June 18, 2002 HOUSE OF ASSEMBLY

PROCEEDINGS Vol. XLIV No. 27

The House met at 10:00 a.m.

MR. SPEAKER (Snow): Order, please!

The hon. the Government House Leader.

MR. LUSH: Mr. Speaker, I want to welcome all members to this special

debate today.

Before proceeding, there are some House matters we want to get straightened

out. I want to move the adoption of the following agreed-upon rule changes and

procedures, just make sure that we have included everything and everybody knows

the direction in which we are going. There are eight points here, Mr. Speaker,

that I want to mention.

First, the resolution respecting Voisey's Bay will be debated for not more

than three days, June 18, June 19 and June 20, 2002.

Number two, on these three days the House will sit from 10:00 a.m. to 12

noon, from 2:00 p.m. to 5:00 p.m., and from 7:00 p.m. to 10:00 p.m., with one

exception. We have had a minor glitch with the satellite, and booking the time

for the satellite on Thursday, because of a problem that the television time, as

was pointed out to us yesterday, is booked from 2:00 p.m. to 2:30 p.m. So, we

thought we would advance the time, because that is Question Period, and we would

start the House at 2:30 p.m. and go until 5:30 p.m. Everything is fine on the

other end. So, with that agreement, that is the only change. On Thursday, we

will start at 2:30 p.m. as opposed to 2:00 p.m., and go to the 5:30 to give time

for Question Period to be televised.

Number three, the three leaders will have one hour to speak, as will the hon.

the Minister of Mines and Energy and the Opposition Mines and Energy critic. The

Premier will have an additional twenty minutes when he speaks to close the

debate. All other members will have twenty minutes to speak, and we would like

for all members to follow these times. We have asked the Table to carry out a

time-honoured tradition in this House to remind members when they are down to

three or four minutes remaining in their speaking time so that will help them to

clue up in time.

Number four, there will be a thirty-minute Oral Question Period each day from

2:00 p.m. to 2:30 p.m. with the exception, of course, of the day that we

mentioned, which will be Thursday, when the Question Period will start at 2:30

p.m. The only topic for Oral Question Period will be the Voisey's Bay

Statement of Principles, and we ask your Honour to waive the Rule of

Anticipation.

Number five, there will be no amendments to the resolution.

Number six, debate on the resolution will begin immediately after the

adoption of the rules and the introduction of the resolution, and, apart from

Oral Questions, will be the only business of the House during the three-day

period.

Number seven, the notice requirement for the motion respecting the rules and

for the resolution will be waived.

Number eight, when the debate has concluded, but in any event not later than

10:00 p.m. on Thursday, June 20, the Speaker will put the question on the

resolution.

Mr. Speaker, these are the previously agreed-upon changes to the procedure

that the Opposition House Leader and the Leader of the New Democratic Party and

I have previously agreed upon. I hope that is put in the order in which we did

it.

Thank you, Mr. Speaker.

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

MR. E. BYRNE: Thank you, Mr. Speaker.

Let me confirm, I suppose, what the Government House Leader said. During the

last several days we have had, on any number of occasions, tried to put in place

a system, a body of rules, to govern the following debate that will allow each

and every member the opportunity to speak their views and certainly to allow the

course of this very important, very critical and historic debate, to proceed

along the lines where the public will have the opportunity to judge for

themselves the merit and demerits of the proposal that is being put forward.

On a final point, let me just say that I want to affirm what the Government

House Leader has said, in that this has been agreed upon. We certainly, on this

side of the House, will live up to the commitments that we have made vis--vis

the rules that we have put in place to govern this entire debate.

Thank you, Mr. Speaker.

MR. SPEAKER: The hon. the Member for Signal Hill-Quidi Vidi.

MR. HARRIS: Thank you, Mr. Speaker.

Yes, these rules have been agreed upon by all of the three parties of the

House and it has not been done without compromise, Mr. Speaker. We obviously

would have liked more time for the public to have a chance to know more about

the deal and the agreement, but that is part of the compromise and the

government wanted this to be done this week.

We have agreed with the procedures as set forth by the Government House

Leader to govern this debate and hopefully, through the debate, people will

become much more informed than they are at present about the effects of the

agreement and the consequences of the deal for this Province.

MR. SPEAKER: Is it agreed, then, that the rules of debate as put forward

by the hon. Government House Leader be now adopted?

All those in favour, aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, nay'.

Carried.

The hon. the Government House Leader.

MR. LUSH: Mr. Speaker, I thank hon. members for this agreement and, in

accordance with that agreement, Mr. Speaker, the item of business will be the

debate on Voisey's Bay.

I call upon the Premier to introduce the resolution.

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Thank you, Mr. Speaker.

To begin this debate it is my pleasure to move, seconded by the Minister of

Mines and Energy, the following resolution:

"BE IT RESOLVED THAT the House of Assembly ratifies and endorses the

Statement of Principles with respect to the development of the nickel deposit at

Voisey's Bay in Labrador tabled by the Premier."

Mr. Speaker, as we begin this particular debate, I would like to take a

minute first of all to congratulate and thank my colleague, the Minister of

Mines and Energy, and his team. The group were asked to go off just over a year

ago now. It took them some fifty-one weeks in this last negotiation, for he and

the team, with the best legal advice, technical advice and financial advice that

they could garner to support their efforts, not only from inside the Province

but nationally and internationally renowned experts, because we wanted the best

advice to build the best case for Newfoundland and Labrador. I do want to thank

the Minister of Mines and Energy.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: He will make reference to that, I think, in his own

comments because I believe he is given up to an hour to address the Legislature

in this special debate, as are the other two leaders of the parties and the

Opposition critic for Mines and Energy, and I look forward to the involvement

and engagement in the debate. I think he will outline further the nature of, and

the personnel that were used in terms of putting together the best possible team

that we could assemble to work out the best possible arrangements for the

benefit of Newfoundlanders and Labradorians. I will not go into detail with

respect to the makeup of that team, but you will hear more about it in this

debate.

To his credit, Mr. Speaker, along the way - because this was what they spent

the vast majority of their time, after fifty-one weeks, and I do not know how he

did it yet; he must be a remarkable man, I guess - he managed to take time out

to find a way to have the White Rose Project proceed, because he was intimately

involved in that particular project as well.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: No small feat, Mr. Speaker, in and of itself a $2.35

billion project that, by the way, was not debated here in this Legislature with

respect to the principles, the final agreements, or anything of that nature -

just to make that particular point, because that is not the norm at all. This

is, in its own right, an extraordinary debate that we have all agreed to do by

agreement, because there are no rules providing for this debate and no

requirement that this debate, or any future debate - and I want to make that

perfectly clear, Mr. Speaker. This is being done by agreement of all parties

because we want an opportunity to talk about this in detail. There are no

provisions and no precedents in Newfoundland and Labrador for doing this kind of

a debate with respect to major project agreements, but a government that I lead,

which is the most open and the most accountable the Province has ever seen, is

glad to engage in that kind of a debate.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: I will not dwell on the White Rose Project, Mr. Speaker,

other than to remind people that we doubled the benefits in the White Rose

Project, the third offshore project, from what we did in Terra Nova. All of them

have been seen to be great projects and are proceeding. The Conservative

Government, led by Brian Peckford at the time, that did the Hibernia agreement,

the offshore Accord and then, of course, the start of it was when the Liberals

came into office with Premier Wells; but we acknowledge that the legwork with

respect to Hibernia in starting that offshore oil sector, which is an important

part of the economy in Newfoundland and Labrador - will be for the next thirty,

forty, fifty, sixty years - the underpinnings of that were put together by the

Conservative Administration.

I saw some clips yesterday in the media that showed Premier Peckford, Mr.

Crosbie who was instrumental, the Prime Minister of the day, Mr. Mulroney; those

people did the right thing. They gave us a foothold and a start into an offshore

oil sector - which will become an offshore gas sector - which is contributing

mightily to the economy of Newfoundland and Labrador, now, today and will into

the future. They did the right thing, at the right time, for the right reasons.

I contend, Mr. Speaker, that is a position we have arrived at again today with

respect to Voisey's Bay. Actually, it is quite a privilege for us, for the

members in this House, it really is a privilege for us to be afforded an

opportunity, because it does not come along too often in a lifetime, to be

involved in a very far-reaching long-lasting decision.

What happens with respect to the development of this project in Labrador,

this mining project - we have had lots of mining projects in Newfoundland and

Labrador in the past, and hopefully we will have lots into the future. This one

has particular significance because of the size and the scope of it. We know

today, as we stand here in this Legislature, that it will be a minimum of a

thirty year project. That is what has been outlined. We know that the prospects

are for it to go far beyond that in Labrador and much further beyond that again

in Argentia with a processing plant. That is what we have before us today.

We have a project that we are about to hopefully ratify in this particular

Legislature and then get started on, that will have economic impacts for

individuals, communities, regions, the whole Province - re the provincial

economy and the direct provincial Treasury - for the next thirty years, at a

minimum. We don't get to make decisions like that every single day. We get to

make lots of decisions that have an impact for a year or two, a week or two, a

month or two, but just think of the scope and the size and the magnitude of this

one and we realize why we are having a special debate, an extraordinary debate

about this one, because it deserves it.

Now, let me set the record straight too, Mr. Speaker, from the very

beginning. You have never, and no one has ever heard me, as the leader of this

government, say that this is the panacea, that this is the cure-all, that this

is going to fix it all. Other leaders have used language like that and it has

been proven not to be true. It has been repeated to us time and time again

because there have been others that have been given to flights of rhetoric.

Actually, when I first became the leader some of the press said I was dull and

boring because I did not have those flights of rhetoric. I did not make those

speeches to try to make people believe that something was, what it was not. I am

a very direct, straightforward person, Mr. Speaker. This is not the cure-all for

Newfoundland and Labrador, but I will tell you what it is, it is a very

important step along the way. It is tremendously significant.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Mr. Speaker, this particular project, this particular

issue, this mining development has drawn a lot of attention and consideration in

the Province. From the discovery in 1993 to now, it has been nine years; nine

pretty long years when a lot of other things have happened, a lot of other

things have come and gone, but, this particular issue has dominated the

political landscape in the Province for just about that whole nine-year period.

Mr. Speaker, in order to get to the point where we are today, where we are

given an opportunity to debate the component parts of an arrangement that sees

this project finally able to proceed, to maximize the benefits for the people of

the Province, there are two essential ingredients that had to come together. I

have said this about the White Rose Project; I have said it about the Terra Nova

project before that; I have said it about the Hibernia project before that. I

have said it about all the projects because I have been in the Cabinet, in a

leadership position, Mr. Speaker, for all of those, every single one of them.

The things that have to come together, the two essential ingredients, there

has to be a good business case. There has to be a good business case for the

proponents coming forward who are going to invest the money; $2.35 billion, in

the case of White Rose in the offshore; $2.9 billion this time. But, there has

to be a good business case for the people of the Province too. There has to be a

good business case for the proponents and for the people of the Province as the

owners of the resource. Secondly, Mr. Speaker, every time, as well, when you

have these major developments, there has to be a good, sound political case. An

absolute, good, sound, political case where the people of the Province

understand that the benefits are being maximized for them first and foremost

because of the fact that it is their and our resource, first and foremost.

Mr. Speaker, we are here today because the Statement of Principles outlines a

project in which both of those have been achieved together at the same time.

