November

15, 1994

HOUSE OF ASSEMBLY PROCEEDINGS

Vol. XLII No. 61

The House met at 2:00 p.m.

MR. SPEAKER (Dicks): Order, please!

Statements by Ministers

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

MR. BAKER: Thank you, Mr. Speaker.

I would like to inform the House that a very short time we

reached a tentative agreement with the Newfoundland and Labrador Nurses Union.

Details of the tentative agreement will not be released until they get a chance

to go around and notify their membership.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. the Member for Menihek.

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

It is about time that we have reached a collective agreement

with the nurses.

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

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: I should note the Speaker does not make the

rules, the Speaker merely enforces them.

Does the hon. Member for Bonavista South have leave to

address the House?

Leave given.

The hon. the Member for Bonavista South.

MR. FITZGERALD: Thank you, Mr. Speaker. I rise today to

pay tribute to one of two only known surviving individuals that took

part in the

Battle of Beaumont Hamel, a gentleman by the name of Mr. Ronald Dunn who passed

away on September 8, 1994, since the House last sat.

Mr. Dunn was ninety-seven years old. He was a very

courageous, brave soldier who took

part in the Battle of Beaumont Hamel and was

left on the battlefield for three days as a wounded individual, in that famous

battle where 801 people took part and only 68 answered the roll call the next

day.

After Mr. Dunn returned home he was very active in the cubs,

scouts and rovers movement. He became the first president of Branch 7 of the

Royal Canadian Legion in Bonavista, and was a very active community minded

individual. For the last five years of his life he was confined to Golden

Heights Manor in Bonavista and always maintained a very keen interest in

community affairs and government affairs in his Province and in his town.

I would like to ask Your Honour if you would be kind enough

to send a letter of condolence, or a card, to his two surviving sons, Bert and

Eric Dunn from the town of Bonavista.

Thank you.

SOME HON. MEMBERS: Hear, hear!

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

have leave to address the House?

Leave given.

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

MR. HARRIS: Thank you, Mr. Speaker.

I would like to join with the Member for Bonavista South in

asking the House to pass on the condolences of all hon. members to the family of

Mr. Dunn. It is an opportunity for us, of course, to remember all those who did

not survive the Battle of Beaumont Hamel which, of course, goes down in history

as one of the most tragic events in the history of Newfoundland. I think the

fact that there are still two surviving members of that battle is remarkable, or

there were still two until recently, is a remarkable tribute to the longevity of

Newfoundlanders. The family of course would be happy to hear the condolences of

this hon. House, which I would imagine would be unanimous after the Government

House Leader speaks on behalf of that side.

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

MR. ROBERTS: Mr. Speaker, the circle grows ever smaller,

and with the passing of Mr. Dunn I understand there is only one survivor left, a

gentleman named Tobin who I believe lives in the United States. Maine, one of

the United States. The only survivor of the July drive, July 1 1916, when the

men of the Newfoundland regiment - it wasn't yet then the Royal Newfoundland

regiment - wrote an immortal page in the history of this Island and this

Province at an almost unbelievably high price in blood and the suffering that

came for those who were wounded and who survived the battle.

We on this side would join with the other members of the

House in asking if Your Honour would be good enough to direct the Clerk to send

an appropriate letter to Mr. Dunn's survivors. I thank the hon. gentleman for

Bonavista South for giving us the opportunity to acknowledge these men. It was

at that battle, if memory serves me correctly, that a British general said: The

only reason the Newfoundlanders went no further was dead men could go no

further. It was at that battle. It is fitting this House should recall that,

Sir. Thank you.

Oral Questions

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

MR. SIMMS: Mr. Speaker, last Thursday the Minister of

Justice, the minister responsible for the regulatory regime governing the

insurance industry in this Province, held a press conference. A number of things

occurred, a number of things were said. One, the most startling I guess, was his

analogy or his comparison, his brilliant use I suppose, of using the water

glass, suggesting that if somebody were to sell this glass to me for fifty cents

and somebody else for a dollar surely you would question that. Suggesting that

anybody who got their insurance at lower premium rates then they should question

that, or investigate that. That was kind of ridiculous because - well, there

likely would be a lot of questions about the water glass, many more than about

the insurance industry, because the government is responsible for regulating the

insurance industry, and people feel pretty safe with it.

He also said at that press conference that: All reasonable

precautions were taken to protect consumers. That is a quote. I have a couple of

quick questions I would like to ask the minister right at the beginning. If that

is true, then why today, only eighteen months after Hiland Insurance was

originally licensed, do 20,000 people in this Province stand to lose $20 million

in insurance premiums? How is it possible that things could have gotten so far

out of hand so quickly, especially in a new small operation that any prudent

regulator should have monitored closely for at least its first year of

operation? Could he answer those questions?

SOME HON. MEMBERS: Hear, hear!

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

MR. ROBERTS: Mr. Speaker, before I begin the answers -

and I am glad to have a chance to address these things - Your Honour, may wish

to remind people in the gallery, that while they have every right to be here and

think whatever they wish, they do not have a right to participate.

SOME HON. MEMBERS: Oh, oh!

MR. ROBERTS: Now, Mr. Speaker, if hon. gentlemen opposite

want the answers, they are going to have - Mr. Speaker -

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

I would like to hear the hon. gentleman's speech.

MR. ROBERTS: Mr. Speaker, if hon. gentlemen opposite want

the answers, they will have to do the same courtesy to me that I am more than

happy to do to the Leader of the Opposition, and that goes for the gentleman,

the Member for Burin - Placentia West.

Now, Mr. Speaker, let me come back to the question. First of

all, I acknowledge that government are responsible, within the statutory

requirements, for the regulation of the insurance industry. These have not

changed in the last six, eight or ten years. The regulatory scheme that is in

place in this Province today is the one that has been in effect for a number of

years with one significant exception, we proclaimed in the law, about a

year-and-a-half ago,

an act which the previous government put on the books which

does improve the degree of protection somewhat.

Secondly, the so-called quick questions by my friend, the

Leader of the Opposition - he asked why 20,000 people have lost $20 million of

premiums. The answer is, Mr. Speaker, there is not a word of truth in that

statement. There were, I am told, approximately 20,000 policyholders at Hiland

Insurance. Some have lost or may have lost premiums. I acknowledge that. I am

not at all happy about it. Government will see what we can do about it but, Mr.

Speaker, it is not correct - and I am glad that the hon. gentleman gave me the

opportunity to deal with it - to say that 20,000 people have lost $20 million in

premiums. What has happened is that people who bought insurance and paid for it,

for a period in advance, may not get the benefit of their premiums. They will

not get it unfortunately at this stage. If, for example, somebody went in two

weeks ago and paid a premium for the next three or four months period, they will

get, I believe it is sixty-five days coverage or whatever. It depends on the day

when they paid it. They will get -

AN HON. MEMBER: (Inaudible) forty-five.

MR. ROBERTS: Hon. gentlemen opposite are quick to say

forty-five, they are wrong on that. It depends on when one paid the premium, and

also, there is a date to be set by the court. It is beyond my control. But it is

not correct and I am glad to assure my hon. friend this, that 20,000 people have

lost $20 million in premiums. Now, his other point had to do -

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: Now, one question at a time. The gentleman

also asked about the regulatory (inaudible). I have gone through it; as far as I

can determine on the information I have been given, the regulatory authority, in

particular, the Superintendent of Insurance, acted promptly when he became aware

- and he became aware, as far as I can determine, as early as he could - that

there were problems. Now, I am constrained in what I can say.

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: Yes, I am constrained in what I can say, Mr.

Speaker, because the papers have been referred to the police and I will remind

hon. members - who may or may not care about this, but I will remind them - that

the Supreme Court of Canada has said definitively, in a case arising out of the

Starr incident in Ontario, that there can be no civil comment or civil

controversy about a matter under criminal investigation unless one is prepared

to forego any possibility of a criminal investigation and, if charges should be

laid, in the laying of those charges. We have not taken such a decision.

Now, I suspect my hon. friend has some more questions.

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

MR. SIMMS: A supplementary, Mr. Speaker.

I don't want to quibble with the Minister of Justice. The

fact of the matter is, he did confirm there were 20,000 policyholders. If an

average premium were $1,000, that is $20 million. I didn't say they would lose

it, I said they stand to lose $20 million, so let's not quibble over that. The

fact of the matter is there are thousands in this Province who will lose

millions of dollars in insurance premiums, that is the truth of the matter. So

all this other nonsense about not being able to - you know, restraining what he

can say in answers, that is all nonsense; because the questions I asked him, are

questions for which he, as Minister of Justice, has to be held accountable.

I heard an interview on CBC television last week; the

minister perhaps saw it as well. It was an interview with a representative of

the insurance industry in this Province, and he said that insurance

representatives had raised with the Superintendent of Insurance and others in

government, concerns about giving a license to Hiland in the first place, and,

expressed concerns again later on, to that same superintendent and others in

government about Hiland's rates and the numbers of policies that the government

was writing. Now, they -

MR. SPEAKER: Order, please!

I would like the member to phrase the question.

MR. SIMMS: They were obviously concerned, Mr. Speaker,

that the company was taking on liabilities far in excess of its assets, so I

want to ask the Minister of Justice, this simple, straightforward question: Did

the representatives of the insurance industry or, did the Superintendent of

Insurance tell you about any of those concerns, and if so, what did you do about

it?

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

MR. ROBERTS: Mr. Speaker, again, I am more than happy to

answer the question. I think the hon. gentleman was asking two questions.

First he asked: Were there representations made at around the

time the company was granted a licence to do business?

MR. SIMMS: No, I didn't say that. I was quoting

(inaudible).

MR. ROBERTS: Okay, I am sorry. He was asking if there

were, then. I am not trying to - if there were.

My understanding is that certain questions were raised, that

they were addressed by the superintendent, and the superintendent dealt with

them to his satisfaction or he, the superintendent, would not have granted the

licence in the first instance.

MR. SIMMS: And you weren't made aware of that.

MR. ROBERTS: No, I wasn't aware of that. The first

awareness I had came when I had a letter... I have been carrying on an ongoing

correspondence with -

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: Okay. I have an ongoing correspondence with

a representative of an insurance company in this city about a number of matters

and, in the course of that, that gentleman raised some concerns about Hiland.

My friend, the Member for Ferryland, if he would like to ask

a question, should get recognized by the Speaker. Then he can ask and we will

try to answer it.

Now, let me come back. I was made aware of those, as I

recollect, in December. I have a chronology here. Let me see if I can look it

up. Yes, on 14 December, 1993, I received a letter expressing concern about

Hiland's long-term viability. On 15 December, I asked the Superintendent of

Insurance for a report, which strikes me as a reasonably prudent thing for a

minister to do. On 5 January, I received a report. The superintendent responded

to the letter. I got a copy on 20 January. I got a full report on 21 January,

and I directed the superintendent - this is a quotation - "Please do whatever is

necessary to protect the policyholders of Hiland", and the superintendent

proceeded to monitor the company.

On 31 March - it was dated 31 March; in fact, it was received

a day or two later - the report on Hiland by the independent auditors was

provided to the Superintendent of Insurance, so the affairs were found to be in

order. In other words, as of the 3rd or 4th of April, when the superintendent

received the report of the auditors of the company, dated for the year ended 31

December, the affairs appeared to be in order. Mr. Speaker, that was one of the

questions.

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: I don't have them here.

There was a second question my friend asked me.

MR. SIMMS: I asked you if you were aware of the concerns.

That was the question.

MR. ROBERTS: Okay, let me finish. The answer was that I

was aware in December, and the -

MR. SPEAKER: Order, please!

I think the minister has answered the question. If the hon.

member has a supplementary, I will allow a supplementary. It might be easier to

get to the point.

MR. SIMMS: Thank you, Mr. Speaker. There is a danger that

the minister could try to eat up the thirty minutes. We have other things we

would like to ask him.

If he wants to, why doesn't he just table the letter so

everybody can see for themselves. You can black out the individual's name if you

have any concern in that way, but I would like him to table the letter. That is

the question. Will he table the letter, perhaps before the House adjourns today?

MR. SPEAKER: Order, please!

The hon. the Government House Leader.

