March 2,

HOUSE OF ASSEMBLY PROCEEDINGS

Vol. XLII No. 3

The House met at 2:00 p.m.

MR. SPEAKER (Dicks): Order, please!

Statements by Ministers

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

Technology.

MR. FUREY: Mr. Speaker, I want to inform the House of a

necessary action that is being taken by Enterprise Newfoundland and Labrador

Corporation in the matter of the management of the financial affairs of the

community of Sheshatshit.

Effective today, Mr. Speaker, ENL, under the authority vested

in them as managers of the "Contribution Agreement Between the Government of

Canada and the Government of Newfoundland and Labrador for the Benefit of the

Innu Communities of Labrador, 1991-1996" has placed the financial management of

the community in trusteeship.

This has been done, Mr. Speaker, following the presentation

of an audited financial statement that was prepared to the end of December, 1993

at the request of ENL.

This audit, Mr. Speaker, revealed very serious financial

management issues.

I would point out as well that this is the second time that

such action has been deemed necessary within the first three years of the

agreement.

We hope, Mr. Speaker, that with the cooperation of the

Sheshatshit Band Council, Enterprise Newfoundland and Labrador Corporation, and

the trustee that the management of the council's affairs can be returned to them

at the earliest possible time.

Thank you, Mr. Speaker.

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

MR. SIMMS: Mr. Speaker, I thank the minister for calling

me prior to the House just to alert me to this because, I guess, he did not have

the statements printed at that time and did not have a chance to send it over.

There is not much to say about it except, I believe, he has done the right

thing, the request has been made and we will just have to wait and see what

transpires from here.

MR. SPEAKER: Are there further statements by ministers?

MR. SIMMS: Mr. Speaker.

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

MR. SIMMS: Mr. Speaker, before we get to Question Period

I wonder if I could pay tribute to a couple of individuals who passed away since

the House closed? I meant to do it right at the beginning but the minister was

recognized. I wonder if I could have leave to do that for a moment?

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

have leave of the House?

Leave is given.

MR. SIMMS: Mr. Speaker, there are a number of people, I

guess, that we could pay tribute to, and no doubt we will. I know the Premier

has done it publicly for a couple of people who passed away but maybe in the

House he will do those as well. There are two that I would like to pay tribute

to today. First of all the passing of Gordon Lidstone. Many people in the

Province and certainly in this area of the Province would be aware that Mr.

Lidstone was a former Mayor of the City of Mount Pearl and he passed away on

January 13, 1994. He was a councillor from 1965 to 1978 and was also a deputy

mayor for a short time, and in 1966 he was the mayor. He was a well known

independent businessman, contractor, and land developer in the Mount Pearl area

for many years. He played a very active role in his community and with his

church and was a volunteer with the Mount Pearl Minor Hockey Association. I had

the privilege of knowing Mr. Lidstone personally and met him on a number of

occasions. He will be sorely missed by people of the Province and in particular,

the people of his community. He is survived by his wife Jean, two sons and two

daughters and I am sure members would like to express their condolences.

While I am on my feet, I would also like to take note of the

passing of Major Enos Darby who passed away on January 7. Major Darby was born

in Great Burin in Placentia Bay, and enlisted in the Royal Navy at the beginning

of World War II and it was on the H.M.S Javelin, which was the flagship of a

fleet under the command of Lord Louis Mountbatten, where he witnessed the horror

of military conflict. He was the only member of his gun crew to escape death

when a torpedo tore away the gun-mounting. After spending many hours in the oily

in action, he was rescued, miraculously, and spent sixteen months in the Naval

Hospital at Plymouth and had extensive plastic surgery.

After he was discharged he returned home and prepared himself

to rejoin his brother in the fishery, however, he then decided to join the

Salvation Army and he entered that religion's training college here in St.

John's and then went on to serve the Salvation Army in many communities around

the Province, Blaketown, Glovertown, Seal Cove, Clarenville, Elliston,

Roddickton, Mundy Pond, Norris Arm and the old Duckworth Corps in St. John's.

After several years as a travelling evangelist, Major Darby served as the

Salvation Army chaplain to the Health Sciences Centre, St. Clare's Mercy

Hospital, as well as chaplain to the Royal Naval Association of Branch 36 at the

Royal Canadian Legion.

Mr. Speaker, I would like to ask the Members of the House to

extend condolences to his family and relatives.

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, I can only endorse fully

every comment the Leader of the Opposition made. Yesterday, I contemplated

rising to a similar thing in respect of three other people, very prominent

people who contributed greatly to this Province, but I decided not to do it

because I am concerned that, in doing so, we leave out people and it gets

misinterpreted, so I am going to suggest, and just by way of note, just

mentioned who the three people were, one of whom was Clarence Powell, a

distinguished public servant in this Province for many, many years, and his most

significant impact was as Chairman of the Public Utilities Board and developed

for this Province's Public Utility regulatory system, a great reputation all

across this country, largely attributable to the work that Clarence Powell did.

He died just last week I believe.

Cam Eaton, one of Newfoundland's famous war heroes and one of

the great business contributors to the Province. A man of sterling reputation,

an individual whose judgement was greatly valued, died recently after undergoing

surgery for cancer and his lost will be greatly missed. As well as being a

businessman and a war hero, he was a also a great contributor on a personal

basis of his time - things like the General Hospital Corporation that he served

faithfully for many years - first Chair, Aaron Bailey, a distinguished

Newfoundlander. The last connection with Sir William Coaker, perhaps in this

Province, who lived in Sir William Coaker's house in Port Union. A distinguished

record of service to the Fishermen's Union Trading Company for many, many years;

helped found an organized union electrical light and power company; was one of

the promoters of the bringing together of the five or six utilities that

ultimately came together to be amalgamated as Newfoundland Light and Power in, I

think 1956 or 1966 probably it may have been - a distinguished Newfoundlander as

well.

I am concerned that by standing in the House to give this

kind of recognition we cause some concern or perhaps even some offence to people

because others, who were equally deserving, are not recognized. So I am going to

suggest to hon. members that in the future we might confine our remarks along

these lines, perhaps to people who've had a direct connection with the House,

former members and things of that nature, while at the same time I must endorse

fully the comments of the Leader of the Opposition.

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

MR. HARRIS: Thank you, Mr. Speaker. I would like to rise

to endorse the comments of both the Leader of the Opposition and the Premier,

concerning the individuals who have made distinguished contributions to our

Province's history, to our people. Without pointing to either one of them I also

have a fear, as the Premier expressed, that in making specific recognition of

some individuals, there will be others who will be left out. I don't know what

the solution is but I certainly wouldn't hesitate to endorse the comments about

these individuals here and certainly members of this House who have passed away

ought to be officially recognized. It is very difficult to know what the limit

should be after that but certainly the contribution of these individuals is well

recognized by the vast majority of people in the Province and I would heartily

endorse them.

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

MR. ROBERTS: Mr. Speaker, let me leave the point by

suggesting that perhaps my friend from Grand Bank, my friend from St. John's

East and I might take, at some point when it is convenient to all three of us, a

few moments to discuss this matter and see if we can work on an agreed upon

procedure that will accommodate the proper concerns of members on all sides of

the House. If that is agreeable, I will leave it at that for the time being.

Oral Questions

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

MR. SIMMS: Mr. Speaker, I have some questions I would

like to ask of the Premier concerning the recent federal Budget, in particular,

in its impact on this Province.

The Premier has always been recognized and known as a leading

advocate of large cuts in spending, both at the provincial and federal level,

but in the past he has always attached a bit of a qualification to his

enthusiasm for those cuts by saying that we should take our fair share along

with all the other provinces. Yet, Mr. Speaker, the Premier has been strangely

silent on this occasion, the occasion of the first Budget of his Liberal cousins

in Ottawa, even though our share of all other federal cuts, including fisheries

compensation, in addition to those, the cuts to UI will be at least three times

as severe here as it will be for the rest of the nation. I want to ask the

Premier: Has he protested the unfair punishment administered to this Province in

that federal Budget, or does he still think we only took our fair share?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: If there were unfair punishment, as the

Leader of the Opposition characterizes it, I would be leading the protest, but,

Mr. Speaker, there is no such thing and it is a gross misrepresentation of what

has occurred to characterize it as such. If there is to be an adjustment in

entitlement under the UI program and dealing with income security by another

means, then it is inevitable, by the simple law of mathematics, that the town or

the province that has the highest level of unemployment would receive the

highest level of reduction on a per capita basis. Unless the rules of

mathematics have changed that is an unavoidable consequence of the reality that

Newfoundland and Labrador has the highest level of unemployment insurance.

It is not unfair punishment of Newfoundland, as the Leader of

the Opposition would characterize it, and it is a political misrepresentation to

do so.

MR. SIMMS: A supplementary, Mr. Speaker.

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

Opposition.

MR. SIMMS: The Premier is the expert on political

misrepresentation, let me tell him, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SIMMS: He has his counterparts in other Atlantic

Provinces - Premier Callbeck protesting because it is going to mean a reduction

of income to that province of about $50 million - tiny little P.E.I. The finance

minister in New Brunswick is protesting because of the negative effect it is

going to have on New Brunswick. And here we have our Premier silent - strangely

silent - because he doesn't think it is unfair. Well, Mr. Speaker, I think there

are thousands of Newfoundlanders who would disagree; but, on the other hand,

when you recognize that not only does the Premier approve of the punishment

administered to us in that federal Budget, he asked for it when he proposed his

ISP. That's the bottom line in this, Mr. Speaker.

So I want to ask him, having made that presentation of his

ISP program, in which he asked for even more severe cuts to the UI program,

surely he couldn't expect anything different, so will he now admit that the

Federal Government took what it wanted out of the UI money that comes into this

Province and didn't leave any money for his cherished ISP program? And will he

now admit, or at least proclaim the death of his Income Supplementation Program.

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, let me begin by correcting

the hon. member again. I have not been strangely silent. I stated very clearly,

to anybody who was prepared to listen, or anybody who cared to ask. All news

media who asked me, heard me state the position that I have stated here in the

House yesterday and again today, so it's not a question of being strangely

silent. I know the Opposition Leader needs some props for his argument, but

that's not one on which he can rely for very long.

The other thing that I should say to him is that I took the

same position when the Mulroney Conservative Association introduced cuts that

saw reductions in this Province. I took precisely the same position and said I

couldn't quarrel with the Federal Government taking these steps even though they

adversely impacted on Newfoundland, because I had the long-term interests of the

security of Newfoundland at stake, and I didn't want to see anything happen to

the ability of the federal government to meet that long-term obligation. I said

no more now than I said then, precisely the same approach.

I take no responsibility for the attitudes or opinions of

either Premier Callbeck of Prince Edward Island, or Finance Minister Maher of

New Brunswick. They have to justify their own positions. It's enough for me to

justify mine.

With respect to the income security proposal, let me say to

hon. members that the day will come when most people in this House will say:

Thank God we had the foresight to put forward something of this nature to

protect income for our people. Because what they see happening this year, in

terms of unemployment insurance, is highly unlikely to stop there. It is going

to bring about an overall adjustment in the system, so we need to have an income

security system in place for our people to make sure that there is a reasonable

level of income, at least, on which people can rely. That is the purpose of

this.

The Canadian people can no longer afford to maintain the

system with the pressures we have on it as it is structured in Canada today, and

bankrupting the Federal Government by poking our heads in the sand and ignoring

the consequences of the burden of the present system can only serve to greatly

harm the people of this Province in the future. I can say, Mr. Speaker, in my

opinion, the people of this Province will, in the future, say: Thank God we had

a government with the courage to tell it as it was and put forward the right

solutions.

