June 3, 1993                HOUSE OF ASSEMBLY PROCEEDINGS                Vol. XLII  No. 10

The House met at 2:00 p.m.

MR. SPEAKER (Dicks): Order, please!

On behalf of all hon. members, I would like to welcome to the House of Assembly thirty-seven students from Fatima Academy in St. Bride's, Grades VII, VIII and IX, together with their teachers, Diane Williams, Michelle Ridgley and Gordon Pike.

SOME HON. MEMBERS: Hear, hear!

Oral Questions

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

MR. WINDSOR: Thank you, Mr. Speaker.

I have some questions for the hon. the Minister of Finance. Yesterday, the minister, in response to some questioning from myself, indicated that it was the government's objective to balance current account deficit in the short term and, subsequent to his meetings with other ministers in Ottawa, that in the medium term, he is proposing to eliminate borrowing for capital account expenditures. Mr. Speaker, over the last two or three months we have seen the difficulty government is having, to even reduce the current account deficit. I am wondering how the minister is proposing to save the amount of money it would require to also balance, in the medium term, the capital account deficit? We now know that the present Budget estimates, as they stand at the moment, contain a $121 million deficit, until the minister finds the magic $70 million; we also see in the Budget that the minister is borrowing $172 million this year to do some capital works - that is a total of $293 million. How does the minister propose to find that, over the next couple of years, to eliminate all of that borrowing?

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

MR. BAKER: Mr. Speaker, the point that I made was an obvious point I believe, that if we are to get ourselves out of the mess of the tremendous burden of debt that we have, we must plan to, first of all, stop borrowing to pay our light bill, which we hope to do very quickly, and secondly, to aim towards stopping the borrowing of money to do capital works in the Province, in other words, to become self-sustaining. That is our objective in the medium term and, Mr. Speaker, we stick to it.

The opportunity is here because, in the last three years, despite the devastation that this Province has seen in terms of revenues from the Federal Government and decreases in own source revenues, we have managed to hold our own and to control our deficits. We have managed, this year, to reduce the overall borrowing over last year - we have managed to do that in the worst of times. As times improve, as conditions improve, Mr. Speaker, it is only reasonable to assume that we can aim at, one day, paying our own way.

SOME HON. MEMBERS: Hear, hear!

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

MR. WINDSOR: Mr. Speaker, we certainly agree, the minister should not be borrowing to pay the light bill but we are not used to buying houses out of change that we have in our pockets. We normally do borrow to make those kinds of long-term capital expenditures and it is an admirable objective to reduce that amount of borrowing; whether or not it is realistic is what I am trying to get from the minister here. Does he honestly believe he can do that? There are only three ways, Mr. Speaker, to do that. One is to raise taxes, one is to reduce expenditures of government and the third is not to spend money on capital at all. Now, how does the minister propose to do that? The only way he can save money - he has already said, we have taxed to death, we can't tax any more. If we are going to have any capital expenditures, the only way we can do that is by reducing expenditures and that means reducing wages and benefits to the public service. Will the minister tell us what impact does he see this having on wages and benefits to the public service and how long does he propose that the people of the public service will have to live with these conditions?

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

MR. BAKER: Thank you, Mr. Speaker.

The member's analysis is a little bit incorrect because there is another alternative, and that alternative is increased revenues through economic activity, Mr. Speaker. Obviously, if the problems that have existed for the last number of years continue to exist, then it is not realistic to achieve that target, but, Mr. Speaker, we believe that we have turned the corner. We believe that there are better days ahead; we believe that increased economic activity will mean that we will one day be able to pay our way.

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

MR. WINDSOR: Mr. Speaker, I can certainly agree with the statement by the minister; it is a great Tory policy he is putting forward. Unfortunately, this government is more bankrupt of ideas on how to stimulate the economy even than we are financially, so we don't see any dependency on increased economic activity.

Mr. Speaker, $282 million, the government is spending this year, down from $335 million last year. The minister is still having to borrow $172 million in order to build schools, roads, water and sewer systems, to repair those facilities, to build hospitals, to do other capital works. How does the minister, Mr. Speaker, think that he can - is he planning to continue cutting capital expenditures? We are down from $335 million to $282 million this year, $50 million less going into the economy. Does he continue to plan cutting capital expenditures year by year? How much does he propose to cut year by year? And how many jobs will be lost in this Province as a result of these cuts?

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

MR. BAKER: No, Mr. Speaker, we do not plan to cut capital expenditure year by year by year. There are certain things that absolutely must be done to maintain the infrastructure we have and to improve the services to our people. So there are things that must be done, in this Province, on capital expenditures. I don't know what the lower limit is, but we have probably come pretty close to that lower limit right now, so I can tell the hon. member that our plans do not include continually cutting capital expenditure.

MR. SPEAKER: Order, please!

I am having a little trouble hearing the hon. the minister.

The hon. the Member for Mount Pearl, on a final supplementary, I presume.

MR. WINDSOR: Thank you, Mr. Speaker - one final supplementary.

The minister's statements yesterday and today are doing nothing to put any confidence into the economy, particularly in the construction industry and the other areas of the private sector. He is not going to do anything to move the economy this year in spite of his claim that economic recovery is the way to try to balance the Budget.

Mr. Speaker, could the minister tell us: How does he propose to do this? What is he proposing to do to try to stimulate the economy? Does he propose to have any capital expenditures whatsoever over the next couple of years?

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

MR. BAKER: Mr. Speaker, perhaps the best thing we can do to ensure that we recover is to be very careful now that we don't overburden ourselves with debt that would have to be repaid in future years and that accumulates interest that we have to pay year by year, by year out of our current account. One of the most productive things we can do is to limit the amount of debt that we build. That is one thing we can do to make sure that we recover, as recovery comes in North America, as a whole. Because we, Mr. Speaker, in this Province, do not control our own destinies. That may be a revelation to the hon. member, but it is a fact. It is almost an axiom, that we do not control our own destinies in terms of economic development. We are subject to what happens in North America and to what happens in the rest of Canada, and, Mr. Speaker, I can see a recovery coming. I think everybody agrees that the recovery is coming.

No, Mr. Speaker, we do not plan to cut and keep cutting capital expenditure. We intend to do what we have to do to maintain the services but, as the recovery comes, more money will come. So, Mr. Speaker, what we have to do is make sure, as revenues increase, that we don't go hog-wild - the way the government did seven, eight, or ten years ago as revenues were increasing - go hog-wild, spend all of the increased revenues and go borrow even more to spend. We have to control that.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. the Member for Waterford - Kenmount.

MR. HODDER: Mr. Speaker, two days ago, at the end of Question Period, I was asking the Minister of Education about the dramatic decline in percentage of sixteen and seventeen-year olds attending school. For example, the participation rate for sixteen-year olds dropped from 97 per cent in 1991 to 91 per cent in 1992. A decline of 6 percentage points. There was a similar decline in the participation rate for seventeen-year olds. Has the department done a study to find out why sixteen- and seventeen-year olds are dropping out of school? Is there a study under way? Has the minister established a protocol to find out why there is such a dramatic increase in the number of dropouts this school year?

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

MR. DECKER: Mr. Speaker, there's no doubt that first looking at this statistic is somewhat frightening. However, after the matter was raised by my friend for Waterford - Kenmount I did go back to the people who did the research, and we found at least an explanation as to what happened.

In actual fact, there are 9,814 sixteen-year olds in the school in 1992-1993. Now, if we were to use our population based on the 1986 Census there would be 10,810 students in the classroom. However, in actual fact, when the 1991 Census came out we discovered that the number of sixteen- and seventeen-year olds had dropped. So the statistic is wrong. It was based on a projected census. Census Canada do that. At the time that this book went to print they were using the estimated, the projected population, but the projected population was wrong, Mr. Speaker. There are actually over 300 less students than we thought, therefore the picture looks a little brighter.

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

MR. J. BYRNE: Thank you, Mr. Speaker. Just over a year ago government transferred the responsibility of the St,. John's Fire Department to the City of St. John's. Because of that transfer there was a massive increase to the towns involved in it which were using that service. These towns have seen their costs increase as much as 900 per cent. Representatives of the towns involved met with the Premier and the former minister. Following that meeting the minister told the City of St., John's in writing that the formula that was being used was unfair and they should come up with another formula. Does the present minister agree with the position taken by the Premier and the former minister?

SOME HON. MEMBERS: (Inaudible).

MR. SPEAKER: Order, please!

The hon. the Minister of Municipal and Provincial Affairs.

MR. REID: Mr. Speaker, I'm not really in a position to be able to answer. Whether I agree with the Premier or not, you've certainly put me in a spot to say yes, I have to agree with the Premier.

I will honestly say to the member that when I have a chance to review that particular question I will do that and quite honestly come back and give the proper answer - not necessarily the one that you are looking for, but when I get a chance to review it I will come back and give you an answer on it.

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

MR. J. BYRNE: Mr. Speaker, the city is still charging communities on the basis of a formula which the Premier and the former minister agreed was not fair. If and when the present minister comes to the same conclusion, what action will he take to ensure the charges for fire fighting services are assessed at a fair rate?

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

MR. REID: Mr. Speaker, I would think that the hon. member, in the answer to his first question, would give me the opportunity to look at the whole thing and study the whole issue. Then I would be glad to come back in the House and give him an answer, but I cannot answer his question today because I was not briefed on the question, I have not made up my mind one way or the other on it, and until I do that I ask the hon. member to give me the opportunity to do some work into that - to do some investigation into that particular area - and I will gladly come back to the House and answer his questions.

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

MS. VERGE: Mr. Speaker, I have a question for the Minister of Health about services for cancer patients in Western Newfoundland. People in Western Newfoundland were very upset when, for seven months, from last September until the end of April, cancer radiation specialists stopped visiting the cancer clinic in Corner Brook and cancer patients from Western Newfoundland either had to go to St. John's for services they had been able to get in Corner Brook for twenty-one years, or go without.

Can the minister assure the House that in the foreseeable future radiation specialists will visit the Corner Brook clinic frequently and regularly?

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

DR. KITCHEN: Mr. Speaker, the visits by the cancer specialists to Corner Brook have recommenced and it looks like we will no longer be as short as we were. There is, in Canada, a shortage of cancer specialists, but at the moment it looks like things will be alright - but as far as giving a guarantee, that is impossible to give, but it looks like that situation has been resolved.

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

MS. VERGE: Thank you, Mr. Speaker. A supplementary to the Minister of Health.

Even with radiation specialists visiting Corner Brook again, radiation therapy and other services for cancer patients are available in this Province only in St. John's and patients and their relatives have to come to St. John's and stay in St. John's for lengthy periods at considerable expense.

Will the government give more financial assistance to cancer patients than is now provided, and cover all reasonable travel, accommodations and meal expenses?

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

DR. KITCHEN: Mr. Speaker, we have in place in the Province a program to assist people who can't get treatment in their own communities and who have to go elsewhere. The formula per year is the government pays half over the first $500. So that if a person has $600 worth of expenses, we take off the $500 and fund fifty dollars. But if the expense is quite heavy we take off the $500 and fund half of what's left.

I've asked officials in the department to look at that formula to see - as a matter of fact, I have even received a print out of the number of people who have very excessive travel claims. There are several. I don't know what the financial hardship of these individuals might be because I don't know their circumstances. We are looking at the question as to whether that formula should be revised to make it easier for people to travel away from their communities to get needed medical treatments. Not only for cancer treatment, Mr. Speaker, but for other types of treatment as well.

MR. SPEAKER: Final supplementary, the hon. the Member for Humber East.

MS. VERGE: Mr. Speaker, a question for the Premier. In Nova Scotia, Sydney is about to get a cancer radiation unit, in addition to the facilities in Halifax. In New Brunswick there's a new cancer clinic with full services in Moncton as well as the established clinic in St. John, and there's a cancer radiation unit in Charlottetown, PEI. The government of this Province is now embarking on funding a new, $13 million cancer clinic in St. John's with no plan to put new facilities anywhere else. Will the government respond to the pleas of thousands of people in Western Newfoundland by immediately studying the feasibility of decentralizing services in this Province, in a fair and balanced way, and putting a radiation unit in Corner Brook?

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

DR. KITCHEN: Thank you, Mr. Speaker. It is true that some of the other provinces have more than one radiation centre. I've asked officials to look at precisely what type of radiation is going on and whether they're open or whether they're partly open, or what type of cases are treated there. But in the foreseeable future in this Province, given our population, it looks like there will be one centre for radiation treatment and that will be in St. John's. If we were to have another in Corner Brook, that wouldn't do very much for the people in the Grand Falls area or the Northern Peninsula or Labrador. So the question is how many should we have.

The basic question at the moment is that our best bet to handle the situation is to leave it where it is now, in St. John's, and have the best possible radiation centre we can get. Also, there's a problem of recruiting people to work in these centres. It's not easy to get, as I say, cancer treatment people. If we spread them around it'd be even more difficult than it is now to get appropriate treatment. So even though we'll be looking at the situation - I assured the member of that in the estimates meeting the other night, because she asked the same question here as she asked the other night. She got an answer the other night. But I guess she wants to make it a little more public. Because the press wasn't there the other night. The reason is -

SOME HON. MEMBERS: (Inaudible).

DR. KITCHEN: We are looking at the situation. We want to provide the best possible care to people who are suffering from this dreaded disease.

MR. SPEAKER: The hon. the Member for Bonavista South.

MR. FITZGERALD: Thank you, Mr. Speaker. My question is to the Minister of Social Services. Last Friday the Leader of the Opposition asked the Minister of Social Services about cuts in support of senior citizens and persons with physical and developmental disabilities who are cared for at home, either their own home or foster homes. The minister then said the cuts were being reviewed with a view to offering our people, in all areas, the best possible services.

