GOVERNMENT SERVICES ESTIMATES

COMMITTEE

May 13, 1991

Department of Municipal and Provincial Affairs

(Unedited)

The Committee met at 7:00 p.m.

MR. CHAIRMAN: Order, please!

I will introduce our Committee. My name is Melvin

Penny, and I am the Member for Lewisporte and I will be chairing the meeting

this evening. On my left is the Vice-Chair, Mr. Bob Aylward, the Member for

Kilbride. Over to my left is Jim Walsh, the Member for Mount Scio - Bell Island

filling in tonight for Percy Barrett, the Member for Bellevue; Larry Short, the

Member for St. George's; Mr. Bill Ramsay, the Member for LaPoile; and Mr. Glen

Tobin, the Member for Burin - Placentia West filling in for Mr. Norm Doyle, the

Member for Harbour Main.

I would ask the Minister to introduce his officials

again for the sake of Hansard, even though he did that at the previous meeting

down at the Colonial Building. We have a new equipment operator here tonight.

You do have the same officials don't you?

MR. GULLAGE: (Inaudible).

MR. CHAIRMAN: Okay, but I will ask you to

introduce them again, and I would remind the Minister's officials that when they

speak they should introduce themselves for the sake of Hansard, to read their

name and their title for the record. I would caution them, as well, that they

are not to answer any questions pertaining to policy but only on matters

relating to fact. I remind the Committee that they are not to ask any questions

of Committee Members. Questions are to be directed only to the Minister and the

officials will answer if requested to do so by the Minister.

I would like to welcome the media here tonight. I must

apologize to the young lady because I do not know her name, but I believe she is

representing the Evening Telegram. Our Page for tonight is Paula, and Elizabeth

Murphy will be the Clerk of the Committee for this evening. I think that

basically covers everything. Anything other than that has already been said. I

will turn it over to the Minister and he can introduce his officials.

I will remind everybody, as well, that we have already

gone through the opening statement by the Minister and the opening comments by

the official Opposition, so we will go directly into questions, direct

questions, concise questions and concise answers, and every Member will be

allowed a maximum of ten minutes before I turn it over to some other Member of

the Committee.

Mr. Minister.

MR. GULLAGE: Thank you, Chairperson.

The Deputy Minister of Municipal and Provincial

Affairs is not with us tonight. He is conducting some labour hearings continuing

on from a previous life. I do have with me Deputy Minister, Frank Manuel. Frank

is in charge of three commissions, Pippy Park, the Residential Tenancy's Board,

and the Canada Games Park Commission. He is chairman of three of those

facilities and he is here tonight in his capacity as Chairman of the Summer

Games Park Commission. Art Colbourne is the Assistant Deputy Minister of

Municipal and Provincial Affairs and Don Peckham, Assistant Deputy Minister as

well, and Felix Croke, Acting Director of Financial Operations.

MR. CHAIRMAN: Mr. Tobin.

MR. TOBIN: Thank you, Mr. Chairman.

(mike off)

I am not sure but, in any event, we will keep the

questions on the Canada Games Park to tonight or tomorrow night, but we will

deal with some of the other aspects with Mr. Manuel.

I want to go right to the heart of the question and

that is the question of amalgamation, Mr. Minister. I have some concerns, not

just here but in my own district as well. Over the past weekend I ran into some

very serious concerns. I met with people on council, particularly the Lewin's

Cove Council, and other places related to the amalgamation issue. We have been

hearing a lot about the amalgamation issue that has gone beyond what has taken

place as a result of the heavy media campaign between St. John's and Mount Pearl

that has caused people in other parts of the Province to express interest and

have concern. Could the Minister tell me when he will be dealing with the North

East Avalon?

MR. GULLAGE: That is a pretty well know fact now.

I will be in the House tomorrow with a Ministerial Statement and the Resolution.

MR. R. AYLWARD: You would not want to give us a

little preview tonight, would you?

MR. TOBIN: I thank the Minister for that answer.

Let me ask the Minister then, in places like my own district, for example - as a

matter of fact I will be quite open about it. I have heard from the Mayor of

Lewin's Cove who suggested that there is a recommendation going through that

would see Lewin's Cove being forced to amalgamate. Can the Minister tell me if a

Town like Lewin's Cove, which rejects amalgamation as they did through petitions

and presentations at the public hearings, need have any real worries now about

the issue being forced?

MR. GULLAGE: Well I think we have said fairly

consistently throughout the process that we will not amalgamate groupings unless

we see that it is clearly in the best interest of the people to do so.

MR. TOBIN: No. If, where the people have rejected

it, Mr. Minister, through the form of 98 per cent rejection, have they anything

to fear or not?

MR. GULLAGE: No, no! Let me just finish. The

danger with a petition, if I might elaborate just a little bit, is that

petitions, as you probably know, and plebiscites and that sort of thing, were

removed from the Municipalities Act back in the 70s, on Whelan's recommendation,

the Whelan Commission, because he saw them as being emotion driven people were

voting based on the way the questions were phrased and really did not have any

access to the facts of the matter, per se.

So, yes, they are important, in terms of getting an

expression of opinion, as long as it can be seen that they are basing their vote

on facts, and that is pretty hard to determine in a plebiscite. Most plebiscites

have probably a simple question, are you for or against, and do not really get

into the details because that is what the feasibility process does. We rely more

as a Department, and I certainly do as a Minister, on the feasibility process

itself: the hearings; the input of the councils; the input of the people at the

hearings; briefs from the public; actual representations on facts between the

communities; the financial information; how they feel about coming together; and

why they want to come together or why they do not want to come together. So we

have said that we would not put together communities unless it was clearly in

the best interest of the people of those communities to come together.

We would not, for example, want to see a community

continue to suffer, for whatever reason it might be, maybe an inadequate tax

base or maybe all the taxes are in the adjoining community where they have a

business base, perhaps a fish plant, industry and business or -

MR. TOBIN: You are missing the question, Mr.

Minister. I am just asking if these people have anything to fear based on their

objections and also based upon the fact that the Premier, in a letter, stated

that amalgamation with any surrounding municipality will not go on as long as

the people opposed it.

MR. GULLAGE: That is not what we said at all. What

we said was, if we wanted to put communities together, where we saw that it was

in their best interest to bring them together. And I am starting to give you

some reasons why. There are disparities out there in most situations and the

only way to correct a disparity, where tax revenues are, say, not being shared

adequately and so on, is to bring communities together. To correct a wrong and

to bring fairness into the situation, we said we would bring it into the House

of Assembly. Now that was clearly what we said. We did not say we would not do

it, we did not say we would back away from it, and Government has an obligation

to make a decision.

MR. TOBIN: Yes, the Premier did say exactly what I

said, Mr. Minister.

MR. GULLAGE: Well, I would suggest he did not. I

would suggest that he said what I have been saying and what both of us have been

saying.

MR. TOBIN: Well, if that is the case, I will read

it into the record for you: 'I assure you that if the majority of residents of

Lewin's Cove are opposed to being amalgamated with any surrounding municipality,

then there are no plans to force the issue.'

MR. GULLAGE: In the isolation of the Cabinet Room.

MR. TOBIN: That is exactly the sentence that is

written here.

MR. GULLAGE: Yes. Do you want to carry on from

there with the rest of what he said.

MR. TOBIN: Yes, I certainly will: `In many cases

Government believes that there may be considerable advantages to amalgamating

certain communities into a large town. I refer particularly to the integration

of services such as water and sewer systems, fire protection, garbage

collection, and snow clearing. This may not be the case in the community in

which you live. The public hearings should clearly reveal this to the

Commissioners. Public hearings have to take place prior to recommendations being

made to Government and certainly before any final decisions regarding

amalgamation are made.

I believe that since you feel so strongly with respect

to this matter it would be in your best interest to submit either a written

brief to the Commission or give an oral briefing at the hearings. Once again let

me assure you that if the community of Lewin's Cove does not wish to amalgamate,

the Government has no plans to force it upon you.'

MR. GULLAGE: Yes, but the rest of the letter does

not -

MR. TOBIN: I beg your pardon?

MR. GULLAGE: You are taking things out of context

once again.

MR. TOBIN: No I am not taking anything out of

context.

MR. GULLAGE: You are taking the first and last

paragraphs and you are omitting the main content of the letter. What he is

clearly saying is that if there are reasons that come out in the feasibility

process that dictate amalgamation taking place, the Government will proceed. We

will not do it upstairs in the Cabinet room. It does not mean we are going to

back -

MR. TOBIN: No, it does not say that at all.

MR. GULLAGE: Well I read the letter differently

than you.

MR. TOBIN: `I assure you that if the majority of

residents of Lewin's Cove are opposed to being amalgamated with any surrounding

municipality then there are no plans to force the issue.' It does not say by

Cabinet, it does not say by the House of Assembly, it says that there are no

plans to force the issue. That is what is there, Mr. Chairman.

MR. WALSH: A point of order, Mr. Chairman.

MR. CHAIRMAN: Mr. Walsh on a point of order.

