Volume 1 PROVINCE OF NEWFOUNDLAND THIRTY-SIXTH GENERAL ASSEMBLY OF NEWFOUNDLAND 1st Session VERBATIM REPORT Tuesday, June 27, 1972 SPEAKER: THE HONOURABLE JAMES M. RUSSELL Number 40 C:

June 27, 1972 Tape 'lo. 1001 NC - 1 The !louse met at 3:00 P.'-1. '·1r. Speaker in the Chair. ~IR. ~PE.!\XEE_:_ 1 would li.kP to welco1ne to the galleries today the ',fayor of the Town of Centreville, Hr. Jame Hewitt and two cf his councillors and indeed any other visitors who might be in the galleries torlay. 1./e welcome you here nnd trust that your visit will be most informative. MR. ROllERTS: '1r. Speaker, if I may, Sir, on Thursday evening, certain statements were made in Committee hv the Member for St.

John's East Fxtern, the ~inister of Social Srrvices and Rehabilitation, Since that tlme we have heen supplied with ;i copy of the Hansard which was given L,1 11s by Your Jlonour shortly hefore the House met on Friday aftPrnonn, This is th,.• fj rst opportunity t have had to rise since then. I hnve taken professional advice, Sir. The advice that I am gi.ven is that some of the statements made by the hon. gentleman do cons ti tnte a h reach of the privilet:>;es of this House.

I may also add, Sir, J 1tave done a considerable amount of research in Beaueschne and manv of the other authorities, and there is no doubt at all that in try s1ilimisslon the question of timelinPss does not arise and the authorities are nuite clear on the point. Since then, however, '·!r. Speaker, the government have agreed to the request of my colleague for Bell Island, that a _judicial enquiry be appointed. They undertook in the House, the Minister of Ffoance, speakinp, on behalf of the government,on Friday afternoon, undertook,on beh:ilf of the government, to have an enquiry made.

If that is so and as we are anxious that this enquiry hegin its work as quickly as possible, with a view to concluding it as quickly as possible, we do not propose to press the matter of privilege. Your Honour may or may not wish to take it under advisement, because it is a matter which would affect - the Privileges of the House, not of any member, and as I said, I do feel there was a breach of the privileges but because of the special 3171

June 27, 1972 Tape No. 1001 NC ·- 2 circumstances and the government's decision to appoint a judicial enquiry, a royal commission to look into these charges made against my colleague, then we will let the matter stand until the report of the royal commission is received, made public, and then the appropriate action will follow from there. NOTICES OF MOTION: MR. CROSBIE: Mr. Speaker, I give notice that I will on tomorrow ask the House to resolve itself into a Committee of the Whole to consider certain •resolutions for the granting of supply to Her Majesty, MR. HICKMAN: Mr.

Speaker, on behalf of the honoura~le Minister of Municipal Affairs and Housing, I give notice that I will on tomorrow ask leave to introduce a bill entitled, "An Act Further To Amend The City of St. John's Act." OUESTIONS: Dr. A.B. ROWE: Mr. Speaker, I would like to table, for the information of the House, the answer to question numher 9Q on the Order Paper. MR. ROWE (WM.): Mr.

Speaker, I would like to address a question to the honourable Minister of Justice, Would the minister inform the House or make some comment to the House concerning the report that presumably members of the Newfoundland Constabularly are going around door to door delivering notices or forms of exemption to women under the Judicature Amendment (Number Two) Act, the Act number 76 of 19 71. Whether this report is in fact true and if true whether he considers this to be a good use of public xunds 1 to incur this type of expense. MR. HICKMAN: Mr.

Speaker, it is news to me but I am reluctant to say that it is not happening because I had a call from one of the radio stations today.But at that time the suggestion was that someone was circulating a questionaire, which I assume to be coming from some student or someone else who is making a study inte this and asking whether or not they felt women should serve on juries. But I know of nq - I cannot think 3172

June 27, 1972 Tape '.'lo. 1001 NC - 3 of any reason why any member of the Constabulary would be going from door. to door r,ranting exemptions to ladies from serving on juries. If the House will reca ll that last year there was an a mendment passed to The Ad1udi cator Act, providing that women may serve on _iuries. That Act has not as yet been proclaimed or - AN_ !!_ON. ME~IBER: Yes it was . MR. HICKMAN: Is it? That

section of the Act has been proclaimed. I dt d not realize that that particular

section had come into force. Well, Mr. Speaker , I will certainly inquire into it. I hope this is not heinl!: confused with the taking of the jury list because that is part of the duties of the Newfoundland Constabularly , to go from door to door to take a jury list, quite proper but if it is If such is the case, that is 3173 ¢.··

June 27, 1972 Tape 1002 (afternoon) PK - 1 MR. HICKMAN: going around, I cannot conceive of any police,officer going around handing out exemptions. All I can tell the House is that I will find out about it and advise the House as soon as I get the facts. MR. ROBERTS: If I could add a word, Mr. Speaker. It may or may not be the jury list, but what has happened in the Pleasantville Area is that constables have been coming to the doors of apartments and they may be leaving other matters, hut they are leavin~ among other things, the form which says a woman is eligible to serve on a jury unless she exempts out.

All that I am saying is that there is some public or all that my colleague is saying that there is some public question over it, It may be something as simple as the taking of the jury lists. But he has undertaken to find out 1 in due course. Mr, Speaker, J would like to direct a question to the honourable the Premier. Would the honourable the Premier inform the House if a date has been set yet for the Newfoundland Federation of Labour to present their annual brief to the government? MR. MOORES: No date has been set, Mr. Speaker. MR. NEARY: MR.

Speaker, I would like to direct a question to the Minister of Labour.In . view of the second serious accident that occurred at the ERCO phosphorous plant in Long Harbour over the weekend, the second serious accident within two weeks wo~ld the minister inform the House if the government have yet taken the decision on the appointment of an industri~l inquiry? MR, MAYNARD: Mr. Speaker, the situation is.under a thorough investigation and there is no further comment that I can make at this time. MR. F. B. ROWE: I would like to direct a question to the honourable Minister of Education.

In view of the fact that the minister stated that Miss Norman has been found unsuitable for certification because she has demonstrated some hostility, I wonder if the minister could inform the House of the nature of the hostility,since it is such a loose and blanket statement intends to cast a reflection upon the 3174

June 27, 1972 Tape 1002 (afternoon) PK - 2 MR. ROWE~~ character of an individual. MR. CARTER: Mr. Speaker, I checked into the matter further and I have been assured by the Denominational Educational Committees that never, I repeat, never has a teacher been denied a certificate on the bases of religion.

They have indicated to me that if Miss Norman in this particular case or anyone, it does not matter who, is willing to put down either what there religion is or that they are unaffiliated or any answer at all which is reasonable and if they agree to uphold the christian tradition within the school system of his or her:choice, that is, whether they want to teach under the Integrated Board, the R.C. Board or Pentecostal Board that they will no doubt, she or any other such person will get their certificate. This is where the matter lies.

I would say the ball is in Miss Norman's court.If she wishes to get her certificate, then this is what she has to do and this is all she has to do and the issuance of her certificate would be practically automatic. MR. ROW!,~ Mr. Speaker, I think the minister misunderstood my question to start of with. I did not ask what Miss Norman has to do, although I am interested in the answer to the question.

I was asking the honourable minister if he would identify the nature of the hostility that Miss Norman displayed towards the Denrnrinational Educational Committees or in her meetin~s with the Denominational Educational Comm1ttees? :MR. CARTER: Mr. Speaker, this is I feel opening up the whole matter for debate and this is not the time nor place for a debate in this House, so I would decline to answer that question. Mr.

Speaker, I would like to address a question to the honourable the Premier, In view of the fact that the Premier stated he hoped the matter concerning the certification of Judy Norman would not be allowed to drop and also that the relevant law may be a bad one. does the Premier have anything new to reoort to the Rouse concerning this particular case or the principle that it has brought out into the open? 3175

June 27, 1972 Tape 1002 (afternoon) PK - 3 MR. MOORES· Mr. Speaker, nothing new to announce at this time but it is under continuous stµdy and hopefully a position will be established to the satisfaction of all of them in the next few days. 3176

June 27, 1972 Tape 1003 'MR._ ROWE(F.W.): ~{r. Speaker, 11as the honourable the Premier p:i ven any consiaeration to the possibility of setting un some sort of an anpeal board for circumstances such as this? MR. MOORES: Not an appeal ho ard as such, Mr. Speaker, hut I think the Minister of Education will he makinr a statement on that within the next dav or two ;is to the procedure we are recommendinr. MR. WINSOR: ~r. Speaker, before you call orders of the clay may I direct a auestion to the honourable Minister of Fisheries.

Has he anv report of the conclition of the fish which was bought or taken on hoard the trawler at Torbay? ••Jhat conr1i tion was it in 1-1hen it reachecl the plant anr1 if it is the intention of the ~overnm1:>nt to continue that sort of conveyance? MR. CHEESEMAf'l": Yes. ~~r. Spe.akPr, in answer to the question of the honourable member for Foro, the report which we recPived today from .JM - 1 the hoat is th;,t the outturn looi·s to be quite satisfactorv.

As the honourable member will he aware and his own experience in this business of course will indicate that every precaution was taken in terms of the ouantity of ice used on the fish. The fish was t;iken directly from the water and Joaded 11board and it was actually apnroximately thirty hours runninp time hack,which was considerahlv shorter than we had od ,:,:inal ly anticipated.

But generally speakinp, the out turn has heen satisfactory and provided conditions here,that is locally, are such that we can see that the boat is nee.derl and .in fact that ft is rlesirable to brin g her back down a,:>.ain1 she would be able to turn around earlv tomorrow morning ~•hich woulcl put her back here on Thursday. Tlut that final decision has not been taken and should be comnleterl tonight and we will then make that final decision. But as of now the outturn looks reasonably satisfactory. On motion that the House resolve itself into Coml'littee of the \/hole on Supply, Mr.

S!"eaker left the Chair. 3177 -~

June 27, 1972 Tane 1003 COMMITTEE OF SUPPLY: ----- - - --- - >.fR. CHAI~.A>;J: ----- ~---~ Order! Headinp, XV - Economic Development - 1501(01): MR. CROSBIE· Mr. Chairman, when we ad_iourne<l Friday I was speakin1> on the estimates generally,the Department of Economic Development,and in particular on the situation with respect to power development at Labrador on the Upper Churchill. I pointed out, Mr.

Chairman, that while the develooment of the hydro-power resources on the Upper Churchill was a p,reat construction and enpineerinn feat and a rreat development feat that our review of the exact nosition 1n relation to the Upper Churchill reveals that it is far from a great benefit to this province, from the point of view of revenue and employment. As members know,of course 1 there was considerable emploVl!'Pnt involved JM - 2 in that pro _; ect and still is while construction :Is un<1erwav.

Once however the construction phase is over, in the next two years, there will only be a small number eT"nloyed on that development permanently while the great hulk of the power,some seven million horsepower or five and a quarter million killowatts,will be sold to Hynro-Quebec 1 in the Province of Quebec, for use in that province primarily anrl user" for industrial and other purposes in that nrovince. ~ve have the rip:ht I said, Mr.

Chairman, to recapture !1()0,000 horsepower of the total output for use in Newfoundland and Lahrador or in Lahrador, lnfortunately there was no written agreement entered into with BRINCO or Churchill Falls Labrador Corporation covering what price this nrovince would have to pay for nower recaptured. We have discovered that uncer the trust deed entered into between Churchill Fa] ls Labraclor Corportation and bond purchasers who put un the money for the development, there was a cla11se that states that :my power recaptured cannot be sold to Newfoundland, 3178

June 27. 1972, Tape 1004. Pape l -- apb rhe wording is: ·rnless the terms of such sale are not materially less favourable to the company than the terms on which such power, if not so recpautred, would have been sold,under the power contract, to Hydro Ouehec." So that we. to use this power in NeI,foundl:md, Lnbrador. w:11] h:we to r,11y Churchill Falls Labrador Ccrnoration the saMe r,rice aR is naid bv Onebec Hvdro, to meet that condition in the trust deed. Thc1t, ' 1r. Chairman, is a verv unfortunate m;itter.

We were led to believe years a?o. when thjs vil.S heinp firstec1 mooted in the Hmrne, th11t Newfoundland was r0inr to have available to it rec:mtured nower at a nrice consi.derarly lower than what in fact it will be availnble to us for. There usecl to be nentioned one. one-ann-a-hlllf or two mills. This is not the c.ise, We are i:-oinf! to have to pay at lP?st as much as ()uehPc Hvdro nc1ys, im<l that will be in excess of three mills. There was no agreement in writinr coverinr that. I pointed out tCl thP HouRe. ~'r.

ChAirman, that in order tc, have this developr,ent start. there were a rreat l!'any concessions and exernntions r,iven to the comr,:mies that carried out construction. Exewntion fro!" the sales tax, exempti.on from the pasoline tax and the like, all of which ,had we receivPCl the monies throup:h those taxes, v>ould have meant tens of millions of dollars in our pocket.

