December 11, 1998 HOUSE OF ASSEMBLY PROCEEDINGS Vol. XLIII No. 60

The House met at 9:00 a.m.

MR. SPEAKER (Snow): Order, please!

Statements by Ministers

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

SOME HON. MEMBERS: Hear, hear!

MR. GRIMES: Thank you, Mr. Speaker.

Later today I will introduce the proposed amendments to the Private

Training Schools Act and regulations, the first major changes to the legislation in a

decade. The amendments being introduced in the bill will establish stringent control

measures, further protect students and increase the stability of the private training

industry.

The rapid growth in the private training industry, which currently

consists of fifty-seven different schools with more than 370 programs, has represented a

significant challenge for government. A complete review of the act and regulations was

necessary in order to adapt to the changes in this sector to meet the needs of the

students, as well as the private training industry itself. Dr. Phil Warren's report on the

private training system provides the basis for changes government is proposing to

legislation today.

Dr. Warren has produced a report that has taken into account the

opinions and concerns from private citizens, interest groups, the industry itself, and

other political parties represented in the Legislature. Government is confident that

proposed changes to the act and regulations will create the necessary bounds for

protecting the students first and foremost, while addressing the needs of an expanding and

changing private training industry.

Government is proposing to following major amendments to the Private

Training Institutions Act and its regulations.

Firstly, the establishment of a train-out fund that will be used in the

event of a school closure to assist students in the completion of their training. The fund

will be credited with monies from mandatory contributions from all private training

institutions, and the contribution will be 1 per cent of student tuition annually.

Secondly, the establishment of a private training corporation to

administer the train-out fund on behalf of students and to make recommendations to the

Minister of Education with respect to financial stability of private training institutions

and other aspects of the Private Training Schools Act and regulations. The corporation

will have a board of directors with members from the student population, private training

industry, general public and government, and will be appointed by Cabinet.

Thirdly, there will be audited statements of institutions required

annually by the Minister of Education.

There are also several regulatory changes being proposed in this bill

that include:

increasing the bond to a minimum of $50,000 from the current level of

$10,000, and a maximum of $150,000 from the current maximum of $75,000;

the period of time upon forfeiture of a bond, after which monies can be

paid out, will be decreased from two years to six months;

schools must be in continuous operation as a registered private

training institution for at least one year and have at least one graduating class before

receiving designation for student aid purposes;

regulations will also stipulate the provisions that are required in a

contract between a student and a private training institution;

the requirements for registration of new institutions, the renewal of

registration for existing institutions, as well as the grounds for which a certificate can

be refused, renewed, suspended or revoked, will be prescribed in the regulations;

the period of time for cancelling a license, when a owner ceases to

operate a private training institution, will be reduced from ninety days to ten working

days; and

a mechanism to address and resolve student problems with administrative

and academic decisions will be developed and implemented through the regulations.

Government has lived up to its commitment for a complete review of the

Private Training School Act and regulations. The implementation of these amendments to the

legislation will represent this government's policy. It recognizes the changing

environment of the private training industry, and most importantly, it provides more

protection for students attending private training institutions in Newfoundland and

Labrador.

It is government's intention to have the new legislation in effect for

the next period of registration for private training institutions on January 1, 1999.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

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

MR. H. HODDER: Thank you, Mr. Speaker. I thank the minister for

forwarding a copy of the statement a few minutes ago.

One of the things I have some concern with is the fact that there is

still too much policy and too much that is listed in regulations, as opposed to being

listed in the act itself. We should be trying to put more of our rules and laws in

legislation and less done by Cabinet through regulation.

Also, I want to make the point that the government still views college

education as a commodity driven, marketplace driven focus. That philosophy has not

changed. We, on this side, believe that we should be viewing college education and

training as a social and economic development tool. We believe there is room in

Newfoundland and Labrador for the public college system and the private college system.

However, we want to say to the minister that the philosophy and the approach has not

changed because we still see the government as essentially saying this is a buyer beware

marketplace, commodity driven focus. We would like, as we go through the legislation, to

bring that forward a little more clearly for the minister's consideration.

Finally, Mr. Speaker, I want to say that we agree with the changes that

are being made here. However, there are some things in the Warren Report that are not

focused here and we will bring these up during the debate which, I think, will probably

start some time later this morning.

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

the hon. member have leave?

AN HON. MEMBER: No leave.

MR. SPEAKER: No leave.

The hon. the Minister for Environment and Labour.

MR. LANGDON: Thank you, Mr. Speaker.

I rise today to inform hon. members of the results of the independent

review undertaken by now retired Judge Nathaniel Noel, commissioned on behalf of the

Department of Environment and Labour by the Department of Justice, into the cleanup of a

former metal recycling site at Makinsons.

The review was undertaken to help resolve a difference of opinion

between the consultant and the contractor involved in the Makinsons Environment Site

Remediation Project. The dispute involved allegations that the contractor, SCC

Environmental/Tri-Waste, a joint venture between a local company and a Calgary based

company, had been overpaid by government for the amount of contaminated soil treated at

the site. The other company involved in the dispute, Fracflow/BEAK, a joint venture

between a local company and a national firm, was contracted to manage the cleanup project

on behalf of the federal and provincial governments.

Mr. Speaker, Judge Noel was provided with all of the documentation

relating to this project and was asked to conduct a comprehensive review into the

allegations and report back to the Minister of Justice. I am pleased to report on my

colleague's behalf that Judge Noel's investigation has concluded and there was no

overpayment to the contractor, SCC Environmental/Tri-Waste, and that the contractor was

entitled to all payments. Furthermore, the investigation reveals that there is no basis

for government to take action against any party involved in the project.

Judge Noel was also asked to determine whether or not there had been

any improper or undue influence during the course of the project. I am pleased to report

that after careful review of the documentation, Judge Noel has concluded that there is no

evidence of improper or undue influence.

Mr. Speaker, the cleanup of this former metal recycling site at

Makinsons was undertaken between 1992 and 1995 as part of the National Contaminated Sites

Remediation Program. The project was cost shared on a 50/50 basis between the federal and

provincial governments, and a federal/provincial management committee was established to

oversee the project.

Judge Noel recognized that these types of projects are new to the

Province and are often difficult to manage. He has provided some guidance to my department

with respect to the management of remediation projects of this type and magnitude. Please

be assured, Mr. Speaker, that Judge Noel's advice will be given full consideration by my

department during the course of any further remediation projects of this type.

It is my intention to table Judge Noel's report and the attachments in

the House of Assembly by Monday or Tuesday of next week. The reason I am not doing so

today, Mr. Speaker, is because this documentation contains several references to various

companies and may contain information which could be detrimental from a competitive

perspective. Therefore, the report and attachments are under review for proprietary

information.

In closing, I should note that government announced its intentions to

initiate an independent review of the issue in December, 1997. However, due to a number of

circumstances beyond our control, the review could not begin until much later in the year.

In addition, we did not place any time frame on the review so as to ensure Judge Noel had

adequate and appropriate time to give this issue his full attention.

With that said, Mr. Speaker, I wish to express my appreciation to my

colleague, the Minister of Justice, for his assistance in helping bring this matter to a

conclusion; and, of course, my appreciation also extends to Judge Nathaniel Noel for his

thorough and detailed review of this issue.

Thank you.

SOME HON. MEMBERS: Hear, hear!

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

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

I understand the reason for the statement by Judge Nathaniel Noel being

delayed, and for that reason we did not push the matter. There were circumstances which

led to the delay in this report. I accept the report. It is good to finally see closure

brought to this issue. I would be interested in seeing, when the documents are tabled next

week, what guidance Justice Noel had provided to the Department of Justice and the

Department of Environment and Labour regarding these types of projects.

Mr. Speaker, in closing, we accept as well the contents of the report

and the fact that closure has finally been brought to this issue. We have no problem in

the timing of the report, based on the circumstances surrounding that.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

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

Agrifoods.

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

Today I stand to inform the House of a Farm Aid Program for Canadian

farmers which the Federal Minister, the Hon. Lyle Vanclief of Agriculture and Agri-Food

Canada announced yesterday.

This income-based program will see investment of $900 million over the

federal-provincial cost-shared basis could see available funds boosted to $1.5 billion

over the next two years.

I want to inform the House that our department, through the Assistant

Deputy Minister, Martin Howlett, will be working with the other provinces' senior

provincial and federal officials and industry leaders, over the coming days, to design and

finalize program details and delivery options.

Mr. Speaker, the agrifoods sector of this Province is an important part

of the rural economy of many of our communities, and if this program can benefit our

farmers in the long term this government intends to participate.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

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

MR. SULLIVAN: Thank you, Mr. Speaker.

We certainly support initiatives to support our basic primary

industries here, in agriculture for example. I am sure there are needs also in this

Province, under the minister's jurisdiction, with potato blight. I know my colleague, the

critic for agrifoods, has raised issues on farmers and on devastation in his area too. So

certainly we support initiatives.

We have the groundfishery. Support has come here for a basic industry

in the Province. Our farming industry is very important and we need to have the same

considerations here too for programs that affect it, even though they may not have the

same magnitude as the problem out in Western Canada.

Thank you.

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

he have leave?

AN HON. MEMBER: By leave!

MR. SPEAKER: By leave.

MR. HARRIS: Thank you, Mr. Speaker.

I welcome any effort that can be put into place to assist farmers in

this Province. We do have serious barriers to support for farm development in this country

because of NAFTA and international trade obligations. We have a low food price policy but

not the great ability to support farmers, and any effort that can be made through this

process I would fully support.

Oral Questions

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

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

My questions today are for the Minister of Fisheries and Aquaculture.

It has been revealed today that government has stepped in to quietly take over the largest

aquaculture operation in the Province, S.C.B. Fisheries Limited of Bay d'Espoir,

reportedly to save the company from bankruptcy.

I would like to ask the Minister of Fisheries and Aquaculture this.

When did the government realize the operation was in trouble, and on what date exactly did

the provincial government move in?

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

MR. EFFORD: Mr. Speaker, we realized within the last eight months

that there were some problems in Bay d'Espoir, when it really came to the crux. Before

that we recognized there were major problems there because the type of strains of fish

they were allowed to use in Bay d'Espoir were not conducive to the strains of fish that

were being used in other parts of the world. They were limited in the size of fish that

they could grow, and the cost of growing that species of fish was more than they could

make a profit on. The cost was too high and they could not make a profit on it. That was

when we recognized there was a problem in Bay d'Espoir.

When the shareholders of S.C.B. Fisheries Limited came to government we

sat down. They were asking government for some assistance. We thought it necessary then to

go down to S.C.B. Fisheries, to look into the operations, and to do a complete study. It

was about six to seven months ago. I do not have the exact date, but I can certainly

provide that for the hon. member.

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

Opposition.

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

It has been reported that government has put an additional $6 million

in this year, on top of an investment of about $13 million from provincial sources over

the years already - I would ask the minister to just correct that if that is not true -,

for restructuring and to keep the operation alive. I would like to ask the minister: Is

that correct? Exactly how much has government invested in the operation this year? In what

forms has the investment come - whether it is in cash, guarantees et cetera-, and does the

government anticipate other requirements in the near future for additional investment?

