December 18, 1995         HOUSE OF ASSEMBLY PROCEEDINGS            Vol. XLII  No. 78

The House met at 2:00 p.m.

MR. SPEAKER (Snow): Order, please!

MR. TULK: Mr. Speaker.

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

MR. TULK: Mr. Speaker, on Friday, I gave notice that I might, upon receiving Hansard and pursuing it, raise a point of privilege arising from the speech and the actions of the Member for Kilbride in this House on Thursday, December 14, 1995, and Friday, December 15, 1995. On completing that review, I am now raising a point of privilege concerning his actions and speech during the time in question.

Mr. Speaker, let me assure the Member for Kilbride that the raising of this point of privilege should not in any way be taken personally by him, rather it arises from conviction that if our parliamentary democracy is to function, there are certain rules of procedure in debate that have to be clearly adhered to and enforced. There may be those who do not care whether parliamentary democracy functions or not. I do not believe the Member for Kilbride is such a person, but rather, would probably agree with Sir Winston Churchill who once proclaimed parliamentary democracy to be a terrible form of government but yet the best so far known to mankind.

Mr. Speaker, in order to carry out its functions and duties, Parliament collectively, and its members individually, operate under what is known as parliamentary privilege. The extent and the importance of parliamentary privilege is clearly stated by Beauchesne, section 24, page 11, and more particularly by Sir Erskine May, page 69, when he states, and I will read it into the record: `Parliamentary privilege is the sum of the peculiar rights enjoyed by each House collectively as the constituent part of the High Court of Parliament and by members of each House individually without which they could not discharge their functions, and which exceed those possessed by other bodies or individuals. This privilege, though part of the law of the land, is to a certain extent an exemption from the general law. Certain rights and immunities such as freedom from arrest or freedom of speech belong primarily to individual members of each House and exist because the House cannot perform its functions without unimpeded use of the service of its members.

Other such rights and immunities such as the power to punish for contempt and the power to regulate its own constitution belong primarily to each House as a collective body for the protection of its members and the vindication of its own authority and dignity. Fundamentally, however, it is only as a means to the effective discharge of the collective functions of the House that the individual privileges are enjoyed by members.'

He goes on to say: `When any of these rights and immunities are disregarded or attacked, the offence is called a breach of privilege and is punishable under the law of Parliament. Each House also claims the right to punish as contempt actions which will not breach us of any specific privilege, obstruct or impede in the performance of its functions or offenses against its authority or dignity such as disobedience through its legitimate commands or libels upon itself, its members or its officers. The power to punish for contempt has been judicially considered to be inherent in each House of Parliament.'

Mr. Speaker, to summarize, individual and collective rights and privileges constituting Parliament and the right of Parliament to protect them and punish for contempt is clearly established. Beauchesne, section 26(2) page 12, states, `A question of privilege, is a question partially of fact and partially of law - the law of contempt of Parliament - and is a matter for the House to determine.'

Mr. Speaker, the facts in this point of privilege can clearly be ascertained by a perusal of Hansard and I would suggest that they are indisputable. Before looking at these facts, Mr. Speaker, it may be helpful to look at what is meant by contempt, again, Sir Erskine May, 21st Edition, page 115, says: `Generally speaking, any act or omission which obstructs or impedes either House of Parliament in the performance of its functions or which obstructs or impedes any member or officer of such House in the discharge of his duty or which has a tendency, directly or indirectly, to produce such results may be treated as a contempt even though there is no precedent of the offence.' Mr. Speaker, the act or omission does not even have to be proven concretely or beyond the shadow of a doubt to impede a member's ability to do his job but could be an act which direct or indirectly is just a tendency to impede the member in the performance in his or her duties in order to be classified as a contempt.

Mr. Speaker, I would remind the House and perhaps refer to the case of the former Member for Bonavista South, Mr. Jim Morgan, who claimed in this Legislature that his privileges had been breached because a set of ministerial files had been shredded. In fact, Mr. Speaker, the Committee on Privileges and Elections at the time felt indeed its privileges had been breached, not necessarily because of destruction of its files proved beyond the shadow of a doubt that his ability to do his job was impeded or obstructed but because there was a tendency in the act itself to impede or obstruct.

Mr. Speaker, Sir Erskine May, in the same edition from which I quoted before, page 129, gives us a further example of contempt and the tendency of certain actions when he states, and I do this, Mr. Speaker, to find out the place and what it means to act in contempt in regard to the officers of this House: `It is a contempt to obstruct those employed by or entrusted with the execution of the Orders of either House while in the execution of their duty.

Contempt of this character has included assaults, insulting and abusive behaviour or threatening language, resistance to those actions in execution of the Orders of either House, aiding the escape of an individual from the order for his custody or committal; refusal of civil officers to assist in executing the order of either House, and the discharge out of custody by a magistrate of a prisoner arrested by order of either House. Both Houses will treat as breaches of their privilege, not only acts directly tending to obstruct their officers in the execution of their duty, but also, any conduct which may tend to deter them from doing their duty in the future.'

Mr. Speaker, on Thursday afternoon, the Speaker asked the Sergeant-at-Arms - and that is the reason I raised this particular paragraph - to escort the Member for Kilbride from the Legislature.

The Member for Kilbride obstructed the Sergeant-at-Arms and his officers from so doing and I would suggest to you, that a large number of the Members of the Opposition did likewise.

Mr. Speaker, let us just review the facts. We have looked at the definitions of what constitutes contempt, let us look at the facts. On Thursday, the Member for Kilbride accused a member of this House of lying. He refused, upon direction of the Speaker, to withdraw the remark, as a consequence he was named by the Speaker, and by a motion put by the Government House Leader and voted on by the Legislature, was ordered suspended for the rest of the day. He refused to leave the Legislature in spite of the fact that, you, Mr. Speaker, adjourned the House for some considerable period of time to allow emotions to subside, I suspect. He also refused to leave on the instruction of the Sergeant-at-Arms and his officers.

Mr. Speaker, you, yourself, have been put in the unenviable position of having to suspend the sitting of the House because, in the words of yourself: There is some serious and grave disorder and until that is resolved, the House is suspended. Mr. Speaker, fortunately, it was Thursday, and at 4:30 p.m., the Speaker used the rule of our Standing Orders to adjourn the House until 9:00 a.m. on Friday.

Mr. Speaker, the question that has to be asked here is: Did the actions of the hon. member impede members of the House or, did they have a tendency to impede members of the House, or officers of the House, in the performance of their parliamentary duties? That is the question.

Mr. Speaker, I will leave that decision to Your Honour, to you, but I would suggest that there is not even a tendency, but the concrete facts here cannot be explained in any other way than by way of a contempt of Parliament and a breach of privilege of every member and officer of this House.

Mr. Speaker, I doubt the kind of actions that we witnessed on Thursday and on Friday morning have ever been seen in this Legislature before, certainly not in my time of some fourteen or fifteen years, and I doubt that it was seen in the time of anybody in this Legislature. Mr. Speaker, they have to be dealt with. It just cannot be allowed to stand the way it is.

Mr. Speaker, I shortly want to conclude but before I do let me again reference Beauchesne, 6th Edition, §33, page 14, where it says - and I want to bring in particular these rules to Your Honour's attention, and hon members of the House - "The most fundamental privilege of the House as a whole is to establish rules of procedure for itself and to enforce them."

The most fundamental privilege of the House as a whole is to establish rules of procedure for itself and to enforce them. So you see, Mr. Speaker, there are two components of this very fundamental privilege. First, the House itself establishes its rules. Secondly, the House itself has the power to enforce the rules. Today, the point of privilege that I am putting forward is based upon the importance and the primacy of enforcement.

To show you the power that the House has, I want to quote to the Speaker §34, page 14 of Beauchesne, and §47 page 16. Section 34 states, "The power of the House to enforce its rules extends not only to Members and others admitted within the precincts of Parliament, but also to members of the general public who may interfere with the orderly conduct of parliamentary business."

Section 47, page 16, "There is no question that the House has the right to expel a Member for such reasons as it deems fit."

Again, §49, page 17, to show the primacy of this legislation of Parliament, "It is not necessary for the courts to come to a decision before the House acts." In other words, the House can act before the court.

Mr. Speaker, the citations that I give you, I think, emphasize that the fundamental privilege to establish our own rules and to enforce them is the very pivot, I say to you, on which the delicate balance of parliamentary procedure swings.

Again, this is particularly true of enforcement of the rules. It is why members are required to refrain from unparliamentary language when referring to other members. We are largely masters of our own House. It is why the Speaker has such authority. It is why his rulings are unquestioned and his direction, as given on behalf of the House, sacrosanct. It is why the Sergeant-at-Arms and his officers have to be able to exercise their authority. It is why the civil authorities - in this case the police - have rarely had to be used in enforcing parliamentary privileges.

On Thursday and Friday this fundamental privilege was breached, and the fundamental privilege that I'm talking about is enforcement of the rules. It was breached. The authority of this House was pushed to the brink; I would submit it is still on the brink and threatening to go over the edge.

The Member for Kilbride has freedom of speech in this House. It is one of the hallmarks of a democracy. In that regard I say to the Member for Kilbride, he may even believe the accusation he directed at a member of this House to be correct. He may believe that the invoking of closure by the government was undemocratic and unworthy of a government. That is his choice, and he can utter it outside these walls where it will be dealt with in another manner. As for his actions in here, I would like to refer him to Beauchesne again, section 77, page 22, when he says: "Freedom of speech does not mean that Members have an unlimited or unrestrained right to speak on every issue. The rules of the House impose limits on the participation of Members and it is the duty of the Speaker to restrain those who abuse the rules."

Not only did the member speak in an unrestrained manner on Thursday, he stepped outside the limits of participation of members and refused to be restrained by the Speaker and the officers of this House. Again, in a manner I would suggest to you never witnessed in this Legislature before. Further contempt of the parliamentary process was in my opinion conducted by the member through what, Mr. Speaker, I've heard some people say amounted to boasting outside the House that he would not withdraw his unparliamentary accusation, and in some manner intimating that he had got away with something on the Speaker.

Mr. Speaker, on Friday, you reviewed the events of Thursday. In the interests of time it is not necessary for me to quote what the Speaker had to say, except to point out that you, yourself, reiterated the actions of the member could lead to the House, and I believe rightly so, being "...paralysed and unable to carry out the people's business." Clearly, you stated this was " affront to all the other members of the House and must not be allowed to continue." You pointed out that you had few options, and your feeling that it would be most undesirable to use your authority to resort to the civil authorities.

To avoid that unpleasantry, you then asked the member to apologize. Again, the member proceeded to accuse the - in this case, the member of the House being the Premier - of not telling the truth, and again pushing the authority of this House to the limit. You then asked the member to apologize to the House and to the Chair. The member then refused to withdraw his comments, and apologized for putting the Speaker in the position that you were in. You then asked him to apologize for his actions unequivocally. The Member for Kilbride concluded by saying: "Mr. Speaker, I apologize for putting you in the position that you are in, and with that I will sit down."

In summary, the Member for Kilbride called another member of this House a liar; he consistently refused to follow the Speaker's directions; he refused to follow a motion of suspension duly passed by his own colleagues, did not serve that suspension but, by refusing to allow the Sergeant-at-Arms to carry out his duty, impeded and obstructed debate in this House for the whole of Thursday afternoon past; and on Friday morning past when the Speaker, showing extreme tolerance and patience, practically begged the member for an unequivocal apology to the House, the member refused, apologizing only for the position that the Speaker was in.

Mr. Speaker, this is totally unsatisfactory. It represents an affront to members, has a tendency to throw this House into anarchy and is clearly a breach of privilege. Today, tomorrow, at any time, it has now been established that unless this matter is addressed, any member can obstruct and, after breaching all members' privileges, apologize only to the Speaker.

In accordance with established procedure of this Parliament, I submit to you that a prima facie case of breach of privilege does exist and I ask Your Honour so to find. In accordance with the rules of procedure outlined in Beauchesne - and I believe our Standing Orders are silent on this issue - Beauchesne, section 114, subsection (2), page 29, states: and reads: `A complaint of a breach of privilege must conclude with a motion providing the House with an opportunity to take some action.'

I am prepared to put forward such a motion. Mr. Speaker, in recognition of the esteem in which members of this House should be held, I move, seconded by the Member for Windsor - Buchans, that having established a prima facie case of breach of privilege, the Speaker again afford the hon. member the opportunity to withdraw his unparliamentary remarks, serve a suspension imposed by the House on December 14, 1995, and apologize to the Speaker, members of this House and its officers. It is further moved that refusal to carry out these actions would lead to the hon. member's suspension without stipend until such time as he carries out the above actions.

Mr. Speaker, I do not make this complaint lightly, and while Your Honour will take whatever time he feels is necessary to decide whether a prima facie case of breach of privilege exists, I would urge expediency, in order that the cloud under which we are presently operating be dispersed and that the authority of this House be brought back from the brink of anarchy. Thank you.

SOME HON. MEMBERS: Hear, hear!

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

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

I want to speak to the point of privilege raised by the Member for Fogo. I do not want to belabour the point. The member has outlined the events of Thursday and Friday.

Let me just say this, Mr. Speaker. You have been vested by this House with the authority to maintain order and decorum. You have also been vested with the right to enforce the authority which is you can grant, name and expel a member for a day. You have that authority and you exercised that on Friday. With regard to the suspension that the hon. member as referred to, for Thursday, it was a motion put by the Government House Leader that the Member for Kilbride be suspended for the remainder of the sitting day, which was Thursday, which ended when Your Honour adjourned the House on Thursday. From my recollection it was around 4:40 or 4:45 p.m. That ended the parliamentary day. Friday was a new day. In parliamentary terms it was tomorrow of Thursday and the suspension was ended on Thursday, it was for the remainder of that sitting day. Friday was another parliamentary day. The suspension did not apply to Friday. It was taken care of.

Mr. Speaker, as I said, I don't want to belabour the point. Your Honour, came back on Friday morning and you asked the hon. the Member for Kilbride to apologize to the House and to the Chair. Mr. Speaker, said in Hansard of Friday, page 2686, "The Chair was not asking the hon. member to withdraw his comments. The record of yesterday will show what transpired here in this House, but what the Chair is asking the hon. member to do is apologize for his actions unequivocally. Is the member apologising for his -" The Member for Kilbride stood in his place and said, "Mr. Speaker, I apologize for putting you in the position that you are in, and with that I will sit down." Mr. Speaker, said: Okay; we then proceeded to Orders of the Day and we had a very productive day on Friday.

So, Mr. Speaker, Thursday and Friday, in my view, are behind us. I contend that there was no breach of privilege of any member of this House and we will leave it with Your Honour to rule accordingly.

MR. SPEAKER: The hon. the Member for Windsor - Buchans.

MR. FLIGHT: Mr. Speaker, my years in the House of Assembly since 1975 prompted me to stand for a minute. Mr. Speaker, in the best of twenty years, I have never taken part, I have never moved a point of privilege and I doubt very seriously if I have taken part in a debate on a point of privilege. But, Mr. Speaker, I was involved in several incidents where the privileges of the House, as determined by the Speaker, were affected and the members concerned were asked to do what was required under the rules. I recall one particular incident, Mr. Speaker, where the then hon. Speaker, Mr. Ottenheimer, was forced to empty the benches of the Opposition. Each member of that Opposition, including myself, apologized profusely to the Speaker, but the Speaker, in each case, reminded the member that: You are not to apologize to me - you have not insulted me, Mr. Member, you have insulted and breached the privileges of every member of this House of Assembly. It is to them you owe the apology. It is for that reason you must withdraw.

SOME HON. MEMBERS: Hear, hear!

MR. FLIGHT: Now, Mr. Speaker, in the fourteen years that I was a member of the Opposition, I can tell you, Sir, and no one in this House will question it, that I had in my mind plenty of reasons to call somebody a liar in this House of Assembly when I saw the way my district was treated, or when I saw any number of things. I came very close but recognized, Mr. Speaker, that I was not allowed to do it and if I did, then I would be breaching the privileges of every member of this House of Assembly and that I would be expected to pay the price, regardless of how humiliating that price might have been, so I always, in my case, and every other member I served with, drew back from being put in the position that the hon. the Member for Kilbride is put in today.

I contend to you, and members had better not take this lightly, Mr. Speaker, that I am as guilty as any member of this House of Assembly in the give and the take, the shouting and bawling across the House, but there is a line one does not cross, Mr. Speaker. I contend to you, Sir, if the case made by the hon. the Member for Fogo is not taken seriously and dealt with, then the Member for Kilbride will have effectively - and all the rest counts for nothing, Mr. Speaker, everything else that has been said in this debate, including the comments of the hon. the Opposition House Leader, will be taken for nothing if it is not dealt with, because next week, as opposed to shouting across the House to some member some innocuous thing that one can get away with, I will probably look, and every other member can, if they wish, look at the precedent that has been set here today and was set Thursday, that one can indeed insult another member, one can indeed call another member a liar and do it in a way that can be heard by the Speaker, and feel there will be no problem, that precedent was set, it is okay to call a member a liar.

Mr. Speaker, if we allow that to happen - and I can tell you, in my case, it has been the best part of twenty years in this House of Assembly - if we allow that to happen today, we will be lowering the decorum and lowering the value of this House in the eyes of the people of this Province. I believe this House has no choice. If they are concerned about the legacy they pass on to the people who come behind us, and are proud and uphold the tradition of this House, the Member for Kilbride has no choice but to withdraw and do what is required rather than stand behind the comments he made here Thursday.

Thank you.

SOME HON. MEMBERS: Hear, hear!

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

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

Further to the point of privilege, I just want to say in reaction to the Member for Windsor - Buchans that as a result of not withdrawing his comment, Your Honour named the Member for Kilbride on Thursday. The Government House Leader made a motion that he be suspended for the remainder of the sitting day, which in the parliamentary sense, was Thursday. Your Honour ended the parliamentary day of Thursday when you adjourned the House at 4:40 or 4:45, so consequently, the Member for Kilbride served a penalty by being named by Your Honour for not withdrawing his comments.


MR. W. MATTHEWS: Mr. Speaker, I listened intently to the Member for Fogo and the Member for Windsor - Buchans, and if anyone can tell me the parliamentary day of Thursday did not end when Your Honour adjourned the House for the day, then so convince me. Friday was tomorrow in the parliamentary sense, a new day. If the Member for Kilbride was to be suspended for the sitting on Friday then I suggest to hon. members that there had to be a new motion. Number one, on Friday the Member for Kilbride said nothing unparliamentary, so consequently, he could not be asked to withdraw an unparliamentary comment on Friday because he had not made one. If he had made an unparliamentary comment on Friday and Mr. Speaker had asked him to withdraw, and he had been so named, then the Government House Leader, accordingly, on Friday, it being a new parliamentary day, could have made another motion and the member would have been suspended, but that did not happen, I say to members. The parliamentary day of Thursday ended when you, Mr. Speaker, adjourned the House at 5:40, so the Member for Kilbride had served his suspension when Thursday ended.

MR. GRIMES: (Inaudible).

MR. W. MATTHEWS: I say to the Minister of Tourism, Culture and Recreation that it was the Speaker of this House who adjourned the House on Thursday. It was not the Member for Kilbride, not the Leader of the Opposition, not the Opposition House Leader, not the Premier or the Government House Leader, or the Member for Fogo, or the Member for Windsor - Buchans, it was the Speaker of the House.

Your Honour, I want to go on record as saying that I respect sincerely what you did on Thursday. I think you did what was most logical under the circumstances. I commend you for that.

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

MR. TULK: Mr. Speaker, let me just say to the hon. member -

MR. SULLIVAN: Now who is delaying proceedings?

MR. TULK: Mr. Speaker, if the Member for Ferryland regards this point of privilege as just delaying the proceedings of the House, then I would suggest to him that he is - I don't want to say this, but he is completely out to lunch.

The parliamentary day on Thursday never, ever, got started, I say to the Opposition House Leader. It never, ever got started because it was obstructed and impeded by the Member for Kilbride. He sat in his seat the whole day and stopped the proceedings of this House, and if that is to be the order the next time that somebody orders a suspension, or there is a motion put forward in this House asking that a member be suspended and it is carried, then all we have to do is sit here and say: No, I am not going to move... and the next day we come back scott free.

The Member for Grand Bank, the Opposition House Leader, knows that is not the way this House can proceed, and if he wanted the Rules of Procedure to apply to this House what he would do is ask that we make a motion to expel the Member for Kilbride today, and if that is necessary I am prepared to do it.

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

MR. W. MATTHEWS: Mr. Speaker, I think I have been clear - I hope I have - but obviously it has not sunk into the Member for Fogo. Obviously it hasn't. Like I said, I don't want to belabour the point or inflame the situation where we keep this going here today until 5:00 p.m. or 6:00 p.m., which I sort of suspect is the plan of two or three members opposite. I sort of suspect that. That is the plan over there. They want to inflame this volatile situation now and keep it going again.

Mr. Speaker, the Government House Leader made a very clear motion that the Member for Kilbride be suspended for the remainder of the sitting day on Thursday. The sitting day on Thursday ended when Mr. Speaker adjourned the House. If the Government House Leader, or the government, or whoever, felt that the Member for Kilbride had not served the suspension adequately then I don't know how else it could have been dealt with.

The member did not say anything unparliamentary on Friday. He participated in Question Period. He was recognized by Your Honour. He apologized, first of all, on Friday morning to Your Honour for the position he put you in. You recognized him in Question Period - he participated - and to say that the parliamentary day had not begun on Thursday is certainly an inaccuracy. We had Oral Questions here. The day had begun; we were into the day. We were into Oral questions. So I think the Member for Fogo is - for what reason I don't know; I have my own suspicions why he is trying to do what he is doing here today. I have my own suspicions, but that is a story for another day. I won't further inflame the situation or make it more volatile by telling them what I am suspicious of.

MR. SPEAKER: The Chair will hear one more submission. The hon. the Member for Bonavista North.

MR. LUSH: Thank you, Mr. Speaker. I don't want to prolong this matter either, other than to make a couple of points.

One, I want to congratulate the Member for Fogo for raising this point of privilege today which I think is a very important point of privilege.

