March 4,

HOUSE OF ASSEMBLY PROCEEDINGS

Vol. XLII No. 5

The House met at 9:00 a.m.

MR. SPEAKER (Dicks): Order, please!

Statements by Ministers

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

Technology.

MR. FUREY: Mr. Speaker, I am pleased to inform the House

of Assembly today that Cabinet has now made an appointment to the vacant

position of President of Enterprise Newfoundland and Labrador Corporation.

Hon. members may be aware that this vacancy arose after the

former incumbent, Mr. Jim Janes, retired on medical grounds several months ago.

Following Mr. Janes' retirement, a selection team was put in place and

advertisements were run publicly to attract candidates to this position. A wide

response to this advertisement was received, and a selection team chaired by the

new Chairman of Enterprise, Mr. A. A. Brait, screened the applications and set

up interviews with appropriately qualified candidates.

On the basis of the recommendations of this process, Cabinet

has now decided to appoint Mr. Philip J. Wall to the position of President of

Enterprise Newfoundland and Labrador Corporation, effective Monday, March 7,

1994. Mr. Wall is currently Assistant Deputy Minister of Finance with

responsibility for the Province's Debt Management and Pension Programs. He is a

career civil servant with twenty-five years of experience with government.

During that time he has held progressively responsible positions, and served on

the board of directors of a number of public sector corporations.

I believe that Mr. Wall's experience is well suited to the

demands of the position of President and CEO of the Enterprise Corporation. I

look forward to working with him in his new role as a strong player in economic

development for this Province.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

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

MR. SIMMS: Thank you, Mr. Speaker, and I thank the

minister for informing me beforehand about this appointment and about this

decision. It is a good example of co-operation that the Premier referred to in

the Throne Speech debate on Monday.

Mr. Speaker, I know of Mr. Wall, and so do many members on

this side of the House, of course, because he has been in the public service, as

the statement says, for twenty-five years. I have always found him to be very

accommodating. He is certainly a non-partisan individual, as far as I know, and

very helpful and co-operative with any member of the House of Assembly on any

occasion that arises. He has experience right now in finance for the Province's

debt management, That will help him deal with the Jean Payne situation, I

suspect.

MR. SPEAKER: The hon. member's time has elapsed.

MR. W. MATTHEWS: By leave?

MR. SIMMS: Just very briefly, Mr. Speaker.

MR. SPEAKER: By leave.

MR. SIMMS: We want to congratulate Mr. Wall on his

appointment and commend the group that did the screening. The fact that he went

through - I think the minister told me this morning - one hundred and some-odd

applicants and ended up on top, I think is a tribute to him. I think he is just

the man to clean up the Liberal patronage trough down there, starting with

firing some of the vice-presidents at ENL.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

MR. SIMMS: That won't happen unless the minister leaves

him alone and lets him do his job, Mr. Speaker.

Thank you.

SOME HON. MEMBERS: Hear, hear!

MR. HARRIS: Mr. Speaker.

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

have leave to address the House?

SOME HON. MEMBERS: Agreed.

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

MR. HARRIS: Thank you, Mr. Speaker.

I would like to join in congratulating Mr. Wall on his

appointment. It appears that Mr. Wall's wide experience in the public service

qualifies him well for this job, and I look forward to seeing the actions of Mr.

Wall in his new position.

MR. SPEAKER: On behalf of hon. members, I would like to

welcome to the public galleries twelve students from the Parade Street Campus of

Cabot Institute, accompanied by their teachers, Susan Kergoat and Daisy

Williams.

SOME HON. MEMBERS: Hear, hear!

Oral Questions

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

MR. SIMMS: Mr. Speaker, I would like to ask the Premier -

first of all I understand, from his comments yesterday, and I think since then a

public press release has gone out, that he is going to Toronto for three or four

days. On Sunday, I believe, he is leaving. The release yesterday suggested he

was going to follow up on some business contacts, I think, that might have been

initiated by the Minister of ITT. My own view is that is possibly a diversion,

but that is only because I am sceptical quite frequently, because I think it is

too much of a coincidence that he is making this particular pilgrimage to the

financial capital of Canada just when the government has tabled its

privatization legislation. So I want to ask him: While he is in Toronto will he

be meeting with potential investors, investment brokers, or any financial agents

who may be involved in buying Hydro shares or in promoting the sale of Hydro

shares to their clients?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: I would say that every major investment

dealer in Canada will be involved in the sale of Hydro shares. That's my guess.

I don't know, but I would guess that virtually all of the major dealers in

Canada would be involved in that sale.

If I am meeting with investment dealers, then I would say the

answer to the question is yes, but I would also tell the House, in case the hon.

member wants to draw some connection, that these meetings were set up a long

time ago. Had I known that we would be debating the Hydro bill today I would not

have scheduled them. I would prefer to be here to deal with it.

I even contemplated, and I asked my staff to look at,

rescheduling but so many people had made so many commitments on it, and I wanted

to speak to the Mining and Metallurgical Conference, Prospecting and Developers

Association, which is important to the Province, so I didn't change the

scheduling, but I would have because I consider this electrical restructuring

and privatization so important that I should be here for it.

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

Opposition.

MR. SIMMS: Thank you, Mr. Speaker. I think the Premier's

answer was yes, he will be meeting with some potential investors, investment

brokers and financial agents (inaudible) - I believe that is what he said -

while he is in Toronto.

AN HON. MEMBER: He didn't say it but he didn't say he

wouldn't.

MR. SIMMS: A supplementary question: Since the government

is moving fairly quickly, quite quickly in fact, on the sale of Hydro. It is

clear that Newfoundlanders are not going to have a lot of time to think about

this particular issue. Will a preliminary prospectus for the Hydro sale be

issued to major buyers or major potential buyers and investment brokers within

the next few days before there is a vote in the House? When he responds perhaps

he can tell us whether or not a prospectus may have already been issued, at

least to selected clients.

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: I don't know how much more vivid an

imagination can become than that, Mr. Speaker. He now tries to set up a

proposition that I am going to Toronto to meet with brokers in connection with

the sale of Hydro. It is utter trash. It has no merit whatsoever. So the answer

is no, I am not going to Toronto to meet with any brokers in connection with

Hydro - no.

MR. SIMMS: Why didn't you say that?

PREMIER WELLS: Well, that is what I said, no, but the

question was, was I going to meet with brokers who would be involved. If I meet

with any brokers at all in Canada I am likely to meet with brokers who are going

to be involved in Hydro and that's what I explained. Now, Mr. Speaker, I cannot

imagine that any steps will be taken by anybody and let say publicly now so that

anybody responding to these will know, there is no authority whatsoever to offer

or file a prospectus for the sale of Hydro shares or do anything in respect of

the privatization of Hydro unless and until this House approves it. So no, the

answer is no. Nothing will be done publicly to further privatization unless and

until this House approves it.

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

MR. SIMMS: Thank you, Mr. Speaker. So there won't be a

preliminary prospectus. I am glad the Premier answered that question because

yesterday in the House I tried to get the answer from the Minister of Mines and

Energy and the Minister of Finance and neither one of them would admit to it or

didn't know, as a matter of fact.

AN HON. MEMBER: That's not true.

MR. SIMMS: It is true, Mr. Speaker.

Mr. Speaker, supplementary to the Premier. Concerning the

remaining debt, the debt that will remain that will be taken over by the new

Hydro, that debt will continue to be guaranteed by the government. The

government will remain liable for it. I want to ask him because again, the

Minister of Mines and Energy couldn't answer the question or wouldn't answer it

for me yesterday: Will the government be charging new Hydro the 1 per cent

guarantee fee as it does to other companies and has it did to new Hydro or will

new Hydro be let off the hook for that particular thing?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: The phrase the financial advisers and

financial people use to describe the process is called defeasance, it is a word

that only came into use as far I know in the last few years, but here is what it

means. Just take a sum, Hydro owes $100 million, assume it did a bond issue of

$100 million, and it requires a certain amount of interest and a certain amount

to meet the interest and principal repayments periodically. Now that debt is

guaranteed by the Province so the Province is ultimately liable for it and it

goes against our credit.

What the new company will do, is buy, say $100 million worth

Government of Nova Scotia bonds or Government of Ontario bonds of the same kind

in value with a similar cash flow, will buy that outright and deposit it with a

custodian as security for the repayment of the debt. The bond holders of Hydro's

I don't care about the Province anymore, you can write it off your balance

sheet. They call it defeasance. It is a new concept that I had never heard about

until this proposal came up until I heard what they were doing with Nova Scotia

Power.

Now, technically, yes, the Province is still guaranteeing,

technically, but not in reality because the financial community takes it off the

balance sheet and says effectively: don't bother with it, it is the same as if

your guarantee was withdrawn. But in fact, you can't withdraw the guarantee once

given, you can't do that, you don't want to ruin your reputation, so in many

instances the bond holders of Hydro could well be better off if they had a

to back up the bond. It is called defeasance, so the rating agencies and others

effectively take it off the balance sheet of the Province.

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

Opposition.

MR. SIMMS: A final supplementary. I asked about the 1 per

cent fee, he didn't say yes or no, I presume the answer is no?

PREMIER WELLS: No.

MR. SIMMS: Okay, I appreciate that. A final

supplementary, Mr. Speaker.

There have been rumours over the last few days of a plan,

either by the government or Hydro or the government and Hydro to put on a major

advertising campaign, which word is, they will call some kind of an education

program or an education plan, others call it propaganda I guess, to try and sell

this deal or to force-feed it down the throats of the people of Newfoundland. I

want to ask the Premier, can he confirm such a program is planned and will he

tell the House what is the estimated cost or the budget for such a plan, if it

exists?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: No, Mr. Speaker. To the best of my

knowledge, none is planned. None is planned by the government; whether or not

Hydro is doing anything in terms of promoting the sale of its bonds, I assume it

would be. I am sure Hydro is doing something to promote the sale of its bonds

but the government, so far as I know is not carrying on one, but maybe we ought

to, maybe it would be money well-spent to correct the fraudulent

misrepresentations that have being presented in this House. Maybe we owe it to

the people of the Province to do just that. It is not a bad idea, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

PREMIER WELLS: While I am on my feet I just got a note. I

agreed to address the awards dinner of the Prospectors and Developers

Association of Canada on November 18, 1993.

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

MR. SULLIVAN: Thank you, Mr. Speaker.

I would like to direct a question to the Minister of Health.

The minister announced on February 22 that he has appointed a fact-finding team

to investigate the operations of the Grenfell Regional Health Services. Now,

will the minister inform the House if this committee of physicians is empowered

to investigate matters and problems other than those of a medical nature?

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

DR. KITCHEN: Mr. Speaker, the medical team that we sent

to the Grenfell area had a charge of looking at the relationships between

Grenfell and the physicians. They were to talk to the physicians that are in the

employ of the Grenfell Regional Health Services and in particular to examine the

question of physician turnover, which had been raised publicly, and also the

question having to do with the extra billings that some physicians sometimes

make in the Province, and which in the Grenfell Regional Health Services reverts

to Grenfell who in turn have another plan by which physicians are subsidized in

doing various things. We are going to look at all that. That is their mandate,

to look at that. Their mandate is not to look at the structure, organization, or

anything of that nature of the Grenfell Regional Health Services because that is

underway in a different situation. That is the mandate of that physician team.

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

Ferryland.

MR. SULLIVAN: Mr. Speaker, I have in my possession

statements from physicians regarding the opening of their mail and the cashing

of their cheques. Is the committee empowered to investigate and report on the

opening of physician's mail and the cashing of cheques that are made out to the

physicians?

