The House met at 2:00 p.m.

MR. SPEAKER (Snow): Order, please!

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

MR. T. OSBORNE: Mr. Speaker, I ask leave to read a tribute in the House.

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

AN HON. MEMBER: By leave.

MR. SPEAKER: By leave.

MR. T. OSBORNE: Thank you, Mr. Speaker.

Mr. Speaker, I believe it is fitting to take a few minutes of the time of the House of Assembly today to pay tribute to one of Newfoundland and Labrador's finest and best known musicians, John White, who sadly has just passed away after a long and productive life.

John White was known throughout this Province and beyond our shores as one of Newfoundland and Labrador's best traditional singers and musicians; and he practised the art well into his senior years at folk festivals and parties all over the Province. He was a true pioneer of Newfoundland culture, carrying the distinctive styles of song and music onto the airwaves through the medium of television that evolved through his lifetime.

He became a national icon, a Newfoundland treasure, and his influence was felt by countless musicians who grew up and performed under his wing. These musicians, I am sure, will remember him each time they perform certain traditional Newfoundland songs, and they will tell their audiences and children for generations to come about the man that we all had the privilege of hearing firsthand. Through the magic of television, we will have the privilege of seeing and hearing John White for many years to come, but we will miss the man himself.

I had the privilege of having John White and his family as constituents in St. John's South. His mother and her family lived on Patrick Street before she developed advanced Alzheimer's disease. She was then placed in special care. For many years, as her disease was progressing, John lived with his mother, and despite serious problems with his own health, nursed and cared for her.

He was a caring man, a man full of fun and honour, a man with a big heart, and a man much admired and much loved by those who have had the privilege of knowing him. We can hold him up with pride to the world as the epitome of the true Newfoundlander.

Mr. Speaker, I ask that the House send appropriate condolences to his family.

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

MS KELLY: Thank you, Mr. Speaker.

I concur with the comments of the Member for St. John's South. Actually, after Mr. White's death was announced yesterday, I did some commentary for the media emphasizing the importance of what John contributed to everyone in this Province, but in particular to our culture.

I remember growing up, some of the first television shows, actually, that were a great success in this Province - All Around The Circle was due in no small part to John White. I know that everyone in the music industry today mourn, and indeed all of the Province does. He will be sorely missed.

He was very active, you know, even through his recent illness. Up until three weeks ago, he actually took part in a recording and we all looking forward now to seeing this very last effort of a truly great man, one who contributed so much to the very important cultural history of our Province.

As a government we will certainly ensure, on behalf of all us in this Legislature, that the appropriate condolences and expressions of sympathy are sent to his family.

Thank you.

MR. SPEAKER: The hon. the Member for Signal Hill - Quidi Vidi.

MR. HARRIS: Thank you, Mr. Speaker.

I would like to join in recognizing the contribution of John White to the culture of this Province. Those who celebrate our culture, Mr. Speaker, through performance or through a collection and respect for that culture, have a very important place in our society, Mr. Speaker.

John White was very much a part of that, both through his performance and through his concern and interest in the traditional songs of Newfoundland and of St. John's. He played an important role in editing the Ballads of Johnny Burke and published them. As previously mentioned, he was a well known figure at folk festivals, through CBC radio and television, and his contribution to the local culture and performance circuit will be remembered by all, Mr. Speaker.


Statements by Ministers


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

SOME HON. MEMBERS: Hear, hear!

MR. A. REID: More good news, Mr. Speaker.

I rise today to announce a new, two-year Provincial Home Repair Program for this Province.

This is a made in Newfoundland and Labrador program for senior citizens, individuals with disabilities, aboriginals and low income families, including social assistance recipients.

SOME HON. MEMBERS: Hear, hear!

MR. A. REID: This program was designed by Newfoundland and Labrador Housing Corporation and involves federal/provincial expenditures of $14 million over the next two years.

SOME HON. MEMBERS: Hear, hear!

MR. A. REID: This represents an increase of $3.8 million in provincial funding allocations over the next two years.

It is significant, Mr. Speaker, in the sense that it enables clients to undertake more substantive repairs to their homes, and it will more than double the level of service to the working poor.

This new housing repair program will address the needs in a more responsive manner. It will make it possible for seniors to remain in their homes and maintain independent lifestyles for longer periods of time. It will enable low-income home-owners to correct fire, life-safety and other major deficiencies in their homes. For fire safety purposes, Mr. Speaker, Newfoundland and Labrador Housing will insist that every home repaired under this program will have to be equipped with a smoke or heat detector.

SOME HON. MEMBERS: Hear, hear!

MR. A. REID: It will provide assistance for those requiring accessibility modifications. It will enable Newfoundland and Labrador Housing to better respond to urgent repair needs of social assistance recipients. It will allow Newfoundland and Labrador Housing to upgrade the quality of housing to approximately 2,000 low-income households and provide emergency repairs and assistance to an additional 1,400 households over the two-year period.

SOME HON. MEMBERS: Hear, hear!

MR. A. REID: Mr. Speaker, it is anticipated that this new program will create more than 650 direct seasonal jobs in the Province's construction industry over the next two years.

In part, this program was made possible as a result of the Social Housing Agreement which the Province signed last year with the federal government. The agreement provides more flexibility and allows Newfoundland and Labrador Housing to redirect federal RRAP funding.

Mr. Speaker, both the Throne Speech and the Budget Speech enunciated a renewed program commitment to Social Policy Reform; one that includes new ideas and innovated measures to bring about meaningful change. The new Provincial Home Repair Program will help those who are most in need to better provide for themselves and their families. It is an important component, Mr. Speaker, of this government's social policy reform.

It is my intention, Mr. Speaker, to make complete packages available to all members of the House immediately.

Thank you, very much.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Conception Bay South.

MR. FRENCH: Thank you, Mr. Speaker.

I would like, of course, to thank the minister for a copy of his statement. I can only say to the Minister of Municipal and Provincial Affairs, thank God we have this minister over there because, with the exception of him, I believe he is the only one who every once in awhile gets up and throws out a little tiny bit of good news anyway.

We welcome your news today, Minister. It is nice to see that we do have this extra funding. I believe at present there is something like a three-year waiting program on RRAP, and I would be very interested to see exactly how far we go with this program in cleaning up the backlog. I certainly welcome the news that each home will now - if it does not already - have at least a smoke detector installed in it.

We can only say that as long as this provides employment it will allow some of our seniors to stay in their homes for awhile, and it will certainly do much needed repairs to a lot of the homes in the Province of Newfoundland and Labrador.

MR. SPEAKER: The hon. the Member for Signal Hill - Quidi Vidi, does he have leave?


MR. SPEAKER: By leave.

MR. HARRIS: Thank you, Mr. Speaker.

This is a very welcomed announcement for many people. There are so many people who have been waiting anxiously for the program to be announced and who are in desperate need to have repairs done.

I want to congratulate the minister and the government on building some flexibility into federal programs which often do not relate to the needs of people in this Province. I would hope that flexibility continues with respect to the rules that apply so that people are not excluded for arbitrary reasons when they have an equal need for housing. I hope we will be able to work with my constituents, the minister's office, and Newfoundland and Labrador Housing, to deliver this program to as many people as possible.

MR. SPEAKER: The hon. the Member for Cartwright - L'Anse au Clair, does she have leave?

AN HON. MEMBER: Yes, Mr. Speaker.

MR. SPEAKER: By leave.

MS JONES: Thank you, Mr. Speaker.

I wanted to rise first of all and comment on the great speed and efficiency with which this minister operates. It was only two weeks ago in the House we were wondering where this program was, and here today we have a completely revised, more flexible program for the people of the Province. I want to commend the minister on incorporating that flexibility within the program and allowing seniors and people with disabilities to be able to participate.

I also want to say, Mr. Speaker, that it is welcomed news for home-owners around the Province who avail of this program. About 130 people in my district have been awaiting the announcement of this program in order to partake in it, to do the necessary repairs and upgrading that they need done to their property. I hope we will continue to see programs like this so they are able to meet the needs of these people who are on low income.

MR. SPEAKER: Order, please!

The hon. member's time is up.

MS JONES: Thank you very much, Mr. Speaker.

MR. SPEAKER: The hon. the Minister of Fisheries and Aquaculture.

MR. EFFORD: Thank you, Mr. Speaker. More good news.

As the Province's Minister of Fisheries and Aquaculture, it gives me great pleasure today to inform the House about a new federal-provincial $5 million Aquaculture Working Capital Fund.

SOME HON. MEMBERS: Hear, hear!

MR. EFFORD: Along with my colleague, Hon. Beaton Tulk, and the federal Secretary of State for Fisheries and Oceans, I participated this morning in announcing this new fund for the farmed shellfish sector.

A source of working capital is vital to the survival of our shellfish aquaculture industry. Lack of such capital would be a major impediment to the full commercialization of shellfish species. For most aquaculture enterprises, it takes a minimum of three years before operations see a positive cash flow. In the interim, debt must be serviced, and salaries and other operating expenses paid. In most, if not all, cases, personal funding of the producers is exhausted in the process of developing the aquaculture site beyond the experimental stage.

Many producers have reached the stage where they can begin full commercialization, but only if they have the necessary operating capital to do so. Despite numerous representations by the provincial government and industry itself, Mr. Speaker, commercial banks and other similar financial institutions are not willing to provide working capital loans for aquaculture operations. They do not deem fish inventory to be acceptable security for loans.

The Department of Fisheries and Aquaculture estimates that $5 million in working capital support will be required to fully commercialize the shellfish industry. I am happy to inform the House that the new Aquaculture Working Capital Fund we announced this morning is providing that $5 million. It is funded by a contribution of $3 million from the Canada-Newfoundland Agreement on Economic Renewal, and $2 million from the Canada-Newfoundland Strategic Regional Diversification Agreement. This $5 million will lever an additional $10 million of investment in the industry.

Until today, shellfish growers have faced serious funding challenges. With this new fund, we predict that the total production of cultured blue mussels will reach 1,600 tonnes this year, and will continue to have strong growth over the next several years.

This is a strategic investment in a growth industry. It is an investment in rural Newfoundland and Labrador. It ensures that our shellfish sector will reach its commercial potential to become a viable player in a rapidly growing and internationally competitive industry. I must emphasize that only those companies who have demonstrated their investment in the industry and whose business plans show they have the capability of moving forward with shellfish commercialization will be considered for assistance under the new fund.

I must note that today's announcement was made at Aquaculture Association of Canada's Annual Conference and Trade Show being held here in St. John's. This important forum is co-hosted by the Aquaculture Association of Canada, with more than 300 delegates from across the country registered for this important forum. A related event to take place later is the official opening of a $1.2 million aquaculture training facility at the Fisheries and Marine Institute of Memorial University. Also funded in part by the Agreement on Economic Renewal, this facility is a good example of government, industry and educational institutions working together to advance aquaculture in the Province.

Mr. Speaker, government is committed to the commercial development of our aquaculture industry. We know where the markets are and we know what it takes to break into these markets. Our ongoing research and development efforts and the new operating capital fund have laid the groundwork for achieving that goal.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

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

MR. FITZGERALD: I say to the minister, he is 100 per cent right. Mr. Speaker, this is certainly positive news. I compliment the minister for providing the news and providing me with a copy of his news release.

The shellfish industry in this Province certainly provides one opportunity for rural communities in Newfoundland and Labrador; when you see $5 million put forward, and it is put forward in such a way that those people will be able, it is my understanding, to access this money now. Whereas what the minister states is true - the complaint that I have heard is that people involved in the aquaculture industry, especially the shellfish industry, find it very difficult to get operating money from the ordinary loan agencies in this Province.

It is certainly positive news. I have one concern, that the minister himself would have any direction as to where this money would be spent.

Thank you.

MR. SPEAKER: The hon. the Member for Signal Hill-Quidi Vidi, does he have leave?

AN HON. MEMBER: No, Mr. Speaker.

MR. SPEAKER: No leave.


Oral Questions


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

MR. SULLIVAN: Thank you, Mr. Speaker.

My questions today are to the Minister of Health and Community Services. A surprise, I would say to the Government House Leader.

Minister, on May 8 in this House you were asked by the Member for Cape St. Francis why this Province will not cover the cost of new drugs to improve the quality of life for individuals with multiple sclerosis. You said that evidence must be provided clinically to support the usage of these drugs. Betaseron was federally approved in July 1995; Copaxon was approved in September 1997; and Rebif was approved in February of this year.

I ask the minister: Why are you making excuses based on false information?

MR. SPEAKER: The hon. the Minister of Health and Community Services.

MS J.M. AYLWARD: Thank you, Mr. Speaker.

I have not, and I did not, make any statement based on false information. I will say again, that every single year the federal government approves hundreds and perhaps thousands of new drugs on the market. Unfortunately, in this Province we only have $50 million, which is quite significant, but certainly not enough to introduce the thousands of new drugs that are introduced every year via the federal government's approval.

In this Province, what we have done, Mr. Speaker, is try to make our decision on the best evidence available. We, in conjunction with other Atlantic Provinces, have put together a group of professionals with expertise to make recommendations to us. We have asked them to do that on a number of drugs and we have made decisions on that. That is where we are with this particular drug. My position, and the information, are as factual today as they were when the previous member asked the question weeks ago.

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

MR. SULLIVAN: Thank you, Mr. Speaker.

On May 8, on three different occasions, to three different questions, you referred to evidence based decisions. You went on to say that what we have to do "is to have the evidence to support the clinical trials usage...," and so on; and on other occasions, on each response.

Minister, over 80 per cent of Canadians have access to these new breakthrough therapies that are assisting people. People in Ontario, Quebec, Manitoba, Saskatchewan, British Columbia and the Yukon; all these people can be relieved from their suffering. Why can't Newfoundlanders and Labradorians have the same opportunity?

MR. SPEAKER: The hon. the Minister of Health and Community Services.

