VOL. 1 PRELIMINARY UNEDITED TRANSCRIPT HOUSE OF ASSEMBLY FOR THE PERIOD: 10:00 a.m. - 1:00 p.m. FRIDAY, AUGUST 17, l979 NO. 25

August 17, 1979 The House met at 10:00 A.M. Mr. Speaker in the (hair. HR. SPEAKER: :1P.. JA.'IIESON: Finance (Dr. Collins) is available. Tape 894 EC - 1 Urcie.r.:, please ! OR.l\L QUESTIONS The hon. the Leader of the Opposition. ~lr. Speaker, when the l1inister of I would like to ask the ~~nister of Finance if his officials or he have been made aware of the considerable inequities with regard to the school tax.

Members on this side, and, I suspect, members on the opposite side, have had many representations ~~at there are considerable evidences of unfairness in terms of some welfare recipients who are obliged in some instances to pay the tax because of the type of assistance they are receiving and others do not. To be more specific, Mr. Speaker, for instance, I personally have a case in mind of someone who is getting a war veteran's allowance and because it is a war veteran's allowance, it is not defined as welfare and subsequently, they are being assessed,

whereas someone in equal circumstances is not. I ask the hen. rninister 1first of all, Is he aware of these inequities? Has any study been done to see if some modification or changes in the rules or regulations or whatever is required to make this a more fair assessment? MR. SPEAKER: DR. COLLINS: The hon. the Minister of Finance. Mr. Speaker, the actual instance that ~~e hon. ~~e Leader of the Opposition does bring up is a somewhat difficult one. We are aware of that difficulty.

I think it is the feeling of those involved, themselves, that they do not look- and I certainly sympathize with their feelings in this regard - they do not look upon war veteran's allowance as a form of welfare or as a form of social assistance; they look upon it as their just due, or at least as a just due given them, themselves, or the survivors of a war veteran. So this does not fall into ~~e category of being a welfare payment, nor should it, in my view. So that does present a difficulty in that regard, 2260

August 17, 1979 Tape 894 EC - 2 DR. COLLINS; particularly when such individual.s may,in actual fact 1have very slender means and when in fact school tax does constitute a burden for them. That is a difficulty we are awar~ or. MR. JAMIESON: t·1R. SPEAlQ; R: (Si lliii\

S) Leader of the Opposition. MR. JAMIESON : Mr. sp·eaker, a supplementary. A supplementary, the hon. the Well, with respect, I think tne hon. the Minister of Finance (Dr.

Collins) has made my case for me, and while it may be in the very narrow definition that it is not welfare - and I would accept that, although incidentally, I believe if he would look at the precedents h.e would find that war veteran's allowances as opposed to pensions have on occasion been identified as being comparable to some form of social assistance - but 1-<ithout being argumentative, my question is this, l'lould the hon. the minister take under advisement what is unmistakahly - and I am quite certain t.'lat there would be no problem or no argument from anyone 2261

August 17, 1979 Tape No. 895 MR. JAMIESON: about treating these forms of payment which are not specifically identified as welfare but which amount to the same thing 1 where there are 'slender means: to use the hon. minister's argument, and put_those people in the same category on the grounds that two people living side by side, the difference in their incomes is negligible and yet one is paying the tax because of the category of payment they are getting and the other is not. I ask the hon. minister will he in humanity's name look into it and see if we cannot be just a little less bureaucratic about it? MR.

SPEAi.<ER (Simms): The hon. Minister of Finance. DR. J. COLLINS: Mr. Speaker, I think I can give the NM - 1 hon. Leader of the Opposition an unreserved ccmmitment in that regard. We certainly will take it under advisement. MR. SPEAKER: The hon: member for Grand Bank. MR. THOMS: Mr. Speaker, a supplementary to the Minister of Finance.

Would the Minister of Finance consider right now the exemption, I believe it is $3,600 -you know, the poverty line is $6,000, maybe even $7,000 1 but let us say the poverty line is $6,000 -would the Minister of Finance consider raising the exemption at least to the poverty line of $6,000 which would take care of a lot of the inequities in this respect? MR. SPEAKER: The hon. Minister of Finance. DR. J. COLLINS: Mr. Speaker, I presume the hon. member is referring to school tax matters. Well 1 this clearly is a policy matter, Mr.

Speaker, and all I can say to the hon. member, I will bring-his concerns forward and I cannot give any commitment at this time but I will take that under advisement also. MR. SPEAKER: The hon. member for LaPoile. MR. NEARY: Mr. Speaker, my question is for the President of the Council in the absence of the Minister of Justice. In view of the fact, Mr. Speaker, that we now have a new Minister of Justice in this Province and an administration that seems, at least 2262

August 17, 1979 Tape No. 895 MR. NEARY: leaves the appearance that it might be inte~este<i in dealing with wrongdoing of the Moores Administration, I wonder if the minister could tell us what the go~ernment is doing about a letter that I wrote to the former Minister of Justice, Mr. Hickman, which I will now table, Sir, I do not believe it has ever been tabled, in connection with - and I will table it along with invoices too, Sir, - in connection with hard evidence of wrongdoing in connection with Labrador Linerboar~ during the time the government operated the mill out in Stephenville? MR.

SPEAKER (Simms): The hon. President of the Council. MR. MARSHALL: Mr.

Speaker, not having been aware of the contents of the particular letter, it is the first tillle I am -are of it, I am not in a position to give a definitive answer to the question, but I can state that as has been announced there were certain investigations into the operation.s of Labrador Linerboard, for instance, with respect to the marketing, that have al.ready been announded by the go~ernment, but I am not aware, as I say1 of thi.s specific letter itself or the allegations contained therein, Be it sufficient to say that if, and I underline the word if, there is 2263

--.. - August 17, 1979 Tape 896 PK - 1 Mr. Marshall: anything of any substance that merits any investigation, I am sure the new and effective Minister of Justice (Mr. Ottenheimer) would take it under advisement and operate accordingly. MR. NEARY: But I cannot answer a question in the dark. A supplementary question, Mr. Speaker. MR. SPEAKER (SIMMS): A supplementary, the hon. member for LaPoile. Mr. Speaker, the hon. gentleman mentioned MR.

NEARY: there were certain investigations going on in co~nection with Labrador Linerboard during the period that was nationalized by the Newfoundland Government and the time t.'tey !l'.a."'laged and operated ::he mill. Would the han. gentleman tell the House if these investigations include investigations into the shipping contract, the marketing contract, the purchase of equipment and materials for the logging operation in Goose Bay and for the mill in Stephenville, and if they involved theft and so on? MR. SPEAKER: The han. President of the Council. MR. MARSHALL: Mr.

Speaker, I am not in a position right now to give an answer of that nature. The only thing I can say is that I cannot plead of being unware of,generally speaking, some of the matters raised because the han. gentleman has raised the111 time and time again. Some of them 1 quite frankly 1 have been thought to be without any substance whatsoever. But if there happened to be any that require investigation at all 1 this government would be determined to see, if it is merited, that an investigation is carried out in the same way as it would be in any other instance. MR. NEARY: MR. SPEAKER: MR.

NEARY: A supplementary, Mr. Speaker. A final supplementary, the han. member for LaPoile. Mr. Speaker, the han. gentleman just made a statement, Sir, that some of the matters raised were without substance, some were with substance. Would the han. gentleman care to indentify the ones, the charges made without substance and the ones made with substance? The hon. gentleman seems to have knowledge of that particular fact. would the hon. gentleman tell the House and tell me 2264

August 17, 1979 Tape 896 PK- 2 Mr. Neary: which items he is referring to that have no substance? MR. SPEAKER (SIMMS) : The hon. President of the Council. MR. MARSHALL: It is a difficult word to interpret. Mr. Speaker . It is open to both subjective and to objective definition, I would presume. All I am talking about is what is public, what has publicly been made known to the House. I am not ~~e Minister of Justice (Mr. Ottenheimer).

It has been indicated 1 as all han. members know1 that there was an investigation into allegations being made with respect to alleged, and I underline the word "alleged", commissions obtained by people who were - by a concern that was marketing Labrador linerboard. You know, that is one that I know of. I am not saying that it has substance, it would be a very dangerous thing for a person to say that it has substance, hut what I mean was that, you know, that is one that is obviously being looked into. But the rest of the matters that the hen. member brings up , you know, I cannot give any opinion on them now.

I have heard the han. member - MR. NEARY: You have heard! MR. MARSHALL: I have heard the han. member bring them up from time to time,over and over again, just about, you know, every opportunity that he gets. And, you know, we would draw issue, but I do not think the Question Period is the point to get into a debate on these relative things. The hon. member and myself have loCked horns on this matter before, on certain aspects of it before as well as he has locked horns with other members of the House. And I think he is fully aware of the government's position on it.

The only thing is I would like it to be known full square that if there are any grounds whatsoever for an investigation, be it in the Labrador Linerboard or in any other aspect of the administration of criminal justice , this government and the very competent minister we have will see that it proceeds. SOME HON • MEMBERS : Hear, hear! MR. SPEAKER: The han. member for Bonavista North . 2265

August 17, 1979 Tape 896 Pk - 3 MR. STIRLING: Mr. Speaker, I have a question for the Minister of Rural, Agriculture and Northern Development(Mr. Goudie). Would til~ rninis1:er conf.Lrm Lhat Dluf:berrit!S ill t.he Eona.vista l~orth 2266

August 17,1979 Tape No. 897 AH-1 MR. STIRLING: area can be exported from Newfoundl~~d this year without a requirement for freezing. MR. SPEAKER:(Simms) Agricultural and Northern Development. MR. GOUDIE: The hon. minister of Rural, Mr. Speaker, yes,I can confirm for the hon. member that blueberries being shipped out of this Province from any area of harvest can be shipped in an unfrozen state.however,they do have to meet the grading requirements as stipulated in the federal regulations pertaining to international and interprovincial shipments of berries. MR. SPEAKER: The hen. member for Eagle River. MR.

HISCOCK: Mr. Speaker, I would like to direct my question to the Minister of Finance (Dr.Collins). One of the tests of any civilization is how civilization looks after its less unfortunate and with the plight of the Boat People in particular I think we could honestly say that it is probably one of the saddest blots on humanity that we have seen in this century. In this regard 1 as was brought up before of the Boat People . the Red Cross is having a drive and in this regard the Red Cross has campaigned to various governments across Canada asking for donations.

Ontario has given dollar per dollar and they have matched the public 1which is now $136,246 1 Saskatchewan has given $25,000 1 British Columbia has given $50,000 and Manitoba has given $30,000. Has the Government of Newfoundland , the Province of Newfoundland and Labrador 1 given any donation to the Red cross and,if not 1 will they be giving one in the foreseeable future? MR. SPEAKER: The hon. Minister of Finance. DR. COLLINl!l: Mr.

Speaker, I do not know if my hon. colleague, the l~nister of Social Services (Mr.Hickey) wishes to respond to this question from the hen. member which related to whether the Province has considered making a contribution to alleviate 2267

August 17,1979 Tape No. 897 AH-2 DR.COLLINS: the sufferinqs of the Boat People in S.outh East Asia. If the hon. member wishes to make a response to that I certainly would yield to him. MR. SPEli..KER: The hen. Minister of Social Services. MR. HICKEY: Mr. Speaker, I did not qet the full extent of the question. Would the hon. qentle-n repeat it? I am sorry. MR. SPEAICER: The hon. member. for Ea9le River (Mr. Hiscock) to repeat his question. MR. HISCOCK: The Red Cross has asked the various provinces and the national qoverrunent to contribute to the pliCJht of the Boat People and in that regard Ontario ha.s given on a. 2268

August 17, 1979 Tape No. 898 NM- 1 MR. HISCOCK: dollar per dollar basis,which is $136,246 1 Saskatchewan has given $25,000, British Columbia has given $50,000 and Manitoba has given $30,000 1 and the question was, has the Government of Newfoundland an~ Labrador given any donation to it and if they have not are we going to be giving one in the foreseeable future? MR. SPEAKER (Simms): MR. HICKEY: The hen. Minister of Social Services. Mr. Speaker, the only thing I can say is that I can acknowledge a communication from one group in St. John's requesting assistance and \ve have not decided as to how we can assist yet.

I am sure the government will do whatever it can. I must point out 1 however 1 that we have some serious problems of our own and we cannot deal with this issue in isolation of t hat, but I am sure that we wil! look sympathetic upon any request for whatever assistance we can give them. MR. SPEAKER: MR. T. RIDEOUT: The hon. member for Baie-Verte-White Bay. Mr.

Speaker, a little question for the Minister of Tourism now that he has graced the Chamber with his presence• Yesterdat I asked a question regarding the transfer of jurisdiction for the Federal Fisheries Board to the Province; I understand that the minister will be meeting with the Federal Minister of Fisheries next week to discuss that possibility.

I wonder if the minister could tell us whether or not any analysis have been done yet of the cost to the Province of assuming that kind of responsibility and whether any agreement has been worked out with the federal government to cost share the responsibility should jurisdiction be transferred to the Province? MR. SPEAKER: The hen. Minister of Tcurism. MR. POWER: I thank the member for his question.