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

DR. KITCHEN: Certain allegations were made, not to me,

because I have had no contact with the physician that the hon. member is talking

about. Contact was made with the news media for some strange reason, and then

for another strange reason with the critic over there in the Opposition. I want

to thank the Opposition critic for what he did. Because he sent me a complete

file, and he also sent me some update. I immediately contacted the Director of

Public Prosecutions and asked him to do what he had to do and let it go at that.

I've since had a very preliminary report that everything

looked to be alright. It may be of a civil nature, but that the police wanted an

audit carried out in the usual way. That is why we sent the team of auditors

there. We sent up the department's auditors to look into the procedures that are

in place with respect to these billings. I have not yet got a final report back

from either the physicians or the Director of Public Prosecutions or the

auditors. I am expecting all that before too long.

MR. SPEAKER: Supplementary, the hon. the Member for

Ferryland.

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

inform the minister that on February 3 I wrote him a letter and included

twenty-seven pages of statements from doctors. I did not speak or do any media

release. I left it in the minister's hands and when he didn't respond - and I

haven't received a response to this day from the minister, since February 3. I

went to the media because the minister wouldn't act.

I also have in my possession statements by physicians that

they have never received cheques for work that they have done for third parties.

The Newfoundland Medicare Commission will not forward payments to Grenfell for

salaried physicians unless that doctor signs a waiver and files it with the MCP.

I ask the minister, will this committee have the power to investigate why La

Regie - that is the Quebec medicare commission - and the Workers' Compensation

Commission are able to forward cheques to Grenfell without a doctor's written

consent by means of waiver?

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

DR. KITCHEN: Thank you, Mr. Speaker. The hon. member is

out there digging in the pile again. We have set up the appropriate procedures.

I can't imagine - immediately I received all these letters that that individual

wrote, I immediately turned it over to the proper authorities. I did it

immediately, within a day or so. That is the proper procedure. Also, I set up a

committee of physicians to look at the relationships between the doctors and the

association - and that is appropriate too. I'm expecting it back. We also sent

up the auditors. If he thinks he can conduct a witch hunt on this matter he is

wrong, you can't do that. The proper procedures have been put in place and in

due time, before long, all will be revealed.

MR. SPEAKER: Further supplementary, the hon. the Member

for Ferryland.

MR. SULLIVAN: Thank you, Mr. Speaker. I've requested on

several occasions a public inquiry. This is a fact-finding mission of physicians

who I'm sure are very capable within the means of their medical abilities. If

the minister has no fears, why doesn't he appoint a public inquiry to get into

all these matters, legalities and otherwise, that the fact-finding commission he

appointed is not equipped to deal with?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. the Minister of Health.

DR. KITCHEN: Mr. Speaker, the hon. member is being silly.

We've turned it over to the Director of Public Prosecutions who can call in the

police if he wishes. We've turned it over to the physicians and we've put the

auditors in. What more does he want? Does he want to get me to appoint him to

have a few personal cracks at people he doesn't like?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. the Member for Humber East.

MS. VERGE: Thank you, Mr. Speaker. I have questions for

the Premier. Yesterday the Premier admitted that Jim Chalker, now the Hydro

board chairperson, controlled the purse strings of his $50,000 a year salary

supplement. Will the Premier confirm that Jim Chalker's law firm has been doing

work on the Hydro privatization, explain the nature of the work, and tell the

House how much the law firm has billed to date and will be billing in the

future?

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

MR. ROBERTS: Mr. Speaker, let me simply say to the hon.

lady that in this case, as is unfortunately too often the case with her, her

premises are completely wrong. Mr. Chalker's law firm, which is Chalker, Green &

Rowe here in St. John's, a very fine law firm indeed, I may add, has not been

retained by anybody, to my knowledge, certainly by neither the government nor

Hydro, in connection with this transaction.

MR. SPEAKER: The hon. the Member for Humber East.

MS. VERGE: Thank you, Mr. Speaker.

In that case CBC Television News was wrong in their recent

report. Okay, I will ask then the Minister of Mines and Energy, why did he say

recently that Jim Chalker's law firm was doing work on the Hydro privatization?

Who's right, the Minister of Mines and Energy or the Minister of Justice?

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

DR. GIBBONS: Mr. Speaker, I tell the hon. member that I

have never, ever said that Jim Chalker's law firm was involved. I have said that

Jim Chalker has been on our negotiating team. He's the best person we could have

for it and I am pleased to have him there.

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

Humber East.

MS. VERGE: Thank you, Mr. Speaker.

A question for the Premier. Yesterday the Premier said -

Hansard shows this - to the best of his knowledge Jim Chalker had no

part in

raising his $50,000 a year salary supplement. If the Premier knows Jim Chalker

was not one of the fund raisers he must know who was. Who did collect your

$50,000 a year salary supplement, Premier?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, I have detailed this to the

House, ad nauseam. Now I know the hon. member and some other hon. members

opposite just like to throw these things out knowing that people have to stand

up, or normally have to stand up and respond to it, in the hope that it will

cause some embarrassment or cause some difficulty. I explained this to the House

seven years ago, or to the public seven years ago when it occurred, everybody

knew what it was all along. I didn't do like the hon. members opposite did and

see their Premier paid, while he was Premier, a supplementary income from the

Party that he represented and see that paid with no comment, that's all okay and

now the fact that I was paid a supplementary salary as Leader of the Opposition

is somehow being thrown up and misrepresentations made about it. I have no

intention of participating in such discussion, Mr. Speaker. I will deal

effectively with the issues that are of concern to the public and for which the

public pay me to be here but I won't waste their time and money fiddling around

with this darn nonsense.

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

MR. A. SNOW: Thank you, Mr. Speaker.

Mr. Speaker, my question is for the Minister of Industry,

Trade and Technology, it's the minister responsible for wildlife. I wonder if

the minister can tell me if the Mealy Mountain caribou herd is a protected herd?

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

Technology.

MR. FUREY: Mr. Speaker, having only been appointed

Minister of 'Wild Life' for a very short time I will have to take that as notice

and check it out and I'll give an answer to that.

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

Menihek.

MR. A. SNOW: Thank you, Mr. Speaker.

Can the minister confirm that the wildlife patrol in the last

few weeks found an encampment in the Mealy Mountain area with evidence that

approximately fifty-six animals have been slaughtered in the area? Can he

confirm that? Can he also confirm that wildlife officials believe that at least

100 animals have been taken from this herd, this year? They suspect that they

were taken by people from the St. Augustine area, can he confirm this, please?

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

Technology.

MR. FUREY: Mr. Speaker, I'll have to get the information.

I can't confirm it because I have no knowledge of it. I have been acting

minister for about a week and I've only had an opportunity to deal with that

department in the last two days but I will undertake to find out the information

and table it in the House as soon as it's possible.

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

MR. WINDSOR: Mr. Speaker, I have a few questions for the

Minister of Finance, we are getting closer to Budget Day, I don't know yet

exactly when it will be but sometime within the next month I'm sure. Would the

minster like to tell us, has he completed the borrowing program for 1993-94, his

borrowing program in various markets? Would he tell us how much he borrowed in

the Canadian market, how much in the US market, Europe, Japan and more

particularly how much was in Canadian or US dollars? How much was in foreign

currency?

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

MR. BAKER: Thank you, Mr. Speaker.

As to what our borrowing program is going to be, that will be

all revealed in due course. Last year I believe we did two issues, one in New

York and the other on the Euro-Canadian market through London.

The total amounts, again, will be revealed in the Budget, and

they were announced at the time. At this point in time I don't know exactly what

they were. I will check very quickly and get the amounts for the hon. gentleman.

As to what the borrowing program is going to be, that will be

revealed in the Budget.

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

Mount Pearl.

MR. WINDSOR: Thank you, Mr. Speaker.

I had some difficulty hearing the minister. I assume that our

borrowing program is complete. Did you borrow all that you had indicated in the

Budget?

MR. BAKER: Yes.

MR. WINDSOR: Okay, thank you.

Mr. Speaker, would the minister tell us what his projected

deficit problem is now for next year. We've been hearing various numbers over

the last number of months. The most recent one, I think, that I recall at least,

was around $70 million - a problem that the minister said he was facing and had

to try to deal with.

Could he tell us, Mr. Speaker, first of all: What is his

target? What would he consider to be an acceptable deficit for this year, if

indeed he is faced with a deficit, and what impact has the federal government

had on that problem? If he had a $70 million problem before, what is his problem

now, and how close is he getting to his target?

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

MR. BAKER: We have been facing a fairly serious problem.

The information given out in November, in the meeting with the union leaders in

December, gave one part of the answer to the hon. gentleman's question, that we

would find it acceptable to have a current account deficit next year in the

vicinity of about $25 million, and that's what we are aiming at. That could vary

$2 million or $3 million one way or the other, but we are aiming at around $25

million deficit on current account.

In terms of the other borrowings, we probably would need

about another $175 million in terms of capital, so we are aiming at the new

borrowing of approaching $200 million, so that's the general aim.

As to the problems this year in terms of bringing in a

Budget, we had indicated to the unions and to the public, back in December, that

over and above what we could acceptably borrow we had about a $96 million, $97

million or $98 million problem that we had to solve. Since then there have been

variations up and down. There has been a further deterioration since last

November in our own source revenues to the extent of probably about $28 million.

There has been a deterioration due to the federal Budget to the extent of about

$15 million, so there has been further deterioration. There have been some other

positives as well, small amounts that would affect these numbers a little, but

our problem then is a fairly considerable one.

We started out by indicating to the public sector unions that

there was a certain segment of that that we wanted to get from our total

compensation costs, which account for 70 per cent of our controllable costs, so

we are sticking to that number. We've gone through the system and are in the

process of preparing a Budget, and I will tell the hon. gentleman that I suspect

we will come in very close to our projected $25 million deficit on current

account.

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

MR. WINDSOR: Thank you, Mr. Speaker. I thank the minister

for that information.

The minister is telling us, then, that he had about a $70

million problem, and he said about $43 million in variances in own source

revenues and so forth. He hasn't mentioned whether or not he has any revised

and down, and we normally get a figure just before, so the minister might have

another figure on that.

Even without that, he's talking $113 million problem. If the

compensation package is 75 per cent of our expenditures, one would assume he is

looking for 70 per cent of $113 million in concessions from the union. Would the

minister like to confirm that's the magnitude of the problem that we're facing

in the negotiations with the public sector unions?

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

MR. BAKER: Mr. Speaker, the hon. gentleman's mathematics

is accurate, and one would normally expect that we would try to find 70 per cent

of that $115 - or around there, whatever it happens to be - that we need to find

from the compensation package, which accounts for 70 per cent of our

controllable expenses; however, Mr. Speaker, we have not gone to that extent,

and we have said to the public sector unions that a much smaller percentage than

70 per cent would have to come from the total compensation package. It probably

is down around 40 per cent right now, and that we wanted to avoid, in this

process, lay-offs as a method of solving our problem. We wanted to avoid

reductions in take-home pay of public servants. We want to avoid that as a way

of finding our solution, and we've suggested other alternatives to the unions,

but the percentage is far less than 70 per cent.

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

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

My question is for the Minister of Employment and Labour

Relations. Can he confirm to the people of the Province today that he and his

department officials are looking seriously at cutting further, student

employment programs and graduate employment programs that are geared towards

getting graduates and students jobs for the upcoming year?

MR. SPEAKER: The Minister of Employment and Labour

Relations.

MR. GRIMES: Thank you, Mr. Speaker. No.

MR. SPEAKER: The hon. Member for Kilbride.

MR. E. BYRNE: Let me ask the minister this. I receive

hundreds of letters but I would just like to bring out one from a gentleman in

Barachois Brook, a young man by the name of Darren Webb. He said that in the

summer of 1993 there were only approximately four out of twenty or thirty

students who were employed during the summer months. I personally feel saddened

by this because students need jobs in order to save money so that they may

further their education, especially today when the cost of education is so

great. Let me ask the minister this, is he or his officials planning to launch a

greater campaign to employ students, or to project further money into student

employment programs so that more students during the summer months can access

more jobs that will help them to further their education?

