March 14,

HOUSE OF ASSEMBLY PROCEEDINGS

Vol. XLII No. 11

The House met at 2:00 p.m.

MR. SPEAKER (Dicks): Order, please!

I would like to draw to member's attention that today is

Commonwealth Day and we have available for members, on the table, copies of the

Queen's Commonwealth Day message to the Commonwealth.

Oral Questions

MR. SPEAKER: The hon. the Leader of the Opposition.

MR. SIMMS: Thank you, Mr. Speaker.

Mr. Speaker, over the past couple of days in particular I

have been hearing the Premier and members of government in particular trying to

use the guaranteed debt of Hydro as one its chief reasons for selling off Hydro.

You hear government ministers and members talking about it, in fact they talk

about little else, and in the media's closed briefing session last Friday, I am

told, that the Premier said extinguishing Hydro's debt would be positive for the

Province's credit rating. Now, the major credit rating agencies on the other

hand have said, (

a) Hydro's debt is self supporting, (

b) Hydro's debt is in no

way a burden to the Province, and (

c) the government has never had to pay a cent

of interest, nor is likely to pay any interest on that particular debt, so I say

to the Premier is it not time for him to be at least a little honest to the

people? Why do you not tell the people of the Province the truth, that Hydro's

debt is not a fiscal burden to this Province and does not have any bearing on

this Province's credit rating?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Just the opposite is true. Hydro's debt is

a burden on this Province and if the hon. member does not understand that let me

give him a simple example. Suppose he had guaranteed a debt of $100,000 for one

of his children, and himself had a debt of $500,000, does he not think that when

he goes to the bank, either to guarantee debt for another of his children or to

borrow for his additional needs, the bank takes into account his liability under

the guarantee of the $100,000, and it is not there, then why do they have it

there in the first place? If there is no need for the Province to have it then

why do they insist on it? They insist on it because Hydro is so poorly

capitalized in terms of equity that it cannot borrow on its own without the

government's guarantee. That is the simple truth of it.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Leader of the Opposition.

MR. SIMMS: Mr. Speaker, that is an absolute untruth and

the Premier should know better.

SOME HON. MEMBERS: Hear, hear!

MR. SIMMS: Is he now saying that the credit rating

agencies that look after the credit rating of this Province are wrong? Is that

what he is saying, they are wrong? Standard and Poors said they do not even

include Hydro's debt in the Province's overall debt, and so did Dominion Bond

Rating. They exclude Hydro's debt from their debt calculation of the Province.

So if the debt isn't a burden to the Province, it doesn't have any bearing on

our credit rating, they say, and credit rating agencies don't even include

Hydro's debt, why does he continue to mislead people and spend tens of thousands

of their own dollars on radio ads to try to convince them of something that is

false?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, there are certain statements

that are inappropriate. Now I can't deal with it if you don't call that hon.

member to order to correct those allegations, other than to say his

representation is totally false. It has no truth in it.

The simple fact is, the credit rating agencies do take this

into account. Look at what the financial institutions do when they write about

the Province, and they talk about the Hydro debt. They say, yes, Hydro is

supporting its own and repaying its own debt; the Province hasn't been called on

the guarantee, but Hydro does not have the capital structure that allows it to

borrow on its own, without the government giving the guarantee. Therefore, Mr.

Speaker, it is essential to it, and if it is essential to it, it is a burden on

this Province. We have to put it up. We have to put up the guarantee in order

for Hydro to borrow.

MR. SIMMS: Mr. Speaker, a supplementary.

MR. SPEAKER: The hon. the Leader of the Opposition.

MR. SIMMS: It never ceases to amaze me, Mr. Speaker. Any

time anybody criticizes the Premier's position, they are all wrong. Now he is

saying the credit rating agencies of the Province are wrong. What absolute

nonsense. Is it any wonder why the people of the Province don't believe him on

this issue?

Mr. Speaker, let me ask the Premier this: Standard and Poor's

have also said that the impact of the Hydro sale on our credit rating would

depend on how much, and whether, government revenues would be affected. Now the

Province - by the way, I have the transcript too, so we will table it after so

that the press and everybody will see it - by its own admission, by your own

admission, will no longer be collecting the loan guarantee fee worth $10 million

to $12 million, will refund federal corporate taxes to both Newfoundland Power

and Newfoundland Hydro, worth $30 million to $40 million, put $15 million into a

rate adjustment fund, and contribute another $30 million in tax revenues to the

new Hydro's pension plan. In return, you might collect about $15 million in

provincial corporate income taxes, so I want to ask him: Is he concerned that

there is maybe a real danger here that the sale of Hydro could, in fact, cause a

downgrading of our credit rating, since privatization is going to result in a

substantial loss of revenues and incur new expenditures to the Province?

Remember, I say to the Premier, in the case of Nova Scotia,

which he used to flaunt as an argument at one time, after they privatized Nova

Scotia Power, two credit rating agencies actually downgraded their province's

credit rating.

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: He should also realize that it would have

been downgraded more without the privatization.

SOME HON. MEMBERS: Oh, oh!

SOME HON. MEMBERS: Hear, hear!

PREMIER WELLS: That's right. Look at the reality of it.

Now, let me correct some of the misstatements that he has made. Here is what

Standard and Poor's said; let me read it.

AN HON. MEMBER: Read all of it.

PREMIER WELLS: If you want me to, I will read the whole

thing. Now, this will eat up Question Period.

MR. SIMMS: (Inaudible).

PREMIER WELLS: Well, if I read the whole thing, and I am

prepared to do it, it will eat up Question Period.

SOME HON. MEMBERS: Oh, oh!

PREMIER WELLS: Okay. Well, I am going to read for the

record. Here is what they said: On the sale of Hydro and the reduction of the

total debt for which the Province is liable, here is what is said: `Well, again

it depends on how much cash is received and, of course, the benefits of that are

immediate in the sense that it would reduce the Province's borrowing

problem - `in the sense that it would reduce the Province's borrowing

requirements but, because that would, the Province's direct debt level, it would

reduce to some degree the debt service cost of the Province going forward; that

would have marginally a beneficial effect.' Yes. Now, that is not saying no, the

credit rating is going down, it is saying just the opposite, very clearly the

opposite.

Now, let me speak about the voodoo mathematics that we just

heard coming from the Leader of the Opposition. The corporate tax problem - the

corporate tax has all been given back to the company; that is wrong. The

provincial corporate income tax that is presently collected, the provincial

income tax that is presently collected from Newfoundland Power will remain with

the Province, it will not be given back. The provincial income tax that Hydro

will pay in the future, that it didn't pay at all in the past, will also come

back to the Province. The two amounts together will leave the Province with

exactly the same position that it was in before.

AN HON. MEMBER: No, that is not so (inaudible).

PREMIER WELLS: Yes, it will. Now, at the moment, they

will leave the Provincial Government in precisely the same position tax-wise as

it was in before, exactly.

AN HON. MEMBER: That's not so.

PREMIER WELLS: Well, it is true, it is what I talked

about, voodoo mathematics and you can see it now.

Now, let's talk about the pension funds. At the moment, the

Province has total liability -

MR. SIMMS: That wasn't the question.

PREMIER WELLS: At the moment the Province has total

liability - part of that is being dealt with by the Province putting in an

immediate contribution out of the existing Public Service Pension Fund because

that is going up. Now, it is being transferred on a basis proportionate to the

number of employees; it is being done on a sound actuarial basis; they are

getting their fair share of the fund. Now, that still leaves the balance

unamortized, as is the Public Service Pension Fund now. What the Province is

doing for the first time in twenty-five years, is taking some responsibility for

dealing with the pension mess that the former government produced. We are

dealing with it!

SOME HON. MEMBERS: Hear, hear!

PREMIER WELLS: One part of it, Mr. Speaker, will be an

amount that will be contributed to the pension fund in respect of the Hydro

workers who are being transferred, and the balance will be provided for over, at

most, a twenty-five year period. Now, that responsibility, therefore, goes away

from the Provincial Government totally.

In the meantime, we must also deal with the pension fund

problems for the rest of the public service, which we intend to do on a fair

basis. When the details are made known people will see that we are dealing with

both on the same basis, and there is provision in the agreement for that.

SOME HON. MEMBERS: Oh, oh!

MR. SIMMS: Mr. Speaker -

MR. SPEAKER: Order, please! Order, please!

The hon. the Leader of the Opposition.

MR. SIMMS: Mr. Speaker, that is absolute deception, and

misleading to the people of the Province, the way he gave his answer.

AN HON. MEMBER: Oh, oh!

MR. SIMMS: It is, absolutely, deception, Mr. Speaker.

MR. SPEAKER: Order, please!

MR. SIMMS: The same gentleman, Mr. Defoe, of Standard and

Poor's, also in his document -

AN HON. MEMBER: (Inaudible).

MR. SIMMS: Never mind trying to stare down the Speaker

and frighten the life out of him! He is not going to be intimidated any more

than we are!

SOME HON. MEMBERS: Hear, hear!

MR. SIMMS: I say to the Premier, the same document that

he quoted from, Mr. Defoe of Standard and Poor's, also offered his opinion that

Hydro's debt and the Province's credit rating would not be a deciding factor for

the government to proceed with privatization. That is what he says. Yet, that is

precisely the chief argument that the government has been using.

Standard and Poor's spokesman, Mr. Defoe, also says: `I don't

think that is the sole reason the Province is considering the privatization.'

Mr. Speaker, neither do we, neither do the people of the Province. I want to ask

the Premier if he will tell Mr. Defoe and the rest of us what is the real reason

why he is on this personal crusade to get rid of this very valuable economic

lever, Newfoundland Hydro?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, being as we are using

unparliamentary words, I can only cope with it by using equally unparliamentary

words.

SOME HON. MEMBERS: Oh, oh!

PREMIER WELLS: The only deception is the deception that

the Opposition has been practising for four months. They took a position for

their own narrow political purposes: No matter what, we will stop this, we will

use every trick we can in the House of Assembly to stop it! And that is

precisely what they've been doing. Mr. Speaker, included in that is deceiving

the entire public of this Province with their fraudulent representations on this

issue. That, Mr. Speaker, is the objective.

Now, there was some other question he asked, I've forgotten

what it was.

SOME HON. MEMBERS: Oh, oh!

MR. SIMMS: Would you like me to ask it again?

PREMIER WELLS: Yes, ask it again.

MR. SPEAKER: Order, please!

The hon. the Leader of the Opposition.

MR. SIMMS: Mr. Speaker, with the Premier's permission.

The Premier is the master of deception. He has been called that before in the

House and he knows it.

Mr. Speaker, what I ask the Premier is this: In his opinion,

that is, Mr. Defoe's opinion, from the same document he quoted from a moment

ago, he said he didn't think the sole reason that the Province was considering

privatization was on this issue of the debt, and the Province's credit rating

and so on. So I want to ask the Premier very gently and meekly, can he tell us,

can he tell everybody in the Province, what is the real reason for privatizing

Hydro?

MR. SULLIVAN: He won't tell us that.

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: This will take a little time, Mr. Speaker,

and I want hon. members to know it. What's the real reason? I have enumerated

them a number of times. The original purpose for which Hydro was created as a

Crown corporation has disappeared - the building of Bay d'Espoir, because the

private sector couldn't do it. I am told - I don't know that it's accurate, but

I am told that the Premier of the day, Mr. Smallwood, when it was being created

said, `It is being created as a Crown corporation now but it will have to be

privatized in the future because the private sector can do it better than the

public sector can.' Now, I am going to have that checked to see, but I am told

by somebody who was there, that this was the view expressed at the time.

