The House met at 9:00 a.m.

MR. SPEAKER (Lush): Order, please!

Before proceeding on with our routine business, on behalf of hon. members I would like to welcome a couple of groups of students to the public galleries this morning. Firstly, we extend a welcome to sixty Level II students from Ascension Collegiate, Bay Roberts, in the district of Port de Grave. They are accompanied by their teachers, Mr. Edward Neil and Mr. William Drover. Secondly, fifteen students from First Baptist Academy, Mount Pearl, in the Waterford - Kenmount district, accompanied by their teacher, Mr. Kirk Pickett.

SOME HON. MEMBERS: Hear, hear!

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

MR. R. AYLWARD: Thank you very much, Mr. Speaker. I have a question this morning for the Minister of Finance. The government again this year has frozen the public sector pensions for 1992-1993. That will be three years in a row that the pensions have been frozen and the value of their pensions has gone down about 12 per cent to 15 per cent. I ask the Minister: will he reconsider the freeze on the public service pensions this year and see if there is some kind of an increase that can be allotted for the pensioners for this year?

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

DR. KITCHEN: Mr. Speaker, this Province at the moment is in a pretty desperate situation with respect to many people's incomes next year. The public servants' wages have been frozen, the fishing industry looks bad. We all have to share the pain. Even I will acknowledge what the hon. member has said. Yet our public pensioners are being paid according to their pensions. We have ceased ad hoc indexing. We are looking forward to an appropriate indexing program for all public servants, teachers and others, but these programs have not been put in place this year because of the financial situation. Hopefully they will be put in place shortly.

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

MR. R. AYLWARD: Thank you very much, Mr. Speaker. According to the Auditor General the average salary or pension of the public service pensioners is about $8,000 a year. If you include teachers in that average, according to the Auditor General, it is about $10,000. Doesn't the minister think that these pensioners would be a special case and they should be exempt from the wage freeze that is going on in the public service, or the freeze on pensions?

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

DR. KITCHEN: Thank you, Mr. Speaker.

Mr. Speaker, the member's figures are quite inaccurate and I should point out that any pensioner whose earnings are less than $11,000 is not subject to income tax or anything of that nature so that is something to keep in mind but, the figures that he quotes, I am sure are inaccurate. What happens is that sometimes people have very short service with the public service; they may have five years or six years or ten years and they go out on pension, they may go off to other jobs and other work and that brings down the average, but the usual public servant who is out there after serving a lifetime service with the government is not on such low pensions unless it happened many, many years ago.

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

MR. R. AYLWARD: Thank you very much, Mr. Speaker.

These figures are not my figures, they are the Auditor General's figures. I did not make them up, I got them from the Auditor General's Report.

Mr. Speaker, this year the government provided a small increase to recipients of social assistance of 2.2 per cent, and it is well-deserved, they needed to get it; they needed more than that, but because the average pension of $8,000 or $10,000, whichever figure you want to use for the public service pensioners in this Province, is so low, do you not think that they are equally needy of a raise as the social service recipients? Even a 2 per cent raise would help to keep up with part of the inflation for last year, at least.

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

DR. KITCHEN: Mr. Speaker, the hon. member is distorting things. Anyone who is sixty-five and over, in addition to getting his public service pension gets his old age pension and there are other benefits as well. It is time for the hon. member to put the facts out rather than to distort the picture by quoting inappropriate

statistics no matter what the source.

MR. SPEAKER: The hon. the Member for Kilbride, on a supplementary.

MR. R. AYLWARD: Mr. Speaker, I find it strange that the Minister of Finance of this Province does not trust the figures of the Auditor General, so, I will try to get a figure that is probably more accurate. Does the minister receive a pension?

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

DR. KITCHEN: Mr. Speaker, I shall not discuss my personal affairs in this House of Assembly.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

The hon. the Member for Kilbride.

MR. R. AYLWARD: Mr. Speaker, can the minister confirm that the Minister of Education is receiving a pension?

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

DR. KITCHEN: Mr. Speaker, I have no intention of discussing anyone's personal affairs in the House of Assembly.

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

SOME HON. MEMBERS: Oh, oh!

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

Order, please!

MR. R. AYLWARD: Thank you very much, Mr. Speaker.

The public service pensioners in this Province are receiving $8,000 to $10,000 and from my information, we have at least two ministers in this House receiving pensions from that same fund who are receiving another $100,000, no wonder they cannot relate to a raise of -

MR. SPEAKER: Order, please!

MR. R. AYLWARD: - 2 per cent for the pensioners in this Province.

MR. SPEAKER: Order, please!

The hon. member is on a supplementary, but the hon. member is now giving a speech so I will ask the hon. member to get to the question please.

MR. R. AYLWARD: Mr. Speaker, I ask the minister: since he is so concerned that the figures I am using are inaccurate, just tell this House of Assembly what his pension is and what the pension of the Minister of Education is, then maybe I could get some better figures and, maybe while he is at it he could suggest why this government is so callous towards the pensioners in this Province?

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

DR. KITCHEN: Mr. Speaker, thank you very much.

This government is not callous towards pensioners. This is a Liberal Government and in our last Budget, the Budget we delivered last week, we did a lot of things for pensioners, a lot of things for senior citizens of all kinds. We opened up hospital beds for senior citizens, we opened up eighty-six, was it? Eighty-six new beds in various parts of the Province for chronic care which the Province so desperately needs, in a time when we are so poor. Not only that, Mr. Speaker, we have a drug program in this Province by which senior citizens pay the cost of the pharmacist's services, but the government picks up the cost of the medicine.

We will be opening up soon, extra senior citizens apartments and things like that, which the Newfoundland and Labrador Housing is doing. Even in these hard times we are doing an awful lot for senior citizens in this Province. I might also mention to the hon. member that every senior citizen in this Province, every person, receives a special tax break from the Government of Newfoundland via the income tax system by which senior citizens get a break of $3,482 and another $1,000 for any pension income they might get of $4,482 tax exemption which no other citizen gets and that costs this Province virtually $500 a year for each person. That is another little break we give every senior citizen in this Province.

AN HON. MEMBER: For each person.

DR. KITCHEN: Every person.

So, Mr. Speaker, it is wrong for hon. members opposite to try to pin this government as being insensitive to the needs of civil servants and pensioners. So what we are doing -

MR. SPEAKER: Could the minister clue up in a half sentence or so?

DR. KITCHEN: Thank you, Mr. Speaker.

No, Mr. Speaker, it would be completely wrong for the hon. members opposite to try to paint this government as being insensitive to the needs of pensioners.

SOME HON. MEMBERS: Hear, hear!

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

MR. R. AYLWARD: Mr. Speaker, will the minister also confirm then that while he is saying this government has done so much for pensioners that the school tax, which is being eliminated this year come June, is being replaced by an increase in income tax, and for the first time in the history of this Province people over 65 years of age will have to pay a school tax or a tax in substitute of a school tax?

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

DR. KITCHEN: Mr. Speaker, we have eliminated the school tax and that is a good thing.

SOME HON. MEMBERS: Hear, hear!

DR. KITCHEN: I know the hon. members want to reinstate the school tax. I know they do. If it should ever happen, and God forbid they do get re-elected, we will get the school tax back.

AN HON. MEMBER: (Inaudible).

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

MR. WINSOR: Thank you, Mr. Speaker. I would like to ask the Minister of Finance a question, but I will have to go to the Minister of Employment because I enjoy him when he is answering.

Mr. Speaker, last fall when the UI rate was at around 17 per cent, the minister then chose to implement a job creation program for this Province. This year with a projected UI rate of over 20 per cent the minister has chosen to do nothing. Can the minister explain why he chose to implement a program last fall at 17 per cent, and now this year when it is 20.4 projected he chooses to do nothing?

AN HON. MEMBER: A good question.

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

MR. GRIMES: Thank you, Mr. Speaker. As has been mentioned before that very same question has been asked in this House on a number of occasions, and has been answered on a number of occasions. I will try to give the same answer. It is not a matter of doing nothing. It is a matter of planning, which the members yesterday in their speaking in the House were suggesting that the government should do. We have been in consultation with the federal government to make sure that anything that is done in this Province is done in a complementary fashion so that we do not have two levels of government competing with dollars to try to have a positive impact on the people in this Province. We are now in the process of identifying more definitively by region and location where the real problems might be throughout the year, and at an appropriate time we have indicated that we feel that, as, when and if necessary, we will find a way, as we did last year, to implement any appropriate program.

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

MR. WINSOR: Mr. Speaker, I do not think the minister has to look very far to find where the need is, with a 20 per cent UI rate in this Province.

The minister has been talking about this for some time now, about a joint proposal with Ottawa to implement a job strategy. Mr. Speaker, where in this Budget does the minister address this by putting some dollars into this program, or is it going to be taken from another aspect of this program, or are we going to look for the same thing as last fall - special warrants? What kind of plans, and how much money is the minister prepared to put into a job creation program?

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

MR. GRIMES: Mr. Speaker, the same question was asked a couple of days ago and it was indicated quite openly to the group there is not, in this Budget, any heading or any line that says there will be a special job creation program for people in Newfoundland and Labrador this year. It is not in the Budget. There is nothing at this point in time that could have been put into a Budget. Much as the members opposite would know, when the federal government were faced with many of the same considerations on a provincial, on a country wide basis, when they brought down their Budget, indicated even though there were indicators that there was still going to be difficulties, they could not, within the Budget document, spell out exactly what was going to be done as the year went on. But they have indicated, and have indicated in meetings with us, that as they continue to monitor the situation, and as we continue to monitor the situation, as, when, and if appropriate means and methods will be found, as they were last year, in this Province where we put in place a $13.5 million program to adequately address the problems.

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

MR. WINSOR: Thank you, Mr. Speaker.

The Budget shows a reduction of nearly $4 million in job creation. Included in the $14 million there is some, I think, $3.1 million in the employment generation program. How much of that $3.1 million is going to be for projects that were started last fall, and how many new jobs will be created from this employment generation program?

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

MR. GRIMES: Yes, Mr. Speaker. If you want the exact numbers, I will have to take the time to get them, because I do not have them here available at my fingertips. We have analyzed and accessed that program on a couple of occasions in a preliminary fashion and the final numbers are still coming in. I will undertake, Mr. Speaker, to get the exact numbers, as indicated in the question, for the hon. member if that is what he would like.

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

MR. WINSOR: Thank you, Mr. Speaker.

A final supplementary. This program has been in place now for nearly four years. It replaced a previous similar type program. Can the minister tell me now how many full-time jobs have stayed as a result of this program that was introduced first in 1989?

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

MR. GRIMES: Mr. Speaker, yes, we will be able to do that. I will have to get the numbers, as I indicated, but there has been, in the first sixty-week program - which members opposite probably wouldn't understand because they never did anything that lasted that long; it was always a few weeks at a time. Because it was a sixty-week program and because it ran over three different fiscal years, the impact of even the first experience is only now being finally detailed within the department. We will get you the numbers, because the final impact of a sixty-week program, as members opposite would know, does run over three fiscal years for the government. I will get the information for the hon. member on the analysis of the very first sixty-week period and even give as much information as we can about the subsequent periods.

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

MR. TOBIN: Mr. Speaker, the teachers can't understand either, how the member turned on them so quickly.

I have a question for the Minister of Social Services. Today, 65,000 Newfoundlanders and Labradorians, or roughly 12 per cent of the population of this Province, are struggling trying to make ends meet, on some form of assistance, and the department's own estimates show that there will be a significant increase in the numbers this year. In view of the crisis, why has the department's budget been cut by $4.5 million, 3 per cent below the actual expenditures last year?

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

MR. GULLAGE: Mr. Speaker, in my ministry, we have to deliver services wherever in the department they are necessary. Those services have to be delivered. They are in place. The regional and district offices throughout the Province all have professional people, welfare officers and others, who are capable of delivering the services that are in the department, and we will have to speak to those needs throughout the year. Granted, we have an increase in caseloads. The social workers have demands upon them that are ever-increasing. We are, as I said in this House last week, 30 per cent over in caseload, over a year ago, so we will have to respond to the needs as the needs arise, and if, in fact, the caseloads continue to increase, we will have to respond.

MR. SPEAKER: The hon. the Member for Burin - Placentia West, on a supplementary.

MR. TOBIN: Mr. Speaker, I know what the minister is saying, but last year the Budget estimated expenditures of $146 million but the department spent $159 million, that is $13 million more than was budgeted last year. So, given the rapidly increased demands for social assistance and services, does the government seriously believe that it can keep spending this year below the amount they spent last year?

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

MR. GULLAGE: Mr. Speaker, we are budgeted on current account, and on capital account for that matter, for the needs as we see them in the forthcoming year. The budget, of course, has to be looked at as we proceed through the year, and we are doing that month by month. If we see that the needs are increasing - of course, as you know, we are in a cost-sharing arrangement with a lot of our programs with the federal government - the federal government and the provincial government will have to respond to those needs.

In many ways, the services we provide are open-ended to the extent that we have to provide assistance and we have to provide programs and benefits for our clients, whichever department they happen to be in or whichever division of the ministry they happen to be in. Those programs have to be responded to. So, if our caseloads increase in social assistance or in any other area of assistance, we have to respond with dollars in the budget, whether it be strictly provincial dollars or a combination of federal and provincial dollars.

