December

4, 1992

HOUSE OF ASSEMBLY PROCEEDINGS

Vol. XLI No. 78

The House met at 9:00 a.m.

MR. SPEAKER (Lush): Order, please!

Statements by Ministers

MR. SPEAKER: The hon. the Minister of Environment and

Lands.

MS. COWAN: Thank you, Mr. Speaker.

December 6 has been recognized as the National Day of

Remembrance and Action on Violence Against Women in commemoration of the

fourteen women who were killed at cole Polytechnique in Montreal on December 6,

1989. While the Montreal Massacre is an extreme example of violence against

women that exists in our society, it serves as a stark reminder of the women and

children who are beaten, sexually assaulted, or who live with the threat of such

violence every day.

Earlier this week I asked my male colleagues in this House to

wear a white ribbon as a symbol of their opposition to male violence against

women. I am wearing a purple ribbon to show my support for the White Ribbon

Campaign which was started on December 6 last year, by a group of men who wanted

to make it clear that male violence against women is unacceptable. This is an

issue that is not just of concern to women. We must all be part of the solution.

Last year in this House my colleague, the hon. Winston Baker,

who was at that time acting Minister responsible for the Status of Women,

announced that an executive level committee with representation from Social

Services, Justice, Health, Education and the Women's Policy Office had been

established to develop a provincial strategy on violence. Three sub-committees

on violence against women, children and elderly and dependent adults were also

established to work with the executive level committee to develop a long-term

plan on the delivery of services to victims of violence and for prevention. Work

continues on this co-ordinated approach.

I am pleased to announce today that our request to the

Federal Government for funds to assist in this process has recently been

approved. Funding received from the Federal Government will allow us to consult

with communities across the Province on proposed strategies and to assist them

with planning for community actions at the local level. After this consultation

process is complete, government will finalize our long-term plan. It is

important to remember that while government can and should play an active role

in eliminating violence against women and children, we cannot reach this goal

alone. This can only be done through partnerships with community groups and

caring individuals who join us in taking action.

Violence against women cannot be divorced from the societal

context in which it exists. As long as women are beaten in their own homes,

afraid to walk in the streets at night, trivialized and objectified in the

media, we are not safe. As caring men and women, we must strive together to

remain vigilant of all those minor instances and seemingly trivial occurrences

which give the message that women somehow pursuing their own career aspirations

are not quite serious, that assaulting a woman in her home is somehow not quite

a crime, and that making a sexist joke in the workplace can do no harm. As long

as we live in a society which permits these symptoms to prevail, we have

provided fodder for those disturbed people, like Marc Lepine, who use these

messages to justify their own distorted actions.

We are not responsible for the act of Marc Lepine, but we are

responsible for our everyday acts which hinder true equality. Nw is the time for

all people who care, to strive toward a better world, a truly equal world, a

world where men and women can stand side by side without fear and in the true

spirit of co-operation.

SOME HON. MEMBERS: Hear, hear!

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

MR. SIMMS: Mr. Speaker, I have just a few brief remarks.

We concur with the comments of the minister, and I think what

is extremely important for us as legislators is that the vast majority of us are

men, and it is pretty clear that we are the people, perhaps, who should be

trying to get this message out amongst the public.

I think it is only appropriate that such a day of

recognition, or a week of recognition, be held, and it is appropriate that it be

held at this particular time, in view of what did occur in Montreal.

So we support the comments of the minister. We are pleased

that the Federal Government provided some funding to allow this further review

and investigation to be done around the Province, and we look forward to the

results of that when it might be presented to the House.

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

MR. HARRIS: Thank you, Mr. Speaker.

I rise in support of the recognition and remembrance of

December 6 as a day to mark the remembrance of what happened in Montreal and the

extreme violence against women by Marc Lepine.

I wear a white ribbon today, also in memory of the fact that

in 1982, when Margaret Mitchell, Member of Parliament, rose in the House of

Commons and spoke for the first time in the Federal House about wife abuse, she

was laughed at - and laughed at by men.

No longer do men laugh at the subject of wife abuse in

Legislatures and, in fact, men are now - and I am pleased to see this White

Ribbon Campaign because it marks the fact that men are now taking some

responsibility to do what they can to solve the problem by encouraging other men

to be aware of the attitudes that lead to violence against women.

I welcome the consultation process that is going to be

started, but I understand that the consultation process about violence against

women has already resulted in a demand and a requirement, Mr. Speaker, for more

Transition House support in this Province and for more programs, including - I

would suggest to the Minister of Education that in these times of financial

restraints there are things that we can do in terms of programs that do not cost

money. In the most recent report of the Newfoundland Status of Women Council

there are some recommendations about programs in the education field which can,

at a very early stage, help students to talk about this issue of violence

between the genders, and I think, Mr. Speaker, that is something I would like to

see instituted very quickly and speedily. Those are my comments, Mr. Speaker, on

this day. It is a sad day to remember what has happened in Montreal but it is

also a day on which we can increase our resolve to try to do something about the

problem. Thank you.

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

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: Thank you, Mr. Speaker, I am presenting today

Government's plan to address the deterioration in the Province's financial

position as described in the House of Assembly on November 12. In the eight

months since the 1992 Budget, both the provincial and national economic

performance have been worse than expected. As a result, revenues are lower and

expenditures to date are slightly higher than forecast. If corrective action is

not taken, the current account deficit will increase from $29 million, as

projected in the 1992 Budget, to almost $154 million. This economic slowdown

also is causing a significant deterioration in our projections for 1993-94.

Our ability to absorb this financial deterioration is

constrained by our high debt levels and low credit rating. The capacity of the

provincial and national economies to generate revenue growth now is markedly

different than it was during the 1980s. The Province's financial integrity

cannot be jeopardized by ignoring these realities.

Government must address this situation or in the long run

essential services will be threatened. This will require the support of the

general public and the co-operation and understanding of public sector

employees. By being prudent and responsible in our use of public services, every

person in this Province can play an important role in reducing the cost of

Government.

Economy: Mr. Speaker, government had projected that the

provincial economy would contract by 0.5 per cent in real terms in 1992. All

governments in Canada, however, over-estimated economic performance this year.

The continuing slow growth of the national and international economies, as well

as the major reduction in the fishery and weak consumer and investor confidence,

have caused us to revise our real Gross Domestic Product projection to a decline

of 2.8 per cent.

Although Government will not be presenting detailed economic

projections for next year until the 1993 Budget, our prospects for modest growth

are good. Recovery in the North American economy appears to be underway,

improving the demand for our export products. Although there was an initial

slowdown in the Hibernia project, activity has increased significantly in the

summer and fall. The expected economic gains next year, however, will only

partially recoup the losses of the last three years, and nominal rates of growth

will be low. This growth will not alleviate the pressure on Government's

finances.

Fiscal Position: Mr. Speaker, as I indicated in my November

12 Statement to the House, the deterioration of $124.8 million in the current

account deficit from Budget is primarily attributable to a projected shortfall

in current account revenues. The increase in our projected total budgetary

requirement would be less, however, because of savings of $23.9 million in our

net capital expenditures.

The projected revenue shortfall is primarily a result of the

deterioration in transfer payments and Newfoundland income tax, revenue sources,

Mr. Speaker, estimated and administered by the federal government. Equalization

payments will fall short of Budget by $49 million, principally because of a

general deterioration in tax revenues in all provinces and as a result of new

lower population estimates based upon the 1991 census. We also will receive

$47.6 million less in personal income tax, because of a significantly reduced

estimate by the federal government of income tax collections across Canada, upon

which the estimates of provincial income taxes are based. Established Program

Financing payments will be above Budget by $16.2 million, while retail sales tax

will be below Budget by $17.9 million.

While our revenue base has been significantly eroded by

federal fiscal restraint measures implemented in recent years, our shortfalls

from Budget this year are not the result of further efforts by the Government of

Canada to restrain payments to provinces. These shortfalls from Budget

projections are being experienced by all governments in Canada, and are due to

the national and international economic slowdown being longer and deeper than

anticipated by virtually all private and public sector forecasters.

The increase in current account expenditures from Budget is

due in large part to the difficult economic conditions, and the resultant

pressures on our employment programs and social assistance payments. As well,

there has been a small increase in expenditures in the health care sector.

Mr. Speaker, examining the variances from this year's Budget,

however, will not give a complete picture of the challenges that this and other

governments now must face in financing of public services. During the latter

half of the 1980s, strong economic growth throughout the country, fuelled in

part by a build-up of government, business and personal debt, led to steady real

increases in taxation revenues, and as a result, equalization payments, as well.

When combined with the impact of steady inflation on nominal incomes and

spending, governments experienced several successive years of very strong

revenue growth.

This revenue boom, Mr. Speaker, did not last. Nominal rates

of growth in GDP have dropped from an annual average of 8 percent nationally

during the 1984 to 1988 period to just 3.2 per cent during the 1989 to 1992

period. Tax revenue growth in all provinces combined has declined from 9 to 4

per cent for the same periods. Equalization payments received by this Province,

which grew at an annual average rate of 10.5 per cent over the 1985-86 to the

1989-90 period, have declined since then and are now $62.8 million less than

they were three years ago. During the late 1980s, on average, federal transfers

accounted for nearly 50 per cent of our current account revenues. In this fiscal

year, federal transfers will contribute only 43 per cent.

The level of programs and services which government currently

supports were built up during those years of high revenue growth, and are not

consistent with our current financial means. In recent Budgets, this

Administration has enacted many measures to control the escalating costs of

public services. It is clear that expenditure levels are not as responsive to

changing economic conditions as are revenues. They are based on program and

service levels that were established in the economic growth period of the past

decade. They are strongly influenced by wages and benefits which also were

established in this period of growing revenues. Unfortunately, today's economy

simply cannot support all of the expectations that are placed upon the public

purse. To continue to provide for the current structure which sharply increase

our deficit on current account, necessitating unacceptable levels of borrowing.

We cannot endlessly borrow to finance current account.

Our ability to borrow the funds required to finance deficits

is constrained by our already high levels of debt and, of course, the need to

preserve our credit rating.

The Province's total public sector debt, including Hydro and

NMFC, as of the end of the last fiscal year amounted to $10,244 for every man,

woman and child in the Province. This equates to nearly $41,000 for a family of

four. Interest payments on that debt amount to $4,084 every year for that same

family. When the federal government's debt is added, the public sector debt

level for that same family of four exceeds $100,000 and the annual interest

payments that must be made on that are almost $10,000.

Mr. Speaker, while the magnitude of the national and

provincial debt is staggering it is very important at this point to clarify

what, in fact, it means to the citizens of this Province and to future

generations. This Province relies on the financial markets to fund our capital

requirements and any shortfalls which occur on current account. The investors or

lenders in these markets are keenly aware of how we manage our financial

affairs. In making a decision to invest in the Province, they rely heavily on

the credit rating agencies for their assessment of the Province's credit

worthiness.

The recession in North America has meant that the credit

rating agencies are focusing on the financial strategies and demonstrated track

record of borrowers. This Province is not alone in having to face the reality

that there is a limit to the level of debt that an economy can sustain. Already

this year, four provinces have been downgraded by one or more credit rating

agencies, as have the foreign debt obligations, of course, of the federal

government.

The credit rating agencies, collectively, have rated

Newfoundland at the lowest level of all the provinces. In fact, only one agency

has rated us in the crucial A category. The other three rate the Province in the

triple B category.

I cannot emphasize enough the importance of maintaining our

credit ratings. I must reject emphatically the suggestions from many people,

some of whom are in this hon. House today, that we should address the

deterioration in our budgetary position by borrowing more, by placing an

additional burden on the citizens of the Province. To these people I say no!