Let me ask another question: If Hydro were a private sector

company now, could we justify coming to this Legislature and asking for

authority to borrow $250 million, $300 million, $350 million or $400 million,

whatever it would take to buy it and, in addition to that, guarantee another

billion dollars worth of debt? Could we justify doing that? Of course not. Now,

then, if we can't justify doing it how can we justify maintaining that kind of

money for the Province in Hydro and maintaining that kind of guarantee on our

books if we couldn't justify doing it all over again? And if we could, then why

don't we go out and buy Newfoundland Light, and buy Newfoundland Telephone, too,

and put it all in? If it's all so good for the Province, why don't we buy it

all? The answer is simply, Mr. Speaker, we live in a private enterprise economic

structure where it is private enterprise that generates the economic activity

that builds the wealth of society. The former government took a different

approach and virtually destroyed the economy of this Province in their seventeen

years in power. The private sector went down disastrously, Mr. Speaker, the

records are there. It can be seen and it's very clear, in the twelve years

between 1975 and 1987 there was virtually no private sector jobs created in this

Province at all because of the weakened private sector climate that the

government maintained.

Mr. Speaker, the government of this Province, acting on

behalf of the people will, through the sale of Hydro, receive a very substantial

sum of money - a very substantial sum of money - that will enable it to avoid

borrowing at all in the coming fiscal year, that will make a significant

contribution to reducing its borrowing in the year after that, and will save $20

million, $25 million, $30 million, $35 million every year hereafter for the

people of this Province.

In our present financial circumstances we can't do otherwise.

It will make a substantial contribution to helping rebuild the private sector

economy. It will help the industrial customers, this whole approach. The whole

approach that we are taking with the electrical power control act, the

privatization, the whole of it, is all part of the Strategic Economic Plan to

rebuild the economy of this Province and give us the ability to start to look

after ourselves instead of having to rely on the federal government for

hand-outs.

SOME HON. MEMBERS: Hear, hear!

PREMIER WELLS: Instead of subjecting our people to that

indignity.

Mr. Speaker, at long last we have a government prepared to

take the decisions that will rebuild the economy of this Province instead of

destroying it as the former government did.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. the Leader of the Opposition.

MR. SIMMS: Mr. Speaker, I think the concern of the people

of the Province is whether the Premier is out to look after himself and his

buddies. I think that's the real problem here.

SOME HON. MEMBERS: Hear, hear!

MR. SIMMS: Mr. Speaker, this is a facility and an

operation that is owned by the people of Newfoundland and Labrador, held in

trust by the Board of Directors, held in trust by the Government of Newfoundland

and Labrador. The government has no mandate to sell it off, or to get rid of it.

The credit rating agencies say the debt is not a burden on

the Province. Next year you will have to borrow your $300 million or $400

million again, or the year afterwards, and that money will be gone, and the $20

million or $25 million in savings in interest that you talk about, you are going

to give away $50 million to $100 million in tax concessions and tax breaks. Now

that doesn't sound like sound math to me, Mr. Speaker, nor a good deal.

AN HON. MEMBER: Not true.

MR. SIMMS: It is true - absolutely true - and the

Minister of Finance knows it's true.

Mr. Speaker, we have heard in this House over the last few

days, the Minister of Finance and the Government House Leader say that this

legislation is the most important legislation that we have had since

Confederation. They have said it in the House. The people of this Province can't

get the Premier to listen to their arguments. They can't seem to get him to wake

up.

Since the legislation is so vitally important, I want to ask

him: Will he allow a free vote in this House on third reading among the members

on his side?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, let me correct some of those

gross misstatements, and this is the deception that I was talking about, a

give-away of the waters and the assets and the company and everything of this

Province - utter tripe. The company remains an asset of this Province. It will

remain forever an asset of this Province. It can't be moved out of this

Province. The water is going to flow down the same rivers. It's going to run

over the same turbines. The same diesel plants will be located in the same

communities they are now. The same managers will be there. The same employees

will be there. It will be run by a company and of the Board of Directors, 50 per

cent must be resident in this Province. More than 50 per cent must be resident

in this Province, Mr. Speaker. It will be regulated totally by the Public

Utilities Board, and they must do that which the Public Utilities Board directs.

It is an utter fraud, it is a political fraud for the

Opposition to suggest that this is a give-away of our assets. The company

remains. The only question is, who finances it. That is the only question. Are

we going to ask the people of this Province to use their scarce dollars to

finance it themselves, or are we going to let the private sector finance it? It

is a burden.

AN HON. MEMBER: It is not a burden.

PREMIER WELLS: Now he says that in a couple of years the

$200 million or $300 million or $400 million will be gone and we will have to

borrow again.

MR. SIMMS: I suppose you won't have to do that. That's

wrong too, is it?

PREMIER WELLS: That's true.

SOME HON. MEMBERS: Oh, oh!

PREMIER WELLS: That's true, but what would you rather

borrow, and what interest would you rather pay, Mr. Speaker, the interest on

$600 million or on $300 million? It is fairly simple. It is not going to relieve

you of borrowing forever. What is going to relieve us of borrowing forever is

following the government's policies in the Strategic Economic Plan to rebuild

the economy of this Province, following what we are doing now in the

privatization of Newfoundland and Labrador Computer Services, of Farm Products,

of Hydro, of all of the others, rebuilding the private sector economy of this

Province, something the former government did not understand as they set about

almost the systematic destruction of it because somebody was afraid of

overheating our economy, for God sake. That is their approach, they did not want

to overheat our economy. Somebody should have overheated them a long time ago.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Leader of the Opposition.

MR. SIMMS: What I asked the Premier was if he would allow

a free vote and he never answered, of course.

PREMIER WELLS: This is government policy.

MR. SIMMS: I ask the Premier: Will he allow a free vote

of his members on third reading?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: This is government policy and the

government supports it entirely and the supporters of the government support it.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Leader of the Opposition on a

supplementary.

MR. SIMMS: Is that a yes, or no? I am asking the Premier

if he will allow his members the freedom to vote on third reading on this piece

of legislation, as many of them would like to have that freedom?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, this is solid government

policy. One member had a different opinion and he was not chained down to his

seat. I am not enthusiastic or happy about what he has done. I am sorry he did

not support the government on the issue, but he was not chained down to his

seat. Do you think he is imprisoned or something? This is government policy and

the government expects every member on the government side of the House to

support government policy.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Baie Verte - White

Bay.

MR. SHELLEY: Thank you, Mr. Speaker.

My question is for the Premier. Now that the Premier has used

closure on second reading on the bill, "An Act Respecting The Privatization Of

The Newfoundland And Labrador Hydro-Electric Corporation," will he refer the

bill to a Legislative Review Committee for full public hearings, and will he put

off further debate and votes on this bill until that committee reports back to

this House?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: No, Mr. Speaker. Let me just remind hon.

members that it would not have been necessary to use closure had hon. members

opposite been prepared to see a full debate on the issues. It would not have

been necessary, but they came in this House day after day for two days until

10:00 o'clock in the evening, the equivalent of two weeks of ordinary government

business time, and prevented the bill from being discussed, and now they are

complaining about closure. They are complaining about closure and lack of

democracy. What utter nonsense.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

PREMIER WELLS: Mr. Speaker, we had the total amount of

government time if we sat an ordinary day, every ordinary day, we had the

equivalent of more than three weeks of debating time on second reading alone,

Mr. Speaker.

MR. TOBIN: That is not true. The minister never called

second reading.

PREMIER WELLS: No, because you were ragging the puck with

page by page presentation of petitions on this issue and he let you do it. You

chose to use the time and abused it on that basis. You chose to use the time and

you see the result of it.

MR. SPEAKER: A supplementary, the hon. Member for Baie

Verte - White Bay.

MR. SHELLEY: I am afraid, Premier, that democracy was not

in place at any time here. Government ministers have repeatedly said this bill

is the most important to come before this House since Confederation. The

Government House Leader himself said the same thing. The Minister of Finance and

the Minister of Mines and Energy have said on many occasions, we can take our

time with this. Why the rush? The Member for Pleasantville has even said the

same thing, why the rush? The people of the Province are clearly concerned about

this bill and they do not share the Premier's convictions. As we saw again today

there were meetings and petitions and everything else on this Hydro. If the

Premier is so certain of his convictions, if he is so sure this is a great deal,

why not bring it to public hearings, I ask the Premier again?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, what government ministers

have said is the Electrical Power Control Act and this bill together are the

most important legislation we have dealt with. There is no question about that,

and if I recall correctly that's what the Minister of Justice said.

Now, Mr. Speaker, why the rush? We want to look after the

interest of the people of this Province. We are determined to put the interest

of the people of this Province ahead of narrow political considerations. It

could reduce a lot of pressures if we delayed this for awhile and then tried to

get it through but how much would we lose for the people of this Province in the

meantime, that's the important question? Everybody who knows anything about this

knows, Mr. Speaker, that the marketing of securities in utility companies is

extremely intra-sensitive. We want to take this proposal to market at a time

when the people of this Province stand to get the best possible return in all of

the circumstances, not at a later time when they may lose a great deal. Now, Mr.

Speaker, this is an opportune and appropriate time to proceed and that's the

reason for seeking to proceed without undue delay.

MR. SPEAKER: Order, please!

A final supplementary, the hon. the Member for Baie Verte -

White Bay.

MR. SHELLEY: I say to the Premier, the best return is to

not sell it at all.

SOME HON. MEMBERS: Hear, hear!

MR. SHELLEY: Now as an elected member in this House I

can't help but ask, how is the voice of the people going to be heard in this

House? The Premier just rejected public hearings and he's rejected the

Opposition Leader's call for a free vote in this House. Government members will

have to vote the way the Premier wants them to vote not the way the people

elected them to vote.

SOME HON. MEMBERS: Hear, hear!

MR. SHELLEY: What is the point of debate if at the end

the people on the side of the House must vote with the Premier not with the

people? Does it matter at all to the Premier what the people think about this?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, free vote? The Leader of the

Opposition four months ago announced, `no matter what, we're going to use every

tactic in the book to stop it from going through.' Free vote, use of intelligent

minds? If that's a measure of intelligent minds over there, God help us.

Now, Mr. Speaker, the views of the people of the Province,

petitions and so on, somebody gave me a copy of a petition this morning prepared

by POP, a group called POP, so I did some checking. There were some names,

addresses and numbers there so I called a few people, I said: I'd like to know

how valid these petitions are. Here's the mixture of the responses I got: Oh

well you know, somebody said we shouldn't do it and asked me to sign it so I

just signed it. Another one said: Well, you know a lot of people are saying this

shouldn't be done so I figured I'd go along with everybody. Another woman said:

Oh no, I didn't sign it. I said: Are you so and so, do you live at such and such

a place and is your phone number so and so? Oh yes, but I never signed any

petition. I want to find out who signed my name to the petition. Okay? Now

that's a sample of the quality of the petition. I picked four or five people and

I made those telephone calls today.

Now, Mr. Speaker, at the same time, let me readily

acknowledge that there are people who are genuinely concerned about this.

They're not sitting over there - they have their own political motive - but

there are people in this Province who are genuinely concerned that this may not

be in the best interest of the Province. There are people who believe some of

the misrepresentations they've been hearing from the Leader of the Opposition,

Mr. Abery and others. There are people who believe some of that and so have come

sincerely to these conclusions but, Mr. Speaker, don't be misguided by this

great show that was organized.

Even in the Leader of the Opposition's own district, he went

out and organized a meeting in his own district to have a demonstration of all

of the people who are so deadly opposed and I guess there were people from

Exploits and Windsor - Buchans and there were forty people showed up. I expect

the Leader of the Opposition has more relatives than that. A similar thing

happened in St. George's and a similar thing happened in Harbour Grace. So, Mr.

Speaker, for the most part you'd think you were at a Tory nomination meeting at

most of them.

SOME HON. MEMBERS: Hear, hear!

PREMIER WELLS: Now, Mr. Speaker, let's not be misled into

thinking that this represents overwhelming objection by the people of this

Province. There are some who are genuinely concerned and feel the concern

strongly. I got a call yesterday and I returned the call -

MR. SPEAKER: Order, please!

PREMIER WELLS: - and let me tell you how strongly the man

felt.

MR. SIMMS: (Inaudible).

MR. SPEAKER: Order, please!

I think the question has been answered.

The hon. the Member for Humber East.

