Volume 1 PROVINCE OF NEWFOUNDLAND THIRTY-SEVENTH GENERAL ASSEMBLY OF NEWFOUNDLAND 1st. Session VERBATIM REPORT MONDAY, APRIL 5, 1976 SPEAKER; THE HONOURABLE GERALD RYAN OTTENHEIMER Number 44

Anril 5, 1976, Tape 1740, Page 1 -- apb The House met at 2:00 p.m. Mr. Speaker in the Chair. }ffi. SPEAKER: Order, please! PRIVILEGE 'fR • SPEAKF.R: The hon. the House Leader. MR. WELLS: Mr. Speaker, as Your Honour was not here last week because of the flu, perhaps I should review htiefly the time sequence to Your flonour so that Your Honour will be aware of what h'ls happened. nn Tuesday afternoon or evening - both actually, Sir, certainly on Tuesday - of this past week, the bon. the member for La~oile (Mr.

Peary), in making some remarks on the Interim Supnly, made allegations with respect to me, my associates in the practice of law, my wife and their wives. At the tiMe, ~r. Speaker, I can only say that I was stunned. I could not believe that this was happening. I do not know how I reacted or what I said. I know I made some remarks in the evening '!bout matters, likewise on Wednesday, but on Thursday I gave notice that J would raise a point of personal -privilege in this House. Nm• at that time, of course, the transcripts of what had actually been said on Tuesday were not yet ready.

The transcripts tvere finally - obviously it is quite a thick thing - made available to me and sent to m~r office on Friday afternoon when the House, of course, had closed. So that having reviewed the transcripts and, of course, having now had the onportunity to assess the 'whole affair, ~fr ~ Sneaker, as I say I run now at the first real onportunity risin~ to my feet to clear up this whole matter and reply to the allegations which were made against me, mv associates and my family. The gist of the allegations were, Mr.

Speaker, that there are businesses known as mortgage brokers operating here in Newfoundland and that have been operating for a cou-ple of years or •~hatever, and that these mortgage brokers charp,e unconscionable and outrageous finders fees, fees, charges of all kinds which were called by the memher in spe.akinp:, rip-offs, they were called white t&Jl

April 5, lq7~, Tane 1740, Page 2 -- apb "'ffi. IVF.Ll.S: collar crime, t~ey were called -well, the transcript is available to Your Honour. But every sort of allep;ation, P.Ven of frauc! - although thP. member said he thoup,ht it was fraud, it looked fraudulent to him some of the things that these mortgages brokerage companies did, I think every member in the House Hho was present at that time will remember these allegations. They took plenty of time, you know, it was a long debate. It 'Jas not a two minute thing.

Now, the hon. member gave illustrations or listed five companies •1hich he said were mortgage brokers. I forget the names of them. One was LeBarron, one was Continental, There Here other people mentioned. MR. NEARY: MR. viELLS: >.fR. NRARY: "TR. WELLS: anyway - HJL NEARY: Beacon. Beacon. There were others. 1i1helans. 'tolhelans. I do not lmow these people, hut Maritime Investments. MR. WELLS: That is the one. Now, the hon. gentleman - I make this clear, that I have the floor and I am replying to most serious char?,es made against me, Mr. Speaker, and I expect to be able to do so in silence. MR. NEARY: HR.

SPEAKER: ~m. 1-IELLS: I am only refreshing the hon. member's memory. Order, please! }To refreshment is necessary, 1~r, Speaker, and I wmt to mnke that noint very clear at the outset, After the list of four others,or five, whatever it was was mentioned, added to is as a mortgage broker was Maritime Investments Limited. ~~aritime Investments Limited, the hon. member said,was owned hy Molly lvells,wife of 'Robert Hells; Barbara O'Dea,wife of Prank O'Dea; Yvonne Ralley,wife of Raymond Halley or Ray Halley,and that the three of us,which is ~uite correct, were associated in the practice of law. Now that is correct.

But there was one fundamental and clear error there, Hr. Speaker, and that is, that Maritime Tnvestments Limited was not, is not,and has never been a mortgage 4672

April 5, 1976, Tape 1740, Page 3 -- apb MR. WELLS: broker. I will tell the Rouse- and, you know, when this sort of thing happens it takes a while t;o recover from the shock of hearing charges of this sort laid against one and ones family, Mr. Speaker-· but Maritime Investments is a small conwany that was incorporated, if I remember correctly, by me and my two law partners about the end of 1972 or early tn 1973.

It was incotporated,three equal shares,and the objective of it, which ~st small companies of this sor~ that are operated by law offices, was to be able to give an additional service to one~ clients by providing sometimes monies to le~. MR. NEARY: All this free. MR. WELLS: There is no need for the hon. gentleman - I made the point before, Mr. Speaker, that I will not permit interruptions. I have a right in this House to be heard in silence. It was incorporated for the ~urpose of entering into commercial transactions.

That was the real wish and desire of the people who incorporated it ~namely, me and my two partners, to do. I think in the year 1973 we may have lent three of four small mortgages. Maybe only one or two. I cannot remember. But we did enter into commercial traDSactions, commercial mortgages, and that was the main eoncera of us who were the principals of the company. .(:673 '·

April 5, 1976 Tape 1741 PK- 1 HR. HELLS: About a year and a half ago we decided after discussion with our respective wives, and they decided,teally,that they would buy the company from us and the value of the shares was evaluated by our chartered accountants, H. R. Doane and Company, and there is no need for me to tell the House this, but .I will, we each sold our shares to our wives for the evaluation that was arrived at by the chartered accountants of $1,700, and the shares were transferred and the company has been theirs every since. Now this company, Mr. Speaker, is not a mortgage broker.

It has never been a mortgage broker. It has never ever brokered a mortgage, and by brokering a mortgage I mean going out and finding people and bringing them to someone else and saying; · here 1I have now found a mortgage for you, and I want a fee for finding that mortgage." Not one. Never. It was never intended by Haritime that it should be this sort of company, and it was not. Now there are mortgage brokers in St. John's,and the han. member has mentioned the names of some of them. What they did or what they did not do is of no concern to me~or my wife,or Maritime Investment.

They· do what they like and they answer to whomever they are answerable. But I am speaking about my wife, my family, my associates, and our company. Now I will say something else,because the law partnership of Hells, O'Dea and Halley was referred to, and there was much talk about lawyers fronting for brokers, and brokers fronting for lawyers and all this sort of thing. And I 1o1ant to make something else very clear and on the record, that Wells, O'Dea and Halley has never invested in any brokerage company, no brokerage company has fronted for Wells, O'Dea and Halley in any way, shape or form.

There has been no financial involvement one with the other. So to deal with Maritime Investment, in the year 1973, as I say,there were one or t"o mortgages. In the year 1974, I believe, there might have been as high as four or five mortgages. And when 4674

April 5, 1976 Tape 1741 PK - 2 Mr. Wells: we talk about the volume of mortgages in this city and in this Province,! would like to mention some comparative statistics without reading out the names of the public companies,national companies that are involved, but I want to give the House some idea, Mr. Sfeaker, of how tiny Maritime Investment was in this what you might call second mortgage or first mortgage field. I am not even going to deal with the trust companies they let hundreds of mortgages in Newfoundland every year. Five I have listed here of the big, what are called, finance companies.

And I have a list here, and I will not read their names, I want no embarrassment to people who are doing legitimate proper business which is their right to do in Newfoundland. But one I see here for the year 1974-1975 from the Registry of Deeds,362 mortgages, another 281 mortgages, another 380 mortgages, another 540 mortgages, another 479 mortgages, and so we go. But all right,one might say, that is the big national finance companies in their mortgage business.

And by the way these finance companies charge fees_or not fees,rather, but interest rates, and this is their right, anywhere from 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, or 24 per cent which they are allowed to by Canadian Law. But if anyone says, look these are a different deal, these are regulated by the Federal Government, you know, we are not concerned with them, we are concerned with the smaller company. Then I have examined four or five other companies which are the same sort of companies operated by lwwyers or their associates in St. John's, and I will not mention their names either.

There is no reason why their names should be dragged into this House of Assembly. But for these two years, sixty-seven mortgages, one hundred and six mortgages, twelve mortgages, ninety-seven mortgages, one hundred and one mortgage, sixty-four mortgages. Now let us look at Maritime. How many mortgages in these two great halcyon years, how many residential mortgages1 And I am not speaking of commerical transactions, There were commerical transactions,which is the right of this company to make. 4675

April 5, 1976 Tape 1741 PK- 3 ~1 r. Hells: All of its commerical transactions practically were with companies far larger than itself, and no one is suggesting that they need protection of this House or anybody. But of 4676

April 5, 1976 Tape 1742 IB-1 MR. HELLS: residential mort~ages in these two years, how many of Maritime? Thirty-one, ~r. Speaker, thirty-one residential-mortgages. I am going to say something to the press too who are here reporting this. I would ask the press to pay particular attention to what I am going to s11y about the activit:! .es of .,...aritime. Now I do not blame the press ever for reporting[what is said in this House. It is not only their right to report it~ ~r. Speaker, it is their duty to report it.

I But the result of that r:!.ght and duty was that on Wednesday morning last when I - I did not have to open The Daily News - on the front page of The naily News was my name, my partners names, the names of their wives, all listed,and the report of this House that they we~ white-collar criminals,or to the effect, rip-off artists and the headline,"Steve Lifts The Lid;' Great stuff, t-!r. Speaker, but as I say I am not blaming them for reporting it. That is their duty. But I would ask them something.

I would ask them to give front page to what I say today,because my good name and that of my family and my associates has obviously had to be impaired in this Province wherever the papers and the radio went. I ask them to give front page to this that I am saying today also. So there is the relative size of the companies involved, and what does it show, Mr. Speaker? It shows that in terms of residential mortgage, Maritime Investments Limited is among the tiny ones. This company which was called a broker, called a rip-off artist and the people in it, the tiniest and not a broker at all.

Now, who are the people in it? Let us get this out, Mr. Speaker. The people in it are the wife of Robert Wells, Molly Wells,who is an ordinary housewife who has lived as my wife in this community now for about eighteen years and as far as I know has wronged no one. That is one name. The other names are Frank O'Dea, son of Mike O'Dea from the Southern Shore, graduate of the University of Dalhousie in law, an athlete 0 and a decent, honourable person who has practiced law now for nearly ten years in this Province; his wife,Barbara O'~ea. 4o77

April 5, 1976 Tape 1742 IB-2 MR. WELLS: Her father is John Flynn from Old Petty Harbour Road, one of the most respected families in the whoJ.e West end of St. John's, a graduate of university, a schoolteacher for the Roman Catholic Board of Education here in St. John's with a decant, honourable life in every respect. But not last week. Last week she was part of white-collar crime, a rip-off artist, Mr. Speaker. :MR. NEARY: The minister is saying that - MR. WELLS: The minister wants no interruptions from that source, Yr. Speaker. HR . NEARY: no not be so cowardly, boy. MR. WELLS: The minister will have his say.

MR. NF.AJ'!Y: If you are going to quote me, quote me accurately. ~ m. SPEAI<EF : Order, please! The bon. gentleman has the right to be heard in silence and has specifically stated that he wishes that right to be observed. MR. NEAJlY: I have the right to be quoted correctly too, Your Honour. MR. WELLS: Rip-off artists,I said, rip-off artists. ~ymond J. Halley, son of Raymond Halley who was until his death a few yean! ago the office manager at City Hall, a noted athlete in his time; and Ray Halley and Yvonne Ha1Jey,who is a technician who works part­ time at the St.

Clare's Hospital, decent, honourable members of this community labelled rip-6ff artists. l'fR. NEARY: By whom? AN RON. MEMBER: You. MR. WELLS: By speeches in this House of Assembly. ¥1'. NEARY: By whom! MR. WELLS: Ry the bon. member who lumped everybody together. MR. NEARY: Make a charge. I'!R. WELLS: __ I want no charges. I,fortunately, Mr. Speaker, can deal with what was said outside this House,and we can all deal with it in another arena,and that will be done,too. But everybody was lumped together, white-collar crime, rip-6ff artists.

I sat here and took that the other afternoon and every eye in the House riveted - 4678 ·

April 5, 1976 Tape 1742 IB-3 Do vou tb:lo:k .you are guilt free? MR. NEARY: .JfR • . WEU..S: Mr. S~aker, the hon. member has been instructe .d by you, Sir, to keep quiet while I make my remarks. That is what happened in this House of Assembly which. I felt and do feel, Mr. Speaker, was a terrible abuse of this Rouse. But that is not for me to judge. Now l: want no punishment. I am moving no motion. I do not want to see mybody done anything with. MR. NEARY: No rules have been broken. l<IELLS : Mr. Speaker . MR. SPEAKER: Order,please! ~ . WELLS: That is not the point. The point is to clear the name 4679

April 5, 1976 Tape No. 1743 N}1' - 1 MR. WELLS.: of myself, my family, and my associates and their families before the people of this country and before the members of this House. l'hat those who would cast doubts about, me, my family and associates think I care not, Mr. Speaker, but I want the decent, honourable people of this country and in this House, wherever they sit~to understand the position. Now let us consider what Maritime has done by way of residential mortgages. Maritime and the others were twenty · per-cent straight across the board, Mr. Speaker, twenty per-cent straight across the board.