There are now in the Department of Tourism, Recreation and Culture, in particular the Division of Wildlife, some very serious considerations and plans being made up to discuss and be fully cognizant of all the ramifications of just taking jurisdiction. Again in this problem of wildlife enforcement,I think everyone agrees that all wildlife 2269

August 17, 1979 Tape No. 898 MR. POWER: enforce)llent within the· Province, Mr. Speaker, shoul.d be under the jurisdiction and control of one group of persons. Again the problem relates back to exactly who is going to finance that one group of enforcement officials. We, as a provincial government, have a very difficult time trying to get enouqh wildlife officers for our own provincial regulations which are now fairly, I suppose, rigid and fairly detailed. We certainly do not have either the manpower or the money to hire other persons to take on the enforcement of the salmon problems as well.

So, therefore , a great deal of study is going to have to he done into this problem of whether it is just a matter of taking over control of twenty-five or thirty - I think they have well over 100 salmon river wardens; just to take those; over you coul.d be talking about many, many Illillions of dollars.

The problems could be, in that regard, financially, certainly very serious; also the problelll as to how we realign the division of wildlife - it woul.d 111ean hiring on new staff, new enforcement people and all this type of thing; and even that is then subject to the fact of whether it is simply a matter of transferring control and enforcement of certain rul.es and requlations, or whether it is in effect transferring all responsibility 2270 NM- 2

August 17, 1979 Tape 899 EC - 1 MR. POWER: for that division to the provincial government 1 whic~ may be a more serious problem. MR. RIDEOUT: Mr. Speaker, a su~plementary. l1R. SPEAY.ER: (Simms) A supplementary, t.'"le hen. the member for Baie Verte - White Bay. MR. RIDEOUT: Mr. Speaker, the minister sort of had a backhanded smack at it. I wonder if he could tell the House whether or not he would envision that the present wildlife officers, in addition to their duties as wildlife officers, would indeed become guardians of the rivers or whether the federal people would be absorbed into the present system?

Would the wildlife people be doing that in addition to becoming guardians on the rivers or would it be a separate function altogether? MR. SPEAKER: The han. the t1inister of Tourism, Recreation and Culture. MR. POWER: A good question, a good point, Mr. Speaker, because t.'lat problem is trying to be worked out.

The idea we see for enforcement people is that one person would enforce both our wildlife, big game regulations and small game regulations and also t :1at the same person would then enforce the rivers to make sure that t he salm:m and that sort of thing were not being poached, or laws relating to salmon and that type of wildlife were not being broken. Again, the problem relates to the fact as to whether one person is going to be able to do that with the type of training we have. We have a new training programme now set up for our wildlife officers.

It is obviously going to have to be expanded now to take in the regulations that relate to river life as in conjunction with the wildlife. Again, we are not sure! our officials in our department and t.'le federal officials are trying to work out some kind of, I suppose, plan that would take into account all these duties t.'lat an enforcement person should take into account. As we see it now, one person would be enforcing both sets of regulations, not two divisions within the department. MR. RIDEOUT: Mr. Speaker, a supplementary. MR.

SPEAKER: A final supplementary, the han. the member for Baie Verte - lfuite Bay • 22?1.

Auqust 17, 1979 Tape 899 EC - 2 MR . RI DEOUT : Mr. Speaker, I think the minister put his finger qn it, and that would be the problem of dilution of I want to ask the minister also whether or not he has any time frame in mind - should the federal government agree, of course - for this particular transfer of jurisdiction? Would we be looking at this Fall, next Fall? Is there a timetable in mind in which the minister hopes to accomplish this? MR. SPEAKER: (Simms) ~creation and Culture. MR. POWER: The hon. the Minister of Tourism, Mr.

Speaker, in talking with the federal ~ster of Fisheries, Mr. ~cGrath, we are talking about next season. So we are talking about if possibly all the details can be worked out, especially the monitaryones and the actual, I suppose, organization or reorganization of the division to take into account all these new persons. We are talking about having that done before the Fall or in the Winter so that next season 1when the season starts, all enforcement will be under our control. MR. NEARY: MR. SPEAKER: l1R. NEARY: Mr. Speaker. The hon. the member for LaPoile. My question is for the same gentleman, Sir.

I do not know if it is a supplementary or a new topic, but it is along the same lines, federal/provincial relations, as my bon. friend'lS, in connection with a commitment that was llia.de three or four or five years ago by the Government of Canada in ·co-operation with the provincial govemmant to build a lifestyle or a model fishing community in Newfoundland. I believe $1 million was committed for that project. MR. POWER: Right. MR. NE.ARY: Would the hon. gentleman tell. us if the project is going ahead, if the community has been selected? Just what now is the status of that project? MR.

SPEAKER: The hon. the Minister of Tourism, Recreation and Culture. 2272

August 17, 1979 Tape No. 900 AH-1 MR. POWER: Mr. Speaker, I am not fully versed with the details of that money that was made available through Ottawa.

I do believe in some of my recollections, and maybe if my figures are approximate or a little bit inaccurate maybe one of the previous Ministers of To~ism could help me out a little bit, but as I remember being given some detail on this, in 1974 for the 25th Anniversary of Confederation, I think $1,700,000 was made available to Newfoundland - $700,000 was made available for chalets and different things around the Province, one of which, I think, might have been in the member's district; the other million dollars was supposed to be for a Fisheries Lifestyle Village cr ~ Heritage Village, something, I suppose, similar to King's Landing, which I think is in New Brunswick or Nova Scotia.

The million dollars that was made available has never been used because it has been found that across Canada the cost of building a Heritage Village from start to finish may exceed $10 to $12 million. Now I have some questions and some reservations as to whether these figures are actually real. I am asking my officials in my department that hopefully next year we can lay down some groundrules so that we can at least select a site. There was, at least, in one case, one community in my district where a provincial park took in a deserted community, a resettled community in LaManche, to see if that would be suitable.

MR. STAGG: MR. POWER: Sandy Point is not in your district. There is also Sandy Point on the West Coast which is also being considered for that project. No decision has been made for a site. I am hoping that in next year's Budget the provincial gover~ent can make a priority of putting some money, some of our dollars in conjunction with the $1 million federally so that next year we can get that project going. But as it stands now, no work has been done in any real sense to spend that Sl million. 2273

August 17,1979 MR. NEARY: I'IR. SPEAKER: (Simms) hon. member for LaPoile. MR. NEARY: Tape No. 900 AH-2 A quick supplementary, Mr. Speaker. A quick supplementary. The L understand then from the hon. gentleman's answer there seems to be some doubt as to whether or not the project will go ahead even next year even though the provincial government, I believe, has received the $1 million. The check has been passed over to the government and the government has been unable to spend it 1 or they have spent it for some other purpose.

Now want I want to ask the hon. gentleman is if the project goes ahead, to remove it from partisan politics would the hon. gentleman consider setting up an independent committee, outside of the political arena,so that the community selected, if the project does go ahead - and if the project does not go ahead perhaps the hon. gentleman can tell us what he is going to do with the $1 millior..­ but if the project goes ahead, to keep it out of the political arena, would the hon. gentleman set up this independent committee so that nobody will be able to point the finger and say this community or that community was selected along political partisan lines?

MR. SPEAKER: The hon. Minister of Tourism. MR. POWER: Mr. Speaker, I guess the last thing we want to do is to have to give back that $1 million to the federal treasury, especially since I think the now Leader of the Opposition was Minister of Trade and Commerce when that agreement or that grant was given to Newfoundland. MR. ROBERTS: He brought the cheque down. MR. POWER: Did he really? That is nice, We thank him for the cheque and we have certainly no intentions of giving it back to the source 2274

August 17, 1979 Tape 901 PK - 1 MP... POWEP: from which it came. However, with reg-ards to a committee bein~ set up, an impartial committee to select a community, because that project would then become the centre of the tourist industry in Newfoundland in a very real sense, that that committee, I am sure that in the DREE Committee that we have now, the Federal/Provincial Committee should be quite able and capable to select a site on a very impartial basis without any prejudice or any political bias. MR. SPEAKER (SIMMS) : The hen. member for Grand Bank. MR. THOMS: Mr.

Speaker, in the absence of the Minister of Justice (Mr. Ottenheimer) I would like to ask the President of the Council (Mr. Marshall) this question~ in June of 1978 the then Mr. Leo Barry,Associate Professor of Law at Dalhousie,tabled a report g-ivinq some proposals for a new company law for Newfoundland. Some of the recommendations by Mr. Barry are very , very goodj others are very, very bad and would like at sometime to be able to comment on these. However,my question is when does the government intend to bring in legislation AN HON. MEMBER: on tomorrow. MR. THOMS: - with a new Companies Act? MR.

SPEAKER: The hen. President of the Council. MR. MARSHALL: Mr. Speaker, as the hen. member is aware that, you know, there was a white paper done by then Professor Barry which was tabled in the House. It has been under active consideration since- SOME HON. MEMBERS: MR. MARSFI..ALL: are very far-reaching. Yes, yes! - very active consideration. The recommendations It is the intention of the government to make revisions to The Companies Act. As I say1 the matter is under active revision, and whether it will come up in the Fall session or whether it 2275

August 17, 1979 Tape 901 PK - 2 Mr. Marshall: will came up in the second session of this Assembly will really depend - SOME RON. MEMBERS: Oh, oh! MR. MARSHALL: - upon the constraints of time on the administration to deal with the matter adequately before presenting it to the House. MR. NEARY: MR. SPEAKER (SIMMS): MR. NEARY: A supplementary question, Mr. Speaker. A supplementary, the hon. member for La.Poile. Mr. Speaker, will the hon. gentleman indicate whether Associate Professor Barry - SOME HON, MEMBERS: Hear, hear! MR. NEARY: -was under contract, was working on a contractual basis,or ~ee for service- MR.

SIMMONS: Cost plus. MR. NEARY: - or cost plus 1 or cost plus plus llnlimited expenses? What arrangement did the administration made with Associate Professor Barry to do this study? And has the report being accepted, in principle, by the present administration? MR. SPEAKER: The hon. President of the Council. MR • . MARSHALL: There are two questions, Mr. Speaker. I will answer the last one first, and I an~~Wered the last one previ,oas, the same answer to the last one is the one I gave to the previous, the earlier question of the hon. member for Grand Bank (Mr. Thoms).

So I take it that that answer can stand as an answer to the second question asked by the hon. member. AN HON. MEMBER: But then there is - MR. MARSHALL: Again when one asks specific questions as to the nature and IIIOde and manner of payment to Professor Barry at the time,I am not aware, I am not completely conversant of what the mode of payment was. The only thing I can say with an abiding confidence is that Professor Ba.rry1 amcmqst his many other attributes, the Minister of Mines and Energy is a distinguished member of the Bar, 2276

August ~ 7, 1979 Tape 901 Pk - 3 Mr. Marshall: a very highly regax-ded mem)Jer of the Bar of tbis Province, a eredit to this Province in the legal circles, as he is in others, and the services which he performed obviously he had to be paid for them. He was a private citizen at the time, and the government was well served :Qy the then Professor Barry as they are now. SOME BON. MEMBERS: on, oh! MR. MARSHALL: :rn other words 1 they got extremely good value for their money. 2277

August 17 , 1979 Tape No. 902 SOME HON. MEMBERS: Hear, hear! MR. NEARY: A final supplementary, S:!..r. MR. SPEAKER (Simms): A final. supplementary, the hon. member for LaPoile, followed by the member for Eagle River. MR. NEARY: Mr. Speaker, I believe the official title of Mr. Barry was Associate Professor. I do not believe he reached the status of a full Professor in the short time he was at the university. MR. SIMMONS: He was really a private citizen with connections. MR. NEARY: A private citizen with connections, that is right.

But in the meantime, Sir, I want to find out from the minister if the government will. take any action as early as possible on the report to do away with legal assistants, and lawyers, putting in their names on the share list down in the Registry office as the owners o£ companies for long periods of time. Does the government intend to deal. with this problem swiftly and quickly to make it compulsory, to make it illegal for lawyers and legal assistants to be shown on the share list for years and years as owners of companies when in actual fact they are not the owners of these companies?

Will the government take steps to make sure that people know who the real owners of these companies are? MR. SPEAKER: The hon. President of the Council. MR. MARSRALL: You know,that question is an assumption so really it is out of order. It is out of order to ask a question that has an assumption, that ass'llllleS its own answer. NM- 1 MR. NEARY: MR· MARSHALL: No, it is not an assumption, it is a fact. The problem is really mainly,I think,in the mind of the hon. member but he states it as a problem.

The situation is that, as it presently exists now, there is provision for provisional shareholders of companies when a company is incorporated 7 and in JIIOSt 2278

August 17, 1979 Tape No. 902 MR. MARSHALL: cases then the shares are transferred by the lawyers to their clients. I am not aware that it is such a burning and oppressive a problem as the hon. gentleman mentions, has indicated from tillle to time. But I will say this that when the bill is introduced the government would welcome debate along that area to see as to whether or not really that measures along these lines should be taken, because the government is cognizant of the opinions of all members in this House, even the.hon.~mber for LaPoile who voices thelll from time to ti.ine. MR.