MR. SPEAKER: The Minister of Employment and Labour

Relations.

MR. GRIMES: Thank you, Mr. Speaker.

In response to the question I think it has been made clear in

public statements that the federal government has announced its intention to try

to enhance opportunities for young people and we will be announcing our

initiatives in the Budget shortly.

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

Kenmount.

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

Minister of Municipal and Provincial Affairs. My question concerns the St.

John's Regional Fire Department and the setting up of a cost-sharing formula to

determine the amounts payable by member municipalities. The minister has

received representations from all municipalities in the region so can the

minister inform the House if the Province has confirmed a formula that is

acceptable to the member municipalities?

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

Provincial Affairs.

MR. REID: Thank you, Mr. Speaker.

No, I cannot firm that to the hon. member. I can only say to

you that I should be ready within a two week period to make a presentation to my

Cabinet colleagues on that whole question and at that time I am sure I will be

in a position to make an announcement to enable all the communities concerned to

know what we are going to do with this problem we have in the Northeast Avalon.

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

Waterford-Kenmount.

MR. HODDER: Mr. Speaker, as the minister knows from his

meetings with Mayor John Murphy and Mayor Judy Bettney there is a current

account deficit of more than $1.5 million that is now being managed by the City

of St. John's. Would the minister assure the citizens of St. John's that his

considerations would include a transition grant payable to the City of St.

John's to offset the $1.5 million deficit on current account that has already

accumulated over the past two years?

MR. SPEAKER: The hon. Minister of Municipal and

Provincial Affairs.

MR. REID: I am sure my hon. friend and colleague for

Waterford - Kenmount knew the answer to that question before he asked it. I am

not in a position to make a commitment with regards to providing funding to any

municipality in the Province right now at this particular point in time as it

relates to a particular problem that involves the Northeast Avalon area. No, Mr.

Speaker, I cannot make that commitment to you right now. I reiterate what I said

earlier, that when the committee report is ready, and the committee report

should be ready in the next couple of weeks - that committee is made up of a

number of Cabinet ministers - we will then take our proposal the normal route

and at that particular point in time I will be only too glad to get up in this

House and tell you exactly what that report will contain.

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

Waterford-Kenmount.

MR. HODDER: Mr. Speaker, a supplementary to the minister.

Will his considerations also involve a fair formula so that all member

municipalities will have a clear role, and a defined role, in decision making?

In other words will he look at the way in which decisions are made on the

Regional Council Board?

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

Provincial Affairs.

MR. REID: Mr. Speaker, let me assure the hon. member that

this Liberal government since 1989 has been fair, and I am certainly sure we

will continue to be fair for at least the next four years, and hopefully into

the 21st Century.

MR. SPEAKER: Question Period has expired.

Notices of Motion

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

Provincial Affairs.

MR. REID: Mr. Speaker, I give notice that I will on

tomorrow ask leave to introduce a bill entitled, "An Act To Amend The Regional

Service Board Act." (Bill No.6).

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

DR. KITCHEN: Thank you, Mr. Speaker.

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

a bill entitled, "An Act To Continue The Newfoundland Pharmaceutical

Association."

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

MR. CARTER: Mr. Speaker, I give notice that I will on

tomorrow ask leave to introduce a bill entitled, "An Act To Amend The Fisheries

Loan Act."

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

DR. HULAN: I give notice that I will on tomorrow ask

leave to introduce the following resolution:

WHEREAS the Agri-Foods sector has the potential to play a

greater role in the economic future of the Province; and

WHEREAS all the elements necessary for a much expanded

Agri-Foods industry are present; and

WHEREAS opportunities for the food processing value added

sectors are largely on top;

BE IT RESOLVED that the House of Assembly endorses the

continuation of efforts of the present Administration and the development of an

Agri-Food public policy.

SOME HON. MEMBERS: Hear, hear!

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

Labour Relations.

MR. GRIMES: Mr. Speaker, I give notice that I will on

tomorrow ask leave to introduce a bill entitled, "An Act To Amend The Workers'

Compensation Act."

MS. VERGE: Where is the Public Libraries Report?

Orders of the Day

MR. ROBERTS: Mr. Speaker, before I ask you to call the

Order we will be debating, let me make a motion that the House do not adjourn at

noon and let me say so there is no misunderstanding, that we intend to call the

second reading of the privatization act. The Premier will conclude his remarks

on the bill and then we assume the Leader of the Opposition or one of his

colleagues will speak, and we will ask the House to continue sitting until the

Leader of the Opposition has concluded his remarks including, for the sake of

clarity, lest there be any doubts, if he chooses to move an amendment, which he

has every right to do, of course, we wish to sit here, we wish to give him every

opportunity to be heard, we shall sit here, Sir, until he has concluded and

another member has adjourned the debate. Thank you very much, Sir. I ask the

motion to be put.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

It is moved and seconded that the House do not adjourn at

noon.

All those in favour of the motion, 'aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: Contrary-minded, `nay'.

Motion carried.

MR. ROBERTS: Your Honour, would you please call, Order

No. 3, the privatization bill.

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

Privatization Of The Newfoundland And Labrador Hydro-Electric Corporation",

(Bill No. 1).

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Thank you, Mr. Speaker.

Mr. Speaker, I don't intend today to cover the bill in the

kind of detail that I did yesterday because most of it is pretty detailed and

accountants and lawyers clauses that accommodate a fairly complex transaction,

rather, I intend to spend some time describing the purpose and the process that

will be followed, but I have arranged, Mr. Speaker, I told the House last week

or earlier this week, that I intended to table at the time that I was speaking

as much detail as I had available to me and could table on the proposal in order

that members would fully understand it, and I have asked them to prepare a

detailed explanation of every clause of the bill and I intend to table a package

that will include all of that so that hon. members will have the government's

position on this quite fully.

Let me first, Mr. Speaker, sort of set the stage for this. In

a sense, it was done yesterday, and I restate again and I refer now to the

Strategic Economic Plan solely to correct the misrepresentations of the Leader

of the Opposition yesterday.

Mr. Speaker, this question of privatization and restructuring

of the public utilities laws and the privatization of Hydro didn't come out of

the blue. It is part of the overall efforts of the government. It is really

identified in the Strategic Economic Plan, but there is nothing in the Strategic

Economic Plan that says specifically we will privatize Hydro. There was nothing

that said we would privatize NLCS. There is nothing that said we would privatize

Farm Products. There is nothing that said we would privatize Newfoundland

Hardwoods. There is nothing that said we would privatize any of them.

But there was this, and here it is. It is one of the eight

principles on which the Strategic Economic Plan is founded and it is number 4.

It appears on page 14 and reads as follows: "The private sector must be the

engine of growth. While it is the role of government to create an economic and

social environment that promotes competitiveness, it is the enterprising spirit

of the private sector that will stimulate lasting economic growth."

The second item is action item 31, and it appears on page 35,

and here is the general statement under which all of these privatizations come.

The government will "[a]void providing services where they can be provided by

the private sector."

Now, we didn't say that includes NLCS, that includes

Hardwoods, that includes Hydro, or it includes anything. It is a blanket policy

of the government, that where it can be provided by the private sector the

private sector will do it.

MS. VERGE: Mr. Speaker, a point of order.

MR. SPEAKER: The hon. the Member for Humber East on a

point of order.

MS. VERGE: Thank you, Mr. Speaker. I would like to ask

the Premier why when Dave LeDrew, the CFCB open line host, asked him during last

spring's election campaign if he wanted to privatize Hydro -

MR. SPEAKER: Order, please!

The member is not raising -

MS. VERGE: - did he fail to answer the question?

MR. SPEAKER: Order, please!

The member is not raising a point of order. A point of order

relates to procedure in the House.

The hon. the Premier.

PREMIER WELLS: Mr. Speaker, I would sincerely hope that

members have greater respect for the taxpayers of this Province than to

interrupt this public debate that is of such importance, that they think is so

important that they are going to frustrate the fair hearing of the issue in this

way. I sincerely hope that hon. members have more concern for the taxpayers than

to follow that kind of (inaudible).

MS. VERGE: Point of order, Mr. Speaker.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

The hon. the Member for Humber East.

MS. VERGE: Thank you, Mr. Speaker, If the Premier has

such concern for the citizens of the Province -

MR. SPEAKER: Order, please!

MS. VERGE: - why isn't he giving them a chance to

participate -

MR. SPEAKER: Order, please!

MS. VERGE: - in this critically important debate -

MR. SPEAKER: Order, please!

MS. VERGE: - by holding public hearings -

MR. SPEAKER: I would ask the hon. member to sit down.

MS. VERGE: - around the Province?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

MS. VERGE: Why is he ramming through -

MR. SPEAKER: Order, please!

MS. VERGE: - the House of Assembly -

MR. SPEAKER: Order, please!

MS. VERGE: - with unseemly haste -

MR. SPEAKER: The hon. member -

MS. VERGE: - this complex -

MR. SPEAKER: Sergeant-at-Arms.

MS. VERGE: - and extremely important legislation -

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please! Order, please!

The hon. member -

MS. VERGE: Oh, oh!

MR. SPEAKER: Order, please!

Will the hon. member please sit down?

Just a moment, please. I might take a moment to caution the

hon. member. Points of order relate to procedures in the House. It is not an

excuse for an hon. member to get up and give a speech out of turn on a matter of

public debate. I won't recognize the hon. member on a point of order on this

matter again because it seems to me that she is not raising legitimate points of

order.

The hon. the Premier.

PREMIER WELLS: Thank you, Mr. Speaker. Now, having set

the basis in which the government is proceeding with both the restructuring of

the public utility industry generally, and privatization, I want now to turn to

the reasons for privatizing Hydro.

Would you get that package of documents for me? It should be

ready by now.

MR. MURPHY: I was just talking to (inaudible), Premier,

it will be down in a second.

PREMIER WELLS: Mr. Speaker, I've had prepared for hon.

members not only a

summary of the provisions of the act, I've had prepared a

summary of the reasons. I will table these in the House too now, so that hon.

members can follow it along, but I don't want to delay any longer, I want to

proceed now.

There are several compelling reasons why this step should be

taken at this time. The first of these is that the reason why Hydro came into

existence in the first place has ceased to exist. It came into existence to

build the Bay d'Espoir project because circumstances were such that the private

sector could not do so at the time. That reason is gone. We've maintained the

private sector utility, Newfoundland Light and Power, ever since.

Secondly, as is proposed in the Strategic Economic Plan, this

will greatly strengthen the economy of this Province. It will greatly strengthen

the private sector which must be the engine of growth. We can't be strangling

the private sector if we expect that they are to give the leadership in the

development and expansion of our economy.

Thirdly it will greatly reduce the debt for which this

Province is responsible and if hon. members want to know what is a good clear

idea of the magnitude of it, look at Exhibit (5) in the Budget that was tabled

in the House last year; it spells out the public sector debt. In four years

Hydro alone was responsible for increasing that by $250 million. It is now over

$6 billion. It was over $6 billion in total net in March of 1993. It is even

more than that right now. I think it is up to about $6.2 or $6.3 billion, nearly

$6.5 billion. Mr. Speaker, the credit of this Province has a limit beyond which

it cannot be stretched. We have to put our financial house in order and this

will be a giant step towards helping put our financial house in order.

Hydro has outstanding, at this moment, a total of

$1,263,000,000-worth of debt for which this Province has guaranteed the amount.

Now, Mr. Speaker, there is about $230 million of sinking funds on deposit

against that so it leaves a net debt of about $1,030,000,000. Well, Mr. Speaker,

it will do the credit of this Province a great deal of good to have that removed

from our balance sheet and this is one of the primary reasons for taking the

step that we are taking today.