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

MR. TOBIN: Mr. Speaker, there is no doubt it will be a combination of federal and provincial dollars, because under the plan it is shared 50/50 in any case.

Mr. Speaker, the minister says that his caseload has increased by approximately 30 per cent over last year. The big cut in the department's budget is in the employment opportunities funding which has been cut by approximately 30 per cent. The caseload has increased by 30 per cent, yet they have cut the budget for employment opportunities by 30 per cent, Mr. Speaker, down to $16 million from $22 million. Is the government giving up on an effort to keep social assistance recipients attached to the work force, or would they rather see people on social assistance and not working, Mr. Speaker? What is the situation? When your caseload increases by 30 per cent and your revenue drops by 30 per cent for employment opportunities, how do you propose to handle that?

MR. SPEAKER: The hon. the President of Treasury Board.

SOME HON. MEMBERS: Oh, oh!

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: Mr. Speaker, the reason I am answering is it is not a question that relates directly to something that happens in social services, but is a -

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

MR. BAKER: - but is a budgetary expenditure measure.

Mr. Speaker, we have come to realize, and it took us a while to realize what was happening, that what the previous government used to do was put a certain amount of money into this program, certain numbers of millions of dollars, and announce all this money for social assistance recipients and so on, and instead, they would then hire permanent staff in the Department of Social Services. For years, I believe the salaries of over a hundred full-time employees were being carried in that particular vote. We have discovered that, and what we have done is simply taken that salary vote that was hidden away in the heading the hon. member is talking about and moved it into the regular salary component. Therefore, there is no drop in that program, Mr. Speaker.

SOME HON. MEMBERS: Oh, oh!

MR. FLIGHT: You were the minister, Tobin, (inaudible).

MR. BAKER: You don't like the truth.

AN HON. MEMBER: You're learning from the Premier (inaudible).

MR. TOBIN: You were afraid 'Eric' was going to tell the truth, that's why you (inaudible).

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

MR. PARSONS: Thank you very much, Mr. Speaker. My question is to the Minister of Municipal and Provincial Affairs. I think we all know, when Metro Board was disbanded most employees were transferred to the City, I think, with one exception. One employee was transferred to St. Thomas'. They were part of CUPE. Even some of the management people received severance pay packages. There were about twenty people from NAPE who went to the regional services board and they were disqualified from receiving severance pay. I want to ask the minister to tell this hon. House why.

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

MR. HOGAN: No, Mr. Speaker, they were not denied severance pay. The details of the arrangements that were made in each individual case I can't recall but, generally, what happened was that when the employees went from the employ of the managers of Bay Bulls - Big Pond and the water treatment plant out there, when they were transferred to one of the other incorporated bodies, their benefits transferred with them. I have had representation from a number of employees who indicate this is not so and that there is a problem with it from CUPE and NAPE. I have undertaken to ask officials of the Department to get together with NAPE or CUPE or the employees in question, examine it and come up with a resolution to it.

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

MR. PARSONS: A supplementary, Mr. Speaker. We know there is sort of a rare circumstance here, in that it was not in the contract of the people who were employed by that water service; because they thought it was ongoing, there was really no need for it to be in their contract. I want to ask the minister: Since this is a rare circumstance, and it was not in their contract, would he consider giving them their severance pay?

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

MR. HOGAN: I thought I explained that quite well for even my good friend from St. John's East Extern to understand but I cannot seem to get it through to him, that there are anomalies in this situation with the transfer of employees to different situations from those they were in.

AN HON. MEMBER: (Inaudible).

MR. HOGAN: Can I have protection from the rabble, Mr. Speaker? Interruptions, when you are trying to explain something -

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

MR. HOGAN: - to the hon. the Member for St. John's East Extern -

MR. SPEAKER: I ask the hon. minister to get on with the answer, please.

MR. HOGAN: - you need all the silence you can get. Because he can't understand stuff anyway.

Anyway, where was I? For employees who have been transferred to different jurisdictions, there are different mechanisms to put in place to handle the transfer of employee benefits. That is what we are attempting to do. I know the problem, I am dealing with it, and the department is talking to both unions and the employees involved to see if it cannot be resolved in a mutually satisfactory manner, Mr. Speaker.

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

MR. PARSONS: A final supplementary, Mr. Speaker, but a different subject. I want to ask the minister what I have asked him these past couple of days - to change the MOG. The Town of Pouch Cove has suffered $68,678 in lost revenue. I ask the hon. minister this morning: because of what that is doing to those small towns - in particular, I speak of a specific case this morning in Pouch Cove, where that is lost revenue, revenue that they cannot get back. Would the minister consider some help for that town and, indeed, again change the municipal operating grants system?

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

MR. HOGAN: Mr. Speaker, as I pointed out to the hon. member privately and in this House, all programs in the department, including the new program or whatever he calls it, are under review constantly, and if there are hardships experienced by various municipalities and if it is a universal hardship we are taking a look at it.

I mentioned to the House, I believe yesterday or the day before, that the department is working in conjunction with the Federation of Municipalities and with the Administrators' Association and we have these programs under constant review. If what the hon. member says becomes obviously true, then corrective action will be taken, but if it doesn't become true, then we will not touch it.

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

MR. HEWLETT: Mr. Speaker, a question for the Minister of Mines and Energy.

My sources indicate that we are getting down to the crunch on Hope Brook as to whether or not that mine is a go or not. I am wondering if the minister could indicate whether there is indeed any hope for Hope Brook at this time?

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

DR. GIBBONS: Mr. Speaker, there was further progress this week but as of now, when I stand on my feet, it is not all finalized yet. I am still quite hopeful. Personally I hope it can be resolved and we will see people back to work next week, but we are not quite there yet. So we have to wait and see if everything is going to get finalized.

MR. SPEAKER: The hon. the Member for Torngat Mountains.

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

My question is to the Minister of Health. In the 1991 Budget an amount of $800,000 was provided to plan and undertake the design work for a new hospital in Happy Valley - Goose Bay. Would the minister advise if the design work has been completed?

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

MR. DECKER: No, Mr. Speaker.

MR. SPEAKER: The hon. the Member for Torngat Mountains, on a supplementary.

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

I tried to look through this year's Budget, Mr. Speaker. I will ask the minister, Mr. Speaker: Are there any monies committed to the completion of this design work and the start of construction of the new facility?

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

MR. DECKER: Mr. Speaker, the Department of Health, in co-operation with other departments, is preparing a five-year plan and I have no doubt that the Melville Hospital will be included in that plan.

MR. SPEAKER: The hon. the Member for Torngat Mountains.

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

I wonder would the minister advise this House if he is waiting for the by-election call in the Naskaupi District for Mr. Ed Roberts to make some of these announcements?

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

MR. DECKER: No, Mr. Speaker, it has nothing to do with the by-election. If we could have saved the $100,000 that the hon. member wasted on the brass faucets in the washroom, Mr. Speaker, we would be able to do more with hospitals in this Province.

SOME HON. MEMBERS: Hear, hear!

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

MR. HEARN: Thank you, Mr. Speaker.

My question is to the Minister of Education. I wonder will the Minister tell us if he expects tuition fees at Memorial University and the other post-secondary institutions to increase again this year?

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

DR. WARREN: Mr. Speaker, the institutions make these decisions. I have not been informed of any increase, but I would expect that, consistent with the last few years and consistent with what is happening across the country, that there may be increases this year in tuition fees at these institutions.

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

MR. HEARN: A supplementary, Mr. Speaker.

The enrolments at the university have been growing around 8 per cent a year and with the frozen budget that means government funding has been effectively cut by $100 per student. Is it not a fact that to make up that amount of money tuition fees will have to increase by approximately 15 per cent?

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

DR. WARREN: Mr. Speaker, I think I would like to correct the information that the hon. member gave to the House about what is happening to budgets this year. The university budget has been increased slightly. The university budget has been increased in the area of operational funds by approximately $1 million and, Mr. Speaker, in the capital area the university gets $6.5 million, $2.5 million more this year than they got last year. They got $4 million for furniture and equipment. So we feel, Mr. Speaker, that the university has been treated fairly this year. I would not anticipate what their decision will be with respect to increases in tuition fees this year.

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

MR. HEARN: My final supplementary, Mr. Speaker.

The budget increased, as the minister said, the operating grant by 1 per cent, virtually all of that increase will be taken up with the higher payroll tax, higher workers compensation premiums, higher Unemployment Insurance premiums, not to say the cost of living - inflation. How will the university cope? Will there be further cuts in programs or will there be limitations on enrolments?

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

DR. WARREN: Mr. Speaker, the hon. member must understand that the university is like every other institution, agency or department of government in these difficult times, we have to live with less. We have to spend smarter. All educational institutions must do it as well as health and social services, and all governments in Canada are doing it. I am sure the university will do what is right without impacting negatively on the lives of students. We believe education is vital to the future of this Province and the university authorities do, and they will do the right thing I am sure.

MR. SPEAKER: Question Period has expired.

Before going on to the next item of business, in view of the fact that we have a large number of students in the gallery the Chair would like to clarify an awkward utterance made a little earlier in Questions Period. I advised the hon. the Minister of Finance to finish in a half sentence. The Chair does not want to be guilty of desecrating the english language. What the Chair was thinking of saying was would the minister finish in a half minute. It was a matter of the motor skills getting ahead of the cerebral skills, and I could not pull back. What the Chair obviously meant was for the minister to finish up as quickly as possible, with precision and economy of language.

SOME HON. MEMBERS: Hear, hear!

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

MR. DECKER: Mr. Speaker, on January 27 the government appointed Mr. John Clarke, Chief of Security in the Department of Works, Services and Transportation, to investigate some complaints at MCP. I am pleased today to table Mr. Clarke's report for the information of members of the House.

You will note that some references in the report have been deleted or highlighted to replace names and references which, if made public, could infringe upon the privacy of certain individuals, private business concerns, or upon security and confidentiality, Mr. Speaker.

MR. BAKER: Motion 6, Mr. Speaker.

MR. SPEAKER: The hon. the President of Treasury Board.

Motion, the hon. the President of Treasury Board to introduce a bill, "An Act To Extend Restraint of Compensation In The Public Sector Of The Province", carried. (Bill No. 17).

On motion, Bill No. 17 read a first time, ordered read a second time on tomorrow.

MR. BAKER: Motion 7, Mr. Speaker.

Motion, the hon. the Minister of Mines and Energy to introduce a bill, "An Act To Amend The Public Utilities Act", carried. (Bill No. 18).

On motion, Bill No. 18 read a first time, ordered read a second time on tomorrow.

MR. BAKER: Motion 1, Mr. Speaker.

MR. SPEAKER: Motion 1. I think that is the continuation of the adjourned debate on the Budget.

The hon. the Member for Mount Pearl.

SOME HON. MEMBERS: Hear, hear!

MR. WINDSOR: Thank you, Mr. Speaker.

When I was so rudely interrupted by Question Period yesterday I was just starting to get into full flight, exposing the fraud and the deceit in the Budget. I am having a great time showing the people of this Province some of the things that are hidden in the depths of this particular document - the fraudulent manner in which the Minister of Finance tries to foist these tax increases on the people of the Province while taking away some of the most essential services in the Province.

I can understand why the Premier would leave. My stomach churns every time I think about the Budget too, Mr. Speaker.

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: There is a little good news in everything, Mr. Speaker.

Just to start out by reiterating the basic thrust of what I was saying, this particular document fails in meeting its own requirements. It identifies the problems in the Province well. It identifies the weakness in the economy. It identifies the fact that the economy is declining. The minister projects that the economy will decline this year, and he fails to do anything about that. The minister projects that unemployment will increase by 2 per cent, and he fails to do anything about that. In fact, he fails badly to do anything about that. My colleague mentioned a few moments ago, funding in all of the employment programs have been decreased drastically this year.

Having looked at those factors, being aware that the Province is faced with just those two alone, you would think that this government would come up with a positive plan to react to that. They have told us once again that there will be a great economic strategy plan unveiled in the near future. How long have we been waiting for that? For three years we have been waiting for a great economic strategy plan. To date this government has failed to produce such a plan. They have spent tens of millions of dollars on economic recovery commissions, on strategy commissions, on economic advisory councils, a whole host of agencies and groups and advisory committees that they put together to study the economy. Well, Mr. Speaker, they can study it to death, it will not change the economy. It is time for this government to stop studying and start acting and doing something to improve the economy of this Province.

We are all aware that we are involved in a national recession, but we cannot blame all of our problems on Ottawa or the national recession. This government has to take it squarely on its own shoulders, that they have failed miserably, Mr. Speaker, to deal with the economic situation in this Province. In fact not only have they failed to deal with the problem, they by their own actions are largely responsible for making these problems even more serious. At a time when unemployment is up, at a time when businesses are weak this government brings in the worst tax it could bring in, a payroll tax. Now again this year they have increased that payroll tax and added it to tens of thousands of small businesses that have payrolls between $100,000 and $300,000 a year.

You try to tell us that there are thousands of businesses now that will not pay any school tax. That is not correct. I think we showed yesterday quite clearly that there are very few of those 10,000 companies the minister referred who will not pay school tax, will not pay more tax.

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: Because they did not pay school tax, or they paid less school tax than - what did you say?

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: No, they did not pay school tax as an individual. They were better off. There are companies in this Province, small companies, proprietorships that own very little if any property, that based on the assessment of the property value paid less than $150 a year school tax.

