June 17,

HOUSE OF ASSEMBLY PROCEEDINGS

Vol. XLII No. 17

The House met at 2:00 p.m.

MR. SPEAKER (Dicks): Order, please!

Statements by Ministers

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

MR. ROBERTS: Mr. Speaker, I wish to notify the House that

my officials have received the results of the Judicial Inquiry into the

circumstances surrounding the death of Leonard Roy Trickett. Mr. Trickett died

on September 24, 1991, while a patient at the Intensive Care Unit, Health

Sciences Centre. The inquiry was conducted by the hon. Gregory Brown a Judge of

the Provincial Court.

Judge Brown found that the cause of death of Mr. Trickett was

multi-organ failure secondary to the intravenous infusion of Mr. Trickett's bile

which had been contaminated by bacteria. Judge Brown further found that this

infusion of infected bile occurred during the afternoon of August 16, 1991,

while Mr. Trickett was a patient of and confined to bed in the Special Care

Unite located on Floor 4 North B of the Health Sciences Centre. Some person

having access to Mr. Trickett improperly connected the bile infusion to the

intravenous tube thus causing the bile to enter his blood stream.

Judge Brown says and I quote: "There is no evidence that any

person, living or dead, who could have observed some other person make such a

physical connection has admitted to having made such an observation." He further

concludes: "It is however probable that some member of the medical or nursing

personnel working in the Special Care Unit of Floor 4 North B during the

afternoon of August 16, 1991 and having some responsibility for the proper care

and treatment of Trickett made the erroneous connection."

Mr. Speaker, Since this tragic incident the Executive

Director of the Health Sciences Centre has issued a policy directive, I am told,

to nurse managers and nursing staff which it is hoped will remedy and further

problems in this area. The Nursing Unit Departmental Procedures Manual in use at

the hospital has also been updated in response to this incident.

Judge Brown has included among his recommendations that all

hospitals receiving his report, and that will be all of the hospitals in this

Province, examine their existing practices, policies and procedures in light of

the Trickett matter and effect such changes or improvements as might assist in

the prevention of similar deaths in the future. He further recommends that all

medical schools receiving this report examine their curriculum and effect any

changes necessary to assist in the prevention of similar deaths.

I may add, Mr. Speaker, that while I do not have copies of

the report to lay on the table, copies will be made available for any member who

wishes one, simply please, get in touch with me. Copies were provided in advance

of this announcement to Mr. Trickett's family in accordance with our usual

procedure.

Thank you, Sir.

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

MR. SULLIVAN: Thank you, Mr. Speaker. Judge Brown does

indicate that there is no evidence that any person who could have observed

another person making this physical connection has admitted to it. He does go on

to indicate that it is however probable that some member of the medical or

nursing personnel, having responsibility for proper care and treatment of Mr.

Trickett, made the erroneous connection. In any event, there was an error made

with tragic results, and it is interesting to note that a separate review was

done by an independent arbiter, and this arbitrator indicated that certain

systems and certain procedures and the stress levels on the workers and

overwork, lack of adequate training, and lack of adequate supervision, are all

factors that created circumstances that led to this tragic death. I have great

fears, Mr. Speaker, with the stress put on our health system today, and with the

indiscriminate cuts that are occurring in our system, it can leave us open to a

wide variety of problems in our health care system.

Thank you, Mr. Speaker.

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

have leave of the House?

AN HON. MEMBER: By leave.

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

MR. HARRIS: Thank you, Mr. Speaker, and I thank the

Minister of Justice for making available a copy of his statement. I agree with

the comments of the opposition health critic with respect to the stresses and

strains of our health care system, but this seems to be a preventable tragedy,

Mr. Speaker, that certainly, procedures could be developed so that physically,

this kind of output of bile could not be connected to an intravenous, it seems

to me that this is a preventible tragedy and steps ought to be taken to prevent

this from physically being possible to happen in the future.

Thank you.

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

DR. GIBBONS: Thank you, Mr. Speaker.

Mr. Speaker, the Province's Strategic Economic Plan, released

by us about one year ago, contains many items of relevance to the mining and

mineral exploration sector in Newfoundland and Labrador.

Action has already been taken on several important issues

including the Amendments to The Mineral Act completed in December of 1992 and

the positive changes to our Mining Tax regime announced in the March, 1993

Budget. These changes have been very well received by the industry and, in a

recent mining publication, a senior partner of Price Waterhouse, Toronto has

noted that "these changes will make Newfoundland's tax regime one of the most

competitive in the county."

In the Strategic Economic Plan, we have also committed to

establish an Exploration Assistance Program to provide for cost sharing of

drilling and other advanced exploration projects by local prospectors and

Newfoundland-based junior exploration companies. Today, I am pleased to announce

that we have allocated $500,000 in this fiscal year for this new Mineral

Exploration Assistance Program for 1993-94.

The Newfoundland Exploration Assistance Program will provide

financial assistance, up to 50 per cent of eligible costs, for Newfoundland

companies with no current income from mining operations, to conduct advanced

exploration programs on known mineral prospects. The funding will be primarily

for drilling projects but other advanced exploration programs may also be

considered.

The program will provide up to $80,000 per project and

individual companies may be eligible for assistance on more than one project to

a maximum of $160,000 per year.

The program will encourage local companies and prospectors to

conduct more exploration in the Province and carry mineral prospects to a more

advanced stage whereby they may arrange joint ventures with larger companies,

thereby retaining a larger, more significant local ownership in these resources

and the revenues which will flow from them. It will also encourage and promote a

greater involvement by local entrepreneurs in the mining industry.

Further details on this program are available immediately

from the Department of Mines and Energy.

Thank you, Mr. Speaker.

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

West.

MR. TOBIN: Thank you, Mr. Speaker.

First of all I would say that anything is going to be of some

initiative, or provide some initiative, to people involved in the exploration

field is certainly good and positive news, but I say to the minister that what

he has done here is precious little. What the minister is talking about here is

half-a-million dollars to be put into a fund that would advance the program and

provide up to $80,000 per project, which means that we are dealing with six

projects, and in case they decide to double up you would be dealing with three

projects. So I say to the minister that is precious little, and if that is the

Strategic Economic Plan for the mining industry in this Province, then I do not

see much hope in it, Mr. Speaker. I think what the minister should have done is

provide more incentives, more financial assistance in that regard.

He goes on to talk about whereby they may arrange joint

ventures with larger companies. That certainly would be nothing historical,

because throughout the mining industry over the years we have seen that taking

place, so I say to the minister that the idea is certainly a good one, but the

fact that he has put absolutely very little into it does not do much to create

much hope.

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

have leave of the House?

AN HON. MEMBER: By leave.

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

MR. HARRIS: Thank you, Mr. Speaker.

I welcome the modest incentive program for new mining

exploration in the Province, and I recognize that this Province does not have

the capability to provide a massive incentive. The real reason for the

substantial decrease in exploration in this Province is the removal of the

federal tax incentive which was, in fact, a true regional development program

whereby people could invest in new mining exploration. That was taken away by

the federal government some two years ago and that is what has really been

causing a downturn in the exploration in this Province.

Thank you, Mr. Speaker.

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

Labour Relations.

MR. GRIMES: Thank you, Mr. Speaker.

Mr. Speaker, seven years ago the Canadian Society of Safety

Engineering introduced the first Canadian Occupational Health and Safety Week. I

understand as well, Mr. Speaker, it was largely at the urging and recommendation

of the current Member for St. John's South who was a past president of that

organization.

I am pleased that Occupational Health and Safety Week will be

celebrated again this year from June 21-27, and I take this opportunity to

remind hon. members and the people of Newfoundland and Labrador of this

important week, and the challenges workers face every day throughout the year to

improve safety in the workplace and reduce or eliminate workplace accidents.

The mission of the Occupational Health and Safety Branch of

the Department of Employment and Labour Relations is to reduce accident rates in

the workplace by raising the awareness of employees through occupational health

and safety education. We believe that the best way to make workplaces safe is by

integrating such knowledge, thus preventing accidents before they happen.

Mr. Speaker, the department recognizes that all workers have

a fundamental right to an environment that neither impairs their health nor

imperils their safety. The responsibility for developing and fostering a greater

awareness of health and safety requires a joint effort by government, employers

and workers of the Province.

I am pleased to report that recent injury statistics compiled

by the Department of Employment and Labour Relations indicate that lost time

injuries continued to decrease over 1992. Preliminary estimates indicate a

reduction of some 18 per cent. While a portion of this drop may be attributed to

increased inactivity, especially in the fishery, our estimates indicate a real

reduction in lost time injuries of approximately 7.2 per cent. Preliminary first

quarter figures for 1993 indicate an even further reduction in lost time

injuries in the workplace. In addition, the Occupational Health and Safety

Branch has been successful in carrying out work in back injury prevention, has

examined the implementation of a small business safety management plan pilot

project, has introduced an occupational health and safety module in the high

school co-operative education program, and is continually increasing awareness

through public relations and advertising efforts. The number of occupational

health and safety committees in workplaces around the Province has increased by

4.5 per cent during 1992. This increase is significant in light of reduced

business activity being experienced by the current economic slowdown.

The theme of this year's Occupational Health and Safety Week

is "Work Environment: It's in Your Hands". The Government of Newfoundland and

Labrador view this theme as particularly relevant because we believe all of us,

including workers, employers, organizations, unions, educators and all levels of

government have a role to play in the important task of promoting and

maintaining a safe and healthy workplace.

I am pleased to designate June 21-27 Occupational Health and

Safety Week in Newfoundland and Labrador and I encourage all hon. members to

become involved in promoting a safe and healthy workplace throughout the

Province.

Thank you, Mr. Speaker.

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

MR. E. BYRNE: Thank you, Mr. Speaker. My own experience

as a former labour educator and training administrator for an educational fund

within the construction industry has made me aware of the need for occupational

health and safety in this Province, and certainly, within the workplace.

The minister indicated that over the last year to two years,

and indications are that in the next year, the number of accidents will be

reduced. I can assure the minister that much work still needs to be done in this

area, in workplace safety, in educational safety. He has also indicated to the

House and to the members here that through the division of Occupational Health

and Safety educational training, they tend to increase the awareness of workers

in the workplace to reduce accidents.

In line with that, I want to say to the minister, what he

should consider is that many of the workers in the construction industry and

other workplaces in our Province today, do not have the ability to have the work

environment in their own hands. Many accidents take place because many do not

have the ability to read, write, or even interpret basic information. I would

suggest to the minister that he, as a minister, should systematically, and on a

continual ongoing basis, look at the educational programs within his department

to increase awareness. As members on this side of the House, we encourage the

minister to do so and certainly will promote health and safety in the Province.

Thank you.

MR. HARRIS: Mr. Speaker.

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

have leave of the House?

AN HON. MEMBER: No leave, Mr. Speaker.

MR. SPEAKER: I hear no leave. The hon. member does not

have leave.

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

House the former MHA for Kilbride, Robert Alyward.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: I would like to welcome to the public

galleries twenty-six Grade V students from Cowan Heights Elementary, along with

their teacher, Ms Sandra Humber.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: I would also like to welcome fifteen Grade

VI students from the Pentecostal school in Bishop's Falls, accompanied by their

teacher, Mr. Albert Hodder.

SOME HON. MEMBERS: Hear, hear!

Oral Questions

MR. SPEAKER: The hon. the Member for Baie Verte - White

Bay.

MR. SHELLEY: Thank you, Mr. Speaker.