Well I have had H.R. Doane and Company who are the accountants to Maritime Investment Limited and an international and highly reputable firm of chartered accountants go through every residential mortgage transaction that the company has entered into and here are the results. The total residential mortgages were about thirty-one or thirty-two, at present outstanding on the books are twenty-eight residential mortgages.

Of these cwenty-eight residential mortgages, seven of them no bonus of any kind whatsoever, seven,no bonus. 0f the twenty-eight mortgages,fourteen,bonus eight per cent average, eight per cent average bonus charged on the mortgage.

Three in the area of fifteen to twenty per cent bonus,which were very high risk mortgages,and one at slightly over twenty per cent where there was an incredibly high risk, no equity at all in the property,and the person concerned was a friend of one of the members of our firm '~ho said to him, "Look ,I know and I am prepared to pay this sort of money because there is a high risk and no equity but I want you to do that to help you do it," and it was done on a friendship basis for that person.

Now that is the record, seven mortgages no bonus, fourteen mortgages eight per cent bonus, and then four others of a higher bonus. And what were the interest rates, Mr. Speaker? They varied from a low of twelve per cent to a high of twenty per cent on one only,and the one that had the twenty per cent interest rate had no bonus at all but was interim financing for a person for three 4·680

April 5, 1976 Tape No. 1743 NH- 2 }ffi. WELLS: months, agreed and accepted and understood at three months interim financing at twenty per cent for a total interest payment of $150. And all our rates, the interest rate, as I say~a low of twelve per cent, and ~mritime borrowed this money that it lent out and had to borrow at a rate of about fourteen per cent for the money. So what was happening? What was happening was quite clear, The amount of money or the amount of worth in these silly little mortgages,!£ you like,for Maritime was pretty low.

So there is the mortgage portfolio of this great company that is ripping off Newfoundlanders, white collar crime, the sky is the limit, finders fees the sky is the limit. This is the company, Mr. Speaker. Let us go on further. This company has never charged, I am told by the accountants, any late payment interest on any mortgage that it ever let and went into arrears, never charged anything when a mortgage went into arrears, never. There are some of these mortgages in arrears.

This company has never foreclosed on anyone, never tried to sell under the Conveyancing Act anyone's property,and when a mortgage went into arrears they just let it go in arrears and did not charge anything because of it. But this I think is the most interesting statistic of all, Hr. Speaker, this company that is ripping off Newfoundlanders, the white collar criminals, for the year 1975, its big year, ~~r. Speaker, the year when all the mortgages,I suppose out of the thirty-two or thirty-three total,in 1975 I suppose twenty- five, twenty-six were let, the big year.

The accountants tell me this morning,and they have been working on the statement of the company on residential mortgages over the weekend and finished it one o'clock today, the accountant tells me that of this company for the financial year ending October 1975, the end of October 1975, the approximate income before tax of this company, this rip-off, this great company on residential mortgages, the income on residential mortgages,$2,500. . '4681

April 5, 1976 Tape 1744 PK - 1 Hr. Wells: I would like to see that on the front page, gentlemen in the press. The corporation pays a corporate income tax of 28 per cent, 28 per cent,You deduct the income tax from the $2,500, you have an after tax income $1,800, split between these three ladies who own this company equally,$600 apiece. MR. NEARY: How about the legal fees1 MR. WELLS: The legal fees were legitimate legal fees that went to the law firm that did the work, and there is nobody complaining about them. MR. NEARY: Now tell us about LeBarron? MR. WELLS: LeBarron is another• matter.

LeBarron has nothing to do with me. And, Mr. Speaker, I have warned the han. gentleman, I have a right to be heard in silence, and Your Honour has warned him. Hy wife has nothing to do with LeBa=on, nor any of these views. MR. NEARY: 11R. WELLS: this House. MR. SPEAKER; Your law partner does. Mr. Speaker, this han. member is offending against Order, please! I must point out to the han. gentleman,as he knows, as all han. members know, that every han. member, including the han. gentleman from LaPoile (Mr.

Neary) and obviously all of us, all members have the right to be heard in silence,and certainly when it is explicity,specifically stated that they wish that right to be observed,then every han. member must observe it. The han. Minister without Portfolio. MR. HELLS: There is the story of Maritime Investments Limited as prepared for and given to me by H. R. Doane and Company, one of the most reputable firms of chartered accountants in Canada. Now,as I say,what has been said about me, my family and my associates, fortunately also it was said outside of this Chamber and it can be dealt with in another place.

But I suppose any thinking person, any thinking member of this House when he stops and thinks about it can imagine some of the hurt that has been caused by the things said last week in this House, and that went beyond this Chamber.

April 's, 1976 Mr. Wells: Tape 1744 PK - 2 There is the story as prepared by H. R. Doane of Maritime Investment _ $1,800 after tax income from residential mortgages in their big year. And so, Hr. Speaker, as I say, I ask for no penalty OI' anyone. I simply ask that the activities of this company, my family and my associates, if they are to be dragged into the House, that the truth and the clear picture be known by this House and by the people of Newfoundland. Why this happened, I do not know.

I have my thoughts, one cannot impute motives, but I would say to the members of this llouse,on both sides, think about this. This is something to thing about. Because last week there were savage attacks came to this side of the House, not to all of this side of the House, but to this front bench here, attack on my hon. friend, the Hinister of Mines and Energy and his law partner, Fintan Aylward,a man who sat in this House; attack on the Attorney General, savage attack. What is happening in this House, Mr. Speaker? MR. NEARY: All within the rules. MR. WELLS: What is happening in this House? Rules or no rules!

What is happening in this House? Attacks also on my bon. friend, the Leader of the Opposition. He is a lawyer. He is not practicing. Is that the reason the attacks are being made? Is it because we who happen to be getting the brunt of the attacks are lawyers? I do not think so, Mr. Speaker. I do not know. But I would ask bon. members in this House to give some thought to what is going on. Has it anything to do with three by-elections that are going to be held some time in the future? I,do not know. But members in this House have got to give some thought about what is taking place in this institution.

This is the people's House, and in it are people who are elected to represent their pters, their fellow citizens of this Province. And something, Mr. Speaker, is going seriously wrong. Political attacks are nothing new in Newfoundland. There are members sitting in this House today, and we have all heard them, who have received savage attacks both inside and outside of this House in recent years. Savage attacks on every aspect of their character, their dealinas, 4683

April 5, 1976 Tape 1744 PK - 3 Mr. Wells: everything. And all I say to members of this Rouse, Mr. Speaker , is it :is time that we shed the dark band of the politics of the past and the politics that seems to have come up from Newfoundland ' s history whose major effort seems to be to destroy and discredit people rather than to deal with the issues which this Province needs so greatly to be dealt with. Thank you , Mr. Speaker . SO~ HON. MEMBERS: Rear, hear ! 4684 .. · ..

April 5, 1976, Tape 1745, Page 1 -- apb MR, NEARY: To that point of privilege, }fr. Speaket: . First of all, Sir, I want to say that it is rather unf or tuna te indeed that the gentleman that just took his seat took this whole matter that I was trying to bring out into the light of day, took it as a personal affront to himself and his family . Because, Sir, I would like to remind the han. member, Mr.

Speaker, that when he recorded his conflict of interest statement that is compulsory under the rules of this House last year, or for this past year, he showed Maritime Investments, a company t hat was formerly owned by the han. gentleman - and I have the document here from the Registry office to prove it. It was f ormerly owned by he and his two law partners - that he publicly s ta ted that he had transferred that company to his wife. The mi nist er nods and says, "Yes, that is true." So, Sir, what I was quoting in this han. House, what I was making was a :statement of fact. Mr.

Speaker, the remarks made by the hon. gen t leman - if an hon. member of this House, Sir, quotes another hon . g~ntleman he has to quote that han. gentleman correctly. I submi t to Your Honour that the han. member who just spoke quoted me incorre ctly. I mentioned his firm,and I make no apologies for that, Sir, That is a matter of public record. I mentioned his firm i nci dent ally , and to underline a principle, Sir, and it is completely i r r elevant, Mr. Speaker, the amount of business that that partic ular firm did I in 1973, '74, or '75.

It was the principle of the b o nus in~, charging finder~ fees and other sundry charges that I was zeroing in on. I thouRht I made it quite clear, Mr. Speaker, in this han. House that it was other companies,and not the minist er's company, or the company that the minister was associated with. I said inside and outside of the House that what this company did was not illegal. The minister must remember that. So all the remarks and all the figures that have been dragged out here now, Sir, are merely a red herring. If I hurt the minister's feelings , Sir, well,! am sorry about that. But, Mr.

Speaker, I broke no rules of this hon. House. 4685.

April 5, 1976, Tape 1745, Page 2 -- apb MR. NEARY: The minister and his colleagues and the Leader of the Opposition and his colleagues were in this Hen. House when I spoke for two days. The Chairman of Committees ' who was sitting in the Chair did not bring me to order on one occasion. The minister himself did not bring me to order, neither did any other gentleman in this House stand on a po:l,nt of privilege, whether it was personal privilege or on a point of order. My debate, Sir, was completely within the rules of the House. Mr. Speaker, as I ~ndicated, it was the principle that I was opposed to. And, Mr.

Speaker, in reference to some of the companies, and not the company that the minister is so touchy about, in the case of some of the companies, Sir, I said,and I repeat, that I think that some of the things that they did were criminal. ~. SPEAKER: Order, please! Order, please! I should point out to the hon. gentleman that in speaking now he is not allowed to debate any suhstantive matter which is at issue or on which there might be differences of opinion.

The hon. minister rose on a point of privilege to give an explanation with references to things said about him,and the hon. gentleman in speakin g,presumably,is speaking because he feels what he said may be, may have been, or may be misinterpreted or mis represented,or ir. general, upon the remarks of explanation by the hon. minister. But a substantive debate on any matter on which there is dispute would be out of order now. ~!R. NEARY: Mr. Speaker, the minister completely misquoted me, Sir. I have Hansard as well as the hon. the minister and the minister said he was not going to ask for any penalties.

Well, Sir, why should the minister make that kind of a statement when the hon. minister knows that no rules of this hon. House had been broken? 4686

April 5, 1976 Tape No. 1746 IDI- 1 MR. NEARY: Sotherefore he is not doing me any favour by saying he is not going to ask for penalties. Hr. Speaker, today I took it upon myself to write the Secretary of the Newfoundland Law Society, because Sir, as always happens in this kind of a controversy, in this kind of a debate, that sometimes the innocent have to suffer for the guilty, whether you are guilty by association or not, it does not make any difference.

I wrote the Secretary of the Newfoundland Law Society asking the Newfoundland Law Society to appoint a committee within the Law Society to investigate this whole matter of finders fees, bonuses, high interest charges, the relationship between the law firms, the individual lawyers and the brokers. The minister says they are not brokers; I say they do the work of brokers.

The relationship between the lawyers and these firms, whether you call them investment firms or brokers,and I do hope, Sir, and the reason I wrote the Law Society to ask for this was that, and if they have any sense they will do it, was so that the names of those who are acting in a dishonourable fashion 1or the names of those that- let me put it a positive way, Sir; the names of those who are acting in an honourable fashion and an honest fashi~n will have their names cleared, and everybody will not be tarred with the same brush. So, Hr. Speaker, I think that I have done a service to the people of this Province.

I am quite prepared, Sir, to see the thing through to the end. I have some documents obviously that I cannot talk about right now because it would fall within the realm of debate but I have one I might tell the hon. gentleman that I have one disbursement form here dealing with his own company which shows $400 Maritime Investment Limited appraisal fee, investigation fee service charge,and $400 to LeBarron l~rtgages Limited bonus, and $400 to an individual for a total loan of $4,800. A rose by any other name, Sir, smells just as sweet,and I do not back off one iota 4687

April 5, 1976 Tape No. 1746 NM- 2 ~ . NEARY : from the speech that I made in this han. House the other ,\ay. It i!l a cancer upon our society, Sir, and something that has to he cleaned up, not the minister. I regret very much that the minister - ~Ut. SPEA.~R: Order, please! Order, please~ I must point out to the han. gentleman again that this is not the time for a debate on any substantive matter which might be at issue. ~ffi.. NEARY: Sir, it is not the question of how much business Maritime Investment did in the last three years, it is the principle of the thing. I say it is wrong.

The minister is entitled to his opinion ,am! the public will judge accordingly, Sjr, in my opinion. STATEMENTS BY ¥INISTERS: }'11 •• SPEAKEP: The hon. ~!inister of Forestry and Agriculture. liP.. P.Ot!SS"EAn : Hr. Speaker, I have a couple of statements here, the first one may seem insignificant to certain members of the House but I am sure if the hon. member for St. George's (Mrs.

