March 26, 1998 HOUSE OF ASSEMBLY

PROCEEDINGS Vol. XLIII No. 5

The House met at 2:00 p.m.

SERGEANT-AT-ARMS: All rise.

MR. SPEAKER (Snow): Order, please!

The hon. the Minister of Finance.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Mr. Speaker, I move that this House resolve itself into

a Committee of the Whole on Ways and Means and that the Speaker do now leave the Chair.

MR. SPEAKER: The motion is that the House resolve itself into a

Committee of the Whole on Ways and Means and that I do now leave the Chair.

The hon. the Minister of Finance.

MR. DICKS: Thank you, Mr. Speaker.

OUR PLAN IS WORKING

Mr. Speaker, last year this government presented the first three-year

fiscal plan in the history of Newfoundland and Labrador. It established priorities and

restructured services. Necessity required re-invention.

This year, I am pleased to announce that the plan is working.

Mr. Speaker, last year's Budget projected a deficit of $20 million.

That goal has been met. The deficit target for 1998-1999 remains at $10 million. The

Budget will be balanced in 1999-2000.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: These targets are being met without any new cuts,

layoffs or taxes.

Mr. Speaker, there is a strong consensus in this Province: the Budget

must be balanced; extra money must go to education, health care, and those in need, and

the tax burden must be reduced.

Such a strong consensus should not and will not be ignored.

BUDGET PLAN

1997 Economic Performance

Mr. Speaker, economic performance in 1997 was better than expected.

Real GDP declined by 1.3 per cent rather than the 2.7 per cent forecast at Budget.

Improved performance can be attributed to:

a 5.7 per cent increase in retail sales. Much of this can be attributed

to the introduction of the HST - which represents the single largest tax cut in the

history of this Province since we joined Confederation;

a 9.3 per cent increase in capital spending, which included the

construction of the Whiffen Head transshipment centre and the completion of the Hibernia

Platform;

a 12.6 per cent increase in the volume of fish landings accompanied by

a 15.7 per cent increase in their value;

a 9.4 per cent increase in the value of mineral shipments, led by

strong growth in iron ore production and the start-up of several new mines;

a 3.8 per cent increase in newsprint shipments;

a 5.2 per cent increase in total exports;

a 22 per cent increase in the number of tourists represented in part by

a 220 per cent increase in convention activity in the St. John's area alone, and this, of

course, was boosted by the success of the Cabot 500 celebrations and, of course, earlier

than expected

oil production at Hibernia.

At the end of 1997, year-over-year employment had increased 4.8 per

cent -

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: - from 182,000 people to 190,800. Our unemployment rate

dropped 2.8 percentage points year-over-year. While the unemployment numbers are still far

too high, this is significant progress. All these statistics indicate that our economic

prospects are improving.

Economic Outlook

Mr. Speaker, we can look to the future with optimism. Resource

development spending will continue. Manufacturing and exports of oil and fish products

will increase.

We forecast that the economy will grow by between 4 and 4.5 per cent in

real terms this year. This is in line with third-party forecasts. Strong economic growth

will continue in 1999 due to major investments in Voisey's Bay and Terra Nova, as well as

increased oil production at Hibernia.

We welcome this turn of events. These will be the first years of

significant growth after several years of economic decline. The 1990s have been difficult

years for Newfoundland and Labrador. The effects of the groundfish moratorium and the

recession of 1991-1992 are still being felt in our economy. However, while provincial GDP

will increase, and at a substantial rate, government revenues will not grow at the same

pace.

We must therefore, keep on track with continued fiscal restraint and

prudent management of public finances if we are to attain our goals of providing efficient

services, reducing taxes, and stimulating economic growth.

Fiscal Outlook

During the election campaign of 1996, we said in our platform, and I

quote:

1996 and 1997 will be difficult years for our province's economy. They

will be difficult years for the provincial government's finances.

The outlook for the years that follow is a much improved economy and

fiscal situation. Strong economic growth is expected in 1998, 1999, 2000 and thereafter.

However, the provincial government's overall revenues will grow more

slowly than the economy, in part because equalization payments go down as receipts from

taxes and royalties go up. I end quote.

Mr. Speaker, as a result of this GDPs growth, people's expectations of

government are also increasing.

Let me repeat: while GDP growth will be strong over the next few years,

provincial government revenues will not grow at the same rate. Mineral and oil tax

regimes provide for a payback period which allows project owners to recover capital costs

from production revenue. While developers are recovering their capital costs, government's

tax and royalty collections are low. Once the payback period is over, provincial resource

royalties will rise as a share of project revenues.

However, as revenues increase, equalization transfers from the federal

government decrease. On average, as much as 84 cents of every revenue dollar received by

the provincial government will be deducted from equalization transfers. This will diminish

the money available to finance provincial programs or to reduce taxes.