MS J.M. AYLWARD: Thank you, Mr. Speaker.

With the hundreds of new drugs that are being introduced into the market every year, people who want to avail of those drugs, if they want to avail of them under our drug formulary provincial program, know they have to be approved on that formulary. We try to make the best decisions.

As I pointed out, Mr. Speaker, in addition to the betaseron, for example, for multiple sclerosis, there is a new drug called aricept that is there for Alzheimer's patients, and the numbers of other drugs that come out each year. Right now, you have probably heard, Mr. Speaker, that there are new drugs to treat cancer whereby it actually attacks the blood circulation around the tumour. There are so many new drugs that come out, Mr. Speaker, every single day and certainly every single month and year, that we have to look at our pool of resources and make the best decisions on the best evidence we have. That is why, Mr. Speaker, we rely on the experts for our information and stand by the recommendations that they will make to us.

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

MR. SULLIVAN: Thank you, Mr. Speaker.

There are three drugs that have been successful in dealing with remitting MS. It has been almost three years since one of these, Minister, and we have not added one of these three. All of the other provinces I named have one or two and some are looking at three.

All I am asking you, Minister, is to approve at least one of these, if not all three. Minister, do you expect people suffering, who can get relief from this, to have to leave our Province to go to another province, as people have done, to try to get treatment for a disease that is causing a great amount of suffering to them?

MR. SPEAKER: The hon. the Minister for Health and Community Services.

MS J.M. AYLWARD: Thank you, Mr. Speaker.

If we do add these drugs, it is not because the hon. member across the way has asked me to do it. If we add the drugs, it will be after we get the recommendation and work with a group of expert physicians and other clinical pharmacologists who we have working on our behalf in the Atlantic region. That is how we make our decisions. When we change, if we change, and how we change which drugs are added to the formula, will be based on the best information that we have received, based on our financial capability to pay, when those recommendations are made by the experts in the field.

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

MR. SULLIVAN: Thank you, Mr. Speaker.

Experts all over this country have given their approval after clinical trials have proven that these drugs are important in relieving suffering for people with MS, and 80 per cent of Canadians now have access to them. People in Newfoundland and Labrador do not have access, I say to the Minister. They have passed the test and are federally approved.

Now while there is a fair cost associated with those drugs, and I certainly admit that - the costs are well documented there - the cost of not making these available can be substantially greater. Hospitalization of these people -

MR. SPEAKER: The hon. member is on a supplementary, I ask him to get to his question.

MR. SULLIVAN: In light of the fact that people, because they do not get these drugs, have been hospitalized, have lost work, have had to resort to pensions and have home care costs, I ask the Minister: Has she considered the cost of not approving those drugs here to the economy of our Province, and directly to the budget of the Health Department?

MR. SPEAKER: The hon. the Minister of Health and Community Services.

MS J.M. AYLWARD: Thank you, Mr. Speaker.

I can clearly say we have factored in the cost of new drugs and what it would mean to our formulary, just as we look at the cost of smoking to our health care system, drinking to our health care system, new drugs to treat schizophrenia, alzheimer's and cancer; all of those impacts. Unfortunately, Mr. Speaker, we have a body of money that we have to use, in the amount of $50 million, that we distribute between our indigence program and our seniors' program and we have to make the choices we think are best to meet the needs of those that require the drugs. That is what we are faced with, Mr. Speaker.

Yes, I would like to be able to include every single new drug that comes on the market once it has proven itself to be clinically effective. However, Mr. Speaker, unfortunately, on this side of the House, we do not have the luxury of throwing everything on the table. We have to make very tough choices and very tough decisions. We have done that and we will include those decisions, we will make the choices based on the best information we have, when it is made available to us by our Atlantic group. That is how we will make those decisions, Mr. Speaker.

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

MR. SULLIVAN: Thank you, Mr. Speaker.

On May 21 in this House, I introduced a Private Members' Resolution calling on this government, in particular, to promote accessibility to new breakthrough therapies that have been clinically proven to significantly improve the quality of life for any individual with multiple sclerosis. In fact, the Premier rose in his seat and suggested an immediate vote which passed unanimously on this resolution.

I ask the minister now, in the absence of the Premier - and I think the minister was attending meetings at that particular time: Would she now stop paying lip-service and honour that resolution, and give people who are suffering from multiple sclerosis their lives back?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Minister of Health and Community Services.

MS J.M. AYLWARD: Mr. Speaker, I don't have the resolution in front of me but I do believe the intent was to do whatever was possible within our means. At least that was my understanding of that intention of that resolution.

I will say again, Mr. Speaker, I think it is important to note that this is not in any way an attempt to not acknowledge what happens in situations where people have multiple sclerosis. It is not to undermine what people go through who are suffering from schizophrenia, from alzheimer's, from cancer, or any of the other debilitating new diseases or old diseases that we have, Mr. Speaker. What I am saying very clearly is that we have a certain amount of money, we have hundreds of different drugs, we will make the decision when it is brought to us.

Our Atlantic group, working in conjunction with Prince Edward Island, New Brunswick and Nova Scotia, are working collectively on this issue, as well as other drugs that have been brought forward to our attention to make a decision on, and that is how we will make our decisions, Mr. Speaker.

MR. SPEAKER: The hon. the Member for Conception Bay South.

MR. FRENCH: Thank you, Mr. Speaker. My questions today are for the Minister of Environment and Labour.

Minister, this government, and you as Minister of Environment and Labour, had the opportunity in the past year, since receiving the report of the Statutory Review Committee on Workers' Compensation, to do the just and honourable thing for workers' compensation in this Province by reforming the callous, uncaring, and condescending workers' compensation system. I can only say today, Minister, that you have blown it.

Why, for example, after years of slashing benefits, have you seen fit only to give a small portion of injured workers a measly 5 per cent increase in benefits when so many of them are struggling to survive so far just above or around the poverty line? Why did the minister ignore the review committee's recommendations for a solid increase in benefits?

MR. SPEAKER: The hon. the Minister of Environment and Labour.

MR LANGDON: Thank you, Mr. Speaker.

As I said to the Leader of the Opposition last week, as the commission's finances improved we passed on that improvement to the injured workers. Basically we operated, as I said, within the time frame of 2012 as a mortgage date. The flexibility that was afforded to us, we passed that on to the people who are on the system, Mr. Speaker.

MR. SPEAKER: A supplementary, the hon. the Member for Conception Bay South.

MR. FRENCH: Thank you, Mr. Speaker.

I ask the minister: What about those injured workers with long-term disability who are unable to do their jobs because of injuries they have through no fault of their own? Why has the minister abandoned them? Is he punishing them for not recovering from their injuries?

MR. SPEAKER: The hon. the Minister of Environment and Labour.

MR LANGDON: No, Mr. Speaker, nothing could be further from the truth.

With the latest improvements that we made with the extra CPP benefits going from 80 per cent to 75 per cent, the worker on long-term right now is getting approximately 90 per cent of pre-injury net pay. Obviously we would like to be able to do better and as the system improves we would like to do that; but at the end of the day, as I said earlier, as I said on Friday, we want to maintain the integrity of the system to provide for the injured worker a fund that is there when they need it.

Obviously, Mr. Speaker, in any situation you cannot please all of the stakeholders; but I think in this situation we have done what we could with the flexibility that was there, and as the system improves we can do further benefits to the worker and to the employer as well.

MR. SPEAKER: A supplementary, the hon. the Member for Conception Bay South.

MR. FRENCH: Thank you, Mr. Speaker.

Minister, I also ask: Why is the government continuing to treat injured workers with suspicion? This cap on rates entrenches many injured workers in abject poverty. Does the minister accept that injured workers are off work legitimately? If he does, how then does he expect them to cover their cost and pay their bills on the level of income with which he has left them?

MR. SPEAKER: The hon. the Minister of Environment and Labour.

MR LANGDON: Mr. Speaker, we want to operate on the premise that every person who is on the system is legitimate. Obviously, if an injured worker is there through no fault of his own - and I would assume that of 100 per cent of the people who are there - then there is no witch-hunt from me.

Basically what I want to say, Mr. Speaker, is this: To maintain the financial stability of the system, and viability, we are doing that. What the system can afford to give the worker, that is basically what we have done.

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

MR. FRENCH: Thank you, Mr. Speaker.

I would also like to ask the minister today: What assurances can he give the House and the injured workers that the opinion of their physicians will be the opinion that is certainly best considered and listened to, and not overruled by the Commission? Also, Mr. Minister, what assurances do we have that the horror stories about deeming will not continue during the one-year, so-called pilot program?

MR. SPEAKER: The hon. the Minister of Environment and Labour.

MR LANGDON: Basically, Mr. Speaker, I explained deeming on Friday. It is not a one-year pilot project. Many of the things that we talked about - the flexibility of the hours, the labour market information, the transferrable skills, the involving of the injured worker in the deeming process - are already taking place.

What I asked the Commission to do, from the people who are there - a person who is an employee's rep, a person who is an employer's rep, a person at large, to monitor to make sure that what the Commission is actually saying they are doing is being done. And I would hope they will not have to ask the minister to keep their feet to the fire. These people who are on the Commission's Board of Directors represent the system, and I would hope they would do their job.

Basically the deeming process, as I see it, has caused a lot of problems for the injured worker, but I believe we are on the right track. We are doing it now, and I believe that at the end of the year when the final report comes back to me, the injured worked will indeed have found the system friendly to him.

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

MR. OTTENHEIMER: Thank you, Mr. Speaker.

My questions this afternoon are for the Acting Minister of Justice or Attorney General. They have to do with a decision last week, a unanimous decision as rendered by the Court of Appeal, dealing with the matter of Mr. Ronald Dalton. At that time, Mr. Dalton's second-degree murder conviction was set aside and a new trial was ordered.

My question to the acting minister relates to the fact that in part, Mr. Speaker, the Court of Appeal says the following: The resolution of this appeal leaves unanswered the deeply troubling question of how this man could have passed eight years of his life in jail before substantial grounds challenging the integrity of his conviction were brought on for a hearing.

Mr. Speaker, there are many important issues, many fundamental issues of justice that are contained in this particular decision. I ask the Acting Minister of Justice and Acting Attorney General: Has this decision been reviewed by the department or by government generally? And what steps are presently being taken to review this very important decision?

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

MR. DICKS: Thank you, Mr. Speaker.

The decision will be reviewed by the Department of Justice and any appropriate action will be taken.

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

MR. OTTENHEIMER: Thank you, Mr. Speaker.

In the comment made by the acting minister that there will be a review, I would ask the minister: Will he include in this review the present provisions of the Newfoundland Legal Aid regime which in many ways limit the access to justice by many of our citizens? And, I would ask the minister: Will the review of this decision include the present law and the present regulations as they exist to the Newfoundland Legal Aid Commission restricting and limiting, primarily for budgetary reasons I might add, access to justice initiatives and access to justice principles?

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

MR. DICKS: Thank you, Mr. Speaker.

I am not really sure if that is part of an appropriate review. The Legal Aid system covers certain matters; those would be criminal justice and family matters. If the hon. member's issue is to expand it beyond that to include other forms of aid that are not covered under the system, I am not sure that would be appropriate nor arise out of this particular decision. If the decision points to some inadequacy of the government or its system in providing appropriate representation then that, of course, would be a matter for appropriate review.

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

MR. OTTENHEIMER: I would request a firmer commitment from the minister, and it is for the following reason: At the end of the decision, Mr. Speaker, the Justices, the three Justices, unanimously state that undoubtedly those charged with the administration of justice and the provision of legal services in this Province will feel constrained in due course when satisfied that collateral inquiry will not impede the realization of justice on retrial, to receive explanation why a citizen languished in prison for eight years before substantial challenges to the justification of his presence there were brought before this court for hearing.

In view of this wording which is at the very end of the decision - the unanimous decision, Mr. Speaker - I would ask for a commitment from this minister to ensure that the provisions and the limitations and the present regulations as they relate to the Legal Aid Commission in this Province will be fully reviewed and addressed.

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

MR. DICKS: Thank you, Mr. Speaker.

What would be a fundamental concern is the issue of delay and, as the hon. member says, why it was not brought forward for eight years. Having said that, just from the quote the hon. member reads, it does not seem to me to be an issue regarding regulations so much as perhaps the practice of the corporation and the commission, whether or not the lawyer acted in a timely fashion.

Mr. Speaker, all we can appropriately say at this stage is that the decision will be reviewed, that appropriate action will be taken. Whether or not that necessitate a change in the administration of Legal Aid or its regulation I would be unable to say right now, but we will certainly review the decision. Matters like this cause us great concern and we wish to ensure that the system of justice works fairly for all.

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

MR. T. OSBORNE: Thank you, Mr. Speaker. My questions today are for the Minister of Environment and Labour.

Mr. Speaker, while I would one of the first to celebrate the production at the Hibernia site, as well as other oil finds yet to be developed, we will all agree that we must put our environment at a very high priority. The Terra Nova Assessment Panel has identified some of the shortfalls in how we are set up to protect the environment, Mr. Speaker.

Considering this is Environment Week, I would ask the Minister of Environment and Labour if recommendation 61 of the Terra Nova Assessment Panel, which indicates that the Government of Newfoundland and Labrador should establish a coastal zone management plan for the Avalon Peninsula and the west side of Placentia Bay, has been addressed to date? If so, what has been put in place?

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

MR. FUREY: All of these recommendations are being reviewed by the C-NOPB, the Canada-Newfoundland Offshore Petroleum Board. As you know, we have just appointed a new Chair down there, Mr. Hal Stanley. He has not had a chance to be briefed on all of these matters, but the recommendations as they are put forward are being reviewed on a timely basis by the company and by both orders of government.

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

MR. T. OSBORNE: Mr. Speaker, six months ago the minister stated that within seventy-two hours the resources could be brought together to respond to a 10,000 ton oil spill. Can the minister tell the House if there has been any increase in the amount of oil spill response resources located in this Province since the beginning of this year, and if so how much?

