November 24, 1993          HOUSE OF ASSEMBLY PROCEEDINGS          Vol. XLII  No. 21

The House met at 2:00 p.m.

MR. SPEAKER (Dicks): Order, please!

Statements by Ministers

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

DR. KITCHEN: Thank you, Mr. Speaker.

Mr. Speaker, I wish to inform hon. members of the details of government's decision concerning the reorganization of hospital boards in the St. John's region. I would also like members' indulgence to do this because I have had to speak first to the Chairs and CEOs of the boards on much the same point. I know the normal procedure so that members of the House know about it beforehand.

In the Budget Speech, Mr. Speaker, of March, 1992, I stated that government would be looking at ways to reduce the number of hospital boards in the Province. We subsequently appointed Mrs. Lucy Dobbin to hold consultations throughout the Province and to make recommendations to government on this matter.

Mrs. Dobbin presented her Report in early 1993 and on March 3, 1993, I made the Report public. At that time, I announced that we agreed with the basic thrust of the Report but before implementing any recommendations, we would be having broad consultations throughout the Province, especially with those most affected by the proposed changes.

Since last March, there has been a great deal of consultation, individually and collectively, with boards in the Province to discuss the recommendations of the Dobbin Report for reductions in the numbers of hospital boards. I found those consultations to be very beneficial, and I appreciate very much that people made themselves available to me to review this important issue.

Recently, I had further discussions with Cabinet colleagues and, as a government, we have considered the issue in great detail. As a consequence of our discussions and deliberations within government, we have made certain decisions with respect to some of the recommendations in the Dobbin Report. Recently, I announced our decision to appoint regional boards in Central Newfoundland; one for the East Central area and one for the West Central area.

In recent months, I have been meeting with the board Chairs of St. John's hospitals to discuss the board restructuring issue. Much thought has been given to this matter by the boards, by the Department of Health, by me and by government. I now wish to announce publicly that government has made a decision to adopt the basic thrust of the Dobbin Report for the St. John's region and will be taking the necessary steps to have all hospitals located in this region governed by one Board. This board will be responsible for the General Hospital; St. Clare's Mercy Hospital and the Dr. Walter Templeman Hospital, Bell Island; the Grace General Hospital; the Waterford Hospital; the Janeway Child Health Centre; and the Children's Rehabilitation Centre.

This announcement implies significant change in the governance and delivery of health services by hospitals located in the St. John's region. The new board will be involved with government in planning for the location of acute care services in St. John's on two sites.

Mr. Speaker, this model is a major challenge for those entrusted with the responsibility for the governance and delivery of health services in the St. John's region. It will greatly improve planning, coordination, and delivery of patient care services in the area. The new structure will streamline administration, management, and support services and will result in the elimination of unnecessary duplication of services among the various sites. It will impact positively on teaching programs, such as medicine, nursing and the allied health professions. As well, it will strengthen research capacity and create a critical mass of services, allowing us to better assess the quality of services and the outcome from various health interventions.

While the restructuring will have an impact upon staff, every effort will be made to accommodate staff affected from this reorganization.

The new board structure will provide the opportunity to enhance patient care services and will allow us to improve efficiencies in resource utilization. In general, this approach will provide a climate for more innovation and cost effective delivery of quality health care services.

While we look forward to working with the new board, I want to pay tribute to our existing partners in health care in the St. John's region who have individually made significant contributions to health care services in this Province. In recognizing this significant contribution, however, the time has now come to forge these individual efforts into one collective effort for the benefit of the people of the Province. In moving forward to address the challenges and new realities of the present and the future, there is much we can learn from past experiences.

In conclusion, in the very near future I will be appointing the new board. In doing so, I shall be having further consultation with existing boards in the St. John's area for nominations to the new board. I would anticipate that the new board will assume its official responsibility for facilities in the St. John's region by April 1, if possible, certainly early in the next fiscal year. This will allow a transition period, during which the new board will work with existing boards in the St. John's region.

Thank you, Mr. Speaker.

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

MR. SULLIVAN: Thank you, Mr. Speaker. Our Party can certainly support any efficiencies that are going to occur in the health care system. I think it's very important to look at the overall cost of delivering a service. If there's any place in this Province where possibly boards could be combined it would be in the St. John's area. It's a matter of really hauling out of a hat a number of hospitals and putting them under a specific board.

If these savings in administration, or so-called savings in administration, are going to be used in the system to improve the delivery and improve the quality of health care services in the Province, I'd say well done. If it's going to be used to reduce numbers and be gobbled up into the general finances and not continue and be redirected in the health care, it's another problem.

SOME HON. MEMBERS: Hear, hear!

MR. SULLIVAN: The Dobbin Report does not address two of the basic conditions that should be addressed in restructuring a health care system. One is in the improvement of the quality of health care service that should be provided, and secondly in improving efficiencies in administration. The Dobbin Report does not in any way address these two areas at all. In fact, if the government has a report that addresses these I'd ask them to table it in the House, the basis upon which they've reached this.

Now, overall, I certainly agree efficiencies in administration could be achieved. It's important that we look overall at using these dollars to reduce the waiting lists for people who can avail of service. For people who are dying on the heart surgery waiting list. For hospital beds that are closed. For the hospital, the health unit, in Forteau and Port Saunders that have been built with $6 million and $8 million that can't hire staff to run these facilities, that are standing there as tokens or symbols of a health care system.

I ask this government to make sure that efficiencies are not gobbled up in the general finances and they're put back into the health care system, and it's not an avenue to be able to reduce the government's deficit on the backs of the health of the people of this Province.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Does the hon. the Member for St. John's East have leave of the House on this matter?


MR. SPEAKER: No leave?

Further Statements by Ministers.

The hon. the Leader of the Opposition.

MR. SIMMS: Mr. Speaker, yesterday I rose in the House to pay tribute to a constituent of mine who had been well known in our area of Grand Falls, Mr. Cater. I neglected to take the opportunity yesterday to -

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

MR. SIMMS: I'm paying tribute to a couple of people who have passed away.

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

MR. HARRIS: I understand that I was denied leave to speak a moment ago. Does the hon. the Leader of the Opposition require leave to speak?

MR. ROBERTS: To that point of order, my suggestion, Mr. Speaker, was yes, he does and, as far as I know, the Leader is not speaking on a recognized order here.

MR. SPEAKER: Yes. Just in response to the point of order, if I may, any departure from the normal procedure of the House requires unanimous consent of all individual members of the House. Does the hon. member object to the Leader of the Opposition making a statement in the form that he intends?

MR. HARRIS: As a courtesy, both to the hon. member and to the individuals to whom the hon. the Leader of the Opposition wishes to pay tribute, I would not deny him leave to make his interjection.

MR. SPEAKER: The point is duly noted.

MR. SIMMS: Thank you very much.

Mr. Speaker, I neglected yesterday to pay tribute to a couple of individuals who had, indeed, passed away since the House last sat in June, and I was reminded today of those individuals. There was some connection with our party in both cases but, in fact, I believe that in both cases there was some connection with the party opposite, as well.

In any event, first of all I would like to ask Your Honour, on behalf of the members of the House, to express our sympathies to the family of the late Walter Hodder, who was the father of former MHA of this party, Jim Hodder, and a former MHA for that party, Jim Hodder, the same individual.

MR. ROBERTS: The same Jim Hodder?

MR. SIMMS: Yes, the same Jim Hodder. Walter Hodder was the Member for La Poile, elected in 1962 and re-elected in 1966, as I remember. I am sure the Premier and the Minister of Justice would remember them personally, having been around about the same time.

He was also former Deputy Speaker and I believe he served as Whip for the Liberal Party in those days. He was the former Mayor, as I understand it, for Channel - Port aux Basques, and I believe he was a former Principal of St. James School in the Port aux Basques area. The Premier, no doubt, knows him personally, because I believe he was there at the same time and they sat in the House together.

Again, while I am on my feet, if I may, I would like to ask Your Honour to express sympathies, on behalf of the members of the House, to the family of the late Hughie Shea, also a former MHA of the House, who has certainly earned a place in Newfoundland political history. He is well-known as a colourful orator and certainly well-known for his political involvement, his political interest as well as his business interest, in the city. I would ask that Your Honour write a letter to the family expressing our condolences.

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

MR. ROBERTS: Mr. Speaker, I would, if I may, for those of us on this side, associate us with the remarks made by my friend for Grand Falls, the Leader of the Opposition. I served in the House, as did the Premier, with Walter Hodder, I also served in the House with Hugh Shea, and I would be happy to say a word in tribute to each and to ask, for those of us on this side, that you instruct your Clerk to send the appropriate letter to their families.

Walter Hodder came into the House, as my hon. friend has said, in 1962 as the member for what was then called Burgeo - LaPoile district, and was re-elected in 1966. Before that he had a most distinguished career as an educator and as a mayor, a municipal leader. He served with distinction in the House. I am not sure that he would be at all approving of my friend associating him, even jocularly, with the Progressive Conservative party, because Walter was a dedicated, lifelong, committed believer in the doctrines of Liberalism and the Liberal Party.

His son, Jim, as my hon. friend has reminded the House, came into the House in 1975 as a Liberal, was re-elected as a Liberal in 1979 and in 1982, if memory serves me, and then took a turn for the worst, as it were, and I believe crossed the House and then was re-elected in due course in 1985 and 1989 as a PC member, all for Port au Port.

Walter Hodder was a fine man, a dedicated Newfoundlander, a fine servant of the people of this Province, and a worthy member of this House.

Hughie Shea - am I the only member left who served with him?

AN HON. MEMBER: The Premier?

MR. ROBERTS: No, the Premier didn't serve with Hugh Shea. My friend for - he was then for Harbour Grace, now my friend for St. John's Centre -

AN HON. MEMBER: For half-a-day.

MR. ROBERTS: No, Sir. Hugh Shea sat in this House during the one-day session. That was the only day he ever sat in this House as a member. He was elected as a Tory, a Progressive Conservative, in St. John's South in 1971, in the election that fall, the near tie election, and when the dust cleared, Mr. Frank Moores had become Premier. Shortly thereafter, I became Leader of the Opposition and, in due course, the House met.

AN HON. MEMBER: A turn for the worse.

MR. ROBERTS: Exactly, it was a turn for the worse when the House met, and then Mr. William Saunders performed his wondrous miracles, which have never been really explained. Bill Saunders has gone to his other worldly rewards, whatever they may be, and sobeit. But Hugh Shea sat in the House for one day, as did my friend for St. John's Centre, who then sat as a Liberal for Harbour Grace.

Hugh Shea sat as a Liberal. It was the most incredible period in Newfoundland. Hugh Shea was not asked by Mr. Moores to join his Cabinet, and promptly crossed the floor and joined the Liberal Party. I have heard of people swimming away from sinking ships, but he swam towards one.

SOME HON. MEMBERS: Hear, hear!

MR. ROBERTS: In any event, Hugh Shea was a unique -

AN HON. MEMBER: (Inaudible) Dr. Kitchen?

MR. ROBERTS: Dr. Kitchen served in the House at that stage for the same length of time as ten or twelve or fourteen other members who were not kindly treated by the electorate. The hon. gentlemen opposite should know about not being kindly treated by the electorate. It's been done to them twice recently,. The third time, just stay tuned and they'll see.

Mr. Speaker, Hugh Shea has a unique and irreplaceable role in the history of this House, and was a colourful and exciting and voluble and vocal and very much a memorable man. His passing has left us all the lesser.

Finally, let me mention, and let me ask, if Your Honour would also be good enough to send word to the family of another man who served this House and this government and this Province with great distinction, and died over the summer. Harold Starks. Harold was the Member for Lewisporte District. Was thrice elected, in 1959, 1962 and 1966. I'm sorry, Lewisporte and Green Bay District. He was elected in 1962 and 1966 in Lewisporte, Lewisporte District was created in 1962 - and then in 1971 went to Green Bay and was elected. Harold and I were great friends. I represented the government at his funeral, as did my friend, the Member for Gander, the Deputy Premier, the Minister of Finance. My friend for Lewisporte was there, as was my friend for Bellevue. It was a fitting tribute.

Mr. Speaker, the thing about Harold, I used to kid him. If he had worked just a little harder in Green Bay District in 1972 -

AN HON. MEMBER: What a disaster he could have prevented.

MR. ROBERTS: He could have prevented a great disaster. Because Harold was not re-elected in 1972 in Green Bay District. There was a matter of a hundred, or fifty, or 200 votes. And he used to say to me: you know, Ed, if I'd worked just a little bit harder, Brian Peckford would never have got into the House of Assembly.

In any event, Mr. Speaker -

MR. TOBIN: And do you know something, Ed? You might have been premier!

SOME HON. MEMBERS: Hear, hear!

MR. ROBERTS: I agree with my hon. friend. That would have prevented the disaster that occurred with Brian Peckford, and the other one with Frank Moores.

SOME HON. MEMBERS: Hear, hear!

MR. ROBERTS: No, the man who kept me out of the House also died, but a couple of years ago, the former premier, Mr. Smallwood.

Mr. Speaker, let me simply say that Harold Starks, in common with these other -

MR. SIMMS: Was he elected in 1971, by the way?

MR. ROBERTS: No, he was elected twice in Lewisporte. Lewisporte District was created in 1962. Before that it had been partially in Twillingate, partially in Green Bay. There was a redistribution in 1962. So thrice elected.

Harold Starks served this country and this Province well. The fact that there's a causeway to Twillingate is Harold Starks' creation, in large part. The late Walter Elliot had a lot to do with it, as did my friend, Les Curtis, but, Mr. Speaker, Harold Starks had the pleasure of building the causeway.

This is what you do when you get us on remembrances. I say to my friend for Grand Falls that we're happy to be associated with him in these matters.

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

MR. HARRIS: Thank you, Mr. Speaker. I wish to join in the tribute to former members of the House. Mr. Hodder was before my coming of age as a Newfoundlander and knowledge of politics. I do remember Mr. Shea, although I had to ask, because I hadn't remembered he was actually elected to the House. I do remember him being quite a forceful speaker and debater in the leadership race for the Liberal Party at one time, and as a candidate in St. John's East, as a matter of fact, on a couple of occasions, in which he placed very low in the polls. I do think that his contribution is deserving of tribute in this House, as all hon. members.

I didn't know of Mr. Starks' great role in - by not working hard, I guess, to not see Mr. Roberts in the premier's chair. I wouldn't agree that we ought to trade the evil that we did know for the evil that we know not, had Mr. Roberts become premier. So I guess Mr. Starks deserves some credit at least for not putting us right over the brink totally into, as I say, the evil that we know not.

On a serious note, Mr. Speaker, I would like to be associated with the remarks in support and the tribute to the three former members of this House.

MR. SPEAKER: On behalf of hon. members I would like to welcome various groups to our visitors gallery today. First of all there are fourteen ladies from the Females for Future Focus Program, sponsored by the YMCA. They are accompanied by their instructors; Melinda Warford and Rosalind Edison, Leading Tickle - Exploits District.

There is a further group of thirty Grade nine students from St. Mark's Elementary School in Shearstown, Port de Grave and these students are accompanied by their teachers; Clarence Mercer and Mr. Herman Tuttle.

