PROVINCE OF NEWFOUNDLAND AND LABRADOR HOUSE OF ASSEMBLY Volume 1 Number 63 4th. Session 34th. General Assembly VERBATIM REPORT TUESDAY, MAY 12, 1970 SPEAKER: THE HONOURABLE ~EORGE W. CLARKE

May 12, 1970 Tape 6840 Page 1 The House met at 10:30 A.M. MR. SPEAKER: Order! Presenting Petitions: MR. U. STRICKLAND: I beg leave to present a petition, which has been signed by exactly 1,000 residents who live in the area from Heart's Desire East to and including Red Cove.

Not only has this petition been signed by 1,000 residents Sir, but it has been endorsed by no less than eight or ten business interests who carry on their business both in the district represented in this House by the hon. the Speaker, the bon. the Minister of Municipal Affairs, and the hon. the member for Harbour Grace, the hon. member for Bay de Verde.

The prayer of the petition is that, and I am glad that the Minister of Highways has already indicated from this House, or in this Hbuse that part of the prayer of this petition will be granted because they are praying that the road from Heart's Content to Victoria would be upgraded and paved this year. That is only part of the petition Sir. The rest of the petition covers the road from Winterton East to Old Perlican, and part of that road is included in the district represented by my hon. friend the member for Bay de Verde.

The petition points out Sir, that in 1967 a reputable group of citizens gathered information relating to local production from business firms in the area, and the information revealed that in 1966 $1.25 million was paid by those firms for local produce and labour. And since that time a new industry has been started in the area, which at this date, and I checked on this on Saturday, has 200 employees engaged at processing in addition to those engaged in production.

But Sir, the petitioners also point out that if the industry in the area is to survive, then the roads in the area must be upgraded and paved, because the conditions of these roads is a handicap.to production in industry, and the petitioners feel that the condition is unjustified having regard to the best interest of the whole Province. The petitioners are praying Sir, that both the road from Heart's Content a~d Victoria, as well as the road from Winterton, Lhrough to Old PPrlican should be upgraded and paved without further delay. 3874

May 12, 1970 Tape 0840 Page 2 As I said Sir, signed by 1,000 residents and endorsed by several business interests, who do business in that whole area. I heartily support the prayer of this petition Sir, and beg leave to lay it on the Table of the House and have it referred to the Department to which it relates, which of course is, in this instance, the Department of Highways. MR. SPEAKER: It is moved and seconded that this petition be received and referred to the department to which it relates. MR. WILLIAM SAUNDERS: Mr.

Speaker, I wholeheartedly support that petitioe as the bon. member for Trinity South said, part of the petition concerns the district of Bay de Verde which goes towards Old Perlican, but sometimes they do not realize that the center of the Heart's Content bounds where the line is drawn is a mile and three quarters in the Bay de Verde district. So it is Trinity South on one end and Carbonear on the other, right in the center of Heart's Content bounds is a little spot there, it gets rubbed into me once in awhile that it is the Bay de Verde district. Mr.

Speaker, in supporting this petition, you have to live in your district to realize how important this road is. As all this past winter it has kept the plant at Carbonear going with their longliners fishing from Heart's Content and New Perlican, going down to Cape Bonavista and that area, bringing their fish over to Heart's Content and trucking it across the barrens. It has iept 100 men going working all this winter, that road has. So I have much pleasure Mr. Speaker, in supporting the petition on behalf of the district of Bay de Verde and the town that I live in. HON. E. N.

DAWE (Minister of Municipal Affairs:) Mr. Speaker, I would like to rise and add my support to this petition. I do so mainly because as indicated by the bon. member for Trinity South, that he has support from various business people from my particular district, and I would like to point out to the House that I estimate that we have at least 100 various sized trucks delivering various supplies, and the products for this area of Trinity Bay - they are operating out of Cupids, Clarke's Beach and Bay Roberts.

And .as well we have large quantities of coal and r1~her1 salt delivered to this part of Trinity Bay, and they are in 3875

Hay 12, 1970 Tape 0840 Page 3 constant use of this road, and we have a ready mix concrete plant at Makinson&, and they deliver ready mix concrete to this general area as well, and I am sure that I speak on their behalf, that if this road would be paved it would be a blessing to them and it would naturally reduce the maintenance on their trucks, and I have much pleasure in lending my support to this petition. MR. A. H. MURPHY (Leader of ·the Opposition): Hr.

Speaker, I too would like to add my support to the petition, not being as much aware perhaps of the problem as the members are, but anybody who has driven around the area and see the condition of the road and so on and so forth, can easily see why those people using heavy trucks, transportating supplies to a very vital area, it is so necessary to have really decent roads in that area. So Hr.

Speaker, I too would like to add my support to that petition because I feel that that particular area is a very, very vital part for employment on the East Coast, and I think it affects not only the immediate areas, but I think it has a great effect on the other parts of St. John's and so forth. And I am very happy to support the petition. HR. J. C. CROSBIE: Hr. Speaker, we would like to support the prayer in this petition. It is essential that the roads in question be reconstructed and paved and not just for purposes of distribution of goods around those districts, but because of the fish plants in the area.

And of the important economic activities that take place in all those areas. They need good roads to truck fish, as well as supplies, and for ordinary communications. Now Mr. Speaker, in a statement made by the Minister of Highways in this House, I think some ten or twelve days ago, he outlined that there was some work to be done on these roads under that program this year. The Minister of Highways did not give any estimate of what the cost of this great program of his is going to be.

And one is led to suspect that some­ one thing may be amiss when sees that the estimates of his department are $10 million lower this year, than they were last year. So how the 3876

May 12, 1970 Tape #840 Page 4 Minister can undertake a great road reconstruction of paving program in those circumstances is not clear- presumably when we get to the Estimates, it will be cleared up. These were roads which are not included under the DREE program that the minister outlined there ten or twelve days ago.· But we hope that the minister is going to pave and reconstruct the roads that this petition is concerned about, and we certainly feel that it is necessary both socially and economically. MR. HAROLD STARKES (Minister of Highways): Mr.

Speaker, I would like to assure the House that if this petition is re-ceived and referred to the department to which it relates, as indicated by the hon. member for Trinity South, it will receive very careful and serious consideration. MR. SPEAKER: I do not wish to cut off the debate on this very important petition, but if nobody else wishes to comment or support it, I will be forced to put the motion. It has been moved and seconded that this petition be received and referred to the department to which it relates. Those in favour "aye" contrary "nay" Carried.

ORDERS OF THE DAY On motion that the House go into Committee of the Whole on Supply: (Item 7) HON. J. R. SMALLWOOD (Premier): Mr. Chairman, I have not given any explanation of this amount of $39,500; The Department of Justice had seven. $10,000 of it is accounted for by the fact that we had to do a renovation and refurbishing of two vacant magistrates'residents. One at Harbour Breton and one at St. Anthony, before the appointment of new magistrates to those areas. And secondly, $12,000 to refurbish the office on the top floor of the Court House, the Court House building in St.

John's, so that staff could be relocated within the building. This is a move that was made possible because of the installation of an elevator, a new elevator. And then also at the same time, that amount covered rewiring of the top floor of the library area of the Court House. And then there was $11,000 spent on major repairs and extensive renovation to the Traffic Court in St. John's, to provide additional office space that was needed. 3877

May 12, 1970 Tape #840 Page 5 And finally an amount of $6,500 that was spent to landseape the grounds and pave the lot around the new fire station on Portugal Cove Road. These are the four individual items that make up the $39,500. I move it. MR. CROSBIE: Mr. Chairman, the Items that have been outlined by the bon. •the Premier Mr. Chairman, are all Items that eould have been foreseen before the Estimates were brought into this House last year.

These are all matters that should have been ineluded in the Estimates when they were presented to this House about a year or so ago, and therefore, these are again illustrations of the fact that the Government is not bringing before the House at the time of the ordinary Estimates, aceurate Estimates.

Bottthe Government is bringing before the House Estimates that are artificially reduced by having Items either left out or Items underestimated to the Government's knowledge they are underestimated, because the Government wishes to present a picture when the Budget is brought down, a better picture than the actual fact would indicate. And these items here landscaping the grounds, painting a lot around a new fire station. It was well known last year that that had to be done. Repairs to the Traffic Court.

Expenditures to the top floor of the Court House - those renovations started in the Court House well over a year ago. The ~partment of Justice knew this money had to be spent, and renovations to the vacant magistrates' residents are in the same category. So these are all Items that do not fit within the Parliamentary rule laid down by Beauchesne, . that the~Supplementary Estimate should be for matters that are unforeseen, and could not be foreseen when the ordinary Estimates were presented.

And these Items are again an illustration of the fact that the Government is not observing the proper Parliamentary rule in the matter of Estimates, that the Government is treating this House with contempt when it eomes I to Estimates, secure in the knowledge that with its great majority when Supplementary Supply comes around the following year, the Government has will foree through authorization of what the Government already done through Lieutenant-Governor's w3rrants. Mr. Speaker, in connection with the Magistrate's Courts - the situation in Magistrates' Courts, the 3878

May 12, 1970 Tape #840 Page 6 Minister of Justice might let the House know what progress there has been with reference to the transcribing of evidence taken in the Magis­ trate's Courts outside St. John's. I notice that there has been some recording equipment bought. Is there now in being a system whereby in Magistrates Courts outside St. John's, the evidence is transcribed by recorder or otherwise? MR. SMALLWOOD: Mr. Chairman, to a point of order! The Government are not asking for anything about reporting. There is nothing in the Estimates about that. We are not asking for Supplementa'Y Supply on that.

When we come to the Estimates for the current year, it will doubtless, under the Department of Justice Estimates, be proper to raise tha• question. But where this Supplementary Supply for last year has nothing to do with Courts, or with their reporting of cases. It has to do with repairs made to residences and so on and the top floor of the Court House. MR. CROSBIE: Mr. Chairman, on that point of order.

When the Estimates are presented to the House, the whole management of ··a: department can be discussed in a general way when the Committee of Supply considers the first resolution of the Estimates of the Department. Page

(201) Beauchesne. This is Supplementary Supply. The Items that we are presented with here are Block Items for each department of the Government. We are now dealing with Item

(7) Justice. And it is my submission that we can discuss in this Committee on Supplementary Supply the Department of Justice Estimates for last year. This is a supplement to those Estimates. The amount is not broken down in this Bill under any specific item. There is an amount of $39,500 requested in a Block vote for the Department of Justice. And I therefore submit that we can discuss the Estimates of the Department of Justice last year, and in those Estimates are included amounts having to do with Magis~rates' Courts outside the City of St. John's, the amounts for Legal Aid, or amounts for any number of things, all of which I submit to Your Honour we can discuss now in this Committee 3879

May 12, 1970 Tape 17840 Page 7 of Supply. MR. SMALLWOOD: Mr. Chairman, the opportunity to discuss all these matters lies before the Committee in the House when the Estimates for this year come up. What happened last year, past tense, over, done, gone, dead, canno~ be debated now on Supplementary. But what can be debated is that when the Estimates for this year proposed, asked for by the House, by the Government to be spent this year, to be ob~iously debated. We are asking now to indemnify us for money that the Governor authorized us to spend. To repair certain residences. I give him the detail of it.

The amount in the Bill is $39,500 and I have given the four items that make it up. $10,000 for refurnishing and refurbishing two vacant magistrates' homes. That does not give rise if we can debate that. $12,000 to refur­ bish the offices on the top floor of the eourt House in St. John's. And rewiring the top floor and library area of the Court House in St. John's. Major repairs and extensive renovations to the Traffic Court to provide additional office space. That is $11,000. And $6,500 to landscape the grounds and pave the new lot around the Fire Station on Portugal Cove Road.

Now these are the four Items that make up the $39,000. Surely these can be debated. But not the whole Department of Justice, not the administration of Justice, not the taking of evidence in Courts, surely that is a matter to be debated on in the main Estimates for this year. The Estimates are still before us, and ample opportunity will be provided to the Committee and to the House to debate all these matters. Surely it is completely out of order at this stage. MR. CROSBIE: Mr. Chairman, with reference to the Premier's remarks on this point of order.

