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

CHAIR (Mr. Manning): Order, please!

(Inaudible) a motion now to elect the Vice-Chair.

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: Contra-minded?

Carried.

On motion, Mr. Sweeney was elected Vice-Chairman.

CHAIR: I would like to welcome everybody here. I welcome the Committee. This is our first meeting of the Government Services Committee. I would certainly like to welcome everybody here and also take the opportunity to welcome the minister and his staff. This is our first opportunity to sit down with the minister. I congratulate you on your appointment to your portfolio and wish you all the best. I am sure that over the morning we will have the opportunity to critique your estimates, and we look forward to that.

Before we do that, downstairs everything is being recorded for someone to read in the history books, I guess, if anybody is interested. We ask you not to speak until the red light comes on in front of you - if you are asked a question or you are asking a question - and to identify yourself each time so that the people down below can keep track of what is going on because, as you know, we are not in our regular seating arrangements here. Especially for the minister's staff, to make sure you say who you are before you answer.

We have people here from the Public Service Commission also with the Department of Finance, so we are going to take that Estimate first. When we finish up with that those people can go on back to their duties, if that is okay with everybody. We will go to the Public Service Commission first.

OFFICIAL: Can I ask, can we get an introduction (inaudible)?

CHAIR: Yes, we are going to do that now in a second. I just wanted everybody to be aware, to give them time to get their paperwork ready. We are going to do the Public Service Commission first, then we are going to followup with the Department of Finance afterwards.

We are going to get everybody to introduce themselves first before we begin, so everybody is familiar on both sides. We will start here with Mr. O'Brien.

MR. O'BRIEN: Kevin O'Brien, MHA for the District of Gander.

MR. ORAM: Paul Oram, MHA for the District of Terra Nova.

MR. SKINNER: Sean Skinner, MHA for the District of St. John's Centre.

MR. COLLINS: Randy Collins, MHA for the District of Labrador West.

MS THISTLE: Anna Thistle, MHA for the District of Grand Falls-Buchans.

MR. LANGDON: Oliver Langdon, MHA for the District of Fortune Bay-Cape la Hune.

MR. ANDERSEN: Wally Andersen, MHA for the District of Torngat Mountains.

MR. LEWIS: Andy Lewis, Opposition Research.

MR. SWEENEY: George Sweeney, MHA for the District of Carbonear-Harbour Grace.

MR. SULLIVAN: Loyola Sullivan, Minister, Department of Finance.

MR. PADDON: Terry Paddon, Deputy Minister of Finance.

MR MARSHALL: Harold Marshall, Vice-Chairman of the Public Service Commission.

MS DEVINE: Sheila Devine, Commissioner with the Public Service Commission.

MR. SAUNDERS: Earl Saunders, Director of Debt Management, Department of Finance.

MR. BENNETT: John Bennett, ADM. for Finance.

CHAIR: Fabian Manning, Chair and MHA for the District of Placentia & St. Mary's.

As usual, with our ten minute rotation, we will go around to make sure everybody has the opportunity to ask a question. We are going to start with Ms Thistle and we are going to go with a ten minute duration.

MR. SULLIVAN: Mr. Chair, if I could just give a brief introduction on the Public Service Commission.

CHAIR: Yes, I am just going to give the rules (inaudible) first. We will just pass back and forth and go around to each for ten minutes. If somebody does not want to speak, we will just move on. We will give everybody an opportunity to speak when the time comes.

We will call head 1.1.01 of the Public Service Commission. With that, I will ask the minister to say some introductory comments.

MR. SULLIVAN: Thank you.

The Public Service Commission, its primary focus and its core mandate is the prediction and application of merit in the delivery of staff policy and compliance with that policy by departments and agencies of the core public service. Basically, in terms of that, we are looking at giving increased force to the Public Service Commission in terms of its ability to be able to preserve that merit principle within the system. I know in 1997 there was a delegation to the departments of a lot of responsibilities that were with the Commission, even though the Commission has done an audit of that. To give merit to it, recently, too, we have looked at filling some senior executive positions through the Public Service Commission, and that is happening, I guess, as we speak also. We want to see an increased focus in the merit principle within the public service because we think it enhances the public service and makes it a capable, more efficient, more qualified public service.

Within the Public Service Commission, there are three basic divisions. We have a Staffing and Compliance Division that looks after staffing policy, consultation support, and it also deals with human resource management auditing and the Public Service Internship Program, which was the Graduate Recruitment Program, basically, the predecessor of that. There is a division, too - actually, within the last two years - an Appeal and Investigation Division. That has been one to deal with various harassments and so on in the workplace. There is a complaints and a commissions hearing, there is Management Grievances under that topic, conflict of interest, Classification Appeal Board and investigations. So, that comes under the Appeal and Investigation Division. There is an employee and departmental services - like the EAP, Employment Assistance Program, Workplace Wellness program, Respectful Workplace Program. Of course, the pre-retirement services will come under that specific area, too. So, the Public Service Commission does, I guess, and carries out a lot of functions within government dealing with the human resource element in particular.

That is just a general overview of what it does. Of course, the two people introduced there, the Vice-Chair and the Commissioner, certainly any details or specifics that you might want to ask, too, they can assist in that process.

Thank you, Mr. Chair.

CHAIR: Thank you, Minister.

We will open the floor to Ms Thistle.

MS THISTLE: First, I would like to ask you about the financial aspect and then I will have some questions.

I want to begin by looking at section 1.1.01. I am curious about a salary increase, a difference from what was revised in the 2003 Budget, $239,000. Do you have some explanation for that area?

MR. SULLIVAN: Basically, it was because the Public Service Internship Program is going to be increased. There is additional funding of $900,000 under the Graduate Recruitment Program because the funding budgeted last year, there wasn't much of a utilization of that funding there. That, I guess, primarily came with delays in recruiting replacements there. When government changed too, we did have a hiring freeze but the program has a go ahead and there is $900,000 allocated there. We anticipate getting full utilization in that program. While it is almost $200,000 below historic levels there - overall, the salaries will be down - it still will be up. The primary reason there would be because of the Graduate Recruitment, or we call it the Internship Program. Small amounts were due to annualization too, because with the increases in the Public Service you will not get full annualization that would occur this year. So that would drive it up higher too, whereas part of the raise kicked in last year and you would not get the full annualization.

MS THISTLE: Initially, when that program was introduced, it was fifteen students per year solicited for work within the Public Service. Last year I know there was an indication that thirty would be hired. How many were actually hired? From the initial start of that program - which I think is probably five years ago now - how many students are still in the employ of this government?

MR. SULLIVAN: Maybe you can give specifics. I think there are roughly fifteen still employed, from my understanding.

MS THISTLE: Fifteen over five years?

MR. SULLIVAN: Fourteen still employed.

MS THISTLE: From, initially, five years ago?

MR. SULLIVAN: Yes, and there are fourteen still employed I understand. There are nine who have left of their own volition. Sheila, for the specifics I am sure you can give the details.

MS DEVINE: Since the program started, I think it was in 1999, thirty-four people have been employed. Of that number, there are still fourteen who are being funded through the program but approximately twenty are still within the Provincial Public Service, either temporary or permanently employed.

Last year, regrettably - I guess due to budget restraints and so on - I think we actually only hired one person under the Internship Program.

MS THISTLE: Only one person?

MS DEVINE: Yes.

MS THISTLE: So you are saying, out of the seventy-five we could have had since the program began, because there was an initial commitment of fifteen per year, we only have - how many employed by government now? Twenty, is it?

MS DEVINE: About twenty.

MS THISTLE: About twenty.

MS DEVINE: About twenty who have found their own jobs within the provincial public service. What we have though are a number of other grads, about fourteen, who have not yet secured employment. So what the program is doing, basically, is continuing to subsidize or continuing to pay those people who were hired originally under the grad recruit program, and as they attempt to secure permanent employment - again, it has been difficult given the circumstances of government at this point, but the intent is that these fourteen who are being subsidized through the program will gain full, hopefully, permanent or at least temporary employment within the provincial public service.

MS THISTLE: What you are saying, you have twenty who are somewhere within the system and they are being moved around to get different experiences, but they do not have secure employment yet?

MS DEVINE: There are fourteen who would be in that category. The rest would be in permanent positions or long-term temporary positions.

Again, I guess, the program has changed based on the human resource planning that has happened in departments and the intent of the new program, as you are probably aware, is to look more strategically at hard-to-fill positions and of recruitment in the future just for positions where we know there will be a very long-term need for these people within the public service.

MS THISTLE: That is surprising because these are cream of the crop students. You know, there used to be up to 500 apply for those positions, the very best of graduates, and the intent was to hire them for management, deputy ministers in the future and so on, and provide a wide array of experiences. So, I am surprised to see that the take up has not been - what is the student feedback? Are they are saying they are not able to get the jobs in government? Is that why they are not staying? What is the problem?

MS DEVINE: I would totally agree, that what we have is the cream of the crop in terms of how these people have been recruited and certainly they have had tremendous opportunity to be moved around departments. It is certainly commendable that these people have continued to wish to work for the provincial public service, and all of their deputies and directors speak very highly of them. They continue to apply for positions but, again, it is very difficult within the public service at this point - it is challenging for all public servants to either get promotions or, in some cases, to secure permanent employment, but it is certainly not due to their lack of competence and it is certainly not due to their own interest in staying and continuing to work within this public service.

MS THISTLE: How many are you looking at recruiting this year?

MR. SULLIVAN: This year, on that, if I might add, Mr. Chair - last year's budget, for example, had $900,000 put into it, of which in all of last year, from April on, there was only one person employed. We have restated in the Budget this year the full amount of $900,000 toward that program. That is the historic level. I cannot speak for backfire, but it is certainly - the Budget in the prior governments, last year was the same amount of money even though there was only one employed. We put $900,000 back in again in this year's Estimates to be able to, hopefully, utilize that in the program. I think that has been the standard amount each year, to my knowledge, that has been there. So we have historic funding levels there and there are allocations made in this budget for that.

MS THISTLE: Alright, considering that -

MR. SULLIVAN: Vice-Chair, if you could maybe accommodate that?

MR. MARSHALL: The original program was introduced to hire five individuals per year for the first three years and it was to be maintained at a total of fifteen thereafter. Now, subsequent to that, there was a demand by deputies that said we need more of these people because they are very good, and what occurred was the deputies then found that they were unable to place them in their departments. If there has been a difficulty with the program, it has been the ability of deputies to find funding and find positions where they could place them. The program this year is awaiting instruction, essentially, in terms of the number of hires. So we are not certain, at this point in time, how that will develop.

MS THISTLE: I was just wondering - because seeing those are so highly qualified, you know, their resumes are impeccable - if a reconsideration can be to how we should be looking at trying to encourage them to stay here? Supposing you have to look at rejigging the program, because we do not want them to seek employment elsewhere. There are a lot of people who are going to be leaving that we have to fill the gaps for. Has there been any followup on that program since it was instituted?

MS DEVINE: What there has been is, certainly, a long-term commitment to the employment of these people while they look throughout the system for suitable vacancies. Of course, these people are in competition with the rest of the public service. While these people are specially hired to this program, there are a number, obviously, of highly qualified, competent people throughout the rest of the public service. So we are also, many times, looking for promotions and, in some cases, permanent positions.

MR. SULLIVAN: Basically, Mr. Chair, I think what it comes down to, while they could come in highly qualified, I think - as Sheila has indicated, too - they still have to compete with other people who may be perceived by the Commission, in actual fact, to have higher qualifications and then I guess they lose out. Just because they are graduates and they come in highly qualified, does not mean that other highly qualified people are not seeking positions, too. So that is what makes it equally as difficult. I guess it speaks well for the quality of public servants when they are highly qualified and do not get a position. Somebody else must be highly qualified in the process, too.

CHAIR: Excuse me, Ms Thistle, your ten minutes are up.

MS THISTLE: Oh, okay.

CHAIR: We will get back to you in a minute, I am sure.

Any questions, Mr. Skinner? Mr. Langdon?

MR. LANGDON: I am not familiar with the program as such, are these people management or would they be part of the union process as well, the young graduates that you hired and you put them into the mix?

MR. SULLIVAN: I will refer that there. I would assume that it would be open to their qualifications for the position because executive positions, of course, have not gone through the Public Service Commission but management positions have and the general service. So, if you want, I could certainly comment on the experience of -

MR. MARSHALL: They are not restricted.

MR. SULLIVAN: The Vice-Chair said they are not restricted. They are open. If there is a management position they apply for, and they have the qualifications, they would have the same opportunity as other people who qualify.

MR. LANGDON: I understand that, but are any of those fifteen people -

MR. SULLIVAN: Are they management?

MR. LANGDON: - part of a union negotiating team or are they all management?

MR. SULLIVAN: Okay, I would have to ask the Commission: What is the breakdown of the current ones there?

MS DEVINE: When the graduates or interns are hired they are hired by contract at a rate of $30,000 a year, and then they are slotted into special positions within departments. They are not normally part of a bargaining unit, but if they are successful in securing employment in the department then obviously they either move to a management position or to a bargaining unit position.

MR. LANGDON: My point that I want to make is, the fact that if you do go into the bargaining unit, that even though they would have skills which would probably set them apart or higher than some of the people who are already part of the bargaining unit, but because of seniority or whatever, they probably will find themselves unemployed whereas somebody else would move up the chain. Is that correct?

MS DEVINE: Well, certainly they would not have the level of bargaining unit seniority that would accumulate but we would hope that the experience they gain through their placements in departments and so on would position them to either apply, again, for bargaining unit positions or, in many cases, they are applying for management positions.

MR. LANGDON: Okay.

In 1.1.01.09, Allowances and Assistance; I know this is a technical question or a specific question. It was budgeted in 2003-2004 for $154,500 - none was being spent this year - it is $157,900. Can you tell me why that is?

MR. SULLIVAN: There was an allocation made for the appointment of the Channing Chair at MUN and that was not appointed, so it is back in for reappointment and utilization this year. It just did not get done before the end of the year.

CHAIR: Are you finished, Mr. Langdon?

MR. LANGDON: Yes.

CHAIR: Any questions Mr. Oram?

Mr. Andersen.

MR. ANDERSEN: Minister, I guess it is a bit ironic, going through the whole Estimates of the book here and looking at all the salaries in every department, that there is no change.

AN HON. MEMBER: (Inaudible) Public Service Commission.

MR. ANDERSEN: Okay, I will wait.