MR. WALSH: Mr. Chairman, on a point of order. I do

not want to take time away from my colleague here in the House, but since that

is a letter from the Premier to the Community of Lewin's Cove or wherever it is,

then by all means in Question Period tomorrow deal with the letter with the

Premier. I mean you are asking the Minister or someone else to interpret a

letter that somebody else wrote to a third party. Now we have the fourth and

fifth party commenting on it. I would suggest that if the letter was written by

the Premier then deal with it with the Premier. I mean we can be here all night

dealing with semantics of a letter by a third person to a fourth person. We are

here to do estimates and I have no problem doing estimates with a certain amount

of latitude, but I am not going to sit here all night listening to a letter to

Lewin's Cove from the Premier and hope to have a discussion on it when I do not

even know what is in the letter myself. So I do not think that is fair to the

other Committee Members who are duly recognized here tonight.

MR. TOBIN: There is clearly no point of order, Mr.

Chairman. I can sympathize with the hon. Member. He is a little bit embarrassed

that I am standing up for my constituents where he has failed in the past to

stand up for his. I am here to fight the amalgamation issue in my constituency,

if it is against their wishes, unlike him who is here to support whatever the

Premier wants against the wishes of his constituents. But clearly there is no

point of order.

MR. WALSH: On a separate point of order, Mr.

Chairman.

MR. CHAIRMAN: The Chair has not ruled on the first

point of order yet, Mr. Walsh. There is no point of order. It is a disagreement

between two hon. gentlemen, but I would like to remind Mr. Tobin that this is

estimates. I have granted him leeway to ask whatever question he wished and I

will grant the Minister the same opportunity to answer that question. I would

not want this to get into a political debate. These are estimate committee

meetings and I would suggest that you ask -

MR. TOBIN: (Inaudible).

MR. CHAIRMAN: The Chairman is ruling on a point of

order, Mr. Tobin. I suggest that you ask your question and give the Minister an

opportunity to answer it.

Did you have another point of order, Mr. Walsh?

MR. WALSH: The only thing, Mr. Chairman, is if

this is going to be the tenor of the meeting from here on in then I want to say

that as a duly constituted Member of the Committee I may be reluctant to allow

the hon. Member to continue. I do not mind questions, but to be making political

statements, when they can be just as easily dealt with in the House of Assembly

tomorrow in Question Period.

MR. CHAIRMAN: Mr. Aylward.

MR. R. AYLWARD: Mr. Speaker, I have heard on a

couple of occasions now that Members will or will not allow other Members of

this House of Assembly to speak at committee meetings. Members of this House of

Assembly have every right to speak at committee meetings. It is not something

that we are granting him by leave. Every Member of this House of Assembly may

speak at committee meetings. They may not vote if they are not duly recognized

Members but they certainly have a right to speak. If the fifty-two of us were

here tonight each of the fifty-two of us would have equal rights to speak.

AN HON. MEMBER: Second to the committee.

MR. R. AYLWARD: Certainly second to the committee

if necessary. There was no committee member recognized before the Member for

Burin - Placentia West who has the floor, and now we are wasting his time so we

should get on with it.

MR. CHAIRMAN: The Chair has already established

that the letters that are required to make Mr. Tobin a bonafide Member of this

Committee can be had shortly, in short order, if it is requested. I have already

explained that we will not allow him voting privileges without it, nor will we

allow him to be officially a part of the quorum, but the Chair has recognized

that he is here as the official opposition critic for that Department and we

have granted him the time to ask questions. I would like to rule on the comments

made by Mr. Aylward.

In my standing orders, I had this highlighted,

Standing Orders 86B: Any Member of the House of Assembly, who is not a Member of

a Standing Committee, may, unless the House or the Committee concerned otherwise

orders, take

part in the public proceedings of the Committee, but he may not

vote or move any motion, nor shall he be part of any quorum.

If the Committee wishes to remove its permission

granting Mr. Tobin the right to ask questions, then the Chair would have no

choice but to rule on that, in which case Mr. Tobin would have then, to either

accept that ruling or get the letter to which we referred, but I would prefer

that it not come to that; I would prefer that we could proceed in the manner

that we have proceeded at the other four meetings without any problems and I

will rule that there is no point of order and considering that we have used up

Mr. Tobin's time, I have to rule that he is out of time right now, I will go to

another Member of the Committee but I will get back to you.

Mr. Walsh.

MR. WALSH: Thank you, Mr. Chairman. Mr. Minister -

MR. TOBIN: On a point of order, Mr. Chairman?

MR. CHAIRMAN: On a point of order, Mr. Tobin.

MR. TOBIN: Mr. Chairman, I came here tonight as

the critic for the Department of Municipal Affairs and I came here to ask

questions of the Minister. The last weekend when we started this process I think

we had a good meeting and I think we can have another good one tonight.

Now the only difference tonight, compared to last

week, is that I do not think there was a single point of order raised. Tonight,

twice, in my allocation of ten minutes, the Member who was not here the other

night came in and choose to disrupt the meeting. All Mr. Walsh, the Member for

Mount Scio - Bell Island, has been doing is disrupting the meeting intentionally

to deny me my ten minutes to question the Minister.

I believe, Mr. Chairman, that I have a right to come

here as a Member as you just ruled, and ask questions without being intimidated

or attempted to be intimidated by the Member for Mount Scio - Bell Island. I

think, Mr. Chairman, that the Member should be put in his place and told not to

continue with that type of practice, because if he does, I have no intention of

staying here tonight if there are attempts to muzzle me by the Member for Mount

Scio - Bell Island, denying me the time I have been allocated, so I think that

rather than get this meeting off on the wrong foot, I think, Mr. Chairman, that

probably you should set the ground rules right away for the Member for Mount

Scio - Bell Island and let us get on with the same type of a good debate and

discussion that we had the other night which can happen again tonight, if the

Member for Mount Scio - Bell Island is prepared to let it happen and forget his

incompetence.

MR. CHAIRMAN: To speak to that point of order, Mr.

Ramsay.

MR. RAMSAY: I just want to clarify something. If

the hon. Member for Burin - Placentia West is having a problem, and he feels

that his credentials are not in place, why do we not recess for a couple of

minutes, Mr. Chairman and have him produce them, then there is no question as to

his credentials before the Committee.

MR. CHAIRMAN: Order, please!

The Chair has already acknowledged that Mr. Tobin will

be given the time to ask his questions. I would have to agree with the statement

that was made, that there was no point of order called at the last meeting at

the Colonial Building. I do not believe there was, but I stand to be corrected

on that. I would prefer that we get back to that kind of questioning and

answering as well, so I would respectfully ask all Members of the Committee to

recognize that this is an Estimates Committee Meeting and to deal, not

necessarily specifically with the Estimates, but to deal with it in a proper

question and answer forum.

The Chair had recognized Mr. Walsh.

MR. WALSH: Mr. Chairman, to go back to the first

two words I managed to get out before the hon. Member decided to shoot from the

hip rather than to listen -

MR. CHAIRMAN: Order, please!

Are you on a point of order now?

MR. WALSH: No, I am speaking. What I wanted to

say, Mr. Chairman, was that I did not -

MR. CHAIRMAN: Order, please!

Are we on a point of order now or are we questioning

the Minister.

MR. WALSH: I am asking a question but I wanted to

make a quick statement that I think could help us.

MR. CHAIRMAN: Well I would prefer that you ask the

question without making the quick statement.

MR. WALSH: Alright, let me ask the Chair a

question. Can I do what I intended to do to give my time back to the hon. Member

because it was not my intention to take time away from him. I am more than

willing to let him carry on with my time because I did cut into his time and

that was not my intention with the point of order. I would be very pleased to

relinquish what I attempted to do back to the Member so that he could carry on.

I did not want to take his time away from him.

MR. TOBIN: I would not accept (inaudible).

MR. CHAIRMAN: Very well. Mr. Walsh continue.

MR. WALSH: Mr. Chairman, I guess I can understand

why common courtesy would not be extended back and forth. Mr. Minister, there

has been a change in some of the policies with respect to areas in my particular

district and I guess others, from half acre lots to one acre lots. I understand

that that policy is now in place. Can you elaborate a little bit on that for me?

MR. GULLAGE: Yes, it is not totally in place. We

are still dealing with an amendment, but the principle has been established that

we are making a change to the larger lot size. The reasoning behind it is we

have had difficulty with the smaller half acre lots, 20,000 square feet, I

think, is the exact amount that is currently in the regulations throughout the

Province. Depending on the topography of the land, the location and the soil

conditions and so on, it can create real problems depending on the proximity of

homes and so on. So we decided that at least in the northeast Avalon, we have

started with the St. John's urban region regulations first and this is the only

area that it applies to right now. Really what we are trying to do is two

things: we are trying to control non-serviced development because with the

smaller lots it means eventually having the Province go in and help out with

modern servicing at very high costs, because the houses are separated a lot more

widely than they are in regular sub-divisions. And of course when you have to

correct servicing problems, particularly in a lot of communities where it is

very difficult to work, you know, with rocky conditions and so on, it becomes

very expensive.