Therefore, we must resist demands for new spending we cannot afford,

unless we are prepared to increase taxes, lay off employees, or borrow more money.

Our approach will be continue to manage our finances prudently, so that

the benefits of Hibernia, Voisey's Bay, the Churchill River, and other developments can be

used to reduce taxes, pay down debt, and improve our health, education and other essential

services.

The Public Service

Government recently negotiated a 7% pay increase over 39 months with

several of our public sector unions. This is the maximum the the public's finances can

afford at this time.

To those members of the public service who believe that Government can

afford more than it is offering, let me be clear: It is the people's finances we are

managing. It is the people's bank account. A 7% increase is fair. A 7% increase is all we

can afford. There is no more money. We will not increase taxes. We will not cut services.

We will not borrow money to give a larger increase that government can afford at this

time.

Public Sector Pensions

Mr. Speaker, let us also consider our pension plans. The unfunded

liability of our public sector pensions represents a substantial portion of the

accumulated total debt of the Province.

The magnitude of the unfunded liability threatens the long-term

viability of our pension plans, as well as the benefits pensioners expect to receive. We

have taken steps to address unfunded liabilities in some plans, and we have received the

co-operation and support of most public sector employees. However, without the full

co-operation of all employees, we cannot finish the task.

Government is accepting its share of the unfunded liability. Employees

must also accept their full and fair share. Our three year fiscal plan makes provision for

substantial payments to reduce the unfunded liability. We will continue making these

payments until our obligation is fulfilled.

Teachers' Pension Plan

Teachers have a separate pension plan that has an unfunded liability of

$1.6 billion.

Unless something is done, the teachers' plan will require deficiency

payments of $121 million in 2004, increasing each year thereafter and, in fact, runs out

of money in the 2003. This money cannot, and should not, be found from cuts to services or

increased taxes to fund benefits that teachers themselves have not paid for.

It is in the best interest of teachers to work with government on a

fair and equitable solution of this problem. It is a joint responsibility, not solely that

of Government and taxpayers. We stand ready to make the investment in the Teachers'

Pension Plan and we stood so for some time but time is running out and this is not a

problem that will go away.

MHA Pensions

Members on both side of the House recognize that the pension

arrangements for members of the House of Assembly need to be reformed. Government will be

introducing appropriate changes to that plan during this session. Effective immediately,

the following measures will be implemented for all members of the House of Assembly:

Pension contributions will be increased from the present 7 per cent to

8 per cent effective April 1, 1998, and to 9 per cent effective April 1, 1999.

The benefit accrual rate will be adjusted to provide maximum benefit

after twenty years of service, for new members, instead of the current seventeen years.

Finally, the stacking of Canada Pension Plan benefits, on top of MHA

pensions, will end immediately. Mr. Speaker, after today, the only public employee group

in this Province to retain stacking privileges will be teachers.

Tax Reform

Mr. Speaker, we recognize that Newfoundland and Labrador is one of the

highest taxed jurisdictions in North America. This must change. Last year, we introduced

the HST, which reduced the combined federal-provincial sales tax from 19.84 per cent to 15

per cent. This was the single largest tax cut in our Province's history.

The recent federal budget provided Canadians with personal income tax

relief in several areas. Since provincial income tax is calculated as a percentage of the

federal tax, these new reductions will lower personal income taxes by more than $30

million, of which $12.5 million comes from the Provincial Treasury. We are pleased with

and support these tax reductions.

We are also concerned that the payroll tax is a disincentive to

employment. In principle, we support its elimination over time, but fiscal circumstances

make it impossible to surrender the $46 million of net revenue that it represents to the

Treasury.

However, we are committed to making first steps. Currently, the first

$100,000 of annual payroll costs are exempt from the Province's payroll tax. Mr. Speaker,

I am pleased to announce today that, effective for the 1998 taxation year, the exemption

will be raised to $120,000.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: This measure will benefit all businessmen in the

Province, particularly small business operators. In excess of 225 small businesses will be

removed from the tax rolls and approximately $1 million will be put back into the hands of

the business community for further investment.

OUR SOCIAL PRIORITIES

Mr. Speaker, we must search for new, innovative reforms in health care,

social programs, and education. We must invest for the long-term in prevention and early

intervention. We must become less institutional, more integrated with the community, and

more focused on the individual needs of people.

HEALTH CARE

Mr. Speaker, the federal government must fairly share with the

provinces the cost of universal health care. That is why, only days ago in Ottawa, the

Newfoundland and Labrador delegation led the charge to increase federal health care

funding at the Biennial Convention of the Liberal Party of Canada. A Newfoundland and

Labrador resolution was passed that proposed that health care be the highest investment

priority for any fiscal dividend from the federal government.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: We repeat that call here today. Now that the federal

deficit has been eliminated, the first priority of the federal government should be the

restoration of health care funding.

