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December 8, 1980 Tape 2 719 EC - 1 The House met at 3:00 P.M. Mr. Speaker in the Chair. MR. SPEAKER (Simms) : Order, please! STATEMENTS BY MINISTERS MR. SPEAKER: Labour and Manpower. Sm1E HON. MH1BERS : ~IR. DINN: The hon. the Minister of Hear, hear! Mr. Speaker, the latest statistics Canada employment growth figures released recently show Newfoundland leading the rest of Canada in employment growth for the month of October. SOME HON. MEMBERS: Hear, hear! MR.

DINN: Newfoundland's employment growth ratewas 6.2 per cent compared with 5.6 per cent for British Columbia, 5.3 per cent for Alberta, 1 per cent for Ontario, .5 per cent for Saskatchewan and .2 per cent for Manitoba. There has been a growth in the employed segment of the labour force in Newfoundland in each month to date in 1980 as compared to 1979, and I give the figures in my release. This means that employment growth has averaged 5.37 per cent each month which translates into an average of 9,500 jobs per month. Mr.

Speaker, these figures confirm what I have been saying all along, that the provincial government's commitment of providing 40,000 new jobs over a five year period is far ahead of original projections. SOME HON. MEMBERS: Hear, hear! For the month of October, 1979 we had 185,000 Newfoundlanders employed compared with 197,000 in October, 1980, an increase of 12,000. SOME HON. MEMBERS: Hear, hear! Areas such as manufacturing, financial-insurance, real estate, commercial businesses, '?71 I -

December 8, 1980 Tape 2719 EC - 2 r.ffi. DINN: public administration and personal services saw significant increases with other areas of the economy re.'llaining stable. Mr. Speaker, the fact that Newfoundland is leading the rest of Canada in employment growth rate is indicative of the confidence the business community has in this Province, and I am optimistic that this trend will continue for the remainder of this year and into 1981. Mr.

Speaker, in passing this information through you to the people of the Province, I would like to say that the October monthly figure and the figures for six of the ten months show Newfoundland and Labrador has surpassed all other provinces of Canada in employment growth. If the figures for November and December have the same average growth rates then 198G will be the first year since Confederation, to my certain knowledge, that we have reached this new plateau. This is indeed a great step forward. SOME HON. MEMBERS: Hear, hear! MR. SPEAKER (Simms): SOME HON. MEMBERS: MR. LUSH: The hon. the member for Terra Nova.

Hear, hear! Mr. Speaker, we on this side certainly welcome any improvement, any real improvement in the statistics as they relate to the employment growth in the Province, but I must say that the government are really grasping for straws when they get up and co~~ent 7 2 7 L~

December 8, 1980 Tape No. 2720 SD - 1 MR. T. LUSH: on the growth of employment in this Province when we are talking about a 14 per cent unemployment rate and that rate has not changed substantially, Mr. Speaker, since last year at this time. As.a matter of fact, I do not ha>re the up-to-date figures but in September of this year compared with September of a year age, we had just reached the same employment levels, there ~ fluctuations throughout the year and there was a one percentage point difference in September of 1979 and September of 1980.

And the difference was that in 1979 the percentage point was down and in September, as I have said, from over one year ago it has risen by one percentage point. With respect to the 9,500 jobs, Mr. Speaker, again we are delighted that there were 9,500 jobs created in the total economy, both in government jobs within the Public Service and within the whole range of economic activity in Newfoundland, and that is tie focus in which it must be put, that is the perspective in which we must look at it; there were 9,500 jobs.

Of course, what the government must direct its attention to is what proportion of these jobs they created. They certainly cannot take credit for the natural growth in the economy and to say that they created 9,500 jobs. But, Mr. Speaker, we on this side certainly take delight in that figure to know that ~t least there were 9,500 new jobs created in the total labour force, in the total economy of this province. But, ~r.

Speaker, to take any great joy in the little increase, I think is certainly being a little bit pretentious. &~d as the Speaker knows,there is a saying, I think, that says there are lies and there are statistics . But ~e can be no denying oi the figure that there riere 9,500 jobs added to the total work force in the year for which the statistics apply and we on this side certainly are delighted about that and only wish that 7275

December S, 1980 Tape NO. 2720 SD - 2 ~R. T. LOSH: the minister could say that there '.Tere 15,000 or 20,000 jobs · aut thank God for s:nall blessings and we are delighted tha-t there 1o1ere 9, 500 jobs added to the labour force in this Province this year. ~ffi . SPEAKER (Simms) : ~~y further statements? The hon. Minister of ~lines and Energy. SOME HON . ~~~ERS: Hear, hear. MR • L • BA .. lffiY : !"'r . Speaker, I must say I almost did not get up after that last statement. Does ;:hat maa."l that there are 12, 000 of the 4 0, 000 already delivered ?·£rereniO'.lS! SOf-iE HON. MEMBERS: Oh, oh . MR .

SPEAKER: Order, please! ~!R. L. BAR-"qY: I a'TI sorry, Mr. Speaker. This statement is ~eing presented to this hon. House, Hr . Speaker, in order to correct certain erroneous information carried prominen tly by the St. ~ohn 's newspaper I The Dailv Ne1.,rs 1 December 5th , concerning the development of the Hibernia oil discovery on the Grand 72 7P.

December 8, 1980 Tape No. 2721 RA - 1 MR. L. BARRY: Banks of Newfou~dland. The news report under the banner headline "Hibernia Oil Nc Good for Come By Chance" was a staff report from Ottawa under the authorship of Mr. James R. Thoms. In brief, the report made the following points on which I propose to comment: First 1 Mobil Oil has "declared" that Hibernia crude cannot be used in Come By Chance without substantial modifications to the plant. These modifications are such that it is sug­ gested that the Newfoundland Government might build a new refinery.

The second point I want to comment on is that as a the consequence of this so-called declared inability of Come By Chance to handle Hibernia crude, it would be trans­ ported to refineries in the Maritimes, Quebec a~d Ontario and would only be landed in Newfoundland if there is either a new refinery to handle it or Come By Chance is substantially modified . The third point I ,.,ant to comment on is that pipelines to carry the oil from Hibernia to Ne,.,foundland cannot be used due to the "pouring point" of the crude, whatever that is. Tran~oortation of the crude therefore will have to be by tankers, the

article suggested. Mr. Speaker, the basis of the

article was purported to be a disclosure on the port of Mobil Oil to" the federal government" and to "federal o;:ficials". In reality, Mr. Speaker, I am informed by Mr. Dory Little, president of Mobil Oil Canada Ltd., that the newspaper

article represents a very garbled version of a very general presentation made by him to the Atlantic caucus of the Liberal Party. In particular, Mr. Speaker, Mr. Little disclaims any special knowledge of Come By Chance and states unequivocally that he did not say that Hibernia crude is un­ suitable for Come By Chance. In fact, this suqgestion and the supposed need for substantial modifications or a new refinery, 7277

December 8, 1980 Tape No. 2721 RA - 2 MR. L. BARRY: c~~e from a Liberal member for Nova Scotia at this same Liberal caucus meeting . Mr . Spea.ker, •N'hi le the original design specifications of Come By Chance were based on Kuwait and Agha Jari crudes , the refinery is extremely flexl.ble in its ability to accept various crudes . Recent investigations have failed to identify any "no -go" crudes, any crudes that would not be possible to refine although running what they call pure Bacnaquero crude is not recommended due to its high gravity, pour point and viscosity -thi s is a very heavy crude.

The be st crude for Come cy Chance from a yield and quality vie\..point is Bonny Light Nigerian . All member s will be happy to hear that,l am sure . Investigat ­ ions have indicated that other crudes which should present no signific3nt yie ld or quality problems are Alaskan, Suncor, Sour Mixed Blead, Arabian Light or,Nr. Speaker, Hibernia crude. In fact, fu:. Speaker, the use of Hibe rnia crude may present economic benefits over the de sign crude in a relatively 727 8

December 8, 1980 !-1R. L. BARRY: products,such as naptho, Tape No. 2722 DW - l higher yield of high value white gasoline, kerosene and so forth and in lessening the need for a higher stack due to the lower sulfur content of Hibernia compared with the design crude. It must be concluded, Mr. Speaker, that there is no known reason why cruQe from Hibernia could not be processed in the refinery at Come-B~-Chance. It should be noted, Mr. Speaker, that the design capacity of Come-by-Chance is 105,000 barrels per day, while at its peak, Hibernia will probably produce in excess of 300,000 barrels per day.

There will be, therefore, significant exports of crude oil from Newfoundland to other Province of Eastern Canada because there w~ll be mure than Come-by-Chance can deal with. Mr. Speaker, with regard to the development of the Hibernia field and the transportation of crude to shore,both the Provincial Government and Mobil Oil have long realized that several alternative design options exist. For example, production might take by way of fixed ice-resistant structures or through the use of floating ~ovable structures.

In a similar way, transportation of the produced petroleum to shore might be accomplished using either tankers or pioelines. Now, Mr. Speaker, the eventual choice of which of the production and transportation options are used, will be made by Government - not by Mobil Oil - o~ the basis of such considerations as safety to persons and the environment, reliability, economics, impact on the fishery and overall benefit to the Province.

At the present stage of knm.;­ ledge of the Hibernia discover~' and the physical environment, we consider all of the above alternative development and transportation concepts to be technically feasible. 7279

December 8, 1980 Tape No. 2722 Dl'l' - 2 MR. L. BARRY: Specifically, with regard to questions raised in the newspaper

article with regard to a pipeline, it is acknowledged that the pour point of the crude does present a potential probl~~. It is a problem, however, Mr. Speaker, to which several technical solutions have already been proposed, such as heating the pipeline, insulating the pipeline and the addition of chemicah to improve the pour point characteristics of the crude. In fact, Mr. Speaker, this pour poi~t problem will have to be solved, at least in a limited fashion in any event, since there will be crude flowlines in the area of the Hibernia field under any of the development and transportation options.

Evenif you had tanker traffic bringing it in,there would be pipelines connecting the various wells to the point at which the tankers were loaded. Such flowlines will be subject to the very same crude pour point problems as with a major pipeline to shore. Mr. Speaker, I want to caution nembers opposite against too quickly accepting as gospel every argument produced by third parties concerning why one development alternative should be proceeded with, as opposed to another. Companies will engage themselves for, their own purposes,in special pleading.

Our government intends to see that the development method most in this Province's interests will be selected by an exhaustive public hearing rather than by political lobbying behind closed doors. SOME HON. ~EMBERS: Thank you, Hr. Speaker. Hear, hear! 72·LlD

December 8, 1980 Tape No. 3723 EL - 1 MR. SPEAKER (Simms): The hon. member for Windsor - Buchar:.s. MR.FLIGHT: Well, Mr. Speaker there is not much one can say. I thank the minister for the statement; however, I did not have it in ti.TUe enough to prepare a prepared answer. It is obvious though, Mr. Speaker, that Mobil Oil believes that they have a reason for political lobbyir:.g. The minister admits that this information came to ~he Daily News as a result of Mobil Oil talking to the Federal Liberal caucus of the Atlantic Provinces, so Mobil must feel that they have a reason to lobby. Now, Mr.

Speaker, with regards to the mentioning of the second refinery being built to use Hibernia crude, that should not sur­ prise anybody, Mr. Speaker. We were told in - I think the minister was still the Mir:.ister of Mines and Energy in 1973 when this government told us we would have to have a second refinery and there were plans made in the Province for build­ ing a second refinery. ~he hon. House Leader (W.Marshall) will remember that. Little saying that he had Mr. Speaker, with regards to ~r. very little know- ledge or no knowledge of Come By Chance, I find that diff­ icult to understand.

Petro Canada is a partner of Mobil on the development of Hipernia. And Mr. Speaker, Come ~y Chance can handle one half of the total production of Hibernia and - !-IR. BARRY: One third. MR. FLIGHT: o~e half of the total production. )1R. BARRY: One third. It is in the statement. MR. FLIGHT: Alright,one third; one third of the total production. Now, Mr. Speaker, it would seem to me that if we are going to get the benefit from offshore that one 7281

n December 8, 1980 Tape No. 2723 EL - 2. MR. FLIGHT: would expect in view of the situation that we have had this government telling us that everything, everything will flow to New­ foundland,then obviou~ly we would expect that the product would be refined in Newfoundland. That is where the jobs are. SOME HON. MEMBERS : Hear, hear! MR. FLIGHT: I need not remind anybody any- more, Mr.

