March 11, 2019
HOUSE OF ASSEMBLY PROCEEDINGS
Vol. XLVIII No. 54
The
House met at 1:30 p.m.
MR. SPEAKER (Trimper):
Admit strangers, please.
Order,
please!
I'd like
to welcome all the Members back to another week in the House of Assembly.
Statements by
Members
MR. SPEAKER:
Today for Members'
statements, we will hear from the hon. Members from the Districts of Fortune Bay
- Cape La Hune, Conception Bay South, St. George's - Humber, St. John's Centre,
and Baie Verte - Green Bay.
The hon.
the Member for Fortune Bay - Cape La Hune.
SOME HON. MEMBERS:
Hear, hear!
MS. PERRY:
Thank you, Mr. Speaker.
I rise
today to congratulate the local service district of Francois for wining the
Cruise Vision award presented by Cruise Newfoundland and Labrador at the HNL
gala earlier this year. The award was presented in recognition of Francois'
commitment to the provincial cruise industry and their contribution to growth of
the sector in our province.
Fran-sway, or Francois, a true gem on our sunny South Coast, is a frequent stop
by many cruise ships and was one of only three stops in Newfoundland and
Labrador by the C3 Exploration Cruise in celebration of Canada's 150 birthday.
Passengers are provided guided tours and are more than delighted by the
open-hearted traditional kitchen party alive with fabulous local musicians,
delicious food and captivating storytelling.
Occupied
since the 1700s, it is incredible how this community of about 70 residents come
together to offer their visitors lasting memories of an enchanting voyage and a
unique taste of Newfoundland and Labrador. Cruise passengers are certainly awed
by the outport's 600-foot high waterfall in the community's centre and charming
wooden walkways that are surpassed only by the warmth and welcome of its
residents.
I ask
all Members to join me in congratulating Francois for its humongous success in
this sector.
MR. SPEAKER:
Thank you.
MS. PERRY:
Thank you, Mr. Speaker.
MR. SPEAKER:
The Member's time has
expired.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
The hon. the Member for
Conception Bay South.
MR. PETTEN:
Thank you, Mr. Speaker.
On
January 7, I had the pleasure to attend the opening ceremony of the new
inclusive squash program in Conception Bay South.
Conception Bay South became the first town in Canada to adopt an inclusive
squash program providing people with physical, emotional or intellectual
disabilities the opportunity to play the sport. Organizers are calling this a
global first.
This
program was spearheaded by Squash Newfoundland's past-president and squash
pioneer, Eric Hart, from Conception Bay South. Ms. Lolly Gillen, the former
president of Squash Canada and now an international delegate for the game has
been instrumental in helping Eric set up his inclusive squash program. She has
reached out around the world to organizations from Hong Kong to Australia to
learn that many countries thought about doing this, but none have done it to
date.
This
program has a long-term goal of taking this initiative across Canada. In
addition to this, the US, Norway and Australia has asked for this inclusive
squash program model. They are hopeful this program could one day be part of the
Paralympic Games.
Mr.
Speaker, I congratulate Eric Hart for his continued dedication and achievements
and ask all hon. Members to join me in recognizing his contribution to our
community and also to the province.
Thank
you.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
Thank you.
The hon.
the Member for St. George's - Humber.
MR. REID:
Mr. Speaker, last fall I rose
in this House to congratulate Mrs. Freda Gillis as she celebrated her 108th
birthday. She was the oldest citizen of our province. Today, with sadness, I
rise to inform the House of Mrs. Gillis's passing earlier this year.
Freda
was born in Cartyville on the West Coast and has seen many changes and many
historic events in her lifetime. She witnessed veterans returning from both
World War I and World War II, as well as the Great Depression.
Mrs.
Gillis also had many wonderful events in her own life. She married Tommy Gillis
in 1931 and they had five children. In the 1950s, they started a business
together which employed many people in the area she lived.
Over the
last five years, I had a number of opportunities to speak with Freda and was
always impressed by her active mind, her strong will and her sharp wit. Her
legacy lives on in the impact she has had on members of her family and all those
she came in contact with. She is truly an example of a life well lived.
I ask
all Members of the House to join me in celebrating the life of Freda Gillis.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
The hon. the Member for the
District of St. John's Centre.
MS. ROGERS:
Thank you, Mr. Speaker.
Megan Gail Coles has done it again. Her newest
creation: Small Game Hunting at the Local
Coward Gun Club has hit the bookstores to critical acclaim. Megan grew up in
Savage Cove on the Great Northern Peninsula and makes St. John's Centre her
home. She dedicated her latest book to the beautiful, vicious island that makes
and unmakes us, and warns, this might hurt a bit. Be brave.
And the bravery she speaks of is her own, as a
courageous feminist writer who pushes us all to really see what is happening
around us and to challenge the systems and attitudes that keep us down.
But make no mistake, nothing is keeping Megan Gail
Coles down. Her star is rising and we get to ride along. Buy this book.
Brava Megan Gail Coles!
Thank you vey much, Mr. Speaker.
SOME HON. MEMBERS:
Hear, hear!
MR.
SPEAKER:
The
hon. the Member for Baie Verte - Green Bay.
MR.
WARR:
Mr.
Speaker, I rise today to highlight an amazing young athlete from my district who
has been turning the heads of hockey scouts.
At just 14, Abby Clarke from Springdale left home to
pursue an education through hockey at Rothesay Netherwood School in New
Brunswick. From there, a scholarship led her to Alberta's Warner Hockey School
in the JWHL. She finished her graduating year playing for the Edge School for
athletes in Calgary.
In 2014, Abby committed to an athletic scholarship at
St. Thomas University in Fredericton. Named team MVP 2017-2018 and Academic
All-Canadian the same year. At 21, she attended Team Canada Women's pre-Olympic
camp; 2018-2019 has been a career year for the amazing goaltender being named
university sports national athlete of the week in early January. Her numbers:
goal against average 1.05, and save percentage of 0.961 are the best in the
entire nation amongst CIS goalies with 10 or more appearances. She was named
playoff MVP in the AUS and will compete later this week in university sports
national.
I ask my hon. colleagues to join me in wishing Abby
much success as she pursues her love of hockey.
Thank you, Mr. Speaker.
SOME HON. MEMBERS:
Hear, hear!
MR.
SPEAKER:
Thank you.
Statements by Ministers.
Statements by Ministers
MR.
SPEAKER:
The
hon. the Minister of Justice and Public Safety.
MR.
A. PARSONS:
Mr.
Speaker, I am pleased to stand here today to announce a program that uses the
principles of restorative justice to give offenders an alternative to the
traditional court process. The need for this type of program was identified by
participants of justice summits held across the province over the last two
years.
These forums brought together key players of the
criminal justice system including representatives from every level of court,
federal and provincial corrections, police, representatives across all divisions
of the Department of Justice and Public Safety, members of the legal community,
Indigenous groups and community organizations, who identified issues and
suggested possible solutions for improvement. One of the top issues identified
was the lack of
alternatives, which will be addressed by the introduction of an adult diversion
program.
Mr.
Speaker, the goal of the program is to provide an effective and timely response
to the offender's behaviour, encourage offenders to acknowledge and repair harm
caused to the victim and provide an opportunity for the victim to participate in
the process. Alternative measures can include counselling, a letter of apology,
community service or even a charitable donation. The program has seen success in
multiple jurisdictions across the country and is being piloted in this province
through Provincial Courts in Stephenville and Corner Brook.
In
addition to adult diversion, the department is working on other actions to
address issues identified at the justice summits, which can be found in the
action plan posted to the department's website.
Mr.
Speaker, we recognize there is still work to be done, but I am proud of the
initiatives that have been undertaken to improve and enhance the justice system
in the province.
Thank
you, Mr. Speaker.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
The hon. the Leader of the
Official Opposition.
MR. CROSBIE:
Thank you, Mr. Speaker.
I thank
the minister for a copy of his statement. I think the minister would agree that
the more people diverted from HMP, the better.
Last
April, the House passed a resolution urging government to explore the benefits
of adopting restorative justice practices in the province, in consultation with
outside organizations and Indigenous groups. In recent justice summits around
the province, participants expressed concern about the lack of diversion and
restorative justice resources and programs. They called on the province to learn
from restorative justice models used by Indigenous peoples.
For
years, people have been calling for action and it's important to see this
happening. We look forward to hearing positive reports.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
The hon. the Member for St.
John's Centre.
MS. ROGERS:
Thank you, Mr. Speaker.
I thank
the minister. I applaud this initiative by the Ministry of Justice and Public
Safety. Incarceration should be our last resort. Our goal should always be
restorative justice and to keep people out of our correctional facilities as
much as possible. And our priority should be rehabilitation and prevention.
In light
of this, another huge hurdle our justice system must tackle is the growing
number of people incarcerated who are on remand. It is time the minister
consider and develop alternative measures to handle remands in the community. It
is at a crisis point and it is the largest contributing factor to overcrowding
in our prisons and our lock-ups.
Thank
you, Mr. Speaker.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
Further statements by
ministers?
The hon.
the Minister of Fisheries and Land Resources.
MR. BYRNE:
Thank you very much, Mr.
Speaker.
I would
like to take this opportunity to talk about yet another way our government is
supporting Newfoundland and Labrador's agricultural industry.
I think
we can all very much agree that safety on the farm is very, very important. And
while farming in and of itself can be dangerous, I'm very proud to say that all
the farms that I have visited implement very strict measures to mitigate the
risks.
Canadian
Agricultural Safety Week, which is held from March 10 to 16 this year, is an
annual public campaign focused on the importance of safe agriculture. The aim of
the campaign is to empower farmers and the farming community to build, grow and
lead the industry in safety and sustainability.
Mr.
Speaker, empowering new and current farmers is important to this government.
It's the reason we implemented the Agriculture Sector Work Plan and committed to
increasing food self-sufficiency in Newfoundland and Labrador and employment in
the agricultural sector through The Way
Forward.
Through
our Canadian Agricultural Partnership, funding is available to Newfoundland and
Labrador farmers through the Mitigating Agricultural Risks Program to identify
and mitigate on-farm safety risks, including funding for farm safety and
awareness and training.
Mr.
Speaker, my department takes farm safety very seriously. We recognize the
importance of ensuring agribusinesses are a safe workplace for farmers and their
employees.
I want
to congratulate Farm Credit Canada, the Canadian Agricultural Safety Association
and the Canadian Federation of Agriculture, along with our homegrown
institutions and organizations, for supporting this initiative which is
supported by the Canadian Agricultural Partnership.
Thank
you very much, Mr. Speaker.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
The hon. the Member for Mount
Pearl North.
MR. LESTER:
Thank you, Mr. Speaker.
I thank
the minister for the advance copy of his statement. We, too, are pleased to
acknowledge the importance of farm safety as we celebrate Canadian Agricultural
Safety Week.
In
supporting safe and strong farms across the province and across the country, it
is most important that we realize it is too important to be politicized. This
week serves as a valuable campaign to increase public awareness about the
importance of farm safety and, in doing so, it also highlights the importance of
farms themselves.
Farming
is a dangerous occupation. Not only do farmers and their families have to work
long hours, with various types of machinery and equipment, but they are also
under more pressure as they work to compete globally. For all these reasons and
more, it is important that farmers and their families manage risk and protect
themselves from injury.
I would
like to thank all those involved with this initiative and I would also like to
thank the Newfoundland and Labrador Federation of Agriculture for all it does in
promoting farm safety.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
The hon. the Member for St.
John's East - Quidi Vidi.
MS. MICHAEL:
Thank you very much, Mr.
Speaker.
I thank
the minister for the advance copy of his statement. It's good news that
Newfoundland and Labrador farmers are taking advantage of the federal-provincial
funding to mitigate risks. We know that the incidents of accidents on farms,
especially family farms, are always a major concern.
It's
important that we do everything to protect the people, especially our young
people who are working on farms and looking at starting doing that, and to
ensure that agriculture maintains a good safety reputation.
I'm glad
the minister is recognizing all the associations on the national level. I look
forward to government putting in place more concrete provincial assistance to
help our agricultural sector grow.
Thank
you, Mr. Speaker.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
Thank you.
Further
statements by ministers?
Oral
Questions.
Oral Questions
MR. SPEAKER:
The hon. the Leader of the
Official Opposition.
MR. CROSBIE:
Thank you, Mr. Speaker.
On
August 31, 2016 the tax exemption on the export of hydropower from Churchill
Falls to Quebec expired.
I would
ask the Premier, how does he explain to the people of the province that while
they groan under over 300 Liberal government imposed tax and fee increases, the
power export to Quebec goes untaxed.
MR. SPEAKER:
The hon. the Premier.
PREMIER BALL:
Thank you, Mr. Speaker.
What we
know, number one, the comment that's been made by the Tory leader there is when
you talk about fees and so on, they were not new fees. The Tories keep talking
about these things. It's really not the true story as what's been happening
about that time, but what we do understand and what we do know, back in 2016, it
was a much different province than it is today. We've been cleaning up a lot of
the mess that we've been left with.
SOME HON. MEMBERS:
Hear, hear!
PREMIER BALL:
Mr. Speaker, when you talk
about taxation of hydro and the 2016 agreement, and when you look at rate
mitigation, we will explore and continue to explore all options that are
available to this province to keep electricity rates down.
This is
not a copy-and-paste exercise or a cheap plan.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
Order, please!
The hon.
the Leader of the Official Opposition.
MR. CROSBIE:
So, Mr. Speaker, I noticed in
the answer nothing stated about the disappearance of the tax exemption and the
opportunity that opens up.
The
disappearance of this tax holiday for Quebec has opened enormous opportunity to
leverage talks with Quebec, aimed at getting a fair and equitable return from
the Upper Churchill resource.
What
action has the Premier taken to grasp this opportunity?
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
The hon. the Premier.
PREMIER BALL:
Thank you, Mr. Speaker.
Well,
number one, what I will not do is actually fill in some more blanks that are
glaringly absent from this Crosbie hydro electricity action plan, because it was
a cheap plan. You paid for what you got, I can tell you that: nothing.
SOME HON. MEMBERS:
Hear, hear!
PREMIER BALL:
It should have been just a
copy-and-paste exercise from the PUB. As a matter of fact, Mr. Speaker, I would
say if the PUB had not been kicked out, there would not have been a requirement
for the Crosbie CHEAP plan that we put in place today.
Let's be
very clear, the Leader of the Opposition got exactly what he paid for.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
Order, please!
I do
remind all Members to not address each other with the personal names. It's their
titles and so on.
Thank
you.
The hon.
the Leader of the Official Opposition, please.
MR. CROSBIE:
I notice, again, no reference or response being made to the expiry of the tax
exemption on the export of power from the Upper Churchill.
Why
hasn't the Premier educated the public on the disappearance of the Quebec tax
holiday and the opportunity it represents?
MR. SPEAKER:
The hon. the Premier.
PREMIER BALL:
Thank you, Mr. Speaker.
Well,
once again, as I said, that on behalf of residents of this province we're going
to explore whatever options we have available to us.
It's
ironic that just a few days ago the Tory Leader was up asking people – that we
need to put the fight in Dwight or the bite in Dwight or something so that we
can actually be doing what other former PC premiers have done and fight Quebec
in areas today, talking about suggesting that myself, as Premier, should be
having discussions with Quebec.
So, Mr.
Speaker, it's like walking on quicksand with this Tory Leader. We don't know
where he's going. He takes his direction from which way the wind is blowing.
Clearly, what we're seeing here now, for the first time in 25 or 26 sessions, we
finally have a Tory Leader asking and concerned about electricity.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
Thank you.
The hon.
the Leader of the Official Opposition.
MR. CROSBIE:
It has always been my philosophy to talk first and fight second.
I ask
the hon. Premier: When did he first get a legal opinion on this issue?
MR. SPEAKER:
The hon. the Premier.
PREMIER BALL:
Mr. Speaker, there's a lot of
work being done on rate mitigation.
As a
matter of fact, we're the group that called in the PUB, the Public Utilities
Board. As a matter of fact, I would say if you would have left the PUB in place
seven years ago, you wouldn't need a CHEAP plan today. That plan would not have
been required, but maybe at the time.
He could
ask his colleagues – that he's telling me I should be mentoring myself from –
did they actually talk to Quebec about bringing in cheap power from Hydro-Québec
to solve the problem that they thought was going to be in Newfoundland and
Labrador?
As I
said, Mr. Speaker, working with the Department of Natural Resources, working
with the PUB, we will not allow electricity rates and Muskrat Falls to be borne
by ratepayers or taxpayers in this province, and I can assure you we will put a
very credible plan in place to the electorate of this province.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
The hon. the Leader of the Official Opposition.
MR. CROSBIE:
Mr. Speaker, none of that answers the question, which was when was a legal
opinion first obtained?
Since
the Minister of Natural Resources has spoken to this this morning, I'm going to
ask her for that.
MR. SPEAKER:
The hon. the Minister of
Natural Resources.
MS. COADY:
Thank you, Mr. Speaker.
I did
note this morning that Crosbie CHEAP plan – that's the name of it, Mr. Speaker –
MR. SPEAKER:
Again, I remind the Member
please do not refer to –
SOME HON. MEMBERS:
Oh, oh
MS. COADY:
It is the name of the plan.
So it is the name of the plan.
MR. SPEAKER:
Well, I'll remind all
Members, one cannot do indirectly what one is not permitted to do directly,
regardless of the name of the plan, so.
MS. COADY:
Thank you, Mr. Speaker.
I was
merely using the name of the plan that the Opposition actually named the plan.
But I
will say this, Mr. Speaker, I noted this morning that the Leader of the
Opposition did stand and give credibility to what this government is doing.
Everything that's in their plan is because of the work that we have done by this
government to fix a problem of their making.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
The hon. the Leader of the
Official Opposition.
SOME HON. MEMBERS:
Oh, oh!
MR. SPEAKER:
Order, please!
MR. CROSBIE:
As is the common practice
with this government –
SOME HON. MEMBERS:
Oh, oh!
MR. SPEAKER:
Order, please!
MR. CROSBIE:
– first the premier now the
minister have not answered a simple question.
When was
the first legal opinion requested?
MR. SPEAKER:
The hon. the Minister of
Natural Resources.
MS. COADY:
Thank you, Mr. Speaker.
I could
ask the Member opposite the very same question. He had a plan this morning where
he raised this issue, Mr. Speaker, but I note he did not include it in his plan.
I think that really speaks volumes for what he thinks this discovery can do.
Mr.
Speaker, as with anything that I do in my Department of Natural Resources, we do
seek legal opinion on a variety of issues, one of which, of course, would have
been the changeover in August of 2016 of the rates that were charged from the
Upper Churchill Project.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
Thank you.
The hon.
the Leader of the Official Opposition.
MR. CROSBIE:
Again, the question was when
the legal opinion was requested.
Mr.
Speaker, it seems plain at this point that the government opposite has slept on
our rights.
When the
Premier had dinner with Premier Legault of Quebec last December: Did the subject
of the expiry of the tax exemption for the Upper Churchill power come up? If
not, why not?
MR. SPEAKER:
The hon. the Premier.
PREMIER BALL:
Mr. Speaker, we have a
frustrated Tory Leader today it seems; very frustrated, I would say.
Mr.
Speaker, we had a meeting with the Premier of Quebec. I think that was widely
publicized. We had a discussion about Quebec and Newfoundland and Labrador on
things like mining, the transportation links and so on. It's been a productive
meeting.
As a
matter of fact, we've had productive meetings with the Atlantic Growth Strategy,
just the Friday before last. I'm wondering why the Tory Leader has not even
asked questions about that, how we fill in transmission gaps so that we can
actually help other Atlantic provinces come off coal; therefore, increase the
demand and lower the cost of Muskrat Falls.
Mr.
Speaker, this government is leaving no stone unturned, doing whatever we can to
keep rates down. We're just not relying on a copy-and-paste exercise from
(inaudible).
MR. SPEAKER:
Thank you very much.
Your
time has expired.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
The hon. the Leader of the
Official Opposition.
MR. CROSBIE:
The question had to do with
whether the issue of the expiry of the tax exemption was discussed with the
premier of Quebec. Again, no answer.
Quebec
Hydro has enormous depth of knowledge and experience in hydro and in negotiating
hydro deals.
Who has
the Premier assembled to be on the correct team that we need to represent us in
talks with one of the most formidable hydro energy companies in the world?
MR. SPEAKER:
The hon. the Premier.
PREMIER BALL:
Thank you, Mr. Speaker.
We've
got a number of people who would work on behalf of our utilities within
Newfoundland and Labrador, but right now, if you're thinking there is a
conversation that's ongoing about megaprojects and so on, we will do whatever it
takes to keep rates down, but only agreements that – we would never do an
agreement where Newfoundland and Labrador is not the beneficiary, Mr. Speaker.
We will never put – and I say this to the Tory Leader right now. We will never
expose people of Newfoundland and Labrador like the administration that you now
lead, the PC administration exposed this province to.
Today,
on Open Line, you were saying it has a
bright future, but I can tell you, Newfoundland and Labrador does have a bright
future but not as a result of the work of the PC government.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
The hon. the Leader of the
Official Opposition.
Order,
please!
MR. CROSBIE:
I try to follow the
courtesies and rules of the House and address the Premier in the third person –
not in the first person, not in the second person.
I ask
the Premier, in view of the fact he has known since at least August last year
that Muskrat Falls rate increases could be held to zero without new taxes: Why
did he let the public live in fear instead of giving them a full explanation of
how this mitigation could be performed?
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
The hon. the Premier.
PREMIER BALL:
Mr. Speaker, we first stated
talking about rates and the impact of Muskrat Falls on this province back in
2012 while the Leader of the PC Party was actually trying to do some work in
theatre. We were working in this theatre on behalf of Newfoundlanders and
Labradorians. As a matter of fact, the longest filibuster in the history of this
province was held right here when I was sitting right there trying to stop this
project and the impact that it would have on Newfoundlanders and Labradorians.
We did
not support it; you're party did, I say, Mr. Speaker.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
The hon. the Leader of the
Official Opposition.
MR. CROSBIE:
Again, no answer.