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

MR. SIMMS: Thank you, Mr. Speaker. I would like to ask

the Premier, What province does he think he is living in? If he doesn't

recognize the seriousness of the situation out there - I mean, he doesn't know

what is going on. This Premier can say all he wants to say, but there was not a

whimper from him in protest of this UI program, not a whimper!

SOME HON. MEMBERS: Hear, hear!

MR. SIMMS: Not a whimper, even though this Province will

lose twice as much in income from the UI cuts and the fishery compensation cuts

as we get from wages out at Hibernia. That is the reality, the stark reality of

the situation, Mr. Speaker. That is the reality of the disaster that has been

wreaked on this Province as a result of Paul Martin's Budget.

I want to ask him: When is he going to stop catering to

mainland press and politicians who want to make Newfoundland the scapegoat for

the problems these mainlanders have inflicted upon themselves and on us? When is

he going to stop that? When is he going to stand up and speak out for

Newfoundland? When is he going to realize he is not the spokesman for Canada?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, no person can stop something

that he hasn't started. So the answer is, it is not going to stop because it

never started. The situation that the Leader of the Opposition has described

simply does not exist. The numbers that he represents are totally wrong.

It is true to say I did not protest what Mr. Martin did.

People asked me my opinion, I expressed my opinion. I said, if I were writing

the federal Budget and had responsibility only for Newfoundland, I might have

done things differently. I would not have imposed those cuts. I would not have

put it in place in the way in which Mr. Martin did. But I have to be honest

enough to recognize that Paul Martin has responsibility for all parts of this

nation, not just this Province, and I am not prepared to put any more political

pressure on Paul Martin and the Liberal Party to give a special privileged

position to Newfoundland than I was prepared to put on Mulroney and Wilson and

John Crosbie.

I stood in this House and asked the people of this Province

to have some understanding - I remember using the words - have some

understanding for what Mr. Wilson and Mr. Mulroney had to do in order to get

federal finances in order, notwithstanding the impact on this Province. Now, I

will go and dig out the precise references and read it for hon. members so that

they can see that.

MR. SIMMS: Not a whimper from you, not a whimper!

PREMIER WELLS: Now, that is a pretty weak fallback for

the Leader of the Opposition - `not a whimper'. I didn't whimper any more then

than I whimper now. I don't whimper, I express honest opinions in a

straightforward way.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Mount Pearl.

MR. WINDSOR: Thank you, Mr. Speaker.

Now that we've heard nothing from the `Premier of Canada' let

me ask the Minister of Finance for Newfoundland: In view of the fact that the

Government of Prince Edward Island, which is a province of about one-fifth our

size, and with a slightly lower unemployment rate, predicting that the changes

to UI will cost that province about $50 million, New Brunswick, which is

slightly larger, 100,000 people more, but about half the unemployment rate as

compared to Newfoundland, is predicting about a $200 million loss in

unemployment to that province, will the minister tell us how much now the

Department of Finance of Newfoundland has calculated that it will cost next year

as a result of these changes announced in the federal Budget?

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

MR. BAKER: Mr. Speaker, as I have explained several times

publicly, the changes in the Federal Government will mean a decrease of about -

a total effect of about $15 million on our budgetary position for next year.

That involves two things. It involves an estimated drop in

revenue of perhaps $11 million or $12 million, and it involves an increase in

social service expenditure of $2 million to $3 million. That is the net effect

of the changes in the federal Budget on the Budget of this Province.

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

Mount Pearl.

MR. WINDSOR: Mr. Speaker, the question I asked the

minister is: What is the impact on the economy of Newfoundland? How much loss

will we see in revenue coming into Newfoundland from the unemployment insurance

program?

I can tell the minister, in fact, that it will be in the

range of about $250 million next year, and probably more. Add to that, $150

million to $200 million that will be lost through the Fisheries Adjustment

Program, and we are looking at about $400 million to $500 million loss to the

economy of this Province next year.

Can the minister tell the House how much the Provincial

Government stands to lose from its own resource? He just told us about $13

million in UI. How much in total does he expect to lose in his Budget this year,

and next year, when it all takes effect?

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

MR. BAKER: Mr. Speaker, I explained to him the effect it

would have on our Budget in the coming budgetary year. I would like to point

out, for members of the House as well as members of the general public, that the

numbers that the hon. member is using are totally, totally, absolutely

incorrect. He is making assumptions about which he has no knowledge. He is

talking about a reduction of hundreds and hundreds of millions of dollars in

payments through the Fisheries Adjustment Program. I will say to the hon.

member, he could not be more wrong than he is here today.

MR. SPEAKER: Order, please!

A final supplementary, the hon. the Member for Mount Pearl.

MR. WINDSOR: Thank you, Mr. Speaker.

Well, if I am so wrong, will the minister please tell me -

this is the third time I have asked him - what is the impact on the economy of

this Province?

SOME HON. MEMBERS: Hear, hear!

MR. WINDSOR: By skating around the answer he is only

admitting that he doesn't know. This government has not yet calculated how much

the impact will be on this Province.

Does the minister have any numbers to show what impact

changes to UI and fisheries will have on unemployment in the Province? How much

will our unemployment increase this year? What is the cost to the economy, and

what is the difference in unemployment?

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

MR. BAKER: Mr. Speaker, I gave him most of those answers.

I would like to remind hon. members that the changes in the

UI regulations took several forms. One of them was a change in benefits payable,

and the change was both positive and negative. People receiving low benefits,

who had families to support, would receive an increase in UI payments, going

from 57 per cent of the income level to 60 per cent,

whereas the recipients who

were not in this circumstance would receive a decrease from 57 per cent to 55

per cent which, in fact, would tend to balance each other out in this particular

Province.

Mr. Speaker, as to the ultimate effect this is going to have,

we will simply have to wait and see. I have estimated, in our Budget, that it

would have a net effect of about $15 million in our position next year, and that

is a fairly firm figure that the hon. gentleman should accept.

In terms of NCARP, the Fisheries Response Program, until that

program is fully decided upon and explained, there is no number factored in for

that, but I would suggest to hon. members that every indication I have is that

there will be very little change from the previous year.

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

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

a question for the Premier.

Both the Minister of Fisheries and Oceans and the Premier

have said consistently over the last couple of months that the Federal and

Provincial Governments are working together on a new fisheries compensation

package, and just prior to the federal Budget the Premier met with the Minister

of Fisheries and Oceans, and Human Resource Minister Axworthy, I believe it was

in Corner Brook, to discuss a new package. Of course, we have heard the news now

that there will be $1.7 billion in that particular program over the next five

years, I guess about half what has been spent the last two years.

I want to ask the Premier: Does he agree with that amount,

and did he tell Mr. Tobin and Mr. Axworthy that that was enough?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, I should tell the House and

the hon. member that his figures are totally incorrect. He said 1.7, about half

of what was spent over the last two years.

AN HON. MEMBER: (Inaudible)

PREMIER WELLS: Well, even if his figures were right then

l.7 would relate to a four year period. The equivalent would be a four year

period, it was half. Now, the reality, I am told, is the amount spent over the

last two years was something in the neighbourhood of $600 million.

AN HON. MEMBER: It was more than that.

PREMIER WELLS: Well, I can only rely on the federal

officials and ministers who account for it. The total spent on compensation over

the last couple of years was about $600 million. Now, I will try and get the

precise figures. The amount that the minister announced, the Minister of Finance

announced in the Budget, was $1.7 billion in new additional funds, $240 million

or $250 million, something of that order, in other program funds, so it comes to

a total of $1.9 billion. Now, Mr. Speaker, if in fact $600 million was spent in

two years and they are going to spend $1.9 billion in five years then I do not

see how that gets to be cut in half. I do not understand those mathematics.

MR. SPEAKER: A supplementary, the hon. Opposition House

Leader.

MR. W. MATTHEWS: Mr. Speaker, that is part of the problem

with our school system, the Premier has not been exposed to new Math. I want to

say to him that the $1.9 billion that the Premier refers to we all know that

there are a couple of -

MR. BAKER: Billion.

MR. W. MATTHEWS: The $1.9 billion, I say to the Minister

of Finance. Now, just relax. The $200 million that makes the $1.7, $1.9 billion

will take the package up to the middle of May. That is why you are referring to

it as $1.9 billion. The $200 million is not new money, it is to get us to the

middle of May when the new program kicks in. Now, Mr. Speaker, Mr. Tobin has

agreed that there is going to be a cut in the weekly compensation benefit

package and he is going to have to trim a fair bit more to keep expenditures

within the $1.7 billion. I want to ask the Premier, in his meetings and in the

consultation process he has had with both federal ministers, what else have you

agreed to do? Will you, for example, drop everyone who has a temporary fishing

licence from the package? Will benefits be cut by more than what Mr. Tobin

indicates or will we see the number of people receiving fisheries compensation

benefits cut in half?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Virtually all of those suggestions have no

foundation whatsoever.

AN HON. MEMBER: They are all wrong.

PREMIER WELLS: Oh, yes, all concocted and fabricated, for

political purposes. Mr. Speaker, I can report that at the meetings a week or ten

days ago with the Minister of Fisheries and the Minister of Human Resources

Development, and in subsequent conversations with the Prime Minister and the

Minister of Fisheries and Oceans, we discussed going forward on this basis. That

the federal and provincial governments would put in place a ministerial

committee on each side. The Prime Minister has already named the federal

committee. They are to consist of the Chairman, hon. Marcel Mass, the Minister

of Fisheries and Oceans, the Minister of Human Resources Development, and the

Minister responsible for ACOA, Mr. Dingwall, those four. I have named the

Minister of Fisheries, the Minister of Employment and Labour Relations, and the

Minister of Industry, Trade and Technology, with my humble self as Chair. That

is the four person committee. That was done primarily, Mr. Speaker, for two

reasons, because I am the minister who has responsibility for Intergovernmental

Affairs, in other words Mr. Mass's counterpart, and this is also of such

importance to the people of the Province and the Government of the Province that

I felt it appropriate that the Premier should be personally involved along with

the others.

AN HON. MEMBER: (Inaudible).

PREMIER WELLS: You might tell your colleagues.

The approach we agreed to take is that we would seek to deal

with this in an effort that involved three specific aspects. First, is ensuring

an adequate level of income security for the people that are displaced or whose

ability to earn an income has been displaced as a result of this catastrophe.

The preferred position is to find it by means of finding alternate employment.

If we can do it through generation of private sector opportunities that is the

preferred means, that together with training programs for whatever alternate

opportunities are available. If no private sector alternate opportunities are

available we should try and generate further infra-structure activity in this

Province that would allow people to be employed and earn an acceptable income in

this program. We discussed at least a half-dozen different kinds of work that

could be done in this Province that would provide for employment opportunity in

all areas of the Province affected by the fishery.

AN HON. MEMBER: (Inaudible).

PREMIER WELLS: Well I have to wait for the federal

government. It would be improper for me to be making announcements until I have

their approval. So I don't want to do that but there were at least half a dozen

areas and I think hon. members opposite would endorse virtually every one of

them. They would make a significant contribution to the Province. That's the

first one. The second one is we agree that we have to restructure the fishing

industry of this Province, the harvesting sector and the processing sector, and

go forward on a cooperative and balanced basis so that we can build a secure and

profitable fishery for the future. The third one is a recognition of the

substantial impact on the economy of this Province that's been caused as a

result of the fishery collapse and we have to jointly find a solution to that

problem as well.

