The House met at 2:00 p.m.


MR. SPEAKER (Snow): Order, please!

The hon. the Minister of Finance.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Mr. Speaker, I move that this House resolve itself into a Committee of the Whole on Ways and Means and that the Speaker do now leave the Chair.

MR. SPEAKER: The motion is that the House resolve itself into a Committee of the Whole on Ways and Means and that I do now leave the Chair.

The hon. the Minister of Finance.

MR. DICKS: Thank you, Mr. Speaker.


Mr. Speaker, last year this government presented the first three-year fiscal plan in the history of Newfoundland and Labrador. It established priorities and restructured services. Necessity required re-invention.

This year, I am pleased to announce that the plan is working.

Mr. Speaker, last year's Budget projected a deficit of $20 million. That goal has been met. The deficit target for 1998-1999 remains at $10 million. The Budget will be balanced in 1999-2000.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: These targets are being met without any new cuts, layoffs or taxes.

Mr. Speaker, there is a strong consensus in this Province: the Budget must be balanced; extra money must go to education, health care, and those in need, and the tax burden must be reduced.

Such a strong consensus should not and will not be ignored.


1997 Economic Performance

Mr. Speaker, economic performance in 1997 was better than expected. Real GDP declined by 1.3 per cent rather than the 2.7 per cent forecast at Budget. Improved performance can be attributed to:

a 5.7 per cent increase in retail sales. Much of this can be attributed to the introduction of the HST - which represents the single largest tax cut in the history of this Province since we joined Confederation;

a 9.3 per cent increase in capital spending, which included the construction of the Whiffen Head transshipment centre and the completion of the Hibernia Platform;

a 12.6 per cent increase in the volume of fish landings accompanied by a 15.7 per cent increase in their value;

a 9.4 per cent increase in the value of mineral shipments, led by strong growth in iron ore production and the start-up of several new mines;

a 3.8 per cent increase in newsprint shipments;

a 5.2 per cent increase in total exports;

a 22 per cent increase in the number of tourists represented in part by a 220 per cent increase in convention activity in the St. John's area alone, and this, of course, was boosted by the success of the Cabot 500 celebrations and, of course, earlier than expected

oil production at Hibernia.

At the end of 1997, year-over-year employment had increased 4.8 per cent -

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: - from 182,000 people to 190,800. Our unemployment rate dropped 2.8 percentage points year-over-year. While the unemployment numbers are still far too high, this is significant progress. All these statistics indicate that our economic prospects are improving.

Economic Outlook

Mr. Speaker, we can look to the future with optimism. Resource development spending will continue. Manufacturing and exports of oil and fish products will increase.

We forecast that the economy will grow by between 4 and 4.5 per cent in real terms this year. This is in line with third-party forecasts. Strong economic growth will continue in 1999 due to major investments in Voisey's Bay and Terra Nova, as well as increased oil production at Hibernia.

We welcome this turn of events. These will be the first years of significant growth after several years of economic decline. The 1990s have been difficult years for Newfoundland and Labrador. The effects of the groundfish moratorium and the recession of 1991-1992 are still being felt in our economy. However, while provincial GDP will increase, and at a substantial rate, government revenues will not grow at the same pace.

We must therefore, keep on track with continued fiscal restraint and prudent management of public finances if we are to attain our goals of providing efficient services, reducing taxes, and stimulating economic growth.

Fiscal Outlook

During the election campaign of 1996, we said in our platform, and I quote:

1996 and 1997 will be difficult years for our province's economy. They will be difficult years for the provincial government's finances.

The outlook for the years that follow is a much improved economy and fiscal situation. Strong economic growth is expected in 1998, 1999, 2000 and thereafter.

However, the provincial government's overall revenues will grow more slowly than the economy, in part because equalization payments go down as receipts from taxes and royalties go up. I end quote.

Mr. Speaker, as a result of this GDPs growth, people's expectations of government are also increasing.

Let me repeat: while GDP growth will be strong over the next few years, provincial government revenues will not grow at the same rate. Mineral and oil tax regimes provide for a payback period which allows project owners to recover capital costs from production revenue. While developers are recovering their capital costs, government's tax and royalty collections are low. Once the payback period is over, provincial resource royalties will rise as a share of project revenues.

However, as revenues increase, equalization transfers from the federal government decrease. On average, as much as 84 cents of every revenue dollar received by the provincial government will be deducted from equalization transfers. This will diminish the money available to finance provincial programs or to reduce taxes.