What happened last year is not over and done with, gone and finished. The very illustration of the fact that that is not so, is that the Government has got a Bill now before this Committee in connection with an expenditure of $21. million that the Government made last year that was not authorized by this House. So last year's activities are not over and done with and gone. If the Premier's argument was 3830

May ., l2, 1970 Tape #840 Page 8 accepted, then what is the point of having Supplementary Supply at all? A Government can simply go out and spend millions, and hundreds of millions without the authorization of this House, and then when they come back to the House the following year, try and argue that we can debate· nothing in Supplementary Supply except certain Items that they say the money vas spent on. I submit Your Honour and in Committee of Supply we can discuss all of the whole range of the Estimates for last year. MR. SMALLWOOD: Mr.

Chairman, before Your Honour gives a ruling, may I say that I have already made it clear in my own opinion, and I hope in the opinion of everyone in the Committee, including Your Honour, the Items that make up the $39,000 are debatable. And that is all that is debatable . at this stage. When we come to the Estimates of this year, not Supplementary Supply for last year, but the Estimates of expenditure for this year. When we come to that under the various headings, there will be the greatest possible freedom, but even then the rule of relevancy will apply, even then.

But here where we are asking the House to sanction what the Governor did. The Governor sanctioned every dollar of this. The Governor issued his warrant, and on the authority of the Governor's warrant, we spent this money. Now we are asking the House to ratify it. And the debate should be on the Items that we asked for. Not other Items. We are only asking for $39,500 for these four Items. Surely these are debatable and under this Heading nothing else is debatable, especially as the opportunity is lying before us to have a thorough-going debate on every aspect 6f Justice. MR. CROSBIE: Mr.

Chairman, before you make a ruling, there is one statement that cannot be accepted. The Lieutenant-Governor is not responsible for these Lieutenant-Governor's warrants. The Government takes responsibility for the actions of the Lieutenant-Governor. 3831

May 12, 1970, Tape 841, Page 1 -- apb MR. CROSBIE: Should not be put in that position. MR. CIIAIRMA..~: (Noel) : The way I see this is in this light, that if the argument put forward by the hon. gentleman from St. John's West is correct, that this scheducle is simply a continuation of last year's estimates, then if follows t~at the debate should have been on the heading which it was last year, and that the individual items would not be debated. On the argument pu~ forward by the hon. member for St.

John's West, it would be out of order to debate generally the affairs of the department when he had passed the heading itself and we are down to the individual items in these things. So if the committee looked upon this as being simply a continuation of last fear's estimates which was the argument advanced by the hon. member for St. John's West, then it would be out of order to debate the general conduct of the department when we had laready passed the heading and were down to the individual parts put forward. I think that the matter should be dealt with more on the basis of reality rather than argument.

The position the committee finds itself in now is this, it is that the committee is asked to deal with certain particular expenditures which have been incurred. Is that not the position? These expenses have been incurred a~d the only question. the practical question before the committee now is, whether the committee is going to recommend to the House that the sum of $21 million be voted to pay for these expenses which have occured. I really do not see how that brings up any basis for debating the whole operation of the department.

It is common sense as well because, the operation of the department will be debated when the estimates are before the House for the year. It seems to me I might say that it is possible to raise all kinds of arguments in committee here, but these arguments I believe are being raised because members do not really understand that unless there is cooperation, unless there is an adherence to the time and the traditional ways of raising things, we are only going to have delay after delay after delay caused by the fact that members are not following the procedure in the traditional way.

Now when it comes to relevancy, as I said on a previous occasion relevancy is the most difficult decision, the most difficult thing to apply. 3882

May ll, 1970, Tape 841, Page 2 -- apb Members are entitled to speak pn the item before the Chair, but I must rule that the purpose of the cgmmittee is simply to make the decision as to whether or not the recommendation is going to be made that the House vote $21 million for particular purposes and debate must be limited to those particular purposes and the rule, of relevancy will apply. I cannot say any more than that. Shall item (7) carry? t-m. HICKMA..~: On the $10,000. vote for the renovation of two magistrates residences in Harbour Breton and St.

Anthony, this expenditure .: obviously was made necessary as the result of the expansion of the magistrac~_in Newfoundland during the past fiscal year. I use the word expansion advisedly, that may not be the word. The fact is, up until about six or seven years ago at Harbour Breton and St. Anthony were both magisterial districts, and I believe that we must bring the magistrates courts to the people of this Province rather than bringing the people to the courts.

This necessitated the appointment of the two magistrates and an expansion of the magisterial service and the expenditure of $10,000. to renovate their residences. Hhat I would like to know from the hon.

Minister of Justice at this time is, that now that the expansion of the magisterial service has taken place, necessitating this expenditure he is undoubtedly aware of the fact that two of the magistrates, one is going to pension and the other is going to law schol this year, and as the magistrates must go through a period of training before they can accept an assignment and also another relevant fact is that there seems to be a large influx of Newfoundlanders coming back to Newfoundland n~w to practice law, which means lawyers are now available to the magisterial service• could he indicate to the House when appointments will be made to maintain the magisterial services that required this additional expenditure.

MR. SMALLWOOD (J.R.): Mr. Chairman, this vote asks the committee to authorize the Government to spend what it has spent on refurnishing a couple of magistrates houses, that is all it is asking. MR. CROSBIE: Mr. Chairman, the bon. the Premier does not wish to give any information in connection with supplementary supply. There is $10,000. spent 3883

May 12. 1970. Tape 841 1 Page 3 -- apb on the renovations of these magistrates residences. Now the question is are there enough suitable magistrates to fill these residences and the other residences of magistrates that the Government has around the Province. The Premier said that there was $12.000. spent on the top floor of the court house. For what pu,rpose? Whose offices were established there? Who is now using the offices? Surely these are legitimate questions that the Government should be prepared to answer. $12.000. on the top floor of the court house 1 whose offices were renovated?

Who now occupies the offices? What was the purpose of the expenditure? $11.000. on repairs to Traffic Court. St. John's. What kind of repairs? What work was done there? These are all legitimate questions but apparently the bon, the Premier does not want to answer any questions in connection with this money. MR. SMALLWOOD: He does want to answer. He has already answered these very. very. very. very questions. MR. CROSBIE: He has not. MR. SMALLWOOD: This morning, within the last twenty minutes 1 answered. I am not answering them again so there can be no doubt about my willingness to give the information.

The $10,000. the total amount is $39,500. is made up of four items. $10,000. to renovate and refurbish two vacant residences of magistrates. One at Harbour Breton and the other at St. Anthony . That was a total of $10,000. I do not know if that was exactly $5,000. each or $6,000. for one and $4,000. for the other, or $9 1 000. for one and $1,000. for the other, I do not know. I can find out if it is important. Then an additional $12,000. was spent to refurbish the offices on the top floor of the St. John!s Court House building. The top floor, the attic floor. I have worked there myself.

I worked there once for four or five months going through old documents. I am very familiar with it but I have not been there now for twnety-five years. MR. CROSBIE: Whose offices are they? MR. SMALLWOOD: To refurbish the offices on the top floor of the St. John's Court House so that staff could be relocated within the building. Now I do not know what staff they are. They are staff paid for by this Government. 3834

May 12, 1970, Tape 841, Page 4 -- apb Staff could be relocated within the building, something was made possible by the installation of a new elevator. There was a new elevator installed in the court house building. This made it feasible to re-do the upstairs and move some of the staff up there. Their names I do not know, their ages I do not know, their ~ex I do not know, but they were staff and they were moved up to the lop floor. Finally the rewiring of the top floor, and also rewiring of the library area of the court bouse. That is the Law Library I would take it. Now any more detail needed than that?

This is not something we are proposing to do. Remember this is something that has been done and the money has been spent on the authority of Governor's Warrants. Next, major repairs and extensive renovations to the Traffic Court, to provide additional office space required. This was $11,000. Now any more detail than that I do not know but I can always get it. I can get blue prints of the building and table them here in this House if there is any point in it. I can get the name of the people who did it. I can get what wages they were paid. The detail is all there I suppose in the Department of Public Works. MR.

CHALKER: It is MR. SMALLWOOD: It' is. Then finally an amount of $6,500. to landscape the grounds and pave the lot around the new fire station on Portugal Cove and I gave all this before. This is the second time, and yet I am told that I refuse to give information. MR. CROSBIE: Mr. Chairman, the Minister of Justice is in this Legislative Assembly also, so presumably the Premier does not know, the Minister of Justice should know whose offices these are on the top floor of the court house. MR. CURTIS: Ask the hon. member, the former minister. I do not know. MR.

CROSBIE: Or why extra space was needed in the Traffic Court, St. John's, and how many people are now at the Traffic Court. What is the situation at the Traffic Court. These are all legitimate questions. We have heard the Premier say that there was $12,000. spent on offices in the court house and $11,000. Traffic Court, St. John's. We are entitled to ask why. If the Premier cannot answer it he has officials or he has the Minister of Justice whose department it is who should be able to answer it. 3835

May 12, 1970, TApe 841, Page 5 -- apb MR. HICKMAN: Mr. Chairman, at the request of the Minister of Justice I can answer the $12,000. item for the bon. member. The $12,000. covers the installation of the Sheriff's Office, the Sub-Sheriff, the Baliff, the two secretaries and the court reporters consisting of four. That is the total number on th,e top floor of the court house. The $11,000. for major repairs to the Traffic Court I am not able to answer that. It did not to my knowledge take place during my term of office. I do not know anything about the Traffic Court. HR. CURTIS: I do not know anything about it. MR.

MURPHY: Mr. Chairman, just before this is carried. The $12,000. for the court house and the $11,000. for the Traffic Court were these projects carried ou.t by the Department of Public Works or were they done outside and if so we would like to know who did them. MR. CHALKER: Both were done by the Department of Public Works. MR. MURPHY: Public Works themselves. MR. EARLE: Mr. Chairman, I just want to comment on this before it is carried. The bon. member for St.

John's West is absolutely right in assuming that these items could have been forseen, and who should have known better than I as Chairman of the Treasury Board at the time. They should rightfully have been put in the estimates. I heard less than an hour ago a comment on the radio to the effect that truth had perished. Actually truth perished in 1949 and obviously this is manouevring, where these things were left out in a hectic effort to balance the budget. MR. SMALLWOOD: Mr. Chairman, I would like to comment on that. He is completely right.

I leave out the word "hectic'~" It is the duty of the Government to balance the budget and we make every possible attempt to do it, and we succeeded. We set out to balance the budget and we put down on the expenditure side so much money. And on the revenue side our estimate of what that should be and there was a balance.· Now, and we have done the same in the estimates that will come before the committee and the House a little later, thes estimates for this year. We have down estimates of what we propose to spend, the total.

And estimates of what we think we will get and we have balanced with a $1.5 million surplus which Your Honour knows we recently eliminated. All right, it is just 3806

May 12, 1970, Tape 841, Page 6i, apb a balance without any surplus. Now, we will watch it from month to month and week to week. If the thingsthat we wanted to put in on the expenditure side and did not put in during the year we find that the revenue is . more than we expected, then we will spend the money on the things that are not in the estimates. We wanted to put them in the estimates. Last year when the estimates were brought down here, and the Budget Speech, there were many items left out of the expenditure because we did not think we might have the money to pay for it so we whipped it out.

What else would we do? What else would the minister the hon. gentleman who just spoke, who was then the minister, what else would he have done as President of the Treasury Board, as Minister of Finance? What else would he have done in bringing his Budget before this House than other 1r.nis? What else that this? Namely, he would put on the expenditure side only as many items as he thought there would be revenue to pay for.

If during the year after that was done and the House passed the estimates, during the year the revenue was more bouyant than forecast, then we could spend the money that we had not put in the estimates and it will be the same in the present estimates. We ended this past year with a surplus of $2 million. Yet, we spent $7 million more than we had budgeted for. How could we spend $7 million more than we had in the estimates · l ·aat year, and on top of the $7 million more that we spent, have a surplus of $2 million? That is $9 million.

The reason is, that the revenue turned out to be more bouyant than we forecast, than we estimated which is conservative with a small "c", prudent, sensible, level-headed budgeting. That is what was done. My bon. friend brought in a level-headed, sensible budget. He did not put on the expenditure side all these items that are in supplementary supply now, today. He did not put them all in. He thought there might not be enough revenue, so he balanced his budget at $2 million.