MS. VERGE: Thank you, Mr. Speaker. I have a question for

the Premier. Will the Premier confirm that the offer for development of the

Lower Churchill that was on the table in late 1991 and early 1992 included sale

of Lower Churchill power to Hydro Quebec for a thirty year term at an escalating

price, going from about 35 to 145 mils per kilowatt hour, averaging about 75

mils per kilowatt hour over the thirty years?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, there was a discussion. There

was no offer on the table. There were negotiations that narrowed all of the

aspects of providing the power, including diversion and reopening of Twin Falls

and adjustment of price, and it provided for an escalating price for any future

power delivered out of the Lower Churchill development. I don't have the numbers

off the top of my head at the moment but I could get them. However, there was

not agreement on the price.

MS. VERGE: You scuttled the agreement on purpose!

PREMIER WELLS: There was no agreement on the price. Mr.

Speaker, let me remind hon. members that the negotiations did not proceed for

one reason and one reason only. That reason is, Hydro Quebec didn't want to buy

the power because of the changed power circumstances that has occurred in

northeast North America, and for no other reason whatsoever.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please! Order, please!

Question period has expired.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

I would like hon. members attention for a moment. I

understand that members on both sides of the House have strong views about

issues of the day, however, in the last little while I think we have been using

what people know to be unparliamentary language, words such as lying,

untruthful, deliberately misleading, deception, deceiving. I am not pointing the

finger at any one individual, I have heard it on both sides of the House from

time to time. I generally follow the practise that, unless a person raises a

point of privilege or a point of order, I don't try to intervene, particularly

during Question Period to ask members to withdraw comments, but I just ask

members to exercise an appropriate degree of restraint and to try to keep it in

the terms of parliamentary language, otherwise I might have to enforce our

decorum a little more strictly in the future. Thank you.

Notices of Motion

MR. SPEAKER: The hon. the Minister of Finance.

I recognize the hon. Minister of Finance whom I saw on his

feet first.

MR. BAKER: Thank you, Mr. Speaker.

I give notice that I will on tomorrow move that the House

resolve itself into a Committee of the Whole on Supply, to consider certain

resolutions for the granting of Interim Supply to Her Majesty.

I also give notice, Mr. Speaker, that I will on tomorrow move

that the House resolve itself into a Committee of the Whole on Ways and Means to

consider the raising of Supply to be granted to Her Majesty.

I give notice I will on tomorrow move that the House resolve

itself into a Committee of the Whole on Supply to consider certain resolutions

for the granting of Supply to Her Majesty.

MR. SPEAKER: The hon. the Member for Waterford - Kenmount

MR. HODDER: Mr. Speaker, I give notice that on tomorrow I

will ask leave of the House to introduce the following Private Members

Resolution:

BE IT RESOLVED that this House, acknowledging the public

concern that government is moving with undue haste to privatize Newfoundland and

Labrador Hydro, and responding to the demand of the people for information and

public consultation, calls on the government to hold public hearings on the

privatization of Hydro, to set aside further consideration of Bill 1 until

public hearings have concluded.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Ferryland, on a

point of order.

MR. SULLIVAN: Thank you, Mr. Speaker.

On a point of order. A week ago I asked a series of questions

to the Minister of Health and the past Minister of Health, the current Minister

of Education indicated that he would pass them on and I would get answers back

in Answers to Questions for which Notice has been Given, and as of this time, I

have not received any response, Mr. Speaker.

MR. SPEAKER: There is no point of order. There is no

obligation on the minister to file his answers within any set period of time and

in this case there is no point of order under our rules.

Petitions

MR. SPEAKER: The hon. the Member for St. John's East, I

believe he was on his feet first.

MR. HARRIS: Thank you, Mr. Speaker.

I rise to present a petition on behalf of 114 signatories who

reside in the St. John's, Goulds, Torbay area of the Province of Newfoundland.

These petitioners, Mr. Speaker, citizens of Newfoundland and

Labrador, are seeking to stop the proposed sale of Newfoundland and Labrador

Hydro.

Mr. Speaker, they are among the thousands and thousands of

petitioners who have asked to have their petitions and their prayer sent to this

House of Assembly, this has been going on over the past several days; it is not

a substitute for debate as the Premier would have us believe, it is an

opportunity for the members of the public to have their views and their prayer

presented to the House of Assembly. This has been as I said, going on for a

couple of days, there are thousands and thousands of petitioners and all of them

have the right to be heard on their views.

Now, Mr. Speaker, we have heard a number of suggestions made

in the House today which I endorse, having to do with an opportunity for the

public to become more informed and to have a say directly in the fate of this

bill and this legislation. The Premier seems to be repudiating the suggestion

that there be public discussion, that there be an opportunity for public debate

and the suggestion has been made to either send a committee to go around the

Province to hold hearings and to get the views of the public or to somehow or

other establish the public hearing process.

It is most important, Mr. Speaker, that this be done because

this issue is as we have heard today, and it has been said many times, is one of

the most important pieces of legislation since Confederation. These petitioners

I would suspect, Mr. Speaker, fear as I fear, that if we put this legislation

into law that the dividends, the money that is being paid in Hydro bills in this

Province will start flowing out of the Province to the shareholders just as

surely as the electricity from Churchill Falls now flows out of the Province and

benefits the people of Quebec more than the people of Newfoundland and Labrador.

That is one of the reasons, Mr. Speaker, why these petitioners amongst many,

many, many Newfoundlanders oppose the sale of Newfoundland and Labrador Hydro

and want to have more public discussion and public debate about this issue.

Thank you, Mr. Speaker.

MR. SPEAKER: The hon. the Member for Ferryland.

MR. SULLIVAN: Thank you, Mr. Speaker. I rise to support

the petition presented by the Member for St. John's East.

This government has sent out a flyer promoting Newfoundland

Hydro, with many, many things that are not accurate at all. They are trying to

do a sales pitch on selling something to the public of this Province without

giving the public an opportunity in public forums across this Province, and in a

committee of the House to respond. The public are stymied in their response to

it. They should have an opportunity to come in under a committee of this House,

to go out across the Province in public meetings, and respond to each of those

points here in this brochure the government is trying to promote. Not one of

those points here holds any merit whatsoever, and they cannot be substantiated.

It will provide badly needed cash for the Province. What is

the point of saving $25 million in debt costs in financing when on the other

hand you pass out, in one slap, $40 million in corporate tax refunds for the

federal government back to these utility companies? That's $40 million.

When you pay $15 million of taxpayer dollars into a rate

adjustment fund, when you amortize $30 million to $40 million over fifteen years

out of the taxpayers of this Province, and giving up the $10 million a year we

are now receiving from guaranteeing the loans of Hydro, that goes into the

taxpayers of this Province, the Premier would like to make you think that the

$9.2 million this year that we receive from the federal government, under

PUITTA, the Public Utilities Income Tax Transfer Act, he would like to make you

think that we are going to get back provincial tax in return. Granted, but what

other company in this Province is going to be given up? Is the Province going to

give up 85 per cent of corporate income tax from the federal government back to

utility companies? This Province didn't do it with Newfoundland Power, and now

they are going to do it with Newfoundland Hydro, and they are going to give back

to Newfoundland Power also, and they are going to use the weak argument they pay

provincial taxes.

When you calculate the difference in what it is going to cost

by financing the debt, $20 million or $25 million a year, the Premier said, or

$30 million - well let's say $25 million - on what they receive for Hydro, it is

only going to be small in comparison to the real costs.

Now the Premier showed in his presentation, the first 700

kilowatt hours... We want to make electricity available to people in this

Province on an equitable basis - 700 kilowatt hours. Well, 700 kilowatt hours -

and I looked at my light bill that came in this past week - is 6.54 of one cent,

6.5 cents per kilowatt hour times 700, that is a light bill of $45. I ask the

Premier: What about the next 1,000 or 3,000 or 4,000? This light bill was 5,382

kilowatt hours. What is going to happen after the $45 a month light bill? What

is going to happen on the next $50, $60, and $70? He is admitting there is going

to be a substantial increase here. It is going to provide enough electricity to

turn on a light bulb, to turn on a stove, to turn on a washer and a dryer, maybe

- maybe not a dishwasher - a very limited amount for $45 worth of consumption.

Those are the figures he is using, and using as a comparison, when he knows the

majority of people in this Province burn more than $45 worth of electricity in

any particular month.

That's the type of deception, the type of smoke and mirrors

of the Premier, and he will hold up his presentation to the media and say, in a

few years time: I told you on the first 700 kilowatts, here is what it is, $1.25

a month. That is what he will do, and you will be nailed to the wall on the next

1,000 and 2,000 and 3,000 kilowatts of consumption. This doesn't hold merit.

They defined land in this bill as water rights and water

power. That is the definition of land. When we talk about in Clause 4.(1) (a):

"... all of the undertaking, business, land, property, assets..." they define

land. Land is defined as, and I repeat it again, not just real property. It

mentions that here. It mentions estate, terms, easements, right of interest. It

also goes on to say: "... and waters, water rights, water powers and water

privileges;" and we are saying they shouldn't have these. They should just have

water privileges. That is all new Hydro should have. That is all should be

stated here - water privileges. In fact, new Hydro shouldn't even get and see

the light of day.

MR. SPEAKER: Order, please!

The hon. member's time has expired.

The hon. the Minister of Health.

DR. KITCHEN: Thank you, Mr. Speaker. I think during this

debate that we are having on the privatization of Newfoundland and Labrador

Hydro that we respond to the genuine concerns that the people have in the

population. Not everybody out there who is creating a fuss is a Tory who is out

to try to defeat the government. Many are. For many it is, as has been said, a

meeting of the Tory association, but not entirely.

I get calls from people and they raise questions with me, as

people do when they phone their member. They raise and ask questions. What about

this part of Hydro, why are we doing it so, what appears to be quickly? The

Premier answered that question here today quite well.

MS. VERGE: No he didn't.

DR. KITCHEN: I thought he did. What I would suggest to

the members of the Opposition is that we lower the decibels on this debate and

that what we do for all of us is we try to -

AN HON. MEMBER: Have public hearings.

DR. KITCHEN: No, that is not the answer. We have to do it

in a hurry. The Premier also explained that. What we have to do, if there are

genuine questions there to which you need answers - and I know it is rather

difficult to get information on a complicated issue such as this. I remember a

few years ago when the party opposite were in government when they privatized

Newfoundland Linerboard. Do you remember that? I don't know, very few members

remember that. They also pushed that through the House rather quickly.

What we have to do I believe is to ask whatever questions

constituents ask, ask them in the House, and the appropriate ministers will

respond. I believe what you are doing now is screeching and bawling at this side

of the House, making a position known, rather than to elucidate, to try to bring

forward, the answers that your constituents and mine want. Thank you.

AN HON. MEMBER: Hear, hear!

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

The hon. the Member for Kilbride.

MR. E. BYRNE: Thank you, Mr. Speaker. I rise today to

present a petition from the District of Kilbride.

The prayer of the petition reads: To the hon. House of

Assembly of the Province of Newfoundland, the petition of the undersigned

residents of the Province of Newfoundland and Labrador:

WHEREFORE your petitioners urge the Government of

Newfoundland and Labrador to stop immediately the privatization of Newfoundland

Hydro and hold a referendum to ask the people of the Province their views as to

whether Newfoundland Hydro should be privatized or remain as a Crown

corporation.

Mr. Speaker, first of all I would like to deal with the

process and a few of the statements that were made here today. With respect to

the Premier's comments talking about a sample of the petitions that have been

presented in this House, I challenge the Premier to phone anybody on this list

that I'm presenting today and he will hear clearly what their views are. I can

assure the Premier of that.

The Premier has accused the Opposition of fraudulently

misrepresenting the views on Newfoundland and Labrador Hydro. If the Premier and

his government are so convinced that we have been fraudulent in our behaviour in

representing the facts about the privatization of Newfoundland Hydro, then I say

to the Premier, strike a select committee of the House, bring the committee

across the Province for public hearings and expose our fraud, Mr. Premier, to

the people of the Province. I challenge him to do that.

SOME HON. MEMBERS: Hear, hear!

MR. E. BYRNE: The Premier has also said here today, Mr.

