- • ---~ -=- ~--..... ·-----"'-'-~·- - -· ~· VOL. 3 PRELL'1INARY UNEDITED TRANSCRIPT HOUSE OF ASSEMBLY FOR THE PERIOD: 3:00p.m. -6:00p.m. TUESDAY, MAY ~2, 1981 NO. 38

May 12, 1981 The House met at 3:00 P.M. Mr. Speaker in the Chair. MR. SPEAKER (Simms): Tape No. 1457 Order, please! With respect to the point of privilege raised on Friday past, May Bth.,by the hon. DW - 1 the member for LaPoile (Mr. Neary) on which I reserved my ruling,I wish to point out at the outset,as hon. members are aware.that the Chair's role in these matters is to determine whether or not enough evidence has been presented to establish a prima facie,not whether in fact there is a point of privilege.

May I say at the outset that the question of security for the House of Assembly is a matter of some degree of confidentiality and as it relates to the House it comes under the jurisdiction of the Speaker's Office. I am also advised that the current situation is no different than one which occurred in 197l,as I understand it. I want to rule, first of all, that in this matter there is no prima facie case. But may I add a further brief comment and say that, first of all, I am fully aware of the situation as it exists and I understand as well that the hon. the Leader of the Opposition (Mr.

Stirling) has also been briefed. Also I might add the security personnel will not be on the floor of the House. I believe that this matter should be treated with the confidentiality that it warrants, but I repeat,as the question of security for the House comes under the jurisdiction of the Speaker, I wish to assure all hon. members,as I do in all matters respecting the privileges of members, that I will act in this matter on behalf of and in the best interest of all hon. members of this Legislature. 4066

I . May 12, 1981 Tape No. 1457 DW - 2 MR. L. S.TIRLING: Mr. Speaker. MR. SPEAKER (Simms): The hon. the Leader of the Opposition. MR. L. STIRLING: Just by way of clarification because you did mention ~n your comments that I have been briefed: I do confirm that I have now been briefed as of yesterday afternoon and my caucus has been and we accept the spirit in which you have made your com­ ments. It is unfortunate it did not happen earlier but we understand the circumstances. STATEMENTS BY MINISTERS MR. SPEAKER: The hon. Minister of Mines and Energy. MR. L. BARRY: Mr.

Speaker, I have great pleasure in making a statement this afternoon which has some significance for the future energy needs of our Province. I would like to take a few moments to give an overview,first of all,with respect to this energy position that our Province finds ourselves in today. Mr. Speaker, I would like _ __.___ - - to present to the Ho~ of Assembly this ~~i~, particularlY as it relates to meeting the electrical needs on the Island at this critical point in time.

I want to put into perspective the actions which are necessary to minimize our depen- dence on foreign imported . cnlde and to meet our growing electrical needs while we are faced with the uncertain- ties surrounding the achievement of a Labrador electri- cal interconnection. The electrical generation facilities now in place and under contruct ion 4067

May 11, 1981 Tape No. 1458 NM - 1 MR. BARRY: can supply the Island's anticipated needs until 1984. However, the most recent electrical energy load forecast indicates that a new source of .energy will be required to prevent energy shortages which ~re projected to occur starting in 1985.

The three alternatives which have been considered are: Cll naturally, an electrical inter- connection with Labrador to access energy from the Churchill River either from the existing Churchill Falls plant or the potential at Gull Island and Muskrat Falls; (2} an expansion of the Holyrood thermal plant by the addition of a fourth 150 MW oil-fired generating unit; and (3) a new 120 MW hydro- electric generating plant at Cat Arm on the Great Northern Peninsula.

The differening capital costs associated with these alternatives and the varying operating costs once they are in service make up a complex decision-making package involving short and long-term energy alternatives. It involves billions of dollars in construction costs over the long term, hundreds of millions of dollars in lost economic rent and thousands of construction jobs along with short-term construction temptations versus long-term energy planning decisions. With respect to our electrical energy priorities, Mr.

Speaker, it is no secret that the electrical energy priority, the first priority for this government, is to achieve a fair and equitable utilization of our Churchill Falls resource. The best long-term solution to meeting the Island's electrical needs is through an electrical interconnection with the 5225 MW Churchill Falls plant. Initially we would build a $1.5 billion transmission line with the capability of bringing 800 MW of capacity and 5.6 billion kilowatthours of energy from the Churchill plant to the Island annual~y.

Now such a transmission project, if started today, would allow us to dis- place all of the oil burnt at the Holyrood plant by 1986 and 4068 ' .....

. -.. ....... , ' ... ~--:_,... - May 12, 1.9.81 Tape No. 1458 NM - 2 MR. BARRY: and in addition, allow us to meet our load growth for several more years into the early 1990's. The total load on the Island by 1986 is projected to be 8 billion kilowatthours of which almost 3 billion kilowatthours will come from the Holyrood plant. So you are getting into the situation where 3/8, not quite 50 per cent,.but 3/8 of our energy will be supplied by burning oil at Holyrood by 1986.

Since 1976 we have been attempting, through Court action and through discussions with Quebec, to obtain access to this initial amount of Churchill energy. The discussions-with Quebec have so far been unsuccessful. In addition, the Court case has been prolonged, in many cases by Quebec's use of delaying tactics. And as a result, we introduced the Water Rights Reversion Act into the House of Assembly last Fall and are proceeding with this legal action with the understanding that it might take two years to bring about the ultimate long-term resolution to our energy supply difficulties.

Simultaneous with our actions on the Upper Churchill, we have proceeded with the Government of Canada to fund the programme carried out 4069 ~.

May 12, 1981 Tape 1459 MR. BARRY: L_ by -the Lower Churchill Development Corporation with respect to putting forth recommendations regarding the Gull Island and Muskrat Falls power sites on the Lower Churchill River. EC - 1 LCDC concluded that Gull Island was preferred to Muskrat Falls for development but that markets West were absolutely critical to the feasibility of proceeding with the Gull Island project.

LCDC pointed out that Gull Island could only proceed in a prudent manner if the energy surplus to Newfoundland's needs could be sold to or through Quebec, possibly in combination with energy intensive industries establishing in Labrador or on the Island. Now, with respect to Gull Island and the need for a power corridor or wheeling through Quebec, Mr. Speaker, with regard to sales to Quebec, we have not been encouraged that arrangements can be made, especially given our lack of progress in renegotiations on the Upper Churchill situation.

However, with,respect to sales West,apart from directly to Quebec,and industrial sales, we have been considerably encouraged. Our discussions with the Power Authority of the State of New York reached a level of agreement resulting in the signing of a Letter of Intent. In addition, we have held fruitful discussions with the State of New Hampshire and have received additional positive indications from many of the States in the Northeastern u.s. who require Canadian hydro power to reduce their dependence on foreign imported oil.

We have also had very encouraging discussions with a nUmber of aluminum companies respecting the location of an aluminum smelter in the Province. These companies have been examining the feasibility of constructing a smelter which would require between 360 and 540 megawatts either in Labrador or on the Island. The feasibility of 4070 ..

. . May 12, 1981 Tape 1459 EC - 2 MR. BARRY: Gull Island would be considerably enhanced if some of the surplus energy could be sold to energy intensive industries and to date we have received every indication that there is high interest from the aluminum industry in locating in this Province. In other words, we have reached the very definite conclusion that Gull Island can and should be developed and there are markets, particularly in the Northeastern u.s. and with energy intensive customers, which can properly utilize its output on a short, medium and long-term basis.

The difficulty in reaching these markets, Mr. Speaker, is that we need a power corridor through the Province of Quebec. This power corridor could take the for.m of a utilization of the existing Quebec system, that is, the wheeling route, or a separate dedicated transmission line built over a land corridor through Quebec. We have been dealing with the Government of Canada for the last two years, seeking their needed co-operation in establishing such a corridor or wheeling rights over the existing Quebec system.

In fact, we thought we had reached a clear understanding with the Prime Minister and the federal Minister of Energy, Mines and Resources CMr. Lalonde), that Newfoundland had the constitutional right to transmit electrical energy across provincial borders just as provinces like Alberta have their constitutional rights fir.mly in place to transmit oil and gas acros .s other provincial territory.

We have made our case to the Government of Canada and to the National Energy Board and I,personally,have held several meetings with the federal Minister of Energy regarding our 'case and quite frankly, thought we were making a good deal of progress. However, recent correspondence from Mr. Lalonde has unfortunately confirmed that Canada is not willing to exercise its constitutional authority to remove the barriers to 4071

~ ............ ·.-: -.· ~ ..... l')lay 12, 1981 Tape No. 1460 SD - 1 MR. L. BARRY: interprovincial transmission of electricity at least at this time. In essence,the Government of Canada is saying, and the Prime Minister is saying 1 that they realize Newfoundland should be premitted to transmit electricity across provincial borders and further realize it is within their powe'r to introduce the necessary legislation to implement these constitutional rights and a!llow Newfoundland to deal in a practical sense with power transmission through Quebec.

However, the Government of Canada is still not prepared to act, even though without such a legal solution we are unable to sit down and talk meaningfully with Quebec with respect to a corridor or wheeling rights, as Quebec has always insisted upon being the purchaser o.:fl our I electricity at their price. SOME HON. MEMBERS: Oh,;:_: oh. MR. SPEAKER (Simms): O:r:~er, please! MR. BARRY: Irt

summary, Mr. Speaker, we believe there are external markets :Eo~ the surplus Gull Island power which combined with prospeet~~e industrial sales in Labrador and the oil displacement needs on the Island, could make Gull Island a viable project. SOME RON. MEMBERS: Hear, hear. MR. BARRY: However, we have reached the conclusion that our fight for constitutional equality in the transmission of electricity will continue beyond the time when we must make a decision on our next generation source.

In the meantime, we must face the reality that the $4.3 billion Gull Island project is too large a project for us to get underway until our ability to sell this surplus power is resolved, even th.ough, r hate to s·ay, Mr, Speaker, the markets are there - SOME HON, MEMBERS : on_, oh .• MR. SPEAKER: Orde:~;, please! MR. BARRY: - for the sale of this surplus power. 4072

May 12, 1981 MR. BARRY: this alternative. MR. FLIGHT: MR. BARRY: Tape No. 1460 SD - 2 Now Muskrat Falls, let us look at Mr. Speaker, Muskrat .. Falls was recommended - That is a political statement. - it is not a political statement, it is a very factual statement - was recommended by LCDC - SOME HON. MEMBERS : Oh, oh. MR. SPEAKER (Simms): Order, please! MR. BARRY: - as the project which should be proceeded with in view of the difficulties of marketing Gull Island power West. However, there is general agreement, Mr.

Speaker, that Muskrat Falls is a less desirable development than the larger Gull Island project, We have not eliminated Muskrat F~lls as an option but its energy output is expensive and far less attractive than energy from either Churchill Falls or Gull Island. In addition, the economics of the Muskrat Falls project do not stand alone but depend upon blending the output from the 600 megawatt plant with the amount of recall presently available to Newfoundland under the power contract with Hydro-Quebec.

The available 200 megawatts of recall at three mills per kilowatthour would bring the average cost of Muskrat down to an acceptable level,and the combination of Muskrat and recall is still more economical for the Island of Newfoundland than proceeding with further oil-fired generation. The points not to be missed with respect to the Muskrat, however, Mr.

Speaker, are that: first, its energy costs are 30 per cent higher than the preferred Gull I:sland project; secondly, it only meets the :r:·sland'·s energy demands up to about 199.0; third, · its construction at this time ·would probably delay the better Gull Island project for another decade.,.and this is a very important point, Mr. Speaker; and fourth, it provides no capability for industrial expansion in Labrador or indeed on. the. I.sland. 4073

May 12, 1981 Tape 1461 PK - 1 MR. NEARY: _ ____ __ P.oli tics.- MR. BARRY: Therefore, we have decided,and I believe the Government of Canada would agree, that to proceed with the $3.2 billion Muskrat Falls project at the present time would be extremely short-sighted. Proceeding with Muskrat might be reminiscent of decisions made for the short-term construction impact and the short-term political gain associated with other large scale hydro projects in Labrador . presently constructed. SOME HON. MEMBERS: Oh, oh! MR. SPEAKER (Mr. Simms): Order! MR. BARRY: Now, Mr.

Speaker, our decis~on, our long-term energy policy decision ~ we have tried to make a far-sighted decision based on the long-term benefits to the people of this Province. Our top priority is to access Upper Churchill power. Our other priority is to develop Gull Island once our const~tutional right for the transmission of electricity across provincial borders has been implemented by the federal government. Our . objective is also to stablize in the long-term the electrical rates to all consumers in the Provinte and to make electrical energy available for industrial expansion in Labrador and on the Island.

Sa a new generation source, Mr. Speaker, is required now. In v iew of the uncertainties associated with our Labrador power situation, we need a new source on the Island to meet the projected energy deficits for 1985 and 198~! and possibly a bit of 1987. But we' ar~ basically talking about only two years, Mr. Speaker, in this present state. It would not be prudent to assume at this time that the deficits in those two years,l985 to 1987 1 could be met by a Labrador transmission line, the construction of which- 4074

May 12, 1981 Tape 1461 PK - 2 MR. BARRY: will take in excess of four years from the time our legal case on the Upper Churchill is won or our right to transmit electricity across Quebec is established. And delaying a decision results in a - . MR. FLIGHT: You should be ashamed of yourself . MR. SPEAKER (Mr. Simms): Order, please! MR. BARRY: - further escalation of capital costs on the alternative energy sources and runs the unacceptable and substantial risk of unnecessary energy deficits starting in 1985.

