VOL. 4 PRELIMINARY UNEDITED TRANSCRIPT HOUSE OF ASSEMBLY FOR THE PERIOD: 10:00 a.m. - 1:00 p.m. FRIDAY, MAY 18, 1979 NO. 35

:•lay 18, 1979 The neuse met at 10:00 A.M. :·lr. Speaker in the Chair. ;.:R. SPEAKER: (Ottenheimer) Tape No. 1432 Order, please! STATENENTS 3Y MINISTERS ~!R. SPEAKER: Hon. Minister of Finance. SD - l DR. J. COLLINS : Mr. Speaker, the procedure involved in paying suppliers of goods and services to Government of necessity can be time consuming. This is due partly to the size and complexity of Goverrunent operations and to statutory requirements concerning the certification of expenditures of public funds.

In recent years the length of time between the receipt of invoices from suppliers and the issuing of the related cheques has tended to increase due to several factors 1 two of the major ones being the overloading of existing central accounting system in my department and the decentralized nature of certain Government departments which require that invoices oe sent to branch offices for certification and returned thereafter to head offices for voucher preparation. The effect of delays in processing of suppliers' invoices has been an increase in their financial costs.

Some of these suppliers, many of whom have, quite understandably, protested vigorously to Government about these delays, have undergone considerable inconvenience when payments have been unduly late. One frequent complaint received relates to the administration of provincial tax statutes which require prompt payment to Government of caxes collected by vendors,with interest and penalties being imposed where such prompt payment is not affected.

Vendors who are also suppliers to ~overnment naturally object to Government on one hand penalizing them for late tax returns 1 while on the other hand refusing to pay the interest on late payments by Government to these suppliers. 3677

:lay 18, 1979 Tape No. 1432 SD - 2 DR. J. COLLINS: The matter of paying interest on overdue accounts has been carefully considered by Government and I am pleased to announce that it has been decided, with effect from April 1, 1979, to pay interest,at nine per cent per annum 1on invoices which are not paid within sixty days of receipt 1 subject to certain conditions as listed below: (

l) Payments must have taken in excess of sixty days from the receipt of an invoice acceptable to the Government, or the delivery of the goods or services whichever is the later;

(2) All requirements of the contract,purchase order or other purchasing authority must have been met to Government satisfaction;

(3) Interest will be paid only upon the rec·eipt of a separate written claim within sixty days of receipt of a late payment by the supplier;

(4) Where an invoicing problem is attributable to the act of the supplie~ interest will be calculated from the date that the problem is resolved to the satisfaction of the Comptro·11er of Finance;

(5) No single claim for interest amounting to less than five dollars will be considered;

(6) This policy will not apply to employees of the public service, provincial crown corporations,

Mav 18, 1979 Tape "lo.l433 ow - l DR. J. COLLINS: agencies or boards. The central accounting system in the Department of Finance is now Under revision and the procedures involving processing of payments will be improved within the next few months in order that payment of invoices will be expedited. It is the sincere desire of government that this policy will help to relieve any inequities which have resulted from the prior policy of refusing to pay interest on late payments by government to its suppliers. MR. SPEAKER (MR. OTTENHEIMER): The hon. member for La.Poile. MR. s. NEARY: Mr.

Speaker, I am rat.'1er surprised and taken aback with this kind of a ministerial statement, Sir, when we were led to believe so often in this House that there was no problem with the government paying its bills. I would suspect, although the minister did not say this, that the main reason for the gover~ent not being able to meet their obligations is not because of the load but because the government finds itself occasionally strapped for money. That is probably the main reason. so, Mr. Speaker, the hon. gentleman did not indicate how much this was going to cost the Public Treasury.

The hon. gentleman must have some figure in mind, some estimate of what this is going to cost the taxpayers, this procrastination. And perhaps the hon. gentleman can give me some ~ea of the financial cost to the taxpayer involved in now adding a 9 per cent interest to invoices that are paid within sixty days. Let us hope, Mr. Speaker, that all invoices for goods and services will be paid within sixty days so that the taxpayers will not be called upon now to pay an additional penalty.

I would have been pleased to hear the minister if he had told us that 9 per cent interest was going to be paid on salaries and wages that are withheld by government for longer than sixty days. I am told that last year some people who worked for foresty, it was three months before they got their pay cheques. Three months! This here .. will take care of the well-to-do again, but it will 36';-9

:-!ay 18, 1979 Tape 1433 [:Sol - 2 MR. S. NEARY: not eake care of the ordinary perso n like ehe people who have to wait for eheir vacation pay , who have eo wai e !or their pensions, who have to wait: for thei r salaries and wages. ! do not ehink the re would be any joy in the sereets of N-!oand­ land bec ause of that kind of a li\LU.seerial. statement, Mr. Spe aker . I".R. SPE;u<ER (MR. ~!MER): '!he hon . Minis ter wi t~out portfolio. MR. W. MARSHALL: Mr.

Speak er, I just want eo, under Statements by Mini sters, i nform everybody in ehe !!ouse as well as the press that the government intends when we adjourn today eo move a :notion that we adjourn until Thurs day nexc - Monday, of course being a stat utory holiday, Tuesday being elec--i on day and the n certain cnembers will be off in ehei r dist rict 1 I "'Ould imagine, during the Fede ral election period.

May 18, 1979 Tape No. 1434 MR. MARSHALL: because many of them are from out of town there will be a day for coming back. So we will be returning on Thursday. MR. SPEAKER (Ottenheimer): The han. member for LaPoile. NM - 1 MR. NEARY: That is debatable. Could the han. gentleman indicate to the House what we will be doing when we come back on Thursday? Will we be doing legislation? Will the budget be brought down? If1 after Tuesday, we are going into a provincial election? Just what will happen? What kind of business will we be doing in - the House after we come back on Thursday? MR. SPEAKER: MR. MARSHALL: The han.

Government House Leader. Mr. Speaker, I had mentioned this fact about the postponement tc the han. gentleman yesterday afternoon. I had assumed that the Opposition were in accord with it. MR. NEARY: No, we had no choice. We do not have the majority in the House. MR. MARSHALL: With respect to the question, and I think it is a fair question - both sides of the House should obviously know what business is coming up. On Thursday we will be proceeding with the bill with respect to the Lower Churchill Development Corporation.

And then we will be proceeding with the rest of the legislation and in due course of course we will be bringing in the budget as soon as possible. As for the election, that of course is not within my purview to comment upon 1 but I just have to say the Opposition will have to just shiver and shake for a little while longer and in due course they will find out when they are going to meet their Waterloo. OAAL QUESTIONS: MR. SPEAKER: The han. member for LaPoile. MR. NEARY: Mr. Speaker, back on November lst., Sir, over six months ago, I wrote the Minister of Justice asking for a 3681.

:-lay 18, 1979 Tape No. 1<:34 NM - 2 .:-tR. NEAR¥ : police inves~gation into a very suspicious ~ansaccion chat took place be~ween Sterling International of San Francisco, International Forese ?roducts,who were che exclusive :naxkecL,g age.'ltS for Labrador Linerboard, and a dummy company in Sermuda known as ::GRET . Could tile Minister of JuSt: ice tell che House wha~: has been done to dace L-. connection witil chat request? ~t steps have been taken to invesl:igate :his maccer by the RC~P? :m. SPEAKER (Ottenheimerl : .:-tR. arc:<MAN: The hon. Minister of Jus~:ice. Mr.

Speaker, tile investJ.gat.ion i nto chis :natter .,..as initiated i.:nmediacely •...Oen ic came to my attention. I have enquired trom l:ime co time as co che pre<rress. I have been assured that che ~.u> have compleced eheir invescigal:ion •.dthin canada but some of the alleged witnesses referred co in che correspondence reside in the Uni ted States and certain procedures are now underway to try . 3682

May 18, 1979 Tape 1435 PK - 1 Mr. Hickman: and solicit their co-operation, which they have not been inclined to give. These are not, I might add, the people who were complaining about, but others. That is, being done in co-operation with the law authorities in the United States so I am told. MR. NEARY: A supplementary. MR. SPEAKER (J'I!..R. OTTENHEIMER): A supplementary. MR. NEARY: Mr. Speaker, would the hon. gentleman i:: c'.icate whether or not Canada's national police force, the RCMP1 have been in touch with ~~e FBI in connection with this investigation?

Have they asked for co-operation or in any way solicited help from the FBI to investigate this matter South of the border? Just what procedure do they go through to get this investigation underway in the United States? MR. SPEA.."'<ER: The hon. Minister of Justice. MR. HICK..'1AN: Mr. Speaker, there has been an investigation going on in the United States. In most incidents where you have witnesses who are interested in the truth and who are co-operative 1 there is no problem. The RCMP can simply go in themselves and take the statements.

If there is a witness • or witnesses who may have relevant evidence who are not co-operative 1 then there are other procedures under American law which may include consultation with the FBI, but certainly I know the hon. gentleman for LaPoile (Mr. Neary) would not want me to give away what the police and their collaborators in the United States intend to do in order to get the co-operation of people. I repeat that immediately following this public statement by the member for LaPoile 1 the solicitor in Newfoundland for Mr. Kraft and the others wrote and offered full co-operation.

So they have been most co-operative. There I would suggest that he direct his - if he has any questions in that matter that he direct it to Mr. Clyde K. Wells, Q.C. 1 of Corner Brook 1 the solicitor for these gentlemen, 3653

~ay 18, 1979 Tape 1435 PK - 2 Mr. Hickman: and he would be very co-operative indeed. These are not the people 1 I am told,that the Ru~ are having the trouble with , but it is the trouble that they intend to overcome. And I would ordinarily, Mr. Speaker, because ordinarily it is not proper for my opinion,for an Attorney General to comment on the outcome of an investigation, but in this case where there were public accusations made, if the investigation indicates what has been indicated so far 1 then obviously to preclude any libel against anyone it will be obligatory to indicate publicly the outcome of that investigation . I know now what the ouccome of the 3664

May 18,1979 Tape No. 1436 AH-1 MR. HICX.'!A.'I: investigation was in Canada. But that is a matter that I guess will have to wait a little while,But it is where in my opinion there has been libelous statements or public accusations and they turn out to be false, tltere certainly is an obligation then on the Crown at the conclusion of the investigation to advise the public accordingly and that will be done~ MR. NEARY: Mr. Speaker. MR. SPEAKER: (Mr .Ottenheimer) MR. NEARY: A supplementary question, A supplementary.

Is it customary, Mr.Speaker, can the minister tell me if it is customary for Canada's national police force to call up one of the parties directly involved, ask for their co-operation six months ago, be assured that they would get their co-operation, and then not follow ' up by calling on this party that is directly involved to pick up the data or to get the information that they asked for on the telephone? And would they expect, would Canada's national police force expect to have the records of this company thrown open just merely by placing a telephone call? Is this the procedure that is used in these cases?

It seems to me to be a rather sloppy way to carry out an investigation. And why has it taken so long? MR. SPEAKER: . MR. HICKMAN: Six months have gone by. Hen. minister. I am not in the position to say why it is taking so long, Mr. Speaker. There could be many reasons,some of which may beprocedural. There is another reason that could be very, very relevant and that is the refusal of a witness to co-operate. Fortunately in the United Stares if a witness refuses to co-operate I am told that there is a procedure which can be invoked.

It takes a little time but I am sure that the Royal Canadian Mounted Police,who have very properly been described in law inforcement circles in the free world as the free world's best police force 1 know the procedures to be followed and 3635

May 18,19 79 Tape No. 1436 AH-2 MR. RI CC".AN: the effective manner in which they are to follow these. If on the other hand the non. gentleman is aware of any person in the Uni ted Stares of America or elsewhere who is ready, willing and able to co-operate simply by a visit fr0111 the ~ru canadian Mounted Police, then I am sure that in the c;l.isc:harqe of his public duty he will advise them. But I would alert hiln - that he may not be in possession of the facts. MR. NEARY: A supplementary, Mr. Speaker. MR. SPEAKER: A supplementary. MR.

NEAl<Y: The hen. gentlE!IIlan is aware, Sir, that I attempted as an elected representative of the people to get the facts and the hon. gentleman had his deputy write the people that I was 363G

May 18, 1979 Tape 1437 EC - l MR. NEABY: doing business with to bar me from getting the information that I wrote these companies for. So the hon. gentleman is on very thin ice when he asked me if I can ?reduce the information. I almost had the information and can still get it, by the way, just for the hon. gentleman's benefit. But I am not the law enforcement officer, as the hon. gentleman indicated in his letter that he wrote, I am not the one conducting the investigation. But I am conducting an investigation, and what I am uncovering I do net like. Mr.

Speaker, I would like to ask the hon. gentleman if the Attorney General, the Minister of Justice for this Province, the Justice Department in conjunction with Canada's national police force have gene into the records of International Forest Products down in Massachusetts, gotten a court order and gene in and asked for an accounting of International Forest Products during the time they were marketing agents for Lal:lrador Linerboard in this Province? MR. SPEAKER: (Mr. Ottenheimer) MR. HICKMAN: The hon. the Minister of Justice. Mr.

Speaker, I repeat what I said earlier, that all relevant information that is required by the investigative police force with respect to International Forest Products can be acquired without any court order because they have been JOOst co-operative through their local solicitor - no problem at all. What they have found I am certainly net going to disclose. My responsibility and the responsibility of the police force is to get all the facts, and the police force are the only people entitled to carry out investigations.

