VOL. 2 PRELIMINARY UNEDITED TR.'I.NSCRIPT HOUSE OF ASSEMBLY FOR THE PERIOD: 3:00p.m. - 6:00 p. m. MONDAY, APRIL 14, 1980 NO. 21

April 14th., 1980 The House met at 3:00 P.~. Mr. Speaker in the Chair. MR. SPEAKER (Simms): Tape No. 719 DW - 1 Order, please! Ron. members will recall that prior to the Easter adjournment a point of privilege was raised in relation to a member1isclosing in an open session of the House,the proceedings of the private session of the Hous~. After having researched the question, it appears that it has not been the subject of any previous ruling in this House. Traditionally the private session has been held each day before the doors of the House are opened to the public.

There is never any recording of what transpires during the private session and no reference or record is made in Hansard, or, indeed, in the minutes of the House. I understand also that in the Canadian jurisidiction only two other provinces have similar private sessions and they are regarded as privileged sessions. Our Standing Orders also are silent in relation to the private session and reference to the usages and customs of the House of Commons of Canada is not of any help because there is no similar private session.

Sir Erskine May's Parlia- mentary Practice does reveal references to pro- ceedings in secret session,although these appear to be during war~yaa~s. Therefore,as there is no clear precedent oc ~aference to guide me in this particular matter,and in view of the fact that it would perhaps be unfair and difficult to rule a against something which members themselves are not aware of and have no rules to guide them, I would hesitate to rule that such reference by _~ member to a private session •ould be a prima facie breach of --·-- privilege at this time. 1918

April 14th., 1980 Tape No. 718 DW - 2 MR. SPEAKER (Simms): I would,however,like to recommend to the Committee of Rules and Procedure of this hon. House that they study this i~portant matter with a view to considering inclusion of such a rule governing private sessions for our own Standing Orders so that all members,including the Chair 1 may have some assistance and guidance in the future on this matter.

I have also for the attention of hon. members a communication addressed to me. 'Thank you for your letter of March 4th. informing me of the resolution of the House expressing congrat- ulations to me on my retirement. I am most grateful to the ~ouse and I should be glad if you would express my appreciation and thanks. Furlong.' Yours sincerely, R.S. STATEMENTS BY MINISTERS MR. SPEAJ::ER: The hon. the Premier. PREMIER PECXPORD : Mr.

Speaker,! listened with interest during lunch time to the Throne Speech in Ottawa with a view to seeing whether in fact anything specific would be forthcoming as it related to a very important matter which affects many Newfoundlanders and many Canadians.

And given that, number one, the Throne Speech does not lend itself to specifics and 1 two, the government of the day in Ottawa did not see to lend to this Throne Speech any specifics, I think it ia ~~ important for me 1 both as Premier and as acting Minister of Municipal ,Affa.irs and Hc~sing 1 to put on record a number of intiatives that the Government of Newfoundland intends to take as it relates to a very important matter. We are becoming increasingly ~oncerned, Mr.

Speaker, respecting the abnormal increases in interest ratesoover the past several months. dramatic increases in the cost of financing 1919 While these

April 14, 1980 Tape No. 719 t;"M - 1 PRL~IER PECKFORD: adversely affect most aspects of our economic life and continue to fuel inflation, my colleagues and I are particularly concerned with the more immediate and profound effect of these high interest rates on the affordability of housing. This problem essentially contains two dimensions. Firstly, the ability of young families to own a horne is becoming increasingly frustrated by this tremendous rise in the cost of mortgage financing.

This cost, added to already high construction and land costs makes the dream of home ownership for most young families vir~ually impossible to attain. Secondly, the real possibility that certain home owners seeking to re-finance mortgages at these very high interest rates may find themselves in a dilemma for which the only answer may be the sale of the house, or even foraclosure.

The situation faced by many home owners renewing conventional mortgages at the present time is that incomes have not risen sufficiently to offset rising household costs and thus only limited disposable income is available to meet the large increase in the cost of the mortgage attributable to the higher interest rate.

Given the fiscal constraints facing ~~e Province which have been detailed by the Minister of Finance in his recent Budget Speech, it is obvious that the Provincial Treasury is simply not in a position to provide financial assistance to homeowners who may find that the cost of meeting mortgage payments are beyond their means. Despite this, this government has over the past couple of years introduced the Provincial Home OWnership Assistance Programme and the recently announced Rural Mortgage Lending Programme to responQ"to certain aspects of the housing problem.

Statistics available to me indicate that in Newfoundland and Labrador d~ing 1980 in excess of 2,000 mortgages will be subject to renewal. In many instances these mortgages were arranged for a five year period, 1920

.~pril 14, 1980 'l'ap e No . 719 NM - 2 PREMIER PECKFORD t and,as suggested,the effect on family finances is ·expected to he severe in many ca ·ses. I am of the firm opL'lion that direct and immediate action must be taken by the Government of Canada to either introduce measures to stabilize the impacts of its f.loating interest rate policy, or possibly to implement direct measures to address the specific housing problems created by the .se high interest rates.

While rec .ent decisions by the Government of Canada will provide some measure of relief to families who arranged mortgage!;! under the AHOP Programme, I deem it imperative t:.o express to this hon. House the vez:y serious concerns relating to the other potential and actual homeowners who axe also suffering from ·this very serious problem. In this regard, my coHeague, the hon.

Minister of Municipal Affairs and Housillg some weeks ago c0l11111unicated with the federal minister responsible for Canada Mortgage and Housing Corporation our sincere concerns regarding these l!latters and requested a meeting at the earliest wssible opportunity. As well,my colleagues recommended to the hon. Mr. Cosgrove that the matter of interest rates was a national problem and should perhaps he beSt .dealt with in the con­ text of a fe<;l.eral/provincial conference. While 1921

April 14,1980 Tape No. 720 AH-1 PREMIER PECKFORD: Mr. Cosgrove has not yet responded to this particular proposal, I understand that discussions will be held in Ottawa within the next two weeks between the Minister of Municipal Affairs and Housing (Mr.Windsor) and the federal minister responsible for CMHC.

Clearl~ if prompt and positive action is not taken by the Government of Canada to stabilize interest rates and hopefully to introduce measures to ensure that in the immediate term,at least,interest rates will commence to decline 1 the situation with respect to mortgages generally will deteriorate with all the disastrous social and economic consequences which will accrue both to individual families and ~~e residential construction industry as a whole. Mr. Speaker, I am convinced that all members of this han.

House share the concern of my government in this respect and that there will beunanimity that this government demand from the federal government a firm resolution of this critical and fundamental question. SOME HON. MEMBERS: MR. SPEAKER (Simms): MR. JAMIESON: I have copies for hen. members. Hear, hear! The hen. Leader of the Opposition. Mr. Speaker, since I have not either seen the Premier's statement in advance nor indeed had an opportunity to peruse the Throne Speech delivered in Ottawa earlier today,! am not sure just exactly what action if any the federal government is going to take.

I do say to the hen. the Premier and to this House that it is interesting that this is the first time, given six or seven rate increases that occured during the regime of the previous government,that this government has seen fit to stand up and talk about interest rates in this House. However, be that as it may,the truth of the matter is that of course the situation that has been outlined is a serious one. Whether or not it is going to be solvable by a federal-provincial conference in the single context of that one item I doubt very much.

But at the same time I think it illustrates clearly and unmistakably the necessity for a continuing good relationship between the governments of the provinces and 1922

; April 14,1990 Tape No. 720 i\R-2 MR. JAHIESCN: the federal goverrunent,wha .te ver ';.he political stripe happen to be , becau s~ what we are in he~e is a most se ~ious situation, r.ot one .merely confined to Ne•.;four.dland but: one which of course is worldwide in many of its impli ca tions .

And conse q~.:ently, therefore ,it is rat~er difficult on the one hand to see how the governreent of this Province can indeed in an area which is exclusively a federal jurisdiction, that is in =rrns of the money supply and the like , ho•,; it. can insist. upon some kind of i.!lterventioo there and at the sa .me time expect that governi'M!nt to be co-operative in a :,;ide range cf ot:J.er activit ies as well. !:laving said all of that,o! course once again ,as with so many statements from this governmen t you cannot argue •.;ith the basic mot.'lerhood t!l.eme. if you wish 1 of this !)articular document.

Unli.lte some hon. members , I have had the opportunity in the last two or three weeks to meet with not only ,may I say,householcers and people with mortgage ?roblems of that size, but I had in tended in che Sudget debate wh .en it come s to speak in very thorough te=s, I hope ,cf 1923

April 14, 1980 Tape 721 EC - 1 MR. D. Jk~IESON: my deep, deep concern for small business in this Province.

It seems to me that the situation with regard to the 2,000 mortgage holders or thereab~uts is a crucial and a critical and a very sad one, but even sadder in many respects is the likelihood that many sources of employment are going to be denied to our people through the loss of small businesses through no fault of their own. 'Ihis is not the position Qr the time for me to attribute blame or to indicate why some of these situations have emerged, but I do suggest to this government,and I suggest to my colleagues as well - and I know I do it with their total agree!Qent - that if we did nothing else in the next little while in this Budget but address ourselves to this question, we would be certa.inly helping at least to focus and to get some kind of recognition of just what the nature of the problem is.

I say to hen. members of this House right now that if the hen. the Premier wishes to add to that statement the impact on small business in this Province today, the 2,000 would probably be 8,000 or 10,000. I may, with the indulgence of the Chair, recall that two of my colleagues and I met with a company president or a head of an organi2:ation just a few days ago with a turnover in the range of $3 million to $4 million and a significant number of employees and he is incapable of keeping up with what the interest rates and the like are.

So that while this is welcome in the sense of an admonition to the Government of Canada with which we associate ourselves - I have no difficulty in that regard at all - I say too that the most pressing problem for Newfoundland today is how we get our small business community and our homeowners off this incredible hook which does not seem to be getting any better. soME fi<xi ~ MEMBERS ,­ MR. SPEAKER (Simms): Hear, heart The hen. the Minister of Finance. OR. J.

COLLINS: Mr, Speaker, during the Budget Speech, I all.uded to a proposal put to the receiver of the Come By Chance refinery by Petro-Canada, and I also alluded to an agreement made between the Province and Petro-canada subsequently. I would now like to table both the letter of agreement and a copy of the letter of intent. 192ft

April 14, 1980 MR. SPEAKER (Simms) : MR. D. JAMIESON: Tape 721 EC - 2 The hen. the Leader of the Opposition. Mr. Speaker, since it is only a tabling of documents I will take your direetion, but presumably since it was done under Ministerial Statements, it is appropriate for me to say something.

And I want to say with ve:ry considerable disappointment, ve:ry considerable disappointment, that the hon. the minister saw fit in '1li'f constituency, involving members of my constituency, to hold a meeting at which they were briefed on the contents of this document and the nature of this arrangement and that I was not asked or invited to attend that meeting. SOME RON. ME."'BERS : Hear, hear! MR. SPEAKER: Order, please! MR. D. JA.'!IESON: It seems to me that having, Mr.

Speaker, not only being the initial advocate of Petrocan' s intervention in t.'lis, but also, I may say, behind the scenes helping in some respects to get Petroc:an interested, it seems to me the very least that the government ought to have been prepared to do would be to 192S

April 14, 1980 Tape ~o. 722 SD - l MR. D. Jk~ESON: invite me to the meeting at which the various mayors and others involved,instead of having me get it secondhand and,by the way,having them all come back to me after ~~e event and ask me for the kind of advi~ that I perhaps might well have been able to give - SOME HON. MEMBERS : Hear, hear. MR. D. Jl>.MIESON: -out of my experience,if I had been invited to attend the meetin ~ . MR. E. ROBERTS: Politickinq by the government. SOME HON. MEMBERS: Hear, hear. MR. SPEAKER (Si:nms): The hen. Minister of Transportation and Communications. !K.R . C. BRET'I': Mr.

Speaker, early in 1979 the Eastern Provincial Airways (1963)Limited applied to the Canadian Transport Commission for authority to serve the additional point Toronto from Halifax under licence no. ATC 1245. When EPA made its application,!, as Minister of Transportation and Communications, wrote the Secretary of the Air Transport CoiiBIIittee of the CTC notifying the Committee of our support of the EPA application.

Our S\JPport was somewhat c:ondi tiona! because while we were in favour of EPA gaining access to Toronto 1 we at the same time wished EPA to maintain and i!I'Prove its existing levels of air service in the Atlantic region. "!he department had, for the past number of yea--s, constantly counselled the CTC ,that it was mandatory that EPA achieve traffic rights on the high density Halifax-Toronto route in order to widen its revenue base so it could continue to provide service to its regular customers and keep its multiplicity of shorter haul sectors that are at best only marqinally successful.