First of all, a clarification: On Tuesday, the Minister of

Fisheries said that the crab plant in Fleur de Lys would not get a new crab

processing licence. The minister knows that the people of Fleur de Lys are not

looking for a new license. The fact is, they want to get back the old license

they had in the beginning. The people of Fleur de Lys have always claimed that

the license was taken away improperly. I want to ask the Premier if he has kept

his promise made during the election to investigate the circumstances of

transfer of the license and to rectify the matter? Has he done an investigation

and what did he find?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Yes, Mr. Speaker. I have some notes that

are not complete, but I can tell you that I did, indeed, keep the undertaking

that I gave to the committee. My recollection and what the notes indicate to me

that occurred, was that in early 1989, Mr. Quinlan, who owned both the plant at

Fleur de Lys and the plant at Old Perlican, requested that the license at Fleur

de Lys be transferred to Old Perlican.

There was, I am told - it would be too strong a point to call

it a policy, but at least there was a procedure, signed by an assistant deputy

minister, in place, that would have required or proposed some public discussion

of it, but that wasn't followed. Instead, after the election in April 1989, two

or three days before the government changed, the then minister, Mr. Peach,

issued a licence or approval for the transfer of that licence. I think, at the

same time, he issued another licence to Coley's Point Fisheries, and another

licence to somebody else, against the policy with respect to licences, in the

last few days, the dying days, of the administration.

MR. ROBERTS: And on the instruction of the Premier.

PREMIER WELLS: That is right. I forgot. My hon. friend

reminds me, it was done on the instruction of the Premier in office at the time,

Mr. Rideout.

When we took office, we became aware of -

AN HON. MEMBER: That isn't true.

PREMIER WELLS: Well, the records are very clear, and the

written instructions from Mr. Rideout are there, so it is true. I am not telling

you anything that is not true. There has been a thorough investigation.

So, when we took office, we discovered these improper or

unfortunate issues of licences, and we - I say `we', the minister acted on it -

cancelled one licence and put the others on hold, because some work had been

done on it. They looked at the licence - I will speak now specifically with

respect to the licence in Fleur de Lys and Old Perlican. They sought legal

advice on it. No, it wasn't a breach of the law. Everything was done in

accordance with the existing act and regulations, so I can't say there was any

breach of the law, but there was certainly a breach of good, common sense, and a

breach of principle in terms of taking that action two or three days before the

government resigned from office.

They held a couple of the licences for consideration. They

also obtained legal opinion on it at the time. The concern was that some action

had been taken on the licence that was transferred, that the department or the

government could be responsible for some expenditure that had been incurred, so

they agreed, as the licence had not been used in Fleur de Lys, and it was the

same plant owner - it was not a licence for the people of Fleur de Lys; it was a

licence issued to Mr. Quinlan and his plant at Fleur de Lys, and his request was

that it be transferred to Old Perlican. The minister approved that on a

temporary basis for the balance of the year while he had time to further

consider it, and the following year, at the request of Mr. Quinlan again -

AN HON. MEMBER: (Inaudible).

PREMIER WELLS: They either want the facts or they don't,

Mr. Speaker.

- at the request of Mr. Quinlan, in March 1990, the transfer

was confirmed.

Now, Mr. Speaker, the simple fact is that there was no

processing or no effort to process crab and, to the best of my knowledge, Mr.

Quinlan owned that plant up until last year. Now, whomever he sold it to, now

wants a licence again. Well, the government just simply can't do that in those

circumstances.

It is regrettable that the former government took the action

that they did, but we have to live with the consequences.

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

Baie Verte -White Bay.

MR. SHELLEY: If there was a breach of common sense in the

beginning, there was a breach of common sense afterwards.

SOME HON. MEMBERS: Hear, hear!

MR. SHELLEY: The people of Fleur de Lys did not even find

out the licence was removed until 1990, over a year later. There was no notice.

There was no posting in the newspaper. There was no opportunity for those

adversely affected to be heard - no one. That was all contrary to government's

own policy. Their own policy of government was all contrary to that.

Is the Premier aware that government's policy was violated in

this instance? There was no policy. Nobody knew about it. Will the Premier live

up to his promise to rectify the injustice - and this was an injustice - that

has been done to the people of Fleur de Lys?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. the Premier.

PREMIER WELLS: I can confirm that the file indicates that

there was no particular knowledge to the people of Fleur de Lys, that they were

unaware that this was happening.

MR. ROBERTS: Or anybody.

PREMIER WELLS: Or anybody else, as far as I know. It was

Mr. Quinlan who told the government that he had no intention of operating that

plant for crab again in the future. That was the undertaking of the owner of the

plant. It was not to be operated for crab again in the future. Now, in those

circumstances, Mr. Speaker, with the former government having made the decision

- they ought not to have done it - they created a difficult circumstance that we

had to try as best we could to make the best of, after it had occurred.

Mr. Speaker, I have done a thorough investigation and my

promise to the people of Fleur de Lys was to investigate the circumstances of

it. I have done that, I am prepared to report to them fully and in detail, the

comments I have made here today and I will do that in due course.

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

for Baie Verte - White Bay.

MR. SHELLEY: I can tell you, if you did a thorough

investigation, you missed some major points.

SOME HON. MEMBERS: Hear, hear!

MR. SHELLEY: My next question will go to the Minister of

Fisheries. The minister said on Tuesday that there is already an adequate

capacity for crab processing in that area. Is the minister aware that there are

four to six tractor trailers filled with crab leaving the Baie Verte Peninsula

every day since the crab season opened? That is thirty-six tractor trailers a

week - 280 jobs that is what is happening here. Why is he allowing this to

happen? Why is he forcing the people on the Baie Verte Peninsula to stand by

while these trucks and their jobs are driven up to the highway? Is he doing

anything about that?

SOME HON. MEMBERS: Hear, hear!

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

MR. CARTER: Mr. Speaker, it is not at all unusual to see

crab being shipped from one part of the Province to the other. Apparently, you

can ship crab now, the full length and breadth of Newfoundland without causing

any problems. The fact of the matter is, Mr. Speaker, there is enough processing

capacity in that area. In fact, crab plants operating in Newfoundland generally

are operating far below their actual operating capacity. In that area, Mr.

Speaker, back in 1989 when this matter came to light, the crab quotas in that

area were very low - in fact, about half of what they are now - while, at the

same time, the company operating in Old Perlican had substantial access to crab

and they had found a new market for a new product. The crab plant was ready to

go. Based on the approval given by the previous administration, they wanted a

licence to operate the crab plant. At that time, they indicated quite clearly

that they had no further interest in operating the crab plant in Fleur de Lys -

that is precisely what was said, Mr. Speaker. It was their plant in Fleur de

Lys, it is the same company, Mr. Speaker, and at that time, it made all kinds of

sense in the world to transfer the licence.

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

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

minister is going to have to become consistent, because the plant in St.

George's never processed herring, caplin or mackerel and just the other day he

gave them a licence, with loads of capacity throughout the Province. So, the

minister is going to have to be consistent, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. W. MATTHEWS: Now, Mr. Speaker, the minister and the

Premier can squirm all they like - the real reason why Mr. Quinlan said he

wasn't going to process crab at Fleur de Lys was because the minister cancelled

his licence at Old Perlican, that the former minister had given him. Now, that

is the truth of the matter, Mr. Speaker, that is what happened here.

SOME HON. MEMBERS: Hear, hear!

MR. W. MATTHEWS: Now, I want to ask the minister this

question: Did the minister transfer the licence from Fleur de Lys - by the way,

which was issued on February 13, 1989 to Quin Sea, in order to appease Mr.

Quinlan because he had cancelled the licence given to him by the former

minister, or was it really to avoid a court case? I have information which says

the minister was threatened with legal action because he cancelled that licence.

Now, was the real reason he did this, transferred that licence from the people

of Fleur de Lys, was to stop that court action that Mr. Quinlan threatened on

his department?

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

MR. CARTER: Mr. Speaker, it is sort of ironic now that

the gentleman who was a member of the previous government, whose colleague in

that government, acted improperly -

MR. W. MATTHEWS: By doing what?

MR. CARTER: - by issuing three licences to three

different plants including the one in Old Perlican, issued three licences, Mr.

Speaker, contrary to their own regulations - it was on that basis that I put a

hold on that licence, to give us a chance to review it. And instead of issuing a

new licence, Mr. Speaker, which we couldn't do, the only thing to do - and

again, on the advice of the plant operator - was to move a licence in a

community and a plant where he had no interest in operating, to this other plant

that was ready to operate, where they had ample raw material and ample market

for a new product.

MR. SPEAKER: Supplementary, the hon. the Opposition House

Leader.

MR. W. MATTHEWS: Thank you, Mr. Speaker. I say to the

minister again, if he had not cancelled the initial licence at Old Perlican and

transferred the licence from Fleur de Lys, there would be no problem with the

Fleur de Lys situation.

I want to ask the minister: what authority did he have to

transfer that licence? The minister in essence now has cancelled the licence at

Fleur de Lys. I'd like for the minister to explain to the House and the people

of Fleur de Lys what gave him the authority to cancel that licence. Can he

specifically refer to the act that gives him that power?

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

MR. CARTER: Mr. Speaker, if he's referring to the licence

that was issued by his former colleague, Mr. Peach, to Quinlan Brothers, or the

name of the company in Old Perlican, that licence was issued in contravention of

their own guidelines. That and two other licenses. In fact, there was a licence,

I believe, for crab or shrimp issued to a plant in St. Lawrence. We immediately

put that on hold. Mind you, Mr. Speaker, this all happened about three days

before this administration was sworn in. Highly irregular.

SOME HON. MEMBERS: After the election.

MR. CARTER: Highly irregular, Mr. Speaker, and it should

not have happened. In fact, I'm told there was a gentleman's agreement that it

would not happen. So before the hon. gentleman skinned out, before he cleaned

out his office, he decided to reward some of his friends with a processing

licence. That is the sum and substance of it. Three days before we took office

those licenses were issued and we put a hold on them. We had to. Notwithstanding

- following that then the Quinlan brothers, or Mr. Quinlan, came in to see me

and pointed out the fact that the plant in Old Perlican was ready to go. They

had a market. They had people waiting to go to work. They had access to crab.

They had a plant in Fleur de Lys they built in the mid-eighties where there was

no access, not to any great extent, to crab. Very little. The crab quota, Mr.

Speaker, in that area was less than half of what it is now. They decided to

move. It was a corporate decision to move the licence from their plant in Fleur

de Lys to their plant in Old Perlican.

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

MR. W. MATTHEWS: Mr. Speaker, it's absolutely amazing.

The minister can squirm all he likes. He knocks Mr. Peach for giving a licence

to Old Perlican in the first place. He says he should never have done it. Okay?

So if we accept the minister's argument for that, how then can we accept the

logic that what Mr. Peach did was wrong by giving the licence to Old Perlican,

but yet it's alright for this minister to take a licence from Fleur de Lys and

bring it down to Old Perlican? I ask the minister. Now explain that to the House

and to the people. If they should not have processed crab at Old Perlican, why

should the people of Fleur de Lys be victimized because someone came in and put

the gun to the minister's head and said: you cancelled my licence, if you don't

give me another licence you're going to court. Now would the minister explain

that, because that's what happened in this case.

SOME HON. MEMBERS: Hear, hear!

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

MR. CARTER: Mr. Speaker, the fact of the matter is that

his former colleague, the Minister of Fisheries of the day, created an

impossible situation. Created an entirely impossible situation. He gave that

company the nod - for whatever reasons we'll have to leave to our own

imagination - to operate; issued a licence that contravened his own regulations;

encouraged that company to go ahead and spend money in Old Perlican, which they

did. Then we had no choice in the matter, given the circumstances, Mr. Speaker.