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: If we simply attempted to borrow more and took

no further action to reduce the deficit, we surely would place our credit

ratings in jeopardy. Many institutional investors, in fact, some financial

markets, are precluded from investing in securities which are rated below the A

category. If our credit ratings were reduced, our ability to borrow for capital

purposes, our hospitals, our schools, our highways, would be significantly

curtailed. We would be faced with a restricted investor base, and a higher cost

of borrowing.

This Government is not prepared to borrow more than we can

prudently manage. We will do whatever is necessary to maintain the financial

integrity of our Province in the international markets.

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: This, Mr. Speaker, is essential in order to

protect our ability to provide health, education and other public services in

the future. We will not deliberately jeopardize our credit rating.

Fiscal Strategy: Mr. Speaker, achieving the current account

deficit target established in the 1992 Budget clearly will not be possible given

the short time remaining in this fiscal year. It is our intention, however, to

introduce measures today which will mitigate the deterioration in the current

fiscal year, and at the same time improve the projected situation for the

1993-94 fiscal year.

Mr. Speaker, I believe it would be worthwhile to review the

process by which Government has dealt with the current dilemma. Our approach

from the beginning was focused on three fronts: first, to prudently reduce

expenditures wherever possible in the public sector; second, to raise additional

revenue through a series of taxation and other measures that would not unduly

impinge on economic activity; and third, to allow a prudent increase in the

current account deficit which would be financed through increased borrowing.

If, Mr. Speaker, in the final analysis, the combination of

expenditure cuts and increased revenues were not sufficient to reduce the

deficit to a manageable level, then we would have no choice but to consider

means to reduce the total cost of public sector compensation.

Our approach to the problem was clearly communicated to all

of the public sector unions. Our initial meeting with the unions was held within

days of becoming aware of the fiscal position and the fiscal problem. At this

meeting, we asked for further input. The Newfoundland and Labrador Nurses' Union

and the Newfoundland Teachers' Association immediately indicated a willingness

to hold further discussions, and asked for further meetings. Eventually, all

public service unions, with the exceptions of the Newfoundland Association of

Public Employees, and the Canadian Union of Public Employees, indicated a

willingness to discuss our problems, and discussions were held.

I thank these union executives for showing the leadership

that is so necessary in these difficult times.

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: I thank them for their help. Never once, in

the period leading up to this Statement, did I receive a request for a meeting

from the NAPE or CUPE leadership. I hope this attitude changes, because there

was much to be gained and opportunities were missed. In fact, as a result of

some of the early discussions with the Nurses' Union we are now reviewing means

by which chronic injury cases may be more appropriately dealt with.

There has been a series of meetings with the unions during

which I have been quite candid about the magnitude of our fiscal problem and

have solicited their co-operation in seeking solutions. At the outset we did not

see much likelihood of being able to adequately address the situation without

reductions in compensation being achieved in some manner, and we advised the

public sector unions of this likely outcome. In so doing we recognized that

considerable speculation and uncertainly would result. This was, and is,

unfortunate, but to have failed to consult, in our judgement, would have been

the worst possible course of action.

Mr. Speaker, over the past couple weeks, through the

extraordinary efforts of public sector managers and workers, who live day to day

with the continued effects of long-term restraint measures, we have succeeded in

generating expenditure cuts and cashflow savings well in excess of what we

originally considered possible. This is particularly true given the timeframe

available within which to achieve such reductions. This effort, combined with a

series of revenue measures and a modest increase in borrowings, has resulted in

an acceptable package that will avoid the need for specific measures aimed at

reducing public sector compensation. In short, Mr. Speaker, there will be no

rollbacks this year.

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: Mr. Speaker, the effect of the measures we are

implementing will be to reduce the projected current account deficit for the

1992-93 fiscal year of $153.8 million by $75.2 million to a more acceptable

level of $78.6 million. When the impact of the reductions in capital

expenditures are considered, the total budgetary requirement is only $25.7

million above Budget. We believe this to be a manageable result.

These measures also will reduce significantly the projected

deficit for the 1993-94 fiscal year. In addition, during the year several high

interest bond issues were called for early redemption and the interest savings

thereon will impact positively on 1993-94 fiscal year and thereafter.

Mr. Speaker, while Government has taken a conscious decision

against unilateral measures to reduce public service compensation as part of our

corrective action for 1992-93, it must be stated that our budgetary targets for

1993-94 cannot be achieved without reductions in the total compensation package

of Government. I have communicated that message to the representatives of public

sector employees at every opportunity over the past few weeks. I also have

indicated that Government would like to embark on a consultative process with

the public sector unions to try to identify mutually acceptable means by which

this can be accomplished. I have asked public sector unions to respond to this

overture and in most cases the response thus far has been positive. Government

realizes that this process will be difficult for our employees, particularly

given that we already have had two years of wage freezes. As a sign of our good

faith in this regard, and as a result of the positive response of most public

sector union leaders, I will be introducing legislation in the next few days

that will remove the restrictions on public service collective bargaining in the

third year covered by Bill 17.

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: I hope, Mr. Speaker, this move will facilitate

a return to collective bargaining with the public sector unions in the next few

weeks.

Mr. Speaker, as part of the process of addressing the 1992-93

deficit, government has also considered it necessary to take certain decisions

with respect to our Budget strategy for 1993-94. It is important that the

actions that we are taking now, be seen as a part of our commitment to achieve a

balanced Budget on current account at the earliest possible opportunity. To that

end, government fully intends to achieve a current account deficit significantly

below that projected for 1992-93 and we intend to keep our total budgetary

requirements in the $200 to $230 million range for 1993-94. In addition to the

efforts to reduce the total compensation package referred to earlier, during the

upcoming budgetary process we will be conducting a thorough review of all

programs with a view to assessing their affordablity.

Fiscal Measures: Mr. Speaker, as I indicated earlier, the

actions we are taking today will reduce the projected current deficit for

1992-93 by $75.2 million. In mid-November, government departments and agencies

were directed to achieve a 1 per cent reduction in their total salary budgets

for this fiscal year and immediately implement a hiring freeze with the

exception of workers in certain critical services. Departments and agencies

also, were directed to achieve a 3 per cent reduction in their operating

budgets. These particular measures will reduce net current account expenditures

by $19.9 million. Further, a freeze on consulting services and certain

information technology expenditures, should provide further savings of $1.9

million.

While in mid-November wage and benefits reductions seemed

inevitable, extraordinary efforts by all departments over the last two weeks

achieved additional operating savings of $28.5 million in the remaining three or

four months of this year.

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: The application of restraint measures to

Provincial Crown corporations and the redirection of certain cashflows will

contribute a further $14.3 million to the reduction of this year's deficit.

The personal income tax rate will increase to 69 per cent of

the basic federal tax on January 1, 1993. Incremental revenues of $2.7 million

are forecast from this measure in 1992-93. The net effect of this measure and

the increase announced in the 1992 Budget will be to increase weekly deductions

starting in January for a single taxpayer earning $25,000 by $1.15.

The tax rates for gasoline and diesel fuel will be increased

by two cents a litre, effective today. This increase, this measure will

contribute $2.5 million to deficit reduction this year.

Also, effective today, the tobacco tax rate will increase by

2.5 cents a cigarette, with a concurrent increase for fine cut tobacco of 1.66

cents a gram. The new tobacco tax rates will generate $3.6 million this year.

A final fiscal measure involves increasing vehicle and driver

registration fees to raise an additional $1 million this fiscal year.

Other Measures: As a result of fiscal restraint on wages and

operating costs, Newfoundland and Labrador Hydro have advised that they will not

be seeking a rate increase for industrial or residential customers in 1993.

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: They are also hopeful that they will avoid an

increase in 1994. We call on Newfoundland Telephone and Newfoundland Power to

exercise the same discipline on expenditures so that they too can avoid rate

increases.

Government remains firmly committed to the Strategic Economic

Plan. This plan has a vision for this Province that will lead us into the

twenty-first century as an active competitor in the global marketplace. Part of

this vision also looks toward streamlined and more efficient Government

processes that are responsive to the needs and desires of the public. The

implementation of a Service Quality Program within the public service will be a

large part of this approach. As well, we are looking forward to working with the

federal government, in the manner discussed recently between the Prime Minister

and the Premier with a view to achieving the objectives in the Strategic

Economic Plan and the Federal Prosperity Initiative.

Government has been addressing the feasibility of privatizing

certain Crown corporations or portions of their business. Some of the functions

performed by those corporations are not serving at this point in time a public

policy objective. These functions will better contribute to economic growth, if

performed by the private sector. As well, Mr. Speaker, scarce public capital can

be retrieved and used by Government to achieve its other public policy

objectives.

Mr. Speaker, as a further demonstration of our resolve to

reducing the cost of governing the Province in the future we will be asking the

House of Assembly to direct the Redistribution Commission due to be appointed

this coming March, to make recommendations for a House of Assembly consisting of

the most appropriate number of districts between 40 and 46.

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: In addition, we will be introducing

legislation that will restrict the size of Cabinet to not more than one third

the size of the House of Assembly.

Government made a commitment in the Strategic Economic Plan

to adjust taxes where it could be demonstrated that these would have a positive

impact on investment and economic growth without compromising the overall

fairness and efficiency of the tax system. I am pleased to announce specific

measures that Government will be implementing to act on this commitment.

One of the business incentive measures contained in the

Strategic Economic Plan calls for the reduction of corporate income tax rates

for all businesses in the Province. The reductions contained in the Plan are:

from 17 per cent to 16 per cent for the general corporate tax rate; from 17 per

cent to 7.5 per cent for manufacturing and processing income; and from 10 per

cent to 5 per cent for the small business tax rate.

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: Government recognizes the advantages that can

accrue to the business community and the provincial economy from the early

implementation of these reductions. Therefore, I am announcing today that these

reductions in corporate income tax rates will become effective January 1, 1993.

In addition, Government will further stimulate the small

business sector and encourage job creation. My federal counterpart announced on

December 2 that the federal government would support these objectives by

providing small businesses with relief from unemployment insurance payments for

new businesses starting up in 1993 and for existing businesses increasing

employment during that same time. I am now announcing, Mr. Speaker, that this

Province will build on the federal initiative by implementing reductions in the

payroll tax for those businesses qualifying for federal UI relief.

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: Mr. Speaker, new, small businesses commencing

operations in 1993 will pay no payroll tax for that year.

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: Mr. Speaker, for those small businesses

increasing employment in 1993, they will do so with no increase in their payroll

tax payments.

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: Conclusion: Mr. Speaker, in this statement

Government has instituted measures to deal with the immediate effects on this

Province of our national financial problem and to lay the groundwork for a

longer term solution. We have been able to accomplish this largely because of

the help and co-operation and hard work of individuals in all sectors of the

public service, and we have called upon all people of the Province to contribute

their fair share. We, Mr. Speaker, have preserved the quality of the services we

provide to this Province.

The remaining longer term effects will be dealt with in the

1993-94 Budget. I believe this will be accomplished with what I perceive to be a

new understanding and willingness to co-operate by the public sector union

leadership. I believe this will be accomplished with the help of a more vibrant

private sector, which will respond to the new challenges of our times. I believe

this will be accomplished by the people of this Province who respond to

adversity with determination and a willingness to do their share. Many of the

letters I have received during the last two weeks support that belief. The

future now looks bright. This recession will end.

