December

1, 1992

HOUSE OF ASSEMBLY PROCEEDINGS Vol.

XLI No. 75

The House met at 2:00 p.m.

MR. SPEAKER (Lush): Order, please!

Statements by Ministers

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

DR. KITCHEN: Thank you, Mr. Speaker.

Today, December 1, is World AIDS Day, designated by the World

Health Organization as a day to increase public awareness about HIV/AIDS and to

strengthen both our determination to control this disease and our commitment to

address the needs of those individuals unfortunate enough to have contracted it.

In just over ten years, HIV has infected some 10 million

people worldwide, of whom more than half a million have developed AIDS. In

Canada, almost 7,000 people have developed AIDS. In Newfoundland, more than 119

people have been infected with HIV, twenty-nine have developed AIDS, and

eighteen have died. The virus spreads mainly through unprotected sex, but can be

transmitted also by sharing needles for drug injection, from infected mothers to

their unborn children, and through infected blood.

Early this fall I initiated a process for the development of

a comprehensive HIV/AIDS policy for this Province. Three working groups have

been established to address: Prevention and Education, Testing and Treatment,

and Care and Home Support. Members of the working groups come from various

government departments and from community-based organizations and groups. There

will be consultation with experts in prevention, control, care and treatment as

well as with individuals living with HIV/AIDS or who are affected by the

disease. I look forward to receiving from the working groups, recommendations to

guide government in the development of a comprehensive HIV/AIDS strategy for the

Province.

Mr. Speaker, we must recognize that AIDS is not only a very

serious problem, and an increasingly serious one, but that it is above all a

community problem. It is our problem - one that will affect the lives of many

Newfoundlanders and Labradorians. it is fitting that this day be set aside each

year to call attention to HIV/AIDS.

Thank you.

MR. SPEAKER: The hon. the Member for Harbour Main.

MR. DOYLE: Thank you, Mr. Speaker.

I want to thank the minister, as well, for a copy of his

statement. Hopefully, through his statement, and through the recognition of

December 1 as World AIDS Day, we can be all made a little bit more aware of this

dreaded disease and what it can do.

I notice, from the information that was given us this week,

that the theme this year for World AIDS Day is: A Community Commitment. That is

very appropriate, indeed, as well, because I think we all have to strengthen our

commitment to stress the need for community action.

At one time, this disease was thought to be confined to a

very small sector of our society but, indeed, we find today, that disease has

become everybody's business - nine, ten, eleven million people infected in a

ten-year period. Again, not only is it confined to men, we see that three

million to four million women are infected, as well. I guess, what is most

disturbing about it is that in spite of all the educational campaigns we have

ongoing and the information on the go about this disease, we figure that by the

year 2000 we are going to have 40 million people infected if something is not

done to stop the spread of this disease. From the information we were given this

week, I noticed, Mr. Speaker, that the Canadian AIDS Society is very active.

Going beyond their local scope, they are now into the African countries and in

Jamaica and Haiti, trying to stop the spread of the disease at that level.

What is really disturbing is that even though people are more

aware today than they were five years ago and ten years ago, of how the disease

is spread and the implications and the consequences of it, we find that the

disease is on the increase even though we have more educational campaigns and

that is really the frightening thing about AIDS. What is going to happen? Who

knows? The prediction is that by the year 2000, only eight years from now, we

are going to have 40 million cases, so Mr. Speaker, I think all of us at the

community level, at the government level, have to make possibly a stronger

commitment in making more monies available to the various associations who work

on the disease and in research, in particular.

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

a point of order.

MR. HARRIS: I wish to ask leave to speak to the

Ministerial Statement.

MR. SPEAKER: Does the hon. member have leave of the

House?

SOME HON. MEMBERS: Agreed.

MR. SPEAKER: Agreed.

MR. HARRIS: Thank you, Mr. Speaker.

I would like to join in the acknowledgement of December 1 as

the -

MR. MURPHY: A point of order, Mr. Speaker.

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

a point of order.

MR. MURPHY: What is the hon. member speaking to?

MR. SPEAKER: He is speaking to a Ministerial Statement.

MR. MURPHY: He doesn't have leave, as far as I am

concerned.

MR. SPEAKER: The member doesn't have leave? There is no

leave.

Oral Questions

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

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

I have a question for the Government House Leader, in

anticipation of the government's economic statement or the minibudget. I am

wondering: Has the Government House Leader given any consideration to the

process to be used to respond to the minibudget or economic statement? I guess I

am asking this question because I have concern, and I think it is only fair,

that all members of the Legislature have adequate time to respond to the

implications of the minibudget. So, I am wondering: Have government given any

consideration to that, and what do we expect?

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

Minister of Justice.

MR. ROBERTS: Thank you, Mr. Speaker.

The answer to the question is yes, but let me expand. We have

given consideration to it. The procedure we shall follow is that we have a

Cabinet meeting on Thursday, which is a normal day that at least this

administration holds Cabinet. I assume we will take some decisions then both on

timing and on procedures. There are a number of procedures, as my hon. friend is

no doubt aware; I will undertake to consult with him as soon as we have come to

a decision as a Cabinet, to seek his concurrence where that is necessary and to

tell him what we are proposing to do where it is simply a matter for us. But I

expect, by Thursday, we ought to be in a position to tell him where we propose

to go and then he can decide where he and his colleagues propose to go from

there.

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

MR. MATTHEWS: Thank you. I thank the Government House

Leader for that and I look forward to hearing from him after Thursday.

I have a question for the Minister of Fisheries, Mr. Speaker.

Over the last ten days or so, the Minister of Fisheries has

had meetings with the federal Minister of Fisheries and Oceans and other

Atlantic Provinces fisheries ministers, and of course it looks like the news is

anything but good again pertaining to fish quotas for 1993. I am wondering if

the minister has had a chance to review what might be coming down in '93 and

what the implications are once again for the Newfoundland fishing industry,

particularly the fishing industry on the South and Southwest Coasts of the

Province?

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

MR. CARTER: Mr. Speaker, yes, we had meetings in Ottawa

two weeks ago and again in New Brunswick last Friday afternoon, and the fact of

the matter is, these Gulf cod stocks, groundfish stocks will be reduced in 1993,

as will the total allowable catch in the area known as 3Ps, that is on the South

Coast of Newfoundland. The Minister of Fisheries and Oceans will be announcing

his management plan, I believe, sometime around the middle of December, at which

time he will then, no doubt, be a bit more specific as to tonnages and what, if

any, compensation will be offered to people affected.

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

MR. MATTHEWS: Thank you, Mr. Speaker.

There have been some preliminary figures coming from

different sources and I am sure the minister is probably aware of them. I am

just wondering: Has the minister had discussions with any of the fish processing

companies, in particular, Fishery Products International, to get some indication

as to what these drastic quota reductions will mean for Fishery Products

operations, particularly South Coast operations? Has the minister met with

Fishery Products International, does he have any indication whatever of what the

implications may be, and will we see further plant closures as a result of these

additional reductions?

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

MR. CARTER: Mr. Speaker, I should point out that the

federal minister is contemplating leaving the allowable catch on the western

side of Newfoundland pretty well where it is. There may be a very minor

reduction and the Province's position, of course, is given the fact that the

fish stocks are in serious trouble and given the fact that this year the actual

harvest was considerably less than the total allowable catch, which of course

says that it's a 'paper quota' when in fact the fish were not there, and we

called for a moratorium. I do not know what position the minister will take in

that regard but with respect to FPI, yes, - not on a daily basis but certainly

on a very regular basis, we are in contact with Mr. Vic Young or one of the

officials of FPI and it is obvious that the proposed reductions in TACs will to

some extent impact on FPI. The full extent will have to wait until the minister

announces his management plan which, like I said a moment ago, will probably be

around the middle of December. There is some pressure being brought to bear on

the minister that certain stocks on the, I think it is the Georges Bank and the

Scotian Shelf, that maybe access to those stocks be reserved for fixed-gear

small boat fishermen. The Province took the position at the last minister's

meeting in Fredericton that the deep-sea fleets should get a pro rata share of

that TAC. Now, there were three provinces in favour of that proposition and two

against. I do not know what decision the minister will take but that will impact

to some extent on the future prospects of FPI as it relates to their dependence

on that particular stock.

MR. SPEAKER: The hon. the Member for Menihek.

MR. A. SNOW: Thank you, Mr. Speaker.

My question is to the Minister of Education. I wonder if he

is aware that teachers in western Labrador are facing layoffs from their jobs

and income cuts? Now, this is apart altogether from the proposed mini-budget

that the Government has announced they will be coming in with later on this week

or early next week. Is he aware that the mining companies have cut their grants

to the school boards? These are grants in lieu of taxes to the school boards. Is

he aware of this and the predicament that the school boards will find themselves

in because of these cutbacks that the mining company will be having? These

cutbacks will cause layoffs and of course possibly as much as a 20 per cent

decrease in salaries to teachers in western Labrador.

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

MR. DECKER: Mr. Speaker, I can't say specifically I'm

aware of any layoffs of teachers. What I am aware of though is that the mining

companies in Labrador West have decided, for various reasons, to lower the

amount of money that they are giving to the school boards. School boards

themselves will have to decide what they are going to do to meet that shortfall.

One option which would be open to them I suppose would be to deal with layoffs

of teachers or some cutback in contracts. Hon. members will know that the board

in Labrador West has been supplementing the salaries of most, if not all, the

teachers in the area, and they were able to do this because they had money

coming in from the council, called a grant in lieu of taxes.

I cannot say specifically how the board will attempt to deal

with the fact that the companies have decided to cut back on the amounts. I

suppose, if the hon. member has learned that the boards intend to do that, he

probably knows more than I do. It will be a board decision as to how they deal

with this loss of a grant, Mr. Speaker.

MR. SPEAKER: The hon. the Member for Menihek.

MR. A. SNOW: Mr. Speaker, the minister is undoubtedly

aware that the decrease in the grants that the company is giving to the boards

is due to the abolition of the local school tax authority. Of course, it would

be dual taxation. The Minister of Finance is nodding his head in agreement with

what I'm saying.

Mr. Speaker, has the minister offered any assistance to the

school boards in western Labrador to help them cope with this disastrous problem

that's going to have to be addressed here in western Labrador?

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

MR. DECKER: Mr. Speaker, I have discussed the problem

with the school board in Labrador West. I've not offered them any extra money.

However, now, as a result of the abolition of school taxes that board will be

receiving an increase in funding which it would not have received had we kept

the school tax in place. The board and the council suggested at one time that

the whole reason for this grant being there in the first place was in lieu of

school taxes. Now there is some argument as to whether or not that was the real

reason why the grant was there. The grant was a grant per se, and it was a

considerable amount of money. IOC in recent years have been coming up with some

very difficult times. The sale of iron ore is down, the whole iron ore sector of

the economy is very flat, the Iron Ore Company - like government - has had to

tighten up its reins, and try to make some savings.

One of the areas where they decided to cut back on a portion

of a grant was a grant that they were giving without any obligation, to school

boards. As a result of that school boards will have to attempt to deal with that

issue. Unfortunately, government is not in a position to pick any particular

school board and say: We are going to give you special treatment. We treat the

school board in Labrador West exactly the same way we treat the school board in

the Strait of Belle Isle or the school board in Bay d'Espoir or wherever. That

is one of the things which we have been able to do with the abolition of school

tax, where there are not different classes of school boards in the Province.

MR. SPEAKER: The hon. the member for Menihek.

MR. A. SNOW: Mr. Speaker, the minister has suggested that

the school boards in western Labrador would receive more money this year from

the administration because of the change in the school tax authorities

throughout this Province. Would he table in this House, would he try to tell us,

the exact amounts of money that they received over the last few years and what

they will be getting over the next couple of years?

