The House met at 1:30 p.m.

MR. SPEAKER (Snow): Order, please!

Statements by Members

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

MR. MERCER: Thank you, Mr. Speaker.

Each year the Canadian Forestry Association awards a community the title of Forestry Capital of Canada. The award recognizes a community in Canada which is noteworthy because of its commitment to and its dependence on the forest resources and the community's civic-minded recognition of this interdependence.

Since it was established in 1979, the Forestry Capital of Canada award has normally received attention during National Forestry Week but in recent years activities have been expanded to include special events throughout the year as well as permanent legacies.

I would like to congratulate the City of Corner Brook on recently being named Forestry Capital of Canada for 2002.

SOME HON. MEMBERS: Hear, hear!

MR. MERCER: I also want to wish the people of Corner Brook well as they work to ensure that the impact that this designation is evident during this special year and also into the future.

Thank you, Mr. Speaker.

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

MR. OTTENHEIMER: I wish to pay tribute today to a widely celebrated teacher in Newfoundland and Labrador who, on March 30, demonstrated tremendous courage in an act that I believe warrants notice in this Legislature.

Music educator Susan Knight, a highly respected music teacher in this Province and the founder of the Newfoundland Sympathy Youth Choir, announced she was resigning as a music teacher in protest over the government's decision to cut the time allotted for music education in primary schools. She made clear that this was a move in the wrong direction that would have serious implications for our students and she was joined and fully supported in making that statement by a large contingent of educators, parents and members of the arts and culture industry.

MR. SPEAKER: Order, please!

Hon. members all know that statements that are reserved for members ought not to be of a political nature and obviously this is, in the Chair's opinion -


MR. SPEAKER: Order, please!

MR. OTTENHEIMER: (Inaudible) of independence and an act of judgement by a constituent of mine -

MR. SPEAKER: Order, please!

I ask the hon. member to take his seat.

It is in the Chair's opinion that this statement is political and ought not to be presented at this time.

The hon. the Member for Torngat Mountains.

MR. ANDERSEN: Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. ANDERSEN: I rise today to inform the House of a community forum which took place in Nain from March 25 to March 28.

Mr. Speaker, it was about this time last year that the community of Nain went through a very difficult time when we saw a large amounts of suicides over a short period of time. Determined to make Nain a better community they began a healing process. People from the five Aboriginal communities in Northern Labrador gathered in Nain, along with two adults and a youth from Pangnirtung, Pond Inlet, and Cambridge Bay. They spoke over a number of days on the steps that they are taking to try and make their community a better place to live. While these people have taken the right approach by playing the lead role, they are showing the Province and the rest of Canada that they are determined to put their life back in order.

Mr. Speaker, while they do that, I also caution government that for some of the problems that was caused to these people, the government too has a role to play. I congratulate the people on the North Coast for taking advantage of a meeting such as this to try and put their lives back in order. By doing that, I congratulate the organizers and the people in Nain.

SOME HON. MEMBERS: Hear, hear!

Statements by Ministers

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

SOME HON. MEMBERS: Hear, hear!

MR. BARRETT: Mr. Speaker, I rise today to inform hon. members of a very serious situation the Province is facing right now.

As my colleagues certainly know by now, snow clearing heavy equipment operators with the Department of Works, Services and Transportation are unionized members and are now on strike.

As per the essential services agreement signed with NAPE, the department has one employee operating equipment from each of the department's forty-four depots.

Mr. Speaker, the weather over the past several days has put the department in a very difficult situation. The number of essential and management employees we have right now are not enough to cover the demand for snow clearing throughout the Province.

My officials tell me highways and roads are closed in various areas of the Province and that driving in most other areas from Central Newfoundland east is extremely difficult. Mr. Speaker, the forecast for the next day or so does not look promising.

Those employees now working are doing their best to keep roads open, but only so much can be done with limited resources. My officials in the Clarenville area, which is being particularly hit hard, had to hire the services of a contractor to assist in some areas, but the weather is making it extremely difficult to make much progress.

Mr. Speaker, we are very concerned about this situation. Yesterday one of my officials contacted a union negotiator for MOS on a number of occasions and requested the allocation of additional essential employees to address the situation. We received a negative response to that request.

As of right now, we have not received an official response from the union, but we have been told by a union negotiator that we can expect a response by the end of today. We have written the union again to ask for another response.

Mr. Speaker, if we are not granted this request, we will have no choice but to engage the services of private contractors as necessary to try and address the situation. We are asking the union and picketers for life safety reasons, that if we have to go this route, not to interfere with this process. I believe they will understand the seriousness of this issue.

We have numbers in each of our regions where people can call for emergency situations. We have personnel monitoring road conditions and available to take calls twenty-four hours a day. Or if there is an emergency, individuals can also contact the local police detachment.

Mr. Speaker, acting in the public interest is government's number one concern right now. We have all available resources acting on this and are managing the situation. We are monitoring diligently and will do what is necessary to improve the situation.

Thank you.

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

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

This is indeed a very serious situation. The question that begs to be asked, over the last several weeks government had provided, very publicly, to all members, or all people living in the Province, that they had entered into agreements; that they themselves had selected what they felt were essential services in the event of emergencies; that they themselves - and government has this right and role to designate employees for essential services in the aspect of a strike. Part of the side agreements, or side negotiating that goes on, is that government indicates to the bargaining units that in the event of a strike the following people, or following specialities, or following specialists would be required for emergencies.

What we see here, in my view, is the minister asking for the union - fair enough, but it begs this question: Why didn't government anticipate possible emergencies six weeks ago? After all, you do not plan for the best case scenario. You do not plan for sixteen to seventeen degree weather without having to plow the roads. In the event of public services being jeopardized, you do plan, I suppose, for the best or for the worst case scenario which would be the scenario we are presented with today.

I am not going to elaborate any further because we will deal with this issue and the issues surrounding the maintenance of public services in Question Period.

Thank you, Mr. Speaker.

MR. SPEAKER: The hon. the Member for Labrador West.

MR. COLLINS: Thank you, Mr. Speaker.

I can echo the statement made by the previous speaker on this as well. Essential services was something that was agreed jointly by both parties. Again, you do not plan for the best case scenario; you plan for the worst. My understanding is that NAPE have responded to requests around the Province from different people. I ask the minister: Instead of having an official from his department call a negotiator, why didn't the minister take the situation in hand himself and call the president of the union and make such a request?

Oral Questions

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

SOME HON. MEMBERS: Hear, hear!

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

My question is for the Premier, or whichever designated minister would like to answer it today. In view of the fact that the Province has said for the last several weeks - six or seven, as far as I can determine, at least - that in the event of a strike the maintenance of emergency services and essential services will not be jeopardized, I would like the Premier to stand and answer the question today: How is it that the Province finds itself in the situation today where people's safety is jeopardized all over the Province, where people have been stuck in ambulances, stuck in buses for the last thirteen to fifteen hours? How is it that a government who six or seven weeks ago told the public that in the event of a strike we would be fully prepared, how is it now that you have gotten caught with your pants down?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Thank you, Mr. Speaker.

I understand the Opposition wanting to raise a particular issue. The approach taken by the government in each of the departments in working with the public service unions, was that rather than unilaterally declare - because it is the workers more so than the government itself who would be able to apply the best judgement as to which minimum level of service they would agree to, because they also wanted to be able to operate an effective strike.

We are trying to do this as a partnership with the union, because the issue they have been talking about publicly, in case the Leader of the Opposition missed it, is about respect. We respect them enough to value their judgement as to the level of service that should be provided to provide basic essential services.

The departments involved and the government agreed that in the case of MOS, that for the depots, a starting point of one per depot - because the union had also indicated quite clearly, and it is on the public record, that if there was an unforseen circumstance, such as what is happening today, they would supply extra and additional above and beyond any that were declared. That is the process that we are going through now. Unfortunately, it is taking us a little bit longer than desired, quite a bit longer actually, to get a definitive answer from the union as to whether or not we can put some extras in place, because we did this by agreement with them, valuing their judgement as to what level of service could be provided.

SOME HON. MEMBERS: Hear, hear!

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

MR. E. BYRNE: (Inaudible). I have not missed it at all, Premier. The problem is that you and your government have missed it for ten years. That is why we are in the shape we are in today. If anybody has missed anything, it has been you.

SOME HON. MEMBERS: Hear, hear!

MR. E. BYRNE: Let me say this: The blame game has started from the Premier. That is what has happened here. Let me quote him this morning when he said: Some of the big issues with respect to safety, in issues that Minister Barrett was dealing with, the biggest issue or concern for us is monitoring what is happening in the Province today and trying to get some minimal acceptable level of services agreed to.

How can you make that statement today when six weeks ago you said that a minimal level of acceptable service was agreed to, Premier?

SOME HON. MEMBERS: Hear, hear!

MR. E. BYRNE: Why is it that you did not effectively plan for a situation that we are in today?

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Thank you, Mr. Speaker.

Let me answer the question again, because it is a serious question, Mr. Speaker. The fact of the matter is that we decided, made a conscious decision, to respect - we are not laying blame, and not trying to lay blame with anybody. I do not know why the Leader of the Opposition would even make such a statement. We are trying to respect the workers. We work with the workers. We are trying to find the right balance between respecting their right to have a legal and proper withdrawal of services while, at the same time, putting in place those basic minimal levels that would be needed.

What I was referring to today is that obviously - and the union anticipated this with us, because they had talked about it, in the case of: what if there was a plane crash or a major accident in which dozens or hundreds of people were involved at the same time? They said we would then decide and reevaluate what the minimal level would be, because we knew it would have to go up.

Because of the nature of this storm, which nobody could predict, the union had agreed that if we came to them they would reevaluate the minimal basic levels, and that is what is happening now. I would expect that the Opposition would be urging them, as we are, to come to their conclusion sooner rather than later as to whether or not they are going to provide additional personnel in the depots as an essential service now because of the severity of this storm.

SOME HON. MEMBERS: Hear, hear!

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

MR. E. BYRNE: We would urge the government, and anybody else associated with it, to do what is correct and right in the public interest. The issue that is at stake here today - I mean, Premier, this is Newfoundland and Labrador. This is the early month of April, and for the thirty-seven years that I have been here there have always been storms in April. We are in the middle of the North West Atlantic. There have been times, I say to my hon. colleague, when the university has been shut down for four days because of sleet storms. This is the month of silver thaw, so to speak.

It is clear that there was no mechanism in place by your government for proper planning. If there was, there would be operators on the roads today. Premier, the question is: Why haven't you put in place a mechanism agreed to by yourselves in advance of the strike, living up to the commitment and pledge that you gave the people of the Province, outside this door, that in the event of a strike any emergencies would be dealt with and dealt with expeditiously? Why is it that your government has not put the appropriate mechanisms in place, that you have today to stand up and publicly ask the unions to put in place, and point your finger at them to blame them for what is happening on the street today?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Mr. Speaker, the only person who has mentioned the word blame is the Leader of the Opposition.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: What we are doing, Mr. Speaker, is trying to strike the balance, and we know it is a very delicate, sensitive balance in a circumstance like we are now experiencing in a good part of the Island part of the Province. This is an extraordinary circumstance. Whether it be April or March or February or January, these kinds of storms are the exception in the year. There are not a lot of them.

Mr. Speaker, if the Opposition has been listening, the union is crying out with a plea for respect. We respected their views and asked them to work with us to jointly agree to the numbers of essential services that should be provided, whether it be in the health care sector, whether it be in Works, Services and Transportation, or whether it be in the school system. We worked through that process with them and got an agreement with the union in terms of the designation of essential services. Plus, Mr. Speaker, in the best interests of the people of the Province, because of circumstances like last night and today, we also had an agreement from them which is on the public record, that if there was an extenuating circumstance, like we are now experiencing, they would go beyond the agreed to numbers. They are evaluating that right now.

I think the responsible approach is for all of us not to blame anybody, but to urge them to make a determination as soon as they can -

MR. SPEAKER: Order, please!

I ask the hon. Premier now to conclude his answer.

PREMIER GRIMES: - as to whether or not we can have additional essential employees put in place right away.

SOME HON. MEMBERS: Hear, hear!

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

MR. E. BYRNE: Mr. Speaker, I would like to ask the Premier this question. He could clear it up. I understand - if it is wrong, fair enough, but it came to me this morning that after your public offer on the radio this morning to the NAPE leadership, I am told that you spoke directly to Mr. Hanlon. If you did, I wonder did you raise this issue with him? If you did not, the question is: Do you anticipate speaking with Mr. Hanlon to get this in short order, to discuss any and all proposals that have been put before the government?

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Thank you, Mr. Speaker.

Yes, I have spoken directly with Mr. Hanlon earlier today. We did raise this particular issue, and he assured me that they are going through a process as quickly as they can, within the NAPE membership, to address the government's request to have additional essential employees assigned and designated and freed up right away. He did give the assurance that they are trying to do that as quickly as they can within their own mechanisms, within their own organization.

Mr. Speaker, the unfortunate thing to report is that we did have a discussion about the possibility of finding common ground, or mutual ground, to end this whole strike immediately, but I have to report, we did not find common ground or resolution at this point.

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

SOME HON. MEMBERS: Hear, hear!

MR. E. BYRNE: Mr. Speaker, I would like to investigate this a little bit further.

The minister talks about, as of today, he talked to the union negotiator. That may be fine from the minister's point of view. The Premier has now told us before the House that he spoke to the President of NAPE and that they have spoken about this issue. Was there any commitment or resolution from government's point of view, you, as the head of the government, and Mr. Hanlon, as head of NAPE, to come to some quick and serious conclusion about how we could best handle this in the public interest? Could you elaborate on that please, Premier?

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

SOME HON. MEMBERS: Hear, hear!

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

I think the Premier addressed the urgent issue that was discussed at the meeting. Both parties agreed that we would not discuss the outcome of the meeting, or the content of the meeting, in an effort to keep the lines open to continue to address this issue and try to resolve it as soon as possible. That is the commitment we both gave to each other and that is the commitment we will keep.

SOME HON. MEMBERS: Hear, hear!

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

MR. E. BYRNE: Premier, did you speak to Tom Hanlon? You said you did this morning about a resolution for public services. Was the minister part - how can you get up and say that we made a commitment not to talk about how we are going to protect the public interest? Get up, stand up as Premier of the Province, and tell us how you are going to protect the public interest and the public safety with respect to the situation we are now in? Could you please answer us?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Premier.


MR. SPEAKER: Order, please!

The hon. the Premier.

PREMIER GRIMES: Thank you, Mr. Speaker.

Maybe the Leader of the Opposition was so anxious to ask his supplementary question before that, that the Minister of Finance asked -

MR. E. BYRNE: My supplementary question was based on your answer. That is how I prepare (inaudible).

MR. SPEAKER: Order, please!

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. the Premier.

PREMIER GRIMES: Thank you, Mr. Speaker.

The point I was to make before being interrupted was this: In the previous question that I did answer, I had already answered the question he asked about Mr. Hanlon and service for today. We discussed the issue. He gave the undertaking in the meeting, as was indicated, that within their own processes they were working as fast and as quickly as they possibly could within NAPE - because they have a group of people who happen to be on strike - to make a determination as to if they could provide additional essential employees and when they could do it, physically, if it could be agreed to within their membership; because they are on strike. They did give the undertaking, generally, that if a circumstance arose, any circumstance, such as this one, where we needed to go beyond the level of essential services that we had agreed to with them prior to the strike, that they would take an action to evaluate it. The request was made yesterday. It was followed up again this morning, and he undertook to have the evaluation done inside NAPE. The Leader of the Opposition can suggest or pretend all he like that the government can unilaterally declare how many employees are actually essential, but he should check the legislation again, Mr. Speaker. We have an agreed to number, and they are trying to find out a new number as quickly as they can.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Baie Verte.

MR. SHELLEY: Thank you, Mr. Speaker.

My questions today are for the Minister of Works, Services and Transportation with respect to the provincial ferry service in this Province. I would like to ask the minister, in that particular agreement you talked about one trip per day but also you have allocated twenty-three people to man the vessels around this Province. I would like to ask the minister: Do you think that twenty-three people is adequate to handle the ferry service for this Province?

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

SOME HON. MEMBERS: Hear, hear!

MR. BARRETT: Thank you, Mr. Speaker.

The agreements that were signed were negotiated between the union and our department, and that there were enough people to put on those ferries to be able to operate them. We did have some problems with the Fogo Island ferry because the people that we had designated as essential refused to operate the ferry.

MR. SPEAKER: A supplementary, the hon. the Member for Baie Verte.

