May 5,

HOUSE OF ASSEMBLY PROCEEDINGS

Vol. XLII No. 37

The House met at 2:00 p.m.

MR. SPEAKER (Dicks): Order, please!

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

Speaker's gallery the well-known Newfoundland musician, Mrs. Minnie White, who

was a recipient last year of the Order of Canada.

SOME HON. MEMBERS: Hear, hear!

Statements by Ministers

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, within the last three weeks

or so the two Canadian bond rating agencies and the two American bond rating

agencies have released their ratings on the Province's long-term debt issues.

Three of those rating agencies reaffirm the Province's existing ratings with

them. They did, however, make other significant comments in the process.

Unfortunately, the one rating agency with which the Province

had an A credit rating, Standard and Poors of New York, today downgraded the

Province's A- credit rating to a BBB+.

With this downgrade, the Province no longer has an A rating

with any of the recognized credit rating agencies. This will no doubt create

difficulties for the Province in borrowing on the world capital markets as some

large investment funds require their investments to be at least A rated. Also it

will have some effect on the Province's cost of borrowing. It could also have

significant impact on the Province's borrowing flexibility in that we may have

to borrow in smaller amounts more frequently and indeed there may be times when

it would be difficult to go to the market at all.

It is noteworthy that Standard and Poors, and for that

matter, all the other credit rating agencies, have expressed their approval of

the government's management of the Province's finances. In the words of Standard

and Poors, "the Province has displayed impressive fiscal performance in recent

years generating operating surpluses after adjusting for sinking fund earnings

and posting moderate deficits". They note that in spite of these efforts there

has been a deterioration in our debt burden situation due to the problems in the

fishery, the sluggish economic growth and the unfunded liability in the public

sector pension plans. In particular, the closure of the groundfish fishery

causes a significant reduction in our gross domestic product figures because the

compensation payments are not taken into account as the income earned from the

fishery would have been. This resulted in a significant deterioration in the

debt to G.D.P. ratio.

Mr. Speaker, I should advise the House that there is also

some indication that things economically are starting to improve but I am not in

a position to make any significant statement on that now. Over the next few

days, a more detailed assessment will be made and the government will develop a

long-term policy to deal with the consequences of this. A fuller statement will

be issued early in the coming week, either by the Minister of Finance or by

myself.

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

MR. SIMMS: Mr. Speaker, this certainly is not good news.

It is nothing to gloat about and we certainly don't take any pleasure in hearing

this kind of statement being made here today. It will significantly impact on

the Province. Any time you lose or drop from an A rating - that is the

significant thing for Newfoundland and Labrador, in particular, if you drop from

the A rating. You always try to maintain at least one A rating, and having lost

that, it is extremely serious for the Province.

Mr. Speaker, notwithstanding the comments made in general by

some of the credit rating agencies - we have not seen their full statements yet

and we look forward to getting copies of them - I have to say this: For the last

five years, we on this side of the House have been preaching over and over again

that it is one thing to have fiscal policy, but you can't maintain a good credit

rating by fiscal policies alone. We have always said what you have to have on

the other side of the equation are policies that deal with stimulating economic

growth.

MR. SPEAKER: The hon. the Leader of the Opposition's time

has elapsed.

MR. SIMMS: If I may just conclude, Mr. Speaker, because I

think it is an important point, and I would like to make it again.

If you are continuing to simply take money from the economy

through cuts in wages, taxes, and those kinds of things - and in fact, I believe

the Premier himself mentioned the last day or so, one of his greatest regrets is

the government's failure to be able to do more to stimulate economic growth.

Well, I agree with him, and we have been saying it for a long time. I hope they

wake up now to the realization that some significant effort must be put into

that side of the equation, Mr. Speaker. As much as he doesn't like to hear it, I

think that is the problem.

SOME HON. MEMBERS: Hear, hear!

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

have leave to address the House?

MR. ROBERTS: By leave.

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

MR. HARRIS: Thank you, Mr. Speaker.

It is with regret we learn that one of the number of bond

rating agencies has reduced the credit rating. I suppose the good news is that

the others haven't, and I don't think we should get overly excited about it. Of

course, we regret that. I think the good news is that there is no evidence of a

deteriorating financial economic situation in the Province, and what we have to

do now is, instead of talking about negative things, emphasize positive things

that can be done. In a sense, it is a report card, but maybe a report card on

some mismanagement as well.

Thank you, Mr. Speaker.

Oral Questions

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

MR. SIMMS: Thank you, Mr. Speaker.

I just have a quick question for the Minister of Education,

if I may, before I move to my questions for the Minister of Employment and

Labour Relations. I understood the Premier wasn't going to be here today.

PREMIER WELLS: I have to leave shortly.

MR. SIMMS: I have no questions so you may be excused.

SOME HON. MEMBERS: Hear, hear!

PREMIER WELLS: I am grateful to the leader for his

consideration.

MR. SIMMS: Mr. Speaker, on another very serious matter

and issue that's facing our Province today, the issue of this teachers' dispute

with the government or the government's dispute with the teachers, whichever way

you want to put it -

I heard a news story just before I came to the House, so it's

a very quick question. I think it's the Minister of Education's responsibility

in this, I'm not sure, but I presume it is. I want to ask him, first of all, if

he can confirm that this news story is accurate - it may not be - that the

government has directed either the school boards or whoever, if necessary, to

order students to vacate the schools, stay home from school or whatever, either

tomorrow or Monday in order to allow the teachers to compile this evaluation

data or whatever you wish to call it and do nothing else on that occasion. Can

he confirm if that is an accurate news story?

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

MR. DECKER: Mr. Speaker, we were talking with the

superintendents yesterday and some of the superintendents have been telling us

some of the complaints they have been getting back from their principals. Some

of the principals have been saying they don't really have the time - it's so

busy in the schools these days - they don't really have the time to formulate

that. So to address that specific item we have given the superintendents the

authority to do one or two things. One would be to have some substitute teachers

come in to cover the place of the principal. We have also given them permission,

that in extreme cases they could actually close the school, the classes that the

principals are teaching. So we're making sure that there's no reason in the

world why principals don't comply with this directive. So I suppose there is a

measure of truth in the news report, in an extreme case you could well see some

children sent home if no substitute happens to be available at that time.

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

MR. SIMMS: Mr. Speaker, I must say, it's astounding,

really, because after the conciliatory statements - I suppose some would have

thought they were conciliatory statements made by the President of Treasury

Board yesterday in an attempt to try to get things back on track. To me this

seems like a very provocative - it almost seems like the government can't get a

strike fast enough with the teachers.

Anyway, let me move on to the Minister of Employment. We'll

follow up on this particular issue because we only heard it a moment ago. There

was no statement made in the House about it so we weren't informed and knew

nothing about it. The Minister of Employment on Tuesday, I think it was, a

couple of days ago, tabled the 1993 Annual Report of the Workers' Compensation

Appeals Tribunal. Now, if you look at page 1 of the report, you'll note that

there were 310 appeals requested last year in 1993, compared to 293 the year

before, 1992, which is only about a 6 per cent increase; however, the number of

formal hearings increased 118 per cent, from 108 up to 235, so I would first of

all like to ask the minister if he can explain why hearings would more than

double - increase by more than 100 per cent - when the number of appeals

actually increased only marginally. What would have caused that?

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

Labour Relations.

MR. GRIMES: Thank you, Mr. Speaker.

Actually, it was a matter of the Compensation Appeals

Tribunal doing a very good job. We appointed some additional vice-chairs and

additional sides people as representatives, because one of the complaints from

the previous year was that there had been a backlog of cases from earlier ones,

and if you track back the reports from 1992, 1991, you will see that the number

of cases dealt with were much smaller each year and there were a lot of people

having to wait into the next year.

What we were asked to do, and what the Appeals Tribunal

agreed to do with the sitting days that they used, was to catch up the backlog

of cases from previous years and to try to get current with the cases that are

filed in the year in which they were dealing with, so a lot of those cases were

ones that were filed in the previous year, hadn't been heard, and they did a

good job of trying to clean up the backlog and keep pace with the current

caseload.

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

Opposition.

MR. SIMMS: I thank the minister for his answer, Mr.

Speaker. This is a significant issue now because there are two things here. One

is the appeal - having an appeal - the other is having a formal hearing to hear

that appeal. You don't always have to have a formal hearing, so I would like to

ask him in a supplementary: Can he tell us how it is decided to refer the

appeal, or move the appeal along, to a formal hearing? Who actually makes that

final decision?

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

Labour Relations.

MR. GRIMES: It is my understanding, Mr. Speaker, that

when an application is filed with the Workers' Compensation Appeals Tribunal, in

each case - unless there is some investigation of file that shows an extenuating

or extraordinary circumstance - that in each case there will be a formal

hearing, that that is why these people apply to the tribunal, so that they can

have their case heard before the three-person panel, and that every single time,

unless there is a withdrawal or some investigation of the file shows there is no

need to have a hearing and it is disposed of in some other fashion, that it will

lead - the actual placing of the application - will lead to a hearing at some

point in the future.

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

MR. SIMMS: Mr. Speaker, a supplementary to the minister.

In 1992 the Appeals Tribunal spent, according to their budget

on page 7, $165,000 on Professional Services. In this report in 1993 last year

expenditures for Professional Services more than doubled to $355,000. Could he

now tell the House why that cost has gone up 116 per cent? More interestingly,

could he tell us specifically what Professional Services were purchased under

this $355,000 and to whom it was paid?

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

Labour Relations.

MR. GRIMES: Thank you, Mr. Speaker. The budget for the

Workers' Compensation Appeals Tribunal is relatively straightforward compared to

many departmental budgets and so on. There are basically fundamentally just two

major headings. One is for the permanent support staff of the Appeals Tribunal

itself, the office manager and the stenos, clerks and the file clerks and so on,

the people who duplicate the records and prepare them for the actual people -

AN HON. MEMBER: Oh, oh!

MR. GRIMES: That is the salaries for the full-time staff.

Then the hearings activity doubled this year as was pointed out in the report.

There was a significant increase. The Professional Services budget head is the

budget heading under which the per diems are paid to the chair or vice-chair,

whoever is chairing the actual Tribunal, and the sides people who represent the

employer representative and the employees representative. In fact, if the

activity of the Tribunal doubles or triples then the amount of money paid under

Professional Services to the individuals on a per diem basis would be expected

to double or triple.

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

MR. SIMMS: Thank you, Mr. Speaker. On a final question.

As the minister points out, all formal hearings of the Appeals Tribunal are

chaired by either the chairperson, Mr. Gordon Seabright, or one of the four

vice-chairs listed in the report. If you look at Table 6 on page 12 you get some

idea of how busy these chairs are. Of the 162 decisions brought down in 1993

more than half of them were held or heard by two people. Forty-three by Mr.

Seabright, forty-five of them by Mr. Brace. Can the minister tell the House how

much each of the chairs were paid in 1993 out of that $355,000? What the actual

breakdown was. If he doesn't have the information at his fingertips will he

table it?

Could he also tell the House, does the chair or any of the

other four vice-chairmen, or chairpersons, receive any other sort of income,

salary, retention? Is there any other payment paid to Mr. Seabright, for

example, other than his per diems for the hearings and so on? Does he receive

any other kind of income - a retainer, a salary? You know what I am trying to

get at, I guess.

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

Labour Relations.

MR. GRIMES: Thank you, Mr. Speaker.

Again, with the Chair, Judge Seabright, and also with the

Vice-Chairs - Mr. Seabright and Mr. Brace are not involved in any other

full-time jobs that I am aware of. Mr. Brace was recently elected to city

council, which takes some time. Prior to that, when he was serving, he was

available five days a week if there were hearings to be held, to actually chair

hearings; the same is the case for Mr. Seabright - they are available because

they don't have other jobs.

