March 28, 1995

GOVERNMENT SERVICES ESTIMATES COMMITTEE

Pursuant to Standing Order 87, Gerald Smith, M.H.A.

(Port au Port) substitutes for William Ramsay, M.H.A. (LaPoile).

The Committee met at 9:00 a.m. in the House of

Assembly.

MR. CHAIRMAN (D. Gilbert): Order, please!

I would like to welcome the Minister of Municipal

and Provincial Affairs and his staff here this morning. I will start of by

saying who I am, and then I will ask the members of the Committee who are here

to introduce themselves. I will then ask the minister to introduce himself and

his staff.

My name is David Gilbert. I am the MHA for Burgeo -

Bay d'Espoir, and I am Chairman of this Government Services Committee.

MR. FITZGERALD: My name is Roger Fitzgerald,

MHA for Bonavista South, and I am the Vice-Chairman of this committee.

MR. J. BYRNE: I am Jack Byrne, MHA for St.

John's East Extern.

MR. SMITH: I am Gerald Smith, MHA for Port au

Port.

MR. CRANE: I am John Crane, MHA for Harbour

Grace.

MR. CHAIRMAN: Thank you.

Mr. Minister, if you would now introduce your

staff. I would say for the benefit of the people who are going to be

transcribing this afterwards, when one of your officials is asked to speak, I

would ask that they identify themselves. The transcribing staff might know some

of us, but to make it easy in the first couple of meetings I am going to ask

everybody to introduce themselves when they are speaking so it will make it

easier for transcribing. Mr. Minister.

MR. REID: Good morning gentlemen and ladies. I

think there is probably a new definition of the term lady after that person I

saw on TV last night representing the EU. I know my sister-in-law looked at her

and said: Make no wonder men have the impression they do of women - `some' men

have the impression they do of `some' women. Anyway, I think both Tobin and the

Premier, and everybody representing us, did a very good job yesterday.

Mr. Chairman, let me introduce my staff who are

with me. First of all, I have Clarence Randell on my immediate right. He is the

Deputy Minister. Then we have Don Peckham, Assistant Deputy Minister, Finance

and Planning and Administration. We have Art Colbourne, Deputy Minister of

Municipal Support Services. Gary Callahan is the Director of Public Relations,

to my extreme right, and Mike Dwyer, Chief Executive Officer of the newly

created Government Services Agency, and Felix Croke is Manager of Financial

Operations.

What I am going to do this morning is the two sets

of Estimates. The first one we are going to do is the main Department of

Municipal and Provincial Affairs, and at 10:30 a.m. I have asked Bob Noseworthy

and his people from housing to come in. I said 10:30 a.m. - I didn't know what

time - maybe we won't even get through this this morning, but sobeit. I will

make my staff and myself available at any time if you want us to come back. I am

hoping to have a good time here this morning with you gentleman, and we can go

through a fair amount in two or three hours.

I will commence by highlighting some of the major

items of the Estimates of the Department of Municipal and Provincial Affairs if

you don't mind, Mr. Chairman. The total Estimates for the department is

$185,048,100; that is the gross expenditure for the next year. There are

revenues in both current and capital account totalling some $42,299,400 leaving

a total expenditure in this department of $142,748,700. There are 332 permanent

positions in the department operating out of all -

MR. CHAIRMAN: Could you speak up, Mr. Minister?

Some of the members over there can't hear you.

MR. REID: You can't hear me?

AN HON. MEMBER: You must be getting old.

MR. REID: I must be.

The department is comprised of three main branches,

and its delivery service embodies a number of regional and sub-regional offices

to ensure the best delivery of services to municipalities in the most efficient

manner possible, and I say that with tongue-in-cheek based on, I suppose, the

amount of funding that is provided to this department by government each year

which sometimes dictates in some areas the level of service that we can provide.

The Department of Municipal and Provincial Affairs

is responsible for matters relating to local government, municipal financing,

real property assessment, urban and rural planning, development control,

engineering for water and sewerage, road construction and reconstruction, and

for emergency measures which deals with provincial emergencies and provides

emergency planning and training for municipalities. It is also responsible for

the Office of the Fire Commissioner which is responsible for fire prevention,

suppression and regulation and training throughout the Province.

The first time this year my department has the

responsibility for the newly created Government Service Agency. Employees for

this branch have been transferred from other departments to mine. The creation

of this agency is an important first step in creating an organization which can

make government services more available to members of the general public.

The activities of the department are broken out

within the following categories; Executive and Support Services: this activity

mainly provides for funding for the operation of the executive, administrative,

accounting and financial support services for the whole department. Services to

Municipalities: this covers engineering services, water and sewage

installations, street construction and paving programs, the provision of town

planning for municipalities, the assessment services to municipalities with real

property tax, developmental control to areas of protected roads inside

municipalities and outside on main highways, for example, and last but not least

- sometimes I wish it was - the maintenance and operation of the industrial

water systems. Funding is also provided to support the Newfoundland and Labrador

Federation of Municipalities. We have cut that back somewhat over the last few

years but we are still giving something to the tune of $40,000 to the Federation

of Municipalities for general operating expenses.

Permitting and Inspection Services; these services

which are now provided by many departments of government will be delivered by

the Government Service Agency. Mr. Chairman, I would like to give you some

details on this because this is something new. First my department has regional

offices established in Labrador, in western, central and in the east. Other

offices are in the process of being established to meet government service

agencies, places like Bonavista, Marystown, Clarenville, Carbonear, Bay Roberts,

or wherever John, and Stephenville. So even though there are going to be four

regional offices there will be a number of sub-offices around the Province

providing whatever services we can provide. Nine locations according to this, we

will expand beyond the four. The idea of these offices is to bring delivery of

services provided in these areas closer to the communities and groups served by

the government. It also provides for better liaison between the department,

municipalities and other groups and individuals and will provide for a more

timely and meaningful response to these groups. These regional offices will be

given a considerable amount of authority and latitude to manage the

responsibilities within their jurisdiction.

The Real Property Assessment Division: this

division operates under a separate act and has responsibility for the assessment

of real property in all municipalities with a real property tax, except St.

John's. At present some 207 communities have adopted a real property tax and the

division has assessed approximately 165,000 properties throughout the Province.

This division must continuously conduct reassessments in these municipalities on

a rational basis, a rotation basis. Within this service, to other municipality

groupings, is a municipal inspection division. A very small staff of nine

inspectors are available on a continuous basis to all municipalities to

undertake internal audits when there are financial problems within the

municipalities and to offer them advice where they require it for financial

planning or to advise them on general municipal procedures.

Gentlemen, take note that it is only nine, with the

number of communities that I have in the Province, we just cannot do justice in

assisting municipalities around this Province with just nine bodies. We just

cannot do it. The service we do provide though does provide those helpful hints,

I suppose, and tips to councillors around the Province, and assist with a number

of procedures and operations of councils, council meetings, and the day to day

operation of councils. As a local government division with a staff of three this

group provides generous support to municipal operations, etc., and the

department provides advice to the regional managers on matters of departmental

programs and policy.

There is also an Urban and Rural Planning Division:

This division is staffed by professional town planners and supported by planning

technicians and other administrative staff. The role of the division is to

provide town planning advice to prepare municipal plans for municipalities and

to advise them on various planning policies and regulations which may be used

within the individual municipalities. There is also a developmental control

section within our urban and rural planning division. The operation portion of

this

section has been placed under the new government service agency and this

ensures proper planning, especially in the rural parts of our Province.

There is a Engineering Service Division: as I said

a few minutes ago, they are directly involved with municipal water and sewerage,

and road projects within the Province. That group is the one that makes

recommendations with regard to the priority list of government under health,

environment and all the other things that would rank a particular project high

or low.

Assistance and Infrastructure Support: This

section

provides funding for the water and sewerage programs, road construction and

paving, as well as a third party private sector project. There is a considerable

amount of work going on throughout the Province this year because of the large

amount of funding approved last year. Most of this work is already under

contract and will be carried out as soon as the weather permits. I think we are

looking at around $15 million to be quite honest about it.

This program is financed jointly by the Government

of Canada and the Province, and in some cases the municipality acts as the third

partner. In the majority of cases there are only two partners, the feds and the

Province, and the Province picks up the share of the community. Provision is

also made for special assistance to municipalities. This is provided to enable

my department to respond to requests of municipalities for special assistance,

those in dire need. They cover such items as special assistance to meet overhead

cost administration. Some communities have insufficient revenues generated in

the town. This fund is managed by the department's finance committee which

reviews all aspects of this kind of assistance and makes recommendations.

A considerable amount of funding is provided for

the statutory grants to municipalities. That is the Municipal Operating Grant.

Each year the Province gives out $41,500,000.00 in grants and adjustments to

municipalities around the Province. Cost-shared funding of $750,000 is provided

for environmental improvement projects currently ongoing in the Province. The

cost of these projects are cost-shared between the federal, provincial, and

municipal governments.

Protection Services: emergency measures planning

and training, emergency response, joint emergency preparedness program which is

couple of years, a number of seminars around the Province that municipalities,

councillors, and others have taken

part in. I have been speaking to a number of

them at their dinners and different things, and I am finding that most

communities find these to be quite worthwhile.

The purpose, Mr. Chairman, of the Government

Service Agency that I mentioned a few minutes ago is to bring together a number

of services and make them more readily available to the general public in more

convenient locations. In order to do this, staff from a number of departments

have been brought together and the services offered individually by each of

these will now be combined and offered in a co-operative manner at unified

locations. This should provide a much improved government service where they are

located.

Mr. Chairman, this concludes my opening remarks. I

will have problems today for sure answering some of your questions. I will pass

those types of questions on to my Deputy Minister and he can then ask his people

if need be. Not a lot in regard to this year's Budget. My department hasn't lost

a lot. I know some of you will ask questions of where we did lose money and some

plans that we have for the future. I appreciate the opportunity, Mr. Chairman,

of coming here and making my presentation.

MR. CHAIRMAN: Thank you, Mr. Minister. Before I

recognize Mr. Fitzgerald I would like to welcome Mr. Walsh, the other member of

the government side of the House to this Committee. He has arrived.

Before we start I think we should clear the ground

rules. I notice that Mr. Carter has come in. In those committee meetings as I

understand it the members of the Committee have the right to speak, and then if

any other member comes in it is by leave of the Committee. I would like to get

that established. Is that the understanding that we have?... it mightn't rear

its ugly head today but some other day it might, so let's get it cleared up now.

That is the understanding.

AN HON. MEMBER: What do you mean by leave of

the Committee, Chairman?

MR. CHAIRMAN: I will recognize the members of

the Committee, but if you speak it is by leave.

AN HON. MEMBER: Unless he is representing

another member.

MR. CHAIRMAN: Unless he is representing another

member.

MR. WALSH: Mr. Chairman, for example, if I

wanted to give my five minutes to a member, or two minutes.

MR. CHAIRMAN: You can do that.

MR. WALSH: Okay.

MR. CHAIRMAN: That is the way it has been done

in the past so that if you say: I was going to ask a question but if Mr. Carter

wants to ask one he can have it.

As long as we understand that, I will now recognize

Mr. Fitzgerald. He has ten minutes for his opening remarks or he can question

the minister back and forth for the ten minutes.

MR. FITZGERALD: Thank you, Mr. Chairman. Mr.

Minister, the offices that you referred to, would they be the same offices that

are referred to in the 1995 Budget where it states that five government service

centres will be established across the Province? Are those the offices that you

were referring to when you named the possible locations of some of those sites?

MR. REID: Yes they are.

MR. FITZGERALD: They are. So you don't know yet

where those offices will be located, it is not...?

MR. REID: No, we are not 100 per cent sure.

