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

CHAIR (Wiseman): Order, please!

My name is Ralph Wiseman, I am the Chair of the Government Services Committee. We are here this morning to review the Estimates of the Department of Finance.

I will introduce to you the Committee members: We have Jack Byrne, who is Vice-Chair and MHA for Cape St. Francis; Robert French, MHA for Conception Bay South; Gerald Smith, MHA for Port au Port; Anthony Sparrow, MHA for Placentia and St. Mary's; and Doug Oldford, MHA for Trinity North.

We will have a fifteen-minute opening remark by the minister, if he so desires, and a fifteen-minute response. I would ask anybody who is speaking during the questions to identify themselves by name for the record, so the recorder upstairs can pick it up.

I guess we should move right along. I will ask the Clerk to call the heads. Minister, if you are ready you may go ahead.

MR. DICKS: Thank you, Mr. Chairman.

I have no opening remarks. I would just like, perhaps for the record, to introduce my staff. We will all introduce ourselves.

I am Paul Dicks, the Minister of Finance and MHA for Humber West.

MR. CLARKE: I am Robert Clarke, the ADM for Tax Administration.

MR. COOK: I am Bernard Cook, Director of Tax Audit and Compliance.

MR. VARDY: I am Robert Vardy, ADM of Fiscal and Tax Policy.

MS DEVINE: I am Sheila Devine, Commissioner of the Public Service Commission.

MR. OLIVERO: I am Robert Olivero, Chairman of the Public Service Commission.

MR. O'NEILL: I am James O'Neill, Manager of Financial Operations.

MR. BENNETT: I am John Bennett, Assistant Deputy Minister, Debt Management and Pensions.

CHAIR: As you have no opening remarks, Minister, we will move right along with you, Jack.

MR. J. BYRNE: Thank you.

First of all, I apologise for being late this morning. I had another meeting at the same time. These things happen.

I want to go to Public Service Commission first if you do not mind, page 59; just a couple of questions.

Can the minister provide a breakdown of these appropriations with reference to the headings as used and recorded in the 1996-1997 Estimates?

MR. DICKS: Sorry, Jack! Your question was: Can I provide a breakdown on page 59?

MR. J. BYRNE: Yes.

MR. DICKS: It will just take me a minute to get these.

MR. J. BYRNE: All these subheads basically. I just wondered -

MR. DICKS: Services to Government and Agencies you mean?

MR. J. BYRNE: Yes, services to Government and Agencies.

MR. DICKS: Okay. What did you want to know about exactly, what the Public Service Commission does or -

MR. J. BYRNE: No. I know you will not be able to do it here today.

MR. DICKS: I am sorry, I am having trouble hearing.

MR. J. BYRNE: I don't think you could do it here today, but could you provide us with a breakdown of all these appropriations, each one individually?

MR. DICKS: You mean $790,000 Salaries and so forth?

MR. J. BYRNE: All that, yes; benefits, transportation.

MR. DICKS: Mr. Olivero is here and it might be simpler if I ask him to run through it. You mean on the number of staff, what the employee benefits are, Transportation and Communications, that sort of thing?

MR. J. BYRNE: Professional Services, Purchased Services. What would the Purchased Services be, what would Professional Services be, that type of thing.

MR. DICKS: Okay. Purchased Services, in some cases, include things like photocopiers and so on, but in this case it is different. Bob, would you like to speak to that?

I think the other headings, Jack, are self-explanatory. Salaries would be just basically our employees and so on. The only things that might stand out there are Professional Services and Purchased Services and I would ask Mr. Olivero to speak to that.

MR. OLIVERO: I am quite happy to speak to that, Minister.

The major expenditure under Purchased Services is the expense for accommodation of the Public Service Commission, which is roughly $220,000. We are housed on the top floor of the Workers' Compensation Building. The reason that figure is large is because we are still obligated by our lease to maintain the premises which we held for a much larger commission two years ago. That lease continues for another year and we are obligated to honour that.

MR. J. BYRNE: So we are paying for space we are not utilizing?

MR. OLIVERO: Yes.

MR. DICKS: Not fully utilizing.

MR. OLIVERO: Under Professional Services: That is a much more expanded program now than in the past because of the continued downsizing of the Public Service in which employee assistance program services are provided across Newfoundland and Labrador to employees at the time of their dismissal, mostly counselling services. Psychiatric services were needed on an emergency basis, and we also contract specialized services and retain (inaudible) placement for selection boards and bumping of the NAPE membership. Any other questions?

MR. J. BYRNE: Yes. With respect to those Purchased Services and the rental of space in areas we are not fully utilizing, who are we paying that to?

MR. OLIVERO: To the Workers' Compensation Board.

MR. J. BYRNE: To the Workers' Compensation Board, okay.

This is just a general question. Why have all the divisions of the Public Service Commission had their appropriations combined under one heading? Have any programs of the divisions or activities been eliminated?

MR. OLIVERO: Yes.

MR. J. BYRNE: Which?

MR. OLIVERO: Just a moment and I will run through them for you. You will have to excuse me; I am just running backwards in our report.

