PRELIMINARY UNEDITED TRAl.~SCRIPT FOR THE PERIOD: THURSDAY - BUDGET DAY APRIL 28~ 1977

I April 28, 1977 Tape 1959 The House met at 3:00 P .~L ~fr. Speaker in the Chair. HR. SPEAKER: Order, please! The han. the Minister of Finance. MR. DOODY: Hr. Speaker, I move that the House resolve itself into a Committee of \-lays and Means and that ?:fr. Speaker do leave the Chair. ~. SPEAKER: The motion is that the Speaker leave the Chair. The hon. Minister of Finance. JH - 1 ~. DOODY: Mr. Speaker, the Budget is recognized by this Honourable House as the most important and critical document "Cvith which we deal on an annual basis.

It sets forth our financial position as a Province and outlines the fiscal mechanisms which will be used by Government to carry out its plans and programs. In a Province such as ours where revenue capacity is limited, the economic base on a relative scale is weak, but our expectations as Canadians are as high as the rest of the Nation, the budgetary actions of Government obviously are a very critical part of our lives.

I believe we have developed, Sir, an understandir~ that stringent budgetary practices, whatever their form, are born of necessity in this Province; necessity to maintain a credible financial reputation; to provide a balance between our revenues and our essential expenditures; to keep borrowing to a responsible level; to maintain reasonable debt servicing costs and an acceptable level of per capita debt; and to live within the financial constraints of an economically poor Province of Canada.

In short, our budgetary practices are a necessity if Newfoundland and Labrador is to be a fiscally-responsible Province of Canada. T."is Budget and the fiscal measures it outlines is a responsible and necessary approach by the Government of this Province. I am presenting Government's financial program to this Honourable House of Assembly in my third Budget in the past 5451

April 28, 19 77 Tape 1960 JM - 1 f~. DOODY: eighteen months. It was on November 24th, 1975, that I presented the 1975 Fall Budget, the first supplementary budget in the Province's history, and one which took necessary steps to correct unfavourable budgetary trends >vhich were emerging at tha.t time. It introduced Government's new restraint program and clarified intentions of participating in the National Anti-Inflation Program.

On l-1arch 26th, 1976, I presented the 1976 Budget ~•hich continued to deal with economic and financial uncertainties of the tL~es and which reinforced our restraint program and also expanded a number of revenue sources.

T.1e approach which Government has followed in these two Budgets and the fiscal measures introduced have had a profound but necessary effect on our current account revenues and expenditures and our overall borrowing program. i.Je have endured the necessity of austerity and I now believe we are at a point in our budgetary process \vhere Government must concentrate on spending its limited resources in those areas of the economy where they can be productive and improve the climate for investment.

The 1977 Budget is responsible in that it continues to contain the level of Government participation in the Newfoundland economy. Assuredly, Sir, this Budget is a major step in Government redirecting its energies and financial support toward viable and productive activities. It expands the framework for long-term responsible financial management in several areas such as municipal taxation and public service pensions.

It is also a target of this Government to reduce expenditure growth to a level less than the growth in the Gross Provincial Product b y 1973-79. 1976-77 IN REVIE~ ~1y two previous Budgets have had as their objective the restraint of rapidly growing Goverr~ent expenditures and the moderation of this Province's heavy borrm.;ing requirements. These objectives have necessitated the introduction of increases in several taxation sources and also meant that certain large projects 5452

April 28, 1977 Tape 1960 JH - 2 ~fR . DOODY: requiring Government activity in key sectors of the economy had to be revie~ved. The 1976 Eudget , in particular, proj?c ted a reduced borrowing program and a current account contribution to captial account and both ~vere a re- affirmation of our objective to maintain a responsible financial position. r.~e estimated year - end result for 1976-77 does show some budgetary variances as in Tab·le 1 of the document to be distributed: 5453

April 28, 19 77 Tape 1961 HR. DOODY: Unfortunately, we are showing a smaller current account contribution to capital account but there were no major individual variances on any of our revenue or expenditure . items 1-1hich caused the year-end surplus to be just over $1,200,000. However, numerous small and unfavourable expenditure variances, combined with the non-receipt of $11,500,000 in revenue from the Federal Government in respect of various programs resulted in net expenditures which were $14 million or just 2.2 per cent in excess of the original budget.

Current account revenues have held up to expectations and indeed, ~xceeded the original budget by nearly $6 million. vle are pleased, Sir, overall with our current J!1 - 1 account position because of the accuracy of our original Estimates, and we are confident that our contribution to capital account once again demonstrates our determination to show a balance bet1-1een current account revenues and expenditures. On Capital Account in 1976-77 the major variance related to Labrador Linerboard Limited.

Our original budget showed requirement of $25,000,000 but the revised position, Sir, was $14 million higher, at $39,100,000. This is a truly disappointing situation and one which resulted in the appointment, some six months ago, of the new Advisory Board to examine and re-assess the future viability of the ~1ill. I 1-1ill be addressing the whole situation of Linerboard later in the Budget Address in order to set forth the course of action which these heavy financial requirements has necessitated Government to take.

Generally, Sir, Government is very pleased . with the overall results on capital account which show a decrease in requirements of $7 million excludi~g Linerboard. One extraordinary budgetary item did arise during 1976-77 and it related to the loan of $78 million to the Gull Island Power Corporation, of which $75 million was advanced during the 1976-77 Fiscal Year. At the start of 1976, we anticipated that Newfoundland Hydro 1-,;ould make 5454

April 28, 1977 Tape 1961 JH - 2 MR. DOODY: its own financial arrangements for the $78 million investment which has been made to date on the preparation of the Gull Island site on the transmission lines and on the tunnel facilities. However, ~.;e have decided in co-operation with Hydro, to execute a loan agreement whereby the Province has advanced the Gull Island requirements to Hydro (through the Gull Island Pm.;er Corporation) at an interest rate of 10 per cent with the full amount of the principal to be repaid to Government upon the start-up of the Gull Island project.

Full details of this loan will be presented to this Honourable House during debate of the Estimates. The borrowing program, Sir, for 1976-77 was a very successful one as the Province floated bond issues in Europe, Canada and in the United States. A significant borrowing by the Province -.:vas a 21-year loan of $50,000,000 from the Alberta Heritage Savings Trust Fund, the proceeds of which form part of the borrowing program for 1977-78. In addition, the Province introduced a weekly treasury bill operation in Canada which has been very well received by the investment community and by the financial institutions.

