' ....... Volume XLI Friday Province of Newfoundland FORTY -FIRST GENERAL ASSEMBLY OF NEWFOUNDLAND Second Session VERBATIM REPORT {Hansard} Speaker: Honourable Thomas Lush [Preliminary Transcript] Number 51 8 June 1990

fhe H6use met at 9:00a.m . Min. Speake1n (lush): Oindc:~r, please! The han. the Minister of Municipal and Provincial Affairs. Mr. Gullaqe: Min. SpE!akE:~r, I IAJOuld just lib:! to make a br·ief cornm~~nt commending Ray 0 1Neill, who was just: 1necent.ly electt,~d P1nesident of the Federation of Municipalities, l~he Nat.ional Fc:,deration. I think it s hou1d be ac I< nOIAJ1edgc:~d that he spent some thre€! years, I believe, on the National Executive - Second Vice-President, First Vice-President - and now he has taken on the top role in the Canadian FedE:'ration.

I think he should be comrnE:~ nd ed For that and for his lAJOink throughout the YE:'ars for the Federation of Municipalities, particularly on the Mainland, aJ.though he 1.1-Jas involved in the Newfoundland Federation as well. It is particularly opportune when we consider that next year NeLAJfound1and, h(!lnE:~ in St. John 1 s, IAlill be ·hosting the Canadian Federation of Municipalit.tes in Ul!:!:i.r National Convention.

I am told, because I was up thc:~r·e this Wl':!ek for the Convention, that. we anticipatE! sornE~ 2000 delegates, so it. wi11 be indeed a large Convention l;..ri.th JneplneSE!ntation from throughout t.he country, throughout Canada and the l:E:.J'TitoriE:'S. At that: t.ime, of couJnse, hE:! LAdll bE! concluding his tet"rn of of f'ice. So, I think hH is to be commended and we should be ve1ny proud. It '.i.s only l:he Sl':'Cond time, I beloi.eve, that l!.Je haVE! had a National P1nesident. The other time was President nationally, the 50s. I commendation 0 1Nei1l.

LAJhe n of bc~ck, IAIOUld l:o Mayor Mews was the Federation I believe, in like a letter of go to Councillor Ll June 8, 1990 Vol XLI Some Han. Members : Hear, hear! Mr. Speake!": The hon. thE! ME!I'ribE!r for St. John 1s East. ~ .. ?. .............. Q..Id.ff : M I" . S p E:~ a k C:~ r , I t a k E~ g1neat pll':'aSUI"l'~ 'in joini.ng IAJ:i.th rny collE!a~JLIE:~ the hon. M:i.nistE:!ln oF Municipal and Provincial AfFairs in conqJnatu1at:i.ng rny co1].E:!aqw:•, Mr. 0 1Nei11, on h:is at.t.ain.ing the Presidency of this orqanization.

It is, as l:.he Mintsl:E'I'' poinl:c:'d out, only the second toi.ntu -.i.n the h:isto1ny of " l:.he FE!d1:~1"a t.ion t-:.hey have h a cl a N E:• l!.Jf o u n d 1 and PInes i d (~ n t , and I think it is thirty years since t h C::' 1 as t occasion . I IAIO u 1 cl also like, at t-:.his t.ime, t.o say that the Newfound1and delegatoi.on, and the Federation, greatly appi"E:~Ciatecl the at.Lr:'ndancE• of- l..he Minister Frorn NeiJJfound1ancl a L: l~he Convention, and I IAJou1d 1 ike to thank htrn for takinq t.hE:' l:.itTlc::' l~o carne and tc:.-1.ke that kind o f an interest in Municipa1 Af fairs.

His presence was not only noted by l~he other delegations, but- I think the of f -the - floor conversations that hE! IJJas able to hold IAiith sorne of l: he N e l!.Jf o u n d1 and ~~I" o u p LAJ h o IAI e l" E! thE!I~e frorn all ovc::!r the:~ Pr·ov ·ince, l!.Jould be en1ightening bo t.h Fr·on1 the Minister 1s perspective and f 1n o rn o u r s . So , I b e 1 "i e v c:• :i L lA I i'l s a V~'!lny posit.tve eXE!rc.ise <:-lnd I IJJOt.l1cl encourage the Minister to corne agatn. Mr. S p eak !:" ln: BE!fOl"B tnovinq on t.o the routine business, this might bE~ an approp1ntate place t.o retTlind han.

Mc:'rnbers that LAJhc:'n IAJE:! ~~E:! t.. L.tp in the House to give congratulations or condolences, whatever it rnight be, I IAJant hon. Members to knOIAJ, at Lhis point in time, theine is no pi"ov'is'ion in our· Standing Or'dE~Jns, and tAlE' just do it. at the leave oF the House. l'herefore there is an onus on han. Mernbers to do it rather quickly. No. S1 f\ 1

I do· not knolAJ Luhether, tn the new l"Ules and r'E!gulat.ions, lAHc~ have PI"OVision Fol" I:: hat, but: iF we follow the Ottawa scene, then I think it is just 90 seconds, it is just a minute and a half. So, I just want hon. Members to remember that when they are standing up. I am not suggesting that the hon. MEHnbers today were lengthy, I just wanted to rnc-.lke the point For the futuJ"e, because I hav~:~ noticod in the past that some hon. Members had bt:~en lengthy, and lJJe should remember that we are just doing it at the leave of the House, and tJJe should just keE•p the comments as brief as possible.

Statements by Ministers ~ - Speaker: The hon. the Minister of Finance. Mr. Speaker, recently in this Honourable House comments were ll'lade t.~.rith respect: to the Provinco's borrowing in the U.S. bond market. Also, statements attributed to the Federal Minister oF Finance were reported in l::he media. For the benefit of Honourable Members, I would like to clarify some of the factors that inFluence Government borrowings particularly in the United States market. Mr.

Speake!", the J"ate al: lAJhich Canadian GoveJ"nments borrow in the U.S. rnarke l~. depends in part on the going rate for comparable U.S. tr~:~asui"Y bonds, and on the spr~~ad from thes~:' trPasuries rc:'por'tE!d in basis points or hundrel::hs of a per cent, sprE!ads which difFE!r fol" a number oF reasons. Thirty year U.S. treasury bonds were yielding about 8.4 per cent 1.. 2 June 8, 1.990 Vol X1..1 in early February and generally rose l::ill they surpassed 9.0 per cent in late April, thereafter dropping until yesterday they again yielded about 8 .4 per cent. Mr.

Speaker, lhe GovE•rrmiEHlt of Canada would have to oFfer' highel~ interest rates than these to borrow money in the American market and provinces even highc:~r. The cost of borrolAring in Lhe U n i l: e d S t a t€• s f o r' a 11 C a n ad "i. a n provinces is determined by a number Of factors inc1uding recent economic performance, economic expectations, recent budgets ctnd financial performance, the borrower's debt position, the valu~:' of the CanadJan clo11al", inter'est raU!S in Canada, and the size of the federa1 deficit.

Most tmporl.:ant among l.:hese iterns are the Province's debt position and the general view of Canada. On the first item, Mr. Speaker, the Province's debt position is something wh.i.ch this Gov~:!l~nrnent. inherited from the previous AdministJ"ation on Apri1 20, 1989. It lAJas something thai · tAJas a1lolAJecl to go unchecked since 1971 and, I regret to say, will be a burden not only on the curi"E!nt I~E!~;:ici~Hlts of this Province, but~ on Futt.IJ"e generations.

FOl"tunatE•ly, l'ny colleagues and I have been ablE! to bring in LlAJO Buclqets lAr:i th surpluses on current account which is at J.r:=!ast a staJ"l:: in thE! r':iqhL direction towards fiscal responsi .bi1ity. This GovernnJE:'nt is on thE• J~oacl to irnpl"ov:ing l:he ftscal posit.J .on o·i t h r:' P r' o v i n c e b u t i t tAri 1 1 t a k ~~ d long time before we are able to undo the mistakes of the past. Mr. SpE:'akE!r', it goes lAJithout saying that without the debt burden left by the previous Administration new borrowings by No. 51 ~~ 2

the Province would now be considerably cheaper. A second important factor in the cost of borrotAJing is the si t.uation in Canada and how the Canadian Government is performing. As we all know, thE! Fede1nal Govel"nmE!nt' s pr:'!rformance has been disrna1. The federal deficit is at unacceptable levels, not just to U.S. investors, but to investors throughout the world. The federal Government has been unwilling to do what is necessary.

Their poJ.icy has bE!E!n to keep shol"t--tenn inter·est rat"=1S VE!I"Y high, yet they are by far the J.argest borrower in the country and their debt is primarily in the short-term market. ThE! only meaningful expenditure reductions that they have '.implemented have com"=1 at the expense of the provinces through cuts in transfer payments. They have demonstrated little lAJillingness to cut the fat that is persistent throughout the Federal system. Mr. Speaker, the cost for Pl"ovince•s to boi"I"OW in Canada is, al:. the present time, PI"Ohibitive.

Many Canadian provinces have had to do th,~ir borrot ... ring recently in the United States - Quebec, Manitoba, New BI"Unst ... Jick, Albel"ta, Ontario Hycii"O, as lAJell as NetAJfoundl<:.tnd. The cost. to provinces of boJ"rotAJ:ing in the Un:it~;~d States :is ch1l::E!I"I'IIi.nE•d also by the value of t.he Canadian do11al", wh:i.ch is constantly bEdng proppt~d up aJ"t.'.ificially by the Bank of Canada with the support of the FedE!I"al Govennnent, in t.he belief that this is how to sl::op inflation. Mr.

SpeakE!r, a pr·opped up Canadian dollar means that we:1 get from a U.S. issue FetJJer· Canadian dollars than we should. Our rr,1al intE•I"es t ral:es a1ne thus higher than they appeal". The 1.,.3 June 8, 1990 Vol XLI Federal Government's policies of high int.E!r,~st rates and dn artificially high Canadian dollar are hurting provincial governments, they are hurting export industries and, indeed, they ar"=1 hurting aJ.mos-t evE~Iny business, every borrower in Canada. Some Hon. Members: Shame! Dl". l<itchE!n : Mr .

SFl(~akE!r, I rnenti.ont::1d l:he high~~l" basi<; points spt""=1ad bet.lAJeen intel"est 1nc~tes fo1n Canadian bonds and those of comparable U.S. treasuries. For Canada, the highe1n spl"ead ha~; increased since January, and so has thE! spl""=1acl fat" a11 provinces includ'.ing Newfoundland. Mr. Speak e1n, the rnai n l"E:'a son f Ol" thE! increasing spread '.is Lake but the irresponsible actions Federal Government - not Meech fiscally of l:.he Some Hon. Members: HE!c:\1'', hear! Dr. Kitchen: - including lheir budget, their GSr, and Lhe'.ir artificially high Canadian dollar. Ml".

Spe:'ai<E~I", I tAJi.sh to ciE~ny emphatically the statement attlnibutE•d t o t hE~ FE!Ck!lna1 Finanu:• MirdstE•r ·that.-. our rE~CI::!nl:. ~liPiO million issue cost lhis Province from $20 million l:.o $22 million extt"a I:H~caus~'! of ME!ech Lake. Ml". SP"='aker that. issue iAJas ar'l"anqecl s orne lAJ e <') k s a ~J o , t h e a g I" e e 1 n e n l.. tAl a s made on May 18, and signl:!cl on June ~i. Ml".

Speake!" I !Alas :i.n NE:'lAJ Yol''k on Tuesday to att.encl l:.he Fo1·'1na1 closing of that issue. lhe Province's underwril:.ers Merl"i11-Lynch, Salomon Bl"ot hE•I"s, I~RC Dominion and Scotid McLE!Od assured rne that the i ssue was a succ1:=!SS and that a.ll l:he bonds hacl been placed IAd t h inves l::o1ns. They al"e 1ooldng forward to dc•al ing with us again. No. ~:; 1 1n

Some Han. Members: Hear, hear! Qr.. .:._._Ki tc ,hen: Officials in our Department of Finance and the members of this Administration are very pleased with the interest rate, which at 9 7/8 pe1n cent, is historically quite good. Our credit rating has been confirmed and tAle receivE•d a good reception by the financial marketing agencies in the United States. Mr. Speaker, the timing of that issue lAJas impeccable. Had we borrotAJed a f1':!W days earlier or a fetAl days later the interest rate tA.Jould have been higher.

We were able to thtneacl thE! needle, to find that window of opportunity between declining yiE!lds on US trE:~asuries and increasing basis points spread for Canadian issues. We borrowed at 120 basis points off 8.69 US treasuries for a yield to our investors of 9.90 per cent. Mr. Speaker. this is not the first wise fiscal move since this Government took office.

I remind Members of our money-saving Japanese yen deal last year, of our deci.sion this spring to bring in the Health and Post-Secondary Education Tax in rE!Sponse to the Federal Government 1 s cuts in EstabJ.ishE!cl Programs Financing for health and post-secondary education, our decision to make paymr:~nts to meet t:he unfunded liability of our pension funds, and our taking advantage last year of the inverse yield curve of widened negative spreads between long and short-term interest rates. Mr. Speaker. at long last the ·finances of this Province arE! in capable, prudent hands. Some Hon . Members: Hear. hear!

Dr. Kitchen: As far· as Mr . Wi1son 1 s comments ar(c' conce1nned. I L 4- June 8, 1990 Vol XLI have no altE!rnat.ive but to dtsrn:i.ss them as just another attempt to frighten Canadians into accepting the ME!ech Lake Accord. IF he is truly concerned about thE:• h'i.gh cost of borrotAring money in Canada th(:'n hE! rrdght suggE!St to thr:• Bank of Canada that. it take :iiTllllediatE! steps to lower in'l:E!rest ratr:'S. and to relievE:~ GoVE!rnrnents, busin~':lsses and the people of Canada of Lhe unnecessary burden of an artificially high Canad:ian dollar. ?.g me Ji.Q!l..:.. ... l1.f .. !!!.~-~ ..

L~ . : Hea1n, hE!ar! Mr. Speaker: The hon. Hw ME:!Hli:lE:!l~ for Mount Pearl. Mr. Windsor: rhank you, Mr . SpE!aker. I thought the madman lAJas Ottawa. but I lAJas wrong. left one behind. gone to HE! has The Ministe1n's stat:el'l'lE!nt.s s<:,1ys a numbetn oF things <:~nd to sotnE! degree he is right. 1 congratulate his oFficials on threading the needle because the Minister ne(:'d not l:.akE! any cr·udit. For that, thE:' M:inislJ'•l" IAJOu1d nol: know a needle if he saw one, neither lAJould he know an :inverse curve if he satA.J one. Mr. Spt'akL~r.

Any wise and prudent financial decisions that have b1~E!n rn<~de hdve been made by his officiaJs and c e I" t a :in l y no t:. by that: :inc o 1n p e t·: 1:• n t: Ministf,'l". Mr. Speaker·. I agrE!E:' 1.1Jit:h onE:' other thing. The fout" th paragl·'<:·:tph of his statement has a Jot of truth in it . It says l:he cost of borl"owing in l:.hE! Un.itE!cl Sti:~t .Ps fot" all Canadian pl"ovinces 1s detE:~rrnin(c~d by a number of f~ac l:OI"S, incJ.ud'ing r·ecent econotn'.ic performance, hence tho high borrowing rate, because oF this Governrnent 1 s E!COnom:ic No. 51 1~4

performance. Economic expectations - and hE!r'o is where we get Meech Lake in, Min. SpE!akein there is absolutely no confidence left in the economic expectations in this Province. The economy of this Province is now at the worst stage it has been in recent history as a r·esult of both the fiscal poJ.icies and the constitutional policies of this Government. The actions of the Premier of this Province in Ottawa today ai"e _disgraceful, Mr. Speaker, and he alone is r·esponsible foin l:ry"ing to destroy Canada. Min. SpE!akei", hE:' is doing a good job of it.

On t.he Tokyo stock E!Xchange last night the Canadian dollar fell by 1.5 per cent, the greatest drop in the Canadian dollar in histoi"Y, as a result of the pE:~i"formance of Ml". Wells in Ottawa. Some H on . Memb e.!:.?.: Hear, hear! Mr. Windsor: rhe Minister says recent Budgets are a factor indeed they are, Mr. Speaker, and we ali knoJ.lj about the Minister 1 s r·ecenl~. Budget. We all knotAJ what that had done, not only to economic exp~~ctations, but to the economy of today.