I am sure he is also aware that there is a tremendous

difference in the amount of money that the Iron Ore Company of Canada paid and

Wabush Mines paid, and with regard to how much the present administration is

going to be paying to the school boards in western Labrador. If they cannot get

this extra money, what does he propose that the school boards should be doing in

western Labrador, Mr. Speaker?

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

MR. DECKER: Mr. Speaker, I will have to get Hansard to

see specifically what the hon. member is asking me to table, if he wants me to

table something for the past few years, if he wants me to table something that

we have not yet done for the next two years. I will get Hansard, Mr. Speaker,

and if there is any way under the sun that I can comply with the hon. member's

request I will certainly endeavour to do it. However, Mr. Speaker, it is

probably going to take a person who has much more ability than I or anyone that

I know, to comply with the hon. member's request. But I will certainly take it

under advisement, Mr. Speaker.

The hon. member should know that in this Province school

boards have responsibilities and obligations. The way the system works, I don't

have the authority to go and say to any school board: you must hire a janitor,

you must hire a bookkeeper, you must do this, you must do that. Boards have a

certain amount of autonomy which they guard jealously, Mr. Speaker. They need

have no fear from me, I am not going to interfere in areas where boards have

responsibility.

MR. SPEAKER: The hon. the member for Menihek.

MR. A. SNOW: Mr. Speaker, I am not asking the minister to

interfere in the educational process in this Province. I am asking him to

administer his responsibility of delivering education fairly, with fairness and

balance, Mr. Speaker - I am sure he remembers those words - to the people of

this Province. That includes the people in western Labrador, Mr. Speaker.

He does recognize that this government promised that what

would happen, Mr. Speaker, is, when the school tax was abolished there would not

be a decrease in the amount of money that a school board would receive in this

Province. There is a decrease in western Labrador. Can he tell me how much money

it was decreased?

MR. SPEAKER: Order, please!

The hon. member is on a supplementary. I didn't get what the

question was. I don't know if there was a question in that.

AN HON. MEMBER: Yes there was.

MR. A. SNOW: What was the decrease?

MR. SPEAKER: I am sorry, if there was.

The hon. the Minister of Education.

MR. DECKER: Mr. Speaker, I did not specifically hear a

question either but I will tell the hon. member one thing he can be sure of, and

that is that this administration will act with fairness and balance. I will hold

up the record of the past three years to anyone in this Province to look at.

As for the abolition of the school tax, we made a statement,

and I stand by it, that as a result of the abolition of the school tax, no

school board will receive less money. As a result of the abolition of the school

tax, nobody will receive less money.

Now, Mr. Speaker, we stand by that statement, and the hon.

member can shout and scream and kick all he likes, and hon. members opposite can

shout all they like; we are not going to bring back the school tax, that is a

fait accompli.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Burin - Placentia

West.

MR. TOBIN: Mr. Speaker, I have a question for the

Minister of Social Services. While the Minister of Education is talking about

recognizing a decrease in the school boards of western Labrador, my question to

the Minister of Social Services is dealing with the stagnant position of the

amount of funding that is being provided to the Consumer Organization for the

Disabled in this Province.

In the past year COD, as they are referred to, had to close

their office from December to April because of the lack of funding received from

the provincial government.

Let me ask the minister: Does he believe that the amount of

money which they receive from this Province is adequate for the Consumer

Organization for the Disabled to operate under?

MR. SPEAKER: The hon. the Minister of Social Services.

MR. GULLAGE: Mr. Speaker, the Consumer Organization for

the Disabled representatives were in to see me just a few days ago, and the

amount of money that they are receiving from the Province is indeed a small

portion of the amount required; but I have to tell the House that most

organizations that deal with my department - most community organizations - all

worthwhile, have difficulties with their budgets at this time, as we do.

In addressing their deficits, or projected deficits, it is

very difficult in that we have only so much money available for community

organizations, for programs per se, and that money has to be shared amongst many

organizations. In fact, most community organizations deal in some way with my

department, and in these difficult times I would have to say that their amount

of funding from the Province is probably not adequate per se, but it is very

difficult to increase it.

MR. SPEAKER: The hon. the Member for Burin - Placentia

West.

MR. TOBIN: Mr. Speaker, we have heard the Premier in the

past few days talk about the deficit of other provinces being in the same or

similar situation to the deficit of this Province. Let me tell the minister, in

that case, while this Province provides a grant of $4,600; PEI provides a grant

of $52,000 to theirs; Nova Scotia provides a grant of $88,500; Alberta $65,000;

Ontario, which is much larger, $100,000.

If we were to compare the $52,000 that Prince Edward Island

provides to their organization group, and the $4,600 - the measly $4,600 that we

provide in this Province - let me ask the minister: Does it bother him to know

that that is all the money that this government is giving to such an

organization?

MR. SPEAKER: The hon. the Minister of Social Services.

MR. GULLAGE: Yes, Mr. Speaker, it does bother me, looking

at those statistics. In fact they were made available, of course, to me as well.

I am having it checked by my officials as to the comparison with other

provinces. No doubt it is disproportionate, looking at per capita contribution

to the Consumer Organization for the Disabled vis--vis other organizations with

sometimes different names but with the same objectives.

Also, I am having checked the numbers of organizations

dealing with interacting with the problems of the disabled throughout the

country. In many cases other provinces have more than one organization. Some

have only one; some have several, so I want to get a firm fix on where we are

compared to other provinces, and compared to the number of organizations that

are concerned with and deal with the disabled community.

MR. SPEAKER: The hon. the Member for Burin - Placentia

West.

MR. TOBIN: Mr. Speaker, if we had several to split up the

$4,600 among it would not go very far, I say to the minister.

Let me ask the minister: Will he, today, tell the Consumer

Association for the Disabled that he will ensure, this year, that their office

will not have to close for any period of time for the lack of funding?

MR. SPEAKER: The hon. the Minister of Social Services.

MR. GULLAGE: Mr. Speaker, I cannot make that assurance. I

can only tell the hon. member that it is being checked into on an urgent basis.

I realize the concerns of this organization. I know that $4,600 appears to be an

inadequate amount, but we have, as I mentioned, contributions to make to many

community organizations. Many of them, the vast majority I should say of them,

have been in to see me with concerns about a projected deficit this year.

This is, however, as he points out, a more urgent situation,

in the sense that they are about to face possible closure of their office and I

am dealing with it on a priority basis. As soon as the figures are available and

the information is available to me we'll have to make a decision.

However, I have to point out to the House that we have only a

limited amount of funds, all of which have been expended or allotted, committed

for this fiscal year, and it is very difficult to solve the problems of this

organization or any other given the tough times that we have, and trying to find

money. The only way funds could be found at this point in the year, Mr. Speaker,

is to take it from another organization. That of course is very difficult to do.

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

MR. HARRIS: Thank you, Mr. Speaker. My question is for

the Minister of Finance and concerns the Financial Corporations Capital Tax Act

which was introduced into the House yesterday by the minister as an interesting

little amendment to the Financial Corporations Tax Act.

Can the minister tell the House why he introduced this

amendment as a change in tax conditions that apply to the use of venture capital

in the Province when the only corporation affected by this is in fact a trust

company known as Fortis Trust, a related company to Newfoundland Light and

Power, which is already making a fortune of money off the consumers of this

Province, Mr. Speaker, and this is really a tax measure designed to relieve

taxes for this one sole corporation?

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

MR. BAKER: Thank you, Mr. Speaker. The Financial

Corporation Capital Tax Act imposes a tax on paid-up capital of banks, trust

companies and loan companies operating in the Province. The rate is 3 per cent.

There's a $500,000 deduction when the banks and trust companies and so on

allocate their paid-up capital per province. They're scattered over a lot of

provinces. There's a half million dollar deduction that is made in their figures

and then they pay tax on the paid-up capital beyond that.

Now there's a slight problem in terms of the amount of

paid-up capital that's necessary, the minimum amount of paid-up capital that's

necessary, for the deposit insurance coverage. So that a small company getting

into this field would have difficulty starting out under the condition that it

needs a minimum of $5 million in paid-up capital on which tax must be paid, even

though if the amount of business they're doing would require a much smaller

amount of paid-up capital under normal business practices.

In the case of this particular trust company - and the

request came from them a while ago - their activity in the Province....

SOME HON. MEMBERS: (Inaudible)!

MR. SPEAKER: Order, please!

MR. BAKER: Their activity in the Province would require

under normal circumstances an amount of about half a million dollars paid-up

capital. Unfortunately, in their sense, they would have to pay the 3 per cent

tax on the full $5 million of paid-up capital. That means effectively their tax

rate is at ten times the tax rate of the larger companies in this business,

which means it's a total disincentive for anybody else to get into the business

and compete with the banks and trust companies and so on in this Province.

So we have determined that for smaller companies wishing to

get into this field that we would make an adjustment on the lower end to make it

more possible for smaller companies to become competitive with the banks and

trust companies.

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

MR. HARRIS: Thank you, Mr. Speaker. The minister knows

full well that all this money is invested one way or the other. What I want to

know is why the government of this Province are giving a tax holiday for $5

million on 3 per cent for Fortis Trust, and is not prepared to give any relief

to Newfoundland and Labrador taxpayers who have to pay 12 per cent tax on every

single purchase that they make?

SOME HON. MEMBERS: Hear, hear!

MR. HARRIS: Why doesn't the government give some relief

to taxpayers for the amount of money that they spend coming up this Christmas to

give them a bit of a break on the 12 per cent that they pay, and not start

giving back money to Fortis Trust and to the shareholders of Newfoundland Light

and Power, Mr. Speaker, who are only paying a 3 per cent tax? Why give them a

tax holiday and make the people of this Province pay a full 12 per cent plus the

GST of 7 per cent on top of that?

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

MR. BAKER: Yes, Mr. Speaker, I suppose there could be a

lot of arguments made in that sense. Our strategic economic plan envisions

giving certain types of tax relief to certain kinds of businesses in the

Province to try to stimulate activity and I believe that there is a certain

amount of stimulus ultimately that is needed in this Province, if we are to get

away from seeing ever more increasing dependence on government. So the only way

to get out from under this stimulus is to try to encourage more job creation

within the Province and through the smaller companies particularly. So, Mr.

Speaker, that is an argument that could go on; the hon. member could argue that

we should never ever do any stimulus in terms of business, and we should force

more and more people onto the welfare rolls of the Province and that is the way

to solve the problems of this Province - the hon. member could argue that.

However, Mr. Speaker, there is another side to that story.

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

supplementary.

MR. HARRIS: Thank you, Mr. Speaker.

The minister knows and all of us in the House know that this

is not a job creation company, this is a mortgage company that loans money and

makes interest on it, Mr. Speaker. The only effect of this Bill right now, Mr.

Speaker, is to pass back $150,000 to Fortis Trust Co. and the shareholders of

Newfoundland Light and Power, why should this Bill be passed right now to give

relief to them when the taxpayers of Newfoundland need relief right now?

SOME HON. MEMBERS: Hear, hear!

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

MR. BAKER: Thank you, Mr. Speaker.

Again, I am referring to the answer to my previous question,

Mr. Speaker. If the hon. member is proposing that there should be no incentive

to start business, if the hon. member is suggesting that the investment of money

in this Province is not a stimulus for job creation, if the hon. member is

suggesting these things, I can perhaps understand it, bearing in mind some of

his previous statements in this House about going out and borrowing an extra

$200 million or $300 million: it does not make any difference, we can bankrupt

the Province, as long as we go out and borrow the money. That is his solution to

everything. Mr. Speaker, bearing in mind that type of statement from the hon.

member, I can understand him not understanding this situation.