Could he elaborate in some more detail to the House, please?

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

MR. EFFORD: Mr. Speaker, if you looked at what the governments of

the past, up until the present day, have put into aquaculture in Newfoundland and

Labrador, it is a minimum amount compared to the investment in aquaculture in other

regions of Canada and other countries. There have been hundreds of millions of dollars

invested in aquaculture worldwide. Research and development monies were put in in the

initial stages. In any industry you certainly have to do that, and particularly the

aquaculture industry.

In the case of Bay d'Espoir, we have put in the operation about $6.2

million this year. That is in the operations of Bay d'Espoir, the aquaculture division of

fin fish operation there. We had to do that, otherwise we would have let it go into

bankruptcy and all of the money that was invested in the past would have been wasted. We

believe, very strongly, that there is a future in the aquaculture industry in

Newfoundland. There is major aquaculture industry in New Brunswick, there is a major one

in Nova Scotia, in the United States, there are major aquaculture industries all over the

world. We are just going through some growing pains.

Will be put any more money into the future? No. We have drawn to a

close on the investment from the taxpayers' point of view and government's point of view.

What we are now doing is turning the aquaculture industry over to a private industry which

has experience in the aquaculture industry. We are saying now they must make it work or

else the aquaculture industry is over. I believe they can make it work.

Where we will invest money, where we will continue to participate, is

in research and development in the aquaculture industry. Not only in the fin fish but all

the species, and the shellfish industry as well.

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

Opposition.

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

I understand that the aquaculture industry is a growing industry. It

requires assistance in research developing. It requires assistance when companies which

are involved in the industry need to get their product to market or the develop niche

markets. The minister has indicated they have put $6.2 million in this year. I would like

to ask: Is that real cash you have put in in the form of guarantees? Could you explain

exactly what investment was required since you moved into the operation?

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

MR. EFFORD: Mr. Speaker, that is cash. That is not in the form of

guaranteed loans, that is in the actual operation of S.C.B. Fisheries Limited. In fact, I

took the Assistant Deputy Minister responsible for aquaculture out of my department and

sent him down to Bay d'Espoir to give me a complete review of the whole operation of the

aquaculture industry in Bay d'Espoir where there was some problems. Then we went in and

had an audit done. When I say an audit, I do not mean an audit of the books of S.C.B.

Fisheries Limited, but an audit of the whole operations. To point out where the

inefficiencies are and where we could make some improvements into the operations before we

began discussions with private industry, or calling proposals for private industry to move

into Bay d'Espoir.

We wanted to know the problems, and where we could make some

improvements down there. That process has taken place. Now we are ready to negotiate with

a private firm to move into Bay d'Espoir and make the aquaculture industry work down

there.

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

Opposition.

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

Obviously we are talking about taxpayers' money. Whether we disagree or

agree on what we should be doing, people have a right to know how the Minister of

Fisheries and Aquaculture and government generally are investing their money.

I would like to ask the minister this question: What security or

guarantees has the provincial government received that would protect the Province's

investment in this private company? Is it still a private company? Does the Province now

have all the guarantees on it? Do they own the investment down there? To what degree are

provincial taxpayers exposed on the most recent government investment in this private

operation?

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

MR. EFFORD: Mr. Speaker, if we had not moved into Bay d'Espoir this

year, into S.C.B. Fisheries Limited, there would be no aquaculture industry. It would be

over in Bay d'Espoir. It would be in bankruptcy.

What we have done as a government is recognize the contribution that

the fin fish industry is making to the Connaigre Peninsula, some 200-plus jobs down there,

recognize that we have confidence in the aquaculture industry in Newfoundland and Labrador

in the future, beyond what is taking place today, if we continue to support it. We have to

support the aquaculture industry or lock the door altogether. If the aquaculture industry

is being profitable in other parts of Canada and the world, I see no reason why it cannot

be profitable here, providing it has the necessary supports from government and from

private industry.

The one thing we should not and cannot do as a government is continue

being involved in private industry. We are only in there now to save it from collapsing

altogether, to work with private industry, and to make sure that the future of aquaculture

in Bay d'Espoir and in Newfoundland and Labrador remains successful (inaudible), and grows

into a successful industry.

What guarantees do we have? The only guarantees we can have is to

ensure that a private company takes over S.C.B. Fisheries Limited and operates it. If a

private company does not take over S.C.B. Fisheries or - let's backtrack a second. If we

are not allowed to bring in the necessary strains of fish there will be no aquaculture

industry in Bay d'Espoir, and with no fish in the water, no guarantees to private

companies or to government or anybody else. The future of the aquaculture industry depends

on two things: number one, bringing in the necessary strains of fish, and number two, a

private firm going in there and making a success out of it.

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

Opposition.

MR. E. BYRNE: Mr. Speaker, it is known that there were three

interests that owned S.C.B. Fisheries Limited - part of it the Conne River Band, and two

other private interests - when government moved in. Does government now own S.C.B.

Fisheries Limited, or is it still owned by those three private interests?

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

MR. EFFORD: Actually, it is owned by about thirty shareholders.

There are three major shareholders, but there are about thirty or forty-one. There is a

number of shareholders. I am not sure of the exact amount.

On the books it is still in the name of S.C.B. Fisheries Limited, but

if government moves away the shares are not worth a penny. If the aquaculture industry

collapses and goes into bankruptcy nobody has any value. What we have done is we have met

with the shareholders of S.C.B. Fisheries Limited and they have agreed to turn this

company over to a private firm. That private firm is interested in operating S.C.B.

Fisheries Limited. What deal the private firm will work out with the present shareholders

of S.C.B. Fisheries Limited will be something they will negotiate between the shareholders

and themselves at what time we make a decision on who is going to operate that. As far as

today goes, we are the operators of S.C.B. Fisheries Limited. We put the monies into

S.C.B. Fisheries Limited, but on the books it is still, technically, S.C.B. Fisheries

Limited.

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

Opposition.

MR. E. BYRNE: Minister, I will a question in a second but I want to

be clear. So right now the government really, for all intents and purposes, is in control

of the aquaculture industry in Bay d'Espoir. If a private interest is involved or takes

over S.C.B. Fisheries Limited, will it be government negotiating directly with the private

company? Whatever the purchase price is, is part of our guarantee on the $6.2 million we

put in this year - if the company buys the infrastructure, buys the business - will part

of that purchase sale, or the money realized from the purchase sale, will some of that go

back against the $6.2 million we put into the company this year?

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

MR. EFFORD: Mr. Speaker, I am not going to discuss today the

negotiations that are taking place between my department of the government and the

company, and/or the shareholders of S.C.B. Fisheries Limited. All I will say is that we

have one common interest in mind - and that is the people in S.C.B. Fisheries Limited, the

people in Bay d'Espoir, and the government - to make sure that there is a future for the

aquaculture industry in that region.

I cannot imagine that any party, any government, or any policy of any

particular party, would be saying: Let's pull the plug and let's let it go. I am saying

that we have to stay there, so our role there is to make sure it doesn't go into

bankruptcy. If it goes into bankruptcy, it is all over. So, for all intents and purposes

we are the operators of S.C.B Fisheries Limited. We are negotiating between the

shareholders of the company and the company who is interested in taking it over. At the

end of the day we will make sure that the best interests of the people in the Bay d'

Espoir region are protected in the future of the aquaculture industry. As far as the

details of the negotiations, I am not going to discuss them here today.

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

Opposition.

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

The minister has indicated today publicly that there were operational

problems, when he sent down a departmental official to examine the company. I would like

to ask him: What operational problems did the minister's department find when they

examined the company? What, if any, changes have been made in the management structure -

you have alluded to that - of the company to ensure that the integrity of the company and

of the Province's significant investment will be protected, ultimately?

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

MR. EFFORD: I will deal with the last part of the question first.

If this company that we are negotiating with - the present company - takes over the S.C.B

Fisheries Limited, I have total confidence with the history of this company in

aquaculture, with its success in Newfoundland and Labrador today. I have no doubt that the

future of the aquaculture industry in Bay d' Espoir will be protected.

What problems did we find? It would take me an hour. Seriously, it

would take me a long time to tell you all of the individual problems that we found. Right

from too many fish in the hatchery, right from the feed, of how the fish were being fed,

right from the size of the fish being grown out, too many fish going into a particular

cage. The overall management structure of S.C.B Fisheries Limited was in chaos. We had an

company external from government do an audit on the whole operation. We suspected a lot of

things, we found a lot of things, but we wanted to have an in-depth study.

When we did the in-depth study, everything that we thought was wrong

proved to be wrong, plus more, in the whole operation of the whole aquaculture industry,

even down as far as the processing, even as far as how it is being processed, and the

yield from the fillet to the fish was less than it should be. Every percentage causes a

loss at the end of the day. So there were quite a number of things that caused the overall

operation of S.C.B Fisheries Limited to be in chaos.

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

Opposition.

MR. E. BYRNE: Mr. Speaker, the minister's answer is interesting. I

mean, prior to government stepping in, in the present day situation, government had put

about $9 million into the operation prior to that. Were some of these management problems

that you have referred to in terms of structure, feed, processing, and what you have

indicated - that the management structure of S.C.B. Fisheries Limited, some of these

problems - when did you become aware of some of these problems prior to having to step in?

Was it just before, which caused you and your department to act to step in, or were you

aware of it beforehand?

The next question: You have referred to the fact that you had an

external auditing company go in. Did you do that prior to making the investment and, based

upon what they found, then make the investment?

With respect to the audit: Is it possible without jeopardizing, I

guess, the situation now with respect to private negotiations, to table that external

audit that you had done? Or would you be able to do that at another point in time?

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

MR. EFFORD: Mr. Speaker, let us go back to the first part of the

question. When did we find out the problems? After I was appointed Minister of Fisheries

and Aquaculture, one of my first things to do was to go out and meet with everybody in the

industry, whether it was in the traditional fishery, it was in the aquaculture industry,

in the fin fish or in the mussel industry. It took me a couple of months to get around and

get acquainted with all the different sectors of the fishing industry. As the hon. member

opposite knows, it is quite a diverse industry out there and it is not easy to get inside

to know what it is going on, because every day there is new problem.

AN HON. MEMBER: (Inaudible).

MR. EFFORD: It took me couple of months, but after I first met with

the people, the shareholders of S.C.B Fisheries Limited, I recognized there were some

problems. I did not know how in-depth, but then it was a private company, then it was not

coming to government looking for money. Before I became Minister of Fisheries and

Aquaculture, there was some investment made from government when they privatized S.C.B.

Fisheries Limited. After it was privatized, it operated for two, three or four years

before I took over. It was only after that, that I realized there were some problem. Then

they went on for several months, meeting back and forth, until they came to government and

said: If the government does not put some money into the fin fish aquaculture industry in

Bay d'Espoir, we have nowhere to turn but to go out of business.

Then, before we put any money into it, I sent my assistant deputy

minister down there to look at the operation. That was when we started to realize there

were some major problems down there. In order to keep the aquaculture industry going, we

did not just go down there and say: Here is $6 million.