II. lfcisaac) ~~as here,and other hon. members who represent farmers in the area would be interested to hear that during my recent visits to the various areas in the Province involving farming, I was met with a number of complaints of the farmers in the area about the slow process in paying capital assistance payments and I undertook at these meetings across the Province to have these payments forwarded as soon as possible. I am ~leased toda y , Sir, to announce that the invoices are now being processed and it is expected that they will be in the mail by Thursday afternoon or Friday morning of this week.

Thus all farmers should receive their payments by the end of next week at the latest. These payments, Mr. Speaker, relate to the land-clearing bonuses and the Capital Assistance Programmes instituted by government over the past couple of years. The total amount involved is $204,oon.oo and it represents ninety applications. Mr. Speaker, I have another statement here that I would like 468ti

April 5, 1976 Tape No. 1746 tW.- 3 ~R. ROUSSEAU: to make. Over the past few years this government has intimated a policy of "local preference'' applying to certain aspects of pub~ic works and goods manufactured 1n this Province . This "local preference" while never really definitely stated, has been generally accepted as applying to tenders and purchases by Government. It appears that this policy , on a number of occasions, has been the subject of some confusion in its application.

I am pleased today to publicly affirm this government' s firm intention to grant a local preference to suppliers of local products on tender to the Covernment of Newfoundland and Labrador under the following conditions:

i) a preferential rate not more than ten per cent higher than the lowest tender meeting the required specifications; and ii) this rate applies only in respect to products wholly or mainly manufactured, grown or produc ed in this Province, provided these products of course meet with the prescribed tender specifications. 4689

April 5, 1976 Tape 1747 PK- 1 t1r . Rousseau; Clear direction has been issued to the Government Purchasing Agency in respect to this policy. It is also Government's intention, in exceptional cases, to consider a higher preferential rate on an individual basis to ensure maximum benefits to producers in this Province. Government has requested all Government agencies to consider the application of a similiar preferential rate for all purchases made by these agencies. I am particularly pleased, Mr.

Speaker, as Minister of Forestry and Agriculture to make this announcement as this policy will apply to lumber and agricultural and dairy products produced in the Province. I hope this policy will be of value to people producing these products. SOME HON • MEMBERS : Hear, hear! NR. SPEAKER": The bon. member for Twillingate. MR. J. R.

SMALLWOOD: I would like to ask the minister whether this rule, this decision by government applies across the board to all kinds of products or - because he is Minister of Agriculture and forestry, and he is not.only speaking only for agricultural and forestry,! take it, but for the government as a whole, with regard to all purchases by the government or its agencies.

When Confederation came1 within a few months of its coming there was an Order in Council passed giving a preference of, I think, 15 per cent on all goods to be bought by the government or any of its institutions or agencies, 15 per cent over and above the lowest price of an imported article, that is to say, imported from any other part of Canada, if imported is the right word, or imported from any other part of the world. provided the local

article was not to cost more than 15 per cent above the lowest price quoted on a brought-in

article than the local

article was to get the preference. Is that what I understand the minister now to have announced, but at a rate of 10 per cent preference rather than 15 per cent? And if he is kind enough to reply, will he tell me how ne~v is this? How long is it since the 15 per cent preferential rate was dropped, so that this now is brought in? I know that up to the time my administration went out of office the 15 per cent rule continued, 46.-9Ct

April 5, 1976 Tape 1747 PK - 2 Mr. S~~allwood: I believe, There was always a preference on the local

article bought, manufactured, grown, produced within the Province of 15 per cent. That I take it went by the board, and now it is brought in again but at a lower rate. I congratulate the government on this decision. I approve it heartily. I agree heartily. I am a little surprised to know tllat it has· to be brought in, I thought it was the law all along. MR. SPEAKER: The hon. Minister of Forestry and Agriculture. MR. ROUSSEAU: The reason it was brought in, Mr.

Speaker, was because there were some - it was never definitively stated, it was inferred and so on mentioned, but this is the first definitive statement to my knowledge that have been made on this topic. I spent a year and a half in the Department of Public Works and Services, ~!r. Speaker, and I was not aware of any preferential treatment by any previous government,as I understand it when we brought one in by Minute in Council which was never stated, that was the first time preferential treatment had been given.

I remember being questioned last year, and we were sort of suggesting, nobody \~ anted to be tied down by it, but the statement has never been made. Now it is clearly, unambiguously, unequivocally made that that is the government's position. I make it as Minister of Forestry and Agriculture mainly because of my concern with agricultural and dairy products and lumber.

And as a result of that the statement,if I may read it again for the hon. member, "A preferential rate not more than 10 per cent higher than the lowest tender meeting the required specifications; and this rate applies only in respect to products who!ly or mainly manufactured, grown or produced:· So it does not only apply to the department. The reason I am making the statement is because I had brought the paper - ~m. SMALLWOOD: If the hon. minister will permit, because if he sits down I will not be allowed to add any comment.

But the hen. minister might bear in mind that at the coming of Confederation the Government of Canada put a preferential rate on in their purchases 4691

April 5, 1976 Tape 1747 PK- 3 Mr. Smallwood: in this Province, the new Province, Of anything they bought they would buy it in Newfoundland at a preference, I think, it was 20 per cent, and I think it was for three years. And it was around that time that the other preferential rate of 15 per cent was made permanent on purchases by the Newfoundland Government. 1-ffi. ROUSSEAU: As I say, Mr. Speaker, 4692

April 5, 1976, Tape 1748, Page 1 -- apb MR . ROUSSEAU : to my kno1~ledge there was never a preferential rate,and the preferential rate that we had introduced and had not made a public statement on, is,I hope, today when I say that it is a public affirmation of this government's firm intention that there be no ambiguity at all in respect to this preferential rate applying to all products wholly or mainly manufactured, grown or produced in this Province.

As I say, particularly in my instance, I am very pleased because of the lumber, and agriculture, and the dairy products and I hope it will be of value to the people of this Province. PETITIONS ~m. SPEAKER: The hon. the member for LaPoile. MR. NF.ARY: ~r. Speaker, I would like to present a petition on behalf of 479 residents of Isle aux ~orts in the district of LaPoile . This community, Mr. Speaker, depends upon the local fish plant, Nelpack Fisheries Limited, which is owned by BC Packers, for employment.

For the past several years, Sir, the plant has been operating for approximately two and-a-half to three months out of a year, nrocessing only herring. In spite of a healthy DREE grant, Mr. Speaker, that was given to Nelpack a few years ago to provide refrigeration and ice making equipment, ice makinR machines and for other imnrovements, Sir, I understand fro m peonle in the local area that the machine for ice making has never been used, and yet, Si~, my understanding of DREE grants is based upon a number of jobs, permanent,that are supposed to be provided.

The petition is signed, as I say, Sir, by 479 residents of the collllllunity of Isle aux Horts and asks the provincial Minister of Fisheries to discuss with the owners of Nelpack, BC Packers Limited, the possibility of 100 per cent utilization of their facilities on a year-round basis through processing additional types of fish, groundfish, for instance, 46S3

April 5, 1976, Tape 1748, Page 2 -- apb MR. NEARY: which could be brought in by draggers provided either by the company itself or through the good offices of the Minister of Fisheries. In this connection, Mr. Speaker, I would like to congratulate the Minister of Fisheries for taking the initiative in the case of Rose Blanche and Burnt Islands and point out to the House that already two sixty-five foot draggers are in the area providing fish, codfish,to both Burnt Islands and Rose Blanche alternatively. I forget the names of the draggers now. There is something Lance - ~1R. W. CARTER: The Sand Lance. MR.

NEARY: The Sand Lance and another one of these new draggers. And the people are delighted. The morale of the people down there has gone up tremendously, and the minister is to be congratulated. I hope that through his good offices that the minister will he able to also persuade Nelpack Fisheries to either Ret draggers themselves - the minister and I attended a meeting in Isle aux Morts recently where this matter was discussed. It is a very important matter to the people in that community, Sir, and they are looking for an opportunity to be able to earn a living on a year-round basis.

They are looking for a way for that plant to provide full employment rather than the 75 per cent of the year spent on unemployment and welfare benefits. I will ,iust read the prayer of the petition, Sir. It is a petition to the bon. members of the Newfoundland Rouse of Assembly, Confederation Building, St. John's, Newfoundland.

"WHEREAS Nelpack Fisheries Limited, Isle aux Horts,is only operating three to four months each year processing herring and, T•lllF.REAS the capacity of this modern, up-to-date plant with its refrigeration and ice making equivment is able to handle all species of fish and, 11HF.RF.AS there is high unemployment in Isle aux Morts and surrounding area, THEREFORE

BE IT RESOLVED that the Government of Newfoundland through its Department of Fisheries immediately look into the possibility of using at least two draggers caoable of supolying this plant with enough fish to keep it 46:94

-- "-' April 5, 1976, Tape 1748, Page 3 -- apb ~fR . NEARY: operatin~t on a year-round basis that would create full employment in this area . " It give me great pleasure, Sir, to support the prayer of the petition and ask that it be placed upon the table of the House and referred to the Department to which it relates. Again, Sir, it is signed by 479 people. That is just about every voter in the community of Isle aux Morts . It is signed by every voter except my opponent in the last election ·who refused to sign the petition. Everybody else signed it. MR. SMILLWOOD: Which opponent?

April 5, 1976 Tape No. 1749 !'ffi. NEARY: The PC opponent in the last election. MR. SPEAKER: The hon. Minister of Fisheries. t-fR. W. CARTER: }fr. Speaker, I rise to support the petition and to maybe give a little background in what action we have taken and are trying to take with respect to the problem that exists in Isle aux }forts effecting as it does the 497 petitioners who have signed the petition. I should point out to the hon. member and the House, ]~r.

Speaker, and this is a very little consolation,! am afraid, to those 479 people, but the problem that exists in Isle aux !~orts is not too different from that which exists in other parts of the Province in that a large number of fish plants are under utilized. They are operating at very much less than their real operatin~ capacity for want of additional raw materials. But I should point out to the member, Mr. Speaker, and to the House and maybe to the petitioners that we have started negotiations with respect to obtaining for BC Packerr- Limited additional catch capability.

Last week I met with a delegation from Harbour Breton at which time '~e discussed the need for additional trawlers to service the fish plant in that community. Subsequently my deputy minister has had discussions with officials of the BC Packers Company and with the principals of another large fish processing company with a view to trying to negotiate maybe a transfer or on a lease basis a couple of trawlers from the latter company. But certainly I can assure the hon. member, Mr.

Speaker, and his constituents that every effort is being made by my department to accede to their request and to find a way to resolve this very, very serious problem. MR. SPEAKER: The hon. member for Fogo. CAPTAIN WINSOR: }lr. Speaker, I am sure I speak for all members on this side, Sir, when I support on their behalf the petition presented by the hon. member for LaPoile (Mr. Neary). I would say, Mr. Speaker, there is no place that I know around Newfoundland 4696

April 5, 1976 Tape No, 1749 NM- 2 CAPTAIN WINSOR: that is more deserving of all the facilities that are required and necessary to enable that group of fishermenM to make a decent living for themselves and their families, because Sir, they are the real dog fishermen. I recall while serving on the Gulf service there from Port aux Basques to Sydney, in the morning during the Winter season when you would have to get out and scun your ship through those boats from Isle aux Morts and Port aux Basques and other areas there.

It would make you feel as if,you know,you would want to stop your ship and take them all on board. The weather conditions that those fishermen were fishing in appeared many times to be, to me at least, not fit for an ordinary human being to be out on the oceana, But nevertheless they continued fishing, and then again in the evenings when you tied up at Port aux Basques those fishermen would come in in their small boats, get on the dock­ side and chop bait for the next morning's processing.

And the next morning at three or four o'clock in the morning, it made no difference what the weather was like unless it was blowing a hurricane, those fishermen were out there. And they are still doing it today. And it surprises me, Mr. Speaker, that,you know,they are only processing herrin& there. What has happened to the cod? Are they shipping the fish or selling the fish to the plant at Port aux Basques? ~!R. NEARY: No, they do not catch it. CAPTAIN WINSOR: They do not catch the cod. MR. NEAFY: They disappeared when the herring seiners came. CAPTAIN WINSOR: It is surprising to me. Nr.

Speaker, I certainly support,and I am sure all members on this side support that petition,and as I said previously whatever there is to be done to provide the necessary facilities to enable those fishermen to earn a decent living,then I think this government, and not only this government,but this government should also encourage the federal government to provide them with the facilities that is so needed, MR. SPEAKER: The bon. member for Twilli~gate.

April 5, 1976 Tape No. 1749 MR. SMALLWOOD: Mr. Speaker, I heartily support the petition itself and I welcome warmly the indication by the Minister of Fisheries that he has already been up against this problem,that he is familiar with it,and that he has been taking some steps to provide a remedy. And at the same time • 4698

April 5, 1976 Tape 1750 PK - 1 t1r. Smallwood: I would like to express a little surprise, though I suppose I ought not to be surprised,over his statement that one of the greatest corporations in this Canadian nation, namely BC Packers, British Columbia Packers,tvould look to the government of this little Province, or any government,for help in getting a couple of draggers to operate in and out of that place. nc Packers are a very great company.