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: No. But because they paid that they did not pay the personal school tax.

MR. GRIMES: That is not true.

MR. WINDSOR: It is true.

MR. GRIMES: That is not true.

MR. WINDSOR: It is absolutely true.

MR. GRIMES: That is not true! He would not know that. You should check that out again.

MR. WINDSOR: I checked it out with the School Tax Authority, and I am told by the School Tax Authority that there are individuals in this Province who paid no school tax because they had a proprietorship and were paying business tax and paid less than $150 a year.

Mr. Speaker, the fact that the minister says it is not true does not make it not true. I prefer to take the word of the School Tax Authority than the word of the minister.

AN HON. MEMBER: (inaudible).

MR. WINDSOR: That is right. He should know. Yes, former NTA president. You think he would know what was going on in school tax, but he does not know.

MR. GRIMES: You have to pay as an individual, and you have to pay as a business (inaudible) -

MR. WINDSOR: If you are a proprietorship then you are exempt as a person. That is from personal taxes.

MR. SPEAKER: Order, please!

The Chair wants to make hon. members aware that the Chair is aware of what is going on and wants to make hon. members aware of that. Hon. members know that it is not permissable to be asking questions in the nature that is now going on, but the Chair has to be guided by the member. If the member does not seem to object then the Chair permits it to go on. So the Chair just wants to make it clear to the members of the House that the Chair is totally aware of what is going on and is more or less being guided by the member himself.

The hon. the Member for Mount Pearl.

MR. WINDSOR: Thank you, Mr. Speaker.

I appreciate Your Honour's protection, but this is the only way that we can get ministers opposite to give us some information, to speak and to comment.

AN HON. MEMBER: And you love it.

MR. WINDSOR: I'm loving it. Yes, I love it. The minister will find out. I challenge the minister to check with the School Tax Authority and ask the School Tax Authority. If he finds out that I am wrong let him come back on Monday and tell us I am wrong. If he finds out I am right will he come back on Monday and apologise?

MR. GRIMES: Absolutely.

MR. WINDSOR: Alright. I will be waiting for that.

AN HON. MEMBER: He put the teachers on strike.

MR. WINDSOR: Yes, he put the teachers on strike, and then he -

AN HON. MEMBER: (Inaudible) since he became a minister.

MR. WINDSOR: That is right.

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: Neither did I. I was going to say something that would be unparliamentary, but I will not say it. I will not be drawn into that sort of tactic by the hon. Member for St. John's South.

Mr. Speaker, talking about the payroll tax, my friend for St. John's East Extern confirms what I just said. He is a small businessman. He pays the payroll tax, or he did, as a small businessman, and therefore he does not pay the personal one. You only pay it once. If you are a sole proprietor.

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: School tax, yes, school tax I'm talking about.

SOME HON. MEMBERS: (Inaudible).

MR. WINDSOR: School tax I'm talking about. I would not send you to the School Tax Authority to find out about the payroll tax.

AN HON. MEMBER: No, that's not the point. You won't send me to the School Tax Authority for anything in a couple of months because it won't be there.

MR. WINDSOR: Mr. Speaker, where did we get them this morning? Friday morning is not good for the ministers. It's too early in the morning for them. They are not used to getting out of bed before lunch, I can tell.

SOME HON. MEMBERS: (Inaudible).

MR. WINDSOR: Yes. Mr. Speaker, what this government has done is eliminate the school tax, and replaced it with increased taxation. Let us be very clear to all present. They eliminated $20 million of school tax on private individuals and increased it by $30 million of personal income tax. A 50 per cent increase. They have eliminated school tax on private businesses and they have increased that - they have eliminated $10 million school tax paid by private businesses, and they have replaced it by $15 million of payroll tax increases. In total they have replaced $30 million of school tax by $45 million of other taxes. That is the bottom line here.

The Minister of Finance can shake his head all he wants. It is good. Whenever he moves his head and says 'no,' we know he is not comatose over there. So that is an improvement. The fact is, taxation has increased dramatically.

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: Pardon?

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: A million dollars.

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: Six million dollars - this year. Yes, $6 million this year, and an extra $15 million next year, Mr. Speaker. That is how this government reacts to an economic crisis, to an unemployment rate of 20.4 per cent, the minister predicts. It is 20.1 per cent today. So he is pretty safe in predicting it will go to 20.4 per cent. To combat that he raises personal income tax, he raises payroll tax - which is a tax on employers for employing people - and in so doing he will eliminate thousands of jobs this summer, particularly for students. Thousand of jobs for students.

My friend for St. Mary's - The Capes told me he was talking last night with a fish plant owner in his riding who paid $2,500 last year in school tax, and that little fish plant will pay $7,000 this year. It doesn't matter that that company is losing money. The minister is going to take another $4,500 from that company. I quoted one last week that I checked with, a much bigger company, that paid nothing last year. It will pay $28,000 this year.

MR. GRIMES: Why did they pay nothing last year?

MR. WINDSOR: Because the fish plants were not taxable under school tax. Will the former president of the NTA go read something about what used to be the school tax?

MR. GRIMES: That's just the whole point, that is part of what was wrong with all (Inaudible) paying no tax.

MR. WINDSOR: No, but, you know, that -

MR. GRIMES: Other people paying taxes (Inaudible).

MR. WINDSOR: - that was a conscious policy decision to exempt resource based industries, because they are having enough trouble. We depend on our resource based industries to drive the economy of this Province. They are in enough trouble as it is without governments taxing them out of business.

AN HON. MEMBER: We put in place (Inaudible) -

MR. WINDSOR: When you put a payroll tax as you have now on the paper mills of this Province, that will cost those paper mills probably $500,000 a year, and those paper mills are barely surviving, and the local management are in the boardrooms begging the boards not to close down the paper mills in Newfoundland, when they are closing down other paper mills in their organization, that $500,000 could indeed cause that board to decide to close down that paper mill.

Now what kind of economics is that, Mr. Speaker? What kind of logic is it?

MR. NOEL: Do you think other business are not having problems too?

MR. WINDSOR: What kind of logic is that, Mr. Speaker? How does this government propose to get us out of the economic situation we are in with that type thinking? Where is the incentive for the paper companies to invest more in this Province? Where is the incentive for them to expand? Where is the incentive for them to close down another paper mill if their markets are declining and leave the paper mills in Newfoundland operating? Where is the incentive for them to modernize even further the paper mills?

MR. NOEL: (Inaudible). If Mount Pearl paid their fair share of taxes we might be able to reduce them elsewhere.

MR. TOBIN: Are you speaking on behalf of Government?

MR. NOEL: I am speaking on behalf of the people (Inaudible)

MR. WINDSOR: The hon. member, Mr. Speaker, speaks on behalf of no one and after the next election he will speak on behalf of no one.

MR. NOEL: The people of Pleasantville are nobodies, are they?

MR. WINDSOR: Mr. Speaker, I do not mind interjections from the opposite side when there is an intelligent comment that relates to the debate but when you get that kind of guttersniping from the Member for Pleasantville then I find that very disruptive and it adds nothing to the debate or the decorum of the House. I advise the hon. member that I have no intention of getting involved in that kind of foolishness with him.

DR. WARREN: Mr. Speaker, would the hon. member entertain a question?

MR. WINDSOR: Mr. Speaker, I would gladly entertain a question from the Minister of Education.

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

DR. WARREN: Mr. Speaker, I want to get back to his main point. He made a good point, there are additional funds being raised this year to replace the school tax. His numbers are wrong, as the Minister of finance indicated, but there are additional funds being raised to replace the school tax. We are not only replacing the school tax but we are adding additional funds. Now, these funds, Mr. Speaker, are going back into education. Most of these monies are going back into rural parts of this Province which have suffered for years and years and years inequity as a result of school tax. Now, does the hon. member understand that he is right-

AN HON. MEMBER: (Inaudible)

DR. WARREN: Mr. Speaker, I am serious. This is a serious question. The hon. member and I have had some good exchanges in the House and we are fairly frank with each other.

AN HON. MEMBER: Fairly frank.

DR. WARREN: We are. He is right, that we are this year at the same time we are replacing the school tax money, which is about $30 million a year, and for nine months is about $27 million, we are adding an additional tax to level up so that all schools in this Province will have basically the same amount of money available for operation and maintenance. Now, does the hon. member understand that we are levelling up so that every school board in the Province will get for operation and maintenance basically the same amount as the highest school board will get next year? Does the hon. member understand that?

MR. SPEAKER: Before I recognize the hon. member to answer the question I just want to point out the procedure that is going on here. Again in this matter I have heard hon. members shouting out: what is the hon. minister doing? Normally, in that situation the Chair leaves it to the hon. member who has granted the leave. Since the hon. member is the one who granted the leave, as long as the hon. member stays satisfied the Chair stays satisfied.

The hon. the Member for Mount Pearl.

MR. WINDSOR: Thank you, Mr. Speaker, another wise ruling from Your Honour. I thank the Minister of Education for his comment. I am quite aware that equalization grants have increased. It is a program that was started by the previous administration in very difficult times. I think we put in $2 million the first year when my colleague for St. Mary's - The Capes was the Minister of Education and we increased it each year. We were up to about $4.5 million in 1988 when Governments changed.

DR. WARREN: We will put in $10 million next year.

MR. WINDSOR: Ten million next year.

DR. WARREN: (Inaudible) it will be for the full year, Mr. Speaker, about $22 million for equalization.

MR. WINDSOR: So you are putting in an extra $5.5 million this year?

DR. WARREN: Mr. Speaker, $9 million extra for nine months, and that is equivalent to $12 million a year extra funding for rural schools to improve operation and maintenance of schools, to buy computers, buy books, and all these things, Mr. Speaker.

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

MR. WINDSOR: Mr. Speaker, we welcome that. I have already commented on it as the Minister of Education knows. I have welcomed that additional equalization fund but that is a decision Government has made, but it does not alter the fact that we have eliminated a school tax of $30,000 million and replaced it with a tax of $45 million. Those are the facts. You cannot change that. The fact that Government is adding an extra $8 million of equalization funding, we welcome that, but the Minister also forgot to tell us that they cut $7 million from the school construction program so where is the gain? You had $27 million a year for the last three years, you are down to $20 million this year -

AN HON. MEMBER: (Inaudible) answer.

MR. WINDSOR: That is the answer, I would love to have an answer.

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

DR. WARREN: Mr. Speaker, I enjoy this debate because I think it is very important that we explain these questions.

When the present government took office, Mr. Speaker, the hon. member is well aware, because he was, I guess Minister of Finance previously or the President of Treasury Board, the former government was putting in $20 million a year into capital -

AN HON. MEMBER: Twenty-two.

DR. WARREN: - twenty-two; that included insurance and other amounts, we increased that by $7 million a year for three years - Mr. Speaker, I am trying to provide information, the hon. member and I, please let us do this.

We added $7 million for three years, we guaranteed $7 million more, that would have been $29 million in his figures, for three years, that is $21 million extra for capital; we did not guarantee it beyond that. This year we reverted to what the former government was putting in, $20 million or $22 million, because we are doing two things. We have the most exhaustive and comprehensive study being completed into the future of education that has been undertaken, there may have been one exception, we had one study some twenty years ago, a pretty good study -

AN HON. MEMBER: Twenty-five, wasn't it?

DR. WARREN: - twenty-five years ago yesterday in fact it was released, but we have, being completed the most comprehensive study ever undertaken of Newfoundland education and I am pleased to indicate that it has been completed and secondly, we have being done, and the hon. member will support this I am sure, a long range capital plan. The hon. member I think, was interested in doing that some years ago, put together what this Province needs for the next five to ten years in school buildings and what we are going to do then, is try to fund it in a long term.

In the interim between the completion of the Royal Commission Report, which is vital to the future, and the completion of the long term capital plan, we are spending a lot of money this year evaluating schools all over the Province because we believe in equality, in the interim, we are going to revert to what the former government put into capital. Now that is the honest, Mr. Speaker, I use that word, I do not try to be dishonest at any time, but that is the explanation for the $20 million this year.

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

MR. WINDSOR: Mr. Speaker, a lot of words, and I am pleased to see the study is ongoing but it does not alter any of the facts. It does not alter the fact that this government, last year, put in $27 million in capital and this year they are putting in $20 million. The minister wants to compare it with the $22 million that we allocated in my Budget in 1988, your $20 million this year with inflation is worth about $16 million as compared to the $22 million I spent in 1988, so you are spending considerably less -

DR. WARREN: (Inaudible) $21 million extra over three years.

MR. WINDSOR: $21 million extra over three years, wonderful! That covered inflation and maybe a little bit more. I am not arguing with that, that was good but it does not alter the fact that you are spending $7 million less this year. You tell me on one hand we are spending an extra $8 million on equalization, I am simply telling you yes, you are, but you are spending $7 million less on capital, and does that not approximately balance out, and on the other hand, you are picking up an extra $15 million on taxation, trying to say that: we eliminated the school tax, we are not adding any new taxes, we eliminated the school tax and we are picking up the payroll tax and the personal income taxes instead of it. Now that is simple addition.

DR. WARREN: Mr. Speaker, this is, if you will permit one final -

MR. SPEAKER: I do not know that the hon. -

MR. WINDSOR: I will let him one more time.

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

DR. WARREN: This is the final comment, Mr. Speaker, because I think we are understanding each other and now we are getting close.

