December 1, 1992               HOUSE OF ASSEMBLY PROCEEDINGS         Vol. XLI  No. 75

The House met at 2:00 p.m.

MR. SPEAKER (Lush): Order, please!

Statements by Ministers

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

DR. KITCHEN: Thank you, Mr. Speaker.

Today, December 1, is World AIDS Day, designated by the World Health Organization as a day to increase public awareness about HIV/AIDS and to strengthen both our determination to control this disease and our commitment to address the needs of those individuals unfortunate enough to have contracted it.

In just over ten years, HIV has infected some 10 million people worldwide, of whom more than half a million have developed AIDS. In Canada, almost 7,000 people have developed AIDS. In Newfoundland, more than 119 people have been infected with HIV, twenty-nine have developed AIDS, and eighteen have died. The virus spreads mainly through unprotected sex, but can be transmitted also by sharing needles for drug injection, from infected mothers to their unborn children, and through infected blood.

Early this fall I initiated a process for the development of a comprehensive HIV/AIDS policy for this Province. Three working groups have been established to address: Prevention and Education, Testing and Treatment, and Care and Home Support. Members of the working groups come from various government departments and from community-based organizations and groups. There will be consultation with experts in prevention, control, care and treatment as well as with individuals living with HIV/AIDS or who are affected by the disease. I look forward to receiving from the working groups, recommendations to guide government in the development of a comprehensive HIV/AIDS strategy for the Province.

Mr. Speaker, we must recognize that AIDS is not only a very serious problem, and an increasingly serious one, but that it is above all a community problem. It is our problem - one that will affect the lives of many Newfoundlanders and Labradorians. it is fitting that this day be set aside each year to call attention to HIV/AIDS.

Thank you.

MR. SPEAKER: The hon. the Member for Harbour Main.

MR. DOYLE: Thank you, Mr. Speaker.

I want to thank the minister, as well, for a copy of his statement. Hopefully, through his statement, and through the recognition of December 1 as World AIDS Day, we can be all made a little bit more aware of this dreaded disease and what it can do.

I notice, from the information that was given us this week, that the theme this year for World AIDS Day is: A Community Commitment. That is very appropriate, indeed, as well, because I think we all have to strengthen our commitment to stress the need for community action.

At one time, this disease was thought to be confined to a very small sector of our society but, indeed, we find today, that disease has become everybody's business - nine, ten, eleven million people infected in a ten-year period. Again, not only is it confined to men, we see that three million to four million women are infected, as well. I guess, what is most disturbing about it is that in spite of all the educational campaigns we have ongoing and the information on the go about this disease, we figure that by the year 2000 we are going to have 40 million people infected if something is not done to stop the spread of this disease. From the information we were given this week, I noticed, Mr. Speaker, that the Canadian AIDS Society is very active. Going beyond their local scope, they are now into the African countries and in Jamaica and Haiti, trying to stop the spread of the disease at that level.

What is really disturbing is that even though people are more aware today than they were five years ago and ten years ago, of how the disease is spread and the implications and the consequences of it, we find that the disease is on the increase even though we have more educational campaigns and that is really the frightening thing about AIDS. What is going to happen? Who knows? The prediction is that by the year 2000, only eight years from now, we are going to have 40 million cases, so Mr. Speaker, I think all of us at the community level, at the government level, have to make possibly a stronger commitment in making more monies available to the various associations who work on the disease and in research, in particular.

MR. SPEAKER: The hon. the Member for St. John's East, on a point of order.

MR. HARRIS: I wish to ask leave to speak to the Ministerial Statement.

MR. SPEAKER: Does the hon. member have leave of the House?


MR. SPEAKER: Agreed.

MR. HARRIS: Thank you, Mr. Speaker.

I would like to join in the acknowledgement of December 1 as the -

MR. MURPHY: A point of order, Mr. Speaker.

MR. SPEAKER: The hon. the Member for St. John's South, on a point of order.

MR. MURPHY: What is the hon. member speaking to?

MR. SPEAKER: He is speaking to a Ministerial Statement.

MR. MURPHY: He doesn't have leave, as far as I am concerned.

MR. SPEAKER: The member doesn't have leave? There is no leave.

Oral Questions

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

MR. MATTHEWS: Thank you very much, Mr. Speaker.

I have a question for the Government House Leader, in anticipation of the government's economic statement or the minibudget. I am wondering: Has the Government House Leader given any consideration to the process to be used to respond to the minibudget or economic statement? I guess I am asking this question because I have concern, and I think it is only fair, that all members of the Legislature have adequate time to respond to the implications of the minibudget. So, I am wondering: Have government given any consideration to that, and what do we expect?

MR. SPEAKER: The hon. the Government House Leader and Minister of Justice.

MR. ROBERTS: Thank you, Mr. Speaker.

The answer to the question is yes, but let me expand. We have given consideration to it. The procedure we shall follow is that we have a Cabinet meeting on Thursday, which is a normal day that at least this administration holds Cabinet. I assume we will take some decisions then both on timing and on procedures. There are a number of procedures, as my hon. friend is no doubt aware; I will undertake to consult with him as soon as we have come to a decision as a Cabinet, to seek his concurrence where that is necessary and to tell him what we are proposing to do where it is simply a matter for us. But I expect, by Thursday, we ought to be in a position to tell him where we propose to go and then he can decide where he and his colleagues propose to go from there.

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

MR. MATTHEWS: Thank you. I thank the Government House Leader for that and I look forward to hearing from him after Thursday.

I have a question for the Minister of Fisheries, Mr. Speaker.

Over the last ten days or so, the Minister of Fisheries has had meetings with the federal Minister of Fisheries and Oceans and other Atlantic Provinces fisheries ministers, and of course it looks like the news is anything but good again pertaining to fish quotas for 1993. I am wondering if the minister has had a chance to review what might be coming down in '93 and what the implications are once again for the Newfoundland fishing industry, particularly the fishing industry on the South and Southwest Coasts of the Province?

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

MR. CARTER: Mr. Speaker, yes, we had meetings in Ottawa two weeks ago and again in New Brunswick last Friday afternoon, and the fact of the matter is, these Gulf cod stocks, groundfish stocks will be reduced in 1993, as will the total allowable catch in the area known as 3Ps, that is on the South Coast of Newfoundland. The Minister of Fisheries and Oceans will be announcing his management plan, I believe, sometime around the middle of December, at which time he will then, no doubt, be a bit more specific as to tonnages and what, if any, compensation will be offered to people affected.

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

MR. MATTHEWS: Thank you, Mr. Speaker.

There have been some preliminary figures coming from different sources and I am sure the minister is probably aware of them. I am just wondering: Has the minister had discussions with any of the fish processing companies, in particular, Fishery Products International, to get some indication as to what these drastic quota reductions will mean for Fishery Products operations, particularly South Coast operations? Has the minister met with Fishery Products International, does he have any indication whatever of what the implications may be, and will we see further plant closures as a result of these additional reductions?

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

MR. CARTER: Mr. Speaker, I should point out that the federal minister is contemplating leaving the allowable catch on the western side of Newfoundland pretty well where it is. There may be a very minor reduction and the Province's position, of course, is given the fact that the fish stocks are in serious trouble and given the fact that this year the actual harvest was considerably less than the total allowable catch, which of course says that it's a 'paper quota' when in fact the fish were not there, and we called for a moratorium. I do not know what position the minister will take in that regard but with respect to FPI, yes, - not on a daily basis but certainly on a very regular basis, we are in contact with Mr. Vic Young or one of the officials of FPI and it is obvious that the proposed reductions in TACs will to some extent impact on FPI. The full extent will have to wait until the minister announces his management plan which, like I said a moment ago, will probably be around the middle of December. There is some pressure being brought to bear on the minister that certain stocks on the, I think it is the Georges Bank and the Scotian Shelf, that maybe access to those stocks be reserved for fixed-gear small boat fishermen. The Province took the position at the last minister's meeting in Fredericton that the deep-sea fleets should get a pro rata share of that TAC. Now, there were three provinces in favour of that proposition and two against. I do not know what decision the minister will take but that will impact to some extent on the future prospects of FPI as it relates to their dependence on that particular stock.

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

MR. A. SNOW: Thank you, Mr. Speaker.

My question is to the Minister of Education. I wonder if he is aware that teachers in western Labrador are facing layoffs from their jobs and income cuts? Now, this is apart altogether from the proposed mini-budget that the Government has announced they will be coming in with later on this week or early next week. Is he aware that the mining companies have cut their grants to the school boards? These are grants in lieu of taxes to the school boards. Is he aware of this and the predicament that the school boards will find themselves in because of these cutbacks that the mining company will be having? These cutbacks will cause layoffs and of course possibly as much as a 20 per cent decrease in salaries to teachers in western Labrador.

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

MR. DECKER: Mr. Speaker, I can't say specifically I'm aware of any layoffs of teachers. What I am aware of though is that the mining companies in Labrador West have decided, for various reasons, to lower the amount of money that they are giving to the school boards. School boards themselves will have to decide what they are going to do to meet that shortfall. One option which would be open to them I suppose would be to deal with layoffs of teachers or some cutback in contracts. Hon. members will know that the board in Labrador West has been supplementing the salaries of most, if not all, the teachers in the area, and they were able to do this because they had money coming in from the council, called a grant in lieu of taxes.

I cannot say specifically how the board will attempt to deal with the fact that the companies have decided to cut back on the amounts. I suppose, if the hon. member has learned that the boards intend to do that, he probably knows more than I do. It will be a board decision as to how they deal with this loss of a grant, Mr. Speaker.

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

MR. A. SNOW: Mr. Speaker, the minister is undoubtedly aware that the decrease in the grants that the company is giving to the boards is due to the abolition of the local school tax authority. Of course, it would be dual taxation. The Minister of Finance is nodding his head in agreement with what I'm saying.

Mr. Speaker, has the minister offered any assistance to the school boards in western Labrador to help them cope with this disastrous problem that's going to have to be addressed here in western Labrador?

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

MR. DECKER: Mr. Speaker, I have discussed the problem with the school board in Labrador West. I've not offered them any extra money. However, now, as a result of the abolition of school taxes that board will be receiving an increase in funding which it would not have received had we kept the school tax in place. The board and the council suggested at one time that the whole reason for this grant being there in the first place was in lieu of school taxes. Now there is some argument as to whether or not that was the real reason why the grant was there. The grant was a grant per se, and it was a considerable amount of money. IOC in recent years have been coming up with some very difficult times. The sale of iron ore is down, the whole iron ore sector of the economy is very flat, the Iron Ore Company - like government - has had to tighten up its reins, and try to make some savings.

One of the areas where they decided to cut back on a portion of a grant was a grant that they were giving without any obligation, to school boards. As a result of that school boards will have to attempt to deal with that issue. Unfortunately, government is not in a position to pick any particular school board and say: We are going to give you special treatment. We treat the school board in Labrador West exactly the same way we treat the school board in the Strait of Belle Isle or the school board in Bay d'Espoir or wherever. That is one of the things which we have been able to do with the abolition of school tax, where there are not different classes of school boards in the Province.

MR. SPEAKER: The hon. the member for Menihek.

MR. A. SNOW: Mr. Speaker, the minister has suggested that the school boards in western Labrador would receive more money this year from the administration because of the change in the school tax authorities throughout this Province. Would he table in this House, would he try to tell us, the exact amounts of money that they received over the last few years and what they will be getting over the next couple of years?

I am sure he is also aware that there is a tremendous difference in the amount of money that the Iron Ore Company of Canada paid and Wabush Mines paid, and with regard to how much the present administration is going to be paying to the school boards in western Labrador. If they cannot get this extra money, what does he propose that the school boards should be doing in western Labrador, Mr. Speaker?

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

MR. DECKER: Mr. Speaker, I will have to get Hansard to see specifically what the hon. member is asking me to table, if he wants me to table something for the past few years, if he wants me to table something that we have not yet done for the next two years. I will get Hansard, Mr. Speaker, and if there is any way under the sun that I can comply with the hon. member's request I will certainly endeavour to do it. However, Mr. Speaker, it is probably going to take a person who has much more ability than I or anyone that I know, to comply with the hon. member's request. But I will certainly take it under advisement, Mr. Speaker.

The hon. member should know that in this Province school boards have responsibilities and obligations. The way the system works, I don't have the authority to go and say to any school board: you must hire a janitor, you must hire a bookkeeper, you must do this, you must do that. Boards have a certain amount of autonomy which they guard jealously, Mr. Speaker. They need have no fear from me, I am not going to interfere in areas where boards have responsibility.

MR. SPEAKER: The hon. the member for Menihek.

MR. A. SNOW: Mr. Speaker, I am not asking the minister to interfere in the educational process in this Province. I am asking him to administer his responsibility of delivering education fairly, with fairness and balance, Mr. Speaker - I am sure he remembers those words - to the people of this Province. That includes the people in western Labrador, Mr. Speaker.

He does recognize that this government promised that what would happen, Mr. Speaker, is, when the school tax was abolished there would not be a decrease in the amount of money that a school board would receive in this Province. There is a decrease in western Labrador. Can he tell me how much money it was decreased?

MR. SPEAKER: Order, please!

The hon. member is on a supplementary. I didn't get what the question was. I don't know if there was a question in that.

AN HON. MEMBER: Yes there was.

MR. A. SNOW: What was the decrease?

MR. SPEAKER: I am sorry, if there was.

The hon. the Minister of Education.

MR. DECKER: Mr. Speaker, I did not specifically hear a question either but I will tell the hon. member one thing he can be sure of, and that is that this administration will act with fairness and balance. I will hold up the record of the past three years to anyone in this Province to look at.

As for the abolition of the school tax, we made a statement, and I stand by it, that as a result of the abolition of the school tax, no school board will receive less money. As a result of the abolition of the school tax, nobody will receive less money.

Now, Mr. Speaker, we stand by that statement, and the hon. member can shout and scream and kick all he likes, and hon. members opposite can shout all they like; we are not going to bring back the school tax, that is a fait accompli.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Burin - Placentia West.

MR. TOBIN: Mr. Speaker, I have a question for the Minister of Social Services. While the Minister of Education is talking about recognizing a decrease in the school boards of western Labrador, my question to the Minister of Social Services is dealing with the stagnant position of the amount of funding that is being provided to the Consumer Organization for the Disabled in this Province.

In the past year COD, as they are referred to, had to close their office from December to April because of the lack of funding received from the provincial government.

Let me ask the minister: Does he believe that the amount of money which they receive from this Province is adequate for the Consumer Organization for the Disabled to operate under?

MR. SPEAKER: The hon. the Minister of Social Services.

MR. GULLAGE: Mr. Speaker, the Consumer Organization for the Disabled representatives were in to see me just a few days ago, and the amount of money that they are receiving from the Province is indeed a small portion of the amount required; but I have to tell the House that most organizations that deal with my department - most community organizations - all worthwhile, have difficulties with their budgets at this time, as we do.

In addressing their deficits, or projected deficits, it is very difficult in that we have only so much money available for community organizations, for programs per se, and that money has to be shared amongst many organizations. In fact, most community organizations deal in some way with my department, and in these difficult times I would have to say that their amount of funding from the Province is probably not adequate per se, but it is very difficult to increase it.

MR. SPEAKER: The hon. the Member for Burin - Placentia West.

