April 9, 2001 HOUSE OF ASSEMBLY

PROCEEDINGS Vol. XLIV No. 14

The House met at 1:30 p.m.

MR. SPEAKER (Snow): Order, please!

Statements by Members

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

SOME HON. MEMBERS: Hear, hear!

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

Mr. Speaker, it is my pleasure to ask all members in the Legislature to

acknowledge and congratulate the new leader of our party, officially, who is

sitting in the gallery with us today, Mr. Danny Williams.

SOME HON. MEMBERS: Hear, hear!

MR. E. BYRNE: Mr. Speaker, I know I speak for everybody, including the

Premier, when I say that we are looking forward to when he takes his time and

sits amongst - to use his own words - the club of forty-eight.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Premier.

PREMIER GRIMES: Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Mr. Speaker, if I could, by leave, just join with the

Leader of the Opposition in sincerely congratulating Mr. Williams upon taking on

a very important role in the Province as Leader of the Progressive Conservative

Party. At some point, if a group of people do vote for him in a particular

district, as has happened with the group of forty-eight, we would certainly

welcome him into your seat as the Leader of the Opposition, should that occur.

MR. SPEAKER: The hon. the Member for Signal Hill-Quidi Vidi.

MR. HARRIS: Thank you, Mr. Speaker.

By leave, I would also like to congratulate Mr. Williams, my former law

partner, on his assumption of the reins of the Progressive Conservative Party of

Newfoundland and Labrador. I, too, look forward to seeing him join us in this

House and continue the debates that we have been having over public policy. I

hope that he manages to get here very soon, Mr. Speaker.

Thank you.

MR. SPEAKER: The hon. the Minister of Forest Resources and Agrifoods.

MR. WOODFORD: Mr. Speaker, I would like to ask for leave to present a

member's statement.

MR. SPEAKER: By leave?

SOME HON. MEMBERS: By leave.

MR. WOODFORD: Mr. Speaker, I would like to take this opportunity to

congratulate the Deer Lake Red Wings hockey team -

SOME HON. MEMBERS: Hear, hear!

MR. WOODFORD: I was biting my nails Sunday evening, wondering who was

going to get up today to do this statement, the hon. the Member for Cape St.

Francis or me.

- from the great District of Humber Valley for winning the Herder Memorial

Trophy, the most prestigious hockey prize in the Province. The Deer Lake Red

Wings won a best three-out-of-five final series against the Flatrock Flyers in a

5-4 overtime win on Sunday. Both Deer Lake and Flatrock must be congratulated

for their fine hockey and sportsmanship. Three of the five games in the series

were won in overtime, giving fans nail-biting action and suspense.

Mr. Speaker, I also wish to thank the Deer Lake fans who supported their team

all year and also came out in sold-out crowds for the playoffs. To quote Kevin

Fagan, head coach of the Flatrock Flyers, as reported in The Western Star today:

We were amazed by the people up here. They came out in droves to support their

team, but they never gave us a bit of trouble. It was a truly classy performance

by the Deer Lake fans.

I ask my colleagues to join me in a round of applause for the Red Wings whose

win is a great victory for Deer Lake, for Humber Valley, and indeed the entire

West Coast hockey league.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Cape St. Francis.

MR. J. BYRNE: I, too, Mr. Speaker, would certainly congratulate the Deer

Lake Red Wings on their win of the Herder. Of course, the Flatrock Flyers put up

a great fight; a couple of overtime periods in both games, by the way. I would

just like to go on record that it is the first time for Deer Lake - great news

for them - but I think the Flatrock Flyers, what? Three times in a row, maybe,

back to back, so, good stuff.

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

MR. T. OSBORNE: Thank you, Mr. Speaker.

I would like to pay tribute today to a hockey player, Harold Druken. Last

week, while playing with his team, the Vancouver Canucks, Harold scored not only

the tying goal but also the winning goal in a critical game -

SOME HON. MEMBERS: Hear, hear!

MR. T. OSBORNE: - that put Vancouver in the Stanley Cup Playoffs for the

first time in five years; and it is interesting to note that it was in overtime,

during sudden death, with only about a minute left. Without that goal, they

would not have made the playoffs.

While they were cheering wildly throughout Vancouver, nowhere, Mr. Speaker,

could the cheers be heard more loudly than in Shea Heights, which is in my

District of St. John's South.

SOME HON. MEMBERS: Hear, hear!

MR. T. OSBORNE: I am proud to say, Mr. Speaker, that Harold grew up and

went to school and learned to play hockey right here in St. John's, in the

community of Shea Heights, and he has become not only a hero but an example to

all the young people of the Shea Heights area who can see positive proof in

Harold that the sky is the limit when you put your heart and soul into

something.

Harold is a stellar hockey player and has a career ahead of him, a bright

career, I say, and we are all cheering for him here. I would like to recognize

Harold's uncle, Ed Druken, who is in the gallery.

SOME HON. MEMBERS: Hear, hear!

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

MS M. HODDER: Mr. Speaker, I rise today to congratulate a young student

from my district, heading to a national essay competition sponsored by the

Canadian Parents for French. Jeffrey Quilty, a Grade 6 student from Sacred Heart

Elementary in Marystown, won the provincial competition of the La Dictee Paul

Gerin LaJoie. He will now represent Newfoundland and Labrador at the national

PGL competition in Montreal on May 20. The event will be broadcast on CBC and

SRC in Quebec. The winner of the national competition wins a two-week trip to a

French speaking country in Africa. Mr. Speaker, I congratulate Jeffrey on his

achievements and I wish him well at this national competition.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

Statements by Ministers

MR. SPEAKER: The hon. the Premier.

PREMIER GRIMES: Thank you, Mr. Speaker.

Mr. Speaker, I am pleased to officially report to the House of Assembly today

that government, the Newfoundland Association of Public Employees and the

Canadian Union of Public Employees, have reached an historic tentative agreement

with the Province's 19,000 public service workers.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: This agreement was forged together, and ushers in a new

era of collective bargaining between the Province and its public service

employees. The agreement provides an excellent package of wage increases and

benefits for public service employees and at the same time allows the Province

to maintain its financial and fiscal integrity.

Mr. Speaker, although this tentative deal will double the Province's

current account deficit this year from $30 million to$60 million, we believe it

is manageable fiscally and will not negatively impact on the Province's credit

rating.

Details of the tentative agreement with NAPE and CUPE will be made public

following the union's ratification process which is expected to be completed

within three to four weeks.

In the spirit of cooperation, our negotiating teams have worked together in

the best interests of the Province and all Newfoundlanders and Labradorians

generally to make this agreement a reality.

I want to thank the people of the Province for their patience and

understanding during the period of service interruption, and I want to

acknowledge the valuable contribution all our public service employees make

every day in providing essential services to Newfoundlanders and Labradorians.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: In closing, Mr. Speaker, I would like to acknowledge the

exceptional work of the President of Treasury Board and her staff, as well as

the Minister of Labour and her conciliation staff.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Congratulations as well to President Hanlon of NAPE,

President Lucas of CUPE and their negotiators for demonstrating the necessary

flexibility to enable a mutually agreed outcome to be reached.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

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

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

I would like to say congratulations to the public servants of the Province

for laying out a position in the face of attempts to divide the union, of

attempts to put it in one direction. The question that people are asking, asked

on Friday, and are asking again today: Why were we out in the first place? Why

were we out for a week in the first place? We asked questions in this

Legislature on Monday that said this: It seems to us, and it seems to me, that

we were too close for this strike not to be avoided. It has reached a successful

conclusion. I applaud people who have been involved in that to ensure that the

delivery of public services are ensured, but also, and most importantly, that

the public servants of the Province have been recognized and rewarded with the

respect and dignity that has so long avoided them.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Signal Hill-Quidi Vidi.

MR. HARRIS: Thank you, Mr. Speaker.

I hope that the settlement does usher in a new era of collective bargaining

in the Province. It does restore faith in collective bargaining. Although the

strike may not have been necessary, certainly the result of it is very positive

for, not only the public sector workers in this Province who did an excellent

job in making their case to the Province and to the people of the Province, but

also for the people generally, because the changes that will be made in the

pension system, in the funding of the underfunded liability of the pension

system and the bringing of our Province inline with the rest of Canada in having

an indexed pension for public sector workers are very positive steps for all of

us.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Minister of Tourism, Culture and Recreation.

SOME HON. MEMBERS: Hear, hear!

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

Mr. Speaker, on December 12, 1901, Guglielmo Marconi received the first

wireless transatlantic signal at Signal Hill, St. John's. The three dots

representing the letter S was the beginning of a breakthrough in communications

that altered how we communicate with each other and the world.

I would like to report on the status of the celebrations the government and

the people of Newfoundland and Labrador are planning to commemorate the

unparalleled achievement of Marconi and celebrate our Province's remarkable

history and its own achievements in wireless technology.

Receiving the World is a celebration of the 100 th anniversary of

Guglielmo Marconi's transatlantic signal from Poldhu, England to St. John's,

Newfoundland in 1901. Events and activities are planned across the Province

throughout 2001 to appeal to citizens of all ages with a variety of interests.

Marconi raised a kite high above Signal Hill and the aerial wire attached to

it received the famous signal. Kites will be a primary focus in the educational

and festive components of some of our events.

Before the end of the school year, schools in every region of the Province

can become involved in a Kite Program through curriculum-based activities. One

hundred communities in Newfoundland and Labrador will participate in related

events held throughout the summer and a major Kite Festival will be held in St.

John's on the Canada Day weekend. In addition, there will be Marconi awards at

Science Fairs and Heritage Fairs for participants who excel in communications

projects. We have also implemented a Marconi program in libraries across the

Province.

There will more than twenty Marconi affiliated events held this summer in

various areas of the Province. These community-based projects will tell the

Marconi story or a communication story to residents and visitors. There will be

theater and arts programs, film, radio, and publishing projects and special

technology-based initiatives. As a part of the Receiving the World celebration,

the popular Soirees & Times program will enter its third season in 2001 with

twenty weekly events in Newfoundland and Labrador. This initiative presents

evenings of traditional Newfoundland and Labrador food and entertainment to

visitors so that they may experience the "time" which has been such a

significant part of our culture and heritage.

There are many communities in the Province that played important roles in our

remarkable communications history both as Marconi wireless stations and as Cable

telegraph stations. In 2001, we will assist nine communities in the development

of exhibits to tell their communications story. These includes sites in St. John's,

Mount Pearl, Cape Race, Heart's Content, Bay Roberts, Harbour Grace, Fogo,

Cape Ray, and Battle Harbour. As well, Living

Interpretation projects and

marketing initiatives are being developed in relation to this program.

One of the highlights of this anniversary year is The Wireless Vision

Congress. This international conference is to be held on September 26 to

September 28 in St. John's. Speakers and delegates from around the world will

discuss and debate the future of wireless technology that had its birth in this

city 100 years ago. This conference will address issues such as the affects of

wireless communication on health, education, and the economy. This forum will

not only recognize our Province's role in communications history but more

importantly it will help establish Newfoundland and Labrador as a key player in

the future of wireless and communications. This conference is planned with the

Department of Industry, Trade and Rural Development.

Our department has been successful in securing an exhibit of artifacts and

documents relating to December 12, 1901. For the first time in 100 years the

original equipment used by Marconi on Signal Hill will return to St. John's.

This equipment and other items of interest will be on display at the Colonial

Building throughout the summer and early fall.

Mr. Speaker, I look forward to keeping my colleagues informed as these and

other events unfold during this anniversary year.

