November 20, 1992           HOUSE OF ASSEMBLY PROCEEDINGS           Vol. XLI  No. 68

The House met at 9:00 a.m.

MR. SPEAKER (Lush): Order, please!

Oral Questions

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

MR. SIMMS: Thank you, Mr. Speaker. I have some questions for the Minister of Education. His predecessor asked the Public Service Commission, I think it was, to use the committee involving Grant Chalker from the Public Service Commission, his deputy minister, Cyril McCormick, and Roger Pike, chairman of the college out in Grand Falls - Windsor - Central Community College - to screen, interview and recommend applicants for the position of president of the college.

The committee represented by the Commission, I guess, recommended three qualified and suitable candidates for that position. We know who they are. They now serve in very responsible positions. They were all rejected by the government, by the Cabinet. I'd like to ask the minister, first of all why did the government reject the Commission's recommendations? Secondly, can he tell me if the minister had any conversations or representations from his colleague, the Member for Windsor - Buchans, or his colleague, the Member for Exploits, on this question?

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

SOME HON. MEMBERS: (Inaudible)!

MR. DECKER: Mr. Speaker, as the hon. -

SOME HON. MEMBERS: (Inaudible).

MR. SPEAKER: Order, please!

MR. DECKER: As hon. members know, the presidents of colleges are positions which are not required to be filled by the Public Service. In this specific case the hon. member is quite right. Cabinet did indeed ask the Public Service Commission to make a recommendation to Cabinet, with the understanding that it was just simply that - a recommendation. The Public Service Commission did put a committee in place and did interview - I think it was, I don't know, eighteen, twenty people were interviewed. Twenty-something applications were received. At the end of the day three applications came into Cabinet and they were all reviewed, and Cabinet decided not to go with either one but to go with a broader search.

The specific question about political interference: categorically no, Mr. Speaker. That is preposterous, utter rubbish, nonsense. The hon. member should know that this administration above all others does not have political interference when we make appointments to any position, Mr. Speaker.

MR. SPEAKER: A supplementary, the hon. the Leader of the Opposition.

MR. SIMMS: I'm afraid the 1,600 people who turned out for the nominating meeting in St. Mary's - The Capes wouldn't agree with the hon. minister on his last comments. I didn't ask him about political interference. I didn't ask the minister about political interference, I asked him if he had any conversations on the issue with his colleagues the Minister of Forestry or the Minister of Employment and Labour Relations. That was the question I asked him.

AN HON. MEMBER: (Inaudible)!

MR. SIMMS: Yes it was! It was what I asked him.

MR. MATTHEWS: You be quiet.

MR. SIMMS: It was specifically what I asked him.

MR. SPEAKER: Order, please! Order, please!

I ask the hon. Leader -

MR. SIMMS: Now I understand the Minister of Finances's sensitivity and reason for his sensitivity these days, but I ask him not to interrupt now while I ask some questions of the Minister of Education.

MR. TOBIN: You were involved in it too!

MR. SIMMS: Mr. Speaker, I'll ask it again. If I didn't ask it right, I say to the Minister of Finance, let me ask the minister again. Did he have any conversations with his colleagues the Minister of Forestry or the Minister of Employment and Labour Relations on this particular question? Number one. Number two, let me ask him, on what grounds did the Cabinet determine that the candidates recommended by the Commission weren't suitable for the job?

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

MR. DECKER: Mr. Speaker, the answer is categorically no. There was no political interference in the decision, absolutely, categorically, no. Now, I consult with all my Cabinet colleagues, that is one of the advantages you have in being a member of Cabinet. As for tabling the minutes of Cabinet, Mr. Speaker, the hon. member knows I cannot do that. I cannot tell him why Cabinet does something and why Cabinet does not do something.

Mr. Speaker, maybe, if I were to do that, the hon. member might be prepared to tell us why they invested $23 million into Sprung. Certain things, because of the way the Cabinet systems works you cannot make public. The Cabinet made the decision and we issued the Minute of Council. Unfortunately, that is all I can say. Now maybe, if the hon. member will wait until I write my memoirs in the year 2050, whatever that might be, I might be able to address it then.

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

MR. SIMMS: Mr. Speaker, does the minister not think that the decision of the government to reject a recommendation of the Public Service Commission does not obligate the government to provide some accountability and give reasons for its decisions, is that what he is saying here today? Let me ask him this: Can he tell me categorically that these candidates who were recommended were not qualified and were not suitable or, did in fact, he or his colleagues receive certain criticisms from certain individuals who did not get interviews in that process, and is that the reason why he decided to reject the recommendations?

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

MR. DECKER: Mr. Speaker, the hon. member has to come to realize that we are living in the 1990s. It is no longer the old days of the 1980s when we had everything being done by political patronage. The hon. member has to start thinking in the modern age. Mr. Speaker, we are not saying that those three candidates were not qualified, all we are saying is, we are going to have a broader search. In the meantime, we have one of the teachers at the institution who is now formally appointed as acting president. While the acting president is there, we are taking however much time is necessary to make a broader search and at the end of the day, we will appoint a president for Central Newfoundland College, who will be able to, I am sure, deliver the best educational system possible to central Newfoundland. It is no reflection on the people who made the application, Mr. Speaker. Cabinet receives recommendations day in and day out, some of which are accepted, some of which are not. That is the way the Cabinet system works.

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

MR. SIMMS: Mr. Speaker, I am afraid the minister and his colleagues are not living in the 90s. We have seen too much evidence of where they are living in the 60s and practising 60s politics. Will the minister confirm to the House that the Chairman of the Board who served on that committee, Roger Pike, and another member of the board, Mr. Wayne Morris have both resigned and can he confirm that they resigned out of absolute frustration because of the disastrous way in which the minister has handled this whole issue?

Secondly, what was the cost of that particular committee's work? Can he tell the House the cost of the committee's work? And would he table a list of all expenses associated with the selection process?

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

MR. DECKER: Mr. Speaker, the first question, I have a letter from Roger Pike, who was the Chairperson. 'It is with regret that I submit to you my resignation as Chairman of the Board of Governors. I wish to thank you for the opportunity to serve; however, due to personal and business reasons, I find I am not able to...'


MR. DECKER: I will table it.

J. W. Morris, 'Please accept this letter as my resignation from the Board of Directors, Central Newfoundland College, effective (inaudible), due to personal reasons.'

Now I do not want to impute motives to those hon. gentlemen, those volunteers who so willingly gave of their time. The pressure of business was too much for one gentleman; personal reasons for the other. I will table this, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. DECKER: As for the cost of the interviews, the survey, that belongs to the Public Service Commission. I am not sure I have the liberty to do that, but I will take that question under advisement and if I am permitted to do it, I will certainly ask the Public Service Commission if we can table the cost, Mr. Speaker; but I can guarantee him there will be no $2,000 tips; there will be no $2,000 stretch limousines in the answer.

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

MR. SIMMS: I wonder can the minister tell us if there will be any $600 doorknobs associated with it?

Mr. Speaker, I would like to ask the minister: Is he aware of the following public statement made by the Chairman of the Board: 'There is no denying, and I would be less than truthful if I said that the handling of this latest incident did not give me concern and prompt me to reevaluate my role.' And after discussing the matter with his family and fellow board members, he felt he had no choice but to tender his resignation. Is he aware of that public statement, and doesn't he think that now shows frustration with the way the minister has handled this situation?

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

MR. DECKER: No, Mr. Speaker, I am not aware of that public statement; however, I just tabled two letters which outlined why the gentlemen resigned. I would now ask the hon. gentleman to table his public statement so I can see where it came from.

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

MR. SIMMS: Mr. Speaker, the minister has appointed a new committee, as I understand it now, to undertake the selection process - correct? I would like to ask him: Who are the members of that new committee?

Will the committee be responsible to the Public Service Commission, and how will this committee differ from the other committee? Why would Cabinet be any more obligated to accept this particular committee's recommendations?

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

MR. DECKER: Mr. Speaker, it is a long established tradition in this House that when you read from a document or when you wave a document in the air, you table it. I have asked the hon. member to table this public statement that he is waving in the air.

AN HON. MEMBER: Table it! Table it! Be a man, boy, table it.

MR. DECKER: It is obvious that it is probably a figment of someone's imagination, Mr. Speaker, and there is a great difference between a public statement and a figment of someone's imagination. Let's clear up any misunderstanding and ask the hon. gentleman to table his document.

AN HON. MEMBER: As we did with the letters.

MR. DECKER: What was the other part of his question?


MR. SPEAKER: Order, please! Order, please!

MR. DECKER: Mr. Speaker, it was a double-barrelled question. I will try to address the second barrel.

The committee which we have now put in place, Mr. Speaker: I personally have asked the board of the Central Newfoundland College to appoint a person to the new search committee which we are putting in place. Up to this moment, we have not received any names from the new search committee. I am planning to put a three-person search committee in place. I have asked the Central Newfoundland Board to give us one recommendation but, to date, they have not. We are having discussions back and forth.

I have not definitely made a decision as to who the other two people will be. I have several people in mind. I have had preliminary discussions with them, but the bottom line is the committee is not yet in place.

Now, Mr. Speaker, as I told the hon. gentleman earlier, we have appointed an acting president in Central Newfoundland, hence there is no need for any great rush to go now and find a new president. We have appointed an acting president.

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

MS. VERGE: Thank you, Mr. Speaker.

My questions are for the Minister of Social Services. The minister personally has been faulted for negative municipal affairs changes the government made when he was Minister of Municipal Affairs. In fact, it was the Premier and the whole Cabinet who were responsible. The new Minister of Municipal Affairs has acknowledged the mistakes and promised to take corrective action.

I would like to ask questions about social services mistakes made three years ago. Three years ago this fall the government made a serious mistake in social assistance policy by classifying maintenance and child support as non-allowable income. That was a mistake, number one, because it deprives single parents, mostly single mothers and their children, of up to $115 per month, and second, because it took away, it removed the incentive, for people to try to get court orders for child support and maintenance.


MS. VERGE: Questions: Will the new Minister of Social Services acknowledge that the government made a mistake three years ago in classifying maintenance and child support as non-allowable income? - and will he correct the mistake? Will this Minister of Social Services show that not only one minister in the Cabinet can be a hero in correcting earlier mistakes of the Administration?

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

AN HON. MEMBER: Ask for the Reader's Digest version.

MR. GULLAGE: I don't know, Mr. Speaker, if I get equal time or not.

AN HON. MEMBER: Take it, anyway.

MR. GULLAGE: Mr. Speaker, I am not sure what I should say about the question.

AN HON. MEMBER: (Inaudible).

MR. GULLAGE: Yes, I know what I would like to say.


MR. GULLAGE: I won't ask her to repeat it.

Mr. Speaker, government obviously makes policy and makes decisions, and ministers make recommendations, and ultimately a decision is made by government. This is one of those decisions, and until a change is made or until we see a need for change, the policy, as it sits right now and as it is in place, will continue to stand.

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

MS. VERGE: Thank you, Mr. Speaker. I say to the minister that he won't have equal time in this Legislature to me and some of my colleagues here.


MR. SPEAKER: Order, please! Order please!

Hon. members know that we are not supposed to debate answers. Hon. members also know that preambles to questions should be brief. I ask the hon. member to get into the question, please.

MS. VERGE: Thank you, Mr. Speaker. Would the Minister of Social Services explain his rationale for classifying maintenance and child support as non-allowable income?

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

MR. GULLAGE: Mr. Speaker, my rationale for doing it - I am not sure of the context of the question. I don't personally have a rationale for anything. Decisions are made -

SOME HON. MEMBERS: Hear, hear!

MR. GULLAGE: I don't think any minister in any government, Mr. Speaker, has the luxury of personal opinion and personal decisions. It is the decision of the government, made on the recommendation of a minister at the time, and that stands.

DR. KITCHEN: A good answer.

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

MS. VERGE: Thank you, Mr. Speaker. Yes, I think that will be the quote of the week. I will switch to another subject for the Minister of Social Services. Why did the Minister of Social Services refuse this September to provide a child care subsidy for single parents just starting a post-secondary education program, for first-year university and college students, while he did provide a child care subsidy for single parents who were in school last year? Why this discrimination? How does he expect single mothers on welfare to get off social assistance and become self-sufficient if he won't provide them with a child care subsidy to start their post-secondary education?

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

MR. GULLAGE: Mr. Speaker, my understanding is that no changes were made in the assistance to single mothers attending university or any post-secondary facility. We, in fact, continued all payments and assistance to these single mothers. Any changes that were made in the assistance were on the education side and had more to do with loans and assistance from education. No changes, to my knowledge, from information given to me by my officials, were made in the social assistance portion of their subsidy.

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

MS. VERGE: Thank you, Mr. Speaker.

Does the minister realize that this September, his department provided a child care subsidy as part of the social assistance allotment to single parents going to university and college who were there last year but denied a child care subsidy to single parents on social assistance trying to start a post-secondary education program? Does he realize that discrimination took place?

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

MR. GULLAGE: Mr. Speaker, I take the question as being identical to the first one and I can only answer the same way, that we did not make any changes in the amount of allowance and assistance to single mothers at the university.

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

MR. HARRIS: Thank you, Mr. Speaker.

My question is for the Minister of Tourism and Culture.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please! Order, please!

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

MR. HARRIS: It is easy to see that the Premier is away, Mr. Speaker. I know the Minister of Tourism and Culture has been waiting patiently for a question in the House, but I want to ask him what steps his department has been taking to ensure the preservation of an historic building with cultural heritage in St. John's East, Mr. Speaker? The King George V Institute is a valuable part of our cultural heritage in Newfoundland, having been the home of very many services throughout the years, both to seamen, fishermen and to the public. Mr. Speaker, we understand that this building is being abandoned by the government.

AN HON. MEMBER: (Inaudible).