There is a good, solid business case for the proponent and for the people of the

Province and there is a good, solid political case, and I will take sometime in

the next little while - if I can in the time allotted to me - to walk through

those particular issues. I believe it is important to walk through both of them,

the business case and the political case, and to explain to the members of the

Legislature, all of us, and to the people of the Province who are interested in

this, why it is that today we are debating an issue that this caucus here, and

this government that I lead, have a very, very high level of confidence in the

provisions that have been negotiated to the point that we believe it is time to

move forward, that we have the basic ingredients and we should proceed.

Now, Mr. Speaker, what I would like to do is go through the components of the

phased-in approach to the development and the project itself, to demonstrate how

the concerns and various eventualities have been addressed, because there are

concerns. We have concerns. We have always had concerns. There are issues that

need to be addressed. They have been addressed, every single one of them, in

this Statement of Principles and in this particular agreement that will then

become legal at the end of September.

Then, Mr. Speaker, as well, I would like to go through the political history

of this, the nine-year political history of the Voisey's Bay agreement and the

project, and demonstrate how our mandate has been met; how, in fact, we made

some commitments as to what we were going to try to achieve with respect to this

mining project more so than any other mining projects in the past, and to

demonstrate to the members of the Legislature and to the people of the Province

how, in fact, we have kept and met those particular commitments to a tee. I

would like to spend some time dealing with that this morning as well.

However, Mr. Speaker, before going any further with those two things - and

those are the two things that I would like to spend my time on this morning - I

think it is important to clear up any confusion or misunderstanding with respect

to the relevance of this debate and what it is we are debating. Let me make it

perfectly clear, Mr. Speaker, the negotiations with Inco as the proponent are

over. There are no negotiations that are going to continue between now and the

end of September. The negotiations are done. The deal in its respective

components and its component

part is laid out for the people of the Province and

the members of this Legislature in the Statement of Principles. The project that

is described in the Statement of Principles - and that I will walk through again

this morning - will not change. This is the way it will actually occur.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Mr. Speaker, what will happen between now and the end of

September is much more likened and akin to a translation exercise than a

translation. I have written to the Leader of the Opposition today, because he

wrote me about this particular issue and I wanted to make sure there was no

misunderstanding.

We are going to translate the Statement of Principles from its current

understand, that you do not change the concept, you do not change the ideas, you

just make sure it is understood in a different language. This translation is

no additions or deletions.

I have written to the local paper, The Telegram, because they wrote an

editorial saying it is like a short story, it looks good in draft but you do not

know what is going to be added, you do not know what is going to be deleted.

Nothing, Mr. Speaker, is going to be added. Nothing is going to be deleted. This

is the deal, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: In the spirit of openness and accountability and

co-operation, Mr. Speaker, let me tell you what else we have also committed to

today, which is extraordinary in Newfoundland and Labrador, never been done

before. When the final legal agreements, when that translation occurs - not any

further negotiations, there is no more negotiation. When the translation is

finished those translated documents will be made available to everybody in the

Province who wants to see them, in accordance with the Freedom of Information

Act.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: So, Mr. Speaker, the time for debate is now. That is why

we are here having this debate. If anyone wants to make any comments, anyone

wants to raise any concerns, anyone has any questions and wants to get them

addressed and get the facts on the table so that there is a better understanding

of the Statement of Principles, now is the time to do it because that Statement

of Principles is merely going to be translated into legal language. There will

be no further negotiations with respect to what it will contain or not contain.

It is what it is. It stands for what it stands for and it outlines for the

people of the Province everything that will occur in this particular Province

with respect to this particular development over the next thirty years, because

that is what it is defined as now, a thirty year project. It is likely to go on

long beyond that, but that is not defined because that will develop over time.

Mr. Speaker, we are glad to be here in this debate. We are glad to hear from

all members, and we are glad to answer all questions and all concerns that are

raised over the next couple of days.

Mr. Speaker, I indicated there are two things I would like to address. The

business case; let me take a few minutes to address the business case. In

mid-July of this year, provided there is a ratification in this Legislature,

provided that the Aboriginal communities, through their own processes,

respecting their own democratic processes that they have inside their own

communities for their own people, provided their ratifications are successful on

June 24, which is next Monday, I understand it; if those three ratifications

occur then by mid-July, this year, work will begin at Voisey's Bay itself, in

Northern Labrador. There will be 100 jobs or so, thereabout, the company will

confirm that as they go in and start to do some infrastructure work. The nature

of it is laid out, even described in the Statement of Principles. It says they

are going to do some road work, they are going to do some work with the docks,

they are going to do some land clearing and so on. They are going to get ready

for a construction project next year. The Statement of Principles says exactly

what is going to happen.

At the same time, Mr. Speaker, there is a commitment that by the middle of

July or so, work will also begin at Argentia. The kind of work -

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: I understand the numbers are small, probably thirty,

forty, maybe less than fifty jobs at Argentia right away, and that is in

discussion with the proponents, the developers themselves and the people of the

area who are anxious to get started as we speak.

Mr. Speaker, it also lays out, in the Statement of Principles, it tells what

it is they are going to do at Argentia. They are going to go down and acquire

the land, do some demolitions, start doing some site preparation and so on, and

there will be thirty, forty, maybe a maximum of fifty people. I do not know the

exact numbers because I am not the developer. I am not the one spending the

money. Voisey's Bay Nickel and Inco are doing that; but, there will be people

going to work in Argentia in the middle of July this year. Before March 31, in

the next seven or eight months, before the end of March next year, Inco commits

to spending $55 million in the Province, starting the work in Labrador, starting

the work in Argentia, and starting the work, of course, on the Inco Innovation

Centre here at Memorial University\, which is another terrific add-on to this

particular project.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: So, Mr. Speaker, again let me make the point: Those are

not ifs or what-ifs or maybes, those are things that will happen if the three

ratification votes occur, and the third and final of those, the last two, will

be next Monday, and ours will happen sometime on Thursday, I expect.

As well, Mr. Speaker, Voisey's Bay Nickel Company which is a subsidiary of

Inco will open offices in the same time frame. They have an office here in St.

John's, they will be opening offices in Argentia, they will be opening offices

in Happy Valley-Goose Bay, and they will be opening offices in Nain on the North

Coast of Labrador. They will be doing procurement and supply information

sessions to let business people and those who are in the business in

Newfoundland and Labrador know how they can get in on the opportunities of

actually procuring goods and services for use at these three different sites,

and how they can supply what is needed in terms of equipment and workforce and

so on at the sites. There will also be training and information and employment

sessions conducted by the company, so that individuals in Newfoundland and

Labrador will know best how they can train for the longer term jobs and who they

would have to go and see to try to get in on the jobs that are going to start

right away and be involved in the construction projects in the next three years

or so.

Mr. Speaker, starting the middle of next year there will be a three-year

construction project that will begin in Labrador. Seven hundred and ten million

dollars will be spent on a mine and mill/concentrator in Labrador. It will take

them three years to build it.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Mr. Speaker, during that period of time the estimates are

that 600 to 700 people a year will be working on a massive construction job on

the North Coast of Labrador right at Voisey's Bay. There will be some $20

million spent on continuing exploration as well, because the company wants to

continue to build and grow its proven reserves so that they can make sure they

raise all the money they need in the marketplace to meet all their commitments

in this Statement of Principles.

In Argentia, Mr. Speaker, next year, they will continue on with their site

development, with the lay down areas that they need to receive things from

Labrador and ship things to Labrador. All of that work will continue through

next year. Beginning the middle of 2004, a construction project begins again in

Argentia, $130 million demonstration plant the size of four football fields,

which many people can envisage as rather significant, any other time a rather

huge development. This time, by comparison, because of the magnitude of this

project, a $130 million project is a small one. Mr. Speaker, if you think more

recently in Newfoundland and Labrador, $130 million is about what was spent on

the Janeway, the new Janeway. For those of you who saw that, that was a pretty

massive construction project. That was not a small construction project, by any

means, in Newfoundland and Labrador. The hospital expansion in Gander, which

people from the central region would look at and realize is significant and

fairly large, is only $70 million.

This project, the demonstration plant alone, is a $130 million construction

project that will take a couple of years to build, from 2004 to the middle of

2006. There will be in excess of 100 people, and probably closer to 200, working

on that construction project for that two-year period leading up to 2006.

Then, Mr. Speaker, we get to the middle of 2006; four years' time. At that

point, for the next couple of years, there will be full operations in Labrador,

the mine, the mill, and the concentrator will be fully operational. There will

be 400 people working full time year round, day in and day out, week in and week

out, month in and month out, on into the future.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: The company, Mr. Speaker, will be basically spending then

about $150 million a year paying these people and operating the operation in

Labrador. The first shipment of concentrate, Mr. Speaker, in the middle of 2006,

goes to Argentia. Until Argentia is ready to receive the first of the

concentrate from Labrador, nothing leaves this Province, nothing whatsoever.

Mr. Speaker, then, for a twenty-four to thirty month period, until the end of

2008 at the latest, there will be 200 people working full time at the plant in

Argentia in a demonstration project and a test project that is trying to

eliminate any probability that there might not be the full-scale plant - and I

will deal with that a little bit later - built in Argentia. There will be 400

people working in Labrador and 200 people working in Argentia for the whole

period, up to the end of 2008.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: We do acknowledge, Mr. Speaker, because we have been very

up front and direct about all of this, that the remainder of the concentrate,

what is not needed for testing in the plant and employing these 200 people in

Argentia, what is not needed for that particular exercise will be shipped out to

other Inco operations to help them raise some cash to meet the rest of their

commitments that I will lay out right now, Mr. Speaker.

AN HON. MEMBER: (Inaudible).

PREMIER GRIMES: At this point - and you will get your chance to speak - I

would prefer that I just get to the lay it out. I will not interrupt you; this

is too important a debate. Everybody has their chance to say everything they

want to say, uninterrupted, in their own time, during this particular debate.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Mr. Speaker, at points along the way, and this is one of

them, the government, the negotiators and everybody else felt it was necessary

to build in certain checkpoints, to make sure that the things that are laid out

are actually going to happen, to make sure there are ways to see that they are

going to be diligent and vigilant in the commitments that are made by the

proponent, and we built in a couple of checkpoints around these issues. The

first one was the one I mentioned: that absolutely nothing - absolutely nothing

- leaves this Province unless the first lot goes to Argentia.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: That means that the company itself has to be on time, on

target, with the work that is done in Argentia. They have to have the

construction projects finished. They have to have the 200 people trained up, who

are going to work in the demonstration plant, and they have to be ready to

receive the concentrate, or they are wasting their time mining in Labrador

because there is nowhere to send anything, there is nowhere to raise any cash,

there is nothing to do anything with, unless it goes into Argentia first.

Mr. Speaker, there were issues about wanting to prove this technology, to

prove this hydromet technology, to make sure that it works, and the test period

could have been very open ended, but we have an agreement that it will be no

more than thirty months maximum. That will be the test period. There is an up

side and a down side to that, because we really want it to work, and maybe we

are shortchanging ourselves by: what if it happens in a thirty-first month, or a

thirty-second month, that might prove the success? We agreed there is a risk in

it on that side, but there is a time limit to it. They are 97 per cent or 98 per

cent sure that it is going to work, and twenty-four to thirty months should give

them a comfort period and a comfort zone in which to do the testing to the

degree that it should be adequate. Then this checkpoint: then there is a

decision made by the proponent after those thirty months, after the 200 people

have worked diligently for thirty months to try to make sure that the 2 per cent

or 3 per cent uncertainty is eliminated, then the company must make a decision

at the end of 2008 as to which plant to build.