O.K., that was the level-headed thing to do, but during the year the revenue was much more than we expected it to be therefore, we could spend those things that we had taken out of the estimates. Budgeting Mr. Chairman. is about ninety per cent or ninety-five - per cent a case of all the Ministers putting in what they want to be put in the estimates. The Treasury Board looks at them, the Minister of Finance looks at 3807

May 12, 1970, Tape 841, Page 7 -- apb them. his officials look at these estimates and he comes to an estimate of what he thinks the revenue might be and he says " well we cannot allow this expense, no we cannot do all this spending, this is out of the question, we cannot spend all this money because there will not be enough revenue to pay for it. We will end ,the year with a deficit. So out it goes. This goes out that goes out, the other thing goes out" and finally he gets it in whack as they say, he gets it in balance. He even budgets to spend a little less than the revenue so that there will be a surplus.

Then as the year comes, the revenue turns out to be better so now we can put back some of the things we had taken out. But when we put them back we have done it after the House closed because the bouyancy of the revenue becomes apparent after the House closes. We will know in the month of August this year, and S~ptember and October and November and December, we will know how the revenue this year is showing up. If it is showing up better than we estimate in the budget, if it shows up better, then we can spend more and still have a surplus. Now that is level-headed, that is good budgeting.

But, you have to come back when you spend more, you cannot spend more without going to the Governor and getting his warrant to do it. But when he gives his warrant to do it, and the House next meets you bring in those expenditures you made that were not authorized in the House in the year before. It is a poor argument to say it is poor budgeting. It is excellent budgeting. It is sound and prudent and level-headed business-like budgeting. Budget only fur those spendings that you think you can meet out of your revenue and do not budget for any more.

Budget for a little less, budget for a balanced budget and a surplus, that is the way to do good budgeting. If the revenue turns out to be better Z.lR. CHAIR}IAN: Order please, I think now I have allowed the bon. ~remier to reply to the remark of the bon. member MR. SHALLWOOD; Exactly, that is what I was doing. I was Z.lR. CHAI~~: I think we are getting a little far away now from Justice. z.m. SMALLWOOD: I think perhaps I have answered his argument adequately and I am very happy to fall in line with Your Honour's suggestion. 3888

Kay 12, 1970, Tape 841, Page 8 -- apb MR. EARLE: Mr. Chairman, this is not an argument, just if I may be permitted to comment on that. I agree with the Premier that the budgeting last year was as good and as efficient as it possibly could be. In fact. it is no credit of mine but a very excellent Treasury Board that helped me and assisted me in doing this. ,l-lhat I am pointing out, and where I agreed with _ the bon. member for St. John's West was that these items were forseen and at times during the year I insisted that the .items should not be spent. because.

I could forsee that we were headed for a deficit and it was only through the most careful budgeting that we came up with a small surplus. This also could have been eliminated if advice had been taken. MR. SHALLWOOD: May I say for the . sake~~~e bon. gentleman, that we did not come up with a small surplus MR. EARLE: $2 million MR. SMALLWOOD: Plus. $2 million plus. Take it from me •••••••••••• 3839

May 12th., 1970 Tape no 842 Page 1 MR. SMALLWOOD: Take it from me. MR. CROSBIE: Mr. Chairman, what the Premier has said is confirmation of what we have said here that the Government pays no attention to Parliamentary control expenditure, that the Government, if it gets extra revenue, it will spend it anyway. This is what he said and come back to the House, and we will have to approve it a year lQter.

The items under the Department of Justice here are all items that the Department of Justice knew a year ago, would have to be spent in the last twelve months, but which were deliberately left out of the estimates, because the Government wanted to make the situation appear better last year than it actually was.

This is not proper budgeting, as Beauchesne says, "when Supplementary Estimates are treated as customary and a matter of course, instead of being restricted to occasions of unforeseen contingencies, then effectual Parliamentary control over spending is gone." That is what is happening here. ' There is no effective Parliamentary control over spending, when the Government does not restrict Supplementary Estimates to the unforeseen, when it treats them as a matter of course, and these are items that the Department year of Justice knew last would have to be spent, but they were deliberately left out of the estimates, and this is not good budgeting.

This means that this House has no control over what the Government is spending. MR. ROBERTS: Mr. Chairman, if I may be permitted to add a word or so both as one who has listened with a great deal of interest and as one who worked with my former colleague, the member for the district of Fortune, quite intimately, throughout~ the budgeting process. The facts just put, as the basis for the argument by the member for St. John's, are correct, but his deductions and conclusions, I suggest, are quite incorrect. The reality of the proposal is this: that each year, we have to cut the garment to fit the cloth, and we do.

That means that we have a 3890

May 12th., 1970 Tape no. 842 Page 2 a great number of pro~ects that we should do. Each of those items, Mr. Chairman, should be done, and we rate them on our priorities as to what we should and should not do. Then if the revenue turns out to be a _-,. little more buoyant than we estimated, we are able to look at some of these expenditures and they come back to Treasury Board and through the Cabinet and if they are approved, the money is spent. If we do not get the money, Mr. Chairman, we do without. We just do without.

It is that simple, and when we come to the later heads, we will~see some of the items that we have done without. Now the only way the hon. gentleman from St. John's West has a valid point is as if the Government were to come in and table two sets of estimates. One would be the estimates that we are asking the House to give us authority to spend. The second would be the items that we would like to spend, on which we would like to spend money, if we get more money. Mr. Chairman, to say that there is no Parliamentary control is completely wrong. The entire Government are here.

The hon. gentleman has twenty-five per cent of his party and another twenty-five is just standing outside having a cigarette. The entire Government are represented here. Well over twenty-five per cent of our membership are here. We are here in Parliament, Mr. Chairman, going through a process that·is the very essence of Parliamentary control. It will carry on until the House is satisfied. When the House is satisfied, they will either give us authority to spend this money or not. If they do, so be it. If they do again not, so be it and thatois Parliamentary control, Sir. _MR. HICKMAN: Mr.

Chairman, I commend you for your latitude in permitting this debate, and I think it is quite proper, but I think it has to be bourne in mind that in effect a Supplementary Bill is a new budget. I would direct your Honour's ittention to Beauchesne which reads as follows 3801

May 12th.' 1970 Tape no 842 Page 3 and it is very significant to this debate and to the remainder of the debate on this Bill: "The introduction of Supplementary Estimates of any considerable amount is really a breach of contract between the Government and Parliament, for when this is done . the budget statement is destroyed, and in effect the Supplementary bdget is set up •. " in MR. SMALL~D: Read the sentence between those - cwo sentences. MR. HICKMAN: "For when this is done, the budget statement is destroyed." MR. SMALLWOOD: Read the whole section. HR. HICKMAN: Oh! I will read it again, very carefully. MR.

SMALLWOOD: Do not leave out that essential sentence. MR. HICKMAN: I did;,not leave ••• MR. SMALLWOOD: I will quote it from memory •• MR. HICKMAN: I did not leave out one word. It is on page (202) of Beauchesne •• MR. SMALLWOOD: Not one word. He does not leave out one word. _!fil., HIC~ Not a word. MR. CROSBIE: Not a word. MR.

HICIQ-{.AN: ''The introduction of Supplementary estimates of any considerable amount is really a breach of contract between the Government and Parliament, for when this is done the budget statement is destroyed, and in effect a Supplementary budget is set up." Not a word, not a cormna, not a punctuation mark left out and what I say, Mr.

Ch~irman, is what we have been trying to say here for the last several hours that Supplementary Supply is, in effect, a debat~ on a new budget and this is why your Honour is right to permit this latitude and to permit this laxity and to permit a debate on the general financial position of the Province. So it is not simply •• Mi. CHAI~.AN: Order please. As I take it now the argument being advanced 3892

May 12th., 1910 Tape no 842 Page 4 by certain members is, that the sum of $39,500 for Justice ought not to be voted, because it could be anticipated. The Chair is not permitting any general debate on the financial position of this Province or anything else; simply on the one point. As I understand it , the argument before the floor now is that the sum of $39,500 ought not to be voted, because the expenditure could have been anticipated. That is the relevancy here. MR. SMALLWOOD: The answer to th~t, Mr. Chairman, is in the quotation from Beauchesne which my bon. friend did not read.

I will read it, page (202) and the citation is 240. "It is extremely difficult to make a close forecast of the amount which will have to be pro~ided." Now that is the part that was left out. That was the one that was left out. That is the very essential sentence that was left out of the citation. It is extremely difficult, in fact, Mr. Chairman, it might almost be put far more forcedly. It is impossible but certainly it is extremely to difficult to make a close forecast of the amount which will have to be provided. We know from experience that it is not only extremely difficult, it is quite impossible to do it.

MR. EROSBIE: Mr. Chairman, here is the whole paragraph, Supplementary estimates, as I referred to befpre. ~et us have the whole paragraph. This is what Beauchesne says: "Supplementary estimates, when treated as customary and as a matter of coarse, which is how this Government treats them •• MR. ROWE (F.W.): Are we on a point of order. Are we on a point of order Mr. Chairman1 There are two questions I would like to answer your Honour. Are we on a point of order? If not, then what is my bon. friend doing. We are supposed to be on a single item, are we not? MR. CROSBIE: On that point of order, Mr.

Chairman, I am putting it forward , 38&3

May 12th •• 1970 Tape no 842 Paee 5 the proposition that this $39,500 under the Department of Justice estimates, are for items that were customary and as a matter of course and which the department knew last year must be spent in any event and that the proper rule is that Supplementary estimates, when treated as customary and as a matter of course and that is these items here, instead of being restricted to occasion of unforeseen contingencies, these were not unforeseen contingencies.

The Department of Justice knew last year that the money had to be spent this year, that the fire station constructed out on the Portugal Cove Rd had to be landscaped and paved. They knew that. They knew that the traffic court had to have repairs. They knew that the top floor of the court house had to be finished - the work was started. They knew that 'f: HtY~ thereAtwo magistrates -one going to Harbour Breton - and one going to the other place and that their residences had to be renovated ~ · They knew that. These were not unforeseen contingencies.

The Government treating this as customary in the matter of course to follow Beauchesne does more to destroy effectual Parliamentary control than any other indirect method that could be devised. That is the principle. And Beauchesne goes on~ "they are,however, for one service or another annually recurring necessities. They may be presented either (1) for a further grant to a service already sanctioned and voted for or (2) for a grant for a further occasion of expenditure arising where the estimates were presented. (

a) For expenditure and newly imposed on the executive by statute, (

b) To such an unexpected emergency." These are not matters of unexpected emergency. He then goes on to say -· t9-at .. L:_.:"it is extremely difficult to make a close forecast of the amount which will have to be provided. The introduction of Supplementary estimates of any considerable amount is really a breach of contract between the Government and Parliament, for when this is done the bud~et statement is destroyed , and in effect the Supplementary budret is set up." That 3894

May 12th., 1970 Tape no 842 Page 6 is what happened last year, Mr. Speaker, and that is what happened the year before and the year before that. The increased revenue has nothing to do with it. In 1967, the Government spent $53 million in Supplementary Supply and in 1968, $54 million and the Government never had increased revenue in those years of $30 million or $40 million or $50 million - increased revenue has nothing to do with it.

This is deliberately omitting from the estimates items that the Government knows have:to be spent during the year to make the budget look better, when the budget is delivered and the same process is happening this year. MR. ROWE (F.W.): On a point of order, Mr. Chairman. I would like your honour's ruling on this. How many times are we going to have to listen to that read outl This is about five times I have heard it since we started Supplementary Supply last night.

The other question I would like to direct to your Honour is, when Interim Supply was brought in here, certain members on the other side attempted to have a general budget debate on Interim Supply. Now they are attempting to have another general budget debate on the grounds that this is something unusual apparently or something is out of order or something that is uncalled for. The fact of the matter is, Mr. Chairman, that for twenty years, we have done this and for twenty years and more, every government across Canada bas done it and every government in the democratic world has done it.

