December 9, 1992              HOUSE OF ASSEMBLY PROCEEDINGS          Vol. XLI  No. 81

The House met at 2:00 p.m.

MR. SPEAKER (Lush): Order, please!

Oral Questions

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

MR. SIMMS: Mr. Speaker, I have a question today for the acting Minister of Health, since the minister is not here, I am not sure who it is I presume it is the Minister of Education maybe, in any event I will ask the question. If you look at the Budget documents both the ones presented in March by the government and the mini-Budget, supplementary documents attached, you will see that the net expenditure projected in March versus the net expenditure projected now in the mini-Budget, that the Minister of Finance tabled last Friday, indicates that the government expects to achieve net current account savings of $6.5 million from the health care budget and that is only for the balance of this year which is now less than four months, which would amount to an annualized cut of in excess of $25 million. I would like to ask the acting Minister of Health where on earth in the health care system does the government expect to find such substantial savings in the next three-and-a-half months?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, the Minister of Health is around the building somewhere and he will be in shortly and I have no doubt he will provide the details. The Leader of the Opposition is quite correct, the total amount spent on current account in this fiscal year will be less than we budgeted last year. That is the level of the achievement that it took to address this problem, so he is quite correct and there will be that reduction that he talked about in the health care sector. The minister will be around shortly and rather than give less than full information I will wait until the minister comes and ask him to provide the details to the House.

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

MR. WINDSOR: Mr. Speaker, in the absence of the Minister of Finance perhaps I could address the questions to the Premier. The minister's recent financial statement makes great reference to a firm commitment on behalf of the government to the strategic economic plan and indeed, the Premier I believe had some meetings with the Prime Minister a week or so ago in which both first minister's confirmed such strategies and the federal minister in fact confirmed his commitment to the federal prosperity initiatives, I believe they call it.

Now, Mr. Speaker, we saw the federal minister in his budget come down with some measures to control spending without raising taxes that was the general thrust that the federal minister put forward in his document. We saw him in spite of that statement, put forward $500 million in capital expenditures, major capital initiatives, part of which Newfoundland will benefit from and some incentives for business, Mr. Speaker, which I think are even more significant, investment tax credits, flow through shares to certain corporations, ability to invest RRSP's into new housing, research and development tax improvements, about $400 million worth in fact and significant PIT reductions for this year. In contrast to that the provincial government has drastically increased taxes and provided no incentives of any significance to industry this year, how does the minister justify the two statements of commitment to strategic economic development and yet complete reversal of direction as it relates to stimulating industry and taxing the people?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: I thank the hon. member for lobbing that nice gentle one at me, because it is fairly gentle. In fact, you see, he has misrepresented the position or misunderstood, I do not know which. The Province will be supporting the federal government to a fairly significant degree in the federal government's tax measures because do not forget our own tax rate applies after the taxable income is determined.

Now, some of the measures that the federal minister announced affects the determination of taxable income, so the same reduction of federal income tax that is achieved is also proportionately achieved by provincial income tax, I am sure the member understands that, and to the extent that the federal measures apply before determination of taxable income, then the provincial tax also makes a contribution.

Secondly, the Province, Mr. Speaker, did reduce corporate income tax from 17 per cent to 16 per cent. We did reduce manufacturing and processing tax, effective January 1, 1993. We did reduce manufacturing and processing income tax from 17 per cent to 7.5 per cent; we did cut the small business tax from 10 per cent to 5 per cent; we did provide that new jobs created by new businesses or additional jobs added to existing businesses during 1993 would not be subject to the payroll tax and the standard that we are applying is the same businesses that would be entitled to the federal ministers reduction in unemployment insurance premiums, would also be entitled to exemption from payroll tax charges during 1993, so the hon. member, with great respect to him is not accurate when he says: the two are different, going in opposite directions. They are going in precisely the same directions as far as stimulus to businesses is concerned.

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

MR. WINDSOR: Well, Mr. Speaker, the hon. Premier, with great respect to him is not accurate in his statements either I would suggest quite seriously, when he says that government has reduced certain taxes on corporations. All that government has done is, undo the tax increases that they have instituted since they became the government and put us back, in the case of the corporation tax, equivalent to Nova Scotia, finally, to be competitive, Mr. Speaker. The minimal benefits in payroll tax to new companies: first of all, how many new companies do we expect to start business this year, that will have a payroll greater than $100,000? Very few, so there will be no benefit there. How many companies will be increasing employment this year? Very few. In fact, they have laid off people because of the impact the payroll tax has had in the past. So there will be no benefit from increased employment because they do not have the money to increase employment, Mr. Speaker.

There is indeed a great difference. Let me ask the Premier this: how does he justify this great thrust forward with the Strategic Economic Plan when his own budget for the Department of Industry and Technology - or whatever it's called this year -


MR. WINDSOR: Development! It's still Development in my mind. The Department of Industry and Technology this year has been cut, the current account, by $3.4 million for the balance of the year. Realising that there's only one-third of the year left, that amounts to something like $12 million on an annualized basis, or 33 per cent of the budget that was left for the rest of the year. Does that represent a commitment to a strategic economic plan?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, I'll answer the first question that he raised that was really in the form of a statement to correct him and say he's dead wrong. The tax was reduced from 17 per cent to 7.5 per cent on manufacturing and processing. Now when did the former government ever have 7.5 per cent corporate tax on the manufacturing and processing sector? When? Anybody know? Never.

The small business tax was cut from 10 per cent to 5 per cent.

MR. SIMMS: Like we've been asking you to do for two years.

PREMIER WELLS: They read it in the Strategic Economic Plan and ran out and proclaimed it to all the world! The only difference is, Mr. Speaker, they were plagiarists. They wouldn't admit the original authors were over here. They plagiarized it out of the Strategic Economic Plan.

Now, have no doubt either that the federal Minister of Finance decreased the tax that he originally increased at one time too. So there's no difference. We're operating in the same direction with the same objective at the same time. So there is no difference.

The other question that he asked was how does the Minister of Industry, Trade and Technology expect to be able to perform adequately with this reduction in the budget? Now I'll let the minister answer that part of the question. He's here, he's more able to do it than I am.

MR. SPEAKER: The hon. the Minister of Industry, Trade and Technology.

MR. FUREY: Mr. Speaker, like all other departments we took a 1 per cent reduction in our salary budget and a 3 per cent reduction on operations. We also went back inside our department - not just our department - I can tell the hon. House that we also went inside Enterprise Newfoundland, inside the Economic Recovery Commission, and every agency that reports -

MS. VERGE: (Inaudible) when you got inside there?

MR. FUREY: I beg your pardon?

MS. VERGE: Did you get a fright when you got inside Enterprise Newfoundland?

MR. FUREY: Mr. Speaker, as I was saying, we did everything that was necessary to trim the budgets and bring them in line with the requests of the Minister of Finance to deal with this very serious problem. In fact, we went back and had a second cut at it, Mr. Speaker. Because, in reality, nobody likes to cut budgets, but when you are faced with these very difficult problems you have to deal with that which is before you. We went inside and found further savings by restricting consultants, by restricting dollars that we would pay out, for example, for advertising. There was $30,000 left in the budget to promote enterprise in the newspapers of our Province and we withdrew that, as an example. We tried to do it in areas that would have the least effect on businesses, Mr. Speaker, and I think we have been very successful.

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

MR. WINDSOR: Mr. Speaker, I will first of all deal with the Premier's statement as it relates to corporate taxes. The minister yesterday told us that the net impact would be a $10 million decrease in taxes to corporations, at the same time that there is a $100 million increase in other taxes throughout the Province, so that is no way to stimulate the economy. Let me ask the Minister of Industry, Trade and Technology if reducing his capital budget by $5.6 million for the balance of this fiscal year - which is a 56 per cent decrease on an annualized basis - is his concept of how Enterprise Newfoundland and the Economic Recovery Commission are supposed to be helping private enterprise?

MR. SPEAKER: The hon. the Minister of Industry, Trade and Technology.

MR. FUREY: I think the hon. member is engaging in selective amnesia. If he were being honest with himself in the House he would also look at the record of this government with respect to federal/provincial agreements, and we have been very successful in that regard. He doesn't rise in his place and talk about the Strategic Industrial and Investment Development Agreement, a $30-million agreement into which this government puts 30 per cent for the next four years to stimulate large corporate investment, to track down companies from around the country and around the world to come and invest here.

AN HON. MEMBER: (Inaudible).

MR. FUREY: Well, it is $30 million and the hon. member decides to ignore it. He doesn't talk about the good track record of the $29 million Rural Development Agreement that this government signed, or the $8 million ACOA Enterprise network which links every single small businessman irrespective of geography in this Province on the electronic highway that this government put in place, Mr. Speaker. He doesn't talk about the new Tourism agreement which has $21 million to flow over the next four years. So, Mr. Speaker, do not engage in selective amnesia, talk about the full record.

AN HON. MEMBER: (Inaudible).

MR. FUREY: Yes, we are going through tough times, yes, we are trimming our budgets, yes, we are cutting back, and yes, we are trying to del with a very difficult problem. But, Mr. Speaker, you cannot have it both ways, you cannot be schizophrenic on this. You cannot say you have to deal with this major deficit problem with the left hand and then with the right hand say everything that you have done is foolishness and stupid. Of course, there are tough decisions, of course, it was painful, of course, it was difficult, but as the Premier rightly points out, we aimed this Budget directly at small businesses to give them breaks, right across the Province.

SOME HON. MEMBERS: Hear, hear!

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

MR. SIMMS: Mr. Speaker, I held off on my line of questioning because I assumed the Premier said the Minister of Health was coming - but there is no sign of him, half of Question Period is gone, and I am not sure if he would know the answers to these questions. That is why I asked the Acting Minister of Health, who I assume is the Minister of Education. I do not know who the Acting Minister of Health is, but I want to pursue some questions along the lines of health care cuts.

Can the acting minister confirm that some hospitals have already told the minister's department, in response to the requests that went out from the government several weeks ago, that they will, indeed, have to take some drastic measures to save the amount of money that the government has asked for, because they have already spent more than three-quarters of their budgets?

Can he confirm to this House that a number of these hospitals have, in fact, told the government that some of the things they would have to do in order to reach these serious cuts would be things like reducing outpatient clinics, closing operating rooms for periods of time, performing only emergency surgery, and not replacing hospital workers who are off on sick leave and annual leave? Are those the kinds of things that the minister's department has been told?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, I have checked. The Minister of Health will be here in the House at 4:00 p.m. He is unavailable until 4:00 p.m.

I will ask the Minister of Health to provide full detail tomorrow of where the expenditure cuts are expected to be achieved. I can say to him generally that I know that during Christmas and sometimes in the summer, there is a slowdown in activity. If you extend that two days at the beginning and two days at the end, you add a week of slowdown to that period and that will also effect some savings.

I am not aware, personally, of any of the kinds of suggestions that the hon. member is now making. The Minister of Health will be able to provide the detail when he arrives at 4:00 p.m.

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

MR. SIMMS: A supplementary, Mr. Speaker.

I take the Premier's word that he will instruct the Minister of Health to provide the House with some information tomorrow as to where they expect to find these savings.

While he is at it, would he also tell us, or can he confirm for us, or at least, provide the information to us, that hospitals and nursing homes have been told that the cuts to their budget this year will continue over into the 1993-94 fiscal year? I believe that is the fact the Minister of Finance has already referred to.

We want to know: Does that mean that the cut in the health care budgets for 1993 would be the annualized amount that I suggested earlier in my initial question, you know, comparable to what is required for the balance of this year, the annualized expenditure would be somewhere in the area of $25 million, or in excess thereof? Will he be able to confirm for us tomorrow that is what they are looking at, as well, for next year?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: The Minister of Health will be able to advise the House specifically on those points. I can say to him from my own knowledge that generally, in terms of all of the areas where there was expenditure restraint, some of them were one-time expenditures, but others will, indeed, carry on into next year and will, in effect, be multiplied by a factor of four. That is quite correct. But some of them, of the total amount of $55 million that were expenditure cuts from the total $75 million we addressed, there was $11 million in tax and another $9 million or so in other one-time revenues. The $11 million in tax will have a multiple and will multiply up to $44 million or $45 million. Some, but not all, of the $55 million in expenditure cuts will also continue on into next year, but some are one-time expenditure cuts.

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

MR. SIMMS: Mr. Speaker, just one final supplementary, to which the Premier may or may not know the answer. If he doesn't, I hope he will ask the Minister of Health to provide the information to the House.

In addition to the 3 per cent in operating grants and the 1 per cent savings in salaries that agencies, and hospitals in this case that I am talking about, have been asked to save, can the Premier confirm that the government now has also asked to take $1.5 million from the capital budget of the Department of Health in the remaining three-and-a-half months or so? That is a pretty hefty amount of money to be taken, in the remaining three months of the fiscal year, from capital.

Specifically, we would like to know, first, if he can confirm it; secondly, does that mean, if it is true, that construction could be delayed on some health care projects that are already under way around the Province; and thirdly, would it have any effect on design work and planning, announced back in October by the Minister of Finance, to clinics and extensions and new hospitals? Would it have any effect on any of that, if, in fact, it is true?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, I can get the specifics, but I can also say that due partly to efforts to restraint expenditures this year and so reduce our overall borrowing requirements, the capital expenditure will be down by, I think, about $25 million. Now, it may well be that there is $1.5 million of that that is in health. I don't think any specific portion of it came about as a result of what we have done in the last three or four weeks. I think that may have been there anyway, but I will get the minister to confirm that.

My best recollection is that there was no restraint applied to the planning that is being done for the additional hospital facilities that the minister announced some weeks ago, that that is continuing. I don't expect it will have any direct impact on the capital expenditures for medical facilities that was planned for next year, but again I will ask the minister to provide full details.

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

MR. PARSONS: Thank you, Mr. Speaker. My question is to the Premier.

Three-and-a-half years ago the Premier established the ERC - the Economic Recovery Commission. Today our economy is in a desperate state and this commission has served no useful purpose. Would the Premier abolish the costly ERC?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: If the premises were correct I would certainly consider it, but we announced the establishment of the ERC to do some thinking and planning, and planning the orderly development of our economy, and develop initiatives for economic development in a planned and organized and orderly basis instead of the helter-skelter, ad hoc basis of the former administration, because that had proven to be an absolute disaster. So we wanted to do things on a planned and orderly basis.