The Newfoundland and Labrador Hydro Corporation raised $30,000,000 in the Canadian bond market and the Newfoundland Municipal Financing Corporation had a successful $35,000,000 Euro-U.S. issue. ECONOHIC REVIEW A...'l'D OUTLOOK TI1e Economy Throughout 1976, the western economies were recovering from the severe recession which was experienced in 1974 and 1975. Early indications were that the recovery would be a rapid one. However, as the year progressed, these expectations proved to be optimistic.

Growth slowed dramatically in the latter part of the year and the average real grm-1th for the western economies was some 5 per cent during 1976. This was coupled with 5455

April 28, 1977 Tape 196.1J JH- 3 MR. DOODY: an average inflation rate of 8.5 per cent. The high prices demanded for oil by the oil exporting countries continued to create balance of payments problems for the western economies. Canada shared the problems of its trading partners throughout 1976. L~e mandatory program of wage and price restraint assisted in holding the rise in the consumer price index to an average . of 7.5 per cent over the year. However, this moderation of inflation was won only through increased unemployment and declining business investment on a national basis.

L~e latest available indicators show that the Newfoundland economy performed fairly close to our forecasts in 1976. Real growth averaged some 1.2 per cent resulting in a real Gross Provincial Product of $2,600,000,000. Personal incomes grew much more rapidly, Sir, averaging an increase of some 6.0 per cent, and it is interesting to note. Mr. Speaker, that our per captia income here in the Province of Newfoundland and Labrador which is now a little more than $5,000 which is approximately 93 per cent of the average for the Atlantic Region. SOME HON. MEMBERS: Hear, hear! ~.

DOODY: The Wage and Price Restraint Program, Sir, did have an effect on Ne~vfoundland with the St. John's Consumer Price Index moderating to an average growth rate of 7.8 per cent during 1976. It is our expectation that an average increase of some 7 per cent will be recorded in 1977. 5456

April 28, 1977 Tape 1962 JM- 1 MR. DOODY: However, this moderation has been achieved, to some degree, at the expense of unemployment which averaged 13.6 per cent through 1976 and unfortunately, Sir, is not expected to change dramatically in 1977. Resource-based manufacturing output increased encouragingly in 1976 as a result of record fish catches, more extensive processing of fish landed,and considerable recovery in production levels in the newsprint industry. These things have been made to happen.

Fish landings in Newfoundland in 1976 increased by over 40 per cent from the previous year and attained an estimated value of $63,000,000. The production of saltfish reached the highest level of the past seven years, and is expected to remain high in 1977 and strong prices are expected to continue throughout the year. Mining output increased dramatically, reaching a record value of $756,000,000 in 1976, mainly because of increases in iron ore production. The concern over the shutdown at Rambler ~nes in Baie Verte has receded and a new uranium prospect in Labrador is hoped to be in production by the early 1980's.

Recently announced results of exploration for new mineral reserves in the Buchans area have been quite encouraging, Sir, and indicate that activity there will probably continue ~.;rell into the 1980's. The general outlook for mining in the coming years.has, therefore, brightened considerably over recent months. Tne major economic problem in Newfoundland is the obvious absence of immediate and significant employment opportunities.

At the heart of our employment problem is the absence of a strong economic base, and hence, an excessive dependence upon Government. !.>is dependence upon Government, Sir, is illustrated by the fact that about 45,000 people are employed directly by the Provincial, Federal and ~unicipal Governments. The most concerning performance forecast for 1977-73 is the lack of business investment, cvhich r.vill grmv only 54S7

April 28, 19 77 Tape 1962 ~1R. DOODY: 3.9 per cent and the poor performance in the construction sector. While the construction industry is affected by reduced Government capital expenditures, the lack of activity by the private sector is painfully obvious. Consistent growth and an expansion of the Province's economic base will depend largely on increased investment from the business sector. Despite the serious problems with which we are confronted, there are bright spots ~vith potential for positive action.

It has been projected that our labour force will grow by 5,000 people per year over the next four years and we will, therefore, need 20,000 additional jobs by 1981 to prevent our unemployment level from rising. We are confident, Sir, that this job creation rate can be achieved, led by the fishing industry. Offshore Petroleum Resources: .TI1 - 2 The potential oil and gas reserves which lie off the Labrador Shelf and the North East Coast of Newfoundland continue to be one of the brightest prospects in our long-term future.

This Government has recognized the immense potential of these resources and over the past five years has attempted to plan carefully for their development. To date, the Eastcan Group has drilled three successful ~·rells t·7h_ich have proven natural gas reserves ~orl:ich indicate that commercial development is possible. 1·Thile it is anticipated that these natural gas reserves will not be develo,ed within the next several years, it is also apparent that the, Labrador Shelf mav •..;rell contain substantial oil reserves as r.o1ell.

There is little doubt tha.t in the lonp: run, petroleum ~d J 1 be a highly significant factor in this Province's econo~y. 'l'his government, Sir, is awi'lre of the potential resources and has, for sor!'.e ttme, been concerned -r..r;th the frame"t·mrlr in ':·!rich tl-'ev !.r;J 1 be c<.evelopec. T,.Je have achieved a coMprehensive and tmjcrue develo~ment plc:m. for the offshore netroleutl' resources of this Province and I a!'1 5458

~.p r il 28, 1 a 77 ':!.'ape 1962 rB - 3 ~m !)00DY : pleased to indic ate that th: s effort is no,-: re;~.cy to be cofl'l:lunicatec' to the peoole of NePf oundla nd and La b rado r i n some detail. ~'y collea~ ue, the ' inis ter of ~ fines and Ener gy , 1.ri.ll i.n t he very near futu r e mal--e puhlic th:i s P rov ince 's position ~orith regar d to t he future dev eloprn .ent of ou r offsho r e pe tro l eum resources in a 1·1h i. te naper to this bon.

House . uydro Poten t ial - "'bP. de velootr.ent of the hvc!r o electri c resources of our Pr ov ince ~a~ ~ee~ a high pr ioritv of this gover-:rnent and i ts re sol ve to s ucceed in it~ enerS?Y development eff ort s is g~eater today than it ever has be e~. Our o~jective is also t o ens ure that dev elopm ent of our ener gy resonrces :,rill be accomp lishe d in a ~anne r tm ich maximizes both t~e 5459

April 28, 1977 Tape No. 1963 NM- 1 MR. DOODY: the short and long-term returns to our Province. During the past three years, we have demonstrated our commitment to the development of the hydro electric potential of Labrador. Close to $78 million has been expended on technical studies, field investigations and actual construction work related to development of Gull Island, and the transmission of power from that source to the Island.

During this period negotiations have been held with the Government of Canada and the Governme~ts in our neighbouring Provinces, Sir, on the opportunities which exist for collective benefits to Eastern Canada from hydro resource development in Labrador. While active construction work on the Gull Island scheme has been suspended, planning, engineering and discussions are continuing with the federal government and with other parties.