I would also like to welcome six international faculty members. Four from Malaysia and two from China who are here under a cooperation agreement between their governments and our federal government and who are going to be at the Cabot College for some time.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: They are accompanied by Ms. Elaine Hann of Cabot College.

Oral Questions

MR. SIMMS: Mr. Speaker, I want to continue on the same track we have been on for the last couple of days. I have some questions for the Premier on this Hydro deal. In his efforts to hoodwink some of the people, at least, in the Province into accepting this scheme to privatize Hydro, the Premier has made much to do about the debt, Hydro's debt question. Now he would have us believe that getting rid of Hydro's debt will somehow turn around the Province's financial position overnight. That is the impression, that is the perception. Now, Mr. Speaker, the fact of the matter is, what the Premier is talking about is not the direct debt of the Province but the debt that government has guaranteed. That is what he is talking about. Now government guarantees a lot of borrowing as he knows for Crown Corporations and municipalities, private businesses and so on, Hydro's debt is like that. Now whether that debt stays or goes will in no way affect the amount of direct debt which really is money borrowed by the Province for its own operations, unless Hydro defaults, and that is, they are unable to pay the interest on the debt. Now, Mr. Speaker, it is much more likely that the Province will go bankrupt on its own debt before Hydro ever does.

Let me ask the Premier this specific question: Isn't it a fact that whatever happens to Hydro, whether it is sold or whether it is kept, the Province will never have to take over Hydro's debt and pay interest on it because the cost of paying the interest is automatically built into the electricity rates? Let me ask him specifically, has his government or any other government, ever paid one cent in interest on Hydro's debt?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Let me deal with all of the points the hon. member raised. First, the suggestion that I put forward the proposition that getting rid of Hydro's debt from the Province's balance sheet is going to solve all our problems. No, Mr. Speaker, that is the straw man that the Opposition has put up so that they can knock him down. They cannot knock down the real man so they need a straw man that they can knock down. So they had to fabricate these straw men so that they can blow them over or push them over because that taxes their intellectual strength beyond their capacity to do anything more than that.

Now, Mr. Speaker, that is where these suggestions - and that is where most of these faults and totally wrong statements have come from. They have been fabricated for this purpose. So I just wanted to make that clear.

The amount of the Province's direct debt would be reduced as a result of a merger. It would be reduced as a result of the Province not having to borrow, or paying off, using the proceeds of the sale to pay off whichever occurred. Using the proceeds of the sale they would either pay off a portion of the existing direct debt of the Province or they would avoid borrowing more and so reduce the direct debt of the Province. They may reduce it by $200 million, $250 million, $300 million, $350 million, whatever we get from Hydro in the sale will cause a direct reduction of the Province's debt by that amount. So yes, there will be a direct reduction in the Province's direct debt by that amount.

In addition, Mr. Speaker, the Province will have its credit pressure, its credit rating and its credit worthiness improved -

MR. SIMMS: Absolute garbage.

PREMIER WELLS: Now if you want to measure the intelligence of that comment, just listen to this.

MR. SIMMS: You are misleading the House, again.

PREMIER WELLS: If that hon. member owed $1,000 his banker would look at him and say: Yes, we can trust you for another $200. You only owe $1,000; we think that is within your reasonable ability. But if that hon. member, in addition to owing $1,000 had also guaranteed another $1,000 for his son, or his daughter, or his wife, or somebody else, the bank would look at him and say: Well, I am not so sure we should... You have enough to pay your own debt, but if you ever have to be responsible for other debt that you have guaranteed, that affects your credit rating. We are not so sure we should loan you that money; or if we do, we think we should have a few basis points more on our interest rate that we charge for that. That is a normal business principle. I am surprised the hon. member does not understand it.

MR. SIMMS: (Inaudible).

PREMIER WELLS: I am surprised the hon. member does not understand it.

MR. SPEAKER: Order, please!

One question at a time.

PREMIER WELLS: I am surprised the hon. member does not understand it, and he has to keep shouting to prevent the issue from being explained.

So, Mr. Speaker, those are the ways in which the privatization of Hydro would impact favourably on the Province's balance sheet, both by enabling it to reduce its debt by that amount - by the amount of the proceeds that it gets - and by having its balance sheet cleaned up by having an immediate reduction in its liability of a significant portion of it, and having the rest phased out over maybe five or six years, as would be proposed.

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

MR. SIMMS: Mr. Speaker, is the Premier now trying to tell us that he has not been telling the people of this Province for the last number of weeks that one of the main benefits in privatizing Hydro is because of the effect it will have on the Province's debt? That is what I said at the outset, and he denied it now and says that it is a straw man that we throw up so we can blow it down, and all that nonsense. It just goes to show the credibility of his argument.

Mr. Speaker, the other thing, of course, is that he did not answer my question. I asked him if his government or any other government has ever paid one cent in interest on Hydro's debt. The answer, of course, is `no'. That is why he did not answer it, I suppose.

Now let me ask him this: Instead of paying interest on Hydro's debt, as I just said, the real truth is that government makes money off Hydro's debt because it charges Hydro a 1 per cent guarantee fee which he and his government introduced a couple of years ago. Now I want to know how much do you make from the guarantee fee on Hydro's debt; and how much did you make last year; and how much in the last two years since it has been in effect?

I want to ask the Premier: Does the government, by chance, charge a guarantee fee to any other company or agency, either public or private, in the Province, that holds a government guaranteed loan? There are hundreds of them.

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Yes, Mr. Speaker, as a matter of policy we charge the guarantee fee on all borrowers for whom we guarantee. All of the borrowers we charge, except municipalities. We do not charge municipalities, but when we guarantee money for a company, a fish plant or anything, we charge the 1 per cent guarantee fee. That is perfectly normal, and we have been doing it for four years. We started it first when we came in, and it has helped control the requests for the guarantee and has provided a level of revenue because on many of these guarantees the government is frequently called and we have to pay up the money, and this provides some revenue to enable government to do it. It is, in effect, the kind of surcharge or tax charge on those who borrow with government guarantees, that provides some remedy, some resources, to the taxpayer to pay off any guarantees on which they are called.

So this is a perfectly normal thing. I am surprised the hon. member was not aware of it.

MR. TOBIN: (Inaudible).

PREMIER WELLS: We charge it to everybody except municipalities. Any public municipality, we would not do it.

MS. VERGE: How much do you get from Hydro?

PREMIER WELLS: Ten million, or just under $10 million, I think it is, for Hydro.

Now, just stop and think. This is the income the government gets.

AN HON. MEMBER: (Inaudible).

PREMIER WELLS: Just listen now. I will answer the question. If the Leader of the Opposition wants the Member for Mount Pearl to answer the question, I am sure he will ask him.

MR. SIMMS: We would get the truth then.

PREMIER WELLS: He would get a fabrication; that is what he would get - utter nonsense.

That is the government's total return from Hydro. There is no other return that the government gets from Hydro. It has equity invested in it and I think the equity on the books is $227 million, something like that. We are guaranteeing $1 billion and we get $1 million return. Is that a good investment for the government? Is the government profiting by that? Are not the taxpayers of this Province better off to privatize Hydro and let the private sector put up this money, generate economic activity, cause more economic activity to take place, get the use of the full value of Hydro's assets to the government? We hope it will be a good deal more than the equity value on the books. We hope we would get a great deal more from that, lower the government's borrowing and get rid of $1 billion worth of indirect debt. Now, there is good management.

SOME HON. MEMBERS: Hear, hear!

MR. SIMMS: He is misleading the House again.

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

MR. SIMMS: Mr. Speaker, I would like to know how the Premier of this Province can stand in his place and try to justify with a straight face giving away a corporation that has at least a couple of billion dollars worth of assets, at least a couple of billion dollars worth of assets, for $230 million as he said on television?


MR. SIMMS: Do not try to hoodwink and fool the people. I am trying to ask the Premier a question about the debt.

AN HON. MEMBER: It is a good thing you are not in real estate, Len.

MR. SIMMS: I say to the Minister of Finance that if I were in real estate this privatization deal would remind me so much of the Premier walking up to the front lawn, putting a For Sale sign on that front lawn and then turning around, going in to me as the owner, and saying you have the first chance to buy it, after getting rid of it. That is how silly it is.

The Premier has already said, I presume, I know he has said publicly that he intends to continue to guarantee the existing Hydro debt after Hydro has merged with Fortis, or privatized. He has already said that.

AN HON. MEMBER: (Inaudible)

MR. SIMMS: Oh, he has not said that. I see, so everybody is wrong. We will show him where he said it, Mr. Speaker. The question is, will he continue to get the 1 per cent government guarantee from that debt? That is the question I want to ask him.

PREMIER WELLS: Let me correct as many of those wrong statements as I can remember. He is obviously listening to Mr. Jamieson's Open Line show too much. He should get his information from a reliable source. That is not a reliable source for information. Assets worth over $2 billion, going to sell them for $230 million?... all utterly false, totally incorrect, totally and completely incorrect. For those assets we will get more than are on the books, by we hope a very significant margin more, more than they are on the books for.

MR. ROBERTS: He does not know the difference between assets and net worth.

PREMIER WELLS: As the Attorney General points out the hon. member really does not know the difference between asset value and net worth. Mr. Speaker, the assets of Hydro are all available in the consolidated balance sheet. The assets are published. The value of the assets are there. Everybody knows what they are worth. The value of the government's equity, the book value of the government's equity is well known, it is on the books. It is, I think, $225 million. I cannot pick it out right now but it is in the vicinity of $225 million. We have no intention of selling it for $225 million. We would expect that we would get a significant premium on the book value as did Nova Scotia in the sale of Nova Scotia Power. We would expect to get a good sizable premium, as much as we can, and all hon. members are doing is making it more difficult for the taxpayers of this Province to really get the true value out of this. That is all they are doing, and when this whole debate is over, whether it is merged and then privatized or, privatized on a stand-alone, or nothing at all happens, I will make public all of the figures, and then the people of this Province will be able to see just how much harm - just how much harm - the irresponsible misrepresentations of the Opposition now have done to them and how irresponsible the Opposition have been.

Now, on the question as to whether or not the government - or whether I said, at any time, the government is going to continue to privatize Hydro's debt, let me say again what is proposed. Of the total debt of something under a billion dollars, of Hydro, here is what is going to happen to it; here is what is proposed would happen to it, assuming everything is worked out. Here is the general thinking at this stage:

A portion of it, maybe 1/3 of it, would be paid virtually immediately; the cash would be there and it would be paid immediately. Now, as much of it as we can cause to be paid immediately would be caused to be paid immediately, otherwise, of the total proceeds of the sale, we would have to take a portion of it in cash and set it aside, because we couldn't risk taking more cash out of it to get a bigger return. We could get a bigger return for the taxpayer if we wanted to, but we have to act responsibly for the taxpayer and for the rate payer, so we would foresee one-third of it either being paid immediately or the equivalent in cash being put aside to pay it, so there is no possibility of any future liability, it is there - the cash is there to pay it.

Another one-third of it would be repaid as it would fall due in the next five to six years, so, I said it would be eliminated within five to six years. The remaining one-third, we would propose, would be treated with the same process as Nova Scotia treated it. The phrase the investment bankers use to describe the action is, it would be defeased. In other words, the funding necessary for it, financial resources sufficient to discharge it totally, would be put in place, so that the financial community could look at the government's debt and say: Here is the money to pay it; it is no longer an obligation that the Province need worry about on its balance sheet. So, effectively, within five to six years, it would take care of the problem totally.

AN HON. MEMBER: You are deferring the plan four to six years for the people of the Province?

PREMIER WELLS: It is proposed that there would be a - well, let me go back and restate that. Nova Scotia, put in place a deferred purchase plan that would enable residents of the Province to purchase shares over a twelve-month period.

AN HON. MEMBER: Two years.

PREMIER WELLS: My recollection is, it was a twelve-month period, not two years.

AN HON. MEMBER: Half up front and half (inaudible).

PREMIER WELLS: No, no. It was -

MR. ROBERTS: It made the full payment in twelve months.


PREMIER WELLS: It made the total payment, but I thought it was one-twelfth each month. There may have been half up front, I don't remember. In any event, the total amount was paid over a period of twelve months. There may have been half of it up front - I have forgotten, now, the detail of it.

There is a strong suggestion that this Province should do the same and the purpose for doing that, is to ensure that the people of the Province would have preferred opportunity or preferred access to purchase the financial - have a preferred position to enable them to purchase the shares in Newfoundland Power.

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

MR. SIMMS: A final supplementary, Mr. Speaker.

We will get to the other points that the Premier has been flicking across the House in response to some questions from my colleague here, particularly the question of Newfoundlanders having the opportunity in being encouraged to buy the shares. I mean, that is nothing short of a joke, but we will get into that on another day. I want to ask the Premier this: In response to my last question, he said that one of these days, or when this thing is finalized, and all that kind of thing, he is going to lay all the information on the Table, make it public, so that the people will be able to see how wrong we have been and how inaccurate and all this kind of nonsense. I want to ask him one simple question: Why doesn't he make that information available to the people today?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. the Premier.

PREMIER WELLS: I am delighted he asked. Because if the hon. member were running the Province, if he had my responsibility, and if he were directing the officers of Hydro or giving them the Province's policy position and saying: Here is what you have to do to protect the Province's position, he would say to the chief executive officer of Hydro: Make sure you negotiate in such a manner that you don't impair the government's ability to get the maximum possible return on the sale. Don't tell the other side what your position is. Don't give away your negotiating position. Don't disclose to the other side confidential information that could adversely affect your position.

Now that is what the director of Hydro would do, and that is what the hon. member, as Premier, would authorize him to do if he were standing where I am standing at this moment. That is what he would do.

Now, sitting as Opposition, he stands and makes these irresponsible statements suggesting that the government is doing this in secrecy for some clandestine motive. I did not say, when this all comes out we would see how wrong they are - what I said was, we would see how much harm they are doing this Province by the position they are taking. That is what I said. And the people of this Province will hold them responsible for it.

SOME HON. MEMBERS: Hear, hear!

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

MR. HODDER: Mr. Speaker, one of the other secret sets of negotiations that this government have been involved in is negotiations which have been going on between the church leaders and the government relative to changes in the education system. I have seen, as have members of the press, and some members of the government, the reorganization model that church leaders presented to the government on Monday evening. Under that model, church leaders would have more direct control over school boards and over schools than they have exercised since 1927 when the Department of Education was first created.

After months of negotiation, Mr, Speaker, I ask the minister: Is that where we are, back to the early days of the Department of Education in this Province? We are not, I see in this document, being very progressive. I ask the minister if he could comment on the status of the negotiations and also comment on the report which we all have seen in the last several days.

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

MR. DECKER: Mr. Speaker, last March, the heads of churches advised government that they had a model which would deal with the governance part of education in this Province and they wanted to present this model to government. Early this week, as hon. members know, that model was presented to government. I tell the hon. member that government has some reservations with the model. We will be meeting with the churches next week - next Monday, actually - and we will be making known to them and to the people of this Province what our position is on their model and the way we think we should go with the governance.

MR. SPEAKER: A supplementary, the hon. the Member for Waterford - Kenmount.