MR. TOBIN: Mr. Speaker, we have heard the Premier in the past few days talk about the deficit of other provinces being in the same or similar situation to the deficit of this Province. Let me tell the minister, in that case, while this Province provides a grant of $4,600; PEI provides a grant of $52,000 to theirs; Nova Scotia provides a grant of $88,500; Alberta $65,000; Ontario, which is much larger, $100,000.

If we were to compare the $52,000 that Prince Edward Island provides to their organization group, and the $4,600 - the measly $4,600 that we provide in this Province - let me ask the minister: Does it bother him to know that that is all the money that this government is giving to such an organization?

MR. SPEAKER: The hon. the Minister of Social Services.

MR. GULLAGE: Yes, Mr. Speaker, it does bother me, looking at those statistics. In fact they were made available, of course, to me as well. I am having it checked by my officials as to the comparison with other provinces. No doubt it is disproportionate, looking at per capita contribution to the Consumer Organization for the Disabled vis--vis other organizations with sometimes different names but with the same objectives.

Also, I am having checked the numbers of organizations dealing with interacting with the problems of the disabled throughout the country. In many cases other provinces have more than one organization. Some have only one; some have several, so I want to get a firm fix on where we are compared to other provinces, and compared to the number of organizations that are concerned with and deal with the disabled community.

MR. SPEAKER: The hon. the Member for Burin - Placentia West.

MR. TOBIN: Mr. Speaker, if we had several to split up the $4,600 among it would not go very far, I say to the minister.

Let me ask the minister: Will he, today, tell the Consumer Association for the Disabled that he will ensure, this year, that their office will not have to close for any period of time for the lack of funding?

MR. SPEAKER: The hon. the Minister of Social Services.

MR. GULLAGE: Mr. Speaker, I cannot make that assurance. I can only tell the hon. member that it is being checked into on an urgent basis. I realize the concerns of this organization. I know that $4,600 appears to be an inadequate amount, but we have, as I mentioned, contributions to make to many community organizations. Many of them, the vast majority I should say of them, have been in to see me with concerns about a projected deficit this year.

This is, however, as he points out, a more urgent situation, in the sense that they are about to face possible closure of their office and I am dealing with it on a priority basis. As soon as the figures are available and the information is available to me we'll have to make a decision.

However, I have to point out to the House that we have only a limited amount of funds, all of which have been expended or allotted, committed for this fiscal year, and it is very difficult to solve the problems of this organization or any other given the tough times that we have, and trying to find money. The only way funds could be found at this point in the year, Mr. Speaker, is to take it from another organization. That of course is very difficult to do.

MR. SPEAKER: The hon. the Member for St. John's East.

MR. HARRIS: Thank you, Mr. Speaker. My question is for the Minister of Finance and concerns the Financial Corporations Capital Tax Act which was introduced into the House yesterday by the minister as an interesting little amendment to the Financial Corporations Tax Act.

Can the minister tell the House why he introduced this amendment as a change in tax conditions that apply to the use of venture capital in the Province when the only corporation affected by this is in fact a trust company known as Fortis Trust, a related company to Newfoundland Light and Power, which is already making a fortune of money off the consumers of this Province, Mr. Speaker, and this is really a tax measure designed to relieve taxes for this one sole corporation?

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

MR. BAKER: Thank you, Mr. Speaker. The Financial Corporation Capital Tax Act imposes a tax on paid-up capital of banks, trust companies and loan companies operating in the Province. The rate is 3 per cent. There's a $500,000 deduction when the banks and trust companies and so on allocate their paid-up capital per province. They're scattered over a lot of provinces. There's a half million dollar deduction that is made in their figures and then they pay tax on the paid-up capital beyond that.

Now there's a slight problem in terms of the amount of paid-up capital that's necessary, the minimum amount of paid-up capital that's necessary, for the deposit insurance coverage. So that a small company getting into this field would have difficulty starting out under the condition that it needs a minimum of $5 million in paid-up capital on which tax must be paid, even though if the amount of business they're doing would require a much smaller amount of paid-up capital under normal business practices.

In the case of this particular trust company - and the request came from them a while ago - their activity in the Province....

SOME HON. MEMBERS: (Inaudible)!

MR. SPEAKER: Order, please!

MR. BAKER: Their activity in the Province would require under normal circumstances an amount of about half a million dollars paid-up capital. Unfortunately, in their sense, they would have to pay the 3 per cent tax on the full $5 million of paid-up capital. That means effectively their tax rate is at ten times the tax rate of the larger companies in this business, which means it's a total disincentive for anybody else to get into the business and compete with the banks and trust companies and so on in this Province.

So we have determined that for smaller companies wishing to get into this field that we would make an adjustment on the lower end to make it more possible for smaller companies to become competitive with the banks and trust companies.

MR. SPEAKER: The hon. the Member for St. John's East.

MR. HARRIS: Thank you, Mr. Speaker. The minister knows full well that all this money is invested one way or the other. What I want to know is why the government of this Province are giving a tax holiday for $5 million on 3 per cent for Fortis Trust, and is not prepared to give any relief to Newfoundland and Labrador taxpayers who have to pay 12 per cent tax on every single purchase that they make?

SOME HON. MEMBERS: Hear, hear!

MR. HARRIS: Why doesn't the government give some relief to taxpayers for the amount of money that they spend coming up this Christmas to give them a bit of a break on the 12 per cent that they pay, and not start giving back money to Fortis Trust and to the shareholders of Newfoundland Light and Power, Mr. Speaker, who are only paying a 3 per cent tax? Why give them a tax holiday and make the people of this Province pay a full 12 per cent plus the GST of 7 per cent on top of that?

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

MR. BAKER: Yes, Mr. Speaker, I suppose there could be a lot of arguments made in that sense. Our strategic economic plan envisions giving certain types of tax relief to certain kinds of businesses in the Province to try to stimulate activity and I believe that there is a certain amount of stimulus ultimately that is needed in this Province, if we are to get away from seeing ever more increasing dependence on government. So the only way to get out from under this stimulus is to try to encourage more job creation within the Province and through the smaller companies particularly. So, Mr. Speaker, that is an argument that could go on; the hon. member could argue that we should never ever do any stimulus in terms of business, and we should force more and more people onto the welfare rolls of the Province and that is the way to solve the problems of this Province - the hon. member could argue that. However, Mr. Speaker, there is another side to that story.

MR. SPEAKER: The hon. the Member for St. John's East, a supplementary.

MR. HARRIS: Thank you, Mr. Speaker.

The minister knows and all of us in the House know that this is not a job creation company, this is a mortgage company that loans money and makes interest on it, Mr. Speaker. The only effect of this Bill right now, Mr. Speaker, is to pass back $150,000 to Fortis Trust Co. and the shareholders of Newfoundland Light and Power, why should this Bill be passed right now to give relief to them when the taxpayers of Newfoundland need relief right now?

SOME HON. MEMBERS: Hear, hear!

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

MR. BAKER: Thank you, Mr. Speaker.

Again, I am referring to the answer to my previous question, Mr. Speaker. If the hon. member is proposing that there should be no incentive to start business, if the hon. member is suggesting that the investment of money in this Province is not a stimulus for job creation, if the hon. member is suggesting these things, I can perhaps understand it, bearing in mind some of his previous statements in this House about going out and borrowing an extra $200 million or $300 million: it does not make any difference, we can bankrupt the Province, as long as we go out and borrow the money. That is his solution to everything. Mr. Speaker, bearing in mind that type of statement from the hon. member, I can understand him not understanding this situation.

MR. SPEAKER: The hon. the Member for Humber East.

MS. VERGE: Thank you, Mr. Speaker.

I was intending to ask my questions to the Minister of Tourism and Culture, but in his absence I will direct them to the Premier.

The government Strategic Economic Plan says the government is going to transfer administration and control of arts and culture centres to appropriate regional or community organizations. Is the government in fact, proceeding to divest itself of the Province's five arts and culture centres? If so, how is this going to result in any improvement and how is it going to help achieve the Province's stated objective of fostering cultural and tourism industries?

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

MR. BAKER: Thank you, Mr. Speaker.

Discussions I understand are underway in one if not two communities in terms of local control of the arts and culture centres. Mr. Speaker, we believe that to be more responsive to the local needs, and the centres we are talking to agree with this. In order to be more responsive to the local needs and in order to have better use of these facilities in terms of the cultural affairs of the communities, it is better to have local control and the centres can be more efficiently and effectively operated for the good of these communities if the control is local. That, Mr. Speaker, would not presuppose that then there would not be a provincial program and that there would not be a provincial effort in terms of providing outlets, artists and so on to travel around the Province; that can still happen under those circumstances but we believe that the local control by local groups will give a better input and a better cultural environment for that type of development in those communities.

MR. SPEAKER: The hon. the Member for Humber East.

MS. VERGE: Thank you, Mr. Speaker.

A supplementary to the Premier.

Will the Premier promise that the government will not download arts and culture centres on municipalities or other local agencies which are having trouble meeting their current obligations, and which do not want the added burden of operating an arts and culture centre?

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

MR. BAKER: Mr. Speaker, I know the hon. member had her question all prepared and so on, but she should have listened to my original answer and it would have been unnecessary to ask that question. We are holding discussions with these centres with a view to them taking over control. I don't agree that that is downloading. If it is of advantage to the people, if it is of advantage to these communities, and they wish to take over the control, why should we stand in their way? This is not downloading, as the hon. member pretends it is.

MR. SPEAKER: The hon. the Member for Humber East.

MS. VERGE: Thank you, Mr. Speaker.

A supplementary to the Premier or the Minister of Finance, who seems to be stepping in for the Premier.

In cases where there are appropriate regional or community organizations which want to take over responsibility for operating an arts and culture centre, will the government guarantee to that organization at least as much provincial funding as the government is now providing to operate the arts and culture centre through the government departments of Tourism and Culture, Works Services and Transportation and Finance? Will the government guarantee sufficient ongoing provincial government financing to make possible the continued operation of the arts and culture centre being transferred?

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

MR. BAKER: Mr. Speaker, the reason I am answering the questions is that I am very familiar with the situation. I have been involved with it for over a year in a direct way, and I happen to know exactly what is going on. Over the last year-and-a-half there have been actual proposals made to government from community groups and individuals in communities for taking over either the centres or parts of the centres or whatever. So these proposals have come in and I have been part of that process. That is why I am answering the questions.

The second part of the member's question had to do with government guaranteeing certain amounts of money. Now, Mr. Speaker, there we go again. Let's start throwing money around all over the place. Hon. members should know that times have changed, that the Province is in a very difficult financial situation. So are other segments of this Province, other than government, in a very difficult financial situation. I am not going to stand here, as the member knows, and guarantee that millions and millions of dollars are going to be thrown at anything. All I can tell the hon. member is this, that we are carrying on discussions, not forcing the discussions.

MS. VERGE: With whom? What groups?

MR. BAKER: There are two communities. That is all I am willing to say right now. We are carrying on discussions with two communities, not being forced. We are not forcing discussions. This is as a response to requests, Mr. Speaker, and we are carrying on those discussions for the better use of these centres in the Province, and I think the hon. member should applaud us for that.

MR. SPEAKER: Question Period has expired.

If I might remind hon. members of a rule with respect to Question Period: As all hon. members know, there are a lot of guidelines respecting which questions are permissible and the Chair tries to be very flexible. That is as it is supposed to be, giving members the benefit of the doubt with respect to questions. Again, it is a long-time tradition held by Speakers. However, I should remind hon. members that one question asked today, specifically the one asked by the Member for St. John's East, relates to an anticipatory rule which, spelled out in Beauchesne, clause 410, subsection 14, says, "Questions should not anticipate an Order of the Day although this does not apply to the budget process." In other words, if we are to debate a matter, then it ought not to be brought up in Question Period because it takes up an unfair time of the Question Period when we are going to debate it in Orders of the Day.

I want hon. members to be aware of that rule. The only instance where it has been disallowed by Speakers, or not enforced, is with respect to the budgetary process. The Chair has always allowed questions with respect to the budgetary process but, in other matters, if they are to be brought up in Orders of the Day, then members are advised not to raise the question.

Presenting Reports by

Standing and Special Committees

MR. SPEAKER: The hon. the Member for Mount Pearl.

MR. WINDSOR: Mr. Speaker, I beg leave today to table a Special Report of the Standing Committee on Public Accounts. The report is submitted to the House under the authority of sections 8 and 11, subsections 1 and 2, of the House of Assembly Act, and section 84 (e) of the Standing Orders of the House of Assembly of Newfoundland. Section 8 states, and I quote: "The House of Assembly or a Committee may require that facts, matters and things relating to the subject of enquiry before the House of Assembly or that committee be verified or otherwise ascertained by the oral examination of witnesses, and may examine those witnesses upon oath or affirmation; and for that purpose, the speaker or clerk of the House of Assembly, or the chairperson or clerk of that committee, may administer an oath of affirmation in the following form, or to the same effect, to a witness:"

Section 11 states, Mr. Speaker, and I quote: "The House of Assembly may command and compel the attendance before the House of Assembly, or before a committee, of a person, and the production of papers and things that the House of Assembly or committee considers necessary for its proceedings or deliberations."

Section 11 (2) "A person neglecting or refusing to attend, or to produce those papers and things before the House of Assembly or committee, is guilty of a violation of this Act."

Standing Order 84 (e) states "The said Standing Committees shall be severally empowered to examine and enquire into all such matters as may be referred to them by the House, and, to report from time to time, and, except when the House otherwise orders to send for persons, papers and records, to print from day to day such papers and evidence as may be ordered by them, and to delegate to sub-committees all or any of their powers except the power to report direct to the House."

Mr. Speaker, pursuant to the authority of the Public Accounts Committee a 'Call to Give Evidence' was issued to the President, Comptroller, and Director of Human Resources of Memorial University of Newfoundland by letter dated November 18, 1992.

By letter dated November 24, 1992, the President of Memorial University has advised the Committee that, and I quote: "In view of the information available to me and the established conclusion in respect to how the Committee should access information concerning the funds provided by Government through a grant to the University, I respectfully advise that neither I nor any other University official will be able to appear before the Committee."

The Public Accounts Committee does not consider that Memorial University has any rights or privileges pertaining to the accountability of public monies that are not enjoyed by other Crown corporations, agencies and government funded bodies. Past practice has seen the University provide financial information to the House of Assembly through the Minister of Education and the Committee has been forced to follow the same course due to the refusal of the University to provide the requested information directly to the Committee when requested. The Committee does not consider this to be the correct procedure to access such information and, in any event, does not consider that the University is excused from answering directly to the Committee regardless of the source of the information before the Committee. The Committee is therefore unable to carry out the mandate given to it by the House of Assembly and hereby respectfully requests the House to give further direction with respect to the provision of information when requested and the appearance before the Committee of Officials of Memorial University.

Mr. Speaker, if I may beg the indulgence of the House to expand for just a moment and to provide some background material relating to it - I think that is in order?

MR. SPEAKER: At this point in time we are just supposed to present the report and there is not any period for extended comment, unless by agreement. I think the hon. member asked the indulgence of the House. Does the hon. member have the leave of the House to expand on this? Does the hon. member have leave of the House?


MR. SPEAKER: By leave, the hon. member.