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: There are signs, Mr. Speaker, that the

economic stagnation that has gripped the economy of North America is being

pushed aside. Increased economic activity appears to be just around the corner.

Oil will flow -

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: - and yes, the fish stocks will rebuild. And

we still live in the best Province of the best country on earth.

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: Together, Mr. Speaker, we have many

challenges: The challenge to come out of this recession stronger and more united

than ever; the challenge to preserve the best medical care system in the world;

the challenge to develop changes in our educational system that will enable more

of our children to compete with anyone, anywhere -

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: - and the challenge, Mr. Speaker, to develop a

stronger, broader economy, so that in the future we can shed our financial

dependence on the rest of the country.

By working together, by sharing our ideas, and by showing

determination in our direction, we will accept these challenges, and we will

win.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Mount Pearl.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Mount Pearl.

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

Mr. Speaker, what we have just heard is an outright admission

of failure on the part of this government. As we go down through the various

measures the minister has announced this morning, we will see that everything he

has done is undoing what has been done over the past four years since this

government took office. What he will be admitting is a complete failure to

properly manage the economy of this Province, a complete failure to now be able

to address it without taking drastic action on the people of this Province,

particularly on the taxpayers of this Province, and he is not fooling anybody.

He is certainly not fooling the people in the galleries who are here

representing the public sector unions, Mr. Speaker, by saying there are no wage

rollbacks. There are no immediate wage rollbacks. You are now telling these

people: you will roll back voluntarily next year, or else there will be fewer

jobs in the public sector. That is what this government is saying.

SOME HON. MEMBERS: Hear, hear!

MR. WINDSOR: No wage rollbacks - yet, three weeks ago or

a month ago when the minister announced that he would be coming in with this

economic statement, he announced there would be a 1 per cent reduction in

salaries, in overall total salary budget for this year. That will continue for

next year, Mr. Speaker. He announced there would be a hiring freeze for this

year - that will continue for next year. He announced there would be a 3 per

cent reduction in overall budgetary allocations - that will continue for next

year.

In addition to that, it will increase for next year. The

minister has told the union leaders that there will be a further 5 per cent

reduction in the payroll allocation for next year, or in the overall

compensation package. Now, Mr. Speaker, how do you reduce the overall

compensation package - if he's going to come forward on one hand and pretend to

re-open collective bargaining, free and open collective bargaining, what is

there to bargain for? If there is going to 6 per cent less in the overall

compensation package?

SOME HON. MEMBERS: Hear, hear!

MR. WINDSOR: I will tell you what there is to bargain

for, Mr. Speaker - 6 per cent fewer jobs in the public sector next year! That is

how the government is trying to balance their Budget - 6 per cent fewer jobs in

the public sector, or more - or more, Mr. Speaker. Because the minister says

there will also be a similar reduction in the overall expenditure.

You may not find it possible to do that. That may mean more

jobs. Who knows? Maybe you can save some of the jobs by reducing the public

service expenditure more. I doubt that very much. And there is no indication

that one is transferrable to the other. So to say that there is no wage

rollback, that is true for this fiscal year. For the balance of this fiscal

year. But he has put a gun to the head of the public sector unions. He said: You

will negotiate away some benefits or you will negotiate away jobs, one or the

other, take your choice. That is what this government has said.

Is that this government's concept of free, collective

bargaining? The Ayatollah Khomeini had a system similar to that. It is no wonder

the Premier gave the flick to the previous minister. No wonder he gave him the

flick when he found out what was happening to the public sector debt. It is

amazing how we can go from a $29 million projected deficit to a $150 million

projected deficit in six or seven months, and not even know about it.

I suspect the Leader of the Opposition was right. This

government knew last March there would be a $100 million deficit and they

deliberately cooked the books. Well, they have now found out that it comes home

to roost. They flicked out the minister who was responsible at the time and put

in the poor President of Treasury Board to take the burden and to bring down

this news today.

So how are they going to deal with their problem? How did

they deal with the $150 million deficit? They put the fear of God into all of

the public servants and said: You will either find cuts in your departmental

estimates or you will lose positions or programs. The minister, himself, says he

can't believe how much the departments found. How much blood is flowing in the

department floors, Mr. Speaker, in order to try to reach this kind of a

reduction? They found a significant reduction, $28.5 million, in the

departmental budgets. The Crown corporations came forward with $14 million. I

suspect there are some Crown corporations that can come forward with more. We

will find out in due course how much are in the other Crown corporations.

This government's solution is to increase taxes again.

Personal income tax is now going far in excess of any personal income tax rate

in any province of Canada. The Minister of Finance in Ottawa announced two days

ago that the planned reduction of 1.5 cents in the surtax would go ahead as

scheduled this year, in spite of the economic difficulties being faced by the

Government of Newfoundland and Labrador. They have a far more serious deficit

problem. There is a far greater percentage of the federal dollar being spent on

debt servicing than is the provincial dollar. That is not to say that ours is

not a serious problem, but the federal problem is far more serious.

What did the federal minister do? Did he tax Canadians more?

No! He said, `We will continue with our plan to reduce personal income tax by

1.5 per cent.' I stood in my place yesterday and asked the minister would he

cancel the proposed increase of 1.5 per cent scheduled already for January 1,

announced in last year's Budget. This government announced a 4 per cent increase

last year, 2.5 per cent in 1992 and 1.5 per cent in 1993. He tried to kid the

world, Mr. Speaker, by saying, 2.5 per cent in calendar year 1992. The impact

has been, Newfoundlanders and Labradorians have been paying an additional 5 per

cent, because it only took place in the middle of the year. So in order to get

2.5 per cent in 1992, government has been deducting 5 per cent. So we have been

paying at the rate of 67 per cent for the past three months and for the balance

of this year.

Now the minister is saying, Mr. Speaker, not only are we

going to add the 1.5 per cent, but we are going to add 3 per cent more. We are

going to 69 per cent. What was the rate, Mr. Speaker, in 1989 when this

government took power? It was 60 per cent. It has increased 9 percentage points

which relates to a 15 per cent increase in four years. Now, in real terms, that

is a lot more than that because incomes, of course, have increased. So it is 115

per cent of a much higher income. Let's assume incomes have increased by 20 per

cent only. We have been in difficult time and incomes have been held back. Let's

say there was a 20 per cent increase, so we have 115 per cent of 120 per cent,

which is somewhere around 125 per cent or 130 per cent.

That is the solution of this government, Mr. Speaker. And

they will stand in their places, then, and talk about restraint and reducing the

number of members in the House of Assembly. It sounds to me, Mr. Speaker, as if

we need more members in the House of Assembly, to try to keep this government

straight. Have no fear, there will be twelve less members but they will be on

that side of the House after the next election.

SOME HON. MEMBERS: Hear, hear!

MR. WINDSOR: Mr. Speaker, that is all smoke and mirrors,

the few dollars that would be saved by reducing the service to the people of

this Province. Let's let the people decide. I don't have a problem with having

your redistribution commission. You have that anyway, by law. But let there be a

referendum to let the people decide if they are served by too many members, if

they have enough or if they want fewer members. Let the people decide, those out

there who are having trouble getting in touch with MHAs, particularly those on

that side. It is no wonder members over there think they don't have a workload.

They don't even appear in their districts. They don't even get out there. So let

the people decide, Mr. Speaker, I say to the Premier.

AN HON. MEMBER: Oh, look who is talking, the old

gerrymandering soldier himself.

MR. WINDSOR: There he goes.

MR. TOBIN: We are not all getting $10,000 a month.

MR. WINDSOR: It is not hard to know, Mr. Speaker, when we

are getting close to the truth. The Premier's face turns red and he leaves the

Chamber.

SOME HON. MEMBERS: Hear, hear!

MR. WINDSOR: You can read him like a thermometer, Mr.

Speaker.

Now, Mr. Speaker, this government has done a great deal. I

congratulate the minister in taking my advice in immediately instituting the

reductions in corporate taxes that he announced in the Strategic Plan. What a

wonderful thing he has done, he has taken it from 17 per cent back to the 16 per

cent that it was when they took office, again admitting the mistake they made in

increasing the corporate tax rate.

Mr. Speaker, 17 per cent is higher than Prince Edward Island

or New Brunswick by 1 per cent and 2 per cent. The small business taxes now come

down to 7.5 per cent. That will make us more competitive than Nova Scotia, but

less competitive than Prince Edward Island. On payroll tax, Mr. Speaker - there

is a beaut - there is another sham, cut out the school tax.

AN HON. MEMBER: (Inaudible) the school tax.

MR. WINDSOR: Cut out the school tax, increase personal

income tax. They collected twice as much from payroll tax as they ever collected

from school tax.

MR. WINSOR: And put it in the Treasury (inaudible).

MR. WINDSOR: Tried to put it forward. The former minister

introduced it as a health and education tax. That wore thin after awhile when

the people saw through it. Now it is going to replace school tax. Next year's

Budget, we will see; what will it be then? That will be the balance of personal

income tax or something, I suppose. We keep changing the name. The pain doesn't

decrease. The pain doesn't change at all.

The minister announces that there will be no payroll tax for

new businesses. How many new businesses do you know that start out with a

payroll of more than $100,000 in the first year? Precious few.

AN HON. MEMBER: Halley Hunt.

MR. WINDSOR: Some, yes, lawyers maybe.

AN HON. MEMBER: Fortis.

MR. WINDSOR: Some have payrolls greater than that and

don't even go to their office. They are in the House of Assembly.

SOME HON. MEMBERS: Hear, hear!

MR. WINDSOR: But I welcome the fact that if there is an

increase in employment this year with a company there will be no increase in

payroll tax, so it is frozen for one year. At least now, employers know they can

increase their payroll without being penalized. It had no impact on their

profitability, whether or not they were making any money, but at least now they

won't pay more money on the payroll tax.

If there were any fish plant operators operating in the

Province - I guess there are still some; yes, of course, there are, particularly

on the South Coast - at least now they know that they will not be penalized

because they hire more people to work in their fish plant this year, presuming

they have enough fish to keep her going.

How did this government come from $150 million down to, now,

$78 million? - first of all, by playing games. We stood here, day after day,

saying to this government - and I said it again yesterday - take the advice of

the economists who are saying the way to end the recession is to spend on

infrastructure. Do some capital spending. And we qualified that by saying that

you don't borrow like drunken sailors, you borrow responsibly. You may have to

cut back on other areas but you stimulate the private sector.

What has this government done? They have allowed $24 million

that they fought for, and were allocated by this House of Assembly last year, to

sit there. They did not spent that $24 million. And that is three years in a

row, if my memory serves me correctly, that this government was left with

capital funding at the end of the year. So, instead of stimulating the private

sector, instead of creating jobs by creating work for the private sector, this

government has stifled the private sector.

Hundreds of contractors are out there sitting with equipment

idle. People are on unemployment and this government has $24 million that they

don't want to spend this year, to try to cook the books a little bit more and

pretend that the deficit all of a sudden has been reduced from $150 million down

to $78 million. You can reduce it to nothing if you stop spending.

AN HON. MEMBER: Just enough to build another Sprung.

MR. WINDSOR: Another Sprung, Mr. Speaker - listen to him!

The payroll tax you collected this year could build three Sprungs. It could

build three of them. What would they do without it? What would they do without

Sprung - if they didn't have anything to talk about.

How many doorknobs could you buy for the price of Sprung?

There were no golden doorknobs on Sprung, I will tell you that, not a one! We

didn't spend $70,000 putting wallpaper on Sprung either!

SOME HON. MEMBERS: Hear, hear!