CHAIR: Ms Thistle.

MS THISTLE: Thank you.

I would like to ask - we do have a Chair right now of the Public Service Commission, what are the plans to hire a Chair and when?

MR. SULLIVAN: There has been a certain financial allocation in the budget but a decision has not been made at this point in time. It may be affected by - and I cannot say specifically, but there is certainly a program renewal process underway and that will be looking at the total structure. There could very well be a Chair appointed in the near or distant future. I just cannot say at this time because no decision has been made.

MS THISTLE: Are you looking at a total restructure?

MR. SULLIVAN: No, we do not anticipate - in fact, I am a strong believer of the merit principle and there should be a stronger public service. In 1997 they delegated that to the departments. It is an area I have raised in Opposition. I sat across there last year and said I did not agree with that. Other positions - I think even temporary positions and various things that are filled should be done on a merit principle and it should not necessarily come outside the scope of the Commission. I am a believer and a promoter of a strong Public Service Commission based on qualifications and their abilities. We have a stronger Public Service as a result. That is our focus and certainly that is a belief of mine.

As to a Chair, a decision has not been made. I guess when that decision gets made it will be articulated at that time.

MS THISTLE: I notice that in 1.1.01.03, Transportation and Communications, you have lowered that heading. What part of that would be Communications for a dollar amount?

MR. SULLIVAN: Communications was budgeted last year at $22,000 and $32,000 was spent. This year we are budgeting, again, $22,000 as the makeup of that $89,500. We are budgeting the same amount as was budgeted last year but there was an extra $10,000 spent over budget. That would be under that component there.

MS THISTLE: Will any part of that be spent for the ads that were in the paper a week ago about the hiring for the Department of Business, those executive positions?

MR. SULLIVAN: I will have to defer that operation aspect to one of the Commissioners on that. I guess you are referring to the Deputy Minister for Business and a Chief Innovation Officer. Would they be the ones you are referring to?

MS THISTLE: Yes, I am.

MR. SULLIVAN: Who paid for the ads for those positions?

MS THISTLE: Yes.

MR. SULLIVAN: Yes, I will defer that, but I will just say before I defer for an answer, that these positions were decided to be put through the Public Service Commission as opposed to being appointed by the Premier. We figured, let's open it up and look for what qualified people we can find out there to apply. I guess it would follow the normal course, I would assume, in advertisement of public positions. Sheila, if you could elaborate on that and just tell us if this, specifically, is the case and if it is similar to other advertisements for positions in the public service.

MS THISTLE: I am just curious if the ads were actually written by the Public Service Commission and are they paid for by the Public Service Commission?

MR. MARSHALL: I think, perhaps, I can answer that. The Public Service Commission engaged a private sector agency to assist in the development of the file, and between the Public Service Commission and the consultant the advertisements were drafted and published.

MS THISTLE: Are you saying that the Public Service Commission went to a private ad agency to write that ad?

MR. MARSHALL: It is not an ad agency, it is a recruitment agency. The reason the Commission engaged the consultant was because of the nature of the two senior positions. There was a sense that there was a requirement for a strong energy background for the Deputy of Natural Resources and for the Deputy of Business, there was a sense there was a requirement for a very strong, broad, focused knowledge and intelligence in the business field, and we felt that to get that exposure, the exposure of the recruiting company, we would use the resources more on a national basis.

MS THISTLE: Was that company a local company, and, if it was, do you expect to use that company again in the future?

MR. MARSHALL: Yes, it is a strong local company and it has been here for some time, I believe. Would we use it in the future? We would do the same thing as we did this time. We asked for proposals, we received a number of proposals, and made a selection.

MS THISTLE: Did you advertise publicly on that, or was it a request for proposals?

MR. MARSHALL: It was a request for proposals.

MS THISTLE: Which company did you choose?

MR. MARSHALL: Now you are challenging my old brain. It was a local company - do you remember the name? I cannot remember. I will get the name for you. I am sorry!

MS THISTLE: You expect to use that company again. The advertising would have been paid for by the Public Service Commission, and it was more elaborate than the normal Public Service Commission ads that we would see in the papers from time to time. You expect to use that particular firm for those type of ads in the future?

MR. MARSHALL: No. This company has been engaged specifically for these positions. My expectation would be that, if we are asked to do this again we would go for requests for proposals again.

MS THISTLE: What have been the response to those ads?

MR. MARSHALL: At this point in time, there have been a number of calls received by the director of staffing and, to the best of my knowledge, I do not know of actual receipt of applications at this point in time.

MS THISTLE: Is there a closing date on those or is it open-ended?

MR. MARSHALL: It is a ten-day opening, I believe.

MS THISTLE: Do you have any idea what that will cost?

MR. MARSHALL: Sorry? The advertising?

MS THISTLE: How much was the contract for the firm?

MR. MARSHALL: It is not a contract. It is on the basis of $200 per hour and their participation is based on the Public Service Commission's engagement of them.

MS THISTLE: When you say $200 per hour, that would actually be the preparation of the ad, the interviewing of the candidates, the selection and recommendations, whatever is involved, is it?

MR. MARSHALL: Whatever we would choose to have them participate in.

MS THISTLE: I will move on to another question.

With the downsizing in the public service, there are going to be a lot of layoffs. Is there a clearing house going to be set up through the Public Service Commission to handle the bumping, the recalls, the severance, and heaven knows what?

MR. SULLIVAN: I will answer that, Mr. Chair.

Yes, there will be. There were 217 layoffs announced in the public service. Twenty-two of them proceeded last week and 195 were given notices last week, overall, and a redeployment center in the Public Service Commission will handle these. There are twenty-three people, who back some time ago lost their jobs or were laid off, still within the Public Service Commission to be in that center too. They will qualify, anybody who went out before, along with the current ones. During that process now, there is a thirty-day bumping period in line with the collective agreement, if you are a member of a bargaining group. If you are not a member of a bargaining group, you will still go through the redeployment center to be able to avail of any openings within that. Due to an attrition process, there is going to be a job matching of qualified people to be able to move these. The Public Service Commission will do the work on that to make sure that these people, if an opening comes up, will meet the qualifications to get into the Public Service, possibly without ever having a discontinuation of service. A notice has been given and some people there may have up to sixty-two weeks earned in the system and could still be paid until this process occurs. Some could have twenty weeks and some could have none, basically, or very little. While that process is occurring, there will be a matching of these positions and it will be conducted through the Public Service Commission.

MS THISTLE: Has there been any money -

CHAIR: Excuse me, Ms Thistle, for a moment, please.

The ten minutes is up again. I just wanted to check and see if anybody else wanted - Mr. Skinner? Mr. Langdon?

MR. LANGDON: I would like to ask a question.

I was talking to a person who got laid off last week, got a pink slip, and they are being replaced by a person from management who was bumped out of a place as well and laid off. You have management who are not part of the bargaining unit taking jobs from the bargaining unit. You are saying that is a normal course of activity, that you can do that stuff?

MR. SULLIVAN: That is not what I indicated. I indicated that anybody who got their notice, a layoff, the 217, would go through a redeployment centre. It is not only the bargaining people who would get a chance to be redeployed. I am saying management people and non-bargaining people too, because there are some non-bargaining non-management and there are some non-bargaining management and so on. These people would also go through the redeployment centre.

I did not say that one could (inaudible) out of that. I will have to get the specifics of these positions, what would happen there. I cannot see, until they go through a thirty-day bumping period, that there would be any redeployment. I would assume that process would have to run its course and at the end of thirty days they would look at the redeployment for the positions that would become available.

MR. LANGDON: In this case, specifically, the person was a member of the union, got the notice, was laid off, and she was told that the person in management was taking her position.

MR. SULLIVAN: Was it a permanent position or was it temporary?

MR. LANGDON: Temporary full-time.

MR. SULLIVAN: A temporary position.

MR. LANGDON: It just does not matter. The thing about it is, there are a lot of problems out there.

I talked to another person who was involved with Works, Services and Transportation, a part of management, on the weekend. They had one set of instructions earlier in the week, then they were told that they would not need engineering qualifications along with management for the new jobs. Then on Friday afternoon, it was changed back to the original position. There are people out there whose lives are in turmoil. I do not know if you are going to have a clearing house or whatever you are going to have, but these are human beings, people who you put a face to day after day after day. There has to be something that is going to help these people out. Whether they have been there for twenty years, fourteen years, ten years or ten days, it does not make any difference. I would say the quicker you can establish a situation where these people can be looked at, looked after, and put in a situation where they can care for their families, I think the quicker the better.

MR. SULLIVAN: According to the collective agreement, there is a thirty-day bumping period, so anybody who is in a bargaining position would have that option. First of all, the collective agreement calls for that period, and that is being followed. We have to follow that bumping period procedure. Whether someone from a management position is being put into a bargaining unit position, I cannot speak on that. I do not know the specifics, but that to me is an unusual occurrence. Unless that position is being eliminated and responsibilities are being taken - I cannot speak on the specifics, unless it is articulated. On that, I would not be familiar and I do not even know what department it could be in.

I asked the same question myself last week, I think, that you are making reference to, with regard to maintenance supervisors. There were forty-three maintenance supervisors employed and all of them were served notice. In fact, I was asked the question in the House. There were engineering technicians laid off. I knew there were twenty laid off. I did not know if the department had twenty-two, forty, fifty, or how many it had, and if they were all laid off. The question came to the House, if they were all laid off. I knew there were twenty laid off. If twenty were all were there, they were all laid off. Those details I would not have available, but I did ask last week what is happening to those positions, because there are thirty-two new positions being created. As late as the end of last week I asked that question, and I was told that the job descriptions or whatever is being developed, up until last week - I am not sure what day it was I asked the question, probably Wednesday or Thursday - that the job descriptions of the new positions were not completed, and they could not give me an answer on that one. It is my understanding that these people would be able to apply. I guess they would have to be matched on qualifications for these positions through the redeployment centre, and anybody who is qualified would get first crack from that redeployment pool before anybody else could get a shot at it. That is my understanding.

MR. LANGDON: Again, I do not want to belabour the point and I will just end it right here. The problem is, you have people who are maintenance foremen who have been there for years. They get their pink slips, they are laid off. As a part of that pink slip operation, they are saying that you could be hired back but you would be hired back considering what engineering qualifications you would have in addition to your maintenance work. These people were upset about that. Then, later in the week - I am not sure if it was Thursday, but whatever day it was - they were told, okay, it has now been changed, you will not need engineering qualifications for the new job, you will be considered with your maintenance. That kind of soothed some of their feelings and their concerns. Then Friday they get another notice saying: No, the original one is correct, you need the engineering along with the maintenance. It is bad enough to get a pink slip but when you get conflicting information being given to a person in a matter of a few days, it makes it very uncomfortable.

MR. SULLIVAN: Sure. I understand your position. In fact, the same thing is one of the reasons that I asked the question. I was told up until last week - I think it was probably Thursday - that these descriptions had not been done yet. The needs of the department, I guess, could be appropriately addressed under Transportation and Works; what position do you need in the department. That would not be a responsibility of the Public Service Commission, you understand. They will determine their employees, but once that is determined, and what they need, it is a responsibility of the Public Service Commission. The responsibility for redeployment has been given to them to make sure whatever the description of the new job is or whatever it entails, that anybody who is displaced in this situation, along with the twenty-three who are still there from previous displacements, would have the first opportunity if they can meet those qualifications. I think, as it currently exists, to get into that pool for discussion, you must meet the minimum qualifications. That is as currently structured.

What the job entails is a decision of Transportation and Works, and as the Public Service Commission reports to me, it will certainly ensure that, that process will be followed. I am not an interventionist in the Public Service Commission. I want the Public Service Commission to operate at arm's-length and make decisions on qualifications. I would ensure that when these are created the Public Service Commission will have the autonomy to operate and to make those decisions.

MR. LANGDON: Certainly, I will never interfere. I have been elected for fifteen years and I have never ever made a call to the Public Service Commission and do not intend to, if I am here for another twenty. That is an independent agency, and I will leave it at that.

I will finish by saying, I was encouraged by hearing the minister say that he has a strong commitment to the Public Service Commission, and I would hope that the same strong concern and support will be there for the public service as well.

CHAIR: Are you finished, Mr. Langdon?

MR. LANGDON: That is it.

CHAIR: Mr. Andersen.

MR. ANDERSEN: Just a question, I guess. I started earlier on looking through the Estimates. I guess you gave some clarity to it, as to why there is confusion within the public service, with those who are being bumped and being told something one day and then a few days later learning of a different scenario altogether.

One would think that the Public Service Commission spends a lot of time and a lot of money on recruitment and staffing. With the projected minimum of 4,000 job losses over the next three to four years, one might think you would see a decrease in the overall budget of the Public Service Commission rather than an increase. The question I had in my mind this morning - I know the unions will play a big role in the bumping process and so on, but at a time when we will see 4,000 less jobs as people go through attrition and other means, you always said, Minister, that a lot of these jobs will not be filled. One would only question as to why there would be an increase in this year's or last year's budget.

MR. SULLIVAN: I mentioned, basically, additional funding of $900,000 to cover the Public Service Internship Program. I also said at the beginning, there are three different aspects of the Public Service Commission. One aspect is the staffing component. Appeals and Investigation is another. It deals with the classification of appeals for any current employees. It deals with any conflict of interest. Investigations, that is a new division that was up and running just about - what? - a year-and-a-half ago roughly. It has complaints and commission hearings. There is an aspect dealing with Employee Assistance Programs, Respectful Workplace, a Workplace Wellness program, pre-retirement services and other specific areas. There are a whole variety of services within the Public Service Commission. Only one would deal with the staffing and with maintained salary levels. There is an increasing usage of some of these programs, and demands on the employer and on the Public Service Commission to provide those services.

In addition, with a reduction - and we have indicated there will be a reduction - there are an estimated sixty-some hundred people who would retire. Roughly 4,000 is our hope to eliminate by attrition, primarily, in that process. There would still be twenty-some hundred people. Five hundred people a year, if you look at historic attrition levels, would be employed. I might add that with salaries within the Commission too, there are significant amounts that are devoted to these other areas.

If you look at the budget, there is almost $200,000 less than was budgeted last year for salaries within the Commission. Certainly, part of that is under our fiscal restraint program, and $900,000, basically, would be a commitment to that internship program.