Now that's the three-pronged approached but we also agree

that at the moment the federal government has to make another special effort and

any of you who listened heard the Prime Minister speak to that when he was out

in the foyer here earlier - no I guess it was last week - when he stated very

clearly his commitment to deal with the foreign overfishing problem. That is the

fourth aspect of it that has to be done. So that's the approach that we've

agreed to take and that is what we are going to be doing, Mr. Speaker.

MR. SPEAKER: A supplementary, the hon. the Opposition

House Leader.

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

glad I didn't ask the Premier a complex question.

Everyone knows that the Premier asked the Prime Minister of

Canada to phase out the Fisheries Compensation Program over five years. It shows

in his ISP Proposal, page 49, it shows the table of phase-out starting from

$362.2 million down to zero in five years. I want to ask the Premier, in his

discussions with both federal ministers and the Prime Minister, is that also the

intent of the new Fisheries Compensation Package, to have it phased out over

five years? Will benefits from the fisheries compensation end in five years time

even if there is no improvement in our fishery? Is that the thrust of these

discussions the Premier has been involved in, is that what he has agreed to?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: No, Mr. Speaker, it wasn't suggested, as

the hon. member has said, at all. I'll tell you what has been proposed.

AN HON. MEMBER: (Inaudible).

PREMIER WELLS: No, that's the hon. members

interpretation

of it. No, more specifically it's the hon. members misrepresentation of it, to

be more accurate, that's what it is. Most members know, Mr. Speaker, what the

income security proposal was, it's a blending of the use of social assistance

funds and the extra unemployment insurance funds to provide for an income

security program that would not have disincentives to work and disincentives to

report income. What we've said, Mr. Speaker, is because of the particular

situation in the fisheries, it ought not to be applied to people engaged in the

fishery immediately. It ought to be phased in over a period of five years in its

application to the fishery, not that we asked them to phase out the fishery

program over five years. What we've suggested is - because the fishery situation

is so different from the unemployment situation generally in the Province - we

asked the federal government not to apply the income security proposal to the

fisheries immediately but to see it phased in over a period of five years for

those people who have not the good fortune to find alternative employment or be

back in the fishery by that time, not to penalize them by reducing it to the ISP

level immediately - quite a different approach, Mr. Speaker.

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

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

the Premier and concerns the government's public service bargaining posture with

respect to the threat of the removal of severance pay. The Premier knows that

this has caused upwards of 200 to 300 teachers to feel forced to resign from

their profession in mid-school year in order to protect their severance pay. I

want to know, is the Premier concerned about the extreme negative consequences

to the school children and to the education system in general, resulting from

this, especially in view of the Minister of Education's statement earlier today,

that they will be unlikely to be able to replace all those teachers between now

and the end of the school year?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, it is not the government's

intention to cut off severance, we intend to maintain severance for people who

are severed. We are, however, asking about, and the minister told me he put

forward to the unions as part of the negotiating process, a proposal that

severance in the case of people who are retiring or who leave the public service

to go and find perhaps a better paying job somewhere else, that we are concerned

that it is unfair to the taxpayers of this Province to ask them to pay an

additional, substantial sum of money to Members of the House, to teachers, to

public servants or anybody else who leave their positions voluntarily to go and

perhaps get a higher paying job somewhere else. Is it fair to ask the taxpayers

of this Province to continue to do that, and pay their taxes to do it, is that

fair?

We think it is not fair and the minister is asking the people

concerned to consider this as one means of helping to deal with the financial

problem that the government has, that the taxpayers of this Province has. Now

that is exactly what the minister did. He also, Mr. Speaker, put it forward in

the terms of collective bargaining, as the minister explained today, and the NTA

bargaining team or the NTA executive, for whatever reason, felt they wanted to

put it forward as the government cancelling severance. That is an outrageous

fraud to say it in that way. The government is not proposing any such thing.

What the government is proposing has been made very clear.

Now let me also remind the hon. member that it is

irresponsible to be fearmongering. The hon. member says, 200 to 300 teachers are

threatening to resign -

AN HON. MEMBER: They have resigned.

PREMIER WELLS: - have resigned?

MR. SULLIVAN: Yes.

AN HON. MEMBER: Forced to resign.

PREMIER WELLS: Forced to resign. I wouldn't bother to

answer that; that is so unreal.

AN HON. MEMBER: Oh, oh!

MR. SPEAKER: Order, please!

A supplementary, the Member for St. John's East.

MR. HARRIS: Mr. Speaker, in order to protect the school

year for children in this Province, is the Premier prepared to say that the

government will continue these negotiated benefits, at least until June 30, to

allow teachers who are eligible to resign and use these negotiated benefits to

finish the school year to benefit the school children of this Province?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, we haven't said they were

going to go. This is a bargaining proposal that the minister put forward to the

NTA. Let me also remind hon. members that there is a requirement to give three

months notice, if teachers are going to resign. Now, where is their concern for

school children if they are not giving that notice or if superintendents are

waiving it? Where is their concern for school children?

MR. WINDSOR: Where is your concern for the school

children, is the question.

MR. SPEAKER: Order, please!

The hon. the Member for Green Bay.

MR. HEWLETT: Thank you, Mr. Speaker.

MR. SIMMS: How much time is left?

MR. SPEAKER: About ten seconds.

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

Minister -

MR. SPEAKER: Question Period has now expired.

MR. HEWLETT: Thank you, Mr. Speaker.

AN HON. MEMBER: (Inaudible).

MR. SPEAKER: I think you are two seconds too late.

Question period has elapsed.

Presenting Reports by

Standing and Special Committees

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

DR. KITCHEN: Thank you, Mr. Speaker. I would like to

present the annual report of the Newfoundland Medicare Commission for the year

ended March 31, 1993 - a very interesting report, and if any members opposite

have trouble reading it or understanding the numbers, I would be very glad to

explain it to them.

Notices of Motion

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

MR. L. MATTHEWS: Thank you, Mr. Speaker.

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

the following resolution:

WHEREAS the Strategic Economic Plan of Newfoundland and

Labrador firmly establishes the private sector as being the primary engine of

economic growth within the Province; and

WHEREAS 66 per cent of all new jobs are generated in the area

of small family businesses; and

WHEREAS small family businesses account for 55 per cent of

the gross national product; and

WHEREAS various studies and reports have pointed to small and

medium-sized businesses as one of the potential growth areas of the economy of

this Province;

BE IT THEREFORE RESOLVED that this House of Assembly reaffirm

its recognition of small business as a major part of the private sector economy

of this Province and reaffirm its commitment to: support organizations that

promote the interest of small business; develop programs to assist small

businesses in this Province; promote the fostering of an economic environment

wherein small businesses development is encouraged; continue to streamline the

regulatory processes and structures of government so as to simplify and enhance

the possibility of success of small business enterprises; and encourage the

development of entrepreneurship in the Province at the small business level

generally.

Thank you, Mr. Speaker.

MR. SPEAKER: Answers to questions for which notice has

been given.

MS. VERGE: Where is the Public Libraries report?

Petitions

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

West.

MR. TOBIN: Mr. Speaker, I have a petition that I want to

present on behalf of 1,085 people from the Burin Peninsula.

Mr. Speaker, the prayer of the petition is not written as it

should be in order for the House but I have checked with the Government House

Leader and the minister in question. Both of them have agreed that the petition

- they have no difficulty with it.

Basically, what the petitioners are asking is with respect to

a problem they are having with the sand and salt being used by the Department of

Works, Services and Transportation on roads on the Burin Peninsula. The coarse

sand has resulted in many people having their windshields broken or cracked.

Also, this does damage to the paint on vehicles, and the problem should be dealt

with.

I say to the minister, that just a few weeks ago, two people

came to my home with a plastic bag containing rocks that came from the screen.

They were behind the truck when the rocks came from the screen, or salt, or

whatever it is called. These were huge boulders, however they got into the

system.

I have had telephone calls for the past number of weeks from

several people on the Burin peninsula, not only in my own district but in other

districts, regarding damage that has happened to their cars. As a matter of

fact, I can say from my own personal experience, as someone who travels the

Burin Peninsula, it has cost a fair dollar. My insurance company contacted me

because of the windshields that I've lost over the past couple of years and they

have threatened not to give any more insurance for replacement of windshields as

a result of the rocks that are coming from these salt trucks. That is not

happening just to me, Mr. Speaker, it is happening to many other residents of

the Burin Peninsula who have lost windshields so often and have had to have them

replaced, who use that highway fairly often and not so often as a result of

that.

So I say to the Minister of Works, Services and

Transportation that this is a request from people who are very concerned. It is

a very sincere request, I say to the minister, regarding the operations.

It is also my understanding, Mr. Speaker, that this year on

the Burin Peninsula the supply of sand is coming from a different source than it

has in the past. This year they are into another area where there are rocks

involved in it. I believe it is in a place called - it is up past the airport -

in a cowboy road, I think they refer to it. It is beyond Winterland, Mr.

Speaker, in that general area, it is my understanding, that they are getting a

lot of their sand, and that has caused problems.

Mr. Speaker, I don't suggest that there is any individual

responsible for putting rocks in intentionally, or anything else, but somehow

when you are left there, as a resident who uses these roads, as an operator of a

motor vehicle, and you have to go and get your windshield replaced, even though

you have insurance it costs money to go there and pay your portion as well, and

it costs money to have your car painted, which has happened in many cases. Cars

have to be painted as a result of this.

I ask the minister, Mr. Speaker, if he would personally

intervene in this to see what is going on in terms of where they are getting the

sand for the Burin Peninsula area, and if he would put in place some sort of

system whereby inspectors from his department could drop in - not just on the

Burin Peninsula, anywhere, and check to see what is happening.

There is a problem. The problem must be corrected. It is

costing the people of the Burin Peninsula thousands of dollars a year, and it's

time that someone put in place some sort of a check, some sort of an inspection

system, whereby people can get the officials to go out and check periodically,

without anyone knowing they are coming, to go out and check the operations,

where you have the salt and sand stored, and just look at the rocks, because

they are boulders - not sand, not rocks, but boulders, in this case, that have

been mixed in with the sand.

There are others issues as it relates to the Burin Peninsula,

particularly the condition of the roads, particularly the conditions of snow

clearing, that is not appropriate for me to address because it is not in the

prayer of this petition, on which I have already spoken to the minister. The

Burin Peninsula Highway has been closed basically since last Friday. Except for

a few hours each day since last Friday, the Burin Peninsula Highway has been

closed in this Province, and I don't know what can be done, if anything can be

done. Probably, there is a need for more equipment as it relates to that.

I take advantage of this opportunity to mention that publicly

to the minister, but at the same time I plead with the minister to get something

in the system so that users of vehicles on the Burin Peninsula won't have to

spend thousands upon thousands of dollars for paint jobs and windshields for

their vehicles. It is important to them, when you're living on unemployment

insurance that is about to be reduced, when you are depending on the NCARP

package, in many cases, that is about to be reduced. When you have families in

these situations, you don't want to spend additional money -

MR. SPEAKER: Order, please!

MR. TOBIN: - to put windshields in your cars as a result

of the salt and sand system. And no matter how much money you have -

MR. SPEAKER: Order, please!

The hon. the member's time has elapsed.

MR. TOBIN: - you don't want to have to go out and put

windshields in your car, or get your car painted.

Mr. Speaker, I submit the petition.

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

Transportation.

MR. EFFORD: Thank you, Mr. Speaker.

