( Volume 2 PROVINCE OF NEWFOUNDLAND THIRTY-SIXTH GENERAL ASSEMBLY OF NEWFOUNDLAND 2nd Session VERBATIM REPORT Monday, February 26, 1973 SPEAKER: THE HONOURABLE JAMES M. RUSSELL Number 13

February 26, 1973 The House met at 3:00 P.M. Mr. Speaker in the Chair. MR. SPEAKER: Order please! Tape 329 HON. F.D. MOORES(PREMIER): Mr. Speaker, I would like to take this opportunity now, Sir, to make an announcement of some considerable importance to the province and I will start, it is a prepared text and it will be tabled in the House immediately following the announcement. I had hoped that copies would be available by this time for all members of the House but I will carry on with the announcement and hopefully distribute the copies after.

When this government assumed office just over a year ago one of the first responsibilities we took on was to do an inventory of recent heavv industrialization in the province to find out exactly what the condition of each of these major projects was. We quickly realized that some of the heavy industrialized proiects that we inherited were in some instances debatable indeed as far as economic viability wns concerned and others had agreements that were not in the hest interest of the province.

Today I have tvo announcements to make and even thou~h they are somewhat interrelated, I will deal with each separately and sum up the total effect of both announcements at the end of this statement. lam very happy and proud to be able to make these announcements at this time.

JM - l One of the projects initiated by the previous administration which we gave immediate attention to was the oil refinery under construction at Come by Chance.owned by Provincial Building Company Limited, a crown corporation~ but managed by Newfoundland Refining Company.Limited; a subsidiary of Shaheen Natural Resources Incorporation, Limited. During the first months in office a cabinet committee with the Minister of Fin11nce1 Mr. Crosbie; the Minister of Justice, Mr. Hickman, and the Minister without Portfolio, Mr. Marshall.devoted much time to !l 9 8

February 26, 1973 Tape 32fi nscertaining all of the facts with referi?nc.e to that oil refinery project, to studying all atreements entered into in connection therewith and to actinr on behalf of the. gove.:rnnc.nt to ensure: that the project was bein)1 curried out in accordance with nll ap:reencnts entered into.

In the budget delivered Hay 31, 1972,rt c.omplete progress report was p,iven on the Come hy Chance Oil Refinery nnd, for the first time, the public of this province had full inforrn~tion as to the cost of the project, financing then arnmgcd for the project, the additional costs in excess of the original $160,000,000 which had to be met and the nroblems that hn:d arisen in rnnnect.:l.on with that refinery.

The province pointed out then that it appeared likely tiw.t additional amounts of money tmuld have to be arranp:ed for Provinc:.!.n.1 Building Company,Limited in order to meet these additional costs anrl pointed out that the Newfoundland Refining Company,Linited nust arrange this additional financing as part of its obligations under the master agreement. The Government made. its position clear to the Ncwfmmrlland Refining Cornpany1 Limited,in several mectinRS durinF 1972 999 JM ~ 2

February 26, 1973 Tape no. 330 Page l - MRW and that company has arranged an additional $15,000,000 loan for Provincial Building Company,Limited,in accordance with its obligations. In reviewing the situation with regard to the first oil refinery, we felt without any doubt that there was far too much risk financially on the province's behalf for the benefits that the province stood to gain. For this reason, we commenced talks with Mr. Shaheen to see what, if any, changes could be made in the agreement regarding the oil refinery at Come By Chance.

When we assumed office,! would remind this House~the financing of the oil refinery at Come By Chance was as follows: In listing these figures I would use the current valuations that are accurate a.a of the time that we started these negotiations and have been changed because of such things as currency fluctuations etc. that have taken place since the time of the original signing. The E.C.G.D. Loan, Mr. Speaker, as I am sure most people know and as honourable members of this House know, is the Export Credit Guarantee Department of the British Government, at approxi.mately $120,000,000 loaned to the project.

This amount was secured by a first mortgage and guaranteed by provincial crown corporations; namely, Provincial Building Company,Limited and Provincial Refining CompanytLimited. The Canadian Government,for its wharf agreement,has approximately $21,00,000 involved, guaranteed by the provincial crown corporations; namely, Provincial Building Company,Limited and Provincial Refining Company Limited. The Newfoundland Refining Company,Limited; Mr, Shaheen'a company, had $10,000,000 investai as equity.

The Newfoundland Government loan was approximately $30,000,000 and this amount was secured by a second mortgage, for a total cost of $181,000,000. 1000

February 26, 1973 Tape no. 3 c Page 2 Since that time a further $15t000,000 was raised by the Shaheen Companies and also the cost of the wharf has escalated a further $2,000,000 which brings the total present projected cost of the refinery to $198,000,000. This meant in fact thnt the Newfoundland Government,either directly or through its crown corporations,had loaned or guaranteed $188,000,000 of the $198,000,000g Let us be clear hereJ Mr. Speaker, that the Government of Newfoundland had a practical and moral responsibility 1 if not a direct legal responsibi.lity~for this total amount.

In addition to this moral or practical responsibility for this indebtedness, the previous administration had delivered letters to the English Export Credit Guarantee Department (E.C.D.G.) of the British Government, stating that the Government of Newfoundland would be responsible for the repayment of the indebtedness tc E.C.G.D. in the event there would be any difficulty by the crown corporations, The effect of this was that the credit of the province was involved not merely for the sum of $30,000,000 advanced by wav of direct loan but for the amount of $188,000tOOO.

This administration has taken the position that it must observe legal and binding agreements and arranp:eme:nts entered into by the previous administration since to do otherwise would be to undermine completely any faith by any third parties in the binding effect of any agreements entered into with any administration of the Government of Newfoundland. We have observed these arran~em.ents and the other contracting parties~in this particular case Newfoundland Refining Company.Limited and Shaheen Natural Resources Incorporated.have observed the agreements and obligations undertaken by them.

While in opposition,the Progressive Conservative Party thought and expressed the view that the arrangements made by the previous administration, on the oil refinery at Come Ry Chance ;were not satisfactory and in the 1001

February 26, 1973 Tape no. 330 Page 3 best interests of this province because the Government of Newfoundland had entered into a very heavy obligation without sufficient return for the government of the province. This was and still is our view~ Nevertheless, the Government of Newfoundland could not unilaterally or by its own actions force any change in binding agreements entered into by the previous administration. Sometime ago Mr. John Shaheen of Shaheen Natural Resources Incorporated informed me that he had a further proposal to make regarding the Come By Chance Area.

In order to do this, he would need assistance from the province and the co-operation of the province. This has given the government the opportunity not only to negotiate terms and conditions for Mr~ Shaheen's proposal but: also the opportunity to improve the terms and conditions governing the present oil refinery at Come By Chance. This, Mr. Speakert we have done. We, as a government, are fully aware that the name of Mr. Shaheen is one that has been used by both political parties,in recent years~ throughout the province,and while there are those uould would criticize us for entering into any agreement with Mr.

Shaheen, we cannot for this reason alone turn down what we firmly believe to be a good,sound business proposition,and turn our backs on the welfare of this province for mere political reasons. The proposal I run announcing today will demonstrate clearly that we are concerned with the sensible progress of our province and that we are convinced that it would be wrong, morally and

Fehruary 26; 1973 Tape 331 PK~ l economically,to turn away this tremendous opportunity for any political reason at this time~ I cannot stress too clearly at this ti~e 1 that this is not an agreement anything like the original one. It is a sound practical business deal~negotiated in a businesslike manner~for the benefit of our province, I can now announce to the people of this province nnd the members of this honourable House that just over two weeks ago the Minister of Industrial Development, Mr. Doody; the Minister of :Education, Mr.

Ottenheimcr; the Minister of Transportation and Communication~ Doctor Farrelli and myself ~ravelled to the United Kingdom Hhere we had extensive negotiations with Mr. Shaheen and his associates,E.C.G.D. and various bankers. I might also say. Mr~ Speaker, that negotiations had carried on here previously and also that negotiations have carried on here since. All groups,afte.r lengthy negotiations,eventually reached a settlement.

I am ple,ased to say that we have now E,C,G.D. fa assurance that they will approve the buying of the shares of the three crown corporations.by Newfoundland Refinfn~ Company,Limited,and the consequent release of the Newfoundland Government from obligations of some $120 million..

The whttrf agreement. with the Federal Government still hns to he: t.mrked out. hut putting that: to one side for the moment the financial position of the present oil refinery at Come By Chance is as follows: Loans and Guarantees by Shaheen companies namely: Newfoundland Refining Company,Limited# etc. $135 million, which is secured by a first mortgage. Newfoundland Refining CompanyiLim~ted,$10 million in equity. The Newfoundland Government Loan,$30 million,aecured by a second mortage. This means that the companies owned by Newfoundland Refining Company, Limited, Mr.

Shaheents ccmpany, will be liable for loansi guarantees and equity in the amount of some $145 million and the Provincial Government 1003

February 26, 1973 Tape 331 PK - 2 liable for a loan of $30 million only. The wharf agreement still has to be finalized and hopefully it will be handled in a manner similar to the E.C.D~G. loan. However, until such arrangements have been concluded it would be wrong to make assumptions at this time. Negotiations will commence irrnnediately and this honourable House will be informed as to the result. However, once again putting the wharf a~reement to one side the new agreement helps the provincefs credit rating tremendously.

It now should be pointed out very clearly that Newfoundland has no further obligation with respect to the $135 million worth of commitments through the crown corporations. That means from a credit point of view Newfoundland under this a~reement i.s $135 million better off and if the wharf agreement can he amended similarly the Newfoundland Government will be better off to the tune of $158 million. This first annonncement regarding the present refinery at Come By Chance brings this project into attractive perspective as far as the province is concerned.

The project will be run and in the hands of private enterprise. The government will be in its proper role of encouraging development with minimal financial risk~ I will now deal with Mr. Shaheen 1 s second proposal. During the many talks over the months which we had~ other possibilities were discussed regarding future developments at Come By Chance. The future for a petrochemical complex at this time is not bright because of the very depressed condition of the petrochemical industry generally throughout the world.

However, the world energy crisis, especinlly in the United States, has opened up other possibilities for development in our province. One of these I will be mentioning later in this statement. It has been the policy of this government from the beginning that \ our resources should be developed to the fullest. In this regard, deep water, ice-free ports are one of our greatest assets. I can now announce that the Government of Newfoundland has entered into an agreement with the Shaheen interests, Shaheen Natural Resources 10DJ

Fehruary 26 1973 Tape 331 Incorp,m1t,,d,to provide for the establishrnent of a second oil refinery at Come By Chance to be owned by a company knovm as }Jewfmmdland and Labrador Edison Company Limi.ted 1 a suhr.idinry of Shaheen Natural Resources Incorporated. This oil refinery vill be a 3(H),OOO barrels per day refinery producinp. low sulphur fuel products. The crude ntl for this oil refinery will come from the Middle fast: and North Africa. The refined product will be sold largely on. t.hc Eastern Seaboard of the United States. The cost of the entire project is estimated at SJDR,5 million.

This cost includes all constrnction and equipment costs, site preparation costs.customs duties.excise taxes and sales tax costB, all financing costs and ~orking capital. The financing for the project is as follows: The :R:frtish Government thorugh its Export rredit Guarantee Department loan $190 million (in pound sterling: and U.S. D01l,1rs) to he !';ecured hy a first mortga~e. The Government of Newfoundland loan S78.5 million to he secured hy a second mortage. Shaheen Natural 'Resources Incorporated equity position of $40 million.

This means that S230 million will be invested and loaned by sources other than the Newfoundlnnd Government and we will loan $78.5 million. This new refinery will be 1005

February 26, 1973, Tape 332, Pa~e 1 -- anb the largest in Canada by some 100,000 barrels per day and in fact one of the largest oil refineries in the world. It will be the lar~est single project ever on the island part of our province. Before listin~ some of the major terms and conditions, I would now like to submit two sets of figures .. o•ne set beinp; the first refinery before the new agreement and the second set bein~ the two refineries combined as they affect the government of this province.