On November 30th, 1979 1 the Air Transport Board issued a notice that a public hearing would be convened on January 21st, 1980 to consider applications by both CP Air and EPA for traffic rates between Halifax and Toronto. Between ,ovember 30th, 1979 and January 21st, 1980 a joint intervention to the CTC on behalf of the four Atlantic Provinces was submitted. 1925

April 14, 1980 Tape No. 722 so- 2 MR. C. BRETT: In essence , the intervention was in support of EPA and the rationalefor the position was to reiterate that support for improving the economic base of the regional carrier with requirement that cross subsidization be used to ensure adequate service levels on the interregional air network. At the public hearing, Premier Buchanan, on behalf of the four Atlantic Provinces, appeared as a public witness and read into the record our interventi 0n. The decision of the CTC on these applications is repugnant to me and I believe most unfair.

It is unrealistic to expect a regional air carrier to provide services on short haul,low density routes and still continue in business without having some long haul, lucrative routes. I can assure the House that this decision will be appealed most forcefully. In reviewing the decision with the hon. the Premier this morning, I have ascertained that the Premiers of the other Atlantic Provinces will join him in requesting the CTC to reassess its decision at a very early date. SOME HON. MEMBERS : MR. SPE1\KER (Simms) : MR. D. JAMIESON: Hear, hear. The hon. the Leader of th~ Opposition. Mr.

Speaker, it is consistent, at least with what I have been saying all along, that I agree with the government when I see that they are doing something with which I am in favour,and disagree otherwise . So, just having said what I did a few moments ago, let me in this case say that I echo the sentiments entirely. I simply find the decision of the CTC in this case '>SU%prising 1927

April 14, 1980 Tape No. 723 EL - 1 ~Jt. D. JAMIESON: to say the least and indeed some­ what irrational. If I can go a little further, I find it also re­ pugnant to have an organization such as Canadian Pacific Air indicating that they are now going to be flying coast to coast and identifying Halifax as being the East coast of this country. I think that if Canadian Pacific wishes in that context to be regarded as a national carrier, then it should remember ~~at the Province of Newfoundland and Labrador is here and that they should not be making the kinds of statements that they are.

My concern, quite frankly, is obviously not so much, although it is important with the future of Eastern Provincial Airways and its-profitability, as it is my conviction that unless Eastern Provincial Airways is given some lucrative route of this kind,then I fear that the service to Newfoundlanders is going to suffer, and particularly the service to the people of Labrador, if I may be so bold as to say so, in answer to the hon.

Minister's statement.· Obviously, proceeding through the route of appeal to the Canadian Transport Commission, I suppose is hazmless,to say the least; it will at least make them aware of what the position and the views of this Province are, but I would suggest that he look further into the Act and he will discover that there is also an appeal to the Government of canada direct and it seems to me that ultimately and,probably most effectively, that is where the matter ouqht to be decided.

May I also presume to offer some advice in the sense of saying that I think at ~'lis stage in the gaae, it is adequate for us to register our disagreement and our dislike of this particular -asure and not to prejudge what kind of an outcome such an appeal may ha.ve, I hope in the forseeable future, in the very early 1928

April 14, 1980 Tape No. 723 EL - 2 ~!R. D. JAMIESON: future. AN. HON. MEMBER: Hear, hear. MR. SPEAKER(Sil!llliS}: The hon. the Minister of Forests, Re- sources and Lands. MR. C. POWER: Mr. Speaker, the hon. House will recall that when considering the continuing i~act of the spruce budworm on Newfoundland's forests,goverr~nt declared its beliefs before making a definiti~ decision as to the long-term forest protection alternatives.

It would be essential that all available scientific, medical, economic and social information relative to the insect infestation and damage and possible control programs, be thoroughly studied and evaluated by an independent body and that ample opportunity for public input must be provided. Of particular concern to government was the fact that none of the many reports presented to date had adequately addressed long-term implications of chemical spray programs , in particular from a human health and environment point of view. Mr.

Speaker, after careful and lengthy deliberation, government reached the conclusion that,while recognizing the importance of the forest industry to the Province, and though res- pecting the opinions of the various independent committees and groups that have studied the problems and provided advice, the need to protect the forests had to be rationalized with the need to ensure the continued geed health and well-being of the citizens of this Province. GoverDIIIent subsequently announced, Mr.

Speaker, its zintention to establish a Royal COI!allission to fully investigate all aspects of the spruce budwoz:. epidemic, a comaission t.h.at would not olll.r·exami.ne all scientific kinds of criteria but one which would also go out to . the general public of N-foundland and Labrador, and in fact in C~da 1 to seek the advice and opinion 1929

April 14, 1980 Tape No. 724 NM - l MR. POWER: of our people. In addition to the commission,we would also examine all aspects of forestry management and protection so that a full utilization of the forestry resources might be attained. Mr. Speaker, in order that all concerned factions would be adequately represented 1it was dete~ined that the royal commission should preferably consist of three members~ one representative of the medical profession, one of the forestry profession, and a third who would also act as chairman, a person who would be well versed in social sciences.

All three persons would also have to be people of independent and unbiased opinions and integrity. I am now pleased to announce, Mr. Speaker, that th~s gover~~ent has appointed the Royal Commission on Forestry Management and Protection, and that we have been fortunate in securing persons of considerable public standing and professional expertise to comprise its membership. Mr. Speaker, Or. Cyril Poole, Principal of Memorial University's Sir Wilfred Grenfell College in Corner Brook,will be the Chairman of this royal commission. Dr. W.J.

Carroll, Director of the Newfoundland Forest Research Centre at the Canadian Forestry Service, and Dr. A.T. Rowe, Professor and Chairman of Family Practice at Memorial University of Newfoundland, Health Sciences Complex, will be members of this royal commission. Or. Poole was born on Pelleys Island and following his early education he received his B.A. degree with first class honours, became a gold medalist at Dalhousie University in l953,and in 1957 received his doctorate in philosophy and political science degree at the University of Toronto.

He has held several univeristy positions since then, including ten years at Bishop's University, Mount Allison University, and Memorial University of Newfoundland, where, as already noted, he is presently Prinicipal 1930

'-.-.-:.~ ~~-..- __ ,_.. April 14, 1980 Tape No. 724 NM- 2 MR. POWER: of the Sir Wilfred Grenfell College in Corner Brook. Dr. Poole has also been active, Mr. Speaker, in other areas including serving as President of the Humanities Association of Canada from 1973 to 1975. He has also written several articles published in important publications. Dr. carroll was born in Bonavista. Following his early education he was employed as a school teacher in Northern Newfoundland and also worked for a period in the woods industry.

He subsequently attended Memorial University College, Dalhousie University, and MacDonald College, and McGill University. Ee completed a Master Science degree majoring in entomology. Dr. Carroll joined the Public Service of Canada in June of 1949 as a forest biologist at the ForEst Entomology Laboratory in Frederickton, New Brunswick, and was subsequently transferred to Corner Brook in 1953 as officer in charge of the Forest Biology Mr. Speaker, in 1962 he completed his Doctor of Philosophy degree at New York State College of Forestry, and in 1966 he was transferred to St.

John's as the Director of the Newfoundland Forest Research Centre. He has been a recipient of both the 6entennial Medal in 1967, and the QUeen's Jubilee Medal in 1977. Dr. Carroll will be receiving an executive transfer from the Federal Department of Environment to the royal commission. 1931 -·--·~-1,,;: · -. .... --.-- •:.--~~-- ::: --.. ~ ~----~,-:--.· -- -- ._,- .-'"'- ":" ""~~~-~~----":""'""'"

April 14, 1980 T2.pe No. 725 ow - 1 MR. C. POWER: Dr. A.T. Rowe was born in Heart~s Content and following his early education attended Memorial University College and the University of London, St. Mary's Hospital. After interning for a period at the St~ John's General Hospital,Dr. Rowe did post-graduate studies in England and at the University of Toronto prior to establishing general practice in Carbonear,where he was subsequently appointed Medical Director of the Carbonear Community Hospital.

He is a past President of the Newfoundland Medical Association, a former Chairman of the Newfoundland Community Health Council,and has served on the executive of the Canadian Medical Associa- tion. In 1971 Dr. Rowe was elected as a member of this House of Assembly and in 1972, Mr. Speaker, was named Minister of Health for this Province until his resigna- tion from public life in 1975. Re is presently Profes- sor and Chairman of Family Practice at Memorial Univer- sity of Newfoundland. Dr •. &owe has many extra-curricular activities related to his work and to his community.

He has been a member of several community organizations and has honourary membership in the Canadian Red Cross Society. Mr. Speaker, the terms of reference for the Royal Commission have been broadly established and while they may be subject to some refine­ ment when the commission commences its work,they are essent- ially as follows: (

a) to review the current status of the forestry industry and the intensity of forest ma~agement within this Province and indentify conditions neeessary for long-term viability of the industry and a sustained flow of forest product and services for the economic and social well-being of the Newfoundland public) (

b) to review and assess the current spmace budwerm 1932

April 14, 1980 Tapa 725 ow - 2 ~R. C. :·POWER: situation and its affect on the forest industry in light of currently p~acticed management and utilization standards and in light of a practical future level of intensive forest managements; (

c) Mr. Speaker, is to review and ascertain the impact of available forest protection techniques,including chemical sp~ays,on human health and the environment both in the short and long- term; (

d) Mr. Speaker, make recommendations to government on a course of action which is compatible with scientific forestry industrial ~equirements, economic and social well-being of the people and the human health and environment safety requirements. And (

e) Mr. Speaker, is to ensure that a b~oad public input will be sought to develop an assessment of the wishes of the people of Newfoundland as to how they perceive the management and use of the forest resources and how they perceive protection of it; and (f), Mr. Speaker, is to seek and receive briefs and submissions from various interest groups from both in and outside of this Province. The commission will start its work as soon as possible and it is hoped, Mr. Speaker, that it may be in a position to report its findings to government by December 31st., 1980. 1933

April 14, 1980 Tape 726 EC - l SOME HON. MEMBERS: Hear, hear! MR. SPEIIKER (Simms): The b.on. the member for the Strait of Belle Isle. MR. E. ROBERTS : Mr. Speaker, in the absence of our colleague, the member for Windsor - Buchans (Mr. G. Flight), who normally speaks for us on matters relatad to the forestry and forest policy, perhaps I could say a few words by way of comment in response to tile minister's statement.

Let me first of all make it quite clear that the tilree men who have been appointed by the government to serve on this commission are estimable gentlemen, all well known to the people of t:.i.is Province. Dr. Rowe - and I a"' glad the .government have not held it agains~ him that he and I ·had _.a great grandmother, or something, in common; were second cousins twice removed or some such thing - Or. Rowe served with some distinction as a member of this Reuse for a period of time. MR. J. CARTER: (Inaudible) • MR. E • ROBERl'S : I alii sorry. The gentleman from St.John's North .says something again. MR. F.

STAGG: We will have to review the Committee. MR. E. BOBERTS: I would think the hen. gentleman from Stephenville (Mr. F. Stagg) well ought to review the Committee because I have heard his relatives say that they, too, could choose their friends but not their relatives. SOME HON • MEMBERS : Bear, hear! MR· E. ROBERTS: But, Mr. Speaker, tb.e point is that these three members are estimable gentlemen and they do not - MR. STAGG: (Inaudible). MR. E. ROBERTS : I aJI\ sorry. -- -- --- MR. STAGG: 'ftlat is DOt true (inaudible) MR. E.

BOBERTS: I know that love is blind, but I would not have said that pride is blind in the case of the hon. IIIBIIIbar far Stephenville, SOME BON. MEMBERS: Hear, hear! g, - E. BCIIBKrS : It would have to be; 1331t

April 14, 1980 Tape 726 EC - 2 MR. SPEAKER (SiDUIIS) : O!:der, please! MR. E. ROBERTS: Really, I would get ~~ead much more quickly if the hen. gentleman did not harass me and browbeat me in this way. SOME HON. MEMBERS : Hear, hear! M.'l.. E. ROBERTS : He was just carried away, Sir, by being on E.P.A. yesterday. Anyway, Mr. Speaker, the point is that I want first of all to say that these are three eminently qualified men and I thiM the government have done well to enlist their services.

I would say to these three men ~~at Newfoundland and Labrador, the people of this Province, are indebted to them for having taken on.a task which is prObably an impossible task. And that brings me wi~~ inevitable and flawless logic to the second point I wish to make, which is one that my colleague from Windsor - Buchans (Mr. G. Flight), I believe, has made with considerable force and considerable effect, and that is that this commission as it was originally conceived, is of no value at all.

Now I say 'originally conceived' because the government have broadened the terms of reference and instead of being simply a commission to study the budworm situation and some responses to it, which I believe is what the minister had originally envisioned, it has nov been broadened and we are going to have - I think this is the third Royal Commission we have had on forestry in this Province. We had the Kennedy Commission back in the mid-l950s, we had the Rousseau Commission - not 'Joe' J:;>ut 'Ziv', z-i-v - the Rousseau Commission in the late 1960s and now in the early 1980• we are going to have the Poole .