Mr. Speaker, in my short time of experience with the

Department of Works, Services and Transportation, just a few short months, that

is the first time I have heard the complaint of boulders being used on the

highway in place of sand and salt - boulders, as the hon. member just expressed

very clearly. He said, they are not pebbles, they are not stones; they are

boulders.

I can just imagine the sand truck going over the highway in

the morning, spreading salt and boulders over the highway. I think there's a bit

of exaggeration there, but I have no doubt there is a legitimate complaint of

rocks being mixed in with the sand and salt.

One of the things I would say to the hon. member, I drive on

the highway every day, coming from my own district, into St. John's, in the

seasons of the year when the weather is reasonable enough to travel. I must say,

this winter there haven't been too many days I couldn't travel. I don't know

what is so different about the sand out in the area where I live and the sand on

the Burin Peninsula Highway. I don't see that many rocks out there. But the one

experience that I had personally - I had my windshield broken coming in over the

highway one day, but it wasn't a result of the boulders on the road, it was

because I was driving too close to the vehicle ahead of me. So I suggest

probably that could be something -

AN HON. MEMBER: Did you get a ticket?

MR. EFFORD: In fact, I did. So I suggest probably in a

lot of cases where the windshield of a car is broken, that could be because of

rocks, or it could be the studs coming out of a vehicle. It could be driving -

`tailgating' is the word they use. But certainly, the department has inspectors

checking the grade of sand and the percentage of salt used versus sand in

different areas of the Province, naturally on the Trans-Canada there is pretty

well 100 per cent salt used but on the trunk roads, the byroads, there is a

mixture of sand and salt but I will certainly have the officials of the

department check into it if there is a particular problem in your area.

Now as far as the road being closed, I am good but I am not

that good. There is only one man who could stop the storms.

SOME HON. MEMBERS: Oh, oh!

MR. EFFORD: Well possibly two. Nature plays a very

important role in the storm that we experienced on the highway, not only on the

Burin Peninsula but on the Northern Peninsula and many other areas in the

Province last week. We have had extremely high winds this season, but there is

one thing I can assure the hon. member, there is more equipment on the highway

this year than there was in any other past years with the new reorganization of

the department in the last year, and the other thing in addition to that, we

have the front-line workers, the people operating the ploughs and the trucks,

those people make the decisions. More responsibility and accountability are

given to those people in the operation and clearing of the highways and

maintaining them, so we feel pretty satisfied that there is a good job being

done out there.

The other thing I can guarantee and know for sure, according

to the officials of the department, we have had about 50 per cent to 60 per cent

less complaints and calls since the reorganization of the department's winter

maintenance program this year, compared to any other previous year, but in the

one issue about the sand, the grade of sand certainly could be a problem there

and I will have it checked out.

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

MR. W. MATTHEWS: Thank you very much.

Mr. Speaker, I want to speak to the petition presented by my

colleague from Burin - Placentia West and I want to go on record as supporting

the petition.

I want to say to the Minister of Works, Services and

Transportation, that when he pointed upward, we thought that he had thought that

the Premier had left and gone to the eighth floor. He mentioned about breaking

the windshield of his car, I hope it wasn't from driving too close to another

car; I thought it was when he ran into the moose because he - and I want to say

I suppose that he is the man responsible for points and I don't know if he has

any points left the way he drives, Mr. Speaker, because, he is obviously a

hazard on the highway, but I want to say to the minister in talking to the

petition, that I have had a number of complaints myself from constituents along

the same lines as the Member for Burin - Placentia West, that, people are

complaining about the size of the rocks, of the stones that are being put in the

mix.

Now my understanding of it is, that that stuff is supposed to

be screened and there is only supposed to be a certain size stone than can get

through the screen. Obviously, there is something going wrong with the screening

process I say to the minister, but it is a very legitimate concern because I

drive that Burin Peninsula Highway as much as anybody and I mean, I have noticed

on occasion, seriously, that there are large rocks in the mix.

AN HON. MEMBER: (Inaudible).

MR. W. MATTHEWS: No, I don't know what kind of a mesh

they use but maybe we should get some of the fishing nets and screen the sand,

but there is a problem. I have had a number of complaints from constituents, I

have talked to a representative of one insurance company, I say to the minister,

who says this year they have had more claims because of windshield breakage than

any other year on record since their company has been dealing with insurance, so

that tells me that the problem is very serious and I ask the Member for Burin -

Placentia West to call upon the minister, and if he would contact whomever is

responsible in his department to see if there is something out of whack with the

screening because you know, this can be avoided, and the other thing I want to

say to the minister before I conclude, and I realize I only have a minute, is

that, there have been proposals from at least one person on the Burin Peninsula

to supply the sand and a number of years they let that submission into the

department, but for some reason their sand is never analyzed because that

supplier is convinced that if he could supply some of this stuff, it would be I

guess, of better quality and smaller grain than what they are now using, so I

leave that with the minister and support the petition and ask him to look into

the matter to see if at least that can be improved.

Orders of the Day

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

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

On Monday, I introduced a resolution dealing with the

condemnation of the federal government Budget and the implications that it would

have on the people of this Province, and I was appalled today to listen to the

Premier talk about how, in his responsibility, that he could not, and would not,

roll up his shirtsleeves and condemn the actions of the federal government in

this Budget and the unfair implications it would have on this Province and on

the people of the Province.

Now, if we want to talk about pure logic we should talk about

what is exactly in the Budget. Let me be very specific. On the chopping block

this year are defense spending, unemployment insurance, fisheries compensation,

civil service salaries, transfers to the Province, and to all provinces, and the

federal Finance Minister, Mr. Martin, promises tougher deficit reductions

affecting social programs over the next two years.

Now, just let us have a look at the changes to the

Unemployment Insurance Act for a moment and the impact this will have on the

people in Newfoundland and Labrador. The minimum qualifying period and maximum

qualifying period has been changed from a minimum of ten weeks to twelve weeks,

and from a maximum that people can draw UI, from forty-two weeks to thirty-two

weeks, but that has different implications in different parts of the Province.

In the St. John's region, for example, where employment levels are traditionally

somewhat higher, unemployment recipients under this new system will be required

to have fourteen weeks work and on the top end will not be eligible to draw for

thirty-two weeks but in the vicinity of twenty-six to twenty-seven weeks.

The benefit rate, for example, with the exception of extreme

circumstances, is reduced from 57 per cent to 55 per cent of weekly earnings.

The changes will total, in UI payouts, or the reduction in UI payouts across the

nation, as the Finance minister has said, amounts to a reduction of 10 per cent

across the nation, but the effect will not be even in all regions of the

Province. In Atlantic Canada the UI payout reduction will be almost 25 per cent

and the reduction in UI payouts in this Province will be 30 per cent, a

reduction in total personal income of those receiving UI of 30 per cent. When we

talk about what is happening in the Atlantic Provinces the Leader of the

Opposition expressed clearly today what other leaders and other premiers in

Atlantic Canada have expressed in their condemnation of the impact that this

Budget will have on their provinces, but our government has not said one iota,

has endorsed, by its silence, the action of the federal government in their

recent Budget.

Newfoundland and Labrador will be hardest hit. There are all

sorts of numbers on how many dollars will be effected and how many dollars in

loss of income. Our own research indicates that Newfoundland and Labrador will

have a loss of almost $200 million in personal income, $200 million less that

will be coming into this Province as a result of this change alone.

Now, let us look at the cut to the Fisheries Compensation

Package. There is no question, Mr. Speaker, that there will be less compensation

for fishermen and fisherwomen in Newfoundland and Labrador as announced in the

Fisheries Compensation Package in this Budget. Over the last two years there has

been close to $1 billion, if not more, spent in fisheries compensation in actual

payouts and training dollars provided for other courses for people to take

advantage of. There was $1.7 billion allocated for the new five year fisheries

adjustment program for Atlantic Coast fishermen and plant workers. An additional

$200 million was held over to fund current compensation programs until they

expire in May. The money allocated averages out to about half the annual amount

spent on the fisheries compensation program over the last two years, about half

of the amount. Pure logic would say that since 75 per cent of people eligible

for compensation live in this Province, in Newfoundland and Labrador, we will

bear the brunt of spending reductions over the next five years. No matter how

cuts are applied under the new program the average annual loss to this Province

in personal and business income will be in the order of $100 to $150 million and

yet not one word of condemnation, not one word from the Premier or his

government in speaking out on behalf of the people which they supposedly

represent, not one word.

Another implication of this Budget deals with the freeze on

federal transfers and cost-shared programs. The finance minister, Mr. Martin,

has imposed a long-term freeze on transfers to the provinces for social

programs, including Canada assistance, health and post secondary education.

Social programs will be the subject of major reforms to be undertaken in next

years budget but total expenditures over the next five years will not be allowed

to exceed current levels. Now what does that mean? It is as obvious as the nose

on your face, I say to the Member for Eagle River, that if transfers and

increases in social programs will not be allowed to increase - have to stay

where they are over the next five years - then I ask the Member for Eagle River

and all other hon. members to stand up and fight for their constituents, condemn

this Budget, talk to your cousins in Ottawa and say: this is not what you

promised during the federal election. This is not what you promised and what you

promised is not what you delivered. I implore all members to talk to their

constituents in this regard.

If the freeze is sustained as intended federal contributions

to social programs will not keep pace with normal growth and costs. The effect

will be most severe in Newfoundland and Labrador again, which has the least

capacity to make up shortages and funding but risks higher costs, especially for

welfare, because of federal cuts in UI and fisheries compensation.

Now what is implicit in all of this, in terms of increase in

UI, decrease in transfer payments? By maintaining transfer payment levels on the

one hand and not keeping pace with rising costs of social programs on the other

hand, it amounts to a net effect of a decrease. It begs a larger question, Mr.

Speaker, a larger question that this government proposed in its Income

Supplementation Program.

What will be the net effect of such a program? Are there

parts of that program that are reflected in the federal Budget, I ask you? I say

there is. I say what we have seen here is but the first step of the federal

government moving twelve weeks, thirteen weeks, fourteen weeks and I believe

that there is a plan to bring up the amount of qualifying weeks required for UI

in this Province to twenty weeks, as this government has intended, as this

government proposed, as this government brought to Ottawa without consultation

of the people of the Province, that this government behind closed doors

developed a program by an unaccountable, unelected body called the Economic

Recovery Commission. A body that is really, if the truth be told, and if some of

Cabinet would stand up and show some spine, that if the truth be told, are the

real developers of social and economic policy in this Province, that this is

where we are headed.

When the Premier said that in five years from now the people

of the Province will stand up and congratulate, he said, his government for

having the foresight to propose such a plan. I'll say they will congratulate him

alright because in five years they'll have starved the people to the point where

they'll have to have it. That's what's happening and that's where we are heading

in this federal Budget. The images and the direction that this federal Budget is

taking is demonstrating that to me, Mr. Speaker.

Cuts in defence spending; another problem area. While

Canadian Forces bases in Newfoundland will not close, personnel spending will be

reduced in Gander and Goose Bay as part of an overall $9 billion cut in defence

spending. There are limited details on the scale and timing of the reductions at

these locations but it seems at least that one air squadron will be relocated

from Gander to Ottawa. Canadian Forces at Goose Bay will be cut by some 25 to 30

per cent.