When I listen to all of those people proclaiming about this

valuable asset that has earned us so much money, let me remind hon. members that

it never paid one cent of dividend to this Province in all of its existence,

despite our investment, despite our credit, not one cent of dividend in all of

its existence until 1989 when, for the first time, we charged Hydro the

guarantee fee the same as we charged other commercial-type companies for whom we

were issuing guarantees - nothing to the taxpayers of this Province, our credit

tied up and no benefit. Now, Mr. Speaker, that is bad financial management if

the private sector is prepared to carry on that business.

Fourthly, Mr. Speaker, it will provide a substantial amount

of badly needed money from this sale. It will provide substantial revenue to the

Province; it will provide, Mr. Speaker, a substantial amount of money, not only

to take that $1.2 billion off its books, but the revenue that the Province will

get from this transaction should, Mr. Speaker, enable us not to have to borrow a

single dollar in the coming fiscal year. Not a dollar will we have to borrow in

the coming fiscal year if this goes as we expect it would go. Not only that, Mr.

Speaker, we think it would make a very substantial contribution toward reducing

the amount we would have to borrow in the next fiscal year. Now just think, Mr.

Speaker, what those two things in combination are going to do for this Province.

Just think, Mr. Speaker, how much. I can't even speculate, there are certain

improprieties in - if you say certain things in taking a proposal of this nature

to the market for the sale of public shares, there are certain representations

and so on that people shouldn't be making, certain speculations that they

shouldn't be making. They must let the facts and figures, as presented in the

prospectus, speak for themselves. I have an idea of what I think we should get

out of it but there are two things; I don't want to fall afoul of the Ontario

Securities Commissions and have them say, Well, we are not prepared to list it

because of these statements.' Secondly, I don't want to put in a figure and

cause people to say, `Oh, well, if that's what the Premier thinks, we think it

should only be that much and we get less.' There are certain things that you

shouldn't do. So I'm concerned about acting properly and avoiding that. But I am

prepared to say, Mr. Speaker, that in my judgement, it will enable us to avoid

any borrowing at all this year and, as well, make a substantial contribution

towards the amount we would otherwise have to borrow next year. Now, I think

that is a massive boon to the government and people of this Province at this

particular time in our history - a massive boon to us - quite apart from all the

other good reasons for what we are doing.

Mr. Speaker, the result of that, and here I have used a

figure, I think we could save at least - at the very least, and probably a great

deal more - at the very least, $25 million a year in interest every year

hereafter by this transaction - interest we would otherwise have to pay on

increased public sector debt. Now, if that isn't in the interest of the

taxpayers of this Province, then I don't know what is; and if that's bad, and if

the taxpayers want to blame me for doing that, okay. I will take the

responsibility, and if they want to turf me out of office next time around,

because I have taken this step, then I have no hesitation in doing so.

MS. VERGE: You won't be running again.

PREMIER WELLS: Make no mistake, I will be running again.

SOME HON. MEMBERS: Hear, hear!

PREMIER WELLS: Let me serve fair warning to all in this

Province that I intend to take this party into the next election. Let nobody

have any doubts about it -

SOME HON. MEMBERS: Hear, hear!

PREMIER WELLS: - unless the party turfs me out, and I

don't see any evidence of that.

Now, Mr. Speaker, that's a major benefit for the people of

this Province. Local investors will benefit. They will have a preferred

opportunity to invest. It is proposed that for about a two-week period, local

Newfoundland investors, and I understand, Mr. Speaker, there are a lot of people

who want to invest in this new expression of confidence in the Newfoundland

economy and in the private sector in Newfoundland - there will be an opportunity

for Newfoundlanders to invest.

Major industries will benefit as a result of this

restructuring that we are carrying out, not from privatization itself as such,

but this entire restructuring that we are doing, will result in any increase to

industrial power rates being less over the next five years than it otherwise

would have been. Now, that's a benefit to our industry. We want to do that. We

need to do that, to strengthen our economy, to protect the jobs.

Municipalities will benefit. There will be about, we estimate

roughly, a million dollars in additional - additional - not, as the Opposition

Leader had said, that the 2.5 per cent is going to be cut out; this is

additional tax to those municipalities where there are buildings and properties

of Hydro.

SOME HON. MEMBERS: Hear, hear!

PREMIER WELLS: All of those will benefit. We intend that

it be phased in over a three-year period, but those municipalities will benefit

tremendously, Mr. Speaker.

Mr. Speaker, contrary to the popular misrepresentations,

government will continue to hold and control the water rights of this Province.

A privatized Hydro will be granted the right to use only the water it requires

to produce electrical power, and all rights to water use will revert to the

Province if they cease to be used by Hydro to generate power to meet the needs

of the people of this Province. Nothing has changed.

SOME HON. MEMBERS: Hear, hear!

PREMIER WELLS: The electrical power rates, Mr. Speaker,

will continue to be regulated totally by the Public Utilities Board - no

interference by government or anybody else - totally by the Public Utilities

Board.

Now, Mr. Speaker, conservative assumptions have been made in

making this estimate, and I have asked them not to factor in any fancy things

that they won't be confident will occur, but to make sure that we advise the

people fully before we go forward with this, of what the additional increase

might be due solely to privatization -increase over and above the normal

increase that might be expected to take place. What could be expected to be the

result of privatization, assuming no improvement in running the company at all,

no additional improvement as a result of privatization.

Now, Mr. Speaker, that is a big assumption to make, but I

didn't want anyone to say: Well, what does it cost now? Why are you assuming it

is going to cost different? I think it will cost less, I think they will be able

to run more efficiently. When they come under the full purview of the Public

Utilities Board and they have to run on a matched and co-operative basis with

the other public utility, I think it will result in significantly improved

savings. It could well be that there will be no additional increase at all due

to privatization. That could well be the fact, but for purposes of this

representation to the House I have asked them to assume that there would be no

change.

If there is no improvement at all here is what the situation

will be. For most households it could mean about $1.25 per month additional, and

about $3.000 per month additional for all electric heat beyond what would

otherwise occur in 1995. Now, that is what it would be if there is no

improvement at all. That is what it would cost the people of this Province to

get rid of a billion dollars worth of debt, to be able to avoid borrowing next

year and greatly reduce the borrowing in the year following. To be able to

reduce interest costs in every year hereafter by a very substantial sum. That is

what it would cost.

SOME HON. MEMBERS: Hear, hear!

AN HON. MEMBER: Not as much as the inflation rate.

PREMIER WELLS: Not as much as the inflation rate. The

estimate, Mr. Speaker - I have asked them to try to estimate. Nobody can project

with absolute certainty, but give me fair estimates on the same assumptions over

the next five years of what it might be due solely to privatization. They say,

on average it would be less than 1 per cent per year, considerably less than 1

per cent per year. Now, Mr. Speaker, that is a very small price to pay to avoid

the inevitable tax increases that would be necessary if we didn't do this, and

give our economy a boost at the same time.

There are other benefits, too, those are just the primary

ones. For example, included in this is the elimination of $25 million-worth of

unfunded pension liability. That will be paid for up front out of the cash

proceeds of this - put in place. I'm sorry, that is not quite correct, to say it

will be paid for up front. We eliminate out of the public sector $25 million

immediately. The government would continue to take what should be its fair share

of responsibility for the monies that were not contributed to a fund and

government in the past took into revenue. That government still must take

responsibility for and they would still have it. But it would reduce the

government liability directly by about $25 million.

We would also eliminate another liability, $90 million.

Because when we borrowed in Swiss francs and Japanese yen we got the benefit of

low interest rates by doing so, that is true, but we risked great fluctuations

in exchange rates. The result is, we have added $90 million to the debt simply

in fluctuations in exchange rates. That is all going to be cleaned up in this

effort at privatization of Hydro. There are other benefits that I haven't

specifically mentioned that will result from the privatization of Hydro.

Now, Mr. Speaker, let me deal with the act itself, and deal

more with the method of privatization. The bill that is before the House spells

it out in detail but I would like to provide a fairly simple explanation of it,

and also draw members' attention to the

summary sheet, the outline of the

privatization act. I have asked the Department of Justice officials to elaborate

and explain on the purpose of each individual

section because it is hard to

follow unless you look at a whole lot of documents, since there are words that

are needed to adjust circumstances, rights, situations and obligations. I have

asked them to prepare an explanation and that is tabled, and I won't go into

that in any detail.

The basic approach that is being taken here is to restructure

the company. Old Hydro is being restructured still as a Crown corporation. We

are creating an entirely new company, to which the assets that are necessary for

the operation of Hydro will be transferred, but only those that are necessary -

those that aren't will remain with government. And that's why the clauses in the

bill give the minister the right to approve of everything that is to be

transferred to the new Hydro, because we don't want to transfer anything that is

not absolutely necessary for the -

AN HON. MEMBER: (Inaudible).

PREMIER WELLS: Pardon? What might something be?

AN HON. MEMBER: (Inaudible).

PREMIER WELLS: Oh, there may be a block of land somewhere

that is totally unrelated to the operation of Hydro. They might have had the

right to use transmission lines or titles that are now abandoned. We don't want

to transfer all of that. There are certain things that are no longer in use or

necessary. So we will only transfer those assets that are essential for Hydro to

continue to operate as a utility generating (inaudible).

Now, when that is done, then the government will own all of

the shares of that company, and what we intend to do then, the technical process

then, is for the government to sell those shares into the marketplace. That's

when the money is raised, when the government and its agents that it will

appoint sell those shares in the marketplace. That's when the equity is raised.

Now here's what is going to be done with respect to the debt.

The debt will be dealt with in three blocks. First, a gross amount of $349

million - some of it is the older debt; its gross face value is $349 million,

but the net amount is about $260 million - will be paid immediately. Out of the

proceeds of the sale, $260 million will be provided to pay off that debt

immediately.

Now, I want hon. members to remember that government can't

just decide it is going to pay off all that debt, because people are holding

debentures and they have a right to hold the debentures and a right to get the

interest and plan their affairs and continue to hold them. The debentures are

there, their property, so we can't just simply call in those debentures. There's

no right of recall on them. If we had the means and we were prepared to do it,

we couldn't just pay it all off absolutely as a matter of right on the part of

the government, but we are paying off everything that we can pay off

immediately, which is a net amount of about $260 million, but has a face value

of $349 million because, for the most part, it is the older debt that will be

coming due in this year, or can now be called.

The second block of the debt, Mr. Speaker, is a block that

will be - I am sorry, I reverse that. The numbers that I gave you are the

amounts that Hydro, itself - new Hydro repays approximately $260 million; that's

what the new company repays over a five-year period. I'm sorry, I gave you the

wrong one. That is the one that will remain, and that the new company will pay

off over a five-year period.

The block, some $283 million net, $370 million gross, will be

paid out immediately. Then, Mr. Speaker, the remaining block will be -

`defeased', is the way in which it is described, as I described it in the House

just now, and the process is - and that amount is $485 million net, and $495

million gross. It will be defeased by the end of this year. That will come out

of our obligations by the end of this year.

AN HON. MEMBER: (Inaudible).

PREMIER WELLS: The new Hydro will be buying the

well, I don't know what they will be. They will be buying bonds of one of the

Provincial Governments or the Federal Government. It must governments in Canada.

Any Provincial Government or the Federal Government bonds are acceptable. So

they will be buying an equivalent amount to generate the cash flow necessary to

service that debt over the life of it. So the financial community and the

investment industry generally, says, Newfoundland really has no longer any

obligation - they have put up the equivalent of cash security to pay it. So that

will be defeased, and it will be done by the end of this calendar year, by

December 31. The remaining amount of $260 million net, $349 million, Hydro will

repay over a five-year period. The provincial obligation is effectively, totally

eliminated within five years.

