Volume XLI Friday Province of Newfoundland . FORTY- FIRST GENERAL ASSEMBLY OF NEWFOUNDLAND Second Session VERBATIM REPORT (Hansard} Speaker: Honourable Thomas Lush [Preliminary Transcript] Number 37 18 May 1990

The House met at 9:00a.m . Mr. Speaker (Lush): Ordl':~ln, pl€~ase! Statements by Ministers Mr. Speaker: The hon . the President of Treasury Board Mr. Baker: Thank you, Mr. Speaker . Today I IAJish to advise this House that the Cabinet Committee established by Government to r.eview its decision o.n various Labrador Atr Subsidy Programs has finalized its report and Government has accepted the recommendations of the Committee. The Labrador ·rravel Subsidy operated by the Depar·tment of Municipal and Provincial Affairs will remain intact.

Funding has thus been re-instated with no reduction in the level of subsidy provided. The Air Passenger Subsidy Program operated by the Department of Works, Services and Transportation, will, however, be eliminated as originally announced. Some Hon. Membe~~: Hear, hear! Mr. Speaker: for ME!nihek. The han. the Member Mr. A. Snow: I want to thank thr:~ Minister For giving me the copy of his terse Ministerial Statement prior to his announcement. It is unfortunate that it took six weeks for this special Cabin€~t Comrnitl:ee to come up with such a silly~ silly announcement. An Hon. Member: Oh, oh! . Mr. A.

Snow : May bE! Lhe han . Ll May 18, 1.990 Vol XLI Member for Exploits is funny, but I can people in Labrador this is funny. can think this tell you 6,000 do not think Mr. Speaker: OrciE!r, pleas€~ . Order, please! The Chair wants to remind han. Members that the Chair will decide when the time is up for han. Members when Lhey are speaking, and wtll decide it in all areas where the speaker has that jurisdiction. I would say with respect to Minister±al Statements, that the Speaker has leeway in deciding the time. I ask the han. thE:~ MHinbE!r For· Menihek to continue. Mr. A. Snow: Thank you, Mr . SpE!aker .

Six thousand people in Labrador applied for this particular program, for this subsidy under this program last year. Those people do not think it ·.is Funny, and ·t:hey did not E!XpE•cl.: this particular announcement at Lhis particular t.ime. l'hey expected this Government, which was supposed to give good Gov.:H'I'II'IlE!nt, t..uas gotng to comf• to their aiel. Ins·~E!acl of that·:, what did they get?

They got t:his Government coming and taking $LWO,OOO out of the pockE!tS of lhe people in Labinadoin and putl::inq i.t. in their pockets, here on LhB Island portion o-F the Pr·ov:ince, in a method of a car allowance For the:~ Minis tE!rs to drive around tot.~.Jn in. It is utterly ridiculous! Some Han. Members: Hear, hear! Mr. Speaker: Order, please! No. 3 '7 R:L

Oral Questions Mr. Speaker: The hon . the Leader of the Opposition . Mr. Rideout: Thank you ver·y much, Mr. Speaker. The Premier in his statement to the House, I think it was a week ago today, May 11, confirmed that Building a Viable Future, this option to address the crisis in the Newfoundland fis~1ery we have talked about in the House a number of times, was a document which had been reviewed by the Provinc:i.al Government, and tAiith some changes, to reflect the vietAJS of the Provincial Government, I think is exactly what his statement said, and that it became a Fede~al/Provincial working document.

Can the Premier tell the House whether or not this Building a Viable Future, this Federal/Provincial working document he referred to in his statement, was the basis on which the Provincial and Federal Governments began to negotiate the contents of a Memorandum of Understanding that would lead to both governments addressing the crisis pending then, and still pending in the Newfoundland fishery? Mr . Speaker: The hon. the Premier . Premier Wells: Ml".

Speaker, my recollection of what I said in the House, and the infoJ"mation I gave, was that the Federal Government originally set forth some proposals in a document called Structural Adjustment, and their proposals were not acceptable to the Province; they were talking about taking people out 6f the fishery, and so on.

We advised thE:'m that this tAJas not acceptable to us, that the approach had to be:' to provide for alternative L2 May 18, 1990 Vol XLI economic employment opportunitiE:~s for our people, and a variation of that found its way into the document called Buil.ding a Viablr:' Future, which, I be1ieve, came about Following discussions between the Federal and Provinc:i.al Task Forces. So that is how the document came about, Viable Fisheries. Then, subsequent to that, UwrE! were discussions.

I could check, but I do not know of my own personal knotAJledge al this mornE!nt that Building ..a ViablE• Future t.uas the foundation for thr:~ discussion of the MOU. My inclination at this mOITIE!nt is that.: it. IAJaS not, because that was done in the fall, in November, and bet.tAIGE!n Novernbc:1r and the tirnr:' we discussed ·Uw details of the Memorandt.lln of Understanding, the National Se:'a plant had closed and the three fPI plants had closed. The Memorandum of Understanding really came out of a mE!et-:in~~ between thr:1 Hon.

John CrosbiE• and myself, in which I put Forward three proposals which ought l·:o be::! contained in the Memorandum of Understanding : One, to dE!al tJ..J:it .h the immediate impact on the communities and the people concerned of the closure oF these plants; thE! SE!COnd aspE!Ct of it. was l:o put· funds and rE~sour'ces in place to build a viable fishery to sustain our fishery For the future; and the third elE!I'nent tJ..Ic:\S economic diversification to relieve the pressure on the fishery. That is uJhat l:he Memorandum of Understanding came out of, not out of that documc:•nt itself.

Now whf:'ther that docutTif:'nt was referred to in discussing it with the Task Forces or not., I do not know. Mr. Speake :..r: The hon. thE! Leader No . 37 R2

of the Opposition . Mr. Rideout: A supp1r:Hnentai"Y, Mr. SpeakE!I". Ml". SpE:~akr:~r. it. is the Federal/Provincial negotiations betWE!en thE! two Task Force groups that I am referring to. But let me ask the Premier this, Mr. Speaker. The PrE:~mier told the House previously that negotiations tAJith the Fed(~'ral Government broke off, to use his words, around the c::~nd of February. Can the Pl"emier confirm that was the case? Mr.

Speaker: The han. the Premier. '"~ Premier Wells: 8rokE:~ off i·s too hard a l.o.Jord, and it does not really reflect what happened. rhat makes it sound as though both parties agl"eed not to discuss. What happened is the Federal officials just sort of faciE:~d out or were going through it in a perfunctory way. So between the last few days of February and the fir·st week of March, this is what happened. The last meeting with the Federal and Provincial Task Forces on the issue, if my recollection serves me correctly, tAJas about the 7th of Mar·ch.

There lAJere sti11 discussions, so it would be wrong to say discussions broke off. The advice I have from the Task Force is that nothing really effective was done after the end of February. The last meeting tAJas the 7th of March and that was not vei"Y productive; it was clear the Federal officials were not going to be co-operative. Mr. Speaker: The hon. the Leader of the Opposition. Mr. Rideout : Thank you, Mr. Speaker. Mr. Speaker, can the Premier confirm that negotiations between the Federal and Provincial officials continued well into March?

Can he confirm that a L3 May 18, 1990 Vol XLI draft Memorandum of Understanding was, in fact, agreed to by the officials of l~he t:t.o.Jo sicl~~s basod on the Building a Viablr:' Fishei"Y option, and that dr·aft ME:~mor·andum of Understanding includc-:!cl fE!l.o.JE'I" fisher·men, fewer fish plants, and fewer fish plant workers? Can the Premier confirm that, Mr. Speaker? Mr. SpeakE:~r: The hon. the Prl:H·niE!I". Premier We~ls : No, Mr. Sp1~ake1", I cannot confirm that the negotiations continued well into March.

I tAJas not. at thE:! meE·tings of officials, but I t.o.Ji11 find out and I will report back to the House. I am told the last meeting was the 7th of Mal"ch. But H. that is incorrect, I do not lAJant. to give· the House inaccurate information. I lAJi11 check it and make SUI"E!. ThE:' discussions lAJE! lAJBI"E! hav.i.n~J, Ol" putting forward, contemplated an Economic Diversification Pro~JI"arn which would provide for alternative employment opportunities, and so have Lhe effect of reducing th~:! nurnbE•I" of people who tAJould have l·:o look to the fishery fol" ernploymEH1l:.

I have no doubt the Memorandum of Und(-:!l"standing con l~.E!rnp1atE!cl t.ha l:., yes. Mr. Speaker: Before recognizing thE:~ hon. thE:~ Mernbel" fol" Gl"and Bank, I lAJou1d like, on bE!halF of hon. MembeJ"S, to lAJE~lcornE! students to l~he gallei"Y. I do l~his, because many tirnE:~s they leave after Ques t.ion Period, and arE:~ out in the hallway. So I apologize to l~he han. the Member For Gi"and Bank, but l.o.Je t.o.Ji11 gE!t to rE:!cognize him shortly. On beha1f of han. MembE!rs, I lAJould like to E:~xt.E!nd a corclia1 lAJE•J.corne to sixty studenl:s fi"OIIl the No . 3 'I r~ 3

democracy class of Ascension Collegiate High School, Bay Roberts, in the District of Port de Grave, accompanied by their teachers, Mr. Ed Neil and Mr. Claude Taylor. Some Han. Members: Hear, hear! Mr. Speaker: The han. the Member for Grand Bank . Mr. Matthews: Thank you, Mr . Speaker. I am more than glad anytime to permit an opportunity to welcome students to the gallery. My quest.'fOI"I this morning, Mr. Speaker, is to the Minister of Fisheries.

In light of the AGAC meetings, the Atlantic Groundfish Advisory Council meetings, this past week, there u..Jere some interesting observations which came . out of those most particular meetings, where it is reported that the northern cod stock has remained consistent or stable over the past couple of years, at 900,000 metric tons, and it was once again no surprise that the estimates were off . Then another revelation coming out of the meetings was we should see some significant improvements in northern cod stock size by 1992 because of the better shape of the 1986 ··-87 class -year fish.

I am wondering if the Minister of Fisheries 1 officials have done an analysis and an ass(:~ssment of thE! AGAC meetings, and what the impressions of the Department of Fisheries are on ·l:hose particular observations? Mr . Speaker: The Minister of Fisheries . han . the Mr. Carter: Mr. Speaker, my officials are in the process of doing that now. The meeting was held, I believe, on Monday or L4 May 18, 1990 Vol XLI Tuesday. Since then, my Deputy and my Assistant Deputy Minister had to go to the mainland to d~scuss another matter, but I know that an assessment is now being prepared for me on that. Mr.

Speaker: The han. the Member for Grand Bank. Mr. Matthews: Thank you, Mr . Speaker.

If, in fact, these statistics or this analy sis is correct, and, of course, we altAJ ays have to be sort of dubious about that, watching what has happened over the past number of y(:~ars, but if the stock has rt:~ma:lnE!d st.ab1E! for th(:~ last couple of yE:!ar s at around 900,000 metric tons, and if indeed we are going to see a significant improvement by 1992, does the MinistE!r not consicle1n this a reason to change the Provincial Government 1 s attitude and plan for the Fishery in Newfoundland and Labrador, that, indeed, it is incumbent upon the Government to bring in measures to keep people in their communi ties, to keep people in thf.:~ industries for another couple of yea1ns, unt-.il things could turn around and become a bit better?

Mr. Speaker: The Minister of Fisheries . hon . thE! Mr. Carter: Mr . SpeakE!ln, I wtll be better able to pnJvidE~ an answer to the House on that question once I am Lhoroughly briefed by my officials on the AGAC meeting. There is an old saying I think, that onE:' su..Ja1.lotAJ does not a summer make. Certainly the advice of one set of offici als at a meeting, one meeting, is hardly cause to start to r'E!Varnp our tAJhole strategy Fo1n bui lding a viable fishery. But, CE!l"ta inly, I will supply the answer next week . No . 37 R4

Mr. Speaker: The hon. the Member for Grand Bank. Mr. Matthews : Thank you, Mr. Speaker. I have a supplementary for the Minister of Employment and Labour Relations, and it is related to her tabling of her agreements yesterday for the adj ustmen·t program, the fish plant workers agreement between Fishery Products International and the Government of Newfoundland and Labrador, and I refer to clause 7: 'Payments to be made by Newfoundland to the.

Company.' Here it says, "the first invoice by Fishery Products International shall be presented on or about April 27, 1990 to the Province by FPI." I am IAJondering if the Province has received an invoice from Fishery Products Internationa1 ·to date, and if so, if the Minister would be able to inform the House how much that invoice is calling for payment from the Province. Mr.

Speaker: The Minister of Employment Relations. hon . the and Labour Ms Cowan: Yes, questions on that w-i"I~c-·-·u··;;l:,ally be answered by the Minister of Fisheries or the Premier, 1.11ho ar·e the chief spokespersons For that, but since that has to do with an invoice, I IAdll mention it because it would have comr:~ to my Department. There must have been an invoice come in in order for the cheque to go out.

I certainly can double check that for you, but I think from my reading of the agreement - I don't have the agr·eement in front of me at the moment, but the invoicr:~ has to come in before the mom~y goes out. r1.r....:..._.fu?._§':..~J~'?:. r : T h e h o n . t h e Me m b e r for Grand Bank. L5 May 18, 1990 Vol XLI Mr. Matthews : Thank you, Mr . Speaker. Yes, I understand that, Min. SpeakE!r, that thr::' invoice should comr:~ in befo1ne the chE!que goes out, but my question is has there been an invoice lnecEdved by the Minister's Department in which there is $9 mill.ion Budgeted l~.his year to make such payments.

