GOVERNMENT SERVICES ESTIMATES COMMITTEE

May 13, 1991                        Department of Municipal and Provincial Affairs                          (Unedited)


The Committee met at 7:00 p.m.

MR. CHAIRMAN: Order, please!

I will introduce our Committee. My name is Melvin Penny, and I am the Member for Lewisporte and I will be chairing the meeting this evening. On my left is the Vice-Chair, Mr. Bob Aylward, the Member for Kilbride. Over to my left is Jim Walsh, the Member for Mount Scio - Bell Island filling in tonight for Percy Barrett, the Member for Bellevue; Larry Short, the Member for St. George's; Mr. Bill Ramsay, the Member for LaPoile; and Mr. Glen Tobin, the Member for Burin - Placentia West filling in for Mr. Norm Doyle, the Member for Harbour Main.

I would ask the Minister to introduce his officials again for the sake of Hansard, even though he did that at the previous meeting down at the Colonial Building. We have a new equipment operator here tonight. You do have the same officials don't you?

MR. GULLAGE: (Inaudible).

MR. CHAIRMAN: Okay, but I will ask you to introduce them again, and I would remind the Minister's officials that when they speak they should introduce themselves for the sake of Hansard, to read their name and their title for the record. I would caution them, as well, that they are not to answer any questions pertaining to policy but only on matters relating to fact. I remind the Committee that they are not to ask any questions of Committee Members. Questions are to be directed only to the Minister and the officials will answer if requested to do so by the Minister.

I would like to welcome the media here tonight. I must apologize to the young lady because I do not know her name, but I believe she is representing the Evening Telegram. Our Page for tonight is Paula, and Elizabeth Murphy will be the Clerk of the Committee for this evening. I think that basically covers everything. Anything other than that has already been said. I will turn it over to the Minister and he can introduce his officials.

I will remind everybody, as well, that we have already gone through the opening statement by the Minister and the opening comments by the official Opposition, so we will go directly into questions, direct questions, concise questions and concise answers, and every Member will be allowed a maximum of ten minutes before I turn it over to some other Member of the Committee.

Mr. Minister.

MR. GULLAGE: Thank you, Chairperson.

The Deputy Minister of Municipal and Provincial Affairs is not with us tonight. He is conducting some labour hearings continuing on from a previous life. I do have with me Deputy Minister, Frank Manuel. Frank is in charge of three commissions, Pippy Park, the Residential Tenancy's Board, and the Canada Games Park Commission. He is chairman of three of those facilities and he is here tonight in his capacity as Chairman of the Summer Games Park Commission. Art Colbourne is the Assistant Deputy Minister of Municipal and Provincial Affairs and Don Peckham, Assistant Deputy Minister as well, and Felix Croke, Acting Director of Financial Operations.

MR. CHAIRMAN: Mr. Tobin.

MR. TOBIN: Thank you, Mr. Chairman.

(mike off)

I am not sure but, in any event, we will keep the questions on the Canada Games Park to tonight or tomorrow night, but we will deal with some of the other aspects with Mr. Manuel.

I want to go right to the heart of the question and that is the question of amalgamation, Mr. Minister. I have some concerns, not just here but in my own district as well. Over the past weekend I ran into some very serious concerns. I met with people on council, particularly the Lewin's Cove Council, and other places related to the amalgamation issue. We have been hearing a lot about the amalgamation issue that has gone beyond what has taken place as a result of the heavy media campaign between St. John's and Mount Pearl that has caused people in other parts of the Province to express interest and have concern. Could the Minister tell me when he will be dealing with the North East Avalon?

MR. GULLAGE: That is a pretty well know fact now. I will be in the House tomorrow with a Ministerial Statement and the Resolution.

MR. R. AYLWARD: You would not want to give us a little preview tonight, would you?

MR. TOBIN: I thank the Minister for that answer. Let me ask the Minister then, in places like my own district, for example - as a matter of fact I will be quite open about it. I have heard from the Mayor of Lewin's Cove who suggested that there is a recommendation going through that would see Lewin's Cove being forced to amalgamate. Can the Minister tell me if a Town like Lewin's Cove, which rejects amalgamation as they did through petitions and presentations at the public hearings, need have any real worries now about the issue being forced?

MR. GULLAGE: Well I think we have said fairly consistently throughout the process that we will not amalgamate groupings unless we see that it is clearly in the best interest of the people to do so.

MR. TOBIN: No. If, where the people have rejected it, Mr. Minister, through the form of 98 per cent rejection, have they anything to fear or not?

MR. GULLAGE: No, no! Let me just finish. The danger with a petition, if I might elaborate just a little bit, is that petitions, as you probably know, and plebiscites and that sort of thing, were removed from the Municipalities Act back in the 70s, on Whelan's recommendation, the Whelan Commission, because he saw them as being emotion driven people were voting based on the way the questions were phrased and really did not have any access to the facts of the matter, per se.

So, yes, they are important, in terms of getting an expression of opinion, as long as it can be seen that they are basing their vote on facts, and that is pretty hard to determine in a plebiscite. Most plebiscites have probably a simple question, are you for or against, and do not really get into the details because that is what the feasibility process does. We rely more as a Department, and I certainly do as a Minister, on the feasibility process itself: the hearings; the input of the councils; the input of the people at the hearings; briefs from the public; actual representations on facts between the communities; the financial information; how they feel about coming together; and why they want to come together or why they do not want to come together. So we have said that we would not put together communities unless it was clearly in the best interest of the people of those communities to come together.

We would not, for example, want to see a community continue to suffer, for whatever reason it might be, maybe an inadequate tax base or maybe all the taxes are in the adjoining community where they have a business base, perhaps a fish plant, industry and business or -

MR. TOBIN: You are missing the question, Mr. Minister. I am just asking if these people have anything to fear based on their objections and also based upon the fact that the Premier, in a letter, stated that amalgamation with any surrounding municipality will not go on as long as the people opposed it.

MR. GULLAGE: That is not what we said at all. What we said was, if we wanted to put communities together, where we saw that it was in their best interest to bring them together. And I am starting to give you some reasons why. There are disparities out there in most situations and the only way to correct a disparity, where tax revenues are, say, not being shared adequately and so on, is to bring communities together. To correct a wrong and to bring fairness into the situation, we said we would bring it into the House of Assembly. Now that was clearly what we said. We did not say we would not do it, we did not say we would back away from it, and Government has an obligation to make a decision.

MR. TOBIN: Yes, the Premier did say exactly what I said, Mr. Minister.

MR. GULLAGE: Well, I would suggest he did not. I would suggest that he said what I have been saying and what both of us have been saying.

MR. TOBIN: Well, if that is the case, I will read it into the record for you: 'I assure you that if the majority of residents of Lewin's Cove are opposed to being amalgamated with any surrounding municipality, then there are no plans to force the issue.'

MR. GULLAGE: In the isolation of the Cabinet Room.

MR. TOBIN: That is exactly the sentence that is written here.

MR. GULLAGE: Yes. Do you want to carry on from there with the rest of what he said.

MR. TOBIN: Yes, I certainly will: `In many cases Government believes that there may be considerable advantages to amalgamating certain communities into a large town. I refer particularly to the integration of services such as water and sewer systems, fire protection, garbage collection, and snow clearing. This may not be the case in the community in which you live. The public hearings should clearly reveal this to the Commissioners. Public hearings have to take place prior to recommendations being made to Government and certainly before any final decisions regarding amalgamation are made.

I believe that since you feel so strongly with respect to this matter it would be in your best interest to submit either a written brief to the Commission or give an oral briefing at the hearings. Once again let me assure you that if the community of Lewin's Cove does not wish to amalgamate, the Government has no plans to force it upon you.'

MR. GULLAGE: Yes, but the rest of the letter does not -

MR. TOBIN: I beg your pardon?

MR. GULLAGE: You are taking things out of context once again.

MR. TOBIN: No I am not taking anything out of context.

MR. GULLAGE: You are taking the first and last paragraphs and you are omitting the main content of the letter. What he is clearly saying is that if there are reasons that come out in the feasibility process that dictate amalgamation taking place, the Government will proceed. We will not do it upstairs in the Cabinet room. It does not mean we are going to back -

MR. TOBIN: No, it does not say that at all.

MR. GULLAGE: Well I read the letter differently than you.

MR. TOBIN: `I assure you that if the majority of residents of Lewin's Cove are opposed to being amalgamated with any surrounding municipality then there are no plans to force the issue.' It does not say by Cabinet, it does not say by the House of Assembly, it says that there are no plans to force the issue. That is what is there, Mr. Chairman.

MR. WALSH: A point of order, Mr. Chairman.

MR. CHAIRMAN: Mr. Walsh on a point of order.