MR. ROBERTS: Which letter, I ask my hon. friend?

MR. SIMMS: (Inaudible).

MR. ROBERTS: The one I sent to the superintendent?

MR. SIMMS: The concerns that were expressed (inaudible).

MR. ROBERTS: I will table the letter I sent to the

superintendent, without any problem. The letter that I received from the

gentleman outside, I will not table without his permission. I will undertake to

call him, and if he grants permission I will table it. I have no problem, but I

wouldn't table a letter he wrote me. I will table my responses.

MR. SIMMS: Fair enough. We will look forward to getting

them.

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

MR. SIMMS: Thank you, Mr. Speaker. We will look forward

to getting whatever information we can from the minister.

Mr. Speaker, the owner of Hiland Insurance, a Mr. Gillingham,

I think is the name, had already been involved in two other insurance companies

whose licenses had been revoked. Now, the minister said at his press conference

he only became aware of that half-an-hour before, although it was on open lines

and everything else for about two weeks before that, so it is surprisingly

strange that he hadn't heard of it.

I want to ask him this: Isn't it a fact that according to

section 16 of the act - that is, the Insurance Adjusters, Agents and Brokers Act

- that the Superintendent of Insurance can refuse to licence an individual or

company who had a previous licence revoked? Given that fact, and given the

warnings from the industry that he just told us about, in fact, why was Mr.

Gillingham's application for a licence processed so routinely, as described by

the minister in his press conference?

SOME HON. MEMBERS: Hear, hear!

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

MR. ROBERTS: Mr. Speaker, I don't have the Insurance

Companies Act - I now have it in front of me,

section 16.

MR. SIMMS: (Inaudible).

MR. ROBERTS: Yes, but 16 is a long one, I say to my

friend - well,

section 16 covers three pages. I'm not going to give an opinion

on it right at this minute. I have it here. When I read it - I can read it. Let

me assume that the superintendent has a discretion to refuse a licence. It would

be very unusual if he did not. Let me then come to the suggestion that Mr.

Gillingham was involved with two failed insurance companies. The information I

have been given is that he may have been involved - and I will deal with that in

a minute - with one insurance agency. Now, I'm not trying to play word games but

there is a distinction between an insurance agency and an insurance company.

He was involved with a company called All Star. That was run

by a man named Mr. Doug Atkinson who used to be a city councillor and who now

stands charged criminally -

AN HON. MEMBER: We all know that.

MR. ROBERTS: Well, the hon. gentleman may know that -

MR. SPEAKER: Order, please!

MR. ROBERTS: - but I want him to know that everybody else

knows it, too.

Mr. Speaker, Mr. Gillingham, I am told, was involved with All

Star. He ended up falling out with All Star and, in fact, sued All Star and Mr.

Atkinson because of the allegation that Mr. Atkinson was doing things with All -

MR. SIMMS: (Inaudible).

MR. SPEAKER: Order, please!

MR. ROBERTS: Mr. Speaker -

MR. SIMMS: (Inaudible) will he answer the question?

MR. SPEAKER: Order, please!

If the minister would continue.

MR. ROBERTS: Mr. Speaker, I am trying my best to answer

the question. If the hon. gentleman will not so rudely interrupt.

Mr. Gillingham was involved with All Star. He and Mr.

Atkinson had a falling out. It led to litigation. The litigation, according to

the information I have been given, was settled on terms, one would assume,

satisfactory to both by settlement. (Inaudible) Mr. Gillingham showed as

vice-president of that company. I have seen no suggestion that All Star itself

was a problem. I have seen - not I've seen, I mean, I know for a fact that Mr.

Atkinson has been charged criminally with certain matters arising out of these

transactions. I can say no more about it. The matter is before the courts. The

charges were laid by the police in this jurisdiction.

AN HON. MEMBER: (Inaudible) revoked.

MR. ROBERTS: I beg your pardon?

AN HON. MEMBER: (Inaudible) licence (inaudible).

MR. ROBERTS: The licence may well have been - licenses

are revoked from time to time. This is the third time, Mr. Speaker, in my time

as Minister of Justice, that I have had to suspend or to put in trusteeship the

licence of an insurance company in this Province.

MR. SIMMS: Why was this new licence issued so routinely?

That was the question I asked.

MR. ROBERTS: Now, Mr. Speaker, the question was: Why was

a new licence issued? and the hon. gentleman said: `issued so routinely'. I'm

afraid I must tell him that he is mistaken. It wasn't issued by me, it was

issued by an official for whom I am responsible.

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: No, I didn't say it was routinely at all.

Mr. Speaker, the Superintendent of Insurance went to a great

deal of effort to determine whether a licence should be issued. Here is what

Hiland provided at the superintendent's request: a detailed business plan, which

included a description of a business to be conducted; management structure;

re-insurance arrangements and pro forma financial statements for three years;

details of shareholders, directors and auditors; details of proposed investment

policies; opening audited balance sheet of Hiland which confirmed paid in

capital; conformation from shareholder that capital was unencumbered and that no

premiums held in trust by related insurance agency would be used to capitalize

or fund Hiland's operations; and confirmation from reinsurers that the

reinsurance program was in place with reinsurance licensed in Canada.

The superintendent informs me that the Hiland application for

license was the subject of extensive analysis and review over a three month

period prior to the approval of the license on January 28, 1993.

MR. SPEAKER: Order, please!

I think the minister has answered the question. I ask for a

supplementary.

MR. ROBERTS: Now, Mr. Speaker, that is what the

superintendent did.

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

MR. SIMMS: The minister can try his best to stonewall all

he wants. If he cannot answer a question straightforwardly then it is better

that he not stand to answer at all. That would be my recommendation.

SOME HON. MEMBERS: Hear, hear!

MR. SIMMS: Let me ask him about another very serious

piece of information. The fact of the matter is that under the same Act I

referred to earlier, the Insurance Adjusters Agents and Brokers Act,

Section 12,

I will quote for him as it is only two lines. `A license issued under this Act

expires on a prescribed date in the year in which it was issued unless it is

sooner revoked or suspended.' That means that this particular license issued to

Hiland Insurance back in January 1993, re-issued in January 1993, had actually

expired by this December past, 1993, so the fact of the matter is a new license

was issued only six or seven months before this company went bankrupt.

Now, I want to ask the Minister of Justice, with all the

information that the government surely has amassed on this issue, and did by the

end of 1993, why on earth did the government re-issue a new license just six or

seven months before the company went bankrupt? Explain that.

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

MR. ROBERTS: The license issued to every insurer, or

anybody else under the Act, is for a calender year at a maximum and is renewed.

The license for Hiland was renewed at the end of 1993, or early in 1994,

whenever the period came up. The reason it was renewed, Mr. Speaker, is that the

superintendent at that stage had satisfied himself there was no reason not to

renew it, so the superintendent did renew it. The minister does not get involved

in this.

SOME HON. MEMBERS: Oh, oh!

MR. ROBERTS: Mr. Speaker, if anybody thinks for one

minute that the Minister of Justice sits down and reviews every license

application for all of the 164 statutes for which I am responsible, including

the Insurance Agents Act, or if anybody thinks I sit down and review all the

insurers or agents, or brokers who are licensed, let me disabuse them now. That

is not the case or should it be the case. The superintendent is a senior

official. He has resources to do his job and he does his job.

Now, Mr. Speaker, I was aware, because of the letter to which

I referred in December, that a competitor had a concern. It was raised by me the

day after I got it with the superintendent and my instructions to the

superintendent, when I saw his report, were to do whatever is appropriate to

protect the interests, and he did what in his judgement he considered to be

appropriate. I am not going to try and second-guess that.

MS. VERGE: (Inaudible)

MR. ROBERTS: If the lady for Humber East wants to ask a

question let her rise.

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

MR. SIMMS: Mr. Speaker, we are getting at the nub of

this. The minister actually knew, he finally confesses here today, he knew there

were concerns so much so that he wrote the superintendent of insurance himself

and asked him to investigate it. Then he tells us he washed his hands off it. He

did not ask for a report back from the superintendent of insurance. Is that what

he is trying to tell us?

MR. SPEAKER: The question please.

MR. SIMMS: This is unbelievable. In addition to all of

these circumstances that I described and others have described publicly, the

minister also admitted in his press conference that Hiland had been delinquent

in submitting reports to the superintendent. The minister mentioned that, so I

want to ask him, were there any other warnings of serious trouble? Had the

company, for example, this company, been late in paying corporate insurance, or

RST sales taxes to the government, either this year or last year, because surely

he must have investigated that? Can he answer that question?

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

MR. ROBERTS: Mr. Speaker, before I answer the question I

must correct the hon. gentleman's premise. He has a habit of stating something

as if it were a fact when in fact it is not a fact. He says that Hiland was

remiss in filing reports. Hiland was due to file an annual report by March 31

and I am told it was received on April 3 or 4. That may be remiss in one sense

of the word but if it is remiss there are thousands of people who are remiss all

the time with that kind of thing, including hon. gentlemen opposite from time to

time I venture. Now his other question was whether Hiland had failed to make

other payments? My answer is, as far as I know, no.

MR. SIMMS: Did you ask?

MR. SPEAKER: Order, please!

The hon. the Leader of the Opposition.

MR. SIMMS: Thank you, Mr. Speaker.

`As far as you know.' In other words you did not ask, you

have not investigated, you have not checked it out. Is that fair to say? I will

ask him to -

AN HON. MEMBER: (Inaudible).

MR. SIMMS: Not correct. You did ask and they do not owe

RST, is that correct?

MR. SPEAKER: Order, please!

The hon. the Government House Leader.

MR. ROBERTS: Mr. Speaker, I have made inquiries. As far

as I am aware they do not owe anything. I do not know what they owe today. I do

not know whether they owe any RST or not. The company is now in the hands of a

court appointed receiver who will answer to the court for that. My friend the

Minister of Finance collects RST and he is assiduous and effective in collecting

the RST owed to the government.

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

MS. VERGE: He might be more effective then you are in

regulating insurance.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. the Leader of the Opposition.

I take it he has come to end of the line of questioning.

MR. SIMMS: Mr. Speaker, I think we have exposed a fair

bit here today. At noon, in front of the Legislature, as the minister knows,

representatives, I don't know, in excess of a couple of hundred I guess,

representatives of the 20,000 policy holders who stand to lose millions of

dollars as a result of the collapse of Hiland Insurance Limited, demonstrated

outside this Chamber. They are demanding a public inquiry into the failure of

this company and into the governments failure as a regulatory agent to act

quickly enough to protect or warn these policy holders. He knew of these

concerns as far back as last December, he tells us. There is other evidence to

point out that this matter does warrant such an inquiry. So I want to ask the

minister straight out, will the government order a public inquiry into this

mess?

SOME HON. MEMBERS: Hear, hear!

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

MR. ROBERTS: Mr. Speaker, the government - neither the

minister nor the officials have anything to hide in this at all. It is an

unfortunate situation and I am the first to acknowledge that several thousand

people have lost or may lose some money. They have not lost anything yet in the

sense they may get it back but they may not and I am the first to acknowledge

that and that is real.

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: Well, I do not know that. In fact I spoke to

the -

MR. E. BYRNE: (Inaudible).

MR. SPEAKER: Order, please!

MR. ROBERTS: Mr. Speaker, it is difficult to deal with

interruptions. If the hon. gentleman from Kilbride wants to ask a question I

would be happy to try to answer it.

What I will say to my friend the Leader of the Opposition is

that we cannot order an inquiry until the criminal process has run its course.

Now that is not my rule, it is not the governments rule, it is a rule laid down

by the Supreme Court of Canada. I have taken advice from the criminal law

office's of the Crown and they say: Minister, you have a choice, you either let

the police investigation - which is being done by the RCM Police - run its

course on either charges or no charges and have an inquiry or you have an

inquiry now, in which case you forego any possibility of being able to lay

charges. Now I know a great deal more about this than I can say publicly for

obvious reasons. I have had reports from the superintendent - my direction in

the matter was sent to the police. At the time I put all three companies in

trusteeship in the sense of putting the superintendent in to run them. It was a

month later that they were made insolvent.