MR. HARRIS: I don't want to hear from the Minister of Works, Services and Transportation. I want to hear from the Minister of Tourism and Culture. Can he tell us what steps he has taken to ensure that this building is preserved?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Minister of Tourism and Culture.

MR. ROBERTS: Quit while you are ahead, Jim.


Mr. Speaker, first, let me thank the Member for St. John's East for asking me my first question as Minister of Tourism and Culture. I have been waiting patiently for three weeks, but he is at least going to let me end the week.

SOME HON. MEMBERS: Hear, hear!

AN HON. MEMBER: Take it under advisement.

MR. WALSH: Mr. Speaker, anyone who knows me knows that I am forty-two years old and I have been waiting since I was fifteen for a question like this. I have been waiting twenty-seven years and my first reaction is to take it under advisement, but I won't.

To be a little serious, Mr. Speaker, it is Question Period -

MR. SPEAKER: I was wondering.

MR. WALSH: - and I don't want to take time from the members of the Opposition. Let me say that the officials in my department are having ongoing discussions with the Department of Works, Services and Transportation. Although we are cognizant of the fact that this building is an important part of the City of St. John's, we also realize that the Department of Works, Services and Transportation is responsible for the building, and that we are working with them to see if there is some means by which the building can be preserved.

If it gets to the point where we are talking about massive expenditures from our particular department, Tourism and Culture, we are not in a position to do that. But I am working with my colleague to see how we can go about preserving the building so that it can be there for future people and future generations to see.

SOME HON. MEMBERS: Hear, hear!

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

MR. HARRIS: Thank you, Mr. Speaker.

The minister will know that one of the problems with that building is that it has been neglected for the past ten or twelve years by the very department he is now seeking to work with to preserve it, so he will have to work extra hard.

I want to ask the minister a more general question about the preservation of historic buildings. We lost one in the last year in St. John's. One of the oldest examples of an Irish farmhouse in St. John's was lost. Does the minister have a plan to ensure that certain buildings in this Province will be protected from destruction? Does he have an overall plan, and can he tell us what plans he has to make sure that we do not have to deal with these historic resources on a case by case basis when it comes time to try to save them from the wrecking ball?

MR. SPEAKER: The hon. the Minister of Tourism and Culture.

MR. WALSH: Mr. Speaker, I understand the preamble in terms of what can the department and what can the government do, but our hands are somewhat tied in the sense that heritage zoning is a responsibility of the City of St. John's. If the City of St. John's were themselves looking to make a stand on this particular property, we would have to deal with it a little differently. But if the City of St. John's is more than willing to see the building disappear, then there is not a great deal that we can do in terms of designating that particular property. In the City of St. John's, heritage and heritage zoning of properties is their jurisdiction, and I don't feel that we should have the right to interfere with their jurisdiction.

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

MR. HARRIS: Mr. Speaker, does the minister not realize that there are ways that a central government can control and prevent the destruction of cultural heritage? It is done in England, it is done in other countries, and it certainly can be done here. It is not a zoning issue dealing with the City of St. John's.

Will the minister not look into ways that the central government, the Government of Newfoundland, can designate certain buildings as being historic resources and prevent them from being destroyed?

MR. SPEAKER: The hon. the Minister of Tourism and Culture.

MR. WALSH: Thank you, Mr. Speaker.

The Department of Tourism and Culture is very concerned about all of the historic properties within this Province, and we will do everything we can to make sure they are protected. As a matter of fact, even this past year, government were generous enough to give us additional funds in order to keep the historic sites open during the buffer end of the tourism season. We managed to keep the facilities open that much longer; and we are working vigorously on trying to upgrade the facilities we are in charge of. However, I don't believe that we are in a position to go in with a heavy hand and say to the City of St. John's what they can or cannot do. Maybe one of the Tory candidates down there, Mr. Stapleton, might be able to help us with this particular issue, or maybe he will sit on the sidelines and let it die.

SOME HON. MEMBERS: Hear, hear!

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

MR. SULLIVAN: Thank you, Mr. Speaker. I would like to direct a question to the Minister of Education.



Last Thursday, the Minister of Finance indicated in his Ministerial Statement that there would be a 1 per cent reduction in salary and 3 per cent in operation. Six days later, I asked the Minister of Education if any instructions had been given to post-secondary institutions in this Province, with reference to a reduction in expenditures, and he said he didn't know. I now ask him, eight days later, if the minister knows what is happening in his department? If he does, can he tell the House if they have been asked, first of all, to reduce expenditures, and, if so, by how much?

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

MR. DECKER: Well, you talk about righteous indignation! Here is a personification of righteous indignation if ever you saw it.

What the hon. member asked me six or seven days ago was not: was there any discussions with the colleges. What he asked me was: did any letters, and Hansard will verify it, did I send any letters out to the colleges or did the department send any letters?

Now, Mr. Speaker, I personally had not sent any letters and was not aware that the department had and I told the hon. member that I would take it under advisement. Well, in due course I will report, but the answer, I already checked it out - at the time that the hon. member asked the question, no letters had been sent from the Department of Education to any of the educational institutions asking them to make cutbacks in the vicinity of 1 per cent or 3 per cent. That is not to say, that is not to say, Mr. Speaker, that there are not ongoing discussions with the institutions saying: what if, Mr. Speaker, what if we asked you for $500,000, what would you do if that were the case?

Institutions are telling us: if you say we want $100,000 we would do this or that or this and we are saying: maybe you should do that but not this and maybe a part of that and a part of this. It is an ongoing process, Mr. Speaker, the details of which, the absolute, final details of which, unfortunately will not be made known until the hon. Minister of Finance gets up in this House and presents his financial statement in due course.

MR. SPEAKER: The hon. the Member for Ferryland, on a supplementary.

MR. SULLIVAN: Thank you, Mr. Speaker.

Hansard indicates that I asked the Minister of Education this question, and I quote Hansard -

AN HON. MEMBER: What date?

MR. SULLIVAN: The date is November 18, page 2407: "I would like to ask the Minister of Education if instructions have been given to school boards, community colleges and the University to reduce expenditures for the balance of this fiscal year.", and that is the fact.

I will ask him to check his facts first of all, and since that I now ask the minister, in light of the Ministerial Statement - not the Budget, is not the question I am asking on, I am asking in light of the financial statement, the Ministerial Statement, has the Minister of Education asked school boards, the University and other post-secondary institutions, to cut a certain number of dollars from their budget, or, is it his intention to act unilaterally and make those cuts?

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

MR. DECKER: Mr. Speaker, if we are going to have a re-enactment of Question Period of eight days ago, I will re-enact my answer.

Mr. Speaker, I cannot say specifically that they have or have not, however I would suggest that over the next little while the schools will indeed be asked to come to grips with the expenses problems in view of the fiscal statement, which my colleague, the Minister of Finance will address. So if we want to re-enact Question Period, let us go back three years ago when we were bombarding them about spending $23 million at Sprung. Let us re-enact that Question Period, Mr. Speaker.

MR. SPEAKER: The hon. the Member for Ferryland, on a supplementary.

MR. SULLIVAN: Thank you, Mr. Speaker.

The question and my concern is about the present. What is the minister going to do, how much has he asked these to cut if he has, or is the Department of Education exempt from the Ministerial Statement last Thursday. Could he tell this to the House, and furthermore, is it his intention to do more contract stripping with the 2 per cent savings clause and severance pay in the Teachers Collective Agreement? Has anything been done by his department to initiate those 1 per cent and 3 per cent cuts respectively? I have not received an answer, Mr. Speaker.

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

MR. DECKER: Mr. Speaker, I have to apologise about my remarks about Question Period and Sprung, because as hon. members know, they would not open the House of Assembly and we could not ask questions about Sprung so you won't find that mentioned. Now, Mr. Speaker -


MR. ROBERTS: What have I done, Mr. Speaker?

MR. SPEAKER: Order, please!

I ask the hon. minister to continue with his answer, please.

Order, please!

MR. DECKER: Mr. Speaker -

MR. ROBERTS: We are going to declare Len Simms a historic site.

MR. SPEAKER: Order, please!

That is all the Chair wants. The hon. the minister.

MR. DECKER: Thank you, Mr. Speaker. I do not know why they continue to ask questions if they won't listen for the answers, Mr. Speaker, it is beyond me. I am not used to questions being asked and people not waiting for the answers. I remember when we were over there, Mr. Speaker, we used to wait patiently for the answers which never came forward. It certainly is a different world.

MR. WALSH: Hansard will show never any interruptions.

MR. DECKER: Now, Nr. Speaker, what the hon. member is asking me to do is to tell him exactly what the hon. Minister of Finance is going to say within a week's time or two weeks whenever he makes his statement. I cannot pre-judge that. I can tell the hon. member and the people of this Province that in view of the fact that we have an operational deficit of $150 odd million, that we are looking at everywhere that the Province spends money. We are looking at the educational system, we are looking at the health system, we are looking at Department of Works, Services and Transportation, Development and Tourism, we are looking everywhere. We are working through a process and we are talking to the people out there, the foremen, the school principals, the superintendents, the school boards, the presidents of colleges. This administration is known for the way it consults with the people of this Province. We're asking: what if we took $100,000 there, what if we did that there?

It is participatory democracy. That's what we're going through. Hon. members are not used to it. They cannot relate to that kind of a system. We're asking our people, the people out there, to give us suggestions on what can be done. It is the kind of a government that I am proud and pleased to be a part off, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Question Period has expired.

Order, please!

On behalf of hon. members I'd like to welcome to the Speaker's Gallery today a former member of this House, Mr. Mel Woodward, a former minister and former member for Labrador North.

SOME HON. MEMBERS: Hear, hear!

Answers to Questions

For which Notice has been Given

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

MR. DECKER: Mr. Speaker, yesterday or the day before the hon. Member for Ferryland asked a question concerning income from CPP, which is considered as income for student loans. The hon. member made the accusation that we have changed the regulations so that as of now survivors' benefits are indeed counted as income for students who go for loans.

Now the hon. member is partially correct. He's like the first mate who wrote in the captain's log that the captain is sober today. It was the truth. But the other 364 days the captain was also sober. That wasn't written. So partial truths can be more deadly than outright lies.

CPP is a resource to students payable to students who are enroled full-time in secondary education. This comes under survivors' benefits to students who are full-time enroled in a post-secondary institution. If they are not enroled they do not get this money. It comes specifically for educational purposes.

Prior to September of 1992 for a dependent student who was living with his parents, this was not taken into account as income. For the independent student, on the other hand, this money was considered as income. So there was a dichotomy there. For the dependent it was not considered, for the independent it was.

The independent students brought this to the knowledge of the Student Aid division, complained about discrimination, said: we are being unfairly treated, it is not fair, this money is given for educational purposes, we have to declare it, the dependent student does not have to declare it. The student loans division quite rightly, recognising that this money would not be received - remember that - would not be received unless the student is in a post-secondary institution. Therefore the regulation was changed partially.

The hon. member, Mr. Speaker, made the claim that every other province in Canada -

MR. SULLIVAN: Read Hansard!

MR. DECKER: - does this differently. As a matter of fact he said he had phoned three provinces, and based on these three provinces he had come to the assumption that all provinces were doing it differently.

AN HON. MEMBER: (Inaudible) Hansard.

MR. DECKER: That's what the hon. member says, Mr. Speaker. I can't help if he wants to change his mind now. That's his business. But I know what he said yesterday. The facts are that our sister provinces in the Atlantic - PEI, Nova Scotia, New Brunswick - all are consistent with exactly the same thing as we are. That's the (Inaudible).

MR. FUREY: Fearmongering! Fearmongering!

SOME HON. MEMBERS: (Inaudible)!

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

SOME HON. MEMBERS: (Inaudible)!

MR. SPEAKER: Order, please! Order, please!

The hon. the Minister of Social Services.

MR. GULLAGE: Mr. Speaker, in answer to a question concerning caseloads in my department, and I guess specifically at the time the question dealt with caseloads in the child welfare area. So I'm pleased to table for the House statistics going back some nine years, really, showing the number of children who are in care and in their homes, and the number of children out of home.

For the information of the House, the difference is that in home service is defined as services provided to children and their families with the children living in their natural environment. This would include home visits, counselling, formal therapy and respite. Out of home service would be defined by the removal of the child from its natural family environment for placement in foster care where further service would be provided.

The House will note that the figures under children out of home have been declining. Children at home, those figures have been increasing, because we are, wherever possible, having children stay in their home environment where care can be provided in the family setting, rather than taking children out of home, and that is the preferable way of treating children who need our services and our counselling.

I have also provided for the House, the social assistance figures, cases and recipients, going back some nine years, showing the cases. A case can be anywhere from one person to five or six people, depending on the size of the family, so I have shown the cases and the recipients.

Now, Mr. Speaker, just to tell the House what we have done recently, and really the history of dealing with the problem of caseloads, as of November 19 there are 120 frontline staff working in the area of child welfare, and 157 frontline staff working in the area of social assistance, for a total of 277 frontline staff.

In March of 1990 the department hired 50 social workers to work specifically in the area of child welfare - were hired for that purpose. In addition, we have recently moved eight positions from Confederation Building to the front lines. Six of these were clerical, and two were made into financial assistance officers. We are also reallocating eight positions from the developmental group home closure, a home we recently closed, to district offices as four -

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

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

MR. HARRIS: Mr. Speaker, the minister is on Answers to Questions for which Notice has been Given. He was asked to table reports in the House, and he said he would. He is up now giving what is really a Ministerial Statement, and should have been given as such so there could have been an opportunity to respond to it.

If he has caseload analysis studies that were done in October to table, which he was asked, he should table them and not make what is really a Ministerial Statement.

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

MR. ROBERTS: To that point of order, Mr. Speaker, let me say simply that the minister took it as notice, as my hon. friend agrees. It is up to the minister how he delivers the answer. The hon. member has no right to determine the form in which the minister answers, any more than he has no right to determine the substance of the answer itself.

