October

28, 1991

HOUSE OF ASSEMBLY PROCEEDINGS Vol.

XLI No. 61

The House met at 2:00 p.m.

MR. SPEAKER (Lush): Order, please!

The hon. the Member for St. John's South.

MR. MURPHY: Thank you very much, Mr. Speaker.

During our short recess this summer, we were very fortunate,

in St. John's, and not only in St. John's but throughout the Province, under the

capable direction of Mr. Mike Donovan and through Her Worship, to obtain the

first professional franchise associated with the Province, namely, the St.

John's Maple Leafs. I know that not only has it helped the social and sports

community of the city but it also is a good source of revenue for the city and a

great social event for the Province, as well. So I would, through you and the

Chair, Mr. Speaker, ask that this hon. House write a letter to Mr. Donovan,

congratulating him and his Board of Directors on the franchise, the St. John's

Maple Leafs.

Thank you.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for St. John's East

Extern.

MR. PARSONS: Thank you, Mr. Speaker.

This side of the House, certainly, Mr. Speaker, endorses all

the sentiments of the hon. the Member for St. John's South, and we hope that the

St. John's Maple Leafs will have all kinds of luck, as they did in their few

games. In saying that, Mr. Speaker, I did not have the opportunity to see either

of the games but I am contemplating attending on Wednesday night; after that,

hopefully, I will be in a better position to address the capabilities of that

fine team.

Thank you very much, Mr. Speaker.

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, I just want to take the

attention of the House for a minute or two, on behalf, I am sure, of all members

of the House - but I will let a representative from the other side speak to the

matter - to extend a warm welcome to the newest member of the House, Mr. Harold

Small, the new Member for Baie Verte - White Bay.

SOME HON. MEMBERS: Hear, hear!

PREMIER WELLS: Mr. Small's family, wife and daughter, are

also in the Chamber today and I extend a warm welcome to them, but I extend a

very personal welcome to Mr. Small. He has participated in public life in this

Province extensively in recent years. He tried on one previous occasion to seek

membership in this House but was not, at that time, successful. This time he was

successful. I am confident that he will be an able representative for the

district of Baie Verte - White Bay and will also be a member of this House who

is concerned for the whole Province and, indeed, for that matter, for the whole

nation. Speaking on behalf of this side of the House, Mr. Speaker, I extend a

warm welcome to Mr. Small and look forward to his continuing to be a member for

many years to come.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Leader of the Opposition.

MR. SIMMS: Thank you, Mr. Speaker. On behalf of the

members on this side of the House or, at least, those sitting in the Official

Opposition caucus, I, too, wish to congratulate the Member for Baie Verte -

White Bay. I bring personal greetings to him on behalf of his brother, Mark, who

asked me to pass along his congratulations, as well.

I must say, Mr. Speaker, at the outset, that we kind of

thought the campaign was going to be a tough one, and that the margin of victory

would produce the results it did. In fact, we had predicted that it would be a

small victory, and everybody agrees with us that it would have been. But, on

behalf of this party, Mr. Speaker, we congratulate the member on his election.

We look forward to his participation in the legislature, and we hope sincerely

that he enjoys his tenure here in the legislature, however long that may be.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Before recognizing the Government House

Leader, if I might just bring to the attention of hon. members, a point which

will help in the smooth operating of the House in the future: All hon. members

might not know the daily procedure in this House for standing when the House

opens - when members want to make statements about various things, that we have

been allowing - as we know, not in our Standing Orders, but we have been

allowing these things, and if the House allows it we can do anything - that

nobody is permitted to stand until the Chair says 'Order'. Of course, that is

for a very obvious reason, because if members are allowed to stand as soon as we

get in the House, it is going to be very difficult for the Chair to know whom he

saw first. So if a person stands the minute he comes into the House, hon.

members will appreciate that it makes it difficult for the Chair, but if members

only rise when the Speaker says 'Order', it gives the Speaker a little more

opportunity to catch whoever is standing. So I will just bring to the attention

of hon. members, the procedure in this House has been that nobody ought to stand

until the Chair calls order.

The hon. the Government House Leader.

MR. BAKER: Thank you, Mr. Speaker. I would like to draw

to the attention of members, the fact that there have been some very important

changes in the last few months in the House.

I direct to their attention the fact that we have three new

Pages. The function of a Page, as everybody who sits in this House knows, is a

very important one. There are things that simply happen, things appear

magically, and the process goes on very smoothly because we have Pages who are

very efficient and do their work well in this House.

I would like to welcome the three new Pages from Bay

d'Espoir, Bay Roberts and Mount Pearl, I believe. I hope they will enjoy

themselves as much in the House as we do and learn as much as we do.

MR. SPEAKER: The hon. the Opposition House Leader.

MR. MATTHEWS: Thank you, Mr. Speaker. I would just like

to join with the Government House Leader in welcoming to our legislature the new

Pages who are with us today, and tell them that we look forward to working with

them.

On my way into the House today, I met a couple of the new

Pages. I think they are going to be quite an addition to the legislature, along

with the new Member for Baie Verte - White Bay. I say to them, it is nice to see

you here and we look forward to working with you.

Oral Questions

MR. SPEAKER: The hon. the Leader of the Opposition.

MR. SIMMS: Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SIMMS: Mr. Speaker, I think it is pretty evident to

anybody who might travel around the Province these days, that we are, in fact,

facing an economic crisis. It is partially due to the recession, as we all

understand, but I think the situation is much more severe here in this Province

than it need have been, and that is probably because of the regressive fiscal

measures taken by this Government and indeed, their lack of economic planning.

I want to ask the Premier, will he, during this fall sitting

of the legislature, bring forward a strategy, a plan, that would deal, now, with

the present economic crises, and that might stimulate economic growth, now, not

twenty or twenty-five years from now?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, as all members know, you have

to run the economy on a managed basis with long-term planning and we are in the

process of doing that. Every now and then, however, the economy runs into

difficult circumstances, like the Newfoundland economy has run into this year,

with the effects of the national recession, to which the hon. the Leader of the

Opposition referred. But also, there have been the particular effects of first,

a substantial reduction in the total allowable catch, generally, and then, the

disastrous inshore fishery of this particular year. The overall impact on this

Province has been tremendous, as a result of that.

Now, fortunately, Mr. Speaker, the Government of this

Province had economic development planning and programmes in place, so that the

net effect on this Province of the economic recession has been far less severe

than it has been on the nation on average, and certainly, far less severe than

it has been in terms of Ontario; the impact has not been as severe, although it

has been substantial.

Now, Mr. Speaker, in answer to the specific question of the

Leader of the Opposition, I point out that the Government announced the

programme to which he was referring some three or four weeks ago, when we

announced the Employment Generation Programme that would expend some $14

million. It was done at the same time the Federal Government announced its

programme specifically orientated towards the fishery. We wanted the two dealt

with at the same time so that we would have all sectors of the economy covered.

So that programme is in place. And, just today, you hear a federal official

saying he finds signs of optimism that the Province is near economic recovery,

and he went on to spell out the basis on which he came to that conclusion.

So, Mr. Speaker, while I do not say that economic recovery is

going to happen tomorrow or the next day, I can say that we have managed the

economy well and have already taken the steps to which the hon. the Leader of

the Opposition has been referring.

MR. SIMMS: A supplementary, Mr. Speaker.

MR. SPEAKER: The hon. the Leader of the Opposition, on a

supplementary.

MR. SIMMS: Mr. Speaker, to say that the effect of the

recession has not been as severe in Newfoundland as elsewhere in the country is

pretty cold comfort to the thousands of Newfoundlanders who are unemployed in

this Province today, and I have my doubts if that is, in fact, an actuality.

Now, Mr. Speaker, the Government has had nearly three years

to show some action in this particular area. Next April, for example, they will

be staring their fourth year in office. The people out in the Province are

asking for the Government to provide some action now. I want to ask the Premier

a specific question. The reason I ask it is because I have recently held a

series of meetings with a number of private sector employer groups who have said

to me, specifically - the groups in the construction business for example - that

they have, in fact, curtailed their hiring because of the Government's payroll

tax. I want to ask, on their behalf, in particular, will the Premier consider

eliminating the payroll tax in order to stimulate growth and in order to perhaps

get some job creation going in this Province? Would he consider that?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, virtually every other

province in the country has a similar tax for an obvious reason. It results in a

substantial contribution by the Federal Parliament and the Federal Government

into the Newfoundland economy, instead of placing an even greater tax burden on

the people of this Province and the businesses of this Province, as would be

necessary if we were to eliminate, immediately, the payroll tax.

Mr. Speaker, the tax measures that the Government will take,

will, of course, be announced, in due course, in the Budget. It is not

appropriate for me or any other official of Government to express a view as to

what we are going to do except in the budgetary process or some other process

that is part of a governmental tax reform process.

MR. SIMMS: A supplementary, Mr. Speaker.

MR. SPEAKER: The hon. the Leader of the Opposition, on a

supplementary.

MR. SIMMS: Mr. Speaker, I think the Premier might want to

check his facts, but my understanding is that not nearly every other province in

this country has a similar tax. My understanding is that there are two for sure,

and possibly a third one, Manitoba, which I understand is considering

eliminating the payroll tax.

MS. VERGE: They have decided to phase it out.

MR. SIMMS: They already have decided, I think, to phase

it out. So it is not accurate to suggest that this is a similar tax to most

other jurisdictions in Canada. Perhaps he was not aware of that. Now that he is

aware of it, if, in fact, he confirms it, maybe he might want to reconsider his

answer.

But I want to get to another issue. Other provinces, I

believe, Saskatchewan, Prince Edward Island and, most recently, the Province of

Quebec, have either cancelled or they have announced plans to postpone their

thinking or their plans to harmonize their provincial sales tax with the GST

because of the harmful effects they feel it might have on their own economies at

this point in time.

Would the Premier consider following the example set by those

particular jurisdictions or at the very least perhaps delay any plans he might

have for broadening the RST for a period of a year say?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, I do know that Quebec,

Ontario and Manitoba at least, and Newfoundland, but those other three provinces

besides Newfoundland, and I will find out what other provinces, if any, have it,

but that amounts, Mr. Speaker, to two-thirds of the population of the country.

So that is a fair indication that most Canadians are subject to this particular

tax, that is at least two-thirds of the population are subject to this

particular tax.

With respect to what the Government is doing in terms of the

RST and the consideration that is being given to harmonizing the RST with the

GST we are, Mr. Speaker, looking at that as was announced in the Budget last

year. There was a White Paper tabled and we have invited commentary from

different sectors, business and labour sectors in the Province to get their

response to the proposal so that the Government can take all these concerns into

account. We are at this very time, Mr. Speaker, extensively engaged in a

thorough assessment of it. I can assure the House that we will not be

implementing a proposal that will be harmful to the Province, whatever we bring

forward we feel confident we can justify it as being in the best interest of the

Province.

MR. SIMMS: A final supplementary, Mr. Speaker.

MR. SPEAKER: The hon. the Leader of the Opposition on a

final supplementary.

MR. SIMMS: If I may, I thank the Premier for the answer.

