November

23, 1992

HOUSE OF ASSEMBLY PROCEEDINGS Vol.

XLI No. 69

The House met at 2:00 p.m.

MR. SPEAKER (Lush): Order, please!

Statements by Ministers

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

Culture.

MR. WALSH: Thank you, Mr. Speaker.

I am pleased to inform this hon. House that the Federal

Government, the Government of Newfoundland and Labrador, and the Labrador Inuit

Association have agreed on joint participation in a study to determine the

feasibility of establishing a national park in the Torngat Mountains area of

Labrador.

The spectacular area of the Torngat Mountains, Mr. Speaker,

provides excellent representation of the Northern Labrador mountain region. The

Torngat Mountains are the highest mountains east of the Rockies, and the area is

considered to have one of the world's most beautiful wild coastlines.

Breathtaking fiords cut inland, and towering cliffs rise abruptly from the sea.

Wildlife habitat includes a portion of the range of the George River caribou

herd, estimated to number over 600,000 animals. Numerous bird species native to

the eastern Arctic are found as well; marine mammals, including whales and

seals, are common in the adjoining waters, and arctic fox, polar bear and black

bear can be seen. The area is also rich in cultural resources with numerous

archaeological and historic sites along the coast.

and Labrador studied this natural region, and identified the area that provided

ideal representation of it - the Torngat Mountains. However, in public

discussions at the time, the Labrador Inuit Association indicated it did not

want to consider a national park until its land claim was being dealt with;

consequently, all studies and public discussion concerning the possibility of a

national park in this area was suspended in 1979. Recently, renewed discussions

between the federal and provincial governments, and the Labrador Inuit

Association, have indicated that all parties are now interested in studying the

feasibility of establishing a new national park in northern Labrador.

The feasibility study is a public process, designed to

solicit the views and concerns of all interested persons and groups.

The start of the study confirms the direction provided by the

Province's Speech from the Throne last spring, in which the government

highlighted its commitment to participating in the feasibility assessment. It

also fulfils a commitment made in Change and Challenge - A Strategic Economic

Plan for Newfoundland and Labrador. Given the level of co-operation between the

parties, I have high expectations that the end result will be a national park in

the Torngat Mountains area.

It had been anticipated that another study would be announced

today, namely, joint participation by the Federal Government, the Government of

Newfoundland and Labrador, and the Innu Nation in the feasibility of a national

park in the Mealy Mountains area. However, certain confrontational tactics

employed by the Innu Nation in recent days have caused an unforeseen delay. In

spite of this, the Province is still committed to pursuing a national park in

the Mealy Mountains area.

Mr. Speaker, my statement.

SOME HON. MEMBERS: Hear, hear!

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

MR. WOODFORD: I thank the minister for a copy of his

statement received well before the time of the House opening, so I would like to

thank the minister for that.

This is a positive statement, Mr. Speaker. I do not see

anything negative in this, anything to criticize whatsoever. I think it is

something that we need more of in the Province, we have to take care of the plan

last year by the federal government, the Green Plan; this would probably be

integrated with something like that, more parks, more spaces in our Province set

aside for the people of the Province and for our children and grandchildren

somewhere down the road to be able to enjoy. We have seen too much already

destroyed in this Province, and it is about time we take hold of what is left

and make sure that we try to manage it in a proper and constructive way.

However, Mr. Speaker, the minister's reference to the time

span, some twenty-odd years ago since discussions started pertaining to this

particular park, I sure hope that it is not going to take the same length of

time again as it did in the early 1970s, so one positive aspect of this is that

you are dealing with two different aboriginal groups and it seems like the

settlement of this one is probably something that won't hang it up anyway, they

sort of agreed to it, so I suggest to the minister now, along with his federal

counterparts and the aboriginal people who are involved in this, to get down to

business and try to get this in place as soon as possible and to create jobs in

the park itself and not only that but to add to the tourism potential of this

Province.

Thank you.

MR. HARRIS: On a point of order, Mr. Speaker.

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

a point of order.

MR. HARRIS: I ask leave of the House to address the

ministerial statement, Mr. Speaker?

SOME HON. MEMBERS: Yes.

MR. SPEAKER: The hon. member has leave.

The hon. member may proceed.

MR. HARRIS: Thank you, Mr. Speaker.

I want to welcome the statement of the Minister of Tourism

and Culture today to announce the feasibility study on the Torngat Mountains

proposed national park. I think it is something that we have all looked forward

to in this Province, because that area of the Province is quite a spectacular

region and has many natural features that need to be protected and acknowledged.

I would say two things, however. I hope, in the discussions

leading up to the establishment of this park, that we do not do what happened in

Gros Morne, and get involved in a confrontation between the people who live

there -

MR. SPEAKER: Order, please!

MR. HARRIS: - and live off the land, and have been

dispossessed of their homes, and that in fact with the participation of the

Labrador Inuit Association I would hope that integrated into the national park

is a land base for the Labrador Inuit who happen to live off the land and may

well be able to be integrated into that park and have a great deal of say over

the kind of park that it will be.

I welcome the announcement. I ask the government to look

further into its commitments to developing protected areas. There are some

fifty-four or fifty-six natural habitats in this Province, apparently only

nineteen of which are being protected or partly protected. So I ask the

government to look further into that, and perhaps the Minister of Environment

and Lands will have something to say on that later in the session.

Thank you.

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

Provincial Affairs.

MR. HOGAN: Mr. Speaker, as honourable members are aware,

the concept of a uniform municipal business tax rate for utility companies has

been under active consideration by various governments going back almost

twenty-five years.

Today I am pleased to announce that government has taken the

decision to establish a standard rate of municipal business tax applicable to

utility companies. We have also taken the decision to include Newfoundland Hydro

and cable television companies and to make them liable for this municipal

business tax.

Newfoundland Hydro will be required to pay grants-in-lieu,

but only where they provide service to the final customer.

The uniform rate of business tax on Newfoundland Telephone,

Newfoundland Power and cable television companies will be fixed at 2.5 per cent

of gross revenues of the companies earned in a particular municipality in the

year immediately preceding the tax year. This rate will be set by regulation and

it will be subject to normal review in the future.

Newfoundland Hydro, which to date has been exempt from this

municipal business tax, will be required to pay a grant in lieu of business tax

also at the fixed rate of 2.5 per cent of gross revenues to municipalities.

However, as indicated, Newfoundland Hydro will pay only in circumstances where

Newfoundland Power would be required to pay if Newfoundland Power were the

supplier.

The decision to make utilities and cable television companies

liable for a uniform rate of municipal business tax at a rate of 2.5 per cent of

gross revenues addresses the widely varying rates of business taxes that are

currently being charged by municipalities throughout the Province.

With respect to Newfoundland Hydro, it was felt that

municipalities should not be denied access to this tax simply because they are

served by a provincially-owned power utility.

Government has determined that there are enough similarities

between the cable television companies and utilities to include them under this

municipal business tax.

Cable television companies claim, however, that their

regulator, the Canada Radio Television Commission (CRTC) does not allow cable

companies to recover municipal tax expenses from customers and they are asking

the provincial government for relief.

The Department of Finance, in consultation with the

Department of Municipal and Provincial Affairs, will therefore undertake to

determine if a uniform taxation rate of 2.5 per cent is an appropriate amount

for cable television companies.

Additionally, I would like to point out that: 1) The

effective date is January 1, 1993; 2) Revenues generated from unincorporated

areas will be remitted to the Province's general revenue fund; 3) Utilities and

cable companies now liable for other applicable municipal taxes such as water

and sewer taxes and property tax will continue to be liable for these taxes; 4)

Property assessment values for utilities and cable companies will be changed to

exclude equipment and materials directly related to the generation and/or

distribution of services.

What the latter means is that only general property including

buildings and warehouses will be subject to property tax and that equipment

directly related to the generation, transmission and distribution of service

including substations will be exempt from property assessments. Some

municipalities happen to have within their boundaries, utility equipment (plant)

which is used to provide service throughout the Province. If these particular

municipalities were allowed to assess and tax such equipment in addition to the

municipal business tax on gross revenue, it would amount to double taxation on

the utility and, in our opinion, this would not be fair or equitable.

In simple terms, municipalities will be permitted to tax the

building but not the distribution and production equipment which is housed in

the facility.

As indicated, revenues generated from unincorporated areas

will be remitted to the Province's general revenue fund. This recognizes that

the Provincial Government generally provides municipal services in these areas.

We feel that a phase-in of the revised tax structure is not

necessary and that there exists sufficient time for both municipalities and the

affected companies to incorporate the change into their 1993 budget planning

process.

As we know, the Municipalities Act does not limit the amount

of taxes to be charged by a municipality and presently the rate of business tax

being charged by some municipalities on certain utility companies vary anywhere

from less than 1% up to 30% of annual gross revenue. The new tax will have the

effect of causing municipalities to spread the burden of municipal taxation more

equitably within their jurisdictions.

Amendments to the appropriate legislation will be introduced

during the current session of the House of Assembly to facilitate the

Province-wide implementation of these changes.

Any loss of revenues to municipalities due to the

establishment of this 2.5 per cent fixed rate of business tax on utilities and

cable companies will have to be recouped in the normal way through the taxation

methods of the respective councils.

Overall, significant additional revenues will be made

available to municipalities as a result of this uniform taxation rate of

business tax on utilities and cable television companies.

Mr. Speaker, the rate strikes a fair balance between the

interests of the companies and the municipalities. Additionally it minimizes

governments intrusion into the municipalities management of their own affairs.

At the present time, utility companies pay water and sewer

taxes and real property tax based on the assessed value of the property owned by

the company in a particular municipality and, as indicated, they will continue

to do so.

As indicated, Mr. Speaker, this matter has been under

consideration for many years. However, I am pleased today to announce that we

have a new standardized rate in place that is fair and equitable both for

municipalities and utilities.

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

SOME HON. MEMBERS: Hear, hear!

MR. WINSOR: Thank you, Mr. Speaker.

First, I would like to thank the minister for giving me an

advanced copy of his statement. I have had it for a couple of hours now, Mr.

Speaker.

The minister has implemented, I suppose, a proposal that has

been in the works for a number of years and might have gone even a little

further than most people had anticipated, because, Mr. Speaker, it requires Nfld

Hydro for the first time to pay utility rates. Mr. Speaker, in my own particular

district I am sure that is good news for the communities of Fogo, Tilting and

Joe Batt's Arm that will now get revenues similar to those that receive

Newfoundland Light and Power revenues.

Mr. Speaker, with respect to the change with Newfoundland

Tel, I am not sure that the minister has a handle on the impact that is going to

have on municipalities. Several municipalities have received them. Now, with the

formula changes, they are no longer allowed to assess the equipment inside, and

some small municipalities at a large exchange got a considerable amount of money

from them. This formula is now 2.5 per cent of gross revenues and in a given

community these revenues could be small, even though the exchange is there it

serves a much bigger area, they will be impacted very significantly by this

change, because now it is assessed on the community.

Mr. Speaker, I have to caution the minister about what he is

doing here, because by taxing Hydro, Hydro is going to turn around and ask rate

payers to increase the amount they pay too. As a public utility, they are going

to make a certain amount of money. If their expenses go up then they will go

back to the board again and ask for a rate increase. So perhaps we are going to

get taxed twice on it now, Mr. Speaker.