The Marconi anniversary celebrations present new opportunities for the

Province, but they are of course just one component of the overall tourism

marketing initiatives undertaken by the Province. The Department of Tourism,

Culture and Recreation continues with its core destination marketing efforts,

and the tourism division of my department continues to produce very innovative

advertising campaigns which focus on our established icons. The special

celebrations, as part of the overall marketing program, provide a broader

penetration in our core markets.

The Receiving the World Celebrations observe another significant first for

this Province, Mr. Speaker, and highlight, once again for the world our diverse,

intriguing and proud history.

Thank you.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for St. Barbe.

SOME HON. MEMBERS: Hear, hear!

MR. YOUNG: Thank you, Mr. Speaker.

The Marconi anniversary celebrations do present new opportunities for the

Province. We have seen this with other special events such as Cabot 500 and the

Viking celebrations. However, we do need more than special events to develop our

tourism potential. Many communities, particularly on the Northern Peninsula, got

a small taste of the tremendous opportunities and benefits a thriving tourism

industry can bring, but a one-time taste of these benefits is not good enough to

provide stable employment and secure funding for sustainable growth over the

long term.

What our town so desperately needs is long-term employment alternatives, and

the tourism industry has so much to offer. It is appalling that the provincial

government has let this opportunity slip through its fingers.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Labrador West.

MR. COLLINS: I guess this is an opportunity where we get to tell the

minister to go fly a kite some time this year.

Saying that, Mr. Speaker, I would like to talk about the impact that this

event has had on communications around the world and in our Province, in

particular, a significant impact on the safety, particularly as it related to

Maritime transport back in the early days. It is the focal point of what,

hopefully, will be another successful tourism season in our Province. I think it

also points, Mr. Speaker, to the need for more infrastructure for tourism,

particularly in the Labrador portion of our Province which is becoming

increasingly more busy with tourism as the years progress and people are taking

advantage of one of the fastest growing aspects of tourism, ecotourism.

So I say to the minister, that under his stewardship and his department, I

would like to see more attention paid to developing the tourism industry in

Labrador; and have lots of fun when you are flying your kite.

Thank you.

Oral Questions

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

SOME HON. MEMBERS: Hear, hear!

MR. E. BYRNE: Mr. Speaker, on March 15 of this year, in this House, the

Premier stood in his place, in response to questions from me in referencing the

new leader of the party, and said: He is not in this Legislature, does not want

to come into this Legislature, has no interest in coming into this Legislature.

I would like to ask the Premier today, in view of the fact that Humber West

is now open as of midday today: Are you going to provide an opportunity today

for our leader to come into the House and debate you?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Thank you, Mr. Speaker.

I know that some members opposite are not only tired, I suppose, but still a

little bit excited after the concert on the weekend.

SOME HON. MEMBERS: Hear, hear!

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

The hon. the Premier.

PREMIER GRIMES: Thank you, Mr. Speaker.

In fact, on March 15, I think members opposite would absolutely acknowledge

that the statement that I made was true, because there had already been - and

let the record show - two opportunities for by-elections in Newfoundland and

Labrador prior to that.

SOME HON. MEMBERS: Hear, hear!

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

Do members want to proceed with Question Period?

AN HON. MEMBER: Absolutely, Mr. Speaker.

MR. SPEAKER: Well, let's get to it.

The hon. the Premier.

PREMIER GRIMES: Thank you, Mr. Speaker.

I will try not to say something that provokes any kind of an outburst, Mr.

Speaker.

The fact of the matter is that, at the time, there had been two opportunities

for which the gentleman who is now the leader - let me finish the answer - on

the public record said he was not interested in running for a seat at the time,

that his priority was to organize the Progressive Conservative Party, and he

gave a reason.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

PREMIER GRIMES: He gave a reason why he was not interested at the time in

seeking a nomination. When there is a by-election called in Humber West, because

there will be at some point in the future, we will see who the candidates are at

that point in time.

SOME HON. MEMBERS: Hear, hear!

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

MR. E. BYRNE: Well, well, well, well, well.

On March 13, this Premier stood in this House, during the Throne Speech, and

said: I can only, through you - talking to me - encourage him to join the club

of forty-eight. What is it you are afraid of, Premier? Call the by-election. Let

him get on and come face you, face to face.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Thank you, Mr. Speaker.

Mr. Speaker, we take the issue of representation in the House of Assembly

very seriously. Two things: We will not, and I will not, do as was done in 1987,

when a Liberal member resigned in Windsor-Buchans and the Premier of the day

waited five full months.

AN HON. MEMBER: The law (inaudible).

PREMIER GRIMES: We are not talking about the law, Mr. Speaker. He waited

five, full months. We will not see that repeated.

SOME HON. MEMBERS: Oh, oh!

MR. LUSH: He used the full extent of the law. I was here. He used the

full extent of the law. That is why we changed it.

PREMIER GRIMES: It's okay, Tom.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

The hon. the Premier.

PREMIER GRIMES: Thank you, Mr. Speaker.

That was seen at the time to be such an abuse of the legislative rules that,

when we formed the government in 1989, we changed the law.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: We changed the law to make sure that kind of abuse could

never happen in Newfoundland and Labrador again, unless some group like

yourselves, in fifteen years, twenty years, or thirty years, were to get elected

and change it back to the way you used to like to have it.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: There is one other thing, Mr. Speaker, to be remembered.

There is one other thing that members opposite obviously are forgetting, and

their new leader knows nothing about: that representation in the House of

Assembly is not about the right of the person to stand here, but the right of

the people to vote in the person of their choice.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Mr. Speaker, this is not an issue that is for the

convenience of a candidate. A by-election is the opportunity for the people of a

district to state their preference, and there will be an opportunity for that

some time soon.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

A supplementary, the hon. the Leader of the Opposition.

MR. E. BYRNE: What the people of the Province realize is that for

two-and-a-half months this man has been mocking somebody because they won't

come here. He has the opportunity to call it, to let him get here, and he is

scared to do it. Let the people of the Province know about it.

SOME HON. MEMBERS: Hear, hear!

MR. E. BYRNE: That is what they know, and you know it. You cannot have it

both ways, I say to the Premier. You cannot have it coming on one end and going

on the other, because that is what you have been trying to do since you have

become Premier of Newfoundland and Labrador.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

MR. E. BYRNE: I have this question for the Premier.

AN HON. MEMBER: (Inaudible).

MR. E. BYRNE: Yes, I say to the Minister of Industry. Would you like me

to ask you a question too? Because I can do that when I am finished with him.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

The Chair has recognized the hon. the Leader of the Opposition. I ask him to

get to his question.

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

Everybody knows that the Premier of Newfoundland and Labrador has every right

not to have somebody from Corner Brook sit in his Cabinet, but what he does not

have the right to do is to deny representation to the people of Humber West. I

ask you again, Premier: Will you call the by-election today to give an

opportunity - to use your words - to the Leader of the Tory Party to put his

name on the ballot up against your Liberal candidate, and we will see who is

going to be sitting in there after that by-election is over?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Premier.

PREMIER GRIMES: Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Mr. Speaker, I do recognize that they are still feeling

some of the effects, ill or otherwise, of the weekend. I didn't see it myself,

because I was busy doing other things; however, it was reported that the music

was that good at the concert that even the Member for Waterford Valley tried to

dance, which was absolutely amazing.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: I guess there is a first for everything.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

The hon. the Premier.

PREMIER GRIMES: Thank you, Mr. Speaker.

We do take the issue of representation in the House very seriously. The

constituents of Humber West will continue to have a voice in the Legislature

following a by-election, and we will recognize that it is their choice to make.

After consultation with the group in Humber West, no one need ask me when there

will be a by-election in the Legislature. I know they are all excited after the

weekend. I will convene - after checking with the Lieutenant-Governor - a press

conference and call a by-election when we are ready, within the law of the land.

SOME HON. MEMBERS: Hear, hear!

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

MR. E. BYRNE: Mr. Speaker, what is obvious to the people of the Province

is the only one who needs dancing lessons, and certainly political dancing

lessons, is the Premier.

Premier, you can stand up and pretend as if this just happened but you, above

all people, have known for at least two-and-a-half months that the Member for

Humber West - who announced at your leadership convention - was moving on. Are

you trying to tell us that you have not anticipated that he was going to move,

or that you have not known for a while that a by-election would occur? Why is

it, Premier, that you will not call the by-election today?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Mr. Speaker, we all appreciate that the new Leader of the

Progressive Conservative Party for Newfoundland and Labrador has finally -

MR. E. BYRNE: (Inaudible).

MR. SPEAKER: Order, please!

The hon. the Premier.

PREMIER GRIMES: Thank you, Mr. Speaker.

I am glad to see that is the kind of questioning and interrupting that the

new Leader of the Progressive Conservative Party is so proud of, that kind of

questioning is what he appreciates. Very proud of that.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Mr. Speaker, we respect the process. We respect the

people of Humber West in their right to have a representative, and we do respect

and appreciate the fact that the Leader of the Progressive Conservative Party,

who has been too busy up to now doing other things that are more important to

him than to seek a seat in the Legislature, has now finally decided that it is

time for him to tell the people of the Province: I might be ready now. I may now

be ready to think about serving some constituents in Newfoundland and Labrador.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Well that's great to know that the king, himself, has

decided that he might now dirty his hands by thinking about representing some

people in Newfoundland and Labrador!

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. the Leader of the Opposition.

MR. E. BYRNE: What is very clear is that on March 15 he wanted it, he got

it, and now he does not know what to do with it. That is what is very clear!

That is exactly what is clear.

SOME HON. MEMBERS: Hear, hear!

MR. E. BYRNE: He reminds me of when I was growing up in Riverhead of the

small dog chasing the car.

MR. SPEAKER: Order, please!

MR. E. BYRNE: I often wondered what would happen if he caught it. Now I

am going to find out.

MR. SPEAKER: Order, please!

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

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

I will ask the question again because he will not answer it. I will try, from

the Government House Leader's point of view, not to use harsh, unparliamentary

body language while I am at it. Let me ask you, Premier, answer the question:

Why will you not call the by-election today? You have known it was coming for

over two-and-a-half months. You wanted it in March. Why don't you want it

today?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Thank you, Mr. Speaker.

I do appreciate the Leader of the Opposition asking the question as

vigorously and in an animated way, as he was instructed to do by the king from

the gallery, and I hope he is appreciating the performance.

The fact is we take the issue of representation, as I have said before, in

the Legislature very seriously. It is a matter to be decided not for the

convenience of the candidate, but because it is the right of the people in a

particular district. It is refreshing to know - I think I may have mis-spoken,

it is not the king. I think it is the president, I believe, because he was sworn

in with an oath that was dreamed up just for the occasion.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: (Inaudible). I guess somebody wrote that for you too!

Someone must have written that for you too! Dream up an oath, and all of the

quotes happened to come from American presidents and so on, Mr. Speaker. So

maybe it is the President who has now decided that he has gotten his other

things done that are important to him and he might, actually, soil his hands by

thinking about whether or not some people are going to vote for him in a

district. He suggests he is ready to go in Humber West. There will be a

by-election in Humber West, and I will let the people of the Province know when

it is in due course.

SOME HON. MEMBERS: Hear. hear!

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

MR. T. OSBORNE: Thank you, Mr. Speaker.

My questions are for the Minister of Environment.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

The Chair is going to call for order and decorum one more time. If we do not

get it I will have to recess the House.

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

MR. T. OSBORNE: Thank you, Mr. Speaker.