We put our manager down there, Mr. Ward, my assistant deputy minister,

and as the necessary payments and monies needed to be invested, it was done over a period

of time, right up until a month or so ago when there was no need to put any more money

into it, because you are at the time of the year now when the fish do not have to be fed

any more for a number of months, only on a minimal basis.

We have a leeway between now and the end of March to turn that company

over to a private company without putting any further taxpayers' money into it.

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

Opposition.

MR. E. BYRNE: Mr. Speaker, the company has expressed concern about

the impact of its operations, of federal DFO's stalling on its request to import the

strains of fish that would give it a better yield at a faster rate and thereby increasing

profitability.

I know and I understand that the Department of Fisheries and

Aquaculture provincially has been pushing the federal department to make a decision. Why

is the federal fisheries department dragging its heels on this, I ask the Minister? Has

the minister had any contact recently with his federal counterparts, and the reason for

this delay? Can he comment on whether he believes DFO will be approving this request in

the near future?

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

MR. EFFORD: My colleagues are not agreeing with some of the

comments I am making or the words I am using. I used the wrong words; I apologize to my

colleagues. I think it is the Friday morning blues we have here this morning.

Seriously, the problem with bringing in the strains of fish is the

problem with the science, the scientific department of DFO, the same problem we have with

scientists - it took them fifteen years to realize that seals eat fish. After fifteen

years of research, they finally agreed that seals eat fish.

We are having a similar problem now with certain people in the

department of DFO, in the science department. They are afraid to bring in the diploid of

fish that reproduce - that they might carry on with the fish in our waters and might mix

up the strains of fish. That is really how ridiculous it is.

In Norway, Maine, New Brunswick, and all over the world they are doing

it, except Newfoundland and Labrador. I have made quite a bit of representation to the

federal minister. The federal minister has met with the scientists and is gathering all of

the information. At the end of the day, he must make the decision.

If he makes the decision that we could only continue to use the strains

of fish that we are now using, the future of the aquaculture industry is in jeopardy here

in this Province. I have told him that very clearly.

Taking the advice of scientists, and the precautionary methods which

they carry on, could jeopardize the future of the aquaculture industry in Newfoundland. It

is on the table of the Minister of Fisheries and Oceans. We have laid the cases clear with

the aquaculture association and with other people in the industry, as clear as we possibly

can. I only hope, at the end of the day, he realizes how crucial this is to the success of

the aquaculture industry in the Province. We have laid it out as clear as we possibly can.

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

Opposition.

MR. E. BYRNE: It is clear that the industry is in jeopardy now. I

have to ask: Why is the DFO stalling? This is not a new industry that has been laid on

their table for them to have a look at. DFO scientists have been involved with this

industry since the get-go, when the company started.

Can you update us further? Why is DFO stalling to the point where they

won't make a decision? Surely, the federal Minister of Fisheries has the information on

his desk now with the recommendations from the branch of DFO, from science, on what he

should or should not do. Surely you have made representations to the federal Minister of

Fisheries with respect to this industry as to what he should do. Why the hold up? Why the

delay?

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

AN HON. MEMBER: We are going to have to ask George to get this

(inaudible).

MR. EFFORD: We may have to call on George on this one, yes.

Mr. Speaker, in 1987, I was in the Opposition. I made representation to

the scientists and DFO, to the then-federal Minister of Fisheries and Oceans, saying we

had too many seals in the ocean and that they were destroying our fish stocks. They did

not destroy the fish stocks by themselves; we played a major role by overfishing.

Nevertheless, the FRCC reported in its most recent report in 1998 that the biomass of

northern cod is worse now than it was in pre-1992, when there is no fishing taking place

on the Grand Banks.

It is quite obvious the seals are having a major impact, yet the

scientists won't own up to that. What goes through the scientific mind? I don't have the

ability to answer that question, but I can tell you very clearly, it is as tough as a

concrete wall or as hard as nails, as the old saying goes, to try to change their minds.

Unless they are 150 per cent sure that a salmon or a steelhead trout is going to come in

from Norway and not change the species that we have here in our waters, they don't want to

change their minds.

The responsibility of that decision making power lies with the federal

Minister of Fisheries and Oceans. He knows full well that if he says no to our request the

aquaculture industry is over in Newfoundland and Labrador. I hope he has the good common

sense to overrule science. Not only science, our own Salmonid Council in Newfoundland and

Labrador is against bringing in fish. I think we are afraid of prosperity. That is the

problem we have here.

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

Opposition.

MR. E. BYRNE: Mr. Speaker, if I can take what the provincial

Minister of Fisheries and Aquaculture is saying, it is that what we are 150 per cent sure

of is that if the right decision is not made from Ottawa then $20 million of

federal-provincial money in investment in the aquaculture industry will go down the tubes

overnight.

I would like to ask him this. Is there a contingency plan, or is that

it? If Ottawa does not make the right decision, if Ottawa does not make the decision to

introduce diploids or let us introduce diploids in that industry, is it over? What happens

to the Province's investment? If that is the case it would be gone, I say to the minister.

At what point has the federal Minister of Fisheries and Oceans given you any commitment,

and through you the people of the Province, that he will make a decision this week, next

week, the week after or next month? When can we expect a decision with respect to the

introduction of this new strain of fish?

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

MR. EFFORD: Mr. Speaker, you talk about $20 million being lost in

the aquaculture industry. Last year the NAFO science community reported that the seals ate

108,000 ton of northern cod less than forty centimetres, which represents 300 million

juvenile fish. You put that into a two- or three-year growth and you have about 800,000

million pounds of fish, worth about $1.00 a pound to the fishermen in this Province and

more to the industry. That is $800 million. What do we do with the science community in

Ottawa? What do we do with them in Newfoundland? I don't know. What do we do with eleven

biologists at Memorial University who have signed a letter and sent it off to the federal

Minister of Fisheries and Oceans saying: Seals are becoming extinct, decrease the quota,

don't kill anymore? I don't know. If we take them all and put them out on Kellys Island

and take the boat away - anything short of that I don't know what to do with them.

SOME HON. MEMBERS: Hear, hear!

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

MR. SULLIVAN: Thank you, Mr. Speaker.

My questions today are to the Minister of Health and Community

Services. Yesterday I asked the minister why her department has not approved atypical

anti-psychotics for people who are suffering from schizophrenia, especially when such

medications are more effective and reduce hospitalization, which accounts for 89 per cent

of the cost of dealing with schizophrenia. The minister said yesterday their decision was

evidence based and she is working with specialists towards a final solution on which a

decision will be coming soon.

I ask the minister: Why is it that this Province cannot approve those

particular drugs when all others provinces have approved at least one of the four new

modern medications, and when recent scientific research shows that the new atypical

anti-psychotics are effective against both the positive and negative effects of

schizophrenia?

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

Services.

MS J.M. AYLWARD: Thank you, Mr. Speaker.

I hope the people of the Province are listening to some of the

questions coming that have come across here to me as Minister of Health and Community

Services since I sat in this House as minister. Every single day the member opposite asks

for more money, whether it is for hospital beds, physician services, long-term care, new

drugs and the list goes on. Nobody more than I would love to stand and give everybody

everything, but when you govern you have to make choices. What we are saying very clearly

is that we will make the decisions based on the best evidence we have.

Now the member opposite said that certain drugs will reduce

hospitalization. That may or may not be true. One of the things we are doing - and I made

it quite clear yesterday - is we are very far along in announcing an arrangement where we

will give physicians the ability to make decisions about the drugs that they will

prescribe. We will put in place the ability to do the follow up evaluation to actually

prove, in fact, if what the member said is accurate, if by diagnosing the disease and then

following up with certain medications that that will in fact reduce hospitalization.

We are doing many things in health care that we do not have the

evidence for, that we do not have any past practice to really prove, other than the fact

that we always did it. Our dollars are scarce. We continue to say that we need more money,

and we are being very conscientious and careful in saying we cannot throw money at

everything.

Yes, schizophrenia is a very serious illness and one that we will do

whatever we can to address, but we want to make sure that whatever money we put in there,

whichever partners we work with in delivering that care -

MR. SPEAKER: Order, please!

I ask the hon. minister to conclude her answer.

MS J.M. AYLWARD: Yes, Mr. Speaker, I am finishing up.

Whatever partners we work with, we have to make sure we will provide

the best care for the limited resources we have, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

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

MR. SULLIVAN: Thank you, Mr. Speaker.

I ask the minister when is she going to move into the mainstream of

modern medicine? Drugs cost 5 per cent of the cost of schizophrenia. Hospitalization is 89

per cent, Minister. This is cost-effective and we will save money, and you will realize

that in the next month.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

MR. SULLIVAN: I ask the minister: Would she confirm that yes, they

are going to make that decision - it is going to be done in the next month or so -, and

that the reason for delay is not based on need or cost-effectiveness of that decision, but

because government is now waiting to get a cheque from the pharmaceutical company before

they approve those drugs?

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

Services.

MS J.M. AYLWARD: Mr. Speaker, let me say again that on this side of

the House we are very much aware of how limited our resources are. We deal with it every

single day because when you govern you have to make choices. I am not prepared to say that

drugs in every particular case are cheaper than treating people in other modalities. I am

not prepared to say that. Because I believe we should have the evidence before we spew off

at the mouth without knowing what we are talking about. That is how I would like to make

my decisions.

I am not ashamed to say we are working with other partners. In fact, I

am very committed, as the Premier is, to try to make sure that we get our fair share of

Bill C-91 as it relates to the drug research monies that should go in this Province as

well as other provinces across the country. We have been working with the pharmaceutical

association. We have an excellent ability in this Province to provide evidence based

research because of our population size and because of the close-knit relationships we

have with many service providers, including the academic community.

So yes, we are working with partners, and I would think the member

opposite would be delighted that we are working with other partners, Mr. Speaker.

MR. SPEAKER: Order, please!

The time for Oral Questions has elapsed.

Petitions

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

MR. HARRIS: Thank you, Mr. Speaker.

I rise to present a petition on behalf of the residents of Labrador

City who have a petition as residents of Labrador City condemning the provincial

government in supporting the Iron Ore Company of Canada's decision to process Labrador

resources in Sept-Iles, Quebec.

The petitioners are urging the Government of Newfoundland and Labrador

to reverse the decision immediately and support a policy of secondary processing within

the Province of Newfoundland and Labrador.

Mr. Speaker, the people of Labrador West have been, ever since this

decision was made, trying to get the kind of answers that they need from this government

about the decision government made to support IOC. They have not been very successful,

because this government is trying to bury the issue, say that it is a done deal, end the

debate, and refuse to answer questions.

The town council of Labrador West, the Labrador West Chamber of

Commerce, have asked various government members, various ministers, for answers to

questions that they have yet to get answers to. The government is trying to end the

debate. They do not want any discussion about this any more. They want everyone to forget

about what has happened in Labrador West and what this government has failed to do in

supporting the needs of the workers and residents in Labrador to have development take

place there.

There is a whole series of things government did not do in defending

the interests of the people of Labrador West. The whole of the government's decision

rested on one effort and one effort only. That was whether or not a study assisted the

company's argument that they could make more money by opening in Sept-Iles, or more money

by building a new expansion in Labrador West. That was the whole of the government's

effort in this particular decision.