The company had a plant in Fleur de Lys that they owned in which they had a

licence that wasn't operating. He had no intention of operating it and therefore

it was transferred.

MR. SPEAKER: I'll give the hon. member another

supplementary.

The hon. the Opposition House Leader.

MR. W. MATTHEWS: Mr. Speaker, the minister knows the

truth in what I'm saying here today. The real victims in this situation are the

people of Fleur de Lys who are so innocent in all this. If we say Mr. Peach was

wrong, if we say the present minister is wrong, still the victims in all this

are the people of Fleur de Lys who are without jobs today, because of what this

minister has done in removing their licence.

Will the minister make an undertaking here today to undo the

injustice that he's inflicted on those people and reinstate a crab processing

licence for Fleur de Lys? That's the question I have for the minister. Undo the

injustice and do the honourable thing and reinstate this licence to those people

who are the victims, whether of Mr. Peach's action or yours. They're the victims

of your action. Because Mr. Peach did not transfer the licence from Fleur de Lys

to Old Perlican. You did, Mr. Minister.

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

MR. CARTER: Yes, but Mr. Peach, Mr. Speaker, issued a

licence to Old Perlican that he had no right to do.

SOME HON. MEMBERS: Oh, oh!

MR. CARTER: If Mr. Peach had acted properly in the first

place and respected their own guidelines then all this would not have happened.

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

MR. SIMMS: Thank you, Mr. Speaker.

I just want to ask one question of the Premier.

Would the Premier be prepared to meet with the delegation

that has driven all the way in here from Fleur de Lys?... I only met with them

before the House opened and I know they would like to meet with the Premier,

because they would like one further chance to be able to explain this case to

the Premier and to his Minister of Fisheries, because they have a really strong

feeling that all the facts are not known by the Premier and the Minister of

Fisheries, would he be prepared to meet with them at some time when he can

arrange it after Question Period, or after the House or whatever?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Of course, Mr. Speaker. I am always

prepared to meet with anybody and had they asked me, they would have gotten an

immediate, positive response, no difficulty at all.

MR. SPEAKER: The hon. the Member for Waterford -

Kenmount.

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

Minister of Education.

Many parents are finding it increasingly difficult to be able

to purchase school textbooks. The textbook ordering forms were just sent to the

schools, just a few days ago, and it indicates that prices have increased by as

much as 46 per cent. In fact, the average increase in school textbooks for next

year, that is: Grade IX, Level 1, Level 11 and Level 111, the average increase

will be somewhere between 26 per cent and 28 per cent.

Can the minister explain the reasons for the large increase

in school textbooks this year for Grades IX to Level 111?

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

MR. DECKER: Mr. Speaker, when the Budget was prepared

this year, government had to make some pretty difficult decisions in order to

balance the Budget. One of the things we did was change the ratio of

contribution that government makes to pay for school books. I think government

used to pay for 60 per cent of the cost, I am not sure if it is 60 per cent or

what it was, but we changed that by 10 percentage points so now, instead of

subsidizing a book for 60 per cent of its cost, government is now subsidizing it

for 50 per cent of the cost.

Obviously, Mr. Speaker, that will not lead to a 46 per cent

increase in the cost of books, so I would suggest to the hon. member, that it is

quite possible that the supplier has increased his price of the book, but if,

and I would have to take the question under advisement, if indeed the cost of

books has gone up to 46 per cent, there must be some other cause of it other

than what government had to do in the budgetary process. The most we could have

added to the cost of books was 10 per cent, but I would take the part of his

question which refers to the 46 per cent under advisement and hopefully get an

answer back for the hon. member.

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

Waterford - Kenmount.

MR. HODDER: Mr. Speaker, the estimates for the Department

of Education showed the total subsidy for school textbooks for this school year

has been reduced by $700,000 as compared to last year. Would the minister

confirm that in doing this, in essence, we are asking the young people of this

Province and their parents, to pay for an undue amount of the burden of

balancing the Budget and that this measure is going to have the effect of a

substantial impediment to equal opportunity for all students in our school

system, because frankly, Mr. Speaker, many parents are not able to put out the

average of $200 to $250 that is required to purchase new textbooks this coming

September?

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

MR. DECKER: Mr. Speaker, to say that the vote is reduced

by $700,000 does not necessarily mean that we are asking the people of the

Province to pick up the extra $700,000. That vote pays for different things, one

of which is to supply books to the elementary system right up to and including

Grade IX, books which are made available free of cost to students in the system,

so the $700,000 which he is talking about will mean that the books that we

replace to be given out free of cost, to be loaned to students free of cost, we

will not be purchasing as many this year for two reasons. One is declining

enrollment, Mr. Speaker, we will not need as many books but the other reason is

that we think we can get through another year without replacing as many books as

you would normally replace from year to year.

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

for Waterford - Kenmount.

MR. HODDER: Mr. Speaker, the minister, I am sure, is

aware that this decrease in the subsidy for school text books amounts to a

change in the process whereby the department used to pay 50 per cent of the cost

where now they are only going to pay 40 per cent of the cost. This is

counterproductive to the Province's stay in school initiatives, and as the

minister is quite aware more children who come from low income families drop out

of school than children who come from the more affluent families, so

consequently, Mr. Speaker, this policy is counterproductive to the stay in

school initiatives and the $700,000 that is saved will only, in the long run,

mean that we will pay the expense of not keeping these children in school and

therefore only the more affluent will be able to purchase school text books. We

have a substantial case being made here for furthering the inequality that

already exists in equal opportunity in education in this Province.

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

MR. DECKER: Mr. Speaker, if we lived in Utopia all text

books would be free. Everybody would have a Cadillac parked in their backyard.

Everybody would have two or three trips down South every year. If we lived in

Utopia it would be like the Big Rock Candy Mountains everybody would have

everything. The reality is, Mr. Speaker, we live in a poor Province and we are

hopefully coming out of a recession, one of the worst since the 1930s. This

Province is having a very difficult time to make ends meet. In order to deal

with our fiscal problems government is entrusted with the responsibility to make

judgement calls. We have to judge between whether or not you would do something

with student/teacher ratio or do something with subsidy for school books. We had

to judge whether or not we were going to close the hospital or do something with

school books. We had to judge whether we were going to lay off 300 teachers or

do something with school books. These are judgement calls, Mr. Speaker, and this

administration, at this time in the history of the Province, is entrusted with

the responsibility of making these judgements, and we made them based on our

principle of fairness and balance.

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

MR. E. BYRNE: My question is for the Minister of

Employment and Labour Relations. In the Budget this year he has indicated that

there is allocated $600,000 for the Student Employment Program. Can he share

with the House and the members here today how many applications have been

submitted to his department and how many applications have been approved thus

far?

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

Labour Relations.

MR. GRIMES: Thank you, Mr. Speaker.

I do not have those numbers readily available, other than to

say that there were many more applications than there was money to meet the

need. In checking with the staff as recently as this morning most of the

notifications have been given to those who have been successful, and

unfortunately others are getting notification indicating that they have been

unsuccessful. If we wants the actual numbers I can try to get the numbers for

him before we close today.

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

Kilbride.

MR. E. BYRNE: I wonder if the minister could table those

for me tomorrow morning? I would appreciate it. There is a very good reason why

the minister does not have that information, because I know for certain that

there are many more applications that have not been approved yet, that are

waiting on his desk for approval, than have been approved. There is a reason for

this in my opinion. Half of the employment season for post-secondary students in

the Province right now is over and the reality is, is the minister trying to

save money from that $600,000, and why is he waiting right now before he

approves any more applications? There are officials in his department who have

applications stacked up on their desks that high waiting for this minister to

make a decision on what he will do with the programs.

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

MR. HARRIS: Thank you, Mr. Speaker.

My question is also to the Minister of Employment and Labour

Relations.

AN HON. MEMBER: He asked a question, Mr. Speaker.

MR. SPEAKER: Order, please!

The hon. member is not obligated. If the hon. members choses

not to answer a question then I recognize the next speaker on his feet.

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

MR. HARRIS: Thank you, Mr. Speaker.

My question is also for the Minister of Employment and Labour

Relations. I would like to ask the minister why, when his government

legislation, even though it reduced the amount of benefits of workers'

compensation to 80 per cent of their pre-injury income, why is he allowing the

Workers' Compensation Commission, through an administrative change, to

effectively have people receive less than 80 per cent of their pre-injury income

by virtue of this administrative change of fiddling with the way they calculate

CPP, which must be taxed? Why is he allowing that, Mr. Speaker?

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

Labour Relations.

MR. GRIMES: Thank you, Mr. Speaker.

The matter that the Member for St. John's East raises, we are

not allowing anything any different than what has always been the practice with

respect to workers' compensation beneficiaries, the monies they receive, and the

offset of any other monies that they might receive.

Currently, anyone who has been on claim for a period longer

than thirty-nine weeks would receive a new claim, and this year would receive 80

per cent of their net pay, and if that total amount, as in the past, of money to

the claimant on workers' compensation is coming from workers' compensation, then

the total amount of it is tax free. If there are other sources of income, then

that has always been taxable income, which is now and there is no change. There

is absolutely no change in that with respect to anything the government has done

at this time. There is no difference today in June than there was last year in

June, with respect to whether or not other monies other than workers'

compensation payments are taxable by law.

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

supplementary.

MR. HARRIS: Thank you, Mr. Speaker.

The minister knows that the change of deducting CPP and other

offsets from gross pay to net pay results in them being penalized by income tax

twice, by first of all going to net pay, which takes into account income tax,

and then by reducing the net pay by the CPP benefits. Effectively the individual

gets less than 80 per cent. The minister knows that is a change, and it results

in a payment of less than 80 per cent. The question remains: Why is the minister

allowing that to happen?

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

Labour Relations.

MR. GRIMES: Thank you again, Mr. Speaker.

I am trying to point out, as I have in private conversations

with the Member for St. John's East, that it is not a matter again of the

government, or myself as the minister, allowing anything to happen.

The things that occurred, as I remind the Legislature on

occasions when I get asked questions about workers' compensation, were necessary

changes to save the whole system from sure and certain bankruptcy. That is the

reality. The changes that are occurring administratively within the commission

in terms of some income to an injured worker coming from a source other than the

commission itself, makes no difference this year in June than it did last year

in June.

If there are other monies which are deemed to be income for

purposes of income tax, they were taxable a year ago, if the person had other

income, whether it be Canada pension or other earned income, they are taxable

this year and, in most cases, unless the benefit, particularly from Canada

pension disability, is extremely high, then even though that is taxable at the

beginning, unless it exceeds the $6,600 a year, which is the basic personal

exemption, then there would be no tax from that amount either. Unless there is a

very large payment under a disability plan or from other earned income for the

person, the people are not paying tax.

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

for St. John's East.

MR. HARRIS: Mr. Speaker, if there were no savings then

the minister would not be saying in the House that by making the changes he is

making in the bill now before the House, that there is going to be

half-a-million dollars cost to put it back.

Mr. Speaker, what we have here is individuals being penalized

for having Canada pension plan income instead of just workers' compensation

income. I ask the minister: Why does he not insist that workers' compensation

ensure that they receive 80 per cent net of their salary, which is what the act

says they are supposed to receive?

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

Labour Relations.

MR. GRIMES: Thank you, Mr. Speaker.

