May 4, 1994

GOVERNMENT SERVICES ESTIMATES COMMITTEE

The Committee met at 9:00 a.m. in the House of

Assembly.

MR. CHAIRMAN (Oldford): Order, please!

I would like to welcome everyone to the Government

Services Committee on the Estimates. Today we're looking at the estimates of the

Department of Municipal and Provincial Affairs and Newfoundland and Labrador

Housing. We welcome the minister and his staff, and with that I will introduce

the committee.

To my left is Roger Fitzgerald, the vice-chair of

the committee and the Member for Bonavista South; Mr. Jack Byrne, the Member for

St. John's East Extern; Mr. Lloyd Matthews, the Member for St. John's North; Mr.

Don Whelan, who is sitting in for John Crane, and Don is the Member for Harbour

Main district.

We will allow the minister fifteen minutes to

introduce his estimates. Then the vice-chair will have fifteen minutes to

question the minister. From there on we will go in ten minute sequences.

I ask the officials to identify themselves each

time they speak so that we can keep the records straight for Hansard. We

wouldn't want any great historic statements to be credited to the wrong people,

so therefore it's important that you introduce yourself each time you respond.

I want to welcome Mr. Walter Noel, who just joined

us. Walter is a member of the committee, and the Member for my own district of

Pleasantville.

Without further ado, Mr. Minister, if you would

begin we will get the proceedings under way. Mr. Minister.

MR. REID: Mr. Chairman and members of the

committee, I am pleased to be here to present my department's estimates and to

answer the questions which your committee may have following my opening

statement. I will be happy to answer any questions for members of the committee;

however, there may be some occasions and some technical areas - I don't profess

to know my department inside and out - there may be times when I may have to

divert to some of my staff to answer some questions.

On my immediate left is the Deputy Minister, Mr.

Clarence Randell. Mr. Art Colbourne is the Assistant Deputy Minister, on my

right here, and Art is responsible for municipal support services and sports and

fitness; Mr. Winston Hiscock, Director of Administration; and Felix Croke,

Manager of Financial Operations.

There are two separate sets of estimates this

morning, Mr. Chairman, Municipal and Provincial Affairs, and later on, I guess

based on how slow or how fast we are in regard to Municipal and Provincial

Affairs, I will be calling my people in from Newfoundland and Labrador Housing

later on this morning, and then we can hopefully - hopefully, Mr. Chairman -

because of the restrictions on the time that I have, and I am sure some of you

have as well, we may be able to get through both estimates this morning. I am

hoping we can. If we don't, then it will probably be a week or two before I will

be able to get back, to be quite honest about it. The reason for it is that I'm

tangled up in this infrastructure program and we're working day on night on it

right now, and I don't have time to breathe, to tell you the truth.

Anyway, with that said, I'm not going to be too

concerned about that. If it's your wish to do Newfoundland and Labrador Housing

this morning they're at our beck and call and it's only a matter of me picking

up the phone.

Mr. Chairman, the total estimates for the

Department of Municipal and Provincial Affairs is $176,804,000. There are

revenues in both current and capital accounts totally $35 million, leaving a net

expenditure in the department of $141,506,000. There are 227 permanent positions

in the department, operating all divisions.

Mr. Chairman, the department is comprised of two

main branches, and its delivery services embodies a number of regional offices

to ensure the best delivery of services to municipalities and sports and

recreation commissions in the most efficient manner.

The Department of Municipal and Provincial Affairs

is responsible for matters relating to local government, municipal finance, real

property assessment, urban and rural planning, development control, engineering

for water and sewerage services, roads construction and reconstruction and, of

course, co-ordination of emergency planning to municipalities.

As well, we have under our department the Fire

Commissioner's office which makes us, I suppose, responsible for fire prevention

and fire protection in the Province. The department is responsible for amateur

sports and fitness, and recreation activities as well.

The activities of the department are broken down

within the following categories. Executive and Support Services; this activity

mainly provides for funding for the operation of our executive and

administrative accounting and other financial support services for the whole

department. Then there is $15,671,000, that is funding that covers our

engineering services to municipalities for water and sewerage installation,

street reconstruction and paving program. The provision of town planning for

municipalities, provision of assessment services, provision of developmental

control and protected roads within municipalities and without, and the

maintenance of our industrial water systems around the Province. Funding is also

provided to Newfoundland and Labrador Federation of Municipalities, to the local

administrators association as well.

Mr. Chairman, we have four regional offices outside

of St. John's. One in Labrador, one on the West Coast, one in Central and one in

eastern - I am sorry - and our eastern office is located in the metro building

even though our department is located in the Confederation Building, we have an

eastern office that is run by Keith Warren, and he is located in the metro

building and takes care of everything this side of Port Blandford.

The idea of these offices is to have the delivery

of services provided in the area that is closer to the communities and groups

served by the department, and also provides for better liaison between the

department and municipalities and will provide for more timely and meaningful

process or response to municipalities and organizations, as departmental

employees in the regions can get to know the municipalities needs in cities, in

towns, local service districts, sports and recreation groups; all the groups I

suppose that operate within a municipality.

These regional offices have been given a

considerable amount of authority and latitude to manage the responsibilities

within their jurisdiction, and I have to make this comment quite honestly, Mr.

Chairman, that since I have become minister, less than a year ago, I remember

some years ago, the Federation of Municipalities as well as a number of us in

the House, were complaining I suppose about the fact that the government was not

decentralized or should be decentralized and some of our departments should be

moved throughout rural Newfoundland. In this particular case in my department we

have done that.

We have opened up four offices and for some reason

or another, I don't know what it is, but some MHAs, through their councils, have

a tendency to bypass on a regular basis the regional offices, and we are having

a lot of problems with that and the approach that I have taken, on two separate

occasions since becoming minister last year, was, I have written the

municipalities and basically outlined to them that: look, we do have these

offices in place, people in the offices who are more familiar with your problems

and I would prefer that you go to the office before you try to get to see me or

the deputy minister, and I have to inform the committee that I will be

enforcing, I have no other choice but to enforce that rule of thumb, and I will

be writing the municipalities in the next couple of weeks and expressing to them

my concern about the fact that they are not using their regional offices, and I

will be telling them that I refuse to meet with any municipality unless the

municipality has gone to the regional office and has been recommended by the

regional office that they come to see me.

I am trying to be as fair as I possibly can, but

since last year I have seen in my office 168 councils, and that's not counting

what some of the MHAs will bring in to the House and I will meet upstairs or I

will go out and visit and so on, but actually in my office, and you just can't

cope with it; not with 287 incorporated communities and 180-odd local service

districts and then the remaining of recreation commissions and communities of

which we have over 600 in the Province, so you can imagine on a daily basis, and

I know that some of you realize too the amount of time, it sometimes take to set

up an appointment to see a council, so I think most people will understand that.

We have these people out there, we are paying them decent wages in places like

Corner Brook and Labrador. If they are there then I think as the minister I'm

responsible to force people in to see these experts or these professionals or

whatever.

The real property assessment division operates

under a separate act and is responsible for assessment of real property in all

municipalities with a real property tax except St. John's. They do their own. At

present some 270 communities have adopted a real property tax, and the division

has assessed approximately 165,000 properties throughout the Province. This

division must continuously conduct reassessment in these municipalities on a

rotational basis. To assist the division in its ever growing task my department

has purchased and just recently completed the installation of a computerized

mass appraisal system, which has automated the assessment process. They are

starting to catch up. I'm hoping that within a year we will have everything

computerized to the point where we won't need to go out and be doing

reassessments and appraisals on any of those properties. We can sit at a

computer and actually have the information available.

Using this new system my department will be able to

catch up with the backlog of reassessments and new assessments required to be

done on overtime. The reassessments which are now conducted every six or seven

years will be able to be conducted more frequently and probably every three

years. There will be tremendous benefits to municipalities because they will be

able to be much more current in their assessed values, and it will eliminate the

need for major increases in the taxation value of property which occur every six

years due to the large amount of inflation which normally occurs during such a

long period of time. It will also have the advantage of allowing the

municipalities to earn more revenue through the adoption of an earlier

reassessment cycle without having to necessarily increase their mil rate. The

new system can also provide information to the private sector which can be sold

to them, and therefore produce some revenue to reduce government's operating

costs of the new system.

Within the services to other municipality grouping

is our inspection division. The small staff of nine inspectors is available on a

continuous basis to all municipalities to undertake internal audits when there

are financial problems within municipalities, and to offer them advice where

they are required for financial planning, or to advise them on general municipal

procedures. This service is especially helpful to new councils when they are not

familiar with the procedures and operations of councils. When I say "new

councils" I also mean every four years when there is a drastic change in a

council because of municipal elections. We find that every four years after a

municipal election, the general municipal elections held in the Province, in a

lot of cases municipalities tend to put a heavy burden on these people, to go

out and talk and explain the roles of council and what they should be doing and

so on.

There is a local government division with a staff

of three people. This group provides general support to the municipal operating

section of the department, provides advice to the regional managers on matters

of departmental policy and programs.

Mr. Chairman, there is an urban and rural planning

division. This division is staffed by professional town planners and supported

by planning technicians and other administrative staff. The role of this

division is to provide town planning advice, to prepare municipal plans to

municipalities, and to advise them on various planning policies and regulations

which may be used within the individual municipalities. The department also

occasionally hires town planning firms to supplement the work of the urban and

rural planning division and cost-shares the development of town plans with some

municipalities through this process.

There is also a developmental control

section

within the urban and rural planning division which is responsible for the

establishment and monitoring of policies for the control of the Province's main

highways, including the Trans-Canada Highway, and other areas which are placed

under this control. This ensures that proper planning is adhered to in areas

which are not incorporated but which may be near municipalities or other areas

where growth activity is taking place.

There is our engineering services division. This

division is responsible for administering the municipal water and sewage, street

reconstruction, and paving programs. Within this division also is a planning and

design

section and an industrial water section. Planning and design group is

responsible to review the plans and specifications of water and sewage projects

which are approved for municipalities under capital works, infrastructure or

whatever method we use. The industrial water service division is responsible for

the operation and maintenance of the government industrial water service systems

that we have around the Province and there are a number of those.

Grant funding is also provided for community water

services. This is separate from other capital water and sewage installations

designed to provide domestic water sewer services to local service districts.

It's usually comprised of smaller types of systems, artesian wells and we got

$900,000 in that envelop this year again. Funding is also provided to assist

municipalities with the development of solid waste management facilities. Mr.

Chairman, this year approximately $6 million has been provided for the

development of water and sewage facilities pursuant to the federal government,

federal-provincial cost-share for municipalities in Northern Coastal Labrador,

that's separate from our capital projects.

Assistance and Infrastructure support; Mr.

Chairman, this

section provides funding for water and sewage programs throughout

the Province. The amount provided in the estimates is the amount required to

meet the repayment of the debt which is financed through the Municipal Financial

Corporation on projects that are completed. Some $67 million is available to

cover the debt, both provincial and interest payment, for road construction,

paving programs and water and sewage subsidies. Provision is also made for

special assistance to municipalities. $985,800 is provided to enable my

department to respond to requests of municipalities for special assistance when

they are in dire need and I can't stress the word `dire.' It covers such items

as special assistance to immediate administrative and operational overheads when

there are insufficient revenues generated within the town during the year. This

fund is managed by the departments finance committee which reviews all requests

for the kind of assistance and recommends whether or not funding should be made

available and the amount. A considerable amount of funding is also provided for

the statutory grants to municipalities this year. $41.5 million will be granted

to municipalities under the Municipal Operating Grants. Now you're going to see

- I don't know if it's in the estimates or not but that $41.5 million, as of

now, is up to $41.8 million because of financial changes and we're not really

concerned about that. It's only an extra $300,000.