Commission. And that is good, you know, I have 110 a%gUIIIII.Ilt with that. I.t is one. more doCWDEmt that will take its place and will doubtless have some value. Unfortunately, it does net help with the budworm situation, and, of course, the government adopted this expediency in an effort to have to avoid the hard business of taking decisions. 1935

April 14,1980 Tape No. 7'27 AH-1 MR. ROBERTS: You know,it was said once that Nero, an emperor of Rome, fiddled while Rome burned. Well, of course,the minister and his colleagues in this instance are studying while our provincial forestry resources are being ravished and destroyed. The only thing I would say , Sir, is that the government ought to ask the Royal Commission­ they cannot direct them-but to ask the Royal Commission to make an interim report at the earliest possible date on

Section B of the terms of reference, the one. dealing with the budworm. I will say now to the minister that there is no way in which the report of this Royal Commission can be tabled by the 31st of December l980 1which is only, unless I am completely bad in my mathematics, seven and one half months away. The Royal Commission will not have been organized by 31st of December 1980 given the speed with which Royal Commissions of their very nature move. And molasses going uphill is a speeding substance,it is faster than Superma~, compared to the average Royal Commission coming to grips and getting a problem out.

So given that we have a serious situation with the budworm distruction in this Province , given that the government feel, in our view unwisely, but given that they do feel that they have got to have some more advice in the hope that somehow they will get off the hook of having to decide between ScyLla and Charybdis, then I would suggest to the minister that he ask Chairman Poole and the members of his commission to submit an interim repor~ 1 to direct their attention first of all to

Section Band to submit a interim report as quickly as possible, and in any event not later that 31st of December 1980. If not,Mr. Speaker, this Royal Commission will be the longest running act we have ever seen and by the time we get a report in and then by the time the government acts, whatever government happen to be in office,act upon it, there will be precious little left of our forests. Heaven knows we have had enough damage with the budworm now. I do not pretend to know what the answer> but I will say to the minister that the Royal Commission is not going to find any that are not already out.

What is needed is a government with the courage and the dedication and the determination to decide. SOME HON. MEMBERS : Hear, hear! 1936

April 14,1980 MR . SPEAKER (Simms): MR. SPEAKER (Simms): MR. RIDEOUT: MR . SPEAKE R : Tape No. 727 AH-2 Any fur th er st at emen ts ? 0 0 0 The hen. Leader of the Opposition. Mr. Speaker. The hen. Leader of the Opposition yields to the han. member for Baie Verte-White Bay. MR. RIDEOUT: Mr. Speaker, ! have to leave shortly because of a personal problem and would therefore request, if hen. members would permit,that I have unanimous consent to direct to routine Order c, the Presentation of Reports By Standing and Special Committee~ before we proceed with the Oral Question Period. MR. SPEAKER: AN HON. MEMBER: MR.

SPEAKER: Bay. MR. RIDEOUT: Is it agreed? Agreed. The hon. member for Baie Vert~-White Thank you. Mr. Speaker, pursuant to Standing Order 84 1 I have the honour of presenting the report of the Public Accounts Committee of the House of Assembly for the financial year ending March 31,1978. Copies are forthcoming. MR. SPEAKER: MR. JAMIESON: ORAL QUE STIONS We revert back to oral ~~estions. The hen. Leader of the Opposition. Thank you very much , Mr. Speaker. My question is for the hen. the Premier.

Following upcri ·his comments with regard to interest charges and the possibility or advisability of a federal-provincial conference,and given the succession of statements we have heard from ministers over the last two weeks of the adjournment with regard to the need for federal-provincial consultation, 1937

April 14, 1980 Tape No. 728 SD - 1 MR. D. Jk~IESON: is the Premier now in a position to indicate any kind of

schedule of formal meetings,either bilateral that is , between the Government of Newfoundland and the Government of Canada,,-,r on a larger scale,which would address itself to what are clearly as a result of what we have seen from the budget 1 u_~ent matters with regard to further federal/provincial co-operation across a whole range of issues? MR. SPEAKER (Simms): The hon. the Premier. PREMIER PECKFORD: I thank the Leader of the Opposition for his question, Mr. Speaker, on that. As my statement today indicates as it relates to mortgage rates,ten days ago the Minister of Municipal Affairs and Housing (Mr. N.

Windsor) contacted Mr. Cosgrove,and I think most of the new ministers in Ottawa have either been busy at other things, just getting rearranged and so on, or some of them in Quebec on the referendum thing and they have not been around and we have not heard back from any of them. Mr. Cosgrove is one, the minister responsible for DREE is another whom we have contacted to try to set up a

schedule of meetings. And we are in the process of being in a position within a weelt or so to present a total package to the Federal Government 1 renewed and refined from what it was last Fall so that they would have that information at their fingertips. The only thing we have had back is some indication, as I indicated in my statement, of a federal/ provincial conference on housing and mortgage rates. But what I am more interested in is having the Ministers o! Finance for the provinces and for Canada sit down aDd talk about the whole economic situation as it relates to interest rates in general.

I notice in the Throne Speeck today, for example, that there is no mention of helping the 9mall businessman that the Leader of the Opposition talked about in his response to my statement~ none whatsoever. The only reference to it was that they were going to in=ease the ceiling on the loans from $75,000 to $100,000 or something- $1SO,OOG-whicb in its turn is okay but it does nothing because the cost of the money is so expensive 1938

April 14, 1980 Tape No. 728 so- 2 PREMIER PECKFORD: that it might on the other hand inhibit the fi~herman or the farmer from going ahead and borrowing from $75,000 to $150,000 given that high a rate. So I think it is alDDSt:, .better if you are going to do something : to leave the ceiling where it is or up it a tiny bit ,but to address the interest rate problem because that is where the great problem is today. So to sum up, we have ASTRA meetings as it relates to the mortgage rates.

We are in the process, and I talked to the Premiers again this morr~ng of Nova s~otia, New Brwlswick and PEI, of asking for a meeting if we can get it of Finance Ministers to deal with the whole question of interest - rates to see what we can jointly do or what the Fe~eral Government can do on its own or whatever to address it. On OREE, we are -.;aiting for a response now to meet with the minister. MR. ,D. J1UUESON: MR. SPEAKER (Simms): Leader of the Opposition. MR . D. JAMIESON: Supplementary, Mr. Speaker.

Supplementary, the hon. the My supplementacy is , the hon. the Premier might recall that he told me some weeks ago and he just made a further reference to it, that in fact the docUJnent which fanned the basis :for the First Ministers Meeting, bilateral, .between the Government of Newfoundland and ~he Government of Canada was in the process of being updAted, that obviously is now going on. What I am asking now is whether or no"t: the Prelllierr (

a) has made any overtures to the Prime Minister for a date or a time or is he waiting until the dOcument is updated before pursuinq that particular course? In other words, when it is likely that be, that is the Premier, Mr. Speaker, would be ready for such a meetinq? MR. SPEAKER: The hon. the Premier. PREMIER PE~RO: :t tbouqht in the first instance that I should deal - because some of the matters are very specific and I would not want to bother the Prime Minister vi th the Coast of Labrador Aqreement if I did not - I alr.ady had "' meeting -let me start again. I already had a meetinq with the minister in the 1839

April 14, 1980 Tape No. 728 SD- 3 PREMIER PECtcFORD: federal Cabinet representing Newfoundland, the hon. Mr. PDmpkey, the Minister of National Revenue, in Labrador . in which I went through all the major issues facing the Province today - the DREE Agreements, things outstanding and so on. And I indicated to Mr.

Rompkey at .the time that my intention was to refine that document and then to have it sent to the Prime Minister's office and to his offi=e and to the relevant ministries and then to break out of that some of the important issues that I have to sit down with the Prime ~~nister on dealing with Labr~uor power, dealing with offshore, dealing with the fishery, the big questions; let the rest be dealt with by the ministers at their respective levels and that I will be ready to do that in a couple of weeks. That document will be finished next week and so will be off to the Prime Minister and the various ministries.

In the meantime, not to waste any time on immediacy and practical problems, we have approached the Minister of DREE, we have approached the Minister of Housing, and, I forgot to mention~ we approached the Minister of Transport, Mr. Pepin, who, by the way, is the only minister to date who has sort of responded and we are looking for a convenient date to talk about transportation matter province versus the federal government. So, a week or so and that document will be refined and we will be ready to discuss the larger questions.

In the meantime, we have taken action on the practical ones and are waiting for meetings from the respective ministers. MR. D. JAMIESON: Final supplementary, Mr. Speaker. 19~0

April 14, 1980 Tape No. 729 EL - l MR. SPEAKER (Simms) : A final supplementary, the hon. the Leader of the Opposition. MR. D. JAMIESON: I thank the Pr~~ier for his answer, which I deduce means that so far there has not been any, what I would describe as,person-to-person contact between himself and the Prime Minister. May I, in this form, ask this question?

Since it is clear, I would suspect,althouqh I am not privy to the government's position, the Newfoundland Government's position that oil pricin~ and a national agreement will have some bearing, ~f only indirect, on what has come to be referred to as the off-shore issue.V.as any progress been made or is there any official contact between the two levels of goverrunent, either carrying on from where the previous Federal Government left off or on the basis of any new initiatives that might have been put in place by the minister or the OltlJlartlftent of Energy, Mines and Resources?

Could he qive ·ua a state of play on oil pricing? MR. SFEJUCER (Simms) : The hon. the Premier. l'REPIIER PECKFORD : Before I mention the oil pricing, I would just like to respond to - there were a lllllllber of reasons why I did not communicate to the Prime Minister di.redly, One is that I wanted time to elapse.. The Prime Minister VIIS &l.o on vacation for a while and wu not in his office.

ADd t.laen I wanted to get something on paper to hia rather than to do it ad hocly every day with a telegram here arul a letter there ,and try to put it all in some kind of a reasonable, subataati ve paclc&ge. on the whole question of oil pricing, the ftrone ~~I do- :not know if the i.eader of the Oppcsition has ·, b.a an ·opportUDity ·to hear-all that the 'l't&rcne Speach in ottawa today saici vas tb&t tbal:e:...woalii ~be~ a price less ~ the Clar.lrr - crosbie pr~, if you will, · the Biaatysbyn price.

Bow 1mch lees, IIDbodv l:novs .' l:t ~d he H'Nilteen cents rather than eightean C'allts. 'lhe eighteen cents is 1341

April 14, 1980 Tape No. 729 EL - 2 PREMIER PECKFORD: out, the seventeen ll1ld a half cents might be in, one can a..rgue that and get- you · Jcnow. So, we do not know. The problem is we knew where we were but now we do not know where . we are,and hopefully we are ·substantially below eighteen and there is some long-term made in Canada price, ,.ell, we have to wait and see just ~o"hat comes out of that.

We have communicated to the Department of Energy, Mines and Resources,- Okay? - that we are eager to participate in ~1is whole question, because it does affect offshore and a potential producing province perhaps has some right to some say as it relates tc oil and gas pricing in this country right now. It is not inconceivable that we will be a producing province over the next four or five years and with that kind of potential then we have to be reckoned with and therefore should have some say in it.

So, we have communicated that at the officials' level between Energy, Mines and Resources and the C:Overnment of Newfoundland. And we have been told, of course, we have been informed that we will be involved in anythinq before it becomes any more substantial and that - have gotten the feeling that the first round by Mr. LaLonde to the various producinq provinces was essentially to break the ice and to clear away to see whether you can g-et down to some hard-nosed barqaining later on, after the Throne Speech vas out of the way, and so on. So nothing substantial,it seems to us, has really happened yet.

The ice has been broken, if you will, and ~cation has been opened between Alberta, Saskatchewan and British ColUIIIbia and nov Mr. LaLonde is goinq to start the second more sub- •tantive round and when he doea we will be intricately involved in it. MR. SPEAn:R (Simms) : MR. E. liiSCOCK: The bon. the Me.Oer for Eaqle River. AID I correct in hearing the Premier •aying that the Coast of Labrador DREE agreement is now being refined 1942

April 14, 1980 Tape No. 729 EL - 3 I'.R. E. HISCOCK: and being submitted within the next week, that after three years and after the election,with 1'~. Trudeau defeated, it was going to be signed and then,after Mr. Cla~e.it vas going to be signed and now we are putting mere things in it or taking it out? And second, is education going to be in it with regards to the gross inequalities in the Coast of Labrador DREE? MR. SPEAI<ER (Silllllt.S) : The hen. the Premier.

PREMIER PECKFORD: I am sorry that the hen. member for Eagle River is on a different trend than the Leader of the Opposition and myself,_ No, he misunderstands completely. We put the submissio~. the Coast of Labrador submission to DREE over a year ago and it is still there. It has not been touched. What I am tUk.ing about is the document that the Government of Newfoundland presented to the GOvernment of Canada on bilateral• issues last year, which has nothing to do. -All it does is highlight that we need the DREE agreement signed, one of which was the coast of Labrador.

But the Coast of Labrador Agreement vas submitted in total, what we wanted,and we have been bargaining over wh~t is going to be in and what is going to be out. So we have done nothing.. And all tbose three years it has bean in the federal hands and both govern­ ments, both the Clar]q\ government and nov the new Trudeau government has to answer for why it is not signed. It is there ready to be signed. The rorestry &qreement is crying out for signing and has not been signed. 'lhe Land and Mapping is crying out far signing and has not been signed.