We have reviewed that issue on a number of occasions, and we

are completely satisfied - we were then and we are now - that an offset system

for income such as Canada pension disability earnings is appropriate in workers'

compensation, that it should remain, that it will remain, and it will be treated

for taxation purposes the same now in 1993 as it was in any previous year, and

that any administrative adjustments that the board of directors of the

commission deem are appropriate for the calculation, that we have not interfered

and that we have allowed them to exercise their autonomous right to make those

kinds of decisions on behalf of the workers' compensation system, and we see

nothing wrong with the method that they are using.

The bill that was in the House yesterday, which we discussed,

was to correct the problem of people who had been on the system previously that

we had given a commitment to leave them untouched.

MR. SPEAKER: Question period has expired.

Answers to Questions

For which Notice has been Given

MR. SPEAKER: The hon. the Minister of Industry, Trade and

Technology.

MR. FUREY: Yes, Mr. Speaker. Yesterday I was asked a

question about the 1-800 number with respect to the Enterprise offices across

the Province. This number has been suspended since mid-April. It was costing the

government some $60,000 a year. The usage was extremely low and we've had zero

complaints.

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

MR. CARTER: Mr. Speaker, yesterday in the House the hon.

Member for Grand Bank, the Opposition House Leader, asked a question about the

damage being done to the lumpfish fishery by virtue of the fact that lump roe is

extracted from the fish. The fish then of course dies. I promised to find out

what's happening, what's being done.

Yes, the technology that he referred to - I believe it's

Norwegian technology - is known to a limited extent in this Province, but there

does seem to be some problem as to how it can be used. The experts say that

maybe it'll be too ripe for processing purposes. Lump roe taken by means

suggested by the hon. gentleman. Here in Newfoundland there is an experiment

going on, funded by NIFDA, at a hatchery in Wesleyville, through the Cape Freels

Development Association, where they are experimenting with the very thing that

we talked about, finding ways and means of trying to extract roe from the fish

without killing it.

As soon as I have something further on that experiment, Mr.

Speaker, I'll report back to the House.

Petitions

MR. SPEAKER: The hon. the Member for Baie Verte - White

Bay.

MR. SHELLEY: Thank you (inaudible), Mr. Speaker. I rise

to present a petition of the undersigned residents of Baie Verte - White Bay. A

request that a primary processing licence that was issued to the crab plant in

Fleur de Lys and that was transferred by your government to Quinlan Brothers

Limited, Old Perlican, be reinstated back to the Fleur de Lys plant, wherefore

the petitioners urge the Government of Newfoundland and Labrador to act upon

this matter immediately due to the economic woes of this district with the

fishing season fast approaching. I have a petition of just over 1,600.

SOME HON. MEMBERS: (Inaudible).

MR. SHELLEY: On the petition. We the residents of Baie

Verte - White Bay do request that a primary processing licence that was issued

to the crab plant in Fleur de Lys and that was transferred by your government to

Quinlan Brothers Limited, Old Perlican, Newfoundland, be reinstated back to the

Fleur de Lys plant. Due to the economic woes of this district, and with the

fishing season fast approaching, we ask that you act upon this as soon as

possible. Included in the list below will be signatures of some 300 people who

could be now working in the plant in Fleur de Lys.

These people, as you can see by the amount of signatures we

have here, it is a peninsula thing. It is not something that is just for Fleur

de Lys. Fleur de Lys is a small community of only 300 people. Three hundred

people worked in this plant who were from all over. As a matter of fact they

were even from off the peninsula. They came from as far away as Springdale and

even Little Bay Islands when Little Bay Islands was closed down last year. The

support - it was the sole biggest employer on the peninsula last year. The

mining situation, as the Minister of Mines and Energy knows, has dropped

significantly over the last few years. This was the only bright spot last year.

The little community of Fleur de Lys had 285 people working down there. There

was business in the community. There was business all over with the hotels, gas

stations, stores, everything else, that brought a lot to it. Although in earlier

years it wasn't so active I can tell you that last year especially they showed

that they're a strong viable plant. They should be reconsidered very favourably.

I want to just reiterate the point that this plant means a

lot to this district. As far as being adequate, this is the only plant operating

on that peninsula. Fifteen thousand people, it is the only crab plant operating.

It is very important to these people. I would like for the government to

reconsider all the facts before a final decision. Thank you.

MS. VERGE: Isn't the minister going to respond to the

petition?

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

MR. CARTER: Mr. Speaker, I'm not going to reply in detail

to the petition. The Premier and I will be meeting with the delegation from

Fleur de Lys in a few minutes and then we will discuss it with them there.

Orders of the Day

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

MR. ROBERTS: Mr. Speaker, perhaps it would help if I

could indicate to the House the business which we propose to ask members to

consider today. We propose to start with second readings and if members have

their Order Paper, we will deal first with three, which my friend, the Minister

of Finance will present to the House.

Bill No. 16, stands in my name, but as I explained earlier, I

have a conflict because, while at the Bar, I had a brief in respect of a matter

that is in one

section of that bill. Bill No. 16 is Order 14; Bill No. 11 is

Order 13; and Bill No. 21 is Order 12. We will do those three first, after which

we will do the Retail Sales Tax amendment which is Bill No. 20 and Order 11;

then, we will do the other two second readings, The Law Society Act and the

Internal Economy Commission Act amendments. When that is done, we will ask the

House to deal with Committee and third readings for which, of course, we will

need leave, and I anticipate there will not be a Late Show, Mr. Speaker. This

being Thursday, I anticipate there will be no Late Show and we will aim to get

out of here as quickly as we can, but just in the event we perhaps need a few

more minutes, I will move that the House do not adjourn at five.

MR. SPEAKER: Yes. I take it the hon. member is not making

the motion now - I understood you to say that you will move?

MR. ROBERTS: Well, I do move, then.

MR. SPEAKER: I just want to be clear on what is being

proposed.

There is a motion before the House, moved and seconded, that

the House do not adjourn at five.

All those in favour of the motion, 'aye', `contrary-minded',

`nay', carried.

MR. ROBERTS: If we could start, Mr. Speaker, with Bill

No. 16, Order 14.

Motion, second reading of a bill, "An Act To Amend The

Insurance Adjusters, Agents And Brokers Act", (Bill No. 16).

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

MR. BAKER: Thank you, Mr. Speaker.

Very briefly, this particular piece of legislation is not one

of the heaviest pieces to come before this House in this session. Very simply,

Mr. Speaker, I will just go through it clause by clause.

Clause 1 clarifies that the Minister of Justice is the

minister responsible for the administration of the Act.

Clause 2 would require licensees to carry errors and

omissions insurance, and that is obviously for the protection of the clients.

Clause 7 would allow a person to make application to the

minister for an extension under

section 30 for up to 12 months, which would make

it more convenient.

Clause 8 gives authority to the superintendent to make

compliance orders if a person is not complying with the provisions of this Act,

and would establish the procedure to be followed where property is held in

trust, but it also, Mr. Speaker, sets out an appeals process for aggrieved

persons in either instance, and I believe that appeals process is to the

minister - yes, an appeal lies to the minister if an order made under subsection

Clause 9 is perhaps the most significance clause in this

particular bill. It repeals subsection 45 (4) dealing with the liability of

directors, officers, or partners for damages arising from negotiations of

insurance contracts or the settlement of insurance claims, and the reason we are

repealing this, Mr. Speaker, is because of the nature of that business, where

people who sit on boards of directors would have no way of having any knowledge

of transactions that go on in the field and, in its place, Mr. Speaker, there is

a requirement that proper bonding be in place to protect the investors. At the

same time, Mr. Speaker, obviously, people sitting on boards of directors, who

have knowledge of and make decisions with full knowledge, would still, I

suppose, be liable if they knowingly commit an offence against any

section of

the Act.

Clause 10 increases penalties to $100,000 for first offence,

$200,000 for each subsequent offence and the penalties would apply equally to a

natural person or a corporation. The liability of directors or officers would be

defined and the authority to order compensation or restitution would also be

granted. That is in accordance with Clause 10.

Mr. Speaker, I present this for consideration of the hon.

House.

MR. SPEAKER: The hon. the Member for Humber East.

MS. VERGE: Thank you, Mr. Speaker.

I think this may be a case of the blind leading the blind.

The minister who just introduced the bill doesn't seem to be familiar with its

purpose or the series of events leading up to its preparation. This is a Justice

bill. The Minister of Justice explained why he can't participate in the House of

Assembly's consideration of it. I was Minister of Justice, but during the four

years I was minister, the department did not have responsibility for Consumer

Affairs, so I am no more knowledgeable than the Minister of Finance.

Unfortunately, because he did nothing more than outline the explanatory notes,

and he did that in a low voice, I am at a disadvantage in responding here.

I would be interested in knowing what prompted the government

to bring forward this bill. I take it there has been a concern about a lack of

protection to consumers. There was the George Rideout catastrophe in the Corner

Brook area, which was publicized nationally. It led to the longest criminal

trial in Canadian history.

AN HON. MEMBER: (Inaudible) the Act.

MS. VERGE: Mr. Speaker, I will gladly yield to the

minister for him to elaborate on the explanation.

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

MR. BAKER: Very briefly, Mr. Speaker.

Section 45 of the

Act put the liability directly on - or the directors of the insurance company

had direct liability for the decisions that were made in that industry relating

to that company. This, number one, was unnecessary, because if proper bonding is

in place, the consumers are protected anyway. But secondly, the way the

insurance industry is set up, the directors are not like directors of a normal

company that have more of a direct hands-on running of details of the company.

Because in the insurance business a lot of the transactions take place out with

insurance agents and all this kind of thing. So they are more removed from these

types of decisions and perhaps should not have to shoulder the total liability.

Perhaps the bonding was a better way of handling consumer protection. But, in

instances where there were breaches of the Act by officers of the corporation,

or by boards, by the directors, then we would increase the fines.

MR. SPEAKER: The hon. the Member for Humber East.

MS. VERGE: Thank you, Mr. Speaker.

I thank the minister for elaborating on his explanation of

the purpose of the bill. I trust what is at the bottom of all this is enhancing

consumer protection. I mentioned the George Rideout episode which led to

staggering losses by individuals, mainly in the Corner Brook area. There have

been other well-publicized instances of consumers losing because of illegal or

shoddy practices by insurance companies.

Quite honestly, I can't really follow the minister's

explanation. It may well be so that this bill does plug gaps and enhance

consumer protection. I am just not convinced from what the minister said. I have

to confess, I missed some of his initial presentation. Perhaps, when the

minister speaks to close the debate, he can provide more information.

Mr. Speaker, we,in the Official Opposition, will have no

hesitation to support a measure that provides greater protection to consumers in

their dealings with insurance companies and investment companies. We are quite

concerned to have a legal regime whereby individuals who turn over their money

to insurance companies or investment companies can be protected from abuses. We

would certainly support increasing penalties for abuses which are defined as

offenses.

Mr. Speaker, I will take my place and wait to see if one of

my colleagues - perhaps the Member for St. John's East will want to participate

in this debate and enlighten us a little more, and then I await the minister's

concluding comments.

MR. SPEAKER: The hon. the Member for Humber Valley.

MR. WOODFORD: I would like to ask a couple of questions

of the minister concerning this bill.

Clause 9, subsection 45(4) dealing with liability of

directors and officers: The bill covers insurance adjusters, I take it,

insurance agents and insurance brokers. If that is the case, the directors or

officers of a company are not the agents. What responsibility does an agent

have? I have examples, and I guess some members opposite had examples over the

last couple of years, of an insurance company in the Province which insured the

fishermen and their boats, I know, in the White Bay area, and after two or three

months they were told, after paying the premium - the premium had to be paid up

front. In fact, it was taken out of the loan board - any fisherman who had loans

from the loan board, it was a requirement that the insurance had to be paid.