I wonder if the Premier would go a little bit further because

let's face it the Budget was brought down nearly seven months ago and certainly

that has been enough time, I think, to deal with it in Cabinet. The Budget was

brought down some time in March I think it was. I wonder, if the Government

decides to proceed with some form of tax reform which could, in the opinion of

some people, perhaps damage our economy, it depends, I wonder if he would at

least assure the people of this Province that any tax proposals he puts forward

in terms of a reform package would be referred to a committee of the Legislature

to allow that committee to have full public hearings around the Province so that

the people of this Province would have an opportunity to have their say and

express their views as to whether or not it will hurt them or not?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: No, Mr. Speaker, I cannot give a

commitment to that. When we bring in tax proposals it may well be part of our

overall budgetary process so we cannot hold that up on the basis of such a

commitment.

I do point out that we put forward a variety of proposals and

issues for consideration and people throughout the Province have been writing in

and expressing their views over the last six months. So that has already been

done extensively. Now, if circumstances are such that we can do it, then I have

no quarrel with allowing it to be fully and thoroughly discussed through that

method. But normally taxation measures are part of a budgetary process that must

be debated and implemented within a reasonable time, and the time to take it

around the Province through a committee is not really available in those

circumstances. That, Mr. Speaker, is one of the reasons why we took the approach

we did last year of outlining a number of suggestions for consideration and

putting it out for public consideration at that time.

MR. SPEAKER: The hon. the Member for Mount Pearl.

MR. WINDSOR: Mr. Speaker, I would like to ask the

Minister of Finance a question: In recent days the Premier has been quoted

through the news media as saying that he now feels that the deficit for the

current fiscal year may be even more severe than was predicted in the Minister's

last Budget. In other words the Premier is starting to pave the way to admit

that the Opposition's estimates were far more dependable once again this year

than the Minister's were.

Would the Minister like to tell us, what are the latest

projections of the deficit? What can we expect to see at the end of this fiscal

year?

MR. SPEAKER: The hon. the Minister of Finance.

DR. KITCHEN: Thank you, Mr. Speaker. I would like to take

this opportunity of saying that when we started off last March we were

estimating that our deficit on current account would be $54 million and our

expenditures on capital account would be $240 or $241 million, for a total

deficit of $295 million.

We are expecting a six month statement shortly from our

officials. But based on the figures to the end of August, five months, our

current account situation has deteriorated by about $13 million, which is

largely the result of the special payments to get the economy going - those

special events, hiring and so on, about $14 million. On the other hand our

capital account is under-expended by about $17 million. So that looking at it

right at this moment it looks like our projected current account deficit might

be as much as $67 million with our capital account about $224 million.

Now, I had better bring you up to date on something else that

happened. The other day all provinces got notification from the Federal

Government about equalization. Our equalization was down something like $17

million. But we had made provision for $15 million in the estimates that I just

told you about. So that is an extra $2 million on current account. So that it

looks like now we are up to $69 million deficit, or a $15 million overrun. But

our capital account is still about $17 million below, so that on balance we are

a bit to the good, about $2 million, putting current and capital together which

we must, I guess. Or you do not have to, but it is one way of doing it, and the

way I prefer to do it, to look at both overruns.

Now there is a cloud - I might as well come up front. If my

answer is too long, Mr. Speaker, I will stop.

MR. SPEAKER: I was about to remind the Minister

(Inaudible).

DR. KITCHEN: Maybe the Member might want to ask another

question.

MR. SPEAKER: As long as I did not hear any complaints

from the other side. The Member wanted to get the answer.

MR. WINDSOR: It has been so long since we have heard the

Minister (Inaudible).

MR. SPEAKER: So the Minister can answer. Quickly, please.

DR. KITCHEN: Yes, you just love hearing my voice, right?

Almost as much as I do. Thank you very much.

Mr. Speaker, our officials in the Department of Finance try

to estimate what is happening to the Canadian economy and what might happen to

equalization payments. Because as you know the equalization payments depend to

some extent on what is happening nationally, and on other events - population

changes and things like that. So we look at whatever good figures come out. The

official ones are those that come out of Statistics Canada; they are not

available yet. But we will know more finally in January or February.

But in the meantime we have been looking at figures that have

been released by the Conference Board. The Conference Board is now predicting

that we might be hit in January or February with a total of $20 million extra,

that includes the $17 million. Or, they are not predicting but our officials,

looking at conference board data on the economy, are predicting that we might go

down as much as $20 million of which $17 million is already anticipated. That is

an extra $3 million.

AN HON. MEMBER: Is that an extra $20 million or an extra

$3 million?

DR. KITCHEN: No, an extra $3 million. The figures that

are released by the Royal Bank that we plug into our calculations indicate it

might go as high as $40 million so that is about as good as we come up with at

the moment. There is an old set of estimates, a couple of months old, that we

got from the Toronto Dominion Bank which indicates that it might be even worse

than that, but our best guess at the moment is that we might be hit by another

$3 to $20 million extra. Now, that is the best we can say over and above where

we are now.

Thank you, Mr. Speaker.

MR. SPEAKER: The hon. the Member for Mount Pearl on a

supplementary.

MR. WINDSOR: I thank the Minister for that information.

After a whole Summer's silence it is nice to finally hear the Minister give some

information as it relates to the financial situation of the Province. The

Minister has just told us, and quite correctly in fact, told us that the Federal

Government has just given them some indication of what the normal semi-annual

adjustment to transfer payments would be. It is approximately $17 million. It

may go up by plus $10 or plus $20, or minus $10 or minus $20 every year. It is

amazing therefore the Premier had to fly off to an emergency meeting in Halifax

last week to meet with the other Premiers because of this situation. The

Minister now is confirming that there was nothing so startling about that

adjustment whatsoever.

Mr. Speaker, let me ask the Minister this, then, since he has

given us some idea of what federal transfers will be: He has given us some idea

that capital account will be down, no great surprise, because this Government

deliberately refused to allow municipalities to call tenders for water and sewer

and road work. They are very deliberately trying to balance current account, or

trying to make it look as if current account is being balanced, by leaving a

positive variance in capital account. The Minister is wrong, he cannot put two

of them together. Current account is current account and that is the measure of

Government's performance.

AN HON. MEMBER: Would the hon. Member get to his

question?

MR. WINDSOR: Mr. Speaker, I will get to my question.

Would the Minister please tell us what are the latest projections for provincial

revenues from provincial sources? Will he tell us where RST revenues will be

this year, and particularly where will payroll tax be? How much will payroll tax

net this fiscal year in comparison to his estimates in the Budget?

MR. SPEAKER: The hon. the Minister of Finance.

DR. KITCHEN: Thank you, Mr. Speaker.

I have the figures on revenues, (inaudible) source revenues

for the end of September, the first six months, and at the moment our revenues

are $700,000 higher than we had anticipated for this time. They are up above

projection by $700,000. Now, the RST is down by about $9.5 million. The personal

income tax is down by about $2 million. The gasoline tax is up by $5 million.

Lottery revenues are up by $3 million. Health and post-secondary is up by $1.5.

The mining tax and royalties are up by $1.1, and others $1.6. That all balances

up to about $700,000. But looking ahead to what it might be at the end of the

year is an interesting situation, in that RST revenues there are certain, I

would not like to call them windfalls, but results of tax audits which captured

certain funds that were not anticipated so that may be a bit higher than we had

anticipated. Generally speaking we are not down on our own source revenues at

the moment.

Thank you, Mr. Speaker.

MR. SPEAKER: The hon. the Member for Mount Pearl.

MR. WINDSOR: A final supplementary, Mr. Speaker.

The Premier is also saying, as we can see, it looks like the

deficit for this year is now going to be nearly $70 million, and he is saying it

could probably be over $100 million next year. Obviously that is a very serious

deficit situation this Government is faced with this year. Will the Minister

tell me if he is considering more tax increases, cuts in services, and layoffs

in the public service to deal with the projected deficit for this year?

MR. SPEAKER: The hon. the Minister of Finance.

DR. KITCHEN: Mr. Speaker, I am not sure if he is talking

about the current year or the year to come.

MR. WINSOR: Next year.

DR. KITCHEN: The year to come, 1992-93. At the moment,

Mr. Speaker, as one would imagine, we are considering what we might do for next

year but we have yet to make any firm decisions and I would like to pass on the

answers to that question until we have discussed it in Cabinet; but at the

moment it looks like the deficit for next year would have to be controlled.

One of the things we have to keep in mind of course, is that

we have, by reducing the size of the public service as we did by about 2,500

positions, we have substantially alleviated, on a recurring basis, a major

problem. The amount of money that that involves does not have to be spent next

year or the year after, or the year after or the year after; unlike, when the

hon. members were in Government, they kept increasing their expenditures and

their recurring expenditures. This was a major move that has great cost savings

built into it in the future.

MR. SPEAKER: The hon. the Member for St. Mary's - The

Capes.

MR. HEARN: Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. HEARN: Mr. Speaker, my question is for the Minister

of Education, but in his absence I will ask the Premier.

Is the Government intending to introduce legislation in the

House of Assembly to change the legal status of the Marine Institute, by

eliminating the autonomous legal entity called The Newfoundland and Labrador

Institute of Fisheries and Marine Technology, and to make the Marine Institute a

division of Memorial University of Newfoundland, and if so, well, is it the

Government's aim to introduce legislation and have it passed before this session

ends?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: As to the precise timing and so on, I

would prefer to wait until the Minister of Education is available to give the

details, but I can tell you that the Government intends to introduce legislation

to bring together Memorial University and the Marine Institute, to provide for a

better, we think, a better system of post-secondary education than is now being

delivered at the Marine Institute and more within the limits of the financial

ability of the Government. There are a variety of reasons and I have no doubt

the Minister will spell it all out when the debate occurs, but yes, we do intend

to introduce legislation.

MR. SPEAKER: The hon. the Member for St. Mary's - The

Capes.

MR. HEARN: Thank you, Mr. Speaker.

Why, in the field of post-secondary education, is the

Government making the same mistake as they made in the field of municipal

amalgamation? Why the rush, why the lack of consultation with the people

directly affected, the students and the faculty at the Institute? Why the

high-handed, arrogant, dictatorial approach? Why the secrecy? Why the confusion?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. the Premier.

PREMIER WELLS: They may be good questions, if they were

soundly and factually based; but in fact, Mr. Speaker, this proposal was made I

believe about a year ago when the White Paper was tabled, and the Government

included all of these things and these possible considerations in the White

Paper. During the discussion on the White Paper, all of these things were

discussed and arose, so, Mr. Speaker, it is not a matter of secrecy or anything

like that; the Government proposed a very thorough consideration of

post-secondary education in the White Paper.

Now I do not suggest that we are doing exactly what was

recommended in the White Paper or exactly what came out of any of the

discussions, but when we put it all together, Mr. Speaker, we believe that this

is the right course to follow, to provide for good quality, post-secondary

education and ensure its reasonable availability within the limits of the

financial capability of this Province.

MR. SPEAKER: The hon. the Member for St. Mary's - The

Capes.

MR. HEARN: Thank you, Mr. Speaker. I think the Premier

has basically outlined why and how this is all happening because he feels that

it is the proper thing to do.

The students however, and the Student Council, leaders who

are responsible for 800 students, feel that there are secret back room

discussions ongoing with three people involved; the Minister, the Deputy

Minister and Dr. Art May, the President of the University, and probably four

people, because in the background undoubtedly, there is the Premier.