MR. WINDSOR: Mr. Speaker, I won't take advantage of the opportunity. I thank hon. members, but I think, in fairness to hon. members, it is important that we provide some background information and some support for the position that the Committee has taken in this particular matter. Mr. Speaker, I refer to the Memorial University Act, subsection 33, which states, and I quote: 'The management, administration and control of the property, revenue, business and affairs of the University are vested in the Board.'

Section 75 states, and I quote: 'The Senate shall have general charge of all matters of an academic character,' unquote.

Now, Mr. Speaker, that very clearly separates two divisions of responsibility of the university, one for the financial and administrative management of the university affairs to the Board of Regents and the academic matters, Mr. Speaker, clearly to the Senate. There was a clear division of powers and responsibilities between those two aspects of university life.

Section 38, Mr. Speaker, states: the accounts of the Board shall be audited at least once a year by the Auditor General or by some person appointed by the Lieutenant-Governor in council. The House will recall that yesterday a report was tabled from the Auditor General stating that the university has refused to provide documentation required by the Auditor General and that report was tabled here, in the House yesterday. Clearly, the act states that the Auditor General has access to that information. The Auditor General will therefore report to the House of Assembly. The Auditor General's report is normally referred to the Public Accounts Committee and the Public Accounts Committee would naturally expect to have full authority to investigate into all matters referred by the Auditor General's report.

Now Mr. Speaker, in the past - this discussion has been going on for many years; now, let me state before anyone else questions me on it that, indeed, previous governments have not, in my view, fully dealt with the matter the way in which I believe it should be dealt with. In fact, the university has always stated, because of academic freedom, they felt they did not have to answer to the House of Assembly or the Public Accounts Committee. It is the view of the Public Accounts Committee, Mr. Speaker, that academic freedom and financial accountability for taxpayers' money are two totally separate issues.

SOME HON. MEMBERS: Hear, hear!

MR. WINDSOR: By way of an example of that, Mr. Speaker, I refer to hearings of the Public Accounts Committee of the Legislature of Ontario, wherein, on February 5, 1991, they held hearings relating to matters referred to them, dealing with three separate Ontario universities. Firstly, the University of Guelph, and let me quote from a section of the testimony given by Mrs. Solette Gelberg. She says: 'I am Vice-Chairman of the Board of Governors of the University of Guelph,' and she relates to a number of other people who are with her. She continues: 'I want to start out by telling you how pleased we are to appear before the Standing Committee on Public Accounts today, to present our views on the public inspection audit that was conducted at the University of Guelph and to respond to members' questions.' Further on, Mr. Speaker, is a very important quote, in my view: 'There can be no doubt that universities have a duty to be accountable to the government and to the public, for the responsible expenditure of funds, a significant percentage of which come from the public purse. The Act that established the University of Guelph in 1964, assigns to the Board of Governors, the government, conduct, management and control of the university and of its property, revenues, expenditures, business and affairs, granting to the Board all powers necessary or convenient, to perform its duties and achieve the objects and purposes of the university. In a clear separation of powers the legislature by the same Act entrusted our Senate with responsibility for determining, controlling and regulating the educational policy of the university, including the establishment of degree programs and academic standards.' I would submit, Mr. Speaker, this is very similar to the situation I referred to in the Memorial University Act.

The Vice-Chairman of the University of Guelph continues and says: 'This does not, of course, remove their obligation to be responsible to the larger society, nor would any university desire that freedom.'

So, Mr. Speaker, it is clear that the University of Guelph, the Board of Regents of the University, and the President of the University, have no problem whatsoever appearing before them.

There are a number of other quotes I could give. I will move on quickly to the University of Trent. Mr. Stephenson, the Vice-Chair of Trent University's Board of Governors, states: 'The Trent Act assigns to the Board of Governors responsibility for the government, management and control of the university, its property, revenues, expenditures, business and affairs' - very similar, again, to both of the previous ones.

Later on, the Vice-Chairman of the board, I believe it is, says, and I quote: 'At Trent we accept the principle that openness leads to more effective management and to better public understanding of the role we play in society. It was in this spirit that the university acceded to the request that a provincial auditor conduct an inspection audit of appropriate areas of our books.'

So, Mr. Speaker, these are the sorts of things that have taken place there. He carries on to say: 'I would like to extend to the Public Accounts Committee the university's full co-operation in pursuing any areas of interest either today or in the future. Our books are open and you are most welcome to visit Trent and to observe the educational and research programs in which we take pride.' Clearly, Mr. Speaker, those universities do not have any problem.

One final quote, if I may, from Dr. McGavin, the Chairman of the Board of Governors of the University of Toronto. He says, Mr. Speaker: 'Last fall, I prepared some remarks for council members on their roles as trustees. He quoted himself. He quotes: 'The university is a self-governing community, but it is also a public institution with much of its income coming from the taxpayers and from the university's benefactors. You, the Governors, are accountable to the public to assure that the university maintains and enhances its position as an institution of academic excellence, and to assure that the public funds are being spent responsibly and effectively. To digress for a moment, for the public, I mean also the legislature and through its elected officials.'

Mr. Speaker, in view of these precedents that we have set - and there are others that I can and will in due course quote - the Committee has taken the view that the University should, indeed, answer to the Public Accounts Committee; should be accountable for an expenditure of some $130 million this year of taxpayers' dollars; and in view of that, the Committee respectfully requests the House of Assembly to give direction to the Committee and to the University as to how we should proceed from here. Thank you, Mr. Speaker.

PREMIER WELLS: Mr. Speaker, if I might address those -

MR. SPEAKER: Order, please!

Just to remind hon. members again, this is not according to procedure, so we allowed the Member for Mount Pearl to have leave.


MR. SPEAKER: The hon. the Premier, by leave.

The hon. the Premier.

PREMIER WELLS: Much of what was said by the hon. member, I endorse fully. However, like most things there's a little merit on both sides of many issues. To be fair to the University and the University authorities, the position ought to be fully explained. I should say, Mr. Speaker, that we have received notification through a copy of the report of the Auditor General that was tabled here in the House. We have also received a representation from the University advising us of the Auditor General's request and their response. As a matter of fact, I met with the President of the University, the Comptroller of the University, and I believe - was the Minister of Justice there?

MR. ROBERTS: The Minister of Education.

PREMIER WELLS: The Minister of Education, and I believe the Minister of Justice was there, as well. The three of us at least met with them to discuss the matter. They advised us of the circumstances. We told the University in very clear terms that they had to be accountable for $120 million or $130 million of public funds in much the same manner as any other body that receives public funds has to be accountable for the expenditure of those funds.

In fairness to the University, they readily agreed. It was quite appropriate that they should be accountable. However, they disagree with the approach that the Auditor General is taking, and let me tell you the basis for their disagreement with the approach. I should say that the government hasn't formed a conclusive position on it yet. It is still in the process of being examined and we hope we will have a position to bring before the House shortly, Mr. Speaker.

The University is created under The University Act. The auditing of the University is provided for in The University Act, itself, and the appointment of the auditor is subject - not subject to - it is made by the Lieutenant-Governor in Council.

The former government -

MR. WINDSOR: If I may refer to the Act -


MR. WINDSOR: - 'the Auditor General or such person -'

PREMIER WELLS: The audit shall be performed by the Auditor General or such person as the Lieutenant-Governor in Council shall appoint.

Now, Mr. Speaker, the former government - and here I am not at all being critical; I expect we probably would have done the same thing - the former government appointed the reputable auditing firm of Peat Marwick Mitchell to be the auditors for the university, and they have, in all the intervening years, done the audit. When we constituted the government we saw no reason to change it. They were a very competent, reliable firm, and they have continued to do the university audit. And through that auditor, the university accounts, or the university's expenditure of funds, is audited to see whether or not it complies with the statutory or other requirements. To the best of my knowledge, the audits have always been in order - so far as I know - I have no basis for suggesting that they have not been.

Now, when we put in place the new Auditor General's Act, I believe we continued - the new provisions are pretty much the same as the provisions that were there under the old act, and that is that if the Auditor General has reason to believe that the audit does not fully and properly report, the Auditor General is at liberty himself or herself to go and cause an audit to be conducted - if there is reason to believe that what has been produced is not adequate, even though the auditors are appointed by the Lieutenant-Governor in Council.

I think that is entirely in order. I don't see anything wrong with that. If the Auditor General thinks that external auditors are not doing it properly, then the Auditor General should have the right to proceed.

What I am told has happened here - and whether or not this is the case, I don't know; I haven't spoken yet to the Auditor General so I can't be certain of it, but the hon. members raised it so I thought I should give you the information I have up to this point. What I am told is that instead of following the Statute, the Auditor General, perhaps in error, just simply decided they were going to move in and do an audit, with no indication of whether the audit that was done was satisfactory or not satisfactory - no indication that there was any basis for believing that it was unsatisfactory - just simply said, we are coming over to do an audit.

The University authorities asked: What is the basis for it? You have no basis for doing this. And they did not quote subsection 1 of Section 14, I think they quoted only subsection 2 which says, We have the right to do the audit.

Now, Mr. Speaker, if the Auditor General has reason to believe that the audit that has been done is unacceptable, the Auditor General's Department should move in and do an audit on the University, and they have the statutory right to do so, and will find the full support of the government behind them; but if the Auditor General believes that what has been done by Peat Marwick is acceptable, and the Auditor General just wants to expand the Auditor General's function and take over the university audit, that is quite another function. We have to decide, as a matter of policy, whether we will remove the auditors appointed by the former government and let the Auditor General do it or not.

So, Mr. Speaker, whether or not there is any real basis for the Auditor General's comments, or the views of the Public Accounts Committee at this stage, I cannot really say for sure. I can only assure the House -

MR. WINDSOR: Regardless of whether the Auditor General does the audit, or an external auditor does it, would the Premier like to address the question of whether or not the University should answer to the House through the Public Accounts Committee?

PREMIER WELLS: That is another question, and you have to give that some thought.

No government should ever impinge on the university's basic freedom; to be critical of a government and to be in a position where the academic staff and the university generally can be critical of government policies and approaches, so that if they are subject to this kind of scrutiny by government, they may well feel a pressure not to be. So, we should not impinge upon the freedom of a university, the academic freedom which, as the hon. member pointed out quite correctly, is the responsibility of the Senate. That is true, but the administration authorities also are part of the university, and if they feel the heavy hand of government on them, or the government process on them, their sense of academic freedom may well seem somewhat limited.

So I do not have a definitive judgement on that at the moment. My initial reaction is: No, we should not be able to summon the President and officials of the University before the Public Accounts Committee.

I know that the former government took that position, as well. The issue arose five or six years ago.

AN HON. MEMBER: (Inaudible).

PREMIER WELLS: I am just saying, the former government here took that position five or six years ago when the present Minister of Finance, who was Chairman of the Public Accounts Committee at the time, asked for the university authorities to attend and be summoned before the Public Accounts Committee to answer their questions. The government of the day decided that would not be proper, it would place too serious an infringement on university authorities. That doesn't mean they don't have to account for the $130 million. They most certainly do. And it is the Minister of Education who has the responsibility to make sure that he answers in the House for the propriety, the thoroughness and fullness of their accounting. That was the position the former government took.

I have spoken since to the present Minister of Justice and he told me that at the time, after the discussion, he came to the conclusion that the position of the government of the day on it was right, and they agreed. Thereafter the Minister of Education answered fully and, to the credit of the then Minister of Education, he was determined to make sure that the university would fully answer as well. He tells me he was satisfied that he caused this to happen.

So, Mr. Speaker, whether there is any need to get too tied up immediately in this issue, we want to take a look at it and make sure we have a chance to speak to the Auditor General first and see fully if there is any basis. If she feels she has a basis for going in and doing an audit, she hasn't yet disclosed it. If she does, then clearly she has the right to do so.

MR. SPEAKER: The Chair wants to remind hon. members that what we were doing in the last little while was by the consent of the House and not according to the rules. I just want to remind hon. members what Beauchesne says about presenting reports. I know that we all know it, or at least I think we do.

Again it is Clause 878, page 242, subsection (2): "When presenting a committee report, the Chairman of the committee, or other member acting on behalf of the Chairman, may make a brief statement about the report."

The hon. member was operating with the consensus of the House, as was the Premier.

Just to raise another matter: Committees are masters of their own procedure and disputes in committee should be resolved in committee. I realize that the committee might be frustrated, but at the moment there are no rules to cover it in the House.

Are there further reports by standing and special committees?

I have called it. I have missed again. It is too late anyway, so I will acknowledge the hon. the minister. I wanted to welcome a student group but it looks like they have gone anyway.

The hon. the Minister of Environment and Lands.

MS. COWAN: Thank you, Mr. Speaker.

I rise today, as the Minister responsible for the Status of Women, and I am pleased to present to the House the Annual Report, 1991 - 1992, of the Provincial Advisory Council on the Status of Women.

Further reports by standing and special committees?

Well I will, as I did the other day, welcome in absentia the group of students who were here, fourteen Level II students from Swift Current Integrated High School in the district of Bellevue. They were accompanied by their teacher/guidance counsellor, Mr. Cyril Rogers.

SOME HON. MEMBERS: Hear, hear!


MR. SPEAKER: The hon. the Member for Port de Grave.

MR. EFFORD: Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. EFFORD: Mr. Speaker, I have a petition here presented to me on behalf of 226 teachers from the district of Port de Grave and partially from the district of Harbour Grace. I would like to ask His Honour, the Speaker, for leave to present this petition because it is not made out to the hon. House of Assembly. The prayer of the petition starts off by saying: We, the staff of Bishop O'Neill Collegiate, do petition the government of Newfoundland and Labrador. So, I would ask leave, Mr. Speaker, to present it.

MR. SPEAKER: It is the House that will have to grant the leave. I have seen the petition and, as the hon. member says, it is not designed according to the way we require petitions to he designed. We are going to send the sample copy of what our petitions should say around to hon. members again.

Just as a matter of concern to hon. members, hon. members know that petitions are addressed to the House of Assembly, not to a particular minister, not to a particular member, and not to the government. Petitions are addressed to the House of Assembly, and there is a reason for that, because a petition is supposed to have a prayer and all of these things are related, it is not supposed to be debatable and because of all of that the petition is presented to all members and we all have an equal obligation in listening to, and giving concern to and expressing concern on behalf of the petitioners. I do not know if the hon. member has the leave of the House - having said that, I ask the Clerk not to take the time out. I was expounding on the petition.

MR. R. AYLWARD: On a point of order, Mr. Speaker.

MR. SPEAKER: The hon. the Member for Kilbride, on a point of order.

MR. R. AYLWARD: Mr. Speaker, you have asked for leave of this House for the hon. member to present a petition that is not quite according to the rules of our House. Mr. Speaker, I am sure that members on this side of the House, I cannot speak for the NDP member, but members on this side of the House would be very delighted to give leave to the hon. member to present that petition, as long as we have the same right and I can present the petition that I was refused leave for three days ago, which came in on a similar heading I would imagine that the member's has. The Member for Ferryland has two similar, the Member for Mount Pearl has some and so has the Member for Torngat Mountains. Mr. Speaker, we would gladly give permission as long as the Government House Leader will withdraw his refusal in not giving me permission to present a similar type of petition last week.