SPEAKER: The hon. member for Eagle River. MR. HISCOCK: I would like to direct my question to the NM - 2 Minister of Transportation and C~ications. In view of the serious conditions of the road from L'ance-au-clair to Red Bay-and in a previous election a teleqram was sent from the Premier's Office that 01rer $200,000 would be spent on that road, on the advisement of the Department of Transportation and Communicatioi'ls whi.c:h he advised the Premi~ of course that this road is being surveyed for a new road and will take a new route altogether.

The Premier wrote back saying that he would like to have seen that money spent but now of course does not want to see money spent with a road that would be abandoned in the future. No major construction has been done on that road in the past three years and with the vi.ew that if it is going to be included under the DREE agreement it will not be for another three years until it is done, does the Minister of Transportation and Communications have any interim policy that will deal. with the serious condition of the road at this point? 2279

August 17,1979 Tape No. 903 AH-1 MR.SPEAKER: (Simms) Transportation and Communications. MR.BRETT: The hen. ~~nister of Mr. Speaker, I am happy that the hen. member brought up that topic. I plan on visiting the coast of x..brador and also that part of Labrador as soon as. the House closes. That road is in very serious condition and more so now since the recent rain. I think there were a lot of serious wash-outs. What he says is very true. I do not think we can• wait for a DREE agreement to do something with it.

Unfortunately,even if we had the money I do not think we could do very much this yearrat this late stage of the game, but I am going to try and find some money somewhere and at least do some patch-up jobs. But if nothing comes through in the DREE agreement this Fall 1 then I would think that the Province will have to make some major repairs to that road. MR. SPEAKER: for Oral Questions has expired. MR. NEARY: MR. SPEAKER: hon. member for Lapoile. Order,please! The time A point of order. On a point of order. The MR.

NEARY: Mr .Speaker, I believe in a few short hours ,Sir,the House will close down business until maybe sometime in the Fall or maybe next year. There are almost forty questions on the Order Paper unanswered, Mr. Speaker, and I want to find out from the President of the Council , the acting Premier (Mr. Marshall) when we are going to get the answers to ~~•ee questions. Will they be provided even though the House is closed or will WP. have to wait till the next seesion before we get the answers to these questions? MR. SPEAKER: To the point of order.

I do not believe I really need to hear any further arguments or debate on the point of order. I believe I have made a similar ruling the last three days in a row and I have to make the same 2280

Auqust 17,1979 Tape No. 903 AH-2 MR. SPEAKFR: ruling seeing the precedent has now been set. It is not a point of order. On motion that the Rouse resolve itself int.c a Committee of the Whole, Mr. Speaker, left the Chair. MR. CHAIRMAN: (Baird) Bay D'Espoir. MR. SIMMCNS: COMMITTEE OF THE WHOLE Order, please! Bill No. 45. The hon. member for Burgee- Mr. Chairman, it is unfortunate really that we are not going to have perhaps the kind of time to consider this legislation that we should take. 22Si.

August 17, 1979 Tape No. 904 so - 1 :1R. R. SIM!'lONS: Perhaps the government ought to look at some course of action which would delay the impl~entation of this bill until we have had a chance to look at the r~ifications. I will move in a few momenta a referral to a select committee. 1·1y reason for doing that, Hr. Chairman, is I be.O.ieve fully that we need some time to more fully comprehend the implications of this particular pi~e of legislation. Mr.

Chairman, yesterday the minister, in speaking to the bill, alluded to what is happening in other provinces,and I wvuld just like to reiterate that othe4 provir.ces have tried this particular legislation and have found that it is not a very workable or a very prudent piece of legislation and have backtracked both provinces, both Ontario and New Brunswick, the only two that have had any experience in this particular area. Now, Hr. Chairman, a point that I want to emphasi~e,because it is, for me, the essential point,and that is the point that relates to the consumer, to the purchaser of insurance.

The purchaser of insurance is paying 11 per cent sales tax on premiums. In addition to that, he is, in effect, paying the company's tax which up to now has been 2 per cent. Now, ~tr. Chairman, it has been argued by the ~inister yesterday, I believe, that you can not really take that 2 per cent and argue that it gets passed on to the consumer. Well, it hardly deserves a response but I suppose we ought to give one. Let me give you an example.

I am told that in the field of auto insurance, for example, •l(hich is a form of insurance whose rates have to be approved by the Public Utilities Board, I am told that in a most recent representation before that board when representation was made for a premium increase that one of the costs, I say to the Minister of Finance (Dr. J. Collins), one of the costs that the board ruled was an expense and therefore a legimate CCiilponent of the premium proposed by the auto insurance people 1 one of the costs which the board accepted as an expense was the 2 per cent premium, which the board acknowledged.

The board acknowledged it was a legimate expense and therefore a legimate component of ~~e 2282

Augu-.;t 17, 1979 Tape No. 904 SD - 2 MR. R. SIMMONS: proposed premium increase b¢Ilq requ.ested by the auto insurance people. And, of course, it is no different, Mr. Chairman when it comes to life, accident, any of the other forms of insurance to which this increase will apply. Of course it will be passed on to consumers. Who are we trying to fool? So we are talki.ng, Mr. Chairman, about an increase from euven plus two from 13 per cent to 14 per cent and in that :r am being a little loose with my figures because if :r were to tell the real t:..""llth, Hr.

Chainuan, except I can not quantify it beyond 14 per cent, if I were to tell the real truth the increase is not from 1'3 to 14 but from 13 to something well beyond 14, perhaps 15, 17, 1a because what we can not quantify or we can not put a yardstick on or we can not put a measure on is what the implications of this bill will be in terms of the real pr.emiums to the Newfoundland people. The Premier, the gover=ent generally, have been forewarned by the industry which kllOws this particular business,acd let us not fool ourselves, has a vested interest in this particular matter, Nobody is begginCJ that question.

But all concerned, Mr. Chairman, have been warned about the adverse effects of this particular le<Jislation. Now, :r am really appalled and surprised that there has not been more of an effort py government either to take the sensible initiative and withdraw the thing until they got a chance to look at it 1 because :r get the impression from the kind of answers I am getting from the Minister of Finance that this was hastily done without very much thought.

So why do they not have the courage to either withdraw the thing altogether until they get a chance to look at it or, at the very least, give some responsive substance about the 2283

August 17, 1979 Tape 905 EC - 1 !~R. SII-l!"'IONS: points being raised by us on ~~is side of the House,and the points raised assar~ u.s !rom t.."le government's viewpoint or vantage point that the implications will not be as dire as we fully expect they will be. Surely, Mr. Chairman, those people who are prudent enough to attempt to provide for ~~eir widows and their orphans by purchasing appropriate life insurance should not be especially penalized by ~~e government that is supposed to serve them. A person does not particularly want to leave his offspring a burden on society in the event of premature death.

Why should he be penalized for being prudent? Why should he be penalized for taking out a bit of life insurance, a bit of protection for those people? And that is what is happening here, 11r. Chairman • It is punitive • It is a penalty for some reason. MR. J. CARTER: (Inaudible) • MR. SIMMONS: Perhaps we will get a chance to hear from the member for St. John's North (Mr. J. Carter) and perhaps, a big perhaps, he will say something sensible, Mr. Chairman, when he stands up. Mr.

Chairman, perhaps the most upsetting thing about this bill from a political standpoint - not upsetting for me, I am used to the phenomenon that I am about to describe, but it must be upsetting for the many people who supported this administration in the election - is that once again, here is a case where the Tories do not keep their word. AN HON • MEMBER: MR. SIMMONS: MR. roBERl'S: MR. SIMMONS: Rubbish! The Tories' word is rubbish, I agree! Hear, hear! The Tories do not keep their word.

Before the election they said to the consumer, 'No more increase in sales taxes, ' but of course, the consumer, the voter, took them at their word and did not read the fine print. And the fine print in the Premier's message said as follows: 'While we say no increase in retail sales tax,

August 17, 1979 Tape 905 EC - 2 MR. SIMMONS: you know that other sales tax that we put on insurance premiums? - well, that is accepted. We are going ~u do something about that. We are going to increase that a bit.' The Tories do not keep their word, and that message is getting around loud and clear. Indeed, the latest instance - it is kind of off the subject, Mr. Chairman - but the latest instance, and I had to smile at it and then I found that I could not really smile because it was too pathetic - but I saw our Premier, he was going to be the mediator, he was going to mediate between Lougheed and Davis.

That is a promise he made to the Canadian people. Thank God he did not keep that one either. Mediate! He would do well to be here and keep his finger on L~e ariL~tically troubled - MR. STAGG: I do not think your Leader would agree with your assessment. Your Leader sent him off with accolades and good wishes and you are here knifing him in the back. I do not think you should be part of that caucus. MR. SIMMONS: I am sure even the member for Stephenville (11r. Stagg) was amused to see our Premier going to be the mediator, going to be the referee between Lougheed and Davis. MR.

STAGG: You do not belong in that caucus. MR. Sll-1MONS: He said, 'Clark made a fool of himself in Africa, why should not I back home?' MR. STAGG: You are not respectful enough for L~at caucus. MR. SIW.!ONS: Mr. Chairman, you know, really, the member for Stephenville really should have something to occupy his time, he really should MR. NEABY: (Inaudible) idle time, idle minds. MR. SIMMONS: - he really should. Mr. Chairman, the Tories do not keep their word. Mr. Chairman, tax on life insurance, in particular, and I single out one of the forms of insurance that this 2285

August 17, 1979 Tape 905 EC - 3 MR. SIMMONS: tax increase would apply to if carried by the aouse, tax on life insurance discriminates: It discriminates on sa=nqs throUq!l .l.l.fe l.n!;urance in CQIDJ?arison = otile"r foll!IS of savings. You know, I shoul.d not think out loud on this one because it m,i.ght give the minister an idea and we will have a tax on bank savings tomorrow, but it is an intezesting parallel 'that we should .. draw. Do you know· that 2286

August 17, ].979 Tape 906 PK - 1 MR. SIMMONS: i£ I decide to save a hundred bucks in a savi:lgs accounts i!1 the bank, it costs me nothing in taxes. If I try to save that same hundred bucks through life insurance it costs me 14 per cent in taxes. DR. COLLINS: That is wrong. MR. SIMMONS: That is not wrong, I say to the Minister of Finance (Dr . Collins). That is the same man yestexday, Mr. Chairman, who told us that an increase from 2 per cent to 3 per cent was not a SO per cent increase. OR. J. COLLINS : Same line o£ (inaUdible). MR. SIMMONS: Ah, in other words the convoluted line of argument.

We are going to revert now to Collins law of convoluted logic, half of one hundred is not fifty he said yesterday. DR. COLLINS: MR. SI~ONS: DR. COLLINS: SOME HON. MEMBERS : MR. SIMMONS: Did you ever teach mathematics in school? I did not. I did not. Right. oh, oh! The minister was never a student of it either. Mr. Chai.nnan, if I deposit $100 in a savings account, I do not pay taxes on it. I£ I want to buy $100 worth of protection or want to save $100 through a savings plan of some sort, I am going to pay taxes because of the discriminatory policies of this particular administration. What next, Mr. Chairman?

Now they tax insurance. Will they tax my bank account next? Well, I do not have much to worry about there because the bank account is very Slllall, the savings are nil. MR. J. CARTER: (Inaudible) . MR. SIMMONS: Mr. Chairman, is there no way? MR. NEARY: It is raining out today so he cannot go into his savoury patch. MR. SIMMONS: That is right. He cannot be in his savoury patch today so he is here stirring up dirt. 2287

August 17, 1979 AN RON. MEMBER: MR. NEARY: The king of the smear. MR. SIMMONS: world, I really have, Sir. MR. NEARY: MR. SIMMONS: Tape 906 EC - 2 Personal attacks again. ·Personal, alright. There is no doubt about that. Well, Mr. Chainnan, I have all the til!le in the No, you do not. No, I really have. If I have to bat flies from Stephenville and St. John's North it will just take me a little longer, I wi.ll be distracted from time to time. or I can make my wints quickly and the Goverrunent House Leader (Mr.

Marshall) can have his wish and get this place closed up so they do not have to hear questions from the opposition for a few months. MR. STAGG: Come on! Come on! Let us have at it! You have five minutes with the jury and it will take you fifty minutes to say it. MR. CHAIRMAN (Baird): The bon. member has the right to be heard in silence. MR. STAGG: Pass it over to the member for LaPoile (Mr. Neary} , he can heave it out of him. MR. CEiAIRMAN: Order, please! MR. SIMMONS: I would like, Mr. _chairman, for the Minister of Finance (Dr.

