Volume XL Th urs da ' Province of Newfoundland FORTIETH GENERAL ASSEMBLY OF NEWFOUNDLAND First Session VERBATIM REPORT {Hansard) Speaker: Honourable Patrick McNicholas No . 3 7 · 20 June 198 5

'! The House met at 3:00 p.m. MR. SPEAKER (McNicholas): Order, please! Statements by Ministers MR. DAWE: Mr. Speaker. MR. SPEAKER: The hon. the Minister of Transportation. MR. DAWE: Mr. Speaker, I am very pleased to be able to make this statement today on behalf of my Cabinet colleague, the bon. Minister of Health (Dr. Twomey) , the member for Exploits, and myself. For sometime now, the Leader of the Opposition (Mr.

Barry) would mention that no one has a copy of these reports to the House, but today your Health critic has a copy, your Transportation critic has a copy, and -the member who is here from Labrador has a copy. For sometime now, our departments have been most concerned about the medical transportation system for the Grenfell Regional Health Services Board, as it relates to the remote communities of Northern Newfoundland and the the coastal communities of Labrador.

The main questions have been: Are we getting maximum utilization for the monies being spent on the service and is there a way of improving the system for all concerned? We feel it is safe to say that there was a general concensus between the government departments and the Grenfell Regional Health Services Board that the entire system of providing air transportation Ll891 June 20, 1985 Vol XL services had to be reviewed and studied. A large amount of money has been expended to construct and maintain airstrips in Coastal Labrador and they must receive better utilization.

Float and ski-equipped airplanes, with these new air strips in place, are no longer as necessary a component of Northern life as they once were. A most thorough review has been carried out and we have studied all of the options available with a view to selecting the most cost effective and efficient method of supplying air transportation services to Northern Newfoundland and Coastal Labrador. Mr. Speaker, in 1985-1985, the Department of Transportation was allotted funds to secure consulting advice on the present operation with suggestions for improvements.

The management committee of the Coastal Labrador Subsidiary Agreement gave approval for a 50/50 cost-sharing of this project with the Government of Canada. The terms of reference for this study recognized the recommendations of the Royal Commission on Hospital and Nursing Home Costs, relative to the provision of Northern Medical Services, as a reference point in terms of the desired level of transportation services.

The Royal Commission's recommendations affirmed that efficient and reliable air transportation services are integral to the provision of universal levels of health care to the residents of Northern Newfoundland and Coastal Labrador. As well, the Commission recommended transportation available to that air services be made Northern residents without cost penali ties i.e, user charges no greater than that paid No. 37 Rl891

by users of ground ambulance services elsewhere in the Province. The consulting study was overseen by a committee of officials representing the main government interest groups and the Gre .nfell Regional Health Service. They were: Dr . Roberts from the Grenfell Health Services; Mr . Bowel l, Department of Health; Mr. Alcock, Treasury Board; Mr. Stone, Department of Rural, Agricu1 tu .ral and Northern Development and two representatives from the Department of Transportation, Mr. Cake and Mr. Simmons. Mr. Speaker, the Grenfell Regional Health Services currently has three dedicated aircraft.

One is a Piper Navajo, purchased about ten years ago by the International Grenfell Association, which is owned and operated by the Grenfell Regional Health Service. The other two are turbo Beavers based at St. Anthony and Goose Bay, respectively, the services of which are paid for by the Department of Health through annual contracts with the operators. The Navajo provides a basic transportation function for the Gre .nfel1 Regional Health Service and is used as a back-up aircraft by that organization for the provision of health care.

It is important to recognize that the primary role of this aircraft is not in the provision of health services in the area but, rather, is to serve as transportation vehicle for the Grenfell Regional Health Service. It should also be noted that this aircra£t can . only play a limited role on the Coast of Labrador in that it cannot operate off most of the runways due to length restrictions. Ll892 June 20, 1985 Vol XL The turbo Beavers are float/ski equipped, single-e .ngine aircraft with VPR, visual flight, capability only. They are totally dedicated to the health care system.

These aircraft have served wel l, however, they are restricted from an operational viewpoint in the sense of not having IPR, instrument flight, capability and not being able to operate off the airstrips year round . It is felt that these single-engine aircraft have performed well, under the circumstances, but they are basically inefficient to provide modern health care under present conditions. Mr.

Speaker, the government has also been paying a subsidy to Labrador Airways Limited for providing service to coastal Labrador on a three-day-a-week basis and this proposition has become very expensive, with the subsidy escalating year by year. Unfortunately, Labrador Airways has not been playing a significant role in the health services of coastal Labrador and it is out feeling that they indeed can and should be. The alternatives and recommendations have been studied exhaustively and we '·propose the following changes to the air transportation system of Northern Newfoundland and Coastal Labrador: 1.

Purchase of a new Aero Commander, which offers distinct advantages over the Piper Navajo currently in use; 2. A cont .ract arrangement between the Grenfell Regional Health Services and a private operator for the services of a Twin Otter based at No. 37 Rl892

Goose Bay; 3. Purchase of a turbo Beaver to be stationed at St. Anthony at a cost of $150,000 to the Department of Health; 4. Increase scheduled Labrador Airways service from three to five days per week; 5. A user charge of $20 would be introduced by the Grenfell Regional Health Services for one-way aircraft trips for medical reasons; 6. The Aero Commander and turbo Beaver to be based at St. Anthony and operated directly by the Grenfell Regional Health Service; 7. The cost of the Grenfell Regional Health Service medical air transportation system to government at present is $1,267,000.

The proposed new system in totality will cost $1,280,000 annually, an increase of only $13,000. The advantages of these initiatives are as follows: The Aero Commander and the Twin Otter would both be twin engine, IFR aircraft capable of operating off all airstrips now in use. These aircrafts are faster than those in use, thus improving response time in emergencies and they would be more available due to runway and IFR capabilities. As well, the Aero Commander is full pressurized and offers distinct medical advantages associated with this feature. Mr.

Speaker, by increasing Ll893 June 20, 1985 Vol XL Labrador Airways' service to five days a week, all residents of Coastal Labrador should see the benefits of the increased frequency. Government itself should also be able to take advantage of the increase in Labrador Airways' flights to coastal communities, thus reducing its need for charter services. The cost involved in providing this new air transportation system is not significantly higher than the current cost to government for the present service. The Aero Commander, including its spare parts package, would require a total expenditures of about $2 million.

The International Grenfell Association is willing to provide half the funding for such an acquisition. Mr. Speaker, as was mentioned we also propose to initiate a user charge for medical travel. This would involve a $20 cost to anyone for a one-way aircraft trip for medical reasons. Passes would be issued by the Grenfell staff for such medical use and would be acceptable on both Labrador Airways and on Grenfell Regional Health Services aircraft.

It is estimated that this move will generate approximately $100,000 each year for the Grenfell Regional Health Services Board and would be used to offset operating costs of the aircraft. Mr. Speaker, I wish to take this opportunity on behalf of my colleague, the hon. Minister of Health, to say a special thank you to Dr. Roberts and the Grenfell Regional Health Services Board for their excellent co-operation and assistance in developing this new system. r feel today's announcement clearly demonstrates government's long standing No. 37 Rl893

commitment to providing an adequate air transportation and health care system for all the residents of Northern Newfoundland and Coastal Labrador. We feel that these initiatives will signal a significant improvement in the air transportation and health care system for the communities involved and the effect will be felt by all concerned. Thank you, Mr. Speaker. MR. SPEAKER (McNicholas): The hon. member for Eagle River. MR. HISCOCK: Thank you, Mr. Speaker. I thank the Minister of Transportation (Mr.

Dawe) for giving me a copy, and also my colleague, the critic for Transportation, and my colleague, the critic for Health, for giving me this chance to respond. This side welcomes any improvement in transportation and medical facilities for our people, and particularly our people of the North. It has been something like six and a half years since I began trying to convince government, and particularly the Grenfell Regional Health Service, to allow Labrador Airways to use its planes as well as going on Grenfell Regional Health Services itself.

What was happening in the past was, if there was bad weather and the Grenfell Association could not get in on the plane, people ended up taking the option of going out on Labrador Airways planes but they could not get reimbursed for the travel. Also areas in my own district, in the Labrador Straits areas, people would sometimes take the ferry and drive over and then go back, and, of course, they were not Ll894 June 20, 1985 Vol XL reimbursed for the time or their travel there.

But there are several things in it and, obviously, this is coming as a result of initiatives taken by the former Liberal government in Ottawa, and the former MP, who placed the thirteen airstrips on the Labrador Coast, breaking the isolation, and now we can see great advances as a result. I applaud and five-days-per-week Labrador which I welcome the

schedule to the Combined Councils of Labrador just passed as a resolution this year. I would also like to say, and I would bring this to the minister's attention and to the Grenfell Regional Health Services, and that is that we are now going more on wheels instead of floats and skis. That is fine for the communi ties with airstrips, but I will point out some flaws in it. Williams Harbour, a permanent community has no airstrip. MR. DAWE: The turbo Beaver to be stationed in St. Anthony will have floating capacity. MR. HISCOCK: Then I again compliment the minister on it. But ·-another

part I would point out, and I am sure it wi 11 be in next year ' s budget, that is with regard to Paradise River. The federal government has paid something like $3.5 million for an airstrip in that community and there is no road to the airstrip. If you have passengers you need to carry the passengers about a mile on stretcher up to the airstrip and that, obviously, has to be rectified and I am sure, in the next year, it will be. No. 37 Rl894

" The other

part is with regard to the Summer stations. If we have the floats, then that is fair and fine in itself but, particularly, as I said, what is good is that Labrador Airways is going five days a week, and also combining the two services. I would also ask the minister, with the new airstrip now in st. Anthony moved farther from the community, if you come on the Grenfell plane or Labrador Airways, it will cost at least $30 or $40 to take a taxi out to the hospital and back. We are going to be paying more, in actual fact, than the people on the Island because of taxis.

If the Grenfell Regional Health Services has somebody there to meet him, fine, but if they do not and, then, of course, Labrador Airways takes the passengers and they are responsible for finding their own transportation. I would ask the minister if he could take note of that because they have a van at the Curtis Hospital. It is there idle at times and all they have to do is connect with Labrador Airways and with · the Grenfell Regional Health Services.

Again, I would say to the minister, if it means a certain cost plus, more than $20, then I am sure the people of Labrador would not mind paying the extra $5 or $10 if they are assured of being taken from their community to the hospital instead of having to wait around for one or two hours for a taxi. I also have to compliment the pilots of the Grenfell Regional Health Service, particularly Mr. Tom Green who has dedicated his life to services of health in the North. Also, I have to compliment the committee itself that was set up.

Ll895 June 20, 1985 Vol XL As I said, it is good to see that we still have projects ongoing that are a carryover of the former Liberal administration. I would ask the Minister of Health (Dr. Twomey) and I would ask the Minister of Transportation (Mr. Dawe) now that this Coastal Labrador DREE Agreement is winding down and there is still need for the airstrips in Williams Harbour, still need for roads in Paradise River, still need for other water and sewerage projects, will the Minister of Health and the Minister of Transportation impress upon their friends, as much as I did when Mr.

Rompkey was there, to get these agreements so that we can have another agreement back-to-back. That is one thing I think the government has to take into account. Looking at it, Mr. Speaker, it is amazing what you can do when you take a bit of initiative. It is a great improvement and I have to applaud the government because, as I said, it is something that the Development Associations has been pointing out, it is something that we have been pointing out as members over here and the Member for Torngat when he was here and it is long in coming, but it is only a logical thing, ·-Mr.

Speaker, to follow the improvement with the airstrips. But all of this reorganization is only an addi tiona! expense of $13,000 to the Grenfell Regional Health Services. So what it is is just realigning everything. The other part, as I said, with regard to the user system, the people on the coast - and I want to point out to this House and to the people of the Province - the contribution that the Labrador No. 37 Rl895

people themselves make to the health services. All of this is about Winter stations and Winter communities. The Summer places, Mr. Speaker, when the nurse got to go out to Georges Cove and go out to Williams Harbour and Henley Harbour and all the other areas that are isolated and scattered, they end up providing, Mr. Speaker, the boat, the motor, the gasoline, and it is done, Mr. Speaker, by local residents, so the local residents themselves put a very high priority on health. Also, Health the Royal said that Commission on there would be two nurses stationed in each clinic along the Labrador coast.