Speaker, that the reason for establishing the Come By Chance plant in the first instance was not necessarily for the plant itself,but in the hope that a petro~hemical complex would be established in the area as a result of the refinery operating. Now, Mr. Speaker, the minister has not told us, for instance, never made any reference at all to the fact that the main point, in my view of The Daily News story, that the production of Hibernia might end up not coming ashore at all in Newfoundland, never mind by pipeline,but head for refineries on the Eastern Seaboard.

I mean this statement is conspicuous for the abscence of the minister even addressing himself to that possibility that the oil would come ashore in the Eastern Seaboard. So, Mr. Speaker, there are ob­ viously reasons, the member for LaPoile(S.Neary) has been up on it for the past few days pointing out and will probably continue to point out that Mobil Oil and this government and the Prem­ ier are not seeing eye to eye on lots of things, that Mobil is threatening to set up offices in Halifax 7282

December 8, 1980 Tape No. 2724 NM- 1 MR. FLIGHT: and that there is an ongoing argument with the government. So, Mr. Speaker, this statement does not~in~ to clarify or to relieve the fears of the people in Newfoundland who might be starting to believe that there are indeed problems with ~-!obil, and they may indeed be intending to look at the possibility of setting up their head offices in Halifax where they can look at dealing with somebody who will have less of a confrontatio~al attitude. Now, Mr.

Speaker, as far as the Corne By Chance refinery is concerned, it is going to be very difficult for the people of Newfoundland to understand. This again - if the minister is so sure that there is no reason why Corne By Chance cannot be updated or the necessary modifications made to handle the Hibernia crude then one would have to aslc again ·.vhy was this government prepared to give PetroCan a deal that had no obligations whatsoever, that put PetroCan in a posi tion 1 a year down the road, to scrap that plant? ~fuy? Why were they prepared?

If this government is prepared to say offshore oil to the extent it can is going to be refined in this Province, the jobs are going to be here in refining, why is it having an oil refinery now, why did we put that refinery in a position so that it could be dismantled by Petro-Canada and have to look at the possibili-ty, if we want to have the benefits of refining our offshore in Newfoundland and creating the jobs in Newfoundland, why do we put ourselves in a position where an oil refinery existing may be scrapped and we would have to look at the possibility of building another one to take advantage of any refining of the crude in Hibernia or any other oil field that might be out there?

And, Mr. Speaker, the minister has not addressed himself to that issue in this statement. MR. SPEAKER (Simms) : Further statements? 7281

December 8, 1980 Tape No. 2724 NM - 2 ORAL QUESTIONS: MR. SPBAKER (Simms); The han. member for LaPoile. MR. NEARY: Mr. Speaker, in connection with the statement just made by the Minister of Mines and Energy (Mr. Barry) and other matters that have been bothering the people of this Province through lack of information coming from the government,~he people have to depend on stories like they read in The Daily News and from third parties because the government has refused to give this House and the people any information in connection with the production of oil offshore.

I would like to ask the Premier, in view of the fact that l1obil Oil have set the target date for7roducing oil offshore, moved it ahead a year to 1986, will the hon. gentleman indicate to the House if Mobil have presented their schedule, their programme, their plans for production of oil offshore? MR. SPEAKER: The bon. the Premier. PREMIER PECKFORD: Mr. Speaker, the whole ~usiness of what date the Hibernia field,for example,would come onstream is highly speculative at this point in time.

It depends upon a lot of factors. whileMobil has indicated to the Minister of Energy and to the Petroleum Directorate certain alternatives that they are looking at, but under the regulations there is a certain procedure through which all companies when they want to go from in an exploration phase to a production phase must follow, part of which was contained in the Minister of Energy's statement as it related to public hearings, environmental assessment and so on, so it is not definitive yet. 7254

December 8,1980 Tape No. 2725 AH-1 PREMIER PECKFORD: Under the petroleum regulations as promulgated,Mobil has not to this point in time made a presentation in line with those regulations.It was always indicated up to now,and I think it still stands, that sometime in 1981 was the time frame in which it seemed as if Mobil and their partners would be in a position to make the kind of presentation that is dictated under those regulations. MR.NEARY: A supplementary. MR.S~EAKER(Sirnrns): A supplementary question. The hon. member for LaPoile. MR.NEARY: '1r.

Speaker, in vie•" of the fact that Mobil seems to be leaning towards transporting the oil by tanker from the well head, and in view of the fact that Mobil are operating under a federal and provincial permit, is it possible for Mobil or anybody else operating under two permits to make a presentation to the Government of Canada and not make a presentation to this government because of their hostile attitude towards Mobil and the other companies, make a presentation to Ottawa for the production of oil offshore and move the oil without approval of this Province, move it by tankers rather than bring it ashore? MR.

SPEAKER: PREHIER PECKFORD: MR. NFARY: MR. SPEAKER: for LaPoile. MR. NEARY: The hon. the Premier. No, Mr. Speaker, not in our view. ~~r. Speaker,. a suppleroentary. A supplementary. The hon.member Would the hon. gentleman indicate if it is correct that one permit is equally as good as the other, that ~obil operating under two permits, a federal permit and a provincial permit, that one permit is equally as good as the other and that it is possible for Mobil to make a presentation to the Government of Canada for producing offshore ,and indeed may have already made a deal, may have 7285

December 8,1980 MR.NEARY: is this possible? MR.SPEAKER (Simms) : PREMIER PECKFORD: Tape No. 2725 A.'l:-2 already made a presentation, The hon. the Premier. Not in our view, Mr.Speaker, because the companies have indicated all along that at the same time as they make an application for an exploration permit with one jurisdiction they will do it with the other,and they have followed that all along. We would hope,and we have no indications to the opposite,that they would not do anything less than that as it came towards getting into the production phase.

One could go on to indicate that once the companies have applied under our regulations,because they are so much better than the federal regulations,that they have almost autontatically met all and even exceeded a lot of the conditions that they would need for the federal regulations. MR.NEARY: A supplementary, Mr. Speaker. MR.SPEAKER: A final supplementary. The hon. member for LaPoile. MR. NEARY: Mr.

Speaker, has Mobil indicated to the Newfoundland government in any way , shape or form that because of their procrastinating on the proof of ownership that this indeed may delay , could possibly delay production of offshore oil because the ownership question is not settled? And how hard is Mobil pushing the Newfoundland government to get this matter of ownership settled as quickly as possible? MR. SPEAKER: The hon. the Premier. PREMIER PECKFORD: Mr. Speaker, I think it is fair to say that all the companies are extremely concerned, and have been right from the start, about this double jurisdiction situatior..

And we have said from time to time that during the exploration phase it is not that serious,but as we get closer to a production phase then it does become more serious. So it will depend to a large P;.::tent 7286

December 8, 1980 Tape 2726 EC - 1 PREHIER PECKFORD: upon when Mobil and their partners believe that they are in the position to make a specific application for development. Now, to this point in time, Mr.

Speaker, there has not been an application from the consortium for a development permit, and remembering that inherent in that application is a fairly lengthy process of approvals through the environmental assessment, through public hearings under the petroleum regulations and so on, so unless and until they have reached that stage then the concern, although serious, is not tofue point where it would stop anything.

But as we see more oil flowing, as we see more wells being drilled through the Winter, obviously we are getting closer and closer to the day when the whole consortium has to make an application for development; so that as each moment goes by now, it becomes more and more serious, more serious in the sense that you will not see production as early as you could otherwise have seen it with only one jurisdiction applying. MR. FLIGHT: MR. SPEAKER (Simms): Mr. Speaker, a supplementary. A supplementary, the hon. the member for Windsor - Buchans. !~. NEARY: (Inaudible) without any reference to the Province MR.

FLIGHT: Mr. Speaker, my supplementary grows, really, out of the minister's statement today and it is in keeping with the member for LaPoile's (Mr. Neary) question. Would the Premier confirm for us is it the government's position that all oil produced at Hibernia will come ashore to Newfoundland by tanker - or by a pipeline, however · - but that it will come ashore for either refining or storage and transshipment,or is there a possibility that oil from the Hibernia field can be taken from the well head to refineries on the Eastern 7237

December 8, 1980 !1R. FLIGH'r; ashore in Newfoundland? MR. SPEAKER (Si~~s): PREMIER PECKFORD: Tape 2726 EC - 2 Seaboard without ever coming The hon. the Premier. There are two parts to that question. It depends on how involved the hon. member wants to get and what kinds of volumes he is talking about. If you are just talking about the Hibsrnia oil field, that~ one thing. I think the Province and the government would try to - MR. FLIGHT: That is the only one ~ve know about right now. PREMIER PECKFORD: Yes, that is right, but there could possibly be others.

Now, how ~uickly they are developed and what regulations would apply is very important because you get into volumes. Now, if yoa are talking about a production flow of 300,000 barrels a day,under the regulations there would have to be public hearings and the government of the day will have to consider whether in fact it is environmentally, economically, and all the other ways, acceptable to bring 300,000 barrels of oil into Newfoundland, 100,000 barrels a day for Come ay Chance and so much fer storage or whatever in different places, that is a decision that would have to be made.

We would try to maximize as much as we can Newfoundland's involvement in the production of oil offshore. Now, to the extent that that is possible, I do not know. I can not speak in absolutes. Does it mean then that if some day we got into production of 1.5 million barrels a day that all of that would come to the Island of Newfoundland? I do not know .. But insofar as it is feasible and possible and we ca..TJ. make it happen, then we are going t.o try to get as much spinoff from that production offshore as we possibly can.

But one must always put a condition on that, that sometime do\vn the road beccmse of its large volumes, it could be 72BB

December ·8 , 19 8 0 Tape 2726 EC - 3 PREMIER PECKFORD: just too much for the Province . The· other thing is that if t.'<le Newfoundland pr ovincial jurisdiction is acknowledged and confLrmed, \"e '"'ould hope - and I suppose I speak for any government that is going to be here in the next twenty or thirty years - we would hope that the pro\>'incial government of the day, wit.~ the jurisdiction conf.irmed, would ensure an orderly development of other fields so that you were not at any point in time overheating and 728 9

December 8, 1980 Tape No. 2727 SD - 1 PREMIER PECKFORD: really destroving your fishing industry and the other things that you -would have to look at, so one of the key elements in the whole business of jurisdiction and ownership of the resource like other provinces is this business of being able to pace the development so you do not get into a sihBtion ~r;here you would have to see massive exports of your raw material going somewhere else. MR. SPEAKER (Simms) : MR. E. HISCOCK: The hon. member for Eagle River. Mr.

Speaker, my question is to the Premier in his capacity as Minister of Intergovernmental Affairs with regard to a news item on themational News last night on CBC that Labrador South Chamber of Commerce inviting Mr. Levesque or some officials to come in and to speak with them and also see if there is any way that they can help them financially. I have asked the House these questions but basically I direct them to the Minister of Transportation. The Labrador South Development Association had a conference this weekend which I attended and which the Minister of National Revenue, Mr. Rompkey, attended, and also Mr.

Art Puddister of Puddister's Trading Company, operator of the Northern Cruiser, No member from the provincial government was there. MR. SPEAKER: a question? MR. HISCOCK: Order, please! Does the member have ~he question I want to ask the ~remier is how is the Premier treating this situation? Is he treating it as a farce, is he treating it as a serious situation ? How is this provincial government in looking upon this invitation that they have given Mr. Levesque to come into Labrador? MR. SPEAKER: The hon. the Premier. PREMIER PECKFORD: Mr.

Speaker, first of all, last weekend myself and the Minister of Rural Development (Mr. Goudie) talked about this situation and the Minister of Rural Development through the weekend tried to get to the 72qD

December 8, 1980 Tape No. 2727 SD - 2 PREMIER PECKFORD: Strait's area for the meeting but was unsuccessful because of weather. I talked to the minister this morning and he can explain to the hon. member the efforts he tried in order to try ·and get there. That is number one, so we did try to have representation at that meeting.

Number two, we view it very seriously. we are ready as a governmentand have been for a long time, from the time that I was Minister of Rural Development when the first p~blic hearings were held on putting a Coast~l Labrador.agreement together and travelled down around that coast, the government did, through the Development Associations and other people, to get the input of the local residents for a comprehensive DREE agreement which would include transportation, fishing and hospital and educational facilities and all the rest.

That agreement has been, as the hon. member knows, sent to Ottawa for quite some time now and has been approved by everybody except the highest level in Ottawa. We were ready to sign that yesterday but there has been a slowness to do it and there is no indication of when it will be signed.