Collins), when he stands, to respond to the matter which he indicates I am not telling the House the truth on, because I submit to him, Mr. Chairman, that - MR. STAGG: MR. CHAillMAN: Stephenville. MR. STAGG: Mr. Chairman, on a point of order. A point of order, the hon. the member for The member for LaPoile has indicated the Minister of Finance is not telling the truth. That is clearly unparliamentary - not telling the truth. And I would suggest that the Chairman should demand that the member withdraw such a remark. He can rephrase it perhaps, although I doubt it. 2288

August 17 , 1979 MR. NEARY: MR. CHAIRMAN (Baird) : order. Ta pe 906 EC - 3 Mr. Chairman, to that point of order, Sir. The han. m~er for LaPoile on a point of MR. NEARY: I did say no such thing, I did not open my mouth, Sir. The han. gentleman just said, 'the member for LaPoile'. MR. STAGG: The member for Burgee-Bay d'Espoir (Mr. Simmons). I apologize to the member for LaPoile (Mr. Neary). MR. STAGG: So=y about that, old boy! MR. NEARY : Alright, Sir. It will keep the record straight. MR. CHAIRMAN: The assertion that he was not telling the truth is unparliamentary.

I would ask the member to rephrase it or withdraw. MR. SIMMONS: Mr. Chairman, first of all, I did not make that assertion. The member for Stephenville (Mr. S~gg) misquoted me. What I said - and I would invite Mr. Chairman to check Hansard - and I remember very distinctly, I said, 'Perhaps the Minister of Finance (Dr. Collins) when he rises, will indicate to the House why he thinks I am not telling the truth. I had made a point about savings tax, the bank accounts not being taxed and the Minister of Finance shouted across, 'That is not the truth. ' That is my entire point.

But the member for Stephenville is just being mischievous again. But the least I can expect from the Chair is he not play into the hands of the member for Stephenville. I have nothing to withdraw, Mr. Chairman, nothing to withdraw whatsoever. Now, there is a dis=imination here, Mr. Chairman. 2289

August 17, 1979 Tape 907 EC - 1 :!R. Sil-!,'!ONS: Mr. Chairman, if I want to save I have to pay taxes - not the 11 per cent on the life, I recognize that - tne 3 per cem::, and perhaps t:.ha-c: is tile pain-e: tne minister is attempting to make .. The 3 per cent will be applicable to life- unless he is :1ow indicating he is going to have an amendment;I hope that is what !l.e is saying. Perhaps that is why it is not true. Perhaps the minister has changed his mind. Perhaps he is going to exempt life now.

That would be a very desirable amendment to this particular legislation, to exclude the life, because I do not think for a minute the administration thought fully about ~~e implications here when they decided to apply this increase to all forms of insurance, I really do not. Now, ~U'. Chairman, another question I would like to have answered by the minister is, t·ihat do the Feds say about this? What does his good friend in Ottawa, John Crosbie, say about this? Well, I could tell "t:he House what John Crosbie is saying about this but I would prefer that the Minister of Finance (Dr. Collins) told the House. AN HON.

MEMBER: (Inaudible). MR. SIMMONS: Well, let us be half and half. I will give you just a little hint and perhaps he will confirm it.

John Crosbie­ because he now has a national responsibility and he is concerned not only about the couple of per cents of insurance that are written here in this Province but he is concerned about the insurance industry across Canada including,in particular, Ontario, where companies write a substantial amount of what has come to be known in the business as export insurance - I am told that Crosbie has been on the 'phone to people down here telling people how upset he is with this particular tax. Now what does the :-l.inister of Finance have to say about that?

I know the minister has talked to Crosbie about the subject of the tax increase. MR. J. CARTER: Sit down! MR. SIMMONS: Has Crosbie recorded how upset he is to the Minister of Finance here? I know he has been telling a number of o~~er people, Mr. Chairman, that this is going to have a very devastating effect, this precedent being set here. Not this tax alone, Mr. Chairman. 2290

August 17, 1979 Tapa 907 EC - 2 HR. SIMMONS: Let us not forget that we are just a very small

part in terms of population of the total nation. But this is going to have a precedent-setting effect which is of concern to the federal Finance ministry and Mr. Crosbie has voiced ~~at concern in many circles because of its adverse implications on the export insurance business, the insurance which we sell mainly, I understand, into the United States. What do the federal people say about this? l·lhat have they said to the Minister of Finance (ur. Collins)? Has this Department of Finance here checked it out with the federal people in Ottawa?

I submit they have not, or again they are stonewalling, they are not telling us the truth on the particular subject. Now, Mr. Chairman, I believe I have demonstrated that the bill before us is one that has a number of implications. It has implications for the export insurance business which I have just mentioned. That is not for us; if we were to look parochially and inwardly to our own situation, the export insurance situation is not one that is of immediate concern to us, but I suppose we do share some concern for the country as a whole in that respect anc it is a consiqeration.

But more immediate and more at home, Mr.

Chairman, is the effect that this will have on the consumer, the discriminatory effects that I have described, the lack of precedent for this elsewhere L~ Canada 1 or where ~~ere were precedents they were withdrawn in Ontario and New Brunswick, the measly amount of rroney that will be collected in relation to the amount of trouble that government is going through to try to get this $750,000 or so this year and $1 million next year,. ~'.:te breach of faith I have mentioned where the Tories said one thing before the election about tax increases and another thing now after the election: These, Mr.

Chairman, are certainly enough reasons, fully enough reasons, for the government to either withdraw the bill, to amend it or to refer it to a Select Committee so that members of t.'1e House can scrutinize some of the possible implications involved. That would have the effect of giving it some time, buying some time, I could have moved a six month hoist which would have the effect if carried of getting rid of ~1e bill. Perhaps ~~ere is wisdom, Mr. Chairman, in what the government is trying to do, but I cannot see it. 2291

August 17,1979 Tape No. 908 AH-1 MR. SIMMONS: And therefore, Mr. Chairman, at the very least let us give it to a committee that can take the next few weeks to have a look at it, hold hearings, hear evidence from the consumer, from the insurance industry and from other jurisdictions. Let us find out the facts about this particular situation. And for these reasons, Mr. Chairman, I take much pleasure in moving that this bill be referred to a select committee of the House. MR. CHAIP.MAN: (Baird) the Council. The hon. Presid~nt of Mr. MARSH~LL: I rise on a point of order, Mr. Chairman.

This may be something that Your Honour would wish to take under advisement. I would submit that the motion to refer this bill to a select committee is out of order for this reason, for two reasons really, the first being that the House itself ~as already determined that this bill should be referred to a Committee of the Whole. So it having been referred to a Committee of the Whole I do not think it is competent for the committee to delegate it off to a select committee.

The second point is that this is - although it does not come from a message from the Lieutenant Governor - this is in effect a finance bill and finance bills are dealt with in a certain manner and the way it is usually dealt with is a resolution before the House for the resolution to be considered by ~e Committee of the Whole of the House itself,for those two reasons. Now I refer Your Honour, to Baauchesne,the fifth edition, paragraph 411, sub­ paragraph 3. It says, "Every motion that is duly moved and seconded is placed before the House by the Speaker as a question for the decision of the House.

All motions must be presented to the Speaker in writing. No motion. is regularly before the House until it Las been read from the Chair. Then it may be debated, amended amencied, that is1 by the House itself, "adopted, negated and withdrawn as the House may decide. There can be hut one question pending at the time , though there may he numerous matters of business in the various stages of progress. The only exception from this citation occurs at the report stage of a bill." So I just point that out, Your Honour, 2292

Auqust 17, 1979 Tape No. 908 AR-2 MR. MARSHALL: because I do not think we should get into a precedent if, as I believe, such a motion is out of order. SO~lE i!ON. MEMBERS: MR. CHAIRMAN: (Baird) Belle Isle. MR. ROBERTS: nee.=, hear! Hen. member for the Straits of Mr.

Chairman, I think this is an important matter because as far as I am aware, I can only speak from my own knowledge,of course, but as far as I am aware there has never been a ruling in this chamber on this precise point. ·And I make that observations simply to suggest,as my learned friend opposite did, that Your Honour might wish to take the matter under advisement. Possibly as a method of proceeding, when anybody who wishes to submit points to Your Honour has been heard 1we might adjourn discussion on this bill and then go on with the media tax bill and then come back.

In other words 1 the Chair may need some time to look at this. Mr. Chairman, I think the points made by the hon. gentleman opposite, the learned member for St. John's East (Mr. Marshall) 1 are just completely irrelevant. First of all, Sir, let me deal with the question of amendments in committee. There is no doubt amendments can be made in committee. Beauchesne is filled with them. Your Honour may simply want to look at - and I refer to the Fifth Edition of Beauchesne, page 233, there is a large

section headed The Admissibility of Amendments in Committee, and it sets forth - I will not read them- but it set forth a considerable number of principles which shou~d be dete=ined 1 these have been deduced from the rulings made by various speakers over the years, a considerable number of the principles which should be used in determining whether an amendment is in order. Now, Sir, more importantly my learned friend opposite completely misunderstands what the committee are doing. There is no bill before this committee at present. The matter before this committee, Mr . Chairman, is a resolution which has been moved by the Minister of Finance (Dr.Collins) 6 It does not require 2293

August 171 1979 Tape No. 908 AH-3 MR. :ROBERTS: a ~essage from the governor, it has not got one. It is simply a. motion .moved by a lllinister of the Crmm to impose a. tax. The motion is that it is expedient to bring in a. measure to iiDiend me Insurance COlllpanies· Tax Act. My friend from Burgeo - Bayd' Espoir (Mr. Simmons) has proposed, seconded by my friend from.

LaPoile (Mr.Nea.ry) - although, as Your Honour knows,motions made in committee do not require seeonders, has proposed a motion which in its wording, I suggest, would be to replace the motion before the Chair with the fo.llowing words, "That it is e;xpedient to refer to a select cOlmlli ttee the question of whether there should be introduced a measure to amend the Insurance C1)mpanies Tax Act. " My friend did not have an opportunity to read out the wording of lds motion but th.at is how I understand his motion to be. Sir, I would submit that is a proper amendment. There is a motion before the Chair.

The motion is that it is e;xpedient to brin9 in a measure to amend the Insurance Companies 'l'ax Act. The amendment 2294

August 17, 1979 Tape No. 909 NM- 1 MR. ROBERTS' proposed by my friend from Burgee- Bay d'Espoir (Mr. Simmons) simply has the effect of proposing an alternative to the committee. That, Sir, is entirely in order. That is the basic principle upon which amendment~ as Your Honour knows, are founded. An amendment may not be proposed if it simply negatives the motion. This does not negative the motion, it puts before the Committee an alternate suggestion. So I would say simply in summation, first of all,is it is perfectly in order to move amendments in Committee.

There are millions of precedents, literal~y,I would wager. There are certainly hundreds in this case to move amendments in Committee of the Whole. Secondly 1 what is before the Committee is not a bill. If the motion is adopted 1 then a bill will be brought in,but no bill can be brought in until and unless the motion is adopted, Sir. That is the very fundamental basis of our finance procedure here and at Ottawa and at Westminister as I understand it. What is before the Committee is a motion, What is proposed by my friend from Burgee-Bay d'Espoir is a motion to amend _that motion.

The amendment is perfectly in order. It is consistent with all of the principles which govern the admissability of evidence and accordingly I would say that my friend is in order in moving it, I think the amendment should be accepted, debated at whatever length is allowed and desired and then put to a vote, Sir. MR. CHAIRMAN (Bai;rd) ' I thank the hon. gentleman for your advice on this matter. DR. COLLINS' Mr. Chairman, may I speak to it. MR. CHAIRMAN' I have heard enough evidence right now. SOME HON. MEMBERS: Hear, hear! MR. CHAIRMAN: I would like to thank the han. members for their advice on the matter.

I will rise the Committee for a few minutes to consider the matter before making a ruling. MR. ROBERTS: Well, I wonder instead of rising the Committee,would it be possible to proceed on a debate on another matter? 2295

August 17, 1979 Tape No. 909 NM - 2 MR. MARSHALL: The purpose of rising on the point of order,'Mr. Chairman, is this,that I do not want to - MR. ROBERTS: Somebody else can take a turn. MR. MARSHALL: I do not wish to have a matter to be created a precedent if it is incorrect and I feel that it is a matter that is going to require a little bit of research before it can be determined.

Now in the interest of this, without with- drawing the point of order, in the interest of procedure, perhaps we could deal with the amendment and vote on it, after as much debate as we want to and as is necessary, and then we can allow it to be taken under advisement by the Chair so that at some time in the future a ruling can come in on it so that we will not be creating a precedent, rather than delay the Committee now. MR.

ROBERTS: Fine, we will proceed. sort of by leave with this amendment;it will be disposed of whatever its fate may be• I can imagine looking at the stoney faces opposite what its fate would be. MR. MARSHALL: I do not think it will carry. MR. ROBERTS: Well 1 I would hope it will but I suspect it will not, and that at some point the sreaker and his officials ~ill - I agree it is a precedent. I am not aware of anything along these lines. MR. MARSHALL: I am not aware of it either. MR. ROBERTS: I think we should not move lightly with precedents. All right,let us go ahead on that if that is okay.