The IIOJtDCO AqrHJDent ha-s been crying out for signing and has not been si911ed and 19~3

April 14, 1980 Tape 730 EC - l PREMIER PECKFO!ID: has not been touched at all. And we are trying to keep in that agreement as much as we can education, heal~~. as well as transportation and fisheries development. So we are bargaining hard to keep as many components as we can into that agreement as was presented. We have not chanqed a thing. If anything, what we have been doing is trying to keep as much in there as we can so that the federal government do not take it out and say it does not qualify. So the proposal was presented and we have not changed it and we have been waiting for them.

We have our share of the money and we are waiting for them to come up with their share. MR. SPEAKER (Simms) : !'IR. T. LUSH: The hon. the member for Terra Sova. Mr. Speaker, I have a question for the Minister of Education (Ms L. Verge) .

In view of the certain deterioration in the quality of education and educational opportunity in the Province in recent years, caused in the main by inflation and teacher reductions, and in view of the concerns expressed 'by the N.T.A. and school boards and the general pli'blic since the presentation of the 1980 Budget, I wonder if the minister can indicate what measures the government intend to take to cushion the negative effects of these two factors, particularly teacher reductions? ~f thes _e_~- -measures. are allowed to intensify it will ~rtai.nly -have a disastrous affect on education in the Province as it relates to equal education and quality education.

MR. SPEAKER: MS L. VERGE: The hon. the Minister of Education. Mr. Speaker, there is absolutely no evidence to suggest that the quality of education in our Province has done anythinq but improve in the past several years • SOME HON. MEMBERS • SOiiE ami": -MiMBERs : Hear, hear! Ch, oh! MR. SPEAKER: Order 1 please! MS" 't..

VERGE: 'lhe quality of education is something that is determined by many variables ,ranqinq from the calibre of the individual classroom teacher - that p.rson • s interest in studants, that person's commitment to his or her profession - to the numbers of teachers in the classroom - specialist teachers, the management of teachinq units 1ly school boards ·, 19~ ..

April 14, 1980 Tape 730 EC - 2 MS L. VERGE: management personnel, t.'le kind of leadership in programme development and curriculum given by school boards and the Department of Education, the input from the many partners in education including the government, the churches, the school boards. As for the effect on the quality of education of the decline in student enrolment, the facts and figures are there to show that we have never before in our history had as many teachers as we have now this year despite the fact that we have fewer students than we have had in many years. SOME HON. MEMBERS: Hear, hear! MS L.

VERGE: If we compare the situation of 1971 - 1972 to the present school year, it can be seen that we have 12,436 fewer students Province-wide in Kindergarten to Grade XI, yet we have 1,228 more teachers Province-wide. So the de facto student/teacher ratio has never been lower in our history. If this says anything about the quality of education, then surely the quality is higher and greater than it has ever been in our history. In making decisions about spending in education and allocating teaching personnel to school boards, the government has looked at the number of students in the system.

Instead of keeping the same direct relationship, government has cushioned the effect. Last Spring, government, in response tc requests from groups such as the Newfoundland Teachers Association, changed the teachers' salary regulations to put a 3 per cent ceiling on the number of teaching positions that any one school board in the Province could lose reqardless of the student enrolM.nt decline. This 3 per cent ceiling has bee.n continued this year, which will have the effect of saving twenty-eight teaching positions Province-wide.

Not only did government do that, but it went the second extra step of reducing the student/teacher ratio from is to -i.-_~:24._9-2 to-.!, re•ulting in fifteen additional regular classroom teaching positions - SOME. RON • imMaERS : Oh, oh! l-1&. SPEAKER (Simms) : Order, please! MS L. VERGE: - and thirdly, added twenty-five teaching positions for speciaJ. education to improve services to handicapPed students. 1945

April 14, 19 80 Tape No. 731 NM - 1 MS VERGE: So instead of losing 143 positions provincewice, 68 of these positions will be saved. SOME HON. M&~ERS: Hear, hear! MR. SPEAKER (Simms): A supplementary, the han. member for Terra Nova. MR. LOSH: Mr. Speaker, it is certainly heart- warming to hear members applaud answers to something which they know nothing about. SOME HON. MEMBERS: Oh, oh! MR. NEARY: Right on, 1 Tom 1 • MR. LUSH: This hon. member happens to know what quality education entails,and my question to the minister is - SOME HON. MEMBERS : Oh, oh! MR. SPEAKER: Order, please! MR.

LUSH: - is the minister suggesting to this han. House that the substantial reductions in the number of teachers and inadequate facilities, do not these two factors have anything to do with quality education in this Province? MR. SPEAKER: The hon. Minister of Education. MS VERGE: Mr. Spea~er, instead of losing 143 teaching positions provincewide next year, 68 of these positions are being saved through the special measures that I just enumerated.

As for facilities, this budget has provided for $12 million worth of new school construction, that following the millions of dollars worth of school construction that has taken place in the past eight or nine years in the Province. So we have never before had as many teachers for as few students with as good quality physical·facilities. SOME HON. MEMBERS: Hear, hear! MR. SPEAKER: A final supplementary, the hon. member for Terra Nova. MR. LUSH: A final question to the minister, Mr. Speaker. I wonder if the minister can indicate whether or not the 1946 , -~- ··-

April 14, 1980 Tape No. 731 NM - 2 MR. LUSH: government had any studies done to determine how far they can go in reducing teachers before it will affect the quality of education7 Is there a base line7 Does the government have a base line below which they will not go in reducing teachers in this Province? MR. SPEAKER(Simms): The han. Minister of Education. MS VERGE: Mr.

Speaker, two years ago in April of 1978 government appointed an independent task force comprising two Education professors at the university to look at the question of declining enrollments, and to make recommendations on how that phenomenon should be managed and how the quality of education could be improved. That task force reported last Summer. Its report has been studied and analyzed since then and government is taking into consideration this exercise in making it a five year plan to provide for the continuation and improvement in the quality of education. SOME HON. MEMBERS : Hear, hear! MR.

SPEAKER: The han. member for LaPoile. MR. NEARY: Mr. Speaker, my question is for the han. the Premier, Sir, and it has to do with the fishery. As a member who represents a fishing district in this House, I am becoming increasingly alarmed and concerned about the state cf the fishery in this Province. The government has spent this last several years talking about oil and gas offshore and have neglected the fishery. I would like to ask the hon. the Premier if it is true that fishermen will have to take less for their fish this year than they did last year?

And if so, why do they have to take less when there is such a demand for their product in world markets? PREMIER PECKFORD: Mr. Speaker, first of all let me clearly indicate that it is only since a PC Government came to take the reins of power in Newfoundland that any money has been spent on the fishery. SOME HON. MEMBERS : Hear, hear! 19~7

April 14, 1980 Tape No. 731 NM - 3 PREMIER PECKFORD: In 1972 there were between twenty and thirty people working full time to deliver fisheries policy for this Province through a so-called Department of Fisheries. Obviously over the last eight or nine years - how many? MR. MORGAN: 160. PREMIER PECKFORD: - 160 people in the Department of Fisheries, who were trying to bring in programmes and implement different bounties and subsidies to assist fishermen. Number one, Mr. Speaker. So let it be clear, the revitalization of the Newfoundland fishery has been a PC policy and not a Liberal policy. SOME HON.

M~~ERS: Hear, hear! P~~IER PECKFORD: Number two, Mr. Speaker, I call upon the member for LaPoile (Mr. Neary) to clearly and unmistakably indicate where he stands as it relates to the Northern cod situation of this Province, because that is where the future lies: It is in the fishery. As the hon. members should know, and the hon. member for LaPoile (Mr. Neary) should know, the number one priority in the Throne Speech was the fishery, the number one priority in the Budget Speech was the fishery, the long-term viability of this Province and of our people is in the fishing industry.

And we intend to leave no stone unturned to ensure that the fishermen of this Province get a good deal every year as it relates to fish pricing. 19t.8

April 14th., 1980 Tape No. 732 ow - l PREMIER PECKFORD: As a~matter of fact, Mr. Spea~er, it was this government last Spring and Summer which brought about a resolu~ion to the pricing to be charged for fish in 1979-80. They had to look to this government,and it was a deputy minister of Fisheries and a deputy minister of Labour and Manpower who~through the auspices of the Cabinet ministers, at the time negotiated behind closed doors over in Holiday Inn until we had an agreement, the best agreement that was possible for the fishermen of this Province for the last twelve months.

And now we are being asked again; the union on the one hand is w~iting the companies and the companies are writing the union and keeping us informed about what the fish pricing policy is going to be this year and how it is being negotiated. And we will not take any back seat when it comes to ensuring that the fishermen~ of this Province get a fair and reasonable ~eal so that the future will continue to be bright as it has been in the past since 1971 for the fishermen. SOME HON. MEMBERS: MR. S. NEARY: MR. SPEAKER (Simms): member for LaPoile. MR. S. NEARY: Hear, hear! A supplementary, Mr. Speaker.

A supplementary, the hon. Mr. Speaker, I thought it was a Liberal Government up in Ottawa that gave us the 200 mile limit that revived the fishery in this Province, SOME HON. MEMBERS: Rear, hear! MR. E. ROBERTS: Twelve million dollars less from the Province this year on fisheries than last year. MR. S. NEARY: It is because of the 200 mile management zone that the fishery is as prosperous as it is today not through a Tory policy.They have not 1949

April 14th., 1980 Tape No . 732 ow - 2 MR. S. NEARY: built one fish plant. Since this government came in there has not been one fish plant opened in this Province. MR. SPEAKER (Simms): Order, please! It is clear that the question and the answer,perhaps,may have been drifting into the realm of debate somewhat and I would ask the han. me ·mber for LaPoile (Mr. Neary) to direct his supplementary question. MR. S. NEARY: Mr. Speaker, it is obvious that the Premier is very sensitive about this matter because he has spent so much time on gas and oil that the fishery has been drifting for the last several years.

I would like to ask the han. gentleman - the han. gentleman did not answer my question that I put to him about whether or not fishermen would have to take less for their fish this year than they did last year. He did not answer the question, he sidetracked it and made a little political answer like he always does,waving his arms. But I want to ask the bon . gentleman now - and looking wild-eyed- what about the markets in the United States?Are their markets soft or is this just propaganda by the fish companies? Are the warehouses blocked in the Unit•d states as we were told they are?

What are the future prospects, what is the future for this year as far as marketing fish to the United States is concerned? And has this govern­ ment gone off to look for other markets in Europe and Jafan and other countries as an alternative to sending the cod block to the United States and just following the traditional pattern that hasnbeen laid down for years by the fish merchants in this Province' What is the government doing about finding additional markets for the produce of the sea in this Province? 1950

April 14th., 1980 Tape No. 732 ow - 3 MR. SPEAKER (Simms): The hen. the Premier. PREMIER PECKFORD: Yes, Mr. Speaker, I am only too happy to answer that. First of all, the 200 mile limit was loudly pushed by all Newfoundlanders long before the Federal Government had any intention of bringing it in. SOME HON. MEMBERS: Hear, hear! PREMIER PECKFORD: Long, long before. There was a lot of Newfoundlanders around and a lot of fishermen around this Province who articulated and lobbied for the 200 mile limit long before the Canadian Government and other countries got around to actually imclementing it.

Secondly, the hon. member says there have been no fish plants built in this Province - MR. S. NEARY: Opened. PREMIER PECKFORD: Opened? How about Arnold's Cove? How about turning around the La Scie fish·plan~, which never showed a profit,which was always bankrupt that we would have to subsidi~e, and it is only since the PC Government came to power that the La Scie fish plant has made money and has employed 450 or 500 people per year. How about St. L•wrence, Mr. Speaker? MR. S. NEARY: That is not open. PREMIER ~ECKFORD: Did the hon. member for LaPoile (Mr.

Neary) when he was a:cminister in a govern- ment and saw a mine close down in Bell Islan~ have the foresight.to provide something for Bell Island like we did for St. Lawrence when St. Lawrence c~esed down? SOME BON. MEMBERS: Bear, hear! MR. S. NEARY: We opened every fish plant in Newfoundland. ~REMIER PECKFORD: Now, Mr. Speaker, the hon. memb~r for LaPoile had to move elsewhere. He had to leave Bell Island and move elsewhere. 1951

hpr~l 14th .• 198 0 Tape No. 732 ow - 4 AN HON. MEMBER: Be ran away. PREMIER PECKF~RD: He ran away. He should have stayed in Bell Island and built them a new fish plant because the fishery is the answer to it and not the mines and not the minerals - MR. S. NE!•RY: I thought it was oil. I thought all you know about is oil and gas. PREMIER PECl!'ORD: - &.nd the bon. member for LaPoile - people in qlass houses should not throw stones, Mr. speaker, and I am telling you the hon. member for LaPoile (Mr. Neary~ is - MR. 5. NEJI.RY: MR. SPEAKER (Simms): The oil shiek of Canada.

Order, please: It seems aqain that we are drifting into -'the whole area of debate. I will ask the Premier to continue with his answer. · PREMIER PKCXFORD: Thank y&u,.Mr. Speaker. On the question of price, Mr. Speaker, the Fisheries Association of Newfoundland and 1952

April 14,1980 Tape No. 733 AH-1 PREMIER PECKFORD: the union which represents the fishermen are presently structuring themselves, posturing themselves to get down to bargaining on price and that is when we become involved. We are not going to interfere. We are going to try to be positive participants if we are so asked, but in the first instance it lies on the shoulders of the union and ~~e companies to sit down around the ~ table and decide on how they are going to establish fish prices for 1980.