In addition to that, the minister points out that all

unincorporated municipalities will have their funds go to the general revenues

of the Province. Mr. Speaker, that excludes local service districts who are not

incorporated. Is he saying that these people will not accrue any of the

revenues? And how is it fair now that Newfoundland Hydro is going to have to pay

a tax to the Province on unincorporated municipalities, and Newfoundland Light

and Power does not have to pay a tax? Now Hydro has an unfair tax placed on it,

because Newfoundland Light and Power doesn't pay a tax for non-incorporated

municipalities and Newfoundland Hydro does.

Mr. Speaker, it is too early yet to have municipalities

consider the impact. While some will gain substantially, it might force others

into virtual bankruptcy, if they have been taxing the resource, the distribution

and the generation of electricity.

I think of Petty Harbour out here, for example, which

generates most of its revenues from the sale of electricity to Newfoundland

Hydro. What kind of impact will it have? The minister has nothing in place to

ease the burden on these people. We will have to wait and see on this one, Mr.

Speaker. Initially for Newfoundland Hydro, it looks favourable. I am not sure

yet the impact that Newfoundland Tel's 2.5 per cent will have on the

municipalities throughout this Province.

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

Provincial Affairs.

MR. HOGAN: Mr. Speaker, as the Minister Responsible for

the Newfoundland and Labrador Housing Corporation, I am pleased to inform

members that this afternoon - I don't know if he is here - the hon. Eric

Gullage, MHA for Waterford - Kenmount will be participating on my behalf, along

with Mayor Shannie Duff, in a special ceremony in Cowan Heights to mark the

completion of parkland and open space development by NLHC, and the commitment to

maintain the facilities by the City of St. John's.

Mr. Speaker, NLHC began developing residential building lots

in Cowan Heights in the early eighties. Since that time, and particularly in

recent years, the corporation has expended approximately $2 million on parkland

and open space development in the area. Cowan Heights now contains about 50

acres of green space, representing 15 per cent of the total development. The

parkland has been appropriately named Cowan Park, and includes both open areas

and a linear park system. Facilities provided in the open areas include four

tennis courts, two multi-purpose courts - basketball and street hockey - two

softball diamonds, a soccer field, a toboggan slope, and seven playgrounds. The

linear parkland, part of which runs along Kitty Gauls Brook, consists of five

kilometres of paved pedestrian walkways, including six pedestrian bridges. These

walkways connect the various facilities and neighbourhoods within the Cowan

Heights area.

I believe Cowan Heights is an excellent example of a

comprehensively-planned neighbourhood. In developing the area, provision was

made for community services such as schools and churches, and of course as I

just outlined, several leisure and recreational facilities. In essence, Mr.

Speaker, Cowan Heights is a community within a community.

Now that the development of parkland and open space has been

completed, NLHC has conveyed the land to the City of St. John's. I am pleased to

advise members that Mayor Duff will join Mr. Gullage this afternoon in

symbolically accepting responsibility for maintenance and upkeep of the various

facilities that have been developed by NLHC in Cowan Heights. Mr. Gullage and

the Mayor will then proceed to Cowan Heights Elementary where they will be

joined by students in a ribbon-cutting ceremony to officially open the school's

playground, part of which was provided by NLHC.

Mr. Speaker, the parkland throughout Cowan Heights has been

designed to allow for a healthy and safe environment, and for the enjoyment of

those who wish to take advantage of the facilities - both young and old. With

the City's commitment to maintain the parkland, I am sure that residents in the

area will enjoy the benefits of Cowan Park for many years to come.

Thank you, Mr. Speaker.

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

MR. WINSOR: Thank you, Mr. Speaker.

I am delighted to see that the minister finally brought some

good news into the House. All we have seen for the past weeks is doom and gloom.

Perhaps he should have waited until after the mini-budget before he brought in

this statement.

Mr. Speaker, this is some good news, finally the government

is going to be committed to the people and do some things that are important. It

is good to see that we have a well planned town, or as the minister said, a

community within a community. Obviously it came about as the result of the

development taking place in the early eighties when there was another government

of a different stripe in power, who did proper planning and did not allow the

budgetary problems that we have today be a part of their trademark.

Mr. Speaker, we welcome this announcement. It is particularly

pleasing to see that there has been a large area set aside for recreation, and a

number of recreation facilities have been provided. We welcome this statement

and hope that the minister will have many more along these lines in days to

come.

Oral Questions

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

SOME HON. MEMBERS: Hear, hear!

MR. SIMMS: Mr. Speaker, I have some questions for the

acting Minister of Finance, the Minister of Health, I guess.

Last week he will recall I asked him some questions and he

did not have the answers at that time. I would like to remind him that when the

Minister of Finance made his statement in the House about ten days ago

concerning the deficit, he said he was going to bring down a mini-budget later

this month. Well we are now into the final week of the month. I am wondering if

the minister can tell the House if a date has been set for the mini-budget?

Secondly, to repeat a question I asked last week: Can he now

tell us what kind of a process we are going to use? Will it be a full-fledged

budget debate, or will it simply be a statement by the minister with room for

response, or what? Does he know yet?

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

DR. KITCHEN: Mr. Speaker, if there is a date for a

mini-budget, I cannot announce that because I do not know. As far as the

procedure to be used, that has yet to be decided.

Thank you.

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

supplementary.

MR. SIMMS: A supplementary, Mr. Speaker, to the acting

minister.

Can he tell us if the measures undertaken in the mini-budget

will deal only with the fiscal year this year, 1991-92, or -

AN HON. MEMBER: 1992-93.

MR. SIMMS: What is it?

AN HON. MEMBER: 1992-93.

MR. SIMMS: - 1992-93.

- will you also be taking measures in the mini-budget to deal

with the projected deficit of $250 million, I think the minister said, for 1993

- 1994? Will that be contained in the mini-budget, as well?

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

DR. KITCHEN: Thank you, Mr. Speaker.

As everyone knows, it is inappropriate for anyone to reveal

what is in a budget, mini or otherwise, before the budget is delivered.

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

MR. SIMMS: Mr. Speaker, a supplementary for the acting

minister. Can he tell us, what is the government's target of deficit reduction

for this fiscal year? - earlier, they told us it was $29 million. What is their

deficit target now for this fiscal year, and what is their deficit target for

the fiscal year coming up, 1993 - 1994? In other words, how big a deficit are

you prepared to live with this year and next year? You could tell us that

without revealing anything.

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

DR. KITCHEN: Thank you, Mr. Speaker.

Mr. Speaker, the Leader of the Opposition is being very cute,

indeed, in the way he asks his questions. I might correct him on one point. The

deficit that we projected this year was not $29 million, that was just a current

account deficit. There were also expenditures on capital account. I can't

remember the exact figures - $220 million or $230 million.

So, the overall projected deficit for this year was somewhere

in the realm of $250 million at the time the budget was brought in. But as far

as my telling him how much further than that we are prepared to go will have to

be revealed, too, Mr. Speaker.

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

MR. SIMMS: Mr. Speaker, let me try another one to the

Acting Minister of Finance. It is pretty obvious from public statements that

have been made by the Premier and by the Minister of Finance, that the

government intend to take public sector employees to the cleaners once again. I

think that is fairly obvious. Could I ask the acting minister this: Does he

expect to have to bring in legislation to cut benefits that have already been

negotiated and agreed upon with the public sector unions through their

collective agreements? Is it a possibility that they may have to bring in

legislation to allow for changes or cuts to already negotiated agreements,

similar to what has happened in the past? Is he expecting that?

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

DR. KITCHEN: Mr. Speaker, we put great store by the

public service of this Province - the people in the health care system, the

people who work in Confederation Building and all government offices, the

Department of Social Services, the Department of Education. We set very great

store by all these, and any action that government would take would be done with

very great hesitancy. I can't say what the measures will be. I will say that the

deficit position the Province is in is a serious one. I think the figures that

were revealed by the Minister of Finance the other day was something like $153

million on current account this year, when we had thought it might only be $29

million.

And it is not only this Province, but virtually every

Province of Canada is in the same situation; so is the Federal Government and so

are other countries. So it a general problem that everyone is confronted with,

and it certainly will have impact on many people in the Province. But just what

measures are to be taken will be revealed shortly, at the appropriate time.

It is not my place to reveal these things now. I shall not

reveal them. But be assured that any measures we take will be very carefully

thought out, keeping in mind the welfare of all, and in particular, the public

service of the Province.

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

MR. SIMMS: That would be a welcome change, Mr. Speaker,

if the minister uses that approach - or the acting minister, I say to him.

May I ask him another question? I understand fully why he

would not want to give details of what might be contained in the statement. That

is why I am asking the questions the way I am, because I don't expect to get an

answer if I ask directly what is in the statement. However, the general thrust

is what I am trying to get at. Can he tell us - he can tell us this, I am sure,

because it is widely known, I guess, by now - is there any truth to the

information that is now coming out of the meetings that have been held with the

union leaders, that the government is looking to cut existing public servants'

wages by 3 per cent to 5 per cent? Can he confirm that the government has

requested that?

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

DR. KITCHEN: Mr. Speaker, all I can confirm is that

meetings have been held with various groups of government employees. I believe

meetings were held with the nurses, physicians, teachers and teachers'

organizations and, I believe, with the two main organizations NAPE and CUPE. I

wasn't at those meetings but I understand that appropriate discussions were

held. Just what was said, I don't think it would be appropriate for me to

reveal.

Thank you.

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

MR. SIMMS: Oh my, Mr. Speaker! May I ask the acting

Minister of Finance, does he know whether the approach in this minibudget will

be the same as the government's approach in the last four years, which is to tax

and cut, or does he expect that, in fact, there might be a change in the

government's approach this time around? Will there be any measures to stimulate

economic activity, employment, create employment and economic recovery? Does he

expect anything like that in this mini-budget?

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

DR. KITCHEN: Mr. Speaker, all I can suggest to the Leader

of the Opposition, is that he be patient and all things will be revealed to him,

to me and to everybody else. Thank you.

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

Member for Grand Bank.

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

I have a question for the Minister of Fisheries. Have the

minister and his department done a study or evaluation on the impact of the

northern cod moratorium on the fish processing sector? What kind of financial

difficulties are they experiencing and how many processors does the minister

expect to survive the moratorium period?

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

MR. CARTER: Mr. Speaker, the Province contributed

$75,000, as did the federal government, towards the cost of a study commissioned

by FANL, I think it is, the Fisheries Association of Newfoundland and Labrador,

done by Peat Marwick. That report, I am told, is now completed. I have not

received a final copy; an interim copy was delivered to my to my deputy's office

last week, but apparently it had to go back for some revision and I expect that

report, if it is not already there, will be, probably within hours.

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

MR. MATTHEWS: Thank you, Mr. Speaker.

I am sure the minister expects another round of bad news from

the study, that the processors are in a precarious financial situation. Does the

minister have any plans to assist fish processors to get through the moratorium

period? Is that the reason why they commissioned the study, and will the

Province be assisting processors who need assistance to get through this period?

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

MR. CARTER: Mr. Speaker, I am not prepared now to say

precisely what the Province will do. I can only say, at the present time we have

no plans to provide financial assistance to the processing sector, but until we

get a chance to read the report and study it, then I probably should withhold

any definitive statement in that regard.

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

MR. MATTHEWS: A final supplementary to the minister.

Over the last couple of weeks there have been discussions

between the Province and the Federal Government pertaining to an early

retirement package for fishermen and fish plant workers. Can the minister inform

the House whether or not negotiations have been completed, and can we soon

expect an announcement on an early retirement package for fishermen and fish

plant workers? Perhaps the minister could inform the House: Has the Province

been successful in getting the clawback provision implemented in those

negotiations? Have they been successful with the clawback provision they were

insisting upon?