MR. SHELLEY: Mr. Speaker, I guess they did refuse to work. We know that, first of all, the Fogo Island ferry service has been done since Saturday. The minister still has not acted upon it. By the time we allocated people around the Province the Fogo Island ferry needed fifteen people to operate it. You allocated three, minister, I say to you. That is why is it not operating, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SHELLEY: I have been contacting and speaking to people even in the last couple of hours. They are in an emergency meeting right now and the union has asked for the proper number. My question, minister: Didn't you see there was not enough foresight in your department to realize and be able to count the number of ferries in the Province and say: yes, we will provide the proper number of people to operate these vessels?

SOME HON. MEMBERS: Hear, hear!

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

SOME HON. MEMBERS: Hear, hear!

MR. BARRETT: Thank you, Mr. Speaker.

Yes, there were enough employees to operate the ferries. My understanding is that these employees refused to operate this particular ferry. One of the problems with the Fogo Island ferry has not only been the employees but we have had extreme ice conditions in that area. If we did have the employees the ferry may not have been able to operate anyway.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Placentia & St. Mary's.

MR. MANNING: Thank you, Mr. Speaker.

My questions today are also for the Minister of Works, Services and Transportation. In listening to the minister's statement today and earlier questions, we all know that the contingency plans were put in place in regard to the highway depots throughout the Province.

I ask the question today on behalf of a depot in my own district of Placentia & St. Mary's, that is the depot at St. Bride's. For most of the winter now there have been four or five operators working around the clock due to the weather conditions we have had this past winter. My understanding is that there is one essential employee designated. The essential employee lives 35 kilometres from the depot. He had trouble, when the strike started, reaching the depot. We have had major concerns out there in regard to keeping the road clear.

I would like to ask the minister: What thought was given that the designated operator at that depot had total access to the depot and total access to the equipment when the time was needed?

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

SOME HON. MEMBERS: Hear, hear!

MR. BARRETT: Thank you, Mr. Speaker.

It is correct that there is one employee in each depot around the Province, the employees assigned to look after the roads. I want to remind hon. members that the type of snowstorm that we have today and the snowstorm that we had last night, even if we had all of our workforces out last night we would have had some difficulty maintaining the roads and keeping the roads open. We are talking about a major snowstorm right now on the Burin Peninsula, and the Bonavista Peninsula. So even with our regular employees we would have had difficulty trying to keep the roads open last night. With just one employee it is rather difficult. I am not aware there is difficulty with the St. Bride's station.

MR. SPEAKER: A supplementary, the hon. the Member for Placentia & St. Mary's.

MR. MANNING: Thank you, Mr. Speaker.

It is a very serious situation, I would like to advise the minister. At 6:30 this morning an ambulance was called in St. Bride's to go to Branch, a 20 kilometer distance, for a 94 year old lady who has had some medical problems in the past. Up until ten minutes before I came to the House, the ambulance still had not arrived in Branch, due to the situation that we have there.

I would like to ask the minister: What do I tell this family when they call me wondering why we have a situation where that ambulance cannot get to the community of Branch?

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

MR. BARRETT: Mr. Speaker, I am well aware of the situation regarding the ambulance. We are dispensing all the necessary equipment to be able to get at those particular areas and, if necessary, we have hired some private contractors, which we normally do in these kinds of situations to help alleviate the situations. The news I have is that we are working from both ends of that highway trying to open the road and access that particular community so that the ambulance can get to the hospital.

SOME HON. MEMBERS: Hear, hear!

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

MR. HARRIS: Thank you, Mr. Speaker.

My question is the for Premier. This morning the Premier suggested on a public Open Line program - made a proposal that would resolve the dispute by having a one-year agreement at 5 per cent and leaving everything else for later. Will the Premier accept that this is actually a backward step in negotiations, that it would give up the progress that has been made on an agreement for indexing pensions, give up the progress on the unfunded liability? That this will be a backward step, not only for the negotiation for the public sector, but also for the people of this Province who have an interest in having the unfunded liability on the pension plan resolved and catching up with the rest of Canada and no longer being the only place in Canada with an unindexed public service pension?

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Thank you, Mr. Speaker.

I can only take, from the question of the Member for Signal Hill-Quidi Vidi, that he thinks it is more important to continue the strike rather than stop it.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: A supplementary, the hon. the Member for Signal Hill-Quidi Vidi.

MR. HARRIS: Thank you, Mr. Speaker.

Given that the Premier does not seem to understand that that was not going to stop the strike, and it was very clear to everybody in the Province immediately when Mr. Hanlon phoned in. Does the Premier have any other suggestions for stopping the strike or is he hoping that they are going to give up and come back to work under the last offer of the Premier? Does he have any other proposals to make in an effort to try to negotiate a solution to the strike?

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER GRIMES: Thank you, Mr. Speaker.

The negotiations will continue with NAPE and CUPE. I have not been informed, and neither has the President of Treasury Board, that the Member for Signal Hill-Quidi Vidi has now been named their chief negotiator.

SOME HON. MEMBERS: Hear, hear!

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

MR. SULLIVAN: Thank you, Mr. Speaker.

My questions today are for the Minister of Finance. Last fall, before the federal election, the federal government announced that they were going to set up a $1 billion fund to replace outdated and dangerous diagnostic imaging equipment. Now, $500 million of that was to be made available immediately and the remaining $500 million to be made available on April 1 of this year. As the minister well knows, the wait list for diagnostic services are horrendous. One reason for that is the lack of equipment and the fact that equipment we do have is breaking down on a regular basis. I want to ask the minister: Out of that $500 million that was available immediately last fall, how much money did our Province receive from that fund and how was it directed?

SOME HON. MEMBERS: Hear, hear!

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

SOME HON. MEMBERS: Hear, hear!

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

We are very concerned, in fact, about a lot of the diagnostic equipment that we have in our Province. That is one of the reasons why we have contributed into the capital account. You will remember yesterday, in fact, I tabled a warrant for the cost of health equipment that was provided to the Province and through the boards. All totaled, over the last number of years we have probably put in close to $80 million, if you add in the fundraising component put in by the boards as well. So we have done specific allocations for the Health Care Corporation of St. John's, specifically for their equipment. In addition to that, we have done a new allocation for the Janeway - an allocation for their new facility. Over and above that, we have done an allocation that would allow all of the boards across the Province to identify their priorities so that they could use the money allocated for capital to provide the services. I think also, one of the most important pieces of this is that we were quite concerned at one point that many of the boards were using their operating funds to purchase capital equipment and now, because of the allocation -

AN HON. MEMBER: (Inaudible).

MS J.M. AYLWARD: Mr. Speaker, I am answering the question. I am sure they are very interested in the answer, because it is a very important question.


MR. SPEAKER: Order, please!

I ask the minister now to conclude her answer.

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

As a result of that, we created a capital fund for equipment so that they would not require to remove money from their operating budgets for their capital budgets.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

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

MR. SULLIVAN: Thank you, Mr. Speaker.

The minister must be taking skating lessons from the Premier, I would say.

Minister, Health Canada was quoted on March 28 of this year, just a few days ago, as saying that only six Provinces sought access to their share of the medical equipment trust fund. Those provinces are: Ontario, British Columbia, Alberta, Saskatchewan, Manitoba and Prince Edward Island.

I want to ask the minister: Would she confirm that Health Canada is accurate and this Province did not request funding up until March 28, out of this fund that was available since September?

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

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: Mr. Speaker, the reality is that we have contributed more to capital equipment than we have gotten from the federal government.


MR. SPEAKER: Order, please!

The hon. the Minister of Finance.

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

What I will say to the member opposite is that I will get the exact number of the allocation that we have put into capital equipment, because I do not know if -

AN HON. MEMBER: (Inaudible).

MS J.M. AYLWARD: Mr. Speaker, this is important. I am not sure if he is trying to do a political technical issue or if he is truly interested in how much money this Province has put into capital equipment. Is that the real issue?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

A supplementary, the hon. the Opposition House Leader.

MR. SULLIVAN: Thank you, Mr. Speaker.

I am fully well aware of what you put into capital equipment; capital improvements, $82 million. It is in the back-up to the Budget. I know exactly what we are putting into capital equipment. I know exactly what is in the warrant that was tabled here yesterday. I want to ask the minister: Is Health Canada accurate again in saying that this Province is one of the ones - up to March 28, they were quoted - that did not seek access to this medical equipment fund? I want to ask the minister: Did we, yes or no?

SOME HON. MEMBERS: Hear, hear!

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

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: Mr. Speaker, I think the member opposite misses being health critic. That is what I think.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: Mr. Speaker, I have just said that I will provide the information specifically on the amount of money -


MS J.M. AYLWARD: Mr. Speaker, I will provide the information. I am not trying to say I will not do it, but I also will say that we have put more into capital funding for health care over the last three years. He does not want to hear that, because that is not political enough. He only wants to know what we have not done. He does not want to know what we have done. I will be only too happy to provide the information as he requested.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

A supplementary, the hon. the Opposition House Leader.

MR. SULLIVAN: Thank you, Mr. Speaker.

Minister, there is equipment in this Province falling down around our ears. Radiologists have said it is unsafe to use equipment across the entire country. I did not ask you about using money for the operating services, like radiologists have accused using this fund for. I did not ask that. I asked a simple question: Why didn't you request that?

Health Canada reported that you did not apply. If you did not, I am asking you why. You didn't answer that, which means you did not apply. If you did, you would have said yes. Why didn't Newfoundland take advantage of that fund last year, when we were in dire need of diagnostic equipment here in our Province?

SOME HON. MEMBERS: Hear, hear!

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

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: Mr. Speaker, the only point I am trying to make is that we concur in as much as we have created the largest capital account for equipment over the last three or four years. I am not trying to confuse the issue. I am saying that prior to this time, many of our boards were using their operating money to purchase capital equipment. We saw that as a problem both from the operating perspective as well as from the capital, and we provided a capital account for new equipment that is based on the priority needs of all the boards as they send in to us.

I have also said for the third time, and I will make it a fourth time, I will be happy to provide the information for the member opposite.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

Question Period has ended.

Notices of Motion

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

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

I move the following Private Member's Resolution:

WHEREAS Newfoundland and Labrador's fresh water is among its most precious and valuable resources; and

WHEREAS exporting Newfoundland and Labrador's fresh water resources in bulk could have serious deleterious consequences for the Province and the country under the North American Free Trade Agreement; and

WHEREAS Newfoundlanders and Labradorians have consistently made clear they expect to receive maximum benefits from their natural resources in terms of not only royalties and other revenues but also value-added processing, jobs and other spinoffs; and

WHEREAS there has been considerable public debate in Newfoundland and Labrador on bulk water export, and the public have spoken loudly and clearly in that debate of their determination to protect our Province's fresh water resources; and

WHEREAS this hon. House in 1999 debated and, on December 14, 1999, unanimously passed into law An Act To Provide For The Conservation, Protection, Wise Use And Management Of The Water Resources Of The Province to ban the bulk export of fresh water from Newfoundland and Labrador;

THEREFORE BE IT RESOLVED that this hon. House honour the commitment that was made when An Act To Provide For The Conservation, Protection, Wise Use And Management Of The Water Resources Of The Province was passed in this House by maintaining the ban on bulk water export from Newfoundland and Labrador.

Orders of the Day

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

MR. LUSH: Order 2, Mr. Speaker.

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

Committee of the Whole

CHAIR (Mercer): Discussion on the Consolidated Fund Services.

The hon. the Opposition House Leader.

MR. SULLIVAN: Thank you, Mr. Chairman.

I have some questions to the minister with respect to the Consolidated Fund Services, overall with, I guess, servicing of the public debt. Some of these, I think, are pretty straightforward. I will move quickly through the ones that I think are straightforward.

Temporary Borrowings there: I guess it is looking at our expenses on temporary borrowings. That is a pretty routine item there. We budgeted $150,000 and spent $500,000. I guess that just means that our temporary borrowing was more than we anticipated.

MS J.M. AYLWARD: Can you wait one second, I can't hear you.

MR. SULLIVAN: Sure. Now, that is something I never heard from you before. You are always telling me to tone it down. Well, I will raise the volume again, I say to the minister.

SOME HON. MEMBERS: Hear, hear!

MR. SULLIVAN: Something new happens every single day.

MS J.M. AYLWARD: I can hear you fine now.

MR. SULLIVAN: Good! Good! Do you want me to tone it down now?

MS J.M. AYLWARD: I will take it out.


MR. SHELLEY: Somewhere in between.

MR. SULLIVAN: Now that the minister has her hearing adjusted properly -

AN HON. MEMBER: She had to turn the volume down again.

AN HON. MEMBER: It was too loud to hear.

AN HON. MEMBER: Do you hear that, Loyola? She said, I can't hear him yet.

MR. SULLIVAN: Don't worry! I will raise it. I don't want to get hoarse yet, I might have to speak for a couple of hours on the Budget later on.

AN HON. MEMBER: He is saving himself.

MR. SULLIVAN: I want to save the good questions for then, yes.

MR. J. BYRNE: Lloyd, you would have applied for the money, wouldn't you? You would have applied for it, guaranteed.

MR. SULLIVAN: I don't know. Listen here, he was the finance minister when it came out. Were you not the finance minister then? Shame on both of you. When this $500 million became available last fall, our share of that fund.

AN HON. MEMBER: Five hundred million and he didn't even ask for a cent.

MR. SULLIVAN: Shame on him! He has enough money, I figure, he doesn't need $500,000.

Temporary Borrowings: The minister doesn't have to answer if she is in agreement. I will just run through it. That is just basically the cost on our short-term borrowings, temporary borrowings. That can vary, I guess, from time to time.

MS J.M. AYLWARD: Where are you?

MR. SULLIVAN: Servicing of the Public Debt, page 5, 1.1.01., Debt Expenses, first page, I guess.


MR. SULLIVAN: Interest-Statutory, right.

So that is just, basically, if we budgeted $150,000 and spent $500,000, it just means that our temporary borrowings were a little bit higher than anticipated. I would assume that is it. Maybe when certain payments were required to be made, to keep our cash flows, we might have had to do temporary borrowings earlier than planned or borrow more. I mean, that is not a huge item in terms of what we are looking at here under the fund. So, when the minister gets up, if there is something extraordinary, she can comment on it.

Treasury Bills: That is pretty well in line. That is interest expense on Treasury bill borrowings. That is a pretty standard thing. I don't have any direct questions there. Now, if there is anything extraordinary in the items that happened, like a one-time thing, that I don't anticipate here, the minister might want to comment.

Debentures: Once again, it is pretty well on. We know what our debt is out there. We know what is being paid. Now, Paid to the Newfoundland Sinking Fund: That is just basically, I guess, on each of our borrowings. I would assume paid to a sinking fund is our expenditure that goes into a sinking fund to assist in debt redemption when it comes due. That is that figure there. Is there a set percentage now that you normally put aside? If you are going to borrow on the market $100 million over, let us say, a twenty-year period, how much would you normally contribute into the sinking fund in that instance? Could you give me some ballpark figure on what are the traditional, historic amounts?

CHAIR: The hon. the Minister of Finance.

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

Generally, obviously, it would depend on the interest rate when you buy. It will depend on the term that you buy, if it is ten years, twenty years, thirty years, depending on how long it takes to amortize it. It would depend, of course, if it was a loan or if it was a debenture of sorts, because we also do loans as you know.

MR. SULLIVAN: Yes, this is a debenture, this one.

MS J.M. AYLWARD: Yes. Some of our Triple A, I guess, partners in the European market particularly, you know, often will borrow money at their Triple A rate and they will lend the money to us at a better rate than we can borrow from the markets ourselves. They still make a slight profit, but we get a better rate in the market. Sometimes we do it over a period of time. It is hard to say what the percentage is because it depends on the length of time, the interest rates, and if it is a loan or if it is strictly through the banks.


MS J.M. AYLWARD: It could be from a private agency as through the banks.

CHAIR: The hon. the Member for Ferryland.

MR. SULLIVAN: No. The point I was making is: putting it to the sinking fund, what percentage, if there is a twenty-year borrowing there, might you try to put toward the sinking fund? How much of the debt would you try to cover in the sinking fund, to contribute? You contribute so many million this year and next year, in each of the years there. What percent of the total debt would you normally contribute to such a particular fund? A ballpark? I just want to have an idea how much, when that redemption comes due, might be offset by contributions to the sinking fund.

CHAIR: The hon. the Minister of Finance.

MS J.M. AYLWARD: Thank you.

Again, I will get back to you on the actual percentage of what we pay down, because my understanding is that it depends on whether it is short term or long term. For example, there is one here where we had $125 million that we borrowed; we pay it down. The amount of the redemption is $13 million and we know that, for example, even though we amortize it over twenty years we have an option to get out of it within the last eighteen months, generally. Sometimes what we will do with our percentage is that we will buy it out, because we bought it at a higher percentage at the time. Some of these are twenty-year sinking funds. I will tell you the exact percentage, but I don't want to ballpark it. I know it varies. I know that.