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

MS. VERGE: Thank you, Mr. Speaker.

I was intending to ask my questions to the Minister of

Tourism and Culture, but in his absence I will direct them to the Premier.

The government Strategic Economic Plan says the government is

going to transfer administration and control of arts and culture centres to

appropriate regional or community organizations. Is the government in fact,

proceeding to divest itself of the Province's five arts and culture centres? If

so, how is this going to result in any improvement and how is it going to help

achieve the Province's stated objective of fostering cultural and tourism

industries?

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

MR. BAKER: Thank you, Mr. Speaker.

Discussions I understand are underway in one if not two

communities in terms of local control of the arts and culture centres. Mr.

Speaker, we believe that to be more responsive to the local needs, and the

centres we are talking to agree with this. In order to be more responsive to the

local needs and in order to have better use of these facilities in terms of the

cultural affairs of the communities, it is better to have local control and the

centres can be more efficiently and effectively operated for the good of these

communities if the control is local. That, Mr. Speaker, would not presuppose

that then there would not be a provincial program and that there would not be a

provincial effort in terms of providing outlets, artists and so on to travel

around the Province; that can still happen under those circumstances but we

believe that the local control by local groups will give a better input and a

better cultural environment for that type of development in those communities.

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

MS. VERGE: Thank you, Mr. Speaker.

A supplementary to the Premier.

Will the Premier promise that the government will not

download arts and culture centres on municipalities or other local agencies

which are having trouble meeting their current obligations, and which do not

want the added burden of operating an arts and culture centre?

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

MR. BAKER: Mr. Speaker, I know the hon. member had her

question all prepared and so on, but she should have listened to my original

answer and it would have been unnecessary to ask that question. We are holding

discussions with these centres with a view to them taking over control. I don't

agree that that is downloading. If it is of advantage to the people, if it is of

advantage to these communities, and they wish to take over the control, why

should we stand in their way? This is not downloading, as the hon. member

pretends it is.

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

MS. VERGE: Thank you, Mr. Speaker.

A supplementary to the Premier or the Minister of Finance,

who seems to be stepping in for the Premier.

In cases where there are appropriate regional or community

organizations which want to take over responsibility for operating an arts and

culture centre, will the government guarantee to that organization at least as

much provincial funding as the government is now providing to operate the arts

and culture centre through the government departments of Tourism and Culture,

Works Services and Transportation and Finance? Will the government guarantee

sufficient ongoing provincial government financing to make possible the

continued operation of the arts and culture centre being transferred?

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

MR. BAKER: Mr. Speaker, the reason I am answering the

questions is that I am very familiar with the situation. I have been involved

with it for over a year in a direct way, and I happen to know exactly what is

going on. Over the last year-and-a-half there have been actual proposals made to

government from community groups and individuals in communities for taking over

either the centres or parts of the centres or whatever. So these proposals have

come in and I have been part of that process. That is why I am answering the

questions.

The second part of the member's question had to do with

government guaranteeing certain amounts of money. Now, Mr. Speaker, there we go

again. Let's start throwing money around all over the place. Hon. members should

know that times have changed, that the Province is in a very difficult financial

situation. So are other segments of this Province, other than government, in a

very difficult financial situation. I am not going to stand here, as the member

knows, and guarantee that millions and millions of dollars are going to be

thrown at anything. All I can tell the hon. member is this, that we are carrying

on discussions, not forcing the discussions.

MS. VERGE: With whom? What groups?

MR. BAKER: There are two communities. That is all I am

willing to say right now. We are carrying on discussions with two communities,

not being forced. We are not forcing discussions. This is as a response to

requests, Mr. Speaker, and we are carrying on those discussions for the better

use of these centres in the Province, and I think the hon. member should applaud

us for that.

MR. SPEAKER: Question Period has expired.

If I might remind hon. members of a rule with respect to

Question Period: As all hon. members know, there are a lot of guidelines

respecting which questions are permissible and the Chair tries to be very

flexible. That is as it is supposed to be, giving members the benefit of the

doubt with respect to questions. Again, it is a long-time tradition held by

Speakers. However, I should remind hon. members that one question asked today,

specifically the one asked by the Member for St. John's East, relates to an

anticipatory rule which, spelled out in Beauchesne, clause 410, subsection 14,

says, "Questions should not anticipate an Order of the Day although this does

not apply to the budget process." In other words, if we are to debate a matter,

then it ought not to be brought up in Question Period because it takes up an

unfair time of the Question Period when we are going to debate it in Orders of

the Day.

I want hon. members to be aware of that rule. The only

instance where it has been disallowed by Speakers, or not enforced, is with

respect to the budgetary process. The Chair has always allowed questions with

respect to the budgetary process but, in other matters, if they are to be

brought up in Orders of the Day, then members are advised not to raise the

question.

Presenting Reports by

Standing and Special Committees

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

MR. WINDSOR: Mr. Speaker, I beg leave today to table a

Special Report of the Standing Committee on Public Accounts. The report is

submitted to the House under the authority of sections 8 and 11, subsections 1

and 2, of the House of Assembly Act, and

section 84 (

e) of the Standing Orders

of the House of Assembly of Newfoundland.

Section 8 states, and I quote: "The

House of Assembly or a Committee may require that facts, matters and things

relating to the subject of enquiry before the House of Assembly or that

committee be verified or otherwise ascertained by the oral examination of

witnesses, and may examine those witnesses upon oath or affirmation; and for

that purpose, the speaker or clerk of the House of Assembly, or the chairperson

or clerk of that committee, may administer an oath of affirmation in the

following form, or to the same effect, to a witness:"

Section 11 states, Mr. Speaker, and I quote: "The House of

Assembly may command and compel the attendance before the House of Assembly, or

before a committee, of a person, and the production of papers and things that

the House of Assembly or committee considers necessary for its proceedings or

deliberations."

Section 11 (2) "A person neglecting or refusing to attend, or

to produce those papers and things before the House of Assembly or committee, is

guilty of a violation of this Act."

Standing Order 84 (

e) states "The said Standing Committees

shall be severally empowered to examine and enquire into all such matters as may

be referred to them by the House, and, to report from time to time, and, except

when the House otherwise orders to send for persons, papers and records, to

print from day to day such papers and evidence as may be ordered by them, and to

delegate to sub-committees all or any of their powers except the power to report

direct to the House."

Mr. Speaker, pursuant to the authority of the Public Accounts

Committee a 'Call to Give Evidence' was issued to the President, Comptroller,

and Director of Human Resources of Memorial University of Newfoundland by letter

dated November 18, 1992.

By letter dated November 24, 1992, the President of Memorial

University has advised the Committee that, and I quote: "In view of the

information available to me and the established conclusion in respect to how the

Committee should access information concerning the funds provided by Government

through a grant to the University, I respectfully advise that neither I nor any

other University official will be able to appear before the Committee."

The Public Accounts Committee does not consider that Memorial

University has any rights or privileges pertaining to the accountability of

public monies that are not enjoyed by other Crown corporations, agencies and

government funded bodies. Past practice has seen the University provide

financial information to the House of Assembly through the Minister of Education

and the Committee has been forced to follow the same course due to the refusal

of the University to provide the requested information directly to the Committee

when requested. The Committee does not consider this to be the correct procedure

to access such information and, in any event, does not consider that the

University is excused from answering directly to the Committee regardless of the

source of the information before the Committee. The Committee is therefore

unable to carry out the mandate given to it by the House of Assembly and hereby

respectfully requests the House to give further direction with respect to the

provision of information when requested and the appearance before the Committee

of Officials of Memorial University.

Mr. Speaker, if I may beg the indulgence of the House to

expand for just a moment and to provide some background material relating to it

- I think that is in order?

MR. SPEAKER: At this point in time we are just supposed

to present the report and there is not any period for extended comment, unless

by agreement. I think the hon. member asked the indulgence of the House. Does

the hon. member have the leave of the House to expand on this? Does the hon.

member have leave of the House?

SOME HON. MEMBERS: By leave.

MR. SPEAKER: By leave, the hon. member.

MR. WINDSOR: Mr. Speaker, I won't take advantage of the

opportunity. I thank hon. members, but I think, in fairness to hon. members, it

is important that we provide some background information and some support for

the position that the Committee has taken in this particular matter. Mr.

Speaker, I refer to the Memorial University Act, subsection 33, which states,

and I quote: 'The management, administration and control of the property,

revenue, business and affairs of the University are vested in the Board.'

Section 75 states, and I quote: 'The Senate shall have

general charge of all matters of an academic character,' unquote.

Now, Mr. Speaker, that very clearly separates two divisions

of responsibility of the university, one for the financial and administrative

management of the university affairs to the Board of Regents and the academic

matters, Mr. Speaker, clearly to the Senate. There was a clear division of

powers and responsibilities between those two aspects of university life.

Section 38, Mr. Speaker, states: the accounts of the Board

shall be audited at least once a year by the Auditor General or by some person

appointed by the Lieutenant-Governor in council. The House will recall that

yesterday a report was tabled from the Auditor General stating that the

university has refused to provide documentation required by the Auditor General

and that report was tabled here, in the House yesterday. Clearly, the act states

that the Auditor General has access to that information. The Auditor General

will therefore report to the House of Assembly. The Auditor General's report is

normally referred to the Public Accounts Committee and the Public Accounts

Committee would naturally expect to have full authority to investigate into all

matters referred by the Auditor General's report.

Now Mr. Speaker, in the past - this discussion has been going

on for many years; now, let me state before anyone else questions me on it that,

indeed, previous governments have not, in my view, fully dealt with the matter

the way in which I believe it should be dealt with. In fact, the university has

always stated, because of academic freedom, they felt they did not have to

answer to the House of Assembly or the Public Accounts Committee. It is the view

of the Public Accounts Committee, Mr. Speaker, that academic freedom and

financial accountability for taxpayers' money are two totally separate issues.

SOME HON. MEMBERS: Hear, hear!

MR. WINDSOR: By way of an example of that, Mr. Speaker, I

refer to hearings of the Public Accounts Committee of the Legislature of

Ontario, wherein, on February 5, 1991, they held hearings relating to matters

referred to them, dealing with three separate Ontario universities. Firstly, the

University of Guelph, and let me quote from a

section of the testimony given by

Mrs. Solette Gelberg. She says: 'I am Vice-Chairman of the Board of Governors of

the University of Guelph,' and she relates to a number of other people who are

with her. She continues: 'I want to start out by telling you how pleased we are

to appear before the Standing Committee on Public Accounts today, to present our

views on the public inspection audit that was conducted at the University of

Guelph and to respond to members' questions.' Further on, Mr. Speaker, is a very

important quote, in my view: 'There can be no doubt that universities have a

duty to be accountable to the government and to the public, for the responsible

expenditure of funds, a significant percentage of which come from the public

purse. The Act that established the University of Guelph in 1964, assigns to the

Board of Governors, the government, conduct, management and control of the

university and of its property, revenues, expenditures, business and affairs,

granting to the Board all powers necessary or convenient, to perform its duties

and achieve the objects and purposes of the university. In a clear separation of

powers the legislature by the same Act entrusted our Senate with responsibility

for determining, controlling and regulating the educational policy of the

university, including the establishment of degree programs and academic

standards.' I would submit, Mr. Speaker, this is very similar to the situation I

referred to in the Memorial University Act.

The Vice-Chairman of the University of Guelph continues and

says: 'This does not, of course, remove their obligation to be responsible to

the larger society, nor would any university desire that freedom.'