Therefore, we must resist demands for new spending we cannot afford, unless we are prepared to increase taxes, lay off employees, or borrow more money.

Our approach will be continue to manage our finances prudently, so that the benefits of Hibernia, Voisey's Bay, the Churchill River, and other developments can be used to reduce taxes, pay down debt, and improve our health, education and other essential services.

The Public Service

Government recently negotiated a 7% pay increase over 39 months with several of our public sector unions. This is the maximum the the public's finances can afford at this time.

To those members of the public service who believe that Government can afford more than it is offering, let me be clear: It is the people's finances we are managing. It is the people's bank account. A 7% increase is fair. A 7% increase is all we can afford. There is no more money. We will not increase taxes. We will not cut services. We will not borrow money to give a larger increase that government can afford at this time.

Public Sector Pensions

Mr. Speaker, let us also consider our pension plans. The unfunded liability of our public sector pensions represents a substantial portion of the accumulated total debt of the Province.

The magnitude of the unfunded liability threatens the long-term viability of our pension plans, as well as the benefits pensioners expect to receive. We have taken steps to address unfunded liabilities in some plans, and we have received the co-operation and support of most public sector employees. However, without the full co-operation of all employees, we cannot finish the task.

Government is accepting its share of the unfunded liability. Employees must also accept their full and fair share. Our three year fiscal plan makes provision for substantial payments to reduce the unfunded liability. We will continue making these payments until our obligation is fulfilled.


Teachers' Pension Plan

Teachers have a separate pension plan that has an unfunded liability of $1.6 billion.

Unless something is done, the teachers' plan will require deficiency payments of $121 million in 2004, increasing each year thereafter and, in fact, runs out of money in the 2003. This money cannot, and should not, be found from cuts to services or increased taxes to fund benefits that teachers themselves have not paid for.

It is in the best interest of teachers to work with government on a fair and equitable solution of this problem. It is a joint responsibility, not solely that of Government and taxpayers. We stand ready to make the investment in the Teachers' Pension Plan and we stood so for some time but time is running out and this is not a problem that will go away.

MHA Pensions

Members on both side of the House recognize that the pension arrangements for members of the House of Assembly need to be reformed. Government will be introducing appropriate changes to that plan during this session. Effective immediately, the following measures will be implemented for all members of the House of Assembly:

Pension contributions will be increased from the present 7 per cent to 8 per cent effective April 1, 1998, and to 9 per cent effective April 1, 1999.

The benefit accrual rate will be adjusted to provide maximum benefit after twenty years of service, for new members, instead of the current seventeen years.

Finally, the stacking of Canada Pension Plan benefits, on top of MHA pensions, will end immediately. Mr. Speaker, after today, the only public employee group in this Province to retain stacking privileges will be teachers.

Tax Reform

Mr. Speaker, we recognize that Newfoundland and Labrador is one of the highest taxed jurisdictions in North America. This must change. Last year, we introduced the HST, which reduced the combined federal-provincial sales tax from 19.84 per cent to 15 per cent. This was the single largest tax cut in our Province's history.

The recent federal budget provided Canadians with personal income tax relief in several areas. Since provincial income tax is calculated as a percentage of the federal tax, these new reductions will lower personal income taxes by more than $30 million, of which $12.5 million comes from the Provincial Treasury. We are pleased with and support these tax reductions.

We are also concerned that the payroll tax is a disincentive to employment. In principle, we support its elimination over time, but fiscal circumstances make it impossible to surrender the $46 million of net revenue that it represents to the Treasury.

However, we are committed to making first steps. Currently, the first $100,000 of annual payroll costs are exempt from the Province's payroll tax. Mr. Speaker, I am pleased to announce today that, effective for the 1998 taxation year, the exemption will be raised to $120,000.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: This measure will benefit all businessmen in the Province, particularly small business operators. In excess of 225 small businesses will be removed from the tax rolls and approximately $1 million will be put back into the hands of the business community for further investment.


Mr. Speaker, we must search for new, innovative reforms in health care, social programs, and education. We must invest for the long-term in prevention and early intervention. We must become less institutional, more integrated with the community, and more focused on the individual needs of people.


Mr. Speaker, the federal government must fairly share with the provinces the cost of universal health care. That is why, only days ago in Ottawa, the Newfoundland and Labrador delegation led the charge to increase federal health care funding at the Biennial Convention of the Liberal Party of Canada. A Newfoundland and Labrador resolution was passed that proposed that health care be the highest investment priority for any fiscal dividend from the federal government.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: We repeat that call here today. Now that the federal deficit has been eliminated, the first priority of the federal government should be the restoration of health care funding.