I think it is a bit of a toss-up between BC Packers and Canadian Fishing Company because they are both very great companies, although the ~!onroe Company now with thirty-odd - what is it? thirty, forty? NR. W. CARTER: Thirty-seven. }1R. Sl-'.ALLWOOD: Forty-seven draggers- MR. W. CARTER: - ------- Thirty-seven draggers. !1R.

SMALL~/OOD: Thirty-seven draggers - is surely one of Canada's great fishing companies, and God knows, and if God does not, I do, I know how much they have sought help from the Netvfoundland Government~ and how much help the Newfoundland Government had given them, because there were times when that company was completely bankrupt. They were bankrupt up to, but not including the point of being declared bankrupt. And the one who could have declared them bankrupt was the Government of the Province. And instead of declaring them bankrupt and closing them,they poured in a few more millions to keep them going.

Thank God we did, because they are a great company, and the Monroes and ~1r. Etchegary, for whom I have boundless respect, are great Newfoundlanders, they are great people. t.nd it has been a wonderful thing that they were not allowed to go down the drain, that they are not pushed into insolvency, with the result that today they employ thousands of our Newfoundland people, and they add millions to the wealth of our Province. But it is a little shocking, I find it to be just a little staggering,to think that BC Packers,one of the gEeat corporations of Canada- it was one of the H.R.

MacMillian companies. '1acMillian-Blodel was the great company of H.R. MacMillian, but BC Packers was another of his great enterprises- that that company, operating a fishing plant in Newfoundland, and just operating three 4699

April 5, 1976 Tape 1750 PK - 2 Hr. Smallwood: months a year producing herring, and the whole community there for nine months of the year - fmagine!out of every twelve months, nine months there was no fishing activity going on, all through the lack of a twelve month opeEation that plant which BC Packers,of all companies,are well equipped to perform. I wish the minister every possible success, and I wish my hon. friend from LaPoile (Mr. Neary) every possible success,in getting the fishermen described by the hon. gallant member from Fogo (Capt.

Winsor) out of his own personal knm~ledge, which extends a way back beyond and earlier than that of its present sitting member, the magnificent men who are involved. So I wish them all the best of success. MR. SPEAKER: The hon. member for Burgeo-Bay d~Espoir. }ffi. R. SIMMONS: Mr. Speaker, I would just like to speak in support of the petition presented by the member for Lapoile. His district and mine are in proxmity as you know, and have a fair amount in common, in particular, 11R. SMALLWOOD : They are contiguous, are we not? MR . SIMMONS: That is another nice word, Mr.

Speaker, which I shall learn to use, "contiguous". "Contiguous'; I am told it is now. Well~ whatever, Mr. Speaker, near each other, cheek-by-jowl, rubbing shoulders, looking at each other across the fence, and having in common, Mr. Speaker, in particular, a year-round fishery, year-round in theory, year -round in potential, unfortunately not year~ound in fact, largely because of the failure on the part of companies to fully utilize their facilities, and the failure on the part of a number of agencies,including government, to see to it that these plants have adequate catch capability.

I would like to support the petition, Mr. Speaker, because Isle aux Morts,as well as the communities of Burgee and Ramea in my district where there are also plants, and also the other communities that we might mention,including McCallam and Francois in my district in my district,are among the reldtively few communities in this Province Hhich are in a position geographically to get itself involved in a: year- · round fishery. The weather is suitable, the run of fish is there 4700

April 5, 1976 Tape No. 1751 NM- 1 liR. S IW10NS : is suitable, the run of fish is there, and all is required :l.s the catch capability, the additional trawlers. And I would delight, as I do right now,in giving my hearty support to the petition from the 479 residents of Isle aux }lorts. The minister in responding referred to the delegation from Harbour nr.eton,which uRed to he in my district. I could at this point, Mr.

Speaker, get tongue-in-cheek and ask him whatever for, or •-•hatever there was a delegation for. because by my count now,and I stand to be corrected,but by my count at the moment there should be eight and six, fourteen trawlers in Harbour Breton, fourteen arlditional ones as committed by the Premier in 1971 and 1973. And perhaps the simple answer to the prayer of the petition presented by my friend from LaPoile would be to take four or five of these trawlers that must be sitting there in surplus, thanks to the Premier, and put them over in Isle aux Harts. }!R. SPEAKER: The hon. member for Fortune-Hermitage. I'R.

J. '' lNSOJl.: I rise to support my hon. friend's petition, having had a fair amount of experience on the same coast,and I have been telling Newfoundland in fact on radio broadcasts that it is the only coast that runs twenty-four hours a day, 365 days in a year. And the inshore fishermen are not out twenty-four hours a day,but the trawler men are and they only have a little break in Christmas. It is tremendous how much fishing goes on on that coast,and a remarkable breed of men. When my hon. colleague, the member for Fogo (Capt.

Winsor) mentioned seeing them out there in ~~eather that you would not believe,! have also seen them. It is really unbelievable. One minute you see the dory, the next minute you do not. That is the kind of weather they fish in. I would like to congratulate the lfinister of Fisheries for his effort to try and get more trawlers for BC Packers operation in Harhour Breton, seriously needed. Only half of the labour force working there because they do not have enough trawlers.

Running fish plants these days is a real can of worms,and a tratder operation is certainly not a profitable one in itself,and BC Packers have refused religiously to come to government and ask them for any help. They do 4 7-01

April 5, J.C)7(i. Tape 1751 W1- 2 l!R. J. WINSOR: not renlly need it. They really do not want to operate the trawlers because it is unprofitable, and I think they are only doing this because of the pressure brought to bear by the Department of Fisheries for which they are to be congratulated. As I said, fisheries today is a very difficult proposition for anybody to control or handle. Even a small w·ar is going on according to the CBC between the different types of fishermen inshore. This report that came from Hermitage Bay was much exaggerated.

In the twenty-four years that I have been there I have never seen any fishermen down there fall out with any other fisherman because he fished on his grounds. A net was accidentally picked up on a small stern tra~vl, and they knew who it was. There was no row over it that I know of, and I checked immediately with my hometown, Gaultois. There was nothing went on there and I doubt very much if anything went on in Hermitage. It was slightly, if not a little more than slightly, exaggerated. I have much pleasure in supporting the petition of the hon. gentleman from LaPoile (Nr. Neary).

PRESENTING RF.PORTS BY STANDING AND SPECIAL COMMITTEES: HR. SPEAKER: The hon. member for Bellevue. Does the hon. gentleman have leave to revert to petitions? SOHE HON. ~!EMBERS: By leave. MR • SPEAKER: !<R. CALLAN: The hon. member for Bellevue. Hr. Speaker, I beg leave to present a petition on behalf of the residents of the communities of Hillview, Hatchet Cove and St. Jones Within, in the district of Bellevue. This petition, l!r. Speaker, contains 334 names. The nwnber of voters of these communities totals 363 at the last count, so the number of names on the petition is almost equal to the number of voters.

This prayer of this petition, Mr. Speaker, I will read, as follows: "He the undersigned, citizens of the communities of St. Jones I.Jithin, Hillview, and Hatchet Cove hereby protest the treacherous road conditions of the twelve mile stretch of highway from the Trans-Canada High~vay to St. Jones Hi thin."

April 5, 197fi, Tape 1752, Page 1 -- apb MR. CALLAN: Now, ~r. Speaker, not only is this petition protesting the conditions of the road as they are now, because we are all aware 1 I am sure,that in any community, or in any area of the Province where the road has not been reconstructed and has not been paved,then, of course, during thi~ time of the year naturally the road is 1n a bad condition.

So this petition is not only asking that the road be temporarily repaired, but it is aslo asking that something constructive, something lasting will be done with this road during this coming S.ummer and, of course, Spring, Summer and Fall. The first thing that needs to be done, of course, is reconstruction, t~king out the bog and so on and putting the road in such a condition that perhaps in another year the road would be in such a condition as to allow pavement to be placed there. The road, as I say, right now is in a deplorable condition.

However, a delegation who presented this petition to me this morning in person, did meet with some Highways officials, or officials in the Department of Transportation and Communications in the absence of the minister, and we got the point across, of course, that probably not enough is being done to bring the road up to standard right now.

Also, of course, the message was left that it is hoped that ~~hen the estimates are brought down,and when decisions are made regardin~ reconstruction of roads and the paving of roads, that the decisions will be mace, n~t along political lines, not for political reasons, but for reasons of priority - the nt~her of communities involved, the number of cars and trucks rlependin~ on that road and what have you. ~{r. Speaker, I thoroup;hly sunport the Prayer of this Detition and I ask that this petition be tabled and referred to the depart~ent to which it relates. MR. SPEAKER: The hon. the member for 'J'r•illingate.

HR. SHALLWOOD: '1r. Speaker, I rise to speak very briefly indeed in SUTlr>Ort of the resolution of the pE-tition T'resented by my

April 5, 1976, Tape 1752, Page 2 -- apb !-!R. SMALLHOOD: honourable collear;ue. I have to say, if I am r,oing to be candid and straight about it, that if there is one hen. member of this Eouse who merits my pity and the pity of all of us, it is the Minister of Transportation and Communications, the position that was always known as ~in1ster of Highways.

Added to the trouble there is every year around this ti~e of the year when the frost comes out -you get some rain, you get some melting snow- added to that this year is the frightening - at least to me frightening, it does not seem to be frightening to very many others- but to me a frightening shortage of necessary funds to cope with these terrible problems. However, I hope that the minister will do whatever is in his pmver to remedy this matter, because that is a particular

section of the Province where the people are very energetic, continually on the go. There is a fishery, there is a lot of trade done, and goodness knows they need a decent road to do their business, to carry on their trade. I cannot resist, Mr. Speaker, saying something that I am reminded to say by the reference to St. Jones Within. There was an hen. member of this House once whose name was William R. l-larren. He was the member for Trinity Bay,which at that time used to elect three members. It was a three-man constituency, the whole of Trinity Ray, and he was one of them.

Willie Warren,who subsequently became Prime Minister of Newfoundland and after that again a judge of the Supreme Court. I do not think he became Chief Justice. I think not. No, he was a puisne judge. But Willie 1-larren was a private member of the House and then subsequently a cabinet minister at a time when the rules of the House .were extremely loose. In fact, you might almost say there viere no rules. And anyone 4704

!q>ril 5, J '17Ci. Tane 1753 RH - 1 ~!R. s>'!ALLHOOD: who wished to to so could talk just as long as he liked, could go on for hours and days if he had the wind and the health and the strenf?;th to do it. So t~e filibuster was a very, very popular game by some hon. members. Willie Warren launched a filibuster in this Chamber- not this physical Chamber, hut the old House.- to delay as much as he could, to delay the pr.occedinr,s as much as he ,could. He talked about everything under the sun,including spending a couple of hours in a learned discussion of the differences there were between St. Jones Within and St.

Jones Without. 'l'his went on for t'~o solin hours; the differences in the economy of the t'vo pJ aces, and the c11 fferences i.n the history of the two places, the history and the personality and the cha!acter of the people of the two places. Tlce HoUR" of Assembly learner1 more that day from Willie Warren ahout the cl.i fferences between St. Jones Hithin and St. Jones l'.rithout than they had ever heard he fore. So although it is only one of the two St.

Jones mentionen in the petition, if for no other reason than that it is St • .Jones Within, I hope that the Minister of Transportation can find the few dollars that are needed to fix up the road, especially that part of it near St. Jones Uithin. HR. SPEAKER: Are there any further petitions? PR'ESF.~l'J"TNr. REPORTS BY STA~TIHNG AND SPECIAL fOM}!ITTF.F:S: MR. SPEAKER: The hon. ~Hnister of Social Services . HON. C. BRETT: >~r. Speaker, I bep, leave to table the annual report of the Department of Social Services for the year ending March 31, 1975. Copies will he nistrihuted, Mr. Speaker.

ANSWERS TO OUF:STIONS FOR WHICH NOTICE HAS REEN GIVEN: (See Index) ~'R. SPFA'J(F'R: The 1-ton. ~inister of Fisheries. nm1. IV. CARTF:R: Nr. Speaker, t have the pleasure to table answers to ~uestions Nos.S71, n20, 625, 702, 720; 571 being from the hon. member for LaPoile(Hr. Neary), 7(')2 from the same member and 720; Question No, n20 from the memher for l'ogo (Capt. 1-linsor); and 625 from the member for Carbonear(r·lr. R. Moores). I should point out, Mr. Speaker, that that 47'05

April 5. 1<17;;. M1<. . 1<1 . r./IRTFr: : "RH - 2 concludes the answers to questions asked the Department of Fisheries on the Order Paper and that C!Uestions that were not answered were obviously not related to the department but have been referred to the department to which they relate. ~ R. SPF,AKYR : ~IT\. F . ROHF: ORAL QUESTIONS: The hon. member for Trinit y-Bay de Verde. !'r. S-peaker, T would like to address a question to the hon. Hinister of Fisheries, Sir.