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

MR. ROBERTS: Mr. Speaker, it is quite right as my hon. friend, the Minister of Finance says, one cannot give leave conditionally. But let me state clearly my position as a member of the House, and that is the way I speak on these things, only as a member, I do not speak for my friends opposite or my friends here, but I agree with my hon. friend for Kilbride, what is sauce for the goose is sauce for the gander, tit for tat. But, Mr. Speaker, the reason I withheld leave the other day, was that I had not seen the document. A number of colleagues on both sides have come to me since then and shown me documents and I said I see no problem.

My concern as a member of the House is simply with letters. A letter is not a petition, Mr. Speaker. If the document is not headed in the proper form that does not trouble me, I have seen all sorts of them and I for one have raised no objection and would raise no objection. If the hon. member had not gotten himself in a snit the other day and got his knickers in a knot and let me seen it, I would have agreed to it, assuming it was in the form that we generally accepted in the House. I am quite prepared to carry on on that basis indefinitely. I have no desire to frustrate petitions and every desire to have them brought in, but my concern as always, is with letters, with a letter becoming a petition, that is all. If he will do me the courtesy to see me now, I will tell him what I will say to them.

MR. SPEAKER: To the point of order, the hon. the Government House Leader certainly has a point. Letters should not be permitted in the House as petitions. The difficulty is in getting petitions that do not meet the required form. I think all hon. members will understand that something in the form of a letter is not acceptable. I take it that the hon. the Government House Leader said that he is not particularly concerned about the form other than that, as far as he is concerned he did not want to see it in the form of a letter. I do not know if that meets the Member for Kilbride's condition of allowing the petition to be presented.

The hon. the Member for Kilbride.

MR. R. AYLWARD: Mr. Speaker, we gladly allow the hon. member to present this petition because we believe it is his right to present a petition regardless of what form it is in and whether or not it is a letter. If someone from his constituency asks him to present a petition to this House, he should be allowed to do it. Mr. Speaker, we will agree with him presenting his petition and we will also be raising on similar petitions in this House, and I hope that the members opposite will allow leave the same as we will allow leave.

MR. SPEAKER: Again, the Chair has no right to participate in debate. I can only say to the hon. member: there are rules with respect to petitions that the Chair did not design and the Chair must work under, sometimes in great frustration in having them presented. I can only say to hon. members that the Chair has to enforce the rules and it is up to the House to change them.

The hon. the Member for Kilbride.

MR. R. AYLWARD: Mr. Speaker, to that point of order once more. I hope you did not suggest that I was questioning the Chair at the time, I certainly was not. I know the rules under which the Chair operates and I agree with them but we will, by leave, allow the hon. member to present his petitions if we get leave when our turn comes.

MR. SPEAKER: The hon. the Member for Port de Grave.

MR. EFFORD: Thank you, Mr. Speaker.

Mr. Speaker, these 226 individuals, partially from the district of Port de Grave and partially from the district of Harbour Grace, asked me to present this petition to the Honourable House of Assembly. That is the reason why I took it to the Clerk of the House and the appropriate minister before coming to the House, to try to clarify if it could be legally presented. Because it's important that these people have their voices and their problems heard within the House of Assembly. The only format that these 226 individuals would have to present their opinions and their concerns to the House of Assembly is through their MHA. I take great pleasure, Mr. Speaker, in presenting this petition and speaking on behalf of these individuals who have legitimate concerns for a number of reasons.

One of the reasons is the fearmongering that's been going on through the union officials and the news media, being played over the air over the last number of weeks. What possibly is going to happen? These 226 individuals, like all teachers across the Province, have a legitimate reason to be concerned about what's going to happen in the near future in the Budget that's about to come down in a few days' time.

I have no doubt in my mind that these individuals at the end of the day will look back over the last two or three weeks, and wonder why the information came out as it did, when the end result comes down. The one clear message that I got from these individuals from speaking to them personally is that they are willing - and they understand - they are willing to help out and they understand the seriousness of the situation that the Province finds itself in. But they are not willing to pay the total shot.

That's what I want to do. Get their message through to this government, through to the House of Assembly, through the petition that they have presented. The prayer of the petition clearly reads:

We, the staff of Bishop O'Neill Collegiate, do petition the Government of Newfoundland and Labrador to return to free and open collective bargaining when the present NTA collective agreement expires. To adopt whatever measures are necessary rather than impose further financial hardships on the teachers of this Province who have already been subjected to a wage freeze and further reductions in salaries as a result of increase in UI premiums, pension premiums, and increase in personal income tax. To pursue all other opportunities that are available rather than to impose financial restrictions on the education system, a seriously underfunded system.

The prayer of the petition reads exactly the concerns of the total of the 226 people. Although each page there -

AN HON. MEMBER: (Inaudible)!

MR. EFFORD: I would not present the petition unless I fully supported it.

MS. VERGE: Did you sign it?

MR. EFFORD: I wouldn't be a hypocrite, Mr. Speaker, and come into this House of Assembly and present the petition just to grandstand in the House of Assembly. When these members from my district gave me this petition I brought it to the House of Assembly to speak their concerns so the government of the day, in making their decisions, can understand the concerns of these individuals.

The problem I have with what's gone out is the union fearmongering. We just went through several months of fearmongering in the referendum issue that came up over the last several months in the Province, and in the country of Canada. We know what that accomplished. Now the unions are out there in a fearmongering attitude in the same way.

Nevertheless, let's get back to what's at hand. We have 8,000 professional educators in our Province who are very concerned about the attitude towards teachers. That's what I want to deal with here for a couple of minutes. Everybody is under the impression that teachers are overpaid. Everybody is under the impression that teachers are making too much money. Everybody is under the impression that teachers work very few hours and get paid a lot of money. That is absolutely wrong.

I know in my own personal family I have several relatives who are teachers - high school teachers, elementary teachers, whatever. Their day is just as long as my day and goodness knows that's long enough. Their weekends are totally taken up with things outside of the classroom. They have a strong commitment to their profession, a very strong commitment. But the issue at hand here is: are there going to be any further cuts in salaries? Are they going to lose again?

What you have to understand is they've already lost a great deal in the last several years. While wage freezes are on and while government has the responsibility to financially administer its debt - that was caused by the former administration, that we have to pay out some $585 million a year interest - the responsibility is on everybody in the Province to -

MR. SPEAKER: Order, please!

The hon. member's time is up.

SOME HON. MEMBERS: By leave, Mr. Speaker.

MR. EFFORD: By leave, Mr. Speaker?

SOME HON. MEMBERS: (Inaudible).

MR. EFFORD: One minute, Mr. Speaker.

MR. SPEAKER: Does the hon. member have leave of the House?


MR. EFFORD: What we have to do, Mr. Speaker, is to make sure that we are aware of the value of these people to our future. It is not only the cost to the government today, it is the cost and the advantages that are going to be applied to the future of this Province. We cannot lessen our education system, we have to continue to improve it and we have to strongly support the people that are involved in the education system at all levels. We have to be very cognizant of the fact that these people are suffering under the regular financial restraints that the Province faces on a day to day basis, like the country is facing on a whole. Nevertheless Mr. Speaker, we have to do this with an open mind and not make any one group of people pay the piper; everybody in the Province of Newfoundland and Labrador has to share the responsibility, and that these individuals will be treated no less than any other group of people in the Province, thank you.

SOME HON. MEMBERS: Hear, hear!

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

MR. SULLIVAN: Thank you, Mr. Speaker. The fearmongering did not start with the unions. All the unions in this Province were informed that they had to reach certain cutbacks. Teachers: $15 million was a number thrown out, we will cooperate, we will suggest to you ways to cut, told by this government. Basically, this government has raised the anxiety of people in this Province and all the public sector unions. They have done the fearmongering so at least when they come back and they institute freezes and so on, the public sector unions can say thank you for nothing because basically they have set the agenda, they have initiated the meetings, they have indicated to these unions what they expect to cut.

Now they come back and try to pawn it off and say that the public sector unions in this Province are out fearmongering with their members and trying to raise undue concerns and anxiety, and that is incorrect. Basically overall, the concerns and cutbacks purposed in education - I asked a question in this House yesterday regarding cutbacks and funding to school boards to fund education and I read an excerpt from the letter which said there were cutbacks in curriculum because this government, after eight months of a fiscal year, have not given a final budget to the school boards of this Province. Normally, and it has been unprecedented in fact this year, normally all boards would receive their budget prior to their year. This year a tentative budget was given in July. Boards in this Province were told that there would be an extra $11.5 million because boards only had an opportunity to collect 50 per cent of the school tax. These boards were told to budget, not on $11.5 million - when presenting a tentative budget - but on $7 million. This Province is still holding back $4.5 million that they may never get.

It is this government that is talking about giving more money and the acting minister, the Minister of Finance said he would get back to me yesterday in a few minutes on these figures, when I asked a question, I have not heard yet because the truth of the matter is that this government is deliberately holding back money from the school boards of this Province to help balance and improve the deficit situation here in this Province.

SOME HON. MEMBERS: Hear, hear!

MR. SULLIVAN: I have had calls from school boards indicating that they have not up to now, eight months of a fiscal year, received a budget for their expenses for this fiscal year, 1992-93. Unprecedented, it has never happened before to my knowledge, and I inquired.

Talking about cutbacks in teachers and services, a cutback to teachers in this Province is a cutback in our future.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: I would like to have the opportunity to express my point. We were very considerate to give leave for the petition and leave for extra time, I would just like to have the opportunity now to continue. I am saying that cutbacks in teachers and education in this Province is a cutback on an investment in our future. This government has indicated its commitments in their Change and Challenge, in improving education in this Province, and all we have seen is continuous cutbacks. They threw out the figures of cutbacks in all different aspects in education. The substitute teacher cutbacks where students may be left out of school because of it, once heard cutbacks purposed, I have asked the Minister of Education on several occasions here in the House and I have not gotten any answers: we cannot release what is in a mini-budget. I have asked questions pertaining to the Ministerial Statement by the Minister of Finance and have not gotten any answers up to this point. We cannot get any answers from the government. We have to get them out from the community, from the boards and other people, and from teachers.

I certainly agree with the concerns of the Member for Port de Grave for his constituents in Port de Grave and in Harbour Grace. I think teachers have a right to be fearful, and to have a high anxiety level, because this government has inflicted that level of anxiety on the people of this Province, and I think it is about time that the people of this Province did fight back.

They disagree with Bills 16 and 17. The Member for Port de Grave has indicated that he disagrees with Bills 16 and 17, and still we are going to continue with Bill 17 and continue to freeze and possibly, this government again, even to suggest a new bill or to suggest more rollbacks again, to unduly raise the fears and concerns of people here. I think it is terrible.

MR. SPEAKER: Order, please!

The hon. member's time is up.


MR. SPEAKER: Does the hon. Member have leave of the House?


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

MR. SULLIVAN: Thank you, Mr. Speaker. I will clue up very shortly.

I think it is very unfair on the part of this government, and very callous, to call public sector unions in this Province and make suggestions, and then come back and deny it. The public unions have stated emphatically that they have been asked to cut so much money, and this government has come back and denied it.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

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

MR. DECKER: Mr. Speaker, I would like to say a few words to this petition.

First, I would like to commend the hon. Member for Port de Grave who has brought these concerns to this House of Assembly. I think it is good he should do that. The problem is, as hon. members know, and as the people of this Province know, the Province is having some very severe fiscal problems.

Mr. Speaker, I have here a clipping which I think is from the Globe and Mail, where the Treasurer in Ontario, Laughren - and I just use this by way of illustration - talks about the deficit that Ontario has: There is nothing magical or mysterious about it. We have a gap out there between expenditures and revenues that is giving us a ten billion dollar deficit.

Then he goes on to say: Should there be wage controls? Should there be wage rollbacks? Those things have been suggested, believe me, and many of those suggestions are more palatable than massive layoffs in the various sectors, he said.

Mr. Speaker, right across the country this is happening. Now when this administration became aware that we were heading for an even more severe fiscal problem than we had anticipated when we brought down our Budget, we went out and consulted with the various stakeholders and unions in the system. Maybe that is where our problem is.

We had the option. We could have done what the CBC did a few years ago. They got behind closed doors; they made their decisions, and then they dropped the axe. But we do not believe in doing things that way. We want to consult with the various unions - the Newfoundland Teachers Association, the nurses, NAPE, CUPE, and all the unions - and whenever you consult with people, there is a danger. There is a danger of your intentions being misinterpreted, and as a result of the meetings that took place, there have been a lot of rumours flying around.

AN HON. MEMBER: Fearmongering.

MR. DECKER: There has been a lot of fearmongering going around. A lot of the employees, including teachers, are very concerned about the hearsay and the rumours and the nonsense.

Mr. Speaker, in fairness, the hon. members opposite will have to admit that they are not helping matters, because they have jumped on the bandwagon and tried to make a few political points on this, and they are part of the rumours which are being circulated, because they have a totally different agenda.

What I want to say to the teachers who wrote to the hon. Member for Port de Grave - I want the teachers to know, through the Member for Port de Grave, that this administration is treating this problem as it is - a very serious problem; but we are treating it with humanity. We are treating it in a caring way. We want to avoid anything which will unnecessarily have any impact on the standard of living that our people could have.

We would much rather be saying to the teachers, and the secretaries, and the janitors, and all the employees of government: We are going to give you an increase in pay next year. We would love to do that. We are politicians; but we, as government, have an obligation to the greater good, to all the people of this Province, and we have to make sure that the fiscal integrity of our Province remains. If it did not remain - if that were somehow threatened; if that were impacted upon - the greater damage that would do to the whole Province could never be corrected, Mr. Speaker.

So, to the people for whom the hon. member has presented this petition I want them to know that their voice is being heard in this chamber today, and that we are dealing with this fiscal crisis that we have in a caring human way and we will certainly support the best interests of all Newfoundlanders and Labradorians. We will not discriminate against anyone who is a teacher, anyone who is a secretary, anyone who is a doctor, or anyone who is a nurse. All of us as Newfoundlanders, politicians, employees of the government, employees of the private sector, we are all in this together, and working together through competent members, such as the Member for Port de Grave, we will work through this. At the end of the day, as the hon. member pointed out, everybody will say: thank God, we had there a responsible administration which did what it had to do, and did it with caring and humanity.

Thank you, Mr. Speaker.

MR. SPEAKER: The hon. Member for Fortune - Hermitage.

MR. LANGDON: Mr. Speaker, I have a petition here on behalf of 209 people. It is not the proper way, I guess, of presenting it to the House but I did check it with the Government House Leader. It says: we would appreciate it if you would present our petition to the House of Assembly at your earliest convenience. I guess I might have to get leave.

MR. SPEAKER: Can the hon. member show the petition to the Opposition House Leader?

The hon. the Opposition House Leader on a point of order, I guess.

MR. MATTHEWS: If we are going to concur to do this then it has to be the same for both sides. The Government House Leader a few days ago objected because he had not seen a copy of what the hon. Member for Kilbride was proposing to present to the Legislature. If members are going to jump up in their places and just present them I think it is either going to be that way for everybody or the Chair, or the Table, is going to have to look at it all. We have to come to some determination here because my worst fear is that tomorrow or next week one of our members will rise in their place to present a petition, along the same basis as we are now giving leave for, and we will not be granted leave. I do not want that to go unnoticed and I do not want it to happen because if that is the case there will not be any cooperation from this side. I want to clarify that, either we give everybody leave to present petitions they have in their possession or we channel the petition to someone at the Table or the Chair to have a look and see they are sort of standardized, one or the other.