MR. WINDSOR: So, Mr. Speaker, $24 million of this great

piece of work they did in the last three weeks came from not spending the

capital money that was allocated to them. $14 million came from Crown

corporations. That must have been a lot of worry for government, to tell Crown

corporations to cut back. We have not heard yet which Crown corporations they

are. Maybe it is the Liquor Corporation. Maybe there is an increase in liquor

hidden in here somewhere. Who knows? It is not Fortis. That is for sure. You can

be rest assured of that. Twenty-four million dollars, Mr. Speaker, came from

government departments, programs are now cut to the bone. No positions are being

filled. There is a 1 per cent reduction in the overall salary allocation.

Well, you can maybe manage that for a three month period by

simply not re-hiring, but over the year that 1 per cent amounts to 2 per cent,

or 3 per cent, because there is only one third of a year left to go so that's a

3 per cent reduction for the balance of the year and now we are looking at about

a 5 or 6 per cent reduction for next year. It is physically impossible, Mr.

Speaker, to achieve a 5 per cent reduction, an overall compensation package,

without either rolling back the salaries, reducing the number of positions, or

giving up other benefits like pension plans, medical plans, severance packages,

vacation pay, compassionate leave, or family leave, whichever you wish to call

it. It is impossible to reduce by 5 per cent without reducing those things.

Anyway you want to call it, Mr. Speaker, it is a 5 per cent rollback. In fact it

is a 6 per cent rollback of benefits to public servants in this Province. You

can cut it and you can paint it anyway you want, Mr. Speaker, but that is what

it amounts to. Once again the public service of this Province is going to pay

the price for the sins and the ineptitude of this government. Absolutely true.

SOME HON. MEMBERS: Oh, oh!

MR. WINDSOR: Mr. Speaker, I told them many times what I

would do. There is a great deal more we could say about this particular

document. There is a great deal more that can be said once we have an

opportunity to read into the fine print. I suspect, as we have discovered in

every previous Budget this government has brought forward, once we got into the

fine print, they tried to cleverly disguise the real impact of what they were

doing. They have not done quite as good a job this time, I do not think, but no

doubt there was more left in there.

I spoke yesterday about the 171 fees and licences that were

being eliminated but it turned out there were only seven licences being

eliminated, seven licences only in the 171 licences turned out to be maybe

twenty-five or thirty when you take out the different categories. That is the

kind of methodology this government uses to bring forward a document and try to

put it forward as a reasonable document. As I say, Mr. Speaker, there is a great

deal more we can say, and we will. My colleagues will have an opportunity to

speak. I will not get another opportunity under the rules of the House to speak

again on this. Let me summarize by saying it is an admission of failure, it is a

gross admission of failure. It is an admission that everything they have done in

the past four years has been wrong. They are finally taking some of the advice

we on this side of the House have been giving them. They are finally realizing

that we are non-competitive with other provinces of Atlantic Canada when it

comes to corporate taxation. They are going to put the burden for that on the

public service and the taxpayers of this Province. Yes, Mr. Speaker, the oil

will flow, the fish stocks will regenerate, the sun will shine, and the Liberals

will be no more.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

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

MR. HARRIS: Thank you, Mr. Speaker.

The message in the minister's financial statement this

morning is very clear, and that is that the public sector workers of this

Province have stood face to face with the government and the government has

blinked. I know, Mr. Speaker, why the members opposite stood up and clapped the

minister when he finished his speech, because they're still reeling from the

shock that they got from the public sector workers, from the meetings with

teachers over the last couple of days, from the words spoken by the nurses and

their adamant refusal to accept the plans of this government to roll back their

wages.

Now that's what happened here this morning. The government

has responded to that challenge and to the threat that the public sector workers

of this Province - the teachers, the nurses, the health care workers; the people

who work directly for the government, its clerks, highways, Crown corporations -

all of these workers said loud and clear that they were not going to accept

further cuts by this government to their wages or a wage rollback.

I think it's a good thing that the government is listening to

what's going on around this Province. Perhaps they're also listening to what the

International Labour Organization has said in condemning and criticising their

legislation, which for two years running has interfered with collective

agreements already signed. But they didn't go farther. They didn't say they

weren't going to change the Workers' Compensation legislation and stop

interfering with the collective agreements with respect to the top-up. They

didn't go further and say they were going to re-institute total collective

bargaining on the issue of workers' compensation benefits.

They have made some steps though, and I have to commend them

for listening.

AN HON. MEMBER: Thank you.

SOME HON. MEMBERS: Hear, hear!

MR. HARRIS: Because the vast majority of people in this

Province respect the rights of collective bargaining, respect the fact that

public sector workers deserve to be treated with dignity and fairness, and not

to be treated as the whipping boy of the public, with an opportunity of

government to change the collective agreement whenever they feel like it.

I welcome the changes to Bill 17 which will allow full

collective bargaining in the public sector. This government, Mr. Speaker, over

the last two years has destroyed any possibility of harmonious relationships.

They've prevented any respect for the government's agreements. No public sector

union leader could come and talk to this government and make an agreement and

believe that they could go away after a handshake or even after a signed

agreement and know that they had a deal that they could rely on.

That has to change. I'm not yet convinced that it will

change. But at least there's some sign that the government is backing off its

arbitrary interference with collective agreements and perhaps listening to the

criticism of such august international bodies as the ILO. They said in their

most recent report that the kind of legislative action that this government was

taking and had been taking was going to lead and severely prejudice the labour

relations climate in this Province. It has done so and there's a big repair job

to be done.

There is some hope in the following facts. The minister spoke

of the renewal of or the attempt to maintain the services that we have. Our

great Medicare service, other public services that we must ensure are

maintained. There is some hope in that, because the workers of this Province, as

represented by their unions and by the Federation of Labour, are very much in

the forefront of support for these programs. For programs of Medicare, health

care, social services, public welfare benefits. These programs must be saved and

in fact improved.

It is that kind of co-operation that you can get to maintain

those services, to maintain those programs. You will get the co-operation if you

do not have hanging over the heads of the negotiators, the threat and the weapon

of legislating their contracts out of existence. If the government, Mr. Speaker,

is prepared to commit itself to doing that than they may have the ability to win

back some negotiating ability with the public sector unions.

There were some criticism of a couple of unions, Mr. Speaker,

by the government for not being co-operative with the government. I am

surprised, Mr. Speaker, they got any co-operation at all with the kind of

attitude that they have been operating under over the last couple of years and

the legislative measures that they have taken to claw back benefits negotiated

in collective agreements.

The history, Mr. Speaker, of what this government has done is

worth reviewing because they have, Mr. Speaker, in successive years introduced

legislation in Bill 16 that had the effect of clawing back pay equity

provisions, rolling back increases and announcing layoffs to the public sector,

Mr. Speaker. In Bill 17 they continued the rollback of collective agreement

gains and they put a cap on collective bargaining of 3 per cent in the public

sector after April 1st, 1993. Now, I do not look forward, Mr. Speaker, to

restrictions on the compensation envelope and expect public sector workers to

bargain within that. I do not think, Mr. Speaker, that that is an appropriate

way to go. You cannot tell the public sector employees that they alone are

responsible for reducing that amount of money.

So, Mr. Speaker, while the official opposition may criticize

an income tax increase, we the New Democratic Party, Mr. Speaker, see that as

representing everybody paying their fair share of what the economic problems of

the Province are. We see that, Mr. Speaker, as everybody paying their fair

share.

Now, Mr. Speaker, I have a different view of the deficit and

a different view of the causes of the problems that we have here in

Newfoundland. We are victims, Mr. Speaker, of economic mismanagement on a

gigantic scale. A mismanagement of the economy of this country and of this

Canada, Mr. Speaker, has a tremendous responsibility for causing us the problems

that we are facing in this Province today. Their management of the federal

economy, their management of the money supply, their management of the interest

rates, all have conspired, Mr. Speaker, to have us believe and to put us in the

situation where the public debt has become unmanageable and in fact, Mr.

Speaker, the public debt has had the effect of transferring the wealth of this

country to private investors.

There is a different way, Mr. Speaker, there is a different

way and there is a different approach. We talk about the public debt and the

Minister of Finance has talked about it in terms of the amount per family of the

public debt and the amount per family of the interest payments. Well, Mr.

Speaker, in Canada today the deficit as a percentage of the gross domestic

product, in fact is no higher today, in fact it is lower than it was in 1981,

and for the last eight years as a percentage of the gross domestic product the

deficit has in fact decreased. The deficit as a percentage of the gross domestic

product has in fact decreased.

But, Mr. Speaker, we have critics of the deficit, including

the Prime Minister, saying it is unfair for us to pass on our debts to future

generations, but the future generations will be much worse off if, instead of a

deficit that we pass on to them, we pass them on a country plagued with ill

health, poor health care, poverty, joblessness, lack of education, crumbling

public services, crumbling schools, crumbling highways, that, Mr. Speaker, would

be a far worse legacy than a public debt that is responsibly managed and public

services that are responsibly undertaken.

Now there is, Mr. Speaker, an opportunity in responsible

negotiations with public sector unions over the next period of time to look

seriously not just at the collective agreements. Government, Mr. Speaker, and in

particular finance ministers like to look at public sector unions and collective

agreements and find ways of cutting back, saving money, shaving off benefits,

rolling back to a worse time the benefits of workers. But, Mr. Speaker, why not

get the unions involved in trying to find efficiencies in the public sector? Why

not get the unions involved in committees, which they have offered and have been

turned down, to try and help redefine how certain management practices might

take place to achieve efficiencies in the delivery of public services?

Why not include them in finding ways to more efficiently

deliver the health care services of this Province to all of our people? Who

knows more about the delivery of health care than nurses and nursing aids and

hospital workers and people who are involved in the day to day level, who know

where waste and mismanagement are having a serious effect, not only on the

health of patients and the delivery of services, but also on the cost? I am

convinced, if government is serious about redefining and maintaining some of

these most valuable programs such as medicare, I am convinced that there are

ways that can be found, not just to maintain these services but actually improve

them and deliver them at a cheaper cost.

I am convinced that that is possible, but it cannot be done

if the approach of government is to sit down across the bargaining table with

the sharp pencil, looking for ways of taking back benefits out of collective

agreements, or hanging over these same negotiators the threat of coming here in

this House and legislating those agreements and benefits out of existence. There

has to be, Mr. Speaker, a commitment by government to respect the bargaining

process, a willingness by government to open up the content of collective

bargaining to more issues other than just paying benefits. That can only be done

if there is an aura of good faith about the negotiations on both sides. I heard

an hon. member say: on both sides, and I agree, good faith and a commitment that

the bargains that are made will be honoured.

Why not, Mr. Speaker, in workers' compensation area? We know

that the real crunch on monetary problems in the workers' compensation is not

coming for a number of years, some say four or five, others say ten or eleven.

Why are we reducing benefits now, why not set aside a two-year period and say:

okay, the unions of this Province, public sector unions, private sector unions,

all unions, employers, the people who are paying for the system, give them the

challengeto find ways of reducing the long-term costs of workers' compensation.

Give them a period of time. Say: You go out, you work it out, you find ways of

improving that system, and here are two years to do it. Then in the absence of

solutions, if the solutions are not found, the government will do what it has to

do.

That is a more responsible attitude, Mr. Speaker, instead of

two weeks ago, as the Minister of Finance did, hauling in the public sector

unions and saying: Look, we want to take money out of your pockets. If you don't

agree with us, we are going to do it anyway. That is what they said, Mr.