Minister, when the environmental legislation to ban bulk water export was

passed in this House we were told that a Cabinet committee would be put in

place, to put a royalty regime in place in this Province and report back within

ninety days. Has that committee put in place a royalty regime and policy on our

water resources? If so, what is that royalty regime and when will it be tabled

in this House?

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

SOME HON. MEMBERS: Hear, hear!

MR. RALPH WISEMAN: Thank you very much, Mr. Speaker.

I want to advise the House that no royalty regime has been put in place with

regard to royalties on water. I want to advise the House that that particular

member over there, for some time through the media, through the airwaves, and

through the Open Line show, has told people about all the royalties that could

be received from bottled water. Through my investigation, in the Province of

British Columbia there are forty bottling plants. The total revenue from these

bottling plants, total in royalties, is $28,000.

MR. SPEAKER: A supplementary, the hon. the Member for St. John's South.

MR. T. OSBORNE: Thank you, Mr. Speaker.

That is why we are after the jobs, I say.

SOME HON. MEMBERS: Hear, hear!

MR. T. OSBORNE: Mr. Speaker, my second question is for the Premier. Mr.

Premier, you stated that you are hoping to get between $70 million and $80

million a year royalty from the export of water. Without a royalty regime in

place what are you basing your numbers on? How can you tell us that these

numbers are thoughtful when there isn't even a comprehensive royalty regime

put in place?

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Thank you, Mr. Speaker.

I understand that the hon. Member for St. John's South would like to have a

continuing debate about the export of water now, minus the information. What we

have said is that when we get the full information with respect to free trade

implications, the national water bans, royalty possibilities and all the other

considerations, we will present it publicly to the people of Newfoundland and

Labrador, and if we decide to do so, we will come back to this Legislature and a

have a full debate here, but today, despite the questions and protestations of

the Member for St. John's South, we will not be entering into a debate about

the possible export of water with a lack of information.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: A final supplementary, the hon. the Member for St. John's

South.

MR. T. OSBORNE: Thank you, Mr. Speaker.

Premier, you are the one who gave the information of $70 million to $80

million. Where did you get that information?

SOME HON. MEMBERS: Hear, hear!

MR. T. OSBORNE: Mr. Premier, there is no categorization for bulk water

under the federal clawback scheme. You know that. I know that. How can you say

that you are going to get $70 million to $80 million royalty for this Province

when you do not even know what the clawbacks are yet? Isn't it true that when

there is a category put in place on water exports through the federal clawback

and transfer scheme that, more than likely, it will be upwards of 100 per cent?

That is what the federal government is telling us. Can you confirm that?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Thank you, Mr. Speaker.

I would ask the member to exhibit some patience. We will get an opportunity

to debate all of these aspects fully and completely in the public in the

Province, in this Legislature.

Just for the record, in case the Member for St. John's South is really

interested in an answer with respect to the money, the numbers that I quoted

were how much it costs for tuition, and he can check that out. I did not say

that all of that was going to come from water. That is how much tuition costs in

Newfoundland and Labrador this year.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for St. Barbe.

SOME HON. MEMBERS: Hear, hear!

MR. YOUNG: Thank you, Mr. Speaker.

I have a brief question for the Minister of Fisheries. The minister knows

that the shrimp plant of Black Duck Cove could close down this spring if the

owner, R.H.K, is unable to find a new operator for the plant. Closure of the

plant will put eighty people out of work. Has the minister been engaged in this

issue, and will he do what he can to make sure the plant reopens this spring and

the people can return to work?

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

MR. REID: Thank you, Mr. Speaker.

Yes, we have had discussions at least with one group that is involved with

the Black Duck Cove plant. I plan to meet with you and the council next week to

discuss that issue; but, having talked about Black Duck Cove, you might also

want to talk to your seat mate right there; because, if he were to have his way

and we opened up 4R shrimp to every other processor in the Province, it might

not be a question of getting the plant in Black Duck Cove open. It might be a

case of where the other two in the area might close as well.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Signal Hill-Quidi Vidi.

MR. HARRIS: Thank you, Mr. Speaker.

My question if for the Premier. The people of Marystown and the Burin

Peninsula are wondering today, as a result of financial statements last week of

Friede Goldman Halter, and the Premier's comments about civil disobedience as

a remedy for the problems of the assets of the Cow Head facility and the

Marystown shipyard. Now that the Premier has had time to relax after the tension

of the public sector strike and consider this issue, can he tell the people of

Marystown and the Burin Peninsula today what concrete steps his government is

prepared to do to ensure, first of all, that jobs continue in the Marystown

shipyard and Cow Head facility; and, secondly, that the assets of this facility

will not be lost to creditors and broken up and sold as scrap?

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

Development.

SOME HON. MEMBERS: Hear, hear!

MR. TULK: Mr. Speaker, let me just say to the hon. gentleman that we have

been meeting with the union in Marystown. As a matter fact, the two members and

myself met with them on Saturday -

AN HON. MEMBER: (Inaudible).

MR. TULK: Pardon me?

AN HON. MEMBER: (Inaudible).

MR. TULK: No, I don't think they said that to you at all.

We have had some very good meeting with them. Of course we are all concerned

about what happens in Marystown in terms of jobs. We are looking at a number of

issues, as we discussed this morning in committee with the Member for Bonavista

South - who, I might say, took a much more practical and pragmatic approach to

it than the hon. gentlemen is doing, and did not show any sign that he wanted to

get into politics for once in his life.

We are working with the people of Marystown, and we are working with the

union. We all have the sincere hope, after what happened last week with Pegasus,

which is a venture capital company, that Friede Goldman Halter will be able to

float the $100 million that they are looking for in terms of a loan and get

their cash flow where it should be in order to see that some of the things we

are trying to negotiate for Marystown are carried on.

MR. SPEAKER: A supplementary, the hon. the Member for Signal Hill-Quidi

Vidi.

MR. HARRIS: Thank you, Mr. Speaker.

It is obvious the government is still trying to sell hope instead of actual

jobs in Marystown. Would the Premier advise the Legislature whether or not he is

prepared to use the power of the Province to pass legislation to ensure the

integrity of the assets of the Marystown shipyard and the Cow Head facility are

not lost to the creditors of Friede Goldman Halter, and that they remain in tact

for another operator if something drastic happens to Friede Goldman Halter?

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

Development.

MR. TULK: Mr. Speaker, let me just say to the hon. gentleman that we, on

this side, would much sooner work with the people of Marystown in hope than we

would in despair, as he is obviously trying to portray on that side of the House

today.

SOME HON. MEMBERS: Hear, hear!

MR. TULK: Let me also say, Mr. Speaker, that we will do whatever it is

possible for this government to do, short of getting back into the shipbuilding

industry. I think everybody recognizes that is not for us. Even the people who

we work with in the union will go that far with you. We will do whatever it

takes to attract industry, to attract jobs, to attract investment into

Marystown, and we will not sow the NDP philosophy of despair and destruction.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Windsor-Springdale.

SOME HON. MEMBERS: Hear, hear!

MR. HUNTER: Thank you, Mr. Speaker.

My questions today are for the Minister of Forest Resources and Agrifoods.

Minister, farmers in this Province share the concern of their colleagues

across North America about the spread of foot-and-mouth disease in Great Britain

and throughout Europe, and the risk of the disease coming to this Province.

Minister, can you tell us what the Province is doing to protect the local

livestock from contracting the disease, or is the minister and his department

waiting for the federal government, and depending on the federal government, to

make sure that we are protected in this Province?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Minister of Forest Resources and Agrifoods.

SOME HON. MEMBERS: Hear, hear!

MR. WOODFORD: Mr. Speaker, the member is quite right in regard to the

regulations and the policing of this type of problem that they have in the

United Kingdom, the federal government takes a lead on this, and there is no

question, as far as I am concerned, that they are doing an excellent job. As I

have said before, one of the most important industries in Canada today is our

Agrifoods industry, and we have the top regulations in North America, if not in

the world, with regard to food safety and otherwise.

Having said that, we didn't take any chances. We made sure that our chief

veterinarian in the Province is monitoring the situation. We have questionnaires

put out to every farmer in the Province asking for the point of origin. In fact,

some of them have checked out already with regard to livestock. Whether it be

beef, whether it be dairy cattle, whether it be sheep, we have the point of

origin of all that, as questionnaires are put out. We are also in the process -

it has probably already been done - of doing up a pamphlet, probably even a

householder for everybody in the Province, to make them aware of what the

conditions are and of how important it is to adhere to the principles and

regulations pertaining to this very serious disease. It is a serious disease and

it cannot be taken lightly.

For instance, we have four flights a week coming in from the United Kingdom

right here in St. John's alone. We have all the ship entries in the Province

with regard to the paper companies and so on. Some people may think it is funny;

it is not, it is a very serious situation. If it ever get out anywhere in North

America - this is why the point of origin of everything in the Province has been

checked and our officials are doing a good job with it.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: A supplementary, the hon. the Member for Windsor-Springdale.

MR. HUNTER: Thank you, Mr. Speaker.

Minister, I say, we know this is a serious issue and we know that

international flights are coming into this Province every day. A lot of

questions arise around those flights and other entrants into our ports in the

Province. We know today also that there is a lot of garbage and other things

that come from international flights and ships coming into the harbour, so we

need protection against that, Minister. I heard one story, that at two o'clock

in the morning garbage is coming off international flights and being dumped in

our local dump sites without any inspections, any protection. So, Minister, we

cannot take a chance on just saying that the federal government has things in

place -

MR. SPEAKER: Order, please!

I ask the hon. member now to get to his question.

MR. HUNTER: We need more than that, Minister.

The question, Minister: Foot-and-mouth disease can affect wildlife,

particularly the deer family. Minister, has this Province -

MR. SPEAKER: Order, please!

I ask the hon. member now to get to his question.

MR. HUNTER: Thank you, Mr. Speaker.

Has this Province checked to determine if moose or other wildlife in this

Province are susceptible to the disease, and what steps are you taking to

prevent the spread of the disease to the Province's wildlife population?

MR. SPEAKER: The hon. the Minister of Forest Resources and Agrifoods.

SOME HON. MEMBERS: Hear, hear!

MR. WOODFORD: Mr. Speaker, I don't know how far behind the member

thinks that our officials in this Province or the rest of North America are. I

mean, to see if they are susceptible! Any cloven hoof animal is susceptible, Mr.

Speaker. That goes back to the beginning of time. Mr. Speaker, we have the rules

and regulations in place. The hon. -

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!.

MR. WOODFORD: The hon. member is talking about garbage. He heard a rumor

that garbage was coming off flights. Naturally garbage has to come off flights.

That is one of the reasons why we are checking the point of entry, the shipping

terminals of this Province, wondering whether they are taking off garbage. If

they are - there are even people coming off the four international flights with

garbage in their pockets, in their handbags and everything else. There are all

kinds of concerns that have to be checked. All those precautions are being

checked and hopefully, at the end of the day, the proper rules and regulations

will be in place to look after it so that nothing like that can happen in this

Province.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The time for Oral Questions has elapsed.

Presenting Reports by Standing and Special Committees

MR. SPEAKER: The hon. the Member for Conception Bay East & Bell

Island.

MR. WALSH: Mr. Speaker, the Resource Committee have considered the

matters to them referred and have approved without amendment the Estimates of

Expenditure of the following departments: the Department of Fisheries and

Aquaculture; the Department of Forest Resources and Agrifoods; the Department of

Mines and Energy; the Department of Tourism, Culture and Recreation; the

Department of Industry, Trade and Rural Development, as well as the Department

of Labrador and Aboriginal Affairs.