So I ask
the Minister of Natural Resources; I ask her the same question: Why was an
explanation not given to the public as to how the object of not affecting their
power rates through the advent online of Muskrat Falls, given at least from last
August?
MR. SPEAKER:
The hon. the Minister of
Natural Resources.
MS. COADY:
Thank you, Mr. Speaker.
I find
it troubling that the Member opposite does not know that this government has
been out speaking about rate increases at Muskrat Falls for a number of years,
talking about how we have a plan in place. It was in the budget, I believe, Mr.
Speaker, of 2017 that we were going to put $200 million toward rate management
and rate mitigation. And then thereafter, on multiple occasions, I was speaking
to the public about how it was serious, it was difficult, but it is not
impossible for us to ensure that we keep rates as low as possible.
Mr.
Speaker, in comparison, the former PC administration, when they accepted the
Muskrat Falls Project, told the people of this province they were going to owe
15 cents –
MR. SPEAKER:
Thank you.
Your
time is expired.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
The hon. the Leader of the
Official Opposition.
MR. CROSBIE:
The Minister of Natural
Resources told the press last week that the government would disclose their rate
mitigation plan before the next election.
Why are
you sitting on it?
MR. SPEAKER:
The hon. the Minister of
Natural Resources.
MS. COADY:
Mr. Speaker, this is very,
very troubling, I can tell you. We're not sitting on any plan. We have been
methodical, we have been diligent, first, in getting Muskrat Falls under control
– something of which they were not able to do at all.
Secondly, Mr. Speaker, we've been very clear to the people of this province that
we are working on a plan that will ensure that the rates of this province do not
double, which it would have under the PC plan for Muskrat Falls.
I have
said that there are three ways in which we are going to do it. We're going to
raise revenue, we're going to lower cost and we're going to manage the mortgage,
Mr. Speaker. I have given examples of each of those things under those headings.
The people of the province know we have a plan, and they know we're going to get
this right.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
The hon. the Member for Mount
Pearl North.
MR. LESTER:
Well, I guess that's a pretty
good admission there still is no plan.
SOME HON. MEMBERS:
Hear, hear!
MR. LESTER:
Mr. Speaker, there has been
much criticism of the government's decision last week to engage in further
consultations on banning single-use plastic bags in the province.
Last
month, the minister had said that a decision on the ban was coming within weeks.
Today, Municipalities Newfoundland and Labrador is promoting a day of action to
ban the bag.
Minister, why are you dragging your heels?
MR. SPEAKER:
The hon. the Minister of
Municipal Affairs and Environment.
MR. LETTO:
Thank you, Mr. Speaker.
Nobody
is dragging their heels. All we're doing is doing things right.
SOME HON. MEMBERS:
Hear, hear!
MR. LETTO:
Which came out of the meeting
last September, of which MNL was a part of and other stakeholders – one of the
recommendations coming out of that meeting was to do more consultations, and
we're doing just that, Mr. Speaker.
I tell
you what we're hearing – I'm glad we did it because we're getting a lot of
responses. The biggest response we've ever gotten from an online survey was the
one that we put on last week on banning the bag.
So, Mr.
Speaker, we're doing the right thing and before we make any decision, we'll make
sure that we're going to have all the information that's needed.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
The hon. the Member for Mount
Pearl North.
MR. LESTER:
I would probably suggest that
the expression of interest is more of frustration in their online survey.
The
members of MNL have voted overwhelming to support a ban on single-use plastic
bags in two occasions in 2016. This group represents 275 municipalities and
serves 89 per cent of the province's population.
When
will your government show leadership and commit to introduce a provincially
mandated ban on single-use bags?
MR. SPEAKER:
The hon. the Minister of
Municipal Affairs and Environment.
MR. LETTO:
Mr. Speaker, municipalities
in this province have the authority today to ban the bag or to do anything else
that we need to do around the environment. So, there's no reason why it can't be
done.
We know
that there are seven municipalities in this province that have gone that extra
mile and put in bans. What MNL is asking for is a province-wide ban so that they
would not have the responsibility of enforcing such a ban or putting in the
measures.
What
we're doing, Mr. Speaker, today, and we've done for the past week and we will do
until March 27, is to gather that information and to see what we can do to help
a province-wide ban.
Mr.
Speaker, we're not going to do it until we get all the information.
MR. SPEAKER:
Your time has expired.
Thank
you, Sir.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
The hon. the Member for
Conception Bay South.
MR. PETTEN:
Thank you, Mr. Speaker.
Mr.
Speaker, last week the Member for Placentia West - Bellevue revealed that the
deal had been struck between Paul Antle and Kiewit on the sale of the former
Marystown Shipyard and that the province has agreed to take on the environmental
liabilities.
Can the
minister confirm this and provide an update?
MR. SPEAKER:
The hon. the Premier.
SOME HON. MEMBERS:
Hear, hear!
PREMIER BALL:
Mr. Speaker, I think this is
an issue that really needs some clarification. Number one, this is not the
province's shipyard to sell. So, the province is not selling a shipyard. This is
a deal right now that we understand is being structured by two private entities
within our province.
The
environmental indemnity on the Marystown Shipyard goes back to the '60s when the
shipyard was first built. That was owned by the province at the time. In 1997
when Friede Goldman took over the shipyard, then it was the province's liability
and the indemnity got extended and eventually it takes us where we are today.
There was over $7.5 million spent on environmental cleanups by the province on
that shipyard by many administrations, Mr. Speaker.
So, this
is about a shipyard that is not under the ownership of this government that
we're talking about.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
The hon. the Member for
Conception Bay South.
MR. PETTEN:
Thank you, Mr. Speaker.
Mr.
Speaker, on December 5, the minister confirmed in this House that he had
received and was reviewing the consultant's environmental assessment report on
the former shipyard. That was over three months ago. We still haven't seen the
report and we're hearing the deal is done.
Minister, exactly what did the consultant's environmental assessment report on
the former shipyard reveal?
MR. SPEAKER:
The hon. the Premier.
PREMIER BALL:
Thank you, Mr. Speaker.
The
environmental assessment on this will be released. It was about $241,000. The
right thing to do was to prevent the Government of Newfoundland and Labrador
exposure, like we've seen in the 2009 expropriation of Abitibi – we've learned a
lesson from that, Mr. Speaker. So the ideal thing here was to actually establish
what the liability – what the limits would be.
Mr.
Speaker, the assessment that's been done by a group of GHD consultants shows
that the environmental liability on that site right now is currently around $1.5
million. The prudent thing to do is take the province off the hook for those
liabilities as quickly as possible. There is $7.5 million already spent on it;
there's about $1.5 million there.
Mr.
Speaker, this is about creating jobs on the Burin Peninsula, supporting the
aquaculture industry. This is what this government is all about.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
The hon. the Member for
Conception Bay South.
MR. PETTEN:
Thank you, Mr. Speaker.
Mr.
Speaker, in 2010 remediation of lead paint at this facility was costed at being
over $2 million, yet the Member for Placentia West - Bellevue and the Premier
are now saying the current cleanup is about $1.5 million.
Can you
explain the discrepancy?
MR. SPEAKER:
The hon. the Premier.
PREMIER BALL:
Mr. Speaker, I already said
there's been $7.5 million that has been spent on environmental cleanups on this
site now. In 2001-2002, that calendar year, there was about $5 million spent.
And in about 2009-2010 there was another $2.5 million that was spent. That was
on lead and asbestos abatement.
In 2002,
it was on tank removals and so on, on that site. And now, for about $400,000,
this would remove the hazardous material on lead and asbestos abatement. Workers
cannot go in that site until this lead and asbestos abatement has concluded. So
no owner can go in there and operate that site without that $400,000 being
spent.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
The hon. the Member for
Conception Bay South.
MR. PETTEN:
Thank you, Mr. Speaker.
Can the
minister or the Premier confirm if this is the total environmental liability for
the site? What is the total liability?
MR. SPEAKER:
The hon. the Premier.
PREMIER BALL:
Thank you, Mr. Speaker.
The
analysis that's been done, as I said, Mr. Speaker, by GHD suggests – and this
can be publicly released, this information should be publicly available – about
$1.5 million. This is on top of the $7.5 million that was spent by the prior
administration and then spent in 2002 by another administration.
So
there's a considerable amount of work that's been done already. This would be
about $9 million in total, Mr. Speaker, when this work gets done.
Mr.
Speaker, let's keep in mind, no one can go in there and work on this site until
the environmental risk have been dealt with. There's about $400,000 of lead and
asbestos abatement that must be done as part of workplace health and safety. The
rest would be in the soil removal that would have to be done as part of the
liability.
MR. SPEAKER:
Thank you.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
The hon. the Member for
Conception Bay South.
MR. PETTEN:
Thank you, Mr. Speaker.
Mr.
Speaker, can the Premier confirm if this remediation is required to be done
immediately, prior to the sale and prior to the facility becoming operational?
MR. SPEAKER:
The hon. the Premier.
PREMIER BALL:
Mr. Speaker, the smart thing
to do is to get rid of these liabilities as quickly as you can. We can work with
the federal government on soil removal. The $400,000 that would have to be spent
on lead and asbestos abatement – these are lead paints and so on – that would
have to be done before any workers can go in there. So this must be done anyway.
So right
now, we would work with the federal government to actually support the removal
of soil, get the site cleaned up, Mr. Speaker, put that shipyard and the workers
on the Burin Peninsula back to work.
SOME HON. MEMBERS:
Hear, hear!
PREMIER BALL:
The union supports this, Mr.
Speaker. The aquaculture sector needs it. This is about creating jobs in
Newfoundland and Labrador for people, especially those on the Burin Peninsula
with the Marystown Shipyard.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
The hon. the Member for
Conception Bay South.
MR. PETTEN:
Thank you, Mr. Speaker.
Mr.
Speaker, this deal is between two private businesses. Other than taking on
environmental liabilities, how else is government involved in this deal?
MR. SPEAKER:
The hon. the Premier.
PREMIER BALL:
We're not.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
The hon. the Member for
Conception Bay East - Bell Island.
MR. BRAZIL:
Mr. Speaker, one of the
reasons cited for cancelling the ambulance service for Moores was unsafe and
unwise scheduling of staff.
If
scheduling is unsafe, why are we waiting until April 6 to end the contract?
MR. SPEAKER:
The hon. the Minister of
Health and Community Services.
MR. HAGGIE:
Thank you very much, Mr.
Speaker.
This
issue that arose with Moores has been a long time in the making. I think it's a
useful opportunity here just to reassure the people in the area served by Moores
Ambulance that if they need an ambulance, they call 911 and one will arrive
exactly the same way today as it did a month ago and exactly the same way as it
will after April 6. There may simply be a different logo on the ambulance.
The
money is there for the funding, the funding is secure and the service will
continue to be delivered. With regard to the issues about scheduling, we have
heard the concerns of the union and this was one of the reasons we elected to
act and not wait.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
The hon. the Member for Cape
St. Francis.
MR. K. PARSONS:
Thank you very much, Mr.
Speaker.
Last
week, the Minister of Fisheries said that they had tremendous success in dealing
with the federal government.
I ask
you again: Have you been able to get a commitment from the federal government
that no surf clam will be removed from Grand Bank?
MR. SPEAKER:
The hon. the Minister of
Fisheries and Land Resources.
MR. BYRNE:
Mr. Speaker, I think the
objective should be to increase the amount of surf clams that comes into Grand
Bank. What we've had is success in getting in place a $100-million Atlantic
Fisheries Fund.
There
was a decision that was taken by the federal government on surf clams which,
through prudent action on this side of the House, the federal government decided
to withdraw the previous offer to those applicants to the surf clam. We've had
decisions on sea cucumber which were reversed because there was some impact on
the industry.
It is
true, we do not always agree on fisheries issues with our federal counterparts,
but what is abundantly clear and true is that we can speak with them and we can
resolve our differences. We do not always agree, but we certainly can work
together.
MR. SPEAKER:
Thank you.
The hon.
the Member for Cape St. Francis for a very quick question, please.
MR. K. PARSONS:
So I ask you again: Do you
have a commitment from the federal government that no surf clams will be removed
from Grand Bank? Yes or no?
MR. SPEAKER:
The hon. the Minister of
Fisheries and Land Resources for a quick response, please.
MR. BYRNE:
Mr. Speaker, the issue of
surf clam reallocation and sharing of surf clams originated back when the PCs
were in government.
The
arrangement that we have been able to achieve is far superior than any
arrangement they were able to achieve because they were able to achieve nothing.
So while
we pay very –
SOME HON. MEMBERS:
Oh, oh!
MR. SPEAKER:
Order, please!
MR. BYRNE:
– close attention, we have
written to the federal government, I've met the federal ministers responsible
for this on several occasions.
What I
can say is our position has been made more clear than their position, which they
never even indicated they had a position until the dying days before the
decision was reversed.
MR. SPEAKER:
Thank you.
The
Member's time has expired.
The hon.
the Member for St. John's East - Quidi Vidi, please.
MS. MICHAEL:
Thank you very much, Mr.
Speaker.
Today
government, in forming the new Oil and Gas Corporation, has said Nalcor will
continue to own existing oil production equity assets because the revenue
streams from them were factored into Nalcor's long-term plans, but these assets
are to be managed by the new corporation.
I ask
the minister: If the equity revenue is being spent on Nalcor's long-term plans,
where is the money coming from to run the new Oil and Gas Corporation and how
much is it going to cost?
MR. SPEAKER:
The hon. the Minister of
Natural Resources.
AN HON. MEMBER:
Finally, a sensible question.
MS. COADY:
Thank you, Mr. Speaker, and I
think it's an important question.
As the
Member opposite indicated, we are setting up a new oil and gas Crown corporation
to ensure that we're putting emphasis and development opportunities in growing
our oil and gas opportunity in this province, and I think everyone in the
province agrees that we have a great opportunity in offshore Newfoundland and
Labrador.
The
money from existing (inaudible) will remain within Nalcor, in a holding
corporation, so that Nalcor could continue with its existing plans. Any new
monies for its existing budget for the new Oil and Gas Corporation, of course,
will come from government until such time as they have revenues coming from
their new projects that they're undertaking.
Thank
you.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
Thank you.
The hon.
the Member for St. John's East - Quidi Vidi.
MS. MICHAEL:
Thank you very much, Mr.
Speaker.
That's a
very interesting answer. Now, I'm asking the minister to tell us how much money
government is going to have to put into it until it returns money to the people
of the province.
MR. SPEAKER:
The hon. the Minister of
Natural Resources.
MS. COADY:
Thank you, Mr. Speaker.
Actually, this is getting to the heart of one of the reasons why we're
separating out the Oil and Gas Corporation, so that you can have clarity and
certainty and the people of the province understand what the revenue and the
costs are of an oil and gas corporation.
As we
all know in this House, there are monies being spent on seismic work so that we
understand what our opportunity is offshore. There are about 30 people working
with the Oil and Gas Corporation currently that will be transiting to the new
Crown corporation.
So, all
these expenses, Mr. Speaker, there is clarity and certainty around them and, as
we move into new projects, the new revenue from those projects will offset any
cost of the new entity.
MR. SPEAKER:
Thank you.
The hon.
the Member for St. John's East - Quidi Vidi.
MS. MICHAEL:
Thank you very much, Mr.
Speaker.
So all
the costs are going to be now and, somewhere in the future, money is going to
come in.
Will
this minister be honest with the people and tell us right here and now: How much
revenue are they projecting to come back to the people of this province
somewhere down the road?
MR. SPEAKER:
The hon. the Minister of
Natural Resources.
MS. COADY:
Thank you, Mr. Speaker.
I take
exception to the word: honesty. I have been nothing if not honest and forthright
about the cost of both Nalcor and the cost of the Oil and Gas Corporation. As
I've said in this House, and this House, I understand, was fully supportive of
Advance 2030, this is so we can focus
on development of the oil and gas industry in this province, Mr. Speaker. I
think it's in the best interest of everybody in this province.
As has
been always, there has been an entity within Nalcor that was responsible for oil
and gas, there have been investments made in offshore – equity investments and
the new corporation will make an investment in the Equinor oil and gas
investment. All that is clear and proven and pointed out to the people of this
province.
MR. SPEAKER:
Thank you.
SOME HON. MEMBERS:
Hear, hear!
The hon.
the Member for St. John's East - Quidi Vidi.
MS. MICHAEL:
Thank you very much, Mr.
Speaker.
So all
the assets are staying with Nalcor, who used to spend money on Nalcor Oil and
Gas. The assets are staying with Nalcor, so what exactly is Nalcor going to
spend the people's money on, now that they're keeping those equity assets?
MR. SPEAKER:
The hon. the Minister of
Natural Resources.
MS. COADY:
Thank you, Mr. Speaker.
One of
the things likely would be rate mitigation, Mr. Speaker. We are keeping the
equity investments that we have already made within the Oil and Gas Corporation
for the ongoing operations of Nalcor and one of their commitments, which is on
rate management.
We also
know there is a $200 million allocation within the budget that Nalcor needs to
provide to ensure that we manage rates appropriately. We even know from the plan
that the Opposition put forward this morning uses oil and gas revenues from the
investments and equity offshore Newfoundland and Labrador.
So, Mr.
Speaker, there's nothing mysterious here. This is the way the constructs of
Muskrat Falls were developed from having it within Nalcor, and we're going to
continue to have the revenues within Nalcor because of those obligations.
MR. SPEAKER:
Thank you.
The
Member's time has expired.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
Oral Questions is over.
Thank
you.
The time
for Oral Questions is over.
Presenting Reports by Standing and Select Committees
Tabling
of Documents.
Tabling of
Documents
MR. SPEAKER:
Order, please!
Subsection 18(9) of the House of Assembly
Accountability, Integrity and Administration Act requires that: “In the
second week of every session of the House of Assembly and as the need arises,
the speaker shall inform the House of Assembly of the appointments made to the
commission.”
I am
advising the House that the MHA for the District of Topsail - Paradise has been
appointed to the Management Commission effective March 4, 2019.
Thank
you.
Further
tabling of documents?
Notices
of Motion.
Notices of Motion
MR. SPEAKER:
The hon. the Member for
Torngat Mountains.
SOME HON. MEMBERS:
Hear, hear!
MR. EDMUNDS:
Thank you, Mr. Speaker.
I move,
seconded by the Member for Stephenville - Port au Port, the following private
Member's resolution:
WHEREAS
the United Nations has declared 2019 as International Year of Indigenous
Languages; and
WHEREAS
the Permanent Forum on Indigenous Issues has estimated that 40 per cent of
languages spoken around the world are in danger of disappearing; and
WHEREAS
there are more than 17 Indigenous languages across 12 language groups currently
spoken in Canada and it is believed that 75 per cent of these languages are
identified as endangered; and
WHEREAS
Indigenous languages are a fundamental element of our culture and society and
are essential in improving our Indigenous identity;
THEREFORE BE IT RESOLVED that the Government of Newfoundland and Labrador
officially recognize 2019 as the Year of Indigenous Languages.
MR. SPEAKER:
Thank you.
Further
notices of motion?
The hon.
the Government House Leader.
MR. A. PARSONS:
Thank you, Mr. Speaker.
Pursuant
to Standing Order 63(3) the private Member's resolution just entered by the
Member for Torngat Mountains shall be the one to be debated this Wednesday.
Further
notices of motion; pursuant to Standing Order 11(1) I hereby give notice that
the House do not adjourn at 5:30 p.m. on Tuesday, March 12.
MR. SPEAKER:
Thank you.
Further
notices of motion?
Answers
to Questions for which Notice has been Given.
Petitions.
Petitions
MR. SPEAKER:
The hon. the Member for
Conception Bay South.
MR. PETTEN:
Thank you, Mr. Speaker.
To the
hon. House of Assembly in the Province of Newfoundland and Labrador in
Parliament assembled, the petition of the undersigned residents of Newfoundland
and Labrador humbly sheweth:
WHEREAS
many students within the province depend on school busing for transportation to
and from school each day; and
WHEREAS
there are many parents of school-aged children throughout our province who live
inside the Newfoundland school district's 1.6 kilometre zone, therefore they're
not qualified for busing; and
WHEREAS
the policy cannot override the safety of our children;
WHEREUPON the undersigned, your petitioners, humbly pray and call upon the House
of Assembly to urge government to eliminate the 1.6 kilometre policy for all
elementary schools in the province and in junior and senior high schools where
safety is a primary concern.
As in
duty bound, your petitioners will ever pray.
Mr.
Speaker, as usual, this is a petition that comes to the floor of this House
quite often from our side – myself and my colleagues – and it's an issue that we
keep the fight on for.
On this
issue today, I'd like to highlight a specific situation in my own district.
There's some media coverage on it today. It's a lady who has an autistic child
who lives 1.5 kilometres from the school. There's a video that has been out on
it. She was on Open Line or VOCM this
morning talking about it. I've been aware of it since last week. Myself and the
Education critic has been back and forth on this issue.
The
bottom line is the policy needs to be revised. This policy – put whatever people
did in the past, put that aside. Look at it here and now, today. This policy is
outdated. It needs to be changed. Forget about what was and wasn't done in the
past. We have to live in the present, Mr. Speaker. I keep saying that, and I'll
say it again today.
You have
an autistic child. This lady was really stressed about it, and rightfully so.
It's a 25 minute walk. The roads have no sidewalks. You're down a main artery;
the fifth busiest road in the province to get to school. It's not right. It's
something not right. It's fundamentally wrong. And for people, whoever,
whatever, to stand and defend this policy – there's no defending this. This is
indefensible, Mr. Speaker.
Heaven
forbid, if something were to ever happen to one of our children, it would be a
different story. But we can only imply, we can lobby. Government has the power
to make the change. We're in Opposition, we have the ability to lobby
government. It's exactly what we do on a day in, day out basis.
This
policy is outdated. This lady has expressed a lot of concern, and rightfully so.
What parent wouldn't? Outside of even that situation there, Mr. Speaker, all
parents that are faced with this dilemma. There are other families with two
children, one small, one pre-schooler, another one probably in grade 1. They
have no vehicle. They're single parents. They are stressed with trying to get
their child to school as well.