The time for a decision has arrived and government has authorized Newfoundland and Labrador Hydro to proceed with the Cat Arm hydro-electric development on the Great Northern Peninsula. SOME HON. MEMBERS: Hear, hear! MR. BARRY: This project, Mr. Speaker, a great project,will have a rated capacity of 127 megawatts and is expected to produce almost 700 million kilowatthours annually. Its estimated capital cost is $287 million, Mr. Speaker, and the development will displace 1.1 million barrels of oil annually when it is in operation. SOME HON. MEMBERS: Hear, hear! MR. BARRY: Now both of those facts, Mr.

Speaker, should be considered, not just the fact that we have close to a $300 million project where we' will see an economic boost to this Province , but it is not just a make-work project, it is a project which will see 1.1 million barrels of oil displaced. And you can multiply, Mr. Speaker, by .... 4075

May 12, 1981 Tape No. 1462 EL - 1 MR. BARRY: your best estimates of what the cost to the Province will be to. the electrical consumer by 1986 of 1.1 million barrels of oil, Mr. Speaker, and I can tell you it is not going to be any less than the $26 million virtually that it is today. And tha·t is $26 million a year, Mr.Speaker. The economics of the Cat Arm , versus building a fourth oil­ fired unit at Holyrood are extremely attractive. In fact, it will pay for itself in oil displayed. '•1r. Speaker, in less than five years.

And with the cost of electricity rising rapidly, due to the increasing use of oil at Holyrood, the decision be- tween these two alternatives was relatively simple.

But the difficulty in agreeing with the Cat Arm project and the painstaking progress we have been through before finally granting authority, related to our reluctance to proceed with this project as an interim measure prior to achieving a Labrador electrical inter- connection when obviously the best manner in which to proceed would be to start a transmission line from Labrador immediately, if the Federal Government were to co-operate to make this feas- ible. Now, Mr.

Speaker, I am just about finished, I do not want to delay unduly the House , but the building of Cat Arm is not a substitute for a Labrador develop- ment. Let us not misunderstand here: We are talking about meet- ing our energy needs for about two years from this project. It represents only 12 per cent of the energy which would be taken -over a transmission line from Labrador. The Cat Arm project- J. will not go into all the details , they are set out in the state ment which I will have available for all members of the House and which is in the Speaker's Office here now for distribution, Mr.

Speaker and I will be having a Press Conference following Question Period to go into this with the press - 4076

·'­... .,., .. May 12, 1981 MR. BARRY: Tape No. 1462 EL - 2 But just generally, Mr. Speaker, we have a large .construction project here. We are talking about a potential work force of some 700, a peak of 700, Mr. Speaker, an overall of approximately 15,000 person months will be re- quired to construct the project. SOME HON. MEMBERS: Hear, hear! MR. BARRY: Just to give another - SOME HON. MEMBERS: Oh, oh! MR. SPEAKER (Simms) : Order, please! MR. BARRY: -Mr.

Speaker, another example of the magnitude of this project, there will be twenty-four miles of roads, twent y -four miles of roads constructed in order to build this project, Mr. Speaker. SOME HON. MEMBERS: Hear, hear! MR. BARRY: The surface area, Mr. Speaker, to be flooded is relatively small. It will be in the area of from six to twenty-two square miles. The details, the technical de- tails, I will not go into. But with respect to environmental analysis, Mr.

Speaker , this is the first major hydro project assessed and submitted for consideration under government's Environmental Assessment Act of 1980 and everything, Mr. Speaker, set out in that Environmental Assessment Act has been complied with. With the completion of the required detailed field studies and fol"lowing public meetings, Mr. Speaker _ ___.J _ • --- _\ MR. FLIGHT: That is not true. Not true! MR. BARRY: Mr. Speaker, is the hon. member - MR. SPEAKER: Order, please! 4077

May 12, 1981 Tape No. 1463 DW - 1 MR. L. BARRY: Mr. Speaker, is the hon. member saying I am misleading this House? If he is, Mr. Speaker, I ask him to withdraw it. SOME HON. MEMBERS : Oh, oh! MR. SPEAKER (Simms) : Order, please! Order, please! I know it would be impossible to expect total silence in the House nor would I suggest the parliamentary system would be able to stand that. However, the hon. member to my right who will be responding to the statement, I am sure, would want to be able to do so without constant interjections.

And I suggest to the hon. members to my right they give the same respect 'b<b. the hon. minister who is about ready to conclude the statement, I understand. Hon. minister. MR. L. BARRY: Yes, Mr. Speaker, I have about a page left and again Barry's theorem applies that as you get closer to the nub and show that you are doing great things here in government, the Opposition tries to drown us out every time. But the people of this Province are going to listen. SOME HON. MEMBERS: Hear, hear! MR. L.

BARRY: The Opposition should have learned by now that you cannot shout down a government which is the doing the great work that this government is doing. You cannot shout us down, Mr. Speaker. MR. NEARY: You should stick to cousin Vic's statement. SOME HON. MEMBERS: Hear, hear! MR. SPEAKER: Order , please! MR. L. BARRY: With the completion of the required detailed field studies, and following public meetings, an ' r: Environmental Impact Statement on the Cat Arm development was forwarded to the Minister of the Enviroment in January 1981 and released to the public at that time.

That environmental im- pact state - . 4078

May 12 , 1981 Tape No. 1463 MR. L. EARRY: ment has been available in libra:J:t.ies around -this Province, it has been available to the press since January 1981. In April, further information was supplied to the Minister of the Envi- ronrnent at the request of the Department of the Envi- ronrnent and to the public as well in the form of an addendum -to the environmental impact statement. Based on this submission,the Minister of the Environment recommended approval of the project, subject to a set of conditions that will ensure the Cat Arm development DW - 2 is constructed in an environmentally acceptable manner.

These conditions include - MR. G. FLIGHT: Not true. MR. L. BARR¥;_ Oh1 these conditions dQ nqt include what · ~ am ~bout to say? ~m. SPEAKER C.SiJMisl ; - MR. NEAR.Y: Order 1 please.: - --- -caugnt agaip. MR. L-:- BARRY : The Liaison Committee which has already been established by Hydro . during the conduct of environmental studies will be continued in order to address community planning and community con- cerns regarding the project, an ongoing series, Mr.

Speaker, of discussions with the public of· Newfound- land; (ii} careful selection of road and transmission line routing and provision for rehabilitation of borrow areas (sources of construction materials} to help retain the wilderness of character of the area; (iii} a fishing enhancement program will be undertaken to improve the potential for a sport fishery in the reservoir, and major portions of the shore zone of the reservoir will be clear-cut to provide boat access; and finally (iv} research monitoring studies during construction will address such sensiti v e issues as caribou movement patterns, potential archaeological sites and vegetation regeneration. 4079

May 12, 19..81 Tape No. 1463 These measures, Hr . Speaker, will ensure tha.t tt'Ua project will be undertaken in an enll'i.,ronmentally- compatible manner and in a way that will OW - 3 maximize its- be.nefi,ts- to tli.e Province, a project, Mr. Speaker, wbos.e benefits sh.ould .0-e ohv:i:ous to everyone even to tbe Oppos-ition. SOME E(ON. MEM;B:E;RS : Efear, near! · 4080 --------- ----- -- -------- .~ ....

May 12, 1981, Tape 1464r Page 1 -~ apb MR. SPEAKER (_Simms)_:_ The. lion.. tfie_ Leader of the Opposition, . who has about eleven minutes, incidentally. NEARY: -~They tried to stop the Mahoney Report. MR. SPEAKER: Order! MR. STIRLING: Mr. Speaker, there is not a single solitary word in this statement whi.ch has not been said many tilres ,over, either by th.e mini.ster or by the head of Hydro, not a single solitary word of new information. What is contained in this document is an admission, Mr. Speaker, an admission that they have forsaken Labrador, an _admis.si.on that they hcive gi..ven up the ghost • . MR.

WARREN: Yes, that is right? HR. --STIRLING: Thi.s decision MR. BARRY: (Inaudible) .tomorrow. MR. SPEAKER: Order! MR. STIRLING: This decision, Mr. Speaker, has been delayed now for. over six months. Th.:Ls is now; at least six months to a year behind. This is not a question of a decisi.on, Mr.

Speaker, th.is is a question of running out of time, this is a question of a government wh.:Lc~will not accept-one, fi.rst point,is that the Lower Churchill controlled by the Newfoundland Government, 5l per cent, the Lower Churchill Development Corporati.on,wi.th... the 4'1 per cent ownershi.p of Ottawa, would 6.e. quite happy to proceed with. Gull Island. However, what is required to proceed with. Gull Island?

What i.s· requ.ired is e.ither they do what this party would like to see them do, and that i.s li.ve up to the commitments in Labrador and attract industry and get industry into Labrador and then come oacB:- and say, 'Okay, Ottawa, here is the justification'. The tr~th, Mr. Speaker, and th.e reason that the. mini.ster i.s not very happy to have to make this statement and has delayed i.t for a year, is that they · could not do the job which.. thi.s 4081 . '

May 11, 1~81, Tape 1464, Page 2 -- apb MR. STIRLING: government should oe doing,and that is go out into the world and find contracts to develop this Gull Island site in Labrador. Mr. Speaker, lialf of that can come to the Island of Newfoundland~ the other half can be used in Labrador. And what thLs £s, thLs £s an admission that regardless of all the pretty speeches that they were not going to send anything outside Newfoundland,· is that Labrador has been forsaken once again; they have not, Mr. Speaker, developed Labrador.

The real reason for this statement is this government has not done the job under their 'jurisdiction. They are talking about jurisdiction and power; well,they have not done the job, Mr. Speaker, they have not done the job. SOME HON. MEMBERS : Hear, hear! MR. STIRLING: That is what this is all about. SOME HON . MEMBERS : Oh, oh! MR. SPEAKER(Simms): Order! M...'L STIRLING: The second alternative they had was to do what we had suggested nine months ago, Mr. Speaker, and that is go to their partners - SOME HON. MEMBERS: Oh, oh! MR. SPEAKER: Order, please! MR.

STIRLING: - in the Lower Churchill Development Corporati .on and say either 'we are go.ing to ge.t the Upper Cnurchill recall,' wni:cfL had the comple .te support of this side of the House, either that is going to be successful, or they are going to get ...... 4082

May 12, 19_81 Tape No. 1465 NM - 1 MR. STIRLING: the industry in Labrador or in the Province and Gull Island is going to be delivered, either of those situations;in which case they should have said six months ago, "Ottawa,will you agree because of those reasons to finance the interconnection between Labrador and the Island portion of Newfoundland?" They have not done it, Mr. Speaker' they should have gone to Ottawa and had it done. They have not approached them. SOf-1& HON - MEMBE·RS-: Oh, oh! MR. STIRLING: Now, Mr. Speaker, that is the second alternative that they had. MR. WARREN: SOME HON. MEMBERS: MR.

SPEAKER (Simmsl: MR. NEARY: MR. SPEAKER: SOME HON. MEMBERS : MR. SPEAKER: MR- WARREN: MR. STIRL'ING: Nothing for Labrador. Oh, oh! Order, please! Sold out! Order! Oh, oh! Order! Labrador sold down the drain. Mr. Speaker, the position that they - the cop out; their pride and vanity, Mr. Speaker, their pride and vanity will not allow them to do what needs to be done and that is to sit down in a reasonable manner with Ottawa, or sit down in a reasonable manner with their friends that they said they were so happy to have 1 their separatist friends in Quebec. Well, Mr. Speaker, they have done neither of these things.

MR. WARREN: They have not got the guts. MR. SPEAKER: Order! MR. STIRLING: Now, Mr. Speaker, part of what this government is doing, again in this statement, is continuing to give a part of the information, to cover· up the fact, not to face up to the fact that they have to make a decision. 4083

May 12, 19.81 Tape No. 1465 NM - 2 MR. STIRLING: . They do not make decisions. They will not sit down and reason w~th their partners in the Lower Churchill Development Corporation. Mr. Speaker, they are on record for three things. AN HON. MEMBER: MR. STIRLING: MR. NEARY: MR. STIRLING: MR. NEARY: MR. STIRLING: They are against Canada. They are on -~ ecord as asking _quebec - ,...:_li~- ~ow_ you ~~§ against Canada. - they are asking Quebec - Me? -on record as saying,' Quebec , can we use your transmission lines<" and Quebec does not have the facility. They are asking for a transportation corridor, Mr. Speaker.

They are asking for a transportation corridor. Three different things that they are asking f or all at the - ·· - - same time. Mr. Speaker, they have not tabled in this House anything that shows that they have done any kind of work with estimating the cost of putting in a separate · transmission corridor across Quebec. There is nothing to prevent them doi.ng it, Mr.

Speaker, except that their own experts in Hydro tell them that it is silly, uneconomical for us to build our own transmission line across Quebec, and what is in the Five Year Plan , recommended by Hydro,is they have to negotiate with Quebec, something that they cannot do. And they are adding to the confusion, adding to the insult and they are just not dealing with the problems they should be dealing with. MR. WARREN: Shameful. Shameful. MR. STIRLING: Now, Mr. Speaker, this does not come as any news that Cat Arm is going to be MR. BARRY: Sit down for Heaven's sake. MR. STIRLING: Cat Arm is not any surprise, Mr.