MR. HODDER: Mr. Speaker, I do believe, the mistake that the Province has made, that the government has made, is that they have been negotiating only with church leaders. Government's motivation is obviously to save money. The churches want to hang on to their constitutional controls and perhaps, as we have seen, even to enlarge those controls. These negotiations are not focused, in my opinion, on improvements to the quality of education that we want to offer our children in getting them prepared for the 21st century.

I want to ask the minister: When will he enlarge the negotiations to include representatives of all groups that have an interest in education - the parents, the school boards, and the teachers of this Province?

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

MR. DECKER: Mr. Speaker, the hon. gentleman raises some interesting points. The constitution refers to rights held by classes of persons, classes of people. Now, we have gone on the assumption, and certainly the church leaders go under the assumption, that they are the leaders, the persons, who hold those rights. That is the assumption we have been going under. Now, maybe the hon. member is correct. Maybe we should not be dealing with the leaders of churches. We only have to go on the basis that we have been going on, and if the hon. member can put forward some argument, maybe we should be talking with someone else. I don't know that.

As for the secrecy of the debate, nothing has been secret, Mr. Speaker. As a matter of fact, I announced in this House, or I announced publicly - the House was not open - that I was going to put in place a committee made up of representation from various stakeholders throughout the Province. I asked the Home and School Association if they would give me three names, and from these three names I picked a person, Mrs. Marie Rowe - as a matter of fact, she was on television last night. We asked the DECs if they would give a representation. They gave three names, we picked one, and I went throughout the Province, so we have a committee of about fifteen or twenty people who discuss the various points which are raised by church leaders and by government and what have you.

Now, it is extremely difficult - all too often we hear about consulting with the people. It sounds good, but it is just not practical to sit down and talk to every single person in this Province and say, "Now what are your ideas about the governance of the system?" So I talk to Jimmy Toe up in Roddickton and he says, "I think this." I talk to Mary Toe and she says that. It is just not practical; but I agree with the hon. member that we have to keep the public made perfectly aware as to what is going on.

The model which the churches presented to government on Monday of this week was indeed made public, and all the people of the Province have had an opportunity to see it. The discussions which we will have with the churches on Monday, shortly thereafter we will make these discussion public to the people of this Province; and who knows, maybe at the end of the day we will have to find some way to get more input from all of the classes of people. That I can only speculate - I don't know where it will lead us.

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

MR. HODDER: Mr. Speaker, the minister has indicated that he wishes to have the changes implemented by September of 1994. That is nine months from now. In my discussions with the superintendents and with other stakeholders in the education system, they are increasingly having doubt as to whether or not this can be achieved.

I want to ask the minister: What steps will he take immediately to ensure that the implementation of the changes to the structure of education in this Province will be ready for September of 1994?

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

MR. DECKER: Mr. Speaker, I believe it is important that we be ready to make these changes in 1994. There are many reasons. The system is badly in need of reform, and every day which we lose, I believe, is to the detriment of our children.

Another reason, I believe, that we have to make those changes by September of 1994 is, as hon. members will know, we have deferred school board elections, but government does not intend to defer school board elections indefinitely. We are hoping to be in a position to have the new school boards, whichever form they take, in place by next September.

We do have various benchmarks in place which, to date, have not been passed. The churches want to present their model. We asked them if they could have a model to us by this fall. We had hoped to get it before the end of November. We have received their model. We have expressed some reservations about it. We are hoping by the end of this year, or early in the new year, to have a model in place, by consensus, hopefully, which will be acceptable to the people of the Province.

If we can reach these benchmarks, I can assure the people that by September we will have the governance issue all in place; but I should also say, Mr. Speaker, that the governance issue only refers to twenty-odd recommendations in the Royal Commission Report. There are a whole lot of other recommendations which are being worked on daily. There is a process in place, like with talks with the university about teacher training, the lengthening of the school year, or better utilization of the school year. Work is being done on that, and the whole other 180-odd recommendations are being dealt with by a very orderly process.

Any time the hon. member would want to discuss that further, I will be quite pleased to match him up with the officials in the department who are doing it.

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

MR. HARRIS: Thank you, Mr. Speaker.

My question is to the Premier, concerning Newfoundland and Labrador Hydro, our single most valuable revenue producing asset, and a resource which could be the engine of government policy in our future economy.

Will the Premier acknowledge that he, personally, has lost his own objectivity on the issue of dealing with Fortis on the proposed sale of Hydro? And will he acknowledge, as a former Chair of Newfoundland Light and Power, that he cannot act impartially in the public interest in this matter? Will he step aside from these discussions and will he remove himself from this debate?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: No, Mr. Speaker, I will make no such acknowledgement, any more than I would ask the hon. member to acknowledge that he can't vote in any manner, in this matter, in this House that would affect a client for whom he presently works or has worked. He can't express in this House opinions relating to people affected by the Mount Cashel affair, clients of his. I wouldn't ask him to do that and I see no more basis for his asking me to do it. The day that I announced - or I believe it may well have been the day before I announced that I intended to seek the leadership of the Liberal Party, my first step was to resign as Chairman and Director of Newfoundland Light and Power; that I did. That was the day I announced I was going to seek it, long before anything else. I haven't seen anybody on that side apply that same standard - nobody, and I will go back and examine it and you won't find that standard!

SOME HON. MEMBERS: Hear, hear!

PREMIER WELLS: That is right! You won't find that standard. I disposed immediately of any shares that I had in Newfoundland Light - I have not had any interest in it for six or seven years or however long it is since I decided to get involved in public life. Now, I have divested myself of it and I intend to continue to maintain that same high standard. I also intend to bring to bear whatever judgement I have or whatever judgement the people of this Province think I have, because they put me here. It was with their support that I am here and with their full endorsement.

MS. VERGE: They didn't know you were planning to sell Hydro, though.

PREMIER WELLS: They knew exactly in the last election that we were going to sell Hydro.


PREMIER WELLS: They were told.

MR. SPEAKER: Order, please!

PREMIER WELLS: Only the people opposite don't know. If they didn't know it, they are the only ones in the Province who didn't know that the government had stated and had adopted, in a Strategic Economic Plan, the approach to sell commercial-type assets. If they didn't know that, it is there in the plan - read it. I will get it for them. The government's position on sale and privatization of commercial assets is there.

MS. VERGE: What a tangled web we weave!

PREMIER WELLS: The hon. member is quite familiar with weaving tangled webs, I have no doubt about it, so she can speak authoritatively on it.

AN HON. MEMBER: (Inaudible).

PREMIER WELLS: So, no, Mr. Speaker, I do not intend - I think the hon. member is quite wrong. My objectivity is probably far greater than his because he, too, you see, has a concrete mind-set on it. His political position is, `no matter what, don't ever sell an asset, that government own virtually everything.'

MR. SPEAKER: The time for Oral Questions has elapsed.

Private Members' Day

MR. SPEAKER: I recognize the hon. the Member for Burin - Placentia West.

MR. TOBIN: Mr. Speaker, I stand in this House today to present a resolution on behalf of all the taxpayers of Newfoundland and Labrador, I would suggest to the Premier. The resolution says:

WHEREAS the privatization of Newfoundland and Labrador Hydro will burden the people of the Province with higher costs for electricity, more unemployment, the alienation of water rights, and the transfer of tens of millions of dollars every year out of the Province in dividends to shareholders;

BE IT THEREFORE RESOLVED that the government retain Newfoundland and Labrador Hydro as a Crown-owned Corporation.

Mr. Speaker, I find it necessary today to present that resolution, because of the decision by the Premier and his government to give away a profitable Crown corporation that, to some extent, has been regarded as the birthright of every man, woman, and child in this Province.

I listened with interest today to what the Premier had to say. Mr. Speaker, I find that almost on a daily basis, the Premier of this Province shifts his position on this very important issue.

MR. GRIMES: (Inaudible).

MR. TOBIN: The Member for Exploits is speaking again. I don't know if one of the reasons why the Premier is moving with such haste on this is because of the political ambitions and the campaign that is presently underway for the leadership of the party by the Member for Exploits. I don't know if that has anything to do with it. But I, like everyone else, listened to CBC radio the other morning when they talked about the Liberal Convention and all they talked about was the Member for Exploits being introduced to everyone as the Premier. Now, I don't know if that has anything to do with the haste as to why the Premier is trying to move so quickly on this matter. I do not know if he has been threatened or not.

I would just like basically to touch on where Newfoundland Hydro came from and why it came. It started in the early 1950s and it had, basically, three objectives.

MR. DUMARESQUE: (Inaudible).

MR. TOBIN: Mr. Speaker, I tell the member, the time for him to stand up and be a man for his constituents in Labrador who depend on Hydro will come later this evening. But I say to the Member for Eagle River, he will be like most of them over there, he will lack the courage to stand up for his constituents, and instead, bow to the whims and the wishes of one, Clyde Wells. That is what the Member for Eagle River will do, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. TOBIN: There are more guts in a jellyfish than there are in the hon. member.

Now, I want to get back to the real issue, and that is that Hydro was started with three basic objectives: one, to harness the undeveloped water resources of our Province, two, to create a provincial power grid, and three, to provide electricity to all communities in this Province. Mr. Speaker, they have done that. I represent some rural parts of this Province. I represent rural, isolated communities in Newfoundland and Labrador that were given the opportunity to have electricity because of the efforts of Newfoundland and Labrador Hydro. That is why they got it.

MR. DUMARESQUE: (Inaudible).

MR. TOBIN: Yes, and to some extent because of the efforts of Cyril Abery, I say to the Member for Eagle River.

Mr. Speaker, Hydro has achieved these objectives. We all know they have built major plants throughout this Province, such as in Bay d'Espoir, Hinds Lake, Paradise River, my own district, and other parts of Newfoundland. As I said, they have provided electricity throughout this Province, from one end of the Province to the other, when Fortis and their shareholders would not dare get into it, Mr. Speaker. It has been able to borrow money on the markets much more cheaply than a privately-owned company could do.

The other thing that the Premier hasn't mentioned yet, that I will mention, is that it doesn't have to pay corporate income tax because there is an exemption in that regard. Mr. Speaker, when all of this came about, when Hydro was doing all of this in this Province, serving a function, the Premier of this Province - I would suggest, the request, the begging, the tapping on the shoulders of some of his friends to sell it, played a major role. I would suggest that there were shareholders in Fortis Inc. who asked the Premier of this Province to sell Hydro. I strongly believe that the Premier was encouraged, by some distinguished shareholders, to sell Hydro.

Now, what has happened, Mr. Speaker? He went out together with Hydro and asked some of the most reputable financial institutions in this Province, such as RBC Dominion Securities and ScotiaMcLeod to come in and do an assessment. And they did the assessment but would not recommend to this Premier and to this government - they did not recommend to this Premier and to this government to privatize Newfoundland and Labrador Hydro. They did not recommend that. So, what happened? The Premier said it. The Premier didn't get the answer that he wanted from the best and most reputable groups in the company.

MR. W. MATTHEWS: `Glenn', they are government's own financial advisers, by the way.

MR. TOBIN: Yes, they are government's own financial advisers, as well, no doubt about that, and Hydro had them. And to make it look good, the Premier had Hydro pay the bill for the financial advice, as I understand it, but they did not and would not recommend the privatization of Newfoundland and Labrador Hydro. So what happened then? The Premier of this Province, who has committed - and I don't know to whom he had made the commitment, but he obviously had a commitment, because he was hell-bent on privatizing Newfoundland and Labrador Hydro. So he went out and picked five wise men - he said, the brightest, most articulate -

AN HON. MEMBER: All-star.

MR. TOBIN: Yes, five all-star.

MR. WOODFORD: They saw a star.

MR. TOBIN: Yes, they were drawn to the star. So he brought in the five wise men. Now, he never asked: Do any of you hold shares in Fortis Trust? Are any of you in a position to benefit from the sale of Hydro to Fortis Trust? The Premier never asked those questions, Mr. Speaker.

MR. SIMMS: It never dawned on him, he said. It never dawned on him to ask that question.

MR. TOBIN: No, he said it never dawned on him to ask that question. Now, Mr. Speaker, they can try to distract all they like, you will have to respond to your constituents for this, I say to the members opposite.

What happened then? The Minister of Energy got up in this House the other day on two occasions, and didn't think it was going to be picked up. He tried to gloss it over. How did he refer to it?

AN HON. MEMBER: Task force.

MR. TOBIN: A task force.

AN HON. MEMBER: (Inaudible).

MR. TOBIN: Oh yes, Mr. Speaker, if we hadn't picked it up it would be no mistake and it would not be changed either. That was an intentional prompting, I would suggest, by the Premier to the Minister of Energy, because the Premier is good at weaselly words. It was a cover-up, that's what it was, and now, I am hearing - and I would like to ask the question as to whether or not they actually did say to the Premier that Hydro should be sold. I would ask now what they did say and I think, Mr. Speaker, they should be brought before this House and be made to state their position as to what is going on and if they own shares in Fortis Trust, because whoever owns shares in Fortis Trust, in my opinion, is not in a position to be involved in the negotiations or the discussions or to give advice. That is my opinion, Mr. Speaker.

So, the Premier, when he decided to sell Newfoundland and Labrador Hydro, said it must meet three objectives: to create a more efficient electrical industry, to maximize the proceeds from privatization of Newfoundland and Labrador Hydro to the Province, and to be fair to Fortis shareholders.

MR. W. MATTHEWS: That's the big one.

MR. TOBIN: That is the big one - to be fair to Fortis shareholders. Mr. Speaker, this decision to sell Hydro is one of the most important decisions ever to be made by a government in this Province. What the Premier also said, and what he confirmed, was that it was the consumers of electricity, not Fortis shareholders, who will pay the costs of privatizing Hydro.

If one wants to know why that is, it is set out quite clearly in Section 81 of the Public Utilities Act, which deals with how much Public Utilities can charge each company. In the case of a private company, the act states, the rates to be charged should provide sufficient revenue to the supplier of power to enable, in the case of a private company, to earn a just and reasonable return as construed under the Public Utilities Act; number two, in the case of Hydro Corporation, to recover the cost of services provided by it and a marginal profit sufficient to achieve and maintain a sound financial position, so that it is able to achieve and maintain a sound credit rating in the financial markets of the world.

Now, Mr. Speaker, that is very interesting. What people should remember and not lose sight of is that Fortis Trust have bondholders whom they have to please, but they also have shareholders whom they must please, whereas Newfoundland and Labrador Hydro only has the bondholder, not the bondholder and the shareholder, as Fortis Trust has.

What does that mean? That means they go to the Public Utilities -

AN HON. MEMBER: (Inaudible).

MR. TOBIN: The Member for Fogo had a vacation after the last election, and if he isn't careful, he will have another after the next one. Mr. Speaker, I would say, what is important is that over the past four or five years, in the period from 1989 to 1992, Fortis earned an average rate of return on common equity of 13.74 per cent.

MR. W. MATTHEWS: Thirteen point seven - not bad returns.