And if thE:' Minister would get out of his officE:' and find out tAJhat i.s going on tAJiLh the econo1ny of Newfoundland and Labrador, he IAJou.ld F"ind out L1.Je are "in l:he worst depr'l'::'ss:i.on that l~h:is PJ"ovinCE! has seen in fifty years right now. Some Han. Members: Hear, hear! Mr. Windsor : Just ask business cornmunoity, if you the nerve to talk to them . Some Han. Members: Oh, oh! Mr. Windsor: What does Minist.eJ" do- to resolve that? the hav ~=! the He 1..5 June 8, 1990 Vol XU increases personaJ. incornl'::~ tax, he brings in this new payroll tax, which we just had laid on our desks, and the Hous~O!

L!O'd.der si:'lys we ar·e going to cl(~bate th:i.s today. It: tAJas laid on our· dE!Sk this morning, a rnajoJ" tax Tfll'::'asul"e and we are going to bring that into the House of Assemb1y for debate today. And we will talk about that: sorne more, in a few moments. Some Han. Members: Oh, oh! Mr. Windsor: ThE:~ borl"OIAJE•rs ciHbl:. position: the hon. Mernber would have us believe that l:.hey inherited such a ll'IE!SS .. it is funny he did not rnent.".i.on thE• Fe~ct that he bcH'l"OlAJed $4-00 rnLl"l :i.on J.ast year, and an additional $100 miLLion this year. "That is his fiscal policy.

And h1C! talks <:·\bout surpluses in the Budget. Congratulations! He has got a $10 miJ.lion surplus budgeted this year. Anybody. can budget. a ~1>10 million surplus, if they borrow $100 million more than they did last year. Some Han. Member~: HE:'al", heal"! Ml". Windsor: ThE•y had a $90 million deFicit over last year. That is IAJhat he has, Ml". Speake!". rhat. is IAlhat is irnpact-inq on OUI" bol"I"OlAJin~J poiAJHl". That is IAlhi:'lt :i.s impacting on inl~.eJ"US t r·a b:•s. l .. h1:! M i n i s t. e 1" 1 s p E! I" f" o nn a n u:- a n cl n o l h i n q but, Mr. Speaker. Sorne Han. Members: Heal", heal"! Mr.

Windsol": rhe value ol Canadian dollar I mentioned; intl'::~l"est r·ab~s in Candela, and size of thE! FE!d~~l"al def"i .ci.L. course, they impact l:he the LhE• Of on evl'::'rything. They irnpac L on eve'l"Y Pl"ovince. But~. IAJhat rnakes LhE• difference, Mr. Speaker, and the No. 51 I~ 5

borl"oiAJi.ng polJJel" of each Pr-ovinCE!, is the performance of this Government or let me say, Mr. Speaker, the lack of performance of this Government. The disgraceful Financial policies that this Minister has brought into this Province. He and he alone is responsible for the cost of bor-rotAJ:ing in U.S. or any other market-:. Some Hon. Members .: Hear, hear! Mr. Speaker: Order, please! Oral Questions Mr. Speaker: The hon. the Leader of the Opposition . Ml". Rideout: Mr .

Speaker, the Minister of Municipal and Provincial Affairs has indicated the Government's intenticn to br·ing in a nelAJ Bi11 entitled, "An Act Respect:.tng The Ci"eat.ion Of Regional Services Boards Throughout the Province", and l":he Minister, at 1east t:l'll"ough the Government House Leader, has indicated thE!Y intend to bring that Bill in this session and have it passed before this House rises for the summer recess. Mr.

Speaker, lAJhat I JJJant. to ask the Minister is what consu1tation has the Minister had with the Federation of Mayors and Municipalities on that Bill, and with other Municipalities throughout Newfoundland and Labrador? Mr. Speaker: The han. Minister of Municipal Provinctal Affairs . the and M...r._~ ___ G..\~.11.~.9.,~ : had int:ensiVIO:' Mr. Speaker, I have consultat:i.on tAdth, I L6 June 8, 1990 Vol XLI would say, cE~I"ta:i.nJ.y the:• 9l"E!aL'.E!l" percentage of Municipalities thl"oughout that Province. We havE• talked about regiona1 services almost every time a council has been in to seE! me.

Il:. is sornl':'thing they badly wan L. and badly need throughout the PJ"ovince. It i.s no SE!Cl"E:~t.. Ml". Speaker, l:.hat tJJE:! have;,' boa1hds in place throughout Ne~Foundland and Labrador. They have rt:'a lly no legal status, they are just committees. rhe councils have been asking that these co rnrn:i.LLees be forrnaltzed on a lega1 basts, wher·e they can br:~ construe l":E!cl properly and they can cost -share on whatever ser·viCE! thE!Y lAJiHl t to provide for their communtt:l.es.

These bor-.H'ds a1"e badly nE!E•decl, not. just .in exist.ing situations, but: in other si.tuations where groups of cornrnuni ties, t.tJJo, Lhrec•, foul" or more communities, can geL together and provide a service, any ser·vice thc-:~y tAr.i.sh that can be pr·ovidE!d or; a Municipal basis, i'.!ncl have a legal Hl(:'chanisJTI IAJhel"e Liley can cost-share on a per capita basis. M r . S p e a k e r : T h E! h o n . t h e L Nl d e r· of the Opposition . Mr. Rideout: NotJ.J, Mr. Speaker, that was the perfect no answer. L e l: me c o rn e b a c k l:. o t h :,! M i n i s t e r again.

I lAJant to ""'' k thE• M:i n:i s Uo•l" dii"E!Ctly lJJhc:d: consult.at:.ion has l:.h1:! Min:i.ster had on this pl"oposecl p i e c e o F 1 0' g i s 1 a t i o n tAJ i 1": h l. h t:! Federation of Mayors and Muni.cipa1ities? That i.s Lh1:! question I want the Min:i.ster to answer. Mr. Spc-:'aker : ThE:' hon . Minister of Munictpa1 Provincial AfFairs . Ml". GulJ.aqe: Ml" . Spr:~akE•l", No. S 1 I t ht:! and lfl( ~t 1\6

..... most · recE:~ntly two !AJeeks ago at their executive meeting, l:hey meet throughout the yea1" four or fivE:~ t i me s a y e a r a n d I me e t tAli t h t h e m at the samE:' time, and we discussed the fact that I was bringing in this particular legislation. Ail the Members on that pal"ticular executive - I would not say all of ·them, but. the maj Ol"ity of thE~m I have already had discussions with. Regional services boar·ds and the J.egislat:i.on that is about to be before the House is no seci"E:~t, Ml". SpeakE! I".

It has bE~E:'n discussed throughout our first term of office on a consistent basis !Ali th the people who are involved, the Mayors and the councillors throughout the Province. I fail to thrust oF question. see, Mr. SpE:~akel", the the Opposi t.ion Leader's If he is trying to imply that there has boen no consultation, that is not the case. Mr. Speaker: The han. the Leadel" of the Opposition . Mr. Rideout: Mr . Speaker, I do not have to imply anytlring.

The Minister has just confir·med tlAJ:i.ce in a row thE!l"e has b<,,en no consultation with the Federation of Mayors and Municipalities on this piece of dr·aft l<:~gislation, none whatsoever, Mr. Speaker. No1JJ, Ml". SpE!akel", J.et me ask the Minister this. In E:~vidEHlCe givE:~n to the LegisJ.ative Review Cornrni l:tee just. a fetAl days ago, l:he Assistant Deputy Minister of Municipal and Provincial AFfairs said this Bill would provide anol:her legal Pl"ocedui"E:~ to achieve amalgamation of Government sel"Vicc~s in the Province. Now, I want to ask thE:!

Mirdstel" is i.l-: the Minister's intention to use t his L7 June 8, 1990 Vo1 XLI Bill to communities hear talk fOI"Ce which of amalgamation on do not IAJan 1". to the Minister's amalgamation plan, Mr. Speaker? Mr. Speaker : The hon. l:hE! Minister of Provincial and Municipal Affairs. Mr. Gullage: M1~ . SpE!akE!l", obviously the Leader of the Opposi t:.ion doc,'s not unciE!l"stand thE• amalgamation Pl"ocoss. And I arn not a bit surprised, because it has been evident throughout the cl E~ b a t e o n a rna l g a rna t i o n , e v E:! I" y t. i m e it:. has beE!n ment.:i.onecl by LhE• Leader of the Opposition.

There are two ent.irely di f Ferent. thrusts on the part oF the Government. Amalgamation is for the purpose of putting together cornrnunities that al~E! VE!l"Y smal l - most of them are very s mall in nature --· in rul"a1 NetAJfound J. ancl, in particular. A lot of the1n h.::tVI?. populations of 500 cw 600, whel''E• they cannot even aFford to hire staFF.

The purpose of amalgamation "i.s to pl"ovoi.clo U~~::•1n t.o have a larger COITlllltHl:i ty LHLi: l .. , of 1, 1)00 Ol" mOI"E~ in popu1ation, lAJhc:!rl:> they can afFord to have sta f f, E!quiprnE!nt, bet:l:E!r planning, bE:'tl:·.er enginE:~E·l""i.ng, and thE! l i st qOE!S on. That ·.i.s l:he pur·posc:! oF amalgamation. Regional services boards are an enti1~,~ly diFfc:!l"ent i. ciE=-a, ~:;oJnt'!thing that is needed by Lhe municipalit.iE•s; t .. hoy i:'l.re ask·ing fo1" it, thE:~ counciJ.s c:,li"E• Cl"yin~J out For i t , l: h t~ y lAJa n l:. a Ill E! c 1'1 a I'Li s 1n Lhat is legal.

And t f Lhey can co-oper·al:e and get togel:her, s.ign on thr:~ bottom J.ine, i f you l:Lke, and be respons i ble wiLh a legal entity, thE!Y can go and co--opE!I"ate and have servicE•s providod For a g1"oup of comrnun"i.t:i.es. It has nothing to do tAd l:h a rnalgama tion. No. 51 rn

It is· a separate idea entirely . I might mention in closing, Mr. Speaker, that other Ministers in other provinces have said that this piece of legislation is something l:hey are thinking of doing in thc:'ir· province, now that. they know about it. I have talked to them about it, and thE!Y say it is far better Lhan tAJhat has been clone in other provinces, where they have introduced anol:her level of government, regional government. They say that is not the answe1n. This is the anstAJer, because it is community driven. These boards will be run by the councils themselves. Mr.

Speaker: The han. the Leader of the Opposition . Mr ···- Rideout: Mr. Speaker, the Minister should go and talk to his Assistant Deputy Minister, who has already testified b€~fore Lhe Legislative Review CommitLee. He was thE! one tAJho made the statemE•nt I just quoted to the Minister. Mr. Speaker, lel me ask the Minister· tilts. Why doE~s thE! Minister need this Bill at all? ThE!re is adequate authority under the present Municipalities Act For the Minister to create any kind of reg ional board, regional govenmtent he lAJants . Why does he need this patnticulaln piuce of legislation? Mr.

Speaker: fhe han . the Minister of Municipal and Provincial Affairs . Mr . Gullag~: Mr . Speaker, I am repeaLing mysE!lf, but I guess it is ilE!cessary b~ :!causr::~ l:hr::• Leader of the Opposition needs to have everything repeated Four or Five times befo1ne hE! gets the rnE•ssage . Wr~ badly need this Bi.ll. WE• do not havE' in plneSE!nt legislat:i.on a LB June B, 1990 Vol XLI mechanism tAJherc :!by cornrnuni.t'ies can carne together and share, on a pE!r capita basis, in the provision of services for their municipality. Theine is nothing in the! extsl:ing 1E•gislation. An Han.

Me:~rnbe1n: All t:h:i. s legislation dOE!S is rE:~tnove (inaudible) from public areas . Mr. Speaker: Order, please! The han . the Leader of Lh E! Opposition . .1'1.r. ... :..-..... B..Ld_~ .. Q..~ ... t : M r . S p e a k E.' r , i l~. i s the Minister who should go and take sorne smart pills this morning, nobody else. The Minister knows that he has all the authority he needs under the preSE!nt Act, Mr. SpeakE!r.

No 1~1 t~.Jhy is the Minister running r·ough shocl over every elected municipal i. ty i.n this Province and taking the authority back into U1(! hand s oF the Cabinet without any public hearings, without any Feasibility studiE•s? Why is the Mtnoistet" rnaking a mockE!ry oF rnunici.pal government in Newfoundland and Labrador? Mr. Speaker : l"h e hon . thE! Minister of Muni cipal and Provincial Affairs . Mr. F1iqht : Why is he an alat"llLi.sl:? i':'!.C .... : ..... _?.E~ .i?..t<::'! ... C. : 0 I" d e In , p 1 e a s e ! Min. Gulla~: Mr .

SpE!dkE•I ", ir putting Governtnent into the hcH1ds of the municipalities with e1 Jegdl board that is going to be dr ·iven by the rnunicipaliti.es undE•i" the'.'i .r author·ity l:his board :i.s not above the municipalities, tl is below the municipalities , with representation from the eJected people, rnayo1ns a.nd counci .1lor• -; in that particular group of No. S 1 IW

cornrnun:itic:1S in any 1neg:ion of the Province. It. is cornmunity dl"iven, it has nothing to do tAJith Cabinet or with Government or anything else, and that impl:i.cation is just nonsense, puro nonsense, which I expect. These boaJ"ds are community - I repeat - community driven and will administered by the communitios involved. Mr. Speaker: The hon. the Leader of the Opposition . Min. Rideout : Mr' .

SpE!akeln, hOlAJ clo,:;!s L:he Minis t:.r:1r square that deceiving answor with tho words of the Bill LAJhich gives UlE• Minister the authority to appoint a chairperson, and which gives the Minister the autho1ni ty to appoint representatives to that board. Whore councils do not nominate representatives, L:he Minister can do it himself. How does he square that? If councils do not - Some Hon. Members:. H~::1a1n, heal"! Mr. S p eaker: Order, ph1ase! Mr . Rideout : - nominate representatives to that board, the Minister has the authority to appoint anybody within the municipality. Mr.

Speaker, how does the M"i.nister squar'e that answer with the facts in the Bill? Mr . ___ Fligh t : What a stupid question! Mr. Gulla.9..§.: WhE!r'e is rny cri l~.ic now that we need him? Mr. Speaker: Order, please! rhe Chair has not recognized the Minister at this point. I am waiting For order to be established. rhe hon. LhE! MinistE!r of Municipal L9 JunE! 8, :1.990 Vol XI...I and Provincial Affairs . Mr. Flight: of a town somebody. Ask hirn "i.f hE• knotAJS that won't nominate Ml". Gullaqe: Yes, that is <:1 good question. Do we know of a municipality in the Province that will not nominate somebody. An Hon.

Mt:Hnber: thE~rn. Yes, hundl"t:'cls of Mr. Flight: Name them. Mr . GuJ.laqe : M1~. Speaket", Ullnoughout the ProvincE! right. now we have communities, we have boards in place lAJh'i.ch are waiting fo1n this legisJ.ation; LAJa:it:.:i.ng F'otn it, anxious to have it. I can give you an E!Xarnple J"ight oFf the top. Grand Falls, Windsor, Bishops Falls, thE:!y have a bo<H'cl in placc:1 now. They are anxious l~o have this legislation passed so th(~y can havu a Fol"rnal mechanism in place where they can cost-share on regional services. If you want an example, thE!I"E:' is onE! c1osc'• to horne. A n H o n .

Me m be r : T h a t i s no t t t" IH>. . Mx .... ~-..... E ... Li: ... 9 .. b..t : It i.s t:.I"Ue. [ 1- is ti"Ue. An Hon. Membt:'l": Then do it.. uncle!" l~he ptnesent Act. Ml". Fliqht: boy. Get to understand it, Min. Speaker : 0J"ciE•i", p1ease! I would J"errr:i.ncl hon. Mc:·rnbeJ"S Lha·t. Quesl~ion Pe1niod is for asking CJUE:'st-.-i.ons and gPtLing anSIAJC::•t"s, OJ" not g~:·ttoing anstAJE!rS, as Lhe caSE! might bE!. Bu ·t, in any E!Ven t, it 'is not for engaging in debate. No. 51. 1~9

An Hbn. Member: That is right, but we are not getting answers. Mr. Speaker: The han. the Mernbet~ for Grand Bank . Mr. Matthews: Thank you, Mr. Speaker. My question is to the Minister of Fisheries. Can the Minister confit"rn that the Pinsent Arm fish plant, in Labrador, will b1:! oper·ated by Conpak Sea Foods. the samE! company that is operating Twillingate? Mr. Speaker: The Minister of Fisheries . han. the Mr. Carter: Mr . Speaker. quite frankly, I do not know. I b<:!lieve the plant in Pinsent Arm tAJas operated by a company that was operating out of Campbellton, Notre Dame Bay, a Mr. Noftall.

Certainly, not to my knotAJledgl;:! is it owned or operated by Conpak, Lhe Company operating in TwillingatE!, · who are not €:'Ven op~~rating. Mr. SpeakE!!": The hon. the Member for Grand Bank . Mr . MatthetAJs: A supplementary. Mr. Speaker. Will the Minister undertake to determine that information for the legislature and provide the information accordingly?