Some of their monies were paid and premiums paid out through the loan board to

this particular company. I have it in my file - I just forget the name of the

company up there now. But, in any case, they were left without any insurance

whatsoever and this particular agent walked off scot-free. Now, under this

particular clause, it says, `dealing with liabilities of directors, officers or

partners'. Now, the partner might define, maybe, the agent, I do not know, but I

would like the minister to clarify that.

Going over to the back, on the last page, under Penalty on

46(2); "Every director or officer of a corporation and every person acting in a

similar capacity or performing similar functions in an unincorporated

association and every member of a partnership who," - my question is: Does this

just refer to an unincorporated business? Because, if that is the case, that is

very, very dangerous, Mr. Speaker, because all those companies, and there are

some small ones out there, but all of those larger companies are incorporated

naturally; but the danger I see is in brokers. The agents usually are set up in

an area where everybody knows who they are and what they are and so on, so what

would they be responsible for? My prime consideration and concern is with the

agents. I have seen, and I am sure hon. members opposite have seen, over the

years, some bad claims and some bad deals with regard to agents with insurance

companies. Now, are they liable? If they are just as liable as the directors of

companies, then sobeit, but if the directors of the companies are liable for

their agents, which is what I can understand under this particular section, then

the individual, claimant, constituent or client whichever way you want to phrase

it, maybe they are covered. That is one of the concerns I have had. I have seen

cases where the Superintendent of Insurance in the Province had to act; I

remember years ago when I was on the Federation of Municipalities,when they were

talking about insurance for the municipalities in the Province; I have seen

cases where fishermen in the White Bay area, my district, have been hurt by

claims and by agents who have sold them insurance and found out a month

afterwards that it wasn't any good. In Clause 10, look at the back under Penalty

- it says, a natural person or a corporation - that is the only thing that I

would like to have clarified. Because if they are not protected through an

agent, then, as far as I am concerned, you have a long court battle afterwards,

from my experience. If it is just the directors and the officers in the

hierarchy above, then I don't think that protects the individual in the

community who, innocently enough, will go in and buy insurance and find out a

month later that they have a problem with it.

That is just a question to the minister. Maybe he would like

to respond.

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

MR. HARRIS: Thank you, Mr. Speaker.

I have to confess to being not totally familiar with all the

provisions of The Insurance Adjusters, Agents and Brokers Act, and the

amendments that are being made before the House. Of course, part of it, I

suppose, is that these amendments have come forth in the last couple of days

only, and most members have not had a chance to read the legislation in detail,

let alone consider the consequences of it. I think it is an unsatisfactory way

for the business of the Legislature to be carried on, and hopefully, it won't

happen in the future, if we have our new rules up and running - the new rule

just recently passed - and that all of these matters are put out to a committee

and at least there is some time to consider them.

This Act seems to be not merely an adjustment in legislation,

but there are some new principles involved - and some important principles. I

think some of them are quite important. I was looking, in particular, at the

provision with respect to the requirement that licensees, insurance brokers and

agents and adjusters be required to have errors and omissions insurance, or

insurance for negligence, as it is known. I think that is a very important

provision. We come across cases all the time, as Your Honour would know, from

the practice of law, where there have been mistakes made by insurance agents in

the completion of forms and the coverages involved, and we find out after the

fact, when there has been a fire, that the instructions that were given by an

individual to an agent weren't carried out, or certain coverages weren't put in

place or, in fact, the wrong advice was given to an individual seeking

insurance. And the end result is that they are not covered for what they think

they are covered. Their building burns down, or they are involved in some sort

of a claim against them, and all of a sudden they find out that their insurance

doesn't cover it. It ends up being very messy.

The legal cases involved are quite complex, and uncertain,

moreso, and often result in an inability to recover. Even an agent involved

quite often is not a substantial individual or corporation and may be just a

small business in a local community that has an agency for a particular company,

and the agent, the company, for whatever reason, the insurance company, itself,

cannot be held liable and you are left with a claim against somebody who doesn't

really have the ability to pay.

I think that is a very important addition, because it is the

kind of business that sometimes people get involved in. They don't necessarily

know all the complexities even though they may have a licence and may have

undertaken a course of instruction in order to get a licence. There are lot of

complexities involved and there is every reason why they should be insured in

order to protect the public. So I think that is a good step and one that I could

support.

I am glad the Leader of the Opposition agrees that these are

important points to be made. I think he even likes my speech, he said, so I am

pleased with that because it is an important change.

I have a concern about item No. 7, and perhaps the minister

can explain it. I didn't hear his explanation, if he gave one. It is an

amendment adding, after

section 30, an opportunity to exempt persons from the

requirements of

section 30 of the Insurance Brokers Act. I find it curious that

the government would want to have that power, since

section 30 of the act is the

most important section, providing that all funds received by an agent or by a

broker, or by a representative of an insurance company, are, in fact, trust

funds being held on behalf of the insured - all monies held from members of the

public are, in fact, trust funds, and that those trust funds are not, therefore,

the property of the insurance agent or the insurance company. They can't be

subject to execution - and I do not mean having your head chopped off - but they

cannot be subject to being taken by a creditor of the insurance agent. We have

had a number of situations where insurance agencies may go bankrupt. We have had

it happen recently in the City of St. John's and the question comes up as to

what happened to the premiums that were received by the insurance agent, or

members of the public for policies? This legislation,

Section 30, say that these

monies will be considered trust funds and therefore are in fact not the property

of the insurance agent at all but are in fact the property of the insurance

company on behalf of whom they are collected.

MR. MURPHY: (Inaudible)

MR. HARRIS: They cannot be used by the individual agent,

broker, or whatever it is, accepting this money. It does not make any

difference, I say to the Member for St. John's South, whether it is an agent, a

broker, or a representative of the insurance company. The funds these companies

will receive under

Section 30 are considered to be trust funds and that has as

important consequences for creditors trying to get at these funds as important

consequences for the insurance companies who might then be more able to be held

liable on policies that were suppose to be issued. It seems to be that obviously

the actions of an agent, a broker, or a representative, in doing something with

those funds other than passing them on to the insurance company, also makes it a

much more serious matter.

My point is that

Section 30 of the act serves to make the

handling of this premium money a very serious matter as opposed to be just the

same as if you were running a corner store and taking in monies over the

counter. What do you do then? You put them in your pocket or you put them

somewhere else and as long as you pay your bills nobody is going to be worried,

as long as the Minister of Finance gets his RST. In fact some stores use to have

this habit of whenever they took their money in over the counter they used to

have a jar, but I think it is probably a garbage bag now, or a garbage bin, and

they would put the three or four cents retail sales tax into a separate jar. I

remember that in some dry goods stores on Freshwater Road, the Higher Levels

they called it then, when I lived on Parade Street down around the corner the

dry goods store used to have a little jar next to the cash register and when you

paid your sales tax there would be a little jar for Joey. They put in a few

cents for Joey every time they made a sale. Well, that is now regarded by the

retail sales tax, as the Minister of Finance knows, as trust funds. These are

trust funds and are not for Joey anymore. They are regarded as trust funds now

and the creditor of the store cannot take the money, and in the same way

Section

30 of the act makes the premiums received by an insurance agent or broker

treated in the same manner. The commissions are the funds of the agent but the

premiums less the commissions do not belong to the agent at any time. They

cannot be taken by the creditors of the agent and in fact they are the property

of the insurance company. That

Section 30 then is a very important provision

because it makes it clear that these are not the agents monies and that the

agent cannot do what he pleases with them. The penalties, of course, for dealing

with trust monies are far more serious than they might be for dealing with other

money belonging to other people. If there is a breach of trust involved we

always see the courts acting in a very strong manner towards people taking those

funds and using them for their own purpose. I would like the minister to explain

why it is that Clause 7 of this legislation allows the minister to give an

exemption. Now, the minister is standing there so maybe he can give an

explanation. I know he is not going to participate in the debate but I suppose

in the same way that an official might supply a minister with information to

supply to the House, I am sure the Minister of Justice, I would have no

difficulty certainly with the Minister of Justice explaining to the Minister of

Finance, so he could tell the House, why it is that such an important piece of

protection of the public would be able to be exempted by the minister upon an

application of an individual. Why that period might not exceed twelve months

from the date of the proclamation of the Insurance Adjustors, Agents And Brokers

Act. That Act was proclaimed in 1986 sometime.

AN HON. MEMBER: No, (inaudible).

MR. HARRIS: Whenever it was proclaimed. Looking at the

Act it says that it's to be fixed by a date set by proclamation. That particular

part was passed back in 1986. So I assumed that between 1986 and now the Act had

been proclaimed. So I wonder why we need that provision. Perhaps there is a

reasonable explanation, or even an unreasonable explanation. I'm sure there must

be some explanation as to why the minister wants that. It seems to me that

Section 30 is a very important provision and ought to be followed to the letter.

I also agree, Mr. Speaker, with the increase in the fines,

although I don't know where the numbers $100,000 or $200,00 came from. The

previous

section having to do with penalties provides for a fine of up to $2,000

on

summary conviction, and in default of payment to imprisonment for a term of

not more than twelve months, or to both fine and imprisonment, with a

corporation or partnership being possible to be fined on

summary conviction to a

fine of $10,000.

I have a concern that there has been removed from this

penalty the possibilities of jail. I'd like to know why that is. No difficulty

increasing the size of the fine. We can have corporations or companies in

particular trying to benefit by carrying on in a manner that's contrary to the

Act to their profit, and there should be sufficient deterrence there. But if

we're going to be saying to insurance brokers, agents and representatives, if

they have very important requirements under this legislation, and if they act in

breach of these regulations and don't hold these monies in trust, which they're

supposed to, use them for their own purposes, carry on with clients' money - why

should they be limited to a fine and only have the possibility of the fine, when

the previous legislation provided for a fine or imprisonment up to twelve

months, whether in default of payment of the fine or not?

That seems to me to be an important question. Why are we only

dealing with money when it comes to insurance brokers, agents and

representatives breaking the law, when in almost all the other regulatory

legislation, if you have somebody - I'm not suggesting that any person who

violates the Act would be deserving of the penalty of a jail term, whether it be

two months or six months or twelve months. But that option of a jail sentence as

a deterrent for an individual who is acting in total defiance of legislation

that's designed to protect the public such as this, then the option - I see no

reason why they should be made a special case and insurance brokers and agents

not be subject to a jail term in an appropriate case. There's been no

explanation forthcoming. I don't think the minister addressed that when he spoke

on the Bill. I'm sure his knowledge of the Bill perhaps is not sufficient to be

able to answer that question, but I think it's something deserving of an answer.

In principle, of course, as this is second reading of the

legislation, I'd have to say that I support the principle behind increasing the

fines. I support the requirement that there be errors and omissions insurance

provided by all insurance agents, brokers or representatives. The amount is to

be determined by regulation. Perhaps the minister can say what amount is being

contemplated by the government in these circumstances. I know a single insurance

claim, or a single claim against an agent, could well be in the hundreds of

thousand of dollars, if you had an error made in the putting in place of policy

and you had a $500,000 fire, or a $200,000 fire, or a $1 million fire.

It's not too much trouble to have that kind of fire in this

Province, Mr. Speaker. We had a terrific fire out in Grand Falls recently in a

warehouse that cost several million dollars. It was caused by a fire in a truck.