I repeat that when this is completed and if these accusations turn out to be untrue, which would -l!lake them grossly libellous, then,obviously, ~~ere will be an obligation to make public that fact, which is not ordinarily the procedure that is followed. In this case I know that the RO!P are moving very carefully, very efficiently, and there has been no lack of co-operation by the people just referred to by the hon. gentleman. And if he has any doubts about that, I am sure that Lheir local solicitor would be more than happy to allay them. 3687

:-lay 18, 1979 Tape 1437 EC - 2 MR. HICKMAN: The responsibility with respect to other people 1 I am sure that in his interest to get all ::he facts he woul.d not wish me to publicly indicate to those who have a precarious interest or a biased inter~st or a prejudicial interest, to indicate to them the nature in which the RCMP intend to 3638

May 13, 1979 Tape No. 1438 NM - 1 MR. HICKMAN: continue their investigation. There is always a very salutary part of an investigation by any police force, but if in the course of their investigation they should come up on other matters they have the responsibility to complete that part of the investigation as well if they feel that there has been any breach of the law.

And that is why we should always take comfort in the fact that that investigation is in the hands of such a strong police force who,when once they are given instructions to investigate,very properly carry out their investigation unimpeded and in their own efficient manner, and in this case they are doing it but I am not going to disclose what I understand will be their next move in co-operation with the United States authorities. MR. NEARY: MR. SPEAKER (Ottenheimer) : MR. NEARY: Mr. Speaker, a supplementary, Sir. A final supplementary. Mr.

Speaker, my understanding, Sir, from what I have seen in this case so far is that we are talking anywhere from $30 million to $40 million paid into a bank account in the name of a company in Bermuda called EGRET. International Forest Products have admitted, through their solicitors, the han. gentleman indicated, that EG~ is a subsidiary of International Forest Products. This money was paid in for no reason that is apparent at the moment.

I can give the han. gentleman the name of two other companies in the United States who acted as middlemen in the selling of l inerboard and I estimate that $10 million, that is only an estimate on my part, went into the bank account of this company called EGRET in Bermuda for no reason. The reason given by the company originallY- was that it was for shipping. I am told by an official of Sterling International that it had nothing to do with shipping, absolutely nothing! It was a straight fraud on the Linerboard ~ill.

Now would the han. gentleman indicate to the House if this company, EGRET, is also under scrutiny by the RCMP, by Canada's national police force? 3689

~lay 18' 1979 M.~. S?EAX::R (Ottenhei:ner ) : ~l.R. !iiC;<..".'\.'1: Tape No. 1438 NM - 2 ~on. :Oli;'lis t:er of Jus t:ice. ~tr. Speaker, ~irscly I do not: ~~ow where c:-te hon. geotJ.eman get:.S :tis :rnvestigation about fraud but: I '"ould so:ongly urge him, basec on •.;hac I k."'ow and based on the t"eporo:, ::hac he is being very ill 3dvised in makin<; a::hat. scat:ement. and I ·,tould urge ~m never again to w~~e it: outs~de of the prot:ecc1on of chis House !lee a use ! can ::ell him !1e is wrong, absolut:ely wrong. 100 per cent •.~rong .

As co t.he nature of the investigacion, the manner in which it is being conducted, I am not going t.o aid and abet those whose incerest:s are certainly not che administration of j ustice in carrying out t.heir nefarious litt~e schemes, and he did mention t.he name a minute ago 363 0

~lay 181 1979 Tape No. 1439 SD - l ~1R. T.A. HICIC1AN: of a company. They will be given their opportunity whether they like it or not to co-operate and I do not think they like to co-operate. 1-!R. S. NEARY: i'!R. SPEAKER: (Ottenheimer) Final supplementary, Mr. Speaker. Just to keep our precedents straight, I had recognized the former one as a final supplementary but no other non. members wished to ask questions so, obviously, the han. member for Lapoile. i1R. S. NEARY: Mr. Speaker, I want to ask the hon. gentleman, Sir, this just to clarify the situation.

Linerboard took a decision that ~~ey would expect to get ~320 a ton for linerboard, and they got that ~320 a ton 1 but the marketing agents for the Linerboard mill out in Stephenville got ~320 a ton plus $110, half of which went to the middleman and half of which went into a company called EGRET in Bermuda. That Sll~hould have gone to Labrador Linerboard. Now, what would the minister call that if it is not a straight 1 outright fraud? :1R. SPEAKER: Han. Minister of Justice. t4R. T.A. HICI<!'!AN: Mr. Speaker, I repeat that the hon. gentleman talks about thin ice.

I have never seen a man on such thin icemaking such erroneous statement- r1R. S. NEARY: Here it is here, look. MR. T.A. HICKMAN: - as the han. gentleman has made. Fortunately, he does not understand the law, Fortunately, he knows nothing about investigation. I would urge him to await the completion of that investigation because I have also seen another bit of evidence that has now turned out to be totally incorrect that arose in this House and that will be dealt with when the investigation is completed and will have to be dealt with by this House. :1R. SPEAKER: Han. member for Terra Nova. 3651

~.ay 13, 1979 Tape No. 1<;39 so - 2 ~IR. T. LUSH: Mr. Speaker , l have a question for t:he ~inis t:.er of ::ducation Plr . T.A. Hl.cl<man) and it:. is relating t:.o the recent:. Task Force on ::ducat:.l.on and specifically conce r ning a recoamer.dauon made by that: Task Force - a recomme:uiation, : :niqh t:. add, !1!' . S;?ea.ke.r, -=..'la.:: has caused qwce a bJ..:: of conce r n and,J.ndeed, ala= a.monq ed'i.lcator s i.n t:..":e ?rovince, ?art:icula.r~y ;::eachers . The question is in relation ::0 the recomme1·ldation ·.mich allows School aoards e xtra adminJ.strative personnel and programme co- or dinators .

The question to cha 11\l.nister is this; Jou ld ::he 1:1inister briefly and clearl y ir.dicace to t:.h.e Hous e t:..~ e Government:' s p resent:. ?OSl.tion, i ts immediate posit:l.On , Wl.t:..lt respect: co t:hac partl.cu l a.r reccmme."ldation , a recommendat:.l.On c..'lac al.lows School aoards ex tra personnel in :er.ns of assis::anc 3692

May 18, 1979 Tape No. 1440 ow - 1 MR. T.LUSH: ordinators? superintendents and programme co- MR. SPEAKER:(MR. OTTENHEIMER): The hon. ~inister of Justice. MR. HICK.'IAN: Mr. Speaker, I am quite sure this information has already been made public.Certainly the school boards are aware of it and have been for quite some time aware of the government's position. There was an interim re~ort of the task force and included in that interim report were some recommendations dealing with additional central office staff such as assistant superin­ tendents and programme co-ordinators.

Now a decision was made some time ago that these recommendations would be deferred for at least one year. This decision was taken,and I am sure the school boards are~ aware of it,for ~~e ~urpose of providing the department and the school boards an opportunity to consider more fully the implications of the recommended change. And we want to hear the considered views of the school boards and the teachers and other groups before doing it. The one thing that the department is not interested in doing, Mr. Speaker, is building up a large central office staff at the expense of increasing the pupil/teacher ratio.

Now we are very interested in promoting better educational programmes and improving the learning experiences for students, but these things must be kept in perspective. ObYiously if an inordinate amount of the tax dollar is going to go into providing for supervisory staff and programme co-ordinators 1 this will have to be done at the expense of the classroom teacher. And as of now we have not seen convincing evidence which would indicate that that kind of approach would be acceptable to school boards, to educationalists and certainly it would not be acceptable to taxpayers and parents.

It may be worthy of note that despite a decline in the student population in Newfoundland for this year of 3,000 in enrolment, there will be at least ten more teachers on staff this year than there were last and probably more 3633

May 18, 1979 Tape !>lo. 1440 ow - 2 MR. HI~~~= after that very salutary cecision that was made in- =onsultation with educationalists to ?revent loss of teachers in any one year by any board to go below 3634

:-lay 18, 1979 Tape 1441 PK-l 3 per cent: :-egardless of the size of the decline in the eru-ollment L, any particular school board .

So ii ~~e hon. ge ntleman has heard of a sch.ool board which is not aware of that government decision, I woul d certain~y like t:o know who they are because they were made aware of it at: least a month ago, if not more, and I be~i eve - in fact: =hey were wade before I became Minister of Education, md my predecessor in offi e nods h'-s head i n agreeme:rt:, and I am sure ;:hat you will not find any unha;>piness on the pa= of the school boarc •.rit.."l respect to the decision co spend a year looking at it and seeing how many programme co- ordinators, a:·1d how many assis t an t superintendents.

And I know t:hat: i s in line ·.rith t.'le thinking of the hon . member for Terra Nova ( Mr. l:.ush) becallse ! have heard him SO many t:ime.s lash OUt:, Mr . Speaker, about: too many su.,erL~ter.dent:s, and the adEinistrat:ive cost of school boards and I am - <1R. r.osa: The mel!'.ber will tell you his side o'f it if : can get a chance. MR. H!C:q<.AN: - sure he very much agr ees with the policy - M..~ . LUSH: I can tell you my view but I cannot get a chance. MR. fiiCl<MAN : - and the prudence that ha s been emanating from t:.he gove-'"!Unent: in this very vital ma-cter. ~ffi. LUSH: A supplementary . ~ffi .

SPEAKER (Ottenheimer): A supplementary. MR. LUSH : Than.lc you, Mr. Speaker. Well., Mr. Speaker, ~~t is , despite what the min l.ster says, t:.hat: is c e rtainly new information; thi s infor:natio n given by the minister now is not information that: s ~<nown general~y by teachers t..i.rouqhout t:.he ?rovi ·nc·e . rndeed' 3695

May 18, 1979 Tape 1441 PK - 2 Mr. Lush: the impression was that the government agreed with this recommendation. So what I am asking the minister now is to state categorically whether the government does agree with this recommendation , because my understanding is that school boards have been instructed to take on some of these people, particularly programme co-ordinators 1 that school boards- ur assistant superintendents, I am sorry, and maybe both, but certainly in one or the other school boards have been instructed that they can hire them this year, but they will not receive the pay that they are entitled to.

In other words, that they will receive their regular pay that they are entitled to as teachers, but if school boards are willing to go out and hire these people under these conditions,that is to tell these people that you do not get the extra pay that goes with being an assistant superintendent or the extra pay that goes with being a programme co-ordinator, but take your regular teacher's salary,then school boards are allowed to hire these extra personnel. Could the minister comment on that? MR. SPEAKER (MR. OTTENHEIMER): The hon. Minister of Education. MR. HICKMAN: Mr.

Speaker, there may very well be some school boards who have appealed to the professionalism of the teaching profession and ask if some of them would this yea~ pending a final decision on the task force recommendation with respect to assistant superintendents, if they would be prepared to do this work at the same pay, 369S

:-!ay 17,1979 Tape No. 1442 AH-1 ~R. HICKMAN: the same salary that they are presently receiving 1 and I have no doubt that any teacher worth his or her salt, who has any comr~tment to his or her profession, a commitment to the education of our youth,will gladly, readily and happily accept that challenge. That is not the issue. The issue, Mr. Speaker, is whether or not there should be additional central staff, office staff, such as assistant superintendants and programme co­ ordinators at the expense of the classroom teachers.

That is the issue and that is why we are moving with caution and prudence and in consultation with the Newfoundland Teachers' Association and with the school boards and the Federation of School Boards and our own educationalists before embarking upon what may very well be a wise proqr~e.

But I repeat, we are not going to do it at the expense of increasing the P.Upil .- teacher ratio. .~d I am really surprised if the hen. member for Terra Nova (Mr.Lush) has some · information indicating that school boards or the NTA were not aware of this decision which, may recollection is, was publicily made quite some time ago • MR. LUSH: Speaker. MR. SPEAKER: (Mr.Ottenheimer) MR. LUSH: A supplementary, Mr. A supplementary. I am still not clear as to what the government's position is new.

One,the minister says the decision on going through with the recommendation is deferred to give the government a better chance to get s clear idea as to how educators feel about this recommendation. And then he goes on to say that there are cases where boards are allowed to hire these people. Now what kind of an arrangement is that? They can "hire them but they are not allowe d to pay them!

And I say what wi 11 happen in the event that next year the government decides not to go ~~rough with this plan· ., that we have hired those people as assistant superintendam;s and we have hired them as programme co-ordinators and just a final questio~, a (

b) section of that, is I agree with the ~inister that the important 369?

May 17,1979 ·rape No. 1442 AH-2 MR. LUSH: thing at stake here is not so much these positions they could be good positions, desirable positions the important thing here is the for111ula that is used in getting these people because nobody wants these positions to affect the number of classroom teachers we have. So the other question is, can the Minister assure this House,and in so doing assure educators throughout the Province that if the government agrees with hiring these extra personnel that they will in no way affect the number of classroom teachers• teachers in clas~rooms throughout this Province? MR.

SPEAKER: (Mr.Ottenheimer) Education. MR. HICKMAN: The hen. Minister of Mr. Speaker, I think the hen. member for Terra Nova (Mr.Lush) has got himself hoisted on his own petard and I do not know if I should get him off the hook or not.