In view of the fact that I am being l1ounded literally to death by my constituents in the Old Perlican area, and I have not heen able to get answers out of DRF.F nor from the minister nor from the plant owners with respect to the status of the rebuilding of the Old Perlican fish plant, I wonder if the minister would use his office· to get the DR.F.F officials and the owners of the fish plant together with him to make a public statement in order to inform the fishermen and the plant 1~orkers in that area of what exactly is going to happen, whether or not this fish plant would be rebuilt in time for the fishery season this year so that they can determine what they are going to do tmen t he fishing season does arrive? ~1R • SPEAKER : }ffi.

H. CARTER : The hon. Minister of F:l.sheries. "r. Speaker, I should point out to the member that I am as anxious as what he is to find out exactly what DREE is goin g to do,and if in fact they are going to do anything. I have said before in the House and I repeat, ~'r. Speaker, that we are not delaying the rebuilding of that plant. At the moment - MR . T'. Rni·TE: To a point of order, Mr. Speaker. }'R. H. CARTER: w . srEA..'<.F'l': raised. l"'R. F. ROto/E: One second , can I finish, Mr. Speaker? I must interrupt the minister.

A point of order has been Standing Order 31 (c), Sir, states, and I quote the last part of the sentence, "And in answering any such question, the '1:inister is not to dehate the matter to 1mich it refers." HR. LU'<DRICAN: lie never even got a chance to get a sentence out.

i\pdl 5, 1~71'i. Tape 1753 RH- 3 HR. l' . ROlffi : The minister is now entering into the realm of debate Sir, and is ahout to- ~fl1. LUl'IDRIGAN: HR. F. Jli)HF.: }1R. H. CARTER: MR. SPEAKFR: ~m.. l'. ROWE: in silence. lle was about to answer the cmestion. The question that I asked - You do not want to hear it. Order, please! Order, please! I am on a point of order, ~1r. Speaker, and I ask to be heard 4707

April S, 1976 Tape 1754 IB-1 J.'R. F. ROWE: 'l'he question was - and I will put it once again, Sir - not whether nnEE is going to provide money,or ~hether the provincial government is going to provide money,or whether the fish plant owners are going to provide money. The question was simply this: Will the mtn:lster use his office to get the three parties together , which includes himself,of course,in order to inform the people of Old Perlican a~ to whether or'not that plant is likely to be rebuilt in time for the fishing season this year? It is as simple as that. MR.

SPEAKER: Now before recognizing the bon. }~inister of Fisheries, a point of order was brought up whereby ft was alle~ted that the hon. minister had in answering the question entered into debate. In my opinion the bon. minister did not. There was no debate. What he may have done later on, of course, there is no way of knowing,but up to the point where the point of order was made I am not aware that he was debating the matter. The hon. ~inister of Fisheries. MfL H. CJI.RTER: Thank you very much, Mr. Speaker. It is quite obvious Sir, that the bon. member wants to score political points. MP.. F. ROWE: ~~r.

Speaker, a point of order. Is that debate or is it not? I ask Your Ronour to rule on that one. }W. SPEAKER: Order, please! A point of order has been raised so I do have to dispose of it. The preliminary remark was one of debate, the minister's preliminary remark. The bon. Minister of Fisheries. }!R. W. CARTEP: Yr. Speaker, am I speaking on the point of order now, Sir or do I - }fR. SPEAKER: No, the point of order has been disposed of. ~. W. CARTEP: All right. 'l'r.

Speaker, I should not elaborate because the hon. member,! think,knows as well as I do that to discuss this matter Jn public I think would not be in the public interests and could very well,by the way,jeope.rdize its chance of being rebuilt. I am surprised to hear, Mr. Speaker, some of the outburst by the bon. member in his regular - Mr. F. ROWE: On a point of order, Mr. Speaker.

April 5, 1976 ~:n , !-!. CA'PTER : YR . F. l!OV'R : ~!11 • SPEAKER : Tape 1754 - television and radio protests. He has entered into debate. Order, please: I am sorry to interrupt the han. IB-2 minister but I have no choice 'l<'he.n a point of order comes to the Chair. The han. member for Trin:l.ty-Bay Tle Verde. _!1}' • l' . ROWE : It is quite obvious, }'r. Speaker, that once again the minister is entering into debate, I was set up for this one,because I made a press releawe and then the hon. minister asked me to ask him a question about that fish plant and I walked right into it just to prove to th:l.s hon.

House what he is. N'P, SPEAKE'P: Order, please! Orner, please! I ~ust ask the bon. gentleman to state specifically what point of order he believes has been broken. }IJl, F. ROWF: 1'T' • SPEAKF.R : occasion. He wa~ entering into debate. I am not aware that there was 1.n fact debate on that The han. 1':1n:l.ster of Fisheries. ~ r. Speaker, in replying to the question I am surprised to hear the me!1'ber make that admission 1.n the House,because he knows as well as I do that when we came into the chamber I made reference to a news release that he han issued today.

I said, "Look, ~my do you not ask me a C]uestion :l.n the House and allow me to answer in the House." All I can say again, !>'r. Speaker, is that we are w1d. ting on worcl froiT' the federal government, from DREE,as to where they stand on th:ls proposition, if they intend to assist in the rebu:l .ldin!!: of that plant. Naybe I should close by asking the hon. member to use his considerable influence mayhe with his federal friends and see if he cannot extract an answer from them as soon as possible. I recogn:lze the han, gentleman for a supplementary before another bon. member.

The hon. member for Trinity-Bay ne Verde. ~W. F. POWE: Could the minister indicate, Sir, when he is expecting an answer back f rom DREE and when a proposal was made by the fish plant 4709

April 5, 1976 Tape 1754 IB-3 MR. F. ROWR: mmers to DREE? And I might add - and this is probably out of order - that Opposition members do not negotiate with other governments, it is provincial ministers of the Crown. SOME HON. ~~ffiERS: Oh, oh! ~-~~F.R: The statement was in fact out of order. Now the hon. gentleman asked a question and before reco~izing any hon, member J want to see if anybody wishes to ans"~<>er it. Apparently not. The hon. member for T.aPoile. ~fP. NEARY: ~'r.

Speaker, I would l:ike to ask the Minister of '-'ines and Energy, Sir, i.f Petro-Canada has obtained a provincial permit to drill for oH and gas off the Coast of Newfoundland and Labrador? If not, what steps have been taken· by the minister, or the ~'inister of Intergovernmental Affairs,or the Premier to alert Petro-Canada of the need for such a permit? }'R. SPEAKER: The hon. Yinister of Hines and Energy. YR. CROSBIE: }lr. Speaker, as far as I know Petro- Canada has not applied to the Covernrnent of Net~foundland for a permit for expJ oration off the Coast of Newfoundland or Labrador.

If they did we would consider them on the same hasis as ~'e have considred other people who have appLied for permits,and they would get a permit under the same careful conditions. They have not requested a permit. They certainly realize that as far as the Prov~nce is concerned they would need one from the Province. Petro-Canada say that they are going to engage in exploration and development work off the Coast of Newfoundland and Labrador,and we welcome that, we welcome anyone. who wants to spend money to explore the possibilities of the area.

They may well be going to participate in a permit held by others tmder some farm-out arrangement. That is the way that I 1.muld think that they are going to participate. In the ·4710

April 5, 1976 Tape No. 1755 NM- 1 W!. CROSBIE: the area off the coast of Newfoundland and Labrador, there are federal permits and there are provincial permits. The Federal Government has granted permits to most of the area, the Provincial Government has not. Those companies that are wise in their approach seem to get permits from both. In this particular case Petro-Canada has not approached the Provincial Government for a permit and in fact may not need to if they are participating in the permit held by another company,which is what I think is what they are doing. ¥R.

SPEAKER: The hon. member for Burgeo- Bay d'Espoir. MR. SMALLWOOD: I~ it all right if I ask a question? It is a supplementary. MR. SIMMONS: Sure. Sure. MR. SPEAKER: The hon. member for ~•illingate. MR. ~LWOQD: ~r. Speaker, might I ask the minister to tell me of the various companies that have received concessions. offshore oil and gas concessions from the Government of Canada, from the Government of Newfoundland,or from both governments - this is three types of concession.

In these three classifications of concessions, has any actual offshore drilling been done by any company that had only a federal permit but not a corresponding provincial permit? I do not know if the minister heard my question. MR. SPEAKER: The bon. Minister of Mines and Energy. ~~. CROSBIE: I heard the question and you would have to have a mind like a computer,you know,to answer the question. Obviously that is a question of which you would have to have notice. No~~ I think there is already a written question tabled which will be answered.

I think all the information has been gathered and will be answered in the next few days. No one can give the answer just out of their head. r~. SPEAKEF.: The han. member for Burgeo - LaPoile. I am sorry, I mean Burgeo-Bay d'Espoir. MR. SIMMONS: There is a big difference, Mr. Speaker, a big difference. Hr. Speaker, a question for the Minister of Industrial Development concerning the Marystown Shipyard accident. I wonder now would the minister 47"11

April 5, 1976 MJL S]}lli<()NS: Tape No. 1755 be in a position to bring us up-te-date on the extent of the damages and also ~~hat time the damage !'light be repaired? I am thinking particularly in terms of getting the two CN boats plus the trawlers from Ramea and the other fish plants that are locked in there at the moment. The hon. Minister of Industrial Development N?-1- 2 ~~ . LUNDRIGAN: I am going to refrain from a lot of detailed commentary on the shipyard at this moment to give the manager a chance to express a professional opinion on some of these 1ssues.

I have not got the full detail on the cost 1which is an important question and needs to be answered. I will make a statement in the House when that information is available.

And the second part of the question,which is a very, very immediate one and that is to the ability of the yard to launch the boats that are presently there,which directly effects the hon. member's riding and the fish plant in particular, every effort is being made to try to devise some kind of a - I suppose I could use the phrase an interim or a makeshift approach which could considerably shorten the time that the shipyard is out of actj_on in terms of launching and receiving ships. Again that is not fully determined. There should be some comment on it tomorrow from the shipyard.

The duration of the delay in having the thing back into full operation , it looks like we are looking at perhaps a three month period,which has already been stated publicly 1 but I hope that something can be devised that will enable the yard to be able to operate on a makeshift basis earlier than that particular period in time. The yard management and the work force have treated this in a way which is really commendable.

They have really looked on every possible alternative and hours after the accident people, experts, original people who were involved in the design and the construction of the facility were contacted, were enroute, are presently there and there has been a tremendous effort made to try and get the thing operational. 4712

April 5, 1976 Tape No . 1755 NM- 3 ¥R. LUNl)IUCAN: Also I would like to say that to my k-nowledge there will be no decline in the const ruction activity on site , although that doef' not say that we will not lose some work because of their inability to receive repair work at this present moment. nut I do not anticipate that it will really be delayed as long as we earlier had anticipated. But I would rather refrain,Your Honour, from making long detailed comments on it .

There is a problem of insurance , there may be at some point disputer as to ler.al arguments back and forth and so on over responsibility, liability and the like and I would rather not make any comments that would prejudice any kind of an argument in the future. But certainly t can as~ure the hon. member that we do anticipate some kind of an interim plan of action that will shorten the time that the yard will be out of action . 1-fR. $U1}10NS: A supplementary. '11'. SPEAKER: h supplemen tary question. 4713

April 5, 1976 Tape 1756 IB-1 ~'P.. SU'M(lNS: I ~an appreciate the minister's position insofar as this :Is concerned. But I wonder could he indicate roughly to the House when he or the shipyard cret-1 might be in a position to tell us about the makeshift approach to launching the various crafts~ Are we talking a couple of days or a ~1eek, you knot>T, when we can get the indication, I l'lean? ~-!!'.. SPF..AKEl!: 'l'he hon. lfinister of Industrial and Rural Development. MR. LUNDRIGAN: Your Honour,I th:!nk sometime tomorrow or Wednesday the yard can make a public announcement on that parti.cular type of plan.

Secondly, I beJ:Ieve that the ot>mers of the Penny Hope are presently in route or at '!arysto~m, they are there at the present moment,to try and assess ways that we can work on the ship that was damaged, the Penny !lope, to result in a minimum of delay. T think that sorre arrangement can be worked out. But there has been a tremendous amount of co-operation among the vari.ous persons and groups and companies and insurance and owners and the Jike to T"ake sure that every effort is made to have the accident have as minimal an effect as possible. I am very proud of the managell'ent mainly in this respect. ~~.

SPF.~KEn: The hon. mernher for Lewisporte. l"R. !-'lUTE: l'r. Speaker, I have a quest:lon for the Minister of Fisheries. Foul d. the minister tell the House ~·Thether or not he has received complaints about seals being slaughtered and left on the :ice in Notre Da!'le Bay,and whether or not he has had a chance to look into this? ¥R. SPEAKE!': 'l'he hon. Minister of Fisheries. MP. W. CArTf.R: Yes,we did receive a telephone caJl, Mr. Speaker, on Friday, I think it was, from a Yr. Rideout, I believe from Cottle's Island,compJaining that seals were being slaughtered and left on the ice. He then, Mr.