That betrays a lack of commitment to the people of Labrador West. It

betrays a lack of commitment to a policy of insuring maximum use of our resources in our

Province. It shows a lack of initiative on the part of government in putting on the table

what needed to be done to make this happen.

We have heard of what the Quebec government did in terms of working to

ensure that the IOCC development took place in Sept-Iles. We have heard of all of that. We

have not heard of anything that this government has done to try and make that possible. We

are talking about a project that could last one hundred years, and we have short-term

thinking on the part of this government as to how to deal with the problem. It is a

long-term project.

We know how many billions of dollars' worth of ore have been produced

in Labrador West in the last thirty-eight years. We know the value of that development to

the tax base to this Province. We know how important it is, not just to the people of

Labrador West, but to the people who would like to continue to live in Labrador West, the

people who would like to move to Labrador West to work, the people who would like to stay

in Labrador West, raise their families there, and have an opportunity for their children.

The future of this community depends on commitment by this government to ensure that

development based on its resources that can take place in Labrador West does take place in

Labrador West.

This is a situation where the differences between the two projects are

not so insurmountable that government's efforts could not have been put into place to make

it happen.

I think what happened here was the people of Labrador West were lulled

into a false sense of security by this government. They led them to believe that

government was going to step in, ensure and guarantee that the future of Labrador West was

not going to suffer as a result of this decision. That has not happened. Not only has that

not happened, we have seen through the negotiations and the discussions between the union,

for example, and the Iron Ore Company of Canada, that there is no guarantee being given -

MR. SPEAKER: Order, please!

The hon. member's time is up.

MR. HARRIS: - that this pellet plant in Labrador West will not be

shut down prior to a Sept-Iles shut down. That is a very serious problem, along with the

government's failure to answer the questions of the people of Labrador West.

Thank you, Mr. Speaker.

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

MR. H. HODDER: Thank you, Mr. Speaker.

I rise again today to support the people of Labrador West in their

desire to have the whole issue of the production plants moving to Sept-Iles, Quebec,

revisited by this government.

We, on this side, will continue to present petitions on behalf of the

people of Labrador West.

I want to bring to the attention of the House the fact that the plant

in Labrador City is not now producing at capacity. In fact, information received just

yesterday indicates that three of the machines have now been shut down. Therefore, the

people of Labrador West see this as a threat to the security of their pelletizing plant in

their community.

We listened with some interest back in October, when the Minister of

Mines and Energy had the audacity to state publicly, and he was referring to the decision

of North to move its plant operations and reopen them in Sept-Iles, Quebec. He said,

talking about Labrador City: This decision secures the future of Labrador West and it is a

solid base for growth and economic security for the area.

Well, the people of Labrador West do not see the decisions that North

is making, or decisions that this government has made, and decisions they have permitted

North to make, as doing anything to secure the security of the people of Labrador West in

jobs or, for that matter, to make sure that this resource is developed in Newfoundland for

the benefit of Newfoundlanders and Labradorians.

It is time for the government to wake up, says a letter written by the

Mayor of Labrador City, Darrel Brenton, dated December 7. The letter reads: It is time for

this government to wake up and recognize that this is a bad decision, bad economically,

and a bad political decision, and it puts at risk the current job security and future

employment opportunities for hundreds of our Province's youth.

He writes: Our precious non-renewable resources are being used to

subsidize jobs in the Province of Quebec and will result in the loss of millions of

dollars to our Province in the coming years.

Now, Mr. Speaker, it seems as if the government is not willing to

revisit this particular decision that was made relative to Labrador West. Yesterday in the

House the Leader of the Opposition put certain questions to the government relative to the

alternatives that were available to the government at that time. It seems as if the

government has made up its mind; they have gone and ignored the people of Labrador West.

In fact, up until yesterday they had no correspondence with the people in that part of the

Province whatsoever. Yesterday they sent them off a eighteen or nineteen page letter which

was in response to questions that they raised, but in doing so they did not give them any

commitment that they would be willing to revisit this whole question.

Mr. Speaker, we know that the plant in Sept-Iles is able to be upgraded

to produce a lot more of the pellets than it will in its initial phases, and that concerns

the people of Labrador West because they are very anxious to have something in writing.

We listened with some concern when we heard the Premier giving verbal

assurances. Verbal assurances are worth nothing when you are dealing with a company the

size of North. The Premier gives comforting words to the people of Labrador West. Well,

comforting words are not enough. For example, there is no long-term guarantee that has

been given by North to ensure maximum plant output in Labrador City versus Sept-Iles,

Quebec. In other words, North Company has not said that they will always produce the

maximum in Labrador City. In fact, it is quite obvious that if the government accepted

North's logic in moving to Sept-Iles, Quebec, they will also accept North's logic when it

comes to either producing in Sept-Iles, where it might be more efficient, versus, shall we

say, maximizing the production in Labrador City.

Mr. Speaker, we want to see this government make more commitments in

writing -

MR. SPEAKER: Order, please!

The hon. member's time is up.

MR. H. HODDER: - and to ensure that the people of Labrador West,

and their ventures, are adequately protected.

Mr. Speaker, we will continue to be the voice of the people of Labrador

West.

Orders of the Day

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

MR. DECKER: Mr. Speaker, I call Motion 3.

Motion, the hon. the Minister of Justice to introduce a bill, "An

Act To Amend The Public Utilities Act", carried. (Bill No. 57)

On motion, Bill No. 57 read a first time, ordered read a second time on

tomorrow.

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

MR. DECKER: Mr. Speaker, Order 28, which is Bill No. 45,

An Act To

Amend The Teachers' Pensions Act.

Motion, second reading of a bill, "An Act To Amend The Teachers'

Pensions Act." (Bill No. 45)

MR. SPEAKER: The hon. the Minister of Finance and Treasury Board.

MR. DICKS: Thank you, Mr. Speaker.

This bill is the enactment that contains the various changes that came

about as a result or our negotiations with the teachers. They have since voted on and

adopted the collective agreement, that had been negotiated over some long period of time.

An important part of that was the change in various amendments to their pension plan.

This bill sets them out. I won't bore the House by going through it

section by section. I will make a general reference. One of the significant ones for many

teachers was that it changed what was known as staffing, something we did ourselves. So,

rather than have their Canada Pension in its entirety, when it became collectable, given

to them, or paid to them, what now happens, of course, it is integrated with the

government pension plan here in Newfoundland and Labrador, which then is reduced and that,

of course, thereby lessened the liabilities for the pension plan. It goes some distance

toward changing the plan, which has a tremendous deficit that we are attempting to address

also by paying funds into it.

Mr. Speaker, there are quite a number of enactments. Members have heard

the many statements that have been made by the NLTA as well as government over the last

number of months, outlining to the public and for the benefit of teachers what exactly

those changes were. I look forward to any comments or concerns hon. members opposite may

have. My understanding is that this has been reviewed with the NLTA, and everything is as

understood by them. I would be delighted to answer any questions members may have.

Thank you, Mr. Speaker.

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

MR. SULLIVAN: Thank you, Mr. Speaker. I know my colleague, the

finance critic, has a few comments and he will be here shortly. In the meantime, I will

entertain the minister.

With reference to The Teachers' Pensions Act, we are all aware that it

was severely underfunded and there was a tremendous liability. I am sure the minister can

confirm it, but I believe it was only in the 15 per cent or 17 per cent range - the

unfunded liability - the funded portion of that. I am wondering what figure now are we

projecting it should be with this latest commitment of $800-some million by government? It

should bring it up to -

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: In what range? In the thirties?

Anyway, you do not have to answer it right now, but at least when we

get on committee stage. I am just tossing these out to see what - because I think the

Public Service Pension Plan, with the changes made there, was in a healthier position.

That is about 44 per cent funded, in that ball park. This still would not be funded to the

level, I don't think, of the Public Service Pension Plan, in my understanding. At least it

is buying time to make the necessary adjustments.

When we get those future periods of prosperity, I say, we are all

waiting for, we will be able to dish out significant amounts. It is my understanding the

$166 million now has already been put into that separate plan. This is only really a part

of the responsibility of governments to fulfil their obligations where they took money

from teachers' pensions and spent it on other expenditures - roads, schools, hospitals,

whatever, on public expenditures.

Where the crunch has been pushed back from the year 2002 or 2003 - I

think it pushed it back another fifteen or twenty years before it gets to the point again

where adjustments have to be made. I am sure government ministers realize that. I am sure

the Minister of Education, who so valiantly fought for teachers, the person on the steps

of the Confederation Building fighting for teachers - whipped out in the front of the

building on behalf of teachers - and then he got in and crucified them. Yes, he crucified

them. That is what he did, call it what you want. He crucified them. He crucified teachers

there.

I must say, there is still a fair commitment to go on behalf of

government, but at least it pushes the clock back. I am not sure if the Minister of

Education knows the exact year, but it is about twenty years, roughly twenty years back.

It give you a little bit of buying time to be able to, in the periods of great prosperity

we are going to see now, in surplus budgets and monies to roll into it, we will be seeing

that over the next ten and twelve years. As the oil keeps rolling ashore here, as the

Voisey's Bay keeps turning in money, as we start losing revenues in IOC and as Sept-Iles

gets up and running, all of those areas, all of that added prosperity we could have had if

we had to get out pellet plant in Labrador rather than Sept-Iles, Quebec. I do not think

we are going to get too many revenues back here to our Province from the Sept-Iles

operation, to be able to put revenues, to be able to reduce further this unfunded

liability that we have.

It is my understanding that $166 million has already been done this

year. Maybe the minister can confirm that. Even though the bill has not gone through the

House - $166 million on or before September 1, 1998. Basically all we are doing anyway, we

are transferring it from an unfunded liability back to the Province. We are just shifting

the dollars here from one pot to another; that is essentially what we are doing. At least

the pension fund itself is put in a healthier position. Nobody discounts that. There have

been efforts made to reduce liabilities in all pension funds - I will not comment on that

- to enhance and improve it there.

I am sure when we get to second reading, on a few clauses in second

reading, I am sure my colleague has a few questions. I am not getting into any specific

questions here. The trust of this legislation is fine. The trust is to make the

commitments that government have indicated, and a shift from allowing an unfunded

liability to build, to transfer directly on the direct debt of our Province, basically.

Whatever way you cut it, the total debt plus unfunded liabilities and Crown corporations

are all responsible to the Province anyway, so it is just shifting them from one pool to

another to be able to put it in a different position.

Any future moves also to increase it further, as finances dictate, and

as government gets the sufficient pressures to be able to move there and to pay back to

those plans what money they have spent - really the money that they robbed out of the

pockets of these people over the years to use for other areas before they established a

particular pension plan, it is time to come back now and pay the piper and to pay back

really what was due in the first place.

That will conclude, I say to the minister, my comments on the second

reading of this bill.

MR. SPEAKER (Penney): The hon. the Member for Signal Hill - Quidi

Vidi.

MR. HARRIS: Thank you, Mr. Speaker. I take this opportunity to join

in the debate in second reading of Bill 45,

An Act To Amend The Teachers' Pensions Act.

stability to the whole pension issue in the Province and the government's responsibility

for pensions. Substantial efforts have been made over the last number of years in all the

pension plans to attempt to put them on a sounder financial footing. It is one of those

things in government when governments deals with the necessities of the day, and the

long-term problems that are caused by current costs and current expenditures are not

always regarded.

