May 24,

HOUSE OF ASSEMBLY PROCEEDINGS

Vol. XLII No. 30

The House met at 2:00 p.m.

MR. SPEAKER (Snow): Order, please!

Statements by Ministers

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER WELLS: Mr. Speaker, I rise to clarify for the

House several aspects of government's tax regime as it will apply to the

potential mining development at Voisey Bay, Labrador, proposed by Diamond Fields

Resources Inc.

First of all let me make it clear that the mining project at

Voisey Bay will not be designated as an EDGE corporation and therefore will not

be eligible for the ten year tax incentives or other incentives under the EDGE

legislation.

One of the criteria for a project to be designated an EDGE

corporation is that the applicant must demonstrate that the incentives provided

are important to the establishment of the business in the Province and clearly

incentives would not have any bearing on the establishment of a mine at Voisey

Bay. The mine would be established at Voisey Bay because the minerals exist

there. Given government's preliminary financial analysis of the Voisey Bay

Project, we are confident that the EDGE incentives are not required to proceed

with the project.

This means that the mining project at Voisey Bay will be

subject to the normal taxes such as corporate income tax, payroll tax, retail

sales tax and fuel tax, in addition to mining and mineral rights taxes. This

will bring substantial additional revenues to the Province when the project

comes on stream. And here I might interject of course, Mr. Speaker, that we are

in the course of negotiations with the Labrador Inuit and probably may well be

negotiating with the Labrador Innu on issues affecting rights in Labrador.

Mr. Speaker, the Minister of Finance, in the 1993 Budget

Speech announced significant new changes to the provincial mining tax regime as

an incentive for mining companies to explore and invest in our Province. The

enabling amendments to the Mining and Mineral Rights Tax Act were introduced and

passed in the House during the Fall session of 1994. They were formally

announced in the 1993 Budget.

The amendments provided for, among other things, provincial

corporate taxes paid to the Province to be creditable against mining taxes

payable in the first ten years a new mine is in operation. The amendments also

provided for more generous treatment of the processing allowance, a measure

designed to encourage further processing of the minerals extracted in our

Province and we want to continue to encourage that.

About a month or so ago government requested officials to

carry out a preliminary economic analysis of the Voisey Bay Project. This

analysis indicated that these incentives would be overly generous in the case of

large, highly profitable mining developments and should be revisited. Officials

were then asked to prepare alternative approaches for consideration by

government. This work involves detailed and complicated financial analysis, but

will be completed shortly.

We have had a couple of discussions within the last two

weeks, in particular, since Cabinet directed the original assessment to be done

and the preliminary indication indicates that there should be a cap,

particularly for very large mining operations.

I am announcing today that government will introduce, in the

current session, a Bill to Amend the Mining And Mineral Rights Tax act to

provide for a more equitable sharing of revenues from large highly profitable

mining operations while also maintaining the original intent of the 1994

amendments to provide an incentive to explore for minerals in our Province and

provide an attractive mining tax regime for smaller or lower profitability

mining projects.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

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

MS. VERGE: Thank you, Mr. Speaker.

I would like to say that people in this Province are haunted

by past resource giveaways. People have new hope now with the discovery of huge

mineral resources at Voisey Bay. We have the promise of a very lucrative new

mining industry and we have to do all within our power to ensure that the

mineral resources at Voisey Bay are developed to ensure the maximum value for

the government of the Province and for the citizens of the Province.

EDGE did not seem to be an issue and it is good to have the

Premier assure the public that there will not be tax concessions under the EDGE

program or other EDGE benefits for the development of Voisey Bay. It seems

obvious that Voisey Bay would not qualify and the Premier has now underlined

that. We are pleased to hear the Premier indicate an intention to amend a recent

legislative provision, the provisions of the Mining and Mineral Rights Tax Act

that were passed for another purpose. We in the official Opposition will be

vigilant in examining the amendment that comes forward to try to make sure that

the new provision of the legislation is consistent with the goal of deriving

maximum value for the Province from the Voisey Bay minerals.

MR. SPEAKER: Does the hon. Member for St. John's East

have leave?

SOME HON. MEMBERS: No leave.

Oral Questions

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

MS. VERGE: Thank you, Mr. Speaker.

I have questions for the Premier about the state of the

Island's forests, the state of forests on the Island of Newfoundland. The report

I am holding, dated March of this year, was commissioned by the federal and

provincial governments to evaluate development opportunities of secondary wood

products. This document estimates that the total allowable cut will be 20 per

cent less than the requirements for pulp wood, saw logs, and fuel wood, that is

a 20 per cent deficit.

Does the Premier accept this statistic about wood supply

demand imbalance on the Island?

MR. SPEAKER: The hon. the Minister of Natural Resources.

DR. GIBBONS: Mr. Speaker, we are managing our forest

industry in this Province to ensure that we have a sustainable forest for the

long-term; a sustainable forest so that we can have continued three paper mills,

continued very viable lumber industry and continued other uses of our wood

supply. Back in 1989, there was a 20-year plan completed for this Province. In

the fall of 1989, that plan projected certain wood supply forward for us in

Newfoundland and Labrador, particularly on the Island that 1989 5-year plan.

We have just completed the next 5-year review. We completed

it in the late fall last year. The 20-year plan of '89 was the first time it was

ever done and that forecasted certain things. It was done while we were the

government. We have just completed the first 5-year review in the fall of '94;

it is going to be due to be published in the near future, in the next few months

as it gets finalized.

The conclusion right now is that our forecast today looking

forward is better than our forecast was in 1989. It is better now than it was in

'89; we are continuing to take appropriate actions in forestry to ensure that

things in the future will get better still. That is why in the Budget recently,

we put in $10 million for silviculture and related management functions, to

replace what was not available in a forestry agreement. We are going to make

sure things are done properly for a sustainable forest industry.

SOME HON. MEMBERS: Hear, hear!

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

supplementary.

MS. VERGE: Thank you, Mr. Speaker.

I have supplementary questions which I will put to either the

Premier or the Minister of Natural Resources. I began by asking the Premier,

since the minister previously, as well as today, refuses to deal with the

specifics of the wood supply demand imbalance.

I will ask again: Does the government accept the statistic in

this report which the provincial and federal governments commissioned, a

document that was prepared very recently, dated March of this year, indicating

that in the foreseeable future, there will be a 20 per cent shortfall between

requirements of the three main users, the pulp and paper mills, saw mills and

home fuel harvesters on the one hand and the allowable cut on the other? Does

the government accept the forecast that there will be a 20 per cent shortfall?

MR. SPEAKER: The hon. the Minister of Natural Resources.

DR. GIBBONS: Mr. Speaker, I don't have a copy of that

report with me so I can't refer to these exact figures. But as I look forward,

and from the information that I've reviewed with my staff, sure, we acknowledge

that we are in a tight wood supply on the Island. I have taken actions myself in

recent times to reduce the amount that people are going to be allowed to cut.

There are parts of this Province, particularly the Avalon Peninsula where we are

today, where we reduced the domestic cutting permits from six cords to five

cords for any domestic cutter in 1995 because of the tight supply on the Avalon

Peninsula.

There are other parts of this Province where in the last few

months I have had my staff reduce the allowable cut for some of the logging

sectors, again, to make sure that we do not over-cut. We are encouraging

everything possible to make sure though, that we have continued growth in our

lumber industry. For example, this year, for the first time, we are probably

going to break $60 million board feet. Last year we broke 55 million board feet.

The year before, we broke 50 million board feet for the first time since 1954.

That is because we are encouraging proper, maximum utilization of our forests.

We are encouraging that to be done.

Right now we want a full integrated usage. Where we can we

would like to get a piece of lumber made from a piece of wood before it gets

chipped and sent to the pulp mills. That is what we would like to do. We are

encouraging much more of that to be done. We are making sure we are going to

manage this forest so that it is going to be there forever.

We acknowledge the tightness of supply, we acknowledge where

we have to look elsewhere in this country to bring in some wood to help

supplement the available supply on the Island. For example, last year I know

that Abitibi brought in about 50,000 cubic metres, I think it was, from Prince

Edward Island and Labrador in combination. This year we are continuing to look

at that. We are looking more and more at what we can get in Labrador where we

have a huge unused forest resource. It is practically a totally unused forest

resource.

MR. SPEAKER: A supplementary, the hon. the Leader of the

Opposition.

MS. VERGE: Thank you, Mr. Speaker.

A supplementary for the minister. Wouldn't the minister say

that the authors of this report who were working for his department and the

Federal Government were aware of the measures the minister just outlined? If the

authors of the report were cognizant of those plans and measures, why,

nevertheless, are they projecting a 20 per cent deficit of the softwood supply

in the foreseeable future?

MR. SPEAKER: The hon. the Minister of Natural Resources.

DR. GIBBONS: Mr. Speaker, if the hon. member would send

me the copy of the report - I have not yet seen that report in my office and I

would welcome it if she would give me a copy. In the meantime, we acknowledge

the tight situation, but we are not going to run out. We are going to manage in

such a way that we are going to make sure there is wood available for all users.

We may have to tighten up here or there, but we are going to ensure that the

forestry industry in this Province is properly managed. We are going to make

sure we do that, with our own attention to it.

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

MR. SULLIVAN: Thank you, Mr. Speaker. I would like to ask

a question of the Minister of Health.

The cost of providing home care services to a person who

needs twenty-four-hour service is about $65,000 per year. Now, the same service

can be provided in Chancellor Park for about $30,000 per year, resulting in a

saving to government of $35,000 per year. I received a telephone call from a

family member of a person who is living in Chancellor Park. Now, Chancellor Park

is termed an independent living unit, the same as somebody who would live in a

senior's complex like Kelly's Brook, or even in their own house.

I ask the minister: Why is your department discriminating

against such people for support under the enriched needs program because their

home is Chancellor Park?

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

MR. L. MATTHEWS: Thank you, Mr. Speaker.

The hon. member makes an assumption that is incorrect and is

fundamental to his question, the assumption being that any personal care home,

of which Chancellor Park is one of about seventy we have in the Province, is the

same, by definition, as the person's own residence. That is, in fact, not the

case.

We have about sixty-nine, seventy, or seventy-one personal

care homes in the Province. Chancellor Park is one of these homes. We do not, as

a government, by policy, provide enriched needs to people living in personal

care homes. If we were to do that, the figure that the member mentioned of what

we spent last year on enriched needs would be probably many, many, many times

that figure, so the question is premised on the wrong circumstance.

As to whether or not on an individual basis in the past we

have extended enriched needs in the personal care homes, I acknowledge that

government has done that on a temporary and on an emergency basis in certain

instances in the past - not only at Chancellor, but at various other personal

care homes around the Province - but that does not make the presumption correct

that personal care homes are the same as an individual's residence.

The fact is that enriched needs in the original instance was

developed not to provide somebody with the equivalent of long-term care, even in

their own home. It was provided or developed or conceptualized to provide people

with some temporary assistance at a point in time when they may need some extra

help by virtue of a medical condition or something like that. It has gone from a

$300,000 program seven years ago to a $27 million program last year and

obviously there are some things significantly out of whack with the way the

thing has evolved. Government has taken responsibility to look at that, we have

put budgets in place this year and we will be addressing the (inaudible) needs

in the context of what we can do.

MR. SPEAKER: Order, please!

A supplementary, the hon. the Member for Ferryland.

MR. SULLIVAN: Thank you, Mr. Speaker.

The minister stated they do not do it as a policy they just

do it not as a policy. Your department has termed Chancellor Park as an

independent or congregate unit separate from the 1,346 personal care home beds

that are subsidized across this Province. Separate from that, I say to the

minister, and I think it is in writing by your department. Now many people moved

to Chancellor Park from their own homes or from their relatives homes because

beds were not available in nursing homes. Now that these people have exhausted

their savings there your department is now putting them at the top of the

waiting list to get in to nursing homes here in the city. Now why would you

force those people out of this environment and out of their own private

surroundings they call home to put them into a nursing home that is going to

cost this Province substantially more money, up to $20,000 per bed?