Speaker. That is the kind of consultation the Minister of Finance has

undertaken: We want to save money from your paychecks. You tell us how to do it

in the next two weeks or we will do it ourselves. Mr. Speaker, these unions,

with their responsibilities to the members, said: No, we are not going to agree

that you should take money out of our pockets and out of the paychecks of our

members. And they were right in doing so, Mr. Speaker, because that was what

they had to do.

So I don't buy what the official Opposition has been saying,

Mr. Speaker, that this was a ruse. This wasn't a ruse. This wasn't some pretend

game that the government came up with - let's scare people to death and then

ease off. No smoke and mirrors here, Mr. Speaker. There was a definite, direct

intention on the part of the senior Cabinet - and I don't know who the senior

Cabinet is, Mr. Speaker, but they know who they are. There may be only one or

there may be two, but the senior Cabinet, Mr. Speaker, had every intention in

the world to roll back the wages of public sector workers. The public sector

workers have said no, and the Liberal backbenchers have agreed with them. I

think that that is a good thing, Mr. Speaker.

What is remarkable, Mr. Speaker, is, all of the sudden, in a

matter of two weeks, we found $24 million here, we found another $10 million

here, another $2 million here, another $3 million there, and really it is not

necessary at all. That is what is amazing, Mr. Speaker, that in a matter of two

weeks all of a sudden the crisis is resolved.

Now, granted, some of the measures are stiff, and I don't

take lightly a 3 per cent increase in personal income tax. I think it is a very

serious amount and many people are going to start wondering once again, why is

it that we, in Newfoundland, have to pay so many taxes to live in this Province

and get the public services. We will have to reexamine the whole relationship

that we have within Canada. The whole fiscal arrangements have to be looked at,

Mr. Speaker. I think the time has come when we have to have another look a this

whole federal/provincial relationship.

We have to make sure that Newfoundlanders don't pay an

inordinate price, Mr. Speaker, to get the level of public services that we

deserve. Mr. Speaker, at least this heavy burden of an increased income tax is

shared and put in place as a progressive tax which taxes the wealthier more than

the ordinary working person who is using most, if not all, of his or her money

to look after the basic needs. At least, Mr. Speaker, the tax that we are

talking about today of 3 per cent is shared amongst all and particularly amongst

those who can afford to pay.

So I do commend the government on that. I commend them for

listening. I ask them to go further in the coming weeks and months and open

their hands to a true cooperative effort in trying to resolve the financial

problems and the problems in the public sector without the weapon of legislating

away collective agreements.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the member for Eagle River.

SOME HON. MEMBERS: Hear, hear!

MR. DUMARESQUE: Thank you, Mr. Speaker.

I am very pleased to rise here today and speak in support of

the statement by the Minister of Finance. Let me say, Mr. Speaker, at the

outset, the people of Newfoundland and Labrador today have recognised once again

that we have put into place a government that is fiscally responsible, that has

the principles of Liberalism forefront in their political and governmental

agenda. We have today a Minister of Finance whom we can all be proud of in this

Province.

SOME HON. MEMBERS: Hear, hear!

MR. DUMARESQUE: What we can say today, Mr. Speaker, is

that the scaremongerers have come up nil. We can say that the doom-and-gloomers

opposite have struck out again. We can say from the response of the Opposition,

the critic over there this morning didn't know whether it was night or day. He

didn't know where he was, Mr. Speaker.

The NDP couldn't wait to get to their feet to congratulate

the government on what they have done. That is what the people out there saw

today - a demoralized, disillusioned Opposition who couldn't believe their ears

that this government has been able to look at this problem and deal with it as

effectively as we have.

I want to use the few minutes that I have to talk about

fiscal responsibility, about labour relations, and about, most fundamentally,

the principles of Liberalism as it relates to the business stimulation that we

have given in this particular statement, and also the retention of our social

conscience.

In terms of fiscal responsibility, we cannot escape and we

have never tried to escape from the principles of fairness and balance. We have

gone out there right from day one and said, we cannot be extremist and say that

we are going to spend our way out of this problem. We cannot be like the

socialists of the country who want to go and borrow and borrow until their banks

say borrowing cannot go on any longer. That is not the responsible action to

take. This government could not go that way and neither would our principles let

us go that way.

Neither could we go and say to the public servants of this

Province, to the hospitals and educational administration of this Province,

'Everything is going to be cut, and you are going to have less services in this

Province than you have in other provinces. We could not do it on the backs of

the workers of this Province alone and we certainly lived up to that today.

Of course, we also recognize that there is not an endless pot

of tax revenue to be gathered from the workers of this Province. We could not go

out there and say: We are going to put the taxes up without limit so that we can

again take the revenue from that source and be able to spend our way out of it.

What we have done is we have taken a prudent, responsible, pluralistic approach,

a balanced and fair approach, to dealing with our problems.

SOME HON. MEMBERS: Hear, hear!

MR. DUMARESQUE: We have seen the government here today,

through the Minister of Finance, say that we have to be responsible when it

comes to borrowing. We have to be responsible when looking at tax increases and

responsible also when looking at maintaining the integrity of our social

programs and our commitment to health and education in this Province, in

particular.

Mr. Speaker, it would be remiss of me, and, I think, of this

government, if we didn't give a comparison between what the previous government

did under these circumstances and what we have done here today. The people of

this Province must have that comparison to say whether we are doing right or

wrong, whether we are making progress or not. And I would submit that once the

results are out, once we are measured up against the performance of the previous

government, there will be no doubt in the minds of the voters of Newfoundland

and Labrador.

Let's look at what happened in the early 1980s when there was

8 per cent growth each year. Let's look at what happened when there were

hundreds of millions of new dollars coming into this Province each year. What

did that government do when it was in power? Did it take the responsible course

and say, Let's still be prudent managers, let's still maintain our standards,

let's still look at how to repay some of our debts, let's look at trying to

secure our pension funds? Did they do that? - no, absolutely not. They went out

and spent like drunken sailors, spent us into oblivion. That is the clear record

of what happened out there.

Now, nobody will forget that infamous day in January, 1989,

when the Premier of the Province had to come before the people of this Province

and say, if we do not exercise political courage, we will be going back to 1930;

if we do not take this course of action, we will be back to the Depression

years. That was the kind of political leadership we had in January 1989. And the

people of this Province were wise. They said: 'We are not going to allow our

Province to be continually run by a blown mind.' That was it. He said: 'It is

going to blow your mind.' 'It would blow your mind,' he said, and 'We are going

back to the Depression.' And the people said: 'Thank you, Sir, but no thanks. We

are going to put a Liberal government in and take care of the responsibility for

our children in the years to come,' and that is what they did!

SOME HON. MEMBERS: Hear, hear!

MR. DUMARESQUE: We did not turn our backs on the people

of this Province. We executed the mandate that they gave us and we exercised the

political courage necessary to deal with the finances of this Province. We did

that on the basis of fairness and balance, and that is why today we still have

the approval - the unaltered approval - of the public of this Province for the

political and the governmental actions we have taken.

Mr. Speaker, there are no lessons to be learned either, from

the previous government with respect to labour relations. When it comes to

labour relations, we have no lessons to learn. We know what Bill 59 was all

about in the previous government. We remember the scenes on TV when they were

saying, 'You are going to be on the street,' because that is how they wanted to

manage the Budget - they wanted to get the public servants on the street to save

a few taxpayers' dollars. They didn't care about services, they didn't care

about the education of our children, they didn't care about the health of our

people, they wanted to get people on the street so they could save a few

dollars. That was the mastermind; that was the key element of their fiscal

strategy. I say, shame on them! The people of this Province are not going to

forget that very easily, Mr. Speaker.

We now know that collective bargaining is alive and well in

this Province. We now know that collective bargaining is out there for the

unions, the responsible unions, to take advantage of. We now know that there is

an open door to the Minister of Finance - an open-door policy.

SOME HON. MEMBERS: Hear, hear!

MR. DUMARESQUE: We now know that the Minister of

Employment and Labour Relations has introduced the reforms in the Labour

Relations Act that will see collective bargaining alive and well.

SOME HON. MEMBERS: Hear, hear!

MR. DUMARESQUE: I say today, we have seen another

watershed statement on labour relations to bring labour relations into the

1990s, able to get unions to act responsibly, able to get unions to come in and

say: Let us put aside our political agenda and deal with the real needs of the

people of this Province.

SOME HON. MEMBERS: Hear, hear!

MR. DUMARESQUE: We now have the door open. We will be

able to negotiate and be able to take back, and look honestly in the eyes of the

workers - and they will have a government that listens. We are not beyond making

a mistake from time to time - we are human, but we are a compassionate

government. We are people who take our responsibility seriously and are looking

out for the future of our children. Let nobody ever forget that.

SOME HON. MEMBERS: Hear, hear!

MR. DUMARESQUE: So we have done that, and I submit, we

have done it in spades.

There are no lessons to be learned either, from the

Opposition, with regard to acting responsibly in labour relations and with the

labour unions. The critic this morning, and the NDP, have stood and said that we

went out and tried to raise fear amongst the people about rollbacks. Mr.

Speaker, it was not this government that did that, Mr. Speaker. And one member

of the Opposition said there was never any intention - How are we responsible,

Mr. Speaker?

As for the NDP, I would submit, let them look no further than

to their NDP and socialist cousins in Ontario. Let me read, Mr. Speaker, what

the treasurer of the Ontario NDP said a couple of days ago. Was he fear

mongering? What was he saying that this Minister of Finance never said? He said,

and I quote: 'If unions don't keep to low wage demands he will be forced to

consider wage freezes and wage rollbacks in the areas which rely on the

provincial government for financing such as social services, hospitals,

universities, school boards and municipalities.' Rollbacks, the treasurer of the

NDP government in Ontario said. Now then, Mr. Speaker, that was not the Minister

of Finance for Newfoundland and Labrador, that wasn't the Premier of

Newfoundland and Labrador, that was the treasurer, the Minister of Finance of

that NDP, that great socialist conscience in Ontario; that is what that was, Mr.

Speaker.

Let there be no mistake about our position when it comes to

trying to deal with the finances of the Province. We have a much different

approach and, as I said from the outset, Mr. Speaker, the most important, the

most fundamental aspect and the most key element of this statement that I am so

happy and proud to be able to stand here and support, is the fact that we have

been able to deal with this financial adversity and keep our social conscience.

SOME HON. MEMBERS: Hear, hear!

MR. DUMARESQUE: That is the key. Because liberalism will

not falter when it comes to dealing with the education and health of our people.

This year, the Minister of Health and the Minister of Education, the Minister of

Education, in particular, are saying that there is $48 million, more money this

year, in the education budget than there was the previous year. Now, Mr.

Speaker, that is the kind of funding that is there. Let there be no

fearmongering out there in that great society of ours that there is a tremendous

cutback to education in this Province, because there is not.

Let me say to the health department and all the health care

workers out there, contrary to what the unions have been telling you and what

the Opposition have been preaching, Mr. Speaker -

AN HON. MEMBER: Certain unions.

MR. DUMARESQUE: Certain unions, yes, I would have to

categorize that and say certain unions have done that intentionally, Mr.

Speaker. But in health and education, have we seen less money this year than we

did in the previous year?

SOME HON. MEMBERS: No!

MR. DUMARESQUE: No, Mr. Speaker, there is $22 million

more in health this year than there was last year, Mr. Speaker. That is the kind

of commitment that we have taken, and the answers must be clear, the message

must be clarion, Mr. Speaker. The people out there must be told the truth,

contrary to what the Opposition want to stand up and promulgate, Mr. Speaker. We

will not stand for it. We are here to be given the responsibility to govern, and

govern we will.