The hon. gentleman's right is the one he has exercised, to ask the question. The hon. minister is entitled to take it as notice and to answer it in an appropriate form, which is what he is doing, Sir.

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

MR. SPEAKER: The hon. the Member for Burin - Placentia West on a point of order.

MR. TOBIN: Mr. Speaker, the Government House Leader should stick to his storybook instead of getting up and making those kinds of statements.

MR. SPEAKER: Order, please!

Speak to the point of order, please.

MR. TOBIN: The fact is, Mr. Speaker, that under Answers to Questions for which Notice has been Given, is not supposed to go into a six minute speech by the minister involved.

There was a request for an answer. The request was, if the report would be tabled in this Legislature - if the minister would table the report?

MR. SPEAKER: Order, please!

MR. TOBIN: Unfortunately the minister has decided to make a speech. I ask Your Honour to call him to order, have him table the document that he is now reading, and get on with the business of the House.

MR. SPEAKER: Order, please!

As the Chair has said many times in the past, the precedent in this House with respect to Answers to Questions for which Notice has been Given has been that ministers will stand and give answers. Some of them have been very, very long, but this Chair has said that answers should be very, very brief. Ministers should not take advantage of the situation and prolong the answers, for the sake of expediting matters in the House. So I have asked ministers please - and I do believe that the minister was becoming rather lengthy. He has documents to table, and custom has been to just give a précis, a few remarks about the tabling, and then proceed to do so.

Members should remember that Answers to Questions generally follow the same rules as Question Period, and a minister or anyone else should not stay up for unlimited time to make long speeches.

I ask the minister, please, to clue up.

MR. GULLAGE: Mr. Speaker, obviously they do not want the answers, and they do not want the details.

MR. SPEAKER: I ask the minister, please, to proceed with the answer.

MR. GULLAGE: Mr. Speaker, I will sum up in about one minute, I would say.

To continue, we are reallocating eight positions from a developmental group home closure, to the district offices. Four of those are behavioral management specialists, three child management specialists and one social worker. We have also moved five staff, three social workers, from our regional office, to help support the district offices in the St. John's area. The total, Mr. Speaker, is twenty-one positions that we have moved to the front lines, nineteen of which went to St. John's. As I have said in the House previously, the three St. John's offices have the most serious caseloads where they are up some 100 per cent over the last three years. Because of that, the immediate changes we have made have been focusing on those offices.

I might say, in a final comment to the House, Mr. Speaker, that the realignment of our district and regional offices throughout the Province, all fifty-two district offices and five regional offices, that realignment is ongoing and continuing. We will continue to move people from positions other than the district offices, other than the front lines. We will continue to move people into the district offices to assist our financial assistance officers and our social workers with the caseloads they have to deal with.

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

MR. SPEAKER: Order, please!

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

MR. HARRIS: I take it that perhaps the minister is finished now. I was going to raise the same point of order that I raised before. The minister was not listening to the orders of Your Honour in cluing up his statement and tabling any reports if he had them.

MR. SPEAKER: Order, please!

Orders of the Day

MR. ROBERTS: Mr. Speaker, may we resume, I guess, the conclusion of the Second Reading debate on Bill 48, which is still Order No. 20, Sir.

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

MR. SPEAKER: The hon. the Member for Burin - Placentia West, on a point of order.

MR. TOBIN: Mr. Speaker, I am wondering if the Minister of Social Services is going to table the report.


MR. TOBIN: Okay.

MR. SPEAKER: There is no point of order.

The hon. the Minister of Employment and Labour Relations.

MR. GRIMES: Thank you, Mr. Speaker.

As I adjourned the debate yesterday, in looking at moving second reading of this bill, Bill 48, "An Act To Amend The Workers' Compensation Act," I had dealt briefly with the issue of the number of people working in the Province - that point that had been raised - now versus a couple of years ago. I had dealt with the issue of the annuity and the changes that are spelled out in this piece of legislation and how that will affect the people as of January 1. There were some five or six other points that I had made note of in the representations made by hon. members during their speeches both on the second reading and in the various amendments that were proposed, one out of order and one that was debated for some time. I feel, Mr. Speaker, that I should take a little time this morning to address three or four of these issues before I do move second reading of the bill.

One of the other issues raised yesterday by the hon. Member for Menihek, that he asked for some further clarification of, was the rationale as to why we felt it was important to deal with the issue of top ups. I think all hon. members have expressed an interest in that on occasion. The point has been raised by an number of speakers that the top up itself, the provision of top up, is not a direct cost to the commission and that the motivation for many of these changes was to try to rescue the commission from the precipice of bankruptcy. If that was the case, why would we deal with an issue like top up which is a cost to the employer, not to the monies of the commission itself?

To answer that question and give the rationale one more time, because I did go through that briefly in my introduction, Mr. Speaker, we have to go back again to the establishment of an injury fund in workers' compensation, the basis on which it was put in place and how it has now changed, and the fact that these changes are needed to bring it back to what it was intended to do.

A couple of things did happen. I mentioned that in the early 1950s we had workers' compensation established in our Province and it has been here ever since. It was not until the 1970s that, in collective agreements, there started to appear certain provisions that would say: while I receive a certain benefit to compensate for my injury from the commission, because certain employee groups had gone to the bargaining table and could not get the levels of compensation for salary and so on from government and other employers that they sought, they were successful in putting in place top-up provisions whereby the employer would say: We can't give a raise to your total work force, but for those who are unfortunately injured and are at a certain level of benefit, while injured we will pay the difference to bring that up to the amount they would have earned if they were injured.

There was one very serious oversight in that, particularly when it got into the mid-eighties, where this became a prevalent feature, after the change from the loss of limb type of policy and philosophy to a wage replacement, an earnings loss system which has been in place now for seven years.

The thought at the time, when it was moved from 75 per cent of gross to 90 per cent of net as a salary wage replacement, an earnings loss system, the reason that the 90 per cent figure was chosen, was because it was felt and agreed by everybody involved that that was the equivalent of no loss to an injured worker. Ninety per cent of net. It was recognised by everybody that that was as much benefit to them as 100 per cent when they were working. Because while they had sustained an unfortunate injury they were now at home recovering or undergoing medical treatment and they didn't have the ordinary expenses associated with working, with employment.

Everybody understands that concept. It's understood now, it was fully understood at that time, that there are certain expenses related to employment. As a matter of fact it was so well understood in the country and in the Province that it was eligible for an income tax deduction up to about three years ago. That you were allowed to deduct a certain amount of money because everybody recognised you had expenses just to get back and forth to work. You had to pay your transportation, you probably had to buy lunches. You might have had to buy uniforms or clothes and those types of things. If you were home injured you didn't incur those expenses. So that's why the 90 per cent figure was chosen.

This is the first time it's really been reviewed since then. So everybody in this compensation system which is an insurance system, trying to make sure that an injured worker is not disadvantaged, agreed that a 90 per cent level was no disadvantage. That at 90 per cent you were losing nothing. You were just as well off as if you were working and getting 100 per cent. So that's why the level was established as it was.

We checked as well with the people who were bargaining at the time. They were saying: this was not a preferred thing that the people even came in looking for, was this top up. Because the representatives of the workers had agreed that 90 per cent was no loss. By being home you had saved probably 10 per cent or so anyway, or that your expenses were reduced, and financially you were just as well off as if you were working. There was always the consideration that with the tax reimbursement you could get some money back later on. You'd have to wait until you filed a tax claim. You might actually in that first few weeks or months of an injury, after you claimed your tax, even access more money than if you were working. But that's only true in the first few months, and that's what reflected in our Bill as well.

Because the bargainers could not get the level of increases that they wanted one of the things that was added on in these last-minute settlements was to say: we can't give you 7 per cent, we might be able to give you 4 percent - because those were the kinds of increases that were going on at the time - but what we'll do, because it'll make it easier for you to sell it to your membership when you go back, is we'll top up these injured people. We'll give them another 10 per cent. Because the employers were looking at it and saying: it's very little cost to us. We have a small percentage of our workers injured. That's not going to break the bank for me as an employer.

What it did, and what people didn't recognise, is that it destroyed the whole insurance concept behind workers' compensation. Because now you put an irritant into the system that destroyed one of the principles on which it was built. I put that in context with one of the others. We've also asked the Commission - it's not in this Bill - but we've also asked the Commission to do a study of entitlement. What are the basic definitions under which you can be declared compensable anyway? Because that definition has broadened very greatly since the 'fifties, and it has added great expense to the system. This also has put in place a wrinkle, Mr. Speaker, whereby injured workers in any number of categories, at all different salary and wage levels, could in fact be home with a 90 per cent benefit from Workers' Compensation, a top up from their employer, and a tax rebate, in receipt of monies that could equate as high as 126 per cent of what they were receiving if they were working. Nobody ever envisaged that as a possibility.

The other point as well relating to that, Mr. Speaker, at the time, was that it all happened at the point in history when the ceiling for compensation was being raised from a maximum of $21,000 back around the same time of the Ocean Ranger disaster, to a ceiling of $45,500. At a point in time in history had this Province with the highest compensable level in the country, so a number of complications entered the system that destroyed some of the basic underpinnings and basic principles under which the system was established in the first place, and people now recognize clearly, that with a benefit received from compensation to compensate for your injury and with a top up that the whole notion that a person would not be disadvantaged, has gotten destroyed and twisted to the point that at least in the early stages the person clearly can be advantaged.

The other thing that people do not like to talk about a lot but was clear in the whole system of any insurance policy and this is what workers' compensation is, it is a broadly based protection insurance policy to provide a benefit for injured workers, to compensate them for lost salary and wages. In any of these systems, in normal everyday type of insurance principles, the highest types of levels that you can usually purchase are in the range of 65 to 70 to maybe a maximum of 75 per cent, and everybody understands that you cannot get any more than that, and if you get money from other sources, they are deducted and clawed back. It is a normal feature of insurance policies, and that was always intended to be a normal feature of the workers' compensation system and the top up system destroyed that completely.

There is always in these as well, indicated that while people should not be at a disadvantage, there certainly should be no disincentive for them to return to work, and it has been clear that if somebody can be in a position where they can access more money while injured than while working, that can only be described as a disincentive to return to work and the whole notion that the top up has to be eliminated is based on that type of rationale.

We want to bring this system back to what it was designed to be in the early 50s, so that it will provide basic, fundamental compensation at a level that will not unduly disadvantage the injured worker for the foreseeable future, rather than have a system that is about to collapse because people have put other items tagged on to the system that have destroyed the basic principles on which it was established and make the system now almost totally unrecognizable from what it was intended to be and almost totally unable to continue functioning and almost ready for collapse.

One other item as well, Mr. Speaker, that I did want to deal with for the record: The hon. Member for Humber East in her representation and her comments on the Bill, spent a fair bit of time dealing with the case of injured nurses and made a couple of comments that I would like to deal with for a couple of minutes before I move second reading.

One comment that I did not challenge at the time but I felt I must at this point in time because the record needs to be clear. One comment that the hon. Member for Humber East presented to the House as if it was fact, is that the number of injuries in the health care sector and for nurses in particular have skyrocketed, have absolutely skyrocketed and she said that as if it were true, and presented it as if this was an unquestionable fact.

I want to point out, Mr. Speaker, for the record, that the latest statistics on lost time accidents and the comparisons for the last three years indicate this; and this is in the area where we have heard from the health care sector and from nurses in particular, their difficulties are with sprains and strains, that is the most common type of injury. With sprains and strains in this calendar year up to the latest statistics recorded to the end of July, for the first seven months, 2,661 injuries reported. For the same seven-month period last year, 1991, 3,470; it is reduced by over 800 in one year. The previous year, 1990, 3,588 a reduction of a further 100, so rather than being on the rise and being rampant and everybody being out there injured and falling down willy-nilly every time they go to work as you would think was true, from the representation from the hon. member opposite, the exact reverse and opposite of that is true.

We have had in place a Back Injury Prevention Program targeted at the health care sector in the hospitals. It is working. They have been paying particular attention to strains and sprains with people attended in the health care system, particularly nurses. The numbers are steadily and surely declining because everybody has recognized it as a problem area. In the three years now, since 1990, it has gone from 3,588 down to 3,470 and further declined this year down to 2,661, the exact opposite of what the hon. member opposite would have everybody believe. If the record wasn't corrected, then Hansard, as the record of this House, would have everybody believe that the number of injuries are going through the ceiling. They are not going through the ceiling, Mr. Speaker. There are special programs in place to deal with sprains and strains, particularly in the health care sector, and there have been dramatic decreases in each of the last couple of years.

Ever since 1990 when the review was first done and it was brought to our attention, the Back Injury Prevention Program has been in place. It didn't need to wait for a bill and legislation. We enacted it immediately. It is in place, it is working, and the numbers verify that, completely opposite to what the hon. member would have you believe.

The same types of things are true when you look at the other injuries recorded, to arm, wrist, hand, fingers, thumb and upper extremities. In every category the comparisons over the last three years, in injuries that are very common in the health care sector, have shown a steady decline because people in the health care sector had it pointed out to them two-and-a-half years ago, in the review, that there was a problem. They focused on it and everybody paid attention to it. Management and the workers and unions together decided they would address it, and have done a very good job of bringing the thing down on an increasing basis. Their goal objective is to look for further decreases in the years to come.

One other item, Mr. Speaker, that I will deal with before I move second reading - and other individual ones we can look at in committee - the Opposition critic, the hon. Member for Fogo, indicated that I had given some impression in my opening remarks that this was a new phenomenon and the experience of the last two years was what was really causing this. He obviously totally misunderstood what I had indicated. What happened in the last two years or the last three years was that the board of the commission disclosed the real state of the finances of the commission, rather than omitting it from financial statements. In fact, for the last decade the commission has been in a position where they have not been able to put enough money into the investment fund to pay for future costs of injuries that have already occurred. The unfunded liability has been growing regularly for a decade. It is only because the board that was put in place by this administration exposed that to the whole world, that we became aware of it, generally, as politicians and as the public of the Province.