In the meantime, we will do everything within our financial power to maintain stable health care funding and make further strategic investments for 1998-1999.

Mr. Speaker, we are addressing the shortage of medical personnel in our rural areas. Last year we raised the salaries of rural physicians; increased compensation packages for doctors providing emergency room care; provided $300,000 for the Nurse Practitioner Program; and established Rural Primary Care Service and Teaching Units in Port aux Basques, Twillingate, and Happy Valley - Goose Bay.

This year we are continuing to make strategic new investments in institutions and community health, equipment, services and facilities.

To maintain a healthy society, we must provide for appropriate education and services in the community, as well as in our institutions. We are, therefore, increasing the budgets for community health by $2 million.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Mr. Speaker, we acknowledge the increasing pressures on the delivery of acute and long-term care. Last summer, we increased funding for health care institutions by an additional $20 million. Today, we are announcing another $10 million for our health care institutions. This means that there will be an additional $30 million to help stabilize hospital budgets in 1998-1999.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: We will work closely with our institutions over the course of this year to implement a long-term strategy to deal with the operating deficits of hospital boards and provide for better accountability.

Mr. Speaker, we are making strategic investments in equipment, services, and facilities to improve our health care system. This year, we will invest: $2.8 million in our drug program; $500,000 to restore the Non-Emergency Medical Transportation Assistance Program. This assists with the costs of those who must access health care services not available in their area of the Province, and for those who are referred outside the Province for specialized health care services.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: This year again, Mr. Speaker, we are investing another $3 million for new hospital equipment.

Mr. Speaker, last year, approval was given to the St. John's Health Care Corporation to renovate St. Clare's and the General Hospital, expand the Cardiac Surgery Ward at the General Hospital, and construct a new Janeway Children's Health and Rehabilitation Centre, all of this at a cost of $130 million.

We must also improve facilities in other areas of the Province. This year, we are continuing with construction of a new hospital at Harbour Breton, the redevelopment of the James Paton Memorial Hospital in Gander, and, thanks to the generous contribution of the Voisey's Bay Nickel Company, a new hospital in Happy Valley - Goose Bay.

We are announcing today a multi-year plan for additional health care facilities throughout the Province: The Blue Crest Nursing Home and the hospital in Grand Bank will be replaced by a new multi-purpose facility for long-term and acute care.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: The Carmelite House Nursing Home in Grand Falls - Windsor will be replaced by a new long-term care facility.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Mr. Speaker will be very happy to hear that the cottage hospital in Old Perlican will be replaced by a new community health centre.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: New multi-purpose health care centres will be built in Fogo and Bonne Bay -

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: - replacing cottage hospitals of many years duration.

A new hospital will be constructed for the Stephenville - Port au Port - Bay St. George area.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: And planning and design work will commence later this year to address identified needs at the Dr. G. B. Cross Memorial Hospital in Clarenville.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: These new expenditures, coupled with last year's commitments, represent an investment of more than a quarter of a billion dollars in improved health care facilities in Newfoundland and Labrador.

This is not a wish list. What we are announcing today represents, in each and every case, facilities identified for replacement many years ago. Some are Commission of Government era hospitals, some are wooden old age homes. In each case, their replacement was deferred because of fiscal restraint. They can no longer be deferred. They are the top priorities of the Department of Health.

We will continue to review the need for new health care facilities and make appropriate investments from time to time as we can afford them.

Mr. Speaker, through increased investments in health professionals, institutional and community health budgets, equipment, services and new facilities, we are continuing to provide for the health care needs of the people of Newfoundland and Labrador.

SOME HON. MEMBERS: Hear, hear!


MR. DICKS: Mr. Speaker, history will judge last year's education referendum as the most significant change of the last fifty years in this Province - a defining moment when we turned the page on the past to shape our educational system for the future.

Education reform is about providing our children with the best school system possible. This means clean air, good schools, learning materials, and the right number of teachers.

Achieving these objectives, Mr. Speaker, means investing in education, and that is what we propose to do.


Mr. Speaker, government recognizes that some new school construction is necessary and that many of our existing schools are in need of repair. These repairs were deferred for years because of restraint. It is now time to make these needed repairs.

Air quality control problems will be addressed.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: That means clean air in every classroom, in every school in the Province.

We are, therefore, announcing a significant investment in our education system. Today, we are making available $50 million toward school construction and upgrading -

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: This $50 million will be spent over the next two years.