Collectively, the undeveloped hydro electric potential of Labrador and the interprovincial rivers total approximately 7,750 megawatts and should be harnessed for a nation which has these unique hydro opportunities at a time when Canada and the rest of the world is facing an energy crisis. The potential of Gull Island and other developments will not be allowed to stand undeveloped as I believe that the Churchill River and its energy promise has become a project of national importance. Mr.

Speaker, the financial overview for 1977-78, Despite the budgetary measures of 1976 the government found itself face to face once again with the challenges of keeping the 1977 budget under control. We established our overall objectives as being: To continue a responsible financial and fiscal policy approach to improve our credit standing and improve our access to·and reduce our ·cost of borrowings on the world financial markets; to restrain expenditures within our capacity to raise revenue and capital through 5480

April 28, 1977 Tape No. 1963 MR. DOODY: taxation and borrowing; to ~intain a current account which is meaningfully kept in balance and to contain our borrowing at a level which will improve our debt service ratio. NM- 2 The results of our deliberations in dealing with the 1977-78 fiscal position have produced the following overall position: Table II, when the document to be circulated will outline in detail, Sir, the numbers related. In arriving at this position, numerous decisions of major significance have been made by government on current and capital account relating to revenues and expenditures.

These we all considered necessary in order to achieve our overall financial objectives. The projected budgetary position provides for a contribution to capital account of $8,656,000 and capital account requirements of $154.4 million including the remaining portion of the Gull Island Loan. In addition to this, there are debt retirement requirements of $54 million for total borrowing requirements of $199.9 million, or $200 million. And now, Mr. Speaker, the Labrador Linerboard decision.

The most difficult and complex situation this Government has been grappling with during the past two years is the Linerboard Mill at Stephenville. Labrador Linerboard Limited has lost money every year since it was opened in 1973 and the size of the cash requirements provided by its owner, the Government of Newfoundland and Labrador, has been growing. In 1976-77 the mill required $39 million from the provincial treasury. In November of 1976, an Advisory Board of experienced Canadian businessmen, including three senior officers in the pulp and pa~er industry was appointed.

Top management at the mill was changed and steps were taken to revise the marketing organization. ~461

April 28, 1977 Tape No. 1963 NM- 3 MR. DOODY: The Board has been actively reviewing the marketing, the woodlands and the financial operations of the Company. It has also begun a study of possible alternate product lines. The major problems, Sir, which have plagued Labrador Linerboard Limited are fundamental difficulties. The mill is a non-integrated linerboard plant located far from the markets and utilizing wood supply at ' extremely uncompetitive costs.

The cost structure of the mill is high by industry standards and combined with three consecutive years of poor selling prices, the company has suffered the following financial losses: In 1974-75 a net loss of $21.3 million; in 1975-76 a net loss of $34 million; and in 1976-77 a net loss of $41 aillion. During the ~ast five weeks, Sir, the Province has made a special review of the marketing and financial outlook of the company with the Advisory Board. It has also made representations to the federal government for financial assistance and support.

However, despite the sincere and intense efforts of all parties concerned, the outlook of 5462

April 28, 1977 Tape 1964 LB-1. ~"!' • DOODY: the co'!'!pany re!Tiains bleak. T'he projected cash operating reauire!!lents for t~e rotnpany in 1977-78, aL'. of ~.rhich must co~e from the provincial treasury, are $54,800,000. The forecasted sales volume ~or the Yill in 1977-78 is 166,500 tons, Jess than 50 ner cent of its rated capacity. T~e esti!"ated average sellins:t price rer ton is ~188, less than;:the cash cost per ton of production before fixed expenses, before depreciation, interest anrl dect retirement. In 1975, the Company's mill nets averaged S236 per ton and in 1976 they averaged S219 per ton.

The prospects of cash reauirements of approximatelv $54,800,000 and of further losses in 1978-79 resultin<.>: in cash needs of approximately $40,000,000 are st~g~ering.- The resources of this Province are not great enough to ''"ithsta!'c these requirements unless services in other areas are recuced and capital funds di"'Terted from jol:: creation activities such as construction, the fj_shin?- industry and other sec tors.

The cost per jo~ to the provincial treasury of the Linerboard vill far exceeds any realistic guiceline. 'T"his Province has made difficult current and capi.taJ. account decisions along Hith various taxation increases in the Fa1.1 of 1975 and Spring of 1976 Provincial ~udgets to ensure that the financial pcsi tion ofJ the Province ~·'as tr'.ain tained. 'T'he neerl for f:i.nancial responsibility on the part of the Government has never been g-reater.

A!Zainst the baclrg:ronnd of these efforts and the forecasted c2.sh re(1uirements, and the conclusion bv aJl parties Hho have analyzed the T.inerboard ~'ill that it is not a viable operation, the Covern~ent has reluctantly deci~ed to phase out the Co~pany's oper.:o.tions. Existing: ~·lOOcl inventories ~.ri~ . l be converted to ficished pro<'l.uct during the next f cur to six months. T"uring this time perioli, all options of alternate product Jines F:i1J be nursued, as Fell as 5463

April 2 8 , 1 9 77 Tape 1964 LB-2. ~-'11 • D(lODY: further c1iscussions ~-lith the Federal Covernl!'_ent anr! other potentially interested parties. As all !l'.et'1bers of this Honourable House are a~•are, the "l!!agnitude of this decision and its implications, not only for the financi.al position of the Province, but also for the economic future of the Port au Port area, are of soul-searching significance. It was not an easy decision to 1'""-aln~ and every aspect has been explored t0¥7ard continuing operations.

P:ovrever, 'tl7 e must show ODenness and integrity in our dealings 'tlr;_th the people of the Pro1:7ince and -v1ith those outside of Ner,rfoundl.:mc r.r!-..o look to our decisiCin-tllaldng as a pt'iT"e criteria in evaluating our credit­ worthiness. ~ve D-ope that in budgetin~ for the phase-out of operations in four to six months that·we can be pr~Ten to he incorrect. If this f.~ so, if there is any possihilitY of continuing operations, then we "<:dll find it and r.re will implement it.

As a result of Government's decision to shut do-w-n the Linerboard }fil~ the bu~geted cash requirements for Labrador Linerboard Limited in 1977-78 is still $26,700,000. ~~r. Speaker, it is !!!Y intention and the intention of my colleagues to have an early an:d complete debate on the Liner~oC~.rd ~'ill. This debate '"ill cofT'.e early in the Bud?et and Estimates debate. In fact Sir, it should be a sepa~ate debate as early as possible. F'C0NOMIC IYPACT OF Bl"'"DCE'!'A?Y DECISIONS. Certainly, the l'!'ajor budgetary C.ed.sion for 1977-7R, socially, economical] y and .financially, 'has been the tinerboarC. 'fill.