MR. HARRIS: A point of order, Mr. Chair.

CHAIR: On a point of order, the hon. the Member for Signal Hill-Quidi Vidi.

MR. HARRIS: Perhaps I could refer the minister and the hon. member to page 250 of the Estimates which has a list of funds -

MS J.M. AYLWARD: Yes, we have those.

MR. HARRIS: - some of which have sinking funds, some of which don't.

MS J.M. AYLWARD: Exactly.

MR. HARRIS: Perhaps the minister can explain the difference.

CHAIR: The hon. the Opposition House Leader.

MR. SULLIVAN: Yes, I wasn't going to ask that because I know the answer to that one. I was only asking the ones that I don't know the answer to. Because some of the ones like Canada Pension, I think, you would not see a fund - I think I do remember - on the Canada Pension borrowings and so on. That wasn't the point. I was getting at the point. How much do we allow in the basic sinking fund? The minister said she will get back on that specifically there.

I think if you redeem it earlier, I guess the minister is saying, if your figure now the rate could be down, if we redeem it now, within that period, we can go out now and borrow when the rate is down and that would be to our advantage, in other words. Is that what the minister meant by that?

MS J.M. AYLWARD: Only in the debentures where we have reached close to the last eighteen months to a year. If we do it before that, there is a penalty; but we do have an option. For example, we had one that comes to mind where we borrowed the interest rate at 12 f per cent. We purchased it in 1983. Next year we will have an option to buy out of that and then we can refinance it at, say, what the going rate is now, 6.5 per cent. We would do that based on that figure.

CHAIR: The hon. the Opposition House Leader.

MR. SULLIVAN: That is right. Obviously, it is only appropriate, if you are within the period you can do it without penalty. If you can go out and borrow then at a lower rate you are going to do that. Even if you got to a point where the penalty would be less than what it costs to borrow, it would still be to your advantage to pay a little penalty if you are in that particular period too. It is just a matter of, if borrowing is cheap.

MS J.M. AYLWARD: It is a big penalty.

MR. SULLIVAN: Yes, but if you go out before that. I guess the similar base is like anything; when someone goes out and invests into certain mutual funds and people have paid up front or it is an end-loaded type, after so many years it keeps declining and after a period of time it doesn't cost anything to take it out. There is always, in the market, a similar situation. Whenever it is advantageous to roll something and get a lower rate, I guess they are always looking at that.

The Canada Pension Plan is pretty consistent. Temporary Investments. On page 6, 1.1.06., Recoveries On Loan And Advances, "Appropriations provide for interest paid to the Province on loans to various public and private entities, as well as interest collected on loans by the Province's various lending agencies." In other words, that is recoveries on loans and advances. That is not including - no, that is not fees; that would be under a different issue like guaranteed debt. That is a different area, I would assume.

In what public and private entities are we getting recoveries? What are a couple of the main ones, the bigger items in this particular category, that there might be recovery of loans under? Because this is a revenue, a reduction really of a debt, or really a revenue.

CHAIR: The hon. the Minister of Finance.

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

The biggest single collection piece of this is ENL. I might add, too, that the reason the number is down is because a lot of the loans are actually being paid off and that is why our revenue has decreased. You can see that, where it has gone down, and that is the rationale for that. Some of our loans are actually paid off.

CHAIR: The hon. the Opposition House Leader.

MR. SULLIVAN: Sure. I guess we are at the point where a lot of loans have been around for some time, as I am fairly familiar with, that loans end up getting written off in the process, too. They are the ones you are collecting, getting revenues toward.


MR. SULLIVAN: Under 1.1.07. Newfoundland Government Sinking Fund earnings in excess of what is required to redeem debts, like last year, 02. Revenue - Provincial, is budgeted to be $116,004,000 but it is $36,104,000, it shows provincial revenue $184,769,000. Okay, it is straightforward there. I am familiar with that.

In 1.2.01. Recoveries on Loans, Advances and Investments: Appropriations provide for principal recovery from various loans, advances and investments, 02. Revenue - Provincial, budgeted $13,240,300 and it ended up being $1,595,100.

MS J.M. AYLWARD: I am sorry, where are you?

MR. SULLIVAN: In 1.2.01. on page 6.

MS J.M. AYLWARD: Okay, you moved over.

MR. SULLIVAN: There is a significant difference there, from $13 million down to $1.6 million. Under it shows Recoveries on Loans, Advances and Investments. Why was there a large difference?

CHAIR: The hon. the Minister of Finance.

MS J.M. AYLWARD: This is in relation to, I think it was about ten years ago, the Province made a loan to the Corner Brook Pulp and Paper Mill and that matures in 2002. That is why you are seeing the difference.

CHAIR: The hon. the Opposition House Leader.

MR. SULLIVAN: The next item, 1.3.01. Various Facilities: Appropriations provide for payments into sinking funds established for the purchase of various leased facilities at the expiration of the respective lease terms.

What type of lease facilities primarily? What are some of the major ones in this category?

CHAIR: The hon. the Minister of Finance.

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

These refer to hospitals.

MR. SULLIVAN: Hospitals, okay.

CHAIR: The hon. the Opposition House Leader.

MR. SULLIVAN: Thank you, Mr. Chair.

Are we just talking about the three Trans City ones?

MS J.M. AYLWARD: As a matter of fact, we are.

MR. SULLIVAN: We are. That is what I thought. Just those only, is it?

MS J.M. AYLWARD: Yes, the three.

MR. SULLIVAN: Okay, because the other facilities have been purchased -

MS J.M. AYLWARD: Long term.

MR. SULLIVAN: - and amortized over a specific period, I think, the Grace and St. Clare's Hospital, and the amortization -

MS J.M. AYLWARD: That is right. They have actually done the borrowings over there.

MR. SULLIVAN: I beg your pardon?

MS J.M. AYLWARD: They have done the borrowings themselves and we have guaranteed them over there.

MR. SULLIVAN: Yes, that is right. The Health Care Corporation did the borrowing. I think the Grace was a five-year lease period and St. Clare's was a fifteen or twenty-year lease period under St. Clare's Hospital.

Under 1.4.01. Guarantee Fees - Non-Statutory: Appropriations provide for fees charged to private companies and certain Crown Corporations which have debt guaranteed by the Province.

Well, it is showing there 02. Revenue - Provincial, $19,092,000 budgeted, $11,073,900 collected and $19,345,800 so debt for Crown Corporations, I would assume we are looking at a 1 per cent fee for guaranteeing the debt for Newfoundland and Labrador Hydro, which probably would put us in, I guess, the $10 million or $11 million range on that item alone. Would that be correct?

MS J.M. AYLWARD: Eight million, I think it is.

MR. SULLIVAN: Eight million in this upcoming year?


MR. SULLIVAN: So, that is basically at about $800 million of borrowings that is on, is it?

MS J.M. AYLWARD: That is right.

MR. SULLIVAN: That is 1 per cent still, I understand, the fee?

MS J.M. AYLWARD: The fee is 1 per cent, yes.

MR. SULLIVAN: So, $8 million of that would be Newfoundland and Labrador Hydro. In the upcoming year we are looking at $19 million. Because they have overlapping fiscal years with us, are we collecting extra this year under that fee guarantee? Are we going to collect a year and three-quarters in one? Is that why that is up there?

MS J.M. AYLWARD: There are two pieces to this. One is our regular 1 per cent charge, as you know, that we put in for the cost of borrowing the guarantee. The other one is a special one. I think it is about an $8.3 million special arrangement which is part of what the government has pushed forward into the out years and has not actually used.

MR. SULLIVAN: Okay. In other words, last year - the dividend thing is one thing; we have guaranteed the debt now. In other words, government had this built into - it is more like a carry-over item that they did not utilize, that was there to be taken, but now it is being budgeted to be taken this year as a fee. We did not really collect that portion from last year.

Hydro's fiscal year ends at the end of December and our fiscal year ends March 31, so if you looked at this year, 2001, that is this year now, Hydro has a full fiscal year right there. If we got 1 per cent there, for instance, $8 million there, then from January next year to March, it is in a new fiscal year for Hydro and we are still in our fiscal year. Technically you could collect up front, as happened in the 1990s when this came in first, around 1996 or 1997, I think, they collected really a year and three-quarters. Hydro made two contributions, basically, in the one year.

From what the minister said, I gather one of two things: we are budgeting to collect on next year's from January to April from them, or we are collecting on what we really did not take from last year. Which one of the two applies to this case? Is the minister clear on what I am saying?

CHAIR: The hon. the Minister of Finance.

MS J.M. AYLWARD: What we have done here is, we have actually budgeted the amount within our fiscal year that we are able to take. Again, it is a combination of the regular fee plus a special fee. It is our portion within our fiscal year. It is not based on Hydro's fiscal year. We would allocate the amount that would be applicable within our fiscal year.

CHAIR: The hon. the Opposition House Leader.

MR. SULLIVAN: Thank you, Mr. Chair.

Issues Under Guarantee: Appropriations provide for payments and revenues relative to honouring loan guarantees extended by the Province to certain private companies.

You had budgeted $500,00, and $1,550,000 was paid out. The government paid out over $1 million more in Loans, Advances and Investments, costs to private companies. What private companies would they have those loans to that cost...? Did they have -

MS J.M. AYLWARD: You are on 1.4.02?

MR. SULLIVAN: Yes, I am.

Did banks call in debts on any companies that we had to honor? Would the minister answer that?

CHAIR: The hon. the Minister of Finance.

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

There was the IPL (inaudible), as you know.


MS J.M. AYLWARD: Newfoundland Farm Products.


MS J.M. AYLWARD: There was also one defaulted fisheries loan guarantee. I will not mention the individual, but there was an individual fisheries loan guarantee that defaulted.


MS J.M. AYLWARD: That was at about $500,000.

That is basically the composition of what you are talking about.

MR. SULLIVAN: To my knowledge, while we are on that, I think we are only guaranteeing loans to only one or two fish companies in the entire Province, I think. That is in the public record anyway, and there is a bill here in the House.

MS J.M. AYLWARD: Yes, exactly.

MR. SULLIVAN: I think it is only the Torngat Fish Producers and Fogo Island Co-op. There has been a bill here in the House. It is nothing of a personal nature in those there, but rather than mention a private individual's name, I do not expect that to be stated here.

I just want to skip along a little bit there. I am sure my colleagues might want to ask questions on some of these items.

Under 2.1.02. Ex-Gratia and other Payments - Non-Statutory, on page 9, it says, "Appropriations provide for special retirement and other payments as approved by Treasury Board. As required, funding will be transferred to Departments during the year".

I am wondering how much of the $12.4 million last year - I understand the NCERP, the Northern Cod Early Retirement Program, our Province is on a 70/30 basis. We put money into that fund and the different POWA, some of the older workers programs and all of these, would the minister be able to give me a rough breakdown, or give me the three or four main contributors that we are putting into still?

Under the Northern Cod Program, that is going to gradually keep decreasing every year now because people are getting to ages sixty-five and every year that is going to be lessened, I guess, as with any program, because the contributions, I think, are only up to the age of sixty-five. A lot of these were enacted when people were fifty-five. You had to be fifty-five at the time, in 1992, under NCARP and NCERP, the following program. That was nine years ago. Anybody who was fifty, fifty-six or fifty-seven, even under NCERP they would have been in their late fifties now and would be out of this program. What is the total payout in this upcoming fiscal year under the three or four main ones there?

CHAIR: The hon. the Minister of Finance.

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

Five hundred and seventy-four thousand in ex-gratia payments. The Hartt Report, which you know is -

MR. SULLIVAN: For which one?

MS J.M. AYLWARD: These are ex-gratia payments, that are the separate plans.

The Hartt Report, which you know is a result of the pension arbitration award at the Waterford a number of years ago; $1.4 million. Widow's component; $282,000. A widow's component associated with pensioners. WCC, Workers' Compensation, associated cost of $26,000. Redundancies included in at $2.1 million, and a severance of $7.8 million, for a total of $12.2 million.

MR. SULLIVAN: Our share of the NCERP is under this is it, Northern Cod Early Retirement Program?

MS J.M. AYLWARD: I do not have that here.

MR. SULLIVAN: Our 30 per cent? Because that breakdown adds up to $12 million. That must be in another item is it?

MS J.M. AYLWARD: The only ones that I have here, Mr. Chair, are the ones that I have spoken to in terms of the revised. As you know, they are lower by virtue of attrition. You know that people die and the results are lesser awards.

MR. SULLIVAN: Sure, and when they reach the age too, of course, where they receive old age pension they drop from some of those retirement programs.

MS J.M. AYLWARD: Yes, they switch over. The only plans I have in terms of the pension awards are the ones that I have listed there: the redundancy; the ex-gratia payments under the Hartt; the benefits for widows of deceased pensioners who have no other survivor benefits, as I have pointed out; the injury on duty awards, which are the workers' compensation; and in addition, any other special awards that would come under this package.

MR. SULLIVAN: Would the minister be able to check and see what is still left under NCERP - Northern Cod Early Retirement Program - our 30 per cent share, how much we are still paying out? What is that down to, maybe the number of people we are still contributing to? Could she give us an idea of how fast this -

MS J.M. AYLWARD: What is it called again?

MR. SULLIVAN: It is called Northern Cod Early Retirement Program, NCERP. That was the second retirement program that came out. It was NCARP and then they called it - NCERP was under TAGS, I think.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: No, NCARP was the total program. NCERP was the retirement part of that program. Then there was a TAGS program which followed in 1994-1995. NCARP covered July, 1992 to May 15, 1994; I think are the figures. From May 15 on, of 1994, there was this other retirement. If you could just find out what our contribution to that program still is there?


MR. SULLIVAN: I will just finish off this one I am on now under Pensions, and then I am sure my colleagues will have a few questions.

Railway Pensions; we are familiar with that. That is basically a continuation thing from the previous years. That is diminishing with each year, I guess, as people - that will be phased out over a period of time.

Special And Other Acts: "...form part of the Pensions Funding Act." For example, 2.1.04, that is probably a similar one - are there any other special ones or - it is just a continuation of ones that have always been there, I would assume. What are some of those that might be the sources of these?

CHAIR: The hon. the Minister of Finance.

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

It is a continuation of the existing programs. The two that I am familiar with are the Gander Airport employees and the Newfoundland Broadcasting Company. They are two of the ones that were carried over under this special plan. I think they are the two that I am aware of under 2.1.04. There are a couple of others actually. There is the Memorial University transferred employees as well. These are the three groups that we have covered. No new groups.

MR. SULLIVAN: Over the next number of years, several years, within the next decade that will probably be gone will it, I would assume?

MS J.M. AYLWARD: We would hate to think that, I suppose on one hand, because they are generally through attrition.

MR. SULLIVAN: Yes, unless there are new special cases or special things that have to be put in.

Government of Canada Pensions: "Appropriation provide for payments to cover the Provinces's pension liability associated with former employees of the Province who transferred to the Federal Government in 1949."

MS J.M. AYLWARD: That speaks specifically to that only.

MR. SULLIVAN: Yes. Okay, sure.

My colleague now might have a few questions on this.

CHAIR: The hon. the Member for Waterford Valley.

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

In the Report of the Auditor General to the House of Assembly for the year ending March 31, 2000, the Auditor General made some general reference as to the fact that many agencies of the Crown do not file reports and do not have them tabled in the House of Assembly. As a matter of fact, she said: There were approximately 154 agencies of the Crown as of March 31, 2000. Of these, eighty-four were required to prepare annual financial statements while seventy were considered non-financial, and did not prepare financial statements at all.

She makes a point that many of these agencies of the Crown did not file audited statements with the Auditor General and did not have them tabled here in the House. It comes under the section called: Monitoring Agencies of the Crown. There is a general perception that if Crown agencies received public monies that they should also be responsible for sharing with the public how that money is expended. As a general principle, that sounds very sensible and logical. Yet, each year the Auditor General makes a point that these Crown agencies very seldom, in fact, almost all of them, do not file financial statements that are tabled in the House of Assembly. I am wondering what steps the minister is taking to make Crown agencies, who take public funds, more responsive to the House and therefore, directly to the people of the Province?

MS J.M. AYLWARD: I ask specifically which ones you are referring to? If I may, of the colleague questioning there now?

MR. H. HODDER: I am referring in particular to the general statements made by the Auditor General. I am not sure if the minister would have her statements there or not -

MS J.M. AYLWARD: What section are you talking about there?

MR. H. HODDER: Pardon?

MS J.M. AYLWARD: What section are you talking about under the Consolidated Fund Services specifically?

MR. H. HODDER: No, this is not coming under Consolidated Fund Services as such. It is called a general statement. It is within your responsibility that the Auditor General talks about monitoring the expenditures of Crown agencies.