I find it inconceivable that he 1as a very competent teacher and one-time superintendent,is not aware of what has been the policy and the right of school boards going back - well 1 I can go back to the 1950's when I was involved, to internally adjust within their own sphere of influence and their own sphere of respor~ibility, the teaching areas and teaching responsibilities and how many programme co-ordinatores that they are going to have. MR. LUSH: But what is the formula? MR.

HICKMAN: Now then all I have said is if the school board wants to continue to do that and if they want to appoint an assistant superintendant,sobeit. I repeat that our dete=ination is 1 and that has certainly been proven beyond all reasonable doubt by government's decision a couple of months ago with respect to the declining enrolment 1 is to see that there not be any further increase in the pupil-teacher ratio. In fact in ~~me boards next year we may be down to one to ninteen and I doubt if there is any place in Canada which has achieved that very desirabJ ,e end.

The thing that we have also to bear in mind 1 as I am sure the hen. gentleman is aware - 36'98

l'!ay 17 . 1979 Tape No. 1442 AH-J MR. LOS~: Answer the question! Answer the question! MR. HICKMAN: I have answered the question. I alii now trying to !!ducate the uneducatable. MR. LOSH: We a.z:e not close to answe:dng the q1;1estion. MR. HICKMAN: And I all!. doing lilY very best in that respect and obviously ~ have been woefully unsuccessful. And I suggest: to the hon. gent].eman that after the next election he is going to have to taR:e a refresher course. But be that as it may MR. NEARY: courage tq run. MR. HICKMAN: The pupil-teacher ratio - At least he has the Yes, in his own district. MR.

NEARY: The hen. gentleman may be right. I could take anot,b.~ one. one. MR. HJ:CKMAN: Why do you not try LaPoile? You belong tQ a diffe ,rent party than the hen. gentleman who represents it now does. 3639

May 18, 1979 Tape 1443 EC - 1 MR. HICK."'AN: In any event, Mr. Speaker, the government's coaunitment to maintain a pupil-teacher ratio remains intact. What we are doing is to provide an opportunity not only for the department to consider the full implications of these recommended changes •;~ith respect to the central office staff, but at the same time we \olant the considered views of the school boards, -the Newfoundland Teachers' Association and ot!1er groups.

And hon. gentlemen will, I am sure, be very pleased to note that in the cotmni ttees that have been set up to implement Grade XII that we have parent representation, not with any particular group, but parents who have the interest of Newfoundlanders and Newfoundland children at heart. MR. LUSH: What? MR. RICKMAN: The hon. gentleman seems to have some difficulty understanding what I am saying. MR. LUSH: Yes, I have, very much. MR. HICKMAN: And I will gladly repeat it again, Mr. Speaker, but then I would have to crave t;he indulgence of the House.

There is going to be no worsening of the PUPil-teacher ratio, and what the school boards do wi.thin their own sphere of influence in adjusting their staff is their prerogative. And I hope that the hon. gentleman from Terra Nova (Mr. Lush), being an educationalist himself, shares my firm conviction that any teacher cotmnitted to his or her professional status will gladly accept the challenge to take on any administrative post regardless of whether there is an illllllediate increase in salary. SOME HON. MEMBERS: Hear, hear:

.'-lay 18, 1979 Tape 1443 EC - 2 ORDERS OF THE DAY On ~tion, that the House resolve itself into Colllllli ttee oi the Whole. :-!R. O:!AIRMAN: (Mr. Cross) MR. MARSHALL: MR. O:!AIRMAN: MR. MARSHALL: Mr. Speaker left the Chair. Order, please! Mr. Chairl!lall. The hen. the Government House Leader.

I should like to bring to the attention of the Col11111i ttee that there is a slight printing error in the Order Paper, in that Order 18, "An Act To Amend The Maintenance Orders (Enforcement) Act," (Bill No • 2 0 ) is there put down as being up for second reading, ..,here as in fact it passed second reading yesterday and is now eligible for Committee of the Whole. So I would call that one first. Order 18. Bill No. 20. A bill, "An Act To Amend The Maintenance Orders (Enforcement) Act," (Bill No. 20). On Irotion Clause 1, carried. On =otion enacting clause, carried. On motion title, carried.

Motion that the Collllllittee report having passed the bill without amendment, carried. MR. MARSHALL: Order 9. Bill No. 31. A bill, "An Act To Enable Gaden' s Limited And Lahatt Breweries Of Newfoundland Limited To Become Federal. Corporations," (Bill No. 31) • On motion Clauses 1 through 4, carried. On motion enacting clause, - carried. On motion titl.e, carried. Motion that the Committee report having passed ~~e bill without amendment, carried. Order B. Bill No. 30. A bill, "An Act To Amend The Securities Act,• (Bill No. 30). On motion Clauses l and 2, carried.

May 18, 1979 Tape 1443 EC - 3 On motion enacting clause, carried. On motion title carried. Motion that the Committee report having passed the bill without amendment, carried.

:-<.ay 18, 1979 Tape No. 1444 NM - 1 Order 6 . Slll No. 27. A bill, "l\n Act: To :\mend The Income Tax Act." (Si ll No . 27) Motion, that ~~e Committee report having ,asse<i t!\e bill :.oi::hout amendment, ca:::-:-ied. 0:'1 tr.otion, a :,ill, 1'An Act '!'o Amend ':'he Income Tax .;c~." read a third time, ordered passed and title be as on the Crde r Paper. (Bill No. 27) Order 5, Sill No. 12. A bill, "?.n Act. To <\mend The rnterpret:ation Act." (Sill So. 12) Motion, chat: ::he Committee report having passed the bill Wlthout amenement, carried . On motion , a bill , "An Act To :\mend The

Interpretation Act , " read a thi rd time, ordered passed and citle be as on the Order Paper. (Sill No. 121 MR. MARSAAU.: Orde r 4, Sill No . 7. A hlll, "An Act To Repeal The Teache rs' ~ Act . " (Sill Mo. 7) Motion, that che Committee report having passed the bill wichout ~~endment:, carried. On motion. a bill, "An Act To Repeal The Teachers ' Loan Ac~ . " read a third time, ordered passed and its title be as on the Or~e r Paper . (Bill No. 7) . Order 3, Sill No. 2.

A bill , "An Act To Amend The L"'crease of ?e.'lsions Act, 1961." (Bill so . 2) ~otion, that the Ccmmittee report having passed the bill withou~ amendment, carried. On motion, a bill, "An Act To Amend The Increase o: Pensions Ac::, 1961," read a third ci:ne, ordered passed and ltS ti:le be as on the Order Paper. (Bill No. 2)

~lay 18, 1979 Tape No. 1444 NM - 2 MR. ~A.'tSHALL: Order 2, Bill No. 15 . A bill, "An Act To Provide For The Ratification Of The Sale Of Labrador Linerboard Limited And The Conversion Of The Linerboard Mill To A Newsprint Mill." (No. 15) MR. NEARY: Mr. Chairman, before we get into Labrador Linerboard, Sir, the Premier yesterday said before this bill goes into Committee of the Whole that the government would table the agreement with Abitibi in its entirety, would also give us access to the records of Labrador Linerboard from the time the government took over up to the time that the Linerboard mill closed.

The hen. gentleman is not in his seat but could the Government House Leader indicate whether we are going to get that agreement today on the table of the House as promised yesterday by the Premier? MR. MAYNARD: Mr. Chairman, there were a number of schedules to the principal agreement, and the principal agreement is set out of course in the Bill that is before the Legislature now.

The agreements were number LLL-2 to LWL-121 I think it was, covering various aspects of the items that made up the agreements, the hydo agreements on and so forth, <,;ith the exception of two which I believe are numbered LLL-4, a statement regarding claims and contingent liabilities which I understand applies to internal company documents, Abitibi, and LLL-5, which is the advance tax ruling from the federal government. These two are not included in the package that I hav~ here 1but I have a copy of all the others for the hon. member if someone would like to take them over.

The forestry agreement that-was questioned by the hon. member yesterday is in the bill; this is the one and only forestry agreement in existence. There was another thing that the hen. gentleman asked for, the annual reports or the auditor's report, and they are available, obviously since it was incorporated under the Companies Act, it is public knowledge anyway. 37:''4

May 18, 1979 Tape No. 1445 DW - 1 MR. E. MAYNARD: and what other reports the han. gentleman will want I do not know. MR. s. NEAR':': What is availab~e? MR. E. MA':'N JUU) : The financial reports - MR. s. NEAR':': I did not ask for the financial reports. MR. E. MAYNARD: -the auditor's financial reports- MR. s. NEARY: I asked for the annual reports of the company. I_t is a Crown company 1 the same as a Crown corporation. MR. E. MAYNARD: There were no actual year end reports submitted as such other than the minutes of the Board of Directors meetings that were held and these are obviously not available.

But there was no actual year end report such as this one.I would assume the han. gentleman saw me with a report that,for instance,Newfoundland and Labrador Hydro files every year or some other Crown corporation. And these were not compiled. I".R. S • NEARY : Mr. Chairman, if I may. MR. CHJURMAN: The hon. member for LaPoile. MR. S. NEARY: I am completely shocked, Mr.

Chairman, to learn that this government after spending $300 million of taxpayers• money on the linerboard mill and asking us now to ratify an agreement with Abitibi,are refusing to give us access to the records, to the minutes of the meetings, to ask questions to be able to find out what happened to that 5300 million. What the minister is saying, in actual fact, is go down in the registry office. He is repeating the same thing that his colleague, the Minister of Justice (Mr. Hickman) told me to do, go down in the registry office and all you will find is the share list.

You will find nothing else but the share list! Now, Mr. Chairman, I have done a little checking into this matter and I believe before we start discussing item :,y item, clause by clause of the agreement that there are a couple of things we have to get straigtened out. First of all, I think we are in an illegal position because under the old agreement,the Stephenville Linerboard take­ over agreement back in 1972 1 it is clearly stated in this agreement

~ la y 18 , 1979 Tape No. 1445 ow - 2 ~.!'<. S. NE.a.RY: that the linerboard mill cannot be sold, leased or anything done with it unless it is sold to a crown corporation. It is in the agreement, Sir! I draw the ministers' attention, especially the Minister of Justice (Mr. Hickman), to clause number six of the original act, the takeover when the press, the people of this Province and members of the House were deluded into believing that this was going to be a Crown corporation when in actual fact it turned out to be a Crown company. And I still do not know what the difference i s; I have looked at the

Interpretation Act, I have asked for advice on it and I am told that there is no difference 1 that if it is a Crown company~or a Crown corporation it should report to this House. $300 million of taxpayers' '1loney have been spent and we have heard all kinds of accusations and insinuations and reports of skulduggery and corruption in connection with the $300 million, RC.'!P investigations going on ·.since 1973, no report made to the House yet, no action taken, no charges laid,if indeed charges should be laid. The Minister of Justice should give us a report on that. Mr.

Chairman, I would like to ask the Minister of Justice, Sir, if what we are doing is legal. No, Mr. chairman, I do not think it is. 1-".R. HICIOIAN: Yes, it i.s. MR. S. NEARY: Well, all right .The hen. gentleman says 'yes'. Well, would the hen. gentleman then explain clause number six of that agreement for me? AJ.'I HON. MEMBER: Pardon? MR. S. NEARY: I am talking about the takeover agreement. We can do nothing, we cannot sell that linerboarcr~ill to Abitibi according to this agreement. Let me read it for the hon. gentleman . The hon. gentleman remembers it.

"Subject to the prior approval of the Lieutenant-Governor in Council,the m1n i s~er on behalf of Her Majesty may from time to time complete the construction .of the project and operate it," (bY "Enter into

May lS, 1'!'79 '!'ap~ i~ o. 1445 Olol - 3 MR. S. Nc:ARY: agreements wieh any pe ~son for the complet i on of t.'l.e construction and t.'\e ma.nagemene and ehe con t:rol of the project and its pperation upon such terms and conditions and !or such consiceration as the Lieutenant -Governor i n Council approves. • or (c ) "Sell, lease., entrusts or otherw ise dispose of t he p!:oj ece or any L"lterest in i t eo any person upon such terms and conditions and for ~~ch con ~ id eration as the Lieueenant- Governor i n CO~"lcil approves.

Or to do an~ of the things referred to i n paragraphs .'a ' and 'b' provided the projec t except any parT. of i t which is beL"lg used o r is no longer necessary for or in connec t ion wit.'\ che ope r ation o! Labrador Linerboard as defined in

May 18, 1979 Tape 1446 PK - 1 Mr. Nearv: Clause 10-01, sold or otherwise irrevocably alienated or leased or otherwise disposed of for a period exceeding five years, to any person other than a Crown corporation without authority of the Legislature}' MR. MARSHALL: I can explain that. MR. NEARY: I beg your pardon? MR. MARSHALL: If the hon. member would sit down I would tell you all about that. MR. NEARY: All right. Well, I will sit down now because - MR. MARSHALL: You can get up again. MR.

NEARY: Sure I can get up a dozen times, and I am going to, because this matter of this $300 million that was spent we have to get an accounting in this House for it. So far the government have stone-walled. And when I was asking the Minister of Justice (Mr. Hickman) some questions today the little veiled threats came across the House again. Well I can tell the hon. gentleman right now to his face that if the hon. gentleman is talking about a document that was brought into this House 1 that I have a tape to back it up that would make the hon. gentleman's hair stand on end.

The hon. gentleman thinks now he is slick and he is smart and he is a Perry Mason , but the hon. gentleman is on very, very thin ice. .~d I can tell the hon. gentleman on very thin ice in connection with this takeover where he has ill-advised his colleagues.