The second set of figures leave out the amount for the wharf for the ti.me being as far as fiscal responsibility is concerned: The total loan: or guarantee by the Newfoundland Govenunent and its Crown Corporations in the first agreement, HL Speaker, the total loan or ~uarantee by the Government of this Province was $188,000,000. Today for both refineries combined it is $108.5 r.illion> Sl88 million as opposed to $108~5 million. The eouity by the Shaheen Companies in the first refinery is $10~000,000, hath refineries combined is $50,000,000.

Non-guaranteed loans by E.C,h.D. and others - there were no non-guaranteed loans in the first refinery, in the combination of the two refineries there are $325,000,000 being put forward by E.C.G.D. without havin~ the guarantee of the Newfoundland.Government or anv crown corporation. The wharf agreement to be determined is $23 million for both refineries combined, which is a guarantee of the Provincial Government in the first refinery or its crown corporation. The totals, Mro Speaker, for the first refinery is $198t000,000 for both refineries the investment in the Come by Chance Area is nou $506.5 million.

Thia illustrates very clearly that the province now has a position of much less risk tian previously, while at the same time we have four times as large a project as was the initial conception for the oil refinery at Come by Chance. We have in fact some $99.5 million less at risk than was previously the case and we now have oil refineries with a combined capacity of 400,000 barrels per day to be built. The agreement covering the second oil refinery will be brought before the House of Assembly for approval during this present session. 1006

February 26, 1973 Tane 333 IB-1 The carrying out of the arrangement ment:i.oned subject to the Shaheen Organization meeting certain necessary conditions precedentw The new refinery will take some thirty-six months to build. During that thirty-six month period , the peak employment for a con­ siderable portion of that time will be 3,000 men. It is estimated that in excess of $100,000,000 will be spent in Newfoundland during the construction period for the direct cost of local labour, materials and services and local contract work.

It is hoped to commence the construction of the second oil refinery during this present summerw When the refinery is completed the number of people receiving_permanent emnloyment on the payroll of the oil refinery will be 620. The total amount of the payroll with respect to the 620 oermanent employees will be approximately $7,740,000 per year which, Mr. Speaker, as one can see is an average of $12,000 per person on that job.

This, together with the first refinery, means that over 1,000 highly skilled, highly paid people will be employed at the Come By Chance site and these wherever possible will be Newfoundlanders. The principal terms and conditions of this agreement on this new oil refinery to be owned and operated by a privately owned company, NeYfoundland and Labrador Edison Company Limited, while referred to as (Edison) are the following:

(1) It is a condition percedent to the GJvernment advancing any part of the government loan that Newfoundland Refining Company Limited purchase all of the shares of Provincial Building Company Limited and the other crown corporations connected with the first oil refinery with the consent of E.C.G.D. reuuired under the first mortgage and with the consent of the Government of Canada asrequired under the Wharf Agreement so that the project from thenceforth will no longer involve crown corporations of the Government of Newfoundland and relieve the Government of Newfoundland from all legal, financial, business or other responsibility 1007

February 26, 1973 Tape 333 to any person or authority whatsoever in resnect of Provincial Building Company Limited, Provincial Holding Company Limited and Provincial Refining Company Ltmited. In other words, Hr. Speaker, the Government of Newfoundland is to be relieved of anv resnonsibility whatsoever in connection with the indehtness of those crown coroorationR totalling, at present, $188,noo,noo with the excention of the $30,00n,noo advanced rl:!rectJy IB-2 by government loan secured by second mortga~e. The credit of the province will therefore be relieved of indirect obligations totalling some$ 158,000,000.

(2) Edi.son muRt submit evidence sat:isfactorv to theG overnment that Ediimn hns the sum of S40,000,000 U.S. to r.n into the nroiect as a reguired ~quitv.

(3) Edison must suhmtt proof that it has or<tnined nn i rrevocahle commitment for the nrfncinal loan of $190,f!00/100, which would he secured hy a first mortga~e, which would be ohtained from E.c.r..n. or whatever source thev flm1 for that nrjncipnl loan.

(4) That Edi,:;on has contracts for the sale of not less than 6()7, of the annunl nroduc.tion of the refinerv for averar-:e nerlorls of five vears, and that Edison hnR contracts for the purchase of not less than 60! of the crude oil requirements for the 1008

February 26, 1973 Tape Ne, 334 MR. MOORES: operation of the plant for a period of not less than five years.

(5) That the government has the right to appoint independent advisers who shall have confirmed to the government that the project is technically and economically feasible. {6) Edison will require approximately 1,177 acres of unoccupied crown lands at or near Come By Chance and will pay to the government for that land a sum of $1 million. The government will not be granting lands free of churge as in the ori~inal oil refinery agreement~ but is to be paid the sum of $1 million for the land or nearly $1,000 per acre.

(7) Edison is to pay all provincial tuxes, including the social security assessment tax or sales tax wi.th reference to the construction of the project, which will not be, as the first oil refinery was, exempt from the payment of S.S.:'\. tax. The government will therefore receive during the construction period an estimated amount between $12 million and $14 million for provincial S.S.A. tux.

(8) Edison is to pay the full industrial power rate for electrical power and will not receive any subsidized power or rate for power for the projectl any subsidization. If in the future .any other user of electrical power engaged in an industry competitive with Edison was granted any such power rate incentive. then Edison would be entitled then to the snme rate.

(9) Under the original oil re.finery arrangements, Newfoundland Refining Company Limited surrendered its rirht to receive from the Government of Newfoundland, electric power at the subsidized rate of 2.5 mills per kilowatt hour in exchanp,e fer a grant to them of the right to supply the Newfoundland and Labrador Power Commission with all its requirements of oil up to 5,500 harrels of fuel per day. Newfoundland Refining Company Limited has now agreed to surrender this concession so that the Newfoundland and Labrador Power Commission will be under no such obligation in the future. i!J09

February 26, 1973 Tape No. 334 NH - 2 (10} If the Government of Canada agree to the transfer of the shares in the provincial crown corporations to Newfoundland Refining Company Limited and to the use of the wharf at Come By Chance by Edison as well as by these companies and thus to the fact that the Government of Newfoundland will be involved no longer in any obligation in connection with the wharf, then it is Edison's intention to provide an addition to the wharf at a cost of some $10 million which is provided for in the financing outlined previously.

Edison agrees to make the wharf available to any other parties at normal user rates in accordance with terms expressed in the agreement. If the Government of Canada refuse to consent to the transfer of these shares of the crown corporations to Newfoundland Refining Company Limited, so that the Government of Newfoundland has no obligation whatsoever with respect to the wharf, then Edison and the Governm~nt of Newfotmdland will arrange to take over the wharf from the Government of Canada, with payment for the cost of the wharf to be made throu~h user charges paid by Edison.

(11) The government will have the right of inspection on the site at all times, the right to inspect and approve the construction contract and other arrangementst the right to have two directors on the board of directors at Edison and other normal safeguards and protection.

(12) Edison is to be responsible to raise any capital funds required over and above $308.5 million. The first mortgage loan of E.C.G.D. is to be repaid within seven years from the commencement of operation of the refinery with the provincial second mortgage loan of $78.5 million to be repaid over the following eight years or within a maximum period of fifteen years. It will be a condition of the mortgage agreements that if Edison generates a sufficient cash flow in excess of that required to meet the interest and principal repayments required under the mortgages and in excess of certain agreed limits then 1010

February 26, 1973 Tape No. 334 NM - 3 Edison will have to make mandatory prepayments of principal and interest upon both the first and second mortgages. It is thus entirely possible and likely that the second mortgage loan of the Government: of Newfoundland vill be repaid within a period of ten rather than fifteen ye:are:.

(13) The Government of Newfoundland is to receive, in addition to all normal taxes, including sales truces and corporation taxes, two royalties. The first royalty is a royalty of five per cent of the gross profits attributable to the p~oject. In the old agreement~ Mr. Speaker, the five per cent gross prOfit was paid after a twenty­ eight per cent management fee.

In this case it is to be paid after the normal deductions before gross profits~ This royalty of tive per cent of the gross profits is to commence at the time when the first E.C.G.D. mortgage loan is repaid or in the eighth year following commencement of operation of the oil refinery.

However, as I have stated previously, if the E.C.G.D. first mortgage loan is prepaid which is likely prior to the eighth year, then this five per cent royalty commences at that time~ This royalty is to be paid to the Government of Newfoundland in perpetuity~ The second royalty fee ia a fee of five per cent of the net profits attributable to the project, which fee is to be paid commencing upon repayment of the E.C.G.D. loan and repayment of the Newfoundland Government loan. This royalty is to be paid until a total of $10 million has been paid thereunder at which time this royalty ceases.

It is presently calculated that the five per cent royalty of the gross profits will mean ~µproximately $4 million a year in revenue to the province. It has been further calculated that the provincial corporation tax,or the corporation tax that the province derives from the federal income tax, corporation tax, will bring in an additional $11 million per year for a total of $15 million per year of revenue in taxes and royalties. This does not include the income 1011

February 26, 1973. Tape !lo.334 from S. S.

A. during the construction period of some $12 million to $ 14 million which I have mentioned previously nor the land at 11 million which will be bought nor the five per cent of royalties after tax, these are just the figures I mentioned here, $15 million on five per cent of the gross and normal income tax or corporation tax revenue. {14) Edison must, in procuring of materials, equipment NM - 4 and labour and in selecting sub-contractors, give or cause to be given preference, where feasible and economic to do so, to material and equipment originating, manufactured or distributed and serviced in this province and to sub-contractors located in this province and prior opportunity of employment to qualified workmen whose usual places of residence is in this province.

Edison has also agreed that Newfoundland workmen will be trained at the first oil refinery when in operation so that they will be available for the skilled jobs and managerial jobs at the second oil refinery when it goes on stream.

(15) Edison shall pay user' rates fhr water. In other words. there vi.11 not be any government subsidy on water, but rather the water that is supplied will be at a rate that will be profitable to this province.

(16) Edison must comply with all lawst regulations and orders of canada and this province with respect to pollution control facilities. In

summary the English Export Credit Guarantee Department E. C. G.D. jas agreed to the transfer of the shares held by the government in Provincial Building Company Limited, Provincial REfining Company Limited, and Provincial Holding Company Limited to Newfoundland REfining Company Limited and that E. C. G. D. release the Government of Newfoundland from any liability or responsibility to them in connection with the indebtedness and financing of the original agreement. However, it should be pointed out here, that the benefits of the first 1012

Tape !lo, 334 llll - 5 agreement such as royalties, etc. will still be made to the Province of Newfoundland~ Negotiations have comr11enced with the Government of Canada to see if similiar arrangements can be made with respect to the wharf agreement entered into between the C-overnment of Canada and the Provincial Crot.7n Corporations. The: preliminary discussions that have been held do not indicate that this will he a major problem.

I have mentioned previously some of the major advantages of this agreement, include the fact that the Province of Newfoundland is now to be relieved of any responsibility or liability in connection with the indebtedness of the original oil refinery totalling some $158 million. The liability in connection with the second oil refinery will be the amount advanced by way of a direct government loan of $78.5 million to be secured by a second mortgage. These two combined will be very beneficial with respect to the credit rating of this province.

The province will receive $1 million for the land to be conveyed to Edison. The province will be receiving during construction an amount of approximately $12 million to $14 million in provincial S.S.A. tax. 1013

February 26, 1973 Tape 335 The province is, to receive the full industrial rate for power supplied to the oil refinery. The province is relieved of the obligation to purchase oil products for the Newfoundland and Labrador Power Commission from Newfoundland Refining Company Limited.

In the eighth JM - 1 year followin~ the completion of construction, assumin~ the E.C.G.D. mortgage is not prepaid before that time. we estimate that the province will receive from the five per cent royalty on 2ross profits approximatelv $Li million and from the provincial share of cornoration tax,wh:i.ch will start from two to four years depending on what hannens in Ottawa, Mr. S~eaker, approximately Sll million per year.