Cost sharing funding of $1,693,000 is provided for

environmental impact projects currently ongoing in the Province. The cost of

these projects are shared equally among the federal/provincial municipal

governments. Only the federal share of funding is provided here. The provincial

and municipal shares financed through Newfoundland and Labrador Finance

Corporation. An amount of $35 million is provided for projects under the

Canada-Newfoundland Infrastructure Program. This program is cost-shared by the

municipalities as well as the federal government. For certain projects in excess

of $50,000 only the federal share is funded here under that amount. Even though

there's only $35 million in there, showing in the estimates, because of the

financing that we have to provide through NMFC that figure will become much

greater than that but we can't get a definite amount on it until we actually

complete the announcements, the tender documents and so on for projects. So that

$35 million may become -I don't know, in the next two years that $35 million may

end up being $60 million for sure, wouldn't it?

Then Protection Services, Mr. Chairman, the fire

commissioners office is under my department. We have another million dollars

this year in fire fighting equipment. Recreation and sports are also in my

department and I announced earlier that we're going to proceed with the Summer

Games for 1996 for CBS and we're going to go ahead with our Winter Games in

Labrador again next year. Maybe the best thing - one of the nicest things that

happened to me I suppose, since becoming minister, is that we've introduced the

community recreation capital grants which will allow me and my department a

little bit of scope in providing small dollars to municipalities around the

Province to help with ball fields and this sort of thing. Now, that was gone, I

think, for the past three years but I had it reinstated this year so it is going

to give a little bit of latitude to help, especially smaller rural communities,

recreation commissions and so on, to help put a fence on a ball field and this

sort of thing.

MR. REID: Mr. Chairman, those are my opening

remarks. Sorry I went a bit over but I had to cover my whole department and now

I am willing to try and answer any questions that might arise.

MR. CHAIRMAN: Thank you, Mr. Minister.

Mr. Fitzgerald.

MR. FITZGERALD: Thank you, Mr. Chairman.

Mr. Minister, I think I fully agree with you when

you stated that municipalities should be encouraged to use the district offices,

but I suppose that will have to start at my educating the councils because in

the past I know people from my area and from my district, it seemed in order to

access the local office, had to come to St. John's. If you were coming to St.

John's it was always a situation where you wanted to see the minister, the man

at the top. In my own experience I did quite a bit of dealing with Mr. Keith

Warren who is looking after the area I represent here and I must say he has done

an exceptional job. He came out on two occasions and visited all councils.

It is surprising the number of councils that are

out there, and especially some of the administrators who have been there in

place for years and years, and what is not known about the operation of the

Department of Municipal and Provincial Affairs. Those meetings I have had, and I

have offered them to every municipality and every local service district in my

district, I think is one of the most learning things for me and one of the most

information sessions that those people have had, by this gentleman going out and

bringing the information from your department.

I think Mr. Warren is doing an excellent job but I

still fail to understand why that particular office is located in St. John's.

MR. REID: That was something that was done,

Roger, prior to my being minister but it is a good question and I cannot answer

it, why it is located in St. John's?

Clarence.

MR. RANDELL: The principle reason why it is

located in this immediate area is because by far the major concentration of

municipalities in the easter region are directly here on the Avalon Peninsula. I

think out of a total of something like 123 about 89 or 96 are actually right in

this area, on the Avalon Peninsula.

MR. FITZGERALD: You say it goes as far as Port

Blandford?

MR. RANDELL: It does not include Port Blandford

but it takes in the Bonavista Peninsula, as you are aware, and also, of course,

the Burin Peninsula area, so all points east of that.

MR. FITZGERALD: He certainly makes himself and

I compliment the department for freeing him up and allowing him to do that.

There is one particular thing I always failed to

understand, and I suppose there is a reason, and if there is I would like to

know, why once a community council is formed, why can it not revert back to a

local service district if the department agrees that it would function much

better as a local service district, and the people who are involved in the

community agree as well?

I have several areas in my district right now that

find themselves in a situation where it is impossible to meet their financial

requirements because water and sewer, this sort of this, was put in in the past

and it was always a situation that out of the money they collected they had to

pay 20 per cent of their revenue, but now that has changed and they will never,

ever, be able to afford to pay their debt if they all were charged $500 a

household in a little community in Plate Cove East. Now, the find themselves in

a situation where there are a number of local roads, or local lanes there, which

are almost like an obstacle course to access, and because this massive amount of

money is owing and because somebody in the past convinced them that this

cadillac water system was something they needed, they have been saddled for the

rest of their lives and it seems like the department is not willing to address

that.

The problem, I can assure you, will never go away

and I am wondering if the department has plans to look at some of those

problems, and if it is possible to have some of those community councils revert

to a local service district.

MR. REID: Roger, you're right in your line of

thought. I agree with what you're saying, to a certain extent, but the problem

with it has been, Roger, and I think I know in a lot of cases it's pure politics

MR. FITZGERALD: I agree.

MR. REID: - where a previous MHA, regardless of

who he was, or who he represented, went in and said: Look, if you become a

council I'll give you water and sewerage, not realizing that, and not telling

and explaining, I suppose, to the constituents and to the people living the town

that sooner or later you're going to have to pay for this; someone is going to

have to pay for this.

You're absolutely right, but to take a council and

move it back to an LSD, based on the reasons that you gave of not being able to

afford to pay off a cadillac system, then if we do that then who has the

responsibility to pay off the system?

Sometimes MHAs will say to me: Can you make a

special case for a certain municipality? There's no such thing in Newfoundland

as a certain municipality, because for every one case there is, like Flatrock,

for example, there are twenty out there like that in the same situation.

I've run into numerous communities who have started

a cadillac, as you would call it, water and sewerage system. It will have as

much as $1 million or $2 million worth of infrastructure in the ground and not

servicing one house, but the community has to pay their share towards that. It

was the community that accepted that money back five, ten, fifteen or twenty

years ago - it doesn't really matter - and at the time, I agree, I doubt very

much if it was explained to the residents of a community that, look, if you're

going after this you're going to have to start paying for it up front. Even at

20 per cent, Roger, you'll find that most communities out there, even though we

changed our system, there are a lot of them that are still hovering around the

20 per cent mark. There are a lot of them that are below the 20 per cent mark,

but there are others that are up to as high as 60 per cent. So to change it from

a council back to an LSD is practically impossible to do.

I don't know if, what you're referring to, if and

when this happens that we bring in a local or a regional council, if that would

compensate some of the people in these areas. It probably would, because what

our plans are, or what we're looking at, is the possibility of (inaudible)

everybody that's in the area, regardless if they're a municipality, an

incorporated municipality, an LSD, or nothing. It would probably spread the

burden a little thinner and maybe make it easier for certain councils or certain

areas to be able to offset the cost.

I agree with what you're saying, but it's sort of a

dilemma. You don't know what to do because if you start that, Roger, moving

incorporated communities back to LSDs, I would think right now, with the

financial situation, some of the municipalities in this Province should have 100

coming in asking to do the same thing. Then, of course, the government would be

faced with the debt that was incurred by all of those.

I suppose the only way that you could cope with it

would be go to Cabinet and ask for, I was going to say hundreds of millions of

dollars; it wouldn't be that much, but it wouldn't be far off, to be written off

by the government, and we just can't do that at this particular point in time.

MR. FITZGERALD: It seems a little annoying, I

suppose almost ridiculous, for you to go and see people living on those local

roads, and because somebody in the past - and you're right, it was politics -

somebody in the past had convinced them that a community council was a good

thing. Now they're living on those local roads and the municipality can't even

afford to put a load of fill on it, or plough it. I think it is ploughed, but I

think that comes out of the funding that would be there for them through the

Department of Municipal and Provincial Affairs, but it's certainly not kept up

in the summer time.

The municipal infrastructure program, communities

now that are more than 90 days behind in their payments to Newfoundland and

Labrador of municipal financing, are those communities going to be considered

for this program?

MR. REID: We've started off with one letter

basically outlining the problems that we had with municipalities in regard to

their debt charges we went to a second letter, and the last one that we wrote I

think was in early March. We basically said to the communities that - there were

114 communities out there that had over ninety day debts to MMFC. We wrote them

a letter, I wrote them a letter. I basically told them: We will give you four

years to come up with some way to replace or to repay that over ninety day

problem. The vast majority of communities came into us. I would say there was

well in excess of 90 per cent. There were some that didn't. Bonavista for

example was one that didn't, Roger. Ninety per cent or more came back to us and

made agreements, talked to Art Colbourne on the phone, or Keith Warren and so

on, and came back and said: Yes, we accept the fact that we owe this and we want

to pay it off over four years.

Those communities that came back and made those

recommendations, we've accepted I think just about every one of them. Where

there were problems we've sent our finance people back and worked out the

problems. Each one of them will qualify. They are being considered right now

under the infrastructure program. We still have twelve or fifteen out there that

haven't replied to us at all. They will not - Bonavista will not receive one

copper in capital works, infrastructure money, or any funding whatsoever. Not

even emergency funding. Because Bonavista - I'm using Bonavista -

MR. FITZGERALD: Yes, (inaudible) that is okay.

MR. REID: - to make a point to you, Roger -

because they haven't replied to us as far as we know as of yesterday.

I was shocked, to be quite honest about it to see

some of the communities that did that. One community for example not too far

from here basically told me to come in and they laughed in my face and said: If

you think you will ever live long enough to recover that money we owe you,

forget it. I wasn't one bit upset, but they have to realize that governments,

not even if there is an emergency in that town tomorrow, under an MC, Minute of

Council, they cannot get one copper from the provincial government until that

problem is straightened out. But like I said, the vast majority of them did

that.

I don't know how many we have, Art. How many do we

have left now (inaudible)?

MR. COLBOURNE: (Inaudible) fifteen.

MR. REID: Twelve or fifteen.

MR. COLBOURNE: (Inaudible).

MR. REID: Oh yes.

MR. FITZGERALD: When a municipality replies and

agrees that they will assume responsibility and pay back the amount of money

over a four-year period, does your department then look at their capabilities of

paying it back, even though they say that yes they will?

MR. REID: Oh yes, very much so.

MR. FITZGERALD: Is it a situation that they

apply, and because they apply, make an agreement, that they will be considered?

Or is it a situation where they apply and they are not considered because you

feel that they don't have the ability to assume the payment?

MR. REID: Our people in the department know -

it is surprising really. I'm surprised because I'm a new person in the

department. You would be surprised how much our finance people know about

individual communities off their heads. I can say: How is - and I will name a

community - doing financially? They can tell me almost to the cent what they owe

and what their debt is and what their long-term debt is. They are pretty well,

almost on a daily basis, on top of what is going on in municipalities around the

Province. Especially my regional managers and people in my regional offices.

Keith Warren is amazing. Keith can almost without any reference to material or

anything tell you basically how well a town is doing, whether it is surviving

financially or not, without any reference whatsoever.

So yes, you are absolutely right. We received some

that were far-fetched, we knew that they couldn't cope with it. We went back and

worked a better deal with them and gave them a break here or there and helped

them where we could. But now that - they are all being considered for the

infrastructure program and the capital works program.

MR. FITZGERALD: Mr. Minister, has your

department ever looked at contracting out such services as engineering services

and assessments? It seems to me that might be one approach where we can save

some money and make better use of some of the people that we have on staff.

MR. REID: I mentioned earlier, in our

engineering service I think we have only four or five people in that total

department. We don't do any engineering generally. We just retain those

engineers in our department to look at what the engineers that are out there in

the private sector send in to it. All our engineering basically goes to a

consultant, 99.9 per cent of it. We don't have an engineering staff. When the

consultants prepare engineering the drawings and so on for projects - water and

sewage and roads and that - then there has to be somebody in our department who

can scan through that to see if it is legal, aboveboard and so forth.

On the appraisal, yes. I'm in the process right now

of doing a complete evaluation of our assessment division. We ran into a bit of

a snag in our estimates, and you will notice in the estimates that our appraisal

division was cut drastically and it was re-instated.