The district offices of social assistance have been told, and I quote from the department's memorandum: to review each case to determine the absolute minimum number of hours of care that needs to be provided without jeopardizing the safety of the disabled persons.

Mr. Speaker, I would ask the minister: Is that all the people who cannot care for themselves are entitled to in this Province - just the absolute minimum care without jeopardizing their safety?

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

MR. LUSH: I tell the hon. member that we are doing our best to try and cope with the financial situation in which the Province finds itself. I can tell the hon. member that I, nor anybody on this side of the House, would like to cut back in social services to an extent where it is going to be harmful or where it is going to cause any of our people hardship, and we are trying, in the most desperate manner we can, to prevent just that from happening. Our staff, and everybody in social services, is working to their utmost ability to ensure that our people are given the best care and the best attention possible - the disabled, the seniors, and all the people to whom he referred in the question.

MR. SPEAKER: The hon. the Member for Bonavista South.

MR. FITZGERALD: Mr. Speaker, the minimum level of service is what the persons who are now in the care of social services will get. They are the lucky ones. The department memorandum to district offices also says: Applications for new or reopened cases are not to be approved except in cases of extreme emergency. I ask the minister: What, in his opinion, is an extreme emergency?

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

MR. LUSH: I again say to the hon. Member for Bonavista South that it is very easy to get up and to ask these questions in a very sincere manner - and I am sure the hon. member is - but the hon. member and all members opposite should realize, too, the great problem that we are facing in this Province, and I would like to hear hon. members opposite give us some suggestions in social services as to how we could cope with this tremendous problem that we now have.

I can tell the hon. member that we are using every resource that we have, we are using all the people that we have, to the best of our ability, to ensure that our people are cared for in an adequate fashion.

MR. SPEAKER: A final supplementary, the hon. the Member for Bonavista South.

MR. FITZGERALD: Mr. Speaker, the hon. minister continues to say that this is all under review. The fact is, the cuts in home support services are being made because of reductions in the Budget now before this House. Will the minister confirm the memorandum to district offices which says: In order to remain within the 1993-'94 Budget, a reduction of 30 per cent from the 1992 expenditure would be required.

Does the minister realize what hardship and pain that a cut of this size will have on helpless citizens out there in our communities?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. the Minister of Social Services.

MR. LUSH: Mr. Speaker, the member is aware of all the difficulties that are being faced by our people - our disabled people and elderly people and all the people to whom he refers - but I can tell the hon. member that the department is trying its best to cope with the financial restrictions that have been placed upon it, and under these conditions that all of the people in the Department of Social Services are working their utmost to try and ensure that our people get the best level of care.

Now the memorandum to which the member refers was a memorandum that was sent out to all of the social services offices just to give people guidelines as to the kinds of things that might be done in discussion with people in order to meet the restraints under which we find ourselves. They were not meant to be definitive decisions or definitive actions. They were just general guidelines, and I find that hon. members are taking them and using them as if they were meant to be definitive guidelines - that they had to be followed right to the nth degree. I say again that these were just general guidelines to be given to the workers - to the social workers in their respective offices - just to be followed in a general way.

MR. SPEAKER: Order, please!

The hon. the Member for Placentia.

SOME HON. MEMBERS: Hear, hear!

MR. CAREEN: Thank you, Mr. Speaker. I would like to address this question to the Minister of Works, Services and Transportation.

The day before yesterday the minister unveiled a new vehicle license plate that will be manufactured in Nova Scotia.


MR. CAREEN: The minister said it would take eight or more years before every vehicle in the Province would be equipped with the new plates. How many plates will have to be made to equip all vehicles and how much will that cost the Province and vehicle owners over the next eight to ten years?

MR. SPEAKER: The hon. the Minister of Works, Services and Transportation.

MR. EFFORD: Mr. Speaker, there is approximately $50,000 for this year to purchase plates. The number of plates to be purchased over the period of time, I think will cover around 394,000 vehicles totally. I cannot give you the total cost. I can tell you very clearly that when I asked a question to the deputy minister at that particular time about the contract, he told me very clearly, and it makes all the sense in the world, that it cannot be manufactured in Newfoundland because of the dollar cost of making the number of plates just for Newfoundland. It takes a period of eight to ten years to distribute all those plates. So, to make about $50,000 worth of plates for one year would not make any sense at all.

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

MR. CAREEN: Mr. Speaker, I would have no objection to spending money on new plates if it was spent to create jobs and opportunities for business in this Province of ours.

SOME HON. MEMBERS: Hear, hear!

MR. CAREEN: We have made plates here in the past. Why could we not do it this time? Why will government not use its purchasing power to create jobs in this Province?

MR. SPEAKER: The hon. the Minister of Works, Services and Transportation.

MR. EFFORD: Mr. Speaker, this government has no objection to creating jobs in this Province. In fact, we are doing it with a better record than the former government did for seventeen years. Let me tell you very clearly that we will accept bids from any company, any individual, any person or anybody who wants to start up a business in this Province, no problem. The problem is, when we called for tenders there was nobody who submitted tenders to make them in the Province. The only one was in Nova Scotia, which as far as I understand, is the only one in Eastern Canada. So, if the hon. gentleman opposite or anybody else wants to submit a bid in manufacturing license plates in this Province we will be only too glad to accept it, providing it is the lowest tender.

MR. SPEAKER: A final supplementary, the hon. the Member for Placentia.

MR. CAREEN: Thank you, Mr. Speaker. Mr. Minister, on our old license plates two decades ago, it used to read the `Happy Province'. Now it is the despairing Province and that is the world of difference. When so many people are unemployed and so many of those with jobs are struggling to make ends meet, how does the government justify spending the peoples money in Nova Scotia simply to change license plates on motor vehicles? Thank you.

MR. SPEAKER: The hon. the Minister of Works, Services and Transportation.

MR. EFFORD: Thank you, Mr. Speaker. We do not take any delight in not having someone do it here in Newfoundland. The fact is there was a company here in Newfoundland awarded the contract and he had to have the plates made in Nova Scotia because that was the only place to have them made. We have no say in that, a tender was submitted. Nobody in the Province, absolutely nobody in the Province submitted a bit for any manufacture or to start up business in this Province. As far as the unhappy Province right now, after seventeen years of total mismanagement of this Province it is going to take us awhile to go back to what should be a happy Province and now it is a world of difference because there is a 'real change' in the Province right now.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. the Member for Baie Verte - White Bay.

MR. SHELLEY: Thank you, Mr. Speaker, my first question is to the acting Minister of Environment and Lands -

MR. EFFORD: World of difference.

MR. SPEAKER: Order, please!

MR. SHELLEY: As the minister knows the paper companies in this Province are using mechanical harvesters in their logging operations. I do not think there is any dispute about the fact that these harvesters do some damage to the forest and in particular to young trees. Has the government done a full environmental study to determine the impact of the harvesters on the survival of our forest resources?

MR. SPEAKER: The hon. the Minister of Forestry and Agriculture.

MR. FLIGHT: Mr. Speaker, I can say with some confidence that no, there has not been a full environmental study done on the impact of harvesters on the forest. We are doing an environmental impact study and a forest management plan for cutting in Labrador which will include of course the assessment of the types of equipment being used by any companies which start to harvest timber in Labrador. But at this point in time, I do not think the harvesting techniques of the paper companies or private operators in Newfoundland have been submitted for a full environmental assessment.

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

MR. SHELLEY: Okay, a supplementary to the Minister of Forestry and Agriculture this time.

Many people, including the present government, blame the depletion of fish stocks on the failure of the federal government to control the use of large high tech-trawlers in the fishery. Is the forestry minister concerned that this government may be making the same mistake in mismanagement of the forest resources?

MR. SPEAKER: The hon. the Minister of Forestry and Agriculture.

MR. FLIGHT: No, Mr. Speaker, we are not making the same mistake that the federal government made in fisheries. Number one, Mr. Speaker, trees do not swim.


MR. FLIGHT: We are managing the forests, Mr. Speaker, on a sustainable basis and if the forest management plans that we approve are followed the hon. member will not have any worry about forestry having the same problems that fisheries had under the management of his cohorts in Ottawa.

MR. SPEAKER: Question Period has expired.

SPEAKER: Order, please!

Presenting Reports by

Standing and Special Committees

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

MR. ROBERTS: Mr. Speaker, the striking committee has struck again and I have our second report here. The committee recommend, Mr. Speaker, that the following members comprise the Public Accounts Committee: The hon. gentleman from Mount Pearl, who is to Chair it, the hon. the Member for Eagle River, who will be the Vice-Chair, and the members will be the Members for Harbour Grace, Fortune - Hermitage, Lewisporte, Burin - Placentia West, and Green Bay.

The Standing Orders Committee: I shall Chair it. My colleagues, the Members for Gander, Bonavista North, Grand Bank, and Ferryland will be the other members of the Standing Orders Committee. I ask that this report be received, please, Mr. Speaker.

MR. SPEAKER: The hon. the Minister of Employment and Labour Relations.

MR. GRIMES: Thank you, Mr. Speaker.

I rise to present the annual report for the calendar year 1992 of the Workers' Compensation Commission, and if I may, Mr. Speaker, I would just like to inform the House of two or three things that I would commend to the attention of all members in perusing the report.

First of all, there is some good news in the report, in the fact that new claims for accidents and injuries were down again in 1992 for the second consecutive year, a significant decline, Mr. Speaker, of 2,527 less than the previous calendar year. The cost of current year servicing of injuries also declined in the 1992 year, Mr. Speaker, from $86 million the previous year down to $83 million. The lost-time accidents and injuries, in fact, decreased by 14 per cent overall from 1991 and, taking into account that the workforce and people reporting through this mechanism decreased by 5 per cent, it showed, again, a clear 9 per cent decrease in lost-time accidents and injuries reported to the Workers' Compensation Commission in 1992.

Also of note, Mr. Speaker, is the fact that the unfunded liability, largely due to a recalculation of future cost based upon the changes in benefits caused by legislation changes introduced last fall, has been reduced from $161 million reported in 1992, to $128 million reported now, for a reduction of some $33 million in the unfunded liability proportion. The overall funding position of the Commission from 1992 over 1991 has improved by a total of 7 per cent.

I commend the report, Mr. Speaker, to all hon. members for their attention, and it will be vitally important for us to assess the report of this current year, 1993, at this time next year to see whether or not the long-term positive impacts that we hope to effect by the legislative changes will be realized.

MS. VERGE: Mr. Speaker, I am still waiting for the answer to the question I asked two days ago.


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

I believe the member may be out of order. It is Answers to Questions for which Notice has been Given, not Questions and Answers. If there is an answer to be given, my understanding of the procedure is that the hon. -


MR. SPEAKER: Order, please!

MR. WINDSOR: She was asking if the answer is going to be forthcoming.

MR. SPEAKER: According to the rules, it is up to the minister involved to table the answer as and when he or she thinks fit and I do not see any time limit being imposed by the rules, so I rule the member out of order.

Are there any Answers to Questions for which Notice has been Given?

MS. VERGE: On a point of order, Mr. Speaker.

MR. SPEAKER: Order, please!

On a point of order, the hon. the Member for Humber East.

MS. VERGE: Thank you, Mr. Speaker.

There are several precedents for Opposition members who have been kept waiting too long for answers, in which ministers have taken notice to rise at this point on the agenda to point out the delay. I have been waiting for two days for the Minister of Forestry and Agriculture to let me know if the animals, the genetically superior swine produced at the Western Swine Breeding Station, still exist -and their days are numbered, Mr. Speaker.


MR. SPEAKER: Order, please!

The hon. member is making a point of order and I would like to hear it so I can answer.

The hon. the Government House Leader.

MR. ROBERTS: Mr. Speaker, I will be very brief. To that point of order, there is no point of order, and even if there were, all the hon. member is doing, is challenging the ruling Your Honour has just made and she cannot do that except by the approved procedure. She wants to be - I was going to say, a man about it - a person about it and challenge Your Honour's ruling. There is a way to do it and we will deal with it, but all she is doing with this specious point of order, in my submission, is doing indirectly that which she cannot and ought not to be allowed to do directly.

MR. WINDSOR: She certainly can do it.


MR. ROBERTS: She challenged the ruling.

MR. WINDSOR: She just did it, and did very well.

MR. SIMMS: She just did it.

MR. SPEAKER: The Speaker doesn't make the rules. The Speaker, reads the rules, interprets them and applies them. The hon. member has no point of order. There is no rule which allows her, during this point in procedure, to question why the minister has not given the answer, so, there is no point of order.

Orders of the Day

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


MR. ROBERTS: Mr. Speaker, my friend, the Minister of Forestry and Agriculture, may have to leave to take a phone call in a moment.

SOME HON. MEMBERS: Hear, hear!

MR. ROBERTS: Before we get on to the bill it might be helpful to members, Mr. Speaker, if I were to state some arrangements that have been struck, as it were, behind the Chair between myself and my friend from Grand Bank and with the concurrence of my friend from St. John's East. I understand that because of the exemplary answers given by my colleagues in the ministry - and I say this without any equivocation, because I have not yet been asked a question in this session of the House, whatever one chooses to read into that - because of the exemplary answers given by my brethren and sister in the ministry, there will be no Late Show today, and instead, it has been agreed that we may use that time for government business. Secondly, in order to enable members opposite, at least all except the gentleman from St. John's East, who, I assume, will not be going to the Tory Convention in Ottawa -

AN HON. MEMBER: Don't assume that.

SOME HON. MEMBERS: Hear, hear!

