March 15,

HOUSE OF ASSEMBLY PROCEEDINGS

Vol. XLII No. 12

The House met at 2:00 p.m.

MR. SPEAKER (Snow): Order, please!

The hon. the Leader of the Opposition.

MR. SIMMS: Mr. Speaker, I rise to ask leave of the House

to express condolences to the family, relatives and friends of a constituent of

mine who passed away early last night, a well-known physician in the Grand Falls

- Windsor area, Dr. Ross Martin. Not only was he well-known in the community and

served his community in many, many respects, he was involved personally with me

in my political association as a member of my executive, his wife was my

president and, more importantly, from a personal perspective, he was also the

doctor who delivered both my children. I know that the Member for Windsor -

Buchans knew him well and, I imagine, the Member for Exploits. I would like to

ask Your Honour if he would express, in writing, to the family our condolences

on this very untimely, unfortunate passing.

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

Agriculture.

MR. FLIGHT: Thank you, Mr. Speaker.

Mr. Speaker, I would like, on behalf of this side of the

House, to associate ourselves with some of the comments made by the hon. the

Leader of the Opposition. It is true, I have known Dr. Ross Martin for many

years, not to the extent that the hon. the Leader of the Opposition would have

known him, but I have known him as a renowned doctor in Grand Falls and a very

community-minded and community-involved individual. I can say, Mr. Speaker, on

behalf of everyone in Grand Falls - Windsor, that he will be missed - he was

appreciated. His untimely death at fifty-nine came as a shock in most cases. I

want to associate myself with the comments made by the Leader of the Opposition

and would like to see that condolences are, indeed, expressed on behalf of the

House of Assembly through your office. Thank you.

Statements by Ministers

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

MR. ROBERTS: Thank you, Mr. Speaker.

I stand today to make a short statement about and to table

the report of the judicial inquiry into the circumstances surrounding the death

of John Stephen Rich. Mr. Rich, as members may recall, died on 8 June 1993, at

Makkovik, Labrador.

The presiding judge at the inquiry was the Hon. M. R. Reid,

and he concluded:

"It seems obvious that John Rich had decided it was time to

end his own life. Once he had decided his fate he was either going to take his

own life or force the police into doing it for him and he rendered himself under

the influence of alcohol to make it easier to accomplish. To conclude otherwise

would seem to fly in the face of the evidence." That's a quotation from the

report. I shall be tabling the full report, of course.

Mr. Speaker, Judge Reid further concluded that once Mr. Rich

had made the decision to die, subsequent events forced the RCMP marksman into a

situation where he had little choice but to fire at Mr. Rich. Just before the

fatal shot, Mr. Rich fired several shots at RCMP personnel, some of which came

dangerously close to them. It was only when Mr. Rich pointed his firearm at an

RCMP constable who was moving closer to the residence in which Mr. Rich was

located, that the RCMP marksman fired and killed Mr. Rich.

Allegations were presented during the inquiry that the RCMP

had acted hastily and improperly in this situation. Judge Reid made this finding

about these allegations, and I quote: `Having sat through the inquiry, however,

and having considered the submissions of counsel, I am satisfied that the

criticisms aimed at the police are without foundation'. Judge Reid did find that

the RCMP had encountered minor problems in their deployment of the Emergency

Response Team but concluded that these minor problems had no bearing on the

eventual outcome of the incident.

The inquiry made two recommendations, the first, that

measures be taken to bring the Emergency Response Team up to its full complement

and to maintain it there in case of need of such services in the future, and

secondly, that the RCM Police take steps to identify for use, aircraft suitable

to accommodate the E.R.T. and all of its equipment when needed on short notice.

The RCMP have assured me that appropriate steps will be taken in response to

these suggestions.

Mr. Speaker, a copy of Judge Reid's report has been provided

to Mr. Rich's family, or to be precise, to his counsel, and copies are available

for the press and for any member who may wish to have one.

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

MS. VERGE: Thank you, Mr. Speaker.

The Minister of Justice, through his staff, provided me with

a copy of the Judicial Inquiry Report a few minutes ago; I will be reading it

and may have something more to say later. I note that the minister has provided

a copy, as well, and more importantly, to the lawyer for Mr. Rich's family. I

would think, Mr. Rich's family will find it very difficult to accept the judge's

findings. People at a greater distance will have to read and assess the findings

of the report and the recommendations and try to be objective about it.

The death was very tragic and sadly, it is not the only such

instance of a death through a police stakeout. We have had a few other similar

occurrences in the Province over the last couple of years and, in each case,

there has been a difference of opinion and some controversy about the way the

police have responded, so I think it is important that we have close scrutiny of

police procedures for such incidents in the hope that we can prevent such tragic

deaths in the future.

Thank you.

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

have leave?

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

MR. HARRIS: Thank you, Mr. Speaker.

I would just like to add a few remarks. We are always very

concerned, of course, when tragic situations like this lead to a death and it is

important to have a full and thorough public enquiry, and I am pleased to find

that Judge Reid has found no reason to criticize the actions of the police here.

Underlying this tragedy, of course, is the decision itself of Mr. Rich to end

his life, and the tragic circumstances behind that unfortunately are all too

common in some communities in this Province. I look forward to seeing the report

to see whether any reference is made to that.

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

MR. DECKER: Mr. Speaker, for the past number of months,

the Department of Education has been engaged in an intensive effort to develop a

program of reform for primary, elementary, and secondary education based on the

recommendations of the Williams Royal Commission. The general outline of these

reforms has been presented in two recent documents entitled, "Adjusting the

Course" and "Adjusting the Course:

Part 11." The first of these documents deals

with reforms of the structure of the school system, while the second addresses

issues of teaching and learning. My purpose today is to inform this hon. House

of the progress to date in dealing with these reforms, and to indicate where

government plans to go from here.

As most people are aware, the major structural changes

proposed involve a reduction in the number of school boards from 27 to 10;

creation of a school construction board; and a shift to neighbourhood

inter-denominational schools as the norm; while retaining uni-denominational

schools under certain circumstances. All of these changes affect the role of the

Churches in the system. Following intensive discussions with the Church Leaders

and representatives, it has become apparent that no consensus is possible which

would allow government and Churches to proceed together with reform. Government

must therefore move with its program.

Because of the time taken in attempting to reach consensus,

it is not now possible to proceed with all of these changes in September, 1994.

A new target date of 1995 has been set for implementation of changes to the

school boards. Certain other reforms which have major costs attached cannot

proceed until the new school boards are in place, because it is planned to

finance these changes out of savings in administration which will result from

the streamlined school board structure. One of these changes is the plan to

introduce a full day kindergarten. This plan will now come into effect in

September 1995. However, some school boards already have a full day kindergarten

in place and others want to proceed in September of this year. Therefore, boards

who feel they can meet the necessary criteria in time for the next school year

are encouraged to proceed.

Mr. Speaker, government intends to introduce at this session

of the House of Assembly a comprehensive revision of the Schools Act. The

revision will include changes needed to carry out the reforms.

Despite the delay in implementing the new board structures,

and the consequent impact on certain other reforms, it is intended to proceed

with a number of important initiatives in the coming school year. Work is

already under way to establish standards at key stages of education, and to

develop indicators of student and system performance. Pilot projects on school

councils have also commenced. All of these are developments which can proceed

independently of structural change.

SOME HON. MEMBERS: Hear, hear!

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

MR. SULLIVAN: Thank you, Mr. Speaker. The minister rises

to report progress in dealing with these reforms. The minister knew and the

government knew two years ago when their legal counsel to the royal commission

published in appendix three verbatim his report to the royal commission. Mr.

Furey, in his thirty page opinion, it is clear, it is an unmistakeable warning,

of the jeopardy that government would be in if they proceeded. He stated: If the

commission's report was to be implemented immediately there is little doubt that

this course of action would result in protracted and expensive litigation. The

end result would no doubt find that the thrust of many of the commission's

recommendations is unconstitutional.

That is the government's own legal opinion to the royal

commission. This government wasn't looking for consensus. They were looking for

surrender that they knew they couldn't possibly get under the terms of the

Constitution. They tried to use that as an excuse to delay very important

reforms that are needed in education. Which goes to show that planning on trying

to introduce kindergarten without a curriculum, without teacher assignment,

without adequate space, is an example of this government's incompetence and

inability to address the real concerns in education today. That a minister, when

he was in the Department of Health, instituted changes and we are still picking

up the pieces in a system that descended into chaos.

SOME HON. MEMBERS: Hear, hear!

MR. SULLIVAN: There is one sure way to -

MR. SPEAKER: Order, please!

The hon. member's time is up.

MR. TOBIN: By leave!

MR. SULLIVAN: In conclusion, Mr. Speaker. There is one

sure way to do it and that is get rid of the minister, and we might get some

change in education!

SOME HON. MEMBERS: Hear, hear!

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

AN HON. MEMBER: By leave.

MR. SPEAKER: By leave?

SOME HON. MEMBERS: By leave.

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

for a copy of his statement before question period. In reading it and listening

to the minister and hearing about Adjusting the Course parts I and II and

the changes in the minister's plans, one wonders whether or not there is any

course at all that the government is committed to in this instance.

I look forward to changes in the Kindergarten program. I look

forward to reforms being brought in consistent with the Williams Report, and I

would like to see some resolve on the part of the government to continue with

them.

As I say, Mr. Speaker, one wonders what we are going to end

up with if the minister himself keeps adjusting his own course so that we don't

know where he is going.

Oral Questions

MR. SPEAKER (Snow): The hon. the Leader of the

Opposition.

SOME HON. MEMBERS: Hear, hear!

MR. SIMMS: Thank you, Mr. Speaker.

Mr. Speaker, I think it's been eight days now since we had

the privatization bill in the Legislature, and I think five of those eight days

the Premier has been absent, which is rather unfortunate since it is such an

important issue, so I will have to go to the Minister of Mines and Energy if, in

fact, the Minister of Mines and Energy is over the roasting he got this morning

on Open Line , and ask him some questions.

Now a week has gone by since the Premier misled the House,

you will recall, until he corrected his error the next day.

MR. ROBERTS: Your Honour, a point of order.

MR. SPEAKER: Order, please!

The hon. the Minister of Justice on a point of order.

AN HON. MEMBER: (Inaudible).

MR. SPEAKER: Order, please!

MR. ROBERTS: Mr. Speaker, Your Honour yesterday, at the

end of Question Period - it was Mr. Speaker Dicks presiding - made a very

succinct and very straightforward statement to the House to the effect that

non-parliamentary language would not be tolerated.

The most classic example of non-parliamentary language is to

accuse another member of misleading or of lying. The hon. Opposition Leader just

used the word `misled' in that he said the Premier misled the House.

I would ask Your Honour, as a point of order, to rule this is

out of order and request the hon. gentleman to withdraw the remark and rephrase

the

preamble to his question.

MR. SIMMS: Mr. Speaker -

MR. SPEAKER: Order, please!

The hon. the Leader of the Opposition. I understand he has

withdrawn the remark.

MR. SIMMS: I withdraw it, yes.

I ask the Minister of Mines and Energy, Mr. Speaker, if he

could correct the mistake that the Premier told me about in a letter the day

afterwards, when he said he had misunderstood what the question was and what his

answer was, apparently.

At that time I asked the Minister of Mines and Energy for

information on the advertising and promotional campaign related to Hydro. He

will remember the Premier said in his letter to me that the government would be

involved in radio advertising, and then a handwritten note that said, also in

newspaper ads. I asked him how much was being spent by Hydro. How much was being

spent by the government individually. Would Hydro's share be charged as an

expense and included in the tax rate base? What companies are doing the work?

Was there a tender?

The minister said he didn't know, but he said he would check.

A week has gone by; the questions weren't answered. Will the minister now

provide the answers to the people of the Province? Will he give us a precise

breakdown today?

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

DR. GIBBONS: Thank you, Mr. Speaker.