The other Vice-Chairs are lawyers who are involved in other

practice and, in fact, when they accepted the appointment they indicated to us

that they would only be available to hear tribunal hearings and to chair them

maybe two days a week some weeks, three days other weeks, so they were only

available on a part-time basis. So, in fact, when the workload is shared out, it

is because those two people, due to their availability, the fact that they,

through most of that last year that was reported, were not working at other

jobs, and were available more often than the others, that the others gave the

commitment they did.

Others would know that many times in these quasi-judicial

type of boards and panels, when lawyers are used they will only dedicate so many

days a month from their practice to these particular jobs; therefore their

availability is limited.

There is no other payment other than in the case of Mr.

Seabright. In the description of his position, he is Chair of the Tribunal and

CEO - Chief Executive Officer; that is what the legislative description is. In

this past year as well, we used to have an executive director who is no longer

with the commission, has been gone for a year, and the CEO worked at the office

maybe about the equivalent of half-a-day to do the other duties that were being

done in place of - paid on the same rate as if he were chairing actual hearings.

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

MR. SIMMS: Just a quick, final question.

First of all, maybe the minister knows and he can confirm:

Has Gordon Seabright resigned as whatever it is he is with Newfoundland Capital?

He is the Vice-President of Newfoundland Capital, as we understood it, a

full-time job with Newfoundland Capital as vice-president, but maybe the

minister knows he has resigned or something and can tell us that. Anyway, that's

kind of an aside, but I would like to know the answer.

A more important question is this: When he tables the

information I have asked him for here today, to give us an actual breakdown of

how much each of the Chairs received, will he also tell us if any of those five

persons that we are talking about receive any funding from his department's

budget, aside from what is contained in the budget of the Tribunal?

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

Labour Relations.

MR. GRIMES: By all means, Mr. Speaker, we will gather the

information on the individual basis for the Chair and the Vice-Chairs, and if

there are any other fundings that were dispersed to them through any

departmental budget, we will table that as well.

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

MS. VERGE: Thank you, Mr. Speaker. I have questions for

the Minister of Justice, the minister with responsibility for ensuring

provincial laws comply with the Canadian Charter of Rights and Freedoms.

Why is the government forcing its own Human Rights Commission

to spend scarce public funds to go to the Supreme Court to overcome charter

violations in the provincial Human Rights Code, when all the government has to

do to correct the Human Rights Code is bring a simple amendment to the House of

Assembly and get it passed in a couple of days? Why is the government allowing

public money to be wasted on an expensive court case when there is absolutely no

need of spending any money to achieve the same result, and achieve that result

much faster?

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

MR. ROBERTS: Mr. Speaker, I thank the hon. member for her

question, which was read in admirable fashion. Let me try to answer it, although

I have not had the opportunity to write anything out.

I may say I had no advance notice of this move. When I went

home last night I asked the Chair of the Human Rights Commission when they

decided to do this, and she told me, some time ago - talk about keeping Chinese

walls.

The position, unfortunately, or fortunately, as may be the

case, is not as the hon. the Member for Humber East would have us believe. There

has been no determination that the Human Rights Code of this Province is

unconstitutional. In fact, my understanding - and this comes from the -

MS. VERGE: What about the Ontario Court of Appeal

(inaudible).

MR. ROBERTS: Mr. Speaker, let me say two things. First of

all, I did not interrupt the hon. lady when she spoke. She might do me the same

courtesy. Secondly, the decision of the Ontario Court of Appeal, I suggest to

her with all respect, are not binding upon the courts in this Province.

I have made enquiries of the Chair of the Human Rights

Commission, who tells me that the commission, as they had announced earlier, are

proceeding on the basis that the law requires them, or authorizes them - the

commission, which reports to my friend, the Minister of Employment and Labour

Relations, either authorizes or requires them, pursuant to the line of reasoning

which the Ontario Court of Appeal found persuasive, to read into it

discrimination provisions other than those written in the statute. A judge of

the Supreme Court of Newfoundland, Mr. Justice Woolridge of the Trials Division

has taken a different position. Now, that's what the courts of Newfoundland have

said in my understanding. Accordingly, the commission has decided to take the

matter forward by means of an originating application; my officials would be

served pursuant to I think it is

section 51 of the Judicature Act which requires

any such matter to be served upon us, we will then deal with it. So that's the

answer to her question, but in a phrase, her question sounded on a faulty

premise, her logic is equally flawed, and so we will simply say, given that the

Human Rights Commission, doing what it is authorized to do by law, is taking an

appropriate course - it is not wasting any money in my judgement - we shall let

the courts decide this issue and then deal with it.

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

Humber East.

MS. VERGE: Thank you, Mr. Speaker.

A supplementary to the Minister of Justice or perhaps the

minister now responsible for the Human Rights Commission.

What about fairness and balance? What about Human Rights

protection? Why force the provincial Human Rights Commission to go to court and

waste provincial public funds when all that is necessary is for the government

to bring to the House of Assembly, a simple amendment to the Human Rights Code

and we can pass it in a couple of days? Why not co-operate for the sake of

fairness and balance and human rights protection and save ourselves some

provincial public funds?

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

Labour Relations.

MR. GRIMES: Thank you, Mr. Speaker.

I can only answer that to my knowledge, government is not

forcing the Human Rights Commission to do anything, absolutely nothing. They are

mandated, they are in place, they are doing what they think is right under the

circumstances, with no pressure from government, no force from government, no

interference from government because we wouldn't think about doing that. I don't

know if the hon. member opposite would, and I don't know why the changes that

she talks about weren't made when she was the minister responsible, some time

ago.

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

MR. SULLIVAN: Thank you, Mr. Speaker.

My question is for the Minister of Health.

Will the minister explain why, last month, about two months

after the tragic death of Mr. Sylvester Lynch, the Witless Bay Fire Department

were told that henceforth no medical emergencies will be directed to them by

911?

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

DR. KITCHEN: Mr. Speaker, I have asked for a report on

that one and I have had a preliminary report which was sent back to be enlarged

upon. When that is returned, I will be glad to answer the member's question.

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

Ferryland.

MR. SULLIVAN: Thank you, Mr. Speaker.

That has no bearing on why they cannot now perform the

service at all. I ask the minister: What assurances can he give that the 3,500

people in the Witless Bay area, who now have trained personnel there, will be

able to get response to emergencies in the area, and not have to wait forty

minutes for emergency services to arrive from St. John's?

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

DR. KITCHEN: Mr. Speaker, my understanding of it at the

moment is that the Witless Bay Fire Department is a volunteer fire department

which means, that there is not necessarily anyone there at all times, or

properly trained people there at all times, and it has been the policy that,

where there are volunteer fire departments, they are not to be used for health

purposes because there is no guarantee that they are appropriately trained

people or even indeed that anyone would be on the premises.

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

for Ferryland.

MR. SULLIVAN: Thank you, Mr. Speaker.

When the City of St. John's have properly trained people, and

people in the Witless Bay area are trained by the same individuals and have the

same status, I ask the minister, why can't these people perform the same service

available there in the area? It has nothing to do with the volunteer aspect,

they have 911, they have pager systems and they are always available with

seventeen trained personnel.

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

DR. KITCHEN: Mr. Speaker, thank you.

The St. John's Fire Department, at all times, is fully

staffed. The volunteer fire departments are not at all times fully staffed.

People are scattered wherever they are and they have to be summoned, so whatever

we have has to be as reliable as possible and for that reason, volunteer fire

departments are not, generally speaking, a reliable way that you can count on to

be able to respond to emergency calls of a health nature.

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

MR. WOODFORD: Mr. Speaker, my question is to the Minister

of Works, Services and Transportation.

The minister is fully aware, Mr. Speaker, and especially the

residents of Pasadena are anyway, that attempting to try to divert the new

T.C.H. from the southern bypass route to the transmission line route in

Pasadena. The minister is fully aware also that back in 1989 the town of

Pasadena, when they incorporated their new municipal plan in conjunction with

the Department of Municipal and Provincial Affairs, incorporated the southern

bypass route into their plan. Would the minister tell the House today if he has

taken any action - for instance, approached his Cabinet colleagues - or made a

request to his colleague, the Minister responsible for Municipal and Provincial

Affairs, to have this particular plan changed?

MR. SPEAKER: The hon. the Minister of Works, Services and

Transportation.

MR. EFFORD: Yes, Mr. Speaker.

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

MR. WOODFORD: Supplementary, Mr. Speaker, to the Minister

of Municipal and Provincial Affairs. Everybody knows, and surely the minister

knows, that in order to change the municipal plan, what the regulations are for

a municipality - mainly it is approached and instigated by the municipality.

Would the minister tell the House now if he is going to agree with the request

from the Minister of Works, Services and Transportation to unilaterally - I make

reference to that, the word "unilaterally" - change the town plan in the town of

Pasadena to accommodate, and in doing so, I say to the minister, that he has

admitted today that government has made a decision to change the southern bypass

route to the transmission line route. Would the Minister of Municipal and

Provincial Affairs confirm to the House that he will go along with that request

from the Minister of Works, Services and Transportation?

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

Provincial Affairs.

MR. REID: Thank you, Mr. Speaker. It is not often that a

minister gets a request from a fellow minister that crosses boundaries between

two departments. When I saw the letter from my hon. colleague the other day I

said, well, this is one for sure that I will have to investigate and pass back

to my committee which looks after changes to town plans and to my staff. I can

honestly say that I'm dealing with that particular question now.

If it becomes a question of making a unilateral decision,

well, so be it, if it becomes that - if that is the answer to your question. I'm

not sure at this particular time that we are in any position to make a

unilateral decision until both my hon. friend for Port de Grave and myself have

a chance to discuss it with our staffs. Then at that particular point in time,

Mr. Speaker, I will be glad to stand in the House, and if the answer is yes I

will say yes, and if the answer is no I will say no.

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

Humber Valley.

MR. WOODFORD: Final supplementary, Mr. Speaker, to the

Minister of Municipal and Provincial Affairs. Would the minister agree then

today that if he does this, if he agrees with his colleague the Minister of

Works, Services and Transportation to unilaterally change the municipal plan in

Pasadena, wouldn't this be setting a very dangerous precedent in the Province,

and would be dictating to municipalities in the Province? Something that now the

councils have jurisdiction over, they can initiate a municipal plan and call

public hearings and so on. Wouldn't this be setting a very dangerous precedent

in the Province for all other municipalities?

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

Provincial Affairs.

MR. REID: Thank you, Mr. Speaker. Setting a precedent? If

it means - quite honestly, and I'm going to try to answer my colleague's

question, if it means saving millions of dollars for this Province that the hon.

Ministers of Health, Education or Social Services would have access to from

those savings to open hospital beds in the Province, to possibly put some more

money into an education system, I will certainly unilaterally do it, with no

problem whatsoever.

SOME HON. MEMBERS: Hear, hear!

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

MR. HARRIS: Thank you, Mr. Speaker. I want to ask the

Minister of Finance whether he is ready today to answer my questions concerning

the taxes on the St. John's Transportation Commission. In particular, is he

prepared to advise the House that his government will consider removing the road

tax on diesel fuel to the St. John's Transportation Commission and the licence

fee on transit coaches, which together involve around $300,000 in taxes to the

St. John's Transportation Commission? Is he prepared to have this treated as

other municipal services are treated?