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

MR. CARTER: Thank you, Mr. Speaker. We have had

considerable discussion with the federal government with respect to the early

retirement package and I can tell the hon. member that I expect, by Thursday of

this week, there will be an announcement.

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

Education.

In light of the Ministerial Statement in this House on

Thursday, November 12, by the Minister of Finance, regarding salary and

operating budget cutbacks, will the minister now confirm that his department has

already begun this process by issuing layoff notices last Friday?

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

MR. DECKER: Mr. Speaker, as the hon. Minister of Finance

pointed out when he gave a statement last week, government would be looking at

all possibilities where we can make some savings. As for the layoffs the hon.

member is talking about, I am going to wait until he gets on a supplementary to

see exactly what he is saying, because I suspect, Mr. Speaker, the layoffs he is

talking about were actions that would have taken place with or without this

particular statement. The hon. member goes on fishing expeditions and tries to

wangle things out of us which do not really have a lot of basis, so I will just

try to see where he is trying to go, Mr. Speaker. I am aware that there were

some layoffs, but they were not layoffs in the Department of Education in the

direct sense. I will just see where he is going with it.

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

MR. SULLIVAN: Thank you, Mr. Speaker.

If my profession had been that of a dentist, I think I would

have been a lot better off.

I ask the minister: The Student Aid Division issued layoff

notices on Friday to employees, if he wants to be specific. I assume the

minister would have knowledge of any layoffs in his department. Would he confirm

that for the House?

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

MR. DECKER: Thank you, Mr. Speaker.

The hon. gentleman is referring to some people in the Student

Aid Division who would have been laid off regardless of what the Ministerial

Statement said.

Mr. Speaker, as hon. members are aware, there are different

kinds of jobs in the Student Aid Division, as there are different kinds of jobs

everywhere, and you don't send a bricklayer to do electrical work, or a

fisherman to necessarily do some architectural work -

AN HON. MEMBER: Or a teacher to do dentistry.

MR. DECKER: You don't send a teacher to do nursing -

AN HON. MEMBER: Or a dentist -

MR. DECKER: You don't send a dentist to do doctoring.

Stop passing them along. I think I have made my point, Mr. Speaker.

So there were four or five layoffs. The hon. member is trying

to tie those layoffs to the Minister of Finance's statement. There is no

connection whatsoever, Mr. Speaker. They would have been laid off regardless,

and next year, the same thing will happen again. They are taken on for a

specific length of time to do a specific job.

Now, it has been suggested that in view of the fact there are

so many appeals, maybe we should take those people on to handle the appeals, and

I did consider that, Mr. Speaker. However, before employees can get into

appeals, there is quite an amount of training required. You just can't walk in

and do appeals unless you know the whole system inside out. So, if we need extra

people for the appeals, it would be just as sensible, from a knowledge point of

view, to bring new people in as it would be to keep them on. So, Mr. Speaker,

there is no connection at all. It is as different as chalk is from cheese.

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

supplementary.

MR. SULLIVAN: Thank you, Mr. Speaker.

I guess, the minister, since he stated that the Student Aid

Division is so efficient in dealing with so many appeals, wants to lay off some

people now to be of the status of other provinces. My question is: Is this

department now considering cutting substitute teachers' salaries by an average

of $50 per day?

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

MR. DECKER: Mr. Speaker, as both the Premier and the

Minister of Finance pointed out, any and all options are being considered. If I

knew the answer to that question the hon. member is asking and if I gave the

answer to that question, Mr. Speaker, I would be accused of breach of Cabinet

solidarity and everything that goes with it - if I knew or if I did not know.

So, the reality is that even if I did know the answer, Mr.

Speaker, if there were one grain of substance or truth to it, I would not be in

a position to make an answer, as the hon. member knows. If the hon. member

doesn't know that, he should speak at a future time to his colleagues who were

in Cabinet, who know precisely that when a process is under discussion, you

can't run out and call in the Education critic and say, 'Last night we discussed

this, tomorrow we are going to discuss that. Now, you wait until tomorrow and I

will tell you something else we discussed.' That is not the way the system

works, Mr. Speaker.

Maybe the hon. member is on to something. Maybe it is the way

the system should work, but the reality is, that is not the way it works, and I

am not at liberty to answer.

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

MR. SULLIVAN: Thank you, Mr. Speaker.

The Minister of Finance made a statement in this House about

1 per cent and 3 per cent cutbacks in salary and operating budgets. The Minister

of Education has not, in any way, indicated how his department is dealing with

this, regardless of a mini budget.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Yes, I have another question. Has the

department asked the Newfoundland Teachers' Association to consent to an $8

million salary cutback for the balance of this year, which would equate to an

average of a 5 per cent cutback?

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

The hon. the Minister of Education.

MR. DECKER: Mr. Speaker, the Department of Education has

not asked the teachers' for a wage freeze or anything else. As the hon. member

knows, that is not the duty of the hon. -

MS. VERGE: (Inaudible).

MR. DECKER: Tell the hon. Member for Corner Brook -

AN HON. MEMBER: Humber East.

MR. DECKER: - that if she wants to ask me a question, get

up and do it. I would be glad to answer her question, Mr. Speaker.

I will say this much, though, Mr. Speaker. This

administration is discussing the situation that we are in, with all employees of

government. We are the most listening government that has been in power in the

history of this Province. We talk to everybody. We ask everybody for advice. We

ask everybody for suggestions, and at the end of the day, we will make a

decision - after we have listened to all of the stakeholders. That is the way we

operate, and that is the way we are going to continue to operate. We are not

going to do as the Opposition did when they were in power, and ride roughshod

over the people of this Province. We are a listening administration, and we are

going to continue to be.

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

MR. SULLIVAN: One final question, Mr. Speaker. I guess,

after three-and-a-half years of this government, Newfoundlanders should be

asked, are they really better off than they were three-and-a-half years ago?

I have asked the minister several questions over the past

week, and I ask him again if discussions are ongoing with the Newfoundland

Teachers' Association? Have there been suggested cutbacks in salary, and other

areas of cuts with the Newfoundland Teachers' Association?

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

MR. DECKER: Mr. Speaker, that is a totally different

question. This reminds me of Twenty Questions. Are discussions going on with the

teachers? I just said, we are an administration which talks to all people,

especially employees of government. Of course, the Minister of Finance - as we

promised our people, as we promised the people of this Province, we are

discussing with all the stakeholders. Yes, discussions have been going on with

the teachers. Discussions are going on with various other groups.

Mr. Speaker, as to the other question the hon. member asked:

Are we better off than we were three years ago? It is a good question, Mr.

Speaker, and that is up to the people of the Province to determine; but let me

say this much: We are a thousand times better off than we would have been had

that administration stayed in power for three more years, because at the rate

they were going, by now we would be bankrupt and there would not be a province

called Newfoundland and Labrador. We would be a territory, like the Northwest

Territories or the Yukon, Mr. Speaker. That is the real question: Are we better

off than we would have been if they had stayed in power? And I can assure you

that we are better off than we would have been.

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

MR. HARRIS: Thank you, Mr. Speaker. My question is to the

Minister of Environment and Lands.

In May of 1991, the former Minister of Environment and Lands

told a Social Services Estimates Committee that his department had already

started instituting a recycling program for provincial government buildings so

as to provide some leadership by example. He felt the program could be possibly

fully in place by September of 1991, but he could not make an announcement at

that time until some of the fine points had been worked out. Can the current

Minister of Environment and Lands tell us what these fine points were, and

whether they have been worked out yet or not?

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

Lands.

MS. COWAN: Thank you, Mr. Speaker.

I have absolutely no idea to what the minister was referring.

I am sure that he had something in mind at that time. Just as I don't have a

crystal ball to look forward into the future, I have no way of looking back into

my predecessor's mind. However, we are, at this moment - and it is taking longer

than I would like, I must say - but we are taking the approach that each

department make this a function of management. We feel that in that way there

will be more of a commitment within each department. For example, some

departments are setting up committees within that department, something like the

occupational healthy and safety committees, and operating them in that way.

Other departments will utilize some different method, perhaps, that suits the

management's style of the minister and the deputy minister there.

There are a number of departments that have started a

recycling program now, and a number that are working on it. My department is

providing the guidelines for this. We are beginning, first of all, with paper.

Any of the departments wanting to go further, of course, are certainly welcome

to do so.

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

a supplementary.

MR. HARRIS: Thank you, Mr. Speaker.

Last May, in the Social Services Estimate Committee, the

minister said that she was embarrassed at the lack of speed on this, and said

that there might be a further one or two years before a program was in place.

Those are her words, Mr. Speaker, not mine. When pressed for a better commitment

than that she said that she would have concrete changes in place within six

months. Now, Mr. Speaker, this is now fully six months, from May 12, 1992, and

we don't see any changes in place.

MR. SPEAKER: Order, please!

The hon. member is on a supplementary, I ask him to get to

the question.

MR. HARRIS: Will the minister advise the House whether

this is the kind of leadership her department is providing, or is she trying to

hid behind the smoke screen of government deficit rather than deal with things

that she can deal with?

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

Lands.

MS. COWAN: My goodness, what a vicious attack!

As to that comment about taking two years, actually, I think

I said six months, because I had hoped that every department would be doing it

in six months. As in every other walk of life, some departments are more

committed to getting it going than others. That doesn't have an ill-effect on

me. I think it will work out well if each department has a personal commitment

to it, and that will come as times passes.

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

MR. HARRIS: Thank you, Mr. Speaker.

The member said she was embarrassed then, but she will be

more embarrassed in six-months time when there is nothing being done. I suggest,

Mr. Speaker, that that is what we are hearing now. Can the government, Mr.

Speaker, show some leadership in the things that don't cost money, that require

some leadership but not the expenditure of vast sums of money? There are lots of

things that can be done, despite the economic difficulties of the Province. Can

the minister say that there is something she can do and tell us now when a

program will be announced for all government buildings, even this Confederation

Building itself, to provide for some leadership in recycling? Why can't we have

leadership, Mr. Speaker, from this minister?

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

Lands.

MS. COWAN: Mr. Speaker, one of the things that I would be

only too happy to do would be to take the hon. gentleman, Mr. Speaker, on a tour

of some of the departments where this is taking place.

AN HON. MEMBER: By the hand.

MS. COWAN: I could take him by the hand, yes, and lead

him around and show him.

The government, I just told him, is not going to order

departments. Government has asked each department to make it a function of

management which is the more up-to-date method of dealing with the environment

within office buildings. That is taking place, department by department, with

any leadership that is needed coming from my department.

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

MR. WINSOR: Thank you, Mr. Speaker.

Mr. Speaker, I have a question for the Minister of Employment

and Labour Relations.

As a former union leader, past-president of the Newfoundland

Teachers' Association, and now the Minister of Labour, Mr. Speaker, he is aware

that one of the duties of the minister should be to protect the integrity of

contracts negotiated through free, collective bargaining.

SOME HON. MEMBERS: Hear, hear!-

MR. WINSOR: Mr. Speaker, the minister has, on one

occasion, supported legislation that stripped contracts. Is it your intention to

support this government in their legislation which will roll back public sector

wages and strip away further contract benefits already negotiated? Does the

minister intend to support that legislation?

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

Labour Relations.

MR. GRIMES: Mr. Speaker, usually I thank the hon. member

for his question, but I don't understand what he is talking about today. Because

of the fact that while they may purport to try to give some validity to some

rumours that are circulating - I have heard them myself in my own district in

Central Newfoundland over the weekend and so on - I can't answer a question as

to supporting something that he says has certain content in it, when no such

decisions have been made. When the Cabinet meets and makes a decision, as I do

and colleagues here do every time, we will decide individually and collectively

then, whether we will support the action. Because if we don't, each of us has a

choice, which is to leave.