Construction of the project will employ some 3,000 persons for most of the construction period of thirty-six months. tn short, the government through this agreement has accoMplished a total revamping of the terms of the ori~inal oil refinery agreement at Come by Chance while securing an additional oil refinerv three times as large as the ori~inal under vastly improved terms and conditions. There are a grent many other conditions and points in the agreement that will be dealt with when the necessarv legislation comes before this honourable House. However.

I would like to mention a few major influences that this particular development will have on onr province. First of all it must be pointed out that any heavy industrialized projects or any heavy industrial developments even such as one of this nature, will not be at the cost of rural development priorities that this government has. The rural development authority is still going full speed ahead and rural development will still be the first priority of this ~overnment.

However, it is essential that we take advantage of all our resources and this is an example of one of the resources we have -- deep water,ice-free ports where an industry can be attracted a very much larger industry than had previously located here at much less risk to the province. In other words, we have

February 26, 1973 Taµe 335 now a complex that will produce 400,000 barrels of fue] per day at less risk than the single 100i000 barrel per day refiner/, It has been mentioned previously in the terms of the agreement, but I want to reemphasize and make it very clear at this time that the ecology of the area will be protected.

The highest environ,~ental standards will be required and adhered to~ In the actual permanent job categocy 1 once this stage of the complex has been cornpleted~there will be in excess of 1,000 JM - 2 highly skilled, highly paid employees at Come by Chanc:e,using the normal ratio of four to one in service industries supporting employees who are directly employed. This will mean that some 4,000 people will be directly affected. Once again, using: the normal number of four persons per family, this will mean that the Come by Chance complex will support a town in excess of 16,000 people.

The last point I wish to mention in this statement is one that I referred to earlier and that is the energy crisis in the United States. This is becoming extremely severe and one which is recor,nized throuRhout the world today.

A great many industries in the United States depend on energy for production and are now very concerned about where this energy is goinp._ to come from in the future. w1dle the petrochemical potential for the Come by Chance Area is not bright at the moment it is entirely possible and feasible that industries that depend heavily on energy,if they are now located in areas i;here they may or may not get this energy. are very likely to move to areas where energy is avail2ble.

Come by Chance now has the potential to attract the sort of industry that depends on energy and particularly on fossil fuel for its ensured future operations. I would close once apain by saying to the members of this honourable House that this, Hr. Speaker, is a very proud moment for r:ie. The project announced will have immense benefits for our province. 1!!15

Fehruarv ?h, 1973 Tape 335 lt is ,1 rlt,nl that took a lot of hnrd work. It is a deal which took a lot of rHJttinP toRether anri I would like at this time to thank Mr. Shaheen anrl his cnl.leap.ues for the way in which thev ne.1c;otiated. the British bankers nnd the flritish Govermr:cnt for their co-operation n:n,: confidence in getting the proposal underway and particularlv to mv c:ollengues who were involved in the recent ne);otiations for the tremendous effort thev nut forth. All the cabinet were involved. Hr.

Speaker. hut part:icularlv the Minister of Education, the Minister of Transport, the Minister of Industrial Development. the Minister of Finance and possiblv I have missed one or two others. JM - 3 T would ask for the support of nll members of this hnncrnr.,hle House for this nart"!cular prnposnl. T n.-n most lrnppv today that the people of Newfoundland ui 1 l he the ones who will really henefit. HR. E.~f. _ROBF.RT~(Ll:ADER_()F THE OPPOSITION): Well 1 Mr. Speaker.

T nronnse to r,ak.e only a few very hrief comments on what is a most maior announcement hy the> 'Premier and one which would require a great deal of studv be.:ore a detai.led comment is made. I would,however. like penrission to make a few hrief comments if I may. First of all, Mr. Speaker. let me say quite categorically that my colleagues and I welcome this announcement. He welcome any announce­ ment that will benefit the people of our province and if this one will do that as it anpears it will then of course we shall welcome it and we shall support it.

Having said that let me say that the thought which comes to mv mind on hearing the Premier I s statement, Sir, is that the more thinp,s change the more they are the same. The happiest man in the world today when he hearS this announcement.indeed I would not be surnrised if he have not already heard it, will be mv former leader, the former Premier of this Province t the honourable J. R. Smallwood, because this is Joey Smallwood 1 s rlream come true. This really is Joey 1016

February 26, 1973 Tape 335 Smallwood's dream come true 1 phase one. Mr. Speaker, all that this announcement proves is that the concept of the original Come by Chance deal was right and that the opposition at that time were wrong because if that deal had been stopped then it would have been the Premier of Nova Scotia who had made that announcement today. MR. MURPHY: Hear! Hear! JM - 4 MR. ROBERTS: Now, Mr. Speaker, the Premier was heard in silence and may I ask the same courtesy from the hon. gentleman from St. John's Centre. as he seems to be the only one who has been discourteous over this. Now, Mr.

Speaker, I would also say that this arrangement 1 this deal, this contract, whatever one wishes to call it, obviously will have to be debated in detail. The very fact that it has been entered into by the government shows that the original deal was sound. It shows alao that it is much easier to build when the foundation has been laid. I do not often get the opportunity to pay tribute to Joey Smallwood but this is one time when he deserves full tribute and he shall get it from me and I trust from every member of this House.

The deal itselfi Sir, we will have to negotiate in detail.Six hundrecl ,jobs for $78 million investment, pretty fair. That is by my calculations $1 million a job, no $120,000 a job. The arrangement itself, Sir. is basically the same as the previous one½ The strength of the previous one was - AN HON. MEMBER: (Inaudible). MR. ROBERTS: Of course, it was improved and the one now in effect, Hr, Speaker, was improved substantially over the one originally negotiated. Of course it was and the next deal for the next refinery will be better still and so it should be.

The deal is essentially the same as the previous one, Sir. The strength of the original deal 1017

February 26, 1973 Tape 335 JM - 5 was shown by the fact that the people who put up the money, the E.C.G.D. people or the banks p:uaranteed by the E.C.G.D. people who in turn were guaranteed by the Crown corporations,at least of $120 millicn worth or whatever it was, it was in round figures $120 million. The figure was stated in pounds, sterling, in U.S. dollars and in Canadian dollars. Obviously there is considerable fluctuations in currency. There have been revaluations since then.

The ori~inal deal was sound, Sir, and the proof of that is that is the fact that the people who put up the senior moneyl the British banks, the Kleinwort-Benson Syndicate have now a~reed to take only the security of the deal. only the security of the first mort~aRe of the project as their security. Mr. Sneaker, that is all they had to begin with. The mere fact that the crown cornorations are now being sold with the full blessing apparently of E.C.G,D. merelv confirms, establishes beyonC nny doubt the wisdom and the faith of 1018

February :::t 1 1973, Tape 336, Pagel -- apb Mr. Smallwood and the men who put that deal into effect. A detailed comment, Mr~ Speaker, we will reserve until we see the bill and until we see the arrangements~ I hope there will be no changes from what has been said here~ I would like to add our congratulations to Mr~ Shaheen and his associates. He has been vilified in this House, vilified, slandered, treated in an altogether contemptible and disgusting way •• ~ MJL NEARY: Will the Minister of Finance - MR. ROBERTS: No, we will deal with him later~ Mr~ Shaheen today must be a proud man.

I congratulate the Premier on having the courage and the faith to deal with Mr. Shaheen, I realize it would have been easy not to, it would have been very easy not to. AN HON. MEMBER: It took a strong stomach. MR. ROBERTS: No, it did not take any stomach to deal with Mr. Shaheen, Mr. Shaheen is an honourable gentleman, he is a pretty shrewd promoter, a pretty shrewd bargainer and why not? If he can benefit Newfoundland as he has, then we should deal with him.

I congratulate the Premier on having the vision and the fortitude to do it, it would have been easy I suspect not to deal with him. it would have been very easy to spurn him and cast him aside and listen to the 11nayn sayers we heard before. Mr. Speaker, I do thank the House for alloving me ta make these few comments. The deal, I do not know if it is a good one or a bad one,we will have to analyze that~ I welcome the news and let me again say that I believe that this day, when the news percolates to the south and it will if it has not already, Mr.

Smallwood, Joey Smallwood will be the happiest man in - certainly in Newfoundland and the happiest of all Newfoundlanders, wherever we all are today;, I think he has every reason to be happy and to be proud~ It is easier to follow, Mr. Speaker, as the Premier will find, it is easier to follow in the footsteps of the pioneers who have gone before~ Joey was the pioneer on this one~ Thank you. MR. SPEAKER: Before we continue with the other business I would like 1019

February 26, 1973, Tape 336, Page 2 - apb to welcome all visitors to the galleries today, but particularly I would like to welcome an exchange group of students from the A.P. Lowe Elementary School of Labrador City with their teacher Mr. R.E. Coates, and their host group from Fox Trap with Mrs. Yvonne Thurlow. I especially welcome you here and trust that your visit is most interesting. ORDERS OF THE DAY: MR. NEARY: Mr.

Speaker, I asked the honourable the Acting Premier I think it was on Friday to get me some information regarding an executive jet that took the Premier to Montreal on Friday or Saturday I think it was. I since have found out the information, Mr. Speakert so the honourable Minister of Justice, Acting Premier at the time,need not get the informa.tione I must say, ~r.

Speaker, that I am awfully glad that the Premier is back in his seat today and was able to make that statement because, he had a pretty narrow brush with death, in my opinion. t-.'hen the plane did get down in Bathurst I think it was, one engine was out completely ••• MR. SPEAKER: Order! I think the honourable member is bein~ carried awayt this is a speech and not a auestion. MR. MOORES: the plane. Mr. Speaker. I am only sorry that Mr. Shaheen was not on MR. SPEAKER: Are there any other questions? The honourable member for Labrador South. MR. M.MARTIN: I would like to direct a question to the Premier.

I wonder if he could tell me, regarding the task force from the Premier's Office which visited Coastal Labrador last summer, if he could tell me first of all whether this task force has reported and whether the reports will be taken into consideration in corepiling the estimates for the forth-coming budget? MR. MOORES: Mr. Speaker, I can tell the honourable member for 1020

February 26y 1973, Tape 336, Page 3 -- apb Labrador South, that the report has been filed. I think there were four or five departments involved at the time and certainly the suggestions made by the various departments at that tirne are being taken into consideration for this forth-coming year, yes. On motion, that the House resolve itself into Committee of Supply, Mr~ Speaker, left the Chair. MR. CHAIRMAN: Order! Head XVIII, Supply and Services, carried. Head XX, Community and Social Development $100.00 HON. J.C.CROSBIE (MINISTER OF FINANCE): Mr.

Chairmanf this is a special warrant for one hundred dollars which was required to open a new aubhea.4,Rural Development Authority. October 1972 by M_inute-of-Council, government approved the establishment of an organization to be knotm as the Rural Development Authority. At the same time, ~overn.~ent authorized that $1 million be made available to the authority by opening this new subhead and by transferring funds from savings availahle in other subheads of the Department of Cummunity and Social Development. The two subheads are Rural Development, Subhead 200508 where $500)000 was transferred.

There. was an amount of $1 1 500,000 provided in that subhead by the House last Hay, $500,000 of that was transferred and of course this is Rural Development. Household resettlement, subhead 200608 - $500,000 was transferred from household resettlement. The total amount in the estimates for that this year was approved last May $1,425~000,00. The. honourable the Leader of the Opposition got the wrong figure the other day, the amount in the estimates was $1,425,000.00 - $500,000 of that was transferred to a ne-w Subhead 1 Rural Authority.

Those funds were available because resettlement decelerated in the current financial year and because programular 11Arda" could not be developed at the point of implementation in the present year to use up all the vote under Rural Development. 1021

February 26, 1973, Tape 336, Page 4 -- apb The creation of this Authority is the government's initial step in its programme to encourage development in rural areas. To date $808,000 has been spent, 236 loans have been approved and I believe there ha.a been cmite a bit of publicity about that, the kind of loans. As the House knows~ this has created approximately l,03~ jobs to date.