MR. WALSH: Mr. Chairman, on a point of order. I do not want to take time away from my colleague here in the House, but since that is a letter from the Premier to the Community of Lewin's Cove or wherever it is, then by all means in Question Period tomorrow deal with the letter with the Premier. I mean you are asking the Minister or someone else to interpret a letter that somebody else wrote to a third party. Now we have the fourth and fifth party commenting on it. I would suggest that if the letter was written by the Premier then deal with it with the Premier. I mean we can be here all night dealing with semantics of a letter by a third person to a fourth person. We are here to do estimates and I have no problem doing estimates with a certain amount of latitude, but I am not going to sit here all night listening to a letter to Lewin's Cove from the Premier and hope to have a discussion on it when I do not even know what is in the letter myself. So I do not think that is fair to the other Committee Members who are duly recognized here tonight.

MR. TOBIN: There is clearly no point of order, Mr. Chairman. I can sympathize with the hon. Member. He is a little bit embarrassed that I am standing up for my constituents where he has failed in the past to stand up for his. I am here to fight the amalgamation issue in my constituency, if it is against their wishes, unlike him who is here to support whatever the Premier wants against the wishes of his constituents. But clearly there is no point of order.

MR. WALSH: On a separate point of order, Mr. Chairman.

MR. CHAIRMAN: The Chair has not ruled on the first point of order yet, Mr. Walsh. There is no point of order. It is a disagreement between two hon. gentlemen, but I would like to remind Mr. Tobin that this is estimates. I have granted him leeway to ask whatever question he wished and I will grant the Minister the same opportunity to answer that question. I would not want this to get into a political debate. These are estimate committee meetings and I would suggest that you ask -

MR. TOBIN: (Inaudible).

MR. CHAIRMAN: The Chairman is ruling on a point of order, Mr. Tobin. I suggest that you ask your question and give the Minister an opportunity to answer it.

Did you have another point of order, Mr. Walsh?

MR. WALSH: The only thing, Mr. Chairman, is if this is going to be the tenor of the meeting from here on in then I want to say that as a duly constituted Member of the Committee I may be reluctant to allow the hon. Member to continue. I do not mind questions, but to be making political statements, when they can be just as easily dealt with in the House of Assembly tomorrow in Question Period.

MR. CHAIRMAN: Mr. Aylward.

MR. R. AYLWARD: Mr. Speaker, I have heard on a couple of occasions now that Members will or will not allow other Members of this House of Assembly to speak at committee meetings. Members of this House of Assembly have every right to speak at committee meetings. It is not something that we are granting him by leave. Every Member of this House of Assembly may speak at committee meetings. They may not vote if they are not duly recognized Members but they certainly have a right to speak. If the fifty-two of us were here tonight each of the fifty-two of us would have equal rights to speak.

AN HON. MEMBER: Second to the committee.

MR. R. AYLWARD: Certainly second to the committee if necessary. There was no committee member recognized before the Member for Burin - Placentia West who has the floor, and now we are wasting his time so we should get on with it.

MR. CHAIRMAN: The Chair has already established that the letters that are required to make Mr. Tobin a bonafide Member of this Committee can be had shortly, in short order, if it is requested. I have already explained that we will not allow him voting privileges without it, nor will we allow him to be officially a part of the quorum, but the Chair has recognized that he is here as the official opposition critic for that Department and we have granted him the time to ask questions. I would like to rule on the comments made by Mr. Aylward.

In my standing orders, I had this highlighted, Standing Orders 86B: Any Member of the House of Assembly, who is not a Member of a Standing Committee, may, unless the House or the Committee concerned otherwise orders, take part in the public proceedings of the Committee, but he may not vote or move any motion, nor shall he be part of any quorum.

If the Committee wishes to remove its permission granting Mr. Tobin the right to ask questions, then the Chair would have no choice but to rule on that, in which case Mr. Tobin would have then, to either accept that ruling or get the letter to which we referred, but I would prefer that it not come to that; I would prefer that we could proceed in the manner that we have proceeded at the other four meetings without any problems and I will rule that there is no point of order and considering that we have used up Mr. Tobin's time, I have to rule that he is out of time right now, I will go to another Member of the Committee but I will get back to you.

Mr. Walsh.

MR. WALSH: Thank you, Mr. Chairman. Mr. Minister -

MR. TOBIN: On a point of order, Mr. Chairman?

MR. CHAIRMAN: On a point of order, Mr. Tobin.

MR. TOBIN: Mr. Chairman, I came here tonight as the critic for the Department of Municipal Affairs and I came here to ask questions of the Minister. The last weekend when we started this process I think we had a good meeting and I think we can have another good one tonight.

Now the only difference tonight, compared to last week, is that I do not think there was a single point of order raised. Tonight, twice, in my allocation of ten minutes, the Member who was not here the other night came in and choose to disrupt the meeting. All Mr. Walsh, the Member for Mount Scio - Bell Island, has been doing is disrupting the meeting intentionally to deny me my ten minutes to question the Minister.

I believe, Mr. Chairman, that I have a right to come here as a Member as you just ruled, and ask questions without being intimidated or attempted to be intimidated by the Member for Mount Scio - Bell Island. I think, Mr. Chairman, that the Member should be put in his place and told not to continue with that type of practice, because if he does, I have no intention of staying here tonight if there are attempts to muzzle me by the Member for Mount Scio - Bell Island, denying me the time I have been allocated, so I think that rather than get this meeting off on the wrong foot, I think, Mr. Chairman, that probably you should set the ground rules right away for the Member for Mount Scio - Bell Island and let us get on with the same type of a good debate and discussion that we had the other night which can happen again tonight, if the Member for Mount Scio - Bell Island is prepared to let it happen and forget his incompetence.

MR. CHAIRMAN: To speak to that point of order, Mr. Ramsay.

MR. RAMSAY: I just want to clarify something. If the hon. Member for Burin - Placentia West is having a problem, and he feels that his credentials are not in place, why do we not recess for a couple of minutes, Mr. Chairman and have him produce them, then there is no question as to his credentials before the Committee.

MR. CHAIRMAN: Order, please!

The Chair has already acknowledged that Mr. Tobin will be given the time to ask his questions. I would have to agree with the statement that was made, that there was no point of order called at the last meeting at the Colonial Building. I do not believe there was, but I stand to be corrected on that. I would prefer that we get back to that kind of questioning and answering as well, so I would respectfully ask all Members of the Committee to recognize that this is an Estimates Committee Meeting and to deal, not necessarily specifically with the Estimates, but to deal with it in a proper question and answer forum.

The Chair had recognized Mr. Walsh.

MR. WALSH: Mr. Chairman, to go back to the first two words I managed to get out before the hon. Member decided to shoot from the hip rather than to listen -

MR. CHAIRMAN: Order, please!

Are you on a point of order now?

MR. WALSH: No, I am speaking. What I wanted to say, Mr. Chairman, was that I did not -

MR. CHAIRMAN: Order, please!

Are we on a point of order now or are we questioning the Minister.

MR. WALSH: I am asking a question but I wanted to make a quick statement that I think could help us.

MR. CHAIRMAN: Well I would prefer that you ask the question without making the quick statement.

MR. WALSH: Alright, let me ask the Chair a question. Can I do what I intended to do to give my time back to the hon. Member because it was not my intention to take time away from him. I am more than willing to let him carry on with my time because I did cut into his time and that was not my intention with the point of order. I would be very pleased to relinquish what I attempted to do back to the Member so that he could carry on. I did not want to take his time away from him.

MR. TOBIN: I would not accept (inaudible).

MR. CHAIRMAN: Very well. Mr. Walsh continue.

MR. WALSH: Mr. Chairman, I guess I can understand why common courtesy would not be extended back and forth. Mr. Minister, there has been a change in some of the policies with respect to areas in my particular district and I guess others, from half acre lots to one acre lots. I understand that that policy is now in place. Can you elaborate a little bit on that for me?

MR. GULLAGE: Yes, it is not totally in place. We are still dealing with an amendment, but the principle has been established that we are making a change to the larger lot size. The reasoning behind it is we have had difficulty with the smaller half acre lots, 20,000 square feet, I think, is the exact amount that is currently in the regulations throughout the Province. Depending on the topography of the land, the location and the soil conditions and so on, it can create real problems depending on the proximity of homes and so on. So we decided that at least in the northeast Avalon, we have started with the St. John's urban region regulations first and this is the only area that it applies to right now. Really what we are trying to do is two things: we are trying to control non-serviced development because with the smaller lots it means eventually having the Province go in and help out with modern servicing at very high costs, because the houses are separated a lot more widely than they are in regular sub-divisions. And of course when you have to correct servicing problems, particularly in a lot of communities where it is very difficult to work, you know, with rocky conditions and so on, it becomes very expensive.