With respect to what the Opposition House Leader has said, that the penalty was served on Thursday, I think the Opposition House Leader would agree that is not a parliamentary procedure for preserving the rules of this House, preserving order and decorum. When a member is ordered to do something by the Speaker and he refuses to do it, and the Speaker adjourns for a few minutes to deal with it, and because the day is over by the time the Speaker comes back, to say that penalty was served is certainly a very nebulous way, a very weak way, of dealing with matters in this House.

I am not going to prolong the thing, because I think the Member for Fogo has quoted all of the authorities necessary, other than saying, Mr. Speaker, other than saying, that what sets us apart, what sets this House apart, what sets every Parliament apart from other institutions, is the fact that we make our own rules and enforce our own rules, and the body of rules that we have coming from the rules that we have made, from tradition and from precedent, Mr. Speaker, is what combines to make parliamentary privilege, and, if members themselves abuse that privilege, then of course, the whole system just falls completely flat, Mr. Speaker, and this is what makes us the institution that we are because hon. members, through the years, have decided that we enforce those rules and though we break them, we then do what is necessary to correct them to uphold the dignity and the respect of Parliament, and I would suggest, Mr. Speaker, to do otherwise, is to lower the dignity and the respect of Parliament and really, to reduce it to a bear pit, Mr. Speaker, that's why we have these rules of parliamentary procedure to keep a modicum of moderation and temperance in the House, and as I have said, when we break these rules, then we do what is required.

We have a situation now, Mr. Speaker, where you, Your Honour, did all that was required. His Honour did all that he could do under the circumstances. The point of the privilege raised by my friend the Member for Fogo, is saying that the House ought not to be satisfied with this particular ruling, because the hon. member hasn't done what is required to uphold the dignity and the respect of the House and now we are asking the House to deal with it.

SOME HON. MEMBERS: Hear, hear!

MR. LUSH: The Speaker has done his job, we are now asking the House to deal with what we believe was certainly a breach of the privilege of this House to every member.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: As has been indicated here, the question of privilege is indeed a most serious matter and to be given very serious consideration. The incident of last Thursday is no doubt a very serious matter. I would like to take some time to review the submissions by members today and to consult and research this matter further, and I will take the question of privilege under advisement and report back to the House at the earliest possible time.

Oral Questions

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

MS VERGE: Thank you, Mr. Speaker.

I have questions about Voisey's Bay for the Minister of Natural Resources.

Would the minister tell the House the government's current estimates of the size and the value of the mineral deposits at Voisey's Bay, and tell us the basis for these estimates?

MR. SPEAKER: The hon. the Minister of Natural Resources.

DR. GIBBONS: Mr. Speaker, the only estimates that we can use publicly are estimates that have been used publicly by the companies. These are the only ones that I use publicly and we can refer to a number of press releases that have been given out over the past year.

In that regard, I can refer to one from memory that was released, and I think it was some time in June, that had proven drill off reserves, because reserves have a particular definition in terms of mining reserves. You have to have drilling of certain close spacing and, the number at that time was 31.7 million tons of proven drilling reserves. They have not put out proven drilling reserves since, but a few days ago, the company put out another press release at which time they talked about the drill results in the eastern deeps and they estimated in that one that they might have another 45 million tons but they need to do closer space drilling before they can put these into what is called the mining reserve.

There have been other estimates and recently, one of the co-chairman of Diamond Fields gave a speech at an international nickel conference in Australia, in which he talked about the number dating back to June. He gave an estimate of the number that was released last week and he said, in his own words, he believed there might be two or three times that much. Well, that's an estimate we have to wait and see what the drilling results are going to be before we can put an exact number on it. These are the only numbers that I can use publicly.

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

MS VERGE: Thank you, Mr. Speaker. I note the minister didn't attempt to value the mineral deposits. I would like the minister next to give the government's current estimates for the construction phase of the Voisey's Bay development. Would the minister indicate what the government expects in terms of the time frame and the construction cost for the mine and for the smelter?

MR. SPEAKER: The hon. the Minister of Natural Resources.

DR. GIBBONS: Mr. Speaker, we have done some estimates ourselves for our internal assessments. I'm not going to make these numbers public. It would be very inappropriate for me to make these numbers public. I am not going to do it, Sir.

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

MS VERGE: Thank you, Mr. Speaker. Would the minister care to explain why he considers it inappropriate for the public to know the government's expectations about the Voisey's Bay mine construction and smelter construction?

MR. SPEAKER: The hon. the Minister of Natural Resources.

DR. GIBBONS: Mr. Speaker, it is not a tough job for anyone with a bit of knowledge of the mining industry to put some estimates on the number of people who would be employed in a mine, the number of people who would be employed in a smelter, or the number of people who would be employed in some type of other processing facility. We have done that after due consultation with the companies, but also based on our own knowledge of the mining industry and our own consultation elsewhere. We have good numbers based on our knowledge of this to date.

I don't think it is appropriate to go putting these numbers on the air because the company itself is responsible for putting out real numbers, and we will wait until it puts out real numbers. It has implications for its stock, implications for its shares, and we must wait until it can put those out legally.

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

MS VERGE: Thank you, Mr. Speaker. I ask the minister, are you the minister for the people of Newfoundland and Labrador or the minister for the company? I'm not asking these questions irresponsibly. Won't the minister reveal for the benefit of the public of the Province more details about the estimated opportunity at Voisey's Bay?

MR. SPEAKER: The hon. the Minister of Natural Resources.

DR. GIBBONS: Mr. Speaker, for public consumption at this time we must deal with the reality of the numbers that have been provided by the company based on the detailed drilling results that have been completed. These have been made public regularly. The results of more than 200 drill holes have been published to date. As they become available in the future there will be more results released for public consumption. We have done estimates, they have done estimates, and we have used the estimates for various assessment purposes. But it is pointless for me to go speculating about various things in public. It should not be done. It is totally irresponsible to do so.

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

MS VERGE: Thank you, Mr. Speaker. Seven months ago, I say to the minister, the Premier announced that the government would be amending the mining tax act to correct the mistakes that were made in a rush amendment before Christmas last year. I would like the minister to tell the House and the public what options the government considered over the past seven months, and have him reveal to the public the options considered and the pros and cons of the various alternatives that were examined, including the option chosen, which was put forward in a bill tabled last Thursday.

MR. SPEAKER: The hon. the Minister of Natural Resources.

DR. GIBBONS: Mr. Speaker, if the hon. member wants to get into the details of the tax legislation she is probably talking to the wrong minister. She should talk to the minister responsible for taxes. But I would like to clarify one point.

There was no rush last year when we made an amendment. The amendment that was made last year had been thoroughly analyzed several years before and announced in the Budget of 1992. We made the amendment last year, last December. There was no rush. There were no great mistakes. We have analyzed our mining history and the mineral deposits that have been mined in our mining history, in reaching that. But, after the discovery of Voisey's Bay, after the analysis that we did on Voisey's Bay, we realized that we had better put some caps on. The bill that was tabled a few days ago showed the caps that we have put on, and the hon. member will have lots of opportunities to debate those caps and the details of that in the days ahead.

MR. SPEAKER: The hon. the Leader of the Opposition, on a supplementary.

MS VERGE: Thank you, Mr. Speaker.

A final question to the Minister of Finance.

I would like to ask the minister, with respect to the bill which was made public last Thursday, Bill 43, What do his officials estimate to be the revenue yield from the Voisey's Bay development, year by year, assuming that bill is enacted?

MR. SPEAKER: The hon. the Minister of Finance and Treasury Board.

MR. DICKS: As the hon. member knows, or should know, the answer to that is impossible to give. Voisey's Bay Diamond Fields is just now only determining what the total reserves are. They had a recent announcement which indicated that the mineralization was much greater than expected.

Secondly, that would engender a lot of speculation as to what world nickel, cobalt and copper prices will be over the life of the mine, which will no doubt extend beyond the year 2015 or 2020. It is impossible, given those parameters, to give an answer to the hon. member's question.

As well, as the hon. member knows, the actual rates have not yet been determined once one gets beyond the 20 per cent return on capital threshold or the 30 per cent. So what we have done is, we have introduced a format at which rates we think taxes should be imposed and, as I understand, the bill will be referred to a committee for appropriate input, and I am sure the hon. members will have it in due course.

Thank you, Mr. Speaker.

MR. SPEAKER: The hon. the Leader of the Opposition, on a supplementary.

MS VERGE: Thank you, Mr. Speaker.

A final supplementary to the Minister of Finance.

Would the minister explain why the government chose to go the route of Bill 43 and make amendments to the mining tax legislation of general application instead of adopting the approach taken with the offshore oil industry and negotiating a project specific revenue régime?

MR. SPEAKER: The hon. the Minister of Finance and Treasury Board.

MR. DICKS: Thank you, Mr. Speaker.

That option was considered. It was deemed more appropriate to have a regime of general application to avoid uncertainty, and what the Province sought to do was to address the larger question of what appropriate caps would be for the (inaudible) incentives we had offered for the mining industry which had proven successful. There are possibilities that other finds of this magnitude hopefully will occur in the future and a general régime, we thought, was the most appropriate.

Thank you, Mr. Speaker.

MR. SPEAKER: The hon. the Member for St. Mary's - The Capes.

MR. MANNING: Thank you, Mr. Speaker. My questions today are for the Premier.

Over the past number of days it has been indicated there is a growing problem with this Province's food banks. Cash donations which are regularly around $40,000 a year are down to around $10,000 this year. A list of families in need has risen by 1,000 since this time last year, and families are returning to food banks more often during each month than they did in the past. With all these concerns and others, I would like to ask the Premier: Has his government any plans to assist the Community Food Sharing Association this week, especially as we approach these last few days before Christmas?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, what the hon. member also did not say is that the reports of the last week indicate that the people of this Province continue to be the greatest givers to charity and to worthy causes in (inaudible).

SOME HON. MEMBERS: Hear, hear!

PREMIER WELLS: Mr. Speaker, that is the process that our people use to make voluntary contributions. The tax system is not the system to do that. People choose to do that on their own and I, for one, am very, very proud of our record in this Province and hold it up for examination by everybody in the country, anybody who wants to look at it.

AN HON. MEMBER: (Inaudible).

PREMIER WELLS: If the hon. member wants to answer his colleague's question, he can answer it, but the question was directed to me, so I am answering it.

MR. SPEAKER: Order, please!

PREMIER WELLS: Mr. Speaker, that is the way the contributions are voluntarily made, not through the tax system.

MR. SPEAKER: The hon. the Member for St. Mary's - The Capes on a supplementary.

MR. MANNING: Thank you, Mr. Speaker.

I, too, agree with the Premier that Newfoundland is known far and wide for its generosity, but we have people who are hungry in this Province. There are over 20,000 children depending on food banks in this Province today. Last year, the Community Food Sharing Association distributed $3.5 million-worth of food. This year it could be estimated up to $5 million. Even with all that, there is still a need.

One of the things that could be done to help is the passing of Bill 100 which was introduced into this House of Assembly on May 31, 1995 by my hon. colleague, the Member for Bonavista South. Bill No. 100, An Act Respecting The Good Faith Donation And Distribution Of Food, would open up the doors for many more individuals and businesses and enable them to donate much more and possibly fill the void that now exists.

In light of the fact that on May 31 the Government House Leader said, and I quote from Hansard: "Let me say first of all that we are quite concerned that the subject of this bill is one that should be addressed."

MR. SPEAKER: Order, please!

MR. MANNING: I would like to ask the Premier: When does he plan to address this very important issue?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, we were addressing it in Cabinet today as we considered the Strategic Social Plan consultation paper that will shortly be taken around the Province for hearings in much the same way as was done with the Strategic Economic Plan. This will set out a plan to deal with our social concerns and our social problems. That is how it will be addressed, in an orderly fashion, not an ad hoc fashion.

MR. SPEAKER: The hon. the Member for St. Mary's - The Capes, on a supplementary.

MR. MANNING: Thank you, Mr. Speaker.

I don't agree with ad hoc fashion either, Mr. Premier, but there is a need, and it is desperate as we approach the last few days before Christmas. There are several provinces in Canada with legislation similar to Bill 100. When the bill was introduced, the Government House Leader expressed some concerns about the wording or the drafting of the bill. If that is a problem, that in itself, can be addressed with amendments here in the House of Assembly on second reading. If there were a will within government to assist the Food Sharing Association this bill could be passed here in the next day or so.

SOME HON. MEMBERS: Hear, hear!

MR. MANNING: I ask the Premier, on behalf of the people who distribute to the needy, and most importantly, on behalf of the needy, to have his government deal with Bill 100 before this week is over. I am sure the government will receive co-operation from this side.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, the government is not going to address these concerns in this kind of an ad hoc manner. We are doing it in a logical, sensible manner. I should also say that I listened this week to news reports that the amounts of food available to the food banks had significantly increased. I am not sure what the member is trying to do by making the argument in this way. If that issue needs to be addressed it can be addressed in a logical and sensible way.

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

MR. HODDER: Thank you, Mr. Speaker.

My questions are for the Minister of Municipal and Provincial Affairs. The House of Assembly has enacted legislation to provide for financial monitoring control of municipalities, especially as it is related to revenue expenditure, debt management and reporting. In the Auditor General's report for 1993-1994 the statement is made: The Department of Municipal and Provincial Affairs does not adequately monitor and control the financial activities of municipalities as required by law. The same statement is made in the Auditor General's report tabled just two weeks ago. What measures has the minister taken to comply with the legal mandates of his department to monitor the management procedures of municipalities?

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

MR. REID: Mr. Speaker, I believe I answered the same basic question this time last year when the Auditor General's report came out. The problem that I -

MR. TOBIN: Didn't do anything about it.

MR. REID: Maybe that member should be asking municipal questions rather you, `Harvey', because he seems to know more of what is going on here than anybody else.


MR. SPEAKER: Order, please!

I remind the hon. minister that we refer to members of the House by the district they represent and not by their names.

MR. REID: I was wrong, Mr. Speaker, I'm sorry about that. May I continue, Mr. Speaker?

MR. SPEAKER: The hon. the Minister, yes.

MR. REID: Mr. Speaker, we have some 500 incorporated communities in the Province, and local service districts that are non-incorporated. On top of that, there are 200 other communities out there. Out of the 285 incorporated communities, I would say that 95 per cent of those have town clerks or town managers. Those are the people who are responsible for providing adequate accounting procedures and financial recommendations or laws, as it spells out in the financial administrations act and in the municipalities act.

My problem ,as the hon. member knows, is that I am not sure how many exactly, but I think I have six people in the whole Province who go around to these communities on a regular basis, on a day-to-day basis, and try to help where they can, the town clerks and sometimes the town councillors, to try to help them put their financial house in order. And the bottom line with all this is, if this government could afford to give me more funding to employ more people, I would have no problems abiding by the recommendations of the Auditor General. That is basically the reason why we cannot do it and that is why my department and the Department of Municipal and Provincial Affairs have been criticized for the last two years at least, by the Auditor General, for not providing that service. If the money were available, I am certain that we would be trying to do, as a government, more than we are doing with regard to the financial administration of municipalities.

MR. SPEAKER: The hon. the Member for Waterford - Kenmount, on a supplementary.

MR. HODDER: Thank you, Mr. Speaker.

The Auditor General's Report for the past year states that: of twenty municipalities examined as part of the auditor's analysis, it was found that few have any reliable or objective assessment of the condition of their water and sewer systems. Sewer treatment facilities, chlorination and fluorination facilities, pumping stations and piping are not monitored properly.

Has the minister identified these municipalities noted in the Auditor General's report, and what has he done to assure that those assets - which are also assets of the Province - are monitored properly?

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

MR. REID: A very good question, Mr. Speaker, in fact, an excellent question.

Very little, to be quite honest about it. When we go out and assist municipalities of the Province to put in water and sewer systems, it is difficult for us to be back on a regular basis making sure that these systems are operable and being maintained. In fact, in a lot of cases in this Province, a lot of systems are not being maintained especially in wastewater systems around the Province.

This government and the previous government have been trying to help the environment by installing different systems around the Province, to try to control some of the wastewater that is going into our streams and out into our bays and oceans, but the problem with installing these expensive environmental gadgets, for the want of a better word, is that they cost a fair amount of money to operate after they are installed; and a lot of communities around the Province are finding it difficult just to be able to find the money to maintain and operate these particular facilities. So I say to my hon. colleague and to the House, Mr. Speaker, that it is very difficult for me, with two engineers right now in my department, to be asking those two engineers to travel the Province checking on some over 200 water and sewer systems in the Province. And it boils down again, I guess, to the fact that there is very little money for that sort of thing today, when the hon. the Minister of Health and the hon. the Minister of Education and Training and my hon. friend, the Member for Works, Services and Transportation are looking for monies for all kinds of other things in government, that at the present time, to this government, are more important.

MR. SPEAKER: The hon. the Member for Waterford - Kenmount, on a supplementary.

MR. HODDER: Thank you, Mr. Speaker.

In other words, the minister acknowledges that the infrastructure paid for by the taxpayers of this Province is falling apart. It is not being monitored and although it is required by law to monitor that, he cannot or will not be doing anything about it.

Several weeks ago, the minister, in corroboration with the NLFM, appointed a task force on municipal finance. What are the terms of reference for the task force, who has been appointed to the task force, will there be public hearings throughout the Province, and when does the minister anticipate the task force to report?

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

MR. REID: I think there were four questions, Mr. Speaker. Maybe there were five but I will try to answer four and maybe by that time I will remember the fifth one.

There were two members from the Federation of Municipalities appointed: Mayor Milton Peach of Carbonear and Councillor Jeff Brace from the City of St. John's. They represent the federation, and I believe, to be quite honest about it, Mr. Speaker, those people were picked because of the cost. It was cheaper for Jeff and Milton to come into St. John's than it would be to bring Sam Sinyard, say, or somebody from the Burin Peninsula or someone from the West Coast.

From my department, the Deputy Minister, the Assistant Deputy Minister, Mr. Art Colbourne, and my regional director from the Eastern Regional Office, Keith Warren, are sitting for the department representing the government. Two secretaries have been appointed, one from my department and one from the Federation of Municipalities, and I think the Executive Director of the Federation of Municipalities sits in on the meetings and acts as the secretary for the Federation of Municipalities.

The mandate of the committee, basically, was to review all aspects of municipal government in the Province, and I believe when agreeing to it at the time - and I think my hon. colleague, the Member for Waterford - Kenmount was there when I did agree - we said that we would look at all aspects of financial administration of communities in the Province to try to come up with some ideas, some suggestions to government on ways to deliver funding that we create and that we provide every year as it relates to the municipal operating grant, as it relates to transfer payments on debt for water and sewer, and so on.

There are no intentions at the present time - in fact, the mandate of the federation which was voted on at that meeting down at Holiday Inn that day said the report would have to come back before January 31. There is some argument over whether it was January 31 but the president of the Federation, in subsequent letters to me, has said that he would like to have the report by January 31. In doing that, it is going to be difficult for us to travel around the Province. I cannot see really being able to provide the money to travel around the Province during the winter. It is a hard time to do it. If, at the end of the day, the Federation of Municipalities is not satisfied with what the committee has done and what they have presented, then at that particular point in time we may look at that.

I will say to my hon. friend that the White Paper on regionalization is just about ready to go to the printers. Cabinet will see the White Paper first, and hopefully, Cabinet will discuss, debate, and maybe make some changes to it, and send that paper on to the general public. If there anything going to go around the Province, it will be the White Paper on regionalization.

MR. SPEAKER: Order, please!

The hon. the Member for Ferryland.

MR. SULLIVAN: Thank you, Mr. Speaker.

I have a question for the Minister of Health.

A review of long-term care beds in this Province was reported by the 1986 Nycum bed study. Earlier this year, the IMB Associates did a study on recommendations for long-term care beds in the Clarenville area. It was only two years ago that the Agnew Peckham study reported on serious problems in the St. John's region where two thirds of the beds do not meet current departmental standards and there are long waiting lists.

Now, the problem of long-term care beds is studied to death, I say to the minister, and is becoming a complete waste of taxpayers' dollars. Now, the minister never seems to get the answer he wants and he puts the report on the shelf to gather some more dust. The minister said in the House a week ago that a new report is being prepared by the Medical School of Memorial University, and according to Sunday's edition of The Evening Telegram, the man behind that report, Dr. Patrick Parfrey, draws different interpretations from his findings than the minister does.

Now, I say to the minister, if there are hundreds of people on waiting lists for admission to nursing homes, how can there be enough beds?

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

MR. L. MATTHEWS: Thank you, Mr. Speaker.

At long last, I think I recognize the source of the hon. member's daily questions in the House by virtue of his exhibiting a copy of yesterday's Evening Telegram. I would suggest to the hon. member that there are much more in-depth pieces of work available on which he could base some serious and hard hitting questions as opposed to going to the Evening Telegram and asking those types of questions that have been prepared for him.

To the point of the question, no, the Medical School is not doing a review of long-term care beds in the system. I never said that and if I did I wish to correct it. The research unit on health matters at The Health Sciences, headed by Dr. Parfrey, has been commissioned by the department to do a review of the continuum of care needs within the Province. That involves home support services under the Enriched Needs Program, it involves the personal home care sector which provides Level 1 and low Level 2 care, and it also involves the long-term care sector which is commonly known as the nursing home sector.

Unless and until we have conclusive evidence that there are not enough beds in the system, either in total or in any specific area, we will not, as wise stewards of the taxpayers' dollars, commence to spend money that will not be, at the end of the day, the most appropriate spending. I can tell the hon. member again, that as a result of the Osborne work back in 1986-'87 when they recommended we go from 2200 to 2700 beds in the Province for long-term care, we have not only gone from 2200 to 2700 but have exceeded that by providing in excess of 3000 long-term care beds in the system today. But, having said that, if there are gaps in the system, we will seek to address them appropriately.

MR. SPEAKER: Order, please!

The hon. the Member for Ferryland, on a supplementary.

MR. SULLIVAN: Thank you, Mr. Speaker.

I say to the minister, your department is manipulating the list to appear that things are improving when they are getting worse. I have very accurate information from my source and I tell the minister now, in a meeting that he attended as minister and chaired, with three other of his colleagues, his departmental staff and maybe I will just table this, maybe I just will.