In the meantime, we will do everything within our financial power to

maintain stable health care funding and make further strategic investments for 1998-1999.

Mr. Speaker, we are addressing the shortage of medical personnel in our

rural areas. Last year we raised the salaries of rural physicians; increased compensation

packages for doctors providing emergency room care; provided $300,000 for the Nurse

Practitioner Program; and established Rural Primary Care Service and Teaching Units in

Port aux Basques, Twillingate, and Happy Valley - Goose Bay.

This year we are continuing to make strategic new investments in

institutions and community health, equipment, services and facilities.

To maintain a healthy society, we must provide for appropriate

education and services in the community, as well as in our institutions. We are,

therefore, increasing the budgets for community health by $2 million.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Mr. Speaker, we acknowledge the increasing pressures on

the delivery of acute and long-term care. Last summer, we increased funding for health

care institutions by an additional $20 million. Today, we are announcing another $10

million for our health care institutions. This means that there will be an additional $30

million to help stabilize hospital budgets in 1998-1999.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: We will work closely with our institutions over the

course of this year to implement a long-term strategy to deal with the operating deficits

of hospital boards and provide for better accountability.

Mr. Speaker, we are making strategic investments in equipment,

services, and facilities to improve our health care system. This year, we will invest:

$2.8 million in our drug program; $500,000 to restore the Non-Emergency Medical

Transportation Assistance Program. This assists with the costs of those who must access

health care services not available in their area of the Province, and for those who are

referred outside the Province for specialized health care services.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: This year again, Mr. Speaker, we are investing another

$3 million for new hospital equipment.

Mr. Speaker, last year, approval was given to the St. John's Health

Care Corporation to renovate St. Clare's and the General Hospital, expand the Cardiac

Surgery Ward at the General Hospital, and construct a new Janeway Children's Health and

Rehabilitation Centre, all of this at a cost of $130 million.

We must also improve facilities in other areas of the Province. This

year, we are continuing with construction of a new hospital at Harbour Breton, the

redevelopment of the James Paton Memorial Hospital in Gander, and, thanks to the generous

contribution of the Voisey's Bay Nickel Company, a new hospital in Happy Valley - Goose

Bay.

We are announcing today a multi-year plan for additional health care

facilities throughout the Province: The Blue Crest Nursing Home and the hospital in Grand

Bank will be replaced by a new multi-purpose facility for long-term and acute care.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: The Carmelite House Nursing Home in Grand Falls -

Windsor will be replaced by a new long-term care facility.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Mr. Speaker will be very happy to hear that the cottage

hospital in Old Perlican will be replaced by a new community health centre.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: New multi-purpose health care centres will be built in

Fogo and Bonne Bay -

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: - replacing cottage hospitals of many years duration.

A new hospital will be constructed for the Stephenville - Port au Port

- Bay St. George area.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: And planning and design work will commence later this

year to address identified needs at the Dr. G. B. Cross Memorial Hospital in Clarenville.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: These new expenditures, coupled with last year's

commitments, represent an investment of more than a quarter of a billion dollars in

improved health care facilities in Newfoundland and Labrador.

This is not a wish list. What we are announcing today represents, in

each and every case, facilities identified for replacement many years ago. Some are

Commission of Government era hospitals, some are wooden old age homes. In each case, their

replacement was deferred because of fiscal restraint. They can no longer be deferred. They

are the top priorities of the Department of Health.

We will continue to review the need for new health care facilities and

make appropriate investments from time to time as we can afford them.

Mr. Speaker, through increased investments in health professionals,

institutional and community health budgets, equipment, services and new facilities, we are

continuing to provide for the health care needs of the people of Newfoundland and

Labrador.

SOME HON. MEMBERS: Hear, hear!

EDUCATION

MR. DICKS: Mr. Speaker, history will judge last year's education

referendum as the most significant change of the last fifty years in this Province - a

defining moment when we turned the page on the past to shape our educational system for

the future.

Education reform is about providing our children with the best school

system possible. This means clean air, good schools, learning materials, and the right

number of teachers.

Achieving these objectives, Mr. Speaker, means investing in education,

and that is what we propose to do.

Schools

Mr. Speaker, government recognizes that some new school construction is

necessary and that many of our existing schools are in need of repair. These repairs were

deferred for years because of restraint. It is now time to make these needed repairs.

Air quality control problems will be addressed.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: That means clean air in every classroom, in every school

in the Province.

We are, therefore, announcing a significant investment in our education

system. Today, we are making available $50 million toward school construction and

upgrading -

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: This $50 million will be spent over the next two years.