What government has undertaken to do, and rightly so, is recognize that

these unfunded liabilities that we have in pensions, in workers' compensation as well, and

in these areas have to be addressed. They have to be addressed fairly and consistently,

and with a knowledge that a lot of people are affected by what decisions are made to try

and bring the financial house of government in order. It has to be done, there is no doubt

about that, and it has to be done properly.

I am glad to see that this bill is before the House, and that after a

whole number of years there has been some sense brought to attempting to rationalize the

Teachers' Pension Plan. We are only partway there, there is no doubt about that.

I remember the former premier adamant about doing something about the

pensions, and yet at the same time the instructions obviously given to the Minister of

Finance and the President of Treasury Board of the day seemed to be at variance with that.

When we went into the 1996 general election the teachers and the NTA people were coming to

the various political parties. I thought when I met with the NTA representatives I was

going to have a demand that X, Y, and Z be done on behalf of teachers to fix up the

pension plan, a whole list of demands, and no, they didn't say that. All they wanted was a

commitment to sit down and discuss and negotiate the issue. That was all they were asking

for in 1996. This is after several years of being pilloried by the former premier and

government officials about the state of the Teachers' Pension Plan.

It is almost as if the government was out there trying to create public

antipathy towards teachers and teachers' pensions to prepare the groundwork for some sort

of action to take away or diminish the pension entitlement of teachers who had worked and

earned it. That is the approach that the government seems to have taken in the past. At

least they have sat down and come so far as to come up with some sort of solution, or at

least at interim solution or temporary solution, or part of the way down the road. They

have done that with the Teachers' Pension Act now. There have been some steps taken with

all of the pension plans, including the MHA pension plan, which saw some changes brought

about last spring as well, increasing the contribution rate and making other changes. All

of the pension plans have been addressed to a certain extent. Perhaps the biggest

outstanding one was the Teachers' Pension Plan. These amendments go some way to solving

that problem.

While I am on the topic, there is a group of people whose needs have

not been addressed by government. Those people are the retired pensioners who are on very

low pensions. I want to talk about that because I know it is an issue of great

controversy. All of a sudden everybody in this House have stopped talking about it. Not a

lot of talk about retired pensioners anymore. Do you know why? We are not allowed to talk

about retired persons' pensions any more because some piece of legislation was passed last

week, without debate, when the press was not in the House -

MR. SULLIVAN: I spoke on it in second reading. I spoke in second

reading.

MR. HARRIS: Some piece of legislation was passed last week about

increasing MHAs' salaries. All of a sudden the open lines are buzzing, the cynic's corner

is hard at work pillorying every single Member of the House of Assembly for feathering

their own nest but not looking after the retirees. That stopped debate. Let's stop debate.

No more discussion of retired people in this House from the Opposition, from the

government, is allowed, because anything you say after that point: It is only political

opportunism.

Mr. Speaker, I want to talk about what can be done for pensioners and

what should be done for pensions. I want to talk about the private member's resolution

which I put forth the other day and what role that could play in ensuring that the retired

pensioners of the public service can get some relief.

We don't have to, just as we didn't in this bill, do everything at

once, give the teachers everything they wanted or needed, give the government everything

it wanted or needed. We don't have to do that in order to make substantial progress in

looking after the public interest and looking after the existing pensioners or future

pensioners of this Province.

There are solutions. Those solutions can be found. The way to find the

solutions is to do the kind of thing that happened with the teachers' pension. Sit down

with the groups that are affected, sit down with the teachers, sit down with retired

teachers if they are involved, sit down with the representatives of the teachers and

discuss the options, talk about the problems, talk about the need, talk about the

expectations that people have had during their working lives, talk about what happened to

them afterwards. If you look at the retired pensioners, what you see is that there was a

reasonable expectation people had that they would get an increase along the way.

Now, you can sit down and blame it on the unions: They didn't negotiate

that back in the 1980s. Why would you negotiate and pay for something at the bargaining

table that was coming as a matter of course by government policy?

MR. SULLIVAN: It wasn't negotiable initially (inaudible).

MR. HARRIS: The government used to say it was not even negotiable.

It wouldn't negotiate pensions, not required to. What I am talking about here, Mr.

Speaker, is: Why would a union - NAPE in this case for the retired public servants - sit

down and negotiate an indexed pension if, in fact, the pension was already operated in a

manner that gave increases to pensioners along with public sector workers?

There are a lot of problems with the pensions position this government

took. They paid their pensions out of the Consolidated Revenue and they kept the premiums.

They self-financed the thing. Whether that is a big problem or not - I guess the chickens

have come home to roost when the numbers go the wrong way. The alternative, I suppose, is

to keep the money and invest it, put it back into the system. That is what we are doing

now with the various pension funds, and hopefully they are managed in an appropriate way,

getting the maximum return. I would like to see them invested more in this Province to

create jobs, and that is another issue.

Nevertheless, the retired pensioners had come to expect an increase on

the same basis as the public sector workers, and that has been taken away in an effort to,

basically, bring some stability to the pension fund. The goal of stability of the pension

fund is a good one, but that does not have to be done on the backs of people who are

retired, who are not in the position to really bargain, other than use political

persuasion and political pressure.

I think the members of this House of Assembly ought to have a stake in

finding a solution to this problem. The solution does not have to be: Give everybody 7 per

cent immediately, or commit to 7 per cent immediately. We do have a group of people, and a

large number of them, whose pensions are not $104,000. In fact, everybody except one

public service pensioner has a pension less than $100,000, and everybody except about

forty or fifty has a pension less than $40,000.

I am talking here about people making $5,000, $6,000, $7,000, $8,000

and $9,000 in pension, or down in that area. There are lots of them. The average pension

is $11,000. What we need to do is find a solution that is going to do something for the

people at the lower end of the pension scale and people who are hurting financially as a

result of the change in the policy. What we need is some kind of across the board amount

for them.

There have been creative solutions. I am going to suggest one that was

undertaken in Nova Scotia for retired hospital workers by the Nova Scotia Health Care

Corporation pension fund. What they did was they implemented a plan for pensioners based

on giving people an equivalency to the old age supplement. That is for people who didn't

qualify for an old age supplement at age sixty-five. The pension would provide an

equivalency to the old age supplement so that if somebody was on a pension and that

pension was less than what they would receive if they received the old age supplement on

top of an old age pension, that their pension would be increased to that amount. That

looked after people who were not sixty-five, people who either retired early, were made

redundant, were forced out or whatever, and had a very small pension.

It did not do anything for anybody with an income of $10,000 a year or

more, the kind of people the Minister of Finance and Treasury Board was talking about, who

were stacking their various benefits up to a big income. It did not do anything for

anybody with a pension of $10,000, $15,000, $20,000 or $30,000. All it did was have a very

significant affect on people whose incomes were very low and who were very poor.

That is the kind of creative solution that needs to be found, but there

has to be a stake in finding it. If all we are going to do is let this issue pass - the

issue is before us. We are confronted with that issue. Whether there is any connection or

not between an increase for MHAs and an increase for pensioners, in the public mind the

two are melded together as surely as two metals are which are moulded together in the one

mould.

This is an important issue, because while we are trying to ensure that

the public finance of this Province is on a sound footing, particularly with respect to

long-term commitments, we have to do that knowing that the consequences for individuals

are severe. If we do not undertake to ensure that the individuals who are going to be hurt

most as a result of ignoring this problem are looked after, then we are not meeting our

obligations to these citizens. We are not meeting our obligations to former public

servants.

While I support the approach indicated by this bill of moving forward

on a... incremental is not quite the word, because it is a big step being taken here, but

that a partial step be done. This bill does not result in full funding of the Teachers'

Pension Plan. This bill does not accomplish the full funding of the unfunded liability of

teachers' pensions. It does not provide full unfunded liability being looked after. Just

as this does not do that, surely we do not have to look at the crisis mode created by the

Minister of Finance and Treasury Board by the mere suggestion that retired public servants

can get some kind of an increase, particularly at the lower level.

We do not need to talk about a financial crisis of $120 million having

to be found to provide this. What we need to find is a creative solution that is going to

look after the needs of those at the lower end, perhaps by looking at an old age

supplement equivalency as a method of giving an increase to those on the lower end of the

scale, like was done in Nova Scotia, in the Nova Scotia's Hospital Corporation, for their

already retired employees.

This did nothing for the people who were at the executive level or had

high pensions, it did nothing for anybody who had other sources of income. All it did was

ensure that people at the lower end of the scale were looked after. It had the effect of

giving an across the board increase to people at the lower end of the scale, and being of

much lesser cost than the kind of numbers that the minister has been talking about to

solve this, or make an attempt to solve this pension problem.

We are attempting to solve the teachers' pension problem here. We are

only going partway. We are not intending to go all the way but, Mr. Speaker, you do not

have to do everything at once. I think a solution can be found.

Thank you, Mr. Speaker.

MR. SPEAKER: If the minister speaks now he will close the debate.

The hon. the Minister of Finance and Treasury Board.

MR. DICKS: Thank you, Mr. Speaker.

In response to the question of the Leader of the Opposition, I believe

he asked how this would affect the pension. It is something like the bell curve. In the

first number of years it improves it and the plan becomes more solid. As you get out into

about the year 2015 to 2020 it tapers off at the end and then will gradually peter out at

that time to where there is no money left. However, it is a much improved position from

where it is right now. If it had not been done, and we do not do those changes, then of

course the plan would have run out of money in about the year 2002 or so. It goes a long

way toward ensuring the viability of pensions that are now in existence.

When you look out that far, you look out to the year 2015 or 2020, many

things can change. Of course, we will be reviewing it and doing an audit. We will have to

take a serious look at it every five years just to see how our actuarial experience is

proceeding.

Thank you, Mr. Speaker. I therefore move second reading.

On motion, a bill, "An Act To Amend The Teachers' Pensions

Act," read a second time, ordered referred to a Committee of the Whole House on

tomorrow. (Bill No. 45)

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

MR. DECKER: Order 29, Mr. Speaker, which is Bill 49,

An Act To

Amend The Tobacco Tax Act (No. 2).

Motion, second reading of a bill, "An Act To Amend The Tobacco Tax

Act (No. 2). (Bill No. 49)

MR. SPEAKER: The hon. the Minister of Finance and Treasury Board.

MR. DICKS: Thank you, Mr. Speaker.

This bill allows us to establish a different rate in Labrador for

tobacco products. What it is meant to do is fight a problem in Labrador where the

differential between the price of cigarettes on our side of the border and on the Quebec

side of the border is so substantial that people are induced to travel across the border

to those communities and buy their cigarettes there. It is not legal to do so but it is a

fact of life.

Last year - excuse me, I guess it was more like two years ago, we

reduced the price of cigarettes. The incidence, of course, was that as people went across

the border to buy cigarettes they not only did that but bought a lot of other consumer

products, gasoline, groceries and so on. The previous changes that were made were intended

and did, in fact, fight the problem of cross-border shopping not only for cigarettes but

for other items.