There is no sense, Mr. Speaker, in having transportat ion improvements if we do not have the down to earth improvements at the medical stations. I have been on the Labrador coast many times and I remember ten days fogged in without any planes coming into Black Tickle and being fogged in . in Mary' s Harbour and having to take the CN boat to Lewisporte and then to Gander and back to St. John's.

So these are fine, and we compliment them, but in the meantime, we also have to look at the other parts of the recommendation of the Royal Commission, and that is put two nurses in each health station along the Labrador coast. Thank you, Mr. Speaker. SOME HON. MEMBERS : Hear, hear! Oral Questions MR. SPEAKER (McNicholas): The hon. the Leader of the Ll896 June 20, 1985 Vol XL Opposition. MR. BARRY: Mr. Speaker, in continuing absence from the House, I direct a question of Social Services MR. TOBIN: light of the of the Premier would like to to the Minister (Mr. Brett). That is not fair.

The official opening of Cat Arm today is very important. MR. BARRY: Yes, and the Premier has been away from this House for over a week now, and that is not good enough. This House is open and the Premier should be here. SOME HON. MEMBERS: Oh, oh! MR. SPEAKER: Order, please! Order, please! MR. BARRY: Mr. Speaker, I would like to direct a question to the Minister of Social Services.

In light of the fact that three out of four Premiers in the Atlantic Provinces, the three who have some guts and compassion, have made their positions clear on certain aspects of the federal budget as it impacts upon our elderly, and in the absence of any representation from the Premier of this Province despite the fact that even Mr. Mulroney and Mr.

Wilson are indicating grave concerns about the propriety of their measure in the budget as it impacts on senior citizens, and we have the Prime Minister saying you would have to be an idiot to deny the backlash to the budget, and also saying only a very foolish individual would be insensitive to that kind of comm .ent and analysis such as that made by Premier No. 37 Rl896

Buchanan - MR. J. CARTER: A point of order, Mr. Speaker. MR.. SPEAKER: Order, please! Order, please! A point of order, the hon. the member for St. John's North. MR. J. CARTER: Mr. Speaker, it is quite proper for the Opposition to ask questions, but it is not proper for them to read prepared texts. The hon. gentleman is reading his question. Can he not formulate it himself? MR. SPEAKER: To that point of order, maybe the hon. the Leader of the Opposition (Mr. Barry) would pose his question. MR. BARRY: I would love to, yes, Mr. without interruption, if not mind.

Speaker, you do In light of the fact that even the Prime Minister and Mr. Wilson are expressing reservation, would the Minister of Social Services indicate has he, on behalf of the senior citizens of this Province, lodged any protest about Mr. Wilson's plan to cure the deficit on the backs of the elderly of this Province? MR. SPEAKER: The hon. the Minister of Social Services. MR. BRETT: Mr. Speaker, it is my understanding that the Premier will be making a statement in this House very shortly on behalf of the Government of the Province. Ll897 June 20, 1985 Vol XL MR. BARRY: Mr. Speaker. MR.

SPEAKER: The hon. the Leader of the Opposition. MR. BARRY: Mr. Speaker, would the minister undertake, instead of waiting for the Premier's representation which we will get sometime next September, or sometime when the House is conveniently closed, to communicate with the federal Finance Minister, Mr. Wilson, to ask for a specific date as to when they will remove that provision with respect to de-indexing from the federal budget, or is he going to let the elderly in this Province continue to have the torture of suspense as well as the threat of poverty? MR.

SPEAKER (McNicholas): The bon. the Minister of Social Services. MR. BRETT: Mr. Speaker, I give the same answer to that as I did to the first one. The Premier will be making a statement in this House very shortly with respect to the cutback in old age security pensions. MR. BARRY: Mr. Speaker. MR. SPEAKER: The hon. the Opposition. MR. BARRY: Leader of the Perhaps the minister, in light of the fact that he does not have the courage, Mr. Speaker, to speak out like every other Conservative government in this nation has already spoken out, will at least give us some indication whether he No. 37 Rl897

supports the notion of de-indexation? Does he agree with it? Is this another clause in the Atlantic Accord? Did the Atlantic Accord come with a muzzle? Is that the reason why members opposite are not speaking out, because they have been told by the Prime Minister of Canada not to speak out? Does the minister agree with this sacred trust of curing the deficit on the backs of the aged, the most disadvantaged in our nation, and does he agree that this is consistent, as my colleagues will point out, with trying to cure the deficit on the back of the most disadvantaged Province, namely, Newfoundland and Labrador?

Is this consistent with the minister's philosophy? MR. SPEAKER (McNicholas): The hon. the Minister of Social Services. MR. BRETT: Mr. Speaker, this minister does not necessarily agree with anything that takes money from people who are less fortunate than others, and I believe that the provincial government can hold up its head with any government in Canada for the way that we have treated both indigent people on social assistance or old age security or whatever in the past, since 1979, or since 1972, for that matter.

We are very proud of our accomplishment and I again indicate to the hon. the Leader of the Opposition (Mr. Barry) that our Premier will be making a statement within a few days in the House. MR. EFFORD: Mr. Speaker. MR. SPEAKER (McNicholas): The bon. the member for Port de Grave. Ll898 June 20, 1985 Vol XL MR. EFFORD: Mr. Speaker, I again have to go to the Minister of Consumer Affairs concerning problems with the senior citizens and the low-income people.

During the past several weeks in this House, we on this side have continuously prese .nted petitions and complaints about the high cost of electric! ty and the burden it places on the shoulders of the people of this Province . We find now by listening to the news that consumers in P.E.I. have been supported by their federal minister and their provincial minister in alleviating a $20 million loan to the electricity department of P.E.I. Also, the federal government is now going to subsidize the electric! ty rates for P.E.I.

I would like to ask the Minister of Consumer Affairs does he know about what is happening in P.E.I., and what does he do to work with the Minister of Energy and our federal minister in Ottawa to bring some relief to the people of Newfoundland? SOME HON. MEMBERS: Hear, hear! MR. SPEAKER (McNicholas): The hon. the Minister of Consumer Affairs and Communications. MR. RUSSELL Mr. Speaker, this government is already subsidizing electrical costs in this Province to the tune of approximately $45 million. MR. EFFORD: Mr. Speaker. MR. SPEAKER: The hon. the member for Port de Grave. No. 37 Rl898

MR. EFFORD: That is not an answer to the question I asked. The fact is that the federal government is going to subsidize the electricity rates to the consumers of P.E_.I. I did not ask him whether the provincial government were going to do it. I asked him would he work to see that the federal government would do the same thing for Newfoundland that they are doing for P.E.I.? MR. SPEAKER (McNicholas): The hen. the Minister of Consumer Affairs and Communications. SOME HON. MEMBERS: Hear, hear! MR. RUSSELL Mr. Speaker, representation minister. I have not made any to the federal SOME HON. MEMBERS : Shame! Shame! MR.

EFFORD: Mr. Speaker, a supplementary. MR.. SPEAKER: A supplementary, the hen. member for Port de Grave. MR. EFFORD: the Mr. Speaker, is it possible that all members on that side are told by the Federal Tories to keep quiet and not lodge any complaints against them? We here are paying enormous rates, we have no representation whatsoever to Ottawa, and we now find out that they are willing to do it for P.E.I. Now a minister is willing to stand on his feet and say that he is not going to work and do it for the Newfoundland people.

I will ask him now to immediately tell this House exactly what he should do as minister to help the Ll899 June 20, 1985 Vol XL people of this Province. MR. BARRY: Right onl MR. ROSSELL : Mr. Speaker. MR.. SPEAKER: The hen. the Minister of Consumer Affairs and Communications. MR. ROSSELL : I did not say I was willing to make some representation to the federal minister. I said I have not made any representation. MR. EFFORD: Mr. Speaker. MR. SPEAKER: The hen. Grave. the member for Port de MR.

EFFORD: Will the minister will he tell us now that he will make representation to get the federal subsidy to help the people for this coming year with the high electricity rates? MR. ROSSELL Mr. Speaker. MR. SPEAKER: The hen. the Minister · of Consumer Affairs and Communications. MR. ROSSELL I will take whatever action that is necessary to represent the consumers and whatever I can do to help reduce the electrical costs in this Province I will do. MR. HISCOCK: A supplementary, Mr. Speaker. MR. SPEAKER: A supplementary, the hen. the member for Eagle River •• No. 37 Rl899

MR. HISCOCK: I am sure the Minister of Consumer Affairs and Communications (Mr. Russell) does not want to mislead this House by saying that the Provincial government subsidy . is $45 million when it is only $25 million and that is only in rural areas, and not all throughout the Province. So will the minister undertake not only to get a federal government subsidy, but to spread out the subsidy to all senior citizens in this Province, not only to those in rural areas where they are on diesel? MR. RUSSELL : Mr. Speaker. MR. SPEAKER: The hon. the Minister of Consumer Affairs and Communications. MR.

RUSSELL It is my understanding that there is a subsidy of some $20-odd million for the industrial commerical electrical rates and the balance is for the consumers, for a total of approximately $45 million. MR. DINN: And we would not have to do it, if you did not give it away. MR. DECKER: Mr. Speaker. MR. SPEAKER: The hon. the member for the Straits of Belle Isle. MR. DECKER: Mr. Speaker, my question is for the hon. Minister of Transportation (Mr. Dawe). A few days ago I asked the minister about the job loss on CN. When I posed this question, Mr.

Speaker, the minister practically laughed in my face . as if I were going on Ll900 June 20, 1985 Vol XL with some foolishness. But it is now history, Mr. Speaker. Thirty-five people have been laid off and there will be more layoffs. The thirty-five people are trained men. This means that the

schedule is going to be cut back, and when the

schedule is cut back maintenance people are also going to be laid off. Now the ultimate cause of this layoff is the Tory government in Ottawa their federal cutbacks. We are talking about cutbacks by the people who made the Newfoundland railway an issue of pride more important to this Province than Hibernia and more important than Churchill Falls. Newfoundland will get its railway back, we were told. It is obvious that the Tories have no intention of returning the railway, it was just a political charade. They want to reduce this deficit on the backs of senior citizens and Newfoundland. MR. SPEAKER: Order, please!

Would the hon. member please pose his question? MR. DECKER: Thank you, Mr. Speaker. I want to ask the minister, in view of the fact that Ottawa has closed out the MOT station at Argentia and closed out stretches of track all over Newfoundland, in view of the fact that no federal job is safe in this Province and all the while the minister just shrugs his shoulders and says, 'What is thirty-five jobs?', since we have this state of co-operation between the Tories in Ottawa and the Tories in St. John's, how does the minister explain, how can he explain to this Bouse why he has No. 37 Rl900

been kept in such a state of advanced ignorance concerning CN • s intentions, Big Brother•s intention to streamline CN in Central Canada at the expense of Newfoundland? Did the minister know about it? If he did know, what did he do and what good did it do? If he did not know, why did he not know? MR. SPEAKER (McNicholas): The hon. the Minister of Transportation. MR. DAWE: Mr. Speaker, I guess the first couple of weeks that the hon. member for the Strait of Belle Isle (Mr.

Decker) was in his seat and went on with his tirades and accusations and innuendoes displaying his lack of knowledge about the subject he spoke about, I guess it was somewhat humorous for those of us on this side and for others watching. However, he will find that when he does these kinds of things without a basis in fact, after a while people are going to stop listening to him like they did with other members of the Opposition. To begin with, Mr. Speaker, he stood up in the House and asked a question two or three days ago relative to whether I know that there were seventy jobs lost at CN. Mr.

Speaker, my answer to that was no. He got very upset, and he is still upset, saying that I did not know about the seventy job losses. Well, Mr.

Speaker, the truth is that on the Friday before he asked the question, which is the usual activity, TerraTransport people were in touch with the people in the department, and phened me on the weekend, indicating that because of an increase in rates that TerraTransport were ordered to Ll901 June 20, 1985 Vol XL implement some months earlier by a CTC ruling - through an intervention by ACE and through the lobby from my office, from this government and from communi ties around the Province that large increase was stopped until such time as public hearings took place - TerraTransport were asked, based on some other numbers, to voluntarily increase their rates, before the final ruling, by about one third of what CTC had proposed.