We have transferred the Staff Development Program of the Public Service Commission, which was previously titled Staff Training And Development, to the Secretariat of Treasury Board. We have transferred the Opening Doors Program, which is a program for the disabled employment, to the Secretariat of Treasury Board. We have transferred the French Language Program, which was federally funded, to the Secretariat of Treasury Board. We have eliminated the Personnel Services Division completely and we have downsized the staffing division which was previously there, by five posts and a director's position.

MR. J. BYRNE: Thank you.

I am not sure if you understood my question with respect to Purchased Services and the space. Where is the Public Service Commission housed today, right now?

MR. OLIVERO: In the Workers' Compensation Building on Forest Road.

MR. DICKS: On the top floor, Jack.

MR. J. BYRNE: Yes, okay. That is what I thought. The space that you are not utilizing now is in that same building, is it?

MR. OLIVERO: That is correct.

MR. J. BYRNE: So you just reduced the area?

MR. OLIVERO: Yes. Also, because of the training function being transferred, the utilization of the training rooms which occupied the major part of that space is now overly adequate. We are hardly doing that much training.

MR. J. BYRNE: Thank you.

I want to go to Executive And Support Services now for the Department, page 29.

MR. DICKS: Okay. If you don't mind, if you could give me the heading or the -

MR. J. BYRNE: Yes, I will. Page 29, Minister's Office, 1.1.01, Transportation and Communications, 03.

MR. DICKS: Which is it?

MR. J. BYRNE: 1.1.01, Minister's Office, subsection 03 there. It went up to $26,500 from $8,500 and is back down to $3,500 for this year. What action has been taken to reduce Transportation and Communications by that amount, and why did it have to go up that much in the first place, over what was budgeted?

MR. DICKS: Well, frankly, it should not be at $3,500. That is unrealistic. What happened was, I did not see the figures before they went into the Budget. Last year, $8,500 was insufficient and for what I am required to do, that is not an adequate amount. Frankly, Jack, I expect that will be in the vicinity of $20,000 to $30,000 again this year.

For instance, there are a lot of things I did not plan on. We had all the HST harmonization. We had a lot of meetings at work not planned for; for example, Halifax, Ottawa on a continuing basis. The other thing too is I had to attend a couple of national conferences with the Premier, the First Ministers' Conference, things like that.

MR. J. BYRNE: So, why do you expect it to be up $20,000 if the extra money, the $18,000, basically was for the HST. The HST is in place now. Why would you expect to need that extra $18,000 again this year?

MR. DICKS: Eighteen thousand dollars?

MR. J. BYRNE: Well, that is what it was.

MR. DICKS: Yes, around $20,000. I expect that there will be more travelling than that. I mean, $3,500 is no more than about three trips to Ottawa in the run of a year.

MR. J. BYRNE: That is right.

MR. DICKS: I mean, I just had to go up Easter, for example. I flew up Thursday and got home midnight Good Friday, trying to close. So there is a lot of unexpected stuff and we will have a lot more negotiations with the federal government. That is a figure that is unrealistic. It should be substantially higher than that. I didn't see that figure before it went in.

MR. J. BYRNE: Yes, but now we know -

MR. DICKS: I expect in the run of a year, for what you are required to do in Finance, I expect you are going to spend about $20,000 in Transportation and Communications.

MR. J. BYRNE: But in the budgets that we have done so far in the Committee hearings I find that there is a lot of this going on. You made a statement that you had a balanced budget this year. I mean, if that is going to be out by $18,000, and it is happening throughout each department, what you said in the House of Assembly, is it really accurate?

MR. DICKS: Yes. Well, some things are up, some things are down. What it is, you hold the departments to their allocations. If we have to spend more in that then we will spend less on something else. So you have to make these adjustments. Frankly we didn't see these as a committee before these got in, and these figures are unrealistically low, given the nature of what is happening right now.

MR. J. BYRNE: Okay.

MR. DICKS: But we won't be over budget overall. We will just find the allocations somewhere else and transfer funds in to cover that off.

MR. J. BYRNE: The Executive Support, next section, 1.2.01.01. Salaries: $566,600 went up to $576,000. Why the difference of $9,400?

MR. DICKS: Pardon me?

MR. J. BYRNE: Why the difference in $9,400 in 01, Salaries?

MR. BENNETT: I will answer that.

MR. DICKS: Yes, go ahead John. These are minor things.

MR. J. BYRNE: Well, they are minor but they need to be asked.

MR. BENNETT: You are referring to, I guess, the revised figure of last year -

MR. J. BYRNE: That is right.

MR. BENNETT: - coming from $576,000 down to $566,600. Basically we had a person off on maternity leave and on sick leave, so it is a replacement. So, we were paying for the replacement position as well as the full-time position.

MR. J. BYRNE: Okay, thank you.

Under 1.2.01.03, Transportation and Communications, what was estimated, $53,400, which seems to be a good chunk of money, has gone up by $32,400. This year it is even less than what was estimated for 1996-1997.

MR. BENNETT: Basically, if I can answer that, we had estimated last year that with tax harmonization there would be a fairly significant amount of travel associated, and there was. Obviously we have over-extended. It was up to $85,000. Now that that is completed we feel we are back to more normal operating.

CHAIR: Mr. Byrne, if I could jump in here for a second. You don't have any more questions for the Public Service Commission?

MR. J. BYRNE: I don't.

CHAIR: Okay, so the Public Service Commission can depart if it so desires.