Do you want to take a slice or two aut of it? MR. CHAIRMAN (Baird): Is it agreed? Agreed. MR. ROBERTS: I have the warding of that. MR. MORGAN: Mr. Chairman. MR. CHAIRMAN: I will read the amendment first, han. members. "That it is expedient to refer to a Select Committee the question of whether there should be introduced a measure to amendment The Insurance Companies Tax Act." 2296

August 17, 1979, Tape 909, Page 3 -- NM MR. NEARY: MR. CHAI.RMAN(Baird): MR. NEARY: MR. MORGAN: forth. MR. F .B .ROWE: You were not up. MR.. NEARY: MR. CHAIRMAN: MR. MORGAN: MR. CHAIRMAN: mal, den speech. 1\N HON. MEMBER: MR. NEARY: MR. MORGAN: MR. NEARY: Mr. Chairman. The han. the member for LaPoile. Thank you, Mr. Chairman. I thought we were supposed to go back and You were not standing. You were not up. I believe all han. members - The han. the member for LaPoile . It was unfair yesterday. The hon. gentleman is not making his What is the big deal? And the hon. gentleman is not - It was unfair yesterday.

The hon. gentleman wants to get up now because the hon. gentleman one time was an underwriter, now he is a self - MR. MORGAN: MR. CHAIRMAN: MR. ·NEARY: You would speak (inaudible) . Order, please! He is a self-styled e~ert now on tax law. The hon. gentleman was an e.Kpert on the economy the day before yesterday. Now he has suddenly become an instant and self-styled premium insurance tax expert. The hon. gentleman wants to get up now because he was an underwriter at one time and show the underwriters who are sitting in the gallery that he can explain to them, he can apologize to them an behalf of the government.

He is going to apologize. MR. MORGAN: MR. CHAIRMAN: MR. MORGAli: Mr. Chairman, an a point of order. The hon. the Minister of Lands and Forests. Mr. Chairman, my only complaint that r made earlier and the point I am making now is the fact that I was of the understanding that in debates in the House so far, that when one side speaks, one member speaks, and then on the other side the member from that side speaks. All I am saying is that I asked the han. gentleman 2297

August 17, 1979 Tape NO. 909 NH - 4 MR. ~tORGAt'l: to yield because the last speaker was from his side. I do not want him to give me some indication of what I am going to say. I know what I am going to say. But the fact is 1 I think to be fair 1 one speaker from each side in the debate. That is all I saying. MR. SD1MONS: To the point of order, Mr. Chairman. Mll. CHAIRMAN (Baird): Tllere is no point of order • The member for LaPoile (Mr. Near~{), please. SOME I:!ON. MEMBERS : Hear, hear! HR. NEARY: Mr.

Speaker, we know what the hon. gentleman is going to say, The han. gentleman is going to try to apologize, going to try to apologize to the insurance industry and to the under­ writers in this Province of why the Premier and the Administration, of which he is a member, have broken their word to the 2298

August 17, 1979 Tape No. 910 so - l l1R. S. NEARY: people of this Province. Well 1 there is no way that t.'le hon. gentleman can do fancy figure skating to weasel his way out of this one. If he does not agree with the tax 1 thcn the hon. gentleman NR. E. ROBERTS: !1R. S. NEARY: Can leave the Cabinet. - can leave the Cabinet, he can resign. Obviously, the hon. gentleman agrees with the principle of this tax and the other taxes that we have before us. \'lhy does the hon. gentleman want to waste the time of the House? We know where the hon. gentleman stands on this tax.

He has not resigned from the Cabinet so therefore we can only assume that the hon. gentleman -not only assume but we know, the hon. gentleman is going along with the government, with his colleagues. So why waste the time of the House< l'!R. E. ROBERTS: Hear, hear. MR. s. NEARY: Why waste the time getting up and apologizing for it? The fact of the matter is, Mr. Chairman, as my bon. colleague indicated during his few remarks, the fact of the matter is that the government, the born-again government,have double-crossed the people of this Province.

They have double-crossed the consumers in this Province and they have done it in one of the most cowardly ways that I have ever seen in this House. MR. E. ROBERTS: MR. S • NE.i; ... 'U' : Striking at widows and orphans. The minister is telling us , the minister has the face, the l1inister of Finance (Dr. J. Collins~ I am talking about, has the face and the gall to stand over there and tell us that this is not a tax on the consumer. He says, it is a tax,

an act to amend the insurance companies tax act. Well, the hon. gentleman is very familiar with babies anc.. if I were the hon.gentleman I would continue to deal with babies rather than with the financial matters of this Province. DR. J. COLLINS: I will illustrate it with comic books if you give me a chance to talk. MR. R. SI11MONS: 'Stevie', he got finance the same 2299

August 17, 1979 l1R.. R. SIMHONS: SOME HON. MEMBERS : 1-iR. S. NEARY : l'IR. CHAIR..'IAN: (Baird) MR, S. NEARY: smack this one on the bottom. SOME liON, MEMBERS: MR. S , NEARY : Tape No. 910 SD - 2 way he holds the babies- ass u~. Oh, oh! That is right. Order, please! The only thing is, he forgot to Oh, oh! But, Mr.

Chairman, the hen. gentleman had the face, Sir, to stand in this House, before members and before strangers in the gallery, and tell us that this was not d tax on the consumer, this was a tax on the insurance companies - ~fter the insurance companies telling the hon. gentleman in a letter ~~at I have here on my desk, a1'd the underwriters telling the hen, gentleman that this tax will be passed onto the consumers, will be passed on the the policy holders. DR. J, COLLINS: (Inaudible) HR. S. NEARY : No, Xr.

Chairman, the hen. gentleman in a letter to the Board of Trade in connection with another tax, the advertising tax, the hen. gentlman .. threatened the Board of Trade, in one of his paragraphs - AN liON. ME!1BER: That is right. 1-lR. s. NEARY: - and I have that letter here in front of me too. AN HON. MEMBER: That is right. MR. s. NEARY: But the hon. gentleman, the other day, seemed to resent the fact, he resented the fact that there was a lobby going on in connection with this tax. AN HON, l1Elo!BER: He should be in washington or in Ottawa. MR.

S • NEARY : Yes, the hon. gentleman should be i~ 1'/ashington or in Ottawa, but the hon. gentleman was a little bit resentful the other day in his introductory remarks that there was a bit of a lobby going on -and rightly so. 2300

August 17, 1979 TaJ?e No. 910 SD - 3 DR. J . COLLINS : Not a bit of a lobby, massi v e lobby . HR . S . NEAlU' : Oh, a massJ.ve lobby now. I tilought: the other day when the han. gentleman referred to it that he said, 0 Well, there is a little bit of publicity about this, a little bit of a, stir." He did not seem to be very concerned it, Now it is massive. DR. J. C,OLLINS (Inaudible) is a massive lcbby. You had better recognize that no~. MR. S. NEARY: I see. oh, I see.The hen. gentleman is now recognizing that.

The fact of the matter is, Sir, as I started to say a few moments ago, that the administrat.ion not only broke a promise that they made during the June 18th election campaign but they have double-crossed the people and the consumers of this Province. And what a let-down. This is a tax on the consumers in this Province, Sir. It is a tax on the policy holders in this Province and. it will be passed on.And the hon. gentleman knows that and the hen. gentleman can use weasel words all he wants and he can be as slippery with ~"lis words as he wants, '::his tax will be passed on to the - AN HON.

MEMBER: lieasel words (Inaudible) MR. S • NEARY: - the tax will be passed on to the consumer. And the government will have 2301.

August 17, 1979 Tape 911 EC - l MR. NEARY: broken a promise they made during ~~e election and that is that there would be no increase in taxes. I might say, oy erie way, ~~at I am coid cnac the ii per cent sale~ ta~ 4~ paid by the consumer on all insurance except life insurance -life, accident and sickness. So what we are talking about here is the 3 per cent. We are talking here about 2 per cent being increased to 3 per cent.

The hon. gentleman again the other day gave us a lesson in the new math when I am sure the hon. the Minister of Education (Ms Verge), the hon. gentleman's colleague, must have cringed in her seat. The hon. gentleman said it is a l per cent increase, not SO per cent. And then the hon. the Leader of the Opposition told me a story that I got a great chuckle out of, that I have to repeat, about the fellow who was putting horse meat and rabbit meat, I think it was, in tins. So he put in so much horse zreat and so much rabbit.

And somebody said to him, 'Well, that is not even, the proportion is not even.' 'Well,' he said, 'it is; it is 50 per cent- 50/50- one horse, one rabbit.' SOME HON. MEMBERS: Oh, oh! MR. NEARY: I am also told that automobile insurance is regulated by the Public Utilities Board in Newfoundland. The 2 per cent was accepted by the Public Utilities Board as part of the cost of the premium and,presumably, the 3 per cent will be accepted and included in the automobile insurance premium. Is that correct? I am told that. I do not know if it is true or not.

But anyway, let me get on with my few remarks, The time is getting late. What are the arguments against this tax? Number one, it creates and imposes a hardship on the consumer, on the policy­ holders. Whether the hon. gentleman gets up in his hypocritical way and tells us that it does or it does not, we can tell the han. gentleman now that there is hard evidence before us that it will be passed on to the policyholder~ Now how do you get at the old policyholder~, the people who already have policies? Well, how you get at them~ You take it out of their dividend.

If they have a dividend, that is where the money will be recovered from. And, of course, the 3 per cent will be added on to the newpolicyholders. 2302

August 17, 1979 Tape 911 EC - 2 MR. NEARY: AS my hon. friend from Burgee - Bay d'Espoir (Mr. Simmons) indicated, if you .l?ay a premiUIII to a trust COI:~Pa.-:.y yo;;. do not· have !:.e J?!:!":l the 3 per csnt tax; · if you receive your income from ;fees from MCE' you do not have to pay the tax, if you receive fees practicing law downtown you do not have to pay the tax, but if you are a policyholder you have to pay a 3 per cent sales tax in this Province. They have it disguised. It is under the guise of an insurance company tax when, in actual fact, it is a tax on the policyholders. so, Mr.

Chairman, numbe.r one, the government broke their promise, double-crossed the people; number two, the policyholders will have to pay this tax whether it is in a reduction in dividend or pay it ori. to the premium on new policies. The insurance companies point out that this is a very unfair tax. As I indicated, it do.as not apply to trust companies or banks. Bec;:ause most people, Mr. Chairman, buy insurance ;for savings pu:cposes 7 they buy it because it is the only way they can save dollars.

And I can speak from experience in that regard, I have a policy myself and I have borrowed on that policy on two or three occasions. I am in the process of borrowing on it again now. So my policy is used 1110re or less for savings - it is the only way I can save a dollar. But now, Mr. Chairman, I will be able to borrow less because the dividend -will be reduced. In my case, I think, they will probably whip $12 c;~r $15 a year out of the dividend to pay the 3 per cent tax. And if I took out a new policy, of course, I wot.U.d pay it then. So there is a very unfair part of it. 2303

August 17, 1979 Tape 912 EC - l HR. NEARY: And, Mr. Chairman, my hon. friend also raised the point, although he did not stress it too much, about t.'le cost to t.lle insurance r.omp;;mies. Now I am not terribly -concerned about the cost to the insurance companies if the insurance companies were paying the cost of implementing this tax. If the insurance companies were paying the cost out of their own pockets for the new manuals and for the new forms that have to be made out, I would not worry too much about that.

I would not lose any sleep over the fact that the insurance companies had to pay II"Clre money for new manuals and new forms and so forth , I would not worry about it except, Sir, that that also will be passed on to the consumer. So you are talking here about more than just a 50 per cent increase in the tax to the consumer, you are talking about the cost in this Province, which I understand is staggering; it would boggle your imagination the amount of money, And the hen. gentleman brushed that off the other day. Well., it happened in Ontario. Ac'._ HON . MEMBER: No. MR. NEARY: It did happen in Ontario.

I have checked with the insurance industry and I have checked with the underwriters, and I am told, Mr. Chairman, that this was one of the factors that influenced the Government of Ontario to wi t."ldraw a proposed increase of 1 per cent in the tax in t.~at province on insurance premiums. 'It may be noted,' it says, if hen. gentlemen have the same letter that I have - Minister of Finance, Newfoundland, July 23rd from the Canadian Life Insurance Association- 'It may be noted that when Ontario instituted a partial tax it experienced some difficulty in formulating satisfactory regulations and forms.

The company also had difficul. ties in making necessary calculations • Ontario recognized in 1976 when it imposed a 3 per cent premium tax only on existing policies where the premiums could be increased and the insurance portion of new policies using the formula which would substantially reduce the amount of the tax payable, ' - MR. MARSHALL: What is the hon. member reading from (inaudible). MR. NEl'.RY: The Canadian Life Insurance Association. AN HON. MEMBER: (Inaudible) . MR. NEARY: That is right.