The revenue that we are !"oinp: to receive from the Upper Churchill is not, the picture is not as bright as we were led to beH.eve in former titnes, but rather that we will not receive up to $15 million- that is the hest estimate now .. until the year 2002. Just to go into that point again, Mr. r:hairman. because it is a matter of some itnpC1rtance: I point out that there are three main sources of revenue for the rovernment of Newfoundland accruin~ from the development of the t'p'f'cr Churchill. First the horsepower royalty, which is fifty cents per horsepower ner vear.

Phen the total horsepo,;:er is 'Produced and exnorted, we would get up to some two and a half mi.J.lion - S2,nf\0,0fl() from horsepower royaltv. Then, in addition to 3179 r,

June 27, 1972, Tape 1004, Page 2 -- apb that, there is eight oercent of the pre-tax income of the corporation to be oaid to this province's rental. Eipht percent rental. In addition, there i.s our share of the corporation tax that would be paid by Churchill Falls Labrador Corporation. Of course there is a fourth, which would be the dividends that we will receive in the future from our portion we own in the Chruchill Falls Labrador Corporation. Our best estimate at the present time, J',!r.

Chairman, is that this year we might get $400,000 in horsepower royalty; $600,000 in rental. ( the ,ei!l'.ht percent) and nothing in income tax, for a total of $1 million. We anticip/J.te,that by 1985 we might receive ~2,600,000 that year in horsepower royalty, $3,100,000 from the eip:ht percent rental, $5,100.000 in the corporation tax, for a total of Sl0,800,000. That is actually 1986. We will not receive in excess of $10 million from the development until 1985. Our best p.uess, this is eliminatinp: dividends, is that by the year 2002 we may receive a total of $15 , 800,000 per year from these three sources.

Now. !-fr. Chairman. the situation is even - from further investigation and lookinp; into this matter, even poorer than that sounds, because under t.he tax equalization agreement, under which this province last year received $120 million. under the formula for that agreemen~ it is very evident that the revenue we received through the horsepower royalty. the revenue we received through the eight percent rental, we will lose an ~quivalent amount,at least,in tax-equalization.

So that if we get, say, $2 million,from those two sources, or four or five million in 1975, our tax equalization will decrease by that much, so that we will receive four or five million less tax-equalization from the Government of Canada. However, Mr. Chairman, that means that net we do not receive any additional revenue, except we replace tax-eoualization with these other amounts to which we are entitled from Churchill Falls. However, the position with respect to income tax is even more serious. I was pointing out to the House, Mr. Chairman, that in 1967, 3180

June 27, 1972 Tape No. 1005 NC - 1 the federal government_ they made the amendment in 1965 actually_ but in any event 1 by legislation of the ~overnment of Canada, the House of Commons of Canada, the Public Utilities Income Tax Transfer Act was passed.

Under that piece of legislation, the federal share of the corporation tax,which the Government of Canada receives from public utilities that are privately owned, private utilities such as Churchill Falls Labrador Corporatior, they agreed in that legislation to rebate ninety-five per cent of the corporation tax received by the Government of Canada from private 1 utilities to rebate that amount to the provinces.

Then1 followin~ the passinp. of that legislation, the past administration entered into an agreement with RRINCO or Churchill Falls, that of the ninety-five per cent share nf the federal corporation tax that this province had rebated to it from Ottawa, we would pay forty-seven and one~half per cent hack to Churchill Falls Labrador Corporation- we would rebate half of that back to them. Now, tfr.

Chairman, the result of that is this that not only will our net revenues not increase because of the revenues from the Upper Churchill, at least in the foreseeable future, but we are going to have a net loss because we will receive a rebate from the federal government of say ninety-five per cent of the corporation tax, federal corporation tax, that will reduce our tax equalization by an equivalent amount. We will then take half of that and pay it to Churchill Falls 1 as the previous administration agreed in 1967 1 So we will be out, we will have a net loss of revenue as a result.

Just to illustrate that; let us assume that in five years time or in some particular year, Churchill Falls Labrador Corporation has a taxable income of $2 million, present tax rates, the Federal Corporation Tax will be $800,000, the Provincial Tax, using the present rates 1 will he thirteen per cent 1 $260,000. Total Corporation Tax payable would be $1,060,000. Now the provincial share of the tax,of course,is ours anyway. 3181

June 27, 1972 Tape No. 1005 NC - 2 Under The Public Utilities Income Tax Transfer Act, ninety-five per cent of the federal tax, which was $800,000 in this example, would be rebated to Newfoundland,or $760,000. Our tax equalization payments from Ottawa will decrease by an equivalent amount, $760,000, so we gain nothing as far as revenue is concerned, One source has just replaced another.

We would then rebate,to RRINCO or Churchill Falls, one half of the amount received from the federal goveTnment or $380,00~ which would mean a loss then,as a result of all this,to our Treasury of $380,000 and no gain at all in revenue. That is just an illustration, assuming that the taxable income was $2 million some particular year and the federal tax was $800,000, The result of this, Mr.

Chairman, is that unless things are changed, either the tax equalization is changed or the agreement with Churchill Falls or BRINCO is changed\ as a result of the great development in the Upper Churchill, we will not have a net increase in revenue to this province, we will have a net decrease in the revenues ~ained by this province because of these agreements and the effect of tax equalization. Now I think this is a very serious matter for this province to consider. Now we cannot quarrel with the fact that tax equalization will - we lose some tax equalization when we gain revenue from ot1r provincial sources.

That is inevitable but 3182

June 27. 1972. Tape JOOf, Page I -- anb certainly. for this province to be put in a s:ltuation where the resu] t of the deveJomnent of the l'pner r'hurchill is that we Jose revenue, that the poverm.,ent lose revenue, is an increrlib] e, An ahsolutely incredible situation.

As to the dates of some of these ap:reements that the honourable l!'cmher for Phite Bay South asJ,ed ahout: the first llrinco aprcetnerit was Hay 20. l '153: the- lTppc-r r.hur~hi1 l lease- was entered into in l~Fl; Jer.is]ation nassed in 19~7 exell'pted Jlrinco or Churchill Falls from anv increas£' in rxistinf> taxes or liabilit)' for new taxes. and in 19f,7 the arranP:el!lent WAS entered :lnto where the aMount of ninPrv-five OC"rcent received fro-rn thf' roverrnnent of Cnnada,in fecler!'ll corpor;,tion tax. half of that would be rebated to Brinco.

Act no. (73) of igr,6-1967 sets forth a lease of the Lower Churchill ;ind authorizes execution nf that lease. That was nassed bv the House in 1966-196/. But that lease has never heen executerl ,md we are thrrefore free to ner.otiate other terms anrl cornHtions before we ~rant any lease on the Lower Churchill. fts was saic1. ~'r. rh1drman. in the Il11cl!!et Sneech. as this is one of the last great resources of this nrovince, we do not intrnd to barter it chean]y awl"v. J nointed out,when T. Pas snealdnr Friday, }'r.

Chairman. that this province mms 9. 2 of the shares of Church:l.11 Falls Labrador rornoration. ancl that I could see no va] id rrason whv we are :f_n 11 nosition of owninl! these sharps or what it would de> for us. We know that in the future soMetime, 0f course, it shou] c:1 result jn dividends. Rut the province has 775,998 shares of r.hurchill Falls La.hrader rnrnoration L:1nited and I h£"lieve that is 9.2 percent of the i.'<sued slv:ires. The 11'a1ority of the issued shares are held hy Brinco. These. shares were purchased from 19(,4 onwards.

The first were bought on M11y 4, 1964, 75,000 shares, at ten dollars, $750,()00. Furthe .r shares ~•ere bought that year, so that at the end of 19(,11 we had flf,,500 ;it a cost of $1,0CJS, 000. Then,in 1967, there were further shares bourht 3183 .-., .

June 27, 1972, Tape 1no6. Pape 2 -- anh and in 1967 a total amount of $4,564,nnn waR jnvested in shares of Churchill Falls Corporation. Then from July 2, 1968. to September 16, 1968. the balance of the shares were bour.ht, so that the total number of shares we then had at SepteMher 16, JQf,8 and still have,is 775 , 998 shares,whichhavecost the province $10,13CJ,970. That is the cost of this investment. $10,13~,970. The bulk of these shares were acc,uired hv the province throup,h a banlr. loan,on which of course we paid interest. That bank Joan was repaid on Novefl!ber 16, 1Q71'1with the interest.

So the orir.inal investment was !;10,139,970, We paid an interest in connection with buyin7 the shares, a total of ~2.020,000,up to the retirement of that loan in l<J70. Of course. thP rioney used to pay off these loans was borrowed hy the p.overnMent.1--ecause the government was borrowin!!' every year. He do not have any surplus funds to invest in this• So the cost of the funds we had ti.ed np in these shares is approximately another $2 million since that time.

To date. the acquisition of these shares has cost us anproxiMately $4 million in interest payments. ,s we hold them every year without any revenue coming in, the costs are increasiniz to us. Hardly,it seems to me. t-rr. Chairman, a sensible investment, Why, it was done,! do not know. However, that is the situation at the present time. It does not give us control of the corporation, it does not give us partial control, it does not e;ive us any special influence. We do have one director. Mr. Chairman, there is another thin!? that we discovered in connection with this whole situation,which is also unsatisfactory.

That is. Mr. Cha.irman, that down throu!(h 3184

June 27, 1972 Tape 1007 through the years while this pro_iect was under construction 1 we heard that Newfoundland w:>rkl!len and materials were to h11ve first preference r,n tlie r.llllrchill joh, the Upper Churchill.

When we receivecl a copy .J~f - tliis vear, a few months aJ!o, of the nower contract between ()uebec -+lvdro ~lectric Comnission and Churchill Falls Labrador Cornoration Lirnitec, this formal contract wcis sipned May 12, 1.91-0, when we receiver! a ccipv cif t}wt cnntract,we were amazed to discover that in articlr ('.'()'. clause 20.1 1 CFLCo will in the r,rocurement of materials,services and eouir,ment nnd in thr eriployment of personnel, extend or C/cl.use to he extended 1 bv its contractor, sub-contractors and agents 1 preference to riuehec lnhonr. nersonnel anrl services and to materials and ec,uin- ..,ent manufactured in riuehec.

Under sPction 20.3 a li,ison committee was to be set up in co-operation with Tlyclro-Quebec, to deal with these matters and to ensure - It states CFLCo will cause to be set ur, ,iri co--onerati.on with Hydro-fluebec, liason committees to dPal with mat tc'rs concern inf' the smmly of services. materials ~m,1 eqnir,rnent. Tn or'1er to ensure that the available nersonnel in ()11e!,ec will be 11tPi.zed in the nro1ect where nossible,CFLCo will avail itself of the services cif the Ouehec Provincial Pmnlovment flffices and if necessary is nreparec to cause emplovment offices to be estahlishec in nuebec.

This is the cnntract, M:r. Chainnan. tl1at was entered into. May 12, 1969 is the date of it. This is the contract thcit was sirncd :rnd operative on the Unner Churchill DevelonMent. ~r. Ch,'liTI'lan, and the clause in it proviLTes for preference to 0uehec labour, materials and equipment. Now, '-fr. r:hairman, perhans the deal could only go through if there was such a clause in it. Perhaps that was the situation but if that were the situation I think the people of this I province were entitled to he told that this was the situation and that there was such a clause in the r:ontract. I do not know who had 3185 ..

June 27, 1972 Tape 10()7 a copy of the contract in the Newfoundland Government before we took over 1 as we could not find any copy of it when we did take over and we were given it at our request after we assumed the government. But that is the clause that p.:overned the Upper Churchill with respect to emplovment, equipment, service.s and nersonnel and not a clause that Newfoundland workmen, materials and eauiprnent and so on would receive preference. MR • . ROHE(W.N.): Did the Newfoundland Government or any ap.:ency - JM - 2 MR.

CROSBIE: No, this is _iust between Quebec Hydro-Electric Commission and Churchill Falls Labrador Corporation Lil'lited. Of course a copy of that contract was available to tl1e people who were in authority here at the time and I am sure that the Premier had it. But :In any event that was the contract entered into and we had no power,as far as I know, to say 11 vea" or "nav" to what was in that contract, presumably, I do not know. We certainly had power in the beginning but at that stage I do not know where we were. So, Mr. Chairman, there are a number of unsatisfactory features to this situation.

Now the Government of Newfoundland have requested Churchill Falls, have informed theM that WC' want to recapture power from the Upper Churchill for the use of the Iron Ore Company at Labrador City,in their expansion at Labrador City. The amount of nower and so on, that i.R all a rnatter subject to negotiation.