SOME HON. MEMBERS: Hear, hear!

MR. SULLIVAN: It goes on to mention in this, Minutes of a meeting that you chaired, and you are a part of in your department. And the minister of the social policy committee could not attend that meeting. He was the only absentee, I say to the minister. You have indicated there are 518 names on a waiting list in the city of St. John's, 350 of these people have also placed their names on waiting lists in other areas of the Province. It went on to say, there are 544 more names of people who are precautionary -

MR. SPEAKER: Order, please!

MR. SULLIVAN: - who may need it in the future. The minister has that.

MR. SPEAKER: Order, please!

The hon. member is on a supplementary.

MR. SULLIVAN: I ask the minister, in light of his own departmental minutes and meetings and other ministers in the social policy committee, will he now stand in his place and tell us the real truth about waiting lists for long-term care beds here in the city?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. the Minister of Health.

MR. L. MATTHEWS: Mr. Speaker, I am not necessarily scared or intimidated by the loudness of one's question. I would suggest that the hon. member probably should cool down a little bit because I don't want him to be in hospital over Christmas with high blood pressure or something of that nature. Having offered him what I consider to be a reasonable warning in the interest of his own health care, I would simply say to him again that if he has information that is contradictory or at variance with what I have given in the House, I would be happy to examine it. Having said that, I will also tell the hon. member that we have in this Province, on balance, sufficient long-term care beds to look after the needs. If in a specific area, such as St. John's, we have some specific gaps in service we will rebalance the system first of all to make use to the best extent possible of the resources we have and then we will seek to provide the resources to add additional spaces if and when we need them.

The information that I have from the community health board, who run the system and the information I have from Dr. Parfrey, who is doing the work is that we do not, nor should we at the moment, consider spending one dime on more long-term care beds until we have appropriately used the ones that are in the system by moving around the Level I's that are probably in Level II and III beds where they are not getting any better care than if they were in a personal care home. So what we are doing, Mr. Speaker, is rebalancing the system, addressing the needs in a reasonable and rational fashion and we will continue to do that.

MR. SPEAKER: Order, please!

The time for Oral Questions has elapsed.


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

MR. HEWLETT: Thank you, Mr. Speaker.

I stand today to present a small petition from seven people in my district whom I met with on the weekend and who wanted me to bring their concern before the House of Assembly and, I guess, the public in general.

The prayer of the petition is as follows: We, the undersigned, petition the hon. House of Assembly not to approve the establishment of the Indian River watershed management plan without further widespread public input and debate.

It is signed by seven people attending the meeting, Mr. Speaker. People may wonder what the Indian River watershed management plan is all about, and so did I until the matter came into the news in my district recently in some local newspaper articles, and from some phone calls I got which I responded to with the meeting on the weekend.

It would appear that a local committee of concerned people, I presume, wish to set up a regime whereby the watershed area of the Indian River and certain other rivers in that general area would come under this local committee and would have delegated to it certain authorities from the provincial Crown and the federal Crown. This is particularly as a note for, I guess, the Minister of Natural Resources, maybe the Minister of Tourism, Culture and Recreation. Because one of the aspects of a local watershed management committee is that they would have some jurisdiction over the management of the fish resource, some jurisdiction over access, use of the forest and wildlife resources in the watershed area, and some degree of management control over the establishment of tourist lodges and other such related facilities.

Local people in Green Bay who are avid salmon fishermen, anglers, are concerned that there may be undue restrictions put on their ordinary use of the watershed areas. People who enjoy the use of the woods for recreational activities, for firewood cutting, who already have summer cabins, etcetera, in the general area, are also afraid that there may be some restrictions placed on them.

I indicated in a comment in the House the other day that the establishment of a national park in the Torngat Mountains is probably the best kept secret in the Province. Certainly the establishment of the watershed management committee is one of the best kept secrets in Green Bay. The few public, very small public meetings with a dozen or two people present so far have not involved many of the general public but have raised some alarms to the point where it has gotten to the local media and where the citizens concerned have called their MHA to express their concerns.

As the sitting MHA for the area, I have had no official invitations from the group who want to manage the watershed to attend any meetings. I hope that will change in the future. My purpose in raising this here today is to put it on the public record and maybe invite the Minister of Natural Resources or the Minister of Tourism, Culture and Recreation to make a comment. Because presumably, in due course, if this plan is established, it would have to be sanctioned by the provincial Crown as well as the federal Crown. I understand there are areas elsewhere in the Province where the management concept for watershed areas is much further advanced than it is in Green Bay. I would much appreciate it if one of these ministers could make comment and maybe bring some degree of comfort to the citizens who dealt with me who are concerned that their freedoms are being infringed upon with regard to this move.

It is supposed to be a public committee, publicly elected. So far the people involved are a very small number of people, but the management authority that would be transferred ultimately to such a committee would have widespread implications for the whole citizenry in the general area. As I said, I bring this forward today as an initial move to put this into the public forum, and I would certainly invite the Minister of Natural Resources or the Minister of Tourism, Culture and Recreation to make a comment, specifically with regard to their departments' experience with this, where I understand in other areas of the Province the idea is further advanced.

Thank you, Mr. Speaker.

MR. SPEAKER: The hon. the Minister of Natural Resources.

DR. GIBBONS: Mr. Speaker, in the Province at this time, we have two areas that we have approved, as a government. One is the Indian Bay area, Bonavista North; the other is in the Bay St. George area. We have approved two as trials for community watershed management for the management of the fish resource and other resources in the watershed using local committees. These two were put in place after a significant amount of consultation in the local areas and after a lot of consultation between both governments. At this time, I am not aware that any others are about to be put in place. No others have come forward to me. There may be some local committees that are looking at some other parts of the Province where they would like to do a watershed management agreement for all the purposes just mentioned by the hon. member, but certainly, it would require the approval of the Provincial Government and also the approval of the federal department, as well, of Fisheries and Oceans, I think. So at this time I don't think anyone should have any particular concerns about it. There is no action taken in my department, at my level, at least.

Orders of the Day

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

MR. FUREY: Mr. Speaker, I move that the House do not adjourn at 5:00 p.m. today.

On motion, that the House not adjourn at 5:00 p.m.

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

MR. FUREY: Mr. Speaker, I move that the House resolve itself into a Committee of the Whole to deal with Motions 1 and 2, and I believe we will begin with Motion 2.

On motion, that the House resolve itself into Committee of the Whole, Mr. Speaker left the Chair.

Committee of the Whole

MR. CHAIRMAN (Barrett): Motion 2, the adjourned debate.


That it is expedient to bring in a measure further to amend The Local Authority Guarantee Act, 1957, to provide for the guarantee of the repayment of loans made to, and the advance of loans to certain local authorities.

MR. FUREY: Mr. Chairman, the last time we were on Supply, we adjourned Motion 2 and I think somebody from the Opposition benches was speaking at that time. It may even have been the Member for Mount Pearl.

MR. CHAIRMAN: I think you were, it doesn't matter.

MR. WINDSOR: Mr. Chairman, there is not a great deal that can be said about Bill 14. We can spend all day, if we wish, debating the wisdom, I guess, today of providing these types of funds to municipalities. Let us first of all recognize the fact, that these are exactly what the bill says, it is a local authority guarantee act. The Province guarantees loans to municipalities, and therefore, takes responsibility should municipalities forfeit on that loan.

Now, Mr. Chairman, we are finding out that this is happening ever more regularly and with the drastic reduction of the Municipal Operating Grant, I suggest to the minister he is going to find that many more municipalities are going to default on these loans in future, far more, in fact. Municipalities are finding it extremely difficult. Now, it is the age-old problem, of course, of some municipalities being quite able to finance their capital works and some are not. Generally speaking - and I say generally speaking, there are exceptions to every rule - but generally speaking, the larger municipalities, the urban centres, are able to look after their own capital debt and have not required subsidies on these loans by the minister.

Now, I understood that we were putting in place a system that provides only those municipalities that can show they can support this debt will be given financing in the future. Now, that sounds well and good, sounds reasonable, Mr. Speaker, but it does two things; first of all, it is an indirect way for government to force municipalities to increase their taxation. The argument can be made, and not an involved one, it is a valid argument that those who receive those services should indeed be able to pay for them. Well, that sounds well and good in theory, but unfortunately, in rural Newfoundland that is not always going to work. Many rural municipalities in this Province are extremely expensive to service, far too expensive, I submit, in many cases. The cost per house per capita is much, much higher than it really should be, but what are the alternatives? Do we leave these communities without adequate water and sewer systems, without fire protection? Here again becomes another dilemma. We can provide water and sewer systems in rural municipalities, as we have in many areas under the community development program of the Department of Municipal and Provincial Affairs, the local service program of installing water and sewer systems, and it is a matter of the level of the system that we are talking about here. Many of the municipalities are staggering under this debt as represented by these loans because there are cadillac systems being installed, cadillac systems that are all very well and good if one can finance them, but if you cannot then perhaps we should be looking at the level of service that is being provided in municipalities.

There are many, many examples of two neighbouring municipalities very similar in size, one of which is incorporated under the Municipalities Act and therefore, is provided loans under the Loan and Guarantee Act, puts in place a cadillac water and sewer system, the full service system, and the neighbouring community, very similar in size, very similar in tax base, but is not incorporated, therefore receives a water and sewer system installed and built and designed and managed by the Department of Municipal and Provincial Affairs, the Water Services Division. Both municipalities have water and sewage service. One municipality probably has adequate fire flow; the other probably does not. We can sit here and say: Well, every municipality should have adequate fire flow, and I certainly would agree with that, but the question is the cost versus the benefit. What is the risk of major fire in some of these municipalities?

I know of municipalities, I spoke with one colleague opposite, I believe it was, last week, who said that in the community he has lived in now for some fifty-one years, there has never been a major fire. Yet, there is millions of dollars spent on a water and sewer system - a water system particularly - that can provide adequate fire flows, a fire department that has all of the complex equipment to fight a fire, and rarely has to fight one. Now, I am not for a second downplaying the importance of fire protection, of course. It is critically important, and volunteer fire brigades all across this Province are doing invaluable service to this Province. I suggest that if the Province and the municipalities had to pay for the service provided by those people, we would have been bankrupt long before now. But in many of the rural communities, water is very, very close at hand. It may be salt water, it may be fresh water, but water is generally very close at hand, and those communities that are served by pumper units that have to rely on natural sources of supply can often provide a very adequate level of protection.

There is no question that a fully serviced water system that has adequate fire flow will provide a better level of protection, and there is always that risk that one life will be saved because of it, but at what cost is that? That is the question, and it is a dilemma, I guess, that nobody really wants to answer.

The problem with the water and sewer systems, as I started out to say, is the tremendous cost of putting in place cadillac systems, and I have said to the engineering community, my professional colleagues, many times, that they are designing cadillac systems when a far lesser system could well be adequate. Human nature is such that consulting engineers who receive a percentage -

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: Absolutely. I yield to the hon. member for -

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: The alternative, as I was just pointing out, and as members have said, I have brought this up before - first of all, I believe the engineering department should be setting standards. If a municipality comes in and says: We need a system and our consultants have estimated it is going to cost $4 million. We need $4 million. Because we have a serious pollution problem. The Minister of Environment may well step in and say: This problem needs to be dealt with, and he would encourage his colleague the Minister of Municipal and Provincial Affairs to approve that. Because of a serious pollution problem.

Now, I have to backtrack again. Many of the serious pollution problems in this Province are because of poor planning on behalf of the municipalities. They've allowed people to build homes in their back gardens right next to one another, whereas years ago wells and septic tanks were quite acceptable. Now they've allowed sons to build in the father's back garden, the front garden, the side garden, to the point where now the density of development is such that everybody is polluting everybody else's well. Okay?

The septic system may well be working okay, if it is properly installed. Too few are, because of very few controls on that, in the past. That is improving. The septic system might work. Maybe in that municipality when we have a pollution problem the problem is that the wells are being polluted. Not that there is sewage flowing over the grounds - there are cases of that - but generally speaking, it is not that there is sewage flowing over the ground, it is that everybody's wells are being polluted by their next-door neighbours's sewage system.

In that case, perhaps a simple water system to provide potable drinking water would be fine, and the septic tanks are an adequate means of disposing of sewage.

MR. LUSH: (Inaudible).

MR. WINDSOR: Not at all. I welcome....

MR. LUSH: (Inaudible) gear down from these Cadillac systems, and I don't say this in any political derogatory sense. I'm just wondering why it wasn't followed. Because I thought it was the route to go at the time. I believe it was his colleague - I don't know if he remembers - I believe Mr. Brett was the minister at the time. I thought it was a marvellous plan. It didn't seem to go through, and this government hasn't followed through with it, and I wondered why. Because I happen to agree with what the hon. member is saying.

MR. WINDSOR: Thank you, Mr. Speaker. Mr. Brett, the former Member for Trinity North, a former Minister of Municipal Affairs as well, he was very aware of this. Because there are many examples in his district. On Random Island, for example. There are a number of communities on Random Island that have been provided water and sewer systems under the water services division of the Department of Municipal Affairs. Very adequate systems at a very low cost. Those communities are still not incorporated. They are receiving water and they have a sewage disposal system. That is their concern as tax payers. If they want the Cadillac system, if they want to be on a municipal system rather than on a septic system, in these cases most of them are municipal systems.

But instead of having an eight-inch water line coming down from some lake way back up in the mountains - probably cost $2 million just to get the supply to the boundary of the community - instead of that we have drilled community wells that might serve eight or ten or twelve or fourteen, depending on the flows found in those artesian wells, with a central pump house. Then a two-inch plastic pipe buried, in some cases where we have severe rock cases; in some cases, particularly in Labrador, we have had to insulate those pipes and put heat tracers in them for winter conditions. Many things can be done rather than moving thousands of tons of rock using dynamite and burying these eight-inch pipes.

Those eight-inch pipes give you firer flow, but as I've said, in many rural municipalities you would like to have the Cadillac but you have to consider the cost. Perhaps pumper systems, as many municipalities have, provided partly by the Department of Municipal and Provincial Affairs, those types of systems, where water is in adequate supply, maybe a tanker for a quick response, these sorts of things. But fire departments can be geared to the facilities and to the water resources available. Many departments have salt water available to them all the time. Ninety per cent of their homes are built around the harbour and a simple pumper truck that can throw a hose into the harbour can provide very adequate fire protection.

It is like buying insurance. If you have a $50,000 home you don't put $5 million insurance on it. If you have two dozen houses around a community you don't spend $3 million providing a water system that will provide full fire protection. You would like to have it, everybody would like to have it, but you can't justify it. It goes back to the geography and the demographics of our Province. We have so many small communities scattered around the Province. The cost of service is incredible in a little town - I was going to name some names but I won't name any names - but in a small, rural community compared to an urban centre like St. John's or Mount Pearl or Corner Brook, the cost per capita is staggering. I have seen cases where we have installed water lines to houses that cost us $100,000 for a house, to provide water and sewer to that house and yet the assessment is done by the Department of Municipal and Provincial Affairs, the assessed value of the house is probably $25,000. Now the logic of that, Mr. Chairman, escapes me.

I don't want to talk about resettlement but, it might be better to relocate certain homes to an area of the municipality where services can be better provided, and it goes back again to planning where we allow houses to be built up, scattered along a road, ribbon development we call it; so in order to build a house, the houses have 200 and 300 feet frontage on a main highway. To service one house you have to put in 200 and 300 feet of water and sewer; don't ever think about storm drainage, it is not in the cards and probably not necessary but the cost per house, and then the house is way back up in the meadow or somewhere, probably another 150 or 200 feet away from the road, so the cost to service that unit is staggering and I would submit that in many of those cases ensuring that proper septic tanks are in place and artesian wells, if shallow wells are not adequate, could be provided at a far lesser cost, so that the municipalities are not staggered with this incredible debt and that the taxpayers therefore are not staggered, and that their monies can be used for other things in the community, for community development, for recreational facilities, for the sorts of things that people need, you know, for services, snow clearing, street lighting.

We see today many municipalities are turning off every second street light; they are being strapped so much by the debt represented by these loans, by the cutback in the municipal operating grant and the overall increased costs, Mr. Chairman, without an increased ability to raise taxes at the local level. There is only a certain ability to raise funds in the municipalities, it is only so much that taxpayers can pay and you take a municipality, many rural municipalities that might have 90 per cent unemployment, your ability to raise taxes in those municipalities is very seriously restricted.

Now I don't know, and maybe the minister can correct me, but we talked some time ago about communities which had a very high incidence of social assistance; people receiving social assistance from the Province, that the Province pay the legitimate share of taxes to the municipality for them, because we have large numbers of communities that have very high percentages of perhaps senior citizens who are on fixed incomes, who are constantly going in and many municipalities have a policy of giving certain rebates or reductions to seniors and that's well and good, but it affects the overall financial position of that municipality, and if persons are on social assistance and don't have the money to pay taxes, I am not sure if now, the policy of the Department of Social Services is to pay that for them.

There was some discussion on it and it may well now be in place; if not, it should be, because otherwise municipalities are bearing the cost. Other taxpayers, the very few of them who are probably gainfully employed in some municipalities, now will have to shoulder that additional burden and support the services that need to be provided here even the most basic level of services in those municipalities so, Mr. Chairman, I got off on tangents here, but it is so pertinent that we allow this to happen, that so many municipalities and we can look at all of these and I know I can play all kinds of political games and look at the ones that went in districts represented by members opposite and the very few that were in districts represented by members over here, but I don't want to play that game today.

I think this is a serious issue, Bill No. 14. It is a very serious issue of deciding where we should be spending very scarce dollars today. When the minister stands up as he did a week or so ago and said we have to find $60 million and he introduced some very, very painful measures to this Province in order to find it, then I think we have to rationalize our expenditure on these types of services and make sure that we are getting the maximum benefit for the very few dollars that we have available, Mr. Chairman, and that the municipalities that are being provided with these facilities, within reason, are able to pay for them, but we must also recognize that there are many municipalities in this Province that have serious problems, serious pollution problems that need to be met, serious need for potable drinking water and they have a right to those services but they may not have the financial wherewithal as a community.

The tax base may not be there to support it and the department must be there in these cases to share the burden. All of us as taxpayers at the provincial level must be there to transfer some support to these municipalities. I am concerned as I see municipal operating grants being cut and loans to municipalities to provide these services being seriously restricted to only those municipalities that can show they can afford to pay 100 per cent of it. I suspect we are getting into a state where only larger municipalities will soon be able to apply and be eligible for funding of capital services.

I point out in closing, do not forget, that the construction of those capital services is a major employer in this Province, so if a municipality can only afford half of it there is a significant benefit, at least, of providing construction activity in that area and in the Province generally. There are spin-off effects. The more we cut back on capital expenditures, be they in municipalities, in public works, public buildings, transportation, the more we cut back the more we contribute to the economic problems we have by the loss of revenues coming back indirectly from the Province, so we have to be very careful of that.

Mr. Chairman, I will stop at that for a moment.

MR. CHAIRMAN: The hon. Member for Ferryland.

MR. SULLIVAN: Thank you, Mr. Chairman.

I have a few comments I want to make regarding this particular bill, a few concerns on municipalities and comments that the minister made earlier. If you look at communities out in rural Newfoundland, and the minister made reference here in this House to a municipality in my district, where he heard on radio that they had a very low poll tax. I say to that minister if you are in an area or in a city where you have water and you have sewer, you have street lights and garbage, and you have other services, you pay in proportion to the service you have. This community does not have bus transportation around the town, it does not have water, and does not have sewer. They have lights and garbage. If they do not have rec centres to subsidize or other forms of recreation why should they pay? Why should they pay what we pay here in the City of St. John's? A municipality should pay in proportion to the value of service it is getting for the rate it charges its people in the community.

Now, that community he talked about was Cape Broyle?.

MR. REID: Do they charge for snow clearing?

MR. SULLIVAN: In Cape Broyle? No, that bill you had before the House is going to try to force it down on them. That is a new municipality that started just three years ago. The minister made reference to that community here in the House and mentioned they are only charging a poll tax of $100. You said you heard a lady on the radio from Cape Broyle that morning.

MR. REID: I might have heard a lady on the radio, but I did not say Cape Broyle.

MR. SULLIVAN: No, I said Cape Broyle, but you were referring to it, because there was only one lady who spoke that morning on that show and one that talked about the poll tax, so it was easy to identify that community I say to the minister.

The minister, in his latest round of cutbacks had a deal - and I heard the Mayor for Ferryland and Aquaforte on one morning, the same morning. They were on a previous morning, too, prior to that weekend meeting at Holiday Inn. When the new council took over in Ferryland they decided to look back at their debt. They had not met their debt obligations, and they looked at refinancing that debt to be able to make payments. They were on schedule, I say to the minister. In light of the restraints and over spending they made severe cuts within their community, then the minister came back and slapped, without notice before the end of the fiscal year, further cuts on that municipality.

He said I had a handshake, I think he said, with the minster and walked away. They lived up to their commitment and the minister and his department pulled the rug from under these people. I do not think that is playing ball. There is a municipality in my district I say to the minister, and he is very well aware of it, that has no debt whatsoever and applied for infrastructure funding for a measly $25,000 from this provincial government. Bay Bulls is that community. I do not mind saying it here in this House. They wanted $25,000 from this government, $25,000 federal level. They were willing to put up $25,000 with not one penny of long-term debt. The minister goes around this Province and talks about communities in debt. Then he throws more money into communities in debt, and a community that is paying its bills, has no debt, cannot get one cent out of an infrastructure thing, and the criteria they wrote back for selection - the minister might as well face it - the criteria for selection is very political. I think there is merit in that community. It should have been recognized. It should have obtained money under the infrastructure program. It is in good standing there. It is a growing community, a responsible municipal council there, and they were ignored by this department.

AN HON. MEMBER: Give it all to Tory districts.

MR. SULLIVAN: No, it is not. You do not have to give it all to Tory districts. I say a community in this Province that does not owe once cent of long-term debt deserves to be congratulated, and they deserve a pat on the back. That is what I say to the minister, and they should have the common courtesy... They wanted to have a meeting, and do you know what the minister's department said? The minister said, when they called for a meeting with the minister: I don't see any point, the decision is made. There is no point in meeting with you.

