April 3, 2001 HOUSE OF ASSEMBLY

PROCEEDINGS Vol. XLIV No. 11

The House met at 1:30 p.m.

MR. SPEAKER (Snow): Order, please!

Statements by Members

MR. SPEAKER: The hon. the Member for Humber East

MR. MERCER: Thank you, Mr. Speaker.

Each year the Canadian Forestry Association awards a community the title of

Forestry Capital of Canada. The award recognizes a community in Canada which is

noteworthy because of its commitment to and its dependence on the forest

resources and the community's civic-minded recognition of this

interdependence.

Since it was established in 1979, the Forestry Capital of Canada award has

normally received attention during National Forestry Week but in recent years

activities have been expanded to include special events throughout the year as

well as permanent legacies.

I would like to congratulate the City of Corner Brook on recently being named

Forestry Capital of Canada for 2002.

SOME HON. MEMBERS: Hear, hear!

MR. MERCER: I also want to wish the people of Corner Brook well as they

work to ensure that the impact that this designation is evident during this

special year and also into the future.

Thank you, Mr. Speaker.

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

MR. OTTENHEIMER: I wish to pay tribute today to a widely celebrated

teacher in Newfoundland and Labrador who, on March 30, demonstrated tremendous

courage in

an act that I believe warrants notice in this Legislature.

Music educator Susan Knight, a highly respected music teacher in this

Province and the founder of the Newfoundland Sympathy Youth Choir, announced she

was resigning as a music teacher in protest over the government's decision to

cut the time allotted for music education in primary schools. She made clear

that this was a move in the wrong direction that would have serious implications

for our students and she was joined and fully supported in making that statement

by a large contingent of educators, parents and members of the arts and culture

industry.

MR. SPEAKER: Order, please!

Hon. members all know that statements that are reserved for members ought not

to be of a political nature and obviously this is, in the Chair's opinion -

AN HON. MEMBER: Oh, oh!

MR. SPEAKER: Order, please!

MR. OTTENHEIMER: (Inaudible) of independence and

an act of judgement by a

constituent of mine -

MR. SPEAKER: Order, please!

I ask the hon. member to take his seat.

It is in the Chair's opinion that this statement is political and ought not

to be presented at this time.

The hon. the Member for Torngat Mountains.

MR. ANDERSEN: Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. ANDERSEN: I rise today to inform the House of a community forum which

took place in Nain from March 25 to March 28.

Mr. Speaker, it was about this time last year that the community of Nain went

through a very difficult time when we saw a large amounts of suicides over a

short period of time. Determined to make Nain a better community they began a

healing process. People from the five Aboriginal communities in Northern

Labrador gathered in Nain, along with two adults and a youth from Pangnirtung,

Pond Inlet, and Cambridge Bay. They spoke over a number of days on the steps

that they are taking to try and make their community a better place to live.

While these people have taken the right approach by playing the lead role, they

are showing the Province and the rest of Canada that they are determined to put

their life back in order.

Mr. Speaker, while they do that, I also caution government that for some of

the problems that was caused to these people, the government too has a role to

play. I congratulate the people on the North Coast for taking advantage of a

meeting such as this to try and put their lives back in order. By doing that, I

congratulate the organizers and the people in Nain.

SOME HON. MEMBERS: Hear, hear!

Statements by Ministers

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

SOME HON. MEMBERS: Hear, hear!

MR. BARRETT: Mr. Speaker, I rise today to inform hon. members of a very

serious situation the Province is facing right now.

As my colleagues certainly know by now, snow clearing heavy equipment

operators with the Department of Works, Services and Transportation are

unionized members and are now on strike.

As per the essential services agreement signed with NAPE, the department has

one employee operating equipment from each of the department's forty-four

depots.

Mr. Speaker, the weather over the past several days has put the department in

a very difficult situation. The number of essential and management employees we

have right now are not enough to cover the demand for snow clearing throughout

the Province.

My officials tell me highways and roads are closed in various areas of the

Province and that driving in most other areas from Central Newfoundland east is

extremely difficult. Mr. Speaker, the forecast for the next day or so does not

look promising.

Those employees now working are doing their best to keep roads open, but only

so much can be done with limited resources. My officials in the Clarenville

area, which is being particularly hit hard, had to hire the services of a

contractor to assist in some areas, but the weather is making it extremely

difficult to make much progress.

Mr. Speaker, we are very concerned about this situation. Yesterday one of my

officials contacted a union negotiator for MOS on a number of occasions and

requested the allocation of additional essential employees to address the

situation. We received a negative response to that request.

As of right now, we have not received an official response from the union,

but we have been told by a union negotiator that we can expect a response by the

end of today. We have written the union again to ask for another response.

Mr. Speaker, if we are not granted this request, we will have no choice but

to engage the services of private contractors as necessary to try and address

the situation. We are asking the union and picketers for life safety reasons,

that if we have to go this route, not to interfere with this process. I believe

they will understand the seriousness of this issue.

We have numbers in each of our regions where people can call for emergency

situations. We have personnel monitoring road conditions and available to take

calls twenty-four hours a day. Or if there is an emergency, individuals can also

contact the local police detachment.

Mr. Speaker, acting in the public interest is government's number one

concern right now. We have all available resources acting on this and are

managing the situation. We are monitoring diligently and will do what is

necessary to improve the situation.

Thank you.

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

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

This is indeed a very serious situation. The question that begs to be asked,

over the last several weeks government had provided, very publicly, to all

members, or all people living in the Province, that they had entered into

agreements; that they themselves had selected what they felt were essential

services in the event of emergencies; that they themselves - and government has

this right and role to designate employees for essential services in the aspect

of a strike. Part of the side agreements, or side negotiating that goes on, is

that government indicates to the bargaining units that in the event of a strike

the following people, or following specialities, or following specialists would

be required for emergencies.

What we see here, in my view, is the minister asking for the union - fair

enough, but it begs this question: Why didn't government anticipate possible

emergencies six weeks ago? After all, you do not plan for the best case

scenario. You do not plan for sixteen to seventeen degree weather without having

to plow the roads. In the event of public services being jeopardized, you do

plan, I suppose, for the best or for the worst case scenario which would be the

scenario we are presented with today.

I am not going to elaborate any further because we will deal with this issue

and the issues surrounding the maintenance of public services in Question

Period.

Thank you, Mr. Speaker.

MR. SPEAKER: The hon. the Member for Labrador West.

MR. COLLINS: Thank you, Mr. Speaker.

I can echo the statement made by the previous speaker on this as well.

Essential services was something that was agreed jointly by both parties. Again,

you do not plan for the best case scenario; you plan for the worst. My

understanding is that NAPE have responded to requests around the Province from

different people. I ask the minister: Instead of having an official from his

department call a negotiator, why didn't the minister take the situation in

hand himself and call the president of the union and make such a request?

Oral Questions

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

SOME HON. MEMBERS: Hear, hear!

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

My question is for the Premier, or whichever designated minister would like

to answer it today. In view of the fact that the Province has said for the last

several weeks - six or seven, as far as I can determine, at least - that in the

event of a strike the maintenance of emergency services and essential services

will not be jeopardized, I would like the Premier to stand and answer the

question today: How is it that the Province finds itself in the situation today

where people's safety is jeopardized all over the Province, where people have

been stuck in ambulances, stuck in buses for the last thirteen to fifteen hours?

How is it that a government who six or seven weeks ago told the public that in

the event of a strike we would be fully prepared, how is it now that you have

gotten caught with your pants down?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Thank you, Mr. Speaker.

I understand the Opposition wanting to raise a particular issue. The approach

taken by the government in each of the departments in working with the public

service unions, was that rather than unilaterally declare - because it is the

workers more so than the government itself who would be able to apply the best

judgement as to which minimum level of service they would agree to, because they

also wanted to be able to operate an effective strike.

We are trying to do this as a partnership with the union, because the issue

they have been talking about publicly, in case the Leader of the Opposition

missed it, is about respect. We respect them enough to value their judgement as

to the level of service that should be provided to provide basic essential

services.

The departments involved and the government agreed that in the case of MOS,

that for the depots, a starting point of one per depot - because the union had

also indicated quite clearly, and it is on the public record, that if there was

an unforseen circumstance, such as what is happening today, they would supply

extra and additional above and beyond any that were declared. That is the

process that we are going through now. Unfortunately, it is taking us a little

bit longer than desired, quite a bit longer actually, to get a definitive answer

from the union as to whether or not we can put some extras in place, because we

did this by agreement with them, valuing their judgement as to what level of

service could be provided.

SOME HON. MEMBERS: Hear, hear!

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

MR. E. BYRNE: (Inaudible). I have not missed it at all, Premier. The

problem is that you and your government have missed it for ten years. That is

why we are in the shape we are in today. If anybody has missed anything, it has

been you.

SOME HON. MEMBERS: Hear, hear!

MR. E. BYRNE: Let me say this: The blame game has started from the

Premier. That is what has happened here. Let me quote him this morning when he

said: Some of the big issues with respect to safety, in issues that Minister

Barrett was dealing with, the biggest issue or concern for us is monitoring what

is happening in the Province today and trying to get some minimal acceptable

level of services agreed to.

How can you make that statement today when six weeks ago you said that a

minimal level of acceptable service was agreed to, Premier?

SOME HON. MEMBERS: Hear, hear!

MR. E. BYRNE: Why is it that you did not effectively plan for a situation

that we are in today?

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Thank you, Mr. Speaker.

Let me answer the question again, because it is a serious question, Mr.

Speaker. The fact of the matter is that we decided, made a conscious decision,

to respect - we are not laying blame, and not trying to lay blame with anybody.

I do not know why the Leader of the Opposition would even make such a statement.

We are trying to respect the workers. We work with the workers. We are trying to

find the right balance between respecting their right to have a legal and proper

withdrawal of services while, at the same time, putting in place those basic

minimal levels that would be needed.

What I was referring to today is that obviously - and the union anticipated

this with us, because they had talked about it, in the case of: what if there

was a plane crash or a major accident in which dozens or hundreds of people were

involved at the same time? They said we would then decide and reevaluate what

the minimal level would be, because we knew it would have to go up.

Because of the nature of this storm, which nobody could predict, the union

had agreed that if we came to them they would reevaluate the minimal basic

levels, and that is what is happening now. I would expect that the Opposition

would be urging them, as we are, to come to their conclusion sooner rather than

later as to whether or not they are going to provide additional personnel in the

depots as an essential service now because of the severity of this storm.

SOME HON. MEMBERS: Hear, hear!

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

MR. E. BYRNE: We would urge the government, and anybody else associated

with it, to do what is correct and right in the public interest. The issue that

is at stake here today - I mean, Premier, this is Newfoundland and Labrador.

This is the early month of April, and for the thirty-seven years that I have

been here there have always been storms in April. We are in the middle of the

North West Atlantic. There have been times, I say to my hon. colleague, when the

university has been shut down for four days because of sleet storms. This is the

month of silver thaw, so to speak.

It is clear that there was no mechanism in place by your government for

proper planning. If there was, there would be operators on the roads today.

Premier, the question is: Why haven't you put in place a mechanism agreed to

by yourselves in advance of the strike, living up to the commitment and pledge

that you gave the people of the Province, outside this door, that in the event

of a strike any emergencies would be dealt with and dealt with expeditiously?

Why is it that your government has not put the appropriate mechanisms in place,

that you have today to stand up and publicly ask the unions to put in place, and

point your finger at them to blame them for what is happening on the street

today?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Mr. Speaker, the only person who has mentioned the word

blame is the Leader of the Opposition.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: What we are doing, Mr. Speaker, is trying to strike the

balance, and we know it is a very delicate, sensitive balance in a circumstance

like we are now experiencing in a good part of the Island part of the Province.

This is an extraordinary circumstance. Whether it be April or March or February

or January, these kinds of storms are the exception in the year. There are not a

lot of them.