They did that with a projection it would perhaps mean about a 15 per cent loss in traffic and this, in fact, is what has happened. They are down somewhere in excess of $1 million gross on their traffic. An assessment Wednesday telephone Montreal. was being done on in Montreal and I had calls from Mr. Clarke in AN HON. MEMBER: What is this all about? MR. DAWE: He asked what I had been doing, what representation I had made about twenty-five other questions. I am only going to hit about ten of them, but I am answering the questions that the hon. member asked. He asked what I have done and I am telling you.

So I had telephone conversations with Mr. Clarke and another meeting today to go over the reason for the temporary layoffs in the system associated with the reduction of traffic of about 15 per cent and, hopefully, the traffic will increase again and they will be able to hire those people on in due course. But there are thirty-five temporary layoffs throughout the system associated with a reduction in the amount of traffic that TerraTransport has travelling on No. 37 Rl901

its system and has nothing to do with any of the items that the hon. member referred to. As usual, Mr. Speaker, he went off asking a question and making assumptions on an area that _ he does not know anything about. As a point of interest, Mr. Speaker, I ask the hon. member if he would check his facts a little better. Indeed, if he would had just come to my department or to me he could have been fully informed as to what the layoffs were about, why they were necessary and what TerraTransport was proposing to do in the future. MR. DECKER: A supplementary, Mr. Speaker. MR.

SPEAKER (McNicholas): A supplementary, the bon. member for the Strait of Belle Isle. MR. DECKER: I must confess I am getting more and more confused. When I asked the question the minister told this hon. House that he was not aware of any layoffs. Now he is saying on the Friday previous to that he was aware of it. Now is he going to tell us the facts or not? And the layoffs, Mr. Speaker, are supposedly temporary. MR. OTTENHEIMER: A point of order, Mr. Speaker. MR. SPEAKER: A point of Minister of Affairs. MR. OTTENHEIMER: order, the hon. Intergovernmental Mr.

Speaker, I have no doubt the hon. gentleman for the Strait of Belle Isle is anxious to get information and I think Your Honour has ruled frequently that the Question Period is best utilized by short questions, short L1902 June 20, 1985 Vol XL answers and that supplementaries do not require

preamble. So I would suggest to the hon. gentleman that he perhaps honour Your Honour's ruling. MR. SPEAKER: That point of order is well taken. I would ask the hon. member if he would pose his question now. The hon. member for the Strait of Belle Isle. MR. DECKER: Thank you, Mr. Speaker. Obviously it is not just the minister who thinks that the loss of thirty-five jobs is humorous. It is beginning to become clear to me that all members over there think it is humorous to lose thirty-five jobs. My question, Mr. Speaker, is this: What is the minister going to do now?

I obviously had facts when I asked about the jobs. History has shown it was true, the jobs are lost. Is the minister going to tell Ottawa to reinstate them? Never mind this pandering, it is time to demand. It is time for someone to tell Mr. Wilson the facts of life, that Newfoundland was assured the railway would be kept. Are we going ·· to get the same fierce screaming now to save this railway or just another litany of pretence that those members are putting forward? Are we going to get the same fierce attack on Ottawa to reinstate those jobs? I want to know what the minister plans to do about it, Mr. Speaker.

MR. SPEAKER (McNicholas): The bon. Minister of Transportation. MR. DAWE: No. 37 Rl902

Thank you, Mr. Speaker. I certainly do not think the temporary loss of thirty-five jobs for even a day, Mr. Speaker, is a very funny situation but I do find somewhat humorous the member for the Straits (Mr. Decker) and the way he tries to perform in this House. Perhaps it is entertaining and those of us who have laughed at his performances in the past perhaps will do so again. Mr. Speaker, I wonder where the Opposition was when this administration for the past six years went out and campaigned very actively for retention and improvement of the Newfoundland railway. Where were they, Mr.

Speaker, when this particular administration negotiated with Ottawa a deal that saw a containerization programme put in place, an evaluation process put in place for a five year programme, a $77 million employment adjustment programme put in place for the staff of CN and TerraTransport in this Province? Mr. Speaker, they have been out in left field. The only person in the Opposition over the past five or six years who said a word about the railway in support of it has been the former Leader of the Opposition. MR. LUSH: Mr. Speaker. MR. SPEAKER (McNicholas): Order, please! The hon. member for Bonavista North. MR.

LUSH: Mr. Speaker, I have a question for the Minister of Housing or whoever has responsibility to administer RRRAP in the province, the Rural Rehabilitation Assistance Programme, a programme badly Ll903 June 20, 1985 Vol XL needed in this Province. Mr. Speaker, in view of the fact that the federal budget was brought down without the slightest concern for what its consequences would be in Newfoundland, and the Ottawa Tories knew that they could do what they liked to this Province and they would not get any reaction, they would only get silence, Mr. Speaker, from this government, my question, Mr.

Speaker, is in view of the fact that across canada there has been, as a result of the federal budget, a 20 per cent cutback in RRRAP, a 20 per cent cutback in the Rural Rehabilitation Assistance Programme, in view of this, can the minister indicate to the House what is the percentage cutback in this Province to that very important programme, a programme that was never sufficiently funded in terms of the need for safe and comfortable Newfoundland? housing What percentage cutback? MR. DINN: Mr. Speaker. in is MR. SPEAKER (McNicholas): rural the The hon. the Minister of Mines and Energy. MR.

DINN: I thank the hon. member for his question. Unfortunately, it is about two weeks late. He had an opportunity to come into the Estimates Committee and quiz me a week or so ago, when I indicated to all hon. members that we were spending $117 million on housing this year in the Province, and I indicated to all hon. members what that money was to be spent for. I will be making a major announcement with respect to Eastern Newfoundland later. The hon. member should know that RRRAP, basically, is a CMHC No. 37 Rl903

programme, they run it for the federal government, and the former administration in Ottawa, rather than run their programmes through the Housing Authorities in the Provinces, what they did was direct funded and disbursed it to all and sundry. We have in this Province agencies like Newfoundland and Labrador Housing Corporation, we have CMHC who direct fund, and we have municipalities, which operate the RRRAP programme. MR. LUSH: The cutback is almost 45 per cent cut. MR. DINN: It is a 25 per cent cut. The hon. member was wrong. There is a 25 per cent cut federally.

We are attempting to find out what approvals have been given to the municipalities and all the other administrators, we will say, of the programme, so that we can determine what the decrease is. I am trying to do that prior to July 1, because I have a meeting in Calgary with the federal Minister of Housing (Mr. McKnight), so that I can express the concerns of the provincial government and the municipalities.

At that meeting we will also be attempting to put together a federal/provincial global agreement whereby all the funding for housing in this Province will be run through the provincial Housing Authority and, as a result, the provincial government will then have total control of what housing funding will be spent in the Province. MR. LUSH: A supplementary, Mr. Speaker. MR. SPEAKER (McNicholas): Ll904 June 20, 1985 Vol XL A supplementary, the hon. the member for Bonavista North. MR.

LUSH: Here again we have an indication of a minister trying to defend the indefensible, here we have a member who does not know what is going on. Mr. Speaker, the cutbacks in the RRRAP programme on a general percentage is close to 45 per cent, when the national cutback was 20 per cent. My question, in view of this vicious cutback, in view of this vicious slashing of this most vital programme, has the minister protested this obvious inequity and injustice? If so, can he tell us what was the form of his protest, when he made it, and what results he has received from it? MR. DINN: Mr. Speaker. MR.

SPEAKER (McNicholas): The hon. Minister of Mines and Energy. MR. DINN: Mr. Speaker, the bon. member is totally incorrect. Be started out with a 20 per cent cut in RRRAP funding. MR. BARRY: Answer the question. MR. DINN: The fact of the matter is the hon. Leader of the Opposition (Mr. Barry) should control himself. There are places for people who lose control of themselves. Be should watch himself because he may be committed to that place. MR. BARRY: Answer the question. MR. SPEAKER: Order, please! Order, please! No. 37 Rl904

MR. DINN: The hon. Leader of the Opposition should know the rules of the House, he has been here long enough. If he does not know the rules he should learn the rules in this little blue book. All he has to do is read the rules and he will learn the few basic rules of courtesy in the House. And he should not be shouting across when a member is asking a question or giving an answer. Mr. Speaker, with respect to the hon. member's question, he started out by saying there was a 20 per cent cut. Actually there is a 25 per cent cut nationally, not 40 per cent, or 20 per cent, it is 25 per cent.

I indicated to the hon. member that there is more than one administrator of the RRRAP Programme in Newfoundland. I have also found out from the federal minister that the RRRAP funding for Newfoundland is not totally determined. There is always an initial allocation; as has happened every year in this Province the initial allocation is down. We know that the initial allocation this year is down from last year but we do not know what the final allocation will be and I will find out what the final allocation will be when I meet with the minister in Calgary on July 1.

At that point in time we will have that information, we will know what the other agencies who deliver RRRAP are getting this year, we will have the final figure, and we will be able to discuss it then with the Federal Minister of Housing. If it is down, Mr. Speaker, I can assure hon. members that I will make the people of Newfoundland aware, I will make the federal minister aware, that we will not be happy unless not only is it not down, but that the figure for Ll905 June 20, 1985 Vol XL Newfoundland is up because of the needs of the people in rural Newfoundland. MR. LUSH: A supplementary, Mr. Speaker. MR.

SPEAKER: A supplementary, the hon. member for Bonavista North. MR. LUSH: Although the RRRAP Programme is federally funded it is my understanding that it is the Province that designates the area. Now, Mr.

Speaker, in view of the fact that the Province just increased its area of coverage - it included another designated area I think just last week when it was announced that the Trinity Bay de Verde area was declared a designated area for RRRAP - and in view of the fact that the federal government is slashing, pulverizing and emaciating the programme in terms of funding it, what is the minister going to do about this? What is he going to do about the fact that his federal counterparts are embarrassing him? MR. SPEAKER: The hen. Minister of Mines and Energy. MR. DINN: Mr.

Speaker, I want to inform the hon. member that the RRRAP areas have been increased this year and in the new global agreement we are requesting that the federal government include all areas of the Province· of Newfoundland and Labrador for availability to RRRAP funding. Now, Mr. Speaker, the fact of the matter is that we have spent millions of dollars on RRRAP. It is an excellent programme. It is one programme that I intend to No. 37 R1905

that I federal that it that the make every representation possibly can to the government to make sure not only continues but funding increases. Mr. Speaker, I will be able to inform the bon . member on Jul y 6 or 7 when I return from Calgary from the Federal/Provincial Ministers of Housing Conference. I will be able to inform not only the hon. member but all of Newfoundland and Labrador with respect to RRAP. I also member want to that inform the the hon. former had administration in Ottawa indicated to Newfoundla .nd as far back - MR. SPEAKER (McNicholas ): Order, please!

I think the hon. minister is getting away from the question. MR. DINN: Okay, Mr. Speaker MR. LUSH: Mr. Speaker. MR. SPEAKER: A final supplementary, the hon. member for Bonavista North. MR. LUSH: Will the minister not agree that the federal budget in what it does to the aged, as we have already pointed out, Mr. Speaker, and in terms of his own department is a disaster for this Province? Will he further agree that if the Premier does not, then it is time for somebody to stand up and fight for the rights of Newfoundlanders. Surely there must be something more, Mr.

Speaker, to reducing the federal deficit than bringing the people Ll906 June 20, 1985 Vol XL of this Province to their knees. Will the minister not agree that it is time for action, Mr. Speaker? MR. SPEAKER: The hon. Minister of Mines and Energy. MR. DINN: Mr. Speaker, the hon. member indicates that I should indicate it is time for action. This provincial government is taking action. I was out in Central Newfoundland last week and I announced in Central Newfoundland what we were going to be doing in housing. I will be announcing tomorrow a major programme for the St. John's area.