Now, let me say that again. I did not say, Mr. Speaker, whether or not to

build a plant - because words are very important. I did say they must make a

decision as to which plant they build, and that is an absolute fact, and that is

a guarantee.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Mr. Speaker, at the end of 2008, a critical point in this

path for this phased-in project, Inco then commit to and begin a three-year

design engineering building of a $800 million permanent plant that creates 400

jobs on a permanent basis into the future, if the testing is successful, if the

thirty-month test is successful. So that construction job itself, three years,

employs about 1,000 people a year for three years to build the plant. Now the

checkpoint is this. Notice it is always subject to whether or not the

thirty-month test is successful. We acknowledge that. We understand that fully.

Everybody in Newfoundland and Labrador, as I know, understands that fully. It is

not, though, a decision that is left just in the hands of Inco, because I guess

it showed a healthy mistrust on our part that maybe they were just trying to do

the test period and then they want to build something else; they do not want to

build the real plant. So, to check that out, we put in a provision that says

Inco itself must agree to submit the results of the test on a regular basis to

government officials and, at the end of the test period, if they are suggesting

that the test was unsuccessful, that is not good enough. Third-party experts in

mining and in finance also look at all the results and they determine. It is

like going to an outside arbitrator. It is not Inco's decision. It is not the

government's decision. The third-party arbitrators, financial and mining

experts, look at the results of the testing, and only if they agree that the

test failed and that the plant will just not work do they then not have to build

the full-scale $800 million plant. That is the checkpoint that is built in for

the protection of Newfoundland and Labrador.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: There is a further checkpoint, Mr. Speaker, and a

fallback to the worst-case scenario. The worst-case scenario is this: even if

the third-party experts agree that, despite a $200 million effort, despite a

thirty-month effort, despite 200 people working at it again, day in and day out,

week in and week out, month in and month out, year in and year out, for thirty

months, with all of that effort, if they cannot find a way to make it work,

guess what the company has to do? They have to build a $670 million plant that

employs 350 people and produces finished nickel. No ifs, ands or buts about it.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Mr. Speaker, there are not qualifiers on that. There are

no economic tests. There are no tests about process respecting the 600 - and the

Leader of the Opposition is nodding his head and acknowledging that it is true,

okay? - there are no qualifiers with respect to that, none whatsoever, Mr.

Speaker.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: So, Mr. Speaker, there is an absolute guarantee that the

worst-case scenario that can happen in Argentia is a $670 million plant,

guaranteed, that employs 350 people and leaves a product, a product that leaves

the plant, that is finished nickel, guaranteed. Now, that is the worst-case

scenario that is described in this Statement of Principles and has to be put

to be argued about, but guaranteed that is the commitment that will be in legal

language in the next couple of months.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Again, Mr. Speaker, the government, in wanting to be

absolutely open and up front and totally accountable with respect to this,

because it is essential and imperative that we be so, we admit, and we have told

everybody in the Province from day one, that there is a 2 per cent to 3 per cent

risk that the $200 million, 200 job, thirty-month test project, the research and

development, might fail. There is a 2 per cent to 3 per cent risk that might not

succeed, and that we might end up with only a $670 million plant that produces

finished nickel for as long as it operates into the future, and employs 350

people.

AN HON. MEMBER: (Inaudible).

PREMIER GRIMES: You will get your chance to speak and I look forward to

hearing your comments in support of this particular project.

Mr. Speaker, in other words, let me say it another way. Let me say it this

way. I think this is very telling for members of the Legislature, very telling

for our caucus, very telling for the people of the Province. Let me phrase it

this way and see how this sounds to people, because this is real. There is a 2

per cent to 3 per cent chance that we will end up with a $670 million plant

producing finished nickel and employing 350 people for thirty years, probably

for fifty years, seventy years, eighty years, ninety years. Guess what? There is

a 97 per cent or 98 per cent chance that we are going to have an $800 million

plant employing 400 people that produces finished nickel in Newfoundland and

Labrador for thirty years and maybe forty years, fifty years, seventy years.

That is what is in this Statement of Principles. That is what Inco has committed

to, and that is what the government has signed on to.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Either way, Mr. Speaker, it is a finished nickel product

that leaves Newfoundland and Labrador. It is only a matter of which plant gets

built between 2008 and 2011.

I am sure that is why we are very interested in hearing the comments of the

Member for Placentia & St. Mary's, because he did do the right thing. He

consulted with his members. He has talked to them in detail. He was at the

meeting that we held and I chatted with him personally and congratulated him in

terms of his efforts to go out and talk, take the advice of his leader, and talk

to the people and reflect their views. We look forward to his representation in

the speeches over the next couple of days.

Mr. Speaker, then in 2008 to 2011 in the business case, let me recap it

again. We will have a full operation in Labrador with 400 people working

full-time in the mine and mill/concentrator; about $150 million a year being

spent in Newfoundland and Labrador, employing Newfoundlanders and Labradorians.

We will have a huge construction project in Argentia where somewhere between

$670 and $800 million will be spent employing Newfoundlanders and Labradorians,

about 1,000 a year in a massive construction project. We will have some shipping

out of concentrate occurring and some testing occurring, continuing in a plant

in Argentia where these people are working and continuing to do some testing.

Some more checkpoints, Mr. Speaker, because we wanted to make sure again that

the proponent was going to be vigilant, diligent, and live to its commitments.

There are annual reviews agreed to, from 2008 to 2011. Again, with a healthy

degree of suspicion in any negotiation, wanting to make sure our interests were

protected, Mr. Speaker. We said: what happens if they commit to build a plant

but then they just do not build it very fast? Maybe they will just say we are

going to build it but not really start to build it until halfway through 2010,

or something along those lines. So, we put in annual reviews that they have

agreed to, Mr. Speaker, which show that at the end of 2009 and at the end of

2010 they have to submit to scrutiny to show that they are on target, on time,

and that the plant will be ready by the end of 2011. Each time the problem for

them, the difficulty for them, the sanction for them, is that they are at risk

of losing their right to continue to export out of Newfoundland and Labrador if

they are not true to their word, if they do not live to their commitments, if

they do not stay on target, if they do not stay on schedule, if they do not stay

on time, if they do not do what they are supposed to do in Argentia. Those are

there and we are glad to have them there, just to make sure that we keep their

feet to the fire and that we have them living to their commitments.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Mr. Speaker, then 2011 to 2018, Labrador continues. There

is underground exploration, some $75 million, another eighty-five or ninety

jobs. Argentia will be operating at capacity. Then in the mid-2000s, 2016, 2017,

2018, the underground operation begins where the workforce doubles in Labrador

from 400 to 800. Inco itself spends another $750 million, because when they go

underground they have to build a bigger mill, a bigger concentrate because they

have to deal with bigger volumes of ore in Labrador. From then on, into the

mid-2030s, at a minimum, we will have 800 people working in Labrador; 350 at a

minimum at Argentia, most likely 400; and, of course, before the mine ever

closes down the concentrate return has to begin. With respect to that, Mr.

Speaker, again, critical checkpoints for us, the first one being a guarantee of

replacement.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: There is a full

section on it in the Statement of

Principles. The guarantee outlines that the replacement must begin before the

mine ceases operation. It indicates, because we checked again - people came up

with scenarios saying: maybe they will just send back a little bit each year so

that they can say they are not in violation of their commitment; maybe they will

only send back a few spoonfuls, to use a phrase; maybe they will send it back in

dribs and drabs just so that they legally abide by their commitment. But, we

said, that is not good enough. There is a commitment in the Statement of

Principles that when they are sending it back, they must operate in Argentia at

least 50 per cent capacity for the whole period of time or they will be in

violation of their commitment and the other sanctions will kick in.

Mr. Speaker, there are rights of suspension under a thing called Force

Majeure that I am sure we will hear lots about. These suspensions are limited by

time in the Statement of Principles. They only suspend the right. They never,

ever relieve Inco of any of their obligations. The business people and lawyers

in this Legislature know this area full well and they understand exactly how it

works. Even in the event of a processing related reason, where the replacement

might be difficult to do - because the spectra has been raised that all the

other countries around the world might bring in laws that we do which says: you

cannot ship it out. Even if that happens, there is no escaping the obligation by

Inco. If they cannot send it back, their obligation to do it is capped at three

years, it is suspended for three years, and then the legally enforceable

guarantees take place under that

section in any event.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Mr. Speaker, this Force Majeure issue is a standard

feature of business contracts. We have had it vetted by the best corporate

lawyers in the Province and in the country, who structure these in every large

business deal all over the country and they are put in place to protect our

interest and to make sure that Inco lives to its commitments.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Mr. Speaker, again, with respect to the guarantee, it is

a full stand-alone

section in the Statement of Principles. It is stated clearly

legalese over the next few months.

Another checkpoint, Mr. Speaker - you can have all the guarantees you like in

writing but what happens if they are not honoured? You can write a guarantee,

you can say you are going to do it, you can guarantee you are going to do it,

but what happens if circumstances arise that the guarantee is still not

honoured? That is where we have the whole issue of: should there be a security?

Should there be a trust fund? Should there be a deposit? What we chose to do,

Mr. Speaker, we chose to follow the lead of the legal profession itself in

Newfoundland and Labrador with respect to a recently debated issue about claims

on insurance funds; damage claims for people who are injured in accidents and so

on, and who want to go to the court and try to maximize the benefit that they

might get as a result of being injured.

The legal community in Newfoundland and Labrador came out and said because

there was a proposal by the insurance industry, that there should be a cap on

how much you can claim; but the number should be put in legislation, that you

should fix what the benefits are or what the penalty is, what the remedy is for

certain injuries. The legal community came out and said: No, the very best thing

that any client could have is access to the courts where you can go in and argue

for them, maximum damages, where you can argue for their (inaudible) loss to the

Province, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Mr. Speaker, we took advice on that - yes, Mr. Leader of

the Opposition, I will listen to your speech when you - I hope you are standing

up right after me to give your speech, I will gladly listen to you.

Mr. Speaker, we decided that is what is in the best interest of Newfoundland

and Labrador; not to spend the time now trying to sort out what might happen in

twenty years or thirty years or forty years, along the lines of a Churchill

debate. Could you get a number today that would be considered small, tiny,

insignificant, picayune in thirty years time because people did not have the

right clauses or the right phrases and so on. We went through all of that debate

over several months. We concluded - with the advice, again, of the top corporate

lawyers in Newfoundland and Labrador, and in Canada - that the best interests of

the Province are served by being in the courts if a breach ever occurs, when it

occurs, Mr. Speaker, not guessing now what it might be, but when it occurs.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: If the Statement of Principles are read, the second

paragraph of

section 25, statement 25, indicates that fundamentally what has

happened is that the Proponent acknowledges that if they do not honour their

guarantee, they are guilty. They are absolutely, already pleading guilty. They

are not saying we are going to argue that we do not owe you something. They

acknowledge damage to the Province. They acknowledge a breach of the contract.