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

MR. FUREY: Mr. Speaker, the minister was absolutely accurate in his statements at that time and they are still accurate today. As I said, the whole review of the recommendations, particularly as they relate to the environmental proposals put forward by C-NOPB and by the development plan itself, are being reviewed and the recommendations are being acted upon in a very methodical and professional manner.

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

MR. T. OSBORNE: I would ask the minister this, then. Considering the fact that the oil carriers working with the Hibernia site contain more than ten times the amount of oil that we are capable of containing in the event of an emergency, I ask, Minister: Do you feel that the people of this Province should be given an explanation at this time as to when we will upgrade the oil emergency response team to contain 100,000 tons of oil, which is what these carriers carry?

The people of this Province, Mr. Minister, I believe, are owed an explanation as to why the people who work at sea for a living, the people who work in tourism industry and so on, their livelihoods are put in jeopardy in the event of an oil spill at this time.

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

MR. FUREY: The answer that I gave is the answer that I gave. The minister has responded before, that within a seventy-two hour period the forces that are required to deal with any kind of catastrophic emergency that the hon. member paints would be brought to bear. The Coast Guard, Search and Rescue, -

AN HON. MEMBER: (Inaudible).

MR. FUREY: My point is that these can be done fairly rapidly. Also, I just forget the time frame right now but I think within a five- or seven-day period, the companies tell us they can bring all kinds of expertise from around the world to be brought to bear on any kind of large catastrophe, as had happened in the Shetland Islands. You will note that when the ship went aground in the Shetland Islands there was not an immediate response, although there was an immediate environmental catastrophic.

What happened was they would have to amass the forces from Europe to come and deal with that. They could, up to a certain limit, deal with spills at a certain capacity and volume. Otherwise - what the hon. member is saying is that we should have a billion dollar site along the Coast of Labrador, and it should be there whether it is used or not. I mean, it is an insurance policy.

The recommendations that were laid out by C-NOPB are very clear. They are spelled out extremely clearly for the company to abide by, and the company, in concert with C-NOPB, are working towards achieving that.

MR. SPEAKER: The hon. the Member for Cape St. Francis.

MR. J. BYRNE: Thank you, Mr. Speaker. My question today is for the Minister of Works, Services and Transportation regarding the changes to the Public Tender Act.

Several weeks ago the Minister of Works, Services and Transportation promised to overhaul the public tendering system and the government procurement practices to promote local manufacturers and producers. When the minister finally took the lid off his proposed changes last week, what we saw instead was the wholesale dismantling of the Public Tender Act and the creation of a situation where government has the free rein to dish out lucrative publicly-funded contracts to whomever they please without a public tender call.

Why, under paragraph 3(2)(i) of the proposed legislation is the government proposing to give the Minister of Industry, Trade and Technology broad discretionary powers to exclude from the Public Tender Act any project deemed to have an economic development purpose?

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

MR. MATTHEWS: Thank you, Mr. Speaker.

The hon. member must be reading from a different piece of legislation, or a different script, because quite the contrary. We have not done anything in the proposed amendments that I tabled in the House last week to weaken the Public Tender Act. On the contrary, we have taken several measures to bring the Public Tender Act in line with (a) what is happening in other jurisdictions with whom we have signed trade agreements, such as the internal trade agreement with all provinces, and the Atlantic procurement accord, and (b) we have brought the act, or we propose bringing the act, in line with the recommendations that we received generally from all of the stakeholder who appeared before us in the consultation process.

As I indicated to him the other day, there were about 120 people who appeared, there were forty-two written briefs submitted, there were eight individual presentations after the public presentations. The cumulative action we are taking is as a result of all the representation made.

As a matter of fact, I was just looking through my notes here for a piece that I found on my desk this morning from the Newfoundland and Labrador Manufacturers Association's president soundly and roundly endorsing the measures that we have taken. That type of support, together with the type of support we have from municipalities, the boards of trade, the chambers of commerce, are really the basis for the action we have taken. The hon. member, if he was fair-minded at all about it, and I am sure he is, or at least he intends to be, will recognize that the amendments are the appropriate ones at this point in time.

MR. SPEAKER: A supplementary, the hon. the Member for Cape St. Francis.

MR. J. BYRNE: Thank you, Mr. Speaker.

The minister can rationalize all he wants but he is not answering the question. Will the minister kindly tell us when a piece of government work does not have economic development implications just how broadly will the minister be able to interpret this provision? Because there will be absolutely no definition anywhere in the act to say what she can and cannot exclude from the public tendering under this provision. She will have absolute power, and it has often been said that absolute power corrupts absolutely.

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

MR. MATTHEWS: Thank you, Mr. Speaker.

The hon. member is waxing quite eloquently today with respect to the effects of power and absolute power and that type of thing. We take it that he may know a little bit of what he is talking.

In terms of the amendments to the act to give the Minister of ITT latitude in using RFPs as opposed to tendering for economic development purposes, the criteria will be very strictly defined in regulation. Essentially, in broad terms, and as per the statute that we will be revising, there are about three things that have to happen. Firstly, it has to be in the judgement of the minister. Secondly, it has to be with the affirmation of Cabinet. Thirdly, it has to be on the basis of a reporting to the House of Assembly for any exemption that we have made.

To that particular point, we are making that provision, that change in the act, so that we are rendered in the same circumstance exactly in terms of ability to recognize economic development value for the Province as every other province in Canada. That change to the Public Tender Act will bring us only in line with the internal trade agreement with which we have entered into with all of the other provinces in Canada. To do less would put our industries in Newfoundland at a gross disadvantage as opposed to every other province in Canada. Simply put, we are not prepared to leave ourselves in that position. We need that flexibility, we need that tool to be able to work with. We will be in no different circumstance, once the amendment is put forward, than all of the other provinces in Canada. We certainly intend to ensure that that is where we are.

MR. SPEAKER: Order, please!

I just want to again bring to hon. members' attention that questions for Question Period should not be related to legislation that is on the Order Paper. It is my understanding that the questions asked relate to the amendments to the Public Tender Act and the hon. member should restrict his questions to that which could be asked during the debate. The questions here should be on matters outside of the legislative agenda.

MR. J. BYRNE: On a point of order, Mr. Speaker.

MR. SPEAKER: Order, please!

The hon. the Member for Cape St. Francis, on a point of order.

MR. J. BYRNE: I accept your ruling no doubt, Mr. Speaker, but the point that I would like to make: For the sake of openness and transparency, maybe the House of Assembly would give me leave to ask the third question that I would like to ask, Mr. Speaker.

AN HON. MEMBER: No, rules are rules.


MR. SPEAKER: Order, please!

A supplementary, the hon. the Member for Cape St. Francis.

MR. J. BYRNE: Mr. Speaker, I will ask the Minister of Government Services and Lands a question maybe. Now please, members on that side of the House, don't panic. Don't try and protect the Minister of Government Services and Lands.

AN HON. MEMBER: (Inaudible).

MR. J. BYRNE: What do you mean? I can ask a question, can't I?

MR. SPEAKER: Order, please!

The Chair has recognized the hon. the Member for Cape St. Francis.

MR. J. BYRNE: Thank you, Mr. Speaker.

Mr. Speaker, some time ago, actually on December 9, 1997, I raised questions about the government's decision to make home-owners and perspective home-owners pay the cost of having septic waste system assessments done. No longer are government inspectors doing the work. I warned at the time that the change would cost new home-owners dearly, especially those in rural areas, Mr. Speaker, but the minister said it might only cost a couple of hundred dollars. Mr. Speaker, I have checked this out, especially with engineering firms.

Will the minister confirm that, in fact, some people are now having to dish out upwards of $1,500 because of this new policy?

MR. SPEAKER: The hon. the Minister of Government Services and Lands.

MR. McLEAN: Thank you, Mr. Speaker.

The question of what it costs to pay for septic tank designs for cottage owners and residential areas; it can range in any number of amounts, Mr. Speaker. It depends on who you want to get. If you want to go out and find somebody who is going to charge an arm and a leg to get it done, fine. If you want to find somebody who will charge you a very minimal amount, fine. But, Mr. Speaker, it is for the individuals to take that responsibility now and not government.

MR. SPEAKER: Question Period has ended.


Orders of the Day


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

MR. TULK: Mr. Speaker, later on we will be moving to Concurrence Motion but I am going to call first reading on Motion Nos. 5, 6, 7 and 8, if I could. First reading of Bill Nos. 28, 30, 31 and 32.

Motion, the hon. the Minister of Justice to introduce a bill, "An Act To Remove Anomalies And Errors In The Statute Law," carried. (Bill No. 28)

On motion, Bill No. 28 read a first time, ordered read a second time on tomorrow.

Motion, the hon. the Minister of Health and Community Services to introduce a bill, "An Act Respecting Child Care Services In The Province," carried. (Bill No. 31)

On motion, Bill No. 31 read a first time, ordered read a second time on tomorrow.

Motion, the hon. the Minister of Environment and Labour to introduce a bill, "An Act To Amend The Fishing Industry Collective Bargaining Act," carried. (Bill No. 30)

On motion, Bill No. 30 read a first time, ordered read a second time on tomorrow.

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

MR. TULK: Mr. Speaker, Order No. 3, Concurrence Motion, Resource Committee.

MR. SPEAKER: The Concurrence Motion, Order No. 3, Resource Committee.

The hon. the Member for Signal Hill - Quidi Vidi.

MR. HARRIS: Mr. Speaker, I adjourned the debate but I do not know how many minutes I have left. If I could be advised as to how much time I have left, perhaps, Mr. Speaker, I would let someone else speak and I will join in again a little later, if I have five minutes or so. Can anyone tell me?

Mr. Speaker, can the Table advise me as to how much time I have left?

AN HON. MEMBER: As long as you want, hon. member, with leave.

MR. HARRIS: With leave, I can have as long as I want.

I have six minutes left. I think I will save them, Mr. Speaker, and join in debate a little later.

MR. SPEAKER: Order, please!

The hon. member has already spoken in the debate and now he is - my understanding is that we are speaking for thirty minutes. You can speak as often as you want, as long as you do not take up any more than thirty minutes. Are those the rules we are still under?

MR. TULK: (Inaudible).

MR. SPEAKER: Okay, fine.

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

MR. TULK: Mr. Speaker, before the member starts speaking -

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

MR. TULK: - there is a bill that -

AN HON. MEMBER: (Inaudible).

MR. TULK: Yes, but we will not take his time.

There is a bill on the next page of Orders of the Day which I wanted to call first reading on, but that I did not see. It is, "An Act To Amend The Members Of The House Of Assembly Pensions Act". I wonder if we could revert and call that, not take any time away from him, and move on? If so, I move first reading of Motion No. 9.

MR. SPEAKER: Motion No. 9.

Motion, the hon. the Minister of Finance to introduce a bill, "An Act To Amend The Members Of The House Of Assembly Pensions Act", carried. (Bill No. 33).

On motion, Bill No. 33 read a first time, ordered read a second time on tomorrow.

MR. SPEAKER: For clarification, I ask the hon. the Government House Leader if he had called Motion No. 8?

MR. TULK: I called it, but I do not think (inaudible).

MR. SPEAKER: No, well the Chair will put Motion 8 as well.

Motion, the hon the Minister of Tourism, Culture and Recreation to introduce a bill, "An Act To Incorporate The Cruise Ship Authority", carried. (Bill No. 32).

Motion, Bill No. 32, read a first time, ordered read a second time on tomorrow.

MR. SPEAKER: We are back to Order No. 3, the Resource Committee.

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

MR. OTTENHEIMER: Thank you, Mr. Speaker.

I would like to take this opportunity, Mr. Speaker, just to speak for a few minutes on this particular proceeding this afternoon in the House.

It is, once again, an opportunity for members on this side of the House to make comment on various aspects of the Budget and various aspects of the Estimate hearings, in particular the one that we are reviewing now, the Resource Committee. Of course, all these committees and all these headings, Mr. Speaker, have to do with the Budget which was presented several months ago. Of course, we have been, since that time, debating this Budget, debating what little is seemed to be of benefit to Newfoundlanders with, of course, members of this side of the House, repeating day-after-day what we find to be simply weak and unacceptable as it relates to the Budget which was presented by this government a number of weeks ago.

Mr. Speaker, there are a few points I would like to address, but I would like to just preface my few comments, once again, by reminding all members in this House of the very real problem which is being faced by government in years to come; when we look at the overall deficit, in excess of $100 million in terms of funding, which is available to the general coffers of this government in years to come.

I am referring specifically to the HST transitional funding and the Term 29 award. Both of these fiscal arrangements entered into between the Province of Newfoundland and the Government of Canada, come to a screeching halt, Mr. Speaker, and it is only a matter of a short period of time; in fact, during the fiscal year of 1999, less than one-year away, when we see significant amounts of money simply not being available to this government as it relates to the HST transitional fund and the provisions of Term 29.

For example, in 1997, under the HST transition there was funding available in the amount of $127 million, and because of the arrangement entered into last year between our provincial government and its federal cousins, there was a Term 29 award of $40 million, for a total of the two of $167 million.

In 1998 we see the same figures being available to us, $127 million under HST transition and $40 million under Term 29. So the total of the two, $167 million. In fact, this year, when we just use these figures alone, Mr. Speaker, we are not short. However, when we look at the years to come, in 1999 we see a shortfall of $104 million and that is made up of the $63 million that we received from the HST Transition, for a total of $63 million, for a shortfall of $104 million. In the year 2000, HST transition reduced by a further $32 million for a total of $31 million; nothing under the Term 29 award. So, in fact, in less than two years, Mr. Speaker, we operate under a shortfall of $136 million. In the year after that, the year 2001, we will receive absolutely zero under the HST transition award. We receive absolutely zero once again under Term 29. So we have a total shortfall of $167 million.

