Province of Newfoundland THIRTY-NINTH GENERAL ASSEMBLY OF NEWFOUNDLAND Volume XXXIX Third Session Wednesday VERBATIM REPORT {Hansard) Speaker: Honourable james Russell Number 70 19 December 1984

The House met at 3:00 p.m. MR. SPEAKER (Russell): Order, please! Statements by Ministers MR. WINDSOR: Mr. Speaker. MR. SPEAKER: The hon. the Minister of Development. SOME HON. MEMBERS: Hear, hear! MR.. WINDSOR: Mr. Speaker, I am pleased to be able to report to the House today that the recent Newfoundland trade mission to the Orient, headed by myself and my colleague, the Minister of Mines and Energy, (Mr. Dawe) has been successful in creating a positive attitude towards investment possibilities in Newfoundland and Labrador.

The mission was designed to promote investment opportunities in Newfoundland-based resource projects, and included meetings in Japan, South Korea and Hong Kong. Mission delegates represented several Newfoundland companies and organizations. These included the BAE Group, Easteel Industries, Marystown Shipyard, Geonautics, Woodman's Fisheries, the Iron Ore Company of Canada, Fishery Products International, Transpacific Resources, NORDCO, and the Town of Mount Pearl.

As well, the mission included the Deputy Ministers of Development, Forest Resources and Lands, Mines and Energy, and Fisheries, as well as a liaison support person from the Department of Development. L6323 This trade mission to the Orient has gone a long way towards establishing the kinds of permanent business relationships which will eventually lead to joint ventures between Newfoundland firms and business in the Far East. I should like to outline some of the major activities that were arranged by the Departments of Development and External Affairs as part of this mission.

We were in Japan from D'ecember 2 to December 7 and met with various representatives from the private sector and the Japanese government. Included in these business meetings were briefings from MIT!, the Japanese Ministry for International Trade and Industry; the Japanese Ministry of Agriculture, Forestry, and Fisheries; and we also met with the Japan Forest Agency and Japan Fisheries Agency, who presented briefs on their respective industries and markets. While in Japan, delegates attended the Canadian Oil, Gas and Marine Technology Exposition (COGMIT).

This is an annual event sponsored by the Canadian embassy to introduce Canadian ocean industries to business in Japan. I addressed a seminar held in conjunction with the show, outlining the activities of the petroleum industry in offshore Newfoundland. As well, the Minister of Development from Nova Scotia was at the seminar, which was attended by 130 business executives. Incidentally, Instrurnar Limited, a Newfoundland firm, was exhibiting at the COGMIT show. Mission delegates also met with the Japan Deep Sea Trawler December 19, 1984 R6323

Association, and the Japan Marine Products Importers Association, and reviewed the market for Newfoundland fish products with five Japanese importing firms. Some of the major manufacturing industries visited in Japan include the Nippon Chemical Industrial plant, Nippon Kokan Shipyards, and Oj i Paper Company. Mission delegates also met with representatives of the Japan Paper Association and participated in a -forest products tour. In addition, delegates met with representatives of two of the larger trading companies in Japan, Mitsui Corporation and Marubani Corporation.

The Minister of Mines and Energy presented a brief on mineral-based opportunities in Newfoundland and Labrador at a metals investment seminar in Tokyo, and at a meeting of the Canadian Chamber of Commerce in Japan, I had the honour of presenting a brief on development opportunities in the Newfoundland offshore. Members of the Japan/Canada Business Co-operation Committee, the Premier of Prince Edward Island, the Nova Scotia Development Minister, and over 150 Japanese based business executives were also at that meeting.

In Japan, delegates met with representatives of Japex Petroleum, who have expressed a great interest in oil and gas activity in offshore Newfoundland. Delegates also met with the Overseas Fisheries Co-operation Foundation. Several Newfoundland delegates toured the Japanese port of Kushiro, a major fish producing centre, visiting plant facilities, a salmon hatchery, a surimi plant and a large-scale wholesale and retail L6324 seafood market. The port of Kushiro is significant in that close to one million tons of fish are landed there annually, equalling the total fish landings in all of Canada on a yearly basis.

While in Kushiro, delegates met with representatives of the Kanai Fisheries Company. I had the opportunity in Japan to address the weekly meeting of the Tokyo Rotary Club, where I outlined the development opportunities that exist in Newfoundland for Japanese business interests. I was also delighted to be able to participate in the signing of an agreement on behalf of the Newfoundland Government which will enable Newfoundland Hydro to borrow 7 billion yen from the Bank of Tokyo and ·Meiju Mutual Life for the purchase of equipment for hydro-electric developments in the Province.

I would like to point out that because of a very heavy

schedule of activities, mission delegates also split up from time to time to enable us to attend all the functions. In particular, while some of the mission delegates stayed in Japan to tour the port of Kushiro, my colleague, Mr. Dawe, and I travelled to South Korea for meetings with Canadian embassy officials in Seoul. Also, in South Korea we visited the Hyundai Corporation, which employs over 180,000 people at an immense complex situated at Ulsan. The complex includes a major automobile factory, a steel foundry, a steel pipe manufacturing plant, a ship construction yard and a repair yard.

We were taken on a complete tour of the automobile manufacturing plant beginning with the foundry, where the major metal components are produced, and December 19, 1984 R6324

proceeding through the various stages of assembly to the finished product. That tour was followed by one which took us through the huge shipbuilding yard and the adjacent ship repair and modification facility. Incidentally, Mr. Speaker, the dry dock there is the largest in the world. The Hong Kong portion of the mission was scheduled from December 9 to December 12 and was planned because, among other reasons, Hong Kong is rapidly becoming the main centre of activity for imports from the Western World to China.

Since China represents a huge, untapped market for almost all products produced in this Province, it was considered desirable to make the industry in Hong Kong more aware of these products. As well, the impending expiration of the ·British leasehold in Hong Kong has created a situation where many investors in the colony are looking for investment opportunities outside the area. In Hong Kong, delegates met with representatives from twenty-eight different business organizations and companies.

Notable among these were the Hong Kong General Chamber of Commerce, the Hong Kong Trade Development Council, the China National Offshore Corporation, the Chung Wah Shipbuilding and Engineering Company Limited, and many more. In Hong Kong, my colleague and I were asked to represent Canada at a wreath laying ceremony and memorial service to commemorate Canadians who had lost their lives in the defence of Hong Kong during the Second World War.

At separate meetings of the Hong L6325 Kong General Chamber of Commerce and the Canadian Chamber of Commerce in Hong Kong, I made major presentations dealing with the resources available in Newfoundland, as well as development opportunities. I would like to reiterate that the trade mission to the Orient was undertaken to investigate the potential for the development of business relationships between Newfoundland and companies based in the Far East. The value of such an effort must be measured by the results achieved by specific mission participants.

For example, Easteel Industries had been negotiating for several months with a steel company in Tokyo with respect to securing the agency for downhole pipe for offshore drilling. The meetings they held in Tokyo brought them - closer in their negotiations, and there will be further negotiations within the next .sixty days, which can possibly bring · their plans to fruition. In Hong Kong, Easteel met with companies involved in steel fabrication both onshore and offshore China. There is a strong desire for Easteel to joint venture with one of these companies.

It now appears that as a result of their participation, Easteel will have further negotiations on a proposed joint venture to work in China. Meetings have been arranged with officials of this Chinese company in St. John's in January, with a planned follow-up visit to China in March by Easteel representatives. Another mission participant, the BAE Group, used the opportunity of the mission to meet with companies interested in establishing a December 19, 1984 R6325

.. presence in Canada, and in Canadian transfer of technology to their countries. Some of the opportunities that the BAE Group identified are in the areas of mini-hydro development, pre-fab housing, shipbuilding and ship repair, oil development, including supply of engineering expertise for the South China Sea, and transfer of fisheries expertise. These are examples of how specific companies have benefitted from the quality contacts that were made during this ministerial mission. Other inroads were made in the area of the fishery.

The primary objectives of the mission from the fisheries perspective were to seek potential avenues for investment in the Newfoundland fishing industry, to further develop our market potential, and to ascertain the reaction to Newfoundland fish products in the visited countries, especially Japan. As a result of meetings held during the mission it was determined that Japan will need addi tiona! amounts of fish in the short and long term because of reduced fish allocations in foreign waters; hence there would appear to be considerable market opportunities for redfish, cod and other groundfish species.

A significant amount of interest was expressed in investing in Newfoundland b~sed companies, as well as potential joint ventures involvement in harvesting, processing and marketing activities. It is also encouraging to learn that shipments of Newfoundand fish products to Japan have been generally well accepted, especially pertaining to squid and caplin and, very recently, small shipments of redfish.

L6326 The increasing need for fish products by Japan will necessitate a cooperative effort in the area of technical advice on product handling and processing, and in this regard further discussions have been planned with the Overseas Fisheries Development Foundation in Japan for the potential exchange of personnel. Furthermore, plans have been finalized between the two fishing industry delegates on the mission for further discussions with specific reference to caplin production and marketing in Japan in January.

In Hong Kong, meetings were held with the Fisheries Department as well as many fish importing companies, plus companies interested in investment. There would appear to be a developing market for groundf ish in Hong Kong. based upon a recent dramatic increase in groundfish imports fr9m New Zealand. This is a market that was identified during the mission and one in which the potential for Newfoundland exports is great. Redfish and codfish are obvious examples of potential export items to the Hong Kong market.

While in Hong Kong the mission was exposed to the huge fur industry, valued at some $250 million annually, and meetings were held with large fur processors and marketers. This has great potential for Newfoundland, especially in relation to revitalizing the seal fishery. It is particularly interesting to note that several companies involved in fish, in particular, and also furs will be visiting Newfoundland during 1985 to continue the dialogue that the mission initiated. While it is December 19, 1984 R6326

understood that future development of investment and market potential will take considerable time and planning, the groundwork for such activities has been laid by this mission, and both Newfoundland companies and the companies in the Far East are now better equipped to discuss activities pertaining to their respective communities. In the area of shipbuilding, and from the standpoint of Marystown Shipyard Limited, the trade mission was both successful and educational.

In Japan substantive discussions were held with a major shipbuilding and offshore fabrication company, NIPPON KOKAN Limited, who are actively pursuing the idea of future joint ventures with Marystown Shipyard in the design and fabrication of offshore structures. These discussions were a follow-up to a visit by executives of NIPPON KOKAN to Marystown several months ~go and resulted in an agreement in principle for a technology transfer programme starting in early 1985.

In Korea discussions were held between Marystown Shipyard and Hyundai Shipyards in Ulsan, and information was exchanged dealing with mass production techniques and equipment. At the time of our visit to the Hyundai there were forty-five vessels being constructed. In Hong Kong meetings were held with a major shipping company which had previously expressed an interest in investing in the Canadian offshore and recognizes the necessity of Canadian content in such a venture. It is expected that follow-up meetings will be arranged to discuss both the Japanese and Hong Kong business opportunities in early 1985.

L6327 Another major resource sector which was addressed during the mission was forestry. The primary objectives of the mission from the forestry standpoint included familiarization with the characteristics and demands for pulp and paper products in the Southeast Asian marketplace and to promote investment potential in the Lake Melville area of Labrador, where a high quality wood resource is available for the production of pulp and/or paper.

Next to the United States, Japan is the largest consumer of wood and wood products in the world, and estimates indicate that the Japanese will have to import an additional 200,000 tons of newsprint by the end of this decade. The Japanese market is a very demanding one for newsprint in that they require top quality and guaranteed consistency of supply. If both these factors can be met by a supplier, then the price is not usually the determining factor in entering into contracts.

Mission delegates met with representatives of the Japanese Paper Association and discussed the opportunities that exist for investment in Newfoundland projects for the production of paper for the Japanese market. The investment opportunity in Labrador was presented, stressing the high quality of the available wood resource and the existence of relatively low power rates which will remain stable in the future.

It was ascertained that, if conditions were right, Japanese paper companies have demonstrated a willingness to invest anywhere in the world, and that the quality of the resource, coupled with the valuable energy situation, would make Labrador a viable investment of interest to Japanese firms. December 19, 1984 R6327

One of these companies, Oji Paper, has already established a partnership in New Brunswick, and company officials emphasized their willingness to continue to invest in Eastern Canada. Several other pulp and paper companies were contacted in Japan including Tekai Paper, Jujo Paper and Kanematsu-Goso Limited and information was provided on the Labrador forest investment potential. In addition, discussions were also held with the Marubeni Trading Company, who have had a long-standing relationship with the Abitibi Company operations in Newfoundland for the purchase of newsprint for the Japanese market.