That is what the minister said. That is what the minister stated. I don't think that is good enough. Still, we can turn around months later, the past few months, and we can go into Cabinet, the same minister, and he can sit around and give an okay to this government to spend $7.2 million on water bombers, and they are using the reason they are fifty years old. When the Budget came down in March they were 49.5 years old, and another half year and they decide we have to go spend $7.2 million, and you are turning down communities that wanted $25,000 of provincial dollars. It is not acceptable.

You look at Cabot, Marble Mountain another $9.2 million according to warrants I had a look at when they were tabled here in this House -

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: No, I am not against it yet. If I go skiing I will probably be against it.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: No, I think it is a fine facility, but I don't think you should sit around the Cabinet table in August and approve special warrants when you are cutting $60 million a few months later out of the expenditure of this Province. I don't think that is responsible. If you budgeted for it last spring and you build it into your budget that is fair game, but it is not fair game to take $26.2 million in special warrants and then come looking for $60 million a couple of weeks after. It is not playing the game. What did they do with water bombers. Did they do that, too, on water bombers? Did they do it with - I know the SRDA one you probably mentioned. Sure, if we are getting money we take advantage of it, but there is no excuse in other items.

AN HON. MEMBER: Marble is okay (inaudible).

MR. SULLIVAN: No, I didn't say Marble is okay, not at all. I think we have to rationalize -

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: No, I would have to see exactly the lay out that the federal government proposed, whether the provincial was inefficient in dealing with it at the time. I would have to look at other factors around the situation before I could draw an informed decision, but I can tell you one thing: There is no federal attachment. A decision to buy water bombers was an improper decision (inaudible).

AN HON. MEMBER: How about Governor's Park?

MR. SULLIVAN: What about what?

AN HON. MEMBER: What about Governor's Park?

MR. SULLIVAN: I don't care who does it, whether it is the PC government or Liberal government; I don't agree with wasting money that the taxpayers pay into this Province in retail sales tax or income tax, tobacco tax, or whatever it happens to be. I don't agree with the waste of money, period. If you have money to throw around, cut your expenses, do it in an efficient manner, give it to charities, do whatever you have to do, but don't waste it, I say to the government; don't waste money. They have not used very much common sense.

I don't see sidewalks, I say to the minister, up in Cape Broyle, and I don't see recreation facilities, and I don't see bus transportation going around the community, and I don't see -

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: The minister complains because they have a low poll tax. I would say, granted, if the community of Cape Broyle, and they are operating, I say to the minister - to my knowledge the community of Cape Broyle has no long-term debt. They have no long-term debt, and they made a decision against their council. Council voted to accept a $500,000 water system, and the people of the community, 90 per cent, said: No, we don't want to mortgage our future. We want to be responsible and not spend money we may not be able to pay. And the minister complains because they have low poll tax. The minister wants them to get water and get sewer, increase poll tax, property tax, get bus transportation, increase that, get rec centres, increase their poll tax. If the people only want a low poll tax, and want a low level of service, leave them be; don't force them into it and compare. When you compare poll tax and property tax you should compare the level of service you get for that tax dollar, that is what should be done. Why force a big infrastructure on a community that in the future might have to resettle because of the policies of this government? They might have to resettle the community.

We have a declining population in that area of my district. We know other areas of this Province that have a declining population away from urban growth centres. Why put them in a position whereby in the future the few remaining people are going to have to bear a higher cost or the government is going to have to pick up the bill down the road? There is no need of it, it should not be done, it should be prudent management. They have no debt, Bay Bulls had no debt. They could not get funds out of this government in there for a few measly $25,000 out of $48 million. They could not get $25,000. In a responsible, growing community of 1,200 people, an efficiently run town, I say to the Member for St. John's South, the Minister of Employment and Labour Relations passes up through there now and then and he is familiar with what I am talking about there. I think it is a well run community. I don't have anything to indicate otherwise. In fact, lots of information to indicate it is. I am sure the minister is aware of that and why -

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Good, good, I am glad.

Here we are making decisions that are not responsible and we are making decisions that are going to further encumber the building, people in this Province to pay and this government by a lack of planning and a lack of foresight.

In UI changes we seen, I say to the minister who just spoke there, UI changes is further putting a damper on activities in rural Newfoundland. It is further going to put great pressures on people to be able to continue to reside in rural Newfoundland. We should be looking at ways that are going to be able to make rural Newfoundland viable to be able to maintain a fair population base in line with their taxation and not being able to try to tell them more services and force up taxes. We should be taking responsible action there and I have not seen it in certain incidents there. In certain instances there are of course and they do compliment the government. They make decisions in areas - they have made decisions I think outside my district in expenditures too that I support and I agree with them. I don't care whether you refer to -whether it was Brian Peckford, Joey Smallwood or the current Premier, it does not make any difference. Decisions should be based on their merits, not based on who makes the decision. So you can get political on those issues.

There has been tremendous downloading on municipalities. They blame it on the federal government, you can blame it on who you like. The federal government did not change things in mid-stream. This government has changed in mid-stream from the first year I came in this House they made a change in June, right early in the fiscal year and downloaded. They have capped funding now. It is going to be down to $30 million after the next fiscal year and municipalities are in a dilemma. What happened several years ago, five or six years ago, municipalities took over roads. They took over extra roads.

AN HON. MEMBER: Sullivan, there must be a plan there, what's the plan?

MR. SULLIVAN: They took over extra roads. We know what the plan is, they took over roads. The community of Renews and Cappahayden took over little lanes, we will call them, practically lanes but you can meet a car there because the government is ready to get rid of them, give them $2,000 a kilometre to maintain those and $1,000 for snow clearing and $1,000 for summer up-keep when they have all those roads in other communities. Then they decided we are going to cap municipal spending. We are going to cap it which meant the roads component two years ago actually disappeared just about, it went down from $2,000 to $1,200. It went down to $400-and-some and when government realized the problem they had - last year this government realized the problem that was in rural Newfoundland, they decided to shift that. We could not eliminate the roads component because rural areas are spread out so far they would never collect enough taxes to be able to just maintain a road so they threw component back in. Well what has happened right now with the capping going down $4.1 million I think it is, another $7 point some million next year. I think almost $11.9 million in total, we will be down just under $30 million now from what was almost $50 million. Municipalities cannot cope, their betting on long term decisions. They have roads, they cannot pull them up, fold them up and put them away anymore and they cannot afford to maintain them.

Rural Newfoundland is going off to Alberta, Northwest Territories and all over the country, out of the Province. Rural Newfoundland is dwindling. The ability of the people to maintain the infrastructure in those communities is not there anymore. There is a certain thing - this government has to do something about it. They have to look at the situation that they created here, our economic situation. The Premier stated, a very interesting comment I heard yesterday and it is alarming, he said we should not be focusing on constitution. We should deal with the social and the economic problems facing this Province. Anybody else to talk about putting his priorities and deal with social and economic problems of a province and not be worried with the Constitution of the country. The Premier, after going on a frantic mission across Canada for three years talking Constitution for breakfast, for lunch and for dinner, day after day, tours all over the country. Constitution. That was his Bible, that is all he talked about. He ignored the fiscal and social agendas of the Province and now he talks about: We should be looking at social and economic things, the Premier of the Province not dealing with Constitution.

Now that is a pile of malarkey. The Premier, more so than anybody else, he is least qualified to talk about dealing with Constitution matters and focus on social and economic. It is about time I say the Premier woke up, after almost seven years, it is about time he woke up and smelt the coffee and looked at the problems in this Province. People don't care about the Constitution. They told him that on the Charlottetown Accord, they told him that over and over again.

People in this Province are concerned about putting food on the table, having a job and earning an income, and being able to get up in the morning with a bit of dignity and go to work and bring home a pay cheque, and to feed the family and be able to survive. They don't care whether we are in Canada, they don't care whether Quebec is in or out. Most people in this Province, they want to be able to live from day to day and wonder where their next cent comes from. Those are the issues that we have to deal with here and the problems and concerns there. We are spending too much time debating and discussing things that are not relevant to the ordinary individual Newfoundlander and Labradorian. That is something we have to get back on track and we have to deal with some of those things. Thank you, Mr. Chairman.

Motion, that the Committee report having passed the resolution and a bill consequent thereto, carried.

MR. FUREY: Mr. Chairman, Motion No. 1, Bill No. 13.

MR. CHAIRMAN: Motion No. 1, Bill No. 13, An Act To Amend The Loan And Guarantee Act, 1957.


"That it is expedient to bring in a measure further to amend The Loan And Guarantee Act, 1957, to provide for the advance of loans to and the guarantee of the repayment of bonds or debentures issued by or loans advanced to certain corporations."

Motion, that the Committee report having passed the resolution and a bill consequent thereto, carried.

MR. FUREY: Mr. Chairman, I move that the Committee rise, report progress and ask leave to sit again.

On motion, that the Committee rise, report progress and ask leave to sit again, Mr. Speaker returned to the Chair.

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

MR. BARRETT: Mr. Speaker, the Committee of the Whole on Supply have considered the matters to them referred, have directed me to report having passed certain resolutions, and recommends that Bill Nos. 13 and 14 be given approval to effect same, and ask leave to sit again.

On motion, report received and adopted.

On motion, the following bills read a first, second and third time, ordered passed and their titles be as on the Order Paper.

A bill, "An Act To Amend The Local Authority Guarantee Act, 1957." (Bill No. 14)

A bill, "An Act To Amend The Loan And Guarantee Act, 1957." (Bill No. 13)


MR. SPEAKER: Motion 4, the hon. the Minister of Finance and Treasury Board.

MR. DICKS: Thank you, Mr. Speaker.

I have received a message from His Honour, the Lieutenant-Governor.

MR. SPEAKER: All rise, please.

The hon. the Minister of Finance and Treasury Board:

"I, the Lieutenant-Governor of the Province of Newfoundland, transmit Estimates of sums required for the Public Service of the Province for the year ending March 31, 1995. By the way of Supplementary Supply and in accordance with the provisions of the Constitution Act, 1867, I recommend these estimates to the House of Assembly."


Frederick W. Russell, Lieutenant-Governor

MR. SPEAKER: The hon. the Minister of Finance and Treasury Board.

MR. DICKS: Mr. Speaker, I move that the message together with the amount be referred to the Committee of Supply.

MR. SPEAKER: It is moved and seconded that the message together with the amounts be referred to the Committee of Supply

Motion, carried.

On motion, that the House resolve itself into Committee of the Whole, Mr. Speaker left the Chair.

Committee of the Whole On Supply

MR. CHAIRMAN (M.Penney): Order, please!

Bill 37, the hon. the Minister of Finance and Treasury Board.

MR. DICKS: Thank you, Mr. Chairman.

This is the normal supplementary supply bill for the last fiscal year that comes in to clean up the details at the end of the year. It 's in the amount of $67,854,800 and it covers the period from April 1, 1994 to March 31, 1995 and this defrays the additional charges and expenses of the Public Service of Newfoundland as set out in the schedule. The amounts are set forth on the back of the bill which I think are straightforward. The main expenditure there is, or the largest one I should say, is that of Social Services in the amount of $27 million.

Having said that, Mr. Chairman, it is notable that last year when the accounts were tallied up at the end of the year, the deficit, capital and current, was in the amount of $120 million as opposed to the $190 million, $189 million that had originally been forecast, so notwithstanding that it was a matter of Supplementary Supply in the year, the Province's performance improved substantially from Budget time forward.

Thank you, Mr. Chairman, that's all I have to say with regard to the bill.

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

MR. WINDSOR: Thank you, Mr. Chairman.

What this is, is once again proof of the government's total failure to manage the financial resources of the Province. It's again, another $60 million in Special Warrants issued for the last fiscal year and this whole process of course, is the most foolish process in the House of Assembly.

This is for money that was spent in the fiscal year, 1994-'95. We are now in to '95-'96 and in fact we are three-quarters of the way through '95-'96, and we are now being asked to approve $60 million basically in Special Warrants that were tabled here during the fiscal year 1994-'95, and once again, Mr. Chairman, all it does is highlight the inability of this government to properly manage or otherwise the unwillingness of this government to be forthright in their Budget documents at the beginning of the year.

As I recall that year, as we have said ever year and every year we have been right, the Budgets have not been truthful documents, have not been an honest reflection of what one could expect to see during the course of the year, social services, we have been $27 million off. Now, Mr. Chairman, there is no justification for any government to miscalculate the requirements under social services by $27 million.

No one can say well, things happen. You didn't have $27 million worth of things happen that could not have been foreseen. Expenditures could have been foreseen, should have been budgeted properly at Budget time, instead of having to come in with Special Warrants partway through the year.

The Department of Works, Services and Transportation, $17 million. I believe that particular year, without going back over my notes on that Budget, I believe that year there was a tremendous cutback in the funding for snow clearing. The minister said: Well, we don't know if we are going to have any snow this winter. So we will put money in there. They did the same thing in forestry, actually. Cut back drastically on funds for forest fire fighting that year. They said: We probably won't have any forest fires, and if we do then we will have to come up with the money, but by special warrants.

That is not good, responsible financial management. You have a reasonable expectation that you are going to have snow in this Province. Anybody who would tell you that you probably won't have snow in Newfoundland doesn't deserve to be a minister of the Crown. You certainly have a reasonable expectation that there are going to be forest fires, albeit, not quite as secure as knowing there is going to be snow in the Province. Not quite as sure.

But in this case we cut back on services that we knew we were going to have to provide. It just wasn't an honest document, and this is the proof of the pudding. We saw it again this year. We told government that its Budget last year of a $2 million surplus was not a realistic document. We told them there was going to be a deficit. Two months ago I asked questions in this House to the minister: Is it true that we are now facing a $50 million deficit? Two weeks later he had to confirm that there was a $60 million problem that he had to deal with, and he had to come in with his ministerial statement to try to deal with it.

All this is here is an admission of failure on behalf of government to properly budget, to properly foresee the expenditures that are going to be incurred during the year, and not being honest with the people of this Province in its Budget document, in putting forward a document that it knew it could rely on and that was reasonably accurate and reasonably close to what would be expected during the course of the year. Thank you, Mr. Chairman.

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

MR. W. MATTHEWS: Thank you very much, Mr. Chairman. My colleague for Mount Pearl said most of what needs to be said about this. But I was just curious, with some of the ministers (inaudible), I was just wondering what basically the expenditures were for in their respective departments. Snow clearing is pretty straightforward, $17 million or so, Department of Works, Services and Transportation.

I'm just wondering. Industry, Trade and Technology. I see the minister is not here. I just wondered what that $3 million was for. It is not outlined here, I don't think. It doesn't outline here what the expenditure was for, I say to my colleague for Mount Pearl. I don't know if he can tell me or not. I would like for someone to be able to tell me.

MR. WINDSOR: I have some of them here.

MR. W. MATTHEWS: What is that?

MR. WINDSOR: I have some of them.

MR. W. MATTHEWS: Yes, $3,081,700, Industry, Trade and Technology. I wonder what that was all about. Was that for the Economic Recovery Commission or Enterprise Newfoundland and Labrador? I'm wondering what that was about. Money that wasn't budgeted.

MR. MACKEY: Two hundred days in the Far East.

MR. W. MATTHEWS: Two hundred days in the Far East, my colleague for Grand Falls says. I doubt if it would cost them that much, $3 million. It would cost them a fair bit. We know he is an expensive minister but I doubt if it would cost him that much. I'm just wondering if someone in the Ministry could answer, if the Minister of Finance and Treasury Board could tell us what specifically this was about. What the expenditure was for, Industry, Trade and Technology, $3,081,000. I wonder would the Minister of Finance and Treasury Board know what caused that department to spend that much money above and beyond what was budgeted for that we have then to deal with special warrants. I wonder (inaudible).

AN HON. MEMBER: (Inaudible) social services.

MR. W. MATTHEWS: Yes, Social Services, that is $27 million. Social assistance, allowance and assistance, $19 million. Home support $6 million, child welfare $1.6 million. I'm just wondering what the Industry, Trade and Technology was.

The other interesting one was the Department of Tourism, Culture and Recreation for $960,000. I'm wondering what that was about. I wonder if the Minister of Finance and Treasury Board could tell us what that was for. Was that for Cabot, that infamous Cabot Corporation, or Caboto Corporation, or defunct Cabot - oh, the minister is in another seat! Sorry, I didn't see the minister. I wonder if the Minister of Tourism, Culture and Recreation, with his nice bright Christmas tie on there, I'm just wondering, was it to buy ties for the minister, I wonder, Christmas ties, so he can give them out as he travels around the world now, is that what it was for? Could the minister -

AN HON. MEMBER: (Inaudible) we don't do that, do we?

MR. W. MATTHEWS: Do we? No, no. Listen to the Minister of Education and Training

I was just wondering if it was to buy Christmas ties for the minister to give out as he travels around the world now? Is that what it was for?


MR. W. MATTHEWS: The Minister of Education and Training, the hon. Chris Decker, could not attend. The hon. Chris Decker was absent from the big health meeting, the special committee on health. He could not attend. In attendance the hon. Lloyd Matthews, Chairman, hon. Kay Young, Minister of Social Services, Edsel Bonnell, Dr. R. Williams, Brenda Fitzgerald, and on and on it goes. There was a good crowd but hon. Chris Decker could not attend. I do not know where he was. Was he in Calgary?

I say to the minister that I remember the OHMS. That is better than OT when you work with the unions. Like the guy said down in the transportation depot in Grand Bank, that good old TO. I do not know if he is still there or not. Is this it?

AN HON. MEMBER: Yes, that's industry, trade and technology.

MR. W. MATTHEWS: Well, an educated guess, Enterprise Newfoundland and Labrador Corporation, $3,036,700, and that infamous Economic Recovery Commission $45,000. What did they come up with now that they had to get extra money for? What was that about, Enterprise Newfoundland and Labrador and the Economic Recovery Commission? When are we going to see that Economic Recovery Commission abolished, I say to the Minister of Finance?

The Minister of Finance and Treasury Board, the Minister of Education and Training, the Minister of Environment, the Minister of Health, the Minister of Natural Resources, and the Minister of Employment and Labour Relations, when are you going to have the intestinal fortitude to abolish that so-called Economic Recovery Commission? There has been no economic recovery or no economic discovery by the Economic Recovery Commission. What was it the Chairman said? Get wool and go knitting, wasn't it? Buy balls of yarn. The economy of the Province depends on knitting.

MR. SULLIVAN: Are they going to knit their way out of the recession? Is that it?

MR. W. MATTHEWS: Yes, that is what someone said. We are going to knit our way out of the recession.

Mr. Chairman, when I was here listening and somebody mentioned knitting I thought to myself, well, Dr. House has been pulling the wool over the government's eyes now for I do not know how many years. Imagine the Member for Gander has been here six years, six years too long I say to him, six years of big pay and big expenditures. Still the Minister of Finance could push 400 or 500 through the door just a couple of weeks ago. He showed them the door yet he keeps the Economic Recovery Commission and Enterprise Newfoundland and Labrador. He keeps them there and puts very good, productive, hard working people out the door. It is unbelievable, Mr. Chairman.

Once I got on to the Minister of Tourism, Culture and Recreation he left. He did not want me to pursue the ties too much, $960,000. I said two or three times and I had hoped he was here but wasn't in his seat. He tried to hide away over there behind the Minister of Employment and Labour Relations which is not very difficult to do, to hide away behind the Minister of Employment and Labour Relations. I thought he would come back and answer the question, why he needed $960,000 in a special warrant in the fiscal year before last? What did they spend it on? Was it trips to Bristol? Was it wine and cheese parties? Was that what it was? Was it entertainment?

I saw in some statements here, there must have been some wild parties because of the amount of money that was spent on some of them, thousands of dollars for entertainment. It is pretty broad ranging, too, that entertainment. Almost as broad as, what is it, OHMS, entertainment. It covers almost as much as OHMS. On Her Majesty's Service, I say to the Member for Placentia. When you put that up on the claim, reason for trip or reason for claim, OHMS, now I can tell you that covers just about everything, On Her Majesty's Service.

AN HON. MEMBER: (Inaudible).

MR. W. MATTHEWS: No, I say to members, it is pretty serious stuff when you see that OHMS.

MR. WOODFORD: Electrical resistance.

MR. W. MATTHEWS: Yes, there is a lot of resistance to some of the things that are covered under OHMS, I say to my colleague from Humber Valley. There is a lot of resistance to a lot of things that are claimed and documented under OHMS, I guarantee you that. I would like to see now the Minister of Tourism, Culture and Recreation claims under OHMS and the Minister of Industry, Trade and Technology and even the Minister of Finance himself. Even the Minister of Finance, I would like to see now what comes in under OHMS.

I want to say to my good friend the Minister of Education, I want to welcome him back after a long jaunt across the country on OHMS. It must be tiring. He must be suffering from jet lag. Yes, it is tiring and those boring conferences. I want to welcome him back from Her Majesty's service. It must be quite an honour to go across the country -

MR. DECKER: (Inaudible).

MR. W. MATTHEWS: I know that but I got to tell the minister we were here sometime Friday afternoon and the Premier came back. I was winding up my few remarks on the most recent Hydro bill and I don't know how it came up but anyway a lot of Cabinet ministers were gone, so I said to the Premier: Sir, half the Cabinet is in Ottawa. He looked at the Government House Leader and he said: What's going on in Ottawa? I said well let me tell you what's going on in Ottawa. I said the Minister of Finance is in Ottawa, the Minister of Industry, Trade and Technology is in Ottawa and I said the Minister of Education stopped at Ottawa on his way back from Calgary. He said, is that right Ed? Ed did not say too much. It was almost like he was trying to settle him down because he knew there was something twigged with the Premier once he knew that the three of them were up there with Mr. Tobin. The three of them were up in a big meeting with Mr. Tobin in Ottawa. That is what really spooked the Premier is when he found out.

AN HON. MEMBER: (Inaudible).

MR. W. MATTHEWS: He is gone to Ottawa. It is what they call a late declaration of allegiance.