Au.91J,St 17, 1979 Tape 912 EC - 2 MR. NEARY: So the insurance companies are telling the public that,first of all, the cost involved in making new manuals and new foms for- Newfoundland .will be· passed:. on_ to •the consUII1er in addi ticm to the 50 per cent increase in the insurance tax. DR. COLLINS: MR. NEARY: it? I>-..,'1 HON. 1-IE~.BER: MR. NEARY: Do you believe it? The hon. gentleman asks, Do I believe We have no reason to doubt - I have no reason to doubt that it will not. Mr.

Chairman, I have very good reason to believe the insurance companie.s as muc..'l. as I believe the hon. gentleman when t.\1e hon. gentleman the other day could not differentiate between 1 per cent and 50 per cent. I mean, if that is the kind of thinking we have, the kind of logic we have in this Committee and in this Province, then I would be inclined to believe the inSurance companies. DR. COLLINS: speak to that. MR.

NEARY: (Inaudible) I will The hon. gentleman can speak to it all he wants, but we have been told by the insurance industry - and the insurance industry buys government bonds, probably buys more Newfoundland Goverllll\ent bonds than any other industry, as the hon. gentleman is well aware , and they are very responsible people. And I would assume they know what they are talking about when they tell us it is going to cost $200,000 or more to change the manuals and to make ou.t new foms for Newfoundland with the increase of 50 per cent in the premium tax. That additional cost will be passed on to the consumer.

And, Mr. Chairi!lall, apart from the fact that we are trying to attract industry, new business in this 2305

August 17, 1979 Tape No. 913 MR. NEARY: Province, what will it do, Sir, to insurance companies who might be considering establishing their head office in Newfoundland? There are a lot of them. I am happy to say, Mr. Chairman, I am happy to say that a Newfoundland company,for the first time, is establishing branches of their insurance company in other provinces of Canada. >ie do not know but some of the insurance companies may be looking NM - 1 at Newfoundland to establish a head office. Thev may. We do not know that. This certainly •~auld not encourage them to do so. It would drive tnem away if anything. DR.

COLLINS: Newfoundland companies are really just insurance company agents. MR. NEARY: That is right. That is right. But if we are ever going to entice some of these companies to establish a head office - MR. ROBERTS: That is an incorrect statement. MR. NEARY: If we are going to entice any of these companies to establish a head office- MR. STIRLING: Would you yield? MR. NEARY: Yes 1 I will yield if the hen. gentleman wants to ask a question, Mr. Chairman. MR. STIRLING: MR. CHAIRMAN (Baird): MR.

STIRLING: Just to have the record correct, I think - The hen. member for Bonavista North. - the Minister of Finance if he is being specifically correct should say life insurance comp~ies because - MR. ROBERTS: Casualty and fire insurance. MR. STIRLING: - I do not wish to cause him any embarrassment but I would suggest that he should withdraw that remark until he can check out his facts, unless he wants to be specific about life insurance,and I think he should have the opportunity to say he should check it. DR. COLLINS: I was referring to life insurance companies. MR. NEARY: Anyway, Mr.

Chairman, that is a very significant point and one that L~e administration should take into account because down in the United States I am told that some of the companies that were 2306

August 17, 1979 Tape No. 913 NM - 2 MR. NEARY: thinking about moving ~~eir head offices stied away from States, stied away from States that had a similar as the one the hon. gentleman is imposing here now in this Prov~nce. I know the bon. gentleman has been sold a bill of sale by his Assistant Deputy, Mr. Fearn. MR. ROBERTS: He is too stubborn, MR. NEARY: And he is too stubborn, he knows he is wrong. The hon. gentleman knows he is wrong.

There is nothing more stubDorn, Sir, than a medical man put into a portfolio, put into a position of trust, especially in a Finance Department where the hon. gentleman has a one track mind, and that is holding little babies bottom up by the feet and giving them a smack on the bottom. There is noU1ing more stubborn than that kind of a gentleman in a government, nothing more stubborn because the hon. gentleman has a one track mind and will have a tendency to listen to his deputies and his assistants more so than a man who is completely free and independent.

And in this case the hon. gentleman is taking his advice from a deputy or an assitant deputy from Western Canada, who is a part of a little clique across Canada, part of a little clique that has been trying to - MR. YOUNG: Who is blackening whom now? MR. NEARY: Mr. Chairman, I would just like to be heard in silence, Sir. When I get in full flight I do not like to be interrupted. The hon. gentleman can go and look after his slabs. MR. MORGAN: My~ My~ My~ My~ MR. NEARY: Yes, and I will be flying high for the next five years and the next fifty years. Yes.

The han. gentleman, Sir, is smarting now, He is sulking now because he cannot get up and try to twist and turn on behalf of the administration, to try to influence and impress the gentlemen in the gallery that, oh, although I am a member of this administration I am protecting the rights of the poor people, the ordinary people, but Ulis tax we have to go ahead with it. Because we need the money, we have to take it out of the backs of the consumers. It 2307

August 17, 1979 Tape No. 913 NM - 3 MR. NEARY: is not going to hurt your business. It is not going to hUrt you at all. I sold. insurance." I can hear the hon. gentlellian now, "I sold insurance and I know what I am talking about." Do not be wasting the liouse!s time. MR. MORGAN: Who is wasting tilDe now? MR. NEARY: That is right. I have wasted time. I just spoiled the hon. gentleman's speech.

Because when the hon. gentleman stands with not a hair out of place, looks like he stepped right out of the catalogue, I hope that the underwrites in the gallery will understand. that what he is trying to do is run a bluff ·with him, that if he did not - if he disagreed with the tax the thing for him to do is get out, get out of the government, because the government have broken their promise. They have broken their promise, Sir, and they pulled a fast one. They continued their con game with the people of this Province and with the consumers of this Province. Mr.

Chairman, the insurance business in this Province is propsering at the present time. People are becoming insurance conscious for the first time in their lives. They are beginning to do the same thing that I did; they are beginning to realize that apart from protecting their families and so forth in case of accident or deati1, that it is a good way to save a dollar, it is a good investlllent, a good way to save a dollar. But now they are going to have that little 2308

August 17, 1979 Tape No. 914 SD - l HR. S • NEARX: incentive and that little initiative removed by this government who told these people that they would not increase taxes if tney formed the government of this Province. so, Nr. Chairman, I am inclined to go along with the motion made by my hen. friend. I think there are various and sundry aspects of this tax that have to be looked at very carefully. And I congratulate, I do not condemn, the insurance underwriters for carrying on a lobby, It could affect their livelihood, tt could force business to go outside of this Province, it could affect their livelihood.

And let us say that the minister is right that they have selfish motives: I say, so what? It could affect their livelihoocl, it could cut down on the business in this Province, it could drive the business outside of this Province. DR. J. COLLINS: Where was t.'le lobby when the premium tax was put on? MR. s. NEARY: Where was the lobby when the premilllll tax was put on? Mr. Chairman, I do not know what the hon. gentleman means by that question. It is an Unfair tax. It was unfair t.'len, it is unfair now. The tax should never have been put on. MR. J. MORGANs Who put it on? l-1R. S. NEARY: ~IR. J. OORGAN: again. MR.

S. NEARY: aga·in. SOME liON. ME~IBEFS : MR. 5 • NEARY: The han. gentleman 1 s administration. Think again, boy, think again. Think Oh, think again, think again, think oh: oh: Oh, listen to Goldilocks. You are llPt going to get your interview on television today. .la. J. :·!ORGAN: l-1R. 5 • NEARX : television coday. 11R. J. 110RG!\N : The hen. gentl-eman put the tax on in 1 68 • You are getting no interview on On Private Members' Day, (I.caudible) 2309

August 17, 1979 Tape No. 14 SD - 2 MR. S. NEARY: You are going to get no quotes in the newspaper today. The hon. gentleman is rurudng out of time, The House is running out of time. The hen. gentleman better discipline the member for Bond. vista South (Hr. J. Horgan) • He is not going to Llake the television today. He is not going to get up and be able to rant and rave about the former administration when we, over here, and tile ,;;>ublic are not allowed to talk about his administration because they are born again. t1r. Chairman, the fact of the matter is, Sir, ~~at ~~ere is a 50 per cent increase in this tax.

It is very unfair. It is going to hit the consumer and it just proves once again, as my hon. colleague said when he wour~ up his few remarks there half an hour or so ago, that it proves again that this administration have double~crossed the people of this Province, have let down the people of this Province and have broken a promise to the people of this Province that if they were elected, the:t were not going to increase taxes in this Province. AN HON. MEI•ffiER: Carried. l•1R. CHAIR.'iAN: (Baird) The hon. Minister of Lands and Forests. HR. J.

MORGAN: t1r, Chairman, I think it is important to clarify a few points because the issue of taxing the insurance companies in the Province has been totally confused by ~'le last two speakers. The member for Burgee · - Bay d' Espoir (Mr. R. Simmons) pointed out that there was an insurance tax on premiums in the Province and it was a burden. and the last speaker confirmed there was not a tax on premiums on life insurance. The situation is that in 1968 the previous adzninistration brought in a tax known as the Premiums Insurance Tax A.::t. Tha'c legislation tax taxed premiums on insurance.

That taxation is not applied today to premiums on life insurance. ~ 231.0

August 17, 1979 Tape No. 914 so - 3 !·1R. J . /·!ORG;..,'I: So the hon. gentleman who just sat down is bitterly opposed to us getting any source o~ means of revenue, in this caae a revenue of approximately $.75 million and MR. E. ROBER:l'S : question1 SOME HON. ~1EMBERS: :.m. J. ooRGAN: go ahead. MR. E. ROBER:l'S: Would the hon. member answer a No. If it is a reasonable question, yes, Yes, it is a reasonable question. I do not always get reasonable answers. Did the hon. gentlenan say that the tax as it now, the 2 per cent level is not now ii!Iposed on life insurance?

If ne said that he could not have meant it because the tax is on l.ife insurance premiums up to 2 per cent now. This act simply would increase it from two to three. I think, we should be clear on what we are arguing back and forth. MR. J. MORGAN: Well, Mr. Chairman, what I said was that the Insurance Premiums Taxation Act which was passed in 1968 applied a tax to in6urance premiums which does not apply to life insurance premiums. That tax is now ll per cent.

It;. was brought in in 1968 by the previous administration, the previous, previous administration in this case,and it was 7 per cent then in 1968 when it was brought in by the government which the member who just sat down was part of; he was in the cabinet, he made the decision and now he is totally opposed to a sourae of revenue which he initially brought in, 23U

August 17, 1979 Tape No. 915 NM- 1 MR. MORGAN: that source of revenue from taxation directly on the prellli.Ullls of insurance except , life insurance. I think there are one or two other exceptions as well, but life insurance is definitely not included to be taxed in that Insurance Premium Taxation Act. So that is one clarification with the statement made yesterday by the member for Burgee-Bay d'Espoir (Mr.

Simmons) that this would increase the taxation on life insurance premiums with the increase now from 2 per cent to 3 per cent, meant 14 per cent on life insurance oremiums is totally erroneous and incorrect, totall y erroneous and incorrect. Now we are increasing in this taxation bill, we are increasing that 2 per cent on life insurance companies, not necessarily premiums but of course the companies are saying we are going to pass it on to the consumers, in this case the insured, on their premiUIII5. So we are seeing a fifty per cent increase, that is true, but it is one per cent, going from 2 to 3.

It is an increase of SO per cent. That is agreed. Sure. Nobody is going to disagree with that. That is only semantics. But what I am saying, Mr. Chairman, is that if I am now paying a premium, and in fact I do firmly believe in life insurance and I do carry some heavy life insurance right now, and if I pay $1,000 premium per year life insurance, in fact I think my life insurance is around $1,000 permium per year. MR. J. CARTER: You would be better off dead. SOME HON. MEMBERS: Hear , hear~ MR. MORGAN: My wife would be better off if I were dead. Mr.

Chairman, I agree with my colleague, my beneficiary would be better off if I were dead. MR. ROBERTS: MR. MORGAN: The whole Province would be better off. You see, Mr. Chairman, this is the kind of thing - I am not being partisan in this debate, Now why these smart 2312

August 17, 1979 Tape No. 915 NM - 2 MR. MORGAN: type remarks? If we are going to have some decorum in the House let us be reasonable. MR. ROBERTS: gentlemen - MR. MORGAN: I am being partisan. Perhaps these han. So, Mr. Chairman, the fact is that we are increasing this taxation which is now already there of 2 per cent, going from 2 per cent to 3 per cent. Now I have listened to the arguments put forward by the Opposition of the possible effect on the consumer, the insured.

Now if I am paying $1,000 on premiums and I am. goi!J.g to get an increase of 1 per cc••t this year on that premium, it means I am going to be paying $10 more per year next year on my premium. Now surely if I can afford to pay $1,000 I can afford to pay $10 more. There is no burden on the consumer in that regard. The other possibility of a burden is the fact of the cost of changing the rate books.

Now that is the concern of the insurance companies here and I have talked to some of them and their reps, the fact that they had to change the rate books, that there were going to be substantial cost on the companies and that cost would be very well passed on to their clients, the consumers. But if I recall correctly 1 and the Minister of Finance can, when he speaks to close the debate, can verify it, when the change was made in Ontario the insurance companies did not change their rate books for a two year period, a full two year period. They did not find it necessary to change their rate books.