What we've done, Mr. Chairman, is we are concentrating right now on the West

Coast, Labrador, Central and the East Coast, getting those offices opened. When

we get the regional offices open, then we are going to branch out and go. We are

not 100 per cent. I'm not sure in Conception Bay North, for example, where the

district office will go: whether it will be Bay Roberts, Carbonear or Whitbourne

or anywhere else. I'm not sure at this particular point in time. The five

references in the Estimates are the five principal ones: St. John's,

Clarenville, Gander, Corner Brook and Goose Bay.

MR. FITZGERALD: That would certainly be a

positive move, because I know many districts or many councils in my district,

with the problems today of trying to balance the budget, find it very difficult

in order for them to travel to St. John's every time they want to meet with the

minister or his officials. It is always not the ideal thing I suppose for them

to expect the minister to travel out there every time there is a meeting or a

problem.

In the Estimates on page 271 I notice that

Community Water Services, there has been just about $500,000 taken out of that.

When I see that I read into that that those are places which are local service

districts that would ordinarily apply for water services, and now that is going

to be cut back pretty well in half of what it was in other years.

MR. REID: That is correct. Yes.

MR. FITZGERALD: That is certainly going to have

a negative impact on a lot of areas, especially in my district as well. Because

a lot of those communities I think have applied already and were looking forward

in a positive way to seeing something brought forward this year.

Mr. Minister, I wonder what would entice somebody

today to want to come out and offer themselves to be a councillor in a rural

Newfoundland community? I am not talking about the Ganders of the world, or the

Mount Pearls, but places like Plate Cove East and Musgrave Town, and Port

Blandford and those places. At one time you would go and offer yourself to

become a councillor, you would go to government and there would be funding there

for you, and you would have some input into giving direction where that money

would be spent. Now it seems that most of this has disappeared, the funding has

pretty well dried up completely. In order to go and borrow money, you have to go

to Municipal Affairs. In order to balance a budget you have to go to Municipal

Affairs to get direction and to find out what you can or cannot do. I fear that

in the future we might be finding a problem in getting good people to offer

themselves to serve on council, because I am not sure that they perform any

great function any more.

MR. REID: Well, I don't tend to agree with you

on that particular question because, regardless of how bad it gets in the

community as it relates to government funding or services provided, if you are

living in the community there is still a certain amount of community spirit that

you have and, regardless of how bad it gets, you will still need volunteer

people there to keep the community intact. If everyone took the attitude of:

What's the purpose in offering my services to council, or volunteering my

services for anything - a community wouldn't survive. The heart and soul of any

community is, especially in rural Newfoundland, I suppose, centred around the

people who volunteer on a regular basis to keep that community up and running

and surviving.

I understand what you are saying, and I sympathize

somewhat with the plight of some communities around, but I don't think it is

quite as bad as what we sometimes perceive it to be. Rural Newfoundland is going

through a rough period, I guess, because of the downturn in the fishery and a

number of other reasons, but we as a Province are going through a rough time as

well. We are being hit continuously with the federal government downsizing, I

suppose, and not being able to have the ability to collect the taxes we need to

collect, and since 1949 I think consecutive governments, both Liberal and

Conservative, have kept pouring monies and monies and monies into communities,

and we have created a condition in communities - in some communities - where

councils and people think: Oh, don't worry about it, the government is going to

come and bail us out. I don't have to say this to you; you know that we are not

in a position any longer to be able to do that, to keep driving the Province in

the hole further and further.

With that said, why can't communities survive? I

think they will. They will probably have to survive with a little less than what

they are used to getting from the provincial and federal governments, but they

will survive.

Down in your district, for example, there is no

reason to think that Bonavista or Catalina, or any of those communities, will

die because the provincial government has to stop or slow down the influx of

money to your communities. So I agree, but then I don't think we can give up and

say, as people living in communities: Well, it's a waste of time to be doing

anything. If you do that, then that is when your community starts to die.

MR. FITZGERALD: I will use Plate Cove West as

an example, I suppose, in my district. I am sure that it can be related to a lot

of communities across Newfoundland and Labrador. Here is a small community with

about probably 220 people. Somewhere government, in their wisdom in the past,

convinced this community to take over the local road. It is a dead end road off

route 235, leading down through this one community only. The road has gotten so

bad there now that it is almost impossible to drive over the thing, where it was

paved and there has been no maintenance done on it, and there have been some

ditches cut across the road to look after somebody putting in a water line or a

sewer line. It is absolutely ridiculous driving down there.

Mr. Minister, I brought this forward to your

attention first when I got elected back a couple of years ago. At that time I

think your officials stated to me that they were looking at some form of

regional government for the area and they weren't about to go back and take back

things that somebody else had already assumed responsibility for. I don't know

for the life of me how some form of regional government can work in that

particular area, because all communities find themselves in exactly the same

plight. There are a few people there with a lot of needs and not a lot of money.

I'm wondering if you as minister would take a

second look at that and have a look at this particular road. It is about three

kilometres in length and it is totally ridiculous the condition that particular

road is in. The only way that it can be repaired is if you sir would do it

through your department.

MR. REID: It is a road that was taken over by

Plate Cove, was it, from the Department of Works, Services and Transportation?

MR. FITZGERALD: That is right. A few years ago,

as you know, I think the communities at that time were getting paid $2,000 per

mile or per kilometre for maintenance and upkeep of roads. I suppose at that

time those people looked at it - whoever was on council at the time - and for

all intents and purposes now I think the council is probably pretty well

non-functional, in that most of the people who were on council have moved away.

This particular road there now is pretty well impassable. The only way that it

can be solved, the only solution to it, is for government to take a look at it

and take it over. I'm not talking about local roads or local lanes leading to

other people's houses. I'm talking about the main road through the community.

MR. REID: We will look at it again for you,

Roger. That is all I can say for now.

MR. FITZGERALD: Okay. The sewerage treatment

plant in Bonavista. There has been a study I think just about completed on this

particular sewerage treatment plant. It was a $45,000 study. It was put forward

by Municipal and Provincial Affairs. The study is just about complete. I think

the report might be coming back within the next couple of weeks. I'm wondering

if there is money set aside - that I know hasn't been spelled out - to look at

the corrections that might be suggested in this report.

MR. REID: Art, can you make a comment on that?

Do we have the report on Bonavista? Art Colbourne.

MR. COLBOURNE: We have a report with the

Department of Environment, and our people are looking at that.

MR. CHAIRMAN: Mr. Fitzgerald's time has

expired. I have Carter by leave, then I have Byrne, then I have Smith. So do you

want to let Mr. Carter go?

AN HON. MEMBER: I will pass for the time being.

MR. CHAIRMAN: Okay, Mr. Byrne.

MR. J. BYRNE: Thank you, Mr. Chairman. I have a

number of specific questions with respect to the Estimates and I have a number

of general questions with respect to the Auditor General's report. Before I get

into that there are a couple of comments I would like to make on something that

Roger brought up with respect to the rural towns.

I agree, and I've been maintaining this for a

number of years now, that the rural towns have been hit too hard, and in

particular been hit too hard by the budgets that this government has brought

down in the past number of years. Especially with respect to the cutbacks in the

road grants and the municipal operating grants and that type of thing. I believe

the rural towns are fading away and that this Budget is helping that along.

You talked about volunteers. I was a mayor of a

local town before I got involved in provincial politics and I had my mind made

up. It was probably one of the better run towns or financially sound towns in

the Province. I had my mind made up that I wouldn't be running again as a

volunteer for a municipality because of the hardships that were being brought on

it by the cutbacks that the towns were getting. As far as I'm concerned, what is

coming down the tubes in this Province, and the sooner the people in the rural

communities realize it, is that we are being forced into centralization by the

economics of the budgets that have been brought down, and the people are going

to be told in due course, as far as I am concerned: Yes, you certainly may live

in the rural towns, you know, smaller towns, 100 miles, 200 miles away from

centralized areas, certainly you can live there, but there won't be any

services. You can live there as in the days prior to 1949.

That is what I feel with respect to what is coming

down the tubes for the rural communities in this Province, and there are a lot

of factors, I know. It is the world economics, the country itself, the federal

government cutbacks, it is all playing a factor. But I think the people should

be at least warned or forewarned or something of what is coming down the tubes

in this Province. I'm not going to make any comments on that because I going to

get into some specific questions now with respect to the Budget.

MR. REID: You are probably right. I said it

then when I was mayor of Carbonear, but you have to remember it started in the

early 'eighties. You were around in the early 'eighties, and do you remember the

racket that we had at the Federation of Municipalities when Mr. Peckford and

Mrs. what's-her-name from Gander, she was the minister then, cut the five cents

off the fifty cents? It started then. It has been going on ever since. I agree.

Yes, it has been going on ever since.

MR. J. BYRNE: Getting worse every year.

MR. REID: I don't know about getting worse, if

you are saying it is getting worse, I don't know how you could say in the last

three or four years that this department has been getting worse, because we

haven't lost any great amount of money. You take $1 million -

MR. J. BYRNE: Yes, but the municipalities have

lost the money.

MR. REID: Where have they lost it? The MOG

hasn't been touched again this year. It is the same as what it was last year,

same as the year before.

MR. J. BYRNE: What was it prior to say my

becoming mayor in 1986?

MR. REID: (Inaudible) faintest idea. Because it

wasn't based on a cap then either.

MR. J. BYRNE: Major cuts to the municipalities.

MR. REID: There has been $7 million taken out

of it in the last four years.

MR. J. BYRNE: There have been major cuts in the

municipalities. The road component itself will tell you. The towns are finding

it very hard. I was driving through a few communities not long ago out in

Trinity Bay and I was saying to myself: What is the future for these people in

these communities?

MR. REID: But just let me answer you for a

second, and I will be very brief, Mr. Chairman. You are right in a certain

respect. But you do have to agree that there are rural communities in

Newfoundland out there right now that haven't been paying even close their way

in the past twenty years. I had a community come in to see me just last week

from the northwest coast. I asked the mayor what his mil rate was and he

couldn't tell me. Do you know what the mil rate in that community was? One of

the most affluent communities on the northwest coast of Newfoundland. Three

mils. He got on with exactly the same thing that you got on with.

What do I do other than swallow when I hear things

like that? That is all you can do. What can you do about it? People living in

rural Newfoundland - I agree with you, you've got a point.

MR. J. BYRNE: Where are they getting the money

to pay the 6 mils or 10 mils?

MR. REID: I will give you an example. Bonavista

was on the radio on Friday lambasting us about our Budget.

AN HON. MEMBER: Yes. So they should.

MR. REID: I wish the people of Bonavista could

see Bonavista's budget, and could look at in comparison to other communities in

the area what Bonavista was like. Do you follow what I'm saying?

MR. J. BYRNE: Yes, but -

MR. REID: So I agree with you to a certain

extent, but I've said it right from Day One, that if they are going to survive -

you used the word - then they are going to have to become more responsible.

MR. J. BYRNE: But you have to realize too, as

minister and as a department, that they can get to the point of diminishing

returns, which we've gone beyond now. You've got the small towns out around this

Province that are people, and I said this five or six, seven years ago, that

once the main industry in that town is gone, what is going to happen if they

keep getting hit with the cutbacks from the provincial government? Where are

they getting the money? You might ask somebody to up their mil rate from 3 mils

to 6 mils or up to 9 mils, but the people are not going to be able to pay it.

They may be able to pay 3 mils, but they are certainly not going to be able to

pay 6 mils or 9 mil. So you get to the point of diminishing returns. It is

foolishness to increase it. It depends too on the service they are getting.

MR. REID: (Inaudible).

MR. J. BYRNE: Yes, the towns over the years

were getting services. Down my way, when I campaigned and ran for council, I

campaigned on no water and sewer in that town because of the cost involved. I

had enough sense to know that. A lot of towns should have never had it in the

first place, granted, and they can't pay back their debt.