Why is not Government involving the students and faculty in

the discussions about the future of their own institute?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, I know that the Minister has

met on one or two occasions with the students and representatives of the

students. I know that I have a meeting scheduled for, I believe it is Thursday

or Friday of this week, with representatives of the students so that we will be

meeting with them, and the Minister has met with them in the past. There are no

secret back room negotiations or discussions going on anywhere in Government in

relation to the matter, but, Mr. Speaker, Government has the responsibility to

govern and to lead in the governing of the Province and what we propose to do is

put out for public discussion, and there is public reaction from groups that are

interested including students, including Members of the Opposition, including

others interested in the education programs in the Province and so on, so there

will be an opportunity for input by everybody. The objective is to benefit the

students in the long run not hurt them, and ensure that we provide for an even

better quality of education than we are able to provide for at the moment - that

is the Government's objective.

Now, there may be a variety of views as to how that might

best be achieved or one group or another may have a particular preference for

one particular approach or another. I can understand that and I respect the

difference of views but the Government must discharge its responsibility in the

overall to the people of this Province.

MR. HEARN: Mr. Speaker.

MR. SPEAKER: The hon. the Member for St. Mary's - The

Capes.

MR. HEARN: Thank you, Mr. Speaker.

Once again the Premier is just saying it does not matter what

anybody else thinks anyway: we are going to do what we want to do.

SOME HON. MEMBERS: Hear, hear!

MR. HEARN: Will he tell us then: is the Government

contemplating transferring any courses, programs or functions of the present

Marine Institute to Cabot Institute? Can he assure the faculty of the Marine

Institute they will continue to teach all the courses for training programs for

the fishing industry and other marine industries? And, will he tell us if the

actual physical building, will it continue to be known as the Newfoundland and

Labrador Institute of Fisheries and Marine Technology into the future?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, let me hasten to say at the

outset that I said just the opposite of what the hon. Member said. It does

matter to us and that is why we put out proposals for discussion, that is why we

propose beforehand before we implement any decisions.

MS. VERGE: (Inaudible).

PREMIER WELLS: The hon. Member can speak whenever it is

her turn to speak, or whenever she wants to stand on her feet.

MR. SPEAKER: Order, please!

PREMIER WELLS: Mr. Speaker, we put out proposals for

consideration and we get points of view and we listen to people. Now, when you

get diametrically the opposite point of view in some areas you have to do

something differently than one or the other is suggesting, so it is

understandable that there should be different points of view, but it is

Government's responsibility, as hon. Members opposite should understand, to

provide for the overall general best interest of the Province and that means on

some occasions we have to disappoint one group or another as to what they would

prefer to see done, because there are differing opinions as to what should be

done and what should be the tax burden on the people of this Province.

Now, Mr. Speaker, as to the details of the name and so on I

would again prefer to leave that to the Minister, but I do know that the

intention is to ensure the continuation of programs, some on a degree basis, to

enhance the programs that are there now and have them affiliated directly with

Memorial University so as to give them an even better level of recognition

through the recognition that Memorial has at the moment, and continue on other

technical and training programs that are in place at the moment and they will

continue, I am told, as well. But again as to the specific details I would

prefer to have the Minister address that when he is here, and I expect he will

be here tomorrow. He is at a meeting today.

MR. SPEAKER: The hon. the Member for Fogo.

MR. WINSOR: Thank you, Mr. Speaker.

I have a question for the Minister responsible for Employment

and Labour Relations. On October 4, the Minister announced a major employment

strategy to deal with the ever increasing unemployment rate in this Province.

The Minister announced that day some $5 million for the Department of Social

Services through its community development program. In my particular district,

Mr. Speaker, the town of Musgrave Harbour were asked to submit proposals. They

did so, and hours after they were told the money was spent.

Is the Minister aware that most of the money of this $5

million was already approved, already allocated prior to his announcement? How

does the Minister explain that $5 million was spent practically overnight?

MR. SPEAKER: The hon. the Minister of Employment and

Labour Relations.

MR. GRIMES: Thank you, Mr. Speaker, and thank you to the

hon. Member for Fogo for the question.

I am a little disappointed actually. I would try to answer

the question if I understood what he represented to be the truth of the matter.

If you want to find out the details of exactly what has happened in the Social

Services component of our Emergency Employment Response Programme, then you

could probably ask the question directly to the Minister responsible for Social

Services. It certainly is not my understanding, as one of the ministers involved

in the Committee responsible for the delivery of this programme, that what was

represented to this House by the member opposite is what has occurred. That is,

to my knowledge, far from the truth.

MR. WINSOR: A supplementary, Mr. Speaker.

MR. SPEAKER: The hon. the Member for Fogo, on a

supplementary.

MR. WINSOR: Let me ask the Minister of Social Services,

then, How much of the $5 million announced in the Budget has already been

allocated for programme proposals put forward prior to that date, with the

minister, in effect, only announcing a (inaudible) of money to cover previously

approved programmes.

MR. SPEAKER: The hon. the Minister of Social Services.

SOME HON. MEMBERS: Hear, hear!

MR. HOGAN: Mr. Speaker, I have to agree with my

colleague. The hon. member does not have all his facts straight. The money was

not spent overnight, it took three to four weeks to spend it. And the monies he

is talking about that was so quickly spent was in response to programmes that we

had already recommended to the department, and an overrun of the current CD

programme.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order please!

MR. HOGAN: They were approved, Mr. Speaker, to enable us

to get the programme on the road quickly, and to respond to the need that is out

there in the community.

MR. SPEAKER: Hon. members, there is time for a very quick

supplementary.

MR. WINSOR: Thank you, Mr. Speaker. The minister, in the

same release, announced some $4 million to be spent in four different

departments. He said, and I quote, `The responsible minister will provide the

details.' Well, has the Department of Environment, the Department of Employment

and Labour, and the Department of Municipal and Provincial Affairs announced the

details of their proposal? What are they, and when were they announced to the

public of this Province? Only the Department of Forestry has announced any

details. What happened to the other three?

MR. SPEAKER: The hon. the Minister of Employment and

Labour Relations.

MR. GRIMES: Thank you, Mr. Speaker. One of the things we

had hoped to do with the programme, and are confident that we have had success

to date, was to minimize the amount of time for delivery so that we would not

have to set up new bureaucratic structures, and that we could use already

existing agencies to deliver the funds into the hands of the workers who needed

the money and the work right away. We have every confidence that, to date,

certainly in the Department of Forestry and Agriculture, just about the full

amount has been allocated, in the Department of Environment and Lands, projects

for the full amount and, as a matter of fact, they are now looking to other

departments for more monies, because they have projects to the total amount

allocated for that department. In the Department of Municipal and Provincial

Affairs they have their list of projects approved now, ready for announcement by

the appropriate minister. And, in the Department of Employment and Labour

Relations, to date, a quarter of a million dollars has been allocated. In

Labrador, there are already projects that are on the ground with people working

and employed. There are other monies that we are holding in this department for

one reason only, and that is, to fill in any geographic gaps that may have

occurred in the allocation of monies from the other departments.

Mr. Speaker, we expect fully, by the end of this week, that

all of the money will be allocated in the short-term `make work' portion of the

Emergency Employment Response Programme for the benefit of workers who need the

work and the money in Newfoundland and Labrador.

MR. SPEAKER: Order, please!

Question period has expired.

o o o

MR. SPEAKER: The hon. the Member for Port de Grave.

MR. EFFORD: I want to make sure I approach this in a

proper way without questioning His Honour in the Chair, so I will ask for a

point of clarification. I was standing in my place as a member of the House of

Assembly on several occasions after the Leader of the Opposition stood in his

place. I guess it is because I am so far at the back, next to the wall, that His

Honour, the Speaker did not see me. I want to have clarification, or

understanding, so that the backbenchers here would know what opportunity they

have to be recognized in Question Period, not questioning the Chair, by any

means, but just for clarification.

MR. SPEAKER: The hon. the Member for Grand Bank - I'm

sorry, the hon. the Opposition House Leader.

SOME HON. MEMBERS: Hear, hear!

MR. MATTHEWS: Quite alright, the Member for Grand Bank

first, Mr. Speaker.

I just want to respond to the hon. member's - I guess, point

of order or bringing it to the Speaker's attention. It is a fact that he did

rise in his place a number of times, because, from where I sit, I can observe

that he did. Having said that, Mr. Speaker, I think, being in the legislature

for the period of time the hon. member has been here, that he knows the

recognition of questioners is at full discretion and judgement of the Speaker.

Really, in an indirect way, I think, the member is questioning the Speaker's

judgement, and I don't think we can have any tolerance for that here in this

legislature.

MR. SPEAKER: Order, please!

To the point of order or point of enquiry. The member is

right, I suppose, to stand and ask why the Speaker did not recognize him. I

think the hon. the Opposition House Leader gave a partial answer. The Speaker

has been over the past little while accustomed to looking to the right all the

time and it was near the end of Question Period when I recognized the hon.

member was standing. The Chair can only recognize, first of all, when aware that

someone is standing. I believe it is a well-known fact in the House that anybody

has the right to ask a question, but the major portion of Question Period does

go to the Opposition, and the Speaker tries to keep that in mind. This being the

first day of the House, I don't think the member can say he was unduly

discriminated against.

Presenting Reports by

Standing and Special Committees

MR. SPEAKER: The hon. the Minister of Finance.

DR. KITCHEN: Mr. Speaker, I would like to table two

pre-commitments. One is for the Department of Education, pre-commitment for the

printing of Environmental Science 3205 textbook: $130,000 for the coming fiscal

year and $130,000 for the year after that. There is also, a second

pre-commitment, for the Department of Forestry and Agriculture, having to do

with contracts under the Canada-Newfoundland Environmental Sustainability

initiative. That will require some budgetary appropriations for the next year in

the vicinity of $400,000. These are the pre-commitments.

Mr. Speaker, while I am on my feet, I would like, with your

permission, to table two special warrants. The first has to do with the

Executive Council, for the Economic Strategic Planning Committee, in the amount

of $500,000. The second Lieutenant-Governor's warrant, in the amount of

$821,000, for the Department of Forestry and Agriculture, has to do with an

agreement that we have to make with the Federal Government, the

Canada-Newfoundland Subsidiary Agreement, on a livestock feed initiative, ALFI,

they call it. Of that $821,000, five-sixths will be recoverable from the Federal

Government.

Thank you, Mr. Speaker.

Notices of Motion

MR. SPEAKER: The hon. the Minister of Finance.

DR. KITCHEN: Mr. Speaker, I give notice that I will on

tomorrow ask leave to introduce a bill entitled, "An Act To Amend The Liquor

Corporation Act, 1973."

I also give notice that I will on tomorrow move that the

House resolve itself into a Committee of the Whole on Supply to consider certain

resolutions for the granting of additional supplementary supply to Her Majesty.

Thank you, Mr. Speaker.

MR. SPEAKER: The hon. the Minister of Forestry and

Agriculture.

MR. FLIGHT: Mr. Speaker, I give notice that I will on

tomorrow ask leave to introduce a bill entitled, "An Act To Amend The

Newfoundland Geographical Names Board Act," major stuff, Mr. Speaker.

I give notice that I will on tomorrow ask leave to introduce

a bill entitled, "An Act To Revise The Law Respecting Surveyors In The

Province," another major piece of legislation.

MR. SPEAKER: The hon. the President of Treasury Board.

MR. BAKER: Mr. Speaker, I give notice that I will on

tomorrow ask leave to introduce a bill entitled, "An Act Respecting The

Newfoundland Volunteer War Service Medal."

Petitions

MR. SPEAKER: The hon. the Member for St. Mary's - The

Capes.

MR. HEARN: Thank you, Mr. Speaker.