A fire in the back of a (inaudible) I guess they are called, a refrigerated

truck, there was a fire in the back of that and that caused the warehouse to

burn down causing several million dollars worth of damage. If there was an error

in a policy, an insurance policy, insurance coverage caused by an agent or some

person involved in this particular transaction, they could easily see a very

serious claim there, so I am curious as to what amounts the government is

contemplating as the minimum amount required for errors and omissions insurance

for insurance agents.

I know lawyers are required to have errors and omissions

insurance and with good reason, so it appears from the claims experienced that

has been reported to the Law Society over the last number of years, and the size

of the extent of the coverage is required to be fairly great because errors made

by lawyers can cost clients a considerable amount of money even for one

transaction, so that

part interests me, but I would like the minister, when he

closes debate at second reading to provide an explanation for clause 7, and an

explanation as to why we are being asked to remove the possibility of a jail

term for individuals who are in violation of this act.

We have an additional requirement of an order for

compensation being able to be made but we do not have any jail terms any longer

permitted. The other issues seem to be bringing the act into conformity with

other types of legislation and I have no comment on them, so in saying that I

support, on behalf of the New Democratic Party, the provisions of this

legislation, I would close my remarks at second reading.

Thank you, Mr. Speaker.

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

MR. WINDSOR: Mr. Speaker, there are a few points I want

to make on this bill to the minister and I do not profess to have any great

knowledge of the insurance industry either, although my wife is an agent,

therefore I have some sensitivity to some of the things that I hear.

My first question to the minister, and I do not know if the

minister can answer it, but is the insurance industry aware of this, what

consultation took place with the insurance association or whatever there may be

in this Province, prior to bringing this legislation forward, are these

companies who are involved here, aware of what is being proposed and what are

the impacts on it?

We have talked about for example, the errors and omissions

insurance and it is very difficult to argue against that, but what is the cost

and, are all the agents aware that this is an additional cost? I am not sure

that they all have that kind of insurance at the moment. I do not disagree with

it but let us find out what the cost is and what will be the impact on the

clients, on the consumer therefore, so I am interested in that. I will not take

the opportunity to say that there are agents and then there are agents,

unfortunately. I have discovered that in my brief exposure to the industry, and

perhaps, maybe the minister can address that or perhaps he cannot, I do not

know, if not, we should have somebody available to us, but I guess the bottom

line of what I want to say this afternoon is, does this legislation have to go

through now? Could we not refer this to a committee?

This appears to be exactly the sort of thing that should go

to a committee, a Legislative Review Committee, so that knowledgeable persons

can be called before the committee and I do not expect the minister to be able

to answer the types of question that I want answered this afternoon or that of

other hon. members have asked as they have spoken, this afternoon. Is there an

urgency that requires this to go through? Could we not, very usefully, refer

this to a Legislative Review Committee, so that we could have an opportunity,

those of us who may have an interest in it, and you know, I confess that I have

some special interest because of my wife's involvement, but could we not have a

proper review so that proper people from Consumer Affairs can be called in, so

that representatives from the insurance industry can be called in and that we

can have an opportunity -

The first I heard of this piece of legislation is when I sat

here in my seat this afternoon and I must confess I had not seen the bill, so I

am not really prepared to ask the types of questions I would like to ask, but I

want to say that there are a lot of other things that need to be looked at and

the committee could very well get into that. I am aware of examples of conflicts

now between banks and insurance companies, and I think this is outside the

purview of the provincial legislation. Banks have now been given the right to

get involved in areas that have traditionally been the field of insurance

companies. One example that comes to mind is registered retirement savings

plans. Banks are now selling those. I recently went into a bank and I was passed

a card by a teller, who was doing her job, but she passed me a card and asked:

do you know about our RRSP plan? Then, as she was no doubt told to do, she asked

me: are you interested in RRSP? I said: no, I am not.

AN HON. MEMBER: As a matter of fact, she probably had a

quota.

MR. WINDSOR: That's right. She had her quota. She asked,

you know: do you mind telling me why you're not interested? I said: because if

I'm going to invest I will invest in an insurance company. Because what

consumers don't know is that if you buy an RRSP from the bank, and your account

is at that bank, that bank can take funds from your RRSP to cover other debts

that they have, which they cannot do - I doubt that there's anybody else in this

House - I probably wouldn't know except for my involvement. Again, I stand to be

corrected on that, but that's the information that I've been given.

So there are many questions I'd like to find out about the

insurance industry, and the interrelationships between banks and insurance

companies. There are other investment groups that are out competing for

investment funds. That's fair ball. What controls do we have on these people as

to what they're telling clients? I am aware of many people who have cancelled

life insurance policies into which they'd been paying for many years. We all

know that once you've been paying into a policy for many years, or a policy you

bought say twenty years ago, you could never hope to get the kind of life

insurance coverage that you've gotten from that policy for the same price today.

Prices have gone up so dramatically over the last number of years.

There are investment companies now that are convincing,

persuading people, to cancel their life insurance funds, take the cash value

out, and transfer it into various types of investment certificates. Which do not

have the same level of security, which promise a greater rate of return in the

short term, but do not have the long- term security.

AN HON. MEMBER: (Inaudible) protection.

MR. WINDSOR: Pardon?

AN HON. MEMBER: And don't give you any insurance

protection.

MR. WINDSOR: Do not give you any insurance protection,

and do not give the long-term financial rewards. They're sort of - what they do,

in fact, is put in place an annuity. You can do this with insurance. You can

take your insurance cash value at the end of the term and you can roll it into

an annuity, which gives you a considerable amount of funds for the next fifteen

years, or whatever the term of the contract might be. But at the end of that

time you have nothing left. Your money is all gone. So if you had $100,000 cash

value that you'd built up over your lifetime, you rolled it into an annuity, you

draw out of that annuity for a fixed period of time. Well, a minimum period of

time. In some cases you draw it until your death. It will be paid until death.

So if you put it in at sixty and you live to be

seventy-eight, you would draw until seventy-eight. But if you died at age

sixty-five it stops. Well, there's probably a minimum ten year type payment, so

the estate would continue to get paid for five years, but at the end of that

your $100,000 is gone.

Whereas in other forms of investment you can invest your

money in, and you will get a return on it, and at the end of the term, or on

your death, the estate gets the whole amount of the principle.

But we have too many people who are not regulated, as the

insurance industry is regulated, who are out there now in the marketplace

competing with legitimate insurance companies for that same investment dollar,

promising all kinds of returns, giving false information, in many cases, to the

client, and the average client does not understand the world of insurances and

investments and annuities and all the rest of it. Very few people in society

truly understand it, unless you're in the business or have made it your business

to learn a great deal about it. Maybe if you're in a legal profession you've

learned about it, or in the business area, but most people don't.

A lot of people are being given bad advice and are cancelling

life insurance policies that are tremendous investments for them, that they've

built up over a long period of time, and they could never hope to get that kind

of protection through any other mechanism.

So I'd like to see us do a little more thorough - and here is

a good opportunity to do it. I can't, for a moment, see anything in this that is

so urgent. It is not a piece of legislation that I can agree with. Again, I

would like an opportunity to learn more about it and ask questions of those in

the industry who are much more knowledgeable. I would like to refer it to some

professionals and ask them for their views on it. I would like to know if the

government has done that, if the department has, and what consultation there has

been before it was even brought here. But I can't, for a moment, believe it is

so urgent that we can't refer this bill to a Legislation Review Committee and

take an opportunity to learn more about it and be sure that what we are doing is

in the best interest, not only of the consumer, but of the insurance agents, as

well, and the insurance industry, and to protect that industry. Because if we

tighten up too much on that industry, then the cost to the consumer goes up, and

ultimately, the protection of the consumer might well be threatened.

I am concerned that there are insurance companies, as well,

which are providing instruments that are of no value. I am also aware that this

Province, the Department of Consumer Affairs, does not go as far as they should

in checking into companies - the real insurance company. It is not here. There

are no insurance companies in Newfoundland. There are agents and brokers, but

there are no insurance companies. Insurance companies are in the United States,

or in England or wherever. Some of those are not as solid as we would like to

hope they are. So agents here in Newfoundland may well be selling instruments in

good faith, not knowing that the company they are dealing with may not be able

to honour those instruments further down the road.

So I ask the minister: Would he consider deferring this to a

Legislation Review Committee, so that we can all get involved in what I believe

would be a very meaningful exercise in learning more about the industry, and

particularly looking into these aspects that I have talked about.

MR. SPEAKER: The hon. the Minister of Finance, if he

speaks now he will close the debate.

The hon. the Minister of Finance.

MR. BAKER: Thank you, Mr. Speaker.

I would like to thank all members who participated for their

very positive comments and questions and so on concerning this piece of

legislation.

A number of specific points were raised. The Member for

Humber Valley, in referring to

Section 10, wanted some indication that - it

seemed as if we were talking simply about directors, officers of corporations,

and people performing similar functions in an unincorporated association,

referred simply to these people, and whether the net of offense was much broader

than that.

In actual fact,

Section 46.(2) is a specific reference to

directors, officers of the corporation and so on, to make sure they are included

under the ambit of this particular Act. It does not mean that the other people,

the agents and so on, are excluded. It simply is a special reference to the

directors and so on to make sure that they are included and are liable to the

same fines as anybody else who commits an offense under this act would be liable

to.

With regard to the fact that the jail option has been left

out, I am not so sure exactly why that is so. I will find out and advise the

House a little later on this afternoon, in the Committee stage, or whatever.

The comment about the trust section,

section 30 which, in

fact, makes any money collected outside of the commission fees, as trust funds

to be handled accordingly - the reason that there was this

section here: A

person may make application to the minister for an exemption for a twelve-month

period, simply goes back to the fact that this Act has not been proclaimed. And

right now, there is no regulation that under this Act, because it has not been

proclaimed, these funds are not now deemed to be trust funds according to the

legislation. When you make a change like that, at any point in time - and I am

assuming that this is due to be proclaimed July 1.

When you make a change like that you have to give - because

you don't know all the circumstances that are out there, and it is a big

industry. You have to make allowances at some levels for this to be phased in.

So there was an allowance made that applications may be made - don't have to be

- may be made to the minister to allow a phase-in period for the trust funds.

That doesn't mean that in all cases this will be done. In most cases, I should

imagine, it is very easy for that to happen immediately and the minister

wouldn't give blanket approval for everybody who applied unless the reason was

particularly good and so on. So, it doesn't imply automatic approval. But, when

you bring in something like this, you don't really know all of the effects it is

going to have in the system so you have to allow some time for some people to

phase in.

The Member for St. John's East mentioned that this is similar

to retail sales tax. Now, if we were to require that trust funds be set up for

the retail sales tax - right now that is not deemed by legislation. It is sort

of understood that these are trust monies, not enforceable in law, by the way.

We have difficulty collecting these monies because the courts don't deem that

they are automatic trusts the minute they are collected. But if we were to make

a change like that, it would only be fair to give a phase-in period, because it

would have a tremendous effect on a lot of businesses out there, and we would

have to give them time to adjust. Because, customarily, they have use of some of

that money for thirty days or forty, up to fifty days before it becomes due in

some cases. They are used to having use of that money and it would take them

awhile to change, to increase their line of credit or whatever, to be able to

adjust to taking that and putting it in a trust fund immediately. So, some

phase-in period, I guess, may be necessary in some segments of this particular

industry, but again, it doesn't mean that everybody will have that twelve

months. There would obviously have to be a good, sound, sensible, logical

reason.