I!'lcleed, He have de] ayed the !1uc1get by more than SL'{ r,:eeks in orcer to ensure a total and completelv comprehensiYe revie~,! of t!l.e situation before makin?-: the final decision. ::oT·rever, the 1977 RuG get contains a series of other major decisjons ':vhich reflect our 2.-pproach to redi.recting the social and resource priorities T.vithin this Province. FISPP~G m~FSTF.Y P'?DSP~TTS 5464

April 28, 1977 Tape 1964 LB-3. ~~.noonY: The 1977-78 F.stimates of the nep art~ent of Fisheries are a reflect ion of this Govetnroent's confirlence in the future of the fisheries and of its determination to provide the immed iate environment for its ~rowth. !ne total expenditure of the repart~ent is projected at $23,777,800 an~ is the la r~est ever projected . Ey co~?arison, tbe l976 - 77~~penditures were closer to Sl6,000,000. ! might also point out that Cove rr~ent intends to ma~e strides in 5465

Aoril 28, 1977 Tape 1965 LB-1. ~'P .nOQTW: 1977-78 tm·mrcs the final planning of the neH Polvtednical Institute with t'-le emphasis being on the i_nitial phase of fishing and marine-related facilit:ies. The fishery is t~e largest employer in the Province anart from Government. At present, there are about 25,000 people e!!'.ployed directly in the fishing: industry and it is realistic to project this figure to increase to 35,noo people in 1985. In addition, those Hho are nm·; employed only seasonally will be ahle to find work for a much longer pe~iod.

Total landin?s in 1976 were alrnost 75n,nor.,000 pounds ~±th a lant~ed valae of S63,noo,ono and the total value adced through processin~ increased to $160,ono,000. Fith the proclaii'.aticn of the 200-rdle li!!1.it and t~. e c1eclaration of extended jurisdiction, the opportunities for e~~~nsion over the long term, are enormous. ~Te~·Jfoundland fishermen should ai!':' to harvest up to 2,000,000,000 pounds of grDuridfish within five years.

In adcition, large· auant:ities of maclrerel, herring and. capljn r_,rjll be a,railable and_ it is realistic for the ~re~!foundland industry to set as its 1 ong- term objective the harvesting: and processing of l,noo,(\oo,noo pounds of these species. It is projected that the landed ,,~due can he increased to ~.;ell in e~cess of $200,000,000 T-Jithin this five year period.

At present, a lar~e volume of fish is leaving the Province in a semi-processerl form and it is our objective to change this situation by encouraging the final processing of the product. 'T'" , r.e long-tern. ohjective is to increase the product 'ralue fro!Tl S 160,000 ,00n in 197n to ssoo,0oo,noo 5y 1985.

Immediate action -.;.JiJ.l be reouired . to ensure that t!le full potential is real:!zec. ..,_.,ere must he a prC"gTat" for fleet retJlacement and expansion, an<"' r-re C1USt !"ake sure that neT .. r vessels embody the MOSt mocern and suitahle technolL"?,Y· ~e Department of risher5es i!'.tends to builc . lf'10 !1er,, Tulti--rurpose vessels over the next fi,re years and 20 of these ·pill 1-e ccnstructeil this year at a cost of 5466

April 28, 1977 Ta"9e 1965 LB-2 ~-'P.DOODY: SLL,51)0,(')00. In acldition, a survey is nm..r being ccnducterl to determine the age and condition of our present trawler fleet, so that replacewent and expansion of the deep-Hater fleet can be planned. ~~egotiations are also unde"!"T..n'l.y Hith the Federal C.overnment to secure reinstatement of t'be Federal subsidy of fishin)2: vessels:~ In t:.~e~ · short tern, it is possible that surplus vessels in Europe may be used to sup~lewent the cteep-water catch capacity.

Preliminary discussions have taken place with the Federal Government on a program of experimer.tal fishing using offshore gill-netting and long-lining !T'.ethods on offshore grounds' The intention is to involve our inshore fj_srermen j,n training programs to enable them to exploit these offshore areas. Additionally, major opnortunities now exist in the-harvesting and processing of caplin, as in 1977, 800,000,001) pounds of caplin ~rill be tal--en off our coast and t".ost of th:i.s ~.ri11 be caught by the '!.ussian fleet.

A l"ajor initiative has heen taken by ~e ... r­ foundlanc companies, ~mrking ~ri th the P-ro·1.Tincial and !-'ederal Governments to ~et ~ore Canadian vessels into tre caplin fishery. The objective is to disnlace foreign effort by buildin 2 un our or·m capability ancl. in 1977 it is planned to ~arvest 80,0f10,0no oounds. An economic recovery in our fist:ing industry r,.;rill represent an attractive opportunity for the private sector. ~here Hill be a need for l!'.ore investment in new vessels and in new processing plants. T~'"'.ere will also be a need for centraU.zed co1 c1. storage anc landing facilities.

Also, it is our view that a ~alanced growth of the ins~ore and offshore sectors of the fishin~ inclustry Pi.ll reouire the provision of certain centralized shore facilities However, it is essential that ~.re plan no~·r to shape the futu1'"e of the industr y and tn ensure thl3.t the industry is pre-par.ec:l to res-pond to ne~.J cnportuniti .es. R0T'SI'TG. 5467

April 28, 19 77 Tape No. 1966 NM- 1 MR. DOODY: With regard to housing, Mr. Speaker, the budgeted expenditure for the Newfoundland and Labrador Housing Corporation for 1977-78 has been estimated $61,8 million consisting of almost Sll million in provincial funds and approximately $51 million primarily from Central Mortgage and Housing Corporation, as well as· from other sources includ·ing DREE. In 197.7 -78 the Corporation will continue actively in existing programmes and embark upon a number of new directions including: (

i) Substantially increased mortgage lending funds, particularly with the introduction of the Rural and Remote Housing Programmes which extends home ownership to low income families in rural communities by relating mortgage payments to income. (ii) Increasing emphasis on the preservation of the existing housing stock through the Neighbourhood Improvement Programme and further negotiations of residential rehabilitation programmes, (iii) Construction of subsidized rental units for low income families at levels equivalent to previous years, but now including provision for the elderly and for the disadvantaged groups.