MR. J. BYRNE: Depart?

CHAIR: Depart.

MR. J. BYRNE: Thank you for your -

CHAIR: Or de-plane. Thank you very much for coming, by the way.

WITNESSES: Thank you.

MR. DICKS: Jack, if I could say as well. We had estimated a certain amount, but the other thing too, we had CPP revisions last year and we had an awful lot of people - I would say any given week last year we probably had two people attending meetings in either Ottawa or Fredericton or something like that. These things are difficult to provide for beforehand. We didn't expect the federal government to be quite so niggling on all the details.

MR. J. BYRNE: Thank you.

Page 30, 1.2.02, General Administration, Administrative Support, subsection 06, Purchased Services: $58,600 budgeted and went up to $121,200. Why the difference? I mean, you are looking at double.

MR. DICKS: There were two things. One was the unanticipated expenses for the printing of the pre-Budget consultation books. The Premier decided last January to do the pre-Budget consultations and that got in last year's Budget. The other thing, Mr. Oldford will be happy to hear, is the funding for office space rental in Clarenville for a twelve-month period, in 1996-1997, as opposed to a three-month period.

MR. J. BYRNE: So you are saying the pre-Budget consultation booklets that were distributed cost us about $60,000?

MR. DICKS: No, that is not what I said. I said, the pre-Budget consultation booklets, the printing of those and the funding for office space rental in Clarenville.

MR. J. BYRNE: What is the breakdown?

MR. DICKS: The breakdown for last year?

MR. J. BYRNE: No, for the two items for that $62,000, so much for the books and so much for the rental of space.

MR. DICKS: Bob Vardy is here. Bob, do you recall how much it cost us to print those pre-Budget consultation booklets last year?

MR. VARDY: I do not recall exactly but it was somewhere around $8,000, I believe.

MR. J. BYRNE: May I have that in writing?

MR. DICKS: (Inaudible) find out.

MR. J. BYRNE: Eight thousand dollars for the booklets, so that means rental space was $54,600 in Clarenville? Was it Clarenville you said?

MR. DICKS: That is part of it, yes.

MR. J. BYRNE: May I have that broken down and in writing?

MR. DICKS: Will you make a note of that?

WITNESS: Yes.

MR. DICKS: Who is taking notes, if there are any questions from this? John, are you taking care of the notes? So, 1.2.02.06, you want to know the breakdown of those expenses?

MR. J. BYRNE: Yes, I appreciate that.

MR. DICKS: The only other things in it may be the pre-Budget consultation things. They may be in there as well, when we had to rent rooms, some of those things as well. We will get you a complete breakdown of that.

MR. J. BYRNE: Okay.

Under the same section, Amount to be Voted, you have in the 1997/98 Estimates, $75,000.

MR. DICKS: Okay, Jack. 1.1.02.01? Did you say the amount to be voted? To which initial subhead are you referring?

MR. J. BYRNE: It is 1.2.02, Amount to be Voted, 02, Revenue - Provincial, $75,000. Just where is that revenue coming from?

MR. DICKS: That is postage costs, $75,000, that are refunded from the pooled pension fund and recovery of travel advances. What we do is, from General Government we post to the pension fund certain costs to be reimbursed to us as our administrative costs for running the fund. Among them is the Postage of $75,000. That is for when you retire. It will cover the cost of the cheque and the envelope to you.

MR. J. BYRNE: Okay.

The next section, General Government, 1.3.01, Salaries, 01, and Employee Benefits, 02: The estimate for this year, 1997/98, was $4,420,000 for Salaries, and Employee Benefits, $28,288,700. Can you give some kind of a breakdown or itemized account for these appropriations?

MR. DICKS: You mean the $4.4 million?

MR. J. BYRNE: Yes.

MR. DICKS: That is pay equity. The balance of which?

MR. J. BYRNE: The one below that, Employee Benefits.

MR. DICKS: What that consists of is, when we make payments, of course, we also have the same obligations, ordinary individuals for CPP and so on like that?

MR. J. BYRNE: Yes.

MR. DICKS: CPP is $6,256,600; Unemployment Insurance is $9,573,500; Group Insurance is $6,556,700; Health and Post-Secondary Education tax, which we pay as well as the ordinary people in the Province and businesses, is $5,869,000. (Inaudible) we pay $5,000 and NLC to GSL, $27,900. I know you are going to ask me what that is. Is that the Newfoundland Liquor Corporation to Government Services and Lands? There may be a cross payment there from the corporation to government, but that is a fairly small amount there?

MR. J. BYRNE: Okay. On the amount to be voted in the same section, 02, Revenue Provincial, $179,200, what is the source?

MR. DICKS: Reimbursement from the Workers' Compensation Commission for the employers' match and share of personnel costs associated with various ease-back work activities carried out by the Department of Environment and Labour and reimbursed by the Commission. Also, the amount of $66,000 represents a refund of government personnel costs from the pooled pension fund.

MR. J. BYRNE: Next page, page 31 - I have all kinds of questions here. I am going to skip a few of them. I am going to see which ones I am going to ask you now. Crown Agencies - Recoveries, 2.1.02, Revenue - Provincial, $46,800,000.

MR. DICKS: Jack, 2.1.02?