So, Mr. Speaker, it is clear that the University of Guelph,

the Board of Regents of the University, and the President of the University,

have no problem whatsoever appearing before them.

There are a number of other quotes I could give. I will move

on quickly to the University of Trent. Mr. Stephenson, the Vice-Chair of Trent

University's Board of Governors, states: 'The Trent Act assigns to the Board of

Governors responsibility for the government, management and control of the

university, its property, revenues, expenditures, business and affairs' - very

similar, again, to both of the previous ones.

Later on, the Vice-Chairman of the board, I believe it is,

says, and I quote: 'At Trent we accept the principle that openness leads to more

effective management and to better public understanding of the role we play in

society. It was in this spirit that the university acceded to the request that a

provincial auditor conduct an inspection audit of appropriate areas of our

books.'

So, Mr. Speaker, these are the sorts of things that have

taken place there. He carries on to say: 'I would like to extend to the Public

Accounts Committee the university's full co-operation in pursuing any areas of

interest either today or in the future. Our books are open and you are most

welcome to visit Trent and to observe the educational and research programs in

which we take pride.' Clearly, Mr. Speaker, those universities do not have any

problem.

One final quote, if I may, from Dr. McGavin, the Chairman of

the Board of Governors of the University of Toronto. He says, Mr. Speaker: 'Last

fall, I prepared some remarks for council members on their roles as trustees. He

quoted himself. He quotes: 'The university is a self-governing community, but it

is also a public institution with much of its income coming from the taxpayers

and from the university's benefactors. You, the Governors, are accountable to

the public to assure that the university maintains and enhances its position as

an institution of academic excellence, and to assure that the public funds are

being spent responsibly and effectively. To digress for a moment, for the

public, I mean also the legislature and through its elected officials.'

Mr. Speaker, in view of these precedents that we have set -

and there are others that I can and will in due course quote - the Committee has

taken the view that the University should, indeed, answer to the Public Accounts

Committee; should be accountable for an expenditure of some $130 million this

year of taxpayers' dollars; and in view of that, the Committee respectfully

requests the House of Assembly to give direction to the Committee and to the

University as to how we should proceed from here. Thank you, Mr. Speaker.

PREMIER WELLS: Mr. Speaker, if I might address those -

MR. SPEAKER: Order, please!

Just to remind hon. members again, this is not according to

procedure, so we allowed the Member for Mount Pearl to have leave.

SOME HON. MEMBERS: By leave.

MR. SPEAKER: The hon. the Premier, by leave.

The hon. the Premier.

PREMIER WELLS: Much of what was said by the hon. member,

I endorse fully. However, like most things there's a little merit on both sides

of many issues. To be fair to the University and the University authorities, the

position ought to be fully explained. I should say, Mr. Speaker, that we have

received notification through a copy of the report of the Auditor General that

was tabled here in the House. We have also received a representation from the

University advising us of the Auditor General's request and their response. As a

matter of fact, I met with the President of the University, the Comptroller of

the University, and I believe - was the Minister of Justice there?

MR. ROBERTS: The Minister of Education.

PREMIER WELLS: The Minister of Education, and I believe

the Minister of Justice was there, as well. The three of us at least met with

them to discuss the matter. They advised us of the circumstances. We told the

University in very clear terms that they had to be accountable for $120 million

or $130 million of public funds in much the same manner as any other body that

receives public funds has to be accountable for the expenditure of those funds.

In fairness to the University, they readily agreed. It was

quite appropriate that they should be accountable. However, they disagree with

the approach that the Auditor General is taking, and let me tell you the basis

for their disagreement with the approach. I should say that the government

hasn't formed a conclusive position on it yet. It is still in the process of

being examined and we hope we will have a position to bring before the House

shortly, Mr. Speaker.

The University is created under The University Act. The

auditing of the University is provided for in The University Act, itself, and

the appointment of the auditor is subject - not subject to - it is made by the

Lieutenant-Governor in Council.

The former government -

MR. WINDSOR: If I may refer to the Act -

PREMIER WELLS: Yes.

MR. WINDSOR: - 'the Auditor General or such person -'

PREMIER WELLS: The audit shall be performed by the

Auditor General or such person as the Lieutenant-Governor in Council shall

appoint.

Now, Mr. Speaker, the former government - and here I am not

at all being critical; I expect we probably would have done the same thing - the

former government appointed the reputable auditing firm of Peat Marwick Mitchell

to be the auditors for the university, and they have, in all the intervening

years, done the audit. When we constituted the government we saw no reason to

change it. They were a very competent, reliable firm, and they have continued to

do the university audit. And through that auditor, the university accounts, or

the university's expenditure of funds, is audited to see whether or not it

complies with the statutory or other requirements. To the best of my knowledge,

the audits have always been in order - so far as I know - I have no basis for

suggesting that they have not been.

Now, when we put in place the new Auditor General's Act, I

believe we continued - the new provisions are pretty much the same as the

provisions that were there under the old act, and that is that if the Auditor

General has reason to believe that the audit does not fully and properly report,

the Auditor General is at liberty himself or herself to go and cause an audit to

be conducted - if there is reason to believe that what has been produced is not

adequate, even though the auditors are appointed by the Lieutenant-Governor in

Council.

I think that is entirely in order. I don't see anything wrong

with that. If the Auditor General thinks that external auditors are not doing it

properly, then the Auditor General should have the right to proceed.

What I am told has happened here - and whether or not this is

the case, I don't know; I haven't spoken yet to the Auditor General so I can't

be certain of it, but the hon. members raised it so I thought I should give you

the information I have up to this point. What I am told is that instead of

following the Statute, the Auditor General, perhaps in error, just simply

decided they were going to move in and do an audit, with no indication of

whether the audit that was done was satisfactory or not satisfactory - no

indication that there was any basis for believing that it was unsatisfactory -

just simply said, we are coming over to do an audit.

The University authorities asked: What is the basis for it?

You have no basis for doing this. And they did not quote subsection 1 of

Section

14, I think they quoted only subsection 2 which says, We have the right to do

the audit.

Now, Mr. Speaker, if the Auditor General has reason to

believe that the audit that has been done is unacceptable, the Auditor General's

Department should move in and do an audit on the University, and they have the

statutory right to do so, and will find the full support of the government

behind them; but if the Auditor General believes that what has been done by Peat

Marwick is acceptable, and the Auditor General just wants to expand the Auditor

General's function and take over the university audit, that is quite another

function. We have to decide, as a matter of policy, whether we will remove the

auditors appointed by the former government and let the Auditor General do it or

not.

So, Mr. Speaker, whether or not there is any real basis for

the Auditor General's comments, or the views of the Public Accounts Committee at

this stage, I cannot really say for sure. I can only assure the House -

MR. WINDSOR: Regardless of whether the Auditor General

does the audit, or an external auditor does it, would the Premier like to

address the question of whether or not the University should answer to the House

through the Public Accounts Committee?

PREMIER WELLS: That is another question, and you have to

give that some thought.

No government should ever impinge on the university's basic

freedom; to be critical of a government and to be in a position where the

academic staff and the university generally can be critical of government

policies and approaches, so that if they are subject to this kind of scrutiny by

government, they may well feel a pressure not to be. So, we should not impinge

upon the freedom of a university, the academic freedom which, as the hon. member

pointed out quite correctly, is the responsibility of the Senate. That is true,

but the administration authorities also are part of the university, and if they

feel the heavy hand of government on them, or the government process on them,

their sense of academic freedom may well seem somewhat limited.

So I do not have a definitive judgement on that at the

moment. My initial reaction is: No, we should not be able to summon the

President and officials of the University before the Public Accounts Committee.

I know that the former government took that position, as

well. The issue arose five or six years ago.

AN HON. MEMBER: (Inaudible).

PREMIER WELLS: I am just saying, the former government

here took that position five or six years ago when the present Minister of

Finance, who was Chairman of the Public Accounts Committee at the time, asked

for the university authorities to attend and be summoned before the Public

Accounts Committee to answer their questions. The government of the day decided

that would not be proper, it would place too serious an infringement on

university authorities. That doesn't mean they don't have to account for the

$130 million. They most certainly do. And it is the Minister of Education who

has the responsibility to make sure that he answers in the House for the

propriety, the thoroughness and fullness of their accounting. That was the

position the former government took.

I have spoken since to the present Minister of Justice and he

told me that at the time, after the discussion, he came to the conclusion that

the position of the government of the day on it was right, and they agreed.

Thereafter the Minister of Education answered fully and, to the credit of the

then Minister of Education, he was determined to make sure that the university

would fully answer as well. He tells me he was satisfied that he caused this to

happen.

So, Mr. Speaker, whether there is any need to get too tied up

immediately in this issue, we want to take a look at it and make sure we have a

chance to speak to the Auditor General first and see fully if there is any

basis. If she feels she has a basis for going in and doing an audit, she hasn't

yet disclosed it. If she does, then clearly she has the right to do so.

MR. SPEAKER: The Chair wants to remind hon. members that

what we were doing in the last little while was by the consent of the House and

not according to the rules. I just want to remind hon. members what Beauchesne

says about presenting reports. I know that we all know it, or at least I think

we do.

Again it is Clause 878, page 242, subsection (2): "When

presenting a committee report, the Chairman of the committee, or other member

acting on behalf of the Chairman, may make a brief statement about the report."

The hon. member was operating with the consensus of the

House, as was the Premier.

Just to raise another matter: Committees are masters of their

own procedure and disputes in committee should be resolved in committee. I

realize that the committee might be frustrated, but at the moment there are no

rules to cover it in the House.

Are there further reports by standing and special committees?

I have called it. I have missed again. It is too late anyway,

so I will acknowledge the hon. the minister. I wanted to welcome a student group

but it looks like they have gone anyway.

The hon. the Minister of Environment and Lands.

MS. COWAN: Thank you, Mr. Speaker.

I rise today, as the Minister responsible for the Status of

Women, and I am pleased to present to the House the Annual Report, 1991 - 1992,

of the Provincial Advisory Council on the Status of Women.

Further reports by standing and special committees?

Well I will, as I did the other day, welcome in absentia the

group of students who were here, fourteen Level II students from Swift Current

Integrated High School in the district of Bellevue. They were accompanied by

their teacher/guidance counsellor, Mr. Cyril Rogers.

SOME HON. MEMBERS: Hear, hear!

Petitions

MR. SPEAKER: The hon. the Member for Port de Grave.

MR. EFFORD: Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. EFFORD: Mr. Speaker, I have a petition here presented

to me on behalf of 226 teachers from the district of Port de Grave and partially

from the district of Harbour Grace. I would like to ask His Honour, the Speaker,

for leave to present this petition because it is not made out to the hon. House

of Assembly. The prayer of the petition starts off by saying: We, the staff of

Bishop O'Neill Collegiate, do petition the government of Newfoundland and

Labrador. So, I would ask leave, Mr. Speaker, to present it.

MR. SPEAKER: It is the House that will have to grant the

leave. I have seen the petition and, as the hon. member says, it is not designed

according to the way we require petitions to he designed. We are going to send

the sample copy of what our petitions should say around to hon. members again.

Just as a matter of concern to hon. members, hon. members

know that petitions are addressed to the House of Assembly, not to a particular

minister, not to a particular member, and not to the government. Petitions are

addressed to the House of Assembly, and there is a reason for that, because a

petition is supposed to have a prayer and all of these things are related, it is

not supposed to be debatable and because of all of that the petition is

presented to all members and we all have an equal obligation in listening to,

and giving concern to and expressing concern on behalf of the petitioners. I do

not know if the hon. member has the leave of the House - having said that, I ask

the Clerk not to take the time out. I was expounding on the petition.