Mr. Speaker, if the Opposition has been listening, the union is crying out

with a plea for respect. We respected their views and asked them to work with us

to jointly agree to the numbers of essential services that should be provided,

whether it be in the health care sector, whether it be in Works, Services and

Transportation, or whether it be in the school system. We worked through that

process with them and got an agreement with the union in terms of the

designation of essential services. Plus, Mr. Speaker, in the best interests of

the people of the Province, because of circumstances like last night and today,

we also had an agreement from them which is on the public record, that if there

was an extenuating circumstance, like we are now experiencing, they would go

beyond the agreed to numbers. They are evaluating that right now.

I think the responsible approach is for all of us not to blame anybody, but

to urge them to make a determination as soon as they can -

MR. SPEAKER: Order, please!

I ask the hon. Premier now to conclude his answer.

PREMIER GRIMES: - as to whether or not we can have additional essential

employees put in place right away.

SOME HON. MEMBERS: Hear, hear!

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

MR. E. BYRNE: Mr. Speaker, I would like to ask the Premier this question.

He could clear it up. I understand - if it is wrong, fair enough, but it came to

me this morning that after your public offer on the radio this morning to the

NAPE leadership, I am told that you spoke directly to Mr. Hanlon. If you did, I

wonder did you raise this issue with him? If you did not, the question is: Do

you anticipate speaking with Mr. Hanlon to get this in short order, to discuss

any and all proposals that have been put before the government?

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Thank you, Mr. Speaker.

Yes, I have spoken directly with Mr. Hanlon earlier today. We did raise this

particular issue, and he assured me that they are going through a process as

quickly as they can, within the NAPE membership, to address the government's

request to have additional essential employees assigned and designated and freed

up right away. He did give the assurance that they are trying to do that as

quickly as they can within their own mechanisms, within their own organization.

Mr. Speaker, the unfortunate thing to report is that we did have a discussion

about the possibility of finding common ground, or mutual ground, to end this

whole strike immediately, but I have to report, we did not find common ground or

resolution at this point.

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

SOME HON. MEMBERS: Hear, hear!

MR. E. BYRNE: Mr. Speaker, I would like to investigate this a little bit

further.

The minister talks about, as of today, he talked to the union negotiator.

That may be fine from the minister's point of view. The Premier has now told

us before the House that he spoke to the President of NAPE and that they have

spoken about this issue. Was there any commitment or resolution from government's

point of view, you, as the head of the government, and Mr. Hanlon, as head of

NAPE, to come to some quick and serious conclusion about how we could best

handle this in the public interest? Could you elaborate on that please, Premier?

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

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: Thank you, Mr. Speaker.

I think the Premier addressed the urgent issue that was discussed at the

meeting. Both parties agreed that we would not discuss the outcome of the

meeting, or the content of the meeting, in an effort to keep the lines open to

continue to address this issue and try to resolve it as soon as possible. That

is the commitment we both gave to each other and that is the commitment we will

keep.

SOME HON. MEMBERS: Hear, hear!

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

MR. E. BYRNE: Premier, did you speak to Tom Hanlon? You said you did this

morning about a resolution for public services. Was the minister part - how can

you get up and say that we made a commitment not to talk about how we are going

to protect the public interest? Get up, stand up as Premier of the Province, and

tell us how you are going to protect the public interest and the public safety

with respect to the situation we are now in? Could you please answer us?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

The hon. the Premier.

PREMIER GRIMES: Thank you, Mr. Speaker.

Maybe the Leader of the Opposition was so anxious to ask his supplementary

question before that, that the Minister of Finance asked -

MR. E. BYRNE: My supplementary question was based on your answer. That is

how I prepare (inaudible).

MR. SPEAKER: Order, please!

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. the Premier.

PREMIER GRIMES: Thank you, Mr. Speaker.

The point I was to make before being interrupted was this: In the previous

question that I did answer, I had already answered the question he asked about

Mr. Hanlon and service for today. We discussed the issue. He gave the

undertaking in the meeting, as was indicated, that within their own processes

they were working as fast and as quickly as they possibly could within NAPE -

because they have a group of people who happen to be on strike - to make a

determination as to if they could provide additional essential employees and

when they could do it, physically, if it could be agreed to within their

membership; because they are on strike. They did give the undertaking,

generally, that if a circumstance arose, any circumstance, such as this one,

where we needed to go beyond the level of essential services that we had agreed

to with them prior to the strike, that they would take an action to evaluate it.

The request was made yesterday. It was followed up again this morning, and he

undertook to have the evaluation done inside NAPE. The Leader of the Opposition

can suggest or pretend all he like that the government can unilaterally declare

how many employees are actually essential, but he should check the legislation

again, Mr. Speaker. We have an agreed to number, and they are trying to find out

a new number as quickly as they can.

SOME HON. MEMBERS: Hear, hear!

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

MR. SHELLEY: Thank you, Mr. Speaker.

My questions today are for the Minister of Works, Services and Transportation

with respect to the provincial ferry service in this Province. I would like to

ask the minister, in that particular agreement you talked about one trip per day

but also you have allocated twenty-three people to man the vessels around this

Province. I would like to ask the minister: Do you think that twenty-three

people is adequate to handle the ferry service for this Province?

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

SOME HON. MEMBERS: Hear, hear!

MR. BARRETT: Thank you, Mr. Speaker.

The agreements that were signed were negotiated between the union and our

department, and that there were enough people to put on those ferries to be able

to operate them. We did have some problems with the Fogo Island ferry because

the people that we had designated as essential refused to operate the ferry.

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

MR. SHELLEY: Mr. Speaker, I guess they did refuse to work. We know that,

first of all, the Fogo Island ferry service has been done since Saturday. The

minister still has not acted upon it. By the time we allocated people around the

Province the Fogo Island ferry needed fifteen people to operate it. You

allocated three, minister, I say to you. That is why is it not operating, Mr.

Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SHELLEY: I have been contacting and speaking to people even in the

last couple of hours. They are in an emergency meeting right now and the union

has asked for the proper number. My question, minister: Didn't you see there

was not enough foresight in your department to realize and be able to count the

number of ferries in the Province and say: yes, we will provide the proper

number of people to operate these vessels?

SOME HON. MEMBERS: Hear, hear!

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

SOME HON. MEMBERS: Hear, hear!

MR. BARRETT: Thank you, Mr. Speaker.

Yes, there were enough employees to operate the ferries. My understanding is

that these employees refused to operate this particular ferry. One of the

problems with the Fogo Island ferry has not only been the employees but we have

had extreme ice conditions in that area. If we did have the employees the ferry

may not have been able to operate anyway.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Placentia & St. Mary's.

MR. MANNING: Thank you, Mr. Speaker.

My questions today are also for the Minister of Works, Services and

Transportation. In listening to the minister's statement today and earlier

questions, we all know that the contingency plans were put in place in regard to

the highway depots throughout the Province.

I ask the question today on behalf of a depot in my own district of Placentia

& St. Mary's, that is the depot at St. Bride's. For most of the winter

now there have been four or five operators working around the clock due to the

weather conditions we have had this past winter. My understanding is that there

is one essential employee designated. The essential employee lives 35 kilometres

from the depot. He had trouble, when the strike started, reaching the depot. We

have had major concerns out there in regard to keeping the road clear.

I would like to ask the minister: What thought was given that the designated

operator at that depot had total access to the depot and total access to the

equipment when the time was needed?

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

SOME HON. MEMBERS: Hear, hear!

MR. BARRETT: Thank you, Mr. Speaker.

It is correct that there is one employee in each depot around the Province,

the employees assigned to look after the roads. I want to remind hon. members

that the type of snowstorm that we have today and the snowstorm that we had last

night, even if we had all of our workforces out last night we would have had

some difficulty maintaining the roads and keeping the roads open. We are talking

about a major snowstorm right now on the Burin Peninsula, and the Bonavista

Peninsula. So even with our regular employees we would have had difficulty

trying to keep the roads open last night. With just one employee it is rather

difficult. I am not aware there is difficulty with the St. Bride's station.

MR. SPEAKER: A supplementary, the hon. the Member for Placentia & St.

Mary's.

MR. MANNING: Thank you, Mr. Speaker.

It is a very serious situation, I would like to advise the minister. At 6:30

this morning an ambulance was called in St. Bride's to go to Branch, a 20

kilometer distance, for a 94 year old lady who has had some medical problems in

the past. Up until ten minutes before I came to the House, the ambulance still

had not arrived in Branch, due to the situation that we have there.

I would like to ask the minister: What do I tell this family when they call

me wondering why we have a situation where that ambulance cannot get to the

community of Branch?

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

MR. BARRETT: Mr. Speaker, I am well aware of the situation regarding the

ambulance. We are dispensing all the necessary equipment to be able to get at

those particular areas and, if necessary, we have hired some private

contractors, which we normally do in these kinds of situations to help alleviate

the situations. The news I have is that we are working from both ends of that

highway trying to open the road and access that particular community so that the

ambulance can get to the hospital.

SOME HON. MEMBERS: Hear, hear!

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

MR. HARRIS: Thank you, Mr. Speaker.

My question is the for Premier. This morning the Premier suggested on a

public Open Line program - made a proposal that would resolve the dispute by

having a one-year agreement at 5 per cent and leaving everything else for later.

Will the Premier accept that this is actually a backward step in negotiations,

that it would give up the progress that has been made on an agreement for

indexing pensions, give up the progress on the unfunded liability? That this

will be a backward step, not only for the negotiation for the public sector, but

also for the people of this Province who have an interest in having the unfunded

liability on the pension plan resolved and catching up with the rest of Canada

and no longer being the only place in Canada with an unindexed public service

pension?

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Thank you, Mr. Speaker.

I can only take, from the question of the Member for Signal Hill-Quidi Vidi,

that he thinks it is more important to continue the strike rather than stop it.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: A supplementary, the hon. the Member for Signal Hill-Quidi

Vidi.

MR. HARRIS: Thank you, Mr. Speaker.

Given that the Premier does not seem to understand that that was not going to

stop the strike, and it was very clear to everybody in the Province immediately

when Mr. Hanlon phoned in. Does the Premier have any other suggestions for

stopping the strike or is he hoping that they are going to give up and come back

to work under the last offer of the Premier? Does he have any other proposals to

make in an effort to try to negotiate a solution to the strike?

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Thank you, Mr. Speaker.

The negotiations will continue with NAPE and CUPE. I have not been informed,

and neither has the President of Treasury Board, that the Member for Signal

Hill-Quidi Vidi has now been named their chief negotiator.

SOME HON. MEMBERS: Hear, hear!

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

MR. SULLIVAN: Thank you, Mr. Speaker.

My questions today are for the Minister of Finance. Last fall, before the

federal election, the federal government announced that they were going to set

up a $1 billion fund to replace outdated and dangerous diagnostic imaging

equipment. Now, $500 million of that was to be made available immediately and

the remaining $500 million to be made available on April 1 of this year. As the

minister well knows, the wait list for diagnostic services are horrendous. One

reason for that is the lack of equipment and the fact that equipment we do have

is breaking down on a regular basis. I want to ask the minister: Out of that

$500 million that was available immediately last fall, how much money did our

Province receive from that fund and how was it directed?

SOME HON. MEMBERS: Hear, hear!

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

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: Thank you, Mr. Speaker.

We are very concerned, in fact, about a lot of the diagnostic equipment that

we have in our Province. That is one of the reasons why we have contributed into

the capital account. You will remember yesterday, in fact, I tabled a warrant

for the cost of health equipment that was provided to the Province and through

the boards. All totaled, over the last number of years we have probably put in

close to $80 million, if you add in the fundraising component put in by the

boards as well. So we have done specific allocations for the Health Care

Corporation of St. John's, specifically for their equipment. In addition to

that, we have done a new allocation for the Janeway - an allocation for their

new facility. Over and above that, we have done an allocation that would allow

all of the boards across the Province to identify their priorities so that they

could use the money allocated for capital to provide the services. I think also,

one of the most important pieces of this is that we were quite concerned at one

point that many of the boards were using their operating funds to purchase

capital equipment and now, because of the allocation -

AN HON. MEMBER: (Inaudible).