As well, if Conpak is going to opN·ate Ptnsent At"m, will he undertake to check the d~::~tails of the management fee, l:h~::~ lease. the bt~okerage fE!E'S. and. indeed. try and detet"rn:i.ne for the Legislature if there are similar arrangements in place For Pinsent's Arm as their are for rt.~.Jillingate? Will he undertakE• to do that? M.r. .. : _____ _____ $1~0 .. ~-K~. !: : r h e hon . the Minister of Fisheries . uo June 8, 1 ')90 Vol XLI Mr. Carter: Mr . Spl:;!akE!r, il- is regrettable that this is happening.

There is a deal put together in Twillingate that will, I suppose, stand l:he test as b1;~:i.ng one of the best deaJ.s ~~Vt:H' st:t"uck by a GoVE!r'nment.: no giVf'at..uays. no Joan guar·ante~'!S, no pt"onrises, by the t..uay, to cornpensaLE! For lossos, aS IAJa S the CaS~~ :i. n 0 t.1·1 E! I~ cJ E' a 1 S I can talk about t.~.Jhich occut"J"t:~d IAJhiJe th1:! han . the I ... E'!adE!Y' of the Opposition was Minister oF Fisheries; no gt"eat gi .veau.J clys. no great guarantees. yet l:l·wy insist on trying to makE! i.t appear' thE!l"E• ts sornethtng shabby, or sornel:hing less than u.Jho1esom€:' aboL.lt. Lhal:. dE!al.

Ml". Rideout: Th€:~ inclusti"Y is asking us to ask the questions. Mr. Carter: Mr . Speaker. l:hE! industry "can ask the Oppositjon Member all they want. If Lhey want infot~rnatton, thE•y can con1c to us and get it. My collE~ague, t·.h1:! MinistE•I" of DevE•Joprnt=•nL, has offet"ed to table l:he inFor1nat.i.on ·- An Han. Member: He hasn't done it . Mr. Carter: No . He t.~.rLll cln :.i l ... And I t.~.Ji1l tell you this, he lAJLLl be doing it in a much shol~tE•I~ Lill'le frame than it to ok Lhe Members opposi.tE' to t"eVE!C\l ciE·ta·:.i Js on l..hE! Spt~ung d1~al. Think about that , iF you IAJ.-ilJ ..

Think about l .. haL. Tt.~.Jo or l:ht~ee yeat "s. and l:hey t.~.Jould hat"ciJ.y even aclrni.t l:.o knotAJtnq Lhl::! Sprunqs. rl"weE! years and 'li20 mtllion later, we are tryinq to Find out. NOIAJ 1.ue havf'' to hi::;vu a j u cl :i c i a J. e n q u t r y t o f i. n d o u t 1.1.1 h a t happened. Yet L~hey have l:hP gall to sit over there and criti.cize us because tAJe have noL r'E!VealE·d l:.he dPtat1s of a ciE!a} th<:~l:. t.~.Jas c]osE•cl about two weeks ago. Ml~. RiciE!OUt: Tt.~.Jo lAJee k s ago. A No . s 1 Rl.O

l ~ . - month ' ago . Mr. Carter: The actual signing of that continact, Min. Speaker, the actual contr·act, the actual d.:~al occurred no more than two weeks ago, and now they are trying to smear the company and the operator by suggesting, by innuendo, !:.hat th(:~re is something Winong with PinSE!nt Ar·m, if in fact, they are involved. Mr. Rideout: If we want to ask a question, we are smearing somebody. Min. Speaker: The ho n. the Membein for Gr·and Bank . Mr. Matthews: Mr . Speaker, I was trying to get information on Pinsent Arm not Twillingate.

We have been trying for a month to get this Minister to table the Twillingate deal. Maybe the reason you will not table the Twillingate deal is that it smells iJJorse than Sprung. Maybe that is the problem with it. Some Han. Members: Hear, heain! Mr. Matthews: The Mini stein of Development said I'H'! iJJas going to table it, you said you were going to tablH it. When can we expect you to table t he details on the · Twillingate operation,- on the deal? Maybe there will not be any losses, Mr.

Speaker, on the Tw:i.lli.ngatE! deal., because maybE• it is s l':! t. up in such a tJJa y that: l: he opE•ratoJn cannot have any 1ossE•s? With a managem~:!nl: fE'E! !:hat. is going to go, we hea1n, up to $150,000, brokerage fees, a minimal amount for a lease fee, which t hE! Minister of Developm.:~nt confitnmE!d J.n l:his House, how can an 1J one incur 1 o sse s in TlAli 11 in gate on that basis? We want the infor·mation on rtJJilLinga ·te, and I am trying to determJ.ne what the I. 11 Jum• 8, 1990 Uol XLI deal is for Pinsent Arm . Mr. Speaker: rhe Minister of Fisheries . hon. the Mr.

Carter : The only t h'.i.ng t hat smells around here is the at t itude of the han. Member. Some Hon. Members : Hear, hear! Mr. Speaker : Order, please! rhe Chair has reminded han. Members f rom bo Lh sides of Lhe House thai: Quesl:oion PeJ"oiod ·is not for debate. Using t he t er ms I have been hearing now are provocat i ve and they debate. I ask Uw pro mot e Minister, please, to con t inue wi th t he anstJJer. Mr. Carter : I SpE!akE•r, it. i. s only say ·- f ully concur, no t debate. J Mr. can Some Hon. ME:~rnbeJ~s : concur with dJ.rt. (Inaudib l ,;:,) Mr. Speaker: Order, please! Mr.

Carter: Speaking of d:il" t .. Sorne Han. Members: HE!al", heal"! Min. Speakeln : Or·der, p ]. (~!aSE:'! The Chair has heard particular answer . question. enou~~h of l.hoi s On l:o anoL.her T hr:~ hon. the Membc:!l" f ol" Cinancl Bank . Mr. MatthelAJS : Ml" . ~:;peakE!In, can the Minis l:E:'r confiJ"rn !:OJ" the House~ that t he Econom i c Recovery Co mmission had great:. oinvolve1nent in arranging t he Twil l ingate dea l ? An Han. Member: I did yesterday . Mr. St:>eaker : Orc\E!In, pleas l~! No. 51 1n 1

Order ·, please! Mr. Matthews: the Minister Speaker. Mr. Speaker: I of am speaking Fisheries, Order, please! to Min, We cannot operate Quest.ion Period when there is shouting from both sides of the House. The Chair has difficulty enough knowing when the questions are asked and the answers are given without extraneous remarks. The hon. the Member for Grand Bank. Mr. Matthews: Thank you, Min, Speaker . Mr. Matthews: Will the Minister ·af Fisher -ies confirm that the Economy RecovE:'ry Co1nrnission had significant input and, in essence, was a major player in arranging the Twillingate deal?

And in checking the information on Pinsent Alnll'l, wi11 the Ministeln, when he gets thE:~ oinFormat.ion, tab1e For the LegislatulnE! thE! 'involvement of UH'! Econo1nic Recovery Commission in the Pinsent Arm deal, as well? Mr. ~peaker: !"he Minister of Fisheries . hon. the Mr. Carter : Mr . Speaker, I believe the day I announced the deal tJJi th Twi.J.l i nga tE! I, in fact, quite proudly told the House. I believe I said the Economic Recovery Team, it is to their credit the involvement they had in the fwilloingate operatoion, and thE!Y played a majo1n 1nole in puttoing together that package, Mr. Speaker.

I will gE!t the inFormation he is askoing on the Pinsent Arm plant, and my colleague, the Minister of Development, will be tab1ing the 1...1.2 June:~ 8, 1990 Vol XL.I information when we are ready. An Han. Member: Whc:~n you dre rE!ady? Mr . Carter: do it, and Mr . Speak e1n When we are ready to when the information, Some Hon. Members : Oh, oh! An Hon. Member : three years . It 1Ar.L 11 not be Mr. Carter: I can givE~ the House an assurance, Mr. Speaker, it. tJJi] .l not take us three years to do it. Min. lhdeout: That is a perFOI"I'nance For· a years experience man with thirty in Parliament, that is . Mr.

Carter : (Inaudib1e) longer· than you wil1 survive. Some Hon. Members : Hear, hear! Mr. Rideout : (lnaud tb1P) . ~L : ...... ---·--~-~.9.K.9 .. !:. : Orcleln, plf:'!C"lSE•! Order, please! Before recognizing l:he hon. Me11'1be1~ I remind han. Mem bers that when the Speaker is standing, there sl1ouJ.d be si1E!nce fr·orn both s:'i.clr::!s of the House . Mc:,rnbers SE!tHn l:.o be a J itl: .J.e fEd . sty thJs rnorn:i.nq, <::1.nd I wanl:. to relllind hon. Mt :!ITtbers agai.n t.hat in askin~~ que~;t.ions and in answel" :ing ques l:.ions, the rules arE! very, very c1ear. Some Hon . Members: Oh, oh! Mr .

Speakt:'l" : Onlr:~ln, please! The rules are very, very clear, and if han. MetnbE!rs do not. co- ·operate, then thE! Chair is at.. a loss, and l:he Ques l:ion PE!r'iod dncl the Whole House wi]l just fal1 No . s 1 Rl2

into ·chaos. So agaJ.n co-operation fl"Ofll han. both sides of the House . The han . Valley. thE! Memb€:~1" I Ct.'llJ. fOl" Mernbe1"s on For Hurnbt~r Mr. Woodford: Thank you, Mr . Speaker. My question is to the Minister responsible for Forestry and AgriculturE:'. In view of the fact, Mr. SpE:1aker. that in most parts of the Province it has been fairly dry this spring, and more evident, I guess, in the past week and a half ·- An Han. Member: Wh€:1r'e does he live? Some Han. Members : Hear, hear! An Han. Member: With them, everything is a joke . Mr.

Speaker: The Chail" is going to shortly do what the rules allow it to do, if I have to stand any more on interruptions when questions are being asked. And the ruh1s appJ.y to both sides of the House, to Mr:Hnbers to my lE!Ft and to Members to my right. The han. the Member for Humber Valley. Some Han. Members: Hear. hear! Mr. Woodford: Mr . Speaker. :in view of the fact that in most parts of the Province this spring has bN'n a VE!l"Y dl"Y season - the Minister of Transportation may not know anything about it. but thel"t::' are a lot of other people who do - evident, Mr.

SpE•akE:1r, fl"Orn some of the fires recently in the Centra1 Newfoundland area, and more specifically in the Grand Falls/Badgel" ar'<'!a tht::' IAJeek beforE! last and again just yesterday, would thE! M:inist.E!l" teJ.1 the House 1..13 June 8. 1990 Vol XU if he has hired back a1l sE:•<:~sonaJ. staff for the forest fire units this summer. and if he is rE•aJ.ly concerned about the fire season this YE!ar? Mr. Speaker: Minister oF Agricul tul"E:1 . ~ .. r .. : ....... ____ D..J ... 9..h .. t : Speaker. The han . Forestry Thank you, thE~ and Ml" . I thank the hon . ME:11nber for his question.

Of course, I am concerned, as we are all concerned, about the fire season. I am not sure he is right in saying that this season has bE!en dryer than other seasons. As a matter of fact.. it ha~,; nol: be on very dry in most parts of the Province. Yesterday. a~; a 1naLl:er of fact. Ml". Speaker, th<;!l"E:' IAJE:!l"e l:hr·ee s1na11 Ftr"=1s 'in NE'IAJFoundland. tiAJO u n dE! r con t 1" o J. an cl on r::• out.. , and one of those was in Labrador. So to answer hts quest-ion, yes, Ml". SpeakE•!". alJ. thE! IAJC:l'l:E·r· bornbeJ"S are in place and ready to react whE!nE:'Ver caJ.J.ecl on.

The vc-u"ious forest fighting units have been staffed. The ME:'rnber may bE! c,1o'in~~ to get up noiAJ and say thur·~~ is somebody not in a c,1:i.ven pos.it.:ion, but, as Far as lAW are conCE!l"rwd, we are ready to combat any fire IAJ h i c h t a k e s p 1 a c e a n y IAJI'l t' r ~·! i n Ne!A~oundland. We have the F aci 1 i t.i€:1S avaLlable. L hE:' 111anpoto~Jer ava:i1able and we are ready.

I might say to l:hE· ME:HnbE·r l:h<:=tt. l:here haVE! b€:!E!l'l J.oss fOI"eSt f :ii"E! st.aJ"tS :in this Province l:.his year, up t.o this point. in thE· year', than any years in l:he rec€:'nt past. [n l:h1? last l:hree or foUl" year·s. most of our forest ftres, particular·ly l:he onE!S which did clarnage, IAJei"E• in t~he las l: l:.wo weeks of May. or s l:art.tnq the rn:iddJ.E· of May. Up unt:i.1 nOIAJ, No. S 1 1n3

there · have been no SE!rious fires. Only one serious foire starlE!d in the Province, it started in the Grand Falls area, and it lAJas under control within hours. anyway. Mr. Speaker: Before recognizing the hon. Member for Humber VaLley. I wonde1n if hE:' would aLlow TTJE! to welcome some students, becauSE! the students are sotTIE:'U .rnc:'s on a tight schedul(~ and have to leave. One group have already left, but we will welcome them anyway on behalf of hon. Mernbe1ns. We haVE! two groups of students . Five students frorn Fortune Harbour, and eleven Grade IV to V students flnom CottrE!l1s CoVE!

Academy, in the Exploits distr·ict.. They are accompanied by their teachers, Colleen Henefent, Derrick Brace, and Debbie Armstrong. Some Han. Members : Hear, hear! Mr. Speaker: The hon. the Member for Hurnber Valley. Mr. Woodfo1nd: Mr . Speaker. wouJ.d the Minister confirm For the House that the Bishop Falls Forest fire-fighting unit has been eliminated, commonly known as the early response unit, there in Central Newfoundland? Would he confirm that they have been eliminated, w-.i.th the loss of six jobs? ~.!:. ... : .................. _?.J~~.~-l_<_§! .. C. : Ministe1n of Agriculture. The han.

Forestry the and Mr . Flight: Mr . SpE!Colker. I cannot conr:irrn that, nor should I confir·m that . What we have done is cancelled what was known as the HeJ.i-Attack in Boishop Falls, where tJJe had a he1icopter that tAJas costing us $150,000 a year sitting thE!Ine dur·inq l:he Foire season, as well as six employees . So we I_ ll~ June 8, 1990 Vol XLI decided as consideration funding that . a to budgetary discontinue In light of other priorities in fire fighting, I rnight say, \JJI:! dC~!C'.ided to cl'.i.scontinur:~ U11=.! USI::! or the 1-ir:~li .. ·Attack.

Thc::1 intE!ntton frorn the outset was to replace these various employees, because SOfnE! of thE•m had COHIE! front othE!l" positions in Fares tr·y in the l' .. il'·s t place. t.o have thE!rrJ rE:'VE!Inl: to their original jobs if possible. and if not possible, to rnake suJ"e they were i.nl:egr·ated inl:o l:he Department. At this poJnt. tn time, only one of those six is stiJ.l waiting to see if he will be employed this sutTllTIE•r, (~rnp1oyed seasonaLly • as he was a ltAii:l y s employE!d.

I might tell the Member, also, that there have bE!en a coupl: :~ of attempts to pla ce one or · Lh r::• people IAJho tJJE !re displacl:•d lAihE!n we cancelled the Heli -Attack, but that particular individua1 chose to refuse a transfer - for instance, to SpringdalE• or l:o some othE:'r unit.. In the 1neanti.rnE!, the people who lost their jobs or were dispJ.aced when the HE•li- ·Att.ack IAJ as cancelled have been oi-FerE•d first choiCE! of job s that open up w:it. h any other unit in the Province. r.1.r. .~.-..... §2.§!.~.t§! .. C : r h e h o n . t h E· Me rn b E! ,~ for Humber VaJ.ley. Mr.

Woodford: A Fina l 'S"u~.;l;rerrle"nt. :ii"r"'Y'":· -···M·r . s p e a k E! r . Would the Minis te r co nsider, especially in light of Lhe Fact that a COUplE! of [·.ilnE' S haVE! already started, a1though they have been looked after in a fairly short ttme. r(:dnstal:.ing thE! Heli-Attack operatton in the Bishop Falls area because oF l:.he potential thi s year For disas ter No . I) 1 Rl4

in that area? And not only the area, but more specifically because of thE! fact that it l.o~.Jas there. And to say that it was just sitting therr:1, what piE~ce of fire equipment doesn't sit there until it is used? Can the Minister explain that to me? Mr. Speaker : Minister of Aglnicul ture . The hon. Forestry the and Mr. Flight: Yr:1s, Mr . Spe:1akc::~r . Thr:' fact is, rnost pir:1ces of fitne equipment do not cost $150,000 For a couple of months. That was the issue. An axe or a pump or a truck don't cost us that kind of money .