MR. WALSH: How many of them are after

cancelling their cable TV since, I wonder?

MR. J. BYRNE: I can't answer that. That is

something I never looked into.

AN HON. MEMBER: (Inaudible).

MR. J. BYRNE: That is pushing it, $3 or $4

dollars a month as compared to...

AN HON. MEMBER: Where are you getting cable for

$3 or $4?

MR. J. BYRNE: Well, $10 then, big deal.

MR. WALSH: It's not. It's about $40 or $50 a

month for cable.

MR. CHAIRMAN: Mr. Walsh will have a chance to

speak later.

MR. J. BYRNE: Thank you, Mr. Chairman.

I would like to know what town you are living in,

paying $40 or $50 a month for cable. I have cable, and I am certainly not paying

$40 or $50 a month, and I have everything available. Anyway, we could go on all

day on this, I suppose, because it only boils down to people's views.

In the Estimates, page 265, Executive and Support

Services, the minister's office, you have transportation and communications. You

budgeted $52,900 and spent $82,900 and have $52,900 this year. Why would you

spend $30,000 more this past year than you had budgeted, and only budget the

same as you budgeted last year?

MR. REID: Well, I am expecting that it will

probably be higher than the $52,000 this year as well, with the travelling that

I have done in the past year, and the beating around. I will give you an example

of the cost. I believe it cost me almost $2,000 to take Harvey Hodder and myself

and go to a funeral out in Port aux Basques earlier the year, if you remember

that. I have made it a point to go to Labrador, for example, the southern coast

one year, and the northern coast the next year, because of the complaints of

people up there that they never see ministers and this sort of thing. I have

done, according to what my staff tell me and Felix tells me, more travelling to

municipalities, and had more meetings in municipalities, than most ministers

have done in the past.

MR. J. BYRNE: I am not questioning the

increase, what was budgeted versus what was spent. I am questioning why, if you

spent that much last year, would you not budget the $82,900 again this year?

MR. REID: We did, and Treasury Board came back

and said: No, you are only going to spend $52,000 this year.

MR. J. BYRNE: Is that how the Budget was

balanced?

MR. REID: That is the simple answer to it, so I

guess I am going to be restricted in my travelling next year.

MR. J. BYRNE: You were supposed to restrict it

last year, or whatever.

Again, in purchased services, you had budgeted

$3,700 and had spent $15,700 and you are back to $3,700 again. Back to trying to

balance the Budget, we don't have a balanced Budget. We are not getting real

figures in the Budget then, are we?

MR. REID: Well, I don't know if you are getting

real figures or not, but -

MR. J. BYRNE: We are not getting realistic

figures.

MR. REID: One reflects the other one. With

increase in travel, automatically then your other expenses will increase, and

that is why there was an increase there in that list.

I really don't know. I am going to have to try to

stay as close to it as I possibly can. You understand. I get invitations from

all over the Province, and how can you say to the Humber Joint Councils in

Corner Brook, if they are meeting next weekend, no, boy, you can't go because

you can't afford it.

MR. J. BYRNE: You are missing the intent of my

question. The question is, you are budgeting a certain amount, spending almost,

I won't say double, but a fair amount over, and this year you are budgeting the

same amount as the previous year, and you are planning on doing the same travel.

What I am saying, the figures we have in the Budget, if this is prevalent

throughout all government departments, the Budget that we have, the final

figures are not based on realistic figures.

MR. REID: No, you look at your total budget,

you look at your total cost. If I, for example, as a minister, go above the

$3,700 this year for that particular item, then they have to find it in my

budget, in some other area, to transfer. At the end of the day, the bottom line

of the department has to be what it shows, and it will show unless some

emergency comes up, and then we have to come back to the House for Interim

Supply or extra money to put into it. So the bottom line has to be what the

total net expenditure is.

MR. J. BYRNE: On page 266, Administrative

Support,

section 02, Employee Benefits, you had budgeted $95,100. You revised it

to, or actually what was spent, I suppose, was $63,100 and it is back up to

$78,600. Now, it is just the reverse happening. Why would you be doing that?

MR. REID: Is that under Executive Support?

MR. J. BYRNE: Under Executive Support Services,

page 266.

MR. REID: Felix.

MR. CROKE: Workers compensation.

MR. REID: Workers compensation?

AN HON. MEMBER: Reduction.

MR. REID: Workers compensation reduction.

MR. J. BYRNE: That is claims under workers

compensation?

AN HON. MEMBER: (Inaudible).

MR. J. BYRNE: Alright.

MR. CHAIRMAN: I will recognize Mr. Smith.

MR. SMITH: Thank you, Mr. Chairman.

There is just one area I wanted to speak to

briefly, Mr. Minister, and it was raised by the Vice-Chairman in his opening

remarks, and that is in regard to the community water services. Perhaps the

biggest concern in my district right now is with regard to services provided by

local service districts, and these are primarily trying to provide or maintain

community water supplies.

In the short time that I have been in this

position, that has occupied a tremendous amount of my time. I think right now I

have something like six or seven local service districts that are vying for some

assistance in this area and, as was pointed out earlier in the budget this year,

we are looking at a major reduction, which means that obviously there is very

little that is going to be coming to these communities this year. I am just

wondering, in terms of the department and its thinking, where do we go and what

do we do with these local service districts?

The reality is that they do exist. They are not

going to disappear tomorrow, regardless of the situation with the rural economy,

and the concerns are serious. I visit these communities, and in recent years,

most of them are now on their own sewer systems on land, which means all of a

sudden the shallow wells that they have been using for years are no longer

suitable. Some of the communities in my district, it is just not possible to get

water from the traditional shallow wells. It is a real concern.

I am wondering, in terms of the department's

thinking, where are we going to be going with these... I know, from talking to

you before, it is a concern of the department, but where are we going to be

going with regard to these local service districts?

MR. REID: Let's hear a bureaucratic point of

view on this, Gerald. I want Clarence to answer you on that.

MR. CHAIRMAN: Mr. Randell.

MR. RANDELL: Thank you, Mr. Chairman.

Certainly we do not perceive and we do not support

a concept there are going to be major reductions, but I think the reality of the

day is what causes these situations to evolve. I think also you will find that

there is a great deal of concern expressed by municipalities, of which there are

a much greater number than local service districts, over the lack of funding,

which has already been enunciated here, available to municipalities, for which

they will pay, and their concerns expressed relate largely to the fact that with

local service district committees, these constitute largely and directly plans.

I think the major concern, the major issue here, is

what does the future hold for local service districts and local service district

committees? The area which has now currently been explored by the department,

particularly with the minister, is the concept of regional councils. If you

familiarize yourself with the Municipalities Act, local service districts and

local service district committees are supposedly creatures of regional councils

ultimately. They act in an advisory capacity. The regional council would be the

body responsible to generate

a) the revenues, and

b) put forward the proposals

to government to fund water and sewer and other basic necessities in local

service districts.

I think the key to it, which is what the

municipalities have expressed concern with, is that under that scenario then

local services districts, or I should say, people living within these local

service districts, would contribute on a comparable base as municipalities do

with the provision of these services. I don't think anyone would argue the fact

that under the current set-up $450,000 is certainly not adequate in terms of

funding required for local service districts, but I feel the same argument would

definitely hold water in relationship to capital funding for municipalities as

well, in view of the demands.

MR. SMITH: You say the concept of the local

service districts is developed and was envisioned in terms of the larger

regional council. Where is the department in terms of its thinking with regards

to regional councils?

MR. RANDELL: Maybe you should comment on that,

minister.

MR. REID: We've done our assessment of Fogo, we

have our reports back on Fogo Island. There is a paper in the system right now

that will ultimately go to Cabinet and ultimately I suppose show up in the House

of Assembly. We are hoping to have a regional council set up in Fogo Island - I

think we are looking at a projected date of June 1 for the first election out

there, I believe. So by June 1. We have a committee working almost on a daily

basis - in fact, before I came over this morning we had a meeting strictly on

the regional concept. We are looking at areas of the Province now that we can

concentrate on.

One of the recommendations by the way from the

Federation of Municipalities and a number of towns that have been advising me on

the regional concept is that: If we are going to do it, Reid, make sure that you

get out as the minister into rural Newfoundland and in Newfoundland and talk to

councils in specific areas. Talking about spending money again. Talk to councils

in specific areas and see how they can feel so they can have an input into the

development of a regional concept.

Honestly? We are striving as a department to have

the regional concept introduced in as many areas as possible. There are areas we

can't do it. But as many areas as possible within two years. Hopefully by the

end of this year there will be a number of other areas besides Fogo that will be

taken in under a regional council.

MR. SMITH: So under this arrangement - what

happens to these communities in isolated areas? They don't lend themselves to

this sort of arrangement.

MR. REID: They will be represented on the

regional council and they will be basically run then on a regional basis rather

than on an individual basis. They will maintain their own autonomy and their own

communities and their names and some of the services that they have, but

generally the services provided to local service districts, like water and

sewerage, snow clearing, road construction, anything that goes on in the area

will be controlled then by the regional body. I'm not going to hide this from

you. The regional body will then have the right to tax those people living in

the local service districts for the services being provided to them. They will

have to pay.

MR. SMITH: In terms of, Mr. Minister, your

discussions to date, how well received is this concept?

MR. REID: On Fogo Island - and I will be

particular about that one - there are two local service communities on Fogo

Island, and they weren't too fussy about it. They've since, as far as I know,

come on side. They are going to elect now a representative to sit on the

regional council for Fogo Island and I think it will work out.

Going around the Province in the past year, two

years, most incorporated municipalities will say to you: It's time.

You see, the problem - and Clarence referred to it

a few minutes ago - that somebody living in an incorporated community, paying

eight or ten or twelve mil rate water and sewage taxes and so on, the same

question you asked a few minutes ago, is that those local service districts and

unincorporated communities are looked upon as communities getting everything for

nothing. Because the Department of Transportation provides the snow clearing for

them at no cost, in comparison; they have garbage collection; they have, in some

cases, street lights, and the government provides recreation funds for them. So

there is a little bit of a conflict between one community and another, one that

is incorporated or not. So, overall, the Federation of Municipalities and the

incorporated communities of the Province think that the regional concept is an

excellent idea. I can't say that for the local service districts.

Thank you, Mr. Chairman.

MR. CHAIRMAN: Thank you, Mr. Reid.

If the committee would permit me a question to the

minister before I recognize Mr. Carter, I was interested in the question that

Mr. Smith asked concerning local service districts. I have an anomaly, I feel,

in the district I represent, in that, in the case of communities like Grey

River, Franois and McCallum, I don't know how you could put them under a

regional board. They are separated twenty miles apart down the coast. Each of

them will be maintained as separate entities. I wonder, what is the opinion of

the department as to how they plan to handle those communities in the future?

MR. REID: David, that is not the only area. You

take the Labrador Coast, for example; there is no way that we are going to be

able to introduce a regional concept to a number of areas, especially on the

South Coast. There are areas of the Northeast Coast where it is going to be

useless for us to do it. We have identified those areas, and we could end up

with as much as between 80 per cent and 90 per cent of all the communities under

the regional concept, but there will be a large number of communities like the

ones you referred to that will have to still make it on their own.

MR. CHAIRMAN: And there will be funding

provided through the department for those on an individual basis; is that my

understanding?

MR. REID: Oh, yes, definitely. We will still

have our water and sewerage projects, and other things made available to those

communities; of course, we will.

MR. CHAIRMAN: Thank you, Sir.

Mr. Carter.

MR. CARTER: I want to raise the same issue that

Mr. Smith raised -in fact, that is why I am here this morning - because my

district is probably unique, in that about 84 per cent of the communities in

Twillingate district are unincorporated. We have four incorporated towns,

Twillingate, Crow Head, Summerford and Cottlesville, and in recent years these

four communities have done very well. Mind you, there is still a lot that needs

to be done, but they are catching up.