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

MR. L. MATTHEWS: People have moved into private

accommodations at Chancellor, in personal care homes which is a private sector

operated and driven part of the health care industry, and they have moved into

other congregate type housing for a number of reasons, not all of which have to

do with the availability or otherwise a space in nursing homes. I can tell the

hon. member that some individuals who have moved into Chancellor Park - if they

moved on the basis that he alleges because there is no room in nursing homes -

have very recently, in at least two or three cases, have been offered placements

in nursing homes. We have beds available for them and for their own reasons they

have made decisions not to move from Chancellor, where I understand the cost of

staying as an individual on a private basis is substantial compared to other

personal care homes. Nevertheless, we have offered placements to a number of

individuals there but they have refused these placements and they of course will

have to give an explanation or justification as to why they have done that.

Obviously they have made the decision for personal reasons that I cannot answer

to.

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

Ferryland.

MR. SULLIVAN: Thank you, Mr. Speaker. Yes, and my

understanding is that you have offered it to two people to my knowledge.

Your department refuses to provide adequate homes for our

seniors. The Agnew Peckham Report illustrates that and you continue to allow

lengthy waiting lists for people getting in those nursing homes. Now in spite of

what the minister has said here in this House, there are long waiting lists,

longer than 150 people. The minister admitted that there were 1,600 people who

were not duplicated. He said it here in this House yesterday and he is not

including people in hospital beds who are costing up to $150,000 per year to

keep them there, not including people at the Waterford and Miller Centre who are

waiting to be transferred or in any other hospital around the city, as well as

those who are now waiting to be assessed to be put on this waiting list. The

minister is distorting the figures. Now I asked the minister yesterday but he

did not answer my question, I ask him again, will you permit private enterprise

to build such homes and your department subsidize their operation like you are

now doing in nursing homes but with regard to the needs of each individual. This

will eliminate all capital costs for government borrowing in the future and

could result in a savings of over $20,000 per bed.

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

MR. L. MATTHEWS: Thank you, Mr. Speaker. The hon. member

again alleges that this government is tolerating a situation where there is not

enough nursing home beds in the Province for people. Let me tell the hon. member

and this hon. House this: in 1985 there was a Royal Commission report

commissioned to look at long-term care amongst other things in the Province, at

that point there were 2,058 beds, long-term care beds in the Province. The Royal

Commission in 1985 recommended that we would need, in the Province, somewhere

around 2,758 over the next ten years. I am happy to tell the hon. member that we

have not only met that recommendation, we have exceeded it such that today there

are 2,958 long-term care beds in this Province as a result of action taken by

this government. So the proposition that we do not have enough long-term care

beds in the system is flawed.

What he refers to is a further study that grew out of the

Royal Commission that was commissioned by the nursing homes council in St.

John's that wanted to look specifically at what was required in this region.

That report essentially said two things. It said, number one, that we need to

redevelop some level one beds so that they could take care of levels two and

three consistent with aging of population. We acknowledge that is required. It

also recommended that.... What was the second point?

AN HON. MEMBER: (Inaudible).

MR. TOBIN: You are sunstruck, boy, sit down.

MR. L. MATTHEWS: No, I'm not sunstruck, I'm happy to let

the hon. member know. I'm not too struck with some of the questions that the

hon. member puts or the context in which he puts them.

SOME HON. MEMBERS: (Inaudible)!

MR. SPEAKER: Order, please!

I ask the hon. member to conclude his answer.

MR. L. MATTHEWS: The second recommendation was that by

the year 2001 we should probably have, maximum, ninety-three extra long-term

care beds in the St. John's region. I can tell you that we are taking that under

advisement and that at what point we get the proper redevelopment done of the

level one beds that are now being inappropriately used we will move forward to

see what we need in maximum extra long-term care beds. So the information that

the member premises his question on -

MR. SPEAKER: Order, please!

MR. L. MATTHEWS: - is taken totally out of context and is

put forward to skew a situation that doesn't exist.

MR. SPEAKER: Order, please!

The hon. the Member for St. John's East Extern.

MR. J. BYRNE: Thank you, Mr. Speaker. My question is for

the Minister of Tourism, Culture and Recreation. The minister is aware of the

dollar value salmon angling brings to the economy of Newfoundland and Labrador.

Over $850 basically per salmon caught, over $62 million in total. Basically 110

jobs in Labrador through the outfitters. Does the minister roughly agree with

these figures?

MR. SPEAKER: The hon. the Minister of Tourism, Culture

and Recreation.

MR. GRIMES: Thank you, Mr. Speaker. There is a variety of

figures available depending upon who is presenting the information and for what

particular reason. But everybody does accept that it is a tremendously valuable

part of the industry in Newfoundland and Labrador. Salmon angling itself is

something that we are trying to increase the benefit of to everybody here, the

economic benefit for Newfoundlanders and Labrador.

MR. SPEAKER: Supplementary, the hon. the Member for St.

John's East Extern.

MR. J. BYRNE: Thank you, Mr. Speaker. In 1992 the anglers

visiting Labrador were permitted to take four large salmon. In 1992 the feds set

the quota at ninety tons for the commercial fishery and permitted anglers to

catch two large salmon, which was difficult on the outfitters. This year the

commercial quota is seventy tons, it was cut by 20 per cent, and the anglers

were cut by 50 per cent to allow them to keep one large salmon plus five grilse.

Labrador cannot compete with Quebec and even other countries in promoting their

industry. The outfitters are prepared to buy a certain percentage of the

commercial quota. Will the minister support this proposal and talk to the

federal minister, Mr. Tobin?

MR. SPEAKER: The hon. the Minister of Tourism, Culture

and Recreation.

MR. GRIMES: Thank you, Mr. Speaker. We have discussed the

issue in detail with the federal minister responsible and understand and I

believe as well, it is fair to say in my last meeting with the representatives

of the outfitters from Labrador in particular, that they too now agree that the

number one emphasis for all of us has to be the conservation of the stock.

Because we can argue about whether you take one large salmon or two large salmon

or four large salmon, but if we don't conserve the stock we will be down to

talking about taking no salmon. So they do recognize that the conservation issue

has to be first and foremost. I'm sure that the issue right now that has been

raised by representatives of the outfitters in Labrador of buying some of the

quota from the commercial fishermen is currently under consideration by the

federal minister and he will be letting them know in due course what exactly his

view is with respect to that.

Just one point that the hon. member made. In my last dialogue

with the federal minister he and his staff again indicated quite clearly that

even with the reduction from two large salmon this year to one Newfoundland and

Labrador - the Labrador anglers in particular - still have a competitive

advantage in the marketplace. Because other than some of the north shore Quebec

rivers where they take some of the fish in bigger numbers, in most other areas

for those people whose biggest interest in catching the salmon is to keep the

salmon, even keeping one salmon is a competitive advantage to anglers in

Labrador. Because most other areas have gone into more of a conservation mode

with complete emphasis on hook-and-release.

I think that most of the people here now are understanding

and most of the operators are understanding that if everybody moves onto an

equal footing where hook-and-release becomes the norm rather than keeping the

salmon then all of us will have an industry that we can sustain well into the

future.

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

Extern on a supplementary.

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

question for the minister.

Will you look at other ways to support the outfitters? As an

example, is it possible for the provincial government to set camp quotas,

something along that nature?

MR. SPEAKER: The hon. the Minister of Tourism, Culture

and Recreation.

MR. GRIMES: Thank you, Mr. Speaker.

In the last meetings, again, that we have had with

representatives of the outfitters, particularly the salmon anglers for Labrador,

it is indicated that is an area they would like for us to pursue. We have had

some discussions with the officials of the federal Department of Fisheries and

Oceans, and they are looking at the implications and ramifications of a move in

that direction. There are discussions ongoing. We will be in a position or at a

point in time some time in the not too distant future to report back to the

government as to what the pros and cons are with respect to camp quotas for

keeping and catching large salmon on the licensed rivers of Labrador as well as

on the Island part of Newfoundland and Labrador, so it is an issue that is under

debate and discussion right now. What the outcome will be is too hard to tell at

this point in time because we do not have the full analysis done, but it is an

issue that the outfitters themselves are interested in; but again I am pleased

to note that in their meetings with us they are coming very squarely to the

position that it is in everyone's best interest to make sure that we do not put

any immediate short-term economic gain ahead of the long-term conservation of

the stock, so that we can repeatedly reap some economic benefit from this

enterprise.

MR. SPEAKER: Order, please!

The hon. the Member for Kilbride.

MR. E. BYRNE: Thank you, Mr. Speaker. My question is for

the Premier.

Can the Premier confirm that the only interested bidder in

the St. John's dockyard, negotiations which have been ongoing with the federal

government through its Crown corporation, Marine Atlantic, have broken down, and

that the only option from the federal government's point of view right now that

they see is that the Newfoundland Dockyard will be closed by the end of June.

Can the Premier confirm that?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: No, Mr. Speaker, I cannot confirm it.

MR. SPEAKER: The hon. the Member for Kilbride on a

supplementary.

MR. E. BYRNE: Mr. Speaker, I am shocked; I am really

shocked. Last year the dockyard was stopped from bidding international work. The

members may laugh, I can tell you that, but it is no laughing matter. If 700

jobs were about to disappear in Corner Brook, I don't say the Premier would say

`no comment'; I can guarantee you that. If there were twenty more jobs available

in Japan, he would be hopping on the plane over to get those.

MR. SPEAKER: Order, please!

MR. E. BYRNE: Yet he cannot maintain 700 jobs for the

people in this area of the Province.

MR. SPEAKER: Order, please!

MR. E. BYRNE: It is ridiculous!

MR. SPEAKER: Order, please!

I ask the hon. member to get to his question.

MR. E. BYRNE: Let me ask the Premier this: Is he aware

that negotiations have broken off? I can tell him that they have. What

representations will he make, as Premier of this Province, or has he made any

representations to the federal government to ensure that the Newfoundland

Dockyard remains open and viable for business?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, my answer to the hon.

gentleman was not `no comment'. He asked me a straightforward question, was I

aware that negotiations had broken off and that now Marine Atlantic plan to

close the dockyard at the end of June. The answer is, no, I am not aware of any

such thing. Whether or not there is any validity to it or not at this moment, I

have no idea. It may or may not be so. The answer is simple; I am not aware of

it. No, I am not aware of it.

AN HON. MEMBER: (Inaudible).

MR. SPEAKER: Order, please!

PREMIER WELLS: And I am not prepared to accept that

statement by the hon. member, even though it may be accurate - I do not know

that it is - but unless and until I have it confirmed I am not prepared to act

as though it is accurate.

The second part of his question was: Have any representations

been made? Yes, representations have been made, public statements have been

made, and direct statements have been made indicating clearly the government's

view that the responsibility of the federal government in the matter is to make

sure that the dockyard has every conceivable opportunity to be a viable

business, and I do not consider that it is given a fair opportunity if it is

deliberately allowed to deteriorate to the point where it cannot function

effectively. I do not consider that giving it a fair opportunity.

If that fair opportunity is given and it cannot function

successfully, then I am not about to ask the federal government to continue to

operate it anyway, no matter what, any more than the government of the Province

would be prepared to operate Marystown on the same basis, no matter what.

MR. SPEAKER: The hon. the Member for Kilbride on a

supplementary.

MR. E. BYRNE: Let me say to the Premier, that is exactly

the point. The federal government has not given the Newfoundland Dockyard the

opportunity or the wherewithal to make it survive and compete internationally or

nationally.