I stand to present a petition on behalf of the students and

faculty at the Marine Institute. The petition is to the hon. House of Assembly

of Newfoundland in legislative session convened. It is a petition of the

undersigned students, staff and faculty of the Newfoundland and Labrador

Institute of Fisheries and Marine Technology, and the general public of

Newfoundland and Labrador.

The prayer of the petition says: `Whereas the Government of

Newfoundland and Labrador has expressed the intention of having Memorial

University of Newfoundland take over the Marine Institute, and

whereas it is our

conviction that such a change would impact negatively on the Marine Institute

and its students and faculty, therefore, your petitioners urge the Government of

Newfoundland and Labrador to maintain the autonomy of the Marine Institute, and

as in duty bound, your petitioners will ever pray.'

I am not sure, Mr. Speaker, whether it is any good for them

to pray or not, the way this Government operates, because it is quite clear from

the answers we were given today by the Premier that a decision has already been

made.

Thinking back, I remember some of us talking about the White

Paper when it was presented several months ago, when we said it was not a White

Paper on education, it was a fait accompli already; it was a list of hard-line

decisions to be made by the present Government, on which they would elicit, I

suppose, some discussion so that they could say, `We have consulted on this,'

and then go ahead and make their own decisions, anyway. Unfortunately, by the

time they came to making the decisions, they went even further than some of the

suggestions in the White Paper and have completely wiped out, it appears, the

Marine Institute, as we know it today.

There are several points of concern about the takeover or the

amalgamation process involved here between the University and the Marine

Institute. There may be - and the students, faculty and staff will admit that

perhaps there are positive factors involved here - a number of areas where

sharing can take place, but there are a number of areas perhaps unknown to the

Government, because they are not closely involved in the everyday workings of

the Marine Institute, nor are they any way close to the everyday problems being

experienced by the students, especially those who come from the smaller areas

for the short-term courses et cetera around the Province of Newfoundland and

Labrador. It is a suggestion by the students and staff that perhaps Government

should consult more widely, that before they go ahead and jump to bring in

legislation to finalize the marriage between the Marine Institute and Memorial

University, perhaps they should look at all the factors involved because it is

too late, as they say, to close the door after the horse is out. There is no

rush in doing this.

Everyone will agree that we have to improve the education

system in our Province. Education is a continuously changing process and we must

keep up with the great demands that are there that confront us from day to day.

Changes have to be made, consolidations have to take place, but the proper ones

must take place because, in the process of education, surely, those involved in

the decision-making, themselves, learned something. Hopefully, we have learned

through mistakes of the past not to jump into things without properly looking at

all the angles and all the factors involved.

Government, in particular, after the schemozzle they made of

the amalgamation of municipalities in the Province, all the heartaches, the

pain, the concern they have caused around the Province, the chaos, should have

learned not to jump into things before they properly think them out.

The people of this Province, the municipal authorities, the

same as the students who are directly involved, know how the process works; they

know what will work, more importantly, and can probably advise governments and

other decision-makers as to how to go about properly doing what has to be done.

It is their future, and if there is a better way to do things then, undoubtedly,

it is they who are primarily concerned.

MR. SPEAKER: Order, please!

The hon. member's time has elapsed.

MR. HEARN: So, Mr. Speaker, on behalf of the students, I

present the petition and, undoubtedly, over the next few days and weeks we will

have a lot more to say about this issue. Thank you.

MR. SPEAKER: The hon. the Opposition House Leader.

MR. MATTHEWS: Thank you, Mr. Speaker. I thought that

someone from the Government side would rise and speak to this petition presented

to the legislature today, on behalf of the students and faculty of the Marine

Institute. Because, what we are witnessing again today, is another cause for

concern when we talk about democracy or lack thereof that has taken place in our

Province over the last couple of years. So I think it is very, very important

that Government slow down, whatever it has in mind, and, of course, the picture

is not clear yet as to what Government's intentions are for the Marine Institute

and its affiliation with Memorial University of Newfoundland and Labrador.

I see the President of Treasury Board, the Government House

Leader, laughing at that, but, based upon the answers given by the Premier,

himself, today, it seems to me to be a little bit fuzzy as to just what the

Government plans to do, what the final decisions, the final results and the

impact on the students and faculty at the Marine Institute will be. So, I guess,

what this petition is asking, Mr. Speaker, is that Government slow down what it

is doing and take the time to consult with the students, particularly, and with

faculty at the institute, to further discuss, to have two-way dialogue, to

consult - which we hear so much about these days, consultations or lack of

consultations - to get the input of those students, and the faculty, the people

who teach at the Marine Institute.

Now, having said that, Mr. Speaker, I think it is fair to say

that, since the former President of the Marine Institute, I think was seconded

or moved by Government - I believe he became Deputy Minister of Fisheries, Mr.

O'Reilly has been acting President - that things have sort of been in a stage of

uncertainty at the Marine Institute which has continued for a period of months.

And I think that is too long, really, to have people not knowing about their

future.

I am not suggesting that Government should be hasty and not

consult, but I think that things at the Marine Institute have not been as they

should be, for a period of about a year, and I, Mr. Speaker, would like to join

with my colleague, who so ably presented the petition, in supporting the

petition, and call upon the Premier and the Administration to slow down, and

consult with the students and the faculty to make sure that what is being done

in this process, in the end result, will mean better education and better

educational opportunities for those who are at that institute at present and

those who will be at the institute in the future.

In conclusion, having said those things, Mr. Speaker, and

supporting the petition, I have to say quite honestly, it is my own personal

feeling and conviction that the old post-secondary issue in St. John's with

Memorial University, Cabot Institute and the Marine Institute certainly needed

to be looked at, but I think we should be very, very sure that what we are doing

is the proper thing.

PREMIER WELLS: Mr. Speaker.

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: If I might, I would ask the leave of the

House, before you proceed with another petition, to let me do something that I

inexcusably neglected to do at the outset, when I rushed to congratulate the new

hon. Member for Baie Verte - White Bay. I neglected to acknowledge and express

congratulations in respect of another notable political event that has occurred

since we last sat in this Chamber. The appointment of the hon. the Member for

Grand Bank as Opposition House Leader was not the event I had in mind, with

great respect to the hon. member, of course, but the event I had in mind was the

selection of the hon. the Member for Grand Falls to be the Leader of the

Progressive Conservative Party and, of course, in consequence of that, the

official Leader of Her Majesty's Loyal Opposition.

SOME HON. MEMBERS: Hear, hear!

PREMIER WELLS: I regret, Mr. Speaker, that the members of

the media are not now in the Chamber - looking up there, I see that they have

all disappeared - and I can only sincerely hope that some are within earshot so

that they can carry to the public of this Province, the sincere congratulations

of the Government and the members of the Government caucus to the hon. the

Member for Grand Falls on his having been selected as the Leader of the

Progressive Conservative Party and being, as a result, the now Leader of the

Opposition.

I am encouraged by the comments that I have heard the hon.

member make since his selection as Leader of the Opposition and Leader of the

party. I hark back to when I was chosen to that august position when we sat on

the opposite side. One of the first speeches I made in the House was that I

would like to see the decorum of the House improve and I committed myself to

using every possible endeavour to do that. Now, we have two of us that are of a

like mind. He is sitting on the opposite side and has responsibility for the

leadership of all Members opposite and I am sitting on this side and I have

responsibility for the leadership of all Members on this side. Now, I cannot

absolutely guarantee that no hon. Member will breach the normal rules of

demeanour in the House and be offensive, but I can assure you that if any hon.

Member does so it will be without my approval and with my expressed disapproval,

because I, like the hon. Member for Grand Falls, share his point of view, that

we should get on with the governing of the people's business and the conduct of

the people's business in this House, expressing our strong differences of

opinion, making our arguments on the basis of merit on the issues involved, and

not casting aspersions on the character of any individual Member who is

expressing a point of view or making a speech. So, at the same time that I

express to him the most sincere congratulations, and I say that to him most

sincerely, of all Members on this side of the House, and indeed of all

supporters of the Liberal Party in the Province, I wish him well but he will

understand, of course, if I put a limit on that wish to wish him a high level of

success as Leader of the Opposition but not too much success in the next

election. I know he will understand that is not ill-will but self preservation

that motivates that, and that my good wishes for him are none the less very

sincere.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Leader of the Opposition.

MR. SIMMS: I must say at the outset that I am very

embarrassed, mildly embarrassed I should say, and perhaps my face shows it, I do

not know. I am certainly not used to hearing the Premier make such comments

about me, anyway, perhaps about other Members of the Opposition, but I cannot

recall if he was ever so generous in his compliments as he was on this

particular occasion, so I am somewhat taken aback by it. I appreciate the

comments. I have no doubt that they are sincere and I appreciate them very, very

much. The comments I have made publicly about the performance of the Opposition

in the Legislature I can assure him are not by my instructions necessarily. I

hope to lead the Party obviously in that way, but I can assure him that what he

heard me talk about in terms of decorum from Members on this side of the House

are the wishes and desires of the Members of this side, our team, so that is

where that came from and, of course, I express their views publicly on every

occasion I get. I will attempt to work with our team in ensuring that decorum is

preserved in the Legislature. As a former Speaker of the House I recognize that

I was perhaps one of the most guilty ones of interjecting and interfering. I

loved it, I enjoyed it, and I still do, but I have made a commitment to bite my

tongue more often but not on every single occasion. I would not want anyone to

get the impression that there will be absolute quiet because there will not be.

I would not want anyone to get the impression there will not be any

interjections because there will be. It depends on the performance of the

Ministers on that side of the House. In terms of the length of stay in this

particular position we will have to leave that up to the ultimate judge and that

is the people of the Province. We will see what they think in a year and a half

or so.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: I think we were into Petitions.

The hon. the Member for Humber East.

MS. VERGE: Thank you, Mr. Speaker.

I wish to present a petition of municipal leaders in the

Humber Valley area. I will read the prayer of the petition and then comment on

it. The petition of the undersigned residents of Western Newfoundland:

whereas

the Provincial Government closed the western swine breeding station at Pynn's

Brook and moved the stock and equipment to the central swine breeding station

near St. John's in July 1991;

whereas the western swine breeding station had

been highly successful in producing genetically superior animals in a unique

disease free environment;

whereas the Government appointed task force on

Agri-Foods chaired by Dr. Bud Hulan praised the western swine breeding station's

achievements; touted future prospects for exporting breeding stock; and

specifically recommended that it continue to operate; and

whereas the Hulan Task

Force recommended that the central swine breeding station near St. John's be

closed. Therefore your petitioners urge the Provincial Government to reinstate

the western swine breeding station at Pynn's Brook, and as in duty bound your

petitioners will ever pray.

Now as my colleague, the Member for St. Mary's - The Capes,

remarked when he was presenting a petition of faculty and students of the Marine

Institute, it is questionable whether citizens prayers for action on the part of

this high-handed Government will make any difference.

The municipal leaders who signed this petition in earlier

forms through representations made by their respective councils have already

protested the Government's move to close the western swine breeding station. But

those representations have so far fallen on deaf ears.

Mr. Speaker, in some instances the Government has failed to

do research or consult people before making decisions, before implementing

changes. In this instance the Government appointed agricultural experts,

including Dr. Bud Hulan. This 'real change' Liberal administration commissioned

that group of agricultural experts to make a study, consult people, and then

give a report to the Government. Last winter the Hulan Task Force gave a

comprehensive report to the Government, and that report specifically in

recommendation twelve called on the Government to retain and operate the western

swine breeding station.

