PROVINCE OF NEWFOUNDLAND AND LABRADOR HOUSE OF ASSEMBLY Volume 1 Number31 5th Session 34th. General Assembly VERBATIM REPORT THURSDAY, APRIL 29, 1971 SPEAKER: THE HONOURABLE GEORGE W. CLARKE

April 29th. 1971 The House met at 3:00 P.~. Mr. Speaker in the Chair. hpe 400 PK - 1 HON, F, W. ROWE: (MINISTER OF EDUCATION): Mr. Speaker, I have a statement which I think would be of interest to some, if not all members, of this Bouse. Several weeks ago I was able to announce that the following 0D111111unities have qualified for assistance under the Recreational Capital Grants Programme. The City of Wabush for a stadium. The Town of Lewisporte for a stadium. The Town of Springdale a stadium, The Town of St.

Lawrence for a Recreational Centre, and the Town of Lawn for a soccer pitch, I am now-in a position to announce that the following additional COll'lhUilities have qualified for assistance under this programme, the Town of Gander for renovations to the existing stadium, the!~ of Windsor for a new atad:Lum, the Town of Harbour Grace for an outdoor recreational complex, the Town of Badger for a recreational centre, the Town of Bay· Roberts for a recreation~! complex, ~~e Town of Botwood for improvements I to stadium, the Town of Grand Falls rehovation to the stadium and also assistance for recreational complex, the Town of Bay Verte for a stadium, the Town of Grand Bank for a soccer pitch and the Town of Fleurs de Lys for a playground.

Applications have been received from s0111e twenty other of the larger cODlllunities in the Province and these are nowbeing examined by the department. I might also say that applications have been received from several groups of c011111unities, where one community is not large enough, but, perhaps, five or six communities within comaruniting distance of each other have gotten together OD a COITIIIOD project.

Under this policy announced ea~lier this year, comunities which qualify are able to receive, and those that I have listed will receive, and thiA is the answer to my hon. friend's interjection a mmnent a~o, are able to receive seventy-five percent of the cost of projects including equipment for a maximum Govemaent !'rant of $180,000 to be paid 1n five equal annual installments. I have some copies of that, Mr, Speaker, in case anyone would like a copy. 20•'15

April 29th. 1971 Tape 400 PK - 2 MR. ANTHONY J. MURPHY: (LEADER OF THE OPPOSITION): Mr. Speaker; I ~onder if the hon. member would permit j.ust a short question on these, with reiard to stadium been built throughout the Province, is there any provision made for the continuence of 111aintenance on these stadiumsl I understand that is a very expensive part, the operation grant of stadi1111111 or is it just an outright capital grant to build them? MR. ROWE. F.W.: Mr. Speaker, the responsibility for maintaining or for operating these stadiums and other recreational compleD rests with the local community.

I might, say, in thia programme we are providing $150,000 maxhlum for capital equipment for capital cost of building itself, in the cue of a stadium, we are also providing up· to a maxima of $30,000 for equipment. This ordinarily would have rested on the local community, and this in turn will relieve them of the burden and thereby enable them to devote more of their ftmds to such things as paying inte~est and maintaining the existing facilities. MR. MURPHY: Inaudible. MR. ROWE, F.-W. This includes - oh, yes. Yes, indeed. MR. MURPHY: Excellent. RON. J. R. CHALKER: (MINISTER OF PUBLIC 'WOP.KS): Mr.

Spe_~er, I do not know if it is the right time or not, but I would like to table the by-laws of the C.A. Pippy Park Commission. Will we leave them until tomorrow? HON. L. R. CURTIS; (MINISTER OF JUSTICE): Mr. Speaker, it is only this morning I discovered, going through the docmaents,that the Trust Deed Javelin Paper Corporation,dated the 18th. day of January of this year, had not been tabled and it should have had been tabled. I want to express re~ret• to the House that this was not tabled before, lt 1a entirely my fault and as far as I wu concerned,! waa quite unconacioua that I had it.

The document has been duly registered. There was no endeavour to make it secret, it was a re~istered document. But. i~ -~ould have been tabled • It ws referred to by one of the hon. membe~ . :,-· a&-~Ot h•vin~ been tabled. . . . ~ . .. ;1 could no.t understand it, at the time. I will ult . leave to table it. Z0-16

April 29th. 1971 Tape 400 PK - 3 MR. SPEAKER: Before the presentation of petitions, I want on behalf of all members of the Houae to extend a moat hearty welcome to some fifty students who are here. ihey are from Grade VIII to X from the Lone Valley School at Swift Cunent and they are accompanied by their teachers, Mr. Eddy and Mr. Lockyer. PRESENTING PETITIONS MR. H. COLLINS: Mr. Speaker, I .have a petition which I have received from the community of Appleton, which is across the Gander River from Glenwood. I believe all of the people living in Appleton have signed the petition. Approximately 200 of them.

The prayer of the petition. Mr. Speaker, is that there is a great need for a water and sewer system. I have already held: discussions with officials from the Department of Municipal Affairs. There have been delegations from the c0111111unity co'IJ[lcil,in St. John's~to meet with them. Certainly, Sir, there is a real need there, because Appleton is a growing comm.unity and people have to depend on wells and septic tanks and there is a very, very real danger of serious pollution, not only to the wells, but also to the beautiful Gander River.

I understand that the Department of Health are alwo conceYned with regard to the poor quality of the water in the wells, because of seepage or drainage from septic tanks. Certainly, Sir, I have to give the request my full support and I voald hope that the Department of Municipal Affairs will also see fit to be able to meet the demands and the needs of the people of that area. I~ gives me great pleasure in tabling the petition, and have it referred to the department to which it relates. On Motion petition received. MR. H. R. V.

EARLE: I beg leave to present a petition from the Citizen's Committee of Roncontre East,siimed by some twenty-eight fishermen of that settlement. The prayer of this petition is to the effect that in conjunction with B.C. Packer's, the Provincial Government establish a fresh fish holdin~ unit at this place.

Apr!l 29, 1971 Tape 400 PK - 4 MR. EARLE: P.encontre F.ast is an isolated settlement in the bottom of Fortune Bay, which is not connected by road, it is one of the last remaining places in my district that is not connected, as the other place which has not been so far connected namely; English Harbour East,will be joined up this year. But, Rencontre East is s0111e miles removed from every other settlement and it is not likely that for many years they will be able to be connected by road. But, what has happened there,in recent times, is that the fishermen, with the encouragement of B.C.

Paker's of Harbour Breton,have become very -much interested in the inshore fishery. There is a great variety of fish in that area starting with the winter herring fishery and turbot, salmon, cod and all other species. The fishermen have shown considerable interest,and have shown considerable interest and have formed a citizen's committee to better themselves and to encourage their own effort in the community. I think, that this petition warrants very, very, serious consideration by the ~!inister of Fisheries. I have already advised him about it, and the desire of these people.

The fact that they are showing a very greatly renewed interest in the fisheries in that area, would recommend that they be encour~ged. They cannot go any further in either the holding or the selling of their fish unless they have some place in which to hold it. B.e. Packer's are very willing to buy all the fish in the area, and have shown their good faith by financin~ the fishermen-to the extend of nets and lines and twine and so on.

But, unless the fish can be held in some sort of a holding unit, I am afra14 ~that the fishermen will be quickly discouraged, as they will not have any possibly of selling the fish, unless they salt it. So I have ~reat pleasure, Mr. Speaker, in supporting this petition and ask that it be laid on the table of the House and referred to the minister to which it relates. On Motion petition recetved. ?-'R. T. A. HICKMAN: Before we move to Orders of the Day. I would like to the hon. the Minister of Social Services and Rehabilitation. direct a question to I do not know if be is within hearin~ of - here he comes.

Would the hon. -~-- . ·, minister indicate to the House whether he or his officials have received 20-18

April 29 • 1971 Tape 400 PK - 5 MR. HICKMAN: representation or a request from the wives of the miners who are on strike at St. Lawrence for short term assistance? And in that respect may I remind the Minister of a meetin, of the wives at Lawn two days ago with one of his officials, when they indicated to his officials the need that they now find for some assistance, because they have received no monetary assistance at all • .AN HON. ME}IBER: Inaudible. MR. HICIQ,1'.AN: The siners" wives. The wives of the miners, who are presently on strike at St. Lawrence, these wives are living in Lawn and St.

Lawrence and other areas. BON. S.A. NEARY: (MINISTER OF LABOUR): Mr. Speaker, I have no knowledge of any such request, but I will check it out during the aftemoon and let the hon. member know. if the field staff in the area have had seqbests. ORDERS OF THE DAY MR. CURTIS: Number twenty-nine. MR. T .A. HICKMAN: Mr. Speaker. may I with the, what Motion is it now? ~. CRO~BIE: The hon. member has called twenty-nine, Motion six. MR. HICIQf.AN: Mr.

Speaker, May I with the indulgence of ~he House ask, as this is Private Member's Day and the practice has been for Private tli.embers~.to indicate the Order of Private Members' Business that they would like to have dealt w!th and I ask the hon. the House Leader, if he would 'lllOve to Motion six, call Motion six, instead of the Orders he just called now. IIIR. CURTIS: Agreed, Motion six. ~. SPEAKER: Agreed. Motion Number six standing in the name of the hon. the member for Burin: MR. HICKMAN: Mr.

Speaker, probably the easiest and aimpliest way and certainly the.quickest way to deal with this Motion is to refer hon. members into the recitals contained therein and the recitals do set forth very clearly the isaue in this Resolution that comes before this House for debate. ZO.J9 . \

April 29, 1971 Tape 400 PK - 6 MR, RICKMAN:

Whereas the Government has annOIDlced its intention to appoint a Royal COlllllliHion to investigate the dr.cumatances surrounding . the sale by Lundrigan'd ~illlited to Hotel Buildings Limited of a small parcel of land on .Portugal Cove Road, St. John's for the sum-<>$ $50,000 which land had been pu~cbased by Landrigan's Limited two years previously for an amo1mt of $15,000 and to report in connection with that purchase of land by an agency of the Government; And

Whereas an investigation is requiTed into all of the circumstances surrounding the leasing by the Newfoundland Liquor Commission of three buildings having an area of 1,665 square feet each foT terms of twenty years 2050

April 29, 1971. Tape No. 401 NC - 1 MR. RICICMAN: at rentals in excess of $12,000 per year for each uch building and in excess of $7.22 per sq. foot per year for each such building,l~cated in Grand Bank, Placentia and St. Lawrence. And

whereas a copy of a lease tabled in the Rouse of Aasembly,dated February 1, 1969, between the Banker's Trust Company as lessor and the Newfoundland Liquor Commiasion,covering rental of the buildings located at Grand Bank, discloses that,in addition · to the high yearly rental, the Newfoundland Liquor Commission is responsible for paying all repairs, all heating, electrical, telephone and cleaning charges and all Municipal taxes or any other taxes in connection with the premises and,whereas the buildings in question could have not have coat in excess of $40 tbauaand,wbereas the owners of the buildings will receive in excess of $240 thousand for each such building,over a twenty year · period, thus receiviQg apparen~ profit of at leut $200 thousand,whereas the Govern_ment has failed to disclose the names of the two owners of the said building ,who will receive such extravagant profits paid for by the taxpayers of Newfoundland,and

whereas it is necessary and desirable, etc. Now·Mr. Speaker, this information concerning the bills of the Newfoundland Liquor Commission bas been coming to the public in dribs and drabs. Last year there were several questions put on the Order Paper and eventually,in reply to one of the questions, it -was diaco'V'ered that the rental being paid by the Newfoundland Liquor Co111111ission for this very small building at Grand Bank was $7.22 per sq. foot.

At that time the indication to the Bouse was that the lessor was the Royal .Trust Company, at the same time this Bouse was not furnished with a copy of any of the leases of the stores that are now rented by the Newfoundland Liquor Commission. Thia present Session of the House we were fortunate in obtaining. in answer to a question by~the hon. member for St. John's West, a copy of the Banker~a Trust Company lease covering the Grand Bank building • .2051

April 29, 1971 Tape No. 401 NC - 2 MR. HICIC!L\N: Mr. Speaker, the information that was tabled last year in itself indicated and must have indicated to all hon. members that something was radically wrong with the leasing of these buildings in Grand Bank, St. Lawrence, Placentia and maybe in other places. But this year, at this Session of the House, when the lease between Banker's Trust Company and the Commission was tabled, then obviously there was something more than radically wrong with the whole deal. Mr.