They acknowledge damage to the economy of the Province. They understand, that

they would not even try to object to going through the courts for one thing

only, Mr. Speaker, and that is to have the courts decide, at that time in a

current circumstance, in current values, in current dollars, knowing what

happened, when it happened, what the size of the remedy is that is owed to

Newfoundland and Labrador.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Let me conclude on the business case, Mr. Speaker,

because I would like to spend the last ten or fifteen minutes that I have left

talking about the political case. On the business case, our interests, the

interests of the people of Newfoundland and Labrador, are protected every single

step of the way; every step of the way.

SOME HON. MEMBERS: Hear. hear!

PREMIER GRIMES: Mr. Speaker, there is a new royalty regime, a new tax

regime that eliminates the ten year tax holiday that is currently on the books.

Everybody has understood that Inco knew there would not be a ten year tax

holiday. There is none. The new tax laws, which will be debated here in the

fall, actually see the government, on behalf of the people, collecting $90

million more from Inco than the current laws that are on the books today.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Corporate income taxes, Mr. Speaker, are going to be

allocated so that the maximum tax will be collected here in Newfoundland and

Labrador rather than collected in Manitoba or Ontario where this company also

has operations. There are agreements and arrangements to do that. There are

stipulations that training occur in the Province, that employment be maximized

here, that engineering occur in the Province, that procurement occur in the

Province, that the supply of goods and services to the whole of the project

happen and be based right here in Newfoundland and Labrador to maximize the

benefits for us all.

There are huge benefits in benefit agreements and Voisey's Bay

chapter

statements for the Aboriginal communities in Labrador. Mr. Speaker, the business

case is structured so that there is no reason why this company should fail. This

company should succeed, and I am sure we will hear others on the other side

stand up and say: I guess they will succeed. You are giving away the shop, or

something of that nature, but this company should succeed because there is a

good, solid business case for them, and our interests on the business side are

protected as well every single step of the way. We are confident that we have

maximized the opportunities for Newfoundlanders and Labradorians, and maximized

the benefits.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Mr. Speaker, a few minutes on the political case. I think

it is clear. I have checked around. I believe, if I am not mistaken, that I am

the only person in this Legislature today who has been in the Cabinet in a

leadership role ever since 1993. There are others here who were elected with me

n 1989 who were in the caucus but not in the Cabinet. There were others here who

have been elected since, and so on, but I believe that to be a fact. There are

others who have been in the Cabinet here since 1994 and 1995 and 1996. I am the

only person who has been right in the Cabinet, right in the leadership role in

the Province, since the beginning of Voisey's Bay, since its discovery, so I

have seen it up close from the very beginning. Let me take us through the

chronology, Mr. Speaker, for a few minutes.

Discovery in 1993, Mr. Chislett and Mr. Verbiski, a huge exploration bonanza

in Labrador. There were huge benefits in Labrador and some in the Island back in

1993 and 1994, because when this happened exploration took off. By the way,

there is a lot of money spent on exploration. There was a lot of money spent in

Labrador. There was a lot of money spent on the Island. There was a lot of money

spent in places like Springdale, in Central Newfoundland, where they stand to

benefit greatly again because there is going to be renewed exploration and

activity on the Island as well, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: In 1995, this government, a Liberal government led by

Premier Wells at the time, changed the law to say that from now on, for deposits

like this, you could not develop the deposit unless a finished product left the

Province. We made that change right in this Legislature, in a Liberal government

led by Premier Wells at the time.

In 1996, Inco promised to do all of it. They promised the world. We had the

people in Argentia excited beyond belief - motorcades - the sun was going to

shine because of the commitments made by Inco, and government sought a mandate

in the 1996 election to make it happen as was described. Then, by the end of

1998, a very important step that many people want to ignore, very important in

the political case, though, Mr. Speaker, they started to go through and they

completed the Environmental Impact Statement in Labrador. The company was

proposing a very aggressive mining operation and a very large plant in Argentia.

The operation in Labrador was to be about 20,000 tons of ore a day. The plant in

Argentia that they proposed in 1996 was going to produce 270,000 million pounds

of nickel a year. That is what they were proposing and the whole project, the

ovoid in the underground, was all going to done in about ten or twelve years.

All of it. It was going to a very quick, very fast, in and out, very profitable

operation, but the environmental impact approval slowed it all down. They only

gave them approval for 6,000 tons a day at the mine, less than half, decreased

by 70 per cent. As a result, in Argentia they could only build a plant that was

110,000 million pounds instead of 270,000 million pounds, and that is what

happened as a result of the Environmental Impact Statement. Their permits for

mining were less than half of what they had requested and on which they built

their case for the plant in Argentia. As a result, Inco withdrew its commitment.

They said: On this basis, if we can only build a 110,000 million pound plant,

instead of one that is over two times as big, 270,000 million pounds, then we

cannot commit to a plant in Argentia.

That is what happened in 1998. Inco, because of the results of the

Environmental Impact Statement and the approval that they got, said: We cannot

commit to a plant in Argentia because we cannot make it work when it is less

than half the size of what we want to put through it. We will not be able to

raise the money and make it work.

So, they withdrew their proposal. Then, of course, came an election in 1999

where the Premier of the day, Brian Tobin, said: If that is your position, that

you are not building a plant in Argentia, well, guess what? You will not get a

single spoonful of ore out of Newfoundland and Labrador, because, no plant, no

project.

That is the context in which the speech was made. Now others might want to

make it differently, but those happen to be the facts. Those happen to be the

facts, and anybody in the Province can trace the history of it. They can trace

the chronology of it. Put it to a judge, Mr. Speaker, and let them trace it, and

they will come up with that exact chronology and version of events.

Further to that, Mr. Speaker, in early 2000, Minister Grimes - whoever that

was - as the Mines and Energy Minister, was sent off to break the impasse,

because the impasse was Inco saying: We can no longer afford to build any plant

in Argentia - nothing - because we can only build one less than half of what we

wanted to build.

The government was saying: On that basis, you will get nothing. There will be

no project. You will never get a spoonful of ore from Newfoundland and Labrador.

There was a clear impasse and right away, early in 2000 - check the records,

check the public dialogue, check the media reports, check Hansard for the House

of Assembly - the minister of the day, which happens to be this same person

right here, started talking very publicly about, let's use a new technology

called hydromet. Let's maybe ship some out and get it back, and that way we

can break the impasse and have a project.

Check the records. We are open to scrutiny.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: We want people to check the facts and not listen to spin,

not listen to fabricated stories, not listen to contrived stories. Check the

facts is all we ask, and the facts show exactly that.

This whole debate for the last three years, and three before that, has always

been about getting a processing plant in Argentia that produces finished nickel.

The mine, the mill and the concentrator could have happened any time in Labrador

if the Aboriginals had agreed and if we had not changed the law in 1995. That

could have happened any time. This has all been about a processing plant in

Argentia that produces a finished nickel product in line with the 1995 law.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Mr. Speaker, let's look at the most recent set of

negotiations when I was the minister, and when Premier Tobin stood where I am

today. The last time we talked about the new technology, we talked about: Well,

what happens about that 2 per cent or 3 per cent if it fails? The most Inco

would commit to a couple of years ago was that, if the new technology failed,

there was no commitment to build any kind of other plant. This time, what

happens? If the new technology does not succeed despite the efforts, the $200

million, the 200 jobs, the thirty months of testing, they absolutely build a

$670 million plant that produces finished nickel, employs 350 people, no ifs,

ands, or buts about it. It is guaranteed.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: It is huge step forward and there is no way anybody can

twist the words in this Statement of Principles to suggest that is anything

other than the fact. There is a guarantee of the second plant if the first one

fails, no stipulations, no what ifs, no financial considerations, no nothing.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: The last time, Mr. Speaker, as well, there was a second

sticking point, because we were talking very openly and publicly a long time

ago. This is not new. A long time ago, three years ago now, we were talking

about shipping it out and getting it back. We were looking for a guarantee that,

if we did send some out, we were definitely guaranteed to get it back. Guess

what we got the last time? People in this Assembly would know what it is. People

who do union contracts all over the Province know what it is. The best we could

achieve from Inco, as the proponent, was what is termed a best efforts clause.

We will try our best to find it and send it back. Obviously not good enough.

What do we have this time, Mr. Speaker? We have a full

section that

guarantees the replacement of it - guarantees - not, we will try. We guarantee

to send it back. Then there is a legally enforceable stipulation that says if

they do not live up to the guarantee, we go to court. Guess what we get? We

either get the concentrate sent back or we get the cash and we get lots of it,

Mr. Speaker, and it will be determined at that point in time.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Let me summarize the political case again, Mr. Speaker.

This time around there is an absolute guarantee in the Statement of Principles,

which will be translated into a legally binding document, that finished nickel

will leave Argentia in a $670 million plant as a minimum. There is a 97 per cent

and 98 per cent chance that a bigger $800 million, 400 job plant producing

finished nickel will be built instead. There is a twenty-four to thirty month,

200 job, $200 million research and development testing program that is going to

be done to eliminate the 2 per cent or 3 per cent risk to make sure that it is

the $800 million plant instead of the $670 million plant. There is a guarantee

of replacement - not best efforts, a guarantee - that is then enforceable in the

court in current day values of that time with the only question to be determined

by the court, not whether or not they broke the guarantee, not whether or not

they breached the guarantee, not whether or not they did not meet their

commitment, but how much they owe us. The only thing to be determined in the

court is how much they owe us.

We understand that, they understand that, the corporate lawyers on both sides

understand it completely and fully and agree with it, and they know that their

job in the next couple of months is to put that in legalese, proper legal

language, so that it is completely understood by every lawyer in the land and

readily interpreted by any judge who might, at some point in the future, ever

have to deal with it.

Mr. Speaker, again let me say the job now is a translation job. There is no

negotiation. There is nothing going to be added to this project. There are no

components now in that are going to be taken out. What I have outlined is what

is going to happen in Newfoundland and Labrador over the next thirty years. The

commitments are made, they are agreed to, Mr. Speaker, and they are fully

understood by everyone involved with Inco, everyone involved with the

government. All of the lawyers who are involved on both sides fully understand

the commitments that are made, what they lead to, and how they have now to be

put into legal language.

Mr. Speaker, it is also great comfort that Inco has been acknowledging this

publicly, on the airwaves, through advertisements, in full page ads, on the

television, on the radio, and these things, by the way, as the lawyers would

know, become admissible into a court if it is ever needed, that this is what the

group not only wrote on a piece of paper but they told everybody in Newfoundland

and Labrador. They bragged about it. They went out and bought time on the radio

stations, the television stations, in the newspapers, to tell the people of the

Province, not in some back room somewhere, not hid away secretly. They went out

and told everybody that this is what we are going to do, this is what we

understand we have committed to, and this is what we must live up to or we face

the penalties that will be imposed by the courts at the time.

Mr. Speaker, from now to September 30 it is agreed, that we put that in there

so the lawyers will focus on the task at hand. Anything and everything that can

be disclosed at that time, subject to our Freedom of Information rules, will be

made available to everybody in the Province; because, again, the business people

and the lawyers understand that there might be some certain commercial

sensitivities in any contract with a major corporation that would not be

available to their competitors and to the general public as normal process. That

is standard procedure in every business deal, no matter how big or how small.

I will conclude, Mr. Speaker, with this: We made a commitment to a finished

nickel product. We made it in 1995 by changing the law. We made it in 1996 in

the election. We made it in 1999 in the election. It was said in different words

at different times, but that was the commitment every time. And, guess what? We

have made and met that commitment fully in this Statement of Principles. There

is no doubt about it.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: We now have to reverse roles and change roles for a

period of time because we have to monitor what happens, we have to enforce it

every step of the way, we have to hold their feet to the fire, we have to make

sure that they live to their commitments, because if they succeed, of course, we

all succeed.