So the larger lot size makes a lot more sense,

particularly if we can position the house in a certain way. The regulations are

designed so that the positioning of the house is important so that later on when

that area is serviced you can divide the acre lot up into building lots

whereas

if you put the house in the middle of the lot you would not be able to

facilitate that very well. So we also have requirements to position the house in

such a way that we can facilitate servicing in that area later on with more

smaller lots on that previous acre lot application.

So I think that pretty well covers it. That is the

reasoning behind it. Where possible we still would rather see modern servicing.

It is not really what we want to see, but we do recognize that we have

situations, particularly with land that has been in families for a long time

where they want to continue to reside on family owned land and the land is there

to do it. It does not always present a problem. We are trying to facilitate

that, but it is just we would like to have a larger lot size.

MR. WALSH: Following up on that: in areas, as you

say, where you are going to decide where the placement of the home is and so on

which is good, what about in the situation where there were some developments

that had been, if not approved, were in the process of being approved? Has any

allowances been made for any grandfathering of those?

MR. GULLAGE: Yes, we are grandfathering in

applications. I think the way it reads, applications that were in process at the

time - now I am not sure whether that would extend - maybe the ADM could help me

here. I am not sure if that would extend up to the time of the amendment being

approved or whether the grandfathering came into effect at a time we changed the

regulation. Don, perhaps you could help me there.

MR. PECKHAM: Yes. Mr. Chairman, there would be

some grandfathering in under the new regulations. Anybody who had an approved

application, a fully approved application and were affected, the application

would be honoured.

MR. WALSH: That should take me I think, pretty

well to the end of my ten minutes with the other items; I have some other

questions but I will hold them for later.

MR. CHAIRMAN: Mr. Aylward was the next one to be

recognized by the Chair, but he has turned his time over to Mr. Tobin; Mr.

Aylward has relinquished his time to you.

MR. TOBIN: Okay, thank you, Mr. Chairman. I would

like to thank my colleague for Kilbride for the courtesy extended in permitting

me the opportunity to finish my questions, as I am sure two of my colleagues on

my immediate right would have done.

Mr. Chairman, I had some questions - it was a line of

questions to the Minister of Municipal and Provincial Affairs before I was

interrupted by the Member for Mount Scio - Bell Island - on the issue of

amalgamation, particularly as it pertains to districts in rural Newfoundland and

cases where it is obvious that there is no unanimity between the towns in

question on the amalgamation issue. When do you anticipate would be the earliest

time they would have to look at hearing results of the issue of being forced to

amalgamate?

MR. GULLAGE: Well I would suggest that over the

next couple of months in particular we will be dealing with, I would say, eight

to ten groupings of communities. Reports are in now and I am in the process of

discussion with the communities.

I would suggest that in rural Newfoundland in

particular the vast majority, the vast majority will come together by way of

agreement, because they want to do it.

MR. TOBIN: And anyone who does not?

MR. GULLAGE: Well, we will only amalgamate in any

case where we see that is the right thing to do. We have about ten or twelve

amalgamation scenarios where the commissioners themselves are saying that it is

not right to proceed with amalgamation. We do not have the commissioners always

saying that amalgamation is the right thing to do, we have some who are saying

it is not, so we are obviously not going to proceed in that case. Where we get

great objection, we would have to be satisfied that, in spite of that objection,

the consequences of not doing it would be so great that we would want to

proceed.

So we want to be very satisfied. And you know, before

you would force an amalgamation, you obviously as a Government, have to be very

satisfied that the reasons for taking that action are very positive and

something that for the sake of the people you should do. You want to take the

time and I cannot foresee too many like that in rural Newfoundland.

We have some scenarios in the urban sector;

Stephenville, Corner Brook, Deer Lake, you know there are possibilities there we

may have to proceed even though we have one or more communities saying no to it;

it is just so obvious that it is right that we may want to proceed.

MR. TOBIN: In the event that there is a council

where the residents of that community strongly reject amalgamation with any

other municipality, will that be done, without at least, being brought before

the House of Assembly?

MR. GULLAGE: No. We would not bring together an

amalgamation, I cannot foresee it. I cannot speak for Government but, I cannot

foresee Government, based on the comments we have made so far - certainly the

Premier and I have been making - that, if we saw a scenario where we wanted to

proceed, we would bring it to the House of Assembly for debate; and I would see

that (inaudible).

MR. TOBIN: So the earliest then, one could expect

would be the fall session because -

MR. GULLAGE: If they were protesting, in spite of

the commissioners saying it should be done, and I am assuming now that the

commissioners - let us say-

MR. TOBIN: The commissioners, I would suspect

(Inaudible) I am very suspicious. I do not know. But based on the information

that I have received (Inaudible) and knowing the commissioners I would not be

surprised at all but they made that recommendation.

MR. GULLAGE: Well, if the commissioners were

saying that it should not proceed, I doubt very much, unless I could see

something and the Government could see something different, that we would

proceed. But if they were suggesting the amalgamation made sense then obviously

we would certainly take a hard look at it and want to be satisfied that backing

off was - backing off can be the wrong thing to do too if it is clearly in the

best interest of the people to come together.

So we would take a good hard look at it and if they

still, at the end of the day, said: in spite of everything that shows we should

be together we still do not want to do it, well yes, we would come in to the

House of Assembly.

MR. TOBIN: But it seems you are cutting back

somewhat now on the number that look like they may be amalgamated in the first

instance. If I could quote from the newspaper article, and it says basically:

frankly, the manual on how to run the whole thing seems to have been lost in

relation to the amalgamations.

MR. GULLAGE: Who are you quoting?

MR. TOBIN: It is an

article in the paper and it

says (Inaudible) dealing with the amalgamation issue. And it says (Inaudible) -

MR. GULLAGE: Somebody is saying what?

MR. TOBIN: It says: frankly, the manual on how to

run the whole amalgamation issue seems to have been lost.

MR. GULLAGE: Who's manual? And who is saying it?

MR. TOBIN: The

article in the paper, in the -

MR. GULLAGE: What does that mean?

MR. TOBIN: I do not know, Mr. Chairman. It seems

to -

MR. GULLAGE: So that has to be the gospel, because

somebody wrote it in the paper.

MR. R. AYLWARD: No, it says, frank the manual is

gone, that is what it actually says.

MR. CHAIRMAN: Mr. Tobin, could you give us the

date of that paper?

MR. GULLAGE: Do you want me to give you a

chronology of where we are with the amalgamation, just to shoot that down very

quickly?

AN HON. MEMBER: Sunday Express (Inaudible).

MR. TOBIN: Well, Mr. Chairman, if the Minister has

problems with that we will just direct it to (Inaudible) - I have another

question that I would like to ask on the amalgamation issue again. Over the past

MR. GULLAGE: Do you want me to answer that one?

Was that a question or just - ?

MR. TOBIN: Yes, well, okay, I will talk to you

about that after. There is another question, I think my time is about up.

MR. GULLAGE: Do I get a chance to respond? I

don't, do I?

MR. TOBIN: Okay, then, sure. If you want to

respond -

MR. CHAIRMAN: I think the Minister should be given

the opportunity to respond.

MR. TOBIN: By all means. I thought he did not want

to respond.

MR. GULLAGE: You're very entertaining but I

wouldn't mind responding now and then, you know.

MR. TOBIN: Okay, sure.

MR. CHAIRMAN: In the meantime, if I may, Mr.

Minister. Is it your wish, Mr. Tobin, to give us the name of the newspaper and

the date?

MR. TOBIN: Yes, it is The Sunday Express and it is

from an

article by Peter Gullage.

MR. GULLAGE: That must be correct (Inaudible).

MR. TOBIN: It is The Sunday Express and it is an

article by Peter Gullage, and it deals with the amalgamation issue. And it says

in (Inaudible): looking at the way Eric the Initiator has fired up the debate by

making half-hearted promises, it makes one wonder where the initiative for the

amalgamation has gone. Frankly, the manual on how to run the whole thing seems

to have been lost.

I was wondering if that reference (Inaudible).

MR. GULLAGE: He could be wrong, you know. It is

possible. The press are occasionally wrong. Not always, but occasionally. Let me

say this to you: At the end of the day you are going to be very surprised at the

results of amalgamation. A lot of people are going to swallow their words. Words

like that, for example. We have communities now coming to us which were not even

in the original forty-two groupings asking that we start feasibility hearings

and start the process towards amalgamation. They are not even on the list. So to

suggest that the process is not successful, I would say my only comment is: stay

tuned.

MR. R. AYLWARD: Who are they?

MR. GULLAGE: Pardon?

MR. R. AYLWARD: Which ones are coming to you?

MR. GULLAGE: Well, I am not going to - not until

we announce the feasibility hearings.

MR. R. AYLWARD: How do people in the communities

feel (Inaudible)?

MR. GULLAGE: We cannot tackle them now, we have

too many to do.

MR. CHAIRMAN: You still have time, Mr. Tobin.

MR. TOBIN: Yes, okay, sure. Well, I would like to

say the Minister expressed the same (Inaudible) confidence that I heard the

Mayor of Wedgewood Park express this morning when he said that he is not

concerned about the amalgamation issue, because both the Minister and the

Premier have promised him they will not have to be amalgamated. And it is that

type of confidence that (Inaudible) -

MR. GULLAGE: I hope you are not quoting me on that

too, are you?