Mr. Speaker, let me talk a little about the impact of

privatization. Hon. members will find three or four sheets of tables, and I

emphasize again two things: these are estimates only and they are estimates that

took into account an assumption that there would be no improvement in

productivity, no improvement in method of operation, that the costs would go on

exactly as they are now. That is the basis. Now, I don't believe that will be

the situation. I think they will be able to work synergies as they go forward

over the next five years, and I am hopeful, Mr. Speaker, that, in effect, we

will be able to wipe out any increase at all over and above, but I have provided

a table that shows generally the estimated amounts that it could be in the

current industry structure and in a privatized hydro structure. You will see

that the differential over, say, the five-year period between what would be the

rates under the current industry structure, and under the privatized structure,

for the end consumers for Newfoundland Power is seven tenths of 1 per cent. That

is assuming that there is not one single dollar worth of improvement in

management cost and operating cost. You will see also that for the industrial

customers it would drop by three-tenths of 1 per cent.

Now, Mr. Speaker, if we have the kinds of improvements that I

think could well materialize, that could drop even more, so it could be even

better for the industrial customer. Those numbers are sometimes difficult to

judge, so I asked them to prepare it on a bar chart and they have done just

that, and that shows exactly what the situation would be on a standard monthly

domestic bill of 700 kilowatt hours. That is the level up to which we subsidize

in the rural areas of the Province, and you can see demonstrated graphically

there just how little impact there is as a results of the great benefits we are

going to derive from this, none of the horrendous increases that the fearmongers

were talking about in recent weeks. It is $1.25 a month at most. If it happens

at all, it would be $1.25 a month in 1995. Look at it for the all-electric

customers, customers who heat their houses with electricity. If it happens at

all, it is a maximum, we estimate, of $3.00 per month in 1995. That is assuming

no improvement at all, no savings as a result of this.

Now, Mr. Speaker, on the next page I asked them also to look

at it on the basis of the differential over a five-year period and they have

done those increases as well, and you can see that stands out graphically, what

the differential is. They show what the increase would have been estimated if

privatization had not taken place and what it will be solely as a result of

privatization. You can see what the differential is, what the increases would be

in both of them. It is also shown in the same table, and in the table on the

next page, what the situation would be for domestic all-electric heat.

Mr. Speaker, when you go back and bear in mind the value that

the people of this Province will derive from privatization, the benefits we will

get from privatization, then, I think that the risk of an increase up to that

amount is a very small risk to take indeed, because if we don't take that risk

we are going to have to find at least $25 million a year, every year hereafter

to pay increased interest rates that we wouldn't otherwise have to pay, and that

is going to take increase in taxes or cuts in other expenditures by government,

and we have cut expenditures pretty severely, we don't have much cutting room

left. This, Mr. Speaker, gives the people, as taxpayers of this Province, a real

break without any significant harm as rate payers because it is the same people;

that's what privatization does and people have attempted to distort it and

misrepresent it for their own reasons and have caused great concern, quite

improperly and quite unfairly.

Mr. Speaker, the government also wants to achieve something

else by privatization. We want to achieve the improvement of our private sector

economy; we want to be able to give the private sector the biggest boost we can

give it. This will make a significant contribution. There are other efforts that

are going forward to improve and expand the private sector but we think that

this will make a major contribution and it is completely consistent with the

other activities of government.

Now, let me say a couple of other words, and I have already

mentioned it briefly. Government and ministers speaking on behalf of government

in relation to this matter, have to be concerned about the representations that

they make, that is why I ask people to make the assumptions on the basis of no

expectation of airy-fairy gains, be realistic and conservative - small c,

conservative - as you can in those estimates, in order to make sure that we are

not making any claims that will not materialize.

Government must also be circumspect in any statements that it

makes about its expectations or its hopes in terms of quantifying amounts

because while we are government, we still must bear in mind that there is a

responsibility to ensure that we act totally properly in relation to the Ontario

Securities Commission that will be regulating much of the sale of these shares.

It is important that we not do anything that causes any difficulty or creates

unfounded expectations or misrepresentations so government has to be fairly

circumspect in statements that it makes and I hope people of the Province will

understand that.

We also want to make sure that we don't say or do anything

that would cause us to receive less than the maximum we could possibly get

because the objective of government is to receive. There are two objectives in

this respect - and I should tell the House what they are - to receive the

maximum amount we possibly can for the taxpayers of this Province as a result of

the privatization. We want to receive the maximum, reasonable return that we

possibly can, but, Mr. Speaker, we also want those who invest in those shares to

have a good experience from supporting the private sector in Newfoundland and

Labrador. We want to make sure that they get good value for their investment,

too, because next year and the next year and the next year, companies from

Newfoundland, whether they are Crown corporations being privatized or other

private sector companies, will be going to the financial markets with proposals

for investments, so we want the investment community to have a good experience

from expressing faith and confidence in the private sector of this Province in

investing in it. We want it to have a reasonable return in the future and a fair

and reasonable rate of growth, consistent with the normal events that are taking

place in the economy of this Province. We don't want there to be any bad

experience solely by reason of it being Newfoundland. We can't say what will

happen to the economy of Canada generally if there are ups and downs in the

stock market because of that. We can't provide hedges against that nor do we

intend to seek to, but we do want, from a purely Newfoundland perspective, to

ensure that those who participate have a good experience from their effort to

invest in this private sector venture in Newfoundland and Labrador.

There is one other thing that I should say. The Leader of the

Opposition was asking yesterday, why not wait? Why not give this a - he moved a

six-month hoist on it yesterday.

AN HON. MEMBER: (Inaudible).

PREMIER WELLS: Well, let me tell the hon. member why -

the minister's comment is probably quite accurate. When you privatize, timing is

all-important, particularly if you're privatizing in the case of a utility

company. Interest rates is a significant factor in the value and marketability

of shares of a public utility company and if you wait two months, one month,

certainly six months, you don't know what you're going to be doing. So you can't

just do that. You have to move at a time when its opportune, when you can get

the best benefit for the people of the Province and we want to do that, too, Mr.

Speaker.

So this motion to delay for six months or even delay for a

month could result in a disastrous impact. I can't say that it would certainly,

I have to confess that. At the same time, Mr. Speaker, I have to confess that if

other circumstances changed in the other direction it might even be better to

delay for a month. It might even be better, but at the very least, if we have

gone forward and are ready, we can market the shares at any time, so we couldn't

lose.

It might be better to go to the market a month or two, or

three months later but we need to be in a position to make that decision and if

we haven't prepared, filed, presented the prospectus and created the shares for

sale, we are not in a position to take advantage of it in a timely way. But

until they do go to the market, it remains a Crown corporation in the sense that

the Crown will own every single one of those shares until we make the decision

that we are going to sell and we offer the shares to the public. Even though

this legislation is passed, if circumstances turn around and it becomes

disadvantageous to sell, we don't have to sell, we continue to keep the shares

and it remains a Crown corporation.

So, Mr. Speaker, we are proceeding in a manner that protects

the interest of the people of this Province both in their capacities as

taxpayers and in their capacities as ratepayers. We think, Mr. Speaker, it is a

responsible way to act.

I want to emphasis again, before I sit down, the primary

motivations for proceeding with privatization now. and why, in moving second

reading of this bill, I ask all members of the House to support the bill,

members on both sides of the House because it's clear, from everything that

we've seen, that it is in the public interest of the people of this Province to

do so. I have emphasised in addressing the issue, Mr. Speaker, the value in

expanding and improving our private sector economy - that is of great value to

us but I won't say more about it. Think of these values: we eliminate

immediately $1.2 billion of the total debt in respect of which this Province has

obligation. We eliminate immediately $1.2 billion of the $5.4 billion. That is a

tremendous achievement. We avoid the necessity of borrowing this year, in a year

that will be difficult for any province to go to the market - we avoid the

necessity of borrowing a dollar this year. I can't think of much else that this

government could do to benefit the people of this Province right now. I can't

think of much else we could do.

SOME HON. MEMBERS: Hear, hear!

PREMIER WELLS: The people of the Province now know the

quality of the judgement applied to this issue.

On top of that, Mr. Speaker, we could greatly reduce the

necessity for borrowing next year. Another great benefit for the people of this

Province. Those two things together could result in more than $25 million a year

future benefit every year hereafter for the people of this Province. Quite apart

from what it does for our credit rating in not increasing our debt and in

reducing our debt, look at what it does directly for the taxpayers. We could

afford to increase our rates a great deal to pay for that kind of total benefit

for the people of this Province. That is not to mention the other benefits that

I've already spelled out.

Mr. Speaker, I say to all hon. members with complete

sincerity and conviction, concern for the present circumstances of the people of

this Province, concern for the future financial stability of the Province,

concern for the future economy of the Province, requires, compels, support of

this legislation.

Thank you very much, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

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

MR. SIMMS: Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SIMMS: We have a smaller number over here. It doesn't

sound as loud but it is still as encouraging.

Mr. Speaker, today is indeed an historic day in this

Legislature. We are debating a piece of legislation that in our view, and in my

own personal view, will be one of the most horrific mistakes ever made in the

Newfoundland Legislature. I think in the end when members hear my arguments they

will feel compelled to support our position before this is all over. I just want

to touch on a few of the Premier's comments at the end before I detail my

arguments on each of the points that he raised.

The last point that he made in concluding his speech, he

talked about his own convictions. I have absolutely no doubt of the Premier's

personal conviction on this particular issue, but I hasten to add it isn't a new

found conviction. It isn't because of the economic circumstances we face today.

This is a conviction that the Premier has held for years, and years and years.

It is his pet project, so let's not forget that.

A number of points that he made in the debate dealing with -

trying to say to the people of the Province that: We are going to pass this

legislation but we may not proceed with the sale of shares. We may not proceed

with privatization. Who is he trying to con? Does he think the people of

Newfoundland and Labrador are that stunned, that green? They've spent hundreds

of thousands of dollars, over the last year in particular. Studies have been

done, a couple of studies that he hasn't provided to the people of the Province

through the House of Assembly. There has been meeting after meeting. Anybody who

believes for a moment that this is not going to proceed is living in another

world. That kind of nonsense is not becoming of the Premier as far as I'm

concerned.

Then he talked about the amendment that I put yesterday on

the other piece of legislation, the six-month hoist argument. He said we

couldn't wait for six months. He explained all the reasons why in his view we

had to move, if we were going to move we would have to move quickly, and all

that sort of thing. In my view that is a very silly defence. Surely everybody

knows any time something is going to be given away it is a good investment. The

investment is a good investment. There is nobody really arguing that. That isn't

the issue here at all. It is a very weak excuse to say we must move quickly if

we decide to move and that's why we can't have public hearings and all that. We

could have had public hearings for the last four months if he wanted to. So

don't anybody ever buy into that argument. Is there any reason why there are

people who are suspicious and cynical about the governments answers to questions

raised on the privatization of Hydro?

This morning, Mr. Speaker, in Question Period, only an hour

or so ago, I asked the government, the Premier, if there were any plans to put

together any advertising brochures, radio ads and all that kind of thing: no,

but he thought it might be a good idea. Well what a terrific idea I have, Mr.

Speaker, here is the brochure right off the bat but you misled the House. You

misled the House by leaving the impression that you weren't up to some kind of

advertising or promotional program.

PREMIER WELLS: We're not.

MR. SIMMS: You are. Mr. Speaker, here is the evidence. Is

the Premier blind? Here is the evidence right here. I was talking about

brochures as well and I said it. You knew darn well what I was talking about but

it is typical, use words, slick responses, walk around the answers, that's what

he does all the time on every issue that is raised in this House, Mr. Speaker,

it's deception. I think at one time he was accused of being a master of

deception by the former Leader of the Opposition. We'll have more, Mr. Speaker,

to say about these kinds of actions on the part of the government - we'll have

more to say, Mr. Speaker, on the approach and the actions of the Premier and the

government on this particular issue.