Most of the contacts made in Hong Kong concerning the forestry potential in this Province were of a broad nature, to investment groups such as the Chamber of Commerce. Specific contact was made with a number of companies who are interested in the forest product sector, including one investor who has already visited Labrador . A number of these companies expressed an interest in visiting Labrado~ to assess the investment potential for forestry first-hand.

If Newfoundland and Labrador is to be competitive in world markets, and if we are to develop our resources fully, we must initiate contact with investors and business interests who can supply the necessary expertise and capital. As a Province, we are not alone in these efforts. While we were in Asia, major trade delegations from the governments of Nova Scotia, P .E. I., B.C. and Alberta were also in that region.

In fact, every provincial government in Canada has engaged L6328 in trade promotion in the Pacific Rim in the last several years in recognition of the simple fact that this country needs foreign investment for development and the Orient is one of the major sources of development funding as well as one of the largest markets in the world. I should also like to point out that it is the quality of the business contacts made, not the quantity, that is important.

On numerous occasions senior company officials, as well as embassy staff stated that the designation of the mission as a ministerial mission, with representatives including Ministers of the Crown, was essential to gaining _access to the top levels of the corporate world in the countries visited. It would be remiss of me to conclude without a word of praise to the Canadian Embassies in Japan and South Korea, and the Commission for Canada in Hong Kong, who contributed greatly to the success of the trade mission. The timing of this trade mission to the Orient is rather advantageous from the Newfoundland perspective.

The Japanese government has recently changed their industrial strategy, seeking ways to rationalize industry with the resources available to them. They recognize that they are weak in natural resources yet strong in high technology industries. On the other hand Newfoundland has an abundance of natural resources but the level of technological application in industry is limited. Through trade missions such as this we are endeavouring to bring about a natural "marriage" of Japanese technology and Newfoundland resourc ·es . December 19, 1984 R6328

We also see this effort as a means by which we can develop new markets for our products. It is important to note, Mr. Speaker, that gaining access to the Hong Kong markets puts us in an excellent position to penetrate the potential of the mainland Chinese market. It was encouraging to note that many of the business executives we met had reacted favourably to the recent change in the Canadian federal government.

The stated policy of Prime Minister Mulroney, welcoming investors to Canada, the change in FIRA and the review of the National Energy Policy, were all seen to be positive steps which made the investment climate in this country very attractive. For this Province to grow economically we require development of our natural resources. This development will be funded in two ways; through the creation of a strong processing and manufacturing sector utilizing natural resources, and through the opening up of new markets for our existing and new products. Trade missions such as this, Mr.

Speaker, are the beginning of the process that will accomplish both of these goals. Mr. Speaker, I would as my colleague, the Minister of Mines and Energy (M.r. Dawe) , to expand on the areas relating to the mineral sector. Before I sit down I want to note the concern of the Opposition and their small minds as it relates to development of this Province. We can see what they are worried about. SOME HON. MEMBERS: Hear, hear! L6329 MR. DAWE: Mr. Speaker. MR. SPEAKER (Russell): The bon. _ ~he Minister of Transportation. MR. DAWE: Mr.

Speaker, the mineral based opportunities component of the mission received a very positive reception which could lead not only to expanded markets in East Asia for the commodities already sold there, but also for addi tiona! mineral commodities from Newfoundland and Labrador. The importance of . this government's effort to gain a greater share for the Province - MR. NEARY: A point of order, Mr. Speaker. MR. SPEAKER (Russell): Order, please! The hon. the member for LaPoile on a point of order. MR. NEARY: Mr.

Speaker, I want to point out that we just had a Ministerial Statement that was twenty minutes in duration and I believe whichever one of my colleagues on this side of the House who wants to should have the opportunity to reply. MR. DAWE: I asked the Leader Opposition (Mr. Barry). MR. BARRY: of the I waived our right to an immediate reply. MR. NEARY: If you did, fair enough. MR. DAWE: December 19, 1984 R6329

Who is the Leal LeadeL of the Opposition oveL theLe? MR. RIDEOUT: They have two fighting against theLe. t1R . SIMMS: The knives aLe out. leadeLs, the etheL MR. SPEAKER (Russell): one oveL The hon. the MinisteL of TLanspoLtation. MR. DAWE: The impoLtance of this goveLnment' s effoLt to gain a gLeateL shaLe foL the PLovince of a gLowing maLket in a laLgely LesouLce depLived aLea is emphasized by the fact that eveLy otheL pLovince in Canada has mounted a tLade OLiented mission to Southeast Asia in 1984 MR. NEARY: YouL pLopaganda will not justify youL squandeLing of taxpayeL money. MR.

DAWE: CuLLently, the WesteLn pLovinces enjoy the lion's shaLe of Canada's mineLals expoLt tLade with that paLt of the woLld. HoweveL, it is cleaL fLom the Lesponse to ouL mission that theLe is definite potential foL gLowth in tLade with the EasteLnmost pLovinces, but we must take the initiative in seeking out and developing maLkets foL, not only mineLals, but otheL pLoducts as well. On DecembeL 4, I conducted a seminaL in Tokyo on mineLal -based oppoLtunities in Newfoundland and LabLadoL. A copy of the text of that pLesentation is being made available to hon. membeLs.

The seminaL was attended by senioL LepLesentatives of Japanese mining companies, steel and etheL metal L6330 companies, majoL banks, feLLo-alloy inteLests, the Japan Mining IndustLy Association, tLading companies and the MinistLy of InteLnational TLade and IndustLy. OUL illustrated pLesentation was Leceived with great inteLest and theLe weLe many Lequests foL fuLther, detailed infoLmation on specific mineLals. We had been advised by the Canadian Embassy officials that the East Asian maLket is one which, if it is to be accessed, LequiLes peLsistence and patience.

It is ouL intention, theLefoLe, to followup the contacts made and to make every effoLt to expand OUL expoLts and to Lealize new investment in Newfoundland and Labrador. As evidence of the positive impact of OUL pLesentation on mineLal-based opportunities, one of the laLge Japanese tLading companies followed up immediately, thLough the Canadian Embassy · in Tokyo, about their wish to obtain fuLtheL infoLmation. That inquiry awaited me upon my return and their inteLest is two-fold. They wish to pursue the opportunity pLesented by the ILon OLe Company of Canada's specialty minerals deposit in StLange Lake, Labrador.

That deposit, which is recognized as the laLgest known concentration of high tech metals discovered anywhere in the woLld, is an outcome of a survey which we conducted a few yeaLs ago and which was followed up by the Iron OLe Company of Canada. The value of the metals contained there is estimated to be in the order of some $10 billion and the company is cuLrently planning a mining and pLocessing complex. The deve ·lopmi:mt will be one which takes advantage of advanced December 19, 1984 R6330

Japanese technology in high performance ceramics and the availability of critical raw materials which will be produced for the benefit of Newfoundland and Labrador. This trading company also wishes to know more about a proposal by Wabush Mines to produce manganese as a by-product of their iron ore operation in Labrador. Prior to going to Japan, I had discussed this proposal with officials of Pickands Mather, and they welcomed the opportunity to have their proposed development made known to Japanese interests through our seminar.

Japanese industrial policy is currently undergoing a process of structural adjustment and, in this context, our thrust is being made at an opportune time. The high cost of energy in Japan is forcing the government to curtail production of energy intensive minerals and metals and to seek supplies of these commodities where they can be obtained at lower cost.

Their overseas investment policies are described as being 'fully liberalized' and this liberalization can lead to investment in areas such as Newfoundland and Labrador, where there is an abundance of developed and yet to be developed hydroelectricity as well as energy intensive minerals which are required in Japan • s enormous industrial complex. The nonferrous metal industries are of particular interest in the structural adjustment process. Specific reference was made by the Japanese to aluminum, silicon and zinc. They are also interested in uranium, coal and magnesium.

This Province already has a market in Japan for a relatively small L6331 portion of the asbestos fibre produced at Baie Verte. An expert in the asbestos field, who is an advisor to Transpacific Resources, the parent company of Baie Verte ­ Mines, accompanied the mission and reported to me on his findings. The mission provided numerous opportunities to make contact with companies and individuals with knowledge and experience in the Japanese market which, in contrast to the other Asian countries visited, is mature and sophisticated.

In general, it is apparent that, to compete in this type of market, two factors must be considered. Firstly, the Japanes are exceptionally quality conscious and, secondly, there is considerable competit,i,c;m from other asbestos producers in Quebec, Russia, Brazil and Zimbabwe. Transpacific's representative observed that Baie Verte fibre has a potential to compete because of its quality and he hopes to increase Baie Verte' s share in the asbestos-cement market. In addition, there appears to be a substantial market in specialty fields such as friction materials and roofing felt.

As a result of the contacts made, Transpacific Resources intends to review all potential market opportunities with the staff of Baie Verte Mines with a view to increasing sales to Japan. Newfoundland has been a supplier of phosphorus to the Nippon Chemical Industry Company in Japan since ERCO established its plant at Long Harbour in 1968. My visit to the Nippon complex at Taketoyo was the first ever made by a representative of our government and it was very much welcomed.

I believe that such contact helps to enhance the position of this Province among the highly competitive producers who are December 19, 1984 R6331

vying for this attractive market · for phosphorus. Iron ore is the principal mineral commodity exported from the Atlantic region of Canada to Japan, with all the current supply corning from Labrador. Long-term contracts have been the normal arrangement for such sales. The Iron Ore Company representative observed that the future appears stable for their continuation. South Korea, like Japan, is a resource-deprived area which is making tremendous strides towards establishing a rnaj or industrial complex. This translates into a growing demand for minerals as well as other commodities.

Further follow-up to our initial contacts there could open markets for mineral commodities sold in Japan as well as for other minerals from this Province. Again, as in the case of Japan, there is growing sophistication and concern about quality and reliability in the marketplace. Personal contacts and follow-up are required to develop the rapport that is necessary in establishing markets there. The Baie Verte representative had an opportunity during the short stop in Korea to discuss with the staff of the Canadian Embassy the market for asbestos in that country.

Although the relatively large asbestos-cement industry suffers from lack of hard currency, it is expected that the situation will change as exports continue to grow. The Embassy staff will undertake to identify individuals in the asbestos-cement industry and these will be contacted by Baie Verte Mines sales staff to explore sales opportunities as soon as possible. L6332 Although Newfoundland is currently not a supplier of minerals to Hong Kong, not only are there possibilities for markets there but the Crown Colony is a gateway to China where theL""e are definite opportunities.

As faL"" as Hong Kong itself is concerned it is a vecy large consumer of portland cement and all of its supply is imported in the form of clinker. Currently, Japan and China are its suppliers. Cement clinker is an energy intensive mineral product. Newfoundland has a practically unlimited supply of portland cement I.""aw rnatei.""ial at tidewater on the West Coast which could support a world scale production facility. This is one of the opportunities which will be pursued.

The asbestos representative on the mission met with numerous individuals in Hong Kong who were familiar with the market and the political situation in China. His visit was pai.""ticularly important because China is a market with a tL""emendous growth potential. Although it has significant reserves in hard currency, it lacks technology and the infL""astructure to absorb and apply it. For this reason the maL""keting approach for China must be quite different.

For example, for the huge construction projects planned there, the technology for building and operating asbestos-cement plants and the application of asbestos-cement products must be provided before a market for asbestos fibre can be created. The IOCC representative had an opportunity to view the market prospects in China from the Hong Kong approach. He observed that possibilities exist for iron ore December 19, 1984 R6332

sales in China and these might be accessed in conjunction with shipping schedules to Japan. He also observed that opportunities for technological transfer in the area of mineral resource exploration may offer joint venture opportunities for Newfoundland and Labrador based firms. In conclusion, I believe that our mission has opened up many new avenues in a large and rapidly growing market. As we pursue with vigor the opportunities which present themselves, this Province will benefit greatly from new and expanded economic activity. SOME HON. MEMBERS: Hear, hear. MR. SPEAKER (Russell): Order, please!

