the changes made this year should go a fair distance in helping the situation.

I have not said, and I do not say now~ that we will not consider the situation next year in the light of our experience, but I do not think we can just approve all the requests, and it is obvious that my professional staff indicate that that would be a very dangerous precedent to do so. For example, one of those regulations deals "ith residency in Labrador. If we were to approve the requests as made by the people of Labrador with regard to residency in that

section of the Province,it would mean that anyone from the Island could move into Labrador - say, they were going to be citizens of Labrador or living in Labrador - and go and hunt. We obviously could not do that. MR. SPEAKER (Dr. Collins): The hon. member for Twillingate. MR. SMALLWOOD: Mr. Speaker, I thought I heard somone say that the herd of caribou in Labrador is now over 100,000. Was it 120,000 or 150,000 head I would like to ask the minister how many herds of caribou are there in Labrador? Is there one or are there more?

And to what extent is the herd of carbiou in Labrador today the direct descendant of the herd that the government captured here on this Island about twenty years ago under Dr. Fred Rowe, when he was Minister of Resources, captured in Newfoundland and flown down and set lose, I think, in the Mealey Mountain area? Are all the caribou that are now in Labrador descendant from that one group, or are there other herds as well? 3637

March 23, 1976 Tape no. 1363 Page 2- mw MR. SPEAKER (Dr. Collins) : The hon. Minister of Tourism. MR. HICKEY: Mr. Speaker, I cannot answer the question adequately for my hon. friend. I will certainly get the information. I can tell him that the population of caribou in Labrador fluctuates, and I cannot say that I agree with the figure of 150,000, because, for example, you know, there are caribou in Labrador that are Newfoundland caribou this month, but they might be Quebec caribou next month. MR. NEARY: Bilingual. MR. MORGAN: Bilingual courses. MR. HICKEY: So, Mr.

Speaker, it is rather difficult to put a count on that kind of a herd of caribou. I can certainly say to my hon. friend that to my knowledge there is but one herd of caribou in Labrador. SOME RON. MEMBERS: Oh, oh! MR. SMALLWOOD: Will the minister find out1 This is not a very funny thing at all. I do not find any humour in it. To me it seems to be one of the vital resources of this Province ·• SOME liON. MEMBERS: MR. SMALLWOOD: MR. HIQG:Y: MR . SMALLWOOD: Hear, hear! It is not a laughing matter at all. It is certainly not.

And if there are 100,000 head of caribou in Labrador it must be one of the greatest herds in North America. It is an incredible number,if it is true. Would the minister undertake to find out how many herds there are and approximately how many? MR. HICKEY: I certainly will, Mr. Speaker, and I agree with my hon. friend that it is not a laughing matter especially when you are on the receiving end of the flak that I get, both about - the moose and the caribou herds.in this Province. I will get the information. MR. SPEAKER (Dr. Collins): The hon. member for LaPoile. MR. NEARY: Mr.

Speaker , I would like to ask the Uinister of Health that in view of the information that has come out recently as a result of the Royal Commission from Ottawa into the eyeglass industry in Newfoundland, would the minister indicate to the House if the government now intends to call public tenders on eyeglasses that are supplied by the government to recipients o~ social assistance, about 4,000 or 5,000 pairs every year1 3638

~!.arch 23, 1976 Tape no. 1363 Page 3 - III'N MR. SPEAKER (Dr. Collins): The hon. Minister of Health. MR. COLLINS: Mr. Speaker, the officials in the department have been instructed to obtain eyeglasses at the very best possible ptices available, always bearing in mind, of course, the quality which is al~;~o a consideration. MR. NEARY: Mr. Speaker ., a supplementary, question. Do I understand from the minister's answer then that they invite public tenders or they call tenders? Or does the department have a list of prices of their ow:o. in the d~paTtm.ent? MR. SPEAKER (Dr. Collins): The bon. Minister of Health. ~m.

COLLINS: Mr. Speaker, I am convinced after looking at the inforljl3tion which was made available a couple or three weeks ago that we are getting a real good deal in terms of price and in terms of quality, and we cannot always substitute price for quality, because after all if glasses are going to be useful, one has to be able to improve one's sight by the use of them. Whether tenders are practical or not, I do not know. L will certainly coJ19ider that. MR. NEARY: Mr. Speaker, a supple~ntary question. 36 3 ~

Harch 23, 1976. HR. NEARY: Tape 1364 RH - l Would the minister indicate to me how he knows that he is getting a real good price, getting a real good bargain? Would the minister tell me what figures he has to compare the prices here in Newfoundland with what he is getting, what he is pay~ng for eyeglasses? HR. COLLINS: It is relative. HR. NEARY: It is relative? How does the minister make a comparison? HR. COLLINS: Relative prices. MR. NF~Y: I do not follow the - HR. SPEAKER (Dr. Collins): The hon. member for Baie Verte-White Bay. MR. SMALLWOOD: Mr. Speaker, if I may, a supplementary. HR.

SPEAKER: The hen. member for Baie Verte-White Bay. MR. T. RIDEOUT: No, if you have a supplementary, I will yield to the hen. gentleman. MR. SMALLWOOD: Mr. Speaker, if I could ask a supplementary. MR. SPEAKER: A supplementary. HR. SMALLWOOD: If it is correct and the minister knows that there are approximately 4,000 pairs of glasses delivered to the Newfoundland people by him, by his department 1 you are talking there of perhaps a couple of hundred thousand dollars or more. Surely the minister will buy those, he buys them and pays our money for them, he will buy them on tender, will he not, on open tender? MR.

SPEAKER: The hen. member for Baie Verte-White Bay. MR. T. RIDEOUT: Mr. Speaker, I would like to address a question to the Minister of Fisheries. It is related to the operation at the fish plant in LaScie. In view of the fact that Newfoundland Quick Freeze is now working in the last year of its three year option to operate LaScie plant, would the minister inform the Rouse what if any plans the govern­ ment has for the future operation of that plant following this year? MR. l~. CARTER: Mr. Speaker, I ~~11 take that question as notice. 3640

~larch 23, 1976. Tape 1364 RH - 2 MR. SPEAKER: The hon. member for LaPoile. MR. NEARY: Nr. Speaker, I would like to ask the Minister of Transportation and Communications, Sir, what he is doing about the situation between Summerville and Knights Cove,where the school buses are unable to operate in the minister's own district, what steps he has taken to correct that situation and get the road in passable condition so the kids can get back to school? MR. SPEAKER: The Hinister of Transportation and Communication. HON. J_. MORGAN: Mr.

Speaker, every possible action is being taken as of yesterday noon to correct the situation and improve the road conditions in the Bonavista South district. MR. SPEAKER: The hon. Leader of the Opposition. HR. E. ROBERTS: Mr. Speaker, I have got a question also for the Minister of Health. Would the minister confirm, Sir, that no province in Canada charges a deterrent fee at present? MR. COLLINS: That question is out of order. HR. ROBERTS: Mr. Speaker, if the hon. gentleman wishes to raise a point of order I shall deal with it.

My question is, Sir, would the minister confirm that no province in Canada charges a deterrent fee in respect of medical care insurance plans? AN l!ON. MEMBER: You cannot ask the minister }1R. COLLINS: Mr. Speaker, if the hon. Leader of the Opposition will define what he means by deterrent fee I will consider answering it. HR. ROBERTS: Hr. Speaker, I should be happy to try to define it. There is a standard definition accepted by anybody, Mr. Speaker, in the health care field which is a deterrent fee is a fee charged on the user basis as opposed to an insurance premium. }ffi.. NEARY: On a point of order, Mr.

Speaker. My understanding, Sir, this is the oral question period, not a period of explaining things. MR. ROBERTS: Mr. Speaker, to that point of order. I agree with the gentleman from LaPoile. I have no right to answer the minister. The minister is supposed to do the answering, Sir. MR. NEARY: Well then sit down and do not be breaking the rules. 3641

March 23, 1976. Ta-pe 1364 RH - 3 MR. ROBERTS: Hr. S-peaker, to the point of order, if I may make the -point. In view of the fact that the minister has not answered but instead has asked a ~uestion I am doing my best to help him to -perform his function. I am doing my best to meet his request, Mr. Speaker. MR. J. LUNTIRIGAN: Hr. Speaker, on a point of order. The hon. Leader of the Opposition who is an ex-pert on parliamentary rules - MR. ROBERTS: There is a point of order before the Chair now, Mr. Speaker. There is a point of order before the Chair raised by the gentleman from LaPoile (Mr. Neary).

I submit that before the gentleman from Grand Falls says anything Your Honour should make a ruling on the one from LaPoile which I suspect is well taken. MR. SPEAKER: The hon. House Leader. MR. R. WELLS: Mr. Speaker, I think it has become clear now, Mr. Speaker, that this series of questions to the Minister of Health,and then in turn response by the Leader of the Opposition, has got out of hand. It is somewhat confused. Nobody is sure now what is being discussed.