Mr. Speaker, I believe the people of the Province look forward to all of us

succeeding together. There are great benefits directly: Labrador North, most of

Labrador, Argentia, Placentia, here in St. John's, indirectly in places like

Corner Brook, for example, where the mayor, the Chamber of Commerce and the

development corporation are out saying they want to get in on some things in

that area.

Mr. Speaker, I am very proud and pleased today to conclude with this last

comment. I am very proud and pleased to conclude with this comment. I have the

good fortune right now of leading a government and leading a caucus that has

found a way, this time again - because we are now establishing quite a track

record of doing it - to meet all the competing interests, found a way to look at

the commitments that we have made, found a way to meet those commitments truly

in the spirit and intent of the law of the land and what the people want, found

a way to maximize the opportunities for the people of the Province, and found a

way, one more time, to strike the balance in a very difficult and delicate

issue, and to find a way, more importantly, to make it happen for the benefit of

the people of the Province.

Thank you very much, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

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

SOME HON. MEMBERS: Hear, hear!

MR. OTTENHEIMER: Thank you, Mr. Speaker.

First of all, I would like to thank the Premier for his comments today. I am

very pleased, Mr. Speaker, to have this opportunity as, I guess, the first

speaker of our caucus to be able to participate in this very important debate -

a debate which is of huge significance to all living Newfoundlanders and

Labradorians and I might add, Mr. Speaker, all Newfoundlanders and Labradorians

yet to be born. Mr. Speaker, obviously the significance is quite substantial and

to have, even as a Member of the House of Assembly, the opportunity to

participate in a debate of this proportion is something which is obviously quite

vital and important.

Mr. Speaker, I will have, perhaps, as the critic in Mines and Energy, more

time allocated to me and in a moment I will attempt to go through, perhaps,

maybe in some tedious detail, some of the particulars and details of the

Statement of Principles. Because time allows me that opportunity, I will, in a

matter of moments, go through this in some detail and point out, Mr. Speaker,

what we feel, as an Opposition, is of extreme importance, and raise the

questions and raise the concerns that we feel, as an Opposition, have to be

raised at this particular time.

Mr. Speaker, I would like to perhaps just touch on that point, if I may, and

that is really the role of the Opposition and, in particular, the role, in this

case, of the Official Opposition. The role is to clearly scrutinize and analyze

and assess the document that we have before us. It is to ask, Mr. Speaker,

probing questions. It is to seek answers and details on behalf of all of the

people of Newfoundland and Labrador, and it is to put forward, from time to

time, a position where this party, as the official Opposition, sees room for

improvement. Mr. Speaker, that is what we will attempt to do throughout the next

three days. I understand we have three long days, a total of twenty-four hours.

Members on this side of the House, during their allocated time, will raise

the concerns of the their constituents and will put forward suggestions, Mr.

Speaker, and ask questions that are so important, so vitally important, that

they be asked at this critical time.

In my own case, Mr. Speaker, I did have the opportunity to spend a number of

hours over the weekend going door to door in my own district of St. John's

East, going to different streets and different neighbourhoods within the

provincial District of St. John's East. Mr. Speaker, it is clear that I have a

full and solid endorsement to ask these questions, to probe the ministers, to

probe caucus members, to probe the Premier, and to make suggestions when and

where appropriate as to how we can improve, and hopefully find and seek answers

to the questions that are being asked.

I feel quite comfortable and I have a clear conscious in saying, Mr. Speaker,

that I am performing the role, as the Member for St. John's East, as the

critic for Mines and Energy, and we will ask the questions that necessarily must

be asked and we will hold government's feet to the fire to ensure that the

people of the Province have a full and complete understanding as to what the

details of this Statement of Principles are all about.

Mr. Speaker, I would like to perhaps spend the next maybe half an hour or so

going through, in some detail, particular provisions and particular sections of

the Statement of Principles, of course, which is the basis of our debate

beginning today and for the next three days, ending with a free vote on Thursday

evening, I believe. My colleagues in caucus, obviously, because they have less

time, they too will perhaps select from the Statement of Principles certain

areas where they would like to concentrate in their commentary and in their

questioning. For example, I know the royalties issue is significant, the

taxation issue, the environmental issue, and these issues will come up as

various members have the opportunity to put forward their thoughts and the

points of view of their constituents and the points of difference that they feel

have to be brought to the attention, not only to members opposite, Mr. Speaker,

but indeed in this particular forum, in the people's Chamber, we are

conducting an exercise on behalf of all of the people of our great Province.

Mr. Speaker, I would like to begin, if I may, with clause 2 or

section 2 of

the Statement of Principles. It is quite short and I will read it, "The

Statement of Principles is not intended to and does not create any legally

binding rights or obligations between the parties. The parties will use their

best efforts to finalize mutually acceptable definitive agreements....embodying

the Statement of Principles as expeditiously as possible and in any event by

September 30, 2002, subject to paragraph 47."

So it is quite clear from that particular section, which is a

section early

on in the entire document, that the Statement of Principles is not the final

document and that it is not a legally enforceable document, and that the parties

have to use merely their best efforts to finalize agreements that embody these

principles as outlined. It is therefore possible, Mr. Speaker, that the final

agreements will not necessarily mirror these principles.

AN HON. MEMBER: (Inaudible) not true.

MR. OTTENHEIMER: The variance could be significant, and I say to the

minister, this is an

interpretation of the document and this is the role that we

will perform, that, if there are shortcomings, if there are glitches or if there

are

interpretations that do not necessarily reflect what the intention of

government is, we will bring those forward.

It is quite clear, Mr. Speaker, in view of the Premier's commentary a few

minutes ago, that already when we look at clause 2, it is clear that the

Statement of Principles is not the final agreement and that the variance between

what we are now debating and what ultimately will be the final agreement could

be quite significant and substantial.

Also, I would like to point out that the Statement of Principles does not

legally bind or obligate Inco or the government to anything that is in this

document; so, from that point of view, it is wide open.

Clause 3, perhaps, only enhances the point that I am making, Mr. Speaker,

where it states in clause 3 that, "The principal conditions to be met in

order for the Proponent to proceed with the Project are: (

a) the passage into

law of any changes to the Mining and Mineral Rights Tax Act..., (

b) the

completion of an Environmental Management Agreement, (

c) the completion of

required aboriginal agreements, including Impacts and Benefits Agreements and

the Voisey's Bay chapter..., (

d) the issuance of a mining lease from the

Department of Mines and Energy...". So, again, these are just several

examples as to how it is again necessary that these particular conditions be

met, and the project will not proceed, Mr. Speaker, despite the Statement of

Principles, unless these major conditions are met. Some of them, I might add,

Mr. Speaker, are beyond the authority of either Inco or the Province. The

project is contingent on Inco arranging suitable financing, to enable the

project to be developed on a financially prudent basis. That throws everything

wide open, I would like to suggest, Mr. Speaker, since the term proceed means

both start and continue. This clause could be interpreted as subjecting the

continuation of the project at any point to financially prudent conditions. This

document, the statement, does not define who makes the determination if

financing is suitable or what financially prudent means. So, we see here a clear

example of conditions that still must be met, and wording, Mr. Speaker, that, to

say the least, is wide open.

A brief comment on clause 4, Mr. Speaker. "Commencement of the Project

will occur in 2002 with site mobilization work in Voisey's Bay, site

preparation work at Argentia, and the commencement of the development of an Inco

Innovation Centre in St. Johns." Work on the project, Mr. Speaker, could

very well proceed before the final agreement has been written and signed and

before certain of these conditions are, in fact, met. The question that has to

be asked: In that eventuality, could the Province be held liable for damages

that may be incurred because Inco moves ahead before the final agreement and

side agreements are in place? There is a potential issue of liability in that

particular eventuality.

Clause 5, Mr. Speaker - and I won't read it, it is somewhat lengthy -

states, "The Proponent intends to construct an integrated mine and

mill/concentrator processing plant at the Voisey's Bay site in Labrador that

will process ore from the Voisey's Bay deposits...", et cetera. Clearly,

the wording in

section 5 is not the wording of a guarantee. It is the wording

merely of an intention whereby the proponent - in this case, obviously, Inco -

sets out its intention as to how the project is to proceed.

Clause 6, Mr. Speaker, the Inco Innovation Centre: I have to concur with the

Premier, that this is a feature of this particular program, and this particular

project, that is very important to our Province. The Inco Innovation Centre will

obviously provide an opportunity for undergraduate, graduate, and post-graduate

students to embark on a study, and hopefully a career, in mining, dealing with

research and mineral exploration, mining and metallurgical processing. A

question that has to be asked, though, Mr. Speaker, with respect to Inco's

plan to develop this information centre, is: Will the university centre be part

of the team that researches the feasibility of hydromet technology on material

from Voisey's Bay, and will both professors and students at the university

centre have access to the findings of Inco's R and D efforts that, according

to clause 14, are to be kept in confidence between the company and the

government? We, on this side of the House, find that to be somewhat unusual, and

perhaps inappropriate, that this type of information would be kept from public

scrutiny, particularly if we have an Inco Innovation Centre that is designed and

devised to welcome and embrace the study of this particular topic, that there

would be the issue of confidentiality on any findings of any research.

Clause 7, Mr. Speaker, "The projected aggregate capital investment in

these and related facilities is estimated to be $2.9 billion over the estimated

30-year life of the Project, including sustaining capital expenditures."

Inco "...will prepare comprehensive bankable feasability studies and, based

upon these studies, the Project capital and operating costs and

schedule will be

finalized."

In response to that section, our response to that particular provision is to

say that Inco's total capital investment over thirty years is estimated to be

less than $3 billion, and, because of the immense value of the ovoid in

particular, it will recoup these investment much sooner than the thirty years,

and that all of these capital costs, operating costs, and scheduled details in

this document, are wholly contingent once again on comprehensive bankable

feasibility studies that Inco itself will prepare. Inco obviously will make the

decision and come to the conclusion as to how that is done, what is done, and

when it is done, and the decision in the final agreement will be based upon

their particular studies.

Clause 10 is a brief clause. I will read it briefly, Mr. Speaker. "The

following undertakings by the Proponent, together with those of the Government,

provide the framework for the proposed development of the Project." No one

can know, after having read this, what the final agreement will look like,

because it is clear from clause 2, as we indicated earlier, in addition to the

conditions, some of which are statutory and must be met, that we have no idea -

despite the good intentions and despite the undertakings of the proponent,

exactly what a final agreement, a final contract, between both government, on

behalf of all of the people of Newfoundland and Labrador, and the proponent,

Inco - what a final agreement will look like.

Perhaps one of the most troublesome clauses in the entire document, Mr.

Speaker, is clause 11, and it is entitled Undertakings by the Proponent, where

obviously Inco presents in this document exactly what its undertakings are and

what its commitments are. I would like to read it. It is important, and I would

like to add some commentary afterwards. "The Proponent is committed to

developing the Project in a matter which provides full and fair benefits to the

people of the Province; has a solid business footing; provides for a reasonable

return to its shareholders; recognizes metals market conditions; can be

reasonably and prudently financed and can be completed as intended. The

Proponent will use it best efforts to obtain the required financing for the

Project in a timely manner. Comprehensive bankable feasibility studies, as

referred to above in paragraph 7, will be prepared which must reflect and

successfully meet these objectives and the undertakings by the Proponent and the

Government contained in the Statement of Principles. The Proponent's objective

is to have a world-class efficient operation which will reflect appropriate

employment levels, productivity requirements and other relevant factors."