MR. SPEAKER: The hon. Government House Leader.

MR. ROBERTS: Mr. Speaker, to the point of order. I think the hon. gentleman from Grand Bank makes a very good point and maybe I could build on it by making a suggestion. Let us let this petition stand for today I say to my friend for Fortune - Hermitage. Maybe the two House Leader, my hon. friend and myself, and the gentleman from St. John's East who is House Leader, Leader and follower, the Trinity as it were, Father, Son and Holy Ghost, all combined into one, could perhaps call upon the Speaker and see if we can get some order into this. As the Speaker told us earlier there is a form and there is a rule in the House and if we want to change that either formally or informally let us do it, but I agree with my hon. friend from Grand Bank it ought to be tit for tat, the rules ought to be the same.

It almost calls the rules into question, Mr. Speaker, when we have a set of rules and keep waiving them all the time. If we have to waive them all the time my suggestion is there is something wrong with the rules and we should perhaps look at it and see what should be done. Maybe my friend for Fortune - Hermitage could wait until tomorrow to present the petition. Hon. gentlemen opposite should certainly look at it if they wish. That would be only courtesy. I am sure my friend did not mean any discourtesy. Perhaps the Speaker might ask some of us to attend upon him, Sir, and see if we can find a way out of this problem because it just keeps coming up. I suspect there are going to be a lot more petitions because there are a lot of things out there that people want to petition us about.

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

MR. MATTHEWS: Further to that point of order, Mr. Speaker. I have no objection to the Member for Fortune - Hermitage presenting the petition. That is not my point. All I am saying is that if we are going to allow it to happen then let us allow it to happen all the time. If a member has something brought to his or her attention that they have been asked by constituents to bring to the floor of the Legislature by way of petition let them do it. Let us forget what kind of format it is. If it is signed by two, five or 5000 people and the matter is brought to a member of this Legislature, constituents request they bring it to the floor by way of petition, let us let them do it, I have no problem with that and I would give leave today for the Member for Fortune - Hermitage to give his petition, to present it, very honestly, but all I am saying is, let us be fair about it. If we are giving leave on two occasions today to members opposite, then we should not be restricted tomorrow or next week or whenever from doing the same kind of thing. So if we want, I would suggest to the Government House Leader, I would have no problem with just letting it flow; whoever has the petition, stand and present it and whoever wants to support it, do so, or speak to it, do so; otherwise, if the member stands alone, sobeit. So I have no problem with letting the member go, and any other member who wants to present a matter in this House, let him do it.

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

MR. ROBERTS: I, as one member, do have a problem with the rules being ignored. The rules are there, they are clear. If they are not adequate or if they need to be changed for some reason, let us change them, but I certainly do have a problem, Mr. Speaker, with ignoring rules - that way lies chaos. I would ask my hon. friend to do whatever he thinks best, that is up to the gentleman from Fortune - Hermitage. He has as much right to speak as anyone here and he can speak as effectively as anyone here. But I suggest the way is perhaps for my hon. friend from Grand Bank and myself and the Holy Trinity from down in the corner, to attend upon Your Honour at some point and to see if we can resolve it and bring it back to the House and do it in proper form.

MR. SPEAKER: It appears that there is no leave - there is leave? The Chair needs a direction, which is it, leave or no leave?


MR. SPEAKER: Order, please!

MR. ROBERTS: Mr. Speaker, it is 3:33 p.m. Let us, perhaps, if my hon. friend will permit us, go on to Orders of the Day and then he could show it to my hon. friend and we will pass on. We have been an hour-and-a-half, Mr. Speaker, on routine orders.

MR. SPEAKER: The hon. the Member for Torngat Mountains.

MR. WARREN: Mr. Speaker, I just have a short point of order. Since we are talking about these particular petitions, and where the fax machine now has taken over from the mail, I would ask for Your indulgence, Mr. Speaker, and probably the Government House Leader's, too, in the matter that I do have petitions, but they have been faxed in to me; furthermore, Mr. Speaker, not knowing how long the House will remain open and knowing the mail will take considerable time coming from small places such as Williams Harbour or Cartwright or Nain and so on, may we be allowed to present the fax?

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

MR. ROBERTS: It is a very good point, and I would suggest to Your Honour that maybe you would want to take that under advisement and have a look at it. I don't pretend to know the answer. I can tell my hon. friend from Torngat Mountains that in my recollection of the long distant past when I was downtown moiling and toiling at the Bar, the same issue came up. As far as I know, it has not been resolved, whether or not the Supreme Court will accept a fax.

MR. R. AYLWARD: (Inaudible).

MR. ROBERTS: Not the bar which my hon. friend from Kilbride appears on, I say to my friend, nor the one run so very capably by my friend from St. Mary's - The Capes.

SOME HON. MEMBERS: Hear, hear!

MR. ROBERTS: But perhaps Your Honour might want to take that under advisement. It is a very good question.

MR. SPEAKER: I will do.

Orders of the Day

MR. ROBERTS: Mr. Speaker, I hardly know what to say.

Let me ask the House to consider Order 23, Bill No. 52, which is the adjourned debate on the Capital Tax bill. And you may recollect, Your Honour, that I made a declaration yesterday; that is still in effect, so I will be outside in the penalty box listening until the debate finishes.

MR. SPEAKER: Please, who adjourned the debate - was it the hon. the Member for St. John's East?

The hon. the Member for St. John's East.

MR. HARRIS: Mr. Speaker, I am not certain how much time I have left - perhaps the Chair can advise.

MR. SPEAKER: The hon. the Member for St. John's East has nine minutes left.

MR. HARRIS: Thank you, Mr. Speaker.

AN HON. MEMBER: The Leader of the Opposition (inaudible).

MR. HARRIS: I am glad to hear that, Mr. Speaker.

The legislation that the minister introduced yesterday as an interesting little amendment has proved, in fact, to be very interesting indeed, and I know that the minister is trying to save a bit of face on this by first of all, categorizing it as something about ventured capital and encouraging investment, and secondly, trying to suggest that there are all sorts of small companies out there with $10 million to invest, that are just waiting to find ways of putting it out in mortgages in this Province, and are waiting for this tax measure to happen.

But, Mr. Speaker, that is not really what has happened here. I believe all that has happened here is that a company known as Fortis Trust, with connections to Newfoundland Light and Power - both of them are wholly-owned subsidiaries of this company called Fortis Inc., which the Premier and the Minister of Justice have been involved in, in their prepolitical lives. And the Minister of Justice, quite rightly and properly, has absented himself from the debate because of his most previous connection with Fortis Trust. This associated company, Mr. Speaker, has a very close association with the Public Utilities Board, with public policy in this Province, and obviously, with certain important and influential Cabinet ministers.

So this is a single company which is coming - not saying: we are planning an investment, not saying: we are planning to do business, but we have a terrible problem with the tax regime which won't allow us to get into the business, but actually a company which went into the trust and loan business with their eyes wide open. They knew what the legislation was. It was there in 1985. They decided that for business reasons they could get into the trust and loan business, they could make money for their shareholders doing that, and they decided to do it.

Well, that is good enough. I don't have any objection. In fact, I am happy to see a locally-owned trust company, perhaps with different rules, with perhaps more favourable lending policies to give more people an opportunity to get into mortgages and buy or build homes. That is a good thing. The Minister of Finance is right in saying that does encourage other kinds of investment by individuals who want to build homes or take out mortgages to undertake activity.

But, Mr. Speaker, all these institutions that are covered by the legislation are to pay a 3 per cent capital tax on their aggregate of paid-up capital. And there is no reason why this particular company ought to be given a $150,000 tax holiday from the public treasury when that is not available to the individuals of whom 12 per cent of practically every dollar they spend goes to the provincial treasury, with another 7 per cent - or actually, it is a little more than 12 per cent, it is 12.84 per cent, in reality, because there is also 7 per cent GST tacked onto it.

So the 12.84 per cent sales tax that all Newfoundlanders pay when they buy goods and services is a considerable amount of money. They are not getting any tax holiday from this government - even though the Member for Humber West has urged them to do so in one of his recent press releases. But, Mr. Speaker, Fortis Trust, a very wealthy company, not a small struggling company, a very wealthy company, very well-financed, very well backed, is being given special treatment.

Yesterday it took us some little while to figure out what was going on, but I think we are now all sure what is going on. This is not a piece of legislation designed to encourage four or five or six or seven or eight trust companies to come forward and be developed. This is really a measure that looks after only one company. Perhaps when the Minister of Finance gets up at the end of the debate at second reading he can tell us why it is that other companies are not under this same legislation.

There are several companies, some which even call themselves trust companies - even though they aren't; and they aren't licensed trust companies - but there are a number of companies that are in the investment and loan business which are operating not as a trust company under the special trust company rules but are involved in the same business, the lending of money by way of loan and obtaining security by way of mortgage for that. For some reason they are not brought into this Capital Tax Act. I would like the minister to explain why that is.

If he doesn't understand - and it may be that when he was talking about venture capital firms yesterday it was because he didn't understand or hadn't been properly briefed. I suggested to him that it appeared that there may have been an attempt to slide this through without us really knowing what is going on. That may not be the case.

I will offer an opportunity to the minister to respond to that. Perhaps he can get his officials to brief him on why is it that other companies that are in the same business, the loan and investment business - some of them are incorporated under the Newfoundland Corporations Act. They are in the same business of lending money at interest rates, some of them, that would astound hon. members that they are collecting; operating a savings - or not savings, but operating investment and loan companies, and offering these - why are they not subject? - offering these rates, doing the same kind of business, really, as a trust company when it comes to investments. Not other trust services, but when it comes to investments like mortgages, they are in the same business. They are not affected, it appears, by this Capital Tax Act - only one company is.

So, if we are trying to encourage this type of investment, where are these other companies? Have they come to the government? Can the minister tell us how many companies have come to the government and said: We need to have a regime that is a little different? Or is it just as I have stated, a favour being done by this government, for whatever reasons, to one particular individual company, namely Fortis Trust? If that's the case, what is the real reason behind it? What is the real reason behind giving special tax treatment, a tax giveaway, to one individual company? - when all Newfoundlanders are required to pay 12.84 per cent when they go into the store to buy the necessities of life, to allow them to provide for their families, to buy cars, to pay for transportation, to do all the things they have to do, and pay a provincial sales tax on it at the rate of 12.84 per cent.

So I ask the hon. minister to deal with some of these questions when he gets up in reply and tell us why it is. Who else is involved in this process? Or is it as it appears, a request from one company alone, and a favour being done by this government, to give back some taxpayers' money to that one company? Thank you, Mr. Speaker.

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

DR. KITCHEN: Thank you, Mr. Speaker. I fail to understand the double standard that the member opposite brings to this debate. He supported Bill 47 and now he is against Bill 52. Bill 47 enabled the Minister of Finance to put in place the Credit Union Deposit Guarantee Corporation which enabled every Credit Union to have their depositors' deposits guaranteed by this government for $60,000 for three accounts. What he would like to do is deny another company virtually the same privilege. I don't understand the rationale behind this.

Bill 47, which we just passed, does just that. It encourages people to put their money into Credit Unions by having government guaranteeing the deposits. It has worked out reasonably well since that was put in place and we passed this bill, which was a bit of housekeeping there. It has worked reasonably well in that it has helped Credit Unions expand their deposit base. The basic reason for that is because in this Province we have problems getting local institutions involved in collecting pools of money. The money is collected by chartered banks and by trust companies and very often used to develop other parts of the country.

What we have to do here is to develop our own Province. One of the reasons for putting in the Credit Union thing was to enable Credit Unions to build up a supply of deposits that they could use to lend to their members and to develop, first of all, personal things, and secondly, to develop eventually the commercial part of their lending, and to develop the Province. Because a major problem that most companies have in this Province is to be able to access capital and funds when they need it.

So this particular Bill 52 now is basically to amend the Financial Corporations Capital Tax Act. What happens is that if a trust company or a bank, an organization, wants to get covered under the CDIC - the Canadian Deposit Insurance Corporation, and if they do get covered under the CDIC, under which banks and trust companies are covered, they get exactly $60,000 per deposit guaranteed by this corporation, for thirty-three deposits.

Now, the problem that - there is a condition. The condition to becoming covered under the CDIC is that there must be a $5 million paid-up capital. So, here we are in the Province - we have a few small loan companies, and we have another organization that is interested in getting into the business. When you start off first you don't need $5 million worth of capital to work your business. You take deposits, you lend out your deposits, and you have some capital; but you are forced to have $5 million capital in order to get CDIC coverage.

Now, we have our tax. The Province has its Financial Corporations Capital Tax Act, which is 3 per cent of the paid-up capital of the corporations. Now, in the case of a bank, a bank doesn't have $5 million paid up capital, it probably has $3 billion or $4 billion paid-up capital. Now, we don't tax on the $3 billion or $4 billion, we tax it proportionately to the amount of business they do in this Province. So, if they do one-hundredth of their business in this Province, we tax one-hundredth of their capital, rather than the whole. In any event, it is far more than $5 million.

So when we tax a bank or a trust company - a big mainland bank or trust company - under the Financial Corporations Capital Tax Act, they pay a small portion, a very small portion, of their business in the form of this capital tax. As a matter of fact, it works out to less than .002 per cent.

Now, what happens when you have a small company that wants to get into the trust business in Newfoundland and they are facing our capital tax? They would put up their $5 million capital and pay tax on that $5 million capital. That tax, at 3 per cent, works out to be $150,000. There was a little exemption there for $500,000 and 3 per cent on the exemption would be $1,500. You take the $15,000 off the $150,000 and you have $135,000.

So what we have done, in effect, is raise the exemption from $500,000 up to $5 million, thereby giving a tax saving of $135,000 to any company that is so affected.

I do not see anything wrong with that, because what we are doing is encouraging companies in this Province, or elsewhere, to set up small pools of capital in this Province that they can use. As I see it, the only way that we are going to haul ourselves up by the boot straps in this Province is to keep the money that is in this Province here in the Province, rather than send it off to the mainland to be invested in Ontario and BC and other parts. We have to keep our money here. We have to develop our credit unions. We have to develop local trust companies, and give them every possible break while they are small.

Now, as they grow bigger and bigger, and once they get over the $10 million cap we have here, then they will not fall under the protection of the $5 million exemption. As soon as they get $10 million worth of paid up capital, then they will pay taxes on the portion of their business that is in this Province; but until that time, they are getting a tax break. The rationale for that is that we don't have very many companies locally who are in the lending business, and I believe it is very important for us to encourage whoever it is - I don't care if it is Fortis or any other company -it is better for them to put their money in Newfoundland and keep it here.

Do we want to do like Nova Scotia does? Nova Scotia says: We will give breaks on financial capital tax if you are in our province. Do we want them to move up there? Do we want this trust company to move to Nova Scotia and develop Nova Scotia, or do we want to encourage companies that have money to keep the money here in this Province? I believe it will be good investment, a good thing for us to do, and it will be fair. We don't want our debt - we owe $5.2 billion, $5.6 billion - and most of that money is held outside the Province. This Province is owned - our debt is owned - by people outside the Province. We're owned by Japan, we're owned by Britain, we're owned by the United States, and we're owned by people in other parts of Canada. That's who we owe our money to. We owe very little to ourselves.