So therefore if they could do it in Ontario for a two year period 1 surely they can do it here in this Province. Scthat cost is not necessarily going to be incurred and therefore passed on to the consumers. So I cannot see any major burden being placed on the consumers of our Province. But I do see the need for us to get revenue and we are looking at a means of getting revenue from insurance companies whom right now we have little or no means of getting revenue from. It is like a corporation tax. We have no corporation tax on these large companies, and yesterday Mr. Mac Pike, speaking for the life insurance 2313

August 17, 1979 Tape No. 915 MR. MORGAN: companies in the Atlantic region, confirmed my belief that these companies can very well afford to be taxed, For example 1 Mr. Mac Pike yesterday in this city of St. John's, speaking to the Northwest Rotary Club, says that, "The life insurance industry has invested $2.5 billion in the four East Coast provinces by the end of 1976 1 " $2.5 billion strictly by life insurance companies. Invest in what? Capital assets, shopping malls, office buildings, apartment buildings. If I recall correctly they are even involved the development of some power projects in our Province.

AN HON. MEMBER: The Upper Churchill, MR. MORGAN: The Upper Churchill, ~y colleague reminds me here. So these are the kind of things that concern me. If these companies can afford to invest billions of dollars in four provinces in our Nation, the poorer provinces of our Nation, and if they can get - surely they are going to make profits on all the billions of dollars of investme~ts. Now surely we as government in some kind of responsibility should look at getting some means of revenue from all these profits these companies are going to make. SOME HON. MEMBERS : Hear, hear! MR.

MORGAN: But my concern initially in listening to the underwriters was what effect it would have on them. Now the hon. gentleman who sat down said I would do this and he read my mind. because I was in the business and I know that it is a very competitive business and most of the people in the business today, in fact the people I know, are doing an excellent job. It is an excellent profession in my view. Now my concern initially was what effect would it have on the agents who are doing the business, going out there and drawing the business out from the general consumers around the Province.

And from my brief discussions with a few of ~~em I do not think it is having any effect on the agents. Because surely, surely if a person is going to buy life insurance and if his premium 2314 NM - 3

August 17, 1979 Tape No. 915 MR. MORGAN: is $100 and this 1 per cent means an additional $1.00, tnat $1.00 is not going to stop the individual from buying the insurance. If his insurance pr~mium is $500, an additional $5.00 is not going to stop the individual from buying insurance if he or she believes in insurance. So, Mr. Chairman, I think it is important to clarify these points because there was some confusion from the Opposition. The fact is that the Insurance Premium Tax was NM - 4 placed on in '68, It increased according to the SSA, increased over the last number of years, It is almost like an SSA tax.

It was placed on by the previous government in '68, the previous, previous government. There is not a 14 per cent increase in life insurance premiums. The han. gentleman was wrong yesterday because the Insurance Premium Tax is not applied to life insurance and therefore there is only a 3 per cent tax on insurance companies and I would say, Mr.

Chairman, in closing my few remarks, I sincerely hope that insurance companies if they invests $2.5 billion in a period of four to five years in a part of our country and look forward to substantial profits from these investments, that they will not and should not pass on this 1 per cent increase to their customers or to the consumers. SOME HON. MEMBERS: Hear, hear! MR. CHAIRMAN (Eaird): The han. Minister of Finance. DR. J. COLLINS: Mr. Chairman, just a very few brief remarks on this because I think that most of the points have been made that need to be made. But I would like first off, Mr.

Chairman, to table 2315

August 17, 1979 Tape 916 EC - 1 DR. COLLINS: some points to give our side, and I think a clarifying side,to the issue. The press has been full of what I have no hesitation in saying is a very, very strong insur~1ce iob~y, it has been full of coltU!lents from them, and I do not take away from their right to do so, but I think the other side of the picture should be given so I table this and there will be copies available for han. members for their information and also for the press. Mr.

Chairman, with regard to the coltU!lent that insurance companies are already subject to capital tax, I have already answered that. In effect, there is negligible return from the insurance companies on capital tax. That is why the insurance companies tax was put in in the first place. It was put in by the federal government and it was finally passed to the provinces at that same rate. That was just after the Second World War. The rate has not changed since then when almost all other forms of equivalent tax have changed. As far as the SO per cent goes, I will not go into that, it is too ridiculous, really.

The point about it is that the dividends are paid out of retained profits and up to no"'• the companies are retaining 98 per cent - there is only 2 per cent taken off - t."l.ey are retaining 98 per cent, out of which they pay dividends. They will now retain 97 per cent, out of which they will repay dividends. That is a very small decrease. It is not a SO per cent decrease in their retained profits. It is less than a 1 per cent decrease in their retained profits, out of whicn they pay dividends. That is a most foolish argument. 1-'..r.

Chairman, as far as the administrative costs go, it ia stated that there will be $11 million levied on ~~e people in this Province taking out insurance. Well, I mean, that argument cannot stand up to scrutiny. As was mentioned, it was in for a couple of years in Ontario. There was no such extra increase in rate books. Secondly, t."l.e rate books are subject to change quite frequently because of actuarial changes. This is not something unusual for insurance companies; they have to do it all the time.

Thirdly, if they are going to be levied some~~ing like $7SO ,000 in this Province - which they are not, ard I will explain that 231.6

August 17, 1979 Tape 916 EC - 2 ::>R. COLLINS: in a minute - if they are going to be levied that amount, are they going to spend ~12 million to compensate for it? If t.'ley are, t:hey are not the businessmen t'lat I wo.uld expect them to be. Finally, Mr. Chairman, on that point, just for a point of information, for the six months ending the end of June of this year, Mutual Life, t'lat is one company only, gross income profits for six months - $78 million. These are not poor companies, and that is one single company.

Another point, during the AIB period, the insurance companies were the principal offenders with regard to excess profits. In other words, Mr. Chai~an, if this very modest increase in • what amounts to corporate income tax is levied on the companies, not only is it deductible to them as an expense, but they have a very wide profit margin in which to absorb it, and I have no doubt they will, because they absorbed it in Ontario where there was a much greater volume of business and,therefore, much greater potential cost to them. I might also add, Mr.

Chairman, that the insurance business in this Province is 2 per cent of the whole. Canadian companies had much more than 2 per cent of the whole in the United States. Changes in the exchange rates are more costly on that volume of business, which occur daily, than there could be any possible cost to the companies in this Province. I mean, these arguments just do not hold up. They are arguments made by the lobby. They do not want this tax and I do not blame them. But they are just arguments, There is no validity. Mr.

Chairman, again, to equate the tax that we are now applying to the company with retail sales tax, that is to equate corporate income tax to retail sales tax. To take that line of argument is to say that we should only have one form of tax; we should only have what is looked upon as a regressive type of tax, that is, the retail sales tax and we should have no other form of tax. That is ridiculous. No administration wit.'l any responsibility would take that line of thought. I mentioned, Mr. Chairman, t~at there was no lobby when the premium tax was put on by the former Liberal 231?

August l-7, 1979 Tape 916 EC - 3 DR. COLLINS: administration in 1968. There was no great outc::ry from the insurance companies when that premium tax was put:. on, whlch bora ext:rellla!:;r iliOZ"e :merous1y 0:1 tr.e ,~;olicy t=..~r. If the industry \>·ere that concerned about the poor policy buyer, why were there not great representations made at that stage? Why were there not great representations made when the rate was increased from 7 per cent to 10 per cent and then later on up to 11 per cent? But there was no 2318

August 17, 1979, Tape 917, Page 1 -- apb DR. COLLINS: comment at all from them. Finally, Mr • Chainnan' there have been remarks about how we are taxing poor widows and we are taxing savings. Quite apart from the fact that it is a very poor way of saving - life insurance - that is going back to - AN liON. MEMBER: (Inaudible) • DR. COLLINS: Well, I know the hon. the Leader of the Opposition, if he wants to save,he does not buy life insurance. I am sure he has better ways of achieving savings than that. If not, I will come over and I will tell him a few things. AN HON. MEMBER: fitters. OR. COLLINS: you go, 'boy'.

I think his (inaudible} were pipe- Well, you need it if that is the way Finally, the argument is not against taxing widows and savings. That is the principle of this tax. The principle of this tax was settled many years ago. we are not arguing here the principle of this tax, we are arguing merely the increase of it. If you want to go back to arguing the principle of this tax,you have to go back to the federal government's decision to put it on in the first place during the Second World War.

The final point I want to make on the rate book increase, and this is the last thing I just want to point out on this, and I saved it until last because I almost hesitate to make the argument; the insurance companies say, "You cannot increase this tax because we will have to change our books it complicates matters so much." But, on the other hand, they make no hesitation to saying, "What you should do, you should remove the tax totally." Now, if you change from two to zero that is going to cause them just as much administrative difficulty as it is to change from two to three,but they make no complaint about doing that.

If we said to them- and they have asked us to do this -we will remove the tax entirely, they would raise 2319

August 17, 1979, ~ape 917, Page 2 -- apb DR. COLLIN$: no objections to that. In other words, these points have no val.idity and I move that this resolution be adopted and the tax bill be brought in. MR. STIBLING: Mr. ChaiEIIWl, I just want to make the point that because it does involve insw;ance I am not taking

part in the debate. MR. S~ONS: Does that apply to the underwriter from the other side of the House? MR. CHAIRMAN {Baird) : Shall:, the motion carry? ) MR. ROBERTS : No, the amendment shall caxry first. On motion, amendment defeated. On motion, resolution carried. On motion, the enacting clause ca=ied. Motion, that the resolution be submitted to a Colll!littee of the Whole Bouse, earried, On mot,ion, title carried. On motion, clauses · (1) through (4), carried. On motion, enacting clause carried. On motion, title ca=ied. MR. ROBEJ;tTS: Broken promises. 2320

August 17,1979 Tape No. 918 AH-1 That it is expedient to bring in a measure to impose a tax on the sale of advertising and to amend the Retail Sales Tax Act 1978. MR. JAMIESON: MR. CHAIRMAN: {Baird) apposition. MR. JAMIESON: Mr. Chairman. The hen. Leader of the By leave. I do not believe that the conflict of interest rule applies in my case,but in view of the public knowledge that I am clearly involved in the media,even though by way of a blind trust,I simply want to indicate to the Chair that I will neither vote nor participate in this debate. DR. COLLINS: Mr. Olai:rman. MR. CHAIRMAN: The hon. minister. OR.

COLLINS: I will try and be brief on this because I am sure hon. members have read about the discussions in the papers and have made up their own minds on things and I presume we will not need to have a long debate on this. Firstly, Mr. Chairman, I would like to table two documents for the record,really. One is the copy of the letter that was in response to the Board of Trade brief and,secondly,a briefing note on the advertising tax similar to the one I gave previously on the insurance tax. available for hen. members shortly. The copies will be This tax, Mr. Olai:rman, is in the form of a Retail Sales Tax.

In other words 1 the companies who advertise receive a service and the government is now proposing that we levy a Retail Sales Tax on that service. Now there are already some forms of advertising on which we levy a Retail Sales Tax, and we levy it at a full eleven per cent. We are now merely removing the concession that previously had been given to other forms of advertising­ for instance 1 the :nedia, newpapers and so on we are now removing that concession to make them equivalent to che other forms of advertising which are already subject to ~tail Sales Tax,but we are only partially removing the concession.

We are still leaving them with a considerable 2321

August 17,1979 Tape No. 918 AH-2 OR. COLLINS: concession because the Retail Sales Tax on advertising will only be four per cent for these other forms of advertising. Now, Mr. Chairman, I think it has to be clearly understood that this is a tax on the user. It is not on the media. The media does not pay this tax. The media collects the tax. The tax is on the user, i.e., the business doing the advertising. It is a very modest take. In a full fiscal year it will only render to the government just over Sl million. It is deductable in the hands of the companies as a business expense.

The remarks that this impedes ~~e freedom of the press, Mr. Chairmar., cannot be entertained with any seriousness. This is an addition to the cost of doing advertising. If cost~er se impedes the press, yes, I would say this impedes the press. But no one thinks that because you have to pay for advertising that you are impeding the freedom of the press and this is merely an addition to that cost. The remark has been made that it is unfair.

This is not unfair. ~his will apply to all advertisers, whoever they may be, and even to non-residents advertising in this country 1 and we expect that we will collect it because we now collect Retail Sales Tax on nan-residents in this country. We have no particular difficulty in that regard and we do not anticipate any because we will use the same mechanism, We do not anticipate we will have any difficulty in that regard. It has been stated that this tax is an unprecedented one. Mr. Chairman, that is not so. It is not unprecedented.