MR. J. BYRNE: Yes, Crown Agencies.

MR. DICKS: Yes.

MR. J. BYRNE: Forty-six million eight hundred thousand dollars revenue. Where is that coming from?

MR. DICKS: Last year we budgeted for a dividend from Newfoundland Hydro. At the end of the year, because of a stellar fiscal performance by the department, and government generally, we had funds left over. Knowing that this year would be a difficult year what we decided to do, among the other measures we enacted, was to move the dividend from last fiscal year into this fiscal year. We budgeted a dividend of $15 million last year, but we didn't take it last year, we moved it into this year. That is why instead of $31.8 million it went down to $16.8 million. That is a $15 million difference. What we have done this year is, we usually get $16.8 million. What we had told Hydro was we wanted a $15 million dividend in each year, so we are taking $15 million this year plus the $15 million last year and bumping it up. So you would get your regular $16.8 million, which is a guarantee fee, plus the dividend of $15 million for this year and the $15 million from last year to give you your $46.8 million.

MR. J. BYRNE: Good thing you didn't sell it.

MR. DICKS: I don't disagree with you on that.

MR. J. BYRNE: Next section, Industrial Assistance, 2.1.03.10, Grants and Subsidies.

MR. DICKS: Yes.

MR. J. BYRNE: You had in the budget $171,500 and it went up to $3,171,500.

MR. DICKS: Okay. Two things there. The $171,500 was for Marble Mountain. That was in there. That was in Tourism last year. That was the basic grant that is given each year. (Inaudible) was given in previous years. The other amount last year, the $3 million in addition, was an amount of money we set aside to assist with any privatisation initiatives we have. That is paid to the Newfoundland Industrial Development Corporation.

MR. J. BYRNE: Art Reid was looking for money for municipalities the other day and he asked me where he could get it.

MR. DICKS: Well, if they want to take over some of our Arts and Culture Centres we would be glad to give them some of it.

MR. J. BYRNE: Yes, I would say.

On page 32, Pensions Administration, 2.1.04.06, Purchased Services, up by $9,000 from what was budgeted to what was spent. This year it is going to be $15,200, which is $12,000 less than what was budgeted last year. Can you explain that to me, please?

MR. DICKS: What happened last year, the increase of $9,000 was unanticipated printing costs related to laser printing of cheques. What we are going to try to do this year is to convert the pensions to direct deposit to reduce the cost. In other words, right now we send out a lot of cheques. What we are encouraging people to do, which could result in substantial savings to government, is we will deposit directly to your account. A lot of people are gradually coming over to that. What we are trying to do I believe, John, is trying to persuade people on pension to allow us to do the same thing. That could substantially reduce some of our costs there.

MR. J. BYRNE: Thank you.

Capital, 2.1.05, Financial Assistance to Crown Corporations: None budgeted, yet $9 million all the way down through. Can you explain that to me?

MR. DICKS: Yes. You alluded to municipalities earlier. What we have done is, we recognize that in changing the nature of government's relationship with the municipalities, and in particular reducing their operating grants, some municipalities may experience financial difficulty. What we have done is, we voted $9 million in last year's Budget and we are providing that to the Newfoundland Municipal Financing Corporation to pay down the debt somewhat and to give the minister some flexibility in dealing with the municipalities. Because it is going to be more difficult for some, so we are giving him a lot of flexibility and latitude in determining how to change some of the arrangements there.

MR. J. BYRNE: I don't know what kind of paperwork is going on here, because you say you are giving him $9 million -

MR. DICKS: No, we aren't giving it to the minister. It is paid into the Newfoundland Municipal Finance Corporation to pay down the debt. About 60 per cent of it is in arrears as you know, if not more.

MR. J. BYRNE: But the cuts in grants coming from the Minister of Municipal and Provincial Affairs to the municipalities - what was it this year, another 20 per cent of that - was somewhere around $10 million, wasn't it?

MR. DICKS: Twenty per cent this year. Well, it was around $32 million. I think it was probably about $7 million this year and it gradually goes down to about $18 million at the end of three years.

MR. J. BYRNE: So that $7 million is not there now, it is not being paid out by the Department of Municipal and Provincial Affairs. You are really only giving $2 million, aren't you, to NMFC?

MR. DICKS: No. We have paid the full $9 million to NMFC. The minister said: Look, I can change the grant structure to municipalities, but some are going to find it difficult. Other municipalities are out there and they just aren't charging a sufficient tax regime to cover their own cost, but some of them are in legitimate difficulty. As you know, it is a pretty difficult time in a lot of our rural areas where the fishery has failed as well. What the $9 million is intended to do -

MR. J. BYRNE: I know, I know exactly, yes.

MR. DICKS: You know, just to give him some flexibility, because some places can't pay it back. We have to leave it to the discretion of the minister and it is subject to coming back to Finance and NMFC in justifying any changes. It doesn't mean, by the way, that every municipality that is in arrears to NMFC is going to have those arrangements changed. But $9 million is a fairly substantial amount just to allow the minister to work with municipalities over the next three years or so and work out new fiscal arrangements.

MR. J. BYRNE: That $9 million, is that going to be $9 million per year, or $3 million (inaudible)?

MR. DICKS: No, that is it. That is $9 million to take us through the whole three-year budget program.