AN HON. MEMBER: (Inaudible).

MR. REID: I'm sorry, that was planning.

I've been asked by a number of communities and by

the Federation of Municipalities why can't some of the communities in the

Province do their own assessment. The problem we have with that of course, and I

guess the previous government had the same problem because they brought in the

system, is that it is quite... a city like St. John's or Corner Brook or some of

the wealthier communities around the Province wouldn't have any problems in

paying for a private assessor. Get out in Bonavista Bay for example and look at

some of your small towns that are incorporated. Would they be able to afford the

assessment services of somebody living in St. John's who would charge you up to

maybe $400 a day? We looked at some of the prices of the private ones and we

found that it was just out of the question. These smaller communities could not

afford to pay professional assessors to come into their communities.

In the wisdom of the previous administration they

brought in a system whereby they charged everybody at a certain level and that

then - the wealthier ones help offset the price of the poorer communities. It is

working quite well but I must say there has been a fair amount of pressure on me

and on previous ministers to re-evaluate our division. Like I said, I'm in the

process of looking at that now, and maybe.... I found that a number of other

provinces in Canada tried it and have now reverted to our system. They had our

similar system, went to public with it, and now are reverting to a government

type of system. They tried it in Alberta and it didn't work, and they reverted,

and a number of other (inaudible).

So I don't know. I can't say for sure, I can't make

a commitment to you. I can tell you this, that we are looking at it and

hopefully we will be able to come up with some answer for you in the next six or

eight months or something.

MR. FITZGERALD: The situation that arose in the

last municipal election where a fire chief could not be part of a municipal

council, I think that has been a thorn in the side of a lot of people out there

today who are doing volunteer work. Many times it wasn't uncommon for the fire

chief or fire department members to be part of municipal councils. Sometimes in

the small rural areas there is only a small number of volunteers that you can

draw from. Is your department looking at allowing that to change and to allow

those people to also represent their community on their councils?

MR. REID: Mr. Chairman, I would think that I

will have my act read probably in the fall. I've got a new municipal act coming

forward which tightens up a lot of these loose ends. Yes, you are absolutely

right, that will be addressed in that act. I totally agree with you. Our people

agree with you as well. That by the time the next election rolls around that

particular

section of the act will be eliminated and people will be able to

qualify.

MR. CHAIRMAN: Thank you, Mr. Minister.

Mr. Matthews.

MR. L. MATTHEWS: Thank you, Mr. Chairman.

Newfoundland Labrador and Housing will come in a little later I guess, Mr.

Minister.

MR. REID: Yes (inaudible).

MR. L. MATTHEWS: (Inaudible). On the question

of the number of municipalities that are out there, incorporated town councils

and local service districts, I've long held a view - I guess it is just a

personal one - that for a population of 500,000 or 600,000 people we are grossly

over-governed, not only at the municipal level but certainly at the school board

level and probably even in this Chamber. I know during the last five years

amalgamation was a process that was gone through in a lot of areas with mixed

reviews, I guess, depending upon what part of the Province you lived in.

Is there any ongoing effort to bring about a

further consolidation of municipalities where it is realistic and sensible to

do, and I guess the second part of the same question is: what, if any,

intentions or value do we see in regional government similar to what we have in

a lot of the county governments I guess, and similar to what we have in a lot of

other provinces, on the amalgamation issue first and then the regional

government one?

MR. REID: I hate to hear that word, regional

government because it is not, hopefully, it won't be as long as I am I suppose.

MR. L. MATTHEWS: It is not what?

MR. REID: Regional government, it is not

regional government. We are hoping that we won't create another tier of

government. I think you will agree with that we have enough government in

Newfoundland now, certainly, and I like to refer to it and my department cringes

when someone calls it a government as council; a regional council concept and

they do have them in other provinces.

We have 289 incorporated communities in the

Province and they are spread around, I think it is 5,600 miles of terrain when

you go from one end of the Province to the other if you sail in every cove and

go up the Labrador Coast. On top of that, we have 185 local service districts

and, you are absolutely right, there is no way in this world that a province

like Newfoundland and Labrador can cope with trying to provide services to all

those particular communities, and especially today when you hear of cases like

Catalina and St. Anthony and Bonavista and a number of places; Harbour Grace is

a prime example, next door to me and where the backbone of the whole community

has been destroyed because of the cod moratorium in this Province (inaudible).

How do they survive? I don't have an answer to that

and I don't think there is anyone in this Province who has an answer. I would

think that if people wanted to continue to live in Catalina and Bonavista, and

Harbour Grace, Seldom and Fogo, then the people who are there are going to have

to take more responsibility themselves as to how they are going to survive in

the area in which they want to stay; and all of you know that it didn't start in

1989, it started in 1987. The government started to realize that there was less

and less money available and the cost to provide services to municipalities, to

help these cases and so on were rising and there was less money coming in and I

suppose to a certain extent, we have had to face I suppose in the last five

years like every other province in Canada.

The concept of regional council is basically to tie

together an area of the Province, and, for everybody more or less, to be

pitching together for their survival, for the survival of a given area, and I

like to use my area for an example, Conception Bay North. You come off Roaches

Line in Conception Bay North and you run into a place called South River, that's

a town council; you go across the bridge and you are in Clarke's Beach, that's a

town council. You go across another bridge and you are in North River and that's

a town council, that is less than a mile of road, and I challenge anyone to tell

me where the dividing lines are or where the boundary lines are because nobody

can tell.

You go over the hill and you have Bay Roberts, I

don't know where the boundary for Bay Roberts is because North River and Bay

Roberts now I think, are intertwined. You pass along there by Shearstown and

then you are in to Spaniard's Bay, and from Spaniard's Bay you are in to Tilting

and from Tilting you are in Island Cove and from Island Cove you are in to

Harbour Grace South and Riverhead and then from Harbour Grace you are in to

Carbonear and then to Victoria and Salmon Cove.

Do you know that in that area we have sixteen fire

trucks? I like to use that area as an area where maybe, if we can talk to

Clarence Randell or whomever is minister after me, can go out and talk to these

mayors and councils and let's come together and let's start purchasing our fuel

for example, or gas for our vehicles, let's do it as a package, let's come

together and do it. Let us operate one incinerator, and by the way, they are

doing it my area; one incinerator takes care of all the waste and garbage in the

area.

Let us look at forming a regional fire fighting

service instead of having sixteen or twenty fire departments in that area, let's

have four or five or maybe we can afford if we get together, to have a paid one.

Let's go into Spaniard's Bay and Bay Roberts and see if there's some way that we

can tie the water and sewerage system together, the types of things that a

regional council would do.

There's one drawback with a regional council idea,

and that's this: Whoever lives in that area should basically be paying the same

tax. So if you're in an area where there's a local service district, a local

service district doesn't pay taxes - no municipal taxes whatsoever - but they

would have to be charged for the services that are being provided by the

government, by the Department of Works, Services and Transportation.

I'm sorry to go on, but it's something that Hazel

Newhook and I basically talked about back in the late seventies and early

eighties. Hazel and I - I remember going to a meeting in Harbour Grace and she

was the Minister of Municipal Affairs, and we talked to people out there about

that concept, and that concept can work if people are willing to come together

and try, for the area, for the betterment of the area, not for the betterment of

Carbonear and Harbour Grace and Bay Roberts or St. John's or Mount Pearl, but

for the area, and you know, Lloyd, there are lots of things we can do in this

Avalon East area, the Northeast Avalon area.

The fire fighting problem that I've got to deal

with right now in regard to the fire fighting services on (inaudible). There's a

prime example. Bring them in, start work, I suppose, hoping that they will work

together. There can be savings, then, for each municipality. The government

doesn't want it back. We would rather see, if there are savings, let them spend

the savings that are created in a given area.

I don't know if that answers your question or not.

MR. L. MATTHEWS: Well, it does. I guess my

comment would be that probably the initiative for that type of thing, as in the

past, rests with, or will have to come, or should come, from the government,

from your department level to... I guess the kicker in it is how to positively

encourage these communities to see the value of that type of council, and come

on side in terms of their thinking so that they can come together and work out

the mechanics of it. That is just a comment that I would commend any activity in

that regard.

MR. REID: The parochial differences between

some communities are unbelievable. I'm sure each one of you run into it, a

catholic community, a protestant community, a community with no council, a

community with a council.

MR. L. MATTHEWS: Doesn't it have to be, though,

almost that the provincial government has to say: Look, this is the concept and

this is the way it has to be. This is a direction for the future, and let's get

on with it.

I suppose then it becomes perceived to be

amalgamation, and that brings with it all of the problems that you're alluding

to, starting with the church and ending up with whatever else.

Thank you, Mr. Minister. I have no further

questions, Mr. Chairman.

MR. CHAIRMAN: Mr. Byrne.

MR. J. BYRNE: Thank you, Mr. Chairman.

You were hoping we could get through this this

morning, Municipal and Provincial Affairs and Newfoundland and Labrador Housing.

I think we can. I don't have a lot of questions, but I have a few general

questions which I want to save for the end and specifics.

We are here to do the estimates, so that's what I'm

going to jump right into. On page 277 of the Estimates for 1994, under the

Executive and Support Services, the Minister's Office, you have the salaries

there $181,100 budgeted for 1994 and you spent $261,000 which is $80,000 more.

You had $189,000 budgeted for 1994-'95. Why the big difference?

MR. REID: Under salaries, $261,000 down to

$189,000; is that what you're saying?

MR. J. BYRNE: From $181,000 up to $261,000

spent in 1993-'94. What you budgeted was $181,000.

MR. REID: Okay, it went up to $261,000 and I

will tell you what happened there, Jack. Basically there were two ministers in

one year, and we had a number of expenses for (inaudible), severance pay, for

example, for some of his staff and that sort of thing. That's where the

difference came from. So we're back down again now to our estimate.

MR. J. BYRNE: The $189,000 is still an

increase, though, of $8,000 and with the cutbacks and freezes in salaries and

stuff, why would that be increasing, from $181,000 up to $189,000?

AN HON. MEMBER: (Inaudible).

MR. REID: He's telling me that we reduced

another activity in another

section and increased that one. That would be based

on -

AN HON. MEMBER: For temporary employment?

MR. REID: - coming from the minister's office.

So it still hasn't changed the overall estimates. Do you know where we reduced

the other one? Not off-hand?

AN HON. MEMBER: (Inaudible).

MR. REID: Under administrative salaries.

MR. J. BYRNE: The next

section -

MR. REID: I don't know Ed, to be honest about

it because I haven't got any extra staff over there. So I can't answer.

AN HON. MEMBER: Just in case you wanted extra

staff.

MR. REID: Just in case I wanted to, well that's

nice of you.

MR. J. BYRNE: No, what I was thinking was

really if the salary of the minister would be increased by -

MR. REID: My salary?

MR. J. BYRNE: Yes.

MR. REID: Oh no, no my salary - no, no, no.

There's no salary increases, no.

MR. J. BYRNE: That's what I was getting at,

there shouldn't be according to the cuts, the freezes and so on.

MR. REID: No, no. I don't believe we received -

off the record, we haven't received our 4 per cent back yet have we?

AN HON. MEMBER: No.

MR. J. BYRNE: No, I don't think so.

MR. REID: I haven't got mine.

MR. J. BYRNE: Under Transportation and

Communications -

MR. REID: What's that?

AN HON. MEMBER: (Inaudible).

MR. REID: It was supposed to be over April 31

wasn't it?

MR. J. BYRNE: But anyway -

MR. REID: No, no, no, your salaries as

ministers, that's set Jack, you can't change that. You can't change that in the

department.

MR. J. BYRNE: Yes, but I was just thinking

about the freeze was in for one year and you might have got it back - is it

continued on or not, I don't know?

MR. REID: It's not there.

MR. J. BYRNE: But anyway, Transportation and

Communications; an extra $10,000 spent there.