Capital is different from operation. We have schools being built, Mr. Speaker, we are putting $12 million in per year in operation and maintenance this year. We decided that we would put extra money into the operation and maintenance of schools where it is desperately needed for computers, books and all of these things which are important, and we reverted to the $20 million for capital. My final comment is, we expect that when the studies are done, we will be putting into school buildings extra funding to make sure that every Newfoundlander, irrespective of where he or she lives, has the same quality of facilities in the future. We will do that, Mr. Speaker. I won't debate it any more with the hon. member, but I wanted him to understand our position.

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

MR. WINDSOR: Mr. Speaker, the minister has not said anything that in any way alters anything that I have said. He is trying to make his explanations, he is trying to defend his budget as he should, but it does not alter the fact that this government is trying to convince the people of this Province that they have eliminated the payroll tax. It was a great election promise of the Premier, and he has finally fulfilled it. They have eliminated the payroll tax, or the school tax rather. I wish they would eliminate the payroll tax. But they have eliminated the school tax. I am simply pointing out, Mr. Speaker, that in so doing they eliminated $30 million of taxation and they have imposed $45 million of taxation. That is a 50 per cent increase. So they should stop trying to convince the people of this Province that they eliminated the school tax. They replaced it with a 50 per cent increase in taxation. Now, what they decide to spend it on, whether they spend it on equalization or they put television sets on every desk in every school in the Province, is their business. But the fact of the matter is they increased taxation by 50 per cent.

In so doing, as it relates to the payroll tax, they have increased taxation on many, many businesses in this Province. They tried to tell us there are 10,000 businesses that paid school tax that will not now pay school tax. I am telling them that most of those 10,000 businesses did not own any property, therefore they did not pay business tax. They were renting. I am telling him that many of them that did own property owned such small amounts of property that the tax that was paid was less than if the individual had been paying the personal school tax. So now, Mr. Speaker, that they are paying the payroll tax they will be paying far more than they paid before, not less. We have all of those companies that have payrolls between $100,000 and $300,000 that did not pay any payroll tax before, that will now pay it. Certainly anybody over $300,000 will pay much more because the rate has increased.

We have thousands of individuals in this Province who will pay more personal income tax.

AN HON. MEMBER: And thousands will pay less.

MR. WINDSOR: Very few will pay less, Mr. Speaker.

AN HON. MEMBER: Tens of thousands of Newfoundlanders will pay less.

MR. WINDSOR: Very few will pay less, Mr. Speaker.

I showed yesterday, Mr. Speaker, that a person with a $20,000 income will pay more income tax next year, fifty-one dollars more. And there are not a lot of people in this Province with family incomes less than $20,000 who are paying any income tax. So there are very few, if any, who will pay less income tax. I suspect, Mr. Speaker, there will be none who will pay less income tax. Certainly there are 20,000 senior citizens who did not pay school tax at all because they were exempt who will now pay 4 per cent more personal income tax. That is a fact of life, Mr. Speaker.

This government, Mr. Speaker, has increased personal income tax in the few years they have been in office by 6 per cent, from 60 to 66 per cent in three or four years. That is a 10 per cent increase in the amount of provincial income tax paid by every Newfoundlander and Labradorian who pays income tax, a 10 per cent increase, Mr. Speaker. Not to mention the fact that as salaries increase government automatically gets increases because it is a percentage. That is how normally those sorts of tax rates rise to meet inflation. That is how the revenue is kept up to meet inflationary requirements because it automatically takes place. This government, on top of that, has increased it by 10 per cent.

Corporate income tax, corporate taxes in total, Mr. Speaker, have been increased by 250 per cent since this government came into power, 250 per cent, 150 per cent increase in corporate taxation by this government. That is how this government is responding to a recession, 250 per cent increase.

AN HON. MEMBER: I thought you said 150.

MR. WINDSOR: One hundred and fifty per cent more. It is increased to 250 per cent of the former amount. That is how this government is responding to high unemployment, to an economic recession, to a decline in economic activity, to a decline in the gross provincial product, by taxing jobs - by taxing those who create a job - not a tax on those who are making a profit.

AN HON. MEMBER: Where would you get the money?

MR. WINDSOR: I would not penalize a company for creating a job.

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: Well there are many innovative ways, and you will see them in due course when I am sitting over there where the hon. Member for St. John's Centre is sitting. When I am Minister of Finance again you will see the creative ways.

SOME HON. MEMBERS: Hear, hear!

MR. WINDSOR: You will see them.

AN HON. MEMBER: (Inaudible) one we ever had.

MR. WINDSOR: Well we are disappointed that this government, Mr. Speaker, has not shown any imagination - no innovation at all - in finding the solution to the problems here.

Their colleagues in New Brunswick brought in a Budget that I do not totally agree with it, but at least they were trying. They did not sit back, wipe their hands clean and say, well, the economy is declining, unemployment is going up and there is not a thing to do about it. We do not know what to do. That is what this Budget says. That is the bottom line here. We do not know what to do about the problems with which we are faced. That is what government is saying.

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: I am sorry. The President of Treasury Board is making a comment?

MR. BAKER: You cannot borrow $700 million.

MR. WINDSOR: You cannot borrow $700 million, no. No, but you could have spent the $65 million you left on the table last year. You could have spent the $65 million. That would have only cost you $14 million, because it was cost shared. That $65 million could have created 2,400 jobs last year.

SOME HON. MEMBERS: Hear, hear!

MR. WINDSOR: And you could spend the same amount this year that you spent in your first Budget, which was $60 million more than you have in your Budget this year. That would create another 2,000 jobs this year. Your capital Budget has decreased by more than $60 million in four years.

AN HON. MEMBER: Not true.

MR. WINDSOR: Not true?

MR. TOBIN: Our last Budget for roads was $40 odd million. Yours is $20 (inaudible).

MR. WINDSOR: Mr. Speaker, the President of Treasury Board says it is not true. I am not going to waste my time. He has enough staff to tell him how much he spent in the Budget in 1989. He can look up the Budget, as I did. I am telling him what he has done. The capital Budget is cut by $60 million this year from the level that this government had in their first Budget in 1989. That is how they respond to a sagging economy and a construction industry that is almost stagnant.

The fact of the matter is, this government is totally devoid of any ideas as to how to deal with the situation. We all know it is a serious situation when they put wage freezes on public servants. Perhaps they did not have a lot of choice in that. I do not think that we need to debate that aspect of it, but they also put tens of thousands of public servants on notice that there may be more layoffs last year. So they do not know who might be laid off. So they do not spend any money.

That is only one component of how this government has destroyed confidence in the economy, of individuals, people who spend money, of consumers. People are scared to death to spend any money, if they have any to spend. Even those who do are scared to death to spend it, because they do not know what is going to happen next.

Private investors, private companies, are scared to move. I have spoken to dozens of them - business people who have ideas, who have projects on the drawing board with which they would like to proceed, but they do not see any hope. There is no light over the horizon saying, now is a good time to invest. Anybody who is in business knows that the best time to invest in business is when the economy is weak - when the economy is weak. This is the right time to invest. Interest rates are low. The cost of financing an enterprise today is as low as it probably ever will be in the foreseeable future. If you are going to start a business, this is the time to do it. If you have any money at all, and if you have identified an opportunity, have any expertise, this is the time to start a business - but there are very few. I spoke to a Bank Manager a couple of days ago and he said, all I am doing is putting out fires, trying to keep people's businesses going so they do not lose their homes because most of them over the last year or so have had to put their homes up as collateral against their business in order to maintain their line of credit.

That is what the banks are doing today. Banks are making a good profit, I do not deny that, as banks always will. When you are in trouble they charge you more and make things worse. When you do not need the money they trip over themselves to pass it out to you. How many times have we seen that. How many times have I said that in this House. I said it when I was Minister of Finance. I said it to the vice-presidents of the banks when I was Minister of Finance. That you guys are ripping off companies that are not able to defend themselves and do not have any alternative. Their reaction was that they were a bad risk now. Of course they are a bad risk now, and you are going to make them worse because you are going to tack on another 2 percentage points to their interest rate because now you are scared that you might lose something. You might lose it all.

I recall when the Bank of Nova Scotia came down here, five or six of them on their Lear jet and came to a Cabinet meeting in Deer Lake. They called down and said: Can we meet you on an emergency basis because the fishing industry was about to crumble and the Bank of Nova Scotia financed 90 per cent of the fish companies in this Province. They came in pleading saying: Here is what we are going to do. We said: No, you are not. We have news for you. If we had not stood up to the banks then it would have been tens and dozens of fish plants shut down in this Province at that time. They want to cut back on their line of credit. They want to cut back on financing for everything. They want to increase interest rates. A company that is in financial trouble will now have to pay more for their line of credit. Now what kind of economics is that?

That is the same kind of approach that this government is taking. When businesses in this Province are in trouble this government is going to take more out of their pocket and put them deeper in trouble. That is the kind of economics that this government is practising. That is the kind of economics that is going to put this Province into recession for a long, long time. Anyone who was hoping to start a new enterprise this year, anyone who was planning to hire on students for the summer, anyone who was planning to hire on additional permanent staff are now going to have to rethink that. Because the more they increase their payroll, the more this government takes money out of their pocket, penalizes them for employing people without regard for whether or not that company is making a profit.

Now how do you say to a fish plant that lost money last year that we are now going to impose a payroll tax on you and take $28,000 from you. Is the government doing anything to help the 350 people who are employed in that fish plant? You are jeopardizing their jobs. A real possibility that fish plant may not open. It is not only $28,000. I am not suggesting that on a payroll of $2.8 million, $28,000 is going to be the sole cause for that fish plant to shut down, but it is a big factor. I will not name the fish plant, but it is one of the larger private fish plants.

AN HON. MEMBER: FPI.

MR. WINDSOR: It is not FPI. FPI is a public company, I say to the hon. gentleman. This is a private company, one of the larger ones. I will tell the minister privately if he is really interested. They had a payroll last year of $2.8 million which means at 1 per cent they will pay $28,000 this year payroll tax. They did not pay any school tax last year.

AN HON. MEMBER: (Inaudible).

MR. WINDSOR: No. They have 350 employees, and that company lost money last year. In reward for that this government is saying we will tax you an additional $28,000. It does not matter that you have lost money. On the other hand we may well have a company next door to it that paid more last year for school tax than they will pay this year for payroll tax because it may be a small company that has a large amount of property and a very low payroll. There are examples of that, there are companies that will pay less because being taxed on a property value basis for school tax, they would have paid more last year than they will pay on payroll tax this year based on their small number of employees. Mining companies in Labrador are an example of that, by the way. They have a huge capital investment up there. The percentage of the school tax they paid will be quite a bit more than the payroll tax that they will pay this year.

Interesting. My researchers have just sent me in some notes here. Increases in general business tax since 1989. These are no doubt factual. Corporate income tax has actually declined. Not the rate. But it has declined, from $55 million in 1989 to $48 million now. Simply because corporations are not doing the business. That is the reason for that.

The payroll tax has gone up from zero, of course, in 1989, to $66.8 million this year. Sixty-six point eight million dollars is what the payroll tax will take out of corporations' pockets this year. The total has changed from 1989 of $55 million to $115 million. Right? So I was wrong. It is a 209 per cent increase, not 250 per cent. Gone from $55 million to $115 million. So it is 109 per cent addition.

That is what has taken place in four years since this government took office. Sixty million dollars additional corporate taxation. That $60 million in the pockets of corporations could do a lot to stimulate this economy. We could forgive the government, Mr. Speaker, if they were taking that $60 million and putting in place infrastructure, incentive programs, some sort of subsidies on transportation, or something that would help business prosper, that would cause more businesses to come to Newfoundland. That would remove some of the disadvantages inherent in doing business in Newfoundland. That would help us be more competitive with those that are operating in the larger marketplace in central Canada and worldwide.

We are not seeing that. Five per cent of the total government dollars is all that is being invested into natural resources to try to stimulate activity in the resource based industries. Five point one per cent is all that is going into it. Admittedly, we have social problems that have to be dealt with. I sympathize with the government. No question. You are always torn, as I said yesterday, by all these groups that are coming in saying: we need more. By the need to improve health care, education, and social service programs.

Health and education are going to increase. Those costs are going up every year. There is not much we can do about that. We can try to streamline it, we can economize, we can take advantage of economies of scale, we can modernize. We can do all of the things that any corporation is doing to improve the efficiency of its business. We can apply the same to school boards and hospitals and things of that nature.

But you cannot deny the fact that social programs, social services, can be reduced, by creating employment. So we have to take more into the resource based areas. Into creating business, into creating job opportunities. Into letting private enterprise operate on an even basis in this Province. We have to somehow find a way to let private enterprise move forward to turn the wheels of the economy. Because government alone cannot do it, and government should not try to do it alone. Government will need private enterprise. Government's funds should be used to provide infrastructure to create that economic climate and should be used to leverage private capital to invest in this Province to try to get things moving. In the short-term, unfortunately, we have to rely on short-term make-work projects, and we have seen how this government has cut $10 or $11 million from the Budget this year, a year when we know that the problem is going to be more severe than last year, and I know they will put it back in later on in the year. I would prefer if they had been more honest with the people and said, We have to do it now because it will have to be there before the year is out and it will affect your Budget. You can get some cost-sharing programs but they will not all be cost-shared. Mr. Speaker, that is the kind of Budget it is. It is a deceitful Budget. It says we are not increasing taxes, not adding any new taxes, but you are increasing taxes by $15 million. It said we are eliminating 171 fees and licenses when it is eliminating seven licenses only and some of those not for a full year. It is the kind of Budget that would have people think this government has not imposed any additional burden on them when it certainly has. It would have them think they are spending more on all of the social programs, but when you discount for inflation, when you take back payroll tax that even the Crown corporations and government departments, themselves, will have to pay - and the Minister of Education says there is over $1 million additional for Memorial University, $400,000 or more of which, Mr. Speaker, will be paid back as payroll tax to the Province. And when you have inflation of 1.8 per cent as predicted by the minister, it could well be more, but even if it is 1.8 per cent, then Memorial University has less to spend this year than it had last year.