With high levels of funding available and the new planned directions for housing programmes in future, government is continuing to provide the vehicle to significantly improve the quality of housing in the Province. The challenge now rests with private initiative along with public action to avail of these programmes and ensure that the funds are s~ent and maximum benefits generated. Economic activity - Mr.

Speaker, each year there is considerable concern that the impact of government restraint will adversely affect business and, in particular, construction activity, Our 1977-78 capital account is estimated to be in the vicinity of 5468

April 28, 1977 Tape No. 1966 NM- 2 MR. DOODY: $221 million and most of this goes directly into the economy in the form of water and sewer projects, highway construction, public building construction, resource- related projects such as fish handling facilities, forest access roads, and development loans. All of these projects are employment producers.

In addition to direct budgetary expenditures, government agencies such as Newfoundland Hydro contribute . in a major way to economic activity; Table III in the document to be distributed gives some indication of the programmes which are included in the 1977-78 overall government programmes which to a large measure provide economic stimulation and employment opportunities. · I may quote a few of these items, Mr.

Speaker, Newfoundland and Labrador Reusing $62 million, Newfoundland and Labrador Hydro nearly $62 million, transportation development DREE $35 million, highway improvement and construction nearly $20 million, revitalization of the fishing industry nearly $17 million, water and sewer systems - NMFC $15 million, and on it goes for a total of some $293 million. Despite the high level, Sir, of economic activity which will be stimulated by government, our financial position has not allowed us to proceed with any major additions to our hospital construction programme.

Finding money to build the facilities and providing the subsequent operating funds is no easy task and government has decided to continue with its moratorium on major capital wcrks in the social field. As a result, Sir, the hoped-for hospitals at Grand Falls, at Burin, at Clarenville, Bonavista, Channel, and Placentia will all be deferred. The total estimated cost to complete these facilities is almost $70 million. I might also add that some renovation work will be done at the Janeway Hosnital and the Waterford Hospital extension 5469

April 28, 1977 Tape No. 1966 NM- 3 MR. DOODY: will be completed in the 1977-78 year. Unfortunately, the magnitude of the total hospital needs, including the necessary expansion at the Grace Hospital, is more than this Province can handle in the short term. Government has also decided to defer a start on the construction of the new library at Memorial UniversitY which is estimated to cost between $11 million and $13 million to complete. We will not be able to add any additional monies to the already committed $15 million provided for school construction in 1977-78.

However, Sir, we will be discussing with the Denominational Educational Committees, the possibility of extending our present guaranteed grants to them over a longer time period, With regard, Sir, to federal/provincial fiscal relations, in dealing with our budgetary position, one of the major factors was the change in financial arrangements with the Government of Canada. As hen. members of this House are aware all Canadian provinces have over the past eighteen months been negotiating a new set of financial arrangements with the federal government.

These negotiations were concluded by First Ministers at a conference in December of 1976. The new Act called "The Federal/Provincial Arrangements and Established Programmes Financing Act"

April 28, 1977 Tape No. 1967 NM- 1 MR. DOODY: was passed by Parliament of Canada earlier this month and will cover fiscal sharing to 1982 and beyond. The Act covers such important programmes as Equalization, Revenue Stabilization, the Income Tax Collection Agreement, Reciprocal Taxation, Revenue Guarantee and a new system of tax and cash transfers replacing certain cost-sharing arrangements. These arrangements are complex and there is a budget supplement which explains them in a more detailed and technical manner.

Newfoundland's position throughout the negotiations was that revised revenue sharing arrangements must be equitable if poorer provinces were to continue to provide _public -services on a par with other parts of Canada. To this end, Sir, we supported: retention of the representative taxes for determining equalization entitlements; retention of the revenue guarantee programme; and adoption of the proposal for established programme financing that we felt was the fairest and the most equitable to both levels of government.

We are very concerned over certain changes made to the equalization programme which, Sir, is probably the most important part of the Act for this Province. Although the basic principles have been retained, the revised programme will not pay the Province what it would have received under the old arrangment• The Provinces also agreed.

Sir, that the new Revenue Guarantee Programme which was meant to ensure that Provinces would not lose income revenue through changes to the Federal Income Tax Act in 1972, be retained past 1977, Subsequently, the Provinces asked for four additional personal income tax points as part of the common provincial position to cover the losses from the termination of the old Revenue Guarantee Programme. The Provinces were forced to accept one personal income tax point p~~s an equivalent amount of cash equal to a further tax point. 54?1

April 28, 1977 Tape No, 1967 NM- 2 ~. DOODY: The new Health and Educational Financial Arrangements are a reflection of a stated Federal policy to reduce the open ended cost-sharing arrangements which have been favourable for provinces such as Newfoundland. The Health and Education standards that you enjoy today are a reflection of these programmes. However, Sir, the day of the 50-cent dollar has passed and future federal contributions towards health and education services will no longer be determined by the level of provincial expenditures.

The new arrangements are kno•Nn as Established Programmes Financing and provide that federal funds will grow at the rate of the growth of the economy. Post-secondary education, health insurance, Medicare and certain Extended Eealth Care Programmes will, in the future, be "block-funded 11 through abatements of income tax points plus an equivalent amount of cash.

While there are advantages to the new arrangements because of greater flexibility in provincial spending and the setting of priorities, the growth rate in these revenues for a Province still in the catch-up stage that our Province is in, will make our position, as it relates to national standards, that much more difficult. On balance, this Province will receive less money under the new arrange~ents in 1977-78 than it would have under the previous arrangements. And now, Sir, the Collective Bargaining Post Control •. Government, ~r.

Speaker, also had to examine carefully its collective bargaining policies in view of growing wage costs. We presently employ a total public service of almost 29,000 employees with an overall wage bill in excess of $400 million. This government, prior to the introduction of the Anti-Inflation Programme, experienced many financial difficulties associated with public sector wage increases and it was becoming increasingly evident that we needed some sort of control on a national basis to provide moderation of the growing expectations.

To date, we have fully supuorted the Anti-Inflation Programme of the federal government and we have lived within it in our collective

April 28, 1977 Tape 1968 IB-1 '"' ni"JODY : bargaining process. :'-foreover, ~!e have stated our desire to continue with the Anti-Inflation Progra~e until the end of its thr.ee-year life. ~rany provinces of Canada are concernecl that the re~ova] of T!'andator~' r,Ja()'e controls ~·rill Fitness a re-e!T1er?ence of the diffj culties experienced prior to controls. The Coverm"!ent of Newfoundland and Labrador does not believe that this will occur and we are committed to an approach ~mich Pi11 ensure that it ~-Tj. ll not occur.