MR. TOBIN: No, that is what the Mayor of Wedgewood

Park said. In any case my question to the Minister -

MR. GULLAGE: I do not think Paul said that at all.

As a matter of fact I would bet money he did not say it.

MR. TOBIN: My question to the Minister again is

that (Inaudible) -

AN HON. MEMBER: (Inaudible) on the radio this

morning.

MR. GULLAGE: Paul didn't say that.

MR. TOBIN: My question - and I am sure, Mr.

Chairman, the Premier will not have to eat his words on his commitment to the

people of Lewin's Cove. I feel very confident that will not happen either. Nor

the Minister. But my question again on the amalgamation issue is that for some

time the amalgamation issue saw the cancellation or postponement of elections to

various municipalities in the Province by a year. In some cases even longer,

particularly the City of St. John's. Does the Minister anticipate that any of

these will have to have elections again because of the amalgamation issue before

the next elections? Before their next due election date?

MR. GULLAGE: Are you talking about the groupings

outside the northeast or (Inaudible) -?

MR. TOBIN: Well it could be outside or inside. I

am saying that there have been a number in this Province that have had their

election postponed because of the amalgamation issue and then they were ordered

to go ahead. I am asking the Minister now if he sees or anticipates any of them

will have to have an earlier election instead of the regular four years.

MR. GULLAGE: I do not know if the question makes a

great deal of sense, Mr. Chairman, in all do respect. Obviously if they had an

election last year and another proposed amalgamation is going to take place that

involves that community, most likely, unless we are doing an annexation, would

require another election.

MR. TOBIN: So you are saying that there is a

possibility existing that there will be councils that have to be elected -

MR. GULLAGE: The possibility is there, sure.

MR. TOBIN: - such as the City of St. John's?

MR. GULLAGE: I am obviously not going to comment

on the northeast Avalon if that is what you mean.

MR. TOBIN: Is there any money included in the

Budget here to conduct elections in this coming year for north east Avalon or

any other part of the Province?

MR. GULLAGE: Yes, we have money budgeted for the

amalgamation procedure.

MR. TOBIN: Is there money budgeted here for

council elections anywhere in the Province?

MR. GULLAGE: I do not know if it is defined as

that. We have a block sum of money for amalgamation initiatives covered off in

this year's budget. I think it was covered off last year.

MR. TOBIN: No, but is there any money included in

this for elections? Forget about the amalgamation.

MR. GULLAGE: Elections per se I do not know. We

have not defined the budget. It is just a straight amount of money for

amalgamation.

MR. TOBIN: I think there is a budget brought in

that is now before the House of Assembly yet you do not know if the money

exists? I mean your budget is here, Mr. Minister.

MR. GULLAGE: What is the question again?

MR. TOBIN: I am asking you if there is any money

allocated in this year's budget for municipal elections anywhere in this

Province?

MR. GULLAGE: I am just trying to think of what we

have done so far and what we would do in the future. We assisted Grand Falls -

Winsor, for example, with Summerside - Irish Town just to name two that we have

done with sending out staff to help them with the transition process.

MR. TOBIN: No, I am not talking about that. I was

asking if there was any money allocated in this year's budget -

MR. CHAIRMAN: Order, please!

Mr. Tobin, your time is up.

MR. TOBIN: If I could -

MR. GULLAGE: There is no money per se, no.

MR. TOBIN: There is no money allocated for any

elections this year.

MR. GULLAGE: No. I am not sure where you are

leading with your question, but no there is not.

MR. TOBIN: Okay. That is all I asked. So that

means there are no elections.

MR. CHAIRMAN: Mr. Ramsay.

MR. RAMSAY: Thank you. Mr. Minister, I know there

seems to be a lot of commentary about amalgamation of communities based on how

our Government would proceed. Now I wonder if you might give us some indication

as to the procedures that were followed in the past and how that differs from

the manner of bringing something to the House of Assembly for open public

debate. I know they were mentioned, and not being that familiar with the avalon

area back at the time, a couple of different instances occurred as I understand

them. One was the Mount Pearl - Newtown experience and the other being Foxtrap

and some other community were amalgamated as I understand it. I just wonder if

you could explain to us the procedure that was followed in those cases with

plebiscites, or whatever, and how that would differ from the given plan for

proceeding through the House of Assembly if amalgamation is to take place.

MR. GULLAGE: Well, I can only speak for the one

that is on the floor right now and that is the northeast Avalon. Of course we

have said that we will come into the House with a resolution and have a debate

in the assembly because we do have some communities in the northeast Avalon who

are dissenting even though the commissioners are recommending amalgamation, so

we will do that.

In the past, my understanding is that that did not

take place. I could be corrected, but I do not believe it took place by way of a

debate in the House of Assembly per se. A decision was made by the Government of

the day to proceed or not.

AN HON. MEMBER: (Inaudible).

MR. GULLAGE: Yes. But it was not done - the

advantage of a debate did not take place.

AN HON. MEMBER: (Inaudible) Cabinet decision.

MR. GULLAGE: Just a feasibility process was

followed, obviously, public hearings, then Cabinet made a decision and decided

to proceed.

MR. RAMSAY: Was there a case - I suppose, the

consulting of your officials or maybe your own knowledge of it - where the

Government did proceed in deference to a community's choice, in comparison to I

guess what the overall choice or the, you know, based on the way the plebiscite

was carried out or whatever, in the past?

MR. GULLAGE: I can think of the CBS scenario with

Foxtrap, I believe it was, was the last one to not want to come in but yet were

brought in. But after - you know, the process was followed of course, with

public hearings and so on. I do not think that was debated in the House at that

particular time. The Act does give the right for the Minister and the government

to make a decision and not come to the House. It is just that the government

obviously has the right at any time to take that final step and come in here for

debate. But I do not believe it was taken in the case of the Foxtrap scenario. I

think in spite of Foxtrap saying: we do not want it, it was just a Cabinet

decision and it was done.

MR. RAMSAY: That is all I have right now, Mr.

Chairman.

MR. CHAIRMAN: Mr. Short.

MR. SHORT: I thought you were going to go back to

the Opposition there. Okay, a couple of things.

There is about $1 million I believe in the Budget

estimates for grants to local service districts. Do we have to wait for the

estimates I guess in the Budget to be passed before you can start dealing with

it? Is that the problem?

MR. GULLAGE: Yes. The thing with the local service

districts is it is part of the Budget where capital works is not. Capital works

is a Budget item in a future year when the work is substantially complete or

complete and the bank borrowings are put into the financing corporation. So it

could be in next year's Budget or even the year after. But with the local

service districts it is a current Budget item which has to wait for Budget

approval.

MR. SHORT: Okay. I want to ask another question. I

hesitate to get into this, but I want to talk about the municipal grants

structure and probably walk us through some of the improvements or whatever in

the new structure. But I want to first of all just give you an example in my

district and see if I am comprehending this new structure properly in terms of

what is happening.

I have a town council basically that used to get over

$100,000 in grants. They are carrying a fairly hefty debt load in terms of water

and sewer and as a result they were only paying about $70,000 to $75,000, which

is their 20 per cent share I guess, of their revenues. I take it the Government

was picking up the tab for the other $700,000, to use some rough figures. So if

the town submitted $70,000 and the Government picked up another $630,000 - are

we trying to get away from that kind of a drain on the public purse? Because to

me, even though it does not show up, it is almost the same as a grant to the

community, if we as a Government were paying $630,000 and the town is only

paying $70,000. In the same context even though they are paying back $70,000 we

were also previously giving them over $100,000 in grant, just through

(Inaudible) sections, right? - the water and sewer debt subsidy plus the grant

structure as well that was in place, right? So it seems to me that the town

actually did not pay anything to Government. They paid you $70,000 but you sent

them out a cheque for $100,000 or whatever the figure was, plus you paid another

$630,000 to service the $5 million debt, or whatever it is, right? So where did

the town pay any money in those kinds of figures? I do not have the exact

figures here but -

MR. GULLAGE: You've asked a very complicated

question.

MR. SHORT: Yes. But what I am getting at is: I

always out in the rural communities worked with local service districts, and I

thought we were always ripping off the government if the government gave us a

$55,000 grant. I always felt bad that local communities, say with local service

districts, got an out-and-out grant and yet town councils were paying their way.

But when you get situations where the government is giving the town council

$100,000 and saying: pay back $70,000, and then they are paying another $630,000

on servicing the debt charges, it seems to me that they are getting a much

better deal than the eight or nine communities, say where I live, where for the

last four or five years we got $55,000 a year as an out-and-out grant. The town

picked up probably $730,000 while nine communities out in the rural area picked

up $55,000. Is that the kind of thing we were trying to get away from, we want

the towns to, say, pay a bit more than what they were paying?

AN HON. MEMBER: (Inaudible).

MR. GULLAGE: First of all we have the two types of

municipalities. We have the incorporated towns and cities and we have the local

service districts. Accessing the municipal grants programme and the debt

subsidies means you have to be in the incorporated category per se rather than

the committee. That is one thing.