MR. TOBIN: Mr. Speaker, the backbencher over there should be quiet. He will never be in Cabinet because - I won't get into that. Now, during that period of time, of 13.74 per cent, Hydro, on the other hand, had an average annual rate of income of 5 per cent and that was a direct result of having to satisfy bondholders and shareholders. That is the difference between 13.74 and 5 per cent - because there have to be bondholders and shareholders satisfied in that regard.

Now, Mr. Speaker, another interesting thing -

MR. TULK: (Inaudible) social services in Marystown?

MR. TOBIN: Yes, and I never got fired out of it, either.

SOME HON. MEMBERS: Hear, hear!

MR. W. MATTHEWS: Talk about walking into it, `Beaton'!

MR. TOBIN: Another interesting thing, Mr. Speaker, is that Hydro, as a Crown corporation, and its subsidiary companies are exempted from paying corporate income tax under Section 149(1)(d) of the Income Tax Act. What does that mean, Mr. Speaker?

AN HON. MEMBER: What are you reading from there?

MR. ROBERTS: Cyril Avery's life story.

MR. TOBIN: No, Mr. Speaker, I am not reading Cy Avery's life story, I am reading the research we have done in our office - that's what I'm reading. I may have something to say about the member's life story in due course, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!


MR. W. MATTHEWS: What is more important is what his future life story is going to be.

MR. TOBIN: Yes, and his future.

MR. ROBERTS: I would rather have my future than the hon. gentleman's past.

MR. W. MATTHEWS: Well, we will see about that.

MR. TOBIN: Mr. Speaker, what does that mean in terms of being exempt from corporate income tax? It means that this government

have been exempt from the corporative income tax, it means that this government will, right now, the Hydro figure, exempt by around $15 million to $20 million, Mr. Speaker, that they do not have to pay in provincial income tax. That is what it means; and in addition to this, the Premier confirmed again today, there is a 1 per cent surcharge on all debts - on all Hydro debts - and as the Premier said today, it goes beyond that.

Well our research shows us that 1 per cent debt was somewhere in the area of $11 million, I say to members opposite, so when you put all of that together, when you talk about the corporative income tax exemption that is there that will have to be paid, when you look at that, when you look at the 1 per cent surcharge, that alone adds up to around $20 million - roughly in the area of $20 million a year.

Now, Mr. Speaker, what has to happen - I only have four minutes left; I will have time later on this evening to get into it again -is that there is another $20 million that will be needed. In order for Hydro to sell to Fortis, or to merge, Hydro shareholders will need an additional $20 million, I say to members opposite, in order to pick up the shares that are needed to (inaudible) of Hydro. That is $40 million. Then, if you want to look at the 20/80 debt equity ratio that Hydro presently has versus, I believe, 51/49 per cent debt ratio, or equity debt, I think it is - 51 per cent it is, equity debt there, and it is 80/20 debt equity.

AN HON. MEMBER: Debt to equity.

MR. TOBIN: Yes, Mr. Speaker, and if you were to put that in place, do you know how much it is going to cost in order for Fortis to bring it in line?

AN HON. MEMBER: (Inaudible).

MR. TOBIN: What I said? Sure I will. I said right now Hydro has an 80 per cent debt and a 20 per cent equity, whereas Fortis has a 51 per cent equity and a 49 per cent debt.


MR. TOBIN: Ratio, yes, debt ratio. In order to bring Hydro's debt equity ratio in line with what Fortis Trust is, it will cost an additional $20 million.

So, Mr. Speaker, what that means is that the consumer of electricity in this Province will have to pay approximately $60 million a year more if this deal goes through. That is exactly what it means - $60 million a year.

AN HON. MEMBER: Those are Neil Windsor's figures.

MR. TOBIN: No, Mr. Speaker, they are not Neil Windsor's figures.

The other interesting thing the Premier got on with today, and has never said it before, is in terms of what government is on the hook for afterwards. What government is trying to do -

AN HON. MEMBER: (Inaudible).

MR. TOBIN: Listen, Graham, you wouldn't understand it, so I wouldn't even bother to try and tell you.

What government is on the hook for, Mr. Speaker - what government is saying here - if you look at the 20 per cent, 80 per cent debt equity ratio, is that if you have a house today - I will simplify it for the member, okay - if you have a house today that is valued at $100,000 and you own $20,000 of it, what government is saying is: We will give you the $20,000 for it. Not only that, we will guarantee the rest of your mortgage for the next twenty years. That is exactly what is in this, Mr. Speaker. The remaining $80,000 will be guaranteed for the next twenty years.

MR. W. MATTHEWS: By the taxpayers of this Province.

MR. TOBIN: By the taxpayers of this Province.

AN HON. MEMBER: (Inaudible).

MR. TOBIN: Yes, are you going to get involved in this debate?

Mr. Speaker, one thing that is obvious here is that when this is sold, Mr. Speaker - now, Mr. Speaker, the $6 million leadership candidate going around this Province being introduced as the next leader of the party - the minister would be better off staying quiet than trying to take the Premier's job before he has even decided to resign.

AN HON. MEMBER: Don't chase rabbit tracks.

MR. TOBIN: Okay. Now, Mr. Speaker, when this is said and done the questions that have been asked, the answers to most of them is that there will be definitely losses of jobs in this Province. Definitely be losses of jobs in this Province as confirmed by the Premier and the Member for Fogo, Mr. Speaker, should know what that is like. There will not be a reduction in energy costs.

MR. SPEAKER: Order, please!

The hon. member's time is up.

MR. TOBIN: Mr. Speaker, I will come up this evening.

MR. SPEAKER: The hon. the Minister of Mines and Energy.

SOME HON. MEMBERS: Hear, hear!

DR. GIBBONS: Thank you, Mr. Speaker.

Mr. Speaker, it is a pleasure to stand today and speak against this resolution. There is not a country in the world today, not a country anywhere on the globe, that does not have a major privatization initiative to get out of doing the work that should be done by business. Reduce government, let government do what government should do, let business do what business should do. In our view there is no longer a need for government to be in the business of producing and distributing electricity. It is from that perspective that we are moving forward with what we are doing relative to Newfoundland and Labrador Hydro.

The hon. member who has just spoken said that we have been shifting, that the Premier has been shifting daily, nothing could be further from the truth. We have not shifted one millimetre, one inch, since we started in this process. We are moving forward with this since we made the decision in August to do so. He talked about the haste in the negotiations, there is no haste, Mr. Speaker. We are going to move forward at a pace to do what needs to be done properly. To do what needs to be done in the best interest of the people of Newfoundland and Labrador to make sure that we get the maximum benefits from this privatization that we are talking about.

He gave a little bit of history on Hydro and that history was correct. Sure, Hydro was started thirty or forty years ago to help develop the water resources when our private sector was not capable of doing it. It was too small, it could not do the Bay d'Espoir's of the world. It did not have the financial wherewithal to do it. There was no one in the private sector that had the capability at that time to do the provincial grid. No one had the capability to do it and Hydro was put in place with that mandate and Hydro has done it. Since the time Hydro started it has done what it was put in place to do. It has electrified Newfoundland. The public policy reason was there many years ago, today it is no longer there. The rural communities throughout this Province have for the most part now been connected to the grid. There are some places where they have not been connected because the expenses would be too high to connect them and we are addressing them in a different way but for the most part the public policy reason for Hydro's existence is no longer there. We can therefore move forward and let the private sector continue with the business.

The member mentioned corporate income tax. Sure a private sector company pays corporate income tax but from coast to coast in Canada corporate income taxes that are paid to the federal government are returned to the provinces, for the most part, not 100 per cent but for the most part they are returned to the provinces. I think right now it is 85 per cent that gets returned to the provinces and then it is up to us what we do with these corporate income taxes. We do not have to keep them.

MR. TOBIN: (Inaudible).

DR. GIBBONS: No, let me finish. In Nova Scotia's case when the federal government sent that corporate income tax back to the province the company was given the corporate income tax.

AN HON. MEMBER: The company?

DR. GIBBONS: For the rate payer. To keep the rates down. The provincial government gave that corporate income tax back for the rate payer. We're not sure exactly what we're going to do yet but we're looking at that same issue.

MR. TOBIN: Will you make a commitment now to do that for us?

DR. GIBBONS: I'm not making a commitment now but we are looking at that same issue. So corporate income tax is a factor in all this and we're still working on it. We haven't concluded yet.

The member said that someone in Fortis asked us to sell them Hydro. Nobody in Fortis asked us to sell them Hydro. We're not selling Hydro to Fortis. We're talking about a merger here, and if we can negotiate a merger, a true merger, that will reflect the 70 per cent of the industry that we own, approximately, and the 30 per cent that they own, approximately, then we will have a public share offering, an equity offering, to get the maximum price that the public will pay. We're selling to the people at large.

I want to carry on and say a little bit more there about what Fortis did ask for at one time, what Fortis did propose at one time. Back in 1989 when we were looking at the power distribution districts, the rural areas that are on diesel right now, and some of the associated interconnected areas that are now serviced by Hydro. Primarily the Northern Peninsula, but mostly these rural remote areas that had not been previously transferred over to Light and Power. They put in a proposal to us at that time to purchase these rural assets that were primarily power distribution assets. The rural diesel areas, the interconnected areas as well that Hydro has, the 15 per cent that Hydro has. That's what they were looking for.

We assessed that back in 1989 and the committee recommended against this and we told them: no. That's the proposal that came back again just a few months ago. It was in January. In January after I had told Hydro about it late in 1992, they came back to me in January and said: yes, we think this should be thoroughly assessed right now, but in addition to thoroughly assessing this we believe we should look at various alternatives. Variations on it. Included in those variations were the other three alternatives that the Premier has already talked about in the last couple of days. We will assess Hydro on its own. Is it viable on its own? This is what the Hydro board said. We will do this, and we will also look at the other options. Whether really it's feasible to have a privatized Hydro on its own, or privatize Hydro through a merger. We said: go forward, do that assessment, but give us an answer. We want an answer from you on the proposal from Newfoundland Power to buy these rural assets, the rural remote assets.

A few months later they gave us their answer. As they did in 1989 they did again in 1993. They recommended that we not sell that little bit, the rural remote assets, to Fortis. It was after that that the committee was put in place in June that we have talked about and heard so much about in the last couple of days. The committee was put in place to address the `if'. We have talked about privatization as a policy, now let's look at it and see whether or not we should be privatizing Hydro. So that special committee that was put in place looked at the `if'. Should we privatize or should we stay with the status quo?

The committee first reported to me and the Premier on June 29. It later reported to the Cabinet in August. It was out of a Cabinet discussion at that time that Cabinet said: we believe we will now proceed forward. We will go forward with a privatization. What the committee told us, and what Hydro had told us before, was that if we did consider privatization, the best, most efficient industry, would be through a merger first, and then privatize at that time, because we would take care of the redundancies that are there now between the two companies.

On August 30 we decided we would go forward and talk to the people at Fortis to see if they were interested in a merger. So on August 30 the Premier and I and the president of Hydro met with the chairman of Fortis, and the president of Light and Power, and said: here is what we're now thinking. We have assessed the `if' of privatization, we have assessed whether or not we should proceed with a privatization, and under these conditions - and we gave them the page of conditions - we believe we can go forward with privatization. We said: are you interested in participating with us along these lines?

A few days later we received the response: yes. A few days later than that we made it public on October 1. Because as soon as we knew for sure that we were going to go forward and consider a merger, and consider a privatization, we said we're going to tell the people that we're planning to do this. We're going to tell the public that this is what we're planning to do. We're a long way from having anything done, but we're going to tell them now so they know what's going on.

Since that time we have been really in Phase 1. Phase 1 of the process has been to just discuss merger. Can we get a merger? We are not buying Newfoundland Power from Fortis. Fortis is not buying Hydro from us. If we can work out a merger of the two companies, a true merger, and in working out that true merger, reflecting our 70 per cent ownership and their 30 per cent ownership, then we go to Phase 2, and Phase 2 will be the public share offering, and it is through the public share offering that we will get the maximum price, the maximum value. That is where we will get the bonus on the sale of shares. We are not to that stage yet and we do not know when we might get there. On October 1 we said maybe by March 31. It would be nice if it is done by March 31 because that is the end of the fiscal year and we are into Budget preparation and Budget planning, so it would be nice if it is done by March 31. There is no certainty that it will be done by March 31 but we are sort of working towards that target.

Now, I would like to come back and see some of the other comments that the hon. member made a few minutes ago. He said that we asked for advice from reputable financial institutions, RBC Dominion Securities and ScotiaMcLeod. Well, Hydro did ask for that advice on the first question and we are still using them right now. Hydro is still using them right now in the negotiation process. We are satisfied that these are the best people we can find in Canada to work with us on this issue and move on from there.

The special committee we put in place, the people to look at the `if' question, whether or not we should be looking at privatization, there are no better people anywhere in Canada that could advise us on the `if' question. There are no people with any more expertise anywhere in this country. We talked to these people, people who have been involved with the industry almost dating back to the beginning of Hydro for some of them. We have, as we said earlier, and as the hon. member said, set objectives for anything that will happen. In working out a merger we want a merger that is going to give us the most efficient industry for the people of Newfoundland and Labrador, the least redundancy. We want a merger that is going to give us the maximum return. Sure, if we are going to get a merger we have to be fair to the other side, otherwise we will never get a merger. We have to be fair there as well.

The hon. member talked about the return on equity that Newfoundland Light and Power would earn and what Hydro would earn. Well, you cannot compare a return on equity on the one hand and an interest cover on the other. They are different things. They are not the same. You cannot say 5 per cent in Hydro and 13 per cent in Light and Power. They are different things. In Hydro's case Hydro gets an interest cover approved by the Public Utilities Board. Hydro is the one with the $1 billion debt and we get an interest cover to ensure that we can pay the interest on that debt, and a little bit more, so that the market will say, yes, Hydro is a good investment.

Hydro is exempt from corporate income tax. The hon. member repeated that. Hydro is exempt, a private company would pay, but in the paying the federal government refunds to us most of what is paid and we have the choice, and we will be making that decision later, as to how much we would return to the company, if any, and how that would effect the taxpayer and the rate payer.

The hon. member talked about debt equity. In Hydro it is 83/17 - 83 per cent of the total value, the $1.25 billion is debt and only 17 per cent is equity.

AN HON. MEMBER: Of the $1.25 billion?

DR. GIBBONS: Of the $1.25 billion asset we are talking about here for privatization.

AN HON. MEMBER: (Inaudible) Fortis.

DR. GIBBONS: Newfoundland Power/Fortis, my most recent figure is that the ratio there is 57/43. In any merged company in the merger we would have to work towards a similar number, and we would work towards a similar number to make it the most viable company possible on the market to give us the maximum return and the maximum price for what we own. The new company will not be Fortis. We are not selling to them and we are not buying them. There will be a new company with a new name if a merger is agreed to.

The hon. member said we are going to guarantee the debt for twenty years. That is wrong. We are not guaranteeing any debt for twenty years. We said we would do what needs to be done until we can get it off our books through a defeasance process.

Some of the debt would be paid down immediately at the time of a sale and in about five years or so, five or six years, most of the others would be gone, but through that defeasance process, we would within, about five years, be rid of a billion dollars in debt.