Speaker, it is a shocking disclosure,in my opinon, of the mismanagement of Government funds by a Commission that must report directly to the Minister of Finance and,through the Minister of Finance, to the Government. Mr. Speaker, I can speak of the buildin~s at Grand Bank and Fortune. 1n the resolution, it is suggested that these buildings could not have cost in excess of $40 thousand. I am told,by reliable contractors in Grand Bank, that the actual cost of the buildings was somewhere between $21 and $23 thousand, the land, I think, well it cost not in excess of $5 thousand and the same applies to the land in St.

Lawrence. Now Mr. Speaker, any person,who puts up a building for rent and who enters into a long term lease,maybe and is entitled to some sort ef reasonable profit.

But this is not a reasonable profit, this is absolute highway robbery when it comes to taking taxpayers money and putting it into that type of operation. lt'-Yas suggested to me last week, and I was authorized to say this by a me~ber of one of the Municipal Councils on the Buin Peninsula. that any Councils on the Burin Peninsula would be more than happy to build any building that this Government requires,under similar terms and conditions, because th~ugh the profits from such buildings, they would then be able to find the monies to pay their share required for the erection and construction of stadia and operation of them on the Peninsula.

It is something which has not only aroused the curiosity but it has aroused I suggest, the anger of the people in the area. They had no idea that this type of erection was going to cost them and Newfoundlanders generally the amount of money that they are now being called on to pay. ;,- o-·· ') ~ .) ...

April 29. 1971 Tape No. 401 , NC - 3 MR. RICKMAN.:_ Mr. Speaker. if the Newfoundland Liquor COllllllission is in a position to pay that type of rent and,assuming the Newfoundland Liquor Commission is solvent and I would suggest to this Rouse that if the Newfoundland Liquor Connission ia not solvent and if it is not making a whopping big profit then there is no hope for any institution of that kind or any branch of Government in this Province.

Then obviously the simple and easy thing and sensible and prudent thing for the Newfoundland Liquor Commission to have done and to do in the future, is to go out, call tenders, put up a building for $20 thousand and if they cannot find the $20 or $30 thousand to pay for the building; I am sure that any chartered bank in Newfoundland would be more than happy to give them a three year loan and let them pay for it, following which the building would be owned outright by the Newfoundland Liquor Commission and thereon we would not have $20 thousand going into the pocket of some person or persons un­ known in this Province.

Mr. Speaker. most leases, most commercial leases, impose on the landlord and,I would suggest,that the higher the rent the greater the obligation on the landlord to provide certain services and to provide certain maintenance and certain repairs to the building. Mr. Speaker, may I direct hon. members attention to clause (2) (

b) in particular of the Grand Bank lease. Under clause (2) (

b) of the lease,and indeed through­ out the lease, the tenant is obligated to pay not only the usual services that a tenant must provide but also to keep the leased premises in good repair, which is a landlord's responsibllty under every lease,and to pay all conceivable costs in connection with the use of this building,including the payment of taxes. Again this came as a great surprise to the Grand Bank Town Council and I am sure that the St. Lawrence Town Council and the Placentia Town Council were equally surprised,and I know that they are now taking a look at their rose.

They were under the mistaken impression, until now. that this was a Crown Corporation building and consequently not ~axable.

April 29, 1971 Tape No. 401 NC - 4 MR. RICKMAN: So if any good comes out of this. one thing will happen and that will happen very quickly, these Town Councils will submit bills for their taxes to the Liquor Commission,which unquestionably will not be paid because the Crown Corporation,theory,that has been abdicated with respect to Holiday Inns,will undoubtedly be trotted out again. Now Mr. Speaker, this is the scandalous part of this lease.

Number one - you are paying Grand Bank, and I suppose as a member for the District I should be proud that Grand Bank commanrls!for a $23 thousand building.a rent higher than the Royal Trust building, a rent higher than office buildings in Wabush and Labrador City, rentals that would put high-rise buildings in Halifax and Toronto and Montreal to shame.that I should be very proud of the fact that. because of the commercial improvement and commercial activity and the hustle and bustle in the Towns of Grand Bank and in the Town of St.

Lawrence and in.cthe Town of Placentia. that they now have leaped ahead of Halifax and Montreal and Toronto, I believe Wall Street in New York is still slightly ahead of Grand Bank when it comes to the-going rental rate. This is not the sort of thing that would make anyone proud, Mr. Speaker.

Uhen you look at the building, it is simply a small square box with brick facing, that is what the building consists of: One partition for a little office for the manager, -a counter, no longer than the row of desks on this side of the House,and steel shelves where the goods are put on display in a rather attractive and enticing manner. The rest of the building,behind,is taken up for warehousing the liquor and other spirits that they carry in the building, So the walls are not finished, the walls are open,like this type of building is usually constructed.

You could not put up a cheaper brick-face building than these Newfoundland Liquor Commission buildings in these three places. I know of others, I do know the rent.is but they are all pretty much in the same _ category. 2 0 J 11

April 29, 1971 Tape No. 401 NC - 5 MR. BICXMAR: Mr. Speaker, to charge premium rent and to pay premium rent to an undisclosed principal or principal is a shocking mismanagement of the monies of this Province. 'T"here is something 1110re to this than just driving a hard bargain for a tenant who is seeking space,in an area where space and acco1111110dation could be so easily foundi .ln an area where we have a dozen small contractors who could put up that type of building with ao trouble at all,if they could be .. given the opportunity to do so. Row, Mr.

Speaker, may we have a look at some of the rentals that are - HR. MORPHY: Before the hon. member ioes on to this, could he inform the House as to who built these buildingsl Have you any idea? MR. HICKMAN: lam not certain who built the buildings. I was under the impression in the beginning that the buildings were constructed by Lundrigan's Limited but subsequently I learned that the buildings were, at least the one in Grand Bank was constructed by a small contractor from Bonavista North, I do not recall his n&111e now. Mr. Saturley.

I believe the one in St, Lawrence was constructed by maybe the same man, I do not know. In any event it gave all the appearances and I belive this was the case that there was a sub-contract le- to small contractors throughout the Province to put up the building. The assumption,! think that most hon. members on both sides of the Bouse must have made in the beginning,was that a contract had been awarded to Lundrigan'• Limited to construct a building for the Newfoundland Liquor Commission. I can say vith absolute certainty• that the first' two of these 1 bear in mind,Mr.

Speaker, we~e built in the district that I represent in this House. Not until the first answer to the question asked by the hon. member for St. John's West last year 1 did I learn that these buildings were not owned by the Newfounland Liquor Commission but rather they were, at that time, leased by Royal Trust or•person•or persons unknown. But as this shocking story unveils and unfolds, it seems to me very clear,Mr. Speaker, that if

April 29, 1971 Tape No. 401 NC - 6 MR. HICKMAN: Government, in its wisdom, feel lt is necessary to investigate some alleged profiteering on a piece of land in St. John's 1which is bought for $15 thousand and is sold for $50 thousand. ~hat is only chicken feed, Mr. Speaker, compared to the profits that are being made under the leases on the Newfoundland Liquor Commission building. Now Mr.

Speaker, just let me give you an indication of the renta that are now being paid by the Newfoundland Liquor Commission on some of these liquor stores throughout the Province, 'Phis was in reply to an answer to a question by the then member for Humber East,on March 2, 1970. At Grand Bank, the lease is twenty years, the expiry date is February 1, 1989, the number of square feet is 1,665, the annual rent is $12,036, the rent per square foot is $7.22. ~rystown, twenty year lease, November 30, 1984 is the expiry date, square feet is 1,665, rental is $10,880, that is $6.53 a square foot. You see,Mr.

Speaker, how quickly inflation set in .between the two years-when the Marvstown building was erected and the one in Grand Bank, the rental increased by another $2 thousand. The Placentia lease is for twenty years, the expiry date is August 31, 1986, the number of square feet is 1,665, the rental $12,240, and that is $7.34 a square foot. Actually Placentia leads the pack about twelve cents more than Grand Bank. St. Lawrence,.a twenty year lease, expiry date is February 1, 1989, the number of square feet is 1,665, the rental $12,036, that is $7.22 per square foot. Now Mr.

Speaker, to give you an idea of the rents that are being charged on other buildings leased by the Newfoundland Liquor Commission, in St. John's, the Newfoundland Liquor Co111Dission leases,on a five year lease, a liquor store in Churchill Square that is l,2S4 feet, the rent is $5,016 or $4 a ,quare foot. Now Mr. Speak.er, I submit to this House that the going rental for the Churchill Square commercial area is a fairly sub­ stantial rent and considerably in excess of that which is payable in Placentia, Grand Bank or St. Lawrence or Clarenville or Marystown, yet C> 0 ,. r> ~ .Ju

April 29, 1971, T~pe 402, Page 1 -- apb MR_:__ll)CKMAN..:.. The Government through its other Crown Corporations, the St. John's Housing Corporation, drove a rather hard bargain, entered into a five year lease which was a far more reasonable length for this type of lease, and was prepared to pay what Government considered to be a fair St. John's rent, namely four dollars. Now Mr. Speaker, in Labrador City, or City of Wabush, Wabush Enterprises, they have a twenty year lease, 3024 square feet at $12,852. and that works out to $4.21 per square foot. I am told.Mr.

Speaker, and I am sure that any hon. member who has had any involvement with business operations or leasing in the City of Wabush or Labrador City. will know, and must admit that the rental in the Labrador City - City of Wabush area is pretty high in premium rentals. Yet in Labrador City or City of Wabush the rental is $4.21 in Placentia it is $7.34. In Deer Lake 1where there is a twenty year lease to the Newfoundland Liquor Commission 1it is $5.10 and the Deer Lake Lease apparently was entered into the same year as the Marystown lease.

In Deer Lake you pay $5.10 a square foot, in Marystown you pay $6.53 a square foot for the same type of building. There is• something rotten in the State of Denmark Mr. Speaker, very rotten, when you read these figures. In St. John's again. a twenty year lease entered into the same year as the Placentia lease. Gordonna Ltd., this is for warehousing space. A twenty year lease, 7,000 square feet,f2s ~ooo, annual rental 1 four dollars a square foot. These buildings are~in effect, warehouse buildings,Mr. Speaker.

There is one little office,as I recall it and the counter and that is the only thing that would distinguish these buildings from the warehouse of Gordonna Ltd. in St. John's, which again my recollection is, is a new warehouse in an area demanding premium rents,when the rental is four dollars. Gordonna Ltd. has another lease of the same date for Mount Pearl, five dollars a square foot. Mr. J.Douglas Fraser, another great landlord in this Province, or in the City of St. John's, he is renting and he is not noted for renting to the Government at a loss. He is renting a 20~7

April 29, 1971, Tape 402, Page 2 -- apb building to the Newfoundland Liquor Commission on Water Street, St, John's, for twenty years at five dollars a square foot,Mr. Speaker. In Carol Lake Shopping Centre we find that there is a five year lease, 2,000 square feet, $8,000. a year for four dollars. So the two Labrador Cities are paying four dollars and four dollars and twenty-one cents, and in Grand Bank and St, Lawrence and Placentia they are paying considerably more.

Of all the ones that were listed here, I can only see one where the rental is at all close to the going rental for this type of acc01111110dation, two really, one is at Lewisporte,where Mr. H.C.Mullett has a yearly lease at two dollars a square foot, and Mr. Adelaide Vardy rents a building to the Newfoundland Liquor Commission at Stephenville>for twenty years at two dollars and seventy-seven cents per square foot. Mr. Speaker, these are pretty fantastic rents. These are rents that are being charged to a Connnission for buildings that meet the minimum standards when it comes to construction.

For buildintts that could not ·have cost, the Resolution says, "more than $40 thousand~' I say, they cost considerably lea~, but even at $40 thousand,Mr. Speaker, at this rental, and bearing in mind that the rentals are absolutely clear profit, at the end of two years and a bit, who ever is the owner of these Liquor Commission buildings from then on, the next eighteen years,he makes a clear profit of about $200 thousand. Mr. Speaker, we have

an Act I believe in this Province called the "Unconscionable Transactions Act," and it was

an Act that was passed by this Legislature a few years ago to confer on a person who has entered into an agreement,where the charges are unconscionably high, to seek redress and to seek a change in the agreement that they have signed, or an alteration in it • . Now Mr. Speaker, I say,without fear of contradiction, that the most unconscionable transaction that this Province has ever seen, or this House has ever had before it, is the lease from the Banker's Trust Company to the Newfoundland Liquor Co11Dllission, dated February 1st. 1969. Mr. Speaker, the hon. the Minister of Justice can correct me on this, but I would sugr.est -zo:.,s ,,

April 29, 1971, Tape 402, Page 3 -- apb that this lease never saw its way to the hands of the Department of Justice. It was never vetted or approved by any lawyer acting for the Government or within the Public Service. MR. CP.OSBIE: MR. HICI()fAN: ------- MR. CROSBIE : MR. HICKMAN: I can. tell you who the lease was done by. Who? Curtis, Dawe and Fa,an. ~/IS Well, we have the answer to that, we know who~done the lease, but in any event Mr. Speaker, this sort of transaction cries out for an investigation, cries out for a Royal Collllllission.