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

MR. BAKER: Thank you, Mr. Speaker. Since the hon.

gentleman asked his question yesterday I've checked into it and he provided me

with some information himself. When this request came into my office I

immediately had sent it to officials in the department for an analysis and when

the analysis comes back then we will decide whether we'll make a recommendation

to Cabinet or not.

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

John's East.

MR. HARRIS: Mr. Speaker, the issue raised by the brief

put forward by the City of St. John's indicates that Newfoundland is one of only

two provinces which doesn't provide any assistance to urban transit inside a

Province and in this case the taxpayers of St. John's must pay the total subsidy

for the St. John's Transportation Commission. Will the minister consider, in his

review, bringing Newfoundland into line with the other provinces, at least to

the extent of removing an additional burden that the Province places on the St.

John's Transportation Commission?

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

MR. BAKER: Mr. Speaker, I don't accept the premises of

the hon. member's question at all. We have to make our decisions in light of the

circumstances in this Province and not in the circumstances of Ontario, BC,

Quebec or any other province. Mr. Speaker, our decision will be made in the

light of what this Province can best do and not what some other province can

best do.

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

Kenmount.

MR. HODDER: Mr. Speaker, I'd like to direct a question to

the Minister of Education. While all parents are pleased with the decision of

the NLTA in the Province to resume negotiations, parents have some concerns with

the contingency plan for potential graduating students announced by the minister

on May 2. Mr. Speaker, specifically the in-school evaluations have historically

shown great inconsistencies in marking patterns among different teachers and

different schools. How does the minister plan to accommodate these variations in

a manner that will be fair to all students and consistent throughout the

Province?

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

MR. DECKER: Mr. Speaker, I would not go as far as to say

great inconsistencies, no doubt there are some inconsistencies. We would prefer

that there would not be a strike, that the students could write their exams and

that the process could work as it normally does. However, in the event that

there is a strike that nobody wants, in the event that there is a strike we have

to make some provisional plans. The plan that we have put forward will work, I

would think, probably in 98-99 per cent of the cases. There is provision already

under the public exams regulations that any student who feels that he/she did

not get the proper mark, there is an appeal process there. We will pay

particular attention to making sure that any student who says, look, on the day

of the mid-term was a bad day for me. I had a headache or something, I didn't

perform at my best or that they disagree with the evaluation. We will certainly

make sure that there is a process put in place. Remember now the intent is to

try to protect the graduating class from any action over which they have no

control.

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

Waterford - Kenmount.

MR. HODDER: Mr. Speaker, while the minister has received

confirmation of acceptance of his contingency plan from post-secondary

institutions in this Province, can the minister today confirm that his dialogue

with other Canadian post-secondary institutions have resulted in their

acceptance of these evaluation procedures as meeting their admission criteria?

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

MR. DECKER: No, Mr. Speaker, I can't confirm that and as

the hon. member points out, the best solution is no strike.

Now, the hon. member will know that in many cases

post-secondary institutions on the mainland admit students based on their

mid-term exam anyway, so that happens quite often. In our discussions with the

registrar's office at Memorial, they pointed out that once the Department of

Education makes a statement on the level of achievement of a particular student,

that is good enough for them. Now we're going on the assumption, Mr. Speaker,

that when Memorial University - which is probably one of the top institutions in

all of North America today - when Memorial University accepts a status report on

a student, in all likelihood most of the post-secondary institutions across the

country would accept that same authorization.

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

for Waterford - Kenmount.

MR. HODDER: Mr. Speaker, since the House opened this

afternoon I've received a copy of a memo from President Peter Sutherland to all

branch presidents of NLTA in which the association advises all teachers and

administrators to, and I quote, `do not supply marks for potential graduating

students. Do not work to accelerate teaching or complete work not normally done

this time of year.' I ask the minister, does he have a further contingency plan

to deal with the pending situations that many students in this Province expect

to face?

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

MR. DECKER: Mr. Speaker, for the benefit of hon. members

I should explain just what has happened to date. Number one, in the estimation

of the Department of Education there is a possibility that there might be a

strike. Nobody wants a strike. The parents do not want a strike, the students do

not want a strike, the President of Treasury Board does not want a strike,

nobody wants a strike, but in the event that there is a strike the department

had to make some contingency plans, so here is what we did. We sent a memo to

all superintendents in the Province and said to them, in the event of a job

action we would like for you to collect in your office all the midterm results

of the graduating classes, plus an evaluation of the year's work to date. Make

sure that is available for us. We have been talking to the superintendents.

Now, the Department of Education does not have any right

whatsoever to go to the principals, the teachers, or whatever. However when we

say to the superintendents that we want something done the logical thing would

be, and the superintendents did, send their requests to the various principals.

Now, a red herring comes in all this, a particular person in the Province

advises the principals of the schools not to comply with the order which came to

them through their superintendents. I cannot, for the life of me, Mr. Speaker,

think of any single principal in this Province, who in the interest of the

graduating student, would refuse to comply with that order.

I certainly would not want to be the principal to look in the

eye of a Grade 12 student who I have taught all year and say, son, I am not

going to do anything to help you to get into some post-secondary institution. I

would not want to be the principal to do that. I do not know of any teacher in

all the world, Mr. Speaker, who would be able to look a student square in the

eye and say: I am going to make sure, sonny, that you are not going to get into

an institution.

MR. SPEAKER: Question Period has expired.

Presenting Reports by

Standing and Special Committees

MR. SPEAKER: Order, please!

Under Presenting Reports by Standing and Special Committees,

I have an opinion of the Commissioner of Members' Interest dated May 5, 1994,

which pursuant to

section 44 of the House of Assembly act I hereby table.

The hon. the Minister of Mines and Energy.

DR. GIBBONS: Mr. Speaker, I Am pleased today to table the

1993 annual report of the Newfoundland and Labrador Hydro Corporation.

Notices of Motion

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

Provincial Affairs.

MR. REID: Mr. Speaker, I give notice that I will on

tomorrow ask leave to introduce the following bills, entitled:

"An Act To Amend The Municipalities Act". (Bill No. 17)

"An Act To Amend The Assessment Act". (Bill No. 18)

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

DR. GIBBONS: Mr. Speaker, I give notice that I will on

tomorrow ask leave to introduce a bill entitled, "An Act To Amend The Mineral

Act."

Petitions

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

MR. SULLIVAN: Thank you, Mr. Speaker. I rise to present a

petition on behalf of people in Central Newfoundland, the Gander - Botwood area.

AN HON. MEMBER: How many names?

MR. SULLIVAN: There are twenty-six names on this

petition. I fully support the petition that says: `The undersigned residents of

Newfoundland and Labrador wish to avail themselves of the right thus to present

a grievance common to the House of Assembly in the certain assurance that the

House will therefore provide a remedy.'

I will get to the wherefore: `Wherefore the undersigned, your

petitioners, humbly pray and call upon Parliament to demand the Government of

Newfoundland and Labrador not privatize and sell Newfoundland and Labrador

Hydro, to ensure that Newfoundland and Labrador Hydro remains a Crown

corporation.'

Mr. Speaker, I rise and support that. I think there are very

important reasons why it should be supported, very compelling reasons why, and

the reasons are of a financial nature. Because the financial returns to this

Province will be minimal and the cost to taxpayers and to ratepayers will be

enormous. That is a very simple, straightforward reason why we should report it.

Today we've heard in the House of Assembly on the credit

rating of our Province. While the outlook was independent of Hydro, this

government has been spreading the news that privatizing Hydro will improve the

Province's credit rating or keep it from being downgraded. Now, there is no

direct link at all to the credit rating. In fact, on April 20, a finance analyst

indicated that the rating outlook is negative for this Province. The reason why

it is negative, and maybe why it was downgraded slightly, is because, as our

leader indicated, the opportunities to promote economic development have failed,

or there has been no program to do it.

Another reason why is because the Federal Government are

going to eliminate $262 million of U.I. in this Province. There are less dollars

coming into the economy. Other reason why is that the new TAGS program is going

to dump, before the end of year two, 12,000 to 13,000 people from the program.

These are some of the reasons that are going to impact more upon the credit

rating of this Province than Newfoundland Hydro - they are the real reasons why.

Hundreds of millions of dollars are being pulled out of the

economy in this upcoming fiscal year. The $262 million federal U.I. program and

the tens of millions of dollars pulled out under this new TAGS program are going

to have a negative impact on the dollars coming into this Province and into the

economy. No one doubts at all for a moment that privatizing Newfoundland Hydro

will enhance the immediate fiscal position of this Province in terms of

immediate borrowing. No doubt about it, it will save us $25 million maybe during

the life of our debt - which may be forever - but it will save $25 million.

That hasn't been factored in the direct debt of this Province

and it has not been a factor by bond rating agencies, and they state, as late as

March, that it is not going to have an impact. Other bigger issues are having a

direct impact here on this Province. Once this short-term fix in selling Hydro

is over we are always going to have to deal with the problem of the fiscal

responsibility and proper economic development of this Province. We have seen a

management of fiscal decline in this Province. Anybody can come in and manage

with a decline in the spending of dollars; that doesn't take any great expert at

all - what it takes is a person who is able to stimulate the economy and promote

economic development, and that is important.

Now, there are a lot of untruths that have circulated about

Hydro, not the least, the Premier's statement. If this is not complete

fabrication - another word was used here for that, that we can't use. If a

person goes on public television and states, `If, in the end, the majority of

the people of the Province are opposed to Hydro, I will not ask the members of

the Legislature to proceed with the legislation for privatizing Hydro,' and his

quote: `because I do not think any government, no matter how strongly it feels

about an issue, should use its majority in the Legislature to cause something to

be done that is contrary to the wishes of the people of this Province, and I

will not ask the members of the Legislature to do that.' Now, that is what he

stated on March 24th.

He stated in the House, too, in the past, that he is going to

proceed, so he has made contradictions.

AN HON. MEMBER: It is misleading.

MR. SULLIVAN: It is misleading the people, no doubt about

it. He is misleading the people of this Province.

MR. SPEAKER: The hon. member's time has elapsed.

SOME HON. MEMBERS: By leave?

SOME HON. MEMBERS: No leave.

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

MR. WOODFORD: Mr. Speaker, I would like to support the

petition presented by my colleague, the Member for Ferryland, and to say at the

outset that it again shows another example of people who are against the

privatization of Newfoundland and Labrador Hydro. The issue seems to have

somewhat quietened down over the last two or three weeks, and even with it

quietened down, and with the announcements by Moody's, Standard and Poor's, and

all the rest of the credit rating agencies with regard to lowering the credit

rating of the Province, and the actual fact of that happening today, even now,

Mr. Speaker, people are saying, don't do it. They realize they have an asset

there that is theirs and there seems to be no amount of advertisements -

advertising, or propaganda from government that will change their minds.

Now, Mr. Speaker, the minister just tabled the report of

Newfoundland and Labrador Hydro for 1993. I just opened it up, and there is very

little reference made to the privatization of Newfoundland Hydro. However, there

is one reference made to it, that possibly sometime this year there will be -

`Studies relating to the possible privatization of Hydro are presently taking

place and a decision is expected in the near future. I don't have time in the

few minutes I have to read out anything else without getting into some of the

headings.

I notice, Mr. Speaker, under `Financial Statistics', a change

somewhat in current liabilities, current assets, and if you look through it

rather quickly - I haven't had time to get the pen out yet to do some

calculations with regard to equity, but it looks to me, in glancing at it, that

the equity position of Newfoundland and Labrador Hydro has gone up.

AN HON. MEMBER: The retained earnings.

MR. WOODFORD: The retained earnings of Newfoundland and

Labrador Hydro have gone up.