Speaker. It has been forecast f or a long time. All it is is the embarrassment that the minister had to stand up. You notice that the bad news 4084 •""''

l ·I I May 12, 1981 Tape No. 1465 NM - 3 MR. STIRLING: is always given by the minister. The good news comes from the Premier. The cad news is that they have given up their grand dreams. MR. WARREN: Of Labrad or. Right on. MR . STIRLING: They have given up all the promises to the people of Labrador and they have to admit , they have to admit that they cannot get out and negotiate the sources to use this energy within Labrador. It is a cop out, Mr. Speaker,a cop out and an admission of defeat for this crowd that they do not know what they are doing. 4085

May 12, 19.81 Tape. 1466 E.C~ ~ 1 SOME RON. MEMBERS; Hear, hear! Further Statements? MR. ANDREWS : Mr. Speaker. MR. SPEAKER: The hon. the Minister of Environment. MR. ANDREWS: Mr. Speaker, I am pleased at this time to inform the hon. House concerning the environmental assessment of the Cat Arm hydro-electric development. SOME RON. MEMBERS: Hear, hear! SOME HON. MEMBERS: Oh, oh! MR. SPEAKER: Order, please! MR.

ANDREWS : Government has authorized Newfoundland and Labrador Hydro to proceed with plans to carry out the Cat Arm project following a full examination of information provided by several agencies including the results of the environmental assessment. SOME HON. MEMBERS: Hear, hear! MR. ANDREWS : The Cat Arm project will involve the damming of the Cat Arm River located on the Great Northern Peninsula and flowing into White Bay. The environmental assessment of this project commenced in 1977.

Although the Environmental Assessment Act which now governs the conduct of such assessments was not proclaimed until 1980, the Cat Arm assessment has nevertheless followed virtually all of the procedures which are now mandatory under the act. SOME HON. MEMBERS: Hear, hear! MR. ANDREWS : In the course of this environmental assessment, thirteen separate studies were conducted at the request of my department and at the expense of Hydro. All of the study reports were reviewed by appropriate specialists and are available for public viewing.

Followinq the study programme, Hydro prepared and submitted an Environmental Impact statement 4086

~ay 12, 19.81 Tape 1466 EC - 2 . .ME. ANDREWS; fo;r the p;roject ea;rly in 19.81, Following a review of that document, my department requested Hydro to provide further information in the form of an addendum. That addendum was subsequently submitted and reviewed and the entire impact statement, including the addendum, was then accepted by my department as satisfactory for its intended purpose. The Environmental Impact statement describes the Cat Arm project and the present natural and socio- economic environment of the development area.

The document predicts the likely environmental impact of the project and the mitigative measures proposed by Hydro to enhance the expected benefits and to minimize the harmful effects. While there i _s a danger of over-simplifying and thus distorting the situation by attempting to summarize such a document in a few words, it may be said that the impact statement predicts the kinds of impacts that would normally be expected from a hydro-electric development of this size.

There will be obvious effects such as the flooding of land and consequent loss of some forested land and some wildlife habitat together with loss of some fish habitat in the river below the main dam. Also the marine environment near the power house at Devil Cove will be altered by the outflow of.fresh water. There will be other less dramatic effects on the wilderness character of the Cat Arm River Valley and on the local carnmunities and facilities.

The nature of these expected impacts is such that my department regards the proposed project as environmentally acceptable provided that certain actions are taken by the government and by Hydro. We just heard the Minister of Mines and Energy CMr. Barry) list some of those conditions. The other conditions will be, government will appoint a full-time environmental monitor 4087 ''

,Ma~ 12, 1981 Tape 1466 EC - 3 MR. ANDREWS : for the duration of the construction phase of the -project and will take steps to carefully control secondary development activities adjacent to the project area. 4088

May 12, 1981 Tape No. 146-1 SD - 1 MR. H. ANDREWS: Hydro will be required to consult all appropriate departments of government in preparing the detailed design of the various components of the project in order to examine alternate design possibilities and to ensure a maximum protection of the environment and will undertake a programme of research-oriented monitoring designed to test the predictions contained in the impact statement and to measure the adequacy of the mitigative measures be carried out by Hydro. Hydro will now proceed to seek regulatory approval, as required, for each component of the project.

Such approvals will be subject to the provisions of the legislation administered by my department and other government agencies. The constant surveillance to be provided by the government monitor will ensure adherence to the conditions of all approvals and to the commitments made by Hydro in the impac~ statement. In closing, Mr. Speaker, I would like to point out that Hydro has conducted a public information programme in the course of this environmental assessment involving interested representatives of several local communLt~es.

At no time has either Hydro or my department received any communication from the public indicating serious concern about the environmental impacts of the Cat Arm Project. My department is therefore confident that this Project can be carried out Ln a manner acceptable to the local communities and to the Province. Thank you, Mr. Speaker. SOME HON. MEMBERS : Hear, hear. MR. SPEAKER (Simmsl: The hon. member for Windsor - Buchans, who has about two and a half minutes. MR. FLIGHT: Thank you, Mr. Speaker, for the two and a half m.inutes. This statement, Mr.

Speaker, is misleadLng, The minister knows that Newfoundland Hydro - 4089 .-.

May 12, 1981 Tape No. 1467 SD - 2 MR. ANDREWS : A point of order, Mr. Speaker. MR. SPEAKER (Simms)' · A point of order. MR. ANDREWS: Are you saying that I am misleading the House? MR. FLIGHT: I say it is misleading, Mr. Speaker, this statement is misleading, totally misleading. The minister is parrot_i.ng something that was passed him to parrot. ~efore he became a minister of this particular department, Newfoundland Hydro,.Mr. Speaker, started looking at Cat Arm in 1975, they have not conformed to the Environmental Assessment Act as stated in this statement.

The only thirteen studies that were done - it says here, Mr. Speaker.- you talk about misleadingT thirteen separate studies were conducted by my department at the expense of Hydro. It did not go on to say that Hydro themselves did the studies. No ' one environmental study was put in to Cat Arm, Mr. Speaker, except for the ones that Hydro did. Anyone who reads the Hydro's tmpact study would believe that Newfoundland Hydro is going to environmentally enhance the area of the Cat Arm.

This hydro project,according to Newfoundland Hydro, the Cat Arm project, will enhance the natural ecology, will enhance the environment of this area. SOME HON. MEMBERS: Oh., oh. MR. FLIGHT; Mr. Speaker - I have two and a half minutes - this is the last area of Newfoundland that has th.is kind of game populati~n , __ t.ll.is area .-i_t _is_ un]:)elievable, Mr. Speaker,.. the game habitat that is going to be wiped out, it is the highest population of moose in the Province, _ Mr. _Speaker, and all of this is going to be done- Newfoundland Hydro went so far! Mr.

Speaker, you talk about insulting people•s intelligence,went so far as to -------- 4090

May 12, 1981 Tape 1468 PK - 1 MR. FLIGHT: indicate that there were only twenty salmon - SOME HON. MEMBERS: Oh, oh! MR. SPEAKER (Mr. Simms): Order: MR. FLIGHT: - using the Cat Arm River. Now, Mr. Speaker, the minister did not have - the main part of the legislation, the environmental impact legislation, Mr. Speaker, is that an impact committee be set up of independent people, not part of the' p ;opone-;t-;; ~ not part of government, and he has not done tliat, ~. Spe aker. He has accepted Newfoundland Hydro's impact statement that they issued-because they could not care less - SOME HON. MEMBERS: Oh, oh! MR.

SPEAKER: Order! MR. FLIGHT: Mr. Speaker, the first test of the legislation was the Upper Salmon, and the Upper Salmon was allowed to proceed without the benefit of the legislation. The second big test is this legislation, this one, Mr. Speaker, and the Cat Arm is not getting SOME HON. MEMBERS : Qh, oh! MR. SPEAKER: Order, please! MR. FLIGHT: - any of the protection, Mr. Speaker, of the act. Now, Mr.

Speaker, in closing just let me make this point, that we are going to watch the last resort, one of the last areas of Newfoundland that deserves protection, the minister is going to bring in a bill designating wildlife reserves in protected areas. There is no part of Newfoundland left, Mr. Speaker, that has the potential for environmental damage as the potential exists under this project in Cat Arm, it will be wiped out and it will be something that will be done for the short-term . 4091

May 12, 1981 Tape 1468 PK - 2 MR. FLIGHT: In 1971 that minister was telling us that we should develop Lloyd's Lake - MR. SPEAKER (Mr. Simms): The hon. member's time has expired, I thought he was c_~n~luding. MR. FLIGHT: later he is using the same argument to justify the Cat Arm that he used for Lloyd's Lake. SOME HON. MEMBERS: Oh, oh! MR. SPEAKER: Order, please! The hon. member's time has expired. SOME HON. MEMBERS : Hear, hear! MR. SPEAKER: Further statements? The bon. the Premier. PREMIER PECKFORO: Yes, Mr. Speaker. SOME HON. MEMBERS: Hear, hear! PREMIER PECKFORO: Mr.

Speaker, I am pleased to announce today the appointment of a new Auditor General to replace Mr. David Howley,who · accepted early retirement last Fall to become a member of the Royal Commission on the Inshore Fishery. Mr. Howley is known for his capability and leadership in the Department of the Auditor General, and under his supervision the Department of the Auditor General gained in strength and professional capability. HR. NEARY: I hope he is a Newfoundlander. P.REMIER PECKFORO: I was extremely pleased to find a person of Mr.

Howley's calibre willing and indeed eager to serve the Province in the capacity as Commissioner for the .--.' .. Royal Commission on. the Inshore Fishery. Since the retirement of Mr. Howley, a recruitment, , programme has been under way and a national campaign was mounted to identify and to select 4082

May 12, 1981 Tape 1468 Pk - 3 PREM!ll!R PECKFQRD: a highly qualified candidate, The s·earch Committee· included the Chairman of the Public Service Conuni~sion, the Speaker of the House of Assembly, and the Clerk of the Executive Council. The committee c1;mducted a lengthy and intensive recruitment campaign in an attempt to try and find ·the best candidate for the job in recognition of the importance and nature of the position.

A total of twenty­ two applications were received with four from within the Public Service, six from outside the Public Service but within the Province, and twelve from outside of the Prov±nce. Opon receipt of the report from the Search Committee,! asked the Internal Economy Commission of the House of Assembly to interview the top candidates to confirm the assessment of the Search Committee. In accordance with the 4093

May 12, 1981 Tape No. 1469 EL - 1 PREMIER PECKFORD: recommendations of the Search Committee and the Internal Economy Commission of the House of Assembly, I am announcing the appoint­ ment of Mr. Joseph McGrath, C.A., as new Auditor General. SOME HON. MEMBERS: Hear, hear! PREMIER PECKFORD: Mr. McGrath, by the way, is in att- endance here today in the Public Gallery. Mr. McGrath is presently a Director of Audits "Vlith the Department of the Auditor General and he has served in that department for the last eleven years. Mr. McGrath is a young Newfoundlander, born in Torbay and educated at St.

Bonaventure's College and the University of Ottawa. He is married with four children. Mr. McGrath is a Char·tered Accountant and a member of the Institute of Chartered Accountants of Newfoundland as well as the Canadian Institute of Chartered Accountants. I am sure that all members of this hon. House will join with me in extending to Mr. McGrath our best wishes as he assumes this im­ portant appointment. SOME HON. MEMB'ERS: Hear, hear! MR. WHITE: MR. SPEAKER (S:imms) MR. WHITE: Mr. Speaker. The hon. the member for Lewsiporte. Mr.

Speaker, as Chairman of the Public Accounts Committee, I am tremendously pleased that the Government and the Committee that was struck by the government to look for a new Auditor General has decided to appoint Mr. Joe McGrath. I found Mr. McGrath to be very decent, very co-operative in dealing with the Public Accounts Committee and I know that he has the best interests of the Province,and how the Province's money is spent, at heart. I am tremendously happy as well, Mr. Speaker, that the appointment came from within the Auditor General's Department. A number of. us on the Public Accounts Committee had 4094

May 12, 1981 Tape No. 1469 "EL - 2 MR. WHITE: been worrying over the last little while that people such as Mr. McGrath may be overlooked and that the Committee might go outside the Auditor General's Department in finding a new Auditor General. So we are tremendously pleased that Mr. McGrath has been appointed to this new position. ~ I do hope, Mr. Speaker, that Mr. McGrath and the Auditor General's Department is given the kind of independance that office needs to carry out that role.

That in­ dependance has not always been with the Auditor General's De­ partment,and sometime during this session of the House I will outline _ some of the comments made by David Howley concerning problems he had while Auditor General in getting co-operation from Treasury Board and from the government. I do hope that Mr. McGrath gets the kind of co-operation so that he can have the kind of independance required in carrying out this position. I would also like to pay my tri­ butes to Mr. David Howley,whom we have worked closely with as a Committee of this House 1 and also to the Deputy Auditor General, Mr.

Richards, whom 1•re found very co-operative as well. SOME HON. MEMBERS: Hear, hear! MR. SPEAKER('E'imms) : Are there further statements? 4095

May 12, l981, Tape 147Q, Page . l -- apb MR. SPEAI<ER (SIMMS ) : the Opposition. MR. STIRLING: ORAL QUESTIONS The. lion.. the. Leader of Yes, Mr. Speaker, I have a question for the PresLdent of the CouncLl(Mr, Marshall). It is just a prelimfuary dealLng wi:th. th.e Mahoney Commission, and we wi.ll have some further questions on that later. ThLs deals wLt~ a statement that the President of the Council made Ln whic~ it says tfiat the present admLnLs.tration will maintaLn a fixed determination to require the Public Tender Act to be enforced to the fullest of its- spLrLt, letter and intent.

In view of thi:s statement made by the PresLdent of the Council on behalf of the government,wi.ll they now agree to review the unanimous report of' the Public Accounts Committee, unanimous, four from the government ride and three from this side, that bz;ought to the attentLon of t-he. government that in their vLew a member of the. Cabinet,who is still sLtting in the Cabinet,contravened the. PublLc Tender Act, and kno~gly contravened the Public Tender Act? Would the President of the Council now LndLcate, in view of the statement yesterday, that that case. w£11 be reviewed? MR. SPEAKER: o:t: the Council. MR.