When I gave the direction under the Insurance Companies Act,

to place Hiland and those two agencies in trusteeship, with the superintendent

running them on the 3 of October, neither the superintendent nor I, nor anybody

else had any idea these companies were insolvent. The reasons they were put into

the state of trusteeship had nothing to do with insolvency. Now I cannot go

beyond that but I can say that. What I will say on the inquiry, is we will - my

colleagues and I in the Cabinet have not had a chance to address that issue - we

will address it and if there is a purpose to be served by an inquiry - if there

is any suspicion at the end of the day that anybody has done anything wrong that

can be addressed by an inquiry, I am quite sure that Cabinet will be minded to

take the proper steps. We have nothing to hide and are quite happy to have the

whole world know that.

MR. SPEAKER: Order, please!

The minister has answered the question.

The hon. the Member for Burin - Placentia West.

MR. TOBIN: Yes, thank you, Mr. Speaker.

I want to ask the Premier today if he will confirm that the

mechanical outfitting contract which Vinland lost, which was awarded last year

to M & M Construction of Dartmouth for $114 million, is now gone over by $16

million? Will he also confirm that M & M will not be responsible for this cost

overrun because the contract has now gone cost plus?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: I have no idea whether that is so or not.

I wouldn't be at all surprised to find out that the amount of work to be done

under the contract had significantly increased. I would expect that the amount

of work to be done under the contract has significantly increased for maybe 50

per cent or 75 per cent of the contracts issued, so that comes as no surprise to

me if that is in fact the case, but if the member thinks it is of significance I

will endeavour to find out, or I will get the Minister of Industry, Trade and

Technology to find out, and bring the information back to the member. I don't

see any particular significance in it.

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

Burin - Placentia West.

MR. TOBIN: Mr. Speaker, I say to the Premier that we see

a lot of significance in it when you consider that they got it for $104 million

and Marystown's bid was $114 million, and now they are $16 million over what

they bid for it. Why didn't Marystown get it, if it was going to be that high?

That is very significant, I say to the Premier, and I can assure him that it is

of importance to me and the people of the Burin Peninsula, and we would like to

know what it has gone to and if it is cost plus.

I want to ask the Premier then, Mr. Speaker, when Vinland

decided the amount to bid on the drilling modules, were the government and the

board advised by their Norwegian - well, I don't think they were their Norwegian

partners at the time, but they were still involved, the Kvaerner people - were

they advised at that point in time that their bid was $6 million less than what

they should be bidding?

AN HON. MEMBER: (Inaudible).

MR. TOBIN: Were they advised by the Kvaerner people that

the bid they were submitting on M-71, M-72 was $6 million less than what they

should bid?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: I don't know, but I will make an enquiry,

or I will get the minister to make an enquiry, and find out, but I want to

address the first comment that the member made, that he sees some great

significance that if this contract has now gone up by $16 million to $120

million. I can only say it is a reasonable assumption that if Marystown had

gotten the contract it would have gone up by the like $16 million to $130

million, so I don't read any particular significance in it, and I don't think I

should let the member make the suggestion that there is without expressing the

contrary view.

MR. SPEAKER: Order, please!

A final supplementary, the hon. the Member for Burin -

Placentia West.

MR. TOBIN: Mr. Speaker, let me ask the Premier this: If

he is not concerned, and there is nothing significant about it, why is there

such a fuss about a cost overrun on a $35 million project that is now taking

place in Marystown?

Let me further ask him: Isn't it a fact that the cause of

delays and cost overruns on the drilling modules that he has now, together with

HMDC, decided to put in St. John, New Brunswick, is it not a fact that that was

close to two months late in awarding the contract - HMDC were six to eight weeks

late in awarding the contract? Would he also confirm that there has been in

excess of 1,600 changes to the design work that had been submitted to the

Marystown workers in order to get the work done?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: The first question was: If there was no

concern about the cost overrun that has occurred, why is there concern about the

cost overrun now in the case of the M-72, and there wasn't a concern. The cost

overrun was not a factor in the consideration - not a factor at all in what

happened. The cost overrun was not a factor in that decision.

AN HON. MEMBER: Read your letter.

PREMIER WELLS: My letters are clear. The cost overrun -

AN HON. MEMBER: (Inaudible) Ken Hull.

PREMIER WELLS: I have no responsibility for what Ken Hull

says or doesn't say. He may view this as a concern. It wasn't a concern from the

government's point of view. We didn't want to see it happen, but the government

didn't -

MR. TOBIN: Why are you prepared to accept his argument on

the (inaudible).

MR. SPEAKER: Order, please!

PREMIER WELLS: But it has nothing to do with cost

overrun. The argument with respect to the M-72 and M-73 was that it would delay

the overall project. That I cannot quarrel with. I disagree with him, but I

cannot substitute my judgement for theirs and take the responsibility for a

possible delay in the overall project. I wouldn't do that. It would be grossly

irresponsible, and I would suggest to you that whether you were responsible for

government or not, it would be equally irresponsible to do that.

Now there were two or three other questions, and if I recall

correctly -

MR. TOBIN: (Inaudible) six to eight weeks late in

awarding (inaudible).

MR. SPEAKER: Order, please!

PREMIER WELLS: Yes, they were six to eight weeks late in

awarding and the time for completion was extended by an equal amount of time.

MR. TOBIN: 1,600 changes (inaudible).

PREMIER WELLS: There may well have been 1,600 changes, I

don't know but I will ask the minister to find out whether or not there were

1,600 changes; that seems like an inordinately high number but it may well have

been that there were some significant changes and there were not, and if there

were changes -

MR. TOBIN: That's not part of the problem.

MR. SPEAKER: Order, please!

PREMIER WELLS: That is not my understanding of it. I have

no doubt that the changes caused a significant part of the problem and that is

the position we are taking with HMDC, and we will claim compensation for any

adverse consequences to Marystown as a result of changes introduced by HMDC to

the full benefit of whatever the contract may allow, and, Mr. Speaker, that will

be left to be worked out between the parties or, failing that, to be resolved by

courts as is the ordinary process but this had nothing to do with this decision.

HMDC took this decision solely on the basis of their concern about the delay,

solely on that basis.

MR. SPEAKER: Order, please!

Question Period has expired.

Presenting Reports by

Standing and Special Committees

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

Transportation.

MR. EFFORD: Thank you -

SOME HON. MEMBERS: Oh, oh!

MR. EFFORD: Thank you, Mr. Speaker. I would like to table

reports of the public tendering acts exceptions for the months of June through

to September 1994.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please! Order, please!

The hon. the Minister of Municipal and Provincial Affairs.

MR. REID: I table the annual report, Mr. Speaker, for the

Newfoundland and Labrador Housing Corporation.

Notices of Motion

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

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

tomorrow ask leave to introduce a bill entitled, "An Act To Ratify, Confirm And

Adopt An Agreement Entered Into Between The Government Of The Province And

Corner Brook Pulp And Paper Limited," Bill No. 42.

Petitions

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

Kenmount.

MR. HODDER: Mr. Speaker, I rise today to present a

petition. The plea of the petition is as follows. It is addressed to the hon.

House of Assembly of Newfoundland in legislative session convened.

The petition of the undersigned clients of Hiland Insurance.

Whereas the demise of Hiland Insurance has caused great hardship for its

clients, and

whereas the Government of Newfoundland and Labrador has failed in

its responsibilities to satisfactorily regulate the financial affairs of Hiland

Insurance, therefore your petitioners humbly pray that your hon. House may be

pleased to request the Government of Newfoundland and Labrador to conduct a

public enquiry into all matters associated with the demise of Hiland Insurance.

Mr. Speaker, today in the lobby of the hon. House of Assembly

there gathered a great number of citizens in the greater St. John's region who

have been not only inconvenienced, they are out of pocket tremendous sums of

money, and they have failed to get the necessary insurance protection that that

money was supposed to have bought. Today we have a petition which was put

together in the lobby of the House earlier this afternoon. I can assure hon.

members that this is just but one of a great number of petitions which will be

coming before this House if the Minister of Justice chooses not to act on the

prayer of the petition.

The minister said earlier this afternoon that he will see

what the government can do about this problem. On the television a few nights

ago he paraded the old caveat emptor scenario, buyer beware. He said to the

people, the 20,000 people who had bought those policies: You should have been

noticing if your insurance was only one-half of what you could have gotten

elsewhere, there you should have said, why is that so cheap? I should ask

questions about that. Why am I getting such a good deal from Hiland Insurance?

That is like going and saying to Dominion stores or to

Sobey's, if you can get your bread at half price, why are they selling it so

cheap and going and asking the other company why you got such a good deal.

Caveat emptor is one thing. It is part of the procedures we have in a free

enterprise economy. However, in this particular instance the government has a

legislative responsibility to regulate, to monitor, and to govern the affairs of

the insurance industry, and to ensure that these affairs are run according to

the laws of this Province.

What we've seen today in answer to the questions put forward

by the Leader of the Opposition is that government either knew or should have

known, either knew something was wrong or should have known that something was

wrong. Either one of these things says to the people of Newfoundland and

Labrador: The Minister of Justice, who is responsible for the actions of his

department, has failed in his responsibility and in the mandate that he was

given by the people of this Province to govern the affairs, to regulate the laws

and to assure the laws of this Province were regulated properly.

Now, Mr. Speaker, it has been presented here that the

principals of Hiland Insurance were in financial difficulty before. The Minister

of Justice said that he knew about it in advance, however, did he do any follow

up? Did he ask any questions? Did he bring the Superintendent of Insurance into

his office and ask: What is going on here? No. The answer is no.

Now, Mr. Speaker, in the lobby of the House today, we had the

example of people saying: We paid $150 in sales taxes on our individual

policies,' therefore, they paid not only for the insurance protection, they paid

taxes on these policies as well.

MR. SPEAKER: Order, please!

The hon. member's time has elapsed.

MR. HODDER: Will the minister and the government say to

these people, they will get some of that money back?

MR. SPEAKER: Order, please!

MR. HODDER: Thank you, Mr. Speaker.

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

MS. VERGE: Thank you, Mr. Speaker.

I wholeheartedly support this petition calling on the

government to have a public inquiry into the colossal failure of its insurance

regulatory system. A failure that has resulted in 20,000 Newfoundland and

Labrador insurance policyholders being without adequate protection, and many

claimants hurting. We have heard from some of the individuals adversely

affected, in the lobby today, at the demonstration.

We heard from a woman, Carol Whelan, who has been out of her

house, due to a fire, since September, and now, she can't get back in and is

threatened with eviction from her rented premises because the insurance proceeds

that were supposed to be paying for the house repairs are not forthcoming, and

the insurance proceeds that are supposed to pay for her rent in the interim have

dried up. In the lobby, at the demonstration, we heard from an elderly

gentleman, Mr. Bill Fry, who paid $500 for car insurance in September, less than

two months ago, and he can't afford to pay another $500 or $600 or whatever it

would cost to get substitute car insurance, so he is going to have to park his

car for the winter.

Mr. Speaker, the Minister of Justice may not appreciate the

extent of the damage that has been done through the collapse of Hiland Insurance

and through the failure of his regulatory system, but, Mr. Speaker, thousands of

individual Newfoundlanders and Labradorians and their families are hurting

because of this collapse. Many of those people simply do not have the

wherewithal to get replacement insurance and, Mr. Speaker, there has to be a

public inquiry to determine the causes of this failure, to determine whether it

is a function of incompetence on the part of the minister and his staff, whether

it is the result of negligence on their part. We are hearing that the minister

and his staff were warned well in advance.

After all, the principal had been involved with previous

insurance failures; this is a small Province, the insurance industry in the

Province is small, there are few players and the minister and his officials were

warned of the risk they were undertaking in issuing the license to Hiland in

January of 1993. The minister today confessed that a year ago, he received a

letter alerting him to the vulnerability of Hiland. He didn't act, and as

recently as late October, people paid hundreds of dollars in premiums, as it

turns out, for nothing, and it looks like now they are going to be expected to

pay the same or more money to get substitute insurance coverage, or they may

have to do without if they can't afford to do it.