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

supplementary.

MR. WINSOR: Mr. Speaker, for the third time in two years

government - and the minibudget has already given indications that it will -

will introduce legislation to break collective agreements. Mr. Speaker, this

goes back in time to the Smallwood era. Let me ask the minister: Does he think

that this is the proper way to carry on negotiations, to sign agreements and

then have them torn up because you have done it three times already. Are you

proud of that kind of record and I am asking the minister, is he going to stand

by the side of labour in this one and support labour and if he has to resign,

resign over it?

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

Labour Relations.

MR. GRIMES: Mr. Speaker, again, unfortunate as I see it

that the hon. member would try to make an issue of such a matter, what we are

trying to do and put it in the same context as legislation that we have before

the House which is introduced by myself as minister with trying to make sure

that the workers' compensation system is preserved for the long-term. If I am

convinced in our deliberations over the next week or so that the actions that we

are taking are the appropriate actions to make sure that the financial integrity

of the Province is maintained so that we can deliver essential public services

to, for and on behalf of the people of the Province, then I will support the

decision. If I find something wrong with it, as I have said with all of our

colleagues here, if we cannot support the decision, if I stand in this House and

support it, the answer will be clear; if I do not support it that will also be

clear because something else would have happened as every member here has a

choice to make on every decision that goes before the Cabinet.

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

supplementary.

MR. WINSOR: Mr. Speaker, let me ask the minister this

question then. In the private sector, if an employer was in breach of a

contract, would the minister's department intervene because there was a breach

of contract, and, why don't the same conditions apply as the Minister of

Employment and Labour Relations who should support both private and public

sector, why does he not intervene and protect the public servants, employees of

this Province who are being attacked by his government and why does not the

minister protect them?

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

Labour Relations.

MR. GRIMES: Thank you, Mr. Speaker. Now that is a

question I do appreciate because it does provide the opportunity to explain the

one very clear difference between the options available to the government and

people in the private sector.

When private sector companies and corporations and businesses

are faced with the same set of circumstances and decisions that this government

has dealt with over the last two years, they do not have to worry about the

agreement because the business closes. The government cannot shut down essential

public service in the Province, they have to maintain the ability to continue

the service and if that means the unfortunate circumstance that we have said

before, we would rather not have interfered with collective agreements, but when

the choices are clear, interfere with the agreement and maintain the service or

destroy the service, that is not an option for the government, that is a clear

option which unfortunately has happened in too many private circumstances in the

Province, where companies have faced the same set of circumstances that the

government has and they are now not operating. That is not a choice for the

government and we will make the decisions that make sure that we maintain the

financial integrity so we can provide continuing service.

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

MS. VERGE: Thank you, Mr. Speaker.

I have a question for the Minister of Justice.

How does the minister expect to establish a police commission

early in the new year, as he announced a little while ago, when he has not yet

produced even a draft of the necessary legislation; he has not even printed the

Bill?

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

MR. ROBERTS: Mr. Speaker, I have indeed produced a draft

of the legislation. The last count I saw we were up to thirty-eight drafts. The

act is on the Order Paper in the House -

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

MR. ROBERTS: - it is at the printers even as the hon.

member speaks. The Bill has been given first reading, it is down for second

reading. The Bill is at the printers even as we speak now, it will be

distributed as quickly as it is available, which I hope will be today, if not it

will be in the morning and then we shall debate it at the proper time. I hope

that answers the hon. member's question but if not, here we go again.

MR. SPEAKER: Question Period has expired.

Notices of Motion

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

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

tomorrow ask leave to introduce a bill entitled, "

An Act To Amend The Mineral

Act". (Bill No. 58).

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

MS. VERGE: Thank you, Mr. Speaker.

I give notice that I will on tomorrow ask leave to introduce

the following resolution:

WHEREAS the economy of North America is becoming increasing

based on knowledge; and

WHEREAS Newfoundlanders and Labradorians must become better

educated if our Province is to advance economically; and

WHEREAS Grenfell College in Corner Brook is the only

university campus in the Province outside St. John's; and

WHEREAS Grenfell College, with few exceptions, is only

offering first and second year arts and science courses, and is not even able to

meet the needs of first and second year students because of a shortage of

science laboratories, library facilities, classrooms and other space, and

personnel;

THEREFORE

BE IT RESOLVED that the government immediately

provide Grenfell College with capital and operating fund increases to equip it

as quickly as possible to offer the full range of first, second, third, and

fourth year arts and science courses to meet the needs of the people of the

Province.

opposition, intend to proceed with on Wednesday, Private Members' Day.

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

Minister of Justice.

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

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

in St. John's Act".

MR. SPEAKER: The hon. the Member for Torngat Mountains.

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

tomorrow ask leave to introduce the following resolution:

That the name of the Province be changed from Newfoundland to

read Newfoundland and Labrador.

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

Extern.

MR. PARSONS: Mr. Speak, I give notice that I will on

tomorrow ask leave to introduce the following resolution:

WHEREAS representation in our Legislature has increased

dramatically; and

WHEREAS the population of Newfoundland and Labrador has shown

little increase during the past ten years; and

WHEREAS the cost of governing has escalated;

BE IT RESOLVED that representation in the House of Assembly

be reduced to a maximum of 42 seats.

Thank you, Mr. Speaker

SOME HON. MEMBERS: Hear, hear!

Orders of the Day

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

MR. ROBERTS: Mr. Speaker, could we carry on with the

debate on -

MR. SPEAKER: Order, please!

The Chair has called Orders of the Day, and has recognized

the hon. Government House Leader.

MR. ROBERTS: Mr. Speaker, could we carry on with the

adjourned debate on the Municipal Operating Grants Bill? I am not sure who

adjourned the debate. The Member for Kilbride was enlightening us, as only he

can.

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

continuation of the adjourned debate.

The hon. the Member for Kilbride.

MR. R. AYLWARD: Thank you, Mr. Speaker.

Yes, Mr. Speaker, I was having a few comments on this Bill,

only two minutes of them on Friday because time ran out; but I did listen to the

Minister of Municipal and Provincial Affairs when he read out his explanation of

the Bill. It was fairly lengthy, and I understand the reason why he had to read

it out, because even listening to it being read, it is extremely complicated.

There are many formulas in it, and I believe it was designed that way purposely,

when it was done, so that it would be hard for the councils to understand what

was going to happen to them. It was hard for the Federation of Municipalities to

understand what was going to happen. There was not a big kerfuffle kicked up

immediately, because nobody knew what was coming. It took the Federation of

Municipalities six or eight months working, looking at this, to come back to the

government. I think it was almost a year before they came back to the

government, to tell the government that this is all wrong; this is not working

in the smaller communities.

The purpose of these changes, the whole basis for these

changes, as the former minister said, was to take from the big and give to the

small. That was the bottom line of what the changes were supposed to be. In

actual fact, the reality is that the government took from the small, which are

the municipalities generally, saved themselves some $20 million in the long run,

and transferred the tax burden to all municipalities, I guess, but in particular

the smaller ones.

Mr. Speaker, we have a statement here today by the minister

concerning the utilities taxes, the 2.5 mil change in utilities taxes. I will

give you one example of what this tax is going to do, if it is as I understand

it, the way it was presented to our Cabinet at one time, and the reason that I

refused this at one time in the past, why I would not bring it in - one example

of what this is going to do.

I will give you an example between St. John's and Petty

Harbour/Maddox Cove, two very close municipalities. Petty Harbour/Maddox Cove

has a commercial tax base of two small stores, mom-and-pop corner stores, a

little craft store that is seasonally operated. It has two fairly significant

fish plants and one part-time fish plant and it has a generating plant for

Newfoundland Power. Mr. Speaker, the three plants are gone, they are closed up.

They will not produce one nickel of revenue in the next two years anyway,

probably going to be four years. So that takes the major part of their

commercial tax base away from them. The corner stores that exist down in Petty

Harbour will pay their property tax, whatever it is. They are not making any big

pile of money. There are only 900 people in the whole community. So you are not

going to make a fortune from them. They make some reasonable amounts of money in

the summer time when a tour bus comes and happens to get broke down in front of

them. I don't know how they manage it, but they always seem to get broke down in

front of one of these two stores. But they will sell some produce then when the

thirty or forty people get off the bus, and they will make a little extra.

Their main cash cow, if you want to call it that, was

Newfoundland Power, the generating station. Now, that generating station is

using a resource of Petty Harbour/Maddox Cove. The water rights go right back up

into the Goulds. It is even a resource of the Goulds. Now, that resource in any

other community, or any other type of resource in communities, that is where you

get your tax base by taxing those resources. Petty Harbour/Maddox Cove, I

believe, was getting something like $40,000 a year from Newfoundland Power. I am

not sure of the figures right now, because it has been some years since I saw

them. They were getting about $40,000. Now, they have a small budget. They have

some snow clearing. Their biggest cost down there, I imagine, is snow clearing

and garbage collection.

Forty per cent of their community now are fishermen or fish

plant workers and they are all having a hard time meeting their own property tax

requirements. So, Newfoundland Power could keep the council alive if they were

allowed to tax them at a fair rate. It wasn't exorbitant. It was exorbitant if

you compared the small budget of the town council and how much they were taking

from one industry. But it wasn't an exorbitant amount if you look at the bottom

line of the shareholders of Newfoundland Power, what they are making from light

and power, because they are using the resource of Petty Harbour/Maddox Cove, and

what Petty Harbour/Maddox Cove can afford to pay themselves.

Mr. Speaker, the $40,000 that Petty Harbour/Maddox Cove would

get from Newfoundland Power, now will be reduced to around $17,000 to $20,000,

something like that.

AN HON. MEMBER: (Inaudible).

MR. R. AYLWARD: No, this is ten times reduction. They

were getting around 22 mils or 22 per cent or whatever you want to call it. As

far as the council knows, or they did know when all this started to be discussed

earlier on, they will lose $20,000, 50 per cent of the whole budget that

Newfoundland Power is paying them. They will lose it in Petty Harbour/Maddox

Cove. So now they have lost half of the Newfoundland Power tax revenues, they

have lost their main fish plant -

AN HON. MEMBER: (Inaudible).

MR. R. AYLWARD: Well, it was reduced two years ago, then,

when they starting distributing it around the community. That was the second

phase of it. This is only the second phase now, I am talking about, before

Newfoundland Power started taking the money away from the people in the

communities themselves, before they went to court on this.

Mr. Speaker, right now Petty Harbour/Maddox Cove are after

losing in the last three or four years $20,000 plus from Newfoundland Light and

Power. The Petty Harbour Fishermens' Co-op is in major trouble because there are

no fish, for one thing, and our government and the banks are getting kind of

edgy with their loan guarantees. There is going to be a big problem there. A

very good community effort when the Petty Harbour fishermen got together and

changed what was happening in the fishery in their area, and did a good job at

it. They needed lots of capital and they got government guarantees, the same as

every other fish plant, but there was a difference. It was community operated,

there was local money put into it, the fishermen themselves have their own

monies invested in it and if that company goes bankrupt, and it has been shut

down for two years now because of no fish, but if it goes bankrupt that will

devastate Petty Harbour/ Maddox Cove. That would be the end of Petty

Harbour/Maddox Cove, I would say, because the savings that the fishermen have

put into this business, and they have put in quite a lot of their own money into

trying to get this fishery - I remember only ten to fifteen years ago the Petty

Harbour fishermen came down in front of Atlantic Place dumping the fish or

giving away fish on Water Street. What changes in ten or fifteen years, but, Mr.