MR. ANDERSEN: The only other comment I would make on that would be, when you talk of attrition, one would think that attrition means, as people have completed their work term and have come to an age when they can retire, that they go. Minister, there are a lot of people who call my office, and some in Labrador, who are nowhere near ready for retirement, but have received layoff notices.

MR. SULLIVAN: Yes, there are 217 actually in the public service in total, twenty-two prior to the announcement and 195 since. Based on the number in the public service, with thirty-some thousand when you exclude some other groups who would be considered to be more independent and not within the direct public service numbers in terms of the total amount, it is far less impacting than we have seen in the past. We have seen as high as 2,000 at the one time. There was an anticipated 331 people who would have gone out this past winter. Because of the attrition process and others, 114 of them have been accommodated and that is why 217 were issued notices. So, over the next while it is only fair to think that there would be significant attrition, too, within the public service because with an aging public service, that 195 of the last group, plus the twenty-three back within the last two years who might have gone out, they still have not been redeployed within the public service, the people who have gone out last year. They will be in that pool too and available to have any matching skills for any positions vacated through attrition. So, those opportunities will be there.

CHAIR: Are you finished, Mr. Andersen?

MR. ANDERSEN: Yes, for the time being.

CHAIR: Thank you.

Mr. O'Brien. Ms Thistle.

MS THISTLE: Thank you.

I wanted to ask, regarding the downsizing of the public service, do you have any funding set aside for retraining and also for assisting our workers to find alternate employment?

MR. SULLIVAN: Well, there are Employee Assistance Programs there. I know this deals with employee problems. It could be stress and other aspects, or some counselling service there. Maybe, Sheila, on the specifics, if there is anything within the EAP under that general area, if you would like to comment.

MS DEVINE: Certainly through the clearing centre, the effort is to try and provide priority opportunities for people who are impacted by the budget restraints. Through the clearing centre, again, people are given access to resume planning, interview preparation and that kind of job preparation and readiness, because as people have said, some of these people may not have done a resume or participated in an interview for twenty years. So that is the focus of that centre.

Through employee and departmental services, they would provide individual counselling to any affected employee. That could include personal counselling, it could also include financial counselling because, again, some people, whether they are working their notice or whatever, many times there are huge financial concerns that these people would have. So the emphasis is on the personal support through one aspect of the program and through, I guess, trying to facilitate people finding alternate employment within the public service set in the focus of the clearing centre, and that is really where the services will be.

MR. SULLIVAN: Just further to that, in 2003-2004 there were 778 people who availed of services in the past. We have seen, since 1997-1998, there are some years where there has been significant increases in people seeking assistance under programs. Some of them could be because of job losses, because there are still numbers from previous job losses that will go through that redeployment centre.

Just to give an example, in 1997-1998 there was a 28 per cent increase in employee participation in that program from the previous year, then 16 per cent more than next year; nine, thirteen, and nine-point-seven. So the number has increased of participation in that particular program. That has been an ongoing process because just about every week in government, for the last number of years, there have been layoffs. Layoffs have gone ahead. So these people - just because there are not 195 coming at one time as opposed to five, then another five and so on, they still have the opportunities under those programs to avail of that. Some have been availing of that too, while it would be more impacting the higher the number, obviously, plus there will be a focus, and there has been a focus in the past under - I think it was called the job re-employment priority program, I think was the original program that existed.

MS THISTLE: I am getting calls from all over the Province saying that the layoffs are greater than those being reported. What we are hearing is that casual employees, seasonal types, are not being called back, particularly for Works, Services and other departments. Is that the case?

MR. SULLIVAN: Overall, we anticipated that in this Budget there would be 700 layoffs; 400 bargaining units and 300 under management. We anticipated they would be in the seventy, eighty range or more, what we were hearing through the College of the North Atlantic. They did a news release saying only thirty-five. Now, I cannot speak for outside agencies, school boards and health consolidations. These numbers were in that 700.

Within government departments itself, initially we thought it would be 351, 352, revised back to 331, and that went back to 217 because attrition took care of these. Within government departments, out of thirty-some thousand people employed directly, there was an estimated 217.

What did happen in 2001, when the former Premier took over, for example, there were areas out there - I will use, as an example, seasonal workers with Transportation and Works - Works, Services and Transportation at the time - who would normally get laid off in the spring. They were winter seasonal workers, and people came in in the summer and would be laid off in the winter. There was an order issued not to layoff anybody. The seasonal workers who have traditionally worked seasonally for years, never got laid off in 2000, the last two winters. The last two summers they did not get laid off when they normally would. They are basically management decisions. These people never got laid off. There were fifty-some of them, I think, in Transportation and Works. All the seasonal workers were told no layoffs after 2001, kept on the seasonal people year-round.

It also happened in areas - we were told no layoffs at Whitbourne. The facility can be staffed up to sixty. There are only twenty-two out there now, or twenty-four. Normally when the levels go down, if residents there go down to thirty or forty, you layoff people and you bring them back again when you need them. There was nobody allowed to get laid off in that area, and there are several areas like that where traditionally people could not get laid off. Even though they are seasonal workers, they were told no layoffs.

In Transportation and Works; people on the West Coast got laid off and Central. By the time it came east, when the layoffs occurred there was a halt put to it. These were the people who, traditionally, would normally be laid off, and did not laid off for over two years. They are normal, management decisions of seasonal workers there. Now, what is in that mix, I guess, some got included in this total now, I would assume, but what they are - this department would have to answer specifically on what their seasonal decisions are. But, that is why there are people who got layoffs, because they were two years working year-round when they were always seasonal workers. That is one of the main reasons why you are hearing from people now who are put in that category.

MS THISTLE: So, your reference to laid off public sector workers is only on permanent employees, is that correct?

MR. SULLIVAN: No, I did not say that.

MS THISTLE: No, I did not say you said it. I am just asking -

MR. SULLIVAN: No, there are temporary people, too. There are a lot of temporary positions -

MS THISTLE: So, they would be included in that number of 700, the temporaries?

MR. SULLIVAN: All layoffs, as a result of the Budget - other than seasonal workers who come and go, they are independent - there are 700 people total. That number is now revised down to 550, because we are told that attrition picked up some of these. Some areas may not have - the College of the North Atlantic, the release said only thirty-five would be laid off. We had thought it might be double that. So, looking at a revision of our numbers in government now, we had anticipated 352 and we announced 217. The difference there is 135. So, take 135 off approximately 700 and you are down to 565.

The College of the North Atlantic were probably thirty less than we anticipated. That would take it down to five-hundred and thirty-something. The number of actual layoffs which might occur from consolidation of health and education boards may be down close to 500. It could be under, but the number I am using now to say that the 700 number now, to be on the safe side, is revised down to roughly five-hundred and fifty when you look at the consolidation of all the boards, you know, less directors and assistant directors and those types of positions. That would be the number as a result of the Budget that was given this year.

MS THISTLE: But I think what is important is that we do not have a number on the people who are not recalled, called back for seasonal work. We also do not have a number on the temporaries who are not going to be called back or -

MR. SULLIVAN: No, temporary employees and all of these, too, are in that total. Everybody who got a layoff -

MS THISTLE: But the majority of this number are permanent people.

MR. SULLIVAN: Everybody who got a layoff were not permanent.

MS THISTLE: But, the majority are?

MR. SULLIVAN: I could get the number. There is a significant number of temporaries also and a significant number of management. In total, there were 400 bargaining unit - as I indicated earlier - of which that number will be down now to around, probably in the ballpark of 300. I have to look at those 135 to see how many were management and how many were bargaining unit. But, based on the ratio there, it would be safe to say that probably the number of bargaining unit now would be less than 300. The number of management would be down in the two hundred-and-some range out of the 550.

MS THISTLE: I guess it is a moving target. It is something that I will check on.

MR. SULLIVAN: Sure. It will continue to move. In fact, as attrition occurs that number will keep going down and down. There is attrition and as the redeployment centre fills these - if there are a lot of people who leave through attrition by next year, or by the time some of their notice periods are worked out, there might be only half the number who will end up going. We can only answer that based on, number one, how many people are going to leave over the next while, and, number two, how these people who were given notices match the qualifications for these people who go out. Number one, there will have to be an attrition process, and, number two, there will have to be a matching of the people who got notice to that position which was vacated through attrition. That would determine how many we end up with and how many end up actually going out of the 217.

MS THISTLE: I think what we are finding is that rural Newfoundland is going to get the hardest blow because those people in rural Newfoundland who only have enough weeks to qualify for EI, we are hearing that these people are not being called in. They may not get into the overall numbers that you are reporting as part of the Budget cuts. It is being felt around the Province and this is what we are hearing. I have one -

MR. SULLIVAN: Over 200 on that one. Over 200 out of the three-hundred-and-some are from the St. John's region in those layoffs.

MS THISTLE: Yes, but I would suggest that the people who are not going to be called back are from rural Newfoundland and Labrador.

MR. SULLIVAN: Well, I cannot speak on - individual departments would have to be asked that question based on their - I would not be intimately familiar with Transportation and Works, or any of these departments, what their regional operations are and what is in there. I think that would be more appropriately asked in the Estimates of Transportation and Works.

MS THISTLE: Yes.

One final question I have for the Public Service Commission, and that would be the new Business Department. In the job description that you will be interviewing for, how many people will that deputy minister have to supervise? Where will the location of that office be?

MR. SULLIVAN: That is not a decision. The Public Service Commission -

MS THISTLE: Well, I will ask the minister.

MR. SULLIVAN: - looks at qualified people in areas to do that. As for the department, they do not get involved in the direction, operation, management and aspects of the department. They are strictly an arm's-length selection process to adhere to basic principles. So that certainly would not be appropriate. As the Public Service Commission reports to me as the President of Treasury Board, I would not want to get into asking questions on another department. I think that could be addressed under that specific department, I am sure. I think they had their meeting on Wednesday or Thursday night, or one night last week, and that would be the appropriate place to ask that.

MS THISTLE: Well, I am quite certain if an ad was placed to attract an executive, the executive would want to know what his or her duties were and what supervision level it entailed and where they would be located. I think that would be normal under a job description.

MR. SULLIVAN: Yes, and I also think that departmental operations should come under department Estimates, but if one of the commissioners wanted to indicate - if they have access to any of that information. I do not get involved in the Public Service Commission at all. I never question, never ask. If there is anything they know that they want to relate, feel free to relate that.

OFFICIAL: (Inaudible).

MR. SULLIVAN: No, they would not know anything about it. They would just look at, I guess, filling a position. I think, it would be safe to say that you look at filling a specific position there and anybody, I guess, would know that if it is a deputy minister position, you are responsible for the whole departmental operation. The same as any deputy minister in any department, you have the responsibilities for the overall operation of that department and reporting to that specific minister.

MS THISTLE: It seems to be a -

CHAIR: Excuse me, Ms Thistle, your time is up, your ten minutes. We gave you leniency that time because you were into a question. We are just going to check to see if anybody else wants to ask a question now, please?

Sean? Mr. Langdon? Mr. Oram? Mr. Andersen?

MR. ANDERSEN: Again, because everything here is recorded, Minister, can you answer the question again, either yes or no? Temporaries, you mentioned that there were going to be 700 this year who would have begun. You later gave a number of five hundred and so many. Again, are temporary employees included in this number?

MR. SULLIVAN: Yes, as a result of Budget layoffs, budget decisions, I indicated at Budget time that there would be around 700 people laid off as a result of Budget implications, the Budget that I announced. Since that, we have realized that number now will be more like 550. We can never tell you exactly, for the simple reason that attrition has taken up people as time goes on. If you ask me next month, it will be less due to attrition. If you ask me the month after, it could be less again, and we hope that in three months' time there will be none - would be ideal, in attrition - as people go out.

I can say that we had anticipated within government departments, independent of the College of the North Atlantic, independent of consolidation of education and health boards, there would have been 352 people earmarked for a layoff within the public service, of which that number went down to 331 revised since, and then revised to 217 who were actually issued layoffs. Out of that 217, there were twenty-two occurred before the last week, 195 announced last week, and out of these there are permanents, there are permanent full times, there are either part times or temporaries, there is contractual, basically, whatever, the whole process. That is the number of people - some management, some bargaining units. The total now is 217. There is a variety of mix in that 217.

MR. ANDERSEN: Also, that number could go higher as well.

MR. SULLIVAN: Not from our budget decisions.

MR. ANDERSEN: Okay.

MR. SULLIVAN: Any operational operations in areas with seasonal employees - I think the questions was asked - they are happening every year, every month. There is hardly a week goes by in government that there is not a layoff for some other than budgetary purposes. That happened the week before we came in, the two weeks before that, and it happened in lots of instances. There are traditional things that occur on an ongoing basis for a variety of operational reasons, but budgetary decisions, the number 700 is revised to approximately 550. It could change, but for the public service I speak directly. I cannot speak - I think the Minister of Education should be able to speak for Education, and the Health Minister for the health board numbers, but all of these were 700, of which 352 are going to be in the department. That is now 217, and there is a variety in that mix. I can speak for all departments that come under my responsibility to report.

MR. ANDERSEN: I think, from your answer then, if I was to make an estimation, I would say that it would probably go higher than what was predicted.

Minister, one last question. You mentioned a short time ago, you said that the College of the North Atlantic came back and gave a number of thirty-five.

MR. SULLIVAN: I read that in their news release, not that they came back -

MR. ANDERSEN: I will go back, because everything here is recorded. You said the College of the North Atlantic came back with thirty-five. Then you said: We were expecting - I guess we would have to be government - that to be much higher. Minister, who makes that decision?

MR. SULLIVAN: The Cabinet makes any decision on Budget, the same as any budget. We figured there would be roughly about 352 people within government departments, and probably another 350 out in other areas that would be laid off as a result of our Budget decisions, with our consolidation, and with the budgets that are provided to various institutions. We put in an estimate of that number, and the 350 half or the 352 who were in government departments, we can track that. We know that, and we know what they are. That is now 217. As for the other 350, I had anticipated it would be higher. The College of the North Atlantic did a news release - that is where I read it, in a news release - that said they had laid off thirty-five.

There are others there. I guess the College, through the Minister of Education, will have to answer for that. I am not in contact with the College of the North Atlantic. The Department of Education is the one that would deal with them. I cannot ask specifics. That could be appropriately asked in the Department of Education. The Department of Education would be the appropriate place to ask any specifics there.