In the Budget Speech the minister made some comments as to making sure that there was a greater degree of transparency. That was the general tenor of the Budget Speech, and also in the Speech from the Throne. Yet, it is a case where the Auditor General makes note of the fact that not very many Crown agencies ever go and table their reports with the House of Assembly. I am wondering if the minister has discussed that with her department to make sure that Crown agencies that take money end up actually filing documents here in the House as part of the public record?

CHAIR: The hon. the Minister of Finance.

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

The department works very closely with the Auditor General. In fact, in all of the statements that are here, most of what I speak to are statutory amounts and are not even anything that is negotiated or agreed upon. They are statutory, that we really need in order to pay our debt. Certainly, we will talk to my staff about trying to address any and all of the issues put forward by the Auditor General. Some of which we are working on, and some of which we have actually addressed. I say to the member opposite: yes, we will do out utmost to try to address any outstanding issues within our ability.

CHAIR: The hon. the Member for Waterford Valley.

MR. H. HODDER: On page 17 of the Auditor General's report she again makes note of some of the groups who have not filed their financial documents with the Auditor General. "Section 14 of the Auditor General Act requires the auditor of an agency of the Crown or a Crown controlled corporation to deliver to the Auditor General, after completion of the audit, a copy of the auditor's report, audited financial statements and recommendations to management." She notes: "As at 1 December 2000, the required information had not been received from the private sector auditors for 5 of the 53 entities"- who were supposed to have filed them.

I make note of the fact that the Auditor General notes that the Health Labrador Corporation; the Newfoundland and Labrador Centre for Health Information; Newfoundland Ocean Enterprises Limited; Operation ONLINE Inc.; and the Pentecostal Assemblies - Clarkes Beach Seniors' Home; none of these five had filed their financial statements with the Auditor General as of December 1, 2000.

She makes a point that: "To date, information is not being received from the private sector auditors on a timely basis." Mr. Chair, this is not to say that by this time these particular entities have not filed their audited statements with the Auditor General. However, if we are going to manage the funds of the Province adequately it is very important that all agencies that accept public funds be able to go and make sure that when they do their audits that these audits are, indeed, filed with the Auditor General. I do not want to say, at this time, that the five which I have named have not filed their audited statements. It is just they had not filed them on a timely basis. It is somewhat incumbent upon the Minister of Finance to make sure that when public agencies, Crown agencies, take pubic money that they file their audited statements on a timely basis.

I wanted to note as well, again from the Auditor General's Report on page 47, that she makes note on the issue of warrants. The Auditor General says that special warrants are causing some great confusion, or great concern, to the Auditor General. For example, it says: "Through the use of a "special warrant", government can, without the prior approval of the Members of the House of Assembly, spend public money." As I have mentioned here many times: "Section 28 of the Financial Administration Act outlines two instances where a special warrant can be approved and additional funding can be provided to Government."

I note, for the benefit of all members, that the idea of having a special warrant is provided for in Legislation. However, there are two features that should be present. It says: "Where the sum appropriated by the Legislature for continuing service is insufficient to meet requirements and there are no countervailing savings available, and the necessity is urgent." In Section 28(2) of the Financial Administration Act it says (a) there cannot be any budgetary allocations already in place; and (b) that there is an urgent need and that the service is necessary as a continuing service.

In Section 28(3) it says: "Where the Legislature is not in session or when the House of Assembly has been adjourned for more than 30 days, and an expenditure not foreseen and not provided for by the Legislature for a new service is urgently and immediately required for the public good." In other words: "The minister having charge of the new service must be of the opinion that the necessity is urgent and if not made, grave damage to the interests of the Crown or the public will result."

What I am saying is that the issue of special warrants is not something that is outside the law. However, the Auditor General has made a point of saying that some of the special warrants that have been issued certainly did not meet the requirements. In other words, they were not urgent. Secondly, the House of Assembly was in session and the minister of the appropriate department, or the Minister of Finance, had the responsibility to come to the House and seek permission for a further allocation under a bill, a motion of the government, that the minister would sponsor in the House. That is why the House of Assembly is open. When you require an initial sum of money that the Financial Administration Act makes it incumbent upon the minister or the government, through any particular minister, maybe particularly the minister of the department involved or maybe through the Minister of Finance, that there would be a bill sponsored in the House seeking additional funds. However, the Financial Administration Act is very specific. It says that when you do make an expenditure, that you have to report to the House within fifteen days of the opening of the next ensuing session of the House of Assembly. Of course, she makes a point that this particular revision was not adhered to by the government.

Last year the government issued great sums of money but, in fact, in the year 2000 there were seven Special Warrants issued for a total of $70,838,500. The Auditor General indicates that the issues of necessity, the issues of urgency in other words, and also the fact that the minister should have gone to the House directly - in other words, the Auditor General is saying that the Financial Administration Act was not complied with, in her opinion, by the government as to the handling of special warrants.

Mr. Chair, we would note that this government has a significant history of using special warrants. In 1993, they issued seven special warrants for $2,500,000. In 1994, there were two special warrants in that year but there was $3,500,000. Then, as we go down through on page 48 of the Auditor General's report, it mentions year by year that this has increased significantly.

The Auditor General has great concerns, and I had expected the minister who is responsible, the Minister of Finance, to be anxious to stand in her place and to say what they are doing to try to address the concerns of the Auditor General.

The Auditor General makes note that last year - I mentioned the fact, and there is a table there which outlines the amount of money that was put forward last year. For example, on March 10, 2000, the Education Department gave a grant to Memorial University of Newfoundland and Labrador for the university's Opportunity Fund for $3 million.

CHAIR: Order, please!

The hon. member's time is up.

MR. H. HODDER: With leave, Mr. Chair?

CHAIR: Does the hon. member have leave?


CHAIR: By leave.

MR. H. HODDER: Thank you very much, Mr. Chair.

MR. HARRIS: On a point of order, Mr. Chair.

CHAIR: The hon. the Member for Signal Hill-Quidi Vidi, on a point of order.

MR. HARRIS: I am being told that the time might be up on this issue, so I don't know. There have only been two speakers on Consolidated Funds, and I would like to speak on the issue, so if we can manage to have - I do not mind giving him leave, but I would like to be sure to have an opportunity to ask some questions on Consolidated Funds.

CHAIR: The Member for Waterford Valley is speaking on leave at this time.

The hon. the Government House Leader, to the point of order.

MR. LUSH: Mr. Chair, to the point of order, if the hon. member does not take up too much time by leave speaking now, the time is up but we will grant the hon. Member for Signal-Hill-Quidi Vidi, by leave, time as well.

CHAIR: The hon. the Member for Waterford Valley.

MR. H. HODDER: Mr. Chair, I will conclude if you would like. I certainly do not want to have a situation arise where the time runs out and my colleague, the Member for Signal Hill-Quidi Vidi, does not have a chance to speak.

My point is that I am bringing to the attention of the House again, a whole issue of special warrants and the comments of the Auditor General, because it is very important that we run our affairs according to the laws of the Province. Certainly the concerns of the Auditor General relative to special warrants requires us on this side of the House to continue to mention it as long as she has concerns, and we will continue to bring these issues forward to the House, with the hope that Madam Minister either makes sure that the matters of urgency are met and that the appropriate minister puts forward a case to the Cabinet, and also that we do not use special warrants merely to distort the real financial situation of the Province so that it looks better than it actually is.

Thank you very much, Mr. Chair.

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

MR. HARRIS: Thank you, Mr. Chair.

I am pleased to have the opportunity to ask a few questions on the Consolidated Fund Services, but I want to congratulate the previous speaker. He has finally succeeded in doing what we have been warning him of, for a number of years in this House. Not a member of this House, but certain spectators have managed to fall asleep during the speaker's comments.

MR. H. HODDER: That is not very nice. I just gave him a chance to speak, and he insults me like that. (Inaudible).

MR. HARRIS: I hope the previous speaker does not feel too insulted. He was speaking with the leave of the House.

Perhaps I could ask the minister to answer a few questions. I was interested in the issue of sinking funds as well. Looking at page 250 of the Estimates document, there seems to be quite a few funds that do not have - it is not page 250; it is page 260. There seems to be quite a few borrowings that have no sinking funds at all. I notice there are a number for $150 million. I added up. For the year previous, it was about $1 billion worth of bonds, some short term, some longer term, that did not have any sinking funds. I wonder if the minister can explain why it is that some of the bonds have sinking funds attached to them but some of them have none.

I am looking here at ten years bonds, for example, expiring in the year 2009; $200 million at 6.7 per cent with no sinking fund. Another one, ten year bonds expiring 2008; $250 billion with no sinking fund. Is there some reason why there are no sinking funds for these particular amounts? When I added them up earlier, I get up to around $1 billion with no sinking funds. Is there an explanation for that? Perhaps the minister can let us know.

CHAIR: The hon. the Minister of Finance.

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

There are two pieces to it. Some of them are clearly loans and the others are obvious, as the member pointed out, there are no payment provisions through the sinking funds. What we have been doing actually is putting them into revenue and in some cases, with others, we just rolled them over at the end of the maturity of the sinking funds. So we do not make provision across from every line to make a payment. You can see that from here. We pay down a number of them; the rest of them we actually put into our revenue, and that has all been vetted through the Auditor General.

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

MR. HARRIS: Thank you, Mr. Chair.

Also, I notice that, in looking at the amount of sinking funds that are set aside for the public sector debt, which is in Exhibit V, there appears to be about 20 per cent of the total Crown Corporation and Other Debt as well as Provincial Direct Debt that is in sinking funds. Is this, in fact, a ratio that has been suggested we maintain? It appears to be fairly consistent over a number of years of 19 per cent, 20 per cent, 18.5 per cent. Is that the ratio that the government strives to maintain in terms of sinking funds? It would take a bit of calculation to figure out. We see the sinking funds there lowering and rising from year to year, but the ratio of sinking funds to a total public sector debt appears to be consistent. Is there a benchmark of around 20 per cent for sinking funds, or does that just happen to be a coincidence based on government policy or requirements of various funds?

CHAIR: The hon. the Minister of Finance.

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

Again, I guess it is a similar way of a previous question that, no, we don't have any set amount with respect to that percentage that you probably calculated out.

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

MR. HARRIS: Thank you, Mr. Chair.

Some years ago, of course, it was a matter of great criticism of the public finance of the Province that significant public debt was incurred and there were, in fact, no sinking funds at all. Is the minister suggesting that this is just a coincidence, or do particular borrowers require a sinking fund as part of the bond agreements? Would certain lenders say: We will lend you this money on long-term borrowing, but we would require you to set up a sinking fund. Or, is it just a matter of general government policy to try to ease the public sector debt along the way?

CHAIR: The hon. the Minister of Finance.

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

Any borrowing that requires a sinking fund has one. As you know, all of this money is guaranteed by the Province anyway, so wherever we are required to have a sinking fund we do; but, as I pointed out, not every borrowing has a sinking fund associated with it. You can see that from the line.

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

MR. HARRIS: Yes, Mr. Chair, I understand that there are certain sinking funds - I think they are referred to as voluntary sinking funds. What is the rationale for having voluntary sinking funds in certain cases and not in others?

CHAIR: The hon. the Minister of Finance.


MS J.M. AYLWARD: What we have done, and you can see that from our budget process particularly, is that we have pushed forward a lot of our sinking funds from year to year. Not all of our borrowings required sinking funds, and we have been using them as revenue.

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

MR. HARRIS: Thank you, Mr. Chair.

Perhaps I will move on to pensions. Line 2.1.01. of the Budget refers to Contributions to the Pension Fund. It makes reference there to matching contributions and other payments under the pension plans. Does that include the amount that government is contributing to lower the unfunded liability of the pension fund, or is that somewhere else in the Budget?

CHAIR: The hon. the Minister of Finance.

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

This includes the matching contributions piece only for the PSPP, teachers and uniformed services, the matching contributions only.

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

MR. HARRIS: Thank you, Mr. Chair.

I wonder if perhaps the minister could show us where, either in this section of the Budget or elsewhere, the additional contributions to assist the unfunded liability would be? Perhaps, while she is on her feet, what approximately is the amount of money actually in pension funds under the control of the government? We have the Public Service Pension Plan, the Teachers' Pension Plan, and others. Is there a statement in the Budget, or other information, as to the amount of capital that resides in these pension plans that are there? Obviously, when we are talking about public debt we get conversations about the unfunded liability of the pension funds. On the other hand, the significant amount of capital in these funds should be regarded as a government asset somewhere along the way as well. I don't see, certainly in the Consolidated Fund Services, any indication of the amount of money in the government controlled pension funds. I know there is an annual report presented to the House on it, but is there some indication that the minister can have, from the documents here, as to what the amounts are?

CHAIR: The hon. the Minister of Finance.

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

The actual amounts extra that we are contributing - as you know, we are contributing an extra $40 million a year for the PSPP and $76 million a year for the teachers's pension plan. That is over and above the matched contributions that we make. The total amount in the plan, I think the unfunded liability is currently at about 50.3 per cent. I think the total debt load of the plan, or the total amount of the plan - I am just looking through the Budget here to see if I can locate where that is. If I cannot, I will get back to you on that.

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

MR. HARRIS: So $40 million for the Public Service Pension Plan and $76 million for the teacher's pension plan? That does not appear in Consolidated Fund Services, does it? Where would that be? Would that be appropriated in the education department for the teacher's fund and somewhere else for the public service pension?

MS J.M. AYLWARD: No, I do not think so. I am just trying to find it in my figures here. It has not gone through the various departments because the Consolidated Fund Services section handles the pension plans of the Province, as you know. So it would have to come through here. As I just said to you, I am looking to find the exact line or the note that would do it. If I cannot find it during this period, I will let you know.

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

MR. HARRIS: Thank you, Mr. Chair.

I could not find it either that is why I asked the minister. Perhaps the minister could obtain that information and see where it comes from because, obviously, if it is an annual contribution it does have to be voted by the House. Presumably it is either here or -

MS J.M. AYLWARD: I would say to the member opposite that the actual management of the Public Service Pension Plan is certainly something that is done by government. We have recently, as you pointed out in your commentary in Question Period, we have made significant strides in this potential collective agreement because we are looking to move towards joint trusteeship of the pension plan. Also, right now in place, we have a Pension Advisory Committee which is comprised of all of the union leaders as it relates to each of their plans. This information is available in terms of the unfunded liability, the acid mix of the plan, the contributions, and the actual capital as it relates to the pension plan.

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

MR. HARRIS: Thank you, Mr .Chair.

I recognize, Madam Minister, that significant progress, at least on a tentative basis, has been made by the various offers back and forth to resolve two pretty important problems that we have endured in this Province for many years. Even though it is sort of an off budget item, we constantly get reminded that our public debt, even though we have a table of public debt here in the documents, that does not count the unfunded liability that we have in other areas. It certainly would be nice to see that there are assets associated with that, which I understand to be quite significant in terms of the hundreds of millions of dollars. I would assume that if Consolidated Fund Services is responsible for dealing with the unfunded liability and other pension contributions, that we would somewhere in the allocations for either employee retirement - I would expect that in the employee retirement arrangements, where it is really for five heads of expenditures, that one of those heads would be expected to deal with the whole issue of unfunded liability. Yet, I do not see it anywhere there either, Madam Minister.

One further question, Madam Minister. There is a reference here to Capital expenditure under Consolidated Fund Services. I see a negative $17 million there. This is on page 3 under Consolidated Fund Services. There is a reference there to a Capital recovery of $17 million under the -

MS J.M. AYLWARD: What section are you in?

MR. HARRIS: It is an unnumbered page right at the beginning. Page 5 has the line items but the summary is prior to that. It is an unnumbered page but I guess it will be page 3, two pages before page 5. There is a summary of expenditure and related revenue.

Under Related Revenue, there is $211 million Current, and Capital of $17 million. I wonder if the minister could explain what the Capital revenue of $17 million might be under that summary?

CHAIR: The hon. the Minister of Finance.

MS J.M. AYLWARD: Thank you, Madam Chair.

This is the collection of the principal amount of various loans and investments, including NLHC of $10 million and Gull Island Power windup of $3 million, which was deferred from 2000-2001. Specifically, that is what it refers to. The principal piece of this would be the $10 million for NLHC.

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

MR. HARRIS: Thank you, Madam Chair.

One final question to the minister. Under line item 2.1.02, again under the pension fund. There is a statement of $12.3 million to be voted "...for special retirement and other payments as approved by Treasury Board." Would the minister give us an idea as to what level of retirements that covers? Does that cover early retirement within the public sector? Which I assume it does, or special arrangements to reduce numbers in the public service. If that is the case, what order of numbers are we talking about here in terms of people who might be involved in that $12 million expenditure? I notice that it was the same as last year. There was $12 million appropriated and used. The year before I think there was $10 million appropriated but only $8 million used. Could the minister explain what decisions are expected to be made under that head and how many people might be affected by it?