MR. R. AYLWARD: On a point of order, Mr. Speaker.

MR. SPEAKER: The hon. the Member for Kilbride, on a point

of order.

MR. R. AYLWARD: Mr. Speaker, you have asked for leave of

this House for the hon. member to present a petition that is not quite according

to the rules of our House. Mr. Speaker, I am sure that members on this side of

the House, I cannot speak for the NDP member, but members on this side of the

House would be very delighted to give leave to the hon. member to present that

petition, as long as we have the same right and I can present the petition that

I was refused leave for three days ago, which came in on a similar heading I

would imagine that the member's has. The Member for Ferryland has two similar,

the Member for Mount Pearl has some and so has the Member for Torngat Mountains.

Mr. Speaker, we would gladly give permission as long as the Government House

Leader will withdraw his refusal in not giving me permission to present a

similar type of petition last week.

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

MR. ROBERTS: Mr. Speaker, it is quite right as my hon.

friend, the Minister of Finance says, one cannot give leave conditionally. But

let me state clearly my position as a member of the House, and that is the way I

speak on these things, only as a member, I do not speak for my friends opposite

or my friends here, but I agree with my hon. friend for Kilbride, what is sauce

for the goose is sauce for the gander, tit for tat. But, Mr. Speaker, the reason

I withheld leave the other day, was that I had not seen the document. A number

of colleagues on both sides have come to me since then and shown me documents

and I said I see no problem.

My concern as a member of the House is simply with letters. A

letter is not a petition, Mr. Speaker. If the document is not headed in the

proper form that does not trouble me, I have seen all sorts of them and I for

one have raised no objection and would raise no objection. If the hon. member

had not gotten himself in a snit the other day and got his knickers in a knot

and let me seen it, I would have agreed to it, assuming it was in the form that

we generally accepted in the House. I am quite prepared to carry on on that

basis indefinitely. I have no desire to frustrate petitions and every desire to

have them brought in, but my concern as always, is with letters, with a letter

becoming a petition, that is all. If he will do me the courtesy to see me now, I

will tell him what I will say to them.

MR. SPEAKER: To the point of order, the hon. the

Government House Leader certainly has a point. Letters should not be permitted

in the House as petitions. The difficulty is in getting petitions that do not

meet the required form. I think all hon. members will understand that something

in the form of a letter is not acceptable. I take it that the hon. the

Government House Leader said that he is not particularly concerned about the

form other than that, as far as he is concerned he did not want to see it in the

form of a letter. I do not know if that meets the Member for Kilbride's

condition of allowing the petition to be presented.

The hon. the Member for Kilbride.

MR. R. AYLWARD: Mr. Speaker, we gladly allow the hon.

member to present this petition because we believe it is his right to present a

petition regardless of what form it is in and whether or not it is a letter. If

someone from his constituency asks him to present a petition to this House, he

should be allowed to do it. Mr. Speaker, we will agree with him presenting his

petition and we will also be raising on similar petitions in this House, and I

hope that the members opposite will allow leave the same as we will allow leave.

MR. SPEAKER: Again, the Chair has no right to participate

in debate. I can only say to the hon. member: there are rules with respect to

petitions that the Chair did not design and the Chair must work under, sometimes

in great frustration in having them presented. I can only say to hon. members

that the Chair has to enforce the rules and it is up to the House to change

them.

The hon. the Member for Kilbride.

MR. R. AYLWARD: Mr. Speaker, to that point of order once

more. I hope you did not suggest that I was questioning the Chair at the time, I

certainly was not. I know the rules under which the Chair operates and I agree

with them but we will, by leave, allow the hon. member to present his petitions

if we get leave when our turn comes.

MR. SPEAKER: The hon. the Member for Port de Grave.

MR. EFFORD: Thank you, Mr. Speaker.

Mr. Speaker, these 226 individuals, partially from the

district of Port de Grave and partially from the district of Harbour Grace,

asked me to present this petition to the Honourable House of Assembly. That is

the reason why I took it to the Clerk of the House and the appropriate minister

before coming to the House, to try to clarify if it could be legally presented.

Because it's important that these people have their voices and their problems

heard within the House of Assembly. The only format that these 226 individuals

would have to present their opinions and their concerns to the House of Assembly

is through their MHA. I take great pleasure, Mr. Speaker, in presenting this

petition and speaking on behalf of these individuals who have legitimate

concerns for a number of reasons.

One of the reasons is the fearmongering that's been going on

through the union officials and the news media, being played over the air over

the last number of weeks. What possibly is going to happen? These 226

individuals, like all teachers across the Province, have a legitimate reason to

be concerned about what's going to happen in the near future in the Budget

that's about to come down in a few days' time.

I have no doubt in my mind that these individuals at the end

of the day will look back over the last two or three weeks, and wonder why the

information came out as it did, when the end result comes down. The one clear

message that I got from these individuals from speaking to them personally is

that they are willing - and they understand - they are willing to help out and

they understand the seriousness of the situation that the Province finds itself

in. But they are not willing to pay the total shot.

That's what I want to do. Get their message through to this

government, through to the House of Assembly, through the petition that they

have presented. The prayer of the petition clearly reads:

We, the staff of Bishop O'Neill Collegiate, do petition the

Government of Newfoundland and Labrador to return to free and open collective

bargaining when the present NTA collective agreement expires. To adopt whatever

measures are necessary rather than impose further financial hardships on the

teachers of this Province who have already been subjected to a wage freeze and

further reductions in salaries as a result of increase in UI premiums, pension

premiums, and increase in personal income tax. To pursue all other opportunities

that are available rather than to impose financial restrictions on the education

system, a seriously underfunded system.

The prayer of the petition reads exactly the concerns of the

total of the 226 people. Although each page there -

AN HON. MEMBER: (Inaudible)!

MR. EFFORD: I would not present the petition unless I

fully supported it.

MS. VERGE: Did you sign it?

MR. EFFORD: I wouldn't be a hypocrite, Mr. Speaker, and

come into this House of Assembly and present the petition just to grandstand in

the House of Assembly. When these members from my district gave me this petition

I brought it to the House of Assembly to speak their concerns so the government

of the day, in making their decisions, can understand the concerns of these

individuals.

The problem I have with what's gone out is the union

fearmongering. We just went through several months of fearmongering in the

referendum issue that came up over the last several months in the Province, and

in the country of Canada. We know what that accomplished. Now the unions are out

there in a fearmongering attitude in the same way.

Nevertheless, let's get back to what's at hand. We have 8,000

professional educators in our Province who are very concerned about the attitude

towards teachers. That's what I want to deal with here for a couple of minutes.

Everybody is under the impression that teachers are overpaid. Everybody is under

the impression that teachers are making too much money. Everybody is under the

impression that teachers work very few hours and get paid a lot of money. That

is absolutely wrong.

I know in my own personal family I have several relatives who

are teachers - high school teachers, elementary teachers, whatever. Their day is

just as long as my day and goodness knows that's long enough. Their weekends are

totally taken up with things outside of the classroom. They have a strong

commitment to their profession, a very strong commitment. But the issue at hand

here is: are there going to be any further cuts in salaries? Are they going to

lose again?

What you have to understand is they've already lost a great

deal in the last several years. While wage freezes are on and while government

has the responsibility to financially administer its debt - that was caused by

the former administration, that we have to pay out some $585 million a year

interest - the responsibility is on everybody in the Province to -

MR. SPEAKER: Order, please!

The hon. member's time is up.

SOME HON. MEMBERS: By leave, Mr. Speaker.

MR. EFFORD: By leave, Mr. Speaker?

SOME HON. MEMBERS: (Inaudible).

MR. EFFORD: One minute, Mr. Speaker.

MR. SPEAKER: Does the hon. member have leave of the

House?

SOME HON. MEMBERS: Yes!

MR. EFFORD: What we have to do, Mr. Speaker, is to make

sure that we are aware of the value of these people to our future. It is not

only the cost to the government today, it is the cost and the advantages that

are going to be applied to the future of this Province. We cannot lessen our

education system, we have to continue to improve it and we have to strongly

support the people that are involved in the education system at all levels. We

have to be very cognizant of the fact that these people are suffering under the

regular financial restraints that the Province faces on a day to day basis, like

the country is facing on a whole. Nevertheless Mr. Speaker, we have to do this

with an open mind and not make any one group of people pay the piper; everybody

in the Province of Newfoundland and Labrador has to share the responsibility,

and that these individuals will be treated no less than any other group of

people in the Province, thank you.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Ferryland.

MR. SULLIVAN: Thank you, Mr. Speaker. The fearmongering

did not start with the unions. All the unions in this Province were informed

that they had to reach certain cutbacks. Teachers: $15 million was a number

thrown out, we will cooperate, we will suggest to you ways to cut, told by this

government. Basically, this government has raised the anxiety of people in this

Province and all the public sector unions. They have done the fearmongering so

at least when they come back and they institute freezes and so on, the public

sector unions can say thank you for nothing because basically they have set the

agenda, they have initiated the meetings, they have indicated to these unions

what they expect to cut.

Now they come back and try to pawn it off and say that the

public sector unions in this Province are out fearmongering with their members

and trying to raise undue concerns and anxiety, and that is incorrect. Basically

overall, the concerns and cutbacks purposed in education - I asked a question in

this House yesterday regarding cutbacks and funding to school boards to fund

education and I read an excerpt from the letter which said there were cutbacks

in curriculum because this government, after eight months of a fiscal year, have

not given a final budget to the school boards of this Province. Normally, and it

has been unprecedented in fact this year, normally all boards would receive

their budget prior to their year. This year a tentative budget was given in

July. Boards in this Province were told that there would be an extra $11.5

million because boards only had an opportunity to collect 50 per cent of the

school tax. These boards were told to budget, not on $11.5 million - when

presenting a tentative budget - but on $7 million. This Province is still

holding back $4.5 million that they may never get.

It is this government that is talking about giving more money

and the acting minister, the Minister of Finance said he would get back to me

yesterday in a few minutes on these figures, when I asked a question, I have not

heard yet because the truth of the matter is that this government is

deliberately holding back money from the school boards of this Province to help

balance and improve the deficit situation here in this Province.

SOME HON. MEMBERS: Hear, hear!

MR. SULLIVAN: I have had calls from school boards

indicating that they have not up to now, eight months of a fiscal year, received

a budget for their expenses for this fiscal year, 1992-93. Unprecedented, it has

never happened before to my knowledge, and I inquired.

Talking about cutbacks in teachers and services, a cutback to

teachers in this Province is a cutback in our future.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: I would like to have the opportunity to

express my point. We were very considerate to give leave for the petition and

leave for extra time, I would just like to have the opportunity now to continue.

I am saying that cutbacks in teachers and education in this Province is a

cutback on an investment in our future. This government has indicated its

commitments in their Change and Challenge, in improving education in this

Province, and all we have seen is continuous cutbacks. They threw out the

figures of cutbacks in all different aspects in education. The substitute

teacher cutbacks where students may be left out of school because of it, once

heard cutbacks purposed, I have asked the Minister of Education on several

occasions here in the House and I have not gotten any answers: we cannot release

what is in a mini-budget. I have asked questions pertaining to the Ministerial

Statement by the Minister of Finance and have not gotten any answers up to this

point. We cannot get any answers from the government. We have to get them out

from the community, from the boards and other people, and from teachers.

I certainly agree with the concerns of the Member for Port de

Grave for his constituents in Port de Grave and in Harbour Grace. I think

teachers have a right to be fearful, and to have a high anxiety level, because

this government has inflicted that level of anxiety on the people of this

Province, and I think it is about time that the people of this Province did

fight back.