So the question, of course, has to be asked: What are the projections? We keep hearing forecasts from outside agencies, but I am quite curious as to what the forecast of this government is, Mr. Speaker. What are this government's projections as it relates to its ability to maintain its fiscal shop in order to ensure that the affairs and needs of the people of this Province are being addressed and looked after on a day-to-day basis. One hundred and sixty seven million dollars is simply not chicken feed, I say

Mr. Speaker. One hundred and sixty seven million dollars is a significant sum of money and one has to question exactly how this government, in its planning and in its budgetary process, will see fit to ensure that the adequate arrangements are in place.

One place they could look, I would suggest, Mr. Speaker, is perhaps by paying particular attention to the very real issue that was released last week, as it relates to the UI surplus.

Now, there are a variety of opinions as to what ought to be done with such a significant surplus, and we are talking billions of dollars. It is an unbelievable set of circumstances that the federal government now finds itself in, where because of premiums collected and because of monies paid out under the UI plan, we see such significant amounts of money being held in surplus. It presents a real dilemma for the Prime Minister and and his Minister of Finance in terms of how he ought to deal with this surplus in a fair and equitable way to employers, to employees, to all of the provinces, because it is a federal plan, it is a national plan, and perhaps most specifically to the regions of the country that require and need it the most. So what is the approach that will be taken by government, by the federal government, to ensure some equity and I guess some reimbursement to those parties who have paid in significant amounts of money under this particular plan?

Perhaps in terms of this Legislature, Mr. Speaker, what role, what leadership role, is our government taking in terms of taking a position, advocating a position, to their federal counterparts in Ottawa to see what can be done to address the real budgetary shortfall, which according to those statistics which I read out just a few minutes ago appear just to be a matter of months away? What are some of the options that may be available?

One option, one alternative with respect to the UI surplus, is a clear and simple reimbursement to employers and employees, because it affects both, of monies that are paid in on a regular basis; every pay cheque there are deductions. So the people of this country, the employers and the workers of this country, pay into a fund which now, according to the story as found in The Globe and Mail last week, at the end of 1997 had a surplus of $12.8 billion and grew by an additional $2.9 billion for the first three months of 1998.

Can you imagine that amount of money simply being in an account simply labelled and described as a surplus account? When we see in this Province the sorts of real problems, whether we look at the fundamental grass roots day-to-day problems of health and education and school closures, and programs in health simply not being available for financial purposes, for financial reasons, but yet we see a UI fund with a surplus of astronomical, unbelievable amounts.

Mr. Speaker, the question has to be asked, what do we do? Do we simply reimburse those parties who, in good faith and in accordance with the law, have paid in significant amounts of money on a regular basis? That is certainly one approach and one that is advocated by certain critics of the whole program.

Also, Mr. Speaker, there is another approach, one which I intend to support at least in part, and that is recognition of the fact that there are regions of this country - when it is necessary to call upon the fact that we recognize this to be a Confederation and a federation of provinces, there are regions of this country that can do well with the advance of these funds should they become available, and obviously for the benefit of those regions which need it most.

The question can be asked: Why is it at least some of this surplus account cannot be made available to parts of Northern Canada, for example, perhaps parts of rural Canada, perhaps the urban core, of which we know there are many problems throughout this country in our inner cities, and certainly regions including the Atlantic region that could do well with a certain injection and a particular injection of monies being available to it? Particularly when it is simply a surplus of funds and a predicament for the federal Minister of Finance who simply throws his hands in the air and says: I do not know what to do. What am I allowed to do in accordance with the act, in accordance with the law? Should I return the funds? Should I reimburse those parties? Can I do a combination of both?

One possibility I would suggest that the minister could consider is putting a time line on this whole problem in which the federal minister now finds himself, and that is for our government to play an active role in taking steps and recommending to its federal counterparts ways on behalf of the people of this Province to find solutions to this particular concern of the federal Minister of Finance. That is, for example, the following: To say to the Minister of Finance, yes, we advocate a system of injection of funds to the regions of this country for the reinstatement of certain programs, for the continuation of certain social programs, to ensure that the people of those particular regions are being protected and looked after.

Then maybe a six-month time line, or a twelve-month time line, could be put in place. If in fact through ineptness or incompetence both the federal and provincial governments have not seen fit to find a way to allow funds on a provisional basis to be made available to the needy parts of this country, then obviously in fairness to those people who have contributed to the plan there ought to be reimbursement.

It is a combination perhaps of the two concepts: of reinvestment, and secondly reimbursement. It recognizes, in my view, the integrity of the system. It recognizes the fact that people have paid in, in good faith, significant amounts of money in accordance with the act. At the same time, in view of the fact that such an unbelievable surplus exists, it recognizes as well that here is an opportunity - perhaps not envisaged and contemplated by the federal government - available to government at this time to take advantage of and make good use of the continuation of certain programs, the investment in particular regions of our country, to ensure our people are protected and secured.

It is an interesting dilemma but one, I would say, that in the true sense of accountability and money management one would think a problem that should not occur. Certainly there should be individuals within the federal Department of Finance who would be able to envisage and perhaps project this sort of issue arising. Why are the premiums so high? Why are such high amounts being deducted from the ordinary everyday worker of this country to the extent that we find a surplus of such unbelievable amounts? Why are the employers, the small businesses of this country, being forced under law to collect and remit and make contributions themselves only to a slush fund which appears to be there, and the federal government of this country does not even understand and know what to do with?

It is an issue in which our provincial government could take a lead role, I would say. Because this government ought to recognize that we are a region of this country where reinvestment in its social network and in the day-to-day programs which are essential for this Province to continue smoothly, this government could take a lead role in recommending to its federal counterparts ways and means to assist.

Here is an opportunity. It is a rare opportunity. How often is it, I ask the question, that there is this sort of reconciliation at the end of the day of its accounting, only to find out that we see billions of dollars in a UI surplus, and the dilemma in which government finds itself. What do we do with it? Yet the federal Minister of Finance unbelievably takes the position, according to this article, that he must resist a cut in premiums. Of course, consequently we just see this surplus fund growing on a day-to-day basis.

What this government can do is perhaps take a lead role, I would suggest, in finding ways and making recommendations to Members of Parliament, to federal offices. Of course, our Premier is very familiar with members of the federal Cabinet as it now exists in Ottawa. Let him use his influence and let him make suggestions and recommendations as to how these funds may be made available. At the same time it can restore and keep in mind the integrity of the UI system, because there is a vested interest, obviously.

Employers and employees in this country have a vested interest in this fund. This is their money that has been collected on a weekly or biweekly or monthly basis. This is money to which they can lay claim and say: This is ours, we want it back. So maybe a combination of the two: an early reinvestment with a time limit or a time line, to be followed by simply returning and reimbursing these monies to those people who in good faith have paid in.

It is a very unusual situation, I say, Mr. Speaker, but one that this government could take a lead role in addressing and seeking solutions to what is obviously, in many respects, a very difficult time for many people in Newfoundland and Labrador.

Job creation, what better way - here is a UI fund, here is a fund which has its origin in the fact that it is to protect those individuals who have a job and lose it. The reality in this Province, Mr. Speaker, is that there are thousands and thousands of people who do not have a job to lose. They want a job, and out of necessity from time to time they must leave our shores and go to other parts of Central Canada or other parts of Western Canada looking for work. What better way, in terms of investing in the people of this country and in particular this region of Canada, than to create job programs and create employment through small business, through resource development, through student work programs, through co-op programs in our high schools for example, what better way than to use some of this surplus for the benefit of the many, many Newfoundlanders who are unemployed, who are distressed, and who are contemplating leaving this Province, against their will, because they simply have no choice?

There is an opportunity here and it is a rare opportunity, I say, Mr. Speaker, because to see a headline in a national newspaper to the fact that we have a surplus of any kind is certainly a rarity indeed.

Mr. Speaker, another interesting statistic which perhaps says a lot about where we are in this Confederation of ours is an interprovincial income tax comparison. It is a statistic based on 1997 statistics. Again, when we look at statistics and when there is an interprovincial comparison made, Mr. Speaker, we are usually number ten in this Province or we are number one. If it is the lowest or the worst or the most difficult, we are usually number one. If it is a comparison of what is most expensive, what is most difficult, what is most challenging, we are very often number ten. We are either at one extreme or the other from a fiscal point of view.

As Newfoundlanders and Labradorians we realize in many ways we have many things to be proud of and we are indeed a very fortunate society. We live in a wonderful Province with many, many positive attributes; however, we have to live. We have to put food on the table. Our children have to work. Families want to stay here as opposed to leaving. But when we look at the financial or fiscal reality we are very often, as I say, number one or number ten, depending on the question that is being asked, Mr. Speaker.

This interprovincial individual income tax comparison of 1997, when there is a relationship and a study made of all ten provinces in terms of the highest personal income tax paid, depending on income, and I should say regardless of income, Newfoundland is number one. As number one, regardless of whether or not there is a taxable income as low as $20,000 or as high as $100,000, the Newfoundland tax, the individual income tax comparison, shows Newfoundland as the very highest. Our contribution in this country is the highest, yet our cost of living, when that comparison is done, the cost of living remains the highest. Our unemployment remains the highest. Our out-migration, in terms of statistics, those moving in or out, and the comparison, the net loss remains the highest.

It is an unfortunate reality, Mr. Speaker, and it is one that again, when we look at statistics, when we look at facts and figures from a financial point of view, we see Newfoundland in the forefront as having the highest personal or individual contribution of any other province in this country.

Why is it? A very fundamental question has to be asked. How is it, when we are a region of a country with many needs, with many demands, with the real fiscal reality of where we are today in comparison to other provinces, why is it those people who live in that region, who live in that province, with those financial and social problems, yet have to pay the highest price for it? It just does not make sense. In a true Confederation, one has to question, I guess, Mr. Speaker, what it is all about, when in fact the person who is being called upon the most to contribute is the person who can least afford it?

There is just no logic to this, Mr. Speaker; and again, another reason why, perhaps, our government could take a leadership role in recognizing that if a surplus of any kind exists, let it take the steps that are necessary to encourage development, to encourage investment and to bring to this Province and to the people of this Province an opportunity which is rare, for giving them the belief and the strength to say that, yes, we can stay because there are programs, there are opportunities and there is, at least, a system in place that we can respect and take advantage of.

With those few comments, Mr. Speaker - I understand my colleague, the Member for Signal Hill - Quidi Vidi, has a few minutes, and there are several other speakers as well from this side of the House who want to make their contribution to this very important debate.

Thank you, Mr. Speaker.

MR. SPEAKER (Penney): The hon. the Member for Signal Hill - Quidi Vidi.

MR. HARRIS: Thank you, Mr. Speaker.

I would like to take a few minutes of the House's time to reflect on the statement of the Minister of Fisheries and Aquaculture today in the House, on the aquaculture industry and in particular the working capital fund that the federal government has agreed to enter into with the Province. Mr. Speaker, this is a very positive program, a long time coming I would say because it is something that ought to have been recognized many years ago as a vital component of the development of an aquaculture industry.

Mr. Speaker, ten years ago, when I was on the Fisheries Committee in Ottawa in the House of Commons studying aquaculture, we went on a trip to Norway. I understand the Minister of Fisheries and Aquaculture himself has been to Norway. One of the important things that was discovered and was part of the Aquaculture Report of the Fisheries Committee, Mr. Speaker, was the need for specialized financing vehicles for the aquaculture industry, because it was very different from other industries. There would be a very big, not only capital investment, Mr. Speaker, but also an expenditure over a number of years for food, for salaries and for feed for the aquaculture species before any return was obtained from the business.

Now banks, Mr. Speaker, are not used to be dealing with that. They are used to dealing with: You get your loan one week and you start paying it back the next. So they are not used to waiting one year or two years or, in some cases, three years. I think with salmon and other species you might have to wait as many as three years before you can sell any of the product that you produce. So, Mr. Speaker, that kind of bank financing made no sense and the industry was never going to develop without appropriate types of financing that were different, and would have to be different for the aquaculture industry than it would be for other producing enterprises, because you did not have the kind of cash flows, or at least had a much longer delay before you had a cash flow, that would allow you to assist in paying off your debt obligations plus meet your ongoing day-to-day obligations as an enterprise.

This is, as I say, Mr. Speaker, welcome but rather late in the day. The shellfish, particularly the mussel industry, has been around this Province for a fairly long time and the need for this type of facility has been evident from the beginning. I am delighted to see that it happened, Mr. Speaker. It is recognizing a need that exists and hopefully will help to do the job in increasing our shellfish aquaculture sector.

I see also that the minister noted an event which he is attending, and I have also been invited for this afternoon, at the Fisheries and Marine Institute of Memorial University, an aquaculture training facility. Mr. Speaker, this is a terrific industry for Newfoundland, particularly rural Newfoundland, because it has a lot of very positive elements. It is the one industry that can't be developed without benefitting rural Newfoundland, but it also has the advantage of having a lot of aspects to it that are very important for a modern economy.

Scientific knowledge is very important to this. It gives jobs for young people from rural and urban Newfoundland who are interested in biology, who are interested in bio-technology, who are interested in genetics, who are interested in technical aspects of the aquaculture industry, people who are interested in food science, who are interested in product development, who are interested in all aspects of the food and biology of fish and shellfish production for a modern economy and a modern market.

M. Speaker, it is a terrific, fabulous industry for Newfoundland and Labrador, and any effort to improve that industry must be welcomed, and in fact must be encouraged and promoted, because we have an opportunity here to play a very important role in developing industry in Newfoundland. Certainly not the only, but one of the bright lights in the future of this Province is the development of a highly motivated, a highly enthusiastic, a highly educated and trained aquaculture workforce that can do a tremendous amount in providing opportunities for people in this Province, particularly those wishing to live and work in rural Newfoundland.