For example, we hear different statements in the press from time to time about, for example, the Minister of Lands and Forests (Mr .j?o\-Jer ) , we have had to carry oursel·Jes the money for Forestry this year because a D~E agreement was not signed, the Minister of National Revenue announces it is going to be signed in Grand Falls on the 6th or 9th of January; we called Mr. Debane's office and he knows nothing about it. So the Coast of Labrador agreement is something - SOME HON. MEMBERS : Oh, oh.

PREMIER PECKFORD: - like that, we do not know when, we have got to wait for the latest press release and then we find from another federal minister that it is not true. SO~.E HON. MEMBERS : Oh, oh. MR. SPEAKER (Simms) : Order, please! 7 2 s .1

December 8, 1980 Tape No. 2727 SD - 3 PREMIER PECKFORD: We view with a great deal of concern the situation in the Strait's area of Labrador, very great concern. We will try to demonstrate to the 7hl2

December 8, 1980 Tape No. 2728 NM - 1 PREMIER PECKFORD: people there and to the communities there that we are doing all we can and that we have our money available today to sign that agreement. And we want the people of the Labrador Coast to be treated no differently than the people of the Island of Newfoundland. That means when you are talking $30 million or $40 million for your road,then it should be treated ninety/ten,the same way as other roads on the Island. And I think that the people of the Straits of Labrador deserve the same treatment as the people of the Island of Newfoundland.

In that case their roads should be ninety-ten. ~- NEARY: Rhetoric. SOME HON. MEMBERS : Hear, hear! MR. SPEAKER (Simms) : A supplementary, the hon. member for Eagle River. MR. HISCOCK: A further supplementary, Mr. Speaker. Since the Labrador DREE agreement is $47 million, ninety/ten under this agreement will be paid by the federal government, which is something around $42 million, but under this agreement they said they would only pay fifty/fifty for the Straits Road, which is basically $5 million.

The Premier said he is ready to state - and roads are a provincial responsibility; DREE is basically saying they are not going to go $30 million for 2,500 people -~an the Premier tell me and tell the people in the district now that they have gone back to Ottawa, Ottawa has come to them, will the Premier only say, "No, we are not going to go seventy-five/twenty-five we are not going to go sixty/forty, we are not going to go eighty/ twenty, we are sticking to our ninety/ten''? Can 1:he Premier answer that question? MR. SPEAKER: The hon. the Premier. PREMIER PECKFORD: Yes, Mr.

Speaker, we believe that the Burgee Road and the Bonavista Loop Road, and the Great Northern Peninsula Road, all of those ninety/ten roads should be done the same way, ninety/ten in the Straits area. There is no reason why it should be done differently. These people should not be 7293

December 8, 1980 Tape No. 2728 NM - 2 PREMIER PECKFORD: treated any less than the people who lived in Burgeo and Ramea and are in need of a road down there. This is a secondary road and although under the constitution roads are provincial, there has been from time to time DREE agreements on secondary roads to help assist in regional economic expansion to the tune of ninety/ten. We have our ten per cent and we have to, you see, Mr.

Speaker, because we have another DREE agreement in the works on roads for ninety/ten for all o~ secondary roads, roads that in the hon. members' districts, as well as members on this side, and we must ensure that we are fair all the way along the road - all the way along the road, no pun intende~ -because we do not want to go signing a DREE agreement for the people of Labrador, which - fifty/fifty, and then have to make people in other parts of the Province wait because we are still holding out for ninety/ten. This Province just does not have the money to do it that way.

So we are willing to be a party to a DREE agreement for Coastal Labrador which is the same as the agreements that we have signed in othe~ parts of the Province, fai4 equal treatment for all. MR. SPEAKER (Simms) : for Eagle River. A final supplementary, the hen. member MR.

HISCOCK: 1-<ill the Premier as the Minister of Intergovernmental Affairs- when I got elected I tried to get a copy of the Coastal Labrador DREE agreement and I was told by a Conservative Government, and later a Liberal Government in Ottawa, that this was between the Minister of DREE and the Premier or the Minister of Intergovernmental Affairs (Premier Peckford) .an:l I as the member could not get a copy of this agreement.

When I went to this meeting in my district this weekend, the supporters of the PC Party ended up comi~g up with this agreement and it was told at that meeting that they received it from the government side, from the-ministers. Could the Premier 72SL

December 8, 1980 Tape No. 2729 DW - 1 MR. E. HISCOCK: inform this House why is it that I, the member,cannot get a copy of this agreement but members of the PC can get it? MR. SPEAKER (Simms) : The hon. the Premier. PREMIER PECKFORD: Mr. Speaker, that was infor- ·. mation relating to the roads agreement and not the total DREE agreement itself, Qecause obviously it cannot be the DREE aqreement because it is not sianed vet. ~!R. HODDER: ~'l'ill the Premier table what he sent out? HR. SPEAKER: The han. the member for Trinity - Bay de Verde. MR. F. ROWE: Mr.

Speaker, Your Honour, was reported on Q-Radio-correctly, I assume, today-as having met with the President of ~emorial University regarding the building of a regional college in Grand Falls. And it was reported that everything looks quite optimistic with respect to the building of that regional college. Since I cannot ask Your Honour a question, Mr. Speaker, I have to direct my question to the Minister of Education. And in view of the fact, Sir, that on August 13th., 1972 it was reported in the Evening Telegram by the then member for Grand Falls, Mr.

Aubrey Senior, that a regional college for Grand Falls would go ahead, ~auld the minister indicate to the House, Mr. Speaker, IY"hat preliminary or final specifications and plans are on the drawing table now with respect to that regional college and what the start up date is antici- pated to be and when the completion date is anticipated to be and when this college will be ready for occupancy? '1R. SPEAKER: The hon. the Minister of Education. 7295

December 8, 1980 Tape No. 2729 DW - 2 MS. VERGE: Mr. Speaker, no decision has been made as to a start or a go-ahead for another regional college for our Province. This will be a decision to be made by Memorial University in consultation with the Edu­ cation Department, the Cabinet Committee on university finances ,and the whole government.

The Cabinet Committee has ongoing discussions with the Board of Regents and the President of the university about the university's desires and plans over the long-term for capital expansion and that process has been a useful one,but no decision has been made for any go ahead for another regional college. The member for the district of Grand Falls (Mr.

Simms) has had several discussions with me and my officials about the need for a regional college in Grand Falls to serve the central region of the Province, and he has argued persuasively as to the suitably of the town of Grand Falls as the site for such a regional college. MR. F. ROWE: MR. SPEAKER(Simms): for Trinity - Bay de Verde. MR. F. ROWE: A supplementary, Mr. Speaker. A supplementary, the hon. member My extreme condolences, Mr. Speaker. Mr. Speaker, in view of the fact that the President of the Council (Mr.

Marshall) said in one T.V. programme a few years ago that the Throne Speech is a very sacred document and outlines the programme for the government for that particular year,I would like to indicate to the minister that in the year of 1972 in the Throne Speech , I quote, "The PC's intend to establish regional colleges in various sections of Newfoundland and Labrador".

I was wondering if the minister could indicate the government's plan with respect to that particular programme announcement,in the sacred Throne Speech of that particular day, what plans are developing for a regional college, say,on the South coast, in Labrador.either in the Goose Bay area and/or the Wabush- 7296 '•

December 8, 1980 Tape No. 2729 DW - 3 MR. F. ROWE: Labrador City area, with respect to Central Newfoundland and the North East coast? What plans are on the drawing board now with respect to this great plan promised in 1972 for a series of regional colleges throughout the Province? MR. SPEAKER (Simms): MS. VERGE: The han. the Minister of Education. Mr. Speaker, since 1972 there has been a lot'of activity in the area of post-secondary education in the Province.

There are a couple or a number of kinds of colleges, I think the kind referred to in the first question posed by the han. member for Trinity - Bay de Verde (Mr. F.Rowe) was a type of university or a branch of Memorial University the same as the Sir Wilfred Grenfell College in Corner Brook. Another kind of college is as 3. regional or community college comprising non-~~iversity post-secondary programmes such as the Bay St. George Community College in Stephenville. The Bay St. George Community College in Stephenville has been established over the past number of years. My friend,the member for Stephenville (Mr.

Stagg), served as Chairman of the Board of Governors of that college. And that is a model for our Province which is being studied and which will have relevance to others areas of the Province. 7237 ·.

December 8, 1980 Tape No. 2730 EL - 1 MS. VERGE: Under this kind of community college model, existing facilities such as the sixteen voc­ ational schools could be incorporated into a local college having autonomy. And also, of course, the current plans for expanding the senior high school programme will meet some of the needs which have been identified for the young people of the Province in terms of giving them a good,well­ rounded education. R. F. ROWE: MR. SPEAKER (Simms): A final supplementary, Mr. Speaker. A final supplementary, the hon. member for Trinity-Bay de Verde. MR. ROWE: Mr.

Speaker, I am afraid that the Minister and the administration are creating a monumental monster on their hands. We have, on the one hand, the intention of bringing in Grade XII. We have the foundation year at the university, the junior studies year, we have community colleges, we have regional colleges. What I would like to ask the min­ ister is what exactly do we have with respect to a post-second­ ary education in this Province?

Is it the intention of the minister and the administration to go for basically community colleges,as defined as community colleges, the ~er curriculum type of college,or to go for regional colleges which are really, you know, first or second year university types of things? ebviously, my own choice would be a broader type of a curriculum, but we seem to have a growing monster on our hands now with these four different tentacles going out. What, bas­ ically is the government's policy with respect to post-second­ ary education?

Is it going to be community colleges through- out the Province of Newfoundland and Labrador colleges or a combination of both? MR. SPEAKER: The hon. ti1.e :lli"'l.ister 7298 or regional of Education. -.

December 8, 1980 Tape No. 2730 EL - 2 MS. VERGE: Mr. Speaker, obviously there has to be a combination of post-secondary education opp­ ortunities for the people of our Province. There is Mem­ orial University,with its regional college at Corner Brook and its extension programme with possibility for further expansion. There are non-university post-secondary pro­ grammes accomodated in the College of Trades and Technology based at St. John's, the College of Fisheries based at St. John's but which has extension courses in about sixty communities around the Province, the Bay St.

George Comm­ unity College,which takes in the old vocational school at Stephenville Crossing and has greatly expanded beyond that and is a model that we are studying for further community colleges of this kind. We have sixteen vocational schools all around the Province serving every

section of the Province. We have a thriving programme of adult and continu­ ing education in just about every community of the Province and we will continue to expand and move in all these directions to adequately educate and train the young people and the adults of our Province. SOME HON. MEMBERS: MR. FLIGHT: MR. SPEAKER {Simms ): Buchans. MR. FLIGHT: Hear, hear! Mr. Speaker. The hon.member for Windsor- Thank you, Mr. Speaker.

I wonder would the minister indicate to the House whether or not the first priority will go to Grand Falls for the - you know, there are four or five areas in the Province where re­ gional colleges or community colleges are being talked about. Has the minister made a decision on where the priority it, whether it is Central Newfoundland, the South Coast, Grand Falls, Labrador and would the minister also,while she is 7299

r: December 8, 1980 Tape No. 2730 EL - 3 MR. FLIGHT: answering that question, in- dicate since there are two or three versions of various colleges that may be established, which version it was that the hon. hard~wcrking member for Grand Falls (L.Simms) suggested would go into Grand Falls? MR. SPEAKER {_Simms): The hon. the Minister of Ed- ucation. MS. VERGE: Mr.

Speaker, the hon. member for Grand Falls has been speaking ~o me about the need for a branch of Memorial University or a regional college of that university comparable to the Grenfell College in Corner Brook to serve the central region of the Province and to be situated in the town of Grand Falls. As for community colleges, a la Bay St. George, it is obvious that there is a need for this kind of non-university post-secondary opportunity in a num­ ber of regions of the Province. One region which I have stated will be given priority is Labrador.

The Central Newfoundland region is another area with the need and the potential for a community college along the Ba y St. George Community College model. ~ffi. FLIGHT: MR. WAR'REN: MR. SPEAKER: Mountains. MR. WARREN: supplementary one for But which one has priority? Mr. Speaker. The hon. member for Torngat Order, please! Yes, Mr. Speaker, I have a the Minister of Education. Am I left to understand from the Minister of Education that her first commitment for a community college is in Labrador as she said in the Estimates Committee on August 8th, 1979? 7300 ·.

December 8, 1980 MR. SPEAKER (Simms): ucation. MS. VERGE: Tape No. 2730 EL - 3 The hon. the Minister of Ed- Mr. Speaker, I have stated that a community college housing non- university ~est-se­ condary programmes, ~hese are the ones now given in voc­ ational schools and through adult and continuing education, that 7.3 01 ·.