Before I continue I may need some guidance from the House. Being Private Members' Day, of course, our Standing Orders say that Question Period must commence not later than 3:30 p.m. except by leave. There was some discussion yesterday that we may waive Private Members• Day today so the Chair is not quite sure of what the procedure is going to be. I may need some guidance in that respect. MR. MARSHALL: Mr. Speaker. MR. SPEAKER: The hon. the President of the Council. MR. MARSHALL: Mr. Speaker, I think the agreement has been that we will proceed to ordinary government business today instead of Private Members' Day.

I hope this is agreeable to all members of the House. In which case, in the spirit of the times L6333 there has been a statement that has consumed almost one half an hour and we would be interested in hearing what the Opposition have to say about the combined statements of the two ministers. MR. SPEAKER (Russell): So it is understood that we are going to waive Private Members• Day. The hon. the Opposition. MR. BARRY: Leader of the My Lord - I am sorry, Mr. Speaker. MR. MARSHALL: The hon. member is advertising, Mr. Speaker. MR.

BARRY: I have been in court all morning and I am confused with what form of address to use. Mr ·. Speaker, it is all ·very interesting, you know, but I looked desperately throughout these entire statements to see the number of jobs that were going to be created. I believe that the 60,000 unemployed in this Province are not going to receive very much in the way of assurance once they read this. MR. TULK: They will not be dancing in the streets. MR.

BARRY: I do not think there was very much delivered here today in a half an hour with two ministers making a presentation and there was not one concrete result set forth. MR. NEARY: They are suffering from jet lag. MR. BARRY: December 19, 1984 R6333

Now, Mr. Speaker, we know that there is a need to go out and make contacts and cast your bread upon the water to hopefully try and bring about some return eventually. But, Mr. Speaker, the minister has been doing this since 1979 and what have we seen? MR. NEARY: A lot of stamps on his passport, that is all. MR. BARRY: Yes, he has a passport that you can barely lift anymore for the number of stamps that have been put on it. But we have seen very little in terms of results. And my experience has been, Mr. Speaker, that the content of a statement is inversely proportional to the time it takes to give it.

And I think we saw a good example of that today with one of the longest statements presented in the House by the Minister of Development (Mr. Windsor) with some of the smallest content. Now, Mr. Speaker, one of the disappointments in this report is the indication by the two ministers that instead of their staying around for the tour of the port of Kushiro, which is probably the most relevant part of the trip in terms of looking at the potential for secondary processing in the fishing industry, we see the two ministers taking off to tour a major automobile factory and a steel foundary in Seoul. Now, Mr.

Speaker, that is an indication of where the government's priorities are; they turned their back on the fishing industry, turned their back on what the potential might be to improve the fishing industry and learn from what the Japanese are doing, and head off to Seoul L6334 because that is with some more exotic sites. MR. NEARY: another country interesting and Another stamp on his passport. MR. BARRY: And another stamp on his passport. I suspect, Mr. Speaker, that the real motivation for this statement was the very penetrating series of questions put by my colleague, the member for LaPoile (Mr.

Neary) over the last several weeks. I think that that was the real motivating force behind this statement. It was not, Mr. Speaker, the content. There is nothing here, there is nothing in the way of results. The trip was completely without results. The statements do not deserve any more conunent, Mr. Speaker. Let us get on with the real business of the Province. MR. SPEAKER: The hon. Minister of Finance. DR. COLLINS: Mr. Speaker, just a brief statement.

I would like to inform the House that we have concluded a tentative collective bargaining agreement with the ferry service operators which is a division of NAPE, and that agreement is being promoted by the executive. The vote is in the process now as is just about completed. SOME HON. MEMBERS: Hear, hear! MR. SPEAKER: The hon. member for LaPoile. MR. NEARY: I do not know if this is in order or not, but the Minister of Social Services (Mr. Hickey) passed me over a Ministerial Statement. He December 19, 1984 R6334

is not in his seat. Would it be · all right for me to read it for him? He says he is pleased to announce - SOME HON. MEMBERS: Hear, hear! MR. SPEAKER: Order, please! Order, please! I am sure by the very terminology, Ministerial Statements, they are to be given by ministers and not by any private member. MR. NEARY: Well, a point of order, Speaker. MR. SPEAKER: Mr. A point of order, the bon. member for LaPoile. MR. NEARY: -Mr.

Speaker, I would like to ask if the Minister of Social Services is going to announce today that comfort allowances has been increased to $90 a month in all homes for special care and licenced boarding home recipients? Is the hon. gentleman going to make a Ministerial Statement today? MR. SPEAKER: Order, please! rightfully be Question Period. MR. HICKEY: That asked in A point of order, Mr. Speaker. MR. SPEAKER: can the The bon Minister of Social Services on a point of order. MR. HICKEY: It is too bad the han. gentleman does not have the manners that I have.

I understood there was an agreement and I consulted my colleagues and I was told that it L6335 would be a breach of the agreement for me to make a Ministerial Statement. But that is what I get for giving the hon. gentleman a copy of my statement earlier. There is one thing, Mr. Speaker, I only make mistakes once. MR. NEARY: Anyway, the comfort allowance is going up to $90 a month. Oral Questions MR. SPEAKER: The bon. Leader of the Opposition. MR. BARRY: Mr. Speaker, I would like to have the Premier here for this statement. I do not know where he is today but I would address it to the Minister of Finance instead.

Now we have seen that the minister has just announced that there is a settlement with the ferry operators, a very small branch of NAPE. Now I would like to ask the Minister of Finance whether the government is prepared to lift the wage freeze with respect to public employees? I understand that negotiations are underway with the NTA, the police, the hospital workers will be coming up, and the general service. Now, Mr.

Speaker, would the Minister of Finance tell us whether they are going to negotiate in good faith, which will require something other than going to the bargaining table and saying, "Zero-zero is what you are getting," which is conunonly known as bulwarkism. AN HON. MEMBER: What? MR. BARRY: Bulwarkism: You do not negotiate, you go in and tell the other side, December 19, 1984 R6335

"This is it, take it or leave it." Now, Mr. Speaker, I would like to know is are the Minister of Finance (Dr. Collins) and this government, going to negotiate in good faith with these groups that are now coming up in the collective bargaining process, or are they going to continue to insist upon this zero-zero freeze. MR. SPEAKER: The hon. Minister of Finance. DR. COLLINS: Mr. Speaker, the Premier is occupied at the moment in his office but he will be up shortly. I just thought I would mention that in case there was doubt about it in view of the hon. Leader of the Opposition's opening remark there.

In regard to negotiations, Mr. Speaker, occasionally we have been accused of negotiating in bad faith. As a matter of fact I think there has been one, if not two court cases on the matter. In each instance the court cases did not succeed. In other words, there was absolutely no evidence brought forward that the negotiating posture taken by government was anything but in total good faith. We will continue to keep up that excellent record we have had throughout the years and I have no doubt that any spurious remarks to the contrary will be shown the derision and contempt that they deserve.

We have great regard for the workers in the Public Service. We know that they often bring forward legitimate concerns and legitimate demands and we have absolutely no intention of regarding or treating their demands and concerns with anything but the greatest attention and to deal with them to the best of our ability. L6336 Unfortunately, in financial terms our ability, especially in recent times with the recession and so on, our ability is somewhat limited.

We felt that it would be not serving the best interests of our workers, whom we hold in such high regard, if we let them have expectations that just could not be satisfied, so we elected to tell the workers in a public and a private way as early as possible what was within our means and what was beyond our means.

The vast majority of public workers have accepted that and I would have to emphasize that we have reached agreement with I think it is over twenty bargaining units comprising something over 20,000 public servant workers on the base of our restraint measures without a single strike, without a single work action as it is called, but what it means is a strike, on that score.

So the workers in the Public Service are very knowledgeable about our financial resources, they are taking a very responsible attitude towards the Public Accounts and the Public Exchequer and we expect them to continue in the same way and in reciprocation to that we will certainly bargain in the best of faith as we always have done. MR. BARRY: A supplementary, Mr. Speaker. MR. SPEAKER: The han. Leader of the Opposition, a supplementary. MR.

BARRY: I think we saw an indication of the minister's attitude that because they have gone to court and won twice that is great, and we can see a continuation of court cases, while members try and establish some flexibility on the part of government. December 19, 1984 R6336

Now, Mr. Speaker, I asked the minister a simple question: Are they or are they not going to insist upon zero-zero? And how can there be negotiation if they are going to insist upon zero-zero, take it or leave it, Mr. Speaker? And I would like to ask the minister whether he is aware that other provinces have lifted their wage freeze? And we have wage settlements with the public service ranging from well, I guess the hon. minister and his government likes to model themselves after BC. They are the new Bill Bennetts, the Eastern Bill Bennetts. Even in BC, Mr.

Speaker, there have been wage increases of 2 to 3 per cent as part of the public service settlement, and those are the lowest. They range from 2 to 3 per cent in BC, 2.5 to 3 per cent in Alberta, 3. 6 per cent in Saskatchewan, 4.1 per cent in Ontario, 3.5 per cent in Quebec, 5 per cent in New Brunswick, 4.8 per cent in PEI and 3. 3 per cent in Nova Scotia. Now, Mr. Speaker, the minister has said we have been able to get agreements in the past with the freeze in place. Fine, that was yesterday, that was last year. Is this going to go on forever?

Are the public service employees going to be frozen in a position where they are falling further and further behind every year? Or is the minister going to do something, namely lift the freeze and go in and negotiate in good faith? MR. SPEAKER (Russell): The hon. Minister of Finance. DR. COLLINS: Mr. Speaker, when the freeze - and I might add that there were previous restraint measures prior to the putting in place of the freeze - was put in place the L6337 Premier made a public statement and he also met with certain labour leaders in the Province, especially those who would be involved in the public sector.

He at that time made a statement that the freeze would be there for two years unless there was significant improvement in our financial position as a government, and the implication would be that in that case there would be a review of the situation. There was a recent meeting with certain labour leaders on much the same subject and that position was again put before them and they understood quite well what we meant, i.e., that the freeze would go on for two years unless there was a significant improvement in our financial position as a government and in the economic conditions in the Province.

And, of course, the quarterly report that I recently released showed that we have not yet reached that happy stage. We anticipate that this year will be somewhat better than last year economically in the Province but not to the stage of giving rise to a significant improvement in our financial position as a government. In regard to negotiating, Mr. Speaker, we have always said that we will keep in place the collective bargaining process, unlike some jurisdictions where they brought in restraint measures and eventually abandoned temporarily the collective bargaining process.

We have not done that, we still have collective bargaining in place: we have said that we are quite willing to entertain bargaining in the non-monetary areas and there are many of those. Many items in contracts between government and its employees have nothing whatever, essentially, to do with wages. The workers in this Province have a legitimate concern December 19, 1984 R6337

in those areas, and we said that we will do nothing to interfere with this ability to bring those concerns before us and that we will do what is in our power to meet those legitimate concerns. So we will continue with that bargaining process in that way but we have not at this point in time said that we will lift the freeze that our financial position has forced upon us. MR. SPEAKER (Russell): The bon. Leader of the Opposition on a supplementary. MR. BARRY: Would it be fair then, Mr.

Speaker, for the people of Newfoundland to assume that if the freeze is lifted the week or two weeks before the next provincial election that this will be merely another cynical gambit by the minister and his colleagues in an attempt-to buy their way back into power with the taxpayers' own dollars? Would it be fair to say that there is no prospect of the freeze being lifted this corning year? Or, Mr. Speaker, would the signing of an offshore agreement be sufficient in order to have government raise the freeze with respect to public service employees?

Would this also be part of the next provincial election campaign? I am just making a few enquiries here, you know. MR. SPEAKE R (Russell): The hon. Minister of Finance. DR. COLLINS: Mr. Speaker, if my memory serves me, this administration was elected into office I think in April, 1982, so under the constitution of the Province, and we go by the Sri tish tradition, I think our term runs at least until L6338 April , 1987 and possibly until the Fall of 1987. So I would say that the likelihood of the freeze lasting up until, say, the Fall of 1987 is very small.

It is a hypothetical question but I think I can assure the Leader of the Opposition (Mr. Barry) that before we have to have an election in this Province it is likely that the present freeze will be lifted in some fashion or form. In regard to the offshore agreement, we have to maintain - MR. MARSHALL: Ask the Leader of the Opposition (Mr. Barry) if he supports the offshore agreement. DR. COLLINS: The bon. Leader of the Opposition did not say whether he supports the present agreement.