But you are quite right, there are a lot of

disparities out there, depending on the location. In some areas it is not so bad

but we have not really found the solution to some of the disparities but we are

trying. Because a lot of those local service districts, as you know, are

basically very small numbers of people. The economies of scale are not there the

same as a larger community. We have to deal with them a little differently than

the communities, at least right now. There are some communities that will argue

that they get preferential treatment in the LSDs because they get their roads

paved by Highways, and you get that argument from the incorporated communities.

But I know what you are saying about the debt. In one

hand we are giving it out in grants, in the other hand we are taking it back on

the debt subsidy, and I guess it is the net difference you have to look at.

Well, what happened this year was -

MR. SHORT: But doesn't the loan - I guess what I

was getting at - turn into a grant?

MR. GULLAGE: Yes. In effect. You see, what we have

done now with the debt subsidy side of the grants - if you want to say, it is

really not, it is really a separate issue - but we shifted with the grants

programme a lot of dollars. Well, actually, the total shift almost was from the

urban areas to the rural, okay? That was mostly positive, the vast majority of

the communities in the rural areas were positively impacted. The exceptions were

those which had probably ridiculously low tax rates, and until they came up to a

reasonable level they could not get the positive impact. Some of them are

starting to move their taxes up to a reasonable rate now and they will kick in

and they will see a positive impact in years to come. But there was a positive

shift from urban to rural.

However, a lot of those same rural communities had

debt on the books in the financing corporation. Because for the first time in

many cases we were asking them to pay something towards that debt per household

- and we capped it at $300 a household - that negated the positive side on the

grants for many of them and we ended up in a negative position overall.

Now in dealing with capital works this year and in

future years we have to be very aware that if we have communities that have very

little fiscal capacity, very little going for them, in other words they are

poor, in the sense that they do not have a business base, an industrial base and

so on, and yet they still need water and sewer just to use an example, we may

end up, because they have reached the limit of the amount that they can pay per

household on their debt, the Province may end up paying for everything,

otherwise we have to say, you cannot have the services.

A lot of the rural communities will continue to get

servicing but it will have to be at the Government's expense, predominantly;

because they cannot handle any more debt than they have now. We have many in

that category, if they are not going to be 100 per cent subsidized by the

Province, which is a grant as you say, there is certainly going to be ninety or

eighty or seventy, depending on what capacity they have left per household.

MR. SHORT: And they are each making individual

cases?

MR. GULLAGE: We are looking at every one of them

as individual cases, we have to.

MR. SHORT: Okay, thank you.

MR. CHAIRMAN: Mr. Aylward.

MR. R. AYLWARD: Just a couple of questions as I

want to stay away from amalgamation for a few minutes.

The first year the Minister was made Minister of

Municipal and Provincial Affairs, he came in with a very good reform I thought;

I was rather pleased to hear the announcement that he was going to come in with

an early tendering system on the Municipal Capital Works Programmes, which

always was a big problem, we always had a big problem with it, and that solution

in itself would have been fairly simple.

What the construction companies are saying now is, by

the time the Budget is approved, the tenders are out, councils have awarded

contracts and plans are done; they are all doing water and sewer works in

October, November and December of the following year, obviously it is more

expensive to do that. You have a harder job getting the quality of work, but the

Minister did his pre-announcements for only one year, what is the problem since,

have you given up on that reform?

MR. GULLAGE: Well the first year we took

Government in April and as quickly as I could after Cabinet was formed in May, I

think it was only a week or two after we had - the previous Government had dealt

with it anyway, substantially, so it was just a matter of taking the

recommendations and dealing with them and bringing them forward, so we were

still though, up into May I must admit even in the first year.

The second year, you are right, I made that promise

and capital works were down in the fall prior to the calendar year itself. This

year, the problem we had was quite obvious I guess, is the Grants Programme.

We came in at the very tail end of the year, decided

to proceed, which meant we knew then that we were going to have problems after

the calendar year as of January 1, with phasing in a new grants programme and

with communities that - with the time frame we were caught with, we had to take

that into account.

The other thing I am just reminded of, is the fact,

and this is probably the most important point, that we had to see the impact of

the water and sewer debt subsidy changes as I just described and the fact that

for the first time, a lot of these communities that we had to assess for water

and sewer and roads, had to be looked at for this current year's capital works,

but we had to know how they were going to be impacted with the existing debt

that was on the books. That took us January, February and March essentially to

look at every community and see the impact of the grants and the impact of the

charges that we were assessing them for existing debt, otherwise we could not

properly deal with the capital works for this year.

I am glad we took that step because now we are able to

look at every community, we know how many dollars are faced off against existing

debt and we are able to judge the capacity to take on more debt and decide what

the percentage is going to be - provincial versus municipal contribution to new

municipal debt. But next year, hopefully now that we have things in place, I

hope we can get right back on track and get capital works announced early for

MR. R. AYLWARD: Would it not be reasonable to

assume that - you just said you wanted to wait to see what the impact of the new

capital debt structuring -

MR. GULLAGE: No, no. Existing Capital debt.

MR. R. AYLWARD: Yes, but would it not be

reasonable to assume that you looked at that before you brought in your grant

system, I mean you could have bankrupted the whole of every municipality in the

Province if there had been a wrong impact.

MR. GULLAGE: Well we had to do two things. We had

to phase in and see how the new grants programme was implemented in a given

town, and then on top of that we had the charges that they were expected to pay

on the existing debt.

MR. R. AYLWARD: Yes, but it is only reasonable to

assume that you should have known that before you brought it in. If you did not

know what impact it was going to have on the towns you could have bankrupted

them.

MR. GULLAGE: We could not know. We could only know

globally. We could not know about each individual town.

MR. CHAIRMAN: Order, please!

I am going to have to ask you to lean into your

microphones.

MR. GULLAGE: We could not know about each

individual town until we went out and we actually sat down and had the regional

offices sit down with each municipality and go into it in detail because we did

not have approval on the new grants programme until the very end of the year.

MR. R. AYLWARD: The new grants system as it

relates to amalgamation: I guess one of your main goals since you became

Minister was to see the amalgamation process through, and I believe that you had

a golden opportunity to get something positive done with that through your

grants system, yet you brought in a grants system that will have the

amalgamation system work completely opposite to the grant system. The bigger the

town gets now, the less grants, the less money, the more debt they are going to

have. So that is a disincentive, wouldn't you say, for amalgamation rather than

incentives?

MR. GULLAGE: No, because the main reason for

amalgamation is a planning reason per se. Now granted financial is important too

and probably would come second to planning and ties into planning to a large

degree, but I do not see the grant structure as being negative to amalgamation

by any means.

MR. R. AYLWARD: Well if two towns were operating

separately and they have a certain debt load now that they could afford and your

whole philosophy on the grant system was that the bigger towns pay more, so why

would they want to get any bigger?

MR. GULLAGE: The differential is not there as

great as you may think. The first component in the grant is the equalization

component, as we call it, and the second one speaks to incentives. But the

equalization component is only a part of the grants programme. There is more to

the ability of a town to be cost effective than the grants programme. You put

two, three or more towns together and the economy of scale of savings on

equipment, on staff and on duplication of services and buildings and so on is

the biggest savings of all, quite apart from the grants programme.

MR. R. AYLWARD: Only if they are not working

efficiently now. But you have so many roads to clear no matter if they are all

in the one town or if they are in three different towns. You have the same

mileage of road to clear of snow, the same amount of salt, the same amount of

ditches to dig.

MR. GULLAGE: Yes, that is true but there is a

great duplication. I could take you right now within a half hour drive of here

and show you four towns side by side and every one of them has a front end

loader to clear snow and they themselves admit that.

MR. R. AYLWARD: If that front end loader clearing

the snow is doing it as much as it can, all you are doing by amalgamating is -

all the roads are cleared fairly efficiently now so that ambulances and fire

trucks can get there. If you had one front end loader some of the roads, at

least half of them, would be only done half as efficiently.

MR. GULLAGE: You did not let me finish.

MR. R. AYLWARD: Well -

MR. GULLAGE: If you would let me finish, a lot of

these front end loaders -

MR. R. AYLWARD: If you have one front end loader

clearing five miles of road or you have four front end loaders clearing five

miles of road, obviously the five miles of road would be cleared faster with the

four front end loaders and more efficiently, and the fire trucks, ambulances and

emergency equipment could get around faster. That is the idea of clearing the

roads.

MR. GULLAGE: What I meant to finish with, if I

could, is that these councils are even saying to me that this is ridiculous. We

get our roads cleared in about a half a day and then it sits there unused where

a neighbouring community could be using the equipment. They themselves are

saying that it is ridiculous, the amount of duplication they have. I am talking

about a situation where there are four towns involved, and they openly admit

that they should be together. This is not me talking, this is them talking.

MR. R. AYLWARD: Well why aren't they together

then. It is their choice to go together.

MR. GULLAGE: They are going to be together.

MR. R. AYLWARD: Well that is their choice. They

should have been together long ago in that case.