In the report, as is said in the recitals of the petition,

the commissioners remarked on the high degree of success of that operation at

Pynn's Brook, talked about how the stock is genetically superior. Over the years

of research at Pynn's Brook, progressively superior stock were produced.

The Hulan Task Force also pointed out that this Island of

Newfoundland is perhaps the only area in the whole world which has a disease

free swine status, and because it is an island it is an ideal environment in

which to continue to improve the breeding of swine.

The Hulan report - this is page fifty-three of the Hulan Task

Force report - talks about export opportunities for the genetically superior

breeding stock produced at Pynn's Brook to be sold outside of Newfoundland to

other provinces of Canada, and indeed to other nations of the world.

Mr. Speaker, when the move came in the summer, people in

western Newfoundland thought this was another example of the overpass syndrome

being at work, another example of St. John's taking away from -

MR. SPEAKER: Order, please!

The hon. Members time is up.

MS. VERGE: Mr. Speaker, I will have to conclude later.

Let me sum up by simply expressing my support for the prayer of the petition

urging the Provincial Government to reinstate the western swine breeding station

at Pynn's Brook.

MR. SPEAKER: The hon. the Member for Green Bay.

MR. HEWLETT: Thank you, Mr. Speaker. I would like to say

a few brief words in support of the petition so ably presented by my colleague,

the Member for Humber East.

Western station has been replace with the central station,

and centralization, Mr. Speaker, would appear to be a very prominent theme for

this particular administration. Whether it comes to cottage hospital

downgradings, the community college restructuring, matters relating to the

Marine Institute, centralization appears to be the soul goal of this particular

administration harking back to the days of the sixties.

It is rather strange, Mr. Speaker, that this Government would

commission a report of agricultural experts who would bring in a report that

basically praises one particular agricultural research facility, is less than

generous in its praise of the agricultural facility known as the central

station, yet here we have a Government that has decided to close the western

station and keep the central station open, and move the animals and ancillary

facilities to the central station here in St. John's.

Mr. Speaker, this reaction of this particular administration,

two studies, is not at all uncommon. The previous administration studied the

economy under one Dr. House. The current administration brought in an economic

recovery team to implement the good doctor's report to reform the Newfoundland

economy. Some two and a half or three years later this Government now says we do

not know what we are doing, but we want to consult with people, and we want to

find out what is going on.

So throwing out the reports of commissions, going against the

experts, this is nothing strange at all, Mr. Speaker. I support the prayer of

the petition. Thank you very much.

MR. SPEAKER: Before moving on to Orders of the Day, on

behalf of hon. Members I would like to welcome to the Speaker's Gallery Mr.

Walter Hodder, a former Member of this Legislature. As a matter of fact, Mr.

Hodder served from 1962 to 1971, and he is the father of the Member for Port au

Port.

SOME HON. MEMBERS: Hear, hear!

Orders of the Day

MR. SPEAKER: The hon. the Government House Leader.

MR. BAKER: Motion two, Mr. Speaker.

Motion, the hon. the President of Treasury Board to introduce

a bill entitled, "An Act To Amend Certain Departmental Acts and The Newfoundland

Public Service Commission Act, 1973," carried. (Bill 36).

On motion, Bill No. 36 read a first time, ordered read a

second time on tomorrow.

MR. BAKER: Motion three, Mr. Speaker.

Motion, the hon. the President of Treasury Board to introduce

a bill entitled, "An Act To Amend The Status Of Women Advisory Council Act,"

carried. (Bill 35).

On motion, Bill No. 35 read a first time, ordered read a

second time on tomorrow.

MR. BAKER: Order four, Mr. Speaker.

Motion, second reading of a bill, "An Act Respecting The

Office Of The Auditor General And The Auditing Of The Public Accounts Of The

Province." (Bill No. 1).

MR. SPEAKER: The hon. the President of Treasury Board.

MR. BAKER: Thank you, Mr. Speaker. I am very pleased

today to speak in second reading and to introduce Bill No. 1, "An Act Respecting

The Office Of The Auditor General And The Auditing Of The Public Accounts Of The

Province." It has been a long time coming. For years and years there has been a

fair amount of comment in terms of this Province having its own Auditor

General's Act. I remember sitting in Opposition and as Chairman of the Public

Accounts Committee making that point to several Ministers of the day. Trying to

make the case for the desirability of the Auditor General being controlled by

his own piece of legislation.

Notice was given of this Bill almost two years ago. The Bill

was given to committee. The Committee held hearings and received quite a bit of

input in terms of the proposed legislation. As a matter of fact I believe at the

time there was quite a lot of controversy concerning a couple of sections of

this particular Bill. But anyway, the Committee report came back and we have, as

Government, reprinted the Bill taking into account some of the Committee

recommendations. It is here today for second reading. When we get to the

Committee stage of the Bill of course it will be open to suggestions for further

amendments from the Legislative Review Committee. But I think that by and large

we have, at this point in time, taken care of most of their concerns.

I would like to first of all speak for a few minutes about

the desirability of having this Act. I think it is an important symbol.

Symbolically it is very important for the Office of the Auditor General to be

controlled by its own piece of legislation rather than simply to be an arm of

the Department of Finance reporting directly to the Minister of Finance. Not

that I have got anything against the Minister of Finance. I think he is a great

fellow as he showed here today. He is a great fellow. I have nothing against the

Minister of Finance, and I would not mind reporting to him any day at all.

However, the Auditor General feels that perhaps there should

be a little more autonomy given to that role. That the Auditor General should

not be subservient to a branch of government but in fact should be more an

independent arm of the Legislature or of government that does not answer

specifically to any one Minister. It is important in terms of perception,

because obviously the Auditor General - as the person responsible for checking

on government expenditures - should be perceived to be independent as well as

being independent. I am not saying that the Auditor General was not independent

seven or eight years ago. He may have been. But the perception was always there

that there was no independence and no autonomy. So it is very important from the

point of view of his function that he be accorded this autonomy that he or she

wants.

In the Bill itself there are some sections that I suppose

need to be stressed and need some pointing out. The first part of the Bill is

simply some

definitions and saying what the Office is and so on. There is a

clause that caused some concern during the Committee hearings, Clause number 5.

It had to do with tenure of office of the Auditor General. Built into this Bill

is a ten year term. "The Auditor General holds office for a term of ten years,"

and "may be removed" by cause of course, by a resolution of the House of

Assembly. "Once having served as Auditor General" the "person is not eligible

for re-appointment to that office." In other words it is a tenured term and only

a one tenure term. That caused some comment during the Committee hearings.

I am sure that Members opposite, when they get around to

discussing this Bill, will state a case perhaps to have more than a ten year

term or two ten year terms or whatever, and I guess I will deal with their

specific objections after they are raised. But we feel that in that particular

position, a term be established, that we know ahead of time that there is a

definite term; that an Auditor General not be appointed for life, or for a

longer term, but that we know right from day one what the term is going to be so

that the conditions of employment can be geared towards that term; conditions of

employment that are satisfactory both to, I guess, Government and the House, and

the Auditor General -the prospective Auditor General.

Clause No. 10 is one that also deserves some note. It is the

statement that "The Auditor General is the Auditor of the financial statements

and accounts of the Province and shall make those examinations and enquiries",

and the wording of this is important, "shall make those examinations and

enquiries that the Auditor General considers necessary to enable him or her to

report as required by this Act." - a very broad description in this instance of

the duties of the Auditor General.

The Report on the Financial Statements: "The Auditor General

shall examine the several financial statements required by the FAA to be

included in the public accounts of the Province, and any other statement as

required to be audited by the Auditor General under this Act, or another

statement that the Minister of Finance may present for audit, and shall express

his or her opinion as to whether the financial statements present fairly the

financial positions, results of operations, changes in the financial position of

the Province in accordance with the disclosed accounting policies of the

Provincial Government, and on a basis consistent with that of the preceding

year, together with reservations the Auditor General may have."

Now that generally outlines the normal duty of an Auditor

General, the normal duty of an Auditor General. But it goes on concerning the

reports of the Auditor General, to hint at something a bit broader, I guess:

"The Auditor General",

Section 12, "Shall as he or she considers necessary, but

at least annually, report to the House of Assembly on the work of the office; of

whether in carrying out the work of the office, the Auditor General received all

of the information, including reports and explanations that the Auditor General

required; the results of the Auditor General's examinations; and audits,

examinations and inquiries performed under this Act." So he or she shall report

at least annually, but more often than annually if deemed necessary. I think

that is an important section.

Then there is a description in some detail of what kinds of

things the Auditor General should examine, and I have to go through this because

there is a very important point to be made right at the end of this: "The Report

of the Auditor General shall include the results of the Auditor General's

examination of the accounts of the Province, and shall call attention to

anything the Auditor General considers significant." Now that is pretty broad,

but then it gets a little specific. "Including instances where collections of

public money have not been effected as required under the various acts,

regulations, and so on; collections of public money have not been fully

accounted for, or have not been properly reflected in the accounts."

(b) "Disbursements of public money (

i) have not been made in

accordance with the authority of the supply vote, have not complied with

regulations, have not been properly reflected in the accounts, or have not been

made for the purpose for which it was appropriated" in the House; so both the

collections of public money and the disbursements of public money, all aspects

of it.

The Auditor General: he or she also reports on whether the

accounts have been faithfully and properly kept; pretty general. Whether assets

acquired, administered or otherwise held are not adequately safeguarded or

accounted for; accounting systems and management control systems that relate to

revenue, disbursements, the safeguarding or use of assets or the determination

of liabilities were not in existence, were inadequate or had not been complied

with. Now so far it is a listing of the collections, the safeguarding of the

collections, as well as disbursements, and the safeguards attached thereto.

But

Section (

f) is the one that I would like to point out:

The Auditor General shall call attention to anything the Auditor General

considers significant, including instances where, and this is in his report,

"factors or circumstances relating to an expenditure of public money which in

the opinion of the Auditor General", not in the opinion of Government, not in

the opinion of Your Honour, the Speaker, not in the opinion of a politician, but

"which in the opinion of the Auditor General should be brought to the attention

of the House of Assembly." Now, Mr. Speaker, I submit to you that this is an

extremely broad mandate for a bill, an Auditor General's Act, to include a

clause which indicates that the Auditor General in his report shall deal with

factors or circumstances relating to an expenditure of public money which in the

opinion of the Auditor General should be brought to the attention of the House

of Assembly. It is an extremely broad mandate, perhaps the broadest mandate ever

given to an Auditor General. Now, immediately after that there is a Sub-section

three to Clause 12 and there was some debate as to whether or not that should be

there. It is simply that Paragraph 2 (f), the one I just stressed and which I

indicated gave a very broad mandate to the Auditor General, that paragraph shall

not be construed as entitling the Auditor General to question the merits of

policy objectives of the Government. Some people might say it is strange to have

a statement like that in the act. The reason it is there is very simple. The

Auditor General is suppose to comment on the expenditure and collection of

public money, and the Auditor General can point out where money could have been

better spent, I guess. If we, or if any Government, and I say we in the sense

that Government and the Governments change every so often, but this act stays

the way it is, if Government decides because of a policy objective to fund

something, the Auditor General can quite rightly point out that perhaps the

funding of that project or whatever it may be, existed and perhaps could have

been done in a better way, that is a legitimate question but it is not

legitimate for the Auditor General to comment on the policy objective in

Government of doing that. An obvious example is some of the expenditures in the

past for the Marystown Shipyard. An Auditor General could quite properly comment

that this could have been done cheaper somewhere else and perhaps express the

opinion that there were so many million dollars that could have been saved here.