Without going into statistics, or without going into any

figures, we look at the debt to equity ratio. I think it was 83.17 last year,

82.18 this year, and if you look at some of the stats under Financial

Statistics, it shows that Newfoundland and Labrador Hydro is by no means a very

poor company, and it is certainly not a burden on the Administration opposite.

The funny thing about this, Mr. Speaker, when you talk about

the credit rating agencies and so on - why didn't they make some of the

assumptions in the last five years when it came to Hydro? All of a sudden now,

they're talking about what would happen to the credit rating if you privatized

Newfoundland and Labrador Hydro. Where were they the last five or six years? Did

I hear any of the credit rating agencies recommending that Newfoundland Hydro be

sold so that it would improve the credit rating of the Province? Are they making

a statement of what will happen next year after the $300 million is spent? What

will happen then with a company with assets of something like - fixed assets,

that's the one, gone up this year $20 million bucks - $2,545,000,000 from

$2,525,008,000 last year - $20 million, the fixed assets of that company have

gone up. The current assets have gone down a bit but there's an explanation for

that. If you look at the current liabilities of this year, gone up to 183 from

169 last year, and looked at fixed assets, that's where it's covered off.

Now, if you go into the equity part of it - members opposite

and I'm sure members on this side will be given lots of time to go through this

report. Without even looking at that report, Mr. Speaker, without even looking

at the report for last year the pros and cons of privatizing this utility - the

long-term debt is down, it's down quite substantially, but yet the debt-equity

ratio is a better position. It all looks good but yet -

MR. SPEAKER: Order, please!

The hon. member's time has elapsed.

MR. WOODFORD: Thank you, Mr. Speaker.

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

Extern.

MR. J. BYRNE: Thank you, Mr. Speaker.

Today I am pleased to rise in this hon. House to present a

petition on behalf of twenty-three individuals living in and around Corner Brook

dealing with the privatization of Newfoundland and Labrador Hydro. The petition

reads:

`To the Newfoundland House of Assembly, we, the undersigned

residents of Newfoundland and Labrador, who wish to avail themselves of the

right thus to present a grievance, come to the House of Assembly in certain

assurance that the House will therefore provide a remedy, we submit - ' then it

goes on:

`WHEREFORE the undersigned, your petitioners, humbly pray and

call upon Parliament to demand the Government of Newfoundland and Labrador not

to privatize and sell Newfoundland and Labrador Hydro and ensure that

Newfoundland and Labrador Hydro remains a Crown corporation, and in duty bound

your petitioners will ever pray.' Mr. Speaker, I support this petition and I

have signed it.

Mr. Speaker, over the past number of weeks and months we've

heard a lot of debate on the privatization of Newfoundland and Labrador Hydro

and a lot of repetition on this issue but we haven't heard a lot about a cost

benefit analysis being done or that one should be done. I really don't know if

the Province have done one or not but if they haven't they certainly should do

one and make the information public to the residents of Newfoundland and

Labrador.

Among the things that we possibly should look at, of course,

is the electricity rate increase. The government tells us there will be an

electricity rate increase of approximately $25 million a year. Now, Mr. Speaker,

will it be $25 million, will it be $15 million, will it be $50 million? We don't

know. We haven't been told and we haven't been given the facts and figures to

know which is which or what would actually happen in the future if Newfoundland

and Labrador Hydro were privatized. Another factor, would government save $25

million a year, Mr. Speaker? Now, the government have been preaching the past

six months or more that the sale of Newfoundland and Labrador Hydro will save

$25 million a year to the government but, on the other side of that, Mr.

Speaker, we would lose maybe in the billions of dollars over ten years. The

government thought it was saving $250 million in ten years - we would lose

possibly $1 billion in ten years. It doesn't seem to balance out very well in my

mind, Mr. Speaker.

Some of the costs involved in selling Newfoundland and

Labrador Hydro - that's the factor we should look at. Already we know that if

Newfoundland and Labrador Hydro is sold we would look at - well, the investors

or the investing companies, of course, would make approximately $30 million if

the government did get $300 million on the deal. So $30 million - that's one

cost right off the bat.

We have the legal fees; we now know that the legal fees have

reached approximately $800,000 and this is just for opinion and looking at the

situation if we should or should not sell Newfoundland and Labrador Hydro. So if

we actually made the decision and it was passed in this House to sell

Newfoundland and Labrador Hydro, how much money would be made by the legal

companies in the Province and outside the Province? These are things that have

to be looked at - accounting firms, already up in the tens of thousands of

dollars. These are major factors that need to be considered and the people need

to be informed.

Speaking of informing the public, I think we should have

public hearings. A lot has been said about public hearings, so that people could

have their say, but this government consistently refuses to have public hearings

to inform the people of the pros and cons of privatizing Newfoundland and

Labrador Hydro.

Mr. Speaker, there has been some talk, too, by the government

and the Premier that if we privatize Newfoundland and Labrador Hydro it would

strengthen our economy. It hasn't been proven to me, or to many Newfoundlanders,

and most Newfoundlanders, that the economy will be strengthened by the sale of

Newfoundland and Labrador Hydro, or the privatization of Newfoundland and

Labrador Hydro.

That is something else that we need to look at very seriously

before any decisions are made. But the pity of it all is, it seems to me that

government members opposite don't consider these facts and are not seriously

looking at the negative aspects of the privatization of Newfoundland and

Labrador Hydro. They seem to be blinded by the Premier's speech on this issue,

and they could very well be led down the garden path, they could be sorry for

supporting this privatization in due course.

Mr. Speaker, will the local investors benefit - the people

who have the money in this Province - if they invest in Newfoundland and

Labrador Hydro? Mr. Speaker, there are very, very few people who do have the

money to invest in a privatized Newfoundland and Labrador Hydro, and I compare

that to the investment in Newfoundland Power. How many people in this Province

have the money and the cash up front to invest in Newfoundland Power? very few

people, I am afraid. Those people who can afford it, it would be, of course, at

the expense of the ratepayers and the taxpayers of this Province. The people who

would be fortunate enough, or do have -

MR. SPEAKER: Order, please!

The hon. member's time has elapsed.

MR. J. BYRNE: Already, Mr. Speaker? Thank you.

MR. SPEAKER: (Inaudible) petition?

AN HON. MEMBER: Supporting the petition.

MR. SPEAKER: We have had three speakers in support of the

petition. Does the hon. -

AN HON. MEMBER: The hon. member just presented a

petition, Your Honour.

MR. SPEAKER: I must have lost track here somewhere.

The hon. the Member for Waterford - Kenmount.

MR. HODDER: Mr. Speaker, I would like to rise and support

the petition presented by my colleague, the Member for St. John's East Extern,

and to say to the House that the people of Newfoundland and Labrador, over the

last six to eight weeks, have consistently asked hon. members to represent their

viewpoints in the Legislature by presenting petitions in which they pray that

the Government of Newfoundland and Labrador will not proceed with the

privatization of Newfoundland and Labrador Hydro.

The people of Newfoundland and Labrador do not wish to pay

higher electricity rates and higher taxes simply so that others who are much,

more wealthy than they are would be able to make much more money on their

investments. Regrettably, the great majority of those wealthy investors are

out-of-Province.

The people of Newfoundland and Labrador have heard the

government's propaganda. The Premier, acknowledging in late March that his

public relations efforts were not going very well, decided that he would spend a

great deal of taxpayers' money trying to convince the people of Newfoundland and

Labrador that they should sell something they already own. So he embarked upon

the expenditure of $150,000 directly in a propaganda campaign, and the Minister

of Mines and Energy acknowledged that the Province had spent $1.5 million

already on the privatization of Newfoundland and Labrador Hydro.

Mr. Speaker, the Premier, in an address to the Province on

March 24, said, and I quote: `If the majority of the people of the Province end

up being opposed to Hydro, I would not ask the members of the Legislature to

proceed with legislation privatizing Newfoundland Hydro, because I don't think

any government, no matter how strongly it feels on an issue, should use its

majority in the Legislature to cause something to be done that is contrary to

the wishes of the people of this Province, and I won't ask the members of the

Legislature to do that.'

Mr. Speaker, the people of Newfoundland and Labrador have

shown the Province that they are irreversibly opposed to the privatization. They

believe that this concept is not good for them, it is not good for their

children, and it is not good for future generations.

Mr. Speaker, we say to the Premier, today, and to his

government, it is about time you listened to the voices of the people as

represented here by the many dozens of petitions signed by thousands of

residents of Newfoundland and Labrador, and do the right thing, that is,

withdraw the legislation and let's get on with other business that the people of

Newfoundland and Labrador deem to be appropriate and needed in the Province at

this time.

Thank you very much, Mr. Speaker.

MR. SPEAKER: The hon. the Member for -

Is anybody speaking in support of a petition, or a new

petition?

MR. W. MATTHEWS: (Inaudible) support a petition.

(Inaudible) supported it yesterday. (Inaudible) a new petition.

MR. SPEAKER: Yes, I just want to determine. I would let

someone speak in support of a petition but if there were no third person then I

would -

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

MR. HARRIS: Thank you, Mr. Speaker.

I do want to support the petition and I think it is important

for members to support the petitions that relate to the Newfoundland and

Labrador Hydro issue. Because we've got to the point now where it is not very

clear what the Premier's intention is.

I was there in the TV studio when the Premier told the people

of this Province that before a decision was made on Hydro privatization an

attempt would be made to find out the wishes of the people of the Province. What

we heard in the House a couple of days ago from the Premier was that he has

decided to proceed with the privatization plans and that he is going to continue

to do that.

Now, Mr. Speaker, we had a `Clyde Lied' campaign in this

Province a couple of years ago when certain groups in our society wanted to

bring attention to the position taken by the government and the Premier on

collective bargaining. If the Premier and the government propose to go ahead

with the privatization of Newfoundland and Labrador Hydro after what the Premier

said on Province-wide live TV in March, there will be a bigger `Clyde Lied'

campaign. It won't be one that is seen as symbolic but it will be one based on

what everybody in this Province who was watching TV that night saw and heard the

Premier say, and it will be in the face of the scientific, publicly disclosed

opinion results showing that in excess of 79 per cent of the people who had an

opinion on this matter opposed the privatization of Hydro.

Mr. Speaker, there has been nothing to demonstrate that that

level of public opinion has changed one bit. In fact, in my own constituency, I

provided a survey questionnaire, an opportunity to respond on the issue of

Hydro, to all of my constituents. The Member for Terra Nova was not living in my

constituency at the time and I welcome her to receive a copy. I will make sure

she gets one. I'm sure I will hear her reply. She can send it in anonymously if

she wishes. Because I know over on that side of the House one has to be careful

what one says in public. I do know what some of the members over there are

saying in private. Maybe they are some of the ones who are phoning Steve Neary.

The Member for Terra Nova - I will provide her with a copy of

the questionnaire and she can send it in anonymously if she wishes. She may well

be with the vast majority. In the case of St. John's East constituents who've

sent back this questionnaire, in excess of 85 per cent are opposed to the

privatization of Hydro, so if she is one of those, she will be in good company.

Because that is the state of decision making and opinion making in this Province

on this issue.

The people have heard both sides. They've heard the arguments

of the Premier and they've heard the arguments of those opposed. They've had an

opportunity to consider the pros and cons and they are opposed. Mr. Speaker, the

government really has only one option and that is to abide by the wishes of the

people and to indicate to this House that they are prepared to withdraw this

bill and end the uncertainty about this public resource which the people of

Newfoundland want to keep for themselves.

Thank you, Mr. Speaker.

MR. SPEAKER (Snow): The hon. the Member for Menihek.

MR. A. SNOW: Thank you very much, Mr. Speaker. I rise to

present a petition on behalf of residents of Western Labrador who have signed a

petition, some twenty-seven signatures on it on two sheets of paper.