He mentioned the losses on jobs. Sure, there would be some losses on jobs if there is a merger, but we would be very sensitive to the people involved. There would be an appropriate package for retirement, an appropriate package for severance and we will handle that in a sensitive way, a very sensitive way.

That covers the point that the hon. member made, but before I finish I want to address some of the other points that were made by the Opposition in the last few days, particularly, I want to go back to the October 6 statement by the Leader of the Opposition, in which he made many, many erroneous statements.

Premier Wells announced government had begun talks in August to sell the publicly owned Newfoundland and Labrador Hydro to privately owned Fortis. That is what the hon. Leader of the Opposition said on October 6. Wrong, it is totally wrong, it has never been our message, it has never been what we intended to do, it is not what we said on October 1 and it is never going to be what we are going to do.

Newfoundland Power and Hydro are not competitors was said. Well, in most ways they are not but in some places they are; there is some overlap. There is some overlap in the distribution area, there is a lot of overlap in administration and management. When you go around the Province, you will note that Newfoundland Power has most of the Eastern part of the Province and around Notre Dame Bay but you get little pockets of Hydro. Go down on the Burin Peninsula, Hydro does the Paradise River area but Light and Power does the rest. Go out to Fogo Island, Hydro does Fogo Island, but Light and Power does all the rest of Notre Dame Bay. Go out to St. Brendans, Hydro does that island but Light and Power does everything else. There are other examples where there is duplication. Light and Power does the Corner Brook area, Hydro does the Northern Peninsula and some others in that particular Western area. We believe a rationalization will result in some savings to the rate payer and some savings to the taxpayer if the two companies can be brought together.

Now, let us say: why now? The question was raised why now, and I think I have already addressed this part where the hon. member said that: The Minister of Energy, Rex Gibbons said that government had assessed the idea of privatizing Hydro shortly after the 1989 election and decided the transfer would be of no benefit. We did not assess the possibility of privatizing Hydro in 1989. The only thing that we assessed in 1989 was whether or not we should sell to Newfoundland Light and Power, to Fortis, these rural assets that were previously, primarily, part of the power distribution districts. We decided 'no' at the time, but it had nothing to do with privatization; and the same thing is related to my response last spring, in the House.

People have a right to know what has changed over that three-month period from the end of May to the end of August. There has been a big change. We had said 'no' again, to Newfoundland Light and Power on selling them a bit of Hydro, but we had asked a special committee to come in and address for us the 'if' of privatization; should we privatize or not, and it is through the advice that we received over the summer, that we decided, 'yes' we would move forward. We would move forward, we did that on August 30 and again, October 1, we told the people as soon as we knew that the other side was interested in moving forward. I want to get through some more of these things here before my final one minute runs out.

What's on the Block? Newfoundland Power has never been interested in Hydro's high cost, rural distribution districts; one of the questions in this release, What's On The Block. That is false. That is what they were interested in, that is what they proposed to us twice in the last four years. They said in this statement that the real attraction for Newfoundland Power is Hydro's assets at Bay d'Espoir; they never ever gave me a proposal saying we want to buy Bay d'Espoir, never ever.

AN HON. MEMBER: Is anything in there right?

DR. GIBBONS: I have never seen anything right yet. Churchill Falls - Churchill Falls, has never from day one, been part of this deal. The water rights in Churchill Falls and in the rest of Labrador have never been part of this deal. The water rights in the rest of the Province that are not already developed are not part of this deal. The only water rights that will be included in the deal are those that are developed and there will be an appropriate agreement in place. Right now we could look at an example of water rights.

In Labrador there is an appropriate lease in place on water rights and we get rentals and royalties on it. I do not know what the arrangement will be on the Island for the rights that are being sold but there will be an arrangement. What else is there? Will Fortis get control of power generation on the Lower Churchill? No. It is not even part of our merger discussions.

AN HON. MEMBER: (Inaudible).

DR. GIBBONS: Is government seeking the best deal? We are going to get the best deal because it is only through a public equity offering where the people who buy shares will give the maximum price.

There will be controls on the sale of shares. We are not going to say: You can buy all you want. There will be, I believe the Premier said, probably a 15 per cent limit - that is what Nova Scotia had - on how much anyone could buy. There will be a limit on how much anyone outside the Province can buy. We will be doing something for people inside the Province to encourage them to buy.

In Nova Scotia's case they went forward expecting to sell 10 per cent of the shares -

MR. SPEAKER: Order, please!

The hon. member's time is up.

The hon. the Opposition House Leader.

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

If there was another day, with a topic that was not quite as interesting, yes, we would give leave to members to go on, but there are a number of speakers who want to have a few words on this important resolution today which was introduced by the Member for Burin - Placentia West.

I have listened with great interest to both the mover of the resolution and to the minister, and I can say to the minister that it was a good try, but only that. He is reading someone else's notes, something that has been prepared for him so that they all sing the same line, but regardless of whatever way you sing the same song, it is still a bad deal for the people of this Province, I say to the minister, and he knows that; and for a minister who did not know that the advisors, the five advisors, the five wise men, as the Member for Burin - Placentia West calls them, he did not know whether or not they were a task force, whether they were a committee, or whether they were the tea party brigade. He did not know that, as the minister responsible in this Province for this deal that is now being negotiated. So I say to the minister, with all due respect, that the song you are singing today is not your song, but that of your leader.

Mr. Speaker, if there is going to be a deal, it must be a deal that is definitely in the best interest of the people of this Province, and I say to the minister and the members opposite -

SOME HON. MEMBERS: Hear, hear!

MR. W. MATTHEWS: - that the people of this Province are not buying it. The people of this Province are not buying the spin the Premier is putting on this one, and the Member for St. John's East alluded to a very important point today because the Premier is not perceived by the people of this Province as being at arm's length from this whole smelly deal, because he is a former Chairman of Newfoundland Light and Power, Mr. Chairman. He is a former Chairman. His right-hand man or his left-hand man, who is sitting there next to him, we all know his connections with Fortis. We all know that, and any way you try to cut the cake or slice the pie, the people of Newfoundland and Labrador are not buying what the Premier is trying to sell us here, because they know he is selling them out, and they suspect the reasons why he is selling them out.

I see members opposite shaking their heads, but I will say to them: There are those amongst you over there who do not support what your own government is doing. There are those amongst you.

Now the conflict of interest - this is a bad deal, period, but this whole conflict of interest flavour that is put on this has made it less palatable for the people of the Province, when you have people sitting in a direct conflict of interest at the Cabinet table, that has been admitted within the last two or three days, that are all part and parcel of this.

Besides that, the Premier did not even take the time - he said he did not think about it - to ask the five people who he wanted to advise him - really that he begged to say to me, `please privatize', because that is what he did. He did not even take the time to check to see if they were shareholders in Fortis and that they, by privatizing Newfoundland and Labrador Hydro, would benefit directly from the merger. He did not have the time. He did not think about it. Well, I don't suppose he would because he is too close to the situation himself, Mr. Speaker. That is the truth of the matter. He is too close to the situation himself.

Mr. Speaker, we have had a number of, I would say numerous, calls coming into our offices over the last -

AN HON. MEMBER: Was that one or two?

MR. W. MATTHEWS: Well, one or two, I say to the Minister of Finance, but there have been many calls. As a matter of fact, in the twelve years that I have been here I have never seen another issue that has generated so many calls. When I was a member of government and for the last - too many years, I don't want to remember, as a member of the Opposition but -

MR. BAKER: (Inaudible).

MR. W. MATTHEWS: No not even Sprung, I say to the minister, not even Sprung. It is strange what triggers in people's minds when they see something going on they don't like and they don't trust. They know it is bad for them, particularly when it is something that they own, like Newfoundland and Labrador Hydro - that is owned by the people of this Province, a profitable corporation, a very positive asset for the people of this Province, a very positive asset for the Minister of Finance and something that impacts and reflects very positively, by the way, on the bottom line of Newfoundland and Labrador, on the bottom line of this Province. I have talked to two people myself - more than that but two people who I have talked to on this issue have raised a question to me and they wondered if it is payback time, Mr. Speaker, that is what they have asked me on the telephone. We always wondered, we have been wondering since 1987, who paid the $50,000 supplement. We think we know now they said.

MR. BAKER: (Inaudible).

MR. W. MATTHEWS: I am telling you what they said on the phone, I say to the minister. I said to them: we have had our own suspicions over the years, we asked the questions over the years but we could never prove anything over the years and they said: we now know, it is payback time. That is what is happening in the minds of Newfoundlanders and Labradorians because this is a bad deal. This is a bad deal, I say to members opposite.

Mr. Speaker, the other thing that people have not liked about this, is that for so long the Minister of Mines and Energy - I think it was on three different occasions, at least two - was asked in this House about what was going on with Newfoundland and Labrador Hydro and the denials came and came, there was nothing, there was nothing, and then all of a sudden this great cloud of secrecy had covered all of this and then suddenly we found out what was up. Speaking to only one group behind closed doors.

AN HON. MEMBER: What group would that be?

MR. W. MATTHEWS: Fortis.

AN HON. MEMBER: Who else.

MR. W. MATTHEWS: Who else. There is no one else in the country I suppose - there is no one else in the country I say to the financial wizard who bankrupted the Mariners to such a point and degree that they will never get out of the hole, I say to him. The only job he ever had before he came in here was manager of the Port aux Basques Mariners and they will be in the hole for the next twenty years, I say to the financial wizard. Now that is the truth of it and that is over there trying to tell me and tell the government the way they should be going with getting rid of Newfoundland and Labrador Hydro, Mr. Speaker. You ask what is wrong with government members and members opposite?... that is it in a nutshell because the Premier says it is best, Mr. Speaker. I say to members opposite that what I have just told you is true, it is the truth. The truth always hurts members opposite. It is the truth and the member knows it himself. He knows how much the Mariners are in the hole since he was their manager, I say to him.

AN HON. MEMBER: They never got it back.

MR. W. MATTHEWS: No he could not get it back.

Now, Mr. Speaker, the last couple of days the Premier has been trying to put the spin on the story that Newfoundlanders and Labradorians were aware of this because it was covered off in the Strategic Economic Plan because it has been brought up about the mandate, they did not have a mandate. Since he brought that up I had a look at the Strategic Economic Plan, specifically under the section dealing with energy, I say to the minister, and from every indication you look at, from the strategic statement to the actions the Province will - and so on, that the Strategic Economic Plan makes no reference whatsoever to what government is attempting to do now with Newfoundland and Labrador Hydro. As a matter of fact, Mr. Speaker, the Strategic Economic Plan in the section dealing with energy and actions would give anyone who reads it the strong impression that Newfoundland and Labrador Hydro was going to remain a crown corporation and carry on with its good work. Now that is what you would glean from the Strategic Economic Plan, Mr. Speaker, nothing else. Yes, read the budget. I tell the Minister of Finance that I am frightened to death to read the budget.

AN HON. MEMBER: More tricks.

MR. W. MATTHEWS: I am frightened to death to read every budget that the minister has brought in because each year they get more and more depressing and each year his figures are more and more off base. His projections, to this Minister of Finance, are even worst than the former Minister of Finance's were. I stood in this House and I said that I figured that the former Minister of Finance will go down on record as the worst Minister of Finance ever the Province has seen. I'm very sorry to say - because he's my good friend, he's my really good friend - that he is a worse Minister of Finance, and his projections are far less accurate than the former minister.

So that puts the Premier's Strategic Economic Plan insinuation aside, Mr. Speaker. Now there's not too much else they've got left. They haven't got too much else left, have they?

MS. VERGE: The five wise men.

MR. W. MATTHEWS: Well, the five wise men. Well you see, what you have to remember is that amongst the five wise men there was at least one who was wiser than the rest. There's at least one who was wiser than the rest. Because we now know that there are two former chairmen of Hydro who are opposed to what the government is doing.

AN HON. MEMBER: Who are they, Mr. Abery and -

MR. W. MATTHEWS: You know the other one, don't you?

AN HON. MEMBER: (Inaudible).

MR. W. MATTHEWS: I see. Think for a change.

MR. ROBERTS: How can I think? I am trying to listen to the hon. gentleman.

MR. W. MATTHEWS: It's hard for you to think. I can understand. You've got so much on your mind these days I can understand you being pre-occupied, I assure you. I can understand you being pre-occupied. All I say to the Government House Leader and the Minister of Justice is, stay tuned over the next four or five days and you'll be even more pre-occupied, I assure you.

Mr. Speaker, the other thing the Premier's tried to do, of course, is he's tried to say that it was the board of directors of Hydro, it was the recommendation. Because you see he's been caught in the lie again. Because the recommendation was not to privatize Hydro. The real recommendation to government was: leave Hydro alone, it's most viable. Leave it as it is. Of course, Hydro got permission. They went to the government and they asked for permission to use government's own financial advisors, ScotiaMcLeod and RBC Dominion Securities. That's who the recommendation came from. It wasn't the board of directors of Hydro. The Premier said he couldn't accept what the directors of Hydro told him because their judgement was coloured, was the Premier's exact words. I read it at lunchtime. He said their judgement was coloured. Their judgement was coloured because they're directors of Newfoundland and Labrador Hydro. He couldn't accept that.

It wasn't the recommendation of the directors of Hydro. It was a recommendation of the government's own financial advisors, namely ScotiaMcLeod and RBC Dominion Securities. That's who made the recommendation. Because Hydro had to ask government, by the way, could they use those advisors, and government very wisely and correctly said yes. So it was government's own advisors who advised them not to privatize. That's what happened.

What did the Premier have to do? He had to find someone else who he could go out and court and said: come in and tell us to privatize. Because I have to have someone to tell me to privatize because I don't really want to tell the people that this is my pipe dream, which in essence it is.

AN HON. MEMBER: You've got it wrong.

MR. W. MATTHEWS: No, I haven't got it wrong, I say to the Minister of Forestry and Agriculture. That is the truth. That's what happened.

MS. VERGE: But he couldn't even have persuaded all of them.

MR. W. MATTHEWS: No, he couldn't. Not all of them agreed with the Premier. He said it was a majority, and that could leave two to object. We know there's one who objected, one has had a great deal of involvement with Hydro in this Province. Very much so.

Mr. Speaker, this is what's happened.

MR. SIMMS: (Inaudible) know who?

MR. W. MATTHEWS: Yes, we know who. They know we know. I said at the outset there are two former chairmen of Hydro that do not agree with the privatization of Newfoundland and Labrador Hydro. We know Mr. Abery is one. Everyone in the Province knows that. So you don't have to be too bright to know who the other one is.

MR. SIMMS: Even the Member for St. John's South should have been able to get that one.

MR. W. MATTHEWS: Well, yes, his former boss, he knows. Former boss of the Member for St. John's South, he knows.

MR. SIMMS: One of the remaining four is waffling.

MR. W. MATTHEWS: Yes, waffling. So that's what went on here. So every way the Premier has tried to turn on this issue, Mr. Speaker, because he - if you follow him over the last two to three weeks, he makes statements either at the Board of Trade, or in the House, or with the media one day, and we have it in print. He will come on the floor of this Legislature the next day and he will say he didn't say it. He has to correct misstatements. His own words that are read to him, that Hansard is recording.

MR. SIMMS: Verbal trickery.