The policy of errors and omissions insurance: There has been

consultation, I understand - although I stand to be corrected by my friend, the

Minister of Justice, who is out because of a conflict, but I will check with

him. I understand, there has been extensive consultation with the industry

about, in the first instance, this Act, that was brought in long before we

assumed office, and in this instance, about the amendments, there has been

extensive consultation with the insurance industry about the amendments.

I am not knowledgeable about the cost of the omission and

error insurance but it is something that has to be. I understand the comments of

my friend from Mount Pearl as to what effect that will have on the industry. How

costly will it be? Will that then increase the cost of the services they provide

and so on? Well, obviously, it will, a little bit, but it is something that will

have to be done. I will again, for the Committee stage, if we get that far, see

if I can get some further information about the cost of that policy. I am

assuming it is not high. It would depend, I guess, on the number of court cases

related to errors and omissions. There are a number of instances where people

have been hard done by in terms of errors and omissions. Come to think of it, it

may be high, because some of the stories I heard here today could very -

MR. WINDSOR: Would it be the same for all (inaudible) or

would it be a percentage of (inaudible)?

MR. BAKER: I have no idea, I will attempt to find out.

The final comment I need to address is the suggestion from

the Member for Mount Pearl, that this will be an opportunity for a committee to

look into many aspects of this very complex and widespread industry in the

Province. I will ask my friend, the Government House Leader, if there is any

hurry. I am assuming there is, because we wanted to - the longer we delay in

terms of the trust fund, which is

section 30, the longer the delay, the less

protection there is out there. I don't know if there is some other mechanism we

can come up with whereby we immediately - like proclaim the 1st of July and

provide the protection in terms of the trust funds, the bonding, the increased

fines and so on and, at the same time, come up with another mechanism to do an

examination of that particular industry which perhaps a lot of us would like to

get involved with.

MR. WINDSOR: (Inaudible) to do something.

MR. BAKER: Yes. So, I will take that part under

advisement and perhaps again - that is a third point about which I will get back

to the hon. House. In the meantime, Mr. Speaker, I move second reading.

On motion, a bill, "An Act To Amend The Insurance Adjusters,

Agents And Brokers Act," read a second time, ordered referred to a Committee of

the Whole House on tomorrow. (Bill No. 16).

MR. ROBERTS: Order 13, Mr. Speaker.

Motion, second reading of a bill, "An Act To Amend The

Teachers' Pensions Act". (Bill No. 11).

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

MR. BAKER: Thank you, Mr. Speaker. This bill,

An Act To

Amend The Teachers' Pensions Act, is an attempt to correct two problems that

arose when we made changes to the pensions legislation two years ago. The

changes that we made had a couple of unintended effects, and this bill corrects

both of these unintended problems.

First of all, it would permit a teacher who is absent from

work for a period of time due to a legal strike or lockout to purchase that

period as pensionable service. Now, that is a normal procedure in collective

agreements and so on, and, in the legislative changes that we made, this was

inadvertently left out and was not allowed. It was something we didn't realize.

It was pointed out to us after the legislation was done and we said: Okay, we

have to correct this at the earliest opportunity. This happens to be the

earliest opportunity.

The second thing: to permit a teacher who terminated his or

her employment and elected a deferred pension to obtain a disability pension

where he or she is subsequently disabled and would have qualified for a

disability pension, had he or she still been employed as a teacher. So this

again - the access to the disability pension was a normal thing that was part of

the collective agreement, and when we changed the pension legislation it

disallowed this procedure unintentionally. Because we did not intend through the

pensions legislation to change any provisions of collective agreements. When it

was pointed out to us quite some time after - because nobody realized it until

quite some time after - then we made the commitment that we would also correct

that problem.

Mr. Speaker, that is the essence of this particular bill, "An

Act To Amend The Teachers' Pensions Act". This obviously came up for a little

bit of discussion over the last few months, in discussions with the NTA

concerning the options that government had and their agreement as to which

option should be chosen for them. It was, at that point in time, the subject of

much discussion, as well.

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

MR. WINDSOR: Mr. Speaker, this is a fairly

straightforward piece of legislation. We are not going to take any amount of

time to debate it. There isn't a great deal in it. As the minister says, it

appears to be just something that was left out previously.

AN HON. MEMBER: Clear as mud.

MR. WINDSOR: Clear as mud, another brilliant explanation

of his legislation. I assume, what this does is bring this legislation in line

with other legislation. Is that accurate?

MR. ROBERTS: I congratulated him on the job he did on my

bill, the insurance bill.

MR. WINDSOR: Good! Now leave him alone so he can do a job

on his bill. I was just asking the minister, Mr. Speaker, whether this brings

the teachers in line with other pension plans. Do other pension plans have the

opportunity, for example, to purchase service loss because of legal strikes and

lockouts, or is this making it something different?

MR. BAKER: I think most of them have that provision in

their collective agreements, but not all. I would be wrong if I said all,

because I don't believe all of them have it. But, yes, it is in a number of

collective agreements.

MR. WINDSOR: The disability pensions: If somebody takes

an early retirement - is that how I understand this? - or elects a deferred

pension, they make it into disability?

MR. BAKER: Yes.

MR. WINDSOR: If they resign.

MR. BAKER: Yes. This is the instance where a teacher

retires before the normal retirement age, has a number of years pensionable

service - it could be twenty-five or thirty, or whatever - and they retire

before pensionable age because of a problem. It could be a back problem, it

could be a health problem and so on, that eventually, it is discovered, has

really made them disabled. Then they can access the disability pension, because

they are on deferred pension. In other words, they are not collecting pension,

and then they can start collecting their pension because of the disability and

not have to wait until they reach normal retirement age.

MR. WINDSOR: So they can get a disability pension until

their pension kicks in?

MR. BAKER: Yes.

MR. WINDSOR: Thank you, Mr. Speaker.

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

MR. SULLIVAN: Thank you, Mr. Speaker.

The bill is very straightforward, I think, and it is

positive. I just needed a point of clarification in explanatory note (b). It is

my

interpretation of that - maybe the minister could confirm it - that if a

person who has left the teaching profession and is retired, who would have been

eligible for a pension had the person stayed and got injured, in other words,

has worked that time, and who is deemed eligible to receive it, and takes up

another job, let's say, as a truck driver, and three years later gets injured as

a truck driver, and cannot work, that person could then draw on the teacher's

disability pension, assuming that teacher has earned the right to be eligible

for disability. Would that be correct?

MR. W. MATTHEWS: How can that be?

MR. SULLIVAN: That is my understanding from reading it,

and my understanding from what the minister said.

MR. SPEAKER: The hon. the minister.

MR. BAKER: Mr. Speaker, it doesn't really mean that. I

should inform hon. members that the disability pension conditions are in need of

explanation and tightening up. I am in the process of looking at the procedures

for disability pensions, and loopholes that may exist have to be closed off, but

this does not mean that a person who was teaching, and left teaching before the

time and then, subsequently, went to work as a truck driver or something and got

injured and became disabled on that job, I guess, they would be then subject to

workers' compensation type of disability and so on, and not teachers' pension

plan disability. There would be mechanisms in place to handle that circumstance

under the Workers' Compensation Commission and not under the teachers' pension

plan.

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

MR. SULLIVAN: Thank you, Mr. Speaker.

It says here in clause 3.1, `a teacher who terminated his or

her employment'. Basically, if a teacher terminates employment, after that point

he may take up work elsewhere, or he may not, whatever the case may be. So I

understand the minister is saying now that if the cause of the disability was

not evident when the teacher was working, the person cannot qualify for

disability if it is an injury that occurred after termination of employment. Is

that the

interpretation the minister is giving?

MR. BAKER: Yes.

MR. SULLIVAN: In other words, there has to be some

connection between the disability having occurred, in part or in whole, during

the teaching period?

MR. BAKER: No.

MR. SULLIVAN: Not necessarily so?

MR. BAKER: What I am saying is that if there is an injury

of some sort because the teacher has subsequently gone on to another job, and in

that particular work condition has suffered a debilitating injury, or disability

and so on, then that person would then we covered under workers' compensation

provisions rather than the teachers' pension plan. This is intended to cover

teachers who are between, when they retire a bit early for whatever reason,

either burnout, or whatever it happens to be.

MR. W. MATTHEWS: And are not receiving a pension.

MR. BAKER: Are not receiving their pension and are

waiting for their pension, that if in the interim it is seen they are, in fact,

disabled from teaching, they then be allowed to go back and get the disability

pension immediately, rather than wait until age fifty-five to collect their

teachers' pension. That is really all it refers to. It doesn't refer to the case

where a person then goes out and gets another job and something happens in the

other job.

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

MR. SULLIVAN: Thank you, Mr. Speaker.

So, basically then, a disability could occur after the

termination of teaching - that is what you are saying?

MR. BAKER: Yes, technically. (Inaudible).

MR. SULLIVAN: Well, it may occur before or after. There

are no restrictions on when the disability occurs. Is that my understanding?

MR. BAKER: That is right.

MR. SULLIVAN: Thank you.

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

If he speaks now he will close the debate.

MR. BAKER: Thank you, Mr. Speaker.

The comments by members opposite were, as usual, very

incisive and precise. The questions by the Member for Mount Pearl, I believe,

were answered at the time, and to the questions by the Member for Ferryland, I

gave answers, however, if I find there is anything different - this is to allow

a provision in the teachers' collective bargaining act to become operative

again, so the provision in the teachers' collective bargaining act would refer

only to the instance that I mentioned, where, for whatever reason, a teacher

leaves three or four years early and then it becomes obvious that that teacher

is disabled and if he or she were teaching, could not teach, then they could

access the disability pension.

The reason that this was there, is that, quite often and

there have been a number of instances, where, teachers suffering from a physical

condition of one sort or another, whether it be arthritis or back trouble or

whatever, have actually left the teaching profession because they could no

longer carry on in the classroom, they are probably aged fifty-two and would

have to wait three years for a pension, and then the condition for which they

left simply became worse, when they went through the medical process they

discovered that really, they were disabled and under our current regulations

they could not then go back and re-access the medical provisions of the

Teachers' Pension Plan, and we simply want to allow them to go back and do that

and it would be in accordance with the collective agreement, which would deal

only with the specific cases that I mentioned, it would not deal with people who

have gone off to other jobs, that would be disallowed, so, Mr. Speaker, I would

like to thank all hon. members for their comments and move second reading.

On motion, a Bill, "An Act To Amend The Teachers' Pensions

Act", read a second time, ordered referred to a Committee of the Whole House

presently by leave. (Bill No. 11).

MR. ROBERTS: Mr. Speaker, would you be good enough to

call order 15, Bill 24?

Motion, second reading of a bill, "An Act To Amend The Law

Society Act", (Bill No. 24).

MR. SPEAKER: The hon. Government House Leader.

MR. ROBERTS: Mr. Speaker, in the interest of giving my

friend, the Minister of Finance a spell, this being his day in the barrel it

appears, but I must say I do compliment him on the explanation and defence

against the onslaught of the Insurance, Agents, Adjusters and Brokers Bill, he

showed me insights into it that I had never realized before, although I was not

in the House and did not participate, I was listening outside the Chamber, and I

may say to the House, Mr. Speaker, that he got it right.

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: No, I have a very real conflict on one

thing, the

section 45, sub (4) amendments. I was retained by a group of people

in Newfoundland who objected to the former act on that and so I was conflicted

on the whole bill.

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: Well, I think - anyway, there was a present

change there and I took no

part in it but there you are.