If the hon. member has a question on this point I suggest that it is more appropriate that it now be placed on the Order Paper so that the minister can see precisely what he is expected to answer. AN !ION. MEMBER: Hear, hear~ _MR. SPEAKER: Order, please: I think I have a reasonable grasp on where we are. The Hinister of Health did remark that he wished information from the hon. House Leader. However, as has pointed out this is Oral Question period and it would be the right of the House to give that leave but not any individual hon. member.

I take it from the remarks made that there is not unanimous agreement that the hon. Leader of the Opposition be given the permission of the Rouse to make a statement. We will therefore go on to the next oral question. The hon. member for LaPoile. MR. NEARY: I have 3642

March 23, 1976 Tape 1365 PK- 1 Mr. Neary: A question for the Minister of Transportation and Communications, Sir. Would the ~inister please tell the House if he has held any discussions with CN of late in connection with the kind of ferry service that we are going to have on the Gulf this Summer for the tourist industry in view of the fact that there are reports that the William Carson may be taken out of service and put on the Labrador-Newfoundland run? Does the minister have any up-to-date information he could let the House have on that situation? MR. SPEAKER (DR. COLLINS): The hon.

Minister of Transportation and Communications. MR. MORGAN: Mr. Speaker, because of reports in the media yesterday emanatin~ from the Melville-Goose Bay area mainly that there would be a service established this Summer by CN operating from Lewisporte and stopping at St. Anthony on to Goose Bay, and they would be using the William Carson , and the reports indicated - the news stories indicated that this was a confirmation by the federal minister, the Hon. Otto Lang,who held meeting with a delegation from Goose Bay just recently.

In checking with CN, the CN officials informed me as of today that the only possibility of establishing that service by using the William Carson will be if they can find a boat to replace the William Carson. The service will not be established to Labrador unless a boat can be found to replace the boat to be moved from the Gulf ferry service. MR. SPEAKER (DR. COLLINS): The hon. member for Port au Port. MR. J , HODDER: Mr. Speaker, a question to the hon. Minister of Highways. Is the Minister of Highways - MR. MORGAN: Transportation. MR.

HODDER: I am sorry, the Minister of Transportation - Is the Minister of Transportation MR. ROBERTS: And do you not forget it. MR. HODDER: - aware of the - AN RON. MEMBER: Oh, oh! 3643

March 23, 1976 Tape 1365 PK- 2 MR. SPEAKER (DR. COLLINS): Order, please! MR. HOODER: - condition of the roads leading to Black Duck Brook, Fox Island River and Mainland in the district of Port au Port? And is he aware that this happens every Spring, and are there plans to improve those roads so that this does not happen every time we have a Spring break-up? MR. ROBERTS: Hear, hear! MR. SPEAKER (DR. COLLINS): The hon. Minister of Transportation and Communications. MR.

MORGAN: Sir, yes I am indeed aware that every Spring all gravel roads are problems in this Province, and the only solution is to upgrade the roads and pave them. The answer to the first part of the question, I have received no representation, none whatsoever from the community mentioned by the hon. member. MR. SPEAKER (DR. COLLINS): The hon. member for Bay of Islands. MR. WOODROW: A question, Mr. Speaker, to my colleague the Minister of Justice. MR. ROBERTS: Here,we go. MR. WOODROW: My colleague the Minister of Justice. Okay by the Leader of the Opposition? MR. ROBERTS: the world. Agreed! I am in favour.

It brings the minister up in MR. WOODROW: You always seem to disagree with me. I do not know why. MR. SPEAKER (DR. COLLINS): Order, please! MR. WOODROW: I would like for him to explain the type and status of the correctional institution planned for Stephenville. And secondly, MR. ROBERTS: Justice'Alex 1 rules. MR. WOODB.OW: to advise, if any such institution is planned for Woods Island, two miles from the Mainland, and of course in the Bay of Islands district? MR. SPEAKER (DR. COLLINS): The hon. Minister of Justice. MR. HICKMAN: May I deal, Mr. Speaker, with the second half of the 3644

Narch 23, 1976 Tape 1365 PK - 3 Mr. Rickman: question first. There has been no consideration at all given to the establishment of a correctional institution on Hoods Island in the Bay of Islands. With respect to the first part of the question - ~m . s~IALLWOOD: And there is no intention of building one? MR. RICKMAN: Most assuredly, Mr. Speaker, there is the Alcatraz philosophy is gone out of date, and I do not anticipate that there will ever be any consideration put ting institutions of that kind on islands.

But with respect to the first part of the question, officials from my department and from the Department of Public Works are pres~:ntly in the Stephenville area, and I should be in a position oo report to the House or to the hon . gentleman within the next two or three days when they return and furnish a report to me. 3645

March 23, 1976, Tape 1366, Page 1 -- apb MR. SPEAKER (Collins): The hon, the Leader of the Opposition. MR. ROBERTS: Mr, Speaker, a question to the Minister of Municipal Affairs. I believe he is the minister to whom "'· this should be intended,if not perhaps the gentleman from St. John's West, the Minister of Intergovernmental Affairs is the appropriate minister, ~ut I believe it is the Municipai Affairs Minister.

Could the minister tell us when the City of St.John's will be informed whether or not the government will be able to honour the commitment made on, say the Z3rd of 24th of August last year under which the Government of the Province would pay 15 per cent of the cost of upgrading the Parkway which runs from the Portugal Cove over to the Trans-Canada Highway at the interchange with Freshwater Road? MR. SPEAKER: The bon. the Minister of Municipal Affairs and Housing. MR. PECKFORD: ~r.

Speaker, we are presently having a committee established of officials from the Department of Municipal Affairs, Public Works, Transportation and Communications and people from City Hall who are discussing the overall improvements to the Parkway and trying to develop a

schedule over the next eouple of years in which this can be undertaken. Financing and so on for this project and the

schedule will become known to members of the House when these things are decided. SOME RON. MEMBERS: Hear, hear! MR. ROBERTS: Mr. Speaker, just for the record I wish to debate that on the Late Show. MR. SPEAKER: The hon. the member for LaPoile. MR. NEARY: Mr. Speaker, would the Minister without Portfolio, the government House Leader,inform the House if he has yet written the letter that he promised the House he would write to the Summer Games Committee in connection with their not using the public tenderirg procedure and the transaction of the land over 3646

~1arch 23, 1976, Tape 1366, Page 2 -- apb HR. NEARY: here where the Aquarena is being constructed? Has that letter gone to the Summer Games Committee yet? HR. lVELLS: Friday past. IIR. NEARY: Hr. Speaker, that letter went on Thursday or }k. Speaker, I wonder if the hon. the Premier, Sir, could tell us when he intends to make his announcement concerning the reorganization and probably a mini cabinet shuffle involving the Department of Environment and Consumer Affairs, Tourism and Youth in the interest of economy,as he promised us in July and again in Ocotber and again, I think, a couple of weeks ago? nR.

SPEAKER: The hon. the member for Windsor-Buchans. HR. FLIGHT: Mr. Speaker, this question is to the Minister of Tourism. In keeping with all the facts that were made available on the caribou population in Labrador,! wonder would the minister undertake to indicate the present population as ascertained by his department of the moose population on the Island and where the po~ulation is concentrated? HR. SPEAKER: 1'1R. HICKEY: The hon. the Minister of Tourism. Well, Mr. Speaker, I did not count them lately but at the last count - '-IR. FLIGHT: He should, Sir. ~1R.

IIICKEY: -at the last count there were 37,000 and 40,000. HR. FLIGHT: A supplementary, Mr. Speaker? MR. SPEAKER: A supplementary. '1R. FLIGHT: The minister has indicated, I think, that he would be bringing in new regulations governing the issuing of moose licences to cover this coming season. Hill the minister indicate just when those regulations will be made available to the Province or to the House or published,if he indeed intends to publish them? lfR. SPEAKER: The hon. the Minister of Tourism. MR. HICKEY: Hr.

Spea!cer, the whole system of issuing licences, big games licences~is presently under consideration by government and I cannot give a date exactly. I do not want to guess at it, I can only tell my hon. friend that at the earliest possible

March 23, 1976, Tape 1366, Page 3 -- apb MR. HICKEY: moment,because government is anxious as everybody else is to make some improvements in the present system and just as soon as this can be done, and done properly, of course, then it will be. MR. FLIGHT: MR. SPEAKER: A supplementary, Mr. Speaker. A supplementary. MR. FLIGHT: With regard to my first question, Sir, I did not expect the minister to give me the figure right now. I asked him to take it under advisement and make that figure available to the House.

Now I assume that the Department of Tourism does have an up-to-date figure,- at- least._ as of their last count, of their last survey of the moose population 1 so would the minister at some point when it is convenient for him and his department make that number available to the House? MR. SPEKKER: The hon. the Minister of Tourism. MR. HICKEY: Well, Mr. Speaker, my bon. friend might have thought I was joking with him but I was quite serious, Sir. I do know the population of the moose in the Province and it is between 38,000 and 40,000. That is uorrect. MR. FLIGHT: Between 38,000 and 40,000? MR.