CHAIR: The hon. the Minister of Finance.

MS J.M. AYLWARD: Thank you, Madam Chair.

The pensions involved here include the Waterford Hartt Pension Plan, the widow's of $282,000, and Workers' Compensation. Obviously, in a question like this under Consolidated Fund Services, I do not have the exact number of people for each pension plan and each of their contributions. I do not even know if we could do that, quite frankly. In terms of a report, it would be a fair bit of work. As you can see, of the four plans, the Workers' Compensation piece of it is $26,000 - if you want the breakdown, to add it up. The widow's pension is $282,000. The Hartt pension plan, which is the Waterford Pension Plan, Hartt Report, is $1.4 million, and ex-gratia payments of 574. Again, this is also associated with the Hartt Pension Plan. There is a piece there on redundancy which is $2.1 million, and another piece associated with severance of $7.8 million. All of that is factored into that total amount of $12.2 million.

CHAIR: Order, please!

I ask the Clerk to call the heads.

On motion, subheads 1.1.01 through 3.1.01 carried.

On motion, Department of Consolidated Fund Services, total heads, without amendment, carried.

CHAIR: I call Contingency Reserve.

Shall it carry?


CHAIR: Shall I report the Contingency Reserve carried?


On motion, Contingency Reserve, carried.

MR. LUSH: Madam Chair, I move 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 Burin-Placentia West.

MS M. HODDER: Mr. Speaker, the Committee of Supply have considered the matters to it referred, and have passed the Consolidated Fund Services and the Contingency Reserve heads of expenditure.

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

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

MR. LUSH: Mr. Speaker, I wonder if hon. members would mind just taking a brief recess for about five minutes so members can stretch.

MR. SPEAKER: Is it agreed that we recess for five minutes?




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

MR. LUSH: Motion 1, Mr. Speaker.

MR. SPEAKER: Motion 1, the Budget debate.

The hon. the Opposition House Leader.

SOME HON. MEMBERS: Hear, hear!

MR. SULLIVAN: Thank you, Mr. Speaker.

I rise today to have a few comments on our Budget for the 2001-2002 fiscal year. Budget documents are supposed to give us the real truth, facts, and the true picture of Newfoundland revenues and expenditures for this coming year. We always advocate there are usually two versions of a budget: there is the government version and there is the Auditor General's version.

MR. J. BYRNE: The real version.

MR. SULLIVAN: The real version, the real facts, based on real expenditures and assessment by the person whose responsibility it is to audit the books and to tell us what government is not doing properly in their expenditure and controls in the Budget.

I am going to take some time, first of all, to just run through the Budget Speech and some of the things I will talk about. I know the Minister of Labour is nodding in agreement there. I am delighted to see she is agreeing with everything I have said so far. She might not be nodding by the time I am finished, but at least she is off to a good start, I would say. She is off to a tremendous start.

One particular reference here says: a restrictive ceiling, the federal government has imposed a caps equalization.

That is correct and I have agree, I might say, with taking a shot at that item, because one of the purposes of equalization is to provide services to the provinces of this country, allow them to have a reasonable level of services, comparative services, meeting national standards, at least acceptable national standards. I think the word acceptable is used. That is one of the underlying principles of equalization, to allow all provinces to be able to have a certain standard.

It happened in 1982 that there was a cap put on equalization because, as equalization kept increasing, the amount, the payouts of the have-not provinces, kept going up and up until the cap went on it. When the cap went on equalization, it meant - it was capped when there was about $10 billion in that pot of money, in that ballpark. We can total up the equalization and get the federal records there. I am sure on the Internet you will access that, about $10 billion in equalization. Because other provinces' economies have grown rapidly, because in other have-not provinces the disparity has increased, the cap on equalization doesn't allow our Province to get its share of the pie sufficient to be able to narrow that gap and make us less of a have-not. Government supports this. This is an issue that people on the other side of the House would support. That is an issue they would support, lifting the cap.

Last fall, the federal government figured that they needed seats in Atlantic Canada, because they figured they were going to have problems. They had to get gains in Atlantic Canada. What they did last fall, they announced a lifting in the cap on equalization. The figures put forth by this government said: because you lifted the cap for one year only, just this past fiscal year, we have an extra $38 million. Can you imagine, the cap is on it now for nineteen years. What would we have in nineteen years if it was $38 million a year? We would have about $750 million, if you look at that, around $750 million. That is a lot of money. The cap is going back on again next year and it is bad. That is one thing that has to be eliminated because - I will explain again - there is no election next year, but if there is only $10 million in a pot, and other provinces grow faster than us, and the gap between haves and have-nots gets wider, you need more equalization to reduce that gap. Because equalization is capped we cannot get the funding in to close the gap, and the rich get richer and the poor get poorer. That is what has happened with a cap on equalization, and that is wrong. It has cost us this year alone $38 million that we happened to get. It would have cost us had there not been a federal election and they announced that. That is another $38 million we would be looking for. Thirty-eight million, by the way, would be enough to cover over 2 per cent of an increase in the entire public service, just that part alone. It would equate to that, and that is significant.

AN HON. MEMBER: What are you going to do next year, Loyola? (Inaudible) 2 per cent in this year, (inaudible)?

MR. SULLIVAN: I didn't say that. Just listen to what I said.

Because there was a federal election, they lifted the cap on equalization for this year only. We got $38 million. That $38 million would allow you to have more than a 2 per cent increase in the public service. Why do they have to cap it? If the cap wasn't there we would have this next year, and maybe more and more and more, forever. Get rid of the cap on equalization. Talk to your cousins in Ottawa, talk to your federal cousins, and get the cap lifted on equalization. The only Liberal Government in Canada, provincially, that can't get their federal counterparts to make decisions that are favourable to our Province. We have been crucified by federal government policy in the last number of years. I will get to that. It is a revenue item in this Budget that is serious.

Your government, your Finance Minister, supports what I am saying. The comment on hearing this: I am agreeing with this statement here. Transfer growth will be constrained in any case by a restrictive ceiling the federal government has imposed that caps equalization. It says: A slowing economy will affect our own tax revenues.

The same minister is there indicating that this cap is hurting us. I am saying it is, and the amount that it is hurting us, and it has been going on for nineteen years. That is the first thing that has to happen.

If we are part of federalism, if we want to get out of federalism, what we should get - what is your vision of federalism? To allow all partners in that federalism to be able to become as self- sufficient as possible by tearing down barriers and providing incentives to have-nots to close the gap.

European Union: Ireland is a part of the European Union. They had no allegiance to Ireland. They are not part of one country. They are not a province or a state of a country. They are a separate country, and they were given a ten-year concession so that their economy can grow. They are facing great prosperity now, but if you were clawing it all back, for example, and didn't get the benefits, what is the point, just like our revenues in the offshore. We have to look at leveling the playing field.

There are strings being pulled in Ottawa from all directions, from Quebec and everybody else, that oppose some of these directions here. Right now we are getting into more of a conciliatory. Even people like Ralph Klein are speaking out, indicating that we need to do something about those things. We have to have changes. We have to do something about that cap on equalization. That is one thing, a cap on equalization.

I am going to get back to other things about equalization. There are other aspects of equalization too. Why is equalization there? It is guaranteed, constitutionally guaranteed equalization. It is there. It is a guarantee. It is a guarantee that provinces shall receive funding from the federal government so that wealthy provinces can help share in and help the revenues in provinces that do not perform up to the Canadian standard, so they can enable us to have a reasonable quality of service. That is one of the fundamental principles in our federalism, equalization, so fundamental it is constitutionally guaranteed. That is important.

Now, without that guarantee, our Province would have been cut adrift a long time ago. I mean, we brought into Confederation - what are we getting out of Confederation? People say: Newfoundland, look what you are getting. You are getting your handout programs and all these things. Look, we brought into Confederation a tremendous wealth, a tremendous amount of resources, that we brought into the Dominion of Canada. We brought offshore, offshore oil, offshore resources. Fish and other marine related species have contributed significantly. We have a coastline that spans a large part of Eastern Canada. We brought a multitude of resources from the sea, renewable and non-renewable resources. We have Labrador. Labrador is a wealth of resources that have contributed immensely to the Canadian economy, as well as the Newfoundland economy. We don't have to be ashamed, and we should not be ashamed, because we get some transfer payments from Ottawa.

What we should be ashamed of, all of us should be ashamed of, and the people who are representing us should be ashamed of, is that we have allowed the gap disparity to get greater from year to year, that now we are becoming so dependant on federal revenues, because federalism has not worked for us. It has not worked the way it is supposed to work. I mean, if federalism is supposed to work, why do you cap constitutional and guaranteed equalization? You don't cap it if that is what the purpose is, to equal or level the playing field.

If a person wants a service, wants to be able to go to a doctor here in St. John's, Newfoundland or Port aux Basques, Newfoundland, a person wants to go to a medical facility, they should have a reasonable, comparative opportunity to be able to do that, the same as anyone in Humbold, Saskatchewan or in Calgary, Alberta, or whatever the case may be. We should have that opportunity that is not being provided. Federalism is gradually squeezing and squeezing and squeezing more out of that equation.

When you look at equalization, there are thirty-some categories of equalization that we look at, and in each one of these there are clawbacks based on our own productivity, on what we produce.

Let's look at one other aspect of it. Royalties revenues that we collect: last year we collected almost $40 million in royalty revenues from offshore oil in this Province, almost $40 million. That is showing up here in this Budget as a part of our provincial revenues under the heading, Natural Resources Taxes and Royalties. It says $49 million this year, last year $60.8 million. Out of that $60 million or so, $40 million came from offshore oil and gas. Out of that $40 million, that shows us revenues of our Province, under equalization, when we got our equalization cheque from Ottawa, on that cheque there was $28 million less, because they took 70 per cent of that $40 million, a little bit less than $40 million, I think it was about $38 million, we will say $40 million, a nice round number, they took 70 per cent of that $40 million and they took back $28 million, less. So we lost $28 million less in equalization because we took $40 million in royalties in the offshore.

What is going to happen? Increase production, royalties go up. The Terra Nova field comes on stream, White Rose, Ben Nevis, Hebron field, as the fields come on stream, we can visualize $500 million, $600 million, $700 million and maybe $800 million. Can you imagine $800 million in the next decade in royalties coming into our Province? Eight hundred million, 70 per cent? Eight hundred million shown as revenue, and we go over and look at equalization and $560 million being taken back out of $800 million. What would $560 million do to our economy? It would do a tremendous amount. It would allow our employees to have a level of respect and dignity and pay. It would allow us to have a proper structure of roads, health care facilities, replace equipment that is outdated, antiquated. It would allow us to be able to perform at a very high level. In fact, that would pay for all our debt expenses in an entire year, that amount of money. Every single cent, we would pay down an entire debt.

Can you imagine, if we were getting enough in royalties - royalty revenue from call-back, that is not just counting royalty revenues. Royalty revenues alone in the next decade could amount to more than enough to pay all the interest on our debt. If you can imagine over $500 million to $600 million, that we do not have to pay down a debt that we have now, extra to spend, or to retire debt, or whatever the case.

We cannot retire debt, in the situation we are in today. We are having a job to meet revenues and expenditures, and our debt has been going up every year. Our net public sector debt now is about $7 million. We have also a significant debt in the Public Service Pension Plan; we have another debt there of $1.1 billion. We have $1.5 billion in the Newfoundland and Labrador Teachers' Pension Fund. We have a debt just on pension fund of $48 million in the pension fund of this Assembly here. We have another $200 million debt in the uniformed service. If you add that all up, what do we have? We have $2.75 billion of unfunded liability in pension plans alone in our Province, on top of a net public sector debt of about $7 million. That is a significant figure, when you are looking at almost $10 billion worth of debt in a province that has a shrinking population, with less than some of the major cities in this country. We have a declining population from 583,000 people down to about 539,000 people, and we have had a tremendous out-migration.

While we are on the topic of talking about what the federal government should do: In 1994-95, and I strongly opposed this - I do not know, but I am sure the Province could not have agreed with it at the time, but it happened; when our former Premier, who is now the federal Industry Minister, sat in Cabinet, they changed the formula by which we get funding from Ottawa, under Canada Health and Social Transfer. That funding used to be on a needs basis.

There were two programs available in this Province before; two programs. There was the Established Programme Financing for health and post-secondary education that was in one fund, and there was CAP, the Canada Assistance Plan, to assist people on social services. We got 50 per cent on each dollar we spent on post-secondary, on health and on the Canada Assistance Plan under that. We got a 50 per cent rebate on each dollar to assist us. In other words, we were getting funding based on what our needs were. Right now, what happened? The federal minister, in his great wisdom, decided, we are going to change that, and our Province, with the declining population we have been experiencing for some time, now feel the wrath of that decision. We were feeling the wrath of that decision at the time, and now we are finding that our money has diminished.

Let's just look at it. From 1994-1995, to this fiscal year right now - and the minister will tell you the same thing - just in this fiscal year alone we are getting $92 million less under Canada Health and Social Transfers than we got seven years ago. Ninety-two million dollars less today than we got seven years ago under Canada Health and Social Transfer. When you look back at what it has been, since they changed it under the schedule that is given, 2005-2006, we are going to see our Province receive almost one billion dollars accumulative less money in an eleven-year period because of changes that were made to the Canada Health and Social Transfer. I mean, almost a billion dollars. Our Province is only going to raise this year, in all provincial sources of revenue, even if you take out Recoveries under Sinking Fund, we are only going to raise from general revenues and taxation revenues about $1,840,000,000.

Here we have $1 billion taken out of one program of the federal government, equivalent to over half of what we raised in an entire year. I mean that is an astronomical amount of money. That is a tremendous amount of money when you look at it. What it would not do for this Province! Can you imagine, just this year alone, what we are losing. The $93 million over what we got seven years ago would more than pay for the increase that was put on the table and the offer by government at the public (inaudible). That would more than pay for that, just that amount alone, what came out, if you use that equivalent. If that had not to be paid out of the funds of the Province, that is $93 million more we could use for health and post-secondary education in our Province because that is the intent of the fund in the first place. If we had another $93 million we could do a lot of things.

We have a lot of antiquated equipment in our Province. I have been in the hospitals. I have seen equipment broken down. I happened to be there sometime last year and this person said: While you are getting this test, do you mind if someone works on that equipment there? I said, no, not at all. The faster you get that back up and working, the better. He said: Look, they are broke down more than they are working. Radiologists and other specialists in there are telling you the same thing. The Canadian Association of Radiologists indicated that the equipment is unsafe. There are dangers, the equipment is unsafe.

This Province, in September of last year, had the option to avail of funds out of a $500 million fund to use for medical equipment in this country, a special fund, a one-time fund, $500 million. We could get a cut of that, but what did we do? We did not avail of it. It was reported on March 28, just a few days ago, that we did not access this fund. We were one of the provinces that did not. Rich Alberta accessed the fund. They wanted funds for medical equipment. Ontario wanted and accessed it. Prince Edward Island did. Saskatchewan accessed the fund, Manitoba and British Columbia. Health Canada has been reported as saying we did not. I asked the minister here today, in this House, if that was the case and she did not answer. I asked her: Did you access the fund? She said: We are spending money on medical equipment. I know very well what we are spending on medical equipment, $32.4 million. That is the figure that is being used. I know what is being spent and what is tabled here in the House, basically, in the Special Warrants. I follow them, I know what is going into equipment.

Why this Province did not look for millions of dollars when I know people have died waiting -

I know a person recently, within this past several months, who was waiting to get into hospital, was told four to six weeks, and every week she was terrified. She only had one medical problem, a healthy woman, and on the fourth week one of her children found her on the floor of her kitchen. She died within minutes thereafter and did not get the procedure she wanted. I know others, and I know doctors who know others, who have gone public. I know that family quite well. She lived in Ferryland, had one medical problem, and that lady should be alive today.

What is bottlenecking our system? I have talked about waste in this system, and I will say it again. I brought it up to a CEO of a major hospital board in this Province and he agreed with me. I said our system is getting bottlenecked today because we cannot get diagnosed. There is something wrong when there are sick people in a hospital in St. Anthony, and there are more in Port aux Basques, down in Burin and everywhere else. I have had calls from people in the hospital in Burin on a Sunday evening. I have gotten them on a Saturday morning, from St. Anthony and Port aux Basque and all over. I have talked to people who could not even get access to a dye test, an angiogram. There are up to forty and fifty at one time in hospitals all over this Province; a little procedure that takes about 20 minutes. They bring you in and it takes about 20 minutes, but you have to have a bed in here to get in and get that done. I talked to the cardiologists, the people who do angiograms. I have tried to become as knowledgeable on it as possible. I try to research it when I raise an issue. At least, not being an expert on it, I like to talk to experts and get their opinion and get their knowledge of the system, as people who work in the field. I have some limited knowledge in that particular field but I rely on people who know the business, who know the job.