Mr. Speaker, in the last few days it has become quite well

known that we are participating with Hydro in the text of a brochure, and the

hon. member and all others throughout the Province have received the brochure

which was prepared. It is paid for by Hydro, copied, and distributed through the

post office since the middle of last week. That cost approximately $25,000.

There are some radio spots that have started. I don't think the newspaper spots

have started to appear yet. There will be some of those too, I believe. Overall

the estimated cost is about $100,000, which is a very, very small amount.

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

supplementary.

MR. SIMMS: Supplementary, Mr. Speaker. We will take the

opportunity in a future day to debate whether or not it is money worth spending.

I want to ask the minister some other questions related to

Hydro. Can the minister tell the House what companies, banks, and other

financial institutions have been engaged to advise government and Hydro on the

privatization issue? Could he also tell the House what company or companies have

been engaged as underwriters to finance the private takeover of Hydro and to

handle the sale of shares? Can he tell the House?

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

DR. GIBBONS: Mr. Speaker, we've been working with RBC

Dominion Securities and ScotiaMcLeod for some months now in doing the analysis

and they are our advisors. We have not at this time finalized a syndicate that

will be handling all of the shares, but RBC Dominion Securities and ScotiaMcLeod

are certainly our key advisors on it at this time. I'm sure that all the members

of the investment community will be involved at the appropriate time.

We've also had discussions with the banks and other financial

institutions and we would expect that they will all be involved at the

appropriate time in the sale of shares as we proceed, assuming that we do

proceed. The names of various law firms have already been mentioned in this

House that have been giving advice to government on the one hand, Hydro on the

other hand, and the underwriters on the other hand, so I won't go into the

details on that right now.

MR. SPEAKER: Supplementary, the hon. the Leader of the

Opposition.

MR. SIMMS: Supplementary, Mr. Speaker. I understand the

minister in a meeting over on the West Coast over the weekend also told the

audience at that public meeting that Sir Edmund D. Rothschild, or Rothschilds,

were also one of the government's advisors on this deal. Now we also know that

Sir Edmund I believe met last fall sometime with the Premier to discuss matters

related to Hydro. Can the minister tell the House what role does Sir Edmund or

any of the Rothschild companies play in the sale of Hydro? Will the Rothschild

bank for example be providing financial backing related to the sale of Hydro?

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

DR. GIBBONS: No, Mr. Speaker. The Rothschild company is

giving us some advice. They are one of our advisors as an advisor to government,

playing the same role that the Rothschild company played in Nova Scotia as an

advisor to that particular government when they went through their

privatization. It is the company and not Sir Edmund.

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

supplementary.

MR. SIMMS: Mr. Speaker, this is the same family-owned

bank that was one of the chief bakers of BRINCO, as the minister would know,

which was the company formed to develop the Upper Churchill and that negotiated

the ill-fated giveaway of the Upper Churchill power to Hydro Quebec.

I want to ask the minister, why has this particular bank been

invited back to this Province again to advise government on yet another Hydro

sell-off? Is there any connection between the privatization of Hydro and

development of the Lower Churchill?

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

DR. GIBBONS: On the last part of the question, Mr.

Speaker, there is absolutely no connection. The two are quite separate. We are

keeping our Labrador assets related to future development and all the

undeveloped water rights. There is no connection between the two.

MR. SIMMS: Thank you, Mr. Speaker. Supplementary.

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

supplementary.

MR. SIMMS: I hope the minister has a chat with some of

his other front row colleagues over there because they were over there saying:

Could be. So they should get their act together.

One of Hydro's responsibilities was to manage the provincial

government's interest in the Churchill Falls (Labrador) Corporation, the Gull

Island Power Corporation, the Twin Falls Power Corporation and the Lower

Churchill Development Corporation. I want to ask the minister: Will that which

remains of old Hydro continue to manage all of those interests totally, or will

they be transferred to another entity, say, the new Hydro company under some

contractual arrangement? Is that possible?

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

DR. GIBBONS: Mr. Speaker, we are not going to transfer

these properties to anybody. Right now existing Hydro has a management agreement

with CF(L)Co. for certain functions. It is our plan in the short-term transition

to continue that arrangement until we do a thorough evaluation of which way we

want to proceed in the future. So we haven't made any final decisions on how we

want to proceed in the long-term future, but in the short-term we are certainly

going to continue a management type arrangement, basically a continuation of

what is in place today, until we decide otherwise.

MR. SIMMS: A supplementary, Mr. Speaker.

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

supplementary.

MR. SIMMS: Mr. Speaker, I shudder to think what might be

ahead of the people of this Province in the long term. That is the big concern

that most people have.

Newfoundland Hydro took the lead in negotiations with Hydro

Quebec, as the minister would know, for the development of the Lower Churchill

project. I want to ask the minister: Who now will handle those negotiations for

the Province after Hydro is privatized?

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

DR. GIBBONS: Mr. Speaker, I would like to correct a

misconception. Newfoundland Hydro did not take the lead in the negotiations. We

in government put a committee in place that included representatives from Hydro

and representatives from government. I believe the number was six people on that

particular committee. Three of these senior people were from the government side

over here, Confederation Building, and three of them were senior people with

Hydro, but Hydro didn't take the lead. The direction was given from this House,

from this building.

MR. SPEAKER: Order, please!

The hon. the Leader of the Opposition.

MR. SIMMS: My question to the minister is: Who will

handle the negotiations for the Province after the privatization of Hydro?

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

DR. GIBBONS: We will continue to lead ourselves. We were

the ones who did the leading before. We did have people from Hydro on that

committee with us.

AN HON. MEMBER: (Inaudible).

DR. GIBBONS: Three and three, yes, but we are the ones

who gave directions for that set of negotiations, and they reported to us here

in government. The reporting wasn't at Hydro, and we will continue to do the

leading in the future, as need be.

MR. SIMMS: A final supplementary, Mr. Speaker.

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

final supplementary.

MR. SIMMS: Mr. Speaker, the minister will recall during

the opening day of debate on second reading of Bill 1, the privatization bill,

during my speech, in an exchange across the floor, the Premier said to me that

new Hydro would be able to acquire shares in CF(L)Co., GIP Co., Twin Co., and

LCDC. He will remember that. He was here in the House.

I want to ask the minister: Why will new Hydro be allowed to

purchase shares in those companies? Whose shares would they purchase, and what

percentage of the shares would they be permitted to hold?

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

DR. GIBBONS: Mr. Speaker, I heard no such thing, and it's

certainly not our intention to sell any of our shares, so I don't know where the

hon. member got that misinterpretation, but certainly we have no intention of

selling any of our shares to new Hydro.

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

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

the Minister of Mines and Energy.

Yesterday I asked the Premier a question about the offer for

development of the Lower Churchill that was on the Table in late 1991 and early

1992, specifically about the escalating price Hydro Quebec was prepared to pay.

The Premier replied that he didn't have the numbers off the top of his head, but

he could get them. Will the minister now confirm that the offer included the

sale of Lower Churchill power to Hydro Quebec for a thirty year term at an

escalating price, going from about 35 to 145 mils per kilowatt hour, averaging

close to 75 mils per kilowatt hour over the thirty years?

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

DR. GIBBONS: Mr. Speaker, we, with Hydro Quebec, and

initially dating back to 1989 - October 26, 1989 - with Ontario Hydro, were

negotiating the possible development of the Lower Churchill. After our initial

discussions Quebec and Ontario, in discussions with us, Quebec said that they

wanted to have access to all of the power that was surplus to the needs of

Newfoundland and Labrador, and they would like to have the opportunity to

negotiate this with us without Ontario present. Ontario Hydro said: Okay, we

will sit on the side. We are there, and we will always be there, depending on

our need.

We negotiated and had many meetings over about a three year

period, and during that time this continent, this world, went into a major

recession. We made a lot of progress on the details, financial, technical,

environmental and otherwise, a lot of progress on the details, but we never ever

reached a stage where we had a final agreement on what we would do. We were

getting close on a number of matters; we made a lot of progress on a number of

matters, but we never reached a stage where we said, this is it. We never

reached that stage, although we had a lot of discussions on it.

One of the points that the hon. member is talking about, the

escalator clause, yes, I have said it publicly before and I am sure the Premier

has probably said it publicly before, that one of the early things that we put

into it was the requirement that we were going to have an escalator clause in

any future contract, and we had effectively come to an agreement on that,

although I don't believe we had signed it off or anything, but it would be an

escalator contract tied to an appropriate index; an appropriate index for any

contract that we signed, but the numbers, I am not going to comment on the

specific numbers at this time but we were dealing with specific numbers and

ranges of numbers but we hadn't reached any agreement and about two years ago -

it is two years ago this month - Hydro Quebec representatives said: Look, with

what's happening in the economy, our demand is not there now like we thought it

was going to be, we don't need Great Whale now in 1998 like we thought we going

to have it and that one is back now to maybe 2007, therefore let's lay this

aside, acknowledge that we made a lot of progress towards a possible agreement

but let's lay that aside for now and let's monitor what's happening in the

market; and since that time, that has all been proven out in spades, Mr.

Speaker.

Last month, Ontario Hydro was up talking about the 10,000

mega-watts surplus that they now have rather than a demand for power. They

reached their peak in '89 and they don't expect to get back to the 1989 peak

until about three or four years from now, if then. Hydro Quebec is similar, Mr.

Speaker, the demand is not there and until there is a demand there won't be a

development of the Lower Churchill.

MR. SPEAKER: The hon. the Member for Humber East, on a

supplementary.

MS. VERGE: Thank you, Mr. Speaker.

Another question for the Minister of Mines and Energy.

I say to the minister, I know there was no agreement, the

Premier scuttled the golden opportunity for an agreement. I am asking about the

specifics about Hydro Quebec's offer in late '91 and early '92.

Now, Mr. Speaker, I am tabling this document which should

serve as an aid to the minister's memory; the document is labelled Churchill

River Project Review, Presentation to Cabinet, and is dated December 12, 1991.

With the help of the document, will the minister confirm that the offer for

development of the Lower Churchill that was on the table two years ago, included

development of the hydroelectric capacity at both Gull Island and Muskrat Falls,

as well as the construction of a transmission line connecting the Upper and the

Lower Churchill to the Island of Newfoundland, and that the value of the

construction projects was estimated at over $14 billion -

MR. SPEAKER: Order, please!

I ask the hon. member to get to her question.

MS. VERGE: - and would have provided 24,000 person years

of employment?

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

DR. GIBBONS: Mr. Speaker, over the last few years I have

given numerous speeches, others have given numerous speeches of what might be an

agreement to develop the Lower Churchill if and when that might be reached. At

this stage it has not been reached, nobody has scuttled anything because nobody

needs the power.

MR. SPEAKER: The hon. the Member for Humber East, on a

final supplementary.

MS. VERGE: Thank you, Mr. Speaker.

Will the minister confirm that in addition to an offer for

development of the Lower Churchill, also on the table in late 1991 and early

'92, was an offer to enter into side agreements to the Upper Churchill contract

that would have provided over $4 billion in royalties and rentals to the

Government of Newfoundland and Labrador over the remaining life of the Upper

Churchill contract?

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

DR. GIBBONS: Mr. Speaker, during all of our negotiations

with Hydro Quebec, we had agreed that we were not going to make any of the

details public unless we reached an agreement. We are not going to go talking

about what might or might not have been, we were negotiating various things to

see what we might reach -

MS. VERGE: You are covering up.

MR. SPEAKER: Order, please!

DR. GIBBONS: - we never did reach a final agreement

because of the changing world circumstances for energy, and one of these years

there will be a demand again and the Lower Churchill will be developed.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

The hon. the Member for Burin - Placentia West.

MR. TOBIN: Thank you, Mr. Speaker.

I guess we have just found out why the Premier wants to

privatize Newfoundland Hydro.

SOME HON. MEMBERS: Hear, hear!