So, Mr. Speaker, you can try to deceive the people, and you may well deceive some of them, but you can't alter the facts that this Budget is a negative Budget, it lacks imagination and innovation, it does nothing to deal with the declining economy and with rising unemployment except to make them worse. We would have hoped that this government would have come forward with something a little more innovative than that.

Mr. Speaker, I am going to stop there. I will have other opportunities. We will awaken the Member for Carbonear. He is next on the agenda to speak, I believe. I will have many more opportunities and many more questions to ask as we go through the Estimates Committees and the various subheads in the Budget. I choose not to go through that now because there will be a more appropriate time when we can do that, a better forum with questions and answers back and forth, as the Minister of Education and I got into today, but it is not the appropriate format for the Budget debate, itself. So I will leave those questions for the Estimates, but there are many, many more questions that I will have on the details of the Budget and I know my colleagues have many questions to ask, as well.

Thank you, Mr. Speaker.

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

MR. NOEL: Thank you, Mr. Speaker.

Mr. Speaker, we are in a very serious situation in this Province and in this country. We have just listened to the finance critic from the Opposition nitpick about the Budget, talking about minor amounts of money and minor policies. He doesn't seem to appreciate the seriousness of the situation we are in. We have to begin making fundamental changes. There is no point in dealing with small issues like you are in a process of re-ordering the deck chairs on the Titanic, and that is the situation that we are going to find ourselves in if we do not start dealing with the major challenges we face. All we hear from the other side of the House is: why don't you spend more, why don't you raise taxes, why don't you borrow more, why don't you increase wages for the civil servants and for other people who are employed by government? But where is it going to come from, Mr. Speaker, where is it going to come from?

The previous speaker said that we should not impose the payroll tax on resource companies, then who will we impose taxes on in order to get the revenues we need to carry out services in this Province? Who will we impose taxes on, should we expect other businesses to pay more tax so the resource companies, most of which are owned by wealthy national and international organizations, owned by shareholders outside this Province like Fishery Products International, like the forestry companies owned by shareholders outside this Province. Should we not put taxes on these companies so that these people can make higher profits; should we not put taxes on the regulated companies like Newfoundland Light and Power and Newfoundland Telephone?

We are in a situation in this Province today you know, where the only people who are making any money are the people who are regulated. The Newfoundland Telephone company last year made more profit I think, I just glanced over a news report a few days ago, more profit than Sears Canada, higher profits than Sears Canada. We are in a situation in this country today, Mr. Speaker, where the people in the competitive business world are not making it for the most part, where we are losing the ability to create jobs because businesses are falling by the wayside.

We see regulated industries like the Telephone companies, like Newfoundland Light and Power imposing new charges on the population through our regulatory authorities, new charges so that they can have good returns for their investors so that they can provide incomes for some of their managers and employees beyond what other people in our Province are able to earn, and we cannot keep doing that. The few cannot keep prospering while the many find themselves in economic decline. That situation will not continue very long, Mr. Speaker.

The other day the finance critic for the opposition said that the economy was improving in Canada. Well he is probably the only one who believes it along with Prime Minister Mulroney, who says it periodically but it is not what the statistics indicate. The economy is not improving significantly in the United States or in Canada and it is continuing to decline in Newfoundland, and I suspect it is going to get worse as the year progresses -

MR. R. AYLWARD: Because of your policies.

MR. NOEL: - not because of our policies but because of federal government policies I tell the Member for Kilbride, and you know, the one good piece of news I saw in the past few days was an indication from Prime Minister Mulroney that he might be considering an early election and I cannot think of any one single action that would do more to give a boost to the Canadian economy than to have the federal government resign, so that we can adopt new economic policies, so that we can deal with the constitutional question in a way that shows some promise for this Province and for the country.

The Mulroney government has mismanaged our economy. They have doubled the national debt since they came to office, from about $200 billion to $450 billion, it will be at the end of this year. They have increased all forms of taxation in the country substantially, Mr. Speaker. They have adopted and practised unjustifiable economic policies.

One of the reasons that we are in such a mess in this country today is that during the boom years of the mid-eighties the federal government employed the wrong fiscal policy for this country. Instead of reducing expenditures when times were booming in Ontario, when times were booming in Toronto, when the unemployment rate in Toronto was practically nil - something like 4 per cent, which is regarded as full employment by most economists - we never saw the federal government cut back on its expenditures in central Canada, which is what they should have done. If this country operated properly, if we adopted proper economic policies, when they saw the economy booming in central Canada fiscal expenditures should have been cut back. Fiscal policies should have been changed in order to cut back expenditures in central Canada and increase expenditures in the parts of the country that were doing poorly.

Instead, that did not happen. The federal government did not do it, the Ontario government did not do it. So what did they do? They overheated the economy in Ontario. Drove up values, inflated values, unjustifiably. Fabricated values, even. Overheated the Canadian economy and had to drive up interest rates to the destructive levels they have been at over the past few years in order to try to control inflation, in order to preserve our international trading position.

Now that was just plain poor economic policy. We would have seen different policy in this country if the Parliament of Canada operated differently. If the smaller provinces had more say in how the national government operated. That is the only hope for the smaller provinces, for the poorer provinces in Canada. To change the national government so that we can have more say in how it functions.

Now the government of this Province has advocated the implementation of a Triple E Senate as a way to accomplish this. While I have reservations about what a Triple E Senate will accomplish today, it offers some hope. This country would be a far different country if we had a Triple E Senate from the beginning, as we were supposed to have. When this country was set up it was on the condition that we have an effective Senate that would give the regions equal say in how the federal government operates in order to counterbalance the population densities in the central provinces. If the country had operated that way from the beginning we would have a far more equitable standard of living throughout all the provinces.

If we create a Triple E Senate now, if we ensure that the regions have more say in how the country is governed, what we will do is enable the smaller provinces to prevent the federal government from adopting policies favourable to Ontario and Quebec. We would be able to do that. But the House of Commons, which would still be governed by those two provinces, still be dominated by those two provinces, would also continue to be able to prevent the federal government from adopting policies that would be favourable to the smaller provinces.

So while I see a Triple E Senate as some progress for the less powerful provinces, it is certainly not a panacea for all our ills. But it is something we need to try to accomplish, and it is something for which we need the support of everybody in this Province, and of all the other smaller provinces, in order to accomplish.

We in the Liberal party have succeeded in persuading our national party to adopt, as a cornerstone of national policy, a plank calling for the creation of a Triple E Senate. I would encourage the other parties in this House to try and persuade their own national parties to do likewise, because if we are to make any real change in how this country is governed, and in the economic prospects for our Province, we have to take important actions like that. We have to persuade the Government of Canada to develop international trading relationships that favour our Province - not relations that favour the most populous provinces, Ontario and Quebec as well.

A good example of that is in the current GATT negotiations taking place to try to liberalize trade, to try to free trade in the country, in the world. To try to free trade in the world to the advantage of Canadians.

As the Leader of the Opposition himself indicated a few days ago, one thing we need to do in order to expand the economic potential of our fishery, is to ensure access to large markets for our fully processed fish products. We have exported thousands of jobs over the years because we have had to ship fish out in cod blocks and that sort of thing. That does not create jobs in our Province, but it creates jobs in other provinces. We have had to do that because we have not had access to foreign markets of sufficient size for our own fully processed products - the United States for instance.

The situation is changing with the United States now because of the free trade agreement we have with that country, but it is not changing with other countries. We still have tremendous difficulty gaining access to the European Common Market for our manufactured fish products. One way we can hopefully improve that access is through these international trade negotiations, but we cannot expect to gain advantages ourselves without accepting some costs - without making some concessions.

One concession Canada has to make is to increase free trade for agricultural products. Now the Member for Kilbride some weeks ago called on the provincial government to endorse the federal government's position against the freeing of agricultural trade in the world, and that is the position being taken by the federal government. Of course we all realize that the federal government hopes their position does not win. The federal government is being two-faced in these international negotiations. They are pretending to Canadian farmers that they are supporting their supply management policies while at the same time hoping that negotiations are going to reduce the impacts of those policies, because they are unnecessarily maintaining high costs of food for Canadians, and because they are preventing proper access, or increased access, to export markets not only for our agricultural products, although for our agricultural products as well, but for everything that we produce, including fish products. That is why increased liberalization of international trade would be much to Newfoundland's advantage.

So I wish the people on the other side of the House would get sensible about some of these challenges that we are facing, and support policies that will be truly productive for this Province and stop supporting programs favoured by particular interest groups who are concerned only with their own vested interests.

Mr. Speaker, it disturbs me to see how many Newfoundlanders and Labradorians are unemployed these days. We talk about having an unemployment rate of 18 to 20 per cent and we all know that the real rate is greater than that. We all know there are thousands of our people who are unemployed and thousands more who are under employed. One of the ways everybody is talking about these days that offer the most potential for developing our economy is through improving education for our young people. I have to support that. Everybody agrees that improved education is essential in order to compete in today's world and the world of the future, but that is not going to be any panacea either because we are not the only society in the world trying to better educate our young people. That is being done everywhere.

Today we have many well educated Newfoundlanders who are unable to get jobs. In some cases it is because they are educated in the wrong disciplines, but in other cases they are educated in disciplines that are supposed to be in demand in the world today, but they certainly are not in demand in our Province.

So we cannot expect education in itself to solve the problems we face. We have to do more than that. We have to improve our competitive strength. We have to increase our access to foreign markets. We have to reduce the cost of living in our Province and the cost of production in our Province in order to make us more competitive. One way to reduce the cost of living without reducing the standard of living is to reduce the cost of food. That is why I have been advocating a review of our supply management policies and marketing boards. We can substantially reduce the cost of food for a lot of Newfoundlanders in this way without losing too many jobs, in my view, and perhaps even increasing jobs because as we reduce the cost of living in this Province and make this Province more competitive we will improve the economy, we will increase the gross provincial product, and hopefully we will create more export jobs and put our people in a position of being able to supply more of our own needs ourselves.

Mr. Speaker, we are developing a tremendous welfare culture in this Province and in this country. Canada's labour market programs today are not solving our problems. Of all of our labour market programs Canadians spend 75 per cent of total expenditures on income maintenance. That is compared with 50 per cent in Germany and 30 per cent in Sweden, for example. What that means is that we are paying people in order to ensure they have income rather than paying them in order to ensure they get properly trained for the economy of the future. We have to do more of that, Mr. Speaker. We have to ensure that more of the money we spend on income maintenance goes to people who are improving their ability to produce in our society, improving their ability to make our society more competitive. We cannot continue transferring income from people who are unable to be productive, people who are provided jobs, people who are out earning incomes. We cannot continue taking from them and giving to people who have not been enabled to earn their own incomes. That cannot go on indefinitely. The time for that has to stop pretty soon, Mr. Speaker.

Now Canada as a country has to make some difficult decisions. Throughout the constitutional debate in which we are going to be enmeshed for the rest of this year many of us will have to be prepared to review the kind of country we want to have. It has become easy for Canadians to talk about what a great country Canada is. Is it such a great country if we have so many children who are hungry? A newspaper report the other day said one child died of starvation in Canada. Forty per cent of the people who depend on food banks for an adequate diet in this country are children. One out of every ten children depends on a food bank.

Canada is in serious decline, and we have to be prepared to make serious changes, to make changes in our perception of the kind of Canada we want. Bilingualism, for instance, is an example of the kind of program Canada has to reconsider whether it can afford. The official cost of bilingualism is put by the commissioner at something like $1 billion a year. We all know it is substantially more than that. One of our local columnists a few weeks ago contended that it has a cost of about $4 billion a year.

What we have to decide is whether that is a cost we can afford. We would all like to be bilingual, we would all like to be part of a bilingual country. Everybody is enriched by being able to speak and understand extra languages, but are we in a position to pay the price? If we are going to look at saving money in this country, if we are going to look at making the country more competitive, some costs have to be cut out. They are going to have to be costs that people do not want to cut out. That some people do not want to cut out. But you are not going to make this country any more competitive if we do not look at some programs that are very close to the hearts of some people.

Another thing is defence expenditures in this country. Our defence expenditures have continued to increase over the past decade, over the term of the present federal government. In spite of the increasing peaceful sentiments that seem to be developing in the world Canada is budgeting a substantial increase in expenditure on defence for this year and projected for next year. We have to look at cutting these expenditures if we are to save money and make the country more competitive.

Then we have to look at the role that Canada is trying to play in the world. We see that Canada is contributing an extra $1 billion to the aid package for the former Soviet Union. Russia in particular, I believe, in this case. I believe that Canada is living beyond its means internationally. I believe that we are doing so because Canadian national politicians and bureaucrats like to play in the big time, like to go off to international conferences, like to be one of the major players in the world today in world politics, in the world economy.