The
measurement from the house, from the driveway to the entrance of school is
wrong. I got a school, if you added on the distance into the school you'd
eliminate a lot of the busing issues. Plus, these courtesy stops are not working
in CBS, because every bus in CBS is at its maximum capacity because it's a
growing area. We need more school buses.
This
policy has to be revisited and redone for the safety or our children, not only
today but into the future.
Thank
you very much, Mr. Speaker.
MR. SPEAKER:
Thank you.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
The hon. the Minister of
Education and Early Childhood Development for a response, please.
MR. HAWKINS:
Thank you, Mr. Speaker.
I'm
going to try to refrain from going back and talking about what they didn't do
and talk about the fact that we have made significant changes in policy.
Mr.
Speaker, while I have every bit of empathy for individual cases, I cannot speak
specifically of the case the Member opposite mentioned. However, I would like to
tell you, Mr. Speaker, or inform you, that within the policy if there are
children with special needs within the 1.6 kilometres, there is alternate busing
available. I repeat that: Within the 1.6 kilometres, if there are students with
special needs, alternate busing is made available.
So, Mr.
Speaker, in these cases, we address them, we work with the principal, we work
with school board, we work with the parent to ensure that these students get to
school safely.
Thank
you, Mr. Speaker.
MR. SPEAKER:
Thank you.
Further
petitions?
The hon.
the Member for St. John's Centre.
MS. ROGERS:
Thank you very much, Mr.
Speaker.
To the
hon. House of Assembly of the Province of Newfoundland and Labrador in
Parliament assembled, the petition of the undersigned residents of Newfoundland
and Labrador humbly sheweth:
WHEREAS
Newfoundland and Labrador has one of the lowest minimum wages in Canada and
minimum wage workers earn poverty incomes; and
WHEREAS
proposals to index the minimum wage to inflation will not address poverty if the
wage is too low to start with, which it is; and
WHEREAS
women and youth and service sector employees are particularly hurt by the low
minimum wage; and
WHEREAS
the minimum wage only rose 5 per cent between 2010 and 2016, while many food
items rose more than 20 per cent; and
WHEREAS
other Canadian jurisdictions are implementing or considering a $15 minimum wage
as a step towards a living wage;
WHEREUPON the undersigned, your petitioners, humbly pray and call upon the House
of Assembly to urge government to legislate a gradual increase in the minimum
wage to $15 by 2021, with an annual adjustment thereafter to reflect provincial
inflation.
And as
in duty bound, your petitioners will ever pray.
So, Mr.
Speaker, we've seen the raise; we will see a raise April 1 in our minimum wage
to $11.40. It will still be one of the lowest in the country. Minimum wages in
Canada range right now from $11.06 to $15. Some provinces actually have reached
$15, but most of the provinces are higher than $11.40.
Alberta's minimum wage is $15, and look at their economy. They've really
rebounded from a very tough few years. BC's is at $13.85 with a plan to reach
$15 by 2021, which is what this petition is calling for, and Ontario's is $14 an
hour.
I'm not
sure why this government believes that our people who are working in the service
sector, our women and our youth, why they deserve poverty wages, why they
deserve to work full-time and still live in poverty. If you're working full-time
in the province, a minimum wage worker makes $23,712. That's it, Mr. Speaker.
And it's not much more than the low income cut-off of $20,952 for St. John's.
In 2014,
we tabled a motion in the House of Assembly to raise the minimum wage to make up
for lost buying power between 2010 and 2014 when minimum wage remained at $10.
After this initial adjustment it could increase with inflation, but instead the
government decided to only raise the rate every year with inflation and not make
up the loss. So what we have, Mr. Speaker, is such a low, low original one, we
will never catch up.
Thank
you very much, Mr. Speaker.
MR. SPEAKER:
Thank you.
Further
petitions?
The hon.
the Member for Mount Pearl - Southlands.
MR. LANE:
Thank you, Mr. Speaker.
There
have been numerous concerns raised by family members of seniors in long-term
care throughout Newfoundland and Labrador, particularly those suffering from
dementia, Alzheimer's disease and other cognitive debilitating conditions,
whereby loved ones have experience injuries, have not been bathed regularly, not
received proper nutrition and/or have been left lying in their own waste for
extended periods of time. We believe this is directly related to government's
failure to ensure adequate staffing at those facilities.
THEREFORE we petition the hon. House of Assembly as follows: To urge the
Government of Newfoundland and Labrador to instate legislation which includes
the mandatory establishment of an adequate ratio of one staff to three residents
in long-term care and other applicable regional health facilities housing
persons with dementia, Alzheimer's disease and other cognitive debilitating
conditions in order to ensure appropriate safety, protection from injuries,
proper hygiene care and all other required care. This law would include the
creation of a specific job position in this facilities for monitoring and
intervention, as required, to ensure the safety of patients.
Mr.
Speaker, I have presented this petition now on numerous times, will continue to
do so on behalf of the Advocates for Senior Citizens' Rights in this province.
Each time when I raise it, generally the Minister of Health and Community
Services will stand up and he will talk about the fact that government has
invested in new bricks and mortar. He will talk about the fact of how there are
nutritious foods served at this facilities. He will congratulate the staff of
all the health authorities and the nurses and doctors and say what a wonderful
job you're doing and I support you. As if to infer somehow that the people who
are writing this petition, and myself presenting this petition, don't believe
that nurses and doctors and staff are not doing the best they can with what they
have.
That's
not what we're saying. This is not about bricks and mortar. This is not about
whether nutritious food is prepared at these facilities. It's not about people
not doing their job. It's about staffing ratios. It's about ensuring that there
are enough people in these facilities at all times to ensure that seniors,
particularly those suffering from Alzheimer's disease, dementia and so on, to
ensure that they're being taken care of; to ensure that they're being fed; to
ensure that they're not lying in their own waste for extended periods of time;
to ensure that if they're on a ward, that there's someone there to watch them to
make sure they don't hurt themselves or hurt each other, because they can get
confused and sometimes violent and so on.
That's
what it's about, it's about staffing ratios and it's about ensuring that those
staffing ratios are enshrined in legislation as opposed to regulation and
policy, which can be changed at any given time by any given minister or the head
of the health authority or a home. It's saying that these are minimum
requirements. By law, you must have these staffing ratios at all time.
Thank
you, Mr. Speaker.
MR. SPEAKER:
Thank you.
Further
petitions?
The hon.
the Member for Mount Pearl North.
MR. LESTER:
Mr. Speaker, safe and
affordable housing is a human right. With a safe roof over their head, people
are able to address other challenges; thus reducing financial burdens in health,
justice and child welfare systems.
A rental
subsidy of $800 per month was enforced on September 8, 2008 to pay for modest
apartments that housing was prepared to accept.
THEREFORE we petition the hon. House of Assembly as follows: We, the
undersigned, call on the House of Assembly to urge the Government of
Newfoundland and Labrador to make safe and affordable housing for those who are
most in need a priority and increase the current rental subsidy from $800 a
month.
Mr.
Speaker, basically, we're looking at a segment of our demographics of our
society who are largely on fixed incomes. While every other segment of living
has increased in cost due to natural inflation, this policy is not reflective of
the inflation. We're looking at almost 10 years now without an increase and
seniors, in particular, are most vulnerable. Everything else from our power
bills to our grocery bills, all that has increased, yet they're still expected
to maintain their rental subsidy and anything they would have to top up with it.
As I've
said before in this House, many people had a little, tiny bit of a nest egg
saved for a rainy-day fund and that rainy-day fund is now gone under the past
three or four years of increased taxes and fees; all those things are necessary
for living, increased insurance costs, those things are part of daily living.
Seniors and low-income people are now under stress.
While I
stand to be corrected, as far as I know, the amount of subsidies given out is
going to be less than what is budgeted for and there will be funds returning to
general revenue. Why can't we give those seniors and low-income people a break
and divide it out, with a little bit of an increase?
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
Thank you.
The hon.
the Minister of Children, Seniors and Social Development for a response, please.
MS. DEMPSTER:
Thank you, Mr. Speaker.
I just
want to respond for a moment. I want to say to the people around the province
that safe, stable and affordable housing, we believe, is fundamental to the
social and economic well-being of the people of this province, Mr. Speaker.
There's
a tremendous amount of work happening over in Newfoundland and Labrador Housing
in that social entity, Mr. Speaker. Back in the springtime I, along with my
provincial colleagues from across provinces and territories, endorsed a
multilateral framework. We're just about ready to go, Mr. Speaker, on the
bilateral. We've been two years negotiating that, want to get the best deal for
the people of the province, Mr. Speaker, that includes things like rent supp,
that includes things like provincial home repair, that includes things like the
home heating expansion energy program, and all programs that seniors around this
province are availing of.
What I
will say to the hon. Member is we brought in a pilot project with portable rent
supps, Mr. Speaker, that was in listening to the people and what they wanted.
And, we will continue to roll out the programs that are best for the people that
use these programs every day, Mr. Speaker.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
Thank you.
Further
petitions?
The hon.
the Member for Conception Bay East - Bell Island.
MR. BRAZIL:
Thank you, Mr. Speaker.
The
government now requires regional health authorities to strictly enforce a policy
that requires all applicants being assessed to have a physical care need to
qualify for admission to a personal care home. Seniors with issues such as
anxiety, depression, fear of falling and loneliness are no longer eligible. Many
seniors who would have qualified just months ago are now being denied access.
We, the
undersigned, call upon the House of Assembly to urge the Government of
Newfoundland and Labrador to revise the policy on personal care home access.
Mr.
Speaker, we've gotten a number of petitions sent to us relevant to this
particular issue and it's coming from seniors themselves, it's coming from
organizations that represent seniors, it's coming from family members, but it's
coming from community leaders also who see the value in not eliminating seniors
making a choice. This choice is about where they would feel most comfortable,
where they could be best cared for, where at the end of the day their anxieties
would be eliminated, where the stresses on themselves, their family and their
community would be lessened, where they could be provided 24-hour care but at a
minimum cost in comparisons to the Home First program, which we all support.
For
those seniors who have the ability from a health point of view, a mobility point
of view, from a mental health point of view, and anxiety point of view to be
able to stay in their homes and avail of the supports that government, or a
regional health authority, or the department could support would be the ideal
situation. But what we find, and we find in discussions, seniors don't
flippantly make a decision that they want to leave the home they've been in for
75, 85, 90 years of life and raised their families and had all the great
memories to leave to go into a personal care home, in most cases with strangers,
without analyzing what's in the best interest of them and their family from a
safety, from a care point of view and from a physical and mental health point of
view.
So,
looking at the fact that seniors are not being able to be given a proper choice,
and that's what this said. We've taken away senior's choice to access services
that were in the best ability for them to be safe in their environment. As I
noted, the Home First program is something that everybody supports but there
also is a cost to it. It doesn't fit for everyone.
We take
into account the wisdom of seniors and we see the value of them, but when we ask
for something that they recommend, that would be enhancing health care and
supports for themselves, we flippantly turn and say: no, policy doesn't allow
for you unless you have a dramatic health issue. It's not about mental health in
this. So we've made a decision here arbitrarily, that physical health is more
important than mental health. I say, and the seniors who signed this and the
families who support this are saying no, they're equal. You have to assess the
impact it has on that particular individual and that family. So we can't put one
above the other, but we do have a process here that should be open to all.
Mr.
Speaker, I'll get to speak to this many times again, but we can't take away
people's choice. We got to be able to offer this to the people here, Mr.
Speaker.
Thank
you.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
Thank you.
Further
petitions?
The hon.
the Government House Leader.
MR. A. PARSONS:
Yes, I call Orders of the
Day, Mr. Speaker.
MR. SPEAKER:
Orders of the Day, Sir.
Orders of the Day
MR. A. PARSONS:
Yes, Mr. Speaker.
I call
from the Order Paper, Order 5, second reading of Bill 42.
MR. SPEAKER:
The hon. the Minister of
Natural Resources.
MS. COADY:
Thank you, Mr. Speaker.
I move,
seconded by the Minister of Justice, that Bill 42, respecting the establishment
of an Oil and Gas Corporation for the province, be now read a second time.
MR. SPEAKER:
It is moved and seconded that
Bill 42 entitled, An Act To Establish An Oil And Gas Corporation For The
Province, be now read a second time.
Motion,
second reading of a bill, “An Act To Establish An Oil And Gas Corporation For
The Province.” (Bill 42)
MR. SPEAKER:
The hon. the Minister of
Natural Resources.
MS. COADY:
Thank you, Mr. Speaker.
I
appreciate the opportunity to open the discussion on An Act to Establish an Oil
and Gas Corporation for Newfoundland and Labrador.
This act
will create a new Oil and Gas Corporation separate from Nalcor that will ensure
the province maximizes the resource potential in our offshore. This act reflects
the province's commitment to our oil and gas industry and to
Advance 2030, a plan of growth for
Newfoundland and Labrador oil and gas industry.
The new
Crown corporation would work directly with the Department of Natural Resources
to accelerate growth and opportunities in our petroleum industry, returning
significant value to the people and economy of Newfoundland and Labrador. The
new corporation will drive exploration and will position this province as a
globally-preferred location for oil and gas development.
Mr.
Speaker, Newfoundland and Labrador has tremendous opportunities for growth in
offshore oil and gas industry. In less than 7 per cent of our offshore, we have
a combined resource potential of 49.2 billion barrels of oil and 193.8 trillion
cubic feet of natural gas. This was analyzed by an independent firm and known to
be true.
We have
over 650 leads and prospects identified to date, eight new entrants in the past
two years alone, and close to $4 billion in recent exploration work commitments.
This past November, the province received record bids for offshore exploration,
totalling $1.38 billion. And the record highest, single bid was worth $621
million, which was from a new entrant, BHP Billiton. This act, and the
establishment of a new Oil and Gas Corporation, will help our province build
upon these successes.
Our
government and oil and gas industry stakeholders are committed to positioning
the province as an internationally-preferred location for oil and gas
exploration and development. This past year, we released
Advance 2030 – A Plan for Growth in the Newfoundland and Labrador Oil
and Gas Industry. Work is progressing to implement the identified actions.
Mr.
Speaker, I will say in the developing of the plan,
Advance 2030, we engaged with over 150 stakeholders throughout
Newfoundland and Labrador to determine how we can best grow the oil and gas
industry. We know how important it is to Newfoundland and Labrador. How do we
ensure we have the exploration undertaken? How do we ensure growth in our supply
and service industry? How do we ensure our oil and gas industry evolves and
grows into the future?
By 2030,
Mr. Speaker, we envision over 100 new exploration wells drilled. And I can
inform the people of the province, and indeed this House, there are many – there
are, I think, five current applications before the Canada Environmental
Assessment Agency to look at doing exploration offshore Newfoundland and
Labrador.
We
envision multiple basins, producing over 650,000 barrels of oil equivalent per
day. Mr. Speaker, for the benefit of the people of the province, right now our
four projects are in one basin, the Jeanne d'Arc Basin. We've already announced
there will be hopefully another – there'd be more work being done, another
project in another basin called the Flemish Pass, Bay du Nord. We know that
Equinor is looking at doing a project there in the Bay du Nord region; we
announced that last year. So, multiple basins producing 650,000 barrels of oil
equivalent per day.
Shorten
time frames from prospectivity to production. Globally, we're seeing the
opportunity from prospectivity, from understanding what the opportunity is
offshore, to production is now being very much shortened. We're seeing that in
Guyana, we're seeing that in Norway, we're seeing that in the UK. We, too, are
working to shorten the time from prospectivity to production. I mean consider it
was about 20 years for Hibernia to come on stream. We're really working to
shorten that. We're seeing a shortened timeline now with regard to Equinor in
the development of the Bay du Nord Project, but we need to get that even
shorter, and that's to the benefit of the people of the province.
We're
looking for direct employment of more than 7,500 people in the province in
operations, and these are really well paying, very important jobs. We're looking
to grow that industry, and of course that's direct jobs. I'm not talking about
all the indirect jobs that the opportunity lies, and a robust innovative, global
supply and service sector. We have a really good supply and service sector in
the province, and now we're looking at growing that. We're also looking at
things like outside of Newfoundland and Labrador and outside of Canada, even,
with our most recent signing of a memorandum of understanding with Guyana, and
of course we're hopeful for a commercial gas production.
Increased exploration, development and production will create new opportunities
for growth in our economy, and this legislation really does focus our efforts on
the oil and gas industry. It focuses what we're doing in terms of the
development of the exploration, and it focuses really the intention of growing
that industry.
Mr.
Speaker, right now, the West White Rose Project is currently under construction,
providing substantial benefits to the province, and in particular in the
Placentia - St. Mary's area and Argentia. It's incredible the amount of activity
that's taking place there.
At the
end of 2018, there were over 2,400 people working on the West White Rose Project
in the province. Now that first oil is expected in 2022, and it provides an
estimate of $3 billion in royalties, equities and taxes over the life of the
field.
I
mentioned earlier about Equinor and the Flemish Pass development. A framework
agreement with Equinor and its partner, Husky Energy, on the Bay du Nord Project
will open up a new basin, the Flemish Pass, marking the first development in
deepwater. And with first oil expected in 2025, this project will create an
estimated 11,000 person-years of employment over the project's life span,
generating $3.5 billion in government revenues. That's a combination of royalty,
of taxation and, of course, equity and $14 billion in economic activity.
Newfoundland and Labrador's oil and gas industry is well positioned for
long-term growth. If you consider our industry produces oil that is 30 per cent
below the global average of greenhouse gas emissions at extraction. I'm going to
say that again, Mr. Speaker, because a lot of people in the province don't
realize that and it is pretty remarkable.
The oil
that's produced offshore Newfoundland and Labrador, on average, has about 30 per
cent below global average of greenhouse gas emissions. So, we have very low
carbon per barrel offshore Newfoundland and Labrador. It has lower emission
intensity than the world average and a barrel produced in our province emits, on
average, 12 kilograms of CO2 equivalent, compared to the world
average of 18 kilograms per barrel.
The
legislation before the House of Assembly today is to establish an oil and gas
corporation with a mandate to support implementation of
Advance 2030: The Way Forward on Oil and Gas. Reporting to the
Minister of Natural Resources, the directly held Crown corporation will be
responsible for managing the province's investments in offshore exploration,
including seismic and related geoscience activities, which are critical, Mr.
Speaker, for our development offshore.
In
support of local supply chain development, a priority area identified in
Advance 2030, the corporation will
also work with stakeholders on specific initiatives to enhance supply and
services capabilities and pursue new business opportunities.
Mr.
Speaker, this is an enhanced mandate, we feel it's very important and our
discussions around Advance 2030
certainly led us to ensuring that we enhance the opportunity for the supply and
service industry.
Bull Arm
Fabrication will become a subsidiary of the new corporation and will be
responsible for identifying and leveraging new opportunities for the Bull Arm
site. I hear my hon. colleague from the area giving support for the Bull Arm
Fabrication site. It is indeed the largest fabrication site in Atlantic Canada,
certainly a benefit to the people of the Province of Newfoundland and Labrador
and we are working very hard, through the RFP process now, to look for new
opportunities for that site. A key objective, of course, is to create an
operating environment for that site that focuses on long-term employment and new
supply service business opportunities in the area.
Nalcor
Energy Oil and Gas Inc. will remain a subsidiary of Nalcor Energy, with equity
interest in existing offshore projects, including Hebron at 4.9 per cent, the
Hibernia southern extension at 10 per cent and West White Rose expansion at 5
per cent. This will become a holding corporation.
Existing
staff of Nalcor Energy Oil and Gas Inc. will transition to the new corporation
and will manage the province's existing equity interest under contract. Future
investments in offshore projects, such as the 10 per cent interest in the Bay du
Nord oil project announced in July 2018, will be held and managed by the new
corporation.
A
shared-services model – and I think this is important, Mr. Speaker; it will be
the first time, I understand, that there will be a shared-services model,
meaning government will provide service to an entity – will also be implemented
in support of The Way Forward
commitment to be a more efficient public service.
I will
now provide an overview of the bill, outlining the mandate, the corporate
governance and the structure of the corporation. It gets a little dry, Mr.
Speaker, but it is indeed an important aspect of the bill that we're debating.
It is a rather robust bill, and I want to kind of go through it clause by clause
so that people have a clear understanding of what we're trying to achieve here.
Section
1 of the bill refers to the naming of the
Oil and Gas Corporation Act. It just refers to the naming and it's generic,
not a trade name – meaning it's a generic name that'll be in the legislation and
that any trade name that we may have, that may be used coming out of our
deliberations, will be applicable but the act will remain, for the
Oil and Gas Corporation Act, generic.
Section 2 provides for the definitions of the act. These are common definitions
found in other legislation.
Section
3 points out that the name of the corporation shall be determined by the
Lieutenant-Governor in Council but, for the purposes of the act, the corporation
may be referred to as the Oil and Gas Corporation of Newfoundland and Labrador.
This section also specifies that the shares of the corporation will be held by
the Crown, but that the corporation is not an agent of the Crown. In other
words, it will operate at arm's-length from government with an independent board
of directors.
As such,
section 4 states that the Crown is not liable for the actions of the corporation
except when a directive is issued. Sections 5 and 6 speak to the fact that the
Corporations Act applies and outlines
the legal capacity of the corporation.
Section
7 refers to the objects of the corporation. While broad in nature, the objects
provide the flexibility to pursue opportunities identified in
Advance 2030 and required to grow the
oil and gas industry for the benefit of the people of Newfoundland and Labrador.
Section 8 stipulates the parameters whereby the Lieutenant-Governor in Council
may issue a directive. As shareholder of the corporation, this is a common
shareholder power.
The
general powers of the corporation are outlined in detail in section 9 as it
relates to the business of the corporation, including commercial contracts and
agreements with project partners in offshore projects, seismic companies and
suppliers of specialized services. Other examples include any investments in
Bull Arm Fabrication to maintain the site and related operations.