And the hon. gentleman has refused to give me - I read the letter in the H9use - refused to give me the report, access to the documents, to the minutes of the Board of Directors meeting, to other documents in connection 'N"ith Labrador Linerboard, merely sloughed r~e off and said, "Go down to the Registry Office ;• I have a complete file from the Registry Office that gives me nothing but the share list and shows the hon. gentleman

May 18, 1979 Tape 1446 PK - 2 Mr. Nearv: as a director of that company for two years. I do not know, Mr. Speaker, but I could go down in b~e court and get a writ of mandamus and can force the government to .give me access to the records of Labrador Linerboard. I have a mind to do it. It will probably be the first time it was ever done in the hist~ry of this Province, and I have a good mind to do it. Three hundred million dollars, Sir, of taxpayers•money squandered, wasted, corruption of the worst kind, and the minister stonewalled and refuses to give the House any information in connection with this $300 million.

The biggest scandal on the North America Continent, and the minister gets up with his little veiled threats and says,"Oh, well,the han. gentleman, we will deal with a certain matter.'' Well 1 I have that certain matter on tape in case the han. gentleman is interested. If the han. qentlernan is talking about - AN HON . MEMBER: MR. NEARY: MR. DOODY: MR. NEARY: Taped without a person's knowledge? Oh, Mr. Speaker, - Bring it in and play it. Yes, if I were allowed. Am I allowed to play it in the House? Am I allowed to play a tape in the House? SOME HON . MEMBERS : Oh, oh! MR.

HICKMAN: (Inaudible) . the other person did not know. Make up your mind. MR. NEARY: Mr. Chairman, I object to it because I was not the one who did the tape 1 but I have it for my own protection. MR. HICKMAN: That if the hon. gentleman does the taping there is nothing wrong with it, but if somebody - MR. NEARY: No, Sir.

May 18, 1979 Tape 1446 PK - 3 Mr. Hickman: - else does there is. MR. NEARY: No, Sir, I have it for my own protection because I had a feeling that that han. gentleman was going to be threatened 1 and he was threatened . If the han. gentleman is talking about a certain affidavit that I put on the Table of this House 1 that gentlema'n was threatened. MR. HIC:<MAN: What is he talking about? SOME HON. MEMBERS : MR. NEARY: talking about. SOME HON. MEr-'!.BERS: MR. NEARY: Oh, oh! I know what the hon. gentleman is Oh, oh! So, Mr.

Chairman, there is no way, Sir, no way that we as elected representatives of this House should allow this takeover to go ahead without, Sir, having first an accounting for that $300 million,access, Sir, to the records - SOME HON. MEMBERS: Oh, oh! MR. NEARY: Mr. Chairman, could I have a little silence, please? Could Your Honour silence the psychiatric patient down there? MR. CHAIRMAN (MR. CROSS): Order, please~ I would ask hon. members to refrain from interrupting. MR. NEARY: So, Mr. Chairman, there are too many unanswered questions and I believe we are proceeding illegally on this matter.

And I would refer Your Honour to the Stephenville' Linerboard Mill Agreement Act , the takeover of Labrador Linerboard. Mr. Chairman, just listen to this, the insult, the insult to the members of this House! Here we are asked to ratify an agreement between the Newfoundland Government and Abitibi, and the minister tells us that the agreement will not 3';-':iO

May 18, 1979 Tape 1446 PK - 4 ~tr. Neary: become legal until it is passed in this House. And yet yesterday or the day before 3';'11

~ lay 13, 1979 Tape No. 144 7 SD - 1 ~lR. S • ~ARY : Lundrigan's were awarded a contract by Abitibi to convert the mill from linerboard to paper, awarded a contract. What happens if the i!ouse says no? They are proceeding, :.!r. Speaker, they are proceeding as if ~he thing was already cut and dried and it is cut and dried. Anything we say in this rtouse will not change one p·aragrapi1. It is all a charade and I do not believe we are going to get the information that we want in connection with this ~300 million. I do not think we should do a thing, Sir, until we find out if the Government can get a better deal, a better ~eal. It should have been sold to a Crown corporation according to my

interpretation of this act. Ar! i!ON • HEl1BER: :•lR. S • NEARY : That is nonsense. That is nonsense: Well, t·!r. Chaixman we will find out. Now the minister says it is nonsense, well, I am not a lawyer, Sir, but I can read. Let me read it again what it says "Provided that the project, except-" I am only just quoting 3ection C, "Proviced that the projec~, except any part of it which is net being used or is no longer necessary for or in connection with ~~e operation of Labrador Linerboard,as defined in Clause 101 (

E) of the Erincipal Agreement, may not be sold or o~~erwise irrevocably alienated." What does that mean? 1·1R. W. MRS:l'\.LL: What else does it say? It says the word except. 1-lR. S . NEA..'-Y : "or leased, or lease or ot! 1erwise disposed off for a period exceeding five years to any person other than a Crown corporation without authority of the Legislature, additional to that provided by this act specifically auth~rizing or ratifying such sale other irrevocable alienation lease or disposition." 3\R, DOODY: \"ie are now s~eking the authority (inaudible) • ·IR. ~ARY: ~.

Chairman, that is exactly the point the hon • gentleman just put his finger right on it. The linerboard mill has been sold, contracts have been let to convert

:·lay 13, 1979 :·lR. S. ;)j"'EARY: has been sold illegally. AN HON. MEMBER: stop it? Tape No. 1447 SD - 2 it from linerboard to paper. and it Do you suggest . ..,.e should MR. S. NEARY: Yes, I would suggest the hon. gentleman stop it. I certainly would. :1R. 'tl. i-!A..'<SHALL : Is it a bad deal? !1R.

S • NEARY : It is a bad deal and if the Government took the time to go ol.lt into the world they would find out today that linerboard is in demand, was never as much in demand as it is at the present time, the price was never as good and if the hon. gentlemen would make some wood available they can get four times as much for the mill as ~~ey are getting right now. But they want to give it away, they want to give it away to their buddy, 11r. Desmarais. AN tiON. MEMBER: He does not have anything to do with MH .• s. NEARY: Ah, Mr. Desmarais has all to do with MR. MARSHALL: You want to give it to your buddy Mr.

MR, s. NEARY: No, Sir, I do not want to give it to Mr. Chairman, I am not in a position to make decisions, the Government is in the position to make decisions. I am not in a decision making role. MR. DOODY: You just make pilgrimages! HR. S • NEARY : Ah, that is right, Sir, I make pilgrimages on behalf of the people of this Province and the hon. gentleman may not like it. But, Mr.

Chairman, let me say this to the non. gentlemen, who are getting their little snide remarks across the hol.lse, Sir, why do not the non. gentlemen go out and bring me in the information I ask them about the other day on this company in Hamburg that was marketing linerboard, that was hired by International Forest Products to market linerboard? Why does not the hon. gentleman - that information should have been provided to the Hol.lse two days ago. it .. it. Doyle. I only ask the hon. gentleman if these was a law suit, if it was settled, 3713

~!ay 19, 1979 ~L~. S. NEA~: :~R. DOODY: Tape :-:o. 1.:.; 7 so - 3 '"'hat were the outs~ncii:~q J.t.ems . It was not t.hree days ago, I was not here. ~el l, I asked t.he hon. gentleman outside t..lte House , I asked t..":e ?remier, the hor.. qe.ntleman said I 1o10uld gee the informat..!.on . 11:. Chal.rman, ! Sl.:bUC co ;.'Us House, Sir, chat. t..'le e~arketinc; age::t. for Labrador Line r board and I 'MOuld even be sat.isfiec -well ! '"'ant I:'WO things inves::.iga ted, c.'"Le shlppinq conc:act. a.nd t.he market:ing of t..'le Labrador L.Utcrbo ard , t.wo things ! w~~t. invest.igat.ed .

This House has refused to have an Lnvestiqacion even enough ev1.dence of wronc;do1.nq nas !leen laid on ::..'"le ta.ble of the House. It. is a cri:ue, :1r. c ::ai:-:nan, accor:Unq co t.he Criminal Code :>f Canada to put secret. amount:S of !:lOney J.nt:.o secret comparu.es in Be:m uda, that. is a c:nme aga.i.nst the Criminal Cede . .\nd you should have seen t..'le ;.U.nister of Justice {l1r . '!' .A. Hickman) , this toorninq, t..,ist ar.d t.1.1rn and squ.il:lll .,hen I was put ting the quest.ions to him. '!'he hon. gent.leman bas no int.ention of · 3714

May 18, 1979 Tape 1448 EC - l MR. NEARY: conducting a full-scale investigation into this matter, he is attempting to cover it up as he has done so often in the past, as we have seen from the Soper Commission of Inquiry about cover-ups. And I can tell the hon. gentleman about a few more things that he has attempted to cover up. They are orchestrating Canada's national: police force and they have no intention of getting underneath this and turning over the rocks to see what kind of skulduggery and scandals and corruption is involved, no intention at all.

There are two guys over in Switzerland in a place called Zug who got $3 million illegally - illegal commissions from Labrador Linerboard, and I will give the names: Mr. Hans Swmen and Mr. Erik Myer, now living in Zug, Switzerland, compliments of the taxpayers of this Province. And the non. gentleman thinks that is funny. He gets up with his little veiled threats 1 and no ID6lllber of this House can conduct an investigation on behalf of the people of this Province. He wants to orchestrate it his own way and try to protect the administration that he belongs to in the process.

There are two other companies that I know of down in t.ll.e United States that were middlemen, that paid mcney into EGRET in Bermuda, and as I said earlier this mcrning, I estimate that $10 million went into that dununy company, that offshore company in Bermuda. Mr. Chairman, let me make it abundantly clear, Sir - yesterday I had a chat with what I consider to be one of the more intelligent members on the government side of the House, and the hon. gentleman told me he did not understand the Stirling International ~plication, what I was getting at. Well, let me see if I can make it clear, Sir.

The board of directors of Labrador Linerboard agreed that they would be satisfied if they could get $320 a ton for linerboard. They would be satisfied with that - they would like to get more, but they would be satisfied with that. So they took a decision, 'If we can get $320 a ton in the United States for our linerboard that would be very good.' Now, the marketing agent, Mr. Kraft, was also on that board of directors. He was on the share list. So Mr. Kraft and Mr. Ingram ,who were in 3715

May 18, 1979 Tape 1448 EC - 2 MR. NEARY: collusion, then went out and sold the linerboard for ~375 a ton. But because poor old sucker, Labrador Linerboard, only wanted $320, why give them $375? Excuse me, I am sorry, I am wrong there. It is $110 plus $320 - they got $430 a ton, believe it or not, for Labrador Linemoard, but they agreed to give the middleman $55 a ton and put $55 in the company called EGRET in Bermuda. MR. CHAIRMAN: (Mr. Cross) I would ask the hen. member to yield for a t!X)ment. MR. NEAR:!: Yes, sure. MR.

CHAIRMAN: I am pleased to announce that we have in t.'le gallery this t!X)rning twenty Grade VIII students from Norris Arm Integrated Elementary School at Norris Arm, acCompanied by their teacher, Mr. Pleman Menchenton. I know that all hon. members will join with me in .,..e.lcoming this group tc t.'lis non. House of Assembly. SOME HON. MEMBERS: Hear, hear: MR. NEAR:!: In case they are wondering where their member (Mr. Freeman White) is, Sir, he is out in his district doing some work for his constituents. Mr.

Chai:cnan, let me run through this again just in case, Sir, there is anybody on the government benches who does not understand what I am saying. The board of directors of Labrador Linerboard got together and took a decision. They said, 'Look, if we can get $320 a ton for our linerboard in the United States we will be satisfied. The marketing agent, being at that meeting, being on t.'le share list, then went out and sold the linerboard for $430 a ton, but only gave Labrador Linerboard $320. The other $110 was split up two ways - $55 went to the middleman and $55 went into the company cal~ed EGRET in Bermuda.

Now, do hon. members have it straight? And the !tinister of Justice (Mr. Hickman) has the gall to say there is no fraud involved. Why, there is enough to boggle your imagination. And the hon. gentleman sort of makes little veiled threats at me then because I am trying to do my duty - 'The hon. gentleman had better be careful,' and 'The hon. gentleman had better do this.' He squints up hfs eyes and tries tc give me a little bit of a warning. 371.6

.'lay 17,1979 TapP. No. 1449 AH-1 ~R. NEJI.RY: Mr. Chairman, I have to say this; I wrote Sterling International and I wrote the law firm down in Ber.nuda - it is a mail address in Bermuda, and I gave copies of my letters that I wrote to these two firms to the RCMP. The inspector that I gave them to, I said, "I am giving you these letters on a confidential and private b~\sis becaose I do not want the Justice department or the minister,expecially: to find out what I am doing because if they do," I said, "I distrust them. I distrust the way the Justice department has behaved in ~~e last six or seven years.

I distrust them. I distrust the minister in the carrying out off his duties in this Province as Minister of Justice (Mr.Hickman) who has spent all his time protecting the administration." And the inspector left rny office and made a beeline to Mr. Macaulay's office, presented him with the two letters - I have one of the letters ,I think, in front of· me right now. See what the hon. gentleman s~id. The hon. gentleman took it upon himself to have Mr.