Speaker, that the Opposition tied up the House for two days and they had no

other choice but to invoke closure. That is what I would call fraudulent

misrepresentation. The government has the complete majority on that side of the

House. They could have called Orders of the Day on Monday at any time, they

could have called it on Tuesday at any time, but they chose not to. They are

playing a dangerous political game, a very dangerous political game.

Let me say to hon. members opposite that this is a very

controversial issue and that the people of this Province deserve better than

having this rammed through this House all hours of the night and not the

opportunity to bring it forward. The Premier and his government have said that

the privatization issue has been in the public mind for some several months.

While that is true, that the idea of privatization has been in the public mind

for several months, but the details of privatization in this particular piece of

legislation has been in the public mind for less than ten days. That is not

proper.

I say to the Premier also, and to members opposite, that they

have not fully convinced me as a member of this House that the sale or

privatization of Hydro will be good, both from an economic point of view, from a

business point of view, or from a public policy point of view. I say to the

Minister of Forestry and Agriculture, there will be no new investment in this

Province as a result of this sale. There will be no increase in jobs as a result

of privatization. There will be no new technology, or technology transfer, as a

result of privatization, and what we are doing in privatizing Hydro is taking

control of a valuable resource and putting it into the hands of a few. That's

what I say, Mr. Speaker.

Now, members opposite have gallantly stood up in support of

their Premier, and in support of the government position, but one member did

not. Now, I challenge members opposite: Listen to your constituents. Listen to

what they say. Bring them to the House. Let us have honourable debate on this

piece of legislation, but let us not close debate on it. Let us have honourable,

straightforward debate, and let the facts speak for themselves, because I can

tell you that it is not this side of the House that is fraudulent, it is not

this side of the House that has been misrepresenting the views - it is that side

of the House and that Premier that have misrepresented and been fraudulent with

the people of the Province.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for St. Mary's - The

Capes.

MR. MANNING: Thank you, Mr. Speaker.

I stand today to support the petition put forward by my

colleague, the Member for Kilbride, very ably put forward, I should say. I have

several here from my own district that, if the opportunity arises, I intend to

present here today, but maybe what happened here last week will come again in

the fact that we may be shut down and stifled; but just in case, we have some

here.

I stand to present because, Mr. Speaker, over the past number

of days several people from my district have come forward and discussed the

Hydro issue with me, have called my office, have called my home, looking for

answers. Several have made up their minds; several haven't. I admit, several

haven't, for the simple reason that several people don't know exactly what's -

and that is why the Premier should go ahead and have public hearings across the

Province and inform the people, so there is an informed decision out there among

the people of this Province.

The Premier spoke earlier about the legitimacy of the

petitions themselves, and he said that he called some people and checked out the

names. I say, the lady he called, who said she didn't sign it, is much like most

of the backbenchers over on the other side, and the people in the House, they

didn't have the gumption to tell the Premier that they had signed, or that they

supported it when the time was right.

SOME HON. MEMBERS: Hear, hear!

MR. MANNING: I say that is why the Premier should

entertain the suggestion by our leader today of a free vote in this House.

I asked: Who were the six who phoned Steve Neary and told him

that they were planning on going against this? Who were those six? Do they have

the gumption to stand up in this House and say they phoned him, or do we have to

point fingers? I call on those people to stand up and speak on behalf of their

constituents. Those people know that their constituents are against this deal.

Those people know that the people out in their districts want more information

on this deal, and that is why the people are asking for public hearings.

I say to the Premier, if you are so sure, Mr. Premier, that

this deal is good for Newfoundland, and good for this Province, and good for the

future of this Province, why don't you hold a referendum so the people can

decide, and let all the facts come out so that the people know about it, if you

think it's such a good deal?

This government, back in the election campaign in April, said

that the rumours of a privatization of Newfoundland Hydro were groundless

rumours brought up by the Opposition to cause trouble in the Province.

Therefore, as soon as they got a mandate for the government from the people,

they went ahead with this without mentioning it, so really they had no mandate

to privatize Newfoundland Hydro, because they never mentioned it during the

campaign. They sought no mandate on the privatization of Newfoundland Hydro, and

they got no mandate.

The people of this Province are asking questions. They want

answers, and the government refuses to give them. We were here last week and the

Premier spoke on days and days. We spent two days, and then we were told we had

twenty minutes each to speak on this legislation and it was over on second

reading. I say we should have more debate, more time for people to get their

views out to the members opposite - especially the members opposite - so that

those people can stand up and have an informed vote on this piece of

legislation, instead of being talked down to and told how to vote instead of how

they would feel they should vote for the people they represent.

The people I represent have called me. I talked last week

here on several occasions, and the people opposite said they received two phone

calls - two phone calls. Three or four members stood up and said they had

received two phone calls. Well, it is either one or the other; either they are

not near their phones, or they don't answer their calls.

MR. EFFORD: What!

MR. MANNING: It is one or the other, Mr. Speaker, because

I got a lot of phone calls from people looking for information, and I say to the

Minister of Works, Services and Transportation, if you weren't sitting at the

Cabinet table, you would be leading the fight across this Province on this

issue.

SOME HON. MEMBERS: Hear, hear!

MR. MANNING: That is why the people - this is why we

stand up now to be counted. This is one opportunity for the people of this

Province to stand up and be counted, to stand up and let their voices be heard.

The government don't want to hear that because they know that there is a

movement across this Province, Mr. Speaker, that the people of this Province of

Newfoundland and Labrador, don't want the privatization of Newfoundland Hydro.

They don't want to hear of it, they want it stopped and the government refuses

to do so. The question was asked as to why, and nobody can get the answer. The

government beat around the bush, Mr. Speaker, when they are asked why. I say to

members opposite that the people of the Province are asking for public hearings,

they are asking for a referendum on this and you should listen, because if you

don't listen now you will listen in three years time. I guarantee you, Mr.

Speaker, that history will repeat itself, that this will come back to haunt the

members opposite, I guarantee you, Mr. Speaker. Thank you very much.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Government House Leader.

MR. ROBERTS: Mr. Speaker, persuaded as I am by the

eloquence of members opposite and as it is obvious that they wish to debate the

bill, let's give everybody a chance to get into it. I move that under Standing

Order 21, the Orders of the Day now be read, Sir.

Orders of the Day

MR. SPEAKER: The hon. the Government House Leader.

MR. ROBERTS: Thank you, Mr. Speaker. Could we go on

please, to Order No. 2, which is Committee of the Whole on the Hydro

Privatization bill.

On motion, that the House resolve itself into Committee of

the Whole, Mr. Speaker left the Chair.

Committee of the Whole

MR. CHAIRMAN (Snow): Order, please!

Bill 1, The hon. the Member for Burin - Placentia West.

MR. TOBIN: Thank you very much, Mr. Chairman. I want to

avail of this opportunity -

AN HON. MEMBER: Your time is up!

MR. TOBIN: Mr. Chairman, my time is not up but the hon.

member's time is getting pretty short.

I want an opportunity, Mr. Chairman, to speak to this bill.

It is my understanding we're still on the first aspect of it, clause 1, Mr.

Chairman.

I want to say that this past weekend I went where I go every

weekend, back to my district to mix and to mingle with people and all I heard -

there were two issues in my district this weekend, Mr. Chairman, one was the way

the Minister of Health misled the committee that he met with on the Burin

Peninsula a few weeks ago and the other issue was the arrogance and contempt of

this government as it relates to their actions regarding the sale and

privatization of Newfoundland and Labrador Hydro.

Now, Mr. Speaker, what we are seeing and what we saw today -

MR. FLIGHT: (Inaudible).

MR. TOBIN: I say to the Minister of Forestry and

Agriculture that he will have the opportunity to get up and speak when I'm

finished. I challenge him to get up and speak, the same as I challenge him to go

out to the people of Windsor - Buchans and hold a meeting and hear their views

on this bill rather than kowtow to the Premier of this Province.

Now, Mr. Chairman, this bill is a bad bill. This piece of

legislation is a bad piece of legislation.

MR. EFFORD: Why?

MR. TOBIN: Because it is giving away, I say to the

Minister of Works, Services and Transportation, it is selling out and giving

away to the money lords, Mr. Chairman, of Quebec, Ontario and other places

across this country to come in and to wipe up, to grab up and to take up,

everything that Newfoundlanders and Labradorians have owned for years -

SOME HON. MEMBERS: Hear, hear!

MR. TOBIN: - that's why it's a bad bill! Mr. Chairman, I

say to the minister that it takes courage, like the Member for Pleasantville

demonstrated in this House, to stand up to this Premier, to this dictatorial

government, to this dictatorship, Mr. Chairman, that has been put upon the

people of this Province. It is time for someone to stand up to that man there,

because if someone doesn't stand up to this Premier on this bill, god only knows

what he'll do next. I would venture to bet, Mr. Chairman, that what he will do

if he's let loose and not reined in, is he will destroy this Province.

AN HON. MEMBER: He has done a good part of it now.

MS. VERGE: And he will take the Liberal Party down with

him.

MR. TOBIN: He will destroy this Province, Mr. Chairman.

This piece of legislation and this bill gives too much power.

MR. EFFORD: You took him on before, didn't you, `Lynn'?

MS. VERGE: He will probably run against me, `John'.

SOME HON. MEMBERS: Hear, hear!

MR. TOBIN: Mr. Chairman, I would suspect that the

Minister of Works, Services and Transportation would not want to meet the same

fate against the Member for Humber East that his lord met in an election a

little earlier.

Now, what we have in this piece of legislation is a

government which wants to run roughshod over the people of this Province. It is

a government that wants to look after their buddies out there who are begging.

Don't ever think, Mr. Chairman, that no one approached this government to ask

them to sell Hydro.

AN HON. MEMBER: It never happened like that.

MR. TOBIN: Well, you wouldn't know anyway.

Don't ever think that. There will be people in this country

who will become rich men and women -

MR. W. MATTHEWS: On the backs of Newfoundlanders.

AN HON. MEMBER: What's wrong with that?

MR. TOBIN: - on the backs of Newfoundlanders and

Labradorians. That's what is wrong with it. Don't tell me there won't be shares

bought up by Quebecers in large amounts. Don't tell me that the legal work that

Hydro has done over the years, all the legal arguments that have been compiled,

that the two court cases that went before the Supreme Court of this country over

the years regarding Hydro - don't tell me that there aren't people in Quebec who

want to look at our arguments as to what Newfoundland Hydro has been trying to

do, and may want to do as it relates to the Churchill Falls contract. Don't tell

me the people of Quebec don't want it, and don't tell me they won't easily find

it when they sit around the table that will make up the board of this new Hydro.

MR. SULLIVAN: They own Newfoundland Power now, Fortis,

the Mainlanders do.

MR. TOBIN: That's right. Who owns Newfoundland Power, for

example, as my colleague, the Member for Ferryland points out?

Mr. Chairman, we, on this side of the House, are opposed to

the sale of Newfoundland and Labrador Hydro because we believe it is a bad deal

for this Province. We believe that it will cost the taxpayers of this Province

and the rate payers of Newfoundlanders, the rate payers of electricity in this

Province, Mr. Chairman, millions of dollars a year - $100 million more per year.

We all heard about Nova Scotia Power. When that was privatized there were to be

no job losses. The stance on maintaining positions in the Nova Scotia agreement

is exactly the same as in this one. Mr. Chairman, there are now 400 less people

working in Nova Scotia today as a result of the privatization of Nova Scotia

Power. So we have to be careful. We all know there are members opposite who

disagree with this. The Member for St. John's Centre, the Minister of Health is

against this bill, from what I can find out. I understand he is now all torn up

about it.

DR. KITCHEN: (inaudible) phone Steve Neary.

MR. TOBIN: I am not saying you phoned Steve Neary, but

there are people over there who called him.

AN HON. MEMBER: Name them.

MR. TOBIN: I just may. I may name them, Mr. Chairman. As

a matter of fact, some of them are not in the House right now. Some of them are.

SOME HON. MEMBERS: Oh, oh!

MR. TOBIN: Mr. Chairman, I can tell you, Steve Neary, as

a true Liberal in this Province, as a man who led this party -

SOME HON. MEMBERS: Oh, oh!