Having analyzed the situation, having analyzed the value we got from the Heli-Attack, from that helicopter, given the priorit'ir::!s and given the financial restraints this Government was looking at, it was decided that the HeJ.i-···Attack was not a priority. I would like to have a Heli -Attack in every division in the Province. So, looking at priorities in forestry and looking at how we best spend the money tJJe have available to protect the forest of Newfoundland, we decided to discontinur:1 the Hell-Attack and it:. will not be reinstated this year. Mr .

Rideout : IF (inaudible) you would eliminate the water bombers. Mr. Speaker: The han . the Membr:1r for St. John's East Extern. Mr. Flight: You f E! llotJJs IAJant.ed to eliminate them. You guys wanted to get rid of the Cansos. An Han. Member: (InaudibJ.

e) stupid. Mr. Speaker: Or·d er, please! us JunE' 8, 1990 Vol Xl..l Oi"dE!In, plE'aSE:~! I assumE-d the questions and the answers were finished and we are gone on to somebody eJ.se. The hon. the Member for St . John's East Extern. Mr. Parsons: Thank you, Ml". Speaker. My question is to the Min'i.stE!r of EnvironiTIE!nt and Lands . Recently I attE!nciE•d a l.r:'g·is1al:.tve Corn rn :i t. t. E! E~ mee t :i n g at tJJ h :i. c h t :i. rn e 1 asked the Minister about a dump site in the Roaches line area where dozen s of cattle carcas ses were thrown, a1ong with severa1 piglets, several pigs, several sheep and rats.

My ques tion l:o the Ministel" i.s tJJhat has his Department done about this situation? Mr. Speaker : rhe hon . Lh o Min'i.ster of Environment and Land s. Mr . Kelland: Thank you, Ml ". Speaker. Yes, the ME ~In b et " did raise that iss UE! ear J i E!l~ on. Ou1n Department has b er~ n tH:~r·y involved wi th that particular quest io n on Roaches Line, and my unde1ns l:.and ing is that the mat te1n is uncle!" fu] 1 inves l:.igat.-.ion by l:he RCMP, IAJ.i.th our Departmont d'i.rectly involved . Mr . Speakr:'r : The hon . the Me lltb er ' for St. John's East Ext.N'n . Mr '. Parsons: Aga in, M1n.

Speak E:' I". because oF thE:' closenE:!SS oF l·:.his durnp, which I a1r1 Jed to beJ. ·:i.,;!VP has been filled, to a sa lmon l~iVE!In, and also tl'd,s riVeln :i.s USE!cl by people For SIAlilflrn:i.nq puq>oses. due t:o the runoff' and seepagE :! :in l:his area I IAJant to ask Lhe Minister has there bE!Pn an inspecl:-.ion done to the water body to determine the bacteria content? No. 51 R l':i

Mr. Speaker: The hon. the Minister of Environment and Lands. Mr. Kelland: · ThL-Hli< you, Mln. Speaker. I can assure the han. Member that the matter is under full investigation. And with respect to the strE!am, the reason for the involvement by the RCMP in an investigative nature is for that very rt1ason. Our Department has been deeply involved, continuously involv(•d and lAJill be until the whole matter is settled. Mr. Speake1n: The han. tht1 MEmlber for St. John's East Extern. Mln.

Pa1nsons: Would the Minister, because of the impo1ntance to all of us of a monitored and clean environment, introduce new rules or regulations to inspectors to make sure that conditions which have prevailed don't ~~VE•r' surface again? M1n. Speaker: The han. the Minister of Environment and Lands. Mr. Kelland: Thank you, Mr. SpE:1akc,'r. The1ne aJnE! quite a few rules and regulations in place, both Provincially and Federally, which deal with environmental matters. But I can assure the hon.

Mr:1mber, and ME!mbt1rs of the House, that a1l rnat.tE!Jns pE•Jntaining to the environment are under continual monitoring, and investigation, and review by my Department. Our mandate is to go as far as we possibly can to enhance our environment, to improve our environmental conditions, and we emphasiZE~ that in the various actions and activities we have invo1ved ourselves with this week, which wi 11 f o c u s e v E! 1n y bod y ' s c o n CE• r n o n the environment. So I can assure hon.

Mt,mbers, Ll6 June 8, 1990 Vo1 XLI every MembE!r oF l:his House, that we will not rest in the Department of EnvironrnE!nl:. and Lands unl:.i.l we ar'E! completely sat.j sfied that lAJE• have everything in place to make our E!nVilnonlrlE!nt as safe and ClS clean as possible. Some Han. Members: Ht::1ar, hE!aln! Mr. Speaker: The hon. l:hE· ME!IJJbE!In for St. John's East. r.1.JLJ?. .. ~.~_f: Thank you, Ml". ~3peakr::•r·.

To the Minister of Health: I would like the Minjster to indicate, using l:he Hosptt:.al Council's figulnE·s and excJ.ucl.i.n<;:J other aspects of Option 7, what the cost of rr::!plac:l.ng UH:• ex:i.sttng Grace General Hospital is? Mr. Speaker: fhe hon. LhE• Minister of Health. Min. DeckeJn: Min. SpE•akE'I", l::hf.,lf:. ·is not the kind or: inFormatton you carJ"Y a1nound in your hE!C:H:I. -1 heJ"E' have bc::1~:!n suqgesLoions Lhal-it wouJ.d cost: about $11'/ rnl:JI.ion Lo build a new Grace Hospital. rF we JAJel"E! to do that on LhE· norl.hs.i.clr::• of LeMarchant Rodd, we J,o.Jould have to buy up some property.

That figure has b::!en soft. WI" uJould hope that Option 10, when thjs Committee :is put in place to look at all the va1n.i.ous opt.i.ons, and 1 have to stress For Lhe hon. ME!Tflbein, Ml". Speah'•in, lAH:! iH'f::' t. a l k i n g a b o u t o p t. :i o n s o F p J" o IJ i d ·i n (3 300 extra beds For this city, Opt:ion 10 lAJil1 be able l:.o g .. iv1J us that fi.guJnE! ·.in a 1"1101"(:! pineci.sr::•, accurate way. But Lhe general t.E·rrn J,o.Jhi.ch i.s being thJ"OIAJn aJ"ound by the ~3t. John's Hospi.l:.al. Council and by other peop1e i.nvolved in health, :is sornewherB in the vici.nity of $117 million. Min.

Speaker: The hon. the Memi:JE•in For St. John's East. No. 51. I~ 16

Ms ·Duff: Thank you, Mr . Minis tel~. That is a J.tttJ.e bit different from the $300 million, and the $100 million cost per bed. I think the figure actually is sornewh<'=1J~e bett.~.Jel':'n $100 rn:illion and $110 million. But we are now in the true baJ.lpark.

I would like to ask the Minister tJJhat the comparative figures are on replacing the Grace General on the LeMar chant l~oacl site, 01~ any othE!I~ site where you are going to put it as a new hospital, thr:1 cost per bed figures, as compared with the option of splitU.ng a hospital in two, in other words, abolishing the Grac€:1 and its long tradition, splitting it in two, on two sites, with the same number of beds? Mr. Speaker : The hon. the Minister of Health . Mr. Deck(:1r: Mr . Speak10:1r, i.F I knew the answer to these questions, there would be no Option 10.

If we knew that it was l.::1ss expensive to attach the 300 beds to St. Clare's and to the General than building a new Grace, then we would have to make that d1:'!cision now. If WI:'! knet~<J it tJJas Jess expE!nsive to bu:i.Jd a new Grace, Mr. Sp,~aker, tJJe would have to take that acU.on now. But we do not know that. Nobody knows that. Then1 arE! sev1':1ral baLlpark figut"es around, bu l:. we want a definite, precise answer to that question. And part of the mandate of the gt~oup to J.ook into what is now b~~ ing callE!d Option 10 t s to give us precisely the answer to the question the han. Member is asking.

That is the whole point. I have to strr:1ss again that Government: is simply looking at a less expensive way to deliver these 300 beds to the city, a less expensive way than Option 7. If no cuay exists, ·th.::'n, Mr. SpeakE!r, Ll7 June 8, 1990 Vol. XI...I lAJ1::1 are going to have to try to qo thE! route of Option 7. If thel~E! is a more ~~~O!asonc1blo way, a lE•ss expl':1nsive tJJay, I arn suJ~e thE• hon. M(:1mber, as tJJell as other peoph1 in this Pt~ovince, wouJ.d bE•J.i.eve it:. is our duty and obligation to Find that less expensive way to deltver health care to this Province. Sorne Han.

Members : HE:1ar, hear! Mr. Speaker: expit~ed . Ques l:.ion P~:! r 'i.od has Answers to Questions for which Notice has been Given Mr. Speaker' : ThE! Minister of Fisheries. hon . tl'w Mr. Carter: I have adciJ. t. j ona] infor·rnation on t hE! quest.ton asked by the ME!rnbr:1r' rotn GJ~ancl Bank LJ..Jjt.h respec t to t he plant in Pinsent Arm. I arn t old the plant was operated last year by a company operating out of Campbe l lton, Notre Dame Bay, <:ind !:.hat coJTIP<HlY went into bankruptcy. Fi shermen are still owed about $60,000 as a l~esult of t hat fcti l uJne.

I lHldE!rstand the FtsheJ"rnen t hen t~o.1ent to Dr. BlackLJ..Jood. Having me t h'i.rn at a shrimp company moetinq in L' Anse·····aU- · · · Clail~, on MiH'ch 27, t.hE!Y lAJeJ~e VE!ry irnpress(~d lAiith hirn ,;tnd h'i.s record. ThE!Y as keel, :i. n f ac t. t hey li. ter'ally beqqE!d h i. 1n l~o l:.akE! OV!'::'I~ the plant l.his y(:.a1n and operate it. I a rn l:olcl that:. evel~ybocly is happy: t hE~ ft shet~tnen are happy, l:he people in Lhe arr:!a a n d D 1~ . B 1 a c k lAJ o o cl a , .. "' h a p p y , t h E! DE:1partmenl:. is happy, and notAl, Mr. Speaker, I expect l.he Oppos:i.t i on will be happy.

I did this because I do not LJ..Janl: to inrli.c t ru1nt her misery on the tJJorld, OJ'' do anything to have the ef f ec t , maybe, of havinq l:he DotAl Jones No . 51 f\ J. 7

into a indE!X go something. now released . So thE! nosedive information Mr. Speaker: fhe hon. Minister of Health . or is the Some Hon. Members: (Inaudible) suspicions. He did not even know . Mr. Carter: We do not. interfere, by the way, with these things. _r.1_r._:_ __ ~ e a k.~.!: : 0 r d e r , p 1 e a s e ! There is now another Member standing, and I would ask hon. Members to do that Member the courtesy of listening, please. rhe hon. the Minister of Health . Mr. Decker: Yesterday, the hon . thE! Leader of the Opposition asked rne about tabling the documents concerning Option 7.

I have b~~en talking tAlith the Chait~pet~son of the:~ St. John's Hospital Council, and l:hey have no objection to tabling it. The problem is, we only have one copy in the Department of Health. The St. John's Hospital Council were asked this morning to send us along an extra copy. If it arriVE!S today, I wi 11 ask leave of l:hE! House. If I receive leave, I will table it today or have it tabled. IF I do not receive J.e:~aVE!, M1~. Speake:'t~, then I lJ.JiJ.l table it next week. Mr . Speaker: The MinistE!r o·f Employment Relations. hon. t.he and Labour Ms Cowan : Thank you, Mr . SpE!aker. The hon.

Member fat~ Harbour Main asked me a Few days ago if I lAJould tab1e tht:~ le:~tl:er I had received Fn)rn th~C' Workers' Compensation Commission. My 1_18 June 8, 1990 Vol XLI answer this morning is no, not tab1e it. . And I further question to ask. if the hon. the Mernbe1~ For Main - I lAJi11 hav 1':' a I think Harbour Mr. Rideout: M1~ . Spe:~akel~, :isn't this out of order? Ms Cowan: - wouJ.d do the han . thing, he would s·tand up and say where he got that correspondence. Some Hon. Members: Oh, oh! Mr. Speaker: Order, pJ.ea se! This pa1~·ucular Standing Ol"cl el" :i.s to provide Ministers to give answers.

Obviously :i.t :is nol: a procedur·e for· as king ques l:.ion s oF Members on the oppo site s:i.cle . Mr. Doyle : over here. We ask the (inaudible) . qu es tio ns Mr. SpeakE!r : Or·de r·, pJ r::!a s~: !! Order, please! Orders of the Day Mr. Baker: Order 2, Mr. Sp eake r. On motion, a Bill, "An Ac t: Respecting A Pen sion PJ <.Hl Fol " Certain Employees In rhe Pl"ovinc,:!," l~ e:, ad a t.h:i.l"d t~:i me, order':~d passed and its t:.·.U:.le bo as on the Or·del" Papel~. (Eli]]. No. 14) . Some Han. Members: Oh, oh! Mr. Speaker : I remin d hon.

Member s ag ain, and I have done this a coupJ. e o·f L:irn es t.:h :i~; morning, that . whPn Lhe Chdir· is speaking t.her·e shou1d bE• dbs olu t.E ! silence in the Hou se. 1':1.r. .. ~ ...... f!El..k.C?:.!: : 0 r d e r , 3 , M r . S p e a k e r . No . 51 1n s

On motion the following Bills were 1nead a thil"d time, ordc:~r~~d passed and their titles be as on the Oindc:~r Paper. A BiLL 11

An Act To Education (Teachers 1 Act 11 • (Bill No. 5). A Bill, Judicatu1ne 8) . 11

An Act To Act, 1986 11 • A B 1.11, 11

An Act Enduring Powers Of (BillNo. tW). Amend The Pensions) Amend The (Bill No. Rc:~specting Att.orney 11 • A BilL 11

An Act To AmE!nd ThE! Small Claims Act 11 • (Bill No. 41). Mr. Baker : Motion 1, Min. Speaker . Mr. Speaker: It is moved and seconded th~t the House resolve itself into a Committee of Lhe Whole to consider Certain Resolutions relating to the Imposition of a Tax on Employe1ns For thE:~ purposE:' of fund:ing HeaJ. th Care and Post-Secondary Educati.on. (Bi11 No. 28). The motion is that I do now leavr::' the Chair. On motion, that the Hous~?. resolve itself into Committee of the Whole on said Resolution, Ml". Speaker left the Chail".

Committee of the Whole .~.r .. ;-..... ~h._i!:-:i:.l'J!L~.!! : 0 r d e r , p 1 E:' a s e ! Resolution That it is expedient Measure to Impose Employers for the Funding Health and Education. U.9 June 8, 1990 to bl"ing in a a lax on PUI"PO S e of Post·-Sr::~condary Vo1 XLI Mr . Chairman: Shall t hE• resolution carry? Some Han. Members: Carried. Mr. Chairman : Sha11 cJ.auSE! 1 carry? The han. the Member for Mount Pearl. Mr. Windsor: Ministc-:'1" not his Bill? Mr. Chairman: Mr. Chainnan, is t:he going to introduce Oi"der, p1ease! The hon. the Minister of Finance . Mr . Windsor: I u.dl1 g1ad1y st:al"t:., Mr.

Chairman, but "it. is rnost unusual that on a FinancE• B:l11 of' this magnitude the M'inis l:.E!r lAJOuJ.cl not have t h<,~ cout"age to gE:•t up and int:roduce it .. I tAJi.11 dE! f E•l" l..o l:he Minister, Mr. Chairman. Mr. Chairman : Order, please! The han. the Minister of Finance . It gives me great pleasure to introduce t his Bill, Dr. Kitchen: 11

An Act To ImposE• A Tax On Employc:~rs FOI" rhe Purpos~~ or Funding HE!alth And Post- .. ~.5econdc:H'Y Education. 11 As you knou.J, Ml". Chainnan, Murnbel"S of the House lAJi.ll knot,\) that ·i.t. lAJa5 not OUI" intE!ntion to red se t.axE•s this year, but lA.li'll:!n the Feclel"al Govel"nrriE!nt in its budgEd: r'E•vealecl that it was going l:o cut established programs, financing For health and post-secondary education, by the arnount of aboul: $20 million, tAle had no all:el"nal":.ivE! but to find the ITleans of ra'.'i.sinq l"evenues. We looked very carefully at the options availablE! l:o us and Found No. 1:>1 I~ 1.9

that the option that was least undesirable - every tax is undesirable from the point of view that we hate to have to raise taxes, but the alternative of going :in the hole or cutting expE:~ndi tures is often 1..11orse. So we searched around for the best possible means of raising this money, and we settled on the health and post-secondary education tax. This 1. 5 per cent tax on payJ"olls of about $300,000 for all establishments, including Government institutions, is one of wide application.