MS J.M. AYLWARD: Mr. Speaker, I am answering the question. I am sure they

are very interested in the answer, because it is a very important question.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

I ask the minister now to conclude her answer.

MS J.M. AYLWARD: Thank you, Mr. Speaker.

As a result of that, we created a capital fund for equipment so that they

would not require to remove money from their operating budgets for their capital

budgets.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: A supplementary, the hon. the Opposition House Leader.

MR. SULLIVAN: Thank you, Mr. Speaker.

The minister must be taking skating lessons from the Premier, I would say.

Minister, Health Canada was quoted on March 28 of this year, just a few days

ago, as saying that only six Provinces sought access to their share of the

medical equipment trust fund. Those provinces are: Ontario, British Columbia,

Alberta, Saskatchewan, Manitoba and Prince Edward Island.

I want to ask the minister: Would she confirm that Health Canada is accurate

and this Province did not request funding up until March 28, out of this fund

that was available since September?

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

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: Mr. Speaker, the reality is that we have contributed

more to capital equipment than we have gotten from the federal government.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

The hon. the Minister of Finance.

MS J.M. AYLWARD: Thank you, Mr. Speaker.

What I will say to the member opposite is that I will get the exact number of

the allocation that we have put into capital equipment, because I do not know if

AN HON. MEMBER: (Inaudible).

MS J.M. AYLWARD: Mr. Speaker, this is important. I am not sure if he is

trying to do a political technical issue or if he is truly interested in how

much money this Province has put into capital equipment. Is that the real issue?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

A supplementary, the hon. the Opposition House Leader.

MR. SULLIVAN: Thank you, Mr. Speaker.

I am fully well aware of what you put into capital equipment; capital

improvements, $82 million. It is in the back-up to the Budget. I know exactly

what we are putting into capital equipment. I know exactly what is in the

warrant that was tabled here yesterday. I want to ask the minister: Is Health

Canada accurate again in saying that this Province is one of the ones - up to

March 28, they were quoted - that did not seek access to this medical equipment

fund? I want to ask the minister: Did we, yes or no?

SOME HON. MEMBERS: Hear, hear!

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

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: Mr. Speaker, I think the member opposite misses being

health critic. That is what I think.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: Mr. Speaker, I have just said that I will provide the

information specifically on the amount of money -

SOME HON. MEMBERS: Oh, oh!

MS J.M. AYLWARD: Mr. Speaker, I will provide the information. I am not

trying to say I will not do it, but I also will say that we have put more into

capital funding for health care over the last three years. He does not want to

hear that, because that is not political enough. He only wants to know what we

have not done. He does not want to know what we have done. I will be only too

happy to provide the information as he requested.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

A supplementary, the hon. the Opposition House Leader.

MR. SULLIVAN: Thank you, Mr. Speaker.

Minister, there is equipment in this Province falling down around our ears.

Radiologists have said it is unsafe to use equipment across the entire country.

I did not ask you about using money for the operating services, like

radiologists have accused using this fund for. I did not ask that. I asked a

simple question: Why didn't you request that?

Health Canada reported that you did not apply. If you did not, I am asking

you why. You didn't answer that, which means you did not apply. If you did,

you would have said yes. Why didn't Newfoundland take advantage of that fund

last year, when we were in dire need of diagnostic equipment here in our

Province?

SOME HON. MEMBERS: Hear, hear!

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

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: Mr. Speaker, the only point I am trying to make is that

we concur in as much as we have created the largest capital account for

equipment over the last three or four years. I am not trying to confuse the

issue. I am saying that prior to this time, many of our boards were using their

operating money to purchase capital equipment. We saw that as a problem both

from the operating perspective as well as from the capital, and we provided a

capital account for new equipment that is based on the priority needs of all the

boards as they send in to us.

I have also said for the third time, and I will make it a fourth time, I will

be happy to provide the information for the member opposite.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

Question Period has ended.

Notices of Motion

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

MR. T. OSBORNE: Thank you, Mr. Speaker.

I move the following Private Member's Resolution:

WHEREAS Newfoundland and Labrador's fresh water is among its most precious

and valuable resources; and

WHEREAS exporting Newfoundland and Labrador's fresh water resources in bulk

could have serious deleterious consequences for the Province and the country

under the North American Free Trade Agreement; and

WHEREAS Newfoundlanders and Labradorians have consistently made clear they

expect to receive maximum benefits from their natural resources in terms of not

only royalties and other revenues but also value-added processing, jobs and

other spinoffs; and

WHEREAS there has been considerable public debate in Newfoundland and

Labrador on bulk water export, and the public have spoken loudly and clearly in

that debate of their determination to protect our Province's fresh water

resources; and

WHEREAS this hon. House in 1999 debated and, on December 14, 1999,

unanimously passed into law

An Act To Provide For The Conservation, Protection,

Wise Use And Management Of The Water Resources Of The Province to ban the bulk

export of fresh water from Newfoundland and Labrador;

THEREFORE

BE IT RESOLVED that this hon. House honour the commitment that was

made when

An Act To Provide For The Conservation, Protection, Wise Use And

Management Of The Water Resources Of The Province was passed in this House by

maintaining the ban on bulk water export from Newfoundland and Labrador.

Orders of the Day

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

MR. LUSH: Order 2, Mr. Speaker.

On motion, that the House resolve itself into a Committee of the Whole on

Supply, Mr. Speaker left the Chair.

Committee of the Whole

CHAIR (Mercer): Discussion on the Consolidated Fund Services.

The hon. the Opposition House Leader.

MR. SULLIVAN: Thank you, Mr. Chairman.

I have some questions to the minister with respect to the Consolidated Fund

Services, overall with, I guess, servicing of the public debt. Some of these, I

think, are pretty straightforward. I will move quickly through the ones that I

think are straightforward.

Temporary Borrowings there: I guess it is looking at our expenses on

temporary borrowings. That is a pretty routine item there. We budgeted $150,000

and spent $500,000. I guess that just means that our temporary borrowing was

more than we anticipated.

MS J.M. AYLWARD: Can you wait one second, I can't hear you.

MR. SULLIVAN: Sure. Now, that is something I never heard from you before.

You are always telling me to tone it down. Well, I will raise the volume again,

I say to the minister.

SOME HON. MEMBERS: Hear, hear!

MR. SULLIVAN: Something new happens every single day.

MS J.M. AYLWARD: I can hear you fine now.

MR. SULLIVAN: Good! Good! Do you want me to tone it down now?

MS J.M. AYLWARD: I will take it out.

MR. SULLIVAN: Okay.

MR. SHELLEY: Somewhere in between.

MR. SULLIVAN: Now that the minister has her hearing adjusted properly -

AN HON. MEMBER: She had to turn the volume down again.

AN HON. MEMBER: It was too loud to hear.

AN HON. MEMBER: Do you hear that, Loyola? She said, I can't hear him

yet.

MR. SULLIVAN: Don't worry! I will raise it. I don't want to get

hoarse yet, I might have to speak for a couple of hours on the Budget later on.

AN HON. MEMBER: He is saving himself.

MR. SULLIVAN: I want to save the good questions for then, yes.

MR. J. BYRNE: Lloyd, you would have applied for the money, wouldn't

you? You would have applied for it, guaranteed.

MR. SULLIVAN: I don't know. Listen here, he was the finance minister

when it came out. Were you not the finance minister then? Shame on both of you.

When this $500 million became available last fall, our share of that fund.

AN HON. MEMBER: Five hundred million and he didn't even ask for a cent.

MR. SULLIVAN: Shame on him! He has enough money, I figure, he doesn't

need $500,000.

Temporary Borrowings: The minister doesn't have to answer if she is in

agreement. I will just run through it. That is just basically the cost on our

short-term borrowings, temporary borrowings. That can vary, I guess, from time

to time.

MS J.M. AYLWARD: Where are you?

MR. SULLIVAN: Servicing of the Public Debt, page 5, 1.1.01., Debt

Expenses, first page, I guess.

MS J.M. AYLWARD: Okay.

MR. SULLIVAN: Interest-Statutory, right.

So that is just, basically, if we budgeted $150,000 and spent $500,000, it

just means that our temporary borrowings were a little bit higher than

anticipated. I would assume that is it. Maybe when certain payments were

required to be made, to keep our cash flows, we might have had to do temporary

borrowings earlier than planned or borrow more. I mean, that is not a huge item

in terms of what we are looking at here under the fund. So, when the minister

gets up, if there is something extraordinary, she can comment on it.

Treasury Bills: That is pretty well in line. That is interest expense on

Treasury bill borrowings. That is a pretty standard thing. I don't have any

direct questions there. Now, if there is anything extraordinary in the items

that happened, like a one-time thing, that I don't anticipate here, the

minister might want to comment.

Debentures: Once again, it is pretty well on. We know what our debt is out

there. We know what is being paid. Now, Paid to the Newfoundland Sinking Fund:

That is just basically, I guess, on each of our borrowings. I would assume paid

to a sinking fund is our expenditure that goes into a sinking fund to assist in

debt redemption when it comes due. That is that figure there. Is there a set

percentage now that you normally put aside? If you are going to borrow on the

market $100 million over, let us say, a twenty-year period, how much would you

normally contribute into the sinking fund in that instance? Could you give me

some ballpark figure on what are the traditional, historic amounts?

CHAIR: The hon. the Minister of Finance.

MS J.M. AYLWARD: Thank you, Mr. Chair.

Generally, obviously, it would depend on the interest rate when you buy. It

will depend on the term that you buy, if it is ten years, twenty years, thirty

years, depending on how long it takes to amortize it. It would depend, of

course, if it was a loan or if it was a debenture of sorts, because we also do

loans as you know.

MR. SULLIVAN: Yes, this is a debenture, this one.

MS J.M. AYLWARD: Yes. Some of our Triple A, I guess, partners in the

European market particularly, you know, often will borrow money at their Triple

A rate and they will lend the money to us at a better rate than we can borrow

from the markets ourselves. They still make a slight profit, but we get a better

rate in the market. Sometimes we do it over a period of time. It is hard to say

what the percentage is because it depends on the length of time, the interest

rates, and if it is a loan or if it is strictly through the banks.

MR. SULLIVAN: Yes.

MS J.M. AYLWARD: It could be from a private agency as through the banks.

CHAIR: The hon. the Member for Ferryland.

MR. SULLIVAN: No. The point I was making is: putting it to the sinking

fund, what percentage, if there is a twenty-year borrowing there, might you try

to put toward the sinking fund? How much of the debt would you try to cover in

the sinking fund, to contribute? You contribute so many million this year and

next year, in each of the years there. What percent of the total debt would you

normally contribute to such a particular fund? A ballpark? I just want to have

an idea how much, when that redemption comes due, might be offset by

contributions to the sinking fund.

CHAIR: The hon. the Minister of Finance.

MS J.M. AYLWARD: Thank you.

Again, I will get back to you on the actual percentage of what we pay down,

because my understanding is that it depends on whether it is short term or long

term. For example, there is one here where we had $125 million that we borrowed;

we pay it down. The amount of the redemption is $13 million and we know that,

for example, even though we amortize it over twenty years we have an option to

get out of it within the last eighteen months, generally. Sometimes what we will

do with our percentage is that we will buy it out, because we bought it at a

higher percentage at the time. Some of these are twenty-year sinking funds. I

will tell you the exact percentage, but I don't want to ballpark it. I know it

varies. I know that.

MR. HARRIS: A point of order, Mr. Chair.

CHAIR: On a point of order, the hon. the Member for Signal Hill-Quidi

Vidi.