MR. ANDERSEN: I guess the last thing, my comment, is: It would be really interesting if government would have announced what they had anticipated to lose through the College of the North Atlantic, what your expectations were. Obviously, you would have to have a number somewhere along the way that you were expecting to go. It would have been interesting to have known your numbers because, as you said, it is too late. No one would say it now. You did say that they recommended thirty-five and we, being the government, thought it was much higher, so it would have been interesting to know how many you had anticipated (inaudible).

MR. SULLIVAN: That is just based on - we looked at health education generally. The College of the North Atlantic comes under Education. It is approximately 350 with consolidation and with the budgets they are provided. How they break that down, we do not know. They might have made cuts in other areas as opposed to individuals. They might have cut back in supply in other areas to meet a budgetary requirement. I think that is a decision the College would make as to how they are going to meet their budgetary requirements, whether it is going to be in the human resource element or in some other element. I cannot speak for the College as to how they arrived at that. That is a question that the College could - they are given a budget to operate under. They deal with the budget, and if they deal with it with no layoffs, or thirty layoffs, or forty or fifty or whatever, they deal with their budget within the line that is provided. They are decisions that are made within that College.

CHAIR: Are you finished, Mr. Andersen?

MR. ANDERSEN: Yes.

CHAIR: Mr. Langdon.

MR. LANGDON: I would like to go back to the Vice-Chair of the Public Service Commission again, for the record.

When you decided, or did you decide, for a call for proposals for the two positions for the new Department of Business - a deputy minister and so on - was it of your own volition that you went out and asked for outside help to help you people with the new ads? Were you asked to do it, or did you do it on your own?

MR. MARSHALL: The way the request evolved was that the Clerk of the Executive Council asked us to consider taking the lead role in the process. He asked whether or not there was an opportunity to engage a consultant on the basis that, as I described earlier, there was a need in each of those areas for a very broad, well-qualified individual, because they were interested in ensuring that energy was well covered off in the Department of Natural Resources, that the Business portfolio was a new one and they anticipated that it would be a promotional responsibility and it required an individual who had brought contacts and significant depth in the business field. The Public Service Commission considered that and it seemed appropriate, and we moved ahead with it.

MR. LANGDON: I will just ask a supplementary, I guess, to that. It will be my last one.

Do you feel, honestly, as the Vice-Chair of the Commission, that you could have done it yourself without having proposals from outside?

MR. MARSHALL: I believe that in terms of the contact that I have had with the organization, and the kinds of services that they will provide, that the field will be substantially broadened, the nature of the expertise that is brought forward by the organization will be helpful in ensuring that the best that is available will be available for choice, yes.

MR. SULLIVAN: Sheila has a comment, too, on that one.

MS DEVINE: I just want to very briefly refer to our Professional Services vote. Traditionally, the Commission has always been voted money to bring in special technical or consulting services where there is a technical requirement or for some reason the Commission decides it will take the lead but it needs to have some other technical services. That is covered off in, certainly, our Professional Services vote. It is just, you know, again, depending on the kind of recruitment we are doing and so on. Sometimes we do not use that particular vote, but in this case, obviously, we will be.

MR. SULLIVAN: The information on that one, too, under Professional Services, there was $149,000 budgeted last year, $111,300 used, and this year $129,300 was budgeted; because, for any specific aspects of counselling services or even involving selecting Chairs, I guess, of Level III boards, for example, or areas that would be required, certain selection boards or specialized recruitment professionals for whom you need, I guess, some expertise or some broader perspective in selecting, that is the nature of that specific line item there.

MR. LANGDON: I will just say this: There are some questions within my own mind that it is not all black and white. It seems like there are areas of grey as to what happened, but I will leave that for me to contemplate in my own time.

MR. SULLIVAN: Okay, that is certainly something I am not familiar with, and with the Public Service Commission I do not have day-to-day conversation with them on any position going through the Public Service Commission. I get numerous calls to my office and I just basically do not do it. The Public Service Commission, I want it to be independent, arm's-length, and that is the way I intend it to be. I am sure these two individuals there, who have worked with me since November, have never had any encounter of that nature whatsoever.

MR. LANGDON: I will make this point: It is no reflection on the Public Service Commission. My questions that I have, within my own mind, are from the eighth floor.

MR. SULLIVAN: Yes, I think it is important - I guess the eighth floor you refer to, the Premier, has the choice to go and select the deputies. That is what is being done.

MR. LANGDON: Absolutely. I understand that.

MR. SULLIVAN: I think it is a very positive thing to want to see top executive levels going out and having, whatever way the Commission would want to do it, directly or to consult with other people, to get as broad and as good candidates as possible there. I think it is important. I think that speaks well for the role of trying to enhance the merit system in the public service and to get qualified people. I think it is a very, very positive step, a merit in that, and to be perceived in that manner there, I think, bodes well for it, and bodes well for where we want to take the Commission.

MR. LANGDON: I will just say this in concluding. I read the poem one time, The Opportunity, where the king's son and the coward were involved in a battle. The coward saw the sword and there was just the hilt left and he figured he could not win a battle with it. The prince came along and saw it and won a great battle.

All I am saying to you is, it is a difference of opportunity, a difference of interpretation, and if we stay here for four hours or five hours or ten hours, it will not change.

MR. SULLIVAN: Just one general thing, I suppose, (inaudible) the questions, too, I will certainly comment. I think we moved in the wrong direction in 1997 when we removed the responsibility from the Public Service Commission. Over 70 per cent of the people hired in government were not hired directly through the Public Service Commission. We feel that every Newfoundlander and Labradorian is entitled to get hired on their qualifications, and it is an area that we like to see happening. We would like to see that principle and, if you start at the top with the deputy minister, there is no better way you can start than an area that the Public Service Commission has exemption, it does not have the authority to deal with or relegate it to it. I think it is a very positive step.

MR. LANGDON: (Inaudible) do the same thing for (inaudible), practice what you preach. I will give you a lot more examples if you want them.

CHAIR: Are you finished, Mr. Langdon?

MR. LANGDON: I am finished.

CHAIR: Are there any more questions on the public service?

MS THISTLE: No more questions.

I would just like to thank the officials for being here this morning. They did a good job of explaining the questions that were asked. No doubt in days to come you will probably see some correspondence because it is clear we did not get the answers we were looking for, but we will get them at a later date.

Thank you very much.

CHAIR: Mr. Andersen, do you have any follow-up questions?

MR. ANDERSEN: Just a point, but to us it is a very important point. Again, I know that there were questions asked and, as my colleague said, it was not directed at the Public Service Commission, but we thought the questions that were raised were on a particular department, and we hoped that we would have the minister who was responsible for that department come into the Estimates so that we could question him.

AN HON. MEMBER: The same as we are doing this morning.

MR. ANDERSEN: The same as we were doing here this morning. I just want to make that point for the record. (Inaudible) questions asked of any department, and we were hoping that the minister responsible for that department would have come and answered questions for us, the same as other ministers do.

MR. SULLIVAN: Mr. Chair, I have been in this House for probably twelve or thirteen different Estimates and I have never yet, while I have been here, seen a Premier stand and answer questions on his department, his responsibility.

There was an opportunity for this, it was dealt with in the House, the Premier was out of the country, and even if he was in the country, even if he were here, Premiers before have never answered. I have asked questions since 1992 on Estimates to the Premier, the Executive Council responsible for it, and areas, and it has always been the Minister of Finance who has answered, or some other minister who have answered questions on these. That is something that - probably I can speak for twelve years at least - has not happened. If it was good for twelve years; why wasn't it good for the thirteen years?

CHAIR: I think we will have to agree to disagree on that one, both sides.

MR. ANDERSEN: Can I make a comment to that? I would like to.

I have been here since 1996 and I can say to the minister that if he can go back over from 1996 until this year, if he can show us where a minister responsible for their department did not show, then I would like to see it. I would say to you that the Premier has taken on a new approach, that he has a line department and that is the reason why I raise the question again here and I will continue to raise it at every opportunity I get, because he is now a minister of a line department and we felt that he should have been here to answer the questions. I will leave it at that.

CHAIR: My information is that the Premier, and therefore the minister, is back today, so maybe you could ask the question when the time is appropriate in the House to do so. I am sure he will welcome your questions.

There being no more questions on the Public Service Commission, we shall call the subheads.

Shall subhead 1.1.01 carry?

SOME HON. MEMBERS: Carried.

CHAIR: Carried.

On motion, subhead 1.1.01 carried.

CHAIR: Shall the total carry?

SOME HON. MEMBERS: Carried.

CHAIR: Carried.

On motion, Department of the Public Service Commission, total heads, carried.

CHAIR: Thank you very much.

The Public Service Commission can leave us. Thank you very much for your attendance. We are going to refer now to the Department of Finance.

Does everybody agree with a two minute break?

SOME HON. MEMBERS: Sure.

CHAIR: We may even go three minutes.

MR. ANDERSEN: Take five.

CHAIR: We will go for five minutes. It is 10:25 a.m. and we will report back at 10:30 a.m.

MR. SULLIVAN: Thank you.

CHAIR: Before we call the heads of the Department of Finance, just a quick commentary from the minister on a question that was raised in the Public Service Commission, for which you were looking for an answer.

MR. SULLIVAN: I have that name for you, if you want it on the record.

MS THISTLE: Okay.

MR. SULLIVAN: The company that was there, the Public Service Commission checked it, is Robertson Surrette.

AN HON. MEMBER: Is that a local company?

MR. SULLIVAN: The person is employed here. The people they have are employed locally here. Robertson Surrette, they have a local office here.

MS THISTLE: You said Robertson?

MR. SULLIVAN: Robertson.

MS THISTLE: R o b e r t s o n.

MR. SULLIVAN: That is correct, Surrette, S u r r e t t e. They do have a local office here, a local phone number, local office and so on. It is a local company that operates here, the same as a lot of companies, I guess, have offices here and operate here.

MS THISTLE: It is a name that I have not heard of, but that does not mean anything. Thank you for providing that much information.

Are we ready, Mr. Chair?

CHAIR: Yes, we are. I just want a clarification. The Clerk will call the first subhead and we are going to leave it open to ask questions anywhere within the confines of the department, just in case there are different members, instead of just taking one subhead at a time. We are going to open up the subheads from start to finish, and then if anybody wants to float around with a question they can. Is that okay with everybody?

MS THISTLE: Sure.

MR. ANDERSEN: You are too kind, Mr. Chair.

CHAIR: Thank you for your vote of confidence, I say to the Member for Torngat Mountains.

CLERK: Subhead 1.1.01.

CHAIR: Subhead 1.1.01 has been called, and I will turn the questions over to Ms Thistle.

MS THISTLE: Thank you, Mr. Chair.

Are you entertaining questions this morning from Executive Council?

MR. SULLIVAN: No, Executive Council has always been done in the House of Assembly during regular House hours. That is a separate area that will be done within the House. Along with the Consolidated Fund Services, that has been done in the House. This is for the Estimates of the Finance Department on page 29, starting in the Estimates book.

MS THISTLE: I realize that, but I wanted to ask that question.

MR. SULLIVAN: There is a provision for that within the House itself during regular hours.

MS THISTLE: I realize that, too. You are not taking any questions on Executive Council? You are leaving that entirely -

MR. SULLIVAN: No, there is an appropriate time for Executive Council. There is a fair amount to time set aside for that. You will have hours and hours, a lot more than in a regular Estimates meeting, if you have questions on that.

MS THISTLE: Okay, now that that matter is cleared up, before I ask any real questions, I would like to go through some of the headings, if I could. I guess the first one would probably be Transportation and Communications in the Minister's Office, subhead 1.1.01.03. The amount is $50,000. Do you expect to be doing more travelling this year?

MR. SULLIVAN: No. Last year there was an expenditure - actually, last year there was a budgeted amount of $71,000 and there was $44,500 spent. This year we have budgeted for $50,000. One of the reasons why, I guess, is that we are looking at - there was discretionary spending curtailed, for instance, during last year. That is one of the reasons it came in at $44,500. When we came in, we put a limit on any discretionary spending. It had to be approved, and it had to come through the minister, within his department. We sort of scrapped discretionary spending - only compulsory or necessary travel.

This year we have looked at budgeting $50,000. I do know for a fact that there are going to be meetings over and above what were required, I know, just last year. There was a Council of Federation established under the Premiers across the country, and on that there is a committee set up on co-operation and fiscal imbalance. I know we have a meeting near the end of this month in Toronto on sustainability of health care, with Finance and Health Ministers, under the umbrella of the Council of the Premiers. The Premiers are meeting somewhere.

We budgeted $21,000 less than last year, that was budgeted in this area. We think it is a significant decrease in our budgeted level. As to actuals, you can never speak directly on that, I guess, until next year comes, but there is a significant restraint of twenty-one on seven. That is about a $30,000 reduction in budget in this area.

MS THISTLE: For the record, I would like to say that discretionary travel has been in effect for two years. It just did not happen last year.

MR. SULLIVAN: I am not disputing that; but, for instance, last year, up to the time that I took over on the Transportation and Communications area, there had been $29,000 spent from April to October in the department and, after the election, October 21 onwards, up to the end of the fiscal year, there was only $15,500 spent. So, there was just about half as much spent during my term in office of five months versus the previous, well, five point some and six point some, which is almost equal in time, the spending was about half of the previous ministers. In other words, we did cut down on any discretionary spending generally in government, not just within this office, so there was a significant reduction in travel costs.

MS THISTLE: What I would also like to say for the record is that you were a new government as of October 21. No doubt it took a long while to get geared up to run the government, so I would expect that is why you were not doing any travelling.

MR. SULLIVAN: Actually, the week after I became minister, I went to a meeting in the Atlantic Provinces in November. I got on an airplane within days of becoming minister and went to a meeting of Finance Ministers in Atlantic Canada. Myself and the deputy - who, I guess, was ADM at the time - went to a meeting very, very quickly. We have had a fair number of meetings.

One of the reasons it is down is because our costs were down. For example, it is not necessarily just in the number of meetings, it is in the cost associated. Halifax, for instance, the cost of that trip - the total cost to go to that conference was, I think, $680, if I remember. That is including everything for me to get there and back at that meeting.

MS THISTLE: Well, I would say you should mark that one down because this is going to be first cheap trip you will take in the next four years.

Anyway, I am going to move on to Executive Support. I see that Transportation and Communications has increased on that one. What do you anticipate happening there over and above last year?

MR. SULLIVAN: Last year there was a budget of $64,400. This year we are budgeting $60,400. We are budgeting $4,000 less. You are looking at 1.2.01.03, I assume?