Government's objective rightly so was a policy one and the policy was to

maintain a certain level of employment in an area, to retain expertise in an

area, for a specific length of time. The Auditor General does not comment on the

correctness of that particular policy of Government. The Auditor General may

comment on the financial transaction, so we thought that had to be in there

because what we do not need is an individual out there who was not privy to any

of the Cabinet discussions and the reasons for making a policy and then all of a

sudden making pronouncements on the merits of a particular policy. We felt that

the expertise of the Auditor General would be within the domain of the

expenditure of money rather that the development of policy.

Section 14 deals with the audit of agencies of the Crown and

other agencies: "Where an auditor has not been appointed to audit an agency of

the Crown or a Crown controlled corporation the Auditor General shall be the

auditor." In other words the Crown corporations can have their own auditors and

so on, but in instances where they do not get their own auditor the Auditor

General becomes the auditor of these corporations. Somewhere later on, of

course, it gives the Auditor General the right to charge in terms of the work

the Auditor General has done for that corporation.

Subsection 2 of Clause 14: "where the auditor of an agency of

the Crown, or a Crown controlled corporation, is other than the Auditor General,

so where a Crown corporation gets its own auditor the auditor shall, the auditor

hired by the Crown corporation, deliver to the Auditor General at the completion

of the audit a copy of the auditor's report, his or her recommendations and so

on, make available immediately to the Auditor General when so requested by the

Auditor General all working papers, reports, schedules, other documents and so

on, and provide immediately to the Auditor General when so requested by the

Auditor General a full explanation of work performed, the various audit tests

performed, and other information relating to the audit within the knowledge of

that auditor in respect to the agency or corporation."

The Auditor General we envision every so often would perhaps

do an audit of one of the Crowns. In that instance all the information should be

provided to him.

Subsection (3) I believe is very important to tie that

together and to stress it. It says: "Where the auditor general is of the

opinion" - and remember again - "Where the auditor general is of the opinion

that the information, explanation or document that is provided, made available"

or whatever "is insufficient to permit the auditor general to exercise his or

her powers or duties..., the auditor general may conduct or cause to be

conducted an additional examination and investigation of the records," and so

on. So that is to guarantee that there be no difficulty in the Auditor General

obtaining the information he or she wants. If in fact there is difficulty in

obtaining the information then there is another course of action that the

Auditor General can take. But I think that is very important to tie down, in

that instance: the powers of the Auditor General with relation to Crown

corporations.

The Auditor General may do special assignments. I do not

think this is really any different from the old responsibilities under the

Financial Administration Act. Clause 16 (1): "The Auditor General may, where in

his or her own opinion such an assignment does not interfere with the Auditor

General's primary responsibilities under this Act, whenever the

Lieutenant-Governor in Council so requests or the House of Assembly or the

Public Accounts Committee by resolution so requires, inquire into and report on

a matter relating to the financial affairs of the province or to public property

or inquire into and report on a person or organization that has received

financial aid from the government of the province or in respect of which

financial aid from the government of the province is sought."

So special assignments can be requested of the Auditor

General and if it does not interfere with the normal duties - and these special

directions can come from Cabinet, the House of Assembly or the Public Accounts

Committee and so on, a variety of sources - that the Auditor General will then

do that special investigation and report back on it separately.

There are a couple of other instances I guess where there

were comments made to the Committee. One refers to the pension plan. It starts

off, Clause 25 (1): "All persons employed in the office are employees for the

purposes of the Public Service Pensions Act, 1991," that is pretty

straightforward. "Notwithstanding subsection (1), the Lieutenant-Governor in

Council may by order permit the Auditor General to participate in the Public

Service Pensions Act, 1991," alright? So the Auditor General is dealt with

separately here. "May by order permit the Auditor General to participate in the

Public Service Pensions Act, 1991 or may by order stipulate other pension

arrangements for the Auditor General upon his or her appointment under this

Act."

Now, the Auditor General is dealt with separately because of

the ten year term, obviously. Perhaps the Auditor General may very well be

someone who is already working with the Auditor General's office. In which case

it would be to his advantage to remain in the Public Service Pensions plan and

in that case he or she can remain in the Public Service Pensions plan. However,

if the Auditor General is from outside, it is really not of any great benefit to

somebody coming in from outside to become part of the Public Service Pensions

plan, knowing that they are only going to be there ten years and then they are

going to be gone. Ten years is not that much. So in these instances other

pension arrangements - perhaps private arrangements that the individual already

has or something - can be subscribed to. In that instance then the Auditor

General would not be part of the Public Service Pensions plan. So there had to

be special arrangements made for Auditor Generals who may have special

circumstances. Of course, it allows for some bargaining at the same time.

Here is one that I found particularly interesting, because it

is a very great exception in government. Well, one other exception, I suppose.

Section 30: "Subject to The Public Tender Act, 1984, the Auditor General may

engage within the limits of the appropriation approved by the Legislature for

his or her office" - and here is the thing that I am interested in - "and

without the approval of the Treasury Board...." Now it is not very often that

there are expenditures made in this Government without the approval of the

Treasury Board and this is one of the few examples. "The professional services

including counsel, consultants, accountants, and other experts and so on that he

deems necessary to do a particular job.' So the Auditor General is even given

relief from Treasury Board, which at times can be rather difficult.

Another point: obviously the question has been asked who

audits the Auditor General?.. so there is a provision in paragraph 32, which

refers to the audit of the office of the Auditor General, and the commission,

which is the Internal Economy Commission under the

definitions, shall appoint a

qualified auditor to audit annually the office. And then it points out that this

audit that is funded by the IEC has the same powers as the Auditor General in

relation to this particular function and carries out the same duties, so the

Auditor General is audited.

Now I know, Mr. Speaker, that I have not dealt with every

clause in here. There may very well be some objections from members opposite and

some criticisms about specific clauses. I look forward to hearing them, I will

take note of them, and I will try to deal with them before we finish the second

reading of this Bill.

Mr. Speaker, I just want to reiterate, before my time runs

out, that I am very pleased to be introducing this Bill, and I am proud of it. I

think it gives us a Bill, an Auditor General's Act that is a superb Act. I am

not saying it is perfect because obviously as time goes on there will be

changes. I would imagine there will be amendments every now and then to the

Auditor General's Act, but it is an excellent instrument right now to guarantee

the impartiality and the autonomy of the Auditor General and to give him or her

the comfort that they are running an operation that is separate from the

Government that they are auditing, and that they have the freedom and the

ability to do the job the way that we envision the job should be done. So I am

very pleased at this point to introduce Bill No. 1, the new Auditor General's

Act.

MR. SPEAKER: The hon. the Member for Mount Pearl.

SOME HON. MEMBERS: Hear, hear!

MR. WINDSOR: Thank you, Mr. Speaker. Let me say first of

all that we welcome this particular piece of legislation. The main point of

disagreement that I have with the Government House Leader is his confidence in

the Minister of Finance. I am afraid we do not share that. Any act that takes

any power away from the Minister of Finance, we welcome it, Mr. Speaker. If we

could get control of the public purse away from the Minister of Finance we would

welcome that. If we could get his driver's licence away from him we think that

would be a positive thing. If we could have a provision that he is not allowed

out after dark without supervision I think that would be a positive step.

Mr. Speaker, this is a good piece of legislation. We welcome

this piece of legislation. It is, as the House Leader pointed out in fact,

better than most other pieces of legislation in Canada today. Not every province

has such a piece of legislation, and so Newfoundland, for a change, is leading

the way.

It was, I think, four years ago that I first made agreement

with the former Auditor General that he should have his own act. At that time,

as the House Leader pointed out during his debate of his introduction of the

Bill, there was tremendous pressure from the Auditor General of Canada and

Auditor Generals all across Canada to have the authority to look at value for

money spent. I think as I did then and as I do now that that is getting into an

area that is outside the prerogative of an Auditor General, and I agree with the

comments of the House Leader when he says that Government must have the ability

to set policy and to decide how money is spent. Unless it is totally ridiculous,

Government must have that authority. The Auditor General must ensure that money

is spent in accordance with the policies established by Government from time to

time, and in accordance with the appropriations of the House of Assembly who are

the final arbitrators, in fact, of the public purse, and that is the real role

of the Auditor General.

Now, this act goes as close to giving the Auditor General

control over value for money as any act in Canada, perhaps closer than most acts

in Canada, because it is a very broad act. There is a clause here which says

that the Auditor General may comment on any matter that he deems appropriate, so

that is a pretty broad brush. Clause 12(3) says, "Paragraph (2)(

f) shall not be

construed as entitling the auditor general to question the merits of policy

objectives of the Government." So, it is clear that the Auditor General does not

have that authority, yet he has a very broad mandate to comment on any matter

that he feels needs to be brought to the attention of the House of Assembly.

Now, Mr. Speaker, the bottom line here, and the most

important aspect of this act, is that the Auditor General is now an officer of

the House and no longer reports to the Minister of Finance. As I said four years

ago, I agreed with the former Auditor General that, indeed, we would bring

forward a separate act for the Auditor General, and most of the provisions in

this act are, in fact, extracted from The Financial Administration Act, so they

are not changed but they are tidied up, modernized, made more specific, made

more clear, and clearly now, I think, define the role of the Auditor General.

I think the most important thing is that the Auditor General

is now an officer of the House. The Auditor General will no longer be subject to

the Minister of Finance or to Government, per se. Government, of course, having

a majority membership on the Internal Economy Commission, still has a measure of

control. I do not think you could have any less than that.

I might take this opportunity to point out that,

unfortunately, we no longer have an Ombudsman, who also was an officer of the

House, and who was the last opportunity for private persons to appeal through

the Ombudsman against any decision or action of Government or government

employee. I think it was a retrograde step, a complete contrast to creating an

Auditor General who is now an officer of the House, that this Government

eliminated the Ombudsman. I think that was very unfortunate. It is too bad

Government did not take the same approach, as it relates to the Ombudsman's

office, as they have taken, as it relates to the Auditor General.

This act improves the independence of the Auditor General's

office tremendously. It provides for the Auditor General to be appointed by

Government; obviously Government chooses the person who is to be appointed. Once

appointed by a resolution of the House of Assembly, it is important that the

Auditor General not be subject to action by Government, and that is why the

Auditor General is given a ten-year term. Now, the House Leader, when he spoke

to that point, said there was some thought that perhaps the Auditor General

should be eligible for re-appointment to a second term. I can see arguments on

both sides. Perhaps an extremely competent Auditor General might be given

consideration for a second term appointment but, on the other hand, perhaps this

particular office - and I think this particular office is different from almost

any other office that you consider - perhaps this particular office needs new

thoughts, after ten years.

But I think, even more importantly, getting back again to the

importance of the Auditor General being totally independent and not under any

power of government, if an Auditor General were hoping to be re-appointed, would

he not, therefore, be somewhat subject to the vagrancies of Government. So, I

would submit that I agree with this particular clause, one ten-year term.

Clearly and concisely, he knows when he is being appointed that he is there for

ten years, he cannot be dismissed without good cause by Government and by a

resolution of this honourable House. Now, small comfort with this particular

Government, unfortunately. We have seen this Government use resolutions of the

House of Assembly to do many things that they cannot do legally or morally

outside. We have seen many, many examples of that, where they have used their

power in the House of Assembly to get around legislation, to do things that they

cannot legally do otherwise.