The problem that I have, that I find it difficult

to rationalize, notwithstanding the defence offered by the minister, or at least

the suggestion, that maybe some of these communities are getting a lot for

nothing, or words to that effect, but I find it difficult to rationalize the

reduction this year in, I think it is called the Community Services vote.

Now, I know there is some revamping that needs to

be done. I think the whole system has a lot of weaknesses in it, and I think the

government, at some point in time, is going to have to address some of the

problems, but the fact remains, with respect to people living in those

communities where we don't have any kind of tax base, or any organized municipal

government, these people still need help. I can name probably a dozen

communities in my own district where I would have to think twice before I would

drink some of the water that is being supplied in those communities, and

certainly the sewer disposal facilities leave a lot to be desired also.

Quite frankly, I am disappointed that the vote is

reduced almost in half, gone from $900,000 down to $500,000, and it seems to me

if we are going to initiate - call it what you want - a regional concept or

whatever, I think we should have maintained the vote at its status from previous

years and then hopefully, before too long, have a proper system in place.

I'm wondering what hope we can offer people living

in those communities. I have to go my district periodically and I have to talk

to local service district councils and citizens there, and invariably the

question of the inadequacy of their water and sewer services is raised. I quite

frankly don't know what to tell them. I know they are not paying very much in

taxes. In fact, I suppose in some communities they are not paying anything. But

I wonder whose fault that is. Should we not take a look at it and - force is not

the word, maybe, but certainly point out the advantages in becoming incorporated

and hope that maybe they will see the advantages and offer to become part of an

organized municipal government. I'm wondering can the minister tell me, what

hope is there for people living in those small communities. Is there something

in the wind? Is there a plan now being formulated that maybe we can tell them

about, at least give them some hope.

MR. REID: The only plan that I know of, Walter,

to be quite honest about it, is the regionalization concept. That plan, in

itself, is trying to, I suppose, through efficiencies, make it as easy as

possible on communities, both incorporated and non-incorporated, in the

Province. The argument that the local service districts will suffer doesn't hold

weight with me, because as government continue to reduce funding to

municipalities overall then all communities, I suppose, not only local service

districts, will get less and less.

I am not sure at this point in time that it is as

bad out there as some people say it is in rural Newfoundland. I can make

available to you a number of studies that have been done in the Province, i.e.,

fisheries downturn as it relates to the economy in a community, and our

specialists and people can't find a relation, can't find a correlation, between

downturn in the fishery and problems with municipalities with regard to their

tax collections and taxes collected and so on.

There were communities in your district, Walter,

that haven't received one cent in local service district money in years. You

have always got a share of it, I suppose, over the years but there had to be

areas where you didn't spend any money. What are those people doing? What are

they surviving on?

MR. CARTER: These are the people in whose

behalf I speak this morning. They haven't received any; that is not to say they

haven't applied for money and funding.

MR. REID: No, that's right.

MR. CARTER: Therein lies the problem. The needs

are so great out there that - last year in my district I did very well, and I'm

grateful for it. I believe we got close to $100,000 out of a $1 million budget,

which is not bad, but that is only scratching the surface. If we are going to

encourage outport Newfoundland to remain viable, then we have to find some way

to help those people. The larger centres are reasonably well looked after. But

there is so much catching up to be done in the small have-not areas that I dread

to think what is going to happen and where the money - for example, Virgin Arm,

Carter's Cove, in my own district, as Clarence knows. You are talking $3 million

or $4 million there for a water system. I believe the study that was conducted

by your department indicated a fantastically large amount of money needed. I

quite frankly don't know where that is going to come from. I don't know how we

can even justify spending that kind of money.

The question - my time is probably running short.

I'm wondering, Mr. Minister, if we are not imposing cadillac systems on

communities. I will give you one example, Crow Head, in my own district. Because

of the aggressiveness of the late former Mayor of the town, Walter Elliott, Crow

Head had a water and sewer system installed - how long ago, Clarence, twenty

years ago? - at a very minimal cost, done through a lot of make-work and LIP

grants, and little federal subsidies and provincial subsidies, but I say to you,

with all of the regulations that are being imposed, and requirements and so on,

Crow Head could never afford that system today, and I suspect that if an

inspection were done, from a technical point of view, the system they have there

now should not be working, probably, because it was done without any

professional supervision, as far as I know, maybe an engineering technician, but

I am wondering if we are not imposing too rigid a restriction, cadillac systems,

on some of the smaller communities, Herring Neck, in my own district, Carter's

Cove, and I can name twenty communities in my own district. I don't think they

need the expensive and costly engineering plans and supervision, and all of

that. There is a lot of ingenuity out there in rural Newfoundland that is not

being tapped. In the case of Crow Head, it was tapped and put to very good

advantage, and the people in Crow Head today are benefiting from it.

I guess the question I am asking, in a roundabout

way, is this: Are we maybe imposing too rigid requirements on some of those

smaller communities where water and sewer systems are badly needed?

MR. REID: Well, if we are, Walter, it comes

down to the finances again. If we are imposing too rigid requirements, it is a

question of the vote that government jointly sits around a table and decides to

give.

You know, Walter, that when I went to do my

estimates in Cabinet, I fought to hold on to the local service district money

and a number of other things, but it comes down to whether or not we can afford

to keep going. We have to save. You know; you sat in Cabinet for five years, and

every year you were there your budget was cut, and every year I have been there,

I have been cut as well. Where do you go?

You said something earlier that I wanted to pick

you up on. Are you suggesting that in the case of the wealthier towns in the

Province, we should reduce capital or monies to those towns and give it to the

poorer ones?

MR. CARTER: I don't get your question.

MR. REID: You said earlier that there are a

number of communities in the Province that can afford, the St. John's of the

world, for example.

MR. CARTER: No, I don't recall having said

that.

MR. REID: Well, you did. You made a comment

about maybe we are giving larger towns -

AN HON. MEMBER: (Inaudible).

MR. CARTER: May I just give one more little

example - this is a good one - to make my point.

MR. CHAIRMAN: By leave.

MR. CARTER: Am I permitted?

Tizzard's Harbour has a water and sewer system, a

good one. Last year, they rebuilt the road, and the engineers from the road

building department said, `You are going to have to relocate your water line

because we are going to disrupt it.' Your department gave them an estimate, had

an engineering plan done, or whatever, and they said, `It is going to cost

$40,000 to divert that water pipe, and we don't have the money, so good luck to

you.'

The chairman of the committee there took the

initiative to talk to a contractor - $40,000 plus the cost of the pipe. That

contractor relocated that pipe and provided the pipe for $4,200. That is 10 per

cent of what... Now, this is what I mean by cadillac. I can't seem to understand

why that would have happened, quite frankly. I don't expect you to have the

answer, but certainly it is something worth looking into, and I think your

Gander officer can probably give you some information on it.

MR. REID: It would be interesting to see the

answer, Walter, to tell you the truth.

MR. CARTER: It would be. I would be interested.

In fact, I -

MR. CHAIRMAN: (Inaudible).

MR. CARTER: Well, I think there is an answer

required, because it is difficult to rationalize that.

MR. CHAIRMAN: I now recognize Mr. Fitzgerald.

MR. FITZGERALD: Thank you, Mr. Chairman.

Just to get back and, I suppose, continue on the

thoughts of regional governments. Mr. Minister, do you feel that the regional

government concept is going to save us money or do you think it will work much

better? Why the idea of regional government? It certainly can't be a positive

thing in every area of the Province. You have heard several stories here this

morning of areas where we feel it won't work, and I'm certain it won't work in a

lot of areas in the district I represent. Because if the people don't have the

money to pay for the services they don't have the money. Whether you put a

regional government there or whether you continue to cater to the local service

districts or the local town councils, it doesn't make any difference, the money

is not there.

I don't see why we are always waiting for this new

form of government to take place before we can go out and do something. Or at

least let's tell the people the truth and say: There are no such things as

artesian wells anymore, there is no such thing as a filter for your water

system, unless you pay for it. Regional government is not an option in a lot of

the areas.

MR. REID: Not an option in a lot of the areas

but certainly down in your area - I can see a regional council down in that

area. The regional council concept is not to provide extra money, it is to use

the money available there now, what is being collected, and use it in a wiser

way. For example, out in our area - John Efford's, John Crane's and mine - there

are thirteen fire departments in less than twenty miles - thirteen fire

departments. Each one of them has as many as - Harbour Grace, Carbonear and Bay

Roberts, I think, have four trucks. In fact, I know Carbonear has six trucks.

MR. CRANE: Harbour Grace has no truck.

MR. REID: Well, Harbour Grace has a building

out there full of something. The idea is, can a regional council help save money

in an area, like coming together with a fire department? I will give you another

example. The Conception Bay North incinerator is an incinerator located between

Harbour Grace and Carbonear where all the communities from Salmon Cove to Brigus

bring their garbage. That is working. It is a co-operative area and everybody

pays on a per capita basis for the area.

Sand and salt: We did a survey out there last year,

and there are four distributors of sand and salt in Conception Bay - four

different distributors of sand and salt, four different prices for sand and

salt. Couldn't the communities of Conception Bay North come together and tender

on a total package and possibly get a reduction in the cost? I'm talking about

saving money which in the end then could go towards providing services in some

of the local service districts, with the few dollars maybe that the government

will have to contribute to it as well. I'm not talking about saving money for

the government, I'm talking about saving money within the municipalities, so

that people can stay in rural Newfoundland.

I will be honest and say this to you: If we don't

try, as a government, to do something like that, what would you suggest we do?

What do you suggest we do? Go out and tell these people what you said, that: I'm

sorry, we are going to cut you off, we are not going to clear your roads

anymore? We aren't going to provide ferry service to you? This government have

no intention of doing that, and you know they don't. Rural Newfoundland -

MR. FITZGERALD: That is what you have already

done in places.

MR. REID: No, we haven't done it -

MR. FITZGERALD: Yes you have.

MR. REID: We haven't done it any more than any

government has ever done it in the Province. Based on the amount of money that

we have to survive with on a yearly basis, we do the best we possibly can. I

don't think for one minute that rural Newfoundland is going to go. In fact, I

think if rural Newfoundland suffers in any way the rest of the Province will

suffer. St. John's is maintained on a daily basis by people coming into this

city from around the bay, and don't tell me it isn't because I know it is. It is

the bay that is going to keep the rest of the Province alive. I don't accept

that.

MR. FITZGERALD: I don't know where the money is

going to come from in the lower part of the Bonavista Peninsula. Because you can

look at both of the districts there, and every one of the communities today are

taking away street lights, cutting back on services, no road clearing, no road

construction. There is no money there to do anything with. Whether you put a

form of regional government there or you maintain them as they are, there still

has to be an infusion of government money. The money is not going to appear

because all of a sudden there is a form of regional government. The money has to

come from government in order to put the dollars there to create things and to

upgrade some of the services they have.

Getting back to what I think was your question to

Mr. Carter, when you asked him if he would go along with the idea or if he was

proposing that some of the larger centres might very well be exempt from capital

funding from government, and I agree with that. Why should government - there

goes the avalanche - Mr. Chairman. I don't understand why government have to go

and direct large amounts of capital grants to the City of St. John's if they can

afford to maintain their own infrastructure. Why can't it be spent in rural

areas? And if you don't agree with that concept, then I don't see how we can

to us. It reflects and ciphons all the way down the tube.