Now, Mr. Speaker, members can go back and look at my statements in the House and they will see warnings: Do not expect it to produce results tomorrow. It takes time. It take effort. The first period will be planning and organizing.

Now this costly and expensive organization has four commissioners; we should have five - there are four, and it has twelve direct employees. It is doing a good deal of excellent work in planning and organizing, developing initiatives and so on.

As a matter of fact I just recently read a speech that was delivered by the chairman of the commission to, I believe, the St. John's Board of Trade. I will get it. Maybe we should have it published. Maybe we should go through a bit of expense to have it published, because it is a first-rate explanation of what the commission is doing and its real value, particularly from a point of view of changing from running around like a chicken with your head cut off, to operating in an orderly, planned, and organized way. That is the difference in the approach, and that comes from the Economic Recovery Commission.

The major thing they are doing for us right now is an assessment of an income support program on a long-term basis, and working with the federal government on that. I am looking forward to that report probably around March some time I hope.

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

MR. PARSONS: Mr. Speaker, the Premier asked for time for those people to do their work. Certainly three-and-a-half years is a lengthy period of time as far as Newfoundlanders and Labradorians are concerned.

I want to ask the Premier: Will he confirm that the Economic Recovery Commission cost the taxpayers of this Province $2,542,672 last year?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: I will get the precise figures, and I suggest to the hon. member that the figure is probably getting pretty close to about correct. It is probably about $500,000 less than the original budget that we had projected, because we operated on a cautious and a controlled way; but I will get that figure and confirm it to the House.

I think I will also get the chairman's speech published. The minister has probably read it, too. It gives a pretty good explanation and the people of the Province should know it and should hear it.

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

MR. PARSONS: Mr. Speaker, I think that Dr. House wrote some sort of a statement about six years ago, but it certainly has no implications today when we see the situation this Province is in.

I want to ask the Premier: Does he really believe that this money is wasted, when health and education are being cut, income tax going up in leaps and bounds, and what they were supposed to cure - unemployment - is now at 22 per cent? Does the Premier think that this money could be better spent and for better use for the people of Newfoundland and Labrador?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, we are losing $49 million in equalization this year. Why? Because the impact of the recession on the economy of this Province has been less severe proportionately than the impact on Ontario and Alberta. Now that is true. The figures are there.

In 1991 of the total employment lost in the country, 63 per cent was in Ontario. Those aren't my figures, they're Statistics Canada figures. Of the total employment lost in the country in 1991, 1.5 per cent was Newfoundland, and we had 1.7 per cent of the work force.

Now I don't know specifically -

SOME HON. MEMBERS: (Inaudible)!

PREMIER WELLS: You can tell when the truth starts to cut them. They make all this great noise to prevent it from coming out. I don't know, Mr. Speaker, specifically, how much of that is attributable to the efforts of the Economic Recovery Commission. I don't know how much. It's impossible for anybody to say. But certainly they didn't cause it any harm. Mr. Speaker, it's probable they also had a significant and valuable contribution. But I'll let the report and the speech speak for itself. They have made a valuable contribution. It was never expected that they would head off the national economic recession in Newfoundland and Labrador. They were not designed to do that. They weren't expected to do it. It's wrong to present it as such.

MS. VERGE: (Inaudible)?

MR. SPEAKER: A supplementary, the hon. the Member for St. John's East Extern.

MR. PARSONS: Final supplementary, Mr. Speaker. If the Premier can see what this Commission has done then he has the best vision in this Province.

MS. VERGE: The emperor has no clothes.

MR. PARSONS: Mr. Speaker, I want to ask the Premier also: will he confirm that Enterprise Newfoundland and Labrador, ENL, could do most of what the Economic Recovery Commission was supposed to do? If so, I ask the Premier again - because of what it is costing Newfoundland and Labrador - to rise to his feet and say: yes, he will abolish this monstrosity.

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, that's one of the great achievements of the Economic Recovery Commission, the creation and resuscitation of ENL. Which was the old moribund NLDC.

SOME HON. MEMBERS: (Inaudible)!

PREMIER WELLS: The Newfoundland and Labrador Development Corporation. That was moribund, achieving nothing, wasting vast sums of money. The primary task we gave the ERC was to resuscitate it and give it some life, and give it some focus, and ensure that it could do the job properly for the people of this Province. Ensure that it simply wasn't a group looking at one another in an office in St. John's. To ensure that it was distributed around the Province, bringing financial help and advice to the people of this Province where it was needed. That's what the ERC achieved with ENL. It's now a proper and properly functioning agency achieving its objective instead of a moribund group wasting money sitting in St. John's.

SOME HON. MEMBERS: Hear, hear!

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

MR. HARRIS: Thank you, Mr. Speaker. My question is for the Premier and concerns the hearings on the North American Free Trade Agreement, which has been called the economic constitution of Canada. The House of Commons committee just ended the scheduled hearings in Quebec City, hearings in five cities excluding Newfoundland and four other provinces. I want to ask the Premier what efforts his government has made to attempt to have the people of Newfoundland and Labrador have their say and have hearings come into Newfoundland to discuss this very important free trade agreement? What efforts did this government make? I know the Liberals and the Conservatives in the House of Commons refused to allow extended hearings across the country. I wonder what efforts his government made to make sure that all Newfoundlanders and Labradorians had an opportunity to have a say on this very important document and agreement.

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: If the hon. member describes NAFTA as the economic constitution of Canada, he's got a funny concept of the economic constitution of Canada. It's a trade arrangement between three countries - Canada, the United States and Mexico. It deals with the running of trade and the international relationship between those countries in the conduct of trade, and is in no measure the economic constitution of the country.

I know what his particular political party thinks of NAFTA. I know what they thought of the free trade agreement. I know what they think of free trade generally. But, Mr. Speaker, while I'm no fan of the US/Canada free trade agreement as it has been put in place, I basically support the concept of free trade. We will all benefit by the concept of freer trade and by implementing freer trade, but that particular free trade agreement that was entered into with the United States is very unfair in terms of the extent to which the United States retained its ability to impose duties and tariffs to protect their own industry against Canada.

Now, Mr. Speaker, having entered into that agreement with the United States, and the United States having started discussions with Mexico to enter into a free trade agreement with Mexico, I say to you, Canada has no alternative but to do one of two things, either terminate the US Free Trade Agreement immediately or, participate with the United States in the North American Free Trade Agreement, otherwise it is going to do immense harm to Newfoundland and Labrador and, Mr. Speaker, I can only say to you that, in the circumstances where we are party to the US/Canada Free Trade Agreement, we have no alternative but to join with the US in working out this free trade agreement with the United States. It is essential otherwise we will really be left out in the cold.

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

MR. HARRIS: Thank you, Mr. Speaker.

The Premier knows that the NDP along with other parties agree with freer trade but that it ought to be managed. Now, Mr. Speaker, the Premier says it has nothing to do with the economic constitution of Canada or the Constitution in general, but he knows that the free trade agreement with both the Americans and NAFTA, will place restrictions on the ability of governments in Canada, including this government, to take actions to protect its own citizens, so in that respect it is, as the Premier says, capable of causing immense harm to the ability of this government to carry out its responsibilities to its citizens. So I ask him once again, why is he and his government not taking the same position with respect to the citizens' of this Provinces right to participate in, to know fully the consequences of and to have access to this agreement and to be able to make comments on it just as it did or he did and the government did on the Constitution of Canada and the amendments thereto? Why is he standing to one side and allowing our economic future to be dictated by somebody else making the agreements with the Americans and the Mexicans?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, my quarrel was with the hon. member's description of it as: 'the economic constitution'; it is not the economic constitution, it has a significant impact so let us not treat it as though we are dealing with the Constitution of the country and put it in the same classification. That is a misrepresentation.

Now, Mr. Speaker, the Minister of Industry, Trade and Technology, has been a participant in all of the discussions and has been fully briefed on the process. Mr. Speaker, if there are people in the Province, and we have not received a request from one single group in the Province who wants to make representation or wants the committee to come to Newfoundland, if there are significant numbers of groups or people in the Province who want the committee to come, I will certainly take steps to do it. Rather than put the national government through the expense of bringing the whole committee down here to hear the minister, we sent the minister to make direct representations.

MR. SPEAKER: Order, please!

The Chair was about to remind the Premier that Question Period had expired. The Chair was a little bit close to the time when it allowed the Member for St. John's East to ask his question, his question was rather lengthy, so I had to give the Premier a little extra time in answering, but we have gone over the time today.


Orders of the Day?

MR. SMALL: Mr. Speaker.

MR. SPEAKER: I am sorry! If you will allow the Chair to go back to Petitions. The Chair had called Petitions, but went on to Orders of the Day. Back to Petitions.


MR. SPEAKER: The hon. the member for Baie Verte - White Bay.

MR. SMALL: Mr. Speaker, I rise today to present a petition on behalf of the people of Great Harbour Deep. This petition is not addressed to the House of Assembly, it is addressed to the Government of Newfoundland and Labrador. I ask leave to present this.

MR. SPEAKER: Order, please!

I ask the hon. member to take his place, please.

Again, the Chair will not be accepting petitions that are not done in the proper fashion. But, as always, if the House allows the hon. member - I have not seen the petition but, as to whether I will accept one the hon. members says is not in its proper form, in that instance the Chair says no.

MR. ROBERTS: Mr. Speaker, for those of us on this side, all I can say is I have seen the petition. It is not a letter, which is the objection. I hear what Your Honour says, but I think my view is well known that what we need to do is to regularize what has become a very irregular procedure. Given the way we have been giving leave to everybody else, I certainly suggest we should hear the hon. gentleman on this petition.

MR. R. AYLWARD: Not everybody.

MR. ROBERTS: I have been prepared to give leave to anybody who has extended me the courtesy, as the hon. gentleman from Baie Verte - White Bay has done, of showing me the petition. The hon. member for Kilbride didn't show me the courtesy anymore than he doesn't show the courtesy of letting me speak -

MR. R. AYLWARD: (Inaudible) a $10,000 cheque.

MR. SPEAKER: Order, please!

MR. ROBERTS: - anymore than he doesn't show the courtesy of letting me speak without interrupting me rudely.

Now, Mr. Speaker, for those of us on this side, we would be more than willing to give leave to allow the hon. gentleman to present the petition.

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

MR. HARRIS: Mr. Speaker, I have been one who has been denied leave on a number of occasions in the House, but on this particular occasion I would like to give leave to the people of Harbour Deep to have their petition presented by the member for Baie Verte - White Bay.

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

MR. MATTHEWS: Thank you, Mr. Speaker.

We have no problem, either, giving leave to the hon. member. We haven't seen a copy of what he has, but we are not going to be that sticky, that I am going to insist, as Opposition House Leader, that I see what hon. gentlemen have before I give leave for them to give petitions. I mean, I am not as sanctimonious as that.

SOME HON. MEMBERS: Hear, hear!

MR. MATTHEWS: I don't want to see it.

Mr. Speaker, that brings me to make another point, there was a rules committee, I think chaired by the Minister of Culture and Tourism, and there are new rules waiting to be implemented for the running of this Legislature. My understanding is that petitions are covered in that.

MR. SIMMS: Yes, I think they were.

MR. MATTHEWS: So, why don't we get on with implementing the new rules, Mr. Speaker, as the former Government House Leader talked about doing? Why don't we implement that? We struck a committee that went about the country and did work, and they have been sitting on these new rules now for months. Why don't we implement them? But we give leave to the member to present his petition.

MR. SPEAKER: Order, please!

As all hon. members know, the Chair operates under the present rules and the Chair is just telling hon. members that we have a procedure for presenting petitions, and the Chair's responsibility is to follow the position. If hon. members say it is fine, well then the Chair has no choice naturally.

By agreement, the hon. the member for Baie Verte - White Bay.

MR. SMALL: Mr. Speaker, I have had this petition for a few days now, and I have shown it to the Liberal House Leader.

AN HON. MEMBER: The Liberal House Leader?

MS. VERGE: He is not very liberal. That is the problem.

MR. SMALL: It is very interesting that this is going to cause a controversy today at a time when the people from Harbour Deep, I guess, were nailing me for not addressing their concerns.

So the prayer of our petition says: We, the undersigned, petition the Government of Newfoundland and Labrador to construct a road connection between Great Harbour Deep and the Province's road system. We think that the construction of this road would be beneficial to the people of Great Harbour Deep for the following reasons:

Now, there are a whole list of reasons. I would like to just start by saying that, I guess, ever since Newfoundland joined Confederation, the people of Great Harbour Deep have been asking for a road connection and I am sure every representative that they have had in the House of Assembly have promised that they would build a road for the people of Harbour Deep. Last Fall during the election, I promised that I would do my upmost to see if we could get a road for Great Harbour Deep. I would like to go on and talk about some of the reasons why they think they should have a road. Harbour Deep borders a large area of black spruce timber which has not been harvested for years and years. When we see black spruce timber being brought over from Prince Edward Island to Stephenville I think they have a good case.

Better access to employment available within their community: People of Harbour Deep have been hit double fold over this last year. They lost their salmon fishery and right on the heels of that there was a moratorium put on our codfishery and that is the only two ways the people of Harbour Deep have to earn a dollar and I guess they are the only community all along the northeast coast of Newfoundland that is isolated.

Another thing, they need better access to high schools for their children. There is no high school in Great Harbour Deep and they have to scatter out all along the northeast coast, some of the kids go down to Englee, some up to Jackson's Arm to live with their relatives and because they are getting a very small bursary to look after them, this is why they think they should have a highway so their kids can visit home every now and then.

Local and regional tourism: Harbour Deep has a scheduled salmon river, it runs right out into the community and I think if there was a road there, it would mean that more tourism would be going on in Harbour Deep. Most of all, I guess, their service with a ferry from Jackson's Arm, which costs the federal government a considerable amount of money and it also costs our Newfoundland government a considerable amount of money Winter time because there is an air service that goes into Harbour Deep and it is subsidised, so this would be another means of saving money.

Also, there is a food airlift subsidiary to Great Harbour Deep. I am sure there is a great cost involved in that but in this day I do not think we should have a group of people that are isolated. I think there should be a road built to Harbour Deep, it would increase the employment for the people and have access to a vast area. It is going to cost a lot of money to build a road to Harbour Deep. It can either connect with the hydro project in Cat Arm, it could go across the country to Hawkes Bay or it could go to Englee. I guess that is something that is going to have to be looked at, so I ask this House of Assembly today to give full support to the people of Great Harbour Deep, thank you.