Let's just, for a brief period of time, Mr. Speaker, assess the language of

this critical clause, clause 11, Undertakings by the Proponent, just once again,

listen to some of the descriptives and some of the modifiers that are used when

attempting to explain to the people of the Province, by way of this document,

exactly what these undertakings are.

We have such open-ended, vague and uncertain terminology as the following:

full and fair benefits; solid business footing; reasonable return to

shareholders; reasonably and prudently financed; again, we see the term best

efforts; timely manner; reflect and successfully meet these objectives;

world-class efficient operation; appropriate employment levels; other relevant

factors. Who decides what conditions satisfy these descriptives and these

adjectives, Mr. Speaker? It is wide open.

The terms of the final agreement are subject to Inco's return to

shareholders, metal market conditions, and financing circumstances. Again, Inco

in this particular case, in this critical example, whereby the proponent sets

out its undertakings, Inco need only use its best efforts to secure financing in

a timely manner. This clause is of concern. It clearly does not contain the

certain language, the commitment, and an undertaking in the true sense. It is

filled with vague descriptives. It is filled with uncertainties, and in our

view, as an Opposition, does not provide the type of language that a document of

this importance and this significance ought to on behalf of all of the people of

our Province.

Clause 14, Mr. Speaker. "The Proponent will provide an annual

confidential progress report to the Government on the results of its research

and development efforts on hydrometallugical process..." I referred to this

briefly earlier. Inco's progress report on its R & D efforts will be kept

confidential between itself and the government. That, we find, also somewhat

troublesome. It is the people of the Province, I would add, that ought to be

able to judge for themselves whether hydromet process is working on Voisey's

Bay ore. It is their ore. It is their resource. There is a lot at stake with

respect to this particular project. How is it that information as critical and

vital to the project as this, is being kept from the public?

The Premier alluded during his address, about an open and accountable

government. Well, here is an opportunity for openness and accountability to

shine and not to, once again, keep important critical information. I realize and

appreciate the fact that it is important to the project, but it is equally

important, more important, to the people of the Province that they are fully

apprized of any developments that ultimately are so critical to the success of

this particular project.

I am going to move ahead, if I may, Mr. Speaker, to clause 25. As I

indicated, my colleagues will have an opportunity throughout the period of

debate to refer to other clauses not necessarily mentioned at this time. It is

the issue of the Guarantee of Concentrate Replacement. I know the Premier spent

some time at this during his particular address. Obviously, this particular

clause may be the clause that most Newfoundlanders and Labradorians are

concerned about and have most questions concerning the replacement of any

concentrate from outside the Province. A few comments.

Replacement nickel material, Mr. Speaker, does not have to be shipped back

until the mine ends. Under

Schedule A 2.(f), which is the Force Majeure clause

that I will refer to briefly in a moment, Inco can wait until three years after

the mine ends to get that replacement feed if supply and prices are a problem.

Under the nickel (inaudible) refinery scenario, Argentia could be idle from

2011, when the facility has been constructed, until three years after the mine

ends. It could be operating - as the Premier himself indicated and acknowledged

- at as little as 50 per capacity even during the replacement feed phase.

Schedule A, which again is the Force Majeure definition, defines other

open-ended conditions, Force Majeure conditions, including shortage of materials

and labour disputes which let Inco delay its obligations without penalty. Again,

as the Premier indicated - and it is in the second

section of clause 25 of the

Statement of Principles - there is no financial guarantee against default or

bankruptcy. To cover the loss of a $3 billion resource, if Inco defaults, we

have to sue to get compensation. Obviously, that is a right that any individual

or any corporate entity or any association or anybody whatsoever would have, is

the right to sue. It does not necessarily have to be spelled out.

The fact is is that if Inco acknowledges that a breach of contract on its

part will result in substantial loss to the Province, then why not include, we

would suggest, a term referring to liquidated damages, a clause referring to

liquidated damages right in the agreement that will provide an agreed figure as

to what the damages to the Province will be and have a significant proportion of

this agreed figure secured by a bond of some sort with the remainder secured by

other collateral of the proponent? This comment has to be made, that if the

proponent, in this case Inco, is as absolutely certain as to the viability of

its own future and its unswerving commitment to all of the people of

Newfoundland and Labrador, as it professes to be, then it should have no

reservations about providing the Province with some form of security which is

really what the people of Newfoundland and Labrador want, and in this particular

instance, Mr. Speaker, demand.

Briefly, just several other sections. Aboriginal Participation,

section 29,

obviously is an acknowledgment by which Inco indicates that both the LIA and the

Innu Nation have asserted Aboriginal rights and title to the project area

containing nickel, cobalt and copper deposits and that the proponent - again,

Inco - has negotiated and will enter into IBAs, known as Impacts and Benefits

Agreements, with both groups. The question we have is: Will these particular

agreements be released publicly? Again, will the people of the Province have a

full and complete understanding of the details and the particulars of what these

Impacts and Benefits Agreements are all about? Obviously, they form part and

parcel ultimately of the larger agreements where government must participate.

So, why not, at this time, once these agreements become finalized, why not have

the opportunity for the people of the Province to understand fully what is being

negotiated between the proponent and our Aboriginal groups?

Project Employment; under

section 30, Mr. Speaker. "The Proponent will

implement a Project employment strategy that is consistent with the Canadian

Charter of Rights and Freedoms, ensures that individuals resident in the

Province are given first consideration..." A few comments in response. Who

writes the project employment strategy, and when? Will the government have a

role in this negotiation? Will it be legally enforceable as part of the final

mining lease agreement? Again, how do we assess and evaluate any of these

project employment guidelines to ensure that it is consistent, Mr. Speaker, with

mobility rights provisions as found in the Canadian Charter of Rights and

Freedoms?

Mr. Speaker, we have a Force Majeure clause. It is referred to specifically

section 33 of the Statement of Principles, and there was also a specific

definition

section as found in

Schedule A which, of course, is the appendix to

this agreement. Under

Schedule A, the criteria for Force Majeure are very broad.

First of all, just briefly, just to share with members of the House and the

people of the Province exactly what we mean by Force Majeure, it is usually

found, Mr. Speaker, in the law of contract to describe situations where one

party to a contract can be legally excused from the performance of other

obligations under the contract on either a temporary or permanent basis without

fear of being found to be in breach of contract and suffer the consequent legal

ramifications that flow from such a finding. Professor Waddams, in his

well-known text, The Law of Contracts , indicated that, "Parties

frequently anticipate, in more or less general terms, the occurrence of events

that will make performance more onerous than expected, and commonly in written

contracts a clause is included designed to protect a promisor against such

occurrences." Theses clauses, clauses, usually drafted in unusual language,

are often called Force Majeure and, for example, acts of God, restraint of

princes, riots, strikes, civil war, and that type of archaic language. However,

it is important that we look at the Force Majeure clause and we look at it,

obviously, in conjunction with clause or

section 25 of the Statement of

Principles.

Under

section (

a) the criteria for Force Majeure are very broad and include

the unavailability of cost-effective nickel material for import, shortages or

problems with materials and supplies, and labour disputes, and many of these

circumstances are far from extraordinary and could, Mr. Speaker, extensively

delay aspects of the project.

A second comment in response to the Force Majeure provisions as they are

found in the Statement of Principles: The unavailability of cost-effective

replacement nickel could delay processing until three years after all mining

ends, and clause 25 makes no attempt or no provision for the recovery of damages

suffered by the Province as a consequence of this particular provision of Force

Majeure, and all other Force Majeure conditions could delay aspects of the

project indefinitely.

There is a particular point that I look forward to later on today if, in

fact, the Minister of Mines and Energy is going to speak today. I am not sure

but, if he is, I am particularly looking forward to his response to, or

explanation of, what is found in

section 35, namely Electrical Rates and

Provision of Power. It is clear from this section, when we read clause 35, Mr.

Speaker, that Inco will get the lowest industrial electrical rate in the

Province and that Hydro will have to supply sufficient power to run the hydromet

or some other commercial facility. The question has to be asked, obviously: How

much power will Inco need? Where will this new source come from? Is it possible,

because of the wording of this agreement, and in order to adhere to the

commitments that government is giving to the proponent, that any increased costs

will then have to be passed on to the consumers? They cannot pass the costs on

to Inco alone because Inco will be given the lowest industrial electrical rate,

as is already explained and illustrated in clause 35 of the Statement of

Principles. Therefore, all consumers of electricity in the Province, Mr.

Speaker, will subsidize Inco's power needs through higher electrical rates. It

is a critical issue; it is a critical question. We are generally concerned as to

what this means for the consumers of our Province and, in particular, Minister,

I look forward to your commentary with respect to clause 35.

Exemption orders - we have to read these carefully - there are several

exemption orders that are found under clauses 37, 38, 39 and 40 of the Statement

of Principles. Basically what they say in clause 37, Mr. Speaker, clause 37 is

an exemption for the export of concentrate containing 355,000 tonnes of nickel

until the year 2011.

Clause 38 is an exemption for the export of concentrate containing 85,000

tonnes of nickel, during the ramp up to commercial hydromet, if that process is

chosen. That is 440,000 tonnes total, if commercial hydromet is chosen.

Clause 39, Mr. Speaker, is an exemption allowing Voisey's concentrate to be

exported if Inco rejects commercial hydromet. Again, now, these are exemptions

being given by the Province to the proponent.

The fourth exemption under clause 40 allows copper concentrate to be exported

for the life of the project, without return.

Mr. Speaker, the final provision, before I continue in the debate on a few

other issues, the final provision that I would like to identify in the actual

Statement of Principles is clause 47, Approval by the House of Assembly of the

Province.

We are proposing, Mr. Speaker, that the government ensure that the final

development agreement - not this Statement of Principles, but the final

development agreement - contain a ratification clause similar to clause 47 of

the Statement of Principles subjecting the agreement to the ratification of all

Members of the House of Assembly and stipulating that, if the House of Assembly

fails to ratify the agreement, it will be void ab initio and that the

government will not be liable to Inco for any loss, damage, cost or claim

whatsoever resulting therefrom.

We make that proposal in good faith, Mr. Speaker. We feel it is essential and

fundamental to this agreement that once an agreement is entered into, which

presumably will be some time on or before September 30, 2002, that in view of

the very loose wording, the uncertain and vague language, the fact that this

document, according to its own wording, is not necessarily binding, and in view

of the fact that conditions still have to be met that are well beyond and

outside the control of this Legislature, we would submit that a final agreement

be brought back to this Legislature and we go through a similar exercise to

ensure that the benefits are truly there for all Newfoundlanders and

Labradorians and to ensure that their rights are protected at all costs. It is a

proposal that we put forward and that we obviously would want to see government

reconsider, despite the language being used by the Premier a little while ago.

Mr. Speaker, I would like to make a few other comments in the few moments

that I have left, other than specifically referring to the Statement of

Principles. It is a word, or it is a theme, I guess, about relationships between

government and big business. We have seen, perhaps, in the past, and we have,

unfortunately, a very sad and unfortunate number of examples whereby coziness

between big business and government does not work to the benefit of the people

who are being represented by that government that has been duly elected to

represent the best interests of these people. We see our examples of the sixties

and we see the coziness of a predecessor of our present Premier, a coziness

between a former Premier and one John Shaheen, a coziness between a former

Premier and one John C. Doyle, and what has happened in the past. We have other

examples. Governments often become too comfortable with and too cozy with the

very proponent in large business that they are dealing with in putting forward a

project, a megaproject, of this size.