Apart from the effect of reduced spending in the Province,

the defence rollback will limit career opportunities for Newfoundland and

Labrador youth. A group in our society who are under attack and who have been

under attack for the last five years by this provincial Administration, because

of the limited employment opportunities at home the defence cutbacks will effect

many Newfoundlanders and Labradorians serving in the military and remove the

option of many who intend to pursue or proceed with military careers.

What are some of the other goodies that this federal Budget

has brought down? We've seen a freeze on payroll costs, a freeze on federal

civil service salaries, including suspension of pay increments within job

classification, will be extended for another two years. I wonder if the federal

government is taking a lead from the provincial government strategy on dealing

with civil servants. It will be interesting to note in next year's budget.

What about revenue measures? The federal Minister of Finance

has proposed no new taxes, or increase in tax rates, but will raise more than a

billion dollars in new revenues by eliminating or reducing tax breaks that are

perceived - and I must stress - that are perceived as being inequitable. Cuts in

regional investment tax credits, special investment tax credits designed to

encourage business investment in Atlantic provinces, have been reduced or

eliminated. The 30 per cent tax credit for investment in certain types of

structures, machinery and equipment on designated areas, has been or is

eliminated. The Atlantic investment tax credit is reduced from 15 per cent to 10

per cent. The investment tax credit for scientific research and experimental

development expenditures in Atlantic Canada is reduced from 30 per cent to 20

per cent.

If this is the way that a federal government which has all of

its members for the most part, with the exception of one, I believe, who are

Liberal, who have been elected by the people in Atlantic Canada, if this is the

way that they intend to deal with the people in Atlantic Canada, and

specifically with the people of Newfoundland and Labrador, then I ask the House

and all hon. members in the House today to stand with me to say: Please, condemn

the federal Budget. Ask them to review it. Do whatever is necessary to convince

their federal counterparts, their federal cousins, to roll back and take a

second look at what they've done to this Province.

Cuts in the age tax credit. Currently persons age sixty-five

and over are eligible for age tax credit equal to 17 per cent of the age amount,

an average or currently of $3,482. In future the credit will be reduced based on

an income formula for all seniors with a net income in excess of $25,000.

Seniors with a net income over $49,000 will no longer receive any age credit.

This will increase taxes at the top end by about $1,000 a year.

Let's talk about the elimination of capital gains tax credit

and how that will affect us here. The $100,000 lifetime capital gains tax

exemption as members know has been eliminated. The elimination of this tax will

make it difficult to reduce the number of people in the fishing industry by

buying out fishing licences and enterprises. Fishermen who participated in the

buy out program under NCARP were eligible for the capital gains deduction. It

may also affect the sale of Hydro shares if the government - and when the

government, I should say, not if the government but when the government proceeds

with its privatization initiative.

What about the tax on group life insurance? Premiums on the

first $25,000 of life insurance provided by employers will no longer be exempt

from tax. The UI rate. Reduction in UI premiums. The UI premium rate for

employees will be reduced from $3.07 to $3.00. For every $1 of insurable

earnings the employer contribution rate remains at $1.04.

I haven't outlined or gone into great detail of what is

contained in the federal Budget. What I've attempted to do here today is to

provide a highlight of those initiatives announced in the federal Budget, and

how those initiatives will affect the people of this Province, and the people of

my district, the district of Kilbride. The federal Budget will have a major

negative impact on personal and provincial incomes and provincial revenues. The

effect this year will be moderated somewhat, but only somewhat, because people

now on UI, people who are now currently on the system, will be paid under the

old plan, and the current fisheries compensation package will last until May 15.

At the end of the transition, though, is where we get the

biggest boot in the backside - that's what the Federal Government and their

Budget has done. It is at the end of this transition period that annual losses

in personal income will exceed $300 million in this Province, which is more than

double the value of all wages earned at the Hibernia site during its peak time.

The loss of disposable income will affect business activity

and employment everywhere in the Province, but as always, always, the problems

and the result and the impact of this federal Budget will be felt most severely

in rural Newfoundland, and those who live in rural Newfoundland will be the

biggest losers.

Now, the Finance Minister of the Province, Winston Baker,

estimates the Province could lose some $20 million in revenue in 1994 as a

result of the UI changes alone. The real figure may be closer to $30 million,

not $20 million.

In subsequent years, the losses in personal income will cost

the Province at least $60 million in revenues. In addition, the government

cannot count on any increase whatsoever in federal contributions to the cost of

social programs. The Federal Government's warning that it intends to be tougher

on social programs in future budgets,means that the impact on this Province will

be long-term and severe, Mr. Speaker, that it is not going to end next year or

the year after, or the year after that. What we, as a people and as a Province,

will be witnessing is a continued and sustained attack on this Province and the

people who inhabit this great Island.

Newfoundlanders have good reason to feel aggrieved by this

federal Budget. The 30 per cent cut in UI payments in this Province is more than

three times the cut in the national average. When the cut in funding for

fisheries compensation is factored in, the impact of the federal Budget here is

at least five times as severe as it will be on the nation as a whole.

No Federal Government - and I want to emphasize this - no

Federal Government, since Confederation, has wreaked such havoc on the economy

of this Province, or unfairly singled out this Province to bear such a lopsided

share of federal spending cuts, and I ask the Members of the House of Assembly

to stand with me again in condemnation of this federal Budget, and to stand up

for the constituents in their districts, and to do what you were elected to do,

to fight on their behalf.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

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

Labour Relations.

MR. GRIMES: Thank you, Mr. Speaker.

It is certainly a pleasure and an opportunity to speak in

this debate this afternoon. I would like, I think, to make the case quite clear

at the very beginning that while we certainly share some of the sentiments

expressed by the hon. the Member for Kilbride - none of us here would wish that

these kinds of decisions had to be made anywhere in the country, and that they

wouldn't have the kinds of impacts of which I will try to spell out the case in

the time allotted to me as to why we can't necessarily applaud any action by

anybody, even when we make decisions ourselves, that cause differences in

programs that people have come to rely on. In fact, the premise on which this

particular resolution is put forward is not correct, and while it is something

we would rather not happen, the reality is, we have recognized that the Federal

Government, in this instance, is much like this government has been in the last

three or four years or so - and may very well be again in the next year or so -

faced with very touch decisions that have to be made. And what we will do is

spend all our effort making sure that we try to recognize exactly what the

impact and outcome is, because I will try to point out that, I believe, some of

the premise put forward by the hon. member is not exactly accurate and is in

some error, and therefore, at the end of the day, I will be suggesting that

members on this side of the House not support this particular motion and

resolution.

The hon. member, in introducing his private member's motion,

Mr. Speaker, referenced two areas in particular. He touched on a number of

others, but because the written motion actually deals with the changes to the

unemployment insurance system and to the fisheries compensation, I will spend

some time, if I may, dealing with those two issues in particular.

With the UI changes, everybody recognizes that they will be

significant in this Province, there is no question of that. The numbers at this

point in time are still in somewhat of a state of flux. There are different

estimates that are being used by some federal officials, and because this is a

federally-funded and federally-administered program, funded, I guess, by the

employers- employees, and with some money lent into it and then borrowed back

from the Federal Government, we have to rely largely on them for their

assessment of the impacts.

There is no doubt with a higher qualifying period and a

shorter benefit period, and in many instances,a lower rate of benefit, that

there will be significant individual impacts. The best numbers that we have at

this point in time suggest that 30 per cent of the claimants in Newfoundland and

Labrador in the last couple of years have been people who have qualified with

ten or eleven weeks, 30 per cent of the total claim base. They are into the

different numbers of thousands depending on the season and the months. All

members, I think, are familiar with that kind of information.

The very best estimates that they can make at this point in

time is that it may be reasonable from their projections - and like I say, it is

not for me to defend those federal types, I just give you the information they

passed on to us for our consideration. It might be reasonable, from their best

projections, to assume that half of those people could quite conceivably pick up

the extra one or two weeks of work even in this environment, and they have a

precedent on which they base that. Because there was a period of time a few

years back when right across the country, for a nine-month period, there was a

fourteen-week qualifying period.

AN HON. MEMBER: (Inaudible) don't believe that.

MR. GRIMES: I'm passing along the information that is the

best information available to us as the government, and it is the same

information available to yourself from the HRD offices here in St. John's.

Their best estimates are that half of the people, based on

past experience, in all likelihood would have a good chance of picking up the

extra week or two and still qualifying for UI. However, that doesn't deny the

fact that all of those people, even if they qualify, will still end up with a

shorter benefit period, and in most cases, unless they are very low earners, a

lower rate of return. We are not trying to suggest any of those things are

incorrect or false.

So they are saying: We acknowledge and recognize that the

changes create two problems that we are now spending all of our energies trying

to find new solutions for. Because there are choices. I relate to the tone and

tenor of the questions in question period today where the Leader of the

Opposition - I think the premise was that the Premier and the government were

not complaining enough. Well, you have a choice. You can complain and you can

`whimper' - I think, the phrase that the Leader of the Opposition used was `not

a whimper' - or you can recognize that the Federal Government with

responsibility here has made certain decisions which have very identifiable

impacts that we are now studying in some detail. And now, the question is: What

do we do?

We can whimper all we like, if that is the choice, but the

reality is: What will we do? Clearly, we have decided to spend our energy and

efforts in terms of looking at, recognizing, two things: that we have, by the

best estimates of the federal officials, who have years of experience

administering this system, maybe a pool of 15 per cent of the people who will

not qualify, who previously could access unemployment insurance for their income

security for the rest of the year, but now might be in grave danger of not

qualifying, so they will have an income need for most of the year. We have

recognized that. These are 15 per cent of the people.

The other best estimates, by the way, from - and this is one

that I would make sure every member of the House would know - sometimes there is

an assumption, people make an assumption, that if you exhaust your UI claim, if

you are one of these people who, out of work, uses UI because you have managed

to qualify in the first place and then you have run out of UI before you manage

to get another job, that you automatically go to social assistance. That is not

the case. The startling fact and the reality so far is that less than 10 per

cent of UI exhaustees qualify for social assistance. Because, remember the

distinction. Unemployment insurance is a personal entitlement, regardless of

family income and other income. Social assistance is a family income entitlement

system. And many of these individuals, while they may exhaust their UI or may

not qualify, family income through other members is such that the real number -

and this startled me the first time I heard it - is that less than 10 per cent

of those people will qualify for social assistance because there is other income

in the family that keeps them above the minimum levels that allow anybody to

qualify for social assistance.

So it shouldn't be put in the context that we are going to

leave a whole group of people totally destitute. They are not even going to be

so bad off that they will qualify for social assistance, but that doesn't deny

the fact that they will suffer a substantial and significant change in the

personal and family income levels that they have become accustomed to.

So our whole issue is that - what we want to do is to deal

with the Federal Government now in recognition - and they recognized it. We were

at a meeting yesterday of federal/provincial labour market ministers from across

the country, with Mr. Axworthy. And the point was made abundantly clear by

ourselves and also by the representatives from Prince Edward Island, that here

we have one-half of the agenda. Everybody, by the way, was fully expecting -

and, as the Premier pointed out, this is what we said to the public in

Newfoundland and Labrador when we publicly put out for public discussion the

income supplementation proposal, that everything that every official and

politician representing the Province of Newfoundland and Labrador in the last

couple of years - long before the government changed - everything that everybody

had gleaned was that the federal Unemployment Insurance, the national program,

was in difficulty and that there were going to be significant changes.

In fact, part of the proposal with the income supplementation

was to say, recognizing that that's coming, let's make sure that we show the

Federal Government a way that they can re-profile some money so that people can

access other means of supplementing their income because the message was quite

clear for some time. It wasn't going to come from unemployment insurance

anywhere close to the numbers that it was before.