He seems to have a tremendous fear about it so I presume he must think that it has good aspects to it from the point of view of the fortunes of this administration but he did not say whether he supports it or not. Mr. Speaker, I think I must get in on this answering of questions. But anyway, in terms of the offshore agreement our financial position is related to our current expenditures and revenues.

If the offshore agreement brings about a significant improvement in our revenues it could have an influence on the wage freeze; if it does not, or until it does bring about a significant improvement in its own right, I do not think that will make any difference to our keeping in place the freeze or not. MR. NEARY Mr. Speaker. MR. SPEAKER (Russe1.1 )": The hon. member for LaPoile. December 19, 1984 R6338

"' MR. NEARY: Mr. Speaker, I wonder if the han. Minister of Mines (Mr. Dawe) is coming back to answer a couple of question? I had one for the Minister of Social Services (Mr. Hickey) and the Minister of Mines (Mr. Dawe) but I will go to the bon. gentleman who is responsible for wildlife. On 19 November the hon. gentleman made a statement that an extra-ordinary investigation was being made on the West Coast by wildlife officials. They were conducting an investigation into poaching of moose, I believe, in and around the Corner Brook area.

Now could the bon. gentleman tell us if the ·investigation is complete, is finished and what the wildlife officials uncovered in that extra-ordinary investigation that the minister announced was taking place? MR. SPEAKER (Russell): The hon. Minister of Culture, Recreation and Youth. MR. RIDEOUT: Hr. Speaker, just let me say to the hon. gentleman at this point in time that the investigation is still continuing. As a matter of fact I had a briefing session with some of my officials only yesterday on that very matter. The investigation is still continuing. Staff of my department and the RCMP are involved.

At the present time there have not been any charges laid but the investigation is still very active and still continuing. MR. NEARY: Hr. Speaker, a supplementary. MR. SPEAKER (Russell: The bon. member for LaPoile on a supplementary. L6339 MR. NEARY: I do not wish for the han. gentleman to divulge the details of the investigation but it must involve something out of the ordinary. Are we talking about a large number of moose or caribou? Just precisely what is the nature of the investigation? I am not asking the bon. gentleman to give us the details, but what is the nature of it?

It obviously must be something out of the ordinary when the han. gentlemam made a statement, a public. announcement, that this investigation was not a routine investigation. MR. SPEAKER: The bon. Minister of Culture, Recreation and Youth. MR. RIDEOUT: Mr. Speaker, the han. gentleman is correct, it is not an ordinary investigation because of the number involved. There were thirty-nine moose found within a very confined area of the West Coast and those moose had been snared. They were not shot, they were snared basically by using leg snares.

The animals obviously went through a tremendous torture period because as han. gentlemen may know, if you snare a moose around the neck it is one thing, that is bad enough, but if you catch a wild animal in a leg snare then it takes days and days, and sometimes even weeks, according -to the advice I have had from my officials, for that animal to die. As a matter of fact some of the photographs which I presented to the public in that press conference I held in Corner Brook showed legs of the animals that were detached and left in the snare and the animals were gone.

So it is an extra-ordinary investigation and it is a very extra-ordinary set of December 19, 1984 R6339

circumstances. The bon. gentleman is correct and all I can say is the the investigation is still continuing and is very active. MR. NEARY: Mr. Speaker. MR. SPEAKE R (Russell): A final supplementary by the bon . member for LaPoile. MR. NEARY: The bon. gentleman mentioned moose. I presume there were only moose involved, no caribou? MR. RIDEOUT: No. MR. NEARY: Mr. Speaker, could the bon. gentleman tell us if this is the first case of this sort of snaring moose in the Province? How widespread is this problem throughout Newfoundland and Labrador? MR.

SPEAKER (Russell): The bon. the Minister of Culture, Recreation and Youth. MR. RIDEOUT: Well, Mr. Speaker, I suppose to attempt to answer that question in a definitive way would be kind of hypothetical. I do not know, and I do not have any advice as to how widespread it is. In this particular case we think it is an isolated incident. We think that there is a group or groups involved. We have evidence to suggest that there is probably selling of meat going on and that kind of thing.

From my own personal knowledge, as an individual who was born and raised and grew up in rural Newfoundland, I suppose there have always been some incidents of poaching. L6340 MR. NEAR Y: No, I do not mean that, I mean using the snares. MR. RIDEOUT: I have never heard tell of leg snares, by the way, I can say to the bon. gentleman. I have heard and I have had the unfortunate experience myself of running into neck snares in the woods, and it is very frightening when you run into that cable just strung between a couple of trees. But I have never heard tell of leg snares.

I do not know and I have no advice whether it is widespread. We do not think it is. We think it is just an isolated incident in a particular part of the Province. But let me say, Mr. Speaker, we are very, very concerned about it and we have made an appeal to the general public on the West Coast to help us out in our investigation. And I must say as minister I am very pleased with the response that we have gotten from the citizens of the West Coast.

And the other part of it is that the ordinary individual out there in those management areas, unless we can find and prosecute and stop this kind of thing, then it is going to have an impact on the number of licences that might be available to the ordinary individual who lives in that part of the Province. MR. NEAR Y: Were any of the moose alive when they found them? MR. RIDEOUT: The last couple we found were alive, yes. MR. SPEAKER: The bon. member for Torngat · · · · Mountains. December 19, 1984 R6340

MR. WARREN: Mr . Speaker. I have a question for the Minister of Education (Ms. Verge) . I would like to ask the -Minister of Education is it a policy in her department to impose a fee on all Level 3000 courses offered in high schools throughout the Province? MR. SPEAKER (Russell): The hon. the Minister of Education. MS VERGE: Mr. Speaker. there is no such policy. This government provides educational programmes from kindergarten through Grade Xll for all students without a tuition charge.

However. for Level 3000 courses in the new senior high school programme. public examinations are required. and there is a fee charged for those public examinations in the same way as previously there was a fee charged · to students for Grade Xl public examinations and before that. when many of us went to school, there was a fee charged for what was then called the CHE exams. MR. WARREN: A supplementary. Mr. Speaker. MR. SPEAKER: A supplementary, the bon. the member for Torngat Mountains. MR. WARREN: Mr.

Speaker, there was a $5 fee previouslybut now I think for Level 3000 courses students are required to pay a fee of $24. Can the minister confirm if that is correct or not? MR. SPEAKER (Russell): The hon. the Minister of Education. MS VERGE: Mr. Speaker, I cannot recall L6341 offhand examination can take provide the what the public fee is. However, I that as notice and information. SOME HON. MEMBERS: Oh, oh! MR. SPEAKER (Russell): Order, please! MS VERGE: Mr. Speaker, I will have to take as notice the matter of how much the fee is for public examinations. I cannot recall offhand. MR. WARREN: Mr.

Speaker, a supplementary. MR. SPEAKER (Russell): The hon. member for Torngat Mountains, a supplementary. MR. WARREN: Mr. Speaker, a final supplementary to the minister. Why would the minister's department to institute a $24 fee on Level 3000 courses when these exams are corrected by teachers in the school in the school year? The exams are not sent to an examination board. They are administered and corrected by the students own teachers in their own classrooms. So why would there be a $24 fee charged to the students? I think there is something wrong. MR. SPEAKER: The hon. the Minister of Education. MS VERGE: Mr.

Speaker, well, first of all, I do not think the public examination fee for one public examination is anything like $24. I will have to check to give the House the exact amount. And, secondly, public examinations, by definition, are set by the December 19, 1984 R6341

Department of Education and corrected away from the school by a panel of markers who are employed by the Department of Education. Under the system of evaluation for Level 3000 courses, the public exam counts for half of the final mark and the other half of the mark is determined by in-school evaluation and conducted throughout the school year by the teachers who are dealing directly with the students. MR. SPEAKER (Russell): The han. the member for Menihek. MR. FENWICK: Thank you, Mr. Speaker.

My question is going to sound a little bit repetitious, but I have been having a hard time getting a straight answer, and I was hoping the Premier would be in the House today because I wanted to direct it specifically to him: Over the last couple of days we have been arguing about whether or not the PC proposal on offshore oil is better or worse than the Liberal one. And on Monday the Premier, in replying to the member for LaPoile (Mr.

Neary) said, and I quote from Hansard, 'I will invite the hon. member to come to my office tomorrow morning at nine o'clock so I can show him the final documents from the Liberal Government in Ottawa and the documents that we have from the PC Government in Ottawa.' MR. MARSHALL: Would you repeat the last words? MR. FENWICK: Okay, I will repeat it: 'So I can show him the final documents from the Liberal Government in Ottawa and the documents that we have from the PC Government in Ottawa' .

Now since then I have L6342 repeatedly requested the Premier's office and the House Leader's office for access to that particular document, and all I have received is a letter from the federal Leader of the Opposition (Mr. Mulroney) dated back in June of this year. My question to the House Leader (Mr. Marshall) since we have already discussed this today, is his decision not to allow me access to that particular document the final word or is the Premier still running the Province around here? MR. SPEAKER (Russell): The hon. the President of the Council. MR. NEARY: We will give you all the Liberal material. MR.

FENWICK: I have it. MR. MARSHALL: Mr. Speaker, the problem is what is the final document? Now when the bon. ·Premier said he would give the document, I think he sent to the bon. gentleman's office, as he sent to everybody's, as a matter of fact everybody in Newfoundland saw the letter the member referred to during the last federal election and it had a very marked affect on the results. Can you imagine the effect the final agreement is going to have on the next election? But, Mr. Speaker, what he sent to the han. gentleman was the letter of June 14, signed by Mr.

Mulroney, which represents an undertaking that when the then Leader of the Opposition, who is now the Prime Minister of Canada, formed the government, he would enter into an agreement on these various points. Now since then we December 19, 1984 R6342

:.1 have entered into negotiations with the federal government for the purpose of putting into formal form that particular agreement. I think it was Mrs. Carney who indicated in an interview that last week we reviewed a document which contains some sixty-two clauses, and we agreed in principle that there had to be certain changes and modifications and what have you, and whether it washes out at seventy-two clauses or sixty-five clauses or sixty-one or sixty-two clauses. So I think the bon. gentleman would realize that it would not be appropriate to table at the present time the document that Mrs.

Carney and I were discussing the other day because there have to be certain refinements to it and that is going to be the purpose of the negotiations. So it is an intergovernmental document in the process of negotiation.

But this I will give the hon. gentleman an undertaking on: When the document is signed, which we expect to be sooner than later, which will give effect to the agreement of June 14, which will give Newfoundland the same rights to establish and collect taxes as Alberta, to give Newfoundland the same rights to develop the resource offshore as Alberta onshore, to give us an equal say in management, which will give us the right to determine the mode of development, which will make reference to equalization payments and local benefits and all the other beneficial things that are contained in that agreement, the hon. gentleman, as well as all the populace of Newfoundland, will get it.

But, in the meantime, obviously I do not think the bon. gentleman should expect to receive the agreement that is subject to L6343 discussion at the present time because there probably will be modifications to it until the final agreement is signed. In the meantime, if he looks at the letter of June 14 that he has a copy of, he will get a preview of what that agreement contains. It is really something for the people of Newfoundland. And I do not know whether the hon. gentleman sent anything to the hon. member for Menihek (Mr.

Fenwick) as to the Liberal position, but if the hon. the Premier sent nothing to the hon. gentleman as to the Liberal position prior to the change of government, it would have been an exact indication of what the Liberal Government offered us. It was nothing, certainly next to nothing. SOME HON. MEMBERS: Hear, hear! MR. FENWICK: A supplementary, Mr. Speaker. MR. SPEAKER (Russell): A supplementary the hon. the member for Menihek. MR.

FENWICK: If the government is not willing to either give me a copy of the document or to table a copy of the document, then is the government willing to do the minimum that the Premier outlined in Monday's statement when he said 'so that I can show him the final documents from the Liberal government in Ottawa and the documents we have from the PC government in Ottawa' ? There was no PC government last June. It has got to be the PC documents that we have and it is the latest ones. All I wish to do is go and have a look at them. MR. MARSHALL: December 19, 1984 R6343

Mr. Speaker. MR. SPEAKER (Russell): The hon. the President of the Council. MR. MARSHALL: Mr. Speaker, what the hon. the Premier was referring to when he referred to the final document was really the letter of June 14 which was given. MR. FENWICK: There was no PC government then. MR. MARSHALL: You know, that really is the final document because the Prime Minister of Canada is a man of his word, the Premier is a man of his word, and that particular letter and the acceptance of it are going to really embody the agreement itself.