Mr. Speaker, I want to thank all the members of the Committee, including the

ministers and their officials who willingly gave the information as required by

the members. The members of the Committee were: of course, myself, as well as

the Member for St. John's East, the Member for Kilbride, the Member for

Cartwright-L'Anse au Clair, the Member for Torngat Mountains and the Member

for The Straits and White Bay North.

Again, on behalf of the Committee, I want to thank each member for their

participation. I want to thank the ministers and their officials for attending

and bringing forward their points of view.

Also, we had a little change. We had some of the critics for the various

departments attend our Committee meetings as well. Of course, although they did

not have a vote on Committee, they were more than welcome to come and present

their views.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

On motion, report to be received on tomorrow.

MR. SPEAKER: The hon. the Member for Carbonear-Harbour Grace.

SOME HON. MEMBERS: Hear, hear!

MR. SWEENEY: Mr. Speaker, the Social Services Committee have considered

the matters to them referred and have approved without amendment the Estimates

of Expenditure of the following departments: the Department of Education; the

Department of Youth Services and Post-Secondary Education; the Department of

Human Resources and Employment; the Department of Labour; the Department of

Health and Community Services; and the Department of Justice.

I, too, Mr. Speaker, would like to thank all those involved in the Estimates

process for their due diligence and cooperation.

Thank you all.

SOME HON. MEMBERS: Hear, hear!

On motion, report to be received on tomorrow.

Notices of Motion

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

MR. LUSH: Mr. Speaker, I give notice that I will on tomorrow ask leave to

introduce a bill entitled, "An Act To Amend The Income Tax Act, 2000."

(Bill 6)

Petitions

MR. SPEAKER: The hon. the Member for Baie Verte.

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

I am pleased to rise today to again present another petition to this House of

Assembly, like many of my colleagues have done, on road conditions in this

Province. This particular petition is from the people of Burlington, Smiths

Harbour and Middle Arm, as I do get petitions from around this Province, I say

to the minister here today. We have spoken a few times now to the new minister

in his new portfolio. He certainly understands, like his predecessors, the

problem that we have in this Province today when it comes to road construction,

and the simple fact that we still have 900 kilometers of gravel road on the

Island portion of this Province again this year. The truth is that we have a lot

of old pavement. The minister knows exactly what I am talking about, when we

talk about twenty-five to thirty-year-old pavement. Now we have a combination

problem of old pavement in the Province that is breaking up in all the members'

districts, because I hear from the members right around this Province, and also

900 kilometers of gravel roads still undone.

Mr. Speaker, the problem is the same again this year. It is as simple as

this: there is no plan. Again this year, yes, the minister can stand and say

there is an extra $6 million to put in roads, and I have commended the minister

for that, that we move in the right direction.

The minister knows, and we all know in this House, year after year, come on

April month, and somewhere between the middle of April and the last of April, we

start to get a little bit of money shoveled around, when we in fact know - and

the minister has told me again this year - that to address the problem this year

alone is $200 million; I think $198 million to be exact. Again, we have $18

million to throw at the situation.

AN HON. MEMBER: Not true.

MR. SHELLEY: That is exactly true, I say to the minister. He can talk to

the Finance Minister and she can tell him very quickly, that it just does not

work. The $18 million to fit $200 million again this year - it was the same last

year; it was the same the year before. It is like a bad credit card out of

control. We are not addressing the real long-term problem. We need a long-term

plan. He also needs to talk to his federal cousins in Ottawa to put something in

place as with the Roads for Rail Agreement which is really, when we hear the

Budget every year, some $100-odd million. We know the truth is that the Province

itself is putting a paltry $12 million to $18 million into road construction and

it is just not going to work.

I know it is not just the members on this side of the House. Members on both

side of the House are getting the same problems, even the minister's own

district. I understand when he talks about his own district, that people are

calling. I am getting calls from around the Province, school children on buses,

every day with longer distances to travel to school. They have to get on the

back of those yellow buses. I done it myself, with them, gotten on the bus,

twenty-five to forty-five minutes on a gravel road to go to school and come back

every day. It is an embarrassment. I do not want to hear about what was the plan

seventeen years ago or before that. The bottom line is that, after fifty-one

years of Confederation with this country, we are still driving over 900

kilometers of gravel roads. We should all be ashamed of that. The only way to

really address the problem is for this government to put in place a long-term

plan to partner with the federal government and try to get it done. To think

that last year, an example I have used here before -

MR. SPEAKER: Order, please!

The hon. member's time is up.

MR. SHELLEY: Mr. Speaker, by leave, to just to finish off a point?

MR. SPEAKER: Order, please!

Does the hon. member have leave?

SOME HON. MEMBERS: By leave.

MR. SPEAKER: By leave.

MR. SHELLEY: The truth is that last year, an example I used in this

House, a gold mine on the Baie Verte Peninsula was almost not started because

the company could not use the road to get back and forth on the La Scie highway;

it was that deplorable. Imagine deterring industry in this Province because we

do not have basic infrastructure. It is time to address the problem, and I hope

that we can get a long-term plan from this government soon.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

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

MR. T. OSBORNE: Thank you, Mr. Speaker.

I have a petition from the residents of Shea Heights regarding housing in the

area. I have spoken with the minister responsible for housing, and I know that

he is working on the issue. We have spoken on it already, but I continue to

receive petitions and I will continue to present them. I have presented a number

of petitions on this particular issue to date. The prayer of the petition reads:

We, the residents of Shea Heights, wish to petition the hon. House of

Assembly to address the need for wheelchair accessible housing units in the Shea

Heights area. We are asking the government to consider the fact that people with

disabilities and their families need to be able to utilize the support of family

and friends within the community of Shea Heights. If persons are forced to lived

in units outside the community, it compromises the help and support families so

vitally need. We are asking that serious consideration be given to the

construction of wheelchair accessible units in the Shea Heights area, so that

families with physical disabilities may avail of the essential support networks

provided by family and friends.

Mr. Speaker, this is a serious issue. Shea Heights is a very large community.

It is larger than many of the town that are in and throughout the Province.

While it is a part of St. John's and while the families in the Shea Heights

area have been referred by housing to other areas of St. John's to avail of

wheelchair accessible housing units, that should not happen, because Shea

Heights is a community unto itself. It is a very close knit community. The

families of Shea Heights rely on each other. It is a very, very close community

and the support network that is in place by family and friends within the

community is very essential to these families, especially families with

disabilities, or children with disabilities. It is unfair to remove those

families from their community, a community that they had grown up in, and that

they have lived in for many years. It is unfortunate to remove that family from

their own community and ask them to move to a different neighborhood where they

do not have the network of family and friends to rely on, just because they have

a disability.

I ask again that the minister continue to work on this, continue to consider

the importance of this issue, and put in place wheelchair accessible housing

units in the Shea Heights community.

Thank you, Mr. Speaker.

Orders of the Day

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

MR. LUSH: Motion 3, Mr. Speaker, first reading of a bill entitled,

"An Act To Amend The Prepaid Funeral Services Act." (Bill 5)

Motion, the hon. the Minister of Government Services and Lands to introduce a

bill, "An Act To Amend The Prepaid Funeral Services Act," carried.

(Bill 5)

On motion, Bill 5 read a first time, ordered read a second time on tomorrow.

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

MR. LUSH: Order 4, Mr. Speaker, second reading of a bill, "An Act

Respecting Petroleum Products."

Motion, second reading of a bill, "An Act Respecting Petroleum

Products." (Bill 4)

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

SOME HON. MEMBERS: Hear, hear!

MR. MATTHEWS: Thank you, Mr. Speaker.

I stand today with some pleasure to introduce and to speak to Bill 4,

An Act

Respecting Petroleum Products. I apologize to all who have to listen to me today

that my voice, while never very good to have to listen to, will today be more of

a challenge for you and for me, so I will attempt to keep my remarks concise and

MR. MANNING: Were you down at the Stadium (inaudible) on the weekend?

MR. MATTHEWS: I say to the hon. Member for Placentia & St. Mary's,

I was home in my house on the weekend, wrapped up in my housecoat, watching

selected channels.

MR. MANNING: No, Sir, (inaudible).

MR. SPEAKER: Order, please!

MR. MATTHEWS: I say to the hon. member, I am a sucker for punishment at

times but not to the extent that he has expressed.

Mr. Speaker, the bill that we are dealing with today is an important piece of

legislation because it is a bill that has been long sought after, particularly

by the consumers of the Province. I suppose there has never been a time in our

history that compares with the last couple of years in terms of the fluctuations

that the consumers have had to endure with respect to petroleum product pricing

in the Province. That includes, of course, fuel for our cars, diesel for our

vehicles, propane to the extent that we use it in those forms, and also furnace

heating oil for our homes.

The bill that I am introducing today and speaking to is designed to do a

number of things. First of all, it is clear to all of us that the consumers of

the Province have lost confidence, in their judgement, in the ability of the

industry to provide satisfactory answers as to why and to what extent increases

and decreases in petroleum products take place. So, the intent of the bill today

that we are introducing is to provide some level of comfort and some support to

the consumers of the Province in terms of them having three things accomplished

by virtue of this piece of legislation.

We want to ensure, first of all, that there is a level of transparency

apparent in the issue of when prices rise and fall in terms of petroleum

products. Secondly, we want to ensure that people of the Province have the

certainty that there will be a prescribed time, and only a prescribed number of

times, when there will be price increases or decreases in petroleum products.

Thirdly, the people of the Province will have the assurance of knowing that the

time over which price increases and decreases will occur will be predictable.

So, Mr. Speaker, today this bill accomplishes those three things.

I would say at the outset that one of the things that this bill will not

necessarily accomplish is to ensure that there will be lower prices consistently

than there were heretofore with respect to petroleum products. Frankly, Mr.

Speaker, the only way that prices can be controlled in terms of whether or not

it is the very best price, is the extent to which the free market economy works

and the extent to which there is a competitive element remaining in the

industry.

Mr. Speaker, the intent of this bill is to, while on the one hand encourage

competition and ensure that there is a fair and equitable process that sees

increases and decreases occur, on the other hand it is designed to give a level

of comfort to people who are users of these petroleum products. The bill is

designed to regulate petroleum products both at the wholesale and retail level.

The regulations will result in transparent and regular price changes and it will

ensure that the price changes, which are charged, are justified.

The bill will establish a petroleum products pricing commissioner. The

commissioner will have the ability to set maximum retail and wholesale prices,

provide for implementation of a binding and automatic market based price

adjustment mechanism and it also provides, on an annual basis, for a once a year

nonmarket related adjustment. If prices were only regulated at the retail level

then wholesale prices could still be increased, putting an undo burden on

retailers. Therefore, Mr. Speaker, the bill will ensure that there are maximum

prices set but it will also have the capacity through the commissioner, to

ensure where it is necessary, to also deal with the setting of a minimum price

as well. The pricing mechanism will have a direct and varying impact on several

different groups within the Province. Including, of course: consumers,

retailers, wholesalers, and independent operators. Each of these groups,

obviously, will have conflicting objectives in terms of their business

operation. In establishing the detailed pricing mechanism these conflicting

objectives need to be balanced.