There is nothing heinous about it. There is nothing unusual about it. There is nothing underhanded about it. No government attempts to predict, to anticipate to the letter or to the million dollars what the expenditure is going to be and here we are now being subject to this repetitious, opstructionism - that is all it is, Mr. Chairman, obstructionism •• MR. CROSBIE: Mr. Chairman •• ~· ROWE ( . F.W.): Here, obstructionism •• 38&5

May 12th., 1970 Tape no 842 Page 7 MR. CROSBIE: Mr. Chairman, what is the gentleman's point of order, Mr. Chairman? MR. ROWE (F.W.): May I finish the point of order~ MR. CROSBIE: There is no point of order here. The gentleman is making a speech, not a point of order. MR. SHALLWOOD: Sit down, you are out of order. There cannot be two points of order. MR. CROSBIE: The gentleman is making a speech not a point of order. MR. SMALLWOOD: There canno~ be two points of order. There is one here now. MR. CHAIRMAN: Order please! MR. CROSBIE: There is no point of order being made. MR. CHAIRMAN: Order please. MR.

SMALLt~OOD: The Chairman has to decide that. MR. CHAIP..MAN: The bon. Minister of Education has not raised a point of order. I take it that he is speaking in reply to what has been said on this side of the House. It is perfectly · .. relev.a.nt to carry on and do so. MR. ROWE (F.W.): Mr. Ch.airman, what I want to know is this. Are we contrary to the practise in this House for this last twenty years and contrary to the practise across Canada to have a general budget debate on every single item that comes up in Supplementayy Supply. If so, then bon. members on this side will have to take cognizance of it.

We, too~ can make speeches. We, too, can make those e~treme,•, charges that were reported on the radio this morning, coming from the bon. member for St. John's West about the things that this House and this Government have done during the past year. We, too, can do that kind of a thing. We have been playing the game as it has been played here for the past twenty years and it is played right across Canada, treat Supplementary Supply for what it is, additional expenditure in respect of specific items, Mr. Chairman, and 3806

May 12th.. 1970 Tape no 842 Page 8 these items may be debated. I have never heard and certainly it has never been done before, and may I say on that, Mr. Chairman, we have had Parliamentarians in this House before. The bon. member for St. John's West is not the first Parliamentarian, not the first authority on Parliament to be in this House - no other member ever here before- the bon. W. J. Brown who forgot more about Parliamentary practise, not only here but all over the world thAn::che bon. member will p~obably know.

He never attempted to do what the bon. gentleman is trying to do right now, and I ask your Honour, are we to have a bu~get debate on Interim Supply, on Supplementary Supply and then another budget debate, when the budget itself is brought up. MR. HICKMAN: Mr. Chairman, may I •• AN HON. MEMBER:~Making their own ground rules. MR. HICKMAN: It is not a question of making your own ground rules at all. It is a very simple fact. There are two things - one I will direct your honour's attention to is this: two years ago on the debate for Supplementary Supply, the hon. Minister of Education will recall this.

When the Supplementary Supply Bill was introduced this House was advised that this is the last Supplementary Supply Bill that will ever come before this House •• MR. SMALLWOOD: Oh! nonsense. MR. HICKMAN: We have a new ••• MR. SMALLWOOD: If that is not a lie •• MR.. HICKMAN: Just let me remind bon. members. We have a new acc~nting procedure. Mr. Ottenheimer was then the hon. Leader of the Opposition, and he stood, and he looked the Premier straight in the eye, and he said, "does this mean, no 110re Supplementary Supply. " The answer was '"yes.'' MR.. SMALLWOOD: Mr.

Chairman, I cannot call that a filthy lie, because it 3897

May 12th., 1970 Tape no 842 Page 9 would be unparliamentary, but it is an absolute untruth. There is not a syllable of truth in that. He has just made it up. ~m. HICKMAN: Your honour recalls it? MR. SMALLWOOD: He has invented it. MR.. HICKMAN: Your honour recalls it? Of course he does. MR.. SMALLWOOD: No one recalls it. MR. HICKMAN: Your honour recalls it. MR. SMALLWOOD: It did not happen. MR. HICKl1AN: Do you recall it? MR. SMALLHOOD: We would be the first Government since the world began. MR. HICKMAN: The new accounting system •• MR. CHAIRMAN: Order please! MR.. S~tALLWOOD: Oh! nonsense. MR.

HICKHAN: Oh! remember the new accounting sytem. MR. S~tALLWOOD: Nonsense. MR. CHAIRMAN: I would just like to say this that the bon. Minister of Education and now the hon. member for Burin are diretting questions to the Chair in a rhetorical kind of way and involving the Chair in :~ the debate. Now the Chair sits here, and these questions are put in a rather, personal,direct fashion, but I hope that the bon. members do .. not expect the Chair to express any opinion on these questions. These questions are simply put to the Chair rhetorically, and I hope not in any expectation that the Chair is going to take

part in the debate and decide one way or the other. MR. SMALLWOOD: Mr. Chairman, your Honour has allowed a fairly, far-ranging debate on constitutional procedure and practice and precedence in this matter. I was wondering, if your Honour is going to allow that same kind of debate on each individual item in thistBill? When, at last, we adopt this 3898

lfllyi.l2 th. • 19 70 Tape no 842 Page 10 Head VII, Justice, $39,500 and then your Honour calls Head VIII, Mines, Agriculture and Resources, $2,125,000, do we then have the same kind of a debate all over again that we are now having under this Head VIIt Do we do this on each heading, constitutional discussion? Are we going to have it now? Is it understood that the rule of relevancy is out the window , that we do not have to be relevant, that we do not have to stick to the item that is before the Chair.

We may have a general discussion on the constitutional procedures and .will Beauchesne be quoted at every item now and so on? Is this the kind of debate Supplementary Supply is going to !M.tl.j.? MR. CROSBIE: On a point of order, Mr. Chairman. It is improper for the bon. the Premier or anyone else to address that kind of a question to the Chairman. The Chairman can only make his rulings •• ~~LWOOD: That is not a point of order, Mr. Chairman. MR. CROSBIE: The Chairman can only make his rulings as the debate proceeds •• MR. SMALLWOOD: That is not a point of order, Mr. Chairman. MR. CROSBIE: It is a point of order.

MR. SMALLWOOD: That is not a point of order. , MR. CROSBIE: The Premier is improperly addressing this kind of question to the Chairman, who will have to make his rulings as the points come up. MR. CHAIRMAN: Order please. MR. CROSBIE: And it was the Premier, himself, who started the irrelevancy •• MR. CHAIRMAN: Order please.

The Chair just finished speaking and it hopes that bon. members do not expect the Chair to reply to rhetorical questions and if members, in the course of debating the question before the Chair, asks rhetorical questions, they do so rhetorically and not with any expectation of getting a reply from the Chair. 3809

May 12th., 1970 Tape no 81t2 Page 11 MR. CHAIID-1AN: Shall Item (7) carry? Carried. Item (8), Mines, Agriculture and Resources, $2,125,000. MR.. SMALLWOOD: Mr. Chairman, I move that this Item pass and in so moving, I give this explanation: The amount of $2,125,000 is made up of a number of items. First, there is Bell Island, there is the assembling of ore at the pier at Bell Island and the loading of ore into carriers • This required $40,000. It was subhead 816-04-01.

However, this very same ore produced a revenue of $104,000, which, of course, is an offset against the additional expenditure and when all the expenditures involved were paid and we offset against it, the $104,000 we got for the ore; It cost the Province net $64,000. Second, $60,000 for the mineral survey program at Bonne Bay Park, that is the silica deposit. This included diamond drilling. There was an additional $60,000 spent on that. Then next, in the estimates of last year, subhead 812-03-26, there was a token vote for forest insect spray program against the hemlock looper.

We put in a token vote, in actual fact, we spent an additional $2 million on spray, far more that is than the token vote. This amount of $2 million was authorized by special warrant by his Honour, but actually by means of very stringent control, we were able to hold the expenditure to $1.6 million. The estimates of last year that the House passed had a token amount. We went to the Governor and we got his warrant to spend $2 million on spray.

Actually, we spent $1.6 million and s~venty-five per cent of that - seventy-five cents to the dollar of that was paid us by the Government of Canada and the two major paper companies so that actually the Government of Newfoundland spent, out of its own funds, $400,000 of that $ 1.6 million. Nevertheless, we spent it. True there is offsetting revenue we got from the· paper companies and from Ottawa - seventy-five cents of every dollar we got, but we spent the $1.6 million, and we '~re 39()0

May 12th.' 1970 Tape 842 Page 12 asking the committee now to recommend to the House that the Government be authorized to spend that $2 million - that was revenue, offsetting revenue. This is only expenditure that we are dealing with here today. That is the total, Bell Island, the mineral survey program at Bonne Bay, including the drilling and the forest insect spray program. MR. CHAIRMAN: Shall Item (8) carry? MR. CROSBIE: The amount asked to be voted under this heading is $2,125,000, and I do not know exactly how it is arrived at.

It is $2 million on spraying (but the Premier says)- and forest insect control, but the Premier says and the estimates show that the total amount spent in the revised estimates was $1.605,000 and there was $60,000 for Bonne Bay Park mineral exploration; $40,000 on Bell Island, assembling of ore. There is offsetting revenue of $104,000 so the whole - I do not see how the amount of $2,125,000 is arrived at.

What happened to the $400,000 that was not spent on the forest insect control progra~, although authorized by the Lieutenant-Governor - what $2,125,000 was spent, because it does not add up to $2,125,000- $1.6 million on spraying; $60,000 on the Bonne Bay Park; $40,000 on Bell Island, assembling of ore and that would $1.7 million. You are asking for authorization for the spending of $2,125,000 and there was not $2,125,000 spent. MR. CALLAHAN: It has already been explained. It was not all spent. MR.CROSBIE Exactly, but why ask for the authorization of $2,125,000. MR.

CALLAHAN: Because the authority has to be validated. MR. CROSBIE: Oh, I see. You mean you are asking - in this you are just asking for the tota~ of the Lieutenant-Governor's warrants to be approved, whether the money was actually spent or not. I certainly did not understand that. Well to get back to these items then, Mr. Chairman. This is Supplementary Supply, money that was spent last year on the ore. Now, in my view, this would be the time for the Government or the minister to tell us what 'the result of this program on Bell Island 3901

lday 12th •• 1970 Tape no 842 page 13 was. There was $40,000 spent on assembling the ore and loading ore on Bell Island. What price was the ore sold for? What happened to the net profits from the operation, if any? What is that money being used for? What happened last year with respect to this whole Bell Island program? This is the time, Mr. Chairman, when, in my view, the Government should be explaining what happened last year on this item, the Bell Island ore, and how was it that this expenditure could not be foreseen.

Obviously, the Department of Mines, Agriculture and Resources knew that, at Bell. .Island, last year, there was going to be ore sold or it had been agreed to be sold and it had to be shipped, and there were going to be expenses for it - why was not the item in the estimates last year? It could not be an unforeseen item. Bonne Bay Park, Mr. Chairman, the whole question of silica in that park started in the Fall of 1968. Now, obviously, the Minister of P~nes, Agriculture and Resources knew last year, when his estimates were being prepared that he had to spend money on mineral exploration in Bonne Bay Park.

I mean that was obvious. The people of the Bonne Bay area were told - the people of Newfoundland were told that the Government had to look into this silica - the matter of the silica deposits before there could be further advancement in connection with the establishaent of the Bonne Bay Park. So the minister knew that last year, be kneW in the Fall of 1968 that he had to spend money in mineral exploration of the lands that are going to comprise of Bonne Bay Park; yet this amount of $60,000 was not in his estimates, when his estimates came before this Hoase of Assembly last year. Why not? 3902

May ~Ltn, ~'J/u "'n -.L MR. CROSBIE: are not. It is certainly worth an unforeseen continency that Bonne Bay Park had to have mineral exploration done. MR. CALLAHAN: I explained that about ten days ago in this House and I would be glad to do it again. MR. CROSBIE: The bon. Minister is now on supplementary supply and he should be explaining to this House and to the country why he could not foresee last year that he was going to have to spend $60,000 on mineral exploration in the Bonne Bay Park area when he told the whole world that he was going to do that. MR.