This House and the people of Newfoundland are entitled to know too, who is this person or persons, hiding behind the cloak of the Banker's TTust Company, which is a company apparently doing business in the Province of Quebec. and in the City of Montreal. Which is a company that to m'J knowledge has no office or branch in the Province of Newfoundland. Obviously it is an attempt to put the trust company outside .the jurisdiction of this Province, because, last year,Mr. Speaker will recall,the name of the lessor that was given was the The Royal Trust Company.

That company has an office in Newfoundland, that company might be a little too close for comfort, that uybe in the future someone will be able to find out the true name of the person or persons who owns this building. With some prudence and some skillful . conniving the landlord - the lessqr now becomes the Banker's Trust Company. Well Mr.

Speaker, if a Royal Commission finds that it cannot get the information, that it finds that it cannot bring the Banker's Trust Company before it, or if the Royal Commission should find that it cannot get information from a registered agents from the Banker's Trust Company in this Province, or if it finds that it cannot get information from the solicitors who drafted this lease for the Banker's Trust Company, then obviously, this Collllllissioner can make one other recommendation to this House, and the recommendation would be totally justified in this instance, that the Government or this Legislature take the necessary steps to unilaterally cancel this lease, and to instruct the Newfoundland Liquor Commission,which is an arm of the ZOS9

April 29, 1971, Tape 402, Page 4 -- apb Government, a creature of the Government, a Crown Agency, I do not think it is even a Crown Corporation, a Crown Agency under the Alcouolic Liquors Act, to go out and lease their premises at the going rate. The going rate I would suggest in any of these towns mentioned, certainly the going rate in Grand Bank and St.

Lawrence, and Placentia would not be any higher than Stephenville, and in Stephenville we know that the going rate, and that may not even be the going rate, that may be too high, but we know that the rate being paid by the Liquor Commission is two dollars and seventy-seven cents. The simple fact is 1 Mr. Speak.er, that some person or persons unknown are making a scandulous profit out of the renting of these buildings. Most unconscionable transactions have been entered into by a person or persons unknown through the Banker's Trust Company.

The taxpayers of this Province are been taken to the cleaners by this person or persons unknown. This House of Assembly has a very solenm duty to prevent this type of transaction taking place in Newfoundland, even between private individuals. Because, if a private individual is agrieved, he can resort to the Unconscionable Transactions Act and the protection afforded there­ under. It is even more so it is even more so when we ._are talking about the willful and wanton misspending of Government funds by Government of the taxpayer's money.

It is the height of extravagance, it is the height of impropriety, it is the height of everything indecent that anyone can think of insofar as this transaction is concerned. I Mr. Speaker, have great pleasure, i"I am not very proud of thisJ I am not very proud that we have reached the stage in the history of Responsible Government in Newfoundland where we have to once again bring before this House - It has a rather (I am told and I do not recall any of this) but-I am told that back in the days of Responsible Government there were some nasty and unpleasant Commissions of enquiry and investirations necessitated.

Maybe the times dictated these things, maybe they did not, but I can recall,¥r. Speaker 1 very vividly,the day we beca~e part of the 2060

April 29, 1971, Tape 402, Page 5 -- apb great Canadian Nation. I was coming down to work,(I · did not have a car then) on the street car, and we were talking about - I was talking to a very outstanding United Church Clergyman who was sitting on the car with me, who is a relative of the Minister of Justice. We were both expressing our great pleasure in the turn of events, and that the great day had arrived. He made one comment to me 1which I did not quite understand at the time.

He said, "there is only one pity about it all, people are going back into politics today who were involved in politics in the days of Responsible Government and who remember what went on then." I could not quite get the significance of what he was talking about at the time. I asked him what he meant and he said, "you will see." Well, I have seen it. I have seen this House from time to time deteriorate and degenerated to vindictiveness to the involvement of personalities in an attempt to exclude issues, some­ thing that you do not find in other Houses of Parliament in the British C0Dm10nwealth.

A complete departure from what I believe to be the role of the Opposition in Government, namely;to try and impress each other that they have better principles, or better programmes or better policies or better capabilities, because, that is ~ow you get work done, and that is how your Province is properly governed. That has all disappeared and we seem to be inexorably drifting back to these terrible, dreadful days that you and I,Mr. Speaker, know only of by what we have been told,because, we do not remember or recall these days, but what we have read.

Days when this type of enquiry was from time to time made necessary. That is why I say 1Mr. Speaker, that it is not with any sense of pride at all that I move this resolution, not indeed. It is with a sense of feeling and remorse, and a feeling that somewhere along the line, somewhere along the line,Mr. Speaker, that the principles of self­ governemnt-and the principles of decency and honesty in politics,that we had . hoped would come to this Island in 1949, have been watered down a great deal, and indeed, may have disappeared in some instances alto~ether. That is why I am not very proud to move this motion.

I am not very proud that we have reached the stage in public life where this sort of dreadful, 20G1

April 29, 1971, Tape 402, Page 6 -- apb scandulous thing should be allowed to occur. Mr. Speaker, at the same time, as a member of this House, when once this became public knowledge, when once the Banker's Trust Company lease was tabled, and when once the rent, paid by the Liquor Co'llllllission for these buildings throughout Newfoundland,became known to this House and known to the public, and when once it was discovered that some person is hiding behind the aprons of the Banker's Trust Company, then obviously,Mr.

Speaker, there must be a Couanission and I can assure this House that even if this motion is defeated, there will be a Commission someday appointed, and the name of the person who owns the building in Grand Bank and the name of the person who owns the building in St. Lawrence, and the name of the person who owns the buildings in Placentia and Marystown, and everywhere else, where these unconscionable rentals are being charged)will be made known, and some day, and the sooner the better, some Responsible Government will take this unconscionable transaction and set it aside. Thank you Mr. Speaker. MR. NEARY: Mr.

Speaker, MR. CHAIRJ!AN: ------- Order please! I must read the Resolution. The motion is that the Government appoint a Royal Collllllission of three members with all the necessary powers to investigate the purchases by the Government and agencies of the Government of property during the last five y~ars and the rental of property by the Government and agencies of the Government during the last five years and in particular to investigate and report upon leases entered into by the Newfoundland Liquor Commission for the rental of buildings at Grand Bank, Placentia and St.

Lawrence for use as Liquor Commission Stores, the said investigation to be carried out immediately and the report thereon to be released to the public i11m1ediately upon receipt · thereof by the Government, the said Royal Commission to report on the identity of the owner of the said buildings at Grand Bank, _Placentia and St. Lawrence. To report on the reasons for entering into of the transactions i-g.volved and the reasonableness or otherwise of the rentals and other terms and conditions agreed to and the said purchase price paid, the said Royal

April 29, 1971, Tape 402, Page 7 -- apb Collllllissiou to hold public hearings and to report by the 1st. day of September, 1971. ~- NEARY: Mr. Speaker, before the hon. member takes his seat, you kind of jwnped the gun on ine there, I was wondering if I could pass him along a piece of information,in answer to a question that he asked me. earlier this afternoon. I prolllised the House that I would get the. answer aod give it to the hon. member. MR. CHAIRMAN: Doee it have anything to do with this Resolution? MR. NEARY: No it does not, but I ••• MR. C~ I think perhaps we had better carry on w:ith this Resolu.tion. MR. Ep.RLE:" Mr. Speaker, I will be very brief ; n ;"0'"'3 ~ ·J

April 29th, 1971 Tape 403 JM - 1 MR. EARLE: my c0111Dents on this particular motion but the evidence so scandalously revealed in this transaction which reflects so horribly upon the Government opens up the whole question of rental arrangements made by the Government during the past number of years. Mr. Speaker, I would think that on proper investigation it would be quite evident to all that these particular incidents do not stand alone. For instance what I mean, in the city of St.

John's we have felt that when the Confederation Building was established as the centre of Government that this woul~ be the logical place to have all departments centralized for the convenience of the public. T'his was touted at the time as being the ideal situation so that people would not have to be going all over hell's half-acre to look for various departments and various officials of Government. Now let us see what has happened in recent year.

While there have been plans on the drawing board for the extension of this building for some years and while, I think, the needs of the various departments in the building have been thoroughly examined,so that they could be fitted into the space surrounding this building,nothing has been done. We find that the Government is now branching out into all types of buildings all over town and all over Newfoundland and setting up branches and services here, there and everywhere,because they claim that space is not available in this building. Well, Mr.

Speaker, my contention is and this motion we are talking about today does indicate very, very clearly indeed that at the rate Govern­ ment money is being wasted,by paying exhorbitant rents to friends of the Government,hidden under cloaks as a rule or going under some name where it cannot be determined who they are, that money could be saved and should be saved. That would provide for thf accommodation of all departments of Govern­ ment in an extension of this Confederation Building,where once again they would centralized and serving the public as they should serve them.

For instaace, not many years ago, a couple of years ago actually, the Prince 20G4

April 29th, 1971 Tape 403 JM - 2 MR. EARLE: Phillip Building was built on Elizabeth Avenue down here_ »ow apparently what has happened,the people who originally started to build that building got into trouble, they could not finance it one way or another and it was in the doldrums for a matter of a few months and there was no building going on but suddenly some sort of an arrangement was made whereby that building proceeded; has gone up and now it is occupied very, very largely indeed by Departments of Government>at very high rates.

In answers to questions in this House last year we heard of the Public Utilities Commission, the Power Commission and other cOD'lllissions goin~ into that building,paying the very top rates prevalent in the city of St. John's - MR. CROSBIE: The total is $294,000. MR. EARLE: A total of $294,000. in rents and at the same time they were paying for all necessary architectural alterations, all the partitions and improvements in the building and all that needed to he done to make that place habitable.

So virtually what happened some people or persons put Ul) that building, a shell of a building then they very successfully, probably with prior knowledge, rented it to Government a.t exhorbitant rates,and they will get their money back because that is not a terribly expensive building. They will get their money back in a very, very few year indeed. 'f" hen they will have., under the leases which prevail, an extremely substantial profit for the years to come.

Now this is just another instance of the type of thing which is happening with these liquor stores ~.his can be repeated time, after time, after time around this Province. What I started out to say was that where the excuse is being used that t110ney is not available to extend this buildin~ and accomodat'e the services of the Government, I would venture to say that five times that amount and poasibly more is now bein~ spent in the forms of rent to friends of the Government,so that they can be looked after while the 20J5

April 29th, 1971 Tape 403 JM - 3 MR. EARLE: public pays the shot,by not having a proper centralization of services in the building that was originally intended for it,namely this building, This is a simply scandalous state of affairs,when we have a Budget like we had brought down yesterday,when it is running up into the three hundred odd million dollars and so on and it is claimed that the Province is doing well, that everything is rosy, that money is here for the spending. Why vas it not included in that Bud~et yesterday,an extension for the Confederation Building to centralize these services?

I will tell you why. tt was not included because too many friends of the Government are now renting properties to this Government,at exhorbitant rates,and they have to be looked after. These people have long-term leases all over the place and these rents are just goin~ out of the public chest to keep these friends of the Govemment satisfied. I read. the other day an

article to which I referred to previously,in the morning news,about the speech made by the hon. Minister of Social Services at Buchans·. lt vas stomach turning, it was revolting, it would make anybody with a weak stomach sick,because all the purity and honesty and so on that existed in the Government was outlined there,paragraph by.paragraph, line .by line.

They were so lily-white that it was a wonder they did not take off for the Nether regions with their wings flapping. b_u_t that is the sort of c:~11ldis~ rubbish and rot that is put out for the public as being the type of GovernJRent we are supposed to support, H.ere we have today a glaring instance of pure pork barrelling to friends of the Government. Who they are we do not know, because we cannot find out.But this very instance could be d~licated, triplicated, quadruplicated and so on.all over the country and in a number of various cases and various instances. What it really boils down to, _ Mr.