Speaker, referred the matter to the federal Department nf Fisheries~nnder whose jurisdiction this matter falls, and requested they investigate and take whatever action :l.s necessary to put an end to that needless slaughter. 4714

April 5, 1976 Tape 1756 IB-2 Ml\. SPEAKER: The han. member for LaPoile. ~'P. NEARY: '1r. Speaker, I would like to ask the Minister of Health if he is concerned or excited about statements made this weekend by nrs. Kennedy and Boulos in connection with the pill that could cause cancer as bad as smoking 1and that young girls can get the pills without perscriptions? Does the minister have any comment to make on this statement? MR. SPEAKEP.: '!'he bon. Hinister of Health. MR. H. COLLINS: vr. Speaker, one cannot keep tuned in to all the different radio stations and so on in any given weekend to know what is happening.

I will have to take the question under notice. '1-!R. SPEAI1'ER: A suppl etllentary? NF. NEARY: Hell no, I just wanted to ask the minister when I could expect t?. get ~he answer_ to the question? }'P. SPEAKER: I would 11ke to know if it is supplementary because if it supplementary I will recognize the bon. gentleman. ~· NEARY: Supplementary yes, Sir. MR. SPEAKER:_. If it were on a different topic, then I probably would not. No, Sir. The minister said he would take the auestion under advisement. I was wondering how mnch time the mini.ster is talking about before he can supply the House with the answer. ~,. H.

COLLINS: It shoul~ not take very long, a day or so. ''1'. NEARY: A day or two. l'R. SPEAKER: The han. metllber for Trinity-Bay De Verde. l'r. Speaker, in view of the fact that the Newfoundland Light and Power Cotllpany mad.e a $5.6 mill ion profit over the past year,,~hich is $1 million over the year before, I was wondering if the minister is considering having the 'Public Utilities Board review the cost of service adjustment which is presently tacked on to the electricity bills and I think it is probably at the 7 per cent level at the present time? t'lLSPEAKER: The hon. }~inister of !dines and Energy. ~.

CROSBIE: ¥r. Speaker, the Board of Commissioners of Public

April 5, 1976 Tape 1756 ~'1>. C:ROSUir.: 1lti lit1es alreacly have full control over that situat:fon ;me they r,et all tnf~~tinn :fn connection with the Newfo1moland Light and IB-3 Po .... ·er. It has rc- be supplJecl to the Boar d of ror.mdssioners of P\lblic Utilities . They cannot i.mpo~e a monthly adjustment char~e ~od. thout the perm1ssion and consent of the Board of rommissioners of Public T'tilities . So there :fs absolutely no need fo r us to contact them about the ~Atter .

It is already wel l in hand . ~atever t hey mace, the Comm:fssion has full acc ess to all their books , and the laws and the precedents rlictate to the Board what they can allow them to make by way of revenue . 4716

April 5, 1976 Tape No . 1757 MR. SPEAKER: The hon. member for Terra Nova. ~1R. LUSH: Relative to the point, Hr. Speaker, I wonder if the minister can inform the House again,or inform the House as to how long this cost of service adjustment is to be in effect? J'1R. SPEAKER: The hen. Minister of Hines and Energy. NM- 1 MR. CROSBIE: Hr. Speaker, we cannot inform the House. If the hon. gentleman wants to call Mr. C.W. Powell, the Board of Commissioners of Public Utilities, Mr. Powell will tell him. It is just as simple as that. The government has no control over the matter.

It is the Board of Commissioners of Public Utilities. Now I cannot remember how long it is in effect. It was something that they were permitted so that they would be able to reach an adequate return on their rate base without having to go back to the Board of Commissioners of Public Utilities every month. And there was a device the board in following precedents of other provinces permitted them to employ for a certain period of time. MR . SPEAKER: The hon. member for Conception Bay South. :MR. NEARY: ~lr. Speaker, I wouJ.d like to ask a question of the hon. minister. MR.

SPEAKER: Well, having recognized the hon. member for Conception Bay South,! have to ask whether he will yeild. MR. NOLAN: A supplementary,is it not? MR. NEARY: Yes, a supplementary. I wanted to ask the minister if the government has yet taken a decision to take over the complete distribution of power in this Province? MR. SPEAKER: The hen. ~linister of Mines and Energy; r~. CROSBIE: Have we reached a decision to take over? I thought maybe we had reached some decision the Premier was going to announce, but apparently we have not reached any contrary decision. The

April 5, 1976 Tape No. 1757 NH - 2 NR. CROSBIE: government has made no decision to take over the distribution of all electric power ~~ithin the Province.

I mean,the position today, and the government's policy today is exactly as the policv ~~as when the hon. gentlemen opposite were in power and that is that on the Island of Newfoundland the generation of electricity is from,whatever the date was a number of years ago-to be in the hands of Newfoundland and Labrador Hydro only, what was then the Power Commission, but that other companies would be permitted to involve themselves in the distribution of electric power.

And that is still the policy and there has been no chan~e in that,and the government has not decided to take over all distribution of electric. power within the Province. So the situation has not changed. MR. SPEAKER: The hon. member for Conception Bay South. }'P.. NOLAN: Hr. Speaker, a question for the Minister of }~ines and Energy,and that is in reference to earlier questions that we brought up in the House.

And that is since the government saw fit to remove the sales tax,I believe,from fuel for heating, has the minister or the government considered granting the same consideration to those Hho have electric heat and remove the tax,or what is the position at this moment! l!R. SPEAKER: The hon. Minister of Hines and Energy. l'R. CROSBIE:' The same has been considered, Mr. Speaker, but as hon. gentlemen know the budget has come down and there has been no change in connection with any further exemptions from sales tax, so the position remains as it is.

Sales tax is collected upon the sale of electric power in the Province and there has been no change,and as bon. gentlemen can see from looking at the bud'get and the revenue and expenditure, we just have no room to grant any other exemptions under the sales tax legislation without having to impose further taxation elsewhere. So the pos:Ltion remains as it is. ·~,. SPEAKER: The hon. member for Bellevue. 4718

April 5, 1976 Tape No. 1757 MR. CALLAN: Hr. Speaker, I have a question I think for the Minister of Municipal Affairs. I am wondering if the Minister of Hunll.cipal Affairs is aware- I am not aware, or NM- 3 I was not aware until this morning - but I wonder if his department is aware that of a couple of moose carcase• being in the Whitbourne Pond, the pond which sup;lies the town of Hhitbourne with drinking water, are you aware of that and if so what is being done about it? MR. PECKFORD: Mr. Speaker, bless my soul. I have heard it all now.

Every day there is a couple of unusual occurrences that have some relationship to my department,but that one takes the cake,of course. Also I suppose the Department of Health and the Provincial Department of Environment are involved as well as my department here. I am not aware. The first time I had heard of it was when the hon. member just mentioned it to me now. But I shall immediately undertake by way of phone call after the Question Period to have the thing investigated and give a full report to the hon. member either outside the Rouse after six o'clock j_f I do not hear it before then,or tomorrow morning.

HR. HICKEY: There are a few bad apples in every barrel. MR. SMALLWOOD: A very useful place,this House. }!R. PECKFORD: Always has been and always will be, no problem. ~m. SPEAKER: The hon. member for LaPoile ~ffi. NEARY: Mr. Speaker, I would like to ask the Government House Leader, the ~Unister Without Portfolio 1if there is any foundation at all to the report that the Chairman of the,Public Service Commission has resigned 1 or has given notice of his intention to resign? MR. LUNDRIGAN: That is out of order. That is totally ont of order. 4-719

April 5, 1976 Tape 1758 PK - 1 Hr. Wells: I think the Public: Service Commission would come under the Minister of Finance and the Pre~ident of Treasury Board HR. NEARY: He is not here to answer it. MR. WELLS: He is not here to answer. I have no knowledge of any such thing, Mr. Speaker. MR. LUNDRIGAN: The question is out of order. MR. NEARY: The question is in order. HR. LUNDRIGAN: The question is out of order, absolutely. HR . SPEAKER: Order, please! The question has been asked and answered now.

Naturally if a similar question comes up and the bon. gentleman thinks it is out of order I would certainly hear his argument. Is this a surplementary question. Mn. ._ NEA_!\Y: No, Your llonour. MR. SPEAKER: HR. T. LUSJI: Then I will recognize the bon. member for Terra Nova. A question for the Minister of Education. In view of the cost of textbooks to the Province, I am 1wndering whether the minister is in a ros-it::.on to inform the House of the procedures and the c:rit~rion used in (

a) the selection and (

b) the purchase of textbooks for this Province? MR. LUNDRIGAN: ~ffi . SPEAKER : ciR. LUNDRIGAN: Mr. Speaker, on a point of order. A point of order has been raised. Mr. Speaker, with great reluctance I rise on a point of order relating to my bon. friend's question. I think if all of us tried to address ourselves to the rules, which state clearly­ the twenty-seven rules ,! believe , that govern in answering questions, and make a diligent effort, we all will improve the Question Period and perhaps ask questions which are really relevant.

I am not going to take issue with the bon. member's question,but a question that ask extensive detail,wh:.ch was just asked; questions that ask to confirm or deny , which was just asked by the bon. member; questions lvhich ask, whi.cl1 was also ask by the hen. member as well 1 to ask the minister is he aware of a moose in the pond,or fifteen bodies in the pond for that matter. are questions which are out of order by the rules. And I certainly would not want to stand there and argue against "4720

April 5, 1976 Tape 1758 PK - 2 Mr. Lundrigan: every question being strictly in accordance with Beauchesne, but I believe if we all make an effort and take anything but the lead fron1 the hon. House Leader there in asking questions then I think we will have a better Question Period. Me. ROWE: To that point of order, Mr. Speaker, I submit that no point or order has been raised at all. It is simply a difference of opinion between two members here.

It was a legitimate question that was asked, and indeed it was just that the present minister who spoke on the point of order feels that the question was too long or too detailed, That is his opinion, it is not a point of order. MR. CALLAN: MR. SPEAKER: MR. CALLAN: Mr. Speaker, to that point of order. Is the han. gentleman apeaking on the point of order. Yes. Mr. Speaker, to that point of order. The han. minister referred to my question.

Now, I had two choices; this morning I was rather busy with three delegations, but I was informed that one of the open line programmes was trying to contact me asking me about, you know, the situation at Whitbourne. I did not get a cha~ce to respond to that open line. I do not want to discuss such things on open line. So therefore the first chance I got I decided to ask the Minister of Municipal Affairs about it. If that is not public urgency and it is out of order, I am sorry. MR.. SPEAKER : Order, please!

Before getting back to the Question Period, I do not think that a specific point has been made on which the Chair needs to make a judgment. I think the hon. minister in speaking to a point of order stated his opinion and wish that people would ask questions or refrain from asking questions on certain subjects which,in his opinion, may not be urgent etc. I think it was a general comment. I am not aware that there is a specific point of order on which a ruling is called for, at least I am not aware of that. ~1R. LUNDRIGAN: That

interpretation is correct. I was merely making a point. I spent six months before I had a question im·order. And I 4721

April 5, 1976 Tape 1758 PK - 3 SOHE liON • ~!EMBERS: Oh, oh! HR. LUNDRIGAN: am just being - if the hon . member does not mind. I am just - Sm:t liON . MEMBERS: Oh, oh! ~IR . SPEAKER: Order, please ! I have not beard what the bon. gentleman said yet. He has not finished his sentence, so I cannot really say - :-IR. LUNDRIGAl'\: t am on a point of order. MR . ROW~: You are on a point of order'? Well you did not say that! NR .

LlJNl)RlGAN: 1 am agreeing with Your Honour that my observation was in fact an observation trying to indicate to hon. members through you, Sir, that if t~e all work within the rules, a little bit hard er and so on, we would have a better Question Period, so it was not aimed at any speci fic member. SOME liON • MEMBERS: Oh, oh! HR. SPEAKER: Order , please! I consider the matter now disposed of , As I recall a question had been asked the ~1inis ter of Education, so before recognizing any other bon. member I would obviously give the minister an opportuniry to reply if he so wishes. 47Z2

April 5·; 1976. Tape ]7~q RH - 1 HON. l.J. HOUSE: Mr. Speaker, I always run into problems when these questions come in. The question was that far away now that I do not remember totally the gist of it. AN HON. MEMBER: He was talking about the school book programme . MR. HOUSE: The school text book programme, the programme of free text books of course will be discussed in the estimates. But the selection, I think, - I thought it had to do with the selection and what is the criteria for the selection of text hooks. The selection is based on the work of committees.

Committees are set up in curriculum areas, for instance in the reading programme,or in the English programme, as the questioner would knm~. There is a committee and that committee studies what kind of programme we are going to have and makes suggestions as to what text bool~s will be purchased from a number. The criteria is based on professional needs of the curriculum. That is generally all I can say about it. The department does not sit down alone, the department officials and buy off certain text hooks.