MARSHALL : The hon. the Presiaent Mr. Speaker, I prefer the judgement of independent people s-uch as a. judge of the. Supreme Court, the hon. l1r. Just·Lce Mahoney, to the judgement of the members. SOME HON. MEMBERS : Hear , hear !' MR. MARSHALL : The hon. Mr. Jus..t.ice 4086

May 1.2, 1.981., Tape 1.4 70,, Page 2 ...,_....,. <l.J?h. MR. MARSHALL : ~alioney- ~ I kno~ t.lie.. hon.gentleman is a slow reader so £t ~1 take him a little while, Mr. Speaker, to absorb the report. But he will note that the han. Mr. Jus:t£ce Mahoney indi..cated that this government has: ass:i..duous:ly over the. pas:t tfiree years showed its genuine wi..ll to abi:de by the. letter 1 spirit and intent of the Public Tender Act. SOME HON. MEMBERS: Hear, hear~- MR.

MARSHALL : Thi:.s. i..t lias- done., 111r • Speaker, and in concert with that, relating to the. happening to whi..ch the han. gentleman refers. wh.ic.EL was- recorded in one of the mee.tings of the Public Accounts Committee, to indicate the government's commitment to the Public Tender Act, that particular recommendation was assessed, it was looked at by the Premier, it was looked at by all members of Cabinet, it was pondered upon and the conclusion that was reached at the time, Mr. Speaker, was that this was an honest misinterpretation of the Act at the particular time -or not a misinterpretation~ an

interpretation, Mr. Speaker, of the Act. As I say, the hon. member and the Opposition can t~y to make their political points on the Mahoney Report all they want to, I prefer the judgement of a judge of the Supreme Court to that of th.e hon. gentlemen. As I said yesterday, the report is a victory for the Public Tender Act and an abvssmal defeat for those people who wish to slur other individuals. SOME" HON. MEMBERS : Hear, hear!. MR. SPEAKER: The hon. the member for Lewisporte. I am sorry, the hon. the Leader of the Opposition on a supplementary. MR. STIRLING: Mr.

Speaker, I am having a problem with consistency on· anything that is said by that government on the other side. Mr. Speaker, I have heard 4097 ,""t=l •

May 12, 1981, Tape 1470, Page 3 -- apb MR. STIRLING: now repeated today by the President of the CounciltMr. Marshall) , something which he put in his statement yesterday which is that the Commissioner found that this administration was now doing a good job. Well, Mr. Speaker, if he reads closely the report , he will see that ·tllat was sort of a off-handed comment a.bout the will to enforce it and, in fact, he was very careful t o 4098

~ay 12, 1981 Ta~e 1471 EC - 1 MR. STIRLING: point out that he did not look in detail at anything other than the period under which he was supposed to undertake that examination, and that was the period before this ~overnment took office 7; if you read that carefully. Now, Mr. Speaker, the question I would like to ask the ~resident of the Council (Mr. Marshall) is, in view of his comments, why would the Auditor General in this year's report, March 31, 1980 - when all of this, this whole Cabinet, not the twelve from the previous, but the whole Cabinet - why is it under Paragraph 42 on Page 25?

Because although I may be a slow reader, this report received from the Mahoney Commission had been with the Cabinet for six weeks and I believe that we will find some time in six weeks to get through it. But why, in view of all the comments made by the President of the Council, does the Auditor General on Page 25, Paragraph 42, still point out that public tenders are not being called for road maintenance programmes? MR •. NEARY: Hear , hear! · A good question. MR. SPEAKER (Simms): The hon. the President of tlie Council. MR.

MARSHALL : I do not know whether the. han .. member . is consistently having problems or he is having consistent problems. I do not know what the fact of the matter is, Mr. Speaker. SOME HON . MEMBERS : Oh, oh.! MR. MARSHALL: All I can say to the hon. gentleman there opposite who'love to delve into the past that the end result of the Mahoney Commission was that a judge of the Supreme Court indicated it had not been implemented oy , the previous administration because it did not have the will to implement it, but that report, Mr.

Speaker, also quite clearly said to those who wish to read 1 to see and to inwardly digest it that this particular government has had a genuine will. And, Mr. Speaker, after all, Mr. Justice Mahoney did not 4099 ~.

.May 12, 19.81 Tape l4Jl EC - 2 -MR, .Mi\RSHALL: need to say that hecause th~s is self-evident not only to thls Erouse. 5ut to the populace o.f th.Li$.' ~P;royi.nce. SOME HON. MEMBERS: Hear, hear! MR. WHITE: Mr. Speaker. MR. SPEAKER (Simms} : The hon. the member for Lewisporte. MR. WHITE: Mr. Speaker, I have a question for the Government House Leader (Mr. Marshall}. It deals with the Mahoney Inquiry. Yesterday when he made his Ministerial Statement in connection with the Mahoney report, he indicated that no further prosecutions would be carried out, no further charges would be laid.

I wonder if the minister could clear this up by indicating whether or not he made that statement based only on the Mahoney Inquiry report or whether he based it on the totality of the report itself and what Mr. Mahoney indicated that under separate cover he would be providing the Director of Prosecutions with copies of transcripts of in camera statements? Does that mean there will be no further charges based on both the report and the material submitted under separate cover? MR. SPEAKER: The hon. the President of the Council. MR. MARSHALL : Mr. Speaker, I thought it was made quite clear in the statement.

I said in the statement that the in camera evidence had been referred to the Director of Public Prosecution. The Director of Public Prosecution and his staff had reviewed this evidence : , had fotmd the evidence in the in camera hearing to be not significantly or substantially different from the evidence that had already been 4 ·1 0 0

May 12, 1981 Tape No. 14 72 NM- 1 MR. MARSHALL: considered by the Director of Public Prosecution and the Director of Public Prosecution and his staff then recommended that no further prosecution should - follow. MR. NEARY: That was _ the go ~~nment's decision. Mr. Mahoney did not make that statement. MR. MARSHALL: In answer to the question - SOME HON. MEMBERS: Oh, oh! MR. SPEAKER (Simms) : Order, please! MR. NEARY: Cinaudible) before you open your mouth. MR. SPEAKER: Order, please! Order, please! MR.

NEARY: No further prosecutions will lie and I would point out also to the hon. member that I would assume, even though you do not get into decisions cby the ! - ·- - Director of the Public Prosecution~ because of the nature of the office, I would assume that a part of the reason would be because of the report and the observation made by Mr. Jutice Mahoney to the effect that some of the evidence, namely that of a Mr. Andy Davidson, was not substantiated, it was unbelievable. So he did not want to make this public because he did not wish to malign people, Mr. Speaker.

Would that other people at another clime i n time had had the -. same attitude - SOME HON. MEMBERS: Oh, oh! MR. SPEAKER: Order, please! Order, please! MR. MARSHALL: - who would not be prepared to have - MR. NEARY: (Inaudible) government. MR. SPEAKER: Order, please! MR. SPEAKER: Order! MR. MARSHALL: - who would not have been prepared, Mr. Speaker, to use this House in the way that Mr. Justice Mahoney - 4 1 0 1

May 12, 1981 SOME HON. MEMBERS': MR. NEARY: used. Tape No. 1472 NM - 2 Oh., oh~ - would not have his commission h.earings MR. WHITE: A supplementary, Mr. Speaker. -SOME -:H-QN .- MEMBERS-:, ~- -~-Ch,-oh~ ~-~-- ------- ------- --- - ----- MR. SPEAKER (Simms l : MR. NEARY: Order, please! Order, please! (Inaudible) So the decision not to proceedwas a government one, not Mr. Justice Mahoney's. MR. SPEAKER: for Lewisporte. MR. WHITE: Order, please! Order, please! A supplementary, th.e hon. member Mr. Speaker, could the House Leader tell the House, how, since it took Mr.

Justice Mahoney three years to go th.rough the evidence, and to do this report, how the people in the Justice Department could do th.at much work, three years of work 1 in just a couple of weeks? Or would h.e admit to th.e House that this was a blatant government decision that th.ey were going to drop this whole thing? SOME HON. MEMBERS: Hear, hear! MR. SPEAKER: MR. MARSHALL: Th.e hon. President of the Council. Mr. Speaker, that is unworthy of the hon. member who usually does not cast innuendoes like that which. can affect innocent people. SOME CION. MEMBERS: Oh., oh.! PREMIER PECKFORD: Yes. Th.at is unworthy.

Very unworthy. MR. MARSHALL: Let me say first of all, Mr. Speaker, that th.e Director of Public Prosecution and his staff are considerably skilled people in these areas, much. more skilled than the members of th.e Opposition, or for th.at matter any member of this House. AN HON. MEMBER: PREMIER PECKFORD: (Inaudible) John Mahoney (inaudible) Oh! John Mahoney, is it? 4102

May 12, 19.81 Tape No. 1472 NM - 3 MR. MARSHALL: But let me also say, Mr. Speaker, that I mentioned in the statement, and it was quite clearly stated in the statement, that this evidence was not substantially different than the evidence which was before the Director of Public Prosecution some time before, before the report was in. So the Director was already familiar with this. Mr.

Speaker, some of it he was familiar with because of the fact that a certain member of the House at the time was prepared to use this Kouse as a vehicle for the putting out of an affidavit before this House containing testimony - SOME HON. MEMBERS : Oh, oh! MR. MARSHALL: - which a judge of this land deemed to be completely unreliable, Mr. Speaker. That is why. MR. NEARY: (Inaudible) . MR. SPEAKER (Simms -): Order! MR. MARSHALL: Now the answer, the answer, Mr. Speaker, so that the hon. gentleman will know it and perhaps ------- MR. NEARY: (Inaudible) Confederation Trust (inaudible). MR. SPEAXER: Order! MR.

MARSKALL : - and perhaps, Mr. Speaker, he would like to copy it down and I will say it very, very slowly so he will understand. 4 1 0 3 ~ I

.--- -- - ----''-------'--':.:..0....:=----- ---- - - ----- __ ___;,;; _ __:.;--"""~--- ---"----- May 12, 1981 Tape No. 1473 so - 1 MR. MARSHALL : The Director of Public Prosecution was already fully aware of the testimony that had been given because he had had it from another forum before and thus the Director of Public Prosecution and his staff had quite ample time in which to make the recommendation. And I think that the hon. - l1R. NEARY: (Inaudible) confusion over there(inaudible). MR. SPEAKER (Simms): Order, please! MR. NEARY: not go ahead with it. MR. SPEAKER: MR. MARSHALL: (Inaudible) would Order, please!

I think in view of the findings of the report, Mr. Speaker, particularly of Mr. Justice Mahoney 1 that the hon. ge~leman should weigh his remarks very carefully before he asks questions which cast-innuendoes that there might have been some interference and therefore some guilt on people who are deemed to be not even subject to prosecution. SOME HON. MEMBERS: SOME HON. MEMBERS: MR. SPEAKER: MR. NEARY: MR. SPEAKER: MR. WHITE: MR. SPEAKER: on a further supplementary. MR. WHITE: Hear, hear. Oh, oh. Order, please! Order, order, order! Mr. Moores (inaudible) charges. Order, please! A further supplementary, Mr. Speaker.

The hon. member for Lewisporte Mr. Speaker, as the President of the Council GMr. Marshall) knows 1 in his report Mr. Justice Mahoney said that he could not go further with his investigation because his terms of reference were narrow and he could not take into consideration Confederation Trust or the Standfield Trust. SOME H.ON. MEMBERS : Hear, hear. 4104

May 12, 1981 MR. WHITE: Tape No. 1473 And he suggested- he did so - 2 not suggest, he said in hi> report that it would require a separate commission with new terms of reference. And what I am asking the government, do they intend to now appoint another commission to carry on with what Mr. Justice Mahoney could not do because he did not have the terms of reference·, as he says in his report? SOME HON. MEMBER: Oh, oh. MR. SPEAKER (Simms) : Order, please. The hon. President of the Council. MR. MARSHALL: Mr.

Speaker, that is what the hon. gentlemen opposite would love, they would love to have commission after commission after commission. SOME HON. MEMBERS: Oh, oh. MR. MARSHALL: All the hon. gentlemen there opposite can consider, Mr. Speaker - MR. NEARY: MR. SPEAKER: MR. NEARY: 1972? MR. SPEAKER: (Inaudible) Order, please~ What about the witch hunt back in Order, please! Questions have been asked,and I presume you require answers , it is very difficult. AN HON. MEMBER: No, no, we do not want answers. MR. SPEAKER.: If you do not want answers that is fine.

But it is difficult to provide answers and to ask questions if there is consistent and constant shouting across the floor. I would ask hon. members to consider the rules of the House - both sides. MR. MARSHALL: Mr. Speaker, as I say, that is what the hon. gentlemen,r know there opposite,would love­ we would have commission after commis -sion after commission, that is all the government will do; We will have inquiry after inquiry after inquiry. Mr. Speaker, the reaction that thi:s government takes to the Mahoney Commission is that it was 41 u 5 . ....

May 12, 1981 Tape No . 1473 SO - J MR. MARSHALL: a splendid 1 axcellent report. It was an incisive report. It has made a finding, the finding has been laid. before the public. As far as the government is concerned the matter is now at an end for reasons given yesterday. We prefer, Mr. Speaker, to look towards the futl;lre and to the development of this Province for the benefit of the people of this Province rather than engage in the - MR. NEARY: One .of the(inaudib1e) does not want to hear that. MR. ~SHALL: ,.._.commissions after commiss.ions and inquiries back and the slurring and the innuendoes anq. ; all the· aeousations. 1 ·If that titillates 4106 ~-

May 12, 1981, Tape 14 7 4 ~ Pagel -,~ ape , MR. MARSHALL: the han, members:, .Mr, Speaker 1 if that gives them a good deal of joy- ,perliaps­ they can go out and look at a a-rated movie . or sometfiLng to titilate themselves. SOME HON. MEMBERS: Hear, hear!' MR. SPEAKER (Simms): A final supplementary- , The han. th.e member for Lewisporte. MR. WHITE: Mr. Speaker, when the. Presi.dent of the Counci.l (Mr.