MR. J. BYRNE: Three, three and three.

MR. DICKS: No. He may take $5 million of it this year or he may only take $1 million of it this year.

MR. J. BYRNE: Yes, I know, but the average.

MR. DICKS: Yes.

MR. J. BYRNE: Next three years. I have to go back to that now. Then again we are playing with numbers here, because in the Budget that is $9 million for this year, if you work out the figures. So, it is really only $3 million. It could easily be just $3 million. It could be $1 million.

MR. DICKS: No, it is in last year's Budget. You see, what we did last year at the end of the year we had a lot of -

MR. J. BYRNE: So you actually took the $9 million and gave it to them? NMFC has that $9 million in its account now?

MR. DICKS: Yes, it is to pay down the debt. The NMFC is $9 million richer now, or $9 million less poor, if we can put it that way. That is probably more accurate.

MR. J. BYRNE: Alright, less poor. Are you a politician?

MR. DICKS: On the good days.

MR. J. BYRNE: Nine million dollars less poor.

MR. DICKS: Monday mornings I don't know what I am.

MR. J. BYRNE: Page 33, Tax Policy, 2.2.01.03, Transportation and Communications, $37,000 up, dropping back down -

MR. DICKS: That is 2.2.01.03?

MR. J. BYRNE: Yes, $37,000 above what was estimated; quite a chunk.

MR. DICKS: This is the same thing. This is HST. You see, these are the people in Tax Policy, Fiscal Policy. You saw it at the executive level as well. Last year we had an incredible amount of travelling, mostly to do with the HST harmonization. That is what it all relates to. We are hoping to get it all back in line this year.

MR. J. BYRNE: Page 34: I'm going to say 2.2.03.03, again, same thing, same answer, no need to ask the question.

MR. DICKS: 2.2.03.03, is it?

MR. J. BYRNE: Yes. Up $29,800 - same answer as the last one.

MR. DICKS: Just let me double-check. I might have a different one for you.

MR. J. BYRNE: I doubt it.

MR. DICKS: I can tell you, that was federal-provincial meetings on tax harmonization. Normally what we budget for are two meetings of the Conference Board of Canada and two meetings of the federal-provincial subcommittee on the economy, and various meetings with Statistics Canada. This is a group that follows the economy and gives us projections on GDP and so on; Bev Carter's group for the most part. They were fairly intensely involved in our economic planning last year.

MR. J. BYRNE: In the same section, 2.2.03.06, Purchased Services - let's see what we have here now - $8,000 up to $16,700. Did you buy some paper or something?

MR. DICKS: Okay, yes.

Last year the difference was... These were costs of printing services not provided during the budget last year. You remember when it came out this year there was that booklet on the economy that gave you the projections for the year. You see, this division was not with us; it was transferred from Executive Council into Finance and there was no allocation for the general printing account for the printing of The Economy. That is a booklet that they did separately. So that is a printing expense.

MR. J. BYRNE: So government paid for that piece of Liberal propaganda that you put out; is that what you are telling me?

MR. DICKS: Well, I guess when you do a good budget it amounts to Liberal propaganda, but it certainly wasn't cast in that light if I recall. It purports to be a rather objective analysis of the economy.

MR. J. BYRNE: Same page, same subhead, Amount to be Voted, 02, Revenue - Provincial, $55,000; where is that coming from?

MR. DICKS: Sorry, Jack, that is 2.2.03...

MR. J. BYRNE: 02.

MR. DICKS: 02, okay. It is still under the 03 subhead, is it?

MR. J. BYRNE: It is under 03, but it is under the Amount to be Voted, not the expenditures.

MR. DICKS: I see; okay. Just hold on a second.

MR. J. BYRNE: Revenue, 02.

MR. DICKS: Revenue, okay.

There are several things in this. In this year it is the anticipated revenue from the sale of REDIS licences. John, do you want to speak to that? What is the REDIS project?

MR. BENNETT: I cannot give you any of the particulars of the program, but I do know that if the federal government and the Province have entered into a tentative agreement for the development of a statistical system, and if the feds will spend $50,000, which would be the revenue figure, then we will expend $50,000. So the Province is building it on a fully cost-shared arrangement with the federal government. Obviously, if the federal government decides that no, that is not appropriate, then we won't go ahead with the expenditure. As I understand it, it is a type of statistical system.

MR. DICKS: Yes, Statistics Canada uses a different system than we do. We track actual events much more carefully. In fact, Stats Canada doesn't do it at all.

The other thing is that we are charging Newfoundland Hydro $5,000 for economic forecasting services.

MR. J. BYRNE: On the last page, I think it is, page 35, 3.1.01.01 Salaries; that has taken quite a...

MR. DICKS: Quite a dip?

MR. J. BYRNE: Yes, quite a dip this year. How many people have been let go, and what type of positions are they? Are they really the workhorses or are they the upper echelon?

MR. DICKS: Well, the upper echelon has a lot of workhorses too. What the -

MR. J. BYRNE: I am not saying that. What I am saying is, are they front-line people?

MR. DICKS: One of the misperceptions in government that you often get is that somehow people who are at the front-line level, as we call it, or in bargaining units, work a lot harder than the executives. I have to tell you, in my experience it is far from true.