MR. GULLAGE: Yes, they will be very soon.

MR. R. AYLWARD: This year because of the changing

grant system, obviously towns had a hard time getting their budgets prepared and

had a hard time getting used to the new system. Does the Minister have any idea

how many towns submitted at least a first or second time a deficit budget?

MR. GULLAGE: No, I do not, but maybe one of the

staff could help you with that.

SOME HON. MEMBERS: (Inaudible).

MR. R. AYLWARD: I know they were not accepted but

there were a lot of them sent in. I know four myself.

MR. PECKHAM: Yes, if I could address that, Mr.

Minister. Under the Municipalities Act of course towns must have a balanced

budget and some towns initially made a request that they be allowed to send in

deficit budgets, and these were all rejected. There was a small number of these.

There was not a great number from the whole Province that were sent in. I could

not give you a definite number but it would not be more than a handful.

MR. R. AYLWARD: Well, Conception Bay South, St.

Mary's, Stephenville and Port au Choix are probably four - I am not sure about

Port au Choix but I believe so - that had deficit budgets. The Department went

back and looked at last year's grants system under last year's figures and came

up always - for those three or four areas anyway, I believe - with money that

showed up on last year's budget which would balance this year's budget. Kind of

coincidental to me that this would happen.

MR. GULLAGE: (Inaudible) this never happened at

all. What happened was that each year every community has an audit done after

their year is over. The final audit results in adjustments to their grants,

either favourably or unfavourably. Many of these communities you speak of had

favourable adjustments in the previous grants - because we are talking about the

old grants system now obviously, in last year. These grants' adjustments - and

CBS is a good example - I think the figure, I stand to be corrected, was

something like $97,000 of an adjustment in their grants in their favour. So that

helped them balance their budget. But that is not unusual, that happens every

year. We always have an audited situation to finally correct whatever the

figures are going to be for the previous year. Sometimes that audited situation

results in a positive impact, sometimes it is negative. But we have had some

positive impacts this year that helped these communities balance their budgets.

MR. R. AYLWARD: And if it is a negative impact

their budget is sent back to them in the middle of the year to try to rectify

it?

MR. GULLAGE: Well, if it was a negative impact

obviously we have a bigger problem than we had if, assuming it was negative,

they had trouble balancing (Inaudible).

MR. R. AYLWARD: No, I mean a budget that was

balanced in January when it was sent in showed up after the audit in - I think

you will find some of these in February and March - showed to be negative. Does

that budget go back to them then so they have to balance it for the rest of the

year?

MR. GULLAGE: No. Once we have a balanced budget

starting out the year, if we then had an adjustment as a result of the audit we

would have to work with them throughout the year. Hopefully, by the time the

year is over, we have made whatever correction needs to be made. But we only

require the budget to be balanced once when we start out the year, and then we

work with them throughout the year. We could end up with a deficit or a surplus

at the end of the upcoming year, we just do not know.

MR. R. AYLWARD: One final short question, Mr.

Chairman.

MR. CHAIRMAN: Order, please! Order, please!

I would like to remind Mr. Aylward that his time is up

and I do not want to start doing that. I do not want to set a precedent.

AN HON. MEMBER: (Inaudible).

MR. AYLWARD: It might not be a short answer, but

it will be a short question. If the Minister does not have the time to answer it

he does not. Looking at last year's salary details compared to this year's

salary details, there were sixty-three people or positions shorter - you know,

less - in the Department this year than last year. It seems like an inordinate

number of them came from the Fire Hall. Over 50 per cent of them, thirty-five

positions, were eliminated from the Fire Hall. Now overall the Department shows

a 10 per cent reduction as was stated. But do you not think it is kind of unfair

that one division of your Department would suffer 50 per cent of the losses in

positions rather than have it spread over most of the 557?

MR. GULLAGE: (Inaudible) a lot of those are part

time, aren't they?

AN HON. MEMBER: (Inaudible).

MR. R. AYLWARD: These are all permanent employees,

not part time ones. Sixty-three difference in your figures and there are

thirty-five positions less in the Fire Department. So over 50 per cent of them

came out of one of your divisions,

whereas if they had been spread out a bit

more it would have been -

MR. GULLAGE: Of course as everybody knows, for

some time now we have been dealing with the fire department. We have been

managing the fire department directly from the Department with the Assistant

Deputy Minister having the role of Fire Chief per se along with his other

duties, and we have been trying to have a more efficient effective fire

department, so we have made management changes over the last couple of years.

We believe we have a good fire fighting service. The

numbers of firemen per shift is as good or better than any other city of this

comparable size because we have checked. The down-sizing, if you want to call

that over the last couple of years and that is really where those figures came

from the last few years, is as a result of good management and we have been

asked to manage it more effectively by the people who are paying for it, St.

John's, Mount Pearl, Wedgewood Park, Portugal Cove, St. Phillips, Paradise, I

mean we really are answering to them because they pay for the fire department.

MR. R. AYLWARD: Yes, I do not disagree with that,

but I find that in your cutbacks, if that management would have happened, the

thirty-five people would have been short because of proper management, well that

should have been done, so obviously you only took 50 per cent of the cutbacks

that your Government planned if that is not the case, these were going anyway.

If this was good management, and those thirty-five positions were going, that is

what you just told me, then the rest of your Department only took a 5 per cent

cutback rather than 10 per cent as your Government said they took.

MR. GULLAGE: I will have to check the percentages.

I do not know off the top of my head. I will have to check the number of

employees and do the calculations.

MR. CHAIRMAN: Mr. Walsh.

MR. WALSH: Thank you, Mr. Chairman. I would like

an opportunity to deal with some of the actual estimates, and in particular I

want to take a quick look at Historic Sites, Page 251, 6.3.01.

In the professional services that are allocated under

the estimates, it is without a doubt more than just a marked increase; we are

looking at something in the neighbourhood of $34,000 being spent last year and

$1,065 being planned for this year, page 251, 6.3.01, and in particular

6.3.01,05.

MR. GULLAGE: Yes, that is the Federal/Provincial

Tourism Agreement of course, and the money that you are identifying for

professional services is covered off by that joint agreement and you know we do

not always have an agreement kick in as we did at this particular time.

MR. WALSH: What in particular, have you ear-marked

those funds for under that agreement? What has that particular grouping been

ear-marked for?

MR. GULLAGE: Well, the bulk of it is involved in

the archaeological surveys that are being done in several areas of the Province,

we are involved in Red Bay of course and we are on the south coast as well doing

archaeological surveys, I think those are the main areas.

MR. WALSH: Would that tie in also -

MR. GULLAGE: The staff involved there are

identified of course as you can see, researchers and photographers and so on.

MR. WALSH: Would that tie in also with the

purchase services that are there, the $210,000 that is being budgeted compared

to $51,000 last year, that is a marked increased, are they tied together as

well?

MR. GULLAGE: Yes, that is the reason. It is

strictly faced off against the agreement; ordinarily, we would not have that, we

would have a budget in the vicinity of $50,000 or $60,000.

MR. WALSH: In the same particular category,

6.3.01, 10, we look at grants and subsidies going from $72,000 last year to

$397,000 this year, where would those grants and subsidies be allocated again?

MR. GULLAGE: Yes. That is mainly Dr. Tuck's work

at Red Bay. We are about to, hopefully, finalize the site as an international

site, recognized as such. We will then hopefully have a very comprehensive

agreement where some millions of dollars will be spent with putting the museum

on the site and so on. So we are now at that stage where Dr. Tuck's work in

itself is substantially complete and moving into the next phase would be

actually rebuilding the site with buildings and facilities and so on.

MR. WALSH: How many international sites? If Red

Bay is given international designation, how many would that give us in

Newfoundland?

MR. GULLAGE: Well, L'Anse-au-Meadows, of course.

How many others do we have? Do you have the numbers there?

AN HON. MEMBER: Gros Morne (Inaudible).

MR. GULLAGE: Gros Morne, of course, has

international recognition. So I guess that would be the third.

MR. WALSH: So in that particular corridor then you

would have virtually three international sites?

MR. GULLAGE: Yes, three international. Bonavista,

I am not sure of the status there. It is recognized but whether it is

international I can not tell off the top.

AN HON. MEMBER: (Inaudible).

MR. GULLAGE: No, Bonavista is not. Okay. So we

have three international, if we get Red Bay recognized.

MR. WALSH: The Federal Government obviously has

played quite a

part in that particular development. In terms of Red Bay and what

you are hoping to do down there, do you anticipate that Federal commitment can

be ongoing to - you are talking about developing facilities and - ?

MR. GULLAGE: Yes. If I recollect - I haven't got

it in my notes here - it is a five to seven year agreement with commitments to

put the necessary buildings on site. A museum would be the prime building. But

certainly an

interpretation centre. I think it is a five to seven year

agreement, if I recollect.

MR. WALSH: Will that international designation

come prior to those facilities being finished or is that part and parcel? The

commitment (Inaudible).

MR. GULLAGE: My understanding is we will know

before we sign the agreement. But I do not think - because the dollars depend to

some degree on that designation, how much work gets done and whatever.