Let me ask the Premier this: You have indicated, in your

second response to me and my question, that yes, representations have been made

on behalf of your government dealing with the Newfoundland Dockyard. Can you

elaborate on what those representations were, when they were made, with whom

they were made, and did you make them yourself or did other ministers make them?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, there have been direct

discussions with federal ministers about the issue; there have been public

statements, I made statements in the House, I made statements to the news media

outside the House that said essentially what I have just said here today.

I have to tell the House that a meeting has been arranged

with Mr. Morrison and is scheduled to take place -

AN HON. MEMBER: On Monday morning.

PREMIER WELLS: - on Monday morning, okay; a meeting is

scheduled to take place on Monday morning and the government's view will be made

known and made very clear to Mr. Morrison at that time.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

The hon. the Member for Grand Bank.

MR. W. MATTHEWS: Thank you very much, Mr. Speaker.

Last Wednesday, Mr. Speaker, I asked the Minister of

Fisheries, Food and Agriculture a question pertaining to the industry renewal

boards and the processing capacity reduction. I asked the minister who were the

Provincial Government appointee or appointees to those renewal boards. And the

minister went on to say, "The provincial government appointee, I think has

already been made public and if it has not then I will table the information

tomorrow."

The minister didn't table the information. I am wondering if

he could answer the question now and tell us who the Province has appointed to

the industry renewal boards.

MR. SPEAKER: The hon. the Minister of Fisheries, Food and

Agriculture.

DR. HULAN: Thank you, Mr. Speaker.

The appointment to the industry renewal board, actually the

appointment to the harvesting renewal board, which now has an expanded mandate

to consider the re-alignment of the processing sector, that appointee has been

decided on jointly by the Federal and the Provincial Governments, and an

announcement will be made jointly very shortly, as to who that appointee is.

MR. SPEAKER: The hon. the Opposition House Leader, on a

supplementary.

MR. W. MATTHEWS: Thank you very much, Mr. Speaker.

It is almost like the Miss America contest, and I expect the

minister is going to produce the envelope any day now.

Let me pursue another question with the minister. I asked the

minister as well, the same day or the day after, about the time frame given to

the renewal boards particularly as it deals with the processing sector, the

reduction in that sector of the industry - if they would be given a time frame

in which to make a decision as the harvesting end of things were given, I

believe it was twelve months, to make decisions. Has the board been given a time

frame, a limit, in which to make decisions about the processing sector?

MR. SPEAKER: The hon. the Minister of Fisheries, Food and

Agriculture.

DR. HULAN: Thank you, Mr. Speaker.

At this point in time I must say that no specific time frame

has been allotted simply because the board has not started to assess the

realignment of the processing sector. When the board is ready to start

considering the re-alignment of the processing sector in this Province, then we

will deal with the issue of the time frame at that time.

MR. SPEAKER: The hon. the Opposition House Leader, on a

supplementary.

MR. W. MATTHEWS: Thank you very much, Mr. Speaker.

I want to ask the minister a final supplementary as it

pertains to the involvement or input of people in the communities where fish

processing plants are located. The minister will recall last week I asked him a

question on that, and I asked him then, would the people in the communities or

action groups or councils or whomever have an opportunity to make

representations to the industry renewal boards to make a case or presentation,

and the minister said: Yes, they would.

I am wondering if the minister could inform the House, in

what form, representatives of the various communities will be able to make

representations. Will there be hearings held in various regions of the Province?

Will the renewal boards accept written presentations, or what format will they

use in allowing the people in the communities that will be directly affected to

have input? Could the minister inform the House of that?

MR. SPEAKER: The hon. the Minister of Fisheries, Food and

Agriculture.

DR. HULAN: Thank you, Mr. Speaker.

Again, I must say to the hon. member, these details will be

worked out by the board when it is ready to examine the re-alignment of that

particular sector of the industry. Thank you.

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

Bay.

MR. SHELLEY: Thank you, Mr. Speaker.

My question is for the Minister of Works, Services and

Transportation.

Now, with the $15 million allocated for road work this year,

can the minister, first of all, tell me how much of that $15 million will go

towards actual road construction? Secondly, can the minister confirm that the

calcium for communities with gravel roads, this year is now cancelled?

MR. SPEAKER: The hon. the Minister of Works, Services and

Transportation.

MR. EFFORD: Fourteen million dollars is allocated to

provincial road construction and there will be no calcium spread on the roads

this year.

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

Bay, on a supplementary.

MR. SHELLEY: Mr. Speaker, it was $15 million, and if I am

correct $5 million was already committed from last year, and also $1 million

going into road signs. Can the minister break down what exactly is going into

road construction this year, and also can he tell the House, of the roads to be

paved, are these gravel roads that have never been paved, or is it mostly

pavement that was taken up from last year? Is that true, Mr. Speaker?

MR. SPEAKER: The hon. the Minister of Works, Services and

Transportation.

MR. EFFORD: Mr. Speaker, we have put in place this year a

new signage policy for the whole of the Province, and $1 million of the $15

million this year will be put into the signage policy which will be continued

for a number of years until the signs are completed to the satisfaction of all

right across the Province. There will be $14 million spent on roads and the

construction of bridges this year, and 95 per cent of that money will be spent

on resurfacing of old roads.

The reason for that is, we don't have sufficient money to

start constructing new roads, and building new roads, when we don't have the

money to keep the existing asphalt together, so we are trying to maintain what

we have before we build any further roads in the Province.

MR. SPEAKER: Question Period has elapsed.

Answers to Questions

For which Notice has been Given

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, two or three days ago, I

guess, probably Friday of last week, the Leader of the Opposition asked some

questions about the migration and the population figures, and I undertook to get

them. I have now received them but I will not read the figures. I just draw

members' attention to what they disclose, and they disclose that every year from

1949 until 1984, the population increased, year after year, after year. Then in

1984 it dropped, it dropped in 1985, it dropped in 1986, it dropped in 1987, it

dropped in 1988, and in 1989 it started to recover. It recovered in 1989, it

recovered in 1990, it recovered in 1991, it recovered in 1992, and it recovered

in 1993.

SOME HON. MEMBERS: Hear, hear!

PREMIER WELLS: Now, lest my colleagues get too

enthusiastic, I have to say that even the tremendous economic activity of the

government in restoring the economy could not withstand totally the impact of

the closure of the groundfish fishery, and that had an impact in 1994 which

dropped the population by 2,000 for the first time since 1988. Now, Mr. Speaker,

that is pretty good performance.

If you look, then, at the actual migration figures, you will

see that from the year 1961 - and I don't have it back beyond 1961. They only

gave me from 1961, but I guess that is far enough to show the example, from 1961

back to 1994 in all but, oh, I would say, eight or ten quarters - 1961 to 1994

is about 120 quarters, in all but eight to ten quarters there was a net

out-migration. It is consistent. It has been endemic to this Province for at

least the last thirty-five years. So, Mr. Speaker, it didn't occur only in the

last few years.

As a matter of fact, Mr. Speaker, our performance was so good

- with the exception of last year with the full impact of the 30,000 people

displaced due to the closure of the fisheries - our performance was so good that

we were able to offset the impact of the out-migration, and despite the lower

birth rate in those intervening years, provide an increase in population.

Orders of the Day

Private Members' Day

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

MR. ROBERTS: Mr. Speaker, this is Wednesday and, of

course, Private Members' Day. The motion we are going to ask the House to debate

today is Motion No. 6 standing in the name of my friend, the Member for

Pleasantville.

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

MR. NOEL: Thank you very much, Mr. Speaker.

Today I am proposing this House consider that:

WHEREAS the value of Newfoundland and Labrador's fish

resource continues to be a substantial factor in our economy; and

WHEREAS government must do everything possible to create and

raise revenues necessary to maintain valuable public services; and

WHEREAS the value of Newfoundland and Labrador's fish

resource continues to be a substantial factor in our economy;

AND

WHEREAS government must do everything possible to create

jobs and raise revenues necessary to maintain valuable public services at

minimum and equitable tax levels;

AND

WHEREAS government has a responsibility to ensure all

citizens benefit to the highest and fairest extent from resources owned in

common;

BE IT THEREFORE RESOLVED that the Government of Newfoundland

and Labrador ensure that our fish resource is managed to provide the highest

level of employment through maximum local processing where practical; and, where

appropriate, through devising other means of ensuring the whole province

benefits from value which may be derived above reasonable levels of return for

harvesters and processors."

Mr. Speaker, I raise this matter in the House today because I

think what is happening in our fishery is very significant for the Province. The

fishery remains a major part of our economy and is now becoming as valuable

again as it used to be. What is happening in the fishery really today is in some

ways comparable to what is happening in Voisey Bay. There has been a real change

of the environment and we have to transform our regulations and our management

principles in order to accommodate it.

In the past, the fishery has been used as a means of creating

jobs primarily in the Province. People haven't thought of it so much in resource

terms, I think. I think we now have to realize that it is a tremendous resource

that is not producing as much gain as it should for all Newfoundlanders. In

particular this year, it is a result of the increase in the value of the crab.

The crab landed value will probably increase by something like $200 million this

year over two years ago. That is a very significant sum. It is about 15 per cent

of what is said to be the value of the minerals in Voisey Bay today. Over seven

years that amount of money coming into the Province as a result of the crab

fishery would be equivalent to a Voisey Bay. So we are talking about a lot of

money.

The landed value of our fishery this year is probably going

to be the highest on record, over $300 million, I believe. The record in the

past I think was something like $287 million in 1988. The export value of the

fishery this year is probably going to be over $500 million, and that will make

it probably the fourth or fifth most valuable year on record. So we are talking

about a lot of money. If you were to include the amount of money, the amount of

revenues generated in this Province as a result of TAGS program, which is

another $300 million or $400 million a year, on top of the export value which is

going to be over $500 million a year, we are talking about the fishery being

responsible for revenues in this Province this year of close to $1 billion. That

is almost twice as much as the fishery in itself produced in its best year.

The problem we have in the Province today is this record

level of value is only being shared by about half the number of people who used

to work and invest in the fishery in the past, so we have a very much different

situation that we have to deal with. As a result of what has been happening, a

number of fortunate people in the fishery are going to be making extraordinary

profit this year. Many of them made it last year, primarily as a result of the

increase in the crab price. The Government of this Province has a responsibility

to make sure that the benefits of the fishery are maximized to start with and

are shared equitably amongst all the citizens of the Province. Everybody owns

the fishery; everybody who is a resident of this Province owns our share of the

national fish quota and has a right to share in the benefits it produces.

The people who work in it have a right to the wages it

produces, and the people who invest in it have a right in the profits it

produces. But any value that it produces beyond that has to be shared amongst

everybody in the Province, has to be used to try to create additional jobs to

try to help government finance its responsibilities, to try to develop our

economy in other ways and to try to minimise the level of taxation in the

Province. Now we have to, I think, look at new ways of ensuring that that

happens.

I think that one of the things that we have to look at is the

imposition of royalties or a resource tax in the fishing industry. I am not

wetted to that option. If the industry can be organized in order to produce

enough jobs to get all the potential value that is there for our Province then

that is fine. We should create as many jobs as we can but what the industry is

telling us this year is the case that markets are such that we cannot manage the

industry in a way to provide maximum jobs and get maximum economic benefits at

the same time.

They say the markets are there for relatively unprocessed

product in the crab for instance but they are not there for fully processed

product and if that is the case then we have to pay attention to that. I don't

think that we should be committed to creating processing jobs for themselves.

What we have to be committed to is getting maximum benefit out of the economy.