So the larger lot size makes a lot more sense, particularly if we can position the house in a certain way. The regulations are designed so that the positioning of the house is important so that later on when that area is serviced you can divide the acre lot up into building lots whereas if you put the house in the middle of the lot you would not be able to facilitate that very well. So we also have requirements to position the house in such a way that we can facilitate servicing in that area later on with more smaller lots on that previous acre lot application.

So I think that pretty well covers it. That is the reasoning behind it. Where possible we still would rather see modern servicing. It is not really what we want to see, but we do recognize that we have situations, particularly with land that has been in families for a long time where they want to continue to reside on family owned land and the land is there to do it. It does not always present a problem. We are trying to facilitate that, but it is just we would like to have a larger lot size.

MR. WALSH: Following up on that: in areas, as you say, where you are going to decide where the placement of the home is and so on which is good, what about in the situation where there were some developments that had been, if not approved, were in the process of being approved? Has any allowances been made for any grandfathering of those?

MR. GULLAGE: Yes, we are grandfathering in applications. I think the way it reads, applications that were in process at the time - now I am not sure whether that would extend - maybe the ADM could help me here. I am not sure if that would extend up to the time of the amendment being approved or whether the grandfathering came into effect at a time we changed the regulation. Don, perhaps you could help me there.

MR. PECKHAM: Yes. Mr. Chairman, there would be some grandfathering in under the new regulations. Anybody who had an approved application, a fully approved application and were affected, the application would be honoured.

MR. WALSH: That should take me I think, pretty well to the end of my ten minutes with the other items; I have some other questions but I will hold them for later.

MR. CHAIRMAN: Mr. Aylward was the next one to be recognized by the Chair, but he has turned his time over to Mr. Tobin; Mr. Aylward has relinquished his time to you.

MR. TOBIN: Okay, thank you, Mr. Chairman. I would like to thank my colleague for Kilbride for the courtesy extended in permitting me the opportunity to finish my questions, as I am sure two of my colleagues on my immediate right would have done.

Mr. Chairman, I had some questions - it was a line of questions to the Minister of Municipal and Provincial Affairs before I was interrupted by the Member for Mount Scio - Bell Island - on the issue of amalgamation, particularly as it pertains to districts in rural Newfoundland and cases where it is obvious that there is no unanimity between the towns in question on the amalgamation issue. When do you anticipate would be the earliest time they would have to look at hearing results of the issue of being forced to amalgamate?

MR. GULLAGE: Well I would suggest that over the next couple of months in particular we will be dealing with, I would say, eight to ten groupings of communities. Reports are in now and I am in the process of discussion with the communities.

I would suggest that in rural Newfoundland in particular the vast majority, the vast majority will come together by way of agreement, because they want to do it.

MR. TOBIN: And anyone who does not?

MR. GULLAGE: Well, we will only amalgamate in any case where we see that is the right thing to do. We have about ten or twelve amalgamation scenarios where the commissioners themselves are saying that it is not right to proceed with amalgamation. We do not have the commissioners always saying that amalgamation is the right thing to do, we have some who are saying it is not, so we are obviously not going to proceed in that case. Where we get great objection, we would have to be satisfied that, in spite of that objection, the consequences of not doing it would be so great that we would want to proceed.

So we want to be very satisfied. And you know, before you would force an amalgamation, you obviously as a Government, have to be very satisfied that the reasons for taking that action are very positive and something that for the sake of the people you should do. You want to take the time and I cannot foresee too many like that in rural Newfoundland.

We have some scenarios in the urban sector; Stephenville, Corner Brook, Deer Lake, you know there are possibilities there we may have to proceed even though we have one or more communities saying no to it; it is just so obvious that it is right that we may want to proceed.

MR. TOBIN: In the event that there is a council where the residents of that community strongly reject amalgamation with any other municipality, will that be done, without at least, being brought before the House of Assembly?

MR. GULLAGE: No. We would not bring together an amalgamation, I cannot foresee it. I cannot speak for Government but, I cannot foresee Government, based on the comments we have made so far - certainly the Premier and I have been making - that, if we saw a scenario where we wanted to proceed, we would bring it to the House of Assembly for debate; and I would see that (inaudible).

MR. TOBIN: So the earliest then, one could expect would be the fall session because -

MR. GULLAGE: If they were protesting, in spite of the commissioners saying it should be done, and I am assuming now that the commissioners - let us say-

MR. TOBIN: The commissioners, I would suspect (Inaudible) I am very suspicious. I do not know. But based on the information that I have received (Inaudible) and knowing the commissioners I would not be surprised at all but they made that recommendation.

MR. GULLAGE: Well, if the commissioners were saying that it should not proceed, I doubt very much, unless I could see something and the Government could see something different, that we would proceed. But if they were suggesting the amalgamation made sense then obviously we would certainly take a hard look at it and want to be satisfied that backing off was - backing off can be the wrong thing to do too if it is clearly in the best interest of the people to come together.

So we would take a good hard look at it and if they still, at the end of the day, said: in spite of everything that shows we should be together we still do not want to do it, well yes, we would come in to the House of Assembly.

MR. TOBIN: But it seems you are cutting back somewhat now on the number that look like they may be amalgamated in the first instance. If I could quote from the newspaper article, and it says basically: frankly, the manual on how to run the whole thing seems to have been lost in relation to the amalgamations.

MR. GULLAGE: Who are you quoting?

MR. TOBIN: It is an article in the paper and it says (Inaudible) dealing with the amalgamation issue. And it says (Inaudible) -

MR. GULLAGE: Somebody is saying what?

MR. TOBIN: It says: frankly, the manual on how to run the whole amalgamation issue seems to have been lost.

MR. GULLAGE: Who's manual? And who is saying it?

MR. TOBIN: The article in the paper, in the -

MR. GULLAGE: What does that mean?

MR. TOBIN: I do not know, Mr. Chairman. It seems to -

MR. GULLAGE: So that has to be the gospel, because somebody wrote it in the paper.

MR. R. AYLWARD: No, it says, frank the manual is gone, that is what it actually says.

MR. CHAIRMAN: Mr. Tobin, could you give us the date of that paper?

MR. GULLAGE: Do you want me to give you a chronology of where we are with the amalgamation, just to shoot that down very quickly?

AN HON. MEMBER: Sunday Express (Inaudible).

MR. TOBIN: Well, Mr. Chairman, if the Minister has problems with that we will just direct it to (Inaudible) - I have another question that I would like to ask on the amalgamation issue again. Over the past -

MR. GULLAGE: Do you want me to answer that one? Was that a question or just - ?

MR. TOBIN: Yes, well, okay, I will talk to you about that after. There is another question, I think my time is about up.

MR. GULLAGE: Do I get a chance to respond? I don't, do I?

MR. TOBIN: Okay, then, sure. If you want to respond -

MR. CHAIRMAN: I think the Minister should be given the opportunity to respond.

MR. TOBIN: By all means. I thought he did not want to respond.

MR. GULLAGE: You're very entertaining but I wouldn't mind responding now and then, you know.

MR. TOBIN: Okay, sure.

MR. CHAIRMAN: In the meantime, if I may, Mr. Minister. Is it your wish, Mr. Tobin, to give us the name of the newspaper and the date?

MR. TOBIN: Yes, it is The Sunday Express and it is from an article by Peter Gullage.

MR. GULLAGE: That must be correct (Inaudible).

MR. TOBIN: It is The Sunday Express and it is an article by Peter Gullage, and it deals with the amalgamation issue. And it says in (Inaudible): looking at the way Eric the Initiator has fired up the debate by making half-hearted promises, it makes one wonder where the initiative for the amalgamation has gone. Frankly, the manual on how to run the whole thing seems to have been lost.

I was wondering if that reference (Inaudible).

MR. GULLAGE: He could be wrong, you know. It is possible. The press are occasionally wrong. Not always, but occasionally. Let me say this to you: At the end of the day you are going to be very surprised at the results of amalgamation. A lot of people are going to swallow their words. Words like that, for example. We have communities now coming to us which were not even in the original forty-two groupings asking that we start feasibility hearings and start the process towards amalgamation. They are not even on the list. So to suggest that the process is not successful, I would say my only comment is: stay tuned.

MR. R. AYLWARD: Who are they?

MR. GULLAGE: Pardon?

MR. R. AYLWARD: Which ones are coming to you?

MR. GULLAGE: Well, I am not going to - not until we announce the feasibility hearings.

MR. R. AYLWARD: How do people in the communities feel (Inaudible)?

MR. GULLAGE: We cannot tackle them now, we have too many to do.

MR. CHAIRMAN: You still have time, Mr. Tobin.

MR. TOBIN: Yes, okay, sure. Well, I would like to say the Minister expressed the same (Inaudible) confidence that I heard the Mayor of Wedgewood Park express this morning when he said that he is not concerned about the amalgamation issue, because both the Minister and the Premier have promised him they will not have to be amalgamated. And it is that type of confidence that (Inaudible) -

MR. GULLAGE: I hope you are not quoting me on that too, are you?