Chairman, h that the Liberal party and the Liberal Government is indeed a Liberal party and a Liberal Governnent,but it is only Liberal and only Liberal to its friends.and that at a very, very hi~h degree of money, a very 20G6

April 29th, 1971 Tape 403 JM - 4 MR. EARLE: Rreat e,q,enae to the public. Now the public,who are paying the taxes of this Province,who are supporting this Government,are paying out the money that is paying these exhorbitant rents. 1t is time that the Newfoundland people woke up to the fact that,in spite of .all the protestations about purity and ethics and all the honourable things that are happening,are supposed to be happening, by thia ' Govermnent,all for the sake of the common person and the common masses.

"Let us do away with all these mercantile classes and these rogues these people who have always robbed the people," t'his is pure btmk and camouflaRe. The people who are being fed today are the greatest .money people in the world,who are supporting the Liberal party and the Liberal Government. These are the boys who have been made rich and are continuing to be made rich and these are the autocracy of wealth and so on today,who are getting these exhorbitant rents and are getting these exhorbitant benefits.

This mtion today points up,more clearly than anything I know,the type of thing that has been going on over the years in this Government and for which this Government must be brought to task. If ever there is a revelation of what has gone on the public of Newfoundland will say,- "What fools we mortals be! For years and years we have supported this,innocently and un­ knowingly,and it takes another Government to bring out the facts." I have, Mr. Speaker, no pleasure at all but the greatest disgust .-. in supporting this 1110tion which is very, very necessary here today. MR. CROSBIE: Mr.

Speaker, I riee to support this resolution. What we have before us, Mr. Speaker, is one of the greatest scandals ever on earth in the operation of the Government. That is what we have before us,and I challange any hon. gentleman opposite, I do not believe there is an hon. gentleman opposite me ·now who knows the sli~hest thing about this. ~he .only one in the Government who knows anythin~ about this is the hon. the Premier, It is too bad h~ is not here today beca\19e these leases could never have been 20G7

April 29th, 1971 Tape 403 JM - 5 MR. CROSBIE: granted by the .Newfoundland Liquor Co111111ission without the initiative and certainly without the consent of the hon. the Premier. Now, Mr. Speaker, a week or two ago the hon. member for St. John's East,in his address on the Speech in Reply,mentioned this question of land located by Holiday Inn ,which bad , been sold by Lundrigan' s Limited to the Crown Corporation that owns Holiday Inn.

Lundrigan's had bought it for $15,000. from the Kenny family,and two years later sold it to the Crown Corporation for $50,000. although the deed only said the consideration was $1.00. The hon. member for St. John's East pointed out that this seemed to be unreasonable, something appeared to be wrong,that the price paid by the Crown Corporation, the Govermnent,seemed to be too high and it does appear to be that way. What happened? The hon. the Premier immediately had a Royal Commission appointed to investigate the sale of this land by Lundrigan's Limited to Holiday Inn and Mr.

Gordon Stirling, Q.C. was appointed as commissioner. The hon. the Premier phoned Mr. Arthur Lundrigan and discussed the matter with him and he repeated his conversation to the House and then he had Mr. Gordon Stirling appointed-a c011111issioner. Vell, that is good, that is okay for Mr. Stirling to look into this matter of the sale of that land.But that, Mr. Speaker, does not have a patch, whether that price is too high or not too high or the market price and so on, does not have a patch on what we are dealing with now, these three leases at Placentia, Grand Bank and St.

Lawrence.There is no question but that these three leases are a deliberate misappropriation of public funds for the benefit of some private individual or firm. What are the facts? The facts are that these three buildings are 1~665 square feet each,and any contractor in this Province will tell you they could be built for $25.00 a square foot,manmum, "!'hat would be $41,000. They did not cost near that,but allow that as the maximum. The owner of each building is receivin~ a rental of $12,000. or it could be slightly in excess of that. The owner of the buildin~ at Placentia 20[;8

April 29th, 1971 Tape 403 JM - 6 MR. CROSBIE: is going to get $244,800. over the period of that twenty year lease. I have a copy of the lease here. Here is the lease.dated the 30th of September 1966, ''The lessor is the Banker's Trust Company, the lessor who is supposed to own the building is the Banker's Trust Company. The Banker's Trust Company, Mr. Speaker, is a sabsidiary of the Royal Trust Company, a subsidiary company with its office in Quebec. The lease is dated, as I said, September 30, 1966, the rental we know $12,000. odd per year.

Under the lease,the Government, the Newfoundland Liquor Co11B11ission,is to repair the building, maintain and cause it to be repaired,both exterior as well as interior. No:tl!lally the lessor of a whole building is supposed to maintain the exterior of the building or repair it himself,but not in this case. In this case the owner has a twenty year lease.Ke does not have to spend a dollar on repairs. Then,when we go down furtheI,,we see that the Newfoundland Liquor Commission is to pay all expenses arising out of the operation of the building,including heating, electrical, telephoning and cleaning.

We turn the page and we discover that the Newfoundland Liquor Commission is to pay all taxes, assessments, fines and impositions imposed in respect of the demised premises, including all taxes, ·. assessments, fines and impositions which,but for this leaee,would be payable by the lessor. I have never before, Mr. Speaker, seen a lease where the tenant agreed to pay the landlord's taxes. It is unheard of except in a sweetheart deal, a deal that stinks with corruption like this one does,that the Govern­ ment.is to pay all the taxes that the landlord normally pays.

Then it goes on to indemnify the landlord against any suita : and so on taken against him to pay the rent of the twenty year lease etc. Now that is Placentia. So over twenty years the owner of that building at Placentia,in twenty years, -will receive $244,800 Four years have now gone, his building did not cost him a cent over S40,000. and I mn putt~n~ that high. He is goin~ to make a profit, Mr. Speaker, of S200,000., money from the people of Newfoundland, 20G9

April 29th, 1971 Tape 403 JM - 7 MR. CROSBIE : funds that this Government is arranging to put in his hand, $200,000. for that measly little building down in Placentia. Be does not have to spend a cent on taxes, a cent on repairs, a cent on lighting, heating, cleaning, nothing, just walk away. MR. MURPHY: We have not agreed to pay his income tax on his property. MR.. CROSBIE: The Government did not agree to pay his income tax that is the only thing the Government did not do.

Now when I say Government I do not blame the hon. gentleman opposite, I do not believe there is one opposite me today that knows a thing about these leases. I think that the only one in the Government who knows anything about them is the hon. the Premier and he is the one who should tell us and give us the story on them. The Newfound­ land Liquor Co11111ission is a Crown Corporation, it reports through the Minister of Finance, it is completely under the control and thumb of the Government.

If the Newfoundland Liquor Cmmnission entered into these leases without the consent of the ~remier,the Commission should be discharged and dismissed i11111ediately. If they entered into them with the consent or at the initiative or direction of the Premier,the P~emier has to take the responsibility for it. These are sweetheart deals, to transfer public ~unds from the public treasury into some private individuals pockets. Now this is bad enough, Mr. Speaker, but the Government is brazen enough to fail to tell the public who owns the buildings. 2070

Aptil 29, 1971 Tape 404 page 1. I aked a question thia year and the anwer is tabled by the Minister of Finance. Question No. 367, I asked him to table the leaaes which he did.

(2) Answer, listen to this, for contemptible contempt; 'questioner might address his question to the Royal Trust Company." Is this Govermnent,Mr. Speaker, forking out these kind of rents totalling $e1ten .. hiindred odd thousand dollars for these three buildings the next twenty years, and is it going to say it does not know the name of the owners, that it only dealt with the Royal Trust Company? I called the Royal Trust Company1 Mr. Speaker, after getting that contemptible answet,and I asked the Royal Trust Company; who owns the building at Placentia, the building at Grand Bank and the building at St.

Lawrence that you are collecting the rent for you and your subsidiary the BankerTs Trust Company? I was told,naturally, that is confidential information we cannot reveal the names of the peopl.e for whom we act as Truste·ea, Now if there was ever a Royal Commission investigation called for in this Province it is called for in connection with this piece of "'Vtinking corruption," th.is transfer every year from the Public Treasury into some mysterious person's pockets,of $36,000 in rents. I looked down in the Re2istrv 1 Mr.

Soeaker, (by the w,iy6 1 described the lease in Placentia, the lease in Grand Bank the hon. member for Burin described) the lease in St. Lawrence is dated Feb. 1, 1969,and the Banker~s Trust Company, the Newfoundland Liquor C011111ission, exactly the same again, the rent is $12,036, the Government, the Liquor Commission pay the taxes, pay· the repairs, exactly the same. How, these leases were done or at least Curtis, Dawe & Fagan had a connection with them. The barrieter,who witnessed the signature on several of those leases and on other deeds in connection with this matter,is Mr. R. E. Fagan.

If a·commission is appointed,Mr. Speaker, the comaission able to call witnesses on oath will be able ~o get to the bottom of this matter, It does not matter that the Banker's Trust Company is in Quebec,they 2071

April 29, 1971 Tape 404 page 2. can be eubpoenaed~the Royal Trust Company can be subpoenaed,there will be no problem finding it out,digging into this. We know that the construction of these three buildings was crarried out and supervised by Lundrigan's Ltd.

The public record 1 downstairs in the Registry of Deeds,shows that in Placentia the land was owned originally by Lund­ rigan& Ltd, On August 311 1966, Lundrigan& Ltd. transferred the land at Placentia to the Bankers Trust Company,for $5000, 0.6 acre, the deed~is registered in volume 835 of folio 292- so Lundrigans owned the land originally at Placentia, transferred it to the Bankers Trust Company. The Baalters Trust Company then gave the mortgage to the Royal Trust Company and borrowed $59,000- there is a mortgage registered from Bankers Trust to the Royal Trust.

Now the fact that the mortgage is a $59,000 mortgage does not mean that this building cost $59,000, not for a minute. That building was built for a lot less than that, twenty-five or thirty thousand dollars. Whoever borrowed the money from the Royal Trust may have wanted to use that money for other purposes. The Crown granted it originally to the Town of Placentia~ The Town of Placentia sold the land to Lundrigan& Lundrigans sold it to the Bankers Trust. ~he Bankers Trust Company then gave a mortgage to the Royal Trust for $59,000, September 30, 1966, In St. Lawrence, the land in St.

Lawrence cost $2000, .217 of an acre. It is located on the main street in St. Lawrence. It was bought by the Royal Trust Company in their name., from,I believe it was Fabian Alywa~d of St. Lawrence, $2000. Then the Royal Trust conveyed the land to the Bankers Trust Company That is registered in volume 1161, folio 77, Then there is a mortgage for $62,000 from the Baiilfed Trust to the Royal Trust and the legal work there apparently was done by Mr. Fagan; and that is the way the matter stands down there at the moment. In Grand Ba.ilk., the land is located on Hickman Street. The land was sold by G.& A.

B~ffett.Ltd.# to the Royal Trust Company,for $2000, Jan. 27, 2072

April 29, 1971 Tape 404 page 3. 1969, the Royal Trust Company then conveyed the land to Bankers Trust Company, That is registered in volume 1043 at Folio 53 •. Bankers Trust then got a mortgage from the Royal Trust Company,$62,000. Again that does not mean ta .say that building cost $62,000. The person who borrowed the money used the building as security, The building did not coat a Cent over twenty-five or thirty thousand dollars,maximum. Now, Mr. Speaker, these are no ordinary leases. This is a special situation, this is a sweetheart situation set up by s0111e one in a position of power.

No one in their right mind would authorize this kind of a lease, The Newfoundland Liquor Commission got all kinds of money~it makes a good profit, it has reserves. If it needed a store at St. Lawrence or Grand Bank or Placentia it could have bought the land and put up its own builiing for twe~ty-five o~ thirty thousand dollars. Three buildings for $125,000. Instead of that it is going to pay out it is paying out $36,000 in rent and over twe~ty years it is going to pay out $720,000 of public funds, for those buildings. II.by? The only reason is to enrich the man ur men or people who own those three buildings.

That is the only P,urpose of this whole deal and arrangement. The Newfoundland Liquor Commission is ordinarily j~_t not that stupid. They have other rents. Let us look at some property they rented this year. Question that was asked, 289 on the Order Paper since April 1, 1970,_the reply is tabled. This is since April 1, 1970, let us compare these figures to the bonanza, the St.