I am announcing today the formation of a new entity, the Newfoundland

and Labrador Education Investment Corporation. Government, through the Corporation, will

review capital investment plans submitted by school boards, determine priorities, and

develop a multi-year plan for investment.

Mr. Speaker, in recent years, our capital investment in schools,

because of fiscal restraint, has been reduced to as low as $4 million annually. The $50

million investment I am announcing today represents the largest example of government's

commitment to reinvesting in education. However, we are investing in other areas as well.

Teachers

For many years, the number of teachers allocated in the Province has

been determined by the number of students.

The number of students decreased last year by 4,600, and will decrease

another 4,000 this year. Ordinarily, these declining enrolments would have meant a

reduction of 425 teaching units. As student numbers decline, however, it becomes more

difficult to provide quality education to our young people if teacher reductions keep

pace.

Determining the right number of teachers is a matter or art, not

mathematics. We are, therefore, limiting the reduction in teaching units in 1998-99. As we

announced nine days ago, we will "add back" about 200 of the 425 teachers that

the existing formula would have eliminated.

Special Needs Students

Mr. Speaker, we have reviewed The Report of the Review of Special

Education. Dr. Patricia Canning conducted a comprehensive examination of the special

education needs of our children. We are responding to that report with new investments in

special education.

We are announcing today an additional seventy teaching units to help

those children with special needs and disabilities.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: This represents an additional $3.3 million annual

investment in our children. Teachers will be added for children with learning

disabilities, emotional/behaviourial disorders, traumatic brain injury, fetal alcohol

syndrome, and autism.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: We will also provide $250,000 for educational materials

suited to children with learning disabilities, and a further $250,000 for early literacy

programs.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: The Departments of Education, Health, Justice, and Human

Resources and Employment will work together to provide individual care for special needs

children, and support for their parents.

Post-Secondary Scholarships

Mr. Speaker, good primary and secondary schooling is the necessary

foundation for later learning. Post-secondary education is becoming a prerequisite for

later employment.

Many students need further support to complete their post-secondary

announcing the Canada Millennium Scholarship for this year 2000. For the next two years,

however, no money is available.

Mr. Speaker, we have consulted with student leaders on the financial

hardships facing students.

Today, I am happy to announce that the provincial government will

provide $4 million for awards to students based on need and academic achievement.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: More than 4,000 awards of up to $1,000 each will be

available over the next two years until the introduction of the Canada Millennium

Scholarships.

SOME HON. MEMBERS: Hear, hear!

Memorial University of Newfoundland

MR. DICKS: Government has agreed to match private sector donations

to the Memorial University Opportunity Fund. This year, we honour that commitment with

another $3 million. This is in addition to the $6.3 million we committed to the Fund in

last year's Budget.

College of the North Atlantic

The College of the North Atlantic has evolved over the years to keep

pace with labour market demands, offering courses geared to the different regions of the

Province. To ensure that it continues to provide a first-rate education to its students,

the grant to the College will be maintained at its current level. In fact, with increased

federal/provincial training purchases under the Labour Market Development Agreement, the

College will receive approximately $2 million more to meet education and training needs.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: With these increases, government is demonstrating its

commitment to the publicly-funded post-secondary education system in our Province.

SOME HON. MEMBERS: Hear, hear!

BRINGING OPPORTUNITY AND INDEPENDENCE TO MORE FAMILIES

MR. DICKS: The energy, commitment and vigour dedicated to education

reform must now be directed to the reform of our social programs. New ideas and innovative

measures are needed to bring meaningful change.

The Social Policy Advisory Committee held over 100 meetings with 1,500

individuals from 130 communities on a new direction for social policy in this Province.

Their conclusion reflected the public assessment - the status quo is no longer acceptable.

A New Focus

The mandates of two departments will be changed. Last year, we

announced phase one: the creation of the Department of Human Resources and Employment.

The second phase begins on April 1 this year with community services

moving from the Department of Human Resources and Employment to an enlarged Department of

Health and Community Services.

The new Department of Health and Community Services will integrate

children and family health services through existing regional community health boards.

These boards will undertake new responsibilities for Child Welfare, Youth Corrections, and

Family and Rehabilitative Services.

Meeting Basic Needs

Mr. Speaker, we recognize that the 32,800 individuals and families on

social assistance have the lowest levels of income in the Province and, indeed, in this

country. Therefore, we are increasing monthly allowances by 7 per cent over the next three

years.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: This will commence May 1st with a 2 per cent increase.

Social assistance recipients will receive the same rate of increase that we have

negotiated with our public sector unions.

In addition, we will dedicate $400,000 to a new Cost of Living

Allowance for families with dependent children living on the Labrador Coast.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: This extra $150 a month will help purchase basic items

such as food and fuel on the Labrador Coast, where the costs are much higher than in other

areas of the Province.