MR. W. MATTHEWS: Every time he stands to his feet - and you know when you have the Premier, because the first thing he says is: I have to correct the misstatements, the misinformation, that is put forward by the hon. member. Everything he has been doing for the last three weeks -

MR. SIMMS: The last three years.

MR. W. MATTHEWS: But on this issue, the last three weeks.

That is what has gone on with this issue. The Premier has been caught in a bad light on this issue.

MR. SIMMS: Rex hasn't helped.

MR. W. MATTHEWS: I feel sorry for the Minister of Mines and Energy. I don't feel sorry for the Premier, but I feel sorry for the Minister of Mines and Energy, because I believe he is a very decent, honourable person, and he has not had any say in this. That is obvious.

MR. SULLIVAN: Lose his credibility.

MR. W. MATTHEWS: That is right. He is losing his credibility on the issue, and it is too bad, but that happens. That happens when you don't have the gumption to stand up and speak up for what you believe, I say to members opposite. That is what is happening to all of you over there on this issue, because it is a bad deal for Newfoundlanders and Labradorians, and every one of you, whether in your offices in St. John's or out and about your districts, are picking it up in spades. You are picking it up in spades that this is a bad deal for Newfoundland and Labrador, and the people of this Province are not going to accept it.

AN HON. MEMBER: (Inaudible) Sprung.

MR. W. MATTHEWS: Yes, they did not accept that either, I say to the Member for Fogo, and they are not going to accept this.

MR. TOBIN: It didn't matter to the Fogo district in 1989, Sprung didn't.

MR. W. MATTHEWS: No, Sprung did not make any difference in 1989 to Fogo. You went out with a flick. You didn't win your seat because of what happened to Sprung, I say to the member.

Put things in perspective. At least I am man enough to admit that the people of this Province thought that the Sprung deal was a bad deal, I say to the member, and the people of this Province think that what you are up to now, as a government, is a worse deal, and they are not going to accept it. The government knows that. The government is monitoring what is going on in the Province. They are monitoring the press, the open lines, the television. They know, and what they are at now is trying to turn it around, but it is too late. It is too late. He cannot do it.

MR. SIMMS: The Member for Pleasantville is the only man over there who might have some reservations. I understand (inaudible).

MR. W. MATTHEWS: Yes, I understand the Member for Pleasantville might have some reservations about it, too, and knowing the Member for Pleasantville, he will probably, one of these days, stand in his place and speak his mind, and he will probably vote according to the way he feels, and not the way someone else wants him to vote. That is what I say about the Member for Pleasantville; and there are others over there, too, who are not too comfortable with this.

Mr. Speaker, that is the bottom line on it. It is a bad deal. It is not going to wash with the people. The Member for St. John's East, I think, had a very valid point in Question Period today, that the Premier should remove himself from the issue. The Minister of Justice should remove himself from the issue.

MR. SULLIVAN: They should not have to remove them. They should not be there.

MR. W. MATTHEWS: I know that, but they are there and they have been there, and for this to go on for all those months, with people in a direct conflict of interest sitting at the Cabinet table, it is absolutely - you cannot describe words strong enough for it. It tells you just how rotten it all is for this to go on.

Of course we saw the admission of it two or three days ago. It was not people who were doing what they want to do with their shares. It is too late to sell the shares now. You have been in conflict of interest for months. It is too late to sell them now. It is too late to say you are sorry once you have pulled the trigger. It is too late to put them in blind trust thirty days ago and now three days ago say: I am going to get rid of them, when you have been sitting there for five or six months participating. It is too late, once you have pulled the trigger, to say: I am sorry for shooting you. That is what has gone on with this issue.

AN HON. MEMBER: You are shooting the Chairman.

MR. W. MATTHEWS: No, I am not shooting the Chairman, but that is the point, and I say to the Minister of Justice, how he can stand in his place, and sit in this House, and sit at the Cabinet table -

MR. ROBERTS: (Inaudible).

MR. W. MATTHEWS: You can squirm all you like, because you have been in a direct conflict of interest for months on this issue, and you should get out of Cabinet.

SOME HON. MEMBERS: Hear, hear!

MR. W. MATTHEWS: If there was nothing wrong with it, why did you put them in blind trust and why are you now selling your shares, I ask the minister, if there's not a conflict of interest.

SOME HON. MEMBERS: Hear, hear!


MR. W. MATTHEWS: A few days ago he told the media of this Province that he was going to stay involved in discussions on this issue. Four or five days ago. Two days ago he says: I'm now going to sell my shares.

MR. ROBERTS: (Inaudible)!

MR. W. MATTHEWS: Yes you did.

MR. SIMMS: You said Friday (inaudible), publicly!

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

MR. W. MATTHEWS: (Inaudible)!

MR. SIMMS: I'm sitting around the table, I've never traded them and I'm not going to, and all that stuff.

MR. ROBERTS: (Inaudible).

MR. SIMMS: Oh yes, squirm, squirm, squirm.

MR. W. MATTHEWS: Mr. Speaker, I will conclude by saying this. That it's a bad deal anyway for an asset so valuable -

MR. SPEAKER: Order, please!

MR. W. MATTHEWS: - owned by the people of this Province -

MR. SPEAKER: Order, please!

The hon. member's time is up.

MR. W. MATTHEWS: - but to have it shrouded with such conflict of interest, it would make you puke.

SOME HON. MEMBERS: Hear, hear!


MR. SPEAKER: Order, please!

The hon. the Member for Eagle River.

MR. DUMARESQUE: Thank you, Mr. Speaker. I'm pleased today to rise in this debate and hopefully be able to take a different approach, and indeed a different tenor than the previous speaker. Because I do believe that the people of the Province are out there looking for the real answers on this deal, and they know that the real answers are not coming from that side of the House. They know that.

I want to talk about the role of government generally, and obviously to talk about the role of this government in this particular deal.

We were elected not once, with a majority government, but only a few short months ago again with a resounding majority government, because the people had faith in us to do what was right for them. They put their programme forward. They said: we are willing to do the best for you. They were turned down, thumbs down. The people of this Province said: no, we do not want the people who were there for the last seventeen years to do what they did to this Province. The people of the Province said they want to put a government in place that will challenge the status quo. They want to put a government in place that will have the political courage to do what's right for the people of this Province.

You would have us to believe today, if you were listening on your radio most of the last couple of days, Mr. Speaker, that privatization is a new word in the English dictionary. You would have us believe that it's never been talked about before. You would have us believe that it's certainly never entered the minds of anybody opposite before. I must say that I think that it was talked about before. As a matter of fact, back in 1986, March 24, I notice one hon. member who came before the people of this Province and said: I'm pleased to say that this action - on a move to privatize NORDCO Limited - he said, I'm pleased to say that this action is part of government's ongoing efforts to privatize government-owned companies wherever possible and feasible.

That wasn't the hon. Minister of Finance here today. That wasn't the hon. Minister of Energy here today. That was the hon. Mr. Barrett of the previous Tory government. Then again, in 1988, a member of the Crown, then the Minister of Finance, comes before the cameras and says: we are going to do what we have to do within government's policy of privatizing Crown corporations and see that they are being constantly reviewed. That was the Member for Mount Pearl, the Minister of Finance. That was nothing new. Neither is there anything new today.

We are exercising our responsibility as a government to do what is right to see that the people's money is spent wisely. We are willing to have nobody to account to but the people for that. We have nothing to learn from the members opposite, nothing at all. Here we have again in 1987 - a secret PC Cabinet report advised privatization of government services -


MR. DUMARESQUE: - advised, these are the people who were working for the government of the day, the Senior Expenditure Review Committee, the people who were the deputy ministers in that government, but they had to admit at the end of the day, after pointing out that the government had experienced windfall revenues from an improving provincial economy and increased federal tax payments as well as declining interest rates and improved exchange rates, the committee said the Province had failed to hold the line on expenditures and that is the situation we are in today.

They bankrupted this Province, they borrowed the mortgages of the people of this Province and told them that you are going to have to pay forever and it took somebody with courage and conviction to come back into this government to say: we are going to bring back the government of the day from the depths, as far as the spending is concerned, we are going to rein it back to where we know the people of tomorrow, my children and the other children of our families out there, will have confidence that there will not be a day when the knock comes on the door from the banker saying: sorry, the time is up, you have overspent, you have overdone your limits and now you have to pay. That is not what is going to happen as long as this administration is in power and you will never see a secret document from this executive saying that we have failed to exercise the political courage that we were given the responsibility to do by the electorate and did what was in the best interest of the people.

I want to touch on some of the aspects that the hon. the Leader of the Opposition touched on in his press statement awhile back, and I want to talk about what the Premier has said on this issue. Mr. Speaker, we have said clearly at the outset that what we are doing is reviewing the operation of this corporation as we are many others, to see if we cannot make an effective and more efficient use of the dollars that we are putting into these, either as rate payers through the tax system, or as government directly, and nobody has ever said that Hydro was not part of that review, nobody has ever said that we would never ever have a look at Hydro or any other corporation of government.

As a matter of fact, Mr. Speaker, we have certainly taken on the responsibility and exercised it to the point where we are now asking for the merits of that proposal to be looked at, that is all we are doing, and the Premier stood up in this House and he stood up in the Board of Trade and said that if this deal is not the best deal for the people of this Province, it will not be done, and that is our responsibility. The taxpayers of this Province would expect no less when we have an opportunity to try and recover some revenue so that we can have the kind of health care system that we want in this Province, the best in the country, so that we can have the education system in this Province, the best in the country. We want to be able to have that flexibility, therefore we want to be able to get control of any revenues that may be out there that we could use for those things that I mentioned.

Now I know that many people out in the public, many people in my riding have expressed concern about what would happen if Hydro was just given over to Fortis and allowed then to go on its merry way and if it had a million dollars of expenses, it would go and charge the taxpayers and the consumers of the Province a million dollars to recover. Obviously, in a diesel generated area like on the coast of Labrador, many people would say, well, that would not be fair. Surely then they would be making us pay another 30, 40, 50 per cent in their rates and that fear - there is nothing wrong with people asking those questions but it is because of the statements coming from members opposite, that they are asking those questions, but there is absolutely nothing wrong with them asking the questions but what I have said to them and when I have said it to them, the people shook their heads in disbelief that they were getting such misleading statements from members opposite, because they know that this government is there to protect their interests as we did just a year or so ago when we told the Public Utilities Board that there would no 10 per cent increase in Hydro rates. The first time in history that was ever done and it was done by this government, a Liberal government. It was never done over there, I can submit to the people of this Province. That was the kind of direction that we gave to the people, that was the signal that we have sent to them and the Premier has already outlined that the Public Utilities Board will be there, it will still be there to take the evidence.

It will still be there to protect the consumer. We know that it has worked. We know that it has worked with the telephone company. We know that the rates have been kept in line even though they are out there with a private monopoly in that particular area. We know that these rates have been reasonable, and we know that the rates will be reasonable when it comes to having a new company offering the electrical services to this Province. We also know that we have an obligation to reduce the debt of this Province. We also know that it is imperative that we get a handle on the debt of this Province.

We have a situation today in many rural communities in this Province where we are trying to get the education system in shape and up to the standard of the rest of the Province, and indeed to the rest of the country, but we know that it does not happen without money. We know what has happened to other provinces. The great Ontario government have recently had their credit rating reduced. The very powerful government of Quebec have had their credit rating reduced. We have seen others who have had their credit ratings reduced and we must uphold the right of every citizen in this Province to know that we are out there trying to do our best and to make sure that the money we are borrowing we are going to borrow at a rate that is reasonable and in the public interest.

We have to do that, and for people to try and give the impression that this will not benefit the credit rating policy of the Moody's of the world, or the Standard and Poor's, that is absolutely wrong. Surely, one does not need to have a PhD in economics, or anything else, to know that if you go to a credit agency with $6 billion on your books as owing to somebody, and you go to them with $4.8 billion on your books as owing to somebody, that they are going to take a different view of your credit situation, your financial situation, and therefore be able to make a decision obviously in your favour if there are less debts on the books, Mr. Speaker. It is imperative that we put this as a major priority. We have been leaders in this Province and leaders in this country in this respect. We were the first government who went to the people with the truth. We were the first government, and this Premier was the first statesman in this country to stand up and say: if you elect us we will do whatever has to be done to bring the finances of this Province back in order so that we can protect the future of your children and the system of education and health that we are so proud of in this Province. It was us.

The people opposite said: do not worry about the deficit. The NDP, of course, went on their total socialist vent and said there was no need to worry about the deficit. Bob Rae just did it up there and he is not having any trouble - do not worry. Mr. Simms is saying the same thing. He went to the people and said: Not to worry. We can borrow our way out of this. Well, the people listened and the people considered the views of the NDP and the socialists. The people considered the views of the Conservatives, but when it came down to election day, when people had to decide who they were going to put their trust in they turned to the party, they turned to the leader, they turned to the administration that had done them good for the last four years, and gave them good government, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. DUMARESQUE: I would say to the people of this Province, if you believe we are going to take the trust that you have given us only five short months ago and betray that so flagrantly in this particular situation then obviously there is no good for us to talk to you. For the people of Eagle River to come to me tomorrow and say to me that you are going to do this to me because you fundamentally believe that somebody should be help out financially, that will never happen, Mr. Speaker. That will never happen because the people know they have given us their vote of confidence. They know that we have a record that we can stand proudly on and show the people of this Province, and indeed the people of the country, that we have made the best possible effort with the financial ability that we have to do the things that are in the best interest of them.

So, Mr. Speaker, I say to the people of this Province and to the people opposite, that we are in trying financial times. We are in a situation where health, education and government services are being pinched to the limit because all economies of this country have been reduced, the international economy has been the same and, Mr. Speaker, all governments are using their heads to try and do what they can. But the people must know that while we are confronted with the financial challenges we are not going to be the dinosaurs of yesterday, put our heads in the sand and ignore the problem, we are going to deal with it as they have entrusted us to do, Mr. Speaker. When they want the dinosaurs back I am sure that they will ask for them, Mr. Speaker, but it was only a few short days ago that they wrote the book on the Conservative Party, it was only a few short days ago. I know that the Leader of the Opposition would like to have a new button that he can pat on his chest, I know that the pink and yellow button was not very good for the last few months. So he needs a new button, Mr. Speaker, and that is what it is coming down to. The Leader of the Opposition is trying to save his political neck, he is looking for a new button and that is the only issue here today. He is looking for a political issue, Mr. Speaker, so he can stay alive!

SOME HON. MEMBERS: Hear, hear!

MR. DUMARESQUE: That is right. He knows that the demise of the Tory Party is but another election away and he needs that issue as much as he needs anything else in this world. He knows that the Cy Abery's of the world are out there looking down their nose at the job in the chair, Mr. Speaker, he knows his time is due. In five or six months he will be gone. He needs now to have the rallying cry. He does not care about the emotions of the people, he does not care about the welfare of the people, Mr. Speaker, he is concerned about his own political skin and that of his Tory cronies sitting next to him, and let that not be lost on the people of this Province. This is nothing more than a political sham, Mr. Speaker. The people of this Province know where we are, they know what we have been giving, Mr. Speaker, and they know that in the future they are going to be able to look again with pride at our record and be able to say: they did the same thing, the did the right thing, they did the best thing for the people of this Province, and we are going to give them a resounding vote of confidence again at the next possible opportunity, Mr. Speaker.