Lawrence bonanza, the Placentia bonanza, the .Grand Bank bonanza; the Commission rented 2880 square feet from Snelgroves Supermarket Limited,in Happy Valley. \that is the rental ratel $2.50 per square foot, $5 a square foot less than it is paying at Grand Bank, Placentia and St. Lawrence. The Liquor Commission rented property·from Mifflin Properties Ltd·. 1250 square feet and the rent is $2.90 a square foot. These are all.this is in Catalina. These are all five year leci,ges, not twenty years, not a twenty year lease, five 2073

April 29, 1971 Tape 404 p~ge 4. year leases. In Bonavista the Co11111ission went and rented 800 square feet from Albert C. Little, $3.00 a square foot, not $7.22 not $7.34 not $7.00 at all, $3.00. In Topsail Road St. John's, the Commission rented 7200 square feet from Hickman:Motors,$3.25 a square foot. That may be a warehouse or something, but it is $3.25 a square foot. That is what the Newfoundland Liquor Commission pays when it is left alone,when it is not interfered with, when it is not told you must enter into a bonanza for a certain friend of the Government. Now I make the charge today,M~.

Speaker, that these three buildings are owned by some close supporter of the Liberal Government and Mr. Smallwood . or if not.they are owned by someone in the Government. One or the other. I make that charge toda1, confident that that is one hundred per cent correct. It is either a member of the Government or it is a close, very close supporter of the Liberal Government of Mr. Smallwood~ I say further that I do not think any Cabinet Minister knows anything about it except one, the Hon. the Premier. It is a public scandal. ~here is no answer can be made to these charges,Mr.

Speaker. ~y has not the Hon. the Prem~er appointed a Royal Commission to investigate this~ I spoke on it in this House last year for several hours and - again in this session it has been brought up on three or four occasion before this resolution. Why has not the Hon. the Premier jumped to his feet and said we are going to appoint a Royal Commission to investigate that] Whyl ·?he answer,wh~ is the Premier cannot afford to have this investigated, ln no way,a proper public investigation of this. It will not bear the light of day. It is too inexcusable, it is going to strike too close home.' Let us make Mr.

Stirling's commission a worthwhile commission. Let us get amended terms of reference,not just a look at the purchase of land at Holiday Inn from Lundrigan, $50,000 for that Crown Corporation, That may be serious enough~ but that is not, that is only a minor part of what needs to be investigated. Let Mr. Stirling'~ 2074

April 29 1971 Tape 404 page 5. Co111111ission investigate these three leases and all the circumstances in connection with them, and get the names of the owners of them no matter who the owner is. Surely the public of Newfoundland is entitled to know where $700,000 of public funds i~oing to go in the next twenty years,on these leases. lt is their money, their money,Mr, Speaker, not any private individual's money to be lashed out. It stinks of corruption. It stinks of patronage. It stinks,period. The question;~! might address these questions to the Royal Trust Company:what a laugh. Mr.

Speaker, who is the lucky owner of that building in St. Lawrence, St. Lawrence the town in Newfoundland where they have had so much misery, the men who went down the mines there and got sick in those mines,and their dependants - and down in the community of St. Lawrence where they have had all that trouble,where people are living on relief and the widows are having a hard time and the rest of it. Right in their midst is a bonanza, a gusher, an oil gusher spewing out money to some friend of the Government.w.tat they could do in St. Lawrence with that $12,000 a year~ You are going to spend $12,000 a year.

If that was some public building owned by the community of St. Lawrence and they were making $200,000 I would say go to it. MR.HICKMAN: Put money in the widows pockets. MR.CROSBIE: Yes, I would say put it in the widows fund there whatever. But when it is $12,000 going into the hungry maw of some supporter of the Government that is a very much different thing. It is disgusting. Grand Bank, $240,000 in St. Lawrence that is the total rent, $240,000 in Grand Bank. Placentia $244,000.

Placentia where they have hundreds unemployed at the moment, where they have a bad situation~ right in the midst of Placentia there is this little bonanza, that little liquor . bonanza, with the Government paying every month, the Liquor Commission passing over to the owner every month $1200 in rent or a thousand odd dollars in rent. The owner is sitting there as happy as can be~does 2075

-----!'... April 29, 1971 ,;·-Tape 404 page 6. not have to pay the Town of Placentia a cent in taxes, the Liquor C01111Dission is payin2 them. He does not have to spend any money in repairs, and he does not have to pay the cleaning woman and he does not have to pay the electric light or the electricity. He has to pay nothing, just sits there and he has a great effort every month he runs down to the bank and deposits the cheque, or the cheque is sent him, deposited in Florida, somewhere, MR. NEARY: How long ago was this arrangement made? MR.CROSBIE: I will tell you how long ago this arrangement was made.

Placentia is Sept. 30, 1966. The hon. gentleman was in the Government and knew not a thing about it~ I can promise the hon. minister that never came before the Cabinet. p ·.NEARY: The hon. membEr was a member of the Government at that time. MR.CROSBIE: Feb. 1, 1969, I was not a member ol the Government but the hon. gentleman opposite was. That is when the Grand Bank lease was entered into. Feb. 1, 1969 the hon. gentleman was a member of the Government, that is when the St. Lawrence lease was entered into. But I will say this.the hon. member knows nothing about these.

If you were a membe·r you still know nothing about them, they never came before the Cabinet. I entered the Cabinet the end of July 1966, I left in May 1968, and I have not been in the Cabinet since. MR.NEARY: As long as you can clarify it. MR.CROSBIE: No need for clarification. I would like the Minister, he is a Minister of the Crown, .to investigate this. 1s he satisfied to have that continue without having it looked intol The rents,is he satisfied that the rent being paid for those three buildings is legitimate and proper, MR.NEARY: On real estat~ are real estate fees legitimate?

MR.CROSBIE: Simple Simon was a pieman, Simple Simon is a Minister of Welfare . 2076

I _:·.·-;:=-.. , • -""'~ April 29 1 1971 ;.:- Tape 404 MR.SPF:AKER: Order please! page 7. MR.CltOSBIE: this is too serious.Mr. Speaker, to engage in light patter with the ministe -r of mushrooms. I am not going to answer you if you sa.7 ·•'Muttc;,n Chops." Mr. Butler of the Evening Tdegrpi gets very annoyed. MR .• SPEAKER: Order please! Will the hon. member please - HR.CROSBIE: this i& too serious to. engage in lighthearted levity. Mr. Speaker I on the one hand we have a Gover .nment appointing a Royal Commission to, investigate this matter of land that will 2077

April 29, 1971 Tape no. 405 Page 1 apply to Holiday Inn. It should be investigating the Government's rental policy, the Newfoundland LiqU11r Commission's rental policy for the last five years. Specifically, it should be investigating these leases. Was there ever a case brought to the attention of the House before that cried out more for investigation. I quoted Mr ••••• one could only be midly amused by the minister. I propose that they will wait for a search, because my grandfather was the one who was supposed to have bought the spars. I do not know whether he bought spars or whether . he did not buy spars.

I had n~. responsibility. I was not even a chip of the old spar in those days. AN HON. MEMBER: I tell you what; he sold the spars. MR. CROSBIE: He sold the spars. was it? Yes. Now, Mr. Speaker. I mentioned the rents that the Liquor Commission are paying •• MR. HICKMAN: What was done with the spars was what the hon. Minister of Justice told the people in 'lwillingate to do with the poles. MR. CROSBIE: I would not ask what the hon. minister told them to do with the poles, because I can imagine what it was. Now1 Mr. Speaker. I mentioned the rents that the Newfoundland Liquor Commission are paying in Happy Valley.

Catalina and Bonavista - reasonable. $2.50 1 $3.000, The hon. member for Burin has mentioned other rents they are paying,$4.0'0. In some cases it is $5,00. In other cases 1 it is $5,83 or $5.10. These are probably justified. But the only thing that sticks out in all the long lists of the property that the Liquor Commission are buying. are the four buildings, including Marystown, Now Marystown is not quite as bad. It is $6.53 per square foot. What kind of rent is paid in the City of St. John's, Mr, Speaker, for the best first-class comercial property? I say not a cent in excess of $6.50.

If there is a firm paying $6.50, that is the maximum for the Royal Trust Building - the best kind of commercial space. What are the Government itself paying in St. John's here? They are lashing $294,000 a year into the Prince Philip Place? Who is the owner? Lundrigan ·and Lundrigan& Limited. Lund~ig~ .and Lundrigans Limited could not have bought the Prince Philip Place . and survived. if the Government had not agreed to enter into 2078

April 29, 1971 Mr. Crosbie all those fancies leases. Tape no. 495 Page 2 There is $294,000 a year going into Philip Place from the Government, the Board of Liquor Control, the Power Commission, Workmen's Compensation Board, Public Utilities. , But even at those big rents the Board of Liquor Control and Philip Plac~ are paying $5.30 a square foot. There are 6,000 square feet. The total rent is $32,000 a year. Now that is high rent for a twenty year lease. Mr. Speaket, you are a lawyer and you know how commercial rents are arrived at.

If you find a tenant with a good credit rating, as the Newfoundland L~quor Commission are, and they will agree to sign a twenty year lease, you can go anywhere in this town and borrow money from any bank or trust company or anyone, they will give you the money secured by an assignment of the lease. They would be glad to. So, if you are going to attract someone like that on a twenty year lease, you give them a lower rent, because it is on their credit that you are able to- borrow the money. You. give them a good deal, when it comes to the rental.

You do not pay them out $27.22 - an .. atrociously high rental, when they are using your credit to go down and borrow money to build the building. So even if Prince Philip Place - it is too much for a twenty year lease, $5.30. But it is onl~ $5.30 a square foot. The Power Commission are down there. The Workmen's Comp,nsation Board are down there. They are all paying - the Public Utitlies Board are paying $5.50 a squa~e foot in Prince Philip Place. Now, I think, we have to admit, Mr. Speaker, that Prince Philip Place is a new,modern office building,right in the heart of St.

John's; yet they are only getting there (It is high enough) $5.50 per square foot but down in the Metropolitan area of Placentia, down in that great etropolis of St. Lawrence, down in that New York of the Southwest Coast, Grand Bank, where everyone will agree that,no matter how lovely those communities are, they have populations between 4,000, 5P00 people and that they are not in the same class,when it comes to paying rent and purchase price of land and th!rest of it.as a metropolitan area. Down there, the Liquor Commission are paying 2079

April 29, 1971 Tape no. 4~5 Page 3 MR. Crosbie. $7.22 a square foot for space. Now this makes no sense. It makes no commercial sense. It makes no business sense. Obviously, this is a sweet-heart deal cooked up to give somebody an ill-gotten gain. The p-rice of that Prince Philip Building altogether totals up to $294,000. But per square foot. it is no more than $5.50. I think it is the highest per square foot. That is too high in my opinion for twenty year leases. Now they are not fools on that Newfoundland Liquor Commission. The chairman and the members just did not cook this up on their o-wn.

They did not even dream it up on their own. They were told, Mr. Speak.er. that they had to enter into these leases. There is only one person in this Province can tell them what they must do and what they do not have to do and what they will do. That person is the hon. the Premier. The explanation for these three atrocities. these three barbarities. these three pieces of extortion, has to come from the hon. the Premier. It is too bad that he is not here today, but he will be here and this will be recorded, and he will see it. and I will say it all over again •. if he wants me to tomorrow.

The onus is on the hon. the Premier to explain this. Who are the owners? The Premier knows. How did these deals originate? The Premier knows. Who instructed the Liquor Commission to sign these leases? The Pk'emier knows. The hon. the member for Burin,who is an ex-minister of Juatice,knows that or at least suspects that these leases were never approved by the Department of Justice. They •aie not typed by the Department of Justice. I do not know whether the Newfoundland Liquor Commission had a lawyer look at them or not.

A lawyer looking at these leases could only marvel that a client of his would ever sign one of them. MR. EARLE: I am sure the hon. Minister of Finance. under which they come, never saw the leases. MR. CROSBIE: When the two of these leases were signed February 1, 1969, it waa when the hon. member for Fortune was Minister of Finance. Did the 2080

., __ j-•~:., • .. :-~ ... April 29, 1971 ;·- Tape no. 495 Paga 4 Mr. Crosbie. hon. gentleman ever see the leases before. MR. EARLE: Never saw them. MR. CROSBIE: The minister responsible for the Newfoundland Liquor Commission, the minister to whom they report, the Minister of Finance on February 1, 1969, was the hon. member for Fortune who states now that he never saw the leases and was never asked to approve them and know nothing about them. How does that grab you?

The Hlnister of Finance responsible for the Newfoundland Liquor Commission - the Act says that the Newfoundland Liquor Commission reports to the Government, through the Minister of Finance. That commission never reported to the member for Fertune, the hon. member for Fortune,that they were entering into those two leases - twenty year leases involving $240,000 of the people's money, the St. Lawrence lease and the Grand Bank lease. Yet, they never reported that to the minister responsible. There is something wrong.