MR. HARRIS: Perhaps I could refer the minister and the hon. member to

page 250 of the Estimates which has a list of funds -

MS J.M. AYLWARD: Yes, we have those.

MR. HARRIS: - some of which have sinking funds, some of which don't.

MS J.M. AYLWARD: Exactly.

MR. HARRIS: Perhaps the minister can explain the difference.

CHAIR: The hon. the Opposition House Leader.

MR. SULLIVAN: Yes, I wasn't going to ask that because I know the answer

to that one. I was only asking the ones that I don't know the answer to.

Because some of the ones like Canada Pension, I think, you would not see a fund

- I think I do remember - on the Canada Pension borrowings and so on. That wasn't

the point. I was getting at the point. How much do we allow in the basic sinking

fund? The minister said she will get back on that specifically there.

I think if you redeem it earlier, I guess the minister is saying, if your

figure now the rate could be down, if we redeem it now, within that period, we

can go out now and borrow when the rate is down and that would be to our

advantage, in other words. Is that what the minister meant by that?

MS J.M. AYLWARD: Only in the debentures where we have reached close to

the last eighteen months to a year. If we do it before that, there is a penalty;

but we do have an option. For example, we had one that comes to mind where we

borrowed the interest rate at 12 f

per cent. We purchased it in 1983. Next year we will have an option to buy out

of that and then we can refinance it at, say, what the going rate is now, 6.5

per cent. We would do that based on that figure.

CHAIR: The hon. the Opposition House Leader .

MR. SULLIVAN: That is right. Obviously, it is only appropriate, if you

are within the period you can do it without penalty. If you can go out and

borrow then at a lower rate you are going to do that. Even if you got to a point

where the penalty would be less than what it costs to borrow, it would still be

to your advantage to pay a little penalty if you are in that particular period

too. It is just a matter of, if borrowing is cheap.

MS J.M. AYLWARD: It is a big penalty.

MR. SULLIVAN: Yes, but if you go out before that. I guess the similar

base is like anything; when someone goes out and invests into certain mutual

funds and people have paid up front or it is an end-loaded type, after so many

years it keeps declining and after a period of time it doesn't cost anything

to take it out. There is always, in the market, a similar situation. Whenever it

is advantageous to roll something and get a lower rate, I guess they are always

looking at that.

The Canada Pension Plan is pretty consistent. Temporary Investments. On page

6, 1.1.06., Recoveries On Loan And Advances, "Appropriations provide for

interest paid to the Province on loans to various public and private entities,

as well as interest collected on loans by the Province's various lending

agencies." In other words, that is recoveries on loans and advances. That

is not including - no, that is not fees; that would be under a different issue

like guaranteed debt. That is a different area, I would assume.

In what public and private entities are we getting recoveries? What are a

couple of the main ones, the bigger items in this particular category, that

there might be recovery of loans under? Because this is a revenue, a reduction

really of a debt, or really a revenue.

CHAIR: The hon. the Minister of Finance.

MS J.M. AYLWARD: Thank you, Mr. Chair.

The biggest single collection piece of this is ENL. I might add, too, that

the reason the number is down is because a lot of the loans are actually being

paid off and that is why our revenue has decreased. You can see that, where it

has gone down, and that is the rationale for that. Some of our loans are

actually paid off.

CHAIR: The hon. the Opposition House Leader.

MR. SULLIVAN: Sure. I guess we are at the point where a lot of loans have

been around for some time, as I am fairly familiar with, that loans end up

getting written off in the process, too. They are the ones you are collecting,

getting revenues toward.

MS J.M. AYLWARD: Right.

MR. SULLIVAN: Under 1.1.07. Newfoundland Government Sinking Fund earnings

in excess of what is required to redeem debts, like last year, 02. Revenue -

Provincial, is budgeted to be $116,004,000 but it is $36,104,000, it shows

provincial revenue $184,769,000. Okay, it is straightforward there. I am

familiar with that.

In 1.2.01. Recoveries on Loans, Advances and Investments: Appropriations

provide for principal recovery from various loans, advances and investments, 02.

Revenue - Provincial, budgeted $13,240,300 and it ended up being $1,595,100.

MS J.M. AYLWARD: I am sorry, where are you?

MR. SULLIVAN: In 1.2.01. on page 6.

MS J.M. AYLWARD: Okay, you moved over.

MR. SULLIVAN: There is a significant difference there, from $13 million

down to $1.6 million. Under 1.2.01.02. it shows Recoveries on Loans, Advances

and Investments. Why was there a large difference?

CHAIR: The hon. the Minister of Finance.

MS J.M. AYLWARD: This is in relation to, I think it was about ten years

ago, the Province made a loan to the Corner Brook Pulp and Paper Mill and that

matures in 2002. That is why you are seeing the difference.

CHAIR: The hon. the Opposition House Leader.

MR. SULLIVAN: The next item, 1.3.01. Various Facilities: Appropriations

provide for payments into sinking funds established for the purchase of various

leased facilities at the expiration of the respective lease terms.

What type of lease facilities primarily? What are some of the major ones in

this category?

CHAIR: The hon. the Minister of Finance.

MS J.M. AYLWARD: Thank you, Mr. Chair.

These refer to hospitals.

MR. SULLIVAN: Hospitals, okay.

CHAIR: The hon. the Opposition House Leader.

MR. SULLIVAN: Thank you, Mr. Chair.

Are we just talking about the three Trans City ones?

MS J.M. AYLWARD: As a matter of fact, we are.

MR. SULLIVAN: We are. That is what I thought. Just those only, is it?

MS J.M. AYLWARD: Yes, the three.

MR. SULLIVAN: Okay, because the other facilities have been purchased -

MS J.M. AYLWARD: Long term.

MR. SULLIVAN: - and amortized over a specific period, I think, the Grace

and St. Clare's Hospital, and the amortization -

MS J.M. AYLWARD: That is right. They have actually done the borrowings

over there.

MR. SULLIVAN: I beg your pardon?

MS J.M. AYLWARD: They have done the borrowings themselves and we have

guaranteed them over there.

MR. SULLIVAN: Yes, that is right. The Health Care Corporation did the

borrowing. I think the Grace was a five-year lease period and St. Clare's was

a fifteen or twenty-year lease period under St. Clare's Hospital.

Under 1.4.01. Guarantee Fees - Non-Statutory: Appropriations provide for fees

charged to private companies and certain Crown Corporations which have debt

guaranteed by the Province.

Well, it is showing there 02. Revenue - Provincial, $19,092,000 budgeted,

$11,073,900 collected and $19,345,800 so debt for Crown Corporations, I would

assume we are looking at a 1 per cent fee for guaranteeing the debt for

Newfoundland and Labrador Hydro, which probably would put us in, I guess, the

$10 million or $11 million range on that item alone. Would that be correct?

MS J.M. AYLWARD: Eight million, I think it is.

MR. SULLIVAN: Eight million in this upcoming year?

MS J.M. AYLWARD: Yes.

MR. SULLIVAN: So, that is basically at about $800 million of borrowings

that is on, is it?

MS J.M. AYLWARD: That is right.

MR. SULLIVAN: That is 1 per cent still, I understand, the fee?

MS J.M. AYLWARD: The fee is 1 per cent, yes.

MR. SULLIVAN: So, $8 million of that would be Newfoundland and Labrador

Hydro. In the upcoming year we are looking at $19 million. Because they have

overlapping fiscal years with us, are we collecting extra this year under that

fee guarantee? Are we going to collect a year and three-quarters in one? Is that

why that is up there?

MS J.M. AYLWARD: There are two pieces to this. One is our regular 1 per

cent charge, as you know, that we put in for the cost of borrowing the

guarantee. The other one is a special one. I think it is about an $8.3 million

special arrangement which is part of what the government has pushed forward into

the out years and has not actually used.

MR. SULLIVAN: Okay. In other words, last year - the dividend thing is one

thing; we have guaranteed the debt now. In other words, government had this

built into - it is more like a carry-over item that they did not utilize, that

was there to be taken, but now it is being budgeted to be taken this year as a

fee. We did not really collect that portion from last year.

Hydro's fiscal year ends at the end of December and our fiscal year ends

March 31, so if you looked at this year, 2001, that is this year now, Hydro has

a full fiscal year right there. If we got 1 per cent there, for instance, $8

million there, then from January next year to March, it is in a new fiscal year

for Hydro and we are still in our fiscal year. Technically you could collect up

front, as happened in the 1990s when this came in first, around 1996 or 1997, I

think, they collected really a year and three-quarters. Hydro made two

contributions, basically, in the one year.

From what the minister said, I gather one of two things: we are budgeting to

collect on next year's from January to April from them, or we are collecting

on what we really did not take from last year. Which one of the two applies to

this case? Is the minister clear on what I am saying?

CHAIR: The hon. the Minister of Finance.

MS J.M. AYLWARD: What we have done here is, we have actually budgeted the

amount within our fiscal year that we are able to take. Again, it is a

combination of the regular fee plus a special fee. It is our portion within our

fiscal year. It is not based on Hydro's fiscal year. We would allocate the

amount that would be applicable within our fiscal year.

CHAIR: The hon. the Opposition House Leader.

MR. SULLIVAN: Thank you, Mr. Chair.

Issues Under Guarantee: Appropriations provide for payments and revenues

relative to honouring loan guarantees extended by the Province to certain

private companies.

You had budgeted $500,00, and $1,550,000 was paid out. The government paid

out over $1 million more in Loans, Advances and Investments, costs to private

companies. What private companies would they have those loans to that cost...?

Did they have -

MS J.M. AYLWARD: You are on 1.4.02?

MR. SULLIVAN: Yes, I am.

Did banks call in debts on any companies that we had to honor? Would the

minister answer that?

CHAIR: The hon. the Minister of Finance.

MS J.M. AYLWARD: Thank you, Mr. Chair.

There was the IPL (inaudible), as you know.

MR. SULLIVAN: Yes.

MS J.M. AYLWARD: Newfoundland Farm Products.

MR. SULLIVAN: Yes.

MS J.M. AYLWARD: There was also one defaulted fisheries loan guarantee. I

will not mention the individual, but there was an individual fisheries loan

guarantee that defaulted.

MR. SULLIVAN: Okay.

MS J.M. AYLWARD: That was at about $500,000.

That is basically the composition of what you are talking about.

MR. SULLIVAN: To my knowledge, while we are on that, I think we are only

guaranteeing loans to only one or two fish companies in the entire Province, I

think. That is in the public record anyway, and there is a bill here in the

House.

MS J.M. AYLWARD: Yes, exactly.

MR. SULLIVAN: I think it is only the Torngat Fish Producers and Fogo

Island Co-op. There has been a bill here in the House. It is nothing of a

personal nature in those there, but rather than mention a private individual's

name, I do not expect that to be stated here.

I just want to skip along a little bit there. I am sure my colleagues might

want to ask questions on some of these items.

Under 2.1.02. Ex-Gratia and other Payments - Non-Statutory, on page 9, it

says, "Appropriations provide for special retirement and other payments as

approved by Treasury Board. As required, funding will be transferred to

Departments during the year".

I am wondering how much of the $12.4 million last year - I understand the

NCERP, the Northern Cod Early Retirement Program, our Province is on a 70/30

basis. We put money into that fund and the different POWA, some of the older

workers programs and all of these, would the minister be able to give me a rough

breakdown, or give me the three or four main contributors that we are putting

into still?

Under the Northern Cod Program, that is going to gradually keep decreasing

every year now because people are getting to ages sixty-five and every year that

is going to be lessened, I guess, as with any program, because the

contributions, I think, are only up to the age of sixty-five. A lot of these

were enacted when people were fifty-five. You had to be fifty-five at the time,

in 1992, under NCARP and NCERP, the following program. That was nine years ago.

Anybody who was fifty, fifty-six or fifty-seven, even under NCERP they would

have been in their late fifties now and would be out of this program. What is

the total payout in this upcoming fiscal year under the three or four main ones

there?