MR. REID: Transportation, what

section is that

under, Jack?

MR. J. BYRNE: The minister's office.

MR. REID: That's the same as it was budgeted

for 1994.

MR. J. BYRNE: Oh yes but you budgeted $52,900

and you spent $62,900, $10,000 more spent then budgeted.

MR. REID: Yes, I suppose it was a question of -

MR. J. BYRNE: The reason why I'm bringing this

up is because when I look at it, it's $52,900 budgeted, you spent $62,900 and

then you're back to $52,900. So it had to be something out of the ordinary I

would think.

MR. REID: Well yes and you're absolutely right,

Jack, it's sort of difficult for me here to be able to illustrate to you the

differences. $62,900 is a reflection of, number one; two ministers, number two;

this year our conference was held in British Columbia, the ministerial

conference and when you go to a ministerial conference - Clarence usually goes

with me and one other person. Now Jack, when three people got to go and fly to

Vancouver, it doesn't take very long to whack up $5,000 or $6,000 on flights.

MR. J. BYRNE: Yes, I know.

MR. REID: The year before that the conference

was in Halifax so that may have something to do with it as well.

MR. J. BYRNE: But you would think that would -

MR. REID: You can see that I lowered, basically

my estimates from the previous ministers, put it that way.

MR. J. BYRNE: Okay, the other thing was on the

same

section as purchased services -

MR. REID: Yes.

MR. J. BYRNE: - it went from $3,700 up to

$10,500, what's that extra?

MR. REID: We were told basically to cut back as

much as we could on purchased services. Now I can't explain the $10,500 one but

Clarence can.

MR. RANDELL: Thank you. I thank, Mr. Minister.

I should point out that the $3,400, there's a figure set -

MR. J. BYRNE: No, $3,700.

MR. RANDELL: $3,700 is set by Treasury Board.

In no department in government, in the last thirty years that I've been

involved, has it ever been lowered within those confines, it's never happened.

The cost of purchase services here which includes; entertainment, it includes

activities of the minister, will always range - in fact, even the figure shown

there is still considerably lower than in other departments. You have to

appreciate the fact that in Municipal and Provincial Affairs where the minister

is dealing with 290 municipal councils and a lot of travel allowed that it is

impossible to keep within that figure.

MR. J. BYRNE: Then to my mind if you had $3,700

budgeted for 1994-1995 and you spent $10,500, why didn't you budget $10,500 for

this year?

MR. RANDELL: We would have sir but the option

was not with us as to what would be budgeted.

MR. REID: I would say we will come back next

year we will be up to $10,500 again Jack, chances are. That is Treasury Board,

they set those figures.

MR. J. BYRNE: On page 278 under Administrative

Support, Salaries. Quite an increase. You budgeted $574,900, you spend $549,700,

which was $25,000 less, yet you have $614,700 budgeted for this year. Is the

minister putting new staff in place - what is the story on that?

MR. RANDELL: The principal reason - if I may,

Mr. Minister - for that is that we've added one additional position with the

approval of Treasury Board. That is the Director of Systems and Methods, which

is set at $43,296. That is a position as a result of the expansion of the

database systems within the department.

MR. J. BYRNE: Under the same section, Employee

Benefits there. You had $97,100 budgeted, you spent $50,500, and you have

$97,100 budgeted again. Why such a decrease in that? It is almost a 50 per cent

cut from what you had budgeted and what you actually spent.

MR. REID: Strictly Workers' Compensation, they

tell me here. There was a decrease last year in my - you go ahead and answer

that if you want to. It was Workers' Compensation?

MR. CROKE: Yes, that money there. That money is

there to reimburse Workers' Compensation for expenses that they pay out on

behalf of employees injured in the department. We had the $97,000 allocated but

the expenses were reduced somewhat from that.

MR. J. BYRNE: So you are saying you had less

injuries in the department?

MR. CROKE: There was less injury cost in the

department.

MR. J. BYRNE: Very good. Under Purchased

Services, again, in the same section. You had $445,400 budgeted and spent

$369,000, and you have $395,400 budgeted for 1994-1995. What would those

Purchased Services involve?

MR. REID: Clarence?

MR. RANDELL: I've lost -

MR. REID: Purchased Services on page 278.

MR. J. BYRNE: These questions I'm asking, these

are the proper types of questions to be asked I suppose at this?

MR. REID: Oh yes, nothing wrong with it. Felix,

can you tell us about the Purchased Services.

MR. CROKE: That block of money covers general

advertising for the department, repairs to office equipment, rental of

photocopiers, and it also allocates a block of funds for financial support to

organizations to assist in the cost of receptions and dinners, I'm thinking

about sporting organizations and that type, on regional and national events. The

money is also there for leased accommodations for parts of departments which are

outside Confederation Building.

MR. J. BYRNE: Could I ask for a breakdown of

that? Actual details of what that money was spent on and get a copy?

MR. CROKE: It can be provided.

MR. J. BYRNE: Okay, could I have that?

MR. CROKE: Yes.

MR. J. BYRNE: Please. In due course.

The next one I have is Property, Furnishings and

Equipment. There was $36,000 budgeted and you spent $53,000. You are back to

$40,000 this year. There seems to be quite an override there, $17,000. That is

the same page, page 278, under Administrative Support.

MR. REID: Basically it is the replacement of

office furniture and office equipment in all divisions of our department. The

original amount was $36,000, we went to $53,000 this past year, and we just

brought it back to $40,000 this year. That is another question of being cut by

Treasury Board, basically.

AN HON. MEMBER: Three photocopiers (inaudible).

MR. REID: Three photocopiers had to be

replaced, yes.

MR. J. BYRNE: That had not been budgeted for.

MR. REID: That is right.

MR. J. BYRNE: Page 279, under Administration,

2.1.01.01, Salaries. Twenty-three thousand dollars budgeted more this year than

you actually - budgeted $321,700, spent $339,500, and you budgeted $344,200.

That is another $18,000 over budget. There must have been some - was that

temporary staff or an extra employee or whatever? How come if you are budgeting

that the temporary staff wouldn't be included in the original budget? What was

budgeted?

MR. REID: I'm sorry?

MR. J. BYRNE: If you had $321,700 budgeted for

the year for Salaries, and it increased - and it has happened in a number of

occasions - and it has gone up to $339,500, and you say it is for temporary

staff, but wouldn't you be budgeting for temporary staff when you put your

budget together?

MR. RANDELL: If I may, Mr. Chairman. What you

are finding is that we have a total salary allocation within the department.

MR. J. BYRNE: Okay, so you are juggling it

around.

MR. RANDELL: You are set figures by Treasury

Board and you are asked to confine your total expenditure in salary estimates to

that total figure. What you will find here is that where you will see minor

increases in some salary estimates because of the identification of additional

temporary staff required, other sections will be reduced -

MR. J. BYRNE: Be dropped.

MR. RANDELL: - to stay within that balance. You

will find that occurring right throughout the estimates.

MR. J. BYRNE: Under Assessment Services,

2.1.02. You were asked by Roger with respect to going out and having the towns

hire their own assessors type of thing. I was mayor for seven years and I always

thought that may be a good idea but maybe not. My biggest problem with

assessments is delays. You take Logy Bay - Middle Cove - Outer Cove. It was

incorporated eight years ago and we haven't had a reassessment done in eight

years. They've been after it for the past three years. It is not likely they are

going to get it this year. That directly affects of course the amount of revenue

that they will get according to the mil rate. When do you really and actually

foresee that there will be a real improvement, that they will be happening every

four or five years or whatever the case may be? I've been hearing it now for

eight years.

MR. REID: You will see an increase in our - as

you've said - assessment in regards to Salaries -

MR. J. BYRNE: Yes (inaudible).

MR. REID: - but basically you are absolutely

right. We are hiring - approval has been given in this budget for eight new

positions: Four new municipal assessors and three file clerks with data entry

operators. We are going to have at least four new assessors working with us -

well, hopefully when we can get this passed through the House and so on. Yes,

there will be an increase in our assessment staff, and I was pleased to really

get that. Because when they give us extra money in my department for assessors,

to actually hire new people, that is a step as far as I'm concerned in the right

direction. So you will definitely see a change this year. Hopefully we will be

able to pick up a tremendous amount of that type of thing in the next couple of

years.

MR. RANDELL: If I may, Mr. Minister. In actual

fact the file servers are more critical to us than even the assessors because

that was part of our problem, getting the data down loaded onto the (inaudible).

MR. REID: For that computer system I talked

about earlier. So it looks good, Jack. I'm hoping that within a two-year period

we will have everything on file and be able to just click it off on the

computer. People won't have to wait.

MR. J. BYRNE: There is the other point too,

just with respect to the assessments. Because if the towns wait so long and then

they get a new assessment done, there has been such a time span, people are hit

with these big increases, it is a real shock to them. You know that anyway.

MR. CHAIRMAN: (Inaudible).

MR. WHELAN: Mr. Minister, I have a question

with regard to regional garbage disposal. Over the past two years there has

been, in the particular area that I'm involved with, a study done. I believe it

is called the northeast Avalon garbage disposal study, or something like that.

There was a study done and a report drawn up, I understand. What is the status

on that now? Has there been any decision made as to the route that is going to

be followed? I think there are a number of proposals and a number of options

that have been proposed during that time. Has there been any concrete decision

made as to which route you are going to go? What would be the status on that

report up to this point?

MR. CHAIRMAN: Mr. Randell.

MR. RANDELL: We have not as yet received the

final report. We have received a draft report from the consultants and as you

are aware the consultants also involved a major firm in that area from the

province of New Brunswick working with one of our local firms. We would

anticipate that the final report should be available to us by mid June, and I

would visualize that at that point in time recommendations would flow then from

the technical committee to the minister for appropriate action.

MR. WHELAN: Okay, the next question I am going

to ask is one I am asked every day, what is the status on the infrastructure

program? When will the announcements be made?

MR. REID: To be quite honest about it I thought

I would be able to announce it on Monday past. In fact I spoke to Mr. Tobin,

because the federal people are involved in this as well. We did up our proposals

and sent them to Ottawa for them to look at as well. I thought I would hear from

them by now. In fact I am hoping to get a call from the federal representatives

today to tell me to proceed.

I did announce in the House last week that what we

planned to do immediately is do these emergency ones. We are going to announce

them almost immediately because we have to get some work done. An example of

one, and I will tell you what I am talking about with regards to emergency, the

sewerage problem we have in Deer Lake, for example. We have to create a lagoon

out there. It is a sizable amount of money. It is a big contract and will

probably take two years to do, so we are hoping to be able to announce that one.

Where there are environmental and health concerns we are going to announce a

number of those.

The second batch, or the second amount, we should

have ready early next week to send off to our federal counterparts, and

hopefully within a week we will hear back. I am striving so that we will have it

all announced by the end of the month, everything announced, every cent of

spending this year. Within the next two or three weeks you will hear

announcements, and I guess I will be questioned in the House and ridiculed for

not giving certain people money, and giving more to others and so on, but that

is part of the process. I think that within the next few days you will hear the

first announcement and then within a week you will hear a second announcement.

MR. WHELAN: Just one more question. Within the

fire protection aspect of your department, are there any emergency funds set

aside in case a motor goes, or in case there is a pump that gives out in a

municipality? Apart for the regular allocations that councils apply for from

year to year are there an emergency funds set aside as well?

MR. REID: The answer is, no, basically. We do

not have a backup fund to be able to take care of that sort of thing, but in the

past we found, and especially if it were in a municipality, that there are other

ways we can assist the municipality with regards to a pump, emergency

assistance, or permission to borrow. There are all kinds of ways of doing it but

there is no such thing as a fund set aside for that type of thing.

We go through $1 million of regional fire fighting

equipment and so on. We give that out and then when that is gone basically

that's it. That is all that is in that amount.