Advertising tax has been levied in several provinces for a long n~er of years, including in Newfoundland,on certain forms of advertising. Oncertain forms of advertising we have been levting the tax on advertising, the full eleven per cent Retail Sales Tax, on certain forms of advertising for many years 1 as have Kova Scotia. An example would be if a company wants to put out a 2322

Auqust ~7 ,1979 Tape No. 918 r.H-3 DR. COLLINS: brochure, an advertisinq bro.chure; we will levy a full eleven per cent Retail Sales Tax on such an advertisinq venture as do several other provinces. Quebee is levying a tax now on radio and television. In the United Kingdom, in Holland, in France, in Genuany there are Retail Sales Tax or the equivalent of Retail Sales Tax - Value Added Tax. It is a simdlar type of tax. MR. !lOBERrS: A qreat difference, as even the minister must know. DR. COLLINS: I will make up a little memo for the hou. House ~ader opposite to show him how Value Added Tax is a similar type of tax to Retail Sales Tax. 2323

August. 17, 1979 Tape No. 919 DR. J . COLLINS: Mr. Chairman, the other comment is that this will be costly. We do not anticipate that it will be unduly costly because we will use the same mechanisms we are using for other forms of retail sales tax. Of course, hon. members know that retail sales tax is applied not only to tangible personal property but, in this Province, is also applied to certain forms of se:r:vice and this is what advertising is. We use the same mechanisms . As far as the media having undue costs of administration and collecting this tax 1I would refer them to the corner candy store.

The corner candy store has to go through an administrative process to render retail sales tax on their sales 0 I would think if the corner candy store can do it 1 I would expect the media to also be able to do it. Mr. Chairman, I move the adoption of this resolution. SOME HON. MEMBERS: Hear, hear! MR. SIMMONS: Oh1 boy! I really do not know whether to laugh or cry after that performance, Mr. Chairman. That is really something else. The hon. member for Burgee-Bay d'Espoiz:... NM- l MR. CHAIRMAN (Baird): ~1R . STAGG: MR. SIMMONS: You are talking out of both sides of your mouth. There he is again. There he is. MR.

NEARY: The hon. member is out threatening strangers outside this House. He had better watch himself. The hon. gentleman had better watch himself . ~tR. STAGG: Mr. Chairman, on a point of order. MR. CE!AIRMAN: The hon. member for Stephenville. MR . STAGG: The member for LaPoile (Mr. Nea:ryl indicate3 that I am threatening strangers. There was a particular stranger in the gallery for the last couple of days, Mr. Chairman, who has been gesticulating and making remarks particularly directed towards the Minister of Finance (Dr. J. Collins) , indicating that the Minister of 2324

August 17, 1979 MR. STAGG: MR. NEARY: SC.'IE HON. MEHBERS: MR., SIMMONS: MR. CHAIRMAN (Baird) : MR. STAGG: Tape No. 919 Finance was crazy, dumb or whatever. After all, Mr. Chairman - Oh, oh! The man is allowed - order, please! Nl'l - 2 It is quite possible that hon. members opposi .te may make certain mot:ions but there i!O nobody allowed in this gallery to make any commentary of any kind on proceedings here. And I indicated that to a gentleman outside just now after he went outside and continued that type of gesticulation and that is the reason I went and spoke to the gentleman. SOME HON. MEMBERS: MR.

CHAIRMAN: MR. ROBERTS: Hear, hear! The hon. member for the Straits of Belle Isle. To that point of order, first of all whatever the hon. gentleman may have done outside the House, the hon. gentleman from Stephenville (Mr. Stagg), it is not proper to bring it up in this House unless he somehow alleges privilege, AN HON. ME!UIER: Your colleague brought it up. MR. ROBERTS: Mr. Chairman, I heard what my colleague said. What my colleague said was perfectly in order. The hon. gentleman from Stephenville (Mr. Stagg) has admitted the truth of what my colleague said. AN a<)N. MEMBER.: (Inaudible). MR.

ROBERTS: The hon. gentleman returned from Yellowknife has something to say. Well if he has let him say it, If not, let me say my piece. Thank you. AN HON. MEMBER: Who me? MR. ROBERTS: Yes. The hon. minister. Mr. Chairman, the point of order was that somehow my friend from Burgeo-LaPoile (Mr. Neary) said something improper, He did not. In fact what he said was true 1as was confirmed 2325

August 17, 1979 MR. ROBERTS: MR. NEARY: MR. ROBERTS: Tape No. 919 NM- 3 by the gentleman from Stephenville (Mr. Stagg). Right. Secondly, whether the citizens of this Province or not feel that the Minister of Finance (Dr. J. Collins) is not in full possession of his faculties is something on which every individual citizen of this Province may hold his own opinion, the same as he may hold it of the gentleman from Stephenville (Mr. Stagg) or me, or of anybody else. That surely is not a cause for a point of order in the House.

Furthermore, if we are going to raise a point of order in this House every time somebody outside feels one of us is not in full possession of his faculties 1 we will have an awful lot of points of order. Finally, Mr. Chairman, and perhaps most importantly of all, there is a well recognized procedure. If the hen. member for Stephenville (Mr.

Stagg) feels that any person in the galleries of this House is acting in any improper way at al~ there is a well recognized procedure set forth in the rules and the precedents of this House, I would suggest it is not recognized by the rules or precedents of this House to go outside and to speak to somebody whether the member is "threatening" or not. So there is no point of order at all. Let us get on with the debate. We are not going to get out of this House on

schedule now, or the

schedule we had hoped - that is fine. I am prepared to stay - but these specious points of order are just going to delay things further. MR. MARSHALL: I do not want to nelay the House on that point of order, Mr. Speaker, but I think it is a most important- I'.R. CHAIRMAN: The hen. House Leader. MR. MARSHALL: - point. It is the first time I have been aware of that particular situation. I think the matter dealt with, the hen. member last speaking said in the last point, is a matter of some concern, if any member of the public comes to this House, which is the 2326

AuguSt 17, 1979, Tape 919, Page 4 -- NM MR. MARSHALL: House of Assembly, the House of Parliament of this Province and gestures to any member, be it the opposition or be it the government, so I think it is; a matter of great seriousness because we cannot have you know, we are elected representatives here and I think we will all agree that we cannot have that. And I would think that in future if any situations like this occur the government will certainly· have no hesitation whatsoever - and if we were aware of it at the time we would have - in dealing with it promp:tl.y in the way it should be. MR..

CHAIRMAN(.Baird): There is no point of order. However, spectators in the gallery should not participate in the House proceedings. Mll. NEARY: AN HON .• MEMBER: made gestures is not true • MR. CHAimoiN: d'Espoi:t. MR. SIMMONS: MR. NEARY: MR. CHAIRMAN; MR. SIMMONS: They did not. And the statement that the gentleman The hon. the member for Burgee ~ BaY' Now, Mr. Chairman ~ The government are paranoid. Order, please! Now, Mr. Chairman, we tried with some difficulty to have a serious hearing of the previous matter, the matter affecting insurance companies. 2327

August 17, 1979 Tape No. 920 GH-1 MR. SIMMONS: I do not think we succeeded in getting it. Now, we have got an hour, we are told, before they shut her down for another few months. We sat last year for thirty days in a year. It looks like we are going the same route again with the new House. Well, Mr. Chairman, I want to give notice now that I intend to do my best to see this matter before the House gets a serious hearing. If it takes twenty minutes 1 fine. If it takes twenty times twenty minutes, which is also my right in Committee, then I shall do it those many times, but I am intending, Mr. Chairman.

This matter before us now is fairly serious. It is like the previous matter, it is precedent setting. It has devastating implications and I intend to have my say in all seriousness, and if I have to conten with the juvenile from Stephenville in that process, well, I will do so. It will take a little longer 1 perhaps. Now, Mr. Speaker, first of all, let us dismiss a couple of issues right fast. The minister,on the previous bill and on this one,is all caught up with lobbies. Somehow,suddenly,there is something wrong with lobbies.

The big bad boys are those lobbies, those people who actually take the time to tell legislators what they would like to see in legislation. Suddenly that has become a sin. "It is shameful sin", he says, "that people- lobbies, those lobbies should", he kept throwing across the floor, "the lobbies told you that, the lobbies wrote that, massive lobbies". There is something wrong with people out there now,in the minister's mind, who actually get their thoughts together and come and say, "Mr. Legislator, Madame Legislator, we think it should be done this way for these reasons". I say thank God for the lobbies.

We would have more sensible legislation in this ?rovince if we had more lobbies on both sides of the issue. And : while the minister is talking about lobbies, let me remind him and his colleagues that it is a very successful dentist lobby that he has listened to and his colleagues that has kept denturists' 2328

August 17, 1979 Tape No. 920 GH-2 MR. S IM."'ONS : legislation out of this House for seven years. SOME HON. ME..'IBERS: Hear; hear! MR. SIMMONS: He wants to talk about lobbies, Well, he would know all about lobbies. He has been listening to them, he has been listening to lobbies for a long time, Or let me tell him about the doctors' lobbies which have succeeded in convincing the government to allow the fattest doctors' salaries in Canada, That is what lobbies have done for that minister. DR. COLLINS: MR. SIMMONS: sudden. DR. COLLINS: lowest rates. MR.

SIMMONS: Actually, the smallest (inaudible) - Yes, yes, defensive all of a - smallest increase of any and the Now, would the minister say that is a 1 per cent increase or a SO per cent increase? MR. ROBERTS: In the minister's arithmetic. MR. SIMMONS: In the minister's arithmetic, if you go from $20 an hour to $30 an hour that is a 1 per cent increase. Lobbies, the minister is all caught up with lobbies. I say to him before he starts attacking lobbies,which are a very legitimate part, Mr.

Chairman, of our parliamentary process-and I repeat that we would have much saner legislation if we had people on both sides of the issue lobbying their points, giving us an informed viewpoint - all too often, Mr. Chairman, I as one member come into this House and have to vote or decide on an issue without sufficient possession of the facts on both sides, I do not know both sides of the argument. I submit, Mr. Chairman, that today I have a fair understanding of both sides of the argument.

I have watched the press, the minister's statements and I heard what he had to say in the Budget, I have heard his answers to questions on the media tax, I have seen the information from the media lobby, 2329

August 17, 1979 Tape No. 920 GH-3 MR. SIMMONS: and they have sent it along not only to government but to us, and so I am in a position today, Mr. Chairman, with information on both · sides of this iss11e to speak with a little more knowledge about this subject than I have, perhaps, on most subjects in this particular House thanks to the lobby approach .

And I make no apologies for lobbies, I am thankful they exist, I wish we had more of them, I wish they were as informed as the insurance lobby demonstrated itself to be earlier despite the minister's adjectives ahout'ridiculous'and he tended to dismiss every one of their facts. I somehow think that in the insurance business and in the media, despite the ~nister's version of things, there may well be some sane people, some sensible people in the media, a few sensible people in the insurance business.

Did you listen to the minister this morning?" They are all ridiculous, they are all stunned, they do not know what they are talking about, they are all feathering their own nests?" I am sure the minister has never done that. Now, Mr. Chairman, this media tax; this media tax, Mr. Chairman. First of all,an issue that I do not think has been addressed 1 and I will raise it first because it is a very important issue - it is an issue that is quite apart from any punitive or any counter-productive effect this tax might have and I will come to that -but before that, Hr.

Chairman, let us raise a very large issue abcut this tax, and it is this: Does the Province even have the authority to implement this tax? Does the Province have the constitutional authority to implement this tax? And that, Mr. Chairman, is a question that has not been raised, I believe, in the public debate or the Questions and Answers in this House: 2330

August 17, 1979 Tape No . 921 GH-1 MR. SIMMONS: Does the Province have the constitutional right? Now, Mr. Chairman, again I am out of my particular field so I will just ask t.he question and I will make a bit of a submission on it, but I am not in the position to judge on this matter, but it is a question that needs to be addressed, and I would fully hope that either the Minister of Finance (Dr. Collins) or the President of the Council (Mr. Marshall) has canvassed this particular issue because it is a very important one. Are we into the field, Mr.

Chairman, here of direct taxation or are we into the field of indirect taxation. Now I know the short answer• The short answer; it would seem that you are into the field of direct taxation, But is it that simple? And here is my point • ' The imposition of any kind of tax within a province, that is to say, can be justified under the British North America Act if it falls under the clause 92.2 which provides'direct taxation within the Province in order to raise revenue for provincial purposes,' direct taxation within the Province. Now, I know the short answer.

The short answer and the easy answer, the surface answer, the superficial answer, is that it is direct taxation on the amount of advertising; that is clearly the short answer. I will pursue my point about the possibilities for an

interpretation as an indirect tax in a moment. Mr. Chairman, the question of whether it is direct or indirect taxation, the question of whether the tax itself is solely and wholly a tax applied to the total value of advertising 1 purchased or sold! Mr. Chairman, suppose you were to go buy a refrigerator or a television set over at Woolco . and the TV set is going to cost you $400. What is that $400 made up of ? Freight from the manufacturer's location? Yes, of course. The actual cost of manufacturing? Yes. The overhead in the store, the salaries and the lighting and so on?

Yes, that is certainly a legitimate component of the retail selling price. How about the cost that the store incurs purchasing advertisina to promote its commodity? Is that a legitimate cost? Should that be built in to the selling price too? If the store is going to sell the television set 2331.

August 17, 1979 Tape No. 921 GB-2 MR. SIMMO