MR. TOBIN: We wonder how much money the major

shareholders of Hydro will make, Mr. Speaker.

My question by the way, is to the Minister of Health.

A month or so ago, the minister went to the Burin Peninsula

and met with a group on the Burin Peninsula from the councils, the Chamber of

Commerce and others who told the minister in spades, that they wanted to

maintain the Health Care Board on the Peninsula to serve the people of the Burin

Peninsula.

Mr. Speaker, the minister announced in the House last week

that he was now putting a new board in place for the Burin - Peninsula,

Clarenville and Bonavista. In his statement, the minister said that the people

involved were very receptive and positive about the changes we are making.

I ask the minister, Mr. Speaker, would he tell this House the

names of the individuals who were so positive about the approach he is making,

from the Peninsula?

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

DR. KITCHEN: Mr. Speaker, it is true that I went and met

with quite a number of people from the Burin Peninsula representing most of the

people who were on the joint councils and others. We had lunch in the hotel in

Marystown and we talked for quite awhile. People told me quite clearly that they

would prefer to have the system that was in place then to continue and they did

not want to join with the other two boards, but in this world we don't always

get what we want. Later on when government had made its decision after

considering a number of options and after these sentiments that were expressed

in Marystown were conveyed to government and other sentiments from the other

boards and people in the area, from Bonavista and Clarenville area and so on,

the government decided that of the options they would choose to put in place a

board that would govern all the health care institutions on the Bonavista

Peninsula and the Burin Peninsula including the area served by the Clarenville

board.

When I called the chief executive officers and the

chairpersons of the boards together to announce this before I made it public - I

thought then that the people from the Burin Peninsula, two were there - I don't

think they were enthusiastic about it but what impressed me very much was the

desire on all peoples part, the decision having been made, that we would do our

best to make the thing work as best we can and that same sentiment has persisted

through all the mergers that have taken place.

In St. John's we've had the same situation. Everybody put

forward their views and then government made their decision and the decision

wasn't always what everybody wanted. It was what some wanted and what others

didn't. In this world one cannot always get what one wants and it is high time

for the members opposite to realize that what we're trying to do is to build a

good health care system for the whole Province where people think regionally

rather than for people to look after their own selfish interests. Thank you very

much.

MR. SPEAKER: Order, please!

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

West.

MR. TOBIN: Mr. Speaker, we'll never get a good health

care system in this Province as long as the hon. member is the minister.

Mr. Speaker, we're talking about a region, we're talking

about the region of the Burin Peninsula. Let me ask the minister another

question, Mr. Speaker: When he attended the meeting in Marystown he told the

people at that meeting that because they had 50 per cent plus of the population

of Bonavista, Clarenville and the Burin Peninsula that more then half of that

committee would be made up of residents of the Burin Peninsula. Is it still the

ministers intention to do that, number one, and number two, will he reconsider

and put the system back in place for the Burin Peninsula?

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

DR. KITCHEN: Mr. Speaker, thank you. If you look at the

total area and the population by the 1991 census, the population of the Burin

Peninsula that's served by that particular - that existing board rather than

future board - takes into account about 28,500 people. The other two boards

serve a slightly larger population, slightly larger but not much larger. They

are roughly the same number, so I would imagine that the new board should be

about evenly balanced between the Burin Peninsula and the other two boards.

Whether it will be 50/50 or 49/51 per cent I don't know.

But it won't be only on that criteria. We have to keep in

mind, as I mentioned here before I believe, certain other criteria. We want all

the institutions to be appropriately represented there, long term care and

otherwise, and we want good geographical representation. The Burin Peninsula has

two-and-a-bit political districts, the others have more than that so we have to

take that into account. We also have to take into account gender balance. Most

of the boards tend to be dominated by males and I really want to bring in a good

gender balance here because that's important and also I want to have a good

mixture of skills.

We will try to make sure that there's an evenly balanced

board but I can't be sure until the names come in and we try to build a good

strong board. The most important thing is to put together a board that can

manage the health care of the whole region.

Thank you, Mr. Speaker.

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

West, a final supplementary.

MR. TOBIN: Mr. Speaker, will the minister tell me, number

one, where the new CEO and the headquarters for this new board will be, in what

town or community, what area? Number two, will he assure the House that the

present services that exist on the Burin Peninsula will not be downgraded and

that all of the services that remain at St. Lawrence, Grand Bank, and Burin will

remain intact as they presently exist, and that they will improve, but will

certainly not be downgraded?

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

DR. KITCHEN: Mr. Speaker, nothing is frozen in time, but

our whole purpose in bringing about health care reorganization is to make sure

that the health care services throughout the Province are better than they are

now, or at least as good as they are now. As we are faced with financial

problems, what we have to do - and this is one of the main reasons why we are

regionalizing, is to make sure that the money goes where it is needed, on the

front lines in the health system rather than in unnecessary administration and

things of that nature, and in duplication. It is a straightforward thing. I

would like to be able to guaranteed everybody in this Province that the health

care system will improve, but part of it depends on dollars, I might as well be

honest, but I have no intention of downgrading services on the Burin Peninsula.

As a matter of fact, I believe, that the Burin Peninsula right now has as good a

health care service as anywhere in this Province and better than most.

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

MR. SULLIVAN: Thank you, Mr. Speaker.

I would like to direct a question to the Minister of Mines

and Energy. I heard the Minister of Mines and Energy on VOCM Open Line

this morning tell a caller that government is not giving away any water rights.

All new Hydro will get, he said, was the use of the water flowing through the

turbines. Now, has the minister read the Privatization Act? Is he aware that

Section 4 of the act says, the Minister of Finance shall transfer to New Hydro

all of the land invested in Old Hydro or which are used in connection with the

business of Old Hydro? And does he know that

Section 2 (

a) defines `land' as

real property of every kind, including rights-of-way, and waters, water rights,

water powers and water privileges?

Now, will the minister stand in his place and correct the

misinformation he gave to the people of this Province this morning?

SOME HON. MEMBERS: Hear, hear!

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

DR. GIBBONS: Mr. Speaker, I did not give any

misinformation to the people of this Province this morning. We wrote this

Privatization Act and I believe we know what we wrote. Obviously, the hon.

member opposite doesn't know how to read.

SOME HON. MEMBERS: Hear, hear!

DR. GIBBONS: Number one, no undeveloped water rights in

this Province, anywhere in this Province, are going to the new company, no

undeveloped water rights, whether in Labrador or on the Island, no undeveloped

water rights are going to that company. The only water rights they will have the

right to use, and there is no ownership change in this, it is not an ownership

matter, it is a right to use. They have the right to use the water rights that

are being used today - the water rights that are being used today, where, in Bay

d'Espoir, water is flowing through the turbines, Hinds Lake, where water is

flowing through the turbines, Cat Arm, and other such places, where water is

flowing through the turbines. They have the right to use that water to produce

electricity for the people of Newfoundland until they stop using it. If the day

should come when they stop doing that, producing electricity, then that right to

use reverts to us.

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

supplementary.

MR. SULLIVAN: Thank you, Mr. Speaker.

What kind of a con job does the minister think he is sending

to the people?

MR. SPEAKER: Order, please!

The hon. the Minister of Justice on a point of order.

MR. ROBERTS: Mr. Speaker, I intend to raise a point of

order whenever I believe there is a legitimate basis for one. The hon. the

Member for Ferryland just used the phrase a `con job' and I suggest, Mr.

Speaker, that is not parliamentary and I ask Your Honour to rule him out of

order, ask him to withdraw it, and rephrase the question.

MR. SPEAKER: To the point of order, the Chair will take

the point raised by the hon. the Minister of Justice under consideration and

report later.

MR. TOBIN: You will not stifle Question Period,

`Roberts', as much as you would like to!

MR. SPEAKER: Order, please!

MR. SULLIVAN: Thank you, Mr. Speaker.

MR. TOBIN: Dictator - that's what you are!

MR. SPEAKER: Order, please!

The hon. the Member for Ferryland.

MR. SULLIVAN: Thank you. I guess that is the same

government, too, that knew and wrote the Upper Churchill legislation.

SOME HON. MEMBERS: Hear, hear!

MR. SULLIVAN: Subsection 4(7) says that New Hydro will

get legal title to the land "free and clear of all encumbrances". I remind the

minister again that "land" is defined in the act in

section 2(1)(a) "and

includes ... waters, water rights, water powers and water privileges." What is

legal title, free and clear of all encumbrances? In fact, is it not ownership, I

ask the minister?

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

DR. GIBBONS: No, Mr. Speaker, it is not. If the hon.

member would only read the

section again, it says, in

section 4(4), "such rights

to use all waters, water rights ... as are developed and as are used by Old

Hydro ... at the reorganization date". By definition, the reorganization date is

the date that this transaction would occur. They get no undeveloped rights. They

only get the right to use the waters they are using now.

MR. SPEAKER: Question period has elapsed.

SOME HON. MEMBERS: Oh, oh!

MR. TOBIN: There are two minutes left in Question Period.

MR. SULLIVAN: It started at 2:17.

MR. TOBIN: At 2:18.

MR. SPEAKER: The Chair was using the stopclock here.

AN HON. MEMBER: (Inaudible).

MR. SPEAKER: Okay, the Table says there are two minutes.

The hon. the Member for Ferryland.

MR. SULLIVAN: Thank you, Mr. Speaker.

MR. SPEAKER: A final supplementary.

MR. SULLIVAN: I ask the minister: Is he genuinely

uninformed on what is in the act, or is he part of the whole process, along with

the Premier, that has a deliberate campaign trying to mislead the people of this

Province?

MR. SPEAKER: Order, please!

MR. SIMMS: Here we go again!

MR. ROBERTS: Mr. Speaker, I raise another point of order.

As the Leader of the Opposition said, here we go again. Every time any member of

the House accuses someone of deliberately misleading, in my submission, it is

unparliamentary. The hon. gentleman, the Member for Ferryland has been here more

than long enough to know that he is using unparliamentary language. I would ask

Your Honour to direct him to withdraw it, and either to rephrase it or put his

question in an entirely different way.

MR. SPEAKER: Order, please!

The hon. the Member for Ferryland.

MR. SULLIVAN: To the point of order, Mr. Speaker, I asked

the question: Is he deliberately - I didn't use the word `deliberately' - I

said: Is he not trying to mislead? That is my question, and Hansard will record

that, and you can read it in Hansard tomorrow. That is what I asked, is he not?

I ask the minister to answer yes or no. He should tell us if

he is or if he is not.

MR. SPEAKER: Order, please!

The hon. the Minister of Finance, to the point of order.

MR. BAKER: Thank you, Mr. Speaker.

To that point of order, I would like to reiterate that

Speaker Dicks, yesterday -

MR. SPEAKER: Order, please!

MR. BAKER: Speaker Dicks, yesterday, after a Question

Period that was filled with totally unparliamentary language, charges and

innuendoes, decided that at the end of Question Period he would remind hon.

members that this would not be tolerated in the future.

Now, Mr. Speaker, we have to, at some point in time, put

limits on the types of innuendoes and charges and so on that can be thrown

across this House if we are to have any reasoned debate at all. So, Mr. Speaker,

I think it is quite a logical point of order, and for days we have refrained

from raising these points of order during Question Period, but there is a limit

and I believe that we have crossed that limit.

MR. SPEAKER: Order, please!

The hon. the Opposition House Leader, to the point of order.

MR. W. MATTHEWS: Mr. Speaker, I just want to respond and

say that this is the first time in my twelve years in this Assembly that I have

seen the Government House Leader and other ministers trying to stifle Question

Period by rising on points of order. Usually, they extend the courtesy until

after Question Period has elapsed, but what we see here is the sure evidence

that what is happening on this debate, and Question Period in this House, is

cutting to the bone. It is cutting them to the bone, that's what is happening.

SOME HON. MEMBERS: Hear, hear!