Speaker, the main change in Petty Harbour/Maddox Cove was to set up their fish

plant.

Now the Town Council cannot get any revenue from that fish

plant if it is closed down; they certainly will never get it if it goes

bankrupt, if this government allows the banks to call their guarantees or if

they do not support the fish plant. There is another large fish plant there, the

owner is Mr. Hearn, this has been owned by many people in the last ten years, a

private operation which probably is not going to survive this moratorium because

there is no great amount of money backing it. The people who operate it run from

year to year like a lot of small fish plant operators, so that fish plant is not

going to be in existence and I am sure if it goes out of business, the

government is only waiting for fish plants to go out of business so that they

can pull their licences so they will not have so many fish plants operating in

this Province, so whatever fish plant goes out of business, Petty Harbour/Maddox

Cove is going to lose both of their fish plants and half of their revenue

because of the changes that this government has made, particularly in this

utilities announcement that the minister made today.

Now what will happen with this announcement today in St.

John's? The City of St. John's does not tax up to this level now, the utilities,

the City of St. John's will gain $2.5 million - that was in four-year ago

figures, the last ones I saw - so the $2.5 million are coming from the Petty

Harbours, the Tors Cove, the Mobiles and the Cape Broyles of this Province. Now

if the City of St. John's is looking for a place to increase their taxes this

year, I am not even sure if they are aware of this, and if they are aware that

they are not taxing up to that potential that the utility companies, Light and

Power in particular, agrees with this, they fought to get this put in place, so

there is $2.5 million in the kitty for St. John's next year if they want to go -

well from figures four years ago that I saw, if they want to go after this, so

there is no need of a tax increase in St. John's this year to cover a regular

property tax if the City of St. John's-

AN HON. MEMBER: We are taxed to death.

MR. R. AYLWARD: Yes, we are taxed to death in St. John's,

I agree wholeheartedly - there are not many times I agree with the Minister of

Health, there are not too many times we agree, but I do agree that St. John's is

taxed to death, but a lot of the tax burden you have put on this council.

Decisions that you have made and your colleagues have made since you took

office; the amalgamation of the Goulds to the City of St. John's has cost the

city's taxpayers quite a bit of money and it will cost the city taxpayers quite

a bit more money before this is over yet. The Goulds was surviving on its own as

a small town operation with a limited amount of services. The day that you put

them in - well -

AN HON. MEMBER: They should have taken in Mount Pearl.

DR. KITCHEN: The Member for St. John's Centre said they

should have taken in Mount Pearl. Well that is your decision, that was your

decision, you chickened out on it. You backed away from it, I do not know why.

Yes, point to the Premier's office because that is where it came from. That is

the same instruction as every other instruction over there, but we will leave

that one and we will hope we win the next election. But I would not want to be

waiting for pension credits from the Mount Pearl Town Council, I would not want

to be trying to build up pension credits from the Mount Pearl Town Council if

this Premier wins the next election, because within a week, Mount Pearl will

disappear in smoke. Mount Pearl is going into the city the next time because

what happened has to be an irritant to the Premier

MR. MATTHEWS: He said that sure. He told Mount Pearl

that.

MR. R. AYLWARD: Yes, it has to be an irritant to the

Premier, how Mount Pearl stood up for itself, and it had enough organization to

be able to withstand the bullying that this government, and the former minister,

was doing in the St. John's region.

Mr. Speaker, St. John's will gain $2.5 million in this tax

regime, and they are going to take it from the smaller communities. Light and

Power will break even overall. It is about the same amount of taxes that Light

and Power will pay, generally, not much difference. It will not change by 5 per

cent for Light and Power. They will get generally about the same overall dollars

when you look at the whole Province.

The ones who are going to get hurt are the small communities

again. Again, the same as with the changes in the MOG, the operating grants,

when this new complicated formula was brought in to confuse everyone, the

purpose was to help the smaller communities and let the larger ones who could

afford it, pay their own way.

Well, Mr. Speaker, it did not work on either count, because

the larger communities, particularly in St. John's, and it is quite common for

people in this House of Assembly to get up and say: Big St. John's should be

doing it all on their own. Well, Mr. Speaker, St. John's does more than its

share in this Province, of surviving on its own - much more than its share. It

has the highest property tax rate in the whole Province - 11.5 mils - the

highest in the Province. Windsor used to have it, before it amalgamated with

Grand Falls and it levelled off under St. John's. It is about 10.5 mils.

Corner Brook is somewhere around 11 mils - pretty close; but

if you want to buy a building lot in Corner Brook, you will not pay $800 an inch

for it. That is where the price comes in St. John's - $800 an inch for a piece

of serviced land in this Province. Now that is where you start paying the big

taxes. I could be paying 11 mils property tax up in Cape Broyle, in the new

council up there, but if a building lot is only worth $500 up there, so what? It

does not matter. I come in here and get 50 feet of land for $45,000. That is

when you pay the price.

AN HON. MEMBER: (Inaudible).

MR. R. AYLWARD: For land only.

Mr. Speaker, that is the difference. That is where the

residents of the City of St. John's are paying the difference.

Now everyone says that St. John's has everything. Well

whatever St. John's has, the taxpayers in St. John's are paying for it, and

paying for it through the teeth - and have been for years.

If you go into a subdivision in St. John's - I will never

forget - in Happy Valley - Goose Bay, the Minister of Justice's district now. I

was up there at a meeting one time, and there was a land assembly being

developed there - provincial dollars. Roads were being built - some municipal

dollars - but mostly provincial dollars. Roads were bulled in and services,

subsidized by the Province at the time, were put into this subdivision. They

were wondering whether they should sell the lots for $7,000 each or $10,000

each. Now it already cost about $15,000 just to put them there. The roads were

not paved then. The sidewalks were not in, and none of the street work was done

at all, and they were going to sell those lots for $7,000.

There is no difference in having a serviced building lot in

Goose Bay. The cost of putting it there should be about the same as it is in St.

John's. I know the land value is different. They have Crown land, so you could

say the input costs were probably somewhere around $40,000 an acre cheaper right

off the bat; but it was not a difference between $45,000 a building lot and

$7,000 a building lot.

The town council in Happy Valley - Goose Bay, at the time,

had an opportunity to charge fair prices for that land, and cost nobody

anything, the same as someone from St. John's who moves into a subdivision. When

you buy your house and you buy your lot, you have paid for everything that is in

front of that lot - half the street, half the pavement, all of the sidewalk in

front of your home, the water and sewer that is in it, plus you pay an

assessment to the arterial roads; you pay an assessment to the trunk sewers that

are going back and forth through the Waterford Valley and Kenmount Road. You are

paying assessments to that. That is why the City of St. John's seems to be able

to advance; but it is done on the backs of the people who are paying. Then you

pay 11 mils on top of that, of a property tax. Then, if you are in a business,

you pay again, double taxation that the minister, in his statement, said should

not be done. A business will pay his property tax.

If I have a business in the City of St. John's, and I own the

building operating that business, I pay a business occupancy tax on the

building, plus I pay property tax on the building, so that business is being

charged twice. Now what is wrong with smaller municipalities charging for the

generating plants and the equipment that are in the buildings, it is no

different from what is done in St. John's now?

AN HON. MEMBER: Well the equipment (inaudible).

MR. R. AYLWARD: The equipment is not being paid for,

where?

AN HON. MEMBER: (Inaudible).

MR. R. AYLWARD: No, it is not but in smaller communities,

why shouldn't it be? It should be, because they are not getting a big lot of

money out of it, Light and Power can afford it, we are paying the bill anyway,

whoever is paying your light bill is paying the bill, they are only going to ask

for a rate increase.

AN HON. MEMBER: Light and Power (inaudible).

MR. R. AYLWARD: Yes, we all do, that is right, I agree

with that. We all pay for it but it provides the smaller councils like Petty

Harbour/Maddox Cove or Cape Broyle to be able to provide bare, essential

services to the people in that community; they are providing services to the

facility; they are clearing roads so that Light and Power can get to the

facility; they are providing water to it if they have water in the community and

they are providing a community environment around it. Whatever advantages there

are to having that community these councils are paying it, so why should they

not get paid a fair return on their taxes. The City of St. John's will get a

fair return on theirs because the property values are so high that the 11 mils

plus the business occupancy tax that the city gets will be enough anyway without

even going to the 2.5 mils or whatever it says in this -

AN HON. MEMBER: (Inaudible).

MR. R. AYLWARD: - in lieu of grants, well that was

Newfoundland Hydro there but it was 2.5 mils when it was being talked about back

some time ago and I remembered it when I had more information on it in the

Cabinet sheets so, Mr. Speaker, this change in the municipal operating grants

that the minister is looking to get approved now, has hurt smaller

municipalities in this Province and I would say by next year, Petty

Harbour/Maddox Cove will probably be bankrupt. That will be my assessment of it.

If there is much snow in the next month, I do not know if they can get it

cleared; they probably can because they will get an operating loan from the bank

and spend next year's money to do it. Hopefully we won't have much snow for the

rest of this fiscal year. I do not know how they are going to make up their

budget; I think, already they are $20-odd thousand dollars short on last year's

budget because of the changes.

They lost $6,000 or $7,000 in some of these grants but it is

not what they lost in the operating grant, it is what they lost in the roads

component which was always the most important part of providing the services.

The operating grants and that were very good for maybe getting a bit extra,

maybe doing a bit of upgrading on the road and you might get in a bit of water

and sewer if you had some money, but the road component kept the community safe.

It allowed you to plow the roads, it allowed you to spread sand if it got

slippery. The road component was the one which had the practical use, that was

the one that kept the insurance rates in the communities at a reasonable level.

There are communities on the Southern Shore and it will be

mentioned here in a few minutes by one of our members who is having problems;

the department went to these councils and looked at their books as explained by

the minister. Well, if I were the minister I would go back to them and tell them

do not only look at what is on the books and what is in the bank account, look

at what is owed and look at what is not able to be collected. They did half a

job and because someone had a positive bank balance the day they went to look at

it -

AN HON. MEMBER: (Inaudible).

MR. R. AYLWARD: We will hear, I won't say much more about

that except that you will find out for sure. I know you are not intentionally

avoiding this, this is what you have been told, this is the information that you

staff gave you, you were not up looking at the books, I am not blaming you for

this but I would go back if I were you. I would go back to that department,

after you hear the Member for Ferryland give his explanation of what is

happening up there, you go back to your department and find out what they are

doing, find out if the whole story is being told or part of the story is being

told -

AN HON. MEMBER: (Inaudible)

MR. R. AYLWARD: Well it has not been according to the

councils up there. I do not know if the councils have a different view of it

than the person who gave you the story. Mr. Speaker, I said $800 an inch before

for land in St. John's, it should have been $800 a foot. It would be extremely

expensive and I would have tried to sell my house today at that price, but it is

$67 an inch, which is a lot of money. No where else in Newfoundland are you

going to pay that much for it. You can go from -

AN HON. MEMBER: (Inaudible).

MR. R. AYLWARD: It is about $45,000 for a fifty foot lot,

yes and that is generally what they are now -

AN HON. MEMBER: Is that cost (inaudible).

MR. R. AYLWARD: That is the full cost of a lot. Now, that

provides the contractor with a profit, it provides the servicing and it provides

assessments -

MR. ROBERTS: Sidewalk and pavement?

MR. R. AYLWARD: Yes. And it provides so much for

assessments for the trunk sewers and the arterial roads, whatever the City has

tacked on to it.