MarshallL says- tiiat i:n view­ of the Mahoney Enquiry and its- report tfiat now tli.is: matter is dropped, and this matter is finis-hed~ and this matter concluded, does : this mean that the government is not going to act to recover any monies that it may be out? And at the same time, Mr. Speaker, I would ask the minister to teli the House what he intends to do, or what the government intend to do,about the money spent with. regard to the Devine poll and the. shoot at the P.C. Convention in Gander and at the fisheries shoot? Are we · not going to get that money back, or even try? MR. SPEAKER: The hon. the.

Presi:dent of the Council. MR. MARSHALL: Was the hon, gentleman here yesterday? When he asks whe.ther th.i.s government is­ g_oi.ng to attempt to recover any money spent, the government clearly said it accepted the . recommendation of the Commi.ssfoner with respect to thLs, and the Department of Justi.ce is looking into i.t to see, as the. Commis-si:oner recommended, whether a case is- to be lai:d or not, and if there is, Mr. Speaker, acti.on wi.ll be taken. SOME HON. MEMBERS : Hear, hear!' MR. MARSHALL: That is the. fi:rst thi:ng.

The second thing is the Devine matter, as the non, gentleman knows , is being looked i:nto now. by the . Department of Just ·ice in the same way as· the findings of the Mahoney Commission Report were, and when a decision is made, Mr. Speaker, 41 0 7

May l2, l9:.Bl, Tape . .l4 7 4, Page. 2 ...,..,.. ai?h MR . • MARSHALL: then .it will oe. brought before t.fie publi..c i.n the. same way as the. Mahoney Conuni.ssi.on • But I will guarantee. you, .Mr, Speaker, that people -u1 thi..s Provi.nce . will not fie prosecuted and/or sued, and/or pe.rsecuterl to sati.sfy the whims of the hen. gentlemen there opposf.te. SOME HON. MEMBERS: He.ar, hear~ MR.

MARSHALL: The.y are. going to be. prosecuted and/or and thi.s i.s wi.t~ respect to t.fie Devi.ne matter - they are goi.ng to he prosecuted and/or sued, as i.n the case of the other matters, i.f 1 on the. basis of competent, legal ,d.i.spass.ionate judgement .it :is ruled that a case . .is. t.fiere and that t.fie.y should be. because . thi.s i.s the way the j ust.ice s.yst·em works, It is qui.te . ohvi.ous 1 Mr.

Speaker, that the. han, gentlemen there oppoai..te . are smarti.ng badly and li.ck.ing their wounds because. thi.s admini.s.trati.on has: rece.Lved the ri.ght - this admini.st ·rati.on has rece.ived the. complete clearance from no less a person - MR. NEARY: linaud.ibleL. MR. SP·EAKER (Si.lllms l : Order~ MR. MARSHA·LL: - than Mr. Justi.ce Mahone y who conducted an enqui.ry MR. NEARY: Hang your heads in shame. MR. SPEAKER: Order; please:! · MR. MARSHALL: - into the matters wh.i.ch. the hon. gentlemen are questi.on.ing. SOME HON. MEMBERS : MR. SPEAKER: St. Barbe. MR. BENNETT: is directed MR. STAGG: MR.

BENNETT: 41 0 B Hear, hear ~- The. hen. the member for Mr. Speaker, . my quest ·.ion Oh.. oh., another rumour. We hear a lot of rumours

May ~2, ~981, Tape 1474, Page 3 -- apb MR. BENNETT: from Stephenville, Mr. Speaker. MR. NEARY: You should hang your heads in shame. tinaudi,blel. SOME HON. MEMBERS: on., oh.. MR. SPEA.t<ER (Simms} : Order, please !" MR. BENNETT : My . question, Mr, Speaker, is directed to the Minister of Social Services. MR. NEARlf: (,Inaudible}_ . MR. SPEAKER: Order, please!' The non. the member for St. Barbe. MR' . BENN·ETT : rf I could have the attention of the House and the ,. ---- min.ister, Mr. Speaker, my question is directed to t1te Minister of Social Services. ram wondering . nowrigid or heavy-handed is your department in Lnsisting that social assistance recipients accept employment? - -· 4109

'' May 12, 1981 Tape No. 1475 EL - l MR. SPEAKER (Simms) : The han. the Minister of Social Services. MR. HICKEY: Sorry, Mr. Speaker, I did not get the first of the question. I will repeat it to see if I got it. Is my de- partment insisting that recipients accept employment? MR. SPEAKER: Order, please~ -MR. HI.CKEY: Is that the question? MR. BENNETT: Yes. MR. HICKEY:_ Wherever there is work available and the people are able bodied and able to work, yes. MR. BENNETT: A supplementary, Mr. Speaker. MR. SPEAKER: A supplementary, the han. member for St. Barbe. MR. BENNETT: Thank you,Mr. Speaker. Mr.

Minister, can social recipients be selective in the type of employment that is designated? Can they have any preference in jobs <t~hatever from your department? MR. SPEAKER: The hon. the Minister of Social Services. MR. HICKEY::. Mr. Speaker, my department provides assistance to people who are unable to provide for themselves and their families.

And whilst people may have to be trained in a certain profession, I do not think one can afford the lux- ury to stay out of employment simply because he cannot get a job in the profession in which he is skilled, if a job is available which he is quite capable and able to do. And there - fore, my department provides assistance where - we are the sort of last resort. We provide assistance to people in need when there is no other way to provide for the - to fill the requirements that pro- vide for the members of their family.

I do not think that really we are doing anything outside of the spirit of the Social Assistance Act in doing that. 411 0

. ------------ --~~~~~~-------------..:. May 12, 1981 MR. BENNETT: MR. SPEAKER (SIMMS) : for St. Barbe. MR. BENNETT: Tape No. 1475 EL-2 A supplementary, Mr. Speaker. A supplementary, the hon. member I had difficulty in hearing the minister. But, Mr. Minister, can recipients be taken to court for refusing employment that they find repulsive and for which they are not trained? Can they be taken to court, Mr. Minister? MR. SPEAKER: The hon. the Minister of Social Services. MR. HICKEY: That is a hypothetical question, Mr. Speaker.

I would not know what information the hon. gentleman has, so therefore I am not going to respond to that question, 'Employment which 'is repulsive,' you know, he will have to be more definitive before I answer that. I will say that clearly it is written in the law that persons who neglect their children, refuse to take employment or who quit employment, causing the children or members of the family to be declared neg­ lected, certainly is liable to a charge and can be taken to court. Certainly that is not done very often and it is only in the mast serious, blatant situations where certainly action is taken. MR.

BENNETT: MR. SPEAKER: member for St. Barbe. MR. BENNETT: A final supplementary, Mr. Speaker. A final supplementary, the han. I have reliable information, Mr. Speaker, from my district where a constituent receiving assist­ ance from your department, and this is a single mather with one child- MR. STAGG: MR. TULK: hole. MR. BENNETT: Sa far. What a remark.

Crawl back into your - was obliged or expected to go and do work for which she was not trained and for which nursing aides had been relieved of their duties - apparently to save money from the department, from other departments, possibly the Department of Health. 4 1 1 1

May 12, 1981 Tape 1476 PK - 1 MR. BENNETT: Now this girl who found the work replusive, amd certainly was not qualified for it - I might add, Mr: ---Speaker i that this single mother comes from:? a very good home, comes from a very good background and has made fantastic strides to find employment, and this girl is being taken to court on the 21st. of May - MR. NEARY: (Inaudible) a letter. MR. SPEAKER (Mr. Simms): Order! MR.

BENNETT: - and I a~- wond~ring just how tolerant the minlster's department is, because the people in the area. in question at the time, can hardly take - they are not very tolerant of this situation, Mt. Speaker, and I am wondering if the minister is tolerating this kind of abuse of people's rights? MR. SPEAKER: The hon. Minister of Social Services. MR. HICKEY: Mr. Speaker, this minister does not tolerate the abuse of anyone's rights 7 Let us get that out of the way first of all. I suspect that the case the hon. gentleman is referring to,there is more to it than he is giving us or than he probably has.

I certainly would not want to imply any wrong motives on his

part in asking me the question, but I hope he can appreciate that I can hardly respond in the absence of the detailed information. I can certainly tell him right now that my department is quite tolerant when it comes to people being taken to court and charged with neglect. As I stated earlier,it is only under the most serious situations, the most blatant situations wherein a charge of that nature is laid. And the fact that it is a single mother concerns me even more, that there must be more information to the case than that provided by the hon. gentleman or indeed than that provided to the hon. 4 11 2

May 12, 1981 Tape 1476 PK - 2 MR. HICKEY: gentleman; possibly he is unable to give me any more information. MR. BENNETT: A supplementa~~ : MR. SPEAKER (Mr. Simms): _I __ j,l)dicated a final supplement~!..!' . unl~ss _t l:e _h ~ mernb_er for LaPoile (Mr. Neary) wishes to yield. MR. BENNETT: I would just like to ask the minister with your tolerance - MR. SPEAKER: Well,I indicated a final supplementary, it will be up to the member for LaPoile if he wishes to yield. MR. BENNETT: Well, t-!r. Speaker - I -will- yield. MR. NEARYi MR. SPEAKER: -_-- - - - ~- The ·l)an~ memb~~- fO~ L · 1 · · ld ..

CUl.9_~_ . e : y~e s . ____ .. ·~ The han. member for St. Barbe. MR. BENNETT: Thank you, Mr. Speaker. I certainly would like to know just how widespread - like I have a case in point, and I can get the minister all of the evidence surrounding this particular case, and I am wondering, Mr.

Speaker, I doubt very much if this is an isolated case - I am wondering if the minister is getting any information from all around the Province because if I have one case in my district, which I think I have several - just how widespread is the problem that these people are being faced with and dragged into court by this department? MR. SPEAKER: The hon. Minister of Social Services. MR. HICKEY: It is a very serious problem, Mr. Speaker, in a number of parts of the Province with regards to single parents.

The numbers of single parents continues to increase, and the problems that they face have become more difficult as time goes by. But I can certainly tell the han. gentleman that I am unaware 1 and I am sure I would be aware, 4 11 3

- ·~.:-. ~ -.-;. . · .. ; ' • ' ' •. _.~ ~I . ' ~.;.~ ... L. ........ !-:---:. :: May 12, 1981 Tape 1476 PK - 3 MR. HICI<EY: if there were any large number of cases of this type that he refers to . I suggest to him that this case that he refers to is indeed an isolated one. And I would welcome all of the details he bas. Based on what he has said so far, I certain ly very much would like to cause an investigation to take· place. And certainly if there is any unjust treatment or someone is using a heavy hand, then certainly I would want to have something t o say about that . But in the absence of details, of course, I cannot z::espond" further than I have 4 11 4

\. May 12, 1981 Tape No. 1477 DW - 1· MR. T. HICKEY: respond further than I have. MR. SPEAKER (Simms) : The hon. member for LaPoile. MR. S. NEARY: Mr. Speaker, down in Miami, down in Florida there is a Canadian mining tycoon being sued for $10,000 in back rent. The name of the tycoon is Mr. George Beaubella , a Canadian busi- nessman who may become enormously wealthy if his mining claims in Newfoundland come through. He is being sued in the Palm Beach Credit Court for falling $10,000 behind in the rent of a Palm Beach mansion valued at - it was appraised at $286,000. Would the hon.

Minister of Mines and Energy (Mr. Barry), I wonder,tell us what he knows about Mr. Beaubella and a company called J. Tyler Mining and Exploration Limited of St. John's? And I might say, Mr. Speaker, that it was supposed to be incorporated in 1~80;in a search that I conducted t~s morning_ in the regist!y _ t~~re is no such company registered in this Province. Would the hon. gentleman care to shed some light on this particular situation? MR. SPEAKER: The hon. Minister of Mines and Energy. MR. L. BARRY: Yes, Mr. Speaker.

The gentle- man in question and:the either firm or corporation - if it is . not incorporated, it is a firm -but the gentle- man operated under J. Tyler Mining - I assume company or limited - and was involved, Mr. Speaker, in attempting to develop a barite deposi~ at Colliers Point out in Trinity Bay - MR. F. STAGG: Norman' s Cove. MR. L. BARRY: - near . Norman's Cove. 4 11 5

• !;--· ... '-.. -;.-. ~·- - May 12, 1981 Tape No. 1477 DW - 2 MR. L. BARRY: Mr. Speaker, I was asked a i question in my Estimates about the same matter and I had to, at that time, speak somewhat generally. I mentioned the risks of people dealing with any operator who might be operating on a wing and a prayer. MR. S. NEARY: According to this he lives kind of high. MR. L. BARRY: But I had nothing, Mr-. Speaker, other than some very general comments that were corning back to me second _hand or third hand or fourth hand. However, since then, quite recently, as a matter of fact, today, earlier this morning, Mr.

Speaker, I did have a meeting with a gentleman who is involved directly in business dealings relating to that mineral deposit with the gentleman in question and from that meeting I received the facts indicating that the operation was in financial difficulty. Now, Mr. Speaker, you can appreciate that as a minister of the Crown or any member of this House with legislative immunity, I do not want to say any-- thing that would injure or impair the reputation of any individual doing business in this Province without giving that individual an opportunity to express his side of the story. So all I can say, Mr.