He also made the point, Mr. Speaker, that we had done our calculations based on an average income of $25,000 and that we were ignoring and didn't understand the impact on lower incomes. If the hon. member had looked at the statement that was released on July 2, the exact opposite of that again was true, which I will point out, just for the record, before I move second reading, Mr. Speaker. The assessments that were done by the actuaries on our behalf indicated that with all of the assumptions at all wage and earnings levels, with the tax implications taken into account, regardless of the level of earnings from minimum wage up to anybody at the senior, executive levels in the Province, our system puts in place a new benefit structure that, with tax benefits taken into consideration, will make sure that nobody receives any less than 81 per cent of what they would have been receiving if they worked.

So it is the fairest system in the world because it doesn't matter if you are making minimum wage or the highest salary in the Province, if you access the compensation system you will be maintained at what is the equivalent of roughly an 80 per cent benefit level which is what the actuaries have indicated to us is sustainable for the long term.

In moving second reading, Mr. Speaker, I point out that the changes that are here are clearly designed and will go a long way, and are recognized to go a long way, toward making sure that we have a viable, sustainable, compensation system, to make sure that injured workers in the Province are not disadvantaged and not left without benefit in the years to come.

So it is a pleasure for me, at this point, to move second reading of the bill. Thank you.

On motion, a bill, "An Act To Amend The Workers' Compensation Act," read a second time, ordered referred to a Committee of the Whole House on tomorrow. (Bill No. 48).

MR. ROBERTS: Mr. Speaker, we will proceed with Order 7, Bill No. 20. I had hoped to do Order 9, Bill No. 30, but the Minister of Municipal and Provincial Affairs is absent for a moment or two. Maybe we can pick up. I am not sure how long we will need to debate that. That is the Waste Material Disposal Act.

AN HON. MEMBER: (Inaudible) done.

MR. ROBERTS: No, it has not been finished.

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: I say to my friend from Harbour Main, we began the debate but we had not concluded the debate. There may be other hon. members who wish to speak.

MR. SPEAKER: Bill No. 20.

The hon. the Member for Kilbride.

MR. R. AYLWARD: Thank you very much, Mr. Speaker.

The Waste Disposal Act - I had better check with the Table to make sure I did not speak on this. I am not sure.

MR. MATTHEWS: No, you did not speak.

MR. DOYLE: I spoke on it, and Jack spoke on it.

MR. R. AYLWARD: I will keep going anyway. If I did speak, I will withdraw everything I say again anyway.

Mr. Speaker, I just want to have a few words. I was not expecting this legislation so quickly today, because the minister is certainly on public business, I am sure. I still have seven minutes left? I thought I had a few words on this before.

AN HON. MEMBER: (Inaudible).

MR. R. AYLWARD: No, I did not know then, but I am sure that I had a few comments on our dump in Long Harbour. No doubt that was the basis of my comments. If I had my own copy of the act, I guess there would be notes on it.

Mr. Speaker, I am not ducking out here. I am just trying to find my act.

I want to have a few words on this act here.

AN HON. MEMBER: What are you doing with my twenty?

MR. R. AYLWARD: I have yours, but I need mine for my own notes. It is gone. I have a copy of it, but it is not my copy.

Mr. Speaker, I just want to have a few words on this act, just to go over and sum up what I did say before. I remember speaking to the minister, and noting to her that this act, although it will raise fines from $2,000 to $500,000 - the fines are not the problem in this Province. The problem in this Province in enforcing the regulations that we already have, such as regulations for Come By Chance.

I heard this year, and it is too bad the Member for Bellevue is not here because I would like to know what the Member for Bellevue feels about this. I heard a Mayor of either Come By Chance or Sunnyside this summer -

MR. DOYLE: Sunnyside.

MR. R. AYLWARD: The Mayor of Sunnyside this summer, was very concerned about the people in his district becoming sick. There seemed to be quite a few extra illnesses in that area this summer, so he was wondering about the emissions from the Come By Chance oil refinery. 'I wonder could this be causing it?' is what the gentleman said on the radio. 'Is this what is causing the extra sickness in Sunnyside this year - the emissions?' So what he did was try to get in touch with our Department of Environment and Lands, and ask the department what checks they are doing on the emissions in Come By Chance. 'Can they tell me,' is what the gentleman said, 'if the emissions coming from Come By Chance are at acceptable levels and will the Minister of Environment and Lands have those emissions checked, or is the minister having them checked periodically?'

The answer he got back from our Minister of Environment in Newfoundland, the Department that is - I can't read that yet till I sit down, Mr. Speaker. Our Minister of Environment who should be looking after the environment and checking these emissions, said: everything is alright at Come By Chance, and do you know how I know?


MR. R. AYLWARD: Because the company is doing the checks and they told me that it's okay.

AN HON. MEMBER: (Inaudible) strawberry fields.

MR. R. AYLWARD: Now that is actually ridiculous, Mr. Speaker. There were no emissions on the strawberry fields because they're too far away. Had there been I'd have been quite concerned. Because people do grow food in the Come By Chance area. There are small gardens in the Come By Chance area. There's no way to know what affect the emissions have, if they are above acceptable levels. But we don't know for sure. Because the Minister of Environment said that things are okay because the company told her so. What were they going to tell her? What was the company at Come By Chance - which was in deep trouble financially at the time, they couldn't pay their employees their cheques a couple of times, they had to delay paying their employees. Our Minister of Environment for Newfoundland said: everything is okay in Come By Chance because the company told me so.

Yes, there is a song that says: I hope there is a chance in Come By Chance. But, Mr. Speaker, with our Minister of Environment it should mean there will be no chance in Come By Chance.

I would say from the financial difficulties that the company did have, and from the discussions I had with some of the people working out there, they said they were sitting on a time bomb. There was no money going into maintenance at the time, zero money going into maintenance. There were difficulties out there. They were trying to keep things patched up and get as much put through as they could so they could get some cash turnover. I would say that the emissions coming from Come By Chance last summer were probably well beyond the standards set.

We'll never know, because our Minister of Environment -

MR. SPEAKER: Order, please! Order, please!

The Chair reluctantly interrupts at this point in time. In the past the Chair has indicated to members the undesirability of meetings within the House. We have several meetings going on within the House. The noise is getting intolerably high. I would ask hon. members please in the future to conduct their meetings outside the House. Otherwise this is going to lower the decorum here in the House. I find it difficult hearing the hon. member, and he must be finding it difficult to speak. So if hon. members would do everybody the courtesy. If we're having meetings, let's have them outside.

Another procedure that we often do in the House is if you want to carry on a low conversation with a member is to slip into the seat where the member is and we don't nearly have to talk as high as we do when we're standing and conducting a meeting from three or four feet away.

I'd ask hon. members to cooperate, please.

The hon. the Member for Kilbride.

MR. R. AYLWARD: Thank you very much, Mr. Speaker. It could also be that nobody is interested in what I'm saying too, that's why the noise level, and that's probably the reason. I appreciate it, because if people opposite there are interested or not, it is important to know what happened this year in the Come By Chance area.

On the other side of the enforcement issue, we had an issue in the Goulds, in my district there, a couple of years ago. Where a construction company went in and changed the river because it was going through a subdivision. A good friend of mine actually and a very hard worker, a good employer in this Province, who improved a flood plain area in the Goulds. He went to federal fisheries and got his permits, he went to the City Council at the time and got his permits, he asked the Environment to come in and inspect it, but they couldn't get there. They wouldn't come in and inspect it because they were too busy. So he did the work anyway.

He improved that area. If fish habitat is the problem there will be more fish in that river now because there's less silt going to get into the river because of the flooding of the general area. It will be better for the fish of the area. More importantly in my mind, much more importantly, it's better for the people who live in the area whose houses and properties are not being flooded. Yet, we have that person fined in court because he improved the river in the Goulds in that subdivision, and we have Come By Chance not even being checked.

Now, there is something wrong with the system in this Province, something drastically wrong, when a small contractor can make an improvement in an area that the people of the area, the town council of the area, and federal Fisheries agreed with, yet our Department of Environment laid charges and our Department of Justice prosecuted, and the gentleman was fined $1,500.

Now, if that happened today, I wonder would his fine be half-a-million dollars? Would they want to put him out of business for improving the area? Yet, we have a company like that in Come By Chance - that is the only example I know of right now. But what is even more frightening is that we are, quite probably, if this government gets its way, going to have in Long Harbour a dump for importing garbage from other parts of the world. And the company running that dump, responsible for bringing in that waste material and having it incinerated in this Province, will be checking their own emissions. They will be checking the ash that comes out of it and the disposal of the ash, according to what is happening in Come By Chance. Because they are a big company and, for whatever reason I don't know, the Department of Environment will let them go, the same as they do in Come By Chance.

Now, I don't know what is going to come out of that incinerator. I don't know what will go into that incinerator, which is the most important thing, I guess.

MR. SPEAKER: Order, please!

The hon. member's time has elapsed.


MR. MATTHEWS: By leave to finish?

MR. SPEAKER: The hon. member has leave.

MR. R. AYLWARD: Just a couple of minutes, Mr. Speaker. I just want to make the comparison between what is happening in this Province with the larger companies, Come By Chance, in particular, the potential for a dump in Long Harbour and what is happening to small contractors who are being hassled quite a bit for changing drains or flood areas, while the large companies that are creating very serious problems are not being dealt with - and, Mr. Speaker, that includes Newfoundland Hydro and the facility at Holyrood. Thank you very much.

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

MR. ROBERTS: Mr. Speaker, I understand, no other members wish to speak. The minister is in Gander. She is on Her Majesty's business, as one might expect. She is attending the official opening of the Women in Successful Employment program.

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: The hon. gentleman from Fogo, I would think, would be an object lesson at the official opening of a program for women in successful employment - but, in any event, that is where the minister is, attending her official duties. So, I know the House will understand why she is not here.

I shall say, simply, in closing the debate on her behalf, Sir, that I will make sure the Hansard record of my hon. friend from Kilbride's eloquent remarks are - once he found his notes they were really quite eloquent; a bit of a delay getting under way, but once he clicked in, we got some points that need to be addressed. I will make sure the minister is aware of them, Mr. Speaker, and ask that she address them in the Committee stage, where the debate, of course, can carry on in due course.

I move second reading of the bill, Sir.

On motion, a bill, "An Act To Amend The Waste Material Disposal Act," read a second time, ordered referred to a Committee of the Whole House on tomorrow. (Bill No. 20)

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

MR. ROBERTS: Mr. Speaker, my friend, the Minister of Municipal and Provincial Affairs has resumed his seat and unfastened his seat belt, so perhaps we could call Order No. 9, Bill No. 30, "An Act To Amend The Municipal Grants Act."

Motion, second reading of a bill, "An Act To Amend The Municipal Grants Act". (Bill No. 30)

MR. SPEAKER: The hon. the Minister of Municipal and Provincial Affairs.

SOME HON. MEMBERS: Hear, hear!

MR. HOGAN: Mr. Speaker, with the tolerance of my colleagues, I will be referring to briefing notes because of the formulas and everything that we have to refer to in this. I have already discussed with the critic opposite that I will supply him with a copy of the briefing notes, as has already been discussed with the member opposite.

MR. SPEAKER: The hon. the minister.

MR. HOGAN: Thank you, Mr. Speaker.

In recent times, particularly here in this House and in the press, we have heard many an erroneous statement concerning the government's municipal grants and subsidy systems. For the benefit of all members I would like to provide the House with information that would, I feel, clear up any misunderstanding about the program - what it is, why it was introduced, and what it is designed to achieve.

In 1991, government introduced a new municipal grants and subsidy program which I think was one of the better undertakings of this government in dealing with the municipalities, in that it was designed to attack two problems - municipal operating grants, and water and sewer subsidies. In so doing, the thrust of the undertaking was to provide the smaller municipalities with more benefits, I guess is the best way to describe it, than the larger municipalities. Those who had more resources would have to spread the wealth and assist those with lesser resources.

At that time I think it was clearly stated by the minister, funds payable for operating grants under the new system would be significantly less than the total paid under the old system. To help alleviate any hardships these reductions would impose on certain municipalities, we took the position to phase in the new system over a three year period. This phase in mechanism is designed to alleviate any adverse impact on the municipalities.

At the time of the introduction, we strongly emphasized that any municipality which received an annual reduction of greater than 10 per cent could apply to government for special consideration, and that we would, where they demonstrated the need, in some way alleviate the burden, either through spreading out the payback or the discount, or in providing an outright grant.

During this three year period the total grants are being reduced from the original $48 million, paid in 1990, to $46 million in 1991, $44 million in 1992, and $41 million in 1993. For example, if a council received $100,000 in 1990, and was otherwise due to receive $70,000 in 1993, under the new system, the phase in grants would have been $90,000 in 1991, $80,000 in 1992, and $70,000 in 1993.

We went to great lengths to explain at the time that this would result in increases in some grants for some councils, and decreases for others, over the 1990 amounts. Councils were advised that these additional reductions in 1992 and 1993, were important to keep in mind in preparing annual budgets for these years.

As indicated to my colleague from Fogo yesterday when he asked that question, this is what I am advising councils to do now - notwithstanding any anticipated changes which might come because of new restraints or new introductions. The councils can only operate on the information that they have now, and if they do so, I can assure you that this government, this side of the House, will take that into understanding, as they did in the introduction of the original program.

It is only trying to deal with these municipalities in fairness, and taking into consideration the burdens which are placed on them. They have never yet been turned away, I do not think, by this government or even by our predecessors, although they were treated very badly by them.

The current difficulties experienced by councils regarding adjustments to municipal grants part way through their financial year was unavoidable, due to necessary changes in two major factors for determining grant entitlement - namely the number of households, and local revenue generated in the prior financial year.