MR. ROBERTS: The actual economic cost of putting that lot

on stream, okay.

MR. R. AYLWARD: Yes. That is why it is becoming more

important for surveyors to get their work right. Because you put in a

three-quarter inch iron bar, and that is probably $60 worth of land gone right

there; and you must have one of those on both sides, so it is $120.

MR. ROBERTS: That doesn't count the surveyor's fee for

putting it in.

MR. R. AYLWARD: The surveyor's fee for putting that in -

well, in St. John's -

MR. ROBERTS: (Inaudible) thousand.

MR. R. AYLWARD: Well, that $67 per lot would include the

initial staking. That would be $67 per inch.

MR. ROBERTS: Somebody has to bear the costs.

MR. R. AYLWARD: Yes, but the comparison I am trying to

make is that people are saying St. John's has everything - don't give St. John's

any more, they have too much now. But you can't say that, you have to say: How

much do I pay for that cost when I am buying it? Conception Bay South moved

closer to a user-pay system last year and the place nearly went crazy up there.

I mean, they were going to charge something like $6,000 or $7,000. That is not

half - I know the cost of putting in fifty feet of services, that is, pavement,

sidewalk, water and sewer under it, comes close to $25,000. Well, it did years

ago.

MR. ROBERTS: (Inaudible) general public has paid that

cost through grants from the Province.

MR. R. AYLWARD: Yes, it has for a long time, except for

St. John's. But we still are saying in governments - and it was said in mine, in

the Cabinet I sat in. We are still saying: take from St. John's and give to

someone else. But that is a wrong philosophy based on wrong information. It

should never be. And this municipal grant structure we are on here today is

doing just that - it is taking from St. John's because St. John's has

everything. But, looking a step further, where did they get it? They got it by

people buying lots in the subdivisions, and building businesses. Those are the

people who pay the shot. And that is part of the reason why we have Kilbride

today. Before amalgamation with St. John's, people tried to get away from St.

John's to Kilbride. So we swallowed that up, that went in, too, and that was our

administration. So they moved from St. John's - Kilbride to the Goulds and we

swallowed that up. Bay Bulls - Witless Bay will be the next place, to create the

same problems -

MR. ROBERTS: Portugal Cove.

MR. R. AYLWARD: Yes, they jumped both ways - I am just

talking about the area I am familiar with. And now we are going to create the

same problems we have in the Goulds today - and we see there are problems, where

the City went in and looked at the sewer lines. Because you have a council that

doesn't have the expertise to look after the installation of services, doesn't

have the money to do a proper job and doesn't do the proper assessments on the

lots so that a person will pay the full cost.

I know, one council in the Goulds used to bulldoze roads in,

get the lots built, and then apply to our government to have it paved. Now, they

didn't get too far with it while I was there.

MR. ROBERTS: Bob Wells was trying to get pavement.

MR. R. AYLWARD: Well, they paved the existing roads in

those times, but not the new subdivisions.

MR. ROBERTS: (Inaudible) snow.

MR. R. AYLWARD: I know. The back line is one of them. It

is still a problem in there.

But that is what councils were doing, and not only the Goulds

council. This was traditional in a lot of small towns. Now, that wasn't the

purpose of it - the money we were giving out for road improvements was supposed

to be for upgrading existing roads. If a road in your community had

deteriorated, we would give you a partial grant. Sixty-Forty was the name we

always gave the program. I don't know what the actual name was. But it was

abused, and that is where we are losing out. What we were supposed to be doing

was go in and build a road completely and have it paid for; in fifteen years,

that road needs repairs. The council can't afford to do it, the taxpayers can't

afford to do it, so you pay some of the cost, 60-40, to do the repairs, not to

build the initial road. That's what is happening throughout the Province. It

happened in our time and it is still happening. I know of instances where it is

happening.

AN HON. MEMBER: (Inaudible).

MR. R. AYLWARD: I will bet you. I would say that there is

a good chance that the Dunville Town Council might have considered that at some

time or other.

Now when we talk about the road components - I hope the

Minister of Fisheries is having a good look. This is what is happening. This is

what is going to happen to this Province more and more, if the government

continues on this same line, this same approach that he is taking. If this

government continues to hide it's head in the sand and ignore the problems of

the people of this Province, this is what is going to happen, more and more. Mr.

Speaker, there will definitely be more of this in this Province in the next

little while.

MR. SPEAKER: Order, please!

The hon. the Government House Leader.

MR. ROBERTS: Mr. Speaker, if I may, if hon. gentleman

would permit, I realize that we are not supposed to take cognizance of what

happens outside the bounds of the House, by which I mean the floor of the

Chamber, and I realize that there are people in this Province who very strongly

hold the belief -

MR. SPEAKER: Order, please!

(COMMOTION IN GALLERY)

MR. SPEAKER: Order, please!

If the Chair just might speak to members on this rather

important matter, it is incumbent upon all hon. members to ensure that the

decorum of the House is maintained, and the Chair looks forward to the

co-operation of members on both sides of the House when we run into a situation

like this.

As hon. members know, this kind of behaviour is not tolerated

in the precincts of the House, and the Chair can call for the clearance of the

House - for strangers to be escorted from the House. Since the people did it

rather willingly, then the Chair did not intercede - it was about to intercede.

But in these matters, the obligation is on both sides of the House - all members

- to co-operate with the House and to ensure that decorum is maintained at all

times.

The hon. the Government House Leader.

MR. ROBERTS: Mr. Speaker, I think I speak for members on

both sides when I say that: (

a) We hear Your Honour's words; and (

b) We shall

heed them.

Obviously the point of order that I was about to raise would

regress the situation, but these ladies and gentlemen have left the Chamber.

They are welcome to come back, I suggest, but in so doing they must abide by the

rules that govern any person who wishes to come into this Chamber.

I thank the hon. gentleman for yielding. I suspect he could

not see what was going on because these gentlemen were behind him in the

gallery.

We will simply carry on. Where the hon. gentleman was making

quite a good speech. Let's carry on with it.

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

continue.

MR. R. AYLWARD: Thank you very much, Mr. Speaker. There

are only a few minutes left.

In conclusion, I suppose the general thrust of what I am

trying to say to that, we hear a lot from our Minister of Finance, and our

Treasury Board Minister, and our Premier in this Province, about transferring

the tax burden from the federal government to the provincial government. They

are not giving us enough or the federal government is finding ways to transfer

the tax burden to the province. Well, Mr. Speaker, this is only the same thing,

exactly, as what is happening where our provincial government is transferring

the tax burden to the municipalities.

The municipalities cannot afford it, and we will find out in

the next year or so what big problems that the municipalities are having. It

will only come after this year's budget, I would say, from January until March,

when the minister starts getting his budget - I think they are supposed to be

all in by January - balanced budgets. I doubt very much that they are going to

have too many balanced budgets, or they might be balanced on paper.

Mr. Speaker, the problems are only starting with this new tax

system - this extra complicated tax system that was intentionally made

complicated by the former Minister of Municipal and Provincial Affairs so people

would not understand it, and would not kick up too much trouble with it until

they did understand it. I say most of the people involved in municipalities, and

most of the people in this House of Assembly, still do not understand it, Mr.

Speaker, and I am one of them.

Thank you very much.

MR. PARSONS: A point of order, Mr. Speaker.

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

Extern, on a point of order.

MR. PARSONS: Mr. Speaker, I gave notice today of a

resolution, and I didn't realize that I already had a resolution on the Order

Paper. I would ask the permission of the House to have that first resolution

cancelled and the resolution that I introduced to the House today be placed in

its stead.

Thank you very much, Mr. Speaker.

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

MR. ROBERTS: (Inaudible).

MR. SPEAKER: The Chair understands that the hon. member

has unanimous consent to have his previous resolution rescinded and replaced by

the resolution that the member introduced today.

SOME HON. MEMBERS: Agreed!

MR. SPEAKER: Fine! Agreed!

Is the House ready for the question on Second Reading?

SOME HON. MEMBERS: No.

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

MR. WOODFORD: I would just like to make a few comments,

Mr. Speaker, pertaining to this particular piece of legislation. I don't

suppose, if I went back through Hansard over the past year or so, that I could

probably add anything to what I have already said, except, Mr. Speaker, to make

a few comments on some things that have happened, even in the last couple of

months.

Now, from the outset, when the former Minister Responsible

for Municipal Affairs came out with this new program back in December 19, 1990,

I at that time, Mr. Speaker, said that as far as I was concerned it was an

injustice to municipalities in the Province, and I am of the same belief today.

Municipalities in the Province could not sustain and could not stand some of the

changes - if hon. members can remember, December 19, 1990 this particular

announcement was made, approximately eleven days before their budgets were

supposed to go in. Now, Mr. Speaker, no municipality in the Province - I don't

care whether it is the city or whether it is a community council with a

population of 200 or 300 - could make adjustments in such a short time and try

to carry on as if nothing had happened.

We are, Mr. Speaker, in a situation in the Province today,

with regard to municipalities, where a lot of the municipalities are not going

to be able to balance their budgets this coming year. They couldn't last year,

they won't this year and, I venture to bet that if there are no changes to the

municipal operating grant itself in this particular year, they will not balance

their budgets come December 31. There is just no way. It is worse now than when

the program was announced. Because what is after happening since that, Mr.

Speaker, is that the unemployment rate has gotten higher and the business

community in this Province has dwindled, the businesses in small municipalities

today, the little bit of infrastructure that they did have, is gone. Nobody can

pay, even if they wanted to. Based on the municipal operating grant - and I will

get into the other ones after - especially on the road component, there is not a

small municipality - not only small, but one that comes to mind in a larger

municipality is Conception Bay South. They are short $130,000 based on the road

component loan last year.

So smaller municipalities, Mr. Speaker, are not the only ones

that are affected by this particular MOG system. What are they going to do about

it? What is the present minister going to do about it? I would say that the

present minister - I would have to give him full marks for trying to change it -

but I would say he is running into a lot of difficulty with some of his

colleagues in Cabinet. I would say, one of the gentlemen on the other side of

the House, who comes to mind, is now putting on his glasses, he is now the

minister responsible for Health. I would say, based on his performance in the

House for the past three-and-a-half years, based on what I would consider some

of his beliefs with respect to running a government or running a business - I

could be wrong, but as a matter of perception, I suppose, rather than actuality,

I would say he is one of the stumbling blocks to changing this particular

system. Some of the backbenchers - I won't say all, but some of them, and I

would say, some of the ministers, especially ministers responsible for rural

areas of the Province - would want to see that system changed.

There is something radically wrong with a system where you

get calls - I get them; I have been around, speaking to different

municipalities, I have been at different forums in the past where municipalities

have brought their concerns to me, and I suppose they will continue to do so.

This coming Saturday, I will be speaking at the Humber Joint

Council meeting at Benoit's Cove, and I am not going to say anything that isn't

factual - there is no point. Municipalities today are more sophisticated,

whether small or large. They know what is in the municipal operating grants;

they know what repayment means, and the formula means for repayment on capital

debt and they can pretty well speak for themselves.

But some of the things the minister will need to have help

with, especially pertaining to this road component, Mr. Speaker, roads, no

matter where they may be in this Province, are vital to the infrastructure,

vital to the business community. Anywhere, whether in Labrador or on the Island

of Newfoundland, in communities large or small, you must have a good

transportation network, otherwise, you have absolutely nothing.

A small community of 700 people in my district lost $32,000

in one year on the road component and, to add insult to injury, December 19,

1990, it was cut from $2,000 in 1969 -

MR. ROBERTS: (Inaudible).