MR. W. MATTHEWS: The Premier, now, won't have public

hearings. Yesterday he rose in his place, listing people who have signed

petitions. He doesn't want people to express their opinions on petitions, and

now we have a deliberate attempt, as a result of the caucus meeting yesterday,

that the orders have been given to cut down on the questions in Question Period.

So, Mr. Speaker, I would say that Your Honour should take it

under consideration and come back and rule very clearly to the Government House

Leader that any points of order that he should wish to bring to the attention of

Your Honour, he should do so after Question Period.

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

point of order.

MR. ROBERTS: Mr. Speaker, all I wish to say is that the

hon. the Member for Grand Bank -

AN HON. MEMBER: (Inaudible).

MR. SPEAKER: Order, please!

MR. ROBERTS: The hon. the Member for Grand Bank, in

making his submission on the point of order, breached another parliamentary

rule. Accordingly, when Your Honour deals with this one, I ask leave to move a

point of order. He is not allowed to impugn the motives of members on either

side, and that is what he did in making his submission on the point of order. It

is no more in order when made in pursuit of a point of order than it's made in

pursuit of any other proceeding in this House, so I would ask leave to raise

that point when Your Honour deals with this point.

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

the point of order.

MR. SIMMS: Mr. Speaker, just a final comment on it, to

make it even. There were three on that side, and only two over here, so I will

make it even.

I want to say to the House Leader on the Government side, it

is a poor time to be hypocritical. That same individual, the Government House

Leader, not too long ago, just a couple of days ago, sang out and told one of

our members to shut up, and the other day, or yesterday, I think, he referred to

members of the Opposition as a bunch of dogs - sick dogs.

Now, Mr. Speaker, apparently the

interpretation of

parliamentary language is in the mind of the Government House Leader, because

those are the only examples that he knows how to use, himself. All we used here

today were words like `misled', that is not unparliamentary, I say to the

Government House Leader. I'm sure the Speaker will find out when he checks

Hansard to make his ruling, but I will ask the Speaker to do this, as well,

while we're on this same point of order: I will ask if he would check also the

parliamentary references, including our Standing Orders. I believe he will find

the point that my colleague referred to or alluded to about raising points of

order after Question Period. Not only is it the practice, it is also recommended

and suggested in the parliamentary reference books. When the Member for Gander

was Government House Leader - I have to give him as much credit as possible -

there was very rarely an occasion when there were points of order raised during

Question Period because the public would not be aware that there is only a

thirty-minute time segment put aside for Question Period. Any time the

Opposition is putting any pressure at all on the government, you can be sure it

is striking home because of the kinds of things the Government House Leader put

up with today, Mr. Speaker.

MR. SPEAKER: Order, please!

To the point of order raised by the Minister of Justice, over

the last couple of days, I guess, it has been brought to the attention of all

members of the House that there have been some words used which are clearly

considered unparliamentary and some other words which are borderline, depending

on the context in which they are used, whether or not they are considered

unparliamentary. The Chair will have to check the context in which the hon. the

Member for Ferryland used the term and will rule on that at a further date.

The hon. the Member for Grand Falls, I believe, raised a

point of order, as well, with regard to raising points of order during Question

Period. Again, the Chair will take that under advisement and check on it.

The time for Oral Questions has elapsed.

On a point of order, the hon. the Minister of Social

Services.

MR. LUSH: Mr. Speaker, during Question Period, the hon.

the Member for Humber East tabled a document and I think it is important that we

do things right in this House. What might appear to be right one day might not

be right another day but, Mr. Speaker, tabling documents by private members is

not permitted. I refer hon. members to -

AN HON. MEMBER: Oh, oh!

MR. LUSH: No, it is not a matter of (inaudible), it is a

matter of doing things right, and it appears that some members don't want to do

things right. If we do things right there will be no problems. I refer to

Beauchesne - Order! I refer to Beauchesne.

SOME HON. MEMBERS: Hear, hear!

MR. LUSH: I'm soon going to stop that.

Mr. Speaker, I refer Your Honour to Beauchesne, page 151,

clause 495(6), which says: "A private Member has neither the right nor the

obligation to table an official, or any other, document." I rest my case.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

The hon. the Opposition House Leader to the point of order.

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

of my colleagues have already indicated it is not an official document. As I

reflect back, any time in his House where an hon. member, regardless of which

side, stands in his or her place and makes reference to a document, or at any

time reads a sentence or two or a paragraph from it, yells from the other side

come: Table it, table it!

That is exactly what the hon. member did. The hon. member

made reference to a document - as the Premier last week asked her to table it.

But of course today members opposite know that what the member has tabled really

has the goods on the Premier for walking away from a very good deal for this

Province. They don't want that tabled. They don't want the press to know about

it, they don't want the public to know about it. All I say to the point of

order, Mr. Speaker, is there is no point of order. It is a good attempt, I say

to the former Speaker, a good attempt on your part, but you are no longer

Speaker, you are now a minister, and I expect you to act accordingly.

MR. SPEAKER: To that point of order. The point raised by

the hon. Minister of Social Services has been raised on several occasions since

I've been a member of this Chamber. I think there has been some ruling made on

it. I will have to check the precedent and see what actually was decided.

Presenting Reports by

Standing and Special Committees

MR. SPEAKER: The hon. the Minister of Social Services.

MR. LUSH: Mr. Speaker, I wish to table the annual report

of the Social Assistance Division for the fiscal year 1992-1993 as requested by

section 5 of the Social Assistance Act, 1977.

Petitions

MR. SPEAKER (Dicks): The hon. the Member for St. John's

East.

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

to present a petition on behalf of 104 residents of Harbour Breton, Baie Verte

and Bonavista. In tabling this petition I would caution hon. members opposite

who represent some of these districts not to phone up people and intimidate them

as the Premier seems to want to do with petitions.

These are petitioners who, as citizens of Newfoundland and

Labrador, seek to stop the proposed sale of Newfoundland and Labrador Hydro.

They are saying the sale of Newfoundland and Labrador Hydro has not been proven

to be in the best interest of the citizens of Newfoundland and Labrador. In that

regard I wonder if the Minister of Finance would pay some heed to the concerns

that are being raised in this petition. Because yesterday in the House the

Minister of Finance raised the issue that the interest payments on the Hydro

debt was costing $147 million. He was raising that as a serious impediment to

the government financing because there was $147 million of interest payments

being made on the Newfoundland and Labrador Hydro debt.

First of all, what the Minister of Finance did not explain

was that this $147 million worth of interest was being paid not by the taxpayers

of Newfoundland but was being paid out of the revenues of Newfoundland and

Labrador Hydro. What he also didn't explain - and I hope that he will listen

carefully and will rise in response to these petitioners - and explain what he

should have explained, Mr. Speaker, is that when and if, which is hopefully

never, but if Newfoundland and Labrador Hydro is privatized that that $147

million which is now being paid on interest on bonds of Newfoundland and

Labrador Hydro, will in fact increase substantially because in addition to

paying interest on the borrowings of the new Hydro corporation, there will also

have to be an additional, considerable millions of dollars of cash flow required

to pay the cost of capital because it must include not only interest on bonds,

but also the return on equity that is going to be demanded by the new

shareholders and is going to be guaranteed to them by the Public Utilities Board

under its current legislation.

So if the Minister of Finance would rise in response to the

petitioners and acknowledge that there will be an increase cost of capital for

the new Hydro corporation, up from the $147 million which is now required to pay

interest on the bonds and it will increase somewhere in the order of $175

million to $180 million, and perhaps the minister can tell the House what advice

his government has been given about the cost of capital requirements for the new

Hydro corporation, what kind of cash flow will be required in addition to the

current $147 million to meet the cost of capital requirements of the new Hydro

bill. These are some of the very many questions, Mr. Speaker, that concern these

petitioners and have yet to be answered properly by this government which is why

there is so much opposition across this Province and so few people have been

convinced by the government's move, that there seems to be almost no support for

this government's plan.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

The hon. the Member for Burin - Placentia West.

MR. TOBIN: Mr. Speaker, I stand to support the petition

presented by my friend from St. John's East. Again, we have a group of people

from Newfoundland and Labrador crying out to this government, crying out to the

members, crying out to the hush puppies in the back benches over there, to take

a stand. Well, if there had ever been any doubt in anyone's mind as to what is

behind this Hydro scheme, if there had ever been any doubt in anyone's mind as

to why the Premier was hell-bent, four-square ahead to privatize Newfoundland

and Labrador Hydro, was made public today by the tabling of an appendix to a

Cabinet document by my colleague from Humber East.

Newfoundland and Labrador Hydro is being privatized to look

after the buddies of the Premier of this Province, Mr. Speaker, that is why it

is being privatized. Why didn't the Premier take the deal that was reached when

Newfoundland and Labrador Hydro as we know it today, reached a deal with Hydro

Quebec, as that document would clearly show there was an agreement reached,

$14.4 billion reached with Hydro Quebec, 99 per cent agreed upon, when the

Premier pulled the plug and scuttled it. Why, I ask members opposite? Have the

courage to ask the Premier why and don't believe him if he does not tell you the

truth. That deal was scuttled and is on the table and I have not seen a

backbencher going up to get a copy of it yet, to know why the Premier pulled the

plug on a deal worth $14.4 billion.

You talk about jobs in Newfoundland and Labrador, but now we

know that an agreement can be reached with Hydro Quebec over the next little

while because it was agreed to a little while ago, a few months ago, so now, who

is going to make the deal with Hydro Quebec, who is going to reap the benefits

from Hydro Quebec? What did Steve Neary call it yesterday?

MR. W. MATTHEWS: A diabolical plot.

MR. TOBIN: A diabolical plot Steve said and he said it

would be the moneybags who would reap the benefits. Yes, Mr. Speaker, the

moneybags will reap the benefits from this new development and we the peasants,

Mr. Speaker, the people of Newfoundland and Labrador who don't break bread with

the Premier in his social circles, we will not benefit from this deal. There is

a plot that has been exposed and that plot, Mr. Speaker -

MR. W. MATTHEWS: A diabolical plot.

MR. TOBIN: Yes, a diabolical plot.

MR. L. MATTHEWS: (inaudible)

MR. TOBIN: I do believe what I am saying and I say to the

Member for St. John's North that I have the courage and the principle to stand

up for the people who sent me here. There are other members on that side, Mr.

Speaker, who have principle and courage and stood up for their constituents, and

there are others who have not, I say to the hon. Member for St. John's North.

Mr. Speaker, it takes principle to stand up, it takes courage to stand up, and

backbone, so I do believe what I am saying, and believe it very strongly.

Ninety-eight per cent deal done, Mr. Speaker, and the Premier

pulled the plug. What would have happened? Hibernia would have peaked. As that

was going down, as Hibernia was going down, this contract would have peaked and

Gull Island, I believe it was, then as that was levelling off it would have

peaked on Muskrat Falls. That is what was in that deal. That is what was in it

for the people of Newfoundland and Labrador. That is what was in the deal that

this minister was ecstatic about. When an agreement was reached the Minister of

Mines and Energy, Mr. Speaker, was ecstatic. He took the agreement and brought

it back, right delighted to report to Cabinet, and what happened, Mr. Speaker?

The Premier cut the legs right from under him and did not proceed with the deal.

I would venture to bet that this Premier will not be the Premier of Newfoundland

in five years time, or four years time, or three years time. There is a plot and

it has been uncovered.

MR. LUSH: (Inaudible)

MR. TOBIN: Mr. Speaker, could you ask the Minister of

Social Services to restrain himself, please?

The facts have been laid on the table. I ask members

opposite, the backbenchers opposite, to look at that. That was an appendix to a

Cabinet paper that was tabled here today. That, Mr. Speaker, was the briefing

notes that were brought to Cabinet as to where the deal was to and what was

agreed on. That is the deal that the people of Newfoundland and Labrador must

become familiar with, and they will never be totally familiar with it if the

backbenchers over there continue to play the role of tapping their desks and

closing their ears.