SOME HON. MEMBERS: Hear, hear!

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

MR. WOODFORD: Mr. Speaker, I would like to take a few minutes to respond to the hon. Member for Baie Verte - White Bay on his petition concerning the people of Great Harbour Deep in their quest to try to get a road to their community. This is not something new as I think the member stated in his comments to the petition. It is not something new, it has been ongoing now for some number of years. In fact between 1985 and 1989, I had some correspondence, and some meetings, two meetings in particular personally with, I think it was with the White Bay South Development Committee in Pollards Point. They held an economic conference in Sops Arm - Pollards Point in 1986 and that subject was brought up. At that time if I am not mistaken I think a figure of something like $14.5 million was mentioned as the cost to put in the road. They were talking about the Cat Arm road, a point on the Cat Arm road and Great Harbour Deep.

At that time I had to be honest with the people of Harbour Deep and the representative there at that particular time in saying that the road from the Trans-Canada to Jackson's Arm was not done at that time. It was almost, I suppose, inaccessible, really because it was a very poor dirt road. I was honest and above board with them and told them at that time that unless some federal funding could be found I could not justify having anything to do with that access. In those three or four years the road between the Trans-Canada and Jackson's Arm was completed, fully upgraded and paved, and now the people in that area are fairly well serviced no doubt. This has come to light again in the last little while. The member mentioned the fact that it would open up vast timber stands. It is true, it will open up vast timber stands. You cannot just say timber stands, Mr. Speaker, but timber stands that paper companies in the Province today are looking for. They are look for Black Spruce, they are looking for Spruce. That is where the fibre is that especially the mills in Stephenville and Grand Falls need in order to put out the top quality paper they are putting out today. That is one reason why the road should be opened up sometime in the near future. The other is to give people access, whether they go north or whether they come south to Jackson's Arm, or wherever, it will give them access, and the monies that would be spent on the ferry, I just forget what it is a year now, the monies that are spent on the ferry system there could be put towards the road. Now, that is an ongoing expense, it is an expense to the people there to have stuff brought down by ferry from Jackson's Arm to Harbour Deep.

Tourism is another big factor, and that is being taken advantage of now by several people, especially with cabins and operating skidoos on what they call adventure tourism in that particular area. That is being taken advantage of now, especially the skidoo and adventure part of it. The hydro sites on Cat Arm, there are two or three other developments there now that would dictate, I suppose, a better economic situation for the particular area. I would sort of go along with the hon. gentleman for Baie Verte - White Bay and try to help out in some way to have funds made available, especially for a feasibility study. I think there should be a feasibility study done without delay on what that would mean to the people of Harbour Deep and the whole White Bay area in general with regards to the economic nature of that particular project.

Mr. Speaker, without anything further to say I support the member in his request for that funding, whether it is provincial or federal.

Thank you.

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

MR. ROBERTS: Mr. Speaker, may I say just a few word in support of the petition which my friend presented so eloquently. I know the member wants to speak but I used to represent Harbour Deep many years ago and I have this deep affectionate link for it.

SOME HON. MEMBERS: Hear, hear!

MR. ROBERTS: Many years ago when I was even younger than the hon. the Leader of the Opposition, Mr. Speaker, I represented Harbour Deep. They are great people.

AN HON. MEMBER: (Inaudible)

MR. ROBERTS: He does not represent them now either. Well, then all you have to do is give him leave and we will let him.


MR. ROBERTS: Mr. Speaker, if I may, having been recognized, I would like the courtesy that I propose shortly to extend even to the gentleman for Mount Pearl, to allow him to speak in silence, to misquote the old saying.

Mr. Speaker, what I wanted to say was that I would like to support this petition. I do not know whether the government can do it or not. My colleague will address that.


MR. ROBERTS: Mr. Speaker, as far as I know the rules of the House allow any member who is recognized to speak. The hon. lady for Humber East I know knows nothing of the rules but must she prove it time and time again here in the House? The rules allow anybody who is recognized by the Chair to speak. All I want to do is say a few words in support of the petition which my friend presented so very well. I hope the prayer can be granted. The people in Harbour Deep are great people. Many of them were friends of mine for years and are friends now. They did me the kindness to vote for me twice overwhelmingly, and they voted for my friend who now sits for Twillingate overwhelmingly. I want the message to go out to the people of Harbour Deep that if there is any group of men and women in this Province today who will do what they can for them, it is this government now.

So I stand simply to say I support the petition, and do it with a heart and a half, Mr. Speaker.

SOME HON. MEMBERS: (Inaudible).

MR. SPEAKER: Order, please!

The hon. member is not entitled to speak other than....

SOME HON. MEMBERS: (Inaudible)!

AN HON. MEMBER: By leave?

AN HON. MEMBER: No leave!

MR. SPEAKER: Pardon?

AN HON. MEMBER: (Inaudible).

MR. SPEAKER: Point of order?

The hon. the Minister of Works, Services and Transportation on a point of order.

MR. GOVER: Mr. Speaker, I'd like to request leave of the House to speak to the petition.

AN HON. MEMBER: No leave!

MR. SPEAKER: No leave.

MS. VERGE: Point of order, Mr. Speaker.

MR. SPEAKER: The hon. the Member for Humber East on a point of order.

MS. VERGE: Thank you, Mr. Speaker. Perhaps you could advise the Government House Leader that this House operates under Beauchesne's rules, not Roberts' rules.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Government House Leader to that point of order.

MR. ROBERTS: Mr. Speaker, to that point of order. If the hon. lady could take the trouble to read our rules she will find Standing Order 1, that our rules prevail in this House, not Beauchesne, and above all, we're not on the verge of disaster, which is where she'd have us.

MR. SPEAKER: Order, please!

I'd just point out to hon. members for further clarification our Standing Orders with respect to petitions, page 31, Clause 92.1 says: "In addition to the member presenting a petition only two other members, one each from both sides of the House, may speak to a petition...." So it doesn't say what positions they hold, it just specifically says the numbers of people. That's what happened today.

MR. ROBERTS: Now, Mr. Speaker, Order 11, if you're going to call Orders of the Day. Motion 11, I'm sorry. The hon. gentleman for Mount Pearl, who will be heard I would hope with all the courtesy he doesn't extend to us.

Orders of the Day

Private Members' Day

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

MR. WINDSOR: Mr. Speaker, you may rest assured I will be heard and I don't need the Government House Leader's permission to do so.

MR. ROBERTS: I know you'll be heard, if only you would say something.

MR. WINDSOR: Mr. Speaker, the resolution before us today is a very general resolution....

SOME HON. MEMBERS: (Inaudible).

MR. SPEAKER: Order, please!

The hon. the Member for Mount Pearl.

MR. WINDSOR: It's a very general resolution, Mr. Speaker, dealing with the failure of this government to stimulate the economy, the negative impact that the policies of this government has had on the economy of this Province - particularly on unemployment in this Province - and the ability of private enterprise to work effectively within the economy of this Province.

It further states that the government has placed a tax burden on individuals and businesses which has been harmful to the economy; has failed to execute effective policies to stimulate the economy and decrease unemployment; and therefore resolves that in an attempt to stimulate the economy and create jobs government immediately take steps to reduce the level of taxation in the Province.

That's a very general and very broad statement, and a very broad resolution. I think it necessitates some debate as to the merits of them. It's made in the light and in full knowledge of the financial problems facing this particular Province and all of Canada at this point in time, and the negative impact that the recession has had on the economy of Newfoundland and Labrador in particular, and in Canada in general.

It's not meant to be an irresponsible statement, a motherhood statement as often is quoted, of simply saying: let's reduce taxes. I don't think there's anybody in this hon. House who would vote against a resolution that says we should reduce taxes. Nevertheless I don't expect hon. gentleman opposite to support this resolution, for obvious reasons. Because the government policy has been stated clearly in the Budget and in the infamous mini-Budget that was presented here last Friday.

Why would we make such a suggestion therefore? Recognising the financial problems with which the government is faced, we don't do it lightly. We do it in all seriousness. We have said many times in this House to this government that the way to stimulate the economy is through the private sector. Indeed the Premier, in his own words, was quoted in a recent newspaper article as stating that he would have to call on the private sector to help stimulate the economy. We would support that concept. That is exactly how we will, if we will at all, recover from the situation with which we're faced.

How do we propose to recover? How do we expect private enterprise to stimulate the economy if we put on them such a tax burden that they can't possibly hope to compete in what now is becoming a much more interprovincial economy? Just yesterday, I believe it was, the Minister of Industry, Trade and Technology and the Premier were at meetings dealing with further reductions of interprovincial trade barriers, as a means of reducing some of the prohibitions in Canada of trying to do business in other parts of Canada. And there is good and bad in that, we support it cautiously, but there can be a lot of good that takes place with it. But, Mr. Speaker, it can never work for Newfoundland as long as we have the disadvantages that we have in this Province. Hon. members will have heard me several times before talk about the natural, the inherent disadvantages that we have and I will deal with some of those.

But what I am concerned about today in this resolution, are the disadvantages that are placed on business by government. When you look at a comparison of taxes in this Province and our competitors - and let us first of all say, where are the competitors for Newfoundland and Labrador businesses? The big competitors in many areas - depending on the type of business, the big competition would obviously have to be the Atlantic Provinces, Nova Scotia, New Brunswick and Prince Edward Island. Well, let us have a look at the tax rates, Mr. Speaker.

The general corporate tax rate, this government has just now reduced the rate in Newfoundland from 17 per cent back to the 16 per cent, the level that it was in 1989 when they took office. Immediately in 1989, they increase by 1 per cent. They have now finally seen the error of that and reduced it back to 16 per cent. Prince Edward Island is still at 15 per cent, Nova Scotia is at 16 per cent and New Brunswick is up at 17 per cent. So New Brunswick now is slightly higher, but it shows the disadvantage that we have had as it relates to Nova Scotia, particularly, which is our biggest competitor.

The small business tax now has been reduced to 5 per cent. It has been at 10 per cent, it is now at 5 per cent; Prince Edward Island is at 10 per cent and will be going to 7.5 per cent in 1993; Nova Scotia is at 5 per cent and New Brunswick is at 9 per cent. So, from the small business tax point of view now, they have moved a little bit in the right direction and given us some advantage over Prince Edward Island, but only, still, equal to Nova Scotia. So we are now equal to Nova Scotia in both the corporate, the general and the small business tax.

Manufacturing and processing, we have now come down to 7.5 per cent, which used to be 17 per cent, so that is a great reduction on manufacturing and processing, a great reduction. It is too bad all our fish plants or most of our fish plants are cut down, because the majority of our processing in this Province is fish. Unfortunately, they are all shut down, but this will help fish plants if and when there are ever enough stocks available to reactivate some of those plants. We know a lot of them are still operating in various areas of the Province, so, admittedly, this is a benefit to them. I am not sure that it balances out the negative impact of the payroll tax though, we will have to look at that a little more carefully; but again, it only puts us on a level playing field with the other Atlantic Provinces.

The payroll tax, Mr. Speaker, is the obvious one, the 2 per cent on payroll, which bears no reference to profitability of a company. Again, let me use, for example, the impact on the fishing industry, Mr. Speaker, because it is on this industry, I think, that it has had the most devastating effect. Many, many fish plants in this Province have been operating in a loss position, yet they are a labour-intensive business, a labour-intensive industry. In other words, a very, very high percentage, a huge percentage of their overall gross revenue and expenditures are labour-oriented versus the oil and gas industry, which is a capital-intensive industry, where billions of dollars will be spent on machinery and equipment, the labour component being very, very small as compared to the fishing industry from a percentage point of view - in real dollars, obviously, very significant, but from a percentage point of view.

So when you take a fish processing plant that is losing money but has 400 or 500 employees - my friend from Lewisporte might relate to Comfort Cove. I think the plant, with up to 600 employees at peak time, in Comfort Cove, has been losing money constantly for the last three or four years and yet pays 2 per cent of its total payroll. Now, that gives it no credit for the fact that that company, however they manage to survive with the loss position, is able to create 600 jobs, and in thanks for creating 600 jobs, they get a penalty, a tax of 2 per cent of payroll, whereas down the street, Marine Atlantic, maybe employing two or three people, probably make a large profit - no they employ a lot more than that, but they could be making huge profits there. Marine Atlantic is not a good example, because they are subsidized and are not making a profit.

The point I am making is that it is a capital intensive business. So they may well be making huge profits, have small numbers of employees, and pay very small payroll tax - a very small payroll tax. So the payroll tax is clearly a disincentive to create employment.

As I explained, or tried to explain, briefly, during Question Period, the benefit of the recent mini-Budget which is to reduce payroll tax on new corporations - eliminate it for new companies, new small businesses in the first year - on the surface you say, 'Well, that is good. That gives them a chance to start out.' The Premier didn't mention the fact that the overall tax exemption for small businesses for three years, that they eliminated, was in place in 1989. Had they simply left things as they were, it would be a three-year tax holiday for small business. Now, the Premier is saying, 'What a great government we are because we are giving a one-year tax holiday on the payroll tax.'

Mr. Speaker, clearly that policy is negative to business and industry, and the payroll tax exemption for new employees for one year, while on the surface would appear to be good, just does not take account of the fact of how many employees were lost last year, how many were laid off because companies had to pay a payroll tax. Government ministers, the Minister of Education, in particular, will stand up and say, 'Complain all you want. We will not reinstate the school tax.' Well, maybe you should reinstate the school tax. The average employee paid $180 by way of a school tax. One hundred and eighty dollars is what the average person in this area paid. That same employee, if that employee is earning $30,000 the employer pays a school tax of $600. Either way, whether it is paid by the employee through a payroll deduction, or by the employer, it has an impact on the relationship, the salary relationship, between employee and employer, and it is more than triple what was being paid on behalf of that employee last year.

So to say that the payroll tax simply replaces the school tax is clearly not being truthful and it is a major disincentive to employment in this Province. Again, it doesn't matter if that company is losing money. The company may be losing money; the shareholders may be pumping in money during this recessionary period to keep their business operating, to try to keep their good, long-time, dedicated employees in place, to protect them and their families against job loss during a recession. Because they are doing that, putting more shareholders' money in it, or losing money as a company and going into debt, they get penalized for 2 per cent of the overall gross salary.