The prayer of the petition is: WHEREFORE your petitioners

urge the Government of Newfoundland and Labrador to stop immediately the

privatization of Newfoundland Hydro.

Mr. Speaker, the residents of Western Labrador who have

signed these papers are very concerned about the privatization of Hydro because

of the negative impact it is going to have upon them. They feel that it is going

to have a very negative impact. As I have said many times before they know that

- they've heard the Premier before saying how for sure it is going to be a 30

per cent, 40 per cent increase, and it could - without privatization, the

Premier has stated this. They even had Cabinet ministers suggesting that it

should go to as high as 500 per cent. They know it is going to have a negative

impact on them and they - because they consume, they are the highest per capita

consumers of electrical energy in this Province. They are very concerned about

it.

To continue on with my hon. friend there for St. John's East

who talked about how the people of this Province, including the people in my

district, are very concerned - the Premier's commitment in a televised address

was that if he didn't have the support of the people of the Province with this

particular piece of legislation then he would withdraw it. He felt he would be

compelled to withdraw it.

Now they find that the Premier is hedging. He is suggesting

that no, he is not going to withdraw it, he is going to continue on with this.

This is creating a tremendous amount of discussion out and about the streets of

this Province. Not just of course in my district, but everywhere in this

Province. Because the people are becoming very mistrustful of the Premier and

what he says. You have to read the fine print when you are listening to Clyde.

That is what they are saying out in the streets.

Because they say there have been provincial campaigns before

this about - the `Clyde Lied' campaign, and I'm sure that if the Premier of this

Province continues hell-bent for leather to sell this Crown corporation that a

similar type of campaign is going to be launched again, and rightly so. Because

he did say that he would withdraw the legislation. On provincial t.v. he said: I

would withdraw it if I didn't have the support of the people in this Province

for the legislation, for the privatization. Now we find that he is saying he is

not going to withdraw it, he is going to go ahead with it. Because we know that

the public support is not there for the privatization of Newfoundland Hydro.

Polls have indicated, people out on the streets know it. Polls done by Decima,

polls done by other professional research organizations. We know and the people

of this Province know.

Maybe, as somebody suggested to me yesterday, the Premier

seems to be very - that he is not spending much time in the House any more. He

doesn't spend much time here any more. He is off to Calgary or off to Toronto,

off to Ottawa, he is off to Halifax. He is always off to China or off to

somewhere other than off to addressing the problems of this Province. It is

becoming quite evident that we are not a poor province. We are a poorly governed

and a poorly managed province. That is what we are. Part of the reason of that

being a poorly managed and a poorly governed province is the fact that the

Premier isn't here.

Even when he is here we've noticed - I didn't really notice

it, because I guess I've become accustomed to it. Somebody pointed out to me

last night that the Premier has become very testy. That he looks irritated all

the time. That he can't be bothered with these silly questions and he roars at

people and he has something on his mind, they say. There is something wrong.

There is something occurring over there. I don't know what it is. Then, of

course, you see, down on one end of the bench, a fellow who smiles from ear to

ear. He stands up and gives just about a campaign speech. He just about has the

buttons out already. You can almost see them being printed and distributed. Then

you move down the bench a little bit further and you see people getting their

hair styled, new suits, and all those things. You never know what they are

looking at now days, Mr. Speaker.

MR. SPEAKER: Order, please!

The hon. the member's time is up.

The hon. the Member for Mount Pearl.

MR. WINDSOR: Thank you, Mr. Speaker.

I want to respond and to support the petition so ably

presented by my friend and colleague from the great District of Menihek.

The Minister of Mines and Energy, just a few moments ago,

tabled the annual report of Newfoundland and Labrador Hydro for the year 1993.

Mr. Speaker, one simply has to look at some of the highlights of this report and

see that what we are talking about here is a tremendously healthy corporation, a

Crown corporation, one of the few bright spots in the financial statements of

the Province this year. Why is this government, then, proposing to cut off their

right arm just after winning an arm wrestling contest? That is what it amounts

to. This report shows an extremely healthy corporation that is giving a real

return to the Province. Simply look at some of the numbers.

First of all, CF(L)Co. Our investment in CF(L)Co gives us a

net return of $11.2 million this year, to Newfoundland and Labrador Hydro. Hydro

itself, on its own operations of generating and distributing electricity, made a

profit of $13.7 million. That is after paying some $10 million in debt guarantee

fees to the Province, and after transferring Philip Place, which was a corporate

office structure owned by Newfoundland and Labrador Hydro, that was transferred

back to the Province for a nominal sum of $1.00.

Not a bad Crown corporation to have, Mr. Speaker. I wish they

all were as profitable, and all contributed as well to the financial coffers of

this Province, as should Newfoundland and Labrador Hydro. I wish Farm Products

did and we would not want to sell that. I wish Computer Services did. I wish

Marystown Shipyard did, and a dozen other Crown corporations that are receiving

millions of dollars in subsidies every year from the taxpayers of the Province,

but Newfoundland and Labrador Hydro is not, Mr. Speaker.

It also says here that the debt equity ratio has improved to

82.18 from 83.17, a remarkable increase in one year, so our debt ratio has

decreased over the past twelve months, showing that not only are we profitable

this year but we are showing real growth. Now, if you look over a bit further in

the numbers, Mr. Speaker, you will see that the net fixed assets of Newfoundland

and Labrador Hydro, I do not know if it is the book value, is $2,067,000,000.

That is the value of Newfoundland and Labrador Hydro, yet government is talking

about selling it so we can eliminate just a little over $1 billion in debt.

Now, Standard and Poor's did not stand up today and say, we

are downgrading the credit rating of the Province because government might not

sell Hydro, because they might not sell something that is worth $2 billion to

eliminate $1 billion in debt. Now, how does eliminating $1 billion in debt

improve the credit rating of the Province? The answer is, it does not, Mr.

Speaker. In fact it probably will weaken the credibility of the Province if you

sell Newfoundland and Labrador Hydro.

SOME HON. MEMBERS: Hear, hear!

MR. WINDSOR: Now, here is another telling number, Mr.

Speaker, shareholder's equity. Of course, who is the shareholder? The Government

of Newfoundland and Labrador, 100 per cent. The taxpayers, the people of the

Province own Newfoundland and Labrador Hydro, and our equity has increased this

year from $544.9 million to $569.8 million. In other words $25 million and it

happens to be the same amount the Premier says we will save on interest if we

sell Hydro, so we are going to give away $25 million in growth on our equity to

save $25 million on interest. What a wonderful piece of business that is, Mr.

Speaker. What a wonderful piece of business.

And he is going to spend that interest, or the savings, what

he doesn't have to borrow, in one year, or a year-and-a-half. Wonderful! What

are you going to do the next year? What are you going to do then, when you are

not getting your $10 million guarantee fee? When your equity is not increasing

by $25 million? When you are paying out $40 million, $50 million, $60 million or

$70 million in subsidies and tax breaks to the new Hydro corporation? And when

taxpayers of the Province, rate payers of the Province, who are now the

shareholders in this company, are paying out $30 million or $40 million or $50

million more in hydroelectricity rates? What is the logic in that?

The message on whether or not we should sell Hydro, and why

the people of this Province have almost unanimously, overwhelmingly, said,

`Don't sell it', is because it doesn't make any sense, and this proves it.

As I came into the House today, I looked out through the

window and there was a CBC van parked outside the door. On it, it says, `Weather

with Wells'. I am going out and repaint it, `Wither with Wells'.

SOME HON. MEMBERS: Hear, hear!

Orders of the Day

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

MR. ROBERTS: Mr. Speaker, would you be good enough,

please, to call Order No. 6, which is Bill No. 8.

MR. SPEAKER: Order No. 6, Bill No. 8.

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

Automobile Insurance Act". (Bill No. 8)

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

MR. ROBERTS: Mr. Speaker, I shall be very, very brief

indeed.

Essentially, this is the same bill as the one that was given

second reading by the House in the First Session of this General Assembly. That

is the session that ended just before the present session opened. The only

changes between the bill that is now before the House for second reading, and

the bill that was read a second time earlier, the only changes are those that

were recommended by the Standing Committee on Government Services, if memory

serves me correctly, but anyway, the Standing Committee that addressed the bill.

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: I am sorry - social services. I thank my

friend from Humber East.

They held hearings on the bill, made a number of

recommendations which the Cabinet accepted and which have been incorporated into

the bill now before the House. The bill went to the Standing Committee pursuant

to the provisions of Standing Order 54.2, a new one which we adopted last year.

Mr. Speaker, the House leaders have agreed that we will put

this bill through second reading and committee, and I would hope third reading

stages, this afternoon, with the Late Show coming on at 4:30 p.m.

Now I understand my friend from St. John's East had a

terrific struggle with his caucus to get them to agree to do that, but

eventually I gather he did carry the day.

There is an urgency to the bill in this sense, and I think I

heard my friend from Grand Falls ask why we were trying to get the bill dealt

with. Well, there is a reason. The bill is expressed to come into effect on July

1, 1994, which is a little less than two months from now. If it is to come into

effect, there must be some arrangements made. There is a need for a degree of

certainty, so that is why we ask the House to deal with it on this basis. If the

House accepts it, as we, the government, hope will be the case, then we will

carry on and have it implemented in good time, and that is straightforward.

Mr. Speaker, I spoke of the bill in some detail on the

previous second reading debate, and I will not repeat what I said there. The

issue the bill addresses is the question of compensating a person who is injured

by an uninsured driver, by a person who does not have the motor vehicle

liability insurance that one is obliged by law to have in this Province.

Although the law obliges one to have it, the fact remains there are people who

drive without insurance, and therefore have no capacity to respond to a claim

against them in damages. These people inevitably, of course, are the ones who

have no means of their own that one could go to, so the injured person, then,

has no recourse for compensation.

For several years, maybe forty, we have done that in this

Province by means of Judgement Recovery Limited. All concerned, the regulatory

authorities who report to the House through me, the policy people who advise me,

the insurance industry itself, all are of one mind, as are the committee of the

House which heard the matter, that the present bill is a significant step

forward.

Essentially, what it will do is replace the judgement

recovery system with a system whereby one looks to ones own insurer. If I am run

down by the hon. lady from Humber East, assuming there's no intent sufficient to

land her in the criminal courts, assuming it's simply a matter of negligence and

that would be a matter she will acknowledge to be addressed at that time -

MR. WINDSOR: (Inaudible) hypothetical.

MR. ROBERTS: I would say to my hon. friend from Mount

Pearl, that what is hypothetical is the hon. lady running me down. What is not

hypothetical is my colleagues back here running me down when we have some of

these late nights -

MR. WINDSOR: I stand corrected.

MR. ROBERTS: But, if I am run down by my hon. friend from

Humber East or sat upon by my hon. friend from Mount Pearl, either which would

do roughly the same damage I predict, then I would look to my own insurance.

MR. WINDSOR: I think you should look in a mirror, I'd

say.

MR. ROBERTS: The hon. gentleman's insurance company would

compensate me, no doubt handsomely for what he had done. So that's all the bill

does. Provision has been made for the case of a person who is uninsured,

himself/herself. There one looks to the facility association which essentially

is an insurance company run by insurance companies for the betterment of these

people and most of the bill in fact, is addressed to the situation proposed by

the person who must look to the facility association.

One of my hon. friends opposite, the gentleman for Waterford

- Kenmount, has just asked me a question with reference to a precise portion of

the bill. I will have the answer - I don't have the answer now but I would ask

the law clerk to get the information. I will have the answer either when I speak

to conclude second reading or during committee. I am sure there is an answer. If

it's acceptable fine, if not then we'll have to address that at the time.