I .iust want to say th a t the governnent informed Churchill Falls Labrador Cornoration that the p.overnment wish this power to be purchased by Newfoundland and Labrador Power Commission, as our agent.1 and they will arranp.e the resale of it and so on to the Iron Ore Company of Canada or to anyone else who needs this newer up in Lahradotj in addition to the Iron Ore Company of Canada. At the present time the only customer for additional power there is the Iron Ore Company of Canada 1 for their exnansion 1 but there will certainly be others and neeotiations have been 3186

.Tune> 27, 1972 1'aoe 1007 r:oin!' on an<l Are heinr: 1:winir on as to what nrice we can T'urchase this nower from r.hurchil] Falls Anc1 at what price we can sell it to thP. J',f -- 3 Tron nre Comoanv of Canad:-1 because, Mr. Chai nnan, we are rletermined to SN' th;it th;,t po\> er will not cost more to A customer in T,ahr.ador than it rloes to a ens tomer in (luehec. So the Newfound} and anrl Labrador Power Commission will be the sole nurch,rner of hvdro-nower producer.I in Lahrador, for sale or cons111:1ntion in T.!lhrador or on the Isl and of Newfoundland.

So in Churchill we are left with 700 _iobs 1 with no power. l.fR. CRrlSBIF. • 1-!ell on the Upner Churchill we will end uo with nerhaps 2nn iobs or uhatever the number workinr there peI"l'lanently,with the power sold tn 'luehec except for the 41JIJ, ono horsepor.1er we can recapture. A~f HO~/. __ MEMRER: ( Inaudible) . 1-fJl.

CROSBIE: Pell, thAt has to be determined, where the 20(' will come fro!".. '.·!i th the rir,ht to recanture 400, 00() horsepower ,which we cannot recapture at less than 0uebec-llydro pays,with the revenue that we arc iroinr: to r:et from the llpner Churchill of little importance to the nrovince, bec1rnse we are r-oinr.: to lose an equivalent amount in tax equalization hut 1 even worse, with the possibility of a deficit because of the transfer of the corporation tax under the Public Utilities Transfer Act of Canada and the a~reement of the previous government to rebate half of that to Churchill Falls Labrador Corporation_ Now the effect of all these concessions: As far as I am concerned µr.

ChairtT1an. the effect of all the concessions that the people of ~1ewfountllancl made, the Government of Newfoundland made, is to get power to 0nebec at a cheap rate, not oower for Newfoundland or Labrador at a cheap rate,, and the benefits that we are p,oinp to P,et from it are mininum. That is why I say, ~r. Chairman, that this ~overnment is 3187

June 27, 1972 Tape 1007 JM - 4 not prepared to 11:ive away the Lower Churchill on any terms that are equivalent to this. We are not going to do it. Why should we? We would be crazy to do it. What is the benefit to us,if we entered into a similar deal for the Lower Churchill? We are not g:oing to enter into any arranp-ement like this on the I.ower C~urchill. lie would be better of if the river ran on down to the sea forever than to enter into some arrangement like this on the Lower Churchill.

That is whv there has to be other negotiations on the Lower Churchill and hopefully they will be more beneficial to this province. These have not started yet, Mr. Chairman.

But some of the thinps that we will be watching in those negotiations are the financial clauses, the effect of the tax erinalization and the effect of the transfer of fnnds unrler the Public Utilities Transfer Act of Canarla , the fact that we want certain measures taken to protect the arPa of Goose llay-Hapnv Valley and to see that po\>rer p;ets to that area frm,i the Lower Churchill, recapture o~ power. lf this is to po ahead,there will have to he better nrovision for the recapture of nower and an agree~ent on what price, We have to provide for larger blocks of power to be recaptured, hopefully for use :i.n Labrador if not on the Island of Newfoundland, and as to how this should be done anc1 a whole host of other features.

Because if we do not do that 1 then this resource is beinp piven ;iway by this nrovincc for nothinp.; 1 ex~ept iobs for people in construction whjle the pro .1ect is under construction for two or three yec>rs. That is what happened on the Up.per Churchill and what we are detennined will not hapnen on the Lower Churchill. I think that is probablv enongh on that for. the mol!lent. 1t is a p:reat disappointment to this administration and I am sure it will be a great disappointment to most ~ewfoundlanders to realize what little benefit we are ii:oinp: to have from the Upper Churchill development. 3188

June 27, 1972 Taoe 1007 Now iust one or two other general words before I sit down, Mr. Chairman. l have a speci~l assistant in the Department of EconoMic Develoument. Yes, an excellent man . AN HON. MEMBER· (Inamlible). MR. CROSJHE : One. Mr. Pe.ter Gardner. Unfortunately, 3189 J!-f - 5

June 27, 1972 Tape No. 1008 NC - 1 MP.. CROSBIE: --·----- :<-'r, Chnirman, he wants to go back to his own business and private life in another few days. T. think he wimts to go 11t the end of June. I am trying to persuade hlm to stay a little longer. His salary, :1r. r.hairman is $1 a year, if demanr!ed, He has not demanded it. Ile has done . an exce 1 lent job. If we could find another eight or ten Peter Gardners and get them it1 the government service in this province, they would be an incalculable help to thi.s province, Mr, Chairman.

A smart, intPlli~ent • gentleman with initiative, brains, analytical ability.Le bas been a tower of strength. l just wanted to say that today to put it on the record, that I really appreciate h-i!J having ~iven five months of his time to this province and the Department of Economic Development in particular and regret the fact that we cannot p,et him t Ll stay on lonp;er. We are so darnecl husv clearinp, up the foul messes that were left behind by the hon. gentleman's ;'.overnment 1 in Economic nevelopment, that we will co!'1e to the rest of that later. I could list out now twelve.

Every time you turn around you discover another monstrous mess that · ras left, in the field of Econo!l'ic P.evelopment, by the hon. r,entleman 's ar!minlstration opposite. You wi.11 hear about the new industries, When the ne1•• industries are si{".ned on the dotted line and delivered, you will hear about the new industries. Yo_u will not hear any announcements from us of great new industries that never materialize or great new industries that are nothinr; hut a crus.hing burden on this province.

When you hear us announcing an industry 1you can he sure it is goinr ahead (1) and (2) you can be sure it is goinp, to be of some benefit, not something that is an albatrofls around our necks, like so many of the monuments left by the hon. gentleman's collear;ues when they were in government. ~-~. Nf:_.ARY: Got any in mind now? Could the hon. minister tell us, because the people who are unemployed would like to know. 3190

June> 2 J, 1972 Tnpe "No. 1-008 '.lC - 2 'Hl.. _ _f~()SBI~ The people that nre unemployed have a lot to thank t~,e hon. g,,ntleman 's !',OVf'rnment f o r. After twenty-three years they left ~Jith sixteen or ei ghtt'.en per cent unemployment. That is a tremendous record, So do not start badgeriup; this government.

If we were in for twenty-three years, I can assure you we would not be behind elghtePn per cent unemployed. ' 1'l. '.'![ ARY: lnandible. ·· --•-- - ''_P::.__C_R'.1?BIE: .,,.r. r.hairman, f c1m not ~oinr. to pay much attention to t~P. mer.;her for Rell ls I and hE• cause these are serious matters we wanted to discuss and you cannot dbcuss anything seriously with that ~on. p;Pntleman. It is difficult to speak seriously to a vacuum. "I(. Nl:M:Y: Where are the johs? '[JI. C"lOSBIE: Lis Len to him crPaking there. I know one gentl e man who 1-1 iJ 1 not have a job after the next elPction. Now, ''!r..

Chairman, the oil refinery project~ Hono1.:rable mewbers will find some information attached to the Budget on the oil refinery project. They would have never found it if the I.iber RI Administration were in power. But attached as a supplement tn the 13udget Speech was a

section on the oil refinery whic'h 1, dngs !:ronourable members up to dat~ pretty well on what the situation is there, and so it ls hardly necessary for me to repeat it now.

The facts are, of course 1 that the Sl60 million figure that was mentioned by the past Liberal Administration as being the cost of that pr.ojec~was not correct, was not true in any sense at all, was known to be untrue 1 and that the actual cost is $160 million plus the federal wharf at Come By Chance, plus another $16 odd million as outlined in that supplement 1 which will have to be found for the project,and we say it has to be found and arranged for by Newfoundland Refinlng. So because that is in the supplement, it is not necessary to go into that in detail today, Mr. Chairman. 3191 f,'

June 27, 1972 Tape No. 1008 NC - 3 There is a meeting tomorrow, It is being held between the government, representatives of Newfoundland Refining, representatives of Procon, the contractors and of Jacobs Engineering, who are the consulting engineers for the government 1 to review the progress to date on the whole situation with respect to the ref:inery project. On the pollution situation, there have been several meetings held in June on the requirements of the Government of Canada with respect to effluent disposal from the oil refinery.

In fact their last ·meeting was held last week, They have been attended by representatives of the government, Jacobs Engineering, Procon, Newfoundland Refining and the Government of Canada and the Clean Air Water and Soil Authority. I understand that the situation there is that the necessary steps to be taken are agreed,on the effluent control facilities, That this now appears to be agreed between all the parties and what is necessary next is that Newfoundland Refining Company confirm this agreement and submit revised plans and specifications of the oil refinery facilties,within one month. I believe that Mr.

Davis, who is the federal minister responsible, will be making some comment or statement to that effect in the House of Commons today. So that there will be one month for these revised plans and specifications to be prepared and presented to the federal govern~ent for their approval, If that w~re not to be done, then the federal minister responsible would recommend that an Order­ in-Council be issued to stop construction. But the point is that now it is agreed between all these parties on what is required to be done.

That is the result of these two or three meetinr,s held this month at our urging and arranged by us and that now the follow-up is necessary, for Newfoundland Refining to present revised plans embodying the changes that are necessary, 3192

June 27, 1972 Tape No. 1008 NC - 4 in accordance with the dictates of the federal government,in effluent control, I do not know if there is much more to be said on the refinery at this particular time, except that construction is, I think it was suppoRed to be completed at the end of December, 1972 and it will not be now until well on into 1973. But all of these matters are to be reviewed tomorrow,so I cannot give the latest up-to-date information on that. But as I say, the basic information on the oil refinery project is in the special supplement to the Budget Speech. On the linerboard mill A_.N~.

MEMBER: Clean bill of health. MR. CROSBIE: No, it is not a clean bill of health. It reveals subterfup,e and deceit to the public, because all of these extra items and additional items 1 for which money has to be found, were known by the hon. gentleman. The hon, gentleman did not know about them. I am sure he did not but the ministers opposite,'1n the government, knew about them and pretended ••• >.ffi.. NEARY: The hon. Minister of Justice knows about it.

MR, CROSBIE: It is too bad the honourable gentleman will not be with us next year, when that report comes in and he carries out his word, We will all miss him, The exact shareholding:Just before I carry on with the linerboard mill, shares held in Churchill Falls Labrador Corporation is that BRINCO has fifty-seven per cent, Quebec Hydro - 34.2 per cent and Newfoundland - 8.8 per cent. That is a total of 8,759,999 issued shares of which we have 775,998 (8,8 per cent), Quebec Hydro,! guess that is, 34.2 per cent and BRINCO 57 per cent, which of course is effective control. On the linerboard mill, Mr.

Chairman, since the legislation was passed by the House 1 authorizing the government's purchase and the 3193

June 27, 1972 Tape No. 1008 NC - 5 MR. CROSBIE: control of that project from CanadiRn Javelin, work has proceeding at pace. The construction, we are still told that it should be completed r.nnAtruction in October and that the start.up should commence in October. The joint project consultants of the government,. that is Kate, Peat, Marwick and Company and Donald D.

Dick 1 have been undertaking the necessary work in connecti9n with surveying_ th~ warkets, recruitment of personnel, preparing new forecasts of what money is going to be required, 'cash flow, the work of setting up accounting systems and all of the other one thousand and one things that must be done in connection with such a p~oject. We have also reviewed the whole project with the prime contractor, Sir Robert MacAlpine and Sons Limited,and the construction part of it is proceeding smoothly to date. The whole project is to be reviewed again this week 1 by the government 1 with our joint consultants.

The meeting would take most of Friday,unless we have to be in the House of Assembly in the afternoon. The consultants hRve hired some twelve or fourteen personnel, at the superintendents level, for the lincrboard mill, recovery room superintendent and people of that level. The top management has not yet been recruited. A report will he made on that to•the government and the whole project reviewed in detail on Fridll.y, The first 319-1

June 27, 1972 Tape 1009 (afternoon) PK - 1 MR. CROSBIE: of $2.5 million was made to Canadian Javelin Limited and their associated companies, Messrs Peat, Marwick and Mitchell and Compan)'Jare doing a complete audit of all activities since November 21, 1969. The remaining balance of $2.5 million is to be paid six months from the appropriate date in May, subject to any deductions we feel should he made1 or arbitration if we disagree. That work is all proceeding. Our consultants have certainly been giving it their all and working hard on the project. There is a great deal of interest being shown Mr.