MR. ROBERTS: Alright, I withdraw that assumption, Mr. Speaker. In order to accommodate any members opposite who wish to go to the convention in Ottawa next week, we will be adjourning the House on Wednesday and not meeting Thursday, Friday, or Monday. I gather that Friday is a work day in Ottawa, if that is not an oxymoron, but Thursday and Monday will be given over to travel, one to celebrate and one to lick their wounds, whatever, depending on whether Kim or Jéan wins the temporary right to be Prime Minister of Canada. It has also been agreed - and I do ask for unanimous leave to make sure this is so - it has been agreed by the House Leaders, with the concurrence of my friend from St. John's East, that next Wednesday will be a business day in the normal sense. Perhaps Your Honour could ask the House for concurrence and if that is agreed then we will get on with the regular business of this day and carry on with the business of the House.

MR. SPEAKER: Thank you.

The Opposition House Leader.

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

Just a brief comment in response to the Government House Leader. Yes, indeed, we are quite willing to forego the Late Show today because the government, by way of co-operation, has agreed to close the House for a few days to allow members to go to the Leadership Convention. To show gratitude for that and to show that we don't always oppose, and stall, and block, we have offered to do at least another half-hour of business of business today. As we get closer to adjourning for the Summer, I am sure the need will arise for further and greater co-operation. I want to say to the Government House Leader that with the recent polls, and not disclosing where I stand in support for the leadership, I think, it will be a Jéan that will win the Prime Ministership, and it will be Jéan with a `C' but it will not be Chrétien.

On motion, Private Members' Day, on Wednesday, 9 June, dispensed with and given over to government business.

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

MR. ROBERTS: Mr. Speaker, could we please call Order No. 7 which is Bill No. 5, and when that is done we will proceed with some more second readings for the balance of the day, Sir - or if that is done.

MR. SPEAKER: Order No. 7. "An Act To Amend The Taxation Of Utilities And Cable Television Companies Act."

MR. ROBERTS: The Member for Humber Valley, I think, adjourned the debate.

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

MR. WOODFORD: Thank you, Mr. Speaker.

Mr. Speaker, I would like to make a few more comments on this particular bill. I spoke for a few minutes the other day. It is under the other number. I had Bill 11, under the previous session, instead of Bill 5.

A few more comments, Mr. Speaker, pertaining to this imposition of the 2.5 per cent on utilities in the Province. I would like to start by being slightly repetitious. I made a comment the other day pertaining to the Federation of Municipalities in the Province and other councils who have approached me concerning this 2.5 per cent imposition of tax on utilities.

One of the concerns of the Federation of Municipalities, as I stated before, and I will say it again here for the record, this evening, was the principle of the Provincial Government establishing a regime of municipal taxation for public utility companies and cable companies. They stated then, and they say today, that they were supposed to be a partner with the Department of Municipal Affairs in anything they do pertaining to tax increases or taxation in this Province. This would set a precedent because it is going outside The Municipalities Act in that role, and I quote: 'Municipal councils should have the right to levy local taxes within the general guidelines established by The Municipalities Act.'

Mr. Speaker, if this is going to be the case, then municipalities in the Province, both small and large, except for the municipalities that are governed under a separate act - like the City of St. John's, the City of Mount Pearl and, I think, the City of Corner Brook, which are governed by a separate act - they would all be governed by The Municipalities Act. Under that act now they are allowed to do two things. They are allowed to collect on gross, and some of them collect at least 2 per cent on utilities in the Province.

Where the problem is going to be with this is not so much the 2.5 per cent. That is, in some ways, going to benefit some municipalities - the fact that there is a 2.5 per cent increase. But, in other ways, it is going to - for instance, the cable companies. The minister is going to have to do something about the cable companies. If this bill is passed next week and the cable companies don't pay, if they hesitate or they are a bit reluctant, then the minister and his department are going to have to introduce further legislation or bring in further regulations so that the cable companies will pay up. They have to be made to pay up.

A funny thing I find about utilities - utilities in the Province, really, have a monopoly. They have a monopoly on telephones in the Province, a monopoly on electricity and, as far as I am concerned, there is somewhat of a monopoly on cable television in the Province. The bigger you are, the stronger you are, the more money you have, the better you can distribute, the better you can lobby, the better for everything - and Newfoundland Light and Newfoundland Telephone have shown over the years that whenever they wanted an increase - I mean, what other individual or what other company in this Province has the luxury of starting a business anywhere in the Province and being guaranteed a return on their investment?

All Newfoundlanders and Labradorians, all small businesses in the Province - nobody has that luxury; but Newfoundland Telephone can go to the CRTC for an increase. They can be guaranteed a certain return to their shareholders. The cable companies can go to the CRTC and be guaranteed a certain return to their shareholders and investors. Newfoundland Light and Power can go to the PUB and be guaranteed a certain rate - and I think that in the case of Newfoundland Light it is something like 13 per cent. What company in this day and age, in the times that we are in, can be guaranteed a return of 13.2 per cent on their investment to their shareholders? Nobody else can do it.

We have businesses in this Province today, both big and small, who are suffering because of recession and because of government policy and because of, in some cases, their own problems with management. But none of them have the right, regardless of what they are taxed, they do not have the luxury of going to a PUB board or CRTC or anything else to try to be guaranteed a return on their investment - and that is what is going to happen.

Municipalities put up the mil rate, for instance, from three to four, six to seven, seven to eight - businesses have to pay. Municipalities put a taxation of 2.5 per cent on utilities in the Province - both Newfoundland Telephone and Newfoundland Light, and the cable companies and what do they do, Mr. Speaker? They go right on to the governing body, namely, the PUB or the CRTC, and ask for an increase to cover the rate of the increase of taxation that is put on by the municipality. So they can't lose. How can they lose? Regardless of what we tax them, they come right back to the consumer.

To use threats in letters to municipalities to say that they are even going to mark it on the bill, even going to put it on the bill, that this is a tax imposed by a certain community in this Province, to me is dictatorial and there should be some kind of a regulation. The minister has to take note of that particular one. That is the main one. Newfoundland Light and Newfoundland Tel, no doubt, will pay, albeit they are going to try to pull some fast ones, as they did with some municipalities in my district, and say that their expenses are reduced by almost 50 per cent. If anything, Newfoundland Tel's and Newfoundland Light's revenues from the municipalities in this Province are higher, and will be higher.

It is funny how utilities, some of those larger companies, respond to actions when someone else starts to come in on their territory. Just a few months ago, when the U.S. networks, the cable companies in the United States, threatened - didn't threaten, I suppose, that is the wrong word, they sort of announced that they were going to bring in this so-called Death Stars. What happened? They said they were going to bring it in - and to explain briefly, it is an eighteen-inch dish that goes on each home, no matter where it is in Canada or the U.S. You pay $1,000 to get hooked up, you pay twenty-five dollars a month, and you can bring anywhere from 150 to 300 channels into your home from all over North America or wherever.

What happened? Two days later, the cable companies in Canada started to lobby the CRTC saying there was no such thing, and no way should the U.S. market be allowed to bring this new so-called Death Stars into Canada - no way. So they lobbied. It is rather ironic that this utilities bill is on today because the announcement is going to be made this evening by the CRTC.

AN HON. MEMBER: What announcement?

MR. WOODFORD: The announcement is coming this evening from the CRTC. It may be out now. I didn't hear it before I came into the House. But it is going to be announced this evening on the CRTC ruling pertaining to a number of things, but namely, how the cable companies are going to be licensed and policed when it comes to the introduction of Death Stars, and if the United States market will be allowed to come in here.

All of a sudden, the cable companies in Canada were taken aback. They figure there was something wrong because of someone coming in. They are not providing the service. They are doing it in the larger centres, they are doing it in the nucleus of a community, in rural Newfoundland, but the rest of the people have to sit back and take no for an answer.

Mr. Speaker, municipalities in the Province today - it is not only the imposition of 2.5 per cent on utilities. Municipalities in this Province today are being hit hard. They have been hit hard by the recession; they have been hit hard in the last four years by the reduction in government funding to municipalities under the municipal operating grants and the formula for the repayment of capital debt is unreal. They have been hurt in more ways than one, and now, with the imposition of a 2.5 per cent tax on utilities, this is another way - utilities, if they are stopped from coming back to the consumer and coming back to the taxpayer in the community, then there is no problem. But if they are coming back and going to pick up that 2.5 per cent, really what it is going to be is a tax on consumers. It will be a consumer tax. Because you are taxing the utility companies, they will just come back and ask for another 2.5 or 3.5 per cent increase in their mil rate, and then the municipality has to end up paying the brunt again, the consumer has to end up paying the cost.

That is one of the concerns I have with regards to the utility companies, Mr. Speaker. Municipalities again this year, just announced yesterday, that the municipal operating grants for the road components are gone down to thirty-nine dollars. I would venture to bet before this year is out, that the total road component for municipalities in this Province will be wiped out completely. What will happen? That is one of the questions I asked just yesterday to municipalities in the Province when the road component of this particular grant is gone. What will happen, Mr. Speaker, is this, they will start to hit the equalization component and the local revenue component. There is nowhere else to go.

One of the other concerns, Mr. Speaker, that has to be highlighted, in the announcement by the former minister, Mr. Hogan, in the second page of his ministerial statement, effective January 1st, 1993, that revenues generated from unincorporated areas will be remitted to the Province's general revenue fund. Now, Mr. Speaker, local service districts in the Province as we know, do not collect taxes. They collect a fee, a so called fee, they levy a fee. They are not allowed to collect so called taxes or collect any grants from the government. That is why municipalities in this Province have made applications to become councils, community councils or town councils whichever, and I cannot understand for the life of me why the department is hung up on granting the individual municipalities their right to do so. Why shouldn't they? They can collect the taxes, really it has taken the government off the hook. They will be collecting taxes in an incorporated area instead of an unincorporated area and then they will become eligible for anything that comes under the system, under the municipal operating grants system.

What is going to happen here, Mr. Speaker, is they are going to take all the taxes, the 2.5 per cent levied on the cable companies, Newfoundland Tel and Newfoundland Light and put it back into the general revenues of the government. That is where the 2.5 per cent of all unincorporated areas in the Province are going to go. That revenue is going back into government coffers.

One of the other statements made by the minister on page three, is debatable. Not only that, it should be reputed, is that as indicated revenues generated from unincorporated areas will be remitted to the Province's general revenue fund. This recognizes that the provincial government generally provides municipal services in these areas. Now, how could a minister responsible for municipal government in this Province write such a statement? The government is responsible for municipal services in these areas. If this minister is not careful, and this is a bit of advise, he does not have to heed it at all, but based on the record of the previous two ministers, the Member for Waterford - Kenmount and the Member for Placentia, all the present minister today has to do is just look over his shoulders and look for the previous two ministers. Where are they?

The first brought in the great amalgamation fiasco, the second followed that and tried to follow up on it, he is gone, the two of them are history. Municipalities in this Province are not to be fooled with. They are not to be fooled with, they are a strong force and the message gets out there and I know that both of those particular gentlemen, their losses cannot be attributed only to what was done pertaining to amalgamation but a good part of the adverse publicity generated from those particular decisions had an affect on those two gentlemen. The two former ministers who are not with us today.

I suggest to the present minister, be careful of the civil servants, be careful of the bureaucrats. Remember, keep one thing in mind, that you are the one who is going to have to knock on doors after four years, the people who are serving you in your department will still be there. They will still be there when you are gone, they will still be there when I am gone. They do not have any worries about knocking on doors. We are the people who will be answerable after three or four years. So, I say to the minister, not only to him but to other ministers as well, be careful, because if a minister is not strong in his department - if he is not strong and has a strong backbone and hasn't a tendency to be swayed, then he's going to survive. But if he has a tendency to be swayed, you aren't going to last long, I can assure you that. Because they are going to tell you when to come and when to go and what's right and what's wrong. The politics in all of it will be swept aside when someone sits down by the desk and says: Minister, we can't do this and we can't do that. So I say to the member - I think he's been around long enough to know that what I'm saying is absolutely true. He's probably starting to experience it, especially the last couple of weeks. Not all they say is Gospel, I can assure you.

Mr. Speaker, to say that the provincial government generally provides municipal services in those areas is wrong. That is wrong. Most of the things provided in local service districts in this Province are roads. There are quite a few areas in the Province where the Department of Works, Services and Transportation plows the roads in the wintertime and grades them in the summertime. No question - and maintenance besides. But garbage? It's paid for by the people, on a fee collected by the people. Street lighting is paid for on a fee levied by the local service district and paid by the people. There are all those other things.

Water. If there are any water services in those particular areas they usually have their own little water committees. Or if they're hooked up to a town like the town of Deer Lake in our area they pay the same rate as the people in Deer Lake. The only other difference would be any monies allocated under the community water services program. That last year was $1 million for the whole Province. I looked at the estimates the other night and that's down, I think it's down $50,000 this year, down to $950,000.

That's the kind of money that would go directly into a local service district or - not only a local service district, but any unincorporated areas. Because we have local service districts that are referred to as unincorporated areas, but then we also have areas in the Province that are not even a local service district. They just have water committees and so on, and that's how they survive, by collecting a fee. They're not even a council. They're not a town council, not a municipal council, they're nothing. That's why I say to the minister, I know there are some requests in from municipalities - there are a couple of municipalities in my area - to become town councils. I say to the minister that it would probably be a good idea to act on it. Because at least then they (inaudible) collect taxes from the people. Right now, if it costs fifty dollars to collect garbage they collect fifty. So it would be an addition and it would help out the whole municipal system if some of those requests were looked at and acted on.

Just another couple of comments, especially pertaining to the estimates on Municipal and Provincial Affairs. One of the things that I would like to make a comment on, I mentioned earlier about the drop in the road component of the municipal operating grants system. Why, last year, when the budget - there was $44,950,000 in grants and subsidies under 3.2.04 in the estimates allocated for municipalities in the Province. The revised, if anything, should have shown more. But the revised, especially in a department where municipalities have been crucified over the last four years, has actually shown a saving of $650,000, from what was budgeted and what was actually spent in 1992 was $650,000.