Mr. Speaker, the Minister of Justice says that he can't order

the public inquiry now because of an ongoing police investigation and I accept

that, but there is nothing to stop the minister from telling us here and now,

that he will have a public inquiry just as soon as the police investigation is

concluded. Now, he can wait until he gets the police report before he announces

the formal terms of reference and names the commissioner, but here and now,

today, he can tell the public of this Province, and the insurance policyholders

and claimants who are hurting, that he and his government will have a public

inquiry to uncover what went wrong, to expose his own failing and that of his

staff, to show how the Premier and the Cabinet were implicated, to reveal who

they really were protecting. Were they protecting Mr. Gillingham and some

corporate interests and contributors to the Liberal Party?

SOME HON. MEMBERS: Hear, hear!

MS. VERGE: Were they neglecting the consumers and the

insurance policyholders? which is obvious.

Mr. Speaker, last Thursday at his press conference, the

Minister of Justice made the following ridiculous statement. He made the claim

that our regulatory process picked up the problem and we acted quickly to

protect the consumer. Well, how preposterous, how ridiculous!

Mr. Speaker, the minister had the gall to say on television

that the policyholders, themselves, were to blame because they should have been

suspicious since the rates were so low. Well, if the consumers were stunned, how

much more stunned is the minister -

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. member's time has elapsed.

MS. VERGE: - since the minister is the regulator, and the

minister had access to 'way more information than any individual consumer!

MR. SPEAKER: Order, please!

The hon. member's time has elapsed.

The hon. the Government House Leader.

MR. ROBERTS: Mr. Speaker, if I may say a word or two

about the petition -

SOME HON. MEMBERS: Oh, oh!

MR. ROBERTS: Mr. Speaker, if hon. gentlemen opposite wish

to speak, perhaps they should attempt to get the floor and follow the rules, but

since I have been recognized, perhaps they will let me speak.

I don't have a copy of the petition before me, I say to my

friend, the Member for Waterford - Kenmount, and the hon. lady, the Member for

Humber East.

MR. TOBIN: (Inaudible).

MR. ROBERTS: Mr. Speaker, if the Member for Burin -

Placentia West needs to void himself, perhaps he could leave the Chamber and let

the rest of us get on with it.

Mr. Speaker, I treat this matter very seriously, and I

believe that the House owes it to the men and women who are affected, and to all

the people of the Province, to treat it equally seriously, and that is what I

propose to do.

Let me deal first with this question of an inquiry. I think I

heard my friend, the Member for Waterford - Kenmount sort of semi-threaten by

saying: `Well, if you don't agree today there will be 1,000 more petitions.' My

answer is: Let the 1,000 points of light come forward. He has a right to present

a petition; he should feel free to present it - glad to hear him do so - but

what I will say is to repeat the government's position. If there is a need for

an inquiry, we shall have one.

MS. VERGE: And you don't see (inaudible) obvious.

MR. ROBERTS: Mr. Speaker, the government have not, as a

government, addressed this issue as yet, so I am not going to stand here and say

what the government are going to do. What I will say again is that if there is a

need for an inquiry, we shall have one. It is my judgement that there is nothing

to hide.

Mr. Speaker, I am glad that the hon. the Member for Humber

East has at least had the good grace to acknowledge the merit of the point I

made about the need to forego any civil inquiry, a Royal Commission or whatever

form it might take, until the criminal charges have been disposed of (inaudible)

charges laid, and there is no danger of prejudicing the right of an accused to a

fair trial. She may wish to communicate with some of her colleagues about that

because earlier they scoffed at that suggestion. She is the only lawyer on that

side of the House, leaving aside my friend, the Member for St. John's East, who

doesn't sit with the Opposition - at least physically. But she and I agree on

that, that we cannot have any comment or inquiry into that aspect until the

criminal matter is investigated. Now, whether or not charges will be laid is not

for me to decide. My decision was to refer the papers to the police, and I did

that as soon as I first saw them.

Mr. Speaker, let me deal with one or two other points that I

think are important. The hon. the Member for Humber -

MS. VERGE: (Inaudible).

MR. ROBERTS: Mr. Speaker, I didn't interrupt the Member

for Humber East. If she doesn't have the good manners not to interrupt, let her

at least observe the rules of the House. Let her not act like sort of an unruly

little child.

Mr. Speaker, the hon. lady raised one or two individual

cases. I don't want to get into any individual case, but I would like to address

a problem that at least one of these people has, and that is an individual who

has a claim under a fire policy and has not had that claim paid, and I

understand that is causing some difficulties with that individual, and with any

other individual in the same case.

What I am assured is that the PACIS will respond to those

claims. They had a meeting today by telephone of their board nationally and they

have agreed to accept the claim put forward by the liquidator, Mr. Kirby, with

whom I spoke just before I came into the House. He participated in this board

meeting in part by a conference call. The PACIS have agreed to accept the claim

put forward by the liquidator against PACIS in respect of Hiland. The claim of

that particular lady she mentioned, I am told, will be honoured in accordance

with the PACIS policy, which is $200,000. I have no idea what her claim was but

I suspect a house claim would be less than $200,000.

There is then a problem with cash flow because the fire was

some time ago and she, I understand, had engaged people to get on with repairing

her house, and then she has been told by the liquidator: `Well, we don't know

when we are going to get the money.' Of course, that puts her in a difficult

position. That I will address and see what can be done. I will have to speak to

the liquidator, I will have to take counsel from my own lawyers.

The matter is fraught with difficulties. The House should

know, perhaps, that Mr. Gillingham has appealed against the order I made

removing him from the management of the company. I have to deal with that.

Because under the act, which has been on the books for many years, the appeal is

to the Minister of Justice. Now, that is a difficult position, but I have one

set of lawyers advising me on that. The superintendent of insurance has another

set of lawyers downtown, a fine firm, Mercer, Benson, Myles - Mr. Wayne Myles;

he is advising the superintendent and the liquidator.

MR. SPEAKER: Order, please!

The hon. minister's time has elapsed.

Does the hon. the Member for St. John's East -

SOME HON. MEMBERS: By leave.

MR. ROBERTS: Okay, I thank my hon. friends.

MR. SPEAKER: Order, please!

Does the hon. minister have leave to continue?

SOME HON. MEMBERS: Agreed.

MR. SPEAKER: Yes, leave given.

MR. ROBERTS: I will only take a second or two. What I was

saying is that Mr. Gillingham has appealed against my order, the order of 3

October, taking him out of the management of this company. So we are dealing

with that.

AN HON. MEMBER: You just said that.

MR. ROBERTS: I know. That is what I said before I was

interrupted. We have a criminal investigation under way; the liquidator is

coming in and learning as he goes. When the superintendent went into possession

of the company on 3 October, he was not aware of the insolvency. I can tell you,

at the end of October he was aware. I've just been re-reading the affidavit

which he filed with the Supreme Court on 4 November, in which he sets out what

he knew and when he learned it.

AN HON. MEMBER: When (inaudible)?

MR. ROBERTS: I beg your pardon?

AN HON. MEMBER: When (inaudible)?

MR. ROBERTS: According to his affidavit, very shortly

before he filed it. A day or two or three before he filed it. It was dated, I

believe, 4 November. It is a public document. The hon. gentleman could get a

copy of it from the court. It is the application for insolvency on which the - I

forget which judge it was, but a judge of the Trial Division ordered the company

insolvent.

MR. SULLIVAN: You were aware of what was happening

(inaudible).

MR. ROBERTS: Mr. Speaker, I was aware in December 1993

that a company had raised some concerns and the superintendent addressed those

fully and satisfied himself. The superintendent -

MR. SULLIVAN: (Inaudible).

MR. ROBERTS: Mr. Speaker, the hon. gentleman, the Member

for Ferryland, feels if he interrupts rudely he will somehow be able to take

over the debate. What I say to my friend, the Member for Ferryland, is that the

superintendent addressed those questions fully and completely and satisfied

himself.

My instructions to the superintendent were simple. I'm

reading now from a Minute I sent him on January 21 1994: `I share your concerns.

My instructions are simple and straightforward. Please do whatever is necessary

to ensure that the interests of those who placed business with Hiland are

protected properly and fully.'

Now, what I cannot tell the House - I can go on to read the

rest of this: The company must - and I underline the word "must" - maintain an

adequate capital base and it must - and I underline the word "must" - secure

adequate reinsurance. One can read into that, the concerns at that stage, Sir,

were capital base and reinsurance. I went on: `We shall have no choice except to

suspend its operations at once should it fail to meet both requirements.'

MR. SIMMS: (Inaudible).

MR. ROBERTS: `Please keep me informed of developments as

they occur.'

MR. SPEAKER: Order, please!

MR. ROBERTS: Now, Mr. Speaker, those were my instructions

to the superintendent.

MR. SPEAKER: Order, please!

I think the hon. the Leader of the Opposition wants to be

heard on a point of order.

MR. SIMMS: Mr. Speaker, we gave leave to the hon.

minister in the hope that he had some additional new information to pass along

to the policyholders and the people who are concerned. Nothing he is telling us

now is new. But he did say earlier, with respect to the Minute that he just

quoted from, that he would table it. Perhaps if he could table that, at least we

would all have access to it. We could read it for ourselves without having to

listen to the hon. minister read it, because it is probably fairly lengthy. He

did say he would table it. I would like to ask him under the point of order to

do that now, and he can continue to give us new information if he has any.

MR. SPEAKER: Order, please!

Is the hon. the Leader of the Opposition prepared to permit

the minister to continue?

The hon. the Minister of Justice.

MR. ROBERTS: I will conclude my remarks by simply saying

I ask leave to table a document, which is a copy initialled by me of a directive

I made to the Superintendent of Insurance dated January 21, 1994. Now, this

happens to be the only copy I have here so I ask if the Clerk would arrange to

have a copy come back to me at the end of that.

Thank you.

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

MR. HARRIS: Thank you, Mr. Speaker.

Mr. Speaker, the minister will have another opportunity to

speak because I have another petition on the same issue to the House of

Assembly, noting the great hardship caused by the clients of Hiland, and asking

that the government institute a public inquiry into all matters associated with

the demise of Hiland Insurance.

Now, if the minister takes the position, and he appears to

have done so publicly, that this is a case of the buyer having to beware, then

he is ignoring the fact that this is a regulated industry where the fact of the

matter is that it is because the buyer is unable to be aware of the intricacies

of the operations of an insurance company, is unable to know what is going on

behind the scenes and what kind of product they are buying, that there is a

regulated industry here. If the minister is saying that an individual out

shopping for a policy and going around getting a rate ought to beware when he

finds out that somebody's rate is cheaper than another, what was the minister

doing? If the buyer is supposed to figure all this out, why couldn't the

minister, and the minister's officials, the minister's lawyers, and all the

people he says he relies on, follow up on and regulate this industry?

Clearly, Mr. Speaker, unless the buyer is supposed to go out

and shop around for the highest price, as the minister said, if you go for the

highest price, then you are sure it will be okay, but if you go for the lowest

price, which the competition is supposed to tell us, obviously, you should

beware because this regulated industry that the minister is supposed to be

looking after could fail.

Now, Mr. Speaker, either one of two things, either the laws

and the regulatory procedure are inadequate, or the minister's actions are

inadequate. Either the laws and the regulations aren't satisfactory to safeguard

the policyholders, or the minister has failed his duty, or his officials have

done so. That is a question that deserves to be answered and these individuals

who have suffered as a result of this failure have a right to have those

answers.

Mr. Speaker, we all recognize that the laws of the land as

interpreted by the courts require that these procedures be followed in an

adequate and a proper order. And if the minister has had cause to send this

matter for investigation by the RCMP, well, then, that ought to take its course

and hopefully it will be speedy, although the record of police investigations

into commercial matters is not one of swift return of results.

In the meantime, we have heard allegations that even after

the license was cancelled, premiums were being accepted by Hiland, and that is a

very, very serious matter. I don't know how this was able to occur - perhaps the

minister can comment on that.

Another point, too, that I think the minister ought to

clarify for the current policyholders of Hiland, and this is not in the area of

the property and casualty, or the homeowner insurance, but in the automobile

insurance side of things, the minister has suggested - and this is something

that perhaps should be clarified in the midst of all this barrage about losing

their premiums. Could the minister confirm what his press release, issued

through Newfoundland Information Services the other day said, those individuals

who have automobile policies they purchased with Hiland, are advised if they

continue to make their monthly premiums, or leave their business with Hiland,

that they will be covered up to a maximum of $200,000 on claims. That is the

advice that I saw on the Newfoundland Information Service press release issued

by the minister. I think that is very important, Mr. Speaker.