MR. TOBIN: No, that is what the Mayor of Wedgewood Park said. In any case my question to the Minister -

MR. GULLAGE: I do not think Paul said that at all. As a matter of fact I would bet money he did not say it.

MR. TOBIN: My question to the Minister again is that (Inaudible) -

AN HON. MEMBER: (Inaudible) on the radio this morning.

MR. GULLAGE: Paul didn't say that.

MR. TOBIN: My question - and I am sure, Mr. Chairman, the Premier will not have to eat his words on his commitment to the people of Lewin's Cove. I feel very confident that will not happen either. Nor the Minister. But my question again on the amalgamation issue is that for some time the amalgamation issue saw the cancellation or postponement of elections to various municipalities in the Province by a year. In some cases even longer, particularly the City of St. John's. Does the Minister anticipate that any of these will have to have elections again because of the amalgamation issue before the next elections? Before their next due election date?

MR. GULLAGE: Are you talking about the groupings outside the northeast or (Inaudible) -?

MR. TOBIN: Well it could be outside or inside. I am saying that there have been a number in this Province that have had their election postponed because of the amalgamation issue and then they were ordered to go ahead. I am asking the Minister now if he sees or anticipates any of them will have to have an earlier election instead of the regular four years.

MR. GULLAGE: I do not know if the question makes a great deal of sense, Mr. Chairman, in all do respect. Obviously if they had an election last year and another proposed amalgamation is going to take place that involves that community, most likely, unless we are doing an annexation, would require another election.

MR. TOBIN: So you are saying that there is a possibility existing that there will be councils that have to be elected -

MR. GULLAGE: The possibility is there, sure.

MR. TOBIN: - such as the City of St. John's?

MR. GULLAGE: I am obviously not going to comment on the northeast Avalon if that is what you mean.

MR. TOBIN: Is there any money included in the Budget here to conduct elections in this coming year for north east Avalon or any other part of the Province?

MR. GULLAGE: Yes, we have money budgeted for the amalgamation procedure.

MR. TOBIN: Is there money budgeted here for council elections anywhere in the Province?

MR. GULLAGE: I do not know if it is defined as that. We have a block sum of money for amalgamation initiatives covered off in this year's budget. I think it was covered off last year.

MR. TOBIN: No, but is there any money included in this for elections? Forget about the amalgamation.

MR. GULLAGE: Elections per se I do not know. We have not defined the budget. It is just a straight amount of money for amalgamation.

MR. TOBIN: I think there is a budget brought in that is now before the House of Assembly yet you do not know if the money exists? I mean your budget is here, Mr. Minister.

MR. GULLAGE: What is the question again?

MR. TOBIN: I am asking you if there is any money allocated in this year's budget for municipal elections anywhere in this Province?

MR. GULLAGE: I am just trying to think of what we have done so far and what we would do in the future. We assisted Grand Falls - Winsor, for example, with Summerside - Irish Town just to name two that we have done with sending out staff to help them with the transition process.

MR. TOBIN: No, I am not talking about that. I was asking if there was any money allocated in this year's budget -

MR. CHAIRMAN: Order, please!

Mr. Tobin, your time is up.

MR. TOBIN: If I could -

MR. GULLAGE: There is no money per se, no.

MR. TOBIN: There is no money allocated for any elections this year.

MR. GULLAGE: No. I am not sure where you are leading with your question, but no there is not.

MR. TOBIN: Okay. That is all I asked. So that means there are no elections.

MR. CHAIRMAN: Mr. Ramsay.

MR. RAMSAY: Thank you. Mr. Minister, I know there seems to be a lot of commentary about amalgamation of communities based on how our Government would proceed. Now I wonder if you might give us some indication as to the procedures that were followed in the past and how that differs from the manner of bringing something to the House of Assembly for open public debate. I know they were mentioned, and not being that familiar with the avalon area back at the time, a couple of different instances occurred as I understand them. One was the Mount Pearl - Newtown experience and the other being Foxtrap and some other community were amalgamated as I understand it. I just wonder if you could explain to us the procedure that was followed in those cases with plebiscites, or whatever, and how that would differ from the given plan for proceeding through the House of Assembly if amalgamation is to take place.

MR. GULLAGE: Well, I can only speak for the one that is on the floor right now and that is the northeast Avalon. Of course we have said that we will come into the House with a resolution and have a debate in the assembly because we do have some communities in the northeast Avalon who are dissenting even though the commissioners are recommending amalgamation, so we will do that.

In the past, my understanding is that that did not take place. I could be corrected, but I do not believe it took place by way of a debate in the House of Assembly per se. A decision was made by the Government of the day to proceed or not.

AN HON. MEMBER: (Inaudible).

MR. GULLAGE: Yes. But it was not done - the advantage of a debate did not take place.

AN HON. MEMBER: (Inaudible) Cabinet decision.

MR. GULLAGE: Just a feasibility process was followed, obviously, public hearings, then Cabinet made a decision and decided to proceed.

MR. RAMSAY: Was there a case - I suppose, the consulting of your officials or maybe your own knowledge of it - where the Government did proceed in deference to a community's choice, in comparison to I guess what the overall choice or the, you know, based on the way the plebiscite was carried out or whatever, in the past?

MR. GULLAGE: I can think of the CBS scenario with Foxtrap, I believe it was, was the last one to not want to come in but yet were brought in. But after - you know, the process was followed of course, with public hearings and so on. I do not think that was debated in the House at that particular time. The Act does give the right for the Minister and the government to make a decision and not come to the House. It is just that the government obviously has the right at any time to take that final step and come in here for debate. But I do not believe it was taken in the case of the Foxtrap scenario. I think in spite of Foxtrap saying: we do not want it, it was just a Cabinet decision and it was done.

MR. RAMSAY: That is all I have right now, Mr. Chairman.

MR. CHAIRMAN: Mr. Short.

MR. SHORT: I thought you were going to go back to the Opposition there. Okay, a couple of things.

There is about $1 million I believe in the Budget estimates for grants to local service districts. Do we have to wait for the estimates I guess in the Budget to be passed before you can start dealing with it? Is that the problem?

MR. GULLAGE: Yes. The thing with the local service districts is it is part of the Budget where capital works is not. Capital works is a Budget item in a future year when the work is substantially complete or complete and the bank borrowings are put into the financing corporation. So it could be in next year's Budget or even the year after. But with the local service districts it is a current Budget item which has to wait for Budget approval.

MR. SHORT: Okay. I want to ask another question. I hesitate to get into this, but I want to talk about the municipal grants structure and probably walk us through some of the improvements or whatever in the new structure. But I want to first of all just give you an example in my district and see if I am comprehending this new structure properly in terms of what is happening.

I have a town council basically that used to get over $100,000 in grants. They are carrying a fairly hefty debt load in terms of water and sewer and as a result they were only paying about $70,000 to $75,000, which is their 20 per cent share I guess, of their revenues. I take it the Government was picking up the tab for the other $700,000, to use some rough figures. So if the town submitted $70,000 and the Government picked up another $630,000 - are we trying to get away from that kind of a drain on the public purse? Because to me, even though it does not show up, it is almost the same as a grant to the community, if we as a Government were paying $630,000 and the town is only paying $70,000. In the same context even though they are paying back $70,000 we were also previously giving them over $100,000 in grant, just through (Inaudible) sections, right? - the water and sewer debt subsidy plus the grant structure as well that was in place, right? So it seems to me that the town actually did not pay anything to Government. They paid you $70,000 but you sent them out a cheque for $100,000 or whatever the figure was, plus you paid another $630,000 to service the $5 million debt, or whatever it is, right? So where did the town pay any money in those kinds of figures? I do not have the exact figures here but -

MR. GULLAGE: You've asked a very complicated question.

MR. SHORT: Yes. But what I am getting at is: I always out in the rural communities worked with local service districts, and I thought we were always ripping off the government if the government gave us a $55,000 grant. I always felt bad that local communities, say with local service districts, got an out-and-out grant and yet town councils were paying their way. But when you get situations where the government is giving the town council $100,000 and saying: pay back $70,000, and then they are paying another $630,000 on servicing the debt charges, it seems to me that they are getting a much better deal than the eight or nine communities, say where I live, where for the last four or five years we got $55,000 a year as an out-and-out grant. The town picked up probably $730,000 while nine communities out in the rural area picked up $55,000. Is that the kind of thing we were trying to get away from, we want the towns to, say, pay a bit more than what they were paying?

AN HON. MEMBER: (Inaudible).

MR. GULLAGE: First of all we have the two types of municipalities. We have the incorporated towns and cities and we have the local service districts. Accessing the municipal grants programme and the debt subsidies means you have to be in the incorporated category per se rather than the committee. That is one thing.