Now, Mr. Speaker, I want to bring members of the House back

to when the move towards privatization became known to the people of the

Province and how it developed, because its important to remember the background

on this issue. You'll recall back last spring in the House of Assembly there

were questions asked and again there was more deception because the answers that

were given were always: no, no there is nothing to worry about, there is nothing

on the go with respect to Hydro privatization. That was the impression given by

the government every time they answered questions. During the election when the

issue was raised: no, no, no there is nothing to this. There shouldn't be any

fear of this. We were totally deceived. The people of Newfoundland and Labrador

were totally deceived, Mr. Speaker, until on October 1, we heard the statement

by the Premier on behalf of the government that they were pursuing the idea of

privatization, at that time through a proposed merger with Fortis Incorporated.

Now this was certainly a surprising change, Mr. Speaker, in the eyes of the

people of the Province, having been led to believe by the Minister of Mines and

Energy and the Premier, on numerous occasions over the previous several months,

that no there was nothing going on. So it was absolute deception here in this

House last spring and then again during the election campaign, Mr. Speaker.

Let's not forget yesterday when I raised the point about this

being a pet project of the Premier's, let there be no doubt about it, this is

being driven by the Premier of this Province and the Premier of this Province

alone. Ministers over there have no idea of what's been going on, none

whatsoever, and yesterday I raised the point which the Premier admitted to. He

turned a little red when I raised it, I guess he didn't know we'd remember it.

Back in the mid to late 1980s, I think it was sometime around 1986, the Premier,

when he was Chairman of the Board of Newfoundland Light and Power, actually

presented to the previous administration draft plans and ideas that incorporated

most of the ideas, almost word for word contained in that piece of legislation

that we dealt with yesterday, all part of an overall plot and plan to pursue

this crazy idea of eventually privatizing, Mr. Speaker.

So don't forget that kind of background. Mr. Speaker, despite

what is contained in this brochure, which I dare say will eventually be sent to

all the householders in the Province at taxpayers expense, no doubt that is the

plan, but despite what it says there, don't believe for a moment everything that

is in there because I can tell you this, and I can defend it with great gusto

and enthusiasm, this privatization deal will not provide for more jobs in this

Province. This deal will not offer lower electricity rates for the consumers in

this Province. There will be no new investment. There are no new high tech

opportunities associated with the privatization of Hydro. There will be no local

ownership and control, as we have now with Hydro; the taxpayers own it and

control it through their government. There will not be a fair profit on this

sale - not a fair profit. Remember the word `profit'. There will not be a fair

profit at all for the lost water rights, despite the argument the Premier tries

to put forward.

There have been no studies, no evidence made public in this

Legislature, to substantiate the arguments that have been put forth, or to show

what the net benefits will be. So, Mr. Speaker, that alone is enough reason to

oppose this particular plan and this particular scheme.

Now let's also go back to when this debate started to heat up

last November, early in November, a month after the Premier announced the

government's intention and when he said: There will be no public debate on this

matter. There won't be any public comments on this issue until we have a

decision on what we are going to do, and then we will bring it to the House.

That's what he said.

A month later, after we had done some research as a party, a

month later, not immediately jumping on this issue, and all that stuff, as some

have implied, we held a press conference and we articulated our views and our

opposition in this instance. Then the debate started to heat up. You had Cyril

Abery, a highly respected public servant in this Province, a former Chairman of

Hydro; you had Steve Neary, a former leader of that party on that side of the

House, publicly taking a position opposing it, and you had people of other

political parties, the Leader of the NDP Party, the Power of the People, a force

to be reckoned with, I can tell Members of this House, and they can smile and

grin and smirk all they want. They have done an extremely effective job, in my

view, of bringing forth concerns of people of the Province.

SOME HON. MEMBERS: Hear, hear!

MR. SIMMS: And I know they are going to continue that;

but almost immediately, as soon as we started to kick off that opposition in

early November, the Premier started accusing his critics of promoting confusion

among people. He accused all of his critics of promoting confusion among people.

Well, let me ask the Members of this House to take a good, honest look at what

is at the root of the people's confusion, things that the Premier himself has

been arguing, and I ask you to consider these following points:

First of all, the impression has been given by the Premier,

time and time again, and his minister, that this privatization was recommended

by Newfoundland's financial advisors, ScotiaMcLeod and RBC Dominion Securities.

I would be interested in knowing, too, if they are going to be involved in the

sale of shares eventually. That would be an interesting question to have

answered, maybe the minister can answer it. But if you read the Premier's speech

to the Board of Trade, you will see in that speech, clearly, that they did not

recommend privatization on a standalone basis. As a matter of fact, if you read

it thoroughly you will see that it was the least preferred option. They

recommended the status quo. That's what they recommended as the first and most

viable option, but if you want to proceed to privatize, if you must, and if you

insist - and, by golly, he insists, I tell you, the Premier insists - well if

you want to do it and you must do it and you wish to do it, then you go two

ways. You merge, which is the best way, because you eliminate duplication, are

more efficient, and all of that - that was the argument we got two months ago -

but the worst and least preferred option is to do it on a standalone basis,

which is precisely what he is doing here in this House today - the least

preferred option, the least one recommended by the financial advisors of the

Province.

That was why he brought in his five friends. Remember the

five business people who he gathered together, and there were no minutes of the

meeting that he held or anything like that when we asked for a report in the

House, could you give us the transcript of the report of their meeting with the

Premier and what they had to say? We finally dragged out of him, pulled out him,

who said what and how many said what. It ended up I think it was three who said:

Yes, I think privatization as a merger would be the best way to go. Two others

said no. So it wasn't even on the strength of those people, but he wanted

somebody to recommend outright merger, privatization, at that stage, and it was

those five people unfortunately who were left in that position. Because his

financial advisors had said no. He wasn't satisfied with that.

AN HON. MEMBER: That is not true (inaudible).

MR. SIMMS: The Premier will not release - it is true,

because they've already admitted it, as a matter of fact, I say to the minister

- the Premier will not release the two Hydro studies, even though we've asked

for them time and time again in this House, Mr. Speaker. The argument about the

sale being recommended is an absolutely false argument and very misleading.

One of the areas on the second point that I want to make that

the Premier often alluded to in the past but I noticed he didn't mention it very

much during this debate - although I didn't hear everything he had to say

because I had to step out on one or two occasions - but he used to always talk

about the Nova Scotia privatization. What a wonderful thing that has been for

the people of Nova Scotia. They are up there in their glee, they are so happy,

they are excited, they are thrilled - the privatization in Nova Scotia.

What happened in Nova Scotia? First of all, it wasn't quite

the same situation, because both of their entities were already merged and was a

larger operation, as a matter of fact. Second, they do not generate their power,

for the most part at least, by the use of a hydro resource. Ninety per cent of

their power is generated through coal and imported oil. It is not quite the same

at all in any event.

Up there, very interestingly, in that Province the government

at the time it announced privatization said there would be no job losses, which

is precisely what the Premier says here in his brochure. All of the

privatization costs have been developed on the assumption - assumption! - that

the existing workforce will be maintained. That is precisely what they said in

Nova Scotia, and do you know what? Within a year there were 400 jobs eliminated.

Up there the government promised it would improve the credit

rating of the Province. Here in Newfoundland the Premier said to the Board of

Trade words to the effect, without being able to find them exactly, that it

would improve our credit worthiness. Those were his words and I can find them if

I have to. That was the same thing said in Nova Scotia, and do you know what

happened in Nova Scotia? Two of the credit rating agencies in Nova Scotia

downgraded Nova Scotia's credit rating after the privatization occurred.

SOME HON. MEMBERS: Oh, oh!

MR. SIMMS: Downgraded! Two, Mr. Speaker. Moody's and

Dominion Bond Rating Services, both of them downgraded the credit rating of the

province. That is a misleading argument again that the Premier likes to use or

he did like to use. I notice he didn't use it here today at all.

In addition to that in Nova Scotia, the new Liberal

government, within six months of an election, having promised not to raise

taxes, six months later increased the health services tax, replaced the monthly

levy on electricity, and increased gas and diesel taxes. Increased all the

taxes. Broke their election promises. The privatization deal was of no benefit

to the people of Nova Scotia, they had to pay increased taxes.

This idea that the Premier has been using that somehow the

Nova Scotia deal was excellent and therefore we should move here in Newfoundland

and Labrador I hope has had enough holes placed through it that he will never

refer to it again. Let me assure him, I will refer to it because he has used it

in the past.

I just had a note passed to me, Mr. Speaker. I'm disappointed

the Premier is not here at the moment. I talked about the Power of the People

and the effective job they have done in keeping this issue in the forefront of

the public. Do you know what has just come to my attention, Mr. Speaker, I do

not know if you are aware of this yet, but the news media, the press, the

parliamentary press gallery, who are here every day, who hold scrums out in this

scrum area, outside the Legislative front doors, who frequently, have

interviewed people, members of the public representing different organizations

to respond to issues that have been raised and so on -

MR. REID: Not out there.

MR. SIMMS: Yes, out there I say to the Minister of

Municipal and Provincial Affairs, they certainly have on many occasions. Lots of

groups, lots of organizers heads of groups have been interviewed out in that

scrum area, there has never been a problem; but do you know what happened today,

a half-an-hour ago, Mr. Speaker, the representative of the Power of the People,

Bill Vetter, was just kicked out of that area and driven out of that area. Now

that, Mr. Speaker -

DR. KITCHEN: Proper thing.

MR. SIMMS: The Minister of Health says it's the proper

thing, I say it is Gestapo tactics, typical of those used by members opposite,

and you know why they did it, Mr. Speaker - he wasn't allowed to complete his

interview - you know why they did it? Because it was somebody opposing with an

opposition view on Hydro privatization, and that is scandalous, Mr. Speaker,

absolutely scandalous.

Now, Mr. Speaker, I want to touch on some of the other

arguments that the Premier has used and referred to. The debt argument is one

that the Premier used this morning again and has used - Mr. Speaker, the Premier

has used the debt argument and the credit rating which I just talked about a

moment ago, but the reality, Mr. Speaker, is this: The credit rating agencies

who deal with the credit rating of this Province have already said publicly,

quite frequently, that the Hydro debt is fully self-supporting, that the Hydro

debt is in no way a burden on this Province, that the Hydro asset has been and

is a very positive element in the overall credit rating of this Province. One of

the very few positives, Mr. Speaker, while the replacement value, I say to the

Minister of Health, who never makes an intelligent interjection, is valued at

least between $2 billion and $3 billion and only has a debt in the area of $1

billion and that is why the credit rating agencies make those comments and the

beauty of it all, Mr. Speaker, is that we, the people of Newfoundland and

Labrador, own that asset lock, stock and barrel.

I look forward to the Minister of Health participating in

this debate. If he does it would be a miracle because he usually does not open

his mouth except to interject, and I would appreciate Your Honour's protection

from that individual, and if he cannot hold his tongue then perhaps he could go

out in the common room and have a cup of coffee, Mr. Speaker.

MR. SPEAKER: Order, please!

MR. SIMMS: Mr. Speaker, here is what Standard and Poor's

says, one of our agencies that I am talking about. Standard and Poor's says: As

of this time we don't foresee ourselves changing the rating as a result of

divestiture. That is what Standard and Poor's have said, contrary to the

impression the Premier is trying to leave out there. Here is what the Dominion

Bond Rating Service said, one of the other agency and I quote: `We have always

considered Newfoundland Hydro to be self-sustaining, so we have excluded its

debt from our debt calculation. This agency does not even include the debt of

Hydro in calculating the Province's debt so, Mr. Speaker, it is false and

misleading for the Premier to be touting this as a major, major improvement to

our credit rating, because it is nonsense, absolute nonsense, and as I said

earlier, remember Nova Scotia which went through a privatization and had their

credit rating down-graded; and in fact, we made money for the last four or five

years as the Premier pointed out, we make money from Hydro's debt.