I am announcing today the formation of a new entity, the Newfoundland and Labrador Education Investment Corporation. Government, through the Corporation, will review capital investment plans submitted by school boards, determine priorities, and develop a multi-year plan for investment.

Mr. Speaker, in recent years, our capital investment in schools, because of fiscal restraint, has been reduced to as low as $4 million annually. The $50 million investment I am announcing today represents the largest example of government's commitment to reinvesting in education. However, we are investing in other areas as well.


For many years, the number of teachers allocated in the Province has been determined by the number of students.

The number of students decreased last year by 4,600, and will decrease another 4,000 this year. Ordinarily, these declining enrolments would have meant a reduction of 425 teaching units. As student numbers decline, however, it becomes more difficult to provide quality education to our young people if teacher reductions keep pace.

Determining the right number of teachers is a matter or art, not mathematics. We are, therefore, limiting the reduction in teaching units in 1998-99. As we announced nine days ago, we will "add back" about 200 of the 425 teachers that the existing formula would have eliminated.

Special Needs Students

Mr. Speaker, we have reviewed The Report of the Review of Special Education. Dr. Patricia Canning conducted a comprehensive examination of the special education needs of our children. We are responding to that report with new investments in special education.

We are announcing today an additional seventy teaching units to help those children with special needs and disabilities.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: This represents an additional $3.3 million annual investment in our children. Teachers will be added for children with learning disabilities, emotional/behaviourial disorders, traumatic brain injury, fetal alcohol syndrome, and autism.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: We will also provide $250,000 for educational materials suited to children with learning disabilities, and a further $250,000 for early literacy programs.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: The Departments of Education, Health, Justice, and Human Resources and Employment will work together to provide individual care for special needs children, and support for their parents.

Post-Secondary Scholarships

Mr. Speaker, good primary and secondary schooling is the necessary foundation for later learning. Post-secondary education is becoming a prerequisite for later employment.

Many students need further support to complete their post-secondary education. The Government of Canada recognized this need in their recent Budget, announcing the Canada Millennium Scholarship for this year 2000. For the next two years, however, no money is available.

Mr. Speaker, we have consulted with student leaders on the financial hardships facing students.

Today, I am happy to announce that the provincial government will provide $4 million for awards to students based on need and academic achievement.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: More than 4,000 awards of up to $1,000 each will be available over the next two years until the introduction of the Canada Millennium Scholarships.

SOME HON. MEMBERS: Hear, hear!

Memorial University of Newfoundland

MR. DICKS: Government has agreed to match private sector donations to the Memorial University Opportunity Fund. This year, we honour that commitment with another $3 million. This is in addition to the $6.3 million we committed to the Fund in last year's Budget.

College of the North Atlantic

The College of the North Atlantic has evolved over the years to keep pace with labour market demands, offering courses geared to the different regions of the Province. To ensure that it continues to provide a first-rate education to its students, the grant to the College will be maintained at its current level. In fact, with increased federal/provincial training purchases under the Labour Market Development Agreement, the College will receive approximately $2 million more to meet education and training needs.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: With these increases, government is demonstrating its commitment to the publicly-funded post-secondary education system in our Province.

SOME HON. MEMBERS: Hear, hear!


MR. DICKS: The energy, commitment and vigour dedicated to education reform must now be directed to the reform of our social programs. New ideas and innovative measures are needed to bring meaningful change.

The Social Policy Advisory Committee held over 100 meetings with 1,500 individuals from 130 communities on a new direction for social policy in this Province. Their conclusion reflected the public assessment - the status quo is no longer acceptable.

A New Focus

The mandates of two departments will be changed. Last year, we announced phase one: the creation of the Department of Human Resources and Employment.

The second phase begins on April 1 this year with community services moving from the Department of Human Resources and Employment to an enlarged Department of Health and Community Services.

The new Department of Health and Community Services will integrate children and family health services through existing regional community health boards. These boards will undertake new responsibilities for Child Welfare, Youth Corrections, and Family and Rehabilitative Services.

Meeting Basic Needs

Mr. Speaker, we recognize that the 32,800 individuals and families on social assistance have the lowest levels of income in the Province and, indeed, in this country. Therefore, we are increasing monthly allowances by 7 per cent over the next three years.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: This will commence May 1st with a 2 per cent increase. Social assistance recipients will receive the same rate of increase that we have negotiated with our public sector unions.

In addition, we will dedicate $400,000 to a new Cost of Living Allowance for families with dependent children living on the Labrador Coast.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: This extra $150 a month will help purchase basic items such as food and fuel on the Labrador Coast, where the costs are much higher than in other areas of the Province.