MR. J. BYRNE: No, that wasn't what I was trying to imply by the way. It just seems to me that most people I see going out the door are usually the lower GS type of thing, the lower classifications, rather than, say, the administrative part.

MR. DICKS: Each time, actually, it has been the opposite. In proportion to the number of managers and in proportion to the number of bargaining unit people we have, the lay-offs have been disproportionately in management. I have the figures; I don't have them with me. I think about 85 per cent were front line, 15 per cent were managers. I know that the last lay-offs we did - not this year but last year - affected something like 30-odd per cent of management.

In this particular case, this results in harmonization changes related to that and so on. What you are going to see is a rationalization of the compliance and audit staff. For example, we have about seventy-one people who have gone over to Revenue Canada out of a total complement of 148, I think it was Bob, was it? One hundred and forty-five. Bernie is working closely with it as well.

We had some very successful negotiations with Revenue Canada. They offered to take sixteen or seventeen of our employees after we agreed to harmonize. We had some long, fruitful and productive discussions, so we have gotten them up to seventy-one. It was a pretty arduous process, and both Bob and Bernie did a great job of sorting out the many issues. We got all of our employees' seniority recognized. They started out saying, `No, no, you have to apply for jobs', and all this kind of nonsense. We really - I must say, not me, I wasn't involved at all - but Bernie Cook and Bob Clarke did a tremendous job negotiating the agreement and working out all the minor snags, even to the point where they were just going to have one office in St. John's. We have kept the offices open on the rest of the Island. They are probably staffed as much as they were before, to within one or two - I know Doug is here from Clarenville. I think there were sixteen there before and there are probably fourteen there now. So we have accommodated our staff to a very great extent.

MR. J. BYRNE: With respect to that, you just popped a question into my head that I had not been planning on asking you. I have one more left after this, by the way.

MR. DICKS: Right.

MR. J. BYRNE: With respect to the people who went over to the feds, in the HST: I remember talking to some of the employees at the time and they were saying that the pension that the people will get here, or getting into the pension plan, is quite different, say, that what you were going to get in P.E.I. - was that one of the other provinces, or Nova Scotia, that went along with the HST? They were not getting the same deal at all, whatsoever? Is that true?

MR. DICKS: I will make a general comment and then I will refer to the specific question. One of the differences we had was that our pension plan - to start with, when people went over, for the most part, they were on a higher salary scale, so nobody took a drop in pay. People were getting like $30,000. Most of them went over and started at $30,900, so they all got an immediate increase of one sort or another.

The other thing, too, Revenue Canada is recruiting. Plus, there are 43,000 people who work for Revenue Canada, so the job opportunities are pretty interesting for people who go over to the federal government.

The other thing, too, is that most of them are on now at a higher salary scale. The majority of our people were topping out at about $35,000. Now there is a difference between audit and compliance and collection, but the new salary scales go beyond that, up to $47,000, so they benefit in a number of ways. One is that they are on a higher salary range. Right now they were topped out, and now they are on a new salary range where they can go even higher. The second thing is that the federal pension plan is much more generous. So what we found was that when it came to accommodating somebody, for example, who had twenty-two years of service, the equivalent amount of service that would give them the same pension when they retired would be the equivalent of about seventeen plus years. So what we did was, no one who went over lost. In fact, even on the pension they will gain. They might get credit for a lesser amount of service, number of years, but what they will do is gain because the gross amount in which the pension is calculated is higher. Not only that, but the federal pension is indexed; so from our analysis not only will they not lose but they will gain substantially on the pension.

I should ask Bernie or Bob to comment, because you have been specifically involved in that.

MR. COOK: The pension that went over was based on the funding on the different plans. To my knowledge, the richest plan was in New Brunswick. You made reference to P.E.I. Prince Edward Island is not part of this process at this point in time -

MR. J. BYRNE: Yes, okay, New Brunswick.

MR. COOK: - and Nova Scotia and then ourselves. The end result is that we have arranged for people to go over basically at a level playing field. The federal plan is at 7.5 per cent premiums; ours is at 6 per cent. So the people who were sent over would have gotten the same amount of pension for the equivalent years of service with the Province as they will get with the federal government, and they have the option of buying or topping up the difference if they so chose to go to the maximum federal pension.

MR. J. BYRNE: The minister answered a question. The question was, basically, were the people in Newfoundland treated any differently than the people in New Brunswick and Nova Scotia with respect to pensions, and getting into the pension plan? I don't know if they had to buy back years or anything like that, but certainly when I was speaking to some of the people who were involved they were pretty upset they were not being treated the same.

MR. DICKS: Jack, if I can just say, I had a meeting with our people last fall. They were very concerned and upset. I had a couple of meetings with them. I think what Bernie was saying is the difference is that the pension plan in New Brunswick was richer. We ensured that the people who went over didn't suffer. If they had stayed here - we gave people the option to stay with our plan, but we gave them the option: If you go over we will buy for you an equivalent amount, equivalent value, in the federal pension system. The difference was that the pensions in New Brunswick were worth more.

It would be pretty hard for us to justify paying more for our employees going over than existing employees have in provincial government service at the same point in time. If you want to say they got less than New Brunswick, well, if you had more in New Brunswick, you can't - I don't really think I could phrase it quite the same way. We gave them what they were entitled to. The fact that New Brunswick's pensions were richer doesn't mean our employees got any less.