If they desire or request our assistance 1 we will be there to provide the same kind of competent assistance as we did last Spring when they ran into trouble. MR. NEARY: A supplementary. MR. SPEAKER (Simms): A final supplementary. The han. member for LaPoile. MR. NEARY : I asked the _han. gentleman about finding new markets for the fishermen of this Province. The han. gentleman chooses to ignore that. We are told there is a glut in the United States,but I am also told that all the warehouses in the United States are empty.

What is the true situation as far as markets are concerned and is this government attempting to find new markets for the produce of the sea? MR. SPEAKER: The han. the Premier. PREMIER PECKFORD: There is a fair amount of concern in a lot of quarters right now, both federally and provincially ,as you look at the United States market for certain species, that there is some fish in some warehouses, but not all species,and when you talk about fish you are including everything, but there are certain species. Now , secondly,what we did over the last four or five months,as the Minister of Fisheries (Mr.

Morgan) can give a better answer than I can, we have had people in Spain, we have had people in PortugQl, we have had people sitting down with the EEC to try to work out, because it is all .t~~~~~ up - the hen. member for LaPoile (Mr. Neary) may not understand this­ but it is all tangled up with the GATT negotiations and how you relate fish products to other farm products and other things going in and out of the Common Market. If you really want to move into the European Economic Community you have to do it through the GATT negotiations and therefore we 1953

April 14,1930 Tape No. 733 AH-2 PREMIER PECKFORD: have had to have observer status within the Canadian delegation and to try to impress upon them the necessity for opening up and providing the levers whereby we can get more fish into the European Common Market. Given the fact that there are a lot of foreign,alie~European Common Marketmembers who are not catching as much fish as they usedto 1because they do not have the same kind of access to the Atlantic as they use to have,but it is a complicated matter which involves the Government of Canada and in which we have had our imput.

We have been over the world trying to find additional markets. As recent as about six days ago I had meetings with a number of fish plant owners who were just back from Japan and looking at trying to expand the markets,for example,over there. So we are in consultation with the federal government in trying to look for fish markets where we can find them. If in fact there are green men on the moon and they eat fish 1 we will even export it there. NR. SPEAKER (Simms): The han. me~ber for St. Barbe. MR. BENNETT: Mr. Speaker, my question is dire·::ted to the hon. Minister of Transportation and Communications (Mr.

Brett). I understand last year there was a commitment made by the minister to the people of Bonne Bay to have the Western side of the Bonne Bay road paved. We know the great part of this is within the framework of the National Park 1 but I understand the minister did make a commitment to have that work taken care of, the upgrading and paving 1 and I wonder if the minister would confirm that commitment at this time. In view of the fact that we have our new Budget,would the minister now confirm that indeed funds are readily available and work will go ahead as planned? MR. SPEAKER (Simms): The han.

Minister of Transportation and Communications. MR. BRETT: M.; • ,;f"'o;;.ker, we know the amount of funds that have been allocated for roads in the Province; the provincial amount I think is, somewhere around $15 million, but the programme has not been drawn up yet. I expect it will be done in the two weeks and then I do not mind making it public. 1954

April 14 ,1980 Tape No. 733 ~ - 3 l'l.'l.. BE!'INZTT : A furc!'ler supple'llentary . :-::R . S?EAJ<ER (Simms ) : We have time for one very quick suppleme ntary . The hon. member for St . Sarbe. MR . BE~~ETT : Mr . Speaker , in that respect I will ho ld the que stion for the minister :o r t:~o-'0 week s time . Thank you very much . :oi:R . SPEAKER: order, ?lease! The t:ime for Oral Questions has expired . ORD ERS OF THE DAY !~R. SP::A.'CER: The motion is that I no •.,r leave the Chair for the Rouse t:o resolve i~elf J.nto a Commictee o: che Whole .

On motion ~e cr.e Eouse resolve itself i~to a Committ:ee of Supply, Mr . Speaker, le=t the Chair. M.R. CHAnH iW (3UTT) : OR . COLLINS: !-IR . CAAI!U!IAN : DR . COLLINS : COMMITTEE OF SUPP~Y: Order, please! Consolidat:ee ~,d sa--vice. Shall nead I car ry? Mr . Chairman . The hon. ~uniste r of Finance. Mr. Chairman, 195 5

April 14, 1980 Tape 734 EC - 1 DR. J. COLLINS: under this head, if I may just read out the explanatory no~e in the Estimates, Consolidated Fund services relates to Budqetary expenditures under Consolidated Fund Services. These represent the managemen~ expenses and service costs to government of maintaining the public debt of the Province and of administering pensions for government and government agencies. Mr.

Speaker, this is the first head to be considered in this new decade coming out of the recently presented Budget and I do not intend at this point in time to make many remarks because I am sure hen. meubers will have questions coming out of the details of the Budget itself. I might just remind hon. me!llbers though, Mr.

Speaker, that, as was indicated in the Budget Speech, for the first time this year this head will include one related to a pension fund that we will be establishing for the first time in this Province, a pension fund into which government will make a contribution each year starting in a relatively small way this year but, hopefully and expectantly, building up over the years and this will help to relieve the funding of pensions for the future generations in this Province.

In other words, the funding of pensions in the future will not come out of the Consolidated Fund, itself, it will come out of this special fund that we, this year, are initiating. And we will be putting in millions of dollars this year in addition to the contributions from the employees of goveDIIII8nt and government agencies. I just wanted to recall that to hen. members' minds. Mr. Speaker, with regard to the public debt of the Province, hen. mellilers perhaps will remember that in the Budget Speech I indicated that this year will be a heavy year for us in tenas of borrowi&g.

We will be required to borrow·a little over $289 million this year. Now, a large part of that borrowing is related to non-Budgetary items. In other words, we will have to retire and roll over a hiqher percentage of debt this year than has been the case for many years. I believe it is the hignest ratirement rate in the history of the Province. We will have to roll over, refinance over $148 million this year. That accounts for, to a very large degree, the larqe borrowing raquiremanta this year. As a matter of fact 1 1S56

April 14, 1980 Tape 734 EC- 2 DR. J. COLL...TNS: the Budgetary requirements, the requirements in the actual Budgetary process itself, are just over $140 million this year and this amount is considerably less than last year. I just wanted to bring out that point. Now, hen. memklers will know that this is going to be a difficult year in the bond markets of the world. We have been receiving excellent advice from our new fiscal agents.

Officials in the department have been spending many hours assessing the ~~anging picture presented by the financial markets in t.l1.s country and in the United States and elsewhere and matters change almost from day to day. We will have, therefore, to take possibly innovative steps this year to fulfil our Budgetary requirements. We will have to time our borrowing very carefully to make sure that we get the best deal for the Province.

In particular, we will have to take as many steps as we possibly can to avoid locking ourselves into high interest rates with the thought that these interest rates will come down over a period of tilne and it would be not in our best interests to have very long-term borrowings locked in at high interest rates. MR. &. ROB!:RTS: Does the minister really feel that the ratas are going to come dcwn? DR. J. COLLINS: Well, there are varying opinions on that. 1957

April 14, 1980 Tape No. 735 NM - l DR. J. COLLINS: I think ~~e consensus is that borrowing rates will come down for a period of time later this year. That consensus I think is becoming more solid. Even in the last week I have had some discussions with people who are knowledgeable in the money market and I understand from them that this consensus is widening and that we can expect that there will be a drop in interest rates later in the year.

Now how long they will stay down, whether they will come down in a consistent basis,or whether they will come down for a short time and then go up and then come down again, these are the difficult decisions to make. If we do get a temporary drop we will have to be ready to take advantage of that drop. But we are alerted to the problems in this area and we are trying to make as many preparations as we possibly can to achieve the best result for the Province. Mr. Chairm~~.

I do have notes available to me and there are officials also available to me outside for any additional information that hon. members may require as they go through the estimates. So I think I will leave it at that at the moment. Thank you. MR. CHAIRMAN (Butt): The hon. member for LaPoile. MR. NEARY: Mr. Chairman, I have a number of questions that I will be asking the minister wh7n we are going down item by item under this heading, Heading I, Consolidated Fund Services.

But I just want to, as a sort of an introduction to some of the questions that I want to ask the minister 1 I want to follow up on something that he himself just said, that the Department of Finance will have to take innovative steps, I think was the way he put it, this year in order to cope with a very difficult situation in the financial market, in the money markets. I do not know what the hon. gentleman meant by innovative steps, I would like for him to elaborate on that a little 1958

April 14, 1980 Tape No. 735 NM - 2 MR. NEARY : more,but I certainly detected grave concern on the part of the hen. gentleman for the amount that we are going to have to borrow this year which is in the vicinity I believe of $289 million, which is a record,I believe. I believe that is a record for this Pro vince. It is the highest amount that the government has ever had to borrow in its whole history, $289 million. And, Mr.

Chairman, it is worth keeping in mind that while the government is borrowing at a record rate of $289 million,they have cut $50 million out of capital expenditure, cut $50 million out of capital expenditure this year, which means that it is going to be a long hot Summer for people who are looking to the Department of Transportation, for instance,to have their road s repaired, to have some road work done. It is going to be a long hot Summer for those people who are looking to government for a drop of drinking water.

And it is going to be a long hot Summer for those people, especially the ones the Premier was so concerned about today when he entered into the realm of federal jurisdiction when he cannot even cope with his own problems here provincially, and I am referring to housing, the government has cut $50 million out of capital expenditure, which means the housing programme is going to suffer ir. this Province, and that falls under Provincial jurisdiction. While at the same time, Mr. Chairman, at the same time I have to point out to the House that we are collecting sales tax at a record pace.

The government really are hoping that inflation will continue because the worse that inflation gets the more revenue the Province collects. Last year the government collected $15 million more than they expected to collect because of inflation. The government has an interest in inflation, the worse it gets the more sales tax the government collects. Every tilne an item goes up ten cents, the gov~rnment collects one cent, 1.1 cent. So obviously the Minister of Finance (Dr. Collins) is over there gloating and rubbing his hands and sa ying, "Okay, come on cost of 1959

April 14, 1980 Tape No. 735 NM - 3 MR. NEARY: living, come on inflation, keep her going, because I am going to get mere reve"ue." Mr. Chairman, we heard today the Premier coming in with a Ministerial Statement, under the guise of a Ministerial Statement, a little bit of political manoeuvering 1960

April 14, 1980 Tape No. 736 SD - l MR. S. NEARY: and political trickery that the hen. gentleman is becoming noted for in this Province, entering into the federal jurisdiction and saying, '"I am concerned about the interest rate." Well, what about the retail sales tax - 11 per cent - that the hen. gentleman collected $15 million more last year than ·he expected to collect? Why did he not give some relief to the consumers in this Province? If the hen. gentleman is so concerned about people's welfare, why did he not reduce the sales tax? AN HON. MEMBER: MR. S. NEARY: That falls under Provincial jurisdiction.

You have got to be versatile. So, Mr. Chairman, I am very concerned, and we are very concerned, about the provincial debt, And as I said before the House rose, before all of the ministers went South for the Easter holidays,that I would not mind the provincial debt being as much as it is if we had something to show for it. AN HON. MEMBER: Did you go South? MR. S. NEARY: Yes, and I went South too but to the Southwest Coast.

The hon. gentleman was over there today during the Question Period when he got up waving his arms, wild-eyed, starry-eyed again, getting his little darts in, probably had a meeting .with cabot and the whi21 kids down in the Chateau Pa:rk dawn in Mount Pearl where they have their little private get.togethers and got up and thought he was being Slllart. If the hon. gentleman wants to move 1 let him move out, COllie on out and I will take him on any time. I do not know but I will go down in Green Bay the next time and take him on. SOME HON. MEMBERS : Oh, oh! MR. S.

NEARY: we will find out that the people of this Provi.nce are wising up, they are getting smart, they are seeing through the hon. gentlemanr the hon. gentleman who tries to po=tray the image of honesty and integrity in government and then 1951

April 14 , 1980 Tape No. 736 so - 2 MR. S. }~~~Y: decides the degree of honesty that we are going to have in government. He decides, the Premier decides, the degree of honesty. He has not told us yet about Confederation Trust that the foJ:lller Premier, the gentleman he succeeded, had set up for himself in the Bank of Nova Scotia, whipped $700,000 - three quarters of a million dollars - out of Confederation Trust Fund. What kind of a fund was it? MR. J • Cli.RTER: What are you talking about? MR. S.

NEARY: I am talking about Confederation Trust and the hon. gentleman 1 I am not sure if he participated in it or not and I mean in - because I am not sure if it was a campai~n fund or if it was a personal slush fund for the former Premier of this Province. And I am told that ministers were recipients of money from Confederation Trust, ministers and former ministers were recipients, three quarters of a million dollars. Was it a campaign fund? If it was 1fine. IUl parties have their campaign funds.