If there has been - An Han. Member: And ".is she responsible for it? Mr. Matthews: WeLl, shr:! siqnr::~cl the Agreement. It is t1nue, ".it is her responsibility. If an invoice has been received to date from Fishery Products International, how much would the Provincr::~ have to pay Fishery Products International as a result of that invoice? Mr. Speaker : The Minister of Fisheries . han. the Mr. Carter: Mr . SpE~aker, I can't. provide the information, obviously. I don't know what the hon. Member is trying to ~JE!t at..

The fact of the matter ".is, the ProvincE:~ has unclr:'rtaken to provide certa".in sums of money to help defray the cost of ext.ending the working period in those plants. I want to makE:~ it clE!aln onCE! a~]lLin that not one cent of that rnonE:!y, not one fraction of a cent will end up in the cofff::~rs of the t:t~o.Jo companies concerned. These are funds being provided to the workers to extend the wo1nking period of the people work".ing ".in thf::~ plants to make thf::~ plant closure a little less severe on them.

Certainly, information as to the dates when payments were made and the amounts, that is thE:~ kind of information we l.ld.11 have to provide at a J.ate1n date, Min. Speaker. No. 3 7 R5

Mr. Speaker: The hon. the Member for Grand Bank . Mr. Matthews : Thank you, Mr. Speaker. I respect that, Mr. Speaker, and I am not trying to do anything. What is happening to National Sea is very straightforward. The payment

schedule is there, three $750,000 payments, a $500,000 dollar payment, and $250,000 when the final audit is clone for National Sea. My point. is that t.his invoice from Fishery Products International s~ould give some indication as to what we can expect the Province to pay to Fishery Products International under the extended notice period.

Ther·e is $6 million budgeted this year to FPI, and my question is for the simple reason of trying to determine if indeed that $6 million, based on what we will know as of 27 April, lAJill be used up by the Province advancing it to Fishery Products International, or if it will be less than $6 million. That is the reason for my question. I arn not trying to accomplish anything underhanded here, I just want the answers. Mr. Speaker : The Minister of Fisheries . hon. the Mr. Carter: We will be happy to table the invoice and all information pertaining to the transaction. But I can only remind the han.

Member that the agreements undertaken between FPI and the Province cover an agreement that will see an expenditure of $11.6 million for the fiscal years 1990-91, and 1 9 9 1-9 2 . Now , as to the details of when the payments started, how rnuch was paid, the amount of the invoice and what lAJe did with it, that will be tabled next week. L6 May 18, 1990 Vol XLI Mr. Speaker: The hon. the Member for St. John 1 s East Extern . Mr. Parsons: Thank you, Mr. Speaker. My question is to thE! Minister of Fisheries.

Because of the devastation being caused out there by plant closures, especially to rural Newfoundland and Labrador, I want to ask the Minister if it is Government policy for fish plants which have closed because of rinancial problems and are reopening under new management that there is no Government input financially to the new operators of those plants? Mr. Speaker: The Minister of Fisheries. hon. the Mr. Carter: I am not sure what he is talking about . An Han. Member: ·rwillingate . Mr. Parsons: You said at one time there was no Government help to plants which were not viable. Mr.

Carter: Twillingate will be happy - of course, this 1.uas a deal worked out between the Newfoundland and Labrador Development CoJ~poration and LhCc! company concerned. Because once that company went into receiversl1ip, the propel~ty and the pJ.ant became the pl~opel~ty of thE:! Newfoundland and Labrador Development Corporation. I can tell you now that the new operator who has taken ove1~ that planL, Dr·. Blackwood 1 s company, is not receiving any loan guaranteE!S frorn the Government, not one CE!nt.

They did not ask for any, and they are not getting any. rhere lAri .ll be a normal management Fee provided the company. as you would expect. The Company will be responsible For any losses which are incurred and, by the sarn~O! No. 37 R6

token, will have the right to keep any profits that are made. Mr. Matthews: (Inaudible). Mr. Speaker : Order, please! The hon. the Member for St. John • s East Extern. Mr. Parsons: I am sure I hear the Minister coJ"I"ectly, that th~~r·e is a management fee with the Newfoundland and Labrador Development Corporation, which is a financial arm of Government. I want to ask the Minister notJJ, is the1"e a management fet::~ be:~ing paid at. the Tt.o~lillingate plant? If so, to whom and how much? Mr. Speaker: The Minister of Fisheries. hon . the Mr. Carter: Mr . Speaker, I just answered the question.

I said there was a management fee being paid to the company. The amount: I will get the information from the NLDC. But it is a management fee being paid to the company which is going to be operating the plant. Mr. Speaker: fhe hon. the Member for St. John•s East Extern. Mr. Parsons: A final supplementary, Mr. Speaker. The Minister has stated that tht::~rt::~ is no financial input from Government as it pertains to his DepartmE!nt. But with an arm of Government supplying that managerial fee, then is that not part of this Government?

Has the Minister not misled, not intentionally, but hasn• t the Minister told this House there is no Government input in any plant, no Government support? Why the difference, shall we say, in plants on the Southern Shol"e as compar'E!d to thE! L'7 May 18, 1990 Vol XLI plant in Minis tel" question? Twillingate? Would please answer Some Hon. Members: Hear·, hE!ar! Mr. Speaker: Order, please! t. hE' l. hE! The hon. the Minister of Fisheries. Mr.

Cartel": The NetJJfoundland and Labl"aclor Developm(!nt COl"POI"at·ion becamE• the own~::~rs of l:hat PI"OpE!l"ty the moment the former company, Oceana Seafoods, went into receivershi~. The Newfoundland and Labradol" Develop111ent Corporation•s involvement in that operation is by virtUE! of a deal made by thE! former AdministJ"ation with the Newfoundland and Labrador Development Corporation whereby they gave tht::~m. I l:hinl<, a $1.5 million loan to purchase the company fl"Oin Beothic, and on wh·ich they took a fil"St mol"tgage on thE! plant.

Now, then, once the company went into l"eceivership, then, of course, NLDC had to do what was neCE!Ssary; th~~Y had to protect their· assets, had to movE• in and do what had to be done. Luckily, they found an operator who was tJJi11ing to movE• in and clo the job without any Government gua1"antee. I I[Jiqht Speaker, add, by lhe t~.Jay, that the Government - Mr. An Hon. Member : (inaudible). ThE! GoVE:'l"nrnent Mr.

Cartel": One second notJJ. rhe previous Administration had given Oct::~ana Seafoods a $1.9 million 1oan guarantee on that operation w h i c h l: h e Go v e 1" nrn 1:! n t t~li 11 h a v E! to pay off, or NLDC. An Hon. Member : But you just said you were putting no money into it. No. 37 R'l

Mr. Speaker: Order, please! Mr. Carter: Mr. Speaker, I do not know what they are trying to make of the Twillingate deal. It is probably one of the best deals ever made by a Government for a fish plant. ?orne ~on. Membe_r.~: Hear, hear! Mr. Carter: I might say, Mr. Speaker, I give a lot of credit - if the members of the Economic Recovery Team do not do another days work for the next twelve months, they will have earned their keep by virtlJe of what they did for the-:~ plant in Twillingate. It was a fantastic feat on their part, and I give credit to Dr.

House and Wayne Humphries, and, of course, not forgetting my dear colleague, the Minister of Development, who helped me spearhead what had to be done there. Mr. Speaker, it was a good feat on the part of the Economic Recovery Team, on the part of the Newfoundland and Labrador Development Corporation, on the part of the Department of Development, and on the part of my officials. Some Han. Members: Hear, hear! Mr. Speaker: please! Order please! Order The han. the Mountains. Member for Tor·ngat Mr . Warren: Thank you, Mr. Speaker. My question is to the Premier.

On May 2nd I as ked the Premier if he would meet with concerned citizens in Labrador concerning low-level flying. On May 3rd I asked him the same question, and the Premier said, and I quote 'Yes, Mr. Speaker, I will meet with the concerned L8 May 18, 1990 Uol XLI citizens of any community in this Province who have establish•:!d some basis for concern'. I ask thE! Premier today, will he meet IAii th the concerned citizens in Hopedale? Mr. Speaker: The han. the Premier . Premier Wells: I have not been asked to meet t.~.Jith thc-:~m. Mr. Speaker. There is no m~ed fo1n rrtE! to meet with them.

As a matter of fact, I would say on either thE! 3rd or 4th of May I telephoned Mr. Uincent. Somehow or other·, thE~ han. -Member had the letter Mr. Uincent IAunote to me befo1nE~ I had it. I do not know how l:. hat happens. I do not knotAJ hoiAJ thoSE! discourtesies t.ake place, but in any event, they do. Nevertheless, when I received Min. Uincent' s letter, I telephonE!d him immediately. I will explain to the House the level oF concern, and the House will then understand, I am sure, and endorSE! fully the action I took. There is no anywhere near Hopedale. low-level flying the community of An Han. Member: true.

Not true . That Mr. Speaker : Order, please! is Premier Wells: The Member have his opportunity to say he wants when he wants to. not IAii 11 tJJhat: It is true. There is no low-level flying anywhere near the community of Hopedale . The low-level flying of which Mayor Fred Uincent is complaining is taking place some 80 miles to the west of Ho pE!da1e, within - An Han. Member: (Inaudible) . No. 37 R8

Premier Wells : I wiJ.l start again, Mr. Speaker . The low-level flying of which thE! han. Member is complaining - An Han. Member: (Inaudible). Premier Wells : I will start again, Mr. Speaker. Mr. Speaker: Order, please! OrdE:~r please! I ask han. Members to please refrain from interl"Upting. The Chair is try:ing to draw the conclusion whether the Premier is answering the question. And as long as I get interruptions from my right, i.t is intel"ferring 1.o~.lith my concentration. The Premier is explaining the si·tuation. I ask the Prern:i.er to please clUE! up the answer.

Premier Wells : The complaint I had from Mayor Fred Vincent related to flying that was some 80 miles to the west of Hopedale, Mr. Speaker, within the flying range. What he said was that certain hunters from Hopedale went into that area to hunt caribou and, appa1"ently. while they tAJel"e there. they claim, a plane flet.-~.1 low ovel" the area where they lAJerr:~ hunting. It is within . thE! approved range. I contacted Colonel Engstad and asked him if he would rneet with the Mayor of Hopedale and address the question so that it could bE! dealt with between the - Mr. Simms : with?

What department is he Premier Wells: I again, Mr. Speaker. the Canadian Forces charge of the - will start I contacted Officer in Mr. Speaker: Order, please! L9 May 18. 1990 Vol XLI Ordr:~r. pleasE:~! The Chail" has as I<E!d hon. ME!rnbN'S to refrain fl"Orn asking questions. When han. MernbE!rs ask question in their place, and I have asked hon. Members not to do that, then a Member will take advantage and either stal"t or address the mat tel" over. If Hon. Members 1..1.1i.ll refrain from interrupting anst~.Jei"S, it will give the Chair a chance to tE!ll the PI"E•rniE!l" hE! has iH1SIAJEH'E•d the question. Mr.

Simms: be stopped. Eventua11y he has to Mr . Speaker : Order. please! I make a specific request to the Opposition House Lead~~r. that thr::! Chair will decide when the question is answered. There are firm l"Ules govel"ning that, and Lhe Chair will not tolerate any questioning any further. The han. the Premier . Premier Wells : Thank you. Mr . Speaker, I asked to rneet directly and I will check that he has done mornE!nt, I do not has or not. Colonel EngsLacl with the Mayor and rnake SUI"E! so. As oF this knol..l.l lAihethE•l" he JI:IIL . .:...~E.~.~-~. -~!:: The hon . Lhe Mc:~rnber for Torngat Mountains. Mr.

Warren: Thclnk you VE!I"Y rnuch, Mr·-:· .. --··-··s-p"e"'a"i( e r . I lAI i. 11 t a b 1 (~ a letter which tAJas sent to t:.hP Premier. It says l:he rr:~sidents of HopE!dale are vel"Y conCE!I"ned about military activity in l:he HopE:~dale area. I will table the letter, Mr. Speaker, and I lAli.ll ask l:he Premier to meet with the town council. Il: dor:~s not ask Colonel Engstad. No. 37 [,9

Now, Mr. Speaker, I tAiill ask the Premier again, knowing as of yesterday that Colonel Engstad didn't even call the town council, if he is not going to do so, will the Premier meet with the people in Hopedale as requested? Mr _:__$_e_~a~ .. ~ .. !:: The hon. the Premier . Premier Wells: Mr. Speaker, when I contacted Mayotn Fred Vincent I asked him what he meant by the Hopedale area, and he told me it was about eighty miles to the west of Hopedale, within the range. Mr. Warren: Within the traditional hunting ground. Premier Wells: So that is the Hopedale area. Now han.

Members know why I do not rush and jump in the nearest car every time the hon. Mt::~rnber j urnps up and says something in this House, because there is usually no sound basis f o r it . B u t I wi 11 , for the moment, accept what · he says, that Colonel Engstad has not yet called. I tAiill have that checked immediately, and hopefully, with loave of the House, I u.d.ll be able to report to the House today, Mr. Speaker. Mr. Speaker: The hon. the Member for Harbour Main . Mt". Doyle: Thank you, Mtn. Speaker. I have a question for the Minister of Employment and Labour Relations.