MR. WHELAN: Thank you. That's it.

MR. CHAIRMAN: Thank you, Mr. Whelan.

Mr. Fitzgerald.

MR. FITZGERALD: Thank you, Mr. Chairman.

Mr. Minister, I would like to refer back to the

figure that was mentioned by my friend for St. John's East Extern regarding the

minister's office where it shows something like $80,700 from the 1993-94 Budget

up to the revised. It went from $181,000 to $261,00 and I thought you indicated

there were two ministers and that was probably part of severance pay. Is that

not a lot of money to be paid out in severance pay? Considering the other

minister was only here for one term. We certainly don't put forward those kind

of severance packages, do we?

MR. REID: Well, my notes here - and I'll read

them to you, if you don't mind, Mr. Chairman - this provides for salaries of the

minister, special assistant, administrative assistant, two secretaries, a

temporary position of enquiries officer, minister's car allowance, increase in

the 1993-'94 revised budget results from payment of severance, and other salary

benefits incurred when the change to the ministry occurred, and the minister's

office staff during the fiscal year. So there is severance. I doubt very much if

it's that much severance. Clarence, do you have a comment on that or maybe

Felix?

MR. CROKE: The outgoing MHAs, under the present

system, stay on the payroll for, I think, a certain number of months before they

are actually taken off the payroll.

AN HON. MEMBER: (Inaudible).

MR. FITZGERALD: This all new to me, because I

was told, when I got into this profession, that as of election day you either

have a pay cheque or you haven't; you're on your own. So it's all news to me

that somebody would get -

MR. CROKE: (Inaudible) on the payroll and then

you've got three months after the election day.

MR. FITZGERALD: So is that just for Cabinet

ministers?

MR. CROKE: It's for MHAs.

AN HON. MEMBER: And their staff.

MR. CROKE: Plus Cabinet ministers, yes.

MR. FITZGERALD: So are you saying that if an

election was called tomorrow and one of us was defeated that we would draw a pay

cheque for three months following that?

MR. CROKE: At least the Cabinet ministers.

MR. FITZGERALD: So is it just for Cabinet

ministers or for all elected members?

MR. CROKE: Well, I'm not sure about the MHAs,

but at least for Cabinet ministers. They are paid in departments,

whereas MHAs

are paid through the House of Assembly, so we wouldn't -

MR. REID: I didn't know that either.

MR. FITZGERALD: The other part of that is, when

the minister changes from his department, wouldn't it only be the minister and

his executive assistant who would change? The secretaries don't change.

MR. REID: Oh, yes, they do.

MR. FITZGERALD: They do? But it's just the

minister's one secretary, I would assume. It wouldn't be a total change in the

office of the Minister of Municipal Affairs. The staff stays, the deputy

minister stays, the ADMs stay, the secretaries stay. It would only be the

minister -

MR. REID: The executive assistant.

MR. FITZGERALD: His executive assistant.

MR. REID: And, in my case, I have an assistant

over in Newfoundland and Labrador Housing; what's his name?

AN HON. MEMBER: Don O'Keefe.

MR. REID: Don O'Keefe. He's been there now

since - Eric Gullage, I believe, hired him back some years ago. He's under my

staff as well. He's under my estimates as well. He does all of my political work

and my ministerial work through the Housing Corporation. He's over there in the

Housing Corporation even though we're paying through Municipal and Provincial

Affairs. So he's sort of an assistant as well. He handles all the things that

come in to me as a minister, like enquiries from MHAs, that sort of stuff.

MR. FITZGERALD: I realize some of those figures

are probably coming not as a surprise, but it's kind of hard to put your hand

right on the answer. Would it be possible to get a breakdown of that figure,

that $80,700, to be available to the committee? Is that possible?

MR. REID: Yes, sure, I will provide that.

MR. FITZGERALD: I would appreciate that.

MR. REID: I'm not getting any extra out of it;

I can tell you that much. If it's going, it's going to someone else.

MR. FITZGERALD: Sometimes when you get involved

in a job you would like to know what benefits are there and what's available for

you or anybody else. Sometimes you're questioned about those things, and it's

nice to have the answers.

At one time any unincorporated town could always

access a decent water supply if they had a committee formed, and I think it was

five at that particular time, five people, who would form a committee and seek

government funding to put in an artesian well for a community water supply. Some

of those have worked very, very well in some of our smaller communities to

provide a decent source of water and now that's not available any more. I wonder

if the minister is thinking about having such a program re-instated, it is a

wonderful program for rural Newfoundland and it was always the situation if I

recall correctly, that once the well was dug and the pump was put in place in

the house, that it looked after itself after that because most little

communities charged a fee and government never had to go back there any more; it

was a very, very valuable service. Now I think you have to be a local service

district or a community council in order to access that particular service.

MR. REID: That funding is still available. That

goes back-

MR. RANDELL: That change came about as far back

as 1979-1980. The problem with it was, that under the old, what they called

water supply committees, I think that is the one you are referencing, the old

water supply committees were nothing other than that; they were ad hoc

committees. What was happening in many cases, not in all cases I agree, but in

many cases, once the well was dug and the lines were put in place, the water

supply committee had no legal existence and generally they fell apart and

disappeared and the systems tended to fall down around people's ears. In fact,

in a number of instances, individuals claimed they owned the wells and there was

litigation in the courts over it and everything else.

Another problem that they experienced because of

the fact that they weren't a legal entity, is they had no legal means to collect

the rates that they were imposing on the people using the system, so as a result

of that, the creation of the local service district committee, under the

legislation, under the Municipalities Act, created of course a legal entity

which could be held accountable for what was done and of course it had the legal

mechanism to collect any water rates owed to them.

MR. REID: With that, the amount for years and

years and years for those newly formed local service districts that Clarence was

talking about was $500,000. It was through lobbying by myself and Percy Barrett,

I believe, and a few others back in, I guess it was '89 or '90, that the

government doubled that to a million dollars. That's up to a million dollars

today. But I know what you are talking about because I have similar communities

and committees in my district and there is absolutely nothing within the act and

nothing within government that can accommodate them at all.

MR. FITZGERALD: No doubt you have much greater

knowledge about the process than I have, dealing with the overall Province, but

some of those have worked really, really well, a lot of them, I know. In one

little area in my district they have a big bank account built up and they can

buy a pump or they can add other people on because everybody realizes the value

of it and the committee have no problem collecting the money and maintaining the

water supply and it works very well.

MR. REID: Let me say to you that that's the

exception though. There are a lot of good committees out there but for every

good one, there are ten bad ones.

MR. FITZGERALD: The municipal grants to which

you referred, that you had brought back in again, the small grants for ball

fields and what have you; does that fall under the Municipal Infrastructure

Program, and the communities that would be able to apply for those grants, would

their ability to pay back Newfoundland and Labrador Municipal Financing, if they

are in arrears, would that be looked at as far as being eligible for that

program?

MR. REID: No. That's totally free money to

municipalities, to recreation groups, to almost anybody in the Province who can

show us a need. We don't want to go above that $20,000; in fact I am hoping they

are going to be $2,000, $3,000, $4,000, $7,000 rather than $20,000 because if

they all go into $20,000 it is going to reduce it. It is basically free money

that I am going to be able to provide to MHAs and municipalities around the

Province and they will be ranked based on their regional sports and recreation

people, because we have recreation people around the Province.

Applications will go out, I think most by now have

gone out. There's a letter that went out to all municipalities, local service

districts and anybody interested. So no, that's got nothing to do with NMFC.

It's just free money and if you got somebody in your district; a ball team, a

recreation commission, a senior citizens group or almost anybody, ask them to go

to the regional office, pick up an application and get it in. We're there to

help you.

MR. FITZGERALD: So this will go through - like

in our area, Clayton Walsh down in Burin - go through the regional office rather

than the municipal affairs office in St. John's?

MR. REID: Yes.

MR. FITZGERALD: Mr. Minister - I fail to

understand this one, maybe you can enlighten me on it - sometimes when you award

funding to a municipality, it's written up in a proper form and at the end - the

amount of money is shown in the beginning - at the end, as it states quite

clearly, this is not an approval to borrow. Why wouldn't it be an approval to

borrow or why shouldn't the municipality, once they're awarded funding, be able

to take that then and go right to the bank and arrange borrowing after it comes

from your department? Why would they have to come back seeking further approval

to borrow?

MR. RANDELL: The reason that is contained in

the letter is purely to point out to councils that the letter itself is not an

approval to borrow. The approvals to borrow are issued automatically as the work

progresses and the monies are required to be drawn down. What has happened in

the past is that people have taken those letters, before that reference was

there, to the bank and the banks have lent them the money up front. So

effectively what had happened - let's use an illustration, community X have

received approval for $500,000 for a phase of water and sewer, say on May 1,

1994. They rush off to the bank with the letter, borrow the $500,000 on May 1,

1994 but they don't even actually start work until after the design work and so

on is completed. The work may not start until September and may not be completed

until September of the following year. So they've drawn down all this money at

the bank, paying interest at the bank really for no good purpose.

AN HON. MEMBER: Great for the banks.

MR. RANDELL: Great for the banks, but terrible

for the councils and us.

MR. FITZGERALD: Thank you.

Another situation where I fail to understand the

reasoning behind it, maybe you can explain it, is the situation, if I have a

water and sewer project and the government puts forward $400,000 for a new water

and sewer project that's applied for, the bids come in at $200,000. There's

$200,000 left, and that creates a lot of problems out there in some of our

communities, knowing that there's $200,000 left on the table, and they feel that

it's their money and they feel that they should use it.

Number one is - I think I talked with the minister

about this before and we fully agree, and I don't know if he's going to tie this

into his proposal that he will bring forward now - are you looking at putting

forward the approval to do work rather than the amount of money?

Number two, it's a situation where sometimes

government will allow the contract to continue if it's on the main road, or in

the same direction that the water and sewer is progressing.

In my district, in the community of Little

Catalina, we had just reached the biggest problem in the community, the biggest

problem that they had with water and sewer. In fact, it got to the point where

those half-a-dozen houses right now are not using their indoor plumbing, can't

use it, because it's coming up through the ground. It would have cost, I think

government had an estimate back of about $28,000 to service this problem area,

and because it was on a byroad, it was still a continuation, it was a matter of

going off on a branch versus going straight, government would not allow them to

spend $28,000 of probably $70,000 or $80,000 of money that was left over. What's

the reason for that?

MR. REID: The reason for that is this. What we

do with each project as they come in, they're passed to a committee made up of

representatives of the Department of Health, the Department of Environment and

Lands, and ourselves. We sit down and rank every project.

Hypothetically, in your situation, the project in

Bonavista, was it?

MR. FITZGERALD: Little Catalina.

MR. REID: Catalina.

MR. FITZGERALD: The one that I'm referring to,

because that's the one that stands out in my mind.

MR. REID: The first

section that they applied

for probably ranked at eighty-seven. They also applied for that twenty-seven, or

whatever it was, which was a byroad. I know that one in particular ranked much

lower than eighty-seven. Up the road, in another community, there was a project

that ranked eighty-six. Now, I ask you, who do you give that extra money to that

we've got left over because the contract came in lower? Do we give it to the

community up the road that ranked eighty-six, or do we continue doing work in

that community that ranked much lower than eighty-six?

I contend that if we're using a ranking system, and

if there's money left over, like you said, it should go in turn to the people

who rank, because if you don't do that then there's no purpose of a ranking

system - no purpose having a ranking system there.

So you're absolutely right, but if there's $200,000

left over from a project in Catalina and the next project that Catalina has only

ranks sixty, and there's a project in Carbonear that ranks eighty, that $200,000

is taken from Catalina and given to Carbonear, and that's basically how we

operate, and that's how we're going to operate under the infrastructure program

as well, exactly the same way.

MR. FITZGERALD: But it didn't seem to be a

problem with ranking if it was on the main street, if it was a continuation -

MR. REID: No, no.