There are now additional applications which are being evaluated and if the members of the committee want further information the minister responsible, the member for Trinity South and the Minister of Industrial Development,who is on the authority, will be only too glad I am sure to provide that information. ~- W.N.RO~:. Mr. Chairman, I thank the honourable Minister of Finance for his information. What minister is now going to be responsible for any questions? AN HON. MEMBER: Rural Development? MR. W.N.ROWE: The honourable member for Trinity South is what now? Is he Minister without Portfolio at the moment?

AN HON. MEMBER: Minister of Community and Social Development. HR. 11.N.ROWE: Minister of Comm.unity and Social Development, fine. As I say, Mr. Chaim.an, I thank the honourable Minister of Finance for giving us the figures. Earlier announcements had been to the effect that $1 million had been used up under the Rural Development Authority and that they were into their second $1 million. I think I am correct in assuming from what the Minister of Finance had to say that only $800,000 has been spent to date 1 is that correct? MR. DOODY: The honourable member is correct, both honourable members are correct.

The amount that has actually been spent is less that $900,000, the amount that has actually been committed and various loans is slightly over one million and a-half dollars. This money has not actually foupd itF way into the hands of the people who applied for loans for various reasons, unavailability of tractors or sawmill equipment or what have you. The procedure is as I understand it, that after the 1022

February 26i 1973, Tape 336, Page 5 -- apb material is available the invoice for it comes to the department rather than put the money in the hnnds of the applicant himself, so that the invoices for the equipment or what have you that you have 1023

February 26, 1973 Tape no. 337 Pagel - MRW been distributed so the amount of money spent is less than the million dollar mark but the amount of money that is committed is little over one million and a~half. MR. II. N. ROIIE: I thank the honourable minister, Mr~ Chairman. This is the first opportunity that we have had to look at the rural development authority since its inception.

I think it was set up or the Premier announced during a public statement over VOCM some four ir five months ago that it would be set up~ There are one or two questions which naturally arise and I do hope that the minister concerned, whatever minister is going to take responsibility for answering to the committee this afternoon, has some information available. There are, I think, three or four questions on the Orders of the Day in respect of the Rural Development Authority. I hope that the ministers have had their officials dig up some information for the committee today. It is a· very interesting point.

It is a novel approach to the question of rural development. Before 1 I think under the previous administration, the cabinet itself would deal with applications which were made to various departments.

What would happen, of course, if someone applied for a loan or a grant under some programme which was not in existence or under a nonexisting programme, what would happen, of course, is that if it were thought sensible by the officialsf it would gradually find its way to treasury board and to cabinet and the government itself by order-in-council would end up approving of a loan or a guarantee,in the ordinnry case, a guaranteed loan by the government~ I am wonder if the minister concerned would be good enough to table in the House a form copy of the type of agreement which these people enter into?

I would assume that what happens is that they are given a guarantee by the authority,which would be a guarantee by the government, which they can take to the bank and get their money, get their loan from a

February 26, 1973 Tape no~ 337 Page 2 Mr. W. N. Rowe bank or some othCr lending institution. I would like to know uhether the person or company which borrows the money or partnership or firm which borrows the money is required to sign its own name to the notes so that in case the thing goes broke, the government when called upon to meet its guarantee~ it can in turn go back to the owners in order to recoup any losses which the government might have suffered?

This, of course, to us was always a salutary type of thing because it meant that the owner himself was on the hook and no matter how benigning the government might be afterwards, looking at all the circumstances, the owner of the business realized all the way through the piece that he was on the hook and that if the government were called upon to meet its guarantee his own property or the property's assets, in the case of an incorporated company1 would be on the hook and that they could be taken in satisfaction of the government's guarantee, the amount paid out under the government's guarantee~ That is one point.

I wonder if one of the ministers concerned could table the form of agreement which was entered into between the Rural Development Authority and the person concerned or the applicant? Secondly, Mr. Chairman, unfortunately the matter of jobs and how many jobs are made available under such a programme is a matter of opinion and should be scrutinzied by other parties as well as the government itself. The government makes a statement, a thousand jobs have been created by the rural development authority. Fifteen hundred jobs have been created by the rural development authority. That is an easy statement to make.

It may be a little more difficult to substantiate. In fact I would like to see, the committee I am sure, certainly this side of the House and the public at large would like to see a list of the types of jobs which have been created by the rural development authority~ I would like to aee a list of those jobs; how many in the various categories~ 1025

February 26, 1973 Tape no~ 337 Page 3 It is a difficult job but I think it can be supplied by the officials~ We have thousand of officials to find out information for the government, what people presently have jobs now as a result of the rural development authority grantst what they were doing immediately previous to thato I mean, were they unemployed? Were they taken off welfare? Were they taken of unemployment insurance? Have they gone from one job to another?

I think that kind of information ia very pertinent to the committee in deciding whether 1,500 jobs were in fact, on an objective basis not a partisan basis but an objective basis, whether 1,500 jobs were in fact created~ Thirdly* Mr. Chairman, and I think this is an infinitely reasonable request, public money is being used~ Would the minister responsible table in the House a list of recipients of the grants. showing in each case the amount of money that was given to each and every recipient1 Am I incorrect in understanding - these are all grantS 4 Are there loans involved too? MR. DOODY: They are mostly loans.

MR. W.N. ROWE: There are loans. Okay, very good. In that case I would like to see and this committee would like to see I am sure, certainly this side of the House would like to see a list of the loans which have been made to various peoole, into what categories of business each of the recipients would fall. I would imagine most of these are sawmill operators and that type of thing. I would like to see that kind of information, just to see who is getting 1t,Mr. Chairman. I do not think there should be any thought at all about any invasion of privacy.

People have the benefit of publicly guaranteed loans or public grants. They should not be ashamed to have that fact held up to scrutiny and held up to the light of day.These one,two or three, requests that I have made to the minister responsible. One or two spring to mind but I will sit down 1026

February 26, 1973 Tape no. 337 Page: 4 now, Sir, and hopefully the minister will be able to give us that information or certainly undertake to get us that information without any delay. MR. REID: Mr~ Chairman, it was only this morning that l was asked so many questions and at the time I did not have the necessary iriforma tion.

We are getting it ready and it will be tabled here in the House~ We fully intended to get a list of all the people (we certainly had this in mind) to pass around to all the members of the House of Assembly, who received~ how much and what they received it' for I You asked about the. number of people who have been employed. We depend a tremendous lot on the people that we have out in the field. I have travelled around Newfoundland, not as much as I would have liked since becoming minister. but I am going to travel a little more.

I have gone out with the deputy and inspected the various people that we have in the field. I felt very confident that these people were. doing a good job. We visited several Jobs - they already had a loan of money. We visited various places that had applications in I thought that they were doing a marvelous job. It appears now by the dollars that we are spending at the present time, we are going to get a terrific impact from it, because of the number of dollars that we are spending. The people who are getting most of these loans are people who have a very small business. They are employing extra people.

We can only go by the fieldmen and the information that we receive in the communities. We usually check probably with the bank manager or various people, finance people and if we think that they are a half-decent risk or if they have been workers and have proven themselves to a certain extent~ by all means we think that we should help them. Now most of these people have been helped with various equipment that they could not afford before. This equipment, we are protecting iti 1027

February 26, 1973 Tape no. 337 Page 5 Mr, Reid, We have the first mortgage on this equipment. We found out as well that in a great many cases now we were told that a number of people would he employed on various jobs. We have also checked back since these jobs and since we gave these loans and these jobs were supposed to start we checked back and in some cases there were more employed than was stated they were going to employ. Now in some cases there is a possibility that there may not be certain jobs, that there will be employed as many as promised.

We are going 1from now on~ to be checking back vith the various people that we have made these loans to. We are going to make regular checks all over the island and down through Newfoundland~ I have been asked by some of the opposition and by some of our own members here where are we situated? A~e we situated in the right place?

Are our people placed around the island most convenient for the various people to make their loans or to even be familiar with or even get back to headouartern. 'I'ria is something we are looking into at the present time to make sure that we have covered Newfoundland and Labrador and made it as convenient as possible for every person so we can give a loan and help those who are qualified. We will make sure,regardless 1028

February 26, 1973 Tape 338 PK - 1 what district they come. from? I will assure you that I will do my utmost to see that the information that you are looking for we will get it as soon as possible~ MR. NT':ARY: Mr. Chairman 7 if the honourable minister does not have the list I believe the Minister of Industrial Development has a list and before we d:Lscuss these estimates or supplementary supply intelligently Sir, I think we should have a copy of the list. We have to know what we are talking about. So perhaps the honourable Minister of Industrial Development can have it xeroxed and send a copy over to us.

In the meantime, Sir, while I am on my feet and the honourable minister can think about this while I am talking here, there had been rumours flying around, Sir, that a large number of these applications have gone via the route of the ordinncy chartered hanks and have been rejected, have gone to the Industrial Bank and have heen rejected~ tried various other sources including the finance companies and were rejected~ So they detected a little bit of a milch cow here in the Rural Development Authority.

So they came to see the honourable member for Grand Falls when he was minister~ He lashe~ out about $1 million, give away. The Minister of Community and Social DevelOpment, the member for Trinity South.is not quite so generous. He has only lashed out I think $300,000 or $400,000 since he has been there. Sir, I would like to know if this is true? A!l HON. l!EMl!ER: Inaudible~ MR. NEARY: Hold on now. Take it easy. Mr. Chairman, I hope that ve hear of someone taking to the air tomorrow and saying that the heckling is starting from this side, I hope everybody is observing where the heckling is starting from.

So, Sir, I would like for the honourable minister to tell us whether this is true or not, whether people are getting loans who have tried a number of other sources for these loans. I a.~ like my colleague here, the &ember for White Bay South, I would like to know what investigations are carried out before the loan is made, What the terms of the agreement for 1-0 2 9

February 26. 1973 Tape 338 PK - 2 repaying those loans are. There are a lot of unanswered questions abOut this whole mattert Mr. Chairman. But before we proceed any further I think we have to have the list~ MR. DOODY: Mr. Chairman, I am attempting valiantly to answer these questions between the honourable member's speeches. I have a list here which brings us to February 19. I had every intention of making that one available.

I do not know if the honourable member wants this or if he would prefer to wait until the - there have been at least two maybe three meetings since that time in which the board of trustees decide whether or not in their opinion these applications are worthy of being favourably received. Now before I get into that, Mr. Chairman. could you ask please himself to control himself for a few moments? HR. NEARY: Inaudible. MR. DOODY: You will get the list, not only you but the honourable members on the other side of the House will get the list. Everybody is going to get the list* We are going to have lots of lists.

Now first of all the question the honourable member for White Bay South posed as to the various forms which were used, the promisary notes, chattel mortgages and so on, I have asked for some of these to be sent up so that they can be tabled for the examination of the people who are interested in it~ The numbers of jobs that have been created and I will agree that creation is a rather poor word to use, I prefer to leave creation to the Deity and to those people who were in power before. We will get on to try and provide jobs for people out in rural Newfoundland.

I have heard already it has been referred to as the great pork barrel, the give-a-way, the handout - AN HON. MEMBER: Inaudible. HR. DOODY: to refer- Mr. Chairman~ this is a very strange way indeed for people to rural Newfoundland. We have $1.5 million so far committed to helping get the people in rural Newfoundland back again and interested 1030

February 26. 1973 Tape 338 PK - 3 in what goes on in their communities. We have been talkin,G: about the great Tory Party and its love for the cities and the towns and whom do we find condemning this Rural Development Authority, the scheme we have,but the great saviour across the way, the protector of the common man. Now we ~ot a pork barrel. We traded over 1,000 jobs - something leas than $1 1 500 a job.

The honourable member for Bell Island was long enough associated with the Department of Welfare, as it once was~ to know hov much it costs to keep a family fed and clothed and housed during a year in this province of ours* To have taken people off welfare,to have given them jobs, to have taught them some self-respect, some dee.ency and some life that is worth living in this province of ours 1 at !)l,500 ea.ch is not something that I would he willin1; to talk about in terms of handout or pork barrel. I would call it rural development of the very best kind.