HICKEY: Between 38,000 to 40,000. MR. SMALLWOOD: In the Pro~ince or on the Island? MR. HICKEY: The Island. HR. SMALLWOOD: The Island? MR. SPEAKER: The hon. the member for LaPoile. MR. HICKEY: There are no moose in Labrador as far as I know. MR. FLI GHT: Okay, where are they? MR. NEARY: Would the Minister of Tourism - MR. FLIGHT: Where are they 'Tom 1 ? MR. SPEAKER: Order, please! HR. NEARY: Would the Minister of Tourism who is responsible for parks inform tr·e House if the fees for entrance to provincial parks this coming summer will remain the same or if they will be increased during the coming season? 3648

March 23, 1976, Tape 1367, Page 1 --arb NR. ST'F:.AJ<P11: The hon. the Minister of Tourism. HR . HI CKF:Y : !1r. Speaker, the matter ls under discussion at the moment and T certainly cannot indicate to the House one way or the other at this point, but I certainly will as quickly as I can. I know that the matter is being considered and I might also inform the !louse that the fees charged by my department in Provincial parksare the lowest anywhere l n the country.

The cost I might add - I am sure I do not have to point this out - is ever increasing. >fuat the final decision will be is anybody's guess at this point but certainly we are in the best position in the country. How long that can continue in the light of - MR. NEARY: We will find out on Friday, I guess. MR . HICKEY: - rising costs I certainly do not know at this moment. I1R. NF.ARY : r•r. Speaker, I wonde-.;; if the hon. the Premier could tell us ~~hat the Gander Development Corporation is up to these days? MR. SPEAKF:R: Order, please! Order, please! Is this a supplementary? MR. NEARY: I beg your pardon, Sir?

Sl'P.AXER: Is this a supplementary? !1R. NF.ARY : No. No, Sir. MR. SPEAKER: Hould you permit me to say that one more question only will be asked in view of the time. '1R. NEARY: Then I will yield to the Leader of the Opposition. MR. SPEA]'(ER: The hon. the Leader of the Opposition. ~. ROBERTS: Mr. Speaker, - r will not be here tomorrow at 0uestion Period 'Steve' so you can have two for me then- Mr. Speaker, my question is for the House Leader,the gentleman from Kilbride (Mr. Wells). Could he tell us, Sir, when the Standing Committee on the public accounts will be appointed.

The motion has been on the Order Paper for a few days now, the public accounts have been tabled for a week or ten days, when will the Committee be appointed and when can they begin their work? 3649

March 23, 1976, Tape 1367, Page 2 -- apb I-1R. SPEAKER: The han. the House Leader. MR. WELLS: Mr. Speaker, I was proposing to meet with the House Leader on the other side within the next day or so, possibly tomorrow it being Private Members' Day, and discuss this matter and the composition of the various committees. ORDERS OF THE DAY MR. WELLS: Motion 8, Mr. Speaker. MR. SPEAKER: Motion 8 deals with the motion for which the hon. the House Leader gave notice on the last day and deals with the oil re:inery at Come By Chance. MR. ROBERTS: Mr.

Speaker, just before the minister begins I want a question of procedure set straight if I rnight, Sir. I regard this as being a substantive government motion even though it it somewhat wishy-washy in its conclusions, but I wonder if I could raise that as a point of order because it relates on possibility of amending it, it relates to the rights of, you know, the minister to close the debate and so forth. Could we have a ruling, Sir? I do not think it is hypothetical, . I think it is an actual question.

I believe it to be a substantive motion.but I want to be certain that, in fact, that is the correct view of the situation. I-1R. WELLS ; Mr. Speaker, when the motion was framed it was framed under the provision that Your Honour read a few days ago when the motion was put on the Order Paper. It is a question of asking for the opinions and advice of the House rather than a confrontation of one side or another. This is a private company that has gone bankrupt.

Now obviously,as the motion itself says, it would be the wish of, I am sure, this House as well as the government that everything legitimately possihle that can be done to see that refinery be reopened would be done and the government is therefore asking the advice of all members. MR. ROBERTS: MR. WELLS: ~m. ROBERTS: You feet it is a substantive motion, not a procedural one? Yes. I think it is substantive. 3650

lf!l . !VET.!$: I think it is substantive. 'in. ROaF.RTS: Okay. I just wanted to be sure that that is the wa)' the Speaker views it. 'tR. S~!IILL~!OOD: Hr . Speaker, to a point of order. It is important that we should have an answer of this question, not from the House l.eader ., interestin~ as that is, but from Kr. Speaker . Is it a substantive motion? Only the Speaker can rule on that . '~ . ROBP.RTS: I think they both could. tf!C SMALLlmOD: No. ~ - SPEAXER: ln this matter I think this could be handled in one of two ways.

I would undertake to give a ruling on this a littlt' later , hut on the other hand, T believe that the !louse as a whole coulcl reach an understanding in this matter. r:c-uld T therefore put it 'tO the !louse that the House understands that this iJ<: a suhsta'ltive motion and if tl,cre is no dissenting voice He t1ill treat it as such? ~ • ROBERTS : ~fR . SPF.AKER: 'We so agree, Hr . Speaker. It is agreed then that this is a substantive motion and the hon . . minister,h aving spoken once 1 when he speaks ~gain he ·~11 close the debate. The hon . the M:inis ter of M:ines and Rnergy . HR.. \JP.LLS : If T may, Hr .

Speaker , 3651

Jlfarch 23, 1976 Tape No, 1368 NM- 1 ~. WELLS: it makes an awful lot of difference,you know, how it is treated but if ~mbers wish to propose amendments to it then by all means,and we w111 deal with it in that way. MR. SPEAKER (DR. COLLINS): The hon. Minister of Mines and Energy. SOME RON. MEMBERS: Hear! Hear! MR. CROSBIE: Mr.

Speaker, the motion before the House of course is a motion that is put before the House so that the Rouse can debate the unfortunate situation at the Come By Chance Oil Refinery, so the government can explain what has happened or give information to the Rouse and listen to what any hon, member wants to say about the situation or any suggestions they have to make.

In opening this debate I intend to outline the history of this project briefly - certainly what has happened in connection with the project since this government took office in January 1972 - what has led the oil refinery to its present situation, what the causes of that were as far as I can see,and what is in the interest of this Province •o happen now that this refinery is in the present situation that it is.now in, which is that the refinery is insolvent, the companies that operate and manage the refinery are insolvent and where we should go from here. Now, Jlfr.

Speaker, there seems to have been so far two strains of criticism"of the government, if there have been any,in connection with the oil refinery project. One, ' some charges that were made shortly after the petition for insolvency was laid in the Supreme Court of Newfoundland, made by the member for Twillingate (Mr. Smallwood) that I personally had caused the shut-down and the insolvency of this refinery,which ridiculous charges and statements I have replied to publicly and do not intend to deal with in this debate unless they are repeated and then I certainly will certainly deal with them.

And the only other strain of criticism of the government that I have heard is whether the government could have done anything to prevent this, could the government have ,aomehm~ prevented the present parlous state of the oil refinery7 And what I am cert,tnly intending to do is put 3652

'larch 23, 1Q76 Tape No. 1368 NM- 2 l!R. CRC1SBIE: all the information before the House and explain the situation as I see it. I have been a close observer of it since January 1972 and then we can hear what other members have got to say and that we should concentrate on where do we go from here. llecause obviously, Hr.

Speaker, if this refinery cannot operate unde the ownership and management of the t'llO companies that noH have its ownership and control, or did have untU the Supreme ~ourt issued its order in bankruptcy, if they are in ~uch a state that they cannot operate and manage it then obviously the most important thing for this Province is to have the physical assets down there go into the hands of another owner and operator vJho \~ill be able to manage it and operate it at Come By Chance so that Newfoundland will have the benefit that we are supposed to have from the operation when it was first conceived. ~ow, Hr.

Speaker, just to give a bit of history in connection \~ith the matter: The oil refinery project Has first brought foryraJ!d in Newfoundland in 1967 by the government of which the member for 'J'willingate (~fr. Smallwood) was then the head. ~'R. SHALLWOOD: I was not head of the government. ~m. CROSBIE: Head of the administration .. nm~. Hr. Speaker, I do not wish to be interrupted if that can be avoided either because this is a lot of complicated matters that have be discussed- '~ho was then the head of the administration.