It is always done in consultation with teachers across the Province, teachers that have been selected from the various school boards. MR. LUSH: l,Tho is on the committee? That is the important thing. MR. HOUSE: I am not sure. Each committee is different. AN HON. MEMBER: There are teachers on the commit tee 1 Mll.. HOUSE: Ves. Oh, yes. Teachers right across the Province. MR. SPEAKER: I recognize the hon. gentleman for a supplementary, what I understand is a supplementary. MR.

LUSH : I realize that there are some committees, but I am wondering whether these committees go all the way through every subject,right from "k" to eleven? MR. HOUSE: I could stand to be corrected on that. I believe they do, but I '~ill find out for you and give you an answer tomorrow. _MR.. SPEAKER: The hon. member for LaPoile. .4723

lfR . !>PEAl·~ : lffi . 'ff-AP.Y: Tape 1759 PJI - 2 T'1is wiJ I he the last question and answer . lr. SpeRI-er, T would like to ask the ~ l inister ot Health tf the difficulties, if the problems that Rrose recently at the General !lospital "'hen oll the nurses called in sick, the dispute over caJ.l - out ti~, if t hnt pr~~l~~ ~s ~een resolved? tf not, ~ould the ~inister tell the House •rhat steps at:P. ?einr. taY.en to resolve the problem? !ION . 11 • GOLt..INS: !1r.

Sp'!aker, the matter to which the hon . rember refers is n ;tt;~tter hetweP n the nurses ' union, as T understantl it , and f.enernl llospital Conoration . I l·now the nurses have ~one back to work . l•le all I· no\~ that, of courRe . "'ut I unders t and that meetings are con t inuing between the tt1o $troups . 'IR . l!EARY: You are noc concerned about it . vr.. r.or.L INS : l~e nte concerned ahout it . 1\ut it is hein~t dealt with hy the ilospit<tl r.orporation at the present time . ORnEP$ OF TlW OAV: Toe C:onunitree of Supply 1 Est1mates, Mr. Sneaker . H I~ • SPf.Al<Er. : Order (2), r.of!)ll'littee of Supply .

It is moved that I do now leave the Ch~ ir. 4724

April 5, 1976, Tape 1760, Page 1 -- apb HR. HELLS: Mr. Chairman, the Heading to be called at this time is Mines and Energy. ~1R. CROSBIE: Mr. Chairman, I guess it is the usual procedure, or at least it has been the usual procedure for the department generally to be discussed in general on the first item in the vote of that department, and I presume we are going to keep to that practice. So I will say a few words before we get on to the estimates of the Department of Mines and Energy. Now, Mr.

Chairman, of course this is certainly an area of government that is of great interest these days, energy in particular, and it is an area that the public is becoming very much aware of as a result of events of the last several years. I am first going to address myself to some ouestions of energy. The House has had before in this session, of course, many petitions from people all over the Province orotesting increases in power rates in various areas of the Province.

It is not true only of this Province, of course, but in every Province in Canada, and,I would think, in every country in the Western world the same problem now exists and arises. I think that we should remember though, Mr. Chairman, that even though our rates have been going up in this Province, we arr lucky comparmtively speaking compared to other provinces and compared to other countries where the rates for power are far higher than they are in this Province. Now, Mr.

Chairman, in this Province we have the Newfoundland and Labrador Hydro,which is the successor to the Newfoundland and Labrador Power Commission, which is owned by p,overnment, publicly owned and whose mandate it has been since the 1960's to develop and to generate any further sources of energy that are needed on the Island of Newfoundland, and in certain areas to distribute it. They have a monoply on the generation of power but they share the distribution of power with other enterprises, in particular, Newfoundland Light and Power Company Limited and Bowater Power.

In addition to their other duties they are also in '412~

April 5, 1976, Tape 1760, Page 2 -- apb "'R. CROSBIE: charge of administering and of car~ing out the duties of the Rural Electrification Authority in Newfoundland to provide power to rural areas. So in these estimates there are several votes that have to do with Newfoundland and Labrador Hydro.

One vote is the vote under the Industrial Incentives Act, the second vote is R vote for the Newfoundland Power Distribution District, or Rural Electrification Authority on the current account, and the third vote is the Rur~l Electrification on capital account, Now the vote under Industrial Incentives, 1!r. r.hairman, is necessary because the Government of Newfoundland hctd to make up the difference to Newfoundland and Labrador Hydro between the cost to them of generating and distributing power on the Tsland,and in particular to certain industries and to Newfoundland Light also, and the price that they received for doinp, that.

Because under the terms of a trust deed entered into by the Power Commission originally, they are required to operate not at a loss. They cannot operate at a loss. If they do they are in violation of that trust deed and their original bond issue. As a result of contracts entered into some years ago,~ewfoundland Labrador Hydro operates at a loss with respect to certain contracts. All members of the House know that one of those contracts is the contract with respect to ERCO.

Another of those contracts is with respect to Newfoundland Light and Power, because a contract 1Jcts entered into in 196 7 to supply Ne1Jfoundland T~ight and Power with certain energy at a price of 6 mils per kilowatt-hour without an escalation clause. As the cost on the system rose over the intervening years due to inflation and the rest of it, Newfoundland and Labrador Hydro started to suffer losses on the contract which then had to be absorbed by the gave rnment. They have lost money with respect to the contract with llowater power, and 1-1ith Price, 4726

April 5, 1976 Tape 1761 IB-1 '1-'lR. CROSBIE: and government has had eadh year to vote monies to make up the difference between what Hydro is receiving from those customers and what it was costing them. This year on the estimates there is an amount requested of $4.4 million to be paid direct by the government in connection with those incentives.

But in addition to that amount which has been asked for in the estimates~there is another amount of approximately $5.2 million,! believe the figure is or that is close enough,which Newfoundland and Labrador Hydro is going to receive from CFLCo by way of the royalty of fifty cents per horsepower and the rental of 8 per cent of their net profits. The government of Newfoundland has assigned to Newfoundland and Labrador Hydro the right to receive those amounts.in future to help with respect to the losses they are suffering on these contracts.

So they would actually be receiving this year between $9 million and $10 million and it has been necessary to make up the difference between what they are losing on certain contracts and what their costs are. In addition in these estimates another amount, approximately $11 million,is being voted for the Rural Electrification Authority, which is the amount that we are subsidizing their operations.

The expenditures that they have to incur less the revenue they receive in these ruraJ areas leaves a deficit of some $11 million which the people of the Province are asked to pay out of the general revenue to subsidize the Rural F.lectrification operations in the Province. t~. SMALLWOOn: $11 million? ~~. CROSBIE: Just in excess of $11 million. rrn. SMALLWOOD: That is just operation or is it both? MR. CROSBIE: No, no. That is operations alone. There is a further amount asked for in these estimates, Mr.

Speaker, of some $5,300,000 that we are being asked to vote the REA which is for capital account and which involves work on certain transmission lines, work on additional diesel generators in various areas and the like. That is also voted by this House because - MR. SMALLWOOD: Row many diesel generating plants are there now? 4727

April 5, 1976 Tape 1761 PR.. ~ROSBIE: I could not tell you right of. 1~. R~ALLWOOn: There are not nearly as many as there were, are there? IB-2 MJl. CROSBIE: No, but I do not have the exact number 1 but there are still at least twenty or thirty are~s where diesels have to be used. ~ IR. SHALLI-:OOD: Is there any plan to replace them with direct lines~ ~~- r nOSBIE1__ Some of the money asked for is to connect up areas to the hydro so that you can cease using diesels which are very, very expensive. MP • Sl~AI.LWOOD: Has the hon. m:l.nister got the names of the places and the population and so on?

I'll. r.ROSBH: I have not got all that at my fingertips, ~r. ~hatrman, but when we get on the detail of the estimates,you know,I can give more info~ation on that. But that is $5.3 million. }!R. S ~~LWOOD : Is the minister going to have officials s:ltting be s :lde h im ther e? :-'r.. CROSlliE: l-lhen we get throuph, ~·r. Chairman, with the general debate then I will have officials here to assist. But I have not asked them to come for the general debate because one never kno~1s how long the general debate is going to rage on. If previous years are any example, it might be days or even weeks.

But they lo!ill be here when we get down to the details of the estimates. So, Mr. rhairman, that is $5.3 million that the Rural Electrification system cannot generate itself and all its capital expenditures have to be paid over to :It hy the govern~~~ent,so that in these estimates the Newfoundland and Labrador Hydro and the 'Pural Electrification Authority are really rece:lv:l .ng from the publ:lc chest altogether possibly about $26 !'>ill:lon in these estimates to meet costs that they cannot p:enerate the revenue themselves to meet. Th:l.s is a substantial contribut:lon, vr. Chairman.

I do not want to f.O into th:ls in any detail,but in connection with the Newfoundland Light and Power situation I did give information to the House in a release some time ago as to what it had cost over the 4728

April 5, 1976 "Cape 1761 IB-3 ~1R. CROSBIE: years for the government to make up the difference on the Newfoutldland Light and Power contract between the 8lllount that they were receiving in price from the Newfoundland Light and Power and the amount it was costing New:f;oundland and Labrador Hydro. These were very, very considerable amounts.

For e~le - I have got them here - if we start from 1970-1971 it was $1.9 mil~ion that year, and then went to $4.8 million the next year, then $4.7 million then $6.1 million: in 1973-1976; $6.4 million in 1974 and $5.1 million last year despite the fact that there was an increase last year in rates charged to Newfoundland Light by Newfoundland Hydro from six to. ·9. 7 mils per kilowatt- hour.

Despite .that - that increase came · on Ap·ru 1, the calendar year was three months gone - despite that we still had to make up a difference of $5 .1 million on the Newfoundland Light contract even with that increase in the wholesale rate for power . In the year ahead, the year that we are :l.n now, it has been decided that Newfoundland Hydro has pel'lllission to infora NewfouncUand Light that they wish another increase from 9. 7 mils -p~- - kilowatt...: · hour to come into effect next 4729

April 5, 1976 Tape 1762 PK - 1 }1r. Crosbie: July 1 when the year is half over. And, of course, there has to be an application to the Public Utilities Board by Newfoundland Light, associated with Newfoundland Hydro 1 to have that approved 1 If that increase is approved by July 1, there will still be a loss of some $5.2 million or $5.1 million, or in that area, on the Newfoundland Light contract, because any increase will come half way through the year. So there will still be a substantial loss on the Newfoundland Light contract.

The subsidies in previous years on other operations such as ERCO were $3.9 million, in 1970-1971; $5.3 million, 1971- 1972; $4.5 million, 1972-1973; $4.6 million, 1973-1974; $3.5 million last year I am sorry, 1974 for nine months; $3.2 million last year because they were not operating a long period of the year last year, and there will be another amount, of course, for the year corning up. Pri~e( N fld.) contract, Bowaters have lost- HR. SMALLWOOD: HR. CROSBIE: get down to the or $4 million. MR. SMALLWOOD: runnin g? }ffi. CROSBIE: How much in the year coming up? Is that known? I have it here somewhere, Mr.

Speaker, when we it is in the area of $3.5 million Will it depend on whether they get the second furnace Yes. At the moment they have one furnace running, and they may or may not reconstitute the second furnace. So these are considerable - MR . SMALWOOD: If they do not? I,IR. CROSBIJ:: If they do not then - the amount that we have in t he estimates is based on their position now. MR . SMALLI'IOOD : Does the minister know whether they fold if they dec i de not to rebuild the second furnace, does that .mount to a decision to fold? MR. CROSBIE: I mean,we do not know, Mr. Speaker, whether they would fold or not.

You know, we would only know, I suppose, after the company has experienced this year, and then makes a decision. We have not heard anything in the meantime. They certainly are gming 4.730

April 5, 1976 Tape 1762 PK- 2 Mr. Crosbie: to spend this year operating as they are, and then they are gaing to make a decision proba~ly in the next several months as to whether they will do work on the second furnace. So, Mr. Chairman, the position then with respect to energy costs is that these costs are increasing, and they are increasing in every Province of Canada.

And when we look at what has happe~d,for example, here 18 Ontario Hydro,a rate increase of 22 per cent, and the Chairman of Ontario Hydro says, quoted in the Globe and Mail , March 3, "Ontario Hydro customers can expect rate increases of at least 22 per cent a year over the next few years, if the lights are to stay on." As I have said in the House before and I will aay it again, Mr.

Chairman, we have to recognize the fact and there is nothing any government or any company can do about it,that ra~es are going to continue going up, and that it is extremely likely that over the next five or six years rates may be double what they are now. MR. SMALLWOOD: That is fossil fuel generated - MR. CROSBIE: Fossil or hydro. MR. SMALLWOOD: Why hydro? MR. CROSBIE: Fossil, hydro or whatever you want to look at. MR. SMALLWOOD: Why hydro? MR. CROSBIE: Because the hydro sites, Mr. Chairman, are further and further away, and more and more remote, and you have high transmission costs. MR.