I announced a major project for Mount Pearl this year with respect to housing. Included in the St. John's announcement tomorrow will be a major announcement Mr. Speaker, for senior citizens' housing in this programme. This Province is second to none in providing senior citizens' housing to any province in Canada. We have, on a per capita basis, more houses built for senior citizens that any province in Canada. And the hon. Leader of the Opposition (Mr. Barry) who is shaking . his head, no, I defy him to get the facts and prove me wrong. SOME HON. MEMBERS: Hear, heart MR. SPEAKER (McNicholas): Order, please!

Before recognizing the hon. member for Gander (Mr. Baker), I would like to welcome to the gallery Senator Forsey and Mrs Grace Sparkes. SOME HON. MEMBERS: Hear, hearl No. 37 Rl906

-· MR. SPEAKER: The hon. member for Gander. MR. BAKER: Thank you, Mr. Speaker. I have a question for the Minister of Housing (Mr. Dinn). I would like to point out to him that the federal cut in RRRAP funding is double the national average here in Newfoundland. As a matter of fact, municipalities have had a cut of 70 per cent in their available RRRAP funding and I do not need to go to a conference some months down the road to find this out. What I would like to ask the minister is related to this Mr. Speaker.

Will these cutbacks result in the closing of the Central Mortgage and Housing Corporation offices in the Province? And if so, how many and where are they? MR. SPEAKER: The bon. Minister of Mines and Energy. MR. DINN: Mr. Speaker, Central Mortgage and Housing to my knowledge is not closing in the Province. I think that is another scare tactic that the hon. member is using. The fact of the matter of is, and I think it is wise, the federal government is seriously considering utilizing Newfoundland and Labrador Housing in Newfoundland to deliver programmes to the people of Newfoundland. That way, Mr.

Speaker, there will be greater control of what is happening in the Province. So, Mr. Speaker, I caution the bon. member not to be using scare tactics in Newfoundland and threatening the people with loss of jobs through CMHC. What the federal government is doing is directing and focusing its housing programmes in provinces by utilizing agencies that Ll907 June 20, 1985 Vol XL are already there. MR. BAKER: A supplementary, Mr. Speaker. MR. SPEAKER (McNicholas): The bon. member for Gander. MR.

BAKER: Central Mortgage and Housing Corporation has announced the close down of sixteen offices in Canada, four of them in Newfoundland, one quarter of the total. They are in Gander, Grand Palls, Marystown and Goose Bay. Now, Mr. Speaker, the Minister responsible for Housing (Mr. Dinn) obviously is not on top of this kind of thing and I wish he were. We have an instance where we are having more serious cutbacks in Newfoundland than in the rest of Canada, that Newfoundland is getting nailed.

The one Province that should be receiving help and not be getting slashed and not be getting punishment from the federal government, we are getting nailed. The Minister responsible for Housing I would like to know when he is going to get together with his federal buddies and try to get this situation straightened out to try to ensure that these offices do not close. I would like him to tell the House of the representations he intends to make in the next day or so to make sure that these offices get opened up again. MR. SPEAKER (McNicholas): The hon. Minister of Mines and Energy. MR. DINN: Mr.

Speaker, the problem with the hon. member is that there are too many bakers representing Gander and their cake is becoming dough. What I indicated to the - No. 37 Rl907

MR. BARRY: Will there be jobs lost? MR. DINN: There will be closes. be some people - There will SOME BON. MEMBERS: Hear, hear! MR . BAKER: A point of order, Mr. Speaker. MR. SPEAKER: Order, please! Order, please! A point of order, the hon. member for Gander~ MR. BAKER: I asked the minister in the beginning if the cut backs would result in any closures in Newfoundland and he said no and now he is saying that there are. He has misled the House, Mr. Speaker. MR. SPEAKER: There is no point of order. MR. DINN: Mr. Speaker, to that point of order. MR. SPEAKER: There is no point of order. The hon.

Minister of Mines and Energy. MR. DINN: Mr. Speaker, to answer the question, then, the fact of the matter is if the Newfoundland and Labrador Housing Corporation is going to handle a lot of the programmes of the federal government, is going to be the housing agency for the federal government, then obviously they will not need all the delivery system they have in place to Ll908 June 20, 1985 Vol XL duplicate that effort. So what will be happening is that Newfoundland and Labrador Housing, in those areas where they will expand their territory, will be hiring new people.

The hon. member might also want to know that we are doing a rationalization of the staff that we have because, Mr. Speaker, we think that there is a need for efficiencies in all areas. We are doing a rationalization now. MR. BAKER: Rationalization, what does that mean? MR. DINN: That means, for example, that we do not know if we need all the staff in Gander but if we do we will utilize those staff members, if we need more we will get staff. We are doing rationalization - MR. BARRY: more a CMHC is closing down in Gander - MR. SPEAKER (McNicholas): Order, please ! MR. DINN: of the staff throughout the Province, Mr.

Speaker. So, Mr. Speaker, if - ~ MR. BARRY: Grand Falls, Goose Bay and Marystown. MR. DINN: The hon. Leader of the Opposition (Mr. Barry) will not listen. The fact of the matter is that if there is a requirement for more people in Stephenville because the programme that we deliver in RRRAP in rural and native housing is expanding out there, then we will put more staff there. And if we are going to deliver those No. 37 Rl908

programmes there then CMHC will not need to deliver the programme if we are going to deliver it. MR. SPEAKER (McNicholas): Order, please! The time for Oral Questions has elapsed. Order, please! I said yesterday that I would consult Hansard on a point of order raised by the hon. the Leader of the Opposition (Mr. Barry). I have done so. There were two points, actually. one was in connection with threats across the floor and the other was calling the hon. member a liar. The second one has been dealt with. On the first one, I could not find any reference that I could in any way feel was a threat.

That the only one that I thought of was where the hon. member said, 'I challenge the hon. member now to name the teachers I said I was going to get and come outside of the door and say it. ' I do not think that that was a threat, so there is no point of order. MR. BARRY: On a point of order, Mr. Speaker. MR. SPEAKER (McNicholas): A point of order, the hon. Leader of the Opposition. MR. BARRY: Yesterday in the course of question period, the Minister for Public works (Mr. Young) appears to have misled the House.

Now I would like to ask the minister to indicate whether or not it was deliberate or whether it was out of ignorance when he stated that, all across Canada Opposition offices are funded by the parties Ll909 June 20, 1985 Vol XL rather than by the governments of the provinces? I checked, Mr. Speaker, just a random selection to make sure. I knew about Nova Scotia because I have been up there. I checked Manitoba, Ontario, and Prince Edward Island. Mr. Speaker, Quebec, I understand, is in the same situation, and British Columbia. These all fund, Mr.

Speaker, the Opposition offices, adequately, I might add, unlike here, through government funds, recognizing that the Opposition forms part of the democratic process in the Province. Now will the Minister of Public Works (Mr. Young) clarify that? Or is it a matter of his attempting to deliberately mislead this House? What was the point of his getting up and stating that Opposition offices in other provinces were not funded by the governments of those provinces? MR. POWER: Sit down, Premier Barry 1 Sit down! MR. OTTENHEIMER: To that point of order, Mr. Speaker. MR.

SPEAKER (McNicholas): The hon. the Minister of Intergovernmental Affairs. MR. OTTENHEIMER: It is quite obvious that there is no point of order. If the hon. gentleman wants information which is in the hon. Minister of Public Works area of knowledge, then obviously he would ask it during oral Question period or put it on the Order Paper. And if there is a discrepancy in the understanding of the facts between two hon. gentlemen, that does not make a point of order at all. No. 37 Rl909

MR. BARRY: He misled the House. MR.. OTTENHEIMER: So, Mr. Speaker, there certainly is absolutely no point of order. The information looked for by the hon. gentleman is best found during Oral Question period or by putting a question on the Order Paper. MR. SPEAKER: To that point of order, there is a difference of opinion between two hon. members, but there is no point of order. Notices of Motion MR. BLANCHARD: Mr. Speaker. MR. SPEAKER: The hon. the Minister of Labour. - MR. BLANCHARD: Mr. Speaker, I would like to table the 1984 annual report of the Worker's Compensation Commission. Further, Mr.

Speaker, I would like to table the report of the Minister of Labour on matters transacted under the Labour Relations Act and various other Collective Bargaining Acts, and the report of the Labour Relations Board for the year 1984. Thank you, Mr. Speaker. Petitions MR. BARRY: Mr. Speaker. MR. SPEAKER (McNicholas): The hon. the Leader of the Opposition. Ll910 June 20, 1985 Vol XL MR. BARRY : Mr. Speaker, I have a petition that I am informed has not been presented by the member for Burin - Placentia West (Mr. Tobin). Now if I am wrong, I apologize to the hon. gentleman if it was presented in my absence.

But individuals, Mr. Speaker, from Monks town have contacted me and indicated that they have not heard anything since they presented a petition some .time ago. Now, Mr. Speaker, this petition - MR. DAWE: It was presented and it was responded to. MR. BARRY: This petition with respect to the lack of maintenance on the Monkstown highway. MR. J. CARTER: On a point of order. MR. SPEAKER: Order, please! MR. BARRY: Well then, if it has been presented, would the minister deal with it or the member for Burin - Placentia West respond to the people of Monkstown? MR. SPEAKER: Order, pleasel MR. J. CARTER: Name him! MR.

SPEAKER: A point of order has been raised by the hon. member for St. John's North. MR. J. CARTER: Mr. Speaker, it understanding after a petition was presented No. 37 was my previous that in Rl910

. .:l· future petitions would be cleared with the Speaker's Office before they would be presented in this House - MR. BARRY: Censor them, you mean. MR. J. CARTER: - in order to assure whether or not they have been presented before, whether they were copies, or whether they were properly directed. I wonder, Mr. Speaker, did the Leader of the Opposition (Mr. Barry) bother to clarify this matter? I leave it in your capable hands. MR. TOBIN: To that point of order, Speaker. MR. SPEAKER (McNicholas): There is no point of order. Mr.

Let me make it clear there has been no direction whatever that petitions should be· cleared through the Speaker's Office. The Speaker's Office is available to anybody at any time who wants any advice or suggestions on a petition, but there is no necessity whatever to clear them through my office. 000 MR. BARRY: Mr. Speaker. MR. SPEAKER (McNicholas): The hon. the Leader of the Opposition. MR. BARRY: Mr.

Speaker, before we move into Orders of the Day, I wonder if the acting who is Ll911 Government House Leader, also, conveniently, the June 20, 1985 Vol XL Minister of Intergovernmental Affairs, would be prepared to join with members on this side of the House in putting forth a resolution. MR. TOBIN: Mr. Speaker, on a point of order. The hon. the member for Burin Placentia West, on a point of order. MR. TOBIN: Mr. Speaker, I happened to be outside the Chamber when the Leader of the Opposition (Mr.

Barry) got up and made reference to the fact that I have not presented a petition in this House on behalf of the people of Monkstown as it related to the maintenance of their road. I can assure this hon. House that that petition has been presented. Mr. Speaker, that petition was presented two or three weeks ago in this hon. House, where I spoke in support of it and the Minister of Transportation (Mr. Dawe), accepting the petition, supported it. MR. BARRY: Why did you constitutients? MR. TOBIN: Mr. Speaker, protection of you ask the Opposition (M. not tell your may I have the the Chair?

Would Leader of the Barry) to shut up and stop making a show of himself? MR. SPEAKER (McNicholas): Order, please! Order, please! To that point of order, I think the hon. member is taking time to explain a matter, but there is no point of order. No. 37 Rl911

MR. BARRY: When we get into Orders of the Day, I am sure the acting Government House Leader, with the responsibilities which he has - MR. OTTENHEIMER: Mr. Speaker. MR. SPEAKER: Order, please! On a point of order, the hon. the Minister of Intergovernmental Affairs. MR. OT'rENHEIMER: Mr. Speaker, I have already indicated it is the government • s intention to proceed with the regular order of business and that we do not give leave to proceed with any other order of business. That has already been stated so, therefore, we shc 1uld proceed with Orders of the Day. MR. BARRY: To that point of order, Speaker. MR.

SPEAKER (McNicholas): Mr. To that point of order, the bon. the Leader of the Opposition. MR. BARRY: I am very surprised that the acting Government House Leader would have such a lack of courtesy. Normally that gentleman shows a certain degree of courtesy and a certain degree of recognition for the Chamber and the position which he holds, Mr. Speaker. He should at least have had the courtesy to hear out the Leader of the Opposition when I suggested, Mr. Speaker, that we extend congratulations to Mr. David Peterson, who will soon be the new Premier of Ontario, with whom that minister, Mr.