Sections
10 through 17 outline the provision for corporate governance and operations to
the board of directors, the term of office, provisions for the chairperson and
CEO, voting rights, bylaws and other provisions. This includes a provision for a
minimum number of independent directors, in line with corporate governance best
practice. The legislation stipulates the corporation must have seven to 11
directors, with three- to five-independent directors, depending on the total
number of directors. The CEO may be appointed to the board as a non-voting
member – I think that's important, Mr. Speaker. There's also a provision for the
Lieutenant-Governor in Council to appoint a representative of government to the
board as a non-voting member.
Mr.
Speaker, I will say that I think it's very important to reiterate that the board
of directors will be chosen through an independent appointments process, and we
welcome application for that board from all over the province, and look forward
to moving toward having that board established.
The new
corporation reporting to the directly to the Minister of Natural Resources, both
the new corporation – I'll call it Oil Co. – and the Bull Arm Fabrication Inc.
will require separate boards of directors.
Section
18 provides the board with the authority to appoint staff, but specifically
requires that the policies and guidelines established by Treasury Board apply to
the terms of service and remuneration of employees in the new corporation.
Section 19 refers to the duties of directors and officers, and section 20
provides details specific to board meetings.
Section
21 includes provisions specific to subsidiaries of the corporation, including
the number of board members and independent directors. The legislation again
stipulates subsidiaries must have five to seven directors with two to three
independent directors, depending on the total number of directors.
It is
our expectation that the CEO of the new corporation will also be the CEO of the
Bull Arm Fabrication. This will reduce costs and assure stronger alignment with
the mandate of the corporation. In legislation, the objects of the Bull Arm
Fabrication will be the same as the new corporation, but Bull Arm Fabrication
will have a more focused mandate inline with the current business activities.
Section
21 also stipulates that Lieutenant-Governor in Council approval is needed for
any share transactions involving a subsidiary. So any share transactions will
require approval by the Lieutenant-Governor in Council. That means the
government would have to approve any share transactions at all.
Section
22 permits the corporation to enter into agreements that relate to its objects
with other state owned oil and gas companies, such as Equinor which is 67 per
cent state owned. So it permits the corporation to enter into those agreements
because, as we know, Equinor is partially state owned.
Section
23 speaks to the provisions for records of commercially sensitive information.
Additional rights to protect commercial information are required given the
commercial nature of the contracts the corporation requires to conduct its
business. Oil and gas companies would not enter into agreements with a Crown
corporation if there is a possibility that their commercial information was
going to be disclosed.
If you
recall, Mr. Speaker – and I'm sure you do – Chief Justice Wells even made that
comment when he brought into effect the ATIPPA legislation. This section
outlines the procedures to be followed as it relates to the
Access to Information and Protection of
Privacy Act, the Auditor General Act,
and the Citizens' Representative Act.
The
corporation will be subject to reporting by the Auditor General as identified in
section 24.
Section
25 identifies the financial year of the corporation as a calendar year, which is
consistent with the private companies the corporation has commercial agreements
with and who also report financials on that basis.
Sections
26 through 31, outline the reporting requirement of the corporation including an
annual budget, annual reports, financial statements and audit provisions. We
want to make sure that there is transparency and accountability for this
corporation.
Provisions for borrowing, loan guarantees, repayment and related provisions are
in sections 32 to 40. Prior approval of the Lieutenant-Governor in Council would
be required for any borrowing. In other words, government will have a view as to
when the corporation can borrow for any investments.
Section
41 includes provisions specific to establishing a fund for the receipt of
revenues in conducting its business. Financial provisions that apply are
outlined in section 42.
Section
43 speaks to the requirement to pay dividends as determined by the
Lieutenant-Governor in Council. And for the sake of those listening, the
Lieutenant-Governor in Council really refers to government. The application of
relevant acts, such as the Labour
Relations Act, is referenced in section 44.
Exemptions to the Public Procurement Act
in section 45 are limited to energy and energy products, where the corporation
or a subsidiary is acting in strategic partnership, joint venture or equity;
investment with other public bodies or private sector entities or for the
purpose of meeting the requirements of a benefit arrangement.
So
broader oil activities like training will not be subject to public procurement.
That is normal in these types of circumstances, Mr. Speaker. Benefits
arrangements are not in the Public
Procurement Act, so we would have to have that exemption. We need to
acknowledge that. This provision was also in the
Energy Corporation Act.
Section
46 through section 48 relate to actions, liabilities and offences. Any required
consequential amendments are outlined in sections 49 through section 52, which
are required to ensure they apply to the corporation. This includes schedule A
of the Access to Information and
Protection of Privacy Act, 2015, the schedule to the
Independent Appointments Commission Act,
Public Bodies Reporting Act,
Public Procurement Act and the Public
Sector Compensation Transparency Act.
The Oil
and Gas Corporation Act comes into force on the day of proclamation by the
Lieutenant-Governor in Council as per section 54. Overall, this corporation will
play a lead role in supporting specific priorities identified in
Advance 2030; most specifically,
driving exploration and, of course, enhancing the local supply chain. Both are
critical to accelerating growth in our offshore oil and gas industry for the
benefit of the people of the province.
This
means continuing to invest in seismic and geoscience research to attract global
investment in exploration drilling offshore Newfoundland and Labrador. It also
means working with stakeholders to pursue opportunities to enhance our supply
and service capabilities, which creates jobs and business opportunities in our
economy.
These
are exciting times in the oil and gas industry, Mr. Speaker, because of the
opportunity offshore Newfoundland and Labrador. Our government, as committed in
Advance 2030, will leave no stone
unturned, no action not taken, no effort undone to achieve the success of the
industry.
Mr.
Speaker, I'd like to, as I conclude, just tell the people of the province some
of the things we have been very successful in doing over the last number of
years under the Liberal government. I mentioned some of them in my speaking
notes but I would like to talk a little bit about a lot of the exploration
activity that's been happening.
We've
had, as I said in my notes, a 2018 record call for bids with a new entrant. This
is helping to drive exploration offshore Newfoundland and Labrador. As I said
earlier, 650 leads and prospects. Imagine, Mr. Speaker, when we drill and make
discoveries and can grow our offshore; $3.9 billion, almost $4 billion, has been
committed for exploration; $4 billion will be spent over the next little while,
really looking at what discoveries can be made offshore Newfoundland and
Labrador. There are five operators currently in environmental assessment with
the Canadian Environmental Assessment Agency to conduct exploration drilling.
We have
Advance 2030; and I said earlier, we
had 150 stakeholders from all around the province and all around the industry
from – I'm going to call it from labour, from education, from supply and service
industries, from people who are doing the exploration, from people who are
involved in production, all came together to help ensure that we have a solid
opportunity in our oil and gas industry.
I
mentioned Bay du Nord and I mentioned things that are happening at West White
Rose. There is a lot of opportunity just in those two projects as we move to
production. West White Rose and the Placentia - St. Mary's area is really – the
work that's being carried out is incredible. I only wish that everybody could
see some of the absolute incredible work that the people, that the workforce is
doing.
As you
know, Mr. Speaker, we have about 2,400 people currently involved onsite and
they're doing some incredible work, world-class work to develop that project. We
also know that comes on stream, I think, in 2022. We know right behind that will
be the Bay du Nord production in 2025, but sanctioning will be in 2020.
I
mentioned the Independent Resource Assessment. This year, we identified 11.7
billion barrels of oil and sixty trillion cubic feet of gas potential in one
area of offshore. I mentioned previously about another – you know, combined
resource in another area of 49.2 billion barrels, and that was in less than 7
per cent of our offshore – less than 7 per cent of our offshore. Through
independent assessment, it looks like there is about 49 billion barrels. I
remind the people of the province that we've only extracted 1.8 billion barrels
to date.
Imagine,
Mr. Speaker, the opportunity in our oil and gas industry when that oil is
actually discovered. We know through seismic that it looks like it's there.
We've had an independent assessment of that and now people are starting to drill
to see if that's available.
We know
that new 3D seismic data, coupled with seabed cores collected by Nalcor and its
partners in the Orphan Basin, has provided scientific evidence of active
petroleum systems in these bed areas, and there will be multiple drilling
activities over the next number of years. We look forward to the results of
those and look forward to continuing to grow our oil and gas sector. We believe
there is great opportunity there.
As I
said, it is lower carbon per barrel than other jurisdiction around the world. We
think there's great benefit to the people of the province, a great opportunity
for same and the development of this Oil and Gas Corporation really does lead us
to ensuring that we have the tools in place to greatly maximize the benefits to
the people of the province.
Thank
you and I look forward to my colleagues in the House debating this important
legislation, to asking the questions they need to ask to ensure that we are
moving forward in the right direction and doing all that we can to maximize the
opportunity for Newfoundland and Labrador
Thank
you very much, Mr. Speaker.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER (Warr):
The hon. the Opposition
House Leader.
MR. HUTCHINGS:
Thank you, Mr. Speaker.
I'm glad
to rise today to speak to this bill, Bill 42. The minister has taken some time
to go through it and give some indication of the general intent of the bill in
regard to the changes to Nalcor, taking the oil and gas sector, which now sits
within Nalcor – my understanding is, physically, it's not there, under their
main office, but does still report to and into the parent company of Nalcor as a
separate entity. Now, what we're proposing here, is breaking it down and taking
it out.
I guess
one of the things with that and some of the discussions I've had is the question
of why – what is the benefit in doing it? We had a briefing a little while ago –
and I'll go through some of those points and what we learned in that. As we
know, and the minister has alluded to, we look at 6 or 7 per cent of our
offshore from an oil perspective and what we're looking at developing and where
we are with it from exploration, and the reserves are vast indeed.
Within
Nalcor right now you have the Oil and Gas division which certainly oversees
that, is run by the VP, has its own legislation which exists now that it
currently functions under, and all of that exists today. So, the question
becomes, as we go through this, why Bill 42 and why is there a necessity for a
requirement to change the current structure.
When we
went through the briefing, the general consensus was to help realize our
potential in offshore oil and gas development and to support
Advance 2030, which is the current
government of the day initiative, I guess, directed to the offshore and oil and
gas development, and look at increasing the amount of activity in our offshore
from an exploration point of view and from a production point of view, which
everybody agrees, certainly, that's quite needed.
In 2007,
we had released an energy plan which looked at, from a very extensive point of
view, the whole facets and assets that are related to our energy in this
province and how it will be handled. Oil and gas was certainly one of those and,
out of that, grew the creation of Nalcor to have our non-renewable resources and
our renewable resources connected in that entity, while yet separated through
different corporate identities, would flow up to the main frame of Nalcor and,
within that, hold the assets, hold the revenues, hold the investment
collectively for those renewable and non-renewable resources. And, from that, we
would draw down the wealth that would be generated from it.
What
we're asked today in Bill 42 is to look at, and I guess the reasons given by the
Department of Natural Resources, as I said, to supposedly realize our potential
in offshore oil and gas development, support the government's initiative of
Advance 2030 and, in doing that, it
would be directly tied to the Department of Natural Resources to accelerate the
growth and opportunity of our petroleum industry returning significant value to
the people and economy of Newfoundland and Labrador.
Currently, as it's set up, with that Oil and Gas division under Nalcor with the
team of, we assume – I know some experience I had – pretty professional people,
well educated, appropriate across the board of certain professional and human
resources that are required, and they've been functioning there. There's a VP
that certainly operates there. I assume, as we go through, the minister will
give us some overview in terms of – because they're talking about efficiency and
doing it better so the first time when you hear about doing it better, I guess
you have to ask is it being done the best it can be done now under the current
arrangement. Because if you're changing it, there would be some indication that
maybe we're not meeting our true potential or meeting the directions that were
laid out to achieve our oil and gas success that we want to achieve.
It will
be interesting to hear, as we go through debate, from the minister about what's
not being achieved and how making this change is going to ensure that we can
meet possibly new milestones or directions that are being laid out now by the
current administration and how this is going to meet those objectives.
The
second component, any time you're increasing a structure or introducing more
individuals in terms of the regulatory framework there's always the question of
cost. What's this going to cost? Where is that cost coming from?
In the
briefing, and I think the minister alluded going through some of the
legislation, talked about having to implement a board of directors, a CEO, and
the set-up would require the installations of those positions as well, which
obviously in some degree has some cost. As well you look at branding, it's a new
Oil and Gas Corporation and what that involves as well.
We would
be interested to hear, as we go through, what that cost will be and how new
objectives or the objectives of Advance
2030 have a greater opportunity to be met, that supposedly is not being met
today, and this corporation somehow would allow that to happen. So we'll be
interested to hear discussion on that and how that will evolve.
The
other point currently in terms of Nalcor and the corporate entities that now
exist under that, this entity, the Oil and Gas Corporation, which we're doing
under Bill 42, will now work directly with the Department of Natural Resources.
There will be a direct line to the department. It's not going to be a line
department is my understanding that we traditionally see in government or the
public service, but there will be a direct line. There was reference made to a
Crown corporation or an agent of the Crown. We'll have discussion as we go
through in regard to that and how that's going to improve deficiencies that may
possibly exist by creating this Oil and Gas Corporation to this piece of
legislation.
Again,
there's going to be a direct line to the Department of Natural Resources, yet
we're still going to retain a CEO or there will be a requirement for the hiring
of a CEO. There will be a board of directors that will operate and the support
to go with the board of directors and what's needed. There will be reporting
requirement. All of that enhances the activity and new activity, once you take
this venue out of the current structure and set it up under this new legislation
we're talking about today.
We
talked about direct oversight as the Crown corporation reports to the Minister
of Natural Resources. Other reasoning given was alignment with government
policy, including Treasury Board policy and guidelines. That was talked to us in
the briefing we had talked about.
So then
it becomes the question of expenditures, and I know the legislation gets in and
talks about the approval mechanisms for borrowing, for operations, the reporting
requirements. All of those are laid out in the legislation, and we'll get into
that a little later.
When
you're referencing Treasury Board policies and guidelines, is there a
requirement – as we go through – for Treasury Board approval and what that
Treasury Board approval is going to be in regard to those policies and
guidelines. We'll have to discuss that and have some questions when we get into
Committee.
We were
also told that reduced cost with the Government of Newfoundland and Labrador is
a service provider and it supports The Way
Forward commitment to a more efficient public sector. Some of the things
I've talked about already in terms of a more efficient public sector – I guess
we'll have to see on that one when we look at the extra cost that's going to be
involved with the structure that's set up here and how that's going to be more
efficient, and how exactly it will work from what it does today and how greater
efficiency or greater return will be received under this proposed set up.
Another
one, it said it enables Nalcor to focus on its core business. That would leave
one to believe that right now Nalcor is not able to focus on its core business,
but the core business of Nalcor to be set up was the focus on renewable and
non-renewable. It would be regulated and unregulated activity.
So to
say to focus on its core business, we'll certainly have questions on what is
perceived by the government is their core business and what is it they can't do
today that setting up this new corporation is going to allow them to do to make
sure Nalcor Energy can focus on its core business. Because there seems to be a
deficiency somewhere that they're not able to do that. There are problems and
issues, and this entity is going to help correct it. So we'll be looking in
Committee to see exactly – an explanation on that.
As well,
when we were briefed on this by the officials in the Department of Natural
Resources, and as well from Finance, to identify and leverage opportunities for
growth in Newfoundland and Labrador's offshore oil and gas industries for
exploration, equity, collaboration, promotion and development, all key elements
that we've seen to date, certainly in the oil and gas sector in this province –
well, the oil sector – and what we've seen in terms of development through
exploration and promotion of exploration to things like seismic work.
That was
started a number of years ago under Nalcor, putting – I think initially it was
$25 million, then $50 million in to drive that data, that seismic work, which
allows when we go to land sales and prior to that for the offshore, that those
large players, or all players in the industry that want to invest can see
first-hand what the opportunities are and why would they want to come here off
our shore and invest and drive economic opportunities here. So that's important
from the exploration point of view, that that work continues.
As I
say, that work is going on today. Even the minister speaks to the prospectivity
and what we've been able to achieve from that. Over the last couple of years
we've had significant land sales. One in particular, almost a billion dollars,
if I believe correctly. That's a couple of billion dollars now that's built up
from land sales that the exploration needs to be carried out over the next
number of years.
I would
assume that has worked, in terms of the current set-up for the Oil and Gas
division within Nalcor. Some great work, and it has been recognized by all sides
of the House that entity that's set up within Nalcor has done well and has
really driven exploration.
Now, we
do have some challenges with some of the legislative changes in Bill C-69 that's
being talked about in Ottawa and what that could do to our exploration. So it's
great to be talking about it here and the success we have to date, but we really
have to ensure that some of the changes – and I think Bill C-69 is in the Senate
now and it's been – there's a Senate Committee that's hearing representation on
it. I think the minister and the Premier has appeared before that Committee.
If we're
going to drive this and look at the return in our oil and gas sector, we need to
make sure – we don't need more regulation. We need regulations that provide the
appropriate risk mitigation, provide the atmosphere, provide the policy and
regulatory framework that to the very best we can protect that environment and
protect the industry and protect those that are involved in it.
We also
made sure that it doesn't get to such an extreme that it discourages investment.
We're competing in this environment and this industry around the world. It comes
down to, where is that investment dollar going to be? And what we're hearing
from industry, those involved in the oil and gas sector, the companies, the
supply companies and all these organization groups, they're concerned.
They're
concerned about Bill C-69 and some of the changes which could realistically take
away environmental assessment work that needs to be done for approving things
like exploration licences; traditionally done with the C-NLOPB here in
Newfoundland and Labrador which traces back to the Atlantic Accord, and a
fundamental principle of that Accord is that it would be shared jurisdiction.
And shared jurisdiction – we went to the Supreme Court. People know many years
ago the federal government took us to court. We wanted sole ownership of our
offshore resources. It went to Supreme Court: no, couldn't have that. We didn't
bring that into – apparently, bring it into Confederation in 1949.
What did
happen is through the Atlantic Accord it was agreed to, at the time, that we
could have shared jurisdiction as if those resources were on land, and out of
that grew the Atlantic Accord. Some of the fundamental principles in that Accord
relate to the C-NLOPB and what we're talking about here today in regard to Bill
42, and making sure the regulatory framework is conducive to further development
and exploration of all those resources we have offshore.
That's
where any legislative change with Bill C-69 – we need to be very careful and
advocate very loudly that that authority be left to the C-NLOPB in regard to a
regional assessment agency and not get wound into a big centralized service of
the Canadian Environmental Assessment Agency where the local control is lost
from our region and from the good work that's done here, and has been done with
the offshore petroleum board. So important, and that needs to be recognized
because that goes fundamental to the exploration content of what we're
referencing here today. That was one of the important points we talked about
when we got the briefing done in regard to maximizing what we're doing.
Equity
was another thing that was talked about in Bill 42. When I go through the bill,
or reference the bill later, we'll look at how that actual equity exists today.
In the current structure that's set up, the equity will remain within that and
all the investments to date will be in sort of a holding company or shell
company, and a second – the newer corporate entity will be set up and that will
hold all future equity investments or collaborations for any new entities that
are set up in the oil and gas.
We
talked about collaboration, working with all those in the industry to be
successful. Certainly, promotion and development is such a key as well, and
that's part of this bill as well I'm sure; this new corporation to allow us to
maximize our opportunity through promotion and development of what we have here
off our coast and how we're competitive and how we're open for investment, and
this is the place that those with the capital who want to invest to drive our
oil and, hopefully, gas sector in the near future.
So
fundamental principles of the mandate of this new corporation act, we're told,
is to maximize value through investment, equity and assets that maximize returns
from our offshore oil and gas resources. That's going on today, I understand,
under Nalcor. If it's different, I guess we'll hear about it later in debate.
Driving
resource development, opportunities through leadership, geoscience research,
data acquisition and promotion of exploration opportunities – all of that leads
to production and that leads to royalties and returns either through the
royalties, taxation and, certainly, we take a return on our equity we have in
these particular projects.
We're
also told: encouraging industry development through collaboration, strategic
initiatives to identify and enhance supply and service business opportunities.
That's key to our supply chain in the oil and gas sector, and this bill
apparently will help facilitate that.
We have
heard from industry and from those companies that support this industry that
they have seen over the last little while somewhat of a fall-off in regard to
their ability to get the majority or get a higher level of spinoff from the oil
and gas industry that has happened in prior years – especially when we've seen a
downturn in regard to some of the activity in this sector.
Some of
the larger companies do seem to bring others in from around the world and,
oftentimes, it could be of negative consequence to employees and companies who
provide those services here in this province. It's something as well we need to
be very vigilant of and it gets back again to the Atlantic Accord and being the
principal beneficiary of that Accord. It's important that we have those service
companies that do get access to the work and do it well. We also have global
contractors that often come in and, if we're not careful, they get a bit too
much of the work that's not supplied here by local contractors.
The
final one in terms of the mandate: will support government policy and
proprieties in the oil and gas through this, and it also talked about
implementation of Advanced 2030 in
support of business investment, industry growth and economic development. All
things that we believe are happening today, yet we're going to take this
division out and set up a different corporation which, from all we've seen,
would involve extra expense and we haven't seen yet what the return on that
would be, but maybe through Committee, in discussions, we will see that.
Currently, the legislation, the Oil and Gas corporation of Newfoundland and
Labrador, the corporation is to invest in and engage in and carry out activities
in the province and elsewhere, looking at things like exploration for the
development, production, refining, marketing and transportation of hydrocarbons
and products from hydrocarbons and certainly important research and development.
Now, we
would assume all of this is going on today and is being carried out. If there
are new ways that this is going to be enhanced through the setting up of this
entity, I guess we'll hear when we go through debate. There has been some great
work done, continues to be done and we have significant reserves out there. A
lot of the work has been done in terms of land sales, as I said, have proved
very positive.
In those
last couple of land sales, we've had some very big oil and gas companies from
around the world, new entrants, which gives an indication when things have
slowed a bit that those new entrants are coming here and see what the
possibilities are for development and they're willing to invest here. So that's
important. That's gone on even with the current structure and, from all we can
tell, has performed well.
The
corporation as well may engage in those other activities that the
Lieutenant-Governor in Council may approve. I guess that's related to maybe gas
or other entities but something we can talk about when we get to Committee.