The agreement has been expanded to incorporate certain technicalities and certain other details that are necessary to give full and complete effect to that letter of June 14. So when the hon. would show gentleman said he them the final document, in effect he showed them the final document when he showed him that particular letter.

In the meantime, I do not think the bon. gentleman, if he really reflects on it, would seriously expect me to give to him that document that formed the basis of the discussions and has formed the basis of the discussions because the finalization of the terms are presently under discussion.

Obviously you do not negotiate in public, but this government will be very happy to give to the hon. gentleman, and all residents of Newfoundland, the final document when it is signed and when we can show to the people of Newfoundland that we have -at last a document that is going to give us the same 16344 rights to those resources Alberta has to its resources. MR. NEARY: Mr. Speaker. MR. SPEAKER (Russell): The hon. the member for LaPoile. MR. NEARY: as I have a couple of questions for the Minister of Social Services.

I realize time is running out so I am going to have to ask him two or three questions piled into one. The hon. gentleman made a statement, believe on August 9, that he had received the report of the advisory board on day-care services in the Province, violence against women and teenage pregnancies. I believe the report indicated that with teenage pregnancies Newfoundland has the highest incidence across Canada. I am not going to ask the hon. gentleman the cause of teenage pregnancy being the highest in Canada.· MR. YOUNG: It is the birds and the bees. MR. BARRY: It is the lack of work. MR. NEARY: Mr.

Speaker, could the hon. gentleman tell the House if his department has had time to study this report and what action has been taken on the report involving these three important areas, day-care services, violence against women and teenage pregnancy in this Province? MR. HICKEY: Mr. Speaker. MR. SPEAKER (Russell): The hon. -· the Minister · of · Socia·! Services. December 19, 1984 R6344

MR. HICKEY: Mr. Speaker, I do not recall making the statement that I had received the report that the hon. gentleman refers to. MR. NEARY: Maybe it was the Minister of Justice (Mr. Ottenheimer). MR. HICKEY: However, I am aware that there has been a considerable amount of work done in the three areas that he refers to. . In terms of day _care services and homemaker services, that one division, there is something in the order of fourteen different committees functioning.

There are committees within the department involving the community in all three sectors that he refers to, in terms of day care, in terms of violence against women and in terms of teenage pregnancies. I have not received a final assessment on those issues that he refers to from my staff. The best I can tell him, Mr. Speaker, is that there is an allegation that this Province unfortunately has the highest incidence of teenage pregnancies in Canada. I am not confirming that as being an accurate statement. I will say that if it is not the highest, certainly it is among the highest.

As regards to what we are doing about it, he said he did not want to get into the cause, but there are a number of causes for it, I suppose. Certainly one is sex education within the school system. That is an issue which has prompted a great deal of discussion over the years but no single factor, as I recall, has been pinpointed as to the cause. The only thing I can tell the hon. gentleman is when I get a final report from my officials I will be happy to convey to him the findings and L6345 whatever information I can supply at that time. MR. SPEAKER (Russell): The time for the Question Period has expired.

Answers to Questions for which Notice has been Given MS VERGE: Mr. Speaker. MR. SPEAKER (Russell) : The hon. the Minister of Education. MS VERGE: Mr. Speaker, I now have the answer to the question directed to me earlier this afternoon by the member for Torngat Mountains (Mr. Warren). The current fee for one public examination is three dollars. Twenty-four dollars may be the approximate total students have to pay for all the public examinations they do over the course of their seni~r high school programme ·on average. Twenty-four dollars would be the total for eight courses. Orders of the Day MR. MARSHALL: Mr.

Speaker, I move the House into Committee of the Whole on Supply and at this time also ask that this Committee be also resolved for the purpose of considering the bills that are there in Committee stage. MR. SPEAKER (Russell): Is it agreed to move the House into Committee on Motion 3, Supplementary Supply, and other bills that are on the Order · Paper for Committee stage? December 19, 1984 R6345

MR. NEARY: Mr. Speaker. MR. SPEAKER (Russell): The hon. the member for LaPoile. MR. NEARY : Mr. Speaker, I do not understand what the procedure is now because how can you go into Committee of the Whole on Supply and do bills at the same time? Are you asking leave to do it? MR. MARSHALL: Perhaps I should not have done it because I gave the bon. gentleman a tool the next time, if he is here the next time, to get up and object, but Committee of the Whole is Committee of the Whole.

I just wanted to say we will go into Committee of the Whole, we will consider Supply, and with the consent of the House if that is necessary - and that is a big if - we will consider items 3 to 6 so we do not have to raise the Committee. MR. NEARY: Are you asking leave? MR. MARSHALL: I am supplicanty and humbly asking leave. On motion, that the House resolve itself into Committee of the Whole on Supply, Mr. Speaker left the Chair. Committee of the Whole MR. CHAIRMAN (Aylward): Order, please!

I understand we are doing Supplementary Supply, Motion 3. - L6346 I understand that we are going with the ten minute rule the same as Standing Order 118. Agreed? SOME HON. MEMBERS: Agreed. MR. CHAIRMAN: It has been agreed. The hon. the member for Torngat Mountains. MR. WARREN: Mr. Chairman, I may be a little out of order, but since we may only be here a few more hours or a few more days, I have two copies of a book entitled A Word In Time and I have been asked by the author, Mr.

Ronald Clarke, who, incidentally, was born in Chance Cove, Tririity Bay, my hometown, if I would kindly present a copy to the Premier and to the Leader of the Opposition (Mr. Barry), so if the Pages would be kind enough to pass them along. SOME HON. MEMBERS: Hear, hear. MR. WARREN: Mr. Chairman, it is a very worthwhile book, very interesting and very educational. MR.

CHAIRMAN: We are on Bill No. 34 and the resolution pertaining to Bill No. 34, "An Act For Granting To Her Majesty Certain Sums Of Money For Defraying Certain Expenses Of The Public Service For The Financial Year Ending The Thirty-First Day Of March One Thousand Nine Hundred And Eighty-Four And For Other Purposes Relating To The Public Service". Resolution December 19, 1984 R6346

"Be it resolved by the House of Assembly in Legislative Session convened, as follows: That it is expedient to introduce a measure to provide for the granting to Her Majesty for defraying certain expenses of the Public Service for the financial year ending the 31st day of March, 1984, the sum of one hundred and thirty-four million six hundred and fifty-one thousand seven hundred dollars ($134,651,700). MR. NEARY: Will we ever have a budget again? MR. MARSHALL: Mr. Chairman. MR. CHAIRMAN (Aylward): Order, please! The hon. the President of the council. MR. MARSHALL: Mr.

Chairman, I want to point out that the last time I heard people talking about whether we would have a budget it was Mr. Stirling, I believe, and not Mr. Geoffrey Stirling but Mr. Len Stirling. Mr. Chairman, what happened was there was a budget and the hon. gentleman evaporated. Now the hon. the Leader of the Opposition (Mr. Barry), significantly enough, asked the same question today but when I asked him he did not want to repeat it so he got the previous leader to ask it, so we are going to get rid of both of them this time, Mr. Chairman. MR. NEARY: Wishful thinking.

Motion, that the Committee report having passed the resolution and a bill consequent thereto, without amendment, carried. MR. MARSHALL:· Order 3. L6347 A bill, "An Act To Provide For The Calling Of Tenders For The Execution Of Public Works And The Acquisition Of Goods And Services By Government Funded Bodies". (Bill No. 40). On motion, Clause 1, carried. MR. CHAIRMAN (Aylward): Shall Clause 2 carry? MR.. MARSHALL: Mr. Chairman. MR. CHAIRMAN: The hon. the Leader of Opposition. MR.. MARSHALL: the Mr. Chairman, there are certain amendments. Have the hon. members opposite received them? SOME HON. MEMBERS: No. MR.

MARSHALL: They are all fairly simple. The Clerk has gone to get them. I regret this. They should have all been circulated before. Paragraph (

h) of Clause 2 of Bill No. 40 is to be deleted and the following substituted: '"Services" do not include legal, engineering, architectural, accounting, land surveying, banking or insurance services or other services that provide the opinion of a professional'. MR. BARRY: Land surveying, banking - MR. MARSHALL: No, legal, engineering, architectural, accounting, land surveying, banking or insurance services. MR. NEARY: December 19, 1984 R6347

How do you manage that, through a fee for service or what? MR. MARSHALL: The reason for the exemption of this type of service that this type of service happens to be of a nature where it is subjective rather than an objective judgment mainly as to the quality of the services themselves. So, you know, it was provided in the bill itself. The only addition to the numbers that were provided or the wording that was provided when the bill was put to second reading are the words, 'land surveying' . We have added land surveyors as well as banking and insurance services. MR. BARRY: To that amendment, Mr. Chairman. MR.

CHAIRMAN (Aylward): The bon. the Leader Opposition. MR. BARRY: of the Mr. Chairman, I would like to mention to the minister that I have had at least one architect come into me and indicate that he has not had a government job and he has not provided a service on a government project since 1969 or 1970. MR. NEARY: Probably since January 18, 1972. MR. BARRY: Now this person is doing fine work in the private sector.

He has had commissions by private individuals and he has performed and they are still looking for his services in the private sector but somehow he is unable to make it to any project in which government is involved. I would like to ask the minister: Is there a black list, whether because of partisan politics or whether because of L6348 other reasons, on the part of the Department of Public Works? maybe the Minister of Public Works (Mr. Young) can answer that? Why is it that we have this particular architect unable to get a job, a commission from government?

And how many others do we have who have not been able to provide services? Would the minister tell us whether there is any policy with respect to moving the work around or is the work allocated to certain specified individuals on all occasions? Do they have a preferred list?· MR. CHAIRMAN (Aylward): The bon. the .Minister of Public Works. MR. YOUNG: Mr. Chairman, we have no preferred list, we have no black-list. The Department of Public Works cannot give work to every architect in the Province.

We have a committee which asks for proposals, and the proposals are recommended and the people are recommended so I say we cannot call tenders for architect work, but if the committee feels they are qualified to do the work they usually get the tender. We also try to share it out by areas. We usually try to get an architect in Corner Brook, st. John's or wherever they are located. MR. TULK: Go on! You are dishing it out to your buddies! MR. YOUNG: I would say if the bon. gentleman has any hint that there is a black- list or any list in the Department of Public Works, I would like for him to pass it along to me.

HR. CHAIRMAN (Aylward): December 19, 1984 R6348

The hon. the Opposition. MR. BARRY: Leader of the I will see if this individual wants his name used and if so I will pass it on to the minister. I wonder if the minister could indicate just how many architects have been used over the last five years and how many have not? There are not that many architects' firms in the Province, and I would like to know whether the work, in fact, has been shared around. Have all of these firms gotten work from government or are there firms that have not gotten work? MR. CHAIRMAN (Aylward): The hon. the Minister of Public Works. MR. YOUNG: Mr.

Chairman, I could not say that every firm in -the Province has gotten work from the Department of Public Works because naturally - MR. TULK: That is for sure! MR. YOUNG: they must get it from the private sector and elsewhere. There is some work done that the Department of Public Works has nothing to do with. I mean, there are other departments. But I am sure I can give the hon. gentleman a list of all the work done.

I do not know if it is in the annual report of the Department of Public Works, but I would gladly supply the hon. gentleman with the names of architects, and we do publish all of the tenders that have been awarded. I feel sure it would be no trouble for me to get it. MR. TULK: L6349 So it is a monopoly. monopoly. MR. YOUNG: Nobody has a monopoly in the Department of Public Works, Sir . MR. CHAIRMAN (Aylward): Shall Carried. the amendment Shall Clause 2, as carry? Carried. Shall Clause 3 carry? MR. BARRY: carry? amended, Not too fast now, Mr. Chairman! MR. MARSHALL: On Clause 3.

On Clause 3, the bon. the President of the Council. MR. MARSHALL: I will explain this amendment because I realize the bon. gentleman just received it. Subclause (3) of Clause 3 of the bill I propose be amended by adding after the words "that this Act does apply" the words "and tenders are required".