I am not interested, Your Honour, I am not interested in their inferences of pork harrelisrn, they know far more about that than we do. They have been in there a great deal longer and they made a great fetish of it for a great many years. I am more concerned with the fact that there were fifty-six jobs created in Bonavista North ( that is the term that is here, it is not mine) thirty-six in Bonavista South. Is that patronage, Your Honour? Bell Island is not mentioned at all.

Now is it possible that the member for Bell Island has not informed his constituents that this great scheme is afoot, that the chances are the people can come here in this building and ask; nrs there some way that I can be assisted to the tune of $10,000o/creating jobs for myself and my family?u Or is he. far more concerned, Your Honour, with lashing out welfare payments on that island? MR. MURPHY: Building supplies is his speciality. HR. NF.ARY I At least they have a clear conscience over there~ 1031

February 26, 1973 Tape 338 PK - 4 MR. DOODY: They do. Yes, indeed they do. We have quite a few districts here which, you know, we will make this information available to the House. MR. ROWE W: Would the honourable minister mind if I asked a question? MR. OOODY~ No, not at all, Sir. MR. ROWE, W.N. What is on the list? Is it a list of the people who received money? Or is it just a list of - 'IR_. DOODY: Hold it. Hold it. MR. _FOWE. \J.ll. Okay. MR. DOODY_· Ry job categories. excuse me.

Job categories, assistance requested. the amount of the loan secured by the five year terms due payable \.Then payments are due. to whom it is passed out. This one is not done hy districts because it was done by these people who are concerned with people. This one is done hy district and in answer to the question hy the honourahle patronage. Now where was I? Yest field officers. T cannot relax ~this is very important to me. I am very fond of rural Newfoundland.

I have not had an opportunity to live there,unfortunately, I believe that these people have as much right to as much chance to live in decency as the people in this area. AN HON. MFMBER: Inaudible. MR. DOODY: I am telling you the facts of life, Sir. if you would just give me a few moments. AN HON. MEMBER: Inaudible. MR. DOODY· That ia right.

Now the field officers, we went through this building here to the various departments <and we received recommendations as to whom we felt or t they felt to be the most interested, capable, dedicated men 1,1e could find to go out into rural Newfoundland and talk to people who ~ad ideas. For too long they have been writing in letters looking for assistance, talking to bureaucrats and what they wanted never did filter down tO their levels because there is no secret, Mr. Chainnan, 1032

February 26J 1973 Tape 338 PK - 5 that there are many people in this province who have a great deal of diffculty in communicating to the higher echelons of the public servants or business people or anybody else who have an advantage in education. Though we have found those people who can go out and talk to people in communities and find out what their ideas are and what they would like to do, how they can be helped and assisted in making-a life for the.~selves, a life of decency and respect. We have done this.

As I eay so far we are very proud and happy to say that we have well over 1,000 of these people now vorking, now proud of themselves. They are in the woods~cutting logs, pulp wood transport, shipbuilding. specialized paper manufacturing, sawmilling, boatbuilding, more sawmilling) food processing, cannery, cooperage, cattle farming, shoe repair, greenhouses. The honourable member is familiar with greenhouses. Many of his friends on Bell Island, Your Honour, have greenhouses. Handicrafts and pottery, sa'Wfflilling, lumber production. MR, NEARY: Who put them there? MR.

DOODY: The people of Newfoundland put them there. Fish processing, sawmillfng~ commerical cleaning, pulp wood harvesting and on it goes. Thank you, Now these are the sort of things, Your Honour, that we were able to communicate with people about and to provide assistance for and to get going. It is quite possible that some of these things might flop, Your Honour. Some of them might collapse and we might lose a $10,000 investment in a person. That is a small price to try to get a person in Newfoundland a decent living and a way of life that we have been used to. MR.

MURPHY: I will buy that~ ~ This is the way we are operating. The honourable minister here who is responsible for the welfare department now can tell you what a difference it is when he can refer people who come in desperation ' to the Rural Development Authority to see if there is a way that they -1033

February 26, 1973 Tape 338 PK - 6 can be assisted  to assist themselves. This is the sort of thing that we have been trying to do. I run not one bit ashamed of it, as a matter of fact the people in this government are very, very proud of it. It wss mentioned a little while ago, Mr. Chairman have they been asked about other sources of finance? Or it was intimiated that they had been turned away from the banks and various financial institutions. That is absolutely correct~ We make it absolutely certain that they have checked with banks and have been turned away. We make certain that they have checked the finance companies and have been 1034

February 26, 1973 Tape 339 IB-! turned away because if there are other sources of financeA available this government is not in cornoetition with banks or Hnanc:e cornoanies. He are interested only in trying to salvage people. As long as t.re are he.re, Your Honour. this, is exactly the course that we are going to take. This information that I have here ,as I say, is a preliminary list that deserves to he checked. I have not had a chance to do so. I willingly table it now.

The honourable minister ho.s a more comprehensive and up to date list which he uill orovide in answer to the questions that were asked by the member~for the honourahle Leader of the Opnosition, I think~ Now, we wi.11 see what tte have in here. There might be some other good surprises. Oh, look at this! Bureaucracv is at vork, Your Honour, promissory notest chattel mortgages. We are gettin~ back to the old svst:em.

Annlicntion for assistance. rural develo'f)ment authorities, resume' of hi.r;torv ~ intended pro1ects, itemized list of project costs, drawing of sketch of nronoseO nroiect~. date when you expect to start, number of peonle who will he helned and emrloved (all to he checked out by field officers) 1 Board of Trustees Recommendation, che.ck request and so on~ I v:ill table all this.

We would he only to happv to answer any more l'HH:!stion;. and if anybody over there feel that this government should not heln the oeonle in rural Newfoundl.arld. well that is their decision but we will have to stick with ours. ~~ ROWE: Mr. Chairman, let us assure the honourable minister nohody is, nobody,especially nobody on this side is interested in not helning the people of rural Newfoundland. I do not kno,;,.r what the honourable minister had in mind~ He got a little carried away there t a l:tttle emotional. It seemed th.at he set un a straw man to knock down.

Everybody, Sir, in this House is interested in helpin~ rural 'Newfoundland. As a matter of fact, the former administration was accused perhnns of going toufar in that direction and perhaps doing some things which might have been ill-advised, not taking enou~h 1035

february 26, 1973 Tape 339 IB-2 orecnution. How many times have I heard members on the other side of the House and members of the general public talking about how the neople of Newfoundland are startinp: to grow accustom-ed to a give..away programme. Nobody {s interested in not helping the oeople of Newfoundland~ Certainly one of the Prime functions of this House of Assembly should he to help the neople stand on their own two feet in various places around this nrovince.

Onc:e that statement is mac:!e - and the honourable minister ~ot quite emotioni:tl about it - once that statement :fs mnde let us not try to drag a red herrin~ across what we are trying to do this afternoon. 1 am :interested only in seeing what is 1;oing on in the Pural Development Authority. To date I have heard three things.

(1) A Rural Development Authority is set uo. (:2) Nearly fifteen hundred new j'obs created, {3) We are into our seconrl million dollars. Now. we would be derelict in our duty, Mr. Chairman, if we did not ask a few ouestions as to how this thing is operating~ who is gettin~ the monev, what kind of securities are the government taking in return for lashing our the monev and a number of other questions as well. How many.by the way, are on the field staff of the Rural Development Authority? Does the honourable minister know? µR.

CHAIRMAN: For the information of the honourable members. it is not the custom of the House to table matters during committee but we will undertake to receive them at the table to be tabled when the speaker is in the chair. HONOURABLE MEMBER: Just trying to he helpful, Mr. Chairman. MR. __ W._.ROWE: A cony, Mr. Chairman, of ~hatever the honourable minister has and is willing to give to us relatihg to the Rural Development Authority~ Now. laying it on the table of the House is not of much use at the moment to members of the~Rouse.

I hoped that perhans copies could he given to us but we can get copies and there will be other opportunities to look at it. It is an interesting 1036

February 26. 1973 Tape 339 rn-3 Held, ~r. Chairman, that we iust vant to J;et snme information on. The honourable minister does not have to r:et un in qwwering voice andwyou know, give us the song and dance. an emotional song nnd dnnce. Who is on the 'Rural Development Authorltv, 1'-'r. Chairman? May 1 ask who is on the 'Rural nevelonment Author-J ty? HR. DOODY: There are three members of the government and three nrivate citizens, individuals. The nnmes: the ?Afn:ister of fisheries, the ~finister of Industrial Development :md the ~inister of Rural Development. The three private citizens are: M:r.

Lloyd Arch:l:hald, Mr. Albert Heade and Nr. Christopher Pratt. t-tr. Evans i.s the chairman or at least he is a fine gentleman~ They all are 1.iving in Rural Newfoundland, Harbour Grace, the head of Bay D'Espoir and St. Mary's Bnv. MIL W. ROWE: Nobody from the West r,oast, is there? WelJ, let me ask this question and I hope the honourable minister does not take lt as an insult on what he is trving to do or anything.

Is there anv intention on the part of the Rural Deve]opment Authority to enlarge the members of the board in order to have some exnertees to advise from all narts of the province! ifobody from Labrador is there? Nobody from the We~t Coast? MR. DOODY: Mr. Chairman, there is no intention on the part of the government to enlarge the members on the board, no. We probablv will enlarge the board by adding people from other sections of the province. As everybody knows, this is a new concept, a new idea and is fulfilled as it goes alon~.

We did think about and worked at getting somebodv from the \.Jest Coast and from Labrador and from Northern Newfoundland but the transportation proble.~s are the thing. We must have meetings once a week to look at these things. The people who are .in these positions are not able to wait around for n long while to get approval or to be told that these things do not fit the standard. !,o, we have to do with uhat we can. So, we have people from Eastern Newfoundland for now.

If a wav can be found to get people from other parts of the 11rovince into these meetings and at the same time keep the thing moving, then we will certai.nlv 1037

February 26, 1973 Tnne. 339 IB-4 do it. ~}ED: I may add. we have field workers all down the coast and they bring their information hack tn the board and they usually renort to headquarters in Corner Brook and Grand Falls and then hack here to St John's, reRular field vorkers out there all the time. t do not want to mislead anvbody on this. These three civilian neople are oaid only their per diem trnvellinv pav and of course, their out of nocket exoenses. They ~et thirtv-five dollars a meeting. I think the standard rate for all these novernment hoards now.

They are nll thirtv-five dollars and fiftv dollars for the chairman. In this case thP chainnan is the minister so he gets~ of course, no stinend. The three members of government,of course,serve for free and the othP.rs - ~--Y~·-FOWE_:. Now, a couple of other questions. I was interested to hear the honour ah le Yin1 ster of Community and Social nevelooment mnke some reference to the fnct that earlier in the nrogramme, I br>Heve.

T may nnt he nuoting him correctly so I hone he wi 11 correct mv mi sannreheni:.ion but he said something to the effect thn.t earlier in the programme the govern~ent discovered that the nuniDers of iohs as renorted hv the recipient of loans or p;rants. often did not measure up or come unto the number nf actual jobs. Is that c.orrect? <:o ahead. I said that what I did notice bv checking back this last monthwas that we had a lot more on certain johs than were antictnated when we started and I did sny then that there is a nossihi 1 i ty we will find some people we gave loans to that mav not have as many.

I did have a feeling when I u·avelle.d the country and especia.llv when I see the timber in the various areas now there is certainly a rreat nossibility th~t we have more people employed than the different business oeople said they were going to employ. I see. So, is there any continuing process wherehv these people reoort on the number of people employed by the various companies? 10;]8

February 26, 1973 Tape 339 rn-s MR. RIED: Mr. Chairman. yes. We have Held men going now back and forth checking regularly to see if they are actually doing the iob and how many people are on the job~ MR. W. ROWE: The Rural Development Authority has not been in operation very long and naturally we ~ould not expect many or any defaults probably by this time.