We see advertisements in the papers, we see the competitors

and the various other insurance agents looking for the business of the Hiland

customers and they appear to be offering to replace the $200,000 policies as

well as adding others. Will the minister tell those people that those policies

they have now under $200,000, will still be honoured, that they don't have to

take their chances on maybe or maybe not getting their premiums back, that that

$200,000 policy is still good because it is guaranteed by the industry policy?

Because there are people who have bought policies (inaudible).

MR. SPEAKER: Order, please!

The hon. member's time has elapsed.

MR. HARRIS: Perhaps the minister can deal with that

question when he rises.

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

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

I stand to support the Member for St. John's East petition

dealing with the Hiland Insurance bankruptcy situation. I am surprised today to

learn from the Minister of Justice that he became aware of this situation in

December, 1993. Two Saturdays ago in The Evening Telegram I called for a

public inquiry into this situation and the minister stated in The Evening

Telegram then that it was nonsense, no need of it, none whatsoever, that his

officials, he himself and the government that he represents acted quickly and in

an appropriate manner.

Now, Mr. Speaker, however you wish to address this situation,

the reality is this, 20,000 people of this Province were ripped off and were

robbed by an insurance, businessmen in this Province - an insurance industry,

Mr. Speaker, that was supposed to be regulated by the Provincial Government.

Now, the minister has just tabled - if I can get the minister's attention for a

second - the minister has just tabled a letter that he sent to Paul Tapper. He

said, `Thank you for your Minute about the situation with Hiland Insurance

Limited.' Now, let me ask the minister of Justice, the Attorney General, this:

Would he table the Minute that Paul Tapper sent him, dealing with the Hiland

Insurance Industry Limited? Because all we see here is a thank you letter from

the minister to one of his officials. What we really need to get at, Mr.

Speaker, is when Mr. Tapper became aware and informed the minister of this

situation, because therein lies the rotten egg, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. E. BYRNE: Therein lies the real answers to the

questions that we seek in the House today, and therein lies the answers to the

questions that 20,000 people, fellow-Newfoundlanders and Labradorians, seek to

this answer here.

Now, Mr. Speaker, another situation in which the minister

said he is convinced that his officials acted appropriately. Why then did Mr.

Tapper not pursue with Hiland Insurance to have them put their financial

statements on the line, when they should have done it three months previously?

Knowing full well the situation that had been brought to his attention, why was

he so comfortable in giving Hiland Insurance the benefit of the doubt before he

accepted their financial statements? That is a question that he must answer and

that the minister must answer on his behalf.

Another issue that must be dealt with, which was referred to

by the Member for St. John's East, is that Hiland Insurance accepted premiums up

until the day it was closed, Mr. Speaker. People who spoke to the Director of

Insurance, Mr. Tapper, asked him as late as October 10: `Should I renew my

policy with J. J. Lacey? Is that company in trouble? Will I lose my money?' The

answer from the Director of Insurance was no, it was safe for them to proceed to

pay their premiums. People at that time, as late as October 10, as I can

determine from my own constituents, some paid $1,500 for the entire year,

October 10. Some paid $2,500 in the middle of October for the full year's

premium. And this government stood by, held their noses, while a company like

J.J. Lacey and, in particular, Hiland Insurance, robbed the people of this

Province. There is no excuse, Mr. Speaker, for this minister to stand up and say

he does not have enough evidence to call for a public inquiry. As the Member for

Humber East said, there is no reason why he cannot commit today, to this

Legislature and to the people affected, that he will call a public inquiry once

the criminal investigation has been completed. Why he will not do that is beyond

me and it is certainly beyond the 20,000 people affected. Thank you.

SOME HON. MEMBERS: Hear, hear!

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

MR. ROBERTS: Thank you, Mr. Speaker.

Mr. Speaker, I have already dealt with the situation of the

public inquiry and there is nothing I can usefully -

MR. SPEAKER: Order, please!

MR. ROBERTS: - there is nothing I can usefully add to

that so I won't attempt to say anything more on that point for the moment; but I

do want to take issue with my friend, the Member for Kilbride, who has been

unwittingly misinforming the House. He said I made a comment of nonsense and

that is correct, with a respect to a comment of his, and that is correct; but

his comment was, that I knew about the troubles or whatever they were and the

Cabinet knew about the troubles, I forget his exact -

MR. E. BYRNE: On a point of order, Mr. Speaker.

MR. SPEAKER: Order, please!

MR. E. BYRNE: The Minister of Justice in Question Period

today -

MR. SPEAKER: Order, please! Order, please!

The Chair has not recognized the hon. member yet.

MR. E. BYRNE: On a point of order, Mr. Speaker.

MR. SPEAKER: The hon. the Member for Kilbride, on a point

of order.

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

The Minister of Justice confirmed my suspicion today in

Question Period when he acknowledged that he received information in December,

1993. If there was any comment that was nonsense, Mr. Speaker, it was his and

not mine.

MR. SPEAKER: Order, please!

There is no point of order.

The hon. the Minister of Justice.

MR. ROBERTS: Mr. Speaker, that is typical of Byrne

Secundus. He just doesn't know the rules and he doesn't know what he is saying

most of the time, and he insists on proving it. Now, what he said in The

Evening Telegram was that the Cabinet or myself, or both, were aware of this

thing several months ago and the inference was: we were `covering up', to use a

word he likes. The only thing he should cover up is his head in shame and

confusion.

Now, let me come back to my friend, the Member for St. John's

East, who did make some sensible points, unlike the Member for Kilbride, and

there are a couple of points to which I would like to respond. First of all, I

thank my friend, the Member for St. John's East for the acknowledgement that we

cannot hold an inquiry into this in the civil side until we have dealt with the

criminal side of it. My instructions to the RCM Police are to get on with the

investigation and to do it as quickly as they can. That is all I can possibly

instruct them to do and that is all I intend to instruct them to do.

He also asked about the license being cancelled and premiums

being accepted. It is correct, in my understanding, that the superintendent,

when he went in to the management of the business on 3 October, through his

agents continued to accept premiums and he did so until the time when he became

aware that the company was insolvent.

MR. E. BYRNE: (Inaudible).

MR. ROBERTS: Now, Mr. Speaker, the Member for Kilbride,

if he, too, wants to void himself, should go to the proper place and not make a

spectacle of himself in the House of Assembly.

Mr. Speaker, let me come back. I treat this matter seriously

and I ask hon. members opposite to do the same. The matter of acceptance of

premiums is one that will have to be dealt with in the appropriate time. It is

correct.

Now, my friend, the Member for St. John's East, who is not

listening to the answer but presumably will get it from Hansard if he is really

interested in having the answer, asked about the $200,000 limit provided by

PACIS, and my understanding is that a person who is insured with Hiland - now,

not all of it is written by Lacey or the central - the other one was with

Hiland, a large part of it was, some was with other insurers and that is not

affected by this. The business placed with Hiland, however, the policies will be

honoured up to the $200,000 limit imposed by law for a claim, to use the legal

term, a cause of action arising before the cut-off date.

Now, the cut-off date is not yet set. It is to be set by the

court and it will be set, I understand, at a time not later than forty-five days

from the declaration of insolvency. And the reason for that period is, after

insolvency, it gives the individuals an option to go out and effect other

insurance. So, if somebody is insured with Hiland and had an accident on 5

October that rendered that person liable legally to pay damages to another

person, and then the insured person looked to his or her insurer, Hiland, to

compensate them, to indemnify them within the limits of the policy of 200k, my

understand is, that will be done. That is the same as with the lady who had her

house burned and made a claim under her property insurance policy.

Now, I would also say to my friend, the Member for St. John's

East, that in my judgement, he has it right when he says one of two things

happened or, one of three things happened. Either the regulatory scheme is

inadequate - that may be the case. The regulatory plan, scheme, arrangement or

whatever you want to call it, that is in place in this Province, I am told, is

the same as that in place throughout Canada, it is the same as has been in place

throughout all of the last ten or fifteen years. It may be inadequate. I am not

able to render a judgement on that at this time.

MR. E. BYRNE: May I put a question?

MR. ROBERTS: No. Mr. Speaker, I am not interested in

questions from Byrne Secundus. Don't trouble me, I say to him, when I am trying

to deal with serious matters raised by serious members.

MR. SPEAKER: Order, please!

The hon. member's time has elapsed.

MR. ROBERTS: So soon!

MR. SPEAKER: Order, please!

Orders of the Day

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

MR. ROBERTS: Mr. Speaker, if I may I would ask if Your

Honour would be good enough to call Motions 3 through 9, Sir.

Motion, the hon. the Minister of Finance to introduce a bill,

"An Act To Amend The Pensions Funding Act," carried. (Bill No. 35)

Motion, the hon. the Minister of Fish, Food and Agriculture

to introduce a bill, "An Act To Amend The Fish Inspection Act," carried. (Bill

No. 33)

Motion, the hon. the Minister of Education and Training to

introduce the following bills:

"An Act To Amend The Teachers' Association Act," carried.

(Bill No. 37); and

"An Act To Amend The School Trustees' Association Act,"

carried. (Bill No. 29)

Motion, the hon. the Minister of Municipal and Provincial

Affairs to introduce a bill, "An Act To Amend The City Of Corner Brook Act And

The City Of Mount Pearl Act," carried. (Bill No. 40)

Motion, the hon. the Minister of Environment to introduce a

bill, "An Act To Amend The Waste Material Disposal Act," carried. (Bill No. 34)

Motion, the hon. the Minister of Justice to introduce a bill,

"An Act Respecting Advance Health Care Directives And The Appointment Of

Substitute Health Care Decision Makers," carried. (Bill No. 41)

On motion, Bill Nos. 35, 33, 37, 29, 40, 34 and 41 read a

first time, ordered read a second time on tomorrow.

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

MR. ROBERTS: Mr. Speaker, before I ask Your Honour to

call the order of business that we will be debating today, perhaps I could be

allowed a minute to report to the House on the results of the consultations and

enquiries made overnight about Private Members' Day tomorrow.

My information, which comes from the Clerk, and I believe is

acknowledged by the Member for Grand Bank, the House Leader for the Opposition,

is that on Wednesday, 25 May - these are Wednesdays - we debated a motion put

down by the Member for Placentia, which would obviously be an Opposition day. On

Wednesday, 1 June, we debated one that stood in the name of my friend, the

Member for St. John's North, which was obviously a government day. That would

make 8 June, in the normal course, an Opposition day; however, by agreement

among the two parties and the Member for St. John's East, who is not a party

although he represents one - in fact, he may be the party, I understand - but

among the three of us, it was agreed that on 8 June, we would have a

foreshortened debate on the Newfoundland Pony, where there was unanimity among

the Members of the House, and we would then go on to deal with government

business. So, in my understanding, that makes the next Private Members' Day,

i.e. tomorrow, an Opposition day, and I understand that my friends opposite wish

to debate the motion in the name of my friend, the Leader of the Opposition. So,

assuming Your Honour concurs, that will be the motion debated tomorrow.

With that said, I would ask if we could deal first with a

bill that stands in the name of my friend -

MR. SPEAKER: Order, please!

The hon. the Opposition House Leader.

MR. W. MATTHEWS: I don't want to take time to interrupt

too much before we get to Orders of the Day, because I know we want to get on

and do some government business.

I was tempted to rise yesterday, but in light of the

emergency debate on the Marystown shipyard situation, I didn't do it. It is a

matter that I ask Your Honour to consider. Just a few weeks ago the Premier

announced a number of appointments for some of the private members opposite, and

in so doing, he appointed the Member for Bellevue, who is the Assistant Deputy

Speaker, to be a legislative advisor to the Minister of Education and Training.

Therefore, that questions the impartiality of the Member for Bellevue to be able

to sit in the Chair. As a legislative advisor to a member of the Executive

Council, I would submit to Your Honour that that takes away the impartiality of

the Member for Bellevue, and that he really cannot sit in the Chair.