MS THISTLE: Yes, I am.

MR. SULLIVAN: We budgeted $4,000 less than was budgeted last year because we, under fiscal restraint, wanted to budget less. One of the reasons it was down last year, also, is because we had a discretionary spending policy in which we wanted to curtail expenditure in that area. For instance, it went down from $64,000 to $45,000 in the actual year. So that is a combination, certainly, of restraint measures and adherence to - discretionary spending is one of the primary reasons for that.

MS THISTLE: But you have to look at the fact that you only spent $45,000 last year. So why would you up the budget again, seeing you are talking about restraint?

MR. SULLIVAN: Well, we actually budgeted $4,000 less than last year. One of the reasons it is down so low is because we had adherence to our policy at the end of the year. We wanted to curtail expenditures of a discretionary nature because we were in a significantly worse fiscal situation than we had anticipated and we wanted to try to contain it.

MS THISTLE: Well, if that were the case you would go back to what you actually spent last year, which was $45,000.

MR. SULLIVAN: Well, a certain amount of executive travel traditionally has occurred in the past and we certainly went less than the previous government budgeted, by $4,000. So, there is a certain amount of executive travel needed there. Deputy ministers and other officials at the executive level need to participate in - whether it is conferences or other information pertaining to their jobs. We cannot eliminate that, and it is important to have that included.

MS THISTLE: I will leave that one for now but you are not practicing fiscal restraint when you increase it by $15,000 over and above what you actually spent last year, but I will move on to a new line.

MR. SULLIVAN: Well, I think it is appropriate to compare budget to budget and actuals to actuals. I think next year you can look at the actuals and then you can do comparisons. You cannot compare budgets to actuals. You must compare actuals to actuals and budgets to budgets.

MS THISTLE: Under Administrative Support, 1.2.02, do you have anybody working there? I do not see any salaries listed.

MR. SULLIVAN: Which one is that, 1.2.02?

MS THISTLE: 1.2.02.

MR. SULLIVAN: Is that Employee Benefits?

MS THISTLE: No, no. There is nothing there for Salaries for Administrative Support.

MR. SULLIVAN: No, there is no salary basis here. That is just administrative things, like Employee Benefits, Transportation and Communications, Supplies, all these types of things which would be included under that, Professional and Purchased Services, et cetera.

MS THISTLE: There must be employees there. You have Employee Benefits for, I guess, conferences and different events that they are travelling.

MR. SULLIVAN: No, that is a payment to the Workers' Compensation Commission; any CPR, first aid courses, professional, work related and conference registration fees. It is not for direct employees. It is of a general nature.

MS THISTLE: I notice that for Transportation and Communications you are using the budgeted figure of 2003 again. When you know the actual was only $135,000, why are you looking at increasing that to $41,000 in this time of restraint?

MR. SULLIVAN: It is the same amount as budgeted last year.

MS THISTLE: You did not choose to use the actual figure instead of the predicted one?

MR. SULLIVAN: No, that has been the historic use of it and we did not want to - actually, if you go under it and you do not get savings in the department you have to go to warrants. So, it is better to have allocations in a budget than go looking for Special Warrants in cases. That is why any budgetary item generally follows historic levels.

CHAIR: Excuse me, Ms Thistle, your ten minutes has expired. We will be back to you in a few moments, I am sure.

Mr. Langdon.

MR. LANGDON: I want to take a little different twist on this here. Over the last couple of weeks we have seen a tremendous increase in the price of gas to the general public; something that was not anticipated, I am sure, to go as much as it did. I filled up in my district on the weekend, it was a dollar and six-point-five cents per litre. After considering that the public employees have just had zero-and-zero for this year and next, the government, through its service fees, expect to raise another $25 million more on everything from a death certificate to a birth certificate and everything else in between. I am wondering if the minister has any second thoughts? I heard him on the weekend saying that it would not happen. I am wondering today, has he reconsidered or thought about probably capping or giving a decrease to the public in terms of provincial government taxes per litre of gas?

MR. SULLIVAN: Taxes are based on a litre and as the price goes up, in some cases consumption could go down and government gets less revenue for the gasoline tax. You would assume that if people have limited income they would spend less, they would do less driving if it goes up. If we follow that basis, or marginally less, we get less in gasoline tax. So our revenue goes down. To give a refund when we have less revenue under gasoline tax would not make sense. We have already budgeted on a certain amount. We lose money, too, on gasoline tax when prices go up. The lower it is, the more we make on gasoline tax, because if you consume more, we make more money. Ours is strictly on a consumption per litre, not as a percent.

MR. LANGDON: Yes, I understand what you are saying but, I mean, there is no guarantee that - I mean, there are people who have to go to work. There are people over in the community where I am from, loggers, they drive from the community up to the woods camp, which is about three to four hours, and you know, gas that has gone from eighty cents a litre to $1.06 is a big difference. Public service people who are on the lower end of the rung, I just thought that the minister would see this as an opportune time to be able to do something for the people who basically need it, but obviously he is not.

MR. SULLIVAN: No, but in response to that, traditionally, too, prices have jumped and then they drop down, and previous governments have not adjusted their taxes as the prices go up and down continuously. It is set in at an amount per litre.

One thing governments did some time ago, I think they changed it from a percent. I do not remember the exact year, but I think at one point it was a percent. I would think around the early 1990s, if I am right in my guesstimate of that, they decided to help cushion those costs for people when it jumps up. I think you were probably a minister, or certainly a member of that government, which decided that as it goes up let's put it on the litre, and then it does not affect people as much when it goes up because it is a litre tax. I think that is one way we have provided some stability in that particular aspect. So, I think that is only fair. We would lose revenue on fuel tax as it goes up and then to look at giving back money, we would lose more money. That is not a position we are - with an $840 million deficit, we are not in the best position to go rebating and losing more money on top of what we are losing now.

MR. LANGDON: So, you will not be putting a cap on the amount there?

MR. SULLIVAN: A decision like that would be a decision that Cabinet would have to make, not just me, as minister, in setting those and they would have go through that process. So, it is not an area that I feel we are in a fiscal position to do. Had we had a balanced budget or surplus, it is an area that could be looked at, but in light of our fiscal restraints and so on, it is only going to further increase our deficit.

MR. LANGDON: Well, obviously, again I am not surprised but leave it as is.

MR. SULLIVAN: I might add -

MR. LANGDON: Mr. Chair, I have to say that I am not physically well this morning. I have a doctor's appointment and I will be excusing myself from the Estimates. The other people here can carry on. It is not that I want to leave, but I have to do that.

I want to say before I go, I want to thank the officials for coming. You are good people, and I am sure that the people in the Province have support in their public servants. I think that at the end of the day we do not need all the external reports to tell us that you people know what you are doing, and I am sure that Mr. Gourley found that out when he did his report, that the information you gave him was correct. So I want to commend you on that.

CHAIR: Thank you, Mr. Langdon.

Mr. Andersen.

MR. ANDERSEN: Certainly, I have some questions. I guess, as the Minister of Finance, you are responsible to all departments as to exactly how much each department is going to have for their budget.

Mr. Chair, I believe that we have to be out of here by 1:00 p.m.

CHAIR: Pardon?

MR. ANDERSEN: What time do we have to leave here in order to -

CHAIR: Twelve o'clock.

MR. ANDERSEN: Twelve o'clock, okay. Well, we will not even come close to getting through the Estimates here today, so I will ask a few questions while I have the opportunity.

Minister, I want to ask you, obviously that junior consultation that - as you and your government said, that you inherited a deficit. Although, certainly you would think from the records in the House of Assembly it certainly seems that it should come as no surprise to you as to questions that you raised last year in what you were saying.

I want to ask, there were several projects that were approved last year by the previous government, and I know I have asked the questions of the other ministers, one is the $2.4 million that was allotted for an auditorium, not for Lake Melville but for all of Labrador. Right now the children, in particular, do not have the opportunity to attend music festivals, art festivals, you name it. Performers who go around this Province and in Labrador West are performing at Arts and Culture Centres but in Happy Valley-Goose Bay they are doing this in a bar because that is the only suitable place they have.

Up until February, the Minister of Municipal Affairs was indicating to me and to the Town Council in Happy Valley-Goose Bay that the money for such a project was sitting in the department. A great amount of work was done by the people who have gone out and solicited the federal government to come up with well over $300,000. Their invoices have to be completed by the end of this fiscal year; if not, the money will be lost.

As the Minister for Finance, I would have to ask the question as to why such a vital piece of an educational tool that we need for the children from all over Labrador was axed from this project?

MR. SULLIVAN: Did you say at the end of this 2004-2005 fiscal year a decision has to be made?

MR. ANDERSEN: The over $300,000 that was allotted and fought for from the federal government, the invoices have to be included by the end of this fiscal year.

MR. SULLIVAN: The 2004-2005 fiscal year?

MR. ANDERSEN: Yes. If not, the money is withdrawn.

MR. SULLIVAN: Okay. So, we have until March 31 of 2005, I would assume, committed to that, I understand.

MR. ANDERSEN: Well, if you do not have invoices done before - I mean, it is one thing to commit to it but if you do not have your invoices done the money is gone.

MR. SULLIVAN: Okay. The point I am making is that if it is the 2004-2005 fiscal year, this initiative can be brought to the table in next year's budgeting process. If a decision is made and a commitment given on that specific aspect, it is an initiative that can come to the table for next year's budget, if it is the current fiscal year you are speaking about.

MR. ANDERSEN: I am talking about the allotment from the federal government, not the provincial government.

MR. SULLIVAN: Yes, but I am sure it -

MR. ANDERSEN: It is okay to say that the provincial government has put the $2.4 million project on hold. The other key part for them is the well over $300,000 that has been allotted by the federal government, which they told the people in Labrador, through their MP, that invoices have to be submitted before March, 2005. If invoices are not made and done than the money will be lost.

MR. SULLIVAN: Well, all I can speak on is the budget decision this year and what the details and commitments - I would not be privy to all the details of what the federal commitments are, whether verbal or written. I would not be aware. That would be something - it is not directly in my department, but budgetary decisions were made this year on all projects. We delayed projects all over the place and cancelled projects; schools in numerous areas, from Herdman Collegiate in Corner Brook, from Mobile to L'Anse-au-Loup (inaudible). It is all over the place, from the hospital in Grand Bank. They are budgetary decisions we made around the table.

When we looked at our fiscal situation we were facing a billion dollar deficit. We were facing a cache of $600 million and we decided decisions had to be made. Capital money is the same as money you are paying on current account. It is still money and an outlay of government. So, we made decisions at the Cabinet table as to what projects we were fiscally able to proceed with this year. Of course, as for the future, decisions will be made in a similar manner. I am sure, as a minister, you are aware that Cabinet makes decisions on budgets and on projects. That is the way it worked, and the Cabinet made the decision on these.

MR. ANDERSEN: Minister, when we look at what has transpired in the last while, being told of jobs gone, jobs lost, and the next day only to have a minister of a department come back to say, well, we have changed our minds, we are going to reinstate that employee or employees, and rightly so. A prime example would be what was predicted for Labrador West, where they were going to lose their driver examiner, and then, when questioned in the House and so on, the minister did reconsider.

When you hear of all the people who are going to come out of the system this year, and you go through just about every department, one would think there is an amount of savings going to be made this year. Every department you go through, when you look at Salaries, they basically remain the same. Some may have gone down a bit, but others have gone up quite a bit. Obviously, the Budget that was presented here, by yourself, in this House, Minister, don't you think you are going to have to make a lot of amendments to it?

MR. SULLIVAN: No, none whatsoever. Salaries in a lot of cases, as you go through them, have gone down. Where salaries might be maintained this year, decisions made this year, some people may have had forty, fifty or sixty weeks due by either pay redundancy or given notice. There is a period of time where some of the people who received their notice now might receive a salary into next June. They might be here until next May or until November. If notice is given it may take a period of time. Allowances would be made for these within the Salaries votes. Part of the Salaries increases in some areas has been because of an increase in public services. The first year you are going to get a complete annualization for the public service increase. Last year you only got the partial impact of that, now you are getting the full impact, and there is a reduction of numbers within the public service, a fair number of reductions, basically. Salaries went up because of continuation of payment to people who have been given notice or the annualization of salaries. There are less positions than salary positions there. There are significant less positions within political staff.

I will just use one example. For instance, in my office, the Salaries there, two years ago it was $465,000, this year we are looking at the total budget of about $202,000. The Salaries portion is $263,000. We are down significantly. I have two political people in my office and my predecessor had four. That is basically in all departments. We have reduced significant numbers not only in the political staff but also in reductions in other specific areas across the public service. That would not be accurate, that we have had increased. There are less positions, both political and otherwise, and any increases are due to having to pay people when you give them notice or there is annualization of certain salaries that are now getting the full impact, that the full impacts were not in previous budgets.

MR. ANDERSEN: Minister, I guess you could certainly sit down and listen and take it all in stride, you know, what you are saying, but I would just like to ask a question on subhead 2.3.01 on page 36, because, contrary to what you say, we see here an increase of almost $500,000 in salaries, almost $500,000 in just one subhead.

MR. SULLIVAN: If you look further down on that page you will Revenue - Federal, $1.1 million. That is because we are participating in a census; we are getting a recovery. Look at the recovery the year before, $272,000; we are getting an extra $833,000 coming back because of a census project that is paid federally. We are getting $120,000 budgeted there for the First Nations. We are being paid and reimbursed 100 per cent to set up community accounts, to try to get it started with the First Nations, and the federal census program - in fact, our area here, our staff, have become basically experts in the field. We are doing work here on such accounts for Atlantic Canada. We are getting reimbursed from other provinces. There are seven universities across the country contributing, and we are getting money back on each of these. If you took out - I will just use the census one alone, not counting other areas. The census alone, in salaries, in that figure there is $440,200 for census alone that we are getting 100 per cent reimbursement; Transportation and Communications, $66,600 reimbursement; $47,000 on Purchased Services; $25,700 on Property, Furnishings and Equipment; we are getting $415,600 out of that Information Technology; we are getting back $415,600, for a total of $985,000 that we are getting back on the census alone, not counting other areas.

In other words, we have employees here with expertise who are working for our Province, working in the public service here, who are being paid for by other Atlantic Provinces, by the federal government, by the First Nations and others, because we have the expertise here and it is being highly regarded. We have people leaving here continuously to attend conferences and to participate in areas here that are paid 100 per cent of all their costs related to it. So we have sort of almost a centre of excellence in this area here, and that money is channeled back.