CHAIR: The hon. the Minister of Finance.

MS J.M. AYLWARD: Thank you, Mr. Chair.

Five hundred and seventy-four thousand in ex-gratia payments. The Hartt

Report, which you know is -

MR. SULLIVAN: For which one?

MS J.M. AYLWARD: These are ex-gratia payments, that are the separate

plans.

The Hartt Report, which you know is a result of the pension arbitration award

at the Waterford a number of years ago; $1.4 million. Widow's component;

$282,000. A widow's component associated with pensioners. WCC, Workers'

Compensation, associated cost of $26,000. Redundancies included in at $2.1

million, and a severance of $7.8 million, for a total of $12.2 million.

MR. SULLIVAN: Our share of the NCERP is under this is it, Northern Cod

Early Retirement Program?

MS J.M. AYLWARD: I do not have that here.

MR. SULLIVAN: Our 30 per cent? Because that breakdown adds up to $12

million. That must be in another item is it?

MS J.M. AYLWARD: The only ones that I have here, Mr. Chair, are the ones

that I have spoken to in terms of the revised. As you know, they are lower by

virtue of attrition. You know that people die and the results are lesser awards.

MR. SULLIVAN: Sure, and when they reach the age too, of course, where

they receive old age pension they drop from some of those retirement programs.

MS J.M. AYLWARD: Yes, they switch over. The only plans I have in terms of

the pension awards are the ones that I have listed there: the redundancy; the

ex-gratia payments under the Hartt; the benefits for widows of deceased

pensioners who have no other survivor benefits, as I have pointed out; the

injury on duty awards, which are the workers' compensation; and in addition,

any other special awards that would come under this package.

MR. SULLIVAN: Would the minister be able to check and see what is still

left under NCERP - Northern Cod Early Retirement Program - our 30 per cent

share, how much we are still paying out? What is that down to, maybe the number

of people we are still contributing to? Could she give us an idea of how fast

this -

MS J.M. AYLWARD: What is it called again?

MR. SULLIVAN: It is called Northern Cod Early Retirement Program, NCERP.

That was the second retirement program that came out. It was NCARP and then they

called it - NCERP was under TAGS, I think.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: No, NCARP was the total program. NCERP was the retirement

part of that program. Then there was a TAGS program which followed in 1994-1995.

NCARP covered July, 1992 to May 15, 1994; I think are the figures. From May 15

on, of 1994, there was this other retirement. If you could just find out what

our contribution to that program still is there?

MS J.M. AYLWARD: Yes.

MR. SULLIVAN: I will just finish off this one I am on now under Pensions,

and then I am sure my colleagues will have a few questions.

Railway Pensions; we are familiar with that. That is basically a continuation

thing from the previous years. That is diminishing with each year, I guess, as

people - that will be phased out over a period of time.

Special And Other Acts: "...form part of the Pensions Funding Act."

For example, 2.1.04, that is probably a similar one - are there any other

special ones or - it is just a continuation of ones that have always been there,

I would assume. What are some of those that might be the sources of these?

CHAIR: The hon. the Minister of Finance.

MS J.M. AYLWARD: Thank you, Mr. Chair.

It is a continuation of the existing programs. The two that I am familiar

with are the Gander Airport employees and the Newfoundland Broadcasting Company.

They are two of the ones that were carried over under this special plan. I think

they are the two that I am aware of under 2.1.04. There are a couple of others

actually. There is the Memorial University transferred employees as well. These

are the three groups that we have covered. No new groups.

MR. SULLIVAN: Over the next number of years, several years, within the

next decade that will probably be gone will it, I would assume?

MS J.M. AYLWARD: We would hate to think that, I suppose on one hand,

because they are generally through attrition.

MR. SULLIVAN: Yes, unless there are new special cases or special things

that have to be put in.

cover the Provinces's pension liability associated with former employees of

the Province who transferred to the Federal Government in 1949."

MS J.M. AYLWARD: That speaks specifically to that only.

MR. SULLIVAN: Yes. Okay, sure.

My colleague now might have a few questions on this.

CHAIR: The hon. the Member for Waterford Valley.

MR. H. HODDER: Thank you, Mr. Chair.

In the Report of the Auditor General to the House of Assembly for the year

ending March 31, 2000, the Auditor General made some general reference as to the

fact that many agencies of the Crown do not file reports and do not have them

tabled in the House of Assembly. As a matter of fact, she said: There were

approximately 154 agencies of the Crown as of March 31, 2000. Of these,

eighty-four were required to prepare annual financial statements while seventy

were considered non-financial, and did not prepare financial statements at all.

She makes a point that many of these agencies of the Crown did not file

audited statements with the Auditor General and did not have them tabled here in

the House. It comes under the

section called: Monitoring Agencies of the Crown.

There is a general perception that if Crown agencies received public monies that

they should also be responsible for sharing with the public how that money is

expended. As a general principle, that sounds very sensible and logical. Yet,

each year the Auditor General makes a point that these Crown agencies very

seldom, in fact, almost all of them, do not file financial statements that are

tabled in the House of Assembly. I am wondering what steps the minister is

taking to make Crown agencies, who take public funds, more responsive to the

House and therefore, directly to the people of the Province?

MS J.M. AYLWARD: I ask specifically which ones you are referring to? If I

may, of the colleague questioning there now?

MR. H. HODDER: I am referring in particular to the general statements

made by the Auditor General. I am not sure if the minister would have her

statements there or not -

MS J.M. AYLWARD: What

section are you talking about there?

MR. H. HODDER: Pardon?

MS J.M. AYLWARD: What

section are you talking about under the

Consolidated Fund Services specifically?

MR. H. HODDER: No, this is not coming under Consolidated Fund Services as

such. It is called a general statement. It is within your responsibility that

the Auditor General talks about monitoring the expenditures of Crown agencies.

In the Budget Speech the minister made some comments as to making sure that

there was a greater degree of transparency. That was the general tenor of the

Budget Speech, and also in the Speech from the Throne. Yet, it is a case where

the Auditor General makes note of the fact that not very many Crown agencies

ever go and table their reports with the House of Assembly. I am wondering if

the minister has discussed that with her department to make sure that Crown

agencies that take money end up actually filing documents here in the House as

part of the public record?

CHAIR: The hon. the Minister of Finance.

MS J.M. AYLWARD: Thank you, Mr. Chair.

The department works very closely with the Auditor General. In fact, in all

of the statements that are here, most of what I speak to are statutory amounts

and are not even anything that is negotiated or agreed upon. They are statutory,

that we really need in order to pay our debt. Certainly, we will talk to my

staff about trying to address any and all of the issues put forward by the

Auditor General. Some of which we are working on, and some of which we have

actually addressed. I say to the member opposite: yes, we will do out utmost to

try to address any outstanding issues within our ability.

CHAIR: The hon. the Member for Waterford Valley.

MR. H. HODDER: On page 17 of the Auditor General's report she again

makes note of some of the groups who have not filed their financial documents

with the Auditor General. "Section 14 of the Auditor General Act requires

the auditor of an agency of the Crown or a Crown controlled corporation to

deliver to the Auditor General, after completion of the audit, a copy of the

auditor's report, audited financial statements and recommendations to

management." She notes: "As at 1 December 2000, the required

information had not been received from the private sector auditors for 5 of the

53 entities"- who were supposed to have filed them.

I make note of the fact that the Auditor General notes that the Health

Labrador Corporation; the Newfoundland and Labrador Centre for Health

Information; Newfoundland Ocean Enterprises Limited; Operation ONLINE Inc.; and

the Pentecostal Assemblies - Clarkes Beach Seniors' Home; none of these five

had filed their financial statements with the Auditor General as of December 1,

She makes a point that: "To date, information is not being received from

the private sector auditors on a timely basis." Mr. Chair, this is not to

say that by this time these particular entities have not filed their audited

statements with the Auditor General. However, if we are going to manage the

funds of the Province adequately it is very important that all agencies that

accept public funds be able to go and make sure that when they do their audits

that these audits are, indeed, filed with the Auditor General. I do not want to

say, at this time, that the five which I have named have not filed their audited

statements. It is just they had not filed them on a timely basis. It is somewhat

incumbent upon the Minister of Finance to make sure that when public agencies,

Crown agencies, take pubic money that they file their audited statements on a

timely basis.

I wanted to note as well, again from the Auditor General's Report on page

47, that she makes note on the issue of warrants. The Auditor General says that

special warrants are causing some great confusion, or great concern, to the

Auditor General. For example, it says: "Through the use of a "special

warrant", government can, without the prior approval of the Members of the

House of Assembly, spend public money." As I have mentioned here many

times: "Section 28 of the Financial Administration Act outlines two

instances where a special warrant can be approved and additional funding can be

provided to Government."

I note, for the benefit of all members, that the idea of having a special

warrant is provided for in Legislation. However, there are two features that

should be present. It says: "Where the sum appropriated by the Legislature

for continuing service is insufficient to meet requirements and there are no

countervailing savings available, and the necessity is urgent." In

Section

28(2) of the Financial Administration Act it says (

a) there cannot be any

budgetary allocations already in place; and (

b) that there is an urgent need and

that the service is necessary as a continuing service.

Section 28(3) it says: "Where the Legislature is not in session or

when the House of Assembly has been adjourned for more than 30 days, and an

expenditure not foreseen and not provided for by the Legislature for a new

service is urgently and immediately required for the public good." In other

words: "The minister having charge of the new service must be of the

opinion that the necessity is urgent and if not made, grave damage to the

interests of the Crown or the public will result."

What I am saying is that the issue of special warrants is not something that

is outside the law. However, the Auditor General has made a point of saying that

some of the special warrants that have been issued certainly did not meet the

requirements. In other words, they were not urgent. Secondly, the House of

Assembly was in session and the minister of the appropriate department, or the

Minister of Finance, had the responsibility to come to the House and seek

permission for a further allocation under a bill, a motion of the government,

that the minister would sponsor in the House. That is why the House of Assembly

is open. When you require an initial sum of money that the Financial

Administration Act makes it incumbent upon the minister or the government,

through any particular minister, maybe particularly the minister of the

department involved or maybe through the Minister of Finance, that there would

be a bill sponsored in the House seeking additional funds. However, the

Financial Administration Act is very specific. It says that when you do make an

expenditure, that you have to report to the House within fifteen days of the

opening of the next ensuing session of the House of Assembly. Of course, she

makes a point that this particular revision was not adhered to by the

government.

Last year the government issued great sums of money but, in fact, in the year

2000 there were seven Special Warrants issued for a total of $70,838,500. The

Auditor General indicates that the issues of necessity, the issues of urgency in

other words, and also the fact that the minister should have gone to the House

directly - in other words, the Auditor General is saying that the Financial

Administration Act was not complied with, in her opinion, by the government as

to the handling of special warrants.

Mr. Chair, we would note that this government has a significant history of

using special warrants. In 1993, they issued seven special warrants for

$2,500,000. In 1994, there were two special warrants in that year but there was

$3,500,000. Then, as we go down through on page 48 of the Auditor General's

report, it mentions year by year that this has increased significantly.

The Auditor General has great concerns, and I had expected the minister who

is responsible, the Minister of Finance, to be anxious to stand in her place and

to say what they are doing to try to address the concerns of the Auditor

General.

The Auditor General makes note that last year - I mentioned the fact, and

there is a table there which outlines the amount of money that was put forward

last year. For example, on March 10, 2000, the Education Department gave a grant

to Memorial University of Newfoundland and Labrador for the university's

Opportunity Fund for $3 million.

CHAIR: Order, please!

The hon. member's time is up.

MR. H. HODDER: With leave, Mr. Chair?

CHAIR: Does the hon. member have leave?

SOME HON. MEMBERS: By leave.

CHAIR: By leave.

MR. H. HODDER: Thank you very much, Mr. Chair.

MR. HARRIS: On a point of order, Mr. Chair.