Thus, the tire is opportune for all of us to consider a re­ an~r:::l.isaJ of policies and practices governinp.: both public anC. l"riYate sector compensation. ~·lhile it 1""ay },e necessary to establish cert;:o.i!1 de-control procedures, "'e are convinced that once the Anti-Inflation Programme runs its course that it should l;e removed totalJy lvith the possible exception of a monitoring agency that may be necessary to revie-.:.T any adverse trends whicr. might develop. ~[1 is 1-li.ll, hm·.7ever, mean that all ?rouns including !T'.anag-ement, labour, government, the public sector and the private sector must have a deep understanC.in?- of a common approach to collective bargaining.

T,Je tr'ust take intn acco1.mt t!:"~P. neer! to coTlsj der all ele!"'.ents of compensation a.nd therefore estab] ish a total coTTipensation approach to eollective bargaining. Inclucled in such an approach is the ability to pay concept, whjch is so often lost, parti cnJ ar1 . ~, in the public serv:i_ces. 'T'here must ce an acce!'ltance by all interestecl . part:Les of the broacer responsjbHities inherent in the bar?"aining process. In particular, there !!lust be an a~,rareness of the neec for an apDroach at the ba~gaining table ,_7hich is not in isolation of the fina.nc:!<l-1 reaJ it:!'_es of our economy.

The ?rowing si)mific;mce of the overaJ 1 puhli c service salary bill in relation tc- the provincial economy and tl:.e abilit:' of the Province to r:enerate a<'lditicnal revenues fro!" strained sources to cover increases for ourlic servants r,;jll h2ve a T'1Uch more refi.njtive and :[lT<?.ctical irnl)act on public sector COll"f.lensation j_n tf\e years aheac. Propnsed ""unicioal Fiscal Fan;:1_p~e!!1ent PoJ ::icies - ":'he fisc<?.l prol:lleTI>s f acin? 01.1r !!!unicioalities in •,re•-:rfoundlc>.nd h.?.'!e been of concern to the provincial government for so!"e ti~e.

The r·!hela.n ".oyaJ. r.ol'1l!'ission came to the conclusioll that the l"!unjc:(paJ revenue structure in 5473

April 28, 1977 Tape l!ln8 IE-2 ~"'P DOODY: Nerdoundland was fulJ y a cleca.rle behind the rest of Canada and revealec that this Prnvince 'has the least ~eveloperl. !T'ttnici?al re,renue system. in ra!lada. \fuile it appears t'hat the citizens of ?:-Te~,·foundland and Labraclor i~entify strongly with local and regional issues, it also appears that municipal p.overnments are reluctant to exercise self-reliance and independence as it pertains to the ~Q~djng of local projects. In !!'any cases, of course, limited tax hases are the cause.

In 1977-!978,government expenditures directly relate~ to TI'unicipal assistance totalled more than %5 million·. And O!lce again, Sir, in the 'budget documel'.t there is a ta~le ~,·ith the .:wpropria.te breakdo':<m.

The :;<rant policies follo'.rec:l by the pro~incial government do not accO!'l'fl] ish a totally fair ar.d equitable s,1stern of a.1lm·•ing municipalities to he financially responsible. 1t is a~~inst this fratre\,Torl<- of municipal fiscal !T'anaJ?;e!"ent that tl,e provincial governYTtent intends to effect a reform of the municipal fiscal structure in ~Te'·'fonn.c1land to a more cohesive, e.quitab}e and ratjcmal basis. r,7e intend to meet o;d th !!'unicipal governments to accomplish these ohj ectjves and ~·7ith their co-operation, \·7e intend to establish a un:tfoLM ta."Cation base at the rmnicipal level based or. real property. r.oncurrentlv a host of miscellaneous taxes to+·,ich are presently in existencs at the !l".unicipal level cvill nn longer be necessary.

In this manner, ~·7e hope to be able to i!!lprove the Province's overall tax structure by T"aking it more equitable and less regressive in nature. Further, Sir, r.re in tend to estahlish a neto! system of proviDcial p-r~nts to l"'unicipalJties which o;.rilJ con!=olidate all T)revious grants in one syste!'l, and ~e cUrecte~. tOI·rards cash requirements nf the l"'Unicipality and a~-rarcecl, 1:-ased upon obiectbre financial criteria. ~ - Te l'!ope that such a uniform ~rant system will encourage responsi=::le fiscal management at the municipal level. It is also our intention, "r.

Spea.!<-e1", that resnonsilJility for the re'lie,,r of municipal capital projects ~-!ill l;e vested r.Tith a ne~·7 Board <md ~-7e ~ve are presentlv examinin~ the inte.gration of such a Ro~- rd torit1:1 the operat:i ons of the ~~evfoundland Yunicipal Financing Corporation. 5474

. pril 28, 1977 Taoe 1968 13-J It is the government's sincere wish to assist municipal development in this Province. As a conseQuence of the rate of chan?e v.mich has taken place to date, He have decided to take the initiative to accelerate such change. Only in this manner will it be possible for us to bring about a I!!Unicipal structure consistent with other Canadian jurisdictions. Public Service Pension Policy - Yr. Speaker, another ~..ajor area of buc1getaey poU.cy wich this ad!!"inistration has been reviewing is that of the various pension plans of government and of its agertcies.

There is growing concern over our approach over the past vears to retain employee contributions in the general revenues of the Province. Although our pension plans are sound on a cash-flow, pay as you go, basis, the l:;tst actuarial study in 1974 estimated our accrued pension liability for existing employees and pensioners to be in excess of $160 million. A full-scale 5475

April 28, 1977 Tape 1969 PK - 1 Mr. Doodv: actuarial study will be taken and will form the basis for significant pension policy decisions. Our pension policy deserves very serious consideration and government realizes that our current pension structure will create long-term financial concerns unless action is taken toward funding the pension plan. The Province must not be faced in the future with a position where the short-term burden of stablizing our pension obligations will be too great for the Province to bear.

This government has decided to introduce a form of funding of employee contributions in the next fiscal year and the detailed actuarial study, which I mentioned, will aid us in the decision on how to proceed. Among other things, this study will determine the magnitude of the government unfunded liability, and will recommend appropriate contribution rates and alternative methods of funding of all pension plans.

However, I can confirm that if there is a need for an increase in employee contributions, it will not come into effect until the funding arrangements are introduced and the need for increases is fully explained. Now, Mr. Speaker, our Current Account Overview for 1977-1978. With all these major policy issues facing government on de-control, municipal finance, policy pension, Linerboard and Federal/Provincial relations, the achievement of a reasonable position in our 1977-1978 current account has indeed been a budgetary challenge.