As we all know, Mr. Speaker, this Province covers an extremely large

geographically area. As a result, there cannot be a uniform price throughout the

Province. Many times we hear reference made to the regulatory regime in PEI,

which in effect has set one price at the wholesale level and one price at the

retail level for the whole Province. Obviously, Mr. Speaker, one price for all

of Newfoundland and Labrador would not work, simply because of factors such as

transportation costs that have to be taken into consideration. The price of

petroleum products, obviously, in Nain, Labrador - which today I believe is at

$1.06 per litre - would not be a very desirable price to have as the maximum

price being allowed to charge in the rest of the Province. Therefore, we intend

to establish somewhere between five and ten zones in the Province, and within

those zones the commissioner will have the ability to regulate prices on a zonal

basis.

AN HON. MEMBER: ( Inaudible).

MR. MATTHEWS: No.

Mr. Speaker, I might also say that the legislation will give the commissioner

- where there are extraordinary circumstances existent - be able to control or

set specific outlet prices even within those zones. Prices may also differ, of

course, due to characteristics that are peculiar to specific operators. Low

volume, isolated operators, even within a zone, may not be able to live within

the zonal price, and in those circumstances we may have to, through the

commissioner, have consideration given to those extraordinary circumstances for

those extraordinary outlets.

The frequency, as I have said earlier, of the adjustments is also a key to

the effectiveness of this petroleum products pricing commissioner's activity.

So, Mr. Speaker, consistent with what happens in PEI, because this is one area

where we believe we can be consistent, we intend to regulate petroleum products

on a monthly basis. That will mean that there will be a maximum of twelve price

changes per year in the Province.

We intend in this legislation, or through the regulations, to also use the

New York harbour commodities price as a market indicator. Obviously, there has

to be some reference point to which the commissioner can refer in terms of

establishing what the price should be at the wholesale and retail level

provincially. It is our judgement that because the New York harbour rack

commodity price is, by all accounts, the most competitive wholesale market

probably in the world, we believe that it is the appropriate reference point for

us to use in setting prices through the commissioner's office.

Another important issue, of course, for us to consider is the Province's

independent operators. Some have already expressed concern as to the possible

impact of regulation on small independent operators who have difference economic

circumstances than those who are probably associated with major refineries and

distributors.

MR. SULLIVAN: (Inaudible) put them out of business.

MR. MATTHEWS: It is not our intention, I say to the hon. Member for

Ferryland, to put any private or any independent operator out of business. On

the contrary, it is our intention to ensure that such operators are not

adversely affected.

MR. SULLIVAN: How will you do that?

MR. MATTHEWS: We are going to do that, as I said a minute ago, primarily,

by having somewhere between five and ten zones in the Province that will give us

zonal pricing and by further giving the commissioner flexibility to deal with

extraordinary circumstances within a particular zone where he deems it

appropriate to give extraordinary consideration to a small independent isolated,

maybe low volume, high cost operator -

AN HON. MEMBER: (Inaudible).

MR. MATTHEWS: Independent.

MR. FITZGERALD: Mr. Speaker, is it fair for the people of Bonavista today

to be paying ten cents more for a litre of fuel oil than people in St. John's?

Is that fair?

MR. MATTHEWS: I say that the issue of fairness, in terms of who pays what

for the petroleum products, is the essence of the bill that we are introducing

today, to ensure that whatever price is being paid by whatever consumer in the

Province, at whatever point of outlet, it is an appropriate price for that

location, in that geographical area, for that particular product that is being

purchased. Prior to establishing the detailed pricing mechanism, obviously, we

need to do a fair bit of further research on these and other issues. This will

include consultations with all affected parties. The additional research in

consultation will be undertaken over the next several months.

I want to assure the hon. members of the House that governments is committed

to addressing consumer concerns with respect to all of the issues that they

might want to bring forward. As a result, even though it will be necessary to

engage a consultation process, we intend to effectively have regulation of

petroleum products in place not later than the third weekend of the month of

May. At that point, the commissioner will have the ability to do a number of

things leading into an interim period while we do the consultation and before we

set the final regulations. Those include the possibility of freezing wholesale

and/or retail prices at that point, and making adjustments to wholesale and/or

retail prices at some future date beyond that point. Eventually, once we have

done the full consultation, once we have brought into place the full level of

regulations, then that will be the mechanism and that will be the reference

point used for adjustment in prices. The pricing changes will be based on a

formula that will be automatically adjusted on a monthly basis as opposed to a

month-over-month application process. We believe that will be considerably more

accommodating for the wholesalers as well as the retailers.

Mr. Speaker, the legislation provides the ability to set the minimum margins

if deemed necessary. However, it is not the intent at the outset, let me say, to

set minimum petroleum product prices. We intend to set maximum petroleum product

prices on a zonal basis. We believe it will only be necessary for us to get

involved in setting minimum product prices if there is a sufficiently adverse

effect of this regulatory process upon, particularly, small independent

operators. It is also not our intention, by the third week in May, to bring in a

full regulatory regime for furnace heating oil. As you -

MR. SULLIVAN: What is the annual cost of (inaudible)?

MR. MATTHEWS: I will deal with that.

As you would appreciate, Mr. Speaker, the issues surrounding furnace heating

oil are significantly different than the issues around gasoline or diesel at the

pump. Let me illustrate by way of example: When you pull up to a pump to buy

your product, you have a choice, you go in and the process is the same no matter

what service station you pull into. You go to the pump, you fill up your tank,

and you pay your price. With respect to furnace oil, the people who sell and

deliver furnace oil, of course, are in a much different circumstance. There is

all the way from the furnace oil dealer, who is a cash basis only operator who

provides no services other than delivering oil and getting paid for it, to the

furnace heating oil distributors who provide an array of other services along

with the delivery. Things such as automatic delivery, things such as burner

service, things such as credit accommodations for a monthly or sometimes on a

yearly basis. These are all features that are different with respect to furnace

oil as opposed to gasoline at the pumps. So, Mr. Speaker, because the furnace

oil heating season is generally from October to April or May, when the most

severe impact is felt by people who burn furnace oil and is not such a big issue

in a relative sense between May and October, we believe it is appropriate to

take some additional time to work through the nuances of that particular product

that is going to be dealt with.

Mr. Speaker, this bill is not only a bill that is the representation of a

commitment that we have made as government, it is also representative of the

wishes and aspirations of the people of the Province. While the people who

produce, people who sell at the wholesale level, and the people who distribute

petroleum products have said, rhetorically, that competition is working fine and

well in the market place, the reality is that the consumers of the Province are

not convinced that they are being afforded the benefit of decreased prices on a

timely basis, and they are not convinced that they are being held off against

increases in petroleum products as long as it could possibly be. So, on the

basis of the lack of confidence on a consumer basis by the people of the

Province, and on the basis of the many representations we have had from formal

advocacy groups on this issue, and on the basis of individual representations

that all of us have had from the general public, as constituents, we believe, at

this time, it is appropriate to bring in a petroleum products regulatory regime

that will deal with the issue of confidence, that will deal with the issue of

fairness, and that will deal with the issue of transparency in setting petroleum

products prices.

Mr. Speaker, I do anticipate that there will be a fair number of questions

raised in debate with respect to the functioning of this bill, and how it will

work. To the extent that questions may arise in debate, I can inform the House

that I will be taking note of them and hopefully, I will be able to be prepared

to answer any and all questions that might arise that would be of interest as a

result of the debate that we will have on this piece of legislation.

Mr. Speaker, I move second reading of the bill.

Thank you very much.

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

MR. OTTENHEIMER: Thank you, Mr. Speaker.

I thank the minister for his introductory comments with respect to this

particular Bill 4,

An Act Respecting Petroleum Products. As the minister just

indicated in his conclusion, this is important legislation, and it is important

that we debate fully this legislation, both during second reading and during

Committee stages, so that members on both sides of the House may, in exchange,

have a complete and full understanding of the implications of Bill 4, what it

will truly mean and really mean for the consumers of the Province.

What is perhaps even noteworthy and interesting at this stage is the fact

that the bill that we have before us represents a very noticeable shift in

government policy, because it was certainly the position of this government, and

obviously a position that was shared by Cabinet ministers on government's

side, that regulation was something that was not of great interest to members

opposite. In fact, as recently as December, 1999, the then Minister of Mines and

Energy, today's Premier, in a press release, indicated quite strongly that

government oppose any regulatory regime with respect to the regulation of the

prices of petroleum products.

It is noteworthy, interesting and important, I would suggest, Mr. Speaker,

that we explore what is before us fully, that we debate the implications of this

legislation fully, simply from the point of view that it is important

legislation to begin with, but, secondly, it represents a shift in government

policy. We have to explore fully, and debate fully, exactly what has caused such

a shift, and I am pleased that the minister has entertained the suggestion that

he will be prepared to answer questions that we raise on this very important

issue.

There is document that is prepared in Western Canada - I am sure the Minister

of Mines and Energy is familiar with it - called Fuel Facts. I am sure his

office receives it on a regular basis. It is my understanding that it is

produced every second week, it is produced by M.J. Irvin and Associates and

Purvin & Gertz Inc. The purpose of this information is to allow the public

of Canada - there is an analysis done of gas prices in each province, and

usually in the capital city of each province, and it is consumer information

which allows the public of the country to have a full understanding and an

ability to do a comparison of gasoline and petroleum prices throughout. The one,

of course, that we receive is the Atlantic edition. It is interesting to note

that when we do an analysis of the cost of a litre of gasoline throughout

Atlantic Canada, that once again, as in many cases, and as in many examples,

Newfoundland heads the list; but it is interesting, upon review, when we review

the documentation, it is an interesting observation to note why.

If I may refer very briefly to the most recent edition of Fuel Facts - in

fact it is dated March 27, 2001 - there is a selection of cities, primarily in

Atlantic Canada, where the price of a litre of gasoline is analyzed. For

example, on March 27, 2001, approximately two weeks ago, the price of a litre of

gasoline in St. John, New Brunswick, was 69.8 cents per litre. In Halifax, Nova

Scotia, the price of a litre of gasoline was 75.1 cents per litre. In

Charlottetown, Prince Edward Island, the price of a litre of gas was 70.6 cents.

In St. John's, Newfoundland, it was 80.9 cents, and I believe that is the

price, as we speak, in this city. In Bangor, Maine - for information purposes,

the publication provides the cost of a litre of gasoline in a neighboring state

- the price there is 60.0 cents. The Canadian average is 68.1 cents and the

American average is 62.7 cents.

Again, it is interesting to note that when this comparison and analysis is

done, with particular emphasis and attention given to Atlantic Canadian cities,

we see that St. John's, Newfoundland, heads the list. Of course, as we all

know, in rural parts of our Province, particularly where my colleague, the

Member for Labrador West, resides, in his district, I am sure it is

significantly higher than that. Just using St. John's as the one example in

this Province, we see it tops all those cities that are recorded and analyzed in

the last edition of Fuel Facts; and, as I have indicated, the edition is dated

March 27, 2001.

There is an interesting analysis, in addition to simply giving consumers and

citizens information with respect to the cost of a litre of gasoline, there is a

further breakdown of that cost. This, I would suggest, is important and it

perhaps gives a clear understanding as to why consumers in this Province are

faced with some of the highest costs of petroleum products in the country, and

that is because the pump taxes are also given some attention. In other words,

the federal and provincial, and federal excise taxes, are spelled out exactly so

that consumers have a full understanding of when, for example, in this city,

consumers go to the pump and pay 80.9 cents per litre, this document will allow

consumers to know exactly what the breakdown is in terms of gasoline taxes.