Can the honourable minister tell me whether there has heen complaintR made by banks or lendinR institutions or anybody concerning which the government might have RUaranteed money or if a loan is made directly to the recipient by the government• by the Pural Development Authority; ls the government havin~ any difficulty in collecting the installments due on these loans up to date? Mr. Chairman, we have not had any complaints from anv banks or any fi~ance companies. Actuallyt our loans are not due back yet. This only started a few months ago and there is no loan due back.

In fact you can get twelve months before you start nayinR back your loan. Unless it is cash that pe give,some working collateral, then immediately after material :is sold we are supposed to get our money back. }fR. FRED ROWE: Mr. Chairman. I hesitate to address a question to the Minister of Economic Develomnent and Industrial Development because of . 1039

January 26, 1973 Tape No. 340 MR. F. ROWE: what kind of an emotional outburst I am likely to get, but in the administration of this Rural Development Authority~ I think we can find a great deal of inequities from one region of the province to the other. This is not necessarily the fault of the authority or the department concerned, to give you an example, there is a great deal of emphasis placed on the whole business of logging and saw mill operations with respect to rural development~, to take one NM - 1 example that I am aware of to quite an extent, the Castor River Basin Area, in St.

Barbe North, and I am sure there are many other provincial districts or parts of districts in exactly the same position, we have a number of experienced loggers in that area and they simply cannot get into the woods to set up private saw mill operations or logging operations because of the concessions to the paper company, Bowaters I think in this case, and probably the same things exists with respect to the other company.

Now I was in conversation with the honourable minister there sometime last year, with ~he view of seeing if we could not have some sort of an exchange of land concessions so that the woods in these areas can be opened to the citizens of these fifteen or twenty communities,for example in the Castor River Basin Area. I wonder if the minister could inform the committee as to whether or not there has been any progress in the negotiations with the paper company in this regard. MR. DOODY: That is a little bit off the topic but I do not mind answering it - AN HON. MEMBER: Inaudible. MR.

DOODY: That is right and very much so. TheRC pe~ple up there were very concerned at the time and they still are. We spent a lot of time negotiating with the company trying to get.a timber 1040

January 26, 1973 Tape No. 340 NM - 2 MR. DOODY: exchange. I think the honourable present Minister of Forestry and Agriculture took it up where I l~ft off. I cannot honestly say that we made any progress with them though. We would get a committment to the extent that if these people come in and see us and renegotiate it, we will talk to them and ~Pe what we can arrange, and then these people 1 your people, will go through the same difficulty and the same rigmarole and back again. It is still, as far as I know lt is still up in the air.

We have been offering them rights in exchange and we have been offering them just about anything to try to get the people in the area you speak of an opportunity to cut saw logs but unfortunately the concession is not ours to give 1 it is by law the property of several paper companies~ We are just hung up on their decision. MR. F.:_ The whole situation is in a complete state of chaos up there at the present time.

The people keep hearing that they are going to supply wood to the linerboard mill and then to the Hawkes Bay thing and then they hear about this rural development by saw mill operations and it is in that context that I appreciate some Minister of the Crown informing the people in the Brig Bay, Plum Point Area and this sort of thing, what is going on in this regard. Another question, Mr. Chairman, has the Minister of Rural Development been asked to submit a list of the field officers throughout the province? I cannot quite rememher. Fine, thank you. MR.

NEARY: Mr~ Chairman, I rose to ask a few innocent questions of the Minister of Conmiunity and Social Development but I brought on an attack from the Minister of Industrial Development that I think needs to be straightened out for the sake of the record. Sir, I have forgotten more about rural development than the honourable minister knows in his little finger~ Since when, Mr. Chairman, did Sir Christopher Pratt become an outport man. He is a corner boy, Sir, and that is all he will ever be. Of course he is living 1-041

January 26, 1973 Tape No. 340 NM - 3 MR. NEARY: down the Riverhead of Sto Mary's but he is a St~ John's man9 Sir, born of a well-to-do fa~ily. The minister can say what he like about the members of the authority but the man is a corner boy and that is it~ So my colleague, the member for White Bay South,was quite justified in asking that question. We got the answer we were looking for, Sir, and this is precisely the kind of thing that we are trying to safeguard against when we are asking these questions of the minister.

Obviously the Minister of Community and Social Development cannot answer the questions so the Minister of Industrial Development is coming to the rescue and attacking us~ We are against rural development. We are against welfare. We are against welfare recipients 1 he says~ Well~ Sir, what I would like to know is how much of this $1.5 million has sifted through to the welfare recipients~ I would venture a bet, Sir, that not one penny of it, not a penny has gotten through to a welfare recipient' despite what the honourable minister says.

Sir, we want to know, believe me this is a new programme, l have nothing against it. If the government want to experiment with $10 million I could not care less if it does any good, if it is going to accomplish what the Minister of Industrial Development says that it should accomplish.

If you come into the Department of Welfare, you are looking for welfare and have a family of five children, the Minister of Social Assistance says, "no boy I cannot give you any more, you have to live on $1500 a year, but go oVer and see the Minister of Community and Social Develop~.ent, he will arrange for you to get a $10,000 loan, go out and start a little industry for yourselL 11 say, that is what the minister implied. AN HON. MEMBER: That is a bit exaggerated. Great I would MR. NEARY: That is not a bi~ exaggerated. That is what the minister said.

Sir, I would llke to know how many of these jobs are permanent 1042

January 26, 1973 Tape No. 340 N!! - 4 MR. NEARY: jobs. I would like to know how many of these jobs vould not have been there this winter anyway~ They would have been because they are seasonal workers. So what is happening, Mr~ Chairman, in a ROOd many cases 1 that all the owner is doing, all the operator is doing is substituting capital that he is getting out of the taxpayers of this province for money that he would have to use himself~ AN HON~ MEMBER: Where did you get this information? MR~ M.URPHYt That is his dirty, vicious lie, that is where he got that. this is despicable, sit down. MR. WM. ROWE: Mr.

Chairman, I am speaking to a Point of Order, if the honourable minister from Malawi will permit? MR. MURPHY: Listen to - MR. WM. ROWE: Mr~ Chairman, is Your Honour going to maintain order in the committee? I rise on a Point of Order, Mr. Chairman, in order to state that in recent days Your Honour has asked that members be allowed to he heard in silence and I ask the same: privilege for my honourable colleague 1 the same privilege which has been extended on innumerable occasions to the other side of the House.

MR. ~HAIRMAN: The Point of Order is well takenf the honourable member for Bell Island has the right to be heard in silence~ MR. MURPHY: To that Point of Order, Sir. may the member stick to the point and not try to lambaste people or anything else, let him stick to the point. We are used to relevant debate in this House. MR. CHAIRMAN: Again, I repeat the ruling, the honourable member has the right to be heard in silence. MR. NEARY: Mr. Chairman, I want the galleries to observe that there is no way that we are going to be provoked on this side of the House to barking back.

We want to get a little dignity restored to this House& 1043

January 26, 1973 Tape No. 340 NM - 5 MR. NEARY: What I was saying, Mr. Chairmant is that a lot cf these operators have detected a milch cow so now they are coming to the rural development authority and they are saying} ngive me $10,000, you would have had to use it In a lot of cases, Sir, they are just employing their sons, not welfare recipients as the honourable minister implied. The. jobs would have been there anyway, Mr. Chairman. These are seasonal workers, the jobs would have been there.

What I am afraid of, Sir, and I have nothing against this rural development programme 1 believe met nothing at all. as a matter of fact'/ I could teach some of the crowd on that side a few things about rural development, Come over on Bell Island and look at the green houses. The honourable minister saw the green houses ue built and the honourable minister saw the mushrooms - AN HON. MEMBER: I was down in the mine. MR. NEARY: Even though the people would not let him go down in his own mine, but I authorized him to go down and look at the mushrooms, Sir~ We have our green houses ove:r there.

Three r,reen houses last year produced over nine tons of tomatoes .. This year there will be five or six green houses in operation that will produce ribout 15,000 pounds of tomatoes, Sir, which is a fair contribution to the economy in this part of the province~ We have done a few other things over there. We have developed, not with a.'ly help from any rural authority, under the LIP programme we have developed some tourist attractions over there and we are doing other work, put in some infrastructure and so forth.

The honourable minister knows this because he was over in the October and March elections trying to defeat me. He did his best. He did not get very far~ Sir. The. honourable Minister of Provincial Affairs was oveL I darehim to go back to Bell Island today. They are gunning for him over there .. 1044

January 26, 1973 Tape No. 340 NM - 6 MR. CHAIRMAN: I think the honourable member is being carried a little bit away from the point here now. MR. NEARY: Yes I agree, Mr. Chairman, but what I nm saying is this, that I run all for a rural development authority providing that the money gets through to the proper people a..'"ld is not just for political patronage and is not used by any member of the government side of the House for their own gains. AN. HON. MEMBER: What do you mean by that, now finish that statetl:'V!nt. MR. NRA.RY: If,I said, it is used in the proper way 1045

February 26, 1973 Tape 341 and it gets through to the proper people and not used by any member of the House for political patronage or for his 01'<'11 gains. MIL DOODY: Are. you inferring anything? MR. NEARY~ No, M:r. Chairman, I am not inferring but if there is anybody over there that the hat fits,they can wear it, Sir~ So this is all ue are concerned about, Sir. We want to make sure that it JM - l does not develop into a racket. l would like to know where the minister is getting the information on these jobs, Sir. Is he accepting the word of these field staff?

Is he feeding the information to the Premier and then the Premier is feeding it out, this propaganda) via Information Newfoundland? These are the questions we want answered, Sir, and I would like for the minister to get up and clarify sone of these points that I have raised. MR. REID: Mr. Chairman, if he ever sits down I might.

The point is it is all right to try to impress the gallery_, his own words he used there first when he started. try to impress the gallery or someone else about the equipment and the money that we were spenrling and how we were spending it on various equipment which these people would have still already operated.

A lot of our people throup:hout Newfoundland this year would have never had their mills workinµ_ nnd would have never been in the woods this year because these were mills who could not afford to operate any longer;a few years ago,and a lot of these mills now are back operating and they wanted a few dollars, a thousand dollars. two thousand, up to ten thousand dollars and these people this year would never be able to employ these people only for those dollars that we had available. Hhat is wrong if a man goes in the woods and takes his son if he is on welfare or if he is on unemployment?

What is wrong with it if we help to build a mill and he can survive and keep on going years longer? What is wrong if we do invest some money in a plane or a better saw or a better mill 1046

February 26, 1973 Tape 341 JM - 2 and he employs seven or eight or nine? That man is goinR to be existing the next ten, fifteen or twenty years because of the help that we gave him. This is what we are doing. I am not afraid to stand up here. I am not ashamed of one application that went through. While I was sitting there at the meetings I was never ashamed and I will assure you that the people who were sitting there we did not know who they were in a great many cases and we had to go by the information that we received.

We did investigate and for sure the minister or deputy minister or any of our people can never go all over Newfoundland and visit all the applications so we have to have so much faith in the people that are in the field. These people in the field were already employed, ninety per cent of them;before ever we came in power. ~ow I would not doubt but ninety per cent of these people were good, strong liberals before we got here.

I would not be a bit surprised over that but I will assure you when the applications are going through the House,l am not concerned whether they are Liberal~ N.D.P., Independent or what have you. I would just as soon sit on that board and look at a number, everyone coming as a number would be quite sufficient to me and I think all of us sitting on that board feel that way. Now if there is any better way, a more honest way to do it, well by,all means we will have to get our man from Bell Island to do it. That is all I know. Before I sit, Mr.

Chairman, I had all the information here this afternoon that I could give. The minister here was more familiar with this before I started. I wanted to keep this information because I do not have copies for everyone. I will give them every copy that we have 1 every member of the House of Assembly and I will assure you before I sit down that every member over there make sure they get the applications in to us. Do not blame us if they do not get the 1047

February 26, 1973 Tape 341 J!! - 3 number of applications through in their districts. Soma of these districts have the highest, remember that too and I will assure you while I sit here or on the other chair,! will certainly make sure that those applications go throu~h and it will not be because of political reasons either. MR. WINSOR: Mr. Chairmant I believe: what the hon. minister has just said. I believe he has a sine.ere desire to help the less fortunate people in this province to obtain employmcnt,nnd to brinv in nartisan politics I think is stooping a little low.