They disagree with Bills 16 and 17. The Member for Port de

Grave has indicated that he disagrees with Bills 16 and 17, and still we are

going to continue with Bill 17 and continue to freeze and possibly, this

government again, even to suggest a new bill or to suggest more rollbacks again,

to unduly raise the fears and concerns of people here. I think it is terrible.

MR. SPEAKER: Order, please!

The hon. member's time is up.

SOME HON. MEMBERS: By leave.

MR. SPEAKER: Does the hon. Member have leave of the

House?

SOME HON. MEMBERS: Yes.

MR. SPEAKER: The hon. the Member for Ferryland.

MR. SULLIVAN: Thank you, Mr. Speaker. I will clue up very

shortly.

I think it is very unfair on the part of this government, and

very callous, to call public sector unions in this Province and make

suggestions, and then come back and deny it. The public unions have stated

emphatically that they have been asked to cut so much money, and this government

has come back and denied it.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

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

MR. DECKER: Mr. Speaker, I would like to say a few words

to this petition.

First, I would like to commend the hon. Member for Port de

Grave who has brought these concerns to this House of Assembly. I think it is

good he should do that. The problem is, as hon. members know, and as the people

of this Province know, the Province is having some very severe fiscal problems.

Mr. Speaker, I have here a clipping which I think is from the

Globe and Mail, where the Treasurer in Ontario, Laughren - and I just use this

by way of illustration - talks about the deficit that Ontario has: There is

nothing magical or mysterious about it. We have a gap out there between

expenditures and revenues that is giving us a ten billion dollar deficit.

Then he goes on to say: Should there be wage controls? Should

there be wage rollbacks? Those things have been suggested, believe me, and many

of those suggestions are more palatable than massive layoffs in the various

sectors, he said.

Mr. Speaker, right across the country this is happening. Now

when this administration became aware that we were heading for an even more

severe fiscal problem than we had anticipated when we brought down our Budget,

we went out and consulted with the various stakeholders and unions in the

system. Maybe that is where our problem is.

We had the option. We could have done what the CBC did a few

years ago. They got behind closed doors; they made their decisions, and then

they dropped the axe. But we do not believe in doing things that way. We want to

consult with the various unions - the Newfoundland Teachers Association, the

nurses, NAPE, CUPE, and all the unions - and whenever you consult with people,

there is a danger. There is a danger of your intentions being misinterpreted,

and as a result of the meetings that took place, there have been a lot of

rumours flying around.

AN HON. MEMBER: Fearmongering.

MR. DECKER: There has been a lot of fearmongering going

around. A lot of the employees, including teachers, are very concerned about the

hearsay and the rumours and the nonsense.

Mr. Speaker, in fairness, the hon. members opposite will have

to admit that they are not helping matters, because they have jumped on the

bandwagon and tried to make a few political points on this, and they are part of

the rumours which are being circulated, because they have a totally different

agenda.

What I want to say to the teachers who wrote to the hon.

Member for Port de Grave - I want the teachers to know, through the Member for

Port de Grave, that this administration is treating this problem as it is - a

very serious problem; but we are treating it with humanity. We are treating it

in a caring way. We want to avoid anything which will unnecessarily have any

impact on the standard of living that our people could have.

We would much rather be saying to the teachers, and the

secretaries, and the janitors, and all the employees of government: We are going

to give you an increase in pay next year. We would love to do that. We are

politicians; but we, as government, have an obligation to the greater good, to

all the people of this Province, and we have to make sure that the fiscal

integrity of our Province remains. If it did not remain - if that were somehow

threatened; if that were impacted upon - the greater damage that would do to the

whole Province could never be corrected, Mr. Speaker.

So, to the people for whom the hon. member has presented this

petition I want them to know that their voice is being heard in this chamber

today, and that we are dealing with this fiscal crisis that we have in a caring

human way and we will certainly support the best interests of all

Newfoundlanders and Labradorians. We will not discriminate against anyone who is

a teacher, anyone who is a secretary, anyone who is a doctor, or anyone who is a

nurse. All of us as Newfoundlanders, politicians, employees of the government,

employees of the private sector, we are all in this together, and working

together through competent members, such as the Member for Port de Grave, we

will work through this. At the end of the day, as the hon. member pointed out,

everybody will say: thank God, we had there a responsible administration which

did what it had to do, and did it with caring and humanity.

Thank you, Mr. Speaker.

MR. SPEAKER: The hon. Member for Fortune - Hermitage.

MR. LANGDON: Mr. Speaker, I have a petition here on

behalf of 209 people. It is not the proper way, I guess, of presenting it to the

House but I did check it with the Government House Leader. It says: we would

appreciate it if you would present our petition to the House of Assembly at your

earliest convenience. I guess I might have to get leave.

MR. SPEAKER: Can the hon. member show the petition to the

Opposition House Leader?

The hon. the Opposition House Leader on a point of order, I

guess.

MR. MATTHEWS: If we are going to concur to do this then

it has to be the same for both sides. The Government House Leader a few days ago

objected because he had not seen a copy of what the hon. Member for Kilbride was

proposing to present to the Legislature. If members are going to jump up in

their places and just present them I think it is either going to be that way for

everybody or the Chair, or the Table, is going to have to look at it all. We

have to come to some determination here because my worst fear is that tomorrow

or next week one of our members will rise in their place to present a petition,

along the same basis as we are now giving leave for, and we will not be granted

leave. I do not want that to go unnoticed and I do not want it to happen because

if that is the case there will not be any cooperation from this side. I want to

clarify that, either we give everybody leave to present petitions they have in

their possession or we channel the petition to someone at the Table or the Chair

to have a look and see they are sort of standardized, one or the other.

MR. SPEAKER: The hon. Government House Leader.

MR. ROBERTS: Mr. Speaker, to the point of order. I think

the hon. gentleman from Grand Bank makes a very good point and maybe I could

build on it by making a suggestion. Let us let this petition stand for today I

say to my friend for Fortune - Hermitage. Maybe the two House Leader, my hon.

friend and myself, and the gentleman from St. John's East who is House Leader,

Leader and follower, the Trinity as it were, Father, Son and Holy Ghost, all

combined into one, could perhaps call upon the Speaker and see if we can get

some order into this. As the Speaker told us earlier there is a form and there

is a rule in the House and if we want to change that either formally or

informally let us do it, but I agree with my hon. friend from Grand Bank it

ought to be tit for tat, the rules ought to be the same.

It almost calls the rules into question, Mr. Speaker, when we

have a set of rules and keep waiving them all the time. If we have to waive them

all the time my suggestion is there is something wrong with the rules and we

should perhaps look at it and see what should be done. Maybe my friend for

Fortune - Hermitage could wait until tomorrow to present the petition. Hon.

gentlemen opposite should certainly look at it if they wish. That would be only

courtesy. I am sure my friend did not mean any discourtesy. Perhaps the Speaker

might ask some of us to attend upon him, Sir, and see if we can find a way out

of this problem because it just keeps coming up. I suspect there are going to be

a lot more petitions because there are a lot of things out there that people

want to petition us about.

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

MR. MATTHEWS: Further to that point of order, Mr.

Speaker. I have no objection to the Member for Fortune - Hermitage presenting

the petition. That is not my point. All I am saying is that if we are going to

allow it to happen then let us allow it to happen all the time. If a member has

something brought to his or her attention that they have been asked by

constituents to bring to the floor of the Legislature by way of petition let

them do it. Let us forget what kind of format it is. If it is signed by two,

five or 5000 people and the matter is brought to a member of this Legislature,

constituents request they bring it to the floor by way of petition, let us let

them do it, I have no problem with that and I would give leave today for the

Member for Fortune - Hermitage to give his petition, to present it, very

honestly, but all I am saying is, let us be fair about it. If we are giving

leave on two occasions today to members opposite, then we should not be

restricted tomorrow or next week or whenever from doing the same kind of thing.

So if we want, I would suggest to the Government House Leader, I would have no

problem with just letting it flow; whoever has the petition, stand and present

it and whoever wants to support it, do so, or speak to it, do so; otherwise, if

the member stands alone, sobeit. So I have no problem with letting the member

go, and any other member who wants to present a matter in this House, let him do

it.

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

MR. ROBERTS: I, as one member, do have a problem with the

rules being ignored. The rules are there, they are clear. If they are not

adequate or if they need to be changed for some reason, let us change them, but

I certainly do have a problem, Mr. Speaker, with ignoring rules - that way lies

chaos. I would ask my hon. friend to do whatever he thinks best, that is up to

the gentleman from Fortune - Hermitage. He has as much right to speak as anyone

here and he can speak as effectively as anyone here. But I suggest the way is

perhaps for my hon. friend from Grand Bank and myself and the Holy Trinity from

down in the corner, to attend upon Your Honour at some point and to see if we

can resolve it and bring it back to the House and do it in proper form.

MR. SPEAKER: It appears that there is no leave - there is

leave? The Chair needs a direction, which is it, leave or no leave?

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

MR. ROBERTS: Mr. Speaker, it is 3:33 p.m. Let us,

perhaps, if my hon. friend will permit us, go on to Orders of the Day and then

he could show it to my hon. friend and we will pass on. We have been an

hour-and-a-half, Mr. Speaker, on routine orders.

MR. SPEAKER: The hon. the Member for Torngat Mountains.

MR. WARREN: Mr. Speaker, I just have a short point of

order. Since we are talking about these particular petitions, and where the fax

machine now has taken over from the mail, I would ask for Your indulgence, Mr.

Speaker, and probably the Government House Leader's, too, in the matter that I

do have petitions, but they have been faxed in to me; furthermore, Mr. Speaker,

not knowing how long the House will remain open and knowing the mail will take

considerable time coming from small places such as Williams Harbour or

Cartwright or Nain and so on, may we be allowed to present the fax?

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

MR. ROBERTS: It is a very good point, and I would suggest

to Your Honour that maybe you would want to take that under advisement and have

a look at it. I don't pretend to know the answer. I can tell my hon. friend from

Torngat Mountains that in my recollection of the long distant past when I was

downtown moiling and toiling at the Bar, the same issue came up. As far as I

know, it has not been resolved, whether or not the Supreme Court will accept a

fax.

MR. R. AYLWARD: (Inaudible).

MR. ROBERTS: Not the bar which my hon. friend from

Kilbride appears on, I say to my friend, nor the one run so very capably by my

friend from St. Mary's - The Capes.

SOME HON. MEMBERS: Hear, hear!

MR. ROBERTS: But perhaps Your Honour might want to take

that under advisement. It is a very good question.

MR. SPEAKER: I will do.

Orders of the Day

MR. ROBERTS: Mr. Speaker, I hardly know what to say.

Let me ask the House to consider Order 23, Bill No. 52, which

is the adjourned debate on the Capital Tax bill. And you may recollect, Your

Honour, that I made a declaration yesterday; that is still in effect, so I will

be outside in the penalty box listening until the debate finishes.

MR. SPEAKER: Please, who adjourned the debate - was it

the hon. the Member for St. John's East?

The hon. the Member for St. John's East.

MR. HARRIS: Mr. Speaker, I am not certain how much time I

have left - perhaps the Chair can advise.

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

nine minutes left.

MR. HARRIS: Thank you, Mr. Speaker.

AN HON. MEMBER: The Leader of the Opposition (inaudible).

MR. HARRIS: I am glad to hear that, Mr. Speaker.

The legislation that the minister introduced yesterday as an

interesting little amendment has proved, in fact, to be very interesting indeed,

and I know that the minister is trying to save a bit of face on this by first of

all, categorizing it as something about ventured capital and encouraging

investment, and secondly, trying to suggest that there are all sorts of small

companies out there with $10 million to invest, that are just waiting to find

ways of putting it out in mortgages in this Province, and are waiting for this

tax measure to happen.