Thank you very much for you time, Mr. Speaker, and I look forward to the rest of the debate.

SOME HON. MEMBERS: Hear, hear!

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

MR. SIMMS: Thank you, Mr. Speaker.

As always the Member for Eagle River gives an excellent performance but he does not usually say very much of a substantive nature. Having said that, I commend him on his performance. It was one of the better ones.

Mr. Speaker, that is the second most significant contribution today from the government side in the debate in this - what has now become known as `Clyderow' as opposed to -


MR. SIMMS: What has become really interesting, Mr. Speaker, is that I see from members opposite, from their interruptions and their gibes across the floor, it brings back memories, honest to God, it brings back memories to me from the days when I was sitting in the dying days of a government which had become so convinced in its own mind that nothing they could do would turn off the public and turn off the voters. That is how we felt. We got cocky and we started shouting across the floor: you are in demise, you are going to lose, you are not going to have two seats left the next time. We laughed it off just like they are doing over there now.

AN HON. MEMBER: (Inaudible).

MR. SIMMS: That is right, the Minister of Transportation knows, he was there. I will tell you one thing, if he was over here he would be doing what we are doing only ten times as aggressively probably. So, Mr. Speaker, that is one thing that I say to members opposite, don't get too caught up.

Now, Mr. Speaker, one thing that I did not like here today in all seriousness, was two or three references - I know the Premier made a reference, and I'm not sure, but some other member made a reference about callers to Bas' Open Line and that kind of stuff.

In my view, that kind of commentary is degrading to the people who do call into those open line programs. I really think that members opposite should really think seriously about making public statements, because I can assure you, there are a lot of people who call in that give a lot of thought to it. They don't understand the issues, they don't understand the details, but they represent the ordinary person in this Province.

As a matter of fact, Mr. Speaker, I even heard the Member for St. John's South call in on Bas' show last night myself.

MR. W. MATTHEWS: What? He didn't!

MR. SIMMS: Yes. The midnight caller. He called. I'd say that Clyde was home on the phone and he heard somebody saying something bad, and he phoned Tom up, as his assistant, and said: Tom, call Bas immediately and respond to this. Lo and behold, my wife said: Len, Len! Listen to this! She turned up the radio and here he was.

MS. VERGE: Oh, Tom!

MR. SIMMS: Basil, how are you Basil? How are you, Basil? Right. This is the old chest-thumper, Basil. Those were his very words. I remember them so well. This is the old chest-thumper, Basil. I can see him now down in the telephone booth on Water Street somewhere. Ah, Basil, Basil, Basil. You've got to stop listening to what the Opposition is saying, what those dirty Opposition, nasty Opposition, people are saying. You've got to stop reading from their press statements and things. It's shocking, Basil, that you're giving the other side of this story. You shouldn't be doing it, Basil!

I can hear him now, see him by the phone. Then he said: now, Basil, you have to put it in perspective, Basil. This is all about negotiations. We're only negotiating. Sure there's nothing going on here, Basil. We're negotiating. That's all this is all about. That is the latest spin. That's today's spin from the government on what is going on on this issue. That is the latest spin, right?

On November 17, when the Premier spoke to the Board of Trade, he was out there, by God, gung-ho. He had all of the media in the Province - you know, he had captured all of their attention. They all came to the hotel to listen to him make his speech. He didn't like the coverage he got. They did a little clip, a little interview with him afterwards. They didn't carry the story well enough so he got upset. But he did go out and try to tell the story, and he told us what the government is trying to do, or he tried to tell us and tried to explain. So that was November 17.

Well, they weren't getting enough coverage. We were getting all the coverage on this issue. By golly, is he ever getting steamed now about that. He even has people up in his office, up in the Premier's office on the eighth floor now, calling around the Province. They've got an idea where I'm going, because I have some public speaking engagements arranged in different places around the Province. The Premier's office staff, those little people who you see sitting up in the back rows of the House of Assembly every day looking down at us, taking notes carefully to tell the Premier afterwards: that fellow over there stared at you, or licked out his tongue at you, Premier, or something, shocking, shocking, Premier.

Anyway, I understand from my friend, the Member for Waterford - Kenmount, they called up the Mount Pearl Chamber of Commerce. I have a speaking engagement, December 8 at the Mount Pearl Chamber of Commerce. Lunch and speaking engagement. Somebody in the Premier's office phones the Mount Pearl Chamber of Commerce, having found this out, and said - I can hardly stop laughing - and said: I wonder, could you cancel Mr. Simms' speaking engagement at lunch, and re-arrange all your plans for an evening function where I can be there too? So that we can both have a speech.

Can you believe it? That's a sure sign of what's going on.


MR. SIMMS: Probably - no, quite accurate. I assure the Minister of Finance, it is very accurate.

Anyway, I don't buy the latest spin that `This is just negotiating. We are not really doing anything. We are only talking, and thinking, and looking', and all that stuff.

MR. MURPHY: Why don't you buy it?

MR. SIMMS: The reason I don't, I say to the Member for St. John's South - who is not in his seat and shouldn't be shouting across the floor of the House, as he knows - read the Premier's speech, because the Premier's speech, on page 4, makes it abundantly clear that there is a lot more going on here than simply negotiating, or `we are looking at this; we are talking about it.' So you are going to have to switch that spin. Tomorrow it will have to be a new spin.

He makes the point clearly: `I also advised the Fortis/Newfoundland Power representatives, that if satisfactory progress towards a merger that would achieve government's stated objectives could not be accomplished in a reasonable period of time, then we would proceed to privatize Hydro on a stand-alone basis.' Obviously, they have made the decision they are going to privatize Hydro - it is only a question of whether they do it through a merger or on a stand-alone basis. There is a heck of a lot more going on here than simply negotiating, or looking, or talking about this, so let's get off that kick, come up with a new spin tomorrow, or on Bas' show tonight, and we will see how you explain it away tonight.

Mr. Speaker, we only have twenty minutes, unfortunately, but there are several things I want to touch on. One thing I want to touch on at the beginning is an area of frustration, and I say it in all sincerity to members opposite. I know some of them over there feel uncomfortable about what was happening last spring in this Legislature when we were asking questions about what was going on. Was there discussion going on about the privatization of Hydro? Was it an issue with the government? Were they giving it any thought? I mean, we asked all kinds of questions.

Members opposite have told me that they felt uncomfortable with the answers back in those days in late May. Members of the press gallery have certainly indicated, when they were listening, they knew something was going on because the minister, in particular, and the Premier, were not coming clean; and back in March I think the Member for St. John's East asked a question in the Legislature about whether or not Hydro was a current issue for this particular government, and the minister denied that it was.

Then, during the election there were a lot of rumours that surfaced concerning whether government was considering Hydro at this point in time - was it a current issue - and the rumours were denied. "Nothing to them. No substance." That is all we ever used to hear.

In this House of Assembly in late May - May 26, May 28, May 31 - in the Legislature, queries were made. Questions were asked of the Premier. Questions were asked of the Minister of Mines and Energy. I believe we even asked a question of the Minister of Finance, which was a total waste of time, of course; but the ministers, and the Premier of the day, during that time, dismissed our questions about Hydro - dismissed them totally. Hydro was not a current issue with this government.

Mr. Speaker, we were misled on those three occasions. Then, we were misled again in the Premier's speech because, if you read through the Premier's speech, there are all kinds of holes in it. You can run a truck through most of the statements that he made in that speech to the Board of Trade, but we were told, finally, by the Premier that, in fact, they were pursuing this issue of Hydro privatization ever since the minister's financial statement of December 4. The Premier said that, but he didn't say it until November 17. We were misled, and if you read the Premier's speech you will see all of his statement riddled with words like: Well, we should be able to do this; Newfoundlanders will be encouraged to invest; I believe the answer is `no' to a particular question; rates `should' average; privatization `should' result in lower increases; striving to keep our increases at a minimum; premature to speculate; privatization is not being done behind closed doors -statements like that, which again were misleading to all of us, Mr. Speaker, in this House. Then, lo and behold, in this House over the last two or three days, in particular, since it re-opened, we continue to be misled.

On Monday, the Minister of Energy stood in this House and said, not only on one occasion but on two occasions, that they had appointed a task force, a task force was the way he referred to it - to look into this issue, and to give us some advice. That was Monday. There was no denial of the use of the words "task force" on Monday. Right?

Then, on Tuesday, the Premier stands up and tells us in the House: `No, no, no, no, it wasn't a task force at all, it was a group of five people who sort of got together at my invitation.' The five wise men - it wasn't a group. Then the minister started calling it a committee. `No, no, no, it isn't a committee, `Rex'. It isn't a task force, `Rex'. It was a group of five people that the Premier had spoken to and invited in for a cup of tea. It was a tea party. I almost said a pee party, Mr. Speaker. It was a tea party.

Is it any wonder that the people of this Province are upset because of the misleading statements of the minister and the Premier? So this group, we hear, then, was really the main reason the Premier decided to take the step towards privatization. Oh, this five group, that was the key thing. That is the impression he leaves.


MR. SIMMS: Well, if you want to accuse the Premier of leaving a false impression, go ahead and do it. Far be it from us to do it.

AN HON. MEMBER: False (inaudible).

AN HON. MEMBER: You're saying it!

MR. SIMMS: This was a group, Mr. Speaker, that was never officially appointed, no terms of reference, never met with any experts that we know of, never ever met with the Province's financial advisors. Nobody knows they even existed.

MS. VERGE: Where is the report?

MR. SIMMS: We don't know yet. I asked the question on Monday: Do any of these five people have shares in Fortis?

MR. BAKER: Probably.

MR. SIMMS: Probably. The Minister of Finance says "probably." I wonder does he know. I wonder does the minister know. The minister says "probably" - if they did, well, then, clearly there is another conflict of interest there.

Speaking of a conflict of interest, Mr. Speaker, if I may, on a serious note: the Premier went out to the scrum on Monday and said, in front of the television cameras, for all the people in the Province to see, that the Opposition somehow had been nasty in trying to point out that the Minister of Justice and, indeed, the spouse of the Minister of Industry, Trade and Technology, had to sell their shares. He somehow tried to lay a guilt trip on the Opposition.

MR. W. MATTHEWS: Our fault.

MR. SIMMS: That was our fault, says the Premier, and it was terrible, terrible, terrible!

MR. BAKER: It's all your fault!

MR. SIMMS: Mr. Speaker, I tell you, I won't accept that, not for one second, not from that individual who sits over there in the Premier's chair, I can guarantee you that.

I do want to say, with the deepest of respect to the Minister of Industry, Trade and Technology, please go home to your spouse and tell her, there was absolutely no intention to embarrass her, or anything of that nature - that was not our intention. As a matter of fact, the minister may recall - I know others will - when that legislation was debated, there were members on this side who stood and raised serious questions about whether spouses should be involved and included. We expressed those concerns at that point in time and we still have reservations about it, whether it should be.

I say to the minister, please go home and tell your spouse that it is the legislation that you, yourself, as a minister, supported, presumably in Cabinet, and brought into this House, and the Premier introduced - legislation which says, as he knows, section 21, page 6 of the legislation: "A member shall not make or participate in making a decision in his or her capacity as a member where the member knows or ought reasonably to know that in the making of that decision there is the opportunity to further, directly or indirectly, a private interest of the member or the member's family." So it is right there in the legislation and all we simply did was raise the matter.

MR. TOBIN: But `Clyde' said (inaudible).

MR. SIMMS: Well, that is what I said at the beginning, so I say that to the minister in all sincerity because we do have some concerns about it.

Mr. Speaker, in addition to all of that, is it any wonder why the people of this Province are suspicious? The time is running by so I just want to say to members opposite, lest they feel that this is simply a political thing we are doing, I want to assure them it is not. We didn't take our position on -

AN HON. MEMBER: (Inaudible).

MR. SIMMS: I will tell him why. I know members opposite would suspect it but I want to tell him.

You will recall maybe, that five days after the Premier announced on October 1, what the government was doing, we held a press conference and we raised a number of issues and a number of questions, rhetorically, of course, in the public eye, and rightly so. Questions, questions, Mr. Speaker. It was a month later, four weeks later, after we had done considerable research ourselves and were able to convince ourselves what our position was, that we then came out on November 8 and opposed the planned privatization of Newfoundland Hydro. So we didn't do it immediately, we didn't do it right off the bat, as some people over there like to suggest; we took our time, researched the issue and we said, Mr. Speaker, we would even consider accepting or approving such a deal, if a few questions were answered positively, in the affirmative, and I will state the questions for you because there are only a couple of minutes left.

AN HON. MEMBER: (Inaudible).

MR. SIMMS: No, I have five minutes or thereabouts, four minutes or whatever it is.

No. 1. Will this proposed deal result in cheaper electricity rates for the people of our Province?

No. 2. Will it create more jobs for the people of our Province?

No. 3. Will it bring new investment to the Province?

No. 4. Will it bring new job opportunities and opportunities for economic growth to the Province?

No. 5. Will Newfoundlanders have ownership of the company? Absolutely not.

No. 6. Will we make a fair profit? Remember the word now, profit, not just the $230 to $300 million the Premier flicks out in his interview on Sunday coming up - a profit, a sizable profit, will we get one? There is no indication that is going to be there.

No. 7. Will we get a fair return for the water rights on the Island portion of the Province that are being given away in this deal?

AN HON. MEMBER: We are not giving away anything.

MR. SIMMS: Oh, you are giving away water rights, you can deny it all you want but all the water rights associated with all the generating plants that my friend from Burin - Placentia West mentioned earlier in his comments, will all be gone. They are all going to be given away, so don't deny it. It is as the other members have been trying to say.

Mr. Speaker, are we going to get absolutely the best possible deal, by putting this out and letting people bid on it, people other than foreigners? No, we are not doing that, Mr. Speaker. The most important question of all: Will we be absolutely better off as a people in the long run? And to all of those eight or nine questions, I have to say, Mr. Speaker, we were not satisfied that the answers would be yes, yes, yes, yes, yes. We were not satisfied in our gut, we were not satisfied in our heart and we certainly aren't satisfied in our minds about this whole proposed deal.

Now, the government had an obligation and a responsibility to explain this deal to the people. They are now blaming us or the media for not getting the story out - well, that is their own fault. They had the opportunity, they said they weren't going to do it and now we see them scrambling trying to get on, whatever way they can, at dinner meetings or speaking engagements, it is all coming out now, they are scrambling, grasping, doing everything in the name of God that they can do to try to somehow overcome the negative publicity they are getting on this.

Mr. Speaker, I want to conclude with one final comment. Some reference has been made in the past to the Upper Churchill deal, some reference has been made to the Sprung deal, and my only answer to those references is this: surely, we have made mistakes enough in the past to be able to have learned from those mistakes, to allow us to make sure we don't make the same mistake again. My real fear, Mr. Speaker, is that the reality is, we are on the verge of making just as significant a mistake with the privatization of Newfoundland Hydro as we did in those other instances I mentioned. I say this looking in the eyes of the Minister of Finance, and I said it to him as sincerely as I possibly can here today. I truly believe that in my heart. That is the reason I am opposing the deal and fighting against it, because I honestly believe it is not in the best interest of the people of this Province.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Burin - Placentia West.