MR. J. BYRNE: Very good.

MR. DICKS: You can always find something to complain about, as you know. That is the reason you have governments and oppositions.

MR. J. BYRNE: In the 1996-1997 Estimates, section 2.2.02, which is on page 34, there were appropriations for the "principal recovery from various loans, advances and investments." Have these appropriations being recorded under a different heading, or are there no recoveries expected in this fiscal year?

MR. DICKS: You say 2.2.02?

MR. J. BYRNE: 2.2.02, page 34 of the 1996-1997 Estimates, okay?

MR. DICKS: Okay. Now, 2.2.02. What is the subhead? Or are we talking about revenues here? I just have to relate it to the book here.

MR. J. BYRNE: It isn't here. We haven't seen them covered in these Estimates here. That is what I'm saying to you.

MR. DICKS: I'm sorry. Just explain your question again.

MR. J. BYRNE: I will read the question again. In the 1996-1997 Estimates, section 2.2.02, there were appropriations for the "principal recovery from various loans, advances and investments." Have these appropriations been recorded under a different heading, or are there no recoveries expected in the fiscal year? We don't see them in these Estimates, those recoveries.

MR. DICKS: 2.2.02. Oh, you are saying that last year there was a subheading with amounts voted.

MR. J. BYRNE: Yes.

MR. DICKS: It is head 01. Perhaps John can explain it, because I don't have last year's Budget with me. What was the amount there?

MR. J. BYRNE: I don't have the amount.

MR. DICKS: John, can you reply to that? Is that in Consolidated Funds?

MR. J. BYRNE: What we are saying is we didn't see them in the Estimates this year, so where are they, you know?

MR. BENNETT: You aren't talking about the issues under guarantee, you are talking about the revenue figure. Is that the one you are talking about?

MR. J. BYRNE: Yes.

MR. BENNETT: If you look at page 7 of this year's Estimates -

MR. J. BYRNE: Okay, page 7.

MR. BENNETT: Just a second now. Wait now. No, I could have this wrong. I'm sorry. Investment Recoveries, Recoveries on Loans, Advances and Investments, 1.2.01. Is that the figure you are referring to?

MR. J. BYRNE: I don't have it here in front of me.

MR. BENNETT: That is the transfer I think.

MR. DICKS: Okay Jack, yes. In our Budget under Capital we have Recoveries on Loans, Advances and Investments. Is that the one we had last - "principal recovery from various loans, advances and investments." For instance, I know the ENL money that it collects comes back to the Consolidated Revenue Fund and then we reallocate. I'm just not sure. If I knew what the figure was last year we may be able to relate it to this, but there is nothing -

MR. J. BYRNE: I didn't bring the book with me. I didn't bring last year's Estimates with me.

WITNESSES: (Inaudible).

MR. DICKS: What it is you see, with some of the loans that we have out, things like Enterprise Newfoundland and Labrador, Fisheries Loan Board, Farm Loan Board and so on, those monies now come in to general revenue. Some municipalities repaid their loans, for example, we let them pay it out, things like that. So, last year, we had budgeted $7.8 million, if that is the one to which you are referring, we collected $8.3 million, and this year we are estimating about $5 million. I guess the problem I am having - I mean I can explain it if -

MR. J. BYRNE: Where is that in this year's Budget? That is all I am asking.

MR. DICKS: Okay, the Recoveries on Loans and Investments are under Capital on page 7, 1.2.01.

MR. J. BYRNE: Okay. I will just check it and see.

MR. DICKS: Just check those amounts. I suspect that is what you are referring to. Those are essentially the amounts that are owed to us in a given year. That is 1.2.01.

MR. J. BYRNE: I think Bob has a question, and that's it for me.

CHAIR: We will now move to Bob.

MR. FRENCH: Minister, under your department of course, comes the Newfoundland and Labrador Liquor Commission. I won't spend a lot of time on this, this morning, but I have received numerous calls over the past year. What I would like from you, in writing, is the date the chairperson was hired, the salary that the person is to be paid, the benefit package in total, the number of working days that that individual worked from the time he was hired to the end of the fiscal year. I ask that because I have received numerous calls, and I mean numerous calls, about work and I would really like to know so I can go back to these people and give them an answer. I would like that in writing if I could have it, please.

MR. DICKS: So you want the date the person was hired, the salary, benefits and the number of days the person worked?

MR. FRENCH: Yes.

MR. DICKS: Okay. What do you mean by worked? Do you mean actually sitting in the office behind a desk or if he is has travelled on different business, that kind of thing?

MR. FRENCH: Yes. Somebody told me that, out of a sixty-day period, somebody was absent from the office more days than they were there and that bothers me. If we are going to pay somebody, you know, a very good salary and somebody is just moving into the job, then it rather twigs me as to - now, maybe I have been told untruths and that is why I ask here. If you can supply to me in writing, if the answer satisfies me, that is the end of it.