MS. VERGE: Or cancel legislation, or amend it.

MR. WINDSOR: - or, cancel or amend legislation. So that

gives us small comfort, but it is the best comfort that the Auditor General can

give. Unfortunately, Government, still as a Government, still have a majority in

the House of Assembly, and they can pass whatever laws are necessary to allow

them to do whatever they choose to do, but that is at least the best protection

that the Auditor General can give.

Now, the House Leader talked about pension for the Auditor

General, and again, I agree with the bill, in that it provides that the Auditor

General can negotiate up front, and I would submit that the Auditor General's

pension plan should be negotiated at the time of negotiating the full salary and

benefits package, because you cannot do it down the road. If there is anything

left to negotiate with Government later, then, once again, the Auditor General

is subject to Government and is appealing to Government. So, I submit that all

of these matters have to be dealt with beforehand as part of a complete and

comprehensive package, providing for a pension; because it is only a ten-year

term, indeed, I think this is probably one of the few cases where we can. There

are others, the House of Assembly being one, where, because of the lack of

security and the often short tenure, a special pension provision may be made.

And I think this is one case where special pension provisions should be made for

the Auditor General, to make allowances for the short term of office. Again, it

will depend on whether he is coming from the private or the public sector, as to

what might be necessary there.

But the flexibility is in this act, and I again say it is

important that it be done before the appointment is made so that there is

nothing left to check. And, annual increments should be built in, as well. Some

formula should be negotiated to provide for annual increments so that the

Auditor General is not forced to, and is not able to go back to Government to

look for any changes. In other words, once he is appointed, he is there for ten

years and he is not subject to the will of Government.

One item here, Mr. Speaker, deals with access to information.

The Government House Leader might clarify this particular question. It is

Section 19, which states that: "Notwithstanding sections 17 and 18, the auditor

general shall not be permitted access to reports arising out of the conduct of

lawful police investigations or to information in the records listed in

paragraphs 9(1)(

b) to (

f) of The Freedom of Information Act except for the

information in the records disclosed under subsection 9(2) of that Act." In

other words, items that are protected by Freedom of Information are not

generally available to the Auditor General, and that is understandable.

One question that arises, though, are Cabinet Minutes. It has

been the tradition in the past for the Auditor General to be provided copies of

Minutes of Council for his information. I don't know how he could operate

without having Minutes of Council made available to him, and, on a timely basis;

he must know the decisions of Cabinet if he is to determine whether or not the

finances of the Province are being dealt with in accordance with those Minutes

of Cabinet. Under the Freedom of Information Act, the Minutes of Cabinet are

excluded, so there may need to be a clarification or simply a statement to the

fact that what has been taking place in the past will continue. Because, to my

knowledge, he has been given access to all Minutes of Council, and I have no

reason to believe that he would be denied those in future but, just for

clarification, perhaps the President of Treasury Board would address that issue

so that it is very clear that he will still have access to that.

It is interesting that all Crown corporations and agencies

are here. I think this came from the Legislation Review Committee, of which I

was not a part; but I understand there was concern expressed there as to what

Crown corporations meant. And I understand now, the act having stated `whether

corporated or unincorporated, 50% or more of the members of which or 50% or more

of the members of the board of management or board of directors of which, are

appointed' by Government. So that clarifies, I think, that school boards and

hospital boards are now subject and will continue to be subject to the Auditor

General, and so they should be. It is a major area of expenditure for Government

and I think the accounts of school boards and hospital boards -

MS. VERGE: School boards are not covered, but hospitals

boards are, (inaudible).

MR. WINDSOR: My colleague tells me that school boards are

not covered but hospital boards are; perhaps you could check and clarify that

for us. It is an area of major expenditure for Government. I was under the

impression that school boards and hospital boards were covered by this. Perhaps

we could have that checked. That is

Section 2(1)(a): "`agency of the Crown'

gives a definition of agency, defines which agencies are there. It is covered by

2(1)a), and down in 2(1)(e), "`Crown controlled corporation.'" So it is Crown

corporations and Crown controlled corporations.

MR. HEARN: Yes, boards are, school boards are.

MR. WINDSOR: Pardon?

MS. VERGE: Yes, I was looking under (e) (inaudible).

MR. HEARN: School boards are okay, 50 per cent or more of

the members are (inaudible).

MR. WINDSOR: So the school boards are not covered then by

the Auditor General?

MR. HEARN: Yes, they are covered, they are.

MR. WINDSOR: We have a difference of opinion on this side

as to whether school boards are covered or not. Maybe the House Leader will

clarify that once and for all.

MR. HEARN: The change has been made. They made the

changes from (inaudible).

MR. WINDSOR: Again, it is important to recognize that the

Auditor General is an officer of the House. This is a good opportunity, Mr.

Speaker, for me to say that the Public Accounts Committee, of course, is a

committee of the House which works very closely with the Auditor General. I have

the honour now, of being appointed to that Committee as Chairman. I want to, if

I may, at this point in time, extend my congratulations to my colleague from St.

Mary's - The Capes, who acted as Chairman of the last Public Accounts Committee,

and to other members of the Committee who may or may not have been re-appointed.

My experience over the past several years is that that

Committee has functioned extremely well and has provided an invaluable role in

examining the public accounts. The Auditor General becomes very much the officer

of the House that works so closely with the Public Accounts Committee, he, being

the person who examines the accounts, and the Public Accounts Committee often

being considered as the watchdog of government. Well, the Auditor General and

the Public Accounts Committee, together, as an officer and as a committee of the

House of Assembly are the final arbiters, I guess, or the final protectors of

the public purse. They, more than any other arm of government or of the House,

have the power to safeguard the public purse and to ensure that government is,

indeed, acting in accordance with the Financial Administration Act and good

financial and accounting procedures.

Mr. Speaker, there is not a great deal more that one could

say about this act. Again, it is important to recognize - and I was talking

about the authority of the Auditor General - that he was not elected, that he

has, in fact, been appointed by the House, and therefore, should stay away from

policy to a greater or lesser degree.

Again, this act provides that the House of Assembly - not

only does the Auditor General examine matters arising from his audit of public

accounts, but he, of course, can and must respond to requests from the House of

Assembly or the Public Accounts Committee. Again, this ties the Public Accounts

Committee and the Auditor General together, in that the Public Accounts

Committee has the power to ask the Auditor General to undertake specific tasks.

Clause 16(1): to "inquire into and report on a matter relating to the financial

affairs of the province or to public property or enquire into and report on a

person or organization that has received financial aid from the government of

the province or in respect of which financial aid from the government of the

province is sought."

So this gives broad powers to the Public Accounts Committee

and the Auditor General, working together to examine areas, and where government

has financed private enterprise, particularly, which would be of great interest,

obviously, to all hon. members of the House.

The House leader drew attention to the fact that the Auditor

General may make expenditures in accordance with his budget without approval of

Treasury Board. Again, that is just another example of where the Auditor General

is totally autonomous, and so he should be. It is a small little clause but a

very important one, a very, very important one. My experience would tell me the

Auditor General has never particularly had any problem getting approval to hire

consultants or individuals or purchase services that he needs to carry out the

duties of his office. Nevertheless, it once again eliminates the need for the

Auditor General to refer to Government for approval of anything, and that is

very, very important to confirm his independence.

Clause 32: "The commission shall appoint a qualified auditor

to audit annually the office" of the Auditor General. Again, it is important

that the Auditor General be audited. It is not only important to appear to be

correct, it is also important to be shown to be correct, Mr. Speaker. I think

that is a new provision, in fact. The approval of the budget of the Auditor

General will now be submitted to the commission, in other words, the Internal

Economy Commission, again removing that from the Minister of Finance. That is an

important aspect of this piece of legislation, Mr. Speaker, that the Auditor

General does again have the freedom from having to go to the Minister of

Finance.

So, Mr. Speaker, we find very little to find fault with in

this legislation, outside of the couple of minor points that I have asked to be

clarified. Perhaps the House Leader can clarify those for us. Other than that, I

think it is a progressive piece of legislation, a piece of legislation that we

had promised to the Auditor General about four years ago and that has been

coming forward ever since. It is, in the view of our Auditor General, having

spoken with him recently, perhaps as good as, if not better than most pieces of

legislation presently in place in Canada. I think we are again leading the way,

and so we should. It is not perfect by any means. No doubt the Auditor General

may well come back, as he is entitled to and as he should, if he finds some

areas of weakness here over the coming months and years, for minor amendments to

the bill.

Having said that, Mr. Speaker, we support this particular

piece of legislation.

MR. SPEAKER: The hon. the Member for Humber East.

MS. VERGE: Thank you, Mr. Speaker.

I join with my colleague, the Member for Mount Pearl, in

expressing my support for the principle of this bill, "An Act Respecting The

Office Of The Auditor General." I am going to speak briefly, largely based on my

experience as a member of the Social Legislation Review Committee which examined

an earlier version of this bill more than a year ago.

Beginning in the Spring of 1990, the Social Legislation

Review Committee, chaired very capably by the Member for Carbonear, examined the

Government's first draft of an Auditor General's Act. We invited to our

deliberations, Auditors General of all the Canadian jurisdictions, and we were

fortunate in that the National Association of Auditors General had a meeting in

St. John's in July of 1990. During their visit the Auditor General of Canada and

the Auditors General of two or three of the provinces, including Ontario and

Alberta, accepted the Committee's invitation and came to our hearings, held in

the old House of Assembly Chamber, where they gave us the benefit of their

experience and their views about our proposed new act. Thanks to their

contribution and other submissions, as well as deliberations of the Committee

members, ourselves, we passed on to the Government recommendations for some

modifications of the original bill, and I think most of them have been taken

into account in preparing this final draft of a bill for the full House of

Assembly.

I think the President of Treasury Board was quite sincere in

making the comment he did about the importance of this legislation. As a former

Chairperson of the Province's Public Accounts Committee, he, from that

experience, saw, a couple of years ago, the need to have a separate act for the

Auditor General. He has consistently pursued that objective since the Government

changed and since he has held several positions in the Cabinet. He spoke quite

eloquently about the importance of having an appropriate legal framework to

ensure that not only does the Auditor General, in fact, function impartially and

independent of any political interference from the executive branch of the

Government, but that there not even be any reason to suspect that there might be

interference or that there might be the prospect of a Cabinet reward or the

withholding of a reward based on the Auditor General's performance.

As I said, I think the President of Treasury Board was

sincere in making those comments, however when any objective onlooker examines

the record of the Wells Administration in dealing with offices that are supposed

to function at arms length from the Cabinet, then one has reason to be

suspicious.

This is an Administration which in a short two and a half

years, through the use of its majority in this House of Assembly, has altered

the composition of the Public Utilities Board, has changed the nature of the

board, reduced the number of members, and then set up the Cabinet to

discriminate among the former members. In fact the Cabinet rejected some former

members while retaining others. The Cabinet unceremoniously got rid of Andy

Wells, who had pleased many consumers in the Province through his vigilance and

through his astute questioning of expenses of the public utilities.

Then we saw the Government, through the use of the Liberal

majority in this Chamber, completely eliminate the office of the Ombudsman. That

office was created by a special act of this Legislature. The legal framework was

designed to ensure the impartiality of the Ombudsman. The Act provided for the

Ombudsman's appointment for a term of five years. The Wells 'real change'

Administration made quite a change with respect to the Ombudsman. The

Administration used its majority in the House to cancel the Act and eliminate

the office altogether. More recently we saw the Administration use its majority

in this Chamber in enacting a new Provincial Court Act, one provision of which

was to shorten the term of office of the Chief Provincial Court Judge.