The cornerstone of our ability to improve and expand existing programmes and to introduce new programmes rests with our ability to raise revenues. Table V in the document summarizes our current account revenues by major source and they total $956 million in 1977-1978 as compared to $826 million for 1976-1977: The growth in revenues of nearly 16 per cent, Sir, is not an accurate reflection of what has really occurred due to the adjustments related to the new Federal/Provincial financial arrangements. 54~6

April 28, 1977 Tape 1969 PK - 2 Mr. Doody: Nevertheless, the effective adjusted growth rate on a comparative basis is still high and it is estimated to be approximately 13 per cent. With this potential growth in revenues the challenge still was to keep expenditure growth down to that level and to achieve a meaningful current account contribution on capital account. This has not been easy but our final budgetary decisions produced a total current account expenditures of $947 million as compared to $824 million in 1976-1977 - an effective increase of 11.8 per cent when adjusted for the new financial arrangements.

In order to achieve this limited expenditure growth a number of decisions were necessary to give effect to the on-going programme of restraint. A major programme elimination which has already been announced is the $600 home ownership grant for the purchasers of new homes, and this decision will save government $1.8 million in 1977-1978. We ~egret this decision, Sir, but in view of the expenditures that we were making in the housing area generally, we felt that priority budgetary allocation dictated some reduction in this area.

In the 1976 Budget the area most affected by restraint was probably the health field and in the 1977 Budget it will probably be said that education expenditures, which now represent almost 30 per cent of our total budget, were the ones most directly affected by expenditure programme reductions. For instance, we have eliminated the $10-per-week training allowance paid to students living at home and attending the College of Fisheries, the College of Trades and the various vocational schools. No change has been made for students living away from home.

In addition, we have decided to el~inate some of our scholarship and fellowship grants to be awarded in 1977- 1978. Government, Sir, also intends to continue with strict policy towards the operational grants to School Boards and we will be encouraging School Boards to use funds from their School Tax Authorities to supplement the grants from government, which in 1977-1978 will be $24,270,000 compared with the $22.2 million in 1976-1977. Of course, 5477

April 28, 1977 Tape 1969 PK - 3 ar. Doody: no change will be made in our policy of directly providing the cost of insurance for School Boards. We will also be changing the methods of granting substitute teachers to School Boards to reduce the 5478

April 28, 1977 Tape 1970 IB-1 ~f!'. • DOODY : expenditure in this area. He will also continue to provide restrictive operating grants to Yetrorjal T"ni~rersity and to its ~"edical School. Table VI j_n the budp.:et docu!!1ent indicates that hospital operating costs, teachers' salaries, jnterest on the public debt and general go~rernment salaries, ':\earl. the list of expenditure items in 1977-1978 on current account. Generally, ~e have been able to sustain, Sir, a very high level of support for all government services c_uring 1977-1978.

The announced ~~penditure reductions although not encouraging, are certainly of no significant ~agnitude when one consicers that the Province of ~Te~·rfoundL:md is now supporting a curcent account operation of almost $1 billion. If I may quote some of the l1"lajor current account expenditure items from the table, Sir.

Fosp ital Opera_ting Cost -these are 1977-1978 figures- ahout $141 ~illion; 7eachers's Salaries in excess of $139 million; Interest on the Outstanding Debt more than $128 !!'_illion; General Service Salaries more than S128 million; Sodal .Assistance more than $49 million: Operation of Homes for Special c~n~ Grants to School Boards T'lore than S22 million; for a total of $947 million. $22 million; ~·r. Speaker, the government has dec iced to grant an increase to all pensioners cur'!'ently receiving pensions under the various provincial public service pension plans snJ-fE !.1:0N. 1-'EYR:F:>'S: Rear, hear! ''T'.

DOODY: - effective P.pril 1, 1977. The general increase is structured in a m?.n-ner tn provicle the ~'!'e<'l_ter percenta?e i-rcreases to the nersons with the lor.rest pension incomes. Consequently, an increase of $2.6/1 a year or six per cent, Hi:ichever ts the greater, c;ri_l]_ be aFarder' to an ind:Lvidual maximtrtTl increase of $ 72(). I am also pleased ~o announce a six per cent jncrease jn our social assistance p8_YJ!!ents effective "c>.y 1, 1977. ~-· noonY: In addition, in an effort to attack fre difficult asDect of the tmemployt"'_ent prol:Jlem foe tr.ose on social assistance, government 5479

April 28 , 1977 Tcpe 1970 }"? • J"OODY : intends to expand its Special Job Creation Programme. SO~ RON.

ME~~E~S: Hear, hear! '~. noonY: Government has T!"aC.e orovision for the creation of one thousand additional johs to be implemented during the current 1977- IB-2 1978 fiscal year. ~~erever possible, these projects Hill be directed at strengthenin~ the resource base and resource-ot"iented ~acilit:i.es. ~"any of the projects are relatecl. to the fishing, fot"estry anfl tourist industries. '!'hese projects t•rill be carried out by the I'epart!!'ent 0f Social Services in co-cperation r..J'ith other Depat"tments of government since most of the. people e"IT~ployed ~·'ill be social assistance t"ecipients.

Fiscal and Taxation. ~·easures - ~-Jhen our expenditure plan was finalized, ~;e found ourselves in a position ~mere o_ur current account dj d not, in our viel-T, have a meaningful surplus ancl one ~mich ":auld stand up to the scrutiny of financial investors. Therefore, He once ag:ain had to look at the fiscal and taxation T:l.easures r.-1hich ~..rere available to us to make our taxation system. more eauitahle but, at the sal'!'.e time, Sir, increase the revenues accruing to the provincial treasury.

In order to proceed in a resnonsible manner t..rith the 1977 Budget, t,Te believe that additional taxation rnea~mres are necessary to achieve a proper fiscal positjon. Therefore, Government has decided to: (

l) Increase the provincial pers~nal income tax from 56.5 per cent of the federal basic tax to 58.0 per cent effective July 1, 1977; an increase of less than one per cent on total personal income tax P<".yable. I should point out that the increase '"-'lill not result in any signific;mt change in t!:-.e total tax liahility for the avera~e taxpaver.. "PoT instance, Sir, ? f<!TT'.ily of fou,.. P-;th an annual income of $10,000 can anticipate a ten dollar tax increase. In the S 15,000 incorn.e level the increase will he anproximately t"' enty-fi,Te dollars. :-o the increase is not a significant increase.