If we can do that by not processing any fish in this Province but by selling it

unprocessed then there is probably no reason why we should not do that as long

as we are getting full economic value for the whole Province and not just for

the people involved in harvesting and processing the product. So I think the way

in which we can be most flexible, in that regard, is through using a resource

tax.

In the past there was not enough in the fishery perhaps, even

though some people made a lot of money, the stronger operators always survived

and many of them flourished. There was not enough money I suppose to worry about

a resource tax but there is today because there are so few people working in the

business, either as plant workers or as harvesters. People of the Province who

do not work in that industry have as much right to share in the benefits as the

people in Port de Grave district for instance, have a right to share in the

benefits of Voisey Bay. We are going to have a resource tax on the mineral

wealth in Voisey Bay that is going to be shared with all residents of the

Province and that is the way it should be. The same thing goes for the people

who fish out in the Port de Grave district, they have a right to earn reasonable

wages and reasonable profits from their involvement in the fishery but what is

produced beyond that level has to be shared with all other residents of the

Province.

Now, Mr. Speaker, it is difficult to know how we can go about

maximizing the benefits for our Province. I don't think we know enough about the

markets. I think a lot of the decisions that we are making are being based to

much on information being provided from the industry, from the processors, the

harvesters, the union and the manufacturers association. I think that we have to

get more hard information ourselves. For instance we are told this year that if

we - Mr. Speaker, I don't guess many people are interested in participating in

debate in the House today.

AN HON. MEMBER: For good reason.

MR. NOEL: For good reason, is that right?

I don't think that the Constitution interferes with our

opportunities to have a resource tax in the fishery and it does not interfere

with our opportunity to have a resource tax in the forestry or in mining. So I

don't think that it is going to interfere with -

AN HON. MEMBER: (Inaudible).

MR. NOEL: Fish harvesting might be but we can have a

provincial tax on the resource, I believe, and if we cannot then we can talk to

the federal government about imposing a federal tax if that is the way we have

to go but the fact is that there is value there that must not be allowed to

accumulate unjustifiably in too few hands. It has to be used to finance the

activities and the responsibilities of the whole Province.

Now the industry has told us this year that we can't process

too much in meat form where most of the labour would be required because we

would cause a collapse in the markets. Now, I don't see why we should have

concern about the markets collapsing when the meat price in the New England

market has doubled in the past two years and gone up by 50 per cent alone in the

past year, and I understand today it is somewhere around fourteen dollars a

pound compared to twelve dollars a pound or so a year ago, so I can't accept

this line of thought, that we can't produce any more meat without collapsing the

market; and of course, the American market is not the only meat market available

to us. The whole world consumes fish and crab meat is sold throughout the world

and some of our existing plants in this Province export crab meat to the

European market and elsewhere, and there is even some market in Japan and across

Canada and elsewhere so that's one point I would make.

Now what I think the industry wants to do this year is ship

as much of the crab meat as possible, as little processed as possible, because

that's the way the industry processors can maximize their particular profit.

It's the way they can pay fishermen the highest prices so that they can get as

much stock as possible from the fishermen, and they can turn it over as quickly

as possible, have less headaches with processing, dealing with unions, setting

up manufacturing operations, making capital investments. It is in the processing

industry's interest to sell the product unprocessed. They make the most profit

doing it that way for themselves, but they don't make the most profit for the

Province.

I don't blame them for trying to maximize their own profit;

that's what anybody out in business does, but we have a responsibility to

maximize the profit for the Province as a whole, and I think that this year, if

we are to believe their case, that we can't fully manufacture the crab, then I

think we should be imposing a resource tax. Now it is a very difficult industry,

the international fishing industry, and there are all kinds of products that are

sold. I am told that there are ten different types of crab products that are

going to be sold, perhaps in this Province this year, but what I am most

concerned about is the so-called bulk industrial pack, which I think is a

package of essentially just boiled crab, packed forty to fifty-five pounds to a

package that is shipped out with relatively little processing, hardly even

cleaned.

The processors will make the most profit that way but what

they will be doing is shipping jobs out of the Province. They will be selling

those stocks to Japan perhaps, and Japanese businesspeople will do processing

there and make their profit on the processing instead of us making it. Very

often, as the member tells me, they send it over to China and other low-wage

countries, have it processed into meat form and probably canned, and probably

sold back to this Province and sold in supermarkets in St. John's and other

communities in this Province. So here we are, Mr. Speaker, shipping jobs out of

the Province, by shipping fish out in block form, which we complained about as

long as I can remember, we always said: oh what a shame it is that we have to

ship cod out of the Province unprocessed in 1,500-pound blocks! How great life

would be if we were able to have market situations and tariff arrangements that

would enable us to fully process the product here and ship it out in consumer

packages.

AN HON. MEMBER: (Inaudible) happen this year, Walter.

MR. NOEL: Well now, free trade has enabled us to do that

and we are able to do that with the crab this year, but what are we doing of our

own volition? We are deciding to permit it to be shipped out unprocessed. Now,

as I say, if market conditions are such that we have no choice about that then

we have to do it, but that doesn't mean that the whole Province has to be denied

a reasonable share of the value of this resource, and that is why I say, let us

look at a resource tax. If other people have a better idea, then let's consider

it. The main point is that something has to be done to increase the value of the

fishery in this Province, and to make sure that that value is fairly shared

amongst all people, and is used by government to help us prevent having to have

cutbacks in valuable public services.

People are talking about our responsibility not to interfere

with the free market, not to interfere with the rights of fishing people who

have had some difficult years. Well, some of them have had difficult years, but

some of the people who are going to do very well this year, and did very well

last year, have done very well in a lot of years. They are not the people who

have had the hard times. The people who have had the hard times are people who

have been thrown out of the industry, some of them now to rely on TAGS, UI, and

other things for their income, and some people having to go to Social Services.

Most people in the industry in the past have made very poor

wages and I am happy to see them have their wages increased. Some of them may be

making a reasonable wage this year. I think the average wage in the industry

this year will probably be close to double what it was a few years ago, but that

is still not a big wage. It is probably something in the area of $20,000 to

$24,000 a year, but there are many people in the industry who are going to make

$30,000, $40,000, $50,000 and $60,000 this year, and in addition to that they

will collect TAGS benefits, or UI for forty-eight or fifty weeks of the year, or

forty-five weeks of the year.

Those people are getting a tremendous return out of our

economy while people down in my district are getting no extra help. Lots of

people in my district are out of work through no fault of their own, any more

than the people in the fishing industry, but they are provided no special

assistance aside from social services. Now, why is that, when other people are

being provided with all of this extra assistance? And a lot of money is being

wasted, Mr. Speaker, as is becoming evident now. A few years ago when NCARP was

first announced I think I was one of the few people in the Province who

criticized it, and said that it was an inequitable program and a wasteful

program. I have criticized it a number of times since that, and we are now

starting to see studies appear that are bearing out the allegations that many

people have been making, and every people in the industry.

Even people who are on those training programs are

complaining that they are not really helping them in the long run. There was a

story in The Globe and Mail today talking about the jobless being

retrained in jobless fields.

MR. SPEAKER: Order, please!

The hon. member's time has elapsed.

MR. NOEL: Thank you very much, Mr. Speaker.

MS. VERGE: By leave.

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

MS. VERGE: Thank you, Mr. Speaker.

We, in the Opposition, would be glad to give the Member for

Pleasantville a couple of minutes to clue up, if he would like that additional

time.

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

MR. NOEL: Thank you very much, Mr. Speaker.

This is such an extensive topic that you can go on for a long

time, but the main point I would make at this time is that I am all for helping

people in our fishing industry earn a good living, and I have been prepared to

help them. I have gone down to the water front to support their demonstrations,

and meetings. I supported the Minister of Works, Services and Transportation a

few years ago when he was helping organize to deal with fisheries problems we

had. Now that times have changed a bit and a lot of people in the fishing

industry are doing fairly well themselves, I think they have to understand that

they have the responsibility now to share their good fortune with other people

and they should be supportive of the efforts some of us are making to make sure

that we really do maximize and equalize the benefits being derived from this

industry.

Thank you very much, Mr. Speaker.

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

MS. VERGE: Thank you, Mr. Speaker.

I would like to begin by commending the Member for

Pleasantville for initiating this debate. I think his effort to generate

discussion about how we can maximize the value of our seafood resources, and

share the benefits equitably, are extremely important. The fishery is a very

valuable part of the economy of this Province. It is the most important industry

for a great number of our communities.

MR. EFFORD: It is about time you realized it.

MS. VERGE: Mr. Speaker, the Minister of Works, Services

and Transportation should talk. He sits in a Cabinet which has badly neglected

the fishery. The Provincial Government has been extremely derelict in its duty

to the people of this Province over the last few years in failing to make

representations to the Federal Government which has jurisdiction over harvesting

and by hiding away from its constitutional responsibility for the processing

sector.

Mr. Speaker, the Member for Pleasantville, in contrast to the

Premier and the Minister of Fisheries, Food and Agriculture, has at least led a

process of examining some of the fundamental issues of maximizing value and

sharing benefits. I commend the Member for Pleasantville. I would be much

happier if that initiative had been taken by the Premier or the minister

responsible. The attitude of the Administration overall is symbolized by their

downgrading the status of the fisheries responsibility for taking away a

separate, distinct Department of Fisheries and combining it with agriculture,

compounding the neglect by appointing to the portfolio an individual who has no

competence whatsoever in the field of fishery.

I would like to come back to the motion of the Member for

Pleasantville. I only have fifteen minutes total speaking time. I will examine

the member's resolution clause by clause. The first recital indicates that our

Province's "fish resource continues to be a substantial factor in our economy."

It is about time that more of us started acknowledging that. There has been too

much gloom and doom about the fishery. Of course, the actions and the behaviour

of the Wells Administration has reinforced that negative view of the fishery.

Make no wonder the mainland press have written off our fishery. Nevertheless,

those of us who live here realize that the fishery continues. Even after the

groundfish moratorium the fishery continues to be a major contributor to the

Province's economy.

The most recent data indicate that the overall landed value

of fish and seafood during 1994 was $212 million. That contrasts with $261

million in 1991, before the moratorium. That is the total value of the landed

material. The big change has been the composition of that landed value. Before

the moratorium, the bulk of the value came from groundfish,

whereas in 1994 most

of it came from shellfish. Of the $212 million total landed value, $191 million

was represented by shellfish, mainly crab, shrimp, lobster, scallops and clams.

Only $14 million came from groundfish, mostly turbot and redfish, and $6.9

million from pelagics, mainly herring and swordfish. The big change was the

composition. The total is down but not nearly as much as commentators would have

us believe: $261 million in 1991 before the moratorium, $212 million last year.

As the Member for Pleasantville indicated, however,

significantly fewer people were employed in the fishery last year compared to

the period before the moratorium. One of the reasons is that shellfish which

constitute most of the landed value, involve less processing and fewer jobs.

Crab and clams all along have had a fair bit of value added through processing;

however, lobster and shrimp have had relatively little value added, and that is

obviously in response to market forces. In the case of crab, some of us talked

last year about jobs going out of the Province with industrial sections. A bad

situation has become worse with more deals having been made by processors for

the new season to ship out of the Province industrial sections or semi-processed

product.

Now, we are told, part of that is in response to the Japanese

market, and part of it has to do with a preference by Japanese buyers for final

processing to be done in the Orient. Nevertheless, the employment associated

with our fishing industry has dropped, and that is a major concern, but the

first recital is correct in acknowledging the ongoing significance of the

fishing industry to our economy.

The second recital deals with government's obligation to

create jobs and raise revenues. Now, everyone would agree with that although we

may have differing opinions on the relative roles of government and the private

sector. I would maintain that the onus for job creation has to rest with the

private sector, which has the capacity to create employment, and raising revenue

by government, in some instances, is an impediment to employment. The Wells

Administration payroll tax is a notorious example of a revenue-raising measure

that has discouraged jobs in the Province.