Getting a New Start

Mr. Speaker, we must help those in need provide for themselves and their families. The best way to assist people is to help them find a job. Government must do all it can to encourage self-reliance. We must, therefore, take steps to remove the barriers to employment.

Currently, most families who receive additional income lose 50 per cent of every dollar up to $200 - the maximum exemption being $100 per month. Effective June 1, 1998, families will be able to retain the first $150 earned, with no reduction in benefits.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Many single parents collecting social assistance have told us that they are often "worse off" financially by accepting employment at the minimum wage. Government must find ways to correct this. This year, in conjunction with the Single Parents Association of Newfoundland, we will conduct a $500,000 pilot project with 100 to 200 families to explore means of support that will enable them to maintain employment.

Government will also provide $4.4 million for wage subsidies for up to 1,200 people to obtain meaningful employment in the private and non-profit sectors.

SOME HON. MEMBERS: Hear, hear!

Youth Employment

MR. DICKS: Government recognizes the problems faced by young people as they try to make the difficult transition from school to work. This year, more than $7.5 million will be directed towards youth programs. These will target post-secondary students, youth "at risk" of becoming dependent on long-term income support, and youth seeking first jobs and work experience. Over 2,500 jobs for young people will be supported through wage subsidy initiatives. This includes $2.1 million for the Student Work and Services Program. These initiatives are in addition to the $4 million in new scholarships announced earlier.

SOME HON. MEMBERS: Hear, hear!

Helping Those With Disabilities

MR. DICKS: Mr. Speaker, over the years, people with disabilities have made considerable progress in the workplace. We must ensure that these efforts continue. To this end, government is finalizing an $8.2 million, 50:50 cost-shared agreement with the Government of Canada to provide employment and training support to those with disabilities. Employment programs and services currently offered to people with disabilities will continue to be available in 1998-99.

Through the Opening Doors Program, government employs people with disabilities in the Public Service. This year we are pleased to announce an expansion of these services. In cooperation with the Government of Canada, an additional $1 million will be used over the next two years to create new public sector employment opportunities for persons with disabilities.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: In February, the disabled community in our Province lost a distinguished ambassador - Ms Debbie Prim. She was a dedicated volunteer and an accomplished athlete. In her memory, government will provide $88,000 to assist wheelchair athletes attending the 1999 Canada Winter Games in Corner Brook.

SOME HON. MEMBERS: Hear, hear!

New Transition Homes

MR. DICKS: Mr. Speaker, to provide shelter, counselling and referral services for battered women and children, government will establish core funding for two new Transition Homes - in Nain and on the Burin Peninsula.

SOME HON. MEMBERS: Hear, hear!

School Children's Food Foundation

MR. DICKS: Mr. Speaker, if we are to educate children properly, we must nourish their bodies as well as their minds. The School Children's Food Foundation of Newfoundland and Labrador does valuable work with limited means to meet the nutritional needs of children throughout the Province.

Government is pleased this year to provide the Foundation with a $1 million endowment to expand its efforts.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: We invite school boards, school councils, community agencies, and the private sector to join us with their support.

National Child Benefit

Mr. Speaker, we must provide all children of this Province with equal opportunities, regardless of family income.

If children of low-income families have: first-rate schools, proper nutrition, access to proper health services, and an opportunity for advanced education, then they will break the cycle of dependence and poverty.

This is the goal of government.

Mr. Speaker, when the National Child Benefit is implemented this July, it will be Canada's first new social program in thirty years. This program will bring the federal and provincial governments together to improve the lives of millions of Canadian children.

Let us clearly understand how the National Child Benefit works:

The federal government will provide low income families with an increase in the Canada Child Tax Benefit. This increase, called the National Child Benefit, will provide an additional $605 annually for the first child of a family; $405 for the second child; and $330 for each additional child.

Provincial social assistance benefits to families with children will decrease by the same amount.

Mr. Speaker, let me emphasize: there will be no loss of income for social assistance families. They will receive the same amount. Part will come from social assistance and the remainder from the National Child Benefit. For low-income working families not receiving social assistance, the National Child Benefit will increase the benefit level available to them.