I am delighted to hear the news today because of the value and the importance of this particular industry. It is one which I think has a very modern attitude and approach to what is essentially a very old industry in this Province.

MR. SPEAKER: Order, please!

The hon. member's time is up.

MR. HARRIS: Thank you, Mr. Speaker.

MR. SPEAKER: The hon. the Minister of Fisheries and Aquaculture.

SOME HON. MEMBERS: Hear, hear!

MR. EFFORD: Thank you, Mr. Speaker.

After the House of Assembly sitting last Thursday night, and comments from members opposite, in particular the Member for Signal Hill-Quidi Vidi, over the weekend in the news media, the negative connotations put forth by the member about the sealing industry in Newfoundland, I thought I should clear up some of the misinformation that out there, and the seriousness of this situation on the seals' impact on the future of Newfoundland and Labrador. I want to go on record, Mr. Speaker, as clarifying some of the numbers, clarifying the impact, and why in Newfoundland and Labrador, or in Atlantic Canada, we cannot talk the words, seal cull, seal management. It is definitely a problem here.

I want to begin in Ontario. Three weeks ago they had a tremendous problem up there with 7,000 black bear, an overabundance of black bear. No discussions, no news media events, no Greenpeace, no IFAW, no politicians criticizing: They ordered a kill of 7,000 black bear. Anybody can ask the question: Why did they do it? Well, there was an overpopulation of black bear in the country causing major problems. Did they debate it and ask for scientific research for years, and wonder what they were going to do with that animal once they killed the animal? No, Mr. Speaker. The number of black bear in Ontario was too numerous for them to wait and debate it for the next one, two, three, four or five years. Time did not permit discussion on that issue, so they ordered a kill, and they killed 7,000 black bears in Ontario, because it was necessary to do it.

Did they have the markets? No. Did they have a way to utilize the animals? No. It was necessary to get rid of them. Did they question what should happen to the animal after it was killed? No. The priority on the countryside, on the vegetation, on the safety and the protection of people was an immediate kill of 7,000 black bears.

Has anybody questioned what is happening here in Newfoundland and Labrador? The hon. Member from Signal Hill - Quidi Vidi should listen to this one. He condemned me for a statement I made here in the House a couple of weeks ago - a lot of talk in the public on it.

DFO just brought in a regulation - see will we get this in the press this afternoon, this evening or tomorrow - DFO just brought in a regulation, and the critic, the member for Bonavista South, I would think is fully aware of this one. The lump fishery taking place in Newfoundland and Labrador today - every fisherman who is involved in the lump fishery must put out nets. It is the only way to catch them, you have to put nets out in the bay. Every fisherman who goes out to his lump nets has one, two, five, six or eight seals in every net, depending on the numbers and where the nets are. The average catch per season of seals in lump nets is 25,000 to 30,000; by catch, not a directed catch, by catch that the fishermen have. They tear up the nets.

Now, what do the fishermen want to do with the seals? It is a perfect animal. There is no damage to the pelt and there is no damage to the meat. It can be used in a number of different ways, for animal food or whatever. The perfect pelt can bring a top price on the market, and they would like to have the right to sell that animal. Keep in mind it is not a directed fishery.

DFO brings in a regulation: You cannot net seals. That is fine. This is not a directed fishery, this is a by catch. Because that regulation is on the books, they say to the fishermen: You must dump those 25,000 to 30,000 seals in the ocean, let them rot, let them float upon the beaches, let them become an environmental problem. We then have to pay somebody, because of the tourist industry in Newfoundland, and because of the smell and the stench on the beaches, to take them up.

The hon. Member for Signal Hill - Quidi Vidi: Listen! We have to pay people to take them off the beaches and bring them to the dumps and burn them. Twenty-five thousand to 30,000 animals at $50 per animal, mammal or fish, whatever terminology they want to put on it, could bring money into the pockets of those fishermen. There is a regulation that no one gets condemned for. There is no criticism in the public, no criticism in the press, no criticism anywhere. It is quite alright to do that.

What happened on the South Coast this year? The first time in the history of the Province, there is a concentration of cod up in 3Ps on the South Coast. What happened? In 500 years, the first time in the history of the Province, the DFO estimated about 1.2 million seals in Placentia Bay, because that is where the abundance of cod and food is. That is not a problem. Yet, at the same time those 1.2 million animals are in Placentia Bay, people today on the West Coast of Newfoundland have every DFO office taken over out there. They have the Premier's office in Corner Brook. Why? Because the FRCC recommended this year that they would be allowed to catch 5,000 tons of cod as a supplement to their income. The minister just recently reduced that from 5,000 ton down to 3,000 ton.

The hon. member is not going to stay around to hear some true facts, so he cannot get any criticism. Three thousand tons of cod from five thousand ton of cod. What do 1.2 million seals eat in Placentia Bay? Each seal consumes 1.4 ton of fish. Multiply that times 1 million. How long will the fish last in Placentia Bay? Yet, fishermen are striking today and fishermen are frustrated and fishermen are taking over offices all over Western and Northern Newfoundland because the cod allowance was reduced 2,000 tons; what a couple of thousand seals would eat in an average year. That is not a problem, Mr. Speaker!

I was listening this morning to a federal representative, John Mercer from DFO, who did two or three interviews this morning on CBC about conservation measures. They will not allow a fisherman on Coastal Labrador, who traditionally fished with a twenty-five and a twenty-eight foot boat, to increase the size of his boat, because now they want to go out and harvest shrimp. In order to harvest shrimp, which is in abundance off their shores, they need a larger boat. For conservation measures, DFO says you cannot increase the size of your boat. It does not make any sense. You set quotas, if the quota is 20,000 ton and a fisherman wants to build a Titanic, that is his business. The quotas are set. Conservation measures apply when DFO listens to the FRCC and sets the quotas. The size of the boat in which you harvest that fish - if you want to invest the money or whatever you can afford to build a boat large enough for safety, comfort and carrying capacity to go out and catch that fish you should be allowed to do it.

The excuse they gave today, and have been giving for some time, is that because we want to protect the quotas or conservation measures, we will not allow you to build a larger boat. As a result of that, the fishermen in Black Tickle and a lot of fishermen in coastal communities in Labrador will not be able to participate in a fishery in Labrador this year. What happens to the fishermen? They are reduced to welfare. They have the ability, they have the resource, they have the knowledge, they have whatever it takes, but a regulation on the books and nobody bothers.

Conservation applies to people, conservation does not apply to animals. There are 200 people living in Black Tickle, twenty fishermen which would mean twenty small boats, and that is a conservation problem. Six million-plus animals is not a conservation problem? That is what I don't understand, Mr. Speaker. What is the practicality, what is the logic and where is the commonsense used in conservation measures?

AN HON. MEMBER: You drove him out of the House.

MR. EFFORD: Yes, I drove him out of the House, Mr. Speaker, because now there is no reason to go out and criticize in the news media.

Mr. Speaker, this problem is not going to go away unless we make it go away, not in time to save the fishery and the future of this Province. If we allow the time to pass by, nature will make it go away. Nature will balance its own system, but the price that we will pay for nature balancing its own system will be a wipe out of all the fishing resources out there which means a wipe out of the communities. So you will not be burning the animals in the dump as we are forced to do today, but you will be burning the homes.

AN HON. MEMBER: They will die of starvation.

MR. EFFORD: They will die of starvation and we will burning the homes of the people who will not be living in any community because there will be no communities existing.

The other question I will ask - I spoke in New Brunswick, in Nova Scotia, in Ottawa, in Winnipeg and several places in Ontario and I am going out to Edmonton, Alberta this week. The only place, Mr. Speaker, I will get any negative comments on the request to have the reduction in seal numbers is here in Newfoundland and Labrador. In every other province in Canada the first question they will ask me when I am finished speaking: Mr. Minister, why are you not doing something about that problem? We did it in Ontario with the black bears. If we had 10,000 bison trampling our fields in Alberta we would do something about it. Every other province agrees that there must be something done, except the people here in this Province. I just do not understand it, Mr. Speaker.

It is right before our eyes, as were the foreign fleets until they totally decimated the fish stocks and then we started to do something about it. Right before our eyes now is a worse problem than ever the foreign and Canadian factory freezer trawlers could ever imagine. Use your imagination! Six million-plus animals in the ocean eating fish and it is not a problem.

I can see, Mr. Speaker, my colleagues all around me are listening attentively to what I am saying.

So with those few remarks, Mr. Speaker, I will conclude.

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

MR. T. OSBORNE: Thank you, Mr. Speaker.

It is as much a surprise to me as it is to everybody else.

Mr. Speaker, just to speak on the Budget Debate a little bit.

AN HON. MEMBER: (Inaudible).

MR. T. OSBORNE: I say to the Minister of Works, Services and Transportation, stop picking on my mother.

MS S. OSBORNE: And his constituent, and stop picking on your member.

MR. T. OSBORNE: And your constituent.

MR. MATTHEWS: My constituent, my member (inaudible).

MR. T. OSBORNE: Mr. Speaker, on the Budget, an issue we raised just today in the House of Assembly in Question Period was the issue of emergency response when it comes to the oil industry.

Mr. Speaker, right now we have the ability to collect 10,000 tons of oil only after a seventy-two hour wait to mobilize the resources to the area in which the disaster had taken place. We are told that we have approximately seven days if we want to mobilize enough resources to contain a major oil spill.

When you are looking at, in this Province, our fishery resources, tourism, the bird sanctuary on the South Coast... We talk about the damage done to our fishery resources as a result of the seal population, and that is true. We have to start to look after the population of seals in this Province so they do not completely wipe out our fishery resources. But if we have a major oil spill, my position is this: If we have a major oil spill, Mr. Speaker, we are going to have the same damage to our fishery that we are having from the seals. It will kill off the fish population in the area in which we have the major oil spill.

You look at Alaska, where Exxon had their disaster, and part of the disaster was created because of the fact that they were unable to mobilize the resources to clean up the oil spill quick enough, and the disaster was multiplied by the delay in getting the resources there and mobilized and on the spot to contain the oil spill.

Mr. Speaker, when you look at the oil industry in this Province, and how quickly it is growing, and the potential to have a mega-mega-industry here with the number of oil fields that are out there that have been discovered, and oil fields that have yet to be discovered, it is time that this Province look at seriously investing the money and resources located right here in this Province to respond very quickly to an oil spill disaster or to a marine disaster. Because right now we are relying mainly on Halifax and Prince Edward Island to disburse the responses, even for a marine disaster here.

We have to put together the resources in this Province. When we look at the reason we are here, it is because people have made a living by way of the ocean, and that will continue with the fishery. It will continue. We will have people making their livelihood on our oceans as a result of the fishery. We will also have them making their livelihood on our oceans as a result of the oil industry. We also have tour operators throughout the entire Province, Mr. Speaker. So we have to put together proper resources here in this Province not only for the oil industry, not only to respond very quickly to an oil disaster, but to respond to a marine disaster.

We see time and time again Search and Rescue being dispatched from one of our Maritime neighbours as opposed to right here in Newfoundland and Labrador, when generally speaking we are closer to the disaster than they are in Nova Scotia or in Prince Edward Island. What a tremendous waste of time, Mr. Speaker, waiting for them to make the extra travel to get to the disaster when we are located right here in this Province.

So we have to start to pushing Ottawa to contribute in a major way, and we have to look at resources in our own fiscal department here, our own Department of Finance, to put resources in place right here in this Province to capably handle any disaster, most especially an oil disaster off our coast. This is an area that affects all of the people in this Province, the people working in the oil industry and in the fishery.

It is an area in which we cannot afford to gamble and hope, day-by-day, week after week, that there is not an oil disaster. We should have learned, from the situation that has taken place in Alaska, to be proactive as a result of what we saw there, the amount of damage that happened with the Exxon oil disaster. We should now take the steps to put in the proper measures to make sure, because Alaska and British Columbia are not in the oil industry, at least not to the same magnitude that we are right now. Our oil industry is only going to grow larger and larger.

We have to put the resources in place right in this Province so we are not faced with the same type of disaster they were in Alaska, so that we are not faced with a major oil disaster and not able to respond, and as a result the magnitude of that disaster multiplies beyond repair. They are still cleaning up as a result of the Exxon disaster in Alaska.

We all know that after seven days of waiting, especially certain times of the year when we have high seas, rough marine conditions, that after seven days to have those resources brought to our Province, assembled off our coast, after seven days that oil is going to be so far spread out, pushed along our coast lines, probably destroying the bird sanctuary on the South Coast, it just doesn't make sense. We cannot afford to wait seven days. With rough sea conditions here, we just cannot afford to wait seven days to assemble the proper resources here to start fighting an oil disaster.

Furthermore, anybody who knows anything about oil and the chemistry of oil, after a couple of days the main sediments in oil, while oil floats, the oil starts to break down. So not only are we facing the disaster, and having the disaster compounded by rough sea conditions, we are also looking at the fact that chemically the oil will start breaking down and sinking. Certain components of the oil will actually start to sink. Seven days will just not cut it in the event of an oil disaster.

We can see that, we read about it. Still in Alaska we are hearing and reading about the fact that they are still paying the price environmentally with marine life, with sea birds and so on. There is just no way we can wait seven days to respond to an oil disaster.

MR. SPEAKER: Order, please!

The hon. member's time is up.

The allocated time for Concurrence Motion has expired.

MR. T. OSBORNE: Thank you, Mr. Speaker.

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

All in favour of the motion, say `aye.'


MR. SPEAKER: Opposed.

Morion carried.

The House has concurred with the motion.

The hon. the Government House Leader.

MR. TULK: Mr. Speaker, I have received a message from His Honour, the Lieutenant-Governor, addressed to the Hon. the Minister of Finance and Treasury Board, who is unavoidably absent.