MR. TOBIN: Steve Neary has a feeling for Liberals but you

don't. As a man who had to stand up today out there and denounce - I was on the

steps today when he stood up and denounced this government, denounced the people

who make up this government, and yes, denounced the people who support this

government, particularly the people in the backbenches.

Why is Steve Neary doing this? You can say why I am doing it,

or you can question why the Member for St. John's East is doing it, or you can

question why the Leader of the Opposition is doing it if you want to, because we

are of different political affiliation. That is what the Premier likes to say.

But why is the former leader of this party doing it? Why is the Member for

Pleasantville doing it, why, I ask members opposite? Because they have the

courage of their convictions, they have belief in their principles, and they are

not prepared to put Newfoundland and Labrador ahead of a chance at a Cabinet

position - that is the reason, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. TOBIN: There are members over there who are putting

their principles aside, Mr. Speaker, throwing them away, because of their hope

that the Premier will invite them into Cabinet. The Premier is intentionally not

filling a position in his Cabinet - for what reason? so that he can whip the

members into line; so that the people who phoned Steve Neary and said they were

going to be voting against this bill now are hoping they can get into Cabinet.

And I would venture to bet, and would apologize if I'm wrong, that the Cabinet

position will not be filled until both of these bills are passed. That Cabinet

position will not be filled, so that members opposite will stay there.

Now, if the Premier just fills the position, if he has the

Cabinet shuffle that he promised last year by Christmas - last year he said he

was having a Cabinet shuffle by Christmas. If he has the shuffle and throws out

three or four and then there are another three or four like the Member for Eagle

River, who hasn't got a chance of getting in but is living in hope, if he throws

them out and you include some people like that, the Premier will not get this

bill passed.

What is he going to do? He is going to dangle the pearl -

MR. CHAIRMAN: Order, please!

The hon. member's time has elapsed.

SOME HON. MEMBERS: By leave!

AN HON. MEMBER: No leave.

MR. CHAIRMAN: The hon. the Minister of Works, Services

and Transportation.

SOME HON. MEMBERS: Hear, hear!

MR. EFFORD: Thank you, Mr. Chairman.

I want to take just a couple of minutes to give a position on

a couple of the petitions, and what the Member for Burin - Placentia West just

spoke about a couple of minutes ago. Because they are talking about some things

that are happening on this side of the House. Everybody is entitled to his own

opinion.

Standing up and representing the people of Newfoundland and

Labrador, I will take a second place to nobody in this House of Assembly or in

this Province. That is something I believe in. Do I believe in privatization?

Yes. From the first day that I went into business back in 1966, I have believed

in private business. I believe government should be in the position of setting

policy, setting directions, and doing away with half or 90 per cent of the

regulations they have. But no government - federal, provincial or municipal

government or whatever - should be involved in private business - absolutely

not. That should be left up to the private entrepreneurs of the Province and of

the country. Pretty well everything that government ever put its hands into yet,

in private business, the prime result, the bottom line is a loss of money - a

loss of money and a loss of jobs.

Let me address one issue, Mr. Chairman. Members opposite are

talking about having public hearings, that there is a great interest in the

people out in the districts and a great concern out there, and people want to

hear what is going on. I'm the first one to agree that people should have the

right if they are interested in hearing what is going on. That is the purpose of

this House of Assembly. That is why for two years I tried to motivate and help

with the fishery crisis in this Province to get people involved in

demonstrations. I intended to do what I did because I believed it was right for

the Province - for two full years, night after night after night. The most

important thing that has ever hit this Province, in its history, is the loss of

the fishery. And even at that, 40,000 jobs lost - if you got 120 or 130 people

out, you were lucky.

Now, let me tell you about last Friday night. I drove to

Harbour Grace last Friday night in a rain storm such as this Province hasn't

seen for years, to attend a meeting with my hon. colleague, the Minister of

Mines and Energy and the Member for Harbour Grace because they asked me to go

down to a public meeting re Hydro. I said, yes. I was late leaving.

AN HON. MEMBER: Who called -

MR. EFFORD: The Member for Harbour Grace. I was late

going down because I had to go to the airport at 6:30. Anyhow, they delayed the

meeting for about half-an-hour, and I went down.

MR. SULLIVAN: (Inaudible) the Board of Trade.

MR. EFFORD: The Board of Trade called the meeting; I was

called -

SOME HON. MEMBERS: Oh, oh!

MR. EFFORD: Now, I said I was invited by the Member for

Harbour Grace - I don't give a darn who called the meeting.

MR. SULLIVAN: I asked who called it and you said -

MR. EFFORD: The Board of Trade. Let me get to the point.

Now, Mr. Chairman, I went to that meeting and when I got to

the outside of the door, out on the street the cars were lined up, oh a

quarter-of-a-mile on the street all up around the Royal Canadian Legion, in

fact, I hesitated about going into the building, I said: My god, what kind of a

crowd is in there tonight? the place is blocked. Anyhow, I parked my vehicle and

I went in. When I got on the main floor of the building where the meeting was,

there were forty people, and I asked, `Where are all the people who are so

concerned about the privatization of Hydro? The streets are blocked - all around

the building, all these cars! You know, Mr. Chairman, where they were? down in

the basement playing bingo; down in the basement of the auditorium playing bingo

- and all of this hullabaloo about privatization of Hydro, the great interest.

Now, there is the concern of the people who are so upset

government was voted in last May to run the affairs of the Province and they

know that government should not be involved in private enterprise, that should

be left up to the people. And all of the people in that area - except the forty

people and it is not hard to name them, it is not hard to name the people who

were there from three districts, from Carbonear, Harbour Grace and the district

of Port de Grave, and the reasons why those people were there. Now, we have a

prime example of having public hearings. I went through it for two years having

meetings about -

AN HON. MEMBER: (Inaudible) public hearings.

MR. EFFORD: It was a public meeting.

SOME HON. MEMBERS: Oh, oh!

MR. FLIGHT: Forty people, `John' - did you say forty

people? Say it's forty people.

MR. EFFORD: So the Board of Trade called a public meeting

and it is not a public meeting? Well, make up your minds!

SOME HON. MEMBERS: Oh, oh!

MR. EFFORD: But I went there.

MR. SIMMS: (Inaudible).

MR. EFFORD: This is the first time I went to a public

meeting that is not a public meeting. I am totally confused by it. Now I know

why the people were down playing bingo, it was because they were confused, too.

Mr. Chairman, this is exactly the case, the Opposition are

not willing to listen. If this were an issue so important to the future of the

Province, those people would have been there at that meeting.

AN HON. MEMBER: You are not telling the truth.

MR. EFFORD: Well, I was there at the meeting, the news

media's quote was that there were forty people there - how could that not be the

truth? The Board of Trade called a public meeting. There were people there from

my district - I think there were four people; there were people there from

Harbour Grace and there were people from Carbonear, with a total of forty.

AN HON. MEMBER: (Inaudible).

MR. EFFORD: Yes they do, but where are the masses of

people that you are talking about?

MR. FLIGHT: Forty people, same as in Grand Falls, that's

eighty people all over Central and Eastern Newfoundland.

MR. EFFORD: Six of them were candidates who ran for the

Tories in the election back in the spring, that's who they were, candidates who

ran against us out there, in the month of May. Anyway, we are getting away from

the issue; I am just being distracted, Mr. Chairman, by the people opposite.

AN HON. MEMBER: (Inaudible).

MR. EFFORD: That's correct.

Mr. Chairman, the whole issue here is a piece of legislation

on privatization, to take Hydro from government's operation and put it to

private enterprise. The principle of privatization is one issue, the cost to the

Province is another issue, the $1.2 billion that we are guaranteeing. Nobody on

the Opposition side has made mention of the $100-plus million - $147 million -

AN HON. MEMBER: Yes, $147 million.

MR. EFFORD: - yes, $147 million that is paid out each and

every year to pay the debt -

AN HON. MEMBER: By whom?

MR. EFFORD: By the people of this Province - but not

Newfoundland Hydro.

AN HON. MEMBER: The rate payers.

MR. EFFORD: Where does Newfoundland Hydro get its money

if it is not from the people of the Province? One hundred and forty-seven

million dollars going to the finance markets in Japan, the United States,

Switzerland, Germany - $147 million to pay the debt charges on $1.2 billion, and

nobody says a word about that.

MS. VERGE: We pay twice as much in dividends.

SOME HON. MEMBERS: Oh, oh!

MR. EFFORD: I tell you, Mr. Chairman, if some of those

people were running private enterprise, they wouldn't be long going into

bankruptcy if they operated with that train of thought. It wouldn't take them

long to go into bankruptcy - I mean, $147 million going out to the finance

markets of the world, and that doesn't matter - relieving the Province of a $1.2

billion guarantee, that doesn't matter; borrowing $300 million and paying $30

million interest forever and ever into the future, that doesn't matter. I just

don't understand your economics, where you people are coming from.

The privatization of a company that will mean less of a

burden on all of the people in Newfoundland, and that doesn't make any sense.

You wouldn't know but you were going to take Hydro and move it up to Germany, or

move it to the United States, or move it outside the country. Newfoundland Hydro

will stay in the Province of Newfoundland and Labrador.

SOME HON. MEMBERS: Oh, oh!

MR. EFFORD: Go away, boy, don't be so silly.

Any person in this country or in this Province who wants to

buy shares in it, can buy shares.

MR. SULLIVAN: What did you do with Fortis? How much of

Fortis do we own? And that's only (inaudible).

SOME HON. MEMBERS: Oh, oh!

MR. EFFORD: Well, if they operated on that principle, the

shares that I have over in Japan and over in Rolls-Royce, I wouldn't be allowed

to buy them. How silly!

MR. SULLIVAN: We didn't give away water to buy our

shares.

MR. EFFORD: Nobody is giving away water. You see, this is

the misinformation that is given out. There is no water being given away, no

Churchill Falls being given away, and no rights except that now which Hydro

owns.

Anyhow, we have a very clear situation here. The situation is

that the Opposition made up their minds months ago. The only thing I regret from

everybody within this Province, if the same energies were put towards saving

what is the most important thing in this Province, our fishery, from those

people who are now spreading petitions and spreading the word about Newfoundland

Hydro, this Province of Newfoundland and Labrador would not be in half the mess

it is in today, and now we are hearing that this is more important.

AN HON. MEMBER: (Inaudible).

MR. EFFORD: I did it for two years, and as I told you, I

will take a back seat to nobody.

MR. CHAIRMAN: Order, please!

The hon. member's time has elapsed.

The hon. the Member for Humber East.

MS. VERGE: Thank you, Chairperson.

The Member for Port de Grave, and all the members opposite,

were elected by the people of the Province last spring to manage the shop, not

to sell the shop.

SOME HON. MEMBERS: Hear, hear!

MS. VERGE: There wasn't one word in the Liberal Party

platform last spring about selling Hydro. Hydro wasn't even mentioned. When the

Premier and some of the individual Liberal candidates were asked point blank if

they intended to sell Hydro, there was no direct answer. The Premier was asked

directly by an Open Line host in Corner Brook, and he avoided the

question. He just talked about the virtues of privatization.

Now, members opposite keep singing the virtues of

privatization, saying the government has no place operating a business. It can

always be done better and more efficiently by the private sector. Well,

Chairperson, Hydro is not a typical business. It is a monopoly. It is publicly

regulated. It is guaranteed a rate of return. It is a licence to print money. It

is fuelled by water - water that's free, and eternally flowing.

Chairperson, the only result of this transaction for the

Provincial Government and the people of the Province is negative. It is a lose,

lose, lose proposition. The Provincial Government's financial position will be

adversely affected. The Hydro debt is self-financing. We have established

clearly, quoting independent authorities, including spokespeople for the bond

rating agencies, that the government's contingent liability for the Hydro debt

doesn't affect the Province's credit rating, and Hydro is actually an asset for

the Province, it is a positive factor in the evaluation of the Province's

financial position.

Chairperson, the government talks about getting $350 million

net from the sale of Hydro so they will be able to forego borrowing for a year

or so and reduce spending on debt servicing costs each year by $25 million.