Or was it a personal slush fund for the former Premier of this Province and 1if so, who were the donors and what did they receive in return for setting up that slush fund? MR. J, CARTER: the heading we are on? MR. S. NEARY: What has this got to do with It has got all to do with it. We are on Pinance and I want to get a few questions answered before we get all of this. And the hon. gentleman now has decided to leave the Bouse, he can not take it. He is getting out, gone out into the back room. Well, he is going to have to answer for that Confederation Trust Fund sooner or later - MR. J. CARTER: MR.

S~ NEARY: You bored him out of the House. - and he can tell the Bank of Nova Scotia to go wherever he feels like telling them to go ,but he is going to have to answer for that Confederation Trust Fund. And he is going to have to tell this House and tell the people of this Province about the three quarters of a million dollars that the hen. 1962

April 14, 1980 Tape No. 736 SD - 3 MR. S • NEARY : fotmer Premier waltzed off with. If it was a campaign fund, then let him say so. If it was a slush fund set up for the former Premier of this Province to pay 1963

April 14, 1980 Tape No, 737 EL - 1 MR. S, NEARY: the former ministers and ministers, to pay them off, to bail him out, ~~en let him say so. AN HON , MEMBER: MR. S, NEARY: relevant under this. AN HON. MEMBER MR. NEARY: MR. ROBERTS: MR. S. NEARY: Relevency! Sure it is relevant, everything is Is it? Yes, Sir. (inaudible) is more relevant (inaudible) The truth has to come out. If the Minister of Justice (G.Ottenheimer) does not take the bull by the tail, then somebody is going to have to do it , MR. J . CARTER: MR. F. STAGG: MR. S. NEARY : Take the bull by the tail and face matters.

Take the bull by the shovel full, Very, very funny, Mr. Chairman, very funny, The hen. gentleman from Stephenville (Mr. Stagg) thinks it is funny for the Newfoundland people to be swindled. The hon. gentlemen have thought for several years past now that it is funny for somebody to put their hands down in the Public Treasury and steal taxpayers' money. Hon. gentlemen think and have thought for several years that that is very funny. Well, it is not funny. That is why we have such high taxes in this Province.

That is why the retail sales tax is up to eleven per cent and that is why we have record borrowing and the highest debt per capita of any provi.'lce of canada, because of mismanagement and waste and squandering and corruption , Seven years of it, Mr. Chairman, seven years of it and we have to blot it out of our history as if it never happened - as if it never happened. The p~~esent Premier likes to refer to Joey's regime, likes to refer to the Liberal days, but jumps over seven years of Tory corruption to do it.

Makes no ref•rence at all, has not - I have yet to hear him make one reference to the Moores' Administration, to the Moores' years , to the most corrupt years in C4nadian history in any province of Canada. He jUIIIps over that seven years and goes bac:k to the Smallwood years. 196t.

~pril 14, 1980 Tape No. 737 EL - 2 MR. S. NEARY: So, Mr. Chairu.~~. I would like for the bon. gentleman to get up and tell us a little more about borrowing this year. The han. gentleman seemed to be awfully concerned and talked about innovative years • Well, I want to find out ~ - what these innovative steps are before we get off of Consolidated Fund Services. I realize, Mr. Chai:cuan, that most of the items here are statutory under this heading. There are one or two itelllS that I want to ask the hoD. gentleman about when we get down to it.

But, just to conclude, Sir, I would like to ask the hon. gentleman under this new peasion scheme, how 1m.any .. mployees will be covered under the new pension plan? Row many will be contributing? Will it include Crown Cor­ porations ,! and agencies such as the Newfoundland Liquor Commission and so on-z ·:· And I would like for the bon. gentleman, I believe there is something like $12,000,000 or something this year estiNted to go into that fund. How much will have to be contributed from the Public Treasury and how much will be the employees' contribution? MR. J. CARTER: Wha.t are you talking about? MR. S.

NEARY: What am I talltino; about? I am talking- the hon. gentleman does not \Diderstand what I am tallt.:inq about, Sir. ADd if he would only, if he would come and see me after, I aean I do not want to waste the time of the members of the Bouse who are intelligent enough to 1mderstand what r am ta.llting about, but in e&se there may be oue or two who do not 1mderstand it, -wel.l. the hon. gentleman mentioned funcling the Pens.ion Pl.an. For the first tiae in this Province, the p'Ubl.ic service employees' penaion plan will be funded.

ADd I - trying to find out from the ltlni.ster of Finance how many employees wil.l. be contributing, how am.ch wi.ll the a~pl.oyees colltribute as COJapared to how .uch will have to be taken fr0111 the Public 'rreasury"Z lt peesUIIIilbly will be done on a fifty-fifty contzibutoz:y basis. ADd so I would like for the 'll.on. gentleu.n to ~ve ws a littl.e 110re infonaa.tion on that particular -tter. And then 1965 -~- ·~-·,·;.-· : ·--- ·-- --- ·-

----...--- -- -- - April 14, 1980 Tape No. 737 '?!L - 3 MR. s. NEARY: we -.·ill deal with the other J:natters, Mr. Chai:r:ma.n. r tl:1ink we cm pro'l:!ably - unless ~ere are other members who want to say somethinq about this - that we can probably dispose with Consolidated Fund Services.fairly quickly once we qet some answers from the hen. ~t1ema:n. MR. CHAIRMAN (J;lutt) • Of Belle Isle, MR. E • ROBERtS : The hon. the Member for the Straits W.ell, Mr.

ChairJ:nan, in response to my hon.Iriend's invitation, I just wanted to perhaps ruse a question or tvQ that the Minister might deal with because I was intric;u,ed, as 's my bon. friend from LaPoile (S. ~aryl was,by this reference to Umo"Rtivt!! financial method$ and r second the invitation of my friend from LaPolle for the minister to ezpand somewhat on this. And I l!lllSt say' · I will l;le i.Jltriqued by his answers. I have no idea what they will be, of coarse. I lonq aqo leaz:ned that with the present lllinister of Finance (Dr. J. collins) 1966 -:-t. ··~-:---·-<:'~~~;-~.~.,.. ...

"""' ... ~~ .--- .. ~.,. --.~--·~-,.-·~.._,......",--;-·..-.--,..._,~~--.;"'--~·:-.· .......,~ . ~~;-~.wr;:;:s:;.:-;'·-~-- ---

April 14, 1980 Tape 738 EC - 1 MR. E. :PBERTS : it is folly to try to preaict what he will say, sheer folly, a frolicsome folly. MR. D. JAMIESON; There is another alliteration you coula put there too, .but it is obscene. MR. E. ROBERTS: That is correct. .My friend, the i.eade:!" of the Opposition makes an observation which wil~ not appear completely in HanSard. But, you know, the .Minister of Finance is a most unpredictable man to say the least and we will leave it at that. AN RON. MEMBER: He is innovative. MR. E. ROBERTS: Well, he may be innovative. I ao want the :ninister to tell us exactly what he means.

I mean, given the general thrust of his colleagues, perhaps he is going to start printing his own money because they are not able to understand ~~e difference between

Section 91 and

section 92 of the British North Allerica Act. But anyway, be that as it may, I do hope the minister will tell us exactly what he had in "mind. That is a most intriguing word, 'innovative', and we have seen over the years many financial practices in this Province, some cf them wise, some not so wise, so~ Liberal, some Tory, but never have I heard quite that word used before. I want him to tell us in particular, i! he would, when I get his attentic;m, about oae innovative practice that is not innovative, and that is a recent bond issue where we have been borrowing very short.

Now that is a trap that this Province fell into late i.."l the 1960s, as my friend frOID LaPoile (Mr. S. Neary) will realize - or not will realize, I am sorry; he realized it at the time - will recall, we started borrowi..ng money in Germany in Deutsche marks. · I dO liot knew hoW · i~ turned out, because that was before and we got very, very good interest rates.

I think we were getting about 6 per cent or 7 per cent on short-term money and the Canadi.an rate was then 10 per cent or 11 per cent. '!bat was before the mark bec;an to slide against the dollar, or the dollar, more accurately, began t:(; slide down aqainst the mark. But the minister, I aJD sure, is faJDi.li.ar wi.th the Halifax bridge, the infamous second bridge in Halifax, which had to be refinanced the other day. These foreiqn exchange rates are 1967

April 14, 1980 Tape 738 EC - 2 MR. E. ROBERTS: very tricky and I realize that some hen. gentlemen may not be up to da .te on them, may not be familiar wit.'1 them, I am not so sure I am, but, you know, borrowing foreign as we have been doing 1 and American dollars in that sense are as foreign as German marks or SWiss francs or Japanese yen or Moroccan durhams or whatever it is that we are borrowing in.

The situation is not on all fours with ten or eleven years ago because there while we were borrowing short, we were getting a very preferential rate indeed, The other day, if memory serves me, the minister announced that the Province had completed the borrowings fer the 1979 - 1980 fiscal year.

He ~~nounced that just about at the end of the fiscal year and if memory serves me correctly, t.'1e minister announced that the Province had borrowed $50 million - those damned dots, as Lord Randolph Churchill once said, t.'1at keep interfering in financial matters - $50 million, and I believe we borrowed it Canadian, I am not sure, but we bo=owed it and issued 1 as security therefor, debentures which were five year debentures with a floating interest rate. If I recall correctly - and perhaps the minister can confirm - the floating interest rate was set as one-half point below prime. Is that correct?

The minister is nodding, but I mean, I want to be sure that I understand. DR. J. COLLINS: Fifty-five basis points. MR. E • ROBERTS : Well, that is fifty-five basis points. !'or the benefit of those of us who do not know, it ·is :s5 of an intereatpeint. There ~ 1,000 basis points. The minister is a long way from pediatrics now. It is amazing how he picks up the jargon. But let us stick, then, it is about half a point below the prime rate. Now the prime rate is 16.2 as of last week. It, too, floats up and down, in and out, round and about, and will continue to float.

So we are talking now, ; we are paying row;hly 15.65 per cent for our money. I would like to hear the minister touch upon a couple of points. First of all, my understanding is that the classic ax:eacri])tion for financial disaster is to horrtN short and lend long. 1968

- April 14, 1980 Tape 738 EC - 3 MR. E. ROBERTS: And we a:r;e not in the lending business, we a:r;e in the spending business in this Province, but we a:r;e bo:r:rowing ver:y short aru:l spending ver:y long. I would like to hea:r; the lldnister expound as to why he has led us into this pa:r;ticula:r; innovative practice. There may be valid reasons.

He thinks that the interest rate may go down - be may be right or he may be wrong, but I will say any person wllo wa:r;rants the interest rate in this country today, Sir, is a candidate for psychiatric treatment because nobody .... 1969 ~~;~-·-~~,. ~~·~~-~~·--;::-~~~f·'t~"i-~ -.-: .. - ~r;~i·:·-~--~- ·-::-·,i\·: ... ~-::::~--~ -- . f?j_~_:~ ---:::-: :.~'.:c:;t~ · ... _,_%-~~ii~

April 14~h., 1980 MR. E. ROBERTS: is going to go. MR. CA RTER: snafus. MR. E. ROBERTS: Tape No. 7 39 OW - l knows which way ~~e interest rate we could fli p a coin, Your Honour.- We are rolling over Smallwood's Tne han. gentleman for St. John's North (Mr. Carter) is going to warrant it. MR. L. BARRY: We are rolling over Smallwood's snafus. MR. E. ROBERTS: The hen. gentleman for St. John's No~th is obsessed as well as obsessi~e. We are not rolling over anything, we are borrowing new money. We are borrowing, perhaps to pay off the $250 million that the hon . gentleman for St.

John's North and his friends lashed into the folley which they took at Stephenville. We are perhaps borrowing the $110 million that has been wasted - wasted knowingly, deliberately, maliciously and every other parliamentary adjective I can think of, Mr. Chairman - on the obscene performance in Yankee point and in Point Amor back in 1975 when the then Premier~who was so slavishly supported by the gentleman for St. John's North! The gentleman for St.

John's North, Sir, went from one end of this Province to the other supporting the former Premier, heralding him, shouting his praises from the rooftops, and from the roofs and the valleys alike , to mix the metaphor somewhat. MR. L. THOMS: Who did that? MR. E. ROBERTS: And we had $110 million, Sir, the most expensive explosi6ns. That was the one where the Minister of Mines and Energy (Mr. Barry) as he was then and now - he had ~ br1ef interruption in his career, a brief interruption at the hands of the electorate - told the House and told the public that the contracts were set to complete the project.

Well, we got $110 million socked, so we are borrowin~ perhaps to service that, for $10 million or $11 1979 ~- ~--- - ~--L··-

April 14th., 1980 Tape No. 739 DW - 2 MR. E. ROBERTS: million a year. But I am being diverted again by the very diverting gentle- man for St. John's North (Mr. Carter). He is a divertissement - I see Your Honour is waving Your Honour's hands. Your Honour is either rehearsing to be Premier or you are trying to tell us something,Your Honour. AN HON. MEMBER: SOME HON. MEMBERS: MR. E. ROBERTS: I think you are right. Oh, oh! I cannot even the hon. gentle- man for St. John's North has been touched by the sun because he is probably the only one on the other side who did not go South.