Mr. Speaker, we have said before and we say again, the payroll tax should be immediately eliminated. I recognize that the payroll tax brings in significant revenues for this government, but they can and should be replaced in other ways. If savings cannot be effected to balance that, then revenues can be found in other ways, and there are far less regressive ways of raising revenues.

Personal income tax - let's compare that. We are now at 69 per cent of the basic federal tax - 69 per cent. That is a 15 per cent increase in the provincial component of income tax since this government took office. We have gone from 60 per cent to 69 per cent - a 15 per cent increase. Now, that means a lot of money. To every member in this House it will probably mean close to $1,000 this year - probably close to $1,000 extra income tax each one of us will pay.

To the average family it has a significant impact. I can quote you some numbers that were provided by the minister's officials, Mr. Speaker: the average family with two people working, for example, would probably have a total family income of about $50,000; and today, $50,000 sounds like a lot of money, but for two people working, paying the expenses of working, perhaps paying daycare expenses and whatever, $50,000 is not an exorbitant amount of money. And they will pay almost $300 more this year - that is at the $50,000 level. As I said, at the $100,000 level - which is far more than members are making - but up at the $100,000 level, you are looking at a difference of over $1,000. That is even taking into account the fact that the federal component is decreasing by 1.5 per cent. So, at a time when the Federal Government is going ahead with their previously announced plan of reducing the federal income tax rate by 1.5 per cent, this government is raising the rate by 4.5 per cent. So, not only are we neutralizing the impact of the Federal Government reduction, we are increasing by an additional 3 per cent on top of that. So this government' tax will go up 4.5 per cent this year alone, as of January 1. What a lot of people do not realize - the minister stood in his place in the last few days and said: 'Oh, we are paying 67 per cent now, so it is only 2 per cent more, even though we are announcing 3 per cent; we are actually taxing you at 67 per cent now.' And that is true - that is what has been deducted over the last number of months. Because when the minister announced the 2.5 per cent increase some time ago - in his last Budget he announced 2.5 per cent for April 1, 1992. I think, actually, the income tax came in place in July 1, 1992, and he announced an extra 1.5 per cent on January 1. The minister, in his statement, said, We are announcing a 2.5 per cent increase over the whole year, but he only had six months to get it, so in order to get his 2.5 per cent, he had to increase the rate deducted by 5 per cent. So, whereas people thought that on July 1, income tax was increasing by 2.5 per cent, it was actually increasing by 5 per cent or, in other words, it was retroactive to January 1 of last year - the first time, I believe, that a personal income tax was raised retroactively, went back three months to January 1. So, it was, in fact, 5 per cent being collected. If there were no increase, that 97 per cent would have reduced back again to 95.5 per cent, but because of the additional increase here, now we are looking at 99 per cent, Mr. Speaker.

Now, Mr. Speaker, by comparison, Prince Edward Island is at 59.5, Nova Scotia is at 59.5, and New Brunswick is at 60. Now, what impact does that have on employers, Mr. Speaker, this is a personal income tax but an employer in attracting top qualified employees, has to look at an overhaul package. the employee will look at the overall package. If an employee having an opportunity in either Nova Scotia or Newfoundland is comparing the two, he or she is going to look at the overall cost of living and the benefit package that is being offered. Part of the benefit package is the salary and all of the benefits therein: Medical plans, dental plans, insurance plans, vacation benefits, sick leave benefits, and severance packages, all of the things that employees today must look at in comparing two potential positions. He will also look at the tax burden, provincial taxation and municipal taxation. He will look at the cost of housing, all of which is part of the cost of living. He will want to know, `What will it cost me for an equivalent standard of living in one province versus the other?' Right away he is looking at a 9 per cent, or greater, difference in the provincial tax component.

So, Mr. Speaker, that means that businesses in order to attract that employee, assuming all other things were equal which they probably are not, but assuming they were, business would have to pay that additional 9 per cent. Now, that is not 9 per cent of salary but the equivalent amount of tax that would be paid, that employee would want to recover in order to be treated equally.

So, Mr. Speaker, any way you cut it, that is a burden on business and industry in this Province. It is no wonder, Mr. Speaker, that we have gone over 20 per cent in our unemployment rate this year. It is no wonder, Mr. Speaker, so many companies are in financial difficulty, have gone bankrupt or are laying people off.

Now, we also have to recognize, as I have said many times before, that in doing business in Newfoundland and Labrador one of the major factors is the cost of transportation in many businesses. The cost of transportation is one of our natural disadvantages that I spoke about, as I began to speak. One of the natural disadvantages of doing business in Newfoundland is the cost of bringing goods into Newfoundland and Labrador. We know that most goods today are coming in by road, are being trucked. Outside of the fact that we have the tremendous cost of building and maintaining so many miles of highway, probably more miles per capita than any other province in Canada except for the Northern Territories and the Yukon - on a per capita basis, there are more miles of road per capita, I would suspect, in Newfoundland than probably any other Province of Canada. The cost of building those roads because of the geography of our Province, Mr. Speaker, is also extremely high in comparison to other parts of Canada. But the cost of operating vehicles and equipment on those highway is also very high.

In his recent statement, the minister has increased the tax on gasoline and diesel fuel by two cents per litre. Mr. Speaker, two cents per litre is an increase of 15 to 17 per cent, in that area. That, Mr. Speaker, is going to put an incredible burden on the trucking industry and the transportation industry in this Province. Again, it is another extraordinary cost of doing business in this Province. When you compare the price of diesel fuel -

MR. SPEAKER: Order, please!

The hon. member's time is up.

MR. WINDSOR: Just thirty seconds to clue up, if I may, Mr. Speaker.

It is 17.6 cents per litre in Newfoundland and 14.3 cents per litre in Nova Scotia. So we all know what has happened. There are truckers coming into this Province who are buying all their diesel fuel in other provinces and buying very little in this Province, even though they are doing business here.

Now, Mr. Speaker, I will get a chance to revisit some of these things when I close the debate a little later on, and I thank gentlemen opposite for leave.

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

SOME HON. MEMBERS: Hear, hear!

MR. EFFORD: Thank you, Mr. Speaker.

Mr. Speaker, I am going to take the opportunity to speak to this private member's resolution for a few minutes. I don't know if I am going to take up all the time that is allotted to private members on Wednesday afternoon, but there are a few points that I want to make. It has to do totally with the Province of Newfoundland and Labrador, the economy and the ever-increasing unemployment statistics. It's getting to the point, Mr. Speaker, where it's really getting to a state of desperation in this Province today. It didn't happen in the last six or eight weeks, it didn't happen in the last six or eight months. It's been building over the last number of years.

I think what we've done, we've reached such a peak today, and it's at the the present time that it's really starting to make everybody in the Province totally aware of the desperate state that Newfoundland and Labrador is in.

The one thing that I find most interesting is that we all seem to realize it at the same time and everybody all of a sudden has the correct answer to solve the problems. That's the reason why I wanted to use this opportunity. It's not very often that a private member gets the opportunity - it's only on Wednesday afternoon - and on such an important resolution as this I think it's important that we as private members be able to express our opinion on what we see as wrong in the Province, and what has been wrong for a great number of years.

You can't have an economy in the Province if you're totally dependent on the income from a government source. I think that's the real basis of our problem in this Province. The basis of the economy or the income, the jobs, the creation of jobs, is either dependent provincially or federally. So in other words it's pretty well on both forms of government. That's where our problem really begins and that's what really brings us to the situation we are in today.

Since 1949 governments have been trying to deal with the economy and the creation of jobs in the Province of Newfoundland and Labrador. That is a mistake. Governments cannot be the creator of jobs. They can show leadership in direction, but they cannot be the creator of jobs. Only in the most difficult economic times, temporarily, should government be involved. That should be only in the extreme. All we have to do is look at our community programs, both provincially and federally, in Newfoundland and Labrador, you can see exactly what I'm talking about.

In the last twenty years that I've been involved in politics, in just an executive position in my own district, up until 1985 I got elected to the House of Assembly to today, I've seen millions of dollars thrown away and thrown at people trying to get people to work, and trying to get people through difficult economic times. We're back at square one at the end of the day with very little done to the benefit of the long term. The short term, yes, but the long term, no.

Here we are, 1992, and this has been going on in the last twenty years at a rapid rate, but really since 1949. Let's take the last twenty, twenty-five years in particular. I don't remember back beyond that because I was too young to remember. Here we are, a resource rich province. If any other province or any other country in the world - and I always use the comparison to Japan. If Japan had the resources that we have around the Province of Newfoundland, or eastern Canada, not only in the fishery but in forestry and mining, we would not be a have-not province. We would be a have Province.

I'm not saying that very lightly. It is a fact. We have billions of dollars worth of resource swimming in our waters and everybody but Newfoundland is getting the advantage of it. Even today, with the desperate situation the stocks of fish off Newfoundland coasts, are in, still people around the world are reaping millions of dollars, and we are scratching, trying to find ten weeks or four weeks or two weeks to try to get someone UI benefits.

This is where the Province of Newfoundland and Labrador experiences a major problem. No business can operate unless it has a basis to form an income. If it doesn't have the income no business can succeed or flourish. Because a government is no different than a corporation. You must take in money and spend it out. In order to take in money it must be new dollars coming in. If it's just a circulation of its own money it's going to decrease until there's no more. That's basically what's happening.

In order to create new dollars you have to have an industry base. Now what do we have in Newfoundland for an industry base? First of all we have to look at our geography, and our geography dictates that we are not going to be an industrialized province like Ontario. We do not have the large forestry that British Columbia has. We do not have the wheat fields that the Prairie Provinces have. We do not have the industry base and technology that Quebec has; nor do we have the population; nor do we have the geography. But we do have resources, and we have always had the resources.

Now everybody will say that we cannot do anything about what we have because of the treaties and because of the federal government. Well then if we sit back in that mode of thought then we are going to remain as we are now, ever on into the future. We can criticize each other all we like. We talk about the debt. I know we all get political on both sides of the House, and I was in the opposition four years and I did the same thing that the opposition is doing today. We criticized the debt and the overspending. Even if you have a resource managed and it is bringing in dollars, you still have to administer it and manage the money properly or it will still be wasted.

Now what are we actually losing in tax dollars and job creation in the Province? In 1990 the foreign ships on the Grand Banks, outside the 200-mile limit, took 800 million pounds of fish - reportedly. My hon. friend from Ferryland will listen to what I am saying because he knows what I am saying is correct. His district, like my district, depends on what happens in the ocean, like most areas around Newfoundland. But think about it for a second - 800 million pounds of fish was taken by the foreign ships. That same year, FPI landed 200 million pounds and created 8,000 direct jobs. Think about it. A spin-off factor of 1.5 is another 12,000 jobs. In other words, FPI created 20,000 jobs by landing 200 million pounds of fish.

If the foreign fleets took 800 million pounds - and they reported that. I am not exaggerating that or making an assumption. They reported taking 800 million pounds. That leaves us with four times as many jobs that FPI created with 200 million pounds. Therefore, 80,000 seasonable jobs were lost through the foreign fishery in 1990. Now we are talking about jobs for the Province of Newfoundland and Labrador. We are talking now where we have probably 80,000 to 100,000 people unemployed, 20,000 fishermen out of work, on a social services package. That is all it is, a compensation package, and we are trying to come up with new ideas to create jobs. I just gave you an example where the foreign fleets, every single year, take 80,000 jobs from our shores.

Now I know I am not foolish enough to stand in the House of Assembly and say: Well we should have every fish that the foreign fleets are catching. That is silly; but if we only had 50 per cent - if we are stopped fishing, why are they not stopped fishing? If the cod stocks and the fish stocks are in trouble, and they are starting to be reduced to a non-manageable resource, why is it that we are the only ones who are stopped from working? Why are they still out there?

I just told you about outside the 200-mile limit. Let me give you an example, and I can see the great interest around the House of Assembly and everybody listening to figures. I can see everybody is interested, because we are talking some common sense for a change.

This came from the federal Department of Fisheries just two days ago, my hon. friend from Eagle River. We are saying there is no fish within the 200-mile limit. Well let me tell you what was given to the foreign countries in this year, 1992.

In 1992, 34,950 metric tons of fish were given to the foreign ships inside the 200-mile limit - 34,950. You are talking in excess of 70 million pounds of fish that was processed somewhere else in the world from inside the 200-mile limit, and here we are talking about nobody working, and we are talking about a new technology, a new industry, and all these new scientific ideas to create jobs in Newfoundland. We just gave away, this year, several thousand jobs that the foreign countries took forty-five miles off our coast, and processed in their own countries; and we are wondering why we have 80,000, 90,000, or 100,000 people unemployed in this Province. I will ask somebody the question. In the district of Port de Grave we have nine fish plants and I would trade those nine fish plants tomorrow, who employ 1700 people on a seasonal basis, and three on a full-time basis, if they will bring in 1700 permanent jobs in some industry other than the fishery in Port de Grave. Seventeen hundred jobs in the district of Port de Grave could be contributing towards the tax revenues that this government need to operate the Province. Let us talk about new industry. You tell me where we are going to get an industry that is going to create 1700 jobs, whether they be seasonal or permanent, in the district of Port de Grave. I am using that district as a example. Take any district in the Province of Newfoundland and Labrador and the same can be said.

Let us bring in new technology, let the Economic Recovery Commission bring in that type of technology to create those 1700 jobs and I will pat them on the back. Why is it that we have a resource and we are going looking for new ones that are not there? Why is it that we are so willing to give up what matters to this Province? I spoke about the seal problem in this House last week and I said in conclusion, in my last five or ten minutes, that after last Wednesday when I was finished it would be forgotten about. Sure, enough, there has not been a word about it since except that we got a picture of the IFAW sending a seal picture to a Newfoundlander, and it says: not guilty. That is the only thing it said, but we have eight million seals out in the water eating fish every day.

I said last week use the example of one pound of fish per seal per day, eight million pounds a day. How many jobs would that create? Excuse the language, but if they ate only a lousy pound of fish a day that is eight million pounds a day. And, it is not a problem? We do not want to upset anybody. That is a day. Now, if those nine fish plants in my district had those eight million pounds how many people would be working? They would not be out there today, as they were when I attended a social service appeal hearing this morning, begging for repairs to their stove or begging for food to go on their table. That is the position we are in. It is not that we do not have the resource, but it is that we are not utilizing the resource we have.