We have given zero rating to three industries, the primary and secondary pi~ocessing industries, the fishery, forestry and agriculture. I might. say that a similar tax is imposed in three other Canadian Provinces that rates higher than those in Newfoundland, namely, Quebec, Ontario and Manitoba. The Bill has a number of provisions in it, and there are provisions to establish regulations, as well . I think, Mr. Chairman, I will conclude my remarks and allow hon. Members opposite to make comments. If there are questions, I might be able to answer to them. Mr. Chairman: The hon. thE! Mernbr::'l~ fo1~ Mount Pearl .

Mr. Chairman, I find it incrediblE:~ that, first of all, thE• Minister was not ev ,,.n going to r·i s r,~ in his place to address this particular piece of legislation. An Hon. Member: colleagues? Where are your Mr. Windsor: He did not stand vel"Y long . My colleagUE!S al"E• out preparing th, :dr arguments for this l..20 June 8, 1990 Vol XLI lengthy debate, saving thE~mselves. Hon. gE!n l:.lelrH:'i'1 opposite need not t.htnk that th1s piece of lE!gislat :ion is going to slide through this morn1ng . Far From it. Or next week, For that mat l:.E!r. Ml".

Chairman, it ts incJ"E!CI:ib1e that the Minister would not have any more to say about thi s particular piece of legislatlon than hE:• just did. ThE• Hou ~; r:! IAJ:i.J.J rE~call that subsequ~;;•nt t:o thE· Minister s Budget ~1pE•ech th e l~E· lAJas a tremendous amount of debal' :.H in tl1is Charnber, and out stde, in relation to this parttcular tax. rhe Minister calls it a health and education tax, and it i.s the greatest. rnisnornr:!r oF any piece of legislation ever introduc ed in this House of Assembly. rt has absolutr:'lY nothing to do lAJit.h health and education. Absolutely nothing !

The Mini ster tr ies to say, and ht1 tr·ied to say a agai.n cl moment ago in his introduction, that he was forced to 'introduce this tax · because of cutbacks :in federal spending. Mr. Cha:innan, that is incredibly misleading.

The M:i.n:isteJ" knoJAJS fu1J w:'ll the Government of Nr!lJJFoundland and LabradoJ~ is this YE!ar r'E'!CEdv1.ng an additional $42 million mor e than Governrnont rE!CEdved las L yE:•iH' Fr·orn Lhe CoueJ~nrnenl:. of Canada, <'lncl that, Mr' Cha:innan, afteJ" I"E' CE:!iv:in<:J a windfall late in l:.he year oF $25 million more than they had anticip al:.E:'d throuqh E:'qual iz.at:ion payrnents, through c:\ J"eacljustrnent. So, JVIr. Chairman, you could say that $6'1 rn.l.11ion ITIOI"E:' is budqetecl this year than lAJas anl :.icipal: .,,.d J.a st year.

The Minister would try to say that he is :imposing this tax to make up for lost federal revenues . Now, No. 51 r~2o

Mr. Chainnan, that ts decE:~itfu1 in the extremE:!; t1nying to dHcr:dve the people of this Province into believing that this money is being assessed because of cutbacks in federal transfers, and that it will be dedicated to Health and Education. Indeed, it is not d1:!dicat:r::~d to Hea1.th and Education, it goes into gr::~ne1nal rE•venue. What is worse, Mr. Chairman, we pointed out sometime ago in debate that the Minister did not know, indeed, lAJhat he lAJas doing tAJhE!n hr::' "imposed this tax.

He had no concept whatsoever of the implications of l:.his tax or whom it would affect: what groups, what organtzations or associations, what ind"iv"iduals it would affE!Ct. He did not know, Mr. Chairman, that it was going to impact, in fact, on Government Departments thE!mselves, that E!Verybody had to be assessod. He has estimal:ed that he wilJ. raise $15 million this year and $25 mi.1lion next Yl')ar. Now, Mr.

Chai1nman, tAle qu<,,stiorwd that and I thtnk tAle lAJere r"ight; thr:~ MtnistE!l" did not realize that he had to tax all Crown agencies and all non-profit organizations in order to raise $25 million a year, i::tnd $15 millton this year. That is tAJhy they tAJel"E! not able to anstAJe!" questions. And this is what is so <.'\mazing, that Lo a11 Lhe questions that have been asked in Lhis House Lhe Minister· said, 1 I lAJi.1.1 l~:~t you k nOLIJ in good time . wr::~ a lne wo ,n·k i ng on it.

We are putting it togethe1n. 1 He introduces his Bill this morning in Cornrnitl:ee, which ts the opportunity for the Minister to giVE! details of the speci ·Fics of his legisJ.ation, and he q:ives us none, none, lAJhatsoever. He has yet to anstAJer any of thE! questions that tAJerE· pos10"d 'in this hon. House L2l June 8, 1.990 Vo1 XLI during the Budget Debate and tn Question Period. Day after day after day we questioned the Ministe1n and he has ~riven us no answ::1rs. Not only that, Min.

Chatr-rnan, 1 think befon' I go any furtht::~r I should 1m~ntion -I lAJas about to say a discoutntesy but 'it. is worse than that, it is an absolute dtsgrace that less than a half hour· ago this particu] .ar piece of J.egislation was circulated in the Houso oF Assembly. Now this is a major tax measu1ne. As I jus 1:. sa'i.d, the MinistE•!n has rE•Fusecl to anstAJr::'l'' any questions, Lo give any ciE!t.a·.i.ls on it., br:~CaUSE! hE! lAJas unable to, I would submit. He was unable to give those ansWE!Ins bE!Cause he did not know, nor cltd his officials know.

Calls were made to his Department to try Lo get information, and consistently we LIJerE• told LIW do not l"E:!a lly k notAJ yet, tAJe have not dE!C".icled, tAlE' iH'e working on tt now. The Minisll:~r brtngs :i.n and asks to have this piece of legislation dr::~bal:.l:~d.today, in less than a half hout", 01n maybE:! s1i.,~ht1y over· a half hour from the ttme it was circulated :in the !·louse"! of Assembly. Now havoing said all oF thal:, Min. Chairman, it rE:'a11y dOE!S not make a great deal of dtfFerence, because there is very ltttle information in this legislation, vetny l:i.tl:.lE!.

Basically, i.t says that everybody is taxabJ.e. The Minister· is nodding h:l.s hE•<.-H:I, so he :is confirming that everybody is taxable. It provides scJtTH:! exemptions For Lhe renewable resource industries: the fishing industry, the fol"es l~. indus Li"Y, <:~nd the agtnicultut"a1 tndustr·y. WE:' al"e assuming from this that al1 persons engaqed in Lhose ·.indUS tIn i (' S , eVen t h 0 W~ h l': h E• y k n OtAI No. 51 fOl

they· are not taxable, they must fi1e rE:'turns and must rE!gister as c::~mployc::~J~s. I t~.Jould ask the:~ Minister this question now. He had better start writing down his questions if he would, because we would like to have answeJ"S to this. I arn assuming that anybody employing fishermen or farmers, or anybody in the logging industry or the fort~ st. .indus l":ry, mus l: J"egisi:eJ" as employeJ"S, must keE!p a SE!t of accounts, must ftle those docurnc::-r1ts tAJith the Department, and must clairn an exemption on the basis that they are a renewable based indus'LJ"Y· Mr. Chairman, what bureaucracy?

Just look at the paperwork that is going to crc::~ate for thousands of small businesspeop1e in this Province engagE!d in thosE:' industries, and a couple of large ones. [s L:he Minister saying l:o us Corner Brook Pulp and Paper Abit.ibi-Pr·ice must do al1 of documentation? Is that what MinistE!l" is saying, l:hat they do all that and submit all papertA.tork? Does the:' Minister to say something? that and this the must that want An Hon. Member : documE!ntation . It is very simple Mr. Windsor : documentation . of employees it is sirnp1e?

It is very simple For the thousands those companies have, .8.D _tL<?_rl . ..:_ .!'i<:! . rn I?.£!: : (Inaudible). Mr. Windsor : .Il: is VE!I"Y simple . How about the documentation Government Departments are going to have to make, Mr. Chairmnan? We are led to believe that ther·e wiLl be a me c hani srn.

Th<~~ Minister did not te11 us tAJI'lic'n he stood ·in his place IAJhat t.hr:! rnc:: 'c hanism is I 22 June 8, 1990 Vol XL[ now going to be For Government Departments, so I ask the~· Mtnistr::•J" again if he would rise in his place and teLl us, IAJhat rrH :!c hantsrn is Government notAJ puU:tng in plac':' to fund the var·ious Departments of Government who, the Minisl:E!r says, are taxable and must submit a return, but they IAioi.ll rece·:i.vE! sotne compensation? I ask thE• Mi .nister how they wi1l receive that compensation and lAJher·e is l:.hat compensatton coming From in the MinistE!r 1 s Budget?

Oin is l..hE:' Ministc::~r gotng l:o bJ"inq in a Specia1 Warrant to cover that? No. He shakes his hE :!ad . HI') .is not going to br·ing in a SpE!Cial Wan·ant. I remind the Minist:E:'r that when I asked the same question a couple of months ago during debate hE! said, yE•s, 1 lAJ:i .ll bring in a Speci .al Warrant . NotAl hE! says no. I ask thE! MJnjstr:•l" v 1:;! I" y c 1 e <3.1" 1 y iF he IAJO u 1 d l:.1;! Ll us , when he rises in his p1<:tee, ho!AI he is going to put that Funding Lnto DepartmE!nts to compE!nsa Le thr'.!I'Tl foJ" w h a t t he y tAJi.ll h a v E:! t. o pay o u l. by lAJay of payJ"ol1 tax?

WhelnE• is Lhat money coming from? How is Lhat goi~g to be identified in lhe Budget? Hot.u lAiil1 it be:' accounted for? This is going to be an interesting exercise, Mr. Chairman. Renewable resource -based industries: I assume the Minis U:or does not consider tourism a rE!nE'IA.tab1e 1nesource. Thal:. does nol:. sut"prisE~ rne, becauSE! Lhe M:in.i .sl:E•I" considE•Jns tour·isJn i'l s':~a~>onal industry. He satcl that. :i.n Lhis House.

He contradicted himse1f in hts Buclgr,,t Speech, because hP found out, afl:.UI" onE:! .Y E~ dl" in off'"i.CE!, that the l·:ouJ""i.srn :indus l:J"Y is a tr·,:~rnE!ndous contr·ibutor· to Lhe economy of this Province, and to the revenues of this Government. As an employer in this Province it is third in line, and probably with rnore potent.ial than any other No. S 1 I~ 2 2

industry to gl"OlAJ, if the poJ.icir:~s of this Government lAJE'l"e such that they supported the tourism industry. The Minister has indicated it is a seasonal industry. He does not consider it a resout"Ce·-··based industry. I say to thE! Minister that the tourism industry is not only rr:~souru~d based, but one oF out" prime industries. It is an industry. Wt'' do nol': producE~ a Pl"oduct Lhat you ship to market. It is unique, Mr. Chairman. We do not ship thE! product to market, we bring the market to the product. Consider that for a rnomE:!nt.

We bt"ing tourists to this ProvinCE! to take advantagE! of our tourism product. We cannot ship it out, but it is very much a marketable product. We bring the mountain to Mohammed, and ther·e is tremendous poh~ntiaJ. for that. Mr. Chairman, t.his payroll tax is going to have very serious implications For many businesses and many industries. The Ministel" ll'·ies to say . that the first $300,000 is deductible, $125,000 this YE~al" prot"at:~:~d. That is an interesting point thet"E!. My colleague, the Member fot" Humber Valley, and I tJJE~l"e just discussing it.

A $125,000 deduction this yea!" on saJ.arir:~s paid from August 1 to the end oF the year, I believe that is, and that is s l:t"a ig ht pl"ora t ion. HolAJ about an industry or a business that. only doE!S bustness . in l:hE! fall of l:he year, a sr:~asonal industry, and I am sut"e thE!rl:~ arE:~ sorne? Hunting lodges, for examplE!, big garnE! hunting lodges are seasonal and they do their business in the fall oF the Yl'!ar. They may pay out a •total of $1501 0001 $2001 0001 $300,000 or $500,000, all during that period.

NotJJ, that is l~heir total annual cash flow, and they can only deduct For this year I 23 June 8, 1990 Vol XI...I $125,000, not $300,000, t~.Jhich they will be able to do next year. This only occurs for this first year. It only occuJ~s for· one year, but any business such as that only operates in Lhe Fall. Maybe there are seasonal fishing operations, I guess, and Lheir Fishing opt::'rations are exen1pt.

The hunting operation is l"esouJ"ce bas eel., a l"E! new<:lble r·r::· sou 1~ c e, and they a1"e nol:. exernpl:. at all. rhey opE!rate just in the fa11 and they are going to haVE! to pay l:.ax on anything over and above $125 thousand. Now nE!Xt y1;'at" that s<.-1rne oper·ation, M1~. Chatnnan, opE:~J"at·ing for the same per·iod of titne, th1? sarne period of the year flowing through the sc;nne arnounl: of cash, they wi 11 t he n bE! a b 1 E• to cl r::• cl u c t $300 thousand next year because il': is considerr:~d on an annual basis. Next year will. be for the whole twelve month period.

So, thE!re rnay lAJ1::•J.J. br:~ E:!XE!mpt.tons such as that and othE!r's, Ml". Chatnnan. And I ask thE:~ M'in:is'l:E•l" this, if tht::~l"e a1"e lE!gitirnatE! claims lAJ:il1 hr:' J"E•viE!lAJ thosr:~. and is ther·e a rnt::~chan'isrn that lAJe cot/lei put an amendment into that

section of this Bi11 that gives the Minister the authority .to adjust that deduction for that first year pertod? Now I would be quil':e content if the Minister had the authority to judgE:' E!ach casr::•, MJ". Chairman, and say yes, this 'is unusual. You only opeJ"at.E' in l:.he fall - An Hon. Member: (f.rli:wd t b 1 e) . Mr. Windsor: We1l. I dll'l E!VI?l'l 'f:'oolharcly enough this lflorn:i.nq, MJ". Chainnan to al1ow Uw Minis l:EH' to have the authot"it.y, on the aclv.ic':' of his oFficials. An Hon. Member: You dl"e bE'! ing ver·y genr:'rous . No. 1 ~ 1. I~ 2 3

Mr. Windsor: I am being very g~::•nerous. I don't know why. If they would look at particular casc~s, which would be hardship cases becausE! if, in fact, aLl. the revenue that company has gained during that period of the year when the tax rate is indeed not 1. ':> pE:'I'' cent, it is sorn(~thing like 4.5 per cent, 5 per cent, the effective tax rate, because the deduction is so much less. It may be morE! than that. In fact, it rnay be that the company nor·mally would not pay any tax.

It probably has a payroll of less than $300 thousand, but bE•cause it is all in that period and because for this year they can only deduct $125 thousand, a company may have to pay tax this year and only this year, and next year and subsequent years they would not have to. So, I think that is a r·easonable thing for the Minister to look at, Min. Chai.rman, and I IAJould suggest that perhaps a minor amendment needs to be made here to that particula1n clause that alloiJJS thE! Minister to deal with that. NouJ, Mr. Chairman, I have to confess that I l1ave not had time to go through rnost of this Bi] 1.

Thert'! is very lit:.t.lt'! in it other than the

definitions and who it is imposed on. Thr:~ rest of it appea1ns to be s tanda1nd Finance legislation dealing with the coJlpc ·l::ion of taXE!S. Can the Minisb:~r tell n1~:- if tht:•i"e is anything different in the mE:~chanisrns hE•re For collecting tax than for any of the o LhE:•r taxes, as it relates to the ability to perform, to irnpose leans on people? There are all kinds of power. Investigations, power to search and seize, all of these things. OnE:' point that I did no ·!::. ice here:~, 1_21~ June 8, 1990 Vol XLI Mr.

Cha"irrnan, bE!ForE! he :is :Uabl(;!, regardless of whether l:he employer has been prosecuted or convicted undeln a provision of this Acl: or the regulations to a penalty to be assessed by l:he Minister, not. exceeding 50 pE•r cent-. of the amount of the tax evaded or sought to be evaded. Now that one I have just bet:~n glanc:ing through in LhE! fE•w rrdnutes t.hat I have hac\ available l:o look at Uii~Se SOl~ts of dE!tai1s. This appears to mr:!, Mr. Chairrn<.'l.n, that l:hE!