They said: Look, if you had somebody who needed an angiogram - and there are dozens, hundreds, in this Province waiting - you could come in and get an angiogram done, and if you are a candidate for an angioplasty, we will call it the balloon test, you go in and get that done and in three days, if all goes well, you are home again, fine. Still, they keep fifty and sixty in hospitals, dozens and dozens or more all over the place waiting to get in to get that test. We are bottlenecking the system.

The system is bottlenecked too because of MRI. We have one MRI. New Brunswick, I think somebody said, has five. I do not know the exact figure. They have mobile MRIs in New Brunswick. We have one that we use for half a day. Half a day is all the resource that is being put into using that. Doctors cannot get an MRI for their patients.

AN HON. MEMBER: They are only using it half a day?

MR. SULLIVAN: Yes. Each day it is only used half time. An interesting point, I say to a person who has been in the health care field. In fact, on weekends it is not scheduled to be used and in the nighttimes it is not scheduled to be used. I have been told - and I did not bother to substantiate this - that even on weekends people pay the people to go in and do certain MRI s on animals and so on; that it is paid for directly. I was even told that. I did not bother to check if that was accurate, but I have some reason to believe that it could be true, that they have even done animals in there. The people were paid to go in and use it in their down time on weekends.

AN HON. MEMBER: They do emergencies.

MR. SULLIVAN: They do emergencies, yes, basically at any time.

I am asking, and I have asked the question before, I have said it here in this House: Why are we not using them eighteen and twenty hours a day? I checked other jurisdictions in this Country that are using them up to eighteen and twenty hours a day. Now, to run them twenty-four hours you might increase their maintenance cost. If you run them steady, you will increase their maintenance costs and other things, but use them ten and twelve hours. Why not eighteen or twenty hours? You need extra resources then, you need extra staff, you need extra things, and we are not putting the money into it. Why spend over $1million on a facility that you cannot operate?

Also I have said: Why do you build hospitals where you cannot use all of the medical facility? Why did you build a forty-bed hospital down in St. Lawrence in the early 1990s, and you have only opened thirty, to this day? Why did you build a big one down in Burgeo and there are some of them not even used? I went through it and looked at the facility; it is not even utilized, and the capital cost of building it, maintaining the facility, when you are not going to use it. Build within the amount that you are prepared to give the commitment to use. That is dollars wasted, chewed up. I call that wastage in the system.

When I have been challenged to name a figure - and some people used a figure that I never used - I have said tens of millions. I have never nailed it down at all. I might surprise myself if I found out how much inefficiency is in the system.

I do know that if forty people are in a hospital bed in this Province waiting to get an angiogram and cannot get one, and some of them are in there for five weeks - thirty-five days in a hospital, at the cost in a hospital - in the Health Sciences Centre, the average cost is about $800 a day, going up to about $1,000 a day, I think. Years ago, it was $795. It is probably $1,000 now because the beds are down and the total costs are still there. So $1,000 a day at thirty-five days - $35,000 waiting to get an angiogram that is a twenty-minute procedure.

Look, there are bottlenecks in the system occurring in diagnostic equipment for heart surgery, for angiograms. There are bottlenecks in the system from numerous diagnostic surgery there, and CEOs and people in the field will agree with me. They will agree. I am sure the minister cannot disagree with me on this either, because I have checked it out. I have talked to people. I have sat down with them and I cannot understand why.

Would you believe - and I know the Member for Trinity North worked in the system - hospital boards were not told, for last year, in the last fiscal year, until the fall, until November I think it was, how much money they were going to be allowed to spend, until the fiscal year was almost over. The did not know the exact amount of money they were going to get.

How do you plan a one-year, a two-year, or three-year plan? Industries and companies today look at five-year plans and three-year plans. You cannot look at a ten-year plan any more. You have to be able to plan, if you have capital expenditure and you have a plan to be productive, if you are out in business and you look at a plan and your expenditures you are going to put into capital, and how much you are going to put into your operating costs.

The City of St. John's looks at how much we are going to put into capital. I think they put 11 per cent into capital there. I believe that is the figure that was used there on roads or whatever. I do not know if it is the total capital. This is how much money we allow, and that is what we will go up to, our requirements. If we get too much capital borrowing, too much capital expenditure, we have too much financing, we are spending our money and paying down debt and we cannot provide services. So there has to be a balance between borrowing and a balance between what you put into capital. We are not seeing this government show a proper use of capital expenditure. It has been atrocious, I can tell you.

I asked a question today in Consolidated Fund Services. Trans City, we are still paying the price for giving a contract to the highest bidder. Can you imagine government giving a contract to the highest bidder? Higher interest, higher payments.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: We were going to get it back for a dollar at the end, basically, I think, on the lease arrangement. Now we are going to get it back for 60 per cent of market value or something. That was even changed, I think. One of the companies they financed it through went under. I have the file on it. I just remember some of these points. So, we are still paying for that.

On top of that, the court said: Oh, you did wrong. You were not allowed to give it to them. You broke the law, Mr. Premier - the former Premier - you broke the law by doing that. You have to pay back to this developer now, $1.6 million. The judge's ruling had left the door open for another one who was in on it to get another settlement of another $1.6 estimated because you broke the law. Former Premier Wells - in other words, his Administration broke the law. The court said: You broke the law, Premier, and you have to pay it.

MR. MANNING: Where is he now, the former Premier?

MR. SULLIVAN: He is the law now. He is the law, not broke the law. We will not get into that. I do not want to get personal. I want to keep it on a political level here.

On a very political level, he broke the law. That was not the only way we wasted money.

MR. JOYCE: What about the deficit in 1989?

MR. SULLIVAN: Hang on there. You want to know the deficit in 1989. I will give you deficits in 1989. I will go right back in the deficits. The Member for Bay of Islands wants to know deficits. I have a little figure on deficits here now. I am just waiting for him to ask it. I just have to find it. I am pretty familiar with it anyway. I would almost be close without them, but I would like to get entirely accurate. In the statements filed by this government, I like to use their own statements. It is in one of those two folders I have here. If he doesn't mind waiting there, if he is not overly anxious in getting an answer, I will just let him wait. I must have it in my more current folder; maybe I figured I was going to get asked the question sooner than I expected.

The total public sector debt today is about $7 billion.

MR. JOYCE: Eighty-nine (inaudible).

MR. SULLIVAN: Wait until I am finished. I am getting to that, don't you worry. I will have that for you shortly. I have it in 1984 and I have it in 1971 for you, if I can just find that little note I had put aside for occasions like this.

I will keep talking while I am looking for that.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: I will do all that in due course. I have unlimited time. I can speak for seven weeks on this topic, unlimited time in replying. I will get answers to all your questions that you would like to have.

AN HON. MEMBER: I always thought you were making (inaudible).

MR. SULLIVAN: Me? Who was making?

AN HON. MEMBER: (Inaudible).


AN HON. MEMBER: (Inaudible) the Budget.

MR. SULLIVAN: When was that?

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Who, me? Sure I have only been here since 1992. I can go through the records of what they spent.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: That is right. I don't take responsibility for an expenditure that I had no part in. I take responsibility for an expenditure that I have a part in, I might tell the member. I don't approve of wastage under former PC governments any more than I approve of any wastage under current Liberal governments, I say to him.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: That is right, and I have said it before. People have to defend their own things. They have to defend what they did, and I will defend what I do and say.

MR. SHELLEY: A walking calculator. He is never wrong on numbers.

MR. SULLIVAN: I am getting a rousing vote of endorsement here from my colleague, I must say. I appreciate it. I have some other good figures here on things, but I didn't really want to get to it so soon. I will just leave these for another week. I just have to get that deficit thing.

AN HON. MEMBER: You will have to wait until (inaudible) gets back.

MR. SULLIVAN: Don't worry, he can read Hansard. He can turn on that little system out there. Here we are. He is gone now. Look, as soon as I find it, wrapped up in other important papers here.

Let's have a look. The debt, 1989. I can go back to 1991, 1986. The total public sector debt in 1990, the fiscal year ending 1989, was $4.845 billion.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Billion, with a capital B. The debt today, the total public sector debt today - if he would look on page xi, Exhibit V, it is $7 billion.


MR. SULLIVAN: We have increased the public sector debt by $2.2 billion since 1989. That is from your records here. This is taken from the financial statements of the Province, the one this government tabled in their Budget in 1990 that is showing up to 1989. I have the figures here, Exhibit V.

MR. J. BYRNE: They, not we.

MR. SULLIVAN: They, them, that side, those guys over there. That is it.

Just think, do you know what they did in twelve years?

AN HON. MEMBER: What did they do?

MR. SULLIVAN: Two point two billion dollars - the debt was $4.8 million - that is almost a 50 per cent increase in public sector debt since those guys took control of the reins of this Province.

The first Premier of this Province spent, in one year, 40 per cent more than he took in in revenue. He drove us so far down that we never got up out of that hole since. We never got up out of the hole since. They are still digging. It reminds me of a guy in my district, a fellow called Dillon. Did you ever hear that, Are you diggin' em Dillon, up in Mobile? You are diggin' em Dillon; that was the goat. This government has dug a hole deeper than the one dug by Dillon's goat, I would say.

Now, he wanted to know about the deficit. He wanted to know about the debt in 1989. I ask the Member for Trinity North, what question does he want answered next? Go ahead. I am sure I have it here somewhere.

AN HON. MEMBER: Who got him elected?

MR. SULLIVAN: Now, listen here, I have been doing a good job staying on the Budget so far, but I am going to be tempted to divert from the true fiscal picture of this Province.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: I am telling you, your seat - the sand is shifting quickly. His chances of getting back here again are diminishing by the day. They are going down by the day. You have to cut yourself loose and get up there in the little independent chair down in the corner, if you have any hope of ever seeing the light of day again.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: He said he will bring him down too. Don't you use that big anchor that Conception Bay East & Bell Island has tied to him. Don't use that anchor.

Now, I was starting to make a bit of sense before he asked -

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: What did he say?

AN HON. MEMBER: (Inaudible) elected three times.

MR. SULLIVAN: I tell him, I got elected four times going against a huge tide. There was a big train coming at me in one election, bowled me over. The last election, myself and my colleague were going to get wiped off the face of this earth! We were going to be trampled!

AN HON. MEMBER: We never lost a poll, neither one of us.

MR. SULLIVAN: I got elected in 1992 by 125 votes. You can check the public record. In 1993, the second time, the highest per cent in this Province, 74 per cent. The Member for Port de Grave was 73 per cent in 1993. In the next election, the only member who had more votes was Madam Speaker, sitting in the Chair in 1996. There were only two who had more votes. I was fourteen votes shy of the Member for Bonavista South in the last election, who had the most!

SOME HON. MEMBERS: Hear, hear!

MR. FITZGERALD: Loyola, sit down and let me get up and go over my record here.

MR. SHELLEY: Loyola, Roger wants a few words.

MR. SULLIVAN: How many voted?

No, if I sit down, I am grounded. I do not want to forfeit four or five days of speaking on such a good topic here, and sit down.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: When they admit that this government ran us $2.2 billion in debt in the last twelve years. I want to ask the Member for Trinity North, are you sorry you asked the question?

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Oh, the Member for Bay of Islands.

I want to ask the Member for Trinity North, are you sorry the Member for Bay of Islands asked the question?

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: You are sorry, yes.

AN HON. MEMBER: That was a good answer.

MR. SULLIVAN: That was a good answer? Good, I have more detail if you want it.

MR. J. BYRNE: If they went $2.2 billion in debt over the past few years (inaudible).

MR. SULLIVAN: Balanced budgets? They do not have balanced budgets. Two point two over four point eight, that is about what? Forty-five per cent, I would say, if anyone wants to work it out quickly. Fifty per cent would be 2.4 and that is less than fifty, about 45.9 per cent. Just work it out and see, 45 per cent or 46 per cent, approximately.

Can you imagine, the government that you are sitting in, Conception Bay East & Bell Island, increased the public sector debt of this Province by 45 per cent since 1989. You should be ashamed of yourself. You should be ashamed to want to be a member after the next election.

AN HON. MEMBER: Did you ever have a person in a hospital or in a school say we should not have (inaudible).

MR. SULLIVAN: Did you ever have a person in a courthouse telling you that you gave a bid to the highest bidder? Did you ever have a judge who said $3.2 million for this ruling; a judge saying millions for this ruling? Did you ever have a judge who said you did wrong and broke the law?

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Yes you did, and that is in the court records of this Province.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: That is right, and for every dollar you waste you inflict agony on Newfoundlanders and Labradorians waiting for health care. Who was your source?

I said before in this House when these court decisions were being made, if your legal advisers are so bad you should fire the works of them! Get rid of them! But I do not think it is the legal advisers. I said when you made all these bad decisions you broke the law. When this government and minister broke the law - and we are told by the justices of the courts of this Provinces they broke the law. I said if that is the advice you got from your legal people, fire them all! If it is the advice you did not take, shame on you. That is what I would say.


MR. SULLIVAN: I cannot hear the Member for Conception Bay East & Bell Island.

MR. WALSH: (Inaudible).

MR. SULLIVAN: As Premier of this Province he broke the law and judges said so. Former Premier Wells of this Province broke the law. I am not saying -

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Judge Wells broke it. He was not judge then. I am saying the Premier of this Province broke the law and the court said so. They had to award settlements in this Province because your actions were contrary to law, and the record is in the courts, that is clear. That is what I said. I said it before and I will say it again. I will accept the judgement of the judges of the court, whatever that may be. The learned judges of the court, I will accept their judgement as being law. If that agrees with what I think or it does not, I will accept that because that is the system we work under. We have to accept it.

I did not even get to the first paragraph of the 150 pages. I did even get to my first paragraph yet. Only one page in the Budget. The first paragraph, that is where I got. I got to the first paragraph on the page that talked about capping equalization. I did not even get past that.

AN HON. MEMBER: Do you have unlimited time?

MR. SULLIVAN: Unlimited time.

AN HON. MEMBER: You need a break (inaudible).

MR. SULLIVAN: No, we do not need a break.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: What is he reading?

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: A new poem?

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: It must be a telephone pole. It must be a lightbulb, is it?

Yes, the Member for Bay of Islands was really interested in getting the answer to my question. I can repeat it when he comes in again but I would like the person who assisted him with that, the Member for Trinity North, to let him know what the debt was. I will give you a figure. Do you want it?

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Yes, I got everything. Everything anyone would want to know.

Just let him know that the government on which he got elected in 1989 and did give up his seat in 1989, since that time - let me jog his memory - we have increased the total public sector debt by 45 per cent, while he worked as an assistant to the Premier. He was the assistant to the Premier. He was an assistant and executive director out in the Premier's riding, Bay of Islands, who did the noble thing and gave up his seat for Clyde Wells at the time. Other people would not give up their seat for him, and I applaud them for doing that.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: No, I have every year here back since the 1940s. Joey Smallwood overspent 40 per cent in one fiscal year. Can you imagine? He spent 40 per cent more in one fiscal year than we raised! No wonder we have a mess in this Province.

The total public sector debt of this Province in 1987 was $4 billion, 734.7 million. In 1998 it was $4.8546 billion.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Yes, in 1988. In 1989 it was 4.845.

MR. J. BYRNE: What is it now?

MR. SULLIVAN: I said it already. I will say it again, $4 billion, 734.7 million.

AN HON. MEMBER: I have a copy of that up in my office is that the one with Sprung Greenhouse on the cover?

MR. SULLIVAN: I can't tell you. I only copied the page, I cannot tell that.

If the member does not know that he can check it out. I cannot tell you if it was or not, but I can tell you that the public sector debt - what year did the Member for Conception Bay East & Bell Island first get elected?

AN HON. MEMBER: I don't know.

MR. SULLIVAN: When did you first get elected, in 1989?

MR. WALSH: 1989.

MR. SULLIVAN: Since you got elected the government - which you sat as advising the finance minister - has driven the public sector debt of our Province up by 45 per cent. Do you feel that is a good record as an adviser to the finance minister, or are you ashamed of that record?

MR. WALSH: (Inaudible) bills that were there prior to 1989.

MR. SULLIVAN: Oh! So you are saying that your government deliberately carried bills from a previous year and did not write them off until the following year! Is that what you are saying? Are you saying you cooked the books on those bills and didn't put them - in which they were incurred in that fiscal year? Is that what the member is saying; yes or no?


MR. SULLIVAN: He is saying you cooked the books! He said yes! They cooked the books of this Province!

I didn't think he could boil water. He could not boil water at home but he can cook the books of this Province here. I have a real job to come to grips with that.