Whether or not an industry goes ahead in this Province is determined by banks, which are controlled from Ontario. How many times during this depression have I heard businesses say: boy, we can't get the banks to relent. The local manager is satisfied, but the guys in Ontario are opposed to it.

Now here we have an opportunity to have a trust company with its headquarters in this town, in this Province, with its people in this Province, who can respond to a large extent to the needs of this Province. I believe that's a good thing. We cannot expect banks, mortgage companies or other financial institutions in central Canada to develop this Province. We must keep our capital at home, we must encourage our capital to be at home, and we must develop our Province through the capital that is accumulated within this Province.

I have no problem, Mr. Speaker, in supporting this Bill. We are investing in our own future. I really resent the hon. Member for St. John's East when he brings up this petty, petulant, pettifogging ambulance-chasing attitude that he has about people who are trying to build up this Province. Thank you.

MR. SPEAKER: The hon. the Member for Mount Pearl.

MR. WINDSOR: Thank you, Mr. Speaker. I'm just going to take a couple of moments to address this Bill. The former Minister of Finance might want to make some comments about the Member for St. John's East, but I for one think the Member for St. John's East has certainly tipped the tip of an iceberg here. I think there's a great deal more that we would like to know but probably will not learn this afternoon before this Bill goes through, if it goes through this afternoon. There's a great deal more that we really should know about exactly what's happening here.

The first thing I have to address is the hypocrisy of what I just heard. The former Minister of Finance saying that we have to do everything possible to cause Newfoundlanders to invest in Newfoundland. That's the minister who cancelled the Newfoundland stock savings plan and the investment tax credit.

DR. KITCHEN: No good!

MR. WINDSOR: That's the minister who did that, Mr. Speaker. He says it was no good. He didn't do anything to try to make it work. It worked very well when we had it in place. Very popular program. Acclaimed by the investment community. It was on their request that we put it together. On their advice and in consultation with them that we put those two plans in place. The minister eliminated those altogether and now stands in his place and tries to downgrade the Member for St. John's East because he's attacking what the minister tries to put forward as a means of investing.

I don't think anybody disagrees with making it easier to invest in Newfoundland. I'm on record in this House many times of saying that we have to keep some of the $400 million or $500 million of investment capital that's going out of this Province every year, to keep it here in Newfoundland. It's going out in wheelbarrow loads. Through investment companies, through banks, through insurance companies, through pension funds.

I think - the minister may correct me, he may have an updated figure - but as I recall it was $400 million or $500 million a year, something of that magnitude, that's going out of this Province. Anything that government can do to keep some of that money in the Province we welcome. We supported Bill 47. I think we did. I wasn't here when it went through. But we supported that Bill, and so we should. To make it easier for people to invest in Credit Unions. So that the people are receiving some of the benefits. They're getting some of the dividends from that investment.

That's a different matter altogether than paying dividends to a private corporation that has basically a monopoly situation and whose profit is protected by the Public Utilities Board. It's a different ball game altogether. It may well be a fair thing to do here but it's under very suspicious circumstances that this piece of legislation comes before this hon. House. Very suspicious. I guess human nature kicks in here when we see who were former chairmen of the board and members of the board. I think we have to be a little bit suspicious. But I won't dwell on that. Maybe some other factors will come to light in due course.

This Bill, I think, gives a mechanism for only one corporation in the Province, Fortis Trust, as it happens. Now the government is telling us that's by circumstance. There happens to be only one company in this position, and no doubt that's true. As I understand it, in order to get CDIC coverage you must invest $10 million. So the company has invested $10 million or more. As a result of that they're paying taxes on that whole $10 million. Well, what's wrong with it? If they're earning revenues on the whole $10 million that's invested, why indeed should they not pay taxes on it?

Government chooses to give them a break on that. Government is choosing to reduce it - or to move the exemption from $500,000 to $5 million - which gives $135,000 to that company. Now this is a government which is going to come in here with a mini-Budget in two or three days time and tell the people of this Province that they have to re-trench, they have to tighten their belts another couple of notches. They're going to dump it on the backs of the public service of the Province. We're probably going to see reductions in services. We're probably going to see tax increases. We don't know.

The Minister of Finance and the Premier have told us that everything is up for grabs. We don't know what the impact of this mini-Budget will be. Yet the same government today is passing $135,000 per year back to a private corporation that's doing very well, thank you very much. Doing very well, and whose profits are protected. Those profits are protected.

There has to be a question. The profits of the parent company are protected, Fortis Trust, no. Fortis Trust are not. But Fortis Trust are competing with all others who don't have any protection and who are paying their taxes, as my friend for St. John's East I think pointed out very well.

AN HON. MEMBER: It's a cash cow.

MR. WINDSOR: It's a cash cow. Anyway you look at it it's $135,000 bonus for one private corporation, $135,000 bonus to the shareholders of Fortis Trust. That is the end analysis.

So, Mr. Speaker, there's a big difference between supporting Credit Unions, where the workers of this Province, where the middle-income earners of this Province can invest a portion of their money in their own private company and receive some share in the dividends. We've been encouraging co-operative societies in this Province for years, and they've been operating for many years, particularly in rural Newfoundland, and now getting into trusts and becoming very much in competition with banks. We also have to be careful I might say in allowing private trusts and credit co-ops becoming too competitive with banks. Unfairly competitive. I think we're a long ways away from that at this point in time.

So, Mr. Speaker, I'm going to leave it at that. Let me say that we don't agree with this particular piece of legislation. There are many questions we'd like to have answered. I hope perhaps the minister when he stands would try to address some of the questions that have been put forward.

MR. SPEAKER: The hon. the Member for Burin - Placentia West.

MR. TOBIN: Mr. Speaker, I'd like to have a few brief words on this piece of legislation as well. Like my colleague the Member for Mount pearl just stated, we've got reason to be suspicious of what's taking place in this piece of legislation. As the Member for Mount Pearl pointed out that time, I say to the Minister of Finance - and if you weren't listening you should read Hansard, because what the Member for Mount Pearl said was that we have reason to be suspicious about this piece of legislation. This is going to give protection -

AN HON. MEMBER: You don't understand it.

MR. TOBIN: Well, probably I don't understand it, I say to the Minister of Finance. But I'm not sure you understand it either. Because you did not sit on the board of directors of Newfoundland Light and Power or the board of Fortis Trust. So if you had to sit on the board of Newfoundland Light and Power, or if you happened to be past chairman of the board of Newfoundland Light and Power, or if you happened to be an immediate past director of Fortis Trust, then you would understand it. If I had been in the position I would have understood it.

I would like for this minister to tell the House who drafted that piece of legislation and who initiated that piece of legislation to come before this House. Because, Mr. Speaker, I can smell a rat. I can smell a rat right in the middle of this. Why is this government today, why is the Minister of Finance, Mr. Speaker, involved in fearmongering in this Province? Why is the Minister of Finance, day in and day out, telling the people of this Province that he is looking at a rollback when he has no intention of rolling back wages, Mr. Speaker? He is going to try to get the teachers, the nurses, the doctors, the social workers and all the public service in this Province, on Friday or Monday, to stand up and say: Thank God for nothing. He is fearmongering to the heights, Mr. Speaker.

At the same time he is bringing a piece of legislation before this House for his buddies, for the conflict of interest Minister of Justice who had to sit in the galleries, and the Premier who is in a conflict of interest on this piece of legislation, and asking us to approve a piece of legislation that is going to give Fortis Trust, the richest corporation in this Province, a licence to print money on the taxpayers' backs through Newfoundland Power, and give them a $5 million tax holiday. At the same time he is freezing the wages of public servants in this Province. That is what is taking place, I say to my friends opposite.

AN HON. MEMBER: (Inaudible).

MR. TOBIN: The President of Treasury Board, Mr. Speaker, says that I don't understand it. Probably I don't understand it, but I can tell you one thing, I understand who was the former Chairman of Newfoundland Power. I understand who just came off the board of Fortis Trust. I understand who is in a conflict of interest in this piece of legislation. Because, Mr. Speaker, yesterday the minister admitted he was in a conflict of interest, and asked to have it put into the record where he removed himself from the House because of his conflict of interest.

How can we, the taxpayers of this Province, be expected to have the Newfoundland Government subsidize Fortis Trust? Because, indirectly, that is what is taking place, I say to the former Minister of Finance. A $150,000 tax break for the people of Fortis Trust when, at the same time, Mr. Speaker, there are people in these galleries today who have problems with their homes, can't get repairs done to their homes in this Province, who have been surrounded by policemen because they visited certain offices trying to get some work done, trying to get some repairs to their homes. This government today will ask the taxpayers of this Province to look after Fortis Trust to the tune of a $5 million tax holiday. The former Minister of Finance can shake his head all he likes.

Mr. Speaker, Fortis Trust, as I understand it, has just recently purchased the Royal Trust Building.


MR. TOBIN: They haven't?

AN HON. MEMBER: (Inaudible).

MR. TOBIN: Fortis Inc. have purchased the Royal Trust Building - okay - where Fortis Trust will, no doubt, operate from because it is was purchased for that reason, Mr. Speaker.

What is happening today, we have seen it - my friend, the Minister of Industry, Trade and Technology was reading a newspaper article from the Burin Peninsula dealing with an investigation into ACOA. People are concerned about what is happening down there, because of what is taking place and why they cannot receive funding, and because of the involvement of ACOA in the tourism division or whatever group they have mentioned there. They are concerned about ACOA, in particular, treating them unfairly.

How can we expect trust companies in this Province not to react the same way, to this piece of legislation? How can we expect someone working for the government today, making $15,000 and $17,000 a year, to take a wage freeze for the third consecutive year, when this government is prepared to give a $5 million tax holiday to Fortis Trust, how can that be expected, Mr. Speaker? Yes, you can laugh all you like because that is what it is. It is a $5 million tax holiday and the Member for St. John's East pointed it out today, and as my colleague the Member for Mount Pearl pointed out, is that we have reason to be suspicious, a $150,000 grant basically, yes I would say to the former Minister of Finance, basically a $150,000 grant, being written off to one of the riches corporations in this Province.

I will say to those members opposite how can you in all honesty stand in this House, whenever that Bill is going to be called to be voted on, and vote to give a grant to Fortis Trust for $150,000 when at the same time you are asking people working for this government to freeze $15,000 a year wages? I hope that members opposite will stand up and be counted on this one. I would like to see the member, Mr. Speaker, for Port de Grave stand up and be counted on this. How can he see people today, as a former Minister of Social Services, when houses that need repairs, people with no doors and windows, snow and rain blowing through, and this government turns around and says: we have no money to do it, we ran short of money in June. Now there is a piece of legislation here to give Fortis Trust a grant of $150,000 or a $5 million tax holiday and how can one not help question the fact that the minister, the Government House Leader, the Minister of Justice is in a conflict of interest position.

AN HON. MEMBER: (Inaudible)

MR. TOBIN: I said that, I said it earlier, he declared it. I asked to have it tabled and he left the chamber. I said that but that makes me even more suspicious to know that the Minister of Justice in this Province has declared he is in a conflict of interest position, has left the chamber, Mr. Speaker, has left the chamber while it is taking place and the Premier, a former chairman of Newfoundland Light and Power -

AN HON. MEMBER: (Inaudible)

MR. TOBIN: It is the same thing, it's all tied together, I will say to the former Minister of Finance - what is that?

AN HON. MEMBER: (Inaudible)

MR. TOBIN: Mr. Speaker, all I would say is that if they are talking about plots, I would sincerely hope that many of the members opposite have picked out their political plots because it is coming as soon as the Premier has the courage to go to Government House and ask for the writ to be issued. So, I would suggest that you go get your plots, your political plots rather quickly because what will cause you to be politically buried in this Province, Mr. Speaker, is pieces of legislation like we are asked to approve, to give Fortis Trust a $5 million tax break and not repair a home for someone on social assistance. That is what will cause you pain and agony and a political funeral, Mr. Speaker.

How can you turn around to the public service in this Province today and say we want to roll back, as the Premier tries to say and the Minister of Finance tries to say, we are going to roll back your wages when they have no intention of doing that, no intentions, Mr. Speaker, of doing that, it is fearmongering on the part of the government to get everybody to say: oh, we only got a wage freeze, thank God, that is the plot, that is the plan. When they are prepared to freeze the wages of a civil servant today making $15,000 and to give Fortis Trust a tax break of $150,000.

AN HON. MEMBER: (Inaudible)

MR. TOBIN: People in the civil service today, oh yes, a lot of them. How can the Member for St. John's South go to his constituents today and say: I just approved a grant for Fortis Trust of $150,000, or a tax holiday for $5 million when at the same time these people will not have anything. How can the Member for Eagle River, Mr. Speaker, when the people down in Cartwright do not have a piece of equipment to clear the roads this Winter, stand up

in this House and approve a $l50,000 grant for Fortis Trust, when they can't clear the roads in Cartwright? How can the former President of the NTA in this Province, a man who called a strike on issues far less severe to the membership than what we have today, how can he ask them for the third consecutive year to freeze their wages? I attended a meeting of teachers in my district last week and one of the questions that was raised in that meeting, when you look at the example of the two former Presidents of the NTA, the Minister of Environment and Lands and the Minister of Employment and Labour Relations, the teachers asked if there was any way before the next general meeting of the Newfoundland Teachers Association there could be some resolution brought in where presidents could not run for a period of time after they served as presidents.

AN HON. MEMBER: (Inaudible)

MR. TOBIN: That is true. The teachers felt they have been used by the Member for Conception Bay South and the Member for Exploits.

MS. COWAN: They never had it better when the two of us were presidents they never, ever -

MR. TOBIN: Mr. Speaker, the Minister of Environment and Lands says they never had it better than when the two of them were president. I can say to her they never had it worse since the two of them have been part of the provincial cabinet.

MR. CRANE: (Inaudible)

MR. TOBIN: Mr. Speaker, if the Member for Harbour Grace wants to stand up and say something I will certainly take my seat, if he wants to debate this piece of legislation. How can the Member for Harbour Grace shout across this House and give a $150,000 grant to Fortis Trust and nail the teachers, the nurses, and the civil servants in his district with a tax freeze for three years? That is what I say to the Member for Harbour Grace. Stand up and state your position on grants to Fortis Trust.

MR. MURPHY: (Inaudible)

MR. TOBIN: I do not know what the Member for St. John's South said.

MR. MATTHEWS: It is not sensible for sure.

MR. TOBIN: He could be talking about one of his colleagues. Mr. Speaker, when communities in this Province of Newfoundland and Labrador have to go without snow clearing because of no equipment how can their representatives stand in this House and vote for a $150,000 grant for Fortis Trust? That is the question I would like to have answered. How can the Member for Eagle River sit in this Legislature? Probably the people of Cartwright should know about that. He got on the radio and announced how he had met with the Minister of Works, Services and Transportation and had found a solution. A few days later I listened to the radio one morning and heard the mayor or somebody from Cartwright.

MR. DUMARESQUE: All the Tory candidates in the next election.

MR. TOBIN: I can tell you one thing the Tory Party is not having difficulty finding candidates in any district, I say to the Member for Eagle River.


MR. TOBIN: We have a candidate in Port de Grave. Mr. Speaker, we had the opportunity to have three but we said no to one.