So this year - and I think the Premier has indicated as well

- our guess if we were guessing, this year the move from ten weeks to twelve,

from forty-two weeks to thirty-two and the sliding scales that are in there,

that is probably only the first of several changes. We agree fully with the

assessment of it as put forward by the hon. the Member for Kilbride in

presenting the resolution, this is likely the beginning. So all that will

happen, in our estimation, is that there will be an increasing need for us to

find new and better ways to meet the income support needs of these people who

have been dependent upon unemployment insurance and won't be able to access the

system at all, which we estimate from the federal numbers to be 15 per cent, or

will access the system for a shorter period of time and end up - nobody is

trying to hide from the fact - and end up recognizing that people who could get

a full years income before will be left eight weeks short, even if they qualify

at the minimum levels.

So we have two new problems - a new pool of people who won't

qualify at all, and the qualifiers, a large number of them, who will end up in a

year, on a fifty-two week basis, with eight weeks of no income. Now, the real

task for us is to find out, in that federal system again, how are we going to

try to find meaningful new creative ways to meet that new income need? In our

discussions yesterday it was made quite clear that the federal minister and the

Federal Government expect the provinces to come forward with proposals that can

be done on a pilot basis. They have an $800 million fund over the next two years

to do pilot projects on the whole basis leading to the national agenda for

social security reform. That is one of the proposals that we are hoping they

will continue to consider.

In any event, the message was left loud and clear at

yesterday's federal/provincial meeting that within the next month, the Federal

Government fully expects to see proposals coming from all regions of the

country, but they also fully expect that because Atlantic Canadians have been

the greatest users and the greatest beneficiaries of the system, we will also

likely be the greatest people in terms of disproportionate pay and receiving,

the numbers as I understand it. They fully expect that because of our

experiences with the programs and the dependency here on it for a year-round

income supplement, that we probably moreso than anybody else in the country, are

likely to come forward with innovative, creative, new directional meaningful

programs that will find a way to target the group of people because there is one

other reality in all of this, and then I will try to spend a little time making

a few comments about the fisheries compensation.

There is one other reality about the group of people who will

be impacted with the unemployment insurance changes. We are talking about

regular, repeat users of unemployment insurance, we are not talking about people

who use it once in their lives; this is the group of people here who will be

largely impacted by these changes. People who are in full-time positions and so

on, anyone who has worked a full year and loses a job, they still qualify for

fifty weeks of unemployment insurance, the first time around. The longer you

work the longer you qualify.

We are talking about the people who, through no fault of

their own, because that is all the work they can get, have normally gotten

themselves ten weeks of work, eleven weeks of work, twelve weeks of work,

whatever is available, and have managed to qualify for unemployment insurance as

their income base for the rest of the year, that is the group of people we are

dealing with. So we are suggesting a number of these repeat users - the system

that the federal government through the HRD offices now, and the UI offices,

they can almost identify these people by number and name today, as to who the

people are who are going to be eight weeks short and when to expect their claim

to reopen for next year and which ones may or may not be able to get the twelve

weeks instead of the ten, so it is not a difficult problem of identification of

who the group is.

Many of them can be done by name today, through the systems

that are there, so we are not going to have a great difficulty in terms of

identifying the group for whom we have created a new problem, easily

identifiable and then the real job for us is to find a way to access, in ways

that would probably again have application generally across the country but will

be primarily beneficial to the people here, some portion of that $800 million

pilot project fund over the next two years targetted at this group of people who

now have a new income support need and, Mr. Speaker, in finishing on those UI

changes, that is the direction that we decided to take from the very beginning

as soon as it happened rather than whimper or complain or squawk or whatever for

whatever good that does.

We told people quite clearly, we would rather not have to do

this, but one of the other realities, and this is probably one of the few

political statements that I will make in these few minutes, one of the realities

- and this is a personal political opinion - as to why there are two federal

conservative members in Ottawa today instead of almost 200 before, is because

the federal conservative government was elected twice under Mr. Mulroney, with a

mandate to take charge of these kinds of programs and be fiscally responsible

with them. Because they did not seize the mandate that they were given, the

people threw them out in big numbers, that is one of the reasons in my opinion

and I state that clearly as a personal opinion. And in this Province, this

government has been given a second mandate again, one part of which is to be

fiscally responsible and to make sure that programs like this are maintained on

a basis that can be sustained into the future and meet some real needs and not

to be spread so thinly trying to meet all the needs that you jeopardize the

whole program.

We faced, Mr. Speaker, the same thing in this Province with

respect to provincial pension plans, where it was clear that major changes had

to be made because all we were doing was deferring things into the future with

the real potential for collapse. This government in five years has said that is

not good enough, you have to make the decisions to make sure that people who

paid into a pension are going to get a pension. We took the same approach, Mr.

Speaker, with respect to workers' compensation, continually increasing unfunded

liability positions not addressed by the previous administration and everybody

pointing out that the system was in danger of collapse. The federal government

previously was given a mandate to do these kinds of things with UI, didn't do it

and they now have two members, so I suggest to the members opposite, there is a

lesson in that.

In the few minutes that I have remaining, Mr. Speaker, I

would like to address fisheries compensation just so that I can put some numbers

on the table because there are some wildly different numbers being bandied

about. The most recent numbers that we have are these:

In 1993-94, the current fiscal year which is about to end,

because there was a part of the year before in compensation, the total amount

spent on NCARP as it is well-known, excluding training by DFO is, $320 million.

AN HON. MEMBER: (Inaudible).

MR. GRIMES: I will get to that, I will talk to the

training number, but let me give you this breakdown, Mr. Speaker, and I am sure

that the Opposition members and everybody else can have these same numbers made

available to them.

On income support, and here is the concern individually for

the people in the fishery who need the compensation and depend on the money

coming in envelopes to their House every second week. In income support, the two

week cheques in the fiscal year 1993-94, that only consumed $260 million, so the

cheques that people actually got that they could fund their household needs on

and keep themselves going as individuals, that was $260 million, not $1 billion,

none of those kind of numbers. But if we were in the same situation of waiting

to get our paycheque or envelope every two weeks, and these people are

unfortunately in the position, the total amount paid was $260 million in this

last fiscal year.

There was $40 million spent for license retirement and the

full expectation that there might be more of that, and so on, that goes on.

There was $4 million spent for vessel support, and I am only talking 1993-94,

not the total life of the program back to the beginning of August, 1992. There

was just slightly less than $16 million spent on the early retirement option, to

retire people in the fishery fifty-five years of age and over.

The training budget relating to ENCARP in 1993-94 was another

$93 million, so we have $320 million spent in the various ways of income

support, licence retirement, vessel support, early retirement, and another $93

million spent on training, so if you add it all up, in that fiscal year with

everything that was done in 1993-1994, over the full year, it came up to less

than $420 million, including the training.

But when you talk about the primary concern of the

individuals, the primary concern of the individuals is and always has been

income maintenance: I need some money for me and my family to live on every two

weeks. That amount in the last fiscal year was $260 million, so I point that out

and hope that members opposite and all members when they are addressing this

issue would either take the time to check with the same officials who are

running this program to see that these are the right numbers because I do not

think it does anybody in the Province any good at all to be saying we had $1

billion this year and we are only going to get $1.9 billion for the next five

years because that is not the truth. Counting training there was less than $420

million in the fiscal year, in one year.

AN HON. MEMBER: (Inaudible)

MR. GRIMES: I do not have the numbers for the other half,

but if you take a one year total and multiply it by five you get $2 billion.

Again it is not for me to defend that. We are entering into discussions even

now. The officials are meeting this week. The ministers, as the Premier said,

the group that the Premier is leading is expected to meet next week and we will

look at that component, the continuation of compensation for people affected by

the moratorium. That will be looked at in great detail in the next few days. The

federal government will lay the numbers out before us. The federal ministers,

both Mr. Axworthy and Mr. Tobin, have been saying they are convinced that they

have enough money here so that there will be very marginal reductions in the

amount of money the individual actually takes home on a two week basis. There

might be some very marginal reductions, but we do not know that because we have

not had the discussions yet.

That is their version of it and they are suggesting that $1.9

billion, almost $2 billion over five years, is very close to the just in excess

of over $400 million spent in one year, because $400 million multiplied by $5 is

$2 billion, and if they are at $2 billion and this was running at $400 million a

year they will argue that they have the same money. Now, we will be involved in

that discussion, representatives of the fisheries union will be involved in that

discussion, representatives of the industry will be involved in that discussion,

and we are hoping that in a very short time frame that one part of the

three-pronged approach, the fishing industry renewal and the larger economic

renewal for the Province will take a little longer, but because we have a

deadline of May 15, Mr. Speaker, we fully expect that we will be able to come to

grips with this issue, the components of continuing compensation, the levels,

and that we might all be able to agree at the end of the day that nobody

short-changed the people who would rather be fishing and rather be working

except for the mistakes made by the federal government that they must and have

taken full responsibility for.

At this point in time the only component of this program, Mr.

Speaker, that the provincial government has had any financial involvement in has

been the retirement package, because retirement is available for workers in all

sectors, under the program for older worker adjustments. It has been applied to

miners, loggers, people who lost their jobs at M.A. Powell and so on. Those are

the kinds of things -

MR. SPEAKER: Order, please!

The hon. minister's time has elapsed.

MR. GRIMES: So I would just like to put those numbers on

the record as part of this debate, and conclude, if I could, in thirty seconds,

by saying we don't disagree with some of the premises to individual impacts

here, but the whole resolution today by the Private Member's Resolution from the

hon. member hinges on the fact that he thinks there has been an unfair treatment

for Newfoundland and therefore we should condemn the government. In our view,

there has been no unfair treatment. There have been tough decisions made that we

are going to try to work with to minimize the negative impacts on individuals

who are very much concerned about it.

Thank you, Mr. Speaker.

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

MR. SULLIVAN: Thank you, Mr. Speaker.

I rise to support my colleague's resolution to condemn the

federal government, and that is exactly what we should do - condemn the federal

government - because they have inflicted tremendous hardships upon this

Province, and it's time that this government woke up and did an assessment of

the impact it's going to have on money coming into this economy.

Other provinces in Atlantic Canada have done it, and across

this country, and after the federal Budget we still have not done any assessment

or impact it's going to have, and they haven't been able - the Finance Minister

today - to lay on the Table the effect it's going to have on this economy and

this Province, because it's going to impact on numerous areas, on income tax

levels, on spending, on retail sales tax, and every other single tax that is

available in this Province, because it's going to reflect on the disposable

income here in the Province.

Now one mayor in Nova Scotia said that Mr. Chrtien thinks

there is no Canada east of Quebec, and that is based on this assessment of the

federal Budget that has inflicted the serious degree of pain upon the economy of

this Province, and our Province sits back and takes it in stride. Well, I would

like to look a little more in depth at some of the things that are happening in

this Province, and how the UI is going to impact upon members in every, single

district of this Province - out in Port au Port, Harbour Main, and the City of

St. John's - and I will refute the figures that the Minister of Employment and

Labour Relations used to say people would only be out of work for eight weeks of

the year. We will show how it will be higher.

Now, it is unfortunate when we sit idly by and let the

federal government deliver a Budget that has such a devastating impact on this

Province. My colleague said: Never has a government, since Confederation, a

federal government, inflicted so much pain on this Province - and we are not

really, fully conscious about it, and those that are conscious about it on the

government side are keeping to themselves and saying nothing; they are accepting

it.