Speaker, will have to deal in the interests Ll912 June 20, 1985 Vol XL of this Province. MR. OTTENHEIMER: That matter has been ruled on. MR. SPEAKER: Order! MR. BARRY: Mr. Speaker, may I have my moment to speak to this point of order? I wonder if the acting Government House Leader would reconsider and express our appreciation that the nightmare of Tory rule has finally been lifted from the people of Ontario? MR. SPEAKER (McNicholas): To the point of order, there is no point of order. Orders of the Day MR. OT'l'ENREIMER: Motion 6.

Motion, the hon. the Minister of Municipal Affairs to introduce a bill, "An Act To Amend And Consolidate The Law Respecting The Continuation Of The Incorporation And The Municipal Affairs Of The City Of Corner Brook, " (Bill No. 33), carried. On motion, Bill No. 33, read a first time, ordered read a second time on tomorrow. MR. OTTENHEIMER: Motion 5. On motion, that the House resolve itself into a Committee of the Whole to consider Certain Resolutions relating to Advancing or Guaranteeing of Certain Loans made under The Loan And Guarantee Act, .Mr. Speaker left the Chair. No. 37 Rl912

Committee of the Whole MR. CHAIRMAN (Greening) : Order, please! DR. COLLINS: Mr. Chairman. MR. CHAIRMAN: The hon. the Minister of Finance. DR. COLLINS: Mr. Chairman, the hon. the Leader of the Opposition (Mr. Barry), if I recall, asked a number of points, particularly in regard to Easteel, in the debate last day. If I remember correctly the hon.

Leader of the Opposition suggested that the company has changed his way of operating since the government has lent them some assistance - I am not saying cause and effect - but anyway, since some assistance has been given, they have gone into acting as an agent, as opposed to a fabricator. I have checked into that matter, Mr. Speaker, and the information I have is that that is not so, they have not taken to importing things into this Province, that any pressure tanks or containers or that type of thing they manufacture them themselves.

They do do repair work for any company, of course, that needs such repair work done and they may well have done repair work on containers brought in by someone, but they themselves fabricate any containers that they are required to. The information that I have been given is that they have not been acting as an agent and, thereby, taking away work from companies that might be in a position to fabricate these items.

Ll913 June 20, 1985 Vol XL Now if the hon. the Leader of the Opposition has a more specific matter which he wishes me to look into I would be glad to do it, but on the basis of the point he brought up to date, and on the enquiry I have made, that is the situation as I understand it. MR. BARRY: Is there no with another containers? photographs. DR. COLLINS: joint group I venture there to bring in have seen As I say, if the bon. member has specific information he wants me to check into I will do it but, on the basis of what the hon.

Leader of the Opposition has said so far, the word I am getting is, no, that is not the case. The hon. Leader of the Opposition also asked what is the situation with the company now. I think it is fairly common knowledge that th~ company has had some difficulties recently but there have been meetings with creditors and other peoples involved. We have been approached about their continuing difficulties and measures are being taken to try to alleviate matters and allow the company to continue and to retain the skilled work force that they have out there.

There are difficulties but some measures are being taken to attempt to overcome them. MR. BARRY: Mr. Chairman. MR. CHAIRMAN: The hon. the Opposition. MR. BARRY: Mr. Chairman, minister might No. 37 Leader I wonder give us a of the if the little Rl913

review. Maybe for some of the­ newer members of the House a little explanation would be useful of just what the purpose of this procedure is and how it becomes necessary for the minister to c.ome before the House now seeking the approval of the Legislature for loans and guarantees which have been already granted, or extended. I wonder would the minister indicate the percentage of guarantees on which there have been defaults this year, how it compares with previous years, what the amounts of money are for which government may become liable as a result of previous year's activities which came to a head this year?

Would the minister indicate just what the situation is with respect to the procedure, generally, and the actual practice in this past year? This is a matter which has some sensi ti vi ty. It has to do with fund raising, Mr. Chairman, by the party opposite and by members opposite. I wonder if the Minister of Finance (Dr. Collins), or the Minister of Treasury Board (Mr. Windsor), is aware of any letters for fund raising have gone out to individuals for whom government guarantees or government loans are being sought?

Would the Minister of Finance and, I think, the Minister responsible for the Treasury Board I realize the Minister responsible for the Treasury Board liken to deal with this too - is he aware of any requests for political contributions going out to individuals with whom government is doing business, either in terms of awarding contracts or in terms of extending loans or guarantees for loans. Ll914 June 20, 1985 Vol XL Could either minister, or both ministers, comment on that? MR. CHAIRMAN (Greening ) : The bon. Minister of Finance o DR. J. CARTER: Mr. Chairman , the bon. the Leader of the Opposition (Mr.

Barry) wants an explanation of what we are about here. I thought I had given that when I stood to introduce the resolution we are debating. But just very briefly, if government gives a loan, or a guarantee to a firm or to an individual, it is required under the Loan and Guarantee Act to report the same to the House. Now, the way we do that is that we adjust the

schedule to the Loan and Guarantee Act. What we are doing by this procedure is passing a resolution that a bill be introduced in the House which would adjust that schedule. So really it is a way of informing hon. members what action the government is taking in giving loans and guarantees since the last bill was brought in adjusting the schedule. So we are bringing things up to date. The last bill, if I remember correctly, was brought in in the Fall of '83, so the adjustments to the

schedule now are guarantees that have been given out since that adjustment was made. As I mentioned, there are some thirty-nine adjustments to be made, meaning that there are thirty-nine separate acts of giving loans, guarantees, or extensions to loans and guarantees. The bon. the Leader of the Opposition asked what pay out relates to those. There have been two pay outs related to that thirty-nine in that period of No. 37 Rl914

time. Item 6, Belle Isle Seafoods Limited, was a pay out. As the bill had not been introduced up to that time, it was paid out throuqh a special warrant and of course the special warrant was tabled in this House at the time and the amount of the special warrant was put into the Interim Supply Bill that has already been passed by this House.

Similarly, there was a pay out on item 30, Placentia Bay Seafoods, and exactly the same procedure took place there as there was not a bill introduced up to that time, because we are just doinq it now, the pay out had to be in the form of a special warrant which aqain was tabled in the House and was included in the Interim Supply Bill. Just on the other point, the hon. the Leader of the Opposition also brouqht up the point about contributions to parties. I have absolutely no knowledqe of that. That is not my responsibility, but I can assure the hon. House, and I hope that this was not the implication of · the hon.

Leader of the Opposition's question, there is absolutely no suqqestion whatever that these guarantees or loans are contingent upon any payment in any way except the repayment of any loans or quarantees that are given, repayments that are due the government. We have no concern about whether firms are approached for funding for some other matter. All I can say is that it has no relationship whatever to the process of investiqating and processing and qi ving approval or otherwise to a request for a loan or guarantee. Ll915 June 20, 1985 Vol XL MR. TULK: Mr. Chairman. MR. CHAIRMAN: The hon. member for Foqo. MR.

TULK: Mr. Chairman, I would like to ask the minister a question about some of those loans, and I am sure some of my other colleagues have some questions that they want to ask him about some of the loans as well. In particular, I want to refer him to item 28, Parsons Pond Seafoods Limited. As I understand the reasons for putting those quaranteed loans in place is, as the bill says, to give fish companies, and other companies in the Province, most of them anyway are fishing companies, a line of credit. That is the whole idea of putting them in place in the beginninq.

I refer specifically to Parsons Pond Seafood Limited. There is a problem · in their plant in Hawkes Bay that was developinq on April 26 - and I can give the minister documented proof of this the Mayor and the Council of Hawkes Bay came to St. John' s to meet with the provincial fisheries officials, and to outline the problem that they were havinq. The problem that they · were havinq was that their fish plant is closed, and, apparently, Parsons Pond Seafoods are not qoing to reopen it. They also met with their MBA, the member for St. Barbe (Mr. Furey), my colleaque, and the member for St.

Barbe wrote the Minister of Fisheries outlining the problem as he saw it, and as they see it. I could read, if I want to, and I could table for the minister, if he so chooses, some telexes and some letters that were sent back No. 37 Rl915

and forth from the member and from the council as well I think, or at least the member, to different officials. In this case I read to him a telex that was sent to one George Payne, of Parsons Pond Seafoods - I suspect one of owners, or at least the person who runs that - and I would like to tell the minister I understand he also was the Tory campaign manager for the member who ran against the fellow who got elected back here, Mr. Furey. George Payne was a Tory campaign manager.

I think there is a problem that has developed there, and I will get into it, if I do not get into it in the first ten minutes I will certainly get into it in the next ten if the minister chooses to answer my question. It says, •Please be advised that I have met today with a delegation consisting• - this is a telegram from the member for St. Barbe to one George Payne - • a delegation consisting of council members and the Mayor of Hawkes Bay regarding the operation of the fish plant there for this coming season. I would request from you and from Mr. Keough and Mr.

Amos Payne a decision on the part of your company regarding your intentions for the opening of this plant for the coming season. It is imperative that both council and the people of Hawkes Bay know your company's intentions by early next week.

I do not have to tell you how much the jobs in this fish plant mean to our people in Hawkes Bay.• I say to the minister that the whole purpose and the whole reason that th is bill is there today, is that the government had to keep certain companies going in this Province in order to keep certain Ll916 June 20, 1985 Vol XL jobs, and to industries alive. keep certain The member then wrote the bono Tom Rideout, the Minister of Fisheries, pointing out that he had met with the Mayor of Hawkes Bay, Mr o Sam Hoddinott - I also met with him, by the way.

I had the pleasure of meeting the gentleman and discussing this issue with him - and asked the Minister of Fisheries to address the issue immediately because they were talking about sixty jobs in Hawkes Bay that unless this fish plant opened, were not going to be there. Of course, the answer he got back from the Minister of Fisheries was totally inadequate. This is what he says, and this is the very real question I want to put to the Minister of Finance (Dr. Collins) : 'I must point out that Parson's Pond Seafood Limited' owned, as I said, by the Tory campaign manager in St.

Barbe, he campaigned for the former member, Mr. Osmond - 'has a valid five-year lease on this department-owned facility' - The Hawkes Bay fish plant is owned by the provincial Fisheries Department - 'with lease fees paid in full for the first year, ending June 30, 1985. The ·operation of the particular facility in the immediate future is therefore a decision' - listen to this! I would ask the minister to listen to this very closely in view of the fact we are putting out government money - DR. COLLINS: I cannot understand what point you are getting at, but carry on. MR. TULK: You will see eventually.

I want the minister to clearly understand No. 37 Rl916

what is happening here.

In view of the fact that we are putting out government funds, that we are guaranteeing up until December 31 of this year, Parson's Pond Seafoods Limited, we are issuing a guarantee for them from this Legislature, let me as the Minister of Finance how it is that this reply by the provincial Fisheries Minister can be valid? 'The operation of the particular facility in the immediate future is, therefore, a decision to be made by the existing leasee, that is Parson's Pond Seafoods Limited.' The plant is closed down and they say they are not going to open it, not going to touch it at all this year.

I understand that there are two companies, one American and one Swedish, who are willing to go into Hawkes Bay and open that plant, yet, for some reason or other, and I would like the minister to tell us why that is, if he can, if he cannot I will try to dig it out for myself, but I would like for him to tell us why it is that, on the one hand, we are putting public funds into a fish company to operate fish plants in this Province and, yet, the provincial Minister of Fisheries (Mr. Rideout) comes back to the member for St. Barbe (Mr.

Furey) and tells him that that fish plant cannot be reopened unless leasee says so. It would seem to me that if we are going to put public funds into the fish company, we should have some control as to whether that person is allowed to let that plant lie idle. Perhaps the Minister of Finance (Dr. Collins) would to answer the question, why is that the case? DR. COLLINS: Ll917 June 20, 1985 Vol XL Mr. Chairman. MR. CHAIRMAN (Greening): The bon. the Minister of Finance. DR. COLLINS: Mr.