Subclause three would then read: 'In relation to such prescribed goods and services that are of such a nature that in the normal course of events they are tendered for less than five thousand dollars, the Lieutenant-Governor in Council may prescribe that this Act does apply and tenders are required, notwithstanding paragraph (

a) of subsection (2).' It was just the omission of the words 'and tenders are required', because to say that the act applies, as the Lieutenant-Governor in Council intends to do in the regulations, certain classes of services and goods below $3,000, we felt it December 19, 1984 R6349

should be elaborated to put in the words 'and tenders are required' to make sure that tenders will be required in those instances. MR. CHAIRMAN (Aylward): Shall the amendment carry? MR. BARRY: Mr. Chairman. MR. CHAIRMAN: The bon. Opposition. MR. BARRY: the Leader of the With respect to

Section 3, this is one of the areas where, I would submit to the minister, too much discretion MR. NEARY: Right on! MR. BARRY: - is being set out.

Section 3 (

b) states: "where the estimated cost of the work or acquisition is equal to or less than thirty thousand dollars, and it appears to the head of the government funded body that in view of the nature of the work or acquisition it is not advisable to invite tenders." Now, I would submit, Mr. Chairman, that we are seeing the bureaucrats get their way. They have regularly been fighting a rearguard action with respect to public tendering, the engineers and so forth, of Public Works.

They just want to get the job done as quickly as possible, as efficiently, they think, as possible, and they do not hold too much with all this nonsense of public tendering. DR. COLLINS: There is an expense, though, to the tendering process. MR. BARRY: L6350 Yes, sure there is an expense to the tendering process. But this gives a very large gap, a gap big enough to drive a truck through here, and I think that the Government House Leader (Mr.

Marshall) has been worn down by the bureaucrats, they have finally gotten to him, and the pride and joy of his political existence, the Public Tendering Act, has been emasculated, neutered, Mr. Chairman. And right through, I think there are about eleven or twelve places, we have this type of discretion, wide, wide discretion now given. And we all know, Mr. Chairman, when we have discretion, it can be exercised either for the right reasons or for the wrong_ reasons, and it is often very hard to tell, it often goes unnoticed, what the real reason is.

So I do not think we can support that particular clause in the Public Tendering Act, Mr. Chairman, and we would suggest that that clause be deleted. I so move, seconded by the member for LaPoile (Mr. Neary). MR. MARSHALL: Well, there is amendment that has already an to be dealt with first, I think, Mr. Chairman. MR. BARRY: Well, we wi 11 deal with that, and then we will deal with the other. MR. MARSHALL: Mr. Chairman. MR. CHAIRMAN (Aylward): The hon. the President of the Council. MR. MARSHALL: I would say the way to deal with it is for the bon. gentleman to vote against the amendment.

But, just a few words with- respect to what the bon. gentleman says: December 19, 1984 R6350

There is a certain limit where it is impractical to call tenders. SOME HON. MEMBERS: Oh, oh! MR. MARSHALL: Five thousand dollars is the amount that has been set but, as far as the government is concerned, in instances where it is practical below that level, we are going to make regulations to apply it to the broadest extent possible. MR. NEARY: Oh, yes. MR. MARSHALL: Now, the bon. gentleman was a member of this administration at one particular time.

The hon. gentleman has still to explain satisfactorily why he is on the other side of the House, but certainly not one of the statements of his reason~ for crossing the House was the way in which the public tendering system was operated by this government. And rather than the Public Tendering Act being emasculated by this bill, Mr. Chairman, despite the fact that I drafted the other one and, you know, pride requires me to say that the other one should be better than anything that occurred in the world, there is the possibility of a certain amount of improvement. And we had a Commission that reported.

We had the Mahoney Commission - not the Mahoney Commission, I will call it the Royal Commission. The Royal Commission reported. We have implemented every one - I think the hon. the minister would agree - every one of the recommendations. And this is a strengthening of the act. I will not get on to the spurious reason why the hon. gentleman crossed the L6351 House, but certainly he did not cross the House on the basis of the public tender practice.

I would think he would have to give us _ the credit that what we are doing and what we have done in government, and we will continue to do in the future, is to strengthen the public tender process in this Province. The bon. gentleman in yawning. I can understand the bon. gentleman yawning because he, contrasted with the Leader of the Opposition (Mr. Barry) , did not put a whole lot of credence in the public tendering system. Really, what this particular amendment does, Mr. Chairman, and what it is going to do is it is going to immeasurably strengthen the public tender system.

It is going to give the Cabinet the right, which it will do in cases where it is necessary under $5,000, and we will apply that to the broadest extent possible; but the reason for doing it by Order in Council is that it would be impractical otherwise. You have to have a certain limit, and the limit is the exception, but we are not going to let the exception be the rule. MR. YOUNG: Mr. Chairman. MR. CHAIRMAN (Aylward): The bon. the Minister of Public Works. MR. YOUNG: This clause, 3 (b) , Mr. Chairman: In 1974 when the tender was called MR. NEARY: What about when they start doing it in yen? MR.

YOUNG: December 19, 1984 R6351

No. Mr. Chairman, what I am saying is we have checked in all the other provinces. In the old act in 1974 it was $15,000; today, in 1984, $30,000 is much less than it was then, Sir, and that is why this clause is being amended. AN HON. MEMBER: (Inaudible). MR. CHAIRMAN: Order, please! Shall the amendment to Clause 3 carry? All in favour 'Aye' . SOME HON. MEMBERS: Aye. MR. CHAIRMAN (Aylward): Contrary, 'Nay'. SOME HON. MEMBERS: Nay. MR. CHAIRMAN: The 'Ayes' have it. Shall Clause 3 as amended carry? All those in favour, 'Aye'. SOME HON. MEMBERS: Aye. MR. CHAIRMAN: Contrary, 'Nay' . SOME HON. MEMBERS: Nay. MR.

CHAIRMAN: In my opinion, the 'ayes' have it. Shall Clause 4 carry? The bon. Leader of the Opposition on Clause 4. L6352 MR. BARRY: We have the same clause here in 4(

b) being applied to rental space; where the space is equal to less than $30,000 in value there is a discretion given. That, again, is a big loophole, a big gap in the Act, and it is being gutted, Mr. Chairman. MR. NEARY: There is no Public Tendering Act anymore Mr. Chairman. MR. BARRY What we are seeing, Mr. Chairman, is the erosion away of the principles which these bon. members opposite were supposedly fighting for, especially the Government House Leader (Mr. Marshall), and I must say it is an example of power corrupting.

In a way, I suppose, we should be delighted to see this loss of principle because it is what happens whenever there is a dying administration, that is exactly what you see. In the dying days of an administration, all the fine principles which it held when it initially went into power all start to be eroded away. And bon. members stand up and they give all sorts of wonderful reasons and excuses for it, pious reasons, all sorts of logic and the changing value of the dollar and so forth. Mr.

Chairman, what it boils down to is that the Public Tenders Act is no more, the Public Tenders Act as drafted by the Government House Leader, the member for St. John's East. When these amendments go through the Public Tenders Act is no more. We are back to the wild and wolly days, Mr. Chairman, of government patronage and pork barreling. MR. CHAIRMAN (Aylward): The hon: Minister of Public Works. December 19, 1984 R6352

MR. YOUNG: There again, Mr. Chairman, the Public Tender Act will be around after the next election but the bon. member probably will not. Mr. Chairman, we call tenders for all space over 1000 square feet or $5000. We have been doing that since the Mahoney Report. Mr Chairman, if we need space and call tenders, today space downtown or anywhere in St. John's is $18.00 to $23.00 a square foot. MR. NEARY: Yes, provided you are a PC. MR. CHAIRMAN: Order, please! MR. YOUNG: In 1974 it was $7.50 to $9.00, good space.

The space we got in Atlantic Place down there was $11.50 and today if you want space downtown or anywhere in St. John's it is $18. 00 to $23. 00 a square foot. MR. NEARY: Tell us about the Murray Premises. MR. YOUNG But what this does for us, Mr. Chairman, is not watering down the Act at all. If a department is down in a certain office space and they want to expand, want 1500 square feet or 2000 square feet of space, we can go and negotiate with that landlord to extend another 2000 feet up to $30, 000.

If we go by the Act, we would have one part of the department down on Water Street and the other part probably on Topsail Road. So that is all we are doing, Mr. Chairman, trying to save money for the taxpayers. MR. CHAIRMAN (Aylward): The bon. President of the Council. L6353 MR. MARSHALL: I want to point out again that the bon. Leader of the Opposition (Mr. Barry) supported this type of legislation. He did not cross the House because of the tendering practices. MR. BARRY: I supported a real Public Tenders Act. MR.

MARSHALL: He crossed the House, but I am not going to talk about that at this late time, I will reserce that when I refer to his demise from the political scene in the House in the future. All I will say is that the previous act did not cover rental space at all. The bon. gentleman did not point out that the previous act did not cover rental space as such, and it provided a way in which those who wished to twist around the act before, unfortunately, twisted it around.

So this is a recommendation of the Mahoney Commission to include rented space and it is an inclusion of rental space within the bounds of practicality. It is an excellent provision and one that I cannot understand any bon. gentlemen voting against. MR. CHAIRMAN (Aylward): Order, please! The bon. Leader of the Opposition. MR. BARRY: I would like to ask the Minister of Public Works (Mr.

Young) if he could indicate to the House the number of thousands of square feet of office space that is presently being taken up by government downtown that will be lost to the private sector when the new building, across the way here, opens. Does the minister have any indication of (

a) the number of December 19, 1984 R6353

thousands of square feet? (

b) what government is paying for that now, and, (

c) any idea of what impact that is likely to have on the few businesses that are still hanging on by their fingernails because of the economic recession, because of the desperate state of the economy that is to a large part due to hon. members opposite? Is this going to be the final straw that is going to send dozens of additional businesses under? Does the minister have any idea at all? MR. CHAIRMAN (Aylward): The hon. Minister of Public Works. MR. YOUNG: Mr. Chairman, I do not think it is going to put anyone under or anything like that.

I tabled in the House last year, I think, every inch of space that we lease in the Province. If the hon. member wants to go and find out how much is downtown and stuff like that, he can go and do it. I can probably get it but it will take time and cost money to get how much space is downtown. It is all in this but I do not know how much it is. MR. BARRY: So you have no idea what it is going to do to the private sector? You have no idea? You do not care? MR. CHAIRMAN (Aylward): Order, please! The hon member for LaPoile. MR.

NEARY: Could the hon. gentleman tell the House how many contracts will have to be broken and what will that cost the public treasury if they have to break contracts to move offices into the new building? How many contracts will they have L6354 to break? MR. CHAIRMAN: The hon. Minister of Public Works. MR. YOUNG: None, Mr. Chairman. We will be breaking none. It will be all geared with the rental spaces. Most of our rental space is from three years plus two or five years plus three, and at Atlantic Place we are on that scale now.

We are on the five years plus three optional and we are working on the optional in most of the St. John's rentals now. On motion, Clause 4, carried. MR. CHAIRMAN (Aylward): Shall Clause 5 carry? MR. BARRY: Mr. Chairman. MR. CHAIRMAN: The hon. Leader of the Opposition. MR. BARRY: In 5(

b) and 5(c), 'In the case of a contract of a value equal to or greater than one hundred thousand dollars but less than five hundred thousand dollars, a change order or extension does not exceed the value of fifteen thousand dollars or ten per cent of the value of the original tender, whichever is greater; (

e) in the case of a contract of a value equal to or greater than five hundred thousand, a change order or extension does not exceed the value of fifty thousand or five per cent of the value of the original contract, whichever is greater.' I mean, it is unlimited, 'whichever is greater, ' or 'does not exceed 5 per cent of the value of the contract.• Well, that 5 December 19, 1984 R6354

per cent of the value of the contract could be millions of dollars we are talking we are talking about here. MR. MARSHALL: It is all in relation to the amount involved. MR. BARRY: Yes, it is all in relation to the amount involved. Now, _ Mr. Chairman, we go on record as being opposed to this third

section which has the effect of gutting the bill The bill has a fine objective, but, Mr. Chairman, the amendments that are being proposed are watering down to the extent of gutting the original Public Tenders Act which ha.s done yoeman service in this Province Mr. Chairman, we are seeing government falling back to the bad old days of giving themselves as much discretion as possible, and that discretion, Mr. Chairman, you can be sure is going to be abused. If the discretion is there it will be abused. MR. CHAIRMAN (Aylward): Order, please! The hon. President of the Council. MR. MARSHALL: I must respond, Mr.