SMALLWOOD: in operation? MR. CROSBIE: But what about those that are there? Those that are Those that are in operation, Mr. Chairman - the cost on the system are blended costs. You have to take your system and see what the costs are on the whole system, and that gives you your cost. Some of the cost will be steam, and Ontario Hydro will be nuclear, some will be old hydro which be a lower cost and so on, but when you pool it all, the costs are increasing of all of it. And on the Newfoundland system,which is a relatively new system, we "4-731

April 5, 1976 Tape 176 2 PK- 3 'lr . Crosbie , do not have any really cheap hydro to any great ex tent that was there years ago . It is all fairly recent , so that, you know, you do not have a real old systen to fall back on to keep the cost down. Cut no mat t er what the system is these costs arc t,oin& to increase . VR . S~\ALLHOOD : lfuat is the comparison of the Hydro Commission today than say t en yea rs ago? l!ow much does it cost them now to produce a kilowatt hour of electricity compared with then? ~IR . CROSBIE: Hell t he cost on our syste m now, you know, J am giving an approxima t ion, lir .

Chairman , but t he gene ral overall cost on the ~et~fo un dland syste m now is somewhere in the area of 12 mils or 13 rri.ls . 1·!R . StVILLHOOD: Now t hat is averaging i t ou t from t he be~inning to now? That is averaging what the costs are this yea r . ~lfiLLI'O('lll: No, but - MIL CROSBIE: The costs of energy this yea r on the whole sys tem overall '~ill be 12 mils to 13 mils . Now, Hr. Chairman - MR . SNJ\LLWOOD: lots . HR.

CROSBIE: Yes, but the cinister cao split tha t into two Well you can split thea in to more than rwo, ~1r .Chairman , this will be made up of a whole se rie s of thin gs ; power from Bay d 'J;:spoi r, po,..,ers from other generating sources , power from the steam plant at Holyrood . NR . SW,LWOOD: Yes. MR . CROSBIE: When this is all blend ed togeth er then you will get o bl ended cos t. H,R . SMALLI~OOD : Yes . 4732.

April 5, 1<176. !IlL CROSBIE: Tape 1763 RH - 1 Now, the cost of hydro power has at least doubled over the last five er six years. I ;ust ~•ant to explain that, Mr. Speaker. I just ~vrote a letter to the Grand Falls Chamber of Commerce outlining - I had a letter from them askinp. why were costs !I;Oing up and more information. I got a couple of copiP.s here if anybody ~•ants a copy. 1\R. Sl!ALLHOOD: I would like a copy. IIR. r.ROSEIE: The answer to- well,there is nobody around here but I Hill send you over a copy when somebody turns up. They asked a question about the increasing costs of power.

"The answer to your 'question ia that the cost of providing this service has been rising over the past dec•dP.t but at a much greater rate over the last five years, It will continue to rise in the short-term future at least:' Then in more rletail, "Hydro's labour rates have practically tripled since 1967. In 1967 the rate for a journeyman linesman was $2. 45 an hour. Today it is $7. 00 per hour.'' It is likely to go up this year to maybe $7.24 or whatever it ends up at.

"This type of increase is reflected through the whole wage package of Hydro In the 1975 budp,et wages and salaries were thirteen per cent of the total cost of producing and transmittinp. the energy.'' If we want to look at Hydro today compared to 1967 the increase in wages and salaries and so on are terrific. This affects, this is thirteen per cent of the cost of producinp. and transmitting energy. "1R. S!!ALLHOOD: That is the operating cost or the capital cost and all, everything? Labour would not be thirteen per cent of the combined capital anrl operating costs. ~lR.

CROSBIE: The total cost of producing and transmitting energy that has to be re.flected in the price that you get is thirteen per cent. Wages are thirteen pP.r cent. }IR. S}IALLWOOD: Of what? ~fR- r.ROSBIF.: Of the cost, of the cost. Mn. Sl1ALLWOOD: Well how does the minister - what does he mean by - l{R. CROSBIE: Well you have got cost of· oil and you have got the people who work there, their wages and their salaries,and the cost of wire and . 4733

flpril 5, 1Q71i. "R. r.r.OSBIF: Tape 1763 RH - 2 the cost of this, that and the other. Of all of fhose costs the current cost of operating the system, wages are thirteen per cent of the total cost of producing and transmitting the energy. Now the next item, Hr. Chairman, fuel cost·. "This was a relatively small portion of Hydro'• cost in the past but it is going to become more and more significant. As late as 1970 Hydro paid $1.82 per barrel for Hunker r. oil burnt at Holyrood. This represented 3.5 tenths of a cent per kilowatt hour at that station.

Hydro's average price for the same fuel in 197 5 Has $7.33 per barrel or about 1. 4 cents per kilowatt hour. Even that price was subsidized by the Government of Canada because the 1.rorld price is $12.50 per barrel or approximately 2.lf cents per kilowatt hour." He all know, Hr. Chairman, that on July 1 the Governl'lent of Canada is going to permit a further increase. They are going to decrease the subsidy ann oil is likely to go up at least $2.00 a barrel. There is no question that within five years oil will he up to $12.00, $11+.00 a barrel.

I mean, there is nothing that this government or any government can do about it. So it is the fuel cost that is becoming more and more important. "In 1"75 the cost of fuel re>Jresented ten per cent of the overall cost of operation of Hydro. It is estimated this item could he as high as fifty per cent of the total cost by 19RO and that by that time the Government of Canada subsidy will have been totally remover!." So in 1.975 the fuel cost l¥as ten per cent of the total cost of operatinp, the system. This year it 1¥ill he higher.

How much higher von cannot tell for sure because it depends on how the economy is this vear ancl hoH the inrlustrial load goes and so on. As all hon. gentlemen kno1.r the oil refinery is down, etc. , and so on. This reduces the consumption. Rut it 1rlll be more than ten per cent this year. It may he fifte .en. The more oil you have to burn the more expensive it is to produce enerr,y on the system. So you have fuel going up. You got the labour going up. Thirteen ner cent last year was labour. Ten per cent was fuel. Third~ "The interest 4734

Al>ril 5, 1976. MR. CROSBIE: Tape 1763 R1! - 3 rate for new capital to build uteuions that are required to meet customers' needa bas escalated fro• five and a quar~er per cent tn-i967 to ten and !;hree quarter per cent in 1975." So your interest cost is doubled. "The cost of installing new facilities is also gone up by a considerable margip, For example, the thermal gene'tating units such as the one installed at R«;>lyrood in 1970 at a C()St of $160 per kilowatt is now costing $4511 per kilowatt:' The capital costs of it are gone up because of the inflation of the last six years.

"Transmission lirtes that were built in lq67 at a cost of $50,000 a mile are now costing $125,000 a mile. These two factors, interest rates and the capital cost of new plant,combined with a sustained high utility load growth have pushed Hydro's interest expense and debt service payments in 1975 to twice what they were in 1971. In 1975 this i:tem of expense ,which was largely uncontrollable,accounted for si~y- five per cent of HydTo' s coats.'' So capital costs

April 5, 1976 Tape 1764 IB-1 lfP. CJl O~B IE: ;mel intere~t costs have certainly doubled in the last five ye10.rs, and the figures are here in this Jetter. There is another copy. If the bon. member across wants a copy of rhe letter, there is a copy here for hil'l. 1'These three items account for 8B per cent of the cost of operating Hydro's generatfon and transmission facilHi.es.

They have escalated by more than t'"o anrl a half times thefr 19fi7 value:' "The other t'"elve per cent :Includes items such as insurance, maintenance, materfals, equipment rentals, professional services, etc.,which have also experfencec high rates of escalatfon.

A good deal of thoqe items are uncontrollable costs and for a large part are influenced by national and international economies." Then the Jetter goes on to explain about the ~ewfoundland Lir,ht contract which was fixed from 1967 to 1974 without any change in the rate causing us to have to pay these heavy subsidies, that ft is necessary for the ful] cost of supplying eJectricity to the rate payer over the next couple of years to be -.,0rne by the rate payer. It points out that n similar inflationary situation exists with the Ne\~founrlland Light.

Nov their rates are controlled by the Public l'tilities C'omm1ssion so they have to go to them for permiss1on or c0nsent. Their bunker C on ts up. Their costs a£ construction are up. Their interest rates are up and so on. It 1s the same thing for Newfoundlanc' L1ght . . .'~9'!ol,Ll·l00D:_ Their profits are up. No, their profits are not up, ~·r. Chairman. Their profits are not up compared to the total amount 1nvested.

They are allowed a certain rate of return on the amount they have invested • The amount they have invested increases every year. _!_T_._ SYfi.!.!·:·!~ The ratio has not :!.mproved? __ T. r.ROSRTE: No. They are only allowed the amount of return that the Public PtiUttes r.ornmission permits them. 1'1' . S•' LLW0nJ'I: The act permits. ~'R. CPOSBIE: h'hich the col!IITlission permits under the act And regulations and the la,.r that i!' appli.cable. That has not ch;m~~:ed. Rut their investment has changed. Their rate base has chanr-ed because 4736

AprH 5, 1976 Tape 1764 IB-2 1~. CROSBIE: they have been lnvesting and borrowing tens of millions of dollars every year to meet the demand in their area for service. So the total amount of profit they would make as a gress figure would be increasing every year, but the amount they are making on what they have invested has not increased. And if they are not going to get a return on investment ·, it is qu:f.te silllple; they will not borrow money and they will not have share issues to get the money to expand their services. How could they?

I mean,no one is going to loan money to Newfoundland I.ight and Power at 5 per cent interest when they can loan it to someone else for eleven? They have got to pay the going rate. No one is going to invest in shares of Newfoundland Light if they onJy get a dividend of five per cent ,.men they can invest in shares of Calgary power and get a dividend of say, twelve or fourteen per cent, or some other shares. So they have got to compete in the money market for their money. That is all taken into consideration by the Public UtiJities Commission. ~'P.

S¥ALLl~OOD: By the act itself. ~R.Q.S.!!.!!!__ And the act permits that. Then we give examples of how rates have gone up in certain other provinces. Now between 1968 and 1974 there was very little increase in rates in thi.s Province .because of this subsirlization while increases were going on in other provinces. They are now going on, of course, in every province. So this letter, ~lr. Chairman, explains some of the reasons for these increases. The increases are based on increased costs. It is just as s:lmpJ e as that.

Unless the taxpayers of the Province are going to bear all these costs,and the person who consumes the energy not, then rates have to go up. Now that is not popular. People do not want :l.t. They do not want the electric light rates to go up. We do not want them to go up. You do not want them to go up. No one wants them to go up. If they go up, they go up because there is not any choice. No politician wants electric light rates to go up. No politician wants tax rates to go up. We all want them 4737

April S, 1976 Tape 1764 I"B-3 t'P.. fRQSSIF.: to go cown. P.ut when nothing can be done about it, the situation is people have to pay more because the energy i s cos tin g more. Now, }'r . Speaker, 1f you look at the inc reases in th is Province compare~ to other provinces you will see that we have not done badly here. If you look at rates over tht> la!>t five years in various locations across ranada, you will see that the rates in St. John's, Newfoundland in the last five years have ~one up twenty-ei~ht rer cent . In re~tna they went up thirty-one per cent. ~ontreal, thirty-~~ per cent .

Winnipeg, thirty-six percent . ral gary , forty­ eir,ht per cent . rharlotteto~, fifty-nine per cent. Halifax, sixty-seven per cent. To ron to, eighty-three per cent IIJld "ancouver only fourt een per cent and St . John, New Brunswick, fifteen per cent . So over the last five yea rs we were the third lowest insofar as increases in rates are concerned. A comparison of cost increases in C:anada, the United States and F.urope shtws ranadian prices are about fifty to seventy-five per cent of the averar.e prices in the l"nited States and Europe. 4738

April 5, 1976 Tape No. 1765 NM- 1 HR. CROSBIE: But it is estimated that the electricity rates and costs in Canada as a whole can be anticipated to continue at an annual rate of ten to fifteen per cent, with the higher figures in areas heavily dependent on fossil fuel generation, such as Nova Scotia and P.E.I., where at the moment they are wholly dependent really on more fossil fuel. These are just the facts that we and everyone else has to face. Well,we have had a lot of petitions in the House, ~fr.

Speaker, and we are well aware that this is a very touchy issue and naturally if people are asked to sign a petition to protest electric light rates they are going to sign it. And when a document is sent all over the Province by the Leader of the Opposition asking the people to whom he sends it to have it signed and send it back,well they sign it and send it back. Why would they not? There is nothing to lose.by doing that. And that is what happened. MR. SMALLWOOD: Mr. Chairman, would the minister allow a question?

The Rural Electrification, I think they call it the REA, is it, Rural Electrification Administration is asking for the current year for $11 million from the House here so that they can subsidize the price of electricity to the homes that"they serve. Has the rate charged to the customers of the administration, the Rural Electrification Administration gone up much? I mean there has been an increase in the rates charged outside the areas of rural electrification, what about within those areas, what is the story of rate increases?

And while· the minister is answering would he tell me also how the $11 million that they want now for this current twelve months compares with previous years? I have a feeling that he has already told me that,but perhaps he 'muld include it with this answer? MR. CROSBIE: Well it has increased, Mr. Speaker. When we get down to that vote I will have more particulars. I am just trying to deal with general matters now. ':4739

April 5, 1