Chairman, first let me point out that in this particular case, Parson' s Pond Seafoods, we gave a guarantee of $40, 000 in order to allow the company to obtain a line of credit. So there has , in actual fact, been no passing out of government funds. MR. TULK: That is not what you are always saying, but you are right. DR.

COLLINS: What happens is that a fishing company, in this case Parson's Pond Seafoods, would go to their bank and say, 'We need a certain amount of money to be able to carry on the operations of the company in this coming fishing season. ' The bank would then investigate the request and, in a case like this, they would come back and say, 'We are not prepared to lend you that money on the basis of your own assets, or on the basis of whatever security you can give us, you will need something additional for us, the bank, to lend you money.' Then they come to us and they ask us to stand behind their credit at the bank.

We investigate, and if we find that, firstly, it is a viable operation and, secondly, that indications are the management is adequate and they know how to conduct the business and, thirdly, that we can get some security for our exposure - and that might be taking a lien on the equipment, or on the plant. They have to own the plant. In this case they lease the plant, so that is not there - or on inventory, or No. 37 Rl917

on stock, that type of thing. In most instances we ask for security so that our position is fully protected if the venture fails. I do admit that occasionally, where a plant operation is very important for the community involved and they cannot come up with full security, that we will assess the social need there and we might well extend the guarantee even though the security is not there.

Finally, we get an assessment done by the Depa .rtment of Fisheries, who tell us whether there are enough fish to be caught in the area, or whether the company can acquire throughput for the plant, and whether there is a likelihood that they have a market in place for the product.

If all those things come up okay, we then give them an assurance, we enter into a formal legal agreeme .nt with them, which is first vetted by the Department of · Justice before it is finalized, a full legal agreement that they will abide by those particular undertakings, that is to operate the plant in such-and-such a way, and to give the security and so on and so forth. Sometimes, having done that, circumstances may change, the bank may change its mind, the operator who came in for the loan guarantee may decide, himself, not to proceed and, of course, in that case the guarantee is not put in place.

Now, in this particular case here, if the hen. member has knowledge that I can check on, recent knowledge that I do not have at the moment, but if he says that, despite having gone through this, given his guarantee, the operation has not started, I can Ll918 June 20, 1985 Vol XL assume one of three things. Either the bank decided against giving the loan, despite our guarantee and, of course, then the guarantee lapses. Or secondly, the owner himself decided, having taken a second look at things, that he does not want to go ahead. In that case, of course, the guarantee will lapse.

Or the third thing will be some unforeseen event occurred which prevented the guarantee from being fully finalized. But, there has been no passing out of funds. There will only be passing out of public funds if the venture gets underway and it fails. In this case we will try to realize on all the security that is available to us which was put in place when the guarantee was entered into. MR. TOLK: Mr. Chairman. MR. CHAIRMAN (Greening) : The hen. member for Fogo. MR. TULK: Mr. Chairman, let me try to be very, very clear to the Minister of Finance (Dr. Collins). DR. COLLINS: That would be a change. MR.

TULK: It would be a change if you could get it through the minister' s head, if you could get something through the minister's head. We know full well what a guarantee means. Unlike the government, when it comes in here - and I do not want to get into this political realm because this is a very serious problem - but the government will come in here and tell us about all the money that they pass out in guarantees when No. 37 Rl918

in actual fact what the Minister of Finance has just said is the truth, that they do not pass out money, they only issue guarantees in case somebody defaults on a loan. But let me make this as clear to him as I can. In the case of Hawkes Bay we have a government that is guaranteeing funds to a Tory buddy of theirs, a Tory campaign manager of theirs, who owns Parsons Pond Seafood Ltd. Now :we are guaranteeing the funds, not much if he operated the plant. This particular person, this particular company, Parsons Pond Seafood Ltd., are saying that they cannot operate the plant in Hawkes Bay.

Is the minister aware that what they are really saying is that until the provincial government gives us $26,000 more, unless they buy out our lease, that plant is going to sit there idle? Is the minister aware of that? Let me ask him that question. Is he aware that Parsons Pond Seafood Ltd. are demanding $26,000 before they will break the lease and allow another company to come in?

Would the minister also answer this: How is it that we guarantee certain companies in this Province money, that we guarantee funds, that we go to the banks and we say to them, 'Yes, back this person up' , would the minister tell us how it is that in the leases that the department puts out, the Department of Fisheries, I suspect, through Treasury Board and through the Department of Finance as well are involved, how is it that all that plant owner has to do is to walk in and say, 'This plant is not economically viable.

I cannot run this plant economically', and all he has to do is keep his lease paid up to the provincial government and that Ll919 June 20, 1985 Vol XL plant sits there idle while sixty people are out of work and while there are two other companies, in this case, one Swedish and one American that are saying, 'We will come in and open that plant and provide sixty jobs'?

Indeed, I understand that the American company in this case may very well be getting into salt fish which I suppose the minister, he claims to come from one of the greatest fish ridings in Newfoundland, I suppose the minister will understand that the curing of salt fish is very labour intensive and indeed there may very well be more than sixty jobs.

Would the minister stand in his place and tell us how it is that we guarantee funds - in this case we are guaranteeing Parsons Pond Seafood Ltd. $40,000 and they are demanding $26,000 in order to break a lease and, in the meantime, a building that, by the way, the minister should know and he probably does not know, that when Bowaters closed down number 7 machine in Hawkes Bay, I think it was a plainer mill or something like that, a plainer mill in Hawkes Bay closed down and the people of that community went to the provincial and the federal governments, in particular the federal government.

The federal Liberal Government of the day put in $300,000 to convert that plainer mill into a fish plant. Now the fish plant sits there idle. Seafood Ltd., the Parsons Pond people that $40,000 to, government guaranteeing lease that, be broken we are guaranteeing the Legislature, the of this Province are $40,000 to have a apparently, can only if the provincial agrees to pay them government No. 37 Rl919

$26,000. Yet the people of Hawkes Bay are staying there. And we talk about creating jobs in this Province. I can tell the minister that there are other people around here who can tell him about other plants operating under the same kind of lease where al l they have to do is walk in and say that it is not economically viable, pay up his lease and the plant sits there idle.

Now would the minister get up and explain how he arrived at that contortion that we now see in some of the fish plants around this Province and, at the same time, get up and tell us how money that he is guaranteeing, as he so fondly says now when he wants to sneak out from under - it is not money that he is putting out but money that he is guaranteeing - is supposed to be put there to create jobs in the Province.

On the one hand he is giving that fish plant - and I will repeat it for him because he is not too bright - he is putting out $40,000 worth of money and on the other hand the company is saying to him, you pay us $26,000 in order to break a lease on a building that belongs to the Province, that was built out of federal Liberal funds, to the tune of $300,000, that was renovated. Now how is that allowed to occur in this Province? Would the minister stand up and try to explain that? MR. CHAIRMAN (Greening): The hon. Minister of Finance. DR. COLLINS: Mr.

Chairman, from what I can gather out of the hon. member's meandering remarks, there are two things involved here. Firstly, someone has a lease on the plant out there, the plant is Ll920 June 20, 1985 Vol XL not owned. Now, if the plant is owned by the Province that is something that is set up between that person and the Department of Fisheries. I am quite sure that when the Department of Fisheries enters into a lease arrangement over a plant they go through much the same bill we go through when we put in place a loan guarantee.

It is investigated in some detail and then, finally, it is put into a legal document in which there are as many safeguards as possible for the person who owns the plant, i.e. the government in this case. That is not something that I am personally concerned with. That is something that the Department of Fisheries and the Minister of Fisheries (Mr. Rideout) is concerned with. But I am quite sure that they entered into a lease in good faith and on good advice. Now, if that plant is not operated but nevertheless the person who leased the plant is still keeping up his payments the lease is not in default.

Everything is legally okay. MR. TULK: There are no jobs being created though. DR. COLLINS: Now, the loan guarantee to give working capital is an entirely separate issue from the lease arrangement. The hon. member seems to be terribly confused about all this, he thinks that the loan guarantee for working capital is the same as a lease arrangement. MR. TOLK: No, not quite. No. 37 Rl920

-"- DR. COLLINS: I do have to point out to him that the two things are entirely, utterly, separate, different, and not the same. If I could think of a few more adjectives to try and drive that home to him I would bring them out. In terms of the loan guarantee, our exposure is secured by the security we take. We are at no risk as long as the company operates and is successful. We are at some risk if the company operates and fails but then we will reduce our risk to the minimum by taking over the security that we put in place, legally, through a legally processed document in the first place.

I do not know how I can explain it any more so. There may be particular things out in Parsons Pond that the hon. member is alluding to in a sort of roundabout w~y but if he has some particular things, I think he should put them out clearly. He has mentioned a number of times that the individual out there supports a certain party but I cannot quite see what that has to do with it. I presume it is permissible, in this Province, to support a party of your choice. You do not have to support a certain party to be able to approach a government in a legitimate way for assistance.

Any person in this Province can come to the government and ask for assistance. That is not to say they are all going to get it, but there is no law that says that certain parties, because they support a political group, are, therefore, forbidden from coming and asking for assistance, but if they do they have to go through exactly the same drill, be subject to the same scrutiny, and have to Ll921 June 20, 1985 Vol XL abide by the same legal documents as someone who supported any other party or indeed supported no party. So I hope that clarifies things for the hon. member. MR..

CHAIRMAN (Greening) : Shall the resolution carry? MR. HISCOCK: No. MR. LUSH: Mr. Chairman. MR.. CHAIRMAN: The hon. member for Bona vista North. MR. LUSH: Mr. Speaker, I am intrigued by at least one word in this particular bill, nAn Act To Amend The Loan And Guarantee Act.n I am intrigued by, 'guarantee.' I did not think this government could guarantee anything, Mr. Speaker, other than unemployment and increasing the public debt. These are about the only two things I thought this government could guarantee.

In terms of a financial sense I would have thought that there signature 'llr-as not worth the paper it was written on. But, Mr. Speaker, not more seriously, but more apropos and more to the point, the minister in introducing the bill, made some allusion to the fact that it was going to create employment or that the government was engaging in this activity of guaranteeing loans to insure employment. Now, I wonder if the minister is in a position to tell how much employment that these loans are indeed guaranteeing? Are they increasing employment opportunity, No. 37 Rl921

are they simply maintaining the status quo, or are they indeed doing anything contributing towards reducing the level of high unemployment in this Province, or, put the other way, increasing the level of employment, or are we just talking about a situation where the government is simply maintaining the status quo? Another point that I would like for the minister to address, Mr.

Chairman - and I never heard it, granted I was out for a few moments - but I wonder if the minister would describe to bon. members the conditions under which these loans are guaranteed, if he would outline the criter ia that is put in place in administering these loans? What kind of businesses qualify? Bas it got to be a particular type business? The minister in introducing the bill took qreat pride in pointing out the proportion of fisheries-related businesses that was included here. Mr.

Chairman, that is a noble thing, it is our lifeblood, it is our number one industry and, certainly, everything has to be done to support that industry, but, Mr. Chairman, one wonders in many cases whether this is not a matter of throwing good money after bad. I am wondering in the guaranteeing of these loans - this is why I so concerned about the kind of criteria that is established - I am wondering what is the state of financial health or what kind of assets a company t.be government loans to them? must will have when guarantee These are important questions, Mr. Chairman.

What companies, what is the financial shape, the financial health, the financial viability of a company before the government Ll922 June 20, 1985 Vol XL will take this measure of guaranteeing loans? I wonder what has been the success of this procedure in the past? What has been its success or what has been its fa .ilure rate? Bow many, for example, are already failures here now in the present bill that we have? Are there any failures here now, because I notice that some of them do not come up to 1985?

We have some listed that the guarantee was in 1984 so I wonder why they are listed now, whether the period has been extended? So, Mr. Chairman, when the minister stands in his place could he comment on the success rate, the failure rate, whichever way the minister decides to attack this question and let bon. members know whether this is indeed a worthwhile practice that the government is in, guaranteeing loans to these companies? Again, I come back to the fact that the minister alluded to all of the fish companies, which I say is certainly a noble thing in view of the fact that it is our number one industry.