Chairman. That is not so, there is a limitation. When you have a contract for millions of dollars, there are sometimes very legitimately, cases where change orders have to be issued to extend the contract for some extra work that was not contemplated, or extra cost. You have to be practical about it and you do it in relation to the value of the contract. So it is $50,000 or 5 per cent, so there is a limit on it. If it is $1 million, 5 per cent of $1 million is $50,000, if L6355 it is $2 million it is $100,000.

So it is all in relation to the contract and it is done in accordance with the recommendations of the Mahoney Commission, and it is done in relation to practicality. MR. NEARY: You are now cannibalizing the act. MR.. MARSHALL: No, we are not cannibalizing the act. What we are doing is we are making the act even stronger than it was before because practice had shown that there were ways in which loopholes could be found. The hon. gentleman there opposite was the first one on the other side of the House, with a former, former member - I do not even want to mention his name, Mr.

Chairman with another member of this House who has since been defeated in federal politics, let us put it that way, who used to talk day after day with the hon. gentleman about loopholes in the act. This was a recommendation of the Mahoney Commission and it is a reasonable one, Mr. Chairman. MR. BARRY: This was Roger, I guess, is it? AN HON. MEMBER: Yes. MR. CHAIRMAN (Aylward): Order, please! On motion Clause 5 carried. MR. CHAIRMAN (Aylward): Shall Clause 6 carry? MR. BARRY: Mr. Chairman, Clause 6. MR. CHAIRMAN: The hon. Leader of the Opposition, on Clause 6. December 19, 1984 R6355

MR. BARRY: It is the same problem here where the cost is expected to increase. Again we have the same approach to budgeting on the job as they have with respect to the government's budget, Mr. Chairman, no control over cost where it is expected to increase by more than 10 per cent.

Well, if it is expected to increase, why do they not have the right place in the first place? 'Where a contract is awarded for a public work in unit prices, and the cost of the public work is expected to increase by more than ten percent of the original value of the contract by reason of a variation in quantity from those estimated in the contract, approval of the head of the government funded body is required before the increase cost may be incurred.' Now again this you can have they can underestimate is a loophole and a situation where deliberately and then permit increases Chairman. subsequently, Mr.

This is another dangerous section. MR. CHAIRMAN: The bon. the President of the Council. MR. MARSHALL: Mr. Chairman. the hon. gentleman is reading properly what really is intended here. This will be in the case, for instance, of roads, where there has to be an extension of a road for an extra length, but you can only go up to 10 per cent. And then there are safeguards here. In the case of a government funded body, it has to report it to the government, and in the case of a department. it has to be reported to Treasury Board. Again it is a

section that makes the Public Tender Act L6356 practical as we move to decrease the opportunity for abuse of public tenders in the Province. MR. CHAIRMAN (Aylward): Shall Clause 6 carry? On motion Clause 6 carried. MR. CHAIRMAN: Shall Clause 7 carry? MR. MARSHALL: Mr. Chairman. MR. CHAIRMAN: The bon. the President of the Council. MR. MARSHALL: Mr. Chairman, I have an amendment to Clause 7. I move that Clause 7 of the bill be renumbered as Subclause ( 1) of 7 , and the following added as Subclause (2), to read as follows: 'In relation to a government funded body other than a government department, (

a) the head of the government funded body may delegate, . subject to the approval of a government funded body, power to improve change orders or extensions under Subsection (1) of 5; and (

b) the government funded body may delegate, subject to the approval of the Lieutenant-Governor in Council, power to approve change orders or extensions under Subsection (2) of 5; and (3) the head of the government funded body may, subject to the approval of government the funded body, delegate to a senior official of the government funded body power to approve increased costs under Section (6).' This again, Mr. Chairman, is just merely to give practicality in the event of a Crown corporation executing a work or a hospital - executing a work or some other December 19, 1984 R6356

government corporation or government funded body executing a work to give the head of that government funded body the same discretion as would be given in other instances, subject, of course, to the necessity of reporting to the government any such actions taken. I move the amendment. MR. CHAIRMAN (Aylward): Shall the amendment carry? On motion amendment carried. On motion Clause 7 as amended carried. MR. CHAIRMAN: Shall Clause 8 carry? MR. MARSHALL: Mr. Chairman . MR. CHAIRMAN (Aylward): Clause 8, the hon. the ·President of the Council. MR. MARSHALL: This is the final amendment, Mr. Chairman.

I move that Clause 8 of the bill be amended by adding immediately after Subclause (1) the following: Subclause (1) 1. "Notwithstanding Subclause (1) the head of a government funded body where may were authorized by the regulations to do so and as prescribed reject the preferred bidder and award the contract to a person other than the preferred bidder." Mr.

Chairman, this was put in primarily at the request of the hospitals, where somebody is awarded a contract as a preferred bidder, but may find because of the generic nature of the drug, for instance, to use drugs as ·an example, that another quality is L6357 better and it is proven to be better and it can be demonstrated to be better. And the same way with something like, for instance, X-ray film and what have you. So it is to give latitude there, but there are adequate safeguards provided and they will be covered quite adequately in the regulations. HR. CHAIRMAN: Shall the amendment carry? HR. BARRY: Mr.

Chairman. MR. CHAIRMAN: The hon. the Leader of Opposition. MR. BARRY: the Mr. Chairman, maybe the minister can tell me I am reading it wrong, but as far as I can see it says that, despite the Public Tender • s Act Cabinet can ignore The Public Tendering Act. Now does the

section say something more than that? MR. MARSHALL: Mr. Chairman. MR. CHAIRMAN: The han. the President of the Council. MR. MARSHALL: Kr. Chairman, the hon. gentleman must realize that The Public Tender Act does not mean in all cases that the preferred bidder, which in most cases, of course, would be the lowest bidder, is automatically to be accepted. What the Public Tender Act and all the tendering legislation does is that where other than the preferred bidder or the lowest tender is accepted, there has to be a good and sufficient explanation provided for so December 19, 1984 R6357

doing. I might add, and I appreciate this opportunity to do so, that the City Council have voiced concerns about being brought in under the act and asked me to bring this to the attention of the House, which I now do. But the thing is that the Mahoney Commission recommended, and I think sensibly so, that all government bodies expending funds should be covered by the legislation. MR. PATTERSON: Right on. MR. MARSHALL: And this is what we are determined to do. That is why we are insisting it apply to council as well as to other government funded bodies. But there has to be, Mr.

Chairman, a certain amount of practicality. On the one hand, for instance, you cannot have the head of a council always having to report to the Minister of Public Works (Mr. Young) because it just denigrates from the principles of municipal government and the way that municipalities are supposed to work. But the main reason why this subclause has been put in has been at the request mainly of the Hospital Association. MR. BARRY: But I am talking about the main clause now, Mr. Chairman. MR.

MARSHALL: The Hospital Association says that as the act was writ ten before, in order to accept less than the preferred bidder they would have to get the approval of the Lieutenant-Governor in Council. And this could prove to be most impractical in cases where there are calls been made by the Hospital Association for drugs and for X-ray films and what have. So L6358 what we have done is we have given them the latitude to do it, but the latitude is going to be prescribed by regulation.

And that regulation will require them to comply with the act itself, but it will very carefully constrict them in what they may do and most certainly will require, when they exercise that jurisdiction, after the fact on certain cases when they can, to report to the appropriate minister, so that it will be under the control ultimately of the government in any event. So it does not emasculate the act in any way.

What it does really is it makes the act and its application much more practical and makes it impossible - well, less possible, shall we say; nothing, I suppose, is impossible - for abuses of the tendering procedures and systems such as regrettably had occurred in the past. MR. BARRY: A weak explanation. MR. CHAIRMAN (Aylward): Shall the amendment to Clause 8 carry? MR. BARRY: No. On motion Clause 8 carried. On motion Clause 8 as amended carried. On motion Clauses 9 through 19 carried. Motion, that the Committee report having passed the bill with amendment, carried.

A bill, "An Act To Provide For The Calculation And Consolidation Of The Provincial Content Factor In The Awarding Of Tenders By December 19, 1984 R6358

Government Funded Bodies". (Bill No. 41). On motion, Clauses (1) through (9), carried. Motion, that the Committee report having passed the bill without amendment . A bill, "An Schools Act". MR. NEARY: Act To Amend (Bill No. 55). Are there more amendments? MR. MARSHALL: The No, I Education indicated think the Minister of (Ms. Verge) already this amendment yesterday, so the hon. gentleman should not have any trouble with it. On motion, clauses (1) and (2), carried. MR. CHAIRMAN (Aylward): Shall clause 3 carry? MR. MARSHALL: Mr. Chairman. MR. CHAIRMAN: The hon. President of the Council. MR. MARSHALL: Mr.

Chairman, clause (3) of Bill 55 is amended by striking out the word 'may' and substituting the word 'shall' in the proposed amendment to subsection (1) of

section 62 of The Schools Act. Mr. Chairman, the hon. Minister of Education explained this yesterday; it was just an error in the way in which the bill was presented, so it does not need any comment or anything. I am sure it can pass. The hon; gentleman could give another L6359 is back. statement He on the successful way his statement on his Hong Kong trip was greeted by the press, if the hon. gentleman wishes to. Motion, that the Committee report having passed bill No. 55 with amendment, carried. A bill, "An Anomalies And Statute Law (2)". Act To Remove Errors In The (Bill No. 48).

Motion, that the Committee report having passed the bill without amendment, carried. On motion, that the Commit tee rise, report progress and ask leave to sit again, Mr. Speaker returned to the Chair. MR. SPEAKER (Russell): The hon. the member for Kilbride. MR. AYLWARD: Mr. Speaker, - the Commit tee of Supply has considered the matters to it referred and has directed me to report it has adopted a certain resolution and recommends that a bill be introduced to give effect to the same. The Committee also reports having passed Bills Nos. 41 and 48 without amendment, and Bills Nos. 40 and 55 with amendment .

On motion, report received and adopted, resolution ordered read a first and second time. On motion, resolution read a first and second time. On motion, a bill, "An Act For Granting To Her Majesty Certain Sums Of Money For Defraying Certain Expenses Of The Public Service For The Financial Year Ending The Thirty-First Day Of March One Thousand Nine Hundred And Eighty-Four And For Other December 19, 1984 R6359

Purposes Relating To The Public Service", read a first, second and third time, ordered passed and its title be as on the Order Paper. (Bill No. 34). MR. SPEAKER (Russell): When shall Bills Nos. 41 and 48 be read a third time? MR. MARSHALL: Now, by leave, Your Honour. MR. NEARY: We will give leave, Mr. Speaker, provided we have a message from the Minister of Finance. MR. MARSHALL: I want to say, Mr. Speaker, that has already been agreed. We should not even mention that because it will get the people on this side of the House very upset with me. I make deals with the Opposition and they turn sour on me, Mr.

Speaker. I just want to make the point that you do not really - I do not want to raise the thing, but I do not want to create a precedent - you do not really need leave, Mr. Speaker, for third reading of a money bill, such as this that has gone through Committee, it automatically goes through, but I will not make big production of it. A bill, "An Act To Provide For The Calling Of Tenders For The Execution Of Public Works And The Acquisition Of Goods And Services By Government Funded Bodies". (Bill No. 40). On motion, amendments read a first and second time.

On motion, Bill No. 40 read a third time, ordered passed and its title be as on the Order Paper. On motion, a bill, "An Act To L6360 Provide For The Calculation And Consideration Of The Provincial Content Factor In The Awarding Of Tenders By Government Funded Bodies", read a third time, ordered passed and its title be as on the Order Paper. (Bill No. 41). A bill, "An Schools Act". Act To Amend (Bill No. 55). The On motion, amendments read a first and second time. On motion, bill No. 55 read a third time, ordered passed and its title be as on the Order Paper.

On motion, a bill, Remove Anomalies And Statute Law (No.2)", time, ordered passed be as on the Order No. 48). "An Act To Errors In The read a third and its title Paper. (Bill Motion, second reading of a bill, "An Act To Provide For The Exemption Of Baie Verte Mines Inc. From Taxes Imposed By The Retail Sales Tax Act, 1978". (Bill No. 46). HR. RIDEOUT: Mr. Speaker. MR. SPEAKER (Russell): The bon. the Minister of Culture, Recreation and Youth. MR. RIDEOUT: Mr. Speaker, I want to thank - MR. NEARY: This is a finance bill, how come you are introducing it? MR. RIDEOUT: It is a regular bill, Mr.