In 1968 certain agreements were brought before the Rouse of Assembly in connection with this project and that involved three companies. There was to be Provincial Building Company Limited, which was a company that was going to construct the refinery at Come By Chance and to be a Crown corporation; Provincial Refin!l.ng Company Limited,which was another Crown corporation, solely owned by the Government of Newfoundland, which was to ·take over the refinery when it was constructed. It was to take a conveyance of the refinery from Provincial Building and then 3653

Yarcb 23, 1976 Tape No. 1368 NM- 3 MR. CROSBIE: operate the refinery; and Provincial Holding Cotnpany Limited which was to be a holding cotnpany that was going to own the shares of Provincial :Building and Provincial Refining. That was a st=ture that was sug.gested by the Shaheen Group who bad proposed this project to the Province in the first place. Now although thesoe were to be Crowmcorpor11.t:Lons, Newfoundland Refining Company Limited, which is a cotnpany Wholly-owned by Shaheen and .always has been and from the start was Sbaheen ·' s company, Newfoundland Refining Company Limited was to have 3654

March 23, 1976, Tape 1369, Page 1 -- apb MR. CROSBIE: the exclusive right to manage the refinery, the exclusive right to purchase the crude oil for the refinery and to sell its products under agreements with Provincial Refining and Provincial Building, and Hr. Shaheen was to have, or one of his companies was to have an option to purchase the shares of Provincial Refining and Provincial Building once the original debt of the refinery was repaid. This was the scheme and it was proposed in that manner because at that time a Crown corporation was not taxable.

Federal corporation tax was not collectable, was not imposed on a Crown corporation. So that is why this structure was suggested although the Shaheen interests would have an option to take over the shares and it would no longer be a Crown corporation once the debt was repaid, assuming that the debt was repaid.

The debt at that time was to be a first mortgage of $130 million 1~hich was arranged through ECGD, the British Export Credit Guarantee Department of the United Kingdom Government,and $30 million to be supplied by the Government of Newfoundland,for which the Government of Newfoundland was to have a second mortgage,andP.CGD,or their fiscal agents Kleinwort-Benson,was to have a first mortage.

So the project was supposed to cost something like $160 million or $170 million and it was a term of the agreement that the Shaheen interests were to invest S10 million in equity in the project for which they could take subordinated debentures that would come behind the first and second mortgages. In any event, Hr. Speaker, those arrangements got changed somewhat because the following year or a year or two later the Government of Canada had changed the Income Tax law so that a Crown corporation whose shares - who any private individual had an option on their shares or whose shares - MR. SMALLWOOD: Hr.

Speaker, could we stop the noise outside this Chamber? There should be no voice heard except inside here. MR. MORGAN: The Leader of the Opposition is making all the noise. 3655

March 23, 1976, Tape 1369, Page 2 -- apb MR. SMALLWOOD: Well, various people around outside. I want to hear every word the minister says. MR. CROSBIE: Right! MR. SPEAKER: Order, please! The Sergeant at Arm is requested to take appropriate action. The han. the Minister of Mines and Energy. MR. CROSBIE : As I say, Mr.

Speaker, a year or two later - the exact dates are not important now - the Government of Canada changed the Income Tax Act so that if a corporation was owned by the Crown but its shares were under an option to private individuals,or some private individuals had some right to get those shares at a certain date in the future, it was no longer to be treated in the tax sense as a Crown eorporation,it was to be treated as a private corporation.

And that applied to the oil refinery at Come By Chance and, in fact,the change was made because of the oil ir.efinery at Come By Chance because apparently the Government of Canada felt that this was a tax loophole, that they were going to have to change if it was going to be used for projects such as an oil refinery which could generate a lot of money and presumably could make a lot of money and that this was therefore a tax loophole they had to change. In any event they changed it. Well that meant, Mr.

Speaker, that it was no longer really relevant that these be Crown corporations because the original purpose for them being Crown corporations was now gone. In any event these agreements were entered into in 1968. I do not want to get into any more detail than that about them. I am sure all the members of the House remember that I had a certain connection with it and left the government at that time primarily because of these arrangements, or the interim financing. But this is ail past history . In 1970 there were certain amendments to these agreements brought before the House of Assembly of Newfoundland.

There had been certain changes made and seyeral improvements were made that 3656

March 23, 1976, Tape 1369, Page 3 -- apb :m. CROSBIE: provided for a royalty to be paid by the companies after certain of the indebtedness was paid hac~ and there were certa in ocher changes made. It is not important to go into all these chances but amendments had to be made and they were debated on and passed by the House in 1970. And I believe it was in 1970 chat construction of the refinery started. Now, Mr.

Speaker, when the present government came into office in Janua ry 1972, of course, the refinery was well under construction, and agreements had been entered i nto and approved by the tep,islature of Newfoundland and so on. So whether we were for or nRainst the original agreements was irrelevant because the ap,reements were there and they could not be changed unilaterally and therefore it was deci ded by us that we would have a close look at what the agreements were to make sure that they were being observed by the Shaheen interests.

As long as they were observed by the Shaheen interests, if they met their obligations , if they did what they were supp osed to do, if they raised any

March 23, 1976 Tape 1370 PK - 1 Mr. Crosbie: additional money that the oil refinery was going to cost in excess of what was provided for in the first and second mortgage) if they are able to do that,fine. In other wo~ds 1 if they observed the f h kept to their bargain, the P. C. Administration agreements, i t ey or the Government of Newfoundland would do the same, and that was our attitude. And we had a look at all the agreements and reviewed the position thoroughly so that we knew what our rights were, and that was done during 1972.

Now during 1972 the promoters of the refinery, who were in charge of the refinery, in charge of the whole project, because it was only legal - you have got to get this clear - it was only a legal technicality and framework that these were ~own corporations. The people in complete charge of the project under the agreements was Mr. Shaheen and his associates c. and his companies. The government ~ had the right to check this and that, and to have reports, and Jacob's Engineering were retained by the government to act in : its behalf and so on, but the project was completely under their control.

And really Shaheen was the owner except for these legal technicalities which was thought was going to make it non-taxable. But during 1972 it became apparent that the refinery was going to cost more than it had briginally been estimated, and the Shaheen interest arranged another loan of $15 million - well they arranged two loans, two additional loans of $25 million before the refinery was completed.

And we agree~~s I say,as long as they raised the money we were treating them fairly and equitably as I hope we treat everyone- we . agreed that if they raised the $15 million, and then if they raised $10 million that these two amounts should be able to go under the first mortgage and be secured under the first mortgaae. I do not think that we had to agree to that,or we may have had to agree to it anyway, but in any event, we agreed that if they raised these amounts ,to $25 million, that they would go under the first mortgage security. So when you consider - MR. SMALLWOOD: How much? 3658

Harch 23, 1976 Tape 1370 PK - 2 MR. CROSBIE: Twenty-five million. MR. SMALLWOOD: That is in Euro dollars. MR. CROSBIE: No, no, I will explain that now, Mr. Speaker. So that the first mortgage comprises an amount loaned through E.C.G.D. which guarantees the money, the loan was through Kleinwort­ Benson and a syndicate of English banks,who are guaranteed their money back by E.C.G.D. E.C.G.D. guarantees to them that they will not lose any money on these loans.

So Kleinwort-Benson and a syndicate of English bankers are the first people on the first mortgage, and they have a guarantee from the English Export Credit Guarantee Department that their money will be repaid, So they have nothing at risk, because the English Government guarantees that part of the first mortgage. That was a loan in pounds. Then there was a first Euro dollar loan, which is also guaranteed by E.C.G.D. in the same way, and raised by Kleinwort-Benson. And a second Euro-dollar amount which was not guaranteed by E.C.G.D.

It was arranged by Kleimoort's but guaranteed not by E.C.G.D. but by UOP, Universal Oil Products, who were doing design work in connection with the refinery, and whose subsidiary Procon, and ProconlGreat Britain)Limited were building the refinery. They guaranteed the second Euro dollar amount under the first mortgage. I will come to what is owed under those later. So that the first mortgage originally was E.C.G.D. guaranteeing Kle!mmrt's on the pounds and on the first Euro dollar agreement, and UOP guaranteeing repayment of the second Euro dollar amount, which I think originally was around $10 million.

So that was the first mortgage. Well then Hr. Shaheen raised two further loar,s, because it turned out that construction was more expensive than they had anticipated. One was a loan of $15 million which he arranged through Ataka, the well known firm now of Ataka, Ataka America Limited or through Ataka, a Japanese trading company who arranged for him to get the $15 million. I will not go into all the technicalities of how it goes into the refinery, but then it was loaned by Mr.

Shaheen's companyto PRC, and it is in under the first mortgage for $15 million; and a second amount of $10 million,I believe ,is raised through the First National Bank 3659

March 23, 1976 Tape 1370 PK- 3 Mr. Crosbie: 1n Chicago . And again that amount is guranteed,I believe,by ' UOP or Procon. Anyway the $25 million additional went into the refinery and it comes under the first mortgage. And somewhere during the course of my remarks I gill tell you what is owed under the first mortgage now. So that was the first mortgage. Then the Newfoundland Government had a second mortgage for $30 million . So this additional financing was arranged by the Shaheen interest as they were obliged to do under the agreements, if it was more expensive than was originally thought.