With that said, Mr. Speaker, I shall sit down and hear what

members have to say. I understand several want to speak on it and in the hope of

getting this through in accordance with the agreement; I'll refrain from any

further comments until I've heard what members opposite wish to say. I move

second reading of the bill, Sir.

MR. SPEAKER: The hon. the Member for Bonavista South.

MR. FITZGERALD: Thank you, Mr. Speaker.

I rise very briefly today, in fact, to speak on Bill No. 8,

an Act to Amend the Automobile Insurance Act and I commend the government and

the member for bringing this bill forward. It certainly does a lot to adjust all

the cares and concerns that were there in automobile insurance in the past. I'm

not so sure that the bill goes far enough, Mr. Speaker, but it's certainly a

beginning.

I have a great problem with the minimal limit on

Section (

a) of an automobile policy. Public liability right now here in this Province, the

minimal amount of automobile insurance is $200,000. I believe and I stand to be

corrected but I think the facility company which has been put together by the

different insurance companies, which right now they use to put business that is

of high risk, that they all use this same company and the rates are no different

no matter who uses them. It's a holding place for all high risk businesses. I

think the minimal limits of facility is also $200,000. I would suggest that we

should seriously look at making at least $500,000 as the minimum public

liability that we should be purchasing here in this Province. $200,000 sometimes

doesn't go a long way when you're looking at dismemberment, Mr. Speaker, and

sometimes if a lot more than one person is involved in a single accident.

At one time, Mr. Speaker,

Section (

b) of an automobile

insurance I think was mandatory here. It would cost us six and two, it would

cost eight dollars and at that particular time the coverage that you would get

would be a thirty-five dollar weekly benefit, $2,000 for medical payments and

$5,000 for death, dismemberment or total disability. Right now in

Section (b),

Mr. Speaker, it is not compulsory as far as the statutes of the legislation,

even though it costs approximately forty dollars the coverage is much, much

greater. I think right now you'll get something like $140 as a weekly benefit,

$10,000 for health costs and $25,000 for death, dismemberment or total

disability. Some companies - if it wasn't compulsory - and I add that some

companies made it compulsory in order to access their business or in order to be

covered by a particular insurance company it was compulsory to have

section B.

In

section C of our automobile insurance policies, Mr.

Speaker, we usually see C1, 2, 3 and 4. C1 is usually an all-perils coverage

where somebody is purchasing public liability, which is compulsory anyway, but

would also purchased collision and upset and comprehensive, as well as fire,

glass and theft. The rates in those particular areas vary from company to

company, the type of vehicle you drive, your driving experience, et cetera.

One other SEF - standard endorsement form coverage - is SEF

44 which is family protection coverage. This today ensures a person -

MR. ROBERTS: SEF 44 is the underinsured motor coverage.

MR. FITZGERALD: Is the underinsured motor coverage and it

gives the protection to the person who is buying it, Mr. Speaker, to be covered

up to the value of their insurance rates should they be involved in an accident

with somebody who is underinsured or not insured. That is an option that is

available. I personally don't see why anybody should be allowed to drive in this

Province today without insurance. This has always been a thorn in my side and I

raised it here with the gentleman, Mr. Hussey, who represented Motor

Registration at the government Estimates Committee of Works, Services of

Transportation. He didn't have any great problem with some of the things that

were suggested to him at the time and didn't see any great problem of why it

wouldn't work.

Today if you go to apply for auto insurance, living in the

computer age that we are, it takes very few, brief minutes to get a driver's

abstract. It will tell you the whole record of the driver once his driver's

licence number is put forward. A complete print out of all his speeding tickets,

driving infractions, parking tickets, the whole thing. I don't see why we can't

use that in maintaining a record of people who cancelled their insurance policy.

Today many people come in, purchase driver's automobile insurance. When the

first payment is due they finance it over an eight month period, or whatever the

case might be, or provide a down payment to the sub-agent. When the next payment

is due sometimes you never ever see it. The person them is provided with a

policy number, take it to Motor Registration, get his driver's licence and his

auto licence. The only people who will suffer because of that will be the

innocent third party who is sometimes involved in an auto accident or some other

infraction that costs money, and when they go to collect they find it virtually

impossible.

I welcome the change. I'm not so sure how many people out

there in the general public were aware of the judgment and recovery process that

was available to them. I think it was, but I don't know how many people ever

used it, Mr. Speaker. Maybe the minister can expand on that when he gets up to

speak. From what I understand it was always there.

MR. ROBERTS: It has been there for forty years.

MR. FITZGERALD: Yes, it has been there for quite some

time. That is something I would like to see the minister take and bring forward.

I fail to see today why somebody should be allowed to drive without auto

insurance, or once they go through the process of cancelling it or allowing it

to lapse why Motor Registration can't be notified immediately and have the

plates taken off the car, if that is what it means. There should be no reason

whatsoever why people today - some people go out and pay very high premiums, Mr.

Speaker, to be responsible, to have insurance, to protect themselves and their

families. I don't see why they should have to go out today and realize the

hardship of paying insurance premiums while other people are allowed to go out

and drive in a lackadaisical way.

Speaking of insurance, before I sit down, I would just like

to add, the unfair premiums charged to male drivers in this Province. I think it

is right across Canada. This was always a pet peeve of mine as well. Where the

male - if you have a son and you go and you put coverage on your vehicle for

them, you will find that it costs you a tremendous amount of money. If you have

a daughter - and I've been fortunate enough to have two, so I'm not complaining

about that - you will find that you will go from - sometimes your rating won't

even change. You will go from an O1, if you don't drive your vehicle to or from

work, up to a maximum of an O3.

Your driving experience will come into a little bit, but

sometimes many of those young gentlemen don't have a chance to prove themselves

as drivers. They automatically fall into a category because they are male, and

they automatically fall into a category where the father's or mother's insurance

premiums are pretty well doubled just for allowing them the privilege of driving

the family car.

Those are some of the things that I think we should seriously

look at. I welcome the changes to Bill No. 8, and I say to the minister that I

think everybody on this side of the House applauds this piece of legislation,

and I am sure we will be there to support it at the end.

Thank you.

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

MR. WOODFORD: Thank you, Mr. Speaker.

I would just like to take this opportunity to make a few

comments on this particular piece of legislation. I agree with and echo the

comments made by my colleague. I, too, don't see anything wrong with this

particular piece of legislation, except for the fact - and I stress that, except

for the fact - that it doesn't go far enough. Then again, I talked to the

Minister of Justice one time before on this, and some of the concerns that I had

in other areas are covered under the Highway Traffic Act and would have to be

done through certain different pieces of legislation and so on.

Some of the comments made by my colleague, and the minister

who presented the bill, the Minister of Justice, their points are well taken.

This judgement recovery that the minister said has been there for the last forty

years has worked, I suppose, to a certain extent, but it has become very, very -

MR. ROBERTS: It is very cumbersome.

MR. WOODFORD: Yes, very cumbersome.

The few cases that I had with constituents, some of them now

are into the third year with absolutely nothing - no word back. It is something

like the Workers' Compensation Commission. You go from their doctor to the

client's doctor, back to the workers' compensation doctor.

AN HON. MEMBER: (Inaudible).

MR. WOODFORD: Yes, exactly, and come from their lawyer,

in this case, back to the lawyer responsible for judgement recovery.

Once the decision does come down, it is not always in favour,

and it is minimal. Considering some of the damages, and some of the injuries

caused in those cases, when they go to judgement recovery for it, what they get

back is minimal - nothing only enough to cover the phone bill.

In this particular piece of legislation, that is one good

thing about this, and I don't think it was in the judgement recovery part, but

the minister can clarify this when he gets up later on. Page 8,

section 7: A

payment made by the new facility association under subsection (6) shall not bar

the person to whom it is made from making a claim against the person's insurer

for damages in excess of the amount of the payment made by the facility

association.

If that is the case, even though the facility association may

rule in favour of a certain injured person, the option is still open here for

the individual to claim against the person's insurer for damages over and above

what damages were given by the facility association. So that particular clause,

in this particular piece of legislation, is a good one, as far as I am

concerned, because it certainly doesn't close the door after the injured person

has gone through the facility association for damages.

AN HON. MEMBER: (Inaudible).

MR. WOODFORD:

Section 7, page 8. I wanted you to clarify

that for me, because what I read there is that -

AN HON. MEMBER: (Inaudible).

MR. WOODFORD: Second last paragraph. You can clarify that

later on, but it looks to me like we will have that option.

One of the other concerns that I have with this, and I

suppose it can't be helped if the facility association, especially with the

insurance companies, go together on it, and that is the price increase. I don't

know if the minister has had any - I am sure he had consultation with someone

from the industry, but have they given any indication of what kind of price

increases would be incurred, or would be necessary, to bring this particular

facility association on stream?

It would seem to me, and it would be obvious, I suppose, that

there is going to have to be a price increase in insurance in general. Now that,

to me, then, is unfair also, because really we are dealing with people who go

out and buy liability insurance, enough to get their vehicle licensed, and ten,

twenty or thirty days after, cancel it. The whole general insurance industry

would have to pay the bill for those particular so-called, I suppose, crooks to

a certain extent, lawbreakers, or whatever. Somewhere along the way we have to

bring in a system. If I go down to get my license I cannot get it if I have an

old fine, a speeding ticket, or anything like that, that shows up on the screen.

If I do not have insurance I cannot get my license. Why cannot there be a

mechanism whereby insurance companies in this Province and the Motor

Registration Division, with all the new information highways we have, and talk

about in this country today, as soon as a person cancels his or her liability,

in this case liability because it is mandatory, cannot they not notify the Motor

Registration Division and have them cancel their license? There should be

something, somewhere, somehow, soon, that has to be done.

Usually, at the press of a button we can bring up something

from New Brunswick, or bring up something from some other part of the world on a

computer screen, so there should be some mechanism in place, with the onus put

on the insurance companies, because the rates they are charging today as far as

I am concerned are unconscionable. As far as I am concerned they have a monopoly

on insurance in this Province but we have to have it. There are different names,

there is Johnson, there is Prudential, there is every kind of an insurance

company in the world, but we have to have it. We cannot get a mortgage without

insurance. We cannot drive a car without liability. We cannot do anything

without it.

To a certain extent we have to put an onus on there because I

am driving on the road with full coverage, the ordinary, honest citizen is

driving with full coverage, and then you have a crowd of people out there who do

not give a darn for nothing or no one. They get on the road, they drive

recklessly, they drive without concern for other people, and those other people

we have to protect. I think that can be done in conjunction with the insurance

companies and the Motor Registration Division.

If the Motor Registration Division can take enough interest

in me to check with my insurance company to see if I have coverage before they

issue my license then surely God they should have enough interest after to make

sure that I keep it. I think somewhere along the line we have to make

accommodation for that.

I do not like to be repetitive, and it is not in this

particular piece of legislation, but again, I am a firm believer that a $200,000

liability coverage in this Province, or any province in Canada today, is

ludicrous, it is crazy. You see small private businesses today that carry $1

million worth of liability, and $2 million worth of liability just on the

premises, then you are allowed to take a vehicle which is, as far as I am

concerned, equal to a weapon, you put someone behind the wheel of it, and they

are allowed on the road for $200,000 coverage, especially with the medical

expenses and so on in this country today, I think is ludicrous.

I thought that other provinces had higher coverage, but they

haven't. We are among the highest in Canada. In fact Quebec only has $50,000.

All the rest have the same as us, except for Quebec which has $50,000.

AN HON. MEMBER: The American states have only $35,000.