Minist.E !I~ or some official designated by the Minis l::.e1n, has l:h(~ au t.hor·t l.y l:o impose a p(:•na1ty not E•xcc~edoi.n~~ 50 per cent of the amount of Lhe tax, and it could be quite significant . If the Ministe1~ Ol" his officia1s feel somebody has been evading them then they can impose a 50 per cent fine. No r·igh L to i::.l"ial or· to defend oneself. Just unilaterally, arbitrarily Lhe Minister Ci.'ln deci .de. M1~. Cha i l"'na n, tJJe IAri 1.1 havE! 1110 rr• t '"i.1ne to deal with these details, because l:h-.is dE!bal:e :is not going to end t.oclay, WE:!

IAJi.11 hav(;• t":ill 'll':! to dig -.into thts and to comparE! L~lris with other legislation, but t:.hat seerns to be very heavy handed. Maybe the M"inistE·r wi .11 takt=:' notE! of that, it. is Sect .ion 33, OffE!nse and Penalties . And Sect-.i.on 36, a penall.~y not less l:.han $200, not IMinE• than ~J; lO, 000 ·­ we are talking fines of $10,000 ? An Hon. Mernber· : ( 1 naud:l.b1rc•) . · Mr. Windsor: It "is a lot of cash, I::. he Minister of Environrnen t says.

He is quite right. 11::. is a lot of c a s h . 13 u t l: o a j a i 1 l.: e r·1 n o F n o t ITIOI~e than six month s, for· a pEH'son guilty of an oFFE!nse . And I assu1 'ne the IAJOI~cl.ing 'gu:iJ.ty of an offt:•nse' rnE~ans l:hal: ont:· has bc:~en tried and convicted and Found No . r1 1 1~24 ·

gui.lty. Let me assume that does not fall into the same category of thE! Mini stet" having thE! authority to decide. An Hon. Member : Mr. Windsotn: court. (InaudiblE~). A conviction in a The second event says $500 two $10,000; six months in jail or both. The third offense is $1,000 minimum, not mor'e than $10,000 fotn a ter-rn not less than two tAJeeks or mor·e than six months or Fotn both. So thE!r'e are vE•ry substantial penalties involved in this, Mr. Chairman. I assume those are a result. of legal act:i.on. The one that bothers rne is that the Minister and his officials have l:he authority undetn

Section 33, to impose a fine of 10 per cent. An Han. Member: Fifty pE!l" cent. Mr. Windsotn: Fifty per cent . NolAJ a 50 per cent f'.im"! irnpoSE!d on some paynllls, Mt". Chairman, can be qu'.ite signtficant. NotAl whr:"!tne is right? I mr:"!an this appears to rne guilty until proven innocent. The Ministetn can impoSE:"! a fine of 50 pet" cent, it lJ..Jill sit on the books and t~.Ji11 start accru:i.n~1 interest. I did notice there that thE! Min::i.s tel" can sEd:. intE!rest r'atE•s ftnom time to time. It does not say the prevailing interest r'ate.

It does not say pr'ime plus 1 per cent or 2 per cent or anything of that: nature. It says the Min:i.stetn may set incrE!ase rates. He could set an interest rate of 20 pE!l" cent, hr:! couJ.d S(~'t an increase rate of 50 per cent or 100 per cent i.f he chases. So if the Minister decides l:hal: I think this person tried to evade this tax or this company trirc'd to evade this tax, he can say we tAJ:i.11 tax him an L2 IC) June 8, 1990 Vo1 XLI addi tionaJ. 50 pr:'r CE!rl t Ol" WE! wil] pr:1nalize htm an acldidona1 50 per cent and we wil1 start tacking interest on that. Now you can tmagtne, Ml".

Chattnrnan, the process that t~.d.ll have t.o be gonE! thtnough For that company to go to cout"t, by the timE! you go through the legal process there would be a tremendous amount of intE•rest but1t up. I assume that in t E! res l:. will be tJ.Ja tv e cl then, i r~ that person is found innocent. But if not, by l:he ti. m~'! l:hat pE!rson is judged, iF that pet"son feels they ar'C::' not gui1 ty, by l.:hE! time that pc::'t"son is judged by th~:!

COUI"t to be, in ·Fact, gu·ilty of-­ thE! offence the finE! is no longe1n 50 per cent, it could be 1. 1)0 per cr:"!nl:, depc::'ncling on L:hE! lnatE! of inter1:!S t that the Minis l:er' imposf:1CI and the 1 e n g t h of t :i rn E! , a n d lAJ e a 11 know how long it takes to get something through the courts in this Province. So, Mr. Chait"ntan, these are serious things that nE•I'::'cl to be considered. Now, Mr. Chairman, there are a nurnbt::"!r oF quesl:.'ions thal: tJ.JE'! haVE! as ked about the payroll tax. ThE:!

First thtng obviously that. i.t clues to private corporations is very, very clearly put those cotnporations al:. a clisaclvantagr::• with competing corporations From outside the Province, from wherever in the world. 8ut I th::i.nk our matn concern, Mr. Chairman, l"E~aJ.1y shou.ld bE! our closr:"!st compel:.:itot"S, the Mat"il:.:irne Provinces oF Canada. Because in many, many cases corporations choosing to establish in Eastern Canada tAJi.1l have to j uclqe and to choose between, For example, St. John 1s or Halifax.

Let us put s om E:~ t h i n g i n I" e a 1 t e r· 111 s , 1 E:! t. u s talk about the company that is proposing to rnovE~ in here and l:.ak1:• advantage of the Hibernia No. 51 R 2 1)

development, let us assume that once the Premier gets his head straight on Meech Lake and we get an agreement, that Hib ernia will then move ahead. Lel: us assume that is going to happen and that a lot of economic act.ivity lAJi.11 ensue. Those cornpani(~1s. as we saw in the past, can operate equal1y we11 from St. John 1 s or Hal if ax, particu1arly when I say, Mr. Chairman, that this Government seems to have softened t:he provincial preference policy and the position that the former Administration took in relation to doing busim1ss, particulal~ly in the oil and gas industry, in Newfoundland and Labrador.

They seem to be making it easier for companies to operate out of Halifax. Many companies can do that, and if you were trying to decide, and you were J.ooking at. the economics of the two locations. the 1.5 per cent payroll tax. Mr. Chairman, would make a big difference, particularly if you are labour-oriented. If yours is a labour-intensive sort of company. then it would make a big difference .

I am not about to suggest that the large contractors which are capital-intensive, dealing with the major contracts _ .. the 1.. 5 PE:'r U!nt paylnoJ.l lAli.l .l rnake a difference. no question about it -­ but I do not suqgE:~st For a mornE:1nt that that will stop them from establishing in Newfoundland . I hope not. But. if they are trying to find reasons to establish elsewherE•, it. ce1ntainly gives thE!Hl another very valid arqument that they can make. Mr. Chairman, how about the company that is traditionally 1.26 June 8, 1990 Vol XU operating in both jurisdictions?

How about a trucking company, trucking goods From Nova Scotta to NelJJfoundland? No1.u, that is considered two companies, one established in Halifax, sendinq trucks here and hauling ftsh to Nova Scotia and viCE! ve1nsa. thE! other established in St. John 1s doing the same thing. They are competing stele by side, same operaU .on, most of their cosl :s <H'E' strni.lar. They have the advanti:-:tgE• of cheaper fuel in Nova Scotia. An Han. Member: (Inaud:ible). Ml~. Windsor: Mln. Chai.1nrnan, my understanding is that I have! an hour in leading off this debate . An Hon. Member : (Inaud:ible) . Mr . Windsor: Not left.

I have tlAlenty-three m:l.nutE!S seconds at this point five minutes spoken For and fifty-one in ttme. Mr. Chairman: rhe hon. ME!ITibur ca n continue. The Chair w:ill check and see what time is left. Mr. Windsor: Yes . I though, that lE!c\cling understand, of'r - lhi s and a.ll thi r'LY debate, I have an hour othe1n han. MernbE!Y'S have minutes. An Hon. Member : (Indudib1e). M ~ _~ ndsor. : In Cornrn"il.:Lu~~. on second rE!acl:ing. ThE! lead spE!aker. thE! Pr'E•rn:ier' <Hid the LeadE:'r of thE• Opposi-l: .·i.on hdv1:! an hour and all other Members have thirty minutes.

The Minister of Development is confirming that. The Table will confirm it. Now, Mln. Cha:irrnan, cons:i.ciE:•r' U10se t:.l,~oJo companies. lAJorlcinq side by sid~~. clcd.nq exacUy the san1e No. 51 H26

thing. The Nova Scotia company- An Han. Membe1n: (Inaud:ib1c:!). Mr. Windsor: I know the han . Member's opposite will give me leave for three or four days, they enjoy me speaking so much. Mr. Chairman, the company operating in Nova Scotia has a number · of advantages, cost~ of living, fir·st of aJ.l., the cost of doing business in Nova Scotia is somewhat Jess than in NetA.Jfoundland; the cost of fuel in Nova Scotia is somE!tA.Jhat ].("~ss than in Newfoundland. So, those t.tA.Jo factors make it more attractive for them, anyway.

Now, this Government is giving them an additional 1.5 per cent on their payroll, as an incentive. An lion. Member : (Inaudib1e) . Mr. Windsor: How can the Minister of Finance say no? How can he say no, when we are debating a Bill that imposes a 1.5 per cent tax on payroll? How can he shake his head and say 1 no 1 , Mr. Chai1nman? Dr. l<itchen : (Inaudible) . Min. Windsor : Are they? Is the Mi.nister suggesting, Mr. Chairman, that out-of - province companies will pay this payro11 tax? How does thE! Minis Ler p1nopose to get his hands on their books?

How does hE~ propose to deter·rn:ine what pE!Incentage of their time is spent opE~rating in NewFoundland and what percentage outside? Dr. Kitchen: (Inaudible) . Mr. Windsor: You 1Ad11 do it . Well, Mr. Chairman. if the Minisl:.e1n can do it, I congratu1ate him, and · thr:~n tAle shou1d have him L2'/ June 8, 1.990 Vo1 XLI committed, because it will. cost him rno1ne to collc•ct l~hat t.ax l.:han he is going to gE!t flnorn it.. What nonsense, Mr. Chatrman, to suqgest that you can gE•t l:hat information.

I mean, Lht?. st1nucture -.. anothe1n point tAlE' tAli1l get into ·- the struct~ure that is going to be required to co11ect Lhis tax is incredible. T he Minister nE!E!cl not shake:.• hj s head, Mr. Chair·rnan. It "is cl.~:!aln l:hat the Mintster has been trying t o te11 this House that the rnE!chard.srns that arE! in place i:'lt"e suffici.:~nt. Well. Ml". Chail"t Tldn, his officials are saying differently. Anybody tA.Jho knotA.Js anything about tax col1ection knows differently. The Minister is only foo1ing hitnsi'::'lf.

HE! is not fooling anybody else to suggE!St that this i.s not go"ing to cost mi.llions of dolla1ns, <:tncl dozens if not huncil"ecls of employees to administer. Wait until we get. i.nto the appea1s on it, Mr. Chairman, and court cases on this and costs f rorn t h1:! Department of Finance and DepartlTII'::'nt of Justice off icials in trying to dt::'F(•nd sOJfiC! oF l::hE! i1'npositions unck•r Llris tax. Then we t.~.li.ll SE'e. Mr. Cha:il"rnan. how much it costs to co1lecl": Lhis t ax. The appea1s From the non - prof i t aqE!nciE!S, thE!

MinistE•r has noL yc:d:. t:old us. in Fac t he hc\S indical.:ecl lo us t hclt. chUI"ChE:!~; Clnd non ·- PI"of:i. L insl":itul":ions wil l be Laxable. They tA.J:i.11 bE! t <:\X!:lbir:!. NotAl, thE!J"e is d

section in Lhis Lhal": says something about Lhem. The on l y thing l:hal~ I have f ound so Far·. iF the Mi ni s t er can po i nt out so mething di f feren~ I would be dE!l ".i. ghted t:o sE·e i t --· ~)ect:i. on 3 ( 8) 11 No t.tA.Ji t h s t. an cling s u bs E:· c t ·ion ( l.). an empJ.oyel" t hat is a J.oca1 authority is not rE!quir·ed Lo pay l:ax p1nio1n to January l., 1991. 11 The Minister had l~o back dot.~.Jn on that one:', Min. Chairntan. We poi n l:.t::~d No. 51 r' r1

out to them that municipalities who have to pay taxes, the Minister of Municipal and Provincial Affairs is alAJare of this, I trust, that municipalities noLI.J wi11 pay taxes, 1. 5 per CE!nt of their payroll over $300,000, of course. But the Ministeln had to back clown and say lAJe11, the budgets have alrE!acly bE'en approvE~d by the Minister of Municipal and Provincial Affairs, when we pointed l:.hat out to him so, so we can hardly impose taxes on them this year. Very significant $2 50, 000 fro111 thE! City of St.. John's, I believe, a lar·ge amount of money.

Section 3(8) says: "Notwit.hstt'lnding another provision of l:.his Act, where an r:~mployer is (

a) a registered charity or registered non-profit organization for the purposes of the Income Tax Act (Canada), or (

b) considerE·d by thE :! Minister to be a prJvate sector non-profit organization, the lnemunE•ration paid to E!lTiployees at each establishment shall be deemed to be paid by a separate person for the purposes of calcuJ.ating tax." In oth,?r words, the Minister is saying a national organization like the Canadian Red CJnoss lAii.ll pay l:ax as if that tax were paid locally.

If employec::~s of l:.he CanadJan Reel Cross are paid by head office, which some of them are I understand, and thr:' question had bE!I'::'n raised in l:he Ho-use duJ"ing debatE!, we · as keel thE' question, what is stopping those corporations from paying all of l:.heir people from h1:>.ad offiCI:! in Toronto or wherever l:.he head office of Canadidn Red Cross is. So the Minister is making it clear I'H?.re l:hat Lhe t.ax should be caJ.culatecl as if those pE•ople WE!rl'::' paoid in the St. John's office of L28 June 8, 1990 Vol XLI the Canadian Red Cross. Is that what Lhe Moinisl:.E!r' is saying? An Hon.

Member: (Inaudi.blr:•) . Mr. Windsor: No . Chul"chE•s, yes, o I< a y . Tho M i n i s L e r' ".i s 1 n a ld. n g provision there fo1n cl·n.ll"dlE!s, I L seems that he made us aware of that sometime ago. Churches wj 11. not be cons".ider ed as l~he Angli ca n Church of Newfoundland they will be considered parish by parish and, thr:~refor~::', the payJ"olJ. rnay bE! done. Thal:. is a lAJC"l.Y of get .l:.ing around it. We will deaJ. with that. How about any national employees of the chuJ"Ch hE:!rE•?

If the national organizal:.ion has a payroll of more than $300,000 at"e those employees exempl:.ed too, becausE• therE! is onl.y one or· Lwo employees at the pl"ovincial ofi~-Lc'?. herE!? ThE!Y arE! E!XernptE!cl, the M:i.n:"i.s Let" of DevelopnJE!nt says. · Tell thE! Minister of Finance because he does not know that. An Han. Member : (InaucU.ble) . Mr. Windsor: Ah, okay speaking to somebody else . hE! is Will the Minister l:.ell us l:.hen, how school boards now at"e qoinq l::o be Funded? ThE!

Minisl:eJ" has told us there wi]] be no :itnpac L on school boards as a r'E:~sult oF l·:hi.s, bE!Cause tE!achE!I"S ar·e bEdng paid by thE! Province and thE• Mi .nis b"'!t"' is going to somehow pu L motnE! monr::!y inl:.o l:.he Department oF Educai ··i.on to pay payJ"olJ. Lax on LE!acher·s, he has told us. How about Au tho1ni t:i.c:!S, t'tnploye.c~s No. 51 Lhe School and the schoo1 thurnse1ves? rax boar·cl J"h (' R28

Minis·ter has told us they would be taxable. But he said it is onJ.y probably onE:1 boa1nd or l:.1JJO boa1nds in the St. John's area that would have a payroll large enough For that. In chc.:1ckinq, Min. Chairman, we find that vilntually E•vt::1ry board in this Province has a payroll that will be subject to payroll tax, because thE•y haVE:1 a pa~nnoll of more than $300,000, virtually eve1ny board, th10:1re may br:~ onE~ or t.1JJo. Mayi:H:• a board on l:he Labrador c o a s t , I 1AI o u 1 d t h :i. n k , 1Aiith a small numbc:11n of c:HnployeE.~s. I do not kno1JJ. An Han. Member : (InaudibJ.e) . L.ab1nador East Mr.