AN HON. MEMBER: You have to be kidding!

MR. W. MATTHEWS: No, I am not kidding, I say to the

minister of - what is it now - `minister of get around', `minister of rickshaws

and hot baths'.

Mr. Speaker, I submit, and I ask you to take it under serious

consideration, whether or not now the Member for Bellevue can rightfully take

his place in the Chair as assistant Deputy Speaker. I submit to Your Honour that

he can't. Because, as an advisor to a minister, a member of the Executive

Council, certainly, he cannot be impartial. It is no reflection on the Member

for Bellevue. That is not the intent whatsoever, but we can't have a

parliamentary assistant or a legislative advisor or any such person, sitting in

the Chair of this House proceeding, watching and observing and running the

affairs of this House if he is not impartial.

I submit to Your Honour that the Speaker or yourself take

this under serious consideration and rule accordingly before the Member for

Bellevue attempts to sit in the Chair again.

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

to the point of order?

MR. ROBERTS: Mr. Speaker, I want to speak to the point of

order if I may, Sir, yes.

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

MR. ROBERTS: Mr. Speaker, I share the hon. gentleman's

view that this is an important matter and I certainly do not fault him for

raising it publicly, but I would like to say a word or two to it.

My friend, the Member for Bellevue, has accepted an unpaid

position. The legislative advisors are not paid.

MR. SIMMS: That is irrelevant.

MR. ROBERTS: The Leader of the Opposition should try to

observe the rules of order. He is being rude and he is interrupting -

MR. SPEAKER: Order, please!

MR. ROBERTS: - and that is out of order.

MR. SIMMS: You are lecturing me (inaudible).

MR. ROBERTS: Now, Mr. Speaker -

MR. SPEAKER: Order, please!

MR. ROBERTS: Mr. Speaker, I will gladly hear what my

friend, the Member for Grand Falls has to say when he is recognized by the

Chair. I heard my friend, the Member for Grand Bank, raising a matter and I

would ask the same courtesy in return.

Now, Mr. Speaker, the point I'm making is that the hon.

gentleman, the Member for Bellevue, accepted a position as an unpaid advisor. In

other words, he is not a member of the Ministry. The Order in Council that

establishes this position and the three other comparable positions makes it

quite clear that these - they are all gentleman; none of the lady members are

involved - all four of these members are not members of the Ministry. They are

not even in the position of my friend, the Member for Eagle River, who is in the

position I held many years ago, Sir, semi- in the Ministry -

AN HON. MEMBER: `Go-fer'.

MR. ROBERTS: I would rather be a `go-fer' than a `gone

for', as are some of the gentlemen opposite.

Mr. Speaker, the point is, the hon. gentleman, the Member for

Bellevue, has accepted an appointment under which he renders certain advice and

performs certain services to my friend and colleague, the Minister of Education,

and I suggest that is appropriate.

Now, whether or not he should sit in the Chair of the House

is a matter for the House to decide, not on a point of order. There are other

mechanisms to raise it. I would point out that the traditions of this House and

any other comparable House of which I'm aware, are that the Speaker takes no

part in the debates of the House but that the Deputy Speaker and the Deputy

Chair of Committees, the other two Table officers, the permanent Table officers

of the House, have seats in the House, speak in debates, vote in debates,

participate in the affairs of the House, in the same way as any other member.

Only the Speaker withdraws himself from debate.

The Speaker has no desk in this House except the Speaker's

Chair. He does not speak in a debate, to make a ruling or what have you, he

takes no

part in debate, and he votes only to break a tie. So, I would suggest

that my friend, the Member for Bellevue, is consistent with the traditions of

this House, consistent with the rulings of this House, consistent with the

spirit of this House. I suggest accordingly, there is no point of order, and if

my hon. friend, the Member for Grand Bank, wishes to raise it in another forum,

we can deal with it in another forum. But I suggest there is no point of order

before the House. I could tell my friend outside the House some ways in which he

could raise it, as a matter of privilege, possibly, or when the Deputy Chair of

Committee takes the Chair, he could raise a challenge there in the normal way.

I submit, Mr. Speaker, there is no point of order before the

House now.

MR. SPEAKER: The Chair will take the point raised by the

hon. the Member for Grand Bank under advisement and report back to the House.

MR. SIMMS: Mr. Speaker.

MR. SPEAKER: Does the hon. the Leader of the Opposition -

MR. SIMMS: On a point of order.

MR. SPEAKER: A new point of order?

MR. SIMMS: Yes. Since Your Honour is taking notice of the

point of order raised by the Member for Grand Bank, just so this matter is not

dismissed lightly - not suggesting Your Honour would dismiss it lightly - but

not dismissed lightly, because it is not truly in the technical sense a point of

order, I will raise a point of privilege, if I may.

It is related to the same issue but I will try to give Your

Honour some citations that will assist Your Honour in consideration of this

point. Now it is all fine and dandy for the government House Leader to stand in

his place today and make the arguments that he made. I would have expected him

to make those very arguments quite frankly.

The reality is, Mr. Speaker, that the individual that we are

talking about and while we are not talking about the individual personally, we

are talking about the Member for Bellevue who has accepted a position as a

legislative advisor, I think it is called now-a-days, other days it has been

called parliamentary assistant and so on, to a member of the Executive Council,

to a Cabinet minister and that is quite different from merely helping a minister

in carrying out his duties and so on. In fact, I suspect the only difference in

this particular case is the fact that the member is not receiving remuneration

as a legislative advisor. The intent clearly is to give that individual and the

other individuals appointed, a chance to have some input into the process. A

chance to be close to the scene, perhaps groom them as potential ministers and

all the rest of those kinds of realities.

To serve as a legislative assistant or legislative advisor,

from my perspective, eliminates that individual as a candidate to occupy the

Speaker's Chair on a regular basis in the same way Your Honour does as Deputy

Speaker. I do not think Your Honour for one moment, would not consider it to be

a conflict if he had accepted a legislative advisory position to a Cabinet

minister as well. I just do not think that that would be appropriate.

In the case of the Member for Bellevue, we have an individual

who is known as the Deputy Chairman of Committees but I guess in the eyes of

many he is really the Assistant Deputy Speaker because he is regularly occupant

of the Speaker's Chair. So I would argue very strenuously that this position

should be filled by someone who has no direct partisan interest other than being

a member of the party and the Speaker is that, but who is able to put forth

impartially when it is required. Here is the quotation, Mr. Speaker, I want to

give you for consideration because we all know the Deputy Chairman of

Committees, as with the Deputy Speaker, according to Beauchesne, paragraph 185

in the 6th Edition, it says that the Deputy Chairman, "is entitled to exercise

all the powers vested in the Chair." Now that is considerable power when you are

sitting in the Chair and you are asked to look after the debates and chair

debates in a highly spirited partisan forum like a legislative assembly.

In addition to that, there are many other references in

Beauchesne, paragraph 178 talks about the Deputy Speaker being replaced by any

member of the House from time to time. If this is the case the assistant deputy

or Deputy Chairman of Committees "shall perform the duties and exercise the

authority of the Speaker." Shall continue to perform the duties and exercise the

authority of the Speaker and so on and that authority is considerable. That

individual has the authority to name a person in the House of Assembly, has the

authority to call to order any member who is irrelevant or he may think is out

of order, and if he is party to partisan information, as a result of this

position of a legislative advisor to a Cabinet minister, then I am not sure we

would not have to question his impartially. I think that is at the nub of the

argument, not the individual but the person who would accept such an

appointment.

Mr. Speaker, in particular, if I may, I would refer Your

Honour to the

section in Beauchesne's 6th Edition, beginning in paragraph 167

and 168, particularly 168, "The chief characteristics attached to the office of

Speaker, or in his stead" - I would read from that the Deputy Speaker or the

Assistant Deputy Speaker, Deputy Chairman of Committees -

AN HON. MEMBER: (Inaudible).

MR. SIMMS: Oh yes it does. You go on to read it and it

does say that. "... authority and -

AN HON. MEMBER: Paul Dicks will show you.

MR. SPEAKER: Order, please!

MR. SIMMS: - impartially are the chief characteristics of

the individual that occupies that Chair." Mr. Speaker, "authority and

impartially." So, Mr. Speaker, it goes on to say and here is the key quote, "

Confidence in the impartiality of the Speaker is an indispensable condition of

the successful working of procedure, and many conventions exist which have as

their object, not only to ensure the impartiality of the Speaker but also to

ensure that there is a general recognition of that Speaker's impartiality."

Now, I would have to submit to, Your Honour, from what you

have heard today alone in my friend for Grand Bank's point of order, as well as

my point of privilege, that there is concern about the impartiality of this

particular person occupying the position that he does now occupy as a

legislative advisor and sitting in the Chair. If there is that concern about the

impartiality then I would think Your Honour would have no choice but to suggest

to the Premier and to the government of the day that because this concern and

lack of confidence exists, clearly it exists in the impartiality of that

individual, that the government should appoint somebody other, or else the

individual can resign one or two of the positions, and that would create another

fiasco.

That would be the submission I make to Your Honour and I hope

Your Honour will take that under advisement as well.

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

MR. ROBERTS: If I may say just word on the point of

privilege raised by my friend for Grand Falls. Perhaps the hubbub could be a

little less hub and a little more bub.

Your Honour, I do not want to be overly technical but we are

into a technical area that is hypothetical. Your Honour may still wish to take

the matter under advisement and to address it because at some point it will

become real.

My friend for Grand Falls is casting, in my view, an

incorrect gloss on the matter. The Speaker of the House is a unique officer

holding a unique office. There are all sorts of conventions, customs, and

traditions, there are some constitutional requirements and there are some

requirements in the rules of this House. No other officer of the House,

including the two table officers, the Deputy Speaker and the Deputy Chair of

Committees, the Deputy Speaker being the Chair of Committees, no other officer

of the House is in that position. They do, however, have an obligation to be

impartial. My friend for Grand Bank read from Hansard and he skipped around a

bit. He read what suited his cause.

Let me read him another citation that he no doubt did not

come to when he was reading in Beauchesne. A selective quotation you know is

always a dangerous thing. I will read all of

Section 188 that appears on Page 54

of the same edition from which he was citing.

"Precedent has been created to the effect that incumbents of

the Chair will refrain from speaking in debate." Incumbents of the Chair

certainly should not speak. It would be most improper I suggest, Sir, for you to

speak in debate while you are in the Chair.

However, the Speaker has ruled that clear restraints are

imposed by the House only on the Speaker. Now, it is up to the House to

determine its rules and its application. It is up to the members of the House to

decide whether a member is partial or impartial. If any member of the House

feels that the Chair, whoever occupies the Chair, is acting improperly then that

member has a remedy. If I remember, I think I once brought in a motion of

censure against the Member for Grand Falls while he was in the Chair on the

ground that he was partial. That was my recollection. I can look it up in the

Hansard.

Mr. Speaker, the point I make is (

a) there is no point of

privilege and (

b) there is nothing in the rules, or the customs, or the

traditions, or the conventions of this House, or in my submission any other

House, that renders the gentleman for Bellevue incapable of accepting an

invitation to serve as an unpaid legislative advisor. He is not a parliamentary

secretary.

MR. SIMMS: It is the same thing.

MR. ROBERTS: My friend for Grand Falls thinks it is the

same thing. It is not, Mr. Speaker. The parliamentary secretary held a whole

specific (inaudible), there was a raft of them. There were five or six of them.

They were called parliamentary secretaries.

There was a statute.

MR. SIMMS: There were four, same as legislative advisors.

MR. ROBERTS: Mr. Speaker, there was a raft of them. They

were paid handsomely. They were quasi-ministers.

MR. BAKER: That is all the back benchers you had too.

MR. ROBERTS: Yes. My friend for Gander reminds me, that

is all the back benchers there were in those days. Mr. Speaker, the point is

that the legislative advisors are not comparable to parliamentary secretaries,

they are not appointed under the authority of that statute, they don't hold an

office in the way in which the parliamentary secretaries did, and they can't be

compared too far.