MR. FITZGERALD: That's the question that's

continually asked. When I called, that was the first question put forward. Is it

a continuation or is it a branch? If it's a continuation, there's no problem. If

it's a branch, you'll have to come back and we will ...

MR. REID: It's based on ranking. If it's a

continuation, if you're going down through Water Street in Bonavista and you're

stopping half-way down through, and next year, then, you apply for the next

section, chances are it's going to rank the same as last year's, if it's a

continuation of a project.

If you're going off to a side street it's ranked

entirely different, going off on another street. In that particular case, that

side street that you were talking about, ranked much lower than the job that you

had on the main street, Catalina. It has to do with ranking, nothing else. It

has nothing to do with what you're saying. It's ranking, and ranking only. It's

got to be.

If that side road ranked the same as the main road,

chances are we will give permission to go over and spend your $27,000 or $28,000

or whatever you were looking for. I don't know who is telling you any different

than that. I'm hoping that no one -

MR. FITZGERALD: That was my understanding. It

could have been continued if it was on the same road that the water and sewer

had stopped.

MR. REID: It would have been if it was ranked,

yes. If it was on the same road, yes. If the money was left over and it was

ranked there would have been no problems with continuing on. There is something

else involved here too, it is the continuation of the contract. That is under

the public tendering act, right? If you are going along a road and you have an

open ditch and you come to the government and ask the government for a

continuation because you've got so much money left over, under the public

tendering act if they are there on the spot and they are doing the work and it

is only a continuation of that contract there is no problem with that. Up to a

certain limit, $100,000 or something.

But now, if you are looking at going off that

project, if it is not a continuation and it is something new, then the public

tendering act won't allow you to do that. There are a number of questions there

that have to be raised. You are absolutely right, if it is a continuation of the

project there is no problem.

MR. FITZGERALD: How about the announcement of

money? Are you looking at announcing the projects rather than money?

MR. REID: I can't do it under infrastructure.

We are looking at next year's - under next year's - when we get back I suppose

eventually to the capital works program, I'm hoping that is the way we are going

to do it, yes.

MR. FITZGERALD: It would certainly do away with

a lot of confusion and a lot of phone calls and trips to your office, I would

think.

MR. REID: Pardon me? I'm sorry.

MR. FITZGERALD: I said it probably would do

away with a lot of phone calls and trips and visits to your office if you

announced it as projects rather than money, I would think, because everybody

seems to think if the money is announced that it is there.

MR. REID: Under the infrastructure program now

I think they are going to get it all anyway, aren't they? There won't be any

slippage on the infrastructure, no. The way we are doing the infrastructure

program there is no slippage. Whatever the contract costs then the

municipalities will get that amount of money and that is the extent of it.

MR. FITZGERALD: Thank you.

MR. CHAIRMAN: Thank you, minister.

Mr. Noel.

MR. NOEL: No, I have nothing, thank you.

MR. CHAIRMAN: Okay.

MR. NOEL: Oh, there is just one thing I would

like to ask. I'm not sure if when I was away this was answered. The regional

services board. In the St. John's area. What is going on with that? What is the

latest?

MR. REID: We are not involved in that.

AN HON. MEMBER: Fire fighting.

MR. REID: Oh, fire fighting regional services?

Yes. There is a Cabinet committee in place that has been meeting almost on a

regular basis now I suppose for the past year. I've met every council

individually and I've met every council and mayor collectively. In the last

meeting that I had with them I basically made a number of proposals to them that

some of them were pleased with, some weren't. I asked them basically to go back

and try to work out a system on their own, where there are some new councillors

and a change of council in St. John's and so on.

I thought that there was room for negotiations.

They are meeting now on their own and hopefully within the next week I'm going

to call them back in. I will be quite honest and say this, Walter. Sooner or

later this problem has to be resolved. This has been on the board for the last

two years and -

MR. NOEL: That is the point I was making.

MR. REID: Pardon me?

MR. NOEL: That is the point I would make. This

has dragged out a hell of a long time.

MR. REID: Yes. This is a last-ditch effort

right now on my part to try. Basically the comment I made to them was: Did they

want me as the minister to come in and impose unilaterally a decision? Most of

them agreed that they would go back and have one last kick at the cat. If that

doesn't happen, if they can't get an agreement within the next couple of weeks,

then I will be willing to recommend to my Cabinet colleagues a formula and ask

for that formula to be introduced and then they will have no other choice. They

will have to accept what I'm offering. But I've been trying to be as cooperative

as I possibly can with them.

We've suggested changes to the make-up of the board

to make it fair, we've suggested a better system, we've suggested that maybe the

government could pick up some funding for the 911 service in St. John's, which

would offset some of their costs. There were a number of proposals we made. Some

of them were almost agreed upon immediately. But there were a couple of other

contentious ones and.... You will have an answer on that, sir, before the end of

the month.

MR. NOEL: Are you content with how municipal

government has worked out in the St. John's region as a result of the changes a

few years ago? Have you given any consideration to looking at that again?

MR. REID: Do you want my personal opinion or

the opinion of the department?

MR. NOEL: Both.

MR. REID: My personal opinion is that we have a

conglomeration of communities on this northeast Avalon who are using the

services of the larger city of St. John's and not paying nearly the amount of

tax for the services that are being provided. Even though some of them are

living outside of St. John's, in the vast majority of cases they're using the

St. John's services and that's just one case in particular with the regional

fire services. There will be other cases I'm sure come forward.

We have one town, I'm not at liberty to tell which

one it is, but we have one town right now that's in pretty strong financial

difficulty and maybe they shouldn't be a town. Maybe they should be part of the

City of St. John's and be taken under the wing of the City of St. John's. I

personally think they'd find things a lot better.

There's no plans to further amalgamate at the

present time but I have to be honest and say to you that I haven't just

forgotten about the idea. In fact, in my office is a map of the northeast Avalon

and I can't in all sincerity say to you that in my time as minister there will

never be an amalgamation of some communities in the northeast because I can't.

Personally speaking, it should have been done years ago. Now I've gone to far,

even in saying that but -

MR. NOEL: Have you gone to far on your own part

or on the departments part?

MR. REID: I've gone to far on my own part. The

government has no intention, at this particular point in time, of pursuing any

further the amalgamation question on the northeast Avalon, at this particular

time, but when problems arise like the northeast Avalon fire fighting service,

that question arises with it. Maybe the answer to it would be to do it that way

but in regards to government itself making any plans to amalgamate any further

on these towns, it's not happening, not right now.

MR. NOEL: I think you should look at it a bit

more actively because I think serious changes have to be made in the way the

municipal government operates in this region. I think the changes that were made

have not done the job and as you say, there are lots of inequities in the tax

levels of people in communities around St. John's compared to people within the

city. My constituents are not happy with that. Could your department provide me

with a list of tax levels, mil rates and that, in this region?

MR. REID: No problem.

MR. NOEL: Thank you.

MR. REID: You'll find some drastic differences

too.

MR. CHAIRMAN: Thank you Mr. Noel, thank you Mr.

Minister. Mr. Byrne.

MR. J. BYRNE: Thank you, Mr. Chairman. With

respect to the regional fire services, I was going to bring that up myself to

try and find out the story of the situation at this point in time. I've been

talking to a couple of the towns myself on this and of course we always had a

problem down there with the board make up and that's going to be addressed. The

formula that you're talking about now is, I think there was a 10 per cent

decrease if you don't have certain services and 10 per cent more if you have

none, no water and sewer type of thing. So it would be a 20 per cent decrease.

Take the Town of Logy Bay for example, the

government causes problems themselves by requiring in the legislation that

certain towns be involved in the regional fire board and not all towns. So if

you take a town like Logy Bay-Middle Cove-Outer Cove that went from $30,000 up

to $130,000 a year - and if they have a fire in that town, the house burns to

the ground, there's no ifs, ands or buts about it. In the past seven or eight

years, since I've been down there, we've had three fires and the three houses

burned down to the ground. The example was made that we're not getting the same

services and all kinds of reasons. I made a presentation to the regional fire

committee when I was mayor down there and they scoffed at me. It wasn't even

looked at and that's the reason why the problems arose in the first place but if

you're going to enforce a formula, that is if you take a small town like Logy

Bay-Middle Cove-Outer Cove, they're going to end up paying $100,000 a year for

fire fighting services.

That is more than any other small town around on

the northeast Avalon or up the Southern Shore from Holyrood Cross over to

Witless Bay, and even more than the town of Torbay and Pouch Cove which have

their own departments. The town of Logy Bay - Middle Cove - Outer Cove is going

to end up paying more than those people are paying per year, and know if a house

catches fire the house will burn to the ground - that is a serious

consideration. I think you should give some serious consideration to that when

you are talking about putting a formula in place.

That town in particular now is getting I think

something like $50,000 or $60,000 a year in grants from Municipal and Provincial

Affairs, or from the government. That is the total amount of money they are

getting, cut back 60 per cent, 70 percent in the past five years, and they are

going to end up paying $100,000. It has been a major problem, it has been a sore

situation with me since it was first brought in with respect to legislation.

Maybe the government should look at excluding that town from the regional fire

service and let them go with Torbay. Maybe Torbay and that town can get

together. If they have to pay out $100,000 a year they could hire their own

people down there and have some permanent, at least during the day, employees in

the region.

The situation now where we have four or five towns

in the northeast Avalon and the two cities, a regional fire service - it is not,

it is a farce, as far as I'm concerned, the whole situation. It is again due to

the amalgamation process and the poor thought, poor planning, the whole thing

that went into that from the beginning. Anyway, enough said on that.

Back to the estimates. Page 281, Urban and Rural

Planning. The salaries were cut by more than half. You mentioned earlier, that

you were going to lay off something like fourteen people I think you told me in

the House. So they are re-instated and there is no worry about those jobs in the

next year or two. I mean, it is -

MR. REID: I can't go that far. There is no

worry about those jobs this year. I can't say what is going to happen next year

to them. Or anybody in my department, for that matter.

MR. J. BYRNE: No.

MR. REID: Me included, or him for that matter.

I can't say. For this year, no, they are re-instated now, they are back to work,

and there is no problem at this point in time.

MR. J. BYRNE: So basically was the department

coming from the train of thought that this would be a good area to privatize

again, to send it out to private industry and let private industry take care of

it, and down load it to the municipalities as they have been doing?

MR. REID: I was asked to do a report on that

particular aspect of my department. I didn't have the report done. It just

happened that on the day that my estimates were being done by Treasury Board

they assumed that the report that I was going to come back with was a report

similar to a report that they had done some years prior. When I came back and I

proved to Treasury Board and to my colleagues in Cabinet that: Here is the case,

here is what it would cost towns if we don't do this. It would disrupt planning

in the area. Please give me at least some time to go back and study this further

and make a further presentation. At that point in time Treasury Board agreed and

the Cabinet agreed that that amount of money would be put back into my

estimates. Of course, everything was printed prior, before I had a chance to do

that, so it doesn't reflect that in the estimate. They are all back to work and

they will be there for a year at least.

MR. J. BYRNE: With respect to the study done on

the northeast Avalon with respect to the solid waste disposal. I was under the

impression, because I was chairman of northeast Avalon towns when that came

forward and they asked the northeast Avalon towns to sponsor that or be involved

with it. I thought today was that there would be a report made to a certain

extent, but before the final report was made with respect to the locations for

the dumps or incinerators, or whatever the case may be, there would be a lot of

public input, they would be having public hearings, and then before they make

the final report all that would be done. Is that the point? Because I was

getting the impression the report was coming in mid-June and there have been no

public hearings yet.

MR. REID: No, we are. You are absolutely right.

That is the route we are taking. That is the route we are going to take. We are

going to go to public hearings and get as much input into it as we possibly can.

MR. J. BYRNE: So a final report can't be in

June. I was expecting a report the fall.