Getting a New Start

Mr. Speaker, we must help those in need provide for themselves and

their families. The best way to assist people is to help them find a job. Government must

do all it can to encourage self-reliance. We must, therefore, take steps to remove the

barriers to employment.

Currently, most families who receive additional income lose 50 per cent

of every dollar up to $200 - the maximum exemption being $100 per month. Effective June 1,

1998, families will be able to retain the first $150 earned, with no reduction in

benefits.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Many single parents collecting social assistance have

told us that they are often "worse off" financially by accepting employment at

the minimum wage. Government must find ways to correct this. This year, in conjunction

with the Single Parents Association of Newfoundland, we will conduct a $500,000 pilot

project with 100 to 200 families to explore means of support that will enable them to

maintain employment.

Government will also provide $4.4 million for wage subsidies for up to

1,200 people to obtain meaningful employment in the private and non-profit sectors.

SOME HON. MEMBERS: Hear, hear!

Youth Employment

MR. DICKS: Government recognizes the problems faced by young people

as they try to make the difficult transition from school to work. This year, more than

$7.5 million will be directed towards youth programs. These will target post-secondary

students, youth "at risk" of becoming dependent on long-term income support, and

youth seeking first jobs and work experience. Over 2,500 jobs for young people will be

supported through wage subsidy initiatives. This includes $2.1 million for the Student

Work and Services Program. These initiatives are in addition to the $4 million in new

scholarships announced earlier.

SOME HON. MEMBERS: Hear, hear!

Helping Those With Disabilities

MR. DICKS: Mr. Speaker, over the years, people with disabilities

have made considerable progress in the workplace. We must ensure that these efforts

continue. To this end, government is finalizing an $8.2 million, 50:50 cost-shared

those with disabilities. Employment programs and services currently offered to people with

disabilities will continue to be available in 1998-99.

Through the Opening Doors Program, government employs people with

disabilities in the Public Service. This year we are pleased to announce an expansion of

will be used over the next two years to create new public sector employment opportunities

for persons with disabilities.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: In February, the disabled community in our Province lost

a distinguished ambassador - Ms Debbie Prim. She was a dedicated volunteer and an

accomplished athlete. In her memory, government will provide $88,000 to assist wheelchair

athletes attending the 1999 Canada Winter Games in Corner Brook.

SOME HON. MEMBERS: Hear, hear!

New Transition Homes

MR. DICKS: Mr. Speaker, to provide shelter, counselling and

referral services for battered women and children, government will establish core funding

for two new Transition Homes - in Nain and on the Burin Peninsula.

SOME HON. MEMBERS: Hear, hear!

School Children's Food Foundation

MR. DICKS: Mr. Speaker, if we are to educate children properly, we

must nourish their bodies as well as their minds. The School Children's Food Foundation of

Newfoundland and Labrador does valuable work with limited means to meet the nutritional

needs of children throughout the Province.

Government is pleased this year to provide the Foundation with a $1

million endowment to expand its efforts.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: We invite school boards, school councils, community

agencies, and the private sector to join us with their support.

National Child Benefit

Mr. Speaker, we must provide all children of this Province with equal

opportunities, regardless of family income.

If children of low-income families have: first-rate schools, proper

nutrition, access to proper health services, and an opportunity for advanced education,

then they will break the cycle of dependence and poverty.

This is the goal of government.

Mr. Speaker, when the National Child Benefit is implemented this July,

it will be Canada's first new social program in thirty years. This program will bring the

federal and provincial governments together to improve the lives of millions of Canadian

children.

Let us clearly understand how the National Child Benefit works:

The federal government will provide low income families with an

increase in the Canada Child Tax Benefit. This increase, called the National Child

Benefit, will provide an additional $605 annually for the first child of a family; $405

for the second child; and $330 for each additional child.

Provincial social assistance benefits to families with children will

decrease by the same amount.

Mr. Speaker, let me emphasize: there will be no loss of income for

social assistance families. They will receive the same amount. Part will come from

social assistance and the remainder from the National Child Benefit. For low-income

working families not receiving social assistance, the National Child Benefit will increase

the benefit level available to them.

The National Child Benefit frees up $10.15 million annually in

provincial social assistance funds. The Province will reinvest every last penny in

programs and services for low-income families.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: These include:

$1.15 million for additional Family Resource Centres,

$4.6 million for the improvement and expansion of licensed child care

services in the Province, including: additional child care subsides; the introduction of

licensed family home child care, and the introduction of licensed infant child care,

$2.8 million to establish regional youth service networks, in

partnership with existing community programs, and

1.6 million to assist families on social assistance who find work by:

increasing the child care expense deduction, and; extending full drug card benefits for

families for a period of time after they are no longer eligible for social assistance.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: New legislation governing child welfare services and the

licensing of child care services will be provided in this Session of the House. Community

participation will be sought in planning and implementing these changes.