Well, that sounds pretty good. Saving $25 million a year is certainly a

worthwhile objective in this climate, in this economy. What they are not saying

is that they are going to spend on average more than twice that by giving

concessions to the new private corporation and Newfoundland Power. To gain $25

million they are going to give up $50 million, and it will be more than that in

the early years, because they are going to try to hoodwink the voters until

after the next election. They will be giving more than $50 million in the early

years, but if you average it over the first ten years following the sale of

Hydro, to gain $25 million a year they will be giving up $50 million.

Worse than that, electricity prices are going to go up. How

can the Premier talk about selling Hydro benefitting the economy and being a

boost for the God Almighty private sector when businesses as well as

householders will have to pay more for their electricity? Even the Premier

acknowledges that electricity prices are going to go up more than they would

otherwise following the sale of Hydro. The Premier is grossly understating the

rise in electricity cost that is going to result.

Now, Chairperson, the government haven't given one single

solid reason why we should sell Hydro. Opponents of Hydro, who belong to every

political party and no political party, who are found in every walk of life from

coast to coast to coast of the Province, have given a whole litany of reasons

why we oppose the sale of Hydro, starting with rising electricity rates,

continuing with job loss - including alienation of our water rights, because,

make no mistake, this legislation says very clearly and explicitly in fine legal

language that the water rights will go to the private corporation, and not only

the developed water rights that go with Bay d'Espoir, Cat Arm, Hinds Lake and

Paradise River, but also this legislation authorizes the Minister of Finance,

without even reference to the House of Assembly, to transfer to the new private

corporation undeveloped water rights anywhere in the Province.

This legislation is a disgrace. Stand-alone sale of Hydro's

assets on the Island leads to nothing but negative consequences for the

government, the taxpayers and the rate payers, but worse than that, the

legislation opens the door for the vast undeveloped potential of Labrador hydro

power to be exploited by the few against the interests of the citizens of

Newfoundland and Labrador.

Now, Chairperson, members opposite do not have a mandate to

sell Hydro. They didn't include selling Hydro in their election campaign

platform last spring, they didn't include it in their much talked about

Strategic Economic Plan. When asked directly, the Premier and other individual

Liberal candidates denied thinking about selling Hydro or else avoided the issue

altogether. So the only legitimate way for this government to proceed with the

sale of Hydro is to not only have public hearings but then call a referendum.

Have public hearings as a means of educating, informing and involving people,

then have a referendum and see what the people want. It is the people's

resource.

The hydroelectric generating plants at Bay d'Espoir and Cat

Arm and the others on the Island have been built with the people's money. It was

only last year that the debt on Bay d'Espoir was paid off. Now that we own Bay

d'Espoir, mortgage-free, debt-free, people finally stand to benefit from the

investment they and we have all made by paying our electricity bills over the

year. The water that generates the power belongs to all of us. It's perhaps our

most valuable remaining natural resource. We've done a very poor job, as a

people, at managing our other natural resources, renewable or non-renewable.

The Minister of Works, Services and Transportation talked

about the tragedy of the mismanagement of the ground fish stocks. Well for

heavens sake, learn from our past mistakes and avoid another tragic mistake,

come to your senses before it's too late. The members of this House of Assembly

have a chance to avoid another terrible mistake. Think how you would feel if

you'd been in the House of Assembly in the 1960s when the Upper Churchill deal

was done. Two members opposite were in the House of Assembly at that time and

they're the same two members who are steering this terrible deal now and they

are the Premier and the Minister of Justice.

Chairperson, I appeal to other members opposite who aren't in

on the full agenda to stop and think, stop and read this legislation because,

Chairperson, I have the impression that a majority of members opposite haven't

even read Bill 1, the Hydro Privatization Bill or the companion bill, Bill 2,

the Electrical Power Control Act. I urge members to stop and read these bills,

think about what they mean, consult independent people about the implications of

these measures, look at it in its totality, talk to your people, listen to what

your constituents have to say. What I hear from my constituents, the people of

Humber East, is that an overwhelming majority - and I'm talking 98 per cent plus

- are against the privatization of Hydro. I've given them information at two

public meetings I've had on the issue. The first on November 25 and the second,

the first Saturday in March, a bit more than a week ago now and, Chairperson, at

the two meetings there was one individual who was in favour of the governments

proposal. He didn't actually defend the initiative on its merits, he simply

talked about wanting Newfoundlanders and Labradorians to have the chance to buy

shares, he happens to be an investment dealer.

Chairperson, on its merits this deal stinks. There is nothing

in it for the Government of Newfoundland and Labrador, there's nothing in it for

the taxpayers of Newfoundland and Labrador and there's nothing in it but higher

prices for the electricity consumers, be they householders or businesses.

Chairperson, this is insane. The deal is so crazy that many people, from taxi

drivers to engineers, are saying to me, there's got to be something hidden here.

There's got to be another agenda that the Premier and the Minister of Justice

are hiding from us. It's so illogical -

MR. CHAIRMAN: Order, please!

The hon. member's time is up.

MS. VERGE: Thank you, Chairperson.

MR. CHAIRMAN: The hon. the Minister of Finance.

MR. BAKER: Thank you, Mr. Chairman. First of all I'd like

to commend the Member for Kilbride for asking for a reasoned debate on this

topic. I agree with him and I think the debate should be a reasoned debate,

unfortunately it gets tied down and bogged down to often in character

assassination, imputing motives to other members, they haven't read the bill,

the Opposition doesn't know what they're talking about and so on. Mr. Chairman,

it's gotten bogged down in an awful lot of these unreasoned arguments which

include charges of being Nazis, Fascists and all these insidious types of

comments. I commend the Member for Kilbride for pointing out that we should have

a reasoned debate on this particular topic.

Mr. Chairman, I want to deal with a couple of points and

there are many that I would like to deal with, we only have a very short time,

I'll get up again. First of all the concept of: it doesn't really matter if we

cut our borrowing. It doesn't really matter if we lower, over the next few

years, the total debt that we otherwise would have had to pay. Mr. Chairman, I

don't know if members of the House realize that with the federal government

right now thirty-five cents of every dollar we pay to them goes to service the

debt. I don't know if members realize that this particular government in this

Province, every year for the last number of years, has had a tremendous

operating surplus - a tremendous operating surplus - taking in hundreds of

millions of dollars more than we are actually spending on the services we are

providing. We have been actually taking in hundreds of millions of dollars a

year more than we spend on providing services for people.

Now the function of government is to provide services for

people, and you might say, well, what's the big fuss then? If we have this

tremendous surplus, a couple of hundred million dollars at least a year, then

what are we talking about when we say we are in financial difficulty?

The answer is very simple, because

whereas we have an

operating surplus of a couple of hundred million a year, we have to pay $400

million or $500 million to service our debt, and it is the debt service charges

that are killing us. The same thing is happening to the federal government. Do

we ever want to see the day when ninety cents of every dollar we collect goes to

service a debt, and then we have none left over to provide for a hospital

system, and an education system, and social services? Do we ever want to see

that day? Is that where we are headed? So I think it's very, very important that

government lower its borrowing as much as possible.

Now then, Mr. Chairman, we will -

AN HON. MEMBER: (Inaudible).

MR. BAKER: Hon. members will have a chance to get up and

make their points. I am calling, as the Member for Kilbride did, for a reasoned

debate on this topic, and I would like to be given the opportunity to make my

points.

Mr. Chairman, it is important that we lower our debt because

then that releases more of the tax dollars that we collect to put back into

health and education and social services. It is very important that we do that

because, don't forget, that is the function of government, to provide services

for people. If we can get some of the equity that we have, as a Province, built

up in Hydro, and take that equity to use to provide services for people, and

free up money to provide services for people, then I think we have done a

marvellous thing, because that is our function.

If we can substitute our equity, we can substitute private

capital investment for our equity, and somebody else then carries the burden of

debt and we don't, and we can reduce our borrowing consequently, then that frees

up more money to do what government should do - provide the best service

possible for the people of the Province.

Mr. Chairman, the concept of debt build-up is key to

decisions that government have to make in the future. That is one of the reasons

- not the only reason - we are into the privatization of all of the things that

we are trying to privatize, because we want to avoid a build-up of debt. We want

to free up more money to provide services to people, and that's what people

deserve and need and we, as government, must provide it for them.

It is all very well to get caught up in an emotional argument

and say, we are giving away water. Mr. Chairman, in this Province right now we

have a private company that has water rights. We have private companies that

have water rights. There is a power development in Norris Arm, done in the

1950's, early 1950's, or mid-1950's, Newfoundland Light and Power; that's their

operation, and they have the water rights to the ponds in back. So those ponds

didn't disappear. The water is still there. It's still flowing through the

turbines. The people of the area still have the use of these ponds - a great

fishing area, as a matter of fact, tremendous brook trout in there. The people

still have the use of it. There is no limitation, and yet those water rights are

held by a private company. It hasn't inhibited the rights of Newfoundlanders and

Labradorians to go in and use that water. It is not something that has

disappeared. It is not something that is gone. It is there for our use. Yet, one

of the main arguments that members opposite keep making is this giving away of

the water rights.

Number one, the words `giving away' are wrong. We are

achieving a financial benefit from it that will benefit Newfoundlanders and

Labradorians forever - not giving away anything - and no matter who is there,

water rights have to be tied to hydro developments. The only way that you can

not have water rights in somebody's hands is if you have no hydro development.

If you say: We will have no Bay d'Espoir; we will have no Rattling Brook; we

will have no Cat Arm; we will have nothing. Then, of course, there is no such

thing as water rights; but as long as we are going to have hydro developments,

the water rights must be tied to that development because whoever is doing it

has to be guaranteed of a consistent supply of water, a supply of water down

through the years that can provide the electricity that again the people of this

Province need. The water rights have to be tied to hydroelectric development but

that does not mean that anything disappears. The water does not disappear, it

stays where it is, it can be used the way it is now, there really is no change

and the whole concept of water rights I believe is a very misunderstood one, so,

Mr. Chairman -

AN HON. MEMBER: (Inaudible) royalties.

MR. BAKER: Well, I can deal with royalties. I can deal

with the interest that we now pay, close to a billion dollars or a little over a

billion I suppose, that is borrowed and that the interest has to be paid on. I

mean, there is an awful lot of interest now that has to be paid on that debt.

This Province has about 18 per cent equity in Hydro; we have about 18 per cent

equity in Hydro. The other 82 per cent is provided through borrowings on which

interest has to be paid, and as a previous speaker for our side pointed out that

means that these interest payments are going to the bondholders all over the

world, primarily in New York I believe, so there is a substitution certainly of

dividends for borrowing, no doubt about that. There is a chance that some of

these dividends remain in this Province; the borrowings don't, the interest on

the borrowings all end up going out of the country; they end up going out of the

country. At least through dividends, if people buy shares some of it will stay

in the Province, a lot of it will stay in the country, at least we will be

retaining this money so, Mr. Chairman, that is a totally false argument. You

cannot pick out one or two little things like this and try to build them up.

The argument about the pension fund. The argument about the

pension fund is the most blatant exaggeration, one of the most blatant ones that

I have seen in this whole exercise. We have unfunded liabilities in our pension

funds; we owe the money, we have to correct that situation in all of our pension

funds. If Hydro is sold or not sold, we still have to do that, and that is

something that has to be done because it must be done, and yet members opposite

look upon this as being a cost of privatization. It has nothing to do with

privatization. Fixing the pension plans has nothing to do with privatization I

say again, yet members opposite continue to throw in tens of millions of dollars

to fix up the pension plans, a cost of privatization. They also throw in the

foreign exchange losses; that is a cost of privatization. What balderdash!

The foreign exchange losses will exist whether Hydro is sold

or not and therefore is not a cost of privatization I will say to members

opposite. You have to understand that. You have to understand that. The foreign

exchange losses will be there whether Hydro is sold or not, that is not a cost

of privatization; so, Mr. Chairman, there are a lot of misconceptions in this

whole debate and I will continue to try to straighten out members opposite as we

go through each debate.

MR. CHAIRMAN: The hon. the Member for St. John's East.