They pay us a 1 per cent guarantee fee which equates to $10

million to $12 million a year, I think it is. The question has to be asked,

based on that, based on what the credit rating agencies say, why would the

Province or the government ever want to get rid of such a sound investment? It

doesn't make any sense. Unless there is a personal agenda behind this whole

process, and that is what we have, Mr. Speaker, in fact going on.

Then he talks about giving Newfoundlanders the opportunity to

buy shares in this new company. If ever there was a joke in this debate that is

it. Because I don't know where the 90,000 people on unemployment insurance or

the 80,000 who are on social assistance, or the 25,000 or 30,000 on fisheries

compensation, or the thousands who are living on low income, or the thousands

who are living on fixed income, are ever going to find the money to buy shares

in Newfoundland Hydro. I can just see them all now gathered around the table

after the news is over at 6:30, and they see the Premier's face on television

talking about what a wonderful thing this Hydro is. My God, they will pick up

the phone and they will call all their friends. Come over to the house

immediately, we have to have a meeting. We sit down. How much did we get today?

We got our cheque today for $200, $225. Now let's cut aside a bit for clothing,

let's cut aside a bit for food, we need a bit for this and we need a bit for

that, and oh yes! Don't forget now, be sure and put aside $25 or $30 for Hydro

shares.

How silly, how foolish does the Premier think the people of

Newfoundland are? He must think they are green, too green to burn. It isn't

going to happen. However, there will be investors, but the people who will buy

the shares will be people like the Minister of Justice and the Minister of

Industry, Trade and Technology who can afford them. That is who will be buying

the shares. It will be a good investment. If it was such a good investment they

would be buying the Fortis shares. Anybody can buy Fortis shares in Newfoundland

and Labrador. But 80 to 90 per cent of the shareholders of Fortis live outside

of Newfoundland and Labrador. The same thing is going to happen when this

occurs. Everybody in the investment community will tell you, anybody who is

going to be objective about it.

Newfoundlanders don't have the spare change to buy shares in

this new Hydro. To suggest Newfoundlanders will be offered the opportunity to

buy shares - and they will probably do it on some kind of a basis. I don't know

when they are going to announce this. Probably at their big press conference in

an hour or so. They will do it on some kind of a basis where you will be able to

buy a minimum number of shares, twenty-five, up to a maximum number of 5,000, or

whatever it works out to, and you will be able to buy it by paying 60 per cent

down, or whatever it might be. I see the minister smiling. You will be able to

buy it by paying 60 per cent down, and guess what, you will be able to pay the

rest, the other 40 per cent, over the next twelve months. Something like that.

Or the other way around.

AN HON. MEMBER: Oh, oh!

MR. SIMMS: The other way around. We were getting close.

That is a big deal now, isn't it? For those tens of thousands of people out

there in Newfoundland who no longer can afford to buy food, let alone buy shares

in Hydro. What difference does it make to them if they are going to be able to

do it with 40 per cent down and pay off 60 per cent over a year? It will be

great to those who can afford it like the minister, like myself. Most people in

this Province will not be able to. It is a false argument and it is one that the

Premier likes to try using. I hope people of the Province won't buy into that

silly argument, Mr. Speaker.

Let's talk about rates. The Premier alluded to the rate

increases, and he tried to down play the rate increases, really tried to down

play them. He referred to his little chart that he put out in his brochure and

he talked about the monthly increase being, as a result of privatization, the

difference being from $1.25 on a bill - $62.50, I think it was, I was outside at

the time, and looking at this chart - up to maybe $3 a month if your bill is

$153. So, God, $1.25 up to $3, sure that is hardly worth crowing about, why

would you complain about that?

First of all, why should Newfoundlanders have to pay any

increase in their rates for privatization? That is question number one. Question

number two: How many in this Province are paying in excess of $153 a month for

their electricity rates - a darn good many I would say, but what is most

interesting, Mr. Speaker

AN HON. MEMBER: That is the average.

MR. SIMMS: I realize it is the average, but what is most

interesting is that the Premier didn't make any reference after that to the

other sheets. He didn't mention the next page or two.

AN HON. MEMBER: Yes, he did.

MR. SIMMS: Oh, no, he did not. Well, if he did he brushed

by it awfully quickly, because, Mr. Speaker, what you see on the last page of

the chart is an increase over five years up to 11 per cent as a result of

privatization. Now, that is a sizeable and significant increase in electricity

rates for the consumers of the Province, an 11 per cent increase.

AN HON. MEMBER: That is if there is no efficiency.

MR. SIMMS: Well, I say to the member from Port aux

Basques, who is not even in his seat and he should not be interjecting, that the

government's own argument with respect to the merger was that there wouldn't be

any efficiency for privatization on a stand-alone basis, so there won't be any

efficiencies, using the government's own argument. Don't be so stunned! Here is

what you are going to have, an 11 per cent increase because of privatization;

now, that is on top of -

AN HON. MEMBER: No, no.

MR. SIMMS: Oh, yes, oh, yes, we will see, because in your

own words these are only guesstimates, you don't know what it is going to be.

But I tell you one thing, they are going to be sizable increases and are going

to be big enough that the people of this Province are going to be affected by it

negatively, whether you want to admit it or not, and it is another one of those

arguments. They play it down, but they don't know, in reality.

AN HON. MEMBER: (Inaudible).

MR. SIMMS: Yes, because you have admitted it, there is

going to be a rate increase as a result of privatization. Why should there be?

Why should Newfoundlanders have to pay more in their electricity rates?

MR. DUMARESQUE: Why should they have lay-offs?

MR. SIMMS: Why should they I am asking you? Because you

are not doing a good job, that is why.

AN HON. MEMBER: You don't have a clue.

MR. SIMMS: Well, that is a great defence: `You don't have

a clue!'

Excellent - a wonderful defence!

Mr. Speaker, the members opposite might not like what I am

saying but what I am saying is what the views of the people of Newfoundland are,

I can tell him, Mr. Speaker. And the more he interjects, the more he trys to cut

me down, the more I like it. He can keep it up, if he wants to, it doesn't

bother me one bit, but it doesn't do anything to help the people of Newfoundland

and Labrador who are going to be forced to pay higher electricity rates, and it

doesn't do anything in their eyes for the asset they now own. You want them to

go out and buy shares. Well, why would you go out and buy shares in something

you already own? The people of Newfoundland already own it. That sounds like a

real gem to try to put over on the people of this Province. They own Hydro. The

people of the Province own Hydro, Mr. Speaker.

AN HON. MEMBER: Don't be so foolish!

MR. SIMMS: Don't be so foolish, yourself! Who owns Hydro?

I ask the minister. Who owns Hydro?

AN HON. MEMBER: I will speak in the debate.

MR. SIMMS: Oh, yes, you will speak in the debate, but you

don't mind interjecting now when you have some silly comments to make across the

floor. The reality, Mr. Speaker, is that the people of Newfoundland and Labrador

own Hydro. I suppose now they will get up and try to argue that the people in

Newfoundland don't own Hydro. I wouldn't be surprised to hear that kind of

argument coming forth from that side, that the people of Newfoundland don't own

Hydro. That is what the Minister of Employment and Labour Relations is trying to

suggest. Make no wonder we have such a high unemployment rate, Mr. Speaker.

Anyway, Mr. Speaker, that is the argument on the ownership of

Hydro, the sales shares, and all those issues which are valid arguments in our

view and supported by the majority of people in this Province, I can tell

members opposite as well.

AN HON. MEMBER: They will change.

MR. SIMMS: Oh, they will change, we will see. Then they

will play down again the water rights issue. `Oh, we are not giving away any

water rights.' Don't be so silly! The only water rights that will be given away

are those water rights that will be used to generate power.

AN HON. MEMBER: (Inaudible).

MR. SIMMS: Well, what difference does that make? You are

giving away the water rights in this deal to private industry, private

companies, the water rights owned again by the people of Newfoundland and

Labrador, and you are getting nothing for it because there won't be a profit for

the sale of the lands and the waters. And it is extended to Labrador, not just

on the Island, in the Province, Newfoundland and Labrador. Now, I say to members

opposite, look through that legislation and ask somebody you might know in the

law profession to give you some advice because it is trickery - more trickery.

It is slick the way it is put together. I'm going to tell you, Mr. Speaker,

there is potential for things much bigger than we are talking about right now.

We will get to that in future days through Question Periods and so on.

So, Mr. Speaker, the water rights argument is also a false

and misleading argument. I suppose, when you have no defence you have to try to

make them up, and that is what the government seems to be doing. Jobs. They give

us the impression - if you read the brochure, as I mentioned earlier,

`Privatization costs have been developed on the assumption that the work force

at Hydro will be maintained. That is precisely what was said in Nova Scotia, and

within a year there were 400 jobs eliminated as a result of privatization in

Nova Scotia.

Don't lay that kind of guff on us. Even last fall when we

were talking about merger, Hydro itself said there were going to be 150 jobs in

their estimation, and they said that was a figure arrived at without

consultation with Newfoundland Power. When we asked how many more jobs would be

included in Light and Power as a result of the merger, we didn't know that

number. There are going to be job losses. When a new owner gets in there, a new

company takes over that operation, everybody knows what is coming.

So, I say to workers at Hydro, don't be too comfortable,

don't relax, don't let your guard down and think everything is going to be

hunky-dory. Because I assure you, the potential is there for job losses. In a

province that has now, even at the minister's word - the Minister of Employment

and Labour Relations - an unemployment rate that is in the area of 40-odd per

cent, he said in an interview to The Evening Telegram , we can ill-afford

more job losses.

Then, of course, I want to get back to the Premier's famous

argument, and the best way he could defend this deal last fall, when all the

critics were opposing his position. He said that Cyril Abery wasn't credible, a

major tactical error, if not the worst thing he could have said anyway, because

that individual, anybody who knows him would know that he is a fine individual.

He accused me of being irresponsible. Well, that's fine, I don't mind that, I

expect to hear that from the Premier. There are a lot of things I could accuse

the Premier of and I try to bite my tongue all the time but I can't always do

that. But if I'm irresponsible, well, I won't say what the Premier is.

He said other MHAs have a concrete mind-set. Anyone who

opposes him, they are irresponsible, they don't know what they are talking

about, they have a concrete mind-set, they are not credible. Everybody in the

world who opposed him on this issue, which includes everybody in the Province

except for those who sit around the Cabinet table who won't open their mouths,

that's for sure. Because number one, they probably know very little about it.

Don't forget, this is a plan that the Premier has had since 1986. For sure,

those in the back benches, some of whom I know, have a lot of concerns about

this, but are in the precarious position, I suppose, of sitting on the

government side and feel they have to be loyal to the government. But I know

some of them feel very concerned about the issue.

You won't see them standing up either, out of loyalty, I

suppose, number one. But number two, as long as there is a vacancy in that

Cabinet over there they will always be careful about what they say publicly.

That is why he hasn't filled the position vacated by the former Minister of

Tourism, I dare say. When he gets through privatization and all the other stuff,

when he gets through with all of that process, I dare say - I hope somebody over

there might have the guts, might have the intestinal fortitude, might have the

gumption, to stand up and tell the people of Newfoundland and Labrador what you

really believe about this issue.