In January 1973,as bon. members will remember,the Shaheen interest proposed going ahead ~th a new ref inery in the Come By Chance area of 300,000 barrels a day under a new arrangem .ent with the Consolidated Edison Company or some name like that, using the name EdisonJ 3660

Jlarch ZJ, 1976 Tape 1371 In-1 ~·r. CllOSIIIE : and that was nccepted by the government under certain conditions and was debated in the House and legislation was passed. So they proposed,anyway 1 building an additional refinery at Come By Chance at 300,000 barrels a day which the government was asked to supply $78.5 million under a second mortgage and ECGD would have put in so much and so on. That was in January and February of 1973. \~ell, Mr.

Speaker, if there is one refinery at Come By Chance, and that appeared to be finishing construction and going to operate satisfactorily, if one refinery ~·7as there it 1>1ould be just as well to have two refineries there although the excuse - not the excuse - but the positive benefit of the first ref1nery ~'as always supposed to be that it would lead to a petrochemical complex. This ••as the grent justificatton and excuse because a refinery by itself cloes not provide all tll<~t many jobs for the amount of money involved.

It is a capital intensive operation with say $ZOO million in the first refinery at Come By Chance and with maybe 480 direct jobs and 400 or 500 indirect. It is not a great job producer by itself but the benefit of it was supposed to be that it would lead to a petrochemical complex. So I would far rather have seen a petrochemical complex going ahead next at Come By Chance than another oil refinery. But for one reason and another the petrochemical complex could not be proceeded with and it was suggested that there be a second refinery.

In any event the government accepted these suggestions and aD agreement was entered into and debated in the House for the second oil refinery. !low, ~~r. Speaker, one of the conditions of the government participating in this arrangement for a second oil refinery that has been set down by the government when dealing with the Shaheen interests - there are a number of conditions and it would be a waste of our time to go into all the conditions - but one of them was that before the government could become obliged to proceed with the second oil refinery the Shaheen interests had to arrange for the companies 3661

~larch 23, 1976 Tape 1371 IlJ' • CROSBIE: at Come By Chance to no longer be Crown corporations, and they had to arrange for the financial interests involved to relieve the government of any commercial,business or legal or moral obligation in connection with the first oil refinery. Now there had always been a great argument in this House of Assembly about the Crown corporations. It is quite true that IB-2 a Crown corporation-legally the government is not at la~' responsible for the debts of a Crown Corporation.

If Newfoundland and Labrador Hydro was a Crown agency, well let us say Labrador Linerboard; the government is not legally responsible for the debts of Labrador Linerboard although it is solely owned by the Government of Newfoundland. But unless there is legislation passed saying so 1 or you give a ~irect guarantee,but if you do not do that we are not responsible.

But in actual practical fact a government is responsible for a Crown corporation because you can hardly avoid having your credit badly damaged if a Crcrwn corporation becomes insolvent and does not pay its creditors or does not pay its workmen or whatever. So,yes,legally they could not sue you but in practical fact you have to stand behind it. It is only practical and it is only common sense. It is the same as Labrador Linerboard Limited.

We are not legally responsible for its debts but if it went insolvent or we decided to close it and liquidate it we would have to see that all i.ts creditors were paid or else we would have a difficult job arranging financing or bond issues or whatever else that a government needs to do to get money for itself. Well this was always debated in the House and the hon. member who was then Premier would pooh-pooh the fact that it was a Crown corporation and that legally we were not responsible for its debts.

But in addition to the practicalities of the matter the government of that day, the administration of the member for Twillingate (Mr. Smallwood) had also given certain letters,which are known as 3662

Ha:rch 23, 1976 Tape 1371 I B-3 }ffi . CROSB tE : comfot"t letters, to the institutions thnt 1~ere closely involved with the financing of t h i s operation. So tha t not only was the practical fact t ha t the governmen t would be held to be responsible in a practical sense fo r its Crown corpo r at ions, Provincial BuildinB and Pro..,incinl Pc>f:ini ng , but there were also letter existing which had no effect in law, which they could not sue the governrnen t on, which wer e not legally binding, but which would certainly be prett y enbarrassing for any government of Newfoundland had they ever acted under them. 366 3

""'arch 21, 11l7f; _!fr. Crosbie. Tare no. 1372 Page 1 - mw I ~ot some here which •nhich T will table; for example, a letter October 16, 1Q7n addressed to the Export Credit Guarantee Department in London , England, signed by the then Premier which says: "The hankers have entered into a financial agreement with ~uilding Co~any and Refinin~ under which the bankers will purchase promissory notes made bv the companies and the companies will assume certain financial obligations with the bankers.

In view of the position of those companies, arid -their importance to the economy of the Province,! can assure you as a matter of policy the provincial gove~~ent would consider it to be its duty to ensure that those companies should meet their obligations to the hankers and would take anv such steps _ as might be necessary to enable them to do so.11 So that the F.nglish Ex-port Credit Guarantee Department had been written by the Premier of Newfoundland and told that the bankers, Kleinwort-Benson, have entered into a financial apreement an~ the government will stand behind the companies.

"It would he our dutv to ensure that those companies should meet their obligations to the hankers and that we woulrl take any steps that might be necessary to enah le them to do so. 11 Now that is not a legally binding - you know, ECGD could sue the ~rovince on this, and we would repudiate it. I think we lvould be able to repudiate it legally, but could we ever 20 t:n England again to raise monev, if we had done that, and they had these letters, and they were still in ef.fectf ~o there were these comfort letters. October 16, 1970.

Also a comfort letter addressed to Kleinwort-8enson Limited and signed by the then Premier of Newfoundland which repeats the details of the sterling f~nancial agreement and so on and deals with anv short-fall in the contract price or if there is not enough monev for taxes, if the contract price increases, or if there is anv increase in interest.

The last Paragraph says .: "The ~~:overnment will either provide such additional funds as may be necessari'' - in other word& if there are not enough funds in this arrangement already with the first mortgage and so on,and Shaheen cannot raise the money.-: "the ~overmaent 3664

Tane no. 1372 ? - mw ''r. rro~h1r>. --···-- ~ v1i.l l e5. t~er nrovide such add:!.tional funns as may he necessarv or else intt7a<'luce into our TTouse of Assemhlv ani\ sunnort as a ~overnment 1'1P.asnre l.,<>i~l.at~.on ~esignerl to authorize the exnenditure of such funns hv t~e government as may be necessarv to comnlete such construction.

Tt is to he understoon that the p.overrnnent's underta\:in3s in relation to t~ese additional funds are not intenned to relieve Procon (r.reat Tlritain)Liroiten of anv of its obligations unner the construction contract~~ So "<leinwort- Benson han a letter say:l.np.; t'>at tl,c t-~e,,rfouni!land r.overrnnent !vOttld see that the nro1ect was comnleten. Reallv i~ a comnJetion ~uarantee.

Ann t~en there is another series of 1 etters I will not go into he~,reen Newfounnland ~efini.n<> anr1 t"e "TP.":•JfounrUand C:overnment "here the Newfounnland rovl'rnment il.P"ree~ to certain things., if there is not sufficient monies the Ne!VfounrHand C:overnment will see that the money is sunnliecl. I ~,riH tahle them all there. There il.re lett.er agreements !'larle .Tulv 1. 'i, 1 'l70 he~,reen Ne•,;foundland Refining and the Province of Netvfoun..Jl .3.nr1, ani! si.J?;ned hv the then 'Premier. '!'hen a seconrl letter a-~' the same date.

"In the event t~at there shall be any increase in the contract nrice to he naid for the construction of the plant over and ahove the contract nrice originally nroposed to ~uildinl': Comnanv hv T'rocon. the government unrlertakes and aP,rees that 1 t r.dJ 1 intrnr1uce lefeislat:!oP i"nd support as a P,overnment measure to reJ easP.

"e1>fonndJ.anri llefin-tng from their obli~ations to raise t1,, ,qnrlitinna1 mone",to canse thP povernment to lenn or cause to Anot~~r JettP.r of thP. sa!'le nate to Npwfounrllanrl ~efi.ni.n" tn the RamP ?.ffect hut rlealino: v.-!.th <~.nv tncreases tl-tere l"av he in the amonn!"R .... eerle.-1 in ranarlian nollars, and anoth-2r letter of the same rlate signed bv the then 'Premier saving that ,,e ,,,iJ J raise the :nonev if there is anv increase in the interest rates 1 then r>e ,,,ill release Newfoundland Refining From their ohlir,ation to do that, 3665

March ?1, l07fl Tape no. 1372 :P~e 1 - ll'M Mr. Crosbie . and that we would lend the corpo ration that money. And another letter of the same date, Julv 15, 1~7n to ~ewfoundland Refinin~ sir,ned hv the Pre~ier with effect to pavment of interest on the 9,0vernment loan and t hat that interest mi ~ht be deferred and that t he ~uildin,S! Comnanv will be advance d fund s that are nee ded to pav interest on the current basis on the ~ove~ent loan and so on. So that these are the so-calle d comfort let~ers. So in addition - which I will table, Mr. Sneaker.