Macaulay write Sterling International and write t.~e law firm down in Bermuda and tell them not to give me any information; that the ~~ were conducting an investigation in this whole matter of a rip off. I would think-not a rip off but of straight fraud of $30 or $40 million of taxpayer money, not to give me any information, to save it for the RCMP. And as hon. gentlema~ heard me this morning ask questions, so far all the RCMP have done with Sterling International is to call them up on the phone) one phone call in six months and no follow-up.

You would think that would be the first thing they would have done 1 would have gone straight to that company. I did get a reply from Sterling International telling me unfortunately 7 because they had a letter from the Deputy Minister of Justice 1 that they C<":l•.ld not give me the information 1 they would save it for the RCMP. I do not have the letter with me but they indicated in the last paragraph that my suspicions were true, were correct,that there was no authority for paying out this $55 million to EGRET in Bermuda, no authority for it.

!'lay 17,1979 Tape No. 1449 AH-2 !'.R. NEARY: Mr. Chaitlllan, I t."link we should call a halt to the Committee of the Whole on this bill until we get the documentation, until we have the records of Labrador Linerboard produced in this Honse from the day r.hc government took it over ~~til the day it closed. I am not just talking about finding out mismanagement to embarrass the goverr~ent1 I ~n talking about corruption and crimes being committed.

And crimes were committed and why the government is stonewalling on it I do not know. $300 million of taxpayers' money spent by three directors of a private compan~ more or less,who operated it as if it were their own and threw the money away on extravagance and waste and now refuses to give the House access to the records of Labrador Linerboard . It just cannot be done, Sir. The people of this Province shou1d be rising up in atllls, they should be furious. The newsmen and the press of this Province should be screaming for the records of Labrador Lin~rboard. Mr. Chaitlllan, let me put it this way.

Let me put it to the House this way; Let us assume that everything is straight and above ,-. board, l et us assume that there is nothing wrong, let us assume that there ~as no mismanagement and no corr.Jf)tion, let us assume all that and if the government has not."ling to hide,why do they not give us access to the records? Why does International Forests not give us access to their records and the records of EGRET. if there is nothing to hide?

If everybody is clean why not give a !elect Committee of this House or the Public Accounts Committee or the Auditor General- and that is another thing, Sir, the Auditor General was not permitted to audit the records of this Crown company, it was done by Peat-Marwick and yet we were led to believe that this was a crown corporation. MR. M!>.RSHALL: On that point of order, Mr. Speaker. ~R. CHAIRMAN:(Mr.Cross) A point of order has come up. MR. MARSHALL: (inaudible) rising on a point of order (inaudible).

May 17,1979 Tape No. 1449 AH-3 MP.. MARS f;ALL member speaking in this vein is that some people ge~ a mistaken impression that you are rising on a point of order other than the order itself. Now we have now heard what the hon. member said. We are now in Committee of the Whole. This bill has already passed second

Hay 18, 1979 Tape No. 1450 HR. ~IARSFJ\.LL: reading, it has been adopted by this House in principle and we are now considering the clauses, clause by clause. I would submit, number one,that the hon. gentleman is in a debate with respect to the principle of the bill itself. He is also into what are ~tters that are completely extraneous, they may not be in second reading where we heard all this before in second reading 1 but in clause by clause, completely extraneous to the concerns of this bill itself.

Now you know you sit here and you listen to it and we all know the han. gentleman's views, he is against a lot of our institutions, against the provision of NM - l justice and against the provision of the RCMP and what have you, and it gets a little bit tiresome sometimes to have to listen to it.

But the fact of the matter is he has gone on now from a half to three-quarters of an hour talking,in effect,about the principle of the bill and irrelevancies and I think we should get back to what the Committee is all abcut, the clause by clause consideration because this House has already passed the fact and endorsed the taking over of this mill by Abitibi itself. SOME HON. MEMBERS: Hear, hear! MR. NEARY: Mr. Chairman, what a display of ignorance of the rules of this House, Sir. Your Honour knows that that is not a point of order. That is merely a difference of opinion between two members.

I am arguing that we should not proceed with Committee of the Whole on this bill for the reasons that I have stated, that I think we are in an illegal position in the first place, and in the second place we cannot proceed until we know what we are selling. And, Mr. Chairman, the only way we can find out what it is we are selling, the value of the asset, is to have access to the records of Labrador Linerboard and the government refuses to give us access to these records. So how can we proceed, Mr. Chai:cman, like intelligent people, to sell an asset, to sell something when we do not know what we are selling. 3720

~tay 1a, 1979 :1.."1. AA..ItSi"..:u.L.: and second readi~g. ~!..~ . ~'\.aY: ~t.'t . :-IARSHA!.L: M!~. NEARY: Tape No. 14SO NH - 2 You agr eed :o t.lus in !irs;: reading Who has agreed co i:? You did. Mr . Ch<lit'111an. ·"e have not aqreec co l.t, ·"e h.ave asked co have the records of Labrador . C.iner!:x:lard lald on the table of c~e ~ouse. The minister again chis mo1:ning cold us ~~ac ~e governm ent refuses co 91ve us access co ~;ese reco1:ds. MR. MARSHALL: ( Inaud~le) with it. MR. NEARY: It does have all to do wi~ ic. ~nc so ! •Jould submit:, Your F.onour, th<lc I am complecely L-. orC.e r. ~. CHAIRMAN {Cros s l : To ma.l<e a ruling on char. matr.er ! would recess for five mL-.utes. 3'721

!-lay 18, 1979 Tape No. 1451 DW - l MR. CHAIRMAN: Order, please! I am now in a position to give a ruling on the point of orde-r. Certainly the point of order that was raised was that the principle ready been passed in second reading and now we a~ doing what we·had already done before. In second reading, certainly it is the principle that is debated, in the Committee of the Whole it is the details that must be agreed upon. Certainly in Bill No. 15 theo'pr.inciple is outlined in the

long title of the bill and perhaps I should read this, "An Act TO Provide For The Ratification Of The Sale Of Labrador Linerboard Limited And The Conversion Of The Linerboard Mill To A. Newsprint Mill." So here we have the principle having been debated in the

long title and certainly in committee I would like to quote from Beauchesne, page 220, paragraph 712, (3) "In Collll!littce the details of a measure are the prL~ary objects of consideration with alterations in its provisions• being proposed." So I would therefore rule the hon. member for LaPoile (Mr. Neary) out of order on order. l'.r. Chairman . the point of MR. I. STRACHAN: l1R . CHAIRMAN : The hon. member for Eagle River. MR. I. STRACHAN: Mr. Chairman, I do not want to appeal you ruling or argue with you ruling. If we have to be specific in Committee then let us be specific. We are discussing at the moment

section l, '·This act may be sighted as a Labrador Linerboard Limited Agreement Act, 1979. ' Then, of course if we agree to pass this

section that we are now debating then we move on. Of course, there are other sections further down where we can bring up a number of points, the principle agreement,for instance, is defined, there is definition, we can refer to the appendix in which we start dealing 3722

"'ay 13, 1979 Tape No. 1451 OW - 2 MR. STRACHAN: with some very, very specific parts of the sale of the mill. So then in trying to apply myself to this very narrow section,as you stated, the Yery narrow 3723

May 18, 1979 Tape No. 1452 MR. STRACH&'l: section, what you are saying here then basically,is that if we agree with

section 1, if it is passed; the Labrador Linerboard Limited Agreement Act, 1979, the agreement 1 that we therefore agree with its sale. In the earlier debate here in NM - 1 which you gave your ruling the minister indicated quite clearly.and it was indicated earlier on in the House,that before we get into the thrid reading and the sections here, that what would occur would be that t::12 - laid on the table of the House would be all pertinent documents, all necessary documents concerning the sale of the Linerboard mill so that this agreement can be agreed to, or disagreed 1of course,by some of us.

What we are asking, Sir, and what has been stated here is that the agreements were tabled, or the schedules that we asked for were tabled by the minister in this

section here so that we could get on and now debate the sections of the bill. What astonishes us1 of course,was that what was tabled by the minister were a number of things but,of course,not the pertinent things that we would like to see before we get onto these sections here and agree to these sections here. we see that when we ask for a balance sheet, an accounting of the corporation that there is no accounting of the corporation to be presented in this House. It cannot be presented, there are none.

We can look at, for instance, and I make comoarison here, to the Hydro report which we can through and although it is the bare bones of the matter 1 certainly we can look at the consolidated balance sheet and we can look at the income and returned earnings and the changes in the financial position and the notes and so on and we can very carefully go through this and read this and if there is any part of it we want to discuss ever in Hydro we can therefore discuss it.

Similarly, I would state that I have a small company and I have 7for income tax purposes in a small company and for the satisfaction of the shareholders, I have to prepare a 3724

:•.ay 18. 1979 Tape No. 1452 NM - 2 ba~ance sheec, an accouncL,g to the sh~eholders a~d to the L,co~e tax ?eople. w~c we r.ave asked !or here :md whac has been de.>'\ied us, a11d we there~ore cannoc allow dus

section one, to agree ;:hat .!.t: is an agreement~ what we have asked !or is ~, accouncL,g of ~~e ~brador tiner~ard mill . It is astonishing that eve~yone of us here ar~ everyone in the Province i s a shareholder in Labrado -r LJ.nerboard. ~le have a right therefore, the same as my shareholde rs in this small company, the same as everyone in chis Provinc e is a shareholder in Hyd~o. a Crown corporation, . 3725

Ma}· 18' 1979 Tape 1453 PK - 1 Mr. Strachan: that we have a right therefore to have placed in front of us an accounting of the financial position of the Labrador Linerboard mill. If we cannot have that, how can we, in specifics here, how can we agree that this bill may be cited as the Labrador Linerbaard Agreement Act? Haw can we agree to go through this unless we have all pertinent information? How can we approve of this Agreement Act? We have to vote against it, we have to vote that we do not approve of this, because we have no accounting, no accounting has been placed in front of us.

And we have been told by the minister, in what I thought was a strange and shocking statement, that there are no accountings available, there are no details of finances available_. that they do not have like Hydra an accounting, financial positions that we can look at. So these are the paints that we are getting to and we will have toJaL~ost every time that it is mentioned here, in specifics, the sale setup.

For instance, if we go down through the principle of the agreement it refers to a subsection, appendix, or we can get into the subsection, appendix, which is referred to in 2 (a) , and 2 (b) , and similarly all the way down we can argue ad infinitum, go an and on arguing, but I how can we agree to these subsections unless we have an accounting of the financial position of the Labrador Linerboard mill"; And as far as we are concerned it is the right of every one in this Province to an accounting of the Labrador mill. MR. NEARY: Three hundred million dollars. MR.

STRACHAN: It is astonishing to find aut that the minister in his introduction - MR. CHAIRMAN (MR. CROSS) : Would the han. member yield for a moment? MR. STRACHAN: Sure. MR. CHAIRI-'.AN: I am pleased to welcome to the gallery ten Grade Vll students from Laval High School in Placentia, accompanied 372S

May 18, 1979 Tape 1453 PK - 2 Mr. Chairman: by their teachers, Brother Turner and B~other Howard. I know all han. members will join me in giving the usual welcome to these students and their teachers. SOME HON. MEMBERS: Hear, hear! MR. CHAIRMAN: The han. member for Eagle River. MR. STRACHAN: Mr. Chairman, what I am trying to state here is that what is good for the goose is good for the gander. If the minister can stand up and table some documents-but state quite clearly in discussing this

short title under this Clause, if the minister can state quite clearly that there are no accoUnting positions, no financial positions to show1 the books of the company or the corporation are not available - he does not know even if they can have a position such as the Hydro position, that these are not available, then as far as we are concerned how can we allow this

section to pass until we can see it. We are talking about S300 million. We are talking about a sale, a Linerboard Limited agreement, a sale. And then we get down in the subsections of this to see the rights of the vendor and the rights of the company or corporation who are going to buy it. Surely in this situation here we have got to get into the details. We have got to get down to the fine tooth- combing, and this is what we are trying to do here.

It is an astonishing position that what we are saying is that we are selling a $300 million business without any financial position, any financial accounting, any statements, balance sheets, sales contract being tabled in the House and shown to the people of the Province.

That S300 million is the cost of ' it, and everything is aboveboard, there is no problem with it; then what is the argument: Why can we not have something the same as Hydro can produce, a Crown corporationlor something which even us as a small private company has to produce for income tax purposes have to produce, must produce, in fact, we would be fined if we do not produce it, charged in court if we do not produce it every year, given a leeway. What we are stating is that something for Labrador Linerboard exactly the same 372'7

~.ay 18. 1979 Tape 1453 ?!< - 3 Mr. Strachan : as this, which is by law requi red, cannot be tabled i~ this House. So we therefore have co agree t~at this bill will ~ called the Labrador Linerboard LiQieed rtqreement Act , How can we agree co ~~at when we have no accounting? !t just cannot be done. !t ~s impossible. And ~e will continue to argue that there muse be some accounting to ~~e people of this Province :or the operation of Linerboard and !or the sale of ~i~erboard since we a=e 1 in et!ec ~ , coming to an agreement here which is after the !act .

It is agree d ~~at what we are doing here is debating something which has already occ~~ed. that ~~s is retroa~-ive, the sale has occu:red, and we are now getting down to agr eeing here to this Agreement Act, we are now getting down to saying tha t wbat has happened, the hor se has ~ow bol~od, ~~d we are going to close ~~e door . Surely it must be done , 3'728

May 17,1979 Tape No. 1454 AH-1 !-!R. STRACH.li.N: it must be placed on ~~e table of this House, all the accounting, the balance sheets, the market contracts, the sales contracts. The financial position of the Linerboard must be placed on the table of this House. We must see it so that we on this side and all the people of this Province can see that,first of all 1what we are selling is correct - not the fact that it is going to open up. It is 1 in a political sense 1very good for it to open up and provide jobs and get moving and go on. That is fine.