The third recital deals with government's responsibility to

ensure all citizens benefit to the highest and fairest extent from resources

owned in common. I would certainly agree with that, but acknowledging that

fairness has to be extended to investors in the fishing industry, investors in

harvesting and also processing, who are entitled to a return on their investment

consistent with the risk they undertake.

The resolution itself calls upon the Provincial Government to

ensure that our fish resource is managed to provide the highest level of

employment through maximum local processing where practical, so the emphasis is

on management to ensure employment through processing where practical. Then the

resolution goes on to say, where appropriate through devising other means of

ensuring the whole Province benefits from value which may be derived above

reasonable levels of return for harvesters and processors.

Mr. Speaker, in speaking to his motion, the Member for

Pleasantville used a variety of terms to describe his major goal. I would

suggest that the term `maximizing value' is more in keeping with a worthy

objective. Maximizing employment sometimes does not give good overall results.

Maximizing employment is an attempt to ensure distribution of income, not

necessarily maximization of income. Maximizing the value obtained from the

resource, or in other words, maximizing the sales value of products obtained, is

a better goal because it brings more money into the economy. The distribution of

the benefit, or the money brought into the economy, is another extremely

important issue.

Focusing on maximizing employment, which has been done in the

past, has lead to problems. In our own recent experience, the preoccupation with

maximizing employment has contributed to the destruction of groundfish

resources, and we have to learn lessons from our past mistakes. Also

concentrating on maximizing employment has contributed to the excess capacity in

the processing industry, a question which the Wells Administration has been

avoiding dealing with, as we have seen here again this afternoon. Furthermore, a

preoccupation with maximizing employment rather than maximizing value typically

leads to a poorer quality fish landed than optimal quality, and results in

production of lower value products than might be possible through an emphasis on

maximizing value overall.

In some people's eyes the focus on maximizing jobs involves

imposing on the industry, on investors, limits on products that can be made or

technology that can be used. It can amount to an ultimately self-defeating

intrusion by government in the private sector - self-defeating in the sense of

lowering the value obtained or diminishing the results over the medium to long

term.

We have to ask, what is a reasonable level of return? The

fishing industry is notoriously risky and there have always been fluctuations.

There have been good years, there have been bad years. I would suggest that it

is not appropriate to look at rate of return in just a small span of time, just

one or two years. What would be fair would be to try to quantify rate of return

over a longer period of time, such as the useful life of an investment.

In the case of our crab industry, there are processors in the

Province who have invested significant capital in modernizing plant and

equipment so that they can meet the exacting demands of Japanese consumers.

Those processors are able to employ more people in producing products to meet

the final consumer compared to other processors who have made much less

investment in plant and equipment, who are shipping crab out either unprocessed

or barely processed. Those who have invested should be entitled, in a

competitive environment, to a reasonable return on that investment, which may

take a period of time.

The final clause of the member's motion where he gets into

devising other means of sharing the benefits, is one that, I agree with the

member, deserves further exploration. Harvesting is within the jurisdiction of

the Federal Government. That is, most of us in the Opposition feel, a mistake

made when the Terms of Union were negotiated. The Peckford Administration made

an attempt to regain meaningful control over the fishery through the

constitutional talks of the 1980s, and that was one feature of the long-debated

Meech Lake Accord that some of us felt represented a potential gain for the

Province. At any rate, harvesting remains within the constitutional jurisdiction

of the Federal Government, so the question of a Royalty or a resource tax would

probably have to be handled by the Federal Government. I would be interested in

hearing the ideas of the Member for Pleasantville on a provincial Royalty given

the jurisdictional division.

At any rate, Mr. Speaker, I would like to express support for

the resolution overall. I think it might be better if the emphasis were on

maximizing value overall, which is a phrase that the member used in his speech,

and that there be another provision dealing with sharing equitably the value

derived from the resource, since I agree with the member. It is a common

property resource. These are issues that we need to address, not only with

respect to the fishery but also other raw resource-based industries such as the

forestry and mining.

MR. SPEAKER: Order, please!

The hon. member's time has elapsed.

MS. VERGE: Thank you, Mr. Speaker.

MR. SPEAKER: The hon. the Member for Fortune - Hermitage.

SOME HON. MEMBERS: Hear, hear!

MR. LANGDON: Thank you, Mr. Speaker.

Coming from a fishing district along the South Coast, I

understand the premise on which the resolution is based. There is no doubt about

it that the fishery of the present time and that of the future is going to be

quite different from that of twenty-five or thirty or even ten years ago. I am

fortunate, I guess, in the fact that on the South Coast of the Province we have

a tremendous future in aquaculture.

In the district of the hon. the Member for Burgeo - Bay

d'Espoir - Mr. Gilbert's district - we have probably one of the greatest

potentials of aquaculture, not only in Newfoundland, but probably in all of

Canada. A company involved in that particular venture known as SCB fisheries

takes into account some of the things that the hon. the Member for Pleasantville

talks about, and that is maximizing the number of dollars that comes to this

Province in value-added products in the fishery. I would like to comment a

little further on that.

The SCB fisheries - in talking to the proprietors and owners

of that particular fishery, they say they would like to see the trout, steelhead

trout and salmon from the Bay d'Espoir area put into total secondary processing

value packs and using the liver of the salmon for salmon pat, using the head

crushed so that they can extract oil for the market and so on, to utilize the

full fish. So if that is the case, Mr. Speaker, maximizing the secondary

processing, there is no doubt about it that's where the jobs are. On the other

hand, we must also remember that, philosophically speaking in the free market,

we cannot expect, I guess, to dictate totally to the way that the processor

would work and neither should we to the fishermen.

The government does have a responsibility, there is no doubt

about that, to achieve maximum return on its resource. I guess the Newfoundland

processor and the Newfoundland fishermen find themselves, in the last year or

so, in a situation that is unique, where the price of crab has gone from fifty

cents a pound to two dollars plus. That is due, in no small part, to the fact

that the Alaskan crab resource has been depleted and its export to the Japanese

market has dried up to some extent; therefore, that's the reason why we have an

increase in price for the Newfoundland resource because of the demand in that

particular market. So we are faced with the situation, in short term, to allow

the resource to go out as the market dictates, not in meat processing but in the

industrial pack. As a result of that, we probably will not be able to get the

total maximum benefit out of the industrial pack as we would out of the

processed crab. So therefore the government, no doubt, has to look at the

possibility of creating new revenues from that particular fishery by maximizing

its possible impact to the people who work in the plants.

Also, Mr. Speaker, there is no doubt about it that we find

ourselves, as I said earlier, with a new fishery. I am also glad to announce, as

I have said in the House before, that in my district also, in the town of

Belleoram, through Dr. Dabinett of the University and Marine Biology Lab here,

he has particularly perfected the giant scallop that can be grown in captivity.

And, as I said, it is going to be done in the Belleoram plant.

AN HON. MEMBER: Scallops?

MR. LANGDON: Scallops.

I think that hatchery will produce somewhere between 10

million to 20 million spats a year when it is in production and that should be

in production, growing by the end of May. And obviously, if we were to achieve

the maximum benefit from that, what we would have to do, of course, is make sure

that the processing is done in the local area or in the Province somewhere, to

achieve the total benefits achievable under that, and for maximizing the profit

for the company and maximizing the amount of work for the people of Newfoundland

and Labrador. And that's what it's all about. Obviously, this is what the

resolution put forth by the Member for Pleasantville is about today, that the

fish resource continues to be a substantial factor in our economy and to

maximize its benefits.

Also, in the South Coast and from the area that I represent,

there is a number of fish there that had not been processed, not been caught and

I am sure that we can maximize the benefits from that as well. One of the fish

that is in abundance on the South Coast for a month or two of the year is

dogfish; and a company in Prince Edward Island has perfected, I guess, the cat

and dog food out of the dogfish there and has a viable industry. Only last week,

in talking to the owners of Compak Seafoods who have a plant in Hermitage and

Gaultois on the South Coast, I talked to them about buying from the fishermen

because that has not been done over the last - well not in any year - to buy

dogfish from these people, and he has assured me that dogfish and the maiden

ray, - another word for the maiden ray is skate - there are markets for that and

hopefully, this year, these can be done as well. Now, from the skate, obviously

the skate wings, if you went to a restaurant and bought the scallops from the

skate wings you would not be able to identify them, a layman wouldn't, from the

scallop; so obviously, we have a number of species in the water that we can

maximize from and get the fullest potential.

In the resolution brought forth by the Member for

Pleasantville, it calls upon government to maximize, as it said, the secondary

processing. Also, I suppose, as I said previously, that with the resource we

have, if we were going to completely control the marketplace, then we would have

to control the economy and we would have, I guess, what is known as a socialist

or communistic regime; nevertheless, we have to get the maximum results from the

resource that we have and it is incumbent upon government to make sure that

happens. Let us hope, as a result of the bringing it to the House of Assembly,

that over the next number of months and probably before the next fishing season

for crab and other species, that we can put a process in place to make sure we

receive the total benefits accrued from that.

When I think of the situation of FPI as a plant - and I

understand from the reports of the company that they have reached maximum

profits this year for their company, but most of their secondary processing is

done outside of the Province and that is done in the New England market. The

Burin plant continues to put these particular secondary processing products and

that is where the jobs are. So I honestly think, as the resolution states, that

the highest maximum return comes when we do the secondary processing, and that

has to be, and is the jurisdiction of the Provincial Government. The actual

licences themselves come from the Federal Government and we do not control the

number of licences that come to the fishermen; nevertheless, we do have the

wherewithal to regulate the processing that is done here in the Province.

Mr. Speaker, the fishing industry, as I said, in the

Province, has undergone a tremendous downturn in the ground fish fishery, due to

the moratorium, and we see large numbers of our people who are unemployed and

receiving, as we said, TAGS benefits from the Federal Government. But with the

resource we have, the fishing resource, we have to, overall, make sure that we

receive the maximum potential from the resource we have. If we don't do that,

then obviously, the amount of revenue generated to the Province will not be as

great as it could be, and therefore, will not bring the total benefit to the

people as a whole.

I really believe the government is doing that. I was talking

only last week with the Deputy Minister of Fisheries, Mr. Dean. They are doing

major undertaking within the department to look at ways and means whereby they

can maximize the total catch to this Province and to the people concerned. They

are doing a new policy analysis of ways in which we can generate secondary

processing in this Province, so really, the work has already been done by the

Government of the Province to explore ways whereby we can utilize the fishing

industry and provide maximum contribution to the Province. The Province will

continue to promote secondary processing by providing broad licensing

flexibility and incentives to facilitate increasing outputs of value-added

products. Obviously, it is the objective to maximize employment through minimal

local processing and to be responsive to the realities of the marketplace, as I

said earlier.

We have talked so much about the sealing industry, and I

think if we were to go to the supermarket today and we were to see a roast of

seal in the supermarket as compared to a chicken or a turkey, not too many

Newfoundland people would buy it. The product itself is not palatable to the

people here, so we have to find some new ways to do that as well. So it is with

the Japanese marketplace, or with the Chinese marketplace, or into Europe. The

market is somewhat driven by the realities that these people want, and that is

the way of the market system, the free market system.

The challenges facing the Province in the fishing industry

are no different from those faced by other jurisdictions competing in the same

market, so we have to be aware of that. Also, as has already been stated, by I

think, the Leader of the Opposition, the processors have invested heavily in new

machinery and so on to process crab, and so also have the fishermen become

heavily involved in the crab industry. So I guess, at this particular time, they

are reaping the benefits from, as I said, the collapse of the Alaskan fishery.