There are a number of copies if anvbodv wants to look at them - so in addition to the, you kno'~, just the nractical fact of t he question that a government i s llnin g to he held res ponsible for the dehts of its own creature, its own ~ollv- owned creature,there were these letters which had Rone to, I or were in effect 3666

March 23, 1976 Tape No. 1373 NM - 1 MR. CTIOSBIF:: in connection with Kleinwort-Benson, ECGD, Procon and llrJP, that in effect told everyone involved in that project, in the construction and financing of it, that the Government of Newfoundland was standing behind these companies and that they would be paid 1 they would not loose, they would be repaid. So in every practical sense the Province of Newfoundland was guaranteein!J; this project, Mr. Speaker, although this was not stated in the House of Assembly and those documents were never tabled in the House of Assembly.

In any event I am not going to quibble or quarrel about that now. I am just giving the history of the project, and why it was important to get the Government of Newfoundland out of that situation. And the opportunity to take the Government of Newfoundland out of that situation came in January and February 1973 when Mr. Shaheen wanted to proceed with the second refinery and where he wanted the Newfoundland Government to make a very substantial contribution to its financing. And this is why, Mr.

Speaker, we made it one of the conditions precedent for the Newfoundland Government proceeding with that new refinery or any extension that the people involved had to agree that the Government of Newfoundland ~10uld no longer have any legal, well the phrase used was"no legal,financial 1 business or other responsibilities to them with respect to Building Company, Holding r.ompany and Operating Company .'1 So it was condition precedent to ~'r.

Shaheen proceeding tvith the second refinery that he had to get Kle:!.mmrt-llenson, ECGT), Procon and UOP to agree that we were under no legal, financial, business or other responsibility to them in connection with the first oil refinery. And in October 1973, at the same time as the QE II came down for the official opening of the oil refinery at Come By Chance, the closing documents '~ere signed and executed in connection with the carrying out of that condition precedent.

October 9, 1973 the l'overnment of Netvfoundland transferred to Newfoundland Refining Company Limited the shares that the Government of Newfoundland owned in Provincial Refining, Provincial Building and Provincial Holding with the consent of the first mortgagee and,of course,our own consent and 3667

March 23, 1976 Tape No. 1373 NM- 2 MR. CROSBIE: the consent of ECGD and UOP and Procon and Kleinwort- Benson. all of them had to consent, and they all acknowledged that from then on the Government of Newfoundland had no legal, financial, business or other responsibility to them in connection with the first refinery. Now, Mr. Speaker, you know,in hindsight that move, that condition precedent of the present administration has saved this Province from a most embarrassing financial situation with respect to the present situation at the oil refinery at Come By Chance.

Because had we not, had that not happened 6n October 9, 1973, ECGD, Kleinwort-Benson, UOP and Procon would be looking to us to stand behidd those comfort letters and to stand behind our Crown corporations and we would be responsible, and we would be at risk for the amounts that are owed them,and if they were still erown corporations we would be in praetical fact responsible for the repayment of the $600 million owed in connection with those companies.

It was a most dangerous deal to have Crown corporations out of our control, completely under the management and control of private entrepreneurs, we with no control of the companies at all except that we could have two directors on the Board of Directors. ~. MURPHY: $600 million, Mr. Speaker? MR. CROSBIE: $600 million approximately. Now, Mr. Speaker, I will just table a copy of a letter from Procon(Great Britian)Limited which just gives an example, signed by Mr. Hickman, the ~inlster of Justice and by their Managing Director, of the arrangement that was entered into in Occober 1973. MR.

NEARY: Those were the companies, the six. MR. CROSBIE: That is right. Yes, six of them, and there are copies of the ones I just tabled. So, Hr. Speaker, then in October 1973, acting under that new agreement that was entered into by the government, these companies became purely privately owned, 3668

?'larch 23, 1976 Tape 1374 IB-1 }~. CPOSBIE: anc! ~'r. Shaheen or his companies became the owners of PRC, PHC, ancl PBC. The directors of provincial - the government was entitled Mr. Speaker, to have two directors on the boards of those companies. On the Board of Provincial Building there was the l\inister of Justice and myselfj on the Board of Provincial Refining there was the Premier and myself,and on the Board of Provincial Holdings there was the Premier and myself. We were the government directors • . ~1R. ROJ.IERTS: ~!R. CROSJHE: After October? Thj s ~•as after October, yes.

Now Provincial Building was of no account because Provincial Building in the Fall of 1973 conveyed the project to provincial - or either 1973 or 1974 - conveyed the assets to Provincial Refining. ~·R . ROBERTS: That was what we called the - ?'D.. CP.OSBII:: Yes. \\Then construction l~as over then Provincial Building just faded out of the picture and conveyed it to Provincial Refinin g .

So I mean the companies then become privately oWned but the government had the right to have two directors on the companies and the Premier and I wPre on the company that mattered,which was Provincial P.efining,because Provincial Building shortly thereafter was not longer in the picture. Up to thdt time the member for St. John's East (Hr. }larshall), the }1inister of Justice and myself had been directors of Hll three companies, which were then government Crmm corporations and we had three directors. But after that I believe the Shaheen people had thirteen directors and the government '~as entitled to have t'm.

Now then, ~~r. Speaker, just to continue with this brief history of the situation, from October, 1973 and on during 1974 negotiations continued in connection with the new refinery. But during 1974 the new refinery of 300,000 barrels a day got changed because of the inflation. And by the way we should notice too, Mr. Speaker, that we Here very lucky in our timing because on October 9, 3669

}larch 23, 1976 Tape 1374 IB-2 _MR. CROSBIE: 1973 Hr. Shaheen took over those companies and they became privately owned and later the same month the Arab-Israeli war broke out which was the start of the whole energy crisis which changed the whole picture on energy matters from the end of October and November, 1973 onward. In any event as a result of the problem of the energy crisis and the inflation that was starting to gallop then in 1973- 1974,Hr. Shaheen had to change his project from a new refinery of 300,000 barrels a day to something less because the cost had gone up so greatly.

And eventually during the late Summer of 1974 the concept got changed to an extension to the present refinery of 200,000 barrels a day, and that the project would have to be changed so it would be an extension on the original refinery adding another 200,000 barrels a day of capacity to the original 100,000 barrels. Now, Hr. Speaker, the pattern of negotiations with Mr. Shaheen on this extension or the second refinery was exactly the same as I had experienced on the first. After the deal was made and after an agreement was made things always seemed to change and Mr.

Shaheen would come back and he would want some concessions. He would want some changes because he was not able to do the deal as it had originally been agreed. That proved true during 1974 in connection with the second refinery or the extension to it. These suggested changes were discussed with him in August, September and October of 1974 so that new legislation would have had to be brought before the House had the extension gone ahead because the legislation the llouse had passed was legislation to set up a new 300,000 barrel a day refinery. It was now changed to an extension of 200,000 barrels a day.

This required amendments and changes. Hr. Shaheen also wanted - it had been agreed that they would pay sales tax during construction and gasoline taxes and there would be no tax exemptions. Well then he came back during 1974 and he wanted that changed and the payments of sales taxes postponed for five years 3670

J tt.arch 23. 1976 Tape 1374 U-3 }IlL CROSBIE: .nnd so on an<! so forth and various other concessions which was consistent with \Jhat I hac! experienced with him before I left the previous adm)nistution in l!ay of 1968. ~:r . Shaheen is a promoter ancl an excellent promoter and he seeks to get the best ceal possible for himself . That is the aim of the promoter or the aim o£ anyone in i)usines s . You want to get the best deal you can for yourself. nealing ~~t h governments , you get them to announce, you agree with them on a certain course of action, yo\1 get them to make an announcement, you announce a big new development and then problems arise and 367 1

}larch 23, 1976 Tape 1375 MR. CROSBIE: you cannot solve these problems unless the government makes some concessions. The government,having publicly announced this great new project or great new extension or whatever,then finds itself IB-1 on a bit of a sticky wicket if it does not agree to the new concessions. So the government starts to agree to new concessions. Now that is the way the game is played, not just with Hr. Shaheen but with others. He is not the only one, but we are dealing with the oil refinery project.

So these discussions went on during 1974 in connection with this new refinery which was evenutally changed to an extension of 200,000 barrels a day. Now, Mr. Speaker, the Premier and I were directors of Provincial Refining Company Limited, government directors. That company did not have any directors meetings in the Fall of 1973 and they had no directors meetings in 1974. And attempts to get information from the company were futile. They were not forthcoming with information. ~r. Shaheen and his associates were not forthcoming with information. That is not the way they play the game.