CALLAHAN: The answer was given to the question on the Order Paper about two weeks ago. MR. CROSBIE: The answer has not been given here this morning. Why was this $60,000 spent? What kind of mineral exploration took place, was it just mineral exploration for silica or was there mineral exploration for oil or was this all in connection with silica and if it was all in connection with silica what results were found in the Bonne Bay Park as a result of this $60,000? What ., . are the results of these investigations? MR. SMALLWOOD: That is shown in the White Paper. HR.

CROSBIE: The White Paper shows nothing, we have been all through that White Paper. The White Paper is a masterpiece of deception and certainly does not supply the answer as to what the results are. MR. CALLAHAN: Mr. Speaker, on a point of order, I object to the use of those words. Would the bon. gentleman withdraw them? MR. CROSBIE: No, no. MR. CALLAHAN: Well, I am not trying to sit here, Sir, and listen to the bon. gentleman talking about deception. I do not think that is the word that should be used in this House and the question has been answered. MR.

SMALLWOOD: The Minister's White Paper is called the masterpiece of deception. MR. CROSBIE: Yes, exactly. Now, Mr. Chairman, AN HON. MEMBER: Withdraw, withdraw the words. MR. CROSBIE: No, I am not withdrawing. That is the whole burden of my speech here last Wednesday was that that White Paper is a masterpiece of deception and that is my view of what it is. 3903

AN HON. MEMBER: The hon. member should withdraw, Mr. Speaker. MR. CROSBIE: So, Mr. Speaker, what was the $60,000 spent on and what were the results? This is the time when the supplementary supply estimates are before the House to have the answers. I doubt very much whether we are going to get them. MR. CALLAHAN: You will not get it if you keep up that stuff and we have not got to either. MR. CROSBIE: You see it is not a personal matter for me. I would have thought that the bon.

Minister would be glad to outline for the people of Newfoundland what the results of his mineral exploration were and why the Minister did not have it in his estimates last year? We know why, he wanted to keep to his estimates down. Mr. Speaker, of course, the Minister does not like to give information to the House He will not tell the House for example what the situation is with respect to the Parsons Pond oil exploration or whether the requirements of the legislation have been met by NALCO MR. CALLAHAN: The Minister gave that information to the people of that area Saturday night. HR. CROSBIE: The hon.

Minister gave no information. The Minister gave no relevant information at Rocky Harbour last Saturday night. HR. SPEAI<ER(NOEI.t)-:· .. Prdur·please~ MR. CALLAHAN: The hon. gentleman does not know, he was not there. MR. CROSBIE: Mr. Speaker, mineral exploration in the Bonne Bay Park area $60,000. Has NALCO forfeited its right to the Parsons Pond oil concession or not? Has NALCO observed the terms of the legislation? Why does the Minister not spend some money exploring that, he has refused. MR. SMALLWOOD: I do not know what that has to do with this vote. MR. CROSBIE: This is a vote to do, Mr.

Chairman, with the Bonne Bay Park mineral exploration. MR. CALLAHAN: It has nothing to do with the Parsons Pond. HR. CROSBIE: $60,000. MR. SPEAKER (NOEL): Order please! The vote of $60,000 was for a silica surveyor or some such thing. AN HON. MEMBER: No. 3904

MR. SPFAKER (NOEL): What was it for? MR. SMALLWOOD: Doing a survey in Bonne Bay, not oil in Parsons Pond. MR. SPEAKER (NOEL): Yes, a mineral survey in Bonne Bay Park. MR. SMALLWOOD: Not park, Bonne Bay. MR. SPF.AKER(NOEL): Bonne Bay MR. SMALLWOOD: There ·· f.s no park. MR. CROSBIE: The hon. the Premier, Mr. Chairman, said that this $60,000 was spent for mineral exploration in the Bonne Bay Park area- HR. CALLAHAN: In the Bonne Bay area, the Premier did not say Bonne Bay Park. MR. CROSBIE: Well, in the Bonne Bay area.

He has not said it was all spent to conduct a silica survey and he has not explained really what the results of the survey were. Is silica there in commercial quantities? Would it be profit­ able for anyone to mine the silica deposits? MR. SMALLWOOD: It was said in the White Paper in this House. MR. CROSBIE: It was not said in the White Paper. MR. SMALLWOOD: It was, it was. MR. CROSBIE: The White Paper made a silly statement that there were five or six million tons of silica and the silica would be worth so much a ton. MR. CALLAHAN: That is the bon. gentleman's opinion.

The answer is given in the White Paper and twice that question was answered in the House. MR. CROSBIE: The White Paper did not go on to say that it would be economical to mine that silica. The White Paper explained nothing. The White Paper was an attem~~/oscillate the whole situation, confuse it. It did not explain whether the silica found at Bonne Bay would be economically mineable. It did not give an conclusion on that. It pretended that five or six million tons of silica was worth so much a ton not explaining whether it could be mined commercially or not. It did not say what the grade of the silica was.

It is the kind of silica that is economically viable for a mining operation, none of that was said in the White Paper because the hon. Minister bas dropped the silica argument now, he is gone on to an oil argument and.·a White Paper argument to justify further delay in connection with the Bonne Bay Park. Insect control, Mr. Chairman,. the estimates were passed last March or April. No vote, just a token vote. Mr. Chairman - 3905

.a.apc v""'""" MR. CALLAHAN: Information has been given in answer, to questions on the Order Paper twice. HR. SPEAKER (NOEL): Would the hon. member for St. John's West proceed please. MR. CROSBIE: Mr. Chairman, the Minister knew, the Government knew that they were going to have a forest insect control program last year. They knew that, they knew it full well but they did not put any expenditure in the estimates for it other than a token vote. It could have been there. It was not an unfore­ seen contingency, it was not an emergency that cropped up during last year.

It was a matter that they knew had to be done last year, they knew the spraying had to be done last year, they knew that there were a lot of insects had to be controlled last and there is a lot ha~ to be controlled this year too yet the $2. million was not put in the estimates and the Minister knew the cost of that program long before the House closed last year. MR. CALLAHA."l: Nobody knew about that program. MR. CROSBIE: The Minister knew.

We give the Minister credit enough that he does know a few things and one of the few things he does is he knew last year that that forest insect control program was going to cost about $2. million and that Ottawa was going to advance seventy-five-per-cent of it. So, Mr. Chairman, I doubt whether we will get any explanation but why was not the $40,000 in connection with Bell Island ore foreseen? What is the picture on the Bell Island ore?: Is the money being used for the benefit of the residents of Bell Island? Just what is the situation? Apparently $64,000 was made on this ore,at least, last year.

What are the results, the real results .of the mineral exploration of Bonne Bay and the silica? Not silly statements that there are so many tons there at so much a ton without showing whether it is commercially fesible to develop or not and what happened with the forest insect control? Why could the Minister not include that in his estimates last year? These are some of the questions that come to mind if this House is to have any control over the spending of the Government. MR. CALLAHAN: What if the hon. member takes his seat, Mr. Chairman, he should withdraw his remarks he made •. MR.

CROSBIE: No, I cannot withdraw that. 3906

May lleh, .L'J7U l'ape MJ .JM - ;) MR. MYRDEN: Mr. Chairman, I would like to have a few words on this $60,000 mineral survey and I would like to have a few questions answered •. MR. CALLAHAN: If he had come Saturday night he would have had all his questions answered. MR. CROSBIE: Re was not invited. MR. MYRDEN: Nobody was invited. MR. CALLAHAN: Everybody was invited to go. It was a public meeting and the bon. gentlemen were afraid to come. MR. MYRDEN: Oh, do not talk such bull, hysterics just like a child for Cripe's sake, you could not answer the question that you were asked. MR. CALLAHAN: I am like a chicken.

MR. CROSBIE: Yes, you got egg all over your tie. MR. MYRDEN: Mr. Chairman, if ~he Minister do not mind getting away from the Rocky Harbour egg program. What amount was used for the silica survey of this $60,000 and was there a general survey in the whole area? This is what the · people would like to know and will there be more mineral surveys made this year? I would also like to know if there were outside contractors for this $60,000 survey and were they employees of the department? But I guess we will not get any answers, Sir, they are too busy. HR. SMALLWOOD: The answer, Mr.

Speaker, to that question is that it was all spent in Bonne Bay, it was all spend on investigating silica, it was all spent on diamond drilling, all of the $60,000. The answer to the other question, will any more money be spent is time will tell. MR. CROSBIE: Mr. Speaker, there have been a number of questions asked about the Bell Island ore situation as well as the Bonne Bay park situation. Time will tell, what is time will tell. Time will tell has nothing to do with it. That is the attitude of this Government. You are not going to get any information.

There is nothing in the estimates this year for mineral exploration of Bonne Bay as far as can be seen. We have ask the question, was the silica deposits proved to be present at Bonne Bay Park, were they comme~cially mineable, were they economically fesible to develop? We have not had an answer to that and 390~ another question is the Bell Island ore situation. This ore was sold last year

May 12th, ~9/U Tape H4j J~ - 0 MR. CROSBIE: and the Government spent $40,000 seeing to its loading and received $104,000. What is the picture with respect to this situation on Bell Island where the assets of Dosco were sold and ore is being sold and the Government had to spend certain monies in connection with it? What is the picture there? These are questions we are asking in connection with that $40,000. MR. SMALLWOOD:_ Mr. Chairman, every last individual scrap of information about the disposition of the assets on Bell Island every last scrap has been given in this House.

A oomplete accounting for every dollar spent and received has been given in this House on the assets of Bell Island. MR. MURPHY: Now, Mr. Chairman, there is only one or two remarks I would like to make and that is in reference to when the budget is being prepared and not being able to foresee expenditures. Now we are talking about $60,000 here for the necessary funds to conduct a survey of mineral resources in the proposed Bonne Bay National Park area.

I think the House closed last year about the end of May, I do not know but it was a bit later than that, but this request for the $60,000 is dated the 26th of June which is just about a month after the House closed. We are talking about a twelve month period but I think if you looked up these warrants you will find that many of them are issued immediately, within a month of the House closing. Now if that is not to general appearance a fact that we will not put it in the budget but as soon as the House closes we will request it and it strikes me very forceablely, this one particularily.

The warrent was issued on the 4th of July just about one month after the House closed. Now if anybody is saying that this Government are really projecting economic picture of the Province I fail to see it. If within thirty days after coming in here looking for millions and millions and millions of dollars and then the House closes and the hot air is no sooner dispelled out of the Chamber when they come back looking for the - and this is the actual date of the warrant, you know and if anybody wants to check the warrants they are all here.

This one here is requested on the 26th of June and there is another one the 16th of June, two weeks after the House closes. Well, if this is good business management. $2, million that was dated the 4th of July actually but-- - 3908

May 12th, 1970 Tape 84J .11'1 - I MR. WELLS: We requested it the 16th of June. MR. ROBERTS: Let us deal with these two items. MR. MURPHY: If we are going to listen to this great talk that it is not our purpose to make the budget look good, I think these facts here when you read them would give another impression entirely. After all if you are doing business with someone and say,on the end of May look I only need $2. million, well, alright if this is not there we will close up what business we are doing and two weeks afterwards we are going to look for another $2. million or another $60,000 or $70,000.

To me it does not appear to be good budgeting or good Government management of our affairs and it certainly appears that Government do not want to put in the budget the actual monies they are going to spend. W~ will say; "Look, we will wait for a few weeks, the budget is being received, we are going to have a surplus and as soon as the smoke dies down we will come and request it." MR. SPEAKER(NOEL)?,:· -- :('II.naudible). MR. MURPHY: I want to make my point, Sir, that is all I want. MR. CALLAHAN: I would be very pleased, Sir, to reply to the hon.

Leader of the Opposition who is a gentleman and who respects this House more than other members do. This information, Mr. Chairman, already has been given on two occasions during this session but I will give it again. In respect to the warrants for the purpose of providing funds for the examination of the mineral area at Bonne Bay, the authority originally was given, and I have explained this previously in the House and it is in Hansard, the authority originally was given in November of the previous year, November of 1968 and as I said here the other day, Mr.

Chairman,about ten days ago, I think I have to say there was a breakdown of communication to this extent that it was assumed because when the authority was given it was planned to begin the work in the fall but in fact we ran into unexpectly bad weather and we were unable to move the drilling equipment from the South Coast to Bonne Bay and could not do the work within the time frame that had been projected when the authority was given.