MR. DICKS: Well, the only thing I would say, Bob, is frankly there is an issue with the liquor corporation as to whether or not, to some extent, there be privatization. So what you tend to find in a situation like that, where people are concerned about their jobs, is you get a lot of nitpicking, criticisms and so on. I just want to make the point: Fraser Lush has been down there and Fraser has been working pretty hard from what I know, but the only thing is some people say: Well, he was here, he was there, and this kind of thing. People tend to think - for example, your constituents probably think that if the House of Assembly is not open you are not working, and you get some of that.

MR. FRENCH: It was not one of my constituents who asked the question.

MR. DICKS: I will report to you, but the fact is that the present corporation has to travel a fair amount on various things. I will report back to you.

MR. FRENCH: Yes. By the way, this issue came to me ever before we had as much discussion as we are now having on privatization of liquor stores. I guess I would also like to ask: Where are we with the privatization of the liquor stores?

MR. DICKS: Well, we are considering one, if any, additional privatization we should do there. So, we will probably have it considered by Cabinet within this month I expect.

MR. FRENCH: Might I also ask a question? I have not been to too many places but I have been to a few and I notice that, you know, in a lot of places in different parts of this world you can walk into various stores and purchase liquor and so on. I think I raised this same question to you last year. I see around Newfoundland and Labrador where I can go into a community where somebody is selling liquor and there is somebody next door, who is doing exactly the same type of business, who cannot sell liquor. They can sell beer but they cannot sell the bottled liquor. I guess, it is almost like unfair competition, if you know what I am saying. You can sell it; I cannot. I can sell you; you cannot. I just wonder, if we do privatize, are we also going to consider that?

MR. DICKS: Well, that is one of the issues that relates to who should sell what. The problem we have is that there are about 1,600 beer agencies around the Province, as you know. The Liquor Corporation's policy has been that they will give what is, in essence, a franchise for a business in a certain area to sell liquor. The issue is whether or not we should expand that and let every person who wants to sell the stuff sell it. One side of that is: Well, why not? The other side of it is: Well, there is an awful lot of administration and you have to worry about control.

If you talk to people at the Liquor Corporation, the employees will tell you: Well, you won't be able to handle it, and there will be more sold to underage people, and so on like that.

MR. FRENCH: It might be too expensive.

MR. DICKS: Yes. The other thing, too, is you can, I think, sell beer on Sundays now but you cannot sell imported beer, which makes up about half a per cent of the market. You go into a store and buy the beer in some of these little places, and you have the liquor there but you can't buy the liquor.

The only thing I would say is that the sale of liquor is still governed by a somewhat prohibitionist mentality. Every time you try to expand the limits -

MR. FRENCH: That is right.

MR. DICKS: For instance, why do we force bars to close at 2:00 a.m.? Some people still care, though, if the bar is open at 4:00 a.m.; but that is people's choice. If you don't want to be there you don't have to be there. The same thing with gambling; the same thing with smoking. There are people out there who would say: Don't sell any liquor; don't sell any cigarettes; and probably don't sell chocolate to those people who put on weight.

Somewhere along the line you have to strike a balance between what is a reasonable protection of the public interest and yet making things available to which other people may object.

I guess we are looking at it. The problem is, every time you expand the hours or the locations in which you sell liquor you get something of a little backlash from a certain group, and to have to try to figure out what is an acceptable extension of public policy at any particular time.

MR. FRENCH: I really and truly believe that when the government allowed the sale of beer on Sunday - I honestly and truly believe - that it cut out a very large underground economy, because there was probably more beer sold on Sunday than maybe any other day of the week. So I think, really and truly, that was a wise decision, and I think that the day in this Province is probably not too far away, and maybe should already be here - and I am not saying every liquor store in this Province, but if somebody wanted a bottle of wine on Sunday, or wanted a bottle of whatever, there should be somewhere, at least one store somewhere in this city, where somebody should be able to go and buy it. I think it is ludicrous that we still continue to live in some of these archaic times; I really do.

MR. DICKS: I'm glad I know where you stand on the issue.

MR. FRENCH: Yes.

MR. DICKS: Not everyone shares that view, of course.

MR. FRENCH: I know that.

MR. DICKS: And that is the hard thing about it.

MR. FRENCH: I know.

Thank you very much, Minister.

CHAIR: Okay, if nobody else has any questions I will ask the Clerk to call the heads.

On motion, subheads 1.1.01 through 3.1.02, carried.

On motion, Department of Finance, total heads, carried.

CLERK: The Public Service Commission.

On motion, subhead 1.1.01 carried.

On motion, Public Service Commission, total head, carried.

CHAIR: Before we clue up, can we have somebody move the Minutes of April 30?

MR. FRENCH: So moved.

CHAIR: So moved by Mr. French.

On motion, minutes adopted as circulated.

CHAIR: I would like to thank the minister and his staff for being here this morning. They have certainly done a superb job. Thank you very much to the Committee, and we will meet again next year.

MR. DICKS: Thank you, Mr. Chairman and members.

I appreciate your questions this morning and we will supply those answers. Mr. Bennett is taking notes, so we will get back to you on the questions raised by Mr. French and Mr. Byrne.

MR. DICKS: Mr. Chairman, as a matter of form, should I report to the Chairman or should I report to the members directly?

CHAIR: Well, you can give a copy to the Chair.

MR. DICKS: Okay.

Well, what I will probably do then is write the members and copy the members of the Committee.

On motion, Committee stands adjourned.