Speaker, is what I have said previously, what I said at the time of my Estimates, what I have always said whenever anybody has called me up with respect to 4 11 6

May 12, 1'181 Tape 1478 EC - 1 MR. BARRY: this developer or any other mineral developer,that it is a business world and anybody doing business with this gentleman or other mining developers do it at their own risk and they should make sure that they are protected. I can say, Mr. Speaker, that normally government would have more knowledge and would have more involvement where there is a potential mining development because we would be involved in the issuing of the mining claim.

But this is one of the cases where,unfortunately, due to very bad policies with respect to mining land tenure in the past, there were fee simple grants given out in perpetuity. And it is a question then of the owner of the fee simple grant - and this is what has happened in this case - making a deal, an arrangement with this individual to develop a possible mineral deposit on the fee simple grant.

So government has very little involvement other than to ensure that any taxes - that are payable to government are complied with, that any environmental regulations are complied with or that any occupational health and safety regulations are complied with, or ultimately, if a mining operation were to start, to go underground, to make sure that the deposit was mined in the best method possible to avoid high grading and so forth, and even there, there is limited control by government under existing legislation. MR. NEARY: No ·speeches now, that is enough. MR'.

BARRY: I am sorry it took so long but it is important, Mi. Speaker, that when an individual's name is brought up in this House where we have legislative immunity, we make sure that we give as full a picture as possible so that members of the general public can form their own conclusions. MR. NEARY: A supplementary, Mr. Speaker. MR. SPEAKER (Simms ) : A final supplementary since we have limited time. The hon. the member for LaPoile. 4 11 7

l!ay- 12, 1981 MR. NEARY: Tape 1478 ,­ ---~--,_;.;-' .. ·.:: _· "'--';;.:,'-~·;-~.):~ ~ ~·. EC - 2 Mr. Speaker, I thought it was only the Smallwood administration that dealt with Shylocks and shysters and scoundrels and rogues. Now, Mr •. Beaubella apparently has good taste,according to his lawyer in Palm Beach. SOME HON. 'MEMBERS : Oh, oh! MR. SPEAKER (Simms) : Order, please! MR. NEARY: Now, would the hon. gentleman tell us what involvement this Mr.Beaubella; has with the provincial government? Were they given any money from the Newfoundland Development Loan Corporation? Do they owe any taxes?

What happens to the grant? Does the government get it back? What happens to the creditors? Does this fly-by-night come in here and just walk away scot-free? What is the government doing about this? The government has been sitting on it now for some time apparently and it took an item in the Miami newspaper to bring it to light in this Province. I mean, is the minister sitting on this information or what? MR. SPEAKER: The hon. the minister has about thirty seconds to reply. MR. BARRY: Mr. Speaker, I have not sat on any information in this case or any other case.

I thought I had explained that this is a fee. simple mining grant that was given out, I think, in the 1930s or maybe even earlier - no, even earlier than that, Mr. Speaker. There was a barite -·- ~-- operation out there that 4 11 8 ......

May 12, 1981 Tape No. 1479 apb - 1 MR. BARRY: terminated in 1903 because of

an act of God. MR. NEARY: . .You are the guys who talk about giving things away - Mr. Beaubella apparently got a great gift. MR. BARRY: A storm washed away a wharf and sunk the ship. MR. SPEAKER (Simms): Order, please! MR. HANCOCK: Too bad you did not go with it. MR. STAGG: (inaudible) did not work out for him. MR. NEARY: Everythil1.g (Inaudible) did not r work out, it is too bad. MR. SPEAKER: Order, please! MR. BARRY: Mr. Speaker, there surely has not been any money given by any department that I am involved with, and I am not aware of any monies being given by government to this developer.

It is a case of the business community getting involved and they are big boys and they make their deals and they have to en- force them. And if this individual has done anything improper, that he is in breach of the laws of this Province, Mr. Speaker, I have asked - MR. NEARY: How much taxes does he owe? MR. BARRY: - that the matter oe brought to the attention of the Department of Justice so that a full investigation will be carried out in the event that there is any breach of the laws of this Prevince. MR. NEARY: Goodbye, Mr. Beaubella! MR. BARRY: But. Mr. Speaker, I am not aware .. MR.

NEARY: So long, it has been good to know you. MR. BARRY: I am not aware - MR. NEARY: 'Ihis crC'\'.ti do not deal with (inaudible) .

May .li, l!81, Tape .14 79 .. , Page. 2 - a ph MR. SPEAKER' (:Simms l : Order, please!" MR. BARRY: I am not aware, Mr. Sl;>ei!ke.r, that th~s ~d~vidual is ~ any breacn of any rules or regulations relating to my department. .MR. NEARY: Ah, r...'e will see. So long , it has been good to know you. MR. SPEAKE·R: The time for Oral Questions has. eXpired. ORIJ:EaS: OF THE QAY MR. MARSHA!.L: Mot.f.on 4. MR. SPEAKER: It is moved and seconded that I . do now leave the. Chair for the. House to resolve. itself into a Committee of the Whole. MR. MARSHALL: No. MR . SPEAKER: ram sorry. MR . MARSHALL: Mr.

Speaker 1 motion 4 , whicn Ls just first reading of those- motion 4 1 o.f.lls and one thing and another. MR . SP.EAKER': I: do apologize , I thouglit you said Order 4 . ..'1otion , the. hon . t.he. Minister of Ju s t~ce to introduce a bill, 'An Act To Provide Certain Rignts For Blind Person~··, carrJ..ed. (Bill No . 62}. On motion, Bill No. 62 read a first time ., ordered read a second time on tomorro'" Mot.ton, the lion the Minister of Just~ce to introduce . a bi.ll, '"An Act To Amend The Landlord And Tenant (Residential TenancLes: T_ A.ct, 19.:7.3' , carried . lBill No. 59.

L On mo tion , Bill No, 59. read a first time, ordered read a second time on tomorrow, 4120

May 12, 1981, Tape 1479, Page 3 -- apb On motion, that the. House resolve itself into a Committee of Supply, Mr. Speaker _1eft the Chair. COMMITTEE OF SUPPLY MR. CHAIRMAN (Butt): Order, please~ 4 1 2 1

May 12, 1981 Tape No. 1480 EL - 1 MR. CHAIRMAN (Butt): First of all, I would like tore- . mind all hon. members of the time remaining in Committee. There were sixteen heads referred to Committees taking up forty-eight hours and we have three hours for each debate on the concurrence report which is nine hours. There were ten hours and fifty-two minutes used in In­ terim Supply so we have a total of sixty-seven hours and fifty.-two··tninutes. The time remaining would be seven hours and eight minutes. Head 1, Consolidated Fund Services. The large majority of this is, of course, statutory. The hon.

Minister of Finance. DR. COLLINS: Mr. Chairman, just briefly on Con- solidated Fund Services, the headings are 101 to, I think 105 inclusive, and the expenditures under these headings relate to the Provincial debt~and the majority of items are interest on the borrowing programme, and pension fund. Under 101, it is estimated that the gross expenditure in '81-'82 will increase to $221.3 million.

That is an increase over last year ·of $21 million and it relates, really, to additional interest expenses as the full effect of our borrowings last year, which, of course, took place part way through the year, the full effect comes- MR. MARSHALL: Could I rise on a point of order, Mr. Chairman? I .do not mean to interrupt my - DR. COLLINS: Sure. MR. CHAIRMAN: A point of order, the hon. the President of the Council. MR. MARSHALL: But, Mr. Chairman, I just draw to your attention - I called Head 1 but 101 is statutory .

There are a lot of these things which are statutory and are not subject to passage and I just rise to remind the Committee of that. I think pensions and gratuities are practically and the only things which are not statutory, 4122

-- ------ ---'- May 12, 1981 Tape No . 1480 EL - 2 MR. MARSHALL: But the Table can advise on that . MR . CHAI.RMAN (Butt): I pointed that out; iHVl r.a"' lv t~e - onlv two to be considered are 105 -02-02 and 105-02-11 . MR. STIRLING : Mr. ChairMan. MR. C~!RMAN: The han. the Leader of the Opposition. MR. STIRLING: Mr. Chairman, I realize that but in the past we have had the courtesy from the other side of answering some questions if they were relevant to any heads here or for purpose of clarification. MR .

MARSHALL: (Inaudible) 11r .Chairman, if YC?U were trying to stifle or curtail in any way, debate, it was purely and simply by way of clarification because I think it is important that the only ones that be called are the ones that are non-statutory. But, of course, the hon. minister, as he always does, is quite prepared tO give the fullest information about the state of the economy of the Province . MR. CHAIRMAN: order . · DR. COLLINS: Well , there is obviously no point of The hon. the Minister of Finance . ~ .

Chairman, again, just perhaps to save time in the committee and to give a brief rundown on these ones that probably will not excite much 4 '12 3

--~----------------------- ----------------~~~~~~.~~~-- May 12, 1981 Tape 1481 EC - 1 DR. COLLINS: comment, e he increase there was mainly due to the fact that the borrowings last year which took place part way through the year - of course, now the interest charges on those will be for the full year. These are offset, of course, by some savings related to loans that matured through the year. There were also revenues related to provincial interest sources and these are estimated at nearly $10 million, and that was because of substantial increase in income from very short-term investments.

Also for the first time, the Province will receive a dividend from NIDC. I might just very briefly put that in context there. The loans to NIDC are interest-free, that is loans from Province to NIDC. NIDC actually does charge :: interest when it makes these funds available to companies and then when the companies repay, therefore they pay not only principal but interest, so NIDC therefore makes income. And this is the first time that we have had that income come in as a dividend. Head 102 relates to debt management expenses and there is an increase o£ $1 million over last year.

We expect this year to have to go to the markets in the United States as well as in Europe and Canada. We went to Europe and Canada last year, we expect to go to the United States this year also. So that is the reason why there is an increased allocation under that heading. With regard to pensions and gratuities, han. members remember that last year , legislation was passed setting up the provincial fund to accept the payments in by those employed in the public service and also the matching amounts by the provincial government.

It is estimated . that this year, government will be paying into that fund just over $16 million. On an interim basis the fund is being administered by Royal Trust and, of course, they invest these funds so we do get some income from their 41 2 4

---- ----------- ---~--------~---------- May- 12, 1981 Tape 1481 EC - 2 DR. COLLINS: investment of those funds too. That is a very interim measure, because we are actively looking into the way in which the fund should be administered on a permanent basis. So that is a very interim measure . I think those are the main points that come out of that.

Perhaps I could very briefly - this may come up again and I will be glad to answer further questions - just very briefly remind members of the Committee that our borrowing requirements this year will amount to - in total really, all borrowings will amount to about $410 million. MR. NEARY: 410 million? DR. COLLINS: Ye s, that is $260 million for the Province, of which $146 is for budgetary requirements and then there will be $112 million for redemption , 4125

- .. .,, ... ~----~---·--------- ~'~--_.--~:~~~~- ~-~~~ May 11, 1981 Tape No. 1482 DW - 1 DR. J. COLLINS: that is redemption of other ~reviously incurred debt and $28 million,approximatel~ for sinking fund purposes. In addition to the provin- cial borrowings,there will be a necessity to borrow $125 million under Hydro and $25 million for NMFC - NMFC, of course, is to assist municipalities through- out MR. DR. MR. DR. the Province. . - ~--.-~--·- STIRLING: J. COLLINS: STIRLING: J. COLLINS: How much did you say that one was? $25 million for NMFC. And $125 was for - For Hydro.

We will expect -to · ·borroW._.:Ul_ round figures, perhaps $10 o. million from the Albe.rta - Heritage Fund, $47 million, something of that order, from the Canada Pension Plan and the rest will come from the v arious public markets in Canada, the United States and in Europe. MR. L. STIRLING: Do you mind repeating that? I did not hear. DR. J. COLLINS: From Heritage approximately $100 million, from Canada Pension Pla,n something very close to $50 million.

That is an amount that is made available to us, \'ie get an indication from some federal sources as to the amount that will be available to us so that we expect it to be something in the vicinity of $50 million, perhaps a little bit less 1 and then the rest will be from capital markets. So with those few remarks, Mr. Speaker, I move the adoption of these Estimates. MR. CHAIRMAN (Butt) : The hon. the Leader of the Opposition. MR. L. STIRLING : Mr. Chairman,I would like to ask the minister if he would indicate where we borrowed the money last year and what was the effective rate of interest that we were paying.

As I understood it,we borrowed some from Alberta but that we went into the European market, And- althou g h 41 2 6 '.

May 12, 1981 Tape No. 1482 ow - 2 MR. L. STIRLING: we have heard from the minister, ~he has said that our credit rating was not considered by the American rating houses because we have not had to use the American funds,· in actual fact, as I understand it,the European borrowing was in U.S. funds. I would like to aak the minister if he would tell us what the effective rate of interest is that we are paying on our borrowings? So, last year what did we borrow and what was the effective rate of interest? MR. CHAIRMAN (Butt): The hon. the Minister of Finance. DR. J.

COLLINS: If he might have any other comments - any other questions, perhaps I could answer a number of them. MR. L. STIRLING: I would prefer that we answer the question because I may have some others as a result of the answer. DR. J. COLLINS: Mr. Chairman, in Europe we borrowed- as the hon. Leader of the Opposition (Mr. Stirling) mentioned -we borrowed in Eurodollars, Euro - U.S. dollars. We borrowed a total of $60 billion which is equivalent to $71 million Canadian and the rate there was 13.5 per cent.