SOME HON. MEMBERS: Hear, hear!

MR. TOBIN: Mr. Speaker, I do not know why the Member for Port de Grace is reacting the way he is. I said we had the opportunity to have three and we would not take one. Why did he say I did not want to be the one? The furthest thing from my mind was the Member for Port de Grave, I say to the hon. member. When I made that statement, the furthest thing from my mind was the Member for Port de Grave. Now he has made me suspicious, because it is obvious that -

AN HON. MEMBER: (Inaudible).

MR. TOBIN: Now he has made me suspicious because there must have been someone who said no to him, and I know nothing about it. I hope it was not my colleague from Grand Bank, Mr. Speaker.

MR. EFFORD: (Inaudible).

MR. TOBIN: I hope it was not my colleague from Grand Bank who said no to the hon. member - or I hope it was, I should say.

I do not know why he reacted the way he did. I am at a loss to figure that one out.

Mr. Speaker, I say to all members opposite -

MR. EFFORD: (Inaudible).

MR. TOBIN: Mr. Speaker, I say to the Member for Port de Grave not to take it all seriously, because in the last election the Premier came on the Burin Peninsula and introduced one of his star candidates, he said, and it is the first time ever that the Liberals lost their nomination fee in the district of Burin - Placentia West. So I say to the Member for Port de Grave, do not take it all seriously.

There are some of us in here, like myself and the Member for Port de Grave, with fairly huge majorities, and you have other people in here by one vote. The interesting thing is that the person with one vote is more cocky than myself and the Member for Port de Grave put together. That is what is surprising. The person with one vote is cockier than myself and the Member for Port de Grave put together. So I would say that come next the election - two votes.

MR. EFFORD: I tell you one thing. We can increase his majority right now (inaudible).

MR. TOBIN: Actually that is fact, because there are not enough voters in my district for that to happen.

MR. TOBIN: That is right. He almost got them all.

AN HON. MEMBER: (Inaudible).

MR. TOBIN: I had a 3,700 vote majority, Mr. Speaker, but the people have had that before. You do not take anything for granted.

Mr. Speaker, I would say to the Minister of Finance that he does not know what he is talking about. He did not know what he was getting involved in when he was asked to introduce this piece of legislation. The Minister of Finance did not know what he was getting involved in when he was asked to introduce this piece of legislation.

I just wonder, Mr. Speaker, how some other people would react if they were in this Legislature today, when people in the districts from Cape Chidley to Cape Race are being asked -

MR. EFFORD: Where is Cape Chidley?

MR. TOBIN: Mr. Speaker, I know where Cape Chidley is, and I am sure my colleague from Eagle River knows where Cape Chidley is. I have never been there, but I tell you, I fished off Cape Race, unlike the Member for Port de Grave.

MR. EFFORD: Give us the co-ordinates to get to Cape Chidley.

MR. TOBIN: What?

AN HON. MEMBER: The co-ordinates.

MR. EFFORD: Come on, give us the co-ordinates to Cape Chidley.

MR. TOBIN: Mr. Speaker, to be honest with you, I would not know the course to get to Cape Chidley.

AN HON. MEMBER: (Inaudible) boat.

MR. MATTHEWS: You have not been out in a boat yet when they have not had to come looking for you.

MR. TOBIN: Mr. Speaker, no one ever came looking for me. I would not know the course to get to Cape Chidley, but unlike the Member for Port de Grave, when I got out there I would not have to radio in for someone to come and bring me in, I say to the Member for Port de Grave. I would not have to do that.

I have been out there before. As a matter of fact, there is a portion of the Grand Banks that bears the name of Tobins Point, as the Member for Port de Grave knows all about.

My colleague and friend, the Minister of Fisheries, had a lot to do with that being named, I say to the Member for Port de Grave. The Minister of Fisheries probably played the major role in having that place designated in memory of my late uncle who fished there most of his life.

AN HON. MEMBER: That is not true.

MR. TOBIN: Yes it is true.

MR. EFFORD: When was that?

MR. TOBIN: When was that, Walter? Three years ago?

AN HON. MEMBER: (Inaudible).

MR. TOBIN: Anyway, I say to the Minister of Finance, as I clue up with the few comments I have on this, be truthful to the Legislature, and tell me whether or not you had any discussions on this piece of legislation with your colleague, the Minister of Justice, inside or outside the House, or if the Premier put any pressure on you as a former chairman of the board of Newfoundland Light, to have this piece of legislation approved, and whether you are acting of your own free will or whether you are acting under pressure to ask the taxpayers of this Province, at a time of fiscal restraint to make a grant available to Newfoundland Trust for $150,000?

MR. SPEAKER: If the hon. minister speaks now, he will close the debate.

The hon. the Minister of Finance.

MR. BAKER: Mr. Speaker, I enjoy following the Member for Burin - Placentia West. He always entertains me when he speaks and you never know what he is going to say.

Mr. Speaker, in principle, what is happening here is that we are making it easier for small trust companies to set up in competition with banks and trust companies that exist in this Province. By and large these banks and trust companies are mainland operations, big operations that come in here and are really under direction from outside the Province.

When the act was done, when the Bill was originally done, I do not think there was any thought of smaller trust companies setting up; I really believe that there was no thought of that, and it was done in terms of these large conglomerates and large banks that do business in this Province, that allocate a percentage of their paid-up capital to this Province for tax purposes, dependent on the level of activity, and the $10 million figure and the $5 million figure and so on were kind of meaningless in those terms because these large operations are well beyond these lower limits. However, Mr. Speaker, it was not realized by the government at the time that this would inhibit the growth of the small trust companies and it would do it in this way.

There was built into the legislation a $500,000 amount that was deducted from the paid-up capital and then the taxes were paid on the rest. If a company had $100 million paid-up capital and that type of activity in the Province, then $500,000 would be deducted from $100 million and they would pay 3 per cent tax on the rest. A small company tries to get started in that field, and let us say they have enough activity out there and loan enough money and so on, that normally they would be required under the normal percentage basis, to have let us say, a couple of hundred thousand dollars paid-up capital, then you would think they would be exempt, there is a half-million dollar exemption, you would think they would be exempt.

But, no, Mr. Speaker, they are not, because of another part of the legislation, another requirement, which requires that before the guarantees are given, before the guarantee corporation will guarantee deposits with this trust company, they must in fact have the $5 million capital tied up, so, Mr. Speaker, what happens is, if they have enough activity in the Province to require only $200,000 paid-up capital, they would have to pay taxes on $4.5 million. This in effect meant, that we were penalizing ten times, twenty times, thirty times the development of small companies over and above what we were doing at a percentage basis to the large corporations. This was patently unfair, Mr. Speaker.

This was pointed out to us when one small trust company tried to set up business, it was pointed out to us. They came to us and indicated the difficulty in getting into this kind of business in competition with the banks, and after proper examination of a couple of years, we have concluded that in fact the act is an impediment to the development of small local trust companies developing in this Province, circulating money in this Province and investing in this Province. It was a serious impediment to the smaller companies, so this particular amendment will take care of that situation and will ensure that it is possible for small companies to develop in the Province, and when they reach the point where they have a large amount of money - large by my standards, small by trust company standards - then they end up paying the full tax.

Mr. Speaker, that is the purpose of this particular amendment. That is the principle of it, and it applies to all small trust companies. The details obviously will be debated in committee stage so I am very pleased, at this point in time, to move second reading.

SOME HON. MEMBERS: Hear, hear!

On motion, a bill, "An Act To Amend The Financial Corporations Capital Tax Act," read a second time, ordered referred to a Committee of the Whole House on tomorrow. (Bill No. 52).

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

MR. ROBERTS: Mr. Speaker, now that I am allowed back in the game after my penalty time, my learned friend -

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: I am sorry?

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: I will try again now.

MR. SPEAKER: Order, please!

MR. ROBERTS: My hon. friend, the Minister of Finance, has some meetings outside and has asked if perhaps we could deal with some bills that are on the Order Paper in my name, which are entirely routine, I say to my hon. friend from Grand Bank.

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: Mr. Speaker, I say to my hon. friend from Grand Bank that these are further on the list I gave him. He has every right to object.

I would ask if we could deal with the - depending what time they want - such major bills as the Anomalies And Errors In The Statute Law, which is a major bill; The Leaseholds In St. John's Act, which is a one word bill; and The Residential Tenancies Act which is a little more substantial.

Now if my hon. friend objects, as he has every right to do, then I would carry on with the bills that stand in the name of the Minister of Finance; but my friend has to go to a meeting.

AN HON. MEMBER: (Inaudible).

MR. SPEAKER: The hon. the Opposition House Leader, for the purposes of Hansard.

MR. MATTHEWS: I just want to see if the Member for Humber East is in the Common Room. If she is, she will be in and we will deal with them. If not, we will proceed with the finance bill.

AN HON. MEMBER: (Inaudible).

MR. MATTHEWS: She should be here in a second.

MR. ROBERTS: While my hon. friend is consulting with his colleague, perhaps we could call - somebody has taken my note, I must tell you, Mr. Speaker.

How about Order 21, An Act To Amend The Gasoline Tax Act. All I have to do is find my hon. friend's briefing notes.

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: Okay, we will do that, and we may never get off that, or we may. That is up to...

Mr. Speaker, if Your Honour will call the bill I will...

Motion, second reading of a bill, "An Act To Amend The Gasoline Tax Act". (Bill No. 49).

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

MR. ROBERTS: Mr. Speaker, this is a very short Bill. The sole purpose of it is to reduce the tax on auto propane. The House will note that if adopted this Bill is considered to have come into force on August 17, 1992. I believe there was an announcement made at that time by my colleague. Probably the Minister of Mines and Energy would have made an announcement at that time.

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: I am sorry?

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: Joining with the Minister of Finance, they sort of held hands and together made the announcement.

Mr. Speaker, I have a few very brief comments on this.

The purpose of the Bill is to reduce the gasoline tax rate for automobile propane - for propane used to fuel automobiles - from 13.7 cents a litre to 7 cents a litre. The reduction is in support of a joint pilot project by the Government of Canada, the Government of Newfoundland and Labrador, and by industry, with the intention of seeing whether there is a market in this Province for automobile propane.

It is a five year pilot project which involves the conversion of approximately 2,200 vehicles to propane or to dual fuel - gasoline and propane. It is estimated that ten new jobs will be created in the first two years of the project, and that on a long-term basis a total of sixty-five new jobs could be created. There is more good news even than this.

The development of an automobile propane market in the Province would provide local access to a cleaner, less expensive transportation fuel, and it is hoped that the main source of propane would be the Come By Chance oil refinery.

In my understanding, and I claim no technical knowledge, and I will bow and acknowledge any hon. member who has technical knowledge in this field, because I do not - that propane is one of the by-products of taking a barrel, or a gallon, or a liter of crude oil and cracking it into it's components. So we have a situation here where the propane could be produced out at Come By Chance.

MR. MURPHY: The waste is burning off (inaudible).

MR. ROBERTS: My friend for St. John's South makes the point that it is now being just flared off, burned off as waste and when we drive the Trans-Canada it is often a beacon of light, because as you are going from Whitbourne on out through the Isthmus and on up into Clarenville and on along the Trans-Canada, many days when there is any fog in eastern Newfoundland, it is found there and the flare is a bit of a beacon. Maybe we can at least reduce the flare and use the energy created by propane to power vehicles.

I am told too, Mr. Speaker, that the conversion to propane is of particular interest to owners of taxis, vans and similar high mileage service vehicles. I gather the cost of conversion is such, I believe there is federal and provincial assistance or federal assistance to convert, but the cost is such that unless you use a high volume of fuel because you drive a great number of kilometres, it may not justify the extra cost of converting your engine to propane. So I will move second reading; it is a very straightforward piece of legislation, as always, it can be used as a springboard if hon. members wish to, but I will listen to whatever is to be said and will respond when we come to close the debate. I move second reading of the Bill, Sir.

MR. SPEAKER: The hon. the Member for Mount Pearl.

MR. WINDSOR: Mr. Speaker, the minister is quite right, this is a very routine piece of legislation and we support it in fact because what it does is make it possible to convert to propane. The minister may well know that in many parts of Canada, particularly in western Canada, taxicabs are normally fuelled either by propane or natural gas, and you will find that you cannot get your luggage in the trunk of the car because these great cylindrical tanks have been installed in the trunks of the cars. But for them, where the price of natural gas is so low because it is so readily available to them and the price of propane, it is a very economical means of operating and as the minister said, for those who expect to put high mileage on their vehicles, it is worth the cost of conversion.

If I am not mistaken, I think you can now buy vehicles that are already designed for propane, so in the future it may well be a means of reducing the cost of transportation. In addition to that the environmental implications are far better, the emissions from propane fuelled vehicles or natural gas fuelled vehicles I am told, are not nearly as detrimental to the environment as through normal gases, even the unleaded gasolines which are greatly improved.

So, Mr. Speaker, it is a positive step, we support it; it is a minor reduction. We regret only that the minister is not reducing the tax on all gasoline so that we can all share a break, that would be a great advantage. We understand the problems the government is faced with but in a Province, which by its very nature because of the geography, because it is such a large Province and the density of population is so low in comparison with other parts of Canada, we have so many miles of road per capita by definition, therefore we tend to be forced out of necessity to drive larger distances per capita than many people in Canada, although we are not forced to commute like those who unfortunately live an hour-an-a-half drive outside cities like downtown Toronto. God help us, Mr. Speaker, I could never survive it.

But nevertheless, it would be a great benefit to Newfoundlanders and to the economy; to the cost of transportation because transportation is such a big factor in the cost of goods and services in this Province. It is such a factor in the cost of living in this Province, in the cost of doing business in this Province. If this government could see its way clear in its mini-budget in two or three days time, to reduce the tax on gasoline, to at least make us competitive with other provinces of Canada. One immediate side benefit, Mr. Speaker, is that one must consider that 90-odd per cent almost 95 per cent I think of all goods coming into this Province today are coming by road now, coming by road, hence the incredible pressure on our Trans-Canada Highway, Mr. Speaker. I think the suggestion is being made in other parts of Canada that the federal minister may well on Wednesday night, tomorrow when he makes his statement, may well initiate a major building program for roads across Canada.


MR. WINDSOR: My friend for Eagle River says, right on. No doubt he is thinking of the Trans-Labrador Highway and I support him fully in his efforts to get the great Trans-Labrador Highway built. It would be a great benefit to Newfoundland and Labrador if that program is put in place. I support the concept that is being set up, perhaps a toll charge, perhaps there will be a toll charge, a user-pay to some degree at least to help support that expenditure. There are some benefits to be derived from that, Mr. Speaker. The bottom line is what we need to do is to equalize the cost of doing business in Canada.

I reject outright the concept that I am hearing now across Canada in the national forums of a total user-pay, of eliminating the subsidy, for example, on the CN ferry that brings goods and services into this Province. That would be highly detrimental to particularly the peripheral regions of Canada which again by definition unfortunately appear to be the underprivileged and underdeveloped regions of Canada. Something of that nature would be highly detrimental. Instead we should be looking at measures such as this one. Reduce the cost of transportation, particularly in those areas that depend so highly on transportation and whose economies are so greatly influenced by the cost of transportation. Perhaps the Minister of Finance could do something in that regard on Friday when he brings down his statement.