Just look at the bottom line when we cancel out Revenue - Federal and take $1.1 million off that total, we budgeted this year, when you net that out, you can see, over $42,000 less in the public purse of the Province regarding that. In other words, that is a decrease, basically, in those areas, and the only reason it has increased is because it is 100 per cent recovery. That is a very positive good news story.

CHAIR: Thank you, Mr. Andersen, your time has expired. You can come back again in a moment.

Mr. O'Brien? Ms Thistle?

MS THISTLE: Thank you, Mr. Chair.

I would like to ask the minister if you could go back to Administrative Support, 1.2.03.

MR. SULLIVAN: Subhead 1.2.03?

MS THISTLE: The heading on 1.2.03.07., Property, Furnishings and Equipment, $90,000.

MR. SULLIVAN: One second now; subhead 1.2.03?

MS THISTLE: Page 30.

MR. SULLIVAN: Subhead1.2.03., yes.

MS THISTLE: The heading 07., $90,000, can you tell me what that is about?

MR. SULLIVAN: Yes, I would. This year we decided to actually put new positions in place in government on the gas audits. We feel that the former decisions to reduce gas auditors - there are a lot of people using gasoline, marked fuels, that is costing us hundreds of thousands, if not millions, of dollars, and we decided to go back and put people back in these positions now. We think we are losing tremendous revenue. In order to do that - that is for the potential purchase of three pickup vehicles that you need. You are having, of a hazardous nature, certain chemicals that you would have to store in the back of a pickup, and these people will be doing those actual audits there that could increase our revenue by many fold as a result of that. So, that is one of the areas there that we are looking at increased, actually, extra employees, basically, in that area, and there are extra costs associated with setting up that, and we are confident it will have a significant return, a positive return, in extra revenues.

Already we have done some auditing of people who were illegally using it, and our auditors will go back, and you may have to go back three years and pay extra taxes because you were utilizing that. That is an area that will generate revenue for this government, and it is a necessary expense to enable them to do that.

MS THISTLE: Is this a departure from your previous policy? Because my understanding is that you are renting a lot of your vehicles. I know, for instance, the RNC are renting their vehicles instead of buying new ones. Are you actually going to go out and buy new vehicles?

MR. SULLIVAN: Well, the decisions that get made will get made on what is the best decision. Yes, if it is cheaper to do it, we are looking at that. This is in line - this is really a reversal of a former government policy in terms of these positions there. The union have been calling also, saying: Look, you have been losing revenue; why don't you do this?

We have gone out and, if you have someone to do it, the tools to do it, it is possible that if availability of one within a fleet can be determined - we are reviewing the whole vehicle fleet within government now through Treasury Board. We are looking at all vehicle use, leases, and we are looking at the whole scope of things to see how we can most efficiently manage the fleet of vehicles here within government.

The Premier had two vehicles. The former Premier had, I think, a Durango, a fifty-some thousand dollar vehicle, and an LHS, about a $45,000 or $50,000 vehicle that has gone back in the fleet also. We are looking at a total management of the fleet. Maybe some are dropped from the fleet and some might be added, but we are looking at the whole management. If there is a specific on these ones, certainly the deputy minister - because I think there is one. Is there one we might be able to access? Still, there is a cost associated with it from a departmental point of view.

MR. PADDON: The intention is to have three positions across the Island to do gas tax inspections, so you would have a vehicle for each of those people because of the hazardous nature. If we can use vehicles that are already existing around government, we will use them. The thought was, we need to put an allocation in here to give us flexibility to be able to, I guess, get this program up and running. If we can use existing vehicles, we will; if not, we will have to use the money from the allocation to get the vehicles.

MS THISTLE: Okay, so no decision has been made at this point.

MR. PADDON: Not at this point, no.

MS THISTLE: I see.

MR. SULLIVAN: If I could just add further on that, we are going to look at the existing vehicle pool, of course, and if there is availability and suitability, obviously, that would be the first choice; but, if there is not, we could go on a wing and a prayer and not have people in position and probably significant revenue at stake. There would have to be an allocation to cover that. If we can reduce our vehicle cost in our fleet to do so and do that, that is an avenue we are going to look at within the whole process of vehicle use.

MS THISTLE: When do you expect to be in a position to make that decision with regard to purchase or lease of trucks?

MR. SULLIVAN: That is an operational thing; I will defer that to my deputy.

MR. PADDON: We would hope to have this program up and running within a couple of months, for sure. We want to get it operational as soon as possible to get the revenue benefits as soon as we can.

MS THISTLE: Moving on to General Government, subhead 1.3.01.01, Salaries, I notice that the actual amount spent was just over $1 million last year and you are brining that up to $1.8 million again. What is your reason for that, particularly in light of all the layoffs that have recently occurred?

MR. SULLIVAN: There was certain pay equity that had to be paid out and it got carried over. There is some carry-over into this year and it had to be a pay equity amount included in there.

MS THISTLE: Are these severance packages that you are paying out, or what?

MR. SULLIVAN: No, these ones are pay equity and there is a carry-over that should have gone into last year, that technically would have carried, but it got carried over into this year, an expenditure that is this year's cost now, because I guess it is something that was not incurred. It intended to be incurred last year but did not get incurred until this year. Therefore, that drives it up by that amount, and there is a pay equity amount in there also for a settlement of pay equity request. We had to budget for it.

MS THISTLE: How much is that pay equity amount?

MR. SULLIVAN: Well, the pay equity amount, I do not have the exact figure, but it is considerably - it was less last year than the pay equity requirement this year, I know that. The pay equity costs are higher this year. I am not sure if we have the specific breakdowns on all, but the costs for pay equity are higher this year, 2004-2005, than last year.

MS THISTLE: Are they covering all departments?

MR. SULLIVAN: Yes.

MS THISTLE: It is not related to - of course, no, that court case is -

MR. SULLIVAN: No, the heading says Government Personnel Costs. They are basically, all of these, in the salaries as pay equity. There are some carry-over costs and salaries. They would cover all basic departments on this issue, so much for each department. What the breakdowns are, and all of that, well, I would not be able to give you that amount of detail here. It would be impossible.

MS THISTLE: So, you are saying that the pay equity that was budgeted for last year was not paid? Are you saying that?

MR. SULLIVAN: No, I am saying it was less last year than this year, and there were also carry-over costs into this year - the reason it is higher than revised - but keep in mind it is lower than budgeted last year.

MS THISTLE: But, it would be a difference of $800,000?

MR. SULLIVAN: Actually, we are down $28,000 over last year.

MS THISTLE: Well, if you could, I would appreciate finding out, if you would let me know at a later date, what that discrepancy really is?

MR. SULLIVAN: Yes, the pay equity would be amounts on behalf of all the departments, so I guess they would be amounts that we can make a note and see what those amounts are.

MS THISTLE: Okay.

Pensions: during the Budget exercise, and particularly the report that was done by Michael Gourley, there was mention made of $93 million required to accrue for employee benefits. That was, at best, an estimate. Are you in any position now to confirm what that actual figure should be?

MR. SULLIVAN: That is not the item you are asking on there, though, Employee Benefits under Pensions?

MS THISTLE: No, I am not.

MR. SULLIVAN: Right. The question you are asking regarding the PWC report - we are obligated to make allowances for post-retirement liabilities which would include health and life insurance benefits. In other words, the costs we are incurring today for health and life insurance have to be paid out in the future, and those have to be accrued, we have to make an allowance for that. Otherwise, it all becomes due at that particular point in time. Under the Public Sector Accounting Board, the CICA, it has to be recorded. You have to record that once you are aware of it. Approval was given last May by the former government to move forward in tabulating this item, and during the course of last year the actuary was doing work on this. Up to the time we had the interim report, they had determined it to be probably $50 million. I think that was the figure they had at the time, but they said that is a ballpark.

With the final PWC report they said, if the report was delayed we are at the process where we might get a more accurate number. When the report came out, the actuary informed us that it is now at $93 million. That was the amount for that year. They had told us in the report that the total amount accrued would be $1.223 billion. That would be the total accrued amount. That was in the PWC report, the question you are asking. That amount now, including the current amount, I think is a little over $100 million allowance for that item, overall. We have to factor those costs with what we are going to pay out later.

If we decided, for example, not to pay any post-retirement costs - some jurisdictions said, we won't pay any health or life insurance for anybody after they retire, that is not our responsibility - that would lop over $1 billion off our debt basically, our commitments we have to make. That is a commitment, and it is costing us roughly $100 million a year to meet those requirements.

MS THISTLE: You did say, at the time of the Gourley Report or PWC report, that it was an estimate, the actuarial study was not complete. You were estimating it to be in the vicinity of $93 million. Is that actuarial still taking place and when will it be done?

MR. SULLIVAN: I will just give you, off the top of my head - the amount that we had predicted in the final PWC report was $1.223 billion, if I recall that figure. At the end of the fiscal year we had that figure revised to be, more accurately, about $1.1 billion. I wouldn't know if John would have the exact number, but roughly $1.1 billion. The total amount carried was very close to what it was. I would assume there is always ongoing actuarial work to look at, based on your number of employees, their ages, how long they live after they retire, and the shifting demographics of people in the public service. That is going to be a moving figure always. Whatever day you calculate it will be the day that you will have to peg it at that amount, and a year later, obviously, you will get some changes. It is fairly safe to say that it is roughly $100 million a year and about $1.1 billion in total. That would be the ballpark figure.

MS THISTLE: And you are actually including that figure in the accrued deficit?

MR. SULLIVAN: It is obligatory to include that. It must be included. When a debt is realized, you cannot keep a shifting debt over a year-end into another fiscal year. That is not permitted to do. That is contrary to the guidelines established under PSAB and under the CICA. That is something we cannot do.

Had the previous government not initiated and done no work on that and had we looked at initiating it later, then once you identify a liability as being there, you have an obligation to record that liability. Now I am not a CA, but the gentleman to my right is. He might answer more specific questions on that, but once a recognition of that liability was there we had an obligation. Had an MC back on May 3 of last year not initiated this process or nothing started on it, that would not have started to be recorded until the fiscal year we are now in. There was an obligation to do that. We could not intentionally move costs over a year-end because the Auditor General has continuously rapped the fingers of government for doing situations with moving figures across at year-end. We made a commitment that we are going to record every single thing as it is, when it is and follow a full accrual based accounting as was introduced in the Budget, not only this year but they introduced an accrual basis of accounting in last year's Budget, too.

MS THISTLE: Were you about to say something, Terry?

MR. PADDON: I will just make one comment.

This is really a question of timing. The Public Sector Accounting Board had determined that this had to be - the accounting change was going to happen anyway, starting in about 2005. So it was really just a question of when it was done. The process was started back at probably this time last year. So, the minister is right. Once it was identified as being a liability it is incumbent upon the Province to record it in the Public Accounts, and to account for it in the budgetary process.

MS THISTLE: Going back to -

CHAIR: Excuse me, Ms Thistle, your time has expired for now. We will get back to you shortly.

Mr. Andersen, do you have any questions?

MR. ANDERSEN: I asked my questions this morning. (Inaudible).

CHAIR: Pardon? I cannot hear you.

MR. ANDERSEN: Do you need time to ask a few questions?

CHAIR: No. I asked them if they wanted to ask a few, but no, I will move on.

MR. ANDERSEN: Okay. Under 2.1.03, Grants and Subsidies going from $400,000 to $4.4 million.

MR. SULLIVAN: Which one is that?

MR. ANDERSEN: That is on page 33.

MR. SULLIVAN: Okay, yes. Are you finished?

MR. ANDERSEN: Yes.

MR. SULLIVAN: Traditionally, in that category there is financial assistance of $400,000 that has traditionally gone to C.A. Pippy Park and this year there is an extra $4 million in it toward any opportunities to promote business opportunities within the Province.

I announced in the Budget, actually, that - one area that we have been looking at as providing some opportunity, possibly. There are no final decisions made on any of that $4 million but it is safe to say that there is an area of consideration with the broadband service. There is $16 million on the table now for different areas. The department, I know, is looking at identifying to get out to rural Newfoundland and Labrador because it is more difficult to compete in a business sector if you do not have access to the same quality of service that you get in urban areas. We are looking at a possibility $1.2 million out of that to be able to, I guess, level the playing field for rural Newfoundland and Labrador to have access to these services. That $1.2 million would probably leverage $15 million more in federal commitments.

For example, one project has almost the value of - Smart Labrador is one of the projects, I think, that was ongoing to try to - up and running. There are others. I know one in particular is close to four million of which - the government commitment they were looking for was three-hundred and some thousand on the $4 million. Overall, we are looking at probably seven cent dollars to help get broadband into rural Newfoundland and Labrador. That has been important. So, that is one of the areas that is sort of being looked at to assist there, and that decision is not even made. The remainder would be to help promote and particularly, our focus is to try to level the playing field in rural Newfoundland and Labrador to allow businesses to be able to set up there. That would be one of the focuses of our government, generally, in the business sector.

MR. ANDERSEN: I am going to jump ahead to page 35, subhead 2.2.03. Again, we see an increase in Salaries.

CHAIR: 2.2.03.

MR. ANDERSEN: 2.2.03, page 35.

MR. SULLIVAN: Yes, Project Analysis?

MR. ANDERSEN: Yes.

MR. SULLIVAN: Okay.

CHAIR: You had better repeat the question, Mr. Andersen, maybe.

MR. ANDERSEN: I have asked a question on Salaries, again, why the increase?

MR. SULLIVAN: Well, because there were positions last year - the reason it was down from Budgeted is because there were positions seconded to other departments which were left unfilled, and that occurred last year. In that department there are nine permanent positions. That allowance also is an allowance if there are any temporary or assistance or overtime. The reason it was down over Budgeted last year is because there were positions seconded elsewhere. We are back to historic numbers there but our Budget overall is down, as you can see, by about $44,000. Would that be, I would assume, probably a position less?

MR. PADDON: No. What we have done is just reduced the amount that is allocated for temporary assistance and overtime in that division.

MR. SULLIVAN: So there are still nine positions and there is very little allocation, basically, for temporary assistance and overtime?

MR. PADDON: Yes.

MR. SULLIVAN: Okay.

MR. ANDERSEN: Go a little further down the line there to 2.2.03.05, Professional Services, an increase of $10,000 over last year.