Now I would like to take a little, close look at the general,

first of all, philosophies and direction that this government has taken in that

Budget. They have looked upon their source of revenues that are available to

them that they can collect in taxes, and they have made a decision to inflict it

and take an unfair amount of income out of the pockets of individuals, and shun

in their duties of addressing the system as it should. I will refer to an

article that said: They preached the philosophy that there are loopholes out

there and we are going to collect massive amounts of money, so they could con

the people into believing that, so that when the middleman gets hit in this

Budget it won't seem so painful; at least we closed a few loopholes that people

had the perception there are big dollars involved.

In fact, an economist with Price, Waterhouse stated that we

would have to hike taxes 25-33 per cent if the government is going to achieve

their 3 per cent of their gross national product. That would result in - just to

give you an indication on what they've done - increasing the three levels of

income tax from 27 per cent up to 34 per cent, the 42 per cent bracket up to 52

per cent, and the 50 per cent bracket up to 64 per cent. They would have had to

increase corporate tax to 55 when other countries around the world are only

charging 30-44 per cent, so they came back on the most disadvantaged region of

this country and asked us to bear an inordinate amount of the blame and

responsibility for what's happening in this country.

I will just point out to the Minister of Employment and

Labour Relations - I will use an example - here in the City of St. John's, which

now has an unemployment rate of 13 per cent, under the new provisions of these

UI changes, there are two components, one is the work component and one of

course is the regional unemployment component. A person in the City of St.

John's in 13 per cent unemployment would need to work for thirteen weeks, of

which they would receive six weeks UI on the work component, and because they

are 9 per cent above the 4 per cent base that is taken they will get another

eighteen weeks. So, Mr. Minister, in the City of St. John's with thirteen weeks'

work a worker would draw UI for twenty-four weeks, for a total of thirty-seven

weeks, and we are fifteen weeks short without income for the rest of the year.

That is the sad picture.

I will take an example in Port au Port. A person in Port au

Port who went to work tomorrow and got twelve weeks work in Port au Port would

get six weeks work for the twelve weeks, six weeks UI. For every two weeks of

work you will get one week UI under this new proposal. If you work six weeks out

in Port au Port you will get a work component of six weeks UI. Because it is

above the minimum level set at 16 per cent, once you are above 16 per cent you

can draw UI for up to a maximum of twenty-six weeks. So a person who gets twelve

weeks work in Port au Port will draw for thirty-two weeks, and that is it.

Thirty-two and twelve is forty-four. There is a difference of eight. That same

person if he worked in the City of St. John's for the same length of time would

only draw for twenty-four weeks. That is fifteen weeks short in the St. John's

region. I think that takes in Harbour Main, a good portion of the Member for

Harbour Main's district.

That is fifteen weeks. Some of these people will not qualify

to go on social assistance for the fifteen weeks that they have no income,

because family incomes might bring them up above the level that they would need

support. I also refute the minister's statement that only 10 per cent of these

now will fall into the social assistance role. In fact, more of these will fall

into the social assistance role now because the level of income and the period

that they will draw will now reduce the total family yearly income to a level

that more would fall into that system than would under the current level that is

currently proposed.

AN HON. MEMBER: Ten per cent more, yes.

MR. SULLIVAN: I think 10 per cent is significant. In

fact, I think it is going to be more than 10 per cent. I think they are

miscalculating the impact and they are assuming that eight weeks will be the

period in which people will not have income. That is wrong. The City of St.

John's region and the figures here show that they have now I think a 13 per cent

UI rate. They will be fifteen weeks short on a minimum work requirement.

In Newfoundland, the Northeastern Labrador region, that has a

UI rate of 23.4 per cent now, those people in that area will draw for thirty-two

and they will be eight weeks without any income whatsoever. The other region of

the Province - Corner Brook, Gander, and that general region of the Province -

will also be in exactly the same category. They will have eight weeks where they

will be lacking income.

Overall -

MR. GRIMES: That is not true.

MR. SULLIVAN: It is true. I will sit down and let you

correct me if you can do it.

SOME HON. MEMBERS: Oh, oh!

MR. SULLIVAN: Because you can't, because it is there.

Here is what the minister said - and that is exactly the gospel truth - and the

Human Resources Department said: This social security reform and these UI

changes now will be a forum for wide-sweeping changes to modernize Canada's

social safety net. A dialogue with Canadians and the full participation of

provincial governments will be an important part of that process - yes, the

proposed changes to UI. Some consultation with the people of Canada. That is a

mockery and it is an insult to the people here in this Province.

We should be concerned about the loss of revenue that is

coming into the economy of this Province. The minister could not produce today -

in Prince Edward Island he could produce an impact of $50 million. If you

multiplied our Province by five times the population it would be $250 million,

and our unemployment rate is even higher. In New Brunswick, a much lower rate,

the impact is $400 million. These figures, when they are released, on a full

fiscal year, you will find within this Province there will be $350 million loss

of revenue from the economy of this Province, and along with fishery

compensation will be equivalent to 30 per cent of what this Province raises in

all sources of revenue in any fiscal year. That is $1.7 billion approximately.

We are going -lose about $500 million in a full twelve-month

fiscal period because of impacts here. If you can produce the figures and

analysis to show that to me, I will accept it. You haven't been able to do it;

other provinces have done it and this Province hasn't even done an analysis.

They don't know today the impact the federal Budget is going to have. I think it

is about time they took some responsibility and decided to do it. Now, there is

a $6 billion federal deficit on UI, and granted, this Province is most dependent

upon UI. The Minister of Employment and Labour Relations stated today, and it is

implied in the Income Supplementation Program and I took a note of what he said

- that people who had ten weeks will now have to get twelve weeks. What he is

saying is what was said in this report, that the people in this Province are

lazy.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: That's right, he said today, and this

report implies that those people who are on the system now getting ten weeks and

qualifying, many of them will get twelve weeks work now. That is implying that

people are refusing to work. If people refused to work there are provisions in

the system to deal with these people under the `voluntary quits' provisions.

There are some positive changes by the way, a few positive things proposed under

the `voluntary quits' aspect of this new UI proposal. A few little positive

things are tucked away there - it only affects a few people, but still I support

that aspect of change because it is so important to protect the workers rights

to be able to leave employment under certain conditions. That has been clarified

a little bit, but the damage on this Province is irreparable. What we have

seeing happening here is a phasing in, step one, of our Income Supplementation

Program. Now, when the Premier -

MR. TULK: The Tories caused this problem.

MR. SULLIVAN: Actually, to be honest with you, I don't

care who caused the problem. What I am concerned about is what we do about the

problem, not who caused it. I am very concerned about it and I don't think we

should take it out on the backs of the people. The people in Fogo now who work

twelve weeks will have to (inaudible).

MR. SPEAKER: Order, please!

MR. SULLIVAN: - and the people in the district of

Ferryland also when I fight for them. The people in Ferryland right now, in part

of my district, if they work for twelve weeks -

MR. TULK: (Inaudible).

MR. SPEAKER: Order, please!

MR. SULLIVAN: Whenever anything was done I complained

about it. If you were around you would have known. You weren't around the last

four years to find out. Now, overall, the impacts that have been put on rural

areas - the city of St. John's, even will be impacted significantly. The person

in St. John's today - and I think that's very significant - a person in the St.

John's region today who just qualified with the minimum amount, will now be

unemployed with no work income and no unemployment revenue for up to fifteen

weeks of that year, under this proposal. Before, they would be able to qualify

for up to thirty-five weeks.

AN HON. MEMBER: That is why we need the ISP, to fill the

gap.

MR. SULLIVAN: Yes, that's why we need the ISP. We

certainly do. The Premier and the Minister of Employment and Labour Relations

have been successful in selling to the Federal Government that the

twenty-and-twenty concept, that they have bought the first phase which is twelve

weeks, and you mark it down, next year they will buy the next step, the fourteen

and the sixteen. I have said it before - I am not sure if the minister over

there has said it, the Minister of Education - that we will have our lifeline so

severed that we will be reaching out our hands begging, it will be a form of

social assistance, that's what this program is going to be, that's what is going

to happen.

Now, overall, in addition to the problems - and I think each

member here has a responsibility to demand of the government to lay on the table

the impact of these figures on this economy. It would be irresponsible not to do

it. When you pull a few hundred million dollars out of this economy, it hurts,

and you haven't indicated otherwise. If you can produce it and show the figures

to substantiate the numbers, I will then accept it, but until that happens, I

will go by the figures I have and use my judgement. I challenge you to produce

figures that say different, you haven't been able to do it. P.E.I. has been able

to do it, New Brunswick has and we are not competent enough in this Province to

be able to do it. That's because we don't want the people in this Province to

know the real damage that is being done by this federal Budget. We don't want

our cousins in Ottawa to be upset. More importantly, we don't want the people of

this Province to know what damage has been done. If it was something that was

impacting in some other way upon this Province - you weren't long jumping up on

the tobacco tax and saying here is what it cost. The federal Budget - nobody ran

around, got a committee and analyzed the impact there. It is completely

irresponsible and something has to be done.

I would like to just briefly touch on a few other areas. The

Minister of Employment and Labour Relations threw out some figures on what has

come into this Province under the fishery compensation package. Now, his very

department, and the Premier, in his research, have indicated, on page 49 of this

report, that NCARP has brought into this Province, in 1993, $587.5 million.

That's the research by the Economic Recovery Commission, secretly taken to

Ottawa by the Premier, and given to the Federal Government, and the minister

stands here today and says it is less than $400 million. Now, what figures are

right? Is the Economic Recovery Commission wrong in its proposal, or is the

minister wrong? Somebody is wrong.

I would also like to elaborate on what is happening with the

fishery compensation package in this Province. The Premier and the minister have

proposed -

AN HON. MEMBER: They're both wrong.

MR. SULLIVAN: That's quite possible. It is quite possible

they are both wrong. In fact, maybe you are all wrong, and that is quite

possible, but overall - I am not proposing that both of them are wrong. In fact,

we have a figure that is given and tabled here, and I will go by the latest,

recent figure that this government can produce on what has come into this

Province, and that is the figure that was assessed and done in 1993.

They are proposing, under fishery compensation - an industry

that was devastated in this Province - the Premier has proposed, in this report,

that NCARP benefits come under the heading of fishery transition payments, and

there be a phase-out over the next five years; after 1988 there would be a

complete phasing out of these benefits. He has proposed that 61 per cent of what

came into this Province in 1993 should come into this Province in 1994; and he

has proposed that 49 per cent should come into this Province in 1995 -

MR. GRIMES: That's not true.

MR. SULLIVAN: - and 37 per cent - I am reading under

Fishery Payments.

MR. GRIMES: That's not true. Look at the total amount.

MR. SULLIVAN: I am looking at your figures.

MR. GRIMES: Total amounts.

MR. SULLIVAN: Once again, I am reading from your figures.

I understand the total amount, quite clearly. In fact, what is probably going to

happen in this Province, and what is happening through the human resources

department, is exactly what the Premier said here in this Province, that people

who have been crippled by this industry should be treated no differently. They

shouldn't be allowed -

AN HON. MEMBER: (Inaudible) supported Kim Campbell.

MR. SULLIVAN: Yes, that's one mistake. I'm not denying

it.

And the Premier stated that this proposal here would treat

every single person in the Province equally. Yes, it would make everybody equal.

It would make everybody poor. If that's the type of equality the Premier is

proposing, that's not the type of equality we want to see in this Province.

He has proposed elimination of fishery transition payments.