MR. SPEAKER: Order, please!

The hon. member's time is up.

The hon. the Government House Leader.

MR. ROBERTS: Mr. Speaker, if I may say a few words with

respect to the petition presented by my friend the Learned. Member for St.

John's East. Let me first of all deal with the comments made by my friend for

Grand Bank. I am sorry, for Burin - Placentia West. I keep confusing the

terrible twins over there. I apologize to my friend for Grand Bank. I realize I

inadvertently may have offended him but I did not mean to.

Mr. Speaker, the gentleman for Burin - Placentia West assured

us that he believes what he is saying and I accept his word, but I will say to

the House that I am not going to engage in debate about paranoid fantasies and

that is what his statements are, paranoid fantasies. There is not a jot, a

tittle, iota, scintilla, of truth to them. The member said we now know that an

agreement can be reached. I think those were his exact words as I marked them

down. If I got them wrong, I got them wrong, but as I marked them down: We now

know that an agreement can be reached with respect to the Lower Churchill. Mr.

Speaker, that statement is just incorrect. The truth of the matter has been said

by both the Premier and my friend the Minister of Energy in the House today, the

Premier speaking yesterday. There never was a deal with Hydro Quebec. There were

talks and the talks were very promising.

SOME HON. MEMBERS: Oh, oh!

MR. ROBERTS: Mr. Speaker, I can only say to the hon.

members opposite that I hear them in silence and I ask the same of them. I can

shout louder than any of them, I can sauce better than any of them, but I do not

think that helps anybody. I am trying to make a few modest remarks about a

modest speech. What I am saying is that both the Premier and the Minister of

Mines and Energy have said quite clearly, and this is the truth, that there was

no deal with Hydro Quebec.

There were talks that looked very promising until Hydro

Quebec, for their own reasons, withdrew. The hon. Member for Humber East may

table what she wants but the truth of the matter is there was no deal, there was

never a proposal that could have been a deal because Hydro Quebec backed out for

their own reasons and the reasoning for that has been given.

Now, Mr. Speaker, let me come back to my friend for St.

John's East who made, I thought, some very pertinent points because he raised

the issue of the cost of the capital to be used by Hydro. Now whether the

capital is in the form of equity, shares or in the form of bonds, it still costs

one way or the other. My friend for St. John's East -

MS. VERGE: (Inaudible).

MR. ROBERTS: Mr. Speaker, I don't want to be bothered by

the nuisance from Humber East, if she would please keep quiet I'm -

MR. W. MATTHEWS: Point of order, Mr. Speaker.

MS. VERGE: It shows him up for what he is.

MR. SPEAKER: Order, please!

The hon. the Opposition House Leader.

MR. W. MATTHEWS: Thank you very much. Point of order, Mr.

Speaker.

I would suggest to Your Honour and to the Government House

Leader, who gave us a lecture a few minutes ago about parliamentary language,

that nuisance is certainly unparliamentary and I think the Government House

Leader should withdraw it and he should stop being so contradictory - I got to

be careful of what I say here because I might say something that's

unparliamentary - but he seems to want to have different rules for himself than

everyone else. So I ask Your Honour to remind the minister.

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

MR. ROBERTS: Mr. Speaker, if I mis-spoke myself under the

extreme provocation of the hon. woman from Humber East, I withdraw and of course

I apologize unreservedly to her but she does try to interrupt and that's rude

and unparliamentary and not helpful.

Now, my friend from St. John's East had made, I thought, a

very good point and let me try to respond to it as best I can in the moment or

two left. The cost of capital, whether it's equity or bonds, is factored into

the rates - my friend again nods acquiesence, what we're saying is common ground

- is factored into the rates. The tables that the Premier presented to the House

at second reading, that were since tabled and have now been sent to everybody in

the Province, every home in the Province has them - factor in the extra costs,

and there are some extra costs because Hydro's debt equity ratio will go from

the present 80 to 18, to 57 debt 43 equity, I'm sorry, 53 debt 47 equity -

MR. BAKER: No, your first way is right.

MR. ROBERTS: The first way is right my friend the

Minister of Finance says - that's why he is Minister of Finance and I'm not.

It's 57 debt, 43 equity. So the equity in proportion is going up by 25 per cent.

Those calculations are factored into the rate calculations, now that's one

point. The second is, that it's difficult to be specific because these rates are

set not by this House, not by the government, not by Hydro but by the Public

Utilities Board after a hearing, by a process that's public and in accordance

with very well established rules but that is our best estimate. The rates are

our best estimate and I would say to my friend from St. John's East that the

concerns he's raised, the extra costs and there is a marginal extra cost - he

shakes his head - when you net out the gains against the losses there's a

marginal extra cost and that is reflected in the increases shown in the tables

that the Premier presented to the House.

Thank you, Sir.

MR. SPEAKER: Order, please!

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

MR. MANNING: Mr. Speaker, I'm happy today to stand and

present a petition on behalf of 118 people from the community of Colinet, in the

District of St. Mary's - The Capes. I would like to read the prayer of the

petition, Mr. Speaker.

To the hon. House of Assembly of the Province of

Newfoundland, in parliament assembled, the petition of the undersigned residents

of the Province of Newfoundland and Labrador ask for the House of Assembly to

accept the following prayer;

WHEREFORE your petitioners urge the Government of

Newfoundland and Labrador to stop immediately the privatization of Newfoundland

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

whether Newfoundland Hydro should be privatized or remain a Crown corporation.

As in duty bound your petitioners will ever pray.

Mr. Speaker, these 118 people in the community of Colinet are

among hundreds and thousands of others who are starting to speak out on this

very important piece of legislation. As the Government House Leader stated last

week, he felt that it was one of the most important pieces of legislation to

come before this House of Assembly since 1949. So I ask the ministers and the

government opposite, why not go out into this Province and have a referendum on

this piece of legislation if you feel that it's so important, number one and

such a good deal, number two, to the people of this Province? If you think it

can be sold take a chance and go out and hold a referendum in the Province on

this piece of legislation.

I'm sure the Minister of Mines and Energy after spending two

hours this morning on the open line show is fully aware that people are asking

questions. People are finally starting to delve into this piece of legislation.

It is starting to pique their interest. They are starting to learn more as the

days pass and therefore they are asking more questions.

Therefore the people want to know why the privatization of

Newfoundland Hydro is going ahead and they want to know the ins and outs of the

legislation, Mr. Speaker. That is why I feel that the government should hold a

referendum and hold public hearings so that the people are made aware of the

importance of this piece of legislation and that they have a chance to voice

their opinions, whether for or against.

The Minister of Mines and Energy heard many comments this

morning, as I'm sure he has relayed to some of his colleagues since he returned,

about the importance of public hearings also. There were public hearings held on

smoking legislation that came before this House, Mr. Speaker. There were public

hearings held on the chartered general accountancy act that came before this

House. It is very important, I believe, that some public hearings be held on

this very important piece of legislation.

I'm very surprised, as somebody mentioned earlier, that the

Premier of the Province has found it necessary to be out of the House of

Assembly for five days out of eight that we have debated this piece of

legislation. A very important piece of legislation, as I've stated earlier, and

the Premier decides or makes it convenient to be out of here for five days out

of the past eight.

People are asking questions. They are very interested and

they want to know. I wonder if the Member for Humber East has put forward today

the reason why Newfoundland and Labrador Hydro is to be privatized. Maybe over

the next few days people will learn more about the information that she has put

forward and will begin asking more questions and wondering why.

Water rights seem to be a major problem as people are

debating. People are calling my office asking questions. It seems that the

people are very concerned about the water rights since it is one of our last

natural resources. I refer back to March 7 here in the House when the Minister

of Finance was asked a question concerning the water rights. Just to make a

quote from Hansard, page 176:

"Isn't he aware, in the legislation, that in fact,

undeveloped water rights are not excluded from the legislation, and that in

fact, the act gives the Minister of Finance the power to give away all or any of

the undeveloped water rights on the Island and in Labrador, at the stroke of a

pen any time in the future, without ever having to come back to the House of

Assembly. Will he confirm that?"

The Minister of Finance said, on page 177: "Yes, Mr. Speaker,

I will confirm that and I am a pretty reasonable person, and have no intentions

of giving away anything that is not supposed to be given away."

Knowing the Minister of Finance, I respect him, and I think

that maybe he may not give it away. But what happens years down the road?

Whoever may be the new Minister of Finance, whether it be a he or a she, in

years that go by, that there is something wrong in a democracy where one person

can give away water rights. That is written right in the legislation and that I

believe is wrong. That seems to be creating a major problem for many people

right across the Province, that somewhere down the road one person in this House

of Assembly who doesn't have to come back to this House of Assembly to get a

ruling on it, doesn't have to come back to Cabinet to discuss it, one person has

the right at any time in the future to give away the water rights that we hold

so dear. The last renewable resource in this Province and one person has the

right to give it away.

That seems to be a major problem with many people right

across the Province. It seems to be a major part of the act that many people are

asking questions on. Therefore again we go back to the necessity of public

hearings and the necessity of people getting out and learning more about this

act, Mr. Speaker.

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

MR. MANNING: Thank you, Mr. Speaker.

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

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

the petition presented by my colleague. I would like to get to a point of giving

away water and water rights.

The Minister of Mines and Energy said today that this

government is not giving away water and water rights. It is giving it away. It

is stated specifically in this act that they are giving away water and water

rights and water powers and water privileges. Not only what is with old Hydro

and transferred to new Hydro that is specifically stated here, but it is also

giving away the rights for any water that remains with old Hydro, that is used,

or any assets that are used, in the conduction of business of new Hydro. That is

stated specifically here in this act too.

I don't know what act the minister is reading from. It is his

government that has produced it. Plain black-and-white. It states in

section

2(1)(

a) that "`land' means real property of every..." single kind, of every

kind. It tells what it includes. It goes on to say it includes "... waters,

water rights, water powers and water privileges." He has the audacity to get up

here in this House and to say it otherwise.

He has the audacity to get on an open line program and tell

the people of this Province, and if that is not misleading the people of the

Province, I don't know what is.

Now when you evaluate the assets of Hydro, and ask the

question: How much is it worth? The Premier talked about, downplayed it, $250

million or $300 million, trying to play it down so when he sells it for $500

million it looks like he is getting a great sale, and that is not correct. It's

far from it.

I will just use an example to show the value of the real

assets that we have there. Upper Churchill is an example, 5,225 megawatts, built

at a cost of $950 million. Today there are only $408 millions owing on Upper

Churchill. It is valued, at a book value today, of a little over $908 million.

To replace that today, and to get an appreciation for it, it costs between $2

million and $3 million a megawatt to produce and generate electricity here in

this Province. If you applied that figure to the Upper Churchill, as an example,

it would take $10.5 billion, is the low end of the estimate, and the high end is

$15 billion to replace the assets in the Upper Churchill.

I will bring it a little closer to home. Let's look at the

Bay d'Espoir project. Down in Bay d'Espoir there are 604 megawatts produced, and

the cost of putting that there was $170 million. It is written off. There is no

debt remaining on Bay d'Espoir. It has a book value of $150 million. Based on

this Province's own cost of putting in - and I will use an example - Paradise

River, just in 1989 they put in 8 megawatts at $21.4 million, over $2.5 or $2.6

million a kilowatt.

If we look in 1984, the Upper Salmon, for example, was over

$2 million, 84 megawatts, $169 million, and the Bay d'Espoir project is worth

today, just at the minimal $2 million we have expended five years ago, estimates

are saying it is closer to $3 million a megawatt, Bay d'Espoir alone would be

worth $1.8 billion. It has a book value of $150 million. That is the valuation

that we are giving away. It is preposterous. It is an outright sale.