MR. WOODFORD: That's right, that is one.

MR. ROBERTS: (Inaudible).

MR. WOODFORD: Exactly, thirty kilometers of road, and

most of that is by-roads. From 1969 -

AN HON. MEMBER: (Inaudible).

MR. WOODFORD: Well - my fault; I was Mayor of the

community for ten years, I admit, but I didn't stymie business in the community.

AN HON. MEMBER: You should have taken over the roads.

MR. R. AYLWARD: I didn't take them over. They were always

the responsibility of the council in that community, ever since 1945.

AN HON. MEMBER: (Inaudible).

MR. WOODFORD: Yes. They were never with Transportation.

The problem is, that in that particular community alone - and

I can go on to others - you have approximately thirty kilometers of so-called

by-roads - and we refer to them as anything off the main thoroughfares. And

practically all the business in that community is taking place on those

particular roads, namely, forestry and agriculture. Now, what do you do? How do

you keep that up? With no infrastructure, whom do you tax? You can only tax the

people in the area so much. We don't have the luxury of St. John's - and I am

not saying that in the sense of trying to bash St. John's, I am saying, just

look what happened this year under the new assessment. It went up 25 per cent or

30 per cent, didn't it? Just imagine, I mean, a $100,000 home in St. John's, put

that out in the little community of Cormack and you will get $40,000 for it -

the same home, no difference in it - pavement by the door, a gutter there; the

only thing you wouldn't have is sidewalk. That is the difference.

AN HON. MEMBER: (Inaudible) mil rate.

MR. WOODFORD: You wouldn't have to put a mil rate in. You

see, this is where hon. members - and I can see now where the hon. the minister

can't get any help. I mean, you can put the mil rate up to 100 mils, if your

house isn't worth anything, you still don't pay anything, that's the problem.

AN HON. MEMBER: No, you just said it was worth $40,000.

MR. WOODFORD: That is right, okay. I will give you an

example. I won't say the community, I will give you another example if hon.

members want, a prime example. The first component under the MOG system is the

equalization component, that is the first component. Why is the equalization

component there? It is there because of the provincial average; they have a

provincial average for setting the equalization component. How they got that,

they still have not answered me yet, but I suspect they took all the properties

in the Province except Corner Brook, St. John's, Mount Pearl and probably Grand

Falls, took the average, divided it by the households in the Province and came

up with a percentage. Now, if anybody can tell me the difference, they can come

ahead, I challenged that before but nobody did it, so - Anyway, regardless of

that, I think they came up with a figure of somewhere around $48,000, $47, $48

something.

Go out into a community in this Province today and do an

assessment. I know of one community that has say 700 livyers, they did the

property assessments, five homes, five pieces of property in that particular

community, five, were over $75,000 in value. The equalization component works

like this, the minister knows -

AN HON. MEMBER: I know how it works because (inaudible).

MR. WOODFORD: How they arrived at the $48,000 provincial

average to determine the differential - because the only thing you are getting

paid for is your differential, that is what you are getting paid for and the

higher that average can be brought up in a municipality the less you get but the

only thing about it, you can put your assessments - the hon. member says: what

mil rate? Mil rate is not always the answer and this is why I think the minister

should have flexibility. The minister should have the power in his department to

use flexibility when it comes to each municipality in the Province because you

may be able to do it with say 5 mils, no problem. I know municipalities can

operate on 5 mils and not take bloody all from the government. I know

municipalities who cannot operate on 20 mils simply because the assessments are

so low, the property values are so low that even with the differential under the

equalization component and the local revenue component, that they cannot meet

their needs, no way.

And all those components, the equalization one, the local

revenue component especially those two, when it comes under the MOG system, the

only other two are the household component and the roads component, those are

the four new ones under the MOG system, so the household component has not

changed, that is $85 per household, you are not going to gain much by that

because if you gain on households, under the division factor and the

equalization component, you are going to lose under the deficiency one so that

is not going to bring you in any extra dollars there.

The only way municipalities can be hit directly, especially

with the way the business community is and the economy is, not only in the

Province today but in Canada, they are hit directly under this roads component

and block funding under this particular component should not include them. The

total MOG should not be in place. The minister should be given latitude in his

department. There is no trouble to pick up a piece of paper and tell how many

kilometres of roads are in the municipalities in the Province that have to be

looked after. You go down in the Minister of Education's district, go down in

the winter time, leave here and go down there, leave Deer Lake and go down there

in the winter time and see what it is going to cost for snow clearing. When we

are finished and wearing slippers around here, down there, they just cannot

drive, the expense, yes that is right, that is true, I mean, there is no

comparison with regards to what you spend.

Look at the budget in Roddickton today and look at the

budget, we will say here, for snow clearing or out in the hon. member for

Carbonear's district, and the comparisons on a per capita basis is night and

day. There is no comparisons whatsoever. This is where I am saying about

flexibility; you should have the flexibility to say to a community - the

minister brought up last week about one particular community up here had a

surplus in the bank.

You know something, I spent ten years in municipal politics

and I am a firm believer that any community in this Province today, whether they

are charging 1, 2, 15, or 20 mils - regardless of what they are charging - if

they can show a profit at the end of the year, then I tell you, you should call

them in right away, design a medal and give it to them, because they deserve it.

Believe you me, they deserve it. Those particular communities deserve a medal.

They deserve some kind of recognition, because I am telling you, they are not

operating in a very good environment.

AN HON. MEMBER: (Inaudible) their operating statement

(inaudible).

MR. WOODFORD: In their operating statement, yes, but I

know of some municipalities that have it in the bank, and it is great. You have

to have it up here, I tell you, to run a community and still have it in the

bank, I can assure you of that, because it takes a will. They are all

volunteers, all down, out around, unless you are in a big municipality today

where you can afford to chuck out a few dollars for running a council. I tell

you, it is no easy matter. But somehow the minister is going to have to have

support from his Cabinet colleagues to put money back into that road component,

and not next year. It has to be put in before the end of December. If not, I can

tell you right now that there are communities on this Island that are not going

to survive next year. They may survive in Nain. They will not survive for two

reasons. Economically they will be finished, and they are not going to get

people to run for municipal council, for municipal office.

People are getting frustrated. They are coming to me. They

are coming to members opposite. I know they are, and they are saying: Look, I am

just throwing my hands up in the air. I am not going to take the headaches of

this, to go in and sit down at a council meeting week after week, day after day.

I am getting absolutely nothing for it, only a sore head, dealing with people's

problems and making enemies. The biggest thing is making enemies.

In a larger municipality, or a larger city like St. John's or

Corner Brook, you can make decisions. You can put the mil rate up 5 mils, 6

mils, 7 mils, and the only thing you have to worry about is answering to the

public at the end of four years. But in a small municipality, I guarantee you,

every bingo game you go to, every card game, every senior citizen's thing,

wherever you go, mostly the same people, because usually in those small

communities they say: if you want something done, ask a busy person. That is

exactly what happens. You run into it, and it creates friction. Families get

divided over it, and so on.

Mr. Speaker, I only have a few minutes left. Time does not

warrant me to go on and talk about other problems with regard to the - I would

like to make a few comments pertaining to the repayment on capital debt - the

new formula for the repayment on capital debt.

I will not go into the specific formula itself, but once you

go over that 60 per cent, the government will pay up to $700; $750 the

government pays the full shot after. That is happening. Two municipalities in my

district, where the formula really - really there is no bearing on whether they

get approval or not, with regard to the difference of what they pay, because

they pay the full amount - but I have communities that cannot take it. Some are

up to $237 per household, $247 per household. I have one municipality that was

awarded $350,000 last year, but could not take one nickel because they would

have had to put the mil rate up overnight about 5 mils just to cover the balance

under the repayment of capital debt because, as you know, it was spread over

three years. All of a sudden this had to be taken into account; adjustments had

to be taken into account, in order to just make your payments on capital debt.

Municipalities had to turn it down, and I would submit today

to the minister that out of that $60 million that was approved last year for

capital funding under municipal affairs, I would say that not $40 million is

spent, or committed to be spent, and that, Mr. Speaker, is wrong. If there is

$60 million to be spent under Capital, $60 million should be tendered to be

spent under Capital. If we don't have a deficit today, or if we don't put monies

into Capital Account today, especially in municipalities where municipalities

are paying pretty well the whole shot, until they are over their $300 - the only

thing that comes into play every year is their CPI. That is the only thing that

is added to that $300. This year I think it is $337 per household. I think that

is the only difference that can be made pertaining to the repayment on capital

debt.

A lot of municipalities budgeted for $1 million. They got

$400,000, but they could have used $1 million. Why is it so hard for someone to

rationalize with giving this particular municipality the $1 million, and let the

work be done? I mean, they are paying the same. They are going to make their

payments, they are not indebted to government anymore. The department is going

to carry the same amount. Once the $60 million is allocated, they do that on a

certain ratio on a certain repayment schedule, and then that can be

accommodated.

So, if I were minister in a department, such as Municipal

Affairs and I allocated $60 million for Capital and there is $40 million or $45

million spent, I would want to know, within a month, which municipalities got it

and the ones that said no. Give it to the other ones, put it out, create jobs,

put some work out into the smaller municipalities around the Province and try to

accommodate people, especially people who are paying their bills, paying their

way. People who are paying their way can certainly accommodate the extra

funding.

Mr. Speaker, to comment on today's announcement by the

minister, pertaining to Newfoundland Hydro, one thing I would say to the

minister is that it is about time those cable companies were hit. They never hit

them hard enough, as far as I am concerned, Mr. Speaker, with regard to taxes.

For cable companies to make reference to the minister that they are regulated by

CRTC - so what! They come into a municipality and if it is spread out over ten

kilometers, what do they do? They pick out the nucleus of the homes, 100 or 150,

like down around your way and up my way -

AN HON. MEMBER: Clustered.

MR. WOODFORD: That is right, clustered. That is the word.

That is the word he gave me the other day when I called Montreal and talked to

one of the head fellows with one of the cable companies: Oh, we are in a

cluster. I said: You are in a cluster all right! They come into a community,

leave out one end or both ends and go into the middle, take their big haul and

go.

AN HON. MEMBER: That same one.

MR. WOODFORD: That same one. That is one of the ones.

MR. SPEAKER: Order, please!

The hon. the member's time is up.

MR. WOODFORD: I would like to have just another couple of

minutes.

SOME HON. MEMBERS: By leave! By leave!

MR. WOODFORD: Mr. Speaker, we didn't hit them hard

enough. If the minister brought in an amendment tomorrow to charge those people

more I would be the first to go along with him, because they have been skinning

their way and acting like vultures in municipalities around the Province for too

long. They were assessed a small amount of money by municipalities in my area

years ago. They just gave them a token, a bill for probably $200 a year. Do you

know that I have one municipality where that company fought that for six years

in the courts. Now, that is doing nothing for corporations in the Province. That

is not a community-minded business. That is not someone who is supporting

individuals in a community.

AN HON. MEMBER: What is the average around the Province

(inaudible)? What is the average?

MR. WOODFORD: The average, I think, is around 2 per cent

for anyone like Newfoundland Tel. Now, based on this, under The Municipalities

Act, municipalities always had the option that they could charge, I think it was

2 per cent - wasn't it? - 2 per cent on gross revenues? Or they could go the

other route and, on the strictly business sense of it, charge for the property

assessment.

AN HON. MEMBER: What would that be?

MR. WOODFORD: That is a little difference with business.

AN HON. MEMBER: Just say Harbour Grace was charging

overall (inaudible). That would be over 100 mils, would it not?