SOME HON. MEMBERS: Hear, hear!

MR. DUMARESQUE: And govern we will, I submit, for some

time to come, Mr. Speaker. In my own riding, we have had the Liberals there for

forty years, Mr. Speaker, and forty more will follow.

Now, Mr. Speaker, you will note something remiss this morning

with the Opposition - with all the doom and gloom that was projected on our

society this morning, Mr. Speaker, with all the fearmongering that was put out

there, where they said that we were going to abdicate our responsibility, what

would be the natural thing for the Opposition to ask for this morning?

AN HON. MEMBER: An election?

MR. DUMARESQUE: The 'E' word, Mr. Speaker. We have not

heard the 'E' word this morning. They cannot go to the people and say what they

have said in the past few months, Mr. Speaker, and the past few weeks.

SOME HON. MEMBERS: Hear, hear!

MR. DUMARESQUE: They cannot go out to the people and say

that we are going to put more fear into you because the record is clear, the

Minister of Finance was clarion in his statement this morning and the people out

there are comforted knowing that they put a government in place in this Province

that was unswerving in its commitment to keep its responsibilities and its

principles intact, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. DUMARESQUE: I am sure, now that we have prompted

them, now that we have pickled them, now that we have driven them to a frenzy,

that they have forgotten the 'E' word, maybe they will now go out and say: What

is 'election'?

AN HON. MEMBER: They are still going to say it, are they?

MR. DUMARESQUE: They might try to get it underneath all

the (inaudible) words - What is 'election' now? Some chance, Mr. Speaker! It is

not going to be the leading question in Question Period, I can tell you that -

When is the election? And you know, if I have done the deed, if I have prompted

them, if I have driven them into the 'E' word, then of course, what will we say?

We are proud to go to the people of Newfoundland and Labrador knowing that we

have done the job they gave us in 1989 and I am confident they will re-elect us.

AN HON. MEMBER: They will say it now, boy! They will say

it now. You have frightened them into it.

MR. DUMARESQUE: So, Mr. Speaker, the record is clear, the

statement is there. It is too late now, when they had 8 per cent increases in

transfer payments, to say they are not going to spend like drunken sailors. It

is too late to repent now, it is too late to go to the people now and say, 'It

will blow your mind.' It is too late to go now and say, 'this long, this long -

six days.' It is too late to do that now, the deeds are done, the die is cast.

They are in Opposition now, and they will be for some time to come. That is what

the people want. And, certainly, I would have been very, very disappointed if

the Minister of Finance had not lived up to the expectations of the people. And,

in concluding, Mr. Speaker, I would have to conclude on that.

The Minister of Finance of this Province and the President of

Treasury Board, have maintained the principles of liberalism: compassion,

tolerance, moderation - moderation and tolerance, the tenets of liberalism going

back to Mackenzie King. We have lived up to them in spades, and I say to the

people of Newfoundland and Labrador: Listen more to the government that you

trusted and not to the scaremongering - a fear that the Opposition mentality in

Newfoundland and Labrador today are trying to put into you. I say, Mr. Speaker,

that when the time comes to put our record on the line, we will have no

apologies to make.

I certainly know, in my riding of Eagle River on the Coast of

Labrador, that we will have no apologies to make, Mr. Speaker. I say to the

Minister of Finance and the Government of Newfoundland and Labrador: Carry on,

because the people of Newfoundland and Labrador are supporting you for the

responsibility, the honesty, the integrity and the commitment that you display

day after day, week after week and year after year. We are going to continue to

do what is right and proper for the people of this Province.

Thank you very much, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

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

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

It is my pleasure to rise today to take

part in this debate.

First of all, I say, it is too bad that the people of Eagle River could not see

the display this morning by their member. He would not want an election because

he would get one big boot, I say to him. What an immature display, on a morning

in this Province that people have been waiting for now about two months, where

once again, we see this government taxing people once again - and they are

talking about no rollbacks.

Mr. Speaker, there is a rollback for everyone in the

Province. Every wage-earner in this Province is being rolled back once again by

this government. And for the Member for Eagle River to stand up and get on with

his nonsense and his immaturity - what an immature member, Mr. Speaker. It is

too bad the union people did not stay in the galleries and listen to him.

Certainly, they could not stay and listen to him - how could they?

He talked about fearmongering and scare tactics. Who started

it all? Clyde K. Wells started it all when he called the unions in and then went

on public television and told the people of the Province that everything was on

the table. Everything was on the table. Wages, pensions, rollbacks, were on the

table. That's what Clyde K. Wells told the unions and the people of this

Province.

The Minister of Finance said, indeed, he was considering

rollbacks. The last two caucus meetings of government members were nothing short

of a civil war because of the fear of rollbacks, I say to members opposite - and

the beating they were taking in their districts when they went out on weekends

and out to meetings, the beating they took. There was civil war in the caucus

over the possibility of rollbacks, I say to members opposite.

What have they done this morning? They are trying to get the

public service of the Province to say: Thank you for nothing. Thank you for

nothing once again, Clyde and company, thank you for nothing. We have brought in

Bill 16, we have had Bill 17. In Bill 17 we said: You may negotiate a wage

increase up to 3 per cent.

Now, if I were the unions I'd be very suspicious. I am glad

Bill 17 is gone. But do the unions realistically expect that they are going to

be able to negotiate a 3 per cent increase with this government? I doubt very

much if they believe that. There are going to be more people laid off in the

public service and those who will be left working will not have anything to do

because the programs are going to be gutted. That is what this Minister of

Finance announced here this morning, a gutting of government programs. Those who

are left in the public service, what will they do day-in and day-out? Because

the reality and the truth of this statement this morning is going to take a

while to unfold.

AN HON. MEMBER: (Inaudible).

MR. MATTHEWS: It is going to take a while to unfold. I

remember when the former Minister of Finance stood in his place a couple of

years ago and referred to his Budget as the common man's Budget. Once word got

out of what was in the common man's Budget, the Minister of Finance and the

Premier and the government in this Province were almost lynched.

You talk about hypocrisy, Mr. Speaker! The Minister of

Finance this morning stood and said that other members in this Legislature had

suggested borrowing. He chastised members for suggesting that the Province

borrow. He talked down at people for suggesting that. Then, about four minutes

more into his speech what did he announce to the people of the Province? He is

going to borrow how much?

AN HON. MEMBER: Responsibly!

MR. MATTHEWS: How much is he going to borrow? - $70

million or $80 million, that's all - only $70 million or $80 million more. Why

didn't he borrow in March and bring in a realistic Budget for the people of the

Province, instead of trying to be so deceptive? - a government filled with

hypocrisy and deceit, Mr. Speaker.

Buying time is what this statement is about - 'Give me five

or six more months to pull the wool over your eyes, public servants. Give me

five or six more months to pull the wool over your eyes once again.' That is

what we got here this morning.

I want to say to the Member for St. John's East, I don't

thank the government for anything. I ask the Member for St. John's East, What

are you thanking them for? Nothing!

AN HON. MEMBER: (Inaudible).

MR. MATTHEWS: You are thanking them for nothing. You want

the burden shared on all Newfoundlanders and Labradorians.

SOME HON. MEMBERS: Oh, oh!

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

MR. ROBERTS: Guys, let him dig his own grave.

MR. SIMMS: Clyde is gone, yes.

MR. MATTHEWS: Speaking of digging graves, I say to the

Government House Leader, I hope that he has his funeral pre-arranged. We know

who will pay for it.

SOME HON. MEMBERS: Hear, hear!

MR. MATTHEWS: Share the burden equally throughout the

Province, says the Member for St. John's East. Slap them with another 3 per cent

on top of the already 1.5 per cent income tax increase in January. Tax them by

4.5 per cent more, the Member for St. John's East said. The same people of whom

this government have frozen their wages for two years and taxes them by another

4 or 5 per cent and you say, thank you, Mr. Wells and company. That is what he

said here this morning, I say to him. Thank you for freezing the wages of the

people I am suppose to stand up for but tax them 4.5 per cent and say, thank

you, that is what he said. That is exactly what he said here this morning. I do

not know how he can sit in the chamber and take it. He should leave. Thank you

very much for nothing. What are we seeing here by this government this morning?

What have they announced this morning? Why are the members who have gone through

two weeks of civil war in their caucus pretending to be so happy this morning?

Do they honestly think that the free collective bargaining they are referring to

is going to take place when they are looking at a $250 million deficit next

year? Oh, yes, it will be free collective bargaining - with no wage increases

for another year. Where are they going to find the money to give an increase? So

what is the free collective bargaining going to be about?... layoffs and the

extent of layoffs, the cut of services, and the extent of services that will be

cut. That is what we are going to see.

We will see, come January or February, I say to members

opposite who made snide remarks on the side to their colleagues, we will see

come January 15 or February 15 just what is contained in the economic statement

this morning. Wait until the layoffs start in the departments and in the

government offices out and about the Province once the word gets out on what is

really contained in this financial statement this morning. That is what we are

going to see. The big delight this morning was there were no rollbacks. Do not

think for a minute that there are not going to be public servant's heads roll

because of this, I say to members opposite.

The smirks on your faces will not be as bright come the

middle of February, and the smirks on your faces will not be as gleeful come the

next fiscal year when they deliver another Budget, if they have the intestinal

fortitude to do it before they go to the polls. I say to the Member for

Stephenville there is $250 million you are going to have to deal with. We left

them with a surplus and in their first Budget, Mr. Speaker, they predicted a $10

million surplus, but you know what they came in with at the end of the year?...

a $117 million deficit. It is not too much difference. How much is that? $127

million difference. If you combine all their Budgets do you know what they have

been out since they have been in office? In excess of $300 million to date. That

is not counting the Budget that is going to come in March or April. They are

already saying there is going to be another $250 million so if they bring in a

Budget in the Spring before they go to the polls we are going to be looking at

somewhere around $400 to $500 million.

MR. FLIGHT: What do you want first, an election or a

Budget?

MR. MATTHEWS: I could not care less I say to the Member

for Windsor - Buchans what we have first because either way the government

cannot win. Either way the government cannot win because if you go without a

Budget no one is going to trust you. I say to the Member for Bonavista South who

is over there laughing that he was not laughing last week in Clarenville Monday

night or whenever it was. He was not laughing and a lot of members opposite were

not laughing. There was no laughter last night out in Conception Bay, no

laughter when the Minister of Environment and Lands in reacting to what

government would do said that if employees at the Waterford Hospital stole less

food the government might not be in such a serious financial situation.

AN HON. MEMBER: And she talked about crossing the House.

MR. MATTHEWS: Yes, she did at the teacher's meeting in

CBS. She said if there was not so much stealing of food at the Waterford

Hospital, I say to members.

MR. TOBIN: It's been on the radio all morning.

MR. MATTHEWS: Yes. I do not know what kind of stress the

poor lady was under, but it was something.

AN HON. MEMBER: Remember when she said she thought about

crossing the House?

MR. MATTHEWS: Oh, she thought of crossing the House, yes.

MR. TOBIN: Every day she thinks about that.

MR. MATTHEWS: She thinks about that every day.

What a letdown to have a former President of the - two of

them here in this Legislature, and to sit there this morning and delight in the

actions they have taken again. They are so delighted that they did not roll back

the wages of public servants. They are so delighted that they did not roll back

the wages of public servants - not that they gave them a two, three, four, or

five per cent increase - they did not roll them back; and they are elated. After

freezing their wages for two years in a row with Bills 16 and 17, they are

delighted they did not roll back their wages this morning. What does that tell

you about this government? What does that tell you about this government, that

you would be delighted that you did not roll back their wages?