Chairman, I can say, by other companies. Dozens of companies prominent and not so prominent have wanted to interest themselves in the management contract or in marketing of product and in varies ways like that. No such agreements have been entered into to dat~, as the government's decision 1 to date in any even~ is to try to bring it through and start up and operate it as a crown corporation ourselves.

If a good and advantageous arrangement could he entered into with someone, the government would certainly consider it - but there have been none yet, but a great deal of interest by some of the largest and most prominent companies in the field. The mill has a lot of problems to contend with,of course. Mr. Chairman, its capital costs are excessively too high. Its major problem is the cost of getting the raw material to the mill. The cost of wood is the fundamental problem o:li the linerboard mill,and whether those costs can be brought down.

We are very pleased with the way in which Forestal Engineering have taken over~ It is Forestal of Vancouver• They are supplying the management for the logging operation of Labrador. I think they are doing an excellent job• The manager was in to see me several days agc,. He is pleased with the way it is coming along. They have a lot of problems there but they are confident that they can get 200\000 cords out this year, The first vessel is there now 1I believe. The honourable gentleman for Lahrador North will know. Vancouver Forests, I think is the name. 3195

June 27, 1972 Tape 1009 (afternoon) PK - 2 MR. CROSBIE: There are three 30,000 ton vessels being chartered this year from Jebsens, a Norwegian shipping company,They are going to provide the transportation of the wood for this season. The first vessel is there now, the second one is to come,on charter, I believe next week. They should be good vessels for this movement but,of course, we will have to see how things go this season, · There are two problems in dredging. ( 1) at Goose Bay. the harbour next to the dock needs to be dredged to thirty feet depth. The work has not started yet 1 I believe - AN HON.

MEMBER: Are these boats manned by Newfoundland men? MR, CROSBIE: No, no, they are manned by Norwegians. They are not manned by Newfoundland men. They were not going to be when the honourable gentleman's government were in, they are not going to be manned by Newfoundlanders now. This is a Norwegian company, British flagged vessels. They can only coast - AN HON. MEMRER: .•••• Hong Kong. MR, CROSBIE: Right,Hong Kong crew 1 is it? They can only coast in Canada if they are either Canadian registry or United Kingdom registry.

If they can get our wood down at a decent cost and get the wood down, I do not care if they are cniwed by Martians. There is a problem at Goose Bay. The harbour next to the dock must lie dredged thirty fe~t or they cannot take a full load of wood next to the dock; which will result in a great deal of extra cost to us, We are·on to-the Department of Transport. I have not been talking to the minister or his assistant today, but I think they are doing all they can to get this done as quickly as possible.

There is a second problem at Stephenville Harbour that some dredging has to be done there before these vessels can get properly into Stephenville Harbour, There is a dog-leg that has to be removed and there are some buoys, they will have to rearrange the buoy system there, So there is some dredging work required in Stephenville Harbour for these vessels to get into Stephenville Harbour to discharge this 3196

June 27, 1972 Tape 1009 (afternoon) PK - 3 MR. CROSBIE: wood. That is even more pressing and urgent than at Goose Bay Harbour. But I understand the Department of Transport are trying to expedite that now as much as they can. During this season shipping operations, the whole logging operation of Labrador has been studied and shipping methods,so that recommendations can be made this fall as to how it should best be done next year or the year after or in the future.

There is a lot of planning which have tote done in the woods operation up there,thRt has not been done in the past I a lot of road b,uilding that has to be done to take care of the wood that you are going to get next year and the year after and so on. They have to make plans now to get wood across the river, I do not beliew · there has been any work done yet on the other side of the river. That ha~ to be proceeded with no,. But we are very pleased from what we can see to date of the way Foresta! has taken hold. They have provided the top management there, I believe three men altogether, it might be five men.

They are now in control of logging operation in Labrador and as far as we can see they are doing a very admirable job and we have high hopes that the high wood costs,-which we are going to have inevitably this year, can be brought down to a satisfact6ry level in the next three or four years, So that is just a brief, the honourable p,entleman opposite may have some other questions but that is just a brief review of the present suitation on the linerboard mill. MR. H. N. ROWE: i1r.

Chairman, I thank the honourable minister for painting with a fairly broad brush the situation regarding some of the industrial development in the province. He did not mention, he mentioned to me privately, but he did not mention puhlicly nor in the House what he was going to do about NJDC,under which I think the vote comes for the Burgeo Fish Plant, Is that right? To take over the Burgeo Fish Plant: Apparently the minister does not want to discuss that in these 3197

June 27, 1972 Tape 1009 (afternoon) PK - 4 MR. ROWE , W.N . estimates but would rabher discuss it in the Department of Fisheries. Well, we are quite agreeable to that, Sir, as long as that is permitted when the salary for the ~iinister of Fisheries, I guees,is being talked about or there may be SOT-le other heading where we can talk about this particular matter under the Department of Fisheries as long as the Chairman of Committees is well aware of that, so that there is no problem with regard to rules of order or being ruled out of order.

I would also assume that the honourahle minister will make every effort to he in attendance himself when the Department of Fisheries is being discussed, since it does come under his department, after all. MR. CROSHIE: I would not miss it. MR. ROWE, W.N. I am glad about that , Mr. Chairman, I would not wish frr him to miss it either, that partlcular deal. The minister mentioned the Newfoundland Development Corporation, Sir, which must be in the slings now for ~hat, two years? A year and a-half or two years? MR. CROSHIE: MR. ROWE. W.N. That is right, one and a-half years.Is that right?

One and a-half years the Newfoundland Development Corporation Ap:reement has been in the drafting stage and the minister mentioned that it is likely it will be signed on Friday of this week, I do not know what the delay has been. I do not in any way blame the minister for it. We had the same problem when we were negotiating the agreement with Ottawa. I think it has reached eighteen drafts or something when we left office. I do not know what the problem with Ottawa was on it.

I hope it is not, I am not saying this, hut I hope that the delay is not caused by the fact that the minister has in any way caused either himself or his department to neglect this particular agreement in order to pursue other matters because, in my estimation, the Development Corporation Agreement is perhaps the most important thing 3198

.Tune 27. 1972 Tape 1009 (afternoon) PK - 5 MR~_ ROWE, W.N. that the minister co'tlld be doing now, It pursues and follows along the announced Progressive Conservative Government policy of trying to help out with small industries. This Development Corporation should, •if used properly, be a great help in developing small industries in this province. It is a concept, Sir, of which I. for one, and my colleagues here can be very proud as far as its operations in this province are concerned.

It is not a new concept in Canada at all.A numher of other provinces had had these similar development corporations, some of them with fairly disasterous results I might say, In the case of Nova Scotia and in the case of Manitoba, the development corporation has not been the panacea or the answer to everybodys prayers. But I think if it is used properly, this is a good idea, This development corporation initiated by the former administration, Mr. Nolan was then the Minister of Economic Development,and I, as Minister of Community and Social Development,had some part to play in getting this thing off the ground.

I hope it is not very long now before the thing can be signed, sealed and delivered, One problem that came up when we were negotiating it was whether there should be a strict criterion, a strict yardstick in respect to the number of jobs that would be created by any given grant of money or loan of money, There was some suggestion that the grant or loan would be tied very rigidly to the number of jobs being created and on the other side of the coin 1there was an argument that that should· not be the case but the grant should be made, not irrespective of the number of jobs created but not so tightly tied to that.

I was wondering if this were the problem which has caused the delay in the present minister's experience or not? Also, Mr. Chairman, while lauding his attempts in the development corporation, but decrying the delay in that situation, 3199 , .

June 27, 1972. Tane J.010, Par:e 1 -- apb !,,IJ!, W.N.ROHE· I was interested to hear from the Premier, earlier, ---- .. --·- - that a joint committee had been set uo consistinr of most of the senior officials of the povernment, top,ether with a number of cabinet 111inisters,to look into the whole or'.':ani.zation of r:overnment, with narticular reference,I believe, to the planninp of povern111ent activities. I reme1111'er again, that the Deputy 1-finister of Community and Social Development,on my instructions 1 (the minister is not here today) had drafted up, based on his experience, a

schedule or scheme of how the povernment should operate, how it should be structured, how it should function.

What was in our minds at that time was the settinr up of a planning committee, a planninr board of the poverrnne .nt which would be not unlike the treasury board of the province, in that it would consist of a numher of the so-called first rank TTiinisters, A board with its own secretariat, its own civil servants(so to speak. that would exist on a plane above the line departments the ordinary departments of government. so that orders could be issued hv that board to varjous departments in order to get them to pursue their activities in various directions, just as the treasury board operates on a plane.

It is a committee of cabinet, it operates on a plane above the other departments of government, above the Department of Finance, and issues instructions to departments. nne of the problens that the Department of Community and Social Development had, when ne11:otiatin!! and implementing the DREE progranm,e in the province, was the fact that it was a line department, an ordinary department of povernment,and it is sometimes extremely difficult for another line department,which is not a committee of cabinet or does not represent the cabinet, to get the necessary information or the necessary output from the other departments of i:tovernrnent.

We found this to be a bit of a problem. Also, in the implementation of various plans and nrocedures and programmes laid down by the DREF. programme, we found it somewhat difficult to goad or pet 3200

June 27, 1972, Time 1010, Pa.l!e 2 -- apb the other departments to implement some of the pro~rammes, because we were not in a position, Sir, to be able to force them, order them or instruct them to take certain measures, I think some sort of a planninp. board should be set up which functions as a committee of cabinet. Undoubtedly, something like this will be recommended to the rovernment.

A committee of c.!'binet which comes up with nlans and proµrammes of expenditure is then confronted by the treasury board which decides for cabinet or recommends to cabinet whether such an expenditure should be made or can be made. Then the two together _, working together, should be able to come up with some reasonably streamlined and efficient plans of development for. the province. I hope that this is the direction the government is movin~ in. Now.

Sir, the honourable l"'inister has indicated that he does not want particula.rly to dehate today the Burgeo Fish Plant situation, where it has been announced ~2.6 million of public funds have ap1-,arentlv been pl'lid for that complex. I am not exactly sure what the ~oney has been spent on. but over two and a-half million dollars has been paid,apparently to the former owners.

I do not propose, in keeping with our ar,reement,to debate the Burgeo situation at this point, Sir" but I cannot resist saying to the honourable minister or askin .1' the honourable minister this ouestion: If three or four years ap:o he resigned from the government and walked across the floor on an issue concerning S5 million, concerning the Come by Chance Refinery, perhaps we can persuade the honourable minister - perhaps since it is only two and a-half mjllions this time, maybe we can persuade the honourable minister to come half way across the House and nut his seat ripht tbRre in the middle, '~r. C:hRirman.

Then perhaps, if there is another two :md a-h;c,lf million dollar lash out of public funds, then he can come all the way across ap:ain. ~'aybe the minister will have some comment on that when we ore dehating the Burgeo issue, He think thRt if he went across 3201 . -.- , .

June 27, 1972 , Tape 1010, Page 3 -- apb for $5 million, then he should come half way across for two and a half million dollars. I think that is only fair. I think my colleagues will a~ree with that. Because, if the $5 million 1which was subsequently subsumed under the total capital financing of the Come by Chance Refinery, was a scandalous outlay of public funds, ~r. Chairman, well then this two and a-half million dollars is certainly half as scandalous and would merit a walk of about eight or ten steps to the middle of the floor. The honourable minister could rea.lly be the boss of the House as he wants to he.

Holdinp court there in the middle of the chamber, lashing it out to both sides of the House. I think he would be very ha!)py in that situation., Sir. I will be interested to hear some cotnment on that when we come to debate the Burgeo expenditure of publ i c funds. I was concerned to hear the honourable minister say that it will not be long now before he is roing to be removed or transferred from the Department of Economic Development and that all his talents will be used in the Department of t'inance.

I was concerned to hear that, because I think that the honourable minister may well be the type of person who should be in Economj_c Development at the present time. Obviouslv, the policy of the p.:overnment is one of tir,htening up, of rigid or even stringent measures to be taken, not only in respect of persons who have alreadv received public loans - loans of nublic money or grants of public money_ but in respect of future ones.

Perhaps his method and manner of doing thinrs is what is needed at the present time in the province• his idea of sort of not lashing it out unless there is certainly more than ~ood reason for doing so~ that there has to be an excellent reason for doing so.Perhaps he is the type of person who should be in the Economic Development Portfolio. I am sorry to see him go and I will be interested in seeing who is goin!? to take his place. I was very disappointed and concerned the other day, when the 3'202

June 27, 1~72, Tape 101n, Pap,e 4 --· aph Premier announced that he had set un this high-powered,first-class ministry of planninp. consistinp of about three or four of the top­ class, first-class cabinet ministers of the povernrnent, and that he himself was not included in it. I thoupht that th;,t was a p:ratuitous slap in the face to the honourable minister. lie is the !!'.an who has <lone most nf the rlog work and leJ? work since the administration has ta.ken over.