Bay d'Espoir itself is worth far, far more, three times the

value that this Province is looking in return for the selling of this Hydro. It

is ludicrous and ridiculous that this Province is trying to look at the value of

an asset. The replacement value of the untold dollars over and above, beyond

these, and the cost of dam replacements and so on, would drive into multi, tens

of millions of dollars value that we are passing away to investors around Bay

Street and Montreal, and other parts of this country and the United States. We

are sending away our most prized asset that is going to give returns to this

Province for generations to come, and the minister states: Only what is used for

electricity.

Does anyone ever think that the waters flowing over to turn

these turbines that the minister talked about is ever going to be used for other

than electricity? It is theirs, lock, stock and barrel. That will only happen if

this Province becomes a desert, the rivers dry up, and if that happens we might

as well pack up and go out of this Province anyway, because this Province will

be uninhabitable. That is the real truth that we are not hearing out there every

single day, and the minister should know better, and the Premier should know

better.

I really think the Premier knows better, but he is not

telling the whole story to everybody out across the Province. I don't know if

the Minister of Mines and Energy knows better. If he does, it's a shame, I say.

It is a downright shame.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. member's time has expired.

The hon. the Government House Leader.

MR. ROBERTS: Thank you.

Mr. Speaker, it is obvious that hon. members opposite, in

rising to present these petitions, are not seeking to voice the prayer of the

petition, or seeking to ask the House to take these petitions into account. All

they want to do is debate the bill.

Well, now, those of us who sit to Your Honour's left are

minded to encourage them to debate the bill. Accordingly, it has been an hour

since Question Period began, I move, pursuant to Standing Order 21, that the

Orders of the Day now be read. Let's go on to debate the bill.

SOME HON. MEMBERS: (Inaudible).

MR. SPEAKER: Order, please!

The hon. the Government House Leader.

MR. ROBERTS: Mr. Speaker, I would withdraw the motion on

that. I need leave of the House to do that.

AN HON. MEMBER: We will give you leave.

MR. ROBERTS: I would withdraw the motion. The hon.

gentleman told me that they had one more petition. We will deal with it, but the

point, is we are not going to allow this petition business to frustrate the

House coming to grips; we will sit until ten tonight, anyway, so we will have

ample time to debate the bill, then I can respond to the hon. gentleman's

comments on

section 4 of the bill.

MR. SPEAKER: Order, please!

Does the hon. the Government House Leader have leave to

withdraw the motion before the House, which is non-debatable? Is leave given?

AN HON. MEMBER: Yes, Mr. Speaker, we are agreed.

MR. SPEAKER: Still on Petitions, the hon. the Member for

Green Bay.

MR. HEWLETT: Thank you, Mr. Speaker.

I have a petition to the hon. House of Assembly from

twenty-five residents of the Springdale area and the prayer of the petition is:

`We, the undersigned, demand the Government of Newfoundland and Labrador not

privatize and sell Newfoundland and Labrador Hydro and ensure that Newfoundland

and Labrador Hydro remains a Crown corporation.' As I indicated, Mr. Speaker,

this petition is from approximately twenty-five people in the Springdale area.

It so happens that this is of particular importance to people

in that area because the company, Newfoundland and Labrador Hydro, has a

significant presence in the Springdale area and no doubt, if and when

privatization takes place there will be some job losses which will adversely

affect the local economy.

On a more general note, Mr. Speaker, I have had cause to

speak in the media, on Open Line and so on with regard to the unseemly

haste with which this government has been forcing this matter through the House

of Assembly, minimizing the debate wherever possible among the general public.

The same Premier who decried the lack of public debate in the Meech Lake

situation, is today forcing something of very great importance through this

Assembly as fast as humanly possible.

Today, Mr. Speaker, my colleague, the Member for Humber East

presented documentation showing that this administration, the Wells

Administration, had come pretty close to reaching an agreement on power

development in Labrador with Hydro Quebec and more particularly, some changes in

the existing and odious contract with regard to the Upper Churchill.

The ministers in the benches opposite would have us believe

that economic, international circumstances caused the government to back away or

caused the governments to back away from this proposed agreement but we, on this

side, Mr. Speaker, have our suspicions that there may be other factors at play

here, that this government seems to be utterly preoccupied with the private

sector. We have seen through the Upper Churchill, what the private sector has

done in terms of hydro development in Labrador; we know that this new Hydro

corporation, if created, will be able to do hydro works in Labrador and, without

having a public policy purpose driving this particular company in Labrador, we

could see a repeat of the Upper Churchill mistake on the Lower Churchill River

and the people of our Province will pay again for decades and decades for having

given something away that was ours to start with.

Thank you, Mr. Speaker.

MR. SPEAKER: Order, please!

The hon. the Member for Waterford - Kenmount.

MR. HODDER: Mr. Speaker, I am pleased to rise and support

the petition presented by my colleague, and again, the prayer of the petition is

that the government would reflect on the privatization bill that is before the

House and that they would allow for some public discussion.

Mr. Speaker, I think it is becoming obvious to all hon.

members that the general public in this Province are concerned. They are as much

Newfoundlanders and Labradorians as you or I; it is their Province, their

future, their children and grandchildren and their resources, and, Mr. Speaker,

what people are saying is that they would like to have a delay. The government

has done a very terrible job. If they have the rationale to present to the

public, if the have a game plan, they should have made it known to the citizens

of Newfoundland and Labrador a long time ago, and what people are saying is that

they would like to have the reasons why, they would like to have it explained,

would like to be able to refer this matter to a committee of experts. Probably,

if we had had a little more public input on the terms of Confederation in 1949,

we would not have let the entire management of the fishery go to the Federal

Government. Probably, if we had had a little more public review in the 1960s, we

would have avoided the pitfalls of the `no escalator' clause in the Churchill

Falls contract.

Mr. Speaker, the true essence of democracy is the way in

which we interact with those who elect us, and certainly, while there are people

who believe that in politics the elected people should take the `good shepherd'

approach, meaning that once you are elected then you will guide the population

along, and take a rather conservative, narrow

interpretation of your role as the

elected official, we believe that on this particular issue we have to be more

visionary. We have to be more liberal, to put it in a -

AN HON. MEMBER: Small `l' sense.

MR. HODDER: A small `l' liberal. We have to maintain a

close relationship with the people who elect us.

Mr. Speaker, it is totally illogical for the government to

refuse to have public hearings on this kind of matter. Robert Louis Stevenson,

in one of his articles, wrote: `Everybody, soon or late, sits down to a banquet

of consequences.'

Certainly, for the last forty-five years, we sit down to the

banquet of consequences arising from giving control of our resources in the

fishery to the Federal Government in 1949. We sit down to a banquet of

consequences arising from the Churchill Falls agreement. We sit down to a

banquet of consequences when we gave too much control of our forest resources to

multinational companies in the early part of this century and in the 1920s.

Certainly,what people are saying is, let us today reflect.

Allow the public to have an opportunity to have public hearings, to give an

opportunity to the government in a reasonable atmosphere for a committee of the

House to make sure that thirty years from now we aren't hearing our political

people talk about the banquet of consequences in a negative way arising from the

privatization of Newfoundland Hydro in 1994.

The government, I do believe, should be advised to do the

right thing. That is why they should take measures to assure the merits of the

proposal are communicated to the people, that the people are assured that there

is an ample provision for dialogue, and that their viewpoint is appreciated.

What is there to hide? There can't be anything to hide. It's their Province, and

answer questions like the question about jobs.

MR. SPEAKER: Order, please!

The hon. member's time has elapsed.

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

AN HON. MEMBER: (Inaudible) Orders of the Day.

MR. SPEAKER: The hon. member wishes to call Orders of the

Day. Before doing so, I wish to make a ruling on some matters that were raised

by the hon. the Leader of the Opposition and the Member for Humber East.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

I had intended to do this earlier, but I was unavoidably

detained and so was not here when there was a larger captive audience to pass on

the ruling.

On Monday, March 7, 1994, the hon. the Leader of the

Opposition and the hon. the Member for Humber East alleged that the hon. the

Premier and the hon. the Government House Leader had breached their privileges

as members of this hon. House. The allegations were similar in that both members

alleged that answers given to questions on a previous Friday, March 4, 1994,

were deliberately, intentionally, or knowingly misleading.

The question of the hon. the Leader of the Opposition

concerned government's role in an advertising campaign to sell shares in

Newfoundland Hydro, while those of the hon. the Member for Humber East concerned

the retention of the law firm of Chalker, Green and Rowe by Newfoundland Hydro

or government to do legal work on the Hydro privatization.

Let me first of all thank hon. members who participated in

the discussion on the issue. Their comments, while at variance with each other,

were insightful, thought-provoking, and ultimately helpful in deciding the issue

before the House.

Secondly, I have reviewed and relied primarily on Joseph

Maingot's work, Parliamentary Privilege in Canada , and for a more general

discussion on Beauchesne's Parliamentary Rules and Forms .

This Legislature has received those privileges acquired and

sometimes wrestled from the Crown by the British House of Parliament over the

last eight or so centuries, starting for the most part with the Magna Carta in

1215 and going on to probably the Bill of Rights in 1689. Those privileges are

claimed by the Speaker from the Lieutenant-Governor on the occasion of the

opening of each Assembly. The phrase that is used is: And the claim is made for

all those undoubted rights and privileges.

While those privileges may be undoubted, it is difficult to

find an exhaustive list of them. I expect that the word "undoubted" as used in

parliamentary language on that occasion, is used for much the same reason that

the words "et cetera" is used in common terms, and that is to bridge a lack of

knowledge or definition.

Having said that, it is my observation that the privileges of

hon. members, by and large, reside in and are meant to regulate not the

relationships with each other, but rather with non-members. That is, that

members do and must enjoy a privileged position in society in order to properly

perform their duties. These privileges include freedom of speech, and from

lawsuits for slander and libel for matters discussed in the House of Assembly,

the right to exclude the public from its deliberations and to enforce its rules,

and, of course, the greatest comfort to us all, freedom from arrest for a

variety of offenses while within the precincts of the House.

Despite these manifest privileges, I am unable to find any

recognition in our long history of a privilege that requires one hon. member to

tell another the truth, although one would piously hope that members would

choose to do so. In fact, Maingot specifically states that it is not a matter of

privilege. That is not to say, however, that members' comments and conduct

cannot constitute grounds for contempt or points of order. But comments and

answers will not, of themselves, constitute grounds for a proper point of

privilege.

Finally, it must be noted that our preservation of the quaint

parliamentary fiction, that members are all hon. ladies and gentlemen, and

therefore, do not lie to or mislead each other, results in that the very

accusation, that one member has deliberately misled or lied to another, itself

is unparliamentary, and therefore cannot found a point of privilege, in that

that comment itself is out of order. Consequently, since a member would be out

of order to accuse another of deliberately misleading or lying to the House and

must withdraw such a remark, it can never form the basis for a prima facie case

of breach of privilege.

I just want to read one paragraph from Maingot which deals

with those thoughts much more concisely. It is found on page 205 of the work I

earlier referred to. I quote:

"To allege that a member has misled the House is a matter of

order rather than privilege and is not unparliamentary, whether or not it is

qualified by the adjective `unintentionally' or `inadvertently.' To allege that

a member has deliberately misled the House is also a matter of `order,' and is

indeed unparliamentary. However, deliberately misleading statements may be

treated as contempt. In the Canadian House of Commons, however, members attempt

to get such matters before the House on a `question of privilege' when there is

merely an allegation of contempt rather than an admitted matter (as in the

Profumo case)," - with which I'm sure most members are familiar - "and the

problem arises because the use of unparliamentary language is not permitted in

the House and therefore questions of privilege and motions in support must be

purged of such language."

For these reasons, therefore, the hon. members have not made

out a prima facie case of breach of privilege.

MR. SIMMS: Excellent ruling, though, Mr. Speaker, I have

to give you credit for that.

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

MR. ROBERTS: Mr. Speaker, I take it we are now at Orders

of the Day after that erudite disquisition to which we all listened with profit

and pleasure.