AN HON. MEMBER: (Inaudible) incompetent.

MR. MATTHEWS: What incompetence! What have you come down

to? What have the people of this Province - it is unbelievable.

AN HON. MEMBER: (Inaudible).

MR. MATTHEWS: Two per cent rollback on all take home pay.

That is about what it amounts to. That is what they announced this morning.

MR. TOBIN: Anybody who pays income tax.

MR. MATTHEWS: Of course, those paying income tax -

MR. TOBIN: Their take home cheques (inaudible).

MR. MATTHEWS: Their take home cheques will be reduced by

2 per cent as a result of the announcements of the Minister of Finance this

morning, and members opposite are absolutely delighted - absolutely delighted -

and they are nodding their heads.

AN HON. MEMBER: When they get their cheques (inaudible).

MR. MATTHEWS: Of course their cheques are going to be cut

too. They will not be so happy about that, I suppose.

AN HON. MEMBER: (Inaudible).

MR. MATTHEWS: The fiscal direction of this administration

has not worked. The fiscal policies of the Wells' administration has been

counterproductive. Our provincial economy has continued to shrink since they

have come to office. No one can deny that.

The actions that they have taken with laying off 2,500 to

3,000 public servants, by drastic tax increases, has not improved one iota the

bottom line, the financial position of this Province. No one opposite can deny

that. The financial position of this Province has worsened annually since this

administration took office - very counterproductive. They have shrunk the

economy every year. They have inflicted additional shrinkage in our economy.

This morning they go and announce, on top of a 1.5 per cent

personal income tax increase that was announced in the last Budget, they are now

adding another 3 per cent, so the personal income taxes are going up by 4.5 per

cent in January, and members opposite honestly think this is going to help the

economy and the financial position of this Province? It is going to worsen the

situation, I say to the former Minister of Finance who always sings out: What

would you do? I would not do what he did, I tell you that, because he put us in

the state we are in.

Mr. Speaker, as the Member for Mount Pearl said when he

reacted to the statement, the 5 per cent reduction in the compensation packages

- what does that mean? Does that mean there is an increase?

MR. TOBIN: Free collective bargaining.

MR. MATTHEWS: Free collective bargaining, but he

announces a 5 per cent reduction in the compensation packages. So what is this

free collective bargaining? Is he going to call them in and say: You have to

take a 5 per cent reduction. We ask you to take a 5 per cent reduction in your

compensation package. Is that free collective bargaining? They are going to

bring them in to discuss this option?

Five per cent reduction in compensation packages, coupled

with 4.5 per cent increase in personal income tax, and what are you doing to the

people? Are there going to be more dollars to spend in the Province? Is it going

to stimulate the economy? I do not think so.

Members opposite are very, very delighted with all of that -

very, very delighted - but the real crunch will come in the next three or four

months when the government has to bring in a Budget for the fiscal year 1993-94,

facing a $250 million deficit, I say to members opposite. That is when the real

crunch will come. That is when the real story should be told. It has not been

told the last number of years because they have cooked the books; but if they

tell the true story in March, Mr. Speaker, I don't think there'll be too many

laughing faces on the other side. There won't be too many smiling faces in the

Province.

AN HON. MEMBER: (Inaudible) the story if there's an

election called.

MR. MATTHEWS: Yes, I say to the Member for Windsor -

Buchans, I can't wait for that day. I really can't wait for the day. I'll tell

you something right now, it's only within the last two hours that the minister

has behaved that way because for the last three weeks - I can't describe how the

minister has been because it wouldn't be parliamentary. What's been happening

inside of his intestines and his system. It wouldn't be parliamentary for me to

describe the state that he's been in the last three or four weeks, along with a

lot of other members opposite. He has been... I can't say it, Mr. Speaker. It'd

be unparliamentary and be a bit disgusting.

That's what's gone over there. It's only a show this morning.

Because the writing is on the wall for the administration. The arrogance of the

Minister of Education, 'Mr. Wrecker,' as he's referred to in the teaching

profession across the Province. He was 'Dr. Death' in Health, he's 'Mr. Wrecker'

in Education. The writing is on the wall, I say to members opposite.

AN HON. MEMBER: (Inaudible).

MR. MATTHEWS: Sorry?

AN HON. MEMBER: (Inaudible).

MR. MATTHEWS: Yes, I couldn't use those words. Not even

in private I wouldn't use them.

AN HON. MEMBER: Bill, you're carrying that crowd over

there. I have to admire you (Inaudible).

MR. MATTHEWS: Yes, I don't know. Yes, well, if I'm

carrying this crowd I say to the minister, he's not carrying that crowd. There's

no one carrying that crowd. There's no one carrying it. They're off the tracks,

you're off the rails. You're in deep political trouble. You're floundering now,

coming in with a statement this morning that does not reflect the financial

realities of Newfoundland and Labrador. You're in deep, deep trouble.

It's a nice attempt, I say to the members opposite. A nice

try by the minister this morning. Buy me some time Clyde, said Wins. I'm in deep

trouble. There's been a significant shift in public opinion in the Province. I'm

in deep trouble. Now buy me some time. They bought some time. They know they

were headed for a very serious collision with the public service unions in the

Province. There's no doubt about that. Everyone knew that. Members opposite knew

it. That's why they put the pressure on the Cabinet ministers to resolve and try

to come through with this statement this morning to buy time. To buy time, I say

to the minister. That's all that's happened this morning. Buying time.

Having said that, with buying time you have really rolled

them back this morning. You've rolled everyone back this morning. Froze their

wages and increased their taxes. What does that do to their buying power, I ask

members opposite? Are they going to be better off because of the statement this

morning? No wage increase and the personal income tax is being increased 4.5 per

cent in January.

I can't be proud of that. I'm relieved there wasn't a wage

rollback, very relieved. But I can' be very proud that the people of this

Province who are lucky enough to have a job and earning will be paying another

4.5 per cent personal income tax in January. I think that's very

counter-productive. I think it's going to worsen the coffers of the Province, I

say to members opposite.

My time is up, Mr. Speaker. I look forward to hearing debate

by other members.

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

SOME HON. MEMBERS: Hear, hear!

MR. K. AYLWARD: Mr. Speaker, so far the best Opposition

speech this morning has come from the NDP member. I have to tell you. The real

Opposition spoke this morning and gave some credible arguments, credible

suggestions; I'm giving the other Opposition the benefit of the doubt. Because

I'm sure that during the course of the debate they will tell us how they would

have handled this problem. I am sure that they are going to come in here and

tell us how they would have handled this problem.

What's strange is that the federal minister representing

Newfoundland up in Ottawa is not telling this government that it needs to clean

up its act. But I'll guarantee you one thing, back a few years ago he was

telling another government to clean up its act. When it was getting an 8 per

cent increase every year in revenue, and getting increases in transfer payments,

the federal government, and the minister representing the federal government in

this Province, had to come down here and tell the hon. previous, previous

premier, and his Cabinet - many of whom are still opposite here on the front

benches on the other side - that they were spending like gosh knows what, and

that they had no control over their expenditures and didn't care a whole lot.

He had a forty-five minute press conference where he

lambasted the (inaudible) right out of them. Oh yes, it is all here and he goes

on to say how the previous, previous, Premier talked about the Province heading

to ruinous times, heading to depression, heading to the 1930's, and he said

then, their colleague in Ottawa said then, it was their responsibility the way

they were spending their money and the way they did not care about what the

results were and so when Mr. Peckford looked at the books, the real books in

1987, in 1988, what did he do folks? He decided that he had to go, he had to

leave and the reason he had to leave -

AN HON. MEMBER: He was not ruthless enough.

MR. K. AYLWARD: - that is right, he was not ruthless

enough but you know that was not the word. The word was to have the courage to

deal with the mess, the financial mess that they had created themselves for the

most part, and that was the problem folks, that was the problem. The Member for

Grand Bank and the Opposition House Leader just said a few minutes ago, he said

- and he forgot when he said it because when the words came out he all of a

sudden remembered, he said: this government will not have the fortitude to go

with a Budget before the next election. Well guess what folks, do you remember

1989, remember 1989 when they had their leadership and everybody was running

around trying to figure out who was going to be the leader and then when they

figured that out - when did they have the election? I think it was May month or

April. April month it was, they called it in April. Did they have a Budget? No.

You know why they did not have a Budget?... because of all the bad news that was

going to come down and they did not want to tell the people the truth. They did

not open the House that Fall. The House had not even been opened for about

twelve months.

Here we were, they went to the people, now he is over there

telling us that we do not have the fortitude. Well I have to tell you, Mr.

Speaker, the statement made this morning by the Minister of Finance certainly

shows fortitude. It shows a lot of other things too. It shows that this

government wants to let people know out there what the truth is about what is

there in the books and how we are going to try and resolve it. It throws out an

olive branch it says: work with us to do it. And it throws an olive branch to

the people in the labour movement and it throws an olive branch to people in the

business environment in this Province and I am proud of the statement today. I

am sure that the Minister of Finance and the Treasury Board Minister combined

are going to work hard with this government in Cabinet to ensure that these

problems get resolved. But you know the confidence factor is there, Mr. Speaker,

because you see, you are dealing with it up front. When I hear the Opposition,

what I say to them is this: I am looking forward to hearing what they would do

in these circumstances because we know what they did and we have a lot of

examples of what they did, Mr. Speaker, I have many of them here as a matter of

fact. I went back and did a bit more research because -

MR. GOVER: They never had zero, zero.

MR. K. AYLWARD: Well, I have to correct the Minister of

Works, Services and Transportation, they did have zero and zero and of course

they say though they allowed the collective bargaining process to survive. Well,

you know, I went back and checked that too.

MR. GOVER: Did you?

MR. K. AYLWARD: Oh yes, and you know the strangest thing

about that of course, is what they did was, they went to Cabinet and they said:

well folks, we cannot afford to pay any wage increases, so let us decide to give

them zero and zero. So, then they had a press conference and they announced:

this is what you are getting zero and zero, then they said go collective

bargaining. Now that is collective bargaining, that is a different definition I

suppose, I suppose that is what it is. That is what they did but understand that

when they did it the environment then, there was an increase in transfer

payments, there was an increase in revenue for the Government of Newfoundland at

that time, in the mid-eighties. They brought in these measures, zero, zero with

three-two in different wage restraint programs when they had more revenue and

way more revenue than we have.

It is unfortunate because if they are going to be credible in

their criticism of this government they should be credible. They should be

bringing in things and saying here is how we would handle it and you have not

done it folks, you have not done it yet. The NDP member for the Opposition over

there, I mean he has done a superb job this morning, as in most cases, most

parts - responsible. The Member for Mount Pearl, who was a former Minister of

Finance and a former Minister of Treasury Board got up this morning, I suppose

he called it night instead of day, in the morning, I suppose that is the way it

looked after he read the statement. You know the thing was, he never said one

thing there, he never said a thing, he never said: way to go government. At

least he could have said: government you dealt with this in a fairly responsible

manner. That is what he should have said. Now he can lambast us for other

things, no problem with that, but I mean he never said, for a person who was in

a provincial Cabinet in a previous government, you would think, having had to

make tough decisions before that he certainly would have had some responsible

criticism of how to resolve this problem. I mean did he say to us: go borrow

more money? I did not hear him say that, of course he cannot say that because he

knows the difference. Did he say cut programs? No, he did not say that but yet

he is saying it on the other hand because how are you going to resolve the

problem?