They ~1ant to play it close to the vest. The less other people know about what they are doing the more room for maneuver, or whatever,you have yourself. I wanted information, Mr. Speaker, and I am not known for not being persistent. I persisted in attempts to get information as to what was happening there. Was construction concluded? How are things going? How is it doing? You would be told it was doing fine, everything was going all right and so on. So I wrote letters to Mr. Shaheen and his companies just to illustrate to the House the difficulty of getting information.

I wrote one in December, 1973 just after they had taken over the companies. January 30, 1974 to }!r. Furmark,who I had met in New York on January 15. "I am wondering what has happened to the information that you were then going to send me.'" In connection with the second oil refinery, 3672

Harch 23, 1976 Tape 1375 '~ - CROSBIE : I asked some questions about that. 11 In connection with the present nil refinery, I asl·: that you forward to me copies of the minutes IB-2 of any directors or shareholders meetings held since the changeover so ~~e will have copies. I ~~auld like to receive from Provincial n.efining some kind of monthly operating report so that we can be kept up to date on how the operation is proceeding and so on.' 1 AN HON. }ffiMBER: As a director of the company you are entitled to that. ~~. CllOSBIE: That is right, I am a director.

I am right in asking for these simple requests for information, SOME HON, ~fEMBERS : Oh, oh! ~!R. CROSBIE: Oh, they have got everything. They now own the companies. So that was on January 30, 1974. March 29, 1974 I wrote }l.r. Furmark again' I wrote to him on December 18, 1973 pointing out information we needed on the second refinery. I will not read all these letters. I asked him some questions on the second - AH HON. }11\~ffiEJt: Are you going to table them? MR. CROSBIE: Yes, I am going to table them.

I asked him some ~uestions on the second refinery and the importance for us to know "'hat is happening, Our advisors, Jacohs, have not got the feasibility study. ~hat is another frequent occurrence. You could never get - f.N liON. '1-lEt'BEJ', : What was that on? 1~. CROSBIE: This is on the extension. AN HON • MEMBEF : I see, P:rr. CROSBIE: There are a lot of other points that had to be discussed and information that He wantec1. That is Harch 29, 197ll. August 2, 1974, ~ 1 r. Furmark again. I had written asking for i nfomation, I ~·ouJ.d like to receive copies of minutes.

He are directors. '·'e should be provided ~<•ith copies. I would like to receive as a government director some kind of monthly operating r eport so we can be kept up to date. It is obvious a government 3673

~:arch 23, 1976 Tape 1375 lB-3 MR. CROSBIE: director should receive a monthly report;'and so on. ''There has been no meeting of directors since last Octob er as far as I know.'' ''I am now in receipt of a request that I should consent to the adoption of certain resol ut ions passed at a special meeting of directo r s of Provincial r-efining held in July 25, 1974 dealing with Chelsea National Bank. I did not receive any notice of that meeting nor do I intend to consent to the passage of t hos_e resolutions until r receive some answer to the request I have made for information as a director of Provincial Refining.

There should be regular, at least quarterly meetings of the directo rs. I am not satisfied with the present situation','and so on. That is August 2, 1974. There are other letters later which 1 will come to in a minute. So, Mr. Speaker, while these negotiations are going on on the second refinery the same old game is going on on the fi._rst refinery. The d1-rectors of the first refinery could not get any information, accurate tnformation,on ~~tatwas happening in the first refinery.

Well I certainly had no intention of agreeing to an~ second refinery going ahead unless I knew absolutely what was bapoeninR in the first refi ner y. I will table all the letters that I refer to, or documents . 3674

.) March 23, 1976 Tape No. 1376 NM- 1 1-'R. CRO~ So negotiations continued on in the second refinery, which again, as I say, was now changed to an extension and there were meetings held in St. John's on October 16 and 17, 1974, with respect to the extension. Now while they were here on those meetings I took the opportunity to insist that we must have information on the first refinery. And on that occasion, Mr. Speaker, we got the first quarterly statement of Provincial Refining Company Limited, which I will table here in the House.

It is a quarterly statement for March 31, 1974, and that quarterly statement was very encoura~ing because it showed that the company had earned in the first Quarter, because they had only started operations early in 1974, that they had net earnings in the first quarter of ~4,226,000. So that they were making money there. Now these are not audited statements, unaudited statements prepared by the company.

And they also gave us I think at the aame time copies of their six months statement to the end of June 1974 and the six months statement showed that during the six months they had net earnings of $6,197,000, so that for the first half of 1974 they had earned, according to these statements which were company documents and not audited, they had made $6,197,000. So there was nothing to worry about, That was net after taxes, $6,197,000. Now the House should also understand, Mr. Speaker, that we only had access to PRC. Whatever rights we had were rights with respect to PRC.

We were not directors of Newfoundland Refining,which was and always was Mr. Shaheen's own company. But Newfoundland Refining is extricably interwound with Provincial Refining because Newfoundland Refining had contracts with Provincial Refining to manage the refinery, to sell all its product, to surply all the crude oil, to charter all the shipping and the ships. So that Newfoundland Refining was the actual operator for Provincial Refining. It operated Provincial 'Refining, but we were not directors of Newfoundland Refining. AN HON. ~MBER: They were going to operate it or would the - ~. CROSBIE: No,it did it all.

It also had a managment contract. It had a management contract, sales agency contract, crude oil supply contract, 3675

March 23, 1976 MP .• CROSBIE: MR. ROBERTS: Tape No. 1376 all of those things were entered into in 1970. Back in the original agreement. NK- 2 ~. CROSBIE: Yes. Mr. Speaker, at the •ame time in October 1975 I had discovered with Mr. Cyril Greene that the time had come for~them to start paying interest on the $30 million. Now the $30 million that the Newfoundland Government put into this project was advanced at various dates from 1970 to 1973 and interest,of course,would start from the time of these advances,and then under the agreements the interest was all to be accrued.

They did not pay the interest until the project was conveyed by Provincial Building to Provincial Refining and then a year after construction was over they would start to pay interest.

Well because of these circumstance in October 1973 they had conveyed the project from Provincial Building to Provincial Refining and a year passed in 1974 and while they did not think they had to pay any interest until 1976,1t turned out, when we looked at this, that under the agreemen~A they had to st•rt paying interest in 1975, and that the first interest payment had to be calculated at the end of January 1975 and an interest payment made at the end of March 1975, because the plant had been conveyed in October of 1973.

By the way,at that time,that meeting in October of 1974 that I mentioned that we were 4iscussinR the extension, we were told that the lsomax in the hydrogen plant were not then completed but that they should be completed by the end of November, that was the end of November 1974. At that meeting also, Mr. Speaker, we told them that they were going to have to pay interest. Well they wanted to check with their lawyers and so on about that. At that same meeting it was agreed by }<r. Shaheen and }<r.

Furmark that the government directors ~~ould get monthly reports and we would get full information on what the company was doing. That was all agreed in October 1974. 3676

March 21, 1<J7fi Tape no. 1377 Pap;e 1 - mw Mr. Crosbie . I ~~ill also table the letter, Mr. Speaker, dated necember 'l, 1CJ74, addresserl hv me to Hr.

Rov Furmark settin~ out this a~reement and the discussions on what we were to get as government directors, monthlv reports coveri.np.; the amounts of monthlv production, product mix, sales, all complete financial statements, monthly cost statements, rletails on :flnter-comoanv transactions, the annual hud~et, copies of the income tax returns and so on, and the monthly reports each month, and I asked them if thev did not agree with supplying some of the information to 1et UR know.

That ~~as December <J, 1974 1 because after the October meetin~, we still did not receive the information that we had been nromi.sed, So, ~r. Speaker,in Januarv and Februarv 1975 they 1-1ere havin<>: difficulties in proceeding with the extension pro_1ect and in raising t~e money for it. There was no legislation presented to the House for anv chanp,es in the original agreement because the government too~ the position that until Mr. fhaheen could live up to his commitments, and we knew that the project could go ahead, we were not goinP. to ask the House of Assembly to approve any amendments.

He were not goin~ to ask the House to approve some new deal until Mr. Shaheen shm~ed that he had the financing arranged and that evervthing 1~as in order and everything was ~oinp; to go. So no thin~ came before the House in the session of 1!)75, because he did not, during the first half of 1 'l75, he 1-1as not able to sh01~ us that he could go ahead with the extension. 1~e knew that he could not go ahead with the new refinerv, but he had not shmon the government that he could p.o ahead with the extension,so the House was not asked to a~ree to any amendments.

No1-1, of course, any hon. gentleman who was in the old administration and dealt with Mr. Shaheen will know that mn all these occasions all rush, rush. You had to agree to this today, hecause,I mean,it had to be before the House in a week's time, and it had to he nassed in two 1~eeks, because if it did not pass in two 1veeks l':C<m would hack out or 'rechnip or Technop or somebody would,- ' and so on. 3677

'larch 23, 1Q71'i 'l'ane no. 1377 'Page 2 - mw This was all, of course, cluring these months when there was a great rush for evervthing anrl a great rush for th~se changes. ~~~~~_:I'.:~.:. It ~~as always third party representation. "'R. CROSllU:: ------· Right. Always, because third parties wanted it clone immediately, but in the event none of it was accomplished. In Januarv 1975 thou~h Mr.