MR. WOODFORD: That is right, and not all of them have

that. That is the minimum in the States. They do not have it real high at all.

The other one that should not be optional for anybody who

drives a vehicle today, as far as I am concerned, is medical insurance. They do

not tell you about it until after the fact, some insurance companies may mention

it to you when you are getting your license, but other than that they do not

mention a thing. Medical bills today, as far as I am concerned, are just out of

whack and people who all of a sudden find themselves in an accident with a

disability have no UI, no recourse, absolutely no income, and they lose

everything.

Mr. Speaker, one other note I would like to make is that

accidental benefits coverage is compulsory except in Newfoundland. I did not

realize that. We are the only province in Canada which does not have accidental

coverage, compulsory. I think that is for another time, but it is an opportunity

to make the point in any case. If we had accidental coverage compulsory in the

Province it would cut down on a lot of the other things. The insurance companies

I think should make that quite clear when an individual goes to get the

insurance.

Mr. Speaker, 54 per cent of all the insurance sold in Canada

is automobile insurance. Liability comes in third. Auto insurance is $7.5

billion but yet liability insurance comes in third at $1.2 billion. The total of

the insurance coverage in - 54 per cent is just automobile insurance.

AN HON. MEMBER: (Inaudible) Newfoundland and Labrador.

MR. WOODFORD: No, in Canada. That is in Canada. In

Newfoundland and Labrador it breaks down to... in ninety-two, I think it is 1.6,

or something like that, in Newfoundland and Labrador. It is still the highest.

Automobile insurance is still the highest in the Province as well.

One of the other things that I didn't know before and

somewhere in this - the minister could probably, when he gets up, clarify that

too. The setting of the rates. The government has a say in the setting of

certain rates for insurance companies. Setting of the premiums, is that the PUB?

MR. ROBERTS: PUB. Well, I can explain it, yes.

MR. WOODFORD: However, the provincial authorities

contracts and (inaudible) companies and so on, but some provincial governments

also review auto insurance premiums before companies may change them. Is that

applicable to us, I wonder?

MR. ROBERTS: (Inaudible) I can explain it.

MR. WOODFORD: Okay, go ahead.

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

MR. ROBERTS: Mr. Speaker, the automobile insurance act

has in it a number of sections; they are near the end of the present act. I

don't have a copy of it before me. Essentially, the mechanism that has been in

place for, say, fifteen years, that kind of time frame, is that the Public

Utilities Board, which is a quasi-judicial board operating at arm's length, sets

bench marks within which automobile insurance rates may be charged. There is an

upper and a lower range, if you wish, say for $200,000, the minimum policy

permitted by law. No insurer may write a policy for third party

section A

coverages for less than $200,000.

The PUB sets these rates after getting requests or

representations from the industry and after an actuarial study which it has

made. The industry comes in and says: This is what we are going to need in our

estimation to service the claims that we can anticipate on the actuarial basis

and to make a reasonable rate of return, a profit. The reason that actual rates

are not set of course is this is a competitive industry. My hon. friend would

know that you can shop around for insurance and you may get a wide variety of

rates among the different companies.

The other point I would make is that the operation is

self-financing. The insurance companies sometimes complain - in fact, I have a

letter of complaint on my desk now - but the PUB charges back the cost of the

regulation to the insurance industry, much as it charges back the cost of its

electrical rate-setting regulatory process to the electrical industry.

The government does not review the rates but there is a

public review process through the PUB, and I believe there is provision that if

anybody wants to have a hearing, including a consumer, that one could go in and

the Board would address that. There is a control mechanism but basically it is a

competitive industry. That is the other control.

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

MR. WOODFORD: If someone wanted to intervene there they

could.

MR. ROBERTS: Yes.

MR. WOODFORD: At a hearing.

MR. ROBERTS: I will look up the section.

MR. WOODFORD: A couple of other things. Other members

want to speak and we want to try to get this through. But each provincial or

territorial government however sets its own limits with regards to liability.

That is right, regards to the liability.

MR. ROBERTS: The Legislature accepts them here.

MR. WOODFORD: The $200,000.

MR. ROBERTS: Yes.

MR. WOODFORD: Yes. Just one comment on the profits by

insurance companies in Canada last year, Mr. Speaker. There was $7.5 billion in

auto insurance sold in Canada last year, off which there was a 22 per cent

profit. Seventy-eight per cent of that particular $7.5 billion was paid back in

the form of claims, which amounted to $5.8 billion, but there was a 22 per cent

profit margin by insurance companies in Canada last year on auto insurance

alone.

AN HON. MEMBER: (Inaudible).

MR. WOODFORD: Yes, that's a very lucrative business, Mr.

Speaker, in this case now, I'm only talking about the automobile insurance. I

can go on to the other stuff but it's not necessary at this time.

So, Mr. Speaker, having made a few comments on this

particular piece of legislation - like I said from the onset, it's a good piece

of legislation. It should help people, injured people, to be satisfied faster

and quicker - and try to get their claims settled and so on because a lot of

those people, through no fault of their own, Mr. Speaker, have incurred an

injury or someone else has hit them and so on and I think that this piece of

legislation will rectify a lot of that. I say to the minister that the faster it

is brought in the better. Apparently from July 1994 will be the date. Now if we

pass this today - I don't know, it usually takes two or three months to get

something proclaimed but I suppose the minister and his department can make sure

that that's proclaimed a lot faster. Thank you, Mr. Speaker.

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

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

This afternoon I have the rare and very special pleasure to

say that I agree with a bill presented by government and -

SOME HON. MEMBERS: Hear, hear!

MS. VERGE: - and furthermore I agree with the process the

government used to present the bill. The government, through the Minister of

Justice, came to the House of Assembly last fall with a bill to amend the

Automobile Insurance Act. There were brief speeches on second reading at the

time and then the minister referred the bill to the Social Services Legislation

Review Committee. Now I think all members realize that's a committee comprising

members of the three parties. It's Chaired very ably by the Member for Burgeo -

Bay d'Espoir and when the House was recessed early in the winter the Committee

had a couple of meetings on the bill. As it turned out, two members of the

Committee, at least, were quite familiar with this general subject. They had had

quite a bit of personal familiarity with the judgement recovery system. The

Chair himself, the Member for Burgeo - Bay d'Espoir and the Member for St.

John's East, those two committee members in particular made a very good

contribution to the committee's deliberations over the bill.

The Committee published notices inviting the public to

comment on the bill. As it turned out the only taker was an insurance industry

representative who came to the Committee and gave us a background paper and an

analysis of this legislation. We found out from the insurance industry

representative and also an official of the Department of Justice that it was the

insurance industry which took the initiative to encourage the Newfoundland and

Labrador government to bring this type of law reform forward to the House of

Assembly, similar legislation is now in force in New Brunswick.

Mr. Speaker, this then has been a very satisfactory instance

of collaboration of members of all three parties in bringing about needed law

reform. Mr. Speaker, the Committee suggested some improvements to the bill and I

think all the recommendations or most of them, were incorporated in this revised

version of the draft act, this Bill 8. Some members, including two of my

colleagues, the member's for Bonavista South and Humber Valley in participating

in this debate have not only expressed the support of the Official Opposition

for the bill but they've gone on to make some constructive suggestions for other

improvements in the law requiring that drivers have insurance.

So, Mr. Speaker, I trust the Minister of Justice and his

colleagues will take those suggestions seriously and maybe make appropriate

legislative or administrative changes to ensure a fuller compliance with the

current legal requirement that drivers have insurance. Mr. Speaker, I expect

that this legislation will provide much better coverage for victims of uninsured

drivers and see that people who are injured or whose property is damaged at the

hands of uninsured drivers get appropriate and fair compensation, and get it

reasonably quickly.

Again, I praise the government both for the contents of this

bill and also for their approach to having it enacted. The committee system

works well. I only wish that the committee used the committee system and the

consultative process for other legislative initiatives. Sadly, we aren't seeing

that democratic approach for the most important bills now before the House of

Assembly, Bills 1 and 2, the Hydro privatization act and the electrical power

control act.

MR. EFFORD: (Inaudible).

MS. VERGE: I say to the Minister of Works, Services and

Transportation, if he has something to contribute to this debate, let him get on

his feet and say it. I've said everything that I had intended and I await now

the contribution of my colleague, the Member for St. John's East.

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

MR. HARRIS: Thank you, Mr. Speaker.

I rise to speak in the debate on Bill No. 8 concerning the

amendment to the automobile insurance act. It does provide a new scheme to look

after the situation where an automobile accident occurs and the person at fault

is uninsured or underinsured.

There are some problems with the current system and this is a

new system. Some lawyers have been complaining about it, other lawyers have been

making money on it, because they represent the previous organization which is

being continued for a brief time here, Judgement Recovery Ltd.

MR. ROBERTS: (Inaudible).

MR. HARRIS: As the Minister of Justice quite rightly

says, both schemes will exist in sort of a grandfathering situation where

existing claims or existing accidents that are being dealt with under the old

system would continue to be so, and that makes administrative sense.

This is not a piece of legislation to make it easier for

lawyers to operate within a system. Lawyers, as the Minister of Works, Services

and Transportation well knows, can operate in any system. In fact, the more

complicated the system, sometimes, the more lawyers like it, because they are

more necessary to sort things out. I say to the Minister of Works, Services and

Transportation that a lot of people might be able to sort out their problems

without lawyers, under this legislation. In fact, that is probably where the

most benefit would come from this legislation, in accidents that are not huge

and do not require a lot of litigation to sort out the damages.

Insurance adjusters, under this legislation, would be able to

resolve the smaller sorts of claims very quickly,

whereas under the Judgement

Recovery system, almost always there was a need to have lawyers involved, in

part because the system was so complicated, but in part because it could not

respond without having a number of actions take place under the legislation that

inevitably involved lawyers. Therefore, the reforms that are contained in this

legislation are helpful in that regard.

We do have here, as the Member for Humber East mentioned in

her remarks, an example of the committee system working to improve legislation.

We didn't have, I might add - and this is probably a negative reflection on the

legal profession - input from the legal profession in a formal way, although it

was -

MR. ROBERTS: You should have suggested we (inaudible).

MR. HARRIS: We did make available copies of the

legislation to the Canadian Bar Association, Insurance Section, and to the Law

Society, and asked for input from practitioners who, after all, are the ones who

have to operate within the system.

I am sorry to say - and I am not saying this on behalf of the

legal profession - I am sorry to say, as a member of the legal profession, we

didn't get the kind of input that you might have expected. I know the chairman

was quite surprised. He thought that the lawyers would have a look at this

legislation, look for pitfalls, look for loopholes, look for ways that the

drafters of the legislation might have missed the boat. I have to say that my

own modest contribution was along those lines, looking for areas where the

system was being changed and might not work in a practical way, and a couple of

suggestions came from those queries - suggestions which, I might add, were

adopted ultimately by the government in revising the bill.

There was an inadequate setting forth of the duties and

obligations of this organization known as the Facility Association. The

government responded by outlining the responsibilities of the Facility

Association, the requirements to make sure that this organization had an agent

for service in the Province, so that people who wanted to process claims against

the Facility Association, which was looking after the uninsured motorist

coverage, would know where to go and what to do, and you would have no problems

in that regard.

There were some other technical difficulties with the

legislation in terms of responsibilities for damages, claims by governments

other than Canada and the United States, and that was fixed up. In general,

those technical areas were resolved by discussion between the members of the

government, bureaucrats who came to the committee to help explain the issue.

The one outside person who -

MR. SPEAKER: Order, please!

I wonder if the hon. member would just take his seat for a

moment while I inform the House of the questions for the Late Show.