That is wonderful but at the same time we must have an accounting. The job of this House and the job of this Committee is to make sure that in this subsection that we deal with here, we must look at it very finely, filter through it, sift through it and find out exactly what the situation is with Labrador Linerboard. How can we be asked, Mr.

Chairman, to agree, to call this, "The · Labrador Linerboard Limited Agreement Act,l979," which later on would be retroactive to the sixteenth of November,l978 1 for the sale of a public corporation, the sale of something which belongs to each and every one ~f the people of this Province without ever having an accounting, a financial accounting to the people of the Province~ It cannot be done.

Certainly in a private company it would be certainly immoral if not illegal, immoral certainlylto try and sell something without going through the Board of direct~rs, to try to discuss with the board of directors exactly the situation. And although we may,through a political arm of this House form a smaller board of directors,they 1 in essenee 1 were entrusted with running this Labrador Liner board Corporation for all of us in the Province.

And what we are stating here, before we agree to this,is that we would like to see as shareholders of the company - not as directors but as shareholders of the corporation - the financial position and an accountability, a financial accountability of the Labrador Linerboard mill over the last number of years, certainly the last year, before we can agree to the sale of that mill to a 3729

!-lay 17,1979 Tape No. 1454 AH-2 MR. STRACHAN: private corporation or to anyone for that matter. So we must place on the table of this House,and that is what we have been arguing about, we must place on the table of this House as far as we are concerned,all data,which the Premier,! believe,had agreed to, all cata concerning the Labrador Linerboard operation.

For ths minister to stand up and state that there are no consolidated balance sheets, that there are no financial positions, income and retained earnings, the change in the financial position, the sales operation, that there are none for the Linerboard or if there are they certainly are not available to us here 1 then how can we argue and how can we discuss the sale / under the--Labrador Linerboard Limited Agreement Act? We cannot. There is nothing to sell. We do not know what we are selling. We are getting no information to do it with. So, Mr.

Chairman, I think that. we can obviously - as your ruling states here, we must get into specifics and not get involved with the principle. We will get into the specifics and deal with the specifics but it is obvious that we can play with words and move around and make sure that what we are discussing all the time is the agreement. For instance in

Section 2(

a) we talk about agreement and as qualified by

Section 5 set out in

Schedule B in the appendix, we can talk about the principal agreement, we can talk about selling some~~ing which is already sold, agreeing here to sell something whichwas already sold on the sixteenth day of November 1978. W~ can get into all these specifics of the sale set out in detail here and we have done so many, many times in this House. And so we will >of course, find the mechanism in order to be ar.le to carry on and to do this. But what we are asking for is this, to place on the table of this House,the accountability, ~~e financial statements of the Labrador Linerboard Corporation prior to the sale, the exact position of it, the previous sales centract, the previous situation 3730

~ay 17,1979 Tape No. 1454 AH-3 .'!R. STRACHAN: of it so that we can see what we are doing here and did we get a fair dollar for the operation. Was it sold for a fair price? MR. NEARY: are getting at it. MR. STRACH!'-1>{: That is right. Now you So what we are arguing here then is; is the asset we have, which all of us oun in this Province, that 373:1

May 18, 1979 Tape 1455 EC - 1 MR. STRACHAN: asset, a linerboard mill in Stephenville, is that asset that we are about to sell or about here to agree to sell, everything we think it should be? Are we getting every dollar, every penny, from the corporation purchasing it? MR. NEARY: Yes, that is right. MR. STRACHAN: And we therefore must argue - MR. NEARY: Right on! MR. STRACHAN: - that until we know the value of that possession, ;:,ecause it is ours, Mr. Chairman - MR. MARSHALL: Mr. ChaiJ:man, on a point of order. MR. CliAIRMAN: (Mr. Cross) MR. MARSHALL: A point of order.

The hen. gentleman is talJc.ing about issues such as whether we received a fair price for this mill. This is a matter that has beendetermined by this House in seccnd reading~ Now it may so happen that the hen. gentlemen may think that that is not a good price. They may think, as they said, that it is a bad deal., and they may feel that this is not the type of industry that should go in Stephenville, but as a matter of fact, the House has al.ready resolved this issue, It has already supported the government's position that we sell the Linerboard mill for this price.

And when the hen. gentleman is talking in those terms he is talJc.ing about the principle of the bill and the very basis of it and thus is out of order. MR. NEARY: Go away, boy! What are you trying to do, muzzle us over here? Are you ashamed to produce the records? What are you hiding? Produce the records. MR. STRACHAN: What I am arguing about surely, is not the principle of the bill. What I am arguing about, Mr. Chairman, is that there is a

short title here which we must agree to. The short ti tie reads that this is Labrador Linerboard Limited Agreement Act, 1979. Whether we agree that there is an agreement or not, we say there cannot be an agreement until we know the full details of what the operation is worth. We are not arguing whether it is a bad deal or we have a good deal or what kind of deal 1 all ·;o~e are arguing is that without the information, Mr. Chairman, 3732

May 18, 1979 MR. STRACHAN: MR. NEARY: MR. STRACHAN: make. MR. CHAIRMA.'l: (Mr. Cross) Tape 1455 EC - 2 we cannot say what kind of deal it was. That is right. And that is the point we are trying to To that point of order., I feel that '"nat has been debated in the principle of the bill, is an agreement possibly to sell. As to whether or not the price was a fair price that was gotten, I think that can be repeated. I rule that there is no point of order. I would ask the han. member to continue. MR. STRACHAN: Just to finish off, then, Mr. Chairman, on this specific part. What we are asking then, Mr.

Chairman, before this goes through Committee stage here, before we agree that this Act may be cited as the Labrador Linerboard Limited Agreement Act, 1979 - what we are asking for is that before we agree to that in specific - not principle, but in specific - and all the other sub-sections of this bill - what we are asking, Is there going to be any accountability? Before we agree to this Act, before we agree to this statement here, are we going to be told whether the operation was worth ~1, ~100 million, $500 million? We can then make our judgement whether it was a good deal, a bad deal or a proper deal.

In order to make that position clear and to agree to this

short title, before we agree to that we want to see on the table of the House a total accountability of the operation. MR. MARSHALL: MR. CHAIRMAN: (Mr. Cross) MR. MARSHALL: Mr. Chairman. The hon. the Government House Leader. Mr. Chairman, first of all, I would like to say that from any objective assessment, this is the last government that is going to try to keep the details of the fin;mcial condition of any Crown corporation or of the government, itself, from the people of this Province. I will not allude to what ~~e hon. the member for LaPoile (Mr.

Neary) said, because Your Honour has judged he is out of order, so I suppose it would be out of order for me to even respond to him except to say that when the hon. member indicates that 3733

May 18 , 1979 Tap e 1455 EC - 3 Hl!.. MARSI:!ALL: this agreelliSnt, itself, is illegal becalJSe the orig.inal legislation said it could not be sold to any concern other than a Crown corporation within five years of that original Act, other-rise and by consent of the Legislature, this is the very thing that is not being done now but .haa been done already in second reading, Mr. Chainnan. The hon. the member for Eagle River (Mr. Strachan) Calll8 up with points that require one to address oneself to. 3734

.'!ay 18, 1979 Tape NO. 1456 DW - 1 MR. W. 1-'.ARSHALL: and he asks how can we possibly first of all- nowwhat they are asking for is certain financial details of Labrador Linerboard mill. Labrador Linerboard mill is now to all intents and purposes out of existence. It is now being taken over through the offices of this government by Abitibi Price which is going to put it on a firm foundation. So he asks· how can we make the judgement? Mr. Chairman, there is plenty .of information available to the Opposition and the Opposition well know it, in order to make their jud~ement and assessment on this point.

Year after year since the takeover of Labrador Linerboard, this creation as a crown corporation there has 7 as a result of the actions of this goverrunent 7 come before this '.l!ouse bills detailing and stipulating how much the Legislature had to vote of public funds to bolster Labrador ~inerboard mill. And we know how much they are and that amounts to,unfortunately $300 million. I am not going to get into the reasons why it was spent except to say the hon. gentlemen opposite should well know the reasons why they were spent because they were the ultimate cause of this expense to the public.

So they have in their possession, Mr. Chairman,they know the total amount of involvment of provincial money in Labrador Linerboard mill and they can use that as an assessment wi~~ respect to the amount of the purchase price or any other judgement that they wish to make. Now G~e fact of the matter is, I think that the hon. gentlemen opposite are being rather dogged in their approach. Certain ones of them have indicated that this is a bad deal and have gotten across to the public that this is a bad deal. I know that certain of their colleagues, many of them do not agr~ee with them.

But the fact of the matter is, we have this agreement now, we ha\•e the Opposition sticking in on it1 and they can stick in if ~~ey want to all day today and all day the next day and What have you 1 and if it gets to the stage where they continue to dig in their heels,as they can under the rules of this House)and L~ey do not think that this House is competent 3735

~ay 18, 1979 Tape No. 1456 DW - 2 MR. 1;. AARSHALL: to make the judgement 1 I am sure the people in Stephenville would be very interested to know that the Opposition are really 1 in effect 1 taking a position because they think it is a bad deal in attempting to do everything they possibly can to delay the operation of it. Now the reason why these points are being brought up is not because the hon. gentlemen opposite do not have enough information,at all.

The fact of ~~e matter is they have enough information,they know the to~al amount of involv­ ment of provincial money in Labrador Linerboard mill and surely that is quite enough to assess the situation. Really what,in effect, they are doing is they are attempting to find sertain details, they are making a_llegations - from one particular member~ o.bviously, it comes from time to time and there is no mystery as to why these questions are being made or no mystery as to why they are being made at the present ti~e,with a federal election underway,in their attempts to cast innuendos and smears in certain quarters.

And all the govern­ ment is interested in in this particular bill is putting an industry which was defunct and on its ears in a viable position to provide some 600 to 1,200 to 2,500 jobs for Newfoundlanders.~d if the Opposition wishes to be dogged in using the rules of the House in delaying it,as I say,they can and I am sure the people of Stephen­ ville and the West Coast of Newfoundland and indeed all of Newfound­ land itself will judge them accordingly. Now in connection with this,when this bill was introduced in second reading the government made its position quite clear.

There were questions raised about certain exhibits to the agreement itself that appear, LLL-1 is the audited financial statements of the company. And the minister did not,when he was in reading give what the member for Eagle River (Mr. Strachan) had the impression that he said. The member f~r Eagle River said that the minister said all things pertinent would be given and that is not exactly the··-way it '"as. I heard the hon. minister himself when he got 373S

:-lay 18, 1979 Tape )lo. 1456 OW - 3 up and he l~dicated that he would have to assess !Ji.t.'l res?eel: to ::he items that were asked ~r as to ..,he::!:er or not they could be 9iven out:. And the sole cric.eria t.hac. he was using was not an attempt c.o hide thinqs from the public but. it was purely and simply to assess as to whec.her or not any of ~~s information cou l d be of bad effect upon Abitibi ?rice which is taking over t he ccmpany,wh e the r it will affect ic.s operac. io os in the takeover becaus e this is one - MR.

S . !reARY: Hho are you ?roc.ecting, Abic. i bi ?rice or the taxpayers'? !'!.~. w. !'J\.RSiiJU.L: - of the areas, as has a l ready been indic ated , where ~~e problem was with Lab rador Linerboard. It is was in the one hand a C:Own corpo ration and being <! Crown corpo ration cer tainly the people of c..~e !'rovince were ent:itled to l<now the deuails of the expenditures :;hac. ·.-ere made !rom c.ime c.o time . sue. as against ~"tac.,l!llfort:unately, this Crown corpora1:ion '.#aS also ....... involved in co~rcial a~vit.ies and t o ~ ive out the information at the time ~o'Ould have been c.o 3?3 7

Hay 18, 1979 T!lpe No. 1457 NM - l MR. ~!ARSHALL: give out unfair advantage to the competitors. Now in this particular one that is asked for, these particular details, I assume the han. gentlemen there opposite are really asking for a tabling of LLL-1 that appears in the principal agreement in

Schedule A that is attached there. The fact of the matter is,that the government has no desire whatsoever to withhold details from the public of this Province 1 but it is a matter of assessment as to whether or not those financial statements once released are going to cause any bad effect upon the proposed operations of Labrador Linerboard mill in its new characteristic under the management of Abitibi Price.

And whether the han. gentleman likes it or not, the fact of the matter is the government is determined to do everything it can to put this industry on a viable basis and in order to put it on a viable basis it has to consult with the partner which has been entrusted with the management of it1 that has been sold this asset of the people of Newfoundland.

And I can tell han. members opposite that if the government finds that it is not in the interest of the Abitibi Price judge, it is not in the interest to give this information out because it will affect their relationships in the market, because it will affect their bringing into being this project 1as it may well ~ecause Abitibi Price operate against competitors, then as far as the government is concerned it will assess it and I am pretty sure that the government will assess then that if it is reasonable at all,the interests of the people of Newfoundland will dictate they take due credence to the wishes of Abitibi Price.