So while today we have before us a President of Treasury

Board, who I think is sincere in saying that he wants an independent office of

the Auditor General, and he wants to have a legal framework to ensure that, we

have to shake our heads at the inconsistency between those words and the deeds

of his Administration in tampering with and even eliminating other offices that

were designed to function at arms length from the Cabinet.

Before I conclude, Mr. Speaker, let me take this occasion to

ask: what has happened to the Legislative Review Committees? Now we know that

the Member for Carbonear is no longer chairing the Social Legislation Review

Committee, but since he left the Committee has not met, not even once. The

Social Legislation Review Committee has not functioned since last March. The

Government has not put before that Committee even one bill in the field of

Health or Education or Social Services or Justice. Now we all know that these

are areas in need, in serious need in some instances, of legislative reform. We

have even heard Ministers opposite make promises about a new schools act, about

legislation to re-align colleges and institutes in the post-secondary education

field. We have heard not much from the current Minister of Social Services but a

lot from his predecessor about good intentions of bringing in a long awaited and

badly needed Child Welfare Act, an overhaul of the child welfare legislation.

The previous Minister of Social Services said that he would have before the

Committee and the Legislature a new Child Care or Day Care Act.

The Minister of Education last Spring rejected a proposal I

made, a motion I made to amend the School's Act to give parents the right to

chose the school nearest to the family home for their child, regardless of the

family's religious affiliation. The Minister declined to support that amendment

saying he would rather wait until he presented his bill for a whole new revised

School's Act this Fall. Where is the School's Act? Why has not a draft of the

School's Act been given to the Social Legislation Review Committee? In the case

of justice I know that the Law Reform Commission two and a half years ago gave

the Government a comprehensive report recommending a new Limitations of Action

Act. That report was done following extensive consultation with legal

practitioners and others in the Province. What happened to the new limitations

legislation? Obviously, Mr. Speaker, the Legislation Review Committee system,

which was a good innovation of this Administration, has been abandoned by the

Administration and obviously all their talk and even promises about new

legislation has amounted to nothing. They are badly behind in their legislative

program. The only legislation this Administration has ready for this Fall

sitting of the Legislature are a few bills that are left over from last year.

This Auditor General's Bill was dealt with by the Legislation Review Committee

more than a year ago. It could have been passed last Spring as far as we in the

official Opposition are concerned. Finally, they are presenting it now. Beyond

this Auditor General's Bill, Mr. Speaker, all they have are a few minor

housekeeping bills. Now, they may be waiting to impose some heavy duty measures

on us, bypassing the Review Committees - we will see. I would like to know what

happened to the Legislation Review Committees? Is the Government still committed

to that Review process? What happened to all the good legislation, the reform

legislation, specifically the bills I mentioned? Promises were made, statements

were made, but we still have not seen any bills.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for St. Mary's - The

Capes.

MR. HEARN: Thank you, very much, Mr. Speaker.

I would also like to take the opportunity to state that this

is a very good piece of legislation, originally piloted by my colleague to my

right, the Member for Mount Pearl, followed through undoubtedly by the President

of Treasury Board, who himself had a great interest in the Auditor General's

office when he was the former Chairman of the Public Accounts Committee. The

Act, undoubtedly, has been brought in after a fair amount of discussion with the

Auditor General's office and this sort of worries me because it is very unlike

Government to discuss legislation with anyone. This is a prime example of the

success you can have in bringing in proper legislation, or rules and

regulations, if you go out and discuss things with the people affected, because

undoubtedly then you can come up with a piece of legislation, or anything else,

which is agreeable to all. There are a few points in this which are certainly

worthy of note because they have given the Auditor General controls above and

beyond which he already had. Certainly, his independence is undoubtedly greater.

It has been strengthened in this new Act and I think that is extremely important

for a person in his position.

The Auditor General, I understand, will now be reporting to

the House through the Speaker, rather than through the Minister of Finance. A

lot of people thought the Auditor General came under the Department of Finance,

which takes away this independence that we talk about.

The ten-year nonrenewable term, as was mentioned by my

colleague from Mount Pearl, I think is probably a positive step also, because

the person going into the job knows what is there and he does not have to worry

whether or not what he says or does during that term will effect whether he is

appointed again to the position or just turfed out.

The pension arrangements that are there, or at least the

openings to come up with some proper pension arrangements, are also positive.

Because if you tell somebody your position is only for ten years, especially if

you are dealing with a person who may not be at the end of a career, then

undoubtedly some special arrangements would have to be made above and beyond

others who would go through a lengthy term in an office and retire after

reaching a certain age with a certain number of years in. I think that is also

very important.

The broadness of the Act gives the Auditor General a fair

amount of scope in relation to his commentary on value for money. It does not

really give him value for money auditing, and I think that is right and proper,

because governments are elected to govern and there are times when they have to

be more concerned with certain things rather than the bottom line. Once again

this might be a new thing for this present Government to look at, but decisions

sometimes have to be made based upon social needs. If you judge all government

decisions based upon value for the dollars spent, then maybe we would not be

getting the proper value for the dollars. As I say, that is why governments are

elected, to make such decisions, and sometimes you have to make decisions

whereby you may not be getting the best value for the dollar spent, but it is

for the greater good of the people who are affected and involved.

The Act, however, does give the Auditor General the right to

comment, and that is extremely important. Those of us who have been fairly

closely involved with the office of the Auditor General, those of us who have

had the privilege to sit on the Public Accounts Committee in particular, are

well aware of the importance of that office. There is no doubt about the fact

that the reports that come to this hon. House, that have been coming over the

last number of years, there is very little, as we would say, political meat in

these reports anymore. One of the reasons is because of the great work being

done by the Auditor General, but also, of course, I think it is a tribute, as we

have said publicly before, to the great public service that we have in this

Province, as well as the guidelines that have been put in place by the previous

administration.

I am not surprised that we have a very good Act because it

has been reviewed and screened by the Review Committee, chaired by the Member

for Carbonear originally, well not originally the Member for Carbonear but he

originally chaired the Review Committee that looked at this Act. I am not

surprised it is a good Act because the member made a very good contribution to

the Public Accounts Committee when he was there. In fact, he was one of the

leading lights on the Public Accounts Committee. His contributions were always

worthy of note. I think the member enjoyed being on the Public Accounts

Committee because we did have two and a half or three good years together on

that Committee. I would like, at this time, to pay tribute not only to him but

to the other members who served on the Public Accounts Committee, the Member for

Bonavista South, the Member for LaPoile who was on the Committee and also - who

was the other member we had from that side of the House?.. the Member for

Carbonear, and, of course, my vice-chair at the time, the Member for Placentia.

We were joined by one of the newer members towards the end, I think for one

meeting. Not to forget, of course, the members on this side, the Member for

Burin -Placentia West and the Member for Green Bay, who sat on the Committee

with us also. Hopefully some of the things we started will be continued by the

new Public Accounts Chairman and his group. I am certainly sure they will.

One of the questions raised in prior discussions, was whether

or not the Auditor General has the right now to go in and look at hospital

boards and school boards. I am under the impression, and maybe the President of

Treasury Board when he speaks later will clarify this point, the Auditor General

can now audit school boards and hospital boards if he so wishes. So maybe we can

get that clarified. There was some question as to whether or not he had that

authority. My reading is that as we have more than 50 per cent of the school

board members elected now and so on, that the Auditor General can audit school

boards, but it might be worthwhile looking at it. Because I think it is

extremely important that the Auditor General have the power to look at hospital

boards and school boards.

In some of our deliberations over this past year or so, we

dealt with some hospital boards, and even though they showed they were doing a

tremendous job in very adverse conditions quite often, especially when you are

trying to run hospitals in rural Newfoundland where it is hard to attract

professional staff and so on. I suppose, there are a number of occasions where

people misinterpret the way some of the boards spend some of their money, so if

the Auditor General has a chance to get in there, it will be a help to them plus

clarify I think, for the good of the Government itself and the public, why and

how these boards operate and spend some of the dollars they have to spend to

attract professional staff to the area.

Our hearings, I think, showed that we were not out there

witch-hunting. We were giving the groups and agencies a chance sometimes to

bring some of their problems to the fore, chances that they had not had in the

past, and hopefully the hearings were beneficial to all.

One

section of the Act, I think it is

Section 15, raises some

concern, and it states: "Where during the course of an audit, the Auditor

General becomes aware of an improper retention or misappropriation of public

money or another activity that may constitute an offence under the Criminal Code

or other Act, the Auditor General shall immediately report the improper

retention or misappropriation of public money or other activity to the

Lieutenant-Governor in Council."

One of the concerns there is the magnitude perhaps of the

problem because I remember some of the things we dealt with, and in some of the

hearings there were a number of little petty things raised, you know, ten

dollars in petty cash was missing and where do you draw the line, because as is

written of course he has to comply with the Act, and if he is going to be

running to Government saying well, in auditing such a thing out of the cookie

jar there was twenty-five cents missing or what have you, it is a criminal

action so we have to report it. So, undoubtedly that can be clarified because I

think it is a concern perhaps for his office and some of his auditors and those

of us who have been involved.

Other than that, Mr. Speaker, I certainly think that it is a

tremendous piece of legislation. Undoubtedly it will be in the forefront of such

legislation in the country, and that is nothing strange because once again we

are quite often looked upon as being behind everybody else in this country. We

have said it before, whether it be in the field of education or in the field of

auditing, we can hold our head with anybody. I think some of the things we are

doing certainly put us in the forefront and not running behind in this country.

So, I congratulate the Government on bringing in this piece of legislation which

I state again was already put in place and the spade work was done by this side

and we were glad to be a part of it also.

MR. SPEAKER: The hon. the President of Treasury Board, if

he speaks now he will close the debate.

MR. BAKER: Thank you, Mr. Speaker.

There were some points raised by some of the hon. Members

opposite and I would like to thank the Member for Mount Pearl and the Member for

St. Mary's - The Capes for their contribution and suggestions as to explanations

or changes that may be needed.

There were a few points which I will deal with now. In terms

of the Minutes of Council being made available to the Auditor General, I think,

as the Member for Mount Pearl realizes it is absolute necessary, and the Member

for St. Mary's - The Capes as well, that in order for an Auditor General to

determine whether in fact spending was done as intended by the Executive Council

then Minutes have to be available. I do not think there is any doubt of the

intention of providing the Minutes. However, it might be grounds for an

amendment or something in the Committee stage to make that adequately clear. The

Auditor General obviously cannot carry out the function of the job unless he

knows what the original decisions were in the first place. So, that is an

important point. I would just like to state the intention of Government and to

suggest that may be this could be specifically stated.

In terms of

Section 2, and this was a concern for me as well,

which had to do with

definitions but in essence, even though they are only

definitions they are very important from the point of view of the intent of the

whole piece of legislation. Originally, in the first piece of legislation that

went to the Legislation Review Committees the wording was different. I am not

sure if I can answer the Member's question totally to his satisfaction, but I

can say that the wording was different when the first piece of legislation went

to the Legislation Review Committee, and the Legislation Review Committee

suggested a change.

Now in his comments the current acting Auditor General,

making a submission on behalf of the staff of the Auditor General's office,

indicated that if we were to change it this way, that we would, in fact, get

these groups that the Member for Mount Pearl talked about, and would be adequate

to allow audits of these groups. However, like him I am