MR. TOBIN: There was certainly not a whole lot said by the Minister of Energy and nothing said by the Member for Eagle River regarding the resolution that I put before the House today.

AN HON. MEMBER: (Inaudible).

MR. TOBIN: I suggest you check with George.

Mr. Speaker, the Minister of Energy got up and said that government has done everything they should do as it relates to Hydro. Now, is the time for the private sector to get involved. Let me say to the Minister of Energy that the Private Sector will have more difficulty getting involved and stimulating the economy because of the fact that Fortis is going to be taking over this operation and the cost of electricity is going to be so high that no one will be able to invest in the private sector. That is what is going to happen, I say to the member opposite. Now, he talks about the merger, Mr. Speaker. I say that merger means nothing, what they are saying is not true, and everything will be the same. Right now, there is in Hydro a publicly-owned company and when this is sold, merged, or whatever you want to call it, it will not be a publicly-owned company. Right now, it is a publicly-owned company and a privately-owned company and when they are merged they will not be a publicly/privately-owned company, they will be private companies. And for anyone to stand in this House and say that they are not telling the truth. They are not telling the truth, I say to the Minister of Energy. He didn't say much else, Mr. Speaker, except that he admitted again he wasn't sure whether it was a task force, a tea party, or a committee. I saw him the other day after he said it down on his knees, before the Premier with a book, saying, yes, Premier, I said it.

Now, the Member for Eagle River got up and he put me in mind of the crowd who drank the Kool Aid.


MR. TOBIN: The Member for Humber Valley said to me when the Member for Eagle River got up, `There is one of the fellows who drank the Kool Aid.'

AN HON. MEMBER: All the way from Jonestown.

MR. TOBIN: Mr. Speaker, he talked about majority governments. There have been majority governments in this Province before, I say to the member, when the Opposition didn't have these many people on the other side.

I heard the Member for Eagle River get up and talk about Coastal Labrador. He talked about the generation stations in Coastal Labrador. I wonder what he told the people in Coastal Labrador as it relates to government removing the $30 million subsidies to the PDD in 1989? What did the Member for Eagle River say about that to the people of Labrador, the $30 million subsidy that was taken away? And then, Mr. Speaker, he said: `I went down to Labrador -

MR. SPEAKER: Order, please!

I have recognized the hon. the Member for Burin - Placentia West.

MR. TOBIN: - and when the people heard what I had to say, they believed the story that what the Opposition was saying is not true.' The example he used - let's look at the telephone company that has a monopoly. Now, I say to the member opposite that the telephone company does not have a monopoly. NewTel, Newfoundland Tel or whatever it is - we will probably hear more about NewTel and all that stuff in due course. But they do not have a monopoly, Mr. Speaker, there is competition in that business. So if he went down again, he is being dishonest with his constituents. He did not tell them the truth.

AN HON. MEMBER: (Inaudible).

MR. TOBIN: Mr. Speaker, I don't know how much anyone received and I don't care how much anyone received but I can tell you that when Terra Nova Tel was sold, the rate of return on the book value will be far greater then what it is going to be here on this deal with Fortis.

MR. WOODFORD: Nine bids, it went to tender.

MR. TOBIN: Yes, and one other thing, let me say to the Member for Fogo, that when Terra Nova Tel was being sold by the Government of Canada, it went to public tender and there were nine bids, Mr. Speaker, not a sweetheart deal done with a few buddies.

MR. SIMMS: He made a big profit, too, besides.

MR. TOBIN: Yes, he made a big profit, that is what I said. It wasn't a sweetheart deal, Mr. Speaker, done with a few of the Premier's friends who are shareholders of Fortis. When the Leader of the Opposition was up speaking, he made reference to the Member for St. John's South, calling him the `Basil'. It reminded me of one evening when I was driving and the 5:30 VOCM News was coming on. I was listening to the news. I was down in Marystown; we pick up the VOCM network, and the first thing they cut in before the VOCM News, where they got this `Believe in Newfoundland and Labrador' bit, I heard -

AN HON. MEMBER: Oh, yes.

MR. TOBIN: - `Hi, this is the hon. Member for St. John's South, Tom Murphy.' Well, I said, it is a good thing someone got - he had to call himself honourable, Mr. Speaker, because no one else would. That is a fact - this was the hon. Tom Murphy, the Member for St. John's South. Well, I said, that's it!

Now, Mr. Speaker, I want to deal with some of the things that the Premier has been saying over the past little while. One of the things the Premier said was that the only way to eliminate duplication is to create one electrical utility in the Province by merging Hydro with Newfoundland Power.

Mr. Speaker, let me say to the Premier, that it will be neither Fortis nor Hydro, as he says, but a combination of the two, is deceptive. That is not the truth. There will be no combination of private and Crown ownership in the new company - none whatsoever. Government intends to sell its ownership of Hydro to the private investments through public offering, and for the Premier to say that, he is plainly just not telling the truth, which is not out of character, let me say.

Mr. Speaker, once that happens it will not be the public/private situation which we have today, it will be a company that is 100 per cent privately owned. That is what it will be, I say to the Minister of Mines and Energy, who is saying something different.

AN HON. MEMBER: (Inaudible).

MR. W. MATTHEWS: Tell him the last thing he tabled was the questions.

MR. TOBIN: Yes, Mr. Speaker, the Member for Grand Bank said to remind the Member for Fogo that the last thing he tabled was the questions, not the answers. That is what tabling of notes the member had.

Mr. Speaker, the Premier talks about a lot of situations here. One of the things he gets up and says is that the opportunity will be there for thousands of Newfoundlanders to go out and buy equity, to buy shares. The Minister of Mines and Energy says the same thing, to buy shares in the new merged company. Is that opportunity not there now, through Fortis, I ask the Minister of Mines and Energy? If Newfoundlanders want to buy shares in a utility company, can they not now do it through Fortis, through NewTel? Can they not do that, Mr. Speaker?

Let me ask the Minister of Mines and Energy, in all sincerity, does he really believe that the fisherpersons throughout this Province, that the men and women on the Burin Peninsula, in Marystown, who were told a few days ago that their plant is going to be closed for 1995, are going to sit down and prepare their budget - and one of the things that these 1,000 or 1,200 people are going to do when they get their unemployment cheque is try to see if they can go out and buy shares? Does the minister really believe that, Mr. Speaker? What they will be concerned about is being able to pay their light bills because of the arrogance being displayed by this Premier in roughshodding and putting the hobnailed boots to the people of this Province by supporting a few of his buddies, by privatizing Newfoundland and Labrador Hydro, that is what is going to happen.

Now, Mr. Speaker, does anyone really believe that Newfoundlanders are going to buy the shares? I think it was Steve Neary, the former Leader of the Liberal Party - because of the actions or inactions of this government many Newfoundlanders are not in a position to buy shares I say to the members opposite. Talk to the 300 people in the Marystown Shipyard who have not worked down there for the last three years - they will be back after Christmas - talk to them.

SOME HON. MEMBERS: (Inaudible)

MR. TOBIN: There may be enough in Port de Grave. My buddy on my right is not being laid off come December 31. Mr. Speaker, the people who are being laid off in my district are not concerned about buying shares but are concerned about their light bills that they have to pay. The Minister of Social Services, I wonder how much pressure will be put on the social workers in this Province by people who are on fixed incomes, who will not be able to pay their light bills because of this government, because of the increases of this government?

AN HON. MEMBER: (Inaudible).

MR. TOBIN: Oh, that is a fact. The minister knows already I am sure, the pressure that has been applied, but for the Minister of Mines and Energy, to stand up in this House, and the Premier, and talk about Newfoundlanders buying shares and owning a new merged company is, Mr. Speaker, dishonest, dishonest.

SOME HON. MEMBERS: (Inaudible).

MR. TOBIN: Yes. People who own estates in Florida may be able to buy shares; people who own estates down south and are able to buy condominiums may be able to buy shares I would say, but not every Newfoundlander has condominiums in Florida, I say to members opposite who can afford to buy shares in this investment. I would say that this is not a good deal and every member opposite knows that it is not a good deal. How are they able to go out -

AN HON. MEMBER: (Inaudible).

MR. TOBIN: Nothing, Mr. Speaker, nothing; and not too many people opposite, Mr. Speaker, will be able to look at their constituents. I say to the Member for Port au Port when he goes up to his district on the Port au Port Peninsula and people's light bills have escalated because of the sale of this over the next couple of years he will not be able to look at his constituents and say that I stood, if he does not have the courage in the next couple of minutes to stand and vote on this. What the members opposite are doing right now is going to be part of what Steve Neary said the other night, as passing over Hydro to the fat cats.

AN HON. MEMBER: To what?

MR. TOBIN: To the fat cats. That is what is going to happen.

Mr. Speaker, many members opposite served with Steve Neary, including the Minister of Justice from time to time. That is what Steve Neary said, a former Liberal leader in this Province. He was not a Conservative. He was not NDP. He was a former Liberal leader in this Province and he went to a public meeting and said what the government is doing is wrong. He said what this government is doing is going to put Hydro in the control of the fat cats in this Province.

AN HON. MEMBER: (Inaudible)

MR. TOBIN: Outside and inside. Mr. Speaker, Steve Neary was never my hero but he was yours. He was yours. When the Conservative Party kicked you out Steve Neary became your hero rather quickly, I say to the Minister of Health. When the Conservative Party gave you the boot Steve Neary became your hero quickly.

This is a bad piece of legislation. If this proposed merger was so good, I say to members opposite and ministers, why would not the financial institutions that you hired to give advice, why would they not say to the Minister of Energy that this is a good deal and we will privatize it quick? Why did they not say that? Why is the government intentionally holding back the recommendations? Because they did not recommend it. That is why. They did not recommend it and the government is hiding. Then the Premier up their bawling and yelling in front of the cameras about Meech Lake being done behind closed doors. There has never been anything so disastrous done to this Province behind closed doors as the deal that he is cooking up now with some of his buddies who are shareholders of Fortis.

That is what is going on in this Province, Mr. Speaker. It is a cooked deal, done to please friends of the Premier, and don't ever lose sight of that. It is not done for the benefit of Newfoundlanders. It is done for the shareholders of Fortis. That is who this deal is being done for - (inaudible). That is what is happening. It is not being done for many of the members opposite, either, who have no shares, I say, or for many Newfoundlanders who have no shares. It is being done mostly for investment outside of this Province. That is what is happening, and the Member for Grand Bank, our House Leader, raised some very valuable concerns, very, very important issues, Mr. Speaker, when he spoke on this issue.

MR. MURPHY: Who owns the bonds, I ask the member? Who owns the bonds (inaudible)? Newfoundlanders?

MR. TOBIN: Well I can tell you one thing; I would say to the Member for St. John's South that the holders of the bonds are probably the same people who are holders of the bonds for Fortis Trust, but I also say to him that the shareholders are the people of this Province. The shareholders are the people of this Province, I say to the member opposite. And the Member for St. John's South, talk about bonds, who owns the shares of Hydro? The taxpayers of this Province own Hydro, and it is not the taxpayers of this Province, or the people of this Province who own Fortis. So if you are talking about bonds, you have to talk about shares as well.

SOME HON. MEMBERS: Hear, hear!

MR. TOBIN: Mr. Speaker, this is a bad deal, cooked by the Premier for some of his friends in Hydro.

I know that it is now time to conclude, Mr. Speaker, but in conclusion I would ask all members opposite to give serious consideration to the issue that is on the floor today. You have to make a decision between the Premier looking after the shareholders of Fortis, or your constituents. That is the decision you have to make.

SOME HON. MEMBERS: Hear, hear!

MR. TOBIN: You will be called upon in a minute to vote. You will be asked by the Chair, in a minute, to vote, and when you stand to vote you have to vote on one issue - that is whether or not you want the shareholders of Fortis to be able to pick up for a song Newfoundland Hydro and its assets, worth over $2 billion, or whether you want to support your taxpayers, the consumers of electricity. Your constituents consume electricity in this Province. They will pay the bill. The price will be on their shoulders.

So do you support them or do you support the Premier and his buddies? That is the question and, Mr. Speaker, I would ask you to put it to the House.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: I will put the question on the motion. All those in favour of Motion 1: resolved that the Government retain Newfoundland and Labrador Hydro as a Crown-owned corporation.

All those in favour, `aye'. Those against, `nay'.

MR. SPEAKER: In my opinion the nays have it and division is ordered.


MR. SPEAKER: Is the House ready for the vote? If the Clerk would please proceed with the vote.

I will put the motion again, all those in favour of the motion, please stand.

CLERK (Noel): The hon. the Leader of the Opposition, Mr. W. Matthews, Mr. Sullivan, Mr. Tobin, Mr. A. Snow, Mr. Woodford.

MR. SPEAKER: Order, please!

We cannot hear the members being called.

CLERK: The hon. the Leader of the Opposition, Mr. W. Matthews, Mr. Sullivan, Mr. Tobin, Mr. A. Snow, Mr. Woodford, Ms. Verge, Mr. Windsor, Mr. Hewlett, Mr. J. Byrne, Mr. Hodder, Mr. E. Byrne, Mr. Fitzgerald, Mr. Shelley, Mr. Careen, Mr. Harris.

MR. SPEAKER: All those opposed to the motion?

CLERK: The hon. the Minister of Justice, the hon. the Minister of Industry, Trade and Technology, the hon. the Minister of Education, the hon. the Minister of Forestry and Agriculture, the hon. the Minister of Works, Services and Transportation, the hon. the Minister of Municipal and Provincial Affairs, the hon. the Minister of Finance -

MR. SPEAKER: Order, please!

I cannot hear the member's name being called.

CLERK: The hon. the Minister of Employment and Labour Relations, Mr. L. Snow, Mr. Barrett, Mr. Crane, Mr. Murphy, the hon. the Minister of Mines and Energy, the hon. the Minister of Health, the hon. the Minister of Tourism and Culture, Mr. Noel, Mr. Tulk, Ms. Young, Mr. Ramsay, Mr. Penney, Mr. K. Aylward, Mr. Langdon, Mr. Dumaresque, Mr. Gilbert, Mr. Whelan, Mr. Smith, Mr. L. Matthews, Dr. Hulan.

MR. SPEAKER: Order, please!

The Clerk is ready to give the result of the count.

CLERK: Mr. Speaker, sixteen in favour of the resolution, and twenty-eight against the resolution.

MR. SPEAKER: Resolution defeated.

The hon. the Government House Leader.

MR. ROBERTS: Mr. Speaker, we adjourn pursuant to Standing Orders, but perhaps I could take a moment to advise members that tomorrow we shall go back on the Throne Speech Debate, the Address in Reply.

AN HON. MEMBER: (Inaudible).

MR. ROBERTS: Well, my hon. friend says 'heavy stuff'. Yes, good stuff is coming from this side of the House. He will have to speak to his colleagues about doing something to improve their performance.

MR. SPEAKER: The House stands adjourned until tomorrow, Thursday, at 2:00 p.m.