What happened recently was that Quebec, in order to deal with some

across-the-border smuggling, eliminated their tobacco tax and now they do it in a

different fashion. As a result of that, what has happened is that where the cost of

cigarettes were within a relatively narrow range, now it is broadened to about $6 or $7 a

carton again. I think the differential is - I think in Newfoundland and Labrador they are

not about $39 and in Quebec I think they are about $33 or so. Anyway, it is a substantial

difference, and these prices I am quoting are in Labrador West. It may lead to a problem.

What we want to do at this time is have authority from the House to

amend it so that we can, by regulation, make the changes to keep it within a reasonable

limit. The differential before, I believe, was approximately $2 or so and we will keep it

somewhere in that range for the foreseeable future.

As I say, this is an interesting thing that happened because of the

change that Quebec went through. My recollection is that they eliminated their tobacco tax

entirely but because we still had it, the effect of the GST on it actually had the impact

of increasing our taxes beyond what we had intended. We did want to keep it within a

certain price range.

That being the case, these amendments will effectively allow us to

reduce the cost of cigarettes, cigars, tobacco and so on, to a range that will deal with

the cross-border shopping problem.

Thank you, Mr. Speaker.

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

MR. OTTENHEIMER: Thank you, Mr. Speaker. Just a few brief comments

with respect to Bill 49,

An Act To Amend The Tobacco Tax Act.

Essentially, as the minister has indicated, it is my understanding that

this is just giving authority to what essentially is already happening. The minister, in

his introduction, has given the rationale as to why. Obviously it is overall a benefit to

the residents of Labrador West as it affects the purchase of certain goods and

commodities.

We have had an opportunity to discuss the nature of this legislation

and we essentially support it. It is being done for the right reasons, and it is an

opportunity for the residents of the communities of Labrador West to take advantage of a

situation where, if not implemented, they would be disadvantaged and disadvantaged most

unfairly.

I am not going to belabour this point, Mr. Speaker. We have agreed to

accept the spirit and the provisions of Bill No. 49.

Thank you, Mr. Speaker.

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

MR. HARRIS: Thank you, Mr. Speaker.

I would like to rise and speak on this bill in support of the

legislation to amend The Tobacco Tax Act, to remove the disadvantages from the people of

Labrador West in terms of operations. We are dealing with an area of - I suppose we are

taxing, it used to be called sin taxes at one time. I don't know if it is a sin to smoke a

cigarette. I know it is very unhealthy and something that we try to discourage somehow or

other, but it is one of those things like gambling, I guess, with governments. We do not

like it but we like to make money on it.

I am not going to get into a big, long speech about these efforts/ I

know the bill itself has directed a very specific point that I think needs to be done. It

is one of those things that results really from some major changes that the federal

government undertook for similar reasons between Canada and the United States having to do

with border crossings, illegal activities and smuggling - smuggling undertaken, really,

with the cooperation of the major tobacco companies who are facilitating the sending of

cigarettes to the United States and having them smuggled into Canada to be sold; so the

clamping down and solving the problem at that level, caved in and reduced the taxes.

We now have a situation where we have differential taxes in the two

provinces. Newfoundland has managed, for the most part, to maintain its high tobacco tax

rate with some difficulty, but obviously in border areas where individuals are able to

walk across the border or drive across the border very easily and get tobacco in another

province which has a different attitude towards tobacco taxes, this is a problem.

I think it is something that has been worked out by the Minister of

Finance, and rightly so, with the commercial community, the business community of Labrador

West, and I support this legislation.

While I am on feet, though, I will say that I was disappointed that the

federal government is not entertaining the additional tax on cigarettes that could be used

to - they are not calling it a tax. I guess the fact that it may well be a tax is causing

the problems. The efforts of Senator Kenny to introduce a special levy on cigarettes that

would be used to create a fund to support efforts to stop young people from smoking is

something that is a very high priority in my books. We do see, surprisingly, shockingly,

and frighteningly for parents of young children, that the rate of young children smoking -

teenagers - is actually increasing. It is astounding, and it does not seem to be that the

proper efforts are able to be made to dissuade people from smoking. I think that the

effort has to be redoubled and better efforts have to be made to ensure that young people

do not start smoking.

One of the things that we found when we debated this issue in the House

- the Social Legislation Review Committee that I was on a number of years ago when we

introduced some changes to the regulations about selling cigarettes to minors, and other

efforts - we heard testimony that indicated the price of cigarettes itself was a major

deterrent; that the higher the price was, the less young people smoked. Here, in a sense,

we are reducing the cost of cigarettes to young people in Labrador West. We are making it

easier and cheaper for young people in Labrador West to buy cigarettes. I know that is not

the intention of the bill and the minister, I am sure, will address that when he replies.

We are actually making cigarettes cheaper for young people in Labrador West, thereby

encouraging them, or at least giving them more encouragement, to smoke than we would be

otherwise.

I know the Member for Labrador West is worried about that because it is

a serious problem. It is a serious problem because young people are smoking at a faster

rate today than they were last year, and being introduced to smoking. As we all know,

tobacco is additive, nicotine is additive. I don't have much trust or faith in the tobacco

companies whose interests are totally at variance with the public good in this matter,

totally at variance with the good health of people, totally at variance with the desire of

governments to control health care costs, totally at variance with governments' efforts to

increase the quality of life for our citizens. Here, in a sense, we are making cigarettes

to juveniles and young people, even though it is illegal, more accessible because of

reducing the cost.

I support the legislation reluctantly. With great reluctance I support

the legislation, not because it does not partially solve a problem that people have in

Labrador West; because the problem really is compounded not by people going across the

border to get cigarettes, but the problem is compounded by the fact that when they go

across the border to get cigarettes they spend money on other things. They cross the

border to go and get cigarettes in Quebec. They go to a supermarket to buy the cigarettes,

and then they buy groceries. They go to another store to buy cigarettes and they buy

something else. The business for cigarettes is not the only business being lost to

Labrador West; it is other business as well.

It is with reluctance - and I know the government has acted with

reluctance as well - but it is a measure that has to be undertaken in order to solve the

problem that we have in that one particular area of our Province - or the two areas of

Labrador West and Southern Labrador where, in both of those areas, easy access to the

Quebec tax regime for tobacco is available.

That is all I have to say on the issue. I support it with reluctance.

Also, I am very mindful of the effects of the cost on the ability of young people to

access smoking, and with regret that the federal government has not seen fit to act on

Senator Colin Kenny's efforts to have an additional levy that would create a fund to fight

against young people's desire to smoke and to - because these things work, these programs

work, and we should have more money to be able to ensure that they can be put into place.

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

MR. CANNING: Thank you, Mr. Speaker.

I want to speak on this bill today because it has a serious implication

to the businesses in Labrador West. I understand and appreciate the words of the speaker

who just spoke with respect to youth smoking. It is a serious problem. This particular tax

change was not meant to increase smoking. It was really meant to change the point of sale

for tobacco products, specifically in Labrador West and on the South Coast of Labrador.

I would point out that this has made huge changes to the small business

community, especially in the towns that I serve, Labrador City and Wabush. They have seen

their businesses increase, sometimes two- and threefold. This does not show at all that

there are extra tobacco products being sold. In fact, what it does show is that it is

being sold now within the communities of Labrador rather than being sold through Fermont.

Because what was happening, of course, was because people were travelling to buy their

tobacco products in Fermont, they were also purchasing other products, other consumables,

and this was driving businesses away from Labrador West. It was having an impact on jobs

for people in the retail sector.

Mr. Speaker, I want to point out too that the federal excise tax has

not been changed. The federal excise tax stayed as it was. The federal government has not

helped to try to change the problem faced by retailers there. I do appreciate the point

that was made by the member previous in terms of a special tax or some form of tax by the

federal government that should be placed to ensure that there is a program to prevent

youth smoking in our country. Once you began smoking, it is very difficult to quit. I

believe that the best time to intercept this whole thing is at an early age, to ensure

that our youth understand the impact of smoking.

This particular bill, Bill 49, I do appreciate that the government took

this unto themselves to assure that retailers in Labrador West can compete on a level

playing field. I support it strongly and endorse it and, in fact, argued strongly to have

this presented to the House.

Thank you.

MR. SPEAKER: If the Minister of Finance and Treasury Board speaks

now he will close the debate.

The hon. the Minister of Finance and Treasury Board.

MR. DICKS: Thank you, Mr. Speaker.

I think most of the members and I appreciate most of the comments that

have been made in support of the bill. It is something that I think some people indicated

that they found distasteful for various reasons, but it is a practical necessity. I think

it works well for the reason my hon. colleague as well indicated to the House. For these

reasons, I commend the bill to the House and move second reading.

Thank you, Mr. Speaker.

On motion, a bill, "An Act To Amend The Tobacco Tax Act (No.

2)", read a second time, ordered referred to a Committee of the Whole House on

tomorrow. (Bill No. 49)

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

MR. DICKS: Mr. Speaker, Order No. 31, which is,

An Act To Amend The

Public Service Pensions Act, 1991, Bill No. 54.

Motion, second reading of a bill, "An Act To Amend The Public

Service Pensions Act, 1991". (Bill No. 54)

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

Treasury Board.

MR. DICKS: Thank you, Mr. Speaker.

This bill is a companion to the bill that the House just approved on

second reading. It, as well, provides for payments into the Public Service Pension Plan of

$40 million yearly which, as well, goes toward the unfunded liabilities. It is a fairly

straightforward bill that has merely one clause. The amounts are set forwarded there. I

think my hon. colleagues understand the necessity for doing so.

The Public Service Pension Plan is the one that is in the best shape,

with the highest ratio of funding, but it is still below 50 per cent. This, over time,

will improve it. We have the option in here to either pay it in cash, if revenues are

sufficient, or to issue a bond which, of course, over a period of twenty-five years

carries an interest rate of 8 per cent, which is higher than the rate one would get in the

market these days, and will go a long way towards dealing with future liabilities and past

liabilities as well.

Thank you, Mr. Speaker.

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

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

I guess this piece of legislation, I say to the Minister of Finance,

basically reflects the agreement that was reached earlier this year. Would that be a

correct statement, the agreement that was reached earlier this year? This piece of

legislation gives government more flexibility. Have you decided, in terms of - the

government of the Province shall pay into the pension plan, payments of $40 million yearly

- how you are going to do that? Will it be coming out of current account? Will you issue

what you have alluded to here in terms of a twenty-five year bond? Or will it be a

combination of both? Those are the concerns.

Clearly the bill is measured at solving the unfunded liability, the

problem associated with the public pension plan. We also have to do it with all other

pension plans, because those are problems we all have to deal with in the Legislature and

at some point we have to do it. The sooner we act, our exposure as a Province becomes

less, if we act now in terms of what the Province is doing, in terms of unfunded

liability, but all pension plans.

I understand fully the reason for the bill,

An Act To Amend The Public

Service Pension Act, 1991. It is a problem that all governments of all political stripes

have had to come to terms with, in dealing with it. This is one measure, in a very bona

fide way, to deal with the unfunded liability situation so that those public pensioners

who have contributed, who are continuing to contribute into the plan, that when they reach

the age where they can draw a pension, that is, in fact, there for them.