The
legislation itself, as I said earlier, is not an agent of the Crown. It will
follow Newfoundland and Labrador Treasury Board policies and guidelines. The
Corporations Act will apply.
The Bull Arm Fabrication site, which exists now under its own corporate entity
under Nalcor, I understand, will be a subsidiary of this new corporation. Again,
it calls into question what's the set-up, what's the cost to do that and what's
the return on that investment to do this and to make that change.
The legislation also strives to ensure protection of
commercially sensitive information; that's outlined in the legislation. As well,
the Government of Newfoundland as shareholder will direct a dividend policy
through the Lieutenant-Governor in Council in regard to what's drawn down in
this entity at any particular time.
Now, there are some reporting requirements that are a
little bit different. I do believe the fiscal statements are on a calendar year,
but there is some interesting reference to the fact of making projections
available to the Minister of Finance early in the fall. I think it's September,
as opposed to current Nalcor not being required to do that. So those are some of
the items that are a little different in regard to this particular
Corporations Act and what the
requirements are under Nalcor and what the requirements will be under this
division of the Oil and Gas Corporation.
I mentioned before about the current structure the way it
exists. There are boards of directors and all those types of things. Under this
proposal that we're debating here, the Oil and Gas Corporation will have a new
board of directors which need to be established, which will be paid per diems or
resources or whatever's
needed for them. A seven- to 11-member board will be appointed through the
Independent Appointments Commission, with independent directors up to a
five-year term, so this is all new.
As well,
there would be, for the subsidiary, a five- to seven-member board with
independent directors up to a five-year term; that would be new. CEO and
directors of both may be the same but independent directors must be different.
Government may appoint a representative to the board which is non-voting. So I
guess that's where it's tied back to the minister in terms of reporting
structure that would provide possibly some feedback to the department.
But that
brings the question, if this entity now is going to be different than the
current Nalcor structure, which would report to a board, and the board would
oversee the CEO and the executive, this entity we're talking about here is going
to have to implement a new board of directors and have a CEO, but the direct
line is going to be to the Department of Natural Resources and the minister,
which kind of conflicts with the current set-up of Nalcor and how that
particularly works. I guess we'll see, as well, what the advantages will be of
that and how that operation will make it more efficient, more collaborative and
hit those milestones and agendas that we heard about in the briefing.
I
mentioned earlier with regard to the corporate structure, Nalcor Energy Oil and
Gas Inc., the existing investments that are done to date in our various offshore
installations and operations; 4.9 per cent in Hebron, 10 per cent in Hibernia
South extension and 5 per cent in West White Rose extension will remain with
Nalcor Oil and Gas. That's when I mentioned earlier – the minister mentioned as
well, I do believe – they will operate and manage existing equity assets of
Nalcor Energy Oil and Gas Inc.
So
everything to date will stay there. I assume, at the end of the day, the wealth
that will be generated from these investments would be held here and then – I
guess we'll find out in Committee – flow overall to Nalcor, and then at some
point there'll be a decision made of what dividends will be paid out from that
and paid back to the provincial Treasury.
Second
to that, which we're talking about here, the Oil and Gas Corporation which will
be new, and that's the one that's set up when I talked about the CEO, the board
of directors, brand new entity, which reports to the Minister of Natural
Resources. The Bull Arm Fabrication, which now exists today, will become a
subsidiary of this new entity, the Oil and Gas Corporation. The Oil and Gas Inc.
employees and responsibility for seismic exploration activities will transition
to the new corporation. So we don't know if there's new hiring, but current
staff that now exist will be transferred into, we were told, this new Oil and
Gas Corporation with those in the particular fields, in the area of seismic
exploration activities, those types of things. Certainly it is very important to
driving the industry and making it a success.
The new
corporation as well will hold and manage future acquisitions. We're heard before
Bay du Nord and any projects that are moving towards sanction, any investment
done in those, I assume, would come into this new corporate entity and would be
held there and the oversight there for them and the returns as well. As I said,
the Bull Arm Fabrication will become a subsidiary of this new corporation we're
debating.
We're
advised some of the things that had to occur as we move forward with this
particular bill were: name of the corporation; CEO and interim board to be
announced at a later date – there was no date given for that – implementation of
a shared-services model. Shared-services model is an interesting one because
when you're setting up a new entity – I'm not really sure on the shared-services
model that should already exist within Nalcor itself I guess in the various
corporate entities. So maybe we should do that already before building or
putting in place a new corporation.
Transition of employees to the new corporation – that will be the numbers that
have to be decided on all those expertise and the functions of this new
corporate entity, what will need to be transferred over to this new corporation.
As well, mentioned about appointments made. The CEO needs to be appointed and
any other appointments to the new board being set up – the two particular boards
because I think there's a Bull Arm Fabrication board and there's also a board
for the new corporation. So all of that will need to be done and I guess it's
being done through the Independent Appointments process.
The
minister went through some of the actual bill and the sections. I just want to
touch on a couple. This is at a high level and we'll get a chance to dig into
these as we go through Committee. We talked about the holdings, how the holdings
that are currently in place would be maintained in a holding company and, going
forward, any new investments would be overseen. The biggest question going
through, as I said before, is the amount of savings, where they're coming from
and why the establishment of this corporate entity is required.
In the
briefing, we were told that the savings would be the result of alignment with
government policies, I guess, human resource policy, they talked about Treasury
Board policy and shared services as I mentioned just previously. If you can
certainly demonstrate it, all things are certainly worth considering and we'll
see as we go through how that is explained.
In
regard to the bill itself, there are an interesting couple of components to it.
It talks about the property of the corporation is not the property of the Crown.
Maybe that's got something to do with the Crown and agency of the Crown and how
it's particularly set up, the reporting requirements with Nalcor today with the
CEO and board of directors, and how this is going to perform with, again, the
CEO and a board of directors, yet reports into the Department of Natural
Resources.
Property
of the corporation is not property of the Crown. If you look at the
Energy Corporations Act,
the property of the corporation is the property of the Crown, so there's a
difference here in where that's vested and the name of the corporation. So,
it'll be interesting to see when we go through discussion on that of some
questions, what that means, how that's a better fit in terms of what we're
trying to achieve, and the mandate of the 2030, as this current administration
has outlined in regard to oil and gas development and what's that going to mean
in terms of equity investments, where the equity investments come from, are they
accessible no matter where they're to in Nalcor. Certainly, dividends is a
question from the current structure of Nalcor to this new corporate entity, are
they going to change and is there any difference in how those dividends can be
drawn down. We talked about, too, the property of the
Corporations Act is not the property
of the Crown, as I mentioned, and that's going to be a question we can talk
about in Committee.
There's
a section 8 that talks about the
Corporations Act, the Lieutenant-Governor in Council and those types of
things and what's been done. So, there are questions about the power and
authority of the board of directors because ultimately decisions are made by the
Lieutenant-Governor in Council and there's also reference in the legislation to
the Finance Minister and to the Minister of Natural Resources.
So, if a
decision is made by this new board of directors of this new corporation, what's
their authority to make those decisions and can they make them without the
direction of the Minister of Finance and the Minister of Natural Resources? So
how does that flow in terms of the decision-making matrix for that corporate
entity when this gets up and running?
That
goes to the authority and directives that are allowed to be given. The term
directive is used in the legislation, and the minister having full authority
over the corporation, how that differs from today and how that's going to give
us a different result in some of the things we talked about earlier on why we're
here discussing this bill and what we intended to do in regard to changing some
of the efficiencies and how the operations take place.
There's
also reference in the bill related to, in addition to the directors, the
Lieutenant-Governor in Council or Cabinet can appoint a representative to be a
non-voting member of the board. I'd like to get some discussion in regard to
what that is and the rationale behind it. Can the minister indicate why there is
specification for these independent directors in the bill and what's hoped to be
achieved in regard to that?
We also
have in there about a subsidiary and setting up a subsidiary. There's reference
in the act to talk about – these are not contained, in my understanding, in the
Energy Corporation Act –
Lieutenant-Governor in Council approval to set up a subsidiary. So in terms of
why that's required here, it is certainly a change from the current legislation
that operates, why that would be so. It would be interesting to hear that.
These
are some areas that when we look at the bill going through, some of the
questions that would pop up and we've had interest in Committee of going through
that.
I
mentioned earlier about some of the reporting requirements and how that would
work. There's reference in the bill about the Oil and Gas Corporation, the one
we're talking about here under Bill 42, deals with budget preparations and those
types of things in that the budget must be provided to the minister by September
30 of any given year. Currently, under Nalcor and the current operations of this
division, I think it would need to be done by November 30. So I am curious again
on why that change and what's the intent here and what are we trying to achieve.
We
talked about the management of the corporation and the assets of Nalcor Energy
Oil and Gas, why would they not have the same date in preparation for the yearly
budget?
There's
also reference there in the legislation of the proposed bill to implement
multi-year budgeting for the new corporation. I'm not sure and I don't think
that currently exists under the current legislation that the Oil and Gas
division sits under, which would be the
Energy Corporation Act. So this seems to be changing the activities and the
requirements required for this entity, Oil and Gas, to produce multi-year
budgeting under this new corporation where, to the best of my knowledge, it's
not required under the current act which governs this activity. We'll ask the
question, I guess, is that something that's being pursued or being required and
maybe amendments coming to the Energy
Corporation Act in regard to that?
There is
also reference to annual reporting of the corporation. As we know, all
corporations or statutory offices of the House, at some point, need to report
here in terms of their financial management and what they're doing in that
regard. So that's similar to this bill. They would have to do that here as well.
The
Energy Corporation Act, which now
governs this activity, contains a section which allows the minister to direct a
corporation to provide additional detail. I'm not sure why there's not a similar
provision within this legislation to do that. Maybe it's there, but we'll
certainly be eager to see if that's there, and if not, why not?
There
are also sections that talk about borrowing funds, which are so important
because this is about our oil and gas sector. We've taken equity, I think, in
four different fields. You look at the return on that equity and long-term
planning and what it does for the province in getting that back and having a
revenue stream for future years.
This
particular bill, as I said, talks about borrowing funds. The language in those
sections, I think, is the same in many respects to the
Energy Corporation Act; however, in one particular section, when we
start dealing with it, it talks about: which allows the Government of
Newfoundland and Labrador to lend a corporation funds.
A
similar section contained is not in the Oil and Gas Corporation Act. As we go
through, we'll certainly talk about it, because that gets back to the point of
equity and how we get equity if we're going to – as we've done in the past –
look at investing, partnership and collaboration with oil companies and putting
in their share. How does that work, and what's the line between getting that
equity into that particular new corporation?
We've
known in here in the budget process over the past decade, we often come in here
with the Estimates, and we look at the Finance Department or Natural Resources
and look at monies that are allocated to go into particular activities at
Nalcor, the umbrella company, and some of that may include equity. So that's
outlined. So, I guess, the process as we go through with this new corporation,
what's the role for that and how will that be done? That's an important one when
we look at equity and what we're doing.
We
understand – or I guess we don't really understand yet – the need for this
entity to be set up. We heard early on in our briefing about what the intent is
here and what they're trying to achieve in regard to this. Again, I get back to
the old saying: if it's not broken, where's the fix needed.
So, I
guess as we go through the minister will outline what the concerns are with the
current set up, why we're not achieving the milestones or the areas of success
we should be achieving. This will be a greater means to facilitate that and to
enhance greater exploration, to enhance greater production, to enhance a key
component which is R&D, research and development, which is applied research
development, which is so important to this industry.
We saw a
lot of that under the Research & Development Corporation, which no longer
exists. That was wiped out by the current administration, but we used to partner
with the private sector to be able to extract greater private dollars and less
public dollars to drive applied research in industry which is so different. I'm
interested to hear, too, as we go through how that is going to improve from the
research and development point of view to drive our industry.
Collectively, I do agree with the minister that it's a bright future in terms of
this industry. We have to manage it well, but we don't need more regulation or
more bureaucracy if it's not required. We need to be efficient. If there are
changes we can make, I think on this side we'll certainly support those, but
they need to be changes that are done for the good of the industry, for the good
of those involved with it, and, at the end of the day, for the people of our
province to ensure we get the maximum return most efficiently and as
beneficially as we can for all our sakes.
So, with
that, Mr. Speaker, I'll conclude my remarks on Bill 42. I certainly look forward
to further debate and then we move into Committee and have some questions.
Thank
you very much.
MR. SPEAKER:
Thank you.
The hon.
the Member for Placentia West - Bellevue.
MR. BROWNE:
Thank you, Mr. Speaker.
It's
certainly my pleasure to rise and hear my district name being referred to
correctly. Burin - Placentia West is something of a bygone era. So it's good to
be referenced as Placentia West – Bellevue, but I'm always here to help educate,
Mr. Speaker.
I won't
digress. I just want to pass some comments, Mr. Speaker. Of course, the minister
has spoken at length to this piece of legislation, as has the Opposition critic,
but I do want to speak specifically with respect to Bull Arm which falls under
the District of Placentia West - Bellevue.
There is
so much oil and gas activity happening in Placentia West - Bellevue, Mr.
Speaker, from the Bull Arm Fabrication site to the North Atlantic refinery, to
the Cow Head facility with Kiewit constructing living quarters for the Husky
project. So this is certainly a very big issue for my district. I believe the
separation of the Oil and Gas Corporation and division from Nalcor will be a
positive step for the people of Placentia West - Bellevue, and the province as a
whole, and for creating employment and business opportunities across
Newfoundland and Labrador.
Mr.
Speaker, Bull Arm is Atlantic Canada's largest industrial fabrication site and
strategically located to service the offshore oil and gas industry. The site was
constructed in part as a strategic initiative to foster growth in Newfoundland
and Labrador's oil and gas industry and has played host to multiple oil and gas
projects over the last 20 years. Of course, we would all know the Hibernia
project that was constructed there, the Hebron project that was constructed
there, and, of course, other smaller jobs have been done there, just as is
currently being done now.
The site
spans over 6,300 acres and has significant infrastructure to support fabrication
and assembly in its three key project areas: fabrication yard, the marine
facility and the deepwater site.
In
December of 2018, I was very pleased, Mr. Speaker, to inform my constituents
that DF Barnes had successfully been awarded a contract by Seadrill, which
brought the West Aquarius ultra-deepwater semi-submersible drilling rig to Bull
Arm. The Bull Arm Fabrication Inc. then signed a short-term agreement with DF
Barnes for the fabrication yard and associated pier to complete that work which
is ongoing.
The site
infrastructure and location offer a unique opportunity for a wide range of
potential uses including fabrication, the supply and service requirements of
exploration drilling programs and other opportunities related to industry
diversification. It is a government-owned assist which supports these
fabrication capabilities and potential growth in the oil and gas industry. As a
subsidiary of the new corporation, Bull Arm Fabrication Inc. will also support
the implementation of Advance 2030 and
the Oil and Gas Corporation's broader mandate to enhance supply and service
business opportunities.
Mr.
Speaker, as we embark on Advance 2030,
which is our ambitious plan for the year 2030, it is very important – I believe
Bull Arm will be a key facet of this, which is why I'm glad to see it is being
included in what is being removed from Nalcor Energy as it stands now, because I
think it's fair to say that Nalcor has had its hands full with other files over
the last number of years. This will finally, I firmly believe, give it the
attention it truly deserves.
In 2015, Mr. Speaker, resource assessment of an area of
Newfoundland and Labrador offshore spurred renewed optimism for the long-term
future of the province's oil and gas sector.
In December of 2016, our government established the Oil and
Gas Industry Development Council under the leadership of the Minister of Natural
Resources to support the positioning of our province as a globally preferred
location for oil and gas development. We then made a commitment, and the Council
made a commitment, to create a long-term vision of the province's oil and gas
industry with a focus on
promoting development, competitiveness and sustainability.
In the
past 18 months, government has announced over $18 billion of investments in
mining and oil and gas projects in our province, and people say: Well, is there
mining in Placentia West - Bellevue? Of course, Mr. Speaker; we're home to the
Long Harbour nickel processing plant, which will see even more longevity now
that Vale has announced it's going underground – terrific, terrific news.
To
conclude, when we talk about Advance 2030,
it is our plan that we will have over 100 new exploration wells drilled,
multiple basins producing over 650,000 barrels of oil equivalent per day,
shortened time from prospectivity to production, direct employment of more than
7,500 people in operations, and a robust, innovative global supply and service
sector and commercial gas production. By creating a stand-alone Crown
corporation that is dedicated to advancing our oil and gas industry, we are
taking the appropriate steps forward to succeed in our government's vision.
I will
conclude by saying that I'm very pleased with these developments. Bull Arm and
its future has been an important component of our government's thinking for the
future in our oil and gas industry. The Minister of Natural Resources and I have
visited Bull Arm several times over this term. We, just a month ago, went out
and met with the local councils of Sunnyside and Come By Chance and Arnold's
Cove, Southern Harbour and Chance Cove to discuss the future of Bull Arm and get
their input. It's very important because those are the communities that surround
this top-notch facility.
We're
very confident that there will be a bright future. I'm very confident that there
can be a future where there is work, where people can gain employment there and
service those communities, because the business community that surrounds it
relies so heavily on it, and it's so positive when things are happening at Bull
Arm. Even people who are renting homes, all of that benefits when Bull Arm is in
full swing, and that's what our objective is and that's why we started the RFP
process and the EOI process through Nalcor back in the spring of 2018, so we're
working through those processes. It's important, though, to get the decision
done and the decision done right. That's why the minister and I have been
working closely with those communities to consult with them on the future.
But
today is a step in the right direction. Bull Arm shouldn't be jumbled up with
everything else that's happening at Nalcor with respect to Hydro and other
projects. It should be part of a stand-alone Oil and Gas Corporation, and I
fully support this bill and I thank the minister for introducing it.
Thank
you, Mr. Speaker.
MR. SPEAKER:
The hon. the Member for St.
John's East - Quidi Vidi.
MS. MICHAEL:
Thank you very much, Mr.
Speaker.
Glad to
get a chance to speak to Bill 42. It's hard to know what to say, really, because
I'm not really sure what government is about and why they're doing what they're
doing. I want to thank the minister for the briefing that we had and certainly
the people from the department were able to present the legislation to us very,
very well. But I find that today here in the House of Assembly we really have
not heard from the minister why this action is being taken, as has been
explained by the minister and spoken to by a couple of my colleagues already,
especially the critic from the Official Opposition.
This new
corporation is not a body that's doing new work. It's a body that will be doing
exactly the same work that Nalcor Oil and Gas performs. So what we don't have
from this government is an answer to the question why. Why are they taking
Nalcor Oil and Gas out of Nalcor as an active body and creating this new entity?
We were led to believe by government that there's going to be nothing different,
that there will be nothing different in terms of personnel. Nalcor Oil and Gas
is already physical; it's a physical entity that exists. The offices are on
Hebron Way. You'll have the same people doing the same work.
Government says nothing's going to change, except we did find out in Question
Period that it is going to cost money initially, that this company, initially
coming out from under Nalcor doesn't have any revenue. It will not have any
revenue from Nalcor, because that link will be broken with this company now
standing on its own as a Crown corporation and not an agent of government. So we
found out in Question Period that, yeah, it's going to take money from
government to help this new company stand on its own two feet. We don't know how
long that's going to take before it brings the benefit to the people of the
province that the minister is so convinced that it's going to do.
I do
know that Nalcor Oil and Gas has done good work and certainly, in the area of
exploration, that's been the star of Nalcor Oil and Gas is the exploration and
the seismic exploration. Now, I do have questions about seismic exploration;
that's a whole different issue. And it does bother me that we are so much into
seismic exploration without there really being a study by government, and I mean
on both levels, federal and provincial. I think the C-NLOPB should be into this,
looking at the impact of seismic exploration on our fishing industry, the impact
of seismic exploration on fish stock and on the life of the ocean.
There is
lots of research around that indicate we just shouldn't take it for granted. We
shouldn't think that seismic exploration does not affect fish stock and other
life that exists on the ocean bed and within the waters. That's another whole
issue. Seismic exploration has discovered – there's no doubt – wonderful
resources of both oil and gas; we know that. I have heard of at least one
company that has said publicly that it came here because of the seismic work
that was done and the knowledge of what resources are out there.
So, I
have to say that I have mixed thoughts when it comes to the whole thing of
exploration. I know oil and gas is a tremendous resource for our province. I
know that it's certainly a tremendous resource also for the companies that are
out there, but the further away we get, the more we get into deepwater, the more
we get to where we know that there are big resources, the more I'm concerned
from the perspective of occupational safety, from the perspective of
environmental safety.
We have
a lot of issues to deal with, and I'd like to use this opportunity to say that
if we think it is so important to create a new company as a Crown corporation to
deal with the issues of exploration, and more than exploration – I know that
there's more than that in the objects of the company – if we believe that, that
it's so important, why is government not also looking at having an independent
agency in our province with the federal government dealing with the issues
around occupational health, safety and environmental good? I think that also is
important.
I think
we should have an arm, a separate arm, an arm separate from government, an arm
totally independent that's dealing with that issue. And the more we get into
exploration, the more we get into what the minister is hoping this company is
going to accomplish, the more we need to do the other as well.
The
minister has said that government is pulling out the oil and gas component of
Nalcor, making it directly responsible to the Department of Natural Resources
and that that will accelerate the growth and opportunity of our petroleum
industry returning significant value to the province. Now, I would like to see
from government the proof that that is going to happen. There is no doubt that
the work in seismic exploration has been very helpful. I really recognize that,
but I am not sure that this company will accelerate the growth and opportunity
of our petroleum industry.
One of
the things that does concern me is after everything we've been through with
Muskrat Falls, after everything we have been hearing and continue to hear from
the inquiry with regard to our being in an area where we did not have people
with expertise involved in decision making, where we got into an area where we
tried to become the actors in the industry, as it were, without the expertise,
it concerns me that we now are taking Nalcor oil and gas, taking it out from
Nalcor, setting it up separately with great expectations about what its role is
going to be as we continue in oil and gas.