The Minister is aware from a question I as ked her approximately about a month ago with respect to the Workers' Compensation Commission, that the Commission, or the Board, has, on occasion, overruled the decision of the Workers' Compensation Appeals Tribunal. The Tribunal, as the Minister is aware, is a court of l.ast appeal For the LlO May 18, 1990 Vol. XLI worker. First of all, does the Minister feE!l, does she think thE! Workers' Compensation Commission, or thr:1 Board, should have the right to overturn the decisions of the Appeals Tribunal? Mr. Speaker: The han. thE!

Minister of Employment and Labour Relations. Ms Cowan: I arn not pr'epared, Mr'. Speaker, at this point to answer that question, bE!cause• I think it . is a matter, really, to be settled, first of all, if possible, between the people on the Board of the Workers' Compensation Comrnisston and the Tribunal. There have bE:! en, as tAlE:! are atAJare, several cases tAJh.ich haVE! beE!n rE!Vit::~wed reCE!ntly by UH:' W o r k E! r s ' Co m p e n s a L :i o n C o rnrn i s s i o n which thE!Y have had sorne quest:l .on about, and legally i l: is tht::>ir right to do so .

That has then resulted in public debate, tAJhE!ther or not this should be the right tAJay to go about it. I l:laVl'! asked the Tribunal, or will be asking the Tribunal and the WOi"I<E!InS' Compensation Board to sit down togethE!r to see iF l:hey can resolve the issue. I am looking forward to that being resolved. If it: is not r1?.solved by that process, then I haVE! some other plans in mind. 13ut i l: is no use to discuss those at this time; I think we will just cross one bridge as we come to it. Mr. Speaker: ThE~ hon. thP ME!rrtber for Harbour Main. Mr. Doyle: Thank you, Mr . Speaker.

I believe the Minister mentioned at one point in the examination of her· estirnatE!S that it might. be possible to cons:ide1" legislation on that. I believe, specifically, l:hat would bl~ a No. 37 R10

change to Clause 21(3) of The Workers 1 Compensation Act. Is the Minister considering legislation? Obviously the legislation will not be able ·to come in in this session. So if there is no legislation in this session, what does she consider as an interim solution to the problem if the problem cannot be solved between the Commission and the Appeals Tribunal? Min. Speakeln: The Minisb:1r of Employment ReJ.ations. han. and the Labour Ms Cowan : I already answered that question, Mr. Speaker. I said, and I wiJ.l repeat it again for the sake of rny han. critic, I am not making any decisions on it at this point.

The matter may very LI.Jell be resolv~;:1d by discussions betl.u~;:1en the two parties involved. Their recommendation might be that legislation be changed, but, again, they may find a simpler and easier solution, which will not require legislative changes. Mr. Speaker: The han. the Membe1n for Harbour Main. Mr. Doyle: Again, t..uith respect to the Workers 1 Compensation Commission, I would like to touch on the qperating deficit for a moment. As the Minister is at..uare, the operating deficit for 1989 has more than doubled since 1988.

I believe it is up to $52 million now, and I believe it was down around $26 million back in 1988. Can the Minister tell us t..uhy the operating deficit in 1989 has gone to $52 million? Mr. Speaker: The Minister of Employment Relations. Ms Cowan: Thank -•-••••---•-••U•••• -.-•·- Lll May 18, 1990 hon. the and Labour you, Mr . Vol XLI Speaker. What has happened with the reporting this year is it has changed s ornewha t in the method of the repol"ting procr:1dures, and that is what shot..us up this tr1'::1rnendous deficit. It is a J.argr:1 deficit.

It did not just suddenly materialize overnight, it came about as a result of the way that it classified the budget. In 1989, the Commission has had to record additional estimated liabilities of $26.9 million for the future costs of previous rehabilitation and extended earnings lost claims; $16.3 million is on account of injuries which occurred before 1989, and the balance, ~t>l0.6 milLion, is for 1989 injulnii'::1S.

These accumulated J.iabilities, which were only rE!CE!ntly rE!port~~d by the Commission 1 s actuary, a1ne on account of costs attributable to 1984- lr:1gislative chang~;:'s which could not be actuarially estirna l:ed without five years of injury experience. The consequence of now having to report the underestimated reserves for rehabilitation and extended earnings lost, all in the 1989 year, is that the accurnulc:d:ed deficit From all rate classifications has i.nCI"eaSE!d dramatically, from 25 - Mr. Speaker : Order, please! The Chair was preoccupied with enquiring from my Table Officers on a point when the hon.

Mernber asked the qu~;:1stion. I apologiz~~. I did not get the question. But the Chair is always a bit leery when people start reading long statisti.cs. Answers should bE! brief. It is preferable, if t.he answer is long, that hon. Ministers table the document. I would ask the han. Minister to clue up, please. No. 37 R11.

Ms Cowan: It is a long answer, Mr. Speaker, and neCE!Ssary for rne to read, because it is complicated financially. I certainly, again, would not want to give any information to the House that was not absolutely accurate. I will be only too happy to table the information. Some Han. Members : Hear, hear! Mr . Speaker : expired . Question Period has Petitions r'!r. Speaker: The hon. the Member for Torngat Mountains. Mr. Warren: Mr. Speaker.

I would think, of the many petitions I have been presenting, this is an appropriate day to present a petition signed by a number of residents in Labrador concerning th~' Air Subsidy Program. The prayetn of the petition: We, the concerned citizens, are concerned that the Government of Newfoundland and Labrador has reduced the Labrador Air Subsidy and thereby unacceptably increased the burden of transportation costs for the people of Labrador. Now,' Mr.

Speaker, today we really saw in this House a Government committed to Labrador, we really saw it, a Government which has caused another burden on the taxpayers in Labrador, a Government which took almost four months to decide to eliminate a program. I have a feeling the Premier told the two Labrador Members not to be in the House today. It is interesting that the two Labrador Members fr"om thE! Government side are not in the House today when this Government Ll2 May 18, 1990 Uol XLI makes the announcement. An Han. Member: (Inaudible) . Mr. Warren: Now, Mr. Speaker, the PrE!mier gets upset.

You knotJJ, thr:~ funny thing about the Pri'::Hnier is it is his way or no way. Too bad, I say, Mr. Speaker. The truth or not the truth, you people havE:~ cut. $4-00,000 out of the taxpayer"S' pockets in Labrnador. That 's whclt you have done! And not only th at, it is most interesttng that this morning I heard the Minister of Social Services saying the Government will pay to get refugees out of Newfoundland. Mr. Efford: That is wrong. ~r. Warren: Mr. Speaker, the Minister satd the Governmt::~nt t~ri11 pay, and, at the same timE !, he tAJill not help people in Labr ·ador come to the Province of Newfoundland. Mr.

Speaker: Order, please! Order, please! I remind all hon. Members that when speaking to a pet.it:i.on t:hey must keep their remarks to the allegations of the petition . Unless the hon . Member is relating his facts to the p e ti . l:. ion , I tJJo u 1 d ask him to desist. Mr. Warren: Thank you vet"Y rnuch, Mr. Speaker. Yes, in fact, what. I was just saying does r'E!1ate to a Government expenditure, which the Government is cutting out, for helping people in Labrador come to the Island portion of th e Province, while at the same t.:ime announcing a program to help SE!nd refugees out of the Province. Mr.

Speaker, l:he honestly say it is mo1"e to transfer No. 37 MinistE!r could going to cost the UJ'itnt:een R12

hundred or so refugees . Mr .. ~.-_Eff Q.r.9.: (I naud ib le) Question Period (inaudible). Mr. Spt:!aker: Order, please! Order, please! Mr. Warren: I just want to say, Mr. Speaker, the han. Minister and this Government have just made a decision which will hurt the people in Labrador. So the Minister should not bE:1 too happy and too proud of this Govt:H'nment which is again socking it to the people of Labrador today. I think, Mr. Speaker, it is ridiculous for a Government which campaigned on a real change and fairness and balance.

Unfortunately, as the Premier has told the Mayor in Hopedale - the funny thing about it, Mr. Speaker, is the Premier did not tell the whole story about his conversaU.on with the Mayor, which is most interesting also. The Premier has always said that with fairness and balance everybody will be treated equally, yet at this time and this period the Government has decided to again sock it to the Labl"ador people . I wi 11 continue , M r . Speaker, in the days to follow, to present petitions for having this Air Subsidy Program reinstated. This is from 127 people in the community of Hopedale.

In fact, this is the second petition on the same issue from the people of Hopedale, so they are are really, really concerned, Mr. Speaker. I refer this to the Department to which it relates, in particular the Department of Works, Services and Transportation. In thc:.:1 Minister's budget there is $8,000 per Minister for a car. That could help alleviate some of the hardship it is costing the Labrador people when they travel Ll3 May 18, 1990 Uol XLI to the Island. SpeakE:1r. Thank you, Mr . Mr. Speaker : Are thei"E:' any further petitions? Mr. A. Snow: I am speaking to that petition, Mr. Speaker. Mr.

Speaker: We will that petition. The Member for Menihek . go back to han. l:he ~-t:' .... : .......... _.8...:. ___ .. §..1J.9..~. : T h a n k y o L1 , V E! I" y much, Mr. Speaker. I am plr:~ased to have the opportunity to rise and speak to tht:=! peti t.ion presented so capably by the hon. the Member for Torngat Mountains on behalf of the 127 residents of Hopedale who signed that petition. It is interesting to note that this particular prog1"am was announced in t:.he Mar·ch 15 Budget.

The gutting oF this particular progl"arn, and thE! othe1" program, the ~abrader fravel Program, under the Department of Municipal and Provincial Affairs, was announced in the Budget brought down by this Government on March 15. Subsequent to that date, of course, our Prl':HrriE!r had bE:1en in Western ·Labl"ador vtsit.i.ng, and took the opportunity to go skiing, I beltevE:'. AftE!I" t.h~ =~ Budget. was brought dotJJn, things in Western Labrador, and indeed all over Labrador, have been going downhill ever since . Dr. Kitchen: Ho, ho! Mr. A. Snow: Ho, ho! The hoc . the Minister of Finance thinks that is funny.

He t.htnks it is funny that 6, 000 peopl~~ in Labrador are not going to bE! ablE! to avail themselves of an opportunity to get a subsidy to travel to the Island portion of this Province . He thinks tha-t . is funny. He thinks it is Funny t:hat No. 37 R13

the people of Labrador are going to be stepped upon by him and his particular Department in removing t hi s s u b s i d y . It i s a c 1 aw- b a c k procedure he, himself, announced. He, himself, suggested the reason why the people of Labrador were not going to get the subsidy was because of a tax benefit program he does not fully understand. Otherwise, he would not have said it; he would not have had his proverbial foot in his mouth again; he would not have said it if he understood it properly.

But, again, being the type of Minister he is, we understand why he does not understand what is going on in Labrador, and. indeed, possibly in all the rest of the areas of this particular Province. It is interesting that this Government announced $50 million in r·oad transportation on the Island portion of the Province, yet did not see fit to continue a program to a portion of this Province which only has ai~ travel as a method of transportation to get to the Island portion of the Province. That is the only method fo travel we have . It costs $724, return air fare, to come to St.

John 1 s from Western Labrador $724. Previous to this Government 1 s taking office and bringing down this infamous Budget, there would be a 20 per cent subsidy given by the Government; it I.AJas brought in twenty-four years ago by a Liberal Administration. This so-called capital 1 L 1 Liberal Administration. which really is a Conservative Government, has seen fit to gut this program and take this benefit away from the people of Labrador.

It is also interesting to note that the hon. the MernbE!r for Exploits really told the t1nue L14 May 18, 1990 Vol XLI story of how this Government operates, hotAJ they attempt to bE! sneaky and deceitful. They are becoming masters at it, in the sense that they put. out this little statement of about thirty seconds, and then he laughs at it. And he suggests a timE• limit a person has to respond to it. This has been the trademark of this particular Administration. It is unfortunate, and I arn sure the people of Labrador. all over Labrador, will be remembering exactly how they have been treated.

I feel, in the fact that this Government suggests it has been budgetary, is completely untrue. They are operating a current account with a $10 million surplus, so it is not budgetary . They increased taxes to the residents of western Labrador. In payroll tax, there wi1.l be approximately an extra $3 mi1lion coming out· of western Labrador alone into the coffers on the Island portion of this Province, and the only way this Cabinet sees to improve transportation in the Province is to buy cars for themselVE!S; so they can go to Cabinet meetings, or whatever they do with them.

That is unfortunate. and the peopll '! of Labrador are finding it very unfortunate. Mr. Speaker: Order, ph~ase! The han. gentlernan 1 s time is up. Mr . A. Snow: Thank you ver-y rnuch, Mr. Speaker . Mr. Speaker: The hon. the Premier . Premier Wells : Mr. SpE·akE:~l", I want to disabuse the House and t.he gE:~nE:H'al public of S OTriE! of l:: hE:~ nonsense I have just hE•ard fi' 'Oin No. 37 R14

the hon. the Mernbet~ fot" Menihek. The reasons have been explained before by the President of the Treasury Boat"d as to why this subsidy was cut out. There are a half dozen of them, and I will run over them. To begin with, all Government employees in Labrador get fully paid trips. I don't know how many a year, a number. All of the major corporate employers in Labrador give their employees fu1ly paid trips out to the Island part of the Province every year, there is company employee travel.