CHAIR: The hon. the Member for Signal Hill-Quidi Vidi, on a point of

order.

MR. HARRIS: I am being told that the time might be up on this issue, so I

don't know. There have only been two speakers on Consolidated Funds, and I

would like to speak on the issue, so if we can manage to have - I do not mind

giving him leave, but I would like to be sure to have an opportunity to ask some

questions on Consolidated Funds.

CHAIR: The Member for Waterford Valley is speaking on leave at this time.

The hon. the Government House Leader, to the point of order.

MR. LUSH: Mr. Chair, to the point of order, if the hon. member does not

take up too much time by leave speaking now, the time is up but we will grant

the hon. Member for Signal-Hill-Quidi Vidi, by leave, time as well.

CHAIR: The hon. the Member for Waterford Valley.

MR. H. HODDER: Mr. Chair, I will conclude if you would like. I certainly

do not want to have a situation arise where the time runs out and my colleague,

the Member for Signal Hill-Quidi Vidi, does not have a chance to speak.

My point is that I am bringing to the attention of the House again, a whole

issue of special warrants and the comments of the Auditor General, because it is

very important that we run our affairs according to the laws of the Province.

Certainly the concerns of the Auditor General relative to special warrants

requires us on this side of the House to continue to mention it as long as she

has concerns, and we will continue to bring these issues forward to the House,

with the hope that Madam Minister either makes sure that the matters of urgency

are met and that the appropriate minister puts forward a case to the Cabinet,

and also that we do not use special warrants merely to distort the real

financial situation of the Province so that it looks better than it actually is.

Thank you very much, Mr. Chair.

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

MR. HARRIS: Thank you, Mr. Chair.

I am pleased to have the opportunity to ask a few questions on the

Consolidated Fund Services, but I want to congratulate the previous speaker. He

has finally succeeded in doing what we have been warning him of, for a number of

years in this House. Not a member of this House, but certain spectators have

managed to fall asleep during the speaker's comments.

MR. H. HODDER: That is not very nice. I just gave him a chance to speak,

and he insults me like that. (Inaudible).

MR. HARRIS: I hope the previous speaker does not feel too insulted. He

was speaking with the leave of the House.

Perhaps I could ask the minister to answer a few questions. I was interested

in the issue of sinking funds as well. Looking at page 250 of the Estimates

document, there seems to be quite a few funds that do not have - it is not page

250; it is page 260. There seems to be quite a few borrowings that have no

sinking funds at all. I notice there are a number for $150 million. I added up.

For the year previous, it was about $1 billion worth of bonds, some short term,

some longer term, that did not have any sinking funds. I wonder if the minister

can explain why it is that some of the bonds have sinking funds attached to them

but some of them have none.

I am looking here at ten years bonds, for example, expiring in the year 2009;

$200 million at 6.7 per cent with no sinking fund. Another one, ten year bonds

expiring 2008; $250 billion with no sinking fund. Is there some reason why there

are no sinking funds for these particular amounts? When I added them up earlier,

I get up to around $1 billion with no sinking funds. Is there an explanation for

that? Perhaps the minister can let us know.

CHAIR: The hon. the Minister of Finance.

MS J.M. AYLWARD: Thank you, Mr. Chair.

There are two pieces to it. Some of them are clearly loans and the others are

obvious, as the member pointed out, there are no payment provisions through the

sinking funds. What we have been doing actually is putting them into revenue and

in some cases, with others, we just rolled them over at the end of the maturity

of the sinking funds. So we do not make provision across from every line to make

a payment. You can see that from here. We pay down a number of them; the rest of

them we actually put into our revenue, and that has all been vetted through the

Auditor General.

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

MR. HARRIS: Thank you, Mr. Chair.

Also, I notice that, in looking at the amount of sinking funds that are set

aside for the public sector debt, which is in Exhibit V, there appears to be

about 20 per cent of the total Crown Corporation and Other Debt as well as

Provincial Direct Debt that is in sinking funds. Is this, in fact, a ratio that

has been suggested we maintain? It appears to be fairly consistent over a number

of years of 19 per cent, 20 per cent, 18.5 per cent. Is that the ratio that the

government strives to maintain in terms of sinking funds? It would take a bit of

calculation to figure out. We see the sinking funds there lowering and rising

from year to year, but the ratio of sinking funds to a total public sector debt

appears to be consistent. Is there a benchmark of around 20 per cent for sinking

funds, or does that just happen to be a coincidence based on government policy

or requirements of various funds?

CHAIR: The hon. the Minister of Finance.

MS J.M. AYLWARD: Thank you, Mr. Chair.

Again, I guess it is a similar way of a previous question that, no, we don't

have any set amount with respect to that percentage that you probably calculated

out.

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

MR. HARRIS: Thank you, Mr. Chair.

Some years ago, of course, it was a matter of great criticism of the public

finance of the Province that significant public debt was incurred and there

were, in fact, no sinking funds at all. Is the minister suggesting that this is

just a coincidence, or do particular borrowers require a sinking fund as part of

the bond agreements? Would certain lenders say: We will lend you this money on

long-term borrowing, but we would require you to set up a sinking fund. Or, is

it just a matter of general government policy to try to ease the public sector

debt along the way?

CHAIR: The hon. the Minister of Finance.

MS J.M. AYLWARD: Thank you, Mr. Chair.

Any borrowing that requires a sinking fund has one. As you know, all of this

money is guaranteed by the Province anyway, so wherever we are required to have

a sinking fund we do; but, as I pointed out, not every borrowing has a sinking

fund associated with it. You can see that from the line.

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

MR. HARRIS: Yes, Mr. Chair, I understand that there are certain sinking

funds - I think they are referred to as voluntary sinking funds. What is the

rationale for having voluntary sinking funds in certain cases and not in others?

CHAIR: The hon. the Minister of Finance.

MS J.M. AYLWARD: What we have done, and you can see that from our budget

process particularly, is that we have pushed forward a lot of our sinking funds

from year to year. Not all of our borrowings required sinking funds, and we have

been using them as revenue.

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

MR. HARRIS: Thank you, Mr. Chair.

Perhaps I will move on to pensions. Line 2.1.01. of the Budget refers to

Contributions to the Pension Fund. It makes reference there to matching

contributions and other payments under the pension plans. Does that include the

amount that government is contributing to lower the unfunded liability of the

pension fund, or is that somewhere else in the Budget?

CHAIR: The hon. the Minister of Finance.

MS J.M. AYLWARD: Thank you, Mr. Chair.

This includes the matching contributions piece only for the PSPP, teachers

and uniformed services, the matching contributions only.

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

MR. HARRIS: Thank you, Mr. Chair.

I wonder if perhaps the minister could show us where, either in this

section

of the Budget or elsewhere, the additional contributions to assist the unfunded

liability would be? Perhaps, while she is on her feet, what approximately is the

amount of money actually in pension funds under the control of the government?

We have the Public Service Pension Plan, the Teachers' Pension Plan, and

others. Is there a statement in the Budget, or other information, as to the

amount of capital that resides in these pension plans that are there? Obviously,

when we are talking about public debt we get conversations about the unfunded

liability of the pension funds. On the other hand, the significant amount of

capital in these funds should be regarded as a government asset somewhere along

the way as well. I don't see, certainly in the Consolidated Fund Services, any

indication of the amount of money in the government controlled pension funds. I

know there is an annual report presented to the House on it, but is there some

indication that the minister can have, from the documents here, as to what the

amounts are?

CHAIR: The hon. the Minister of Finance.

MS J.M. AYLWARD: Thank you, Mr. Chair.

The actual amounts extra that we are contributing - as you know, we are

contributing an extra $40 million a year for the PSPP and $76 million a year for

the teachers's pension plan. That is over and above the matched contributions

that we make. The total amount in the plan, I think the unfunded liability is

currently at about 50.3 per cent. I think the total debt load of the plan, or

the total amount of the plan - I am just looking through the Budget here to see

if I can locate where that is. If I cannot, I will get back to you on that.

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

MR. HARRIS: So $40 million for the Public Service Pension Plan and $76

million for the teacher's pension plan? That does not appear in Consolidated

Fund Services, does it? Where would that be? Would that be appropriated in the

education department for the teacher's fund and somewhere else for the public

service pension?

MS J.M. AYLWARD: No, I do not think so. I am just trying to find it in my

figures here. It has not gone through the various departments because the

Consolidated Fund Services

section handles the pension plans of the Province, as

you know. So it would have to come through here. As I just said to you, I am

looking to find the exact line or the note that would do it. If I cannot find it

during this period, I will let you know.

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

MR. HARRIS: Thank you, Mr. Chair.

I could not find it either that is why I asked the minister. Perhaps the

minister could obtain that information and see where it comes from because,

obviously, if it is an annual contribution it does have to be voted by the

House. Presumably it is either here or -

MS J.M. AYLWARD: I would say to the member opposite that the actual

management of the Public Service Pension Plan is certainly something that is

done by government. We have recently, as you pointed out in your commentary in

Question Period, we have made significant strides in this potential collective

agreement because we are looking to move towards joint trusteeship of the

pension plan. Also, right now in place, we have a Pension Advisory Committee

which is comprised of all of the union leaders as it relates to each of their

plans. This information is available in terms of the unfunded liability, the

acid mix of the plan, the contributions, and the actual capital as it relates to

the pension plan.

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

MR. HARRIS: Thank you, Mr .Chair.

I recognize, Madam Minister, that significant progress, at least on a

tentative basis, has been made by the various offers back and forth to resolve

two pretty important problems that we have endured in this Province for many

years. Even though it is sort of an off budget item, we constantly get reminded

that our public debt, even though we have a table of public debt here in the

documents, that does not count the unfunded liability that we have in other

areas. It certainly would be nice to see that there are assets associated with

that, which I understand to be quite significant in terms of the hundreds of

millions of dollars. I would assume that if Consolidated Fund Services is

responsible for dealing with the unfunded liability and other pension

contributions, that we would somewhere in the allocations for either employee

retirement - I would expect that in the employee retirement arrangements, where

it is really for five heads of expenditures, that one of those heads would be

expected to deal with the whole issue of unfunded liability. Yet, I do not see

it anywhere there either, Madam Minister.

One further question, Madam Minister. There is a reference here to Capital

expenditure under Consolidated Fund Services. I see a negative $17 million

there. This is on page 3 under Consolidated Fund Services. There is a reference

there to a Capital recovery of $17 million under the -

MS J.M. AYLWARD: What

section are you in?

MR. HARRIS: It is an unnumbered page right at the beginning. Page 5 has

the line items but the

summary is prior to that. It is an unnumbered page but I

guess it will be page 3, two pages before page 5. There is a

summary of

expenditure and related revenue.

Under Related Revenue, there is $211 million Current, and Capital of $17

million. I wonder if the minister could explain what the Capital revenue of $17

million might be under that

summary?

CHAIR: The hon. the Minister of Finance.

MS J.M. AYLWARD: Thank you, Madam Chair.

This is the collection of the principal amount of various loans and

investments, including NLHC of $10 million and Gull Island Power windup of $3

million, which was deferred from 2000-2001. Specifically, that is what it refers

to. The principal piece of this would be the $10 million for NLHC.

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

MR. HARRIS: Thank you, Madam Chair.

One final question to the minister. Under line item 2.1.02, again under the

pension fund. There is a statement of $12.3 million to be voted "...for

special retirement and other payments as approved by Treasury Board." Would

the minister give us an idea as to what level of retirements that covers? Does

that cover early retirement within the public sector? Which I assume it does, or

special arrangements to reduce numbers in the public service. If that is the

case, what order of numbers are we talking about here in terms of people who

might be involved in that $12 million expenditure? I notice that it was the same

as last year. There was $12 million appropriated and used. The year before I

think there was $10 million appropriated but only $8 million used. Could the

minister explain what decisions are expected to be made under that head and how

many people might be affected by it?