Now what I am saying is that the government will consider this and if it is necessary, if it can possibly be given out it will be given out in due course. But we cannot give it at this particular time. And that is really not what the Opposition opposite - all they are asking for is the balance si1eet here, and the balance sheet they do not really need to know you see, Hr. Chairman, this information 3738

)!ay LS, 1979 Tape No. 11157 NM - 2 ~o need to be able to jcdge the worch or benefit of this act . They know they do not need that because they r4ve ~he information necessary to ma~e this judgement . They know ~e amount of money t keep saying that nasbeing poured L~to this project ~y ~~e people of tr~s Province over a period of tl.!ne. T!ley know t!1e purchase price that is being received. They know the ~enefits tnat are being received, the jobs that are going to ~e in western ~ewfoundland, so they know all that and tl;at is not the pu...-pose ! su.i:lmi~, l'.r . Chairman . for their enquiries.

The purpose of their en~ui:ies is to see what they can do to ~lot ~~s parcicular deal itself which they themselve s after all nave stylized as a bad dea~ for the people of this ?rovince. In effect they are against this deal and chis is the reason why they are 1:.ryinc; to use the machi..~ery of this Collllilittee to de lay ::he operation of ::his !:li1l and I hope ~1-tat the message gets to the people of Stephenville. I can only say that I hope that the hon. me!!!bers there opposite will reflect, and I hope the hon . member for Eagle Rive r (Mr. Strachan), and the hon. member for Terra Nova (Mr.

Lush) can ?revall upon the de facto Leader of the Liberal Party ar~ get him to come down to a reasonable posl.tion on t..~s. and realize t..l-tat dus is for the bene~it of the people of Newfoundland. Now there is no doubt about it that ~~e hon . member has a c~a~n view, ~~eir Leader has a certaL• view and their Leader has been a guest of a Euc;it::.ve from justice for ~his Province who haci an interest in this mill and from time to tl.me he asked questions with respect to the mill itself. But I say to this Committee and to this 3739

:Olay 18, 19 79 Tape No. 1458 SD - l MR. W. :1ARSHALL : Ho~se that John c. Doyle is not going to affect the position and the interest of the people of Newfoundland and the provision and the chance to provide good, stable, strong, longlasting employment from a project which, in its original character, was o.•e which was doomed to disaster anyway and thank heavens that this Government got in office to be able to take it over and to provide for the people of this Province properly on a sane and rational basis and thank heavens we have Abitibi Price.

Now, if we are going to continue on in this '"ay when yo~ have Abitibi Price out tnere now working to bring a~~t this project itself, if the House does anything other than enth~siastically endorse this measure, as most members of the Ho~se on both sides do except the hen. member for LaPoile (~tr. S. Neary) then,in effect,what you are going to have, you are going to have a very detrimental situation occur and we are going to have a sit~ation where we could impede the progress of this very valuable industry and tne involvement of t.':lis strong company in this Province. AN HON. MEI·IBER: MR. CHAIRMAN: (Cross) i1R.

S. NEARY: Hear, hear. The hen. member for LaPoile. Such a small narrow-minded tirade Sir, in this hon. House I never heard before in my life. lvhat a devio~s mind that hon. gentleman must have, Mr. Cll.airnan. And how he ever got John C. Doyle into the debate, well, of course, I understand why. because his predecessors always used this gentleman as a scapegoat. When they wanted to cover up, when they wanted to divert attention from their wrongdoing and their misrnaP~gement they always seem to drag Mr. Doyle's name into it. But that is wearing very t.':lin in the Province, Mr.

Chairman, especially with the news media. Did you notice, Sir, did you notice in that outburst by the han. gentleman 1 that suall narrow-minded outburst that t.':le hon. gentleman answered none of the charges, none of the accusations that have been ~ ade. The hon. gentleman retaliated by saying that he knows what we are up to, that we are doing this 3'7'40

~lay 18, 1979 Tape No, 1458 so - 2 :-tR. S, NEARY : because there is a federal election on. And the han. gentleman said, "'.-lill the hon. member for LaPoile be reasonable," Well, Sir, I am satisfied to be reasonable and here is my proposition to the Government, My proposition to the hon. gentleman who spoke and then ran out of the Eause as he always does. Maybe he will take his bike now and ride doWn around St. Thomas· or \'lindsor Lake somewhere and get his batteries recharged and then come back and try to squirt some more poison in the House. The hon. gentleman can squirt a little more venom probably.

So, Sir, here is my proposition to ~~e hen. gentleman if he wants us to be reasonable. The hen. gentleman made a statement, Sir, that every member of this neuse knows that $300 million was spent on Labrador Linerboard. $300 million was spent to finish the mill, to start it up and to maintain it over the period that the Government took it over and operated it. That is a statement of fact, Sir. Everybody in the House knows that. I know it, my colleague from Terra Nova (Mr. T. Lush) knows it, my colleague from Eagle River (Mr. I Strachan), Burin - Placentia West (Mr. P. Canning), everybody knows that.

But the hon. gentleman stopped there, Mr. Chairman, ar~ the hon. gentleman could have gone a little further and he could have said what the Opposition wants is access to the records. There is an accounting of that $300 million, that is what we are asking for, that is what the people of Newfoundland are aski.ng for and that is what the people of Stephenville are asking for because everybody but everybody in Stephenville knows ~~ere was corruption and wrongdoing in connection with tne management of that mill. Everybody in the Provin~e knows it except the Minister of Justice (Mr. T.A. Hickman).

He gets up and wants to defend the people who comrnit"t:ed the crimes and his colleague, sitting to his left, wants to get up and defend Abitibi. lie says, "If it is going to affect Abitibi then we are not c;oing to put t.~e information on the House." Nhat about the poor old "t:axpayer7 The han. gentleman was elected to fight and defend the

Aay La, 1979 Tape No . !.458 so - 3 :-IR. S • NEA..~ : rights of :!':e taxpayus not 1\biu::u., :lOt one of :.'le weal::.'riese co;:"?Ora:ions on t.:"le llort.n Al:lerican Cor:t~nent , Paul Desmarai s' ouefi e, ~->we.:: Cor?orat.ion of Canada , t.'te hon . c;en::l~an ,..as r:.ot. elec:ec for t:.'lat . Me, ~t r. Cha1=an, let :e say that: ::.'1e infcn:~ation ::.~c the miniscu ?ut on t."le cable of ::he House this morninq •.te have oot e11en seen it. yec,, \OC do not have copies of it . Tne agzeemenes chat were laid on che cable of ::.~e Mouse ::."lis ~Qrning , we have nee even seen c~em,

~lay 18, 1919 '!'ape 1459 ?:< - 1 Mr . Neary: They have noc been circula~ed to us yet. And we are asked to w4ke a judgment on giving away this mill to one of the riches~: corporations on the North .American Continent for S45.S million, plus tax concessions, plus other concessions from this government, and the Gover~~enc o£ Canada, when in accual face they are <;et:"ti!'lg a $750 million asset for nothing. They will have money in their pocket when it is all over.

And we are asked now, t.'1e gentle!T'.an asked us to approve ~'lis Act cit~ as t."le Labrador LL~erboard Limited Agr=ement. i'lell, Sir, ! will make the hon. gentleman a reasonab le proposition, i.E u"lat is what tie is looking for. And we will go. right back to square one. 11r. O:ai.r!l'.an, ! am prepar ·ed to let this matter crop about the SJOO million and about the marketing of the linerboard, al~ the sk\O.lduggery chat •,o~ent on in the marketin<; process, the corrupcio~ and th~ fr~ud. 1-U~. ~.Al<SF-AI..L : M.!L Nt:A..'l.Y: 1".R. :1,;.RS3ALL: MR. Nt:A..~: Alleged. I beg your pardon? Alleged. Alleged Eraud .

Hell, :-tr. Chairman, ;.(e have a case, Sir, in =ront of us of 'Nrongdoing, and the hon. Minis~r of Justice (Mr . ~ickman ) knows that, to puc money L~ a secret account in serrnuda, money chat should have gone to Labrador Lit>.~rboa.rd is a straight fraud on the Labracor Linerboard . t1R . ~!A RS iiALL; MR. NEARY: Whac do you know about Liechtenscein? Well, Sir, I could tell t.'1.e hon. - yes, iz c.he hon . qentleman asks me I will tell him, the LiechFens-.:ei.n ~ac~er as the hen. ~linister of Justice knows to his chagrin,has been put co bed forever not - ll.N HON. !-!E!·!BE::l.: Oh, no.

Oh yes , Sir . - not guilty. T~ere is such a t.i-,ing as double jeopardy in this country. The Sociece Tran s­ shipping thar t."le hoo. gencleman is ::e::erring to,t.hac mat~er •.;as set~led 37~3

May 18, 19 79 '!'ape 1459 P!< - 2 ~.r. Searv: in ~3e Quebec Superior Court. '!'.Jo decisions were handed down, and the documents , the ~inis:er of Justice (Mr. nickman),much co his embarrassment, had to return the documents to Canadian Javelin. It has not been settled in t~e ?rovince of l<ewfoundland. ~. ~..AR'!: !t has been - well, :-!r.

Chai:::::nan, not.hwg has been settled in t~e ?rovince of Newfoundland, no~ng where you have - well,what kind of jus~ce do we- all we have in this ?rovince is - well if t.he Mini51:er of Justice and his colleagues feel like taking you out ane ~ging you, they can do ~t . politlcal personal vendettas. ~nd the hon. gentleman should be 3Shamed. ! w~uld be ashamed to admit that I headed up ~~at depar~e.~t with the hon. gentleman's track record. :{R . HICIC'1AN: \~a it until the report comes in . M.~.

NEARY: ! ...:ill wait u.ntil the report: comes in, do not worry. ! have my report now in front of me, down :n my office. :-IR. IUCKMi\N: Wait until it comes in. !'!R. NV.Ri': What report is the hon. gentleman ::aU::ing about? What report is the hon. gentleman ~allcing - Mr. Ct'o.aL'"!Ilan, the !'\on. gentle:nan is over tl'lel::e, "'.Vait for this! Wait =or tirls!" "':'he hon. gentleman had better be careful about chis." Look, Mr. Chairman, let me tell the hon . gentleman that he does not frig~ten me in ~e least.

When you have got the faces in front of you, when you have got che facts, and the hon. qeJ'It.lema.n who has orc!lestratec, !'lim and !'lis for.ner colleague, have orchestrated Canada's National Police Force =or the last. six or seven yea~s, and it is coming to an end. :-tR. iiiCKNAN: That is not true . Tha~ is true, Sir. It is ~otally untrue, Sir.

May 18, 1979 MR. NEARY: Tape 1459 I can tell the hen. gentleman, Sir, - On a point of order. PK - 3 MR. CHAIRf'.AN (MR. CROSS) : A point of order has been raised.· MR. HICKMAN: These comments by the hen. gentleman are totally out of order. Apart from the fact that they are totally ~.mtrue J they are totally out of order, not relevant to this debate, and could only emanate from a gentleman with a weak mind. MR. $ARY: To that point of order, Mr. Chairman. Mr. Chairman, the hon. gentleman knows full well, Sir, what I am talking about to that point of order.

His colleague the former Premier of this Province went to him once and asked him if he could tape certain conversations, and the hon. gentleman said, "Well 7 of course you can for your own protection." These conversations were taped by the former Premier of this Province. They were entrusted to the RCMP, the RCMP got involved innocently. Two gentlemen, the hen. gentleman's former colleague, and the former bagman for the Tory Party brought these tapes and said, Will you hold these for us in case there is some evidence of blackmail- MR. HICKMAN: Oh, oh! MR. NEARY: - in case we are - MR. CHAIRMAN: Order, please!

The hen. gentleman when he rose to speak I anticipated he was rising to speak on the point of order. I just could not let him sort of ramble on. Certainly the hen. member for LaPoile's (Mr. Neary) statements that he has made in the last mi~ute or two have been certainly irrelevant to the debate that is going on regarding Clause (1) of this bill. MR. NEARY: Thank you, Your Honour. The remarks are in order then, the only thing is they were irrelevant to the matter under debate. I thank Your Honour for Your Honour's ruling. It is just a matter of opinion between two han. gentlemen, the minister should know that.

But the hon. gentleman said, Will the member for LaPoile be reasonable? Well I will be reasonable, 3'745 I

May 19, 1979 Tape No. 1460 NM - 1 ~ffi. NEARY: Sir, and if the han. gentleman is sincere when he is defending Abitibi, this multi-national company, and not showing any apparent interest for the taxpayers, and that is all I am interested in is protecting the taxpayers, nobody else, I am interested in getting information for the taxpayers so that they can make an assessment, will the han. gentleman undertake to do this?

We have not had an accounting, there has been no accounting of the stewardship of the three ministers who sat on the Board of Directors of the Labrador Linerboard from the time,dating back to l972 7 that it became a Crown company. Three ministers,in the name of Her Majesty, held the shares of Labrador Linerboard,in the name of Her Majesty, sat on the Board of Directors. They were not always the same people, Sir, they changed during the interim period up to the time the Labrador Linerboard closed. Now, Mr. Chairman, these three ministers spent $300 million. They varied from time to time, spent $300 million.