This is what in fact happened and the work had to be postponed until the spring but the officials of the Department of Finance assuming that the work had proceeded as planned did not, in terms of communication, 3909

May 12th, 1970 Tape 843 Jl'l- 0 MR. CALLAHAN: if did not occur to them that they should advise our officials that in fact the authority that had been given them in the ordinary would not extend beyond the 31st of March. When it came time to do the work and this was long after the estimates had been drawn it was found that there were no funds in fact for this project. So new authority had to be obtained. On the other matter, Mr.

Chairman, as I again have explained in the !louse, at the time the estimates were drawn,not at the time the House closed that is not the material date ·Or the germane date of reference, at the time the estimates were drawn it was .not possible in any way, shape or form to know or to determine or to forecast what the nature of the insect problem would be.

Indeed it was not really known until mid·June what the nature of the problem would be and it was at that point during the short space of time from the first two weeks of June to the first week of July that the program essentially in detail had to be mapped out and planned and until that was done it was not possible to have any kind of reliable cost estimate. Indeed the fact that the final cost was some $400,000 less than the amount estima~ed three weeks before the program started is pretty good indication of the unreliability of the situation. ! In addition to that, Mr.

Chairman, and of much more significance, is the fact that at the time the estimates were drawn,in addition to the fact that it was not known whether there would be a program or on what scale,we were in negotiation both with the paper companies and with the Government of Canada for funds to support this program. These negotiations were not concluded and indeed did not even look hopeful at the time the estimates were drawn, at the time the House opened or at the time the estimates of the department went through the House . .. ·.-I referred bon. members the other day and I do not again, Mr.

Chairman, to the fact that the time the estimates went through the House last year I fully explained and gave this exact same explanation I am giving now for the second time in this session that it was not possible to know (

a) what the program, the nature of the program, or the ultimate cost would be or (

b) whether there would be any sharing because at that point there was some hope that the Government can or might do what they did in Quebec the year 3910

May 12th, 1970 Tape 843 JM - "J MR.. CALLAHAN: before and bear the full cost. We were not going to put our cards on the table or committ ourselves while in negotiation with the industry and the Government of Canada at a time when we were in negotiations with them. As it turned out, Mr. Chairman, instead of the Province having to bear,as it appeared we might, a $2. million cost we actually came out of it at $400,000. This was the purpose of the negotiation but I say again it was not possible to estimate either the cost of the program, the scale of the program or what the real cost to the Province might be.

That,Sir, as I have explained just now is the fourth time, is the reason that figure could not appear in the estimates realistically and did not appear and the reason that authority subsequently had to ·be obtained. MR. EARLE: Just one point, Mr. Chairman. I think the bon.

Minister has given a very accurate explanation so I think the point that should be emphasized here that this is in a sense sloppy accounting because the $60,000 for the mineral survey was authorized the previous November and his officials and himself, I think, should have realized that that automatically ran out at the end of the year and it was not renewed in the new budget. MR. CALLAHAN: That created an unforeseen contingency did it not? MR. EARLE: Yes, but it was sloppy accounting on somebody's part. MR. CALLAHAN: Yes, I agree. ~: Hotion,Item lX, carried: Public Works. MR.

SMALLWOOD: I move that it carry .Bead lX: Public Works. In so moving I give this explanation of the amount requested $231,735. $11,000 more was needed to meet salary committments under general administration, $11,000. Another $1,000 was needed for office equipment such as copying machines and supplies and for office expenses generally. Another $60,000 was needed for putting in greatly improved telephonic services in this building resulting in, of course, in higher rentals.

This was in sub-head 902 (02) (03) and this included the installation of a direct line to ·Grand Falls. $25,700 in sub-head 911 (01) salaries for maintenance and building staff, there was not enough voted last year so- 3911

May 12 1970 Tape 844 page 1. voted last year, so abide by this amount. Then $12,000 more was spent last year as a result of additional buildings that came under the supervision of the Department of Public Works and also additional travelling required for the maintenance and alteration staff both on this island and in Labrador. By the way some of those buildings were in the buildings division, hospital exe~nsion projects at Springdale, Burin, Channel, Bonne Bay, Burgeo, Marystown, and the upgrading schools at Stephenville, Happy Valley and Carbonear.

There was $12,000 more travelling by the building division staff. Then finally there was an underestimate in the estimates last year of $122,000 in the provision of an interest payment on loan No. U-3 with Central Mortgage and Housing Corporation, for residence No. 9 at Memorial University. This is subhead 911~0a-01. So the $231,000 is made up of $122,000 this building residence No. 9 at Memorial University. This is Central Mortgage and Housing loan, I must confess that it sounds like a lot of money to me, in the provision of an interest payment on loan U-3 with Central Mortgage for residence No. 9.

Residence means college residence, it is not a dwelling house it is one of the big, _the big second dining hall at the University. That is under­ standable.

That is $122,000 and $12,000 for the additional travelling for the buildings division covering back and forth to these various buildings and $25,700 for salaries of the maintenance and building staff and $60,000 for the insulation of the new PBX and the higher rentals consequent upon them incthis building and the introduction of the direct telephone line to Grand Falls, and $1,000 for office expenses additional expenses, and $11.000 for salary commitments p,eneral administration of the Department of Public Works. MR. CROSBIE: These expenditures }fr.

Chairman are all in the same category, There is nothing here unforeseen. These are not unforeseen contingencies at all. A department knows what salaries it will have to pay in the next year the Department of Public Wo£ks knew whether last year whether or not it was gotn¢. to ~~end money on improvement of the telephone services in Confederation Bullding here, the $60,000 item was not an unfor~een emergency that cropped up during the year. The department knew that they were going to have to pay 39~2

May 12 1970 Tape 844 page 2. pay salaries for maintenance and building staff. They have an underestimate there. The interest payment itself is, that was not an unforeseen emergency if this was a payment on a mortgage on a direct obli~ation of the Government. A mortgage from the Government is CMHC, $122,000 is a la~ge amount so it must be quite a large mortgage. How could the department underestimate this interest payment. What that means that someone forgot that this interest payment had to be made.

It certainly is not in the range of an unforeseen emergency, '1he Government knows what mortgage payments they have to make during the year• All of those expenditures Mr. Chairman are not in the category for which supplementary supply should be used. These are not emergencies, they have ~rapped up during the year. This is the result of artificiallyyreducinr, the estimates by the Government so that the picture will look better when the budget is brought down, This is what, this is the result of. And all those items are in that category. MR. EARLE: Mr.

Speaker, just one comment on the quite heavy itemsfor PBX rentals I believe that the large portion of this was accounted for by the installation of telecommunications machine in the department is not that correct ~r. MinisterZ I could not see the reason for this because there was already one in the department of Finance which was in fairly frequent use. And there was a second machine put in the department of Public Works. I think it was a duplication of unnecessary expenditure. MR.SMALLHOOD: I hope to have one put in my office as well. MR. EARLE: Is it necessary? '¥R, SMALLWOOD: Yes, necessary yes.

MR EARLE: Well there were periods Mr. Chairman, when the machine certainly in the department of Finance to my close knowledge was not in operation. AN .HON. MEMBER: All telegrams now come in •••••••••• MR.EARLE: I think there is another answer to it than that. ~.S~LLI-lOOD: · · Mr. Chairman, I move Head 10 Department of Health, $2,502,050 and in so moving I give these explanations. An additional $520,000 a little over half a million dollars was required for salaries at Cotta~e HosPitals, that is subhead 1038-01.

The reasons for these additional requirements were as follows: Salaries increases to medical staff $100,000 and over-estimate 39:!.3

May 12 1970 Tape 844 page 3. in savings due to inability to recruit $120,000, not that the explanation of that is this. Every year in the estimate you put in a saving on account of the staff that you do not think you are going to be able to recruit. Based o on experience the doctors you do not think you are goin~ to get though you want thea you are eager to get them but you do not tlink practically speaking that you are going to get them. The engineers that you would like to have but you do not think you would be able to get. You put the vote in and then put a countervailing saving for non-recruitment.

But in this case we had a $120,000 in for non-recruitment of doctors and then we did in fact recruit them. So that $120,000 had to be spent. And then there is another amount of $300,000 saving that was to have been made last year, in the estimates last year, by closing down two hospitals, one at Botwood and on at Markland. That $300,000 was not saved because these two hospitals were not closed do~m. So we had to find that $300,000 in the Department of Health. But on the other hand there was some additional revenue from the Government of Canada, that came into our Treasury of $130,000.

So that $130,000 additional revenue reduced the .actual spending to $390,000. Then there was another provision of $1,526,000 for expenditure under the hospital insurance programme for patients services, non-government. This is subhead 1041-03-01. Mi.RORERTS: Those subheads by the way Sir, are in-~he~ld estimates and not in the new MR.SMALL~vOOD: Right, this has been made clear here, that these subheading references that I have been giving refer, ate to the estimates of last year not the MR.

ROBERTS: Health has been changed - ~~- .s~~LLW00n: _ Yes, and it has been chan~ed in quite a number of sections of the estimates. This resulted mainly from a carry-over of costs from the previous year and increased payments to pathologists and r~diolor,ists. However, increased federal revenues of S3RO,OOO came to the Province under 3914

May 12 1970 Tape 8/14 page 4. those headings increased federal revenue not ' budgetied for of $380,000 that left the net cost to the Province at $1,140,000 rather than $1,520,000; $380,000 less. Row the original expenditure estimate for services rendered to children ift hospital under the free medical care plan. That was subhead 1041-04-01 was too little by $188.000 gross. Actually we got another $35,000 under that heading from the Government of Canada which reduced the $188,000 to $153,000 and incidentally Mr. Speaker, that is the closing out of the children's health plan.

This Province was the first Province in Canada and for years we·were the only province in Canada with the children's health, children's hospital plan free, free hospitalization fo~~hildren. It was abosrbed into the National Plan when the national plan came. But for a number of years we carried on that plan giving free hospitalization to every child in the Province up to the age of, free medical care of every child in the Province up to the age, up to the sixteenth birthday. The only the only Province in Canada that did it.

He spent quite a few million dollars on it when the larger plan National Plan came.,in it absorbed our own provincial plan. And in the year just nasi! all outstanding bills l.rere cleaned up, running to a total of $188,000 less $35,000 we got from Ottawa which reduced it to a $153,000. Then there is another amount of $15,000 to complete the interior renovation and put in the new heating system and insulation of the doctor's residence at Hampden and to provide new clinic facilities at St. George's $15,000 for these two items.

Then $11,000 for the insulation of new equipment and relocation of existing equipment and the reJiairs and·.o impt:ovetrtents to the bathroom and shower room facilities at the Central Laundry. $11,000 for that. That is subhead 1031-09-03. Then another item of $70,000 under heading subhead 1037-09-03. The new heating boiler and the new electrical service and the re-wiring of the ~!ental Hospital Annex. And also the replacment of floors in the rear wards and the fire escapes, and ma1or repairs to the Nurse's Residence.at the ~ental Hospital. All of that was $70,000.

Then there was an amount of $100,000 extra, addittonal S100,000. Under 39:!.5

May 12 1970 Tape 844 page 5. subhead 1038-09-03. This was fo~ the re-wiring of the St. Lawrence Hospital. And for the water supply for the Fop,o, Old Pcrlican, and Bonavista Hospitals. And for extensive plumbing repairs and additional electrical services to the Brookfield Hospital. And also to cover installation of X-Ray equipment at the Hr. Breton Hospital. All of these together amounted to $100,000. Another $15,000 spent at the James Paton Memorial Hospital at Gander. This was $15,000 for re-tubing and repairs other repairs of two heating boilers at that Hospital.

Then there was an amount of $35,000 in the Sir Thomas Roddie~ Hospital. The re-tubing of boilers, the installation of X-Ray equipment, and the re-zoning of the heating system at the Sir Thomas Roddick Hospital.