Now if it had been $650,000 the other way I'd have said to the minister: yes, well and good. But to say and look at a budget and then look at a revised budget and see $650,000 saved on the backs of municipalities in the Province to me is wrong.

To add insult to injury, next year the budget for municipalities in the Province is $42,500,000. We know full well that based on those figures, based on the amount of taxation that's going to be collected under the 2.5 per cent on utilities, that the department next year has absolutely no choice but to cut under the equalization component or the local revenue component. Based on the figures in the estimates of this year's Budget, that is what will have to happen. There are only two other components. Household they cannot touch because the number of households in a municipality is pretty well fixed. The local revenue component after this year is gone. There are only two other components to hit, and they are the local revenue component and the equalization component.

Mr. Speaker, I do not know what the former minister saw when they brought in those two components, but I can assure you that under the equalization component, if property values go up and households go up in a municipality then you would get less equalization components. That is what will happen all around this Province. That is the way that this particular component of the program will be out.

I can see, in the total grants and subsidies for municipalities over the next number of years unless - there is only one other thing that can stop it, and that is the minister and his department or his officials do put a cap on municipal funding. They are going to have to stop it. If they do not soon stop it, it is just going to keep sliding and sliding and sliding. I cannot see it going up. I just cannot see it going up - no way in the world. Especially with a $650,000 saving this year and a 2.45 saving next year, there is no way for it to go up.

So I say to the minister, as a word of caution, and I say to members opposite - I know members opposite, especially new members from rural parts of the Province, and I say to the Member for St. John's North as well, because their council have been affected by it and will be affected by it. An example of that - a prime example of what has happened with the amalgamation process in this area - look at what is happening in the Goulds. When we brought the Goulds into the amalgamation process, the people in the Goulds pay the same mil rate now and they are expecting services - which is human nature. We would all feel that way, no matter where we lived in this Province, if that particular thing happened.

That is what I am saying to the minister with regard to the amalgamation process in the Province. Like you did with Shea Heights years ago - what did the former administration do to Shea Heights? The Member for St. John's South should go back and check it out. How smooth did it go? The people of Shea Heights -

AN HON. MEMBER: Phase in.

MR. WOODFORD: Phase in, right - a transition period phase in, no problems over an eight to ten year period. There were problems, yes. I cannot -

AN HON. MEMBER: (Inaudible).

MR. WOODFORD: Well that is what is happening. Yes, but let me explain because if the council now - you say: Then the council whacked it to them. Right, because what is happening now, the councils are whacking it to them and the smaller municipalities that are amalgamating with those larger centres get nothing - cannot get anything for eight or ten years because the municipal infrastructure in the larger towns have to be brought up to a level where they can accommodate the other municipalities that are being amalgamated, and it is true. That is what is happening.

AN HON. MEMBER: (Inaudible).

MR. WOODFORD: Not all areas of the Province were blessed with that. We have the Premier on record, and we have two former ministers on record, saying that there is absolutely going to be no monies up front for amalgamation process in this Province - nothing. There is not going to be any transition period. There will be a transition period with regard to the implementation of a program, or the phasing in of the municipalities themselves, but no monies up front - no bucks up front. So you know what that means. In my particular area it will mean that the people of Spillway and Nicholsville will have to pay immediately - as soon as the thing goes in - the same monies as they pay in Deer Lake, unless there is some other regime brought in, and they will not see any services for eight or ten years.

This is why I said to the minister the other night in the estimates, and he said it before, the concept is a good one. The concept is a good one. The approach is what is wrong.

AN HON. MEMBER: The appraised value (inaudible).

MR. WOODFORD: The appraised value of what?

AN HON. MEMBER: Property.

MR. WOODFORD: The appraised value of property. Here again I can give the member all kinds of examples. I can give you all kinds of examples on appraised value. What happens in rural Newfoundland with appraised value? Under your equalization component, every time your property value goes up and your households go up your equalization payment goes down. It goes down. Your local revenue component, what happens?

AN HON. MEMBER: You are paying your fair share.

MR. WOODFORD: Yes, even when you are paying your fair share, it does not matter where it is, the only thing about it is, the difference between paying your fair share. I am not arguing with the gentleman, I am only pointing out something. The difference between paying your fair share and getting a fair service, that is the problem. If they could come into Nicholsville and say in year one we will put in part of your water and sewer, year two you will get all your water and sewer or year three you will get something, but right now there is nothing and they know they have to go from nothing to 7.5 mils - I would not say nothing, but nothing in the sense of a tax structure as such, from a fee back to the (inaudible) and there is only - yes, you have areas in and around here affected the same way. We have an example, as I was telling the Member for St. John's North just now, you have a prime example in the Goulds, which the hon. Member for Kilbride represents.

They have to pay the same tax structure now as St. John's but at the same time there is no phase in for the service and that is where we have the problems today, and under the old transition period for the Shea Heights one which comes to my mind, because I used to be around the Federation then with hon. members back in 81-82, there was a transition period there, there was a phase in period there and it went fairly smoothly for people who did not want to be amalgamated really.

But now that I mention 1981-82, I have to refer especially about the present minister, Mr. Speaker. I have to tell you a story about a time we spent in Gander one really, hot weekend and we had a Minister of Municipal Affairs then, she was representing Gander, the hon. Hazel Newhook, she was in Gander that day. I was a rookie too, just being elected a councillor in Cormack, a small community and I got out among the big fellows and I said: what am I doing here? And I mean big fellows in more things than just communities; some were very big in size.

MR. W. MATTHEWS: Hogan was there, wasn't he?

MR. WOODFORD: I won't mention any names, but, Mr. Speaker, we had one hot weekend. That was the weekend that some of the members here today, especially the Leader of the Opposition, can certainly remember and my colleague from Mount Pearl, because he was there the same weekend, come to think of it, and that was the time the former administration lowered the grant we used to get under the old package for municipalities. There used to be a social assistance component and a population component and fifty cents on every dollar for property tax.

AN HON. MEMBER: The minister remembers that.

MR. WOODFORD: Oh, the minister remembers it, does he ever remember it, and they lowered that from fifty cents down to forty-five cents. Now, Mr. Man, if you want to hear something, if you want to hear a racket, that minister in Gander, that Minister Newhook. The hon. Member for Carbonear and I must say I was a -

MR. REID: You supported it.

MR. WOODFORD: I was one of the quieter of the four or five who spoke, I mean I never spoke up too much at that time, I used to be -

AN HON. MEMBER: You were civilized then.

MR. WOODFORD: Yes, civilized, fairly civilized. I changed over the years a little bit, but that was a hot weekend. I have to draw that analogy and just compare the two because I cannot understand municipalities in the Province and I say this today, I do not care who carries it to what municipalities in the Province. I was from a community of 750 people I spoke up, the hon. Member for Carbonear was from a community of, I do not know, 3,000 or 4,000 at that time I suppose, 6,000, he spoke up. The hon. Member for Waterford - Kenmount, he spoke up, but look at what happens today, what is happening in this Province today. Go back four years ago, if you had seen that back in the early 80s or the late 70s, there would have been riots in this Province, Mr. Speaker.

What was done under the Municipal Operating Grants in the Province in 1989 was nothing but the worst I have ever seen, the worst treatment, and not a word, hardly a word. Not only that, but then to come in in '90 and cut them in mid-year, adding insult to injury, and then to stick the knife in a little further, come in '91 and cut it again, mid-year, to stick it in and twist it, came in in '92 and cut it again, and this year it is gone altogether. It is not broken off yet but it is into the bone. The tip is gone off it so there is nowhere to go but get at the bone. Mr. Speaker, I say to the present minister today that what he did in early 1981, or 1982, I think it was, what he did then, he should stand up in the House today and defend those municipalities in the Province and his own community the same as he did in 1981-82.

SOME HON. MEMBERS: Hear, hear!

MR. WOODFORD: For the sake of five cents on property tax, and what is gone today? We have to do nothing else only take out the road component of $2000 a kilometre four years ago, down to nothing. It is just as well to say nothing today because $39 is nothing. It is just as well gone. I can go a little further, the formula for repayment on capital debt is the biggest insult that was ever put on a municipality in the Province, the new formula for the repayment of capital debt. That applies to everybody. That even applies to the St. John's members. I can tell you something right now, you had better sooner than later get used to it, and you might as well go in and have an audience with the minister and find out what the formulas are. The present Minister of Health, that is your lad to get talking to. He is really interested in it in the City of St. John's. He is really interested in the new formula for the repayment on capital debt. Members opposite might as well get used to it because they are going to be hit. I tell you something else that would have happened this year and this administration would have paid the price, if this had not been an election year for municipalities in the Province, if this had not been an election year coming up in November, Mr. Man, you want to see mil rates going up in this Province?

AN HON. MEMBER: Mr. Bursey.

MR. WOODFORD: She is not listening. Mil rates I would say, the lowest, and I can probably go as far as say an average would be 2 mils for most municipalities in the Province. It would have been put on in last December's budget and the only thing that saved it - they are like every other politician, they are like the members opposite, their election comes up in November and that is why they held back, because I have municipalities in the Province who were hit with $200,000. It is funny how you can come up with $200,000 in one year, an election year, and you cannot do it in the previous three. Is it not funny? It is rather ironic. I say to the minister just one thing, especially pertaining to the taxes, 2.5 per cent is in. There was 2 per cent there anyway and on the gross, I must say to me as far as I am concerned, a poor way because you had to estimate the gross. You did not have to ask the company. The onus was on the company to come in and prove that they did not have the estimated value and that was wrong as far as I am concerned.

You had to bill the company and then the onus was on them to come in and tell you, and show you an audited report saying they had made so much money on gross earnings, which hit some of them pretty hard, 2 per cent, and that was wrong. So the 2.5 per cent is right with regard to a uniform taxation for utilities but what I am saying is this, the minister is going to have to be very vigilant in looking at what Newfoundland Tel, Newfoundland Light, and especially I want the minister to take special note to cable companies, because I can guarantee you that those three particular utilities, and more especially the cable companies, are going to try to haul back, they are going to try to evade, and they are going to do everything in their power not to pay that 2.5 per cent.

The other thing is for the minister responsible for consumer affairs, the Minister of Justice, to watch what they do because what they will do, if they have to pay it, they will go back to the PUB, or the CRTC, to try to recoup the 2.5 per cent, and you watch. If you or I started a business we cannot be guaranteed a certain return but Newfoundland Light is guaranteed 13.2 and Newfoundland Hydro is guaranteed 4 per cent, but we cannot do it and it is not right. The cable companies today have learnt fast what the other utilities were doing and now they are hooked onto the CRTC. Now, they are sending letters to municipalities threatening them and the next step will be to move to the CRTC and see if they can get a rate increase to cover the 2.5 per cent.

So I say to the minister, be vigilant, be very cautious when it comes to dealing with the utilities in this Province. If he is, and stands up for the municipalities in the Province, then I'd say the 2.5 per cent would work. If not, it won't. Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

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

MS. VERGE: Thank you, Mr. Speaker. I'd like to begin by praising my colleague, the Member for Humber Valley, the member who represents the district neighbouring mine. That was a good strong rousing speech. The member has a wealth of experience in municipal government, having served for many years as a councillor and then mayor of his home community, Cormack; serving for some time as a member of the executive of the Provincial Federation of Mayors and Municipalities; and of course, serving for several years now as a member of the House of Assembly and now as our Official Opposition municipal affairs critic.

The member was good enough to share his experience, to offer some advice to members opposite, particularly the new minister. I'd say to the new minister that he'd do well to heed the advice so generously offered by the Member for Humber Valley. Perhaps if his two predecessors had paid attention to what the Member for Humber Valley was saying they'd still be here in this Chamber today.

This Bill, Bill 5, is yet another example of the incompetence of the Wells administration in administering. As I've said many times before, even when they have a good idea - and there haven't been many - even when they have a sensible notion, when they have an idea for reform, they bungle the implementation. This is the third version of this uniform utilities taxation legislation that we've seen. The first version was hastily and rashly put together just before Christmas. The previous minister and the Premier insisted on ramming it through the House of Assembly. We sat here for twenty-four hours straight doing a number of important bills. They refused to cooperate with the Opposition and refer the draft legislation to a legislation review committee so that it could be examined thoroughly and so that the public could be consulted about it, and instead used their majority, or abused their majority, and passed it.

That legislation came into force at the start of the new year. Then, lo and behold, the government discovered that they made a mistake. They told municipalities; don't go by what's in our new law, we didn't really mean what's in the fine print. In March when the House of Assembly opened again they introduced a bill to correct their mistake. They didn't get it through before the election was called. Now they're back here with this third version of the legislation.

This Bill provides for retroactive coming into force of a taxing measure. That's very objectionable. There may be situations in which it's acceptable for legislation to have retroactive affect, but I would say this is not one of them. What's the excuse for ramming through taxing legislation with retroactive effect?

Mr. Speaker, my good friend, the new Minister of Works, Services and Transportation has just joined us over here on this side of the House. He wanted to get a better seat so he could take in all my remarks, and that is very flattering. He is asking if I will go out with him tonight to his estimates committee meeting. That is an offer that I will have a very hard time refusing. I will have to think about that because I have many, many concerns related to the Department of Works, Services and Transportation and the estimates committee meeting tonight might be a good chance to air them.

Mr.Speaker, I notice the minister has paid a great deal of attention to me ever since I asked that question to the Premier - the question about the fox in charge of the hen house.

AN HON. MEMBER: (Inaudible).

MS. VERGE: He says it with a smile. His charm is hard to resist. He makes his threats with a very sweet smile.

SOME HON. MEMBERS: Hear, hear!