What we were finding was happening is everybody who was being paid fully by Government and by their employers to enable them to take trips, were also claiming the subsidy; in effect, making a profit on the trip . So what we are doing, Mr. Speaker, is cutting out abuse. and we have left in place the subsidy where the subsidy was necessary. A few people will often spoil it for others. and this is what has happened in this case. I have no doubt there are other genuine cases who never abused it, and I do not mean to suggest that everybody did. But, Mr.

Speaker, as well, the Government pays a direct subsidy to the companies in Labrador of $700,000 a year to facilitate and lot.ver the cost of travel in Labrador. Mr. Warren: (Inaudible) Labrador. don't be so foolish, boy . Premier Wells: That is right, tJJe pay $700,000 a year to ensure that there is assistance - Mr. Warren: (Inaudible) . Mr. Speaker : Order, please! Order, please! Ll5 May 18, 1990 Vol XLI The Chair has tolerated in the past many. many intE!rt"uptions from the Membc:!r for Torngat Mountains.

The Chair is now asking the Member to p1ease t"estr·ain himse1f. or the Chair is going to have to take the appropriate action if it continues. The hon. the Premier . Premier Wells: Mr. Speaker, the Government pays that $700,000 a y~~ar to aid :in the cos l: of l:r·a1;el on the coast of Labrador. As we'll, companies and l:he GoVE!l"nrnE~nt pay the:it~ employees to a~>sist in travel. There is another factor, Mr . Speaker, which people are forgetting. rhe northern allowanCE! appliE!S to the wholE• of Labrador, and this Government contributes to that because we give up tax revenue in the northern allowancE:~.

That is not just the Federal Government, the Provincial Government loses as well. Now, Mr. Speaker, let me remind han. Members that pE!Ople in St. Anthony have a higher cost to bear to travel to St. John's than do many people in Labrador who get this kind of assistancE:'. So this kind of pained indignation is unacceptable, is unrE:~al. it has no foundation in fact, nor do~~s :it relate to the cars that thE:' 11on . Member mentioned. The Ministers agreed at Cabinet to try to cut the cost and absorb some of l:he cost themselves. and that is t.vhy this was done . And .

M r . speak E! r . we undet"take, onE! year from nolA!, to table precisely the cost of operating car·s for this Govc:'rnrnpn ·t and compar~:> it t~o.li th the cost : of the former Government, and what the cost would be. I make a commitment now to the people of this Province that . we t~o.~i.ll do that, and those han . Members opposite wi11 then swallow their No . 3 '7 R15

words and Newfoundland how false accusations Speaker. the people will understand and unfounded are. Thank you, of just their Mr. Some Hon. Members: Hear, hear! Mr. Speaker: The hon. the Leader of the Opposition. Mr. Rideout : Thank you, Mr·. Speaker. I have a petition here, signed by seventeen students at the Community College in Labrador, asking that this Government reconsider and implement the Labrador Travel Subsidy, Mr. Speaker. I am very pleased to take the opportunity to present this petition on their behalf today. In view of what was just said in presenting or speaking to a petition, Mr.

Speaker, I will also respond to some of the remarks made by the han . the Premier. But, first, of all, in the five minutes I have, I want to say this, that this Government has treated Labrador very shoddily in this Budget. The Minister of Finance went into the industrial heart of Labrador and grabbed out $2.5 million or $3 million in extra taxation through its payroll tax, and thE!n, on the other hand, began to shave off benefits that IAJere going to individuals in the form, in this particular case, of travel subsidy, Mr. Speaker. Government employees and employees of large corporations are one thing, Mr.

Speaker, but there are hundreds and hundrE:~ds, I suspect thousands and thousands, of small, ordinary individuals all over Labrador who at least had an opportunity to take advantage of this Travel Subsidy Program if they wanted to. Why didn 1 t the L16 May 18, 1990 Vol XLI Government, if they were worried about abusE!, Mr. Speaker, zero in on abuse? They have accountants; there must be a way to find out if there is abuse. Why didn't the Government do that and lE•ave thE! program intact for those people who needed it? That cou ld have been done, I say to the Government, Mr . Speaker.

If the Government had the u.JiLl to ({o it and wanted to do it, it could have been done. To try to compare thE! burden of cost of thosE• living in Labrador with somebody living in St. Anthony, or somewhere e1sE! on the Northern Peninsula begs the obvious, that those pE!Ople living on the Island, in most cases, particularly examples rE!fE!l'TE!d Lo, at least they havE:~ an alteJnnal:. :ive they can jump in a car· . But somebody in Labrador West cannot jump in a car and carne in lo St:. John 1 s. So those k:inds of things are just not good enough, Mln . Speaker.

Now, the last point I lAJanl:. to rnake in supporting this petition is the emotional outburst and emotional indignation of the PrE! l'n:ier in referring to some commentary fl"OITI this side about the new Government car policy. · Mr. Speaker, let me say to the Premier, when the Pl"E!Sident. of Treasury Board made his announcement on that policy last week, he already did what the Premier promised to do a year frorn now. The President of Treasury Board gave the House thE! expE!nses for operating twenty -three vehicles which were operated th e year before last. If the Government wanted to be honest, Mr.

Speaker, the figures given to this House were for thE! pr·evious year. If l:hey tJJant.,O!d to be honest, they could have given thE:~ figures for the yea1n just: endE:'d, No. 37 R16

March 31st, tAJhen I would think there would have been fourteen Ministers. That is what should have been done. It should have been done last week. The figures for the fourteen Ministers, Your Honour· and myself, I guess it is sixteen altogether, those figures could have been given; but, no, this Government, in its attempt to tal<(! a few facts and try to deceive, used the figures from the year before last and Lhen extrapolated them over twelve or thirteen costs for the new figUl"es for this coming year, with the new policy. So the Government gets itself down into a hole and wallows around.

Because if it had come Forth t~ri th the proper information, what it tabled, what it cost For thE! year just ended, and then gave the diFference, we could see what the new policy would end up saving. Mr. Baker: That isn 1 t in your petition. Mr. Rideout: That is exactly as much in my petition as it t..\Jas in the petition the Premier just ad d rE:' s s e d , M I" . S p.e a k e r . B o t h of us are talking on the same petition subject, both of us hav~::~ made the same comments.

If l:he Government House Leader wants to rise on a point of order, I challenge him to go ahead and we tAii.ll see what the ruling will be. But my commentary is exactly the same as the Premier 1 s. Mr. Speaker, having said that, I ~ am delighted to take the opportunity to present this petition this morning. I hope th~::~ Government will reconsider. I doubt it. We saw the reason for· this, I think, very clearly in the intemperate remarks of the Premier, t..\Jhen he tr·ied to defE!nd Ll7 May 18, 1990 Vol XLI the indefC::~nsible. This is a dat"k day for Labrador, Mr. Speaker. Mr. Speaker: Order, please! The han.

Member 1 s time has elapsed . The han. the Member for Menihek . Before recognizing the han. ME!mbE!l" for Menihek, the Chair will comment on thE! matter of I"E!levancy w h 1 c h t~Ja s I" at s e d . r he c h a .i I" had spoken earlier, I Lhink to the Member for TorngaL Mountains, pointing out the necessity of staying within the prayer or· thE! material allegations of the petition. WhE!I'I han. Mernbei"S wanciE!r, they SE!e tAJhat can hctppE!n.

Now the Member for Menihek was talking about cuLting costs and this kind of thing, and I"E~1.atinc.:1 it to the~ ail" subsidy, and that is why the Chair did not interrupt at the time. Han. Members, of course, will realize- that it is sort of acceph'd that. · H.·. is l:.it for tat, and when one Member mentions something, it is obviously propC::~r to a11ot~J anot.ht::'r MernbE!r to cornrnE!Ilt, un10~ss ·it· is way out of range. Han.

Members lAJi.ll realize that thc:•l"l" lAJas some degreE! of dE!bate in this House i3.t one t.irne on tit for l:at, and l..hr:'y could go back to t.he Administration and find out e:-:tbou t it. The han. the Member for Menihek . Mr. A. Snow : Thank you VE·r·y much, Mr . Speaker. I am pleased to again have thE! opportunity to speak to this issue u.Jhich is VE!I"Y important to the people of all Labrador. In fact, while I represent the mining District of western Labrador, Lhe electoral Dis t.rict of MenihE!I<, Lhis peti t:ion t..\Jas presented by the LE~ader of LhE! No. 3 '/ Rl?

Oppos i t.ion on behalf of people attending the Labrador Community College in Happy Valley - Goose Bay. In speaking to the previous petition, the Premier spoke about the reasons why this particular program was gutted, why the people of Labrador will not have this subiidy available any more, why 6,000 people in Labrador are going to be hurt by shared equally, I guess it is, or equitably, to the tune of about $400,000 to $500,000 next year because of the gutting of this particular program by this Liberal Administration.

He mentioned one of the reasons was that thE•re lAJas a raise or a benefit conferred upon Government employees. That is interesting to note, that people just in Labrador will have to pay this parti·cular raise to Government employees. For Government services being delivered in Labrador we, as residents of Labrador, now have to be the only ones to pay their way to the Island. That is an interesting example that the Premier would bring up.

He also mentioned, of course, that one of the other reasons is that a lot of people in Labrador either work for the Federal or Provincial Governments, or major companies, and they do, indeed, have a tJnaVE!l allowance. l·h'! is correct. They do have a travel allowance that enables them to travel at company expense to the Island portion of the Province or, indeed, to, I believe, Quebec City or Mont~real.

Of course, he also went on to suggest that the rE!al reason, again, was the amount of money this Government lost because there :is a tax benefit conferred by the Federal Government - this Government lost revenue because residents of Labrador had this tax LlB May 18, 1990 Vol XLI benefit conferred upon thr:~m by the Federal Government. That tJJa s another reason . Of course, the only reason why they get to deduct this is if somebody pays it. There are thousands and thousands oF peoplE! living in Labrador u..Jho do not: g~:!t this deduction. They do not get it, and that is why they needed the 20 per cent subsidy.

Premier Wells : (Inaudible) Labrador is wrong . Mr. A. Snow: I am speak ing for the people who signed this petition in the Labrador Community College. These people do not work fo1n the large cor·poJ"at.ions, thE!Y do not geL th t:~ benefit. That . is why they needed the 20 per cent subsidy. The Premier also mentioned about how isolated the people of St . Anthony are and -how far they tJJeJ"e, how much it tJJouJ.d cost. the pE•ople of St. Anthony to dr·ive l:.o ~>t. John 1 s, or to fly to St.. John 1 s. I am not sure if anybody has given the Premier a geography le sson lately, but you cannot droiiJE!

Fi"Om Nain to St . John's, you cannot drive from Wabush l:o St.

John's, and indeed, iF you drive for ty miles, talking about that particular Department, if you drive forty miles from Labrador West. down the so -called Trans-Labrador Highway, you will find yourself probably having to get yourself towed back because that particular Department oF Government, Works, Services and Trans porta tio n, s atJJ fit no t to spend one nickel this year, not one nickel, on plowing the snow from the road so that the road would be dried out by now, and now because the contract.or· has st.arl:ii:~cl wo 1n k i n t h t:' l" e , i t is no t F i t. t. o No. 37 1na

drive upon. He would know that if he knew anything about the geography of Newfoundland and Labrador. I am disappointed, and I am angry, and I am sure that going home this week end a lot of the residents in my District, in Western Labrador, are going to be disappointed and angry, because they do not all get the tax benefit. They do not ali get the travel benefit that the Federal Government gives, and the Provincial Government are now going to be giving to their employees solely on the backs of the residents of Labrador, according to the Premier.

They are going to be angry because they are going to be losing the 20 per cent subsidy that has been in place for the last twenty-five years, put in place by the previous Liberal Administration under tht::~ leadr:~rsh:i.p of tht::~ Han. Joseph R. Smallwood, and I might add, under the suggestion of an hon.

Member on the other side of the House, the hon. ~ember for Placentia, on a citizens committee recommended to that particular Administration, that they should have an Air Travel Subsidy Program in Labrador. rhat particular Administration saw fit to implement it and it is unfortunate that this particular Administration saw that it was unnecessary, although it could have been budgetary, a Government with a $10 million surplus cannot argue that it was because of restraint. They have a $10 million surplus so indeed it cannot be for monetary or budgetary reasons. Thank you, very much, Mr. Speaker. Mr.

Speaker: The hon. the Premier. Premier Wells: Mr . would like to answer L19 May 18, 1990 Speaker, I some of thE! Uo 1 XLI comments made by the hon. ME!rnber, and explain to him why, again, his position is without foundation. If he is talking about the students, let me tE!ll you tht::~ source of help for the students . If it is students travelling frorn coastal communities in Labrador they get the benefit of the air subsidy anyway, that the Government pays to the general airlines.

Students travelling anywhe1ne in Lab1nado1n, or f1norn Labrador to the Island part of the Province to attend university, get additional grants because of the additional air travel costs, add~tional direct grants to make up for the additional air trav e 1 cost, over and above what it costs ordinary students . That is pal"t of the program, too, Mr. Speaker . Mr. A. Snow: On a point. of ordE!r, Mln. Speaker. Mr. Speaker: On a poi~t of order . Premier Wells: order? On a point of Mr. A. Snow: Yes . Premier- We 11 s: If he argue, but it is not a order. lAJants to point of Mr.