They could only take that action if they were reporting or acting under the directions of the hon. the Premier. There is no other way that the commission would dare do that. That is;to enter into twenty year term leases without the approval of their minister, -they would ha-.e to have the approval of the hon. the Premier. Every time you look at this deal, it gets worst. The hon. the Premier appoints Mr. Gordon Sterling, the commissioner to look · into this serious matter,but comparatively minor Compared to this,and refuses to appoint a commission to investigate this. Right?

There is a gentleman doing a poll down here, Martin Goldfarb - Martin Goldfarb. He was quoted in the press the other day as saying, "you can merchandize politicians the same as you can merchandise tomatoes. " He says, "he is now advising Premier Smallwood on his techniques for this election." WL. have we come to! Even Martin Goldfarb could not di•suise this rotten situation. ·2081

April 29, 1971 'Iape no. 4115 Page.) Mr. Crosbie. He could not make anybody believe that this was not what it is. 'Ibey are going to merchandize the hon. the Premier now. Re is going to be a tomato for the next election. It is pretty difficult to merchandize so• of these old tomatoes. The hon. the Premier today was on the air denying that there was any poll now being done. MR.. SPEAKER: (Noel) Order please! 'Ibis was gone into on a previous occasion. MR. CROSBIE: Mr.

Speaker, I say this that if a poll were done in St, Lawrence, if a poll were done in Grand Bank, if a poll were done i.J1 Placentia,on what the people there think of this robbery of the public funds, I tell you this that it will come up 99.98 per cent that they do not approve of it, and are not going to support a Government that permits it. .},N HON. MEMBER: Does the hon, member know what he can do with that poll? MR, CROSBIE: I know what tb~ hon, polls are going to do with the hon, member, Be will not be back here after the election. Now we have in the Cabinet, Hr.

Speaker, a number of crusading affairs' gentlemen of whom the Minister of Social Services and Rehabiliation is one, Let the hon. minister start a crusade now? I say the Cabinet has a number of crusading members of whom the hon. Minister of Social Services and Rehabilitation, an author of the Liberal column in the Daily News is one,or part author, Whenever we see a ctlumn quoting the hon. minister. we know that he is the autho~. Let him start a crusade now, Let that hon. gentleman go to the hon, the Premier and say. "Premier.

I cannot stay in a Government that will permit such a situation,as is revealed by these leases,to continue." Forget the children· for a moment, Forget them for a moment. Get on to more serious matters. You will have a lot more money to spend on children, if you can stop this kind of thing, The crueading minister of Social Services 2oa2

April 29, 1971 Mr. Crosbie -----:-:--r .. _.-;-~- Tape no. 405 Page 6 and Rehabilitation should rehabiliate those leases. In fact, they hould be cancelled and if the owner will not agree to cancel them, the Government should bring a piece of legislation before this Bouse cancelling them. If I am ever in a position, Mr. Speaker, where I can have any influence on the Government, I promise you that those leases will be voided immediately. MR. MUBPHY: Join the P. C.'s MR. CROSBIE: Thank you. Now, Mr. Speaker, I think I have said all I can usefully say on these leases, The facts speak for themselves.

I notice in the Public Accounts, 1969,70,that the Newfoundland Liquor Commission, altogether, are spending $377,000 a year on rent, which includes the rent on.their main building out here on the Kenmount Road. Really that is interest and principal under a lease-back, and $174,000 of that is that one there. But it is spending, say, $200,000 a year on rent. It is a very substantial amount. I said that the building out on the Trans-Canada Highways is a lease.back under which they are paying principal and interest. Right? MR.SPEAKER Order please! MR, CROSBIE: I will tell the hon. gentlemen all about lease.backs.

I will tell him all about diapers·, if he wants to know about them. Anything he wants to know, just ask me. I wished I owned them all. Mr. Speaker about $200,000 a year in rent is being spent by the Liquor Commission. How _much of it is being spent unwisely and improperly as the rental on these three buildingsl I can only conclude by saying this that: (I will repeat what I have said) I do not think there i  an hon. gentleman across the House today that knows a thing about this. I think there is one man only in the Government that is responsible for those leases and that knows about them, the hon. the 2083

April 2~, 1971 Tape no. 405 Page 7 Mr. Crob •• Premier. I challenge him, if he has nothing to worry about, if he baa nothing to hide in the matter of these three atrocities,to appoint a commission of enquiry to have public hearings to find out who the owners are; who negotiated the- deal, ~ho was responsible for having them signed. We know that it was not the lllinister of Finance. The hon. member for Fortune said that he was not shown the leasesnor consulted - Fortune Bay. We know that it was not he. Who was responsible? Who owns the buildings?

What will the Govemment do about stopping this bonanza, cancelling these leaaes or working out some reasonable rental or purchase for them. Surely, the Government are not going to permit another sixteen years to go making these payments under these documents, paying taxes, repairs and the rest of it? Surely the hon. gentleaen opposite will not allow that to continue. Surely, they will not. There are no co11111itments yet. I hope the hon. gentlemen will have a Cabinet meeting, Mr. Speaker, and agree either _ to cancel those leases and to have a public enquiry or both. Certainly a public enqui _~ is needed.

There has never been a matter brought before the House that more demanded a public enquiry. I challenge the Premier to have a public enquiry, if he does not have anything to hide in this matter. The facts are befo -re the Bouse, Mr. Speaker, and I hope that hon. gentlemen will vote for this Resolution. It does not damage the Government at all. It just says that we request the Govemment to appoint a Royal Collllllission of three members - not one.

We do not want a one-.an co11111ission, But three members, with all necessary powers to investigate Government purchases during the last five years of property and rental property by the Government and particularly to investigate and report 9n these leases at Gran~ Bank, Placentia and St. Lawrence, the reasons for entering into those tranaactions, the reasons or otherwise of the rentals and other terms and conditions, to find out who the owners are and to hold public hearings and to report by September 1, 1971. 2084

April 29 • 191.l Tape no. 405 Pase 8 Mr. Crosbie Why September 1. 1971? It ahow.d say report before the election. The election is not likely to be until after September 1. 1971. This is an enquiry that could be conducted. Mr. Speaker. and concluded easily in four to six weeks. The day of the election? I will make a blind guess 2085

April 29, 1971 Tape 406 PK - 1 MR. CROSBIE: I would say September 8, 1971, the date of my birthday AN HON. MEMRF.R: Inaudible. ~- CROSBIE: When? At 11 o'clock in the night, I will be either celebrating or retiring. AN HON. ME1ABF.R: Inaudible. MR. CROSBIE: Well that is possible. So, seriously, Mr. Speaker, I think that this situation is a rotten one, it calls for an investigation and report, and I hope that hon. ~entlemen opposite will support this. MR. W. MARSHALL: ~r.

Speaker, I would agree with the hon. members who have already spoken that this is an appalling situation, an tmconscionable transaction, and one which this House can do nothing else. but order an immediate investigation into. The rents themselves are atrocious. They are absolutely fantastic. We have a total rental of $240,000 being paid over the term of the lease and we see the cost of the building. I wonder htni many people there are in the Province of Newfoundland today who are able to rent their premises and in effect be paid back almost the full price in the first year 1 from rent, and iive off the rest.

I wonder how many people have put up buildings at $25,000 and $30,000 and rented.them to people and had the tennant pay in the first year or the second year the full price of the building itself, and be able to sit back for the next eighteen years, twenty-eight years, thirty-eight years and enjoy the profits of it1 This is the situation we have ourselves in, Mr. Speaker. It is even more ridicillous than that.

Any person,who has anything to do with leasing of property, would be utterly shocked to look at the terms of this lease that has been tabled, between the Bankers Trust Company and the Liquor Commission,with respect to the Grand Bank premises. I tmderstand the others are the same. Clause 2 (

b) the lessee, that is, the Newfoundland Liquor Commission in addition to paying for the building, is substantially paying for it in the first year and certainly paying for its entirety in the second year; covenants and agrees to keep not only the interior repaired and mended and 2036

April 29, 1971 Tape 406 PK - 2 MR. MARSHALL: maintained, but the exterior as well. And I ask the question again, how many people in this Province may~indeed how many people in Canada or anywhere else in the Western World can lease a property to a tenant_ and>when the outside of the House or the outside of the building falls into disrepair and needs painting 1 can have the tenant paint the building.

This ia what this particular clause said, or the roof gets leaky, get the tenant to repair the roof, Everything is free and clear in thisilease, the whole entire rental goes to the landlord, the mysterious landlord, Not only that, if the Newfoundland Liquor Conrnission should decide that they do not· want to make these repairs, they do not want to repair the roof, they do not want to paint it on the outside, or what have you,on the outside. or on the inside, The Liquour Commission has the right,within forty-five days 1 to do it itself and charge it, charge the price and add it to the rent payable by the Newfoundland Liquor Commission.

This mysterious landlord,acting through this foreign company, this Bankers Trust Company,is allowed to do this. Obviously, it is not the Bankers Trust Company, as the hon. the member for St. John's West and the hon. the member for Burin have pointed out. It is quite obvious, it is apparent, it is as plain as a nose on your face that there is somebody behind these leases,obviously.

Somebody who is sitting back. lf he or she or they are not retired, they could well afford to retire on this bonanza, $600,000 or $700,000 of profit, wrung from the people of this Province, wrung from the people of this Province that are paying the taxes that they are paying, who have the lowest per capita income. This Government,which has the highest per capita debt, increasing its debt by this method. Some fellow, some chaps, some lady, or who have you, are behind these leases, getting th~se huge and exorbitant profits. Not only that, we see under Clause (

f) of the lease- we see under the obligations of the leasee that the Newfoundland Liquor Commission has to pay all of the taxes, every iota of tax which is assessed ap,ainst any of these buildin~s. And I ask a~ain, how many people throu~hout this Province are able to rent their places and have all of the taxes paid by the tenant? Very. very few. very, very few unless there is sOl!le deal involved with the thin~. It is 20~7

April 19. 1971 Tape 406 PK - 3 MR. ~ARSHALL: wrong. It is dreadfully wrong. There has to be something wroni with these leases. The terms themselves indicate that there is some sweetheart deal, as it has been described. The terms themselves indicate that there has been an exorbitant deal and unconscionable: transaction made by this Government. The Government must answer. It has to answer to the people. as to why it entered into this particular contract and why it entered into the other leases as well. We have f?Ot to know who are behind these leases. 'lhy should we not know who are behind these leases?

We are paying half a million dollars. more than half a million to the beneficiary, or the beneficiaries. I wonder how many people, if any~in the Government benches opposite know the full story behind these leases. Perhaps,like us, they would like to know. They certainly should know, The people of Newfoundland should know and we should know also.why these leases were entered into.

You compare the property rental around this ~~~and~that is being piid for comparable space. and you can eas­ ily see that this is a smart transaction that has been entered into, that this is a sharpie deal.and we had to know why they were entered into, \~y the exorbitant p~yment under the lease have been made. So far nobody on the Government side has ~iven any attention to this motion. I look forward and we all look forward to seeing the members on the Government benches explain this situation.

We have a mysterious Trust Company, the Bankers Trust Company. which according to the lease has its head office in Montreal,in the Province of Quebec, and you will notice in the lease that there is no specific street address, it just says all notices will be sent to Montreal, in the i,rovince of Ouebec, the Bankers Trust Company on the mainland. Where does the money io? Who is it going to? Why was this lease entered into? Why pay out a total of $600,000 to $700,000 of the peoples money? How many people in this Province have been able to enter~ into deals of this nature?

Obviously there has to be something wrong with it, and we must have a Commission to look into it. I know that the hon. the member for Burin, the hon. the member for St. John's West will a~ree with me, and never before, 2038

April 29, 1971 Tape 406 PK - 4 ?-fR. ~.AFSHALL: in our experience,have we seen such one-sided leases,.,as the leases which had been entered into here. And we have to know why. Either the Government are completely incompetent -which is something which woulj nrt startle too many people in this Province; that is that revelation. Or else there is something behind it, and it has to be explained. I entirely support this Motion by the hon. the member for Burin and I look forward to hearing what the members on the other side of the House have to say with respect to it. MR. MURPHY: A question, Mr.

Speaker, and the question is this; as far as I am concerned,for several years on the Order Panr, we have had these questions as to What rentals are being paid.· The answer has been certain buildings , have been paid to the Royal Trust Company. But, after listenin~ to the hon. gentleman and learned gentleman today, the astoundinp. part to me is the fact, the terms of these leases. They have been called sweetheart agreements.