Then there was another amount of $15,600 for increased phasing in of the hospital facilities at Sir Thomas Roddick Hospital • This increase phasing in of the facilities in that hospital required of course more heat and more light,A fuel and lirht. 'Then there were several amounts, $3POO,ee& fo~ repairs and maintenance of the Central Pharmacy, that is an additional $3,000, over the amount voted by the House last year. An additional $5,000 for repftirs and maintenance at the Templeman Hospital on Bell Island. And then there was another $5,200 for heat and light and so on at the Central Pharmacy.

Then there was S4,000 for heat and light and so on, at the Central Laundry. And there was $5,250 for the Water Templeman Hospital on Bell Island. $5,250, that is for heat and li~ht etc., and the other amount of $5,000 was repairs and maintenance at the same hospital. All these amounts Mr. Speaker, come to a gross total as shown in the Bill. $2,502,050. MR.CROSBIE: Mr. Chairman, most of the amounts that the Premier has just listed rest of these Mr.

Chairman fall right in the place with the/supplementary estimates and further sho~that the estimates presented to this House each year are not accurate the knowledge of the Government. You just look at the two items, one item in particular the hospital insurance $1,525,000 which is quite a large increase under any one heading. This is the operation of non-r,overnment hos,itals and government hospitals. And the Government of Canada pays roughly 3916

May 12 1970 Tape 844 page 6. fifty per cent of the cost of operatin~ the hospitals, under the federal­ provincial health insurance plan. It might be fifty-two or fifty-three per cent I am not sure what the proportion is now. In the estimates this year, or in the estimates last year revised, there is $28, 891,000 for hospitals not operated by the Government, $6, 686, 000 for hospitals operated by the Government. Total $35, 577,000. That is the revised expenditure in this head for last year. In the estimates for this year, there is an increase undee those headings of ~nly $762,900. Now Mr.

Chairman, next year, the Government will come back to this House and it will ask for Supplementary Supply under this heading of at least another $1,500,000 or $2,000,000. Because the Government knew last year that the amount voted in the otfginal estimates was not enough to operate the hospitals in Newfoundland. lYhat happens is that the Treasury Board of the Cabinet or the Premier says there must be a cut in the department of Health budget. There has to be one or two per cent or some amount come out of it.· There has to be a $2,000,000 cut.

So the Minister of Health and his officials has to look at their estimates , what is the biggest amount in their estimates? The operation of these hospitals,where can we most easily make the cut that has been demanded by the Government in that amount. So they artifically cut out of the estimates $1,500,000 that they know they are going to have to spend during the year. And they know that they are going to have to go back to get it from supplementary supply. It is well known in the Government.

You cut it out now, you take it out now while the estimates are going through you will get it back in supplementary supply. And that is what happened in these estimates ef health has happened the 7ear before and the year before that, And will happen this year and the next year, as long as this system continues. ~ The million and ·a half dollars that the department of Health knew would have to be spent in the operation of Hospitals last year was not in their estimates, because they were forced to cut 39!7

Hay 12, 1970 Tape #845 Page 1 HR. CROSBIE: were forced to cut it out artificially, so that the Budget would look better last year when it was brought down. $520,000; salaries in Cottage Hospitals. The officials in the Department of Health Hr. Chairman, can tell you within $50,000 certainty, what they are going to have to spend on any of those votes during the coming year. $520,000 additional for salaries in Cottage Hospitals, that was known about last year when the Estimates were brought in. It was known that that vote was underestimated.

And the same principle apply last year as the year before - it was the same when I was there. I brought in the same situation the year before. That is why I know what I am talking about. And the year that I brought them in, we had to cut out $1 million or $2 million that we knew would have to be spent during the year. That is why I am saying it now. And the bon. minister there, a successor, the gentleman has done by the way, a very good job in the last few days, negotiating with the hospital workers, an excellent job. Yes, he saved the Government actually in our view. Our successor in the Portfolio of Health.

It was the same thing last year- oh the Fremier does not like my"pronounciation," MR. SMALLWOOD: Or his pronunciation either. MR. CROSBIE: Imagine, he is such an expert the hon. the Premier in the use of English, that he will not forgive us poor illiterates who do not pronounce all our words correctly. However, the hon. Minister of Health, the present incumbent is in the same position we were in. He did the same thing last year or his predecessor did as I did.

He cut out artificially from his Estimates a million and a half - two million dollars that he knew he had to spend, because that was the direct from Government. We must appear to have a balanced budget. Now last year the Government was lucky, the revenues increased more than they thought, or there would be no balanced budget. And there will be no balanced budget this year Mr. Chairman. We are going to have a very good deficit on current account at the end of this present fiscal year. There will be no surplus, that is for sure. Nothing like it. So that is why Mr.

Chairman, under two Items in Health, $2 million had to voted in Supplementary Supply. Hospital 3918

May 12, 1970 Tape #845 Page 2 Insurance, the Operation of Hospitals and salaries for Cottage Hospitals. Now the other Items are all smaller. The Children's Health Plan, that could have been unforeseen. But these other Items, the small Items; Boiler and Electric Service to the Mental; heating and so on at doctors' residences. The other Items listed. The wiring at St. Lawrence Hospital. Water systems at Fogo, Old Perlican etc. All this was known about last year Mr. Chairman, that this would have to be done - these things would have to be done.

Heat and Light; $5,000 needed for Heat and Light down at Central Pharmacy. The Government knows to a nickel what it is going to cost the heat and light to Central Pharmacy every year, if $5,200 had to be voted in Supple­ mentary Supply. The Central Laundry is the same. Years of experience operating the Central Laundry - they know to a nickel what it is going to cost to heat and light the Central Laundry, but $5,000 had to be voted there. What is the point in going on Mr. Chairman? The Government does not appreciate these remarks. Poke fun at you about your accent.

In fact if that continues, I am not going to stay anymore in this House, if they continue to do that. I do not pronounce my words "right. But quite seriously Mr. Chairman, this is the point we are getting at. That whole amount there for the Department of Health, $2,500,000 - not ten dollars of it unforeseen expenditure. All of it foreseen last year, the hon. Minister of Health saw it-all. He may get up now and say he could not foresee it all. And even if the minister was ignorant, his officials are competent, and they foresaw it all.

So this codology goes on and the Government coming in with Supplementary Supply, knowing with their majority they are going to get it anyway. And careless therefore, what they have in their Estimates. And that they are going to do the same this year as they did last year. That is all 1 have to say in the matter. MR. SMALLWOOD: Mr. Chairman, before you carry it, I wonder is there use saying what I am going to say? Probably not. But what would any hon. member of this House do. What would you do Your Honour? What would any member of this House do if he were a member of the Government? If he were 3919

May 12, 19JO Tape 11845 Page 3 a member of the Government and he was helping to draw up the Estimates for the coming year. Estimates of expenditure. He has to put down a certain amount for education and that amount is a lump sum - it is $103 millior And it is made up of hundreds of Items, hundreds of different Items. Teachers' salaries, maintenance, hundreds of items. It is $103 million. But it ought to be $105 million. Now we make up the Estimates of Public Health and it is down we will say, about $80 million, a little over $80 million. It ought to be $90 million.

And we go right through the:...:::.. _:~_l Department of Municipal Affairs, the Department of Highways, Maintenance - We put down an amount for the maintenance of roads. We put down an amount for snow-clearing. But we know it ought to be more. But we do not put down enough. We know it is not enough. Should we put down what ought to be spent regardless of the revenue? Should we make the Estimates out this way? Here is what we are going to spend. Here is what we are going to take in. We are going to take in $10 million less than we are going to spend. We are going to take in $1 million than we are going to spend.

We are going to take in $100,000 less than we are _going to spend. We are going to take in $1,000 less than we are going to spend. We are going to budget for a deficit. Should we do that? MR. HICKMAN: Some Provinces do. MR. SMALLWOOD: No. You have to be a rich and powerful Province, or a rich and powerful nation to budget for a deficit, because if you do not your credit will be ruined. What you do Mr. Speaker, is this. Here is what you do, and here is what anyone ought to do. This is the right thing to do. Find out what revenue you think you are goin~ to get and then cut your garment accordingly. But suppose Mr.

Chairman, throughout the year your revenue increases, which of course you hope will happen. What do you do then? You ask the House to give you $103 million to spend on education, because you figure that is all your revenue would allow you to do. But your revenue goes up. What do you do? Do you spend more on education than the House authorized to spend more than you asked them to authorize you to spend. We are going to ask the House in this Session 39:;0

May 12, 1970 Tape #845 Page 4 to authorize us to spend $103.5 million on education as an example. It is not enough. Everybody knows it is not enough, but that is all we are going to ask the House to authorize us to spend, $103.5 million on education, that is all. We are asking the House to give us the authority to spend so much on Municipal Affairs, on Housing, on Welfare, and so on and so on. And none of it is enough. But it is all cut according to the amount of revenue we estimate we are going to get. But now Sir, through the year, as the year goes on, the revenue becomes buoyant.

It is much easier to estimate expenditure than to estimate revenue. Much easier. Very, very easy to estimate your expenditure. But it is not easy to estimate your revenue. How much will your S.S.A. bring you in? Well that depends on how much the people spend on the things that pay the S.S.A. How much beer will people drink? That will tell you how much profit you are going to make on beer. How much hard liquor will people drink? That tells you what revenue you are going to get from that. How many people are going to buy cars? How many people will pay licences to drive?

How many people will buy gasoline in cars and in trucks and in skidoos Your Honour? Ottawa has to make the same stab at it. They have to try to estimate how much money they will take in for corporation income tax. To figure that, they have to figure how much profits the corporation will make - all the companies across Canada, what will they make in the next year? Well they know whatever they make, they are going to get a certain share of it. How much will that come to? That depends on how much profit they make. You estimate your revenue, and you cannot be exact.

You can look at your whole economic situation, and you can say well it looks as though it is going to be a very good year. How do you know1 You talk to Bowaters. You talk to Price. You talk to the Mining Companies. ~u talk to the various large corporations and you say to them, "what do you propose to spend in the coming year?" And you get your estimate in that way, and many other ways of how much money the people are going to spend. How much they are going to have. How much they are going to get, and how much of that they will spend, and how much of what they spent, we can hook out of it.at an 3921

.. " May 12, 1970 Tape 1845 Page 5 average of fifteen cents to the dollar. So it is not easy to estimate your revenue, and if you are a fool, if you over-estimate it, you are living in a complete fool's paradise, if you over-estimate your revenue. Because if you over-estimate your revenue, then you are bound to over- estimate your expenditures. You are bound to and end in a mess. So you underestimate your revenue, As a matter of fact I do not mind telling the Committee this Mr. Speaker. They may find it amusing, or they may find it something else, I do not know.

But I do not mind telling that the Treasury Board and the Minister of Finance and the Premier, and for years and years, it was mainly the Premier, but in recent years it has been more the Minister of Finance and the Treasury Board, enter into a sort of genial conspiracy against the rest of the ministers, especially the big spenders, the Minister of Highways, the Minister of Public Works, the Minister of Welfare, the Minister of Health, the Minister of Education, the big spenders. You have to put on the poor mouth until you get the Estimates adopted by the Cabinet.

You underestimate your revenue and you would be very, very wrong if you did not. You underestimate the revenue you think you take in for the year, and then having done that, you cut your garment accordingly. To the Minister of Education you say, "what do you want, do you want this added deficit? · Do you want to go before the people of Newfoundland and end up with a deficit. Do you want that? " No, I do not want that - well all right, you cannot have any more than $103.5 million in the coming year for education.

You say to the Minister of Health, "I know, I know what you are proposing is good, it is needed, it is very necessary, sure, sure, now do not go resigning because you are not getting it, because you still will not get it, because we have not got that kind of revenue." You say to the Minsiter of Highways, to all the ministers. "Look this is all we can get, so we can only give you this much." Now having done that, having brought down the Budget, having brought down the Estimates for the coming year, all these having been passed. And the year goes along and the revenue turns out to be 39:!2

May ll, l~IU Tape t/845 Page 6 much more buoyant. AN liON. MEMBER: In a month? MR. SMALLWOOD: In a month. Yes, but do not forget that the month is were made after the House closes, but the Estimates six months before the House closed. Oh yes, the Estimates that this House will be discussing shortly for this present financial year, the new year. These Estimates were started in October. Why? I will tell you why. The reason is this.