This is a bill that speaks for itself and is self-evident in terms of

government's attempts to solve the unfunded liability portion, thus reducing all of our

liabilities of the Province and continuing to fund other services.

Thank you, Mr. Speaker.

MR. SPEAKER: If the minister speaks now we will close the debate.

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

MR. OTTENHEIMER: Thank you, Mr. Speaker. I would just like to speak

briefly with respect to Bill No. 54,

An Act To Amend The Public Service Pensions Act,

I concur entirely with the words of my colleague, the Leader of the

Opposition. It has been unfortunate, I would say, that this bill only goes so far. We see

concerns that have been expressed by representatives of the Retired Public Service

Pensioners' Association. They have expressed their concerns loudly. They were here in

great numbers approximately ten days ago but unfortunately this government, to now at

least, continues to refuse to listen to what are legitimate and bona fide concerns as

expressed by a group of individuals, disadvantaged individuals in this Province, who have

not seen any assistance being attributed to them for almost a ten-year period of time.

It is unfortunate that there appears to be even absolutely no

willingness by the minister and by members opposite to even sit down and engage in

meaningful discussions with representatives of Treasury Board, with representatives of

unions - because their union has now taken an active interest - and with representatives

of the Public Service Pensioners' Association. If the minister were prepared to do that,

that would at least indicate a willingness to listen to their concerns, to work towards

some move and some resolution to what has been a very agonizing dispute for thousands and

thousands of dedicated public service pensioners in this Province.

We have introduced in the past a private member's motion which

unfortunately was defeated many months ago. There have been numerous petitions. There have

been numerous occasions when, during Question Period, members of the Opposition have

raised issues and have asked questions on behalf of public service pensioners in this

Province but, unfortunately, always on deaf ears. It is most unfortunate. What this

message and signal is to the 11,000 public service pensioners in this Province is that

their government simply does not care. It does not want to listen. That is a very sad and

unfortunate message.

Again - because we will continue to fight on their behalf - I say to

the minister, use this opportunity when we have seen significant numbers in the lobby of

Confederation Building, use this opportunity to say to 11,000 retired Newfoundlanders and

Labradorians: Yes, we will try to find a way to work with you with a view to a resolution

of a concern and a dispute which has been ongoing for years.

I know the minister says: Well, there are a variety of issues and

reasons why we cannot do it. I say to the minister: Sit down with the group and work

towards finding a way to meet their needs, to pay particular attention to those

individuals who are on the lower end of pensions. To say that there are individuals

receiving pensions in excess of $100,000 a year is an unfortunate answer when in fact we

know there are hundreds, perhaps thousands, receiving pensions in the range of $7,000,

$8,000, $9,000, $10,000 or $11,000 a year.

It is those individuals for whom we make this request once again.

Again, I would ask the minister to carry the torch, to lead the way, to show some

leadership, and to show that this minister and this government has, as a part of its

mandate, a genuine concern for approximately 11,000 Newfoundlanders and Labradorians.

Thank you, Mr. Speaker.

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

MR. HARRIS: Thank you, Mr. Speaker.

I rise to speak in second reading on Bill No. 54,

An Act To Amend The

Public Service Pensions Act, 1991.

I support the bill itself in adding $40 million yearly into the public

service pension plan. That will go some way, as the minister has indicated, in addressing

the unfunded liability of that fund which the minister indicates is funded at less than 50

per cent at this point.

There is no magic in saying that the fund ought to be fully funded to

100 per cent on this particular day or that particular day, or some other particular year.

There are obviously financial implications for the future in obligations that are

undertaken today, obligations that we have in the Public Service Pension Act.

I want to talk about those who are already retired and those who are

fighting with government now to get some recognition for their problems. We know, Mr.

Speaker, that an increase has been sought for some years by the public service pensioners

who back in 1989 had the practice discontinued whereby pensioners received the same rate

of increase as the public sector workers had negotiated.

Since I have been in this House, when I was elected in December 1990, I

have been challenging the government, and the previous government, on this issue because I

believe that there was an established practice granted to a pension increase to coincide

with public sector workers. That created a reasonable expectation -

AN HON. MEMBER: (Inaudible).

MR. HARRIS: I know this member wants to distract me because he does

not want the issue to stay alive about retired pensioners in this Province. He does not

want that issue to stay alive. He wants it to go away because it is causing his government

problems. The reasonable expectation has been created. It is Friday morning. If the member

wants to start getting on with that we could be here a long time debating this issue and

many others, but I want to talk about pensions, Mr. Speaker.

MR. SPEAKER: Order, please!

MR. HARRIS: I want to talk about pensions and I want to talk about

what is happening to the retired pensioners who are on very low fixed incomes, because

their ability to look after themselves and live in dignity is being affected by this

change in policy.

Whatever way you want to cut it, Mr. Speaker, it is a change in policy

by this government to refuse to give recognition to the pension plan or a feature of the

pension plan that was based on a reasonable expectation that their pension entitlement

would increase as the public sector pay increased.

What are we going to do about it? Are we going to stonewall them? Are

we going to talk about $100,000 pensioners and try and turn the public against them? Is

that what we are going to do? Talk about the massive cost of implementing this and say the

treasury will be bankrupt? Is that the solution? Is that the way to deal with this

problem? Is that the way? Try and turn the public against them, let's talk about: We will

have to raise taxes to deal with this problem? That is the kind of response we have had so

far. We have not been looking for creative solutions. We have not been looking for ways to

ameliorate the problem as faced by the lower income group in this pension group.

I was out there in the lobby, as was the Member for Virginia Waters,

talking to pensioners. Seriously I might say, not in a cynical way. I know the member was

as serious as I was in being there and supporting them. Not in a cynical way and coming in

here afterwards and voting ourselves an increase. Because I was not in here. I don't think

the Member of Virginia Waters was in here either when the vote went on that afternoon.

MR. G. REID: (Inaudible).

MR. HARRIS: The Member for Twillingate & Fogo was not either.

That is fine. What I want to say, Mr. Speaker, is that there is something that can be done

about this. It is not all or nothing. It is not a black-or-white situation. The Retired

Pensioners Association say the same thing. What they say is we have to sit down and

negotiate and talk with them.

I spoke to an individual the other day, a Newfoundlander who worked in

Nova Scotia with the hospitals' board there. He was a trustee of their pension plan. He

said: We found a solution. We had a similar problem. We had a lot of people on low

pensions. What we did was introduce a plan that would give pensioners an equivalency to

the old age supplement. It would bring them up to what they would have gotten if they were

on the old age supplement. Now if you are sixty-five you do not get it, because you are

going to get as much as what you get on the old age supplement. It was what they call an

old age supplement equivalency. That effected a significant raise for people on the lower

end, but did nothing for someone who had a pension of $11,000, $12,000, $15,000, or even

other income, in fact, that would bring them up to that.

I spoke with a former high level civil servant in the Auditor General's

department who says he does income tax for free as a service to pensioners when income tax

time comes around. He said there are hundreds of people he does tax forms for who are

receiving pensions of $4,000, $5,000, $6,000, $7,000 and $8,000. In fact, these were the

people who were out here. The people who were here lobbying and fighting and trying to

change these things were the people who recognize that this is a serious problem for

people on the lower end of the scale.

What do we have happen? We came in here and the minister talked about

the $100,000 pensioner. I do not know who that person is and it does not really matter.

That is not the issue, that is not the one we are talking about, that is not the problem

we are talking about. We have to try and find a solution.

AN HON. MEMBER: (Inaudible).

MR. HARRIS: I think we have to find a solution within reason,

within cost. I think we have to look at what has happened here. I think if you sat down

and talked to the people who are representing this group and said: Let's talk about a

formula, let's talk about something that is going to work to benefit the people at the

lower end in a way that is more important than the people on the other end. I think that

it is important to look at what the solution might be.

AN HON. MEMBER: (Inaudible).

MR. HARRIS: No, I do not think an across the board increase - I

think there is room to negotiate changes in the established practice. I think there has to

be a commitment to sit down and talk about that and try to find a solution.

The reason I put forth the resolution I did on Monday - which was to

delay the increase for Members of the House of Assembly till we find that solution - is to

give members of this House, on both sides, a stake in helping to find a solution. We

should have a stake in helping to find a solution that is going to be - I think the

retired pensioners are certainly prepared to be flexible. They are here talking about a

genuine need and a genuine problem that they face and they want a solution.

I support this measure in the bill that we have because it does do

something to help the unfunded liability. At the same time, we should be doing something

positive to ensure that our provincial government retirees are not totally ignored by this

government when they come seeking to have government recognize its responsibility to

public service pensioners.

Thank you, Mr. Speaker.

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

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

I have just a few comments on this particular bill, and again to echo

the comments that were made by my colleagues on this side of the House.

This bill does not go far enough. This bill does not have any inclusion

of any assurances that our public service pensioners are going to receive an increase. It

has been some years since they have received an increase. There is not much more that I

can add that has not already been said on this side of the House, other than to voice my

concern as well for our public service pensioners, who we have seen lobby for the past

year and half, who we have supported for the past year and half in their fight for an

increase to their public service pensions, and who we will continue to fight on behalf of

here in this House. I think it is safe to say that a government led by our Party would see

an increase to the public service pensioners. We feel that this bill should give

consideration to seeing an increase in the public service pensions.

With that said, I will give leave to another member to speak on this

bill.

MR. SPEAKER: If the Minister of Finance and Treasury Board speaks

now he will close the debate.

The hon. the Minister of Finance and Treasury Board.

MR. DICKS: Thank you, Mr. Speaker.

I thank the hon. members for their comments. I believe members,

notwithstanding views on other matters, understand the importance of doing this. I thank

them for their support for the bill and move second reading.

On motion, a bill, "An Act To Amend The Public Service Pensions

Act, 1991," read a second time, ordered referred to a Committee of the Whole House on

tomorrow. (Bill No. 54).

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

MR. DECKER: Mr. Speaker, Order No. 26, "An Act Respecting The

Management Of Waste Material," Bill No. 53.

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

Management Of Waste Material". (Bill No. 53).

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

MR. LANGDON: Thank you, Mr. Speaker.

When the Packaging Material Act was brought into the House over a year

ago the mandate of that particular board was to implement a program for the recycling of

beverage containers. That program has been in place for awhile and is meeting the

objectives it was set out to meet.

However, when the Multi-Materials Stewardship Board wanted to get into

other recycling products like tires, glass, newspapers, household hazardous waste and so

on. We were told by the Department of Justice that the original legislation was not broad

enough to encompass all these particular programs.

Basically what we are asking today is to replace that Packaging

Material Act with the new act here,

An Act Respecting the Management of Waste Material, so

that it legitimizes the Multi-Materials Stewardship Board to supervise these particular

new initiatives that are in planning process now and we hope to implement in the

not-too-distant future. A few of these are well under way and a lot of planning has

already been done into it. We feel that this act really, in a sense, will help to clean

the environment and help to restore it to the pristine nest that we all would wish to see

at the end of the day.

I will not have too much more to say with this at this time but in

committee stage, I am sure, there might be other questions that the Opposition might have

and at that time I will be prepared to deal with it in committee stage.