But, Mr. Speaker, that is not really what has happened here.

I believe all that has happened here is that a company known as Fortis Trust,

with connections to Newfoundland Light and Power - both of them are wholly-owned

subsidiaries of this company called Fortis Inc., which the Premier and the

Minister of Justice have been involved in, in their prepolitical lives. And the

Minister of Justice, quite rightly and properly, has absented himself from the

debate because of his most previous connection with Fortis Trust. This

associated company, Mr. Speaker, has a very close association with the Public

Utilities Board, with public policy in this Province, and obviously, with

certain important and influential Cabinet ministers.

So this is a single company which is coming - not saying: we

are planning an investment, not saying: we are planning to do business, but we

have a terrible problem with the tax regime which won't allow us to get into the

business, but actually a company which went into the trust and loan business

with their eyes wide open. They knew what the legislation was. It was there in

1985. They decided that for business reasons they could get into the trust and

loan business, they could make money for their shareholders doing that, and they

decided to do it.

Well, that is good enough. I don't have any objection. In

fact, I am happy to see a locally-owned trust company, perhaps with different

rules, with perhaps more favourable lending policies to give more people an

opportunity to get into mortgages and buy or build homes. That is a good thing.

The Minister of Finance is right in saying that does encourage other kinds of

investment by individuals who want to build homes or take out mortgages to

undertake activity.

But, Mr. Speaker, all these institutions that are covered by

the legislation are to pay a 3 per cent capital tax on their aggregate of

paid-up capital. And there is no reason why this particular company ought to be

given a $150,000 tax holiday from the public treasury when that is not available

to the individuals of whom 12 per cent of practically every dollar they spend

goes to the provincial treasury, with another 7 per cent - or actually, it is a

little more than 12 per cent, it is 12.84 per cent, in reality, because there is

also 7 per cent GST tacked onto it.

So the 12.84 per cent sales tax that all Newfoundlanders pay

when they buy goods and services is a considerable amount of money. They are not

getting any tax holiday from this government - even though the Member for Humber

West has urged them to do so in one of his recent press releases. But, Mr.

Speaker, Fortis Trust, a very wealthy company, not a small struggling company, a

very wealthy company, very well-financed, very well backed, is being given

special treatment.

Yesterday it took us some little while to figure out what was

going on, but I think we are now all sure what is going on. This is not a piece

of legislation designed to encourage four or five or six or seven or eight trust

companies to come forward and be developed. This is really a measure that looks

after only one company. Perhaps when the Minister of Finance gets up at the end

of the debate at second reading he can tell us why it is that other companies

are not under this same legislation.

There are several companies, some which even call themselves

trust companies - even though they aren't; and they aren't licensed trust

companies - but there are a number of companies that are in the investment and

loan business which are operating not as a trust company under the special trust

company rules but are involved in the same business, the lending of money by way

of loan and obtaining security by way of mortgage for that. For some reason they

are not brought into this Capital Tax Act. I would like the minister to explain

why that is.

If he doesn't understand - and it may be that when he was

talking about venture capital firms yesterday it was because he didn't

understand or hadn't been properly briefed. I suggested to him that it appeared

that there may have been an attempt to slide this through without us really

knowing what is going on. That may not be the case.

I will offer an opportunity to the minister to respond to

that. Perhaps he can get his officials to brief him on why is it that other

companies that are in the same business, the loan and investment business - some

of them are incorporated under the Newfoundland Corporations Act. They are in

the same business of lending money at interest rates, some of them, that would

astound hon. members that they are collecting; operating a savings - or not

savings, but operating investment and loan companies, and offering these - why

are they not subject? - offering these rates, doing the same kind of business,

really, as a trust company when it comes to investments. Not other trust

services, but when it comes to investments like mortgages, they are in the same

business. They are not affected, it appears, by this Capital Tax Act - only one

company is.

So, if we are trying to encourage this type of investment,

where are these other companies? Have they come to the government? Can the

minister tell us how many companies have come to the government and said: We

need to have a regime that is a little different? Or is it just as I have

stated, a favour being done by this government, for whatever reasons, to one

particular individual company, namely Fortis Trust? If that's the case, what is

the real reason behind it? What is the real reason behind giving special tax

treatment, a tax giveaway, to one individual company? - when all Newfoundlanders

are required to pay 12.84 per cent when they go into the store to buy the

necessities of life, to allow them to provide for their families, to buy cars,

to pay for transportation, to do all the things they have to do, and pay a

provincial sales tax on it at the rate of 12.84 per cent.

So I ask the hon. minister to deal with some of these

questions when he gets up in reply and tell us why it is. Who else is involved

in this process? Or is it as it appears, a request from one company alone, and a

favour being done by this government, to give back some taxpayers' money to that

one company? Thank you, Mr. Speaker.

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

DR. KITCHEN: Thank you, Mr. Speaker. I fail to understand

the double standard that the member opposite brings to this debate. He supported

Bill 47 and now he is against Bill 52. Bill 47 enabled the Minister of Finance

to put in place the Credit Union Deposit Guarantee Corporation which enabled

every Credit Union to have their depositors' deposits guaranteed by this

government for $60,000 for three accounts. What he would like to do is deny

another company virtually the same privilege. I don't understand the rationale

behind this.

Bill 47, which we just passed, does just that. It encourages

people to put their money into Credit Unions by having government guaranteeing

the deposits. It has worked out reasonably well since that was put in place and

we passed this bill, which was a bit of housekeeping there. It has worked

reasonably well in that it has helped Credit Unions expand their deposit base.

The basic reason for that is because in this Province we have problems getting

local institutions involved in collecting pools of money. The money is collected

by chartered banks and by trust companies and very often used to develop other

parts of the country.

What we have to do here is to develop our own Province. One

of the reasons for putting in the Credit Union thing was to enable Credit Unions

to build up a supply of deposits that they could use to lend to their members

and to develop, first of all, personal things, and secondly, to develop

eventually the commercial part of their lending, and to develop the Province.

Because a major problem that most companies have in this Province is to be able

to access capital and funds when they need it.

So this particular Bill 52 now is basically to amend the

Financial Corporations Capital Tax Act. What happens is that if a trust company

or a bank, an organization, wants to get covered under the CDIC - the Canadian

Deposit Insurance Corporation, and if they do get covered under the CDIC, under

which banks and trust companies are covered, they get exactly $60,000 per

deposit guaranteed by this corporation, for thirty-three deposits.

Now, the problem that - there is a condition. The condition

to becoming covered under the CDIC is that there must be a $5 million paid-up

capital. So, here we are in the Province - we have a few small loan companies,

and we have another organization that is interested in getting into the

business. When you start off first you don't need $5 million worth of capital to

work your business. You take deposits, you lend out your deposits, and you have

some capital; but you are forced to have $5 million capital in order to get CDIC

coverage.

Now, we have our tax. The Province has its Financial

Corporations Capital Tax Act, which is 3 per cent of the paid-up capital of the

corporations. Now, in the case of a bank, a bank doesn't have $5 million paid up

capital, it probably has $3 billion or $4 billion paid-up capital. Now, we don't

tax on the $3 billion or $4 billion, we tax it proportionately to the amount of

business they do in this Province. So, if they do one-hundredth of their

business in this Province, we tax one-hundredth of their capital, rather than

the whole. In any event, it is far more than $5 million.

So when we tax a bank or a trust company - a big mainland

bank or trust company - under the Financial Corporations Capital Tax Act, they

pay a small portion, a very small portion, of their business in the form of this

capital tax. As a matter of fact, it works out to less than .002 per cent.

Now, what happens when you have a small company that wants to

get into the trust business in Newfoundland and they are facing our capital tax?

They would put up their $5 million capital and pay tax on that $5 million

capital. That tax, at 3 per cent, works out to be $150,000. There was a little

exemption there for $500,000 and 3 per cent on the exemption would be $1,500.

You take the $15,000 off the $150,000 and you have $135,000.

So what we have done, in effect, is raise the exemption from

$500,000 up to $5 million, thereby giving a tax saving of $135,000 to any

company that is so affected.

I do not see anything wrong with that, because what we are

doing is encouraging companies in this Province, or elsewhere, to set up small

pools of capital in this Province that they can use. As I see it, the only way

that we are going to haul ourselves up by the boot straps in this Province is to

keep the money that is in this Province here in the Province, rather than send

it off to the mainland to be invested in Ontario and BC and other parts. We have

to keep our money here. We have to develop our credit unions. We have to develop

local trust companies, and give them every possible break while they are small.

Now, as they grow bigger and bigger, and once they get over

the $10 million cap we have here, then they will not fall under the protection

of the $5 million exemption. As soon as they get $10 million worth of paid up

capital, then they will pay taxes on the portion of their business that is in

this Province; but until that time, they are getting a tax break. The rationale

for that is that we don't have very many companies locally who are in the

lending business, and I believe it is very important for us to encourage whoever

it is - I don't care if it is Fortis or any other company -it is better for them

to put their money in Newfoundland and keep it here.

Do we want to do like Nova Scotia does? Nova Scotia says: We

will give breaks on financial capital tax if you are in our province. Do we want

them to move up there? Do we want this trust company to move to Nova Scotia and

develop Nova Scotia, or do we want to encourage companies that have money to

keep the money here in this Province? I believe it will be good investment, a

good thing for us to do, and it will be fair. We don't want our debt - we owe

$5.2 billion, $5.6 billion - and most of that money is held outside the

Province. This Province is owned - our debt is owned - by people outside the

Province. We're owned by Japan, we're owned by Britain, we're owned by the

United States, and we're owned by people in other parts of Canada. That's who we

owe our money to. We owe very little to ourselves.

Whether or not an industry goes ahead in this Province is

determined by banks, which are controlled from Ontario. How many times during

this depression have I heard businesses say: boy, we can't get the banks to

relent. The local manager is satisfied, but the guys in Ontario are opposed to

it.

Now here we have an opportunity to have a trust company with

its headquarters in this town, in this Province, with its people in this

Province, who can respond to a large extent to the needs of this Province. I

believe that's a good thing. We cannot expect banks, mortgage companies or other

financial institutions in central Canada to develop this Province. We must keep

our capital at home, we must encourage our capital to be at home, and we must

develop our Province through the capital that is accumulated within this

Province.

I have no problem, Mr. Speaker, in supporting this Bill. We

are investing in our own future. I really resent the hon. Member for St. John's

East when he brings up this petty, petulant, pettifogging ambulance-chasing

attitude that he has about people who are trying to build up this Province.

Thank you.

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

MR. WINDSOR: Thank you, Mr. Speaker. I'm just going to

take a couple of moments to address this Bill. The former Minister of Finance

might want to make some comments about the Member for St. John's East, but I for

one think the Member for St. John's East has certainly tipped the tip of an

iceberg here. I think there's a great deal more that we would like to know but

probably will not learn this afternoon before this Bill goes through, if it goes

through this afternoon. There's a great deal more that we really should know

about exactly what's happening here.

The first thing I have to address is the hypocrisy of what I

just heard. The former Minister of Finance saying that we have to do everything

possible to cause Newfoundlanders to invest in Newfoundland. That's the minister

who cancelled the Newfoundland stock savings plan and the investment tax credit.

DR. KITCHEN: No good!

MR. WINDSOR: That's the minister who did that, Mr.

Speaker. He says it was no good. He didn't do anything to try to make it work.

It worked very well when we had it in place. Very popular program. Acclaimed by

the investment community. It was on their request that we put it together. On

their advice and in consultation with them that we put those two plans in place.