The cadillac water and sewer systems referred to

earlier have certainly got us into trouble. Down in my district (inaudible) and

Plate Cove East, in excess of $1 million was spent there on a water supply, a

cadillac water supply for which they can't even afford to buy chlorine. As

things happen there, they go out and they disconnect it; somebody has to go down

there in the morning now and turn on the pump and fill up the tank until it

starts running over and they have to go back again in the evening when that

happens and turn it off. There are so many leaks in the lines that they can't

maintain pressure and can only use it for certain hours of the day, that's

because there was a cadillac water system put in there where, probably two or

three artesian wells might have provided them with an ample supply of water and

a much better supply than they have today.

Mr. Minister, also, you talked about the mil rate,

somebody coming in and you were embarrassed by the three mils that they were

being charged. Well, that might very well be a reflection of the services they

have. I heard the former Minister of Environment get up here when she was

addressing the Throne Speech, and talk about the great need in her district, and

the great need was sidewalks and street lights! My god, I wish she would come

down to rural Newfoundland and see some of the needs that are out there.

You know, people are not opening their minds or are

not getting out and seeing the need that is out there and I think that is what

we are lacking here today. And I suppose the biggest change that has come about

from rural areas, Mr. Minister, is the change in the formula and the way that

government get back their money from the infrastructure that was put forward in

communities.

At one time - and you can't blame municipalities

for doing it - at one time they would go after government money and all they

would be expected to pay, I think, was 20 per cent of their gross revenue, and

then all of a sudden this formula was imposed on them and they find themselves

in dire straits and in order to come forward and be considered for

infrastructure money, now, you, Sir, have said you must pay this over a

four-year period, and I am wondering if that can't be looked at again? I know

there may not be a lot of money left there, but you must also realize that some

of those communities just can't pay the money they owe for the last twenty or

twenty-five years in four years.

MR. REID: They are happy enough to take it

though, aren't they?

MR. FITZGERALD: I beg your pardon?

MR. REID: They were happy enough to take it.

MR. FITZGERALD: And you can't blame them for

that, because at that time they could afford to pay it because it was only -

well, you can't blame them, the money was pushed at them and they were told:

`Here is the money for you, you are only expected to pay back 20 per cent of

your gross revenue,' and I would have taken it as well.

MR. REID: Where do you stop? Where do you stop

giving it to them?

MR. FITZGERALD: Well, what you are saying is

that maybe you should have stopped giving them -

MR. REID: When does a government say to a

community: Boys, you are up to your necks in debt and we can't give you any

money; you are suggesting that you don't worry about that, you drown

(inaudible).

MR. FITZGERALD: No, I am not. I am suggesting

that you take a longer period for pay-back, where other areas or other

communities could probably take advantage of the infrastructure money. Instead

of doing it over four years, maybe, if you could see that they were making an

honest effort to pay - and you can see that, I mean you review their budget

every year.

MR. REID: That's right, and the ones who will

not get any funding this year have come in to me and said: Here's what we are

going to do, here is the length of time we want to repay it, we are going to

make the first payment next week and they never show up again.

Bonavista is a prime example. Bonavista made a

commitment with me last year, signed a deal last year, just to avail of over $1

million in infrastructure funding. The day it was announced, you went down and

announced it, Bonavista said: to hell with the provincial government, and I have

not heard tell of them since.

Now, you tell me that I should go to any community

in this Province, representing this government, and set up deals like that, set

up deals around the Province where then municipalities are going to come back to

me and tell me straight where to go, and you have one there in your district.

MR. FITZGERALD: Mr. Minister, you are not

exactly telling the true story there. You know very well that the town of

Bonavista have increased their taxes this year in excess of $200 to pay back the

commitment they made to you when they got that $600,000.

MR. REID: Well, why haven't they done it?

MR. FITZGERALD: Well, they have just passed

their budget into you for approval, where they have increased their rate from

6.5 up to 8 mils. They have increased their poll tax from $135 to $175, and they

have increased their water and sewer, I think, from $10 a month to $20 a month,

which is a huge tax hike in one year, and because of that the people down there

are parading in the streets saying that they have been treated wrong. The

council is being responsible and they are living up to their commitment.

MR. CHAIRMAN: Does the minister want a minute

for rebuttal to that?

MR. REID: No, it is too long a rebuttal.

MR. CHAIRMAN: Okay, fine, your time is up.

I now recognize Mr. Crane. When Mr. Crane is

finished there is coffee in the government member's room, so we will then break

for ten minutes and you and your officials, sir, and the members of the

Committee can mingle over coffee and discuss some of the things we did not get

here. I will ask the clerk to make sure that she gets us back here at 10:30, so

Mr. Crane your on and the length of time you take cuts into your recess time.

MR. CRANE: This will not take long then, Mr.

Chairman. First of all I though you had something against me this morning.

MR. CHAIRMAN: Not likely.

MR. CRANE: You passed me a couple of times, and

then Gerald Smith said you could not see me, and I said if he cannot see me then

he had better get his glasses changed because there is really something wrong

with his eyesight.

Before I ask a question, Mr. Minister, I would like

to say that wherever Jack Byrne is plugged in for his cable, he must have an

inside track somewhere for $4.00 or $5.00 a month.

AN HON. MEMBER: He is a buddy with Danny

Williams, I guess.

MR. CRANE: He must be a buddy of Danny, yes.

Anyway, on that property assessment, I notice you

did not increase the budget in the assessment department this year very much,

$100,000, and that will not do much for anybody. We have towns in our area that

are behind ten or eleven years, that have not been assessed. The year before

last I went to the minister and he said: we are coming up with a computer system

now and everything should be ready by next year. Then last year the computer

system still wasn't ready and we are about ten or eleven years behind. Is the

computer system up-to-date and will we get our towns assessed and reassessed

this year?

MR. REID: Let me tell you what happened, John.

We were going along fairly well and we were ready this year to go out and do

some new assessments and some reassessments. If you remember I brought in a

piece of legislation earlier this year that caused some uproar from among some

of my colleagues and some others who sit on the other side, and that was to

exempt equipment from assessments in the Province, in buildings and in

businesses. We were going to exempt equipment, that was the bill, but there was

that much of an uproar over it from the Federation of Municipalities and a

number of other communities that they convinced the government - and I give the

Opposition some credit there, especially the Member for Labrador City, they

convinced the government to postpone that for one year but there was one

problem. We had already done our assessments in all the major areas of the

Province and had excluded equipment from the assessment role. When we postponed

that for one year we had to go back, John, and do a number of reassessments in

those communities that we had already done. We are now behind this year by six

months.

MR. CRANE: Six months?

MR. REID: At least six months. So, John, what I

said last year was I was hoping at the time that it would happen and I was

hoping the year before but we are behind right now at least six months in

regards to what we would have picked up. Now I know that Don probably can make a

comment on it, maybe I will ask him because he is on top of it on a day to day

basis. In regards to the assessment though, John, and the amount of money, it

was last year that we hired those extra people. We hired eight new people last

year so you are not going to see a reflection in the budget this year of that

because those people are already hired.

MR. CHAIRMAN: Don Peckham.

MR. PECKHAM: Mr. Chairman, the new assessment

system, computerized system, is on-stream and running. The only thing is, all

the data that was compiled initially in the old system all had to be converted,

all 160,000 copies in the Province. That is being done on a rotational basis as

the reassessments are done in each municipality. So that is taking up a lot of

work, a lot of time and it will be done over the six year cycle. As each

municipality is done, reassessed - they are done on the new basis and then put

into the computer and will be done that way. So about 40 per cent of the

municipalities are converted now and in. The rest will happen over the next

couple of years but not withstanding that, there has been a catch up happening

over the years except - as the minister just pointed out - for this year because

of the workload having to do with the equipment, that there has been a gradual

catch up with those communities who wanted first time assessments being done but

there will be about another years delay. I think there are twenty-three

municipalities waiting for first time assessments.

MR. CRANE: Yes, I have one waiting for the

first time assessment in my own community, it must be ten years now since it was

reassessed. What the council has been saying to me and rightly so, is that they

raised their taxes a couple of times and now it comes in - I say over an eight

or ten year period that taxes are going to jump another great hike and people

are going to go off their heads I suppose like they do everywhere else.

MR. PECKHAM: Yes, there should not be any one

ten years old, the oldest one should be six years, maybe seven. There are a few

there seven years old on reassessments. Generally speaking, they were done on a

six year cycle. Some of them slipped back to seven.

MR. CRANE: You check on Upper Island Cove for

me and get back to me will you because they are telling me that it is ten years

or more? So give me a check will you Mr. Peckham, and give me a call?

MR. PECKHAM: Yes, okay.

MR. CRANE: Fire fighting equipment: the

minister keeps insisting we got too many fire departments out in our area and I

suppose we have enough fire departments but he refers to Harbour Grace with two

or three trucks. Well Harbour Grace is one town that has neither truck right

now. They got part of a truck in 1972 and when I look at the amount of money

there for fire equipment this year, it is kind of sickening and I am sure they

are not going to get a fire truck out of that, I am definitely sure.

MR. REID: Well they might, John. They might be

lucky enough to be the one that is going to be done this year. Maybe the

minister should insist that that one be done -

MR. CRANE: Yes you should.

MR. REID: - but then I will have everybody, the

other fifty-one members coming after me.

MR. CRANE: Pigs might fly he said but they are

unusual looking birds.

Last years budget for the infrastructure program

showed $35 million budgeted and the revised showed $19.7 million, is that what

you spent?

MR. REID: I am sorry, say it again?

MR. CRANE: Last years budget for

infrastructure, the Newfoundland Infrastructure Program showed $35 million was

budgeted and $19.7 million was spent, is that right?

MR. REID: No, that is our money that we had to

budget for contingencies. I am going to let Clarence explain that to you, but

that is really misleading.

MR. RANDELL: Mr. Crane, what you see in the

budget is actual dollar pay out by the Province which represents;

a) the federal

contribution, one-third, which is then recovered from the federal government -

you will notice a net out effect there -

MR. CRANE: Yes.

MR. RANDELL: - and also the direct... I will

call it cash contributions for projects with a value less than $100,000. The

projects which cost in excess of $100,000 are financed by way of long-term

debenture, through the Newfoundland Municipal Financing Corporation.

Consequently that would not appear in the budget.

MR. CRANE: I see.

MR. RANDELL: In actual fact the total outlay on

the infrastructure program last year, there was $123 million in committed

projects. Of that amount there was approximately $60 million to $65 million

spent, and there is a remaining roughly $55 million to $60 million to be spent

this year, in addition to any projects that are approved in the current year. So

these figures do not indicate (inaudible).

MR. CRANE: Okay sir. That is good enough. We

will have coffee, I think.

MR. CHAIRMAN: We are going to break now till

10:30, so you are invited to have a coffee and mingle and then join us back here

at 10:30.

Recess

MR. CHAIRMAN: Order, please!

I recognize Mr. Byrne.

MR. J. BYRNE: Thank you, Mr. Chairman. It seems to

me I have a lot of questions to ask and I don't know if I will have enough time

to get into them all. Just specific questions with respect to dollars and cents

and changes as I was mentioning earlier. But there are a couple of things I want

to get into now before I go too far, more generalized things.

I want to talk a bit about the regional concept again.

In particular, with the northeast Avalon with respect to what is planned on the

northeast Avalon, and some comment on amalgamation versus regional government;

and the approach that will be taken with respect to - will it be the same type

of approach that was taken with respect to amalgamation, with respect to forcing

it, and/or being dictated to. In particular, the benefits. Because when

amalgamation was being discussed there were never ever any specific benefits

being shown to the towns. Of course, you know where I stood on that at that

point in time. I was opposed to it because there were never ever any specific

benefits told to me dollars-and-cents-wise to explain the pros of amalgamation.

I would like to see the comparisons between amalgamation and regional

government.