The National Child Benefit frees up $10.15 million annually in provincial social assistance funds. The Province will reinvest every last penny in programs and services for low-income families.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: These include:

$1.15 million for additional Family Resource Centres,

$4.6 million for the improvement and expansion of licensed child care services in the Province, including: additional child care subsides; the introduction of licensed family home child care, and the introduction of licensed infant child care,

$2.8 million to establish regional youth service networks, in partnership with existing community programs, and

1.6 million to assist families on social assistance who find work by: increasing the child care expense deduction, and; extending full drug card benefits for families for a period of time after they are no longer eligible for social assistance.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: New legislation governing child welfare services and the licensing of child care services will be provided in this Session of the House. Community participation will be sought in planning and implementing these changes.

Mr. Speaker, these efforts, taken together, will allow families to gain greater independence and secure more employment opportunities.



Mr. Speaker, this year, government will manage the largest ever highway construction program in the history of Newfoundland and Labrador - a total of $108 million in new expenditures on 453 kilometres of highway.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Mr. Speaker, this amount includes $36 million for the construction of the Trans-Labrador Highway:

130 kilometres between Cache River and Churchill Falls will be upgraded,

42 kilometres between Churchill Falls and Wabush will be resurfaced, and

the environmental assessment, engineering and planning for the section between Red Bay and Cartwright will be completed.

On top of these investments on the Trans-Labrador Highway, government will spend an additional $72 million on provincial road construction and improvements. Under the Federal - Provincial Transportation Initiative, $56 million has been tendered this year for work on the Trans-Canada Highway and major trunk roads.

SOME HON. MEMBERS: Hear, hear!

Ferry Services

MR. DICKS: This year, for the first time, government will take responsibility for the coastal Labrador ferry services. This transfer of responsibility from the federal government was a major part of the $350 million Labrador transportation initiative signed last spring. These funds have been dedicated by legislation for improvement of Labrador's transportation infrastructure.

We will be making positive changes to the coastal Labrador ferry rates and schedules. There will no rate increases for the first time in five years.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: In most cases, minimum rates for shipping freight and vehicles will be reduced. The rate changed to ship heavy equipment to community councils in Labrador, for example, will be cut in half.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: We will continue to work with communities on the Labrador Coast to make the service more responsive to their needs

Mr. Speaker, the former MV Prince Edward will be integrated into the Fogo - Change Islands service. The ferry currently in use there, the MV Beaumont Hamel, will transfer to the Bell Island service to join the MV Flanders. These changes will provide a more efficient service to these communities. As well, $1 million in improvements will be made to their docking facilities.

SOME HON. MEMBERS: Hear, hear!

Local Government

MR. DICKS: Government is committed to investing in our communities and alleviating municipal debts. We will spend $26.6 million to improve municipal infrastructure in communities throughout the Province.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Before year end, $3 million will be invested in the Newfoundland and Labrador Municipal Financing Corporation to again assist with municipal debt restructuring.

St. John's Civic Centre

As was the case last year, Mr. Speaker, government remains committed to working with the appropriate municipal governments, the private sector, and the federal government toward the construction of a regional civil centre for the St. John's area.


Under the new Canada - Newfoundland and Labrador Comprehensive Economic Development Agreement, $15 million will be dedicated to export trade, strategic sector development, entrepreneurship, community economic development and technology.

An additional $7 million will be allocated under the Province's own Strategic Enterprise Development Fund to support business opportunities in strategic growth sectors.

To ensure successful business and regional development, our human resources must also receive strategic investments. Through the Canada - Newfoundland and Labrador Labour Market Development Agreement, in excess of $100 million will be invested this year. This will ensure that human resource and employment development efforts will be linked with strategic development opportunities in other areas of the Province.

Government will focus on emerging growth sectors of the economy, including aquaculture, information technology, biotechnology, adventure tourism, telefilm and small-scale manufacturing.

Rural Revitalization

Mr. Speaker, eighteen of the twenty Regional Economic Development Boards have developed their strategic economic plans. The Cabinet Committee on Rural Revitalization has met with seventeen of them to determine the top five development priorities in each zone and work on real opportunities for growth.

These have included: snowmobile trails on the Northern Peninsula to extend the tourism season; a rural information technology Centre of Excellence in Clarenville; eel aquaculture in Robinsons; pharmaceutical applications for seaweed in Ile-aux-Morts; small-scale manufacturing in Bishop's Falls; technology applications for mining in Labrador West; and trade opportunities at Gander International Airport.

Mr. Speaker, government is acting on its commitment to rural revitalization, providing opportunities for people in rural communities.


The federal government has announced that The Atlantic Groundfish Strategy will end in August. The federal government undertook this program because it was responsible for the collapse of groundfish stocks. These stocks have not yet recovered. The need and responsibility for a replacement program for TAGS is clear. We will continue to press the federal government, once again, to accept it responsibility and quickly institute an appropriate replacement for TAGS.