Mr. Speaker, I want to give just a couple of examples to just illustrate the

concern. There is presently ongoing in the Province of Ontario, a class-action

case. It involves Inco, but interestingly, it also involves the provincial

government in the Province of Ontario. It is a class-action case that was

started in the City of Port Colborne in Ontario, approximately a year ago, where

a $750 million lawsuit by way of class action, representing some 20,000

residents of the area of Port Colborne, Ontario, where an allegation was made

that Inco and a number of other defendants, including, as one of the

co-defendants, the provincial Government of Ontario, through its own Department

of the Environment, had somehow mismanaged and failed to look after the health

needs and the environmental needs of that particular region of the province.

Mr. Speaker, that particular case in not over. In fact, I understand it was

only last week there was a certification hearing in the Supreme Court of Ontario

to see whether or not a judge of that court would grant a certificate to allow

the class action to proceed. I am not necessarily concerned about the procedural

part of that. What is of interest, and why I want to use that as an

illustration, is to show that the residents of that particular part of the

Province of Ontario found it necessary in not only naming a corporate giant, but

felt that it also had to name the provincial government for its failure to

adequately monitor, adequately protect, adequately ensure that the interests of

the people of that particular part of Ontario, that their interests were being

protected.

I think it provides for us, although in another jurisdiction, an excellent

example as to how governments must always be mindful that they are there to

protect the interests of the people of the Province and not to, by virtue of the

very deal that has been negotiated, and hopefully, from government's point of

view, wants to be put forward; not put itself in a position that it cozies up to

the very proponent that it is engaging in these high level negotiations with. It

is an example that, I think, has to be kept in mind. I strongly encourage

government to ensure that it look out to the interests of the electorate, and

that must come first. Obviously, there have been failures in the past and the

example of Port Colborne, Ontario, is one of them.

Mr. Speaker, there is perhaps another example, and it is a bit closer to

home. It is an example whereby it is again imperative that government always

ensure that the people of the Province are protected. I want to refer to the

efforts of the Metis Nation in Labrador. As we all know, Inco has entered into

significant benefit agreements with both the LIA and the Innu Nation, but there

are a third group of individuals, totaling, according to their numbers,

approximately 6,000 with some 5,500 of them living in Labrador and approximately

400 or 500 on the Island of Newfoundland. There are some 5,000 to 6,000

constituents of this Province who feel that they have been let down by their

provincial government for its failure not to advocate on their behalf, to

intervene on their behalf, to counsel on their behalf, to attempt to negotiate a

solid benefits agreement with the proponent, with Inco, for the benefit of some

5,000 to 6,000 constituents of this Province.

It is an example, Mr. Speaker, and I just want to add the fact, that

particular constituency, the Metis Nation of Labrador, have proposed to Inco,

for example, a benefits package including: employment and training benefits,

environmental monitoring, procurement and contracts, liaison, a workforce

hosting arrangements. These types of features are similar to any other impacts

or benefits agreements that I am sure the proponent has entered into with both

the LIA and the Innu Nation. They have attempted to work out an arrangement with

the proponent. So far, from what I understand, that has not been completed. But

again, it provides an example - and this is my point - whereby a government can

intervene on behalf of the electorate, on behalf of a segment of society that it

truly represents, to ensure that their interests are being put forward and that

their concerns are brought to the table with a major proponent to guarantee that

their rights are protected. Again, it is an example of coziness. It is an

example of where sometimes governments forget what this is all about and just

fail to realize at all times that they are there for a particular reason first

and foremost. As I say, this is a local example, but one that I believe

illustrates the importance of that particular notion.

Mr. Speaker, I was elected in 1996 and I guess since that date, which is now

- I was elected in February of 1996, so we are well into the seventh year, and I

am into my seventh year. I guess there was hardly a day when the issue of Voisey's

Bay was not mentioned in some way, shape or form in this Legislature; either it

was mentioned during debate, or maybe there was a question for Question Period,

maybe there was a ministerial statement or some announcement by government, but,

of course, it was front and center, certainly since I have been an elected

member of this House.

I followed the debate quite closely, Mr. Speaker, and there are a number of

quotes that stand out in my mind. Several of these are very recent, but I guess

it goes to show the mindset and where we really are. I think it is important for

the people of the Province to understand that yes, government is putting forward

its position but there is another position in terms of not necessarily what we

are saying - because the people of the Province will have that opportunity to

hear us throughout the next three days - but what perhaps Inco is saying and

Inco is thinking. I would like to refer to an April news release of this year

and a comment by Scott Hand to a special meeting of his shareholders in Toronto.

There are two brief quotes, if I may. This is according to Scott Hand.

"Our operation at Thompson began in 1961. Thompson has also yielded

massive and profitable nickel, although on a smaller scale than Sudbury. In

spite of our extensive exploration program in recent years, this resource

appears closer to depletion. To maintain production, we've been bringing in

external feeds from Australia and we hope to be shipping Voisey's Bay

concentrate to Thompson, and Ontario, as part of an eventual agreement reached

with the government of Newfoundland and Labrador."

"The VBN feed will give us additional time to explore and find solutions

for Thompson and to plan additional mine development in Ontario. We remain

hopeful that the combination of exploration, technology and external feed will

enable us to keep those operations productive and competitive for a long time to

come."

Mr. Speaker, another comment by a former Chairman and Chief Executive Officer

of Inco, Mr. Michael Sopko. He makes a very brief statement, when in the longer

description was talking about this particular project. He says,

"...projects such as Voisey's Bay are godsends because of their extremely

low production costs."

Mr. Speaker, a comment, "In March, Peter Jones, Inco's President and

Chief Operating Officer, said the government of Newfoundland and Labrador is

being "more flexible" than ever in negotiations over the development

of Voisey's Bay. He said negotiations have moved from former Premier Brian

Tobin's position where no concentrate could be shipped from Newfoundland and

Labrador for processing, to how many kilotonnes of concentrate can be shipped

out of Newfoundland and Labrador for processing under Roger Grimes."

"In fact, Mr. Jones summarized Inco's position quite nicely. He said,

"Obviously we want to ship concentrate for as long as possible."

One of my favorite, and this is the final one that I will refer to. One of my

favorite quotes, Mr. Speaker, is a gentleman by the name of Mr. Bill Comaskey,

who is the Mayor of Thompson, Manitoba. In referring to a pending deal - because

obviously this was made prior to the Statement of Principles. In referring to

that deal the Mayor of Thompson stated, "We do not see it as a threat to us

whatsoever. As a matter of fact we see it as a benefit and to the people of

Newfoundland and Labrador it obviously is a great benefit and it's a good

opportunity for Canadians and we wouldn't mind sharing in that benefit."

Mr. Speaker, it is these sorts of commentaries that we hear from time to time

which obviously we must be mindful of. They reflect from time to time a genuine

concern that is shared by my colleagues on this side of the House, and it

perhaps provides for us an opportunity to stay in focus as to where we are, what

we are talking about, what the resource truly means to all of us as

Newfoundlanders and Labradorians, and what it ultimately will mean, not only for

us here today, but as I began, Mr. Speaker, for those children yet unborn; those

Newfoundlanders and Labradorians yet unborn.

Mr. Speaker, I still have a few minutes left, according to the time. Very

often, Mr. Speaker - and the Premier made reference to it, the fact that, oh

yes, we will hear during the next three days what happened in the 1960s and we

will hear about the failure of the Upper Churchill agreement and so on. Well, I

think it is important - and again, this is why Newfoundlanders and Labradorians

are often skeptical and truly concerned about any major deal such as this. But,

we do not have to go back to the 1960s, and we do not have to go back to thirty,

forty, fifty years ago. We can go back to several years ago. I think that this

is important, Mr. Speaker, so that we, as Newfoundlanders and Labradorians, can

reflect upon, really, what can happen when things go wrong.

Now, obviously, what I am about to refer to does not have the vast

significance of what we are talking about today. However, for people of this

Province, particularly the people of the Burin Peninsula, it was of extreme

importance. It cost this Province, and the people of this Province, one heck of

a lot of money, Mr. Speaker. I am talking about, obviously, the Marystown

Shipyard. In January of 1997, Cabinet authorized the Minister of Industry, Trade

and Technology to provide a clear mandate to the Board of Directors of the

Marystown Shipyard Limited to pursue the divestiture of that Crown corporation

under general direction from government.

In June of 1997, Mr. Speaker, the Province was informed that Friede Goldman

International expressed interest in purchasing the facilities. In September of

1997, there was a Memorandum of Understanding signed between government and

Friede Goldman and its affiliates. Some of the conditions in that memorandum

included the following: To maintain a minimum of 1.2 million man hours per year

for the calendar years, 1998, 1999, 2000 and in default, be required to pay

government $10 million, $5 million and $5 million respectively, and to pay 50

per cent of any net after tax profits of the facilities to government relating

to the year ending March, 1998.

In December of 1997, Mr. Speaker, there was an asset purchase agreement

signed between government and its affiliates, and Friede Goldman and its

affiliates. In January of 1998, there was a share purchase agreement signed

between government and Friede Goldman for - and we all know the figure - $1.

Last year, Mr. Speaker, in April of the year 2001, as an Opposition, we

called upon government to bring legislation to the House immediately when it

reopens and to recover from Friede Goldman the assets of the shipyard and the

Cow Head Fabrication Facility. On April 20, 2001, Mr. Speaker, there was a news

release indicating that Friede Goldman Halter Incorporated, the parent company

of Friede Goldman Newfoundland in Marystown, has filed for

chapter eleven

bankruptcy; a day after the company failed to secure a $100 million loan to pay

a creditor.

In September of 2001, there are reports that another company was negotiating

to buy the Marystown Shipyard. Just several months ago, in March of 2002, we

issued a press release wondering simply why, Mr. Speaker, on behalf of the

people of the Province, that between $10 million and $20 million in penalties

that the people of the Province were entitled to was not attempted to be

recovered from that very company that had just sold the facility.

Mr. Speaker, this is a recent example of where, unfortunately, things had

gone wrong. This is a very recent example of where it is only clear and obvious

that, as Newfoundlanders and Labradorians, we have to be skeptical and we have

to be truly concerned. We do not have to go back to the 1960s. We do not have to

go back to those dark and difficult days when agreements were made that only we

talk about forty and fifty years later, and that our children, our grandchildren

and their children will remember for a long, long time in terms of what that

period of time meant in our history in this Province. But, we have a recent

example of when things are not done right, when agreements are not put into

effect that are there ultimately to protect the concerns and the interests of

every single person in the Province. When it is not done right, we ultimately

suffer the consequences.

That is what this exercise is about and that is why we, as an Opposition,

make absolutely no apologies for asking these questions, for making these

comments, for reflecting the opinion of the constituents that we represent. We

are carrying out a role that we take very seriously, and we do this on behalf of

all of the people of this Province.