He obviously has a treme .ndous knowled!!e of the b;,.ckpround of industrial development in the nrovince and a lot nf experience which could he used in the future. I thought that the honourable Premier had perhaps p:one a little bit too far there. He should not have r,iven the ~finister of Finance, the ]'Ainister of F.conomic Ilevelor,ment, such a gratuitous slap in the face, by not puttinp him on that. MR. CRf'ISBIE: It was not fair. '-IP. W.N.ROl-!F.· I did not think it was fair at all, anrl I .<1.m irlad to SN' that the minister ap-rees entirely.

He ap:rees with it entire]y. ~•ayhe this is what ] ed to the huff-huff le in cabinet which the honourable Le;,.der of the Opposition referred to, when the Premier and the Minister of Finance were apparentlv at one another's throats. Thev had to be pulled off by their respective colleapues. r-1R. CROSBIE· You should have seen the wreck of the furniture. -- ------ - }fR. ROWE: I can imaidne, }fr. Chairman.

It is lucky that the honourable T"inister and the honourable Premier have about equal numbers of supporters in the cabinet, so that they could get to~ether and pull each other apart so that no damap:e was done to others. ThP.re are no visible marks anyway 1 as a result of that set-to. NP. CROSBIE· MR. ROWE: He had me twice, but I am wiry. '!'he honourable minister is wiry. Wily perhaps, not wiry,I would suhmit, Sir.

In any event, I was disappointed and I felt sad for the minister to see him ~ettinr, that kind of treatment at the hands of the Premier, and now to see that he is going to be relieved of his Economic Development Portfolio. 3203 ,-.,

June 27, 1972, Tape 1010 , Page 5 -- apb I must say that I never did agree with the minister having both portfolios of Finance and Economic DevPlopment. One concerns the onward progressive development of the provtnce 'Ind the other sort of has a tendency to put the hrakes on all the development and spending in the province. I found it difficult to reconcile in my own mind how the honourable minister could objectively attend to both thesf' portfolios. I would have liked to see him stay in Economic Development,to tell you the truth, Sir, and see somebody else take over the l"in.istry of Finance.

But of course, the Premier in his wisdom decided not to do thnt. He h~s decided to flick the honourable minister out of Economic Development and to keep him in hie corner down on the third floor where he cannot do any dama!!e, where he is not roing to be out in the front negotiating with industrialists and this sort of thinr. He is just goinr to be down there on the third floor holdinr court in Treasury Board, puttinp the brakes on spending and formulating policies for cutting hack on exnenditurej>ack in his little hole down there, Sir, I must say, I would rather see him in Economic Development myself.

The honourable minister used most of his time in discussing his estimates, the minister ' s salary part of his estimates, in talking about the Churchill Falls situation. Now, Sir, I suppose I could try to score some cheap partisan points by 3204

June 'l7. 1972 Tape 1011 referrinr to the fact that cluring the crucial period of this Churchill Falls develonment he and the ~inister of Justice were in fact in the r,overnment of the Province of Newfoundland. Jlut havinr said that and I had saicl it for the record, havin~ said that T do not intend to pursue it ,my further hecause I do realize that sometimes it is clHficult for everv T'linister in everv cabinet to have first hand knnwled~e of evervthin~ that is p.;oinp: on around hill'.

At the time the J11inister J thjnk was Minister of Municipal Affairs and the other minister was Minister of .Justice and it is difficult for them to keep their hand on all the nulse8 of activity in any one p.;overnment. He himself. the :t-1inister of Economic Devel onment and Finance, he hjmself does not seem to be loath or reluctant to lash out and use the collective responsibility of cahinet in respect of any collE'ar:ues over here who might have been in the cabinet but who might not have had first hand knowledge of what was f!Oing on in anv narticular develonlT'ent.

But l do not chose to use that kind of argument at aJl today. Sir. I will say that in 1966 and 1967 that either the honourable minister and in ]~~~,for that matter, either the honourable minister did not know what was !!oin!! on in respect of the Churchill Falls development, these aspects which he himself has chosen to hold up to public scrutiny as being not necessarily good or beneficial to the province, I would say that he either did not know personally,as a minister,anythinP. about them or that by the time he got to them the die was cast and there was verv little thnt could be done ahout it.

I would submit that the samE' obtains with other ministers in the government or of anv government or of any cabinet which might have existed at anv tiJ11e in the province's history. But, Sir, he has raisecl one or two things which arE' of' a serious nature and which should have some debate about them, T think. He 3205 J}1 - 1 .-iii.•' r:

.June 27. 1972 Tape .1011 .JN - 2 mentions th:it as a result of this development any income to the province will be More than done awav with hy the fact that the equali7.ation grant will he decreased hv that amount. Well, of course that is hacl.

Sir, in terms of revenue to the province but T would submit that the honourable minister is not seriously arguinp:, he cannot be seriously arpuinl' that we in this province should cease and desist in our econot:"ic de'Telopment of the nrovince merelv because if there is revenue froM our own in<lustri.es, cominr to our governl'lent,that this amount will he cut out of the eQualization payments. It is a little like arguinr,and lam sure the minister would not agrue this.

It is a little like arl!iiinr that a l'lan on welfare, who has a larpe farr,ily anc1 therefore gets a great deal of short- term socia] assistance,shoul<l not get off welfare and get himself a iob of work because his material henef:I t, his revenue or income that he woul<l receive will not J:,e any pre;iter than or not substantially r.reater than he woulr. r.et on welfare.

Tf we takl~ that attitude, Sir, anrl worse a?ain if the Provinces of C,madr1, the so-called have-not Provinces of Canarla t,ike thnt attit11rle,well ther, there will never he :my !)rogress in the country of Canada anrl there will be no eriualizat1on rrants and no eQnalization revenues with which the noorer provinces, the hPve-not nrovinces can get these revenues that thev presentlv <lo get. 1'low on thP question that he has mentioned, the question that not only are we not pettinp any henefit from the hydro-development in Churchill Falls but that we are actuallv goinr, to suffer a tangible loss because of the deal made by the Government of Canada, the Government of ~ewfo11ndlanrl and IlRINCO, wherebv the rebate of taxation D;oes back to CFLCo, the Churchill Falls Corporation, I would say to him that I am morally certain although I was not in on the deal but he waF a minister at the time, in 1967, when the Government of Canada agreed 3206

June 27, 1972 Taoe 1011 to do this, T was not around at the t1me but I al'l me raJ ly cert11in that the Government of C:;mada did not intend and certainlv the Government of ~lewfnundlancl dicl not intend to nenalize this rovernment when that rebate situation was first formulate<" and then imolemented in respect of hvdro-clevelopment and public utilities everywhere in the province and across r.anada.

If I reme~ber the second-hand knowledp;e T have of it correctly, Sir. the deal was m/lde by the Federal Governr.,ent,snecifically to induce ilnd to heln and to f;i_ci]it11te the Churchill Falls Pydro-nevelopment, And T think that they were persuaded by the governl'lent here and bv the BRINCO neople and the C'PLCo people that unless some such a rebate could he 11rranrecl,then they would not find it feasjble to r:o ahead with the hvrlro-electrical develonment there. I am sure> that the Government of Canada in no way intended to penalize this province.

It is because of that, Sir, that I would sup.:gest, if I a!'1 not beinr too presunntuous (r am sure the honourable minister is p;oinr- to do it :mywav} T woulcl Sttf!rest that the Government of r::anada, if they were hrourht into cliscnssions on this rnatter,the Government of Canada. I think, would he more than willinr to exempt from the eoualization deductions the amo11nt which is paid by this province to C:FLCo,nnr'er that rebate agreement affecting nublic utilities. If they do not, Sir.

I think they certainly should and I believe that powerful arruments can he nresented hy this p:overnment to make sure that this orovince does not in fact suffer that material and financial loss becnuse of this ap.reeMent entered into to facilitate the develooment of a J:'re11t hydro-electric complex which is to the henefit of the whcd e countrv of r.anada and not only to Newfoundland, perhaps more benPfit to Canada than it js to ~ewfoundland itself. So I would sup:r-est that these measures be taken,and I am sure that the Government of Canada will see fit to help us out in that 3207 JM •· 3 ,-.,

June 27, 1972 Tape 1011 particular aspect of the problem. Now, Sir, 1 would like to ask a couple of questions of the ~finister of Economic Development, He will not have the answers here but he can get thern I think from his officials, concerning the JM - 4 Churchill Falls development. The questions wDuld center around the amount of wages which have been amt will be paid durinp. the construction phase of the Chur.chill Falls Hydro Project.

I think that there was once a fir,ure of $170. million wage bill.That seems to be low when you are talkin~ about a billion dollar enterprise but I heard that fipure mentioned once. Perhaps this has been revised 1mwards or downwards for that matter, 1he minister can r,ive us some information on that.

Also I would be p:rateful if he could p.:et his officials to work out and they have a formulae for this, if they would work out how much of that Wai!e bill finds its w<1y, has found its way, will find its way hack to the treasury of this province so that taxation, income tax, sales taxes, all kinds of revenue-gathering systems and schemes which we have in the r,over.nment,to see how much has in fact come back to the Government of Newfoundland Treasury. to see how much benefit the Government of t-Jewfoundland has in fact received from that short-tenn measure of construction in the hydro-electric development.

Also the minister mipht be able to snpplv to the House with tie nuMber of oermanent emnloyees,which he stated is about 200 in Churchill Fall.s,and_what, ns,;ain using the same formula, is likely to be the income.,,hack to the province,by var.ious tax methods, fees and what not, liquor and beer profit and this sort nf thinr, how much is likely to come hack to the province in respect of those 200 emµloyees which are likely to be there for the duration of the project? Sir, I would also like the honourable minister to clarify a certain issue for me.

He has more or less condemned by inference the hydro-electrical development at Churchill Falls in Labrador because it has not, he says, 3208

.1,me 27. 197?. T11pe 101J. "rou i-lit anv hencfit ro the 'ProvincE' of "lewfo un cll ancl :md Lahrador. ~!ow i. f WE' can clE'11 r un this ohvir>us misunc1E'r atant.\inr. conc-crnint. t he rebate to n1ihl i.c nti.litiN, 1md iust roncentrate on the more s uhst;intive iss••<>s . T woul<l lih• the minister to (1iv1.1lge to this House, ~ither now nr when he rets a chanc e to when he is r.oi n.~ down throu!!h the esti'llatf's , what he would h11ve done cli.ff.erP ntly with rer.arc! to the Churchi ll f.'ell s development. the Upper Ch11r chUl.

What some of his thinki nn i s , I know he runs the da nttc r of ne1>oti atinit in public here. hut what sorne of his think inst is i,s to the devPlo1nrent of the T,ower Churc hill , How he thi nks we nre r.o i nR: to pet more benefit to t he nrovi.ncP. from the 3209 .TM - 5

June 27, 1972 Tape 1012 (afternoon> PK - 1 MR. ROWE , W.N. development of the Lower Churchil1 1 if that goes ahead, Also I would like to hear some thinking as to how we are going to get any benefit to this province in any kind of economic development or industrial development in this province, if all it does is that it tales away the revenues which we get from these industries,merely takes away the amount which we would get under equalization.

Does he think it is worth it in this province to risk public capital,for example, at all 1 to try to industrialize or to try and stimulate economic developmentl Is it worth it? Should we merely not keep our money here and use it' for public works of various kinds, roads municipal services, schools and that sort of thing? Should we not say that we will not spend one more cent of public money in order to develop economically and industrially this province? Or whether he does think it is worth it, even though there may not he any short-term benefit to the province?

Also he might be able to tell the House whether any progress has been made to date or whether he thinks any progress will be made in try to change the equalization formula which affects this province so that perhaps some new deal can be made with Ottawa whereby they will delay somewhat the cutting down of the equalization payments made to the province by,say . until five years after a company has been established in the province and commences to pay taxes or pay revenues into the Newfoundland and Labrador Treasury, maybe something like thi .s?

Otherwise , Sir, the only incentive that we have in this province for industrial development would seem to be one of pride and standin g on our own two feet, and certainly that is a very understandable incentive for any government to have. Rut there is no financial incentive, as the situation stands at present, no incentive at all for this government or any have not government in Canada to put up good,hard, hard-earned public money for industrialization. So what we do in effect,if we do put up public 3210

June 27. 1972 Tape 1012 (afternoon) PK - 2 ~'R. ROWE, W,N. money for industrialization we take the risk of losing the public money if the industry does not fJourish, does not go ahead. There is nothing balanced against that risk at all, There is no hope of increased revenues as a result of the industry going ahead,so that we have not earned one extra nickel for this province, at least in the short run. By the"short run" I mean ten or twenty years. No not one extra nickel has been earned in extra revenue for the province as a result of our public risk, a risk of public money havinr been taken.

I would like to hear the minister on that.