MR. J. BYRNE: No wonder you are in the mess you are in!

MR. SULLIVAN: I got them excited.

I am still on the first page of the Budget address and I have gone on for nearly an hour. Still could be a long, long period.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: I can't hear you. Stand up on a point of order so we can get it on record. This is your chance to ask questions. We do it in Question Period. Now is your chance. Any question you want answered, I will give you an answer. Straight answers and real solutions.

Back to equalization. We are still on the topic of federal transfers. That is the interest on the debt. Before I put away these notes, are there any other questions on debt? I don't want to have to go back to these again.

I will get back to the Budget Speech. The other side of the House didn't seem to agree with me, but the minister did and other people of government, when I said that the cap on equalization is having a very negative affect upon our Province. This year we lifted the cap for the first time in nineteen years and that has given us $38 million. What would we have if we had lifted it earlier? We would be probably having - depending on the economy of other Provinces - $50 million in some years, maybe thirty. Who knows? I would imagine in the vicinity of three quarters of a billion dollars if this year was the average. That is significant.

I want to talk about a few other things now. Anyone who wants to follow along it is in the Budget Speech book. In 2000, our economy grew in excess of 5 per cent. In real terms, for the third consecutive year. In other words, our economy has grown over 5 per cent a year for the last three years. What other economy in this country grew over 5 per cent a year for the past three years? What other economy? None we are told. The most rapid growing economy in the free world today, you could say; certainly in Canada. If that is the case, next year we are going to have a 2 per cent growth in real economic growth. The GDP growth is going to be 2 per cent. If we are going to have a 2 per cent growth in the GDP - if we are going to have a decline. In other words, the economy is going to slow down by over one half. Actually, well over a half. About 160 per cent basically of what it was last year. The economy is going to have a slowdown of 2 per cent. If we are going to have such a slowdown in the economy and in growth this year - I asked the minister some questions there. I asked her why - if the economy is going to slowdown.

When the economy slows down you get less money in the economy. There is less money to be spent on retail sales. You do less shopping. You look at the necessities. Some of the necessities are tax exempt, basic foods and things. You have a tendency to spend more money when the economy is better, therefore you get your revenues back in taxation. Why are we going to have such an increase in liquor consumption next year if the economy is slowing down? I know we are getting one shot out of the equity of the Newfoundland Liquor Corporation there. I know that is built in, but still we are getting money out of it. We are going to see lottery revenues go up by over $4 million to $5 million next year, in spite of a slowdown in the growth of the economy. We are going to have an increase in consumption taxes, generally, and tobacco tax is going up. All these consumptions are going up for the slowdown in growth in the economy.

When you take home your cheque - some people do a budget and spend within a certain amount. They have a certain amount to pay for the necessities and they have so much to pay for entertainment, leisure, and recreation in their budgets. If you have less disposable income the pinch is on. You did not get that bonus from an employer that you would normally get because you did not perform as well. You have less money to spend. Where would you normally spend that money? You would not spend it on basic groceries because you are meeting those needs anyway. You would spend it on some luxury items or other things. You could get that skidoo that you did not get, if you had a winter like this. You would probably go out and get a bigger one or an extra one. These are the types of items that people spend it on when they have extra money and things are going better. They spend it on a lot of these items and we get taxation back on those items. If you make less money do you spend more on gasoline? Do you spend more on tobacco tax and all these other taxes? Not normally. You do not normally spend more money on these consumption taxes when the economy does not perform as well.

We will wait to see what the figures are, whether they are very conservative estimates maybe or if there is a little cushion. Maybe there is a cushion built into these little things so that we will have a few extra dollars. Time will tell over the course of the year exactly what these figures are, but the economy is not suppose to perform as well. We are only going to have a 2 per cent growth in the economy when we have gone through three big years of growth. It is ironic. We have talked about things - could you point out the point of contradiction?

AN HON. MEMBER: ( Inaudible).

MR. SULLIVAN: Who said that? Boy, that member is just not with it. That member is just not paying attention. He just does not understand the context of what we are talking about. The Member for Trinity North has been here since we started.

AN HON. MEMBER: (Inaudible)

MR. SULLIVAN: Boy, is that fellow confused? Has he been sent in here on a mission to detract from the real message at hand? If that is their strategy, to try to distract me, well, listen here, you had better go back and bring in a lot more people, another fifty or sixty people, because you are not going to distract me from what I want to say here at all. You are not going to detract at all from what I am going to say.

Every single year, during the Budget, they stand up thumping the greatest economic growth in the history of this Province and the country. Great! Fantastic! The best economy! Things are going great! Then, at the negotiating table: we can't afford it. How can you have the best performing economy in our history, year after year, but you can never afford anything? Does that message ring of a contradiction? That is a major contradiction that I haven't been able to figure out, why things are so great on March 22 and on April 1 things are so bad? Why were things, last year in March, so good and later on they are so bad?

We can't afford this, we can't afford that. We have a booming economy, we are told, for the past three and four years, but we couldn't afford 7 per cent. It was put out in the public media. A notice went out from the Premier of the Province two or three years ago saying there was basically an end to collective bargaining, there would be 7 per cent. Seven per cent is what all sector unions are getting right across the board, and that is what you are getting. You can come in and bargain and do all you like. What did they end up with? Seven per cent, 2-2-2-1. The same time he was saying this, we can't afford any more than 2 per cent, the economy was booming. We got up, we applauded and talked about this fantastic economy. We are experiencing tremendous growth.

Here is what is wrong with the growth of our economy: We have not moved proportionately in our source of provincial revenues in line with the growth and GDP. What does that tell us? If our GDP growth is over 5 per cent a year we should see a corresponding growth in our ability to raise revenues from our taxation and broaden our base of revenues to our Province. Why isn't it happening? Because, our economic growth, GDP, has been attributed in large part to offshore oil, which has contributed a message to our GDP. But the refinery jobs and all the other jobs, basically, on the Eastern Seaboard and in other parts of the country - we haven't built up the body of jobs in the industry to reflect proportionately the jobs and the people living here, the houses people are building here, because they work in industry and expand in industry, because the jobs are not seen here in our Province. That is why it was so significant when we talked about expertise in Leatherhead, England and getting the people in here, the people who bring the expertise. Build it here, build up a centre for offshore oil, don't let Halifax take away the centre of offshore off our coast here, where a lot of expertise and so on has been going.

We haven't grown proportionately, the revenues, in line with the GDP and that has cost us. That is a part of government policy. That is government policy. Government policy has not allowed our economy, our real returns to the Province, to grow in proportion to the GDP. We have sort of a hollow, we haven't filled in the pieces in the industry.

Look at the fishing industry, the Minister of Fisheries and Aquaculture. About 40,000 people were employed in the fishing industry in this Province. Now, we are down to just over half that amount, people in fish plants in the Province. What has happened in the meantime. We were employing twice as many when we were contributing half as much to the Province's sales. When we had sales of $500 million or $400 million, we had twice as many employed. Now we have up to $1 billion in sales and we know why, because the process with our groundfish was a very labor intensive process. A lot of it went into fillets and finished products. Some of it went into a variety of cod blocks and others. Not many fish went out in the whole form.

Today, we are looking at shellfish, another species that is going out, and the jobs are not there proportionately to the amount of processing. Lump roe, another species, we are talking about two or three jobs in the fish plant working on lump roe, not near the jobs you have in other species. Take crab, if you are doing sections it is not near the jobs. If you are into crabmeat, it is more labor intensive, you are getting more returns. The market out there, I know, will dictate a certain amount of this. We have not got the jobs there, but we are getting the price on the market. You are going out on the market and you are selling your product that is much more expensive.

You do not have to sell as many Rolls Royces if you want to get the same amount of sales as you do by selling a smaller vehicle that costs $15,000. It varies. You are selling higher priced products to bring on a market, but the job structure and the number of people employed - there are people in fish plants here in this Province today who cannot get enough hours to qualify for employment insurance, working in major plants in this Province in the past year. This year, if there are quota cuts that affect that, it will be even worse. We went through a period when you could not get people to work enough hours in the summertime. People were working sixty and seventy hours, if you wanted them in on weekends. They had no problem qualifying for employment insurance because they were dealing with a fairly labour intensive product.

Today, we are finding that the number of harvesters has even gone down. Small inshore boats would not have been able to survive except for that crab quota that was given to them. They would be gone under. There were no groundfish, so the bit of crab inshore has kept the inshore industry alive. It has allowed people to stay here in their Province, and at least in their home that they own, to be able to at least retire in the next five, six or ten years. A lot of people in the industry are in their forties and some are in their fifties. That would not have happened without a share of crab. But you do not have three and four in the boat anymore. You have one person with a crab license, and another person will have one, and the two of them will go together and catch this quota and then they will catch that, and you have two people bringing in the level of income. You need a certain amount of income to survive. So you have two people now getting revenues that, actually, seven or eight people in the fishery were getting, and it was more labour intensive. We have not got the harvesting effort in those areas that it would take with groundfish.

The fish plant numbers are down drastically. I do not have the actual count, but I am sure in the reports there it gives the numbers that are there. How many are in the industry now? About 30,000 roughly, I think.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Yes. Mechanization, I agree. I know operations that were employing 25 per cent less last year in crab processing in their plants than they employed the year before. That is happening because, first of all, the price to harvesters is very competitive. So that is one thing that drives it. Then there are other factors. You try to keep margins. Anyone in business is trying to maintain margins. As you try to maintain margins, you try to invest in machinery and equipment that will cut down on the labour component. As you reduce the labour component, at least you can keep those costs down, increasing costs of wages and other factors. So that is one other thing that does it.

There are two factors. I agree. I have done it. I spent twenty years in the industry myself and I have a limited knowledge. It is a little rusty now. It was 1992 . Actually, it has been nine year since I have been involved. So you forget a lot over the period of time, but generally being in a fishing district and representing people there, I stay fairly close to what is happening. So I am fairly current on most things. I might need to be corrected on a few items.

That is basically what is happening in the industry out there today. Not only that, people are looking at, as you get bigger boats - that is another issue altogether - you try to go farther afield to access more species. Everybody, no matter what business you are into, as a fish harvester or in the fish business as a processor or whatever the case may be, you want to increase your return to you as an individual, you want to make more money. Everybody wants to make more money and they should. If you do not want to have increased profit and do better, a better lifestyle for your family, well I think there is something wrong. There are not a big number of people that would be in that. That would be a very small minority of people. So that is only a noble thing to try to do that. That is what drives society, people's efforts in each area.

The fishing industry has gone through tremendous change in a period of time. We have seen employment levels drop dramatically in this Province. We have had a lot of hardship because of that. We have family incomes - I know places now in my district, the town of Trepassey. I think had 170 names of people who could not qualify for EI this year. The town of Trepassey that had 1,480 people in the 1991 census, in 1996 the population was down, showing about 780 people, and I would say half the size that it was. Can you imagine an area with seven hundred and some people now; 700 to 800, and 175 people could not qualify for the EI. There are seniors there and there are school kids on that list and so on, almost everybody unemployed - almost everybody - a significant number in that community. It has been devastated. There was a thriving plant under Fishery Products International, a year-round plant that had 650 people working there, and now the community has been devastated. There have been a few industries trying to make a go of it there. A lot depends on markets, and effort and resources, I guess, finances. There are three operations up there, a bottled water one you might see. Discovery Springs is one that is being -

AN HON. MEMBER: How many work in that plant, Loyola?

MR. SULLIVAN: I beg your pardon?

AN HON. MEMBER: How many work in that plant?

MR. SULLIVAN: You could probably count them on one hand.

AN HON. MEMBER: How many did they start with?

MR. SULLIVAN: When they did the expansion, I think there was over a million-dollar expansion there, and equipment. I went through it on a few occasions. I think they were intended at full swing to have about twenty-five or twenty-six people over two shifts, and that would have been sufficient for the whole operation there. That is my understanding, now.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Well, it could be thirty-five. It would have been pretty fair employment in a town of that size.

We had another industry that depends a lot on markets. They do light fixture for marine, like Mariteam Lighting. That is the name of the company now. Glamox Canada Ltd. it was. Mariteam is the company now that does marine fixtures, probably for the military. I think they were working on lighting for the Iron Ore Company in Labrador. They are doing different design in heavy fixtures, expensive lighting, that are designed in such a way that water does not get in, or dust, and to reduce those factors. That is a very highly, very precise thing. It is very automated equipment there worth several hundreds of thousands of dollars, and when they are in operation, sometimes they have been in full operation with, I think, thirty or forty people there. Then they have a down period during which nobody gets employed for months basically. They are up and down on the markets, but the potential is there; but all three seem to have crashed at the one time now. There is a window-making facility there, Weather Shore Windows Inc., that you might be familiar with, but sometimes they are up and they are down now. It is a pretty rough time right now.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Yes, they do a fair amount into design, research, and the marketing end. I am not sure, but I think their parent company is in the United States and it depends on the markets to get the orders. They would bring in the people to be able to fill that order, whether it is a month, two months, or three months of work. So, it is sporadic and experiences a pretty difficult time for a community that was thriving. People came from all parts of this Province down in White Bay and you name it, all over, and moved into Trepassey, built expensive homes there. There were three homes went last year for $100 each; homes for $2,000 and $3,000. You can buy a $40,000 bungalow that was built there years ago and go in and buy it now for $7,000 or $8,000. There have been houses that have been given away. It is too expensive to keep it up and be away somewhere else. They have been reclaimed by the town and sold for very cheap. Some U.S. people have come in and bought, I think, three for $100. Now, they were older type houses, though, but with the land and everything that goes with it. Other houses have been sold for $6,000 or $7,000 or $8,000, and $3,000. I mean that is pretty cheap to buy a house that is a very liveable house, a house that is very presentable. It was a normal, average-sized bungalow, I would say, people built twenty-some years ago, I am not sure of the exact age, give it back then. They are picking them up now for a few dollars.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: I beg your pardon?

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Well, the marketing of them - I know bottled water is very competitive and there are a lot of companies supply here and bring in water as a part of marketing by bigger national companies and so on. They put their product in. Even down here in the cafeteria, when I went down I saw water here brought in from the Swiss Alps or somewhere. I would not buy it. I said last year or the year before: I do not see any here from Discovery Springs. No, I am not going to buy it. I will buy a tin of Pepsi. Then, last year, they got in bottled water from Discovery Springs. They had a few in behind. Then, they got it out into their coolers. Any time it is there, I buy it. If I go in now for bottled water and see bottled water in a store that is not made in Newfoundland - True North or Discovery Springs - if it is not made in Newfoundland, I do not buy it. I leave it there. I buy Pepsi. That is what I will do. I said, no, if we do not buy it then you cannot sell it and you will go buy this other product.

AN HON. MEMBER: (Inaudible).


AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: I know, but still we have Browning Harvey employing people here. At the same time, I am pretty conscious of buying locally. I mean, when I built my house and any things I bought, there was a local person in the community and I bought from them. My lumber supply, I went down the road. I did it before I ever got into politics, back in the 1970s. I have seen local people, entrepreneurs, get into a community and create jobs. If people want to make wealth for themselves in there, and some businessmen are not always popular, they are employing people. They are creating money in the economy, keeping people here and helping your town structure, your taxes, you housing. Everything benefits from it, and the spinoffs are great. We need to be doing more of that, and that is why I agree Made Right Here in Newfoundland, those products, get out and promote it. I am all for that. Any initiatives, we have to see it and we have to support our own industries here. We are producing good products. We are producing excellent products that can rank with anything made in this world. Our people are as skilled - skills and potential do not come only in Ontario or other parts of the country. They are equally dispersed. We have the talent and the skills. We have entrepreneurs who need to get a bit of help. They need to get support in getting up and getting off the ground.

Many times one of the things that frustrate businesses is a bit of start-up capital sometimes. It costs a little bit of money up front. A lot of people do not have the resource. They have get ideas, they have the commitment and so on, but they do not have the capital resources to be able to get the business up and running. That is why those venture capitals and other types of things - you get people to invest into funds and things to assist companies in our Province. We have to see more of that occurring.

We have been trying to do a job, marketing Newfoundland products and highlighting that. I must say, they have done their share, but we can always do more. We can always push it a lot more and try to create some prosperity in our Province. I do not think we should be afraid of prosperity in our Province at all. I think we should welcome the opportunity and we should do our utmost.

Our economy is going to grow by 2 per cent this year. We have to hope employment levels will reflect that, and not just the number employed; the person years that people are employed is important. We do not necessarily just want more people employed for shorter periods of time. We need sustainable employment for long periods of time, and we should be conscious of that because they are bigger contributors to our economy.