CHAIR: The hon. the Minister of Finance.

MS J.M. AYLWARD: Thank you, Madam Chair.

The pensions involved here include the Waterford Hartt Pension Plan, the

widow's of $282,000, and Workers' Compensation. Obviously, in a question

like this under Consolidated Fund Services, I do not have the exact number of

people for each pension plan and each of their contributions. I do not even know

if we could do that, quite frankly. In terms of a report, it would be a fair bit

of work. As you can see, of the four plans, the Workers' Compensation piece of

it is $26,000 - if you want the breakdown, to add it up. The widow's pension

is $282,000. The Hartt pension plan, which is the Waterford Pension Plan, Hartt

Report, is $1.4 million, and ex-gratia payments of 574. Again, this is also

associated with the Hartt Pension Plan. There is a piece there on redundancy

which is $2.1 million, and another piece associated with severance of $7.8

million. All of that is factored into that total amount of $12.2 million.

CHAIR: Order, please!

I ask the Clerk to call the heads.

On motion, subheads 1.1.01 through 3.1.01 carried.

On motion, Department of Consolidated Fund Services, total heads, without

amendment, carried.

CHAIR: I call Contingency Reserve.

Shall it carry?

SOME HON. MEMBERS: Carried.

CHAIR: Shall I report the Contingency Reserve carried?

SOME HON. MEMBERS: Carried.

On motion, Contingency Reserve, carried.

MR. LUSH: Madam Chair, I move the Committee rise, report progress and ask

leave to sit again.

On motion, that the Committee rise, report progress and ask leave to sit

again, Mr. Speaker returned to the Chair.

MR. SPEAKER (Snow): The hon. the Member for Burin-Placentia West.

MS M. HODDER: Mr. Speaker, the Committee of Supply have considered the

matters to it referred, and have passed the Consolidated Fund Services and the

Contingency Reserve heads of expenditure.

On motion, report received and adopted, Committee ordered to sit again on

tomorrow.

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

MR. LUSH: Mr. Speaker, I wonder if hon. members would mind just taking a

brief recess for about five minutes so members can stretch.

MR. SPEAKER: Is it agreed that we recess for five minutes?

AN HON. MEMBER: Agreed.

Recess

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

MR. LUSH: Motion 1, Mr. Speaker.

MR. SPEAKER: Motion 1, the Budget debate.

The hon. the Opposition House Leader.

SOME HON. MEMBERS: Hear, hear!

MR. SULLIVAN: Thank you, Mr. Speaker.

I rise today to have a few comments on our Budget for the 2001-2002 fiscal

year. Budget documents are supposed to give us the real truth, facts, and the

true picture of Newfoundland revenues and expenditures for this coming year. We

always advocate there are usually two versions of a budget: there is the

government version and there is the Auditor General's version.

MR. J. BYRNE: The real version.

MR. SULLIVAN: The real version, the real facts, based on real

expenditures and assessment by the person whose responsibility it is to audit

the books and to tell us what government is not doing properly in their

expenditure and controls in the Budget.

I am going to take some time, first of all, to just run through the Budget

Speech and some of the things I will talk about. I know the Minister of Labour

is nodding in agreement there. I am delighted to see she is agreeing with

everything I have said so far. She might not be nodding by the time I am

finished, but at least she is off to a good start, I would say. She is off to a

tremendous start.

One particular reference here says: a restrictive ceiling, the federal

government has imposed a caps equalization.

That is correct and I have agree, I might say, with taking a shot at that

item, because one of the purposes of equalization is to provide services to the

provinces of this country, allow them to have a reasonable level of services,

comparative services, meeting national standards, at least acceptable national

standards. I think the word acceptable is used. That is one of the underlying

principles of equalization, to allow all provinces to be able to have a certain

standard.

It happened in 1982 that there was a cap put on equalization because, as

equalization kept increasing, the amount, the payouts of the have-not provinces,

kept going up and up until the cap went on it. When the cap went on

equalization, it meant - it was capped when there was about $10 billion in that

pot of money, in that ballpark. We can total up the equalization and get the

federal records there. I am sure on the Internet you will access that, about $10

billion in equalization. Because other provinces' economies have grown

rapidly, because in other have-not provinces the disparity has increased, the

cap on equalization doesn't allow our Province to get its share of the pie

sufficient to be able to narrow that gap and make us less of a have-not.

Government supports this. This is an issue that people on the other side of the

House would support. That is an issue they would support, lifting the cap.

Last fall, the federal government figured that they needed seats in Atlantic

Canada, because they figured they were going to have problems. They had to get

gains in Atlantic Canada. What they did last fall, they announced a lifting in

the cap on equalization. The figures put forth by this government said: because

you lifted the cap for one year only, just this past fiscal year, we have an

extra $38 million. Can you imagine, the cap is on it now for nineteen years.

What would we have in nineteen years if it was $38 million a year? We would have

about $750 million, if you look at that, around $750 million. That is a lot of

money. The cap is going back on again next year and it is bad. That is one thing

that has to be eliminated because - I will explain again - there is no election

next year, but if there is only $10 million in a pot, and other provinces grow

faster than us, and the gap between haves and have-nots gets wider, you need

more equalization to reduce that gap. Because equalization is capped we cannot

get the funding in to close the gap, and the rich get richer and the poor get

poorer. That is what has happened with a cap on equalization, and that is wrong.

It has cost us this year alone $38 million that we happened to get. It would

have cost us had there not been a federal election and they announced that. That

is another $38 million we would be looking for. Thirty-eight million, by the

way, would be enough to cover over 2 per cent of an increase in the entire

public service, just that part alone. It would equate to that, and that is

significant.

AN HON. MEMBER: What are you going to do next year, Loyola? (Inaudible) 2

per cent in this year, (inaudible)?

MR. SULLIVAN: I didn't say that. Just listen to what I said.

Because there was a federal election, they lifted the cap on equalization for

this year only. We got $38 million. That $38 million would allow you to have

more than a 2 per cent increase in the public service. Why do they have to cap

it? If the cap wasn't there we would have this next year, and maybe more and

more and more, forever. Get rid of the cap on equalization. Talk to your cousins

in Ottawa, talk to your federal cousins, and get the cap lifted on equalization.

The only Liberal Government in Canada, provincially, that can't get their

federal counterparts to make decisions that are favourable to our Province. We

have been crucified by federal government policy in the last number of years. I

will get to that. It is a revenue item in this Budget that is serious.

Your government, your Finance Minister, supports what I am saying. The

comment on hearing this: I am agreeing with this statement here. Transfer growth

will be constrained in any case by a restrictive ceiling the federal government

has imposed that caps equalization. It says: A slowing economy will affect our

own tax revenues.

The same minister is there indicating that this cap is hurting us. I am

saying it is, and the amount that it is hurting us, and it has been going on for

nineteen years. That is the first thing that has to happen.

If we are part of federalism, if we want to get out of federalism, what we

should get - what is your vision of federalism? To allow all partners in that

federalism to be able to become as self- sufficient as possible by tearing down

barriers and providing incentives to have-nots to close the gap.

European Union: Ireland is a part of the European Union. They had no

allegiance to Ireland. They are not part of one country. They are not a province

or a state of a country. They are a separate country, and they were given a

ten-year concession so that their economy can grow. They are facing great

prosperity now, but if you were clawing it all back, for example, and didn't

get the benefits, what is the point, just like our revenues in the offshore. We

have to look at leveling the playing field.

There are strings being pulled in Ottawa from all directions, from Quebec and

everybody else, that oppose some of these directions here. Right now we are

getting into more of a conciliatory. Even people like Ralph Klein are speaking

out, indicating that we need to do something about those things. We have to have

changes. We have to do something about that cap on equalization. That is one

thing, a cap on equalization.

I am going to get back to other things about equalization. There are other

aspects of equalization too. Why is equalization there? It is guaranteed,

constitutionally guaranteed equalization. It is there. It is a guarantee. It is

a guarantee that provinces shall receive funding from the federal government so

that wealthy provinces can help share in and help the revenues in provinces that

do not perform up to the Canadian standard, so they can enable us to have a

reasonable quality of service. That is one of the fundamental principles in our

federalism, equalization, so fundamental it is constitutionally guaranteed. That

is important.

Now, without that guarantee, our Province would have been cut adrift a long

time ago. I mean, we brought into Confederation - what are we getting out of

Confederation? People say: Newfoundland, look what you are getting. You are

getting your handout programs and all these things. Look, we brought into

Confederation a tremendous wealth, a tremendous amount of resources, that we

brought into the Dominion of Canada. We brought offshore, offshore oil, offshore

resources. Fish and other marine related species have contributed significantly.

We have a coastline that spans a large part of Eastern Canada. We brought a

multitude of resources from the sea, renewable and non-renewable resources. We

have Labrador. Labrador is a wealth of resources that have contributed immensely

to the Canadian economy, as well as the Newfoundland economy. We don't have to

be ashamed, and we should not be ashamed, because we get some transfer payments

from Ottawa.

What we should be ashamed of, all of us should be ashamed of, and the people

who are representing us should be ashamed of, is that we have allowed the gap

disparity to get greater from year to year, that now we are becoming so

dependant on federal revenues, because federalism has not worked for us. It has

not worked the way it is supposed to work. I mean, if federalism is supposed to

work, why do you cap constitutional and guaranteed equalization? You don't cap

it if that is what the purpose is, to equal or level the playing field.

If a person wants a service, wants to be able to go to a doctor here in St.

John's, Newfoundland or Port aux Basques, Newfoundland, a person wants to go

to a medical facility, they should have a reasonable, comparative opportunity to

be able to do that, the same as anyone in Humbold, Saskatchewan or in Calgary,

Alberta, or whatever the case may be. We should have that opportunity that is

not being provided. Federalism is gradually squeezing and squeezing and

squeezing more out of that equation.

When you look at equalization, there are thirty-some categories of

equalization that we look at, and in each one of these there are clawbacks based

on our own productivity, on what we produce.

Let's look at one other aspect of it. Royalties revenues that we collect:

last year we collected almost $40 million in royalty revenues from offshore oil

in this Province, almost $40 million. That is showing up here in this Budget as

a part of our provincial revenues under the heading, Natural Resources Taxes and

Royalties. It says $49 million this year, last year $60.8 million. Out of that

$60 million or so, $40 million came from offshore oil and gas. Out of that $40

million, that shows us revenues of our Province, under equalization, when we got

our equalization cheque from Ottawa, on that cheque there was $28 million less,

because they took 70 per cent of that $40 million, a little bit less than $40

million, I think it was about $38 million, we will say $40 million, a nice round

number, they took 70 per cent of that $40 million and they took back $28

million, less. So we lost $28 million less in equalization because we took $40

million in royalties in the offshore.

What is going to happen? Increase production, royalties go up. The Terra Nova

field comes on stream, White Rose, Ben Nevis, Hebron field, as the fields come

on stream, we can visualize $500 million, $600 million, $700 million and maybe

$800 million. Can you imagine $800 million in the next decade in royalties

coming into our Province? Eight hundred million, 70 per cent? Eight hundred

million shown as revenue, and we go over and look at equalization and $560

million being taken back out of $800 million. What would $560 million do to our

economy? It would do a tremendous amount. It would allow our employees to have a

level of respect and dignity and pay. It would allow us to have a proper

structure of roads, health care facilities, replace equipment that is outdated,

antiquated. It would allow us to be able to perform at a very high level. In

fact, that would pay for all our debt expenses in an entire year, that amount of

money. Every single cent, we would pay down an entire debt.

Can you imagine, if we were getting enough in royalties - royalty revenue

from call-back, that is not just counting royalty revenues. Royalty revenues

alone in the next decade could amount to more than enough to pay all the

interest on our debt. If you can imagine over $500 million to $600 million, that

we do not have to pay down a debt that we have now, extra to spend, or to retire

debt, or whatever the case.