But you are quite right, there are a lot of disparities out there, depending on the location. In some areas it is not so bad but we have not really found the solution to some of the disparities but we are trying. Because a lot of those local service districts, as you know, are basically very small numbers of people. The economies of scale are not there the same as a larger community. We have to deal with them a little differently than the communities, at least right now. There are some communities that will argue that they get preferential treatment in the LSDs because they get their roads paved by Highways, and you get that argument from the incorporated communities.

But I know what you are saying about the debt. In one hand we are giving it out in grants, in the other hand we are taking it back on the debt subsidy, and I guess it is the net difference you have to look at. Well, what happened this year was -

MR. SHORT: But doesn't the loan - I guess what I was getting at - turn into a grant?

MR. GULLAGE: Yes. In effect. You see, what we have done now with the debt subsidy side of the grants - if you want to say, it is really not, it is really a separate issue - but we shifted with the grants programme a lot of dollars. Well, actually, the total shift almost was from the urban areas to the rural, okay? That was mostly positive, the vast majority of the communities in the rural areas were positively impacted. The exceptions were those which had probably ridiculously low tax rates, and until they came up to a reasonable level they could not get the positive impact. Some of them are starting to move their taxes up to a reasonable rate now and they will kick in and they will see a positive impact in years to come. But there was a positive shift from urban to rural.

However, a lot of those same rural communities had debt on the books in the financing corporation. Because for the first time in many cases we were asking them to pay something towards that debt per household - and we capped it at $300 a household - that negated the positive side on the grants for many of them and we ended up in a negative position overall.

Now in dealing with capital works this year and in future years we have to be very aware that if we have communities that have very little fiscal capacity, very little going for them, in other words they are poor, in the sense that they do not have a business base, an industrial base and so on, and yet they still need water and sewer just to use an example, we may end up, because they have reached the limit of the amount that they can pay per household on their debt, the Province may end up paying for everything, otherwise we have to say, you cannot have the services.

A lot of the rural communities will continue to get servicing but it will have to be at the Government's expense, predominantly; because they cannot handle any more debt than they have now. We have many in that category, if they are not going to be 100 per cent subsidized by the Province, which is a grant as you say, there is certainly going to be ninety or eighty or seventy, depending on what capacity they have left per household.

MR. SHORT: And they are each making individual cases?

MR. GULLAGE: We are looking at every one of them as individual cases, we have to.

MR. SHORT: Okay, thank you.

MR. CHAIRMAN: Mr. Aylward.

MR. R. AYLWARD: Just a couple of questions as I want to stay away from amalgamation for a few minutes.

The first year the Minister was made Minister of Municipal and Provincial Affairs, he came in with a very good reform I thought; I was rather pleased to hear the announcement that he was going to come in with an early tendering system on the Municipal Capital Works Programmes, which always was a big problem, we always had a big problem with it, and that solution in itself would have been fairly simple.

What the construction companies are saying now is, by the time the Budget is approved, the tenders are out, councils have awarded contracts and plans are done; they are all doing water and sewer works in October, November and December of the following year, obviously it is more expensive to do that. You have a harder job getting the quality of work, but the Minister did his pre-announcements for only one year, what is the problem since, have you given up on that reform?

MR. GULLAGE: Well the first year we took Government in April and as quickly as I could after Cabinet was formed in May, I think it was only a week or two after we had - the previous Government had dealt with it anyway, substantially, so it was just a matter of taking the recommendations and dealing with them and bringing them forward, so we were still though, up into May I must admit even in the first year.

The second year, you are right, I made that promise and capital works were down in the fall prior to the calendar year itself. This year, the problem we had was quite obvious I guess, is the Grants Programme.

We came in at the very tail end of the year, decided to proceed, which meant we knew then that we were going to have problems after the calendar year as of January 1, with phasing in a new grants programme and with communities that - with the time frame we were caught with, we had to take that into account.

The other thing I am just reminded of, is the fact, and this is probably the most important point, that we had to see the impact of the water and sewer debt subsidy changes as I just described and the fact that for the first time, a lot of these communities that we had to assess for water and sewer and roads, had to be looked at for this current year's capital works, but we had to know how they were going to be impacted with the existing debt that was on the books. That took us January, February and March essentially to look at every community and see the impact of the grants and the impact of the charges that we were assessing them for existing debt, otherwise we could not properly deal with the capital works for this year.

I am glad we took that step because now we are able to look at every community, we know how many dollars are faced off against existing debt and we are able to judge the capacity to take on more debt and decide what the percentage is going to be - provincial versus municipal contribution to new municipal debt. But next year, hopefully now that we have things in place, I hope we can get right back on track and get capital works announced early for 1992.

MR. R. AYLWARD: Would it not be reasonable to assume that - you just said you wanted to wait to see what the impact of the new capital debt structuring -

MR. GULLAGE: No, no. Existing Capital debt.

MR. R. AYLWARD: Yes, but would it not be reasonable to assume that you looked at that before you brought in your grant system, I mean you could have bankrupted the whole of every municipality in the Province if there had been a wrong impact.

MR. GULLAGE: Well we had to do two things. We had to phase in and see how the new grants programme was implemented in a given town, and then on top of that we had the charges that they were expected to pay on the existing debt.

MR. R. AYLWARD: Yes, but it is only reasonable to assume that you should have known that before you brought it in. If you did not know what impact it was going to have on the towns you could have bankrupted them.

MR. GULLAGE: We could not know. We could only know globally. We could not know about each individual town.

MR. CHAIRMAN: Order, please!

I am going to have to ask you to lean into your microphones.

MR. GULLAGE: We could not know about each individual town until we went out and we actually sat down and had the regional offices sit down with each municipality and go into it in detail because we did not have approval on the new grants programme until the very end of the year.

MR. R. AYLWARD: The new grants system as it relates to amalgamation: I guess one of your main goals since you became Minister was to see the amalgamation process through, and I believe that you had a golden opportunity to get something positive done with that through your grants system, yet you brought in a grants system that will have the amalgamation system work completely opposite to the grant system. The bigger the town gets now, the less grants, the less money, the more debt they are going to have. So that is a disincentive, wouldn't you say, for amalgamation rather than incentives?

MR. GULLAGE: No, because the main reason for amalgamation is a planning reason per se. Now granted financial is important too and probably would come second to planning and ties into planning to a large degree, but I do not see the grant structure as being negative to amalgamation by any means.

MR. R. AYLWARD: Well if two towns were operating separately and they have a certain debt load now that they could afford and your whole philosophy on the grant system was that the bigger towns pay more, so why would they want to get any bigger?

MR. GULLAGE: The differential is not there as great as you may think. The first component in the grant is the equalization component, as we call it, and the second one speaks to incentives. But the equalization component is only a part of the grants programme. There is more to the ability of a town to be cost effective than the grants programme. You put two, three or more towns together and the economy of scale of savings on equipment, on staff and on duplication of services and buildings and so on is the biggest savings of all, quite apart from the grants programme.

MR. R. AYLWARD: Only if they are not working efficiently now. But you have so many roads to clear no matter if they are all in the one town or if they are in three different towns. You have the same mileage of road to clear of snow, the same amount of salt, the same amount of ditches to dig.

MR. GULLAGE: Yes, that is true but there is a great duplication. I could take you right now within a half hour drive of here and show you four towns side by side and every one of them has a front end loader to clear snow and they themselves admit that.

MR. R. AYLWARD: If that front end loader clearing the snow is doing it as much as it can, all you are doing by amalgamating is - all the roads are cleared fairly efficiently now so that ambulances and fire trucks can get there. If you had one front end loader some of the roads, at least half of them, would be only done half as efficiently.

MR. GULLAGE: You did not let me finish.

MR. R. AYLWARD: Well -

MR. GULLAGE: If you would let me finish, a lot of these front end loaders -

MR. R. AYLWARD: If you have one front end loader clearing five miles of road or you have four front end loaders clearing five miles of road, obviously the five miles of road would be cleared faster with the four front end loaders and more efficiently, and the fire trucks, ambulances and emergency equipment could get around faster. That is the idea of clearing the roads.

MR. GULLAGE: What I meant to finish with, if I could, is that these councils are even saying to me that this is ridiculous. We get our roads cleared in about a half a day and then it sits there unused where a neighbouring community could be using the equipment. They themselves are saying that it is ridiculous, the amount of duplication they have. I am talking about a situation where there are four towns involved, and they openly admit that they should be together. This is not me talking, this is them talking.

MR. R. AYLWARD: Well why aren't they together then. It is their choice to go together.

MR. GULLAGE: They are going to be together.

MR. R. AYLWARD: Well that is their choice. They should have been together long ago in that case.

MR. GULLAGE: Yes, they will be very soon.