AN HON. MEMBER: He is gone up to put a word in for the Premier.

MR. W. MATTHEWS: Well, that would not surprise me.

AN HON. MEMBER: (Inaudible) coming across the House (inaudible).

MR. W. MATTHEWS: Coming across there? Is that before Tobin comes back or after he comes back?

MS VERGE: Tobin is in Marystown, isn't he?

MR. W. MATTHEWS: But the real Tobin, the number one Tobin is in Marystown.

AN HON. MEMBER: (Inaudible).

MR. W. MATTHEWS: Yes, but the other Tobin, that fellow that the minister dropped in on, on the way back.

AN HON. MEMBER: (Inaudible).

MR. W. MATTHEWS: Yes, they mixed up their first names, is it? The last name was correct but they mixed up their first names, it was Glenn Tobin. Yes, that is what it was.

Anyway, I wonder if the Minister of Education would tell us how the meeting went? Perhaps he could tell us how the meeting went in Ottawa. Who is the candidate going to be? I think that is the big thing we have to determine here. Is it going to be the Minister of Finance or is it going to be the federal Minister of Fisheries? Now that is the big dilemma. Who is going to roll over for the other one?

AN HON. MEMBER: It doesn't matter, either one of them is capable.

MR. W. MATTHEWS: Well, you know I don't know about that. I don't have much faith in either one of them. I say to the Minister of Education, I don't have any faith in either one of them but I wonder what is really going to happen? Word is now, Mr. B. Tobin is in for a promotion in Ottawa I hear but then on the other side I am hearing he is not a favourite with the Prime Minister. He got his knuckles rapped up there. Oh, he stormed out of the Prime Minister's office, big kerfuffle, big racket.

AN HON. MEMBER: (Inaudible).

MR. W. MATTHEWS: Oh, I cannot tell the minister everything. I am just -

MR. DECKER: (Inaudible).

MR. W. MATTHEWS: No, I'm sure he didn't. No he only tells you the other stuff. He does not want to tell the Minister of Education the real reason why he is thinking of coming back because his days are done in Ottawa. He does not tell it all. He is trying to put himself up on the big plateau. I could tell the minister a few things, if he really wants to meet in private.

AN HON. MEMBER: (Inaudible).

MR. W. MATTHEWS: You did. You were part of it.

MR. SULLIVAN: Brian wanted to arrest another boat. He said: No, Brian, we gave everything back that time. We cannot arrest another one; we gave them that and more besides.

MR. W. MATTHEWS: Yes, it didn't go over too big. There are interesting things going on.

It was an interesting meeting, though, when you think of it, in Ottawa, between the Minister of Finance and the Minister of Industry, Trade and Technology, and Mr. Tobin, an interesting little meeting, and then a little drop in by the Minister of Education on the way back. Think about it.

AN HON. MEMBER: Who are you going to support?

MR. W. MATTHEWS: Who am I going to support?

AN HON. MEMBER: (Inaudible).

MR. W. MATTHEWS: Oh, they are working it out.

MR. SULLIVAN: Roger is worried. He doesn't spend much time in the House (inaudible).

MR. W. MATTHEWS: No, Roger is worried. I think that is why he bought the ties.

AN HON. MEMBER: (Inaudible) back on December 24th.

MR. W. MATTHEWS: Yes, I would say he is, too, coming back for Christmas, I would suggest.

AN HON. MEMBER: (Inaudible).

MR. W. MATTHEWS: Coming back in the manger? That wouldn't surprise me. There is not enough room in the manger for two, I say to the Minister of Education. There can only be one get in the manger.

AN HON. MEMBER: Bill, they are going to give it a hard try.

MR. W. MATTHEWS: To get two of them in the manger? I think the Minister of Education is taking it wrong. I think he has to get one out of the manger before he can get the other one in. A couple of crowbars for Christmas and you might pry one fellow out of the manger and get the other fellow back in.

AN HON. MEMBER: (Inaudible).


It is good to see the Minister of Employment and Labour Relations back. I was wondering why the Minister of Tourism ran away when I got after his $960,000 expenditure. He was hiding away behind the minister for awhile, but I wonder if he could find his brother-in-law and bring him back here so he can answer to the people.

AN HON. MEMBER: (Inaudible).

MR. W. MATTHEWS: $960,000; I wanted him to answer why he needed it and what he spent it on.

AN HON. MEMBER: He took Joe Bennett to dinner.

MR. W. MATTHEWS: No, he didn't take Joe Bennett to dinner. If he did, it was to tell him he's fired, I say to the Member for St. Mary's - The Capes, is it, who said that to me.

MR. SULLIVAN: Joe said: Bring your severance cheque with you.

MR. W. MATTHEWS: Yes, that is another story, the way they handled all of that. That is a story for another day, the way that was handled, too. That is another story, the way they handled that.

AN HON. MEMBER: (Inaudible).

MR. W. MATTHEWS: Well, there was a group of them came in and met the Premier on the 13th of June, I believe it was, and went through the whole proposal and the whole package, got their blessing, and then a month or so after the Minister of Tourism, Culture and Recreation called the Chairman of Cabot, Mr. Ayre, and told him they had to fire Mr. Bennett.

AN HON. MEMBER: (Inaudible).

MR. W. MATTHEWS: Listen now. That is true. That is what happened, by the way. They went up and met with the Premier on the 13th of June, up in the Premier's office.

AN HON. MEMBER: (Inaudible).

MR. W. MATTHEWS: The group of people, led by Mr. Ayre, met with him. Everything was okay, and then a month or so after a directive came from the Cabinet then, had to be fired. The minister had to call Mr. Ayre and tell him that. Here he comes now. I got him back in. I knew I would get him back in.

AN HON. MEMBER: That is Sonny Bono.

MR. W. MATTHEWS: Sonny Bono, yes; the only thing he is missing is Cher.

AN HON. MEMBER: His Snoopy tie.

MR. W. MATTHEWS: Is that a Sonny Bono tie, I wonder?

AN HON. MEMBER: No, it is Snoopy.

MR. W. MATTHEWS: Anyway, he called Mr. Ayre and said: Cabinet has directed me to call you and tell you that you have to get rid of Mr. Bennett.

AN HON. MEMBER: (Inaudible).

MR. W. MATTHEWS: Oh, well, I am not sure when that happened. All I can say is that the group met with the Premier on the 13th of June, I say to the minister. Then, a short while after that the word came down that Mr. Bennett had to go, and the board refused. The board refused, the minister knows. The board refused, so we are not doing it, Roger.

Then, in a meeting with the minister and the Premier, Mr. Ayre and others, when it was brought up, the Premier almost said: Where did that come from, Roger, that we had to fire Joe Bennett? He said: It came from a directive of Cabinet, Mr. Premier. And the Premier didn't acknowledge it any more, Sir, than the snow on the roof of this building. He just kept on talking, did not acknowledge it at all, didn't even acknowledge it, embarrassed the poor minister, embarrassed everyone else there, as if it was not a fact of life. He didn't even acknowledge it. Now, that is the kind of outfit they are running. That is how they deal with people. Is there any wonder why the Minister of Tourism, Culture and Recreation wanted $960,000? Could the Minister of Tourism, Culture and Recreation tell us why he needed that $960,000, where it went? He is confirming it now with his colleagues. He is telling his colleagues what really happened, now, he is acknowledging that I am right. He is saying: that is right, every word he is saying is true, he is telling his buddies now and they say: That is not right, is it `Roger'? It is right, that is the story, the true story - the minister knows it is true.

Now, can the minister tell me why he needed $960,000, I am asking, by Special Warrant, where did it go? Is he going to answer, I ask the minister?

AN HON. MEMBER: You will have to wait (inaudible) by and by.

MR. W. MATTHEWS: In due course. That could keep the museum open in Grand Bank.

AN HON. MEMBER: Now, (inaudible).

MR. W. MATTHEWS: What do you mean now, now. It could keep the museum open. You cannot get any answers from people opposite, Mr. Chairman, and I am getting frustrated. We ask very specific pointed questions about expenditures and we can't get an answer. That is what they have done to the people of the Province, they have broken their backs, they cause people to give up, quit, and they are trying to treat us - but we have enough fight and we are not going to let them do that to us, Mr. Chairman, we are going to keep fighting and probing until we get the answers.

When are they going to abolish the Economic Recovery Commission, I ask the Minister of Industry, Trade and Technology; $3 million in Special Warrants, so what was the expenditure for, I ask him. Can that minister give me an answer, the most capable minister over there, can he give me an answer? The most competent minister over there, Minister of Industry, Trade and Technology, the most competent person in the front benches over there, can he give me an answer?

AN HON. MEMBER: The most forthcoming.

MR. W. MATTHEWS: He is usually the most forthcoming as well. Now, the Minister of Tourism, Culture and Recreation is usually the most forthcoming but is forthcoming with nothing, but the Minister of Industry, Trade and Technology, when he speaks, I must say -

MS VERGE: He gives some information.

MR. W. MATTHEWS: He does give information and that is why now I know he is reluctant to get up, because he doesn't want to tell me why Industry, Trade and Technology wanted $3 million. Now he is telling the Minister of Industry, Trade and Technology how I revealed the story about the meeting in Ottawa. He is confirming the meeting now, he is telling him what Matthews knows about our meeting in Ottawa with Tobin, the same as the Minister of Tourism, Culture and Recreation had to confirm it with the Minister of Natural Resources and the Minister of Municipal and Provincial Affairs about the meeting with the Premier and Miller Ayre. You would almost think, Mr. Chairman, that I was in the Cabinet with them.

You know how he goes, he is getting that close now because he wants to overhear what `Chuck' and `Paul' were talking about the leadership and how it went with Brian Tobin because he knows he is a contender, Mr. Chairman, now he is moving down with his left ear cocked, what's going on? What kind of a pact, what kind of a deal is there being cooked up? I can see what is going on, Mr. Chairman. The Minister of Tourism, Culture and Recreation doesn't take that too lightly, he is not smiling now when he sees the forces that are coming up against him. He doesn't take it too kindly, he is not happy about that, the Minister of Tourism, Culture and Recreation; he didn't mind me talking about Miller Ayre, the Premier and all those people, but once you mention the old leadership, he got right bitter then, you could see - they are all coming in now. You have them coming out of the woodwork.

AN HON. MEMBER: Look what he spent?

MR. W. MATTHEWS: No, he did not spend - $17 million, the Minister of Works, Services and Transportation -

AN HON. MEMBER: For what?

MR. W. MATTHEWS: That's what I am trying to find out, for what? It wasn't salt, I say to the minister, there is one thing I know, it wasn't salt. No, no, salt.

AN HON. MEMBER: For recipe books.

MR. W. MATTHEWS: Yes, it could be recipe books.

MR. EFFORD: (Inaudible) for $17 million (inaudible).

MR. W. MATTHEWS: No, $17 million you want a Special Warrant for that wasn't budgeted.


MR. W. MATTHEWS: Oh yes. You can't get any answers.

AN HON. MEMBER: Twenty-four new trucks.

MR. W. MATTHEWS: Twenty-four new trucks, I don't know where they are then, they must be still in the garage somewhere; mid-morning this morning before you saw anything on the way in. The Member for Mount Pearl came in this morning, drove the highway, Trans-Canada, mid-morning before he saw anything again.

MR. WINDSOR: The first truck I saw was in Terra Nova Park, the federal park.

MR. EFFORD: (Inaudible) you would (inaudible).

MR. W. MATTHEWS: Now, now, now, I say to the minister, don't be nasty, don't be nasty now. The minister knows he shouldn't behave like that, it will come back to haunt him.

MR. EFFORD: (Inaudible).

MR. W. MATTHEWS: The minister should not brag about that either, I say to him. You should not be like that, Minister, because one of these days it is going to come back and haunt you big time. You say it too often and you are going to get caught one of these days.

MR. EFFORD: (Inaudible) on both sides of the Trans-Canada.

MR. W. MATTHEWS: And they are both sides of where you were. They are on both sides of the one lane of the divided highway before the minister came in, on both sides of the lane the minister came in on. The minister did not hear that.


MR. W. MATTHEWS: They were on both sides of the lane you came in on, but not in the other lane going out. They were all coming in. They had that cleared up for you. Two lanes were perfect for you and then the other two lanes for traffic going the other way never saw a truck. There is nothing being done.

MR. WINDSOR: Nothing in Central Newfoundland.

MR. W. MATTHEWS: Nothing anywhere. Anyway, I cannot get any answers. There is no one over there going to give an answer. The Minister of Tourism, Culture and Recreation is not going to answer, the Minister of Finance and Treasury Board will not answer, the Minister of Industry, Trade and Technology will not answer, the Minister of Works, Services and Transportation will not answer, so I will quit.

That it is expedient to introduce a measure to provide for the granting to Her Majesty for defraying certain additional expenses of the Public Service for the financial year ending March 31, 1995 the sum of $57,854,800.

Motion, that the Committee report having passed the resolution and a bill consequent thereto, carried.

On motion, that the Committee rise, report progress and ask leave to sit again, Mr. Speaker returned to the Chair.

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

MR. PENNEY: Mr. Speaker, the Committee of Supply have considered the matters to them referred and have directed me to report that they have adopted a certain resolution and recommend that Bill 37 be introduced to give effect to the same.

On motion, report received and adopted.

On motion, resolution read a first and second time.

A bill, "An Act For Granting To Her Majesty Certain Sums Of Money For Defraying Certain Additional Expenses Of The Public Service For The Financial Year Ending March 31, 1995 And For Other Purposes Relating To The Public Service." (Bill No. 37)

On motion Bill No. 37 read a first, second and third time, ordered passed and its title be as on the Order Paper.

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

MR. FUREY: Mr. Speaker, we are making considerable progress. We have four bills we would like to complete second reading on before we conclude today.

MR. W. MATTHEWS: Four? Chuck Roberts!

SOME HON. MEMBERS: Hear, hear!

MR. FUREY: I don't mind the laughter from that side of me.

Mr. Speaker, the first one will be Bill 44, Order 35, dealing with pensions, the Minister of Finance.

Motion, second reading of a bill, "An Act To Amend The Pension Benefits Act (No. 2)". (Bill No. 44).

MR. SPEAKER: The hon. the Minister of Finance and Treasury Board.

MR. DICKS: Thank you, Mr. Speaker.

This is a fairly straightforward amendment to the Pension Benefits Act. What it does is, it adds subsection 1 to section 28 to allow the Pension Benefits Act to apply to the public service or public sector pension plans. It also provides, as a new subsection 2, that regulations made pursuant to subsection 1 would apply retroactively. So, Mr. Speaker, the sole effect of this, as my friend, the Member for St. Mary's - The Capes knows, is to propose a minor amendment to the act to include generally the public service pension benefits plans and to permit regulations to be made.

Thank you, Mr. Speaker.

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


MR. WINDSOR: Order, Mr. Speaker, she has come abroad here again.

Mr. Speaker, the minister will have us believe this is a minor amendment. We heard that last week when the Premier talked about the Hydro bill. We know the truth of that.

Mr. Speaker, the minister has not given very much explanation here. The Explanatory Note states that "...authority to make regulations respecting the application of the Act to public sector pension plans".

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: What it says is that the Pension Benefits Act can now be applied to public sector pension plans, and that is a significant change. The Pension Benefits Act can now be applied to the Public Service Pension Plan, to that plan.

AN HON. MEMBER: What does that mean?

MR. WINDSOR: I am not entirely sure what that means. I thought the minister would tell us when he introduced it, and we are going to do it retroactively. Now, why are we doing something retroactively again? All too often legislation this year is coming before this House and being made retroactive, and this act itself comes into force January 1, 1995.

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: What is the Minister of Health babbling about over there now? If he has something to say he will be given an opportunity. Otherwise, let him sit there and listen for once. If he wants to contribute something he will have an opportunity. We have lots of time to debate this particular bill.

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: We can stay here all night and debate this one if the minister would like us to. I don't have a problem with that. I would like for the Minister of Finance to pay some attention, though.

MR. SPEAKER: Order, please!

The Chair has recognized the hon. the Member for Mount Pearl. I ask all the other members to please restrain themselves and let the hon. member speak.

MR. WINDSOR: Thank you, Mr. Speaker.

It is very difficult when we have ministers mumbling things over there that are not making a lot of sense.

Mr. Speaker, can the minister tell us, exactly what impact will this have? What provisions of the Pension Benefits Act will be applied to the Public Service Pension Act, and why do we not have equivalent provisions in there now? What exactly will the impact of this be? Because I am certainly not clear. I am not sure the minister is. This is one of those cases where you see what appears to be a minor amendment - oh, we are just going to add this section after section such-and-such. You really want to take the act and read through it and see exactly what this minor amendment can do to the act, and my colleague is there now doing that with the minister, I assume, in trying to sort out exactly what the changes can do but it is an example of what would seem to be a very minor piece of legislation but it can have tremendous impact. What provisions in the Pension Benefits Act for example, would the government want to apply to the public service pension plan that are not already covered in that plan and by regulation is what concerns me if they can make these changes by regulation and make them retroactively? What has happened that we need to correct now? We have seen this government use retroactive legislation a number of times to correct mistakes made in the past or to take mistakes made, breaches of the law and make them legal by changing the law and making that retroactive, they have done that many times. What little game are we playing here, Mr. Speaker, I ask the minister? My colleagues are right, I don't think the minister really understands this particular bill and what impact it might have. Hopefully my colleague from Ferryland is going to straighten them out over there now, so that when the minister stands again, he can tell us something or maybe the minister would like to defer it and go consult with his officials and find out exactly what this bill can do, what the implications might be because the Member for Exploits, he may find that this could impact on his pension.

MR. GRIMES: No, not mine. I haven't got one.

MR. WINDSOR: Not going to touch yours? It does not say that this deals with the MHA pension plan, it is the public service pension plan. The minister has some that I suppose he has transferred his teachers pension now has he, to the MHA plan? Well it could affect that. What regulations is government planning to make, Mr. Speaker, that they won't apply to this pension plan? Why did they not come upfront and show us exactly what this is going to do? Once again, Mr. Speaker, it seems to be an underhanded way of slipping something through in the dark of the night, a few days before Christmas, something that can be done retroactively by regulation in the secrecy and the privacy of the Cabinet room somewhere down the road, giving more power to Cabinet.

MR. SPEAKER: Order, please!

I ask the hon. members to my left, there is a lot of conversation going on here. It is difficult to hear the hon. member speaking and if it is absolutely necessary I think members should do it outside the Chamber.

The hon. the Member for Mount Pearl.

SOME HON. MEMBERS: Hear, hear!

MR. WINDSOR: Thank you, Mr. Speaker. It is getting pretty close to Christmas. I hope the minister is not going because I want him to - I am ready for the minister to answer me now unless somebody else wants to speak to this.

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: You are going to go and consult? Well, then I will talk about it some more while the minister is consulting. What would you like to talk about, I ask?

I will get back to the minister's pension again. His pension is in jeopardy as well, all of them. The Member for Bellevue, his pension as a public servant could be impacted here. He has had a lot of public service. He had many years, I suppose -

MR. BARRETT: (Inaudible).

MR. WINDSOR: Three years? It is more then that.

MR. BARRETT: Three pension plans.

MR. WINDSOR: You have three pensions? What is the member doing here if he has three pensions? One has to question the member, what is the member doing here if he has three pensions? The Member for Twillingate is in the same boat, he has three, I think, pensions coming in. A couple of them he is getting paid now.

MR. CAREEN: He has seven.

MR. WINDSOR: five pensions. Now add the benefits of long years in politics - that is terrible. Well I say to the Member for Twillingate, good for you, you've earned them. You served all of those years in politics, in Ottawa, at City Hall, here in the House of Assembly. Old Age Pension and what else?


MR. WINDSOR: Canada Pension. No wonder the hon. member sits there and says nothing, quietly smiles and says, let these young fellows take it all. Let these young fellows deal with these things. He is quite content. He got his future salted away. Other members here are looking to the future, as my colleague was talking about a few moments ago, looking at the seat directly opposite here that is vacant now and probably will be very vacant, sooner then later, speculation would have it. Then we see all of the guys over there now, Mr. Speaker, lining up, all along and throughout now. The rumour starts that a Premier is going to resign. Well you start to see them lining up behind them all then, eh? You start to see the little groups forming. You see the lobbying.

AN HON. MEMBER: There are lines up over there too I guess.

MR. WINDSOR: There is a line over here all right, all behind the Leader of the Opposition, fairly and squarely.

SOME HON. MEMBERS: Hear, hear!

MR. WINDSOR: If either one of the potential leaders over there had as much caucus support as our Leader has he would be well away to the races. Wouldn't have a problem, Mr. Speaker.

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: We will see who the leaders are when the next election comes. I know who the leader is going to be over here. The question is, who is going to be over there? Or is it even going to be one of them? Maybe the great white saviour is going to come back from Ottawa. I don't think so, I don't believe that. I think -

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: Which white saviour, he says. No, I don't believe that. I think he is going to stay where he is. He wouldn't do that to his former buddy and colleague the Minister of Industry, Trade and Technology. The Minister of Industry, Trade and Technology and the Minister of Fisheries and Oceans in Ottawa were great buddies. Worked together, as I recall, for -

MR. FUREY: I kept him out of a lot of trouble.

MR. WINDSOR: Kept him out of a lot of trouble. He certainly learned a lot from him, Mr. Speaker. It is going to be interesting to see how it all winds up over there and who takes their pension and who is forced to take a pension, and who takes an involuntary pension. It will be interesting to see that.

AN HON. MEMBER: Are you going to run again?

MR. WINDSOR: Am I going to run again? Has there ever been a doubt? Why would the hon. minister even question it?

MR. FUREY: I think you are a terrific member, I just wondered.

MR. WINDSOR: So do the people of Mount Pearl. They had the good sense to elect me six times, and I thank them for it. It has been a great honour to represent them.

AN HON. MEMBER: I heard you are running in Lewisporte.