MR. WALSH: As with the other international

designations, will that also permit in that area, on-site development in terms

of motel facilities and the like?

MR. GULLAGE: Yes. Which comes with a different

section of the agreement, though, and it ties in a lot to development of

tourism. It is a joint agreement on that side. What I am speaking about as far

as the development of the site is concerned is really more tied into the history

of it and the archaeology and so on, and ties in more directly to my Department.

But when the site is substantially complete the promotion of it has to kick in

and that is more in the tourism area.

MR. WALSH: In that particular area again, what

consideration has the Department given to an infrastructure in terms of water

and sewer facilities? Will they be looking at going with wells or artesian

wells? Or are there plans or proposals to put an infrastructure in there to meet

the expanded status of that community? Or am I jumping into numbers that may be

yet to come?

SOME HON. MEMBERS: (Inaudible).

MR. GULLAGE: There is an agreement that is called

the Southern Labrador Agreement, and the Development Coastal Agreement, and part

of that agreement is provision of water and sewer. So it is a separate item but

it is covered off and as I have been reminded most of it is already done.

MR. WALSH: Unlike Gros Morne, which is pretty well

under virtually Federal control, would we see the exact same thing happen in the

Red Bay area?

MR. GULLAGE: Yes, that is one of the conditions

really of recognition and of getting funding, the fact that you have to let the

Federal Government develop the site under their guidelines and their auspices.

The communities are another story; they do not have any say in the running of

the community per se and the community plays a part, but the general thrust of

what is happening there has to be under their control because of the recognition

that they give it and the funding they give it; so that is a pre-condition, you

have to pretty well relinquish most of the control to their jurisdiction and

their expertise.

MR. WALSH: That is all for now, Mr. Chairman; I

have a few other questions in some other areas afterwards but that pretty well

takes my time so -

MR. CHAIRMAN: Mr. Tobin.

MR. TOBIN: Thank you, Mr. Chairman.

I listened with interest to Mr.Peckham's comments

regarding the debts of councils, where, under the Municipalities Act it is

forbidden to have submitted that as a budget.

I would like to ask the Minister then, how does he

handle budgets, balanced budgets that have been submitted, but due to measures

taken after by Government, such as increasing the industrial water supply, the

decrease in the subsidy programme for arenas, the electrical subsidy programme

to the tune of $50,000, that eliminates a balanced budget and makes it a deficit

budget, what do you do with that?

MR. GULLAGE: We have to work with the communities

throughout the year of course; you are using some examples of impacts and I

could give you many more that throughout the year you run into; emergencies,

flooding, whatever. We have to work with the communities and amend their

budgets, change their budgets, help them in whatever way we can.

It was unfortunate that we did see a drop in the urban

areas in the facilities programme. Where it was previously $15,000 in the urban

areas - the larger areas if you like - and $10,000 in rural, we made it ten

across the board. But those affected were in the urban areas and we would have

hoped a little better off and able to absorb that $5,000 cut; there was a $5,000

cut, you are quite right, but we do work very closely obviously with the

municipalities and all sorts of emergencies arise throughout the year including

the situation like this.

You mentioned industrial water: that is another area

where we simply had to identify - well we did identify a problem in the budget

having to come up with dollars and there was an area where we felt the

municipalities could pay a little more, it had not been adjusted for some time

and if the communities were adversely affected where they could not handle it,

we obviously, like we do throughout the year in all sorts of instances, had to

work with them.

MR. TOBIN: But, Mr. Minister, in this case it

would not be a balanced budget; they submitted their balanced budgets and after

their budgets were submitted to your Department - and I speak again of the

Marystown Town Council - the Marystown Town Council, because of the actions

after their budget was submitted, to increase the water subsidy costing an

additional $45,000, and then they lost $5,000 as a result of the cuts to the

arena subsidy programme, a total of $50,000, what happens in that case, what

happens to their budget, you mean it is either accepting a deficit budget or it

is not?

MR. GULLAGE: Well they will have to adjust their

budget. I thought I said that a moment ago. They would have to adjust and

rewrite their budget to accommodate the increased loss of dollars.

MR. TOBIN: I think I know where you are coming

from now; your department had notified the Marystown Town Council of this

$50,000 in question, so they have to change their budget in order to come up

with this. Now I understand that there is something in the Municipalities Act

that says that after the 31st of March, you cannot increase taxes, is that

correct?

MR. GULLAGE: That is correct.

MR. TOBIN: Well if they have to adjust their

budget and they cannot increase taxes and they have nothing else to cut, what

happens to the council in that case?

MR. GULLAGE: Well, they can increase rates other

than taxes, water rates for example, they can cut expenses. Again, this is what

I am telling you, we work with them to get them through the year and make those

adjustments.

MR. TOBIN: Yes. I have met with them and they tell

me they have nothing they can cut; they cannot raise taxes because they have

taxed to their limit, they have accepted it, they did it all in good faith and

it was after the fact that the Government made the decision to bring in these

measures which cost them $50,000 and they cannot balance their budget; so, is

there any way that your Government could put a grant in place to deal with that?

MR. GULLAGE: Well they knew of course in advance

because they were notified before the deadline that these adjustments were

coming.

MR. TOBIN: No, they were not, they were not.

MR. GULLAGE: Before the 1st of April they were,

that is what I am told.

MR. TOBIN: Well that is not what I was told. When

was the MC effected on the industrial waters? As a matter of fact, Mr. Minister,

not only the industrial water supply, the Marystown Town Council as of last

Thursday were not even notified of the changes in the electrical subsidy

programme.

Last Wednesday, when I met with the Marystown Town

Council, they had not been informed through letter or any other way that there

were going to be changes to that electrical subsidy programme, the council told

me that. I had information which I shared with them because some other councils

had been notified of it and they had that information, but as of last Wednesday,

the Marystown Town Council was not notified officially in any way by your

Department, that they were put in place, so what is the answer in that case?

MR. GULLAGE: I do not know. If they were not

notified that is unusual because my understanding is that all the communities

knew about it. You mentioned water rates for example; I mean, they have the

authority to increase that even now, if that is a problem, industrial water

rates, they have the authority to increase those rates.

But I cannot isolate one community, I would have to go

back and check if they were notified or not. I have been told that they were

told in time to make the adjustments to their budgets and you know, in the water

rates, they have the authority to make those changes themselves; it has no

impact at all on taxes (inaudible).

MR. TOBIN: The information that I have is that

they were not told before their budget was submitted.

MR. GULLAGE: Well, I can only say that I have been

advised otherwise.

MR. TOBIN: Well, I have no reason to disbelieve

what you are saying, so what you are saying is that Marystown Town Council was

notified of the $35,000 in industrial water -

MR. GULLAGE: Unless somebody slipped up; I have

been told that communities knew about this adjustment, knew that it was coming.

MR. TOBIN: I just want to get it straight that

what you are saying is that Marystown Town Council was notified of the increases

that would amount to $45,000 in their case as it relates to the industrial water

supply before their budget was submitted to your Department for approval.

MR. GULLAGE: That has no impact on the budget per

se in terms of being able to increase rates, because they can increase those

rates anyway.

MR. TOBIN: No, I am talking about before their

budget was submitted to you for approval.

MR. GULLAGE: Oh, in the first three months of the

year you mean?

MR. TOBIN: yes.

MR. GULLAGE: Well that would not be an item in the

budget; you can adjust those rates anytime.

MR. TOBIN: No. What I am asking you is: under the

local Government Act, the Municipalities Act, the council has to submit their

budget to you for approval. I have been told that after that process was

completed by the Marystown Town Council in terms of completing their budget and

submitting it to you for approval, they had not been notified up to that period

in time of the additional $45,000 cost.

MR. GULLAGE: You can change the tax structure

anyway by the 31st of March, per se; but these rates can be applied by the

municipality after the budget (inaudible).

MR. TOBIN: Your are still not answering my

question, Mr. Minister. I am asking you, were they or were they not, notified

prior to the -

MR. GULLAGE: You are losing me. Do you want to try

to answer that Art, because maybe, you could follow his line on the budget per

se, but I do not know where you are coming from.

MR. COLBOURNE: A municipality can change its tax

rates until the 31st of March, even if the budget is in effect, then it would

send in a revised budget. With respect to the industrial water rates,

municipalities were notified prior to the first of April, that effective the

first of April, industrial water rates would be changed.

MR. TOBIN: When were they notify?

MR. COLBOURNE: They were notified in writing by

the Department.

MR. TOBIN: I beg your pardon?

MR. COLBOURNE: They were notified in writing -

MR. TOBIN: When?

MR. COLBOURNE: - by the Department prior to the

first of April.

MR. TOBIN: When did they have to have their budget

in to you for approval?

MR. COLBOURNE: I beg your pardon?

MR. TOBIN: When did they have to have their budget

into you for approval?

MR. COLBOURNE: Budget is due in December, but the

budget can be changed -

MR. TOBIN: I know that.

MR. COLBOURNE: - and taxes can be changed until

then and a revised budget can be put into effect if there is a major adjustment.

MR. TOBIN: Is it a common practise for Government

to make these changes after the beginning of the calendar year?