MR. HARRIS: Thank you, Mr. Chairman.

I would like to join in this debate to try and talk about a

few issues that some hon. members have been discussing this afternoon in debate.

Before I talk about some of the issues specifically though I

would like to address the issue that seems to be prevalent by members opposite,

that the people of Newfoundland don't care about this deal, they are not

interested in going to meetings to oppose it and what not, but I want to say,

Mr. Chairman, that I have, outside of government circles, I have up until

yesterday, failed to meet one single person who supports the privatization of

Newfoundland and Labrador Hydro. There are people who said they didn't know

enough about it. A number of people said, well, I don't really know enough about

this, we haven't really been fully informed. A lot of people said that,

everybody else, up until yesterday, said that they oppose the sale of

Newfoundland and Labrador Hydro. They thought it was bad for Newfoundland, it

was a bad deal for the Province, it was bad for us to give up this great asset

and resource.

The one exception was yesterday, Mr. Chairman, when I met

someone who was opposed to the opposition, he favoured the sale of Newfoundland

and Labrador Hydro and it turns out that he was a stockbroker, that he was an

individual who supported the sale of Newfoundland and Labrador Hydro and of

course, as one of those people who is in the business, stands to make a fair bit

of money if this sale goes through, because he of course, and his company, and

his fellow stockbrokers, will make significant commissions on the sale of this

bill. That is the state of mind of the people who I encounter. Every single

person, until yesterday this one, either oppose the sale of Newfoundland and

Labrador Hydro, or say that there is not sufficient public information about it.

I next want to address some of the issues now just recently

raised in debate by the Minister of Finance. He starts talking about the debt

and how there is $147 million per year interest paid on the $1 billion or $1.2

billion worth of debt of Newfoundland and Labrador Hydro. Well, that may well be

true. I have no doubt that it is. I say in response to that, what is going to be

the difference when Hydro is privatized? A large portion of that debt is going

to be turned into equity. A lot of the debt will still exist. A large portion is

going to be turned into equity. I say to the Member for Port de Grave that

equity is more expensive than debt. Equity is more expensive to the rate payers

of Newfoundland and Labrador Hydro than is debt. I say that based on my own

experience of appearing before the Public Utilities Board on rate hearings.

There will be an attempt to achieve in a private Hydro

corporation a 50/50 debt to equity ratio. Right now it is 82/18. There will be

an attempt to achieve a 50/50 debt to equity ratio, which means that a

significant portion of this debt, perhaps one-third of it, will be turned from

debt at perhaps an average of 10 per cent or 9 per cent, which is what it is

now, to equity at about 13.5 per cent or 14 per cent. That equity will have to

be paid for out of the rates, which is going to mean a significant boost in the

rates to the people of Newfoundland and Labrador who have to pay for it.

It is all very well to get up and make some simplistic

argument about debt. I've heard members opposite say: We don't really own

Newfoundland and Labrador Hydro any more because there is debt associated with

it. It is like telling someone they don't own their house because they have a

mortgage. That kind of simplistic talk is what we've heard going for argument on

the opposite side about this.

Yes, we do need a reasoned debate. I would like somebody who

doesn't have an axe to grind in this one way or the other to be able to say, in

an objective report to the people of Newfoundland, what is going to be the cost

of the transfer of this debt to equity in dollars and cents, and where is the

money going to come from. Because if you take this $1.2 billion worth of debt

running at an average - and I think - I worked it out, but I'm no actuary. It

looks like about 10 per cent, 10.2 per cent, 10.5 per cent, maybe. Somewhere

between 9.5 per cent and 10.5 per cent on all of the debt of Newfoundland and

Labrador Hydro, fully serviced, fully financed. Not one cent comes out of the

taxpayer. In fact, the taxpayers get about $10 million a year from providing a

guarantee.

AN HON. MEMBER: What is the service cost?

MR. HARRIS: The service cost of that debt is internally

looked after by Newfoundland and Labrador Hydro, not by the taxpayers, Mr.

Chairman, but as part of their rate cost of operating Newfoundland and Labrador

Hydro.

If you take that debt and you transfer some of that debt to

equity, all of a sudden the cost goes up. Instead of costing $147 million to

service it, it is probably going to cost $175 million or $180 million. I don't

know why the Minister of Finance, who is supposed to be the economic genius in

the government, who handles all these hundreds of millions of dollars of

taxpayers money, why wouldn't he in his speech tell the House of Assembly that?

That that $147 million a year, all of a sudden it is going to be $175 million or

$180 million, or $190 million? That is going to be paid now, or after the

privatization, by the same people who now pay the $147 million. Why didn't he

tell them that?

If we are going to have a reasoned debate, which I think we

should have, then we have to have the facts on the table. We have to have the

real facts on the table, not some talk about: There is an awful lot of debt and

interest costs a lot of money and we got to pay for these bonds.

Let us have the true facts. Let us have the real story. Let

us let the people know that the cost of the equity, the borrowing, the

capitalization, the cost of the capitalization of Newfoundland and Labrador

Hydro, when it is privatized, is going to go up, not down, and the people who

now pay hydro rates are going to have to pay more. That is what I think is a

fact. Now, if that is not true then let us get somebody over on the other side

get up and tell us that is not true. We heard the speech of the Minister of

Finance but he did not say at any point in time that the cost of capitalization

to the rate payers of Newfoundland and Labrador Hydro is going to increase by

getting rid of some of that debt and not decrease, because when you change it

into equity the people who buy these shares, these handful of Newfoundlanders,

and vast majority of those in Quebec and Ontario who buy these shares, they will

expect a return on investment of something in the order of 13 or 14 per cent,

Mr. Chairman.

That is why they buy the shares in the first place, that is

why the shares are such a gold mine, that is why there is going to be an

instantaneous sale of these shares as soon as they are released. They are going

to be lined up to buy them, and the reason they are going to be lined up to buy

them is because they know that the Public Utilities Board of Newfoundland and

Labrador will guarantee to these investors in Quebec and Ontario a rate of

return of about 13 per cent, plus. They will have some expert fly in from the

States somewhere at $200 or $300 an hour to testify to the Public Utilities

Board as to exactly how much, whether it is 13.58 per cent or 13.75 per cent, or

whatever it is that is required. That is what the Public Utilities Board will

grant them.

Now, the Premier can say all he wants, that that is now being

controlled by Newfoundlanders and Labradorians sitting on the Board of

Commissioners of Public Utilities whose job it is to guarantee a return on the

investments of these shareholders who live somewhere else. Now, is that

stimulating the private sector? No, that is encouraging money that is being paid

by the rate payers of Newfoundland and Labrador Hydro to go into a fund that

filters it out to investors in Quebec and Ontario. I am opposed to that, Mr.

Chairman, and we need a reasoned debate on it. We need a reasoned debate on it,

we need a public debate on it and we need more time to have that public debate.

We need to see this go all over the Province to let the people have their say

and hear more about this.

Let the Premier, if he can, explain why it is it would be

more acceptable for the people of Newfoundland and Labrador as rate payers of

Newfoundland and Labrador Hydro to pay an extra $30, $40, or perhaps $50 million

more. We do not even have the figures. Explain to them why that is more

desirable so that investors in Quebec and Ontario - we do not know who they are

yet, someone is allowed to get as much as 20 per cent of this company. I do not

know who plans to do that. We have not heard that. We have not heard who plans

to get up to 20 per cent. We know it does not take 20 per cent ownership of a

widely held corporation to control it. We know that. Paul Desmarais and these

big industrial magnates can control widely held corporations with a little less

than 12, 14, or 15 per cent of the shares. What I would like to know, Mr.

Chairman, is whether there is any discussion about that in the back rooms of

government, as to who is going to take up these big chunks of shares and end up

controlling the Board of Directors of Newfoundland and Labrador Hydro? That is

what I would like to see some discussion on, Mr. Chairman.

MR. CHAIRMAN: Order, please!

The hon. member's time is up.

The hon. the Member for St. John's South.

MR. MURPHY: Thank you, Mr. Chairman.

First of all let me say that we are here debating a bill and

up until now hon. members opposite have been hooting and hollering, screaming

and shouting, but we have not opened the bill and debated one issue.

AN HON. MEMBER: (Inaudible)

MR. MURPHY: I am going to respond to that gentleman right

now if the member gives me a chance.

I just want to make a point about all this purification. I

say to members in the back of Her Majesty's Loyal Opposition, just to remind

them about public hearings, public meetings, and what have you. I have nothing

against that. I think it is time to stop shouting.

AN HON. MEMBER: (Inaudible)

MR. MURPHY: Perhaps you should have stayed at basketball

because you certainly could not have been any worse than you are here. I can

only respond, I say to hon. members, to constituents in my district the same as

other hon. members, and I honestly, sincerely, tell this hon. House that I have

had seven phone calls on the privatization of Hydro. Maybe the reason is because

the Member for Humber East, who was on her feet not long ago, said that nobody

on this side - now I showed hon. members my campaign literature almost a year

ago, which explicitly said the privatization of Hydro. Now hon. members know

that.

AN HON. MEMBER: That was not yours.

MR. MURPHY: It was my position. I can only speak from the

seat in which I sit, I say to the hon. member, but let me remind the hon.

members in the back, when Meech Lake was being debated, when Meech Lake was out

there prominent, this hon. House closed, the taxpayers of this Province provided

each hon. member, fifty-two members, the funding to go into their districts and

to hold public meetings, and get the opinion of their constituents and bring it

back here.

Now let me remind hon. members in the front, and tell hon.

members in the back, and anybody who wants to listen, that hon. members came

back to this House on the Meech Lake debate with 95 per cent, and 97 per cent,

and 96 per cent of their constituents - including the Member for St. John's East

- supporting the government position, and still and all we were upstairs in the

old House, they stood in their place and voted against Meech Lake. Now is that

fact or is that fiction?.... That is fact.

MR. CHAIRMAN: The hon. member for Burin -Placentia West.

MR. TOBIN: Mr. Chairman, what we are seeing, what the

Member for St. John's South is saying here, is what we have been hearing on this

Hydro bill the whole way through, and that is untruths, and the record must not

be allowed to stand.

The Member for St. John's South knows full well that the

Premier denied a vote on the Meech Lake Accord just prior to the time the vote

was to be held. The Premier made that decision. The records will show that, so

be truthful. For God's sake, be truthful.

SOME HON. MEMBERS: Hear, hear!

MR. MURPHY: Mr. Chairman, I say to the hon. Member for

Burin - Placentia West, he knows full well in debate - never mind the vote; the

vote was free - in debate is what I said.

I remember the hon. Member for Kilbride, the other hon.

member now sits in his seat, standing up and openly admitting that 95 per cent

of the people in his riding told him not to vote against Meech Lake, so I say

that. So that takes the theory of public meetings and what hon. members opposite

read into them.

Now let me talk to the hon. Member for St. John's East a

little more about the bill. The hon. member talks about the $1.2 billion worth

of debt. Now that particular $1.2 billion today is in the marketplace of the

world in bond issues at somewhere in the vicinity of 10 per cent or 10.5 per

cent.

AN HON. MEMBER: (Inaudible).

MR. MURPHY: No, it's very little late, I say to the

member, and if you look at the list it's more like twelve in a lot of places,

and it's not in Newfoundland. The bond issue that now controls 82 per cent of

the capital worth of Newfoundland and Labrador Hydro is held mostly in places

such as Japan, in Switzerland, in Sweden, in Germany, in South America, and in

the United States. Those bond issues are all over the world. Is that

Newfoundlanders, I say to the hon. member?

Now I say to the hon. Member for St. John's East, $147

million a year interest that is paid out to those bond holders is paid by

Newfoundland and Labrador Hydro. So I remind hon. members that they are

pontificating about who owns Hydro. So if they are right - and let's assume they

are right - that the public of this Province owns Hydro, then the public of this

Province is paying $147 million to service the bond issue that is now owned by

people all over the world.