What else did he say? I can't remember. Because most of it

was loud and most of it had no detail. Not a constructive criticism whatsoever.

He asked us to reduce some business taxes. We have. Where's the pat on the back?

Well, I pat the Minister of Finance on the back and the Government of

Newfoundland and Labrador today.

AN HON. MEMBER: He asked us not to roll back wages.

MR. K. AYLWARD: He asked us not to roll back wages. We

didn't do that. Now the Ontario government, gosh knows what they're going to do.

They have a problem too like every other provincial government in Canada.

AN HON. MEMBER: They borrowed heavily.

MR. K. AYLWARD: They're borrowing major heavily, and

causing some problems for our own economy here. Because we've got to hope - I

mean, here I am, when I go to bed at night sometimes I say to myself: Bob Rae,

do the best you can. Because the better you do right now that'll help us in

Newfoundland because of transfer payments. I know it's an unfortunate position

for our Province to be in, but we inherited that problem, and we're trying to

resolve it.

Here we have been, we've been trying to resolve this problem

with less revenue from the federal government than we got four years ago. Less.

It's hard to believe and fathom that that's the case. That we've been trying to

deal with the problem, pay wages to all our workers, keep a level of service

that is acceptable to the people, but yet with revenue that we expected to have

and we don't have now. That's a significant thing for people to understand.

We're not like the mid-eighties, or the 'eighties. We don't

have increasing revenues. We're working on doing that. What I'm amazed at, Mr.

Speaker, when we do get our revenue back on track and when the federal

government, and we get better transfer payments when the national recession

ends, imagine what this government's going to be able to do with a few more

dollars, I say to the Minister of Health, and the Minister of Education, and the

other ministers of the Cabinet.

We've made health care reform in very difficult times. Saved

a lot of money. We've got the health care - the administrators out there are

right on side.

AN HON. MEMBER: (Inaudible) better system than we ever

had.

MR. K. AYLWARD: And a system very effective. We're

looking at more reforms. The people out there are understanding. They're

starting to say - they understand. But they also know we have a financial

problem. They also understand one thing else, though. That when this government

works itself out of the recession, along with all the other provinces and the

Canadian government, what are we going to be able to do then, Mr. Speaker?

I'll tell you one thing we're not going to do. We're going to

attempt to keep that debt down and pay it down, even when we get into good

times. We're going to pay that debt down. Because some day down the road

somebody is going to have to pay for it. The day has got to come to a - right

now it's coming at us really hard, as every other government, and as the federal

government. As the federal Minister of Finance said the other day, Mazankowski,

that the credit card limit is at its limit. That's what he said. The credit card

limit is at its limit and he can't go and get any more. That's where we're to,

that's where we're at.

So we've got to live within our means. We've got to try to

correct the things that have been done in the past and work to make

improvements. The only thing is, if we're going to get, like I said, we'd like

to get some good suggestions from the opposite side. It'd be a pleasure to hear

them. With the major expertise that we have in the Opposition, from being in

former, former Cabinets, you would think, and I hope and I know we will, get

some positive suggestions. We've taken some of their suggestions already and

we've incorporated them in.

I'm sure that you're going to give us some very positive

suggestions, the Member for Kilbride, who was a former Cabinet minister,

involved in the many decisions of the former, former government, many of the

decisions. Many of the zero-and-zero wage increase decisions, and many of the

other decisions that they made, and was in the Cabinet that was told off by the

hon. John Crosbie, the federal minister, back a few years ago. You weren't

taking care of the shop then. So the front bench over there, they know what it's

like to be in government.

The problem is, when you look back and see what they did in

the mid-eighties, about restraint and so on, and laying off people and all this,

that was when they had more revenue coming in, the economy itself was, I

mean.... What would they do now, is my question? What would they have done today

is the question that we should be asking people out there.

SOME HON. MEMBERS: (Inaudible).

MR. K. AYLWARD: They'd sell the shop, oh yes. I've heard

that phrase before. That's the question. People have to look and ask: what would

happen if they were there? We all know what happened. They wouldn't even have a

budget before the election the last time. Didn't even open the House. Fall

sessions were non-existent, as a matter of fact. That was democracy for you.

Legislative committees, didn't know they existed. Who brought them in? This

government. Trying to give legislative reform.

So you know, I find it a bit amazing. I think that's why most

of them are out of the House right now, and are going to be out of the House for

the next few days, as a matter of fact. Because they can't face us over here.

They can't face us because they know. They're saying: how did this government

manage to come up with a plan like this and deal with this crisis and problem,

and most of it not even of their making, as a matter of fact. It's amazing, as a

matter of fact. I have to commend the Cabinet and the Minister of Finance.

Because it's been number one.

I looked at the economic statement of the federal government.

They've got a major problem too, no doubt about it. When I hear the Opposition

talk about our miscalculations on our provincial deficit, the federal minister,

their colleague in Ottawa, how much was he off?

MR. GOVER: Seven billion.

MR. K. AYLWARD: Anybody know?

MR. GOVER: Seven billion.

MR. K. AYLWARD: Seven billion at last count, and he's

projecting that he's going to be off by ten next year. I tell you, that's

mathematics. I'll guarantee you. You talk about credible criticism? It is

unreal, Mr. Speaker.

This government is trying to deal with a problem. It is

dealing with it responsibly, and it's going to keep dealing with it as it can,

but being straight with the people. We've got a problem here that when you're

elected as a government you hope you never have to deal with. But we can't pick

and choose any more. It's like Roy Romanow in Saskatchewan. He's facing a

gigantic financial crisis up there and he's not blaming it on everybody. He's

saying: we have to deal with the problem. So that means that the Opposition, who

created a lot of the problem we have right now, should start

being more responsible about their comments.

MR. GOVER: Where's their plan?

MR. K. AYLWARD: Their plan is the question. Where is the

plan? I haven't seen one yet. I'm looking forward to seeing the highlights of it

so that we can probably incorporate that in the new Budget when we bring it in

in the Spring. I'm sure the Premier will listen to the Opposition as he has in

the past, and all the Cabinet. Looking forward to the -

AN HON. MEMBER: Hear them!

MR. K. AYLWARD: Hear them, yes, that's right. Listen to -

well, hear them, yes and whatever. Whether or not we take their advice is

another question.

SOME HON. MEMBERS: (Inaudible).

MR. K. AYLWARD: That's right. The good parts of their

advice. We did, and we have in the past, as a matter of fact. So we're trying to

be sensitive to that. I say to them: be credible in the criticism. People out

there - you say they might not have - some people have short memories. But we're

going to remind people - I'm going to remind them, I tell you that, about what

we've inherited and how we've been trying to deal with it, and also that we

didn't bring in the GST, by the way. We didn't bring it in in the middle of a

recession. We're not responsible for that. That's had an impact on all of us,

every provincial government. It's impacted on our provincial sales tax revenues,

which we're responsible for. We didn't bring that in.

Now it's in there so we have to live with it. But you have to

admit, you didn't have to deal with that when you were a provincial government

and you had to bring in your budgets. You didn't have to deal with it. So we

have to deal with that. I think it was a mistake that they brought it in at the

time they did and I would hope the federal government, the federal minister,

will see what he can do to lower that tax or do something with it to help

address the consumer spending and so on in Canada.

Again, Mr. Speaker, we're working on the problems. We've got

a way to go, but at least we have some direction laid down. I believe that the

public sector unions and the leadership there are going to be very responsible

in dealing with the changes that we have to try to deal with. To deal with the

Budget that we have to deal with. This is a public document. Anybody can look at

this and figure it out. It's not a closed book that you can't have access to.

Everybody can see it, everybody can understand it.

It's a matter though, I suppose, if you want to close your

eyes and not think about it. I think that everybody has to understand the

position that the government is in, and understand that we're going to work

together with people. That's the thing. Work together with people. Ask everybody

to help us out. Look at different ideas. Employees, give us ideas. Public sector

employees, give us ideas about how to save money, how to deal with the problem

that is now facing not just this government. We're not the only government.

We're not like - we're surrounded by other provincial governments that are out

there having major successes. They're out there with major gigantic deficit

problems. I'll be surprised - I'm looking forward to seeing the measures that

other governments are going to take.

I tell you this, that I pretty well know now that a lot of

them are not going to be as confident as we've dealt with this. Not going to be

as competent. The measures (Inaudible) won't be as competent. Considering the

leverage and the leeway that we've had in our borrowing capacities, with our

debt levels as high as they are, I'm amazed at the government that they've been

able to bring in this statement today the way they have, and to deal with it in

such a responsible manner.

I'm amazed and I give full credit to government on that. I'm

looking forward to seeing now people look and say: the government is listening

to the people. The government listened to the people, and they continue to do

so. I think that's another thing that people will understand today when they see

that. Government doesn't want to inflict on people; government wants to help

people. This government is trying to do that and is going to do it responsibly,

and do it as best it can. Given, like I said, the parameters that it has.

Understand, if there are alternatives to what we're

attempting to do then the Opposition should say it. They should say how they

would do it. They have done budgets before; they are not like the NDP in the

Province who have never been in government, they are not like other parties who

have never been in government, they have been there so they know what it is

like. I mean, they knew what it was like in '87 when they were saying that it

was just about all over and John Collins, the former Minister of Finance, was

saying: you know, if we do not get $45 million from the federal government, we

will have to shut down everything we have. That was back then, when revenues

were up but you know, the problem was the spending was up and what do we have to

do now?

Our revenues are down because of a world-wide recession,

national recession and here we are, we have all of the operations that were

expanded, we have to try and keep them alive and it is a tough job. That is not

easy and I think that the Opposition members understand that and if they were in

our position, they would be in the same boat, Mr. Speaker, and they would be

trying to figure it out and trying to deal with it. Now the other thing is, what

I say to the members of the Opposition, is that they are in the same boat, Mr.

Speaker, because we are all in the same boat in this Province and we had better

figure it out and we had better work together to figure it out and we are going

to do that.

Now whether or not they will is another question and I think

though that the measures that are outlined today have been very good. I think

that considering the leverage that we have, considering the times that we are

in, that the measures brought in have been very positive and I think will help

stimulate some economics, stimulate some business but will also send the message

that we are trying to deal with this with compassion, deal with the problem and

bring about a recovery in this Province as fast as we can.

Now if you look across Canada, Mr. Speaker, we have dealt

with the recession probably as good or better than any province in Canada and

that is a fact. That is a fact that is recognized by most of the business

agencies out there who study this, the economists and so on, but our problem is,

that because the other major provinces have not had good years recently, that

their revenues have been down, therefore their revenues are down and our

revenues are down because of the transfer situation. Our transfers, because

other economies have not done as well or tried to deal with this recession, they

haven't, and so I think we have a hope that the federal government has its

strategy worked out and that it is going to be okay and that we see some action

in the future.

It has been a very difficult process for government in

dealing with these economic times, I have to tell you, it has been very

difficult -

AN HON. MEMBER: And you commend government all

(inaudible).

MR. K. AYLWARD: I do. I very much so commend the

government for what it has done and as you know, government is now looking at

the whole range of measures to deal with - we are looking at government in

education, we are looking at some changes there with the Minister of Education -

AN HON. MEMBER: (Inaudible).

MR. K. AYLWARD: Well, that is what we hope, we hope. That

is exactly what we are saying today, let us work together, let us work together.

Yes, you may criticize us but let us work together because we need you in this

Province, and I am sure that the educational changes that will come with

consultation that you know - I had a meeting with the Minister of Education the

other day with my school board officials, they were delighted with the openness

and the consultative process that the minister has ongoing. They could not

believe it; they said t