Speaker: The hon. the ME=!rnber for Menihek on a point of order. Mr. A. Snow: There is not any program available that I am al!Jc'tre of. Maybe if the Premier could elaborate on the particular program which an -individual student could avail h'.imse1f oF to travel to the Island portion of this Province to attend a sick mother, or that typE! of Lh'.ing, maybe he could tell lnE! and this House . Mr. Speaker : Order, please! No. 37 R19

There is no point of order. The han. the Premier. Premier Wells: Mr. Speaker, I wi1.1 start again wi t.h the answer to the question. Students in Labrador get additional grants over and above that which students on the Island part of the Province get, specifically because of f..he additional travel costs for students in Labrador. That is part of it. The Student Aid Program: they get additional grants over and above the amount of student grants because of that. I am told that that is part of it, Mr. Speaker .

As we1l, in terms of travel on coastal Labrador, as I pointed out earlier, the Government 1s general subsidy to air travel on coastal Labrador applies. As well in terms of medical needs, if the han. Member is talking about the people who cannot even affor·d any kind of travel and do not get the benefit of the income tax benefit, the Department of Social Services pays the total cost of travel to the Island for medical needs. So all of these bases set Forward by the hon gentleman opposite arE!, as noted, without any foundation, in fact.

The people of Labrador are being very fairly treated and the Government wants to be fair to all i.ts people. We are committc.,.d to fairness and ba1ance for al1 people in all parts of this ProvinCE!. Mr. Warren: (Inaudible). Mr. Speaker : Order, please! The Chair heard a comment from the Member For Torngat Mount~ins again, and thE! Chair has asked the Member for Torngat Mountains to refrain from interrupting continuously, but the Chair will L20 May 18, 1990 Uol XLI ask the han . Member to withdraw the statement that he made. Mr. Warren: Withdrawn, Mr . Speaker. Mr. Speaker: The han. the Prerni"=~r .

Premier Wells: Mr. Speaker, the other thing the hon. Member mentioned in his repres~.::~nt.at .oion is that I needed geography les sons about Labrador. l...et me tell Lh1 :! hon . Member, in the las t tl.uo ye•ar s I have been in every single community of Labrador wi thou t exception, and I haVE! gr•ave doubts that the han. ME!rnber has bN!n there in his lifet:ime - in QVory single community of Lab1~ado1n Fl"OITI Nain right down around to l:h"=' coast and inland. Not.~J, M1~. Speaker, I don 1 t neE!d a geogr·aphy lesson from thE! .han. ME•rnber on Labrador. Maybe, I could g'ive him one. Thank you, Mr.

Speaker. · So~e Han. Members: Hear, hear! An Han. Member: (lnaudtble). Mr. Speaker: Order, please! I have asked for order! The han. the Opposit.ion House Leader. Mr.

Simms: I, too, haVE! a petit. ion on be h a 1 f of a n u 111 be 1n oF residents from the community of Nain in Labrador, and the p1"aye1· ' of the petition is the same as the petitions which have been presented already this morning with respect to the decoision by the Government to cut ba ck th e Labrador Travel Subsidy Progr am, and I want to rise to present thE! petition on behalf of those people from the community of Nain, basically to respond to some of thE! things that the Pr·~:!JWi<c'r has just me nt.ion"='d notAl in rebutt.al to No . 37 R20

the points raised by my colleague. An Han. Member: peti U.on? Is this a new Mr. Simms: Yes, it is a new petition from the community of Nain. The points raised by my friend from Menihek, who I believe raised very good points, certainly sincere points, and points with which he would be more familiar with in terms of them being actual concerns expressed by lnE:'sidents of Labrador, being an individual t.uho not only represents a Labrador constituency, but an individual who is in his Labrador constituency every single week of the year.

I guess from talking to him and from talking to my colleague for Torngat Mountains, if there is one issue in Labrador upon which the residents of those cotnmunit.ies have a grievance t.~.ri th this Government, it is on this entire issue of Labrador travel.

I also believe that the- people of Labrador, as well as the people on the Island portion of our Province, are beginning to see through this fairness and balance statement that the Government opposite keeps throwing out, in the hope that somehow it will stick in the minds of the people of the Province, that is why they continue to say fairness and balance, because they think by repeating it over and over again people will eventually start to believe it in their own minds.

I can say to the Members opposite that the people of Labrador, in this instance, because of this cutback in the travel fund, certainly are beginning to see through that statement which is continuously made by Members opposite. They are beginning to see through it quite clearly. Now the Premier, in responding to L21 May 18, 1990 Vol XLI the last petition, made a comment: that there were extra funds for studE!nts above and beyond t:.he Labrador Travel Program, and he talked about some funding being available through the Student Aid Program to assist. them.

Well, that 1 s one thing for students who are attending post-secondary institutions, that 1 s one thtng, but what does that have to do with an individual young person o1n whomever who may have to comE! ·to the Island for 1r1E!dical att.E•ntion or whatever the case might be, there is no E!Xtra funding p1nog1narn available for those peoph' and that 1s the point the Member for Menihek and the Member for Torngat Mountains and thE• peoplE!, the residents of Labrador are trying to make to the Government.

The PrE!mier s eerned as if hE! lAJE!Jne grasping at strat.us to giVE! som1~ kind of rationale for this dastardly deed that the Government has implemented and imposed upon the people of Labrador, when he brought up that if somebody needed some transportation assistance they could go to the Department of Social Services, Yes, and so they can, if they are clients of the Department of Social SE!rvices. and the point here is we are not necessarily talking about clients of Social Services, tAle are ta1king about people of low to moderate income, low to medium and moderate income, t.1.1ho have difficull:y in paying the cost associated with travelling from Labrador to the Island for rn~::~dical reasons or whatever the reasons. w(:~ are not talld.ng about social assistanCE! recipients.

Because social assistance recipients anywhere in the Province, if they are clit :•nts of Social Services can get that kind of help, so that is nothing extra for the residents of Labrador. No. 37 R21.

All you have to do is look at the cost of an airfare frorn, for example, Wabush to St. John • s and return, $724 for one trip, Mr. Speaker.

The other point I want to make, of course, quickly, is that it took one-third of the Cabinet, they set up a Cabinet Committee of five or six Ministers, almost, fully one--third of the Cabinet, for six weeks, a month and a half or whatever it has been, to make a decision to reinstate $100,000 from the sports aspect of the travel fund that we are talking about, but to continue to confirm the decision that had already been made by the Cabinet to eliminate the full $400,000 travel program that they eliminated in the Budget.

So I do not think it says much for the Cabinet process other than, because of the persistence of the Member for Torngat Mountains, the Member for Menihek, and the people of Labrador, because of their persistence, this G~vernment once again has had to backtrack on a decision that it made in its Budget. It decided to eliminate the Sports Travel Fund of $100,000, now it has decided to backtrack. So we are halfway there.

Hopefully, the people of Labrador, through its representatives, will continue to be persistent and push this Government into realizing what a negative and dastardly deed they have imposed _upon the people of Labrador with this other decision. It is interesting to note as well that the other two Labrador Members on the Government side were not even here this morning to respond. An Han. Member: That's unparliamentary. Mr. Simms: I withdraw . L22 May 18, 1990 Vol XLI Mr. Speaker: Order, please! Some Han. Member~: (Inaudible) . Mr. Speaker: Order, please! Order, please!

The Chair wants to make it clear, again, the proper procedures of operating in the House arE! : if an han. Member from either sidE! has heard unparliamentary language or something that should be withdrawn, then the ME!ITibE!ln shou]d rise in his place and say so. I do not know what went on, just that it was not regular. I hea1nd the Opposition House Leader say that he withdrew. So if he did, I trust that satisfies han. Members. I was pointing out the proper procedure. Mr. Walsh: A point of order . Mr. Speaker: A point of order. The han. the:~ Member for' Mount Sd.o - Bell Island . Mr. Walsh: Mr.

Speaker, I am not sure where both Members are today. ' But I do know that one of the Members for Labrador, who has been referred to here this morning, is Chairman of a Committee of this House and is travelling with co llE!aguE• s frorn that side as well to ano'i:.hl?.r part of this country on business for this House. I have hea rd t.tJJO references this morning to his absence. That is not correct . It is not fair to the Member involved who is away from this Charnbl"!r on the business of this House. They know that, Mr . Speaker. rt is truly unparliamentary what tAlE! arE! hearing over there today. Mr.

Speaker : The hon th~:! Opposition House Leader. No. 37 R22

Mr. Simms: To that potnt of order, I do not want to take up the hon. Minister of Social Services' ·tim(,~. It comes out of his five minute speaking time on a petition. So I will not E!Ven respond to that. Mr. Speaker: order. There is no point of The han. the Minister of Social Services . Mr. Efford: Thank you, Mr. Speaker. It was . almost as bad as last night when I started to speak everybody lefl the House over there.

I wouJ.d like to make a couple of comments because I genuinely believe that thE! two Membeins fain Labrador really believe in the process that they are going through to ·try to get the Labrador Air Subsidy put back into place. There is no doubt that they really believe it.

But I am surprised that both Members for Labrador of all the other problems that are facing the communities of Nain, Sheshatshit, Davis Inlet, and aLl the other social problems - not once have they stood in their place in the House of Assembly and prE!sented a pE!tition on bE!half of all the people in those particular communities, and highlight the social problems that those people are having. Are the Members for 1 Labrador actually saying that the 20 per cent air subsidy that was taken away is thE:~ most impointant issue facing the people on the coast of Labrador?

With all the other social problems, the alcohol problems, the child abus(:~ problems, the youth correction L23 May 18, 1990 Vol XLI problems, all the social problems just in one community alone in Sheshatshit and t:he othr:'r cornrnunity, Davis Inlet. Not. once has there been a petition presented in this House of Assembly in this sitting concerning the social problems. In fact, Mr. Speaker, the Member for Torngat Mountains - Mr. Warren: On a point of OindE!r, Min . Speaker . Mr . Speaker: the hon. thE:' Mountains. On a point of order, Member for Torngat Mr. Warren: Mr .

Speaker, the Minister of So cial Services is misleading this Hou se. I presented a petition in this House from Davis Inlet concerning health care. Mr. Speaker: of order. That is not a poJnt. The hon. the Minister of Social Services. Mr. Efford: Mr . Speaker, he st .i.ll does not understand the problem s on the Labrador Coast. He wa s supposed to be representing the people for ten year·s '.i.n Noin t.hen1 Labrador, the MinistE!r' representing Northern Labrador affairs and hE! sti 11 do E•s not understand lhe soc ial probl t'lns on th e coast of Labrador. Mr. Speaker: Order, pJ.ease! I remind the han.

MinistE!r of Social Services that IJJe are on a petition and that the Member shouJ.d restrict himself to the material allegations of the petition and speak to it. Mr. Efford : I agr ee , Mr . S pea k e r . I IA.Ja s do i n g that because No. 37 R23

the relationship was brought in by the Member for Menihek when he said that it was the most important thing or serious thing facing the people of Labrador the air trauel subsidy - and I was trying to point out to the Member that that is not so. There are many, many other problems on the Labrador coast that we should be emphasizing. And this Gouernment- An Hon . Member: You are challenging the Speaker's ruling . Mr . Efford: I am speaking to the petition. And this Gouernment had already put together two commi t.tees.

One cornmi ttee to deal with the problem of air trauel subsidy, we haue alr~ady put together another committee of Ministers to look into the social problems on the Labrador coast, something that was neuer done by the former Gouernment. And ·we will, when we go down to Labrador and w'hen we meet with the people from Dauis Inlet and Nain, discuss their financial problems, discuss their social problems, discuss the problems that they haue in trauelling out of Labrador.

And as -the Premier pointed out, anybody on the Labrador coast in those communities who need cost, for argument sake, on medical trauel, they haUE! to come to St. John's to the hospital and they meet criteria of social assistance whether they are on social assistance or whether they are on low income. If their income leuels meet the criteria of the Department of Social" Seruices we will pay ·the full cost or we may pay fifty per cent of the cost of trauel into the hospital in St. John's depending on the criteria of their income.

So, this GouernmE!nt is not closing the door on the subsidy or the L24- May 18, 1990 Vol XLI cost of people getting into the Prouince. We are wi 11 i ng to help out . But what l~Je are v.Jil linq to do is look at the whole problem and treat people equally and fairly. If it is not just dealing with one particular program, we look at the whole social progtnam down there, and that is what I suggest to both Members from Labrador. While they are on the Opposi U .on bring your concer ·ns to GovernrrH :!nt as what you see as a social problem in that particular area, not just to deal with one particular thing.

You had thr::' opportunity when you were a Minister in Gouernment and you did nothing about it. Nol~J you arr: :! on the Opposition and the only l:hing that you should be doing is highlighting the problE!Ins and lJJE! are willing to listen Mr. Speaker . Mr. Speakec: Order, please! The han. gentleman 1 s time is up . Mr. Efford: Thank you. Mr. Speaker: The han. thE! ME!rrtbr :!t" for Torngat Mountains . Mr. Warren: Thank you uery rnuch, Mr . Speaker. I want to support this petition, Mr. Speaker. I think that it is uery unfai1n that the Premier would giue facts to this House that arE! rnislr:~ading .