If we
look at the objects of the company, which are no different than the objects
actually of the current company that exists – I just want to get it so I can
quote directly from the objects. Section 7; the objects of the corporation as in
section 7. “The corporation is responsible for investing in, engaging in and
carrying out the following activities in the province and elsewhere,” – not just
in the province – “and elsewhere, in accordance with the priorities of the
government of the province: (a) the exploration for, development, production,
refining, marketing and transportation of hydrocarbons and products from
hydrocarbons; and (b) research and development.”
Now,
that's the same. Those objects are the same as the company that already exists.
So knowing that we already have a company with those objects, knowing that
basically – except for some small changes – what exists in this act is what is
in the energy act, what is it we're doing here?
Government has said, and the minister has said – and I think maybe the Premier
as well when talking about Muskrat Falls – that after Muskrat Falls starts
producing power in 2021 that government is going to be looking at the
dismantling of Nalcor. So maybe this is the first step; maybe this is the first
step in the dismantling of Nalcor.
The
minister hasn't said that. Maybe she'll say that before she's finished, because
we really don't know why all this energy is going into, and no pun intended –
why all this energy is going into the creation of a new entity that is going to
need government assistance initially. It's actually going to need government
money. It's going to need revenue from government because it will not have –
initially, it will not have any revenue of its own; yet, somehow by carrying out
its objects, apparently there's an expectation that this company is going to
have major revenue.
We know
they're going to be able to invest. We know they're going to be able to get
loans, et cetera. It's very interesting actually, that even though it is not an
agent of the government and even though because of that government has no
responsibility for its liabilities that may occur with this new company, it's
very interesting to note that the bill allows for performance guarantee. What
that has to do with is the provincial government guaranteeing the performance of
the company.
I'm
going to read this section because it's very interesting. Here is a company
that's not an agent of government. Government will not carry its liabilities,
except it will if it becomes a guarantor. The bill says: “Subject to the prior
approval of the Lieutenant-Governor in Council, the Minister of Finance acting
on behalf of the Crown may guarantee the performance by the corporation or a
subsidiary of an obligation of the corporation or a subsidiary contracted by it
with a person (a) to pay money or an instalment; or (b) to perform, fulfil or
observe a covenant, obligation or provision of an agreement, deed, bond,
promissory note or other document or instrument.”
Section
40 goes on to say: “A payment or advance that the Crown may approve in the
exercise of a power conferred by this Act or be required to make under this Act
shall be paid by the Minister of Finance out of the Consolidated Revenue Fund
or, where the payment is to be made in performance of a guarantee, it may be
paid out of funds provided in a manner prescribed in section 55 of the
Financial Administration Act.”
So this
company has nothing to fear, does it? This company, which is being set up as a
Crown corporation that is not an agent of government, that doesn't come under
government, it is responsible and accountable to the minister but stands on its
own, and supposedly whatever they do is not a liability. Their liabilities are
not a liability of government. However, if they fail in a performance to meet
the requirements of contracts that they are under, and they may not be able to
maintain their own responsibilities, financial responsibilities, government will
step in and government will take care of that out of the Consolidated Revenue
Fund, or out of public money, period.
This
company hasn't got to worry about anything. Initially, all its revenue is going
to come from government. If somewhere along the line they really fail badly,
money will come from government to bail them out because government will be
their guarantor. So I really and truly have concerns. I mean it's no different –
the company they're setting up is no different than what exists at the moment.
We know that. So why do it? And why do it when it's going to cost government
money?
Now, we
got another answer today in Question Period from the minister, too, when she
talked about what will happen to the money that comes from the equity shares we
hold. The answer is that will be used to mitigate the electricity rates from
Muskrat Falls. So that money which is coming in from equity in oil and gas will
go towards the mitigation of expenses related to Muskrat Falls, and government
will spend more money to go towards this oil company that they are setting up.
I'm
hoping that before we're finished the debate I may have a clearer answer as to
why government is doing this. One would think it's so that there will be a
financial benefit for the people of the province, and that's what the minister
has said, but I haven't been given the proof to show that that will happen. As I
said, there's one area in particular where the government has been proactive
through this company, and that is in seismic exploration. But when it comes to
everything else that I read out, I'm saying, really – really and truly, is this
company going to be involved in exploration for development, production,
refining, marketing and transportation of hydrocarbons and products from
hydrocarbons – really and truly? What other research and development is it going
to get involved in besides the seismic exploration? Where is the money going to
come from for them to go in the direction that the bill is suggesting?
I want
to know if government is looking at, down the road, there being no Nalcor, where
is this company going to stand? I want to know that. I know it's going to stand
outside of Nalcor, but where is it going to stand when it comes to being
fiscally solid? I don't see where that's going to happen. I can't see where
that's going to happen, and I would very much like government and the minister
to tell us where all her optimism comes from. Where does all that optimism come
from, and why put all this energy into setting up the new company?
I look
forward to hearing some answers with regard to that, Mr. Speaker. As I said
earlier, the minister has said there were changes coming to Nalcor when Muskrat
Falls is online, and perhaps this is the first big change. So what's ahead, I
ask the minister, when she continues in debate with us? What's ahead, the sale
of the rest of Nalcor's operations? Muskrat Falls being sold to the private
sector? Newfoundland and Labrador Hydro going? I certainly hope not. These are
not things that I want to happen.
Has this
division been taken out and made to stand alone because government has no plans
of selling it, but does have plans of privatizing Nalcor's hydro line of
business? These are questions that come to mind as we search for an answer as to
why government is setting up this company the way it's setting up.
As I
said earlier, I think much of what's in this bill is identical to the clauses
found in the 2007 Energy Corporation Act
which established Nalcor. The main difference is the removal of references to
Muskrat Falls or hydro development and transmission, because, of course, the act
covering this new company will not be dealing with Muskrat Falls or hydro
development and transmission. But everything else that's in is just about
identical to what's in the Energy
Corporation Act.
The
thing that concerns, of course, is that once again we're going to have a Crown
corporation that has total protection when it comes to commercially sensitive
information. I'll make more reference to that in Committee because I have
questions on it, but I have to question why this company is going to be – as
Nalcor is –totally protected when it comes to ATIPP requests, people looking for
information, when it comes to what is identified as commercially sensitive
information.
If
somebody appeals to the Privacy Commissioner – if a request is made and they
don't get the information, this company, all it has to say to the Commissioner
is we have done a study of the request and we are telling you we've done it and
that there is commercially sensitive information that's stopping us from sharing
what the requester is looking for.
They do
not have to prove to the Commissioner the facts that they used to determine
that. They will be totally protected and if they don't get an answer, the same
thing that happens with anybody looking for it from Nalcor, if they don't get an
answer and they want to appeal what's happened, then they would have to go to
court.
This
total protection, another Crown corporation, when it comes to commercially
sensitive information getting more protection than any other public body – all
other public bodies are under ATIPP but this company will continue to not be
under ATIPP and will have that complete protection.
So these
are the comments for now, Mr. Speaker, and I look forward to getting at details
in debate.
Thank
you.
MR. SPEAKER:
Thank you.
The hon.
the Member for Conception Bay South.
MR. PETTEN:
Thank you, Mr. Speaker.
It's a
pleasure to get up and speak on Bill 42. I won't take that much time, I don't
think, but I'll just speak about a few issues on the bill to establish an oil
and gas corporation. As has been stated, it's going to be separate from the
Nalcor Energy and, as we are aware, we're not sure what it's going to be called.
Mr.
Speaker, speaking of this, I guess the question comes to mind when I listen to
the commentary and different speakers is why – why is this being done? There can
be many reasons why. I know there has been lots of reasons, I suppose, given or
rationales, but I guess the question comes up to why are we – we have a Nalcor
Energy Oil and Gas Inc. with existing equity interests of Hebron, 4.9 percent;
10 per cent, Hibernia South extension; 5 per cent, West White Rose. They'll
remain with the Nalcor Oil and Gas, but any new acquisitions, possibly the Bay
du Nord as well, will go with this new Oil and Gas Corporation.
I know
maybe it has to do with cash flows or to have investment monies, but why not
keep it all under the one – because we're talking about the same thing. You're
separating one group of equity investments with another group. I guess going
through some of the speaking on it and listening to speakers ahead of me and
reading the notes myself, that's something that I questioned. I think it will be
in Committee and I suppose we'll hear that eventually and it's probably been
said, but I'm not so sure if we are reducing any of the red tape, unless there
are extra layers of bureaucracy within government.
We all
know, and we speak about it many times and it's been said, red tape commentary
has been used on many levels of government for many years and it's always an
effort for red tape reduction initiatives. For some reason, it gets more and
more and more red tape.
I come
back to the day when they invented the computers; we were going to have less
paper. I think we have way more paper than we ever had in the computer age. So,
the same thing with governments, I guess, and sometimes these decisions are made
within government and it makes a lot of sense and they make a good business case
and you can see the rationale.
Some of
this is kind of a duplication of services, I guess, is one way of putting it.
The necessity of having two different businesses doing the same thing,
basically. Under the Oil and Gas Corporation they're going to have the Bull Arm
Fabrication site as part of this Oil and Gas Corp. But, right now, the way it
stands, the previous speaker had mentioned: Isn't it working? Isn't what we have
there now working? So why we're changing are some questions that we'll get to in
debate.
We're
going to have a new CEO. We're going to have a new board structure. There's a
cost associated with all this, Mr. Speaker, and that cost will be provided in
future times but, right now, it will cost money. It will cost extra money and
what are we going to get different? What's going to be different? At the end of
the day, we're going to have two different businesses doing the same thing.
So, I
guess, if the current structure is working, why would we change it? That's one
question I'd have, and the cost of a new board. As I said, current equity
investments remaining with the Oil and Gas Inc. and Bull Arm and future
acquisitions will fall under the Oil and Gas Corporation, but why the
separation?
As has
already been stated, that's – I don't understand the separation, why we're doing
that separation. When you go in and you read into government and try to follow
your way through government departments and people on the outside try to figure
out the lines of business and what we do and where to go, it's not an easy
process for most people. It takes a bit of manoeuvring around. Even us people
here in the Legislature, our day-to-day jobs looking after our constituencies
requires us to know our way through government, that's pretty challenging. I've
been at it for a lot of years, even before I was elected, and I'm still stumped
most every other day on where to turn next.
So, if
these two lines of business, the corporation and the Oil and Gas Inc., were
doing something different and clearly streamlining something, I get that, but I
don't see any streamlining here. I see this as being the same business being
split into two with extra costs, like I said, for board, CEO and now we're
splitting up our equity. It don't make sense on the surface, but there may be
some good, sound reasons that we have not, or I'm not aware of, or I don't have
my head around yet, but I have yet to see it. I've read all the documents, the
deck that was provided through the briefing. So, I guess, time will tell with
that one, Mr. Speaker.
As I've
said, I don't have a whole lot more to say. I guess that was really where my
concerns were after listening to the other speakers is, I guess, to sum it up is
we have two businesses, basically, going to be doing the same thing with extra
costs, more duplication, probably more layers, more red tape, and my simple
question to all that is, I don't understand why. I look forward, possibly, in
Committee that we may find more answers.
On that
note, I look forward to Committee.
Thank
you very much, Mr. Speaker.
MR. SPEAKER:
Thank you.
The hon.
the Member for Mount Pearl - Southlands.
MR. LANE:
Thank you, Mr. Speaker.
Glad to
stand and speak to Bill 42. I will say that while I have questions like
everybody else does and we'll certainly get to those in Committee, and perhaps
I'll be asking some of those questions or perhaps my colleagues in the Official
Opposition will probably have most of the questions asked and the minister will
have most of the questions answered before it gets to me, but we'll see what
happens.
I will
say that, in principle, I don't have a problem supporting this bill. I just
heard my colleague talk about: Why do the split? I've heard a question about:
Why is the money that's coming in from our existing oil fields and projects
which are up and running, why is that money continuing to flow to Nalcor, as
opposed to go to the Oil and Gas Corporation?
I would
think – and this even goes back to Muskrat Falls, when Muskrat Falls, prior to
sanction, it was said that oil and gas could – I heard former Premier Williams
say it – be used to help supplement rates and so on. I'm assuming that a lot of
the oil and gas royalties and equity shares and so on, from what we actually
have up and running, that some of that money is going to go to help subsidize
electricity rates, along with some of the other things that are being proposed.
The
minister can answer that question, but that would be my take on at least one
reason why we might be doing that and if we need to generate revenue somewhere,
I mean, when we're talking about electricity rates and keeping them down, we're
talking about generating revenue. Well, revenue has to come from something. So,
if it doesn't come from oil and gas, it has to come from taxpayers. We're told
it's not going to come from taxpayers. So, it would seem logical to me that some
of this oil and gas revenue from existing projects is going to be going towards
mitigating electricity rate. That would seem logical to me.
I see
the minister nodding her head, so maybe I'm on the right track with that
assumption but we'll see and, again, I wouldn't have problem with that.
I've
heard it said: Well, there's going to be duplication. I don't know if I
necessarily see that as duplication because if you're only taking someone from
under the umbrella of Nalcor now, albeit in a physically different building, and
they're here today and they're going to be here tomorrow, I don't know where the
duplication is. It's not like we're going to keep the people here and call them
Nalcor and create a new entity and call them oil and gas, now we have two
players doing oil and gas. It's only one. It's the same people; it's just under
a different entity. So I don't see duplication.
If
anything, I can see an opportunity as we go down the road – and, again, the
minister can comment or not comment as she sees fit. But I suspect when Muskrat
Falls is complete, there's going to be an awful lot of people that are currently
engaged with Nalcor, whether as employees or embedded contractors or whatever,
who will no longer be, and really we're going to have the oil and gas and we're
going to have Newfoundland and Labrador Hydro primarily, to my mind. I'm not
sure what else there would be.
So, I
could see at some point in time an opportunity to clean house, if you will –
I'll use that term, and I don't mind using that term because I'm very, very
frustrated; I think there needs to be major house cleaning. But I could see
where, why do we need to have then Newfoundland and Labrador Hydro and Nalcor?
Why do we need to be paying a CEO of Nalcor $650,000 a year plus benefits and
everything else to oversee Newfoundland and Labrador Hydro, particularly if oil
and gas is on its own? I don't see that; I don't see all the staff and two lots
of communications staffing it.
I can
see where we can find an awful lot of efficiencies in Nalcor, because that
second, larger entity is not going to be needed, I don't believe. That would be
my thought, and I think maybe that's where we're headed, but maybe I'm wrong.
Bigger
is not always better, Mr. Speaker. We saw that with the English School District.
We saw that when we brought all the school districts together and we were going
to save $2 million at the time. We were going to save a pile of money. We
actually spent more money, I believe. And then, of course, we seen the incident
that happened not too long ago, that unfortunate incident with procurement with
the English School District and the wheelbarrows and all this outrageous stuff,
and at the time the CEO said that it was so large and trying to manage
everything that I couldn't really manage it or get a handle on everything and
things got out of control. So, bigger is not necessarily better. Having two
entities in this case makes sense to me as well. While there will be obviously
questions about it, I think in principle I don't have a problem with it.
Now, I
will agree with my colleagues over here when they say, you know, if you're
saying that government is saying they're doing this because they want to place
more focus on oil and gas, I don't know if I necessarily buy into the focus on
oil and gas because, to my mind, the people who are under the current umbrella
in oil and gas as part of Nalcor, they're already supposed to be focused. If
they're not focused then we got a problem, we got a human resources problem,
because they should be focused in any case. I'm not sure how this makes them
more focused than they should already be focused.
I
understand having a board of directors. Now that kind of makes a bit of sense to
me, because if they were going to report to a board of directors whose sole
focus is on oil and gas as opposed to oil and gas and electricity and wind power
and everything else, I can see at the board level – I could see an issue with
focus, but on the staff level they should be focused already, but on the board
level I could see placing that focus.
I
support what we're doing with our oil and gas industry, and it's growing and
we've seen record land sales and so on. We have a bright future in terms of oil
and gas. I don't think anybody denies that.
I went
to a briefing a while back at the Natural Resource's building. I'm going to say
two or three months ago, you lose track of time, but it was when we had the
latest announcement. I think I was told the actual discoveries that we have now
only represent about 7 or 8 per cent or something of what is believed to be
there. So we're only at the tip of the iceberg when it comes to oil and gas and
opportunity for our province. There is no doubt the future will be bright in
that regard, I really believe that.
I
certainly support the notion of being more aggressive and, as we say, very
focused on our oil and gas. Having a board doing that, that's solely focused on
that, on the board level that would make sense to me. On the staff level, well,
they should already be focused. But on a board level it does make sense.
Now,
obviously, we need to ensure – unlike what we've heard in the Muskrat Falls
Inquiry, on the electricity side of things we need to ensure that people who are
on this board have the expertise. Because what we've learned through the inquiry
on Muskrat Falls is that there were people on the board who did not have
expertise. As a matter of fact, there was a period of time when they said there
was only like two board members or something there, which you wonder why
everything was out of whack and went out of control and everything else. There's
an answer for you there.
If we're
going to have this new board, we need to make sure we always have everybody in
place and we have to make sure that the people who are on that board are
actually qualified and have the expertise in the various aspects of the oil and
gas business to make sure they're making the right decisions for the people of
this province.
I just
say to the minister, and I'm sure – she's nodding her head. I think that's only
common sense stuff, but when I say it is common sense stuff, you would have
thought that when we were talking about the Muskrat Falls Project and the Nalcor
board of directors, you would have thought that that was in place too. I
certainly did, but what a surprise we all got – a $12.7 billion surprise. So I
would make that point.
The only
other thing I want to raise at this point in time that I am a little troubled
about, have a concern about, is when it comes to the legislation which will be
governing this, it would seem to me, from what I gathered at the briefing, that
we're in a very similar boat as we are with Nalcor – if not the exact same boat
– around access to information and so on. That was the impression. The minister
is nodding her head no. So she can answer that when we get to committee, I
appreciate that, or when she gets up to speak to close debate.
Clearly,
the impression I got – maybe the people that were doing the briefing were not
necessarily up on that aspect to the level they should have, you know, they
would have been, but the impression I get is we're in a very similar boat. So I
think unlike Nalcor, this entity you should be able to go through a regular
ATIPP request like any other government department and let the Privacy
Commissioner, not somebody at the Oil and Gas Corporation, like right now
someone at Nalcor – not someone at the Oil and Gas Corporation, but you could
appeal to the Privacy Commissioner to say, I asked for this information, and let
the Privacy Commissioner determine whether or not he or she – because I'm not
sure if we filled that position yet – but let the Privacy Commissioner decide
whether or not that information should be released; not some CEO or vice
president or whatever at the oil and gas corporation. It's not their decision.
The
Privacy Commissioner on an appeal, because we've seen too much hidden
information at Nalcor. If we're going to start with a fresh slate, a clean
slate, let's do it right. I understand the need for commercial sensitivity. So
does the Privacy Commissioner by the way. The Privacy Commissioner understands
the need for commercially sensitive information to be protected. That person's
job, expertise, is to adjudicate that request, make that determination.
Let's
have the Privacy Commissioner do it, not the CEO or VP or something of the Oil
and Gas Corporation. I would say to the minister, if that's not what's in place,
if you're envisioning doing the same as we've done with Nalcor under the
Energy Corporation Act, let them hide
whatever they want, we're not off to a very good start if we're going to
continue on with that practice. So I would certainly hope, and I would have
questions around that aspect of the legislation.
The
other thing I want to raise as it relates to oil and gas in this, not
necessarily contained in this bill but it is covered in the bill, it's related,
is the whole concept of – because we talk about getting equity stakes, that this
organization could enter into equity stakes and negotiate royalties and benefits
and so on. One of the key things we need to ensure, which a lot of people would
argue has not always been done to the degree in which they would like, at least,
is ensuring local benefits agreements for our oil and gas, and a stronger focus
on local benefits.
A lot of
people would say, you know, I can't eat GDP, and they're right. I can't pay my
bills with GDP. They say: oh, well, the GDP is after growing, so what? I need a
job. I need a good paying job. So every opportunity for every single job related
to oil and gas for Newfoundlanders and Labradorians, that's what we need to
ensure.
I've
heard from people in the oil and gas industry working on supply vessels and so
on, who've told me, rightly or wrongly, but have told me – I've written the
minister about this – there are a lot of jobs that should be going to
Newfoundlanders and Labradorians, that at some point were, but is not
necessarily the case now; that there are a lot of people from all over the world
working on these supply vessels and so on.
It might
be a Newfoundland company, it could be a Newfoundland company that got the work,
but then they find a loophole to hire a bunch of people under a Newfoundland
company name, and hire a bunch of people from all over the world, everyone
except Newfoundlanders; which is not in the spirit of these agreements. The
C-NLOPB are not doing a very good job in enforcing these benefits agreements.
That's what's been said to me.
Now, I
have no documented proof, but I have gotten calls from time to time from people
in that industry who have told me there are definitely jobs that should go to
Newfoundlanders, and where the spirit and intent was to go to Newfoundlanders
offshore, and those rules have been circumvented and so on through loopholes by
our own people, our own Newfoundlanders, basically shafting our own people out
of jobs by finding a loophole to hire people from other countries to come and
work on their vessels or whatever instead of hiring local Newfoundlanders and
Labradorians to do it.
That's
the allegation that's been made to me on at least three occasions by different
people. I can't say for sure it's true, but I do put it out there. We need to
make sure with oil and gas, and everything for that matter, but we're talking
about oil and gas, that if we're going to negotiate benefits agreements offshore
and so on, we maximize for our people for jobs and we make sure that those
agreements are reviewed regularly and ensure that the C-NLOPB are doing their
due diligence to make sure that they are being followed to the letter of the law
and the intent and the spirit to make sure that the jobs are going to
Newfoundlanders and Labradorians, as much as is possible.
Same
thing when it comes to onshore jobs. I think about the issue with the gates in
Argentia and so on, and other things where there are people saying we don't have
the facilities for this, we don't have the facilities for that. The laydown yard
can't come here because we don't have anywhere developed enough to allow it, or
we don't have the equipment that's needed on this site to allow for this type of
work or that type of work.
Part of
the thinking and the long-term thinking for this oil and gas work has to be if
we don't have capacity, we need to start investing in capacity, or part of the
agreements has to be, you need to invest in this or you need to invest in that
so that when the next project comes around, we do have capacity as well as
expertise.