This adjustment, Mr. Speaker, has to be carried out in the current year and was always there. However, because of the particular formulas that are used in the new system, and as indicated, total amount of the grants to be paid is capped. Further, not only are they capped but the total level of grants are being reduced over the three year period from $48 million and some odd dollars to $41 million in 1993. The total impact on municipalities in 1992 as a result of these adjustments resulted in 123 municipalities receiving increases totalling $1.5 million and 171 municipalities receiving reductions totalling $1.2 million. I'll have more explicit figures and detailed figures for the member opposite when he gets a copy of the briefing notes.

To alleviate any hardships experienced by municipalities, as I said before, as a result of the implementation of this system government has provided in this budgetary year an additional $700,000 in operating grant funding. This initiative, taken by my predecessor, the hon. the Minister of Social Services now, is designed especially to accomplish four main objectives.

Number one: to allow government to properly control the amount of grant funding paid to municipalities in any particular year. Under the present system the program is reactive and it does not allow government to pre-determine the amount of funding it will forward to allocate for municipal purposes. The new formula starts from a base sum of dollars which can be approved in total by government and then is allocated according to a set formula to the municipalities.

The second part was to allow government to redistribute fund granting and the payments on the debt servicing for water and sewer projects on a more equitable basis. The existing system was most inequitable in this regard, and monies paid through the grant structure were paid on a formula basis, having no regard for equalization or need. Payment on debt servicing was based on repayment according to the council's fixed revenue, having no regard for the size of the debt itself or the ability of the town to pay its share of that burden.

The third reason was to ensure that all residents of incorporated communities make a fair and reasonable contribution toward the cost of their municipal services, and to encourage fiscal responsibility throughout our municipalities.

The new system, for the sake of being accused of repetition, but it needs to be gone through so that people can understand it better, has four main components. There is the equalization component, determined as follows. Municipalities which impose property tax: this component will be paid to councils which have lower than average property values. For example, if an average property value in a municipality is $30,000, and the average for the Province is $50,000, this means that property values in that municipality are 60 per cent of the provincial average. It is therefore short of the provincial average by 40 per cent. The council then is given a grant of 40 per cent of its property tax revenue to help compensate for the lower taxing capacity. Bringing it up. For municipalities which do impose the property tax this component will be paid at the rate of forty dollars for each household.

A local revenue incentive component is also there, payable as a certain amount for each household, based on local revenues per household in the municipality. It's calculated as follows. From zero to fifty local revenues, there's zero grant. Nothing at all. From 251 to 500 local revenues, there's a 15 per cent grant per household. From 500 on to 750 there's a 25 per cent; 750 to 1,000, there's a 40 per cent; and maximum grant per household is $200. Again using an example, Mr. Speaker, if a council has local revenues of $150,000 and 170 households, the average revenue per household is $882. Council will receive zero dollars in a grant for the first $250, fifteen for the next $250, and so on, as I've stated. In the end this would be a grant of $26,010 at a rate of 170 times $153.

Local revenues then are defined as the total amount of revenues derived from property tax, water and sewer tax, poll tax, business tax, grants in lieu of tax and tax grants. A household component which is calculated at the rate of $85 for each household in the municipality. A household means and is defined as a separate set of living quarters with private entrance either from outside or from a common hall, lobby, vestibule, stairway or inside the building, very simply so that entrance to the dwelling must be one which can be used without passing through the living quarters of another.

A Roads component, as my friend across from me says: here lies the problem. Consisting of the balance of funds remaining from the total MOG and payable to the individual councils at a certain amount for each kilometre of the road in the municipality. Again using the example, in 1992 the total equalization component was $3.9 million. The local revenue was $21 million and the households component was thirteen for a total of $39 million. When this total is subtracted from the overall total fund of $41 million, the balance remaining is $1.9 million and this amount is available for the roads component. The $1.9 million amount is divided by the total road kilometres of 3,913 kilometres which represents the total in all municipalities for a grant of $493.84 for each kilometre of road.

Our analysis, pardon me?

AN HON. MEMBER: (Inaudible).

MR. HOGAN: $493.84 per kilometre.

AN HON. MEMBER: (Inaudible).

MR. HOGAN: Down from 2,000 is it?

AN HON. MEMBER: 2,000 from the old (inaudible).

MR. HOGAN: Yes, but the others have increased not as dramatically as the decrease, but they have increased for the smaller municipalities. Our analysis identified the following inequities in the old system -

AN HON. MEMBER: (Inaudible).

MR. HOGAN: Under the old system, government could not control the total amount they paid out each year. When the tax incentive grant was introduced in 1980, the annual amount paid was $10.8 million and this has risen to $32 million in 1990. No. 2, the population component of the general municipal grant. This proportionately provided the greatest benefit to municipalities with the greatest population having no regard for the financial needs of the municipality and the social assistance component of the grant, duplicated social services policy which pays municipal taxes on behalf of its recipients. There is duplication here, Mr. Speaker, which I guess was realized in latter years of the previous administration and they were also withdrawing from it at that particular time because what was happening was, the local social services office was paying the taxes and the government was in turn also paying out straight from the government's revenues.

A considerable number of municipalities were receiving both large tax incentive grants and significant water and sewer subsidies. Others, with the above average fiscal capacity received more than their fair share of grants and subsidies. These grants and subsidies did not take into account the fiscal ability or lack of resource within the municipality to raise local revenues. In all cases, Mr. Speaker, where there was an indication in many municipalities that the reduction would have a serious and detrimental effect on their ability to meet normal operating costs, their situation was thoroughly reviewed by the officials of the department and where justified, as I said earlier, special grants were provided.

I can assure the House and my colleagues that as clearly experienced and as I have outlined today, the government has provided additional funding to alleviate any hardship. The municipalities in the district for example represented by my friend for Ferryland, I am sorry he is not in the House to hear it, but I will just give you a few examples and I will table these two. My friend for Ferryland is not here so I'll table them so then he can get a copy from the Table. The municipalities of which he spoke were all visited, Mr. Speaker, and this document will show the dates on which they were visited and what their financial position was at the time.

SOME HON. MEMBERS: (Inaudible).

MR. HOGAN: Pardon me?

AN HON. MEMBER: (Inaudible).

MR. HOGAN: Oh yes.

AN HON. MEMBER: (Inaudible).

MR. HOGAN: This documentation will show otherwise. For example, I'll read one into the record for my hon. friend. A review of Renews - Cappahayden: a review of this community's financial situation completed in October 1992. The MOG was reduced to 73 per cent of what it was in the previous year, and in spite of this a balanced budget was submitted by the council, the difference being $7,000. As the record that I have here says: this council is in stable financial condition in operations for 1991 and produced a surplus, Mr. Speaker, of $29,000. That's from their audited statements. Unlike - my friends are saying that they just checked their bank balance. By all appearances from the examinations and visit on that particular day and during that visit -

AN HON. MEMBER: They'll probably help us out.

MR. HOGAN: Pardon me?

AN HON. MEMBER: Probably help us out.

MR. HOGAN: Probably can help us out, as my colleague says.

There will be little significant change in the surplus status in 1992. There's also a little long-term debt in that community for water and sewer charges which are a 100 per cent council responsibility, which are being fully paid for council this year. Council's bank balance at the end of September was $16,478. This should allow for an adequate cash flow to sustain operations to year end without any additional help by government. By all appearances the community of Renews - Cappahayden is in a reasonable financial state, and council will be advised that no special assistance will be forthcoming. So it's a matter of documentation, Mr. Speaker, which I'll be delighted to table.

MR. DOYLE: Can I have a loan of your notes (Inaudible)?

MR. HOGAN: Yes, my son, you can have whatever you want. Ask me. I'm looking for a paper clip to clip it together for 'stunnedhead.'

SOME HON. MEMBERS: (Inaudible).

MR. REID: Norm, you've been called some weird things in your day (Inaudible). You asked for it.


MR. TOBIN: (Inaudible).

MR. HOGAN: No, you can table that, that's being tabled.

MR. TOBIN: (Inaudible).

MR. HOGAN: Table that.

AN HON. MEMBER: Don't give him the Cabinet table.

MR. HOGAN: I'll give him whatever he wants.

MR. DOYLE: (Inaudible).

SOME HON. MEMBERS: (Inaudible).

MR. HOGAN: Could I have the Page deliver this to the hon. Member for Fogo?

AN HON. MEMBER: (Inaudible).

MR. HOGAN: Mr. Speaker, before I take my seat I would also like to refer to Hansard of November 2, 1992, where my hon. friend, the Member for Ferryland says, and I'm going to read it out: "I am very impressed by the hon. Minister of Employment and Labour Relations in his sincerity." I don't know why he would do that, but he did it. "I do not echo the same sentiments for the Minister of Municipal and Provincial Affairs." I can't understand why he would say that at all.


AN HON. MEMBER: Bring Charlie back.

AN HON. MEMBER: I'd figure you were the best one in here.

MR. HOGAN: That's right, I am. I don't know as much about fishing gear and buying some stamps now as my friend for Ferryland does, but....

SOME HON. MEMBERS: (Inaudible).


MR. HOGAN: Anyway, he said - I'm not into the fishing gear: "His department official informed the mayor of one of the towns in my district that they would not receive funding because they voted heavily PC. He told the town manager in another that they had a poor chance of getting a project under recreation; and told the chairperson of a recreation commission in another - actually that was the same minister who came to the district on June 22 and spoke with the mayor, and invited the recreation commission to a rally in the district, and was assured by the candidate they would receive funding." That is poppycock, Mr. Speaker, out-and-out lies.

AN HON. MEMBER: That is the truth, Mr. Speaker.

MR. HOGAN: I have searched the Southern Shore and I can't find them. I don't know as much about the Southern Shore as my hon. friend, but I know enough to speak to them up there. I spoke to the people in the department and I can't find a department official over there who would relay such information or would try to.

Those, Mr. Speaker, are the facts and figures that I can provide, but I will have more information on this particular program any time that the hon. members would like to have it.

SOME HON. MEMBERS: Hear, hear!

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

MR. WINSOR: Thank you, Mr. Speaker.

I suppose the first thing I have to say is the introduction of this bill is a bit late, since it is to authorize payments or give effect to a new system for grants that came into effect January 1, 1991. So I guess we will have to first say that this is retroactive legislation since it is already nearly two years old.

Mr. Speaker, when the former minister started in 1989, and during 1990, talking about this new grant structure that was going to replace the existing one, and how it was going to improve life for those of us who lived in rural Newfoundland, we thought there was a glimmer of hope that someone finally understood what was going on in rural Newfoundland. Well, Mr. Speaker, we were in for a major disappointment because the former minister - and I have to be critical of him - in his implementation of this grant system did more to harm councils in rural Newfoundland than any other single piece of legislation that we have ever had. Mr. Speaker, it did not do what it was intended to do.

The minister, by his own admission this morning, said that the amount given has been reduced from $48 million to $41 million. Mr. Speaker, what he didn't say is how much municipalities have had their debt retirement increased as well. This is a two-pronged attack: One, we are lowering the amount of money that is available; and two, we are increasing the amount that municipalities have to pay back. Mr. Speaker, the minister didn't address it but that is what the former minister did.

Mr. Speaker, I realize that the present minister is having a difficult time with this piece of legislation. I realize he is having a difficult time with the entire MOGs because he inherited a system that he knows is not correct. He knows the system -

AN HON. MEMBER: (Inaudible) straight.

MR. WINSOR: It is a good system but it is not straight. I thank the minister. It needs to be straightened out. Yes, Mr. Speaker, it certainly does need to be straightened out.

MR. HOGAN: It is a good system without the restraints.

MR. WINSOR: A good system without the restraints, the minister said. Well, unfortunately, we are living in a time of restraint and what has happened, Mr. Speaker, is that municipalities are suffering considerably from it.

Mr. Speaker, I want to look at the four components that the minister alluded to because there are four components. Number one, the equalization payment, Mr. Speaker. That was the ace in the hole. I thought we were going to do well when I heard this, because those of us who lived in rural Newfoundland and had property values somewhat lower than the provincial average would then have the equalization formula to kick in whereby you could get up to, I think, forty dollars maximum per household. Anyway, it was an opportunity whereby we could collect some revenue.

Mr. Speaker, the next regulation was the local revenue incentive component. It took it all away again, for those of us who didn't live in an area where we had access to a fair amount of fixed revenue. For example, in the area that I live in, and most of my district, there is not a lot of money that can be derived from the business community. When we do up the revenues, the local incentive revenues, they are done on a determined amount per household from all the revenues that accrue. Now, Mr. Speaker, it is unfortunate, but where I live Gander becomes a major beneficiary.


MR. WINSOR: Yes, they do.


MR. WINSOR: Because all the business tax that normally should accrue in my community to add to the local revenue incentive goes to Gander, because that is where people shop and where the nucleus of stores have been built, Mr. Speaker. And more specifically, the minister has already had it discussed with him by some councils. In my particular area, in Fogo Island, for example, the minister has heard that criticism, that the small communities are receiving very little in local revenue incentive component because of that scale.

MR. HOGAN: Yours is an isolated incident.

MR. WINSOR: The minister says mine is an isolated incident, Mr. Speaker. I beg to differ with the minister. If we live in an area where we are serviced by the - the Member for Lewisporte would find the same thing, that the surrounding communities that Lewisporte benefits from, do not avail of very much from the local revenue incentive component. Included in that, Mr. Speaker - and the minister was right - is every dollar that is raised in the municipality, for example, water and sewer.

MR. HOGAN: The first one offsets the second.

MR. WINSOR: The first one doesn't offset the second, because if we live in these places, that is the reason the assessments are down - we are still getting less revenue to work with, Mr. Speaker.

MR. HOGAN: (Inaudible) formula.