AN HON. MEMBER: About 800 jobs.

MR. EFFORD: At least 800 jobs and that is only one day. Multiply it by 365 days a year. We do have the resources but we are not using them. Any Minister of Finance knows exactly what I am saying is true. We are living in a dream world if we thing we are going to solve the economic problems without utilizing our resources to our best advantage. That is the point I am making, utilizing the resources we have to the best advantage of Canada, and we are a part of Canada, in this case our own stocks, our own resource adjacent to our shore. First for Newfoundlanders and second for everybody else, but because it is controlled by the federal government in Ottawa it is first for everybody else and last for Newfoundlanders, and there lies our problem.

MR. DUMARESQUE: And there is our native son, Crosbie.

MR. EFFORD: And as my friend for Eagle River just said, there goes our native son, Mr. Crosbie. He is right, because I have said 100 times in the past two years that foreign ships are fishing in our own waters inside the 200-mile limit. The Minister of Fisheries federally said: Efford, you are lying, you are misleading. He has said it 100 times. Now, this comes out from his own office. I did not print it. Eric Dunne, the Director General of Newfoundland Fisheries sent it out to my friend and colleague here for Eagle River. They are not my words, 34,000 metric tons inside the 200-mile limit. I was talking to a patrol officer the other day, one of the surveillance officers on one of the boats that go out to the Grand Banks, and he said that just three days ago there were more ships outside the 200-mile limit today than there has been in the last several years. Why? Because nobody else is fishing and they have it free and can take what they want.

AN HON. MEMBER: Do we have a Navy?

MR. EFFORD: Oh, yes, we had a Navy last year when the Navy chased the Newfoundland fishing boats. When the fishermen from Ferryland, from the Southern Shore, and the fishermen from Port de Grave were out fishing they arrested those guys. One young fellow from Fermeuse had 13,000 pound of fish and got a fine of $30,000 because he was trying to live and feed his family and the foreign ships were taking want they wanted.

AN HON. MEMBER: Are you going to defend them for it.

MR. EFFORD: Yes, I would love to have the opportunity. I would love to have the opportunity but you see, Mr. Speaker, at least I got the guts, at least I got the guts to try and I would not charge them the fees that you charge them. Yes, absolutely no fee, Mr. Speaker.

AN HON. MEMBER: Did you get your monies worth?

MR. EFFORD: I got satisfaction. But, Mr. Speaker, let us get back to the problem at hand. We do have a problem in Newfoundland and Labrador in jobs, and the creation of jobs and the wrong people are creating jobs or the responsibility is in the hands of the wrong people. No government can create jobs that are going to solve the financial problems of this Province. We have a debt in this Province that requires $585 plus million a year interest payments. Whether we believe it or not it is a fact of life and it is there and who caused it is not an issue today, the fact is, it is there. In order to pay that interest you have to have people working. People must be working and people must be paying taxes and if that is not done than we will never be out of the situation that the government was placed in just this past week of bringing down a mini-Budget.

We cannot do it in any other way but to utilize the resources that we have within the Province unless we have a magic tooth fairy somewhere that is going to bring in those other resources that we do not know anything about. This is 1992 and they are still not here, those jobs are still not here, Mr. Speaker. It was interesting, I was reading a book written in 1905, the Newfoundland Guide Book, and everything said in that book by D.W. Prowse, in relation to the problems in Newfoundland and the fishery and the jobs, is exactly still the same. The only difference was that England was sending - and the Spanish fishing ships were coming over and England was raping everything and the fish merchants were raping and cleaning out Newfoundland people, the only difference now is that it is done in a political forum. Ottawa is raping us because the best advantage of the trade relations between the larger provinces, Quebec and Ontario and British Columbia and the wheat farmers has been traded off and pawned off for Newfoundland. It is interesting, you should read this book, we picked this up at a flea market. That is where I got that book at a flea market, it is interesting but seriously -

MR. TOBIN: Do you go to flea markets?

MR. EFFORD: Why not, why not? The hon. Member for St. John's East does not realize the problems that people are having around the Province, financial problems, because he can collect his 30 per cent on the backs of somebody else. He does not realize the problems that people are having in this Province. I saw him last night on CBC talking about his court cases and the people he is representing trying to get a financial settlement. I wonder why he never said what he is going to get out of it.

AN HON. MEMBER: He earned it he should get it.

MR. EFFORD: Well then he should not be critical of other people in the Province doing without money and hungry and try to pay some contribution towards what the real problems in the Province are. Dammed if I will ever stand up and defend him or any lawyer. Mr. Speaker, the real fact is exactly what we see here today, very few people give a damn. Let me say those harsh words in this hon. House of Assembly, very few people give a damn. They can make fun but while they are making fun this Province is perishing. I think it is time for the people that have a responsibility and every member in this House of Assembly to realize that the fun and games are over. The fun and games are over in this Province. People are hungry and people are used to being given services -

MR. SPEAKER: Order, please!

The hon. members time is up.

MR. EFFORD: - and somebody better realize what is going to be done to replace those services. Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

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

MR. SULLIVAN: Thank you, Mr. Speaker, first of all I would like to make reference to our retail sales tax and the piggy-backing effect. I would like to just read a part of a letter I received from the reservations manager of Chateau Lake Louise in Alberta. I think it really hits home to a problem we have here, we are trying to promote tourism in this Province and to show off our Province to people outside and we have some undeveloped potential here in this Province and the part of the letter reads: my fiancee and I just recently returned from a vacation home to Newfoundland. Three years ago we left Newfoundland to work in a resort hotel in the Rockies at Lake Louise, Alberta. Although not frequent enough, we have always enjoyed our trips home. This brings me to the purpose of this letter, and this letter by the way is dated November 17. I cannot describe the frustration I felt purchasing items of necessity at local stores and for that matter meals at local restaurants. I was appalled at the final receipts. It is bad enough to have to pay the 7 per cent federal GST, but to add an additional 13 per cent is just outrageous.

As a transplanted Newfie in my position, I have many opportunities to promote Newfoundland to people from all over the world. I must say the response is always favourable until we come to the topic of provincial taxes. Imagine the response when you tell an American or a European that you have to pay an additional 13 per cent on all items purchased on top of the federal tax, even though the provincial tax is refundable only after you have arrived home, filled in the appropriate forms and waited six weeks for your refund. This means you are required to have that much more money when you travel. This definitely deters people from making additional or extra purchases. It is inconceivable to me, how anyone could live in Newfoundland and not find that appalling.

Newfoundland will always be my home and I will continue to promote it wherever and whenever possible. Tourism, in my opinion is definitely in the future for Newfoundland, it is the most beautiful Province, with the most special people and hospitality. I only hope that the outrageous provincial tax in effect now will one day be diminished and in effect inviting more visitors to our beautiful Province. That is from the reservations manager of Chateau Lake Louise, and I think it really hits home on the effect that it is having on Tourism and not only people coming to this Province, but in the extra tourism dollars they could be spending in this Province.

For people living here in this Province, they have also had to face a tremendous increase, an unprecedented increase during the term of office of this government of personal income tax from sixty percentage points to sixty- nine. In year one, 61 per cent, up 1 per cent, up another 1 per cent the following year and just this past year, a 2.5 per cent, not to take effect immediately with the Budget but retro-active to January 1, which has necessitated, starting July 1, in the revised tax tables deducting from the provincial share of the federal taxes, 67 per cent, and even though in January with a 1.5 per cent plus the new 3 per cent, for a total of 69 per cent, people are only going to notice a 2 per cent difference in their cheques on the personal income tax side provincially, which is negligible, it is only 2 per cent off 17 per cent if you are less than $30,000, it is 2 per cent off 26 per cent if you are in the $30,000-$60,000 range of taxable income, and it is 2 per cent of 29 per cent if you are in excess of $60,000 in taxable income, and that is going to amount negligibly upon their take home pay or disposable income, because they have been paying an extra, gouged, 5 per cent amount since July 1 and it is going to make it negligible.

What this has done to the economy is that it has taken money out of the economy of this Province that would be circulated and used to create more confidence by people, more spending. The consumer has tightened up on the purse strings, they fear the worst in tough times, instead of government trying to instill some confidence in the consumer in this Province. To top that off, the Province brought in a tax on jobs. For every job in this Province, there is a tax which the employer must pay. They have to pay a tax to the government if they hire people. It is the greatest disincentive to industry and to putting people into the work force that this Province has ever had. It is a disincentive, it is a tax on jobs in the Province and I think it is unheralded to tell a company that we are going to try to encourage and stimulate the economy, get things moving, get money out there for people, but if you hire somebody, you are going to have to pay an extra tax. It is a disincentive and the payroll tax should be removed.

Also, in terms of public infrastructures, this government has looked at spending a fair dollar initially on capital expenditures and they removed in this recent cut, $23.9 million from capital expenditures or public infrastructure investment in this Province. With a construction industry that is crippling, in which many construction people did not get to work until late August, all during this summer there were carpenters and people working in construction companies, in paving companies and road work, sitting home with no opportunity to go out and get a job and even alone not to get ten weeks, but even to get two weeks work. It was a very desperate situation that fortunately picked up a little near the end of the year.

So $23.9 million invested in the public infrastructure to have a long-term affect on this Province would have created hundreds if not thousands of seasonal jobs in the Province. That's why with figures published in the papers this summer - the number of carpenters, plumbers, and all these other construction people were out of work, one in six and one in eight, in different trades. Because the money was not spent. Money was not spent until late August when we should be trying to encourage a little bit of consumer spending in the Province. If they don't have money to spend the consumers can't spend it.

Then the minister said, stating the Province's fiscal position on page 6 of the mini-Budget: "I must reject emphatically the suggestions from many people, some of whom are in this hon. House today, that we should address the deterioration in our budgetary position by borrowing more, by placing an additional burden on the citizens of the Province. To these people I say no!"

Then, almost in the same breath, just moments later, on page 7 he outlined three fiscal strategic approaches that this Province is going to take, and one of these says: " allow a prudent increase in the current account deficit which would be financed through increased borrowing." The minister is talking out of both sides of his mouth. To those who say we should borrow we say no; and then he turns around and says we should borrow $70 million to $80 million. That's an about face in less than one minute.

The people have lost confidence in the ability of this government to control the fiscal affairs of the Province. They have to bring in two Budgets to get them through one fiscal year. It's no wonder the bond rating agencies are scared, that they might look for the only single A rating to maybe drop to a triple B. Bond rating agencies look upon the ability of the province to generate revenues and control expenditures, and they also look upon the ability of the government to stick to its forecasts. To be able to predict and show fiscal management. This government has shown fiscal mismanagement and the bond rating agencies have every right to have concerns and fears. It's either their inability to budget or its their ability to cook up a good set of books. It comes down to one of these two things.

For the past three and a half years this government has done more than any previous government to stymie the growth of business in this Province. Even though the corporate income tax collected is only $44 million, once it was over $70 million, they have said no to the business community. They have not provided any incentives. They've increased initially the corporate tax up to 17, which now is going to take affect and come back in January. It's not here yet. It's not going to get results between January and March of this fiscal year. How can you get results in three months? They should have dropped the corporate rate of tax three and half years ago and put some confidence back into the business groups across this Province. To help industry, encourage them to invest, to hire people.

Also we've seen disincentives with the high rate of small business tax. Even though it's going to be reduced it is too late to solve our economic woes for the past three years. It has contributed to this government's inability to be able to forecast properly. The revenues weren't generated because the people weren't working in this Province. If we don't have incentives to hire people....

Retails sales tax spent by the consumer generates about $40 million for every one percentage point. Personal income tax for every per cent, amounts to about $7.5 million. Where do the consumers get the money to spend and give the government retail sales tax and personal income tax? It comes from giving incentives, not only to the public sector employees, but also to other business employees across this Province. Money is not being circulated. The consumer is protecting his or her money in this Province, and the businesses are trying to protect the money that have in this Province, because both are either taxed to death and they are turning people inward and trying to cut down on expenditures, and their money is not being circulated. So we have a growing, vicious cycle here of cuts and taxes that is not going to end unless some responsibility is taken to stimulate the investment climate in this Province.

People today have far less disposable income than they had three-and-a-half years ago. We have had 9 percentage points increase in personal income tax. We have a piggyback of .84 per cent extra in retail sales tax. That amounts to close to $40 million by piggybacking the RST, and we expect the consumer to go out and spend. With inflation being controlled, to a certain extent, their gross revenues and salaries not increasing, with personal income tax increasing, retail sales tax increasing, there is far less disposal income at the hands of the consumers than there was three-and-a-half years ago. It has not only come by hitting the consumer in the Province, it has come by hitting the main part of this Province that employs consumers, in the business sector of the Province.

The hon. Member for Port de Grave referred to the fishing industry. We have a monstrosity in the fishing industry. The federal free trade agreement - yes, we have movements to reduce tariffs and to encourage further development. We have a resource out here that employed people in this Province for hundreds of years. We have an industry now that is crippling and almost on its last legs. What needs to be done, if we are going to create jobs in this Province, the only resource that has the greatest potential for development in this Province is in the fishing industry.

We have exported whole fish. We have exported fillets in unprocessed state. The Province has not given incentives to encourage and develop the secondary processing aspect. For every job in the primary processing area, we can create an increased number of jobs in the secondary processing. We see fish go out of this Province that is processed in the United States. It is processed in the UK and other European markets, and it is about time that the mechanisms are put in place today to solve this problem down the road.

We cannot hope to invest dollars in two years time and expect to revitalize and start a fishery when a moratorium is lifted in 1994. Now the plans must be made. It takes investment and it will take dollars, but it is going to reap benefits down the road. We are doing too much short-term planning and not enough long-term planning. We should not be looking at where we are going to be tomorrow. We should be looking at where we are going to be in five or ten or fifteen years time.

I think it is about time that this Province accepted its share of the responsibility in industries in this Province - in particular, the one with the greatest potential is the secondary processing relating to the fishing industry.

The government should take steps right now, and the Minister of Fisheries hopefully will give this the utmost consideration, because we want to have a Province here where we can employ people. If not, we are going to have, and I stated it in a Private Member's resolution on the Wednesday when the House first opened, that we are going to have a welfare state in this Province far worse than the 50 per cent increase we have had in social welfare recipients over the past three-and-a-half years. We are going to have a major problem - one that this Province will not come out from under unless they do something today to get this Province back on the road to recovery.