December 8,1980 Tape No. 2731 AH-1 MS VERGE: a need has been recognized for this kind of a college in Labrador and in the Lake Melville area is now a nucleus for this kind of community college. Under this arrangernent,existing buildings would be used to the maximum. The emphasis in the development of co~~unity colleges is not construction of new buildings, not bricks and mortar, but rather th .e co-ordination of existing programmes and an administration and policy­ making mechanism organized at a local community regional level rather than one emanating from Confederation Building.

MR.WARREN: A supplementary. r-IR. SPEAI<ER (Simms) : for Torngat Mountains. A supplementary. The hon.member MR. WARREN: My final supplementary, ~1r. Speaker. In view of the minister's latest comments, could she tell the House whether development into the beginning of a community college in Labrador will be~in in 1981? MR.SPEAKER: The hon. Minister of Education. MS.VERGE: Mr. Speaker, we have already begun the thinking and planning. There have been ongoing discussions with the principal of the Voeational School at Happy Valley .and the regional supervisor for adult and continuing education for Labrador.

These people are actively thinking,planning, making recommendations,so a good foundation has already been laid for the creation of a community college in the Lake Melville area. HR.HANCOCK: !-IR. SPEAKER: The Capes. MR. HANCOCK: Mr. Speaker. The hon. member for St. Mary's- Thank you, Mr. Speaker. I have a question for the Minister of Recreation, Youth and Culture (Mr. Dawe). I have been approached by many moose hunters this past week.Because of the poor weather conditions they 7302

December 8,1980 Tape No. 2731 AH-2 MR. HANCOCK: did not get a chance to get their moose, they could not get in the woods,and they were wondering if the minister would consider extending the season for another week or so especially with the cost of meat those days, Mr. Speaker? SOME HON. MEMBERS : MR.SPEAKER (Simms): Recreation and Youth .. MR.DAWE: Oh, oh~ The hon. Minister of Culture, Mr. Speaker, there is very little we can do about the weather even though in my other reincarnation, as Minister of Environment,! do have some control over those matters but in this case it is probably a federal jurisdiction.

I have not been approached by anyone with the request that the member indicated. I am sure that if there were really extenuating circumstances we would entertain it,but I doubt it very much at this late time of the year. MR. SPEAKER: Order, please! The time for Oral Questions has expired. PRESENTING REPORTS BY STANDING AND SPECIAL C0~4ITTEES MR. SPEAKER: MR.BRETT: The hon. the Minister of Transportation. Mr. Speaker, I wish to table the annual report of the Department of Transportation and Communications for the fiscal year ending March 31,1980. MR. SPEAKER: The hon. Minister of Development. MR.WINDSOR: Mr.

Speaker, on behalf of my colleague, the Minister of Finance (Dr.Collins),who is down with the flu, and in accordance with the Financial Administration Act,l973/ I table some special warrants. MR. SPEAKER: Any further reports? 7303 ·.

December 8,1980 Tape No. 2731 AH-3 NOTICES OF MOTION MR.SPEAKER (Simms): The hon. the Minister of Municipal Affairs. MR. NEWHOOK: I give notice that I will on tomorrow ask leave to introduce a bill entitled, "An Act To Amend The Municipalities Act." MR. SPEAKER: MS.VERGE: Further notices? The hon. the Minister of Education. Mr. Speaker, I give notice that I will on tomorrow ask leave to introduce a bill entitled, "An Act To Amend The Education(Teache;-'s Pensions)Act, No 2." MR. SPEAKER : Further notices? ANSWERS TO QUESTIONS FOR WHICH NOT ICE HAS BEEN GIVEN tlffi.. SPEAKER: Works and Services. MR.

YOUNG: The hon. the Minister of Public Mr. Speaker, I would like to table ~n answer to a question asked by the hon. member for LaPoil (Mr.Neary) on December 4th, question 43. ~he total cost of photographs hanging in public buildings and around the Province. Sir,to my knowledge there is one, Sir, that is hanging in my waiting room outside the office and to date we figure including labour,because we do not know what these men wou1d be doing if they were not framing that picture,and the materials, the total cost is $35.00. I did see something­ one of the hon. members said in the terminal.

Sir, we cannot control -Public Works cannot control private advertising. And I must say there is a nice picture of the Premier down there and a constituent of mine, Dr. Dunne,and some children. I do not know the children. MR.NEARY: hangar. There is one out in the Torbay 7.3 0 4 ·.

December 8,1980 Tape No. 2731 AH -4 MR. YOUNG: The or.e at Torbay hangar . I did not see that one, Sir . The question, Part S, Sir; \-lere public tenders called for these photographs and if not why not? We did not call public tenders for that, Sir , because we had no reason because I felt it was in the Public Tendering Act that we could get this work done in the MR .SPEAKER lSimms l: Any further answers to question s? P~ESENTING PETITIONS MR.SPEAKER: The hon. member for the Strait of ~elle Isle, MR. ROBERTS ·: Mr. Speaker , I 7305 ·.

Dece~~er 8, 1980 Tape 2732 EC - 1 MR. ROBERTS: would like to present a petition on behalf of a number of constituents of mine who live in the community of Raleigh in my distric~, in the Strait of Belle Isle. petition.

There are 210 men and women who have signed this I think perhaps the most effective way I can present this petition to the House is to read the words which were appended to the petition or which headed up the petition, which,I say at the outset, were not written by me nor by anybody with my urging or guidance, but I think it.particularly relevent,given the Premier's eloquent and doubtless sincere remarks in Question Period about the state of the road in Southern Labrador, and we all concur with that.

The petition begins: "Presently there exists a substantial amount of discussion over provincial rights in the Canadian Confederation. It is disturbing to realize that we as a Province are doomed to insignificance and poverty while others have more than they can use." Send a copy of that to Peter Lougheed in Alberta, I would suggest. "Therefore, please reflect for a moment on the plight of an ignored part of our growing Province. On the lonesome Northern Peninsula, the expanding community of Raleigh has been attempting to improve its standard of living.

To get to another part of our Province or to visit neighbouring St. Anthony, we must travel a rough and rocky road that stret-ches for about ten miles. M.any people from our community make their daily pilgrimage over this road to work at the fish plant or hospital in St. Anthony. Millions of pounds of fish are carried along this road every Summer. Tourists have even attempted to traverse this road to visit our scenic area. ''We are fortunate that DREE has nearly completed the Northern Peninsula Highway." I can add to that that DREE has now let the final contract 7306 ·.

December 8, 1980 Tape 2732 EC - 2 MR. ROBERTS: to complete the Northern Peninsula Highway. SOME HON. MEMBERS : Hear, hear! MR. ROBERTS: "The only roads upgraded by the provincial government are in P.C. districts or where the citizens have become militant. To us, ~1. Premier, these are facts." SOME HON. MEMBERS : Hear, hear! MR. ROBERTS: "We do not wish to become militant. We s.hould not have to fight our government in a just society." SOME HON. MEMBERS: Hear, hear! MR. ROBERTS: "We have exercised our democratic - right in electing our M.H.A.

Must we be punished even more because he is not of your party?" SOME HON . MEMBERS : Oh, oh! MR. ROBERTS: Yes, they say, and the truth, Mr. Speaker, is that that is the attitude of the Premier and his colleagues, and these people at Raleigh know it and they are ask~ng for a little justice. We go on, "For years you have been receiving requests for paving the road linking Raleigh with the Northern Peninsula Highway. Your reply has been that the road in question would be completed in a subsequent year. Surely, that year is now here." And if I may add, 'the time . has come, ' a phrase with which we are familiar.

"We, the citizens of Raleigh, challenge you, Mr. Premier, to demonstrate your impartiality and your concern for the improvement of life in all of our Province " SOME HON. MEMBERS: Hear, hear! MR. ROBERTS: - "and pave the Raleigh road in the Summer of 1981." It is signed, as I have said, Sir, by 210 of the citizens of Raleigh. I would think that is just about every adult person in the community, Sir. 7307 -.

December 8, 1980 Tape 2732 EC - 3 MR. ROBERTS: They support it wholeheartedly, as do I. I can tell Your Honour and the House that what is said in this petition is honestly believed by the people in Raleigh, a belief which I share. I think that one of the saddest and most shameful facets of the record of this administration and of its predecessor - and they are one and the same, Sir, because a rose by any other name smells just as sweet, and a Tory adrninist·ration by any other name is just as bad - but the record in this respect, Sir, is one of the shoddiest of any aspects of their record.

The people of Raleigh and the people of the Northern Peninsula deserve a fair share of the money which the government are spending for the improvement of public services, they are not getting it, Sir, and this is the answer which the people there are going to -give - this, and the answer which they have given in the ballot box and, I venture to say, will give when next they are given the opportunity to elect whoever is to speak for them here in this House, Sir. I support the petition wholeheartedly. SOME HON. MEMBERS: Hear, hear! MR. SPEAKER (Simms) : MR. NEARY: The hon. the member for LaPoile. Mr.

Speaker, I support the petition so ably presented by my colleague, the member for the Strait of Belle Isle (Mr. Roberts) on behalf of his constituents in the community of Raleigh. I, am disappointed that the hon. the Prernier,to whom the prayer of the petition was directed, did not see fit to stand and give some kind of an explanation of why this road has not been upgraded or why these people have been neglected. Mr. Speaker, the people indicate in the prayer of the petition that government can find money for everything else.

Government can find money for coloured photographs, they can find money to pay the Economic Council 7308 -.

December 8, 1980 Tape 2732 EC - 4 MR. NEARY: of Canada ~1 .5 million for a report that the Premier dismissed forthright. SDME HON • aEMBERS : Hear, hear! -. 730q

December 8, 1980 Tape No. 2133 NM - 1 MR. NEARY: They can find money for all kinds of foolish things, $100,000 - a special Lieutenant- Governor's warrant for $100,000 to buy si1ly flags. And, you know, ~x. Speaker, it is shocking then for us, as members of the House, to hear the people of Raleigh beg and plead to try to get some recognition for a bit of road in their community. I think it is absolutely disgraceful. And no wonder the people down in Southern Labrador are looking to the Province of Quebec for help. It is terrible.

If you do not think oil, if you do not talk about oil, then you do not get any recognition in this Province anymore. We have a government that represents urban communities, Mr. Speaker, who are not interested in the rural parts of this Province. I think it is a shame and I support the prayer of the petition. MR. SPEAKER (Simms) : Any further petitions? ORDERS OF THE DAY: Motion, the hon. Minister of Municipal Affairs and Housing to introduce a bill, "An Act Respecting The Assessment Of Real Property And The Imposition And Collection Of Certain Taxes In The City Of St. John's," carried. (Bill No. 84).

On motion, Bill No. 84 read a first time ordered read a second time on tomorrow. Motion, second reading of a bill, "An Act To Provide For The Repeal Of The Churchill Falls (Labrador) Corporation Limited (Lease) Act, 1961 And The Lease And Amendments Thereto Executed Under That Act And The Reversion To the Province Of The Rights And Liberties Leased Or Granted To The Lessee Under The Lease." (Bill No. 85) MR. SPEAKER: The hen. the Premier. PREMIER PECKFORD: Mr.

Speaker, it gives me great pleasure today to begin the debate on this Lmportant piece of legislation, another in the series of actions taken by this government over the last number of months to try to indicate to 7310 ·.

December 8, 1970 Tape No. 2133 NM - 2 PREMIER PECKFORD: the people of the Province the way we intend to try to manage and operate, or,as our five year plan has said, how we intend to manage all our resources. Now, Mr. Speaker, the introduction of this very important piece of legislation is a culmination of effortsover the last fifteen or sixteen months by this government and by people working for this government.

I suppose it is fair to say it is not only a culmination of work that has been done in the last year and ~ half or so, but at least it has been done - a culmination of work that has been done by Newfoundland and Labrador Hydro and ministers of energy over the last four or five years 1 really. I guess it springs from a frustration that all Newfoundlanders feel, and I am sure I speak for all Newfoundlanders when I say that and all members of past governments who have recongized in the whole Upper Churchill Falls development something seriously wrong.

There was a time,I suppose, Mr. s~eaker, when it was thought back in the 1960s that.this massive technoligical achievernent,which still stands, technologically and engineeringly is one of the great feats of modern man really as it relates to hydro developments anywhere in the world, including recent developments in the Soviet Union, and it would always stand as a shining symbol of what can be done in a very harsh environment and a very ~arsh climate.