It amazes me that I find no more forest-related industries here. I think there is just one, and I wonder what the reason for that might be, whether this is not considered to be as important as fisheries, whether the criteria makes it more difficult for forest-related industries to get guarantee loans because I am sure there must be forest businesses in this Province that could benefit from this system of the government guaranteeing their loa .ns? I wonder if the minister can comment on that? Why we do not see more forest-related businesses included in this list that we have today?

I may be wrong, one could be wrong by the business name but as I look No. 37 Rl922

down through I believe I only saw one that one could associate with the forestry. So, Mr. Chairman, that is a rather important matter. As a matter of fact, why are there not more industries, why it is not more diversified? We have a large proportion of businesses related to the fisheries, just one forest-related business in the whole list. Mr. Chairman, if there were no businesses that contacted the ministry you would almost think he would be going out looking for them when the forestry is so important to this Province.

I am just wondering why there seems to be that lack of participation or the lack of guarantee loans to forestry related industries. That is very, very important. I doubt if there is one there at all with respect to agriculture, and, again, why this lack of proportion or why this excessive ratio with respect to the fisheries as compared to other important industries, the forestry and agriculture?

Is it that these businesses do not know about this system or is it by the very nature of the business that they do not fit the established criteria that the government are using in the determination of whether companies qualify for assistance under this system? So, Mr. Chairman, these are certainly questions that I would like for the minister to address when he stands in his place to respond before we give passage to this Act To Amend The Loan And Guarantee Act. MR. CHAIRMAN (Greening): Ll923 June 20, 1985 Vol XL The hon. the Minister of Finance. DR. COLLINS: Mr.

Chairman, there is actually a fairly simple answer to - I think the main question the hon. member asked - that is why there are so many fish companies here? Out of the thirty-nine items, twenty-five were fish companies. That is a high percentage. The reason for that is simple in that a guaranteed programme was put in place primarily for the fishing industry. The fishing industry did get into a great deal of difficulty as the recession struck this Province.

We were getting approaches, cries of distress from the fishing industry, especially, the smaller producers, the producers that deal with the inshore fishery and, therefore, producers in communities where likely they were the only form of employment. It was a real crisis for these communities and these companies and the fishermen and the plant workers involved. So this programme was put in place primarily for that, and for a while it was more or less confined to the fishing industry of that nature, not the large companies, not your Fishery Products and Lakes and so on and so forth, but the smaller companies.

It was more or less confined to that. But, as the recession continued other industries got into some difficulty and we expanded the scope of the guarantee programme we have in place to include other industries. However, in agriculture, for instance, they have available to them also grants and loans through the Department of Rural, Agricultural and Northern No. 37 Rl923

Development, which is not included in this particular bill here . This particular bill does not relate to that. So they have another source to go to and that is part of the reason why there are no agricultural concerns in here. In terms of the success rate . I am sure bon. members realize that we, in this arrangement, are the last resor t for these companies . I mean , they use their own resources, if they have them . If tlley cannot, they go through the normal banking arrangements and that takes care things. It is on ly when they are down to their last chance , shall we say, that - AN BON. MEMBER: Guarantor. DR.

COLLINS: Yes, the guarantor of last resort, shall we say, that they come to us. As a matter of fact, if they come to us and we feel that there is another avenue they should · pursue we will insist that they investigate that other avenue and try to have that other avenue resolve their difficulties before we put public guarantee behind their credit. When you are dealing with that situation, I mean, clearly you are going to be faced with certain failures. I mean, by the nature of the beast.

If you are the guarantor of last resort, you are going to have a lesser success rate, if you want to put it in those terms, then perhaps somewhere higher up the ladder where there is not as much risk involved. These are risky ventures or they would not have come to us in the first place. As I mentioned in answer to the Ll924 June 20, 1985 Vol XL Leader of the Oppos ition's (Mr. Barry) question there, in this list of thirty-nine there are two where we had to pay out on our guarantee, where the bank asked us to honour our guarantee because the firm itself was not able to meet its commitments.

So there are two out of that thirty-nine. That gives some indication of the success of failure rate. It varies. Many of these companies have got through a very difficult recessionary period and are now no longer in need of guarantees. Our guarantee elapses. They do not ask for it to be reinstated or extended. They have gotten through that period of difficulty. But will always be a certain number of failures here and we accept that because the overall good far outweighs the percentage failures. MR. LUSH: So there are enough success stories to carry on. MR. W. CARTER: Mr. Chairman. MR.

CHAIRMAN (Greening) : The bon. member for Twillingate. MR. W. CARTER: Mr. Speaker, I just want to have a few words on this bill ~ I am not at all against the principle of government guaranteeing loans to enable our resource-based industries to become viable operations. I wonder would the minister, Mr. Chairman, tell the Committee - he a moment ago outlined the mechanics of applying for and getting a guarantee. I noticed in his comments he did not make any reference whatever to personal guarantees on the part of the plant owner. No. 37 Rl924

For example, anybody today who is unfortunate enough, maybe, to have to go to the bank to borrow money whether it is for a small business or otherwise, well naturally, if it is a personal loan, you would personally guarantee the loan, but certainly in the case of the small business operator, I do not think you can get a loan today from any chartered bank without the principals of that company being prepared to personally guarantee the loan themselves.

I suppose it can very well be said that if a person does not have enough faith in the operation for which they are borrowing money, to put up their own money, or, at least, their own guarantee, then why should they expect the people to put up a guarantee? It seems to me that in many cases, certainly were there is a limited liability company, as most of these companies are, I do not see too much wrong with expecting the owners of the plants to put up a personal guarantee.

For example, I think the minister mentioned that when a guarantee is given that there is a first mortgage, I presume, given the bank, I presume that the lending institution will take a first mortgage on the property itself. Is he saying that the government will have to take a second mortgage for example, to protect the guarantee? If that is the case, I do not think any of us would put much stock in a second mortgage on a defunct fish plant. That is one question I would like for the minister to answer. If, in fact, thought is being given to that. I might add, Mr.

Chairman, that in cases where borrowing money fishermen to buy or are build Ll925 June 20, 1985 Vol XL boats, I believe they are required to give a personal guarantee. Certainly, with the new policy of the government, where fishermen are forced to go to the lending institutions where monies sought are in excess of $50,000, that fisherman I understand, whether he is a limited liability company or not, would be required to give a personal gurantee to that $50,000 or more loan. If that is the case then, is it unreasonable to expect the operator of a small fish plant to give a similar personal guarantee?

I know that most private entrepreneurs would shy away from doing that sort of thing, but if they are going to expect the people to guarantee loans, well, is it asking too much to expect them to do likewise? Mr. Chairman, I notice in the

schedule here, there are a number of companies that I believe are now defunct, or certainly some plants owned and operated by some of these companies have since closed. I wonder can the minister tell the Committee what rate of success we are having in terms of recovering in cases where we are called upon to honour the guarantee given by government? What are we doing in terms of trying to collect those funds from the plant owners? The point raised by my colleague from Fogo (Mr. Tulk) I think is a good one.

The minister said that there is no relationship between a lease on a government-owned facility and a government guarantee with which gives that company funds to operate. I think there should relationship because cases, in fact I had No. 37 in two be a many calls Rl925

last night from the district represented in the House by the Minister of of Education (Mr. Hearn), the member for St. Mary's-The capes, I had two calls last night from his constituenc y, from people there asking me what is going to be happening to the plant in that community? For example, in the community of Branch there is a small fish plant built by government funds that is now lying dormant. I believe the company that has got a lease on that plant is one of the companies that is shown in this list here, a company that is now getting a loan guarantee. Island Seafoods for example, Mr. Chairman, $500,000.

They own and operate the plant in my district, Herring Neck. I am hearing rumours that there are going to have to be some extensive improvements made to that plant, both in terms of the physical structure of the building, and the equipment, if it is going to continue to operate-. I would certainly like to see the government make that a condition of the guarantee that the moment that plant ceases to be of any use to them, well maybe once they get a plant that at least appears to be more viable, then they would probably close up the Herring Neck plant and leave in its wake a trail of human misery, unemployment.

I believe the government would be well within its rights to expect these companies who get these guarantees to give some kind of an undertaking that the plants for which the guara .ntees are being give .n will continue to operate, all things being equal. We do not entrepreneur expect to the private continue to Ll926 June 20, 1985 Vol XL operate a company that is - losing its shirt, but I am inclined to think, Mr.

Chairman, these loans , especially when they are not personally guaranteed, that sometimes it is the line of least resistance, if t.hey find that by getting out from under they can save themselves money in the future, or the trouble of trying to rehabilitate a plant that is going down for the third time, then I suspect that human nature being what it is t.hey will take the line of least resistence and maybe skin out from under as it were and in many cases leave the government holding the bag. I do not think any company, Mr.

Chairman, should be allowed to lease a premises from the government and to be able to sit on that property, as it were, almost indefinitely, because they can turn it into a viable operation. That is what is happening. I know of several plants in this Province that today are lying dormant, not employing a single person. The owners are still hanging on to those plants under the terms of their contract. Maybe they are meeting the monthly rent but I think the minister will have to agree that in most cases paying the monthly rent on a government facility is no great hardship because the rents are scaled down.

It is only a token payment, in most cases. So I believe that in cases where properties are now dormant, lying idle, the government should have the authority under the terms of their lease to move in and find out what is going on. And if in fact the company is trying to pull a fast one at the expense of the people in the community, and the government, then they should be No. 37 Rl926

able to take the appropriate action. It is interesting, Mr. Chairman, to see some of these small plants that have gotten guarantees, but I would also, before I take my seat, remind the government that maybe some of these plants would stand a much better chance of becoming viable operations if the government were to give some thought to deregulating small business.

I know, and I have said it before, that it is virtually impossible today for a small businessman in this Province, whether it is a small fish plant operator, a corner store operator, a service station operator, or the owner of a tourist home, to survive. He is being harassed almost constantly by government bureaucrats, by regulations that are being imposed by the municipal, provincial and federal levels of government, left right and centre. He is being driven into the ground by governments.

We hear ministers, especially during election periods, talk about the importance of small business to the economy of the country. In fact, I believe there is a statistic now that says 65 per cent of all those employed are employed by small business, businesses employing so many people and under. I would suggest to you, Mr. Chairman, that government, and again I say all levels of government, are killing the goose that is laying the golden egg. We are killing the goose that is laying the golden egg, certainly as far as employment goes. Almost on a daily basis, if one were to drive around St.

John's, and, I suppose, a similar situation prevails all over the Province, you can see where small businesses Ll927 June 20, 1985 Vol XL are closing up. Stores that were one time providing a livelihood for the owner and probably his son and daughter, and maybe a couple or three other people in the community were deriving a livelihood, maybe not a big living but certainly a living, from that small business, are now being denied that opportunity. They have just had enough, people can be pushed just so far and eventually it comes to the point where they throw their arms up and say, What is the use?

Why am I struggling to stay afloat? And I think most small businessmen will agree. You know, you do not have to be in business very long before you get the impression, rightly or wrongly, that government is not interested, and when I say government, all levels, in promoting small business or in doing anything of a constructive nature to ensure that that small businessman is given a fighting chance. I would strongly urge the government opposite, Mr. Chairman, to give some serious thought to looking at all regulations concerning small business. Maybe the time has come to take a look at all government regulations.

I recall during the government headed up by the former Premier, Mr. Moores, that in that period serious thought was being given it, and, I believe, some action was taken to look at all government regulations to see just how many of them were unnecessary, how many were defunct, or repetitious. In fact, I had the impression that something would be done about them, but obviously it was not. The municipal council, creature of Why would for the this example, is a government. No. 37 Rl927

government not lay down the law to their creatures, to their children, as it were, that they too must start looking at regulations and finding ways and means of lessening the burden, making life a little easier for people in small business" I can tell you now, Mr. Chairman, that we have a serious unemployment problem in this Province, we all know that, and a large part of the blame for it rests, I would think, with government red tape, government red tape at all levels. A member of my family, my son, had a small business downtown in which I had some interest.

He had to deal with eleven different levels of bureaucracy in order to exist, eleven different departments of government, municipal, provincial and federal. In fact, he was being harassed to such an extent that he decided to throw it in, sell it, and I fear a lot of people today are doing the same thing. In fact, I can name dozens if I wanted to. AN HON. MEMBER: Bow is the business, anyway? MR. W. CARTER: Well, thanks to government regulations the business is no longer in the Carter family. Because you can just take so much, especially a young man.