The first question is from the hon. the Member for Baie Verte

- White Bay: `I am not satisfied with the answer to my question from the

Minister of Fisheries concerning non-commercial seal licence.'

The hon. the Member for Kilbride: `I am not satisfied with

the answer to my question to the Minister of Health concerning registration and

fees being required of nursing assistants.'

The third question is from the hon. the Opposition House

Leader to the Minister of Fisheries concerning the Fisheries Observers Program.

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

MR. HARRIS: Thank you, Mr. Speaker.

The one representation that the committee had on this bill

from members outside of the committee and outside of the bureaucrats was a

representative of the Insurance Bureau of Canada. After awhile it became fairly

apparent that the change in the system for uninsured motorist coverage was, in

effect, a project of the Insurance Bureau of Canada. They had this proposal that

they were bringing around to various provinces, trying to get the provinces to

go along with their version of how things could be.

Although there are certain beneficial aspects to this

legislation, and the system is a little bit more palatable, it became pretty

clear after awhile that there were good reasons why the Insurance Bureau of

Canada wanted to promote this, because all of a sudden uninsured motorist

coverage became another piece of business for them. Instead of being an expense,

which the judgement recovery was - they had to share in the cost of judgement

recovery - now, all of a sudden, this was a piece of business, and the uninsured

motorist coverage for which they are going to charge a premium on each and every

insurance policy issued in the Province, this was a piece of premium business on

which they, of course, expected to make a profit. It was they who drafted the

legislation and provided that draft to government, they who promoted it to

government and to the ministry, and they who were behind the idea of bringing

this piece of work before the Legislature. It was there, of course, because they

thought they had a better way that provided them with an additional amount of

business instead of just another expense. The way the judgement recovery system

worked, and works, is that whatever the costs that Judgement Recovery pays out

must be paid, and the expenses borne by each of the insurance companies doing

business in the Province, prorated to their cost, or their share, of the premium

income. So when the insurance companies at the end of the year look at their

financial statements they see an expense for judgement recovery, the cost of

uninsured motorists, and they don't see any corresponding benefit. So it became

fairly clear, Mr. Speaker, that this was really the insurance industry promoting

its own business by saying, we have an idea as to how to do this better - and to

some extent, and I have to say, to some extent only, the problems of judgement

recovery were slightly exaggerated as part of the selling job.

In the end, the major reason being, I suppose, because of

lack of public interest, and lack of public understanding, perhaps, of the whole

process of what was going on, the committee didn't see any reason really to

oppose it, and the Insurance Bureau of Canada, with its legislation, with the

modifications that were made, have been successful in getting their way of doing

things to the Legislature.

What I did ask and what I didn't really get an answer to was

whether or not other schemes had been considered. I asked a few questions. I was

trying to find out whether the judgement recovery system was an old system that

was being replaced everywhere in the country, and the answer was, no. There were

four or five different ways this was done across the country. Judgement recovery

was one way, the uninsured motorist coverage which is being proposed here was

another - a couple of provinces accepted that - and still other provinces had

public insurance systems which included in them a provision for uninsured

motorist coverage.

What was done here, not necessarily by a choice of policy,

but in essence by default, was that only one option was considered and that was

the one proposed by the Insurance Bureau of Canada which was accepted by the

government, I have to say, Mr. Speaker, almost without any real question, or

without any comparison being done of the alternatives. In fact, in most of the

questions that were asked as to the technicalities of how this worked, the

government's own insurance people deferred to the Insurance Bureau of Canada

consultant as to what the answers might be.

I find that disturbing, Mr. Speaker, because I have to say

that I don't have, as one hon. member - without any research staff or ability to

analysis and cover all the issues that are before me, I don't have the ability

to represent the alternatives, to study the alternatives, and to determine what

they are, but I would expect that the government, with its full-time resources

of staff, bureaucrats, and people who are assigned, experts in the insurance

field who are hired by government to monitor and examine the policy

considerations, and to look at the various choices and options as to how this

can be done - I would have expected those people to be able to tell the

committee: Well, yes, we have reviewed this system used in Ontario, and that

system used in Manitoba, and the other system used in New Brunswick, and we have

looked at what the Insurance Bureau of Canada has come forth with, and we have

decided that this is best.

I don't think we had that, and that's a criticism of the

government. It's a criticism of how the government is really allowing large

corporations and industry to dictate to them, either by massive lobbying, or

policy lobbying, which we see in the soft drink beverage container issue. We see

it here; I think we see it here. I think we see it in the suggestions that the

Minister of Environment and Lands is so happy to accept, that it is the response

to a lobby - and here is the response to a lobby by the insurance industry.

What I see is a government - I have no objections to

business, and people investing in business, and having good ideas that they can

take and make money from; what I object to is having companies come and

influence government to do things just because it is good for a particular set

of companies or a particular operation. So I am not sure this is the best way to

do it. I have to say that. I have a partiality to government-run insurance

schemes when it comes to automobile insurance, because it is one of those things

that is compulsory and amounts to a monopoly-type industry where it is required

to have insurance. It is a kind of situation which lends itself to government

regulation and government offering the service. I have a partiality to that, but

I haven't done any analysis in this Province as to what the pros and cons might

be of assuming or taking on a different type of automobile insurance.

There haven't been, I have to say, an awful lot of complaints

about the insurance industry, other than the one mentioned by the Member for

Bonavista South, and that is something that perhaps the Minister of Works,

Services and Transportation would like to look at, not in the sense of telling

the insurance companies what rates to charge, but perhaps in finding ways of

having fewer accidents amongst young males.

We have complaints, as the Member for Bonavista South said,

that a young man who gets a driver's licence at age seventeen or eighteen all of

a sudden has to pay a huge premium of insurance. We have a huge premium for a

young male as compared to a young female. Now, we may have a lower rate of

accidents, on the whole, either among young people or whatever, than in other

provinces, but the experience rating is what determines the insurance rates. So

I have to say to the Member for Bonavista South, that the reason that the

premium might be ten times as high for a young man than a young woman is because

there are probably ten times as many accidents, and that is in Newfoundland as

well as in Ontario or P.E.I., because the experience rating is a Newfoundland

rating, not an Ontario rating or a British Columbia rating.

What I would think the Minister of Works, Services and

Transportation could do to assess this problem is consider - and I am only

saying consider, because you have the analysts, the government has the analysts

to look at this - consider a new form of driver's licence for young people. It

doesn't have to be the same as the ones that other provinces have, but I know

the Province of New Brunswick has introduced a graduated driver's licence.

Whether it is practical or not, that is something that the minister might be

able to analyze, as to how it could reduce the cost.

I am no expert on the New Brunswick system. It has only come

in recently. Perhaps the minister can make available to hon. members a briefing

note on the New Brunswick system for consideration. As I understand it, some of

the features of this system are that it is a graduated licence. When you get

your licence, for the first year you're only allowed to drive with a licensed

driver in the car. You're not allowed to drive after a certain hour at night and

there's some sort of a zero tolerance for alcohol for younger drivers and for

the first two or three years there are certain restrictions on younger drivers

that don't exist for the regular adult population. I think, Mr. Speaker, that

that might be necessary in some cases. I think the Member for Bonavista South

was saying that the careful, prudent and responsible young male driver is

getting dinged, as it were, getting to have to pay the costs for those who are

irresponsible, reckless, careless and imprudent and go out joy riding, drinking

or are so inexperienced as to not be able to handle emergencies.

Now there's not as much drag racing or serious speeding

around these days as there used to be, Mr. Speaker. My impression is that it's

not as much the macho thing to do as it was one time to go and drive cars at

exceedingly high and reckless speed on the highway as it once was. It's no

longer considered as macho as it once was. It's considered to be the foolish

thing that it is, Mr. Speaker. That's not as big a problem but I think that

there is a difficulty with younger drivers - I wouldn't say younger drivers -

with inexperienced drivers that a new driver without the kind of driving

experience is not as able to respond to emergencies that occur on the highway in

particular, as an experienced driver would be. They don't have the level of

confidence that's required to handle a vehicle.

The Minister of Works, Services and Transportation can do the

public a favour, not only the driving public, but the public who might be

victims of these accidents a favour by considering the safety aspects of a

graduated program for newer drivers. It would give younger people in particular

an opportunity to obtain driving experience and hopefully have the experience

rating down so that the costs of obtaining insurance for young males would be

considerably less. Prudent, careful, responsible young drivers would not have to

pay the costs incurred by those who are reckless, careless and imprudent and

that would be a positive benefit. I look to the Minister of Works, Services and

Transportation to bring about such a change.

The government could also, while we're considering insurance,

Mr. Speaker, look at the issue of

Section (b), what's known as

Section (

b) or

accident benefits. The accident benefits portion that have to do with medical

treatment and loss of income. That is not compulsory in this Province, Mr.

Speaker. It is not compulsory and one of the difficulties that occur when it is

not compulsory is that there are a number of people who do suffer as a result.

AN HON. MEMBER: (Inaudible).

MR. HARRIS: I hope so. What I want to ask the minister,

is he prepared to consider making accident benefits compulsory? I think, based

on the Insurance Bureau of Canada report, that of the 11.2 million private

passenger vehicles in Canada, only 7 million have accident benefits coverage.

Not only that, for commercial vehicles, only about two-thirds have accident

benefits coverage.

I'll give you an example of the kind of problem that results

when they don't have accident benefits coverage, Mr. Speaker. A young man who

did not have any insurance of his own, was a passenger in a taxicab and several

seconds after he gets into the cab there is a head-on collision between the cab

that he is riding in and another vehicle. Both drivers deny liability for the

accident, and this individual who requires physiotherapy, and who can't work, is

all of a sudden out of an income and can't get physiotherapy because he can't

afford to get it. The taxicab in which he was a passenger had no

Section B

coverage, no accidents benefits coverage, yet was carrying around passengers

that it was not able to look after in the event of an accident for which no

liability could be determined.

That is one thing, if the government is interested in

reforming automobile insurance, or making uninsured motorist coverage

compulsory, and allowing the Insurance Bureau of Canada and its members to

obtain premium income and profit on that, I would ask that the minister consider

making accidents benefits, or

Section B coverage, compulsory as well - at least

for commercial vehicles which are carrying passengers for hire.

MR. EFFORD: (Inaudible) done.

MR. HARRIS: The Minister of Works, Services and

Transportation says he has that done. I invite him to rise during the debate and

tell us where that is done, and I would be quite happy to applaud him for it.

Those are my comments on the bill, Mr. Speaker. I think it

will bring about an improvement in the system for uninsured motorist coverage

and provide, I would hope, a better system - at least as good a system as we

have now for other insurance, to provide opportunities for people who are

injured as a result of accidents where there is inadequate insurance to obtain

redress.

Thank you, Mr. Speaker.

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

minister speaks now, he closes the debate.

MR. ROBERTS: Mr. Speaker, I think it is the wish of the

House that we close the debate. I will be very brief.

The accident benefits coverage issue is one that we are

looking at. There are mixed views. I won't express a personal view, but there

are mixed views because there would be an extra cost. The accident benefits, the

Section B benefits, were increased in the last couple of years, and that has

increased the cost.

AN HON. MEMBER: (Inaudible) commercial vehicles.

MR. ROBERTS: Well, commercial vehicles, generally the

occupants of these would be covered by workers' compensation.

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: Well, commercial vehicles shouldn't be

carrying passengers.

AN HON. MEMBER: Taxis don't have

Section B.

MR. ROBERTS: Taxis would be covered under the third party

liability coverage. Their passengers would sue the driver.

My friend from St. John's East talked at some length about

what the IBC said to the review committee. I wasn't there; I don't know what it

said, but I can t