MR. WINSOR: It has nothing to do with the formula, but the whole system is flawed, I tell the minister, that what he thought was going to work has not worked, and the minister knows it is not working.

So the second component didn't work, it didn't do anything to help us. It made the poor poorer and the rich richer, that is how the system worked, Mr. Speaker.

Now, section (c) "an amount prescribed by regulation" - $85 per household, Mr. Speaker, that was the only fair component in it all. It treated rural Newfoundland the same as St. John's, $85 per household - or Corner Brook or whatever, because the City of St. John's Act might be different. But the $85 per household was fair.

Mr. Speaker, the clincher came in section (d). When we, prior to 1990, were given, as councils, $2,000 per kilometer of road. Now, incidentally, that was never enough, and when the former government was in power, I argued loud and long that this was absolutely crazy, that you could expect us to maintain and operate roads on $2,000 a kilometer, and the Minister of Works, Services and Transportation budgets $5,000 for every kilometer of road. So it was wrong then, at $2,000, because you needed much, much more. The $2,000 wasn't enough.

Now, Mr. Speaker, this present formula, because of its being capped, has an amount of money in the pot, and the last one left is local roads. Mr. Speaker, it has gone from - I think, the first time we saw this formula introduced, it was $1,976 per kilometer of road. We didn't get the $1,976 - that year it was reduced to $1,250; that isn't the right amount, but close to $1,250.

Mr. Speaker, we were led to believe last year during the preparation of the budget that it was going to be something, I think, in the range of $850 per kilometer and subsequently, it was reduced to $483, as the minister has said. Now, Mr. Speaker, if you live in a community where there is one kilometer of road, it doesn't matter a whole lot, you have just lost $1,500 from what you had three years ago, but if you live in a community like Cormack which is a good example. I have a community in Musgrave Harbour in my district, with twenty-two kilometers of road that that community has to service. They used to get in the range of $44,000. Mr. Speaker, that has been reduced to less than $10,000.

AN HON. MEMBER: (Inaudible) Zamboni.

MR. WINSOR: Yes, Zamboni, Mr. Speaker. I have talked to the minister and our stadium is almost becoming a reality - it is getting closer and closer. The minister has given some indication that we are next on the list, and rightly so. This minister understands rural Newfoundland, Mr. Speaker. I only wish he could convince some of his Cabinet colleagues of the real importance of rural Newfoundland. We should have twelve or thirteen ministers like him, and then we would get some fairness and balance.

Now, Mr. Speaker, I want to get back to the roads component, because the minister recognized that it is wrong. It is gone to, I think he said today, $1.9 million left for all the road component in the Province. The sad part about this, Mr. Speaker, is that each day municipalities are acquiring more roads.

MR. ROBERTS: Even as we speak.

MR. WINSOR: Even while we speak, some municipality is putting in a subdivision that is going to pick up another kilometer of road. That takes more from the budget because it isn't capped. That is the one component that you could not cap because there is always an ongoing expense in maintaining roads.

For most councils, their equipment is not capable of taking care of such large sections of road without some offset in revenues. Mr. Speaker, there is not one member, who has a municipality in rural Newfoundland, who has not been impacted very severely by this present regulation.

I suppose the most unfair component of all is Section 10, where 'The minister shall, out of funds provided by the Legislature,' get his debt retirement. It started off at $300, and we were told - and I have never yet understood this one - it was supposed to have been a phase-in period over three years for both. It has been only two years since implementation, and already municipalities are up to - $300 was the cap - it was not to exceed $300, but then, the next year, a cost of living allowance came into it and now we have it up to $318 per household. It is going up again next year a further 2 or 3 per cent, whatever the cost of living is going to be; but remember what has happened? The amount of revenues that the town can get are capped. The town is not going to receive any more, so there is nothing in this provision now to allow the town any inflation. Wages have gone up in the town, gasoline prices have gone up, equipment repairs have gone up, but there is nothing in it that allows for any provision for the municipality to get any more, but you are going to have to pay more back to government. Mr. Speaker, that is one component of the unfairness. One component of the unfairness is that the amount of $318 increases each year.

Now, that is only a drop in a bucket compared to the unfairness with which many of the communities in my district are being faced. We have one town - one town in the entire district - that is completely serviced, with the exception of ten or twelve households. That local council is able to get, because of its water and sewer rate, approximately $300 a year from water and sewer fees that it cannot pay back. Now in that town that works quite well.

What about the town of Tilting, for example, that is half serviced; has ninety households. It has to pay back $27,000 plus - nearly $30,000 in debt retirement, but it only receives revenues from about forty of them. It can get eight thousand dollars in water and sewer fees, but it has to pay $30,000 back in debt retirement. Where does it get the other $22,000?

DR. KITCHEN: (Inaudible).

MR. WINSOR: Up the taxes, the Minister of Health says. Up the taxes, Mr. Speaker.

DR. KITCHEN: What is the mil rate?

MR. WINSOR: The mil rate is six or seven.

DR. KITCHEN: Six or seven? It was 11 last year.

MR. WINSOR: Yes, Mr. Speaker, it is 11.5 here. Who pays for the fire department here? We go out and have to raise locally several thousand dollars each year to run volunteer fire departments. Who provides all the services around town, recreation and so on? It comes out of your 11.5 mil. No one comes knocking on your door, collecting to see if he can get enough money to pay the light bill to run the local rink. No one does that in your town, but they have to do it in the towns in rural Newfoundland, because we provide thousands of hours of volunteer work -

AN HON. MEMBER: Spoiled brats.

MR. WINSOR: Make no wonder the Minister of Municipal and Provincial Affairs would have trouble, if that is the kind of thing we are getting from St. John's members on that side. If that is what they are saying, make no wonder there would be trouble.

Now, Mr. Speaker, that is one component -

DR. KITCHEN: (Inaudible).

MR. WINSOR: If the Minister of Health wants to say something, let him get up. Otherwise, Mr. Speaker, ask him to be quiet.

AN HON. MEMBER: Let him get up on his hind legs and speak and stop barking.


MR. WINSOR: Mr. Speaker, can you silence the barkers from the back bench there.

MR. SPEAKER: Order, please!

MR. WINSOR: I am quite willing to give it, and I am quite willing to take it, too.

MR. SPEAKER: Order, please!

MR. WINSOR: I can do all of that, Mr. Speaker. I can give it and I can take it.

Now, Mr. Speaker, that is an unfair component of this water and sewer. And, Mr. Speaker, what is even more unfair, and the Minister knows it, is that there are a number of communities in this Province that have dry pipelines, no water and no sewer going through them at all, yet they are still required to pay $318 per household. Mr. Speaker, how can that be fair when the community receives no services? Mr. Speaker, in some of our towns - and if the Speaker were in the Chair he would know what I am talking about because a number of his communities in Bonavista North are similar to some in my district, in Fogo, where there are only water services provided. So if a town has 300 households maybe 200 of them are serviced, yet they are still assessed, $318 per household, even though, they only have water services. How does that council make up the difference? Mr. Speaker, it makes up the difference by doing two things, they take all of their local revenues to pay on the water and sewer debt and then they have to take a fairer portion of the MOGs that they get, so the town is effectively left with no money to run itself. Mr. Speaker, how many municipalities in this Province do not receive MOGs because they all get intercepted, we don't even get them out in our communities because they are intercepted by the Department of Finance, because the towns are unable to make budgets. They are unable to get their amounts paid in. And the minister is well aware of a large number of municipalities in this Province that are unable to make their budget, and they have their MOGs taken back.

Now, Mr. Speaker, another hardship that the Minister has just recently inflicted on municipalities - and I am not sure if the minister is aware of this one yet, I meant to mention it to him last week - is that -

AN HON. MEMBER: (Inaudible).

MR. WINSOR: I have to wait to get the minister to listen to this one. Under the present system of people on social assistance, payments are made on a quarterly basis. Anyone who is on long-term or short-term assistance, social services will pay water and sewer rates for that quarterly period. But what has recently happened is that if that person is not on social assistance for the entire period, if, for example, he were on social assistance for two months, and one month they had found income or he were on unemployment insurance or whatever, then the department will not pay water and sewer for any portion of that quarter.

Now, Mr. Speaker, what this is doing the receiver of the service is not aware that social services is not going to pay it and then the municipality is having major difficulty in collecting this money, because these individuals don't have it to give. Now, this is the first time this year that social services water and sewer were not paid month for month, it is done on a quarterly basis, and the minister should have a look at it, because it is causing a fair amount of hardship. A small municipality the other day was short revenue some $1,700 as a result of that change, and the municipalities weren't informed of it until two months ago.

AN HON. MEMBER: That is wrong.

MR. WINSOR: That is true.

AN HON. MEMBER: That is wrong.

MR. WINSOR: That is true.

AN HON. MEMBER: (Inaudible) when I was minister.

MR. WINSOR: Mr. Speaker, it didn't start happening until this year. Mr. Speaker, he might have informed them, but the minister never implemented it. It was never in place, Mr. Speaker, until the past two months.

MR. HOGAN: (Inaudible).

MR. WINSOR: No, Mr. Speaker, it is wrong. It is placing hardships on council. It is placing hardships on individuals.

AN HON. MEMBER: (Inaudible).

MR. WINSOR: The Minister of Forestry was out a few minutes and we are going to get our Zamboni. We have had some good meetings with the minister. The minister recognizes the tremendous contribution and efforts the people of Fogo have made to do something for themselves in raising $150,000. The former minister would have done it but his Cabinet colleagues interfered with the due process, and of the six that he recently approved, only three of them were within the criteria that had previously been laid down, and some arm-twisting from some Cabinet ministers changed the criteria and the minister and went out and announced three new swimming pools that were not considered in the prior list. The minister had a Cabinet colleague who did it; I won't say from where. That Cabinet colleague, though, didn't get a swimming pool.

AN HON. MEMBER: By the minister.

MR. WINSOR: By the minister, who announced a major recreation program of $1.5 million a year and turned around and spent $9 million - a great minister, except he didn't use one of the planks, fairness and balance, to decide who was going to get it, he used arm-twisting by his Cabinet colleagues to determine who was going to get what.

Having said these few words, Mr. Speaker, I want to sum up for the minister that this formula has not worked; the minister knows it doesn't work, and having heard the Minister of Health today, I can visualize the difficulty the Minister of Municipal and Provincial Affairs has in Cabinet, in trying to get through a program that will treat rural Newfoundland fairly. The former minister who introduced it sits in the Cabinet, and I have a lot of sympathy for the Minister of Municipal and Provincial Affairs as he tries to get Cabinet to come to an understanding, a realization of the hardships that are being placed on rural Newfoundland as a result of the changes in MOGs.

Mr. Speaker, it is an unfair system, it hasn't worked, it is not going to work until the cap is lifted,and I am a bit disturbed that yesterday the minister couldn't be a bit more definitive when I asked him a question on MOGs for next year. The minister said, and I quote: 'There are no implications that I know of, Mr. Speaker. The report that he speaks of is in the system and being studied by officials and will take the normal course to be accepted or rejected.' Then, Mr. Speaker, he said: 'At this point in time, it has no implications on next year.'

Now, Mr. Speaker, 'at this point in time' I would assume, means from now up until the implementation of the mini-budget that is going to come next week. We cannot possibly have municipalities endure more hardship as a result of cutbacks. It is mighty difficult to run a municipality now in this Province. If there are further reductions - and I fear there might be, because the minister does not have the support of his Cabinet colleagues. I am surprised the Minister of Forestry and Agriculture, from Windsor - Buchans, an area that -

MR. FLIGHT: I have a Zamboni in every town.

MR. WINSOR: He has a Zamboni in every town. Yes, Mr. Speaker, thanks to the former Administration that treated Liberal districts fairly and gave the minister stadiums for Buchans, one for Badger, one for Windsor. Yes, the former Administration did that. I only hope that he will do the same when it comes up for municipal grants this year for recreation, that districts like Fogo will be considered. But more importantly for the minister, I hope that he will support his seatmate, because I believe that the Minister of Municipal and Provincial Affairs is going to press hard to have this unfair system changed.

Mr. Speaker, I know what certain members from St. John's who are in Cabinet are going to say. The member representing a number of smaller communities, I hope that he will lend some support to the minister to say that the capping of the system is unfair. We have to lift the cap, it is not right because for every household in this Province, $85 dollars more comes out of the money left for roads. Mr. Speaker, that is wrong. It has to be changed and the minister should help. Secondly, Mr. Speaker, I hope the minister will support the Minister of Municipal and Provincial Affairs as he attempts to change the unfair water and sewer debt repayment that is presently in place. it is unfair to set it at $318 per household when a number of households are being charged for services they don't receive. It is unfair - totally unfair. The minister knows it is unfair, and he wants to change it. He is asking for your support, Mr. Speaker, because you have a difficult task to try to convince the St. John's members, who are sitting in Cabinet, that this system is unfair. They believe that every community in Newfoundland has a system somewhat similar to St. John's. That is not the case, so I ask the Minister of Forestry and Agriculture - I notice he is pointing to the real culprit - the former minister.

AN HON. MEMBER: (Inaudible).

MR. WINSOR: Yes, Mr. Speaker, he is pointing out the real culprit, the man who designed this. Yes, he was the culprit. I can remember how he used to boast how municipalities throughout the country were flocking to get this - he made us believe there was a parade of municipalities and governments rushing into his office to adopt this system.

Well, if Newfoundland has to judge them, then I think the former minister's new grant system will be weighed in the balance and found to be wanting.

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

MS. VERGE: Thank you, Mr. Speaker.

I would like to take advantage of the opportunity to discuss this bill, An Act To Amend The Municipal Grants Act, to deal with the incompetent way this Administration has approached provincial funding of municipalities. I cannot think of a more blatant example of the incompetence of this Administration in running the government.

Early in their term of office, they set out to make major changes in municipal affairs policy. The first salvo was the declaration by the former minister that the government was going to carry out wholesale municipal amalgamation. Then, a few months later, he announced that the government was going to bring in a new municipal operating grants formula.