T~at lasted for only a short period of time and it was unfortunate really that the frustrations that Newfoundlanders and governments have felt over the last several years have sort of obliterated the engineering feat that is contained there. But it has, Mr. Speaker, and this legislation recongizes and re .flects an action that has been deliberately decided upon by government after very, very serious consideration, and after many, many years of frustration. 7 311 -.

December 8, 1980 Tape No. 2134 RA - 1 PREMIER PECKFORD: Mr. Speaker, the first specific active movement by a government to do something as it relates to the present Upper Churchill situation was done in 1976. Before that time there were different actions taken, it is true,which in themselves or collectively or together can demonstrate some action towards changing it.

But there was a specific action taken in 1976 which I think bears mentioning now which indicated the people of Newfoundland's desire through their government to do something when the goverp~ent of the day decided to enter into the courts to ask the courts whether in fact the lease agreement entered into with CFLCo a subsidy then of BRINCO did no~ give the Province of Newfoundland certain rights of recall beyond the specific amount of recall which was in the power con­ tract.

I suppose it is one of the !lOSt cx::rcplicated,camplex, intricate arrangements there are and I guess there are a lot of New­ foundlanders around nmv who still do not understand it, and has to do with the difference between the lease agreement and the power contract. I suppose it would not be a bad idea for me ,r1r.

Speaker, for me to say that obviously back in the early 60's and in the SO's when this great concept was first seriously thought about,that the first action that had to be taken by the government of Newfound­ land was to decide upon whether they themselves were going to try to enter into some kind of an agreement with the private sector or with a corporation for the pursuit of this development and then for the sale of the pmver after it was developed,or whe~her they were going to allow somebody else to do it.

And I think this is the crucial aspect to the whole development, to the whole problem to the whole si tuat·­ ion,and it has been overlooked and this legislation temds to get us back on the rails again to the beginning of this 7 3 •j 2 -.

Decenber 8, 1980 Tape No . 2134 RA - 2 PREMIER PECKFORD : development and it was when this legislature passed

an act t-1hich gave a lea se to CFLCo, a a subsidery,a wholly owned subsi dery then really of BRINCO, :or the development of ~~e Upper Churchill a~d the sale of power :rom the Upper Churchill . That was the key document, ~hat w~s the key agreement, ~hat was the ~ey move~ it was the legis latu re of this Province providing through legislation, a lease to CFLCo. And it was after that lease was given ' that, of course, with that kind of mandate then CFLCo and BRINCO could go the financial markets of the world and go to Hydro Quebec and try to put together the Opper Churchill Falls development .

But the key part of that lease-and so after they did of course go to those financial markets and put it all together and have a development that allowed - in order for that development to get off the ground, CFLCo had to enter into a sale 7 3 i 1 ·.

December 8, 1980 Tape No. 2735 SD ·- 1 PREMIER PECKFORD: of power to be generated from that development Westward in order to make the thing financially viable. So there are two key components to this whole operation, to this whole situation. One is the legislation passed in this hon. House which gave the power to CFLCo to develop the Upper Churchill Falls,and to sell the power once it was developed - two separate agreements, two separate components. But in that lease agreement,long before there was a power contract,

Part I, Clause 2 (

e) of the lease grants to CFLCo 'the right to transmit throughout the Province any electrical power generated as the result of the harnessing of the whole or any part of the Upper Churchill an~ to export from the Province such power: provided that upon the request of the government cons~~ers of electricity in the Province shall be given priority where it is feasible and economic to do so.' So we do not have to go really beyond that because that is where we are corning - this legislation now that I am introducing now comes right back to that basic thing.

And so into the '70s as it became clear that this great energy development, this great symbol of engineering achievement, given the OPEC crisis, given the oil and all the rest of it, that we were really supposedly locked into an agreement for sixty­ five years for selling that power \•lestward at rates around $2.00 a barrel for oil and reducing down to a $1.20 per barrel for oil in the last twenty-five years of the sixty-five year length of that agreement, it became clear to all Newfoundlanders that this was not an equitible, fair agreement.

And it became clear that whilst it can be argued, I think this is the fairness and equity principle which has come full circle on this thing, I suppose with some justification that the initial price of $1.80,and it is even hard to argue that when you get down to it, I think it was $1.80 rather than $2.00 - oil was selling for $2.00 a barrel and the original price from day one to day forty years later was 7 3 ·11l -.

December 8, 1980 Tape No. 2735 so - 2 PREMIER PECKFORD: around $1.80; so even the original price was below its oil equivalent at that time. So even if one tries to justify the original price -there is some problem with it,but let us say there is not a problem with it, that is is close enough, that is around what the price of oil was- where the great problem comes in is that there were, one, no re-openers on that contract - oh, yes, there were re-openers to reduce the price of it from ·. $1.80 all the way down to $1.20, that as time went on and as \ve progressed energy prices would go down,not go up.

So,number one, there were no re-openers at all for renegotiation and/or there was no clause put in there for escalation of any kind.

And I think that is the frustration that Newfoundlanders have felt through the '70s and which was reflected through their government in 1976 when the Government of Newfoundland, after extensive negotiations then with the Province of Quebec and Hydro Quebec to try to come to grips with this, decided that this lease agreement - let us go back to our lease, let us go back to the legislation giving CFLCo the right to develop and sell in the beginning , that surely •provided that upon the request of the government, consumers of electricity in the Province shall be given priority where it is feasible and economic to do so,' and so the Government of Newfoundland took CFLCo to court,and then latterly, obviously, by definition, Hydro Quebec, to say to the court, 'Is it not reasonable for the Government of Newfoundland to say that it has a legimate,legal right to demand power from CFLCo now because we are requesting it', and that is the word used in the lease, 'for consumers of electricity 7.31 5 -.

December 8, 1980 Tape No. 2736 EL - 1 PREMIER PECKFORD: in the Province and that we be given priority and that it is now feasible and economic to do so.

And, of course, the economics and the feasibility of it was proven because of the studies done at that time by the consulting engineers who were doing the work on the Gull Island project and on Muskrat Falls 1but primarily on Gull Island, that it was proven that the technology for transmitting the electricity generated at the Upper Churchill from there by transmission line down to the Straits and across the ocean by cable or by tunnel to the Province and,if you remember, Mr. Speaker, at that time the engineering option that was in vogue was to come across the Straits of Belle Isle i.n a tunnel.

The original engineering design for transmission of Labrador power to the Island of Newfoundland was by tunnel,which was the more expensive of the two modes. It has since become possible and technically feasible to transmit that power by cable which is at least 200 million or more dollars less expensive in the transmission of that electricity. So, therefore, Mr.

Speaker, the 1976 action by the government of the day tried to get the courts to validate our claim that this provision in the lease agreement gave us the right to recall and at that point in time the government put in a figure of what they would need because the lease agreement actually says, 'Given priority where it is feasible and economic to do so.' In other werds,you would have to demonstrate a need and,of course, we have demonstrated a need that by the time that transmission line could be built and brought to the Province,our need would be around 800 megawatts.

Sathe figure 800 megawatts was put into the court case, into the request to the court. 7 3 '16 -.

December 8, 1980 Tape No. 2736 EL - 2 PREMIER PECKFORD: simply to give a specific am- aunt to reflect a tangible need, not that 1ve could only ever recall 800 megawatts 1 but that is all we needed and then from time to time,if that court decision was in our favour, that court decision said,' Yes this does give you the right to recall,' and we could recall, well then at the first instance we would recall 800 megawatts but because sometime in the future we would have more need we cou~d go back and recall from CFLCo whatever it was we could demonstrate we needed.

So if it was another 200, two years from that it was an­ other 500, five years from that and so on you could continue to recall .over time more and more of the energy as you dem­ onstrated need for that energy within the Province. And so that was entered into. Now, simultaneously with that action, because we were frus- trated in negotiations, simultaneously with that action, around the same time, we were still talking to the Province of Quebec. We were still talking to the Province of Quebec and to Hydro Quebec.

We did not just suddenly snuff them out of the picture altogether and say,' Well,fine,we are going to court; and all the rest of it, 1 we are not going to talk to you.' We did not suddenly do that. From 1973 until 1980 we have been talking to the Province of Quebec,but when we got to 1976 we had to start taking some action because for three years it was just frustration where Quebec had said they had no intentions at all of talking about the Upper Churchill. But around that time,when the Parti Quebecois came to power,they once again, like their predecessors, like Mr. Bourassa and Mr.

Cournoyer, who was the Natural Resources Minister in Bourassa's government, the Parti Quebecois showed a desire to sit down and talk again. Here was a new government ready, a fresh start and all the rest of it and they wanted to now get things going to show that they were different 7 3 '! 7 -.

December 8, 1980 Tape No 2736 EL - 3 PREMIER PECKFORD : than the former administration in the Province of Quebec . Anc so they bega~ to talk. And their initial approach was one of saying to the Province of Newfoundland ,'Let us sit down and deliberate, let us sit down and discuss this whole matter of Labrador development: And we said back to tha~. 'Yes that is a good ideaa Let us sit down and do it over again .' There had been some talks and some bitter t.alks between Mr. Crosbie and Mr .

Cournoyer 1 in a meeting they had in Quebec Cit y there had been no agreement> there had been different reports of that meet- ing. 'Let us sit down and start all over again.' And that was at a time when M. Guy Joran was the Energy Minister in the Parti Quebecois Government. He is no longer the Energy Minister now , he is the Minister of Co -operatives, I think,in the present government in Quebec . He was then Minister of Energy . 7 3 'l A -.

December 8, 1980 Tape 2737 EC - 1 PREMIER PECKFORD: So it was agreed between the First Ministers of the two provinces that the Energy Ministers should sit down and discuss this matter. So even though we had,because of our frustration three years before that, for those three years tried to do something, we decided that we had a legitimate interest here under this lease agreement, so we began court action. Simultaneously, a new government came in Quebec and we sat down and we started to talk.

So our initial meetings were along the lines that, 'Well, we want to look at this whole matter now of Labrador power developments. We want to look at the Lower Churchill, we want to look at the Upper Churchill, we want to look at the Five Rivers.' And the word and the phrase which the Quebec Government used at that time and continued to use was, 'Okay, we will take a global approach,' -a global approach meaning, ~1d we asked them what they meant and said, 'If you mean this, fine, that the components are at least the following three: Lower Churchill, Upper Churchill, Five Rivers.

That will do a fair job on giving you a Labrador power strategy. There might be other rivers and other water to develop. That will give you the major components of any strategy. Fine.' But they came to· be in the order of Lower Churchill, Five Rivers and Upper Churchill, the third one being the Upper Churchill. So we sat down and we started to talk and negotiate.

We had our technical advisers from Hydro Quebec and Newfoundland Hydro sitting down at the same time until ',ve had all the data that was possible to get exchanged ~etween the two corporations on the costs, on the feasibility, on whether it would be cable or whether it would be tunnel, how you could linkthe Romaine and whether it would be diverted into the Upper Churchill reservoir into a separate power house, the whole bit, everything that 7 31 9 -.

December B, 1980 Tape 2737 EC - 2 PREMIER PECKFORD: it was possible to get was put together over a year, I guess, or more, and we kept talking. And finally 1ve had as much information as we could possibly garner together on the Lower Churchill - on the Gull Island first and, well, we had decided that on Muskrat Falls a more technical feasibility would have to be done. Up to that point in time, there had not been a technical feasibility done of Muskrat Falls - Gull Island, yes, there had been. And we had a good, firm handle on the costs and both engineers and economists of both governments agreed.

On Muskrat Falls, no, there would have to be a separate one done, but that would be the second one an~vay. Meanwhile, the Five Rivers. Could you do anything more on Upper Churchill to generate any additional amount of power? Could you do a Ro~4ine diversion back into it? And how about some of thos~ five rivers? That was all gone into. And then was introduced at that point in time the third component, this Upper Churchill situation.

Hydro-Quebec and the Quebec Government insisted at that point in time that 'No, we do not want to talk about the Upper Churchill.' 'But you had agreed a year ago that there would be three components because you talked about a global approach, and let us try to work out some kind of an arrangement based upon this, your desire to get additional power from us' and all the rest of it and the business of the Upper Churchill.