MR. R. AYLWARD: This year because of the changing grant system, obviously towns had a hard time getting their budgets prepared and had a hard time getting used to the new system. Does the Minister have any idea how many towns submitted at least a first or second time a deficit budget?

MR. GULLAGE: No, I do not, but maybe one of the staff could help you with that.

SOME HON. MEMBERS: (Inaudible).

MR. R. AYLWARD: I know they were not accepted but there were a lot of them sent in. I know four myself.

MR. PECKHAM: Yes, if I could address that, Mr. Minister. Under the Municipalities Act of course towns must have a balanced budget and some towns initially made a request that they be allowed to send in deficit budgets, and these were all rejected. There was a small number of these. There was not a great number from the whole Province that were sent in. I could not give you a definite number but it would not be more than a handful.

MR. R. AYLWARD: Well, Conception Bay South, St. Mary's, Stephenville and Port au Choix are probably four - I am not sure about Port au Choix but I believe so - that had deficit budgets. The Department went back and looked at last year's grants system under last year's figures and came up always - for those three or four areas anyway, I believe - with money that showed up on last year's budget which would balance this year's budget. Kind of coincidental to me that this would happen.

MR. GULLAGE: (Inaudible) this never happened at all. What happened was that each year every community has an audit done after their year is over. The final audit results in adjustments to their grants, either favourably or unfavourably. Many of these communities you speak of had favourable adjustments in the previous grants - because we are talking about the old grants system now obviously, in last year. These grants' adjustments - and CBS is a good example - I think the figure, I stand to be corrected, was something like $97,000 of an adjustment in their grants in their favour. So that helped them balance their budget. But that is not unusual, that happens every year. We always have an audited situation to finally correct whatever the figures are going to be for the previous year. Sometimes that audited situation results in a positive impact, sometimes it is negative. But we have had some positive impacts this year that helped these communities balance their budgets.

MR. R. AYLWARD: And if it is a negative impact their budget is sent back to them in the middle of the year to try to rectify it?

MR. GULLAGE: Well, if it was a negative impact obviously we have a bigger problem than we had if, assuming it was negative, they had trouble balancing (Inaudible).

MR. R. AYLWARD: No, I mean a budget that was balanced in January when it was sent in showed up after the audit in - I think you will find some of these in February and March - showed to be negative. Does that budget go back to them then so they have to balance it for the rest of the year?

MR. GULLAGE: No. Once we have a balanced budget starting out the year, if we then had an adjustment as a result of the audit we would have to work with them throughout the year. Hopefully, by the time the year is over, we have made whatever correction needs to be made. But we only require the budget to be balanced once when we start out the year, and then we work with them throughout the year. We could end up with a deficit or a surplus at the end of the upcoming year, we just do not know.

MR. R. AYLWARD: One final short question, Mr. Chairman.

MR. CHAIRMAN: Order, please! Order, please!

I would like to remind Mr. Aylward that his time is up and I do not want to start doing that. I do not want to set a precedent.

AN HON. MEMBER: (Inaudible).

MR. AYLWARD: It might not be a short answer, but it will be a short question. If the Minister does not have the time to answer it he does not. Looking at last year's salary details compared to this year's salary details, there were sixty-three people or positions shorter - you know, less - in the Department this year than last year. It seems like an inordinate number of them came from the Fire Hall. Over 50 per cent of them, thirty-five positions, were eliminated from the Fire Hall. Now overall the Department shows a 10 per cent reduction as was stated. But do you not think it is kind of unfair that one division of your Department would suffer 50 per cent of the losses in positions rather than have it spread over most of the 557?

MR. GULLAGE: (Inaudible) a lot of those are part time, aren't they?

AN HON. MEMBER: (Inaudible).

MR. R. AYLWARD: These are all permanent employees, not part time ones. Sixty-three difference in your figures and there are thirty-five positions less in the Fire Department. So over 50 per cent of them came out of one of your divisions, whereas if they had been spread out a bit more it would have been -

MR. GULLAGE: Of course as everybody knows, for some time now we have been dealing with the fire department. We have been managing the fire department directly from the Department with the Assistant Deputy Minister having the role of Fire Chief per se along with his other duties, and we have been trying to have a more efficient effective fire department, so we have made management changes over the last couple of years.

We believe we have a good fire fighting service. The numbers of firemen per shift is as good or better than any other city of this comparable size because we have checked. The down-sizing, if you want to call that over the last couple of years and that is really where those figures came from the last few years, is as a result of good management and we have been asked to manage it more effectively by the people who are paying for it, St. John's, Mount Pearl, Wedgewood Park, Portugal Cove, St. Phillips, Paradise, I mean we really are answering to them because they pay for the fire department.

MR. R. AYLWARD: Yes, I do not disagree with that, but I find that in your cutbacks, if that management would have happened, the thirty-five people would have been short because of proper management, well that should have been done, so obviously you only took 50 per cent of the cutbacks that your Government planned if that is not the case, these were going anyway. If this was good management, and those thirty-five positions were going, that is what you just told me, then the rest of your Department only took a 5 per cent cutback rather than 10 per cent as your Government said they took.

MR. GULLAGE: I will have to check the percentages. I do not know off the top of my head. I will have to check the number of employees and do the calculations.

MR. CHAIRMAN: Mr. Walsh.

MR. WALSH: Thank you, Mr. Chairman. I would like an opportunity to deal with some of the actual estimates, and in particular I want to take a quick look at Historic Sites, Page 251, 6.3.01.

In the professional services that are allocated under the estimates, it is without a doubt more than just a marked increase; we are looking at something in the neighbourhood of $34,000 being spent last year and $1,065 being planned for this year, page 251, 6.3.01, and in particular 6.3.01,05.

MR. GULLAGE: Yes, that is the Federal/Provincial Tourism Agreement of course, and the money that you are identifying for professional services is covered off by that joint agreement and you know we do not always have an agreement kick in as we did at this particular time.

MR. WALSH: What in particular, have you ear-marked those funds for under that agreement? What has that particular grouping been ear-marked for?

MR. GULLAGE: Well, the bulk of it is involved in the archaeological surveys that are being done in several areas of the Province, we are involved in Red Bay of course and we are on the south coast as well doing archaeological surveys, I think those are the main areas.

MR. WALSH: Would that tie in also -

MR. GULLAGE: The staff involved there are identified of course as you can see, researchers and photographers and so on.

MR. WALSH: Would that tie in also with the purchase services that are there, the $210,000 that is being budgeted compared to $51,000 last year, that is a marked increased, are they tied together as well?

MR. GULLAGE: Yes, that is the reason. It is strictly faced off against the agreement; ordinarily, we would not have that, we would have a budget in the vicinity of $50,000 or $60,000.

MR. WALSH: In the same particular category, 6.3.01, 10, we look at grants and subsidies going from $72,000 last year to $397,000 this year, where would those grants and subsidies be allocated again?

MR. GULLAGE: Yes. That is mainly Dr. Tuck's work at Red Bay. We are about to, hopefully, finalize the site as an international site, recognized as such. We will then hopefully have a very comprehensive agreement where some millions of dollars will be spent with putting the museum on the site and so on. So we are now at that stage where Dr. Tuck's work in itself is substantially complete and moving into the next phase would be actually rebuilding the site with buildings and facilities and so on.

MR. WALSH: How many international sites? If Red Bay is given international designation, how many would that give us in Newfoundland?

MR. GULLAGE: Well, L'Anse-au-Meadows, of course. How many others do we have? Do you have the numbers there?

AN HON. MEMBER: Gros Morne (Inaudible).

MR. GULLAGE: Gros Morne, of course, has international recognition. So I guess that would be the third.

MR. WALSH: So in that particular corridor then you would have virtually three international sites?

MR. GULLAGE: Yes, three international. Bonavista, I am not sure of the status there. It is recognized but whether it is international I can not tell off the top.

AN HON. MEMBER: (Inaudible).

MR. GULLAGE: No, Bonavista is not. Okay. So we have three international, if we get Red Bay recognized.

MR. WALSH: The Federal Government obviously has played quite a part in that particular development. In terms of Red Bay and what you are hoping to do down there, do you anticipate that Federal commitment can be ongoing to - you are talking about developing facilities and - ?

MR. GULLAGE: Yes. If I recollect - I haven't got it in my notes here - it is a five to seven year agreement with commitments to put the necessary buildings on site. A museum would be the prime building. But certainly an interpretation centre. I think it is a five to seven year agreement, if I recollect.

MR. WALSH: Will that international designation come prior to those facilities being finished or is that part and parcel? The commitment (Inaudible).

MR. GULLAGE: My understanding is we will know before we sign the agreement. But I do not think - because the dollars depend to some degree on that designation, how much work gets done and whatever.