Taxes. You mentioned that the regional government or

governments, or whatever you want to refer to them as, would be permitted to

tax. Would those taxes be over and above what the municipalities in that

regional government would be taxing? Would the towns involved in a regional

government be required to reduce taxes in a given area if the regional

government took over responsibility say for garbage collection in five or six or

seven towns? That type of thing. I would like to have some response from the

minister on that, and/or the Deputy Minister.

One other comment on that one before I get too far. I

mentioned earlier about centralization, I believe. Is this just another form of

centralization? It wouldn't be so much (inaudible) on the northeast Avalon

because we are pretty close to St. John's now, but if you take an area say on

the northeast of the Province fairly distant from Gander and/or Corner Brook,

whatever the case may be, would they get centralization because of regional

government? Is that the ultimate goal?

That is a number of questions in one, I know, but....

MR. CHAIRMAN: Mr. Minister.

MR. REID: The comment on amalgamation versus

regionalization. I prefer to say regional council rather than regional

government. Because as soon as you mention the word "government" all these flags

go up and say: Not another form of government, we are governed to death in

Newfoundland. We have enough government now. So we have no intention of setting

up that entity as a government.

MR. J. BYRNE: What is the difference between a

council and a government?

MR. REID: Here is the difference. Let me tell you

what we see. Now, when I say that I am being serious in saying that what the

people in a particular area see themselves might be totally contrary to what we

see, and if that is it, sobeit. The decision of the type of structure, regional

council that will be set up, will be determined by those people representing

those towns in the region. We are not going to go out and impose an idea of

regionalization, our concept of regionalization, on municipalities. It will be

left entirely up to them.

There is a great difference between amalgamation and

regionalization. Amalgamation, basically, wrapped its arm around a number of

communities, and a council, then, dictated how much the tax rate was going to

be, and the services that were provided, and everything that went along with

basic community councils. The regionalizational concept is entirely different.

I see a regional council as the members of a regional

council representing communities in that region, so Jack Byrne would sit as the

member representing, let's say, Torbay, on the regional council. The regional

council then, the types of services that they could provide could be regional

fire services, for example, on the northeast Avalon; it could be waste disposal.

In St. John's, for example, on the northeast Avalon, the water services that are

provided on the northeast Avalon come from - most communities, or most people

living on the northeast Avalon are serviced by the St. John's watershed. Maybe

that could be taken over. Maybe the stadiums in an area could be taken over -

maybe; I am saying maybe - and operated on a regional basis.

The communities, as such, will maintain what they want

to maintain. If the Town of Carbonear is part of a regional council of

Conception Bay North, it will be up to the Town of Carbonear to decide what

services they want to put over on the regional council. It is entirely up to

them. The council in Carbonear - and I have to use that, or Harbour Grace,

because that is what I am most familiar with - would then still operate and

collect taxes the same as they are doing now. They would provide services like

street lights, possibly snow clearing. They would provide recreation services,

smaller recreation services. Carbonear may have a stadium. Carbonear may wish to

take that stadium and pass it over to the regional council.

You said: What would happen to taxes? Would a regional

council have authority to tax? And the answer is yes, but only for services

provided outside of incorporated areas. They would have no authority to go into

an incorporated town and tax that incorporated town. The areas in the district,

or in the region, would definitely have to be taxed. Local service districts,

for example, if they are going to provide snow clearing and fire services and

garbage collection and street lighting for local service districts, they would

have to charge the residents of the local service district a reasonable fee to

provide those services, but certainly not in Carbonear or Harbour Grace or these

places.

MR. J. BYRNE: So if a regional council was set up,

say, in the northeast Avalon, down my way, and the council was going to be

responsible for waste disposal, and a particular town did not want to partake of

that service they could continue on themselves until such time as they felt it

was...

MR. REID: Exactly, because it would be you, as the

representative and, I said a few minutes ago, representing a particular town,

who would sit on the regional council. They would not have the authority to be

able to come in and say: Now, here is what we are taking over, contrary to what

the towns are saying they want taken over.

The bottom line is, when we go in and start talking

regional councils we are going to ask the councils and the people in the area:

how do you perceive a regional council and what types of services, for example,

could a regional body maintain and operate? We have a regional body in

Conception Bay North now called the Conception Bay North Incinerator Association

and it works beautifully. All they do is, send a bill to the municipality of

Carbonear and Harbour Grace each year on a per capita basis for taking their

garbage, and it works. There has not been a problem with it from day-one. That

is the idea of the regional concept, but if Carbonear did not want to take

part

in that, did not want to take

part in the incinerator, for example, Carbonear

would then have to go to government, or wherever, and ask for permission to set

up their own dump site.

MR. J. BYRNE: So there would be elected

representatives on that council?

MR. REID: Elected or appointed.

MR. J. BYRNE: Appointed from the towns?

MR. REID: That is going to be entirely up to the

people of the region, and I am stressing that, it is entirely up to the people

of an area. For example, if you have an area with one arena, should the people

of that community that the arena is in be paying the full shot for that arena?

MR. J. BYRNE: That is a good point because that is

the next thing I wanted to bring up, and that was a plug for the application I

made on the infrastructure program which was the five towns coming together to

cost-share a facility which is truly a regional facility.

MR. REID: And that is the regional concept.

MR. J. BYRNE: When I was the Mayor of Logy Bay -

Middle Cove - Outer Cove, we approached Torbay - Pouch Cove - Flat Rock for an

animal control officer which we got in place. All this to me is happening by

natural evolution anyway but there is nothing wrong with encouraging it.

MR. REID: By us talking about regionalization that

is all we are doing, we are encouraging co-operative efforts to save some money

for these towns so they have more money to go out and spend on their roads.

MR. J. BYRNE: I can see the benefits but I think

it is going to have to be clearly explained to the municipalities involved, the

benefits, because that is not the approach that was taken with respect to

amalgamation. They never did see any benefits.

MR. REID: The services that are provided them by

the regional council will be billed back to the town, each town on a per capita

basis. That is how we see it, so then everybody in a particular area will

contribute to a facility or a service that is being provided to everyone in an

area, rather than just one community having to pay the shot for everything.

MR. J. BYRNE: Well, I would suggest that a good

example of that would be an arena in the northeast Avalon with five towns coming

together, a good plug for your proposal.

I have a situation with respect to what Mr. Carter

brought up, and that is, what is being done to encourage the rural communities?

I do not know if there is a lot being done. Down in Flat Rock, for example, last

year I approached Municipal Affairs because there was a problem down there with

sewerage and nine wells being polluted. They do not have water and sewer but

they have $500,000 in the ground now for a system that does not service a house

at this point in time, and they are paying $35,000 or $40,000 a year back to

Municipal Affairs. There are nine houses down there with wells that are

polluted. I asked Municipal Affairs for some assistance but they washed their

hands of it. I then went to the Department of Health who had given approval for

some of these houses to be built, and Municipal Affairs had obviously had

inspections done, and I went to the town.

I do not know what to tell these individuals down

there anymore. The government is washing their hands, both the provincial,

Municipal Affairs, the Department of Health, and the town is not taking

responsibility because they are saying the Department of Health approved them

and Municipal Affairs was involved also. Here is the problem we have so I would

like some direction as to what I can do in this situation.

MR. REID: It has been an ongoing problem and the

town has pretty well tried to wash their hands of that $500,000 system during

the last number of years.

MR. CHAIRMAN: Clarence, do you want to react to

that?

MR. RANDELL: Mr. Byrne, the only involvement our

department would have had with respect to these new housing units would be

simply the pressure that the council brought to bear to rezone the area to

permit the residential dwellings to go there, but surely there should have been

some controls with respect to how they went there and the services provided?

Presumably Health would have inspected and issued the

necessary approvals if it was suitable for a well and septic system, would they

not?

MR. J. BYRNE: Right, but the thing is, before a

town plan is approved - a town plan has to be approved by Municipal and

Provincial Affairs for that town before they can adopt it and/or use it, which -

Municipal and Provincial Affairs have to have some responsibility there - the

Department of Health approved these - some of them, not all of them, because

some were fairly old. The Department of Health had some input into it too, so

there has to be some responsibility on the shoulders of government to take care

of that situation.

MR. RANDELL: What is the council's responsibility

though?

MR. J. BYRNE: Why did the town need to come to

Municipal and Provincial Affairs for approval for a town plan if it is the

town's responsibility?

MR. RANDELL: They came to amend the plan, Mr.

Byrne, to allow these dwellings to go there.

MR. J. BYRNE: Yes.

MR. RANDELL: With the assurance that they would be

controlled development.

MR. J. BYRNE: Municipal and Provincial Affairs has

to approve the plan, and ultimately the responsibility is back to Municipal and

Provincial Affairs for approving that plan in the first place. The town only

applies the regulations.

MR. RANDELL: The town requested the regulations.

MR. J. BYRNE: Anyway, getting on.

MR. CHAIRMAN: Your time is up, Mr. Byrne, but in

view of the fact that there is nobody else there I'm prepared to recognize you

again. Before that I would ask the minister - I understand his officials from

Newfoundland and Labrador Housing Corporation have now arrived, so if you would

introduce them so we will have them in the records of this meeting. Then I will

recognize Mr. Byrne.

MR. REID: I have Robert Noseworthy, who is

Chairman of the Housing Corporation, and Ed Heath is our vice-president of

financial administration. I've done it, Mr. Chairman.

MR. CHAIRMAN: I was in a side conversation, so

you've done it. Now Mr. Byrne, we will give you your round again.

MR. J. BYRNE: Okay, alright. Assessments. We had a

lot of discussion on assessments, getting the towns done. I beg to differ with

Mr. Peckham. There are towns out there that haven't had assessments done in ten

years and I know one in particular. Any plans to privatize assessments?

MR. REID: Any plans to privatize? Not right now.

But as you can see in the budget there, and I notice you haven't picked it up,

but I'm going to bring it up anyway. Baker in his speech mentioned the fact that

we've got to start talking to municipalities, and we've got meetings scheduled

with the Federation of Municipalities right now. We are looking at the total

department in trying to find ways of saving some dollars, and maybe encouraging

the government, by us saving dollars in the department, maybe it can be

transferred to more monies for municipalities, or cheaper ways for

municipalities to operate. There are no immediate plans to address the question

of assessment, but I will tell you that assessment, like everything else, will

be given major scrutiny in the next three to four months.

MR. J. BYRNE: I picked up on it. I had certain

questions that would be asked in due course. I will go back to the specifics

here now for a few minutes, if I can.

MR. REID: Yes, go ahead.

MR. J. BYRNE: Page 269, Urban and Rural Planning,

under the Estimates.

MR. REID: Urban and Rural Planning, yes, go ahead.

MR. J. BYRNE: Page 269, Salaries. Last year you

budgeted $412,000, spent $869,000, and this year you have budgeted $897,000. I

just made a note here. Why would that be? When you talked about lay offs last

year, I think it was in this

section that you were talking about laying off so

many planners last year? You've changed your mind on that? (Inaudible) has

doubled.

MR. REID: Exactly. That is the reflection. The

budget in 1994 reflected $412,000. We put them back in. Remember we had it

announced. We hired those people back again which drove it up to $869,000, and

then, because of employment expenses, we are up to $897,000 this year. If you

had a previous year you would have probably found $897,000 or thereabouts in the

previous year's budget.

MR. J. BYRNE: Okay. Page 271, Waste Management

Facilities. That is

section 2.3.04. Under Debt Expenses.

MR. REID: Yes.

MR. J. BYRNE: You had $190,000 budgeted, spent

$175,000 and now you have $243,000. Can you explain that to me?

MR. REID: If I am not mistaken - and maybe

Clarence can explain it - that is basically because of the fact that last year

we put an extra $500,000 into communities around the Province for waste

management facilities, and that has basically just raised our expenditures for

this year to that amount. Go ahead, Clarence.