MS. VERGE: Since the minister is over here listening to me, I would ask him once again if he would please have his staff go to see the property owners next to the highway work in Corner Brook. The four property owners - there are four houses, and the owners of those properties on the old highway between the golf course and Massey Drive are literally circled by the construction. The new road is coming much closer to them than the original plan indicated. Blasting has been done there. Yesterday there was blasting that resulted in a rock striking one of the houses, and the people are upset and worried. They do not know exactly what is shaping up. They do not like what they are seeing. Yesterday a tractor bulled across one of the lawns. No permission was sought in advance, and the people have been asking for three weeks for staff of the department to go and talk to them and discuss with them the latest design for the highway - both the four lane Trans-Canada and the ramp and feeder network. They began by talking to staff of the department in Corner Brook and Deer Lake. After a week or so they contacted me. One of them was undertaking to fax the minister this morning.

I am grateful for the minister's personal interest, but he has a huge department and if people throughout the Province with every problem and concern have to wait for the minister to come visit, then they are not going to get the kind of service they deserve. So I would hope that the minister will make good use of his staff.

MR. EFFORD: Monday.

MS. VERGE: Monday. Monday he is going to Corner Brook. I am very glad to hear that. Okay. So I would hope that the minister will not only look at the construction work and check the plans, but also talk to the property owners, or have his staff talk to the property owners, hear their concerns, answer their questions, and discuss with them appropriate redress. What may be required now is government purchase of the properties, or part of the land, or what may be in order is compensation for loss in value that people will suffer.

Mr. Speaker, to return to my discussion of this Bill, I was saying that the provision of the Bill making it retroactive to five months ago - to January 1, 1993 - is offensive. Now the government has, in its treatment of municipalities over the last four years, been most unfair. The government, as my colleague has pointed out, has successively told municipalities on what basis funding would be provided, has outlined the formula for operating grants but after municipalities have put together their budgets in good faith, drawing on the information provided by the department, after they have sent out their tax bills to their residents, even after the deadline for amending taxes, the government has changed the operating grants formula and cut grants to municipalities.

Now, Mr. Speaker, in this economic climate with the slowdown in the rate of increase of federal transfers, with the economy and free-fall and revenue from provincial sources declining, I may have some sympathy for the Provinces actions in making changes to municipal operating grants. I certainly agree with the stated objective of rewarding municipalities who make a reasonable taxing effort but, Mr. Speaker, there is no excuse for the Province imposing changes after municipalities have submitted their budgets to the department and received departmental approval and after the deadline for tax changes, this kind of altering rules in mid-stream is unacceptable. The government has to learn how to manage, the government has to learn to be fair to municipalities and other agencies which depend on government funding and those agencies include school boards, the University, colleges and hospitals. It is simply not acceptable for the Province year after year after year to change the rules in mid-stream. If the Province decides for whatever reason, and we can debate that, if the Province decides to change the formula for operating grants, if the Province decides to cut funding to municipalities, then make the decision. Give municipalities advanced warning, enable the municipalities to plan on the basis of the new funding arrangement and stick to the decision. Learn how to plan, learn how to budget and stick to the budget.

Mr. Speaker, this new arrangement sets a uniform utilities tax rate of 2.5 per cent of utilities gross revenue. Mr. Speaker, I do not disagree with the principle of having a uniform rate. I think it is desirable for utilities contributions to municipalities to be spread throughout the Province on an even basis, on a fair basis. I do agree with representatives of the government when they say that it was not acceptable for a few municipalities to be charging utilities high rates when others were charging very low rates. So, I agree with the objective of bringing about uniformity.

Mr. Speaker, the part of the new legislation that I object to and I said this back in December when I spoke on the original bill, is that it allows municipalities to charge more than the uniform rate and then empowers utilities to pass on the difference to the rate payers. So, what the Province is doing in essence is setting up the utilities to do double dirty work, I think that is the phrase I used at the time. It is in essence allowing for a new indirect tax, because of course the rate payers for telephone, electricity and cable-tv are one and the same as the taxpayers, municipal, provincial and federal. There is only one rate payer, a taxpayer, and that person is being imposed upon more and more and more. What this does is set up the utilities to collect taxes for municipalities.

Now, the provincial government by squeezing municipalities has forced municipalities to charge significantly more in local taxes already. Now, through this legislation, through the legislation that was passed in December, the Wells administration is setting up utilities to collect the tax for municipalities - to pass on any excess municipal tax above the standard 2.5 per cent of gross revenue on the utilities bill, on the phone bill or the light bill, to the taxpayer rate payer.

Mr. Speaker, as my colleague pointed out, the new legislation also sets up the provincial government to collect from utilities 2.5 per cent of the gross revenue they derive in unincorporated areas from the residents of those unincorporated areas. I would ask the minister, when he speaks to close this debate on second reading of the bill, to tell us how much money the provincial government so far has either billed or collected from utilities in respect of the gross revenue the utilities derive from unincorporated areas in the Province.

This is a new hidden tax, of course, because whatever the utilities pay out in taxes, whether it be to the municipalities or to the provincial government, the utilities will simply pass on to the rate payers. If the utilities end up paying more tax - more when you add up both what they will be paying to municipalities and what they will be paying to the provincial government than they have paid previous to this legislation - then that excess will simply be passed on to the customers - to our constituents - with a quick and easy application and approval from the PUB, or the CRTC in the case of the phone company. So I would like the minister to reveal just how much new revenue the Province is deriving from charging utilities 2.5 per cent of the gross revenue they get from the unincorporated areas.

Mr. Speaker, the main reason that I decided to participate in this debate was to draw to the attention of the minister and members opposite, and to the public, in the hope that some reporter may be listening, the frustrations that municipalities are having trying to collect tax from the cable-tv companies. Now my colleague, the Member for Humber Valley, talked about this already.

As the Member for the district of Humber East, I regularly sit in on meetings of what is called The Great Humber Joint Council. That is a regional body comprising a couple of representatives of each municipality in the Bay of Islands/Humber Valley/White Bay South area. The organization includes over twenty municipalities as well as some local service districts.

Mr. Speaker, municipalities in that region have had major headaches dealing with the cable-tv companies. Before the new legislation, the uniform utilities tax legislation, they were frustrated in their efforts to collect from the cable-tv companies. Since the coming into force of the December legislation they have been confronted with what appears to be a ganging up of the cable-tv companies. The cable-tv companies are either refusing to pay, refusing to tell them how much gross revenue they are getting from the municipality, are saying: No, we will not pay 2.5 per cent. We will only consider paying 1 per cent; or they are saying that they have constitutional legal grounds for refusing to abide by any of this.

Mr. Speaker, I do not have copies of the correspondence the cable-tv companies have sent those municipalities, although representatives of Hughes Brook and Cox's Cove in particular have told me about recent correspondence from cable-tv companies serving those communities, indicating objections to complying with this legislation.

Mr. Speaker, the point I am coming to is that there is a serious problem with cable-tv companies refusing to abide by this legislation. The problem appears to be widespread. It is not confined to just one or two municipalities in the Province. The problem may vary from one cable-tv company to another, that I can't say for sure. Individual, small municipalities should not be left on their own to deal with the big cable-tv companies. The provincial government should assume a leadership role. If the cable-tv companies are going to use their great wealth to hire lawyers and mount a legal challenge to this legislation, then the minister and the government, who after all are the authors of this legislation, flawed though the original version was, should provide financial assistance to the Federation of Municipalities or should, as a government, meet that challenge.

Small communities such as Hughes Brook and Coxes Cove shouldn't be left on their own to fight the cable-tv companies. It just doesn't make any sense. This is a government that's been big on amalgamation, apparently believing that bigger is always better. Sometimes bigger is better. Sometimes when you pool your resources you end up with a more efficient operation and you realise economies of scale. That certainly doesn't result in every case, and it would not have happened if the government had forced the merger of Corner Brook, Massey Drive and Mount Moriah. But there are situations where bigger is better. The combination of Pasadena and South Brook in the district I represent, which was done during the Peckford administration, was a positive instance of amalgamation. Although this administration hasn't honoured the commitment to provide the capital funding to that amalgamated municipality to upgrade the services in Pasadena West, formerly South Brook. But I digress.

My point is, the government should assist all the municipalities throughout the Province which are being thwarted by cable-tv companies in the municipalities' efforts to enforce this legislation by taxing them the reasonable amount of 2.5 per cent of their gross revenue, or a lower amount. The Province should initiate and carry out on its own or carry out in cooperation with the provincial Federation a spirited defence of its legislation.

Mr. Speaker, I haven't had an opportunity to do the necessary research, although back in March I talked to the executive director of the provincial Federation, Doug Smith. I suggested to him that the Federation have its legal council look at the question of whether an amendment to the provincial legislation would strengthen the hand of municipalities in dealing with cable-tv companies. I mentioned at that time concerns that had been related to me during March that municipalities were also having some difficulty dealing with the other utilities, Newfoundland Telephone and Newfoundland Power.

My understanding is that those difficulties for the most part have bene cleared up, but at that time a couple of the municipalities in the area I represent weren't getting what appeared to be accurate, reliable, gross revenue figures from the other two utilities. At any rate, perhaps when the minister rises to speak at the end of this debate he'll talk about how he proposes to help municipalities in dealing with cable-tv companies.

Municipalities in this Province for the most part are small. Their councils for the most part are made up of volunteers, with the exception of councillors in one or two of the larger municipalities. People serve voluntarily. They give freely of their time and give a considerable amount of time. I've been extremely favourably impressed by the people serving on the municipalities in the district I represent. Over the past few years these people have had to put up with not only significant cuts in provincial government funding and support, but also the late notice, the changing of rules in mid-stream, that I talked about earlier.

The councillors have had to hike taxes, in some cases very sharply.

They have had to put up with abuse from their neighbours and friends because they operate at the grass roots, they are much closer to their constituents than we are, and after all we are paid well for our work. We do our jobs on a full time basis and I think the government had better give more consideration, more sensitive consideration to the position of citizens as we approach the upcoming November municipal elections. After all, how can we expect people to continue to offer themselves for election to municipalities, for service on community and town councils, if the kind of abuse that the government has inflicted on councils for the last four years is going to continue.

Mr. Speaker, I will end by recapping my remarks.

First of all, the Member for Humber Valley offered good advice for all members opposite, but particularly for the new Minister of Municipal and Provincial Affairs and I hope he listens carefully and pays attention. Number two, the government typically is clumsy in administering, in implementing change. I am all for change and reform, in many cases we have no choice, in other cases it is desirable for other reasons, but, Mr. Speaker, when the government lights on an idea, for heaven's sake, research it and make proper provisions for an orderly implementation. Let the people affected know ahead of time, give them fair warning, allow them to adjust and stop changing the rules in mid-stream; stop expecting the volunteers who make up municipalities, who serve as mayors and councillors, to have to change their plans partway through their year, after in good faith they have made up their budgets, had their budgets approved by the provincial government, set their tax rates, sent out their tax bills and even after the provincial deadline for changing taxes. I mean, surely the members opposite would not want to be treated that way by the federal government -

AN HON. MEMBER: (Inaudible).

MS. VERGE: - so why are you doing it to municipalities? And, Mr. Speaker, it just did not happen once or twice, it just did not happen when they were new to government back in 1989, and it has happened again last week. Last week the Department of Municipal and Provincial Affairs sent out letters to municipalities telling them that the road component of their municipal operating grants were being cut. Now, Mr. Speaker, what does the government know now that it did not know last December? Remember, we had a mini-Budget in early December, I mean that is just clumsiness, ineptness, a lack of care, a lack of consideration for other people who are depending on the ministers opposite.

Mr. Speaker, a prime example of the ineptness of this administration is that this is the third bill we have seen in this Legislature dealing with uniform municipal utilities tax and when the first one was brought forward just before Christmas, members on this side pleaded with the government to pause, put it out to a legislation review committee for proper analysis, to consult the public, but no, they were hell-bent on getting it through and in force for January 1st. Well, they made a serious mistake and then they told municipalities: do not pay attention to what is in our new act because that is not really what we meant, we will bring in a bill in the Spring to clarify what we really meant, and you have to abide by, not by the strict letter of the law, but by what we are going to do later, and they have the gall to make this retroactive to January 1. It is a taxing measure.

AN HON. MEMBER: Did you ever make a mistake?

MS. VERGE: Did I ever make a mistake? As I said before, Mr. Speaker, I can forgive anyone, even myself, for making one mistake, but when you see repetition, when you see a whole pattern of mistakes, when you see the government year, after year, after year, changing the Municipal Operating Grants formula -

MR. SPEAKER: Order, please!

The hon. member's time has elapsed.

MS. VERGE: By leave, I will just finish my thought.

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


MS. VERGE: No leave - thank you, Mr. Speaker.

MR. SPEAKER: The hon. the Member for Waterford - Kenmount.

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

Mr. Speaker, I find it very frustrating, just having vacated the office of Mayor of the City of Mount Pearl, to have to speak on this particular piece of legislation, in particular, since, as my colleague just said, this is not the first time we have had these kinds of things happen.

I have been on record for a long time as having given my personal support for the uniform taxation of utilities. There are many letters which my colleagues opposite have in their files, in which I have been an advocate for the uniform taxation of public utilities, and, in fact, many of the press clippings over the last several years will show that to be so. This whole issue of taxation of public utilities has been a very contentious issue with municipalities, and a contentious issue for the Federation of Municipalities. It has been on the books for many, many years and has been a topic of discussion when my colleague, the Minister of Finance, was with the Federation and he and I were representing the 'large towns' section of the Federation. We couldn't find the consensus to bring it forward as an adopted motion of the Federation at that particular time, however, many of the larger municipalities have certainly been on record as supporting this method of taxation of the public utilities companies.

We felt that public utilities should pay a fair share. We felt that they should contribute to the municipal revenues. Mr. Speaker, the City of Mount Pearl has been advocating a system of taxation of public utilities for, I guess, ten or fifteen years, and probably longer than that.