MR. WALSH: As with the other international designations, will that also permit in that area, on-site development in terms of motel facilities and the like?

MR. GULLAGE: Yes. Which comes with a different section of the agreement, though, and it ties in a lot to development of tourism. It is a joint agreement on that side. What I am speaking about as far as the development of the site is concerned is really more tied into the history of it and the archaeology and so on, and ties in more directly to my Department. But when the site is substantially complete the promotion of it has to kick in and that is more in the tourism area.

MR. WALSH: In that particular area again, what consideration has the Department given to an infrastructure in terms of water and sewer facilities? Will they be looking at going with wells or artesian wells? Or are there plans or proposals to put an infrastructure in there to meet the expanded status of that community? Or am I jumping into numbers that may be yet to come?

SOME HON. MEMBERS: (Inaudible).

MR. GULLAGE: There is an agreement that is called the Southern Labrador Agreement, and the Development Coastal Agreement, and part of that agreement is provision of water and sewer. So it is a separate item but it is covered off and as I have been reminded most of it is already done.

MR. WALSH: Unlike Gros Morne, which is pretty well under virtually Federal control, would we see the exact same thing happen in the Red Bay area?

MR. GULLAGE: Yes, that is one of the conditions really of recognition and of getting funding, the fact that you have to let the Federal Government develop the site under their guidelines and their auspices. The communities are another story; they do not have any say in the running of the community per se and the community plays a part, but the general thrust of what is happening there has to be under their control because of the recognition that they give it and the funding they give it; so that is a pre-condition, you have to pretty well relinquish most of the control to their jurisdiction and their expertise.

MR. WALSH: That is all for now, Mr. Chairman; I have a few other questions in some other areas afterwards but that pretty well takes my time so -

MR. CHAIRMAN: Mr. Tobin.

MR. TOBIN: Thank you, Mr. Chairman.

I listened with interest to Mr.Peckham's comments regarding the debts of councils, where, under the Municipalities Act it is forbidden to have submitted that as a budget.

I would like to ask the Minister then, how does he handle budgets, balanced budgets that have been submitted, but due to measures taken after by Government, such as increasing the industrial water supply, the decrease in the subsidy programme for arenas, the electrical subsidy programme to the tune of $50,000, that eliminates a balanced budget and makes it a deficit budget, what do you do with that?

MR. GULLAGE: We have to work with the communities throughout the year of course; you are using some examples of impacts and I could give you many more that throughout the year you run into; emergencies, flooding, whatever. We have to work with the communities and amend their budgets, change their budgets, help them in whatever way we can.

It was unfortunate that we did see a drop in the urban areas in the facilities programme. Where it was previously $15,000 in the urban areas - the larger areas if you like - and $10,000 in rural, we made it ten across the board. But those affected were in the urban areas and we would have hoped a little better off and able to absorb that $5,000 cut; there was a $5,000 cut, you are quite right, but we do work very closely obviously with the municipalities and all sorts of emergencies arise throughout the year including the situation like this.

You mentioned industrial water: that is another area where we simply had to identify - well we did identify a problem in the budget having to come up with dollars and there was an area where we felt the municipalities could pay a little more, it had not been adjusted for some time and if the communities were adversely affected where they could not handle it, we obviously, like we do throughout the year in all sorts of instances, had to work with them.

MR. TOBIN: But, Mr. Minister, in this case it would not be a balanced budget; they submitted their balanced budgets and after their budgets were submitted to your Department - and I speak again of the Marystown Town Council - the Marystown Town Council, because of the actions after their budget was submitted, to increase the water subsidy costing an additional $45,000, and then they lost $5,000 as a result of the cuts to the arena subsidy programme, a total of $50,000, what happens in that case, what happens to their budget, you mean it is either accepting a deficit budget or it is not?

MR. GULLAGE: Well they will have to adjust their budget. I thought I said that a moment ago. They would have to adjust and rewrite their budget to accommodate the increased loss of dollars.

MR. TOBIN: I think I know where you are coming from now; your department had notified the Marystown Town Council of this $50,000 in question, so they have to change their budget in order to come up with this. Now I understand that there is something in the Municipalities Act that says that after the 31st of March, you cannot increase taxes, is that correct?

MR. GULLAGE: That is correct.

MR. TOBIN: Well if they have to adjust their budget and they cannot increase taxes and they have nothing else to cut, what happens to the council in that case?

MR. GULLAGE: Well, they can increase rates other than taxes, water rates for example, they can cut expenses. Again, this is what I am telling you, we work with them to get them through the year and make those adjustments.

MR. TOBIN: Yes. I have met with them and they tell me they have nothing they can cut; they cannot raise taxes because they have taxed to their limit, they have accepted it, they did it all in good faith and it was after the fact that the Government made the decision to bring in these measures which cost them $50,000 and they cannot balance their budget; so, is there any way that your Government could put a grant in place to deal with that?

MR. GULLAGE: Well they knew of course in advance because they were notified before the deadline that these adjustments were coming.

MR. TOBIN: No, they were not, they were not.

MR. GULLAGE: Before the 1st of April they were, that is what I am told.

MR. TOBIN: Well that is not what I was told. When was the MC effected on the industrial waters? As a matter of fact, Mr. Minister, not only the industrial water supply, the Marystown Town Council as of last Thursday were not even notified of the changes in the electrical subsidy programme.

Last Wednesday, when I met with the Marystown Town Council, they had not been informed through letter or any other way that there were going to be changes to that electrical subsidy programme, the council told me that. I had information which I shared with them because some other councils had been notified of it and they had that information, but as of last Wednesday, the Marystown Town Council was not notified officially in any way by your Department, that they were put in place, so what is the answer in that case?

MR. GULLAGE: I do not know. If they were not notified that is unusual because my understanding is that all the communities knew about it. You mentioned water rates for example; I mean, they have the authority to increase that even now, if that is a problem, industrial water rates, they have the authority to increase those rates.

But I cannot isolate one community, I would have to go back and check if they were notified or not. I have been told that they were told in time to make the adjustments to their budgets and you know, in the water rates, they have the authority to make those changes themselves; it has no impact at all on taxes (inaudible).

MR. TOBIN: The information that I have is that they were not told before their budget was submitted.

MR. GULLAGE: Well, I can only say that I have been advised otherwise.

MR. TOBIN: Well, I have no reason to disbelieve what you are saying, so what you are saying is that Marystown Town Council was notified of the $35,000 in industrial water -

MR. GULLAGE: Unless somebody slipped up; I have been told that communities knew about this adjustment, knew that it was coming.

MR. TOBIN: I just want to get it straight that what you are saying is that Marystown Town Council was notified of the increases that would amount to $45,000 in their case as it relates to the industrial water supply before their budget was submitted to your Department for approval.

MR. GULLAGE: That has no impact on the budget per se in terms of being able to increase rates, because they can increase those rates anyway.

MR. TOBIN: No, I am talking about before their budget was submitted to you for approval.

MR. GULLAGE: Oh, in the first three months of the year you mean?

MR. TOBIN: yes.

MR. GULLAGE: Well that would not be an item in the budget; you can adjust those rates anytime.

MR. TOBIN: No. What I am asking you is: under the local Government Act, the Municipalities Act, the council has to submit their budget to you for approval. I have been told that after that process was completed by the Marystown Town Council in terms of completing their budget and submitting it to you for approval, they had not been notified up to that period in time of the additional $45,000 cost.

MR. GULLAGE: You can change the tax structure anyway by the 31st of March, per se; but these rates can be applied by the municipality after the budget (inaudible).

MR. TOBIN: Your are still not answering my question, Mr. Minister. I am asking you, were they or were they not, notified prior to the -

MR. GULLAGE: You are losing me. Do you want to try to answer that Art, because maybe, you could follow his line on the budget per se, but I do not know where you are coming from.

MR. COLBOURNE: A municipality can change its tax rates until the 31st of March, even if the budget is in effect, then it would send in a revised budget. With respect to the industrial water rates, municipalities were notified prior to the first of April, that effective the first of April, industrial water rates would be changed.

MR. TOBIN: When were they notify?

MR. COLBOURNE: They were notified in writing by the Department.

MR. TOBIN: I beg your pardon?

MR. COLBOURNE: They were notified in writing -

MR. TOBIN: When?

MR. COLBOURNE: - by the Department prior to the first of April.

MR. TOBIN: When did they have to have their budget in to you for approval?

MR. COLBOURNE: I beg your pardon?

MR. TOBIN: When did they have to have their budget into you for approval?

MR. COLBOURNE: Budget is due in December, but the budget can be changed -

MR. TOBIN: I know that.

MR. COLBOURNE: - and taxes can be changed until then and a revised budget can be put into effect if there is a major adjustment.

MR. TOBIN: Is it a common practise for Government to make these changes after the beginning of the calendar year?