Orders of the Day

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

MR. ROBERTS: Your Honour, before we go to the order of

the day I wonder if - just so I don't forget, on the off chance - I may move

that the House not adjourn at 5:00 p.m.

MR. SPEAKER: It is moved and seconded that the House do

not adjourn at 5:00 p.m. All those in favour of the motion, `aye'?

SOME HON. MEMBERS: Aye!

MR. SPEAKER: Contrary-minded, `nay'?

SOME HON. MEMBERS: Nay!

MR. SPEAKER: Motion carried.

The hon. the Government House Leader.

SOME HON. MEMBERS: Oh, oh!

MR. ROBERTS: The hon. gentleman, the Member for Grand

Falls says: I would give leave. I appreciate that but `all roads lead to Rome',

as the saying goes, so we will get there anyway.

Mr. Speaker, I would ask if you would be good enough to leave

the Chair and call Bill No. 1, which is in Committee of the Whole, Sir. That is

the Hydro act, in case anyone is under any surprise.

On motion, that the House resolve itself into Committee of

the Whole, Mr. Speaker left the Chair.

Committee of the Whole

MR. CHAIRMAN (Barrett): Order, please!

Shall clause 1 carry?

AN HON. MEMBER: Carried.

MR. SIMMS: No, not quite yet!

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

MR. WOODFORD: Thank you, Mr. Chairman.

I have a few words pertaining to Bill 1, Mr. Speaker. I had a

few words to say the other night on the closure bill. I could only speak for

twenty minutes and you can't say much in twenty minutes, that's for sure.

AN HON. MEMBER: (Inaudible).

MR. WOODFORD: No, no, not today, I'm talking about the

closure bill last Thursday night. I know about today and I know about the gag

order, I know about the muzzle order and I know all about the blinkers on

members opposite, Mr. Chairman.

I concluded the other night, Mr. Chairman, by saying that in

nine years in the House, it is one of the most controversial topics that I have

experienced, I know, in my district, and elsewhere around the Province.

Mr. Chairman, I mentioned the fact that Hydro rates would

escalate a lot more than the figure the government has sent around the Province

- or they said they were going to send around the Province - in a package to

every householder, to tell them how good this deal was for privatizing

Newfoundland Hydro. Now, Mr. Chairman, if this deal is so good and if it

contains so many goodies for Newfoundlanders and Labradorians, why isn't the

government telling the people? This particular brochure that's gone around the

Province tells absolutely nothing. It gives householders around this Province a

little more to mull over or to chew on but they don't understand it any more,

based on what the government has said publicly so far - and it certainly doesn't

clarify anything that they said around this Province, especially government

ministers.

Now, I say to members opposite, Mr. Chairman, and I don't

have it on this one but apparently this is one here that has gone around the

Province; and on the back of it, it shows the estimated effect on customers'

bills and so on for 1994, on 700 kilowatts per hour based approximately on a

$150 bill, and so on, per month.

Now, if members opposite don't do anything else - and I say

to the backbenchers especially, that if they don't do anything else over the

next few days, take that and go back and do a little bit of homework on what has

happened since 1990. This is a complete fabrication of what has happened to the

increase in Hydro rates since the government changed its policy in 1989-1990.

What happened? I remind members. They dropped the $30 million subsidy to the PDD

system. They charged a 1 per cent fee to float Hydro's debt, Hydro's guarantees

or bonds and out of 1 per cent they got $9 million.

Now, the government didn't have to come and privatize

Newfoundland Hydro in order to do that, in order to get that off their books or

anything else. They could have gone on and on and on and charged 2 per cent next

year, they could have charged 3 per cent the next year for the debt to float

their bonds. I'll get into some of the other subjects pertaining to the debt, to

equity ratio in Newfoundland Hydro later on tonight, Mr. Chairman, but I want to

stick to the rate increases. What happened when Hydro went to the PUB in 1990?

They went for a 3.9 per cent increase based on one $10 million, because the $30

million was spread over three years. On $10 million, a 3.9 per cent increase.

What did that result in? That resulted in an actual 2.2 per cent increase to

Newfoundland Light who distributes 90 per cent of the power. They only generate

10 per cent of the power, the rest comes from Newfoundland Hydro. That resulted

in a 2.2 per cent increase. And what happened? What happened, Mr. Chairman?

Rates to householders went up by $4.40 a month on a $10 million first year on

the PDD system based on a 2.2 per cent increase.

MR. SIMMS: You didn't know that, did you?

MR. WOODFORD: Now, how many members know that?

AN HON. MEMBER: None. Not one of them over there.

MR. WOODFORD: And that's fact, it's not fiction. All you

have to do is pick up - they can go back to Newfoundland Hydro's - the PUB

ruling, and all they have to do is pick up all the media quotes of the day and

they will tell exactly what happened. For instance if we took the $30 million in

one year, and it is no trouble, all you have to do is three times that, and what

are we into, $13.20 odd cents?

MR. SIMMS: $13.00 a month.

MR. WOODFORD: Based on a $200 a month light bill up to

700 kilowatt hours. Mr. Chairman, in the estimated rate increases that are gone

around the Province today for people to look at, from 94 to 98 shows a 5 per

cent increase. What does it say for the first year, Mr. Speaker? The first year

- well I notice they have not even got it on this that has gone around the

Province. It is in the package but it is not on this. The first year there is a

0 per cent increase, no increase for 1994, and four years after that there is a

12, a 4.5, 4.5 and a 4.5, so really your average is coming on four years, a four

year increase and not a five. It is shown here as 1 per cent.

Now, this is wrong, this is not right based on facts, and the

sooner hon. members opposite realize that and tell their constituents what is

going to happen with regards to rate increases, the sooner the people - well,

the people around the Province know it anyway now, because even without knowing

what the rate of increases are going to be, they are upset. They are against the

privatization of Newfoundland Hydro, and like I said the other night this

particular piece of legislation will be the albatross around this government's

neck.

They have a 12 per cent increase for 1995 listed on the

estimated rate increases, Mr. Speaker. Now, that 12 per cent increase, based on

the actual increase that was given in 1990, 1991, and 1992 would have resulted,

if you mind to take that into consideration, and say it was almost five and a

half times the increase that was given in 1990. Now, if you took that based on

2.2 per cent of what it meant on a $200 light bill you are talking about over

$20.00, $22.00 or $23.00 a month based on that particular figure. Mr. Speaker,

only for the rate stabilization plan at that time, because the government

charged a 1 per cent fee to float Newfoundland Hydro's bonds, only for the

charge on that and only because they took the $9 million that they were suppose

to get for floating Newfoundland and Labrador Hydro's bonds at that time, the

rate increases would have been double in 1990. They were $4.40 but they would

have been $8.80. The only thing that saved it, Mr. Chairman, is the fact that

they took the $9 million from the rate stabilization plan in 1990 and put it

against the fee that has been charged by government.

Now, Mr. Chairman, that begs another question. What is going

to happen now when this is privatized? What about the rate stabilization plan

that was there? That plan was there so that rates would be kept down and in 1990

the plan resulted in a rate reduction of 1.3 mils per kilowatt hour for Hydro's

retail customers and a .24 mil savings to the industrial customers in the

Province. If Newfoundland Hydro is gone the rate stabilization plan is not going

to be continued by new Hydro. This has not been brought up at all, about this

rate stabilization plan, but yet in 1990 the very $9 million that was charged

Newfoundland Hydro was saved from the consumers of the Province because they

took it out of the rate stabilization plan, and even though they did that it

still saved the people of the Province 1.3 per cent because of the three year

average under the rate stabilization plan. That is the way the plan worked. The

plan is over a three year period and like I said it saved the industrial

customers around the Province a .24 mils.

Now, Mr. Chairman, based on those two figures, those two

figures alone, all we have to do is go back and look at what happened to the

rate increase, like I said, in 1990 and try to tell me or convince the people of

the Province that this particular piece of paper that has gone around the

Province, is right.

Mr. Chairman, you take those statistics and just look at the

increases in the last two or three years, and it is like night and day, there no

relevancy to it, there is no logic to it and, Mr. Speaker, I can assure you that

over the next few years, there are all kinds of little goodies put in this bill

for one reason and one reason only, and that is to take people through the next

few years so that there won't be a significant rate increase as compared -

MR. CHAIRMAN: Order, please!

The hon. member's time is up.

MR. WOODFORD: Thank you, Mr. Chairman.

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

Labour Relations.

MR. GRIMES: Thank you, Mr. Chairman.

I just wanted to take the opportunity in third reading again

now on clause-by-clause even though we haven't gotten to any of the clauses yet,

but I hope that we will maybe later today since we have some time allocated for

exactly that to occur, that members of the Opposition who have been asking for

an opportunity to bring forth their specific concerns about the bill that has

been passed by this Legislature and in fact, the House has agreed in principle

with the notion of privatization, so whether or not there should be

privatization, that matter, Mr. Chairman, I remind all hon. members again, has

been decided by the Legislature and really we should now be at the stage where

we should turn our attention to what are the issues in clause 1, or as the hon.

Member for Humber East repeatedly calls out: what about clause 4?

Well, certainly we would like to get to clause 4 later today

and let the hon. member ask her specific questions about clause 4 and get the

specific answers; because certainly, we would like to allay any fears that

people have because members on this side of the House save one, at this point in

time, are convinced and have supported the notion that the general thrust and

direction outlined in this bill, the whole prospect of privatization is one with

which we agree, and to follow on some of the comments I was making yesterday,

Mr. Chairman, we agree with it because we believe that it accomplishes exactly

what we knocked on doors to get elected to come here to do, and that is to

better the lot of Newfoundlanders and Labradorians, and to make sure that we

provide better opportunities for them and get on with some other things that we

have to do in terms of governing the Province at this point in time.

I would like to point out, Mr. Chairman, as well, in this

intervention in the debate that the government has acknowledged up front in the

information sent to every household in the Province that their rates will

increase, that is not news to anybody, I don't think there is a member sitting

in this Legislature or that there is a person living in Newfoundland and

Labrador, who does not fully expect that his electricity rates are going to

increase over the next five years whether we privatize or not, and what we have

said quite clearly, is that there is an additional price attached to

privatization.

By returning it to the private sector and by capitalizing at

a higher rate than it is now and by moving from the 18 per cent equity to a

higher equity, there is a cost associated to that and just as with all other

costs associated with hydroelectricity, when there is a cost, for whatever

reason, the utilities themselves, whether publicly or privately owned, go to the

Public Utilities Board and spell out what their costs are, and if they are

legitimate, on the basis of that, the Public Utilities Board decides what the

new rates are.

We cannot predict exactly because, as was pointed out here,

it is not the role of this Legislature, it is not the role of anybody here but

everybody knows that even if this bill never ever saw the light of day, that

there would be a presentation made, a representation made by Hydro and by

Newfoundland Light and Power, whether that Hydro is publicly owned or privately

owned before the Public Utilities Board within the next year or so, seeking rate

increases, and whatever the basis of it is, it will be decided on that matter.

In fact, Mr. Chairman, the other part of it is that we wanted

to put that information up front and make sure that everybody knows and there is

no doubt and it is clearly spelled out in the bill, that in fact there are

deliberate efforts taken in different parts of this bill, to make sure that

certain amounts of money tied up in this are passed back directly, either

through the companies or through government taxation, to the benefit of the rate

payers, because it is a very real concern of this government in putting forward

the privatization that we don't want to see exorbitant rate increases for the

rate payers.

The choices in terms of the debate, in terms of principle,

are that the same people, the rate payers, are taxpayers, and either they will

pay through this privatization thing slightly increased rates, or if the

government is left without the cash and the wherewithal to do some things that

it can do because of what will be recognized from the sale of this asset, then

they are likely to be hit, instead of with rate increases slightly increased, as

we have indicated quite openly in the documentation, instead of slightly higher

rate increases they are likely to get slightly higher taxes.