MR. SPEAKER: To 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, 1999. By way of further supply and in accordance with the provisions of the Constitution Act, 1867, I recommend these Estimates to the House of Assembly.

Sgd.: ________________________________

A. M. House, Lieutenant-Governor

MR. TULK: Mr. Speaker, I move that the message be referred to the Committee of the Whole on Supply.

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


Committee of the Whole


CHAIR (Oldford): The hon. the Government House Leader.

MR. TULK: Mr. Chairman, I move that the total contained in the Estimates be carried and that a resolution be adopted to give effect to the same.

On motion, Report of Resource Estimates Committee carried; and that a Resolution be adopted to give effect to same.

CHAIR: The hon. the Government House Leader.

MR. TULK: 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 (Penney): The hon. the Member for Trinity North.

MR. OLDFORD: Mr. Speaker, the Committee of Supply has passed the amount of $2,882,076,000 contained in the Estimates of Supply and ask leave to sit again.

On motion, report received and adopted, Committee ordered to sit again presently, by leave.

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

MR. TULK: Mr. Speaker, I move that the report of the Committee of the Whole on Supply with respect to the Estimates for 1998-99 together with a Resolution and a Bill consequent thereto be referred to a Committee of the Whole on Ways and Means.

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


Committee of the Whole


CHAIR (Oldford): Order, please! Bill 26.

"An Act For Granting To Her Majesty Certain Sums Of Money For Defraying Certain Expenses Of The Public Service For The Financial Year Ending March 31, 1999 And For Other Purposes Relating To The Public Service, (Bill 26).



"That it is expedient to introduce a measure to provide for the granting to Her Majesty for defraying certain expenses of the public service for the financial year ending March 31, 1999 the sum of $1,871,986,800.

On motion, resolution carried.

On motion, clauses 1 through to 4, carried.

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

CHAIR: The hon. the Government House Leader.

MR. TULK: 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 (Penney): The hon. the Member for Trinity North.

MR. OLDFORD: Mr. Speaker, the Committee of Supply have passed a certain resolution and recommend that Bill No. 26 be introduced to give effect to the same.

On motion, resolution read a first and second time.

On motion, a bill, "An Act For Granting To Her Majesty Certain Sums Of Money For Defraying Certain Expenses Of The Public Service For The Financial Year Ending March 31, 1999 And For Other Purposes Relating To The Public Service," read a first, second and third time, ordered passed and its title be as on the Order Paper. (Bill No. 26)

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

MR. TULK: Mr. Speaker, Bill No. 15, Motion No. 2.

MR. SPEAKER: Motion 2, the hon. the Minister of Finance and Treasury Board, to move that the House resolve itself into a Committee of the Whole to consider certain resolutions relating to the raising of loans by the Province, Bill No. 15.

MR. TULK: Mr. Speaker, I move that the House resolve itself into Committee of the Whole.

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


Committee of the Whole


A bill, "An Act To Authorize The Raising Of Money By Way Of Loan By The Province." (Bill No. 15)

CHAIR (Oldford): Order, please!

The hon. the Government House Leader.

MR. TULK: Mr. Chairman, the Minister of Finance and Treasury Board is unavoidably absent. This bill would authorize the government to raise $200,000,000 by way of loan for the purpose of the Consolidated Revenue Fund.

Mr. Chairman, it gives me great pleasure to introduce this Bill.

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

MR. OTTENHEIMER: Thank you, Mr. Chairman.

Mr. Chairman, I stand today to speak a few minutes on Bill No. 15, "An Act To Authorize The Raising Of Money By Way Of Loan By The Province". The bill references Section 38(1) of the Financial Administration Act, and that particular section reads as follows:

Where, in an act, authority is given to the Lieutenant-Governor in Council to raise by way of loan a sum of money, unless there is some provision to the contrary in the act, the Lieutenant-Governor in Council may raise that money by the issue and sale of securities in a form at a price, whether at par value or less or more than par value, at a rate of interest and upon those other terms and conditions that the Lieutenant-Governor in Council may approve, and the principle amount of and interest on all security so issued and sold is a charge on and shall be paid out of the Consolidated Revenue Fund.

So what we see each year, Mr. Chairman, is a similar act being introduced in this Legislature. The wording is essentially the same from year to year. The only thing that varies is the amount.

MR. TULK: (Inaudible).

MR. OTTENHEIMER: That is true, I say to the Government House Leader, and that message is perhaps much the same as well.

Mr. Chairman, it is an act which essentially allows government, or gives legislative authority to government, to raise money by way of loan for the continuation of its budgetary obligations.

It is interesting when we look at a finance bill. It is interesting when we talk about where money comes from. If we look at the Budget Highlights 1998, there is a section there under Summary of Current Revenues By Source. In illustration is gives us an account of where the money actually comes from. We see, for example, the most significant amounts are essentially taxes; but upon scrutiny we see most of the taxes which are received by the Treasury of this Province is, in fact, done at the cost and the expense of the federal government.

Look, for example, where it says Provincial Income Tax. Then, under Personal Income Tax for the Estimates in 1998-1999, we see the figure of $627 million, and then revised in 1997-1998 to $543 million. But essentially this is a function of the federal government, not the provincial government. The collection of this tax is a function of the federal government and, of course, the benefit which is derived is the benefit to this Province.

Just to look at the figures here under the Summary of Current Revenues By Source you will see Sales Tax, the estimates of 1998-1999, $450 million. But this collection procedure as well is largely a responsibility of the federal government. The Province has really nothing to do with it. The Province simply receives the amount but we see totals in excess of $1 billion, well in excess of $1 billion, to the benefit to the Treasury of this Province, under Personal Income Tax of $627 million and Sales Tax of $450 million largely the responsibility and as the result of the efforts of the federal government.

What is the role of the provincial government, of the provincial Department of Finance, in the collection of or in the application of these particular amounts? Under Gasoline Tax, clearly provincial; under the Newfoundland Liquor Corporation, again, clearly provincial. We have Tobacco Tax, Corporate Income Tax, and Other Provincial Sources, those figures totalling almost $600 million, for a total provincial estimate of $1,891,312,000.

Again, it is interesting when we see the actual breakdown of current revenues. We see significant amounts, in fact the bulk of that amount, largely the responsibility of the federal government. Then when we look at, in particular, the responsibility and the role of the federal government by way of Equalization Payments, we see again close to $1 billion, $896 million. We see Other Federal Sources of $500 million, totalling $1.3 billion. Where the money comes from is obviously both the obligation of, the responsibility of, and largely a result of the work of, the federal government and not of the Province.

Yet in Bill No. 15, "An Act To Authorize The Raising Of Money By Way Of Loan By The Province", one has to ask: Why is this procedure necessary, that it be carried out on an annual basis? Again, the wording of this legislation is essentially identical from year to year. The bill allows for the Province to raise via loan money to correct deficiencies, whether they be actual or estimated, in the Consolidated Revenue Fund, to manage securities, and to maintain sinking funds.

This is largely, again, an accountability issue. This is an insurance plan, I say. This is when government, were it not for legislation such as Bill No. 15, would fall flat on its face simply because the money is not there to manage the securities which had been put in place, and also to maintain funds, sinking funds and investment funds, that have been negotiated between this government and the bond market.

Also, the principal amount of securities issued under this authority of this particular act shall not exceed $200 million. So this is the amount which does vary from year to year. In fact, in one year, in the research which I have done in terms of looking at other similar pieces of legislation, we see higher amounts in other years. In this particular year, not to exceed $200 million over and above the money applied since April 1, 1998, to the management of securities and sinking funds.

The monies raised under this act is in addition to monies raised under any other act, so this is a particular piece of legislation for this particular purpose, and there is no interference or conflict between this legislation and others. However, with the coming into force of this bill the Cabinet may not raise by way of loan further sums of money under the Loan Act of 1996.

Just out of interest, we can look at some of the amounts that had been used as limits, I guess. Yes, it was simply a fiscal limitation in other years. In 1991 the act was simply called the Loan Act of 1991, the wording essentially the same as Bill No. 15, which is the bill we are debating today. The limit in 1991 was $325 million. Then we had, in 1992, Bill No. 21. It was The Loan Act of 1992. The limit, interestingly, that year was three hundred and sixty-five. There was a limitation section on each act.

The 1992 act, I will just read it, says: The principal amount of securities issued under the authority of this act shall not exceed in the aggregate the sum of $365 million in addition to the aggregate of all sums of money applied since April 1, 1992, to the retirement, repayment, renewal or refunding in whole or in part of securities issued under this or another act; and (b) all sums of money applied since April 1 of 1992 to the Newfoundland Government sinking fund or another sinking fund established for the retirement or repayment in whole or in part of securities issued under this or another act.

Also under Section IV of that particular act, Mr. Chairman, it states that: Subject to section V, the sums of money authorized by Section II to be raised for the purposes mentioned in that section are in addition to all sums of money authorized to be raised by way of loan under another act.

So, interestingly, we see this kind of wording to differentiate between the Loan Act of 1992 and its relationship with other pieces of legislation; but clearly we have in the Loan Act of 1998 reference to the fact that we are only talking about this act. In fact, it states specifically that the money raised under this act is in addition to monies raised under other pieces of legislation.

The Loan Act of 1993, again the wording is identical; however, the limitation in 1993 is $250 million. So what would be an interesting question, I guess, for the Minister of Finance is: What constitutes the difference? Why do we have a difference, sometimes as much as $100 million or $150 million in the limitation? Under Section III of the act, why is it $200 million? Why is it $300 million or $350 million or, as in the case of 1993, $250 million.

Just continuing on with the review of the legislation, just to see the differences which have been applied, we see in 1996, under Chapter V, again the same act, same wording, the limitation, the lowest amounts of the recent review of the legislation, showing $150 million. I will just read that section, under Section III of the 1996 Loan Act: The principal amount of securities issued under the authority of this act shall not exceed in the aggregate the sum of $150 million in addition to the aggregate of: (a) All sums of money applied since April 1, 1996 to the retirement, repayment, renewal, or refunding in whole or in part of securities issued under this or another act; and (b) all sums of money applied since April 1, 1996 to the Newfoundland Government sinking fund or another sinking fund established for the retirement of or repayment in whole or in part of securities issued under this or another act.

The limitation under Section V of the 1996 legislation states that: Notwithstanding the Loan Act of 1994, the Lieutenant-Governor in Council may not, after the coming into force of this act, raise by way of loan further sums of money under the Loan Act of 1994.

AN HON. MEMBER: A blank cheque.

MR. OTTENHEIMER: Completely, I say to the member, it is a complete blank cheque.

The amounts, I say to the member, are astronomical: $350 million; $375 million; $250 million; $200 million. It is just like taking candy from a baby. That is the impression the legislation gives.

Mr. Chairman, when you look at the amounts - and again in the Loan Act of 1998 we see the limitation of $200 million - the question has to be asked: Why the deficiency? Why is there such a void? Why is it necessary on a yearly basis, particularly since 1991, I notice with interest - why is there a deficiency of such exorbitant proportions, Mr. Chairman? The amounts are just astronomical. Why is it that when doing its forecasting and going through the normal and routine budgetary process we see amounts of, from time to time, in excess of $350 million, or even the limitation amount of this bill before the House of $200 million? These are exorbitant figures I say, Mr. Chairman, and the question has to be asked, why?

I guess if this type of budgeting is the order of the day, Mr. Chairman, it is no wonder that when doing the budgetary process some of the estimates were so outlandish and so far apart in terms of what was budgeted for last year and what the revised figures were for last year and what the new amounts are in terms of estimated amounts for 1998.

It is a question of process, Mr. Chairman. It is a question of procedure. It is a question of accounting. It is a question of accountability, and that goes to the very root of the obligation which members opposite must meet on a day-to-day basis when responding to and dealing with the very real issues confronting the people of the Province of Newfoundland and Labrador. It is an accountability issue. Why is it necessary that such extravagant amounts of money are required and being requested on behalf of the people of the Province of Newfoundland and Labrador on an annual basis? Again, in Bill No. 15 we see some $200 million.

Mr. Chairman, the Budget Highlights; I know the Member for Cape St. Francis, when dealing with the Budget Debate, often refers to the Budget Highlights 1998 when he speaks in debate. He reviews, for example, the priorities of government. He reviews in detail where government has fallen down in its obligation to the people of the Province. It is all found in the Budget Highlights because in government's attempt to highlight and I guess make known to the people of the Province what it is proud of, by the same token it can be used as the basis of criticism of where this government has shown weakness and where this government has not been able to fulfil its obligation to the people of the Province. It is only a matter of just going through the various headings, Mr. Chairman.

Health care; the member directly in front of me, the Opposition House Leader, on a daily basis questions the Minister of Health and Community Services on real day-to-day concerns as they relate to the health industry in our Province. Very often his questions are highlighted and very often his questions require public attention. Very often if it were not for his questions I say, Mr. Chairman, many of the defects and many of the loopholes and many of the problems which confront our ordinary citizens on a day-to-day basis would be overlooked.

We see problems in education. The Education critic, the Member for Waterford Valley, he, too, on a regular basis asks questions of the Education Minister dealing with problems as they are found in the classroom; problems as they are found in the teaching profession; problems experienced by teachers on a day to day basis; questions with respect to teacher pensions; questions with respect to: How is it government can deal with problems and issues as they confront schools and communities, yet school boards supposedly have made those decisions in the best interest of those schools and communities? The Member for Waterford Valley, as Education critic I am sure, will continue doing that because there are important questions. And ministers opposite have to be held accountable, Mr. Chairman, on a day-to-day basis not only to their own portfolio but in terms of government at large, government generally. What is the direction of this government? What is the fiscal obligation and the budgetary responsibility of this government in terms of its obligation to the people of Newfoundland and Labrador? Mr. Chairman, it is important that these questions be asked.