Be does not have to sit there and see some bureaucrat moving in from some government department with his little red or green book laying down the law, reading out the regulations, reading the riot act, telling him what to do in a fashion that was almost reminisce .nt of Gestapo days, laying down the law - everything but the jackboots - do this or else, you have so many hours, so many days to comply, otherwise, we Ll928 June 20, 1985 Vol XL will close you - up or we will drag you into court, we will do all sorts of weird and wonderful things. People today are not going to take that kind of nonse nse .

I would strongl y urge that somethi ng be done abou t it, Mr . Chairman, because it is a very serious problem . Again the minister, I would expect, should at least inform the Bouse exactly what is required of a person seeking a government guarantee. Is a personal guarantee required? If not, why not, when it is sought in alm ost eve .ry other area of busi ness today ? If any member of this House went to the bank as a director or as the owner of a smal l company and wanted to get a loan , I am sure the bank would not entertain an application without the promise of a personal guarantee.

Why are fish plant operators any different? I think my time has expired. Thank you very much, Mr. Chairman. MR. CHAIRMAN (Greening): I wish to inform the hon. Bouse t.here are two questions for the Late Show. One to the hon. the ~nister of Intergovernmental Affairs (Mr. Ottenheimer), and one to the hon. the Minister of Environment (Mr. Butt). MR. OTTENHEIMER: What are the topics related to? I do not think I have been asked a question this week. I was out of the Province Monday, Tuesday and Wednesday. MR. CALLAN: This question was asked on Friday. MR. OTTENHEIMER: Oh, yes.

It goes from Friday to Friday, does it not. MR. CHAIRMAN: It is on behalf of the President No. 37 Rl928

~ of the Council. MR. OTTENHEIMER: Yes. Well, what are the topics? MR. CHAIRMAN: A senior citizens home in Bay d'Espoir. MR. OTTENHEIMER: That is to whom? MR. CHAIRMAN: That is to the hon. the Council. The dissatisfied with given. MR. OTTENBEIMER: President of member was the answer A senior citizens home in Bay d'Espoir? MR. CHAIRMAN: Yes. MR. OTTENHEIMER: And what is the other one? MR. CHAIRMAN: The other one was to the hon. Minister of Environment by the hon. member for Gander. He was dissatisfied with the answer given to a question. MR. OTTENHEIMER: We have to know what the subject matters are. MR.

CHAIRMAN: PCBs. MR. OTTENHEIMER: How do you spell that? MR. CHAIRMAN: P-C-B. The hon. the Minister of Finance. DR. COLLINS: Mr. Chairman, I think when the hon. member started and, indeed, Ll929 June 20, 1985 Vol XL when he finished also, he commented that government may be being too lax in terms of the private entrepreneur in the use of public guarantees and possibly public monies. Then in the middle he sort of said that governments may be too hard on the private businessman in terms of regulations and requirements and so on.

I am not saying he is wrong in either of those, but I am saying that that points out the difficulty in running this sort of programme. Every approach is a judgement call: Do they really need it? Is it really required that the public credit be put into this thing? Is there enough, shall we say, importance to the public welfare to justify putting the public credit into it? On the other hand, is one being too harsh, is one 1 taking too stringent a view of the business when possibly the person coming to get help has spent years building up the business? Perhaps his family members are reliant on it.

Often members of the community are reliant on it and suppliers are reliant on it, and so on, and so forth. So you have to try and weigh, on the one hand, the need for public 'involvement, and, on the other hand, you have to weigh the anguish, the difficulties, and the hardship if you do not step in and do something to help out. We try to do the best we can on this. On the personal guarantees, when I spoke of our taking whatever security is available, that involves if we can get any personal guarantees. If they are available, we will go after them.

Quite often, especially when the small entrepreneur is involved, he has already used up any resources, including his own personal credit lines, to the maximum extent and No. 37 Rl929

there is no personal guarantee available. So, therefore, we are then down to getting our security in terms of fixed assets or inventory or equipment and that type of thing. But if there are personal guarantees available, yes, we roll that into the security that we demand. We always ask for personal guarantees. Indeed, we sometimes ask, although I am sure hon. members will realize there are difficulties to this, we often ask for a mortgage on the individual's personal property, in the form of his house, for instance.

But, as you know, that is a difficult one, because who is going to throw a family out into the street if the venture fails? So you have to weigh the value of obtaining that type of thing. But if personal guarantees are available, we get them. In terms of mortgages, sometimes we will take a second mortgage if that is all the security that is available and we decide to go ahead with giving the guarantee. We try to get a better form of security if it is available. If there is a first mortgage available, obviously we will get that rather than a second, and other forms of security that I mentioned.

The hon. member also wondered about the success rate. I think I did refer to that when I answered a previous question, and I did point out that we can expect in this type of programme to have a certain number of failures, because we are the guarantor of last resort, but our success rate perhaps can be measured by the fact that there are thirty-nine items here and, so far, we have had to pay out on just two of them. I am not saying that that Ll930 June 20, 1985 Vol XL is always the case. Sometimes there is a greater number of losses in a year than in other years, it is a variable thing.

Mr o Chairman, in terms of monitoring, what we do is we request firstly that they agree to give us r13gular financial statements, and we ask them to give it in a certain form~ because some of these small companies, when they come in for guarantees and we look at the way they handle their business, we find it is done in a less than ideal manner.

So we say we must have this type of information coming in on a regular basis, and if you do not have the set-up currently to do that, well, if you want th .e guarantee, you will have to practice good business methods in such a way that we can get 1the information we require. We have in place officials from the three departments, Development, Fisheries and Finance, who meet regularly to assess this information that is coming in, and there are quarterly reports to Cabinet on the basis of these officials' work.

Sometimes we will ask that we put someone on the board of directors, if there is such a thing in place in these companies, to carry out monitoring and surveillance for us, especially if the guarantee is of a large amount. I believe, Mr. Chairman, those are most of the concerns that were raised. I think it is a very good programme. It is a programme that was absolutely necessary in the circumstances, and I think it will continue into the future although, obviously, the programme will be less active during good times than during hard times. I believe that the success rate certainly No. 37 Rl930

justifies our getting into it and continuing with it, and if we did not do it, there would be many more failures and much higher unemployment in this Province than if we did not have the programme in place. MR. CHAIRMAN (Greening): Shall the resolution carry? MR. DECKER: Mr. Chairman. MR. CHAIRMAN: The hon. the member for the Strait of Belle Isle. MR.

DECKER: The whole notion of the government getting involved into the free economy is me, as I troublesome Minister Collins). a troublesome one for am sure it is also for the hon. the of Finance (Dr. you know, involved in should the The question always is, should government get free enterprise, or government not get free enterprise? involved in MR. TOLK: To be or not to be. MR. DECKER: To be or not to be is a good question. There are dangers. Every time the government gets involved, Mr. Chairman, there are bound to be dangers.

For example, the Minister of Finance made a statement that out of thirty-nine guaranteed loans, the government only had to pay on two, only two defaulted. Now, that suggests to me, Mr. Chairman, that thirty-seven of those companies were not what you could consider high-risk. So the next question that would logically come to mind is, Why did the banks not finance those companies?

If you Ll931 June 20, 1985 Vol XL have thirty-seven companies out of thirty-nine who prove that they pay off their loans and they are successful, that tells me something about the banks when they would not get involved in financing those companies. I would suggest to the Minister of Finance that the banks know full well that if some company which happens to have a little bit of political clout can put up a good enough argument, then the government is going to come in there and take away all risk from the banks.

So we have an elephant trampling its way into free enterprise, taking all elements of risk away from the banks. In my view, Mr. Chairman, it is not the place of this government to get into the free marketplace and do the work that banks and finance companies should be doing. I wonder how the Minister of Finance (Dr. Collins) feels about that? Does he think that the government should get involved where banks should be doing the work?

The other thing that bothers me and that I would like to address: A company which becomes sick, unable to carry its weight, the logical thing to happen to that company is for it to die. Now, it seems to me that-- when the government begins getting involved in free enterprise, the government is treating a company almost as if it were a person. So what if a company dies? What is the big deal? 1Ah, 1 you are going to say, •now, you want to do away with jobs.• Well, let us look a little closer. I look into this list of guaranteed loans.

There is Hawke Industries, a company up in Hawkes Bay, the owners of which are definitely not Liberal, I can assure this hon. Bouse. One of their major contracts is to truck No. 37 Rl931

the ore from the zinc mine in Daniel's Harbour to the point of shipping, in Hawkes Bay. Now, I would suggest, Mr. Chairman, that it is the responsibility of that company, a major company which owns that zinc mine, to truck the zinc from Daniel's Harbour to Hawkes Bay to be shipped by vessel.

That is their responsibility and it does not matter the least little bit to me or to any other taxpayer in this Province whether Hawke Industries happens to be the company which is trucking that ore, or whether the Moffatt group happens to be the company which is trucking that ore, or whether Day and Ross is trucking that ore. It does not matter who trucks it. It is none of this government's business whether Hawke Industries is going to live or sink or swim, that should not concern the government. What should concern the government, I would suggest, Mr.

Chairman, is whether or not the truck drivers' jobs are saved. That is our interest. Surely, you are not going to tell me that because Wally Maynard happens to be a Tory we are going to try to keep his company alive? Of course not! That would be belittling, and the Minister of Finance (Dr. Collins) is much too honourable a man to even suggest that that would have been a factor. I should be ashamed, Mr. Chairman, to even mention such silliness. Can that be stricken from the record? It is foolishness. That is not a factor?

The factor is, whether or not Hawke Industries survived, some trucking firm would have had to bring the zinc from Daniel's Harbour to Hawkes Bay. Now, that is a fact. The zinc mine is not so bad off that it cannot truck its own zinc, or that it cannot enter into a contract with a dozen Ll932 June 20, 1985 Vol XL other truckers in this Province. So that pa rti cu lar company, Mr. Chairman, I am sug gesting to this hon. House, did not create any jobs that wo uld no t have existed upo n the dea th of that co mpan y.

So I am aski ng th e hon . ministe r, if Haw ke I ndustr ies f ound itsel f in th e pos it ion wh ereby it co ul d not survive without a government guarantee, what would have been the big loss if we had allowed it to go under? I am suggest in g - an d I wan t to hear what the Minist er of F inance (Dr. Collins) ha s to say - that we would not ha ve lost one single job: what we would have done is we would ha ve just al lowe d one sick, weak company to die, which it should have done. After all, Mr. Chairman, companies are not people, when a person is sick and on the point of dying we, as people - AN HON.

MEMBER: Make away with them?. MR. DECKER: Mr. Chairman, do you want to make away with people when they are sick? AN HON. MEMBER: That is what you are suggesting •• MR. DECKER: Are you suggesting that we kill people when they are sick? MR. J. CARTER: No. AN HON. MEMBER: Are you suggesting we make away with them?. MR. DECKER: This is the point I am making. The Tory members are looking at companies as if they were people. No. 37 Rl932

~.t A company, Mr. Chairman, artificial person. That definition of a company. MR. J. CARTER: is is an the Are you suggesting that companies are people? MR. DECKER: I am suggesting, Mr. Chairman, that if a company is sick and on the point of dying that the company be allowed to die. Do away with the company. If a person is sick we are obligated, and it is my intention, it is all our intention, to do what we can to save that person. But when you start bailing out - SOME BON. MEMBERS: Oh, oh! MR. DECKER: Is that clear? AN BON. MEMBER: No. boy! MR. DECKER: It is not clear. Well, I will try again, Mr. Chairman.

I am saying, Mr. Chairman, that a company is a servant, a company is an artificial person, a company is a creation of man put together for tax breaks and what have you. If a company is sick unto death, let it die unless the result of its dying is great, but a person dying we try to save. This government is treating companies as if they were people. Or, I should say, this government is treating some companies as if they were people, because in the case of one company in Hawkes Bay, had that company died another company was waiting to take its place. MR. YOUNG: How about a company in Roddickton?

Ll933 June 20, 1985 Vol XL MR. DECKER: If a company in Roddickton were to die, for example, the lumber company in Roddickton, if that c