You can have a steady job. It is the best safety net anybody could have, to have a job to go to. People might have said: Newfoundlanders' life style is on unemployment. I have talked to a lot of people out there who will not even sit around and draw unemployment insurance in the wintertime. I know families who have done it. They would not stay around and draw unemployment insurance in the wintertime, who made a decent income for fifteen or twenty weeks in the summer. They went to Calgary because: I want to have a job to go to every day.

I know families who have moved away, who had enough income to live and get by, and rear their kids on a reasonable level of income, but wanted to be able to work every day. They wanted to have a consistent job, to get a good income, to be able to at least be able to enjoy some of the things in life and be able to provide a bit better for their families. It has been pretty difficult to do it in rural Newfoundland, because rural Newfoundland has been in decline in numbers and in people employed.

We can never stop urbanization. That is going to happen. When you look at Manitoba, for example, over half the people in Manitoba live in Winnipeg. We have seen, in Alberta, almost half of the people live in Alberta and half of them live in the two main cities, in Edmonton and Calgary. We are seeing nearly 40 per cent of the people in Saskatchewan living in Regina or Saskatoon. We are seeing large numbers of people flocking to cities. We are going to see it here in St. John's, Mount Pearl, the greater regions around here. We are going to see more people moving in, people who want to be closer to facilities, better opportunities. As rural Newfoundland numbers go down, there are less opportunities for their kids, and a lot of their families have moved. Even older people are sometimes moving with their children into urban areas and so on where they can care for them, or see them more on a regular basis.

We are seeing areas in Newfoundland and Labrador and we know for a fact, regardless of what you want to do, you cannot put businesses in every community in rural Newfoundland. You cannot go out in all areas of the Province. That is not going to happen. That would be a foolish thing to do. It is not very wise to think that is not going to happen, and we cannot give people that believe. We can look at regions of the Province and try to develop regions where people can commune to regions. If you are in the Corner Brook area, you are within an hour's drive, or forty-five minutes, commuting into work. The same thing with Stephenville, Port aux Basques, St. Anthony, or up in Port au Choix, wherever you happen to be. We expect reasonable levels of activity to be able to be generated to sustain those communities and those economies in these areas, because everybody has been struggling. Local governments have gone through difficult times. They are trying to pay debts, they are trying to pay down on debt, and trying to operate in communities where they see declining tax bases. A lot of times government has withdrawn, they have pulled back from funding these to the levels that they would historically fund those communities. Taxation gets pushed down to a local level. As government funding get pulled back, the taxpayer still pays. They increase their property tax; they increase the tax of water and sewer deliveries; they increase these to recover, because you have to keep a community.

I know communities in my district now who do not owe a cent, have taken out street lights this year because they cannot- there are so few people there, you have to do something. You cannot cut out garbage collection. You have to plough the roads to a certain extent, so what do you do? You take out street lights.

AN HON. MEMBER: ( Inaudible) garbage collection?

MR. SULLIVAN: What about it? Are you going to get that straightened out, I wonder?

AN HON. MEMBER: ( Inaudible).

MR. SULLIVAN: I have had discussions with some people in my district who realize that we need to look at shared facilities. Some people in my district are sharing facilities now, of course. Two of the larger towns are Bay Bulls and Witless Bay. Witless Bay has a fire department that provides the service. Bay Bulls has the dump. We have the Towns of Port Kirwan, Fermeuse, Renews, share on a cost-shared basis the dumps, the fire department, on a pro-rated basis, based on their ability and things.

There are major concerns with landfill in the Trepassey area, and the minister might know that something has to be done in that area. It is almost a barren area up there in areas, and landfill - you have garbage out there. There are places that have outlived their usefulness there. They cannot burn there because the incinerator is not functional. Whether the teepee incinerators are the thing, well, what is the alternative? We need solutions. We need to get solutions to a lot of things.

I have spoken with the department and with people of the town, and arranged even in the minister's department now where the town took over a dump in another area in my district from a private person. I spoke with them, and they got some assistance there last year or the year before last on the clean-up, to at least do the things that they would have to do to increase the lifespan of that dump, knowing full well in the future that something has to be done, within several years now, because otherwise we are going to have a major problem.

That is something that we have to be planning ahead. We have a great environment out there, generally, regardless, a very pristine environment, but the time is coming. Those long-term plans have to get put in place. They have to be done in such a manner that - you cannot expect Trepassey, people up there, to bear the cost of thousands of dollars, going long distances, and having to finance it out of their town, that they cannot afford to do. There have to be levels.

Maybe people buying those compactors and trucks can collect at distances, and do more regional collections. Whatever the case may be, I think communities out there are receptive to doing things that need to get done, that can be collective in cooperation. There are a lot of -

AN HON. MEMBER: ( Inaudible). Thank you for your honesty.

MR. SULLIVAN: Alright, thank you. I appreciate the vote of support. I am planing on running up there again, I tell you. Whoever wants to come on, let them come on. Whatever happens, you pick up and go forward, whatever the result may be. That is the way I look at it. I do not worry about what the next one carries. I just go on every day and do what you are supposed to do. Then you should not have to worry. If you do well, fine. I wish whoever is there the best of luck in what they have to do, and they will get cooperation from me, basically. That is my philosophy on it. I think anybody up there will tell you that.

AN HON. MEMBER: ( Inaudible).


AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: That is it. People run against me. I ran against three different people, one twice. I go on and do my thing. I do not bother what they do. They can say what they like about me; I do not respond to it. I just go on continuously.

Anyway, that is a little off the topic. We were talking about the environment, and it is an important part in planning a budget. I really think there has to be something move a little more aggressively. We have been talking about this for a decade, since I came in here anyway, nine years. We have been talking about it, and I have not seen anything get done. We will judge this minister on what he accomplishes. That is one important area that I think we need to look at. Another area, I guess, in that department, while we are talking about it, is the recycling area.

My colleague made some very important points here. The higher the return to consumers of products, the greater incentive to recycle. If you want to get the maximum levels, you have to pay the better price. My colleague and I firmly believe that if you give them a high enough return, and you put it up front - if the return is high enough people will, if it is meaningful, recycle it. It is accepted in many areas.

I visited Florida and other areas there. You see people with the different bins in those condos and apartments, all to put your different things in, whether it is papers or whatever, all bundled and put separately. We have to look at the future and at some point in time - just to illustrate, I watched a story a few years ago where they took a phone book out of a dump in Toronto - back years ago - it was there twenty years and it had hardly changed; very little change in twenty years. They hardly ever disintegrate. If you look at a lot of this, just the masses going into the landfill - and they are going there. At some point, if we could reduce all that paper, the tins, the larger metals and so on - there is a certain amount of screening done on that now, to get those heavy metals and so on out of those landfills.

We looked at recycling, and what we can recycle. We can't do it fast enough. The crunch is going to come, and the cost of doing it later will be much greater. We have to deal with the problem we have, along with trying to get a solution to it in the future.

Landfills, and what they are going to do. I am not sure. I have been told by the department that the teepee incinerators are not an acceptable thing, but what do you if you have only open land and there is no place to dump something? Do you let it blow all over the countryside and dump things continuously, or do you burn it and eliminate it? What can you do?

AN HON. MEMBER: (Inaudible) incinerator by 2008.

MR. SULLIVAN: Well the one in Trepassey is not working. The one in Trepassey is eliminated now because it is not working. The recourse for getting rid of garbage up there is not the most pleasant. I know they have written letters to the department. They have had correspondence back and forth for the last two years on that issue and still nothing has changed since.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: I wish them luck. I wish them the best of luck.

What is happening now? Are they looking at the Avalon as a certain number of regions? Not just one, but maybe more than one site, or one site?

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Well if some areas have to go long distances I think there has to be some type of plan that is going to allow somebody who is farther from a site to be able to have some absorption of cost to get to that site.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: That is a concept that I think will fly because a lot of these areas - it is a bit of a headache, a bit of an eyesore. They have to have some maintenance in those sites working there. It is an expense that would be saved on the town too because if you have one site you will probably get more economies in your personnel, labour and those costs, and it might be a little easier on the taxpayers.

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Would it be a site like a gate site, like heavy metals down at Robin Hood Bay would be?

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Yes, you would go to that site. All to the one site, and it would be directed to the appropriate areas.

AN HON. MEMBER: Yes (inaudible).

MR. SULLIVAN: Yes. Can that tie in with the recyclers too?

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Yes. I think we need to speed up the process of what is happening overall there because the clock is ticking. We will judge now - we will judge the minister. I will give you a report whether it is from an A to an F at the end, and give you a report on what I think your performance is. If it is good I might not say it here. I will just tell you.

We have a chance to hit environment. That is that much less when I get to that.

AN HON. MEMBER: Are you through that first paragraph yet?

MR. SULLIVAN: I started at page one in the Budget. I did not ask a question on page one. I got to page two, and I am just turning to page three now.

MR. J. BYRNE: How many pages all together?

MR. SULLIVAN: That is budgetary deficit. It looks more like an EKG to me. The pulse of the government goes up and down, and fluctuates there. I think her blood pressure is up on this one. The minister's blood pressure has gone up now. It is hitting about 180 on this one. That is her systolic is it?

Now we will get down to our fiscal framework; the deficit.

Oh yes, the Member for Bay of Islands is back, I have to say this point. I say to the Premier, he asked me a question but he left; and the Member for Trinity North is going to tell him. I have to tell him this before I get to my next item. Hang on, he has to hear the Premier. I cannot interrupt him when he is near the Premier because he might not be parliamentary assistant tomorrow if he does not listen. He might get the flick. I know the people of Bay of Islands are going to give him it the next time.

The Member for Bay of Islands asked me a question but before I got to answer, he ran. I gave it to Trinity North. He asked me: What was the deficit in 1989? I said I have it right here. I have it for every year. What is the debt? Before I could answer he rushed out the door. The Premier called and he went running. The last time I saw a parliamentary assistant who ran that fast was the Member for Cartwright-L'Anse au Clair - it used to be Eagle River then - the former one to a former Premier here in the Province, and he ran himself out of the job. Now don't you get too close to the Premier of this Province. This could be a problem.

I will get back to the answer to your question. In 1989 the total public sector debt, based upon the budget that was filed by the government of Clyde Wells in 1990 for the previous fiscal year, was $4.845 billion -

MR. JOYCE: That is not what I asked you.

MR. SULLIVAN: Wait until I am finished. I will answer those other questions too. Let me answer them one at a time.

Today, the total public sector debt is $7 billion. A 45 per cent increase in the twelve years since you became a part of the Premier's office and worked for him in 1989. We have increased the deficit of this Province, the debt, by 45 per cent. No wonder we are spending between $500 million and $600 million a year on interest payments to try to pay the bills of this Province. Now, what is your next question?

AN HON. MEMBER: What did you say earlier, don't take responsibility (inability).

MR. SULLIVAN: Don't take responsibility? Well, they don't want to talk about responsibility. Do you know what Dwight Morrow said about that? Any party which takes credit for the rain must not be surprised if its opponents blame it for the drought.

Robert Frost defined a Liberal. Here is how Robert Frost defined a Liberal: "A liberal is a man too broad-minded to take his own side in a quarrel." Can you imagine? Wasn't that Robert Frost an intelligent person?

MR. E. BYRNE: Loyola, that was close to the Premier's description of a Liberal on (inaudible).


MR. SULLIVAN: Listen, the Minister of Finance has been telling me all along to tone it down. Today she wanted me to sing out louder. Do you want that one again? Robert Frost said: A liberal is a person who gives straight answers and real solutions. No, seriously, he said: "A liberal is a man too broad-minded to take his own side in a quarrel."

Woodrow Wilson, here is another one. This a good one. Woodrow Wilson said: The way to stop financial joyriding is to arrest the chauffeur, not the automobile. Anyway, I have some others for later. I do not want to give them all at the same time.

The Member for Bay of Island; he did get elected in 1989. He did come into the Premier's office. We had a total public sector debt - he wanted to know - was $4.845 billion. Today, he is still in the Premier's office, twelve years later, and our debt has risen by 45 per cent. I do not know how much of that we can contribute to him or attribute to him.

MR. J. BYRNE: What is it up to now, seven point what?

MR. SULLIVAN: It is $7 billion now.

MR. J. BYRNE: $7 million.

MR. SULLIVAN: It is a big debt.

When you were gone they were trying to find out how much debt was attributed to PCs, but I told him back when Joey Smallwood was Premier, in one fiscal year alone we spent 40 per cent more than we took in in revenues. Can you imagine? Today, if we take in $3.5 billion in revenues, for example, that is equivalent to spending $1.5 billion more; spending $5 billion. Can you imagine at that per cent we would have a deficit in one year of $1.5 billion. Can you imagine the rate at which that man spent? What surprises me is how he got away with it for twenty-two years. That is the problem.

AN HON. MEMBER: Who? Who? Who?

MR. SULLIVAN: I will leave that issue alone.

MR. J. BYRNE: You are trying to sing a song over there, are you, or what?

MR. SULLIVAN: I thought he was practicing being an owl. He is coming out. It is getting dark now, he will soon be out.

Did you have another question you wanted answered, Member for Bay of Islands?

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: You are not from Bay of Islands. Don't get excited. Wait your turn back there. I answered yours. Give him a chance.

AN HON. MEMBER: (Inaudible).


AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: To who? What committee? What is that? I don't know what you are talking about. That is not related to the House. You can ask him that. You will have to ask him that. If you ask me, I would like to ask you when you are going to apologize for driving the debt of this Province up by 45 per cent. Now, you stand and admit that you are ashamed for having done it, you apologize to the people of the Province, and you will make sure, at the rate you are going, you will get defeated the next time so they cannot drive that debt any higher. Will you apologize for doing that?

Now, we were getting back to the deficit. Last year -

AN HON. MEMBER: (Inaudible).

MR. SULLIVAN: Listen, you are going to have to get consistent in your answers. One minute you are this and one minute you are that. She is up and down like a yo-yo, cannot hear me one minute and I am too loud the next.

AN HON. MEMBER: I can't hear you.

MR. SULLIVAN: What? What did you say? She is up checking out those seats up there.

We had a major thing here in the Budget Speech, which said, the deficit for 2000-2001 is not as bad as we thought. It is at $32.7 million, so it is $2 million less. That is not what our basic requirements on borrowing were. That is how you structure the budget.

If you are going to take that sinking fund that is used for debt redemption, and you are going to count that as revenues, it gives you the impression that our accounts are going to be that much less. You can apply for debt redemption, apply to debt, and then you would have less showing on your borrowing line as opposed to shifting it over in your ledger under revenues. It distorts the total picture, I might add.

Now we are talking about additional expenditures, year end investments. I asked the minister earlier today, and I did not get an answer from her. She is here now. She might have the answer now because I saw her running up to the acting minister, parliamentary secretary, assistant for health, trying to get the figures. I am stilling wondering why, since last September - I probably know the reason why, and I will not say. I will not make that presumption, but somebody there knows what I am talking about, because the same answer that I told one of my colleagues was given to me, exactly the same answer, by somebody in authority. I will leave it at that; I won't get into that.

Apart from that, I am wondering why, when half a billion dollars was available for us to get a share of that, a fund for medical equipment, diagnostic ones, outdated equipment, equipment circuiting out, and there were people whose lives were put in danger even in the past - and I have raised the issue here in the House before - because defibrillators shorted out when they needed to use them, because they were not serviced, the equipment was so far outdated and gone, why we would not available of that fund last September when we could get our chunk of that. On March 28, it was reported that Health Canada said that only British Columbia, Alberta, Manitoba, Saskatchewan, Ontario and Prince Edward Island accessed that fund.

Why didn't our Province access that fund for over six months when there are people in this Province actually dying in lineups? I could give you names, if you want to know someone who died while they were waiting in my district, died on the floor in their kitchen. I know others, and I spoke to doctors who have gone public on this too. One on the West Coast, I have stated, why we would not access this funding there and be able to get money flowing, get equipment in as quickly as possible, and allocate this out to be able to alleviate some of the suffering and waiting by people of the Province. That is not an acceptable answer, to avoid that. I asked, did it happen? I didn't get a response. I want to know if Health Canada was right on this, that they haven't accessed it. On March 28 they reported. I have an article there on it. I didn't get an answer. When we are looking at expenditures, we are looking at needs here in our Province, we have a fund that is out there that is not costing us anything, and we did not bother to access that fund at the time, it is not an acceptable thing.

They are major concerns that we have. I only touched the tip of the iceberg today on some of the things on health care. We only got through some of the major financial things today, Canada Health and Social Transfer, equalization and things, along with a few other things, but there are hundreds of other items here. Over the course of the next few months I am sure I will get to address them under my unlimited time in Budget debate.

Having said that, Mr. Speaker, I will adjourn debate today.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER (Mercer): It is moved and seconded that we now adjourn debate and that this House do rise and we meet tomorrow at 2:00 p.m.

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