MR. WOODFORD: No.

Mr. Speaker, what the minister brought in today pertaining to

cable companies, as far as I am concerned, is none too late. They are not, as

far as I am concerned, doing what they are supposed to be doing. At least

Newfoundland Telephone and Newfoundland Light and Power will come into a

community, and if it is within a mile, if a pole was, say, within a mile to the

end of that road, at least they will extend it without any extra expense. Then

it is just put in with the rest of the income for the municipality and they go

on with their business.

I could say a little bit more, too, about that particular

situation with regard to Newfoundland Light and Newfoundland Hydro. What other

companies in this Province - what other private individual in this Province

today, who has a business in this Province, has the luxury of going to the PUB?

Not one. We have Newfoundland Telephone, Newfoundland Light and Power, and

Newfoundland Hydro.

AN HON. MEMBER: Newfoundland Telephone does not go to the

PUB (inaudible).

MR. WOODFORD: That is right. They go -

AN HON. MEMBER: (Inaudible).

MR. WOODFORD: No, they go through the CRTC, but -

AN HON. MEMBER: (Inaudible) competition.

MR. WOODFORD: Yes, but they have a monopoly. It is just

as well to admit that they have a monopoly, pretty well, on this.

You take Newfoundland Light and Power today. Fortis

Corporation today is one of the biggest and strongest companies in the Province.

They come to municipalities, and they even try to shirk their responsibility;

but through the Municipalities Act and through some other steps that were taken

by the Department of Municipal and Provincial Affairs, they paid up.

Newfoundland Telephone was a bit reluctant for awhile, but

eventually they paid up. They came into municipalities -

AN HON. MEMBER: This is going to benefit Newfoundland

Telephone (inaudible).

MR. WOODFORD: Oh, it will.

AN HON. MEMBER: Newfoundland Telephone will reap the

benefits. It is the municipalities who will get hurt.

MR. WOODFORD: Some municipalities yes, no question, will

get hurt; and some municipalities where the cable companies are in, they will

pick up a few extra dollars, but that is based on the per capita basis and based

on the amount of hookups.

Mr. Speaker, I would like for members opposite, through the

minister, to especially, if nothing else, take a look at the roads component of

the MOG system. That is very vital to municipalities in the Province, and I

would say that it could mean the survival or the demise of a lot of

municipalities in this Province. They cannot afford it, and they just cannot

pick up the tab for that particular part of the MOG system. So I would submit to

the minister that if there is anything done this year, that is one that should

be taken care of.

Thank you, Mr. Speaker.

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

MR. SULLIVAN: Thank you, Mr. Speaker.

Overall, the squeeze is gradually getting put on

municipalities. I can understand the minister's concern, and three of the

components actually there, I think, are beneficial, and they are fair and even

right across all municipalities in the Province. The equalization component;

certainly a local revenue incentive is important to entice communities to share

a greater percentage of the burden; and the household component is also fairly

standard.

What has happened in some municipalities, especially in my

district, the municipalities that have large numbers of roads, that used to get

$2,000 per kilometre for roads, are now getting $484 per kilometre. Some of

these communities have entered into contracts with Works, Services and

Transportation to pay $1,000 per kilometre for snow clearing, when actually they

are now receiving $484.

We find that the municipalities that will be in the best

shape are ones that have the fewest roads - the ones that are not dependent upon

this particular component. The ones with the largest number of roads are the

ones to experience the greatest difficulty.

Also, overall, communities that were benefitting by

facilities for transmission of electricity in their communities were doing

fairly well prior to this 2.5 per cent. Granted, the rationale behind it is

reasonable. It is going to equally share the total revenues over all

municipalities by usage rather than where the facility is located. There are

certain merits in that, but the key thing overall is that by having a cap on the

grant structure it is placing undue burdens on many communities.

I would also like to just briefly touch on the 1991-92 year,

in which in June there were some undue hardships placed on municipalities by not

knowing in advance. I know the minister has addressed this, and he has indicated

so, but when his inspectors went out, and I met with councils and talked with

mayors and clerks and managers, they indicated that they did not ask for any

payables. I will use examples. For example, Renews/Cappahayden community,

$114,000 budget, cut back $10,000. They looked at their bank balance of

September and they had $16,000 in the bank, not realizing a lot of their

payables are in the latter part of the year. They are now sitting on less than

half that and it is anticipated, by year end, there will either be a slight

deficit or a slight surplus, not a $16,000 balance.

AN HON. MEMBER: What community?

MR. SULLIVAN: Renews/Cappahayden.

Actually I think they indicated that there was $478.22 in the

bank and they had a surplus of $29,000 last year. I just had a meeting with them

last Tuesday and I asked them, in fact, if they were as well off as indicated,

and they indicated that, by year end, they may balance. They could have a slight

deficit or they could have $1,000 or $2,000 left. They just don't have any

money. I think one of the reasons, also, that they are going to be hard hit is

that Renews/Cappahayden traditionally had a large number of local roads, and

they always received $2,000 per kilometer in road component. That is one of the

communities that has such a small budget and no tax revenue base, that with the

road component now being pretty well eliminated or down to one-quarter what it

used to be, they are going to have even more hardships in the future.

Another area I would just like to mention, for the minister's

information, is Witless Bay. He indicated that they have,in term deposits and

cash in the bank, a total of $67,000. Now, this is a community, for instance,

that has a budget between $400,000 and $500,000. They had not paid for their

stockpiling salt and sand, and they have their winter crews. Their big

expenditure is occurring. They are down to half that amount now and they

indicate that, by year end, they may have a slight surplus. Now, they are not in

bad shape, certainly, and they are not in desperate shape, but there is a far

cry from a $67,000 surplus. The minister led us to believe they are a very

wealthy community. In fact, by year end they will be, approximately, in a

break-even position.

In the community of Petty Harbour/Maddox Cove -

MR. HOGAN: (Inaudible) in term deposit in the bank.

MR. SULLIVAN: Yes, of which, shortly after, they

transferred $33,000 to meet payables, and they have more payables now. I think,

in an assessment it is very important to do projections to year end on

receivables and payables. I have been informed by one municipality that I met

with in a meeting this past week that they didn't ask for any payables and

records up to year end when the inspector went out. Now, I understand that they

had to visit as many communities as possible. I am not sure of the in-depth

amount of inspection that was done, but I can assure you the communities

mentioned here are not in very good shape.

My colleague from Kilbride mentioned Petty Harbour/Maddox

Cove. In fact, in the last three years they have had $75,000 extra in

expenditures, I think, with the cost of fire fighting and so on. Now, with cut

backs in the generation of equipment and so on and for transmission, they are

going to have an extra burden. They are facing a fairly severe deficit upcoming

in this year.

Also, I would like to elaborate on Ferryland, for example. In

the community of Ferryland, I think you indicated they weren't ready for an

inspector to see their books, but an inspector did go out and visit them, which

I am sure I can -

MR. HOGAN: I said they didn't have the reports there.

MR. SULLIVAN: No, you said, when they were contacted they

weren't available to meet the inspector.

The only two communities, Mr. Speaker, that have not been

visited on the Southern Shore, as far as I know to date, are Ferryland and

probably Aquaforte. It was because officials in those particular towns were not

ready to meet with the inspectors on the particular day they were available.

They did meet one in Ferryland. I won't make a big issue of that. But basically,

with the situation in Ferryland, for example, they get $46,153 and they still

have a shortfall of $34,000 that they still owe to meet debt charges. That

community now has an accumulated deficit, I think, of $69,000 and they have

entered into a contract with transportation for snow clearing of $1,000 per

kilometer when actually they are only receiving $484. In fact, I have up to

dates on all communities in my district.

Bay Bulls is another community that in June - and the meeting

was requested, by the way, by the Mayor of Bay Bulls, not the Mayor of Ferryland

and it was held in Ferryland because it was central and all other municipalities

could attend. They had a budget and had plans to do some road work for residents

that had built new houses there. They had cut backs and they got a lot of angry

residents - I shouldn't say a lot, there were three specific letters, I know, I

got copies of, that I think you department has received, from people who were

given commitments that the road was going to be done. Because of the $14,000 cut

back they can't carry out work in that area.

It is frustrating for people who are sitting on municipal

governments because with so much cost being down loaded, there is a lot of

frustration. The mayor of one community told me last week that he spends

thirty-three hours per week on municipal business and he said it is very

difficult to get the people to take an interest and to be concerned because the

extra responsibilities and the pressure that is coming, they do not want to be a

part of it and it is rather frustrating. I know some of the communities are

doing fine but some communities are in fairly difficult shape.

Just to illustrate the point: the communities that have no

roads, the minister was right, the Fermeuse community yes, is fairly well off

and one of the reasons why is because they have no roads in the community,

hardly any roads at all, a very low kilometres of roads and under this new

formula they are not going to be hurt severely, but in Cape Broyle for example,

a newly incorporated community, there is a request to take over the roads and

they have refused it. And why would they want to take over a road when there is

no road component, they are going to incur tens of thousands of dollars worth of

expenditures and they will receive no money in response?

I guess they would be crazy from a local point of view, so

basically they are refusing to do it because it is going to save them $30,000.

They are reasonably well off because of this, but that is only one of the two

communities in the whole district that is in reasonably good financial shape. So

I would ask the minister again, to look at this capping of grants because the

roads component is having a very serious affect upon the operation of

communities. When a small community like Renews that had, I think it is probably

$20,000 or $30,000 out of $114,000 used to be in road components, that has now

dwindled down to less than one-quarter of that, they are going to be in more

serious trouble next year that they were this year.

The only communities that seem to be surviving are ones that

do not have high debt loads. Aquaforte for example, had a water system put in

under a federal grants incentives and fortunately they are not in great

difficulty. Port Kirwan, the one the minister referred to only has an

accumulated deficit of $5,000, they only have sixty voters in the entire

community of Port Kirwan so it is only a very small community. In fact, this

past week the community of Ferryland just removed street lighting to the value

of $10,000 in their community because they are in serious financial difficulty

and there are going to be increased pressures being put up on this community -

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Pardon?

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: I said they removed $10,000 worth of street

lighting in the community -

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Yes. - and it probably was not a very

bright idea but they did it. Overall, I would just ask the minister, that out of

his four components there, that once again, the roads component, I think it is

very serious and I am sure he must realize it, and the other three components in

the program can be equally impacted upon all municipalities in the Province. In

the terms of a local incentive, there is nothing wrong with it; the household

components and so on, there is no major problem. There is a problem from

communities with varying numbers of roads, and communities took on those roads

because there were $2,000 per kilometre for them. Now they are into a situation

where they have these and they cannot off load them which they would very much

like to do and they have built a budget around the road structures and they used

actually, not all that monies on roads, the $2,000 per kilometre, but they built

a budget around that road structure, that now they are stuck with the burden and

they cannot off load these, so in fact, what is basically going to happen, in

communities too, is that with any new development and any new housing, the

community is not going to give permits for building in parts of the community

because there is no road component built in to service that particular area and

that is going to be a problem toward growth and expansion of a community.

Now in most rural areas, we already experience a problem by a

reduction in the number of people living in these communities. The population is

moving into urban areas, it is happening here and it is happening right across

the country, where close to 60 per cent of the people in this country now live

in urban areas, so the per capita cost of operating in these rural areas is

increasing, and we can see, down the road, where the burden upon each of these

municipalities is going to be considerably increased. We have to put some

mechanisms in place, some type of formula that will give those rural communities

a chance to survive and meet basic requirements.

It is easier to establish economies in urban areas, not so

easy in rural areas. And one of the key c