He arc. all concerned and interested - AN Hml". MEMBER: (Inaudible). MR. WINSOR: Well~ it is being done and to thP detriment I thin!: of the people who a.re involved because if John Jones out in Tinhul·tu wants a loan of $10,000 to start some small inCustrv - AN HON. ME!!BER :. Is he a Newfound~and? MR. WINSOR: Ahsolutely he is a "1cwfoundland and would snv a nan who is deserving of it or a man who is in need of it, ut if thnt mo.n is going to have to undergo the shame of being labeled as a Torv or a P.C. or N.D.P. or a Liberal or whatever we may have~it is not roing to help him. It is going to embarrass him.

Sr> I think the programme should work out fairly Yell once the hon, minister gets his feet on the ground and can carry out the programme at least satisfactory to hiM. But I was a bit surprised in the hon. Hinster,across the way there,of Industrial Development tryini:; to impress upon the House that we on this side of the House were against rural development. That is not so. I do not know whether the hon. minister intended to leave that impression but certainly it left the impression with me that we here were against rural development and we are not. He are all

February 26, 1973 Tape 341 in favour of anythini that is going to improve the standard of living to many people of this province. Now, Sir, having said that I would like to ask the hon. minister or ministers, whichever chooses to answer the question: What are the rules and regulations laid down for a person to qualify for such a loan? I heard where one man had to mortgage his house before the bank or the rural development would approve of that loan. Would the minister confirm whether that is true or not? Just before the minister rises now, what are the requirements for a loan?

Does the applicant have to be in business or was he in business or is he trying to start a new business and does it apply to contractor to cut wood for the Price Pulp and Paper Mill or the Bowaters Mill? Those are the sort of things I would like to ~et answered. Where are your field officers located? I think that is bein~ tabled. If it is tabled,we will ~et it in due course. But, Sir, there are a lot of unanswered questions yet and perhaps the minister might take a little time and go over the whole programme and give us an explanation of just what is involved.

Is he carrying out a publicity propaganda more or less or feeding the information to the public so that they will know who to contact, where to apply and what, if any, answers or requirements are necessary if he has to go to the bank or if he has to ~o to the mortgage company? Those are things that I would like to see answered to my satisfaction. Perhaps the minister - AN HON. MEMBER: (Inaudible). MR. WINSOR: Well, it is the member's job but a minister of the crown, you know you have a great publicity department down there now and you should feed out the information not the member.

The member will always be at the focus point because people have a way of always coming to their member whichever side of the House he may be on. But does the minister have an information bureau set up so that the public will 1049 JM - 4

February 26, 1973 JM - 5 know what is going on, how to apply and what is involved. MR. REID: Mr. Chairman, in answer to the member for Fogo, I know. not since I sat on the board was there anyone turned down because of not proper bank (What was it you said?) MRw llINSOR: He had to nortgagc his house. MR. REID: Mortgage his house, that is r:irtht. No I have not seen one application since I have been there.

If a man never had a dollar in the bank if a man has proven himself, tried to stay off welfare and sometimes iot on welfare this man throuRh the years have proven himself to a certain extent, we have had our field men go in to the community. check with him, discuss it with the different business people or probably his clergyman 1050

February 26, 1973 Tape 342 PK - l or some prominent people there. They brought the information in~ They must also have certain areas where they can operate 1what they are looking for,money for mills, for cannery, for carpenter shop or something like that. Well most of these people have something. We have helped people who are sick, who got down and out and sick and were good working people before~ We have helped these people. They knew where they could go and get probably some machinery. Now we will purchase the machinery, they do not purchase the machinery. We will mortgage the machinery.

Then they will go in and get machinery and put it together and then they will start their mill. We have also helped people who were cutting pulp wood and logs~ We are helping these people. Probably a power saw, probably a J-5 or some other piece. of equipment. We have helped cannery fellows trying to get ahead, want a few more dollars to employ seven, eight or nine people. We have helped carpenter shops and different things that were just rhyn,ed there new. In fact I have a list here, I can give you a list. We are going to pass overs list to you.

I think the honourable Minister of Industrial Development went over a lot of that. You do not have to have money but you must be a bit ambitious and improve yourself to a certain extent, I would say. MR. WINSOR: In substance what you are saying is that a man does not have to have security as long as he is proven energetic, a hardworking man and interested in getting ahead. He does not have to have any security. MR. REID: That is right. MR DOODY: Excuse me, I do not want to prolong this but you mentioned the standard which was used in deciding whether or not a loan would be approved or not.

The ministerts statement about the person being the main criterion, but also one of the things we do not do in assisting them,and this should be made public too, that we do not get involve~ in loans for additions or extensions or building of grocery stores or dry good stores or this sort of thing which would be in competition with some other business in the community or in the series of communitiea~ . 1051.

February 26, 1973 'l'ape 342 PK - 2 We try as much as possible to talk in terms of rural development, sawmills, boatbuilding, handicrafts and this sort of thing - farming to a. lesser extent because there is a farm loan board.

There is a grey area in between there somewhere that is pretty hard sometimes to make a distinction and to this extent, you know, we are open to suggestions to help, anything that can be done to make this Rural Development Authority actually to be of assistance to the people in Newfoundland as the prime and most important factor that we have ~oing for us~ MR, GILLETT: Mr~ Chairman 1 hefore the motion is put. I think I would like to speak very briefly on this as well. I think the rural development is a good institution and I commend the government for setting it up.

I do think that we are not naive enour,h to think that it ~ill not be taken advantage of because it will. There awe cases I know and I have lived in rural Newfoundland all my life, there are cases where you do have energetic men and men who might possibly be able to make a go of something if they had some financial assistance as well as managerial assistance and advice of one kind or another½ I do not agree with the theory that it should emanate and come from the member for the district.

Therein I think wouldt not a partisan approach perhaps, but there could be a considerable amount of jealously~ Now I would not say that if a member knows of some person who is interested in something and would like to start this something, I think it is his Outy to mention to this man that there is a possibility that he might get assistance and that he should apply for it. But I think the advertising of this development should come from the government. Again I say I commend the government for it.

I think you do find these isolated cases. sometimes I am a hit skeptical when the local bank turned a man down. the finance company turned him down and he comes to say to me person.ally, I always say,"look,I &"n not in that business because usually the bank or the finance companies, the finance companies in particular, they 1052

February 26, 1973 Tape 342 PK - 3 do a pretty thorough investigation.M It could be a prejudice reply they get from their investigation, nevertheless I think that type of a person is the type of person that you must try and assist in a different way if you can but not to help him in his possible dishonesty. I know that too. Pure dishonesty, these cases you will have, there is no doubt about it. And as the honourable minister has said, if it does cost a few thousand dollars , if the government have to pay that to learn 1why we just have to accept it.

I know that in the cases of sawmills we have several small sawmills for instance in my area, in my district. But what we need actually is a larger one or they need assistance~ But I would like to get back to the question that has been raised by myihonourable ,friend from St. Barbe North, +hat is the concessions that have been given to the paper mills in years gone by. These lands are tied up. They are not doing anybody any good.

I think that in some way this government should try and persuade the paper companies to either relax their hold on these timber areas for a while, for x-number of years, if they are willing to exchange. But I felt that I should get into this debate for a few moments because I do come from a rural area. I know what men are faced with. good men who need a little assistance and I can only, as I say,commend the government,

whereas at the snme time I think that they have to be very cautious. I a.~ referring now to the deliberations by my friend here and colleague,the member for White Bay South~ The form.er administration have been accused and I think rightly so,to a degree,for making handouts too easy to come by. This I think is something that this administration, any administration which follows it, is going to have to watch very carefully. If we are going to have to make Newfoundland what we want it to be, we have to try and help people~as it has already been said here, to help themselves.

So I think, Mr~ Chairman, this is a very commendable development that the government have set up and I look forward to seeing it work 1053

February 26, 1973 Tape 342 PK - 4 all over the province and naturally and particularly in my district. MR~ REID: Mr. Chairman, I would like to say that 1 agree there with the member for Fogo stating, certainly the government should certainly get it across to the public. Right now we are certainly willing to get it across* The point is the department is only barely getting set up right now, getting finalized.

In fact the deputy minister today was with the CBC, I am suppose to go on television probably sometime the latter part of the week or next week in order to get the message across as much as possi~le and we are going to use the papers as much as possible. In the meantime, we are certainly going to have to depend on the different members all here in the House to get it across to the general public. MR.

AYLWARD: Before this item carries, I do not want again to prolong the debate, hut I do represent a rural district and I think the point mentioned by the honourable member for Fogo is a very, very good point that is that the people who are interested in this type of application be made aware of all the facts and that I do not know probably hov best to go about it, Even if a brochure of some type were prepared and sufficient copies made availahle to interested parties so they would know exactly what is covered and what is not, I think it should be a clear and concise statement of who would be likely to receive favourable consideration if an application were made.

Certainly this brochure could outline in general terms at least the type of industry that had some hope of obtaining a loan. I feel myself that this government 1054

February 26, 1973, Tape 343t Page l -- apb came to pouer on a com.m:ttmcmt to do somethinrr f:or the rurnl areas of Newfoundland. This appears to me to be one of the hest steps that this government has taken since it took office. I am very pleased myself to see the honourable r:1cr,ber for Trinity South ,Minister of Rural Development. I think in that honourable member we have a man who himself has been very successful in business and he. should have some practical knowledp;e of the difficulties which the ordinary Newfoundlander encounters when he is trying to promote a business venture.

This honourable gentleman has practical experience which should be of great benefit to the government and to the authority who is administerin~ this particular aspect of rural development. Hr.Ghainnan, in Newfoundland we have,to date, a large number of individuals who I feel 1 if financial assistance were made available to them could certainly hring employment into their areas and also provide probably a good basic business for themselves.

I think that today with all the red tape of government and all the reouirements that people have to comply with,with different authorities and commissions and eve.rythin? else, that the small businessman in Newfoundland needs probably some help in the field of expert advice on what difficulties he can expect to encounter. I would like to see this authority provide some type of advice and direction to people making application for loans in this direction as well. Av.ain I do not want to prolong it, 1 would like to compliment the ciinister himself.

I hope that it will not be relegated to just a question of what political stripe an applicant has, his loan should never depend upon that~ I feel that with the board that has been mentioned and with the constitution of that authority, we can look for some great growth in that field~ MR. G.H.WILSON: 't-'fr. Chairman, r t-rould like to rise to speak on this because, looking around the House over heref probably the honourable members may figure that I am on the sinners' bench because I happen to 1055

February 26, 1973, Tape 343, Page 2 - apb be the only lumberdealer probably here among you in the government. I support this to the fullest.

I have no intention of lookinp. for anything out of rural development, I do not want anything out of rural development and I never did~ I will tell honourable members that 1 am interested in rural development for my district~ I can assure you now, right here in this honourable House,if l had had approved rural development this winter in my district and others as well, there would have been great achievement~ In my district last winter if you wanted to get out on the road to buy a stick to make a prong handle you could not get it. 1 can assure you in my area, with the rural development there is a quarter of a million feet of lumber cut this year.

I can assure you right here and now that there are men in my district:iwho have been on welfare for years, out in the ~oods cutting timber this winter. I am sure that if rural development has done nothing else but get people out and get them off welfare and put them into a standard of life and give them their independencetthey are after doing something. Therefore, I have great pleasure in standing up for this government and what they have done for rural development.