Thank you, Mr. Speaker.

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

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

Mr. Speaker, we do have some concerns with this bill. While we agree

that the Multi-Materials Stewardship Boards are doing good work and we see fewer and fewer

beverage containers on the streets, there are concerns with that, such as containers not

being allowed to be crushed prior to being brought back for recycling and so on.

There was tremendous opposition by the public when that bill was first

introduced, towards paying a deposit on containers. While this bill does not specifically

say that there will be deposits put on tires and glass and newspapers and so on, it does

give the Multi-Materials Stewardship Boards the right to do so. If this bill were to pass,

what guarantees do we have that would not take place?

We do have some concerns here. We all agree that the protection of our

environment is something that is becoming more and more a thing that people are becoming

aware of, and it is a very important thing if we are to enjoy what we have today. We are

going to have to protect it so that generations to come continue to enjoy it. With that in

mind, we see the goods points that are made in the bill but at the same time there are

concerns that there will be deposits put on everything from newspapers to motor vehicle

tires.

There is a

section in this bill that speaks specifically about offenses

and it relates to if a party is guilty of not carrying out what is put forward in this

legislation. A person who provides the minister or board with false or misleading

information or fails to provide information that is required by this act or regulations

may be given a fine of not more than $250,000.

That is a considerable fine and we have no problem with that and with

that amount, but at the same time there may be other ways as well of attacking litter and

attacking people who violate our environment.

Within the act,

an act regarding the waste disposal act, there are

fines right now within legislation, such as $25 for anybody who is caught littering and

that type of thing. I would suggest that instead of penalizing everybody by putting a

deposit on tires, newspapers or whatever, that we look at putting greater penalties in

place for the people who violate the environment; people who, while driving out the

highway, throw a pop tin out their window, or throw a bag - a convenience store garbage

type of thing - out their windows, which we see all over our roadside throughout the

Province.

If there were much stiffer penalties put in place for those people who

violate, not only would it be a deterrent to those who violate our environment but it

would also provide some revenue to help in policing, to help with the Royal Newfoundland

Constabulary or RCMP, or even the St. John's enforcement agencies and so on, to police

those who violate. That is perhaps a suggestion that we can look as opposed to putting in

place deposits on almost everything we use.

Right now, while the numbers are increasing on beverage containers,

there is still somewhere in the 50 per cent or 60 per cent range. There is some revenue

still within government to put in place new initiatives and new recycling depots and so

on.

There are arguments on both sides of putting deposits on materials - be

it mustard containers, newspapers, tires or what have you - but it also leaves a very open

window for government, without any consultation through the House of Assembly, only

through Cabinet, to put such levies in place.

That is also a concern, the fact that the bill says that the minister,

with the approval of Cabinet, can make such changes to programs without any debate or

consultation with the House of Assembly, or without any consultation with the people of

the Province.

For the most part, what is contained in the bill is something that we

would agreed with. There are some very real concerns. Those concerns I will further

discuss with my caucus on Monday, prior to this bill being read and debated in committee.

I would ask that the minister and government look at some of these

concerns so that they can be debated in committee, so that there can be some answers

provided and maybe some of our recommendations can be looked at seriously when it comes to

the committee stage.

Thank you, Mr. Speaker.

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

MR. HARRIS: Thank you, Mr. Speaker. I rise to speak on the

legislation before the House concerning the disposal of waste materials. I have a number

of concerns about the process which government is undertaking through this Multi-Materials

Stewardship Board.

The whole issue of the requirement for recycling, and the necessity to

deal with the problem, arose a number of years ago - and (inaudible) I suppose. It arose

because there was a challenge in particular to the soft drink manufacturers who were

failing to use any conservation measures in the distribution of soft drinks in this

Province. They were under a challenge because they were not using returnable bottles. The

beer industry, for the most part, uses returnable bottles. They were getting a 97 per cent

to 98 per cent return on beer bottles. There was one really good reason for that. Mr.

Speaker, there was one very good reason for the 97 per cent and 98 per cent return on beer

bottles that were going to be washed again and used again, and that was because they were

worth ten cents each.

When you bought a dozen beer, $1.20 of the cost was the cost of the

bottles, a deposit on the bottles which you would get back. Now the bottles obviously cost

more than that, but they were reused a number of times. I am told fifteen or more times.

There was some pressure, because this was the only province in Canada - and maybe still is

- where there was not one single returnable soft drink bottle in existence, except

souvenirs kept over from the days when they had them. Through successive years the soft

drink manufacturers had convinced the Government of Newfoundland, one way or the other,

through lobbying efforts or whatever, that they did not have to do that here.

P.E.I. could have a total refillable bottle policy and enforce it and

preserve their environment, New Brunswick could, other provinces could but no, not

Newfoundland. Newfoundland was open season for the soft drink manufacturers to have

disposable bottles: one use, no deposit, no return bottles.

That has changed obviously, we are supposed to think. The policy has

not changed. There is still not one single returnable bottle for refilling in this

Province outside of the beer industry. The logic of it is totally amazing, but I hear

people say: You can't do that. You can't require companies to have refillable bottles or

they will move out of the Province. So does this mean you cannot buy soft drinks in

P.E.I.? You cannot buy Pepsi and Coke in P.E.I.? I have had people from Browning Harvey

say: We can't do that. They will move out of the Province like Coke did, if you force them

to have refillable bottles.

The logic is amazing. I cannot understand it. Why would you move out of

the Province because you are forced to have refillable bottles? You mean, you are going to

abandon the Newfoundland market? You are not going to sell Pepsi in Newfoundland because

you have to have a returnable bottle, like they do in P.E.I., like they do in other

provinces? Is that what we are going to have?

So we have done nothing. This legislation was really promoted by the

soft drink industry through their lobbying efforts. They shifted the whole debate away

from them and shifted it into littering. They blamed Newfoundlanders for the problem, not

them, not the ones which were producing the 13 million bottles per year that were ending

up in our landfills. That was not their problem, that was not their fault. That was the

people who left them on the highways or left them somewhere else. The problem was

littering and we needed to have a $1 million fund, I think, to promote anti-littering.

That was what happened. This government was hijacked by the soft drink

manufacturing council or soft drink industry into introducing this kind of legislation.

Now we are into the solid waste management and stewardship and all kinds of wonderful

euphemisms, but the reality is that we still do not have one single refillable soft drink

container in the market in Newfoundland today.

What are we doing now? We had a deposit-return system, but the deposits

are six cents and the return is three cents. Not really enough money to guarantee a

return, and we have not even seen any report card on this. Where is the report showing the

effectiveness of this program? We know we have a 97 per cent return on beer bottles that

are being refilled, that are worth ten cents each. If you bring them back you get ten

cents. That has not changed. So a ten cent bottle, because it gets brought back and gets

refilled, goes back into the market. Does a three cent beer can? What happens to a three

cent beer can or a three cent soft drink can? What are they worth? The six cents that you

pay when you go to a store to buy other products, how many of them are returned? What

happens to them?

We have not seen any report. We know that something is happening. We

have not seen a full report demonstrating the value of this program. Now they want to

expand it. Why is that? Are they building an empire there with this deposit money? We know

they had leftover money last year, they had a surplus. Maybe they are looking for

something to do with it to build their empire, without necessarily finding the best

solutions to the problem. It is now out of the hands of government.

AN HON. MEMBER: Forty-nine per cent.

MR. HARRIS: The Member for St. John's South says 49 per cent of the

containers were returned. That is not very good compared to 97 per cent of beer bottle

returns.

AN HON. MEMBER: (Inaudible).

MR. HARRIS: No, beer bottles get 97 per cent or 98 per cent. I

guess it is breakage or people lose them, or whatever happens to them. They end up in

someone's basement. Somebody is hoarding them for years and waiting till they get a

million dollars' worth of beer bottles. I do not know.

AN HON. MEMBER: (Inaudible) home brew.

MR. HARRIS: Or making home brew. I think that was the biggest loss.

A certain percentage of the beer bottles end up in the home brew market, if you want to

call it that.

Mr. Speaker, if we are only achieving 49 per cent for other containers,

what is the reason for that? Where is the report analyzing that? Where is the

accountability here in terms of whether these policies are working and whether they need

to be amended and made to work first, or see whether they are going to work, before we

start giving extra powers and new powers to this board?

Solid waste management is a very important thing. It is very expensive

in this Province to maintain landfill sites and to make sure they are properly looked

after, and to make sure they are not a threat to the environment. The least of amount of

stuff or the lesser amount of stuff that goes on these landfill sites, the better.

I would like to see a better detailed report on how well this policy is

working so far and what the alternatives are before we start giving this board more power

and authority.

Yes, I would like to see a system which looks after tires. You know,

there are lots of automobile and truck tires in this Province that get disused and

disposed of annually. We don't really know what happens to them, whether there is any

effective program to do something about it. Whether this stewardship board is the route to

go on that has yet to be demonstrated. It has yet to be demonstrated whether they are the

appropriate body to be involved in this, or whether there ought to be some other policy or

some other approach.

I proposed a number of years ago that for automobiles there ought to be

a system which would guarantee that they don't end up over cliffs or driven into the

woods, auto wrecks. Some system which would guarantee their return could be done. It could

be done by the government. Instead of going the punitive route of having $2,000 fines for

people whose vehicles end up in the environment, another approach might more effective.

That could be done through existing legislation, by changing the legislation instead of

giving over authority to this Multi-Materials Stewardship Board, which is effectively

dominated by people who have a stake in the recycling business, or in the case of the soft

drink manufacturers, in the manufacturing.

I think there are no goals obviously being set to ensure an adequate

mix of refillable and recyclable materials. We are at a disadvantage here in recycling. We

are at a great disadvantage in recycling because of transportation costs and energy costs

that would be used because of our geography. We are at a great disadvantage in terms of

recycling programs and recycling availability. Instead of throwing all our eggs in the

recycling basket, which is yet to be demonstrated is an effective way of dealing with the

problem, we should still be examining the refillable container route, which has worked

from a tourist perspective on Prince Edward Island. It seems this government has given up

on any approach that would reduce the amount of waste, reduce the amount of materials that

end up in the environment one way or other.

The recycling obviously can only look after part of the problem. We

have not identified yet to what extent a refillable container program, vigorously adopted

and enforced and promoted by government, would reduce the amount of wasted energy, wasted

materials, and in this particular Province, a wasted use of transportation resources that

makes our recycling efforts less economical than in other areas with more concentrated

populations, more sophisticated recycling opportunities, and less transportation costs

involved in taking advantage of it.

Mr. Speaker, I certainly support any efforts in reducing waste

materials but I do not think government is properly addressing all the options that are

open to it.

MR. SPEAKER (Snow): If the hon. the Minister speaks now he will

close the debate.

The hon. the Minister of Environment and Labour.

MR. LANGDON: Thank you, Mr. Speaker.

I want to thank my critic from the Opposition, the Member for St.

John's South, and the Member for Signal Hill-Quidi Vidi for their comments. We will look

at some of the points they have said. I think suffice to say here, what we want to do, of

course, is to clean up the environment. Through the different programs we want to initiate

a cleaner, safer and healthier place for all of us to live.

With that I want to