These
are the important things. It's simply putting out more licences, drilling more
oil and more royalty checks – that's fine for the provincial coffers, God knows
we need it. But the average person, in order to support their family, needs a
job.
I hear
my colleague all the time from St. John's Centre talking about put up the
minimum wage, put up the minimum wage. I would argue that our focus should be on
creating good jobs that we don't need to worry about the minimum wage and leave
the jobs in the service industry and so on for students to make some pocket
money or to help with their education and let's create good jobs so that the
average person trying to raise a family is not dependent on minimum wage jobs,
there are actually good-paying jobs for them. That's the answer, to my mind at
least.
Mr.
Speaker, I see I'm running out of time. Again, I would say that while I have
some questions, as everyone does, about this, I can see an opportunity for more
focus through a board of directors that's focused on that. I really don't see
any big, additional expenses that are going to come from this. It's basically a
transfer of a different name, a different entity. And I do see a big
opportunity, not in this particular move, but I do see a bigger opportunity,
once we take this out to look at it and say, now, what's left, and do we need
Nalcor and Newfoundland and Labrador Hydro. Do we need the two of them? I say,
no, we don't. I hope that that's where this is heading. I think that's where it
needs to go.
Thank
you, Mr. Speaker.
MR. SPEAKER:
Thank you.
If the
hon. the Minister of Natural Resources speaks now, she will close debate.
The hon.
the Minister of Natural Resources.
MS. COADY:
Thank you very much, Mr.
Speaker.
I want
to thank my hon. colleagues for what I thought was a good discussion this
afternoon. Specifically, I want to call out the MHAs for Ferryland, for
Conception Bay South, for Placentia West - Bellevue, for St. John's East - Quidi
Vidi and, of course, Mount Pearl - Southlands. I thought there were a lot of
points made this afternoon, good discussion points. I'm going to try and in a
very short period of time, because I'd love to get to questions, try and answer
some of what the questions were this afternoon.
But
first I want to quote someone this afternoon who is very much involved in the
oceans industries, in oil and gas, and that's Charlene Johnson, as CEO of NOIA.
And she said this afternoon: For me, sole focus on industry is critical for the
province and having sole focus on oil and gas is very positive. So she sees this
and I know that members of the Canadian Association of Petroleum Producers and
NOIA was present today, members of the oil council were present today, and they
were speaking in favour of this, what I'm going to call, renewed, really good
focus and ensuring that we have, what I'm going to call, is the opportunity now
to continue to grow our industry.
I would
like to say – one of the first questions was why. Why are we doing this? So
allow me to give you five reasons. And there are more, but I'll give you five.
First of
all, I see the big benefit of doing this is it really does focus on what 150
stakeholders in our province involved in the oil and gas industry said, that we
could advance our offshore oil industry, we can develop it further, we can focus
on exploration, focus on – and I give kudos to the Member for Mount Pearl -
Southlands when he talks about the focus being on growth of the supply and
service industry, he talked about that, and he talked about what the opportunity
is here.
I'm
going to say, so the Advance 2030,
that 150 stakeholders in the oil and gas industry said with more effort, with
more energy – and I use that term looking at more opportunity here for
advancement in the oil and gas industry, looking at how we can enhance supply
and service development, how can we enhance exploration, how can we enhance
many, many other aspects of our industry to grow our industry, and to do exactly
what the Member for Mount Pearl - Southlands said, which is create opportunity
for Newfoundlanders and Labradorians. That's one.
Two:
expanding the operational mandate. We're looking at expanding the operational
mandate to include, as the last speaker said, as the Member for Mount Pearl -
Southlands did say, he talked about growing the capacity, developing supply and
service, ensuring opportunity for Newfoundlanders and Labradorians. Well, what
better way to do that than a real focus on
Advance 2030?
So we've
expanded the mandate to ensure that the corporation could help work with and
drive by identifying the opportunities. They're speaking with oil and gas
companies around the world, they're speaking with their colleagues, because
remember, they are working with the operators all the time because we have
equity positions, so that's a second big thing.
I'm
going to say the third big thing – and some Members talked about this – is
really direct oversight. So right now we have a corporation within a corporation
that speaks to the minister. We have a board of directors that speaks to a board
of directors very focused on a project in utilities that speaks to the minister.
By taking it out, there are no additional costs. As a matter of fact I would
argue, and we'll prove this over time, that because of shared services there's
going to be less cost.
So there
are no additional costs. There are no additional burdens here. The employees of
Nalcor, OilCo right now, will be transitioning to the new corporation. There
will be enhanced opportunity for shared services. That's things like human
resource development, things like finances, things like IT will now be provided
by government.
Here's a
template that says we can save money by doing this. We all talk about getting
rid of some of the duplication that we have out there, trying to really focus
our efforts and using the expertise that we have. So why are we creating all
these pots of expertise around, why aren't we focusing on them? This is an
opportunity to do just that.
The
fourth thing I wrote down is, again, besides the direct oversight that now
reports directly into the Minister of Natural Resources, into the department,
aligning all of our efforts so we know that the new oil corporation will be
working with seismic information, going out there looking at new entrants
positioning us, but the department also works on those things. So co-ordinating
and collaborating on those things, working with the oil council to align what
we're doing, and really to drive that success.
I talked
about reducing costs as the fourth one. I'm going to say this, Nalcor's Energy
focus – and I want them to be focused. I think everybody in this province wants
them to be focused on finishing the Muskrat Falls Project. We are getting very
close, Mr. Speaker.
In the
last couple of years this government, and with the great leadership of Stan
Marshall, who is probably one of the best utility people in the – I would argue
– the world. He knows what he's talking about when it comes to utilities, he's
been involved in it for a long time. But it now allows Nalcor to focus solely on
getting the project finished on providing the utility service, on focusing on
utilities. The Member for Mount Pearl - Southlands did talk about what the
Public Utilities Board has said. We want to start looking at the duplication
within hydro and within Nalcor, and we're doing that, Mr. Speaker.
So I
give five good reasons. I could go on, but in the interest of time, because I
want to get to questions, those are the top five reasons.
I also
want to say, Mr. Speaker, we did have some conversation about independent
appointments. The Member opposite, the Member for Mount Pearl - Southlands
raised, we need good, qualified members on the board of directors, and I
completely support. I am an accredited Institute of Corporate Directors
director, so I would speak highly to having those qualifications on the board.
Mr.
Speaker, I will say we have an independent appointments process, and this board
will go through that process. They will look at merit-based appointments and
make sure we have the right people helping us make the right decisions around
oil and gas.
I want
to talk about the decision around subsidiaries. I believe my colleague from
Ferryland mentioned about the change around the decision around subsidiaries. I
will point out that it's the same in both the
Energy Corporation Act, as well as this act under section 21.3. They
mirror each other. So there is no difference in what we were doing with
subsidiaries in the Energy Corporation Act
or in this particular one.
I want
to talk about Bill C-69; my colleague from Ferryland raised about some of the
concerns around the environmental assessment process that is emerging to become
an impact assessment process within our country. We all support and agree that
impact assessment and environmental assessment is essential – essential, Mr.
Speaker. But we have been speaking with the federal government over the last
number of years, and continued up until last week, with the Senate on how
important it is for exploration to not go on what they call the designated
Project List.
So, if
you go back to 2010 or 2012, Mr. Speaker – it was finally finalized in 2012,
started discussions in 2010 – there was a change. The responsible authority for
environmental assessment was moved, taken away from C-NLOPB. Remember the date:
2012; taken away from C-NLOPB and placed with the Canadian Environmental
Assessment Act.
Now, Mr.
Speaker, it has taken multiple years for offshore operators to get the
clearances they need in order to do a 30- to 60-day well; 30- to 60-day well is
taking some two years. So we have been focused very much on ensuring that
exploration is managed by the C-NLOPB on behalf of the people of Newfoundland
and Labrador through a regional environmental assessment. We're going to do a
regional environmental assessment along the coast of Newfoundland and Labrador,
find out what the impacts are, especially around exploration, and then make sure
that operators follow the guidelines and requirements.
I say to
the Member opposite, I think that will help us to drive exploration, to ensure
the environmental process there, to streamline and to – I'm going to say
ameliorate but probably that's too strong of a word – to lessen the impact of
the change that occurred in 2012. There are other things around Bill C-69 I
could talk about, in the interest of time, if there are questions, because I
want to deal with our oil and gas company legislation in particular.
Benefits; I know the Member opposite talked about the focus on local benefits. I
completely support him. We are very focused on benefits. If there are any
instances that you are aware – that anybody in this House are aware of where
benefits to the people of Newfoundland and Labrador does not seem to be
accruing, certainly the details will be helpful to us because we will
investigate through the C-NLOPB. The more details we have the more we are able
to determine if there was a breach in the protocols required around benefits,
but this new legislation does help us to focus on filling the capacity we
require to grow that robust oil and gas supply and service industry that we
require.
ATIPPA;
ATIPPA does apply in this legislation, I will say that. There is – as, I guess,
Chief Justice Wells had said back when the Energy Corporation was first
introduced, he did acknowledge there was some competitive information from
operations that must be kept confidential or else one of the private sector
commercial entities which is in a significant part of its commercially
competitive activity requires that it not be disclosed.
So I
will quote Chief Justice Wells, who acknowledged there are competitive
activities that – privacy and confidentiality are required or else we wouldn't
get the information in order to make informed decisions. But ATIPPA does apply
except for those commercially sensitive areas, and, of course, court process is
always there if there is a challenge to that.
Okay,
the Member for – I want to just make sure – St. John's East - Quidi Vidi, I
always think Signal Hill, but St. John's East - Quidi Vidi did talk about the
funds required. Now, the funds required – so there's no net impact that we see
at all, especially for 2020, and as we move towards finalizing the budgets, but
we don't see any net impact. The funds will be there from Nalcor, obviously, as
we move forward to ensure the new Oil and Gas Corporation is being set up.
When we
were talking in Question Period today, there was a question about future
revenues that will be gleaned from, for example, Equinor, as that project
progresses. That will help fund the operations, of course, going forward but we
don't see any budgetary impact of this change. We actually see an improvement
over time, of course, with the shared services model.
So to
clue up before I sit and allow questions to be had, we see this as a positive
benefit to the province. We see this as focusing the efforts and growing our oil
and gas industry to ensuring that we have a focus on developing the capacity of
the oil and gas industry, to ensuring costs are contained, to ensuring that we
are delivering on all that we can be in Advance 2030, and many of the stakeholders in the industry say
exactly the same thing.
Thank
you. Mr. Speaker.
SOME HON. MEMBERS:
Hear, hear!
MR. SPEAKER:
Is the House ready for the
question?
The
motion is that Bill 42 be now read a second time.
Is it
the pleasure of the House to adopt the motion?
All
those in favour, 'aye.'
SOME HON. MEMBERS:
Aye.
MR. SPEAKER:
All those against, 'nay.'
Carried.
CLERK (Barnes):
A bill, An Act To Establish An Oil And Gas Corporation For The Province. (Bill
42)
MR. SPEAKER:
This bill has now been read a
second time.
When
shall the bill be referred to a Committee of the Whole?
MR. A. PARSONS:
Now.
MR. SPEAKER:
Now.
Motion,
a bill, “An Act To Establish An Oil And Gas Corporation For The Province,” read
a second time, ordered referred to a Committee of the Whole House presently, by
leave. (Bill 42)
MR. SPEAKER:
The hon. the Government House
Leader.
MR. A. PARSONS:
Mr. Speaker, I move, seconded
by the Minister of Natural Resources that the House resolve itself into a
Committee of the Whole to consider Bill 42.
MR. SPEAKER:
It is moved and second that I
do now leave the Chair for the House to resolve itself into a Committee of the
Whole to consider the said bill.
Is it
the pleasure of the House to adopt the motion?
All
those in favour, 'aye.'
SOME HON. MEMBERS:
Aye.
MR. SPEAKER:
All those against, 'nay.'
Carried.
On
motion, that the House resolve itself into a Committee of the Whole, the Speaker
left the Chair.
Committee of the
Whole
CHAIR (P. Parsons):
Order, please!
We are
now considering Bill 42, An Act To Establish An Oil And Gas Corporation For The
Province.
A bill,
“An Act To Establish An Oil And Gas Corporation For The Province.” (Bill 42)
CLERK:
Clause 1.
CHAIR:
Shall clause 1 carry?
The
Chair recognizes the hon. the Member for Ferryland.
MR. HUTCHINGS:
Thank you, Madam Chair.
Just a
general question to the minister: In her closing comments for second reading,
she indicated cost savings; I wonder if the minister could give us an indication
of what the cost savings would be, particularly in regard to the transition.
CHAIR:
The Chair recognizes the hon.
the Minister of Natural Resources.
MS. COADY:
Thank you.
I
certainly appreciate the question. The cost savings that we are looking at would
be around the shared services in terms of the shared services being now
delivered by government and in human resources, in financing, in finances, in
providing finances, in IT, would be provided by government and we have existing
resources, obviously, within government in order to be able to do that.
Over
time, we see a change in some ways, or an improvement in some ways with regard
to Treasury Board oversight and authority being applied to the corporation. So,
as the Member opposite knows, we believe all of the employees will be
transitioning over to the new corporation. Of course, their salaries, their
wages are protected, because they are very, very, very highly skilled and highly
technical people.
As we
move through the processes of the Treasury Board approvals and Treasury Board
review, of course some of the like-minded positions within the new corporation
would be more in line with the like-minded positions of government.
Thank
you.
CHAIR:
The Chair recognizes the hon.
the Member for Ferryland.
MR. HUTCHINGS:
Thank you, Madam Chair.
So the
shared services you speak of, is that under efficiencies going to be found
between the line department and Natural Resources and the new corporate entity,
or is it Nalcor and the new corporate entity?
Where
are the new shared services mix going to be?
CHAIR:
The Chair recognizes the hon. the Minister of Natural Resources.
MS. COADY:
Thank you.
I think
the question is: Who's providing the shared services? It will be provided by
Government of Newfoundland and Labrador. We believe that over time, because the
shared services are being done within government, because we have controls over
those costs and because we have opportunity to provide those services at no
additional cost, there will be cost savings.
CHAIR:
The Chair recognizes the hon. the Member for Ferryland.
MR. HUTCHINGS:
Thank you.
My
understanding in the briefing there was discussion about a new CEO would need to
be appointed. There's a current VP, I guess, that heads up this particular
division.
What's
the salary structure, and has that been determined for this new position? Is
there anticipation this would be higher and competitive with other positions in
similar jurisdictions?
CHAIR:
The Chair recognizes the hon.
the Minister of Natural Resources.
MS. COADY:
Thank you.
As I
indicated earlier, it is understood that all employees will be transitioning to
the new corporation. Of course, the CEO position is a Lieutenant-Governor in
Council appointment, but I can say that we are satisfied with the existing
management within the Nalcor Oil and Gas company.
I will
say that as we move forward, positions will be reviewed under the Human
Resources Secretariat of government to ensure that any positions that are in
line with government can be aligned, or they're highly technical, of course, if
they're highly specialized, they would be considered as requiring perhaps
additional resources or additional review.
Thank
you.
CHAIR:
The Chair recognizes the hon.
the Member for St. John's East - Quidi Vidi.
MS. MICHAEL:
Thank you very much, Madam
Chair.
This is
a follow-up question, Minister, from my colleague from Ferryland. I have a
particular concern, talking about the chairperson and the CEO, with regard to
the contracts. We've just been through a real mess, I think, with Nalcor and
people are really shocked by the information of the richness of contracts that
existed, and certainly the inquiry is bringing out other stuff as well.
So what
will be the expectation or what can we expect and what can the people expect
with regard to the knowledge of what will be in the contracts, especially for
the chairperson and CEO?
CHAIR:
The Chair recognizes the
Minister of Natural Resources.
MS. COADY:
Thank you.
Well,
the chairperson will be the chair of the board of directors and we only see – I
understand that there's a specific section, so when we come to that section, we
can talk about the board of directors and remuneration. So, there's very limited
remuneration. Obviously, there is an opportunity for per diems, but that's not
currently the practice.
I'll
leave the board of directors; however, on the CEO, as I said, the existing team
at Nalcor Oil and Gas company will be transitioning and then the Human Resources
Secretariat will review, of course, all positions, make sure that they are
aligned with both government policy and make sure that anybody that is in a
highly specialized or technical position gets the remuneration they see.
There is
a specific condition – and we will come to that section in the act – but, as I
recall, that the Lieutenant-Governor in Council will see the contract. In some
cases, that wasn't required, but there is a requirement in this act to see the
contract.
CHAIR:
Thank you.
The
Chair recognizes the hon. Member for Mount Pearl - Southlands.
MR. LANE:
Thank you, Madam Chair.
Minister, I'm just wondering if you can give brief explanation as to what the
reporting and oversight would look like in comparison, or in contrast, to what
we currently see with Nalcor. I ask that question obviously because in following
the Muskrat Falls Inquiry, we've heard testimonies from ministers of Natural
Resources and so on who allegedly were not given information and it didn't seem
like there was a whole lot of oversight that was occurring.
I'm just
wondering how you would see this working and how it would differ from that
scenario that was just painted.
CHAIR:
Thank you.
The
Chair recognizes the hon. Minister of Natural Resources.
MS. COADY:
Thank you.
It's a
very interesting question, especially with all the information coming out of the
inquiry and I can appreciate why the question is being asked. I can tell you
that I believe that oversight is very important by the Department of Natural
Resources and I meet on a regular basis, of course, with any Crown corporation
that reports to me, and Nalcor is one, and now this Oil and Gas Corporation will
be the second one. I think it's important to ensure that you review the budget,
you have ongoing discussions with the chair and the CEO, that you ensure you
have oversight and view their strategic plans. Indeed, we have a financial
oversight as well.
I think
what you can see within the Department of Natural Resources is that hands-on
oversight. But there are opportunities within the legislation where the
Lieutenant-Governor in Council reserves the right for that oversight. And I can
tell you my colleague, as Minister of Finance and President of Treasury Board,
will be very interested in the financial constructs around this entity. I can
tell you he's very keen on Nalcor's financial constructs as well. And we'll be
ensuring that they are reviewed as well.
CHAIR:
The Chair recognizes the hon.
the Member for Mount Pearl - Southlands.
MR. LANE:
I thank the minister for the
answer and I do appreciate that's how you personally feel about these things,
glad to hear that, and of the Minister of Finance. But we all know that times
can change, people can change and everything else.
I'm just
wondering, more specifically, if there are going to be any, I'm going to call
them policies, protocols, whatever the case might be, that would go beyond
saying, well, this particular minister likes to review this – will there be
something in place to say, for example, that the deputy minister has to meet
with them on a regular basis, that they have to review certain reports, that
there has to be certain protocols followed, as opposed to just basing it on
whether or not the individual who happens to be sitting in a chair on any
particular time decides that they would like to be diligent or not diligent on
these matters?
Again, I
obviously ask that question given the fact that we're looking down the barrel of
$12.7 billion-plus and we've heard testimony in the inquiry that obviously
oversight wasn't occurring.
CHAIR:
The Chair recognizes the hon.
the Minister of Natural Resources.
MS. COADY:
Thank you.
I think
the Member opposite could take some comfort that throughout the legislation,
you'll see the Lieutenant-Governor in Council has oversight. So it's
Lieutenant-Governor in Council, meaning government has oversight.
For
example, I spoke a moment ago to the Member for St. John's East - Quidi Vidi who
talked about appointments and contracts. In this particular case, the
Lieutenant-Governor in Council will set the terms and conditions of
appointments. And that differs from what is active in the
Energy Corporation Act. So what you're seeing is more of an active
role of the Lieutenant-Governor in Council in Council in this entity than you
saw in the Energy Corporation Act.
CHAIR:
The Chair recognizes the hon.
Member for Mount Pearl - Southlands.
MR. LANE:
I thank the minister for the
answer. I do appreciate where you're coming from, and when we're talking
Lieutenant-Governor in Council we're talking about the Cabinet, of course. But
again, it's dependent on who are sitting in those chairs at any given time and
so on.
So, I
would just say more as comment, I suppose, than a question because, obviously,
you haven't drilled down to that level, but certainly for the record I believe,
given the experience that has just occurred, I think for this particular entity,
who again will be dealing in billions of dollars in terms of royalties and
projects and everything else, over time, that I think it's very critical that we
make sure that oversight is not just a buzz word.
It's not
just that the Cabinet has oversight, but that there would indeed be established
policies and protocols that would be put in place, almost a checklist, if you
will. There would be officials within the department that it would be part of
their job description on a regular basis that there would be certain checks and
balances, certain meetings, certain reports that would have to be, not if you
feel like it or would be due diligence, but has to be done and signed off on to
show that there was indeed proper oversight occurring. I just throw that out
there.
I have a
question as it relates to the ATIPPA. Minister, you said that ATIPPA applies but
then you talked about commercially sensitive information and you talked about
the fact that you could go to court. I guess to me, again, that's where it
sounds – sounds at least – the same as what we're experiencing with Nalcor.
Because what happened when we were looking – when the premier, actually, not we
were looking, the premier even went looking for embedded contractor information
and was told no, b'y, I can't give it to you – the premier of the province –
commercially sensitive.
We've
heard so many people saying every time you went to Nalcor looking for anything,
everything was – they didn't even think about it: No, commercially sensitive.
Under the Energy Corporation Act,
unlike ATIPPA, they don't have to give any explanation whatsoever as to why it's
commercially sensitive, why they're not giving it to you, and then they can say:
B'y, if you don't like it, go to court. Whereas, under ATIPPA in a government
department, there is a requirement to say: Here's why I can't give it to you,
and then if you disagree you can at least appeal to the Privacy Commissioner.
I'm
wondering in this corporation is the Privacy Commissioner step in there, like it
would be in a core government department, or is it the same as Nalcor that they
say no, commercially sensitive, if you don't like it, go to court?
CHAIR:
The Chair recognizes the hon.
the Minister of Natural Resources.
MS. COADY:
Thank you very much, Madam
Chair.