MR. RANDELL: Mr. Byrne, basically what it is, it

is projects that were approved in prior years that are being refinanced, and

these are the debt charges, and it reflects the increased cost to government for

the additional waste disposal facilities that were approved in, say, the

previous two years that are now refinanced.

MR. J. BYRNE: Thank you.

MR. RANDELL: This is the government share, of

course, (inaudible).

MR. REID: There is no way of controlling that. The

more money we give out to communities for waste management, and having to pay,

in some cases our share, and in even some cases as much as 100 per cent, that is

going to continue to increase as we put more money into waste management.

MR. J. BYRNE: Page 272, Services to

Municipalities, Water and Sewer Servicing - Coastal Labrador,

section 05 there,

professional services, you had $940,000 budgeted, spent $1,269,000 and have

$784,000 budgeted this year. Basically, between the $940,000 budgeted and the

$1,269,000 there is $329,000 difference spent. What would be going on there?

MR. REID: I think I can answer it, but I am going

to let Clarence answer it.

MR. RANDELL: This purely relates to the

federal/provincial agreements for Labrador. One is the coastal agreement, the

comprehensive agreement; the other is the native agreement, and funds are

allocated on an annual basis for water and sewer services in the Labrador

communities.

You will notice that the reason professional services

increase, if you look at the figure directly below that, the actual dollars

allocated and spent went up by a corresponding amount in the last year, $4.3

million up to $5.8 million, and the professional services are, of course, the

engineering and consultants fees associated with these projects.

AN HON. MEMBER: (Inaudible).

MR. RANDELL: Well, you are more in the order,

Minister, of about 20 per cent to 25 per cent in Labrador because of the cost

associated with transportation and so on in those areas.

MR. REID: So as the amount spent increases, so do

the engineering fees. You should know all about that, as mayor of a community.

Consulting engineers have a habit of making dollars on these budgets. They don't

do them for nothing.

MR. J. BYRNE: Well, I can go on further on that,

but I won't. I will just accept your answers.

Page 276, Environmental Improvements, grants and

subsidies, you had budgeted $1,693,000 and spent $1,200,000 and this year you

have $750,000. That is less than half of what you budgeted last year, and quite

a bit less than what was actually spent. Can you explain that? Is it just a cut

for the sake of cutting, or what?

MR. RANDELL: What this is, is a wind down of a

particular capital allocation provided through ACOA to fund three projects in

the Province. One was the Corner Brook Neighbour Improvement Project, one was

Placentia for the breakwaters, and the other was for the regional water

treatment plant for Grand Falls - Windsor - Bishop's Falls.

What is happening is that these projects are now

winding down, and that is the final phase of completion. In fact, Placentia was

completed last year, and there is a small amount remaining with respect to the

Grand Falls - Windsor - Bishop's Falls water treatment plant, and a small amount

for the Corner Brook Neighbour Improvement Project. These are cost-shared,

incidentally, one-third by the federal government, one-third Province, and

one-third municipality.

MR. J. BYRNE: On that same page,

Canada-Newfoundland Infrastructure Program, you have salaries - from 01 down to

number 07 - there was nothing budgeted for because last year was the first year

I suppose with the Canada-Newfoundland infrastructure program, but down here it

says: amount to be voted $40 million, it was revised $20 million last year and

was budgeted $35 million. Can you give me some explanation as to what is going

on with that whole

section there? There seems to be a lot of confusion on that.

MR. RANDELL: Mr. Byrne, what you are looking at

here, is what I mentioned earlier this morning, and is in relationship to

contracts that were awarded, work was started and not completed, so there is

about $50 million to $60 million worth of work remaining -

MR. J. BYRNE: How much?

MR. RANDELL: $50 million to $60 million, but I

again reiterate what I said earlier. These figures purely reflect the federal

share and projects less than $100,000. The remaining funding is by way of

government guaranteed loans financed on long term through NMFC, so the figure

here is not the total funding flowing through that infrastructure program it

actually only reflects probably about one-third maybe to a half, maximum.

MR. CHAIRMAN: Okay, Mr. Byrne, you time has

expired and I recognize -

MR. J. BYRNE: May I just finish this

section here?

MR. CHAIRMAN: Okay, okay if it is by leave.

MR. J. BYRNE: So, are you telling me now then,

this year, there is only $10 million budgeted for the Canada Infrastructure

Program this year?

MR. RANDELL: No, $40 million.

MR. J. BYRNE: The total Canada-Newfoundland

Infrastructure Program -

MR. RANDELL: Yes, but that is net outs against the

federal recovery of $30 million.

MR. REID: We are hoping to get $30 million from

the feds which will mean that we then will have to put $10 million in this year.

Now that figure is up and down, that could change from day to day and will be

based on a number of contracts that are awarded and completed when they are

completed, and when we get our system in place so that we can bill the federal

government and so on, so that could be up or down, that could be almost any

figure.

MR. J. BYRNE: Yes, but that $10 million is

actually new dollars, that is the only new money this year, right?

MR. REID: No, no. That's only money that we put

aside in our department to take care of our cost of programs that will go on

this year. It has nothing to do with new money at all; it is just financing

money, that is all that is, to finance these projects.

MR. CHAIRMAN: Mr. Fitzgerald, do you want to go

back again?

MR. FITZGERALD: Thank you, Mr. Chairman.

Mr. Minister, 3.3.04 on page 276 of the Estimates, and

listening to the deputy minister, he stated that the $750,000 was for the cluing

up of projects in Corner Brook, Placentia and Central Newfoundland. Is it fair

to say then since there are no other monies there, that your department will not

be looking at any improvements to environmental problems this year?

MR. REID: No, it's not fair to say.

MR. FITZGERALD: Any major improvements?

MR. REID: No, no. This is just a particular

program, a special program. Clarence, where does that date back?

MR. RANDELL: That goes back, sir, three-and-a-half

years.

MR. REID: Three-and-a-half years. This was a

particular environmental program that the Province, the communities and the feds

agreed to three-and-a-half years ago; that is just for that particular program.

There are other programs and there are other monies in waste management, in

studies, environmental studies and this sort of thing throughout the budget, in

other areas.

MR. FITZGERALD: Thank you. Departmental salary

details on page 173, states overtime and other earnings, Department of Municipal

and Provincial Affairs, to the tune of $296,300; when you are being paid a

salary, do you usually get paid overtime as well? My experience in being a

salaried employee is that overtime -

MR. REID: Where are we again?

WITNESS: Page 173.

MR. REID: Page 173.

MR. FITZGERALD: Yes. My experience of being

employed with a company and being on salary is that I never did get paid for

overtime or extra hours worked and I am wondering why just about $300,000 was

paid there in overtime and other earnings or if it is a different situation than

(inaudible).

MR. REID: As you are aware, I can't make any

overtime so it is not my money so we will just ask Mr. Randell here, where he

spent it?

MR. RANDELL: Basically, what you are looking at

there, there are overtime costs reflected there particularly in areas such as

inspections, assessments and things of this nature,

fire fighters training programs but a lot of the cost reflected there relate to

travel time more so than overtime, if they have to travel from point a to point

b and return. I think there is also, Mr. Peckham, monies provided there as well

for a specific temporary situation, mostly overtime travel time.

MR. FITZGERALD: So some employees do get paid for

overtime in addition to their regular salary?

MR. RANDELL: Oh yes. I will say down in the

ordinary workers, with the union employees, I mean basically there is minimal if

any, overtime paid directly to management (inaudible)

MR. FITZGERALD: Hourly paid employees only or

salaried employees as well?

MR. RANDELL: It would apply to salaried employees

because we have very few hourly paid employees.

MR. REID: Take for example the regional office in

Labrador, our people could leave the regional office and could be on the road

for three or four days in parts of Labrador because of weather and this sort of

thing and under the union contract we have to pay these people overtime. It

doesn't take long to run up $200,000 or $300,000 in overtime when you are

talking about out in rural Newfoundland travelling around. You will probably

see, next year, a rise in that because we are taking on the inspection services

now. Not this year of course, we have enough but that will probably increase

because of the inspection services that we are taking on. When you look at

electrical inspections, the Department of Health and having to call people out

on weekends, night time and this sort of thing, so that is going to increase.

MR. FITZGERALD: In a town in my district, Little

Catalina, two years ago - they did not receive any funding last year but two

years ago they received ample funding in order to just about complete the town

there with water and sewer. Due to the sewer line having to take another route

off the main highway there was something like $56,000 or $58,000 there in

slippage money and because it had to take this extra route the money had to be

returned. If it was a continuation of the main pipeline there would be no

problem. In that particular area now, it is probably the worst area in the whole

of the town, people have to leave their house to go out and get showers and do

their washing in other places because of the problem with the drainage there in

their sewer system. In conversation with a couple of home owners there the other

day, they were wondering if it is possible for them to extend the sewer line to

make on to the main sewer even though it is probably 200 or 300 feet away. Since

it is now the councils property and the Department of Municipal and Provincial

Affairs put it there, would they have to go through getting an engineer to

engineer that process, have it inspected and this sort of thing or would it be

able to be done through the community council or the town council there in the

area, just for information?

MR. REID: No, it is strictly the responsibility of

the council. They know the health and environment questions and the necessary

permits they need and so on. The council can basically go and do that without, I

suppose, notifying us that they are doing it as long as they abide by the rules

and regulations of occupational health and safety. Oh no, council can go and

hook that on no problem. It is entirely up to them.

MR. FITZGERALD: Many times when councils make

suggestions or send in their five year plan, they identify work that they

consider a priority in their communities and I don't know if anybody knows in

their communities better than the municipal councillors. Why does the Department

of Municipal and Provincial Affairs many times change what they put forward as

their priorities rather than accepting the words of the councillors and

accepting the priorities that they have submitted?

MR. REID: Several reasons MHA, when the

applications come in from a particular community they are given to a group of

individuals who represent environment, health, our department and fisheries.

They sit down and they rank the particular projects that come in, say from

Little Catalina.

Quite often the area that the council wants done

doesn't rank as high as what the government officials rank based on

environmental reasons and so on. The other problem with it too is that when the

minister sits down and he has a certain amount of money and he is trying to take

into consideration the ranking system, and at the same time trying to be fair to

individual MHAs around the Province in giving them a few dollars so they can get

re-elected or whatever, quite often the question is: How much can you afford to

put into a particular community?

So Little Catalina applies for $1.5 million for a

water and sewerage project, its number-one priority. The ranking system doesn't

look at that $1.5 million but looks at another project they've applied for and

ranks it higher. The minister looks at it and says: If it is being ranked

higher, this smaller project, maybe it is better to give them that than it is to

interfere with the system and give them the bigger one.

Quite often, I would say in more cases than not, the

ranking system identifies projects in a community that are not the priorities of

the council. That is the reason. There is no other way around it.

MR. FITZGERALD: Mr. Minister -

MR. REID: If you stuck with just the priorities,

there are chances that the councils wouldn't get anything because they wouldn't

rank. So they move down the list, they go down, because of the economics of it

as well as the ranking. That is how it works out.

MR. FITZGERALD: I don't know how we can let them

know - I will leave that with you - but sometimes it is a very embarrassing

affair. The council goes and makes a commitment to certain people who live on

certain streets and says: Yes, your streets are going to be included because

this is what we've applied for and this is the amount of money that we have. As

a result they find themselves going back and apologizing to people because

government has changed it.

Mr. Minister, a quick question regarding the clearing

of snow in some local service districts and community councils this year. Due to

them being unable to go and get a private contractor to clear their snow many

people have availed of the services of Works, Services and Transportation. I

know bloody well that a lot of them are not going to be able to pay the bill

that they are going to get from Works, Services and Transportation. Much of it

is probably going to be much higher than what you will be able to intercept as

money coming from your government. Where do the extra charges go?