I would like to do a very short comparison at this time. In St. John, New

Brunswick, 29.8 cents represents the combined provincial and federal taxation

when taking into account the full cost of a litre of gas in that city; as I have

indicated, 69.8 cents. In Halifax, Nova Scotia, tax prices on their litre of

gasoline, 33.7 cents; in Charlottetown, Prince Edward Island, 27.6 cents; in

Bangor, Main, 15.2 cents; in St. John's, Newfoundland - and, in fact,

obviously this will apply for the whole Province - 37.1 cents of the cost of a

litre of gasoline is in the form of taxation.

What we see is that on a fluctuating basis, because obviously the appropriate

tax cost to the consumer will vary when the price of a liter of gas varies

because of the HST component, we see approximately 50 per cent of the total cost

of a liter of gasoline in the form of taxation, either provincial or federal or

federal excise taxes - approximately 15 per cent.

What this publication does is, it breaks down for consumers the exact cost of

a liter of gasoline in their respective cities; but it also goes further: it

shows what the breakdown is in terms of taxation.

Members on this side of the House have repeatedly suggested to members

opposite that one way government can serve as an aide and a real help to the

people of the Province is to simply give further review and study to the concept

of the reduction of taxation. This could be done in one of two ways, I would

suggest, Mr. Speaker: One, to allow some break in terms of the HST component,

because we would all agree that when it comes to home heating fuel, for example,

and I would even suggest gasoline for transportation, that these are essentials.

The question has to be asked: Why is it that the consumers in this Province have

to be further burdened with the HST component, when we are talking about the

cost of gasoline in our Province?

Secondly, if government and members opposite wanted to seriously give

consumers a break, there could be a break in the provincial tax, in the

provincial road tax. No, Mr. Speaker, these suggestions have gone on deaf ears

and the consumers of this Province are left with paying the highest cost of

gasoline in this country

Again, it is important to note that it is the highest cost of gasoline per

liter, but incorporated with that notion is the fact that we, the consumers in

this Province, pay the highest percentage of taxes when we apply the full tax

amount.

Mr. Speaker, there is an area where government could seriously review exactly

how consumers are being impacted and if government members truly wanted to

assist the consumers of this Province, this is something that could have been

done at any time in the past. Mr. Speaker, unfortunately for consumers, this was

not an option.

It is interesting to note, as well, that attached to the March 27 addition of

fuel facts are a couple of essays with respect to the need for consumer

protectionism and the need of a consumer watchdog in dealing with petroleum

products as it relates to either home heating fuel or gasoline. This is very

similar to a position that this party has adopted. Namely, the need for what we

have termed a petroleum products monitor which would be the establishment of an

independent individual who would take into account the needs and concerns of

consumers, would report on a constant basis to the public of the Province in

terms of what information is available, would have a true accounting with

respect to the cost of crude prices, a true accounting of pump prices, the

impact of taxation and it would also be in a position, I would suggest, to

receive complaints from consumers. This independent products monitor could then

analyze and investigate, and have some powers of investigation to fully review

what a particular consumer may be saying, investigate further and report back.

Mr. Speaker, obviously, that is not the nature of the regulatory regime that is

being envisaged by this bill but at least there would be some accountability to

the public; and the consumers in this Province, I would suggest, would have

received far greater protection than they have received to date.

The essay that I referred to is an essay written by Frdric Quintal,

representing the organization: Gasoline is Essential; in French, L'essence c'est

essential, and will call on the federal government to oversee the petroleum

industry to assure that the interests of consumers are protected. It would take

the form of an Ombudsman, a citizen's protection organization, or a watchdog

agency. Very similar, I would suggest, Mr. Speaker, to what was being proposed

by members on this side of the House.

In another essay written by Bill Simpkins, who is the vice president of the

Canadian Petroleum Institute, he discusses two interesting and different

concepts whereby he states: the creation of an agency that would monitor

refining and supply activities in Canada, and a consumer Ombudsman. Again, he

incorporates the same concept. He suggests that with the implementation of these

two concepts such implementation could fulfill a need to ensure Canadians are

being served.

I just point that out to members on both sides of the House, that this type

of suggestion, this type of provision of an independent petroleum products

monitor is not only being suggested by members of this side of the House but

certainly individuals in this country who are influential in this area and who

recognize the need for the protection of consumers as it relates to the

controlling of the prices of either home fuel or petroleum products.

I will give the minister some indication perhaps as to the types of questions

that we will be addressing, Mr. Minister, so that as we proceed into the

committee stages he may be in a position to provide some answers when these

questions arise.

I had an opportunity to review Bill 4 and some of the points that I would

like for the minister to give some consideration to. One, for example, in

section "3.

(1) There is established the Office of the Commissioner of

Petroleum Products Pricing." We see in subsection "

(4) The person

appointed as commissioner may be removed before the expiration of his or her

term of office by the Lieutenant-Governor in Council for cause." I think it

is important, minister, that perhaps the legislation give some consideration to

spelling out exactly what is meant by that. For cause; is a very general and

sweeping statement. It seems to me, Mr. Speaker, that the minister may want to,

during committee stage, address that particular point.

It is interesting to note that in

section 4 it sets out the maximum prices

that the commissioner has

authority to deal with. For example, it states in

section "4.

(1) The

commissioner has the authority (

a) to set, and shall set the maximum wholesale

and retail prices that a wholesaler and a retailer may charge for heating fuel

and motor fuel; and (

b) to determine the minimum and maximum mark up between the

wholesale price to the retailer and the retail price to the consumer of heating

fuel and motor fuel." This relates, I guess, to the point that the minister

made in his opening comments where there is a distinction obviously being given

to how the regulatory regime will affect either home heating fuel or our

gasoline fuel, and both. I think the timing of the implementation, for example,

in the setting of these maximum prices and how there is going to be a difference

in that timing is important. I would be interested in the minister's comments,

again, when this area is debated further.

On page 7 of the bill, in particular

section 8.(4), it states: Only one

application may be made by a wholesale or a retailer in a -

AN HON. MEMBER: (Inaudible).

MR. OTTENHEIMER: I am sorry, do you want me?

AN HON. MEMBER: (Inaudible).

MR. OTTENHEIMER:

Section "8.

(4) Only one application may be made by

a wholesaler or a retailer in a 12 month period." Mr. Minster, it is

important to ask why this sort of restriction and limitation is being placed on

either a wholesaler or a retailer, only that one opportunity is given in a

calendar year for such application.

MR. MATTHEWS: It has to do with costs other than (inaudible) to deal with

things like once a year costs of things; buy once a year for adjustments based

on things like advertising, promotional (inaudible).

MR. OTTENHEIMER: That may be, Mr. Minister, but it does not specify that

in the bill. Although it may be found in the heading, there is no reference to

an earlier subsection or a reference to any earlier section. Maybe the bill

could be tightened simply from the point of view of clarification.

Perhaps the most significant provisions, I would suggest to the minister, are

found in

section 23 under the - what we have here is the regulatory regime, Mr.

Minister, of the regulatory regime, where it states that: "The

Lieutenant-Governor in Council may make regulations (

a) respecting the criteria

to be employed by the commissioner in establishing the petroleum product base

wholesale and retail prices under

section 6; (

b) respecting the procedure to be

applied and the criteria to be considered by the commissioner for determining

changes to the petroleum product base wholesale and retail prices under

section

7; (

c) respecting the conduct of an investigation or the holding of a hearing by

the commissioner; (

d) respecting the manner of informing wholesalers and

retailers for the purpose of

section 7." Subsection (

e) with respects to

costs; "(

f) respecting the information required to be provided to the

commissioner by a wholesaler or a retailer." What we see here, I would

suggest Mr. Minister and, Mr. Speaker, is perhaps the most significant

section

of the whole bill, because really what the regulatory regime under

section 23 of

the bill is essentially setting out all of the criteria, all of the details, all

of the information that will be required for the applicability of this

particular statute. The regulatory regime, I would suggest, is information that

ought to be brought forward to this House, and should this bill, in fact,

receive final reading and receive passage through this Chamber, it would be

important to see exactly what the specific regulations have to say, how thorough

they are, how all-inclusive they are, and what impact they will have upon the

consumers of the Province.

Mr. Speaker, I began my few comments by speaking briefly about the fact that

this legislation represents a total shift in government policy with respect to

the regulation of gas prices. It is interesting to note, as well, that in the

past, particularly when today's Premier, the former Mines and Energy Minister,

responded to questions by members on this side as to what could be done to help

the consumers of the Province, he opposed so strongly the concept and notion of

regulation. In part, the basis of his opposition to the concept of further

control or regulation was provided in the report of the Consumer Advocate, just

over two years ago, I believe released in December of 1997 by Consumer Advocate

at that time, Dennis Browne, when he summarized and made recommendations as to

what he felt would be most appropriate as Consumer Advocate. Keep in mind, he

was speaking as Consumer Advocate. He summarized and recommended what he felt

would be most appropriate for the consumers of the Province in protecting their

interests.

His very first recommendation states, and it is in bold letters: No Price

Regulation. "If Government seeks to enhance wholesale and retail price

competition in the Newfoundland and Labrador gasoline market, it should attempt

to do so in the most cost effective manner possible. We believe the most cost

effective public policies are those designed to utilize market forces instead of

using Government's legislative powers to regulate prices. Direct Government

intervention in the market is generally the least desirable approach and should

only be pursued as a final recourse where there is no indication that the market

will behave correctly." Again, in bold print, the Consumer Advocate goes on

to state, "We have found no evidence to support price regulation."

This is the government's own appointed Consumer Advocate who analyzed the

industry thoroughly, worked on a report that in the final analysis was quite

substantive, makes a number of recommendations, and the very first

recommendation - just over two years ago, some twenty-six or twenty-seven months

ago - given by the Province's own Consumer Advocate upon a complete study and

review of this very question was to say, "We have found no evidence to

support price regulation."

What is interesting is the Consumer Advocate's second recommendation, and

it is with respect to a monitoring system, again much akin to what has been

suggested by members of this side. The Consumer Advocate states on Page 3 of his

recommendations, "With the production of crude oil from Hibernia,

Newfoundland and Labrador joins a select group of provinces that sustain all

segments of the oil industry. Government should view the retail of gasoline as

part of the Province's increasingly strategic fully integrated oil industry.

Accordingly, Government should maintain an independent and up to date source of

reliable data concerning the gasoline retail industry in this Province, and

those jurisdictions where oil produced from this Province is sold."

What we have here is the Consumer Advocate essentially advocating what

members on this side have advocated in terms of what is in the best interests of

consumers. It was a position that was held by members opposite until at least

just prior to the leadership convention, I believe. It is consistent with what

many of the top analysts and writers are saying, as was evidenced in the short

report that was given in Fuel Facts of March 27 of this year, particularly the

same recommendation being made by Bill Simpkins, the Vice-President of the

Canadian Petroleum Institute.

AN HON. MEMBER: (Inaudible) personal friend of mine.

MR. OTTENHEIMER: Do you agree with him?

AN HON. MEMBER: What?

MR. OTTENHEIMER: Do you agree with him?

AN HON. MEMBER: No, I just said, I actually don't.

MR. OTTENHEIMER: Mr. Speaker, it is interesting to note that what a

top-notch authority in this country is saying is consistent with what government's

own appointed Consumer Advocate has also said. Let's keep in mind the Consumer

Advocate studied this issue and studied this question thoroughly.

What are some of the details in terms of those recommendations? I will just

illustrate a few of them, if I may. The Consumer Advocate, in the December, 1997

report, as his second recommendation, states as follows: "Government should

institute an efficient and adequate monitoring system which will produce a

reliable data base of price information for government and consumers". This

recommendation is being made, which follows the recommendation that price

regulation is something which is not recommended.