We have, in the Budget Debate, reviewed not only the issues as they relate to health and education on a regular basis. We have talked about the very serious problem of out-migration, and how tens of thousands of our fellow-Newfoundlanders and Labradorians have found it necessary to leave our Province in recent years. A sad statistic, a statistic and a fact which in my view is completely being overlooked and not being given the attention it so rightly deserves and yet, for some reason or other, it is beyond me.

There should be no Ministerial Statement given in this House, Mr. Chairman, that ought not be prefaced with the wording: In view of the serious problem of out-migration in this Province, we make the following announcements... That is the importance that should be attached to the very real problem of out-migration. There should be no government initiative, no Ministerial Statement, no piece of legislation, without having as a fundamental part of it and reason for it the fact that so many of our Newfoundlanders and Labradorians are leaving Newfoundland on a day-to-day basis.

We hear, Mr. Chairman, of the great announcements, the great mega-projects. Unfortunately, at this stage at least, it is only something that we can perhaps one day look forward to. Voisey's Bay has become a concept rather than a reality. The whole Churchill Falls agreement, we have not seen proof of what this agreement is all about. The people of this Province have not had the benefit and the opportunity to pay attention to this agreement in terms of its real benefits to the people of this Province. The oil industry, although on a day-to-day basis there are elements of the industry which continue, the question has to be asked: Have Newfoundlanders and Labradorians reaped the benefits totally and ultimately in response to an industry which was to have taken off in leaps and bounds? Have Newfoundlanders and Labradorians, whether directly or indirectly, reaped the benefits attached to such an important industry?

The answer in response to that question, Mr. Chairman, in my opinion, has to be `no'. There are other opportunities that we have not availed of; there are job opportunities which Newfoundlanders are very often deprived of; there are opportunities both in the offshore and the related industries onshore that have not seen the full fruits and benefits being accrued to Newfoundlanders and Labradorians and, Mr. Chairman, that is most unfortunate.

So what we have and what we are confronted with today, Mr. Chairman, is an ongoing debate on why it is necessary for government to once again be given a blank cheque in its failure to be accountable to the people of the Province of an amount of not in excess of $200 million. Significant monies I say, Mr. Chairman. One has to question government's ability in dealing with such an important issue on a day-to-day basis.

Mr. Chairman, in conclusion, I would ask members opposite to think very carefully and critically as to why it is necessary for legislation to be introduced in this House similar to Bill 15; why it is necessary for an act such as this to be introduced in this House dealing with the issue of raising money by way of loan by the Province. We are talking about the people of this Province once again being put on the hook. We are talking about the people of this Province once again being responsible for an amount not in excess of $200 million and that is no small obligation. That is no small undertaking, Mr. Chairman, and it is an undertaking which government ought to take very seriously and the people of this Province, indirectly, must take very seriously because of the approaches and the policies of this particular provincial government.

With those few comments, Mr. Chairman, I now defer to one of my colleagues to continue on the debate of Bill No. 15, the Loans Act, 1998.

Thank you, Mr. Chairman.

CHAIR: The hon. the Member for Waterford Valley.

MR. H. HODDER: Thank you, Mr. Chairman.

I rise to participate in the debate on Bill No. 15. This being a finance bill, we have had considerable discussion since March 22 when the Budget was tabled and, of course, a few days before that we had the Throne Speech tabled in the House.

Mr. Chairman, we had anticipated, when the Budget was read this year, we would see some rather bold initiatives being brought forward by this government. However, to date, we have not seen a great deal that we could say represents bold initiatives. We did see, after much pressure by the Member for St. John's West, the government change its mind on the Child Tax Credit, after seeing the former Minister of Social Services, now the Minister of Health and Community Services, stand in her place and repeatedly, over many, many days when she was minister, say that there was no way they were going to change that, and the current minister doing the same thing for weeks and weeks on end.

We do know that government relented and finally we have a situation where the assistance to those families who are on low incomes, wanting to find work and unable to find work, will not, shall we say, be helped out, or their assistance programs will not be found through cutbacks to the very poorest of families in the Province.

Mr. Chairman, when the Budget debate was on we brought to the attention of the government the issue of school closures and school consolidation. We had, in January, some protests here at the building relative to the whole issue of the procedures being followed by certain school boards. Some school boards have gone through a very detailed process, and we applaud those school boards who are taking their time and trying to make the right decisions. However, the school closure issue is still with us, and we note that the Avalon East School Board, having closed some schools this year, has indicated that next year as many as ten or twelve additional schools will be closing in the Avalon East School System. From the eighty-two schools that are now operating, in the next several years we could be looking at seventy schools or somewhere around that.

We have to ask the basic question: How many schools are going to be remaining in Newfoundland and Labrador in a few years? Certainly with the consolidations that are taking place in this Province - and I know what has happened in the greater St. John's area in the last few years, the number of schools that have closed. We know that, last year, eight schools closed in District 2, the great Northern Peninsula and Coastal Labrador, and three more are scheduled to close this year. That is eleven schools over the last twelve or fifteen months.

Mr. Chairman, we know what happens in some communities when schools are slated for closure. It is often said that the school is part and parcel of what a community is all about. Mr. Chairman, we wanted to raise that issue. We wanted to get some more information from the government relative to school closures and get the assurance that people's voices are being listened to and that the focus is always on what is best for the child.

When I talked to people from the great Northern Peninsula in the last month, they told me they were quite willing to bus their children longer distances, they were quite willing to see their children leaving home earlier in the morning and arriving back later in the afternoon, they were quite willing to see their community school close, but what they wanted was more programs for their children. It was promised in educational reform, but in many parts of this Province it is not being delivered. In other words, we know that parents want improvements in curriculum and improvements in program options, but these programs are not being delivered to the students of the Province.

Mr. Chairman, we had a big production last year on a three-year fiscal and economic plan. In fact, we were told that in the next year or so all you would need to do was put the flesh around the bones that were there and that it would be quite simple to do the budget. What we see this year is no more detail than there was last year, a big production over a three-year fiscal and economic plan. We still haven't seen any more details than three pages of documentation. Mr. Chairman, these kinds of generalities do little for the confidence of the people of the Province and do little for the confidence of the business community.

When Clyde Wells was premier he talked about doing an economic plan, a great production of that, and had an Economic Recovery Commission. However, by the time this Premier got into office, one of the very first things he did was scrap it, because it didn't produce the kind of jobs and diversification that had been promised. What did he replace it with? Absolutely nothing. We have gone from having an Economic Recovery Commission to having no strategy whatsoever.

Mr. Chairman, the issue that was not addressed in the Budget was the out-migration issue. Every single day we hear tell of people pleading for the government to give them some strategies on how they are going to rescue the rural communities from what amounts to a death sentence. We know that the data for out-migration is alarming to everybody. We have seen the television programs on CBC where we see families leaving Port aux Basques and going elsewhere in the country. It is alarming because many of these families who are going represent our most able, most educated, our youngest families, the child-bearing age group. It has tremendous implications for the continuance of our communities, and in some ways the continuance of our society.

Mr. Chairman, we are breaking all records. People are leaving Newfoundland by the thousands. We know the data means that our communities in rural Newfoundland are becoming, in many cases, nothing more than homes for senior citizens. Families will tell you that their children and their grandchildren are now located or living in other provinces, particularly in Alberta, Ontario and British Columbia. In fact, last year we lost nearly 8,000 predicted, and we are predicted to lose another 9,000 this year. Instead of a strategy to deal with it, we see a government indulging in self-pity and wringing its hands and not coming up with anything other than one excuse after another.

Mr. Chairman, we must do more to keep our children and grandchildren in this Province. We haven't seen these kinds of strategies being put forward by the government yet. We say to the government: You should be looking at more investment in technology and education. We mentioned the other day here that there are probably examples in other countries where there are long-term benefits from a solid investment in education. Much talk has been about the examples in Iceland and Ireland. We have to look and examine the ways in which these countries in these parts of the world have bolstered their economies by investing in a solid educational program.

In Newfoundland and Labrador we have gone through reform in education, but instead of putting money back into education, what have we done? We simply use reform to slash more money from education, instead of using reform to bolster education, to put more money back into it. We have said that all the money that is saved by way of the reforms in education will have to be looked after in the general allocations and budgetary process that is followed by the Minister of Finance. In other words, the money that was saved from educational reform does not go back into education itself. So we have to say that we are making it more impractical for young people to stay in school. We are making it sometimes impossible for them to be assured of a high quality education.

Mr. Chairman, we know that this is also connected to the whole subject of rural renewal and why we have all of those mega projects that get talked about, the offshore, the oil and gas, and all of that kind of thing. They make wonderful headlines. They have not delivered the jobs that are called for in rural Newfoundland. When we look at the television at night, what do we hear? We hear of towns turning off their street lights and we hear and see occasions of where houses are boarded up and people are leaving.

As a matter of fact, just a few days ago I drove through community after community on the Great Northern Peninsula, and this past weekend drove down around the southern part of the Avalon. You could see example after example of people who have given up. They have left rural Newfoundland to find jobs elsewhere, most of them in other parts of the country. That is very regrettable, because as I said before, it means that we are losing our youngest and our best people.

Mr. Chairman, one commentary on the local news the other evening spoke about the street conditions in a local community. It was basically saying that the town had such a problem with its pavement, that the potholes were so large and the edges around the asphalt were so great, they would be better off if they were back to the dirt roads.

Mr. Chairman, so people who are hungry for work out there know the consequences when it comes to the municipality. Municipalities have very high debt loads. They cannot afford to go out and borrow money to improve their streets, because they are already in debt beyond their capacity to pay. Of course this present government as now said: We are sorry, you are on your own. The Minister of Municipal and Provincial Affairs has made quite a production of the fact that you have to pay your own way. Well, how do you pay your own way when you have 70, 80 or 90 per cent unemployment? That is very difficult to do. If you had a choice, as an individual, between paying your town taxes and putting bread and butter on your table for your children, I do not think any of us here would have any doubt as to what we would do ourselves.

Mr. Chairman, these people out in these municipalities are finding it very, very frustrating and finding it very difficult to be able to make ends meet and be able to cope with the situations as they unfold from day to day. What these people want is a job. They want to go to work. They want a solid plan for their future and for their children's future. Mr. Chairman, when we see them leaving Newfoundland and Labrador, they have essentially given up hope in this Province. They leave because they are frustrated and they do not see any way out of their situation, other then to migrate to another province.

Mr. Chairman, the Premier talked, in this session of the House, relative to the post-TAGS program. We know that TAGS is primarily an issue for rural Newfoundland, although there are some people who are dependant on TAGS who live in the Waterford Valley District; not very many, but there are a fair number, probably several dozen. Mr. Chairman, that is small in number compared to my friend's district, the District of Bonavista South. However, there is not a district in this Province that does not have people who are dependant on TAGS.

Mr. Chairman, we have seen the provincial government run back and forth to Ottawa to talk to their good friend and federal cousin, the federal minister responsible for Newfoundland, the hon. Mr. Mifflin. However, it has not exactly been great news. We know that the present Government of Newfoundland wants to get some kind of a package ready so that if they want to call the provincial election this fall they will have some kind of a placebo to give the people. They will have some kind of a package that says we are going to get you through the winter and hopefully that will be able to alleviate the concerns of people long enough to get them to the ballot box. However, I don't believe their strategy will work. People want more assurances. They are not willing to say that we will give you a post-TAGS package which will get you to 1999. People want to go beyond that. People want to know where are the strategies that are going to give them assurances of jobs in the year 2003 or 2004.

Mr. Chairman, we have seen the Province play with the post-TAGS (inaudible). We know of the trips to Ottawa. We know that there have been literally thousands of people who came off TAGS in the last month and we know the frustrations that they have encountered. Mr. Chairman, it concerns all of us that so many of our fellow Newfoundlanders and Labradorians are today in severe financial straits.

What people wanted was some delivery on the hope that was put out there by the present Premier when he talked about a better tomorrow. Many of these people are asking: When will their better tomorrow start? They were sold a package of hope two years ago. Now people are wanting to put some actual programs in place that mean that that delivery of hope will be seen by way of creative jobs and some way in which rural Newfoundland is able to survive into the future.

Mr. Chairman, we have seen great talk in this Budget about students. We have heard tell of the program from the federal government, the Millennium Fund, and we applaud that. We think that is a good fund. However, we do note that the Province, in putting forward its commitment, its $4 million, says that only students who are going to university will be able to access some of these funds. Private college students will not be able to access those funds. That is fundamentally unfair. Mr. Chairman, we want to say again to the Province, make sure that when you spend your scholarship money that it is awarded on the basis that is fair and equitable to all students.

Mr. Chairman, perhaps it is time for us to begin to look at a better program of student loan remission. If students go to school and we say that their schooling to Grade XII is free, maybe we should be looking at some way of extending that beyond Grade XII. By way of either student loan forgiveness or based on their performance at university they should be able to get greater forgiveness if they succeed. I don't believe in paying tuition for students in post-secondary if they are not going to apply themselves in a diligent manner, but I do believe that students who apply themselves in a diligent manner, then their need for a post-secondary education should not be a mortgage around their necks for the rest of their lives.

Mr. Chairman, we know how difficult it is for students to survive on student loans. We know that there has not been any adjustment to these in many, many years. We, ourselves, expect to have increases in our cost of living from time to time. We know this year that government gave out a measly 2 per cent to its employees, but for student loans people they have not had any increase for years and years and years. It is very difficult now, with the increases in tuition, for students to be able to survive on student loans when the rates have not changed for many years, in spite of the fact that tuition and other costs have gone higher and higher every year.

Mr. Chairman, the young students of the Province want something done about their situation. We have asked question after question on this matter in the House of Assembly, yet there is nothing that we can report that would let them know that this government has become kinder or gentler or more approachable or more compassionate or more understanding. Mr. Chairman, we have to start to address some of those issues as well.