I have not seen anything except, just recently, some minimal incentives to an economy that has shrunk so much in the business sector by reducing taxes. They have given a little plug to that sector that equates only into a few million dollars investment. That is all it is going to amount to in these tax breaks. They only pay $44 million totally, and they are only reducing the small business tax from 10 per cent to 5 per cent. That is less than $200,000 income. They are going to reduce the primary and manufacturing aspect in this Province. That is going to take over a 50 per cent cut, but the corporate tax rate that brings in the total amount overall from 17 to 16, it is only going to get a few million dollars. We need an influx of spending in the tens of millions if we are going to plan to have a viable future in the fishing industry here in this Province.

In closing I'll reiterate that we have followed a tax and cut policy that has been a dismal failure. Cuts, and then taxes, and more people looking inward and protecting the money that they do have. Their disposable income is shrinking. It's no wonder the consumer wants to try to protect what they have. They fear for their jobs and for their future. The business community has taken the same direction as the consumer has in this Province. I think it's about time if a government is going to accept the responsibility, they don't just have a responsibility to manage their source of revenue. They have an obligation to this Province to generate, to create and to come up with new sources of revenue and stimulate the economy at least to maximize the return on the sources of revenue that are there now.

This government hasn't done that. I think it's about time they started to do something about it. Thank you, Mr. Speaker.

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

MR. RAMSAY: Thank you, Mr. Speaker. With reference to the motion put forward by the hon. Member for Mount Pearl today, to comment specifically on the proposal that he puts forward, on the clauses therein, the hon. member states that the provincial economy is shrinking. Now I would somehow have little problem in agreeing with that, as far as the growth of the provincial economy has shrunk somewhat.

Again, it depends on what you compare it to. If you were comparing apples with apples then you would be comparing today's economy, its growth or contraction, with not just what happens entirely close to it, what happened just before, but also what happened x number of years ago and the relevant growth or contraction of the economy in previous years.

The point I'm making is that in relative terms we currently have a larger work force in the Province than we had even five years ago. The work force has increased by approximately 20 per cent since 1980. So in the last eleven to twelve years we have approximately a 20 per cent increase in the average labour force in the Province. So you've got to take things relative to that which you're comparing them to.

I note the average labour force now in the past year for which statistics are available of 241,000; in 1980, when the previous government was in power, 205,000 people were in the work force. So you have to look at these clauses of the said motion in relative terms.

Other than that we take the second clause here. The hon. gentleman notes: "AND WHEREAS the tax burden imposed on individuals and businesses by this administration has harmed the economy." Now he states that the tax burden has harmed the economy. I would dispute that. Although the tax burden is a difficult cross to bear as a government, it is one which in some cases we inherited in the event of the sales tax, which is quite high, which we had little or no choice but to set up with the GST, where the federal government encroached on provincial tax room in the manner in which it did.

We didn't have the luxury as some other provinces did of charging both taxes separately. We had little or no choice in that. We chose to put the provincial sales tax on - as it had previously been considered - the value of goods plus the federal sales tax, or equivalent federal tax, being the GST. Which, if we took the federal word for things, was that the GST was in fact lowering the net cost or the overall cost of goods.

So therefore we would not really be taking a tax grab, so to speak, on the basis of charging the provincial sales tax on top of the

retail value of goods plus the GST amount. The other clause in here, I note the hon. gentleman has stated: and "WHEREAS the administration has failed to execute effective policies to stimulate the economy and decrease unemployment." Now, to take steps to reduce the level of taxation is one thing but to fail to execute policies to stimulate the economy? Now what can we as a Province as cash strapped as we are, do in the overall to stimulate the provincial economy? There are certain limits as to what can be done by a government, which is known as the poorest Province of the country to stimulate the economy.

We can do our part I am sure but we could also come close to bankrupting ourselves in the process of trying to stimulate the economy. So, Mr. Speaker, that contention in the statement by the hon. member, I would say is based on a false premise. It is based on the premise that provincial governments of our size are able to effectively stimulate the economy. If you take that as a given, then possibly you could suggest that we fail to do so. Now, if in fact it is impossible for a said government to stimulate the economy by any means, that would certainly show us any overall benefit, because the reason for us to stimulate the economy, if you look at those who preach social justice, is to stimulate for the purpose of being able to generate the revenue for us to then provide the social services and social programs that the public of the Province demand.

So, if we are the ones who are going to stimulate, than therefore we are robbing Peter to pay Paul and essentially not providing the climate necessary for the private sector to stimulate the economy and the private sector therefore to provide revenues with which we can then provide the services necessary for those that require the social safety net.

Now, I also note here that the hon. member has stated: BE IT THEREFORE RESOLVED that in an attempt to stimulate the economy and thereby create jobs, again based on the false premise that we can do so, the provincial government he states, immediately take steps to reduce the level of taxation in this Province. Now, on this end, I do not entirely quarrel with his argument. In the one case, in the hon. ministers statement on Friday he did note that we are planning to lower the taxation, have lowered the taxation on business tax rates, corporate tax rates for small business to effectively stimulate the economy. So we have half of the equation of which he speaks correct.

Now the other side of thing is that we have the personal income tax out there, the people who drive the economy, the consumers who drives the economy, are being asked to pay a little more. Now again, if we look at the statements made prior to our announcement, we had the Opposition stating that they would prefer that we share the burden and do not make the public service of the Province shoulder an unfair amount of the burden of the problem we are now experiencing. Everyone who is in this legislature knows that the most reasonable way of sharing the burden that is necessary to overcome our overall provincial tax problems is through the tax provided under the personal income tax section. So, therefore it is the easiest way to spread the burden, now it is an inordinate amount, 69 per cent is an inordinate amount.

We have gained somewhat I suppose as to the burden we will be affecting on the people of the Province because of the fact that the federal surtax has been lifted. This, Mr. Speaker, will allow us to not cause a lot of harm to people in the amount of actual take home pay. It will be less by a smaller amount than it would have been I suppose if we had gone from 65.5 per cent or whatever up to 69 per cent in a given move. Again, we suffer from the fact that the 67 per cent was an increased amount for us to recover the amount of tax based on a half years levy.

The other thing I want to mention, Mr. Speaker, concerns the comments of members opposite about the social services and the social safety net which we provide. Again, this has to be looked at in relative terms if in fact a reason for taxing the people of the Province. Tax, as bad as it is, is a necessary evil and the reason we do so is to provide social services for those who are unfortunate enough to be caught in circumstances, the occasional chronic user of the system who by virtue of no fault of their own, either through their environment as they have grown up or the environment they have been subjected to because of a variety of factors have no choice but to avail of social services benefits.

This kind of assistance is available because of the overall balance and the effect the economy has in allowing us to provide those services. Now, again we have to look at it from the standpoint of the relative terms of what it is we are doing. We remember from some days past that hon. members opposite decided there was a terrible increase in the number of social assistance cases. Mr. Speaker, we have to look at exactly what it was like when members opposite on the front benches of the government of the day over the last number of years, prior to our taking over government, experienced. Let us take a look at exactly what the situation was in comparison to what the situation is now. In 1981, as an example, Mr. Speaker, there were 208,000 people in the average labour force in the Province. The average unemployment was 29,000 people, a low number in comparison to today's average unemployment, but again let us compare apples to apples.

MR. EFFORD: What was that again?

MR. RAMSAY: There was an average unemployment of 29,000 in the year 1981. Unemployment as a percentage of the labour force was very good. It was only 13.9 per cent. For that, I suppose, hon. members opposite would try to take some comfort although if they looked at their situation in comparison to the national average of the day they were not really that much better off.

There is one thing I want to look at and that is in the comparison of the employable social services cases as a per cent of the labour force. In 1981 2.7 per cent of the labour force were employable social services cases. I note that in 1991, ten years later under this government, the percentage of the labour force that are employable social services cases are 2.6 per cent, less, Mr. Speaker. We are today showing less percentage of the employable social services cases as a per cent of the labour force than in 1981. It was 2.7 per cent in 1981 and in 1991 it is 2.6 per cent, so really as a percentage, when you compare it in relative terms, today is not that bad. You are looking at a 241,000 labour force versus a 208,000 labour force in 1981. That is social services cases.

Now, if we go through the various years: in 1982 we had 2.4 per cent, it went down substantially in 1982, from 2.7 down to 2.4. Then it 1983 it rose again to 2.7 per cent. In 1984 it stayed at 2.7. Then in 1985 it dropped a little bit to 2.6. In 1986 it jumped to 2.8 per cent, and in 1987 the year just prior to the hon. member's opposite being booted out of office, it rose to the unprecedented level of 3 per cent. Mr. Speaker, 3 per cent of employable social services cases as a percentage of the labour force. It was up to 3 per cent.

AN HON. MEMBER: (Inaudible)

MR. RAMSAY: What do you mean I do not know what I am reading?

You probably would not even be able to read it. Anyway, Mr. Speaker, in 1988, the last year of the hon. member's opposite tenure, the labour force was 231,000. We had an unemployment level of 38,000 and we had a 2.7 per cent - again, it was a level higher than it was today.

Now, in 1989, I will give the hon. members credit, on this side of the House the amount lowered to 2.3 per cent, Mr. Speaker. We went down to 2.3 per cent of -

MR. EFFORD: Explain what you're saying. I don't understand what you're saying.

MR. RAMSAY: The employable social services cases, as a percentage of the labour force - so those who are employable in social services, as a percentage of the labour force, has dropped from 1980 to now. Now we are down to 2.6 per cent. These figures really demonstrate that even though the numbers of cases are rising, Mr. Speaker, the numbers of cases, as a percentage of the total labour force, has dropped, in comparison to some of the years that the hon. members opposite were in.

Again, they are a little higher than some other years. There were two years in there where they were better when the Opposition was in power. But on the majority they have dropped. I think this is a point worthy of note.

Now, what can you do as a member of the House of Assembly - you, in the Opposition, we, here on the government side. We, I suppose fifty-two, soon to be forty-six or less, of the members of the House of Assembly, what can we do? If, in fact, the resolution brought forward by the hon. member opposite is not correct, in that we feel that it is not something that we can support, then what would we suggest?

Well, I would suggest that everyone get off their duff in the House, every hon. member, including myself, get out into your communities, get the ideas of the people and assist them with their ideas. Now I know I do this kind of thing day-in and day-out for people in my district, as some hon. members do, as well. The thing is, if a politician involves himself in the process of trying to facilitate initiatives of the people in his district then possibly a lot more activity would take place.

The thing we have to look at is that we, as legislators, become too complacent with our activities as people who deal with legislation. I think we have to get out there, be more active, if we are business-oriented at all. Some of the people are generally, I suppose, problem solvers as opposed to creators. Some of us purport to be creators of new initiatives and will assist in training and assist in different things that are required in our districts to get initiatives off the ground.

I note with the advances lately in computerization, these are the kinds of things that we have to really stress and push, and the kinds of things that we have to do to try to make the private sector be the provider of tax dollars, as opposed to government spinning itself in a circle and on down into the ground, where eventually we bankrupt ourselves trying to stimulate an economy that we cannot stimulate by government means anyway.

Mr. Speaker, I think we have to look at it from an overall perspective. The provincial economy is unable to stimulate itself. It requires factors that are much larger than that which can be generated by a provincial treasury alone. It requires the factors of a national economy to bring it along, an international economy which hopefully will be led by the United States and, in so doing, will provide some of the impetus necessary for those of us here to provide the services that we like to provide, and need and want to provide, for the people of the Province.

Mr. Speaker, I suggest that the hon. member's resolution is faulted, that the hon. member is well-intentioned but again misinformed. In so suggesting I ask that hon. members of this House not support the resolution of the hon. the Member for Mount Pearl. Thank you very much, Mr. Speaker.

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

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

I am pleased to have the opportunity to rise and speak on the resolution so capably presented by my colleague for Mount Pearl on Private Members' Day, to give this government some new ideas on what should be done with the economy of this Province, so that we can improve the general quality of life or general lifestyles here in this Province of ours, Newfoundland and Labrador. Because that is what really we should be doing. It is not just taking political potshots at each other. That is not what this is all about, Mr. Speaker. This is supposed to be improving - we are supposed to be here to debate the issues, but more importantly than debating the issues is to offer new ideas that can stimulate and promote and develop the economy of this Province, and this resolution says all that, Mr. Speaker, and if it were implemented, would do that.

Mr. Speaker, we have seen what this government has suggested; the hallmarks of governing of this Province, by this government, is cut and tax; that is the only method they have, that is exactly what they do. Now, the problem is, that is the very thing we should not be doing. What we have to do is address the problem in a manner that we can get the solution because we realize that in the three years you have attempted to tax and cut, you have created a larger problem, so that isn't the answer to the problem.

You have exaggerated the problem; you made the problem larger, and with your tax and cut policies, you are led into that by two iron-clad rules that you live with, which are to never admit you are wrong, and to blame someone else. You can see minister after minister stand in his place and defend a mistake or mislead the House. Mr. Speaker, they will do one or the other but they will never ever admit they were wrong. And then, of course, the other iron-clad rule that they never break is that they then resort to blaming somebody else: It was the feds who did it. Why don't we get the feds to pay for it?

MR. R. AYLWARD: (Inaudible) bankrupt.

MR. A. SNOW: Exactly. Well, if the feds didn't cause it, it was their predecessors who caused it - always blaming somebody else, never accepting the responsibility of government. You never ever have done that since you have been elected. I suppose it was the shock of finally being there, that is what did it; that is what caused it I suppose. You just can't believe that you now have not only the right to govern, you have a responsibility. So, when you find that you have that right and you accept the responsibility, you will be able to throw away those two iron-clad rules that you used, those of blaming somebody else and never admitting you are wrong, and get on with governing.

But, Mr. Speaker, the resolution so capably presented by the hon. the Member for Pearl, has brought forward an attempt to do something differently, that is, to attempt to stimulate the economy. And there is nothing new about that idea. The President-elect in the United States of America is proposing this same type of agenda. The very same thing that he is proposing down there, we are proposing here.

AN HON. MEMBER: (Inaudible).