MR. SULLIVAN: That is consultancy for research. Sometimes in economic analysis you might want some outside work done on that. Last year they budgeted $20,000 for that but they did not end up in that specific year as having any outside expertise to call on in that area. This year we decided to reduce that by $10,000, by half, in case we need some economic analysis outside. The department does provide a certain amount but there are times when you need to go to an outside source. So at least there is an allocation to be able to do that.

MR. ANDERSEN: That would be, I guess, contracting out?

MR. SULLIVAN: Yes. I think, traditionally, it has probably been - I know last year there was $20,000. So that may have been - if you look back to previous Estimates you might have seen - it is probably, I would assume, in that range. I cannot speak for - I know that previous budgets would show that figure, if you wanted to research back further.

MR. PADDON: It has been $20,000 for -

MR. SULLIVAN: The deputy informs me that is has been $20,000 for some time, budgeted, and we decided to cut it by half this year, more or less, as a restraint measure.

MR. ANDERSEN: I am not sure if anyone touched on 2.1.01 on page 32. Under Salaries, again, an increase.

MR. SULLIVAN: There was budgeted last year $1.586 million and $1,567,000. The amount you can see this year is $35,000 more on a $1.6 million salary. That is basically the annualization of salaries. This is going to be the first fiscal year that we are going to get the full impact of the 15 per cent three-year wage program, the full annualization we will meet this year. That is the primary reason there.

MR. ANDERSEN: I guess the other question I would like to raise on this subheading would be 2.1.01.12, Information Technology. I guess something that is very near and dear to all of us, as to why there is such a large decrease of $156,000?

MR. SULLIVAN: Why is it down significantly this year?

MR. ANDERSEN: Yes.

MR. SULLIVAN: The Windows based pensioners payroll system was completed in 2003-2004 and that is not required now, so certain times in IT you may have upgrading of a system in one certain year as opposed to another. That was done in 2003-2004, so we have reduced our allocation there because of that. We would have $156,000 less than was actually budgeted and spent last year.

MR. ANDERSEN: Okay.

Minister, I guess a question - and, again, I know it will be raised with Works, Services and Transportation - in your Budget, on Budget day, you outlined that there would be an increase of 10 per cent in ferry rates this year. Obviously, a lot of people are calling their members, and certainly they are calling me as the critic for that department. When you see an increase for someone from Fogo Island to Farewell, that has gone from $5.50 to $6.50, that is an increase of about 18 per cent. Again, the question arises on many occasions. Really, the Budget that you presented, so many changes are occurring over and over. An example again is a senior who travels on that same ferry, that they have gone from $3.00 to $3.50, which is an increase of just below 17 per cent.

The question I ask again, with all of this, every day with a different scenario that is presented of what is outlined in the Budget and what is transpiring again, the question people are asking me - and I am sure asking all of the members on our side - is: When is the Minister of Finance going to do some amendments and adjustments to his Budget? Obviously, what we have heard in the Budget - there are examples I gave you earlier this morning, and this one again now. Really, when are you going to make some adjustments to your Budget?

MR. SULLIVAN: We are going to make no adjustments to it, because when I said if rates are going to go up 10 per cent, for example, Transportation and Works would look at taking a rate and they would look at, if there are anomalies within certain ferries on rates over others, and whatever the case may be, that is a general statement of what the rate increase is going to be and the amount of revenue that is going to be obtained. How you cut that generality - if we said there is going to be a certain increase or a decrease of a certain per cent, that might be worked out separately within a department to get those revenues.

For instance, I will use an example now - it is not necessarily a factual one - if there is one ferry service that is probably paying higher than the norm than they should, based on current rates, than another, and there is an increase that goes in, there might be a reflection to do a balancing of what is more appropriate taking everything into consideration. That is an operational decision within the department that they would look at. That is a question that would be more appropriately asked to Transportation and Works.

Our general statement of an increase was a budgetary Cabinet decision, the same as we indicated that we are going to give - whether it is $2 million less to the College of the North Atlantic or $1 million less somewhere else. We announce them and they, within their structures, within their department, deal with their budget.

The departments get a budget based on Cabinet approval and they have the opportunity within their budgets - it happens on an annual basis - if there are over expenditures in some areas and they need adjustments, and down in other areas, obviously they put forth each of the items in a budget but they have that discretion to do transfers under subheads later, the same as they would have an opportunity to look at which rate structures would apply to which areas. Cabinet would not sit down on every ferry service and look at what we are going to do with the rate structure on every single ferry service here, what we are going to deal with. We would deal with the bigger picture and then departments would have to run their affairs.

MR. ANDERSEN: I guess, from looking at the calls that we get, obviously, Minister, it is the ferries that service rural, the most rural parts of Newfoundland and Labrador, that are getting these high increases even though you, in your Budget, outlined - and it is right in your own Budget - that ferry rates across the Province will increase by 10 per cent. Yet, it is the ones in rural Newfoundland, in the most rural parts of this Province, that are seeing an 18 per cent and 19 per cent increase (inaudible) to seniors.

MR. SULLIVAN: I am not aware of any ferries in urban areas of the Province. I think they are pretty well all in rural areas, I would assume. That is why a ferry service - generally, I think, all the ferry services are rural, to my knowledge.

MR. ANDERSEN: People are -

CHAIR: Mr. Andersen, do you want to clue up on that point, because your time has expired.

MR. ANDERSEN: Okay.

Again, people are asking the question as to the increase of a ferry run from Fogo to Farewell and these places, and they are comparing it to, I guess, what they call the urban parts; they run from Bell Island to Portugal Cove. That it is the comparison that they are using.

MR. SULLIVAN: Well, I think Bell Island, to me, is a rural area. To me, I regard Bell Island as rural, and the services for Bell Island there, and any operation (inaudible) within the Department of Transportation and Works. I do not deal with the breakdowns and rates and various things within the Department of Transportation and Works. That is an area that should be directed to the minister in that department's operation. We deal with the general budgetary procedures that Cabinet approves and the department deals with, dealing with the budgets that have been given to them. I think that might be more appropriately asked, as to why one specific ferry in one area versus another area, that is a Transportation and Works question that should be addressed under that department.

CHAIR: Thank you, Mr. Minister.

Mr. Oram? Ms Thistle?

MS THISTLE: Thank you, Mr. Chair.

I would like to ask the minister: Would you confirm that the amount that is in there, an $8.6 million increase in the provincial drug program, is really not an increase; it is an overrun from last year that you are covering off?

MR. SULLIVAN: Where is that?

MS THISTLE: It was indicated in your Budget Speech.

MR. SULLIVAN: That is a Department of Health one. The amount for the increase in the drug program is a combination of two things. One was adding a new drug, Gleevec, a cancer drug, and the balance is to be able to deal with the people who are currently under the program now, an increase in costs of the program.

MS THISTLE: Yes, I understand $800,000 has been designated for the new cancer -

MR. SULLIVAN: For Gleevec.

MS THISTLE: - chemotherapy drug.

MR. SULLIVAN: The balance is cost in delivering the programs that are in place, to my knowledge.

MS THISTLE: But you stated there was an $8.6 million increase in the provincial drug program. That is not for new drugs. It is an overrun of last year's drugs, isn't it?

MR. SULLIVAN: No, it is not an overrun of last year's. Last year's drug costs would have to be into the basis for last year. We cannot carry-over costs from one year into another. That would be contrary to the Financial Administration Act.

MS THISTLE: But it is not new drugs?

MR. SULLIVAN: Their anticipated increase in the cost of delivering the current drug program - we did specify in the program that the new drug, which is the cancer drug Gleevec, was an additional cost over and above the cost of delivering the current program. It is a new one that is added to the list.

MS THISTLE: You are saying that $8.6 million will cover the normal cost of increase of the current drug program?

MR. SULLIVAN: That is correct, either the increased cost or new people adding onto it, whatever the reason may be. I am sure the Department of Health will give those numbers. I indicated that there is an increased cost in the program of that amount, which is attributed to two sources. One is an increased cost of delivering the services to the people already receiving it, either through increased numbers or increased costs, whatever the case may be, and an addition of $800,000 to cover the cancer drug, Gleevec.

MS THISTLE: The way it is worded in the Budget gives the impression that there is an extra new amount of $8.6 million to look after new drugs, but that is really not the case?

MR. SULLIVAN: It is not the impression I got and it was never the impression I have given to anyone. I have always been quite clear, that there is one new drug added to the formulary, Gleevec, and the rest of it is the increased cost of delivering the program. If you want further detail, I am sure the Department of Health will give further detail. I would not be intimately familiar with every single drug on the formulary, what they are, what the usage is, and what the costs are. Those details, I think, could come from them.

MS THISTLE: The seniors, I guess, reading and hearing about that, were hopeful that the $8.6 million appeared to be able to look after a new drug, but that is not the case.

Moving away from this -

MR. SULLIVAN: Just before you move, I think that is very clear. We will provide an $8.6 million increase in the provincial drug programs, including an allocation of $800,000 to cover the new chemotherapy drug, Gleevec, to help fight cancer. We have indicated we are going to put $8.6 million extra money into the program, including a new drug, Gleevec. I think that is pretty straightforward to me. There was no intent to give anyone the impression there were others. If we added other drugs to the program, we would have said including Gleevec and including others. Certainly, I didn't take it that way, and if anyone did, I will clarify it. In fact, I addressed that earlier with a question back, I think, last month.

MS THISTLE: There are calls that we are getting.

I wanted to say that the only capital project that is not cancelled this year is a school in your own district. How do you justify that, when you know that the cancer clinic in Grand Falls-Windsor is cancelled, Alzheimer drugs are not going to be looked after, and the Grand Bank long term care facility is gone, yet the project is going ahead in your district for a new school?

MR. SULLIVAN: Approval has not been given to go ahead, number one. Secondly, it was announced three years ago. That is a two-year delay; this is the third year. I guess one of the reasons is that the former government - we met with the ministers. The school was tested and declared unsafe to be in, and the students were taken out of school last year. They were home for Easter and they could not go back until they had to expend money to put the children back in, so they had to take a long Easter vacation over a year ago because it was unsafe. They had testing done and realized there were unsafe levels. The school was an old wooden structure that needed to be removed. A commitment was given by the former government of $4.5 million to go into Mobile and this school. We decided that we are not going to proceed with the Mobile one, that there were two there. One was essential - for health purposes, we had to move - and the Mobile one was delayed. Four point five million was announced over two years ago, actually. This is the third Budget now in which we dealt with the same school. The first two, they did not proceed. This year we decided $3 million would be allotted to the Mobile system. That is put on the same category as the other schools that were delayed. The St. Patrick's one in Bay Bulls, they had to go through considerable cost to make it useable for this year, and the parents agreed, under monitoring, to leave windows open, and under continuous monitoring of quality they would be able to keep them in there.

There is a history on record in that school by the community health nurse where people go to that school and, for all the years they are there, they have severe medical problems documented, and their parents are complaining that their children should not have to go to an unsafe school. When they leave that school and go on to another school, it passes. There is documented medical information and air quality tests. It was shut down, they had to do a complete revamping, and they feel that it is improper to proceed with that.

On top of that, a decision has not been finalized; there have been no tenders called. That is an issue, I guess, that is ongoing. That is the basis for it, and that was acknowledged, I think, by - the former government was in place at the time when those air quality tests were done.

MS THISTLE: I guess it is how you look at it; because, when you consider that the cancer clinic in Grand Falls-Windsor has been ongoing for three years - in fact, last year the Newfoundland and Labrador Cancer Foundation provided $390,000 to that project - the financing was in place and approved by Cabinet, and they have a letter to that effect. Yet, for all of that, you do not see the cancer clinic in Grand Falls, which has been ongoing for three years, as any more of a priority than the school in your district, and you are willing, in addition to that, to dismantle the steel and plow into the ground $3 million in Grand Bank?

MR. SULLIVAN: I think you should be aware that budgetary decisions that are made are Cabinet decisions. They are looked at (inaudible). There are also delays with schools in other districts. There is Herdman Collegiate, O'Leary's Brook is delayed also here in the City of St. John's, and Mobile is delayed. There were three schools delayed. All of these schools are in districts of the current government party.

The cancer clinic, with reorganization occurring and restructuring in the health care system, and overall in the education system - education restructuring is a board decision. School operations are independent entities out there. With consolidation occurring, who knows in the future? There is consolidation occurring within the health care sector, there are going to be headquarter locations, and they are going to be looking at services under that. Who knows? There are a variety of things that I am sure will get looked at in next year's budget and they will get due consideration.

Everybody realizes that cancer and the opportunity to have clinics - we would like to have a clinic in Central Newfoundland, no doubt about it. Who knows? It may be in the process next year. With consolidation, numerous things that we delayed this year, when we look at the whole picture and what things are happening, that could be one of the decisions. I won't make any predictions on next year, but we had to make some tough decisions. We were $1 billion in the hole, we had massive debt, massive payments on debt, and we had to act fiscally responsible. We have axed a lot. We closed twenty offices in HRLE. Eleven of the twenty were in PC districts. When they have over three-quarters of the members sitting in the House, we wanted to piecemeal every district. You will see that decisions were made irrespective of political stripe. They were made based on the nature of it and the decision that had to be made.

Some of the decisions had to be made. None of them were very easy, but we have to exercise responsibility. If not, there won't be money there in the future for anything, cancer clinics or anything else. We have to get it under control, a burgeoning deficit. We had to act and make tough decisions. Nobody takes pleasure in it, but they had to be made and they were not made with a political bias. Look at all the decisions that were made and you can see there is a balance over every single district out there.

Two motor registration offices in my district, Trepassey and Ferryland, closed. You have to drive from Trepassey now two and a half hours to get your driver's license. The only HRLE office in the district - there were three HRLE offices - is gone. One person had a caseload of up to 300. That is gone, one of the highest caseloads in the Province. There were a lot of tough decisions that had to be made all over. I can tell you, they were not pleasant and I didn't take any pleasure in making them. We made a collective decision in Cabinet based on the best interests and our fiscal situation. We would like it to be a lot different than the fiscal situation we had, and then we would not have had to make so many decisions that are unacceptable.

MS THISTLE: Do you support the article that was in the Grand Falls Advertiser about a month ago by a colleague of yours from Windsor-Springdale, that says that the PCs commit to the cancer clinic in Grand Falls-Windsor, and they would go out and consult with stakeholders and make sure that the decision that is made is to the agreement of all of the stakeholders? Do you agree with that?