So one way or the other, the government will either use the

cash from the sale to keep taxes down, or if we had decided not to go ahead with

the sale, there would be no sale and the hundreds of millions of dollars that

people have been talking about - the number will only be known when the sale is

completed - that money which will come to the government would have been raised

through other sources by taxation.

The same people are paying. There is only one group of people

that pay. The taxpayers and rate payers are not two separate groups of people,

and the government needs the money to offer the services that the people expect

and want, and have told governments repeatedly that they want them to stay in

place, and one way or another there will either be a tax increase, or if some

cash is realized by the government, as it will be, then the tax increases won't

be necessary, but the people admittedly and up front, in every bit of

documentation - the government has never said there won't be rate increases.

There will be rate increases without privatization, and there will be slightly

higher increases with privatization, and that is out there for everybody in the

Province to recognize, and over the three or four years between now and the next

election they will all have their own experiences, I say to the hon. Member for

Humber Valley. They will look at their light bill. They will get a monthly

reminder of exactly what happened, and if they are convinced that what you

propose to be true, that these exorbitant, unrealistic rate increases show up on

their bills, then they have every right to throw this group out of office,

because we are convinced that is not going to happen.

You know no more about what the rates are going to be than we

know in the finality, because of the fact that the Public Utilities Board will

decide, based on the information that they get, prepared and presented by

experts in the field, in terms of energy and finance - not us, who aren't those

kinds of people - and it will be decided on that basis.

I want to get back for a couple of minutes, too, since we are

still on a general discussion, since we haven't gotten into the

clause-by-clause, which I hope we do later today, to the fact that really, in my

opinion, and it's just exactly that, there isn't a lot of credibility to most of

the opposition that has been raised in this Legislature, because again we have

the whole case, as I see it, and I outlined it yesterday a little bit, built on

the premise that the Opposition, the official Opposition at least - I can't say

too much for the lone Member for St. John's East - but the official Opposition

have indicated and built their opposition to the deal on the basis that they are

trying to make the people of Newfoundland and Labrador believe that the Premier

is somehow a crook; that he is cooking something up here; that he is not to be

trusted, and the Member for Humber East leads the charge on almost a daily

basis, that there is some kind of deal cooked up here and you can't trust this

man, and therefore there is something wrong with privatization, because there is

a crook in the House. That is the basis on which I have heard all the

representations made. That particular member repeatedly suggests those kinds of

things, and lays out that kind of innuendo, which adds nothing to the debate.

As I mentioned again yesterday -

AN HON. MEMBER: A point of order, Mr. Chairman.

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

MR. E. BYRNE: Mr. Chairman, nobody here has called the

Premier a crook in this House. The basis of the Opposition's opposition to this

particular legislation lies in the contents and the details of the bill. It is

not based upon some fairy tale that the Minister of Employment and Labour

Relations is trying to put forward.

I just want to rise on a point of order and correct the

statement there that the discussion or opposition on this piece of legislation,

our opposition, is contained within the details of the legislation, the bill

presented to us.

MR. CHAIRMAN: There is no point of order, just a

disagreement between two hon. members.

The hon. the Minister of Employment and Labour Relations.

MR. GRIMES: Thank you, Mr. Chairman.

Again, in a general context, I wanted to make a couple of

other comments about the point I made yesterday as well, that there has been a

great deal of effort put into the rhetoric around this, rather than the facts,

in dealing with the issues, which we could do in clause-by-clause debate if

members opposite were really interested in getting into that sometime today.

There's lots of time available for it, I hope we do that.

As I mentioned yesterday, to talk about the water rights -

the issue was raised here again today about the water rights. The matter has

been explained to the members opposite ad nauseam, 100,000 times we've told them

that there's nothing to be concerned about with respect to water rights, and if

they feel there is, that in this clause-by-clause debate, if they would like to

suggest some amendment to clause 4 that would give them the assurance that what

we are telling them is exactly what the words in the bill say, we have already

expressed a willingness to do that. There is absolutely no intention, and we

contend that there is absolutely nothing in the words now that would ever lead

to the possibility where you would have this giveaway of these water rights, as

it is characterized by members opposite. It is just not possible. And its

nothing that is even in the thinking of anybody here who has had any debate or

discussion about this bill. Why anyone would suggest that any elected member

would come in here and want to be party to a piece of legislation that gives

away rights of Newfoundlanders and Labradorians to access the water on the

rivers and streams, that they're accessing today, even though some of them are

dammed and used for hydroelectric production, but the people are still allowed

to use those water streams, those rivers and so on.

MR. CHAIRMAN: Order, please!

The hon. member's time has elapsed.

MR. GRIMES: Mr. Chairman, I might return to some of those

matters later in the debate. Thank you.

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

MR. HARRIS: Mr. Chairman, I rise to speak on our general

discussion of clause 1 of the act which is, after all, called

an act to

privatize Newfoundland and Labrador Hydro.

We oppose this legislation for a number of reasons, Mr.

Chairman. Part of it has to do with the increased costs that are going to be

devolving upon Newfoundland and Labrador rate payers, it is great matters of

principle.

There are also concerns raised by hon. members on both sides

of the House, Mr. Chairman, as to the inability to get the right amount of

information. I would only quote for hon. members the report in today's

Evening Telegram by the Member for Pleasantville, who said that ever since

the bill was presented in the House of Assembly, he has been trying to clarify

the figures that are being used. In trying to get the information that he

requires, `working at it full time,' he says, `and with more access than the

general public, I still have not succeeded in getting the information I need.'

Now, Mr. Chairman, as a member of the House of Assembly on

the government side, he can't get the information he needs to make up his mind

about this and he still thinks it is not a very good deal. Now, Mr. Chairman,

what information is being withheld from the Member for Pleasantville? What

information is the Member for St. John's South not asking for? Because if there

is information being withheld, Mr. Chairman - because the government members

opposite haven't been asking for it, haven't been insisting that it be made

known, Mr. Chairman, that's what is going on over there, despite all the talk

about it being a good deal, etcetera, etcetera, lining up behind the Premier who

says that as far as he is concerned it is a good deal, so all the members in the

backbenches are coming behind and saying, yes, yes, yes. When an hon. member

opposite says, `I can't get the information' - he has been asking questions and

he's not getting the information - then I have a lot of difficulty with the

intentions and the purpose behind what this government is doing.

Now, Mr. Chairman, yesterday in the House - as another

example - yesterday in the House, the Minister of Finance, who is supposed to

know what he's talking about, got up and said that the $1.2 billion worth of

Newfoundland and Labrador Hydro debt is costing $147 million a year to service

in interest payments, and that's correct, it is costing $147 million to service.

He said that this was a debt that was unconscionable, could not be paid,

shouldn't be recognized and we want to get that debt off the books because it's

costing $147 million a year in interest. Mr. Chairman, we're trying to get the

real numbers out of the government since that speech. I did a little bit of my

own figuring, I've asked questions and finally, Mr. Chairman, I've got it

figured out, that the $147 million that it is costing, right now, to pay the

Newfoundland and Labrador Hydro interest debt is going to increase to over $182

million per year to pay for the capital in both interest and equity costs of the

New Hydro corporation.

This amount of money, this $147 million per year, is going to

expand to $182 million because it is going to have to pay not only the interest

costs now, Mr. Chairman, which are going to be reduced, but the increased equity

cost. Because that equity has to be paid for and it has to be paid for at a

higher rate than the interest. The Minister of Finance has confirmed these

figures, that I'm right. It is now going to be $182 million per year to service

both the debt and the equity at the rates of 57 to 43, debt to equity ratio,

down from 82 to 18.

Mr. Chairman, this is, as some hon. member said earlier,

eight days into the debate and it takes eight days into the debate to get this

figure out of the government, who are going around trying to frighten people

into saying: There is $147 million per year that has to come out of the rate

payers to cover this debt, we have to get rid of this debt! What are they going

to do? Those same rate payers are now going to be paying $182 million a year to

cover the costs of capital, of operating Newfoundland and Labrador Hydro.

The Member for St. John's South shakes his head. If he shakes

his head it is because he is not asking the Minister of Finance the kinds of

questions that this hon. member is asking him and eventually get the answers.

The Member for St. John's South can't be asking any questions. He can't be

asking any questions, not even the kinds of questions that the Member for

Pleasantville is asking but can't get answers to.

Mr. Chairman, this is an example of how cavalier the

government is being with this issue and with the realities of the financing of

Newfoundland and Labrador Hydro in this Province. They are quite prepared to go

around and bandy about facts about $147 million worth of interest payments on

the Newfoundland and Labrador Hydro debt, allowing people to think that this is

somehow coming out of the treasury when it is rally coming out of the rates.

Instead of telling the whole story they lead people to believe that this $147

million a year burden is somehow being relieved by privatizing Newfoundland and

Labrador Hydro when, in fact, the obligation is going to be increasing to $182

million per year.

Now, Mr. Chairman, that $182 million covers the whole cost of

the debt plus the whole cost of equity. The Minister of Finance says that there

is some cost of the 18 per cent equity that is already there, in the

neighbourhood of 5 per cent, and that might account for the difference between

what the government says the additional cost is and what I say. I've come up

with a figure of $35 million per year extra. The government says $25 million.

That may be accounted for by the fact that there is about 5 per cent return on

the 18 per cent equity that the government now has - about 5 per cent return on

equity. The 18 per cent equity, I say to the Member for Fogo, that is now

theirs, the debt/equity ratio 82 to 18. Newfoundland and Labrador Hydro has been

getting around 5 per cent return on that equity built into the rates. Five per

cent of 18 per cent equity is about $9 million, I guess, something around -

well, exactly $9 million if it is exactly 18 per cent - so, an additional $9

million if it is 5 per cent of 18 per cent.

These figures are figures that haven't been made abundantly

clear to the people of Newfoundland, and it is one of the reasons why people

aren't supporting it. There are a lot of other costs thrown in on the so-called

rate base. The rate base is a figure that is used in Public Utilities Board

circles to base - that is the amount - and it is considered the amount of

capital used in generating the electricity that is required. On each and every

dollar of capital there is a return expected, and that return is shared up

between retained earnings and various other financial expectations. Retained

earnings plus dividends to shareholders. The retained earnings portion increases

the value of the equity and the dividends, of course, provide income to the

shareholders.

This is creating a new cash flow out of this Province every

day, year after year, to the point that we are going to be, as part of

Newfoundland and Labrador Hydro, sending an income stream out of this Province

that looks like another Churchill Falls deal, which sends electricity out day

after day, year after year to the Province of Quebec. What we will see here is

an income stream in dividends flowing out of this Province year after year,

going down the tubes, so much so, that protestors outside the House of Assembly

yesterday, provided a new version of the song, `We'll rant and we'll roar like

true Newfoundlanders'. Mr. Chairman, their additional verse goes like this:

MS. VERGE: Sing it.

MR. HARRIS: You want me to sing it? I don't know if I

will sing it or not but:

`We'll rant and we'll roar like true Newfoundlanders\We'll

rant and we'll roar on deck and below\For if we sell Hydro we'll surely strike

bottom\And right through our fingers our money will flow.'

Mr. Chairman, that says quite eloquently what is going to

happen if we have this bill passed in this House and the Hydro corporation as it

presently exists, is passed over to private enterprise or private owners who

will be, for the most part, residing outside this Province.

We only have to look to organizations like Newfoundland and

Labrador Hydro - and maybe the Minister of Mines and Energy will participate in

this debate and tell us here, how many or what percentage of the shares of

Newfoundland and Labrador Hydro are held in Newfoundland? I don't want to know

how many shareholders there are, because there could be thousands and thousands

of people with 10, 15, 100 or 200 shares, but what percentage?

AN HON. MEMBER: (Inaudible).

MR. HARRIS: Of Newfoundland Light and Power I am asking -

what percentage of Newfoundland Light and Power shares are held in Newfoundland?

AN HON. MEMBER: Twelve per cent.

MR. HARRIS: Twelve per cent, says the Member for St.

John's South. I would suggest