He was probably up planting savoury, one plant at a time. Now, Mr. Chairman, I really am getting off a point which is a very serious point and I do want the minister 1 who switched out to turn on one of his habits I guess,probably: He cannot seek his deputy minister's advice because he fired his deputy minister. We must deal with that 1 by the way, the midnight phone call to Mr. Fearn, the Sunday night phone call saying that his resignation was requested immediately. Maybe ten o'clock at night,was it? MR. JAMIESON: Krystolnacht! MR. E. ROBERTS: Krystolnacht, the night of the amashed windows.

But we must really have a look at it. We cannot ask his deputy minister's advice because he does not have a deputy minister at present. But I do want to say to the minister that we are now borrowing AN HON. M!lMBER: Time is up! MR. E. ROBERTS: My time up so soon? Only two minutes. But this being committee I can iit down and my friend for LaPoile (Mr. Neary) can speak for a spell. Well, I will sit down. I will come back again. 1971 ~'-:7'."' :~--"7".....,..,. ____ _,_. '-----~~ -~"'rl-~.-·"7'"

April 14th., 1980 MR. 5. NEARY: MR. CHAIRMAN (Butt): MR. S. NEARY: Tape No. 739 DW - 3 .!olr. Chairman. The hon. member for LaPoile . Mr. Chairman, I have another question for the Minister of Finance (Dr. Collins), if he intends to ~orne back to the House. I want to find out who represents, what law firm, what lawyer represents the government in all of these borrowings and all of these - MR. E. ROBERTS: They will tell you the government. What you want to know is who - MR. s. NEARY: Look, I know what I am getting at - SOME HON. MEMBERS: Oh, oh ! MR. S. NEARY : - and~aaybe it is not the same thing .

But I want to find out who represents the Bank of Montreal? M~. E. ROBERTS: the Bank of Montreal. Well, I do not know about represents the bond purchasers, that is named by the government and that is where friends may show up. MR. S. NEARY: That is right: Who represents the bond purchaser? What legal firms handle the transactions?

But I would also like to ask the hon. gentleman if he is aware that the law firm downtown who represented the Bank of Montreal has changed hands in recent times, say in the last year or eo,or is that law firm still representing the Baak of Montreal and is it, if it is, if that law firm is indeed representing the Bank of Montreal 1then is there any conflict of interest? Is it proper? It may not be illegal, but is it ethic41 and is it proper for a law firm to repre­ sent a bank that handles almost 100 per cent, I suppose - MR. E. ROBERTS: government's banker . - -.. -. -.- ... ~··--.--::=:·~#-:=:-.

The Bank of Montreal is the 1972 ·-... -·

April 14th. , 1980 Tape No. 7 3 9 DW - 4 :-!R. S. NEARY: They are the government's banker. Is it possible for that l~w firm to have a minister in the government.in the administration? 1973 ~·-

.~ April 14, 1980 Tape No. 740 GH-1 MR. NEARY: Is there any conflict of that gentleman representing the Bank of Montreal who is sitting in the Cabinet at the same time? I would think there might be, Mr. Chairman, and if there is it has to come to an end. It has to stop. All these unethical practices have to come to an end, but I am not saying that it is happening. I am merely asking the minister a question. If it is happening it has to be stopped. It is a dangerous, dangerous, it is a dangerous practice and a dangerous situation. DR. J. COLLINS: Is that a loaded question or an unloaded question? MR.

NEARY: I know members, I know ministers on the government side who would stand up in this House,and have stood up and condemned the government when they were over here in Opposition for such practices, such unethical and dangerous practices. Has it stopped, Mr. Chairman? I am asking the Minister of Finance (Dr. Collins) to tell me if that practice has ended as it should, or do we have r.~nisters sitting in this House representing the government's bankers, the Bank of Montreal, and at the same time representing the government, the Newfoundland people? If so, Mr. Chairman, is it right?

I would say, no, it is not right, and I am hoping, Mr. Chai:cnan, that I am wrong. I am hoping that no law firm downtown represents the government bankers with ministers from that law firm sitting in the Cabinet. I am hoping I am wrong. I am hoping they had sense enough, sense enough to sever their relations, sever their ties with the Bank of Montreal. You cannot serve two masters, Mr. Chairman. You cannot serve two masters. If any members of this House, any ministers in this House represent the government bankers through their law firm downtown, they should resign one position or the other.

They either resign from the Cabinet and go out and practise law or look after the government's bankers or sever their relations with the Bank of Montreal. It is just as simple as that. It is not right, Mr. Chairman, and I want to find out from the Minister of Finance if that is happening, and who the government does recommend, what law firm, what friends of theirs they recommend to look after these bond issues. And what about the Deputy ~~nister of 1974 ·.-...... ~~ .::~7-:::;.~ .• -~ --":!:~'.'t" -- ·-~~-·:-:-~.'"':'"''- "'"::;.~~~ --

April 14, 1980 Tape No. 740 GH-2 MR. NEARY: Finance and the Comptroller of the Treasury? Has the minister found one yet? Do we have to go to Europe or Siberia or Iran somewhere or Pakistan to find one? Can we not find one in Newfound­ land? This crowd that talk about Newfoundland preference! Here are a few questions for the han. gentleman to answer. MR. ROBERTS: MR. NEARY: I want to make sure he is not (inaudible) . If my hon. friend wants to get up again, I will gladly sit down and yield to the hon. gentleman. MR. ROBERTS: MR. CHAIRMAN: (Butt) MR. ROBERTS: Thank you, Mr. Chairman.

The han. member for the Strait of Belle Isle. Thank you. I again accept the invitation of my friend from Lapoile. Let me, with reference to the law firm, 3irnply make one pointed question because the minister may try, in his usual way, to skim about and hop about on this; with reference to these bond issues so that we are all clear what happens, and I am sure the gentleman from Lapoile is clear. MR. NEARY: No, I am not. MR.

ROBERTS : The government, I assume, were advised by their own law firm, the Department of Justice, and that is the way it ought to be, but the bond counsel - I am sorry - the bond purchasers retain local counsel, inevitably at the suggestion of the government directly or indirectly or however it is conveyed, and let us not attempt to blindfold the devil in the dark or in the House to maintain it otherwise. The minister in the past has revealed the names of those who were paid out of that.

You know, let us have the names now and let us not have any nonsense that the government do not directly or indirectly - the minister may not designate them, but I would venture that whoever got it- you know, you are talking $10,000 or $20,000 or $30,000 or $40,000 which is paid by the taxpayers of this Province, built into the cost of the bond issue. You know who are they on 1 say, for example, that $50 million issue. I want to come back, Mr. Chairman, to this innovative practice, the five-year floating term. We are now doing so~ething that Household Finance does not do 1to my knowledge.

They 1975 "!_~· ~ :'!t: .:: -,- , -":" "<-:-----: - ::--- - ~-~- ----- -·-:.- ·· --,-··- ~~_____,. ___ ~--~~-po ... ---~-- -

April 14, 1980 Tape No. 740 GH-3 MR. ROBERTS: have not, as yet, discovered how to do these things. We are now paying 55 basis points below the prime rate which is at current,as of ~his week, subject 1976 -~·- - ~ -- --------

lpril 14, 1980 Tape No. 741 RA - l :!!.R. E. ROBERrS: to whatever happens in Ottawa on the treasury bill auctions on Thursday. We are now paying about 15.65 percent. Is that below the prime or is is below the Bank of Canada rate? !JR. COLLINS: MR. E. ROBERrS : MR. D. JAMIESON: MR. E. ROBERTS: Below prime. Below prime, and prime is 16.2. A little higher than the Bank of canada. No, prime is a little higher than the bank. We are now paying of the order of 16 percent for our money.

Well, I took the trouble to look up what some other Provinces are paying on fixed term issues. 'f.hese are fixed rates ;they do not go up and they do not go down,and God knows they are high.~ut the New Brunswick Electric Power Commission recently sold a $75 million dollar issue and the yield is 13.89 percent, the coupon price is 13.75 but,as your hon. wil~ realize,these bonds are usually issued at a slight discount. The New Brunswick 'Electric Power COIIIIIli.ssion were 99.5 so the yield was 13.89. Nova Scotia,the yield 13.82, Ontario Byd:ro the yield 13.75.

Nova Scotia was '100 millions for five years, five year : fixed terms. Ontario Hydro was a $300 million dollar issue; $150 million was at 13.75 and $150 million was at 13.41 and that is a thirty year issue, that latter one. Hydro Quebec are yielding a little mere than 14 percent,which is the bond -rket's judqement, I IIIOuld guess, on the chances of Hydro Quebec being free Hydro Quebec or free Q1Jebec Hydro whatever it is cal.led. I illll not going to qet into the pejorative business of our interest rates beinq high: we all know they are high and we all. know that the minister is not going to be able ...

I assame he wants to lower thBIIII" he is not 90inq to be able to lower them. Be can prate and prattle about reviews by OUDJl and Brad and by reviews by Moody's and StaDdard and POOr ;you know,teac: fact remains that at least in the foreseeable future we cannot count on an upgradinq of our rating. We can hope we get SOllie 8Dre money from Mr. Laugheed in Alberta. 1977

-' April 14, 1980 MR. E. ROBER1'8: Tape No. 741 RA -2 r To show you how much money Laugheed • has, my hon. friend spoke of the contribution to pensions, You know what Alberta's contribution to pensions was this year1 $1100 million dollars. They have gpt so filthy mucb. money out there~ it is not filthy money 1 but they got ~o filthily much money they can talte $1100 million dollars. not too far of our entire net expenditure in the Province 1 and slack it into a pension fund.

That is not counting the heritage fund, that is not counting their surplus, that is not counting the fact they have no taxes and no municipal debt 1that is simply what they have got left after they brought ia their budget.Anyway,I would like to know . ' ~· exactly what the minister can tell us about this innovative practice because it seems to me that this is a very slippery slope that the minister has put us upon.And perhaps he can tell us why.

X know he will say his advisers tell him,but the advisers are not elected, the advisers are not answerable to this Bouse, the adviser are net asking for money from this House;, it is the minLster in each case doing that. so, is this what we are going to be doU!y? Are ve going to be going en with floating rates two points above what are being paid by comparable · 't>:rovinee~ New Brunswick's rating is really no better than ours, Mr. Chairman, in the market • I do not know ,ours varies in each of the two services , it is different in each of the tvo rating services.

But New Brunswick and Nova Scotia are at best marginally better than us, no significant impro?ement, they have not got the tripple A rAting of Ontario. I suppose Alberta probably rates the bond service 1 not the other wAy round,qiven what they have out there right now. But, you know,here ve are,the lllinister's illl\Ovative practice,Mr.

Ch&irman, hall produced a situation where ve are at lease two points above - not facea; · that is 200 basis points ~P' but two full points, 2 pe~ent, '2:;;00 on ewn hundred every y.ar abo.e fllle interest rate being paid by our sister Pro"rinces, the Provinces next door to us 1 1978

•:-- ... ~~·~·~:~·:::.~ ... ~. ,. ~~~~~ l\pri.l 1~. 1980 Tape No. 741 RA -J MR. E. ROBERTS: - the Provinces whose fiscal situation is not very different fram our awn. Alld perhaps the 1!114ister can t~ll ·us why he bas chosen this, why ve we in the five year floatinq interest rate? And if the interest qoes - if prime goes to 20 percent as it well miqbt;- it is conceivable that it could; it has c;ane to that in the States - theJ1 we e;re gC -inq to end up paying 19 • 5 percent in this P~ince, thanks to the 111lnister's inno .vative practices. so, he possibly 1979

April 14, 1980 Tape No. 742 IB-1 MR. ROBERTS: could be a little more forthcoming from the Committee on this. As I say 1 it is a very slippery slope we are on. You know,I am not talking about the size of the debt. I am not talking about the fact that we have to borrow. Those are separate problems and that is not why we are here. What I am on is the type of borrowing that the minister is going in on,and that was last year. Heavens knows what he is going to get us into in this financial year. I would also like to re-emphasis the comments of my friend from LaPoile (Mr. Neary) about Mr. Fearn. Mr.

Fearn was fired, dismissed. From the information that I have, I would say on extraordinarily high authority. Mr. Fearn was sent for by the minister at nine or ten o'clock on an evening and told, "Come immediately,! have a message from the Premier for you". MR. NEARY: Right on. MR. ROBERTS: And the message was, "Mr. Fearn,I want your resignation 1please". And, you know, the minister really has not been forthcoming. MR. NEA..ll.Y: He was also Comptroller of the Treasury. l<!R. ROBERTS: And as Comptroller of the Treasury he is a servant of this House. MR. NEARY: Right on. MR.

ROBERTS: In fact 1his salary is on exactly the same par, same footing 1 Your Honour, as is the salary of the Auditor General. They are the only two people in Newfoundland today who draw money from the public chest whose salary is not voted by this House each year. It is statutory and it is simply noted here in these estimates as it ought to be. MR. NEARY: And he is responsible for enforcing the Financial Administration Act. 1980 - . .....__ ---~--_......~~_,..,._ ,_. -----·- ------- ___,...-- ,. .. - 7". -;:---- ---~-- ·.-~ ... -; ---~-- ~ -~- .• ..