I know members over there are getting pressure from

constituents. The Member for Terra Nova would like to say it now but - that is

because she is getting heat in the last few days. She wants to get her position

out right quick so they will stop calling her, I suppose, or something along

those lines. She will have a chance to participate in the debate. After all, her

friend behind her will have a chance in the limelight on Wednesday and I know

she has to quickly get up and speak to get some coverage.

Mr. Speaker, the kinds of comments that the Premier were

making, those comments were irresponsible on his part, to tear apart everybody

who had an opposing view to him on this issue, including some of the most

credible people in the Province, in my view.

Don't forget, as I said earlier, the arguments and the

opposition cross party lines. Steve Neary, who is a former Leader of the Liberal

Party -

AN HON. MEMBER: (Inaudible).

MR. SIMMS: Well, I would say he knows as much as 75 per

cent of the members on that side of the House about it, Mr. Speaker. As a matter

of fact, he was a Member of the House, he told me, back in the 1960s when the

Premier was there, when the Premier was a Member of the House in those days,

when the infamous Upper Churchill deal was on the go, and at that time he argued

with Mr. Smallwood that the government should take over Newfoundland Power. That

was what Steve was proposing and, by the way, there are a lot of people who

think that might be a very interesting option to consider. It would be

expensive, and you would have to look at all of that, but - as a matter of fact,

I think Prince Edward Island -

AN HON. MEMBER: (Inaudible).

MR. SIMMS: I dare say there was a discussion in Cabinet

about it; I have no doubt. Prince Edward Island, in fact, I think just a couple

of days ago, nationalized their power industry and are now -

AN HON. MEMBER: (Inaudible).

MR. SIMMS: Yes they did. They nationalized it -

AN HON. MEMBER: (Inaudible).

MR. SIMMS: No, but they're going to nationalize their own

power industry, and then they're going to merge with New Brunswick.

AN HON. MEMBER: (Inaudible).

MR. SIMMS: Well, saying they're going to consider it is

something like the Premier of this Province is saying: Just because we pass this

legislation, and force it through and everything, we may not sell the shares. We

might not proceed with the sale of shares.

AN HON. MEMBER: (Inaudible).

MR. SIMMS: They will never do it, so you will never do

it? Huh! We will see, Mr. Speaker.

It's too bad the Premier took that approach. I think it cost

him dearly in this debate by attacking private individuals like the Power of the

People, like Steve Neary, the former Leader of the Liberal Party, this

particular party, who has been a vocal opponent on this particular issue, other

Liberals - many, many Liberals around this Province. Members opposite must know,

because they're calling us. Surely they've called their own members. I hope they

have.

AN HON. MEMBER: Who?

MR. SIMMS: Well, the member would be surprised who.

AN HON. MEMBER: Name them.

MR. SIMMS: No, because they're not in public life, they

are private individuals, and I can tell you, they oppose

AN HON. MEMBER: (Inaudible).

MR. SIMMS: Mr. Speaker, could I have the protection of

the Chair, please?

AN HON. MEMBER: (Inaudible).

MR. SIMMS: I try to be kind and nice to the individual

concerned.

So, Mr. Speaker, I just want to make those few arguments at

this point in the debate. I want to make those few opening points in the debate,

Mr. Speaker, because we will have a lot of opportunities yet. This debate is

going to go on, unless the government start to try to wear us down, start to

force night sittings - and I mean all night sittings. When they start forcing us

into that mode over the next few days and coming weeks, we will be here and we

will stick by our guns, and we will fight to the bitter end on this particular

issue and defend our position and our opposition.

Mr. Speaker, I want to say, just to conclude, on the issue of

public hearings, we have a Premier, I guess it wasn't too long ago, three or

four years ago, a politician in this Province, the Premier, himself, in

particular, who once believed that deals of this magnitude were too great and

far too important to be worked out by a few men in a back room - 1990, June:

Meech. That was his position then, and the people of Canada flocked to that

position. Oh, what a great man this person was when it came to the Constitution;

but when it comes to something significant for the people of this Province, his

own Province, here in Newfoundland, I ask him about public hearings, input,

consultation, no - flat no - even though this government has seen fit, and

rightly so, to hold public hearings and have committees of the House study

issues like the smoking legislation, which is important; even though they are

having a public meeting now, and a committee of the House having public hearings

around the Province on the issue of public accounting, which is important; even

though they've sent a commission around this Province not once, but now twice,

to look at the boundaries of the various electoral ridings that we represent,

which is important and which will probably cost the taxpayers of this Province

$250,000,000.

Yet, on an issue as significant to the future of the people

of this Province, on an issue that will affect future generations of

Newfoundlanders and Labradorians, he says a flat no. Now, Mr. Speaker, there has

to be a reason. There must be some reason for being so dogmatic in his approach

on this issue, not only this issue, of course he's dogmatic in his approach on

most issues that he deals with but that's an aside. So, Mr. Speaker, it's too

bad that they are taking that approach. Because I think they owe it to the

people of the Province to have public hearings around this Province and to

explain their position. There is no rush. I was told yesterday when I asked the

questions on the other piece of legislation to the Minister of Mines and Energy

and to the Minister of Finance, there is no rush, there is no deadline - that's

what I was told, no deadline. The Premier said today, `We won't be proceeding

with a prospectus until the legislation is passed.' And we can't, the Minister

of Finance says.

So, if you put the two together, the answers that the

Minister of Finance gave me yesterday and the Minister of Mines and Energy in

saying there was no deadline, we're not trying to force this or rush it through

by March 31, then you have to assume that there isn't a reason not to have

public hearings. Why couldn't you have public hearings over the next three or

four weeks? Because the debate will go on for that length of time unless you

bring in closure or something of that nature? Of course, I know this government

would never ever bring in closure.

I told the Minister of Forestry and Agriculture this: when

the Member for Gander was the Government House Leader he rarely did it only

about fifteen or twenty times in a year, but under the new Government House

Leader -

AN HON. MEMBER: (Inaudible).

MR. SIMMS: Oh, I'm sure the Government House Leader has

thought about that just as they thought quickly after I asked about the

brochures and everything this morning in Question Period, you said there were

none. You brought them down within the hour; by god, I tell you, that's action,

Mr. Speaker!

Mr. Speaker, again, in the House on Throne Speech Day, just

Monday of this week, the Premier talked about how he had consultations and

discussions with the Federal Government about the need to sit down, work things

out, to consult on the fishing restructuring issue, because no government should

go out to the people and say: This is it, this is the way it is going to be

done, it's wrong. Well, how come it isn't wrong on this issue? This is an issue

that impacts on the people of this Province very significantly, now and into the

future, so there's something going on. The wheels are turning in our minds, for

sure, and in the minds of the people of the Province. We can't understand why

he's so open to public meetings on smoking, public accounting and the electoral

boundaries but not on this significant issue. I suspect the reason is, he

figures he would be creamed, burned. I suspect that's the real reason why the

government is not prepared to hold public hearings. They don't want to go around

the Province and try to have to defend this because, Mr. Speaker, it is not

defensible, and that's the bottom line.

Mr. Speaker, to conclude, here's what the Premier said in

answer to my question on March 1, just three days ago, when I asked for public

hearings. He said, and I quote, "The government proposes to bring the proposal

to the House of Assembly for full disclosure of all of the details and for full

debate on all of the aspects of it and when that is done I am confident that

Members of the House of Assembly who look at it fairly and objectively will come

unreservedly to the conclusion that there are compelling reasons to proceed with

privatization." In other words, Mr. Speaker, the decision has already been made.

Who is he trying to fool? The decision has already been made, Mr. Speaker. They

aren't interested in the public's view, they don't care what people's concerns

are about this. And certainly, the Premier doesn't care about it. Members

opposite, I would say, in Cabinet, if they had their way, would have been

advising the Premier to take a little different tactic, a little different

approach, but I doubt if anybody over there would dare open their mouth.

MR. FLIGHT: (Inaudible).

MR. SIMMS: I can see the Minister of Forestry and

Agriculture, the Member for Windsor - Buchans walking up to the Premier and

saying: Now, Mr. Premier, I am going to tell you that you are doing this wrong.

This is a totally wrong approach. Our members are getting calls from Liberals

and people all over the Province.

AN HON. MEMBER: Did you say that to Mr. Peckford?

MR. SIMMS: Yes, I said it to Mr. Peckford. I can see the

Minister of Forestry and Agriculture walking up now, the man with the backbone,

what a man. I can see him now walking into the office on the eight floor.

SOME HON. MEMBERS: Oh, oh!

MR. SIMMS: Is there any chance of quietening the House

down, Mr. Speaker?

MR. SPEAKER: Order, please!

MR. SIMMS: Thank you, Mr. Speaker.

I think we showed a little more courtesy to the Premier when

he was speaking. He was able to get through his remarks without the kind of fuss

and racket we are hearing from that side now.

As I said I can see the Minister of Forestry and Agriculture

walking up to the Premier on the eight floor, walking into his office and

saying: I am here to tell you, Clyde, that you are wrong. I can just see it now.

Mr. Speaker, I doubt if anyone over there would even dare say

that to the Premier. I am sure the Minister of Mines and Energy did not say it

to him. I am absolutely positive. I am not sure if the Minister of Mines and

Energy ever gets into his office. If you listen to the public statements that

the Minister of Mines and Energy has made from time to time they have certainly

been flip-flops, I think, to put it mildly. He does not seem to know what is

going on. One day there is nothing going on and the next day there is something

going on, so on, so on, and so on.

I have a lot of sympathy for the Minister of Mines and

Energy. I like the fellow. I like the individual, the Minister of Mines and

Energy. He is a fine individual, a nice man, a wonderful person, but I really

sympathize with him, because you know where he gets his briefing on the

privatization issue? From the media, out in the scrums with the media. That is

where he gets his briefing because until they ask him a question he does not

know what is going on, and that is regrettable. I am sure he is not a staunch

advocate of this privatization. I am sure it is being shoved down his throat

just as it is being shoved down the throats of the other people of Newfoundland

and Labrador.

Mr. Speaker, I want to conclude with those few preliminary

remarks. I have a lot more remarks here but I will save them for another day. I

still have six or seven minutes left. I suppose there is some suggestion I could

move another amendment, a reasoned amendment. There are lots of reasons to be

opposed to this. An amendment to refer it to committee, or another six month

hoist like I did on the other piece of legislation yesterday. Mr. Speaker, I

think we are going to sit back and wait for a moment or two, a couple of days,

to see if the government comes to its senses. We will see if the government

comes to its senses because we can move the six month hoist at any stage, and

what that means, for the benefit of those who might be interested, is that it

would give the members on this side of the House, in particular, because those

members over there will not even speak to it, I do not suppose, they might get

up and have a few words to say, but it would give those on this side of the

House, the Opposition, a chance to speak again for a second time, and when that

amendment is dealt with we can move another amendment to give us a chance to

speak again a third time.

I suspect when we reach that stage, I suspect, the government

will get miffed, they will be testy, and they will bring in closure or something

along those lines. That is the way the old chief over there, old Brezhnev from

Russia used to do it when he was House Leader. That is the way he used to handle

it, Mr. Speaker, so I would not be at all surprised if that occurs.

Mr. Speaker, one final thing in conclusion that I would say

to the people of the Province, if the media reports this particular comment, I

would say to them, if they feel as strongly as I believe they feel in their

opposition to the pursuance of a matter that I think is in the worst interest of

the people of the Province, if they feel as strongly as all of us do, and all

the other people out there tell us they feel, then I urge them, I plead with

them, to not only flood the offices of members opposite but to flood the phones

of Open Line programs because all over this Province people do listen to them,

to write letters to the editor, to get involved with the Power of the People

group, to do whatever you can; it is only a matter of lifting up the telephone,

you can call us if you like but you don't need to call us because we are on your

side, it's the people on that side of the House who are not on the side of the

people of Newfoundland and Labrador, Mr. Speaker.

Thank you ve