We insisted through this whole year or more of discussion that we go into these discussions under the ·.mderstanding that there must some day be recognized a principle that the people of Newfoundland should have the same rights as the people of other provinces to transmit their energy products and that the National Energy Board really should be the agency. 'If you want to talk we will see what colour your faces are and what kind of 7320 -,

December 8, 1980 PREMIER PECKFORD: HR. NEARY: PREMIER PECKFORD: 1978. Tape 2737 EC - 3 thing you are going to put forward.' When was thi:::? This was from 1976 onward, 1977, And there was no agreement reached because there was not only a reluctance, there was a position on behalf of the Government of Quebec that they did not want to look at the whole Upper Churchill situation, besides which they were not prepared to recognize that a principle was at stake here that had to do with hydro transmission being treated the same as oil and gas transmission. So it did not amount to anything more than that.

We compared notes and it carne down to a very serious disagreement over whether anything should be done with the Upper Churchill situation and all the rest of it. All that Quebec said was, 'We will let the court case take its course.' Now, in the meantime, this court case was ongoing during those two or three years and every possible, conceivable, imaginable procedure or obstacle was put in the way of that court case and has been since 1976 to 1980. So during 1979, after talks had broken off in 1978, we continued still to talk to Quebec in a general way, right up until this present year.

After I became Premier of the Province, I talked to Mr. Levesque on many, many occasions about the whole question and there have been communications back and forth and talks and so on, but there has been no agreement on it. Then, entering into the whole equation carne the constitutional discussions an~ the whole question that if we are going to rearrange this country and make massive changes, well, we had better re-write, 7321

December 8, 1980 Tape No. 2138 NM - 1 PREMIER PECKFORD: right some wrongs from the old constitution, and that is the whole question of transmission principle, which then becomes extremely operative. Because if you are going to change the constitution,let us give us the same rights for the transmission of our energy products as you give other provinces for their oil and gas transmission. And then we decided last year, Mr. Speaker, that we better try to put all of this together. We have a serious problem.

We have had to build 150 megawatts at Holyrood, oil fired generation, thirty or thirty-five mils or more per kilowatt hour and rising. It might be up to forty now. That we had to build a Hinds Lake, that we had to build an Upper Salmon, total amount of money about $318 million, that we have had to spend in this Province to replace really what should be rightfully ours in the beginning, and that is the water at the Upper Churchill. The taxpayers in Newfoundland have had to raise $318 million through Newfoundland and Labrador Hydro.

So we decided that we should take a very rational, logical approach to try and to look seriously at this whole problem from a legal point of view, and so we have appointed a task force. Meanwhile,Newfoundland and Labrador Hydro, plus their legal counsel here in Newfoundland, Mr. Greene, plus advisers to Newfoundland and Labrador Hydro from other parts of the world had already examined in the minutest detail the lease agreement and the power contract, and it had been their decision, you see, Mr.

Speaker, up to that point in time, that we should move, and we should move and in '76 they had decided to move and use that lease condition as the way we should go. Our problem is now in 1979 and 198~ that we were going nowhere with that very legitimate court proceeding, that it would take 7322 -.

December 6, 1980 Tape No. 2138 NM - 2 PREMIER PECKFORD: another five, six, seven or eight years, nobody will give us anything better than five or six years from this day, from now, before we will have an y decision from the courts by the tilre it goes up through the various courts to the Supreme Court of Canada, which it must ultimately go to.

And so we established a task force now of Ne11.rfoundland lawyers, let us get the best minds that we have around, put them on a task force, let them go to work on this problem, examine over again from a Newfoundland viewpoint, Let us just not take the view of the solicitor for .'l:e wfoundland Hydro who is a Newfoundlander, let us just not take the view of the ~hree or four internationally reputable law firms who have looked at this, but let us now throw all of their research, let us throw all of their ideas, let us throw all of their legal opinions through the minds of Newfoundlanders who live in NewfotL>J.dland, let us throw all of that through them plus let them think about it as well.

And so we established a task force and over a year or so they spent a lot of time doing their work and trying to make recommendations to government. And it is only then, Mr.

Speaker, out of talks for seven years, out of a court case ongoing now for four years with the predication that it will go on for another five or ten, that we have concluded as a government that we must now - given our energy needs over the next five, ten, fifteen years- that we must move now in an additional initiative to try to shorten the time period when we will have a decision on what we believe is a legitimate argument of ours, that we have the right to the power which is within the boundaries of the Province of Newfoundland and Labrador, and that therefore we hav~ through this new legislation, albeit that the lease itself has a condition in there for recall based on need, that because that is going to be outstanding the court for such a long 732.3 -.

December 6, 1980 :;rape No. 21 38 NM - 3 P~ER PECKE'OlU>: period of time, that if this Legislature, Her Majesty's Legislature has the r;i:ght to pass legislation providing a lease in the first instance, then it surely has the right to repeal that lease in the second instance, especially after we have tried to negotiate, we have swallowed our pride and our principles on transmission for years and tried to negotiate both with the Lower Churchill and the Five Rivers, and with the Upper Churchill, and that we have put in the courts a legal argument that is based upon the condition of the lease, all.to no avail and if we let the normal course of events take th.eir toll we will not see any significant changes to the lease or the power contract for a long, long period of time.

So therefore, '#e think 732 h

December 8, 1980 Tape No. 2739 DW - 1 PR&~IER PECKFORD: we are not only justified that we would not be living up to our responsibilities as legis­ lators and as leaders of the Province if we did not at this point in time introduce this piece of legislation which effectively repeals the lease that this Legislature gave in the first instance. Now, Mr. Speaker, we did not do that - MR. S. NEARY: Will you answer a question for me? How come it cost $318 million - MR. SPEAKER (Butt): The hon. member for LaPoile. MR. S.

NEARY: - to attach these water rights in the Lower Churchill when we were told in the beginning it was $165 million. I do not understand the figures. PREMIER PECKFORD: S318 million is how much it cost to build a thermal unit at Holyrood,plus build Hinds Lake,plus build Upper Salmon~which we would not have had to build if our legitimate rights to recall on the Upper Churchill had been recognized.

So we have had to spend an extra $318 million that we would not have had to spend if we had those ~~ghts under the condition of the lease recognized before now, because we would have accessed by need that $318 million worth of power from the Upper Churchill.

But because the court case is lumbering alonq - well, lumbering along because of the procedural wrangles that are being placed in its way - then we have had to in the meantime borrow $318 million to keep the lights on all over Newfoundland with the Hinds Lake and Upper Salmon and 150 mega\'latts at Holyrood >'lhich we would not have had to build had we had the legitimate access that we desired through the condition of the lease in the lease agreement of the legislation that was passed here in the late '60's. That is the point. 7325 ·.

December 8, 1980 Tape No. 2739 DW - 2 PREMIER PECKFORD: So here we are here today, Mr. Speaker, with this legislation saying that we have as a Legislature of Newfoundland and Labrador no other alterna­ tive. We reluctantly have come to the conclusion we have no other alternative in the best interests of Newfoundlanders but to try to use an additional action which will trigger some decision hopefully,and we believe confidently,in our favour. Now, there were a number of routes we could have gone, Mr. Speaker, there were a number of routes.

But this route was chosen primarily because it was the oven~helming cqnsensus among those people who advise the Government of Newfoundland and Labrador. This was the consensus,that this route had the most chance of success and seemed to be the one that we should move on at this time. Of course, it was only after very serious considera­ tion we did it. Now then, Mr. Speaker, as soon as we made a decision that we '"ere going to act additionally from what we have already done over seven years in negotia­ tion through a court case started in 1976,then we had to be sure, Mr.

Speaker, that 1.;hat we were doing 1.;e could stand the light of day. So then we had to ensure obviously that those people who helped build that magnificient project were going to be covered, that what we were doing was legal, that we were not going to be looked up as some banana repub­ lic trying to do things retroactively which you really can­ not do, that we were not being irrational in our approach 1 and so that is why we took that whole year of a legal task force to do it.

So we have built into the legislation three import- ant corn9onents which I think orove the rational, logical approach and yet dramatic approach that we are taking. One is that we have said that once this legislation is approved­ and hopefully it will be done very shortly because we want to refer this directly to the highest court in Newfoundland. 7326 ·.

!. December 8, 1980 Tape No. 2739 DW - 3 PREMIER PECKFORD: We cannot refer it to any other court, Mr. Speaker, we do not have the power. If we could refer it directly to the Supreme Court of Canada, because that would speed up the time,we would do it. But as a Province we do not have the power to do that. We can only refer it to the highest court in the Province,so it will go to the Appeal Court of the Supreme Court of New­ foundland for an ajudication as to its legality. And then once that that court has ruled on it,we will automatically have it appealed to the highest court in ·Canada.

So before any action can flow from this legislation 1 it has to be tested by the highest Canadian courts. So,number one,we have shown our •responsibility, our sense of fair play, our rational approach by ensuring that its legality is unquestioned by the highest courts in Canada. And,secondly, we had to cover obviously those people who put a lot of money up front for the development in the beginning.

So we have indicated that those financial institutions who have invested into this Upper Churchill project and on which now there is $400 or $500 million outstanding,that if this is proven to be legal then we intend to act on it, but we will act in such a way that the investors can either have their money that they are owed or they can agree to a second option and that is to take out new bonds under the new agency which would then have opera­ tional control and management of the Upper Churchill Development. One or the other, 7327 ·.

December 8,1980 Tape No. 2740 AH-1 PREMIER PECKFORD: they can have the cash or they can have it in new bonds on that development, one or the other. And thirdly, we had to ensure that the shareholders of the company,CFLCo, were also protected because when you are going to take an action like this,then obviously that company most effected must be protected as well.

So we believe that we have in the body of this legislation provided sufficient guarantees, sufficient assurances to the financial community, to the legal community, to governments generally that we are acting in a responsible,rational manner but always in the context of that we believe as a government, we believe as a party, we believe here that this legislation,duly co~stituted under British law,has the ~ower within its boundaries to manage and control the resources within its boundaries and that includes the water that flows in Labrador. So, Mr.

Speaker, there is the ~leton, if you want, there .~re the major components from my point of view of the whole situation. One, the whole question of we have as a government,even though all Newfoundlanders recognize this to be now an unfair situation that we cannot tolerate for 61 more years under the power contract. It actually goes dow~ , I think, from just under 3 mils to 2.5 mils in the yea~ 2016,and then from there down to 2 mils in the last twenty-five years.

So it goes down to $1.20 per barrel of oil anyway, to a ridiculously low figure and it is equal to about 50 million barrels of oil annually,which is a lot of energy. In any case, Mr. Speaker, there it is. Now, I mean, to add credence to it,if any more credibility needs to be added to the unfairness and the inequitable situation that we find ourselves in,just about everybody in Canada was really surprised to see, as a matter of fact, one of my sort of 7328 -.

December 8,1980 Tape No. 2740 AH-2 PREMIER PECKFORD: arch opponents in Central Canada, the Ottawa Citizen just a couple of days after we introduced this legislation,or at least announced our intentions to introduce this legislation because we are only introducing it, I guess, today through the Ministerial Statement at that time, that even the Ottawa Citizen,in the home of Central Canada -if ever there is a paper which reflects the viewpoint of Ontario and Central Canada it has to be the Ottawa Citizen-and even then in a very, very long editorial acknowledged not only that this was an unfair situation and that the Government of Newfoundland was quite justified in taking the action it was taking ,but it even went a step further - I guess it is due, I would like to think it is due to some of our speeches up there and talks with the Ottawa Citizen and their editors last year when we talked to them about this whole question of constitutional change and the transmission principle~ they went on to say not only is the Upper Churchill an unfair situation and something has to be done to rectify it,but in addition that the Government of Newfoundland is being frustrated from getting on with $8 billion worth of construction on the Gull Island and Muskrat Falls because they are not being treated like other Canadians and allowing their electricity to go through Quebec in the same way the gas pipeline goes through Quebec.

So when you get that kind of support from the hot-bed of Central Canada,then we either should be extremely scared and run away and not do it,or otherwise take the bull by the horns and say, well, at last we have been able to convert some of our worst enemies,that we do have something fair and reasonable to say and that we are not crazy, outlandish people who somehow are asking and are pleading for something very selfishly and which they really do not have any right to at all. That is the justification, that is the real justification for me when you see that kind 7329 ·.

December 8,1980 Tape No. 2740 AR -3 PREMIER PECKFORD : of thing. Anc I think it is fair to say the Economic Council of Canada in thei::- report even had to recognize the ~~fairness of this situation, the gross U.''1fairness of it .. So here \ofe have it , Mr. Speaker, we are moving .

Nolof obviously , as •..,re have sa id, since the legislation 1-1as introduced it 1o1ill take, we do not know, we hope, a coupl e of years, no more than a couple of years before the courts can adjudicate o~ this because it is so important for our future. su ·t in any event we are taking another bold step to t~y to r~ght what we believe is a wrong, to try to manage differently in the future what was managed wrongly in the past, to try to bring so me sense of fair play and ju stice and t:O give Newfoundland ers a chance not only to keep ligh ·ts on at a reasonable price 73 3n ·.