Shaheen had to call A meeting of the Hoard of Directors of Provincial Refining because thev han to give the First National Rank of Chicago a dehenture on the fnv~ntorv at Come llv Chance. ~ow under the first and second mortgaRes. the first ann second mortgages can agree to security beinr. given on the inventorY of the plant if requested by Provincial Refining so that thev could get bank f1.nancinF: which every comi)any needs in its <'perations.

And the First National Rank of Chicago •ms nroviifj ng tc.is hank financing, or whatever they needed, and so thev wanteil a rlehenture on the inventorv, ,that is the crude oil lancled at Come nv Chance ann the refined nroducts so that they would have some securitv for their money. It is eouivalent to

section BR here in Canada or vou can have a debenture. Hell they wanted a nehenture. And F.C(;

T) and the C'.overnment of Newfoundland agreed that this TV as in oriler. I hone vou are noting, Mr. Speaker, the number of thinp.;s that ~1ere agreed to, because a most unfair and slanderous imnutation t~as made about me hy the member for Twillingate (l>fr. Smallwood) outside the Hous~, t.;hich I hope when he hears all that was agreed to he will withdraw. Anv moment anyone wanted to sabatop,e this project thev dicl not have to agree to anv of these things I am outlin~np, here.

It was onlv sensible and reasonable that the companv he able to get workinp: capital, and we agreed to this debenture on the inventorv. nut to give the debenture on the inventory, the directorR of Provincial Refining had to meet, and I told them that I 1o1as not going to agree to waive notice or aqree to that meeting unless there was a meeting of the directors of "Provincia~. "R.efininp; so we could fine out what ,~as going on, and we

'~arch 2'l , t 1H6 Tane no. 1377 ~!r .~osbie . refuserl to P.ive them a waiver of notice, and, therefore, they had to have an actual meetinP., ann thev did arran~e to have a meetin!l' in New York in January of 1<>75 at whicl: the Premier attended with mvself ann the l>finister of Finance (}lr. noodv~ - well he was the Ministe .r of Industrial nevelonment at that time - and we attended in New York 3679 3 - m w

March 23, 1976 Tape 1378 PK - 1 Mr. Crosbie: to a director's meeting of Provincial Refining. And by the way, Mr. Speaker, just a personal note. In January of 1975 a story appeared in the St. John's Daily News, put there by Mr. Shaheen 1 stating that some member of the Newfoundland Government, and clearly he was referring to me, was sabotaging the new oil refinery, the extension to the new oil refinery. AN RON. MEMBER: It came from Mr. Shaheen. MR. CROSBIE: Yes, Mr. Shaheen gave a story to the St.

John's Daily News saying that a certain Cabinet minister, and it was quite clear who it was, was namely the person who is speaking here today, was sabotaging the extension of this refinery. These are matters that are likely to cause one a little irritation. But despite that irritation I still behaved in a statesmanlike manner with respect to this project. Anyway we went down to see Mr. Shaheen,then,in the end of January 1975. We still have no information as I requested and tabled in these letters. So we went down then to meet in New York. Now in New York, Mr. Speaker, we had a frank discussion with Mr. Shaheen.

And we discussed a number of things with them. And we learned for the first time that the refiner~-we did learn that the refinery was now experiencing difficulty. And we learned that they were contemplating a loss of $30 million for the year. AN RON. MEMBER: For the year 1975. MR. CROSBIE: For the year 1974. MR. ROBERTS: They lost that - MR. HICKMAN: 1975. MR. ROBERTS: So they lost that $30 million, plus $6 million, about $36 million in the last six months of tbe year. Is that the - MR. CROSBIE: If you go by their statements, yes. It changed around in mid year .

They have made $6 million to the end of June,now they said, they told us, that they had thought they lost around $30 million. And the reasons they gave for this was that they had high sulphur residual fuel oil which they could not sell in Canada or the U.S., could only sell in the Baltic and elsewhere. They said they envisaged a suit against Procon. The suit was for a more modest amount at that 3680

March 23, 1976 Tape 1378 PK - 2 Mr. Crosbie: time, $33 million, they were going to sue Procon for. They had to pay certain retroactive charges to BP, British Petroleum, because of late taking delivery of shipments of crude oil from them. They said they are having very excessive demurrage, and that had lost them $5 million to $7 million. But all bon. gentlemen will remember that during 1974, in the Fall of 1974, you would see these big tankers down in Come By Chance tied up for week after week, vessels in which there is huge demurrage.

They had to be having sizable losses on those because the plant was not completed construction and could not take the oil out of these vessels which would have to lie up there. In any event, they said they had lost $5 million to $7 million in excessive demurrage. They are having difficulties with the energy board, because now as a result of the energy crisis,of course, the energy board had to-~ou had to get a permit from them to export on a cargo to cargo basis, and they were being interferred with in selling in the U.S. or anywhere else. They had to sell their product into Canada.

But they did not have a retailing organization here. They did not have the customers in Canada. So they had to sell to other oil companies which meant that they retained less money and so on, and for these reasons they had lost,they thought,around $30 million. But they gave us no reason to think that this would continue, and they felt that once the isomax- th~y were talking about then-and the hydrogen units started to operate properly, their problems would be over and they would be making money again.

Now the rest of that meeting was more concerned with the extension, and when were Jacob's going to receive the feasibility study and what the position of E.C.G.D. was ~nd the like. Well that is what they told us about what was happening with the first oil refinery. And they talked about Technip and so on and so forth for the second refinery. And the meeting approved a debenture of 520 m11lion to the First National Bank of Chicago security on the inventory, and assignment of the accounts receivable. 368i

March 23, 1976 Tape 1378 PK - 3 Mr. erosbie: Now at that meeting, Mr. Speaker, we were given - let me see - AN HON. MEMBER: What date was that, 'John'? MR. CROSBIE: I think it was on January 27, 1975. 3682

March 23, 1976 Tape No. 1379 ~- 1 HR. CR0SBIE: And I think at that meeting we were given the quarterly statement for September 30, 1974, and that quarterly statement shows - MR. ROBERTS: Was that audited? ~'R.. CROSBIF.: No, no, the same. It is not audited. ~ - l'0RF.l'TS: It is an internal company document. HR. CROSBIE: It is an internal company document. And that showed now that for the nine months there was a loss of $12,600,783. ~'!R. ROBERTS: In what quarter? MR. CROSBIE: Right, in that quarter. Well when I got back to St. John's I wrote ~r.

Furmark again outlining the agreement on what kind of reports we were supposed to get referring to the meeting of the previous day. There should be quarterly meetings of directors, and discussion of the interest question with them. So I will table that letter also. Now these things were never carried out. MR. W. CARTER: Apparently there was something happening with people on the Mainland and the company over some kind of oil papers the company would not part wit h ~. CROSBIE: No, no, they are all right here. I have them. I said I am tabling them. You can have one of these if you want.

There are also documents not yet tabled. SOME RON. }fEMBERS: Oh, oh! MR . CROSBIE: That is right. Let the Leader of the Opposition - you are going to get a copy of them all. Do not worry. \ole are all organized here . AN RON. MEMBER: Are we going to get copies? HR. CROSBIE: I have not got them. You know we cannot spend all - There is going to be another one put on the table, just relax. There is one for the member for Twillingate (Nr. Smallwood). }ffi . SMALLWOOD: Mr. Speaker, since we only have one or two copies, could the government not arrange to have copies of these. They have Xerox machines and so on. ~!1'.

CRC1SB IE: ~~r. Speaker, I am tabling four copies and I do not see any need to table any other than four copies. There is another copy here which can be on the House table. The Leader of the Opposition has 368:3

!-'arch 23, 1976 Tape No. 1379 NM- 2 MR. CROSBIE: a copy. So, Mr. Speaker, that is January of 1975. They are having difficulties but they think that they are going to be overcome. And they are still talking about the extension to the refinery and dealing with ECGD and so on. We also discussed at that meeting the question of interest because there was a legal disagreement over when the interest would be payable. There was a possibility that all of the accrued interest under the wording of the agreements would have to be p~id on January 30, 1975. That would have meant we would have had all the accrued interest of $11 million paid on that day if our

interpretation of it was right. The other

interpretation was the $11 million is added to the $30 million principle amount of the mortgage and then they pay interest on that until the mortgage was repaid in years eight to fifteen. So we had to get a legal opinion on that. We got a legal opinion and the legal opinion was that the interest up to Januarv 30, 1g75 had to be added to the principal amount of the mortgage and then they had to pay interest on that~which came to $41.3 million,on that every six month starting March 31, 1975. Then the calculations had to be made for what int