I will just giue you an example. The Premier said the people on the coast of Labrador were alr eady being subsidized in trauel. That is incorrect. Labrador Airways is subsidized not the individual person. I say to the hon. gentleman that -:it costs $8l.ll from Nain to St. John's. An Han. Member: (Inaudible) . No. 37 R24

Mr. Warren: ·--·---·----··-- I beg your pardon? An Han. Member: It would cost more than that if Labrador Airways was not subsidized . Mr . Warren : Exactly, Mr . Speaker. You are subsidizing Labrador Airways, you are not subsidizing the people who are travelling back and forth. They are still paying $214 from Nain to Goose Bay, they a1ne still paying it, Mr. SpE!al<eln, and it still costs $814 to St. John's. I think that it is very unfair for the Premier to be told things by other Ministers that he is not aware of.

And the second thing the PrE!mier said was that students get more assistance coming out From Labrador than other students do. That is incorrect. That is incorr10:1ct, Mr. Speaker! So, those ar~ two facts that the Premier gave today that are definately incorrect. NolAJ, Mr. Speaker, all this Government has to do is reinstate this program. Think about the senior citiH1ns who live on a low income, that he or she might want to com10:1 out here and visit their son or daughter. Mr. Speaker, the senior ci tizr:!n, as of now, cannot save $173 any longer.

Think of those who are not on social assistance who want to come out and visit their sons and daughters, who arE! not working with Government or large corporations. Think of those people. Mr. Speaker, in Labrador, there are roughly 33,000 people; 15,000 of thos10:1 do not comE! under lAJhat the PrE!mier was spE!aking about today, they are eliminated altogether. What the Pr10:1mier has done today is he has divided l:hE! L2S May 18, 1990 Vol XLI people of Labrador. He has divided the rich and thE! pool", and it is a sad day, Mr. Speaker.

I am gJ.ad tJJe have the dr:1moc1"acy class from Ascension in the gallE!ry, because I think today they saw thE! PrE!mie r of this Province at his best in democracy, showing fairn~;:~ss and balance. Is this what he calls Fairness and balance to the people of Labrador? Today, by l:his action, the PI"E:~rnir:~r has cl:i.vid~;:'d th~;:~ rich and the poor· and I say, Mr. Speaker, the Premier will go down in history as the Prr:Hnier tJJho has made the 9. 3 milc.;!s, th€~ gap dividing Labrador and thE! Str·ai. ts arE!a, much wi.detn. Thank you V(;!t"Y much. Orders of the Day Mr. Baker : Motion 2, Mr.

Speaker . ·On motion, that thE! HousE:~ rE:~so1VE! itself into Committee of the Whole to consider CE:~rtain lnE!SOJ.utions relating to guaranteeing of certain J.oans uncletn The Local Authority Guarantee Act, Mr. Speaker left the Chair. Committee of the Whole Mr. Chairman : Order, please! Resolution That it is expedient to bring in a measure furtht::'r to amend rhe Local Authority Guarantee Act, 19S7, to ptnovide fotn the guar·an·tr:1e of thE! r~;:~payrnent of loans mad(;! to, and the advance of loans to certain No. 37 R2S

Local Authorities . Mr. Simms: Mr. Chairman, if I might, before the Minister of Finance introduces his resolution. Mr. Chairman: The han. the Opposition House Leader. Mr. Simms: Just before the Minister of Finance introduces his resolution, I wonder if we could establish some ground rules for debating and so on. I am not sure, off the top of my head, what is in the Standing Orders, but the Government House Leader and I have had a brief discussion, and the t~:1n-minute/ten-minute thing we use in the normal EstimatE!S debate seems to be the most workable and the most productive.

I wonder if we might be able to agree on that of course, giving the Minister fifteen minutes to start, and whoever responds fifteen, but for the normal part, ten and ten. The other thing, of course, we should be aware of is the long-standing tradition in the House when you are debating money resolutions, that there is a lot of leverage given with respect to relevancy - I think there always has been - by the Chair. An Han. Member : Leeway . Mr. Simms: Leeway . .AlL.!i..9~ Memb_~_r:: Not leverage . Mr.

Simms: Well, some leverage, too, as a matter of fact, but certainly lots of leeway with respect to the relevancy rule. I think it is long-standing, since it. is a money Bill, you can dis c us s whatever you wi s h . It is up to the Chair. Mr . Chairman: The han. the Minister of Finance . L26 May 18, 1990 Vol XLI Dr. Kitchen: Mr. Chairman, this Bill is really adding to thE:'

schedule of The Local Authority Guarantee Act, and what we want to do, really, is to amend the Ac l: by adding to the

schedule a number of guarantees to loans which haVE! been arranged by municipalities for various things under the authority of the Gove1nnment. For example, the town of Arnold•s Cove has borrowed $20,000, and what l:he guarantee does really is enable the totAJn to have their loan guaranteed, principal plus interest. Then, when the projE!Ct for which it is authorized is completed, it is set up as a long·--term loan unde1n th~:1 NMFC, t:h(' Newfoundland Municipal Finance Corporation.

It. is l:h~;Hl paid off over a period of timE!, partly by the town and partly by the Department of Municipal Affairs, through subsidies, until l:he Joan is finally liquidated. Mr. Chairman, I do not bel: l.eve it:. is necessary for me to spoak rnuch longer on this. The cornrnunities for which the loan guar·antees are listed in full detail, and the proposed term is also listed. Mr. Chairman: The han. l:he Mernber for Mount Pearl . Mr. Windsor: Thank you, M1 ~ . Chairman. This is the first t.·.irne I have had a constituent forget rny District.

I want to take just a mornE:'nt t:o address this particular Bill introduced by the Minister. It really is a straightforward pi~~ce of legislation, rather JnouU .nE!. This is a Bill that comes before the House eVE!ry year to giVE! effect to loan guarantees issued by thr:1 Province to Municipalities across the Province. No. 37 R26

First of all, I want to ask the Minister of Municipal Affairs, when are we going to see ·the list of all the projects for this year? I know there tJJas some approval given earlier in the year for some of the projects, but I do not believe all the projects have been announced for this particular season, of water and sewer. Is that correct? There is still more to come? An Hon. Member: (Inaudible). Mr . Windsor: There is no more to come. All the money has been issued. Okay. So we will obviously see another Bill next year to give effect to those. Mr.

Chairman, thE!rE:~ is not a great deal that can be said about this particular Bill. As I said, it is really quite straightforward, {~uite routine. It does guarantee to Municipalities the funds required to rep-ay loans. The only question I could· ask would be to the Minister - An Han. Member: There is not much in it, is there? Mr . Windsor: There is nothing in it, no. There is nothing exceptional in it - routine. I do not think we need to take a lot of time of the House.

I want to ask the Minister of Municipal Affairs again, because there is nothing in it from a finance point of view, a straightforward guarantee of loans to municipalities that borrow money that provide water and sewer services. I should make note, particularly for the young people in the gallery, that whE•n the Minister of Municipal Affairs gets up and L27 May 18, 1990 Vol XLI makes these great announc( :!ITIE:~nts about all. the mon~~Y they are spend'.ing on wah'l~ and setJJer·· thi s year, they ai~E! not s pE:1nding a penny.

All they are doing is giving Municipalities approval to borrow money for water and sewer. There is no grant component to these projects . An Han. Member: 20 per CE!nt . (Inaudible) pay Mr. Windsor: They pay 20 pel'' cent maximum of gross revenues collected toward their debt servicing on water and sewer·, that is right. But the1~e '.is no grant component in the announcements that are made by the Minister. When the Minister announces $2 million has bE:~en approved For water and setAJel" in the St. John 1 s urban region, that "is a loan to thE• City of St. John 1 s, 01~ to thE!

City of Mount Pea1nl, Ol" whichE!Uer municipality it is in. When he announces $300,000 going into Bay Roberts, it is a loan to t!Je town of Bay Roberts . What t.his guarantee does is guarantE!BS that. if ·the municipality can • l: pay t.he money back, the Province wi1.1 do so on their behalf. As the han. Member pointed out. the program has been to municipaJ.i U.E:~s that they w:l] 1 not be expected to pay on debt servicing more than 20 per cent of the gross revenues collected by the municipality. What I would like to know from the Minister of Municipal Affairs - I am sort~y. He is leaving notJJ.

Oh! the Minister of Finance is gone too. Maybe sornc:~body couJ.d ansl.~.Jer me. They are all gone out into a huddle now. Has any thought bE! en given to reducing that subs:idy guarantee? Has any though t be en given to reducing it. or No. 37 R27

increasing the amount from 20 per cent and making it higher, so that municipalities have to pay a greater percentage? The Minister of Municipal Affairs has been quoted many times as saying Municipalities haVE! to bear a larger share of the burden of financing services in the municipality. I do not think anyone will take too much exception with the concept. I think it is a matter of application and a matter of degree, and the matter of the municipality 1 s ability to pay. Now, the concern I would like to get into, and I t~.rish the Minister of MunicipaJ.

Affairs was here, because he and I talked about it privately. The Premier is paying attention, and I am pleased t~.Jith that. The problem we have in this Province is that the cost of servicing in municipalities is not equal in all municipalities. Some municipal1ties can provide a water and sewer system for, say, 500 people at a cost of about $10,000 per house. In other municipalities we have seen the cost go to $100,000 and $150,000 per house. An incredible cost in some of the rural and remote parts of the Province, depending on soil conditions. If you are building on solid rock, you have a serious problem.

The Minister of Municipal Affairs and I have had some private and personal conversations in more relaxed times over this, and he knows what I am talking about. But I rea 11 y do , o n c e a g a i n , wa n t to urge this Government to consider the concept of the level of servicing that is appropriate and that is affordable in various municipalities.

And I think we really have to look at, and I think the Minister will agree with L28 May 18, 1990 Vol XLI this, because he has so many times said municipalities haVE! to bE!ar a larger share of the burden of providing services, the conCE!pt of capital improvement assessments . Where an individual owns a piece of property and water and sewer services are provided, thE!I1 a capital improvement assessment should be placed on that lot so that person, that property owner, pays a fair share of the costs of that servicing.

Because once you service a lot with wat., ,}r and sewer, the value automatically increases by $10,000 to $15,000 instantly, the moment t~hat. those services are available. If you alnE! on a huge lot, if you happen to be in a ruraJ. community of Newfoundland where you have EdghL or ten acrE!S, as you might t/JE!1.1 down in Dunville, and the water and sewer services go in front of your lot, not only are you increasing the value of your own home and the services Lhat are provided to it, but you hcwe probably created eight or ten building lots, fully se1nvj ced, which could be sold.

I would say, in the town of Dunville a building lot would sell for $10,000. A reasonable guess, $10,000? So, i.f you happen to own ten of them, you have just picked up $100,000 on the backs of the taxpayers, first of all of the pE!ople of Dunv:ille, but if the debt bu1nden is gJ"eal~er than 20 per Cl'::~nt, on thE! backs of the people of the rest of the Province. So, this is something I think we really must be looking at. It would be interesting to see how much of this debt will actually be repaid by the Province.

In how many instances are we payi ng back debt which was essentially used to provide people with a much more valuable pit::1ce of propE!rty which, in rnany cases, they 1nay have sold No. 37 R28

and made a profit from? I think all people in this Prouince, all taxpayers in this Province would object to that. Th~ program the Government has, the concept of it, the theory of it, is to provide a reasonable level of service to all Newfoundlanders and Labradorians, and all Newfoundlanders and Labradorians will chip in there and assist, to a certain deg1nee, those municipalities which have an essentially higher cost, and who need a little bit of service to spread the burden as much as possible over the Province.

But we must be very careful to ensure that there are not individuals out there who are profiting from the::' fact that these services are being provided. I think the Mayol" of Dunville, or the former Mayor of Dunville ·-- he is no longer the Mayor I wouldn 1 t think - the former Mayor of Du.nville, who served as Mayor and served very well for many years, knows exactly what I am talking about, and this is a problem which all municipalities are facing. I also, once again, want to emphasize to the Minister, and he knows what I am talking about, that we really haue to look at the leuel of servicing.

We do· not neE!d the cadillac wate1n and sewer services in all municipalities in this Province. We had municipalities in this Province when I was Minister of Municipal Affairs, in 1979, like the town of St. Phillips. The Mayor of St. Phillips at the time, Mr. Tucker, came in and he said we like our community the way it is, we don 1 t want it fully serviced. We don 1 t want to have another Mount Pearl in St. Phillips, we don 1 t want that level of servicing, we like L29 May 18, 1990 Vol XLI the I"Ura1 servicing.

What we lAJant are planning controls to ensure that WE! do not haue so rnany homes built there that it is impossible to service them with well and septic tank. And this is always the danger. I t hi n k they h a v e s t u c k wit. h that , and the tou..m is progressing well. I compliment the town of St.. Phillips because there is no in bettAJeen. You plan so that you <H'E' a rural community which can be serviced by well and septic tanks, and that :is an accepti::AblE! systc::~m properly done and properly designed, properly installed and maintained, septic tanks primarily.

That. is an acceptable system, but once you get c-.lway From that, once you start doing as has happened in Conception Bay South, and this is what happened in Conception Bay South: so much building took plac1:' that eventually honws became closer and closer and closer together, where everybody 1 s well tAJas being polluted by th~;!ir nE•xt. door neighbor 1 s septic tank, and we had a major environmental problem.

We have spent $35 million or $40 million on Conception Bay South; we haVE! another $70 million to $100 million that will have to be spent the1ne yet before all of thoSE! hornE:'S are prope1nly serviCE!d, and the totJJn of Conception Bay South wil.l never even pay thE! intE!rest on those loans. So we cannol allow that situation to take place in other parts of the Province.