Windsor: The Board 1Aii1l have ·to Chairman. pay taxes, Mr. Mr. Warren: The Labrador Inuit Association will have to pay tax. r.1.r. .. _: __ .. ~i.p_<i?. . .9.C : T h e L a b r ad o r I n u i t Association, that is interesting. All of these groups, Min. Chairman, are going to have to pay taxes. ThE! Min:i.ster says it 1Ari1l haVE! no impact on education or on the boards. I think we estimated this will cost Memorial University $1.6 million. Has the Minister yet made a decision on ho1AJ that $1.6 million 1Aiill be~' ~rivE!n back to the university? Does the Minister know? He says he does.

So 1JJi.l1 the Minister tell us that wh~;:1n he gets to his feet? He may not. Mr. Chairman, IAJe 1Ali.l1 ask it agaoi.n and agai.n. There a1nE! ei~JhtE!E:'n or nineteen of us over here and we wi11 keep asking it. until 1AJe gE!t an answer. We wan L to k no1JJ whE!re that $1.6 million is going to come from. Where will the Minister find it in his Budget? Will he take it From other educational L.29 Jun1:~ 8, 1990 Vo1 XL.l programs? The ~~~. 6 rni.11ion ts l:he amount which has been calculated that Memorial University will have to pay on their payroll. They have a tremendous payroll.

Universities and educationaJ institutions are labour intensive, more labour intensive than any other employer, probably. The UnivE.~rsity has E:'Sl:.irnal:-.(!d t·.:hat thE:1Y aJnE! J.:i.ablr:~ foJ" ~>1.6 rn:i.]J-i.on und1?.r this pay1noll t:ax, and l:.hat is a fai1n chunk of rnorwy t:o Memorial Universit:y, and to anyone. Since the Minister of Finance has toJd t:he House t.-.hat these institutions will be protectE•d f1norn that, sornehotJJ, I am asld.ng htrn no1JJ, VE!I"Y s"i.rnpJ.y, 1AJheJ"e "is it corn"ing flnom? Whal: rnechan"isrn is he going to use to get that rnoney into thE.~ hands oF l::hP University?

Is this a specia1 grant to the University? Is he going to revise the budget a1location that: has been aFlPI"Ol.Jed by this House? HE! can do that. W hE! r e do(! s he g E! t l: he rna n E:' y? A Special Warrant. of $1.6 mi]lion? What foolishness we are 1nLo here, Ml". Chcl".ilnrnan. BJ"in~~ in a Sped.e1.l WaJ"rant, makE~ a sp!':!C"i.a.l gJ"anl. to the.:' Unive1nsit:y so they can pay :i.t back to Lhe Deparl:Jnt:•nl:. or Finance. What ar'E:! tAl!':' l:Jnying t:o accompJish? Has the table yet detE•JnnJ:ined that 1 have an hou1n to speak? Mr. Speaker: Yes . ~. Windsor: rhank you .

I hav~;:1 ttAJenty --s ·ix ll'linul:es and 1 ef t:, t:hdn Lhe thirty-one seconds l:.wenty --s"ix rrr.inut:es Jonger han. gE!nt.J.erne1n 1AJOu1cl }-ike to he<:<J" th"is sl:ui-F. An Han. Member: lhE~ Minis l . .r::•1" writing down a11 your questions. 1' c -· No. 51 R29

Mr. Windsor: Yt~ s, I can see him writing down all my questions. Maybe that is why he is making those silly faces, they are hurting him so much as he writes them down, grimacing. He realiZE!S that he does not know the answers, that is his problem, and he is saying, what am I going to say? He has t.t..uo offid.aJ.s in the gallery, tl..uo uery capable officiaJ.s t..uho are listening to every word, trying to get the answers ready for him. They will. comE! up with something because I have confidt:~nce in both of lhem. I have worked tAli th them long enough to knot.AJ thE!Y are veiny capable individuals, bul:.

I suspect they arE! in a difFicult position now, because they knotAJ what I am saying is right. They are corning to take you away, ho, ho. They are corning for the Minister, after hearing his Ministerial Statement this morning, and the:' introduction to l:his Bill, they ar·e corning to ta I< e him at.AJay. Mr. Chairman, the Minister has not yet toJ.d us how hE! is trying to replace revenues b~dng paid up by hospital boards. How does he propose to do ·that, Mr Chairman? What mechanism are we into?

This legislation does not tel 1 us, nor wouJ.d I expect it to, it is enabling legislation. rhe Minister, I think, OWPS it to thE! House, Mr. Chairman: these questions have been asked often enough and long enough. In the Minister's :introduction hr:~ owed it to this House to answer these very basic, stra ightforward, simple questions, that arE! being asked, Mr . Chairman, not only by us, we are just speaking on behalf of these institutions who arE! asking these questions. Where are they going to find that mom!y?

Wher·e is Memorial going to find $1.6 mil1ion, and how is thE• Minister 1.30 June 8, 1990 Vol X LI going to get it to them, or l.oan it to them? The recoinds shot..u the Member for St . John's Sou l:h t..uants to loan it to them, but hol.AJ ar 'E! they suppose to pay il back? Raise tuition? No, thE!Y ai"E! not going to raisl ;! t:utt.ion. Mayb(• Lhe MinistE!r's arE! going to lAJi.11 l:hetin car a 11 ow an c e s to t: hE! u n i v E· r s 'i'l: . t E! s so they can pay it back. Mr. Efford: (Inaudible) sa y nothing this morning . Mr. Windsor : We t..ui.l.l gc:>t you on your fee t .

You hav e al. l af ternoon to speak, do not wo rr y. Mr. Efford : Oh, I do not-. nrind that. Mr. Windsor: And aJ.l nigh t and all day tomorrow . An Han. Member : We wa nL to gel out of here at 12 :00 o 'clo ck. Mr. Windsor: Min . Cha-:i . nnan, i ~:; t.he Minister determined - Some Han . Members: Oh, oh! Mr. Chairman: Ord er, pleas e! Mr. Windsor : Th ank you, Mi ". Chairman . Mr. Chairman, has th E! Mini sl:er y c~t . dE!terrn tned th e irnpacl:. of' t:hi s tax on the cost: of housin~ in th is Province? The construction of housing is a major E!inploy Pr in this Provin ce. It is fair ly labour inl :en sive.

Il :. is also ess ential . Has the Minis ter ye l det ermin ed Lh e cosl: of this , taking int o acco un t ned .. on1 y lhr: :! pay r o 11 ta x o n c a r p e n lE ! r· s d n d plumbers and eJ.ectrician s wh o butld a horne , pipefoit t.c::•r s and peopJ.e working on the concret e and a11 the rest of it, those tAJho arE ! insta11 ing carp et and do ing No . S 1 R30

pa:int.ing and tAJallpapE!J"ing, all of that labour? How about the pay1"oll tax that v.Jil1 be paid out by suppliel"S of mab?.l"ials, the building supply companies, and the equipment companies and the mechanical and electrical suppliers? Has the Minister yet detel"rnined what that is going to cost? Mr. Chairman, we had a numb(~~r, I do not have it in front of me now, the additional cost to NewfoundJ.ancl and Lab1"ado1" 1-iydl"O and Newfoundland Light and Power in their payroll.

That wilJ. reflect on electricity rates in this Pr·ovincr:~, and that is on top of the $10 rn:illion guarantee fee the Minister has imposed, and on top of the $30 million PDD subsidy this Government has eliminated. On top of those $40 million, Govel"nlTlE:'nt is nouJ '.imposing a l. ~-> per cent fee on all labour involved in the supply and distribution of energy in this Province. Mr. Chatrman, I think it. is time l:he Minister uune clean t,o..lith this House and gave us ·t.he figures of exactly how much that. v.Jill impact on electricity rates in this Province. Vel"Y clearly it:. v.JiJ.l, in fact, impact.

On those energy intensive '.industries that a1"e both here now and that we would have lii<l:'d to attract, HH~ Minist.E:~r is making it very difficult. -Mr. Chainnan, thE~ M:irr.istE•l" says there '.is an exemption - Some Han. Members: Oh, oh! Mr. Windsor: M1". Chairman, could you stifle sornE~ of the han. Members opposite? It is getting vel"Y difFicult to speak hel"e v.Jhen they are carrying on about ten different conversations back and 1,_31 June 8, 1990 Vol X L.I FOl"th. Ml". Speake!": Or·dr:~r, plE!ase! Mr. Windsor : I arn saying something. Hon.

Members opposite may not. like it; they are a little reluctant to deal with the truth. They may not like it, Mr. Chairman, but it is there. Perhaps if they listened for a change they would learn something. MJ". Chail"rnan, hotAJ about otheJ" industr·ies notAl that are qo:i.ng l:o be at disadvantages? Marystown Shipyard, foJ" exarnp1.e. Mal"yst:.OIAJn Shipyard is having a very difficult time - one of the 1.owest levels of emp1.oyment in the Marys totAJn ShipyaJ"d in a numi:HH' oF YC::'ars. !~:'Ll.: ... :. __ ... l.f.fg_r. ~L : w h y ? BE!CaLJSE! or t.I"1C'.! payroLl tax? Mr.

Windsor: Becaust~! of a l,o..JholE! numbel" of factol"S. Because of thE! state of th~~ econo1T1y as a J"esult of the incompetence of this Government, to start out. Mr. Efford: Br::~caUSE! or the s t.atE· of the economy as a result of seventeen years of JnisJnanagt~rnE!nt. Mr. Windsor: Is that: r·ight? J'hc:! han. gentJ.emen cannot hide their heads in the sa11d on that, Ml". Chairman.. The economy is clic La l:.r:~cl by thE! po1icies in placE•, of GoveJ"nmc:!nl:.s oF thE! clay, to a vel"Y large degl"ee.

IF Lhe ho n. gentleman would like to have a look aL the Budg,,.t docuJnNlLs I'H' t,o..J:i.ll see that: the economy tAJas headtng in l:.hE! r·iqhl: d'iJ"ecl:.ion prior to this Government taking power. Anyway, Mr. Chainnan, I dJTJ not ~Joing to v.Jas te time deal.ing t,o..J:i th No. ~.>1 R3 1

the Minister of Social Services. He makes no meaningful comments anyway. I am asking about Marys town Shipyard, the impact now of this particular tax on their competitive position, and they are competing with yards in Nova Scotia and New Brunswick who do not have:~ this 1. 5 per CE!nt, and yards all around the world. It has been very difficult anyway, Mr. Chairman. Mr. ~fford: (Inaudible) contracts from the Government (inaudible). federal Federal Mr. Windsor: Mr . Chairman, will you silenc -e the Min'.iste1n of Social SBI"Vices? An Han. Member: kiss a pig. Tell him to go Mr.

Windsor: It is very difficult to compete internationally, Mr. Chairman, at any rate, and now they have another 1.5 per cent disadvantage. Mr. E·fford : (InaudiblE!) . Mr. W:indsor: I hopE! thE! Minister of Social Services has a great deal to say about this tax when I sit down, Mr. Chai1nrnan. I will be delighted to hear some of his legitimate comments, not his babbling. An Hon. Member: (Inaudible). Mr. Windsor : We iAd.ll be:~ he1"e until 6:15 this eVE!ning, the han. gentlt::'lflan need not IAJorry about that. We had you here last weekend and we IAJill have you here again. Mr.

Chairman. this tax is s tyl1':!d as a Health and Educatton tax. Mr. Decker: You said that before . L32 June 8, 1990 Vol XLI Mr. Windsor: I said that. Mr. Decker: Do you want to say it again? Mr. Windsor : l<et•p Lisl":E:'n.i.ng, l:he Minister of Health, keep listening. Ml". Decker: I arn . Mr·. Windsor· : That is good. It i~; styled as a Health and Education tax, yet VE!ry clE•arly it. is tax:ing educational ins t.i l:ut.ions. probably more than most other institutions. An Han. Member: TherE• is no n,: ;!ecl to tax educational institutions . Mr. Windsor: Nom~ IAJhatsoevel~. the hon.

M:l.nistE!l" of' Educatoion going to give a grant to school boards to cover the paid? No, he is not. Dr. Warren : (Inaudible) impact on school boards . Mr. Windsor: Oh! I C' , .. l'lOIAI l:hl?. tax not An Han. Member: He has saoi.cl it~ over and over and over. Mr'. Windsor: HE! said thEH'E! is no impact bec~use teachers are pa id by Government. The Minister of Educal:.ion should lisl':l:·n For' a rnornen ,t notAl, becausE· ·maybe hE'' does not know.

And iF he does not k n OIAI. then I a rn s Ul" e he 1.11 i J ·1. be concerned. rhe Minister oF Finance has said that school boards will pay payroll ta x on their own salaries to their ernployeE!S. Mr. Efford : (inaudible). ( F you imagine Lha t Ml". Windsor: Let the Ministr:•l" of Finance t:e11 us hoiAJ hL::' is gotng to do it. No. 51 IB2

An Han. Member: He told you, boy. Listen to thE-) man. He:~ has already told you a dozen times. Mr. Windsor: He has not to1d us. He has consistently refused to answer questions in this House because he either does not know or is too incompetent to know. No, he is not as incompetent as the Minister of Social Services. I wil1 not say that about him. As bad as he is, he is not that incornpE!tent. Mr. Efford: That is even worse. You can 1 t be a nice fellow. Mr. Windsor: Not to you, to tAJho deserve it. When I heatn incompetent babbling from Ministe1n of Social Services, it brings out the worst in me. Mr.

Efford: Who helped put ov~;;1r there? those this the then you Mr. Windsor: And I arn going to help bring you back, you nst'd not. worry about that. And it will not be long now. If your Premier does not get his h~;;>ad straightE:1ned out up in OttatAJa it tAJi11 not bE! long now, becauSE! the peopl~~ a1ne going to turf you out of he:1re, the:1 whole crotAJd of you. Mr. Chairman, the Minister of Education should really question it, because I think he is sincere. I think he honestly believes that it is revenue neutral. An Han. Member: (InauclibJ.e) . Mr.

Windsor: Well, then, hotAJ cloe:'s the Minister e:1xplain l:he fact that. the Minister of Finance stood in Lhis House and told us that school boards wilJ have to pay payroll tax on their own payrolls? L33 June 8, 1990 Vol XU Dr. Warren: He (inaudib1e). Mr. Windsor : 1-1~;:~ did that. Maybe Uw Education should go ft"om his co1league, will not tell us. l:o1d not. tr:>ll MinistE!I" and find because you us of out he An Han. Member· : H~;;' has gone:' nolAJ . He has gone to ask questions . Mr. Windso1n: fhey arE! bo Lh qone• now. They a1ne on scI" amblE! notAl to find out tAJhat .is goinq on out there a~Jain.

On"is, corn(;! dotAm and tell them, boy. They do not know. An Hon. Member: Tell thern what? Min. Windsor: TE!J.]. 'l~hr::•rn hotAI il. i.s going to be handled. rhey have rE!fused to tE!11 us. This tax :i.s styll;!d as a Heall.:h and Educat.l.on tax; it. LaXE:1S E!clucat:i.ona1 :institutions and taXE!S healLh cat"e institutions. Now, Mr.

Chairman, we have had sev~;;1ra1 oppotnt.urd.tit:'S l:.l-ris rnot"ning to talk about thE• E:>c:onorny of Hd.s Province. !"his tax is ve•t"Y important as it re1ates to Lhe economy of the Province, because the:' economy is dictated by a numb~;;11n of Factors, not the 1:::-C"tsl:. of which is the level of Laxation imposed, and thE!re atne var'ious methods used in differenL provinces and in different countries and under difference schemes of Government. What-.·. one looks at, as we satAJ in a t"E:!Cent bond issue, and as Lhe Minister stated in his staternenL Lhis morninq - Lhat part of it was accut"ate.

It. is het"e sornetAJhr::•rE!, HE! t.a1k~;;>cl about:. th1:! fact.ot"s t:hc.~l: determine the borrowing power of a Government: economic performance, economic expectations, recent budgets, financial performance, borrowings, debt position, value No. 1)1 1n3

of the Canadian dollar, interest rates in Canada, s:i.ze of the deficits, and so forth, and, obviously, all that ties into the overall tax system that is in place. Any investOJ" in this Pr·ovince is going to look at the overall incidE!nts of taxation that is imposed.

He is going to look over a lot of factors: He is going to look at the level of personal income tax, which is the highest in Canada; corporate income tax, which I believe is sti .ll the highes ·t in Canada; he is going to look at the payroll tax; hE! is going l:o look at municipal taxes; he · is going to J.ook at the whole range of taxation he:' has to deal with if he is to establish in this Province. So, Mr . Chairman, any investor who looks at thr:~ course this Government has set over the past two years - An Hon. Member : One year. Mr. Windsor : Two years. Mr. Matthews: Two Budgets . Mr.