Mr. Speaker, these efforts, taken together, will allow families to gain

greater independence and secure more employment opportunities.

DEVELOPING OUR INFRASTRUCTURE

Roads

Mr. Speaker, this year, government will manage the largest ever highway

construction program in the history of Newfoundland and Labrador - a total of $108 million

in new expenditures on 453 kilometres of highway.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Mr. Speaker, this amount includes $36 million for the

construction of the Trans-Labrador Highway:

130 kilometres between Cache River and Churchill Falls will be

upgraded,

42 kilometres between Churchill Falls and Wabush will be resurfaced,

and

the environmental assessment, engineering and planning for the

section

between Red Bay and Cartwright will be completed.

On top of these investments on the Trans-Labrador Highway, government

will spend an additional $72 million on provincial road construction and improvements.

Under the Federal - Provincial Transportation Initiative, $56 million has been tendered

this year for work on the Trans-Canada Highway and major trunk roads.

SOME HON. MEMBERS: Hear, hear!

Ferry Services

MR. DICKS: This year, for the first time, government will take

responsibility for the coastal Labrador ferry services. This transfer of responsibility

from the federal government was a major part of the $350 million Labrador transportation

initiative signed last spring. These funds have been dedicated by legislation for

improvement of Labrador's transportation infrastructure.

We will be making positive changes to the coastal Labrador ferry rates

and schedules. There will no rate increases for the first time in five years.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: In most cases, minimum rates for shipping freight and

vehicles will be reduced. The rate changed to ship heavy equipment to community councils

in Labrador, for example, will be cut in half.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: We will continue to work with communities on the

Labrador Coast to make the service more responsive to their needs

Mr. Speaker, the former MV Prince Edward will be integrated into

the Fogo - Change Islands service. The ferry currently in use there, the MV Beaumont

Hamel, will transfer to the Bell Island service to join the MV Flanders . These

changes will provide a more efficient service to these communities. As well, $1 million in

improvements will be made to their docking facilities.

SOME HON. MEMBERS: Hear, hear!

Local Government

MR. DICKS: Government is committed to investing in our communities

and alleviating municipal debts. We will spend $26.6 million to improve municipal

infrastructure in communities throughout the Province.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Before year end, $3 million will be invested in the

Newfoundland and Labrador Municipal Financing Corporation to again assist with municipal

debt restructuring.

St. John's Civic Centre

As was the case last year, Mr. Speaker, government remains committed to

working with the appropriate municipal governments, the private sector, and the federal

government toward the construction of a regional civil centre for the St. John's area.

GROWING THE ECONOMY

Under the new Canada - Newfoundland and Labrador Comprehensive Economic

Development Agreement, $15 million will be dedicated to export trade, strategic sector

development, entrepreneurship, community economic development and technology.

An additional $7 million will be allocated under the Province's own

Strategic Enterprise Development Fund to support business opportunities in strategic

growth sectors.

To ensure successful business and regional development, our human

resources must also receive strategic investments. Through the Canada - Newfoundland and

Labrador Labour Market Development Agreement, in excess of $100 million will be invested

this year. This will ensure that human resource and employment development efforts will be

linked with strategic development opportunities in other areas of the Province.

Government will focus on emerging growth sectors of the economy,

including aquaculture, information technology, biotechnology, adventure tourism, telefilm

and small-scale manufacturing.

Rural Revitalization

Mr. Speaker, eighteen of the twenty Regional Economic Development

Boards have developed their strategic economic plans. The Cabinet Committee on Rural

Revitalization has met with seventeen of them to determine the top five development

priorities in each zone and work on real opportunities for growth.

These have included: snowmobile trails on the Northern Peninsula to

extend the tourism season; a rural information technology Centre of Excellence in

Clarenville; eel aquaculture in Robinsons; pharmaceutical applications for seaweed in

Ile-aux-Morts; small-scale manufacturing in Bishop's Falls; technology applications for

mining in Labrador West; and trade opportunities at Gander International Airport.

Mr. Speaker, government is acting on its commitment to rural

revitalization, providing opportunities for people in rural communities.

Post-TAGS

The federal government has announced that The Atlantic Groundfish

Strategy will end in August. The federal government undertook this program because it was

responsible for the collapse of groundfish stocks. These stocks have not yet recovered.

The need and responsibility for a replacement program for TAGS is clear. We will continue

to press the federal government, once again, to accept it responsibility and quickly

institute an appropriate replacement for TAGS.