The Consumer Advocate continues, "The Department of Mines and Energy

should be designated as the lead Department of Government for all issues

involving the oil industry...." That makes sense. "Government should

commit sufficient resources to the Department of Mines and Energy to fulfil its

role of gathering data concerning the industry".

"The Department of Mines and Energy should publish monthly, in

newspapers having a general circulation in the Province, price data for the sale

of gasoline in selected municipalities in the Province."

The Consumer Advocate continues, "The Department of Mines and Energy

should publish once yearly, in newspapers having a general circulation in the

Province, a report on the gasoline retail industry, including year by year

information concerning the number of operating outlets, crude oil costs,

wholesale prices at New York, Montreal and St. John's, and pump prices

(weighted average) for selected municipalities in the Province."

Again, what this is doing, as the advocate is suggesting, is providing

information to the public, monitoring what is being done at the pumps, providing

to the consumers of the Province a rationale as to why prices are what they are

and, perhaps equally important, reminding consumers on a repeated basis that a

large significant of the amount of the price of a litre of gasoline is in the

form of taxation. It is a reporting mechanism. It is an independent office that

will be true and honest to the consumers of the Province. That is why such a

recommendation was so highly recommended by the Consumer Advocate some

two-and-a-half years ago.

Also, the Consumer Advocate continues, the notion of, "Disclosure and

provision of the data required by the Department of Mines and Energy for

fulfilment of its mandate should be required of industry participants under

regulation."

Finally, "Under regulation Industry should provide to the monitor full

and timely reasons following any price increase." Essentially what we have

is, if we listen to what the Consumer Advocate is saying, if we listen to what

some of the top analysts in the country are saying, and if we take into account

what used to be the policy of government members only until a few months ago, we

are saying that in using this recommendation we have regulation without

regulation. We have a watchdog in place, a consumer watchdog, that can do

essentially much of what is being recommended in this bill without actual

interference, I would suggest, Mr. Speaker and to the minister who has just

arrived - is regulation without regulation and, as the St. John's Board of

Trade, I believe, has said, without interfering in the free market system.

One has to question, and we will see. This is an issue that will be fully

debated, I am sure, for a number of days, as members opposite will debate

perhaps the disadvantages and the advantages of such legislation, regulating the

price of petroleum products in our Province. We will have to see exactly why the

government has now chosen to go this route as opposed to what was being

recommended in the Consumer Advocate's report of December, 1997.

I say to the minister that it is important to have a full understanding, a

rationale as to why now this change, and why now is the shift so noticeable and

so immediate upon the consumers of this Province when only a little while ago it

was a no-no, it was not the route to go, it was not what was consistent that the

Consumer Advocate had indicated, and it was not what was consistent with what

many of the top writers and authorities in this country are now saying in terms

of what is in the best interests of consumers of the land.

Mr. Speaker, there will obviously be a number of questions that will have to

be asked, and in days to come we obviously will be looking forward to the

minister's response, particularly as it relates to certain issues or certain

references in the legislation itself.

I just mentioned a moment ago, we have the Consumer Advocate saying one

thing, many authorities saying one thing, but it is also interesting to note

that the present Premier, as recently as - if I can find the date, Mr. Speaker -

January 6, 1999, just over a year ago, reacted to the call. Today's Premier,

the then Minister of Mines and Energy, reacted to the call for gasoline price

regulation. If I could quote from the news release of the Department of Mines

and Energy, issued by the hon. Mr. Roger Grimes just over a year ago, when he

was asked a question on the point directly, what would he do, or what were his

views with respect to the regulations of gas prices: Mines and Energy Minister,

Roger Grimes, has reacted to a new round of calls for gasoline price regulation.

The issue of price regulation was reviewed in detail during the latter half of

1997 when, in response to consumer concerns, the government appointed Dennis

Browne to investigate and report on gasoline prices in the Province. In

particular, Mr. Browne was directed to determine whether regulation of gasoline

prices would be in the public interest. The study was completed following

extensive consultation with consumer groups, town councils, the oil industry,

and various provincial and federal government departments.

Now the quote, the interesting quote: Government generally agreed with the

Consumer Advocate's report and accepted its two main recommendations, that

there be no price regulation and that government monitoring of gasoline prices

be improved, said Mr. Grimes. A monitoring and publication program has been

established within the Department of Mines and Energy to keep the general public

informed of gasoline prices and the issues related to gasoline pricing. While

several provinces have investigated price regulation, P.E.I. remains the only

Province where regulation is implemented.

That is the situation today. The only province, other than this Province,

which is now considering gasoline price regulation, is the Province of Prince

Edward Island.

One argument against price regulation is that prices would normally be higher

in a regulated market. This is the Minister of Mines and Energy, just over a

year ago, today sitting in the Premier's seat, saying in a press release in

response to this very issue being raised by consumers of the Province: One

argument against price regulation is that prices would normally be higher in a

regulated market. Tracking of gasoline prices in this Province confirms that

this would be the case here.

The minister went on to say: It is important to note that consumers

associations of Canada are also on record as being opposed to price regulations.

Meanwhile recent statistics clearly indicate that falling world crude oil prices

are showing up at the pump. Then there is a list or an analysis in the same

release to give an example of that earlier quote.

The question has to be asked: What has changed? It is a question that I feel

the Minister of Mines and Energy is going to have to stand in his place in the

next several days and account to the people of the Province a full understanding

as to why there is a change in this very important policy. Why the shift? It is

not as if the argument were equal on both sides and there was discussion on both

sides of this argument, and it was a debate that was fully fleshed out so that

all arguments could be presented and there was, perhaps, legitimate bonafide

reasons as to why price regulation may be an option. From what the consumers of

this Province appear to see, Mr. Speaker, and certainly from information that

has been provided, even at government's request, I would add, when we consider

the appointment of the Consumer Advocate to conduct a study precisely on this

point, it seems that all of the information and all of the evidence up until a

few months ago - and it is only the present Premier who appears to have deviated

from all of the evidence and all of the recommendations - the question has to be

asked: What has changed? Why is there such a shift in such a very important and

vital policy that affects almost all consumers? Because in one way or another,

everybody, every citizen of this Province is affected directly, certainly

indirectly, and in almost all cases directly, with respect to the cost of

gasoline, home heating fuel, or indeed any petroleum product.

It is interesting to note that the Consumer Advocate has come down on the

issue. Writers and those in the industry who obviously have a knowledge in this

area, have come down on this issue. The Minister of Mines and Energy, a year ago

- who is the same man who is the Premier today - came down on the issue. We, as

a party, formed a policy and a position. In fact, it was a position that we have

maintained throughout. We came down on this issue, but there was a change. There

was a shift and I, quite frankly, Mr. Speaker, do not understand why. It is an

interesting question, and we look forward to the minister affording the public

of this Province - that in view of all of the evidence which appears to counter

the concept of the regulation of gas prices, why it is now the position of this

government, this Premier, the former Mines and Energy Minister, why it is now a

collective position of members opposite to change the course and subject the

people of this Province to the concept of gas price regulation?

Mr. Speaker, as I have indicated, in days to come members on this side will

be looking forward to join in this debate. There are a few other references, I

say to the minister -

SOME HON. MEMBERS: Oh, oh!

MR. OTTENHEIMER: Mr. Speaker, in days to come we will have an opportunity

to question directly some of the provisions of the draft wording of the bill. I

look forward to the minister providing some answers but perhaps even more

important, and to the overall issue of regulation generally, we look forward to

the rationale, the sudden change of heart, and an explanation to the public of

this Province, why it is now in the best interest of the people of this Province

to be subjected to gas price regulation.

I thank the minister for the opportunity, and we will again participate. I

know other members on this side of the House, Mr. Speaker, will want an

opportunity at this stage of the proceedings, then in second reading, to

participate in this important debate.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MADAM SPEAKER (Ms M. Hodder): The hon. the Member for Conception Bay

South.

MR. FRENCH: (Inaudible) interesting today that we are going to debate a

bill that at the end of the day will determine gas and oil prices, home heating

and gasoline prices in the Province of Newfoundland and Labrador.

Madam Speaker, just as an aside to all of this, I believe we should be

looking at more than the price of home heating oil and the price of gas in the

Province of Newfoundland and Labrador. We should be looking at what ways these

oil companies have of making their money. I spent ten years in the business. I

have done numerous interviews concerning gasoline prices in Newfoundland and

Labrador and there is more to gasoline prices in Newfoundland and Labrador than

the cost of a litre of gas, the cost of a litre of home heating fuel, and a cost

of a litre of oil that you might need to put in your car engine. Let me tell you

that most of these prices are dictated to by the oil companies within this

Province. When you are sitting in your station at 4:00 in the afternoon and your

phone rings: Bob, at 6:00 this afternoon the price of the gasoline has to go up

by 2 cents or 3 cents a litre. No such answer as to why we have to put the price

of gasoline up 2 cents or 3 cents a litre. That is done at the whim of the oil

company.

You see other oil companies in the Province who advertise today: there will

be nobody in this business who will beat us in the pricing of our gas. Again,

Madam Speaker, to suggest that there is no collusion among oil companies - even

though federally we have always had a report that said, there is no collusion

among oil companies anywhere in Canada, I believe that is utter and complete

nonsense. I believe there is collusion among the gas and oil companies in this

Province. I believe, Madam Speaker, that they set out to make money which

everybody, of course, who is in business - and I am not against these companies

making money in the Province of Newfoundland and Labrador, but they make money

on more than their gas and oil. If this legislation does not give a commissioner

the right to go into a business to examine the books, the costs, what they are

charging for a litre of oil or a litre of home heating fuel, or a litre of oil,

as I said before, that you may wish to put into your car, if we are not going to

do that, Madam Speaker, then at the end of the day I believe we are going to

come up with absolutely nothing. Because at the end of the day there will be no

way to know how much an oil company in this Province actually spends in oil.

Madam Speaker, I will just quote you one incidence. I operated two such

businesses in this Province, one in Long Pond and one in Kelligrews. I remember

one year going back to look over, and I said to myself: My goodness, how much

money am I paying to this oil company, year in, year out, week in, week out, for

rent.

Just let me relate a little story to you. I believe these are all things that

we should be looking at. We paid $1,000 a month - I don't mind giving you the

figures - to rent the store. We paid $2,500 a month to rent the car wash, and on

the gasoline figures we paid .0075, what in the industry is called pins, for

every litre of gasoline that was sold. So, after spending $2,500 a month -

$2,700, I am sorry. It was $1,700 a month, not $2,500, for the rental of the car

wash, $1,000 a month rental for the convenience store, and .0075 pins for every

litre of gasoline that we sold. That had to be paid to the oil company every

month. The price of gasoline had to be paid every week. If you sold 1,000,

2,000, 20,000 or 30,000 litres, the .0075 pins had to be added on to the price

that you, in other words, were paying to the oil company. You had absolutely no

say in how much you could charge for gasoline. You had absolutely no say in how

much you could charge for oil. Indeed, in one of our stations you had absolutely

no say in what you paid for diesel fuel in the Province of Newfoundland and

Labrador. So, Madam Speaker, if we are not going to allow this commissioner the

right to examine the total value or the total books of oil companies in this

Province, then, at the end of the day, where are we going to be?