Windsor : Yes. un ·For tunately, you have been here tJAJO years and il: set:' JnS like a hundred years two Budgets. Mr. Chairman. when you look at those I:.Luo Budg(':!\:s and you E!XarninE• the fiscal po1i ciPs of this CoveJ"rllnt'lnt, and you see l:he SOJ"ts of t.axati.on JnE:!aSUI"E:!S that a.J" e bet n g i rn p o s e d • you lAJO u 1 d havE! to bE! conCE!I"nE!d. concE•J"ned bE!Cc:WSE! last year 1 s Budget tAJas reasonably straightforward. and it wa s reasonably. l1ones t. ThE! Minister. last year. identified in hi s BudgE!!: l:he ti'.lxes that IAJE!J"e bE:'tng impoSE!d. He carnE:! fortAJard t.uit.h it.

He IAJas up front. and he said I arn imposing measures. This year he tried to hide them. 1..34 June 8, 1990 Vol XU Mr. Baker: Tell us about (inaudible). Mr. Windsor: All the PresidE:!nt of Treasury Board has to do is 1ook at rny Budget, in 1988. Some Hon. Members: Oh, oh! Ml". Wind sot": Oh. Mt". Chait"ITJan! T'he Ministc:~t" IAJ'i.ll find out tAJhal:. I IAJi.ll do notAl, tAJhen IAJC' gr:!t back ovE~r thc:'re again. It tAJi.ll not. bE! veJ"Y long . I can use the Mini ster's IAJOJ"ds, Mr. Chairfnan. Wl'l ('l1 WE• t.Uel"e on that side and tAle sa:i.d to the Opposit. ion of l:he day IAJhat would you guys do?

Ah, you are the Government. It is your job . Mr. Efford: do . We told you whi:i L l:.o An Han. Member : (Inaud:i .b1(c') shu\: down the Grace Hospital. Mr. Windsor: He did no t t.E<LJ us. H e c o n s i s t e n 1:.1 y r E! f-u s ,,. d t o c o 111 e u p with any c\1 t.E!J"nat:L VE:!S. Th:i.s Opposition has consistently laid dotAm a1 ter·nat:i.VE:'S Fot" a 1Aiho1e range of policies, cons:isi:.E!nl:ly given fon.uard to thE'! peoplr'! of the Province an alternattve to the programs and policies o-r this Government. Consistent1.y.

I atn not going to go oinl.:o ckot:,:~·i.l. but I will say to the President or rreasury Board that I will not b I" :i. n g i n L h e s e p o J·J c :i C::! s L h c:t t a r' l:! disincc:'nl:.ive l:.o inclusLJ"Y and business. That is not: Lh1::• IAJd.V t.o str·engl:.hen U1t'l econorny, that. only rnakes it worse. We have businesses out there today that. are straving. And you think it is only 1.5 per CE!nt. TherE· an.'! a 1ot of srna11 companies out LhE:'t"e today that t:his can havu an 'i.rnpact on . I spoke with one 1ast week. I No. 51 K34

tabled dE~l:ai1s in t.his House. I do not know whei"O rny notes are on that nol.IJ, I may have tabled thE:'m. I had a letter hc:~re from a srnail businessperson who had written the:~ Minister of Finance - I tab1ed it . here during a Question Period a couple of months ago - about the implications of the tax on him . I spoke with one businessperson 1ast l.IJeek IAJit.h a small farm hei"E:' in this ProvinCE!, a business that is fairly labour intensive. The tax on that company next year will bE ~ in the order of $50,000. That is a lot of money .

That is a lot of money on a small company, when they are starving to death now . fhe Chair says I have five minutes. I have seven minutes and twelve seconds, because I sel:. my stopwatch when I stood up. An Hon. Member : He is arguing with the Chair now. Mr . Windsor: tAli th the Chair. be fine. I will not argue Five minutes will Mr. Chair·rnan, thai: company, which will have to pay out $50,000, is very clearly going to be negatively impacted. In fact, tA.Jhere do they Find it? WhE!rE~ do they find that $50,000?

It -is not there for th<::'m to pay out; tt is not in theil" profits; they do not have the profits to sustain it. So they have no choice but to lay oFF people. They have to lay off two pE!Ople and try to do the same amount Of IAJOrk IAJi'Lh l:.tA.IO 1E~SS people. That is the impact of this particular tax. It is going to cost jobs in this Province. There will be some examples like that, wh ere there will be layoffs; there will be far rnore examples where L3' :i JunE:' 8, 1990 Vol XU additional hiring s t;.J:i. '.1.1 no t~ bo possible.

We have a program here, through the:~ Departm<::~nt of Labour·, to t1ny to assist people to hire additional staff, I think it. is a SO per cent subsidy on salary in the first year. Governm ent changed l:hat, too. We hav o a program of li"ying to do tha l, to assist somebody to pick up an <::~xtra staff pei"son, and, at thE! same t.'.i.me, we arE~ irnposin<J a l·:.ax which w:il1 cause thE·m to 1ay ofr - a staff person. The policies are counterproductive, yery cJearly counterproductive . Mr.

Chairman, this tax w111 be seen as a tax which is onE' of l:.h''' greatest deterrents to es ·tablishing business and inclusl:I"Y in this Province. It tAd. -ll bE' a very significant factor in increasing the number of bankrupt ci E:~ s l. hat. a r· c:., 9 r· otAri n 9 day by day. All you haVE! to do :is qo talk to the businE! SS cotntnun il:y . Go talk to the busine ss cormnun :il: .y and see what is happening out thel"e; see hotAJ many of t.hern <:n·< :! struggling; S8E! hOIAJ tnany O[~ l:.h eiTI are having problems paying their biJ.ls.

They a1"e havinq problE!ms paying theil" bills bE•cause othE!I"S are not paying th1:'!:ir bills becauSE! they arE! struggling. Day by clay there art! companies going inl:o ' bankruptcy in this Province . And this will amount to another $50,000, :in that . exampl1::o, on that sma11 company. It may IAJE!1l rnean the death of thal. colllp<:~ny. CE!rtainl.v, as a n1:i .nirnurn, i.t lAJ·ill mean l:.he layoff of l:.IAJO persons from that company, VE'ry directly attributed to this tax and th is tax alone.

The Governmen t may choose to ignore that, and they may try to hide behind the Facts. rhe Fact is, that . i ~> what. is goinq No . ~il I~ 3 1i

to ha .ppen. Mr . Chairman, I v..1ill not get into anything else . I will have another opportunity, I am sure. I will stop for now, and we will get back again. I tAJill sit down nou..J and I wi11 u..Jait for the Minister of Social Services to enlighten us IJJit:h his financiaJ. expeJ"tise. I can 1 t. wait. I can 1 t v..1ait for the Minister to get up and tell us. Mr . Chairman, what I am waiting for is for the Minister oF Finance to ansWE!I" us a fE!W questions.

I asked a number of very specific questions to the Minister of Finance, and I u..Jill be IAJai t.ing now to see if he is going to give us some ansu..Jers. IF not, u..Je IAiill gE!t up and we will ask them again. Some Han. Members: Hear, hear! Mr. Chairman: Shall the resolution carry? The han. the ME!mber For St. Mary 1 s -· The Capes. It is amazing, Ml". Chairman, that somebody on the other side did not get up to say a fE!W woJ"ds on this Bi.l.l tJJhich has such broad implications for constituents around the Provin'ce. Maybe some of the rookiE!

ME!Inbers-, li.ke the Member for LaPoile, Bonavista South, Ol" LetAJisporte, mJ.ght not J"ea1ize Lhat you can speak on a Bi11 EWE!n -.if you suppoJ"t it, and quite often the arguments put forth by those v..1ho support bills are the ones that are accepted. You might convince us. If we heard From some people with down-to-earth knowledge of what is happening around the Province, you might be able ·to convince us that some oF the conceJ"ns tAJe have are not J.egitirnate ones. Thet"e ai"E! a number oF concerns with the Bill.

L36 June 8, 1990 Vol XLI Many oF them have bt'en hi~~hLighl:l"d by the FinanCE! cr'i tic, and 1 presume the rest or us are going to agree with what he said . Maybe after one or tlJJo speakers, tAle tAli 11 be satisfied to take a votr;• on t.hP Bill. I satd I think that tniqht be possibJ.e, but dotAJn ci(~'r:~p I do not bl=:!1ievE~ it is.

Because ti"lE!rl:=! is such a g1nave conCE'!I"n about l:.hE• Bill, I p1nesurne tAle lAJanl:. ·l:o ~Jol· . as many answers as posstble and be sure that the Minister 'is not putting ano ·ther but"den on t.lv:- shoulders of the taxpayes out thE!re, which is ac l:.uaJ.ly tAJhcll.. -:is happening in this Bill. Mr. Chatrrnan, the Bi 1.1 itsr:dr: 'is called, 11

An Act To ImpoSE! A ·r ax On Employers For rhe Purpose OF Funding Health And Post-Secondary Education. 11 rhe excUSE! ror bringing in a netJJ tax had LobE! placed on the shoulder s oF someone. Of coui"SE·, thE! M:in.is l.E!r himself, tAJhen he cornrrri.Ll:E'!d no n':;!lAJ taxes in h-is Budget, had t.o cotTtl'' up with some 1..uay of clE!l~·lect.-Lng l'.hE· attention of lhe general publtc.

However, ht' has not succer::•cled Vlo!lny u..Je11, and hE! ts passoi.nq a]onq the blame to Lhe FE:'dE•r'al Cov~:·rntnenl: who, in the transfE•r' payrnc·n L.s, clol .cl not give him enough money to cover all the costs he is facing in health and post -seconddry education.

PE!rhaps lAJhr::•n t.he Minister' g~:-l:s up to speak Lo c·losE! debatE! on thts 8:1.1.1, sornel~itnE :! tn SE!pl:etTibr:,~r, he lAii 11 explain l .. o us exactly hotAJ rnuch rnoney he cl:icl not. receive From Lhe FlC)ci(>al Covr:H 'nn ·lent that hE:! tJJas expecl:in~l to qe l:., and tJJhether or' not it v..1as lr:· ss than last year 1 s atnount in t"elatton l:.o the amount WE! reu>tv~~d on hr::,al.l:h and post-secondary education. He rnight a] so want to E'xpJ.a.i.n l:o us whether the lack of Funding, u..1hich h1:• s<."..ys is Lh!O'I"C:~, hence! the need to introduCE! such a tax, No. Sl R36

whether or not that was a fact:o1n in delaying the decision on the second university we were supposed to hear about early in the spring, then later in the spring. and then long beFore now. Now, WE:1 clo not hear a thing about it. Or is it because they cannot agree where to put it? Because th10:1re t.-~Jas sue h a racket within caucus ovetn the site, th10:1 Minister cannot d~;:1c.i.de whether he should go ahead with the facility or not.

Or is it because the Minister' of EducaU.on ts trying to convince ce1nt.ain denominations that they should co-operate more fully, perhaps close some schools which would open up some more, which would then serve as a post-secondary institution, call it a university, maybe. and that would solve a lot of problems? Maybe these are some of thE! questions the Minister can answc:1r whE:Hl he gets up. Has thts really been instrumental in kec::•ping us fi"Oin g~:>tl:.ing an announcement on the second university? Has it had an effect on the decision to destroy the Grace Hospital?

Is the lack of funding in hE!alth the rE•ason lAJhy we have to destroy what has become an institution in the Province? The tax, itse1f, regard1ess of tJJhy it was brought in or the real r~'!asons behtnd tJJhy it tAJas brought in, is going to have an advetnse effect, particularly on business in the Province. We have a number of small bustnesses tn Newfoundland which are labour intensive. and, of course, the morE! labour intE~nsive you atne the higher the payroll tax is gotng to be, lAJh:lch makes it a vetny unfair tax - a very unfair tax.

If the Minister would do f.Hl analysis or: businesses in l:he Province, he wou1d find that. tJJe have 1nany small busin~;:>sses IJJhich L37 June 8, 1990 Vo l XLI a1ne not labour--intensive, tJJhE!Ine the profits are relatively good. We have businesses l~hat do extremely well, high profits at the end of the year, but ar·e nol:. labour-intensive. Consequently, they will be exc:1rnpt Ft"OITI t:.he payroll tax. If the payroll of the bustness does not exceed $3 00. 000.

U1~;:1 c ornpa ny lAI'oi.1 J. not haVE! to pay the paytnoJ.l tax. 1'1::- the small business is labour intensive or a lol:. of UHc' incomE! taken in by thE· cornpany gor::!S to p a y :L n q s a 1 a r :i e s a n d p u t s t 1·1 (! 111 i n the $300,000-and - above bracket. then that small company ts subject to the payroll tax.

So lAJhat you have is 'l.:lAJO businesses: onE! because:~ ·il:. is labour intE!nsiVE! is bc:'ing h:i.t, C.'t business that is creating a lot of jobs, that is I"E!ally heJping Uw economy of the Plnovi.ncE·. thd l:. :i.s do:l.ng lAJhat the Covet"niTIE!nt :l.s not. doing, and that busim!SS ·is goin~~ to be punished by this Covc:11nnrnE!I1t. And l:he business l:.hal~ might be so set up as to not create a lot of jobs but yet generate a Jot of proFits. thr.d: company escapE•s havtnq l:o p<:ty t·.hE! tax.

The incentive For l:.his ·tax is nol~ to Cl"eate jobs, and that: is lAJhy lAJE' ht:!ar notAl in t.hE! busim!SS tJJOt"1d and. of' cour·se, it:. l:.I"C.'tnscc:'ncls the business world. We are also talking about any group or agency, pracl:.ically, which has d paytnol1 over $300,000. There is an incentive not to have peop l e on your payroll. The more people you hi1ne l~he ~~lneatE!r l:.he salatny boi.ll, of course, and the rnore payroll tax you have to pay. School boards: OnE:' of l..hE• ques t.ions asked l:.hE! Minis l:E!r 1.-~1as hOIAl the Min:i.ster of' EducaUon lAid S goinq l:u gel~ money to school No. ~i 1.

I~ 3 '7

board's to offset l:he payroll tax they must have to pay. That is going to be an extremely interesting thing to watch. As the Minister of Education knows, under The Education Act there are specific guidelin~:>s and agreE:~ments and ever·ything eJ.se in place that complicate passing mom~y to schooJ. boards. And if certain boaJ"cis are going to be given grants in 1ieu, etc., I am not sure IAJhat. E!ff'ect it might have on the overal1 delivery of finances to school boards generally.

School Tax Authorities, on the other hand, as IAJe undE!rstand the r u 1 e s , tJJi 1.1 I:H:> at l•~ as t one subject to the payroll tax, and the Minister has made it quite clE!ar that there IAiilJ bE! no rE!fund to the School Tax Authority or Authorities involved. It states that the amount of the payroll tax is not aJ.l that great. But any amount of funding in education whel"E! taxes- it is a1rE!acly a tax bE:dng taken From the people of l~hE! Province to put right back into the schools.

Then how can one justify taxing JAJhat ·.is rE•ally tax do1lars already and taking it at,o.Jay from the students of the Province? This is not a profit fund from which the tax is taken, it is money that goes directly into the schooJ.s of a specific ar~::'a. And it seE!rns, tJJell il~. is quite cJ.eaJ", as I sai.d, fl"om thE! Minister's remarks already, that thE:~J"e wi:U be no J"~:!fund to thr::• St. John's School rax Authority For the payro11 tax they will pay.

One of the things menti.onE!d in the Ac l: is that the resource sec tor - renet..uabl.E• resourCE!S -·- ernpJ.oyers there, will not have to pay the payroJ.l tax. But i.f one looks carefully a l: the t..uay the A c l: .is IAJOJ"decl, it IAJouJ.cl bE! extremely easy to change. In Fact, you J,o.Jonder, L38 June 8, 1990 Vol XLI if you look at thE! sc~l:up of that sr,~ction of the Act, whE•theJ" or' not it tJJa s intention a 11 y don:~ so t hal: a minor arnendrnE!nl, next ye<.H' or the y•:-ar after, could easily bring the resource ~;ector unclr:'l" thE! payrol1 tax.

And just imagine JAJhat IAJOuld happE!n iF l:hal: is •:wr::!l" done. And that is one of the fE!Cil"S. WheJ"e you gE! l a fool: :Ln l:he door, dolAJI"i th,,! road the door just opens up and all of the diFferent sectoJ"S "in the Province are hit. In fact, if one goes back to when t:he Mi.ni.stei·-· talkt?.d about the pc\YI"o11 i:.ax in the beginning, if you look at the WOJ"ding hE! LISE!d, hE• cloi.cl not SpE!J.J out the fact that the resource sector would not be hit in the future, he just satd l:hE·y lAJou1d not bE! hit. this Yf,!C\r, J,o.Ji.l .. h no commitment at all t:o absolve~ t:hE!rn down the road .

Just picture what would happen the Fishing industry. Fish plant opE:'l"ator's, JAJho aJ"E:' oi.n so rnuch trouble right now in most pa