The minister eliminated those altogether and now stands in his place and tries

to downgrade the Member for St. John's East because he's attacking what the

minister tries to put forward as a means of investing.

I don't think anybody disagrees with making it easier to

invest in Newfoundland. I'm on record in this House many times of saying that we

have to keep some of the $400 million or $500 million of investment capital

that's going out of this Province every year, to keep it here in Newfoundland.

It's going out in wheelbarrow loads. Through investment companies, through

banks, through insurance companies, through pension funds.

I think - the minister may correct me, he may have an updated

figure - but as I recall it was $400 million or $500 million a year, something

of that magnitude, that's going out of this Province. Anything that government

can do to keep some of that money in the Province we welcome. We supported Bill

47. I think we did. I wasn't here when it went through. But we supported that

Bill, and so we should. To make it easier for people to invest in Credit Unions.

So that the people are receiving some of the benefits. They're getting some of

the dividends from that investment.

That's a different matter altogether than paying dividends to

a private corporation that has basically a monopoly situation and whose profit

is protected by the Public Utilities Board. It's a different ball game

altogether. It may well be a fair thing to do here but it's under very

suspicious circumstances that this piece of legislation comes before this hon.

House. Very suspicious. I guess human nature kicks in here when we see who were

former chairmen of the board and members of the board. I think we have to be a

little bit suspicious. But I won't dwell on that. Maybe some other factors will

come to light in due course.

This Bill, I think, gives a mechanism for only one

corporation in the Province, Fortis Trust, as it happens. Now the government is

telling us that's by circumstance. There happens to be only one company in this

position, and no doubt that's true. As I understand it, in order to get CDIC

coverage you must invest $10 million. So the company has invested $10 million or

more. As a result of that they're paying taxes on that whole $10 million. Well,

what's wrong with it? If they're earning revenues on the whole $10 million

that's invested, why indeed should they not pay taxes on it?

Government chooses to give them a break on that. Government

is choosing to reduce it - or to move the exemption from $500,000 to $5 million

- which gives $135,000 to that company. Now this is a government which is going

to come in here with a mini-Budget in two or three days time and tell the people

of this Province that they have to re-trench, they have to tighten their belts

another couple of notches. They're going to dump it on the backs of the public

service of the Province. We're probably going to see reductions in services.

We're probably going to see tax increases. We don't know.

The Minister of Finance and the Premier have told us that

everything is up for grabs. We don't know what the impact of this mini-Budget

will be. Yet the same government today is passing $135,000 per year back to a

private corporation that's doing very well, thank you very much. Doing very

well, and whose profits are protected. Those profits are protected.

There has to be a question. The profits of the parent company

are protected, Fortis Trust, no. Fortis Trust are not. But Fortis Trust are

competing with all others who don't have any protection and who are paying their

taxes, as my friend for St. John's East I think pointed out very well.

AN HON. MEMBER: It's a cash cow.

MR. WINDSOR: It's a cash cow. Anyway you look at it it's

$135,000 bonus for one private corporation, $135,000 bonus to the shareholders

of Fortis Trust. That is the end analysis.

So, Mr. Speaker, there's a big difference between supporting

Credit Unions, where the workers of this Province, where the middle-income

earners of this Province can invest a portion of their money in their own

private company and receive some share in the dividends. We've been encouraging

co-operative societies in this Province for years, and they've been operating

for many years, particularly in rural Newfoundland, and now getting into trusts

and becoming very much in competition with banks. We also have to be careful I

might say in allowing private trusts and credit co-ops becoming too competitive

with banks. Unfairly competitive. I think we're a long ways away from that at

this point in time.

So, Mr. Speaker, I'm going to leave it at that. Let me say

that we don't agree with this particular piece of legislation. There are many

questions we'd like to have answered. I hope perhaps the minister when he stands

would try to address some of the questions that have been put forward.

MR. SPEAKER: The hon. the Member for Burin - Placentia

West.

MR. TOBIN: Mr. Speaker, I'd like to have a few brief

words on this piece of legislation as well. Like my colleague the Member for

Mount pearl just stated, we've got reason to be suspicious of what's taking

place in this piece of legislation. As the Member for Mount Pearl pointed out

that time, I say to the Minister of Finance - and if you weren't listening you

should read Hansard, because what the Member for Mount Pearl said was that we

have reason to be suspicious about this piece of legislation. This is going to

give protection -

AN HON. MEMBER: You don't understand it.

MR. TOBIN: Well, probably I don't understand it, I say to

the Minister of Finance. But I'm not sure you understand it either. Because you

did not sit on the board of directors of Newfoundland Light and Power or the

board of Fortis Trust. So if you had to sit on the board of Newfoundland Light

and Power, or if you happened to be past chairman of the board of Newfoundland

Light and Power, or if you happened to be an immediate past director of Fortis

Trust, then you would understand it. If I had been in the position I would have

understood it.

I would like for this minister to tell the House who drafted

that piece of legislation and who initiated that piece of legislation to come

before this House. Because, Mr. Speaker, I can smell a rat. I can smell a rat

right in the middle of this. Why is this government today, why is the Minister

of Finance, Mr. Speaker, involved in fearmongering in this Province? Why is the

Minister of Finance, day in and day out, telling the people of this Province

that he is looking at a rollback when he has no intention of rolling back wages,

Mr. Speaker? He is going to try to get the teachers, the nurses, the doctors,

the social workers and all the public service in this Province, on Friday or

Monday, to stand up and say: Thank God for nothing. He is fearmongering to the

heights, Mr. Speaker.

At the same time he is bringing a piece of legislation before

this House for his buddies, for the conflict of interest Minister of Justice who

had to sit in the galleries, and the Premier who is in a conflict of interest on

this piece of legislation, and asking us to approve a piece of legislation that

is going to give Fortis Trust, the richest corporation in this Province, a

licence to print money on the taxpayers' backs through Newfoundland Power, and

give them a $5 million tax holiday. At the same time he is freezing the wages of

public servants in this Province. That is what is taking place, I say to my

friends opposite.

AN HON. MEMBER: (Inaudible).

MR. TOBIN: The President of Treasury Board, Mr. Speaker,

says that I don't understand it. Probably I don't understand it, but I can tell

you one thing, I understand who was the former Chairman of Newfoundland Power. I

understand who just came off the board of Fortis Trust. I understand who is in a

conflict of interest in this piece of legislation. Because, Mr. Speaker,

yesterday the minister admitted he was in a conflict of interest, and asked to

have it put into the record where he removed himself from the House because of

his conflict of interest.

How can we, the taxpayers of this Province, be expected to

have the Newfoundland Government subsidize Fortis Trust? Because, indirectly,

that is what is taking place, I say to the former Minister of Finance. A

$150,000 tax break for the people of Fortis Trust when, at the same time, Mr.

Speaker, there are people in these galleries today who have problems with their

homes, can't get repairs done to their homes in this Province, who have been

surrounded by policemen because they visited certain offices trying to get some

work done, trying to get some repairs to their homes. This government today will

ask the taxpayers of this Province to look after Fortis Trust to the tune of a

$5 million tax holiday. The former Minister of Finance can shake his head all he

likes.

Mr. Speaker, Fortis Trust, as I understand it, has just

recently purchased the Royal Trust Building.

AN HON. MEMBER: No.

MR. TOBIN: They haven't?

AN HON. MEMBER: (Inaudible).

MR. TOBIN: Fortis Inc. have purchased the Royal Trust

Building - okay - where Fortis Trust will, no doubt, operate from because it is

was purchased for that reason, Mr. Speaker.

What is happening today, we have seen it - my friend, the

Minister of Industry, Trade and Technology was reading a newspaper

article from

the Burin Peninsula dealing with an investigation into ACOA. People are

concerned about what is happening down there, because of what is taking place

and why they cannot receive funding, and because of the involvement of ACOA in

the tourism division or whatever group they have mentioned there. They are

concerned about ACOA, in particular, treating them unfairly.

How can we expect trust companies in this Province not to

react the same way, to this piece of legislation? How can we expect someone

working for the government today, making $15,000 and $17,000 a year, to take a

wage freeze for the third consecutive year, when this government is prepared to

give a $5 million tax holiday to Fortis Trust, how can that be expected, Mr.

Speaker? Yes, you can laugh all you like because that is what it is. It is a $5

million tax holiday and the Member for St. John's East pointed it out today, and

as my colleague the Member for Mount Pearl pointed out, is that we have reason

to be suspicious, a $150,000 grant basically, yes I would say to the former

Minister of Finance, basically a $150,000 grant, being written off to one of the

riches corporations in this Province.

I will say to those members opposite how can you in all

honesty stand in this House, whenever that Bill is going to be called to be

voted on, and vote to give a grant to Fortis Trust for $150,000 when at the same

time you are asking people working for this government to freeze $15,000 a year

wages? I hope that members opposite will stand up and be counted on this one. I

would like to see the member, Mr. Speaker, for Port de Grave stand up and be

counted on this. How can he see people today, as a former Minister of Social

Services, when houses that need repairs, people with no doors and windows, snow

and rain blowing through, and this government turns around and says: we have no

money to do it, we ran short of money in June. Now there is a piece of

legislation here to give Fortis Trust a grant of $150,000 or a $5 million tax

holiday and how can one not help question the fact that the minister, the

Government House Leader, the Minister of Justice is in a conflict of interest

position.

AN HON. MEMBER: (Inaudible)

MR. TOBIN: I said that, I said it earlier, he declared

it. I asked to have it tabled and he left the chamber. I said that but that

makes me even more suspicious to know that the Minister of Justice in this

Province has declared he is in a conflict of interest position, has left the

chamber, Mr. Speaker, has left the chamber while it is taking place and the

Premier, a former chairman of Newfoundland Light and Power -

AN HON. MEMBER: (Inaudible)

MR. TOBIN: It is the same thing, it's all tied together,

I will say to the former Minister of Finance - what is that?

AN HON. MEMBER: (Inaudible)

MR. TOBIN: Mr. Speaker, all I would say is that if they

are talking about plots, I would sincerely hope that many of the members

opposite have picked out their political plots because it is coming as soon as

the Premier has the courage to go to Government House and ask for the writ to be

issued. So, I would suggest that you go get your plots, your political plots

rather quickly because what will cause you to be politically buried in this

Province, Mr. Speaker, is pieces of legislation like we are asked to approve, to

give Fortis Trust a $5 million tax break and not repair a home for someone on

social assistance. That is what will cause you pain and agony and a political

funeral, Mr. Speaker.

How can you turn around to the public service in this

Province today and say we want to roll back, as the Premier tries to say and the

Minister of Finance tries to say, we are going to roll back your wages when they

have no intention of doing that, no intentions, Mr. Speaker, of doing that, it

is fearmongering on the part of the government to get everybody to say: oh, we

only got a wage freeze, thank God, that is the plot, that is the plan. When they

are prepared to freeze the wages of a civil servant today making $15,000 and to

give Fortis Trust a tax break of $150,000.

AN HON. MEMBER: (Inaudible)

MR. TOBIN: People in the civil service today, oh yes, a

lot of them. How can the Member for St. John's South go to his constituents

today and say: I just approved a grant for Fortis Trust of $150,000, or a tax

holiday for $5 million when at the same time these people will not have

anything. How can the Member for Eagle River, Mr. Speaker, when the people down

in Cartwright do not have a piece of equipment to clear the roads this Winter,

stand up

in this House and approve a $l50,000 grant for Fortis Trust,

when they can't clear the roads in Cartwright? How can the former President of

the NTA in this Province, a man who called a strike on issues far less severe to

the membership than what we have today, how can he a