Now, I would have to check to see what was the discount there because there was, as there. always is in a placement like that, a certain amount of discount below par value. So even though the ·coupon is 13.5 per cent,in actual fact the interest rate is a bit higher. I will just have to check and see what the discount was. I will get that information a little bit later, whilst the Comittee are sitting. MR. CHAIRMAN: The han. Leader of the Opposition. 4 1 2 7 ;,

May 12, 1981 Tape No. 1482 DW - 3 MR. L. STIRLING: In dealing with the pens~ons - and I hope th·at we can get that information .back before we mov·e from this subhead - in dealing with the pensions as I understand from the Minister of Finance (Dr. Collins) , he has mentioned that this year they are going to start funding .

I would l i ke to as~ !'l.im, when he gives h~s answers, if he 111ouJ.d tell us what the recommendation has been for the fund~ng and will he tell us whether or not ·there is enough money in that contribution that we are n0111 making to adequately fund the pensions Qf the Public Service and the teachers? Can he tell us if there is, in effect, an interim CQmmittee that is managing that money,or has it jus-t been turned over .by the government to the Royal Trust? What kind of control does the Co~ttee have? 4128

May 12, 1981 Tape No. 1483 NM - 1 MR. STIRLING : What kind of control would the provincial employee~- what kind of input do the provincial employees have? Because after all,they have a vested interest in this pension fund. They have paid in their share. The government has not paid in its share and it is now starting to pay in its share. Would t 'he Minister of Finance (Dr.

Collins lo when he cri ves us these · - -- . - - ) . answers ,indicate what the actuari.al studY:~ showed_ .is the true li.abili.ty of this Province to all of the people who have been paying into the pension plan~ I understand he said we a·re putting in $1 6 million this year. Does that look , after it and what kind of projecti.on do we have as to how much money should we put in this year in order to make that fund properly fimd-aid the li.abilities of the Province? MR. SPEAKER (Butt) : The han. member for LaPoile. MR. NEAR'(: Mr. Chairman, what happened to the Minister of Finance? I wonder did he collapse?

Is he gone out to look for information? MR. SPEAKER: The Chair has no way of knowing, but I assume that is what it is. MR. NEARY: The custom in this House I did not expect Your Honour to answer me, I am merely posing the question. I know Your Honour can never answer a question that is put to the Chair. If Your Honour wants to volunteer the information I would be glad to have it. But I am asking Your Honour, what happened to the Mini.ster of Finance? Did he collapse? Did my han. friend, the Leader of the Opposi.tion (Mr. Stirling). fri.gh.ten hi.m ? Is he scared? Why d'id he leave the House?

Is he gone out to get some informati.on for the han. Minister of Finance? 4 1 2 9 ·. '·

------------------------------------------------- --------------------~----~--~-=~~~~ May 12, 1981 Tape No. 1483 NM - 2 MR. NEARY: Mr.

Chairman, it is customary in this Kouse that if the minister is ignorant of the fac~s,if the minister does not know the answers to questions put by members of this House,on either side of the House, if the minister is in the dark as far as the operation of his department is concerned, then it is customary for the hon. gentleman, and we agreed,we agreed to this, to bring his deputy Minister, or to bring some of his officials into the House to sit down beside him-and as we put the_questions to the ministers, we cannot ask the officials questions, but as we put the questions to the ministers the officials can provide the minister with the information and in that way would expedite the work of the Committee.

Now,that is the way it has worked for twenty years - AN HON. MEMBER: (Inaudible) MR. TULK: Do not be so ignorant. ~hat is the way Joey did it. MR . NEARY: - and I would assume, Mr. Chairman, that it would work again. But if the minister is so vain and so proud that he does not want to let the House know that he does not know what is going on in his department, then it is going to delay the proceedings of the Committee because he always has to be jumping up, running out, getting on the phone, or asking his officials out in the Common Room, the answers to questions.

It is far better the minister acknowledge the fact that he does not know - and he has proven that in this House - about the operation of his department, bring the officials in so we can ask some intelligent questions and hope that we can get some intelligent answers. MR. TULK: He probably did not even know that he could bring them in. 4 1 3 0

.. ,.::,.................. . .... Hay 12, 1981 Tape No. 1483 NM - 3 MR. NEARY: Now, Mr. Chairman, my hon. colleague, the Leader of the Opposition (Mr . Stirling ) raised the matter of the public debt and as we knuw, as we have been told, and as has been publicized so often, but I do not think that it bears- it does bear · repeating and I do not think we would be remiss in our respo nsib ilities and our obligation to the people of this Province, to the taxpayers of Newfoundlanders, if we repeated again the amount of the public debt at the end of this fiscal year. It will be $3.2 billion, or $3,200,000,000 .

Now, Mr . C.hai.rman, let me say this about the public debt. The Government of Canada has the highest per capita public debt in North America. The Government of Canada does. M.~. TOLK : In the · Western world. MR. NEARY: In the Western world, probably in the Western world, the hi.ghest per capita debt . 4 1 31 (o

May 12, 1981 Tape No. 1484 PK-1 MR. NEARY: Now, Mr. Chairman, who does Your Honour think is next in line to the wealthy Government of Canada? Who would Your Honour say? Would Your Honour care to take a guess as to who is next in line to the Government of Canada which has the highest per capita public debt in the whole of North America? Who is next in line? MR. TULK: Let me guess. MR. STIRLING: Panama. MR. TULK: Let me guess. MR. NEARY: Ah, no. Mr .. Beaubellamight be, I do not know. Maybe Mr. Beaubella of Tyler Mining might be next in line. No, Mr.

Chairman, Newfoundland and Labrador is next to the Government of Canada. We have the second highest per capita debt in the whole of this hemisphere. Now, Mr. Chairman, that would not be so bad if we had the tax base to support that public debt, but we do not have the tax base. And I am becoming increasingly concerned from what I can hear from the bond markets, I am becoming increasingly concerned about the public debt of this Province.

Over in Nova Scotia there, as I said in the House a short while ago, the members of the Legislature in Nova Scotia are concerned because their public debt is approaching $1 billion. They are concerned They think the province is going to be bankrupt. But here in Newfoundland we are up now to $3.2 billion. And the minister just told us there a few moments ago that our borrowing this year is not going to be $200 million as he indicated when we were debating other matters in this House, not going to be $200 4 1 3 2 .... -: .....

. . , ~ ~-----...:.. ..._, __ ~ ... ---· ~~~-------- May 12, 1981 Tape 1484 PK - 2 MR. NEARY: million, but the borrowing this year by the Department of Finance, by the Newfoundland Hydro Corporation, by the Municipal Corporation, and by various other government corporations, the total borrowing will be upwards of $400 million, upwards of $400 million. That is the first time we had that figure thrown on the floor of the House. What was the figure used, $400 and what million? $400 and how much? AN HON. MEMBER: $10 million. MR.

NEARY: $410 million will be borrowed this year in a market that is unstable, I c ould use the phrase that the Premier used yesterday, that was kind of contradictory. When he was referring to the Minister of DREE (Mr. De Bane) he said he was static and unstable. AN HON. MEMBER: Yes. MR. NEAPV · Static and unstable. DR. COLLINS: Erratic : and unst a ble. ---~ MR. NEARY: The bond market is erratic at the moment,to say the least . And I would submit . to you, Mr. Chairman, that it is going to cost us an arm and a leg to borrow that $410 million this year.

The minister told us we managed to get away with 13.25 per cent, I believe, when we last borrowed in Europe. MR. STIRLING: That has gone up since then, it is much higher than that . MR. NEARY: Well 1 I suspected at the time he gave me the answer it was much ·higher than that. But this year it is going to ' be much higher again, and we will be lucky in this Province if we can get money for 17 per cent or 18 per cent interest. 4 1 3 3 .-.,. .

May 12, 1981 Tape 1484 PX - 3 MR. NEARl{: The Government of Canada on its borrowing last week or the week before last ,paid over 16 per cent on their bonds. MR. TULK: ~6.25 per cent. MR. NEARY: 16.25. This Province this year will pay about 17 per cent or 18 per cent. MR. WHITE: You can get it from GMAC for 14 per cent. MR. NEARY: Mr. Chairman that is frightening. That is fri~htening. I am not saying the government is bankrupt, but I would say we are headed for financial disaster in this Province.

As members know1 the investors are no longer getting themselves involved in long-term bonds 1 they want a quick turn over. They want to roll over their bonds now in a year or possibly the outside of three years . Six months or a year is what they are looking for, six months or a year. They have been bitten and scald 4 1 3 4

May 12, 1981 T~pe No. 1485 SD - 1 MR. NEARY: and burnt too often on long-term financing and loaning money for long periods of time 1 now they want to roll over their money in six months or a year. And that is going to make it very difficult for this Province, Mr. Chairman, because $263 million that the government will borrow,out of $410 million,will be from private investors, $100 million will come from Alberta and they will soon own us body and soul. No wonder the provincial government is supporting Mr.

Lougheed in trying to get oil up to world prices, they practically own us now body and soul~ Another $100 million this year from Alberta, $47 million from the Canada Pension Plan and $263 million from private investors who are reluctant to become involved in long-term bonds, they want to make quick money, fast money. And so I do not know what that is going to do to the borrowing of this Province or what it is going to do for the interest rate. So, Mr. Chairman, these are the matters that the Minister of Finance (Dr. Collins) should address himself to, these are the matters.

This is the most important and crucial matter to be raised in this House in this session, the public debt. I asked the minister a question some time ago and he told me that I did not know what I was talking about when I claimed that this Province was now borrowing money, paying interest on that borrowing - DR. COLLINS: Yes, you did not know what you were talking about. MR. NEARY: - to pay off the interest on money that was borrowed previously. And the minister almost . confirmed that for me there a few moments ago. Once you reach that stage MR.

COLLINS: No, I confirmed that you did not know what you were talking about. MR. NEARY: The minister almost confirmed 4 1 3 5

May 12, 1981 Tape No. 1485 SD - 2 MR. NEARY: it for me when he t_old us we have to borrow $410 million this year. Some of that money will go towards paying the interest on money borrowed previously by the government. DR. COLLINS: No, interest comes out of current account, the surplus on current account. MR. NEARY: Oh, interest comes out of current accounts, oh, just imagine. How much are we borrowing this year , $410 million? DR. COLLINS: The Province, Hydro and NMFC are borrowing that total amount. MR. NEARY: I see. MR. CHAIRMAN (Butt) : Order, please! The hon. member's time is up. MR.

NEARY: Well,if I can have somebody give me a break, I will go back at it again, Mr. Chairman. MR. CHAIRMAN: The hon. Minister of Finance. DR. COLLINS: Mr. Chairman, I am going to answer a sensible question first and then I will get onto the other ones. The sensible question was asked by the hon. the Leader of the Opposition (Mr. Stirling}. He wanted some precise information,which I did not have readily at hand nor would it have occurred to me to have it readily at hand,but if he wanted the precise information I wanted to get it for him and that is why I left the House temporarily.

And I have someone sitting in the Common Room outside, near a phone for that specific purpose,to get precise information that might come unexpec~dly. Now,the precise information that the hon. Leader of th.e Opposition wanted w-as related to the exact discount rate on our borrowing in Europe. And that discount rate was ninty-nine as opposed to the par value of 100. So that meant that the coupon rate on the $60 million US 4 1 3 6 . ~ ..

.. - May 12, 1981 Tape No. 1485 so - 3 DR. COLLINS: or $71 Canadian was 13.5 per cent.· It actually worked out, when you take into consideration that discount rate, at an interest rate of 13.72 per cent. And that was the precise information that I went out to get and I hope the Leader of the Opposition (Mr. Stirling)-- it was a perfectly good question, I am not certain what he wants to do with it, but, anyway,. I hope that he is happy with that- 13.72 per cent,' to two decimal places,was the interest we paid. Now, I would like to answer the hon. member for LaPoile (Mr.

Neary) and I am going to say this very slowly now: Our capital account 'for which we borrow, for which the Province has just about always borrowed . . to my knowledge -my personal knowledge does not reach back all that far but I have been informed that we practically always borrow for capital account- that is to build things like hospitals and so on and so forth and capital construction of roads and so on and so forth, our capital account this year will be $156.5 million. Now1 we do not borrow all that amount because we have a surplus on our current account, we have a surplus this year of $10.5 million. Now, Mr.

Chairman, I am going to make a point here and I think it is an important point. We compare ourselves frequently with the Maritime provinces; I will not compare ourselves· with PEI because the difference in population and difference in economy are too wide, so it is not much point in comparing 41 3 7 .~f

May 12, 1981 Tape No. 1486 EL - l DR. COLLINS: ourselves there. So let us compare ourselves with Nova Scotia. In Nova Scotia, on their current account, they have a deficit of $14Qmillion. Now, in Newfoundland, we have a surplus of $10.5. In Nova Scotia, they nave a current deficit of $140 million. Even Ln New Brunswick, who seem to have a better handle on things at tills point in time, they have a current account deficit of $10 million.

So, in Newfoundland, we have not done too badly Now, what we do with that "$10.5 million surplus on current account, we apply tfiat against our capital account which therefore reduces our net capital requirements to $146 million. So that is what tne Province is actually borrowing this year for capital account expenditures. Now, if tne han. members wish us not to borrow that they had better vote in tfiat way because then they will be voting against building clinics and building hospitals and building bridges and building roads and various matters like that.

Now, if they want to vote that way, that is their democratic right. So, we are borrowing for actual cap­ ital construction this year, $146 million. Now, in addition to that we roll over some past debts. we redeem some past debt and this year we are going to redeem $84.5 million. This is debt that was contracted, oh, up to twenty years ago, perhaps. And we are going to redeem some of that. That is going to cost us $84.5 million. MR. DINN: (Inaudible) and rubber factories and stuff like that. DR. COLLINS: Rubber factories, chocolate factories, you name it.