I think it is a very important, a very important aspect of industrial development 1 not only in Newfoundland but in the other provinces which get help from Ottawa for current account spending, get revenue from Ottawa under the eoualization prop,ramme, Now, Sir, while I am on my feet,and I do not intend to hold the House too long on this I think it is a very important matter this whole area, this whole broad spectrum of industrial development in a province like Newfoundland, a province which has decided disadvantages, which have to be overcome if we are p;oing to flourish, if we are going to have good1 sound economic development.

I think, Sir, that in many respect, if you looked at the whole situation objectively, Newfoundland, Manitoba, Saskatchewan, Prince Edward Island, Nova Scotia, New Brunswick, these provinces, Sir, in their efforts to get industrial development present, they must present to any objective on-looker a pathetic spectacle indeed, to see these poor poverty Rtricken provinces in many respects trying vie 1 in many respects,to set themselves up as tremendous industrial parts of this country of Canada, Sir, when I was doing a little bit of research on this matter,there about a couple of days ago 1 on industrial development,in anticipation of these estimates cominp; up, I came across 1 in my files again,a book which I have read,called "Forest Growth" by Philip Mathias, who is an 3211 .... ,

June 27 . 1972 Tape 1012 (afternoon) ·PK - 3 MR. ROWE, W.N. assistant editor of the "Financial Post," lle has written on a number of these things,govemment involvement in industry. He spent six years studying provincial involvement in industry. There is an introduction to this hook "Forest Growth" by Abraham Rothstein, who is a professor of Political Economic at the University of Toronto. Sir, this hook has documented, has set out five studies of provincial government involvement in economic development. It was published in 1971, so perhaps it is up to date as far as 1970.

It is probably a couple of years out of date now. But these studies which he made included the provinces of Saskatchewan, Manitoba, Prince Edward Island, Newfoundland and Nova Scotia. In it, Sir, there is a very damning indictment of the type of industrialization which has gone on not only in Newfoundland, The one that he has chosen from Newfoundland, Churchill Falls, he gives a very good bill of health indeed.

But indeed a damning inditement of what has gone on in the have-not provinces of Canada, as far as trying to get the economy stimulated is concerned, I took the opportunity to note down one or two excerpts from this book, which is a very comprehensive, although short, comprehensive study of the type of industrial development in the province, We find, Sir, Mr.

Rothstei-g.,who wrote the introduction to the book,saying in his introduction; "we must return in the end to the fact that the gap between the developed and the impoverished regions of this country continues to'grow,{n spiteof the fact that public monies have heen lashed out hand over fist hy f!rovincial governments," The gap continues to grow,and that we are as puzzled as ever about how we shall eventually right the balance in the country.

He goes on to say~ 'the hit and miss character of the whole approach to regional development seems more entrenched than ever," He was writing this, Sir, in 1970, after a couple of decades of 321!~

June 27. 1972 Tape 1012 (afternoon) PK - 4 MR. Rm-m W .N. intensive attempts at development in the have-not provinces of Canada. Then again, Sir. he states againpin his introduction he says that in the five industrial developments which have taken place in Canada, which this book refers to, he mentions them and he says that it appears that the Saskatchewan project will he successful even though at an exorbitant cost for each ne1,T ,iob created.

He says, the opposite is the case in the Prince Edward Island Frozen Fish Plant ·•1hi cb is another one, the opposite is the case in respect of the Manitoha venture at The Pas and the opposite is the case in the Nova Scotia heavy water plant. He says. they are all unqualified disasters and hundreds of millions of dollars of puhlic funds have been poured into those projects. Then he says: "Even when Newfoundland's successful Churchi 11 Falls project is taken into account,it appears that the state of regional development in this coimtry ls in a highly precarious condition.

Only chance consideration seem to lay down the fine line between qualified successes and unqualified failures," He says that the future projects carry with them no greater chances of success than the ones that he has referred to, We would be better off to suspend our operations in regional development and find some other way to help the unemployed. That is what Mr. Rothstein, the professor of Political Economic,has to say, Sir, about the attempts at industrialization.

Then ~fr, Mathias himself, when he is given a general idea as to what has been p.oing on both in the Canadian Government and in the provincial governments,he says:"In several of the controversial projects that went ahead in Manitoba, in Nova Scotia and Prince Edward Island in the 1960s, there is evidence, that few people on the staff of the provincial lending agency or in the civil service had the expertise to really assess whether a given project was a valid economic proposition or contain reasonable financing agreement-.." 3213

June 27, 1972 Tape 1012 (afternoon) P-K - 5 MR. ROWE. W,N. Re goes on to say;"another clear case where provincial authorities were not able to handle the technical side of a project is the heavy water plant in Glace Bay, Nova Scotia." There you have it again, Sir, the fact that in our pathetic struggle to set up industries in provinces like Newfoundland and Nova Scotia and Manitoba, we do not have the human resources available and I suppose it is virtually impossible to have the human resources available because certainly a government like Newfoundland is not going to keep on it-s staff fifty or sixty specialized, specially trained 3214

June 27, 1972, Tape 1013, Page 1 -- apb people in various aspects of government. or development, in order to advise the government,when any particular proposition is brought in, we iust do not have the money to do it. It points up this problem of lack of efficient and good technical expertise in the whole area of develonment and industrialization in the various provincial governments.

Then Sir, he goes on to say apain (that is one aspect, the lack of expertise) then he goes on to talk about the competition, the unseemly distasteful competition which has gone on between various provinces in Canada, to get a particular industry. lle says; "Such comnetition has tended to increase the price that is ultimately paid for the prize by the so-called winner." Before it settled in "anitoha, the Churchill Forest Industires nroup, (that is that preat fiasco in !he Pas) was holdinp talks with the Government of Ouehec over the possibilityof a paper mill there.Undoubtedly, the price thnt "anitoha paid for the Churchill Forest Industries Complex was 1tffected hy the need to attract it away from Ouebec.

In early 1970, the Michelin Tire Group of France decided to build three plants,costing $1 million,in Nova Scotia, but only after a perfod of fierce competition hetween Nova Scotia and Ouebec to capture that compnay. The intripues behind the scenes,they say even involved Charles DeGaulle. But the Michelin group stubbornly stud to its decision to locate its plants in Nova Scotia,at a cost of SSO million to the Government of Nova Scotia, SSO million for for a $100 million industry put in by the Government of Nova Scotia.

There you go again, Sir, the competition, the fierce competition by these small provinces trying to get industry, trying pathetically and perhpas manfully, but pathetically,to get high-powered industries to settle in their p2.rtf cular bailiwick. in their particular little province. Then. Sir, he goes on again to mention another nroblem and that is the problem that small provinces had with the gettin~ of the renutation of beinp socialists, or somehow against private enterprise, 3215

June 27, 1972, Tape 1013, Page 2 -- apb and how they will never risk doing this, because they are afraid they will drive away private money. He says; "Crown Corporations are usually not acceptable , even to a New Democratic Party C'overnrnent." I would say, in spite of or because of a New Democratic Party Government. ~anitoha's N.D.P. Government, elected in 1969, had to tread cautiously over the use of Crown Corporations for development, for fear of frightening away businesses that mir.ht have heen thinking of cominp into Ma.nitoha.

Resides, a Crown-owned paper company,for example, would f:1.nd it difficult to compete in the North American market where all other companies are in the privatr sector." I would submit that perhaps the same problem exists in respect of the linerboard m:IJl in Stephenville. Perhaps there mi~ht be a competition problem there, inability to comnete. I do not know, but in anv event some people may be throwing the words around that,by nationalizinp or by settinp up a Cro~m Corporation, this is dangerously close to communism or socialism.

He goes on to say: ' The shunninr by provinces of socialism, has driven several Provincial rovernments into arranr:ements in which they have paid all or most of the expenses of establishing a plant, usinp a promoter or comoany as a private enterprise front, that gave the project noli tical respectahi.li tv. '' Then he mentions: "In the Churchill Forest Industrj_es complex at The Pas,in Nanitoha and in the Gulf C'arden Foods Fishplant 1 in Pri.nce Edward Island, the provincial government put up almost all the money. almost all the money, and the profits,if any had been generated, would have gone entirely to the promoters of those projects.' ' These are three of four of the problellls, Sir, which face small provinc:f_al governments when they are attemptinp to set up industrialization in the province.

He then Roes on, Sir, to p:ive a case study of the one Newfoundland develor11nent which he has studied, namely the Churchill Falls one. He did not mention the Come hy Chance - he probably had some scathinp. words to say on Come by Chance. He did not 11\ention the 3216

.June 27. 1972, Tape 1013, Page 3 -- apb linerboard mill. He does say in respect of the Churchill Falls Development, he says: ' Newfoundland got a construction pro_1ect on a hup:e scale from Churchill Falls and one of Canada· s 111aior hydro-power sources. He says; 'It created a source of revenue of ~l.5 million a year, (which the minister says will now come to us in thirty or forty vears from now) it created a sizeable source of funds for a nrovince whose expenditures in 1966 were $131 million.' It has gone weJl beond that.

Ironically,' he says; 'It also left Newfoundland in the nosition of seeinp: privately produced hydro-electric power being exnorted, while ft simultaneously builds thermal renerating plants to surmJ y Newfoundland's 01,m needs.'' In other words, we have to build on the one hand, or we have built,on the one hand, plants for our own needs and in the meantime, the privately produced one is being exported out of the province.

The he goes on to say; "Brinco's hackers have come out of the proiect at least as well as Newfoundland has.' I think that is probably an understatement. 'They have firm markets for all the power their nlant can produce.

Guarantees of financinr from their ma.1or customer, Hydro Quebec, which ensures the pro.1ect will be cmnpleted. nnd they can expect Profits of twenty-two to twenty-three million dollars a year, even more than the revenue that will be received by the province which owns the water fall." He ~akes that statement, Sir, and having been extremely complimentary to the Province of Newfoundland, the Government of l•,ewfoundland 1 for setting up this industry, this Churchill Falls industry and facilitating its development. In 1958 for example, which is close to beinc contemporary with the deal, he says; 'In an

article in 'Saturday Night' 1 in 1958, 'Robert Jamieson, a leadinp f:l.nancial affairs journalist, s11id1 'It is my nersonal opinion that Joe Smallwood was darned lucky top.et the deal that he did ~et.'" That was the view of one economist with some economic savvy at the time,in 1958. It is easy enough in hindsight 3217 ..

June 27, 1972, Tape 1013, Page 4 -- apb to start picking holes in and startinp to condemn such a development as Churchill Falls. This particular economic analyst thought that Newfoundland had been ' darned lucky'' to use his words, to get this narticular deal off the ground at that time. Mr.

Mathias himself goes on in glowing terms saying: "The shipwrecked sailors who cannot swim will cling to logs and often survive the swimmers." Perhaps a similar paradox explains why the province of Newfoundland and Labrador, Canada'a newest and poorest, has brought off one of the greatestdevelopment achievements in the history of Canada, the harnessing of the mighty Churchill Falls, without expenditure by the government. Then he goes on to desoribe it. He says: 'What cash incentives of any significance could Newfoundland offer to this giant?

Wisely it has offered none, and has reaped nothing hut profit." That is the view of Mr. }1athias. Today, the minister has given us a different

interpretation of the Churchill Falls complex. I think it all boils do~m to this, Eir, even when we have a complex wh:lch :Is tremendously successful, using most terms of reference, most criteria, most yardsticks of measurement. when we have a development like the Churchill Falls Development,which ls tremendously successful, yet this poor province of Newfoundland and provinces like it in 1'1anitoba, Sasketchewan and elsewhere, really derive, very little in the short run and perhaps in the long run from the development.

From the granting of concessions, from the putting up of public funds, from the guaranteeing of loans or by the outrip,ht grant of money to a particular company,~,e r,ain very little, the main problem being that we have to p.ive t00 much to get little,to start with. Secondly of course, even if we do get SOl'le revenues hack to the province, we find that it affects our eoualization status. We find that we are exactly like the man who is on welfare; he is making three hundred dollars a month on welfare, with a larpe family.

He finds that if he p.,oes to worlr in an unskilled position. he may not even make that much. So what 3218

.Jun e 2 7 . 1972. Tape 1013. Pas:e 5 ··- aph incen tjve is j L to him to get off welfare and to try to stand on his own two feet? 'that is the pos'it ion we 11re in . For m:v 01m p;ir t, Sit', I say that ~•e shoul cl continue to strive manfully to develop the pr ovi nce and stand on ou r own P ·'o feet. He should continue to nep;otiate with Ottawa to make s ure that ther<' is not R fi.n1'1ncial clisincentive ar-ainst the province f or try i nr to s tand on i.ts 01•m two fel:'t. We s hou l d not have the eC1ua li~ation r.nmts cvt 011t frnm und er us immediately upon revenue cordnr.: :l.nto the province f rom industrialization in which we have. taJ,en part. 3219

Tape No. 1014 NC - 1 but that there should be some delay in the cut-off so that we can reap for a period of time some benefits of the equalization formula and the industrialization and that over the ye11rs, if we ever do get completely self-sufficient that we will find all along the way, that it is profitable, economicnlly and financially pr.ofitahle to us to try to get industrial i.zation fo the province, That T think is the statement that we would have to make on the subject, Sir.