April 14, 1980 Tape No. 742 IB-2 MR. ROBERTS: Right. And I want to know exactly what deal 1 if any,was made with Mr. Fearn in return for his resignation. I want to know why he was dismissed-and he was dismissed. And with all respect,if the minister says he was not I will have to accept his word,but I will tell him I will not believe him because the information which I have which comes from the extraordinarily high authority in this matter - and that is as far as I shall go - is that Mr. Fearn was dismissed. I do not say he was dismissed without reason. That is what I am trying to find out.

Callously, brutally, without notice, without warning, whether it was justified or not I know not. But I would ask the minister, I think this is the time ar.d the 9lace when he should tell the House exactly why he did it. I think it was a Sunday evening, if I am not mistaken,but it was an evening; nine or ten o'clock the phone call came. MR. JAMIESON: The better the day the better the deed. MR. ROBERTS: My leader says,' The better the day the better the deed.' In that case the minister did a terrible disservice to a Sunday to do a deed like this on a Sunday,if in fact it was. But the story should come out.

There is no reason it should not come out in full and now is the time to do it, Sir. MR. NEARY: rises to - MR. CHAiruA.AN (MR. BUTT) : ~!R. NEARY: Mr. Chairman, before the han. gentleman The han. member for LaPoile. - answer all the questions that we have put to him, now that the Premier is back in the House I want to direct a message to the han. gentleman. The han. gentleman was absent when I put a question to the Minister of Finance (Dr. Collins) that I am now going to put to the Premier.

Does the Premier feel comfortable having in his Cabinet a minister,or two ministers representing high posts, senior positions in the administration, ar,-' at tile same time representing the government's bankers, the Bank of Montreal? Does the han. gentleman feel comfortable about that? MR. ROBERTS: If it exists. MR. NEARY: If indeed it does exist. WP~t will the hon. gentleman do about it if it does exist? lolill he take steps to force 1981 - r-- ~···-'rc.""· · "t' ·-t ·.- '~ -

April 14 , 1980 Tape No . 742 IS-3 MR. NEARY: chese c·~ 01~cer either co resign =rom che cabinec or sever t.>teir ties in their relations with the Bank of :~on creal? Now, Mr. Chairman, we are in Cornmitcee of t:he Whole here and 'lie are discussing financial matters and I want to find out the feeling, the posicion of the ?remier on this particular EDat~er thac I consirier to be a very, very siqnificanc ane a very impo=an t. matter, a ve.ry dangerous situation where you have a minister or a couple of ministers serving t·..ro atasters and that ca."Ulot be allowed to continue, Mr. Chairman .

The gentleman who portrays the i:nac;e of honesty a::d decency ar.d int.eqricy in government, now is his chance to stand cp and tell us , "No 1 that k.iP.d of situation does not exist in my administration. There are no ministers in my Cabinet who repre sent the Bank of ~!ont:.real, the government 's bankers and put themselve s in a COI'.f li ct of interest situation" . Can the hon. gentleman st.and up and tell the House that:, put my , mind at ease, put the minds of the Newfoundlan d people at ease?

Can the hon . g~~tleman stand in his place and ~<e a cat.egorical scatement. that nobody in his government , in ;~s administ ration, represents the Bank of Montreal? Now is the time for hJJn to do it. 198 2 , -:::} ~1~~~~~~~~~ ~: ... ..._----.-··:-:-:--- -. .·· ;--!"""'~~-- -·· ·-~- --

April 14, 1980 Tape 743 MD - 1 MR. S. NEARY: You cannot se::-ve two masters, Mr. Cl:.airman, as I said a few moments ago, and if that kind of situation does exist it has to be stopped. We will find out now how sincere the ?re~~er is. Does ~~e hon. gentleman decide the degree of honesty and integrity, does he set the standard, or is he going to go all ~~e way? Or does the hon. gentleman have any inten­ tion of answering the questions at all? We are in Committee of the Whole.

This is the time we are told by the Premier on a number of occasions, "Oh,ask all the questions you like and we will give you the answers; the harder the questions the 100re answers you will get." Well,I am putting a question to the hen. gentleman now,and if the hen. gentleman chooses to ignore ~'le question then I will only have to assume, Mr. Chair111an, that the hen. gentleman has something to hide. The truth will win out in the end. Mr. Olairman, we have to have an answer to that question before we can pass these estimates. That question mus1: be answered by none other ~~an the Premier.

Did the Premier insist, did he demand, did he say to his ministers when they were chosen, • If you have any conflict of interest situation, if you are in a situation where it might even only appear to be a conflict of interest ,cut your ties, sever your relations,otberwise you do not serve in my Cabinet?' I have never known a Cabinet in this Province where you had a minister or two who, at the same time they were sitting in the Cabinet, repre­ sented the government's bankers, the Bank of Montreal.

Now the hon. gentleman has left the House again, but we will be on this subject until the hon. gentleman returns to lti.s seat, and if he has the courage of his convictions he will get up and answer the questions, . Or is he too preoccupied with going out and doing a little press interview? Is that 1110re importa.'"lt than answering questions in this House? Is he being taken down to a little private office now where he can wave his arms and look wild-eyed and shout, roar and bawl?

Is that 1110re important than sitting in this House and giving answers to questions that are put to the hon. gentleman by the Opposition, important questions, or will he go out and tell the press before he tells this House? The bon. gentleman,has he developed that kind of arrogance and contempt for the House and for the people of this ProVJ.nce? I will. stay here until Hell freezes over to get the answer to the question because I, and 1983

•' '-:"" ·- "( ... - April 14, 1980 Tape 743 MB - 2 MR. 5 • NEAHY : I would assume that most members of this House, on both sides of the House, do not think that that is right to have a law firm with a couple of ministers, senior ministers, repre­ senting the government's bankers at the same time. Is that ethical,my friend? I ask my hon. attorney here, is that ethical? It may not be illegal . MR. 'l'HOMS: It certainly is not ethical. MR. NEARY: No sir, it is not ethical, It is highly unethical. And these two mentlers have to make up their minds.

They are either going to serve the Bank of Montreal, or they are going to serve the people of this Province. It is just as simple as t.'lat. ~ HON. MEMBER: One is in a vulnerable position. MR. NEARY: Yes, Mr. Chairman, one is in a very vunerable position as my hon. friend says, a very very vunerable position indeed and it is no laughing matter it is a pretty serious matter. Can we be so greedy, Mr. Chairman, that we cannot afford to pay o= ministers enough that they have to go and rake it in from the govermnent • 5 bankers? Either we are being penny wise and po'ilnd foolish or somebody is awfully greedy.

They will not cut their relations with their - I am not asking them to give up all their clients,but I am certainly asking them to sever their ties with the Bank of Montreal. with which the government is doing business day in and day out_ There is hardly an hour in the day 198~

April 14, 1980 Tape No. 744 SD - 1 MP.. S. NEA..."!.Y: goes by when government is not doing business with t.!-j,e Bank of !-'.ontreal. And not only that, Sir, what happens, Mr. Chairman, as my hon. friend the member for the Strait of Bell Isle (Mr. E. Roberts) says that he presumes that the Justice Department, the lawyers in the Justice Department give counsel to the Minister of Finance (Dr. J. Collins) on financial matters regarding the floating of bond issues and so forth. Well, who gives the Minister of Finance advise and counselling on matters involving the Bank of Montreal?

If a dispute arises between this government and the Bank of Montreal, who gives the advise if it is not the Minister of Justice (Mr. G. Ottenheimer) - MR. D. JAMIESON: MR. S. NEARY: (Mr . W. Marshall)? Or the President of the Council. or the President of the Council Never before, Sir, in the historY of this Province have we seen such a glaring example of conflict of interest.

And the Premier, when I asked him the question to tell us it is not so or it is so,and I hope it is' not so, he leaves and goes strutting down to his commonroom to get a little mike stuck in front of him so he can get his gob on television again, waving r~s arms, looking wild-eyed 1rather than stay in this House and give the people of this Province the information they should ha9e. And if he remains silent on this matter , I can only assume that the hon. gentleman has something to hide. MR. CHAIRMAN (Butt): The hon. Minister of Finance. DR. J. COLLrNS: Mr.

Chairman, the speakers from the other side, the hon. members raised a number of points that I will trY to go down through. The point that was raised by both hon. members in particular was in regard to the steps that t.'le government is con~lating to fulfill our financial requirements and ! will get to that in just a a10111ent 1but I will just clear off a few others first. The hon. member for LaPoile (Mr. s. NearY) indicated that we had cut our capital espenditure this year~ our budget for .capital expenditure ,and wondered what 1985

April 14, 1980 Tape No. 744 so - 2 DR. J. COLLINS: effect will this have. Well, all I can say to that is that it was a very difficult exercise to decide which capital expenditures to fund with the funds available to us. Now, the hon. member did mention roads. we would have been able to do a lot more in regard to roads, and I am not going to go into this in any great detail because it will come up again,no doubt, when my colleague,the hon. Minister of Transportation and Communications (Mr. c.

Brett} brings in his estimates, but I will just say that if various DREE agreements had been brought into effect, we would have been able to do a lot more in terms of roads as it has not been brought into effect. SOME HON. MEMBERS : Oh, oh. DR. J. COLLINS: In regard to housing,the hen. member also mentioned that,. I would point out that in the Budget Speech I did indicate that in addition to the Provincial Home OWnership Grant Programme, we W!!!re bringing in a new programme ·, the Rural Lendin<; Prograllllle which will be helpful in this -regard.

So we have done as much as we could within the limits of the restraints ~laced upon us to take care of the o·P.ural Lending Programme. MR. D. JAMIESON: On mortgages? DR. ;;. COLLINS: Yes, on mortgages, but this will be helpin.; in the housing area. Now the bon. member also mentioned about retail sales tax 1 that we have increased collections ; that is a fact. To some extent it was due to inflation,in IU!Qtl!er respect it was due to the increased efforts we have been making in terms of conducting audits and conducting collections.

I might say that the provincial 9overnment is not unique in achieving some benefits f:rom inflation; the federal government of course is in exactly the same position,but the federal government in terms of income tax even gets more return out of the inflationary pressures put upon us because, of course, income tu are marginal MR. ~. ROBER'l'S : Be fair now. 1986

P..pril 14, 1980 TaPe No. 744 so - 3 D!l. J. COLLINS: - w~ereas our retail sales tax, of course, is at the one rate. 1987

April 14, 1980 Tape 745 EC - 1 DR. J. COLLINS: The hon. member wished to know about the numbers of pensioners and the numbers of contributors to our pension fund and our pension plans. At the present time there are 3,300 pensioners actually receiving pensions from the government. Now, in terms of contributions, there are contributions made by government employees which currently approximate 10,000. There are also contributions made through the open vote of 6,000 but, of course, many of those contributions ultimately end up as refunds also.

In what might be termed ~~e quasi government group there are 9,000,and that group consists of employees of Hydro, employees of the Newfoundland Hospital Association, employees of the Newfoundland and Labrador Housing Corporation and also non-professional workers on the school boards. So there are 9,000 in that group. Then there is the Constabulary; there are 1,000 in the Constabulary pension fund, and in the teachers, the N.T.A., there are 9,000. That brings a total of 35,000 pension contributors at the present time.

Now, the government this year will be contributing to the newly set up fund approximately $12.5 million. The fund will be set up, hopefully, in July, so that $12.5 million will cover the remaining mon~~s in this fiscal year from July lst onwards. The contributions from the employees in these various groups that I have mentioned will pretty well equate what the Province is putting in, so the employees will also be contributing approximately $12.5 million to the fund. MR. D. JAMIESON: If the hon. the minister would not mind. DR. J. COLLINS: Surely. MR. D. JAMIESON: I will not be long. 1988

April 14, 1980 Tape 745 EC - 2 MR. D. JAMIESON: I am just wondering: Looking at the demographics, as I am sure his officials must have done, you are bringing in a very large number at this end, obviously some of them must be quite elderly. Is the total likely to go up or down over the next decade let us say? DR. J. COLLINS: The total number of pensioners? MR. D. JAMIESON: Of pensionable public servants. You are collecting a large number into it as at the present moment. You outlined 1,000 Constabulary,which is surprisingly high, incidentally, and a number of others. MR. E.

ROBERTS: That is four times the strength of (inaudible). ~~- D. J&~IESON: I am just curious as to whether or not, in terms of the funding exercise and how much it is going to cost you in the future, whether it is anticipated that the total number of public servants at any one time who are in the pensionable category is likely to be higher or lower as the years of this funding progress? DR. J. COLLINS: Well, I do not have figures available, but one can certainly say this, that it will increase. And this is why government was so concerned to start funding pensions.

Because of the increasing liabilities placed on government through its pension obligations, if we had not started funding,not too far into the future we would be actually paying out more than we are taking in. I do not think we are at that crossover point yet, but at the present time we are actually taking in more in terms of contributions and putting those into consolidated funds than we are actually paying out in pensions.