There is no doubt about it that the collapse of the ground

fishery out there cannot be compensated in full by other species such as the

crab. That is understandable, but nevertheless, as the resolution suggests, we

must be diligent and we must find ways to maximize the resource we have for the

public and for the people we represent. There is also no doubt that the industry

is saddled with extremely high levels of investment in plants, in fishing

infrastructure, fishing gear and fishing vessels, on which debt payments have to

be met, insurance paid and normal maintenance costs incurred.

So for the industry, as a whole, from one point or more,

fisheries such as the crab and shrimp are critical to the very survival of the

industry, and its rebuilding concurrent with any improving resource prospect.

That is very important for the Newfoundland economy as well, those people who

are involved in the crab fishery. There is also no doubt that there are more

people involved with the crab this year than last year, and as the Member for

Pleasantville has stated, and rightly so, the increased value of the crab to the

Province this year is way above what it was last year and has been one of the

highest in recent years. Therefore, there is no doubt about it, the Province

does reap the Royalties from that but not as much as we probably would like if

we were to see jobs maximize in the Province as a whole.

There is no doubt about it, the fishing industry will

continue to make an invaluable contribution to our economy in the future. And as

we rebuild in all of the industry we have to make sure to maximize the benefits

that come to the people we represent. We cannot afford to make the same mistakes

and allow our resources to be depleted as they were in the past. I believe the

prospect for the return of the groundfish industry, especially along the South

Coast, is encouraging.

In fact, only a few weeks ago when I was down in my district

and some of the fishermen from the Hermitage, Seal Cove area put out their

gill-nets to catch redfish, actually, the nets had to be taken up because there

were excessive amounts of cod in the nets. In fact, it was reported that one of

the longliners brought in 30,000 pounds of cod from the nets that he had out to

catch redfish.

So the sign is encouraging and I'm sure that when the cod

returns, like the other resources that we have, we must maximize the resource,

we must maximize in jobs for the community, and must maximize in revenue for the

Province. There is no doubt about that. The challenges we face are difficult but

I believe we will succeed in doing the best for the people we represent.

MR. SPEAKER: Order, please!

The hon. member's time has elapsed.

MR. LANGDON: Thank you, Mr. Speaker.

AN HON. MEMBER: By leave!

MR. SPEAKER: Does the hon. member have leave?

MR. W. MATTHEWS: By leave!

MR. SPEAKER: By leave.

MR. LANGDON: Thank you to the Member for Grand Bank.

In concluding, Mr. Speaker, there is no doubt about it that

we have to maximize the potential to the Province, to the fishermen, to the fish

plant workers. I'm sure that in time we will do that, make sure we do that, to

maximize the full value of the resource that we have. Thank you, Mr. Speaker.

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

MR. W. MATTHEWS: Thank you very much, Mr. Speaker.

I want to take a few minutes to participate in the debate on

the resolution put forward by the Member for Pleasantville. It has been

interesting to listen to the views of speakers, so far. It is an issue on which

there are, I guess, wide-ranging opinions on a lot of what should be done or

what shouldn't be done and the way about it as it pertains to our fishing

industry and our fish resources, using those resources for the maximum benefit

of Newfoundland and Labrador.

It makes a lot of sense, I say to the Member for

Pleasantville. The Member for Pleasantville sort of drew attention, I think it

was last week on CBC radio, when he was on there in debate with Mr. McCurdy - I

think it was last week, or the week before - on the crab situation. Since then,

I feel the member has been under sort of a vicious attack from both inside and

outside his caucus. A lot of people -

MR. SULLIVAN: Earle told him off.

MR. W. MATTHEWS: Yes, well, I know the President of the

Fishermen's Union really gave him a hard time that morning, I had reports. I

understand he has had some vicious attacks from inside his caucus, by watching

the -

MR. ROBERTS: (Inaudible) me again?

MR. W. MATTHEWS: No, not you. They have stopped attacking

the Government House Leader, I say to him.

MR. ROBERTS: Given it up (inaudible).

MR. W. MATTHEWS: They consider the job to be done, I say

to the Government House Leader. They consider the job is done on the Government

House Leader and they are now turning their attention to the Member for

Pleasantville.

I was watching the Minister of Works, Services and

Transportation while the Member for Pleasantville was speaking. I thought we

were going to have to get a restraining belt to put on him, Mr. Speaker. I'm

sure that if the minister were to have given in to himself he would have gone in

the back benches and god knows what he would have done. He was muttering

something about: `If I could only get the Member for Pleasantville on the wharf

in Port de Grave' - I thought he said it would be the end of him.

MR. NOEL: I'm going to run out there next time.

MR. W. MATTHEWS: It would be a big improvement, I say to

the Member for Pleasantville, if only he would run out there. I would say the

electorate in both districts would be so pleased. The people in Pleasantville

would be so happy that they are rid of him, and the people in Port de Grave

would be so relieved that they are rid of Efford. They would be very happy to

get you and the people of Pleasantville would be so happy to get rid of you, I

say to him.

MR. SULLIVAN: Port de Grave would be an appropriate name

- Port of grave.

MR. W. MATTHEWS: Port of grave.

Mr. Speaker, it is a serious resolution. There is one thing

that struck home to me, I guess, this morning after this debate and watching

this crab industry situation unfold over the last couple of weeks. Thank God, it

has been resolved, I have to say that. I supported - what the industry

requested, the exemption, I didn't support that, because I didn't know what

choice government would have at this late stage of not granting the extension.

They had to grant the exemption or else we would have had an industry in turmoil

that would have cost the Province somewhere in the vicinity of $100 million.

I said publicly that if the government, in its wisdom, wants

to undertake a review, an analysis of this situation, do it from now on until

the next season so that everyone knows what is evolving, everyone will know the

ground rules, everyone will know the decisions well in advance. But you can't

change it on the eve of putting your pots in the water. You can't change it on

the eve of processors having lined up markets, of fishermen being ready to fish.

You can't change the game then; it is too late. You have to proceed. Of course,

it would have been a great expense and a great loss to the economy of this

Province if in any way this fishery had been disrupted at that very late stage.

So I understood the Member for Pleasantville's concerns, and

I understand the Member for Eagle River's voice of similar concerns, but that

has become almost a daily occurrence now, that the Member for Eagle River is

expressing opinions of his own, or opinions of others. He is not very

consistent. He sort of senses that there is a little bit of a bandwagon and he

likes to jump on, but what you have to watch with the Member for Eagle River is

that he will jump off the wagon just as fast, so you don't know where he's

going. He is a jumper on-er and off-er.

AN HON. MEMBER: He would jump off a roller coaster.

MR. W. MATTHEWS: Yes, he would jump off a roller coaster

if he thought he wouldn't hurt his head.

Mr. Speaker, there is very little you can argue about in the

resolution. Government must do everything possible to create jobs. Yes,

government must. They haven't yet. The government hasn't yet, but the government

must do everything to create jobs and raise revenues to maintain valuable public

services. No one can argue against that. I can't. Who can disagree that our fish

resources continue to be a substantial factor in our economy - 270 million last

year?

MR. SULLIVAN: The crab fishery?

MR. W. MATTHEWS: No, the total.

MR. SULLIVAN: In the fishery, 212 (inaudible).

MR. W. MATTHEWS: I am sorry?

MR. DUMARESQUE: Laughing rocks.

MR. W. MATTHEWS: Laughing rockets?

MR. DUMARESQUE: Rocks.

MR. W. MATTHEWS: Rocks.

MR. DUMARESQUE: (Inaudible) little fellow got them

(inaudible).

MR. W. MATTHEWS: Yes, and I am going to tell you, I know

who plays with it most. It is not the little fellow, I say to the Member for

Eagle River, who plays with a laughing rock. It is not the little fellow.

Government has a responsibility to ensure that all citizens

benefit to the highest and fairest extent from resources owned in common - no

doubt.

AN HON. MEMBER: Is Bud light going to speak on this?

MR. W. MATTHEWS: Bud light? Light Bud - not Bud light,

light Bud.

BE IT THEREFORE RESOLVED that the government ensure that our

fish resource is managed to provide the highest level of employment through

maximum local processing where practical. That means in-Province, I guess.

MR. DUMARESQUE: (Inaudible).

MR. W. MATTHEWS: I am talking to the Member for

Pleasantville, I say to the Member for Eagle River. I am trying to understand

his resolution. I want to understand where the member is coming from.

MR. DUMARESQUE: Give us an idea if you have one.

MR. W. MATTHEWS: I do have an idea, I say to the Member

for Eagle River, but I wouldn't be permitted to express it here; it would be

unparliamentary - about the hon. member, that is.

The member has concern, a concern that I have expressed for

years, by the way, about fish products in raw form - a more raw form than it

should be exported in - going out of this Province, where I thought we had an

opportunity to value add and create jobs, so I agree with the Member for

Pleasantville on that aspect. It is something I have advocated for years. We

have shipped too many jobs out of this Province - too many jobs - and the hon.

member believes that we are doing the same thing now with the crab fishery, I

believe; he believes that. Now, there are those who will counter the argument.

Those who are involved in the industry, processors, fishermen, the union, are

sort of all on the same wavelength when it comes to this. The Member for

Pleasantville thinks they are in cahoots, now, whatever that means - cahoots. To

me, cahoots means like it is almost for a common cause that is not really -

MR. NOEL: Their own cause rather than (inaudible).

MR. W. MATTHEWS: Okay, their own cause rather than the

cause of the common good.

Now, there are those who understand the crab industry a lot

better than I do. There are those who understand the crab industry a lot better

than most people in this House do. This gentleman here understands the crab

industry better than anyone else in this House, I would suggest. Better than

anyone else in this House, the Member for Ferryland understands the crab

industry.

MR. SULLIVAN: I was never involved in the crab industry.

MR. W. MATTHEWS: Never involved in it, but he knows it

well I tell you. Any topic that the Member for Ferryland talks about, he knows

about, quite different from the Member for Eagle River who talks about

everything and doesn't know anything about anything. Quite different, quite a

comparison. If you ever wanted to look at two extremes of knowledge, Mr.

Speaker, if you ever wanted to do a comparison on knowledge and lack thereof,

compare the Members for Ferryland and Eagle River. If you ever wanted to compare

someone who knows what they are talking about and someone who doesn't know what

they are talking about, compare the Members for Ferryland and Eagle River. Talks

a lot about nothing, the Member for Eagle River.

AN HON. MEMBER: (Inaudible) leader.

MR. W. MATTHEWS: Bamboozled. When the Member for

Ferryland speaks now he will bamboozle the Member for Eagle River, he will blind

him with statistics.

MR. DUMARESQUE: How come you couldn't get the job no one

else wanted?

MR. W. MATTHEWS: Well, I say to the Member for Eagle

River -

AN HON. MEMBER: (Inaudible).

MR. W. MATTHEWS: I thought the hon. member was going to

say Snook would have won.

Mr. Speaker, it is a very serious issue, it is a very complex

issue, I say to the Government House Leader. It suddenly hit me this morning

when we had a little discussion in caucus about the resolution.

AN HON. MEMBER: (Inaudible).

MR. W. MATTHEWS: Only a small number of them. No, we were

just chatting about the resolution, and then people started to talk about the

situation in our fishery and about crab and other stuff.

SOME HON. MEMBERS: (Inaudible).

MR. SPEAKER: Order, please!

MR. W. MATTHEWS: Mr. Speaker, it was amazing to see in

that group of people such a divergence of opinion. It was such a difference of

opinion about this one issue. I just sat there and I listened to whoever wanted

to talk about it, and I said: It tells me something about our fishing industry,

about how complex it is. I wondered then if we will ever sort it out to our

satisfaction. I don't think we will ever sort it out to our satisfaction, I say

to the Minister of Health.