MR. WINDSOR: Oh, now, Mr. Speaker. The hon. the minister is putting the fear of God into his colleague for Lewisporte. It is not for being asked to run, I will say to the minister, it is not for encouragement that I get from many friends that I have in Lewisporte. But my work in Mount Pearl is not finished yet, I say to the minister. He needn't worry about that. There is lots of work to be done in Mount Pearl yet. I have to keep protecting Mount Pearl from this hon. crowd opposite who continue to attack the City of Mount Pearl, the most prosperous community, the most well managed municipality in the Province, a model municipality. Constantly attacking. It is the old situation: When a Newfoundlander does well, then every other Newfoundlander drags him back.

We have all heard the story about the guy who was cooking lobsters. Have you heard that story? The guy had two lobster pots cooking. On one pot he had a cover and on the other one he didn't. The guy came long and he said: You cooking lobsters? Yes. He said: I've never seen this before, this is interesting. I've never seen lobster cooked. How do you do it? He said: Oh, you just take them and you pop them into the boiling water, leave them there for fourteen minutes, and you've got your perfectly cooked lobster. It has to be good salt water to do it right, fresh from the cold Atlantic Ocean. He says: How come you have a cover on one pot and no cover on the other pot? He said: This pot here with the cover on it, those are Nova Scotia lobsters. In the other pot without the cover on, those are Newfoundland lobsters. So he said: Well, why would it make a difference? So he said: Boy, if one of the Newfoundland lobsters tries to get out, the other fellows are going to pull him back in. It isn't a problem you see.

That is the old story of Newfoundlanders. Whenever a Newfoundlanders starts to get ahead the others have to haul him back. You are always pulling back. If a Newfoundlander has done well for himself then he is either inheriting from a rich aunt or he is a crook, or he is only a front for somebody else, somebody's money from the mainland -

AN HON. MEMBER: Or he is Liberal.

MR. WINDSOR: - or he is a Liberal. No, not all Liberals are affluent, only those who win lotteries, Mr. Speaker. Then they can afford to sit in the front benches of government and do a job and enjoy it, I say. Congratulations to the minister on his good fortune. But I say, what a great way to be in this hon. House and have nothing else really to concern you about. Know that you are secure, your family are looked after, you are really - you are not here, doesn't matter if you get five cents or $500,000 as a salary. You are able to look after your affairs and you can concentrate on the job that needs to be done. Everybody has certain concerns and certain financial responsibilities that they worry about. What a pleasure it is to those who can sit in the House and deal with the business at hand, such as this pension bill. What a pleasure it is to deal with this bill.

Now that the minister is back he is going to tell us exactly what it means, other than the fact that Cabinet now has more authority to apply the provisions of the Pension Benefits Act to the Public Service Pension Act, to make regulations as they choose in Cabinet, in the secrecy of Cabinet, and to apply them retroactively. I would like to hear the minister justify taking that authority unto itself.

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

MR. DICKS: Thank you, Mr. Speaker.

I already told the hon. member what the effect of it was, and that hasn't changed. I think his inquiry was whether or not there was any particular reason, which I took to be a fair question. I had a notion as to one reason that it might be, but I want to check with my officials before I put it on the public record.

Essentially, the Pension Benefits Act provides for the payment of benefits to individuals and security of pension funds. It also provides for matters such as portability, if one leaves and transfers out of a pension plan if you have been there now for five years; that was changed some time ago from ten down to five, so we vested that period of time.

As the hon. member knows, the difficulty with our public service pension plans is that at the current time, right now, they are not solvent. The teachers' pension plan is in the vicinity of about 17 per cent or 18 per cent funded. The public service pension plan is funded in the vicinity of 35-40 per cent. The difficulty it poses for government is that when a person leaves a government pension plan you would normally pay what they call a commuted value. In other words, you would pay over to another pension plan 100 per cent of the amount that you would need to invest at today's rates to yield the stream of payments at the person's normal pension time, calculated on whatever the person's benefits would be at 2 per cent per year or whatever. The difficulty with doing that is, if you permit that to happen in the public sector what you are doing is prejudicing, essentially, those people who remain members of the plan.

So what government has said at this point, and the reason we want to have this amendment, is we are going to say to individuals who leave and go to another pension plan that the government will preserve all the funds that are presently in the plan - we will maintain the obligation to pay it if and when the person retires - but we may not allow them to exercise their full right of portability until we arrive at a point in time where either the plan is more fully vested or, I should say, more fully funded. In other words, we have to get it up to a more acceptable level or, secondly, what we may do is review that policy in the near future.

As the hon. members are aware, the pension liability of the province is in the order of $2.5 billion so we just want to allow Cabinet to have the authority to deal with matters that touch on the solvency of our plan and at what time and in what circumstances an individual may take some or all of the value that they have acquired in that pension plan.

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

MR. WINDSOR: Thank you.

MR. SPEAKER: I understand the hon. member gave leave to the minister to answer.

MR. WINDSOR: I am asking for leave because I don't have the right to speak the second time, as Your Honour knows, so before the minister sits -

MR. SPEAKER: Okay, I thought you had given leave to the minister to answer your question, so you -

MR. WINDSOR: No. I had finished and the minister was speaking, now I am asking, before he sits down to give me leave to ask him some more questions.

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

MR. WINDSOR: What the minister is telling us then is, if somebody now leaves the public service, they are allowed obviously to take their pension benefits with them but they are only going to be allowed to take that portion that is now funded because we are underfunded, we are only partially funded so that a member of the pension plan cannot take the full value of the benefits that he or she has earned and if that's the case - alright, let the minister explain it to me again. I missed it then.

MR. SPEAKER: The hon. the Minister of Finance and Treasury Board.

MR. DICKS: Thank you, Mr. Speaker.

Normally, when one transfers from one pension plan to another, the trustee of the plan in which you are currently enroled has to value what your pension benefit would be and give you in present dollars, sufficient monies so that when you reach your normal retirement age, there will be a stream of payments there for you. That's based on, and takes into account a lot of factors, one is, your age expectancy and secondly, what additional amount of interest you would earn on that money because the whole point of a pension plan is that at the time of your expected death, there should be zero left in the plan. It is not the same as if you put in say, $100,000 in the bank at 10 per cent. What you do in the case of a pension plan is, you would probably put something substantially less than that so, just in answer to the hon. member's question: no, we are not saying you take out the diminished value, what we are saying is that in all likelihood we will not permit you to take out anything at this point in time, but the benefit is secure by legislation, that as and when you would become entitled under our current pension plan, you will then start receiving your pension benefit.

What we are not going to do is to allow someone who leaves to take out or for the government to incur the obligation to pay 100 per cent of commuted value when the people in the plan, the Public Service Pension Plan for example, have on deposit only about 35 to 40 per cent of the value of their pension plan. In our view, at this point in time, until this whole question of pensions is to be assessed, then we want to maintain the integrity of the plan and if at some future point, someone wants to transfer it out, we may well consider doing it at that time, but presently at least, we want to keep the money on deposit in the government pension plan. The person will still in due course receive the benefit that he or she contracted for, but they would not be able to take the cash value of their eventual pension plan with them presently.

I say to the hon. member that I'm not suggesting that is the fairest way to do things, but for the time being while we are trying to deal with our pension liability we believe it is in the best interest of all the plan holders to address it in that fashion.

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

MR. WINDSOR: Thank you, Mr. Speaker. I'm not sure what right I have to speak. We only speak once. We aren't in Committee now so....

MR. SPEAKER: No, the Chair was under the impression that the Member for Mount Pearl gave leave to the minister to answer his question.

MR. WINDSOR: Thank you, Mr. Speaker. What we are getting at here, I say to the minister, is that somebody who leaves now and wants to transfer their benefits to another bona fide pension plan, maybe a federal government pension plan or whatever, is now not going to be able to do that. I say to the minister that the unfunded liability is government's responsibility. Admittedly, where it is a 50-50 shared plan the employee obviously has not paid enough either, but government is the manager. This principle was recognized a number of years ago. As managers, government is responsible for that unfunded liability.

The minister should say today to members of the public sector pension plan: We are not contributing enough to maintain the current cost. Forget the unfunded liability, that is government's responsibility. But the ongoing cost of service today, the liability that is accruing, if we are not contributing enough then the minister should increase the contributions both from government and to the employee to that pension plan, so that the cost of service from here on is being met. The unfunded liability is government's responsibility.

I say to the minister, if an individual wants to transfer now his pension benefits he or she should be entitled to do that, and government should honour the responsibility they have for that portion of the unfunded liability. I have a real problem with what the minister is suggesting. Because you are saying to that person now: We aren't going to let you do anything, which may be a serious restriction on that person's life and their own personal financial plan, if they can't proceed into another pension plan, or to take cash value if they chose to do that. Not normally a wise thing to do, but if for whatever reason they chose to do that, they should have that right to that flexibility.

What the minister is saying is that there is an unfunded liability, and until government is in a position to meet that liability, then we are going to say to anybody who chooses to leave the pension plan: You can't do anything for now. I have a real problem with that, Mr. Speaker.

MR. DICKS: If the hon. member wants to speak I just want to point out a couple of things. I do not know if it will raise additional questions. As I have indicated all we are doing at this point is saying to individuals that we are not dispossessing them of their eventual pension benefits. What we are saying is that we do not want you at this point in time to take out the cash value of what those pension benefits will yield to you in the fullness of years, as it were.

By and large, with the exception of the Teachers' Pension Plan and the MHA Pension Plan we are achieving current cost of service. In other words on the go forward basis the Public Service Plan, the amount that is being contributed both by government and by the employees is sufficient from this point forward to pay the eventual pension plan benefits that have been contracted. Unfortunately, the history is such that the unfunded liability keeps increasing each year, so while on a go forward basis earned service presently being attained is being funded, we have an immense liability with respect to the past service which was not properly funded.

In that case I am not arguing that this is absolutely fair, but what I am saying to the hon member is that one of the reasons why this is being brought forward at this point in time is because government wants to consider freezing those for the time being until we deal with the whole question of viability so that if a person leaves he or she cannot take the cash value, 100 per cash value out. We do guarantee the eventual payments. All we are saying is that we want to keep the cash on hand until we can determine an appropriate resolution for this whole difficulty.

While the hon. member says that government bears the liability for the past unfunded liability, I am not sure I entirely agree with that.

AN HON. MEMBER: (Inaudible)

MR. DICKS: It has signed some collective agreements that have accepted it but collective agreements can be changed. I am not sure that in the case where both parties did not properly contribute that equitably government should be stuck with the full liability, but that is a question for another day and this amendment does not touch on it.

What I did want to say was that the bill being presented to the House does not confine itself to that. This is an enabling session whereby government can make regulations, the Lieutenant-Governor in Council. The whole point is that the act did not permit, when it was originally drafted, and I think it is an oversight, for government to make regulations under the pension benefits that applied to the Public Service Pension Plan, so conceivably any government, whether this one or a subsequent one, or others, can make whatever regulations it deems desirable and fit. It is just that in this particular case that is the immediate reason to do so but, of course, the hon. member realizes from having looked at it this is not confined to that. It is the general enabling power to the Lieutenant-Governor in Council to make regulations affecting the pension plans and the application of the Pension Benefits Act. I think to that extent the amendment should pass the House. Whether or not, as the hon. member said, any particular regulations brought forth by the Lieutenant-Governor in Council are fit, justified or defensible is a matter, of course, for additional debate, not in this House because it would be by regulation rather than legislation.

Having said that, I think that the act is fair in the sense that the Lieutenant-Governor in Council should have the right to make regulations respecting the pension benefits plan of the public sector as much as the private sector. The immediate issue is just whether or not this particular regulation should go forward, and that is the reason we did want to have this passed in this session of the House.

Thank you, Mr. Speaker.

On motion, a bill, "An Act To Amend The Pension Benefits Act (No. 2)," read a second time, ordered referred to a Committee of the Whole House on tomorrow.


December 18, 1995         HOUSE OF ASSEMBLY PROCEEDINGS         Vol. XLII  No. 78A

[Continuation of Sitting]

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

MR. FUREY: Mr. Speaker, I would like to call Bill 51, Order 33.

MR. SPEAKER: Order 33, "An Act To Amend The Taxation of Utilities and Cable Television Companies Act". Bill No. 51.

The hon. the Minister of Municipal and Provincial Affairs.

MR. REID: Mr. Speaker, a couple of my colleagues from across the way, I think, are going to speak on this. I am not going to take very long on this and it is probably better for me to speak on the cluing up than to start now. Both my colleagues on the other side of the House, I have sat and talked to them about this. I think both of them understand it fairly well, maybe better than I do, but at the end of the day, Mr. Speaker, the most serious part of it is the fact that the town of Wabush will lose some money by putting Twin Falls Power Corporation - the amount should be around $50,000. They will gain some extra money from the MOG as well as -

AN HON. MEMBER: (Inaudible).

MR. REID: Yes, it does.

AN HON. MEMBER: The MOGs? On their revenues?

Yes, based on their revenues and the 2.5 per cent on their utility tax and the fact that they had a windfall of over $70,000 this year because this bill was supposed to be introduced last January. We did not introduce it. They got the extra money for the MOG which is $70,000. They have that in the bank, so it is not going to be that hard on them. Basically, what we did some years ago when we drafted this bill was we left off the Twin Falls Power Corporation by mistake, before my time at least, and we just want to correct that legislation.

The second part of the legislation refers to the other communication companies that are out there like; Sprint, AT&T and a number of other companies that are coming into the Province that have not been named in the legislation. Newfoundland Telephone was the only company named in the legislation, and we want to put in a generic clause which basically means the corporation transmission, conveyance and communication delivery of provisions and telegram, telegraph, facsimile, fax messages which will cover everybody else in the Province.

With that, Mr. Speaker, I am going to sit down and hopefully get a chance to say a few words later on.

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

MR. HODDER: Thank you, Mr. Speaker.

The intent of the bill has been explained by the minister. My comments will be basically about subsection 2 and my colleague will be talking about subsection 1. There is such a thing as being in the back of the back benches.

Mr. Speaker, the intent is to provide, as I understand it, a level playing field to all providers of services in the payment of municipal taxes. Now, when the original act was passed and when the utility was defined, it specified certain of the utilities, namely; the Newfoundland and Labrador Hydro Electric Corporation, Newfoundland Light and Power Company Limited and Newfoundland Telephone Company. The difficulty arises when we have others entering the telecommunications business. So at the federation's annual meeting in October, there was a resolution passed which addressed this particular issue. Newfoundland and Labrador Federation of Municipalities passed a motion which would essentially ask the minister to provide a level playing field for the taxation of the various utilities in the Province, and in that particular case, the federation asked that this amendment be considered by the ministry, and therefore, by the House. What this will do is treat all of the companies under the definition of utilities the same way.

Now, when the original bill was passed, we had not heard tell of Sprint Canada, we had not heard tell of Unitel and these other companies, and at the moment, the way the legislation is, is that the Newfoundland Telephone Company is treated unfairly and discriminatorily by the present legislation. In other words, Newfoundland Telephone Company is assessed 2.5 per cent of its revenues, which it then distributes to the various municipalities throughout the Province depending on the amount of business that is done. However, that same procedure does not apply to Sprint Canada or to Unitel; so, therefore, Newfoundland Telephone Company quite properly feels that they are not being treated fairly. They have made a case, so the federation has passed a motion to ask the government to consider that issue, and this particular bill, in section 1.(2) addresses that issue by further defining what is meant by the word `utility'.

My colleague, the Member for Menihek, will talk about the issue in his district, particularly as it relates to "the Twin Falls Power Corporation and its successors and assigns". As far as dealing with utilities is concerned, we support that amendment on this side of the House. We have some reservations about the Twin Falls Power Corporation; that part of it causes us some concern, and my colleague will be addressing that momentarily.

Mr. Speaker, with these comments I will give leave to my colleague, the Member for Menihek.

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

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

Back when the government, a couple of months ago, talked about having a $60 million deficit, the Minister of Finance asked the different government departments to revise their budgets. The Minister of Municipal and Provincial Affairs announced that with this year's suggested cuts, and next year's, a total of 22 per cent would be cut out of his particular department to balance the Budget. The net effect of that on the community of Wabush was that they are going to lose a tremendous number of dollars, and yet, in the House of Assembly when the minister was taking some heat from the Federation of Municipalities, the minister suggested that they were going to be giving more in the municipal operating grants - and he is correct - that the municipal operating grants in Wabush were going to be going up by, I think it was around $11,000. I had asked the minister a question with regard to the government's participation in housing in this Province, and he said that I should watch what I am asking, and watch where I am talking about the government spending money, because under the new formula we were going to see $11,000 more going from the Province to Wabush in municipal operating grants, and he was correct; but then he went on to say in the scrum after that the reason why they were going to get this was because they were very effective, he said, in collecting revenues. They were doing such a tremendous job in collecting revenues that they were going to give them more money.

We found out, Mr. Speaker, that what it was all about was that because of changes in legislation with regard to taxes, property taxes payable to municipalities on equipment was being deleted and the municipalities weren't going to be permitted to tax equipment of utilities and cable companies, the Twin Falls Power Corporation would not have to pay taxes to the municipality on the equipment that is located within the boundaries of Wabush in a substation. It has been paying thousands of dollars, almost $200,000 in taxes, to the town of Wabush, this corporation that is in the electrical business, that is owned by the Iron Ore Company of Canada, Wabush Mines and the Crown. They are all equal, one-third partners.

The net effect of this bill on the town of Wabush and the fact of the change of policy by the government with regard to taxation of utility companies on equipment, or the taxation that municipalities are permitted to charge utility companies on property and equipment within the boundaries of municipalities, the net effect on Wabush is devastating. A small town like Wabush is going to have a net loss of over $50,000 when all is said and done. They have to increase from their other taxpayers within the municipality (inaudible) $50,000.

Now, Mr. Speaker, that is a tremendous loss. The actual loss - I say net loss, because that is what they are going to have to go out and find next year, because the MOG is going to be increased. So they are going to get an extra $79,000 there. They will be getting $60,000 revenue on the 2.5 per cent that they are permitted to charge on the gross revenues of the utility company. They will be able to get $60,000. You combine that with the $70,000, $80,000 increase in the MOG and you will end up with a net loss of about $55,000 to the town of Wabush.


MR. A. SNOW: Mr. Speaker, when I saw the minister approach me with a cheque I was hoping that I was going to be able to give some good news to the town of Wabush with regard to the fact that it is going to be short about $50,000 - I saw the minister walk across the House and place a personal cheque upon my desk - until I realized, of course, that there would definitely be no way that the person who would control this account, who has to sign his or her name on this account, there is no way there could be $50,000 in that account. So we won't be able to solve the financial problems of Wabush on this particular account.

But, Mr. Speaker, the Town of Wabush is in a dilemma. This is a municipality that has a sixteen mil tax rate, one of the highest in this Province.

MR. HEWLETT: Sixty mils?

MR. A. SNOW: Sixteen mils.

MR. HEWLETT: Oh, sixteen, yes.

MR. A. SNOW: In order to recover this amount of money we are looking at probably a two mil increase in the taxes in the community of Wabush. That would undoubtedly give them, I would think, the highest rate of any municipality in this Province, by far the highest in Labrador, I would suspect.

Mr. Speaker, this is totally unfair. I suggested to the minister that one of the methods of not going through with this was that we would have to amend the act to treat them differently in Wabush. There is no reason why we can't do it. The only thing is the government, the ministry, has not put in place the mechanisms to change the municipal assessments act, which is what is necessary to be done.

Now, they have to agree, they have to have the will. The area's representative in Cabinet, the Minister of Justice, suggested that he is in favour of it. My understanding was that he was in favour of supporting that in Cabinet, but when it came time and the dust settled, Mr. Speaker - this was a couple of week ago when he had meetings with the council, and the Minister of Justice suggested that he could support this, that he would like to see Wabush exempted, if there was any way they could do it.

All they have to do, Mr. Speaker, is have an amendment to the municipal assessments act and to ensure that the Twin Falls Power Corporation is treated differently. There are lots of examples where taxes are different in one area versus another area, lots of examples, Mr. Speaker, especially in Labrador. I mean, we have the mining companies paying different grants in lieu of taxes to municipalities. We have the protection of taxes of mining companies. The Iron Ore Company of Canada are protected with regard to protection from municipal taxes. It is in the Labrador mining exploration act, Mr. Speaker. The NALCO - Javelin act controls the taxation associated with Wabush Mines. So there is no doubt that this government could make an exception with regard to the taxation policy of the government. All that would be necessary for them to do would be to change their policy, to treat it differently. That is all Wabush is asking, treat Wabush differently.

The government suggested that they can't do it because they would like to have all little pigeon-holes exactly the same, Mr. Speaker. Well, that is not necessary in taxation. The people who live in Western Labrador, or in all of Labrador, get a special deduction in our income taxes because of where we live, Mr. Speaker. We get a special deduction in Labrador because of where we live.

Mr. Speaker, this has a devastating effect on Wabush. They should treat them differently. The ministers have agreed in meetings with the council that representatives of government have suggested that they would be willing to support it. Yet, when it comes down to it, they do not support it within Cabinet. This is not fair, because the real concern that the town council of Wabush has is that what is going to happen next year, they feel, is going to be a tremendous difference in the MOG, and that is where they are going to get nailed, that is where they are going to get hit next year. So while they may increase taxes this year to pick up their two mils, Mr. Speaker, next year the MOG is going to be a drastic change to the town of Wabush, I would suspect. That is what they are afraid of. We are going to see the town of Wabush having to pick up another shortfall because of a change in policy by this government.

The government caused a change in policy previously. I know the minister does not want to be reminded of this, but his government, his ministry, caused Wabush to have this decrease in the amount of revenue because of a change in policy. All they asking is for the government to reconsider that Wabush be considered under a special case. There is no doubt that I would support it. I would be more than willing to support it. I would submit any amendment that was necessary and support any amendment. And I am sure I could convince my colleagues on this side of the House who would readily support an amendment that would cause, in effect, that Wabush Mines, Iron Ore Company of Canada and the Crown would pay the appropriate taxes that Wabush has become accustomed to collecting on the property within their boundaries.

It is not an unreasonable request. It is not a request that is without precedent. It has been done for years, and I believe that the government should do it. While it might be rather hasty to do it between now and Christmas Eve, or Christmas Day, I still think it is possible to do it, if the government had it within their minds to do it. If they firmly believe they should do it, they could, but they won't do it.