MR. REID: Good question. If they haven't got their

bill paid I guess by next year at snow clearing time then Works, Services and

Transportation - and they will do it, they've already done it - they just won't

clear their road.

MR. CHAIRMAN: That concludes your questioning for

this time. I now recognize Mr. Smith.

MR. SMITH: Thank you, Mr. Chairman. Just two or

three questions with regards to housing, as we now have the officials from

Housing here.

MR. REID: Can we wait? Excuse me, Mr. Chairman. I

was going to do Housing separately, unless you want to do it altogether. It

doesn't -

MR. CHAIRMAN: If they want to crisscross it and -

MR. REID: I'd be happy to do it altogether, to be

quite honest about it, and probably speed it up a little bit.

MR. CHAIRMAN: Well, it would, for then we can call

the heads, we will have it all, so I would say go ahead and....

MR. SMITH: We have to deal with it so I don't see

any problem.

MR. REID: No problem, go right ahead.

MR. SMITH: First of all, in looking at the

Estimates there for Housing as they are presented here, it is not broken out

very well. I don't -

AN HON. MEMBER: Page number?

MR. SMITH: Page 283. Of the total budget there,

how much is being expended on administration?

MR. REID: Can we get the page for administration?

You have to remember now that a lot of the money that we spend on administration

in Newfoundland and Labrador Housing comes directly from the federal government

in administering federal programs like RAP and a number of other programs. It

won't be reflected in our Budget, the Province's Budget.

If you look at the total amount of money that we are

going to spend in Newfoundland and Labrador Housing this year in comparison to

what actually the government puts into Newfoundland and Labrador Housing, which

will be $13 million this year, there is a drastic difference, so I am going to

ask Bob if he would identify the page and go down through it, if you want to do

that.

MR. HEATH: The total administration costs are

$15,300,000 made up primarily of salaries $10 million, occupancy expenses $1.3

million, travel $770,000 and various other categories, cost of information

technology, our computer systems and operation of our computer systems,

$1,500,000. A lot of these costs, as the minister pointed out, are cost-shared

with the federal government and, as a result, we are able to distribute

approximately $7 million of that $15 million to our various rental housing

programs, the majority of which are cost-shared on the basis of 75/25 with the

federal government.

MR. REID: That is difficult to understand, isn't

it?

MR. SMITH: What is the total budget, and what are

we talking about in terms of total budget? Can you give some idea as to what -

MR. NOSEWORTHY: The total budget, Mr. Smith, is

$142.6 million relating to current account expenditures in the order of $110

million and capital account expenditures of $32.2 million.

MR. SMITH: Okay, that makes it a little clearer.

MR. REID: It is not reflected in our estimates,

because we are not required to reflect it in our estimates. The bulk of the

funding comes in from the federal government, so we only show what we actually

spend, what government spends.

MR. SMITH: In terms of my own district, the

biggest concern that I have had in the last few years in dealing with the URP

program, I am just wondering what is contained in the budget this year with

regard to the Urgent Response Program.

MR. NOSEWORTHY: We have $1.6 million, which is the

same amount as we had last year, for the URP program for 1995-'96.

MR. SMITH: Last year you said you had $1.6

million. In terms of the demands, how adequate was the $1.6 million?

MR. REID: We went looking for some more money this

year, because you know that social services has basically put that

responsibility over on us to some degree, and we went looking for some extra

funding this year but we were turned down. The money just wasn't there for it. I

felt fortunate to hold on to the amount that I had last year.

In our estimation, we are not putting enough into it -

definitely not putting enough into it - but, given the financial situation of

the Province at this particular point in time, and the fact that social services

lost $10 million out of their budget, and in most cases that is to whom we

deliver the RRAP or the Urgent Repair Program to, those people who are on that,

or just above that, level. I felt fortunate just to hold on to what I had last

year.

MR. SMITH: Minister, I am sure you are aware, and

you have mentioned that - certainly, I know, in my own district, and I suspect a

lot of the rural areas in particular, in talking to them, and I don't imagine it

is something peculiar to the rural areas - that is a major, major concern. I

visit, on a regular basis in my district, people who are trying to get some of

these things done, and it is a major problem, especially when it is the Urgent

Repair Program, in trying to get some of that work done.

We do have people in this Province who are living in

very, very poor housing, and the difficulty I find is that over the years,

because of the existence of the RRAP program, which did an excellent job, that

you go and visit someone who was able to avail of this program a few years ago

and you feel good because they are in very good housing, and then you walk down

the road and visit somebody who has been on a waiting list for probably three

years, their roof is leaking, and there is very little that can be offered to

them. If you go to social services the option will be, well, we will take them

out and put them into a rental unit which I, personally, have great difficulty

with. If we take them out and put them in a rental unit and pay their rent I can

understand it makes sense to government that we only have to pay one month's

rent now rather than have to pay whatever the full amount would be upfront, but

I think in the long-term it does not make a lot of sense to me and it certainly

does not make a lot of sense to the people out in the communities who are faced

with this on a daily basis.

MR. REID: What it comes down to is a question of

financing and nothing else. I would not know, and even the people in social

services cannot tell you today what would be an adequate figure to address that

situation because it just continues to mushroom as you get into one level and

you get into another. I totally agree, but it is fiscal reality, I suppose, that

is what it boils down to.

MR. SMITH: What is the situation with the RRAP

program itself?

MR. REID: Well, we are going to maintain a small

semblance of the RRAP program this year. We are going to do 500 units this year

which is down drastically from last year.

MR. SMITH: What was the figure again, Mr.

Minister?

MR. REID: Five hundred units. The reason for that,

of course, is that the federal government announced some years ago that they

were getting out of the RRAP program and capping the amount of money that CMAC

provides each year to the provincial governments to avail of RRAP and like

programs, native housing programs, urban programs, and so on. The federal

government this year, in its budget, announced a further decrease of $457

million over three years and that basically means that the RRAP program after

this year will disappear. There will be no RRAP program. Whether or not there

will be any delivery of any federal programs in the coming year, next year, I

should say, is questionable at this particular point in time. I cannot say what

else will disappear. If the RRAP disappears then the rest of it is meagre in

comparison to the RRAP.

Last year we were asked to look at savings from coast

to coast in regards to our programming. We found substantial amounts of money

that we could save but not to the tune of $400 million, so the federal

government is still looking for those savings now to reduce their deficit,

whereas last year those savings could have been put back into programs such as

RRAP and we might have been able to maintain the RRAP program for another couple

of years. While I believe I am correct in saying that if they follow the course

they are going now with regards to the recovery of that money and savings there

will not be a RRAP program in 1996, or if it is it will be pretty small.

MR. NOSEWORTHY: Actually, the federal Budget that

was brought down a few weeks ago clearly stated, Mr. Minister, that the $457

million would be found through existing programs and essentially there will be

no new programs funding for social housing beyond this year, and that the

priority of the federal government would be to try and maintain the existing

housing stock, and if that remains the position of the federal government it

will clearly mean that the RRAP program will be terminated and there will be no

new social housing funding for things like senior citizens projects, family

social housing, or any other social housing programs that have been available in

the past.

MR. SMITH: One final question, does the

corporation have any plans to sell off any of its rental properties during this

year, particularly in and around the metro St. John's area?

MR. REID: Let me jump in on this one, because I am

sort of proud of this one, Bob. We have gone from something to the tune of 1400

units down to 500 units left. The past three years we've sold off 800 units, 900

units. We are going to continue to do that. We have plans this year to once

again look at the possibility of selling off the majority of our units we have

left in St. John's, Arnold's Loop, Pepperrell, the Churchill Square apartments

and so on. It is the policy of this government to sell off all those units and I

think we've been pretty successful in the last two or three years, and I'm sure

we will be as successful this year.

Not only our apartment units, our industrial units,

our industrial parks, any properties that we own - for example, in Stephenville,

in the airport - any properties that Newfoundland and Labrador Housing is in

possession of now are up for sale.

MR. CHAIRMAN: Thank you, Mr. Minister.

MR. J. BYRNE: Thank you, Mr. Chairman. I want to

get back to the infrastructure program again. Can someone tell me exactly what

the bottom line is this year? How many new dollars will be put into that program

all-inclusive - federal, provincial and municipal - this year?

AN HON. MEMBER: Infrastructure?

MR. J. BYRNE: Yes. The Canada infrastructure

program.

MR. REID: None yet. I've got a problem. I might as

well say it here. It is just as well to say it here. We are working with the

federal government - you heard me last week announce that the federal government

asked for a $5 million hold-back till 1997, 1998. We have since found out that

the $5 million hold-back was - we thought it was a total amount, but then it

turned out to be: No, it was the federal government's share. Which would mean a

$15 million hold-back. Do you follow me? Five million dollars from the Province

and $5 million from the municipalities and (inaudible).

We've been dealing with, as recently as yesterday

afternoon - Clarence is on a committee made up of representatives from

provincial and federal people who are making up the federal group. We are

working now with that group to go to the minister in Ottawa with Mr. Baker, who

is the chairman of the infrastructure program, the committee, to try to convince

the federal government that you can't do that to us in Newfoundland. We are

optimistic that it is not going to happen. If it does, then we will have

approximately $25 million to spend, but if you take $15 million out of that you

are looking at a $10 million budget for infrastructure this year.

MR. J. BYRNE: That is the figure I mentioned

earlier, $10 million.

MR. REID: That is just coincidence.

MR. J. BYRNE: That is the way it is with me. I

hope you have some success in that one then.

Page 279, Municipal Fire Operations. Amount to be

voted. Last year $2.7 million, spent $3.15 million, and $2.5 million this year.

That is the Grants and Subsidies. That is a fair difference from what was

actually spent last year to what you are going in planning this year.

MR. REID: Are we talking about

section 4.2.02?

MR. J. BYRNE: Yes.

MR. REID: Okay.

MR. J. BYRNE: Is that because of the extra

$450,500 you gave the city because of the regional thing and the (inaudible)?

MR. REID: That whole

section there relates to what

we pay the City of St. John's and the City of Corner Brook.

MR. J. BYRNE: The deal that was worked out, yes.

MR. REID: Yes. Just that

section relates to St.

John's and Corner Brook.

MR. J. BYRNE: The other one was Firefighting

Vehicles and Apparatus, Grants and Subsidies. From $1 million down to 25 per

cent of what it was. That is going to be hard on the towns which are expecting

some funding for fire fighting equipment, isn't it?

MR. REID: Yes, I tend to agree, but then it was

another financial decision that we had to make. We are down to $250,000. I want

to just tell you something that you probably don't know. We are the only

province in Canada that has a fire fighting package like that. All

municipalities outside of Newfoundland foot the bill completely for fire

fighting services, in every other community. Only province in Canada.

MR. J. BYRNE: That doesn't mean it is right or

wrong.

MR. REID: I never said it was right. I tend to

agree, that it is going to be hard on some communities now to come up with money

to pay the full shot for fire fighting equipment. I agree with you.

MR. J. BYRNE: Especially in towns who maybe are

trying to start their own.

MR. REID: Mount Pearl will not have any trouble.

MR. J. BYRNE: Page 280, under Support Services,

5.1.01, Purchased Services (6) $68,100 was the revised and this year it is

$612,500. Can you give me some idea what that is?

MR. REID: That is ours. Mike, do you want to

answer that?

MR. DWYER: The difference there, the $612,500

reflects leased spacing for the new service centres that are going to be

incorporated this year, five regional service centres and larger operational

centres. What is happening now is that there are various departments that are

coming over, parcels of departments, and there is some combination of whether or

not they are in leased space or whether they are in government space. What will

happen, for argument sake, where we are leaving government space, the leased

spaced departmental people who are left behind will move into government space.

MR. REID: In that whol