Mr. Chairman, with these few comments, I will now go and let my colleague, the Member for Ferryland, who is anxious to speak, address the House on the issues that are of concern in his district.

CHAIR: The hon. the Opposition House Leader.

MR. SULLIVAN: Thank you, Mr. Chairman.

This bill, giving the Minister of Finance the authority to go around with $200 million, that is not exactly peanuts.

Now I just have a few general comments. I guess this year some bonds are becoming due and I guess the ability to go back to the market again and to be able to - looking on page 252 in the Estimates at the back. I am sure the minister is aware, as there are only a couple anyway. One of the series, Payment in Canadian Dollars, that is, I think, a redemption of $150 million in Canadian this year. It says 1992/1998, $150 million. When was that due? What month would that be?

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Yes, I am just looking at the general Appendix II now, 1992/1998. The series is EC5, $150 million at 9 1/8 per cent. Of course, the interest, $13,687,500. It does not say the date on this one. It gives the year of course. Most of them are only done by the year.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Oh, yes. I will just ask a few questions. I just want to get some insight as to when they are becoming due and basically the position you are in.

Also we have redemption, I think, of - it says floating interest rate, series J12, $42 million. There is a redemption on that too. I am just wondering what are the rates are now we might be getting. It is 9 1/8 per cent. Well, the floating rate on the other one, I guess it is just a specific rate depending on what the basic prime is out there? I would assume that is how it works.

I am just wondering, basically, what is on the market now, what we are paying, really, to go back on the market now, and what is the position of government on the ones that are coming due. Maybe the minister could go just a little bit farther afield. If he has looked ahead beyond this year and next year, what are the rates and, you know, what our position might be. Can we borrow cheaper now? I know some were out at a very high rate and others are, I guess, in a moderate range. What is our position going to be there? Is our borrowing going to increase by refinancing and going back to the market again? I am not sure. That is all I see that is due for them.

I see the $42 million and the $150 million in Canadian, that is $192 million. I am just wondering, also, the Canada Pension Plan one says for twenty years - 1978-1979. I guess that will be due in 1998-1999. I would assume this is for this fiscal year, up to March 31, 1999. Maybe the minister could enlighten us on that, on the market and what it is like, and overall with our Budget this year projecting at $10 million, and last year we had $20 million. Even though anybody out there would know that we had warrants, I think, on March 12 for $21 million under the Newfoundland and Labrador Education Investment Corporation, and we had $4 million in scholarships that were prepaid.

Also, I guess, from the credit rating agencies out there, they look at those aspects. They also, I guess, in setting our rate, look at basically that we do have a structural deficit there, as the minister is probably well aware, and the HST certainly has a big hole to fill, that the economy will never grow to make up the difference in lost taxes from retail sales to HST. I mean, you can ask Dave Gulliver, he will tell you that.

We also have structural deficit basically because our twenty years, $8 million a year under Term 29, of course, this is the last year on that too. We do have a structural deficit, but we also prepaid certain things. Maybe he can answer this when he is up, too. Discussions, I am sure, are ongoing continually with our credit rating agencies on information. That is not a haphazard thing, they drop by and take a look at your books and then they go on again. This is a continuous exchange going on. What is the prognosis there? He might want to let us know.

Looking at the bottom line, it seems to be that we are on a pretty even keel, and with a lot of good news coming. Are we on the verge of moving into an upgrade in our credit rating, I would ask to the minister? Hopefully our borrowing, too, on the market. With reference to borrowing, maybe he can tell us this. Normally when you deal with other currencies you do some hedging and so on. Do we owe hedging on all our foreign borrowing? The minister might be able to tell me that, or just answer some of these first of all, to see where we are coming from in the borrowing area.

CHAIR: The hon. the Minister of Finance and Treasury Board.

MR. DICKS: Thank you, Mr. Chairman.

The hon. member raises some questions concerning the government's borrowings. We project that over the next ten years or so in general terms we will probably be borrowing in the vicinity of $600 million per annum. This is a combination of retirement of existing indebtedness which comes due on a periodic basis, mostly in fifteen, twenty and thirty year intervals. The other part of it would be borrowing our equity requirements for Churchill Falls because the Province would have to borrow that money through hydro and so on as well, so we have substantial borrowing requirements.

What happens in each year - the hon. member mentioned spreads. The first (inaudible) he mentions, $150 million, had an interest or coupon rate of nine and one-eighth per cent. The amount of money that we pay in the market for borrowings depends primarily on the length of term that we go. So, by and large, the longer the term the more you pay in today's interest environment.

You have periods of time where short-term rates - they call it an inversion - an inversion where short-term rates exceed long-term rates, but at the present time your long-term rates are generally more. We always are faced with an issue each time we have a renewal of a debt, as some of these are, and a repayment, because we do not really pay off any debt because we are not taking current revenues; we are refinancing, in essence. So we have to consider a number of factors.

The primary one is - it is not primary, these are all of equal value when you look at the total cost to the Province. One is where you borrow the money, if it is in Canadian funds, U.S. funds, Swiss or Japanese, which have been our traditional markets; and, secondly, the length of term, because the length of term means that you have it certainly for a longer period of time so you are not subject to short-terms fluctuations. As well, short-term borrowing for five years, for example, may be at a lower rate, but if your long-term prognosis is that rates are going back up, you intend to borrow for a longer term.

Right now our best judgement is that we probably, for the most part, should be borrowing in the Canadian market and we should be fixing long-term money. The rate we paid on our last issue was about 6.17 per cent. I think it was 6.13 and then the fees added in were another four-tenths of a percentage point. Those are some aspects of it.

The other factors that are relevant: for example, this year we may have to finance a loan that was taken out in Switzerland, I think, ten or fifteen years ago. The Euro-bond market generally does not go beyond ten or fifteen years. Most of our Swiss issues are issued for a term of ten years with a right to renew for a further five years. So what we do each time is look at currency exchange rates and look at interest rates.

What you will find, for example, if you go into the Swiss market - last year we looked at doing one issue. We did one in Switzerland, and we did the second one that (inaudible) in Canada. The reason for it is that, if you look at the Swiss market, the interest rate right now would probably be about 3.25 per cent or 3.5 per cent; but in Switzerland, if you borrow, if you are a sovereign and borrow, you would pay about 2 per cent of your gross amount as a fee. In Canada, last year at this time, we were probably borrowing somewhere close to 6 per cent but the actual cost of borrowing is seven-tenths of a per cent. So it is a substantial difference in fees. For some reason the Swiss charge about 2 per cent to 3 per cent and these are negotiated, whereas in Canada - so what you do is you look at your term of borrowing, the difference in cost as well.

On another point raised by the hon. member, he asked about hedging. What we have been doing lately is this. You can buy currency futures. The problem with this type of security, and you hear a lot of them bandied about, is that the longer you are out the more costly these become. Who wants to take a guess at how much it is going to cost to buy Swiss francs in the year 2020, for example? You can do one of two things. Either you can try to buy currency futures on a long-term basis or each year to hedge against your currency cost, and that is a little unpredictable, so you get into what they call (inaudible) in this case derivatives. Banks will develop for you certain types of derivative products, but it is very hard to analyze those. There was a recent problem in the States with Banker's Trust that was very interesting, because they found there were a lot of problems in how they had arrived at the cost of derivatives.

The second thing you can do is, you can convert your money. What we did in the last issue was we borrowed in the Swiss market but we immediately converted that currency into Canadian dollars. What you do is you fix your currency liability. Whatever the exchange rate at that time was, all we have to do is repay it in Canadian dollars, but you repay it having paid Swiss fees and having paid the Swiss interest rate over a longer period of time. What you do, of course, is over the long term that may not be prove to be favourable because the Swiss franc may decline, or it may go the other way.

Each year we have varying experiences. I will give one example, and this is not necessarily illustrative of all of them. Last year when we repaid the Swiss issue we figured that we had saved about $64 million over the ten years that we had that issue. The interest rate was lower, and the currency fluctuations up and down netted back to the Treasury about $60-odd million. If we had taken out a comparable Canadian issue we would have paid that much more in interest, and also factoring in currency depreciation as well. So we were fortunate. That was because the Swiss franc had declined to about $0.92 Canadian. The year before we had lost $7 million on Swiss currency because it had traded at about $1.14. I know the hon. member appreciates this.

AN HON. MEMBER: (Inaudible).

MR. DICKS: That is right, so we are about even. It changes, fluctuates back and forth, depending on a whole number of factors of international - just by coincidence, one very relevant one, Asian shock waves.

I guess the point I would make to the hon. member is, it is difficult enough to predict when you are dealing in a domestic market, but if you add into it the fluctuations of international trade, then that has a lot of ramifications as well.

With respect to an upgrading, we are just starting a round of meetings with the bonding agencies. I had a meeting last week with the Dominion Bond Rating agency which is one of the Canadian ones. I am having a meeting tomorrow with Standard and Poor's, and over the next several months we will meet with Merrill Lynch and Standard and Poor's and Moody's and others. We are getting very favourable reviews. They are very strong on our fiscal performance and managing the money, and they are also very upbeat about the economy here. They believe that Newfoundland and Labrador, for a lot of reasons, most of which we know, is a good bet for investors.

The result of that, in the long-term, is that if they improve our credit rating, which I believe will happen over the next several years, then that will make the money cheaper to borrow. We, right now, borrow with a spread off the Canadian Government of about forty basis points. Historically, we have been as high as 125 basis points. Again, the spread varies, determined on the period. So if you borrowed for five years, your spread off the Canadian rate might only be twenty basis points. If you go out thirty years, you spread right now probably would only be about forty basis points. In other words, if we went to market and the Government of Canada went to market on say a thirty-year issue, it would probably cost us about four cents to make that borrowing.

So these are important factors, and in answer to the hon. member's question, I believe that over the next several years, if we maintain our fiscal stance and if we have the degree of development we expect in the Province, we will be upgraded. I can tell you that the first meeting I had with the Dominion Bond Rating agency was very favourable and frankly, they have been the most pessimistic on the Newfoundland economy and its outlook.

Those are the questions I recall the member raising and I hope, in large part, I have addressed his concerns.

CHAIR: The hon. the Opposition House Leader.

MR. SULLIVAN: Thank you, Mr. Chairman.

Overall too, I guess we, fairly heavily, have been in the foreign market too. I just looked down quickly here at US. We are almost $1.2 billion in the US market. That, with the weak Canadian dollar too, can pose some problems. A lot of these are not due now in the short term which is good for us, we hope. By 2001, I think, is the only one, but some of the major ones are certainly well into the year 2020; a lot of these. So we should be okay there for a while. Hopefully we will get a stronger dollar for a short period anyway. It does not do any good for our exports to have a strong Canadian dollar, but certainly on the other hand it helps in the borrowing process.

So, is there a movement now, as I know the minister alluded to already, to try to shift, where possible - certainly in the Canadian which he made some reference to. Is there any long-term strategy in that? I know you cannot always make long-term plans because foreign exchange, you want to take advantage of when they become due and move on it.

It would certainly be advisable, I would say to the minister, if you can tie it now to the long-term Canadian ones, as he mentioned; about 6.17 with 4/10 of a 1 per cent charge. It certainly would be advisable to do that in terms of Canadian. It gives us a bit of stability there. There are always sufficient amounts coming due to stagger it if we get in a grave situation, like we are going to get with his next budget and have a surplus there. He will be doing like Paul Martin then, wondering how he is going to spend it or whether we are going to pay down some of the debt. I do not think that we will be in the situation where we will have to worry about paying about a big amount of debt.

I guess the positive point of this is, as time goes on and inflation goes on and we can hold our debt in line it becomes less significant. It becomes a smaller part of our GDP and eventually it will be mean very little. That is the only hope we can have. I do not think we are going to have that big a flurry there.

We are having an out-migration that is going to impact on our revenues and on our transfer payments. I think the minister indicated that. Certainly government sources will tell you. I do not know what our economists might say, but our government source will tell you that it has an effect, up to $2,200 for each person. I think that is roughly $2,200, $1,800 probably in the equalization part and $400 in that Canada Health and Social transfer aspect.

Overall, I think it is important that our Province is one of the few Provinces - too high a per cent of our borrowing has been in foreign borrowing, and that is not really a healthy situation.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Four fifty-nine. Well, I am sure the people like to get out of here early.

So, with that I will adjourn debate on this and we will have a vote tomorrow, I say to the Government House Leader. I do not think we have any other speakers. Do we have one?

AN HON. MEMBER: (Inaudible)

MR. SULLIVAN: Well, I am not sure about that. He wants to speak. So, I just want an opportunity, minister. So, I will adjourn debate on it now.

CHAIR: The hon. the Government House Leader.

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

AN HON. MEMBER: Stop the clock.

MR. TULK: Stop the clock?

Mr. Chairman, do we have agreement to stop the clock for this bill?


MR. TULK: So, it is out of the way. Whatever you want to say, you can say it somewhere else.

CHAIR: By agreement, we stop the clock?

MR. TULK: No, no. He wants to speak. How long do you want to speak?

AN HON. MEMBER: (Inaudible)

MR. TULK: Not now. Okay.

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 (Snow): The hon. the Member for Lewisporte.

MR. PENNEY: Mr. Speaker, the Committee of the Whole on Supply have considered the matters to them referred, have directed me to report progress and ask leave to sit again.

On motion, report received and adopted, Committee ordered to sit again on tomorrow.

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

MR. TULK: Before we adjourn, Mr. Speaker, I want to advise hon. members that tomorrow night the House will sit. We will take a supper break from six to seven.

On Wednesday, Private Members' Day, I think we have agreement with the NDP and the Loyal Opposition that we will give up our Private Member's Day for Wednesday, which would not in any way curtail them, the Official Opposition, from taking up the Wednesday following. So on Wednesday we will just do ordinary routine business by leave of the House.

AN HON. MEMBER: (Inaudible)

MR. TULK: Well, the next week is yours.

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

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