MR. COLBOURNE: Well in this particular case it just happened that the Government's year was the first of April and the municipal one was January 1st.

MR. TOBIN: But isn't it a common practice for councils to be notified after a budget is submitted of these changes?

MR. COLBOURNE: It has happened before. I think somewhat similar to other adjustments which are made other than Government.

MR. TOBIN: So you are saying it is a common practice?

MR. COLBOURNE: No, I am not saying it is a common practice, but I would say that it has happened before.

MR. TOBIN: Would you say that it is poor timing on the part of the Department of Municipal Affairs?

MR. COLBOURNE: I would not comment on that one.

MR. TOBIN: Probably the Minister would care to comment on it if none of his officials will.

MR. GULLAGE: I will comment on it, sure. Nobody liked the timing of the fiscal restraints that we had to put in this year, and nobody could have planned it, I would suggest. So to say that we do not recognize the poor timing of it, I mean obviously we would have rather not make these adjustments in these budgets, but from time to time it happens. To suggest it has never happened, I mean I am sure adjustments have been made in that three month time frame with previous Governments. I cannot image that budgets were simply unaltered in previous years in history. I cannot imagine that to be the case. There had to be times when government for whatever reason, whether it be fiscal restraint or some other reason, made changes that caused changes in municipal budgets. You have to work and make those adjustments as you go along.

MR. TOBIN: Well then, can you tell me, Mr. Chairman -

MR. CHAIRMAN: Order, please!

I will allow you to ask that question, Mr. Tobin, then I would remind you that your time is up. When you have asked your question and the Minister has answered we will take a ten minute recess for coffee and we will meet back here again.

MR. TOBIN: Thank you very much. Okay, my question to the Minister is: is that adjustment in the industrial water supply included in this year's estimates, 1991?

MR. GULLAGE: Yes.

MR. TOBIN: It is included in that? Thank you.

MR. CHAIRMAN: We will recess for ten minutes. We will meet back here at approximately twenty minutes before the hour of 9:00 p.m.

Recess

MR. CHAIRMAN: Order, please!

We will continue with our meeting and I will turn it over for questioning to Mr. Ramsay.

MR. RAMSAY: I do not really have anything. If either of the Opposition Members would care to have my time for questioning they can have it.

MR. CHAIRMAN: Thank you, Mr. Ramsay. Mr. Aylward.

MR. R. AYLWARD: I have just a couple of quick questions. I remember before the forty days and forty nights that I spent in the Department, I was fasting the whole time, I loved every minute of it I must say. When I was in the Department there was always this fund there that was very convenient to help out emergency situations. I think it is a Special Assistance fund of $1.6 million, on 3.2.02, Special Assistance. Last year there was $1.5 million plus change spent on that. Can the Minister give us some idea of what types of assistance were given with that $1.5 million and to whom it might have been given?

MR. CHAIRMAN: For the benefit of the officials that is on page 242, subhead 3.2.02.

MR. R. AYLWARD: While they are looking for that the Minister might just make a comment -

AN HON. MEMBER: (Inaudible).

MR. R. AYLWARD: Okay, go ahead.

MR. GULLAGE: Well, it is a variety of things. Everything from emergency road repairs, cost of operation of a sewage treatment plant, general municipal purposes, engineering service for a bridge crossing of a water line, operating deficit, repairs to the water system, audit fees, general operating purposes, water line project. Almost everything you can name.

MR. R. AYLWARD: Could the Minister table a copy of that list tomorrow or the next day, if he would? Whenever he gets a chance to get a copy of it.

MR. GULLAGE: Yes, I do not think there is - we can table that, can't we?

AN HON. MEMBER: (Inaudible).

MR. GULLAGE: Yes.

MR. R. AYLWARD: The planning was just about started for some type of celebration for the anniversary of John Cabot's 500 th arrival here, planning has to be started now I believe for -

MR. GULLAGE: Yes, we have started.

MR. R. AYLWARD: And we have some money in this Budget to do some work on that, continue with it?

MR. GULLAGE: I am trying to recollect now. Are we budgeted for Cabot in our Budget?

MR. R. AYLWARD: I forget the name of the celebration.

SOME HON. MEMBERS: (Inaudible).

MR. GULLAGE: We have a small fund that is faced off against anniversaries per se, because we also have some others that we are dealing with too. But as to a specific allocation for that, I am not sure.

AN HON. MEMBER: (Inaudible).

MR. GULLAGE: Yes. I think as it sits right now we would probably have to find it under another subhead. We only have a small amount for travel and supplies.

MR. R. AYLWARD: The only concern I have with it, and I am sure the Minister is aware of this, is that there is also - I mean, everyone knows that Cape Breton or somewhere else claims that Cabot happened to land there and not in Newfoundland - there is some concern that that other area might plan the same type of celebration, or might take over this celebration, and we might be left out if we do not get ahead of the game.

I know that the Lord Mayor or someone was over here at one time several years ago. I just suggest to the Minister that it certainly would be very beneficial for us to get ahead of the game on it and continue our planning. Those are all the questions I have.

MR. GULLAGE: Just to answer that question a little more. I believe we are on top of it in the sense that we have an anniversaries' committee - one of our Deputy Ministers is faced off against that responsibility now, Bob Jenkins. So we have the internal planning well under way. We are in the process of setting up an external committee to run the anniversary, Province-wide. So that is in process. We have been talking to Bristol as well. That fear that you expressed has been expressed by others. I do not think that is a real problem, but obviously the further along and the more detail we get going and the more it is obvious that it is our anniversary the better it is. So I think you will see things pick up significantly now in the months ahead.

MR. R. AYLWARD: Mr. Chairman, I move that all subheads between subhead 1.1.01 -

MR. CHAIRMAN: I think Mr. Tobin has a question first, Mr. Aylward.

MR. TOBIN: Mr. Chairman, indeed I do have a question. I have a question for the Minister. First of all, will there be a capital works budget this year for water and sewer, roads, fire protection, for the local services (Inaudible)?

MR. GULLAGE: Will there be?

MR. TOBIN: Yes.

MR. GULLAGE: Well, assuming the Government wishes to proceed with the programme. I will certainly be making a recommendation for those four that you mentioned, those four areas of capital works, yes, and -

MR. TOBIN: Do you anticipate that it will be brought down and announced before the first of June?

MR. GULLAGE: Yes. Well, I qualify that, in the case of local service districts, assuming the budget is finalized. But regular capital works for the cities and towns, water and sewer and roads, I should have very soon.

MR. TOBIN: Do you know if there is anything there for me?

SOME HON. MEMBERS: (Inaudible).

MR. R. AYLWARD: (Inaudible) not after tonight there is not.

MR. GULLAGE: There was.

MR. CHAIRMAN: Mr. Aylward.

MR. R. AYLWARD: Just one more quick one, Mr. Minister. I forgot that Communications came under your Department also. On page 254, the page on Communications, under grants and subsidies, 7.1.01.10, there is $52,000. Can this money be used for (Inaudible) a small community like Blackhead out towards Cape Spear, who have been trying desperately to get the cable television extended out to their area. But obviously the cable company will not extend it because there is not enough revenue to cover the cost of construction to get it out there. Is it possible that this money could be used to help them pay part of that cost?

MR. GULLAGE: Presently we do not have a programme to cover that off, and I am advised we used to have a programme in that particular case. The grants and subsidies programme right now is just really covering the operation of some radio stations, weather stations and locations like that. We do not have any subsidy per se for cable. It used to be there and it is now eliminated.

MR. R. AYLWARD: Could you put back $20,000 for one year? I am through, sir.

On motion, subheads 1.1.01 through 7.1.01, carried.

On motion, Department of Municipal and Provincial Affairs, total heads, carried.

MR. CHAIRMAN: I announce that we have now approved the estimates for the Department of Municipal and Provincial Affairs, and at the previous meeting we approved the estimates of the Department responsible for Newfoundland and Labrador Housing Corporation. So we have now approved all of the estimates for the Departments under the responsibility of the hon. Eric Gullage.

I would like to thank the Minister and his officials for coming back for the second evening. I would like to thank Mr. Aylward who has been my Vice-Chairman for the last five meetings, and of course our Committee Members. I would particularly like to thank everybody for the manner in which the questions have been asked, and of course the manner in which the answers have been given as well. I would like to thank Elizabeth Murphy, the Clerk of our Committee -

MR. R. AYLWARD: Don't thank Tobin (Inaudible).

MR. CHAIRMAN: - our Page, Paula; Mr. John Oates, who has been manning the Hansard equipment; and I was about to thank the lady who was here from The Evening Telegram, Ms. Cullin, but I believe she has just left us.

Our Vice-Chairman says we should thank everybody except Mr. Tobin, but I will include a thank you to Mr. Tobin as well.

The Committee now stands adjourned.