Mr. Speaker, I want to point out to hon. members, as well, that the City of Mount Pearl imposed taxation of a property value on public utilities. Mount Pearl was probably one of the first communities that decided they would make the cable television companies pay. In fact, at one point, we went to court and seized the assets of Avalon Cablevision, and were given an order to take their assets, and would have rendered them, I guess, unable to carry on normal business. When that happened, the Cablevision very quickly came forward with the appropriate allowance of their taxation.

In addition to that, some years ago, when the City of Mount Pearl was having difficulty with Newfoundland Telephone Company, we were very aggressive and, as a City, we decided that Newfoundland Telephone Company should pay an appropriate rate of taxation. At the time, there wasn't the uniform taxation rate available and the City, in its wisdom, decided we would charge on the property tax the rate that would yield us approximately 2 per cent of their gross revenues. The telephone company refused to pay, so we took them to court and we were successful in litigation. The court decision said that the municipality had the right to determine the rate that would be charged to the utility companies.

On that basis, Mr. Speaker, the City of Mount Pearl, given its record, has had a long history of leadership in this particular area and certainly, when I read Bill 73 back some months ago - "An Act Respecting Taxation of Utilities and Cable Television Companies" - the files will show that I was publicly in support of the government's initiatives, and certainly, today, I stand in support of that particular initiative, as well. It is a step in the right direction.

However, one of the difficulties that we have is with consistency. We find it very difficult for a municipality to be able to balance its budgets when the rules change half-way through. This has been a pattern, and I plead with the government opposite, try your best to be understanding of the 300 municipalities out there who are going through the very same budgetary problems, the very same decrease in revenues, that the government, itself, says is the case for the Province. Certainly, many of the municipalities cannot come up with the revenues any better than the government can for the whole Province. Therefore, it is very frustrating when you do a budget and then find, after three or four months, the rules have changed. In the last five, six, or seven years - I certainly say to you that this has happened too often over the last number of years, and particularly, the last four or five years.

Mr. Speaker, it is very difficult to sit in your council chambers and go on meeting after meeting after meeting, dealing with recreation commissions, meeting with all of your business groups, and coming up with a fair rate of taxation, and then finding yourself some months later with the possibility that the Provincial Government, the parent government, is going to change the rules. Suddenly, you are down monies on operating grants; you are down monies on various categories of the Provincial Government municipal cost-sharing arrangements.

Mr. Speaker, back in November, the Minister of Municipal and Provincial Affairs wrote the municipalities in the Province. His circular is dated 23 November. It is on the public record, and he advises municipalities of the government's intention to introduce legislation to tax public utilities. It reads, in part, and I quote: `Effective January 1, 1993, government has taken the decision to establish a standard rate of municipal business taxation applicable to utility companies. Government has also taken the decision to include Newfoundland Hydro and cable television companies and to make them liable for this municipal business tax.' Based on that, the minister then went on to announce that legislation would be introduced.

Mr. Speaker, it is not the municipalities' fault that the writing of the legislation was inadequate. It is not the municipalities' fault that the writing of the legislation shows that there was some inadequate planning, inadequate thought processes. For example, Clause 10.2 of the bill reads as follows: When a council imposes a business tax upon a utility for the year immediately preceding January 1, 1993, which was based upon the real property value of the utility within the city or municipality served by council, that council `shall' - there was no option here, it did not say `may'. It said: that council `shall', and I quote: for the year preceding January 1, 1993, impose a tax upon the gross revenue of that utility during the preceding year, derived within the city or municipality served by the council, that is not more than 2.5 per cent of that gross revenue plus - plus, I say - plus two-thirds of the actual tax imposed upon the utility for the year immediately preceding January 1, 1993.

Now, Mr. Speaker, the 309 municipalities in the Province, when they read that particular piece of legislation, when they got their directives from the ministry, they immediately followed it precisely to what it says. They did their budgets - it said; `you shall impose this particular rate of taxation'. It said that you had to put in the 2.5 per cent plus two-thirds of the actual tax imposed upon utility for the year immediately preceeding January 1, 1993.

Mr. Speaker, when I got that particular piece of information, I paused to write the ministry. I drew out the example of what would happen in the City of Mount Pearl or, very specifically, I would like to show the difference here. For example, under the 2.5 per cent, the City of Mount Pearl would have received from Newfoundland Power, $338,883 and from Newfoundland Tel, $264,837.

Now, Mr. Speaker, that certainly is significant monies, but if we go, then, and take two-thirds of that and add it on, which is what the legislation said you must do - it said you `shall' do this - in doing that, taking two-thirds of these amounts, it meant that Mount Pearl would have had to impose an extra $402,480. Now, Mr. Speaker, we know that was not the intent of the legislation. Every municipality in the Province knew that was not the intent of the legislation. However, the legislation was very prescriptive - it didn't say, you `may', it said you `shall'. It said, we direct you to do this. So, the memorandum from the minister, sent out in January - we received it in early February - gave the examples, and it read as follows - Page 2: `a municipality which has previously imposed a utility business tax on the basis of real property value, will, in 1993, impose a business tax of up to 2.5 per cent on 1992 gross revenue plus two-thirds of the actual tax imposed in 1992 on the basis of the real property value.' Then, it went on to explain what would happen in 1994 and in 1995. Further, the memorandum gave examples of how this was to be applied.

Mr. Speaker, all municipalities having read this particular memorandum - we must, as municipalities, we must take direction, we must abide by the law. Every municipality tries to live by the rules that are established. Certainly when we have rules and communication from the minister, when the act says, you `shall' impose this particular regime of taxation, we simply try then to do our best to live within the rules.

Mr. Speaker, it is very frustrating to be a municipal leader - and I know that the hon. the minister has been a municipal leader in his community of Carbonear, and I know that many members opposite fully understand the frustrations that this kind of action causes. And certainly, in this particular case, what we have before us is a situation where there has been approximately a $4 million error, that is the magnitude of it. If every municipality imposed the exact wording of this particular piece of legislation and said we `shall' impose that, it would amount to about a $4 million error.

Now, Mr. Speaker, who was inconvenienced? Who are the people who are inconvenienced in all of this confusion? Certainly, the Provincial Government is somewhat embarrassed, I suppose, or they should be. Mr. Speaker, in this particular case, we have had this piece of legislation, the concept of which I have supported. I have been a strong advocate of it, and certainly, I take no joy in standing here and saying that we have some confusion out there. Because I have been one of the people who have been in municipal government for a long time and I know what confusion it causes.

Now, Mr. Speaker, some municipalities knew well in advance that this particular, I would call, adding on the two-thirds, would not be a factor. Therefore, some municipalities, including my own - we did our budget and we recognized, and we had communications with the utility companies. We told them that we expected this would have to be changed. However, our early contacts within the department, in January, did not lead us to believe that there would be amendments coming in. In fact, it wasn't until somewhat further into January, maybe into early February, that we became aware there was even a possibility that the Government of the Province would amend the legislation to make it coincide with the intent of the legislation, back when the bill was introduced in December.

Therefore, many municipalities, by January, had imposed their taxation rates. They had sent out their invoices. Members have to understand that if you are a member of a municipal government, you want to get your bills out as soon as you can. The aim is to have your taxation bills sent out by the 20th or 23rd, 24th probably, of December. The reason for that is very simple. If you get your invoices sent out, then you can get your revenues coming in in early January. When you get your revenues coming in from the various mortgage companies on the real property, of residential properties, therefore you can get your monies coming in a lot faster. If you wait until February to send out your taxation notices, therefore, you simply have to go to your bank and borrow the money, or you have had to do without, you might say, for some particular period of time, several months.

So, many municipalities found themselves in the difficult situation, in mid-February, of not knowing what to do. They had sent out their tax notices in December, based on the two-thirds - they had followed the rules - and then they found themselves not knowing what to do, being in a bit of a quandary. Would they go back and now up their mil rates, or how would they accommodate this loss of revenue?

Mr. Speaker, that, I think, is very unfortunate. If it were the first time that municipalities had been inconvenienced by the changing of the rules in mid-stream, I think that most municipalities would be somewhat forgiving. But I plead on behalf of the 309 municipalities in this Province: let's try our very best to make sure that this kind of situation never ever occurs again. Because, as I said, I think we have to respect the honest and the straightforward, diligent, hard work that all of these elected people do in all those municipalities. And it causes confusion, causes uncertainty. No mayor or councillor wants to impose a new tax, change the rate in March month, certainly not, because you have sent your invoices out, you have done your work, you have a reasonable expectation, you are trying to accommodate the general decrease in revenues. It is very difficult to collect taxes, anyway. We all know how difficult that can be when the economy is in decline. We have bankruptcies in business, we have people who are personally experiencing great difficulties. We have, as the Minister of Social Services would know, many families who are going through tremendous stress, and mayors and councillors don't wish to impose any additional hardship.

In this particular instance, we know that the inconveniences are to the people. So, therefore, I say to the minister that, as a supporter of the principle of this particular piece of legislation, I ask him to be understanding. We are going to have municipalities which are going to be in serious financial difficulty before this year is out, for many reasons. Therefore, it is incumbent upon the government to try to make adjustments where they can, so that this - if there are municipalities which have serious difficulties arising from this particular piece of legislation, and the inadequacy of it, I think we have to reach out and try to be compassionate, and let us support our third level of government.

Let us make sure that we won't be the cause of - the people who are trying to run our municipalities, probably there are several thousands of them out there who are elected in positions in this Province. They are the people who are doing the greatest job that they can do to try to provide good government, to try to give the services to their local municipalities. Certainly, the minister knows that it can be very frustrating, it can be very difficult.

All I say, on behalf of all the municipalities, is that we try our best to avoid this kind of situation. As my colleague and the other speakers on this side have already said, we have enough difficulties in municipal government without causing any further difficulties by the way this particular piece of legislation was brought in.

Mr. Speaker, I conclude by saying that support for the general principle - I think that this taxation of public utilities is something that is good for this Province. It is good for municipal government. The intent is honourable. However, I plead with the minister to be cognizant of the difficulties that the precise reading of the legislation calls for municipalities, and to try to recognize that some municipalities in this Province are going to be in difficulty before the end of this year as a consequence of the government's wording of the original Bill 73.

Thank you very much.

MR. SPEAKER: The hon. the Member for Green Bay.

MR. HEWLETT: Thank you, Mr. Speaker.

I would like to have a few words to say on this bill, with regard to, basically, the changing of the rules with regard to the taxation of utilities - a retroactive change of the rules to cover up a mistake made by the government when it pushed through, in its usual manner, a piece of legislation in the last sitting of the House.

Mr. Speaker, first, when I was elected to this Chamber, the Wells Administration immediately embarked on a two-pronged approach in an all-out blitzkrieg fashion. One had to do with the Constitution, the other had to do with amalgamation. When we had war in the Gulf there a little while ago, Mr. Speaker, it was called Operation Desert Storm. Since coming to office, I think there has been, on the part of the Wells Administration, an `Operation Municipal Storm', which has continued over the four years of the Wells Administration, and now it is really `operation municipal norm.' That is unfortunate, that a continued assault, a continued bungling, a continued interference in financing, and shifting of the gears and the rules with regard to municipalities in mid-stream, has become the norm in the relationships of the municipal governments in this Province to this particular Provincial Government.

The grants system, they have essentially gutted, forcing local councils to either cut services to the bone and/or reduce taxes, and take the heat for reducing taxes, so that they, themselves, would not have to take the heat. Amalgamation, as I indicated earlier, turned out to be a total disaster in a lot of areas, with the utterly ludicrous situation, in my particular district, of this government offering to amalgamate three island municipalities and only willing to admit its mistake about two years after the insanity of the proposal that they put forward was pointed out. Some municipal authorities in my district have lost money due to the fixing of a certain Province-wide rate with regard to municipal taxation of utilities. This particular change which is happening in the middle of a financial year is going to negatively impact on certain municipalities who went along quite literally with the letter of the law as laid down last year, which was obviously a mathematical or a legislative blunder on the part of this particular government.

This government, Mr. Speaker, has not been kind to municipal government in Newfoundland. When I first came to work for government back in 1974 a young minister named Peckford started implementing a number of changes with regard to improving the level of municipal government in this Province, and substantial progress was made, both in forming municipal governments and in getting municipal governments to take more responsibility for the running of their communities, and the financing of certain aspects of capital works in their municipalities. Unfortunately, Mr. Speaker, when this government came into power it immediately began to dismantle what had taken a decade or so to put in place, and basically, municipal government in this Province has been set back a good twenty years or more. That is unfortunate and this particular Bill is just an example of bungling on the part of government in its usual rush to force something through at the last minute, forcing something through that a lot of municipalities found difficult to swallow, and having forced it through they found out they worded it wrong and now some municipalities went with the literal wording of the Bill and are now going to find themselves in financial difficult mid-year.

Mr. Speaker, this is a typical example of the treatment of municipal government by the Wells administration and what started out to be operation `municipal storm' has now become operation `municipal norm 'and I do believe that is extremely unfortunate for the municipal level of government in our Province.

Thank you, Mr. Speaker.

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

MR. SULLIVAN: Thank you, Mr. Speaker.

The minister indicated that they were bringing in this Bill because, and I think they quote, municipalities were taxing cable companies unfairly. I would assume if they taxed grocery stores unfairly, banks, and various other businesses, they would bring in a bill putting a limit on the mil rate that can be charged to various other businesses also. In other words what they are doing is putting a limit because a municipality, they figured, unfairly taxed a utility. Now, some municipalities taxed a utility above 2.5, and up to as high as 6 per cent, and maybe some much higher.