Mr. Speaker, this Administration is employing a whole squadron of public relations specialists, and these people's job is to put a positive spin on what the government is doing. In the case of their announced municipal operating grant system, the spin was that the new formula would favour the poor and take from the wealthy municipalities. The spin is that the new grants would be distributed in a more equitable way, which sounded fine.

Shortly after that announcement, I remember being at a meeting of the Great Humber Joint Council, an organization comprising representatives of about twenty-five municipalities in the Bay of Islands-Humber Valley-White Bay South area. The meeting dealt with the changes in municipal operating grants, and when the topic was introduced, the Chairperson asked each councillor and mayor around the table to tell the group, to tell the meeting, of the effect of the new grant system on his or her municipality.

Mr. Speaker, it turned out that every single municipality represented at that meeting, bar none, was being hurt by the changes. Municipalities, small and large, were being hurt. Municipalities with high property tax rates and no property tax were being hurt.

Mr. Speaker, the City of Corner Brook, for many years now, has had the highest municipal tax rates in the whole Province, and the City of Corner Brook has been hurt by the Wells' administration's changes in the municipal operating grants formula.

The truth is that there was no equity involved in the new formula. It was not a matter of taking a Robin Hood approach. The truth is that funding was being cut across the board. In reality, the provincial government was withdrawing financial support from municipalities and requiring municipalities, mostly made up of volunteer councillors, to levy higher taxes. It was an instance of the provincial government raising taxes and extracting more money from the citizens of the Province indirectly. The administration did the same thing in cutting subsidization of Newfoundland and Labrador Hydro, and charging a loan guarantee fee to Hydro. The effect of that, which added up to a reduction in provincial government support of Hydro of $40 million a year, was to jack up the electricity rates charged consumers. So as with light bills, we see municipal taxes rising, and the people responsible are the provincial government - the members opposite - but, of course, they are trying to keep in the shadows.

In the case of municipal operating grants, worse than changes that hurt municipalities was the fact that the government proceeded to retreat. The same as they did with amalgamation, having failed to do proper research and analysis, having failed to consult with municipalities, not really knowing what they were doing, they retreated. They changed. They amended. They announced up front a grand new scheme over three years. Then, as the months went by, they altered it. They altered it in an unpredictable, ad hoc way.

Municipalities, and I say they are mostly made up of volunteers - volunteers who have been elected - for the last two years now, perhaps three years, have prepared their budgets in good faith. They have assessed their revenue potential, believing that they would get from the provincial government what was indicated by the formula then in place - by the formula then announced. They looked at their operating expense requirements, drew up budgets, determined tax rates accordingly, and even sent out tax bills, only to have this government change the rules in midstream. There is no excuse for that, Mr. Speaker, no excuse whatsoever.

The members opposite are doing their best to throw me off track - to interrupt - but I assure the members opposite that there are hundreds of municipal mayors and councillors around this Province who understand what I am saying and who agree with what I am saying.

MR. EFFORD: How come they all voted Liberal in the last election?

MS. VERGE: Mr. Speaker, the Member for - what is his district over there?

AN HON. MEMBER: Port de Grave.

MS. VERGE: - Port de Grave is asking about people having voted Liberal in the last election. I say to the member that not as many people voted Liberal in the last election as voted Progressive Conservative - that is Province-wide - and in the district I represent, more people voted for me than voted for his esteemed leader, the Premier of the Province.

AN HON. MEMBER: It is his leader now, not his esteemed leader.

MS. VERGE: I do not blame the Member for Port de Grave for being disgusted with the Premier. I do not blame him one bit. What I cannot understand is why the member persists in sitting behind the Premier.

MR. EFFORD: Because the seats don't go back any further.

MS. VERGE: 'Because the seats don't go back any further,' he says. Well it is a pathetic sight to see the Member for Port de Grave over there in the back bench, muzzled, day after day sitting there passively, not opening his mouth to address the pressing concerns of his constituents, not saying a word about the deterioration in the fishery and in the economy of the Province, not having any contribution to the debate about municipal operating funding. It is a pathetic sight, it is a real shame; it is a real shame.

AN HON. MEMBER: (Inaudible).

MS. VERGE: He says it is very difficult, very difficult. Yes, I can imagine.

Mr. Speaker, the muzzle after all, is self-imposed. There is nothing preventing the member from standing up and speaking his mind, letting everyone in the whole Province know what he really thinks about his Premier and the Cabinet running the Province. Nothing is stopping the member and if he would like to rise now, I will gladly yield to him. I would like to know what he thinks of the job the Premier is doing of administering the government.

MR. EFFORD: Be patient.

MS. VERGE: Be patient he says, be patient. I am not a patient person actually -

MR. EFFORD: You were there for seventeen years.

MS. VERGE: Mr. Speaker, I am not that old, I say to the Member for Port de Grave; but coming back to municipal operating funding, as I said in the beginning, this government has made a complete mess of funding in municipalities, a complete schemozzle as they say. I said in Question Period to the Minister of Social Services that he personally is taking much of the blame for the mess and that is not really fair because he alone is not responsible. These decisions were made primarily by the Premier, certainly by the whole Cabinet but everyone knows that it is a one-man show, but yet the Minister of Social Services, the Member for Waterford - Kenmount has taken the brunt of the criticism and now the new minister is able to come in and acknowledge that a mess was made, that mistakes were made and he is now trying to present himself as the hero by saying that he is going to correct the mistakes. Well, I don't know if I would take that if I were the Minister of Social Services, it is not really fair.

Now I pointed out in Question Period that in his new portfolio he has a chance to admit that the administration made Social Services mistakes two or three years ago, and he can be the hero in Social Services and take corrective action. He admitted rashly in Question Period that he does not have any rationale for anything he does. Well, there is certainly no rationale apparent in government operating grants for municipalities over the last three and a half years, no rationale at all when you look at the erratic pattern of decisions, when you look at announcements and retractions and revisions; when you look at changes made in mid-stream, when you look at the deductions made after the Department of Municipal and Provincial Affairs had notified municipalities, and councils had prepared their budgets in good faith depending on that information, Mr. Speaker, you cannot avoid the conclusion that they have bungled.

Mr. Speaker, one of the shortcomings of this administration is a lack of appreciation for volunteer service in municipalities. Mr. Speaker, I suppose that is because the Premier has put behind him his rural roots, he has become an urban creature. He is quite out of touch with the vast majority of people of the Province; he holds himself far above most of his constituents and he really does not realize the extent or the significance of volunteer service in running municipalities. That's evident, Mr. Speaker, in his handling of the amalgamation issue. He alone seems unable to see that his proposal to combine Massey Drive, Mount Moriah and Corner Brook will result in higher overall operating cost, will necessitate higher taxes, and naturally people don't want it.

The proposal was made three and half years ago. Again, no advance research had been done, no analysis had been done. Under the Municipalities Act there had to be a feasibility study conducted. Contrary to the spirit of the Act, if not the letter of the Act, the government didn't appoint independent commissioners to do the feasibility study. They appointed in that instance an executive member of the Department of Municipal and Provincial Affairs, holding his job at the pleasure of the Premier, and then a second commissioner chosen by the three municipalities. That independent commissioner was Hubert Harnett. Mr. Harnett is a chartered accountant who was a member of the Royal Commission on Municipal Government which did its work in the 1970s. Mr. Harnett concluded that in the case of the proposal to amalgamate Massey Drive, Mount Moriah and Corner Brook, the evidence did not indicate benefit to the whole.

That wasn't good enough for the Premier. He procrastinated. He allowed another year to go by. This is time when the volunteers who do so much in the running of the smaller municipalities were having some difficulty summoning the enthusiasm and the basic motivation to carry on. After all, people don't have to take part in a volunteer fire department or recreation program. They do it because they want to do it, because they enjoy doing it, not because they have to do it. With the government holding over their heads the threat of taking away their autonomy, snuffing out their council status, it's sometimes been difficult for these volunteers to carry on. I have to praise the volunteers of Massey Drive and Mount Moriah for continuing to do such good work, for continuing to donate their time and talent to run so successfully their municipalities.

After a couple of years more dragged by the new Minister of Municipal and Provincial Affairs agreed to have the City of Corner Brook engage consultants to analyze the financial implications of amalgamation. Now you would think the government would have done that in the beginning - basic cost benefit analysis. You would think that would have been a prerequisite to announcing amalgamation and conducting an expensive feasibility study. But no, as I pointed out before, they seem incapable of the basics of good administration.

So finally after three years the government agreed to have the City of Corner Brook's consultants do a cost study. Now the provincial government paid for that study, paid $15,000. Corner Brook's consultants Doane Raymond over the summer did their study. The minister has their report. I assume the Premier has their report. I have their report. And they found that amalgamating Corner Brook, Massey Drive and Mount Moriah, as the government had proposed back in 1989 would result in a net overall cost increase ranging from $115,000 a year to $832,000 a year.

Now, Mr. Speaker, the reason for the range is because there would be a number of options possible for an enlarged amalgamated municipality. At least, in theory, there would be options. And the low end of the scale assumes that the volunteers would continue to operate fire departments in Massey Drive and Mount Moriah. Well that is preposterous, Mr. Speaker, why would the volunteers in those small municipalities continue if their municipalities are taken away from them against their will? They have already said that they would not be prepared to carry on, and besides the City of Corner Brook has a fully paid unionized fire department. Corner Brook firefighters are not going to stand idly by and have volunteers cover part of the territory of the City of Corner Brook. But we are already seeing the result of this kind of arrangement in the instance of St. John's. Now St. John's is a different case. My point all along is that you have to evaluate each case on its merits. Every case is different. Sometimes bigger is better.

AN HON. MEMBER: (Inaudible).

MS. VERGE: Sometimes bigger is better. But sometimes bigger is bloating an already fat bureaucracy, I say to the minister, and adding to overall operating costs. Sometimes merger means displacing volunteers with paid municipal employees. Sometimes amalgamation dampens community spirit, spoils a good thing.

So, Mr. Speaker, this government is going about municipal affairs funding policy and administration all wrong. And it is time, Mr. Speaker, for the government to go back to the drawing board, consult municipalities, take the advice of learned people such as Mr. Harnett, I say to the Member for St. John's South, a good friend of his. A man who said that amalgamating Corner Brook and Massey Drive and Mount Moriah will not benefit the whole. Take proper account of the value of volunteer service and draw up a fair operating grant formula.

Mr. Speaker, most of our municipalities are relatively small. Most of our people live in rural areas. Most of our municipalities depend largely on volunteer service. Mayors and councillors serve without pay. Fire protection is provided through volunteers. Recreation programs are conducted by volunteers. And generally speaking, Mr. Speaker, people who donate their time in this way to serve their neighbours enjoy those activities. That kind of volunteer activity contributes significantly to the enthusiasm and the spirit and morale in small communities. But if this government keeps downloading on the volunteers, keeps squeezing the volunteers, keeps forcing them to raise municipal taxes then it is only natural that they will become discouraged. The politicians opposite are getting paid and paid well to administer the provincial government. Part of the pay could be described as 'contact pay,' or pay for taking abuse. Pay for taking abuse from irate taxpayers.

Municipal mayors and counsellors for the most part don't get paid. They are volunteering. They don't have to serve on councils. I'm afraid many of them have been discouraged from continuing. Many people have been discouraged from even trying for election to a council or recruitment to a fire department because of the unfair funding policy of this government involving more and more downloading of costs, less and less provincial subsidization.

Mr. Speaker, this Bill is quite sparse and basically is legislation enabling specific operating grant formulas to be made by Cabinet through regulations. This Bill sets up Cabinet, meeting in private, meeting behind closed doors, to prescribe specific municipal operating grant formulas. This Bill doesn't set out precise numbers, doesn't set out enough information for any municipality to figure out how much money they're going to get next year or the year after. That's all to be done by the Cabinet meeting privately and in secret.

We all saw the display of arrogance by the Minister of Education here this morning when he was dealing with very hard-hitting and important questions by the education critic, the Member for Ferryland. The Minister of Education very arrogantly said that no record of a Cabinet meeting would be made public. More than that, he said that no rationale for a Cabinet meeting would be communicated to the public.

Of course, the Minister of Social Services had indicated earlier that he doesn't have a rationale for anything he does. I'd suggest that the government doesn't have a rationale for this Bill, for this municipal operating grants Bill -

SOME HON. MEMBERS: (Inaudible).

MR. R. AYLWARD: Twenty minutes left.

MS. VERGE: I've got four minutes, I say to the Member for St. John's South, four minutes. Now that I know he's irritated with what I'm saying I'm going to slow down and use every little bit of the four minutes remaining, I say to the Member for St. John's South. Now he's sitting in his place laughing but he's not getting up and taking part in the debate. He represents an urban district. He represents part of the City of St. John's. The provincial government, the government that he supports by sitting solidly in the back bench, has socked it to the City of St. John's. Has cut provincial funding, has downloaded expenses such as the fire department, such as the Aquarena. I ask the Member for St. John's South, does he have any certainty that this Bill will provide enough operating funding from the Province to the City of St. John's to continue to operate the Aquarena?

MR. HARRIS: Point of order, Mr. Speaker.

MR. SPEAKER: Order, please! Order, please!

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

MR. HARRIS: Thank you, Mr. Speaker. I know hon. members opposite are feeling rather tired and sleepy, but I wonder if the Chair could direct the hon. Member for Pleasantville not to have his back to the Chair? I don't think it's proper for the hon. member to have his back to the Chair.

SOME HON. MEMBERS: (Inaudible).

MR. SPEAKER: Order, please! Order, please!

The Chair had said on many occasions that it's not proper conduct to turn a back to the Chair. I see that the hon. Member for Pleasantville has turned around and is now facing the Chair. We will continue with the debate.

The hon. the Member for Humber East.