That late in September the Treasury Board, or the Minister of Finance as a rule sends word to all his colleagues and says, "start getting your Estimates ready." And in the month of Septembet' and October, the Deputy Ministers of all the departments have got their Estimates up for the coming year. The year that begins April 1 coming. This is back the year before. Six months before they get up their Estimates. They talk it over with their minister, and they start scheming - how to fool the Cabinet, how to fool the Treasury Board, how to hook a million out of them and get some concealed fat in there.

That is the game of all ministers, especially the heavy spenders. They all want to do a good job. You cannot do it unless you have the money to do it with. So they all are into a conspiracy against the Minister of Finance and his officials and the Treasury Boatd. But when he and his deputy agree, well we will try it, in they go to the Department of Finance, and all the ministers hand in their Estimates, their proposed Estimates, their draft Estimates to come into effect April 1 coming, hand them in October or November. By December, the butchery has taken place. The slaughter.

The slaughter, not of the innocence, but the slaughter of the guilty. Guilty ministers who try to hook more money than the Treasury Board and the Minister of Finance figured they could have. MR. CROSBIE: They get it from Supplementary Supply afterwards, MR. SMALLWOOD: No. You cut it down in accordance with your estimated revenue. You have to balance your budget, n~t only your budget, you have to try to make a surplus. A million dollars, two million, whatever you can make to use that surplus for capital account spending. Okay. It finally comes to the Cabinet and what is the picture?

The picture is there is a deficit of five millions, or ten millions. I remember one year there was a deficit of twenty odd million when it came to the Cabinet. 3923

May 12, 1970 Tape 11845 Page 7 A deficit of twenty odd million. What did we do? We ended up that particular year with a surplus of two or three millions, but only by sending the Estimates back to the Ministers, say, "take it back, take it away, forget it, you will never get anything near that. Cut it down and they cut it down and we brought it before the House. The House passed it. The revenue was such as to pay every nickel of it with the surplus, a little more revenue than we actually spent.

But we have had put before the House the Estimate as the ministers drew them up in the Yellow Book, well we would not dare do it. I remember one time the Yellow Book was sent around to all the ministers in a sealed envelope marked "secret and confidential" stamped on, and a special messen~er took them around to the ministers. One minister received it at his house, the draft Estimates - the yellow not the red, not the one comes here finally after the Cabinet trims it down. He resigned the next day from the Cabinet. He said that Newfoundland was bankrupt.

Here we were budgeting he said for a deficit of twenty millions. And he walked across the floor of the House. That is twenty years ago, Newfoundland was bankrupt, twenty years ago, because he took the Yellow Estimates, just the draft Estimates that are sent around for the ministers to look at and say "well for God's sake are we going to go and have a deficit of twenty million, that is the end of Newfoundland if we do. We have to do away with that twenty million somehow. We have to eliminate it and balance the Budget." Now I ask finally this simple question, this simple question. When this Committee of Supply Mr.

Chairman, considers the Estimates of expenditure for this year that began on April 1. When we come to do that, and we find that there is an amount . there for education for $103.5 million, and the Committee votes it, and then the House votes it. Now the Government have authority to spend $103.5 million on education. Now, that is the authority we have. So the House is dissolved, not dissolved but prorogued, unless we do dissolve it, that wae a slip. Anyway we leave here. There is no H~use here not in Session at any rate. Now we go along with every education authority in Newfoundland ie hammering at us.

The NTA are hammering at us. School Boards are coming 3924

May 12, 1970 Tape #845 Page 8 in endlessly interviewing us. Delegations deputations begin coming in. The churches begin making pronouncements. And the $103 million is just not enough Mr. Chairman. It is all the House has voted, so that we could balance the budget, that is all there is. And if no more revenue comes in then it has to stay at $103 million. We cannot put it up, unless the revenue goes up. But suppose the revenue goes up. The House is not going to meet until January, February, March next year - and let us say in the month -what month is this June, July, what month are we in? May. We are in May.

We are in the month of May. All right. Suppose the House ends the end of June; Say this Session is completed the end of June. And by the end of July or up in August it is clear that the revenue is coming in better than we estimated. And there has not been a year since Confederatic when it did not. I do not believe there has been one year of the twenty-one since Confederation when we did not take in more revenue than we estimated. We obviously underestimate our revenue. What do you want us to overestimate it? You cannot get it exact, unless we have the wisdom of God.

We cannot tell exactly what revenue we are going to take in. No. So we underestimate it, which is the right thing to do. All right. But it turns out to be more than our Estimates. It turns out that it was underestimated. Now at that point. What do we say to the churches? To the School Boards? To the people, to the narents? To the NTA, what do we say them? Oh the House voted $103,500 not another nickel are you getting. You see, you have to. Now we know we can do it. We know the money is coming in. We know we can afford to do it because the revenue is better than we figured. What do we do? You know what we do?

We spend it. You know what the Government of Nova Scotia does? Same thing. New Brunswick? Same thing. P.E.I. with its glorious Liberal victory, twenty-seven to five (the poor old Tories) They do the same thing. Quebec? Another great Liberal victory, Ontario, every Province does the same thing. Every Province has Supplementar~ Supply. If their revenue 3925

May 12th, 197U Tape H4b JK - J. MR. SMALLWOOD: Their revenue is better than they estimated and they underestimated some things of expenditure that ought to have been more but they were afraid to make it more, then they make it more if the revenue goes up. Now what is wrong with that. We will be told now we will have Beauchesne quoted at us again to the effect that it is not unexpected. What is that argument? Is the argument this namely that unless it is unexpected you must not spend, unless on something that was unexpected.

Well, is there anything unexpected, in all the estimates is there anything unexpected, in the whole gambit, the field of public expenditure in Newfoundland is there anything unexpected? In the literal meaning of the word, yes, a crisis,a great.forest fire breaks out. You go out and you spend $1. million or an election is held sooner than you planned, you did not budget for it so that is unexpected. There are certain things that are unexpected in the literal sense of the word but except for these few things, tell me what is not unexpected? Every­ thing is unexpected, everything.

You can only vote the money that you think you are going to have and get that money that you are voting the Government authority to spend. The House knows, the committee knows, the Government knows, the public knows, the churches know, the NTA know, the school boards know, every teacher knows it, everybody in Newfoundland knows that it is not enough~ $103,500,000, it is not enough: What will we do? Will we follow this blind, narrow, barron idea that unless it is unexpected you dare not spend a dollar on it even if you have it to spend?

You will wait until the next year comes and go in and vote for the year but then you have lost a year. What do you do? You do the level-headed thing, the sensible thing, you spend it if you have but always try to end your year not only with a balanced budget but with a surplus. We ended our year just past with a surplus of $2. million plus. In my budget speech I said $2. million. $1.96 million it rounded out at $2. million. Now I say $2. million plus but I will not say how much plus.

You try to end each year with a balanced budget or even better than that a bit of a surplus, take in more than you spend, a bit more but if you do that it is only because your revenue is going up more than you expected and if it does are you going to starve education, are you going to starve welfare, are you 39:;6

May .Llt:n, l.'1Ju ].ape O'+o MR. SMALLWOOD: going to starve the Highways Department, are you going to starve the Health Department and all the other departments of Government or will you spend it or will you say, no we will not spend it because the hon. member for St. John's West is against it. He will get up and he will filibuster, he will make eloquent speeches with impeccable english, he will make the most magnificent oratory opposing it all next year.

Every time over there, if he is in the House that is where he will always be, every year he will be telling us we should not have supplementary supply, we should be the only Government in the world without supplementary supply, we should be the on~y Government in the world that can estimate so exactly what the revenue will be for the coming twelve months that we will be able to estimate exactly what the expenditure will be, we are the only Government in the world we should do it.

He will argue that but he will grudgingly admit that if it is literallymmunexpected sort of thing, really that you could not possibly foresee, you could not expect it to happen such as a great forest fire, be will grudgingly admit that in that case you can spend it and I suppose he will go so far as to say, and if he did he would be right, to say even if you have not got it you should spend it. You should end your year with a deficit you should spend more than you have and contract bills and try to pay off those bills as soon as you can. We did that three years ago.

We ended our year three years ago with a deficit. We spent more money that year than we took in. I think it was largely forest fire, was it not? unexpected - MR. CROSBIE: No, it was not forest fire. Was it not large and enormous MR. SMALLWOOD: Well, I forget what it was but it was $3. million more that we spent than we took in. We had a deficit of $3. million. Last year we took some of our surplus and we paid off part of that debt. We were going to take part of our surplus this year and pay off another

section of that debt and then take a surplus next ·year and pay off the remainder of the debt. This year we are not doing it because we are using our surplus this year for other purposes. The House committee knows what these purposes are increase salaries about which we will be talking when this committee discusses the estimates for the coming 3927

May 12th, 1970 Tape 846 JM- J MR. SMALLWOOD: year rather than supplementary supply for last year. I asked a question when I started, is it any use ~y saying this, and I answered my own question by saying probably not because none so blind, none, as they that will not see.

If you have an hon . member stand up in this House and invent a statement and attribute it to me, invent it, just make it up out of the whole cloth, make it up out of nothing, just invent it, create it as an artist takes brushes and he paints a picture, he is creating the picture, it is not real, it is just a picture and he has created it with his eyes and his brush he created the picture in the same way that an hon. member of this House creates a fiction about me and says that I said that this Government will never again have supplementary supply.

That hon. gentleman will not be convinced by anything I am saying because what he is asking the committee to believe is that I was so stupid, so ignorant, so unrealistic that I would actually say because I believe that the one Government on the earth that would be able to estimate for twelve months ahead exactly what revenue will come in, exactly what money you can spend so there would be no need of any supplementary supply that this would be the only Government on the earth that would not· have supplementary supply.

That is what the committee would have to believe for them to believe the statement attributed to me that I had said that this will be the last supplementary supply. Mr. Chairman, if the bon. gentleman can produce any evidence of that I will resign ten minutes after he produces it. I will go down to Government Rouse and I will hand the Governor my resignation as Premier of this Province.

I will do that and I will deserve to do it because any man who would be such a fool, such an ignorant clown as to get up and say in any given year this is the last year there will ever be supplementary supply brought by the Govern­ ment into this House. Any man who would say that should not be Premier, he should be locked up, he is a fool and a dangerous fool. AN RON. MEMBER: (Inaudible). MR. SMALLWOOD: Well then the Minister of Health might object. He might ask the Treasury Board for a little increase in his appropriations. AN HON. MEMBER: There is nothing from Ottawa. 3 9 2 8

May l:ltn, l'JIU tJJ."l - .. MR. SMALLWOOD: Ottawa does not contribute towards the cost of running the Mental Hospital. This would be a dead expense on the Government of this little Province. Anyone who is locked up here from this House I suppose he would be allowed to have some books sent in to him and if he smokes I suppose he.·:'WOuld be allowed to have a few packs of cigarettes but it would be otherwise a dead expense on the Province. There you are, Mr.

Chairman, yet how am I going to convince an bon. member who has had hallucinations because he did not lie, obviously he did not lie, obviously he did not say something with the deliberate intention of deceiving. That is what a lie is, it has to have the intention to deceive. He must know the facts, he must know the truth and then he says something else with the purpose, the motive must be there, to deceive. That is what a lie is so we cannot attribute motives especially unworthy motives to him yet he says - MR. HICKMAN: Would the Premier like to have his memory refreshed~ MR.

SMALLWOOD: I would like to have the evidence. MR. HICKMAN: Would you like to have your memory refreshed? Do you remember the afternoon when you - MR. SMALLWOOD: My memory, if the hon. gentleman lives to be ninety he may get a memory half as good as mine. MR. HICKMAN: Well anyway, let me remind you - MR. SMALLWOOD: Yes, if I have anything it is a pretty good memory especially for what happens in this House. Mr. Chairman, it does not matter what is happening in the House I hear every word that is spoken unless there is a couple of men whispering to each other and even then I try to hear that. MR.

HICKMAN: Do you remember the afternoon - MR. SMALLWOOD: I cannot sit in this House aod just daydream, I cannot sit here and let my mind go wandering. I listen to every syllable that is spoken here and while a man is epeaking especially if he is on the other side of the House while he is speaking if one of my bon. friends comes to me and starts whispering in my ear I