Speaker, which provides for the exemption of Baie Verte Mines from retail sales tax from the time of the takeover of the operation by the present operators in 1982. I am December 19, 1984 R6360

pleased to introduce the bill on behalf of my colleague, who asked me to do so. MR. NEARY: To play a little bit of politics. MR. RIDEOUT: A little bit of politics! That is part of the game, Mr. Speaker. We are politicians and I do not apologize for that, and I am sure the gentleman for LaPoile (Mr. Neary) does not apologize for that either. MR. NEARY: You will have to answer for the budget next year. MR. RIDEOUT: I will answer for the budget next year. What I want to say, Mr. Speaker, is that there is nothing new or startling in this piece of legislation.

This particular arrangement was offered the former operators of the Baie Verte asbestos mine when they got in financial difficulties, back in 1981, and came to government at that time looking for some concessions. The whole idea behind it was that the then operators, Advocate Mines Limited, owned by Johns-Manville, wanted to redevelop the West pit. Now as members may or may not know, the North pit had been mined for a considerable number of years but the company was getting into the development of a new pit.

Under our present tax laws it was possible for a new mining operation developing from a green field, from a new start, to be exempted from sales tax. However, it was felt that the development of a new pit in a present mine probably could not be exempted under the present sales tax L6361 regulations and under the present act, so government at that time offered to the previous operators of the asbestos mine in Baie Verte the possibility of an exemption from sales tax. Because they were, in effect, developing not a new mine but a new pit, we would offer them what was presently in the act and in the regulations.

Consequently, when the operation closed down and the property was expropriated and then sold to Transpacific Asbestos, the same deal was offered in the negotiation process to the present operators, that we would propose to exempt them from sales tax on equipment used in the development of the West pit because we would deem that to be, for all intents and purposes, a new mine, a new operation. It was a new pit, it was a different pit from what had been there before. So, as I say, Mr. Speaker, there is nothing startling about it, it is financial help to that particular operation which we know is having difficulty.

MR. TULK: How much difficulty are having, seriously? MR. RIDEOUT: they On that subject, Mr. Speaker, let me say a word or two about Mr. Rick Seaward and CBC. I think it was Monday night the

article was on. You do not mind news. I mean, news is news and it is great stuff, but the intro to the story on CBC was, 'Baie Verte in Turmoil', Rick Seaward reporting from the House of Assembly in St. John's, Newfoundland. So I stopped, my ears suddenly came very much alert and I said, 'What is going on in Baie Verte? I was in Baie Verte on the weekend and I did not run into any turmoil, I did not run into any riots in the December 19, 1984 R6361

streets or anything of that nature.' I said, 'What is going on in Bale Verte? It was only yesterday that I left there and today this great objective news reporter, Mr. Rick Seaward, is reporting from the House of Assembly in St. John's that Baie Verte is in Turmoil. What in heavens name is going on?' So I listened to the news and finally the story carne on and there was no more turmoil in the report than there is cheese in the moon. I mean, it was a factual report on some financial difficulties that the operation has had ever since they have been operating.

That was reported factually, fairly, there was nothing wrong with it, but the introduction to the story would sort of knock you out of your Chair - 'Baie Verte in Turmoil,' it said. Now if you did not stop and listen to the story, Mr. Speaker, if you did not sit in your chair and wait for all this turmoil to come out you would have figured that Baie Verte was closing down, she was gone up the spout again. That to me is irresponsible journalism. And the only thing I can say about CBC and the federal government cuts is that they did not cut deep enough, because they did not get to Mr. Rick Seaward.

That is irresponsible reporting, it is irresponsible journalism and I do not mind saying it from where I stand. And just let me say, Mr. Speaker, that when we expropriated the property and sold it to a new operator in 1982, in that window of time, from 1981 to 1982, there were stories done by this one and that one headed, 'Boarded up houses' , 'Windows boarded up' , 'A ghost town' , and all that kind of stuff. So when we finally sold the property, got it reactivated, the mayor of the town invited these same people to come out to L6362 Baie Verte to the official opening.

Seeing they had been in Baie Verte ten or a dozen times in the eighteen months that we were closed down, we thought they would come and do a nice positive story to the effect that things were looking up, that we had another opportunity, we had another chance. Do you know what they told the mayor? They could not come because of budgetary restraints. They could come three or four times in the eighteen months there was a disaster to report, but they could not come to report something positive. But what really got me was this intro the other night, 'Baie Verte in Turmoil.' Now, Mr.

Speaker, Bale Verte is not in turmoil. Bale Verte has some financial difficulty, and the hon. gentleman from Fogo (Mr. Tulk) asked me the extent of it. The extent of it is simply this: When the deal was put together in 1982 there was supposed to be put· ~n place a $4 million line of credit against inventory buildup for operating capital. The federal government was supposed to put in a million dollars. The federal million dollars got in all right, Mr. ­ Speaker, but it got in against receivables not against inventory. But the company does not have that much receivables.

As soon as a load of fibre leaves the dock there is a letter of credit from whatever agency they are dealing with in India which they immediately take to the bank and they get their money. So there is not that much in receivables. A line of credit against receivables means very little to them. The provincial government already got a million dollar guarantee on inventory, so what we have been trying to do for the last year and a half or two years is get the federal December 19, 1984 R6362

goveLnment to change their line of credit on receivables to inventory and that would then mean something to the company; that would be a million from us, a million from the feds and two million on their own, so they could then build up a $4 million inventory and draw against it. And there is absolutely no risk in it, Mr. Speaker. We have ours in place now, and we have first charge on the MR. TULK: There could be risk but they have to take it. MR. RIDEOUT: There is some risk, of course. We have first charge on a million dollars worth of inventory that we would be able to sell and get our million dollars back.

The other thing, Mr. Speaker, is the · product · that we are dealing with. We are dealing with asbestos and I am sure that every bon. gentlemen in this House has heard me speak passionately about it time after time over the last ten years. We are dealing with a product that has decreased in value, particularly over the last couple of years. The market has shrunk very significantly in the United States, it is almost non-existent - you cannot sell it in the United States. The market has sunk significantly in Europe.

The only sort of booming area for asbestos now is in the developing countries in Southeast Asia, and that is where 95 per cent of the Baie Verte produc_tion is going. Those countries are very poor currency-wise, as I am sure most bon. gentlemen realize, and that causes a problem. The other problem is that you cannot find a bank that will take asbestos as L6363 collateral. We have been to them all, Mr. Speaker.

I went to them when I was in the Premier's Office as Parliamentary Assistant, and in my roll as the member for the district, and I could not find a bank that would take asbestos as collateral, you had to have a government guarantee in order to get a line of credit. Now that is unbelievable. If you got a million dollars worth of copper a bank will normally give you a million dollars worth or credit against it, but they will give - no pun intended - no copper, not one copper, not a red cent against a ton of asbestos because of the perceived problem, and an accepted problem, with the use of asbestos.

So that has caused the company considerable difficulty, as I am sure members appreciate. MR. TULK: Is that the reason why they required the two guarantees, one from the Province and one from the federal goveLnment? MR. RIDEOUT: Yes, on the line of because the banks will them any, not a cent. MR. TULK: credit, not give What percentage do they require? MR. RIDEOUT: One hundred per cent. When the original deal was struck, Mr. Speaker, the deal was that the federal goveLnment would put in a million, we would put in a million and the banks would therefore let them go to $4 million based on those two.

But after the deal was signed and the asbestos problem continued, then the banks withdrew, they would not give any guarantee on inventory unless there was 100 per cent guarantee by the goveLnment. So that is it December 19, 1984 R6363

in a nutshell. We are working on it. Baie Verte is operated with 365 or 366 people on the payroll. They were going to close down the first week in December. Mr. Speaker, it is a very unhealthy situation where workers continue to get notices and so on, we all appreciate that and we all realize it. I met with them and tried to persuade them, if they could possibly do it at all, to hold on until at least the Christmas shutdown, which they were planning to do anyway December 21, a couple of days from now. And they were able to do that.

They may have to extend the Christmas shutdown by a couple of weeks and not open until January 21 or 22, they are not sure, that depends on getting some boats in. There is a boat out there now, as a matter of fact, loading. There is another one in Corner Brook loading. So with those two boats gone $3 million or $4 million will come back into the kitty and they will have some operating credit again.

As a government we are now meeting and negotiating with the federal government to try to change that $1 million on receivables to $1 million on inventory, to go with our $1 million, and hopefully we can therefore put a much greater line of credit in place for them. So we are working on that, Mr. Speaker, and hopefully we will be successful. MR. TULK: How are they planning to make up the other $2 million? MR. RIDEOUT: They had an offer from a private business source for $2 million, if we can come up with $2 million in guarantees. The only other thing I want to say L6364 on this bill, Mr.

Speaker, is there is no turmoil in Baie Verte. The people of Baie Verte are realistic. They have gone through a difficult time. Perhaps what is wrong with them is that they have not been like people in some other communities, snapping at government's heels and on the radio and on television and all that kind of stuff. They have been reasonably patient people. We have kept them totally informed of what is happening and they have been very appreciative of that. But when you see the likes of Mr. Rick Seaward headlining a story 'Turmoil in Baie Verte', then it kind of gets to you, Hr. Speaker.

Because there is no turmoil in Baie Verte. There are problems, yes, but not as great as there were two years ago when it was totally closed down. There is opportunity there, we are working on it, and hopefully we will be successful. But there is no turmoil. If those people wanted to see what is in Baie Verte, why did they not come down to the official opening when they were invited and do a positive story? They come down during closedowns, they come down during shutdowns and take pictures of boarded up windows and all that, why do they not come down and report something positive, Mr. Speaker?

So this bill just simply reconfirms what was offered to the old operators of the Baie Verte Mines and what is presently being offered to the new operators. As the member for the district, Mr. Speaker, and as minister, I am very pleased to move second reading. SOME HON. MEMBERS: Hear, hear. MR. BARRY: December 19, 1984 R6364

Mr. Speaker. MR . SPEAKER (McNicholas): The hon. the Leader of the Opposition. MR. BARRY: Mr. Speaker, we sympathize with the people of Baie Verte and surrounding area who are dependent for their employment on the continued operation of the Baie Verte mine. We will support the legislation, Mr. Speaker, but we would like to know - maybe the Minister of Finance (Dr. Collins) would be the one to answer this - the extent to which we are creating a precedent, an expensive precedent, by so doing. Now, I had the opportunity of becoming involved with the Baie Verte situation, as the minister knows. AN HON.

MEMBER: You did a good job, 'Leo• . MR. BARRY: Thank you. I had to engage in some frantic shuttle diplomacy in order to keep the mine operating after it had closed on the first occasion. I think we all know what was going on in the background. Since then the Johns Manville people have done their fast shuffle down in the US with respect to their bankruptcy proceedings in order to protect themselves against asbestos claims. They were indicating at that point in time, when I was down there, that they were starting to phase out of the asbestos business but, Mr.

Speaker, they were not up front in terms of indicating what they were planning. The initial reopening - what was it for? - three or four months. The Minister of Development (Mr. Windsor) might L6365 remember. How long did we get them to reopen for in September, 1981? They kept it open until Christmas or January, just after Christmas. We got a few montl:).~ out of it. Meanwhile, government was out looking for other people to get involved and we saw a new group become involved there, fortunately for the mining operation. Mr.

Speaker, whether now or at Committee stage, it might be preferable to have it now, we would like to get some idea as to how much we are talking about here in terms of exempting the Baie Verte Mines Inc. from taxes imposed by the retail sales tax. It is obvious from the legislation that it is going further than this exemption that is given for capital improvements, it is much broader than that, therefore, I would like the Minister of Finance (Dr. Collins), or maybe the Minister of Dev~lopment (Mr.

Windsor), to indicate whether it is now the policy of government to entertain this type of application on behalf of any business that can establish that it is in difficulty, and what will be the criterion for deciding whether or not a particular corporation is exempted from the Retail Sales Tax Act. I guess we would all like to see, Mr. Speaker, the retail sales tax removed.

We on this side of the House would definitely like to see it reduced as quickly as possible for all residents of the Province, but it makes it harder to do that , it makes it harder to get the tax down for everybody if there are total exemptions given to only a few corporations. This is a matter of some concern. We recognize that th