Components of this replacement program should include early retirement,

license buy-outs to reduce capacity in the harvesting sector, income replacement support,

labour market adjustments measures, and economic diversification.

A replacement program is crucial for rural communities that have to

adapt to the economic realities of the groundfish collapse.

Fisheries & Aquaculture

Mr. Speaker, this government has placed special emphasis on fisheries

diversification, value-added initiatives, aquaculture development and quality assurance.

In 1997, the value of fish products was $575 million, driven mostly by a health shellfish

sector. Ten thousand people were employed in harvesting; another 10,000 worked in

processing.

This past year has seen the opening of the inshore-based northern

shrimp fishery, a resource which has helped many of our communities severely impacted by

the groundfish collapse. Government has been firm in discussions with the federal

government that priority access to any future quota or increases of northern shrimp of our

shores must be allocated to adjacent inshore harvesters. This new inshore fishery has the

potential to generate in excess of $100 million annually.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: As well, it has an export value of over $200 million.

This year, government will invest $400,000 in new fisheries, with an

emphasis on the commercialization of underutilized species. We will also invest in a new

market promotion program.

For the first time in Newfoundland and Labrador's history and, indeed,

Canada's, a new partnership model will be used to reach agreements on fish prices without

the use of strikes or lockouts. Government will assist by providing $150,000 to implement

recommendations of the Task Force on Crab/Fish Price Settlement Mechanisms.

The aquaculture industry is positioned to expand significantly over the

next several years. Production is projected to increase from 1,600 metric tonnes this year

to approximately 3,000 tonnes in 1998. By the year 2000, aquaculture's export value could

reach $40 million and provide employment for 900 people in rural areas of our Province.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: This year, government will invest $10 million in

developing our aquaculture industry, including a $9.5 million contribution from the

Economic Renewal Agreement. This will support industry-related research and development by

completing the Aquaculture Research Facility at the Ocean Sciences Centre in Logy Bay and

the Aquaculture Resource Centre in Bay D'Espoir.

A more sustainable, more diversified fishery is emerging. Government

remains firmly committed to the revitalization of our fishing industry. The fishery will

always play a critical role in the economy of our Province, especially in our rural

communities.

Forestry

Mr. Speaker, we are continuing to make investments in the growth of our

forest sector. We are, therefore, pleased to announce an additional $500,000 for forest

access roads, for a total of $2 million to be invested this year.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: These will provide jobs in construction and sawmilling.

Silviculture will proceed on 11,400 hectares of land in the form of

planting, thinnings, and site reclamation. In partnership with the federal government and

industry, we will protect these investments in silviculture with a $10 to $15 million

expenditure for insect control.

Tourism

Tourism offers new potential for prosperity. Through the Economical

Renewal Agreement, we will invest $3.7 million this year on marketing and developing

tourism infrastructure.

The Cabot 500 Year was a landmark for our tourism industry.

Non-resident visitors increased by 22 per cent for a gain of nearly 69,000 tourists.

Convention activity in the St. John's area was up by 220 per cent. We will build

confidently on this success. This year, $1.5 million is being allocated to plan new events

for 1999 and 2000.

Soiree '99 is an invitation to our fellow Canadians and the world to

celebrate Newfoundland and Labrador's first 50 years in Confederation, and our deep and

lasting loyalty to this great country.

Soiree '99 will coincide with the 1999 Canada Winter Games in Corner

Brook. In preparation for the Games, an additional $445,000 will support lasting

improvements to the Stephenville Training Centre and the Arts and Culture Centre Pool in

Corner Brook.

The Viking 2000 Celebrations will showcase early Norse settlers at

L'Anse Aux Meadows, the only authentic Norse site in North America.

Heritage Foundation

Government will also dedicate $600,000 to the Heritage Foundation of

Newfoundland and Labrador so that it can continue its good work throughout this Province.

Art Procurement Program

In support of our artists, government will provide again this year an

additional allocation of $100,000 for the Art Procurement Program which is an extension of

the $100,000 we gave last year. In total, this brings this year's allocation to $200,000.

Softworld '98

Information technology is one of the fastest growing sectors in

Newfoundland and Labrador today. Softworld is the information technology sector's premiere

event of the year, showcasing companies from around the world. This year, Newfoundland and

Labrador will host 750 senior executives from more than 30 countries at Softworld 98 here

in St. John's. It promises to be the largest Softworld ever.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Government will work with our industry leaders to

maximize trade and partnering opportunities for local companies.

Film Tax Credit

Last year, Government targeted the television and film industry as a

new opportunity for economic growth with the establishment of the Newfoundland and

Labrador Film Development Corporation. This is a highly competitive business, both

nationally and internationally. Other jurisdictions have effectively utilized their tax

systems to stimulate economic and employment growth in this field.