The han. gentleman has already agreed that that is roughly the figure, $300 million, and we agree that is the figure. But, Sir, we want to know how it was spent. Now I happen to know, or I have an idea that $155 million of that went towards the completion of the mill, was spent in completion of the mill. The other $155 million we have no more idea than my little Mexican Chihuahua what happened to it. We have no more idea if it was spent realistically, thrown away, we have no more idea how much extravagence and waste was involved in it. Now that is one aspect of it.

So, Sir, if the han. gentleman will undertake to reactivate the Public Accounts Committee immediately, and turn this matter over to the Public Accounts Committee that would satisfy me for the time being. Other than that, Sir, I will make the hon. gentleman another reasonable proposition, and I will ask the hon. gentleman to let the Auditor General go in and take a look at the operation of Labrador Linerboard from the time the government took it over and operated it. Is that a reasonable request, Mr. Chairman? Ask the Auditor General. The Auditor General up to this moment, because 374G

1-'.ay 18' 1979 Tape No. 1460 NM-2 MR. NEARY: I checked with him several months ago, has been refused access because it is not in his terms of reference. Peat-MarAick did the audit, Peat-Marwick looked at the procedures. Peat-Marwick were the ones who reported. MR. MORGAN: (Inaudible) Doyle. MR. NEARY: Ah, Mr. Chairman, the han. gentleman thinks a leak of a police report is very important but when you are talking about $30 million or $40 million of taxpayer money that has been robbed and stolen that is not worth talking about in this House, not worth talking about.

And I am surprised the press, Sir, $300 million, they have written more editorials, more newspaper items about a leak of a foolish old police report than they have about $300 million spent by the government that they refuse to account for in this House. Just imagine, Mr. Chairman- Look, if they are worried about my style, or G~ey are worried about my credibility, good for them, but what they should be worried about is not me, if they are worried about my raising it well I will get somebody else to raise it, if they can do a better job than I can. They should not be worried about me. and Doyle.

They should not allow themselves to be diverted to Panama They should look at the problem head on, $300 million of taxpayers' money spent and no accounting given to this House. That is the argument, Sir. know what we got here. That is the point, and therefore we do not And the oL~er thing, Sir, is the marketing of the Linerboard, the marketing.

If my hon. friend, I will again make him a reasonable proposal if that is what he wants, if my han. friend will let a select committee of the House, the Public Accounts Committee or the Auditor General take a look at the marketing of that Linerboard, Sir, that will satisfy me for the moment. I cannot be any more reasonable than that, unless I just surrender as the han. gentleman would like for me to do, give up, surrender, cave in, knuckle under and allow this great scandal to go on unchallenged just because Abitibi is now taking over and three months from now the whole thing will be forgotten. Well, Mr.

Chairman, I have news for the 3747

May 18, 1979 Tape No. 1461 NM - 1 MR. NEARY: hon. gentleman, I can tell the hon. gentleman right now that I have no intention of letting this scandal be swept under the rug, none. And if I go and offer myself in the next election and I go down the tube, well and good. Outside the House I will fight it through the courts. $30 million to $40 million of taxpayer's money stolen through corruption and collusion and the hon. gentleman sits there day in and day out making snide remarks. MR. MARSHALL: MR. CHAIRMAN (Cross) : MR. MARSHALL : A point of order. A point of order has been raised.

Probably as much for the blood pressure of the hon. member as anything, Mr. Chairman. The fact of the matter is, Mr.

Chairman, look this item that the hen. gentleman is now speaking abou~, has been raised time and time again by him, and there are places in the House where he can raise them from time to time, we are now talking about - we are going through clause by clause on this bill with respect to the Abitibi Price involvement in Stephenville. and the matters that he is getting on, which are certainly interesting and all that but the fact of the matter is; the fact that they are interesting does not make them relevant and the hon. member is not being relevant in the matter. MR. NEARY: ~- Chairman, I am answering, Sir.

Your Honour did not rule, nor did I raise a point of order when the hon. gentleman was speaking on this particular clause, and I am merely answering the hon. gentleman, Sir. If I am out of order then the hen. gentleman must have been out of order. I am answering the hon. gentleman, Sir, and I am trying to stay relevant to the mat.ter that we have under discussion at the moment and I would submit, Your Honour, that I am in order and that the hon. gentleman is just trying to silence me, he is trying to cover up, and he is not prepared to give the House the information that we are asking for. MR.

CHAIR!1AN: To that point of order. I would have to rule on that point of order that the hon. member for LaPoile (Hr. Neary) 3748

May 18, 1979 Tape No. 1461 NM - 2 MR. CHAIRMAN (Crossl: has been repetitious, has strayed from the realm of relevancy. I would have to ask him to remain within the realm of relevancy. MR. NEARY: I thank Your Honour. Now, Mr. Chairman, as far as the federal election is concerned, the han. gentleman is looking for a reasonable proposal. The han. gentleman said, "I know why they are doing it." I could have gotten up on a point of order then, Mr. Chairman, because the hon. gentleman questioned our motives.

I can assure the han. gentleman that it has nothing to do with a federal election and that the han. gentleman wants a reasonable request, and I am a reasonable man, I would say let us postpone the debate on this particular clause until after the federal election is over. It is not going to change anything. The contract for the conversion of the mill is already let. So let us let it hang over until next Thursday when we come back. Now that eliminates the possibility of us playing politics with it. Will the han. gentleman agree to that? Then the han. gentleman's statement will n~t be valid. Just let it hang over.

The han. gentleman wanted a reasonable request. I am trying, Mr. Chairman, in the best way that I know how, in my simplicity and in my frustration of trying to get an ~~quiry into the marketing of Labrador Linerboard, in trying to get an investigation into the changing of the shipping contract, and all the corruption and skulduggery and extravagance and waste and mis­ management in connection with that mill, I am trying to bring it up into the light of day1 and the han. gentlemen keep trying to knock me down and not allow me to bring it up. The taxpayers want to know.

The people of Stephenville want to know in case the han. gentleman is interested. I have gone down there and they say, "Oh what do you think of the Abitibi coming in?" I say, "I think it is great. It is going to be good for the area." They say, "Yes, it is good for the area, sure, but what about all the money that was squandered and wasted down here?" 37-:.:J

:-lay lS, B79 :.IR. :-lARS HALL : :.IR. C:-!AL"!MAN (Cross) : T3pe ~o. 1461 Mr. Chairman, on a point: of order. ~ poinc of order r~s been raised.

T~e hon. gen~l~man has been called co order by Your Honour wi~h respect: eo ~e area chat he is now speak~~g. l-Ie are in clause by clause consideraeion of a bill with res;?ece t:o ~~e i~volvemene of Abi~bi ?rice and t:~e seephenville Linerboard mill and ::he rat:i:ication of ::.".at: agreement:. cis comments •,o~it:h res;?ece to what went: on when it: was wit:h1n Labrador Linerboard, the Crown cor;>oration, they are as L'lterest.L-:g as he may thl.nk t:hem 1:0 be, but ::.hey are i:relevant eo t:ris particu!.a.r debate and the consideration before ~~s Commiteee at the present eime. ~ow Your Honour has so ruled and I ~~ink it is Lnc~ent upon the member Eor LaPoile ( ~z.

Nea--y) ~o accept your ~'lg. ~he ?rinciple of chis bill, this area was open in debate when we were 3?5:0

May 18, l9i9 Tape 1462 EC - l MR. MARSHALL: debating the principle of the bill and the House has made its resolution with respect to that in second reading. Your Honour has made a ruling already, and as is typical of the hen. the member for La2oile (Mr. Neary), he says, 'I accept your ruling, ' and then in two or three minutes he is going on again in the same stream of words. MR. NEARY: To that point of order, Mr. Chairman. Of course, the hon. gentleman is trying to leave the inference that ! am not abiding by Your Honour's ruling. In actual fact that is not true.

That is a psychological approach to try to turn Your Honour against me under a camouflaged point of order, and Your Honour knows that is not true. Your Honour knows I am completely in order. I was answering the hon. gentleman about what he said about a federal election and what he said about asking for a reasonable request; and I am trying to present my case, Your Honour, and I would submit I am in order. Otherwise, ~~e hon. gentleman was out of order. MR. CHAIRMAN: (Mr. Cross) To that point of order.

The hon. the member for La2oile has, I ~~ink., again strayed from relevancy in Committee by not getting into detailed debate on the clause that is now being debated, and I would ask him to keep his remarks relevant. MR. NEARY: Well, okay, then, Your Honour, maybe I will deal with a more technical aspect of this particular clause that we have under debate. I am sure Your Honour is aware that the clause we have under debate, if we pass it, automatically rescinds the old agreement, ~~e 1972 Stephenville Labrador Linerboard Agreement Act. Your Honour, I preswne, is aware of that.

If we approve of this clause that we now have under debate, that means the old agreement is finished, . gonel That is what we are doing. I do not know if Your Honour has the agreement in front of him or not, but it certainly gives us a lot of leeway. It automatically rescinds the old agreement, and in rescinding the old agreement, of course, Mr. Chairman, a lot of questions pop into our minds. Now, Mr. Chairman, I think the main question here is, Are we getting a fair deal, as my hon. friend from

xay 18, 1979 Tape 1462 EC - 2 MR. NEARY: Eagle River (Mr. Strachan) indicated? Is this a fair deal? Are we getting a fair price for the mill? What is the value of the asset that we are talking about? Well, as far as I can learn, Sir, the value of the asset we are talking about is somewhere in the vicinity of $750 million.

The government are giving it away for $45.5 Illillion without making any attempt, "any endeavour at all to go out through the international business world to find out if anybody else were interested in that Labrador Linerboard mill to take it over and operate it to produce linerboard - without making any endeavour or any attempt at all, just struck up a sweetheart deal with their buddy, the President of the ?ower Corporation of Canada, and in return for giving him a linerboard mill, at the same time also made him Vice-President and Chancellor ~f the University.

That was his reward for taking the government off the hook. Now, Itt. Chairman, we know that $300 million '"as spent. We know the replacement value of the physical plant in Stephenville is $450 million,approximately. That is $750 million. We know in the process of operating the mill t..'lat some 400,000 tons of linerboard was produced - that is according to the government's own prospectus. Four hundred thousand tons multiplied by an average, say, of $250 a ton - How much is that? How much is it? - $2 billion worth of linerboard they produced and sold?

And in the process of doing this, Sir, $30 million or $40 million was extorted. Now, Mr. Chairman, let me ask the hon. gentleman a question. If the marketing had been handled properly, if all the money that was put into the treasury of Lai:rador Linerboard that was put in offshore accounts in Bermuda and in Switzerland and in Europe and in other places 1 if all that money had gone into the accolll!t of Labrador Linerboard where it should have gone, would that Linerboard mill not still be producing? Would it be necessary to sell it at all? Could they not have carried on?

With the demand for linerboard today never as great in the world as it is at the moment, and with the price never as high as 3752

:·tay 18. 1979 Tape No. 1463 SD - l :1R. S. NEARY : it is at the moment, could they not - I will 1:ell you what they are doing, Hr. Chairman, when they are selling this to Abitibi, t.i1ey are leaving $100 million worth of equipment in that mill, they are more or less putting a seal on it for the next four or five years, not to be used, $100 million worth of equipment, Does the han. gentleman realize that, the member for Explui~s (Dr.

Twomey)? $100 million of equipment inside of that mill will now lay tnere for ~~e next five years, will not be used, They are putting in a paper machine, Abitibi when they take it over, putting in a paper machine, it is crazy. They could be producing liner board and creating more jobs and more work. ~!R. W. MARSHALL: ~!R. CHAIRNAN': (Cross) MR. W. MARSHALL: On a point of order, Mr. Chairman. A point of order has been made.

The han. gentleman, when he is speaking along these lines, is really speaking to the consideration as to whether or not we received good value for the sale of the assets of Labrador Linerboard to Abitibi Price, and in doing so, he has, undoubtly, speaking to the principle of the bill. Now the point I emphasize, ad nauseam, is that this House has already determined ~~at the mill should be sold for the price of $43,500,000 and it has also resolved. with respect to the other itmes as a matter of policy. The policy has been accepted by this House itself.

Now, we, in COmmittee of the Whole, we do not have a second debate on the bill beca~e the House has already resolved it and Committee of the Whole is for clause by clause consideration of the bill that has already been passed. And consequent!~, the hon. member is out of order once again because he is going into the principle of the bill. MR. S. NEARY: I am sure ~~at the hon. gentleman, Sir, this may hurt his feelings and he does not want to hear what I am saying, but I am talking about, Sir, - 3753

~!a.y 18, 1979 :-!R. ',i, :·tARS HALL: :-!R. S, NEARY: Tape No. 1463 SD - 2 I heard it before. No, the hon. gentleman did not hear it before. We are talking about

an act that may be sighted as The Linerboard Limited Act which gives Abitibi a linerboard mill for a gift wili.c>1 rescinds an old act that we had and I am talking about the necessity for doing this and the conversion of the mill. I ~n perfectly in order, Your Honour. The hon. gentleman does not like to hear it, tl1at is all. i>!R, CHAIR!1AN: (Cross) To that point of order, I feel that the hon. member from LaPoile (Mr. s. Neary) ,for the last two or three minutes, has been, rather than the principle, debating as to whether or not government did get a fair price for the Linerboard Mill.

I feel I will have to rule him in order on that point and ask him to continue. c•!R. S. NEARY: Thank you, Mr. Chairman. Does my hon. colleague want to have a few words? Well, I will let my colleague have a few wor~s. ~!R. CHAIRMAN: MR. I • STRACHAN: Th