AN HON. MEMBER: So we are.

MR. NOEL: We are not a very major player, I say to the Member for St. John's East Extern. We are only twenty-six million people. But we are spending more money than we can afford in order to sustain a national role. In order to enable Prime Minister Mulroney to go off to these meetings of the Heads of State of the greatest countries in the world. I think we are playing outside our league. I think we are spending more money on trying to maintain a national posture in the world than we can afford.

If we want to improve the standard of living for our people, and if we want to make our economy more efficient, we have to cut in some places, and we all have a responsibility to say where we would be prepared to cut. It is no good coming in here, or wherever you operate, and saying, we have to make cuts, we have to economise, without being prepared to say where you would do so. That is what I try to do when I speak in this House. When I have some views on political matters, I try not to just say what is wrong. I try to say also what we should be prepared to do in order to improve things.

One of the important challenges for this Province is our fishing industry. There, again, we have to accept responsibilities ourselves. One of the main causes of the destruction of the fishing industry has been overfishing - not only overfishing by foreign countries, but overfishing by Canadian companies, as well - and not only overfishing, but bad fishing. They have gone out and torn up the fishing grounds. They have fished in spawning seasons, and we all know the problems.

I think that we have been successful in the past few months in increasing awareness of the problems in Canada and abroad. We are getting a little more action these days, thanks to all of the groups in our Province, in particular, and some people from outside our Province. We are drawing world attention to the problem, and hopefully, that will lead to some improvement; but it has been hard for us to get the attention of the federal Government of Canada, the level of attention that is required. That has been difficult. They have only done it now that it has become such a high profile media issue. Hopefully, the Prime Minister is serious in following through on what he is promising at this point. Hopefully, he will go to the Rio Environmental Summit and make a strong case for the country. Hopefully, also, the Members of Parliament from this Province will start making a stronger case for Newfoundland and Labrador. I have been very disappointed in the federal Member for St. John's East. How much do we hear from him? How much does he speak out?

AN HON. MEMBER: Who is it?

MR. NOEL: Who is it? That is a good question. Who is it? It is a young man who does a very good job of going around to meetings within the district, being seen cultivating goodwill on behalf of the expenditures of the federal government,which are paid for by the taxpayers of Canada, in general, and Newfoundland, in particular. But where is he?

MR. SPEAKER: Order, please!

The hon. member's time is up.

AN HON. MEMBER: By leave?

MR. NOEL: If I could have a –

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

SOME HON. MEMBERS: Agreed.

MR. NOEL: Thank you, Mr. Speaker.

MR. SPEAKER: By leave.

MR. NOEL: Where is he on the high profile issues we are dealing with in this Province? Do we see him in the media making Newfoundland's case throughout the country? Do we see him making Newfoundland's case with the federal government of this country, or do we see him trying to make the federal government's case in Newfoundland on the constitutional issue, trying to sell Newfoundlanders on agreeing to the Mulroney package for constitutional reform, which would be contrary to the interests of Newfoundlanders?

Mr. Reid was down at the Cabot Institute just a few weeks ago, threatening the students of the Institute with the consequences of failing to resolve Canadian constitutional problems, telling them that if the country breaks up, Newfoundland will be devastated, Newfoundland will be doomed.

A few weeks ago, we had some visitors to this Province who demonstrated that it is not necessary to be doomed just because you are a small country. We had people from Iceland, a country half the size of Newfoundland, a country with half the population of Newfoundland, a country with less resources than Newfoundland, a country that speaks a language that is not as common as the language we speak in the world today and a country that has been very successful, very successful economically, a country that has a higher standard of living than Newfoundland and Labrador.

We heard the leader of the Fishermen's Union when he came back in his flotilla the other day, saying that if Canada cannot solve our problems, Newfoundlanders have to reconsider the benefits of Confederation, and I think he is right, Mr. Speaker, if this country has not been able to substantially improve our earned income since we have been part of the country, since we have been Canadians. They pretended to do so through all of these economic games they have played, through the ACOAs and the DREEs and that sort of thing, and all it has done is funnel money through Newfoundland companies back to Ontario businesses, back to Quebec businesses.

Only enough has been left in this Province, Mr. Speaker, to maintain a minimal standard of living and we have to say that that is not enough, and in this year of Constitutional discussions, we have to be prepared to stand firm and to say that unless we get a deal that is going to improve the economic situation in Newfoundland, we are not going to agree to it. We are not going to agree to any deal just to appease Quebec, just to appease Ontario.

We have the Premier of Ontario now, the spectacle of the Premier of Ontario, telling the smaller provinces, those that have suffered most in Confederation, that they should be prepared to compromise to get a deal, while he said he would not compromise one iota! Great Ontario can't be expected to make any concessions, they want concessions from the people who have given concessions too long. They want concessions from the weak and the small in this country and this time I do not think we are going to give them.

Mr. Speaker, I guess I have overstayed my leave long enough and I thank members for giving it to me. Thank you very much, Sir.

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

MR. PARSONS: Thank you, Mr. Speaker.

I certainly would like to join in this debate. There are several things that my hon. colleague and hon. friend from Pleasantville made that I certainly need to respond to. He talked about the problems we are having in Canada, but I didn't hear him say at any one time that the problems in Canada are not unique to Canadians, it is a global problem, and, certainly, we are part of that problem. The other thing I didn't hear the hon. gentleman mention is that although we didn't get all we wanted from Ottawa in transfer payments - but that is done by a formula and because of Central Canada's dilemma, where the jobs are almost as scarce as in Newfoundland today, compared to what it was two years ago –

MR. NOEL: They are only scared because of the mismanagement of the federal government.

AN HON. MEMBER: Oh, go away, boy!

MR. PARSONS: That is not true. Look at the unemployment rate in the United States, the great country to the south of us. The unemployment rate there now is around -

MR. NOEL: They have 7 per cent. That is a 50 per cent higher unemployment rate (inaudible) the United States.

MR. PARSONS: They have 8 per cent, which is unthought of in the United States.

MR. NOEL: (Inaudible).

MR. PARSONS: Yes, but seven point something per cent.

MR. NOEL: No, six point something.

MR. PARSONS: No, it isn't.

MR. NOEL: Our's is 50 per cent higher.

MR. PARSONS: It is not 50 per cent higher. What is our unemployment rate Canada-wide?

MR. NOEL: Our real interest rates are 40 per cent higher.

MR. PARSONS: Mr. Speaker, we received more money from Ottawa this current year than we did last year. Hundreds of millions of dollars more. Let's put that to bed. We are receiving more money. We are not receiving -

MR. NOEL: (Inaudible).

MR. PARSONS: What money is Newfoundland really paying into the Canadian economy? Mr. Speaker, very little. I want to touch on something that the member said, too, when he spoke about Iceland. He said that possibly we could do it on our own.

Mr. Speaker, on April 1 there was an anniversary, for me, because I remember 1949, the first day we were Canadians. I, at that time, thought it was a grave mistake, for us to join the Dominion of Canada.

MR. NOEL: That's when you were young and intelligent (inaudible)!

MR. PARSONS: I did, I thought it was a mistake. But it didn't take me very long, when I saw what people that I cherished received in benefits - our children, our parents. Old age pensions went up by 1,000 per cent - the baby bonus, which was unheard of. When I saw all those things happen then I saw, perhaps through a thick skull that I had, but I then saw what a great country we had joined. I have never for one minute felt any different in all the years since. I believe that this is the greatest country on earth.

MR. NOEL: How come kids are starving here?

MR. PARSONS: Is there anyone really starving here?

MR. NOEL: Yes!

MR. PARSONS: Well, I mean, Mr. Speaker, if there is anyone starving here, I say to the Minister of Health, who is in this Legislature now: Does he know of cases where people are starving in this Province?

MR. NOEL: (Inaudible) worse in other provinces.

MR. PARSONS: I ask the Minister of Health: Can he truthfully say today that there are people starving, that this government knows of, and would not help through Social Services, health-wise, or whatever?

AN HON. MEMBER: (Inaudible).

MR. NOEL: There was a newspaper story about a kid in Manitoba.

MR. PARSONS: What? There are really people starving in this Province?

MR. NOEL: In this country, I said, in this country.

MR. PARSONS: And our governments are not doing anything about it? Our provincial governments, with what social programs are out there, that there are people going to starve in this country?

MR. NOEL: According to a newspaper report a few days ago it happened in Manitoba, yes.

MR. PARSONS: There are isolated cases that were not caused by the system but rather by the individual or individuals. There is no way in this country that you can starve. There is no way that you would be permitted to starve. If people out there, if governments knew. Look, as much as we talk to the people on the other side and tell them what they should do and what they shouldn't do, I know that you people over there are just as responsible as any of the rest of us. There is no way that that government would let Newfoundlanders starve. There may be people who are not affluent with respect to money and the (inaudible) of life, but glory be to goodness, I don't think there is anyone actually going to starve here, unless they, themselves are at fault in some way, shape or form.

MR. NOEL: Forget about the starving. What about the people who are having very difficult times?

MR. PARSONS: They are, yes, I agree with you. There are a lot of people out there having difficult times. There are people out there whose wages, salaries, whatever, can't make ends meet. There is no mistake at all about it. They are going to have - I suppose - the Minister of Finance said the other day they are going to have to cut the garment, and that is sad in many cases. There are people out there who don't have enough money for clothing or for basic needs. That is true.

AN HON. MEMBER: We didn't make the recession.

MR. PARSONS: But we didn't cause it. I mean a recession is worldwide, it is global. It is in England, it is in Europe. People blame it on everything. I am surprised sometimes, and I must give the Minister of Finance a little bit of credit that very rarely does he get up, very rarely, of all the things he says that I disagree with, but very rarely does he get up and place a lot of emphasis of blame it on the feds syndrome, very rarely. He would get up and at least tell the truth. He would say it is a global thing, it is a national thing, and we are just part of a nation. We are part of a nation that is having problems, and as such we would have to try to straighten up our own house until such time as economic conditions change.

I want to go back to what the hon. gentleman said about Iceland. He said Iceland was small. I am going to tell the hon. gentleman something. Iceland GNP is made up of 80 fish and fish products - 80 per cent. Out of their work force only 10 per cent of their work force works at that product - 10 per cent. There are fish plants in Iceland being run by less than three people. Everything is automated. Everything in that little country as it pertains to fish is automated.

We can look at Iceland and we can think along the lines of look what Iceland did when you talk about the Nose and Tail of the Grand Banks and the overfishing by foreigners.

AN HON. MEMBER: (Inaudible).

MR. PARSONS: Yes, there is no mistake at all about it, Iceland drove the English from their shores, from their fishing ground, but you are talking oranges and apples. How could Canada as a nation of the world go out there and do the things that Iceland did. It is ludicrous. When I hear the hon. Member for Port de Grave, and I wish he was here, go on with all this old blarney about going out and taking on those countries, about bringing out the warships and, I suppose, shoot them if necessary. What are they going to be doing while we are doing all of this? While we are taking the pot shots what are those people going to do? Will they defend themselves? Will we cause another war? These are situations where wars were caused many time over and over in our history.

I think there are other ways to settle it. No one ever thought that there was any big problem. I remember about three years ago I was up one day and asked some questions of the then Minister of Environment, the hon. Member for Naskaupi. Simple questions I asked him. Did he thing that the dragging during the spawning season would affect the habitat of the codfish? I asked him was it an environmental issue, and I saw people in this House with smiles on their faces. What is he talking about? He was crazy. But he was not crazy. The point remains that is what happened. That is where the start of our problem began. If we had stopped then.

Now people say we are not doing it now and I agree. Why we are not doing it now, two trawlers left here about three weeks ago and one of them came back with three fish. There is nothing out there to trawl for. Did not get enough for a stew. There was nothing out there. What we are saying now is we have to deal with the situations that are presently before us. The only reason why we are dealing with them now is because there is none inside the 200-mile limit or none in that particular area with the habitat of our northern cod. And why we are placing so much emphasis now on the foreign draggers is because there is still some fish out there. So they must not have raped the grounds as bad as we did ourselves or there would be none out there either.

Now we have to draw attention to those people out there fishing now because I think if we let them rape the grounds like we did ourselves, and we did it, the big companies did it, and if we let the foreigners rape it to that extent then it will be finished. There will be no fishery. There will be no straddling stocks because there will not be any stock outside the 200-mile limit no more than there is inside the 200-mile limit right now.

Mr. Speaker, we talk about the seals. I made a resolution here in the House the day before yesterday about the seals. Mr. Speaker, let me put up another scenario. Let me just say to you like this, just look at the map of Newfoundland. Since our seal herd has increased by millions of animals I was asked by one individual: did you ever see seals eat fish? I said no, I did not. I had to be truthful, I did not. Did you ever see them in a school of caplin? I said, yes. He said: what did the caplin do? I said they vanished, swam away from the seals.

Mr. Speaker, did we ever think about all those seals up north? When they move down over the cod stocks they move the fish in front of them. It is like a wave. Norway now is catching a fine lot of fish and I believe that that fish is being pushed towards those countries from the habitat that they had, by the seal population. I believe that the seals out there are so plentiful that they are driving the cod from our grounds because you can look up at the Northern Peninsula, you can come right down through and see it just like taking down a window blind, all the fish are moving and as the seals increase it is going to move further to the south and eventually if the seal population is allowed to continue as it is, where once cod swan now will be completely controlled by the seal population.