The char~e has been made right here on the floor of this Fouse, that either a member of the Government at present sitting or a very close friend or supporter of the Liberal Party is the unknown landlord. If we had Perry Mason here, we might get another thriller, you know, ''The ease t>f 'J:he Unkown !landlord-.-" All these fi1ures and facts that I have heard today put before the House~ there has been no dissent whatever from the other side denying any of the facts that have been stated. And dealing with liquor it might be a little bit quipish to say they are sta~gering.

But, they are staggering indeed, when the hon. the member for Burin or St. John's mentions that ho one, but-no one on that side of the House, except the Premier, is aware of these leases. I think myself that should be condemnation of a Cabinet and of a Government who are relied upon to nm the affairs of this Province in the best interest of all residents of the Province and not work d:llgently to pou~~any thousands of dollars into the pockets of one ~entleman or a group of gentlemen or a comr,any.

We have heard the statements brought forth here, I have seen the buildin~s I have been into pretty well everyone of them. AN HON. t-"F'.MBF.R: Inaudible. 20B9

April 29, 1971 Tape 406 PK - 5 mt. MURPHY: Just visiting, not purchasing, I have friends, who like to drink, I am not against that. But, when we hear that over twenty year period that net, Ret, net profit is in the area of a quarter of a million dollars to these lessors, when we hear the tenns of the leases where the leasee is responsible for every cent of expense pertaining to these stores, and when we see the attitude of the members on the other side, who treated, as they have treated every other debate in this House, Mr. Speaker, with a great amount of ~evity, you know, nothi~g to it. Nothing to it.

This is nothing. The hon. minister mentions he is too busy with children and we appreciate that fact. He is doing a good job for the children of the Province. But, I am sure again as someonehas said, that he would appreciate another couple of $100,000 to assist him in the work of the children or the people on welfare, perhaps to raise the fuel allowance, provide shoes perhaps for children who have not got these shoes. Why have they not got the shoes? Why are they not getting a greater allowance? Why have they not? Because deals such as this, Mr. Speaker, are being perpetrated. These are not the only deals.

And we are just looking forward to the day, and I do not think it is too far off, where we can in the sessions have far more information than we have on this particular matter. It is just- a simple motion that an ~nquiry be made, if you are not guilty,there is nothing to fear, there is nothing to fear. Mr. Speaker, these are some of the things, some of the questions that are being asked, when we meet people throughout this whole Province. These are some of the reasons why we in this Opposition have been accused of obstructing the business of this House.

Anytime we ask questions dealing with money that is being wasted, squandered, passed out to friends and supports, we are obstructing, we are obstructing the business of this House. If we want at anytime, Mr. Speaker, to stand in our places here and query any minister of Government, the Government itself~ why spend•x~dollars here, 2090

April 29, 1971 Tape No. 407 NC - 1 MR. MURPHY: when you could save half this money? We are just laughted at, scoffed at, treated with scorn and contempt. It is a great joke. That is what comes of controlling the power for so long. We have had other instances~Mr. Speaker, but these matters are being treated with absolute, total, contempt. NO'· one worries on the other side. They just come in and take their places. They are just here in person. Just in person! I have travelled about five districts of this Province, Mr. Speaker,in the last two weeks, and people have asked if their member is still in the House.

Do they ever see them? ''we never hear them." Is this, may I ask, all the members on the other side• Is this what they come for? Just to cheer and clap when the Premier stands in his place to read a Budget Speech. Is this the purpose of us all being here? There must be someone on the other side who is as much concerned as we are on this side as to the way our money is being spent because 1 after all.they are paying their taxes also as are all the people of this Province. We are always painted, the members of the Opposition are always painted as trying to obstruct, insinuate, ake charges.

If charges are made, and this is a very serious charge,Mr. Speaker, I maintain, a very serious charge. 1 know if I were in the position on the other side of the House,! would certainly stand up and try to defend myself. Try to and perhaps defend myself to the best of my ability. But this will go out, there will be no more speakers, I presume. 1 am sure no one on the other side will speak. What we hea,ahere,Mr. Speaker, this afternoon, twenty minutes ago, that the Minister of Finance, who is entirely responsible for the operation of the Newfoundland Liquor Commission,was not even aware of these leases.

You know we can only conclude it mw,t be a one man-Government. The charge has been made, I wrote it down, the only person who was aware of these leases is the Premier and then when he got these trusted members of the inner Cabinet, these great men come out making great statements, they stand up and announce new stadia here, this here, wonderful thing, 2031

April 29, 1971 Tape No. 497 NC - 2 MR. MURPHY: people want to hear. But I certainly hope, I certainly hope,Mr. Speaker, that they also want to hear these same men, who stand up to advertise what they are going to throw away or what they are going to give away, or whatever you like, will stand up and take the stand that we too in addition,in the Opposition are as much concerned about what the Government are doing with· your money. Is there a difference in being elected on this side of the House or on that side of the House! Apparently there is, apparently there is, Mr. Speaker.

But I certainly hope,Sir, right seriously,that we have spoken this afternoon on this very,very vital -matter and this reaches, through the Press ,through the media to all the people of the Jrovince, we certainly hope so Sir.· I would like to see a picture, I would like to see a picutre in the Bulletin.of the hon. Minister, the great defender of civil right; question not only the legal fees but the rental fees that are paid by a Government of which he is a very very important factor. We presume he is an important member. He is a Minister, he takes on certain obligations. We all have our obligations,Mr.

Speaker, and that is to discuss the business of the people. If no-one speaks on the other side of the House, Mr.

Speaker, we can only,judge that they· are pleading equal guilt.with those persons who,according to statements made1 direct charges, no insinuations, that the Government in power now, the Liberal Government under Premier Saallwood,has taken the people's money,without proper discussion, without discussion with his own Cabinet Ministers, without discussion with any member of the Government, has gone on his own and arranged these leases with either a member of the Government sitting on the other side or a very close supporter of the Liberal Party. The charge has been made.

Unfortunately the Premier is not in his place today. Is there no one on that side today has the confidence in the Premier to get up and say this is absolutely wrong? This has not happened. There has been considerable discussion on these leases. This was brought before Cabinet as every other matter should be brought before Cabinet, 2092

April 29, 1971 Tape No. 407 NC - 3 MR. MURPHY: Is there anyone,today . the hon. member for St. John's West mentions a Law Firm, that are apparently a partner to these leases or a part of the leases.and that concerns members of the Government side, members of this Firm. Is this a great conspiracy? Is it a great conspiracy? All this is done, not an outside lawyer is in ontthis but someone concerned with members of this Government. Now,Mr. Speaker, that is a very serious charge to make, a very serious charge.

If I stood in my place at this moment and called any Minister of the other side a robber, that he had taken something over $200 thousand out of the public purse and spent it for his own benefit, I would not be allowed to make that charge,Mr. Speaker. But on the other hand what is the difference in taking the money and putting it in your pocket or taking the money through some mysterious deal and passing it on to a friend or supporter of the Liberal Party,as the charge has been made,and no one here has responded to that charge. So Mr. Speaker, as far as I am concerned this is a very,very serious charge.

A very,very serious charge and I certainly trust, as I said earlier, that this discussion this afternoon, above any other, will get to the people of the Province and that they will, in turn, ask questions not of the Premier, not of anyone but their own member. And say ;'what did you have to say about this? Did you stand up and ask questions? Did you stand up and get tl.e rir,hts of this? '' Oh no,we just sat there. We just sat there in silence.

In other words, by your silence you are giving your consent t8 : deals like this, pull them any day of the week, we do not worry, it is only our constittrents who are paying this. Our constituents, everyQne of us, forty-one districts, forty-two members, no wonder they must do without a bit of water and sewerage, a paved road here, a paved road there, fuel, welfare, so on and so forth. Because this is the way,Mr. Speaker, this is one of the many instances,in my opinion, where the money of the taxpa~er is being passed out in gift and perhaps, Mr. Speaker, this maybe just passing 2093

April 29, 1971 Tape No. 407 NC - 4 MR. MURPHY: with that hand and passing it to the other hand. Because we know, Mr. Speaker, there will be many elections held in this Province, there will be one very shortly, September 8, the hon. Chief's birthday. big party at his house that night. But Mr. Speaker, I will say that this Liberal Government will not be short of funds to run this campaign. Where these funds come from is something else, and I maintain,~r. Speaker, that many of these friends, who are beneficiaries of this Government,ace very nice to the Government when the time comes for another election campaign.

Yes,Mr. Speaker, we have had a comparison of rates, no need for me to go into them, I think the Press have them all, where in three areas of this Province, we are paying $12 thousan~ a year rent for buildings which have been looked at by contractors and said they cost in the area hP.tv~~n $20 and $30 thousand. Mr. Speaker, I presume this motion will be put very shortly, We are here in this Bouse at the present time, sixteen of us, possibly there should be forty of us here, but we are not all in the House. Will it go, Mr.

Speaker, as it always went, where the members on this side stand up and support this resolution and will the members on the other side, by their voting against this resolution, give their consent, their confirmation to the type of item, the type of business, the type of deal, that we are speaking about thi~ •fternoon? Thia is essentially the question,Sir.

If there is no need to worry about an investigation, if everybody is lily white, if they are all wearing their halos, their wings are flapping, I think that the hon. member for Fortune Bay said~ "no worry, we defy anybody to come in and find anything wrong with our account, with our leases." I am sure, Sir, that when the vote is called, that everybody in this House, not only the members on this side, but everybody who is above suspicion, who is above reproach, will stand up and support this motion and welcome, Sir,in view of the very serious charges that have been made in this House this afternoon, dll welcome a Commission of Enquiry 2094

April 29, 1971 Tape No. 407 NC - 5 MR. MURPHY: as to why these leases have been signed, and find out by whom, and in doing that Mr.

Speaker, I feel that these members, as I and tbe rest of us here in this House have done, have taken an Oath, when we are sworn into this House, Sir, to uphold to the best of our ability, Sir, our duties in this House of Assembly Our first duty Sir, is to our own constituents, to the people who elected us and, coupled with that, our duty to all the people of the Province, to see Sir, that the high honour paid us when we are elected to this House, to see that the business of this House and the monies belonged to this House, the monies belonged to the people, are expended as wisely as they possibly can and to insure, Sir, that no one individual in this House has the right, has any right, to make deals with companies or individuals, where many dollars of the people of this Province are wasted or passed out as hand-out! because they are supporters of the party in power.

I heartily endorse this Sir, and I urge that everybody in this House support this motion and let us prove it true or false. MR. SPEAKER: If the hon. member speaks now he closes the debate. Ia there any other hon. member who would like to speak. MR. CURTIS: I would like to adjourn Mr. Speaker. MR. SPEAKER: Are you moving the adjouniment? MR. CURTIS: Yes. On motion debate is adjournment. MR. NEARY: To get on to the next order of business, I wonder if I could have leave of the House to answer a question that was asked by the hon. member for Burin earlier in the sitting this afternoon? MR. SPE,!l(ER: Agreed.

MR. !!_E,!RY: MR. Speaker, immediately upon being asked a question earlier in the sitting this aftemoon,by the hon. member for Burin, I went to the telephone to find out if wives of miners who are presently in dispute with the Newfoundland Fluorspar Company at St. Lawrence had applied to the Department of Social Services and Rehabilitation for assistance. As my call 2095

April 29, 197 Tape No. 407 NC - 6 MR. MURPHY: was being put through.Mr. Speaker, another call was comi,ng through to me conceming the same matter. I was informed that about twenty-five citizens of the area, not all from St. Lawrence but in the surrounding area. were then at our office in St. Lawrence requesting help. t made an imaediate decision on the celephorte, Mr. Speaker, to give these applicants short-term assistance 1 based on need,as we do in all other 2096

April 29, 1971 Tape 408 PK - 1 'HR. NEARY: cases of client  who come to us for help when they are in need. Mr. Speaker, I sincerely hope that the disputing parties will get · together again very quickly and settle their differences so that the men can retum to work and make short term assistance tmnecessary. I have "Very good reason, Sir, to think that an effort will be made in this direction very shortly. MR. CURTIS: Order .~ty-nine. Motion: Second reading of a Bill, ''An Act Further To Amend The .. Civil Services CommiHion Act." (Bill No. 49) MR. MAFSHALL;t Mr.

Speaker, this is a Bill that is being bought in and I do not think it will cause too much comment and contention. I feel perhaps it will be adopted unanimously. I certainly hope it would. This is

an Act to bring about much needed amendments to the Civil Service Commission, ~r. Speaker. As the si~uation presently stands~the Lieutenant Governor-in­ Council, that is - the Cabinet.appoints a Civil Service Commission,consisting of not more than three members and shall appoint one member to be a Chairman. Now one of the problems that has~arisen is that the appointments to the Civil Service C01111Dission in recent years certainly had been political appoints. There has been appointed to the Civil Service Canmission the defeated candidate in the Gander by-election, Mr. Robertson, there has been appointed Mr.