MR. REID: The final report isn't in yet, we

have another month yet. When we get the final report in then we will take it and

go on the road with it and we will get as much input into it as we possibly can.

MR. J. BYRNE: But is the final report going to

be making these recommendations before they have public hearings? Or would they

have the public hearings first and then make the recommendations?

MR. REID: Public hearings first.

AN HON. MEMBER: (Inaudible).

MR. REID: No, the report will come after the

public hearings.

MR. J. BYRNE: What is coming in June?

MR. RANDELL: I do not see why the hearings will

be delayed until the fall. My understanding is they were going to try and have

these completed before the end of June.

MR. J. BYRNE: That quickly? Okay.

On Page 282 under Administration and Planning,

Section 5, Professional Services. You had budgeted $105,000, spent $105,000 and

yet you have $25,000 budgeted for 1994-95. That is an $80,000 cut. What are

those services and why such a cut?

MR. CROKE: In the 1993-94 Budget there was an

$80,000 contract to complete the Waterford-Kenmount sewer study. That has been

completed now and the funds are not required in the 1994-95 year.

MR. J. BYRNE: Thank you.

On Page 283,

Section 2.3.04, Waste Management

Facilities, you have Professional Services $50,000 budgeted, you spent $85,000,

and you budgeted for 1994-95, $50,000 again. Why the increase of $35,000? On

Page 283,

Section 2.3.04, Waste Management Facilities, Professional Services.

What are the professional services and why an increase of $35,000?

MR. REID: Where is the increase? I do not see

an increase of $35,000.

MR. J. BYRNE: Professional Services. You

budgeted $50,000 and you spent $85,000.

MR. REID: The increase in the 1993-94 revised

Budget results from the approval of a number of studies into regional disposal

facilities which will serve several communities, and these studies had to be

funded 100 per cent by government. There were a number of studies that needed to

be done around the Province so all we did was ask for the extra money, $35,000.

There was the one on the Burin Peninsula, the one in Harbour Grace, one down in

Summerford- New World Island, in that area - oh, I cannot remember, there were

just a number of studies, $10,000 type things.

MR. J. BYRNE: I want to ask a few more

questions. I am trying to get through my time.

MR. CHAIRMAN: Actually, you are over time, Mr.

Byrne, but we are going to let you go on.

MR. J. BYRNE: Is that right?

On Page 284 under water and sewer servicing -

coastal Labrador. Under Sections 5 and 6 you have Professional Services and

Purchased Services. You had $178,000 budgeted, you spent $524,000, and you

almost have that doubled for 1994-95. Then under Purchased Services you had

$2,860,000 budgeted, you spent just over $2 million and yet you have that

doubled for 1994-95.

MR. REID: That is basically because the

Labrador agreement ran out last year, the Labrador native agreement ran out last

year and there was no money being spent last year, or not that much money being

spent this year. There is a new agreement in place. It is going to be announced,

I think, hopefully on Friday, and we will need that extra money to be able to

accommodate the new agreement that the feds are bringing in place.

You know about the Labrador native agreement? Are

you familiar with that? That is basically federal government money that we

administer, 70/30. This year there will be a lot of money spent on Labrador so

we need that extra money to cope with that. Last year the agreement was out and

we hardly spent any up there at all.

MR. J. BYRNE: On Page 286, Municipal Councils.

You have grants and subsidies. You budgeted $287,000, you spent $291,000 and

this year you have $685,000 budgeted. Well, that is double. Why such an increase

in that? That is Page 286 under

Section 3.2.05, municipal councils, grants and

subsidies.

MR. REID: There were four stadiums. (Inaudible)

towards debt charges and certain other expenses including the activity and

provision and payment of the provincial share of the financial cost of

facilities provided under regional recreation facilities. Those regional

recreation facilities were, Bonavista North, the Connaigre Peninsula and Port au

Choix, $162,700 for Bonavista and the Connaigre and $82,700 for Port de Choix

and they were opened last year. They were opened last year and that's our

portion which we have to start paying this year.

MR. J. BYRNE: So it is doubled for this year,

$685,000?

MR. REID: Yes.

MR. J. BYRNE: While I am on that you talk about

regional facilities and this has been a problem that I have been having for a

long, long while; we almost had them a few years ago, but down in the northeast

Avalon, when you take Logy Bay, New Cove, Outer Cove, Torbay, Flatrock, Pouch

Cove, Bauline, all those areas, there is not a stadium down there and with the

minor hockey and the hockey in the area, if those five towns came together to

make a presentation to get a facility down there, say for the next year, under

the Canada/Newfoundland Infrastructure Program, what kind of priority would be

given to something from that perspective of coming together rather than just an

individual town?

MR. REID: I can't say how much priority they

would be given, member, but the first thing you would have to do is, get a

number of towns to come together and sign an agreement because the government

has a policy they will not fund anything unless it's regional. The formula then

would be 80/20. Now if you are talking under the infrastructure program, knock

off one-third and then it is 80/20 of the rest, so it is a great time to do it,

and if you are going to do it, now is a good time to do it.

AN HON. MEMBER: Up to $1.5.

MR. REID: Up to $1.5 million. I can't say what

priority they would have.

MR. J. BYRNE: No, no, I am not asking would

they have to do it like that, do they have priority over, say, Bonavista

somewhere but, from the perspective of a regional five towns coming together

versus one single town.

MR. REID: Oh definitely, oh yes, definitely.

That's government policy anyway; they would certainly have priority over that,

yes, sure, definitely.

MR. J. BYRNE: Okay. The next one I have to

question you on is on page 288. You have the Canada-Newfoundland Infrastructure

Program, and I am not quite clear what happened here. The government each year

had so much money that they put into the municipalities, $40-odd million I think

it was for capital works and that type of stuff. Did the provincial government

this year, take the federal government, the Canada infrastructure money, and not

put in their own into that program? What is actually going on there?

MR. REID: Well, let me just answer it, going

back to what you said first. Every year the government put so much in capital

works, okay? If you go back to - and I am not being facetious and I am being

honest with you, you can go and check it out, go back to '85, the previous

government, you saw them run from $20, 25, 27, 28, 20 million, any given year

the capital work budget can change by as much as $20 million. In the past three

years, this government has been holding it around the $46, 44 million range, for

capital works. I was, and to be quite honest about it, I was told early in the

year that our capital works budget in Municipal and Provincial Affairs will have

to be drastically cut this year because of the amount of money that we have been

financing through Newfoundland Financial Corporation and so on.

If we did not have the infrastructure program this

year, I would say that we would have been lucky if we had gotten $25 million.

Now that would have been a drop of about $20 million and if you look at John

Effort's estimates, you will see the same thing happened to him; you know,

exactly the same thing happened to him, he lost so much money this year in

capital because of the economic situation in the Province so, let's say that I

would have been lucky enough to get $25 million for capital works and then the

infrastructure program was announced; what we did with the infrastructure

program, it came out first of all on a one-third, one-third basis.

MR. J. BYRNE: Yes.

MR. REID: I had a really serious problem with

that one-third, one-third, one-third because you have communities in your

district for example that couldn't afford one-third and can't afford one-third.

You certainly have them Roger, and I have them in mine. There is no way, if they

wanted $100,000 towards a project, they would have to come up with $33,000. Now

when you think of some of them looking for $1 million and $2 million, they just

couldn't afford to do it.

I went back to Cabinet and I said: look, let's take

the infrastructure program and use it on the same criteria and the same basis as

we use our capital works, and that basically means that a large number of

communities won't have to pay a cent because they are up to the $328 per

household for taxes and that sort of thing and it would also mean that the City

of St. John's for example, and Corner Brook, the wealthier ones would have to

pay the whole shot with the exception of the one-third from the feds.

To shorten this up, you are asking me basically:

Are we doing a capital works project this year? In our estimates right now in

our department, we are estimating right now that the provincial government could

be as high as $60 million. That will be our contribution towards the

infrastructure program. If I had only got my $20 million that would be three

times larger. That is our contribution, the Province's. The reason our

contribution is not the one-third any more - maybe in some cases it is up to 60

per cent, Art, am I right? - we are paying the whole shot is because of the way

we have our criteria arranged for capital works. Some communities which are

paying up to $328 per household, they've reached that level, so all their water

and sewage goes to them now for nothing. They don't have to pay anything towards

it. Do you follow me?

MR. J. BYRNE: Yes.

MR. REID: But someone has to pay it, so

government picks up 100 per cent of the cost of it.

MR. J. BYRNE: Okay.

MR. REID: So we are up -

AN HON. MEMBER: (Inaudible).

MR. REID: - $60 million that the Province will

have to contribute this year to the infrastructure program.

MR. J. BYRNE: I must be getting something

confused. Because as you know, over the past four years I suppose the government

has been cutting the grants to the municipalities and they've been cut by as

much as 60 per cent. That is a fact.

MR. REID: Yes, grants, you are talking MOG, you

are talking about municipal operating grants. That has nothing to do with what

we were just talking about. That is different altogether.

MR. J. BYRNE: (Inaudible).

MR. REID: That is money that we give them for

operating. We are talking capital.

MR. CHAIRMAN: Excuse me for a minute. Thank

you, minister. I think Mr. Whelan has a couple of questions, Mr. Byrne, so we

will go to him and then we can come back to you -

MR. J. BYRNE: I'm almost finished actually.

MR. CHAIRMAN: - and we will give you another

twenty minutes.

Mr. Whelan.

MR. WHELAN: I'm more or less going to pick up

where Mr. Byrne left off. With regard to the infrastructure program and the

communities which would be completely financed and the communities which would

have to pay 60 per cent or 66 per cent themselves, what is the ratio? How many

communities are in a situation where you feel that they can't afford to pay

their 33 per cent and will be reimbursed for 100 per cent of the projects? What

is the ratio? Because it is a very contentious issue in my district, as Mr.

Randell knows.

They feel that the only reason they are not in the

situation that other people are in is because they haven't been able to get the

money to borrow. That is the only reason why they find themselves now out in the

cold. The other communities have down through the years received money and

received capital funding and they have a lot of facilities that communities

which are not in the same position don't have the same amount of debt. They are

finding themselves in that situation because they couldn't get the money to

borrow and they don't have as many facilities as the communities which have a

lot of debt. Now they find themselves they are out in the cold again, because

they are not up to the $328 magic number per household per year -

MR. REID: That is only for water and sewage

now, don't forget. Not for roads.

MR. WHELAN: Water and sewage and roads too?

MR. REID: You still have to pay your roads. It

has to be 60-40. You can't take roads into consideration at all.

MR. WHELAN: Well, even at water and sewer it is

still -

MR. REID: Clarence, do you want to answer that?

It is going to be a long answer.

MR. RANDELL: Basically, minister, what

government has done under the infrastructure program is simply said that they

will pursue the same policy as they do under the normal water and sewer program.

Basically, government will only provide subsidy where the level of contribution

on the local level equates with the rate per household which currently stands at

$328 per household. Until a municipality reaches that level they will assume

responsibility for the total share of the debt charge.

Basically, most municipalities that are caught in

that situation where they are paying all of it and will continue to do so under

the infrastructure program will be large centres like St. John's, Mount Pearl,

Corner Brook -

AN HON. MEMBER: Carbonear.

MR. WHELAN: Holyrood, Colliers, Conception

Harbour, Avondale. Out in the smaller places too.

MR. RANDELL: Yes, there will be a number of

smaller places, simply because they have not borrowed and they have not incurred

the capital debt up to this point in time. But if you are going to treat

everyone fairly, whether they have it now or they are going to acquire it, then

you simply set a level as government has done at $328.

I think it would be relatively unfair to say to,

say, Holyrood today: You can have the money and it won't cost you, at the same

time that Conception Bay South is paying the maximum and are going to be told

that you will have to pay in addition to that.