In addition to that, we set aside a certain amount of money in sinking funds which will accumulate over the years and help us redeem debt further down the road. And this year we are setting aside, and therefore have to borrow, $28.5 million. So the total borrowing for the Province, for the 41 3 8 i

May 12, 1981 Tape No. 1486 EL - 2 DR. COLLINS: Province itself, works out at $259 million. Now, in addition to that, this is where the figure I gave of $410 million comes from, in addition to that, Newfoundland Hydro, which is an agency of government but is not the direct provincial borrowing situation, it is an agency of government, a fairly independent agency of government and that is the way utilities are set up, so Newfoundland Hydro for its capital ' works will borrow $125 million.} MR. NEARY: What for? DR. COLLINS: For capital works. MR. NEARY : What.is it you are going to get? DR.

COLLINS: Well, you heard one capital works today from the hon. Minister of Mines and Energy (Mr. Barry). MR. MOORES: You are not borrowing on that (.inaudibl:e) . DR. COLLINS: And I am just checking my figures here now to make sure. Yes, and the Newfoundland Municipal Financing Corporation will borrow $25 million. That is for water and sewer and other works that are important to the development of our municipalities. What happens is that a municipality will want to put in a public work and they will go to the bank and they will borrow money from the bank but,of course, they borrow at fairly high bank rates.

What the government then does is it borrows on the long-term market where we can get a much better rate and we replace the municipalities bank debt with this long- term funding which is of benefit to the municipalities and that is why we are into NNFC borrowing. So, I think that should make it fairly clear. So, you know, we have a very responsible borr- owing programme in front of us. I wish it was smaller, but who would not? But, in view of the services we have to put in - we are much behind other provinces, even in the Maritimes, in our public services, especially in the capital public services.

And we want to catch up and we are catching up to the best of our 4 1 3 9

May 12, 1981 Tape No. 148_6 EL - 3 DR. COLLINS: ability. It is a slow business out we have to catch up or we would not be serving our people as we sli.ould be so we are catching up. We are borrowing in order to eaten up. Now, I would like to just make a few comments about the public sector debt wnich the lion. member for LaPoile (Mr. Neary) brings up time and tune again. rt is li.igli, tli.ere is no doubt it, and it has accumu~ated over the years for the very reasons that I mentioned t .nere.

We had to catch up and if you - I used this figure in . comm~ttee ~n another context when we were discussing the Estimates, Department of Finance. I think the hon. member for LaPo~le mentioned that in 1971, that $700 million was the debt of the Province, the direct 4 1 4 0

-. - May 12, 1981 Tape 1487 EC - 1 DR. COLLINS: debt of the Province. Now, I think it was more than tha.t in actual fact. I meant to check it out; but I think it was more than that, I think it was nearer to $1 billion. I think it was more than $700 million.

Anyway, even if you take $700 million and you discount that at only 10 per cent- now, the inflation rate at the present time is higher than that, but if you only take a 10 per cent discount rate and you .discount it over the last ten years that have elapsed since 1971, that $700 million is equivalent to $1.8 billion, so that in actual fact, when you talk about $700 million debt in 1971 you are equating that with a $1.8 billion debt in 1981.

Now, that is borne out by this fact: If you take our total public sector debt, that is, the direct debt of the Province and our guaranteed debt, in 1977 that amount was $2.245 billion -in 1977 our total public sector debt. Now,that debt has been increasing since that time, and as the hon. the member for LaPoile (Mr. Neary) pointed out, it is now up to something in the order of $3.2 billion including this year, 1981 - 1982. Now that,in actual fact, is an increase of the order of 6.5 per cent to 7 per cent.

In actual fact, the order of increase from 1977 to 1978 was 7.1 per cent; from 1978 to 1979 it was 7.6 per cent; from 1979 to 1980 it was 6 per cent; from 1980 to 1981 it was 6.6 per cent. In other words, our public sector debt has been increasing at considerably less than the inflation rate. MR. DINN: Hear, hear! DR. COLLINS: In other words, we are getting on top of our public sector debt. SOME- HON. MEMBERS: Hear, hear! DR. COLLTNS: If your public sector debt is increasing at a lesser rate than the dollar is declining in value, you are getting on top of your debt. SOME HON. MEMBERS : Oh, oh! 4 1 4 1

May 12, 1981 Tape 1487 EC - 2 DR. COLLINS: Now, just those points. I think,they are worth making and any other points that will come up I will certainly do my very best to answer them. MR. MARSHALL: before 19- DR. COLLINS: MR. MARSHALL: MR. NEARY: MR. CHAIRMAN MR. NEARY: underneath me (Butt): here. Did interest. stop on the debt No, it did not. Oh, amazing~ Amazing~ Mr. Chairman. The hon. the member for LaPoile. Mr. Chairman, if I can get my legs The Minister of Finance (Dr.Collins) really opened up a can of worms now, Sir.

I do not know what convoluted logic he was using when he was calculating the rate of inflation on $700 million, which was the public debt ten years ago,back in 1972. I do not know what formula he used to arrive at the conclusion that all that happened was that the public debt went up less than the rate of interest for these years. That is what the hon. gentleman is saying, 5 per cent or 6 per cent in 1978, 6 per cent or 7 per cent in 1979, etc. The actual fact of the matter is, Mr. Chairman, that the public debt since 1972 has gone up by almost 365 per cent. MR. MOORES : That is right. MR.

NEARY: The public debt has more than tripled in less than ten years. That is the fact of the matter, that is the · public record, that cannot be denied. Now, Mr. Chairman, what drove up the public debt? The minister opened up the can of worms, I did not. Well, I wili give the minister a couple of examples of what drove the public debt up that you cannot attribute to inflation? Number one, the government back in 1974 set off two explosions on either side of the Strait of Belle Isle to officially start the development of the Lower Churchill. Now, we had a statement in this House 4 1 4 2

. ~ May- 12, 1981 Tape 1487 EC - 3 MR. NEARY: today by the Minister of Mine·s and Energy (Mr. Barry). Six years later the Minister of Mines tel~s us that the Lower , Churchill in all probability will not start for several yea,rs down the road. But, Mr. Chairman, h<:>w stunned do they think we are in this Province? How stupid do they think we are? Why, even a kindergarten student knows that back in 1974, Mr. Moores, who was then the Premier of t 'his Province, 4143

May 12, l98l, Tape l488 1 , Page . l -- apb MR. NEARY: went down to St, Baroe, pushed a plunger, set off an explosion on this Side of the Strait of Belle Isle and then got aboard a !ie:licopter, went across to the other side, se.t off anot.!:ie.l:' explos-.i:on to officially commence the development of the Lower Churchill. And, of course, after the election was over in 1975, the project was forgotten and cancelled. But what was the cost, Mr. Chairman, what was the cost? $2lQ million, That is what these two little . explosions- cost the taxpayers of this Province, $2l0 million. Now, that is only one. item.

Let me take another item, Labrador Linerboard in Stephenville, a private enterprise venture, priva .te enterprise. What happened there? Well, Messrs Croso£e and couple of more bully boys in this House who could not get any contracts wit~ Canadian Javelin, who could not suck in, who could not sell the equipment, who could not get the contracts, who could not get their payoffs- ., decided that we could not, the government could not leave . that in the hands of Canadian !

Javelin, which. was a Canadian company, they decided to national.i:ze it and took. the private company off the . hook., and it ended up in the hands of Abitibi - Price $550 million later, $550 million of taxpayers' money ploughed into that project, ploughed into it, and then they gave it away at the end to Ahitihi~ Price as a gift. And the gentleman who did the repo:i::t. :recently at the university, tells: us that they may operate . it and they may not, they may just use . it for a tax write-off. That is. $550. million plus $ 2l0 milli.on ~ how much is that so far? MR. TULK: $760 mi.lli.on. MR.

NEARY: $760 mi.llion that had to be borrowed. Is that inflation? 4144 r;

May 12, 1981, Tape l488, Page 2 -- apb MR. NEARY: Now let us talk about the Churchill Falls takeover, ChurchLll Falls. Messrs CrosbLe and his little gang of bullies at the time decided th:at they would nationalize the. Churchill Falls Corporation. How much did that cost the taxpayers, that little folly; . How much did that charade cost? And the argument they used at the time - listen to this .just in case. they tliink that we have bad memories in thi:s Province ~ what was the excuse they used?

The excuse they used for nati.onalLzing the Churchill Falls Corporation was because they had to get control of the rights to the Lower Churchill, to the Muskrat Falls, they flad to· get the.se . ri.ghts back in order to develop th.e. Lower Churchill. Now, how long ago was that? That was ei.ght years ago. Has something happened? Have I been sleeping for the last ei:ght or nine years:? Haa the. development of the. Lower Church.i..ll gone ahead; Has the. development of the Muskrat Falls gone ahead? SOME HON. MEMBERS: No. MR. NEARY: No?

But i.t was urgent at the time, they had to nati.onali.ze the Churchill Falls Corporation in order to get it. back. to develop the Lower Churchill. It is not developed yet. HOw much did that cost? I believe it i.s in the vicinity - write them down, will you. Write these fi.gures down somebody. $2l0 milli.on for setting off the explosions, $550 . for nati:onalizi.ng Labrador Linerboard and then giving it away, S350 mi.llLon for Churchill Falls whi.c~ is: really, Mr. Chairman, a very conservati.ve figure, I think. it is much hi.gher tfian that. Now, add that · up and see how much it is. MR.

NEARY: That i.s $~ 1 llO,O. OO,.QOO added to our provincial debt that was not caused by inflation. Now add the interest on to that. Add 13.5 per cent interest on to that for the last · eight years. Mr. Chai.rman, there are the real reasons for the. increas ·e. in the. publi.c delit, right there, and I only .menti.oned three items. r could go on and 4 1 4 5

.May.l2, .198.1, Tape.l488, Page.3 -apb MR. NEARY: .me.ntion se.veral otfier items; tne helicopter contract , the rental of AtlantiC Place that we nave not been able. to get to the roots of yet, we have not been anle to ge.t - and r understand, Mr. Chairman, $.1 million has. been spent on re.novati.ons at Atlantic Place wit~ no agreement signed to rent tfie space. My God, I mean, do the.y think we are all cracked in this Province? So three i.te.ms alone, the three. i.te.ms.

I just mentioned, cost ·th.e taxpayers of this Provi.nce, and the money had to oe borrowed a nd interest paid on £t, in principal alone, over ~l billion and probably another ~400 .million or ~soa million i.n i.ntere~t. MR. TULK: You are lookLng at ~l.S billion there . MR. NEARY: ~1 . 5 bill~on !' Tne mi"ni.ste.r must have trua face of a robber's horse to stand up and tell us that th.i.s is brough:t about by in - two minutes ., Mr. Chai..rman . 41 4 6

May 12, 1981 Tape 1489 PK - 1 MR. TULK: Now we know why they have not been able (inaudible} . MR. NEARY:Mr. Chairman,the fact of the matter is that this money was spent,over $1 billion spent, and not a thing to show for it except that they created a monster that is now coming back to eat us. It was a mistake. It was a blunder, a colossal blunder, it was mismanagement, it was poor timing to nationalize the Churchill Falls when they did.

It was a colossal blunder to nationalize the Linerboard as they did and they used the flimsy excuse that has never been proven, that they had to bail it out or it would have failed. Well, why did they not let it fail and then move in and take it over? Why did they not? MR. TULK: Crosbie would not let them. MR. NEARY: Because Mr. Crosbie wanted . and others wanted to get their sticky little fingers on the contracts and on the purchase of equipment,etc. etc. etc. and I will say it anywhere. It has already been said outside of the House.

The Time Has Come To Tell - ·the hon. gentleman should read the Book The Time Has Come To Tell and he will see that it has been said, but there are no libel suits that I heard of. MR. CARTER: Do not be so foolish. It was said by a fool. I do not (inaudible) by fools. MR. NEARY: The first boat that sailed in- as soon as they took her over , the first bills that were paid were bills that were owing to Crosbie's for purchase of equipment­ and the first boat to sail in for a load of Labrador linerboard was the Chesley A. Crosbie. AN HON. MEMBER: Right on! MR. NEARY: These are all matters of public record, Mr.

Chairman. And the trucking; who then took over the trucking? 41 4 7

May 12, 1981 Tape 1489. PK - 2 MR. TULK: The big c was on tfie West Coast everywhere. Who took over the. trucking? Oh, oh! ----·· -· -- ' ~ MR. NEARY: · The: Time H?as-· Cotne' To' Tell did not tell it all. Some day that story wi.ll oe told. AN HON. MEMBER: Your time is up. MR. NEARY: Well 1 my time is up and if I get a break I will be back at it again, Mr. Chairman. MR. CHAIRMAN (Mr. Butt): The hon. Minister of Finance. DR. COLLINS: Mr. Chairman, I really should not d·o this because it makes me worse than the hon. memJjer for LaPoile (Mr. Neary), really, but I just cannot prevent myself from doing it.

Now,let us go ' over these figures. The hon. member for LaPoile says that the previous administration borrowed $210 million for the Belle Isle crossing - all right? - then borrowed $550 million for Labrador Linerboard, then borrowed $350 million for CFLCo, . $1.11 billion. Then, . \ .;... --- - - he said, add to that for eight years 1 interest at.- 13 per · cent. That works out -13 per cent on that works out to $144.3 million multipliedby eight years it works out at $1,159,500,000 interest, -=---- - add that to the $1.1 billion, you end up with a direct provincial debt of $2,264 1 500,000. Mr.

Chairman, the total provinical direct debt at the end of March 1981 was only $1.732 million. So according to the ' ~ hon. member' s calculations, we borrowed more than we now owe or we did not· borrow for anything else but those two projects. Now, as I say, I am