Fewer to the Civil Service Commisaion, who was a known and active Liberal supporter in the Town of Grand Falls or in the District of Grand Falls durinp the last election. And the late Chairman of the Civil Service Colllfflission also happened to be an ex-member of the House of Assembly. I do not feel, I do not think that this is healthy for the Civil Service .All such. We saw in times in our history,past,conde1!1l'lations of the Civil Service, the way the Civil Service was established in the 1930's the Amulree Report.

We have seen similar observations made in the Economic Commission Report.wtth respect to the necessity of a stron~ Civil Service, and I do not think that anybody here will disagree with this necessity. 2097

April 29. 1971 Tape 408 PK - 2 MR. MARSHALL: nut the make-up of the present Commission,in regard to the good intent of the members concemed,ia not conducive to a strong Civil Service.

It leaves it open to the charRe of party patrona~e and,indeed, when~one notes, and I will come to this in a moment, the appointments that have been 111ade by this Civil Service Commission, we can see that over the period of certainly the past three or four years there has been a pattern where the Civil Service Commission appoints merely in the stenographic class to a great de~ree and there have been many, many appointments made to the Civil Service,as such putside the terms of the commission, which is authorized I know by the Act. And there is another chan~e which is recommended by this Bill.

I will go into it in a moment. But, let us get back, first of all, to the C01111Dission. Thia Bill provides that the Civil Service Coamission be appointed by the Lieutenant Governer-in-Council, but the distinction is this, the Commission will be appointed fr0111 senior civil servants, who have had executive experience and has served not leas than ten years in the Civil Service.

Now this is a provision which is similar to the provisions in certain other parts of Canada, ... ~e • .are very fond in this House from time to time of quoting Acts and •ituations that have occurred in other provinces, and therefore, we cannot depart from the norm. You cannot have it both ways, the same nor.a of judpent apply.

In the Province of British Columbia, for instance, reference to that Civil Service Commission Act will find that the commissioners to the Civil Service are,again, appointed by the Lieutenant Governor-in-Council from the senior Civil Servants who have served not less than ten years in the Civil Service itself. I feel that is a very neceaaary and very benefical amendment to be ude to this Civil Service Coma:laeion Act. It will tend to strengt~en th~ Civil Service. It will give the Civil Service a much more vigorous voice in its own affairs.

It will to a large extent eliminate any appearance whataoever,over the long run,of party partoaage in the Civil Service. The _Civil Servants or many civil servants employed by the Government today do feel this to be a "Very, very real necessity. It is very disconcertinJt too for a youn~ man. l'he Civil Service itself, first of all, should be a career 2098

April 29, 1971 Tape 408 PK - 3 MR. MARSHALL: ''Im admirable career a young person would take up and be able to look foTWard to advancement. But, mfortmately, such is not always the case, and one finds some people in their middle years complaining about the fact that another person is being put in ahead of them. And this person is put in because,they feel, of political conaideration. So certainly the Civil Service not only should have complete control, also with respect to the promotion in the civil service itself, lt should set up proper and adequate examination fou this purpose.

This is the type of,along the lines and along the type of civil service we have in the Federal Government, where promotions within the Civil Service are based on merit, as this Act will provide, 1':his Act also provides that promotion and appointment to the Civil Service would be based solely on merit and for no other reason • .And it is in line with the Federal Act. Also, there is a provision in the Civil Service Commission Act, where the Commission itself can be completly circumvented,and negated, which is what has happened from time to time.

Because,under the present set up, it is the Lieutenant Govemor-in­ Council or the Cabinet which declare which post will come within the jurisdiction of the Civil Service Commission. So the Cabinet can and I under­ stand has on many ocassion said that such- and.such a class of position or auch-mid•such a particular position will not come within the ambit of the Civil Service CommiHion. And thia 1a not good either,obviously,for the Civil Service.

So this Act,in addition to making the commissioners to be appointed from the Civil Service itself, and in addition to providing the promotionl shall be on the bases of merit,_aleo states that the Commission has the exclusive right and authority to make appointments to and from within the Civil Service of person for whoae appointment there is no authority under any other Act. Thi• is obviously a nece sary incident and a,1 necessary function of the Civil Service itself. 2099

April 29, 1971 PK - 4 MR. MARSHALL: So, then, in conclusion and in smnmary then, Mr. Speaker, this Act to amind the Civil Service COD111ission Act will do in essense three illll'ortant things: First of all, the C011111issioners themselves instead of bein~ persons connected with a political party, will be people who have had ten years of executive experience in the Civil Service itself. Now there is no doubt that this will strengthen the Commission.

Secondly, it provides plainly a prom,tion within the Civil Service and appointments in the Civil Service shall be on the sole bases of merit,and gives authority to the Commission to strengthen its regulations with respect to this criterion. And, thirdly, it fur~her strengthens the eommission by saying that the Commission has the exclusive right to appoint within the Civil Service itself.

Now, I realize there might be certain classes of positions, such as Deputy Ministers, but they are very, very few and far between,where the Civil Service Co111111ission perhaps should not have this ~ay with respect to the Deputy Minister, but I would say that tMt position is virtually the only one that should not come tmder the Civil Service COllllli.ssion. So this Act then, as I say, would strengthen the Civil Service Commission and I put it forth for that purpose,knowing full well that the bulk of the career civil servants in this Province entirely support these rec0111Dendations as well. MR. H. R. V.

EARLE: Mr. Speaker, this Act,introduced by my hon. friend the member for St. John's East,is. I think, one of the most worthy ones r.hat has come before this House for some time. This particular segment of the Civil Service Conmission comes under the Minister of Finance. And all that he has said does bring back to mind to me, the absolute need of the sort of chan~e which this Act envisages. Unfortunately, the Civil Service of this Province has been wide-open for partisan political appointment to staff it. Now,without reflection on the 1,ood ~en who have been in these particular jobs over the years,and .

I believe sincerely that . most of these men have done their jobs to the beat of their ability and with great sincerity. But, in many cases, they were 2100

April 29, 1971 Tape 401 PK - 5 MR. EARLE: neither qualified by experiencenor training to do such an fmt,ortant job as the Civil Service Commission demands. The classification and the variety of people serving in the Civil Service or the Public Service is extremely great, so that, it is quite beyond the c0111Petency of any two, three or four individuals to judge the needs and requirements of the people to be selected for all of these posts. And

whereas they~in many cases, of course, consult people who are familiar and do know the type of person that should be selected, particularly in professional classifications and so on, the enlargement and extension of the Civil Service Commission would be of great benefit to the Government, particularly : if the opportunity W9re taken,so doing,to put on that Cormnission more qualified and better trained people who are familiar with the subject of personnel.

Now to go back a bit, when this personnel group that was examining the various classifications of the Government were appointed, it was at the time that I was minister, lt was d~ne for the purpose of getting once and for all a clear description of the job classifications of all the people throughout the Public Service; so that,literally, people suiting these particular notches could be fitted into them and could be ~romoted from one to the other. And this, I think, was a very worthwhile undertaking. lt is now beginning to show its value in aome of the negotiations with the Public Service that are taking place.

And I felt at the time, and I still feel very strongly and this Bill supports it~ ~hat the personnel division of the Department of Finance should be gotten top,ether with the Civil Service Commission in saue way, so that there could be joint activity, joint consultation, and joint decision, because one thing so relates to the other ·in the Civil Service; fhe persons job description, his job classification,ia so relevant and so much tied to the type of p~rson that is appointed to fill that particular job.

So one cannot function without the other, And as my hon. friend said, the purrose of this Bill,in introducing into this Commission. people who have had many years of experience,in selectin~ those to occupy those jobs, is all i'll'!Portant. This is far too im~ortant a 2101

Ai,ril 29, 1971 PK - 6 MR. EARLE:job to leave to political chance. It does not matter who is in the Government or what Govenunent is in force at the time, when you are electing the people who are to do the public work of this Province, there should never be and there must not be political preference shown. Now all toe often,in the past, this has bean in the case that there have been people who are politically associated with the party in.l)Qlfe• that have got jobs.

It is the old saying, "it is not what you know, it is who you know", that very ofte •, gets people in a job,and this has been tremendously the case, so often the case in the past. And the door thrapgh which that has been done was something else: which my hon. friend mentions; that is the exemption of posts from the appointment by the Civil Senice Comaission, This is one of the most dangerous precedents that any Government can take on. Truly there 11lUSt be a certain leeway for certain key appointments, but what 2102

April 29, 1971 Tap.e no. 409 Page 1 Mr. Earle. bu happened in the paat is that when these posts are opened up outside the orbit of appointlllellt by the Civil Service Commission, very often,in the need and haste to get so•body to fill a particular post, a person is selected at'very much higher a&lary than that which is applicable to his counterpart in aome other departaent of Government.

Thia ianediately starts a vicious circle of complaints right throughout the whole public service; particularlv. 4 if you should happen to bring in so•body from the outside who is supposed to have some particular qualification and comes in at a salary which maybe half as.much again or even double that of soaieone who has been in the Civil Service for ten or twenty years and ·is equally competent to do the job, but is getting just about half the salarv. This waa one of the main .. reasons behind this personal investigation.

Because you could definitely fit peoole'into slots for which they were qualified and not having one chap coming in and bei~g paid $28,000 a year and somebody else doing perhaps a much more important job in the total picture getting perhaps $10,000, $12,000 or $13,000 a year. This in all scales of pay>right throughout the whole Government service, this sort of thing pertained.

You would have ridiculous situations developing where one particular·· department, perhaps a nev department which has been set up, needed specially qualified people to do their work. so. they i-d:lately raided other departments and people vho had been trained for this particular function. They appointed these people, vei:y often at salaries• very• very 11mch higher than the post from which they came. Now nobody objects or nobody should object to a qualified person getting a better opportunity.

Opportunity is always a must in the Civil Service, If you are to have a loyal and dedicated Civil Service, they must be given the opportunity to advance. There 1• no earthly reuon under these circumstances that a person leaves a post,which is paying $7,000 a yeai; and goes into another one which is paying $1S1 000 a year. The trouble with the thing ia not that the man 2103

April 29, 1971 Tape DO. 409 Page 2 Kr. Earl• get• $15,000 a year but the fellow who fills that post in the old place 1 atill getting $7,000. He i  probably just as well trained and just u qualified as the fellow who left that. So, there ia no sense to all of this. Now how on earth can you expect 1118D whose only background is perhaps political setvice to the Province, to judge these things with proper competence. MR. MURPHY: It is very difficult to hear the hon. member, Sir •• MR. EARLE: Ah, I do not mind that in the least. Somebody is listening.

At least people with proper confidence and people with experience.who can judge the value of a man and judge the position that he should go in, 1• not necessarily or certainly is not a person who has just gotten into that particular job because of &01118 political following. I say,to repeat ayaelf on what I first stated. · Maybe that man is as sincere and dedicated u he poaaibly can be 1 but without the necessary background and training, he certainly cannot really fiU that pos:f.tion. This whole subject of personnel and job clatsification and all this today ts a pretty highly developed acience.

The Govemment are, in itself, one of the largest corporations. It is the largest corporation in Newfoundland. It is absolutely essential that the Governmant of this Province haw the beat possible people doing its work. They are, after all. doing the work - the mat important segment, which is looking after the affairs of our people. If you put in mediocre people or indifferent people or aoabody who cannot do the job, the public are again being taken to the cleaners by paying for some fellow who cannot do bis work properly. ' How so• years ago a good friend of mine, Mr.

Stewart Godfrey, who was given a report to brin& in. I think it was Wood Gundy or something he aerved under at that time, to brina in a report on the whole set-up 2104

April 29 1 19?1 Tape no. 409 Page 3 Mr. Earle of the Civil Service. They went through department by department with a fine-tooth comb. They ude numerous recoanendations. They had volumes of this stuff as to how each department should be treated. But that stuff is virtually chucked in the wastepaper basket. It was too politically dangerous. Most)of the Government people at the time just would not consider it. It could not be implemented.

But from my experience. when 1 was a member of the Government, I know that some of the deputy ministers who read that report. although it had not been approved and had not been implemented. they. themselves 1 tried their best to follow the rec011D8Ddations that were in it and upgrade their departments. Now had this responsibility been properly passed on to a properly constituted Civil Service Co111Di ion 1 theae questions need not have arrived. It would not rest on the responsibility of s011e deputy minister or some senior servant to do his job the beat he coul