Government believes the tax system can be structured to stimulate the

industry in Newfoundland and Labrador. After consultation with the Film Development

Corporation and industry, the government will, this year, move quickly to implement a

competitive film tax credit in this Province.

SOME HON. MEMBERS: Hear, hear!

EARNING OUR WAY

MR. DICKS: Newfoundland and Labrador is now an oil-producing

Province. We are moving toward further development of the hydroelectric potential of the

Churchill River system. And, we are moving toward developing the nickel deposit at

Voisey's Bay.

The value of our fishery, while still suffering from the collapse of

groundfish stocks, is increasing because of shellfish landings. Our forest sector is doing

well. Tourism is expanding. Aquaculture is developing. Information and biotechnology

industries area advancing. Manufacturing and small enterprises in our rural and urban

areas are growing.

Nr, Speaker, our prospects have never looked better. however, prospects

do not pay the bills. Voisey's Bay has generated growth only indirectly through increased

mineral exploration. Hibernia royalties are welcome, but modest. The new Churchill Falls

Projects will not produce power until 2007.

Revenues from these projects will not reach the public treasury for

some years to come. That means we must stay the course and manage our finances wisely.

The alternatives - to raise taxes, to make deeper cuts to essential

services, or to borrow - are alternatives the people of this Province have rejected.

We will use our limited financial resources to provide better care for

the sick and elderly, a first-rate education for our children, new opportunities for those

with disabilities, and support for those with low and middle incomes to help them attain

work and achieve independence.

Mr. Speaker, in closing, I remind all of us that the Budget Speech is

nothing more and nothing less than a public accounting of the finances for the people of

this Province.

Every claim made for more expenditures is not a claim against the

government's account, but rather a claim against the public's account.

That is why we must remember that a budgeting exercise is fundamentally

an exercise of making choices. The choices we have made today reflect our best judgement

as to the values that the people of Newfoundland and Labrador give highest priority.

Mr. Speaker, we must balance the public's account. So, too, must we

balance the opportunity for fulfilment to those who are least advantaged amongst us.

Mr. Speaker, this is our message. It is possible to be firm, but fair -

responsible, but responsive - in the pursuit of eliminating both our fiscal and social

deficits.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

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

MR. DICKS: Thank you, Mr. Speaker.

Mr. Speaker, I move that the debate be adjourned until tomorrow,

Friday, at 9:00 a.m.

MR. SPEAKER: The motion is that the debate be adjourned until

tomorrow. You have heard the motion.

On motion, debate adjourned until tomorrow, Friday, at 9:00 a.m.

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

MR. DICKS: Mr. Speaker, I wish to inform the House that I have

received a message from His Honour, the Lieutenant-Governor.

MR. SPEAKER: All rise.

The message is addressed to the hon. the Minister of Finance and

Treasury Board:

" I, the Lieutenant-Governor of the Province of Newfoundland and

Labrador, transmit estimates of sums required for the public service of the Province for

the year ending March 31, 1999, in the aggregate of $2,882,076,000 and in accordance with

the provision of the Constitution Act, 1867, I recommend these estimates to the House of

Assembly."

Signed:________________________________

A. M. House, Lieutenant-Governor

We will take a few moments now to have the documents distributed to the

hon. members.

MR. SPEAKER: The hon. the Minister of Finance and Treasury Board.

MR. DICKS: Thank you, Mr. Speaker.

I move that the Message, together with the Estimates, be referred to a

Committee of Supply.

MR. SPEAKER: It is moved and seconded that the Message from His

Honour the Lieutenant-Governor, along with the Estimates, be referred to a Committee of

Supply and that I do now leave the Chair.

On motion that the House resolve itself into Committee of Supply, Mr.

Speaker left the Chair.

Committee of the Whole

CHAIR (Penney): Order, please!

The hon. the Government House Leader.

MR. TULK: Mr. Chairman, I move that the Committee rise, report

progress, and ask leave to sit again.

On motion, that the Committee rise, report progress, and ask leave to

sit again, Mr. Speaker returned to the Chair.

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

MR. PENNEY: Mr. Speaker, the Committee on Supply has considered the

matters to it referred, and has asked me to report progress, and asks leave to sit again.

MR. SPEAKER: The Chairman of the Committee of the Whole on Supply

reports that the Committee has considered the matters to it referred, has directed him to

report progress, and asks leave to sit again.

On motion, report received and adopted, Committee ordered to sit again

on tomorrow.

Notices of Motion

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

MR. TULK: Mr. Speaker, I move that the remaining Orders of the Day

do stand deferred and that this House, at its rising, do adjourn until tomorrow, Friday,

March 27, at 9:00 a.m, and that this House do now adjourn.

On motion, the House at its rising adjourned until tomorrow, Friday, at

9:00 a.m.