It is for the gentleman for Bellevue to decide whether he can

do both positions or not. I'm not here to speak for him; he is not here in the

House at this moment to speak for himself. All I can say to Your Honour is

whether you wish to deal with the matter or not is for Your Honour to decide. I

would suggest, Sir, it is a matter that at best should be taken under advisement

and then dealt with in the appropriate way and at the appropriate time. Thank

you.

MR. SPEAKER: The Chair will take the matter raised,

consider it and report back to the House at the earliest possible time.

Orders of the Day

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

MR. ROBERTS: Mr. Speaker, if we finally at 3:36 p.m. got

to the Orders of the Day, let us ask if you would be good enough, Sir, to call

Bill No. 30, which is Order No. 13, the second reading of

An Act To Amend The

Highway Traffic Act. My friend for Port de Grave has been waiting impatiently

and anxiously, to use his word, since I believe last June to introduce this

bill. If it is in order, Sir, I would ask you to call the bill.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

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

Highway Traffic Act". (Bill No. 30)

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

Transportation.

MR. EFFORD: Thank you, Mr. Speaker. It gives me great

pleasure to finally, I say finally, be able to have the opportunity as Minister

of the Department of Works, Services and Transportation to introduce to this

House the enabling legislative framework, to bring in amendments and new

legislation to improve highway safety, which I think, from a number of areas in

the Province, and from a number of different groups - they've been lobbying long

and hard to deal with highway safety and for government to place more emphasis

on drinking and driving.

Since putting this legislation together and the research done

by the departmental officials, I've had a number of people come to me and make

some comments and to say: Why are you doing this? Why would you bring in

legislation where 0.5 alcohol blood level would deter anybody, stop anybody,

from driving a vehicle? It is not an impediment to highway safety or to the

driving. I'm saying to the individuals of this Province: We are not saying to

you where you can drink - drink a barrel if you want to, and drink any amount

you want to. What we are saying to the individuals of the Province is: You

cannot drink and drive.

I think that is the key factor here, the drinking and

driving. I've looked at the accident statistics of any given year and I've

brought some along to the House just to point out. I want to point out a couple

of things here. In 1993 we had 113 alcohol-involved property damage accidents,

129 alcohol-involved injury accidents - sixteen of those accidents were fatal

accidents - 217 were alcohol-involved injuries, and twenty were alcohol-involved

fatalities. In most cases there are all sorts of readings, from 0.5, 0.6., 0.7,

0.8, and we can read it. The point here is not the reading we are talking about,

the amount, the reading, the point here is the amount of alcohol contained in

the blood level of anybody driving.

Considerable research has been done on this right around the

country, right around North America, and from all the experts worldwide. This is

not something new being introduced in the Province of Newfoundland only. This is

being introduced right across Canada. Many other provinces across Canada are -

AN HON. MEMBER: How many provinces?

MR. EFFORD: I have a list of the provinces. If I remember

correctly, I think eight of the provinces have brought in this legislation.

AN HON. MEMBER: A good guess.

MR. EFFORD: I am guessing, because I don't have it here.

I will find it in a second.

Mr. Speaker, I just can't imagine anybody in this Province

arguing against improving highway safety, arguing against any agency or the

government bringing in new legislation to prevent people from drinking and

driving. I wonder what point the Member for St. John's East is trying to make.

In bringing in this new legislation - it is not going to be a

criminal offence, in introducing this new legislation twenty-four hour roadside

suspension. It is a regulation that we are bringing in under the Highway Traffic

Act. We are going to establish the framework to suspend, for twenty-four hours,

the driving privileges of any person apprehended driving a motor vehicle with

fifty or more milligrams of alcohol in 100 millimetres of blood.

If any one individual is caught with .05 alcohol blood level,

they will lose their licence for a twenty-four hour period. At the end of the

twenty-four hours they would have to pay a fee of $100 to get their licence

reinstated, so they are not only losing the ability to drive their vehicle for a

twenty-four hour period, but it is also going to cost $100 to get their licence

reinstated.

Secondly, if any individual loses their licence three times

during a twenty-four month period - in other words, if they get three roadside

suspensions for a twenty-four month period - they would then lose their licence

for a two month period. I suspect that anybody who would lose their licence

three times in twenty-four months, it is not hard to realize that they certainly

must have a drinking problem, because once is often enough to get caught driving

while under the influence of alcohol.

There are a number of other things that are going to be

brought in in relation to this suspension. The other one is that the two other

amendments we are bringing in while introducing this piece of legislation is

that the fine for parking in a disabled parking area without a permit has

increased from $20 to $45.

Also, we need to make some other changes to the Highway

Traffic Act because we are bringing in the new photo driver's licence. That is

another change I want to implement.

AN HON. MEMBER: In the same bill?

MR. EFFORD: In the same bill.

AN HON. MEMBER: (Inaudible).

MR. EFFORD: That has to do when I introduced the ID one,

but it has to be changed in the Highway Traffic Act because the present driver's

licence requires a signature; you have to sign it. Under the photo driver's

licence you can't do that, so you have to amend the Highway Traffic Act because

of that, to remove the concept of endorsement of the licence. It is just

housekeeping that has to be changed in doing this.

Mr. Speaker, I have had a number of letters from a number of

groups of people around the Province to ensure, and the people who were

concerned about introducing this new piece of legislation, and one of the groups

that I want to make particular reference to has played a very important role,

and that is Moms Against Drinking and Driving. You all know about the -

AN HON. MEMBER: (Inaudible).

MR. EFFORD: Pardon?

AN HON. MEMBER: Mothers Against Drunk Drivers.

MR. EFFORD: I am sorry, drunk drivers. Mothers - well,

moms, mothers, it is drunk driving.

In fact, just today I received another letter which reminded

us of the incident back in 1991 where a young girl in Labrador was killed by an

impaired driver in the community. You can quote statistics about the number of

accidents where there are fatalities, whether there were nineteen or twenty or

twenty-five in any given year. I think what is pointed out here by the Mothers

Against Drunk Drivers is very clear - that one life is too important to lose.

Mr. Speaker, it is quite obvious from some heckling across

the way that some of the hon. members back for whatever reasons, I will be glad

to hear their comments when they stand on their feet and talk about this new

piece of legislation where they are actually encouraging people to drink and

drive. I keep hearing, what was the blood level alcohol of this particular

accident in Labrador? I do not think it matters to the Mom, and I do not think

it matters to the family or parents, I do not think it mattered to the young

individual who is now dead because of somebody's drinking and drunk driving.

What we are saying to the people of this Province, is that,

you have to be aware of the dangers of drinking and driving. Where do you take a

shotgun - let me ask the hon. Member for Mount Pearl, in making his reference,

whether you take a shotgun or you take a pistol, whether there are six bullets

in it or if there is one bullet, it is still a dangerous weapon, and when you

have an individual driving a vehicle with two drinks or three drinks or four

drinks, he is dangerous behind the wheel of that vehicle, whether it is a boat,

a truck, a car, an ATV or a snowmobile or whatever it is, he is not responsible

for the actions he is dealing with, he is not capable, according to all the

experts and research done by the medical profession that a person is not

responsive to an instance of quick reaction when he or she is under the

influence of alcohol to a .05 blood level.

Mr. Speaker, I have made my comments and I will be interested

to hear and make notes of what the hon. members opposite who -

AN HON. MEMBER: (Inaudible).

MR. EFFORD: Pardon?

AN HON. MEMBER: (Inaudible).

MR. EFFORD: Oh no. I am going to say more because I am

interested in hearing the comments from two or three members opposite about

their opposition and their concerns that this is not good legislation. Mr.

Speaker, just to conclude and I want to be clear on this because there is some

concern expressed and some questions that were asked before I came in the House

today; .05, on a roadside suspension will cause the device to come out, warn,

that will lead to a twenty-four-hour suspension. If it reports up to fail, then

they would be taken to the police station for a further testing which could be

.08 or whatever.

With a twenty-four-hour suspension, automatically your

license would be demanded on the spot on the roadside, and as I said earlier, if

it happens three times within a twenty-four-month period, you would lose your

license for a two-month period and then you would be required to complete a

short high impact program an afternoon but that is not decided yet; it may be a

day or maybe an afternoon where you would have a completion of a short, high

impact prior to the reinstatement of your license. In other words, you would

have to do a test or a questionnaire and some counselling before you would get

your license back and that would include the $100 fee.

There is also an educational program which will be

implemented by the Department of Education. The Department of Justice has some

services to play and we are working with the Department of Health under the

SSHHP program.

Mr. Speaker, I will conclude now in anticipation of the hon.

members opposite to give their full support and encouragement to keeping our

highways safe.

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

MR. CAREEN: Thank you, Mr. Speaker.

There is no one, Mr. Speaker, against this bill, nobody.

Nobody in his right mind anyway would be against the bill that is going to

safeguard everybody.

MR. DUMARESQUE: (Inaudible).

MR. CAREEN: Oh, I heard the Member for Eagle River open

his mouth. Listen boy, are you a man or a mouse? Squeak up, for God's sake.

Mr. Speaker, we were looking forward to this bill earlier the

fall.

MR. EFFORD: Earlier in the fall?

MR. CAREEN: Yes, it was supposed to be passed by the 15th

of August. The minister had bragged on March 25 that it would have been in for

Labour Day but he fell on his oars. I mean, I don't know, he is saying about the

importance but it did not seem to be very important to the minister when he let

it fall and it fell through and never got through by Labour Day, so I mean if

you are going -

AN HON. MEMBER: (Inaudible).

MR. SPEAKER: Order, please!

MR. CAREEN: If you are going to throw barbs, better be

careful where you are throwing them. This bill is a good bill minister. This is

a good bill but like any other bill, it can always be improved and I want to

know what kind of expertise went into it, for there is debate regarding .05 and

what it does.

Some people believe and know that the average of drunken

driving is on a decline in this Province. We are about the seventh in the

country. The average of the people who are caught drunk driving averaged out

over a year these past three, four years is averaging about 1.51, 1.54. These

are not the .5 with the two drinks on the way home from work.

AN HON. MEMBER: Point one five.

MR. CAREEN: Point one five, I'm sorry. The ones that we

should be getting at are the habitual drinkers, the constant ones.

MR. EFFORD: We are.

MR. CAREEN: Yes, but you are taking all other people into

account too. Last year there were 8,000 people, or some figure like that, hauled

over to the side in this Province who got a warning at that time. This time they

are going to be suspended. If they enforce it there will be more than 8,000. At

$100 a jump, what does this come to?

AN HON. MEMBER: (Inaudible).

MR. MANNING: The Minister of Employment and Labour

Relations.

MR. CAREEN: No, he is speaking. I thought I had the

floor. Anyway, there is more money for the government. It is not always money

for the government that is important, it is the safety of the people of this

Province.

Concerns have been raised by the tourism industry, they have

no trouble supporting the legislation, only parts of it they figure needs more

debate, more knowledge. Other people, including myself, are advocating that

there be some public hearings held across this Province to make people aware or

let them have their input into these changes. It is very important that public

hearings be held. It would be very important, because we have seen what happened

in government in our last setting when governments don't involve people. That

when governments don't involve people they all tend to fall on bad times.

Because this is far-reaching legislation and good legislation, from my personal

standpoint, the majority of it is good legislation, but I think that we should

have it aired more to the people of this Province.

We are not talking about any great time lapses. There should

be a small committee of this House struck to canvas a number of areas of this

Province to get -

AN HON. MEMBER: They are already in place.

MR. CAREEN: It is in place, yes, like the Member for

Bonavista South said, to put it in. The minister, obviously he doesn't know all

about this bill and its far-reaching effects.

AN HON. MEMBER: (Inaudible).

MR. CAREEN: No, he does not. What is the evidence to show

that .05 blood alcohol level makes a driver a danger on the road? I mean, what

evidence is there to show any of us? The minister talks about expertise. I

haven't seen it. Who else has seen such expertise? I would like to be exposed to

it myself. The minister doesn't have any expertise. I know he doesn't.

AN HON. MEMBER: Yes he does.

MR. CAREEN: Probably it might be the likes of me might be

down .05. If that is the case then the member is up probably higher.