He has failed to participate in programs within provincial jurisdiction. He has

failed to recognize, in an industry that can never recover to the extent of what

it was, in our lifetime -

AN HON. MEMBER: How do you know that?

MR. SULLIVAN: It won't happen. I said in the House of

Assembly on November 4, long before they talked about - in 1992, go back and

read in Hansard, I said: The fishery will be closed, not for two years, because

the life cycle of a cod, with the age class we have present, would take two

years to reach spawning age, and seven more for the next cycle. It would take

nine years to renew the fishery, I stated here in this House two years ago.

SOME HON. MEMBERS: Oh, oh!

MR. SULLIVAN: Who is speaking?

Actually, what I feel is going to happen, Mr. Speaker, with

fishery compensation - the first step has occurred now, integrated within the

human resources department, and next year, people now receiving NCARP and other

programs will be taken into the human resources department and receive work and

UI, and there will be no NCARP. It would be moved out of the Department of

Fisheries entirely. That is basically where we are heading, and overall, with

the revenue, in addition to cutting down on the UI directly - directly cutting

down on UI within this Budget - some of the damage started last fall when they

started questioning a delay in the insurability, and that is another tactic

within the department to eliminate more people from the UI rolls again. People

who have legitimately worked at businesses for the last fifteen or twenty years

have been declared ineligible - they are in every district in this Province. I

have had calls from all over this Province in that regard, and that is another

gimmick that preceded the Budget there, the axe started to come down before the

Budget. And overall in this Province, in the next little while, over the next

year, we are going to see a devastating effect and the minister will be standing

again in November, as he did for two of the last three years, or December, and

he will be coming forth to this Province with a mini-Budget because we

miscalculated the impact it is going to have upon this Province.

AN HON. MEMBER: Wrong again!

MR. SULLIVAN: We had a Ministerial Statement and a

mini-Budget and then a Ministerial Statement in December of '92 - since I have

come into the House, this happened one out of the last two years, because they

miscalculated, misjudged or deliberately disguised the figures that are based

upon the Budget. Now, I think we have to do the honourable thing if people are

really concerned with what is happening, if people, within the general UI

regions of St. John's can only draw UI and receive work for thirty-seven weeks -

there is a fifteen-week gap in that period - people out in rural Newfoundland,

in the rest of the Province -

MR. SPEAKER: Order, please!

The hon. member's time has elapsed.

MR. SULLIVAN: Just one minute to finish?

SOME HON. MEMBERS: By leave, by leave.

MR. SPEAKER: Does the hon. member have leave to finish?

MR. MURPHY: Thirty seconds.

MR. SULLIVAN: Thank you.

- in all other areas of the Province except St. John's, there

will be eight weeks of the year in which people will not have income to be able

to put food on the table for their families, and that is important. Many of

these people are going to fall on the borderline of social assistance where they

would be denied assistance by this Province and we are going to have a massive

increase, a grossly underestimated amount in instances by the minister of social

assistance payouts in this Province. And we are going to have a massive problem

- the spinoffs from this Budget will be even greater again, and it will show up

in next year's Budget, you can count on that. Thank you.

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

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

Unlike my colleague, the Minister of Employment and Labour

Relations, I don't know how anybody looking at this private member's resolution

can only make two partisan remarks. I would like to make the comparison that is

like going into a hockey game with somebody else's sweater behind twenty goals

into the third period, because what we see here is a Budget to recover this

country after eight years of Tory mismanagement.

AN HON. MEMBER: Blame, blame.

MR. MURPHY: Well, if the hon. member says: blame, blame,

I say shame, shame, because what happened is here.

AN HON. MEMBER: (Inaudible).

MR. MURPHY: Well, it is shame, shame; but what the

previous administration did to the economics of this country is nothing short of

shameful and today -

MS. VERGE: (Inaudible).

MR. MURPHY: Well,I say to the Member for Humber East,

that is why there are only two members sitting in the House of Commons

representing her party right across the nation.

MS. VERGE: How many of you are going to be here in four

years time?

MR. MURPHY: Well, that is hypothetical, I say to the

member, that is totally hypothetical, and we will see when the time comes. If

there are forty-six members, possibly a couple of you will save your hides, I

don't know, but then, I would say about forty-four.

Now, let me get into the issue at hand. I mean, for hon.

members to stand - the Member for Ferryland, I wonder where he comes from

sometimes.

SOME HON. MEMBERS: Ferryland.

MR. MURPHY: Ferryland, yes - well, no, I am not so sure

if he comes from Ferryland, because if you had the number of calls that this

hon. member gets from the district of Ferryland, the number of people who knock

on my door in Tors Cove, you would wonder that Ferryland had a member.

AN HON. MEMBER: Looking for the member.

MR. MURPHY: Looking for the member. Well, you know, I

think the key issue here, where we are talking about the Atlantic groundfish

industry, is the fact that the previous administration obviously did not provide

the funding. They provided two years funding for a ground fishery that they well

knew was going to be on its knees for a period of at least five to eight years.

They provided two years funding - and the Premier said it today, $600 million.

If you look at the Budget brought forward by Mr. Martin a

couple of weeks ago, we brought forward $1.7 billion, if the member wants to be

technical, but in reality $1.9 billion - excluding, I say to the Member for

Ferryland, the waste of money that was thrown into NCARP by the previous

Minister of Fisheries to look after all the silly little programs that went on.

I also say to the member, money given to those who were not, and are not,

associated with the groundfish industry -

SOME HON. MEMBERS: Oh, oh!

MR. MURPHY: Well, now, the Member for Fogo said that, I

didn't. He makes a lot of sense when he says, to feed whatever. I say to the

hon. member that the whole program was set up in haste, and haste makes waste, I

say to him.

MR. E. BYRNE: And your minister (inaudible) give them the

money now, Crosbie, give it to them now, don't let them wait!

MR. MURPHY: The hon. member - I didn't interrupt the hon.

member when he was up initially. I didn't say anything to the Member for

Kilbride. He is going to have another twenty minutes. If he would give me an

opportunity to show him where he is so wrong I would be happy to have it.

Now, that was the initial problem. The Atlantic groundfish

went on its knees, and time and time again Newfoundlanders were dependent upon

the ten weeks or the twelve weeks or the fifteen weeks or whatever people in

rural Newfoundland could obtain through the fishing industry, and primarily, in

the St. John's and the urban areas of the Province, we were more dependent on,

as such, the construction industry, and industry as such.

Now, we have found a budget that is necessary to save the UI

fund. Because I want to remind the Member for Kilbride, when the new leader of

the national Tory Party was elected, and she stood on the stage in that debate

and was asked by, `What's his name'- `Lucien the Block,' what was the real

deficit, she balked. And when she balked, fifty-five or sixty seats went away

from the Tories in that pause. Because the real deficit was not what Mr.

Mazankowski had predicted, but a deficit of $46-plus billion dollars.

Now, as the Minister of Finance just said to the Member for

Ferryland, when Mr. Mazankowski brought down the Budget last year, and told us

what it was going to be, and we found out the difference, and the red book came

forward from the Chretien government, and it was distributed to the people of

Canada, they well knew that the social programs had to change. There was no

possible way that this country could face a responsibility that had to be faced

without having a deficit that was under $40 billion. Many parts of Canada, and

even people here in Newfoundland, have criticized Mr. Martin's Budget because

they claim that his cutting was not enough, that the deficit reduction wasn't

adequate.

We know what happened when the amount of money that was put

into groundfish wasn't adequate. This government has put in $1.6 billion. Let's

talk about Atlantic Canada and the present UI structure. Atlantic Canada will

still receive more UI payments per capita than anywhere else in Canada. In other

words, from our share of a federal Budget, we are going to receive more than

anywhere else in Canada, for the obvious reason that we have more people per

capita unemployed than any other part of Canada.

AN HON. MEMBER: (Inaudible)

MR. MURPHY: (Inaudible) in Canada will still be eligible

for more benefits with less work than people in other regions of the country.

There will be $800 million available to develop and test innovative pilot

projects than in other regions of the country. What we are seeing, I say to the

hon. member, is a federal government who have been strapped, who have been

exhausted beyond themselves to try and bring down a Budget that did two things.

The Budget had to do two things. Number one was to reduce the deficit and

provide new jobs, and that is pretty tough to do. Let us face it, the Tory

administration in eight years could not do it and they got turfed out like no

other government in the history of this nation. The got turfed out, flicked,

goodbye.

AN HON. MEMBER: The same thing is going to happen to you.

MR. MURPHY: No, the same thing will not happen. Let me

say to the hon. member, the hon. Member for Baie Verte may come in -

AN HON. MEMBER: (Inaudible)

MR. MURPHY: Wherever. You remember it because after the

next election I will not have to remember it.

The Premier stands in his place and he tells Opposition

members, day after day, that the reason this government takes the action is

because there is no other action. I say to the Member for Kilbride that it would

be marvellous if we could say to every worker in Newfoundland, if you get eight

weeks work you qualify for UI to a minimum of $300 a week. That would be

marvellous. That would be politically great but it would not be 1994 real. I say

to the Member for Burin-Placentia West that the ideal situation would be for

every Newfoundlander to have the opportunity to work fifty-two weeks of the year

with the normal amount of annual leave, and sick leave if he or she had that

problem. That would be the Utopia.

AN HON. MEMBER: Not anymore.

MR. MURPHY: I say to the member he is correct, not

anymore because of Tory mismanagement. Tory mismanagement for seventeen years in

this Province and eight years federally has gotten this country in the bind it

is in. That is what I say to the member.

AN HON. MEMBER: (Inaudible).

MR. MURPHY: Your program. You, strutting up and down the

Bonavista Peninsula costing the taxpayers of this country a fortune. That was

the waste, you.

MR. TOBIN: (Inaudible).

MR. MURPHY: I do not mind talking about my district

allowance. As a matter of fact I say to the member for Burin - Placentia West

that I will table my expenses in this House as Parliamentary Assistant to the

Premier of this Province as soon as I can get my hands on them, but I will also

table his in 1985 dollars and we will let the public of this Province have a

look at whose expenses are where. We will see and the hon. Member for Burin -

Placentia West will see. You spent more on Bic lighters in eight months than I

spent in the eight months since I am here.

SOME HON. MEMBERS: Oh, oh!

MR. MURPHY: I say to the hon. member he may or may not be

right, we will see.

MR. TOBIN: Ask (inaudible) about your expenses?

MR. MURPHY: I do not really have a problem with my

expenses. If the hon. member has a problem with my expenses then he should take

it to the Speaker. That is where he should take it, to the appropriate place.

MR. TOBIN: Why did you write The Evening Telegram ?

MR. MURPHY: I do not write The Evening Telegram .

As a matter of fact I am really not interested in talking to many of the cub

reporters or copy boys at The Evening Telegram . As a matter of fact I do

not even read The Evening Telegram. If I want to read a tabloid I will

buy one in the supermarket. I do not know what they are called. If I want to

read some silly gobbledegook I will pick it up at the supermarket.

Now the roll-back in the premium rate in 1995 and beyond will

provide significant financial relief to business, and I think the members should

understand that. There is another thing here in this resolution that is not

being spelled out nor has he talked about it. We have given incentive to

business to create, and I think that is an extremely important point that we

have to take into consideration, that the business community will have an

opportunity. I understand that it is hypothetical, but the Member for Mount

Pearl would agree, as he was Minister of Treasury Board in the Province,

sometimes you have to do things with the intent of making or creating more jobs

and more j