MS. VERGE: Thank you, Mr. Speaker. I have to say I really don't blame the Member for Pleasantville, because he must feel very uncomfortable and embarrassed to hear me point out the realityof the unfair treatment his government has given to the City of St. John's. He must be very worried about the City of St. John's ability to continue to operate the Aquarena. So I really do not blame him if he had his back turned. He might well hide his head in shame, thinking about the way the Wells' administration has dealt with the City of St. John's.

Mr. Speaker, in conclusion, this is a Bill which simply enables the Cabinet, meeting secretly, to prescribe municipal operating grants formulas. There is nothing spelled out in this Bill that will enable any municipality to figure out what they are going to get in the 1993 budget year, or later years. Over the past three-and-a-half years this administration has displayed its total incompetence in running the government, and specifically in dealing with municipalities under the guise of reforming operating grants to redistribute funding in a more fair way. The government simply cut everyone - has cut across the board progressively, more and more. At the same time the government has downloaded responsibilities on municipalities.

MR. SPEAKER: Order, please!

The hon. member's time is up.

MS. VERGE: Thank you, Mr. Speaker.

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

AN HON. MEMBER: Carbonear?

MR. SPEAKER: The Chair has recognized the hon. Member for Carbonear.

MR. REID: Mr. Speaker, I am not going to be very long, and we do not have a lot of time left, but I take note of the comments that were made by my hon. colleague from Humber.


MR. REID: East - when she said that the volunteers in the communities who run for councils and who offer themselves to fire departments and town councils is diminishing in the outport communities of Newfoundland and Labrador.

I just wonder where the hon. member was - I believe at the time she was the Minister of Finance, and a member of the Cabinet, under the previous -

AN HON. MEMBER: Minister of Justice.

AN HON. MEMBER: Not the Minister of Finance.

MR. REID: I am sorry, not Finance, Justice, under Premier -

AN HON. MEMBER: (Inaudible).

MR. REID: And Deputy Premier?

- under the hon. Brian A. Peckford when, in 1986-1987, as far as I was concerned at the time when I was Chairman of the Federation of Municipalities, he cut the two legs right out from under us when he diminished our capital grants; when he diminished our road components; when he did everything in his power to cut - without coming to the House, by the way - to let the people and I guess the mayors around the Province know what he was doing.

With all that said, my hon. colleague and my hon. friend from Humber East, yes, there was an uproar, but in the end the councils around this Province accepted the fact that government could not continue to be pumping large amounts of dollars into municipalities, because even back in 1986 and 1987 I think government, whether it be the opposition government or whoever it was, felt that the money from the government was soon disappearing.

SOME HON. MEMBERS: Hear, hear!

MR. REID: I think today, for these members to stand, and especially a Member for Humber East, who knows very little or anything about municipal financing, I question her ability to even stand and speak on the Bill, because she does not know.

We are into a depression and we are finding it difficult. Every community in my district is finding it difficult. The Government of Newfoundland is finding it difficult. The Government of Canada is finding it difficult, and I know that it is going to hurt, and it has hurt the last two or three years in the municipalities around this Province.

With that said, I do not believe that people will renege on running in the next election. In fact, I guess with just a year left before municipal elections take place, out in my communities of Carbonear and Victoria and Salmon Cove, there is talk already about who is going to run for mayor and who is going to run for council.

Regretfully, regretfully, Mr. Speaker, there is no talk out there about who is going to run for provincial politics for the Tory association and I sort of feel bad about that because I do not know who is going to run against me out there -

AN HON. MEMBER: They cannot find anybody.

MR. REID: Yes, I think that is what it boils down to. My hon. friend for Harbour Grace is in the same situation. He and I burned the midnight oil trying to figure out someone who we could probably support in both Harbour Grace and Carbonear. Who we could support because my friend and I do not want to go out there and run unopposed. We love beating Progressive Conservatives and I am sure that in Harbour Grace and Carbonear districts, in the next election we will continue to beat Progressive Conservatives.

MR. CRANE: Now, now, listen to that.


MR. REID: Yes, Mr. Speaker. I was the most expensive President of the Newfoundland and Labrador Federation of Municipalities. I beat you by over $300,000. Mr. Chairman, in 1984, the Federation of Municipalities was awarded a grant from the Liberal Government of Canada for $565,000 to carry on information seminars across the Province and I darn well did spend most of it, I will guarantee you that. It was the best possible program that municipalities in this Province could even imagine. We went around this Province, we went to Goose Bay, we went to Clarenville, we went to Corner Brook and we even went to Carbonear, and we had these wonderful meetings bringing the bureaucracy from the Canadian and the provincial governments into these places and a lot of my hon. colleagues on the other side - Mr. Doyle for example, the Member for Harbour Main - I think at the time he was a minister and he thought at the time that it was an excellent idea; and we did and we spent a lot of money.

Mr. Speaker, the one thing and the only comment that I want to make to you and to my colleagues here in the House this morning, is that this is not the first time that the Department of Municipal and Provincial Affairs has had to make changes to municipal operating grants. It is not something that people digest readily but I think the people who are out in the Province today, out there in rural Newfoundland and in St. John's understand the financial dilemma that we are in as a Province and they can appreciate and I am sure that when next November comes along and the municipal elections roll around again, there will be plenty of people in Newfoundland and Labrador who will offer themselves as municipal politicians and municipal leaders.

Thank you very much.

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

MR. GULLAGE: There is nobody up.

MR. SPEAKER: The Chair looked at both sides. The only member standing at the time was the hon. minister.

SOME HON. MEMBERS: Hear, hear!

MR. GULLAGE: Mr. Speaker, I thought I would take a few minutes to speak to this particular Bill. These municipal grants and the changes in the grants of course were initiated as the minister already said while I was in that particular department as the minister. I think, Mr. Speaker, that the municipal grants as they are now structured, and I have had comments to this effect from other ministers in other provinces, we have the finest municipal grant system in Canada, and the time that was taken in putting together this grant system was considerable and involved consultation with the municipalities, considerable consultation with the municipalities, research across the country; we employed a group of consultants to carry out the work for us and they did a marvellous job and I think, without any fear of contradictionthat the components as they're structured are very fair to the municipalities.

As a matter of fact, the whole system has had the effect of taking dollars in subsidy money from the wealthier communities, the wealthier municipalities in the Province, those with a full tax base, not just a residential tax base, as many of them have, but a full tax base of industry and business and so on. Those communities under this system have to contribute dollars by way of equalization to those communities that have an inadequate tax base. That is the main and most important component of this grants system and it is having a good affect on the municipalities throughout this Province.

However, there'll always be a group of municipalities - and there is today as there was when I was the minister - which complain about paying their fair share. Under this grants program, unlike the previous one, it's very difficult, if you're running a municipality as a mayor or a group of councillors, to take advantage in this particular grants program, where it was in the previous one. As a matter of fact you have to have a reasonable amount of revenue in your community to even access the grants program. Communities that in the past were refusing to be responsible fiscally, with mil rates that were, to put it mildly, ridiculous - 2 and 3 and 4 mils and that sort of thing - find themselves now in a situation where they can't even access the grants program and receive subsidies from the Province unless they're doing a reasonable job for themselves.

That is important. Because what was happening was that there was a large number of communities throughout the Province which were taking advantage of the taxpayers generally by way of keeping their revenues artificially low, purposely low, so they could access the maximum amount of dollars from the Province. That's taking dollars away from municipalities that needed help, needed subsidy, and couldn't access that subsidy and that help because of a grants program that was antiquated, out of date and very unfair. So we changed it and changed it for the better.

The Member for Humber East was talking about amalgamation and mentioned Corner Brook, amongst others. Mentioned a study that was done by Mr. Harnett. I might just add to her comments by way of saying that we were required under the Act when we carried out the amalgamation procedure, which is still ongoing, to appoint one commissioner. That was all that was required under the act. We went an extra step and appointed two commissioners, one recommended by the municipalities and one recommended by the minister. And in all cases we carried out detailed analysis of the municipalities involved, 113 when we started.

Mr. Speaker, I think I can say without too much fear of contradiction that in almost every case had we not carried out any studies at all, Mr. Speaker, almost all of these communities would be better of amalgamated. The forty-three groupings that we started with, with the exception of the ones we took off the list eventually, well all of the ones that are left on the list certainly, and the ones that are done without doing any studies, common sense would tell you that in a province with a population of 580,000 people, and some 800 entities of various kinds, whether it be local service districts or towns or cities or whatever, with that amount of government municipally, logic has to tell you that it is too many. We have far, far too many municipalities, more than the entire Atlantic Provinces put together, certainly a lot more than Nova Scotia which has only fifty-five. And they are trying to bring their's down believe it or not, they are coming down from fifty-five. And they have had a recommendation to do just that.

But common sense tells you that 580,000 people should have less government than 800 municipalities. That is common sense. And almost all of the studies we did were done because of the requirement in the act obviously, and it was good to do them and have the analysis done, but not to tell us whether amalgamation made sense, Mr. Speaker. Common sense tells you it makes sense that if you have three or four communities of 400 or 500 or 800 people each, they are still very small, even when put together, that the economies of scale by putting them together, the enormous savings by way of elimination of duplication, fire halls and town halls and staffing and managers and equipment. Mr. Speaker, I can give you an example of four communities side by side in the Conception area, they all have a fire truck, they all have snow clearing equipment, they go out and plough the roads when they have a snow storm, in a couple of hours go back and park the piece of equipment next to their town hall, and the other three communities are doing the same thing. Now, Mr. Speaker, if that makes sense, it is beyond me.

So we went through the exercise of analyzing all of these communities, because it was required in the act, and we needed to find out how they would look, put together, but not to find out whether or not amalgamation made sense. Surely heavens, anybody thinking at all in this Province would have to say, we have far, far, too much government - far, far, too much government.

I once did an analysis, when I was on municipal council, for a debate we were about to enter into, and I totalled up all of the people connected with government in this Province - federally, provincially and municipally, whether elected or unelected - and it came out to a ratio of five to one. We actually have a person in government for every five people in this Province.

AN HON. MEMBER: Elected?

MR. GULLAGE: Elected and staff - unelected - which is totally and completely ridiculous. Of course, everybody knows that.

Mr. Speaker, we have made great strides already, and we still have a long ways to go; but for anybody to say, as the Member for Humber East did, that amalgamation doesn't make sense and that the people don't want it - ridiculous, completely ridiculous comments.

We had a survey done that showed overwhelmingly that people wanted it. Some communities didn't want it. Some municipal leaders didn't want it, obviously. Would you call that turf protection? Yes, I guess you probably would; but not because they weren't acting in the best interest of their citizens. They were acting in their own best interest - those who opposed it.

Today, Mr. Speaker, if you were to go to any of the amalgamated municipalities, you will find that amalgamation is working very well, and the cost savings are evident, and will be evident as we complete the amalgamation process with the remaining municipalities that no doubt will be put together in due time.

Mr. Speaker, to go back to the grants again, we hear criticism from time to time of the roads component. I guess that is where most of the criticism comes from - the last component in the program - which is meant to be sort of a catchall component for any money that is left after we have dollars expended under the other three components. It is not meant to relate to roads specifically. It could be anything. It could be telephone poles. It is just a way of measuring, how to distribute the remaining monies in the program, if there is any remaining money, from the other three after the other three components have been applied.

The most important two components are the equalization - obviously, the first component, equalization, which makes sure that municipalities that have an inadequate tax base are looked after; money is shifted from those that have more than an adequate tax base and are rich in comparison - and the incentive component, the second one, which says to municipalities: If you are willing to do more for yourself, if you are willing to be fiscally responsible, raise your revenues, don't operate with a mil rate of 2 or 3 or 4 - which gets you maybe $100 a year per taxpayer in most cases - but be fiscally responsible, we will give you more money than you would get if you weren't fiscally responsible. So those two components are the most important.

The remaining two, the households component and the roads component - the households is lesser in importance, but certainly the roads component is simply a way of distributing remaining money. If there is a year where the money is all spent - which I hope it would be - on the first two components, equalization and incentive, where I would hope it would all be spent, because that's what we would ideally like to see - then there may be no money left for the roads component and that would be perfect. Because the system then would be working as we want it to work, where people are taking full advantage of the first two components, and not the last two.

So, Mr. Speaker, in conclusion, obviously, this grants program is very important for the municipalities. I can say without contradiction that it is working very well. It has seen a new era of responsibility as far as the municipalities are concerned, and fairness where they have access to assistance from the Province on a partnership basis, where if they do their share we will do our share to assist them. Thank you.

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

MR. R. AYLWARD: Considering the hour, Mr. Speaker, there's only three minutes left till 12:00, I agree to call it 12:00. I adjourn the debate.

MR. SPEAKER: The hon. member has adjourned the debate.

The hon. the Government House Leader.

MR. ROBERTS: Hon. members have been so assiduous in their work this morning that we will take the rest of the day off. In moving the adjournment, may I tell hon. -

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: I'm sorry?

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: Well, I wish everybody, obviously, a pleasant weekend. I hope hon. members opposite will take their 'nice pills' for a change, so they will be nice next week. So shall we, on this side. Mr. Speaker, on Monday we will be carrying on with -

MR. R. AYLWARD: (Inaudible).

MR. ROBERTS: I'm sorry?

MR. R. AYLWARD: (Inaudible).

MR. ROBERTS: I would say to my hon. friend from Kilbride that if he had as much genius and wisdom and compassion and understanding and courage and knowledge and intelligence and integrity in all of him as my friend for Port de Grave has in his little finger, the hon. gentleman would have trebled his complement of all of those things.

Mr. Speaker, next week we shall be carrying on, in the first place, with Bill No. 30, the one we have just been debating. We will then go on. My friend, the Minister of Health, will be asking the House to deal with - there are four bills, I believe, standing in his name. They are Bills, 33, 38, 46 and 40. We will carry on from there.

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