AN HON. MEMBER: (Inaudible).

MR. W. MATTHEWS: Sort out where you got your suntan -

never sorted out to our satisfaction, I say to the Minister of Health.

MR. SULLIVAN: I know where he got that. A Caribbean

cruise, and the health care system falling down around our ears.

MR. W. MATTHEWS: Yes. Some worried, now, about the

waiting list. No, but I wondered really if we will ever be able to address the

problems and the complexities of the fishing industry to our satisfaction.

Because it is so complex. It is. When you look at - you know, people this

morning expressing views about: Why don't we let more people get in and share

the wealth? Why can't we do that? Then of course you have the problem of the

resource. How do you do that? Do you have more people sharing the level of

resource that we now harvest? Then of course that brings the earnings down for

everyone. Do you do that? There is a concern for the resource, the amount of

fish or crab or whatever is there. On and on, it gets very complex. How do you

address it?

MR. SULLIVAN: Sure the scientists change their minds

every day.

MR. W. MATTHEWS: Of course they do. But you know what I'm

saying, to the Member for Pleasantville. If you allow more people in you can't

really take more resource. So that is going to bring the earnings down for those

now in and those coming in. How do you address it? I think that is what the

Minister of Works, Services and Transportation is sort of upset about, listening

to him mumble on there a bit earlier. He knows that those involved in the crab

industry today haven't always had good years. They haven't always been good

years.

AN HON. MEMBER: (Inaudible) price.

MR. W. MATTHEWS: Price is what it is all about, isn't it?

The price of anything is what it is all about, Mr. Speaker. Because it is up

this year, as the Member for Ferryland said so many times, doesn't mean that

next year it is not going to go down. What do you do then if you have 1,000,

2,000 or 5,000 new entrants into the fishery and the price goes down? What do we

have then? We will have 5,000 more people who will come to the government and

say: You have to help us out because you let us in, and now you have to keep us

alive.

So is that the answer, is my point. Is that the answer, to

let more in, sharing up the resource that we are now taking, and then when the

industry dips and the resource dips then you have to bail it out. So it is

complex, I say to the Member for Eagle River. You just can't say: Let more in to

share it up. You have to look to the future and ask: What might happen down

here, and if this happens what are the consequences to the governments, what are

the consequences to the economy?

AN HON. MEMBER: (Inaudible).

MR. W. MATTHEWS: I can tell the hon. member that I'm very

worried and concerned about a resource tax. I can't jump on board with the

principle of a resource tax like that. I can't do it. I can't.

MR. ROBERTS: (Inaudible).

MR. W. MATTHEWS: Well he probably is against it, I would

say. The Member for St. John's East I would think, without knowing, is against

it and the thing about it is, it would be a federal tax.

AN HON. MEMBER: Not necessarily.

MR. W. MATTHEWS: Well what are you talking about, an

export tax? You don't know what you are talking about then. A resource tax, are

you going to tax the resource that comes out of the water so you are taxing the

harvesters?

AN HON. MEMBER: (Inaudible).

MR. W. MATTHEWS: Oh, you want more taxes on it all. You

said - put tax on everybody. So I ask the member, what will that achieve? What

will it accomplish besides making the coffers of the Province a little richer,

they will put more money into the general revenue fund but what will it do for

the industry itself? What will it do, seriously? What will it do to straighten

out the industry and the problems in it if today we administer a resource tax?

AN HON. MEMBER: (Inaudible).

MR. SPEAKER: Order, please!

The hon. member's time is up.

MR. W. MATTHEWS: Can I have leave to finish for a second?

MR. SPEAKER: Does the hon. member have leave?

MR. W. MATTHEWS: It is just -

AN HON. MEMBER: Be nice.

MR. W. MATTHEWS: I am going to be nice because it is

something that I would like to really flesh out, I say to the member, in all

sincerity. Since the Member for Pleasantville raised the issue of a resource

tax, I think it should be fleshed out a bit more. What are the implications of a

resource tax? I know the Province would - if the Province could - it is a

federal tax on the resource coming out of the water, if then you tax the

processors on amount of throughput, if you tax then how much is exported, so the

Province gets more taxes and our general revenue account is healthier.

AN HON. MEMBER: And we can open these hospital beds you

wanted open.

MR. W. MATTHEWS: I am not arguing against that, we all

know we need that but my point is that we are trying to address the problems in

the fishing industry and applying a resource tax, I don't know how that is going

to sort it out is my point. It is not connected, it is two different issues. The

problems in the crab fishery today are totally unrelated to whether we have a

resource tax or not, I say to the -

AN HON. MEMBER: (Inaudible).

MR. SPEAKER: Order, please!

MR. W. MATTHEWS: I am sorry?

AN HON. MEMBER: We are not interested in the resource tax

(inaudible).

MR. W. MATTHEWS: No, I know that. I have noticed that is

out of there and I have also noticed that the resolution has been sort of, what

I would call watered down, weakened a bit. I am sure that is because of the

influence of the Caucus and because of their concerns about this matter. I know

there are concerns, there are concerns amongst the Caucus there, I know that. We

have a difference of opinion here which I knew this morning when we had a little

talk about it. I say to the Member for Pleasantville, if he wants to talk about

a resource tax let's not do it in a tangle with trying to address the problems

of the crab fishing industry or the fishing industry in general. If you want

more money coming into the government Caucus that is an option but you are not

going to straighten out the problems in the fishing industry by applying a

resource tax is my point. We all know there are problems with our fishery. There

are problems that need to be reviewed and analyzed. We need to look at it and I

support that but I cannot jump on board a resource tax immediately and say yes

it is a good thing. You have to know the implications of any tax but especially

something when we are talking about -

MR. A. SNOW: (Inaudible).

MR. W. MATTHEWS: The Member for Menihek thinks the

concept is good, he says. I can understand that.

AN HON. MEMBER: His fishermen support him.

MR. W. MATTHEWS: Yes, all the fishermen in Menihek

support that but of course the Member for Menihek and Pleasantville, there is

something in their past that is a little bit similar, there is something there.

I am not sure what it is. There is something in their past that is a little

alike and something in common with the Member for St. John's East I believe and

the Member for Gander, yes but it is a complex issue. I commend the Member for

bringing it forward, I do. I think we need to debate issues like this more and

more. We need to debate it here in this House of Assembly, as a Caucus you need

to debate it, as a Caucus we need to debate, the industry needs to debate it, we

all do. The Caucus, the NDP needs to debate it and see what divergence of

opinion there is in their Caucus.

AN HON. MEMBER: (Inaudible).

MR. W. MATTHEWS: No they don't and there are days I envy

the member. There are days when I sit in our Caucus and I envy the Member for

St. John's East at how easy it must be to reach a consensus because we have

problems on some days but the government House Leader must be the most envious

of all. There were people ready to kill over there today on this resolution -

ready to kill, issuing threats.

AN HON. MEMBER: (Inaudible).

MR. W. MATTHEWS: No, not to kill you. There were members

over there ready, like the Minister of Works Services and Transportation. I

would be surprised if he is not on his feet after me now to speak to this. He is

a great supporter of this resolution. He is a great supporter of the ideas put

forward by the Member for Pleasantville. I am sure he will be on his feet with

full support for this resolution.

It is in this Province everywhere. It is very complex. It

needs to be addressed, and I commend the member for bringing forward the

resolution. I say that sincerely. I think it is good to have a debate on it, but

we have to have a review, a thorough review, I say to the minister, over the

next six to ten months. Let's not wait until the eleventh hour to do it again.

But we have to keep in mind, with whatever we anticipate doing, the involvement

in those in the industry who are there now, the investment that they have put

into the industry, to their enterprises, to their processing facilities. That

all has to be considered before we make any radical changes, and we have to

certainly look at the resource. We cannot deplete another resource, I say to the

Member for Eagle River. It is funny now to say, jump in, throw more into the

industry.

AN HON. MEMBER: No leave; get down.

MR. W. MATTHEWS: Oh, Mr. Speaker, how I wish I had met

the member when I was younger.

MR. SPEAKER: The hon. the Member for Eagle River.

MR. DUMARESQUE: Thank you very much, Mr. Speaker.

I am very pleased today to have a few words. For the first

time in a long time I get the chance to follow next to the Member for Grand

Bank. The Member for Ferryland will be coming behind me, not unlike how he just

came behind the Member for Humber East, and not unlike how he will come behind

the Liberal Party the next election. It is going to be his trademark. He will be

behind for the rest of his life if he stays here.

Mr. Speaker, I am very happy to speak on this issue and I

want to use this opportunity to pay tribute to the fishermen and plant workers

and the industry out there this year in this Province. I also want to touch on

what is happening in my district to illustrate that the Atlantic groundfish

strategy is working, that the Atlantic groundfish strategy is being successful,

and indeed we should be out commending Brian Tobin and the federal government

for what they are doing on this particular issue.

I want to start off by saying to all people of this House,

and through this House to the people of this Province, that we should be

standing here commending the fishermen and the plant workers of this Province

today for what they are doing to seize this challenge, to seize this opportunity

to respond to the challenge of their lifetime, and it is great to see fishermen

and plant workers and companies out there making money. There is absolutely no

problem with that, and I hope that we will see in the future that the fishermen

and the plant workers and the industry in this Province be as good in this

country as they are in Iceland and in Norway and in other parts of the

Scandinavian countries, where they are occupying the best seats in society as

far as getting some economic benefits from an industry. We have had for too long

our industry being looked down upon and our people not getting some adequate

return from our industry.

Indeed, today we have an opportunity to be very proud of what

is happening in our shrimp industry. We are getting jobs from that shrimp

industry, not as many as we would like, but we do have jobs today, $50,000;

$60,000; $70,000 and $80,000 jobs in that shrimp industry. They should still be

there. Those companies need to be successful. That does not mean that we should

not also look at having an inshore shrimp fishery. It does not mean that we

should not also have that shrimp processed on land in Canada - we should have

that - but right now today we can be proud that we do have fishermen out there

in the shrimp industry earning $50,000 or $60,000 a year, very happy to see

that.

In the crab fishery this year, as was last year, there is

going to be another great year, and it is very, very encouraging to see

fishermen out there making good money, and obviously companies that are able to

expand on the workforce that they have. I think, Mr. Speaker, we have to

acknowledge that what the Minister of Fisheries and Oceans in Ottawa did with

his crab management plan was the best thing he could possibly do this year. He

went this year and said: we are going to spread the resource around. This year

we are going to have 1500 to 2000 new people working in the crab fishery on the

harvesting side, because of those seasonal licenses he has put out there. He has

done that. He has been able to deliver on those extra jobs that we need from the

fishery, good paying jobs, and at the same time he has put the trip limits and

the weekly limits in place, that worked there before on the full-time and the

supplementary fleet in the crab fishery.

What we are going to see this year is a much more orderly

harvesting and processing of the crab industry, which will see plants all over

this Province have their processing life extended this year so that they will

get the maximum out of this resource. I think it is the best crab management

plan that we have ever seen in this Province. Without a doubt, I think that is

the case, and if we do what we are saying we are going to do, to make sure that

the industry out there, the crab industry, does recognize, and particularly the

processors, they have to recognize that they cannot take the crab out in

industrial form in the kind of numbers they are talking about because that will

affect the processing jobs, the plant workers jobs.

That is something we want to have control over, and I am sure

that the minister here is going to send a strong message on that particular

aspect of it. When it comes to sections, there are more jobs in the sections,

the consumer pack sections, than there are in any other part of the crab

processing industry.

AN HON. MEMBER: (Inaudible)

MR. DUMARESQUE: There are more jobs in the consumer pack

section of the crab than there are in any other aspect of the crab processing.