Mr. Speaker, I want to add as well the fact - and this was interesting

because, again, it perhaps goes to show that this is where the proponent is

coming from and this is the mindset of Inco. Last week, almost simultaneous with

the news conference of last week, in fact it was almost to the very hour,

precisely one week ago, on June 11, there was a press release issued by Inco and

there was also a Web cast. Just a couple of days ago, I was reviewed the Web

cast and I found some wording at the very end of the Web cast that I did not

pick up as I was reading the actual news release. I think it is important to

share this with the people of the Province, to show, perhaps, how open-ended

much of the language is, how conditional many of these provisions are, and

exactly where Inco feels it stands as shown by clause 11 of the Statement of

Principles, when it tries to describe its undertakings in language, to use an

expression of my leader, that you could drive a truck through, but it is

repeated, Mr. Speaker, when we look at the very concluding comments of the Web

cast. I will just like to again refer to it. This is Inco's wording: This

release contains forward-looking statements regarding the Voisey's Bay

nickel/copper/cobalt project and Inco.

The next line is interesting: Actual results may differ materially from these

statements, estimates and projections depending on - here are the qualifiers,

and there are many of them, Mr. Speaker - such key factors as the timing of the

receipt and terms of all necessary regulatory governmental and other approvals

and arrangements for the Voisey's Bay project, demonstration plant results,

the availability of financing on reasonable terms, cost of production, products

to be produced, and production productivity and employment levels for the Voisey's

Bay project, engineering and construction timetables and capital and operating

costs for various parts or facilities of the Voisey's Bay project, the

settlement of land claims with Aboriginal groups concerning the Voisey's Bay

project, risks involved in mining, processing, exploration and research, and

development activities relating to the Voisey's Bay project, the accuracy of

reserve estimates and expenses related to the Voisey's Bay project, accounting

adjustments, and the provincial tax regime for the Voisey's Bay project.

This is Inco's language, Mr. Speaker. This is found in the Web cast. Here

are the conditions. Here are the uncertainties. This is why, as the Official

Opposition -

MR. SPEAKER: Order, please!

I wonder if the hon. member could just take his seat for one minute.

It is now 12:00 and I believe under the agreement we would be breaking at

12:00, but I understand the hon. member does have some time left. Is it agreed

that we would hear the hon. member and then break for lunch?

MR. LUSH: (Inaudible) we would carry on with the hon. member's speech

to its conclusion and we would then close.

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

MR. OTTENHEIMER: Thank you, Mr. Speaker, and I thank the hon. the

Government House Leader. I will conclude momentarily.

Just to refer to what I had just read, obviously, Mr. Speaker, what is read

here in terms of these qualifiers, and what is read here and what we read from

this document, these conditions, this is why, as Newfoundlanders and

Labradorians, we are concerned. This is why we are going to continue asking the

questions, and this is why, unlike what the Premier may think in terms of who is

going to vote how this coming Thursday, this is why, Mr. Speaker, we will put

forward, ask the tough questions, hold government's feet to the fire to ensure

that the interests of every single Newfoundlander and Labradorian are protected.

I will stand up here as an Opposition member and a member of the party that I

represent, Mr. Speaker, and do that most proudly.

Thank you very much, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: This House now stands recessed until 2:00 p.m.

The House resumed at 2:00 p.m.

MR. SPEAKER (Snow): Order, please!

Oral Questions

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

SOME HON. MEMBERS: Hear, hear!

MR. WILLIAMS: Thank you, Mr. Speaker.

Mr. Speaker, I just want to thank all hon. members of the House and the

Chair, himself, for the privilege today of being in a position to ask these most

crucial and critical and important questions to the future of our Province.

Mr. Speaker, my questions will be for the Minister of Mines and Energy.

Mr. Speaker, Scott Hand of Inco issued a news release stating that - perhaps,

Mr. Speaker I will redirect my question, if that would be satisfactory. My

question will actually, in fact, be for the Premier.

Mr. Speaker, Scott Hand of Inco issued a news release stating that Inco and

the government had agreed on a Statement of Principles. That release was issued

on June 11, 2002. He indicated the uncertainty about such statements and

estimates being accurate when he said, and I quote, "This release contains

forward-looking statements regarding the Voisey's Bay nickel-copper-cobalt

project and Inco. Actual results may differ materially from these statements,

estimates and projections depending on such key factors as the timing of the

receipt and terms of all necessary....approvals". I am shortcutting this a

little bit. There is no attempt to omit, but in the essence of time, Mr.

Speaker. As well, "...governmental and other approvals....the availability

of financing on reasonable terms; costs of production, products to be produced,

and production, productivity and employment levels for the Voisey's Bay

project; engineering and construction timetables and capital and operating costs

for various parts or facilities of the Voisey's Bay project...."

Mr. Speaker, I would ask the Premier: Does he agree with Mr. Hand, that the

statements, estimates and projections contained in the Statement of Principles

may differ materially from what actually happens?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Thank you, Mr. Speaker.

All I can indicate is that, as I understand it, Mr. Hand - I believe his

title is Chairman and CEO of a major national and international corporation - is

always advised and is prudent as a CEO to do exactly that whenever they talk to

the investment community and to their own shareholders and stakeholders about a

project that is going to develop over the next thirty years, they never pretend,

Mr. Speaker. It is not prudent to pretend that they know precisely exactly how

much money they will make from any part of the project at any one point in time.

They give estimates and then they give a disclaimer so that people could never,

ever hold them to say: You said you were going to make $1 million, and then, if

it turns out to be $2 million or $500,000, that the disclaimer is standard

business practice to make sure that people do not try to hold them to those

commitments but are given as a range so that people understand what the benefits

are expected to be. This is standard business practice, nothing more or less

than that, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

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

SOME HON. MEMBERS: Hear, hear!

MR. WILLIAMS: Thank you, Mr. Speaker.

I will ask the Premier again. Mr. Hand made the statement that there would be

a material difference, there could possibly be a material difference in the

Statement of Principles and the estimates and projections. I am asking the

Premier to confirm whether he also agrees, whether he thinks that there could,

in fact, be a material difference with respect to the statements that are in the

Statement of Principles and the projections and estimates contained therein?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Mr. Speaker, let me give the same answer again. It is

standard practice for the CEO and head of any major corporation to give the

appropriate information to the investment community that they are hoping to

arrange financing from and to their own stakeholders and shareholders with

respect to what the prospects are for profit margins and those things. It is

clear that there is nothing extraordinary about it, there is nothing out of the

ordinary about it. It is routine, normal practice, especially when you have

something of this magnitude that is going to go on for a thirty-year minimum and

likely long beyond that. It is a standard, prudent practice for a CEO to make

such statements.

SOME HON. MEMBERS: Hear, hear!

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

SOME HON. MEMBERS: Hear, hear!

MR. WILLIAMS: Thank you, Mr. Speaker.

I heard the Premier, I think today or yesterday, indicate publicly that he

was prepared to come in and he was looking forward to answering questions.

Unfortunately, we are right back where we started back in the last session of

the House.

Mr. Speaker, this government is, in fact, spending hundreds of thousands, if

not millions, of dollars to try and convince the people that it has kept all of

its commitments to the people of Newfoundland and Labrador. The people I have

spoken to particularly take great exception to that. By using the exact wording

in the Statement of Principles, not my own words, we will make it abundantly

clear that government has not, in fact, met its commitments.

My question concerns the fact that today we are debating a meaningless

document which, according to clause 2 of the document, is not intended to be and

does not create any legally binding obligations. In fact, it states that the

parties will use their best efforts, and their best efforts alone, to finalize

binding agreements by September 30, 2002, if, and only if, both Inco and the

Government of Newfoundland and Labrador can mutually agree; that is, both agree.

Mr. Speaker, I would like to ask the Premier: How can he tell the people of

Newfoundland and Labrador - and I quote him this morning from his address at 10

o'clock this morning - that nothing will change, nothing will be added or

deleted from this Statement of Principles, when the Statement of Principles

itself talks about definitive and detailed binding agreements -

MR. SPEAKER: Order, please!

I remind the hon. member that he is on a supplementary.

MR. WILLIAMS: - at a later date in the future?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Thank you, Mr. Speaker.

Maybe the people of the Province would be just as interested in finding out

what it is that caused the Leader of the Opposition to change his position

completely since May 15. Because in this Legislature on May 15, and I have a

copy of the verbatim transcript of the words of the Leader of the Opposition, he

makes two comments that are relevant, Mr. Speaker. The first one, and this is

the Leader of the Opposition, "What is the point in bringing this deal

before this House of Assembly after the deal is signed, after the deal is

delivered, after the deal is final and binding and committed, to the people of

the Newfoundland and Labrador?"

Continuing on, the same Leader of the Opposition just a month ago said this -

MR. FITZGERALD: (Inaudible) looking for.

MR. SPEAKER: Order, please!

PREMIER GRIMES: Thank you for that. I am glad you reminded me. That is

what you are looking for today. The Member for Bonavista South said they are

looking for these final binding agreements.

The Leader of the Opposition, on May 15, said, and here are his words,

"We are not asking this government to bring the deal itself before this

Legislature. We want the framework of the deal, not when the deal is done."

Maybe he can describe what has changed about the position of the Leader of

the Opposition and the Official Opposition in the thirty-one or thirty-two days

since we committed to this debate back in May month, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

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

SOME HON. MEMBERS: Hear, hear!

MR. WILLIAMS: Thank you, Mr. Speaker.

I would like to remind the Premier that we have three days to deal with this,

and three Question Periods of thirty minutes each. There is no time for this

nonsense or foolishness. (Inaudible).

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. member is on a supplementary.

MR. WILLIAMS: Mr. Speaker, I know in my heart and soul that the Premier

of this Province would certainly not intentionally mislead the people of this

Province. However -

MR. SPEAKER: Order, please!

The hon. member is on a supplementary and I ask him to get to his question.

MR. WILLIAMS: To correct that matter that was raised by the Premier, I

will read exactly what I said in Hansard on May 15, Mr. Speaker. My exact words

were: "Let me make it very clear -

MR. SPEAKER: Order, please!

The hon. member is on a supplementary and I ask him now to get to his

question .

MR. WILLIAMS: - that the framework of the deal includes all the terms of

the deal. That is what we want to see in the House of Assembly." That is

why we are going through this process, Premier; not a framework, all the terms.

Mr. Speaker, this project is estimated, by some, to be in the vicinity of $40

billion to $50 billion. I would ask the Premier: Is he telling the people of

Newfoundland and Labrador that we must vote on an eighteen page Statement of

Principles that represents the full deal as he stated publicly on the airwaves

of this Province, and again this morning, that nothing will be added or deleted

because that, Mr. Speaker, is clearly incorrect?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Thank you, Mr. Speaker.

I am glad to deal with the question, as we will with all the questions that

are asked over the next three days and all the comments that are made in the

representations made by Members of the House of Assembly in their allotted time.

Mr. Speaker, I believe it is important, as part of this debate in

Newfoundland and Labrador, for the people to know that the Official Opposition,

and the Leader of the Opposition, completely changed their minds in thirty-one

days. I believe that is a relevant part to the debate, Mr. Speaker. When you do

look at the statement - because it was later in the same Question Period where

he changed his mind - when I offered to debate the framework right away, they

declined as an Opposition and said: We do not want the framework. Actually, let

me make it very clear as he said, "...that the framework of the deal

includes all the terms of the deal."

Mr. Speaker, that is exactly what is before the Legislature today. This

Statement of Principles has all of the component parts of this particular deal

contained in it; every single one, Mr. Speaker, as I said in my speech this

morning; and I