I am a firm believer that something has to be done. I do not think, and I have said it before in this hon. House, I do not think that our tactics, as it pertains to those conservationists, that has to cease, we cannot go it that way, they can beat us. They have money to put up there, they have the sentiments of the European population, and they can finish our cod sales if they put an effort in it. They played a major role before and I do not think we can take them on, so there must be another answer to it. What I suggested the other day in the House in that resolution was very simple. Again, when the member said today there were people hungry in this Province I do not think that is necessary. I think every Newfoundlander and Labradorian should be allowed to kill a seal. I think every Newfoundlander and Labradorian has that right, it is their moral right, it is their traditional right, it is their historic right. When we all sit down in this hon. House how many times do we think about what we are sitting on, the chairs we are sitting on? Those beautiful chairs are made from seal. What better furniture? What material could we come up with that would serve us better? We talk about diversification, we talk about being diversified. There is room in this Province to diversify. Let us see what leather crafts can be made from seals, apart from the food aspect of it. Let us utilize every part of that seal. I think we can have a new business. I think we can diversify in that area.

Mr. Speaker, to go back to the Budget, we talk about the school tax authority. I had been a member of the RC school board for St. John's when the school tax authority was brought in. I had mixed feelings on it then and I had mixed feelings on it all along, but I am not sure that the way the tax is going to be collected now is doing it in the right manner, in a just manner. People who never paid the school tax before are paying it now. The Minister of Finance this morning talked about the old age pensioners and I agree with him in saying that there are old age pensioners out there who have large amounts of income and they should pay income tax. They should pay their fair share, but we have a great number of pensioners out there who are below the poverty level. We have a great number of pensioners out there who are anywhere from $6000 to $12,000 and I think the poverty line right now is $19,000 so we have a great number of those people who are now going to be forced to pay a small portion of that pension towards our school system, and I think that is wrong.

Again, we look at the resource industries. We speak about the resource industries - the resource industries were exempt from the payroll tax but now they have to pay that 1 per cent. Mr. Speaker, where a company is on the borderline of being in the black or the red, borderline cases, an extra $100,000, because there are a great number of those companies, Mr. Speaker, with employees up to 300 and 400, and their payroll tax now, even at 1 per cent could be in the thousands and thousands of dollars. Mr. Speaker, it could spell their doom and I do not think that government, this government, was responsible in their line of thinking in bringing in that 1 per cent on resource industries. I think that was a mistake.

MR. NOEL: (Inaudible).

MR. PARSONS: I do not know. I am not the government. If I were in government -

MR. NOEL: You must have some ideas.

MR. PARSONS: If I were in government I perhaps would have come up with some kind of a formula, but what I am saying is that the Premier said the school tax has to go.

AN HON. MEMBER: (Inaudible).

MR. PARSONS: Well, we are not the government. You are the government over there. You make the rules and regulations. I am saying that there are parts of this new system that are a disaster - that are a disaster on poor people. There are a lot of pensioners out there, I told you before, in the $6,000 to $12,000 bracket. Granted, there are pensioners out there who receive $100,000. There is no doubt at all about it, but they are the few. The many are the people under $12,000 and there is a great number of those people, ex-policemen, ex-firemen, ex-government workers who are out there on the poverty line - they are two times below the poverty line. Mr. Speaker, I do not think that those people should have to pay any more. Those were the backbone of the country, especially our senior citizens, and I think that every method should be tried before those people are taxed any more.

People say that it will only cost an extra $25, but $25 to most members of this House is peanuts. Peanuts - it does not matter to them - but for pensioners who are on that fixed income, who are budgeted every day for everything they eat and every bit of money that they spend, $25 or $30 or $50 is a lot of money, and I think there should be some other way.

I heard the President of Treasury Board saying on the radio that Mr. Reid from the NTA said that there was a tax grab here on this new tax of about $75 million. My old friend across the way, the hon. House Leader, the old biologist, came on and said they should get an accountant. Well I am sure that the NTA would have an accountant, and perhaps half a dozen accountants. I am sure that they were not that far out; that this is, without a doubt, a way of increasing taxes and telling people: look what we did. We eliminated the school tax. But they brought in another tax, and in many instances this tax is regressive.

I heard the Minister of Education this morning too, as my hon. friend from Mount Pearl was speaking on the Budget, saying that the $7 million that was extra, was put in there for capital expenditure, was not taken away. That was right. It was put in for three years. Now those three years are up, and I hope that when that new study is brought to the House, or the minister will explain perhaps some of the finer points of it, that there are provisions in there to increase this expenditure on capital programs. The minister and I have, on several occasions, discussed the sharing in the schools, and I think that is a good idea. I think it has to come. I do not think we can afford not to be part of it. In fact, I am a strong proponent of sharing, and I think the minister is on the right track.

In sharing, I think perhaps we are going to have to build new facilities in many areas or expand what we have to facilitate that type of school. Because what we are talking about, especially in the rural areas, are a lot of small schools with very, very few facilities, very, very few aids. What we are going to do now, with the sharing, is hopefully improve the situation whereby those people will have access to the needs of today's schools.

MR. HEARN: (Inaudible) very good teachers.

MR. PARSONS: Yes. I was reminded by my hon. friend from St. Mary's - The Capes - and I want to get this one across to the Minister of Education - he said, "and very good teachers," and so they were in those small schools. "Very good teachers," he said, in the small schools. I agree with him, there were a great number of fine teachers. The conditions that they taught under sometimes, you would look back today and say: How, in the name of God, did they ever do it?

Mr. Speaker, again going back to the Budget, there is a great need in our Province today for work programs, and the government places great emphasis on long-term programs. Mr. Speaker, there is an interim there. I ask the Minister of Employment: What is going to happen now when we have the 20.4 per cent unemployed? What is going to happen tomorrow? What is going to happen this summer? I mean, can the minister tell us there are going to be some programs brought into play this summer to help the people who are unemployed with no stamps? I hate, Mr. Speaker, to use the word `stamp' but it is a part of life in Newfoundland today. There are people out there without sufficient stamps to get UIC, and there are no programs ongoing.

I thought that this Budget would bring in some new initiatives, some new incentives, to make some work programs for the poor people of the Province, for the people who need it. In the councils we did have a social services component there which has been eliminated. That took up some of the slack in many areas throughout the Province when municipalities were hiring people. Mr. Speaker, that program is gone now so we don't have that component that town councils could utilize.

Mr. Speaker, I have been asking questions for a number of days now, and I have spoken with the minister in private, about municipal operating grants. I must say, and be truthful in saying it, that the minister has been receptive. He has been receptive to the questions that I asked and has answered them honestly. Mr. Speaker, I can see light at the end of that tunnel, because - and I stand to be corrected - there is not one council, one complete council, in any part of this Province, perhaps including St. John's, that understands the scheme of things. They do not understand what the components are made up of.

There is $318 for every household in Flatrock. I went to a specialist and asked: What way is it kept? How are they paying? Well, he said, you would have to have the budget of every council before you to evaluate it. Mr. Speaker, I attend council meetings regularly and I have not been to any council meeting where all councillors knew how this system worked and I think that is a shame. I think sometimes we get confused and tangled up with bureaucratic advice by bringing in some of those rules and regulations which I doubt very much they understand themselves, and the minister as I said, he was not listening but he was receptive to the questions I asked and I did speak to him in private and I think he is going to do something about it because, as I said, there are avenues and I believe that this minister will certainly approach those avenues, because what we are doing is very simple.

We are downloading, there are no ifs, ands or buts about it. The Minister of Finance and the President of Treasury Board can get up and say what they like, they can get up and say: oh look, we are holding the taxes down, but that is not the truth because what they are doing is downloading on the councils, they are forcing the councils to increase their mil rate to get more money out of the people. No matter what way you pay taxes, taxes are taxes. If you pay it at the municipal level, if you pay it at the provincial level or you pay it at the federal level, it is all taxation and what has to be looked at, Mr. Speaker, is what comes out of the dollar you make and, there are a number of things that can be done about that Municipal Operating Grant system as far as I am concerned.

There are a number of things that can be done with that system and I hope, and I feel justification in saying here in this hon. House today, that I think that we have a minister now, who is going to address the problems that we do have with that system and I hope he does and I think that every Newfoundlander and Labradorian out there will be grateful if the minister changes some of those archaic - it is a new program but it is archaic as far as I am concerned, it should never have come across in the first place, we are being penalized, rural Newfoundland in particular is being penalized by that MOG and I think that it should change.

Mr. Speaker, I only have a couple of minutes left, but when I started off I mentioned about the federal government. The most that we hear in this House when anyone gets up, be it the fishery, be it forestry whatever, and the old Minister of Forestry is a person who can really confuse the truth in saying that all our problems here, in the fishery, problems that we have everywhere is caused by the federal government. Mr. Speaker, I will say it again and I want to repeat myself for the record, that we are receiving hundreds of millions of dollars more this year from Ottawa than we did last year.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

The hon. member's time is up.

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

MR. SPEAKER: The hon. the Member for Burgeo - Bay d'Espoir.

SOME HON. MEMBERS: Hear, hear!

MR. GILBERT: Thank you, my friends, thank you.

Mr. Speaker, it is indeed a privilege to stand here this morning and speak in the Budget debate, because, Mr, Speaker, I have heard several Budgets here in this House now as an opposition member and four as a member of government, and I must say that every one of the ones as a member of government are getting better and the one this year, there is no doubt about it, it is a good news Budget, a good Liberal Budget. I know the Minister of Education has been fighting ever since we came to office to straighten out the unfair taxation system that we had in (inaudible) the school tax system. It was unfair to Newfoundlanders and I am sure the minister, this year, thank God, has finally won. He had his way and we now have that unfair school tax eliminated.

And why I say it is a good news Budget, Mr. Speaker, is because what it does is that the children who are going to school in Milltown and Francois now have the same equalization grant as the people who are going to school in St. John's and Corner Brook. So they have the same amount of money put into education per capita as they did before. There is nothing at all wrong with St. John's. The only thing is that I would like for the people who live in Francois to have the same right to education as the people who live in St. John's. This Budget has done that.

The other thing that it has done is that it has taken the school tax away and spread the burden evenly over all the population. So now the child that is going to school in Milltown, his father is making $8,000 or $10,000 a year, his father is not stuck with an unfair and unequal tax. It is spread now over the whole population and the child is getting the benefit of the equalization grant. So that is, to me, one of the most positive things that was in this Budget.

Of course in the Department of Education the budget for equalization was increased by $12 million.

SOME HON. MEMBERS: Hear, hear!

MR. GILBERT: There is more money put in for distant education so that people who live in Francois and places like that are going to be able to take advantage and get, again, the advantage of a good education which was not provided for them before.

Now the Member for St. John's East Extern just finished talking and he is our expert on seals. He has a great idea about what we are going to do with seals and what we should be doing. But I might remind the hon. gentleman that his government was in power for seventeen years, and when we came to power one of the things that was going to be prepared was this House of Assembly. It was almost ready to sit in, and we started thinking we are going to make this into a Newfoundland House of Assembly. The chairs were going to be made out of leather from Alberta some place or Morocco. So we decided to put this House of Assembly on hold for six months while we got those seats right here made out of Newfoundland seal skin.

AN HON. MEMBER: (Inaudible).

MR. GILBERT: You know it is great for the Member for St. John's East Extern to say kill a seal and eat a seal, but this government is using some initiative, and they are working with the Newfoundland Sealers Association, unlike the previous government, because the Newfoundland Sealers Association had asked the previous government to talk about furnishing the House of Assembly with sealskin products but they all ignored them. So it took a Liberal government to come in and recognize that yes, we are here and we must do something about it and we did. We are continually doing something about it and we realize that in the fishery, which is the main problem I suppose that all of us have to look at in Newfoundland whether you are in the House of Assembly, whether you are walking down Water Street, or whether you are on a road in Ramea, the fishery is the important thing that we have to talk about.

When this government came in we inherited seventeen years of bad rule and then we also inherited a world wide depression. So last years Budget, when we recognized what we were in - this government then lead all of Canada by taking the steps that they did to try and get the economy under control. As you will notice everything that has happened since that time, every other province in Canada have taken the same approach that this government did. Even the federal government have now recognized that there is a serious problem and they now call it a recession instead of the other nonsense stuff that they were calling it for two or three years. They now recognize that we do have a serious problem and the Newfoundland Government lead the way.

As I say, the serious things that we have to consider right now is the fishery and we have heard that everybody is an expert on the fishery. The Leader of the Opposition gets up and he points out certain people who are experts. Everybody in this House is an expert on it, and I know I have heard my colleague, the Minister of Fisheries, say that everybody he talks to is an expert on the fishery.

I do not profess to be an expert on the fishery, Mr. Speaker, but as I represent a fishing district I have had the occasion to talk to -

AN HON. MEMBER: (Inaudible).

MR. GILBERT: I have had the occasion, Mr. Speaker, to talk to the fishermen in my district and I happen to listen to them. Now the thing that I have discovered, Mr. Speaker, is that there are three very distinct fisheries in Newfoundland. There is the Labrador fishery or the north of 50 degrees that they talk about; there is the northeast coast fishery; and there is the south coast fishery.