Now, Mr. Speaker, let me come back to the bill before the

House. Two years ago in the Budget, in other words in the 1992 Budget as opposed

to the 1993 Budget -

AN HON. MEMBER: The mini-Budget?

MR. ROBERTS: No, no, no. It was the major Budget that

preceded the mini-Budget, that preceded the Budget that destroyed any hope of my

friends opposite had of sitting on the treasury benches, so that Budget.

In the 1992 Budget, we announced that we were going to

require the law foundation to transfer to us for the purpose of funding the

legal aid scheme, two-thirds of the income that the law foundation earns, and

this bill implements that decision and that is why it is retroactive to 1,

January, 1992.

Now, Mr. Speaker, the law foundation is a group of men and

women who are a body corporate by virtue of the Law Society Act and the

section

it has amended is one of a group of sections that constitutes the law foundation

and sets up the parameters of its operation and it's purposes and objectives and

how it will discharge those. The funds which the law foundation get are almost

entirely garnered from the interest paid by the banks on the trust funds held by

lawyers.

Now there has been some discussion here in the House during

the day with trust funds, I know members are familiar with it, but briefly put,

lawyers in this Province as elsewhere throughout certainly Canada and I guess

the United States and England, are obliged to separate the funds they are

holding into two funds. One is the general fund which belongs to the lawyer or

the law firm and the other are trust funds which belong to somebody else.

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: I am sorry?

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: Yes, one of the members of the Law Society

got himself in some difficulty as a result of trust funds and in fact, a very

high proportion of the lawyers who go wrong, or at least are detected in going

wrong if you want to be very precise, their error involves trust funds.

For many years, the banks paid no interest on trust funds.

Now trust funds are often held only overnight or for a weekend. If my friend

from Humber Valley is going to buy a house, he will take in the money and give

it to his lawyer, or the lawyer will draw down the mortgage, or both, assuming

there is a down payment and a mortgage used to finance it, and the lawyer will

hold those funds for a day or two or three until the transaction is complete,

when they will be paid to the other lawyer, and they may be held there for a day

or two or three, and that is the normal course.

Now the banks were keeping the interest on that, so a number

of years ago, I think in the mid-seventies if recollection serves me, we finally

got our act together and the banks agreed to pay at least a modest amount of

interest, because while one may only be holding it for a day or two as a lawyer,

most firms in St. John's probably never have less than say half-a-million to a

million dollars in their trust account. It is always coming and going. There may

be a thousand separate amounts in the trust account, but at any given time the

balance is conceivably that large, so the interest can be substantial. The Law

Foundation gets that interest and then spends it.

AN HON. MEMBER: Why?

MR. ROBERTS: Why? I say to my friend from St. Barbe, who

has become very interested in monetary matters of late, and these things, that

even in the day of daily interest and computers it really is impractical to try

to give this money to the clients who really own it. The clients own that money

because it is the interest being earned on money held in trust for a client, or

on behalf of a client. In any event, if it cannot go to the clients, it sure as

the devil should not go to the lawyers. It is a disbarment offence for a lawyer

to take the interest on a trust fund.

Traditionally we have taken one-third. Now we are up to

two-thirds, and the reason we have to do the bill now is that the Law Foundation

is being a little sticky. Being lawyers, they are observing the letter of the

law. They are saying: Until you pass the bill, we cannot give you the money.

Well, we are down there running Legal Aid, lashing out the

cash to the lawyers who are entitled to receive it under Legal Aid, so we asked

the House to pass this bill, and the result will be that my friends at the Law

Foundation will reach into their capacious pockets. They have the money there.

They are holding it in reserve. It is earning a lesser rate of interest.

AN HON. MEMBER: Did you say rapacious?

MR. ROBERTS: Capacious.

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: Capacious - c a p a c i o u s. It is an old

mud lake family, I would say. Capacious pockets, as in my friend from St. Barbe.

In any event, all that this bill does is implement that

decision, so I commend it to the House and ask for second reading.

On motion, a bill, "An Act To Amend The Law Society Act,"

read a second time, ordered referred to a Committee of the Whole House presently

by leave. (Bill No. 24).

MR. ROBERTS: Mr. Speaker, could we now call Order 12, the

one for which the gentlemen opposite have been waiting? It is The Financial

Corporations Capital Tax Act, and may I declare another - I am sorry?

AN HON. MEMBER: I thought you were going to 16

(inaudible).

MR. ROBERTS: No, we will do that a little later in the

afternoon. Do you want to do 16 now? We will do 16 now, alright? Order 16, Mr.

Speaker, Bill No. 23, a bill, "An Act To Amend The Internal Economy Commission

Act." - my friend, the Minister of Finance.

Motion, second reading of a bill, "An Act To Amend The

Internal Economy Commission Act." (Bill No. 23).

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

MR. BAKER: Thank you, Mr. Speaker.

Very briefly, the current Internal Economy Commission Act

indicates that after an election, within sixty days after a general election, or

when necessary at a time between general elections, the Speaker shall appoint an

independent commission of not more than three persons to conduct an inquiry and

report respecting indemnities, allowances, and salaries paid to members of the

House of Assembly.

Also, Mr. Speaker, there is a little footnote added to that,

Section 5, which says: The recommendations contained in the report referred to

in this

section shall be final and binding.

Mr. Speaker, in light of the economic circumstances that

we're currently going through, the fact that we have cut members' salaries by

4.5 per cent for this current year, we felt that we could, in all conscience,

that we maybe should not appoint a commission that could recommend salary

increases at this point in time. The report would be final and binding on the

House.

So we're asking the House to do this amendment that changes

subsection 13(1), that repeals it, and substitutes the following: "The House of

out in the resolution, an independent commission of not more than 3 persons to

conduct an inquiry and prepare a report respecting the indemnities, allowances

and salaries to be paid to members of the House of Assembly."

This allows this House, Mr. Speaker, to decide at some point

in time in the future when we would go through this process.

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

MR. W. MATTHEWS: Thank you, Mr. Speaker. The Member for

Ferryland is rather exuberant here. We have to put two people on his coattails

to keep him down but he'll have his chance now in a minute. Just a brief comment

in response to the minister.

We've had some consultation, the Government House Leader and

myself, with the Internal Economy Commission on this issue. It's something that

personally, as one member of the House, that I can live with. I think it's a

very reasonable approach. As the minister said, we as members have taken a 4.5

per cent reduction in salary for this year and government now, at any time they

so see fit, will be able to appoint a commission. I guess all I want -

MR. SIMMS: Did they say when they intend to appoint it?

MR. W. MATTHEWS: No, they don't know, I guess. I guess

when the minister rises - you have no idea, time frame in mind, when you might.

It's going to be left to the discretion of the House.

AN HON. MEMBER: (Inaudible).

MR. W. MATTHEWS: Yes, exactly, depending on how things

evolve, particularly with the economy, I guess, and other financial aspects and

so on of budget. Anyway, that's all I have to say about it, Mr. Speaker. There

has been consultation and I think it's been worthwhile.

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

MR. HARRIS: Thank you, Mr. Speaker. I have no difficulty

with the explanation given by the Minister of Finance but I have a little

difficulty with the Bill itself. Because what it seems to do is not only change

the `shall' to a `may', but it changes the whole nature of this commission

that's to be set up.

The previous legislation, the part that's being repealed,

says that: the Speaker, after appropriate consultation, shall within sixty days

after a general election, or where necessary at a time between general

elections, appoint an independent commission of not more than three persons to

conduct an inquiry and a report respecting the indemnities, allowances and

salaries to be paid to members of the House of Assembly.

That removes it from the House itself and requires the

Speaker to appoint an independent commission. That commission has a final and

binding report. It could report anything, depending on whatever that independent

commission thought was appropriate with respect to indemnities, allowances and

salaries to be paid to members of the House.

What we've got is a replacement of that with this new

resolution. I would suggest that members look attentively to the difference

between the current legislation and the proposal here. That is that the "House

of Assembly may by resolution appoint...," not the Speaker. The House of

set out in the resolution...."

AN HON. MEMBER: (Inaudible).

MR. HARRIS: So not only.... Well, have a look at

Section

13. The existing Act says the Speaker. It doesn't say the House of Assembly, it

doesn't say resolution, it doesn't say anything except the Speaker has an

obligation to appoint a commission. What we've got here now is: "The House of

out in the resolution...." So we're going to have instructions now. There are

going to be instructions now to this Internal Economy Commission, or to this

independent commission, instructions from the government.

What are those instructions going to be? We don't know.

Whatever is in the mind of the Premier at the time, or the premier of the day,

or the Cabinet of the day, as to what will be contained in those instructions.

They could be instructions that are positive or beneficial, they could be

instructions that are negative and deleterious. They could be bad instructions.

It takes away the independence of this approach. Now, the government, over the

last four or five years, have been pretty hot to suggest it. I think hon.

members have had at least an opportunity, when the cynical public has been

encouraged from time to time to question various things, to say that this has

been decided by an independent commission. Now, this independent commission is

and conditions people may have in mind, but if it is to be an independent

commission that is going to establish - away from the political process, because

I think it is appropriate that it should be there - to appoint, as did the

Speaker, the last Speaker appointed a commission. They had no instructions, they

weren't told what to do except to make an inquiry and to report respecting the

indemnities, allowances and salaries to be paid to members of the House of

Assembly. This legislation changes the nature of this commission. Members can no

longer say that this is an independent commission, because this commission is

now acting on the instructions given to it, well, in theory, by the House of

Assembly, but in reality, by the Cabinet and the Premier. So that is a change.

And I suspect there is more to it than what the Minister of Finance said when

introducing the legislation. There is more to it than just putting this off

because there has already been a 4.5 per cent reduction in the House of Assembly

salaries and allowances, for tax-free allowance.

So, there is another agenda here that is not being made out,

just as, in the dying days of the Assembly, before the election, the last day,

as it turned out - it wasn't said to be the last day but it ended up being the

last day - when a piece of legislation was introduced, reducing by 4.5 per cent,

the salaries of members. I said in the House on that day, that that was a

blueprint. That was a blueprint for what was going to be presented to the House

of Assembly after the election, if this government got in, and that is what

happened. We had it yesterday under the Pensions Bill, 4.5 per cent reduction,

exactly the same as the blueprint that was passed here the last day.

MR. W. MATTHEWS: Mirror legislation.

MR. HARRIS: Mirror legislation. So what I want to know

is, what is the government up to? What are they up to here? The suggestion is

that they want to put off until next year the appointment of a commission, but

the second thing they are doing is taking away the independence of this

commission.

MR. W. MATTHEWS: How? How are they doing that?

MR. HARRIS: Well, the new piece of legislation said

instead of having a Speaker, as the former Speaker did, appoint a commission,

the commission is told that their job is to conduct an inquiry and report

respecting the indemnities, allowances and salaries. Here we have, the House of

out in the resolution, an independent commission.

MR. W. MATTHEWS: So the government is going to appoint it

now.

MR. HARRIS: So, the government is going to appoint it.

The government is going to decide, it is not the Speaker after making

appropriate consultations, as I am sure the Speaker did, with all parties

represented in the House; after making appropriate consultations he appointed

the commission.

MR. W. MATTHEWS: A commission or a committee - what is it

going to be called now?

MR. HARRIS: It is still a commission. But they are going

to give the members opposite a certain amount of credit, they don't use words

willy-nilly. This wasn't drafted by someone who didn't know what they were

doing. They had two or three options, in fact, I think they had two or three

drafts on the go in the last couple of days and they chose this one for a

particular reason. They are not telling this House what the reason is but,