I would he interested in hearing, not exactly philosophy from the minister but some p.eneral comment on the whole idea of development of the :-irovince. Ts it such a losinp cc1use altogether that we should give it up in desp11i.r or is there really any point in proceeding with it and have :c1ny prorress been made with Ottnwa with regard to adjustment of the equalization grant1 These are the types of general problems which confront a 'lcwfoundland Government in trving to get industrialization off the ground. ~OnlJARI': . 'fr.

Chairman, I would like to add a few cnmrnents to the minister's statement,in his npen:lng remarks on the Economic Cevelopr.1ent bc1dget, Sir, I somehow detect a very strong hargaining positioii beinr . set l!'.'J hy the mini.ster and his r.overnment concerninr, future devel orrnents in T.abradr,r, I wou1 d like to ask the honourable 'finis tcr of Economic :levelopmr.nt if. he can tahle in this House,and J am sure th11t he does have avatla!:-le figures of revenue that is coming into this province fro"' Labrador.

Ile projcrtcd the revenue, the return that we would r.et on tlie r.reat Churchill l\y<lro-Develop1:1ent, I would also like to ,E'e, ~ir, the fiP;ures thHt are ~oming in, and the revenues that are coming into this province from royalties on the iron ore in Labrador '.lest. Wlwt is the plan or µhat royalties the Labrador Lincrboard, which is now a Crown Corporation, what royalties wi 11 hE' collected_,. and if there are any royal ties coming from the timber resources in Lahrador? 3220

.Tune 27, 1972 Tape No. 1014 NC - 2 I would like to see those figures and other royalties that have been turned in through its orip,inal agreements bv the J3t>I~!C() people. If the hon. minister could table those figures in the House, Sir, sometime during the estimates, I Rm very concerned and 1 would like to take a look at what we are getting in return, in the Labrador itself. I am greatly concerned about that, ' ,fr.

Chairman, because of the fact that if we are going to be greedy in the development of Labrador, if we are going to look ~o Labrador as the bread basket that it has been referred to over the years, to plug all the holes that exist in public services on this Island of Newfoundland, then I am very much afraid that the 30,000 people that exist in that portion of our province, Sir, will he waitin? a long time to build up their economic base in their own homeland.

I would like to relate the case of our fishery that has heen goinp. on for some two hundred years on the Labrador coast and maybe even longer than that and yet today, that on that eight hundred miles of coast line we do not have one fish plant in the whole of Labrador.

I am sure that the honourable ~!i.nister of Economic Development, if he were to table the figures today of the amount of fish that has been caught in that hundred years and brought back to this island and see what went in to the coastal communities in return for the resources that they have been robbed of, it would be appalling, Sir, You know those figures would be appalling, to see in return what has been turned back.

When I think in terms of the hydro development, when I think in terms of the development of the Lower Churchill and when I think in terms of the rate of hydro-power or diesel-power that is paid in Goose Bay, Happy Valley,which is the highest in Canada today,and then we think in terms of,we are going to have to get a lot of money in order to develop that particular resource. Maybe the hon. minister, 'Ir, Chairman, can tell us how much we can expect to pay for hydro-power in the event that it is developed on the Lower Churchill and maybe we can ~o 3221 ..... ,

June -il7, 1972 Tape No. 1014 NC - 3 a little bit further, Sir, in this development of that portion of the province, to think in terms maybe of butldinp: a transmission line and converting the direct power now that is generated from Churchill Falls 1 for the use of that particular area of Labrador, the Goose Bay - Happy Valley area. We have tried, over the years, to get some type of uniform rate for electricity in this province.

He, very unfortunately, have been left with the diesel rate that is applied throughout the province, which is much higher than possibly the hydro rate that has been fed into the main grid on the island,throup,h Bay d'Espoir and the other private people that are supplyinr, power,like Bowaters and other people 1 to this province, Sir, we have been livinp, with those conditions ever since the existence of Labrador, We have been referring to it as a form of isolation, we cannot expect anything better.

But then again, Sir, we have people that are dealing, and the hon, minister and other ministers that dealt with Bconomic Development, taking a look at our potential in Labrador and we would like to see, Sir, something directed, not necessarily on a wide scheme maybe, broad scheme for the whole of the province, but then to take into consideration the local conditions that exist in Labrador too. I notice that there is 400,000 horse power that we have recall rights to, that will be used in the expansions at the Labrador City - Wabush mines.

Maybe the hon. minister could think in terms of maybe having, as I said before, a transmission line going into the Happy Valley - Goose Bay Area and supplying us with some of this particular power from that particular grid. There are a number of things, Sir, that we have to take into consideration. I would like to say to the hon. minister now and his government, we should think in terms,when we are developing Labrador,that we have relatively young people that have been living in Labrador, a lot 3222

June 27, 1972 Tape No. 1014 NC - 4 of them have moved to Labrador in 1949, As I have stated a number of times in this House, Sir, we had a population in the whole of Labrador some 8,000, today we have a population of 30,000 people with a growth increase of 31.1 per cent. I think this is what Statistics Canada is saying. Labrador has the largest growth rate as far as population is concerned,and this is in the whole of Canada. So there are people flocking into Labrador, Sir, because of the Churchill Falls pro_ject, because of the iron ore development in the west.

We have new families, young people that have been staying in the coastal communit1Psr depending directly on the fisheries,which we would like to see upgraded to some degree. I am pleased to know that we are making some progress in this direction. Maybe the hon. minister could table those figures for me Sir, and maybe the hon. minister should give some consideration to the local conditions that exist in Labrador,before we feel that we have to go and bargain with the developers,so that we can support the whole of this province by developing the mineral resources and the natural resources of Labrador.

There is a great feeling in Labrador and one of the items that was mentioned that we did not charge sales tax, we did not charge gasoline tax. Sir, when you think in terms of a revenue that is coming out of Labrador in gasoline tax and when you look at the Highways 1,udget this year for new construction and road improvements, there :l.s not one cent being spent in Labrador. This sort of makes me feel that there is no feeling or concern. What are we doing?

Are we developing that particular resource to put the whole of the thing back here in the province or the island portion of the province, or are we prepared to give a little in return 3223

June 27, 1972 Tape 1015 for what we are giving up'2 I think that the honourable minister said that the network of roads in Churchill Falls, if I recall correctly, is somewhere in the vicinitv,during the total pro_iect 1 of 160 or 170 miles of road construction, a network of roacl construction. Sir, this did not cost this province one cent. All of those roads were cleveloped by the CF"LCo people and they in turn 1when the roads were finished 1 on their agreement turned them over to the Province of Newfoundland.

We in Happy Valley-Goose Bay and I am sure that the people in the W~st pay a large amount of monev into this province in the form of p;asoline tax each year, I venture to say, Sir, it is somewhere this year in the vicinity of maybe three to four hundred thousand dollars,and we do not have one roa<l prorramme in the whole of Labrador. So, Mr. Chainnan, it would make you wonder to see that this particular thinr- is happening.

It breeds discontent amonr- people, Sir, and if. this is goin/! to continue I am very much afrai<l that the honourable minister an<l his ~overnment,if they do not see fit to put something back in return for what they are takine out there, are l!oin?, to be, we are ?ojnr to hear more rumbles. T do not want to mention things that I have heard before,but we are goinr to hear more rumbles. There is no need to be hearinp discontent from that portion of our province, Mr. Chairman.

He should in turn see fit and the government should in turn see fit to put a portion of this revenue back in,to look after those 30,000 people that we have in that portion of our nrovince not to exclude us from our total road programme, a total exclusion from our road programme, Mr. Chairman, and not to sit down and sav, 'Look 1 we are not going to develop that r,reat hydro potential unless we vet enough money,possibly to build a cornplete network of roads in the Province of Newfoundland." If we take that attiturle, Mr. ChaiI'T'lan, I am very much afraid that the 3224 JM - 1

June 27, 1Q72 Tape 1015 JM - 2 discontent that exist in Lahrador will continue to multiply. ~fR. ~EARY: Mr. Chainn:m, T would liJ,e to have a few words on the vote for the neoartr.ient of F.conomic Development.

Sir. six months have gone hy since the Tory Administration fonnen the r,overnment in this nrovince, Unemployment has gone up in the last six months, As of the enr! of Hay unemnJ oyment is hir:hPr in ~Tewfoundland and Labrador th:m it was M;,iv of a year a)!o, The neople of this nrov:lnce, Sir, arc' looking t0 tlw new administration for some direction to finc1 out, they want to he told, wh,1.t course the nrovince is noing to take in the field of Pconol"ic dPvPlonment and indnstrial development. '!'hev expected the Mini.ster of Finance ann Economic DPvelopment to spell this out in his Ruc~Pt ',neech. ~nt did he, Mr.

Chainn1m? ~!o. he did not and his lludget Sneech made V"rv vague reference tn econn1"1ic dPvelonment, I snent more time sinp-ling out Assistance to welfare rer:ipients on Bell. Tsland, spent t'lore ti111c> nersecutinp- the innoverishe<' and the poor of this nrovince. Sir. thRn he did on economir: nevelonment. The peop 1 e on unemploy,,1ent insurance today. Sir, ;,re worriec1 hecmme their benefits ;,re iust Rhout exh1mstecl. The people on welfare arf' heinf! told there is p.oin,:,: to be a tif'htening up of the re?ulations.

They 11re tole:! to i>o and find work, Sin12le able-bodiecl r>eonle in this province are told to J!O out and find jobs. nut, Sir. they are not tolcl where to find these 1ohs. 1-le seem to hnve a sort of a situation at the moment, Sir, where the whole thinp: is jn a shambles and every­ body is sittinv hack and waitinp for somethinr to hapr>en. I submit, Sir. that if we continue on this course that by this fall and winter unemnlovment will he the hivhest in Newfoundland that we have had since Confederation. I am not surprised, Mr.

Chaiman,by the announcement of the honourable Minister of Economic nevelopment, in this nouse,on Frid.ay,that he was planninp on vacating that portfolio. It came as no surprise to me, Sir, because I have been sayin~ for 111onths 3225 -.

June 27, 1972 '!'ape 1015 .JM - 3 now that the minister has been doing the wronp thinp.s in that portfol:!o, with his hostile attitude t0Pards outside businessmen and industrialists coming into this provincf', Sir. The minister has clone irreparable camape, Sir, in the international industrial world,to this province. He has frip.htened away neople thnt may have been contemplating cominp. into this province. Sir, and ris\ring their own canital.

Members of the House will re.call that in thf' 1:ist thirty months or so the minister,prior to the election and in his Rud~et Speech since the House opened and in other comments that he has made in this honourable House in this session,that he has 11sed some pretty tough words. Sir. and issued some pretty damaging ultimatiums that would discouragP. any industrialist or husinessman who was loo!-:inf! for a place to invest venture capital or risk capital. He scared them off.

So therefore I say, Sir, t~at this minister has done more damag~ in the short time that he has been in that department,to destroy our credit ratin~ and our reputation in the international industrial business world, than anybody that t know of could have done in the s;ime lenpth of time. I am hanpy, ~r. Chainnan, that he will soon be replaced. T do not know. Mr. Cl-rnirman. who the honour ab le l'rell'ier is ,1>oinp to replace the honourable !'1i.nister with. When I look across at the benches on the p,overnment side of the House T cannot see 1 apart from the honourable. Premier himself and maybe, Mr.

Chairman, the honourable member for Jlurgeo-LaPoiJ e. anart from these two honourable p:entlemen , Sir. I really cannot see a s11ccessor in the rovernment, on the government benches. '!'he honourable member for H11rbour Main, T <lo not think has the experience to be "'finister of Economic nevelonment. T do not · think the honourable member for P.onavista South really has the hackf!round for it and certainly the honourable member for Harbour Grace, Sir. \·1el1 he may have experience 1n one asnect of develof'ment but not the 3226

.June 27, 1972 'l'aoe 1<115 kind that we woulcl like to see in this province, Sir. So I really clo not know, Mr. Chc1.irman. When I look across, I re;illv cfo not know who is p.oing to succeerl the honourahle minister. T would nrohablv or I mipht make a suf'gestion to the honourahle T'remier, Mr.

Chairman, that he succeed the lionourable minister himself 1 hecause the honourable Premier,in my opinion,is the only p.entleman sittinr on the povernment benches at the present t:lme who has any familiarity with the financial institutions across Canada and with the business worl<l,hoth on the international and national scene. So I would. Sir, that the Premier would bestow on himself the responsibilitv for the Department of Economic Develonment. Jf,f ·- 4 Mr. Ch;iinnan, as I say, the neonle of this province are very concerned.