We cannot retire debt, in the situation we are in today. We are having a job

to meet revenues and expenditures, and our debt has been going up every year.

Our net public sector debt now is about $7 million. We have also a significant

debt in the Public Service Pension Plan; we have another debt there of $1.1

billion. We have $1.5 billion in the Newfoundland and Labrador Teachers'

Pension Fund. We have a debt just on pension fund of $48 million in the pension

fund of this Assembly here. We have another $200 million debt in the uniformed

service. If you add that all up, what do we have? We have $2.75 billion of

unfunded liability in pension plans alone in our Province, on top of a net

public sector debt of about $7 million. That is a significant figure, when you

are looking at almost $10 billion worth of debt in a province that has a

shrinking population, with less than some of the major cities in this country.

We have a declining population from 583,000 people down to about 539,000 people,

and we have had a tremendous out-migration.

While we are on the topic of talking about what the federal government should

do: In 1994-95, and I strongly opposed this - I do not know, but I am sure the

Province could not have agreed with it at the time, but it happened; when our

former Premier, who is now the federal Industry Minister, sat in Cabinet, they

changed the formula by which we get funding from Ottawa, under Canada Health and

Social Transfer. That funding used to be on a needs basis.

There were two programs available in this Province before; two programs.

There was the Established Programme Financing for health and post-secondary

education that was in one fund, and there was CAP, the Canada Assistance Plan,

to assist people on social services. We got 50 per cent on each dollar we spent

on post-secondary, on health and on the Canada Assistance Plan under that. We

got a 50 per cent rebate on each dollar to assist us. In other words, we were

getting funding based on what our needs were. Right now, what happened? The

federal minister, in his great wisdom, decided, we are going to change that, and

our Province, with the declining population we have been experiencing for some

time, now feel the wrath of that decision. We were feeling the wrath of that

decision at the time, and now we are finding that our money has diminished.

Let's just look at it. From 1994-1995, to this fiscal year right now - and

the minister will tell you the same thing - just in this fiscal year alone we

are getting $92 million less under Canada Health and Social Transfers than we

got seven years ago. Ninety-two million dollars less today than we got seven

years ago under Canada Health and Social Transfer. When you look back at what it

has been, since they changed it under the

schedule that is given, 2005-2006, we

are going to see our Province receive almost one billion dollars accumulative

less money in an eleven-year period because of changes that were made to the

Canada Health and Social Transfer. I mean, almost a billion dollars. Our

Province is only going to raise this year, in all provincial sources of revenue,

even if you take out Recoveries under Sinking Fund, we are only going to raise

from general revenues and taxation revenues about $1,840,000,000.

Here we have $1 billion taken out of one program of the federal government,

equivalent to over half of what we raised in an entire year. I mean that is an

astronomical amount of money. That is a tremendous amount of money when you look

at it. What it would not do for this Province! Can you imagine, just this year

alone, what we are losing. The $93 million over what we got seven years ago

would more than pay for the increase that was put on the table and the offer by

government at the public (inaudible). That would more than pay for that, just

that amount alone, what came out, if you use that equivalent. If that had not to

be paid out of the funds of the Province, that is $93 million more we could use

for health and post-secondary education in our Province because that is the

intent of the fund in the first place. If we had another $93 million we could do

a lot of things.

We have a lot of antiquated equipment in our Province. I have been in the

hospitals. I have seen equipment broken down. I happened to be there sometime

last year and this person said: While you are getting this test, do you mind if

someone works on that equipment there? I said, no, not at all. The faster you

get that back up and working, the better. He said: Look, they are broke down

more than they are working. Radiologists and other specialists in there are

telling you the same thing. The Canadian Association of Radiologists indicated

that the equipment is unsafe. There are dangers, the equipment is unsafe.

This Province, in September of last year, had the option to avail of funds

out of a $500 million fund to use for medical equipment in this country, a

special fund, a one-time fund, $500 million. We could get a cut of that, but

what did we do? We did not avail of it. It was reported on March 28, just a few

days ago, that we did not access this fund. We were one of the provinces that

did not. Rich Alberta accessed the fund. They wanted funds for medical

equipment. Ontario wanted and accessed it. Prince Edward Island did.

Saskatchewan accessed the fund, Manitoba and British Columbia. Health Canada has

been reported as saying we did not. I asked the minister here today, in this

House, if that was the case and she did not answer. I asked her: Did you access

the fund? She said: We are spending money on medical equipment. I know very well

what we are spending on medical equipment, $32.4 million. That is the figure

that is being used. I know what is being spent and what is tabled here in the

House, basically, in the Special Warrants. I follow them, I know what is going

into equipment.

Why this Province did not look for millions of dollars when I know people

have died waiting -

I know a person recently, within this past several months, who was waiting to

get into hospital, was told four to six weeks, and every week she was terrified.

She only had one medical problem, a healthy woman, and on the fourth week one of

her children found her on the floor of her kitchen. She died within minutes

thereafter and did not get the procedure she wanted. I know others, and I know

doctors who know others, who have gone public. I know that family quite well.

She lived in Ferryland, had one medical problem, and that lady should be alive

today.

What is bottlenecking our system? I have talked about waste in this system,

and I will say it again. I brought it up to a CEO of a major hospital board in

this Province and he agreed with me. I said our system is getting bottlenecked

today because we cannot get diagnosed. There is something wrong when there are

sick people in a hospital in St. Anthony, and there are more in Port aux

Basques, down in Burin and everywhere else. I have had calls from people in the

hospital in Burin on a Sunday evening. I have gotten them on a Saturday morning,

from St. Anthony and Port aux Basque and all over. I have talked to people who

could not even get access to a dye test, an angiogram. There are up to forty and

fifty at one time in hospitals all over this Province; a little procedure that

takes about 20 minutes. They bring you in and it takes about 20 minutes, but you

have to have a bed in here to get in and get that done. I talked to the

cardiologists, the people who do angiograms. I have tried to become as

knowledgeable on it as possible. I try to research it when I raise an issue. At

least, not being an expert on it, I like to talk to experts and get their

opinion and get their knowledge of the system, as people who work in the field.

I have some limited knowledge in that particular field but I rely on people who

know the business, who know the job.

They said: Look, if you had somebody who needed an angiogram - and there are

dozens, hundreds, in this Province waiting - you could come in and get an

angiogram done, and if you are a candidate for an angioplasty, we will call it

the balloon test, you go in and get that done and in three days, if all goes

well, you are home again, fine. Still, they keep fifty and sixty in hospitals,

dozens and dozens or more all over the place waiting to get in to get that test.

We are bottlenecking the system.

The system is bottlenecked too because of MRI. We have one MRI. New

Brunswick, I think somebody said, has five. I do not know the exact figure. They

have mobile MRIs in New Brunswick. We have one that we use for half a day. Half

a day is all the resource that is being put into using that. Doctors cannot get

an MRI for their patients.

AN HON. MEMBER: They are only using it half a day?

MR. SULLIVAN: Yes. Each day it is only used half time. An interesting

point, I say to a person who has been in the health care field. In fact, on

weekends it is not scheduled to be used and in the nighttimes it is not

scheduled to be used. I have been told - and I did not bother to substantiate

this - that even on weekends people pay the people to go in and do certain MRI s

on animals and so on; that it is paid for directly. I was even told that. I did

not bother to check if that was accurate, but I have some reason to believe that

it could be true, that they have even done animals in there. The people were

paid to go in and use it in their down time on weekends.

AN HON. MEMBER: They do emergencies.

MR. SULLIVAN: They do emergencies, yes, basically at any time.

I am asking, and I have asked the question before, I have said it here in

this House: Why are we not using them eighteen and twenty hours a day? I checked

other jurisdictions in this Country that are using them up to eighteen and

twenty hours a day. Now, to run them twenty-four hours you might increase their

maintenance cost. If you run them steady, you will increase their maintenance

costs and other things, but use them ten and twelve hours. Why not eighteen or

twenty hours? You need extra resources then, you need extra staff, you need

extra things, and we are not putting the money into it. Why spend over $1million

on a facility that you cannot operate?

Also I have said: Why do you build hospitals where you cannot use all of the

medical facility? Why did you build a forty-bed hospital down in St. Lawrence in

the early 1990s, and you have only opened thirty, to this day? Why did you build

a big one down in Burgeo and there are some of them not even used? I went

through it and looked at the facility; it is not even utilized, and the capital

cost of building it, maintaining the facility, when you are not going to use it.

Build within the amount that you are prepared to give the commitment to use.

That is dollars wasted, chewed up. I call that wastage in the system.

When I have been challenged to name a figure - and some people used a figure

that I never used - I have said tens of millions. I have never nailed it down at

all. I might surprise myself if I found out how much inefficiency is in the

system.

I do know that if forty people are in a hospital bed in this Province waiting

to get an angiogram and cannot get one, and some of them are in there for five

weeks - thirty-five days in a hospital, at the cost in a hospital - in the

Health Sciences Centre, the average cost is about $800 a day, going up to about

$1,000 a day, I think. Years ago, it was $795. It is probably $1,000 now because

the beds are down and the total costs are still there. So $1,000 a day at

thirty-five days - $35,000 waiting to get an angiogram that is a twenty-minute

procedure.

Look, there are bottlenecks in the system occurring in diagnostic equipment

for heart surgery, for angiograms. There are bottlenecks in the system from

numerous diagnostic surgery there, and CEOs and people in the field will agree

with me. They will agree. I am sure the minister cannot disagree with me on this

either, because I have checked it out. I have talked to people. I have sat down

with them and I cannot understand why.

Would you believe - and I know the Member for Trinity North worked in the

system - hospital boards were not told, for last year, in the last fiscal year,

until the fall, until November I think it was, how much money they were going to

be allowed to spend, until the fiscal year was almost over. The did not know the

exact amount of money they were going to get.

How do you plan a one-year, a two-year, or three-year plan? Industries and

companies today look at five-year plans and three-year plans. You cannot look at

a ten-year plan any more. You have to be able to plan, if you have capital

expenditure and you have a plan to be productive, if you are out in business and

you look at a plan and your expenditures you are going to put into capital, and

how much you are going to put into your operating costs.

The City of St. John's looks at how much we are going to put into capital.

I think they put 11 per cent into capital there. I believe that is the figure

that was used there on roads or whatever. I do not know if it is the total

capital. This is how much money we allow, and that is what we will go up to, our

requirements. If we get too much capital borrowing, too much capital

expenditure, we have too much financing, we are spending our money and paying

down debt and we cannot provide services. So there has to be a balance between

borrowing and a balance between what you put into capital. We are not seeing

this government show a proper use of capital expenditure. It has been atrocious,

I can tell you.

I asked a question today in Consolidated Fund Services. Trans City, we are

still paying the price for giving a contract to the highest bidder. Can you

imagine government giving a contract to the highest bidder? Higher interest,

higher payments.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: We were going to get it back for a dollar at the end,

basically, I think, on the lease arrangement. Now we are going to get it back

for 60 per cent of market value or something. That was even changed, I think.

One of the companies they financed it through went under. I have the file on it.

I just remember some of these points. So, we are still paying for that.

On top of that, the court said: Oh, you did wrong. You were not allowed to

give it to them. You broke the law, Mr. Premier - the former Premier - you broke

the law by doing that. You have to pay back to this developer now, $1.6 million.

The judge's ruling had left the door open for another one who was in on it to

get another settlement of another $1.6 estimated because you broke the law.

Former Premier Wells - in other words, his Administration broke the law. The

court said: You broke the law, Premier, and you have to pay it.

MR. MANNING: Where is he now, the former Premier?

MR. SULLIVAN: He is the law now. He is the law, not broke the law. We

will not get into that. I do not want to get personal. I want to keep it on a

political level here.

On a very political level, he broke the law. That was not the only way we

wasted money.

MR. JOYCE: What about the deficit in 1989?

MR. SULLIVAN: Hang on there. You want to know the deficit in 1989. I will