But the increase partiaJ J.y offsets t~e clecisi.on l-,y the fecleral governtr'.ent to terminate the old P.evenue t';uarantee Propramme. It r.,ill prov:i.rle adcitional re'Tenue, Sir, in 1977-1'?78 of S:Z .5 TT'illion and p-ill ovet" a full ta.'{ation year yieJ.d S4,200 ,rno. 5480

April 28, 1977 Tape 1970 IB-3 :C'P • D00DY : (ii) nur Tot:-acco 'Tax will be raised, effective immediately, hy one-fifth of one cent per cigarette or four cents per pack of t~·7enty cigarettes. Thi.s increase in To~acco Tax ~,>ill yield us $2.2 million in the forthcoming fiscal year. 5481.

April 28, 1977 Tape No. 1971 MR. DOODY: The Insurance Premiums Tax which is presently seven per cent will be raised, effective· . immediately, to ten per cent and we estimate that this will give the Province an additional $2.8 million of revenue in 1977-78. Mr. Speaker, a number of minor adjustments will also be made in the Retail Sales Tax Act including the extension of the base to cover the sales of cable TV NM- 1 services.

Although this extension will not result in any substantial revenue to the Province in 1977-78, we feel it is fair to give full notice of our intentions at this time so that the installation of cable TV can be carried out with this tax in mind. There will be a number of miscellaneous adjustments to the Retail Sales Tax Act which, although they are only minor in nature will probably yield the Province an additional $800,000 in 1977-78. These tax increases, Mr. Speaker, will be offset by the following decreases in the Retail Sales Tax base: (

i) All meals, whether consumed on or off the premises, will now become taxable, however, any meals which are equal to or less than $3.00 per person would not be taxable. This measure will bring us more into line with the taxing practices in the rest of Canada and it is estimated that it will cost the Province approximately $1 million in the next fiscal year. This move was precipitated more by representation from the student bodies across the Province, the vocational schools and the university and at the College of Fisheries because they felt it was most unfair, in the way the present taxation system was being implemented. 5482

April 28, 1977 MR. DOODY: SOME RON. MEMBERS : MR. DOODY: Tape No. 1971 NM- 2 (ii) Sir, to conform with taxation practices across Canada and to be more equitable in the field of housing, mobile homes will now be taxable at 50 per cent of their sales value thereby saving the average consumer an estimated $900-$1,000 per unit. Hear! Hear! This ~easure,we hopeJwill assist local mobile home manufacturing and that it is a very positive forward step. (iii) In recognition of the h±gh cost of domestic electricity and heating fuels, the Retail Sales Tax will be removed from all insulation materials. SOME RON.

MEMBERS : Hear r Hear! MR. DOODY: This move, Mr, Speaker, will be consistent with our encouragement to people to conserve energy and also consistent with our approach to keep necessary en.ergy costs to a minimum. The overall net effect of the taxation changes which I ~ proposing to this han. House, Sir, is approximately $9.4 million in additional revenue on an annual basis. In conclusion·, Mr. Speaker, I believe that this government has brought forward a re$ponsible and a realistic financial plan for 1977-78.

The current account expenditures of $947 million and gross capital expenditures of $221 million represent a total expenditure programme of $1.1 billion which is almost an eleven per cent increase over last year and includes both the continuation of many public service·programmes and the expansion of others in areas which will create additional jobs. Unfortunately, Sir, the plan does not signif~cantlv expand our economy and our financial resources have necessitated the restraining of other expenditure programmes and have resulted in certain tax increases. 5483

April 28, 1977 Tape No. 1971 MR. DOODY: The decision to phase out Labrador Linerboard Limited, Sir, is certainly the most difficult decision this Government has ever had to make. The realism of the situation at Linerboard, combined with our overall financial resources, has necessitated this difficult burdensome decision. More than ever before the budget NM- 3 for 1977 demonstrates the stark realities related to the limitations of the public treasury of this Province.

Despite the many opportunities related to resource development in this Province, we are not yet at the point of turning the corner toward prosperity. Although, we have tremendous potential, Sir, for the fishery, hydro development, and offshore oil and gas, and although employment opportunities will result from these developments, we find oursel,res in the short term having to deal with the reality of our need for financial constraints. The stringent approach to financial management which we have followed in this and other budgets is not a popular approach from a political point of view.

Nevertheless, it is the responsible approach and one which we have had to take. The injustice of regional disparity continues in this country 5484

April 28, 1977 Tape 1972 PK - 1 Mr. Doody: and our true wealth as a Province will only increase at a rate significant enough to allow us to provide sufficient job opportunities if both the Federal Government and the private sector combine with the Provincial Government to productively expand the economic base of our Province. These are uncertain times, Mr. Speaker, times which require tough, courageous and decisive actions. I am con£ iden t, Sir, that the people of this Province will support us in our approach to responsible financial management. Thank you, Mr. Speaker. SOME HON • MEMBERS~ Hear, hear!

On motion debate adjourned until tomorrow. MR. DOODY: Mr. Speaker, I have a message from His Excellency The Admistrator. MR. SPEAKER: A message·addressed to the han.

Minister of Finance reads as follows: 11 I, the Administrator of the Province of Newfoundland transmit Estimates required for the public service of the Province for the year ending 31 March, 1978, in the aggregate of One Billion, Twenty Million, Three Hundred and Nineteen Thousand, Five Hundred Dollars -($1,020,319,500) and in accordance with the provisions of the British North America Act of 1867, as amended, I recommend these Estimates to the House of Assembly. (Sgd) R. S. Furlong, Administrator." (l'lR • DOODY : Mr.

Speaker, I nove that the message, together with the Estimates be referred to a Committee of Supply. On motion that the House resolve itself into Committee of Supply, Mr. Speaker, left the Chair. - ---~ On motion that Commit'tee rise, report progress and ask leave to sit again, Mr. Speaker returned to the Chair • . 5485

April 28, 1977 Tape 1972 PK - 2 MR. CHAIRMAN: Mr. Speaker, the Committee of Supply have considered the natters to them referred and have directed me to report progress and ask leave to sit again. On motion report received and adopted. The han. Minister of Finance. MR. DOODY: Mr.

Speaker, I give no·tice that I will on tomorrow ask this House to resolve itself into a Committee of the ~~ol~ to consider certain resolutions relating to t he imposition of a tax ~ I give notice that I will on tomorrow ask this the Whole to consider certain resolutions related to the imposition of a tax on retail sa~~~ I give notice that I will on tomorrow ----ask this House to resolve itself into a Committee of the wnole to consider certain resolutions relating to the imposition of tax on tobac~~ giv~otic~ that I will on tomorrow ask this House to resolve itself into a Committee of the Whole to consider certain resolutions relating to the imposition of a tax on insurance premiums • j{ .1\ ~ On motion the House at its rising adjourned until tomorrow, Monday, May 2, 1977, at 10:00 A.M. 5486