Components of this replacement program should include early retirement, license buy-outs to reduce capacity in the harvesting sector, income replacement support, labour market adjustments measures, and economic diversification.

A replacement program is crucial for rural communities that have to adapt to the economic realities of the groundfish collapse.

Fisheries & Aquaculture

Mr. Speaker, this government has placed special emphasis on fisheries diversification, value-added initiatives, aquaculture development and quality assurance. In 1997, the value of fish products was $575 million, driven mostly by a health shellfish sector. Ten thousand people were employed in harvesting; another 10,000 worked in processing.

This past year has seen the opening of the inshore-based northern shrimp fishery, a resource which has helped many of our communities severely impacted by the groundfish collapse. Government has been firm in discussions with the federal government that priority access to any future quota or increases of northern shrimp of our shores must be allocated to adjacent inshore harvesters. This new inshore fishery has the potential to generate in excess of $100 million annually.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: As well, it has an export value of over $200 million.

This year, government will invest $400,000 in new fisheries, with an emphasis on the commercialization of underutilized species. We will also invest in a new market promotion program.

For the first time in Newfoundland and Labrador's history and, indeed, Canada's, a new partnership model will be used to reach agreements on fish prices without the use of strikes or lockouts. Government will assist by providing $150,000 to implement recommendations of the Task Force on Crab/Fish Price Settlement Mechanisms.

The aquaculture industry is positioned to expand significantly over the next several years. Production is projected to increase from 1,600 metric tonnes this year to approximately 3,000 tonnes in 1998. By the year 2000, aquaculture's export value could reach $40 million and provide employment for 900 people in rural areas of our Province.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: This year, government will invest $10 million in developing our aquaculture industry, including a $9.5 million contribution from the Economic Renewal Agreement. This will support industry-related research and development by completing the Aquaculture Research Facility at the Ocean Sciences Centre in Logy Bay and the Aquaculture Resource Centre in Bay D'Espoir.

A more sustainable, more diversified fishery is emerging. Government remains firmly committed to the revitalization of our fishing industry. The fishery will always play a critical role in the economy of our Province, especially in our rural communities.


Mr. Speaker, we are continuing to make investments in the growth of our forest sector. We are, therefore, pleased to announce an additional $500,000 for forest access roads, for a total of $2 million to be invested this year.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: These will provide jobs in construction and sawmilling.

Silviculture will proceed on 11,400 hectares of land in the form of planting, thinnings, and site reclamation. In partnership with the federal government and industry, we will protect these investments in silviculture with a $10 to $15 million expenditure for insect control.


Tourism offers new potential for prosperity. Through the Economical Renewal Agreement, we will invest $3.7 million this year on marketing and developing tourism infrastructure.

The Cabot 500 Year was a landmark for our tourism industry. Non-resident visitors increased by 22 per cent for a gain of nearly 69,000 tourists. Convention activity in the St. John's area was up by 220 per cent. We will build confidently on this success. This year, $1.5 million is being allocated to plan new events for 1999 and 2000.

Soiree '99 is an invitation to our fellow Canadians and the world to celebrate Newfoundland and Labrador's first 50 years in Confederation, and our deep and lasting loyalty to this great country.

Soiree '99 will coincide with the 1999 Canada Winter Games in Corner Brook. In preparation for the Games, an additional $445,000 will support lasting improvements to the Stephenville Training Centre and the Arts and Culture Centre Pool in Corner Brook.

The Viking 2000 Celebrations will showcase early Norse settlers at L'Anse Aux Meadows, the only authentic Norse site in North America.

Heritage Foundation

Government will also dedicate $600,000 to the Heritage Foundation of Newfoundland and Labrador so that it can continue its good work throughout this Province.

Art Procurement Program

In support of our artists, government will provide again this year an additional allocation of $100,000 for the Art Procurement Program which is an extension of the $100,000 we gave last year. In total, this brings this year's allocation to $200,000.

Softworld '98

Information technology is one of the fastest growing sectors in Newfoundland and Labrador today. Softworld is the information technology sector's premiere event of the year, showcasing companies from around the world. This year, Newfoundland and Labrador will host 750 senior executives from more than 30 countries at Softworld 98 here in St. John's. It promises to be the largest Softworld ever.

SOME HON. MEMBERS: Hear, hear!

MR. DICKS: Government will work with our industry leaders to maximize trade and partnering opportunities for local companies.