In the meat there are less jobs than there are in the consumer pack section,

there are more jobs in the consumer pack

section than there are in the

industrial pack, so I think what we are seeing over the last couple of years,

and what we should continue to see is exactly that process and those percentages

continue. As a matter of fact I would not be unhappy if there was 95 per cent

done in the consumer pack sections.

I would not be unhappy with that because that is where the

jobs are. You will get those jobs in the cleaning, the presentation, the

packaging, and the transportation of those smaller five pound, five kilo

containers, ready for the consumer. I know in my own riding the Labrador Shrimp

Company now are working very hard to get a consumer pack in place where they

will have the legs and the claws. You will be able to go in and pick it up in a

five pound package in the supermarket. This is where the jobs are. There are

more jobs than there are in the meat market because you need a machine, the

machine does the meat extraction. It is the machine which will do the splitting

of the crab and so forth, so if you turn and put the crab into the meat market

you are going to take away jobs. You are also going to take away jobs if you put

it into the industrial pack, where you have the crab come in, you cook it, then

you freeze in bulk form and put it into fifty pound containers. That will then

be shipped out, and yes, we will be shipping our jobs with it.

On the crab processing side, Mr. Speaker, what we have done

in the last couple of years, and what we are going to continue to do this year

is in the best interest of everybody in this Province, the crab processors, the

crab fishermen and indeed the plant workers which I think must be given the kind

of voice and the kind of attention they deserve at this point in time. We are

seeing that done in my riding and I am quite proud to see what these people are

doing at this point with the crab industry.

That is also not lost on other species this year. In the last

couple of years in the Labrador Straits 300 to 400 fishermen and workers have

been getting scallops and getting a premium price for them, up to $7.00 a pound.

That is very welcome news indeed because we do have a healthy scallop resource

over there. Down in the Williams Harbour area, for the first time last year, we

had 150 people who were on TAGS previous to this, who went out with the small

speedboats and got a greater level of earnings from the inshore scallop fishery

in the last two years than they ever did in the cod fishery in many cases.

This is a resource that was never harvested before but we

have identified it and we have kept it at a small boat level so that it is being

done in an orderly fashion. The technology that they are using protects the

interest of the environment and obviously we are seeing good economic returns to

people in the scallop industry in the Williams Harbour area and there is no

doubt that that is going to be extended to other parts of the Labrador Coast and

throughout the Province.

We are seeing the turbot fishery, which last year was a very

valuable one to Nain and Makkovik, and this year I hope that we will be able to

extend it to Black Tickle. I know there are some discussions ongoing to try to

see the turbot that is being - a very healthy stock of turbot at the present

time in the 2J area and the 2Gh area to be harvested and processed in Labrador,

and I want to say to my friend from Ferryland or my friend from Port de Grave

that all we want in Labrador is enough of that turbot to satisfy our processing

needs and I would suspect that we would still have 50 per cent or 60 per cent of

it go to our friends, our neighbours, in Newfoundland and Labrador, that we want

to see get good jobs and get the benefits from this turbot industry rather than

see it go to other parts of Canada before our needs are addressed.

But, Mr. Speaker, at the end of the day, this year, we are

going to have within ten months - and this should not be lost, this message must

go out to all corners of this Province and to all corners of this nation - that

within ten months of the complete closure of the Northern cod fishery, which

affected 126 communities in this Province, within ten months of that, we are

now, this year, going to have 13,000 to 14,000 people working in the fishery,

getting better incomes than they ever had before. It is a proud day for us to be

here, Mr. Speaker; it is a proud day for us to be here and to be able to

recognize that fact. Too many people in this Province today are trying to look

at their navels and trying to find negative aspects of our fishery, trying to

say that this one is to blame, that one is to blame; there is nothing for

anybody any more, it is time for those people who are over there who are

responsible to stand up and go shoulder to shoulder with our fishermen from Port

de Grave or our plant workers in Port au Choix or our people on the Coast of

Labrador and say: you are meeting the challenge like we did and our forefathers

before, and we are going to rebuild this Province, we are going to make the

fishery the best it has ever been; more stable, our communities are going to be

diversified.

Yes, we are going to have different species, yes we are going

to get more secondary processing and yes, the Minister of Fisheries, Food and

Agriculture is going to deliver on the aquaculture industry like it was never

delivered on before, he is going to do it in the seal fishery and, Mr. Speaker,

within four years by the time this TAGS program runs its course, we will have a

very substantial, secure fishery in this Province that was never talked about

for hundreds of years. Too many people in this Province are of the view and we

are still getting it today, everybody talks about the fishery. They say the

fishery is gone; everybody automatically means the cod fishery is gone. They

still can't see beyond the cod fishery and that is what is wrong with our

fishery in Newfoundland and Labrador.

We have to see those other twenty species utilized; we have

to see those extra species brought in and extra processing done with them, and

we have to see those other fish that are out there, the salmon and the char and

the cod too; cod included along with our shellfish, the scallop and the other

industries, the aquaculture, that is where that must come over and take the

meaningful

part it must in our fishery, and that is the kind of thing that will

give the security to our communities that our people out there are looking for.

So we have no axe to grind with this particular resolution, in the gist of it,

but we do have a lot of problems, when we have people opposite and people out

there in the communities who are trying to tear down what we are doing those

days for the first time ever to rebuild this industry on a sound, rational

footing that was never done before and never applied before.

Mr. Speaker, the TAGS program that was put in place, $1.9

billion that was put in place last year by the federal government, was the only

piece of new money in the federal budget; it was a substantial commitment to our

fishery, a substantial acknowledgement of responsibility by the federal

government and yes, indeed, right now, today, we know that that strategy is

working. We know today that our people have not laid back and said we are going

to collect our TAGS cheque even if we have an opportunity to work.

Newfoundlanders and Labradorians are proud people. Newfoundlanders and

Labradorians are great at meeting challenges; Newfoundlanders and Labradorians

are a resilient people who love their communities and want to stay in rural

Newfoundland and Labrador. They are doing it in spades, and we should be here

today commending them for it, saying to them to keep on going, to keep on

getting that extra distance from your fish that you are getting, keep on getting

that extra money from the crab resource or the scallop resource or the shrimp

resource. We should be commending them, Mr. Speaker.

We should be taking every opportunity to acknowledge what

they are doing is what we would probably, a few years ago, never have expected.

We would have thought that this was all over for them. Many people in our

Province even today say that there is no future. The future of the fishery is

nil because the cod fishery is gone. I've said it before and I will say it here

again in this House, the cod fishery is going to return to Newfoundland and

Labrador, the cod fishery is going to be alive and well in Newfoundland and

Labrador, but we are not going to harvest cod and process cod like we did in the

past.

We are going to have a much more effective management plan,

we are going to have a much more substantial scientific background to our total

allowable catches, we are going to have a much more effective quota system and

resource allocation policy which will see areas of the Province supported, and

obviously the interests of this Province supported before the interests of

another province until all of our needs are met. At the end of the day everybody

out there these days is scared by people out there indicating that their

community is gone, that resettlement is in place, and all those things.

They are saying: You can't have in five years' time 10,000

people in the cod fishery. I don't think that there should be any more than

10,000 to 15,000 people in the cod fishery if we are looking at a total

allowable catch in the area of 100,000 metric tons. What we have to do is what

we are doing in Labrador, what we are doing in my riding. In Cartwright,

Labrador we have a crab resource within eighty miles off there. It is 1,000

tons. It provides 150 jobs, 160 jobs, better security than they ever had before.

They are making money at that plant, $1 million a couple of years ago.

MR. SPEAKER: Order, please!

The hon. member's time is up.

SOME HON. MEMBERS: By leave!

MR. DUMARESQUE: Mr. Speaker, that is the kind of thing we

are seeing in the fishery and the kind of thing I'm obviously -

MR. SPEAKER: Order, please!

MR. DUMARESQUE: - very proud here to be able to enunciate

for all the benefit of hon. members.

MR. SPEAKER: Order, please!

MR. DUMARESQUE: Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

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

MR. SULLIVAN: Thank you, Mr. Speaker. The resolution by

the Member for Pleasantville I guess it is so general. As the Member for Grand

Bank said, watered down. It is not very significant anyway. I guess what he is

advocating is elimination of the capitalist state, to have the government

control all revenues and so on and disperse it among the people. Maybe he wants

to bring in another temporary measure or resource tax equivalent to the

temporary measure that was instituted I think in 1914 called income tax to fund

the war that is still temporary, I might say to the Member for Pleasantville.

If you are going to distribute the wealth, as the member

calls it, if you are going to spread out the wealth, shouldn't you spread out

the wealth - and the member is not listening, in case he wants to respond when

he gets the opportunity. If you want to spread out the wealth that we have, if

there is a problem there, the first thing you do is analyze the problem.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Here is what we have. I will just run

through the crab fishery by region, by area, the number of licences there, and

the average amount of funds per crew in each area based on size, and show the

member why we don't have a situation that is tilted extremely in one direction.

For example, let's take the 2-J area. There are thirty-three

licences in 2-J with a quota of 2,700 metric tons, an average of eighty-two tons

per boat, or $450,000 per boat in 2-J. That means there are going to be 231

people employed on those boats and the average crew member is going to make,

based on an assignment of 60 per cent to the boat and 40 per cent to the crew,

the average person is going to make $25,700.00 based on the quota and the number

of licences. In 3K there are twenty-nine full-time licences. The average amount

per boat is going to be 128 metric tons, 281,000 pounds, and each of these are

going to bring in about $700,000 per enterprise, employing 203 people at a cost

- each crew member in this area is going to make $40,000; so I am dealing with

the upper end of the scale first. Also in 3K there are 238 supplementary

licences, employing 1,428 people, and the average amount per boat in 3K

supplementary is going to be 73,000 pounds at a market value of about $183,000

per boat. Once again, the average crew member in 3K, out of 1,428 people, will

make about $12,167, dividing the number of licences by the quota and by the

going price; I am just using $2.50 per pound.

In 3L, the area off our coast here, there are thirty-nine

full-time licences, 119 ton per boat would be the average, 261,000 pounds per

boat, for an income per enterprise of $652,500. Now, if you look at the average

crew member in that operation, they would make around $37,000 in 3L.

In the 3L region, when you look at the supplementary, there

are 320 supplementary licences in 3L, of which seventy-five are for boats over

forty ton, and the remaining 245 are for boats under 40 ton. Now the

seventy-five that are over forty ton boats are going to average, based on the

quota, around fifty-six ton a boat, or 123,000 pounds, bringing in a gross value

for the enterprise of $307,000 for that enterprise. Under forty ton, the 245

category, are only going to bring in eighteen ton per boat, or 40,000 pounds,

and just slightly under $100,000 for the entire enterprise for those 245

enterprises employing 1,225 people.

Now in the 3Ps area there are eighty-four supplementary

licences, and they only average, based on the quota and based on the tonnage,

about 20 ton, 44,000 pounds, times the going price of the market; they will

bring in about $112,000 to $113,000 total enterprise for each enterprise, when a

crew member would make roughly $7,500 in 3Ps.

The Member for Pleasantville, this is a new one that is

coming in this year, there are 380 temporary seasonal permits this year, with an

average, if you take four people per crew, should be roughly eight for a small

thirty-five foot boat, we are looking at 1,520 new people getting into the crab

fishery that were not there last year, and each of these enterprises would be

allowed around 11,000 pounds, about five ton, and that would bring in for that

crew around $27,000 in total, and assuming it is split, the smaller boat, the

boat may take 50 per cent, the remaining spread through the crew. Each crew

member in that operation is only going to make about between $3,000 and $4,000

per person.

Now, when you look at all of these areas, and I went through

and did a little

summary, just to give you an indication of where we stand

overall with how it is spread out over the scale, if you look at the boats that

are making $400,00