MR. A. SNOW: I hear the hon. member on the other side saying: Now, once the economy gets going down in the United States and once the economy gets going upalong, we will do okay. If they are making more money in Ontario and they send it down to us, we will be doing okay. If they make more money in Alberta, we will do okay, but they do nothing, absolutely nothing to stimulate the economy. Now, Mr. Speaker, we have to do this because I am sure you are beginning to recognize that you have made a tremendous mistake with the policies that you have adopted, because you have all begun to finally realize that it is not working. So it doesn't work to tax and cut even more.

We have to realize the dilemma that the general public of this Province is in. We have cut off, we have decreased, we have lowered, we have picked every red penny out of their pockets, Mr. Speaker. That is what they are saying in the Cabinet room. You are getting every nickel, every penny out of their pockets, so the discretionary spending of the ordinary citizens is less today than it was last year, less than the previous year, and less than the year before that. Make no wonder the economy is shrinking - it has to shrink, because you are taking the money out of their pockets.

A case in point is the infamous payroll tax that was imposed on the people of this Province to replace the school tax. Because we have seen what it did. In my area, we see the same people paying more money, the same miners paying more money, the mining companies paying more money, and the quality of education to the people who live in Western Labrador is not as good as it was thirty years ago, let alone last year. That's what we are seeing. we are seeing tremendous tax grabs that decrease discretionary spending, that stifles and lowers the amount of money that people can spend and thus shrinks the economy.

This payroll tax is going to grab $66.8 million. This tax on jobs is going to slow down, is going to take out of the economy of this Province, $66 million. That isn't going to help the economy of this Province. Mr. Speaker, I think what happens with this group -apart from the fact that after they got elected it was a such a shock to them, they haven't realised what really happened to them. So now they are up in their Cabinet rooms and they make all these decisions. They are up there in these - what is it? - two thousand dollars a chair you get to sit on when you get into Cabinet?

AN HON. MEMBER: (Inaudible).

MR. A. SNOW: The Minister responsible for Forestry says no, his is $3,000. Well, maybe he has a $3,000 chair, Mr. Speaker. When he sits in there in his $3,000 chair and makes these decisions, they forget all about the person who is out in the economy, out and about the Province, Mr. Speaker, who is probably retired on a fixed income. Doesn't he realise what he has done? - that the money that person is going to make, money he is going to have to spend on groceries, money he is going to have to spend on clothing, is going to be probably $1,000, $1,500, to $2,000 less now per year than when this group got elected in 1989.

Just the other day in my district, a retired miner, a Newfoundlander who had gone down to Labrador and worked in the mines and retired and decided to live there, came up to me and suggested he is probably going to have to leave because of the huge amounts of taxes that this government have imposed upon him. He can't afford to live there anymore. We are going to drive him out of the Province.

The previous speaker stood and talked about: Well, it doesn't matter, really, about the income tax raise that we are going to have; the 3 percentage points are not going to be noticed that much. Really, the 3 percentage points that are coming on January 1 are not going to be noticed that much by the people of the Province, because the feds lowered theirs.

He doesn't realise that what we're talking about is removing money from the economy, taking money from these retired people. That is what they are doing. He doesn't understand how it works. I suppose he is happy. He has barrels of money - he is making $60,000, $70,000 a year, plus expenses. He doesn't care about the retired person. You forget all about him once you get in here - this group did.

Mr. Speaker, you have to be concerned about the ordinary Newfoundlander and Labradorian who is out and about there, because that is the person who counts. People come first, Mr. Speaker. Don't forget the person who is out there. That is what has happened with this crowd.

AN HON. MEMBER: What would you do if you were over here? Tell us what you would do.

MR. A. SNOW: Mr. Speaker, I can tell you several things that I would not do.

AN HON. MEMBER: Tell us what you would do.

MR. A. SNOW: We should not have had this payroll tax. We should not have cut the capital expenditures. We should not have attempted to balance the books of this Province on public employees. We should not have done that.

AN HON. MEMBER: (Inaudible).

MR. A. SNOW: No, Mr. Speaker, we should not have done that. We should not have slowed down the economy. There are some things that we should have done.

I believe that you can stimulate the economy by lowering the taxes. You could have done that. As the Premier, himself suggested when Mazankowski brought down the federal Budget - the Premier was visibly shaken, upset, because there was no money in there for the Trans-Labrador Highway, only to find out a few minutes later that there was, of course, and he said: Oh, my God, I made a mistake there. So they are not all bad.

What he did not say after that, he didn't apologize when the hon. the Minister of Finance brought down his Budget. He whipped $39 million out of the provincial Budget. Now, the minister agrees with me that it is true, and he says that he apologizes for it, but it is a fact. The Premier suggested when he commented on Mazankowski's Budget that it was good that income tax was lowered. Yet, what does he do? He instructs his Minister of Finance to take up that so-called tax room and raises the personal income tax of the people earning money in this Province.

AN HON. MEMBER: We could have shut down some hospitals and (inaudible).

MR. A. SNOW: Mr. Speaker, the hon. the Member for St. John's South would like to shut down hospital beds. I know that, but that was last year's plan. This year's plan is different. This year's plan is tax, tax, tax. Last year it was cut, cut, cut.

What you should be doing is coming in with an economic policy that is going to stimulate the economy. That is what you have to do. Just as a few suggestions, you should lower the retail sales tax. And be very wary when it is discussed around the Cabinet table that you are not conned into harmonizing and putting another tax grab on the people of this Province. Be very wary of that, because that will definitely drive this Province's economy even lower than it is today, if you can imagine that. So be very wary, and I would caution the members of Cabinet when they get around, and if you are allowed to speak up - if the former labour leaders could not get their way; they are not allowed to speak up in Cabinet, so some of you who - we have forgotten all about social conscience - so if any of you have any conscience with regard to the economy of this Province, at least I hope you will speak up.

So some of the things we should do, I think we should undoubtedly lower the retail sales tax, as I suggested. I saw what this government did in my own district with regard to taxation. When they had a bill before this House that lowered taxes on gasoline in the border areas of the Province, what did they do? The previous Minister of Finance said: We will apply it in Eastern Labrador but not in Western Labrador. It is unbelievable. Mr. Speaker, we have the beginning of a new industry beginning to come into western Labrador now. Mr. Speaker, I propose an amendment to that particular Bill that I am discussing, that we would lower the gasoline tax in western Labrador, the government voted it down, that is what happened. Now I know that was two years ago and the hon. member is there in the backbench, he forgot all about it and he made a mistake and I know it is two years and it is a long time and a lot of things go on in the House, so I will accept his apologies, Mr. Speaker, but the point is, they did not lower the tax in western Labrador, other provinces such as Quebec -

AN HON. MEMBER: We lowered the taxes on - (Inaudible).

MR. A. SNOW: You did it in eastern Labrador not in western too. I will go on even further Mr. Speaker, to ensure that it is in Hansard, that the previous administration also made mistakes. They did make mistakes but, Mr. Speaker, at least they listened. Now, Mr. Speaker, some of the things we should do is emulate other provinces such as they did in gasoline tax, diesel tax, and road fuels or taxes on road fuels such as diesel and gasoline, Mr. Speaker, we should emulate other provinces and lower - have a sliding scale in the border situation such as where I live, Mr. Speaker. Because what happens now, we are at the dawning of a new industry in western Labrador because of the opening of the trans-Labrador highway, Mr. Speaker, we are finding that 80 per cent of the consumable freight in Labrador West today comes in on trucks, Mr. Speaker, but yet we are finding that all those trucks fill up in Quebec. Do you know why? Because fuel is about 30 per cent cheaper, at least 30 per cent cheaper now, Mr. Speaker, so what we have to do -

AN HON. MEMBER: But it is not true.

MR. A. SNOW: It is true. I will tell you what I will do, Mr. Speaker, I will table the numbers in this House. I did it before and I will do it again and I will challenge the Minister responsible for Employment and Labour Relations, will he come out and resign if I am right and he is wrong? Would you resign if I am right and you are wrong?

MR. GRIMES: Absolutely not.

MR. A. SNOW: Well, Mr. Speaker, he should stay in the backbenches. Mr. Speaker, he sits over there and snipes, snipes that is what he does, he does not participate in the debates. He sits in the backbenches and snipes and of course if you listen to some of his colleagues in Cabinet they say: and he adds the same amount to Cabinet, he adds the same amount to Cabinet discussions. He snipes from the outside, he snipes, Mr. Speaker, but he does not participate in meaningful discussion.

MR. SPEAKER: Order, please!

I am having difficulty hearing the hon. Member for Menihek. I realize that in a former profession I had, people getting close to Christmas used to get a bit excited and I know that hon. members are excited about the Christmas season but I have recognized the hon. Member for Menihek.

MR. A. SNOW: Thank you, Mr. Speaker. Mr. Speaker, thank you for your protection. I will continue with the debate, Mr. Speaker, but I would like - in conclusion, if I may have one minute, Mr. Speaker, and if the people in the backbenches on the other side would refrain from the sniping and the Cabinet ministers would refrain from sniping, Mr. Speaker, this government has to change and adopt a new principle, a different principle; they have to give up the previous ideas that they did have of tax and cut. They have to come in with something that other administrations are doing, such as the federal government, such as the President elect of the United States is doing and that is to stimulate the economy -

MR. SPEAKER: Order, please!

The hon. member's time is up.

MR. A. SNOW: By leave, one minute?


MR. SPEAKER: By leave.

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

Thank you, Mr. Minister.

But, Mr. Speaker, what they have to do is emulate these jurisdictions and stimulate the economy by lowering the taxes, allowing the people to have more money to stimulate the economy and that will drive this economy, that will create more wealth in this Province and, Mr. Speaker, it can work, it will work but it has to be tried.

Thank you.

MR. SPEAKER: The hon. the Member for Trinity North.


MR. SPEAKER: Order, please!

I recognized the hon. Member for Trinity North. If other members want to speak, they can rise in their place and the Chair will recognize them but for the time being, I have recognized the hon. Member for Trinity North.

SOME HON. MEMBERS: Hear, hear!

MR. OLDFORD: Thank you, Mr. Speaker.

I am certainly pleased to stand and make a few brief comments on this resolution -


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

The Chair is not going to tolerate the disturbance that is going on in this House. If hon. members want to engage in private conversation, I suggest they go outside the Chamber.

The hon. the Member for Trinity North.

MR. OLDFORD: Mr. Speaker, as I was saying, I think it is important when we consider the economic problems facing this Province -


MR. OLDFORD: - that we look at some -

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

The Chair has called for order and the Chair requests there be order in the House. The Chair has recognized the hon. Member for Trinity North, if other people want to speak, rise in your place when his time is up.

The hon. the Member for Trinity North.

MR. OLDFORD: Thank you, Mr. Speaker.

I think it is important that we look at some of the root causes of our economic problems, if indeed we are to solve the problems facing not only the Province as a whole but the government too, and I think we have to ask ourselves: was the money that has been spent over the past number of years, the deficit that we have accumulated, was that money spent wisely? Was it necessary in order to meet the social needs of our people? I think it is important that we look at the demands on the public purse and in particular the cost of government.

As a former civil servant who had spent nine years in the public services of this Province, I can certainly relate to some of the things, some of the events that occurred while I was in the civil service, events that added to the cost of providing government services to our people and I was surprised to find out that in my nine years as a civil servant, the public service in this Province grew by some 8,000 people and that was back in the days when we had twenty-four departments of government, fully staffed.

Every Cabinet minister had a parliamentary assistant, press secretaries, private secretaries, we even had private secretaries to the private secretaries, and the public service in this Province became one big make-work project. I would almost go as far as to say we had people hired to staple together reports and we had more people hired to take the staples out of reports. I recall there were people who used to show up in my office saying to me: I am here to start work today, and I would say: there are not jobs for you. There are no openings in the department and these people came and they said: oh, I am a friend of the minister. Their only qualifications were, that they were friends of the minister or from the minister's district and they needed a few stamps, and that is one of the major reasons, I think for our fiscal problems today, Mr. Speaker, the high cost of government.

But we inherited that problem from the previous administration, and even today I am told that for every four civil servants in this Province, there is a boss. We have 7,000 managers in the public service of this Province and there are at least forty-six directors directing six or less people. That is a real problem, and a problem that cannot be corrected overnight.

I think the time has come when we have to rationalize the public service in this Province, and we have to provide more frontline workers - more Indians, less Chiefs.

The Member for Mount Pearl, in his resolution, calls on government to cut taxes to stimulate economic growth. The fact of the matter is that we have cut taxes, and that was an important part of the December 4th. Financial Statement. But we must remember, when we cut taxes we either have to borrow more money to pay for the cost of government, or we have to cut services to the people of this Province. There is no other immediate solution to our fiscal problems. It is simple economics.

It is obvious that if we borrow more money we increase the amount of debt that we have accumulated. If we add to the deficit, we will surely increase the amount of interest that will be payable on that debt in future. Someone will have to pay the piper. There is no free money, and there is no free ride.

I must say, if government opted to cut services to people - if we made cuts to social programs - it would be the poor, the sick, and the illiterate in this Province who will suffer, and these are the very people that governments are elected to protect. They will bear the brunt of the fiscal measures needed to turn this Province around.

I am sure my friend from Mount Pearl would not advocate further cuts to social programs. I think this government, in its Financial Statement of December 4th., did a tremendous balancing act in sharing the pain of fiscal restraint while at the same time trying to protect the integrity of our social safety net. They did much, I think, to stimulate the economy of this Province while protecting our social programs.

Mr. Speaker, it is interesting to note, and I want to quote something that was written in The Evening Telegram of December 8th. It was a commentary written on the mini-Budget by Mr. Rick Daw, who is a chartered accountant here in Town. Mr. Daw said: The corporate income tax in this Province brings in only $44 million, or about 3 per cent of provincial source revenue.

He says: There were two rates; a general rate of 17 per cent and a special low rate for the first $200,000 of active business income of privately owned companies, of 10 per cent. Effective for 1993, the Province reduced the general rate to 16 per cent, and slashed the small business rate in half, to 5 per cent. It also introduced another special rate for manufacturing and processing incomes of 7.5 per cent, down from 17 per cent - and that is a drop of 9.5 per cent.

He goes on to say: Now this is significant. It affects tax planning and allows more money to be reinvested in the business. The real story is that manufacturing and processing incomes over $200,000 will be taxed at just over 30 per cent -

MR. SPEAKER: Order, please!