With those few remarks, I thank the minister for his meetings today on behalf of the council in Wabush. I would also like for him to reconsider it. Maybe over the winter recess, if you want to call it that, he can reconsider and come back with an amendment to the municipal assessment act so that indeed it could facilitate Wabush to regain this revenue that has been lost because of a change in the taxation policy by this government. In effect, it would be able to allow Wabush to continue collecting as it has been collecting previously. I think that would be fair to Wabush.

Thank you, Mr. Speaker.

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

The hon. the Minister of Municipal and Provincial Affairs.

MR. REID: Very quickly, Mr. Speaker. If we didn't bring in this piece of legislation today and make reference to Twin Falls Power Corporation, as of January 1 1996, Wabush would be in a situation where it wouldn't receive any funding at all. This piece of legislation at least opens the door to them to be able to collect the extra $70,000 in the MOG plus the 2.5 per cent on all power used in Wabush.

I do agree with the hon. member. I spoke with the mayor, and I've spoken to people from Wabush about this particular problem, and I sympathize with them. But I can't treat Wabush any differently under this particular act than we treat other communities in the Province. The hon. member is correct. If the people of Wabush, the mayor and the council, want to come in and discuss future changes to a bill, I'm certainly sure that my office and my door and all the ministers' that are involved with Labrador and have a concern about Labrador would only be too glad to see them.

I now move second reading, Mr. Speaker.

On motion, a bill, "An Act To Amend The Taxation Of Utilities And Cable Television Companies Act," read a second time, ordered referred to a Committee of the Whole House on tomorrow. (Bill No. 51)

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

MR. FUREY: Mr. Speaker, I would like to call Bill No. 48. I believe it is Order No. 38.

Motion, second reading of a bill, "An Act To Remove Anomalies And Errors In The Statute Law". (Bill No. 48)

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

MR. FUREY: Mr. Speaker, I believe the Minister of Justice has consulted with both authorities with respect to this. These are technical amendments. I don't think they involve policy. I do know that the Member for St. John's East has pointed out a typographical error in clause 14 which he will amend by striking out certain words. I think this bill is fairly straightforward.

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

MR. HARRIS: Thank you, Mr. Speaker. It is interesting that every year there is a bill, sometimes more than one, from the Attorney General. Usually they are called the Attorney General Statutes Amendment Act - in fact, so is this one as well - the long title being An Act To Remove Anomalies And Errors In The Statute Law. It is kind of interesting that this act itself has an error or anomaly in it. I was delighted to be able to point it out to the Government House Leader just to prove two things: number one is that there are people in the House who actually do read the legislation, so they want to be careful what they try to slip through; number two, that just because something is printed and distributed in the House does not mean that it is right.

There are a couple of interesting points to be made. I will point out the problem with this clause before I go on. It is an amendment that is appropriate for Committee, obviously, not a second reading. Clause 14 purports to amend section 7(5) of the Registration of Deeds Act, but if members would read along with me it says: "Subsection 7(5) of the Registration of Deeds Act is amended by deleting the word the word `Area' and by substituting the word should be `Act'."

There are obviously a few extra words in there, seeing as how "the word" is printed twice in line two, and the words "should be" before the word "Act" are also unnecessary. In fact, such an amendment actually makes a mess of the language. Clearly, it is a typographical error or an error that results from difficulties in proofreading the legislation.

The act itself has a couple of interesting points to it, Mr. Speaker. Clause 2 of the act amends the Arbitration Act by adding in a period of sixty days within which an arbitration award may be referred to the Trial Division for judicial review. That is a new provision. Before this provision was in I don't think there was any provision for the number of days for an appeal. I think it was assumed to be by some people thirty days, because that was the normal date for appeal. Others came to the conclusion that it was six months, which is the rule for certiorari. Still others came to the conclusion that it was a reasonable period. What is a reasonable period is a matter of some debate, depending on the parties involved, and what is reasonable in terms of how quickly they may move to act. That is interesting.

There is still a question - I do not know if it has been resolved definitely yet - of whether this Arbitration Act applies to the most common of arbitrations, and that is the labour arbitrations where an arbitrator is appointed under a collective agreement or by the minister pursuant to the labour relations act. These are probably the most common arbitrations in the Province. Having some certainty with respect to that particular provision is important, and sixty days is not a bad period. It gives people an opportunity to consider the effect of an arbitration award and time to make a decision within an organization, sometimes a trade union, as to whether or not to seek this review and then some lawyer will offer them into action. That may be the hardest part sometimes, to actually get an application filed. So that is of interest.

I have not really looked at this one, perhaps my learned friend from Humber Valley might want to have a look and see what the effect of repealing Part IV of the Crown Lands Act is, Section 94 - 100. Quite often we have to be careful about the so-called minor amendments. We had examples of it in the House the other day with these so-called minor amendments to the Hydro Corporations Act which allows privatization to occur without much further ado but I don't know what the affects of repealing Sections 94 - 100 of the Crown Lands Act is. By the time we get to committee I will know.

There is an interesting aspect of this adding the Age of Majority Act as a schedule to this act. The object to clause 10 provides that the minors attainment of majority act, 1971 is repealed and the act contained in this schedule substituted in its place. That act seems to replicate the entire act, even providing for what happens to a child born in the Leap Year, the 29th of February. The Age of Majority Act for some reason was not reproduced in the 1990 consolidation of the statues and nobody has been able to explain exactly why certain statutes were left out of the consolidation and certain ones are not.

As the minister has said in the past, it is very difficult by looking at the consolidated statutes to actually find this act. It is an important act because it does provide for when a person becomes an adult and therefore, has the general law with respect to adults apply to him or her, it used to be twenty-one years it is now - and has been for some time, I suspect since 1971 or before - nineteen years and ceases to be a minor. It has a lot of implications for certain pieces of legislation having to do with guardianships, trustees and whether or not persons can commence legal actions without having a guardian ad litem for it. So it is an interesting anomaly there that this act was not repeated in the consolidation. The other words here seem to be to provide for actual errors that were made in the act, various legislation that were passed and I don't think require any further comment with the exception of clause 14 which I anticipate making an amendment to correct when we get to committee stage.

Thank you, Mr. Speaker, those are my comments.

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

MR. WOODFORD: Thank you, Mr. Speaker. Just a few short comments on this particular bill, Bill 48.

One part of this particular piece of legislation - I only saw it today - I have not had a chance to go through the Crown Lands Act and see what sections that they are talking about here but it is quite clear here in this particular piece of legislation, Section 5 said; `The Crown Lands Act is amended by repealing Part IV, Sections 95 - 100.' Now, Mr. Speaker, the latest Crown Lands Act that I think passed through the House in 1991, I do believe because it first came in as Bill 22, then Bill 25, then apparently it ended up as Bill No. 36, or chapter thirty-six, the new Crown lands act. It was done then when the Member for Windsor - Buchans was minister.

However, under those acts I only see up to numbers 69, 77. Under Part IV of that particular act there is some fairly important sections there, Mr. Speaker, that I would have to question. Especially Part IV of the act, section 62(4) or (5). I won't get into it too much now in second reading but when it comes up in Committee I will probably have to question that particular part a little further.

Some of the other comments that I was going to make on it was talking about the age of majority and so on. That came up when we were doing the jury act. It also came up when we were doing the evidence act earlier on. The minister referred to, for instance, the legal age of a child as the age of majority. I see that in this particular act as well.

The Crown lands one is the one that I would have a few questions on when this comes up in Committee. We will do a little bit more research on it. Because looking at the old act and looking at the new act that passed in 1991, there is a certain amount of that left out. When it comes to Part IV there are some very important clauses there as far as I'm concerned that should be questioned. Thank you, Mr. Speaker.

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

The hon. the Minister of Industry, Trade and Technology.

MR. FUREY: Mr. Speaker, the questions that the hon. Member for Humber Valley refers to certainly will be responded to in Committee. I move second reading of the bill.

On motion, a bill, "An Act To Remove Anomalies And Errors In The Statute Law," read a second time, ordered referred to a Committee of the Whole House on tomorrow. (Bill No. 48)

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

MR. FUREY: Mr. Speaker, Bill No. 43. I believe it appears on the Order Paper as Order No. 33.

Motion, second reading of a bill, "An Act To Amend The Mining And Mineral Rights Tax Act". (Bill No. 43)

MR. SPEAKER: The hon. the Minister of Finance and Treasury Board.

MR. DICKS: Yes, Mr. Speaker, thank you. This act is an interesting bill because it implements a tax regime that is not found elsewhere in the country.

As most members are aware, most mining taxes are calculated as a percentage of the revenue generated by the products from the mines, be they copper, zinc or other forms of minerals. This Province a couple of years ago had changed some of its mining tax provisions to allow for a very liberal regime that was meant to encourage exploration. In the interim, of course, what happened was that the Voisey's Bay discovery was found and it was felt that this was a very rich deposit, and if the current regime was allowed to stay in place there would not be sufficient returns to the Province. What we have done in this tax regime is to attempt to deal with a general form of taxation that would apply to such rich deposits. I want to highlight for hon. members the provisions in general terms, and if they like I can go through them specifically.

In the regime last spring there was a corporate income tax credit given for the first ten years of a new or expanded mine. That is now going to be capped at $2 million annually. In other words, the credit against your other taxes cannot exceed $2 million.

In addition, there was a minimum processing allowance. As members may be aware, when a mine is put in operation there is a lot of money sunk into the types of structures that go into creating a place to excavate minerals and mineralization for further refinement into the base metals. What this does - and I should say, it is common in other provinces to have a processing allowance which allows the companies doing the exploration to recapture, in literal terms, the sunk cost of finding a mine. In addition to that, because they are allowed to write it off, and in this case what we are doing is changing it from the straight line sort of depreciation on a declining base, which is the regime for the income tax - national income tax and, by application, provincial income tax - what we are doing is we are allowing the companies to write off 100 per cent of the cost of putting a mine into production. What we are also allowing them is a 10 per cent processing allowance on the money that is put into processing mines and minerals. This is an incentive, because what they can do each year is, as and against their taxes, they can take an allowance at 10 per cent for the life of the mine. It does not run out and it is a very common sort of thing in order to foster and encourage exploration and production.

Essentially, processing allowance is geared toward production. Other provinces such as Ontario have, I believe, an 8 per cent, a 12 per cent, and a 15 per cent; I believe they may have increased it to 25 per cent. Generally speaking, this is an incentive to the mining industry to produce a higher refined state of the product in the Province. We looked at 8 per cent as being an amount for a smelter, another 10 or 15 per cent for a refinery, and so on, like this. Eventually we decided that a straight 10 per cent might be the most appropriate allowance to be made against an investment of that sort.

The perhaps more controversial and interesting part of this was determining at what point mining companies should pay additional tax back to the Province other than the corporate tax and the mining tax that is paid on the production. What was settled on was, as I said first of all, to allow the mining companies to recapture all the costs of exploration and development of the mine. After that it was decided that a tax should be imposed after they had achieved a 20 per cent rate of return on capital. That capital does not include interest or depreciation, so in determining what the cost base is, the companies, in calculating their tax returns, would exclude depreciation which they have taken, which is an allowable item, as I have said earlier, and also interest costs; but while that is considered for the purposes of some taxes, such as corporate income tax, we would not consider it as being a deduction against the new tax to be imposed - however one wants to term it - a super tax in many ways.

By regulation the government, through the Lieutenant-Governor in Council, can impose what it believes to be an appropriate incremental tax after 20 per cent rate of return on capital is achieved; and, secondly, a further tax after the 30 per cent rate of return is achieved.

Another element in the legislation is that the companies who are part of the chain of development from the company that mines it, the company that owns the mineral rights, I should say, the company that mines it, the company or the corporation that refines it, melts it, processes it, sells it, will all be aggregated. This is to avoid a situation in which one might pass on or put profits in one aspect of the processing or mining that would attract less tax than others. It also avoids the problem of one particular holder in this chain flipping and selling the asset that they hold and avoiding the application of some of these taxes that we seek to impose.

That is the regime, Mr. Speaker, and I will be pleased to answer any specific questions on it. I can go through it provision by provision, if hon. members opposite would like it. Essentially, just to do it briefly: Clause 1, amends the Mineral Tax Act by redefining a number of phrases to allow this type of regime to be implemented. Clause 2, is one to which I early referred which caps the tax at $2 million, the corporate income tax credit that is, and that is a credit against the mining tax that would otherwise be payable. Clause 3 provides for the imposition of an additional tax at a rate to be prescribed by regulations which are triggered at the 20 per cent or 30 per cent rate of return that I earlier mentioned. Clause 4, amends the act in order to define or determine the net income for the purpose of the imposition of the tax, and this is the area in which you will find the provision that it does not include either depreciation or interest. Clauses 5 and 6 are just simply ones to deal with areas of reference and clause 7 is one that consequentially amends clauses 3 and 4 of the bill in order to provide for these amendments to take place.

Mr. Speaker, I expect that the mining industry will have some substantial views on this. I will say that and understand that the matters be referred to Committee. I believe there is a proper balance to be struck here. The mining industry and the petroleum industry are unique in that a great sum of money is expended each year in this country in exploration; we have to be careful not to overtax either of these sectors so that we discourage exploration. Companies are not going to spend a lot of money in a rather or what can also be an uncertain field unless they get an appropriate return on capital.

What we have attempted to do with this act is to define what might be appropriate areas of a proper return to the companies considering their investments and appreciable risks that they take, and to allow them to recover what we believe is a fair return on their investments and balancing that against what is a fair return to the taxpayers of the Province who will see a non-renewable resource exploited and sold commercially, and of course, the element being non-renewable, cannot be replaced, so what we have arrived at is a regime that we think is a workable one, it is one that companies will tell all members is unique and they will have their views that this is not one that will allow them to further exploration.

As I say, we have put it before the House as an appropriate regime; we are going to consider what the rate of tax would be because that is not imposed in the legislation, but we have deemed that after 20 per cent, that is the appropriate point at which an additional tax might be imposed and let us not forget, that, that is after corporate income tax is collected, after a mining tax is collected on the government side, but also after the company takes, in many cases, deductions for, and gets a full credit for all of its development costs, and also takes deductions in the normal course under the Income Tax Act. So, Mr. Speaker, I appreciate the fact that it is a relatively new type of tax regime; it is a relatively complicated method of calculation and I would be interested in hearing what hon. members opposite have to say on the matter.

Thank you, Mr. Speaker.

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

MS VERGE: Thank you, Mr. Speaker.

It was just about a year ago exactly that this House, sitting in the evening, rushed through amendments in the Mining Tax Act to give major tax concessions to mining developments in the Province. The developments talked about at the time were marginal ones. Voisey's Bay was known about then, but no member of the official Opposition and virtually no member of the public had any idea of what a bonanza the Voisey's Bay find is.

Mr. Speaker, a couple of months after the Mining Tax Act was amended, announcements poured from the discoverers and the developers of Voisey's Bay, and people in the Province discovered that Voisey's Bay is an immense deposit, one of the richest ore bodies discovered in this generation.

Mr. Speaker, it quickly became apparent that the tax concessions which were made law through the amendments a year ago, were grossly inappropriate for Voisey's Bay or any other similar large and lucrative ore deposit. When pressed by the Member for Humber Valley in the spring sitting of the House of Assembly, the Premier, on behalf of the government admitted that the concessions passed last December were inappropriate for Voisey's Bay and on May 24, the Premier promised that the government would correct the legislation. Now, we see the government's proposed correction.

The Minister of Finance and Treasury Board, the Minister of Justice speaking for the Minister of Finance and Treasury Board last week, have both indicated that they consider the regime set out in this bill to be reasonable and a good balance. Mr. Speaker, whether it is an equitable arrangement and whether it will achieve the purpose of giving the government and the people of the Province a just return from rich deposits and lucrative developments while at the same time preserving the incentive for ongoing exploration activity, members of the opposition are not in a position to judge yet. Mr. Speaker, we need much more information, we need the benefit of detailed scrutiny and public discussion, and we need to be made privy of the government's numbers respecting the Voisey's Bay development.

Mr. Speaker, thankfully, pressure from the opposition for a more sane approach to dealing with major legislation, while not successful with respect to the Hydro Act amendments, sad to say, has been successful with respect to this bill. Thankfully, last Friday, the Premier announced that the government would be referring this bill to a Legislation Review Committee for study and for public hearings after Christmas. Well, Mr. Speaker, the official Opposition looks forward to participating in that process. We think it is a good way to approach legislation of this magnitude and we just regret the government did not take the same approach to the amendments to the Hydro Act.

Mr. Speaker, the Minister of Finance and Treasury Board, towards the end of his remarks, underlined the fact that minerals are a non-renewable resource. The minerals at Voisey's Bay will come out of the ground only once. We only have one chance at development in a way that will maximize benefit for the people of the Province. Mr. Speaker, the Minister of Justice, speaking for the Minister of Finance and Treasury Board last Thursday, said that this bill will provide, and I quote: "a more equitable sharing of revenues from highly profitable mining operations".

Mr. Speaker, obviously, it is more equitable than the alternative which is the current law with the major tax concessions put into the law a year ago. Whether it is equitable is the question, whether it gives the government and the people of the Province a just and reasonable revenue return is what we have to try to evaluate.

Today, in Question Period, I asked a series of questions about Voisey's Bay to the Minister of Natural Resources and then the Minister of Finance and Treasury Board. I asked basic questions about the government's estimates of the size and the value of the minerals of Voisey's Bay and the way in which the government's estimates were calculated. Now the minister refused to provide that information saying he is at liberty only to share with the public what the companies have already announced. Then I asked the minister to give us the government's expectations for the Voisey's Bay developers timetable and cost for constructing the mine, and then the timetable and the estimated capital cost for the smelter. Well again, he didn't provide specifics.

I continued by calling on first, the Minister of Natural Resources and then the Minister of Finance and Treasury Board to give the government's projections of the production activity once the mine goes into production. The cost of production, the value of the output on a year-by-year basis; well they couldn't provide that information either. I asked the Minister of Finance and Treasury Board what options for correcting the Mining Tax legislation the government studied over the last seven months since the Premier announced that the government was going to amend the amended legislation to correct the mistake made a year ago. Well, the minister didn't or couldn't answer that question. I asked specifically whether the government considered as one option having a negotiated revenue regime for the Voisey's Bay development, in other words, a project specific tax and royalty regime similar to what has been done for the offshore oil industry.

As I recall - I don't have Hansard here - the Minister of Finance and Treasury Board didn't give an answer to that so, Mr. Speaker, unless the government is more forthcoming with the estimates they have worked up and the projections their officials have made about the Voisey's Bay development, and unless they indicate the basis on which they settled on the regime in this bill, then how are the official Opposition, how are the members of the public going to decide whether this bill lives up to its billing, whether in fact, it provides for an equitable sharing of revenues and whether it strikes an appropriate balance between extracting from a lucrative development for the government and the people, a just return while at the same time keeping the incentives for the exploration activity.

Mr. Speaker, the Province has benefitted significantly from stepped up exploration activity over the last year. How much of that increased activity is due to the tax concessions and how much is due to the hype over Voisey's Bay, is a debatable question. So, Mr. Speaker, because of the absence of information about the Voisey's Bay prospect, and because of the lack of information about alternatives available to the government for imposing royalties and taxes on Voisey's Bay or other lucrative mines. It is impossible for the Opposition to take a position on this bill. These are questions we will continue to ask the government. These are questions that we will raise during the Committee process in the new year. These are questions we will encourage the public to discuss and debate.

Last summer, Mr. Speaker, I called on the minister and the government to appoint an independent task force of people knowledgeable in the mining industry to basically give commentary at arm's length from the government about the Voisey's Bay opportunity and other prospects for mining activity in the Province, and to conduct a dialogue with the public. Last summer there was a great deal of doubt and suspicion among the citizens of the Province about how the government was handling the Voisey's Bay opportunity. The government had to that point indicated a laissez faire approach. The minister and the Premier refused back in June and July to insist upon processing of Voisey's Bay minerals in the Province. When INCO bought in there was a considerable worry that INCO would control the development and export the ore to its smelter at Sudbury and take processing jobs out of the Province with the raw ore. Thankfully the company and the government have made it clear, at least I believe they have made it clear, that the processing will be done in the Province. That was welcome news.

To conclude: The government has by no means proven their case. It has by no means backed up its claim that this bill presents an equitable and a balanced approach to taxing and deriving revenue from the Voisey's Bay development or other rich mines. It hasn't shared with the Opposition nor members of the public its projections about the Voisey's Bay opportunity, nor has it shown us any analysis it used to choose this method of taxing. All we can say is that it represents some reduction in the major tax concessions granted a year ago. We can give ourselves credit, as well as members of the public, for persuading the government to take a more considerate approach to passing these amendments.

The government and the House of Assembly made a bad mistake on the eve of Christmas last year by passing amendments to the mining tax act. Those changes were put through in a rush, exactly the same way the amendments to the Hydro legislation and the Electrical Power Control Act are being rammed through now. With these corrections to the mining tax act we will have an opportunity in the new year with a committee-public hearing process to delve into this bill in more detail, and I hope produce a more satisfactory result for the government and the people of the Province in 1996, and in the many years to come when mines are developed and exploration is conducted throughout our Province. There is a lot of money riding on this, Mr. Speaker, and we have to do it right this time. Thank you.

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

MR. HEWLETT: Thank you, Mr. Speaker. I would like just a few brief words on this particular bill.

Last fall, I guess last December when we made some amendments to the existing mining tax legislation, they were made with regard to a desire to increase the level of mining activity, the level of mineral exploration in the Province because whatever taxation regime we had in place at the time, whatever per cent it was, x per cent of nothing was nothing and nothing was basically what we had. So we did not have a mineral industry worth talking about. When the federal government cancelled its flow-through shares program the mineral exploration industry - a good chunk of which is located in my district - basically dried up over night and if you have no ongoing significant and robust exploration industry then obviously you are not going to find any new mines.