December 8, 1980 Tape No. 2741 SD - 1 PREMIER PECKFORD: but to stimulate inaustry, to provide dollars in our pockets, to do other things that we would like to do. That is the great thing with hydro power, it is just not a matter of trying to meet your electrical demand and see how many more megawatts you are going to need next year. Hydro power of this magnitude, of this amount means the difference between Newfour,dland bein·; a have Province and a have-not Province, that this can trigger so man~· developments .in our Province that it is not even funny. It just boggles the mind what you can do with this.

And it is all linked in with managing your resources.And just imagine today, Mr. Speaker, what our position - we are in a position of power as it is now, there is no question about it,when you can shake the various stock exchanges with the least bit of a rumour as relates to Newfoundland these days-but just imagine the position of power we would be in today, M~. Speaker, if in fact we were getting a fair deal, a fair amount of economic rent from that resource, what a ?OWerful force we would be in Confederation~ Talk about building roads to Raleigh and to St.

Lunaire or Griguet or to Cape Onion or to build a road from Lodge Bay to Mary's Harbour or to do the Strait's road or to do anything el~e - just imagine what we could not do for our people! l'Te would almost be seventh or eighth in Canada. Just imagine being seventh or eighth., I said to a gentleman in Ottawa some time ago when I worked out the mathematics for him; you know, it is like the Hibernia thing, even under the best scenario it would have been 90 per cent of world with our regulations applying, we might have a chance of being have for the ninth, tenth and eleventh years of a twenty year development.

So we would have three years, not in the sun, we would have three years in which we produced just as ~uch goods - $400 million worth- as we are now setting in Ottawa V.Je ·.muld 7 3 3 ., ·.

December 8, 1980 Tape No. 2741 SD - 2 PREMIER PECKFORD: be equal to what we are no~,the only difference is is that $400 million of the $1.3 billion would be created by ourselves. We will be no better but we would be proud because we created it ourselves, that is all.

And I was telling this gentleman at the time and when you work •·d.th all the mathematics what we are saying is that with a decent kind of arrangement on the Upper Churchill,with our oil and gas resources being treated the same as other oil and gas resources in Canada with these I things applying we would have a chance.And please stand back,' I said to him,' Please stand back because this is going to knock you down, this is going to bov1l you over because we will show you just how selfish we are being, how greedy we are being: This will mean that perhaps in fifty years we might be number seven in Canada as it relates to per capita earned income, as it relates to all the other economic indicators; we might.' And that is the kind of criteria, that is the way you have to put it to a lot of people in order for them to understand that all you are asking for is an equal chance and equal treatment.

Hopefully these kinds of measures will lead to that eventuality, Mr. Speaker, and allow us to keep our heads up high and to be equal Canadians in every sense of that word. I am very proud to introduce this legislation today, Mr. Speaker, extremely proud. We are asking for fairness and equity on a situation that has existed over which we have tried every other way to solve it.

We are saying to those people who invest in our Province, 'You will be protected and we want you here in this Province for years and decades to come, we want you protected. ' And we are saying to the people who own and are part of the company that developed it!You are going to be protected, too.' And before we do any of those things we will ensure that it is legal. How more reasonable approach to an 7332 ·.

December 8, 1980 Tape No . 2741 SD - 3 PR&~IER PECKFORD: absolutely unbelievable situation as it relates to our resources can a government be, how more rational , how more logical , how more sensible can \~Te be.

Meanwhile we labour in inequality, 1~7e labour in. being number 10 in Canada, we labour in not being able to build all the roads we want to build or build all of the schools, \ve labour as number lO;and even in that labouring and even •.vhile we suffer that i .ndignity ,we are saying even though we are in that state, we will be rational and we will be logical. itnd we will let the power of our methodology, the power of our way o£ doing things, the power of our rationality, demand that somewhere along the roac a year from novl or two years from nO\v, justice will be done to Ul? 0n one of the most unfair, unrea .sonable situations that any society in this world has ever faced .

I move it. SOME HON . M!:i'!BERS : Eear, hear. 7333 ·.

December 8, 1980 Tape No. 2742 E:G - 1 MR. SPEAKER (Butt) : The han. the Leader of the Opposition. SOME HON. !-1EMBERS: Hear, hear! MR. STIRLING: Thank you, Mr. Speaker. As I indicated when I re-sponded to the Premier's com."'tle:tts, I hoped he would give us the information so that we could support this bill. I am still hopeful that we will be able to get that information. As yet, we have not received the information and although the Premier went into a lot of the background, he did not really come to grips with two or three of the main questions. Because we have to make up our minds, Mr.

Speaker, in looking at this legislation, putting it in that total context, are we really saying that the whole pur­ pose of this legislation is to force Quebec to negotiate? Is it as a result of all the frustrations and the legal battles? For example, the last frus­ trating step made by the government, as I understand the Premier to say, was to take action in the courts in 1976.

The Premier did not say that it was in the Newfoundland court that this.action was taken and that- I am not a law­ yer and I would not try to move into that territory,but I understand that even the most junior lawyer could have fore­ seen all of these kinds of things that would have been thrown in the way by Quebec - very basic, normal, natural ef- forts to postpone any action in the courts. So at the time -~- -- - that they did it they could have foreseen ~11 these delays. Now, is that poor planning, poor advice, utter frustration or just a need to be seen by the public as doing something?

I remember three by-elections that were won in those years on the basis of, 'Give us a strong mandate so that we can show the people of Quebec that we mean busines~ and then that is the last we heard until this latest, greatest effort. MR. WARREN: election. Maybe there ~ill be another bv- 7334 -. :

______ ,., __ --- -· December 8, 1980 Tape No. 2742 EL - 2 M.~. STIRLING: Now, Mr. Speaker, the Premier is very concerned about his reputation that is abroad, very concerned about articles by people like Charles Lynch, who say that he believes that he is a separatist but he is not the only one and privately so does Premier Hatfield and the . Premier of Nova Scotia and that the press reports that came back from London showed him waving his arms. He is so con­ cerned about that image that this is being brought into the ~ouse and saying now, look,just to be sure, we do not want anybody to be overly concerned.

We have got the Finance Minister (Dr.Collins) down talking to the financial people and we have the Minister of Energy (L. Barry) down talking to the fin- ancial people and,listen, do not be afraid of this legislation because before we do anything with it we are going to submit it to the courts. The question that the Premier has not answered, and he has not even, guessed.at .is how long is it going to take, how long is this method going to take before it gets through the courts. And really what is the pur­ pose of it?

Is the purpose just to force Quebec to negotiate or is the real purpose, the purpose that was set out in the original lease -it is very interesting how they have gone back to that original lease, and say,look, there was nothing really wrong with that contract. That whole concept that Newfound­ land came up with with BRINCO, there is nothing really wrong with it because they said'provided that upon the request of the government consumers of electricity shall be given priority where it is feasible and economic to do so.' So they are going back to the original lease. And the real question, Mr.

Speaker, that the Premier has not dealt with is are we say- 7335 · .

December 8, 1980 Tape No . 2742 EL - 3 HR. STIRLING: ing to Quebec that not only do \ve want the 800 - and as the Premier said, that happened to be a figure that was \vorked out as being economically fea s­ ible - but a:re 1ve saying to Quebec in t.."lis legislation that the aoo is what we can now prove that we need and three years from now we •t~ant another 200 and five years from that another 500? Are we really saying to Quebec in this legislation we are going back to our original intent and the original inte.nt in the lease , as the Premier puts it out in his material, Mr . Speaker , the original intent was to develop that water into electricity to allow BRINCO to export it, 7336 ·,

December 8, 1980 Tape No. 2743 EL - 1 MR. STIRLING: but always Newfoundland had the first priority. Is that really the intent of this legislation' because ~he Premier has not told us which way he is going with this legislation. Is it just one more frustrating at­ tempt in his long list of attempts to get Quebec to neg­ otiate? Mr. Speaker, let us try to put this in its total context, the total energy context. For the future of this Province -and,by the way, it was not too long ago when this Province was talking about the first development .would be in Newfoundland, in Newfoundland and Labrador.

None of this was going to be exported, Mr. Speaker. First when I came into this House,the Minister of Mines and Energy (L.Barry) and the Premier would not hear of one kil- owatt being exported, not a kilowatt, it was all going to be used in Newfoundland-And now we are talking about,well, Muskrat Falls might be used in Newfoundland,or half of the Gull Island development might be used in Newfoundland,and the rest we now want to transport through Quebec. Mr.

Speaker, the Premier has good cause to be concerned about his reputation elsewhere be­ cause people read his various statements and from one day to the next you are not sure what he is talking about,because in the very hasty resoluti~on that was brought before this House - it was drafted twelve o•clock or three o'clock or something. It was not ready six o'clock and it was in the House the next day. The resolution on the Constitution, the government in that resolution calls for the free transport­ ation of electrical energy across neighbouring provinces. Is that what you were looking for, Mr. Premier?

Because the stories change, the sto=ies change. In the five year plan, 7 3.3 7 ·.

December 8, 1980 Tape No. 2743 EL - 2 MR. STIRLING: this wonderful five year plan, which is als·o the government's programme, the five year plan says, 'To enable Newfoundland to move energy for a reasonable fee over Quebe.c' s transmission system. ' That is what it says in the five year plan.

And the wild exchange of messages with Ottawa calls for a power corridor,so what is - you cannot really be surprised that people trying to get a long range view of what Newfoundland is looking for, as expressed by the present Premier, you have to be concerned about why they have difficulty saying, Oh, this is what he really means, because to the Prime Minister,he will not accept the fact that the Prime Minister writes him a letter and said, look, we are with you. Tell us what you want done. Now, give us some agreement, what is the problem and we will help you transmit you~ energy across the Province of Quebec.

Do you want a power corridor? Or do you believe the resolution, the resolution on the Constitution?~hat hysterically drafted resolution said free transmission across the Province,and the five year plan says to move energy for a reasonable fee over Quebec's transmission system. MR. WARREN: That is three concepts. MR. STIRLING: Three stories. Three concepts And I suppose if you look at three more documents you will find three more di£ferent approaches because it is a question of what are we going to do today, the frustration. We made a recommendation, we made a recommendation, Mr.

Speaker, on Friday that said in the total concept if we are going to go with the recall and we are going to get 800 magawatts back tomorrow, or we are going to go with the Lower Churchill development, they recommend Muskrat Falls or if you go with the five year plan that is talking about Gull Island, whichever one you go wi.th it is still going to be five years away from 7338 - ·.

December !!, 1980 Tape No. 2743 DN - 3 MR. L. STIRLING: getting the use of that power unless we start now on the transmission facilities. And what was the response to the media by the Minister of Mines ane Energy (Mr. Barry)? Was the response, 'Oh, well, ~e do not ~eed to worry about Gull Island or Muskrat Falls because we are going to get this 800 megawatt power back on the Upper C~urchill, no problems there'. No, that was not the response from the ~tinister of Mines and Energy. 733 g ·.

December 8, 1980 Tape 2744 MB - 1 MR. L. STIRLING: What was his response? His response was, well,the financial cornm~~ity is not going to put up any money until we have made a decision as to which source we are going to use. After delivering this to the House of Assembly and saying here is the final answer we are certainly going to get back our 800 mega­ watts of power, no fooling around,it might take a year or two, but he does not have enough confidencel maybe the Premier does not have enough confidence,in this latest piece of legal-whatever it is. SOME HON. MEMBERS: Oh, oh! MR. L.

STIRLING: Legal attempt,whatever that is. Maybe none of them have any confidence to say,okay,let us have the transmission system started because we are con­ fident that this time we are going to be successful. Last time , true , we acted like a bunch of amateurs. We went to our own Newfoundland court, took our own selves to court. By the way,I noticed that the Premier did not mention as one of the alternatives when he took a look at it,and he did not spell it out,he just sort of touched on it carefully. Let us look at the facts of the matter: fact number one, CFLCo was owned by BRINCO.

CFLCo came to the Government of Newfoundland and got a lease to develop the Upper Churchill. And by the way,the Premier in one of his -this is just an aside, just a reminder;the Premier might want to make a note of it. When he was running for the leadership of the party, there was something so dark and sinister in the Upper Churchill at that time that he was going to have a commission of enquiry.