AN HON. MEMBER: (Inaudible)

MR. SULLIVAN: Yes, but I know several where 6 per cent was a fairly standard number in a lot of municipalities. One of the reasons why, I think, those municipalities needed to have an opportunity to level the playing field between rural and urban areas is because a lot of the rural areas do not have the same basic tax base as in the city. A lot of the rural areas, especially those close to the major cities, close to the City of St. John's and Mount Pearl, depend upon the cities to do a lot of their business, doing their banking, their grocery shopping in a lot of cases, their shopping for clothing and various other supplies, and motor vehicles, etc. The shopping malls and all business around the city has increased in size because they have a service base around the city. Urban areas who were not charging higher amounts had the opportunity to have access to a much larger tax base and increased revenues by way of property tax to all of those businesses within the city that rural areas did not have. So what has happened as a result now is that rural areas have lost one of the avenues they had available to be able to get taxes from businesses without putting any further hardships that were occurring because of downloading upon these municipalities, and it has severely hurt municipalities in this Province. People who were giving a lot of volunteer time, they were volunteering their time, they have become disillusioned and discouraged with one thing after another, a downloading that has occurred over the past while, and I will just go back to since my term of office which is only about one year and I can certainly relate some of these problems that have been encountered in just the short time I have been there.

In June of last year, three days prior to a by-election in my district, the minister at the time, of Municipal and Provincial Affairs, came to the district upon the request of municipalities and met with all the municipalities and told them that they are not going to be experiencing the hardships that they were given in letter form. In fact, municipalities in this Province were given last June, a letter indicating that their MOGs were going to be cut substantially beyond the legal deadline of March 31, of setting their tax rates for the year. Municipalities had their budgets set, they had their tax rates set for the year, they had their billings actually done and they were told last June that they were going to be hit with reductions in MOGS.

It was very unfair to these municipalities and the minister stated that anyone who experienced problems, they would get some assistance and he mentioned first, financial assistance, then he talked about assistance generally, and then he talked about moral support and eventually whittled it down that they had no support whatsoever, and three days before the election, he promised at a meeting up in Ferryland of all the municipalities - Since that, this government brought in, and once again in the tax year, a bill that was going to enable the utility companies to be treated fairly. Well, municipalities have been treated unfairly, maybe utility companies were treated fairly but municipalities did not get treated fairly and the tax payers in these municipalities did not get treated fairly.

They brought in last December, and once again, the specifics of this, and I say to the minister, last December, when a budget was struck by municipalities or the deadline for submitting budgets, this government brought in a bill regarding utility companies and they made an error in presenting the bill, there was a mistake either in haste, putting it through and trying to rush it through or whatever the reason was -

AN HON. MEMBER: There was no mistake.

MR. SULLIVAN: - well whatever the reason was, it is immaterial. They brought through a bill in December which passed in this House; municipalities went out and set their budgets, some of them did, they approached me, several who were in the position where they could take advantage of the mistake and they set their budgets for the year 1993, based upon the legislation that went through this House in December. Now we are coming back in June, once again, six months after they are supposed to prepare their budgets, the government is coming back to correct a mistake that they made in December, and they are coming back to correct it now and they are going to make it retroactive to January 1.

AN HON. MEMBER: That is right, they were told.

MR. SULLIVAN: Yes, they were told but they acted upon the laws of this Province which went through this House in December and it is the current law that sits in this Province as of today and they struck their budgets -

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Yes, quite possibly, yes you did, but because you are going to change the laws on any offence, because you are going to change criminal laws or any other laws, is that the reason not to follow the laws that are currently in place?

MR. ROBERTS: Municipalities are being too cute by half. There was a mistake made-

MR. SULLIVAN: That is correct.

MR. ROBERTS: - we acknowledged it early in January, any municipality -

MR. SULLIVAN: I am agreeing.

MR. ROBERTS: - that says it was relying -

MR. SULLIVAN: I am agreeing.

MR. ROBERTS: - is being too cute by half -

MR. SULLIVAN: I am agreeing with that, but if the government made a mistake - you made a mistake, you admitted the mistake after a period of time, I accept that, but that is no reason to punish a municipality because the law that currently exists -

AN HON. MEMBER: We are not punishing anyone.

MR. SULLIVAN: If I could finish, please -

MR. ROBERTS: A municipality that tried to gouge, taking advantage of a mistake deserves no sympathy.

MR. SULLIVAN: I will agree, in some cases. Let me finish. A lot of municipalities in this Province did not gouge. Depending on what you call gouging, yes a lot charged 6 per cent; some charged less, some charged less than 2.5 per cent. There are municipalities in my district that did not gouge and some that did.

MR. ROBERTS: The ones who did not gouge have nothing to worry about.

MR. SULLIVAN: That is not the point. The point I am making here in this specific thing is that the law of the Province as it relates to taxing utilities, which was passed in this House in December, and municipalities submitted budgets based upon the laws as they currently stand - we cannot make decisions on laws that are going to be. We know it's going to come through. The government, all they have to do, the majority, is vote it.

But they made and prepared a budget. They had difficulty balancing their budgets, so they took advantage of the loophole that was there, which is legally their right to do. Now, after the budget is struck the least they could have done was made the legislation effective from January 1, 1994. That would be playing the game. In a legal sense they have every legal right. I ask the Minister of Justice: don't they have a legal right to set their budgets in line with the law that passed in December?

MR. ROBERTS: (Inaudible) and what we're doing is equally legal and equally proper.

MR. SULLIVAN: Yes. That's correct. Municipalities are now, that followed the law by submitting their budget, going to find out whether in June of 1993, they're going to find out now that what they did was legally right. They are now going to pay the price for doing something that's legally right. Is that correct?

MR. ROBERTS: (Inaudible) too cute by half. Too cute by half.

MR. SULLIVAN: Am I right? Am I right in stating that?

MR. ROBERTS: That is half the story.

MR. SULLIVAN: So in other words, the municipalities didn't set a budget if they based it on the utilities bill that came through when they set their budgets in line. Is that legally right?

MR. ROBERTS: The government said there was a mistake. We admitted it.

MR. SULLIVAN: That's correct.

MR. ROBERTS: We said to the municipalities: do not ignore this. If you ignore it you act at your peril. Too cute by half.

MR. SULLIVAN: Did you send a letter to municipalities?

MR. ROBERTS: Too cute by half.

MR. SULLIVAN: Municipalities had -

MR. REID: (Inaudible) every municipality in the Province had a letter in late January stating the error -

MR. SULLIVAN: That's correct. In other words -

MR. REID: - telling them to adjust their budgets accordingly.

MR. SULLIVAN: That's correct. They're aware of it. I met with the municipalities. I said: here are the consequences of budgeting on the law, and here are the consequences of budgeting on what the law is going to be. So they budgeted on what the law is, not what the law is going to be. I think that is morally incorrect to do that to municipalities in this Province.

If the government made a mistake they should admit it and they should accept it and bring it in effective January 1, 1994, and do the honourable thing. They did a very dishonourable thing, because in haste they tried to ram legislation through this House here before Christmas. We received bills one day and they wanted them pushed through the House the next day. That happened and that's the reason why they made blunders.

I don't think municipalities should have to pay the price for their blunders. Because what municipalities wanted was an opportunity at least to have another year that they could cushion the blow that was given by this government in June on MOGs cut after the year; on utilities tax that was hit again this Fall, in order to cushion that blow to be able to adjust their taxes to municipalities. This government did a very dishonourable thing and it's not fair. If you want to bring in the legislation, there are merits to it. It should be done in 1994, this aspect, and it shouldn't be pushed down municipalities' throats like what happened.

It's very difficult, it is very frustrating, for people out in small rural areas to be hit three times in one year on cutbacks. Three times in one year when they have no control over their budgetary process. It was beyond the legal limit for them to set it. Municipalities after March, they can't change their tax rate. They can't change them now for this year. They cannot legally do it. They're into a bind. Legally, they cannot change and retax and re-assess residents and taxpayers in their community now, even though government is going to have the legal right to go back and make the municipalities pay that price. They cannot recover from their taxpayers in their community.

What does that mean? It means an increased deficit or - I assume they proposed a break-even budget, which is in compliance with the law. They're going to incur a deficit now on this year, ones who took advantage of the law and used the law to their advantage. Therefore they're going to pay the price, taxpayers in the community, by having a bigger hike next year. I think it's unfair.

What this government has done, they have set a cap on what they're going to give municipalities - $42.5 million in 1993-1994 fiscal year. It's putting very much strain and hardship upon people, and people who are out there earnestly working, to try to run small, local municipalities. I know all the municipalities in my district. I've met with them. I was a part of the process back for some time as mayor of one of them. I know the hardships they're encountering in encouraging and trying to get people to run. It's very frustrating not alone to have to deal with taxes, but to have taxes passed upon them that they cannot possibly adjust to and collect because the decisions are made beyond March 31st in their tax year when they have an opportunity to be able to adjust for it.

I think it is unfair and I can't see hon. members having to pass through legislation here that is detrimental to municipalities. It is galling just to think of that - that they are going to be putting the screws to people in little municipalities, who are out working. In fact, it is exactly what is being done.

Now, another basic issue I would like to talk about, and another specific issue that happens in my district, too, and it has happened in Blackhead - I think that is in the district of the Member for St. John's South - and in the Goulds area also; the Goulds area now is in a position - and it is a part of the City of St. John's - where growth is restricted because they have a system that is not adequate to be able to take on additional amounts.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: That is the point I am getting to.

In previous amalgamation with Shea Heights, for example, this Province gave funds to the City of St. John's to phase in amalgamation in these areas so they could cushion the blow. After 1989, what happened? Areas in the Goulds that were forced into amalgamation were not given any funding to phase it in. They have inadequate systems to cope with the demands for the growing population in these areas. Their growth is frustrated in these areas because they have a sewer and water system - a sewer system that can't hold the extra housing that is in there, and growth has been limited in these areas because their system can't take it. They applied for roughly $3 million to be able to upgrade the system that is currently there so they can approve new housing to occur in that area. That is not talking about the increased areas that they amalgamated, in the outlying areas in Middle Pond and lower Goulds area and other areas that they amalgamated, not even counting any services whatsoever, and it is really unfair to these people who are living on the perimeters and periphery of various cities with no hope of getting any services, and paying a full shot because of that.

There was no phase-in period to allow them to get services that would enable them and give reason to pay the same tax rate they are paying in the rest of the city. I think that is very, very unfair and this government has not shown any basic compassion or interest in providing some services. People don't mind paying for services they are getting. They have a great degree of difficulty in paying for services they don't get.

Another big problem that is happening in municipalities, is that back several years ago, municipalities were receiving $2,000 per kilometer for local roads. They struck deals with transportation for $1,000 a kilometer to snow clear these roads.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Actually, I only have a page here and none of what I said is probably down there. If you want to read it and compare, you are welcome to do it.

Another area that has caused great problems, and I think it is very unfair, is that municipalities were encouraged to take over roads and to maintain these roads, and what has happened now is that municipalities have the road component sliced from $2,000 a kilometer down to $800, down to $81.40, I think, this past year, and now down again to $39, I believe, for a kilometer of road to maintain in this Province. It is utterly ridiculous that a municipality gets $39 to maintain, Winter and Summer, a kilometer of road, when they are paying Works, Services and Transportation $1,000 per kilometer just to maintain in the Wintertime. They are suffering a tremendous loss, each municipality.

Government is encouraging municipalities to take responsibility for the roads in their community, and they took away any funding to entice them to do that. If there is any hope of getting communities to take on new roads and so on, there has to be some incentive built in to cover the cost they are going to incur in the process.

Now, we have seen - and the Member for Humber Valley made reference to it - equalization given in rural areas, for example, where housing is below the standard evaluation price that would be in a city. There is a differential built in there whereby an equalization can be provided to bring them up to a certain appraised value there and they would be given a certain component there on their equalization to be able to provide a source of funding.

Now, that is the next thing that is going to disappear from the MOGs, and we are down basically - in rural areas, have a local tax incentive, and in most rural areas we know, they don't have the same infrastructure in place, they don't have the same business base in place, and especially, at such a difficult time in the Province's history, during a shutdown of the fishery that is mostly found in rural Newfoundland, they have even lost the business tax base they had. So their revenues have eroded under the collection of taxes; therefore the incentives they are going to obtain to increase and gather these taxes doesn't mean nearly as much now to a lot of these municipalities. And what is happening is, municipalities, this year - and the crunch is going to come - have submitted budgets that are not realistic, to get a balanced budget. They cannot realistically produce balanced budgets. Some have increased their taxes by 100 per cent this year in order to get a balanced budget. They are going to have to remove, in some cases, complete garbage pick up, eliminate street lighting or snow clearing. Some had to eliminate one, or two in some cases, or a combination of all of these things in a community. They only have garbage collection once a week and you can't pick it up every two weeks, it just creates too big a problem. You have street lighting; in certain areas it is very scattered and very dispersed lighting, as it is. To eliminate it completely increases and causes other problems. So we are in the situation - snow clearing is almost a compulsory thing at certain times in the Wintertime because of health reasons, transportation and schooling and so on. So, they are in a dilemma and the crunch is going to come over the next year with many municipalities. So, I think it is important that this government just look at things realistically.

In terms of this bill, all we are asking is that they be up front and follow the law and amend this to take effect on January 1, 1994. At least, it is not what municipalities want, it is completely against and affects people in rural areas. This utility tax bill is completely askew against rural areas in the Province. It is completely a one-way slide. But the least they could do is help them in the short term, over this year and allow those who have budgeted according to the bills that were passed here in this House, last Fall, to operate and continue to collect upon the basis that went through this House. Don't be issuing them out warnings in January and saying: We are going to amend and we are going to make it retroactive to January. You had better do and budget in compliance with what we are going to bring into this House.' In other words, they are giving a threat four and five months in advance, six months, actually, now. It is June, and what -

MR. ROBERTS: (Inaudible).

MR. SULLIVAN: Yes, it could be. Well, I only have twenty minutes and I certainly don't intend to speak any longer than that.

MR. ROBERTS: That is okay, we are not listening anyway.