MR. SULLIVAN: In Finance Estimates here, as to what was in the Grand Falls Advertiser, no more than is in the, I guess, Hawaii newspaper or anywhere else. I do not read all of these. I have not read it. I am prepared to answer any questions, but I will not answer a speculative thing that I never read, number one; and, number two, the decisions coming forth from the departments come to the Cabinet table from the Department of Health or Education; they come to the Cabinet table, we see their submissions and we deal with decisions then.

No, I am not going to speculate on somebody reading an article in a paper somewhere. That does not pertain to Finance Estimates there. Besides, if it did, I would not speculate on something I did not read.

MS THISTLE: It is certainly a financial question, but whether or not you support a decision made by one of your colleagues is another matter.

I will move on to a different topic now.

CHAIR: Before you move on, Ms Thistle, your time is up again. I am just going to do another run. Any questions here?

Mr. Andersen.

MR. ANDERSEN: Obviously, we are not going to finish before 12 o'clock anyway, but where my colleague here is the critic and we only have fifteen minutes left, any time that I have left here this morning - where Mr. Langdon is gone and he never got a chance to ask his questions - obviously, I will certainly give my colleague more time, where she is the critic.

CHAIR: Thank you, Mr. Andersen.

Ms Thistle.

MS THISTLE: Thank you, Mr. Andersen.

I would like to ask what has been allotted this year for student work terms - that is one category - but co-op work terms and graduate employment programs? In the past there was $3 million allotted for graduate, new employees, new students wanting to get work in a business where they did not have experience, and also co-operative work terms. Is $3 million still designated for that particular heading?

MR. SULLIVAN: That is not in my department.

MS THISTLE: You look after Finance.

MR. SULLIVAN: No, I do not look after work term departments. HRLE looks after programs and (inaudible). This is on Finance Estimates, or any questions on any headings and so on that pertain here. I am not going to answer a question on the HRLE department; the minister is quite capable for answering those questions on that. I am not here to answer on every department. I am only delighted to answer questions on my department, or give direction there. I have been asked specific questions on Transportation and Works operations, on HRLE, on offices, on numerous departments. I do not intend to answer for other ministers. They are quite capable; they have staff and people to do that. If you want to ask that, whatever Committee is dealing with HRLE is the place to ask that.

MS THISTLE: Well, usually the Finance Minister speaks for all of government when it comes to financial issues. I though certainly you would know that question, being the Finance Minister.

MR. SULLIVAN: All departments get their budget, I guess, through me and approved through Cabinet and they deal with their budgets. I have a budget to run the Finance Department, and I have a budget under Treasury Board. I will speak for these and I will let ministers speak for theirs. Otherwise, we would only need one minister.

MS THISTLE: It was the impression given to the general public, I guess, that any savings that would be occurring from school board consolidation would go back to the general deficit.

Can you tell me at this point, or do you think that is another minister's responsibility, whether or not there will be any savings from school board consolidation?

MR. SULLIVAN: Yes, they will be savings from school board consolidation. We would hope that there would be in the vicinity of $6 million savings from school board consolidation.

MS THISTLE: It appears that there will not be $6 million savings from school board consolidation because you now have satellite offices where you did not expect to have them originally. Have you adjusted your figures based on that?

MR. SULLIVAN: I do not know where information would come from, that we did not expect to have satellite offices. I do not think anyone expected that we would have nine boards reduced down to three and that we would only have one office, and that someone would work in that office, a program person who is in the field, and would have to drive let's say wherever it is, whether it is St. John's or Clarenville to the Burin Peninsula, or drive from Burgeo into Corner Brooks or whatever. That was never the intent. If that is information, it is not information of which I am aware. For operational purposes you would need to maintain areas out there under the maintenance, under program areas and so on - I am not aware of it. If you are aware of something, it is certainly something that I am not aware of, that there was an intent to only have everything all assembled in one area. It is quite practical for some departments to operate offices in numerous areas. Transportation and Works have depots in numerous areas of the Province because it is more practical. Finance may decide that there might only be one or two locations needed. Other departments might be able to operate from twenty locations. It would depend on the department. It would depend on the service you are providing and how close the services should be to the people. There are decisions there. I am not aware if that was an original decision. In fact, the only one I am aware of, is a decision was made to have those regional offices there because they are important in the continuity and delivery of services and programs in the area.

MS THISTLE: During Question Period, since the House opened, I asked the question of whether or not you are in a position to tell us what the cost was during the recent public sector strike, and that would have been for all the employees' overtime, meals, transportation, accommodations and whatever was necessary. Has that information been compiled yet?

MR. SULLIVAN: Well, I do not have a figure on it because a lot of the costs are ongoing costs. Some people may work and decide to take time off and so on, they would not become a cost. So, the exact number impacts - I guess the exact impacts - well on the cost side, I suppose, can be tabulated, but on the overall impact, it all might never be tabulated because who can tell us the loss of income tax with people off, the spinoff effects on revenues, the impact it had on sales taxes, and all of these areas. So, one side is the cost side of the ledger, the other side is the revenue side. I do not believe anybody gains in a strike. I know the last time there was a strike here there were no savings to government. There is an expense side and there is a loss revenue side. I do not think there are any winners in a labour dispute.

MS THISTLE: During the Budget Speech you indicated the numbers of layoffs that might occur. When you made up your Budget, did you include the salaries of the employees who were about to be laid off?

MR. SULLIVAN: When we do a budget and estimate layoffs, we factor all these things in. That is one of the reasons why we do not need an amended budget, because we had a budget that was all encompassing. We looked at all their decisions, the impacts of their decisions, and we struck a budget that would allow for that.

I know I have been asked in the House by the Leader of the Opposition - I think he made a reference, we had been asked here and elsewhere. We do not intend to amend a budget unless there is a reason or there is something unusual that comes up that would be a requirement to do it. If we do so, our preference to do it would be in a supplementary supply bill if it comes up after a budget is passed, and the earliest time that would be done, I guess, is in the fall. As you are aware, we did a supplementary supply bill on March 29 of this year on last year's, on your budget, because we did not want to do a special warrant. So, where possible, if changes have to occur, we will want to be up front, have it debated here in the House and we will avoid any special warrants on any cases possible. There is nothing that we see that would alter a reason to amend our current Budget. None! All these things you have been asking have been factored in and they have been a part of the planning process. So, let's hope we do not come to the point where there has to be any changes. There are certainly none that I foresee now.

MS THISTLE: So, what you are confirming, I guess, at this point, is that when your Budget was delivered on March 30, everyone who were employed on that particular day, their salary was included in the Budget. Is that correct?

MR. SULLIVAN: No. We made allowances for that. The Budget on March 30 was for the fiscal year, April 1, 2004 to March 31, 2005. We made allowances for any people who were going to be laid off in the process. We were aware - in fact, prior to that Budget, three days prior, I called in the union leaders and sat with them and told them how many would be laid off overall. We anticipated, roughly, four hundred of their people within bargaining units. Now, that is probably down by 100 since that but we told them they could be up to four hundred. We made allowances for these people to be factored into our Budget figures, yes. All this was allowed.

Those announcements that came on layoffs recently would have occurred earlier. The Budget came down on the thirtieth. The deadline for the strike was on March 31. We would normally and traditionally, what would happen you would roll out all this the next day. We were into negotiations. We went right into that night and it just consumed our time. We wanted to get a settlement on the issue but the announcement did not occur. Then there was a strike, of course, and when they came back after the strike we made the announcement. This would have been announced the day after the Budget, otherwise these notices would have been issued, but they were not. So all of this is incorporated into the Budget.

MS THISTLE: Have you included salaries for call-ins for seasonal work as in previous years?

MR. SULLIVAN: The whole salary budget is allotted to include all operations of the department. They are all included. What departments determine their needs are, we cannot - departments submitted budgets to carry out various needs, whether they are temps or overtime or seasonals or permanents, and any of their budget allocations are put forward and departments decide what allocations and things they need. They submit them, and they were dealt with and approved. Anything that we need - I certainly hope we are not going to come back looking for more money to deal with salaries or other operations. I can tell you, it is not foreseen at this time and I do not anticipate it. We brought down a budget that we considered to be accurate, and I certainly hope we can live within that, and that circumstances will not change to make it worse.

MS THISTLE: Have you adjusted your deficit figures based on the savings to government by the public sector being on strike for twenty-eight days?

MR. SULLIVAN: No. If you could tell us what the savings are, if you could tell us what our lost revenues and everything will be, then there is a greater power than me around if they can tell us that. The spinoffs on the economy, and all the factors on the revenue side, what our bottom line would be, I do not think anybody would be able to give you an accurate figure on that.

We know that every dollar we do not pay out in salary - there is a certain amount of income tax we would normally get back: 10.57 per cent if you are less than $29,580 of taxable income; and, if you are in a higher bracket, we would be another 16.16 per cent, so we are not getting that revenue. We are not getting sales tax revenue, if people are not spending because of it. People are depending on employees to employ people in stores, and they have income and other costs and sales, all these factors. You could look at the impacts of that. It would be very difficult to pinpoint what the bottom line would be overall. A lot of that would have to come through econometric models, and basically what you would impact, so that is very difficult. I do not think anybody could give you a true figure.

We certainly hope that we are going to be able to stay on it, on the bottom line where we projected, $362 million cash and $840 million on accrual basis. We hope we can stay on that.

MS THISTLE: I would say, based on what we have already witnessed in the past two or three months, you should have a much smaller deficit at the end of this budget year than you anticipated.

MR. SULLIVAN: It has only been six weeks since the Budget, or so, so I cannot speak for the two or three months before. It would have been reflected in the previous fiscal year.

MS THISTLE: I also want to ask you - we are getting close to the deadline - when you mentioned the accrued employee benefits for those who may retire in the future, were you taking into account in that $93 million estimate the number of layoffs and the benefits that you are going to be - and early retirement people, people who are retiring probably earlier then they normally would - did you take that into account in coming up with that $93 million figure?

MR. SULLIVAN: The $93 million is based on about, I suppose, forty-some thousand people entirely within the whole realm of government. Certainly, I guess, outside, some of the core agencies, there is roughly 35,000 or 36,000. That is based on everybody. That is based on you, me and everybody else, so the 217 laid off within government is a fraction of that thirty-some thousand people. Accruals made on that would have negligible impact on the $93 million. In order words, we are factoring everybody, everybody that you see here, everybody in the Confederation Building, nurses, people in hospitals, teachers, and everybody in government. If you look at the total cost, we are factoring what we might pay out in the future, when they retire, for health and insurance benefits down the road. The number of people there would be negligible; it would a fraction of 1 per cent. You would not see any change on the $93 million figure. That would not come close to a million dollar figure. The cost would be negligible, to impact the post-retirement liabilities on these number of people who might leave through attrition this year.

MS THISTLE: I expect that number is probably as overstated as the Budget itself; however, I want to -

MR. SULLIVAN: Well, your colleague praised up my staff here for giving the numbers they provided to PWC and said he has all the confidence that they are.... I have every confidence in them, that these numbers provided by people that we go through - and an independent actuary provides these. I think it is William Mercer, I do believe, William Mercer Limited, who was employed for a number of years by the former government. I have the utmost confidence that they are experts in the field, and the figure they provide us, I have no reason to question that.

MS THISTLE: I do not think that is what we are saying. There was no slight to the officials. In fact, we would be complimenting our officials. What we would be questioning is the waste of money by this government in going out to PWC to do a report that reflected exactly what the officials were giving them. When you look at $130,000 spent unnecessarily, this is what we are talking about.

MR. SULLIVAN: It wasn't one hundred and thirty-some. One hundred and fifteen, I think, roughly, was the number.

MS THISTLE: I think that is not finalized yet.

MR. SULLIVAN: Yes, it is finalized. They are paid and it is finalized. It is reflected in last year's financial statement. The number that was used, I think, that the Leader of the Opposition used, was HST and it is contrary to the Financial Administration Act to include HST. It has never been done. The former governments, the current governments cannot include it. It is contrary to the Financial Administration Act and that is not a part of a cost of government at all. In fact, we do not include that in the cost because it is not a cost to us. You cannot include costs that are not costs to you, otherwise you contravene the Financial Administration Act. So, that is not a number that is included.

CHAIR: Thank you, Mr. Minister.

MS THISTLE: I just want to clue up by saying, it is clear that there are plenty of questions in Finance, and I am sure we will get our opportunity in the House in the days to come.

I want to say a special thank you to the officials because I know each one of them. We really value your expert work in guiding whatever government happens to be in power, but there is no question as to your work. It never was and never is. I mean any other report that has been done by Hugh Mackenzie or by PWC, they confirmed exactly what you have given us.

I want to say thank you to the officials and thank you to the minister. There will be more questions in the days ahead.

Thank you.

CHAIR: Thank you, Ms Thistle.

Mr. Andersen, do you concur?

MR. ANDERSEN: I am going to forego the rest of the questions I have. Again, I thank the minister and his staff for being here. We will have the opportunity to ask questions in the House, as we normally would.

CHAIR: Thank you, Mr. Andersen.

The Clerk is going to call the heads now.

CLERK: 1.1.01 through 2.3.01 inclusive.

CHAIR: 1.1.01 through 2.3.01 inclusive.

SOME HON. MEMBERS: Carried.

On motion, subheads 1.1.01 through 2.3.01 carried.

CHAIR: Shall the total carry?

SOME HON. MEMBERS: Carried.

On motion, totals carried.

CHAIR: Shall I report the heads of the Department of Finance carried without amendment?

SOME HON. MEMBERS: Carried.

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

CHAIR: Before I call on the motion to adjourn, I, too, would like to thank the minister and his staff for their answers this morning and their effort to answer all the questions that have been put forward. I thank the members of the Committee for their presence here this morning.

I would just like to say our next meeting of the Government Services Committee is scheduled for 9:00 a.m. on Wednesday with the Department of Transportation and Works here in the House - I believe, is it? I just want to make sure we are clear now. There are several going on at the one time. Wednesday morning?

CLERK: In the Committee Room for Transportation.

CHAIR: Okay. The next meeting with Transportation and Works on Wednesday morning will be in the Committee Room on the fifth floor, Room 5083.

With that, I ask for a motion to adjourn.

MR. O'BRIEN: Moved.

CHAIR: So moved. Seconder?

MR. ANDERSEN: Seconded.

CHAIR: Moved by Mr. O'Brien, seconded by Mr. Andersen.

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: Contra-minded?

Motion carried.

Thank you very much.

On motion, the Committee adjourned