Newfoundland and Labrador Hydro, I say to the member, is 18

per cent equity. If you look at the scale of thirty years that Hydro is

existing, from the time a Liberal government built Hydro, started Hydro, and as

the Premier has said to you time and time again, the only reason that the

government of the day got into the electrical business, or the generation of

electrical power, was the private companies did not have the capital, nor did

they have the signing authority, from Montreal Engineering, and other people who

owned it at the time, they could not develop Bay d'Espoir. They couldn't.

AN HON. MEMBER: Now we own (inaudible).

MR. MURPHY: We don't own Bay d'Espoir, I say to the hon.

member. Listen, book value is one thing - you may buy your house for $200,000 or

$250,000 or whatever the members house is worth, but twenty-five years from now

it may not be worth $225,000. If the marketplace says that the property is worth

it - but you got maintenance, you got all kinds of problems associated with the

upkeep of that particular property and for the hon. members opposite to say that

we own Bay d'Espoir is not correct. I ask the hon. member this, tomorrow if we

have four generators or four turbines that kick out of place because of a

structural problem, who's going to pick up the $250 million that it costs to put

those turbines back on? Who's going to have to sign the paper to do it? The

people of this Province, that's who's going to have to do it and the hon. member

knows it. Where on the paper now, if anything goes astray with Hydro or any part

of Hydro, this government is going to be responsible to sign those financial

documents because there is no financial institute that will give us the money to

do the maintenance that's needed.

It's time to stop - it's time to tell the people the truth.

If you open

Section 15 of the act itself you'll see the rates, the regulations

and rate issues, the breakdown of it and what it says in there but I don't want

to read it, let's debate it, let's open up the act. That's what the people are

here for.

MS. VERGE: Read it.

MR. MURPHY: Yes, I'll read

Section 15(

c) it says, `adopt

and maintain the rate stabilization plan of old Hydro on the basis reflected in

the audited financial statements of old Hydro for the year ended December 31,

1993,' which guarantees - now we've also in the other bill put in place -

MS. VERGE: Read (a).

MR. MURPHY: I don't need to read (a) - if the member

wants me to read (

a) I'll read it for her, `for regulatory purposes under the

Public Utilities Act compute its income tax expense using the taxes payable

method of accounting.' Now, what I say to the hon. member is simply this, that

in the other bill associated with the Hydro bill, which will be introduced by

the House Leader within the next week or so reaffirms the Public Utilities Board

which has been kind of drifting around since the days of my deputy mayor friend

- and I'll get into that down the road -

AN HON. MEMBER: What?

MR. MURPHY: I'll talk about that down the road when he

was on it and what happened - we are now putting in place a public utility

system whereby the books will be open the same as they are to Hydro, the same as

they are to Newfoundland Power and the same structure - as a matter of fact it

will be stronger and it will protect the public and the hon. member knows - the

hon. member full knows - well you lived with it for seventeen years, why didn't

you change it?

MS. VERGE: Who's on it now?

MR. MURPHY: Who's on it now? So it's who's on it. See,

the member always got the go and find somebody - find some under the table

reasons, she can't put it on top, she can't say that there's somebody on the

Public Utilities Board that has any grain of sense because she didn't appoint

them.

MR. SULLIVAN: Are you saying that it's not strong enough

now?

MR. MURPHY: I'm saying it is strong now, we'll make it

stronger, I say to the hon. Member for Ferryland.

AN HON. MEMBER: (Inaudible).

MR. MURPHY: I didn't say that. Now the hon. member is not

going to put words in my mouth. He's not going to put words in my mouth, he

tries but he's not going to. I said it's strong now but this government will

make it stronger. It's the power of the board not the individuals I'm talking

about, I say to the hon. member.

AN HON. MEMBER: (Inaudible).

PREMIER WELLS: The Electrical Power Control Act.

MR. MURPHY: Thank you, Premier. The Electrical Power

Control Act which is associated with this bill, okay? Hon. members talking

constantly about who reads and who don't read the bill. It's time for you people

to stop playing on the hearts and start telling the people of this Province the

real truth, that this is a good deal. That this is a good deal in 1994 looking

at the circumstances.

MS. VERGE: (Inaudible).

MR. MURPHY: Listen, the hon. member has gotten up in her

place day after day after day with ammunition supplied to her by the past

chairperson.

AN HON. MEMBER: That's not true.

MR. MURPHY: No, how do you know that it's not true, I say

to the hon. member, how do you know?

AN HON. MEMBER: Is it true?

AN HON. MEMBER: He wants to know the source.

MR. MURPHY: I got lots of proof. Now I say to the hon.

Member for St. John's East, I didn't interrupt any of you people when you were

up. There is no trouble to know when you are making a point with the hon.

members opposite. There is no trouble to know when you are making a point with

them when they can't take it they start barbing at you, that's the problem. I

say to the hon. member, look at your facts and figures and let's debate it.

Let's debate them, let us open the bill and debate it.

MR. CHAIRMAN: The hon. member's time is up.

The hon. the Member for Waterford - Kenmount.

MR. HODDER: Mr. Chairman, I think it is quite obvious by

this time that many people in this Province have serious questions about this

deal, and certainly, if you are to pay even a casual notice to the people who

have come out in the public galleries today; the people who were here several

nights ago, the people who called in to Open Lines, the people who have called

to our offices, the people who have signed petitions, the people whom we have

met in our social interaction within the Province, it becomes obvious to all

hon. members that many citizens of Newfoundland and Labrador are not convinced

that this deal is in their best interest.

Some fear that it is, or that it resembles the give-away that

occurred in the Churchill Falls deal with Hydro Quebec. Some people fear that

history is repeating itself, they fear that our Hydro resources which they

believe and know to be our birthright, they fear the long-term consequences and

they can be forgiven if they have trepidation and worry about the long-term

impact of this particular proposal on their children and their children's

children.

Much of the debate in this House has not been terribly

focused and certainly, I suppose that one can sometimes view the House as being

theatre, sometimes one can view it as in this particular case, sometimes we view

the House more as a comedy, but for many cases I see for the public of

Newfoundland and Labrador, it is a tragedy. It is a tragedy if we don't allow

the public to have some input into the decision-making processes that we are

going to take in the next little while.

Now, Mr. Chairman, what people are really afraid of, again as

I repeat, are the long-term consequences. They know that what we do here in the

next few days or several weeks will have consequences for themselves and for

their children and for their children's children, because they also know that

once we make this legislation law in this Province, that Newfoundland Hydro will

be lost forever. I don't think any hon. member would disagree that once this

deal is made, once Hydro is sold, there is not much of a probability or

possibility that we as a government could ever buy it back; that's why people

want the process slowed down. That's why people are saying, wait a little bit.

Maybe the government is right, maybe they haven't explained their case for

privatization in the way that they would like to or perhaps in the way, or the

public is saying in the way that they should.

Now I heard people say this afternoon, hon. members say that

they didn't believe in public hearings because there was no great, big

demonstration. Some hon. members rose to say that there was not this great, big

demand for public hearings. Well, Mr. Chairman, I can only say to you, what kind

of demonstration do you want? Do you want people to go further than they have

gone, do you want people to go out and do more than sign petitions, to come to

the House of Assembly in record numbers, to talk to elected members and say: we

want to have a chance to participate? What kind of evidence do hon. members

want? What would persuade the government that they should slow the process down

and have some public input by the Legislative Review Committee or some other

form of public hearing?

Why is it that we have to make this decision today or

tomorrow? Why can't we have proper expert opinion brought in that we can analyze

the positive aspects of the privatization, analyze the negative aspects of it,

put it before the public. This is their Province. We have been given a trust for

a period of time. We are not here to say that the public has to put up with us

regardless of what they think, or this idea that: In another two or three years

we will go back and we will ask them and we will be accountable at that point in

time.

Mr. Chairman, let me say to you that there is a terrible

inconsistency. For example, in today's paper there is a notice from the Town of

Torbay. Today's paper. A development notice. It says: Torbay is in the receipt

of an application to operate an office in the home of Mr. P. Duffy, Bauleen

Line, Torbay, for the intent of the practice of law (inaudible) Mr. Michael

Duffy, beginning on or about April 12, 1994. Then it proceeds to say: The people

of Torbay have an opportunity to make representation and there will be a public

meeting held at which the people who believe this is a good idea for the Town of

Torbay to put forward their arguments, and those people who believe that it is

not in Torbay's best interest to put forward their arguments.

On Saturday in the local paper there was a notice from the

City of St. John's. They were advertising for public comment on a proposal to

amend the City of St. John's municipal plan. The councils here, Torbay or the

City of St. John's, they are operating according to the laws of this Province.

The Council of Torbay has the elected mandate to operate the municipal affairs

of Torbay. The Council of St. John's has the elected mandate to operate the

affairs of the City of St. John's. By law they must provide for the public to

have an input into decision making.

All I'm saying is, let's be a little bit consistent. Last

month in this very Chamber in committee, we had three days of hearings trying to

straighten out a designation problem between chartered accountants and certified

general accountants. Three days of meetings here in this very Chamber. We've had

two months, of two different times in the process, of having the entire

Electrical Districts Boundaries Commission go across this Province, spending

hundreds of thousands of dollars to decide on the electoral boundaries that will

be followed in the next provincial election, probably in 1997 or 1998.

Why then can we not as a people, as the electorate of this

Province, provide the people of this Province an opportunity to come before a

legislative review committee to tell what they believe and what they understand

are the implications of this particular piece of legislation? All I'm saying is

that as a democrat, as a person who believes, after many years of municipal

experience, in the power of the people - and this should be the people's House.

Mr. Chairman, we pride ourselves and say: This is the people's Chamber. We say

that this is the people's House. Let's make it the people's House! Let's do the

thing that is right. Let's walk our talk. Let's not say that: We got elected,

and now that I'm elected, thank you very much, I will now decide what I will do

for the next number of years.

MR. CHAIRMAN: Order, please!

The hon. member's time is up.

The hon. the Minister of Employment and Labour Relations.

MR. GRIMES: Thank you, Mr. Chairman. It is a pleasure to

take a few minutes to make a few comments in this debate at Committee stage.

I just wanted to - rather than get into again some of the

specific details of the legislation, because we haven't moved past the name of

the bill yet and gone into the clause by clause examination. I know that my

friend and colleague, the Minister of Finance, will take opportunities in this

debate to again spell out specific details on behalf of the government, and

members opposite will be quite interested in hearing that, but basically the

thing that I wanted to register in this general discussion at the beginning of

the debate of the bill in a clause-by-clause fashion is somewhat of a

disappointment in terms of how the debate so far, both inside this Chamber and

outside the Chamber, has gone in terms of the tone and tenor of it.

I believe I have a great respect for all the people in this

Legislature. Every one of us went door-to-door, and there were people in the

areas that we represent who put their confidence and faith in us for a period of

time.

There is no doubt, I think, that everybody here went around

to try to get elected on the basis of trying to do something that would be in

the best interest of the people of Newfoundland and Labrador - no question

whatsoever - and I don't think that is any different with people on this side of

the House and members opposite. Which side you sit on is, many times, just a

quirk of fate and circumstance, but I think that the people who come forward and

offer themselves do it because they would like to have an opportunity to

participate in something that would be in the best interest, and make things a

little better for the people of Newfoundland and Labrador.

In my consideration of the issues that are before us now, and

in the people here, I am surprised again that people who went and got elected

are willing for - it cannot be characterized as anything else other than - pure,

partisan policy party lines, in terms of being willing to look at an issue and

suggest that thirty-four or thirty-five people over here - almost all of them

except one, and this party has always said people could speak their mind,

completely opposite to the group over there - that in fact a group of people who

would look at and examine the issue to the extent that we have at this point,

will conclude that this is in the best interest of the people of Newfoundland

and Labrador.

So far the Official Opposition, and our friend, the Member

for St. John's East, representing the other party in Newfoundland and Labrador,

are characterizing it as to say that this is a deliberate attempt by some people

on this side, who for whatever reason are supporting the Premier, to do

something that will make life worse for people in Newfoundland and Labrador.

I do not understand why anybody - because we are all of the

same mind in terms of trying to help people - for whatever reason, you would

participate in the debate to suggest that there are people here who are trying

to do something that is bad for Newfoundlanders