He had some little tidbits that he wanted brought out and there was going to be a co~~ission of enquiry just as soon as he got elected; just as soon as he became Premie~ a commission of enquiry and then after he was elected said, well, you know we will get around to 7348

December 8, 1980 MR. L. STIRLING: MR. NEARY: do that. MR. WARREN: MR. L. STIRLING: Tape 2744 MB - 2 that one of these days. Cabot Martin told him not to That is almost two years ago. Mr. Prernier,I wonder what ever happened Mr. Speaker, whatever happened to that commission of enquiry or the royal commission to look into all aspects1 Now, let us ge~ back to the BRINCO deal. ~vhat the Premier is telling us is that BRINCO had a lease. BRINCO through CFLCo had a lease.

Go ahead and develop this,but if we ever want to get it back based on the feasibility,when it is feasible and economic to do it, we are going to get it back. So then what did this government do in their first frantic frustration of saying, 'We have got to do something, we better do something .The people out there are saying that this PC government has been in office since 1972 and done nothing-We better do something. What will we do? Why do we not nationalize CFLCo;'so they did. But now we are in a position of taking ourselves to court. We are taking ourselves to court.

The Newfoundland Government, the Minister of Mines and Energy (Mr. Barry) takes themselves to court. And then Mr. Vic Young, as CFLCo, says,'No,boys, we are not giving you what you want.' Now,the Premier never touched on the fact, never touched on the fact,that when we gave the original lease, the Government of Newfoundland, 731.1 ·.

December 8, 1980 Tape No. 2745 IB-l MR. STIRLING: and then CFLCo went on and made a deal with Quebec,that did not bring into it the terms of the original lease. CFLCo made a mistake. CFLCo did something they were not allowed to do. CFLCo did not protect Newfoundland. So what is our option? We could have taken CFLCo,then owned by BRINCO ,to court,and then we would have a multibillion dollar outfit to sue. But right now,because of the anxiety of the government to be doing something, anything, we now have a situation where we are taking ourselves to court and of course CFLCo has not got any money.

And then when you mention that to them they say, "Well,now,okay, there is provision that if CLFCo has not got the money,Quebec Hydro can take it over and you might see the Fleur de Lys flying over CFLCo. Forget the. first mistake." And now, Mr. Speaker, we are in a position of saying, 'Okay, put that aside. We are now going to take back the original water rights.' And, Mr. Speaker, I hope that this succeeds. I honestly hope that this succeeds.

But based on this government •' s past record, we may be in for another four or five years of legal entanglement if on something as simple as the first one they have been in court now for four or five years and got another four or five to go. What indication does the government have that this is ever going to be settled by the court? Because they have indicated to their bond holders that they will not do anything until it gets settled by all the courts, all the appeals and then to the Supreme Court. Now, Mr. Speaker, I think the government has got to make up its mind.

Either this is a bluff- and if it is a bluff we might just as well admit it; Quebec Hydro are the only people who you have to be concerned with the bluff - if this is a bluff as is indicated by the Minister of Finance (Dr. Collins) because I asked him, "Okay, have you got the money in place? Have you been down to see the financial people? Are you going to buy them out?". And 7342 ~

December 8, 1980 Tape No. 2745 IB-2 ~1R. STIRLING: the Finance Minister (Dr. Collins) says, "Oh, this is years away. You do not need to worry about getting the money in place now, that is years away, not a problem nov.1!' I mean 1 I do not know who they are trying to kid. Or maybe it is again the Premier getting a reading, 1Boy, look the people really do not care what we do as long as 'l<.'e do something.

Let us bring in a piece of legislation and let us get tough and let ~s tell them, boy, you know, if we got the authority somewhere ten years down the road,and we stamp and bang our heads and all that kind of stuff,we may be able to pull the switch on you fellows, you crowd up in Quebec trying to take our resources. MR. NEARY: He •-•as low on interviews that week. MR. STIRLING: Now, is this what it is all about? Because, Mr. Speaker, this government is establishing itself quite a recnr~ of creating false expectations, of building people up, You just heard the Premier. I could not believe it.

I think we should get it out of Hansard and run it through whatever propaganda machine is pumping out those misleading advertisements, the full page ads. Did you hear the Premier - I may have misunderstood him and maybe he is going to be back tomorrow saying, 'Well, that was only for the benefit of the mainlanders up there' -but what he said is that if we get back the Upper Churchill and if we get Hibernia,in about fifty years down the road Newfoundland will be number seven. SOME HON. MEMBERS: MR. NEARY: MR. STIRLING: Maybe. Will we still get the equalization?

After creating the impression in the minds of every Newfoundlander that we do not know what he is up to but let us trust him, let us trust the Premier because he acts a little bit like Joe Smallwood and we found we could trust Joe Smallwood, so let us trust him. Let us trust him now to do something and we will follow him. Let us see what he is going to do. 7343 ·.

December 8, 1980 HR. NEARY: finger. MR. STIRLING: Tape No. 2745 IB-3 Joey got more of a rean in his litt~e Let us see him now produce. 73~L

December 8, 1980 Tape No. 2746 DW - 1 MR. L. STIRLING: Like ' the fishermen last Summer, the fishermen who were expecting last Summer that this Premier, this agressive, forceful Premier,who fights with everybody - 'Give me more responsibility, give me more jurisdiction',off to London, wants more jurisdiction f~om Zurich or Switzer­ land or anybody who he can get jurisdiction from, anybody he can meet with; take on Ottawa, take on Quebec - but this little fisheries strike, having to do with the only thing under their jurisdiction, the control of the fish plants, what did he do with it?

He waited and waited and waited and then finally when the fish all swam back'to wherever they come from,he agreed to do what the fishermen wanted done two months before the strike-set up a Royal Commission. Now, Mr. Speaker, in doing some of the research on this whole question of the energy, if we take it serious, if we say, 'Yes, the Province is not just running a bluff, not just trying to do a mother­ hood thing,' trying not to just say, 'Okay, is every New­ foundlander in favour of Newfoundland getting a fair deal', and every Newfoundlander and every Labradorian is, but, Mr.

Speaker, in checking it over, doing some of the research on this total concept,it is very obvious that Newfoundland does not have a nickel~ Newfoundland 1 for all of our great and exciting promises of the future - it says that Newfoundland, 'even an indirect exposure of Newfoundland's credit to a risk of this magnitude,would result in Newfound­ land itself being unable to issue any further debt for its ongoing requirements.' In other words, Mr.

Speaker, that this is such a massive total concept, the business of bringing that energy to the Island of Newfoundland, to developing it in Labrador~ we are only kidding ourselves. And the Premier is being most unfair to people if he does not admit what the Lower Churchill Development Corporation 731.5 ·. ';.

December 8, 1980 Tape No. 2746 DW - 2 MR. L. STIRLING: admits 1 and that is the only way that this can be developed, the only way that the total energy concept, the transmission to the Island of Newfoundland, the only way that that can be done - even for the smelter - the only way that that can be done is with a guarantee from Canada. It does not really make any difference, Mr.

Speaker, The Premier should admit,because people are trying to believe in what he is saying, the Premier should admit that unless Ottawa is prepared to introduce special legislation to give the kinds of guarantees that are required for the Lower Churchill, either of the Lower Churchill develop­ ments, either Gull Island or Muskrat Falls, neither one of those developments can go ahead, Mr. Speaker, without the absolute guarantee of Ottawa. I am not very proud as a Newfoundlander to have to admit it,but it is phony to try to pretend that it is not true.

And no wonder the Premier walks out and cannot sit and take it anymore because the reality of what he is saying to people in creating these unreal expecta­ tions is unfair to those people. It is unfair because in a moment as an aside he tells us the truth,is that even with Hibernia,and even with the Upper Churchill,and even with the Lower Churchill, that Newfoundland is not going to blossom tomorrow into a great have province as he has been promising, just give it to hLm and he can guarantee it. Because the truth of the matter, Mr.

Speaker, is that we have to get away from this high­ falut.ing dreaming that is going on and level with the people of Newfoundland,and get on to creating some jobs and get on to the developing of the fishery and get on to further pro­ cessing in the fishery, and get on to, for example, starting this transmission line. That can create 2,000 or 3,000 jobs 7348 ·. ~

December 8, 1980 Tape No. 2747 SD - 1 MR. L. STIRLING: within the next twelve months. So either, Mr. Speaker - P_N HON. "1E..li.\BER: It is the same difference. MR. L. STIRLING: - at the moment it is. Even, Mr. Speaker, if we were to get the okay tomorrow,if Quebec came out tomorrow and said, 'Okay, you can have your 800 megawatts', it is not clear from this legislation is that what we really want.

Because it seems to be saying on one hand that we want to exercise our rights under the water lease,and if we are saying that we are now going to take back that lease what we are in fact saying to Quebec is that we are tearing up the original deal. It is true CFLCo and Hydro Quebec have a one-third interest~ it is saying, 'It is true that CFLCo that we did give you a lease and we are now taking it back.' We have to be very careful. No wonder the Premier is concerned about his reputation,and I do not know if the Finance Minister (Dr. Collins) is still in New York AN HON. MEMBER: He is gone. He is gone. MR.

STIRLING: -but the problem, Mr. Speaker, is that unless this Province is very careful -it is not just a legal problem, we are going to submit it to the courts for a decision as to whether or not we · have the right to tear up an agreement that we made a few years ago. The question is,what is going to be the effect on the financial community? Will anyone ever make a deal with Newfoundland again? And I am sure that the Minister of Energy (Mr. Barry) was very very concerned about this.

Will anyone ever make a deal with Newfoundland again because if we do not like the deal three years or twenty years or fifty years later, are we going to tear it up again? So, Mr. Speaker, the Premier has referred to a number of other alternatives but he has not presented those alternatives. He said that there were other 73~7 -. -;

December 8, 1980 Tape No. 2747 SD - 2 MR. STIRLING: things,maybe not as dramatic, maybe not as drastic~ And now with the federal government prepared to give us the right to indirect taxation, maybe that is another alternative that should be looked at. And when the next speaker gets up for the government side, I hope that they will answer some of the questions. Some of the questions that we need to ask are; What are the alternatives? Did the lawyers really recommend this? Did they say, well, look, go ahead with it but your chances of success are 50/50, 80/20, 20/80?

I think that those figures, that kind of information, this House should have. Also from the financial community, do we have letters from the financial houses that <say, 'Well, it really is not going to affect your credit rating?' Do we have a guarantee from the bondholders that they are not upset about it? So far we only had it verbally that there was no need to be concerned. Mr. Speaker, everybody on this side of the House would like to see that Upper Churchill re.~~ted, but more important, Mr.

Speaker, we would like to see the total energy needs of this Province over the next ten, twenty years brought into some kind of rational basis. Let there be no doubt on this side of the House, Mr. Speaker, the first priority should be for the development of industry and jobs in Labrador. We have made a commitment to the people in Labrador. SOME HON. MEMBERS: MR. G. WARREN: is doing. MR. STIRLING: Hear, hear. That is more than this government No, but this government did. 1'7hen I say 'we', this House of Assembly,because on both sides we did.

We passed a joint resolution a long time ago and this government started off by saying, 'There will not be', and I can remember the Minister of Energy (Mr. Barry) in the discussions that we had first when I came into this House 731.8

Cecenl:er 8 1 1980 Tape No. 2747 SD - 3 M-~. STIRLING: sayL,g that we are not talking about exporting anything from Newfou ndland and Labrador, our tota~ commitment is to get all of this energy used to develop and create the jobs in Ne\vfouo:Hand and Labrador . And now , Mr. Spe~~er, we are talking about an option i n which we are trying to force Quebec to send all of thi s power not only out of Ne\vfound­ land , not only out of Labrador, not only out of Canada , just completely across the border into New York . So lvhere are our priorities? What happened to the priorities of creating jobs?

MR . ~"EARY: We are back in the Joey cays now, right back to 1963-64 . We bave turned full circle novl . HR . STIRLING : Mr . Speaker, I think there is a lot of information that w.e do not have. 73L9 -.

December 8, 1980 Tape No. 2748 GH-1 MR. STIFLING: We have an indication today that the decision to proceed on either Muskrat or Gull Island has been postponed for another six months,

whereas the documents from the Lower Churchill Development Corpora­ tion say that a decision on our next energy source must be made by the end of 1980. Now, does that mean that that decision has already been made? Does it really mean that that decision we have not been told about yet, but that that decision has been made and we are going to spend more money on expanding Holyrood because that has not been decided? Mr. Speaker, I think that there are more questions left unanswered by the Premier in his introduction, many more questions left unanswered than have been answer