I said earlier, nobody can support in their right mind

drinking and driving. All of us, I'm suspecting, know friends or relatives or

acquaintances in the graveyard because of being drunk. Some in an accident with

someone who took someone else to the graveyard with him. It causes undue

hardship and suffering on people, and not only those who die, those who get

maimed because of people drinking and driving. Like the minister said earlier,

and I concur, a car is a very dangerous weapon.

Another thing too in all this, and people know, is that - for

instance, if you use the analogy of a padlock. A padlock is really meant for

honest people. Honest to goodness people when they come to a padlocked door, is

a reason enough for them to turn around and go the other way. Not everybody who

has a car or who takes a drink is leaving one bar to go to another bar to have

another drink and so on until they get polluted and are a danger to other people

who are walking or driving on a highway, or even playing up in their yard like

an incident that happened here last year in this city.

There is another thing, minister, and it is a debateable

item, but it is possible. Some people say that the number of drinks - we all

know that some person the same size as you or I go into a bar. I'm after having

my lunch, my dinner, and someone else the same size accompanies me. The alcohol

has a different effect on the person who has been hungry all day than the person

who is fed. Okay? We acknowledge that.

But there is another thing out there too that says that -

like a woman, a 100-pound woman, one drink is going to put her at .05. One

drink! This is being disputed by some other people but it has been stated. I

don't have the expertise, I'm asking for public hearings to get this stuff

thrashed out. They say that a male of 100 pounds, it is .043. Less. So are we

going to set up a law that could be discriminating against women? Is it

possible?

This

article I was told, and I will have to verify it later,

has been disputed by some of the safety councils. I wasn't talking to them,

minister - and I will share this little item with you after - but they give a

number of examples. This one sticks out. Is it possible that 50 per cent of our

population would be discriminated against by this legislation? That is

worrisome. It is possible.

AN HON. MEMBER: (Inaudible).

MR. CAREEN: No, I'm not finished. You wrapped up too

quick. We are aware too - there was an

article in The Evening Telegram

back in September and they wondered as well about the constitutional effects.

Because obviously they didn't know at the time that it was in eight other

provinces.

AN HON. MEMBER: (Inaudible).

MR. CAREEN: Yes. The Criminal Code of Canada is .08. I've

talked to a number of police officers, and like anybody else, like us over here,

they support the bill. Some people were afraid it might be an administrative

nightmare. Some people thought that Mounties should be at other things, or

Constabulary officers should be at other things, that other things would be on

the back burner but that is not the case. There is going to be no administrative

nightmare.

There is another concern too I have minister with what is

going on lately with the insurance companies. When an ordinary person - and I'm

not talking about a person who is going to go out to get smashed at different

clubs and other, and goes out and eventually, accidentally or whatever, kills

somebody or whatever. Maims somebody

This first suspension for a person with no prior record, will

that person get it in the neck from an insurance company? We have seen stuff

happen in traffic infractions, violations, that have given insurance companies

an opportunity to raise the ante. There are a great deal of people more who have

gotten a warning than a person who has been habitually drunk and has lost their

license. So are they going to be taken advantage of? I would like the minister

with his expertise to, at his disposal, get that checked out as well.

The education part of it, Mr. Speaker, is good because we

have seen education over this past number of years - with all the unemployment

in this Province, we have encountered over this past number of years - drunk

driving is on the decline. I mean you substitute drivers. We see that advertised

constantly, substitute a driver.

AN HON. MEMBER: (Inaudible).

MR. CAREEN: Yes, that has helped. People are more

inclined to give their vehicle to someone else than the macho type of individual

that - I suppose we can all name in our different communities - would not give

their vehicle to anybody because it was seen to be taking a part of their

manhood. We have seen that changed. We have seen people become educated but the

education part of it as well that is going to - people who are constantly

abusing their privileges - because it is a privilege to drive a car and it has

to be taken as such - these people have to be more responsible. If they have a

problem, if alcohol is a disease with them poor people, rather than have them

live with the idea of maiming someone for life or killing somebody, that

education process and the rehabilitation process should certainly be given more

prominence than probably we are giving it today. I am told, Mr. Speaker, that

these people who are caught in suspension will not have a record. They will have

their suspension noticed because over a period of time it is not a criminal

offense and that is a thing a number of people have inquired to me about. So

there will be no record.

Getting back to the thing as well about the insurance

companies, if there is no record they should not be allowed to give it to

anybody in the neck but another thing brought up by another of our members here

is that if it is three times in two years you are stopped, will that be a

record?

MR. EFFORD: You lose them for two months.

MR. CAREEN: You lose them for two months but will there

be a record?

MR. EFFORD: It is not a criminal offense.

MR. CAREEN: It is not a criminal offense so that means

their insurance should not go up.

MR. EFFORD: It damn well should go up.

MR. CAREEN: It should not go up -

MR. EFFORD: (Inaudible).

MR. CAREEN: - because on that piece of equipment, on the

roadside test you get a fail or you get a warning.

MR. EFFORD: Are you drinking and driving or are you not

drinking and driving, you either are or your not?

MR. CAREEN: Well why don't you bring in 0.0 if that is

the case because some of those people who drink and drive will drink and drive

whether you got 0.0 or you got 1.15 or whatever. You have those people who are

going to do it, Sir. Those people are going to do it, and they are the ones we

have to get after much more so than we are getting after in this bill as well.

This bill has to be improved.

AN HON. MEMBER: Lobby the federal government to change

their rates.

MR. CAREEN: Yes, and that is another thing, too. The

federal government can always change theirs. Why did they reach an average of

.08 and the provinces have to give example to the federal government? We should

be lobbying them as well to change their standards.

AN HON. MEMBER: (Inaudible).

MR. CAREEN: Yes.

Minister, this legislation as it exists - I don't know about

other parts of Canada, but if it is outside the Criminal Code, can that be

challenged constitutionally?

AN HON. MEMBER: (Inaudible).

MR. CAREEN: It cannot, because the Highway Safety Act of

this Province takes precedence over the Criminal Code of Canada?

AN HON. MEMBER: (Inaudible).

MR. CAREEN: What does it take precedence over?

AN HON. MEMBER: Silly legislation.

MR. CAREEN: The legislation is good, but it has to be

improved.

MR. EFFORD: To what? You never said what.

MR. CAREEN: I am tired of telling you, to let the people

of this Province have an input, and that is an education, too. Let them know

what is coming down. I haven't seen it advertised in the papers what you are

going to do about it. I mentioned to you the idea that women could be

discriminated against in this bill. Could insurance companies take another ride?

The minister sold insurance when he lived in Ontario,

probably has another way of selling insurance here, now. I am interested in the

insurance of people being safer on our highways, safer on our lanes, unlike the

poor child who was playing up in his yard last year here in St. John's. That

affected us all, if you had a heart at all.

The minister obviously is not too familiar with his own bill.

MR. EFFORD: Sit down and I will show you how familiar I

am with it.

MR. CAREEN: You will wait until my time is up, or when I

sit down.

The people, the Mothers Against Drunk Drivers, the sons

against drunk drivers, daughters against drunk drivers, friends against drunk

drivers, I have never met a person yet, even those who have been caught, drunk

and driving and bragging about it. There is nobody who brags about drunk

driving, Sir, nobody. Nobody has bragged about it, but we have to improve. This

legislation has to be improved, and you over there -

AN HON. MEMBER: What

section is that bragging in?

MR. CAREEN: What?

AN HON. MEMBER: What

section is that bragging in?

MR. CAREEN: What century is what?

AN HON. MEMBER: (Inaudible).

MR. CAREEN: Oh, bragging? Nobody boasts about getting

caught for drunk driving. It is not a thing that you brag about. Some people

only get caught once and learn their lesson, but it is the habitual ones, and we

have them in this Province, who cause the most accidents, and the average, Sir -

and I said earlier when I got up to speak - the average people who are caught

across this Province are caught with .15 not .05.

Another thing, too, in the instrument - I forget the name of

it now - that is used to measure your alcohol content, the breathalyser, there

is no low side. There is no low side for warning. From .05 to .08 there is

nowhere to show: are you close to getting off, or are you close to the area that

you could wind up losing your licence and being fined, or close to what we call

the intoxication measurement.

I was told by one RCMP officer that it is good in New

Brunswick. Another one said that they had it in B.C., and then they said that

B.C. took it out for awhile and then put it back. Another province have in .06,

and another province .04.

MR. EFFORD: I do not care what other provinces have done.

It is what we are doing here in this Province. I do not care what they did in

British Columbia, PEI, or Nova Scotia. What we are doing is right.

MR. CAREEN: Well, you only had to guess there a few

moments ago that eight provinces had it in. You just guessed at it. You will

have your chance when you get up to respond.

A legislative committee of this House should be empowered to

visit a number of centres in this Province with this legislation to inform the

people of what it is. I said earlier it is an education in itself. It is not

going to delay any undue time, and also to check out the facts that I already

said are in this bill. Other matters in this bill, Sir, the part about raising

the fines for people. You mentioned about people using handicapped parking

spaces illegally. That is good. They should get it in the neck. There is nothing

as galling as seeing someone who is healthier than any of us doing that and

making it more difficult for a poor handicapped person. That is a good idea and

probably the fine should be stiffer than it is.

The part about identification, as you said earlier, is

housekeeping and I have nothing else to say about that. Anyway, to make this a

really good bill, Mr. Minister, I suggest you talk to certain centres around

this Province.

MR. EFFORD: Yes, the lounge owners.

MR. CAREEN: Well, they have a right to have a say, too. I

am not speaking here today for the lounge owners. I am speaking today in my job

as critic and the critic is not only here to criticize. The critic is also here

to make improvements. I have no shares in any lounges but they should have a

fair hearing. It is a good bill and as part of the whole process we should get

involved in it.

Thank you.

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

Transportation. Is he standing to speak to the bill or to close debate?

MR. EFFORD: To close debate, Mr. Speaker.

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

MR. WINDSOR: Mr. Speaker, I am absolutely amazed and

appalled at the minister today. First of all he made what I consider to be one

of the most pathetic introductions of any piece of legislation that I have seen

in my nearly twenty years in this House of Assembly. I have never seen a

minister display his incompetence to the degree that that minister did this

afternoon, and then to be so naive as to think that he is going to slide this

very important piece of legislation through with only one member, our critic,

speaking on this particular piece of legislation. I am also amazed that there is

nobody else here who is supporting him.

I have to question whether or not the minister, in fact, has

any support for this particular piece of legislation. How come there was nobody

else? We do not normally get two speakers from our side to speak on a piece of

legislation, it normally goes back and forth. Are the members going to sit in

their seats like puppy dogs as they normally do? Have the backbenchers now been

silenced so much by the backroom deals in the last couple of weeks that they are

not allowed to speak on any legislation? It was bad enough before. All the

little parliamentary assistants, and the executive assistants, and advisors, I

guess, have been put in their place. I guess the Premier has cracked the whip

and they are not going to be allowed to speak. Some of them, of course, we have

not heard speak anyway. They have not spoken before and now I guess they will

speak even less.

Mr. Speaker, let me get to this particular piece of

legislation.

MR. EFFORD: (Inaudible).

MR. WINDSOR: Mr. Speaker, I ask for protection from the

jackal, the minister over there.

AN HON. MEMBER: Which jackal?

MR. WINDSOR: Which jackal? A valid question. I will not

say who asked the question, but a valid question, which jackal, indeed? It is

unparliamentary and I withdraw the term in fairness to Your Honour. I withdraw

the term as it is indeed unparliamentary.

I have to say that I listened to the minister quite

attentively and was quite interested. I expected to hear him come forward with

some reasoned facts and arguments to substantiate what he is doing here, but,

Mr. Speaker, he has failed miserably in that and I have to say it was the most

incompetent presentation of a piece of legislation, and a very, very important

piece of legislation, Mr. Speaker, and I ask the minister not to be making so

many jokes about something that is so important. It is not a joke. The only joke

around here is the minister, Mr. Speaker, he is the joke. Now let us get to a

very serious piece of legislation here.

We are talking about the lives of Newfoundlanders and

Labradorians and there is not one person in this House who does not support any

effort that will save lives in this Province, Mr. Speaker, not one person. Not

one person who would not do everything possible to insure that not one more

Newfoundlander and Labradorian is killed on our