To the
Member's first point, allow me to say this, as a business person, I recall in my
corporations I always had a statutory checklist. I note you use those terms, but
the statutory applications were signed off by the CEO, so that I could present
to my board of directors at any given time that the statutory requirements of
the corporation are being fulfilled.
I think
what you're suggesting is that might be a good practice. I'll certainly bring
that forward because I think that is something that is of good practice to make
sure that you have that details and that information signed off. I liked what
the Member opposite said in terms of making sure that we have those kinds of
checklists done, so good point.
This is
now, just so that the people of the province understand, under section 2(d) of
the legislation and it does talk commercially sensitive information. I
understand the dilemma around this, because, of course, we all know that there
was a lot of information that was not able to be had from Nalcor and so there's
some frustration there around this.
The Oil
and Gas company, as a subsidiary of Nalcor, this was under the
Energy Corporation Act as well and it was really put in there
because of that commercially sensitive information from the Oil and Gas company.
That was one of the reasons why it was in the
Energy Corporation Act. I do know that Chief Justice Wells who is
reviewing ATIPPA legislation did say and did recognize that commercially
sensitive information is required or you wouldn't be able to have the
information required to make informed decisions that are essential, especially
under oil and gas.
I will
say that ATIPPA does apply to the Oil and Gas Corporation; however, there is a
section on commercially sensitive information that does prevail. So I will say
that it is very similar to what is in the
Energy Corporation Act, recognizing what Chief Justice Wells who wrote the
ATIPPA legislation and who did give his considered opinion that – and I can
quote here: It requires to keep certain aspects of its operation's information
confidential from competitors. If it did not, it could run the risk of failure
with the potential for massive, adverse financial consequences to the people of
the province. As well, it partners with one or more private sector commercial
entities and the significant part of its commercially competitive activity.
Those commercial partners would not be prepared to disclose sufficient
information – unquote.
That was
from Chief Justice Wells in the day. So he recognized that there is a
requirement and I will say that I believe that there has been limited cause for
concern – I don't know of any – but limited cause for concern about the oil and
gas company.
I will
also point out for the Members opposite, that this section does include
information relating to independent contractors because, as you remember, we
made a legislative change to the Energy
Corporation Act to make sure that independent contractors were now captured,
and this legislation does capture it as well.
Thank
you.
CHAIR:
The Chair recognizes the hon.
the Opposition House Leader.
MR. HUTCHINGS:
Thank you, Madam Chair.
The
minister spoke earlier about the mandate, we needed to expand the mandate, sole
focus in regard to meeting the mandate of 2030. So taking that at face value,
what are the deficiencies right now that you recognize with this unit within
Nalcor that requires you to take it out and apply it at focus? What deficiencies
have you found?
CHAIR:
The Chair recognizes the hon.
the Minister of Natural Resources.
MS. COADY:
Opportunity lost if we don't
do so. I'll say that, if I can. I believe there is an opportunity here to make
sure this is a stand-alone corporation that is very focused on oil and gas
development. That when it's within an entity that is very focused on utility
matters and it reports to another board – so that we have a board reporting to
another board that is very focused on utility matters, maybe we could enhance
the focus.
As I
said earlier, we have expanded the mandate to include that capacity building
that was spoke of earlier. We want to really focus some of the
Lieutenant-Governor in Council opportunities and really streamline and ensure
that we have the correct Treasury Board oversight here and the opportunity to do
same is in this new corporation. I will say that it does –we believe, overall –
reduce cost because, of course, the shared services model.
So I say
to the Member opposite with all sincerity, this gives us more than what we have
currently. It is not what is not deficient, but what we can do better.
Opportunities gained versus opportunities lost.
Thank
you.
CHAIR:
Thank you.
The
Chair recognizes the hon. the Opposition House Leader.
MR. HUTCHINGS:
Okay. So, respectfully, I'd
have to submit that there are no deficiencies found today and we're looking at
new opportunities that may or could exist. You're hoping, through this, you're
able to take advantage of them. If that's not correct, she can correct it for
me.
I have a
question. In the briefing, the new Oil and Gas Corporation will not be an agent
of the Crown, but Nalcor is an agent of the Crown.
Can the
minister explain why there are two different labels now for the two different
entities and what that really means? Crown agencies (inaudible) an agent of the
Crown.
CHAIR:
The Chair recognizes the hon.
the Minister of Natural Resources.
MS. COADY:
Oh, sorry, I was waiting for
my light to come on.
I thank
the Member opposite for the question.
I don't
think there's – I think I'd rather say we have an enhanced ability with this new
corporation. I don't want to say there's a deficiency, but I'll say there is an
enhanced ability with the new corporation.
When
organizations are very focused on other activities within their organization,
sometimes it doesn't – it means that they're not as focused on some of the other
requirements. The people of the province know that we did ask for special, I
guess – I don't want to use the word request. I will say that we did ask Nalcor
Oil and Gas last year to go back to investing in seismic because the board of
directors, because of some of the other requirements within Nalcor, were moving
away from that. So I will point out that this gives us the focus that is needed
to grow our oil and gas industry.
Crown
corporation; I'm going to help the people of the province understand what a
Crown agent is versus not being a Crown agent, because sometimes that gets
confused. A Crown corporation that is a Crown agent operates under close
direction from the Crown. Its acts bind the Crown; its liabilities are
government's liabilities. So that's a Crown corporation that is a Crown agent.
A
corporation that is not a Crown agent, while still being owned by the Crown,
operates more arm's length from government, makes separate operational
decisions, its acts do no bind the Crown in that any legal liabilities do not
automatically flow back to the Crown. So there's this degree of financial
separation, if I can use that term.
Thank
you.
CHAIR:
Thank you.
The hon.
the Opposition House Leader.
MR. HUTCHINGS:
So just on that point,
recognizing the difference of the two, would this new corporation – will there
be any change to the consolidated revenue statements of the province in regard
to what may show on those statements?
CHAIR:
The hon. the Minister of
Natural Resources.
MS. COADY:
Not that I'm aware, but I
will turn and ask the Minister of Finance and President of Treasury Board to
answer that question. Were there any changes to the –
MR. HUTCHINGS:
Consolidated revenues.
MS. COADY:
– consolidated revenues. Not
that I'm aware of, but I'll allow that to my –
MR. HUTCHINGS:
Yeah, the question was
related to a (inaudible) agency as opposed to an agency of the Crown. The
minister indicated, in terms of allocation of revenues and financial activities,
it differs.
So I'm
asking, based on this, in pulling this office out of Nalcor and how liabilities
are recorded, whether in the entity of Nalcor or on the provincial ledger, is
there a change in regard to how those liabilities and/or revenues are recorded
in the Consolidated Revenue Fund?
CHAIR:
The Chair recognizes the hon.
the Minister of Finance and President of Treasury Board.
MR. OSBORNE:
Not to the best of my
knowledge, we haven't made any changes.
CHAIR:
Thank you.
The
Chair recognizes the hon. the Opposition House Leader.
MR. HUTCHINGS:
I wonder, before we get through, could we have that checked to see if there's
any difference in the financial reporting because of this change, if we could?
Minister, in section 8 it talks about Lieutenant-Governor in Council or Cabinet
issue a directive to the board respecting the management of business and affairs
and other matters that the Lieutenant-Governor in Council determines necessary.
You just
indicated a second ago, last year there was an issue in regard to seismic work,
and you were looking for cost-cutting measures in ABCs. I think Nalcor decided
to cut seismic work, and you said you gave a directive to have it replaced.
When
we're looking at this new corporation and the authority under these directives,
can you give us some insight into – is that something you're referring to, and
what other types of directives would you be looking for as Cabinet and/or
minister to give to this new corporation?
CHAIR:
The Chair recognizes the hon.
the Minister of Natural Resources.
MS. COADY:
Thank you.
In 8.1,
the Government of Newfoundland and Labrador through the Lieutenant-Governor in
Council – and these are strange words, I know, for those that are listening, but
that is the mechanism – has the ability to issue a shareholder directive; and,
of course, that is within most corporations, I believe all corporations. It is
adopted from section 245(1) of the
Corporations Act, and it also applies to both Nalcor and Hydro as well, to
allow a shareholder to give a directive to a corporation.
So I
don't see it as a requirement in normal state of affairs where you would make a
directive to the corporation. It is when extenuating circumstances apply, where
the board of directors may be taking a decision that you would want them to take
an alternate decision. As you said, we had been asking for some paring back of
expenses in some of our Crown corporations and the board of directors made a
decision to move in this particular direction where the government felt, and I'd
say industry as in the stakeholders felt, that it was very important to do
seismic activity.
I
believe everybody in this House would feel the same. That would be an example of
one shareholder directive, but it's not an everyday occurrence where you would
give a shareholder directive regarding something.
CHAIR:
The Chair recognizes the hon. the Opposition House Leader.
MR. HUTCHINGS:
Thank you, Madam Chair.
Just to
clarify, under this section it's just directives, it's not specifically
shareholder directives. In defining directives, it says: “the management of the
business and affairs of the corporation and its subsidiaries.”
So that,
to me, is pretty significant. It's pretty far reaching. So I guess I was just
looking at – you sort of indicate that's not day-to-day operations, but it does
say that management of the business and affairs of the operation, so where it's
tied back to you as minister and the department, I'm just getting some idea of
what's intended by that reference in the bill.
CHAIR:
The Chair recognizes the hon.
Minister of Natural Resources.
MS. COADY:
Thank you very much.
I see
this is very much the same as in the
Corporations Act. This is under section 245(8) of the
Corporations Act. So it allows the ability of a corporation, for its
shareholders to give direction. To me, it's a normal state of affairs, but I
will check with counsel to make sure that I'm not saying anything other than
that. But to me, under the Corporation Act
this is a provision that allows for shareholder directives.
CHAIR:
The Chair recognizes the hon.
Member for St. John's East - Quidi Vidi.
MS. MICHAEL:
Thank you very much, Madam
Chair.
As the
Minister of Finance and head of Treasury Board is looking for answers there, I
want to be a bit more specific because in the briefing it's my understanding we
were told that while the whole financial stuff will still be sort of on
government's books, you won't find it in one spot. That it will be found in
line-by-line places. I think that's what's specifically I'm looking for an
answer to, because that's what we were told in the briefing.
CHAIR:
The hon. the Minister of
Natural Resources.
MS. COADY:
I'll take that under
advisement and get back to you as quickly as possible.
CHAIR:
Thank you.
The
Chair recognizes the hon. the Opposition House Leader.
MR. HUTCHINGS:
To my colleague, just to
reference that, we were advised that the reporting requirements would be
different once the Oil and Gas was brought out under its own corporate entity.
It may not be consolidated. It may be broken out in various areas in terms of
accounting for the finances of that new corporate entity.
I just
had a question for the minister in regard to the employees of the new
corporation. From what you said earlier, just understanding that those employees
that now sit within the division would be referred out to the corporate entity
and there'd be no requirement for new staffing because you think the expertise
and requirements for the operations of the new corporation are available and
would be transferred out to that corporation and that would be it in regard to
staffing.
CHAIR:
The Chair recognizes the hon.
Minister of Natural Resources.
MS. COADY:
That is correct. We
understand that the employees will be transitioning to the new corporation. We
don't have any requests for additional staffing.
Thank
you.
CHAIR:
Thank you.
The
Chair recognizes the hon. the Opposition House Leader.
MR. HUTCHINGS:
Thank you, Madam Chair.
Sections
3(7) of the bill reads: “Property of the corporation is not property of Crown.”
Furthermore, the corresponding section of the
Energy Corporation Act reads: “Property of the corporation is the
property of the Crown, but title to it is vested in the name of the
corporation.”
So I'm
just wondering if the minister could give us some indication and explain why the
property of the two corporations will be treated differently. Is that where it's
related, tied back to the department directly? I'm just wondering how that – and
I guess why we're looking at that is how will it impact in the future of the
province's shares in current oil- and gas-producing projects versus future
projects, because we need equity to submit the future projects and would that be
available? What would be the difference?
CHAIR:
The Chair recognizes the hon.
the Minister of Natural Resources.
MS. COADY:
Thank you.
Now that
we've gotten to the subsections, allow me to say that subsection 3(7), it's
common to enable legislation to clarify whether property of the corporation is
also property of the Crown or not. The new corporation is not an agent of the
Crown and will be responsible for its own activities, liabilities and assets.
This is different than 3(7) of the Energy
Corporation Act and 3(6) of the Hydro Corporation Act. Note, in these acts,
the property of the corporation is the property of the Crown.
So, the
rationale here is that the new corporation is not an agent of the Crown and I've
gone through why it's not an agent of the Crown already and will be responsible
for its own activities, liabilities and assets.
CHAIR:
Thank you.
The
Chair recognizes the hon. the Opposition House Leader.
MR. HUTCHINGS:
Thank you.
And just
to that point, so that would have no bearing on obtaining equity or where that
equity would come from in regard to investing in future oil and gas fields or
anything like that. If there were revenues there that were generated and a
government of the day decided they would use some of that maybe for investment
that would still be available for investment in either case.
CHAIR:
The Chair recognizes the hon.
the Minister of Natural Resources.
MS. COADY:
Thank you very much.
That is,
as I understand it. I would also, if I may, go back to something that I was
asked earlier and this is around how is this a little bit different. I was
talking about the Lieutenant-Governor in Council and the fact that we can now
request documents, we can request more information and we can ask for more
available documentation. There is a provision in this act under section 28,
under Request for documents, that does broaden out the information that we can
glean from the organization.
So, I
think it speaks to – the Member opposite from Mount Pearl - Southlands asked a
question about how we can ensure we're getting the information, the details that
we require, and I think that speaks to that.
And, as
to your question, the Member for Ferryland, I believe I've directed that under
3(7).
Thank
you.
CHAIR:
The hon. the Opposition House
Leader.
MR. HUTCHINGS:
Yes, just a quick question
for the minister, I spoke to section 8 in regard to directives. If the board of
directors that's appointed for the new corporate entity and if they make
decisions or direction and flows down to CEO from an operation or business
perspective –
SOME HON. MEMBERS:
Oh, oh!
MR. HUTCHINGS:
Madam Chair?
It's
kind of hard to hear here, Madam Chair.
CHAIR:
Order, please!
MR. HUTCHINGS:
Section 8, we referenced
earlier, speaks to directives. In this particular case, with the new corporate
entity, if the board of directors gave direction to the new corporation, does
the minister directive – would you be able to override that? Is that purpose of
the directive?
CHAIR:
The Chair recognizes the hon.
the Minister of Natural Resources.
MS. COADY:
Thank you, Madam Chair.
This is
common language in the Corporations Act.
I will point out to the Member opposite again it is common language within the
Corporations Act. A shareholder can
provide a direction to the board of directors on a particular decision. They can
say to the board of directors who may have taken a decision that they would like
an alternate decision taken, and the board of directors would rely on that
directive to make that decision.
CHAIR:
The Chair recognizes the hon.
the Member for St. John's East - Quidi Vidi.
MS. MICHAEL:
Thank you very much, Madam
Chair.
I have
another general question, Minister. You talked earlier that there are no
changes, that you haven't had any requests for additional staff, that the
service sharing is going to save money, et cetera; but, at the same time, you
did say today that where the company initially will have no revenue, the revenue
was going to have to come from government.
So, in
the present, how can you say those two things and say that there isn't a cost at
this moment?
CHAIR:
The Chair recognizes the hon.
the Minister of Natural Resources.
MS. COADY:
Madam Chair, the funds
required for operation – and again, we're finalizing the budget. The Government
of Newfoundland and Labrador is finalizing its budget. The funds required for
operations can come from within Nalcor at this point in time, and then as we
move forward – and that, to me, is the people's money, even though it may not
shift hands, it still is the people's money and that's to what I was referring
today.
CHAIR:
The Chair recognizes the hon.
the Member for St. John's East - Quidi Vidi.
MS. MICHAEL:
Thank you very much, Madam
Chair.
I just
want to get clarification to make sure that we fully understand what's just been
said.
So I do
understand that right now this company is within Nalcor as a subsidiary, and I
do understand the financial link between Nalcor and the company. So that's one
of the reasons why we've questioned how, when the new company is set up, the
equity assets that exist at the moment are going to stay with Nalcor, so none of
that money will flow to this company.
I'd like
the minister to be clear with me about – no matter where it comes from. If it
comes from Nalcor it's coming because of revenues they have, I realize that, but
are you saying there will never be a point at which money will have to come out
of the consolidated revenue maybe, to pay them when – instead of from the assets
that Nalcor has? That isn't clear to me.
CHAIR:
The hon. the Minister of
Finance and President of Treasury Board.
MR. OSBORNE:
The funding for salaries and
for the space that the oil company occupy, and their photocopying machines and
the paper, the cost of operating that entity as it exists today, that funding
will come from Nalcor.
Currently, those individuals are not housed inside of Nalcor's building. They
have their own location. So everything in terms of their operating, that funding
comes out of Nalcor now. That will not change.
MS. MICHAEL:
(Inaudible.)
MR. OSBORNE:
Well, the budget allotment to
allow them to operate will transfer from Nalcor to that entity. So to say that
it won't change ever is a rabbit hole, because if they have less people through
attrition, well then they need less money. If they hire more people at some
point down the road, they'll need more money. But the block of funding that they
currently operate under will move from Nalcor to their entity.
At some
point, five years down the road if they need to hire somebody that specializes
in doing the geoscience, then that's something we can't anticipate today, but
the block of funding they currently use will be transferred from Nalcor to them.
CHAIR:
The Chair recognizes the hon.
the Member for St. John's East - Quidi Vidi.
MS. MICHAEL:
Just one clarification. I'm
not questioning the amount of money within the block. You're saying a block – I
don't care how much is in it – a block will move with them.
I'm
asking: Will it always be a block from Nalcor that's covering it? That's what I
was asking.
CHAIR:
The hon. the Minister of
Finance and President of Treasury Board.
MR. OSBORNE:
The current block of funding that they require to operate is moving from Nalcor
to them. As that company may evolve, they may have different requirements. There
will be equity earned through Equinor, we know that, and as that equity is
earned through Equinor that goes into the new entity.
So as
they grow, as there is more exploration and more fields found, new deals, those
deals will go to the new company, or the equity for those will go to the new
company. If they need to hire world-class specialists at some point, they've
broken away from Nalcor. Once they break away from Nalcor, we can't anticipate
if they – next year or the year after – may need to hire somebody who
specializes in geoscience or seismic work. That may be the case, I don't know,
and that's as honest as I can be at this particular stage.
They may
need to hire very specialized people, and at that particular point whether their
budget increases or whether they've got their own revenue at that particular
point to cover it, the block of funding they currently use is being carved away
from Nalcor.
CHAIR:
The Chair recognizes the hon.
the Opposition House Leader.
MR. HUTCHINGS:
Thank you, Madam Chair.
Just to
be clear. What the minister said, the current operations of Nalcor and the
funding allotment for this group, now that's internal, that that will be
transferred to the new corporate entity, but it will have to be a recurring
transfer every year to meet that staffing requirement and expenses of the new
corporation. So it would have to be a recurring referral every year to be shown
in Nalcor's budget that this amount is being sent to the corporation for the
corporation to operate, because if there's no cash going into the corporation
they can't operate.
Second
to that; at some point, as my colleague pointed out, you would expect the Oil
and Gas Corporation, the new entity, to be generating revenue. At that point, I
can see the recurring transfer would stop and they'd become self-sufficient and
they could operate, but that's kind of not what we're hearing.
So what
I've just expressed, is that your intent of where we expect to be?
CHAIR:
The hon. the Minister of
Finance and President of Treasury Board.
MR. OSBORNE:
Yeah. I mean once the new
entity becomes self-sufficient, we'll no longer need to carve the funding on an
annual basis away from Nalcor.
I'm not
sure if that answers your question.
CHAIR:
The Chair recognizes the hon.
the Opposition House Leader.
MR. HUTCHINGS:
We're getting to where we
need to get to. It's going to be recurring until the new entity becomes
self-sufficient in generating revenue that it can operate and can carry on the
functions they need to carry on. To that point, leading up to the point of –
well, I guess we're winding down.
CHAIR:
The hon. the Government House
Leader.
MR. A. PARSONS:
As much as I don't want to
intervene, because it's actually I think a good, productive debate, I would move
that the Committee rise, report progress and ask leave to sit again.
CHAIR:
The motion is that the Committee rise, report progress and ask leave to sit
again.
Shall the motion carry?
All those in favour, 'aye.'
SOME HON. MEMBERS:
Aye.
CHAIR:
All those against, 'nay.'
Carried.
On motion, that the Committee rise, report
progress and ask leave to sit again, the Speaker returned to the Chair.
MR. SPEAKER (Trimper):
The hon. the Member for
Harbour Grace - Port de Grave and Deputy Chair of the Committee of the Whole.
MS. P. PARSONS:
Thank you,
Mr. Speaker.
The
Committee of the Whole have considered the matters to them referred and have
directed me to report progress and ask leave to sit again.
MR. SPEAKER:
The Chair of the Committee of
the Whole reports that the Committee have considered the matters to them
referred and have directed her to report progress and ask leave to sit again.
When shall the report be received?
MR. A. PARSONS:
Now.
MR. SPEAKER:
Now.
When shall the Committee have leave to sit
again?
MR. A. PARSONS:
Tomorrow.
MR. SPEAKER:
Tomorrow.
On motion, report received and adopted.
Committee ordered to sit again on tomorrow.
MR. SPEAKER:
The hon. the Government House
Leader.
MR. A. PARSONS:
Thank you, Mr. Speaker.
I move,
seconded by the Member for Fogo Island - Cape Freels, that the House do now
adjourn.
MR. SPEAKER:
It has been moved and
seconded that this House do now adjourn.
Is it
the pleasure of the House to adopt the motion?
All those in favour, 'aye.'
SOME HON. MEMBERS:
Aye.
MR. SPEAKER:
All those against, 'nay.'
This
House stands adjourned until tomorrow at 1:30 o'clock.
Thank
you very much.
On
motion, the House at its rising adjourned until tomorrow, Tuesday, at 1:30 p.m.