Leading up to the thing last December, where we passed the amendments to the act, the government had been for a year or so previous, making the rounds in various circles related to the mining industry indicating that some changes were coming to mineral taxation that would ease the taxation burden and make more interesting to the mining companies a number of prospects that had been found but were considered to be marginal and hopefully produce more exploration which indeed would find other ore bodies, be they marginal or sizable. Under that regime, we currently are today - under that regime I think we have come into the full knowledge of the size and scope of Voisey's Bay. The hon. the Premier indicated that the current tax of general application was a bit too rich for the Voisey's Bay find. The government was going to seek somehow, to redress the balance so that there was a fair return to companies and a fair return to the people of the Province, the ultimate owners of the resource.

Mr. Speaker, the fact of that redress is needed, I don't think anybody will argue. I guess the point in question and I guess the point that will be dealt with when this bill is put out to committee is the nature of the redress and the way in which the government is going to address the need to get a significant revenue flow for the Province out of this particular project. A number of people in the minerals industry and myself in the Assembly have put forward the notion that like for oil and gas we should have had some sort of project specific formula applying to Voisey's Bay and other large mineral finds so that the government could negotiate with a company to extract revenues and industrial benefits appropriate to the economics of the situation on an individual basis and not have to resort to a law of general application.

Mr. Speaker, I still see a considerable merit in that and no doubt when this bill goes to committee that that concept will be put forward. There is concern obviously in the exploration industry that the raising of capital under a circumstance where an amendment to a law, that has only been in existence for one year, shows a degree of instability that finicky investors are loath to put money into. So, Mr. Speaker, it remains to be seen what ultimately will come out of the legislative review process for this bill. I certainly, like all Newfoundlanders, do support a fair return to the people of the Province. It is a matter of how you do it and I sincerely hope that the law brought in under this bill, being proposed under this bill, will not be such that it will dampen in any significant way the exploration activity ongoing by making it more and more difficult for companies to raise revenues.

At this stage of the game that is all I want to say. I support gaining a fair and reasonable share of revenues for the people of the Province on a major minerals find. I only would caveat that by saying that we so do by a mechanism not necessarily through a law of general application, but by a mechanism that would essentially leave the law of general application in place and therefore use it as a catalyst to keep our exploration alive and well, and use a negotiation process to obtain proper revenues and industrial benefits.

I guess we will see at the end of the day what comes out of the legislative review process. I sincerely hope that whatever comes out of it that the current level of exploration currently on the go in our mining industry will continue, if not increase, over the years ahead. I sincerely hope and pray that the technique that the government has used to deal with this problem, this issue, will not lead to further problems in that regard. Thank you, Mr. Speaker.

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

MR. WINDSOR: Thank you, Mr. Speaker. I want to have just a few words. I'm not going to delay this bill unnecessarily today because I first of all want to say that I'm pleased that government has taken the suggestion that we made and taken what I believe to be the right course, and that is to refer this bill to a legislative committee for review. That is where it needs to go. As we said when the bill was tabled, it is a complicated and a very important piece of legislation, has very far-reaching implications, and we need to consider it very carefully and be sure we know everything that there is to know about this bill. Let's ensure that what we are doing is done correctly.

I look forward to that exercise and to the input from the public and from the various people in the mining industry who are concerned and involved in this particular piece of legislation. I look forward to having that kind of professional input into it, because I don't think any of us as individual members can look at a piece of legislation like this and truly evaluate what the impact can be without talking to a number of mining companies and mining interests and seeing how it impacts on them. We look forward to that opportunity.

Having said that, let me say that we do have to be very careful to protect the interest that we have in mining exploration in this Province at this point in time. The minister has been very proud over the past year or so of pointing out the tremendous increase in exploration activity in this Province, and we are all very pleased to see that. The economic benefits of that are not to be undermined. These are very good contributors to the economy, particularly in rural parts of Newfoundland. It creates tremendous amounts of employment and economic activity in small areas, in rural areas of the Province generally, and I think it is very important that we protect that. We don't want to destroy what we have created here. I think the Premier said the other day: Maybe we were a little hasty and we were too generous.

Maybe we were, maybe we weren't. I think we need to re-examine that in detail and see exactly whether we were too generous. As my colleague for Green Bay said, I don't think we can have a generic piece of legislation here that fits all situations. The Leader of the Opposition said I think the same thing, that maybe in cases such as the Voisey's Bay we should have a project agreement as we have done in Hibernia. We aren't here to discuss Voisey's Bay, we are here to discuss an amendment to the tax act which affects every mining development in this Province. We have to be cautious. While we want to attract investment, obviously we also have to be fair to the taxpayers of the Province and ensure that there is a reasonable rate of return to the taxpayers of the Province for these non-renewable resources.

Similarly, we have to ensure that there is a reasonable rate of return to the investors who put the money behind the exploration, who find these things. It is all very easy once somebody has made a major mineral discovery to say: There is all kinds of money there, now let's go in and take a huge share of it. But if the investment community out there, those people who are traditionally investing in mineral exploration, get the impression from this government, or more specifically from the legislation here, that the situation can change midstream, that there can be some doubt as to what the regime is going to be, then it destroys investor confidence. So we have to be very, very cautious of that, because so much can be impacted upon by the impression that is left - not only the impression but by, I guess, the environment that is left by the legislation. If we are going to continue to attract investments, then these people have the right to expect and know that they will, in fact, receive a reasonable rate of return while being fair, and I am sure that any good corporate citizen would want to be fair to the taxpayers of the Province for the benefit of harvesting these non-renewable resources.

I am just going to leave it there, Mr. Speaker. I am not going to get into the tax implications in detail now. It is far better done in committee when we have other resources available to us, when we have the resources of the mining community available to us, and we have had an opportunity to study it in detail and discuss it with them in detail. So I look forward to that opportunity, and I trust that at the end of the day government will be as willing to consider any amendments that may come forward, as willing as they were to put this matter out to committee, that if the committee does, in fact, come in and report with some proposed amendments that government would be prepared to listen to those amendments in the spirit in which I trust this has been put forward to the committees in the first place. I look forward to that exercise, as I am sure do the mining community and the investment community that supports the mining industry.

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

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

Mr. Speaker. I am pleased to have the opportunity to rise and speak just for a few minutes on Bill 43, An Act To Amend The Mining And Mineral Rights Tax Act. Last year around this time when we passed the Mining and Mineral Rights Tax Act, I spoke generally in favour of the principle of establishing the type of tax regime that would be more meaningful or amicable, more friendly, to the mining community to establish marginal mining operations in this Province.

I have lived in a mining community for the last thirty-one years, a mining community that has a producing mine. One of the things that has been lacking in Labrador, while we produced by far the greatest amount of wealth in the mining industry for this Province over the last thirty years in monetary value, one of the things we lacked in Labrador was a mineral explorations industry. There were only a few mining companies exploring for other minerals. The Iron Ore Company of Canada, through Labrador Mining and Exploration Company, had a small mining exploration operation ongoing basically through the Labrador trough, and that was about it, and a little bit up on the border and northwest, over around Strange Lake.

We didn't really have a very established mining industry until after the discovery in Voisey's Bay, and that accelerated a mining exploration industry that we have not seen before in this Province. Yes, we saw a small bit of mineral exploration with the so-called uranium boom in Canada in the late sixties. In the early seventies we saw BRINEX attempting to do a little bit of exploration in Northern Labrador, Northeastern Labrador, up around the Makkovik area, but nothing like we saw in the claims and the amount of exploration and the number of companies that were triggered, I believe, by the Voisey's Bay discovery. That is a very important industry. While I recognize the importance, and so does the government recognize the importance, of the established mines, there is also another industry out there called the exploration industry that was triggered by Voisey. Now that was triggered by Voisey because a whole bunch of junior mining companies had left Canada. The only people who were doing any type of exploration in this country, to any magnitude, were the established mining companies. The junior mining companies were all gone down to South America, Mr. Speaker.

The Voisey's Bay discovery triggered these junior companies coming in - as a matter of fact, back last October, I suppose, Diamond Fields itself was a junior mining company. Today it is a big player because of the discovery. Hopefully some of these juniors that were triggered by the Voisey's Bay discovery will become major players, there will be another discovery.

If we establish a tax regime or create the idea that we don't have a firm tax regime out there in the industry we may dry up that growth industry last year. Contrary to what Doug Howse suggested that we do, not concentrate on our natural resources but to concentrate on technology transfer and knitting products, Mr. Speaker - he was going to have us knit our way out of the recession, cookies and sewing bees and all that type of thing - contrary to that, I believe that our strength lies in our natural resources and the proper development of them.

Now, Mr. Speaker, I commend the government for taking a second look and passing this bill on to a legislative review committee. I firmly believe it should have been done through a White Paper. What the government should have done was establish a White Paper last May before they began to sit around without consultation and just do up legislation and then push it out. I think they should have sent out a White Paper, asked for input and then come in with legislation; and we could be debating it now. I think they could have done that.

I hope that this growth industry in Newfoundland this year, Mr. Speaker, the exploration industry which saw about $35 or $40 million spent in Labrador this year. Whereas the previous year there was, I would suspect, no more than a couple of million spent in the whole Province, this year we saw $35 to $40 million spent. I think next year, with the proper growth of that industry, we could probably see $100 million being spent, Mr. Speaker.

I hope that the mining community continues to think of this Province as being mining friendly, and will continue to explore in this Province and create this opportunity for junior mining companies, or allow these junior mining companies to come in. I hope we have an established tax regime that will allow junior mining companies to come in and explore more, because there are a tremendous number of jobs available in this exploration industry. The exploration industry in the Kirkland Lake area of Northern Ontario; thousands of people basically make there living right now from that exploration industry, Mr. Speaker.

We have seen the Springdale area develop into an exploration industry, largely due to a lot of the exploration that was ongoing on the Baie Verte Peninsula. I believe, and I hope, that the mining companies will continue to explore in Labrador. It is a tremendous opportunity for Labradorians to have a very productive opportunity for employment. Hopefully we will see some of these junior mining companies that would be out exploring find another Voisey's Bay or another Iron Ore Company or a Carroll project or a Wabush Mines project, or whatever it may be. That is what the ultimate aim of all these junior exploration companies out exploring is, to increase the inventory of mineral wealth in the Province and hopefully find a mine that can be developed.

With those few remarks, Mr. Speaker, I conclude. Thank you very much.

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

MR. HARRIS: Thank you, Mr. Speaker.

It is a pleasure to have an opportunity to speak on this piece of legislation. I think it is probably one of the most important pieces of legislation in this session, and it is on an area that is so crucial and key to the life and role of government in this Province. Exactly what should the people of this Province obtain from their resources?

It is crucial, and it is not just a problem for this session of the House or this year or this decade. It is a problem that has been part of this Province's history ever since people have been living here and came here from Europe to exploit the fishery, to build the railway in the last century, to develop the water power resources in Churchill Falls and the forest resources in this century. What is the role that government plays in encouraging development and ensuring that the people of this Province get a fair return from these resources? Even the word that is used to describe the extraction of resources is tainted, Mr. Speaker. The word is exploit. We will exploit the mineral resources of the Province. That word is tainted because of its connection with exploiting people, taking advantage of people, extracting a price from the people and from the government as a price of development.

It seems that every time this Province is on the verge of an economic boom events or individuals or governments or some environmental crisis or disaster conspires to take it away from us. We saw in the mid-1970s after the introduction of the 200-mile limit an opportunity for this Province in the fishery to increase investment and to have more jobs and to get more deeply involved in secondary processing and value-added. We did. Yet, within ten or fifteen years of the mid-1970s the resource became so depleted as to require it being shut down in 1992. The railway was built at great cost to the people of this Province, building up a debt so large that when combined with the debts of the First World War it forced this Province into giving up democratic legislature in 1934. Churchill Falls obviously is the modern example of how Newfoundlanders pay the price for development.

What we have here is I think an honest attempt by this government at this particular juncture to put before the House certain principles and rules that may in fact be the appropriate ones. Maybe they are. Certainly to spell out in a piece of legislation, which I think is probably for the first time, that the declared policy of the government is that the resource be shared fairly between the Province and the developers of the resources, it may sound like a motherhood statement, but I think it is the first time it has appeared as a basic policy statement in a piece of legislation; and the second principle, that the greater the wealth derived from the non-renewable resource the greater must be the return accruing to the people of the Province. I want to say a few things in principle about this legislation and about what led to it, Mr. Speaker, because I think the Leader of the Opposition hasn't properly stated the development of this legislation.

We were here around this time last year and perhaps a little earlier, the 10th or 12th of December dealing with amendments to this act and they were said at that time to be designed to promote exploration, but it was, Mr. Speaker, about two months after the Diamond Fields stock had skyrocketed on the Vancouver Stock Exchange, and while the members of the official Opposition supported wholeheartedly the legislation, at least one member and it was this hon. member, rose to object to setting up a regime which was going to ensure that people who paid mining taxes were given a tax holiday from income tax, and, Mr. Speaker, Voisey's Bay was specifically mentioned as a possibility of a bonanza that would in fact lead to a circumstance where they were having a total tax holiday, supposedly in order to promote exploration. It had already been discovered, Mr. Speaker, and this government well knew it. This government well knew that Voisey's Bay had already been discovered at that time.

There are those who have said and the Member for Mount Pearl, the other day, was one of them but I am not trying to point the finger at him, that to bring in legislation now is changing the rules in the middle of the game and I think some people from the industry have said that as well, but I don't think that is right, Mr. Speaker, I don't think that the legislation that was passed last year is what promoted exploration in this Province in the past year, I think it was Voisey's Bay itself as the Member for Menihek has just said, that the prospect of a mega find in Labrador peaked an awful lot of interest not only in Labrador, we have seen the permits and licences staked out in Labrador for the last year, but we have also seen a renewal of interest in other mining activity in the Province and once people look your way, Mr. Speaker, whether it is for Labrador, they also see the rest of the Province and they pay more attention to the other geological structures that are there.

So I don't think it is unfair to the mining companies to say that this Province is going to extract a fair share of the wealth, and I don't think it is unfair because I don't think that the vast majority of what happened in the last year really came as a result of the Mineral Tax Act. I mean, governments like to think that Legislative changes promote all sorts of things but I think in reality, it is the find at Voisey's Bay which promoted a lot of exploration in the past year so I don't think that anybody can claim that we are changing the rules after they have spent their exploration money. Diamond Fields had already been discovered so I don't think anyone should be concerned about that.

I want to say I also am pleased that the Premier has stated the position that he did the other day that having put this bill before the House as a statement of the government's position, is fair warning to mining companies that the Province intends to have a regime that provides for a fair return and for a greater return depending on the amount of the resource. The details can change, but I think that the basic principle is presumably that although we are anxious to encourage exploration and development, that we are not prepared to be a banana republic or not prepared to be a place where you can come and take away the resources and leave a few crumbs behind. I am not talking about the details of this act. There are some interesting ideas, some new ideas, there, but I think there is a difference between being friendly to industry and development and being taken for a ride.

I am pleased that the Premier has stated a willingness to have this legislation looked at closely and debated, and I think it is fair to consider that there have been, in the past, studies done, paid for by this government, Royal Commission in the mid-seventies, on determining what is the best way for a Province like Newfoundland to set up a regime which guarantees a fair return to the Province, and what is the best way to promote activity and get a return to the Province? Is it by increasing royalties? Is it by income tax? Is it through putting money in the hands of people who are actually going to spend it and generate economic activity? So it is worth looking at some of those principles a little bit more closely and seeing how they might be applied here. I don't think we need to spend a long time on that; two or three months, or four months, to review these questions and issues and determine how we are going to properly deal with this. It is not something that can be done at the last minute before Christmas.

One wonders, for example, why the bar is set so high with respect to the taxes imposed, by virtue of section 4 of the act that only applies when the gross income is more than $100 million in a year. What are we talking about here? Are we talking about only one mine, or are we talking about other mines that make more than $100 million gross income in a year?

AN HON. MEMBER: (Inaudible).

MR. HARRIS: I don't know. We will have to find out now in a minute. Maybe we will find out we have mines we didn't know about making over $100 million a year. We are just looking at subclause 4.(2)(9) on page 7. The bill says, "The tax imposed under this section is not payable in a year in which the gross income of a non-renewable resource developer is less than $100 million." The bar is set pretty high for collecting this tax - you have to be making over $100 million a year in gross income - so one wonders about the specific provisions of this legislation.

I have a question and maybe the minister, when he closes debate on this bill, can answer a few of these questions. How much does this Province collect in income tax from mining companies in any event? One of the things that happened after Confederation was they introduced income tax to corporations, a novelty in Newfoundland. A novelty in Newfoundland after Confederation was to have income tax on corporations. I am wondering whether this Premier thinks it was a mistake to introduce this income tax on corporations and we are going back the other way. There is a lot of theory to that. There is a lot of theory that corporations should pay no tax - no tax - only individuals, and looking at the legislation coming to this House in the last couple of years maybe the Premier believes in that. Maybe he does. We had EDGE and double edge, and now we have -

MR. WOODFORD: Now you have a double-edged sword.

MR. HARRIS: We have the double-edged sword.

If the Premier is a proponent of that there, perhaps he should expound on it.

I want to ask the Minister of Finance, in closing debate at second reading, if he can tell us: What amount of money does the government collect in income tax from mining companies on an annual basis; and what amount of money does he collect in mineral taxes on an annual basis?

There was a time when the royalties from IOC were minuscule. Now granted, it had a very big wage payroll, and income tax was collected from the individuals who benefited from that payroll, but let's face it, it has been hauling hundreds of millions of dollars of ore out of Labrador for the last thirty years. I don't know what it paid in royalties. It wasn't paying very much for a long time. I'm not a big analyst of tax regimes but I know in looking at figures from time to time and seeing what IOC were paying in royalties for what it was hauling out of Labrador - and not only IOC but Wabush Mines as well -, they were very modest sums of money. The fiscal regime of this Province suffered as a result of this Province not getting a fair return on these resources.

ASARCO in Buchans is another example. It mined the place out for forty years, high-graded it for forty years, and then walked away from the people of Buchans, walked away from the assets. There are no depletion allowances, there is no - I'm sorry, depletion allowance is not the correct term, but no fund set up to replace the economic activity at the end of the day. There is a big problem in this country - not only in Newfoundland but in this country generally - of single-industry towns, particularly resource-extraction towns, that have a short life. At the end of the day they walk away having made their profits for a certain number of years leaving behind the people, the government, usually to look after the economic and social impacts of what happens in a particular town.

These are all important issues. They all come up in this particular bill and deciding how we at this stage of our political, economic and fiscal life try to make sure that in ten years' time we aren't still looking at closing down hospitals, laying off public servants, laying off police officers, laying off people even in boards and agencies that don't get money from this government, just to make it look good. That is what we are doing now. We want to see a situation where the resources of this Province are used to ensure that there is a benefit to the people. Not only the people who work in the industry, but also the people of the Province who have a right to a fair return for these resources.

We haven't dealt with other aspects of Voisey's Bay. This is not a Voisey's Bay bill, although it is meant to deal with the issues that arise as a result of that discovery. Voisey's Bay development itself requires an awful lot of very serious problems to be addressed and resolved, and very serious and fundamental concerns to be resolved. The issues raised by the Inuit and by the Innu with respect to their land claims issues and their social impact issues, those have to be resolved and addressed forthrightly, honestly, with respect for the rights of the aboriginal people of this Province, in a way that has not been done to this date. Until those problems are addressed and addressed fairly and justly then this development is not going to proceed in any event.

I think the company is well aware of that. I'm not sure the government is, but I think the company is well aware of that and is interested in finding out exactly what it is it has to do to satisfy the concerns of the Innu and the Inuit in Labrador. That being said, Mr. Speaker, I would like to ask the minister to deal with some of the micro issues in terms of how much revenue is being extracted now from mines and minerals in terms of royalties, in terms of mineral taxes and in terms of corporate income tax paid by mining companies. If he would address those that would give us a good starting point in looking at some of these issues.

I would like to see the committee of the House, the Legislative Committee hear the submissions and invite submissions from people knowledgable in the field of resource management and economic rent. Maybe some people at this university or others could be invited to talk to the committee and give their views just to make sure that we are not overlooking some fundamental issues here because of the importance felt by the governments in addressing this issue. I am glad the government has put something before the House that gives notice to the mining companies and to those involved in the industry that this Province intends to take seriously its desire to ensure that the Province obtain a fair and just return on its resources. The details can be subject to change as a result of whatever representations are made to this committee and to this House. I hope that the Premier and the Cabinet have an open mind with respect to possible improvements to the legislation for the benefit of the people of this Province.

With those remarks, Mr. Speaker, I end my second reading debate.

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

MR. DICKS: Thank you, Mr. Speaker. Many questions were posed, I don't propose to answer them at this point. I think if I were able to do so, (inaudible) the answers to all the concerns raised by hon. members we would not need committee hearings. I will just say that I think hon. members have given the context of what I expect the committee will consider and that is the balance between fair return to the taxpayers of the Province and fair return to the people that are going to be developing and selling the metals that will eventually be produced at Voisey's Bay.

With that, Mr. Speaker, I move -

AN HON. MEMBER: (Inaudible).

MR. DICKS: Well, Mr. Speaker, I have all the answers. I just think that the Socratic method of discovery through questioning is a much more satisfying process to illicit then through the question and answer method.

So with that, Mr. Speaker, I move second reading.

On motion, a bill, "An Act To Amend The Mining And Mineral Rights Tax Act," read a second time, ordered referred to a Committee of the Whole House on tomorrow. (Bill No. 43)

MR. FUREY: Mr. Speaker, I move, pursuant to Standing Order 54.2(3) that the bill entitled; "An Act To Amend The Mining And Mineral Rights Tax Act", known as Bill No. 43 be referred to the Government Services Committee.

On motion, Bill No. 43 referred to the Government Services Committee on December 18, 1995.

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

MR. FUREY: Mr. Speaker, I apologize that I could not give the hon. Opposition House Leader the agenda for tomorrow but the Government House Leader should be back.


MR. FUREY: Regretfully.

AN HON. MEMBER: We can do better without him.

MR. FUREY: But I am sure that he will be in touch with his counterpart sometime tomorrow morning.

Mr. Speaker, I move the House adjourn until 2:00 p.m. tomorrow.

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