Much has been said about the Labrador fishery in this House by my colleague, the Member for Eagle River. The northeast coast fishery's concerns have been adequately addressed by all the members who represent the northeast coast. To some extent the south coast fishery is the one that I think is the forgotten fishery in Newfoundland. When I go and talk to the fishermen in François, McCallum, Burgeo, Ramea and Grey River, they tell me: listen, we hear about all this other stuff but it is the south coast fishery that is the problem.

Now this week we have seen the Fishermen's Union organize the offshore protest. The seven trawlers went off to try and wake up the federal government. I think that was the purpose for it. I was very happy to see the Cape Nova out of Burgeo under Captain Art Parsons and his crew out there taking part in that protest. Because when we talk about the south coast fishery the one thing that we seem to forget is that traditionally the offshore fishery was a south coast fishery. The towns of Burgeo, Ramea, Grand Bank, Gaultois and Harbour Breton were the ones that were centred and geared to take part in the offshore fishery.

Then all of a sudden, when people discovered the northern cod a few years ago, they decided to build plants and process this fish that normally was processed on the south coast all around the coast. There were thirty-seven fish plants, I think, that were given licences when people discovered there was northern cod. But the people who live in Burgeo always knew there was northern cod. They knew that it spawned up there, that it came down through the Gulf, and that it came down the east coast, and it was caught on the Grand Banks and brought in.

So that is why I was so happy to see a trawler from Burgeo involved in this protest. I am sure that the purpose for it was to attract media attention. As the president of the Fishermen's Union said....

SOME HON. MEMBERS: (Inaudible)!

MR. GILBERT: Mr. Speaker?

MR. SPEAKER: Order, please!

MR. GILBERT: Attracts media attention -

AN HON. MEMBER: Sit down, boy!

MR. GILBERT: Attract media attention, Mr. Speaker, so that the Government of Canada would do the job that they were supposed to do, and exercise custodial control over the Nose and Tail of the Grand Banks outside the 200-mile limit. Now everybody in this House agrees with that because we have already passed a motion to that effect.

SOME HON. MEMBERS: (Inaudible).

MR. SPEAKER: Order, please!

MR. GILBERT: However, the trawlers are back now, the media is over. There are still over 100 boats - foreigners - on the Nose and Tail of the Grand banks, scooping up this fish. We in Newfoundland have cut back on our offshore fishery. Our offshore fishery is now on hold. We are trying to do something about it. But if the foreigners continue to be out there raping and pillaging this offshore stock it is not going to do us any good. The fishermen in Burgeo who went out and protested have protested in vain unless the federal government takes the initiative and takes custodial control and control of rationing how that fish is going to be harvested on the Nose and Tail.

I was very happy - and I am sure everybody in Newfoundland and Canada - when they saw the Premier being interviewed from the United Nations in New York on Thursday night, Because the Premier was doing what the federal government should have done years ago, and we would not be in the mess we are in now. But he had to take the initiative and go down to point out the serious problems that we have -

SOME HON. MEMBERS: (Inaudible).

MR. GILBERT: I am sure when the hon. Member for St. John's East Extern looks in the mirror tomorrow morning and he is thinking about the seals, he will realise that there is a parasite that is in the faeces of the seals. I am sure he will be reminded there is something a little lower. I am sure that he will.

Anyhow, the Premier did what the federal government was supposed to do. The federal government will now possibly follow the lead again that is put forward by our Premier, and talk to the people who are causing the problems that we have on the Nose and Tail of the Grand Banks, and do the job that Canada is supposed to do - control the fisheries - so that this thing that we are doing will not be in vain. With us cutting back on the offshore fishery, it is going to ensure that there will be fish, and there will be communities like Burgeo and Ramea in three or four years time when the fish stocks are once more back to some sort of normal conditions.

The most serious thing, and the problem that nobody has addressed, is the inshore fishery on the south coast. There has been nothing extreme or critical happen to the south coast fishery. It is just one in which, over the last seven or eight years, there has been a gradual decline. I know one of the fishermen in Burgeo, Mr. Lester Green, who said to me in 1987 when I was there, Mr. Gilbert, we are here. There are only a few of us fishermen on the south coast - full-time fishermen. We are the fellows who are fishing eight, ten and twelve months of the year. Nobody cares about us because we are going out there and getting enough fish. We are managing to get our stamps, and nothing extreme happens to us. We do not have any problems. But, he said, you know if the mobile fleet, the 65 footers are up off Rose Blanche, and they are catching the fish in January and February that normally we used to catch here in March and April, we cannot catch it. At that time the French overfishing on 3Ps was a big problem. If you remember, 1987-1988 is when we talked about the French overfishing. We do not hear anything about the French overfishing now. The Frenchmen have settled their problem. The metropolitan fleet do not come any more, so now it is the draggers from St. Pierre that are out there. But the inshore fishermen along the South Coast have recognized that this has been a problem for years, overfishing in their traditional grounds, in 3Ps, 3Pn. Of course then the federal government introduced, and gave more licences to New Brunswick and Quebec to fish in the Gulf, and we have the 65 footers. So these are problems that the inshore fishermen along the south coast have had to contend with for the last ten years.

I have a couple of figures here that I think will point out what has happened. It is the inshore fishermen on the south coast that nobody has given any consideration to. The inshore fishermen along the south coast are mostly fishing with hook and line, trawls. I have the figures here for the community of Burgeo. In 1986 the fishermen in Burgeo caught 2.2 million pounds of codfish on trawls. In 1991 they caught 800,000 pounds of trawl codfish so the actual landings decreased by 1.3 million pounds for just the community of Burgeo. That happened over a five or six year period. They did not have the good fortune to have anything extreme happen to them or any catastrophe like last year on the northeast coast where you had the ice come in and there were programs put in place to take care of the northeast coast fishermen.

These fishermen have just been gradually starved to death and as I said in a radio interview at one time it is almost a form of genocide that has been inflicted on them because nobody seems to care. I was in Burgeo about three weeks ago and had a meeting with the inshore fishermen and they were frustrated and really, really upset. They felt that nobody was listening to their plea, the governments, neither provincial or federal, nor the union, and they have just been left there to starve to death. They have asked several times for someone to come in and look at their situation as peculiar and different than any other fishery in Newfoundland, which indeed it is, but nobody has ever done that. While I was there they initiated a request to the federal minister, Mr. Crosbie. The fishermen in both Burgeo and Ramea decided they would invite the federal minister to come in, meet them, and hear their concerns on a one to one basis, eye to eye.

Now, I realize that Mr. Crosbie is a busy man. I wrote him and pointed out to him that I respected the fact he was a busy man, but the fishermen of Burgeo would like to see him come and would be available to see him any time. I got a reply from someone in his office saying he would not be going. I have written Mr. Crosbie again and I have pointed out again these concerns. Even if he is too busy I have asked that one of the high officials in his department go down and hold a meeting with the inshore fishermen and look at the peculiar situation that they have on the south coast of Newfoundland, because the thing we have to remember is that while we don't know what is going to happen in the North of 50 fishery this summer, we do not know what is going to happen in the Northeast Coast fishery because that doesn't start until June sometime, but the one thing we can be sure of and the one thing we are sure of right now, is that the South Coast fishery is an abject failure. There is no one catching any fish on the South Coast this year. In Burgeo, Ramea, Francois, McCallum, Grey River they do not have enough fish to eat this winter, so they are the people who are depending on a winter fishery.

Peculiar and different as it is from all the rest of the fisheries in Newfoundland, they exist and make most of their money during the winter and spring months when the rest of the fisheries that I am talking about do not start up, so we don't know what is going to happen in the Labrador fishery this year and we don't know what is going to happen on the Northeast Coast, but we do know that they have the problems.

Now, we hear the hon. members opposite asking when are we going to put money into the fishery. I don't think, and I am sure everybody recognizes, that the problems of the fishery are not caused by the Government of Newfoundland. We have no control over what happened to the fishery. Why we are there now? There are many reasons, and as I started off saying, there are all kinds of experts to tell you why it was done.

The first one is we think there has been mismanagement. We, as the Province of Newfoundland, had no control over the management, it was the federal government decided how much fish was going to be allocated, where the quotas were and what was going to happen with the fishery as to how much was caught.

We hear the Member for St. John's East talk about the seals. We know that we have not harvested the seals for a while and we know that there is an overpopulation of seals. We do not have the scientific data to say what effect this is having on the codfish, but all of us have our ideas that there is a problem and this is one of the problems in the fishery. But we have to remember that before we can decide as a Province to do something to alleviate the problems of the unemployment that is going to come, the federal government has to come forward and take their share of the responsibility, because I can assure you, if this were Saskatchewan with a wheat failure, we would have seen a problem. Now, the feds would not be depending on last year's fisheries program, and the fishermen along the South Coast would not be waiting to see if they would have to go on relief this summer, there would have been a program in place for them. Because they have pointed out, Mr. Speaker, that they have tripled their fishing effort. In other words they were using three times the gear, and they are catching a third of the fish. So that means that their income has to be drastically reduced. This is graphically portrayed to anyone who cares to look at it, because the federal Department of Fisheries has those figures. But nobody has recognised and has been prepared to say: yes, there is a problem that is unique to the South Coast of Newfoundland. So, for that reason, we have to now look at the fishery in Newfoundland, as far as I am concerned, as actually three different fisheries, a Labrador fishery, a Northeast Coast and a South Cast fishery.

As I said earlier, the traditional offshore fishery was conducted on the South Coast. We have the communities that owe their existence, their only reason that they are there - the community of Ramea. The only reason that people settled in Ramea is because there was a fish plant there. Anyone who is there would realise there was never any intent that anyone was going farming or logging in Ramea. As a matter of fact, if you are on Ramea and you want a Christmas tree you have to go across to the mainland to get a Christmas tree. So let me tell you that Ramea is the extreme case that we can talk of a traditional offshore plant supplemented by the inshore fishermen that I am talking about here today, and the fish that was brought from the Grand Banks and from the St. Pierre bank to make that community viable.

So now what we find is that Fishery Products International control Ramea. They own Ramea, body and soul. The people in Ramea, their very souls, are controlled by the boardrooms of Fishery Products International here in St. John's. If Fishery Products decides: okay, we are going to catch the fish that traditionally went into Ramea - the redfish that came out of the Gulf. As I understand from the Fishermen's Union, right now, one of the very few stocks that is growing in our Newfoundland waters is the Gulf redfish. The people of Ramea - it must be very disconcerting when they sit there now, look out and see the Fishery Products draggers sailing by Ramea, taking the fish to another plant to be processed, and hearing that their plant is going to be open ten weeks this year, or maybe not at all.

So I think that we, as a government, when we look at the overall plan for what is going to happen in the fishing industry in Newfoundland, have to give some consideration to the traditional plants, the ones that were originally the offshore plants, because they exist for the simple reason that they were bringing this fish from the Grand Banks and the Gulf into those places. I am saying Ramea because it is in jeopardy and it is at the whim of a boardroom in St. John's.

Now, we can go to Burgeo. Burgeo is at the whim of a boardroom in Halifax somewhere, because there was a transfer when National Sea and the federal government and everybody else wanted to bail out Canso. What happened in that deal, there was a deal that the Fishermen's Union was against and the provincial government was against. When the federal government decided that they wanted to help their cousins in Nova Scotia, and they had a fish plant that was closed in Canso because it was inefficient and ineffective, they decided, okay, we will take a good, viable plant like the one in Burgeo. It is operating. National Sea must have felt that it was a great plant, because they had paid off the provincial government in 1988 the $6 million they owed, so for National Sea to put out that sort of money, they must have felt that the plant was a viable plant. National Sea had said in January of 1990, to the people of Burgeo, We are going to operate your plant ten months this year. All of a sudden, in May of 1990, this deal was concocted by Mr. Valcourt, the then Minister of Fisheries, and his buddy, Premier Buchanan. 'We have a serious problem in Nova Scotia that we want to take care of. We want to save the Canso plant, so how do we do it? Alright, we form this new company, SeaFreez. SeaFreez will take over Canso. There is a debt that National Sea owes the provincial government of Nova Scotia and that will be written off. The federal government will put $9 million into retooling the plant in Canso. We will take the quota that was going into Burgeo and we will process that now, supposedly, between Burgeo and Canso.

Unfortunately, this all happened but one thing, and we now hear the executive of SeaFreez saying that the plant in Burgeo is not capable of handling this, so we are having to process it all in Canso. In other words, the Town of Burgeo has been put in jeopardy to take care of the Tory government's buddies in Nova Scotia.

It is twelve o'clock, Mr. Speaker. I will adjourn the debate.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the President of Treasury Board.

MR. BAKER: Thank you, Mr. Speaker.

I would like to advise all hon. members that it is my intention to spend another day on the Budget debate and then, perhaps on Tuesday, to switch to some legislation. There is the public utilities legislation at which we need to have a look. There is the Wage Restraint Bill that we may be ready to deal with at that point in time. Perhaps on Tuesday, I intend to switch to some legislation.

Mr. Speaker, I would like to commend the acting, acting leader over there for the last couple of days, on the way that we have been able to co-operate. It is rather fortunate that he was there rather than the acting, acting, acting leader, with whom I am sure I would have great difficulty dealing. Mr. Speaker, I would like to congratulate him on the way things have gone.

Mr. Speaker, I move that the House at its rising do adjourn until 2:00 p.m. tomorrow and that this House do now adjourn.

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