And it comes from proper management and proper planning and control in those municipalities, and that is the key, I say l:o the Minister of Municipal Affairs, in ensuring that we do not build a debt in future year·s that is really going to stagger the Province. No. 37 R29

There is really nothing in it from a financial point of view, but I just make those points for hon. Members and l1on. Ministers. I would hope the young people in the galleries learned a little bit about the financing that goes into their municipalities, and how they repay it, and the role they play as private citizens. ,§_<;>me Han ... Memb~r.2.: Hear; hear! Mr. Chairman: The han . the ~inister of Municipal and Provincial Affairs. Mr. Gullage: Mr.

Chairman, as the Member has said, and the Minister said as well in introducing this Bill, the Municipal Financing Corporation is used as an instrument to provide long-term debt to be able to finance water and seWE!r and roads over a longer period of time, usually fifteen to twenty years, using debentures within the Corporation.

In fact, in the first instance we use bank financing mostly to start the project and bring it to a point where it is complete, or substantially complete, and then the capital interest to that point is capi taliZE!d and rolled into the Municipal Financing Corporation where we use debentures to put it on a long.,...term basis.

It is not entirely correct to say that the Province does not contribute in a substantial way to the debt of municipalities as far as water and sewer and roads are concerned, because certainly we do. 0 n e of the things that was rather interesting, when we had a recent review of all grants and all incentive programs to municipalities done, all the ways we assist municipalities, we askE!d the consultants along tAJith our own financial people to review every L30 May 18, 1990 Vol XLI program we had within our Department and advise us as to where changes should take place and how better we could address the needs of municipalities and assist them with their revenues, debt, and so on .

The results of that were very interesting. I guess the key point was thE!Y pointed out the differences between, not that it was any great secret, but they pointed it out in some detail, by giving us a financial analysis of every community in the Province after having done a pilot group, an initial group which they used in their initial calculation, some twenty-five communities of varying sizes. I then asked th em to tak e the entire Province, all the municipalities and run them all. Having had the computet" programmed, of course, and all Lhe work done, it was relatively E!asy to do that.

But what it poinl:ed out, of course, is that tAle haVE! communities of 0arying kinds throughout the Province. WE! have some communities which are really in dire straits, in a critical situation in need of servicing. You have heard we speak many times about the difficulty of our tE!Inrain, topography, and being able to provide wa ter and se wer services, particularly on the coast line where, in most cases, it is solid rock. We have communities like that which have very little industry, soml':~ of them, very little business, and they are relying on a vet"Y small amount of revenue to survive.

I suppose you could say that is on(;! category of communities which will probably for a long time need provincial support, need doll~rs from the Province in a greater percentage, if you loike, l:han other communities. No . 3 '7 R30

We have another broad category of communities somewhere in between, which have some industry and some business, but nothing compared to some of the large1n centres in the Province which are relatively well-off. They, too, need assistance, but not to the same degree as the first group I mentioned. Then we have a smaller group of communities which are very well-off, self-supporting in some cases. I could use St. John 1 s as an example of that, where we do assist them behind the scenes with incentive grants, tax incentive grants, and other kinds of incentives, but they are substantially self-supporting.

Last year, for example, rather than use provincial borrowing and impact upon rny announcement of a Capital Works Budget of some $58 million, rather than impact upon those dollars and take dollars away . from other parts of the Province, particularly r.ural Newfoundland where the need is most critical, I asked St. John 1 s if they would go to the market and do their own borrowing and free up the amounts that would have been included in the provincial borrowing for other communities.

Because they could do that, and they could access funding on the market and be accepted because of their situation, their good revenue base, the fact that they have substantial residential revenue as well as industrial and business revenue, because of the assets they have in place and the relatively low debt, they were able to, in fact, go to the market · on their own and they have done that. Provision Province challenge L31 of services in provides a compared to any this unique other May 18, 1990 Vol XLI Province in Canada.

We have so many communities in need of servicing that indeed we do have to look at other ways of providing the servicing, except very expensive water and sewer systems. So we are considering locations in the Province where a well and a septic tank would be adequate. Mostly, mind you, it is away from the coast of the Province. It is very difficult to work on the coastal part of the Province u..Jith artesian we1ls, Fo1n example. It is VE!ry difficult to drill them in many locations. but certainly we arE! looking at. othE!r alternatives for servicing, as long as the lots are large enough.

Because we have had problems in Lhe past where communities have come to us and said, Let us proceed with water and sewer on the basis of a tAIE!ll and a septic tank. t.uhethetn it be artesian or a dug well, and, thE!n, before you know it, in -fill is starting to fake place and the wells are becoming polluted. It has caused terrific problems almost everywhere I can name in the Province . It is okay in thE! first instance to say it is a11 right, a well and a septic tank wi 11 suffice . but u n 1 e s s thE· lot itself is large enough problems will occur in the future.

Councils promise, of course, that they will never all.ow in- ·fi11 and everything will be fine, but . wE• know what happens; in-fill takes place, it becomes more congest:ed than they say it is going to, because people demand it, oF course, every piece of land has to be occupied. But the only real way to provide a service that is going to bE! safe and is going survive into the future without pollution, is regular water and sewer systems, which are more expensive. But I No. 37 R31

do believe we can consider a well and a septic tank situation if we can come up with a larger lot size. and we are looking at that. Right now, of course, what mostly happens is people go to the ·Departments of Health and Environment when they are looking for approval, and they end up asking for the minimum, less than a half acre lot, and this is just not working. It is working in some locations, but in the main it is not working. And I have been encouraging a lot of the mayors in particular, and their councillors, to consider having larger lots.

If they are going to come to us looking for approval, we don't want to be caugh ·t five years from now, as we are now, trying to correct bad decisions which were made in the past, where we have allowed wells and septic tanks in locations with lot sizes that are just to small. We are going to address, of course, the problem with. them. We are addressing them with the amalgamation procedure to a large degree, to a very large degree, because the importance of planning is the number one reason for considering amalgamating communities.

I stand to be corrected, but I would say of the forty-three groupings in the amalgamation process, at least half of them are situations where smaller towns have grown up around a larger community, a larger town or a larger city, as a result of people wanting to go away from the more expensive tax base, if you like, higher taxation, and go aut and purchase a lot nearby that is less expensive. To give an right here Mount Pearl councillor example in the area, if on the close to horne, St. John's you talk to a St .

John's L32 May 18, 1990 Vol XLI Council or the Mount Pearl Council, just to use two oF those as an example. thE!Y will both te1.1. you that where once the exodu s was out of St . John's, out into the surrounding communities, people were saying, Wel1, I can't afford to have a lot in St. John's, so I am going out to wherever it happens to be, in one of the other twenty or twenty-one communities which surround St. John's, now we have Mount Pearl saying it .

Only recently I heard one of l:he Mount Pearl councillors say it is terrible, because people ar e now saying, Oh, I am not going to build in Mount P.:~arl, because I can get a lot cheaper in another community outside St. John's and Mount Pearl. So it goes on and on, and the next thing you know young coupJ.es from Paradise getting married are saying, Well, I am not going to build in Paradise wherE! my parents are, [ have to go to Conception Bay South, or I have to go to Holyrood, or whatever.

So, you see, there is a natural movement away from the areas where the taxation is a li.tt le bit higher but where the service s ar1 c! provided. Of course, we can 1E!t this go on and on, and let communities and people go out into the countryside, and let ribbon development happen all over the Province Mr. Chairman: Order, please! The hon . the Minister's time has elapsed. Mr. Gullage: - as certainly ha s happened . There is no question, Mr. Chairman, that we have to make changes, and the key word is we have to provide good planning. Mr. Chairman: The hon. the ME!rnber No . 37 1n2

for St. John's East Extern . Mr . Parsons: Thank you, Mr . Chairman. I couldn't let this Bill go by without having a few words to say about municipal planning. Mr. Simms: You let the cat out of the bag this morning, boy! Mr. Parsons: I know in my own constituency we have problt:~ms, and, I suppose, some of the problems are not easily addressed. It is fine to say we are not going to spend money for a lot of different reasons, but I know in my district alone, where the need is great, again because of in-filling, because of poor planning before even councils took over - Mr . Simms: In the Liberal days. Mr . days.

Parsons: In Yes, indeed. the LibE:1ral we are now faced with · a big problem, a much larger problem. I have some feelings myself on what transpired. I was part of that process for a number of years, in one small town. I lAiill just relate, first of all, Mr. Chairman, to this year's capital grants. In Pouch Cove, which is partially serviced, I think close to 80 per cent before they took over Shoe Cove, which is now Pouch Cove, but at one time was a small town with its own identity, the percentage serviced is now about 64 per cent. But, again, they have problem areas.

This was done before the inception of the town council in Pouch Cove, especially on the Bauline Line area, where there are real problems as it pE!rtains to sewage and water. There · are no ifs, ands L33 May 18, 1990 Uol XLI or buts about it . I am at a loss to understand IJJhy this situation has not been addressed by the hon. Minister or his Department officials. Because, as far as I am concernE!d, there is a need there health-wise; it could create health problems for that entire area.

People have been in to see me, delegations have been in to st:~e rnE!, and I have gone to thosE:~ ar·eas whE!rE:! l:he sewage was really corning up through the ground, and twenty-five to fifty feet away there is a fellow's well. I rnean, it was poor management in the first instance, but what can we do now, moue them out of it and pay them for the lots? I mean, certainly they were allowed at that particular time; it all had to be okayed by Health and Highways. I think those lJ.JelnE• lhE· onJ.y two governing bod:i.E!S at t:hat time.

But they were given the green light, and they built their houses with good intentions. Now they find they cannot drink the water - water has to be carried there. The lots just were not big enough. WHat the Minister said is true, the lots welnE! not. btg enough in certain ar~::-as, wh<:!rE! the soil formation cou1.d not abso1nb SE!IJJage to any great extent . Mr. Chairman, I always find wh1 :H1 we talk about water and sewer, especially in rural areas of Newfoundland, especially in lhE! Bays where we have raw sewage gotng into those coves, and I think that there is going to have to be a lot of planning.

I knoiJJ to ge·t treatment plants for euE:~ry small cornrnuni ty, every srnalJ. tolAm is going to be costly, but I also see that enuironrnental1y it rrdght b·e more costly to run that raw sewage in those J.ittle bays. I mean we had in Trinity Bay and No. 37 R33

Bonavista Bay and Conception bay, we had areas where up until perhaps fifteen years ago there was a very large quantity of fish entering right into the wharves and little cubbyholes, whatever, little coves, rises, whatever you want to call them. An Han. Member: Many of our basin harbours are dead now. Mr. Parsons: That is right. And now I thi"nk at onE! place in time over in Harbour Grace - Carbonear they stopped the shE!llfish fishery this year because of contamination.

And, you know, there is a problem out there and I am convinced that if we do not addJness this probhHn now there are going to be greater problems down the road. I am not going to mention the name of the community, · but on my way to work - I have seen it - in the early morning when you can look out in that bay and you can see, get an outline of where ·that sewage is going. And you can see out quite · a distance. You can see hundreds of feet. An Han. Member: ---··-·--·-" ·- Mr. Parsons : Now, I want situation to MunicipaJ. and if I could get (Inaudible) .

In every community . to address that the Minister of Provincial AfFairs his attention. An Hon. Member: It is a very important issue . An Hon. Member: He is trying to get some money from the Minister. Mr. Parsons: He is trying to get some money from the Minister. I know, and the Minister is reluctant to give any monies without - An Han. Member: Except for cars . L34 May 18, 1990 Vol XLI Mr. Parsons: Except wanted to·- address Minister. for this cars . I to thE! Some Hon. Members : (Inaudible) . Mr. Parsons: NIS and cars.

HE! will not give you any money I want to remind the hon. the Minister of Municipal and Provincial Affairs, our Minister of the short and the curly is not going to give out any monies only for cars and to the NIS . What I was saying, Mr. Minister is very simple, that I have grave concerns and there are more than - I t3.m not just speaking For myself because other people have grave concer·ns out thE:~Jne as :it p1?.rl:.d. ins to the rural areas, the small coves, the small tO\J . .JnS that are running raw sewage righ t in Lo their small r·ise, bays and whatever.

Now, somE! of them do have a good dumping system, but I am leery about the whole situation. In fact, like I said, go back Fifb~en years ago when this was not prevaiE!nt, you had Fish corning right into the wharves into th e coves. You could go over · in Trinity Bay right up in Old Shop and all those places right down tho st10re, Di1do, you knot.u. TherE! are two places to speak about . The fish was right into Uw wharves. You could go ove1n thE!re and find cod traps set right to the wharves.

And I arn wondering if because - I arn not wondE!ring, I mean there is some factual experiences out there right now where place s are being contaminated, and I want to ask a simple question . Is it because of this pollution, contaminants, is it because of this l:hat the fish are not ·there . now? I [[I(! an, LI.Je do not know. It has been proven over No . 37 R34-

this past number of months that there is very little we know about the fishery, eVE!n on a scientific level there is VE!ry little known about it. But I will guarantee you, and the Member for Placentia knows what I am tal king about, you can go around to all of those little coves now and you will not find in any instance what was happening there twenty years ago. Perhaps it is playing a role, but you can certainly see in a number of communities that this effluent is causing a problem, and the Minister of Municipal Affairs has to address the problem.