It is only for the party concerned whether he belongs on the opposite side of the House or on this side, to seek for it, get into it and try to do something, not critcize the ones who are trying to do something, get out and do something themselves. I can assure you, if the honourable member for Bell Island was so anxious to sell his scrap iron~he would have had it sold before the steel mill was closed. MR. F.B.ROWE: Mr. Chaim.an, in reading one of the daily newspapers I came across an

article on rural development, a press conference supposedly held in Montreal in which there is a quote from the honourable the Premie:L It says; 11 We have spent some $2 mill~on to. create these 1,500 jobs and we will be lucky to even get half that 1056

February 26, 1973, Tape 343, Page 3 -- apb back.a Now, Sir, I think this is a serious error in _1udgement on the Premier 1 s part here. The previous administration was often accused of give-away programmes, handing out loans to various sectors of our province with no intention of ever collecting these loans back~ the payments back on these loans.

What I am really concerned about here is that we are going to have almost one hundred percent of the people who received these loans reneginft on the payinf! hack of these loans,sirnply because there is an admission on the part of the Premier 1 at this point in the game,that they will be lucky to get half of this back. Now if this is a misunderstanding on my part,I would like it clarified, because if I have a misunderstanding, I am sure that many people in Newfoundland have the same misunderstanding.

The impression that I get is that these are loans, we do not expect to recover half of them so we are going to have the hun<lred percent reneging. l would like to have some explanation if I could, Mr.Chairman. Nil. BARRY! I read the same

article and the impression that I got and the understanding that I have is that the government would be lucky if when you speak of getting hack~ in terms of gettinr, back in jobs or getting back in revenue, if it cost say twice as much per job or in fact if you look at it in terms of other projects,if it costs five times as much l)Cr job or ten times as much per job, it might still be worthwhile. l do not know where the break-even point is, Mr.Chairman, but I think that this Rural Development Authority, this idea is one well worth giving a try.

I am not speaking as a member of the government, I was not a member of the government when the project was conceived and I cannot say and I do not know if anybody can say what the end result is going to he. It is a new concept and the immediate results look very good. Only time will tell how many permanent jobs will remain. I am prepared to say that for the expenditure of, it is a lot of money in 105'7

February 26, 1973, Tnpe 343, Page 4 - apb one sense but comparative and relative to other areas where rove.rrn:nent money has to be spent, this is really a minor investment with a very great potential for beneficial returns to the province. On this basis, when you look at the potential for rural Newfoundland~ I think that this project is one that deserves a chance, one that can be monitored and should be monitored as it proceeds, but to date all I can say is that everything that I have seen about this is good. Mr.

Chairman, I was concerned about whether the impression left with the recipients of the goods to be received from the Rural Development Authority are left with the impression that in half of the cases or in fifty percent of the cases, the govern,~ent do not expect to recover back the payment of the loans, In other words, what the honourable minister is saying is that this sounds very much like something that we have heard before with a little bit of a change; rural development or periah. No, no. This impression may have come up again today with some when the question was asked whether there was any security.

It was tied in with the previous question as to whether there was a mortgage on somebody 1 s house. From the documents that have been tabled here today, as I understand it, collateral mortgages are obtained on the equipment that is involved and there are promissory notes of payinr from the applicants 1058

Vebruary 26~ 1973 Tn:ne 344 rn-1 Now. these ,1re enforceable legal documents and you know, it is rid1culous to sav that the pnvernment is proceeding on the basis that the loans are n0t intencled ro he paid. HAPTIN: I have n few very hrief words to say on this~ I do not think that we shoul<l he.grudge the time that we spend here this afternoon in debating this particular tonic. Perhans outside of some irrelevant material that has heen introduced, it has been 11 worthwhile discussion. I do not envv the honourable minister his job in having to c:ontatn this department and I snv 1 ·contain' quite deliherately.

The­ remarks that I have to make I think are relevant to everv memher rd ttinr here torlay hecause whether vnu know it or nott Sir, l think you know what is happeninv downstairs in vou department ,hecause 1 mentioned tt hriefly the other d.<'!y in private. I think the rest nf the honournhle members here nresent should also know.

It dne5 not iust ariolv to this dep;;rtment but this department in particular hecause f:irnt of all~ as tJe have heard from mv colleagues here on this stde,as thev have pointed out the inherent dangers in this kind of a prop:rarrnie, vou have Potentially the department with the greatest potential, 1 think, in the whole government. I commend the government for having set up the Rural Develonment Authority. I think it is a very good piece of machinerv, notentiully. What is happening and maybe it is only a by-product of restructuring 1 is that morak in thiri department in particular has slirined verv hadlv.

Now civil servants nre hv nature I suppose empire huilders and I know that in that denartment from the earliest days they were empire building~ I was not employed down there at ane point. I think we are seeing to many of the people in the top levels of the civil service in that deoartment bringinr personalities into it too much. Hha.t ue are seeing is a lot of the very izood aspects of the Rural Development Authority being left hv the wayside. I would jur;t like to introduce that, Sir,because if we n:re going to debate spending in a de?artment such as yours, I do not think 1059

Fehruary 26,1973 Tane 344 IB-2 the snending should be left too much to rieonle in the civil service who want to further their own ends. MR. W. FOWE; }tr~ Chat rman, I tdll he very brief. I do not think that I join with the sentiments of the member for Labntdor South. I do not think any time spent on this imnortan t tnni c can be considered wasted hy this honourable House nnd I do not r,av rinv attention whatsoever to memherR yelling out"carried ;' tarriedu and thev themselves do not have any contdbut:.i.on to make to this debate.

T know that the honourable Minister of Community and Social Develonment i.s exceedinglv well intentioned and s1.ncere nhout what he is trv1n~ to do down there. I have. heard thi.s from a wtrietv of sources and J clr;tw that cnnclnsfon from his remarks in the Hrmsc,in the committee today. I would however, Sir, P!up,nest to him that he not resent nny criticism from this side of the House on the- progra..'11me. It is a new r,rogram."!'le, one whfch mny fall or sink or swim as time goes on.

It is a new tyne of venture, not a nev concent really hut a new organization. a neu sort of formal aoproach to the idea of heJping Pural Newfoundlanders: develope their o¼-n res:<mrces. He should not resent anv coftlments t,:hich we might hnve to make hy wav of constructive or destructive criticism for that mntter. 'low, T have one or um cormnents that l would like to make and I do not want rmswers on them nov. I merc:Jy _give the minister notice that uhen thf> main estimates nre debated in the House ve nil) talk about these matters a little hit more.

I hope hy that t:fme he -will be in a nosition to µive 1;ome further assurances and reassurances to the House on the matte.rs. For exEl.mnle, the number of _iobs t notice in this heading here on the niece of paper whd.ch I have had a look at for the first time this aftcrnonn, netJ jobs created or ass:tsted. 1 would aonreciate it if when the ma:1.n estimates come before the House in a month or two from nm•• r-erhans, if the minister could give us some further breakdown on that as to how many jobs, for example, in each of the various industries or firms or persons which have heen helped by the 10 6 iJ

February 26, 1973 Tape 344 IB-3 Rural Developemnt .Authority, how many jobs have heen created or assisted in resoect of each. Perhans he c:m even go further and p;et hfs officals to te11 us how mnny people have come off welfare or relief or short-term social assistnncc as a direct result of the innovation of this programme. It would be interestin!! information for the House to have and good information for the government as a whole to have~ So, I would anrirednte it :i.f the honourable minister were to have his officals Oig into that aspect of it a little more.

On the question of field staff, I notice that in looking at this document for the first time this afternoon, I notice thnt contrary to an impression which I received when the Premier first announced this several months ngo • 1 notice that the field staff, hy And large are the old field staff forthe nenrirtment r,f Community and Social Development. There may be one or two additions to it but I do not think.

There mav not be even any enlargement of the field staff which existed in the nenartment of Community and Sodal Develor,ment when I had the honour to he the minister there, although the very distinct imprei:;sion 1 received from the Premier's announcement was that there was rcd.nr, to be a great widening and decentral:izat:irm of the fi.eld sen.rices ::wt:fvities in the dennrtment. That is the impression that I rcceivedJwithout having the statement of the Premier in front of me. Nov 1 I noti.ce ;:;lso, Mr.

Chairman, that there are ten industrial development offi.cers of the Rural Development Authority and three of the field services division which are thirteen. I heHeve that 1 have counted it correctlv. This seems to me to be a verv small numher of field officers. We had that same feeling when I was the Minister of Community and Social Development, that -we did not hnve enough field officers to take care of existing programmes. With the nosition now of the neY Pural Development Authority, it seems to me that a great deal more field workers are necessary , around this 1061

Fehruary 26, 1973 Tane 344 IE-4 province.

I know what a difftcu1t situation it is for fortv-two members to adequatelv renresent their district in this and other problems which might nri.se hut for thirteen field officers to hor,e to adeountelv deal with Nevfoundl.nnd and LabruGor, it seems to me to he stretchfnr: the t'ounds of possih:f lity comn1 etelv nnd T thi.nk that the honnurahle mln1 ster would be well-advised to increase the field staff. l hopP that when the main estimates come thrnt.wh the House we will see a signi fie.ant increase in the mnnher of field staff in the Province of Newfoundlanri and Labrador.

T also notice, Sir, from looking at this list what I would consider to he an undue centralization of the ncttv"ities of the Held staff esnec:inllv in respect of the Pura1 Deve]rq,ment Authority where vou will get snwmi 11 onerntors in vnrtous fairlv remote communities of the nrnvince. I notice three are stationed in r.an0er 1 one in Clarenville. one in St. Catherine I s,. four in Corner Brook nnd then we have St. Anthony, Grand nnnk nnd in Marystown aPd Ln Scie and rrand Falls.

I woulrl J :fke to see some of thes0 that tn:e no'ts• stationed in these larger areas, C:ander and Corner Rronk. ncrhans if they were to he resident in other ref!inns of the rirnvince it mi.r_ht serve a useful purnose. I throw that out fnr the hnnournh1e niniF<ters c~nsidcration.

Perhaos if greater numbers of field workers werP to t'e rPtd.dtmt in the various areas, Rllmll cnmn,,ct :i:re,1.s which thev h:ivP to den1 vi th, perhaps desip.ned alonr> the lines of a new redtsrrihution of electoral districts, thRt mip.;ht be helnful fron the natnt of view of neonle who are goinp; to re,ceive benefits under this programme. I also notice,as I mentjone<l earlier, and the honourable memher for Lahrador South is painfully aware of this, I notice that there is apparently no field worker on the Coast of Labrador, on that verv long coast.

The nepartn.ent of Community and Social Development used to avail of the services of various field workers of the Department of Labrador Affairs. 1062

February 26, 1973 Tape 344 IB-5 Now, with the phasing out of that department i do not know what the. field workers are going to be doing • Perhaps they are going to be joining other deµartments but perhaps the honourable minister should give a great deal of consideration to havinR actual resident field workers, two or three or four on the Coast of Labrador,in Labrador North and Labrador South in order to make certain that people in that area which has been considered to be neglected over the years, the neonle in that area can have direct access to a resnosible officer of the Rural Development Authority.

Finally, Sir, as far as the members of the authority are concerned, I do hope that the minister responsible, the member for Trinity South, will reconsider the non-polf ti.cal members of that authority. Not that there is anything particu]arilv wronr- with the present members personality. I know one or two of them quite well. I do not see anything wrong with them per~onal1y but their places of residency seem to me to be a bit lopsided.Perhaos there should be more on the authority from other areas of the province, certainly one from Labrador.

The cost of flying in members of this authoritv for weekly or monthly meetings should not I think he considered a waste or a loss of money because I think it is ~cod to have the advise,for the minister and the political hends of the denartments to have the advise of various neople from al 1. over the Province of Newfoundland and Labrador, Perhans even an increase in the number of the non-nolitical members of the authorities would be in order as welL I throw these things out for the minister, not even to have any comment at the pre.sent time or certainly not to get any answers at the present t1me but for his considerRtion and I would like to hear him on it again when the main estimates come before this House.

This is a very important topic. We all have a vested interest in it. We are 1063

February 26, 1973 Tape no. 345 Pagel - HRW Mr. w. N. Rowe all interested in seeing rural development succeed in this province. and I am sure that we will have an even longer debate when the main estimates come before: the Houae. 'fhis is one of the most impor