The hon. member's time is up.

MR. OLDFORD: Thank you.


MR. SPEAKER: The hon. member has leave of the House for another minute.

The hon. the Member for Trinity North.

MR. OLDFORD: Mr. Speaker, just to clue up, I think that is the real story. We have brought in effective measures to stimulate the economy and to spur growth in the small business sector, and I think the government has been realistic. It has taken a realistic approach to fiscal management. I think the government has created a climate which is conducive to the growth of the private sector, and it is now up to the private sector to take the torch and to run with it.

In conclusion, Mr. Speaker, it is only the private sector that can create long-term, meaningful jobs in this Province.

Thank you very much.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: It being Wednesday, I call on the hon. Member for Mount Pearl to conclude the debate.

MR. WINDSOR: Thank you, Mr. Speaker.

When I spoke earlier in the debate, I talked at some length about the impact that taxation is having now. I think I covered most of them except the retail sales tax, which my friend just mentioned a few moments ago when he suggested that in fact it should be cut, and I would certainly support that.

I had hoped that the minister, in fact, in his statement of last Friday, would have done just that. Each tax point would cost approximately $20 million. That is about what it would cost for every point of retail sales tax. A straightforward translation would predict somewhere around $35 to $40 million in fact, based on a percentage of sales. If hon. gentlemen opposite who have access to Cabinet documents will have a look they will find that the Cabinet secretariat themselves have told ministers that in fact by reducing by 1 per cent, although a strict interpolation, would say he would lose $40 million could easily predict that sales would increase enough to generate twenty of that so that in fact by reducing by 1 per cent you are only reducing by half a percent. So, I am saying that you could reduce by 2 per cent and you would only lose a revenue that you might normally expect to lose by reducing by 1 per cent.

About $40 million is what it would cost to lower sales tax from 12 per cent to 10 per cent. That is on a normal situation. I would suggest that in today's environment you would lose very little. In fact by stimulating the economy, by putting some confidence back in the economy, by helping consumers to do things they have been not doing, I think the implications would be far greater and I think you would lose far less. No doubt you would lose some but I think you would get back in other means, in jobs created, in personal income tax therefore paid by corporations because the economy is moving, by corporate taxes, by all kinds of taxes, through their gasoline tax because more goods are being moved.

Every time you stimulate the economy it comes back to government from all sources, so a reduction in retail sales tax itself, although it would reduce that measure, and I am suggesting by about half of what you would ordinarily predict, it would stimulate so much activity that you would get it back, or a great deal of it from other measures. I would have hoped that government would have done that. I know they are looking at it. They have considered reducing the retail sales tax. The minister has talked about reducing retail sales tax as part of a tax harmonization. All he is saying there is that he is going to give back a little of what he will gain under a tax harmonization.

Now, we do not really know what tax harmonization means at this point in time because we have not yet had a proposal on harmonization. We do not know exactly what the impacts are expected to be so it is very difficult to access how it will affect us, so until we see a proposal it will be very difficult to analyze it. All that we have heard so far tells us that it will be a broadening of the tax basis and a reduction in some of the rates accordingly. The federal minister would try to tell us that it would be revenue neutral as he did with GST. I do not think that any of us believe for a moment that the introduction of GST was going to be revenue neutral and as we can see now it certainly was not revenue neutral. Certainly there was a lot of money gained by the Government of Canada through the introduction of GST. I do not think that the Government of Canada knows yet exactly what they are gaining because they have not yet got a system in place to have a good handle on the GST, nor do they know how much they are losing because they are not doing any audits yet. Companies are sending in their returns, paying their bills or not paying their bills, as the case may be, and I would suggest that the Government of Canada is losing to this point in time. Perhaps they will catch up with them some day. I do not think they really know at this point in time what the implications would be. And I think the same is true here, we do not know what the implications of tax harmonization would truly be, but we do know that the minister is proposing to reduce sales tax as part of that. He would have to do so otherwise there would be a huge increase in tax because it would be spread over so many other items. Now, the implications of that can be very negative because the items that are tax exempt are basic items, food, clothing, heating fuels, and electricity. Basic items of necessity that every family must have and on which a lower income family pays a much higher percentage of the gross family income.

So it would be a regressive thing to tax those sorts of items. I'm suggesting that we can drop retail sales tax now as a means of stimulating the economy. I think the impact of it would be extremely positive.

Mr. Speaker, the minister also last week increased tax on tobacco. He hasn't yet explained to us what the increase is on alcoholic beverages that he introduced the other day. He didn't mention it at all in his statement but in the back of the statement, under Statement II, listing the revised sources, we see an increase of $1.5 million from Newfoundland Liquor Corporation. Over a four month period.

Now either their sales were up - which we're told they're not - or there's got to be an increase in prices coming in here somewhere. I guess the real question is, is it going to take place before Christmas, to take advantage of the Christmas rush, or is it not? On an annualized basis we're talking $4 million. In order to gain that kind of revenue we're looking at fifty or sixty cents on a three-quarter litre bottle of alcohol. That's a significant increase the minister is trying to sneak in here.

What are the implications of all these? The tobacco tax, here's a dilly. My friend for Burin - Placentia and my friend for Grand Bank, there's not a boat I say ashore today on the Burin Peninsula. They're all heading for St. Pierre. All the fishermen are gone to St. Pierre. The only industry that this government's created has been rum-running. The only industry they've created, rum and tobacco products coming from St. Pierre in record numbers. I'm told in fact that the agencies in St. Pierre are running out of certain brands, so much has been coming over.

AN HON. MEMBER: (Inaudible).

MR. TOBIN: Yes it is.

MR. WINDSOR: This is true. The hon. Member for St. John's South, his favourite brand has gone dry. We laugh at it, Mr. Speaker, but it's a serious matter. Newfoundlanders look at it and say: this is great if we can get cheap alcohol and cheap cigarettes. But it is a serious matter.

Either you have a tax and it's applied equally to everyone, or you don't. What it's doing is it's enticing people to make a living illegally. Newfoundlanders look at it and say: boy, if you can get away with it, more power to you, it's not the same sort of thing as if we stole something. Yes. Make sure you bring some in to me, he says. It's not looked on as a kind of sin, as if you stole something or if you broke another law.

Oh, you are getting away with something boys. But, Mr. Speaker, you are indeed breaking the law and these incredible increases in provincial taxes on tobacco and alcoholic products, Mr. Speaker, are making it more attractive. People are indeed making a very good living, thank you very much, from illicit alcohol and tobacco, in not only that part of the Province but in other parts. There is a big difference now in the prices between here and Nova Scotia and New Brunswick, Mr. Speaker, so that kind of a black market trade is going to increase substantially.

So, Mr. Speaker, all of these things have a negative impact on the economy of the Province and they make us less competitive. The hon. gentleman Opposite said: what will we do? Well, I think we have told them one thing we would have done, is reduce retail sales tax. I think we would look at other ways of raising revenue as well. I think we would look at other ways of creating employment as well. I think we would look at some of the job creation programs and lets make them - unfortunately we have to have them, this government in trying to play games with the numbers in their Budget eliminated, for example, some of the employment programs funding last year and then they had to bring it back in again, give the Minister of Social Services another $13 or $14 million by way of a special warrant.

We told them they were going to have to do that, and I believe they knew they were going to have to do that but in order to balance their Budget, back last March, they took that funding out and said nobody will argue with us when we put it back in again. Of course it is very difficult for us to oppose job creation funding that we told them in the first place they were going to need. It is only a way, Mr. Speaker, of playing numbers, playing games with the numbers in trying to balance a budget. Now, that kind of money had to be there but I say unfortunately it has to be there. We do not like that kind of program but this government has finally come to the realization that it is a fact of our economy today and we do have to have it. Well, I say to them yes, lets have them but lets use them wisely.

Let us use those programs. Instead of painting fences let us use those programs by planning ahead of time. And, here was the great injustice in what was done last year, that the money was not made available in the Budget so that the various departments could plan ahead of time so that organizations and agencies that could take advantage of the money could plan ahead of time. There was a great rush again on an emergency basis, an emergency employment response program, we called it. Well, we saw where some of that money was going. Certainly in my district we found out where some of it was going and how many jobs were created. None, in most cases, but I will not get into that again as pleasant as it is.

Why do we not use that money more wisely? Let us plan to spend that money and to create those jobs. I think the hon. the Member for Port de Grave said it is not government's business to be creating jobs except in emergency situations. I could not agree more. His own Premier said that we have to use private enterprise to create jobs. Let us create the economic climate. That is the name of the game here and that should indeed be our long-term strategy but nothing in the recent mini-Budget does anything to create an economic climate of any significance. We had a few little tidbits thrown at corporations and small business, insignificant, their impact will be almost negligible. The minister says a $10 million benefit to companies. Perhaps he is right. We accept him at his word, but on the other hand you are taking $80, $90, or $100 million out of the pockets of consumers and businesses, Mr. Speaker, through all these increases that were announced, particularly through personal income tax. And you are going to take out another $100 or $120 million in public service payroll, if the Premier's statement that we will negotiate but we will negotiate decreases, I was told by the minister's staff they are looking at a 5 per cent decrease. Well, now you are talking another $120 million that is going to be taken out of the economy, so to stand here and say: look at all the good things we did for business by giving them $10 million in tax breaks but on the other hand we are going to take $200 million out of the economy, has done nothing for this economy. It has undone the good that the federal minister did in his statement of a couple of weeks ago. Let us do something to stimulate the economy.

If we are going to give the Minister of Social Services some money to spend on short-term employment projects in order to get people actively employed let us do it through businesses. Let those businesses benefit from those hours of labour that will be created by that. Let municipalities benefit. Let them provide some jobs that are providing some service to the people of the Province. Let's provide some day-care centres perhaps, so that other people can get out and be actively employed, and creative, and produce something into our economy. We all know that we need some more day-care assistance for young families. Why can we not use some of that money to create some of those types of benefits?

There are any number of creative ways that it could be used, if we do it up front, if we do it early, if we plan on it. I have seen so much of that money wasted on projects that create a few jobs, but that is all they do. They pay somebody for twelve weeks, but the benefits of that twelve weeks of employment are minimal because they have been ill-planned.

I do not have a problem with creating the twelve weeks of employment, but let's get something back for it. Let's get some benefit into the economy, whatever it might be. Let's get a return on it - and I think we can do that.

Mr. Speaker what we are saying, and I think I showed quite clearly in comparing all of the tax rates for this Province with our nearest competitor as being the Atlantic Provinces, that we are far behind and we are at a serious, competitive disadvantage.

If we are going to have free trade interprovincially - if we are going to remove interprovincial trade barriers - let's remove them all. If we are saying that we cannot provide subsidies to companies because companies in Nova Scotia and New Brunswick will be looking at that and saying: That is an unfair advantage. That is a trade barrier - so is a personal income tax. A significant difference in personal income tax is a trade barrier. It is a disincentive to businesses in this Province. Gasoline tax, as I have said earlier, and my friend from Labrador expounded on, is a considerable disadvantage.

Until we can equalize these things, we do not have a hope of competing, particularly when we have all of the natural disadvantage - the transportation costs. How many times - it is not only me - I have spoken many times on this, but many hon. gentlemen opposite have talked about the high cost of transportation in this Province and the impact that has on doing business. So how do we respond? We give ourselves by far the highest gasoline tax in Eastern Canada.

My friend said: Is there a 30 per cent difference in Quebec? Well I can tell you, there is a 50 per cent difference in the provincial tax between Prince Edward Island and Newfoundland, or Nova Scotia or New Brunswick and Newfoundland. We are now paying 15.7 cents for gasoline, Prince Edward Island is paying 11.7, there is a big difference, I am talking about the provincial tax component. There is a big difference in the tax, Mr. Speaker, and that has an impact, the Minister of Tourism and Culture will know that, it has an impact on bringing tours into this Province, and our retail sales tax has an impact on that and the alcohol tax has an impact on that, and if you are putting a tour together from eastern United States, from the New England States which is one of our big markets to come into Newfoundland, then the cost would be about $300 higher than in any of the other Atlantic Provinces.

Well, Mr. Speaker, our time is almost up and we have to have a vote on this, so I will take my seat, but let me say to you, that this resolution was not brought here lightly, it is brought here quite seriously, knowing the financial implication of the Province, knowing the constraints on government, challenging this government to show a little bit of courage and foresight, lower taxation and put in place some measures to stimulate the economy of this Province.

Thank you, Mr. Speaker.

MR. SPEAKER: Is the House ready for the question?

All those in favour of the motion, please say: 'aye'


MR. SPEAKER: Those against the motion, 'nay'.


MR. SPEAKER: In my opinion, the nays have it.

The hon. the Government House Leader.

MR. ROBERTS: Mr. Speaker, I know I do not need to move the adjournment. Before Your Honour leaves the Chair let me confirm that we shall tomorrow carry on with Bill 28 - The Royal Newfoundland Constabulary Act. My friend for Humber East has a few more remarks and I will gladly hear what she has to say. When we finish that we will go on to the adjourned debate on Bill 57, that is The Leaseholds in St. John's Act. The Anomalies Bill, which is Bill No. 54, and the Residential Tenancy Bill which is Bill 50, and if we finish those by five, we will not have to be back here tomorrow evening.

MR. MATTHEWS: (Inaudible) carrot.

MR. ROBERTS: That is the carrot. The original nice guy, but if not, we will ask the House to sit tomorrow evening.

MR. TOBIN: (Inaudible).

MR. ROBERTS: I am sorry?

My friend for Burin - Placentia West finds a ready residence among some on our side but there may be some on his side who may not resonate as readily. Anyway, Mr. Speaker, I do not need to move the adjournment so Your Honour will leave the Chair. We will be here at 2:00 p.m. tomorrow afternoon.

MR. SPEAKER: Agree to call it five.

The hon. the Opposition House Leader.

MR. MATTHEWS: Thank you, Mr. Speaker.

We are delighted that the Government House Leader has not yet decided that he is going to keep us in after school and that -

AN HON. MEMBER: He is a good boy.

MR. MATTHEWS: Yes, hopefully, tomorrow we make significant progress and if we can do it at all, I am sure none of us really want to - I know I don't and I am sure I speak for most here, do not want to be back here tomorrow evening if it can be avoided, but we will see how much progress we make tomorrow.

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