MR. SULLIVAN: Well, if you are not listening, how do you know I am not saying something good about you?

Anyway, Mr. Speaker, I think they should deal fairly with municipalities. I think they should come clean with them and stop giving threats and follow the laws that they have introduced and passed through this House and do the honourable thing. Thank you, Mr. Speaker.

MR. W. MATTHEWS: And resign, all resign, the whole works.

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

The hon. the Minister of Municipal and Provincial Affairs.

MR. REID: Mr. Speaker, I can't sit here and listen to a number of previous speakers talk about what we did and the mistakes we made with this piece of legislation, because I am going to give you a little briefing on what happened with the legislation. If you remember, in late 1982, we brought in the legislation and those members who were sitting in the House at the time that were paying attention, and apparently, some of us or some of my colleagues were not paying attention, at the time the initial legislation said that we were going to implement the 2.5 per cent immediately as of January 1st and because of a strong lobby from members on this side, as well as members on the opposite side, in talking to Mr. Hogan, we felt that if there were some way that we could bring in the legislation that could be spread over a longer period of time rather than introducing it all on the 1st of January, if we could talk them into doing it over a one, two or three-year period, then I think the municipalities would find it a lot easier to manage. I believe my hon. friend might have been in on some of the discussions on that. And we convinced the hon. the minister to go to Cabinet and the minister did so and he did it in a rush. I don't care what the Government House Leader admitted to Sir, I am telling you the truth. It was done in a rush and we did it for the sole purpose of helping municipalities in this Province make their budgets, put their budgets together and have them ready.

Now, the other misconception that the hon. member and a number of hon. members have brought to this House, is that municipalities in this Province have to submit their budgets by the 31st of December. Mr. Speaker, a very small percentage of municipalities in this Province submit their budgets by the 31st of December. Most submit their budgets by the 31st of January, and, on January 1, 1993, a circular went out to every municipality in this Province - on January 1 - expressing the concern over the anomalies that were in the act and instructing the people, the municipalities across this Province, to do their budgets based on the fact that there would be legislation introduced in the House of Assembly as soon as it could be announced, and to judge themselves accordingly.

Now, Mr. Speaker, if there are members of the hon. the Opposition who are going out, and went out, and told municipalities in this Province, after getting a letter like that, to stick, as the hon. member said, to the letter of the law, as far as I am concerned, he was not only encouraging the municipality to break the law, but he was breaking the law himself, and I think it is a shameful, irresponsible act.

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

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

MR. SULLIVAN: I didn't break the intent of the law. I explained the options to municipalities, and that minister has no right to accuse me in this House of breaking a law when his own government established the law in this Province that now they are making retroactive and they are saying it is not valid. Now, I ask the member to retract his statement.

MR. SPEAKER: There is no point of order. The hon. the Minister of Municipal and Provincial Affairs.

MR. REID: I will repeat my comment. I said `if', if you notice, and I am sure the hon. the Speaker noticed that I said `if' - if any members are doing that.

Now, Mr. Speaker, I am surprised, too. I would never stand up in this House and admit that I had councils in my district that weren't as smart as the council of the City of St. John's or the council of the City of Mount Pearl.

AN HON. MEMBER: Who said that?

MR. REID: The hon. the Member for Mount Pearl stood a few minutes ago in this House and said that within a matter of days after the legislation was introduced in this House, his council found the anomalies and acted accordingly. In fact, he said a few minutes ago that he was the one who called the minister and called the deputy minister and brought the anomalies to the attention of the minister.

Now, I am sure that the councils in the Carbonear district had no problems with that, because they are, out there, probably as smart, and I am sure, as smart as the councillors and the staff in the City of Mount Pearl, and I would put them up against the City of Mount Pearl or the City of St. John's any day. So shame on anyone who would down or degrade their councils by saying that: Oh, they didn't know and they didn't understand, so they did it. I can't sit here and accept that.

The reason why this particular piece of legislation, or the changes to this legislation, are being introduced now is directly because of a mistake that we made - yes, and I give the hon. member all the credit in the world - of a mistake that was made on the legislation but was corrected early in January of this year. That was corrected by a letter from the minister to all municipalities and now, because of what has happened since then - an election, the opening of a new House of Assembly and so on, a new sitting, it took us until this time. I really don't know if there was any rush to get it in right now. All those cities - the City of St. John's had no problems with this; the City of Mount Pearl had no problems with this; the Town of Carbonear had no problems with this. So I don't know why there are people out there with problems.

Mr. Speaker, let me just make a few closing remarks. The other comment that was made - several of my hon. colleagues made a comment about: How would you get cable companies to pay? Some of the cable companies are going to be hard to get money out of. I guess, we all - anybody who has been in municipal politics knows that it is not only cable companies that are hard to get money out of. Everyone is hard to get money out of today, and there are all kinds of ways of getting money from cable companies, there are all kinds of ways of getting money from individuals, and I am surprised that someone would get up in the House and say that it is going to be hard to get money from cable companies. It is no harder to get money from cable companies than from any business that is in the community or anyone else. You have methods and ways of doing it and I am certain that everyone would do it.

Mr. Speaker, 2.5 mils is a fair amount for municipalities to be charging utilities in the Province. In fact, from my experience with the Federation of Municipalities, and I am sort of sorry that the hon. Member for Mount Pearl is not here, because we were lobbying the provincial government back in the days when the Premier's name was Mr. Peckford, in bringing in a uniform utility tax in the Province, and they resisted it. The previous government resisted it because of the pressure and I guess the control that the previous government, that other outside companies I guess and other interest had over the previous government, because why that legislation was not brought in years ago I do not know.

I said earlier that some of the towns in Newfoundland were charging as much as 13 per cent. I was wrong, Mr. Speaker, I was reminded after by a friend in the House that there was one town in the Province that was charging 30 per cent, 30 per cent and if that is not gouging, I do not know what is. Mr. Speaker, I really do not need to say any more. It is a good bill, the original bill was a good bill, there were a couple of mistakes made and this piece of legislation will rectify the mistakes.

Mr. Speaker, I move second reading.

On motion, a bill, "An Act To Amend The Taxation Of Utilities And Cable Television Companies Act", read a second time, ordered referred to a Committee of the Whole House on tomorrow. (Bill No. 5).

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

MR. ROBERTS: Thank you, Mr. Speaker.

We are making such splendid progress, let us call Order No. 9, Bill No. 7. The second bower in my friend, the Minister of Health's attack upon the menace of cigarette smoking.

Motion, second reading of a bill, "An Act Respecting The Control Of The Sale Of Tobacco To Minors." (Bill No. 7).

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

DR. KITCHEN: Thank you, Mr. Speaker.

It is with some pleasure that I introduce this Bill, a Bill that would raise the age at which people can purchase cigarettes from

sixteen, as it is now in the Province under provincial legislation, to nineteen. We do that for a variety of reasons. I should say at the beginning that federal legislation recently raised the level at which cigarettes can be purchased to eighteen across Canada, and in addition made another interesting move in that tobacco vending machines are restricted to licensed premises now, so that further restricts the sale of tobacco, because one of the problems we had in keeping children from smoking was that they could buy it at tobacco vending machines, but now by federal law these are restricted to licensed premises and children are not allowed in licensed premises.

AN HON. MEMBER: Liquor licensed premises.

DR. KITCHEN: That is what I mean, into liquor licensed premises. Now we want to increase the age from eighteen to nineteen and there are some very good reasons for that. One reason is enforceability of the law. It is hard to distinguish between an eighteen year old and a seventeen year old and we have no system in place in the Province by which to distinguish eighteen year olds, but we do have a system in place for nineteen year olds. In order to purchase alcoholic beverages in this Province one has to have an identification card produced by the Liquor Licensing Board. That is available and it is a procedure that is in place, so now to purchase cigarettes what we hope to do is to make that identification available to people who wish it, who want to purchase cigarettes as well.

So that will make a very simple way for shop owners to say, have you got your ID? The ID that will be acceptable will be this laminated card from the Newfoundland Liquor Licensing Board. Nineteen is easier to enforce than eighteen because we have no comparable identification with a picture on it and so on. That is one of the reasons for doing it. Another reason for bringing this in and making it nineteen is the very severe problem that we have with children smoking. It is known that most big smokers in Canada start before the age of eighteen, and in fact in a recent Canada Health and Welfare survey over 90 per cent of young people who smoke report that they started smoking before the age of seventeen. The report suggested that if initiation of tobacco use could be delayed until the age of nineteen it would be effective in preventing the vast majority of Canadians from smoking, since very few Canadians start smoking after the age of eighteen. So if we can jack it up to nineteen, and if we can enforce it, it would mean that very few people will ever... It is sixteen in the Province now and it is not enforced very well, although some people try.

AN HON. MEMBER: (Inaudible).

DR. KITCHEN: No. The problem we are having in the health care system is that too many people smoke. If the hon. member is disputing the problems of cigarettes, I will gladly arrange a visit to some hospitals where people are dying of lung cancer, if you really want to be convinced. I can even show you lungs that have been taken out of people who have had lung cancer, and look at the colour of them. If that does not frighten the smoke out of your throat, nothing will. It is a very, very serious question, and the same is true with respect to alcohol. We are not going to lower the alcohol age either, for the same reason. It is a very severe health problem in this Province.

This is just another thrust, Mr. Speaker, in our prevention of people from becoming ill. We want to keep people healthy as long as we possibly can. I have, in this portfolio, very much interest in this because we have great problems getting sufficient funds from the Treasury here to run the health care system, and if we can reduce our needs in health care because we eliminate the problems of smoking and the problems of alcohol, and the problems that are caused by these things, and caused by overeating, and caused by lack of exercise and a variety of other things, then we will have a healthy population and we will all live to be 100 years old and just die in our sleep. That is what we really want to be, so I believe that a lot of that is possible. Certainly, if we can prevent the 700 or 800 people who die from diseases related to smoking in this Province every year we will be further ahead.

The problem is, everyone starts young. Smoking begins at an alarmingly young age of twelve and thirteen. I have some more data here just to indicate that in Newfoundland at the moment, or in Canada, girls are more likely to smoke than boys. In 1966 girls were only 34 per cent of smokers age fifteen to nineteen. Today 60 per cent of the people fifteen to nineteen who smoke are girls. That is a very strange thing.

The other problem is that parental smoking is a major influence on whether children become smokers. In households where both parents smoke, 33 per cent of teens age fifteen to nineteen are smokers. In households where there is one adult smoker, the percentage drops from 33 per cent to 21 per cent; and in households where there are no adult smokers, the percentage drops to 13 per cent. So the parents are role models for their children in smoking and we have to be very careful of children smoking.

Mr. Speaker, the procedure here, we hope, if this does pass second reading, we are hoping that it will be referred then to a legislative review committee, just as we are referring the other bill to a legislative review committee, so that input can occur from various groups and so on if necessary, and then in the Fall we can conclude this legislation.

Mr. Speaker, I think that will conclude my opening remarks. Thank you.

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

MR. SULLIVAN: Thank you, Mr. Speaker.

It is certainly my pleasure to support any bill that is going to be very positive for young people and positive for old people too because hopefully these young people will live long enough to be old people.

I guess one point I would like to make is: Why permit it in vending machines at all? We do not have liquor in vending machines so why should we have cigarettes available in vending machines? Get rid of the vending machines. At least that is one way they will not access it, unless they do it through a proper establishment.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Thank you. Maybe we will amend it.

Also, I have a severe problem. I would be very interested in knowing what the statistics are for penalties given to violators, or how many violations there have been in the enforcement of it as it currently exists. With a lot of laws that pertain to numerous things in this Province, by increasing it to nineteen possibly prevents easier access to it, but I have a feeling that an eighteen year old who wants to get access to tobacco is going to get access to it easier than a fifteen year old is going to get access to it. I would be very concerned with enforcing the law as it is, and having a greater emphasis there in addition to increasing it certainly too because we know a lot of kids now who are smoking at twelve, thirteen, fourteen and fifteen that we now have the authority to be able to stop them from smoking. I see them, they are around everywhere. Okay, with that before I get carried away too far, Mr. Speaker, I will adjourn the debate, since it is getting late.

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

MR. ROBERTS: Mr. Speaker, I appreciate the hon. gentleman adjourning the debate before he carried us into a night session and I thank him and we will call the Bill in the morning and he can carry on then.

Mr. Speaker, I am advised in consultation with the table officials -

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: Eight o'clock tomorrow morning? I say to my friend for Grand Bank, if he can get his cadillac in here by then he will find me here. My father calls it my puberty wagon.

Mr. Speaker, I am advised by the clerks at the table that for the better assurance that our committees are fully and properly constituted after consultation with the journals going back to 1968, I think, I am advised that we should ask if Your Honour would be good enough to put to the House a motion that the reports of the striking committee be received and adopted, so I so move, Sir.

MR. SPEAKER: On motion duly made and seconded by the hon. member it is resolved that the committees be constituted as put forward by the striking committee. All those in favour, 'aye'.


MR. SPEAKER: Those against, 'nay'. Carried.

The hon. the Government House Leader.

MR. ROBERTS: Mr. Speaker, in moving the adjournment may I say that when we meet at 9:00 in the morning, when we get through the routine proceedings, we shall carry on with the Sale Of Tobacco To Minors Bill and then if we get through with that perhaps we could go on with the Budget Speech because I understand there are one or two members who might like to speak. My friend from Torgnat Mountains, who seems to be temporarily absent from our ranks, but it is only for a few minutes I am sure, would like to speak and I am given to understand members on the other side so perhaps we will go on tomorrow with the Budget but I do not know how long it will take to take care of the Tobacco Sale Bill. I move the adjournment, Mr. Speaker, until 9:00 a.m.

On motion, the House at its rising adjourned until tomorrow, Friday at 9:00 a.m.