MR. COLBOURNE: Well in this particular case it

just happened that the Government's year was the first of April and the

municipal one was January 1st.

MR. TOBIN: But isn't it a common practice for

councils to be notified after a budget is submitted of these changes?

MR. COLBOURNE: It has happened before. I think

somewhat similar to other adjustments which are made other than Government.

MR. TOBIN: So you are saying it is a common

practice?

MR. COLBOURNE: No, I am not saying it is a common

practice, but I would say that it has happened before.

MR. TOBIN: Would you say that it is poor timing on

the part of the Department of Municipal Affairs?

MR. COLBOURNE: I would not comment on that one.

MR. TOBIN: Probably the Minister would care to

comment on it if none of his officials will.

MR. GULLAGE: I will comment on it, sure. Nobody

liked the timing of the fiscal restraints that we had to put in this year, and

nobody could have planned it, I would suggest. So to say that we do not

recognize the poor timing of it, I mean obviously we would have rather not make

these adjustments in these budgets, but from time to time it happens. To suggest

it has never happened, I mean I am sure adjustments have been made in that three

month time frame with previous Governments. I cannot image that budgets were

simply unaltered in previous years in history. I cannot imagine that to be the

case. There had to be times when government for whatever reason, whether it be

fiscal restraint or some other reason, made changes that caused changes in

municipal budgets. You have to work and make those adjustments as you go along.

MR. TOBIN: Well then, can you tell me, Mr.

Chairman -

MR. CHAIRMAN: Order, please!

I will allow you to ask that question, Mr. Tobin, then

I would remind you that your time is up. When you have asked your question and

the Minister has answered we will take a ten minute recess for coffee and we

will meet back here again.

MR. TOBIN: Thank you very much. Okay, my question

to the Minister is: is that adjustment in the industrial water supply included

in this year's estimates, 1991?

MR. GULLAGE: Yes.

MR. TOBIN: It is included in that? Thank you.

MR. CHAIRMAN: We will recess for ten minutes. We

will meet back here at approximately twenty minutes before the hour of 9:00 p.m.

Recess

MR. CHAIRMAN: Order, please!

We will continue with our meeting and I will turn it

over for questioning to Mr. Ramsay.

MR. RAMSAY: I do not really have anything. If

either of the Opposition Members would care to have my time for questioning they

can have it.

MR. CHAIRMAN: Thank you, Mr. Ramsay. Mr. Aylward.

MR. R. AYLWARD: I have just a couple of quick

questions. I remember before the forty days and forty nights that I spent in the

Department, I was fasting the whole time, I loved every minute of it I must say.

When I was in the Department there was always this fund there that was very

convenient to help out emergency situations. I think it is a Special Assistance

fund of $1.6 million, on 3.2.02, Special Assistance. Last year there was $1.5

million plus change spent on that. Can the Minister give us some idea of what

types of assistance were given with that $1.5 million and to whom it might have

been given?

MR. CHAIRMAN: For the benefit of the officials

that is on page 242, subhead 3.2.02.

MR. R. AYLWARD: While they are looking for that

the Minister might just make a comment -

AN HON. MEMBER: (Inaudible).

MR. R. AYLWARD: Okay, go ahead.

MR. GULLAGE: Well, it is a variety of things.

Everything from emergency road repairs, cost of operation of a sewage treatment

plant, general municipal purposes, engineering service for a bridge crossing of

a water line, operating deficit, repairs to the water system, audit fees,

general operating purposes, water line project. Almost everything you can name.

MR. R. AYLWARD: Could the Minister table a copy of

that list tomorrow or the next day, if he would? Whenever he gets a chance to

get a copy of it.

MR. GULLAGE: Yes, I do not think there is - we can

table that, can't we?

AN HON. MEMBER: (Inaudible).

MR. GULLAGE: Yes.

MR. R. AYLWARD: The planning was just about

started for some type of celebration for the anniversary of John Cabot's 500 th

arrival here, planning has to be started now I believe for -

MR. GULLAGE: Yes, we have started.

MR. R. AYLWARD: And we have some money in this

Budget to do some work on that, continue with it?

MR. GULLAGE: I am trying to recollect now. Are we

budgeted for Cabot in our Budget?

MR. R. AYLWARD: I forget the name of the

celebration.

SOME HON. MEMBERS: (Inaudible).

MR. GULLAGE: We have a small fund that is faced

off against anniversaries per se, because we also have some others that we are

dealing with too. But as to a specific allocation for that, I am not sure.

AN HON. MEMBER: (Inaudible).

MR. GULLAGE: Yes. I think as it sits right now we

would probably have to find it under another subhead. We only have a small

amount for travel and supplies.

MR. R. AYLWARD: The only concern I have with it,

and I am sure the Minister is aware of this, is that there is also - I mean,

everyone knows that Cape Breton or somewhere else claims that Cabot happened to

land there and not in Newfoundland - there is some concern that that other area

might plan the same type of celebration, or might take over this celebration,

and we might be left out if we do not get ahead of the game.

I know that the Lord Mayor or someone was over here at

one time several years ago. I just suggest to the Minister that it certainly

would be very beneficial for us to get ahead of the game on it and continue our

planning. Those are all the questions I have.

MR. GULLAGE: Just to answer that question a little

more. I believe we are on top of it in the sense that we have an anniversaries'

committee - one of our Deputy Ministers is faced off against that responsibility

now, Bob Jenkins. So we have the internal planning well under way. We are in the

process of setting up an external committee to run the anniversary,

Province-wide. So that is in process. We have been talking to Bristol as well.

That fear that you expressed has been expressed by others. I do not think that

is a real problem, but obviously the further along and the more detail we get

going and the more it is obvious that it is our anniversary the better it is. So

I think you will see things pick up significantly now in the months ahead.

MR. R. AYLWARD: Mr. Chairman, I move that all

subheads between subhead 1.1.01 -

MR. CHAIRMAN: I think Mr. Tobin has a question

first, Mr. Aylward.

MR. TOBIN: Mr. Chairman, indeed I do have a

question. I have a question for the Minister. First of all, will there be a

capital works budget this year for water and sewer, roads, fire protection, for

the local services (Inaudible)?

MR. GULLAGE: Will there be?

MR. TOBIN: Yes.

MR. GULLAGE: Well, assuming the Government wishes

to proceed with the programme. I will certainly be making a recommendation for

those four that you mentioned, those four areas of capital works, yes, and -

MR. TOBIN: Do you anticipate that it will be

brought down and announced before the first of June?

MR. GULLAGE: Yes. Well, I qualify that, in the

case of local service districts, assuming the budget is finalized. But regular

capital works for the cities and towns, water and sewer and roads, I should have

very soon.

MR. TOBIN: Do you know if there is anything there

for me?

SOME HON. MEMBERS: (Inaudible).

MR. R. AYLWARD: (Inaudible) not after tonight

there is not.

MR. GULLAGE: There was.

MR. CHAIRMAN: Mr. Aylward.

MR. R. AYLWARD: Just one more quick one, Mr.

Minister. I forgot that Communications came under your Department also. On page

254, the page on Communications, under grants and subsidies, 7.1.01.10, there is

$52,000. Can this money be used for (Inaudible) a small community like Blackhead

out towards Cape Spear, who have been trying desperately to get the cable

television extended out to their area. But obviously the cable company will not

extend it because there is not enough revenue to cover the cost of construction

to get it out there. Is it possible that this money could be used to help them

pay part of that cost?

MR. GULLAGE: Presently we do not have a programme

to cover that off, and I am advised we used to have a programme in that

particular case. The grants and subsidies programme right now is just really

covering the operation of some radio stations, weather stations and locations

like that. We do not have any subsidy per se for cable. It used to be there and

it is now eliminated.

MR. R. AYLWARD: Could you put back $20,000 for one

year? I am through, sir.

On motion, subheads 1.1.01 through 7.1.01, carried.

On motion, Department of Municipal and Provincial

Affairs, total heads, carried.

MR. CHAIRMAN: I announce that we have now approved

the estimates for the Department of Municipal and Provincial Affairs, and at the

previous meeting we approved the estimates of the Department responsible for

Newfoundland and Labrador Housing Corporation. So we have now approved all of

the estimates for the Departments under the responsibility of the hon. Eric

Gullage.

I would like to thank the Minister and his officials

for coming back for the second evening. I would like to thank Mr. Aylward who

has been my Vice-Chairman for the last five meetings, and of course our

Committee Members. I would particularly like to thank everybody for the manner

in which the questions have been asked, and of course the manner in which the

answers have been given as well. I would like to thank Elizabeth Murphy, the

Clerk of our Committee -

MR. R. AYLWARD: Don't thank Tobin (Inaudible).

MR. CHAIRMAN: - our Page, Paula; Mr. John Oates,

who has been manning the Hansard equipment; and I was about to thank the lady

who was here from The Evening Telegram, Ms. Cullin, but I believe she has just

left us.

Our Vice-Chairman says we should thank everybody

except Mr. Tobin, but I will include a thank you to Mr. Tobin as well.

The Committee now stands adjourned.