We are going to need sewage treatment plants in every small community, every town. If thE!Y are going to run raw sewage then that ralAJ sewage has to be treated before it enters that harbour or bay. And I hope that the Minister at some time in the future will address that concern. Now, I want to go back again and talk about the town of Flatrock, not because that is my home town, but it was one of the towns that was not funded in this years capital grants.

Flatrock has some pipe in the ground and they were• led to believe at that particular time or they wer·e unde!r the impression, that until some houses or one/half of the houses in the community were serviced then there would be no service charges. Now that is the impression that they had. I did not know it at the time. I was not part and parcel of the council at that particular time but in a Minute of Council this is what it states. They were led to believe that there would be no service charges until the system was in, or part of the system, 50 per cent of the community was serviced.

Here we L35 May 18. 1990 Vol XLI are now tJ.ri.th X number of feE!l:. of sewage and waterline in the ground servicing no one, not a house, and no funding. So it is thE•re in thE! ground. They are having to pay for nothing, not a thing. Even with the $500,000 that was offered by the Minister, if they rose the mil rate to 13 mils, if they had done that, we would still need four more years to get to the first house. The small community does not have a great tax base. When I went and check this ovE!l'' with Municipal Affairs, the property value in Flatrock was approximatE:~ly $15 m:i.J.1ion.

WE! did a calculation on it, and there t.uas no way that could come up to $15 million. Now, believe i L or not Flatrock dE!notes or spells out tJ.Jhat it is, Flatrock. When you go along by the shon! you .. can certainly see where it got its name. But on the back of Flatrock there is a large area of farmland, a very large area of farmland and, I think, that in coming up with the $15 million· all of this was taken into consideration. But farmland shouJ.d not be taken into consideration when the assessment is made. So now they ar·(~ looking over ·- Mr. Chairman: Order, please! The hon. Member's time has elapsed .

Mr. Parsons : clue up. By leave, jusl : to Some Hon. Members : Yes, can·y on. Agreed . Mr. Parsons: What. I am saying ts, now they are saying over there they are going to have another assessment done. In essenCE! what I am saying is that the 13 111ils that the han. Department said that No. 37 Minister's Flatrock R3S

should charge, was never right in the first instance. It was a miscalculation. They never should have said it . Now, they have been subjected to this 13 mil rate, do it, or else you will not get any funding, when in essence the 13 mil rate was not right in the first instance. I say to the Minister now, I ask the Minister now ·to go back and ask his officials to make a new calculation, to come out with a new mil rate based on that calculation. The calculation of $15 million as it pertains to property value in Flatrock is not right. With that, Mr. Chairman, I thank you very much . Some Han. Members: Hear, hear! Mr.

Chairman: Shall the resolution carry? The han. the Minister of Finance. Dr. Kitche ·n: If no one else wishes to speak. Mr. Simms: It depends upon your remarks (inaudible) . Mr. Chairman: The han. the Minister of Finance . Dr. Kitchen: Well, I think I would like to say a word or 'tt.~Jo.

It has already been mentioned, but I would like to stress that lAJhen Government guarantees are given to municipalities for bank loans and they are eventually set up, the principal plus the already accumulated interest, under the Newfoundland Municipal Financing Corporation as a long-term loan with the Province paying off a certain proportion of that loan, and the municipalities being expected to pickup the balance of 40 per cent or whatever it is, there is a fairly heavy L36 May 18, 1990 Vol XLI responsibility on the Province here.

So we have to be fairly careful about the amount of money that we allow com111uni tiE!S to borrow. It is important because it does have a direct impact on Government revenues, as has already been said . AJ.so, I rn:i.ght say that if municipalities keep their tax rates low, - there is also another factor in here and that is the 20 per cent. The obligation, as I understand it, is that munid .palities are obl ·iged to spend no more than 20 per cent on handling their fixed debt. That means that if rates are kept low, then the Province has to pickup not only the Province's shar'(' but also part of the municipal share.

An Hon. Member: How much is the Province's share? Dr. Kitchen: Well., I undE!rstand that the Province's share on so me:! of those loans could be 60 per c e n t , if i t. i s a 6 0 I 40 1 o an , or whatever it is. I am not absolutely ""' An Hon. Member: TherE! ts no cost-shar·ing on water and SE!Waqe ". The r e i s 6 0 I 40 on ( i n c-.1 u d i b h' ) b u t not on water and sewage. rhe only part that the Province pays is - Dr. Kitchen: Alright. . If the municipality is unable to come up with its share of the money, that means thE! Province is caught. And we haVE! l::.o be careful here.

I believe municipaltties must be very careful, l:hat when they put forward these requests, that they are prepared to pay whatever share it is for them. We have to be quite careful about that. The Mr. othr:~r thing I Chairman, was No. 37 wanted to say, that the rnoney R36

"' for this is borrowed by the Municipal Financing Corporation on the capital markets. We put together a Joan the other day, and I think we borrowed something like $25 million. The rates vary from time to time, if it is ten per cent, the NMFC is able to, does charge interest on these long term loans to the municipalities, which is ·the ten per cent at which they borrow plus an additional amount for servicing this loan. There are certain people who are involVE!d in the borrowing of it, and their salaries have to be charged up, and there are a few other little odds and ends.

The rate at which ·the Municipal Financing Corporation borrows is not quite the same rate as the municipalities pay, but it is pr.::1·tty weLl the same, because the differential is very small. fhe main point I want to make is, there is no free lunch here. The amount of money that has to be borrowed has to be repaid, sometimes by the municipality, sometimes by the Government. We have to be very careful of how we handle it. Mr. Chairman : The hon. the Member for Mount Pearl . Mr. Windsor: It is clear that the Minister is not fully aware of the circumstances of municipal loans . It is very clear.

There is no cost sharing program on water and sewer, except for certain exceptional cases. On a regionaJ. basis there have been some gr·ant portion given to the urban r.::1gion system, and there has been some pro~ision made in central Newfoundland on a water treatment plant, because of . a serious, serious problem. These have been L37 May 18, 1990 Vol XLI exceptional things and generally dealt with on a regj.onal basis. But there is no program of p1noviding grants to rnunicipaliU.E!S for water and sewer. There is none whatsoever.

The communi t.y is responsible for one hundred per cent of the cost of that water and sewer, I say ·to the Minister, onE! hundred percent. The sixty/forty program the Minister referred to is a roads program, whro11nc:1 the Province pays sixty per cent of the cost of upgrading roads in the community. And the municipality is expected to pay forty pe1n cent. But on water and sewer, there is nothing. The only component that the Province pays is anything over and abov.E• twenty per cent of gross revenUE! of the municipality. The Min'ister is t:.alld.ng notAl about an additional amount that is charged.

Is this another gu~rantee fee? Is this another guarantee fee as WE! are seeing in Newfoundland and Labrador Hydro? Ah, my bulb is on not.v, so thE! speak~r is finally turned on! An Hon. Member: (Inaudible). Mr. Windsor : Do you want me to say it agairi? An Han. Member : Say it again . Mr. Windsor: The hon . gentlemen are enjoying it so much, they want me to repeat it. But I wiJ.J. not do that, Mr. Chairrnan, I think they heard me, with or without the speaker, Hansard may not have. Mr. Chairman, my question to the Minister is this: Is thE!

Minister now saying that he has somewhere along the way instituted a guarantee Fee on municipalities? Are we now charging municipalities For the No. 37 R37

Fact that the Province is guaranteeing the borrowing for this Province, or is it an administrative fee? I think there always was a small administrative fee, the actual cost of these borrowings. I think we probably did consider the salaries of a few employees in the Department of Finance that dealt with the Newfoundland Municipal Financing Corporation, and any expenses involved as the Minister said, in issuing the bonds required to raise this money. And I think that is right.

Those that are borrowing on behalf of municipalities, the cost includes not only the amount of borrowing, but the actual· cost of doing the borrowing. I do not have a problem with that, if that is what the Minister is saying. I want to be very clear, and I think this House should know, Mr. Chairman. Is the Minister saying now that there is a guarantee fee over and above that, as is being charged now to Newfoundland and Labrador Hydro?

Are we charging municip~lities one per cent for the fact that: the Province is guaranteeing it, that the municipalities are using the Province's borrowing power to g(:1t more favorable interest rates? In fact, to be able to borrow in the market at all, the Municipalities are not ab1e to, certainly not without the Minister'~ approval. Let me ask that specific question to the Minister. I accept the fact that there may be an administration fee, which I hope is simply recovering actual out of pocket expenses, actual costs of doing the borrowing. But is there a guarantee Fee over and above?

Is the Province profiting because they are guaranteeing municipalities in the same way that they are guaranteeing L38 May 18, 1990 Vo1 XLI Newfoundland and Labrador Hydro, and now charging them $10 rnil.J.ion a year for the fact tha L the Province is guaranteeing the borrowings of Newfoundland and Labrador Hydro . Maybe the Minister would answer me that. Mr. Chairma .n: The hon . l:hE! Minister of Finance. Dr . Kitchen: We are talking about the administration f,~e. the cosl. of borrowing thE! loan. The1~e is no guarantee fee as such. I would like to stress, though, whilE!

I arn here, that quite oft en the Government does pick up the amount that municipalities do not pay. With municipalities . restricted, usually, to 20 per cent of thE!ir revenues to pay for fixed debt, quite often the Government has to pick up a fair amount of Lhe charges on loans. I think this should be looked at. It · i.s a serious question. The question is how high should municipal rates be? Should it be high enough to service a loan that has bE!en ·made? If it is not, perhaps t.uhat we have to do is decide whether the Province is going to make grants or change thE! ratio .

But the fact that a Fair number of times, the GovernrnE!nt has to cornc• in and pick up what municipalities would norrna1ly be E!XpectE!d to pay is a serious question. Mr. Chairman: The hon. t:he MembeJ~ for Mount Pearl . Mr. Windsor: Mr . Cha'ir man, I appreciate the Minister's cornrnents there:1, and I think it is an important question. Because thc•re are municipalities in this Province which wi11 never hope - as I mentioned in the case of Conception Bay South, and I do no L say that in a del~ogatOI"Y fashion of Conception Bay South; it is No. 37 R38

something that happE!ned over a long period of time and it is just not financially possible for the town of Conception Bay South to install $100 million or $120 million worth of water and sewer that they need to deal with that health problem and be able to pay for it all themselves, certainly not in the short-term. That is an exceptional problem.

But there are municipalities - and I think this is what. the Minister was referring to - there are municipalities IAJho are not paying their full cost of water and sewer services, who are requiring subsidy from the Province by way of paying off the loans through Newfoundland Municipal Finance Corporation. Some of those are legitimate, as I mentioned in my earlier comments today. Some are legitimate because of the extreme cost of servicing in those particular municipalities.

I think it is fair, and I do not think Newfoundlanders anywhere in this Province would disagree IAiith helping those people receive a fair level of servicing in their community, within reason. What I am concerned about -· and I think the Minister of Municipal Affairs is certainly concerned about it, because he has spoken about it - is our municipalities that are not pay'.ing a reasonable level of taxation; and I say 'reasonable', keeping in mind, not only in comparison to other municipalities, but in comparison with the ability of the people of that community to pay.

It may be fine for the resident of Mount Pearl, who pays, on the average, well over $1.000 per horne in the city of Mount Pearl. Those people who are, generally, both husb~nd and wife, gainfully employed in an urban setting, with a fairly significant income, probably are L39 May 18, 1990 Vol XLI quite able to pay that. If they were not, they would not bE! living there - it is as sirnp'l.:~ as that - they would be lJving in a srrJallE•In accommodation.

But you can't compare that - and I IAiill take a name without trying to single out anybody, but I will use the community of Grates Cove on the tip of the peninsula nea1n Baccalieu. Grates Cove, I know From experience, have had ve•1~y expensive community services, all along. It is solid rock, pi"E!tty well, throughout most of that community, so I am suint::~ the cost of servicing the community ol Grates Co\Jt::~ is qu:i.te high, . and I would doubt ·- I do not knot .. J, I am using it as an E!Xarnple, I should have said Hodgewater Cove or sornC:~thing li.kE! that, but that: doE•s not apply.

I do not mean to single out the communi.ty of Grates Cove for any particular reason, under the circumstances. But perhaps, the community of Grates Cove is being subsidiZE!d, and thE• question would be, what i~; the level of taxation there? Certainly, it is not appJ"opr•iate that the people of Grates Cove would pay the same tax as would the people of Mount Pearl. Where you are talking abou l:.

IAJ<:\tE!r and sewer assessment: Generally, in most communi ties, I think, thC:~ Minister has indical:ed l:hat. in oJnder to get 1.uat.er and seiAJE'l" funding the municipality is now required to impose a tax of $144 - per year, $12.00 per month? I think that is a general guideline. Certainly, that is one that. is encouraged. I am not sure the Minister is enforcing it, or making it mandatory. But what is being paid in a community, the hypothetical community of Grates Cove? Is there $1.00 or $2.00 a No. 37 R39

month being paid, when maybe they should be paying $4·. 00 01n $5. 00? They probably cannot afford the $12.00, depending on the income level of the community. I think that needs to be looked at. I think that is an important point. Now, the Minister made mention of something else, and it slipped me for a moment. There was another point I wanted to respond to in what the Minister has said. Perhaps I will come back to it because I cannot think of it at: the momE!nt. There was another point I wanted to mention. An Hon. Member: (Inaudible) change in the system (Inaudible). Mr.

Windsor: The Minister has talked about changing it, but is he going to change the sy~tem? Is he proposing to initiate a guarantee fee? I now recall the point I wanted to get