Film Tax Credit

Last year, Government targeted the television and film industry as a new opportunity for economic growth with the establishment of the Newfoundland and Labrador Film Development Corporation. This is a highly competitive business, both nationally and internationally. Other jurisdictions have effectively utilized their tax systems to stimulate economic and employment growth in this field.

Government believes the tax system can be structured to stimulate the industry in Newfoundland and Labrador. After consultation with the Film Development Corporation and industry, the government will, this year, move quickly to implement a competitive film tax credit in this Province.

SOME HON. MEMBERS: Hear, hear!


MR. DICKS: Newfoundland and Labrador is now an oil-producing Province. We are moving toward further development of the hydroelectric potential of the Churchill River system. And, we are moving toward developing the nickel deposit at Voisey's Bay.

The value of our fishery, while still suffering from the collapse of groundfish stocks, is increasing because of shellfish landings. Our forest sector is doing well. Tourism is expanding. Aquaculture is developing. Information and biotechnology industries area advancing. Manufacturing and small enterprises in our rural and urban areas are growing.

Nr, Speaker, our prospects have never looked better. however, prospects do not pay the bills. Voisey's Bay has generated growth only indirectly through increased mineral exploration. Hibernia royalties are welcome, but modest. The new Churchill Falls Projects will not produce power until 2007.

Revenues from these projects will not reach the public treasury for some years to come. That means we must stay the course and manage our finances wisely.

The alternatives - to raise taxes, to make deeper cuts to essential services, or to borrow - are alternatives the people of this Province have rejected.

We will use our limited financial resources to provide better care for the sick and elderly, a first-rate education for our children, new opportunities for those with disabilities, and support for those with low and middle incomes to help them attain work and achieve independence.

Mr. Speaker, in closing, I remind all of us that the Budget Speech is nothing more and nothing less than a public accounting of the finances for the people of this Province.

Every claim made for more expenditures is not a claim against the government's account, but rather a claim against the public's account.

That is why we must remember that a budgeting exercise is fundamentally an exercise of making choices. The choices we have made today reflect our best judgement as to the values that the people of Newfoundland and Labrador give highest priority.

Mr. Speaker, we must balance the public's account. So, too, must we balance the opportunity for fulfilment to those who are least advantaged amongst us.

Mr. Speaker, this is our message. It is possible to be firm, but fair - responsible, but responsive - in the pursuit of eliminating both our fiscal and social deficits.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

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

MR. DICKS: Thank you, Mr. Speaker.

Mr. Speaker, I move that the debate be adjourned until tomorrow, Friday, at 9:00 a.m.

MR. SPEAKER: The motion is that the debate be adjourned until tomorrow. You have heard the motion.

On motion, debate adjourned until tomorrow, Friday, at 9:00 a.m.

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

MR. DICKS: Mr. Speaker, I wish to inform the House that I have received a message from His Honour, the Lieutenant-Governor.

MR. SPEAKER: All rise.

The message is addressed to the hon. the Minister of Finance and Treasury Board:

" I, the Lieutenant-Governor of the Province of Newfoundland and Labrador, transmit estimates of sums required for the public service of the Province for the year ending March 31, 1999, in the aggregate of $2,882,076,000 and in accordance with the provision of the Constitution Act, 1867, I recommend these estimates to the House of Assembly."


A. M. House, Lieutenant-Governor

We will take a few moments now to have the documents distributed to the hon. members.

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

MR. DICKS: Thank you, Mr. Speaker.

I move that the Message, together with the Estimates, be referred to a Committee of Supply.

MR. SPEAKER: It is moved and seconded that the Message from His Honour the Lieutenant-Governor, along with the Estimates, be referred to a Committee of Supply and that I do now leave the Chair.

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


Committee of the Whole

CHAIR (Penney): Order, please!

The hon. the Government House Leader.

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

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

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

MR. PENNEY: Mr. Speaker, the Committee on Supply has considered the matters to it referred, and has asked me to report progress, and asks leave to sit again.

MR. SPEAKER: The Chairman of the Committee of the Whole on Supply reports that the Committee has considered the matters to it referred, has directed him to report progress, and asks leave to sit again.

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


Notices of Motion

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

MR. TULK: Mr. Speaker, I move that the remaining Orders of the Day do stand deferred and that this House, at its rising, do adjourn until tomorrow, Friday, March 27, at 9:00 a.m, and that this House do now adjourn.

On motion, the House at its rising adjourned until tomorrow, Friday, at 9:00 a.m.