MR. SPEAKER: If the Minister speaks now he closes the debate.

MR. ROBERTS: If nobody else wants to speak I shall close the debate by simply saying that I agree with part of what my hon. friend for Mount Pearl said.

MR. WINDSOR: (Inaudible) be nervous.

MR. ROBERTS: I can only second his remarks, that if he and I ever agreed on something the whole country should be nervous and not just the gentleman and myself. I shall make sure that my colleague is made aware of the desire for a reduction in gasoline tax. I can only say that nobody in this House would second that any more enthusiastically that I would should that be the case.

I move second reading of the bill, Sir.

On motion, a bill, "An Act To Amend The Gasoline Tax Act," read a second time, ordered referred to a Committee of the Whole House on tomorrow. (Bill No. 49).

MR. ROBERTS: I gather that hon. members opposite are prepared to deal with one or two of the very minor justice bills. Perhaps we could do No. 30 of these, the St. John's Leasehold Act Amendment.

Motion, the hon. the Minister of Justice to introduce a bill, "An Act To Amend The Leaseholds in St. John's Act, carried. (Bill No. 57)

The hon. the Minister of Justice.

MR. ROBERTS: This Bill is a very simple one. It would amend the piece of legislation called the Leasehold in St. John's Act by changing the figure 1992 in Section 5 (1) of that Act to the figures 1994. There is a little more to it than that so perhaps I could take just a couple of minutes. The Leasehold in St. John's Act was adopted if memory serves me, and I say to my friends opposite I was not here at this time, back in about 1921 or 1922. England at that stage, not the United Kingdom but England moved to reform its real property law and the Legislature of Newfoundland a year or two after that adopted the reforms.

One of the reforms addressed a practice which had grown up in English law over the years and developed by conveyancers, a very peculiar brand of legal animal indeed. They had gotten into the habit of using long-term leases for building purposes. Not a lease for commercial purposes or a lease of rental of property, the one of which we are all familiar, but long-term leases. In fact one used to see them drawn for 999 years. Here in St. John's in the older part of the city, the area I guess South of LeMarchant Road, West of Cochrane Street and East of say Road-De-Luxe, no a little further East, maybe the Cross Roads, but in the older part of St. John's there were a lot of leasehold interests. A lot of people who had built homes -


MR. ROBERTS: If my hon. friends are finished I will carry on. A lot of leasehold interests, a lot of bits of land, parcels of land on which people had taken 99 leases after the fire. In 1892 they had built these leases with very small ground rents and most of the freeholds were held in England.

Well, the legislature did two things, it provided that the holders of non-commercial leases -

MR. DUMARESQUE: (Inaudible).

MR. ROBERTS: If my friend from Eagle River would permit I will carry on.

Secondly it provided that if the owner of the reversionary interest would not convey the freehold title the registrar of the Supreme Court could do it. That Bill was brought in, there was a time limit on it, that time limit was extended I think in 1977, if memory serves me, up to 1992 which is the 100th anniversary of the fire but also the time when the ninety-nine year leases by and large ran out, if they had not already been converted into freeholds. Now, Mr. Speaker, a couple of years ago the St. John's Council and others became very interested in this problem, developed quite a large report that addressed two issues: the first is whether we should change the general format of the legislation and the second is whether we should expand the area, to take in an area beyond the traditional leasehold of St. John's area, which as I said, is the older part of the City of St. John's.

I have not read the report, but at least I have seen it, I know it is in the department, I have not had a chance to address it, neither of my predecessors did. I am not sure when it was received, whether it was during the time when my friend for Humber East was Minister of Justice or whether it was during the time when my friend from Bonavista South was Minister but anyway we have not got the grips of it and to be quite candid about it we are not going to be able to in the next little while.

Rather than see the legislation run out at the end of December, at which stage people would lose their right to convert the leasehold into a freehold, we are asking the House to give us another two years. Well before that is over we shall be back, the optimists on the other side say they shall be back but somebody will be back standing in this House as Minister of Justice to address this issue, one would hope, with a permanent solution. So that is all the Bill is, it is simply a matter of asking the House to extend by two years - it is hardly a radical departure, the legislation has been in effect for about sixty-five or seventy years, it has caused no real hardships but it is now time to look at it and bring it to an end. With that said I will move second reading and should there be points that I can respond to, I will deal with them whenever we come to the end of the debate.

MR. SPEAKER: The hon. the Member for Humber East.

MS. VERGE: Thank you Mr. Speaker. I have no hesitation in supporting this Bill. The minister introducing it said it is a simple measure, it is that, but it addresses a very thorny problem, a problem that has eluded many lawyers. The first remedial measure was brought in in the mid to late 1980's and it was known among the Cabinet of the day as the Bill Marshall Legislation. This essentially extends on Bill Marshall's Bill by buying the government another two years, within which I would hope that members on both sides of the House will pool our collective wisdom and come up with a solution to the problem. So, Mr. Speaker, I have no problem supporting this Bill. I understand one or two of my colleagues who represent St. John's or St. John's area districts may want to have a few words about this.

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

MR. R. AYLWARD: Thank you very much, Mr. Speaker. I just have a few words to say about this, Mr. Speaker, this issue has been around for quite some time as the Minister of Justice has already said. The Minister of Justice did not give us a very good explanation of it but I do not understand why this issue cannot be resolved. I know there is a problem with absentee landlords involved with these leases. Probably I should declare a conflict because I did some surveys of these leases. I do not know if that is necessary or not but I did survey some of the land that is involved in the inner city that had some of these leases on it and the people who owned the homes brought out the leases for whatever the conditions were in the Bill that the former Member for St. John's East brought to this House of Assembly which allowed people to buy it out for twenty times the yearly lease.

So that allowed people to buy back the leases and it was at a reasonable price, it is not overly expensive. Certainly, it is cheap for the price of land in St. John's. But I don't understand. Is it because people can't afford the rest of the cost of doing it to get their land? The survey cost would be fairly significant if this is (inaudible) legal fees would be -

So, if someone is going to tackle the problem, either the City of St. John's or the Department of Justice, whoever is going to do it, these are the items that you have to look into. It is not just the lease, the old lease, and extend it for another two years, that will just put it down a bit further in time. Things will be more expensive in two years time and it will be harder then for whoever owed the houses on this land to be able to get it.

I am not sure what is in the study that the Minister of Justice said the City of St. John's had done. I didn't see it. I would certainly be interested in seeing a copy of it once it has been dealt with. I suppose your department has to deal with it first. I would like to be able to see it. This does not affect my district - that is, the district of Kilbride. I don't represent older parts of the city. St. John's South, probably, St. John's Centre mostly, would have quite a bit of this leasehold land within their district. I guess, St. John's Centre, in the area of the Basilica - there would be quite a bit of it up there. That is where most of it was.

I know, one time, the St. John's Housing Corporation used to do the same thing. They would do the same leases, ninety-nine year leases on the properties up around Churchill Park.

MR. ROBERTS: Nine hundred and ninety-nine years.

MR. R. AYLWARD: Nine hundred and ninety-nine years was down in the - what do you call the area? - the Newfoundland Drive section of, oh, near Pleasantville anyway, that subdivision was down there near Pleasantville. There were ninety-nine year leases on that.

MR. ROBERTS: (Inaudible).

MR. R. AYLWARD: Well, the northeast was the older part, yes, and then they went on to - Virginia Park, I think, is the next section. They had old leases. But I believe all of those leases now have been discontinued or passed over to freehold title, converted to freehold. So that problem was solved. It wasn't a great lot of expense, not a great problem to do that, so it shouldn't be too much of a problem to do the rest of it, once you find out who owns the land. That used to be the problem, finding out who owned the land. I don't know but that you could almost do it through quieting of titles. It would be expensive.

AN HON. MEMBER: (Inaudible).

MR. R. AYLWARD: You can't? - put a notice in the paper, you're claiming the land.

MR. ROBERTS: (Inaudible) somebody owns it.

MR. R. AYLWARD: Yes. If you put a notice in the paper that you are claiming the land, and you are claiming it since 1945 when you built your house on it, you might get away with it, you might get a shot at it.

Anyway, there has to be a solution to it. I mean, people have their homes on this land that they don't own, and nobody is going to take the land back as long as we keep extending this by two years at least. One of these years that we don't open the House of Assembly, we might have to extend it retroactively. The day that you miss it is the day that those landowners are going to pop up - bang - and sell the land out from under whoever has it, immediately, and get what they think is their fair value for the land.

So, the issue has to be dealt with, and that should be as soon as possible. But rather than extending this by two years, I would like to see the act say that we will extend it for the amount of time necessary to deal with the problem, and leave it indefinite. Then nobody can come in some day - if there happens to be an election ongoing at the time it comes due, or the business of the House of Assembly then, is more important than the matter of dealing with this, you would not get caught in a bind where this is going to actually run out.

I don't know what the legal implications would be, but if that wording, instead of two years, were to read that this would be in effect until the Department of Justice -if that is the way it should read - has time to deal with the problem, or the City of St. John's has time -

AN HON. MEMBER: (Inaudible).

MR. R. AYLWARD: No, it might never get dealt with if we do that. That is a possibility, but it is not a great concern if it never did, because the people who are there will stay there. I know they would probably like to get good title on their land, the same as everyone else who is paying for a house and would like to have freehold title to their land when they get it.

Mr. Speaker, this is just a suggestion that I make, that we could remove the two years wording and have some clause put in there to say that this will stay in effect indefinitely, or stay in effect for the next fifteen years, if necessary.

Thank you.

MR. SPEAKER: The hon. the Member for St. John's South.

SOME HON. MEMBERS: Hear, hear!

MR. MURPHY: Thank you, Mr. Speaker.

Just a few words on this particular bill, because I share some of the concerns that my colleague from Kilbride does.

From personal experience in my district, some people have been involved in leasehold land for a number of years now, and I suppose people who want to change and/or repair and spend a lot of money and so on, on their houses in the older part of the city, that are situated on leasehold land, are always sceptical. And it causes problems when we see certain parts of the older inner core of the city start to deteriorate. These people are reluctant. They are a little bit hesitant, obviously, to get involved, because they don't see any sense in putting a whole lot into it, not having clear deed and title to the land that their house is sitting on.

I am sure all members can share that concern. I mean, none of us would want to own a house sitting on leasehold land under a ninety-nine year lease, without being able to improve or change the situation.

So the Member for Kilbride makes a lot of sense when he says that perhaps just updating the bill from 1992 to 1994 is really not going to solve a whole lot. I think perhaps we should put our heads together, look at this and try to find a better way of solving the leasehold land problem in the city. It may require some legal counsel. I am sure my colleague, the Minister of Justice, could very probably find some kind of a firm to sit down and unravel this problem that exists in the older core.

The other situation, Mr. Speaker, that it leans on - and we have to be very careful - is development. Now there is a tremendous amount of concern for development that may cross over in the leasehold land. The old railway station - it was my understanding that once the Federal Government abandoned the railway in the Province, all the lands associated with the railway would go back to the Province. Now, I am still enquiring about that. I think that where the old railway station presently sits, and all that adjacent land, does not belong to CN, because CN has abandoned that land, as such. We don't have a railway anymore. So, in essence, what we are saying is, that land should revert to the people of the Province.

So that is another concern. There are older areas now - there are talks at City Hall that there may be, down in that core where the old Horwood Lumber Company used to be, some leasehold land, and they may be looking at that particular site to develop - God knows, we need all the development we can get - a civic centre to handle activities, not only for the citizens of St. John's, but for the citizens all around the surrounding areas. It would be an ideal place, when you think about the fact that you come right down off the arterial road. Adequate parking, hotel facilities, a downtown core itself and what have you, could certainly benefit and everybody of course could benefit from that kind of a development. The problem is that I think the City itself is now, as it moves out to do it's study on that particular project, is bumping and running into leasehold property that is obviously going to cause some concern.

Now, perhaps even better than the suggestion from the Member for Kilbride in extending the time frame on this, that we should try and rectify this and I do not know the legal way to do it, but I am sure there are members here who work in and out of that profession - some people have not made their minds up whether they are going to stay in the profession or get out of it - but I am sure there are some people here who work in that profession who might very well give us a better idea as to what we need to do to clear up all of these old leasehold situations that are causing a tremendous amount of inconvenience to the City, to residents of the City and you know, to get it cleared up because there is a commercial intent I would say and what this Bill does, Mr. Speaker, it extends the term of noncommercial leases, so we may be shooting ourselves in the foot, if we are not expedient about this particular problem and address it, look at it and try and unravel it.

I do not know, again as I said, I have no idea but I am sure that there is still a tremendous amount of families and what have you who live throughout the British Isles, primarily in England, who probably, for some reason do not even know that their forefathers owned land here in the capital city and it has died on the vine. Maybe we will have all kinds of difficulty in trying to find the families who really do have deed and title or should have deed and title to certain pieces of property in the City, so I would suggest, Mr. Speaker, that it is a very light Bill as such and what have you, but certainly we do ourselves well, if we in the House of Assembly find time to resolve this.

I mean the time has come, it is 1992, and if we are going to have development not only in St. John's but all over the Island, but particularly in St. John's, in my district, in St. John's Centre, and I am sure the Minister of Health recognizes tremendous problems associated with leasehold land in his district where a great amount of it is, on Barters Hill and all those areas, that if we are going to have development and if we are going to have some improvements and what have you, then surely what we need to do is to find out -

AN HON. MEMBER: (Inaudible).

MR. MURPHY: Well the Member for Kilbride has surveyed just about half the City. I can honestly say that. It is no wonder we are in such a snarl. It is no wonder we cannot find a peg.

Mr. Speaker, I could go on for hours and hours about the injustices that have besieged my -

AN HON. MEMBER: (Inaudible).

MR. MURPHY: No, no.

I could go on for hours, Mr. Speaker, however I am getting a nod from the hon. the Government House Leader and I adjourn the debate.

Thank you.

AN HON. MEMBER: You adjourned the debate?

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

MR. ROBERTS: Mr. Speaker, that is the worst possible outcome. He adjourned the debate.

Mr. Speaker, before I move an adjournment motion, let me say that we shall tomorrow ask the House to deal with the motion standing in the name of my friend from Port de Grave, which is a motion on an environmentally sustainable cull of seals - bound to bring out the very best in us all.

On Thursday when we meet, I say to my friend from St. John's South, we will call this Bill and ask him to carry on, but he does not get hours and hours unless he can get leave from my friend from St. John's East.

AN HON. MEMBER: Oh, I am sure he will get leave.

MR. ROBERTS: I would suggest to my friend from St. John's South that he not wager everything he owns on that. Then we will carry on with the Bill.

When we finish that, I propose that we call The Law Society Act, which is Bill No. 55.

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: We will be calling it. The hon. lady asked me to postpone it to suit her convenience, and I did, but I have to tell my friend from Humber East that we do not run the House simply to suit her convenience. We will be calling it. But The Law Society Bill is -

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: I told her we would not call it on Monday and we did not call it on Monday. The hon. gentleman opposite, in her absence, just got so carried away with it all that we fell well behind even my hopeful schedule.

Mr. Speaker, I move that the House at its rising do adjourn until tomorrow, Wednesday, at 2:00 p.m. and that the House do now adjourn.

On motion, the House at its rising adjourned until tomorrow, Wednesday, at 2:00 p.m.