I never realized that people in the oil industry in this Province had as much

interest in me until after I did an interview with CBC radio to talk about

gasoline and oil prices in this Province. I really lined up some of these

companies, because I knew the difference. I always remember a time when an

agent, not an agent, one of their people, came in to see me who was, what I

would call, my sales rep, dropped into the store. He left and went home and

later on that day he called me and said: Bob, boy, all the milk prices in

Conception Bay South seem to be different. Everybody seems to sell two litres of

2 per cent milk at a different price. The comment made to me, Madam Speaker,

was: Tomorrow morning, I will have to call my buddy - and he named an oil

company - and see if we can't get together on the price of milk. Later on that

night, I got a call: Bob, as of tomorrow morning at eight o'clock, all the 2 per

cent milk in your district, or the Town of Conception Bay South, will be sold

for $2.69 a two litre. It did not matter what you paid for it, did not matter

what deal you had made with the company where you bought the milk on the back

end, as of tomorrow morning all the milk in your area will be sold for $2.69.

Again, the oil companies are making a profit because with the company that I

work for at the end of the day now, the company is told, you are told, as an

agent, where to buy - or as a lessee, which I was - you are told where to buy

your insurance, you are told where to buy all of your grocery products, and if

you do not buy them, if you do not insure with ABC, or you do not buy your

groceries from XYZ, they will cancel your lease on the businesses.

Over the past ten years, I do not know how many businesses in this Province,

people who were working but who were all lessees, I do not know how much money

was paid to these gas and oil companies, but at the end of the day if we are not

going to give a commissioner the power and the strength to go in and see exactly

where they make their monies.... I can tell you of one incident one year where I

personally, in one business, paid an oil company $78,000 a year in rent -

$78,000 a year - which is $78,000 a year that they made off me and the people

who were involved in my business. If a pump breaks, you pay to fix it. If a hose

breaks, you pay to fix it. At the end of the day, how much money in the name of

goodness are these people raking in and making?

I do not believe for one minute that regulation of gasoline prices in this

Province is going to be of that big a benefit to us. The biggest benefit to the

taxpayers of Newfoundland and Labrador or to the men and women of this Province

who travel and who drive will be if the taxes that we pay federally and

provincially, that we pay when we buy a litre of gasoline, if those taxes are

not reduced then for my money the regulation of gas and oil prices in this

Province will go absolutely, positively nowhere. There will be nothing happen

whatsoever. It will be of no benefit to the taxpayers of this Province because

the biggest thing added on to the litre of gas in this Province, I believe it is

somewhere over 51 cents of what is charged now for a litre of oil is taxation. A

lot of these oil companies will jump and dance. If you want to send them a copy

of what I say today, they will call you and say that is utter nonsense, we do

not do this, we do not do that, we do not do something else.

At the end of the day, Madam Speaker, that is what they do. I can give you a

list longer than your arm or mine of Newfoundlanders and Labradorians who some

of these major oil companies have put out of business; how they have gone into

people who had their own spirit to operate their own business, their own spirit

to go out and negotiate contracts with all - not with all companies, but who had

the ability to go out with soft drink companies, or milk companies, or ice cream

companies, and negotiate their own deals. All of a sudden, overnight, bang-o,

those deals are all cancelled. Why? Does anybody think for one minute, when you

are told to buy a bag of chips to sell in your store at the end of the day, do

you mean to tell me that the oil company on the back end of this is not getting

a profit? If you believe that, I have land on Kellys Island that I will sell

you.

They are making money hand over fist, left, right, and centre, in every

direction that you turn. They make it in rent, they make it in telling you where

to go to buy your products, and at the end of the day legislation such as this,

if we do not reduce the taxation both federally and provincially on a litre of

gasoline, I do not know of any way that we can see the price drop. I am sure you

can think back, and I can think back , and everybody in this House on both sides

can think back - when was the last time that Irving Oil or Ultramar Canada or

Petro Canada or some of these places went bankrupt? They never have; they never

will. When there are stations in this Province, when again they get together -

somebody wants that corner over there and the corner over there is owned by

Irving Oil, and Ultramar wants the corner 500 feet up the road or three miles up

the road, the phone calls are made: We will exchange our site on such and such a

place but for that you must close up your store up here and give the land to us

and we will give you the land down here.

If somebody thinks at the end of the day that does not happen, Madam Speaker,

they are wrong, because it does happen.

AN HON. MEMBER: ( Inaudible).

MR. FRENCH: I cannot remember exactly where, but I know of several sites

in the Province of Newfoundland where I know and I heard in my dealings with the

oil companies that such deals were made. They will deny that, of course; they

will deny it forever and a day, but at the end of the day, Madam Speaker, what I

am saying here is the truth, the absolute truth.

As I said, 1996 was the year I got elected to this hon. House of Assembly. In

1996, I had a representative from the company that I represent come into my

office about three days after I was elected and say: Bobby, boy, can you be gone

by the end of February? I said: I have certain responsibilities in business, my

family has certain responsibilities in business, give me a chance to straighten

some of this out. Two days later he came back: All right, boy, you have until

the end of September.

I came in here shortly after the election, February 22, 1996.

AN HON. MEMBER: (Inaudible).

MR. FRENCH: I know a little bit about the oil business, Tom, yes.

I came in here and on September 30 or September 29, I closed. What I mean by

closed, I went out of business and on the thirtieth day of that month, the

company moved in their own people. They laid off - I had Newfoundlanders and

Labradorians working for me, to whom I paid more than the minimum wage. I

believe the minimum wage at the time was $5.25 or $5.75 an hour. I was paying

these people $6.75 and some more of them $7.25 an hour. They were called in by

the oil company and said: Listen here, if you want a job with us, we will pay

you minimum wage and if you don't there is the door. Most of the people who

worked for me took the door and went, which meant that again we forced

Newfoundlanders and Labradorians to become unemployed. That is fact, Madam

Speaker, because I know, I was in the industry, and I would like to think that I

know a little bit about the industry that I was in.

I can often remember sitting in my office getting phone calls from the oil

company on certain things that we would be selling in our store. We would get

calls wanting to know what I paid for it. I never would tell them because I had

some side deals made on my own with various companies whereby we got a rebate,

but once the oil companies decided, bang-o, overnight, that they wanted all of

that profit in their pocket, whatever deals myself or anybody else who worked

for the company I did, they went out the door.

I know people who would earn $100,000 a year because they were good

businessmen and business women, could earn as much as $100,000, almost

overnight, bang-o, they were down to - we will give you a salary of $35,000 a

year, take it or leave it. If you did not take it, you were out the door.

This is the way the oil companies are working in this Province. I don't

think it is right and I am sure there will be people in the oil industry in this

Province today who, if they hear what I have said in here, they will again be

very upset with me and so be it. They can be as upset with me as they like,

because what I am saying today is what I know and it is what I know first-hand.

To say that we are going to give somebody a right to regulate the price of

gas and oil in Newfoundland and Labrador, I do not think it is going to benefit

us, I do not think it is going to benefit the people of this Province. If we are

not going to go in and examine the books of these companies to see how much they

are making - I realize that they have to get money, their capital money back,

but there comes a point in time when they make more than the capital money they

have invested into some of these businesses.

When these companies can go out and rent a piece of land and pay people - I

think one license I knew of was something over $250,000, just to rent the land

so they could get the site to put up a gas station. After fifteen or twenty

years that land reverts to the owner, whatever is on the land reverts to the

owner, providing the oil company does not want to go and negotiate another deal.

These are things that are happening in the oil industry in this Province. Unless

we go in and examine that, and if we are going to set a limit on how much we are

going to allow this crowd to make, don't any of us in this House of Assembly

be fooled or even tricked into thinking the only way this crowd has of making

money is because of what they charge for gasoline and oil, because that is not

true. That is one of the biggest lies that these fellows could ever tell you.

Yet, they are regulating the price of milk, they are regulating the price of a

bag of chips, and whatever profits are into that, you are told that you must go

to ABC limited, and that is where you must buy everything that comes into your

store to sell. If they come in and find other items on your shelf that came from

somewhere else, at the end of the day there will be a ruckus.

I will just tell you another story of a good friend of mine, who I did a lot

of business with, a good local Newfoundland company, whom my two businesses did

a tremendous amount of business with, year in and year out, was in Corner Brook

one time putting off his show on behalf of their company. Up turns my

representative from the gas and oil company, walks in and says to the owner of

this company: You know, everybody is not playing the game with us. The guy said:

What do you mean? He said: Everybody is not playing the game with us, because

there are two people we have who have stations, who are still buying their

products off you. They should not be buying their products off you; they should

be buying them off somebody else.

The reason we were told that we should have been buying it off somebody else

was because the oil company where we were dealing was making no money, but if we

went to where they told us we had to go, they again made money.

If we do not see the books of these companies, of where they are making their

money and exactly how much money they are making, to me, it is frightening. It

is frightening how much money this crowd can make. It is frightening, at the end

of the day, what they can do with their money.

I have been through that and I have been there, Madam Speaker. I know how

quickly they can walk out your door and leave you high and dry. They will leave

you with bank loans or lines of credit at your bank, where you needed those

credits to pay off - you had to use them while you were in business. They will

leave you with that. They will give you absolutely nothing. At the end of the

day, you are dirt under the oil companies feet. If we do not really get in there

and we do not really examine what transpires with a gas and oil company in this

Province. Bring down the price of gasoline - what a joke. At the end of the day,

we will never do it.

It is very interesting to look at - you know, we have Dennis Browne appointed

as Consumer Advocate. I can remember several years ago when he went around this

Province doing the thing, and I am sure he spoke to the caucus on the other side

of the House, and he came in and he spoke to our caucus. Mr. Browne and I had a

pretty good chat about the gas and oil business in the Province of Newfoundland.

Madam Speaker, we sold a lot of gasoline in the business that I was in. I had a

good chat with Dennis Browne and he said: You are the kind of fellow who I want

to talk to. We will be back to you later.

Well, the next time Dennis Browne calls me and asks me for an opinion on gas

and oil business in this Province, it will be the first time. So, how complete,

I wonder, was his study? Maybe the question that I should be asking here today

is: How much did this government pay Dennis Browne to be a Consumer Advocate. I

am sure the answer to that question would be very amazing. How much did Dennis

Browne charge us to be a Consumer Advocate for the people of this Province? How

much did he charge us, Madam Speaker. I believe the amounts would be

frightening.

Where are we going with this legislation? A year ago we had the now Premier

of this Province saying: Couldn't work, wouldn't work, never worked. The

only place in Canada we have this is in Prince Edward Island. Forget about it,

it is useless. We are not going to have it. All of a sudden, he gets into a

leadership convention and I believe that all we are doing is relaying false

hopes to the people of this Province, because where are we going? How much are

we going to reduce the price of a litre of gasoline, or the price of a one litre

can of oil, which you have to put in your car from time to time?

MADAM SPEAKER: Order, please!

I have to remind the hon. member that his time is now up.

MR. FRENCH: Pardon?

MADAM SPEAKER: Your time is up.

MR. FRENCH: Thank you very much, Madam Speaker.

MADAM SPEAKER: The hon. the Member for Bonavista South.

MR. FITZGERALD: Thank you, Madam Speaker.

I rise today to say a few words on Bill 4,

An Act Respecting Petroleum

Products.

There is nobody here, I am sure, either on that side of the House or this

side of the House, who is going to be against a piece of legislation if it

reaches out and helps those in Newfoundland and Labrador who are experiencing

hardship because of the price of gasoline and the price of heating fuel.

Speaking of the two, I guess, heating fuel versus gasoline, I think the one that

I would be most concerned about would be the cost of heating fuel. A few years

ago, when the price of gasoline wasn't near what it is now, we had the cars at

that time with the big motors, that were real gas guzz