They ;ire verv concerned over the fact, Sir. that r.hurchill Falls now, th:ls yPar 1has ~ust about completed the main part of the construction of the r.reat hy-1.ro development. This year mostly trac1es­ men and technicians would be hired at Churchill Falls. T would s11bmit. Sir, that it is verv unlikely that many of these .i obs will l!O to ~l'wfound.landers. T ask a question in the House,abont a week al'(o,of the Premier, answerNl by the '1inister of Labour, that a committee was being set up - MR. CROSBIE: (Tnnndihle). ~R.

NEARY: "fR. cRosr.n: · T. am talking ahont the pennanent staff at Churchill Fa]ls . (Tnm1dihle) . \-!hat did vou do about that? }IR. NEARY: Well. maybe the honourable minister can c1eal with that. The honourable ~inister 3227 1·.

June 27, 1972 Tape No. 1016 NM - 1 of Economic Development wants to keep referring to the past, Sir, but the people of this province want to know, they know about the past, they want •••• MR. CROSBIE: Inaudible. MR. NEARY: Mr. Chairman, the honourable mintster said in his remarks, and I am sure he said this in the heat of debate,that he hoped that the member for Bell Island would not be around a year from now. Well Sir, I would invite the honourable minister to lay his seat on the line with the Minister of'Social Services and Rehabilitation and we will see who will be around a year from now. Lay it on the line.

Put it on the line, The honourable minister can come over to Bell Island and let us see who will be around a year from now. MR. CROSBIE: Is that a promise? ).ffi_. NEARY: Make your charges of corruption stick and see who will be around a year from now. Lay it on the line. I invite the minister to lay his job on the line. !1R, CROSBIE: In what way? Re specific, MR. NEARY: Be specifid Yes Hr. Chairman, I will be specific. The honourable Minister of Social Services has made some pretty serious charges in a personal attack on me, of my being corrupt, personally corrupt.

I invite the Minister of Finance to lay his seat on the line,if that can be proven. MR. CROSBIE:. He did not say that, MR. NEARY: The honourable minister did say it. It is in Hansard, It is in Hansard, but, Sir, we will deal with that at another time. That matter is well in hand. The honourable minister does not want to lay his seat on the line. AN HON. ~EMBER: The eleph ant part of it is all right. '.'1R. NEARY: The elephant part of it is all rip;ht, Mr. Chairman, but I do not know about the ••• 3228

June 27, 1972 Tape No. 1016 NM - 2 MR. :lCARY; Mr. Chairman, I have been sayinr, for months that one of the worst fe;ltures of the t·:conor,ic. nevelopment policy of this government is th!' torrent of political attacks that haw• been made over the oast thirty months or so on industrialists who ;ire ;1_lready into this province ;rnd stru~r,ling hard tn make n gr- of their projP<:ts ;m<l on other business people and industrialists whn 1-1ere prohnb I y think in~ about comjng into Newfnundland hut wil 1 nm,: be scared off. I know this ,'·Ir.

Chnirman, tQ be a fact. ,T know a lot of people in the business 1,•orld. r._ie discuss it. Sir, we heard the honourable minister the other d;iy make a statement and ] think the nremier ,,J,,o maclc ,: si'llilar statement about the third paper mill. The honourable minister made no ret~rence ton third paper mill in his introductory rell'arks. I clo not know why, Sir.

J do not know whether the govermrent have received a proposal 1are about to receive a proposal or .it,st "'11at i_s haprcninr, on tliL third paper rnill ',ut, ?·'I', Chairman, the people of tltis nruv-tnce w;int to kno1-1 ·[f there is p.oing to be ;r third paper mill and they want to ~·now what the government 1 s pol icy is ,m it. How far are they ... "fP :_?.!'.:;<\_R!.:,_ I read t~c Iludget Speech, "1r. Chairman. and T could only get the irnpressi.on t~at the governmentwere hostile t'owards the promoters of the third paper ~ill. Now may'IJe the honourahl'e minister can set me straight on that.

Because, as I said in this honourable l'ousl' a few days ago, Mr, Chairman, it does not take long,in international circles, for the story to get around that the new !,".Overnment, the new Tory Government here in this province is hostile towards venture capital from outside. of Newfoundland. The honourable minister keeps harping on the fact, Sir, that our own people, our own business people c1re going to develop Newfoundland, 3229

June 27, 1972 Tape No. 1016 NM - 3 ~ _ NEARY : we do not have to look to outsiders. I have heard this several times, Hr. Chairman. '\,fuy should we have to bring people in from outside to start up business and industry in Newfoundland?" Well I would like to ask that question also, Sir. Why should we'./ I will tell you why we shoul<l, Mr. Chairman. Because our own millionaires in this province are not prepared to take their money out of stocks and bonds and invest lt into labour intensive industry. That is the reason, ~r. Chairman. MR. CROSilIE: Is the Liberal Party labour intensive?

A lot of them have invested in that. }~R. NEARY: Mr. Chairman, what the honourable minister should have really done, Sir, if he wanted to scare off outside business men and industrialists from coming into this province, what he should have done was to get a commitment from his fellow millionaires that they would, if given the opportunity, establish labour intensive industries here in this province. So until the honourable minister can get this commitment from his fellow millionaires, Sir, I would say th:it it is a great mistake for the minister and the government to harass thei;e outside industrialists.

Instead Mr. Chairman .•. ~1R. CROSBIE: Am I really hearing this? MR. NEARY: The honourable minister is hearing it, Sir. Ile went around this province ranting and raving about the linerboard mill, kicked Doyle out. Doyle is gone, Now he is .h,"'ing meetings,this week.;with the Come By Chance people, Let us see, Mr. Chairman, I predict ••• No, jt will not h~ppen now, because the honourable minister is not going to be Minister of Economic Development, but he will try to get his finger in•: there. He will try to get his knife in there, as Minister of Finance.

I do not know whoever the new Minister of Economic ryevelopment will let him get away with it. But he would kick out the Come By Chance people if he had the chance. Kick them out, Sir. 3230

June 27, 1972 Tape No. 1016 NC - 4 !'JR. CROSBIE: I have a few days left yet, MR. NEARY: The honourable minister can do a lot of damare in a few days. He has done a lot of damage to this province now, Sir, or its reputation. But, Mr. Chairman, the people of this province want to know what this government is going to do in the field of industrial development. What are they going to do? The minister,in his introductory remarks, did not tell the House nor tell the people of Newfoundland what they are going to do in the next five to ten years in the way of industrial development in this province.

How many factories are they going to open? How maµy mines are goinp, to be open in Newfoundland? Is the Lower Churchill going to be developed? How many more fish plants are we going to have? Where are they going to be located? I know, Mr. Chairman. I am not a fool. I knm,1 that it is impossible after six months, After six months it is virtually impossible for the new government to tell the people. of Newfoundland what the long-range plans for Economic Development in Newfoundland-will be. I know that is impossible. I am prepared to wait a Y,ear, S:l.r.

I am prepared to come into this House a year from now and expect the Minister of Economic Development to stand in his place in this House and say; "here are the plans that we have for industrial development and economic development for the next five or ten years." I am satisfied to wait for the next session for that, Sir.

But at least the people who cannot get jobs in Churchill Falls this year, the people who will be laid off in the linerboard mill at Stephenville, when they start up production,and the people that will be laid off at Come By Chance,when that project nears completion, all these people and all the other people who are unemployment, drawing unemployment 3231 r:

June 27, 1972 Tape No. 1016 NC - 5 MR. NEARY: insurance, drawing welfare benefits, Sir, they want to know what is on the horizon for the future. What is going to take the place of Churchill Falls? What do you have to take the place of the linerboard mill when the construct -ion is finished? How about Come By Chance? Mr. Chairman, these are all Liberal projects, started by a Liberal Government - Churchill Falls, Come By Chance, the Linerboard Mill, all Liberal projects, Sir.

Now they want to know and the honourabl e\ minister has not given the people of this province the slightest hint of what the economic development programmes of this new Tory Government is going to be, I would like to hear the minister spell out,in some great detail, what is goinr, to happen in this province in the next, two, three, four, five years in the way of industrial development, so that our people will know. Does the honourable minister believe, as one of his counterparts downtown stated and recently mentioned by Dr.

Copes, I think it was, that 200,000 Newfoundlanders should move out and move up to Ontario. Is this the philosophy of the new Tory Government? Is this what they want? This is what will have to happen, Mr. Chairman, if we do not continue with the development of this province, If we do not continue the pace that has been set over the past twenty-three years, Sir 1 I am afraid that these two gentleman will be right, that 200,000 Newfoundlanders will have to leave Newfoundland to find employment, and go on up to Ontario. AN HON, MEMBER: What was it last year? MR.

NEARY: I want to know if the honourable minister thinks that this is what should happen. I do not think the government is creating a very good atmosphere whereby business and businessmen can flourish in this province, Sir, I would say on the contrary that they are tearing do~m and I think the takeover of the Linerboard Mill at Stephenville was a good example of that, Sir, and certainly came as no surprise to me because I had been forecasting it for weeks before it 3232

June 27, 1972 Tape No . 1016 NM - 6 t!!l· NEARY: happened, not weeks, Mr. Chai.rma n, it merely confirmed what t had been saying fot" about six mon ths. MR . CllOSBIE: Why did you not go against the Bill? You did no t even speak on it , quiet as a littl e mouse. MR . Nf.ARY: Mr . Chairman, the n ight the Ilill was voted on, I had n very, very importa nt commitmen t in my own dist rict and I rould not he here for the vote, If l had been here I would have 3233 -~ -~-.... ~:-

June 27, 1972 Tape 1017 (afternoon) PK - 1 MR. NEARY: I would have spoke on it. A very serious commitment, Sir. So I would say, Sir.,here, to the new minister,whoever he might be,that instead of trying to tear down, to take over industries, boot out the industrialists that come in here 1 that they try and create an atmosphere whereby business can flourish. I think, Mr. Chairman, that this is the only way that we are ROing to encourage industrialists and business people to come into this little corner of the world, to come to this little rock stuck out here in the middle of the Atlantic.

Sir, Wedo not have too many attractions for business people or industrialists from all over the globe, We do not have too many; nobody down beating on the Premier's door wanting to start industry here in this province, You have to go out , Sir, you have to sell what you have. You have to sell your ports, The ports 1we have some of the finest ports in the world. We have the power, Sir, we have the hydro-power and we have the people.

We have the people, Sir, who can be trained for any kind of an industry, But, Sir, more than all of these things,people, business­ men, industrialists are not that patriotic that they are going to come into Newfoundland just to start up an industry to create work, to create jobs for Newfoundlanders, Sir, they are not that patriotic. The profit potential has to be there, Mr. Chairman~ So I would say we have all of those things.

We have the power, we have the people, we have the ports and we have the profit potential, the four "P's", Sir, in my opinion that goes towards making good development in this province,if the government will only create the right atmosphere. So I would ask the new Minister of Economic Development,whoever he might be1 to forget the tough words, forget issuing ultimatums to business people, settle down, let the people of Newfoundland know what the short-range industrial development is going to be in the province and then next year 1 when they come into the House of Assembly,

June 27, 1972 Tape 1017 (afternoon) PK - 2 MR. NEARY: let the people know what the long range plans are going to be for industrial development, This is what the people of Newfoundland want to know at the present time, Sir. I hope that when the Minister of Finance stands in his place to answer some of the questions that have heen asked from this side of the House,that he will spell out in little more detail just what his government's policy is on industrial development in this province for the next two, three or four or five years. MR. CROSBIE: Mr..

Chairman, r think the four "P.'s" proper that the honourable member for Bell Island had to contribute to this debate are poisonous, perfidious.puerile, piffle,( I am•not going to come to the telephone now,whoever is handing me in those notes). Poisonous, perfidious,puerile, piffle,that is what we have come to expect from the honourable gentleman. Mr. Chairman, just let us examine some of his remarks, I will come to the serious contributions to the debate in a few minutes. First let us deal with this,the latest example of a vacuum emitting noise. He wants the minister to set him straight.

The honourable gentleman talks about our attitude and the attitude we are taking is going to scare away the great foreign industrialists, the great foreign promoters who want to put their venture capital into Newfoundland. Phat utter, I will say, tripe. What utter nonsense! What venture capital was attracted to Newfoundland by the regime of the honourable gentleman in the last four or five years?

What venture capital was invested in this island in these great projects like the linerboard mill and the oil refinery and the steel mill and the Marystown Shipyard 1and I can go on for instances after instances,and sea mining in Aguathuna. The venture capital everytime was the money of the people of Newfoundland, turned over and put into the hands of foreign promoters who came here not prepared to invest their own money or to invest venture capital 3235

June 27, 1972 Tape 1017 (afternoon) PK - 3 MR. CROSBIE· from outside. Look at the oil refinery at Come by Chance, Thatagreement is already entered into and is binding on the government. What venture capital is going into that oil refinery from outside of the province that is not guaranteed by this province? There is suppose to be $10 million going into working capital, when it is all constructed and finished down there. That is the amount of the venture capital that is going into that 1 after we have guaranteed to put in our $30 million and after crown corporations and so on have put up another $130 million. Where is the ven