MR. WHELAN: As I mentioned before, the reason

they're paying the maximum is because the money was made available to them in

years prior and they've received the benefit of the money that they borrowed. If

Holyrood had been allowed to borrow or Colliers, Conception Harbour or Avondale

to receive these facilities, they would have gladly taken it and it would have

been up to the $328 figure but the money just wasn't made available to them.

MR. RANDELL: But Mr. Whelan, whether it was

yesterday or today and they're up to the $328, I'm sorry, I don't get the

difference.

MR. WHELAN: Yes I know Dave, but what I'm

saying is that if the money had been available to them ten years ago for example

- and they were applying for it for fifteen years but the money just wasn't made

available to them. If it had been, at that time, they would have had to increase

their taxes to bring them up to a rate of $328 per year but that money wasn't

made available. It wasn't their fault that they find themselves in a situation

now where they don't have a lot of debt but that doesn't mean that they can

afford any better than the other communities to go out and borrow under this

infrastructure program. I don't know if I'm making myself clear or not.

MR. RANDELL: I'm not clear, Sir, in terms of

why it's any different for Holyrood now to have to pay $328 and attain a tax

level to be able to afford that then it was for Conception Bay South to do the

same today. It's only a question of when they reach that level - or I guess the

old argument, I could have brought a serviced building lot in St. John's twenty

years ago for $15,000. If I want the same lot now in 1994 I'm going to have to

pay $60,000.

MR. WHELAN: What is the ratio? I asked you

before - there are a number of communities around who just don't fall into the

category whereby they come up to the $328 per annum.

MR. REID: About thirty communities.

MR. WHELAN: About thirty communities.

MR. REID: If it's that many. You know there's

the Stephenvilles, the Deer Lakes, the Corner Brooks, the Ganders, the Grand

Falls, Labrador Cities, Goose Bays -

AN HON. MEMBER: (Inaudible).

MR. REID: - and the ones who only got their

first amount of money in the last couple of years. Because as you're giving them

money now - if one of your towns applies for money now and they're not up to the

$328, basically if they get the money they're still going to have to pay for it

until they're up to that level but by the time they have that -

MR. WHELAN: So I believe I have six

municipalities in my district and out of the six only two who would apply would

qualify for the 100 per cent, I have four that don't. That's a fairly high

percentage when you're talking about the Province as a whole.

MR. REID: Yes, but look at the advantage you

got as a member only having six communities living so close to St. John's.

MR. CHAIRMAN: Any further questions?

MR. WHELAN: Thank you, Mr. Minister.

MR. CHAIRMAN: Mr. Fitzgerald.

MR. FITZGERALD: I just have one brief question.

I'm not clear on this municipal infrastructure program either and when the

minister stated that - or did I understand him correctly - that there are some

communities who are getting the Newfoundland Provincial-Federal Infrastructure

Program through 100 per cent funding?

MR. REID: Yes.

MR. FITZGERALD: Why would you not include the

Town of Bonavista, which is one of the biggest communities on the northeast

coast, taking into consideration where they find themselves now with the fishery

and with little or no tax base in the community, why would those people not be

considered for that program?

MR. REID: Because I've asked the Town of

Bonavista - I've explained that they have a financial problem, they owe NMFC x

number of dollars - I've told them that I'd like for them to come in and sit

down and talk to me about their financial problem and we'll work out some sort

of a system whereby they can pay it off over - and I'm being nice here - four

years -

MR. FITZGERALD: And they haven't responded?

MR. REID: - and they basically said, we don't

want to. It's as simple as that.

MR. FITZGERALD: It seems strange because I know

it was only the other day I was talking to the deputy mayor and wondering when

the infrastructure program funding was going to be announced.

MR. REID: Well, we were working last night

until 11:00, and I am sure somebody in the group told me last night that we

hadn't heard from Bonavista.

MR. FITZGERALD: You might be 100 per cent

right.

MR. REID: Because I asked. I was going down

through the preliminary list, that second list I'm talking about in

infrastructure, and one of the first ones I noticed was Bonavista - where's

Bonavista? Somebody looked it up and said: Well, I'm sorry, Minister, but

there's an MC saying that we can't give Bonavista any money because they haven't

come in and made arrangements with us in regard to their debt charges. So I've

got my hands tied, and you've certainly got your hands tied as well on this one.

MR. FITZGERALD: Is it a situation where it's

too late for them to consider?

MR. REID: It's a two year program, too, don't

forget, so it's probably not too late.

MR. FITZGERALD: Are we just talking about water

and sewer, or paving as well?

MR. REID: That's anything. It could be

anything.

MR. FITZGERALD: All capital funding?

MR. REID: Yes.

MR. FITZGERALD: Thank you.

MR. CHAIRMAN: If I might make one comment on

Bonavista - I'm allowed to do this, by the way - or on the Bonavista Peninsula,

we've got 1997 coming up, which is a big year for tourists and tourism, and I

think that all of these communities on the tip of the Bonavista Peninsula, if

there's any money available to municipalities, they should all be taking up this

money so that we can get ready for 1997.

There's a lot of work in a lot of these communities

MR. REID: Yes, there's going to be a lot of

other monies available through tourism, too, for your area. I'm not in a

position to announce it, or say anything, but I know there's going to be a fair

amount of money available through the provincial and federal government, so

you're absolutely right.

MR. CHAIRMAN: Thank you. Mr. Byrne.

MR. J. BYRNE: Mr. Minister, these are related

to Newfoundland and Labrador Housing, but they're general and I think you can

answer them and maybe we can get through this.

MR. REID: I've got Bob and them out there

waiting to come in.

MR. J. BYRNE: There's no need for them to come

in.

MR. REID: No need?

MR. J. BYRNE: Not for my questions.

MR. REID: Great.

MR. J. BYRNE: Number one, is there any thought

being given to privatizing certain sections or parts of Newfoundland and

Labrador Housing with respect to - I understand the need for Newfoundland and

Labrador Housing with respect to the subsidized housing and that type of thing,

but they're into land development and they're in competition with private

industry. Has there been any thought given to privatizing sections of that?

MR. REID: In the past year the approach that

we've taken under my ministry and, I suppose, direction from Cabinet, is that we

have to try to privatize every possible thing that we can.

We're in the process now of selling Elizabeth

Towers. We're in the process of selling Churchill Square.

AN HON. MEMBER: (Inaudible).

MR. REID: Just about all the units in

Pleasantville, I believe we've got one building left in Pleasantville.

Stephenville is just about all sold and yes, you're absolutely right,

privatization.

Now in regard to land development, like Southlands

and so on, 99 per cent of the work that will be done on those land development

areas from now on will be done by the private sector, and all we'll be doing

there is basically providing some sort of direction and control in regard to

environmental concerns and that sort of thing.

I don't know, maybe in a year or two down the road

that might change as well but yes, we're definitely going towards privatization.

MR. J. BYRNE: But the land development, once

you get into putting subdivisions in place and everything, and Newfoundland and

Labrador Housing sells the lots, any profit there is going to - they contract

out a lot of the work, I understand, the engineering work or whatever the case

may be, but any profits from the sale of lots goes to Newfoundland and Labrador

Housing which I imagine in turn is used to help subsidize -

MR. REID: Social housing.

MR. J. BYRNE: Social housing, right?

MR. REID: That's right.

MR. J. BYRNE: So there's going to be some kind

of a connection that you'll have to look at right there, but the answer is yes.

The other one was, with respect to Newfoundland and

Labrador Housing, I understand that housing has a list, or a source list I would

imagine, of contractors that they use to do repairs and renovations; if housing

buys an old house and are going to do it up type of thing -

MR. REID: That's correct.

MR. J. BYRNE: - and if they're going to build

new housing I know they tender it out, type of thing, and people tender on it,

but I'm sure there's a list that they have for up to certain amounts of work

that could be - like, some individual could phone up Joe Blow and say: Okay,

here's a job; do it.

MR. REID: They're called standing offers.

MR. J. BYRNE: Standing offers; that's the word

I'm looking for - right on.

MR. REID: We have them all over the Province.

MR. J. BYRNE: Yes. So can I get a list of the

contractors, companies and/or individuals, that are on that standing order list

MR. REID: No problem.

MR. J. BYRNE: - and the breakdown of work that

each individual has been asked to do and has done this past year? That should be

easily attainable.

MR. REID: Bob is smiling out there. Bob, yes or

no? Yes? Okay, no problem. There is no problem, it is just that I'm just

wondering how much trouble my staff are going to have to have to go back through

and pick it all out.

MR. J. BYRNE: It is only for one year.

MR. REID: I will provide it for you, for one

year, no problem.

MR. J. BYRNE: One year shouldn't be a big

problem.

MR. REID: No problem, yes.

MR. J. BYRNE: That can be sent directly to me

or to the -

MR. REID: I will send it directly to you, sir,

personally, from Newfoundland and Labrador Housing.

MR. J. BYRNE: Thank you. That is all I have for

now.

MR. REID: You have to remember, and let me just

re-emphasize something here to the Committee for the record. The Government of

Newfoundland and Labrador next year will only put $15 million - basically $15.3

million - into the total budget of the Housing Corporation.

MR. J. BYRNE: (Inaudible).

MR. REID: That doesn't sound like very much

money, does it? That is all the government will put in. We will spend next year

maybe $280 million, $300 million, in regards to our social housing program, our

connection with the federal government, and everything else. The monies that we

make on Southlands, on selling Elizabeth Towers, on selling land in Stephenville

and so on, that goes back into our pot. Then we take it, we go out and we help

the native community, we help the seniors in the Province, we help the poor in

the Province. We will spend with the federal government almost $300 million this

year, remembering that the provincial government only puts $15 million into that

whole program. That is not very much.

So even though a lot of people say: Newfoundland

and Labrador Housing should not be out there doing work that the private sector

does, if they are not out there making money then we are going to have to deal

with the other side of the coin and ask: Where will the money come from to

provide social housing in Bonavista or in Torbay or in Holyrood or wherever it

is? Where will the money come from? The government will have to increase its $15

million or whatever it is putting in. If it is not putting it into housing it

will have to put it into social services.

That is the rationale behind the Housing

Corporation. We've been doing quite well over the years in promoting. I think,

to be quite honest about it, attitudes are gradually changing towards the

Housing Corporation. Because, number one, we are getting out of a lot of things

that some people think we shouldn't be in, but number two, when you go around

this Province and you look at some of the housing projects and some of the

things that we've done in this Province, the best lay-outs of properties and

parks and open areas you will find are Newfoundland and Labrador Housing areas.

I think personally as the minister that without them we are going to be in an

awful lot of trouble.

MR. J. BYRNE: The question I asked with respect

to privatization of housing - I wasn't saying that you should or you should not.

I was asking that question merely to get the information of what government is

thinking at this point in time. I don't know if you picked up something from my

question that wasn't intended.

MR. REID: No.

MR. J. BYRNE: Good enough.

MR. REID: There is no intention at this point

in time other than to follow the Order in Council that was issued two or three

years ago, and that was divest ourselves of as much of these properties that we

have that are basically costing us money every year. That is as far as we've

gone at this point in time.

MR. J. BYRNE: Okay.

MR. CHAIRMAN: Thank you Mr. Byrne.

Mr. Whelan, do you have any further questions? No

questions. No questions, Mr. Noel?

Mr. Fitzgerald.

MR. FITZGERALD: Just one on housing. Another

individual - and I suppose I'm talking about personal cases here, but it is a

good forum to get an answer, and I compliment the minister and his staff for the

frank way that they are answering questions.

One individual, in fact a doctor in my District,

and I've written the minister on this, and I think Housing is probably aware of

it as well, is living in a Newfoundland and Labrador Housing dwelling. I think

now it is about to be sold. Newfoundland and Labrador Housing has done an

assessment of the property and had an appraisal done, which was not to the

satisfaction of the occupant at the time, and he had an independent appraisal

done. A lot of difference in the two appraisals. Is there any room for