March 22, 1994                HOUSE OF ASSEMBLY PROCEEDINGS           Vol. XLII  No. 17


The House met at 2:00 p.m.

MR. SPEAKER (Dicks): Order, please!

On behalf of hon. members I would like to welcome to the public galleries fifty-two students from Whitbourne Central High School, in the district of Bellevue, accompanied by their teachers, Mr. Roy Gosse and Donald Skinner.

SOME HON. MEMBERS: Hear, hear!

Statements by Ministers

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

DR. KITCHEN: Thank you, Mr. Speaker.

Mr. Speaker, I would like to take a few moments to acknowledge that March is Nutrition Month in Canada.

The Department of Health places great emphasis on good nutrition, largely because of its importance in preventative medicine. Recent initiatives have emphasized the health benefits that can be realized from a healthy and active lifestyle which includes appropriate diet. Public awareness campaigns have made an effort to demonstrate to Newfoundlanders and Labradorians that a healthy lifestyle will substantially reduce the risk of heart disease, stroke, cancer and a number of other serious illnesses.

Mr. Speaker, in many cases, illnesses requiring extensive medical treatment and hospitalization can be prevented by healthy living. In keeping with government's goal of focusing on long-term solutions to health care through preventative measures, we are establishing regional community health boards across the Province whose mandate includes health promotion and illness prevention.

Children, especially, have much to benefit from educational campaigns. The Canadian and Newfoundland Dietetic Associations have recognized the need to reach young people through education and awareness programs. The theme of Nutrition Month is "Nourishing our Children's Future". The Newfoundland Dietetic Association is working towards creating healthy eating habits that contribute to the physical and emotional well-being of our children. The Department of Health, in particular our Health Promotion Division, is committed to working with the Newfoundland Dietetic Association to reach these common goals, not only during Nutrition Month, but throughout the year. As parents, teachers and citizens, it is our responsibility to emphasize the importance of nutrition and to set an appropriate example for the Province's youth.

Mr. Speaker, I would like to extend my support to the efforts of the Newfoundland Dietetic Association. As well, I encourage all Newfoundlanders and Labradorians to recognize Nutrition Month and the importance of disease prevention through maintaining a healthy lifestyle.

Thank you.

SOME HON. MEMBERS: Hear, hear!

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

MR. CAREEN: Thank you, Mr. Speaker. In the absence of my colleague for Ferryland who is the critic for health and on behalf of my colleagues here today, I would like to extend support to the Newfoundland Dietetic Association and their theme for the children but I wonder where the minister has been, March is nearly over. I guess he has other priorities but anyway they claim that the regional community health boards will promote this but what I've been given about the community health boards is that they are amalgamating across the island, their chief mandate is to save money. Also this government's history over the past five years has been one of a force feed diet. Force feed diet on the people of this Province on a diet of grits. Well today I'm glad to hear that people are getting sick and tired of grits, Mr. Speaker, getting tired of grits. They know the price of everything and the value of nothing. Thank you.

SOME HON. MEMBERS: Hear, hear!

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

MR. GRIMES: Thank you, Mr. Speaker.

I rise to provide an update with respect to discussions regarding the Income Supplementation Proposal that was publicly released on December 14, 1993 and subsequently forwarded to the federal government for consideration.

While there is no immediate prospect that the proposal in its entirety as developed by the Economic Recovery Commission will be introduced this year, the federal government has expressed considerable interest in the concepts that form the foundation of the proposal (particularly the shift from obvious disincentives to an incentive-based approach) and the federal government has established with the Province a work plan consisting of 12 different elements. Federal and provincial officials have been assigned to work on each of these elements including technical components, implementation scenarios and cost impacts.

The federal government has raised the idea of introducing the education supplement component of the Income Supplementation Proposal as a pilot project in our Province in the coming fiscal year. Discussions are in the preliminary stages and a public update will be provided at the earliest opportunity.

As well, the Province will participate fully in the overall national social security reform agenda that the federal government is pursuing over the next two years with a view to having some form of income supplementation as a fundamental component of any future social security program for the country.

The federal and provincial governments are also exploring the possibility of joint parliamentary hearings in Newfoundland and Labrador as a way of ensuring effective consultation with the people of this Province on both the broad social security reform agenda and the Income Supplementation Proposal.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

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

MR. E. BYRNE: Thank you, Mr. Speaker. I am astounded today that this government is completely and still considering the Income Supplementation Program. The minister just announced that the federal government is looking at this with considerable interest. I say to my colleagues in the House I guess they are looking at it with considerable interest. In raising the qualifying weeks of UI from ten, twelve to twenty, I guess they are looking at it with some considerable interest. This program is an attack on seasonal employment in this Province, is an attack on seasonal industries and if the government pursues it they will encounter the same if not more of the violent opposition they have incurred on Hydro.

SOME HON. MEMBERS: Hear, hear!

MR. E. BYRNE: And finally, Mr. Speaker, I'd like to say that if this government plans federal hearings -

MR. SPEAKER: Order, please!

The hon. member's time has elapsed.

MR. J. BYRNE: - or provincial hearings, consultation is a new concept to their mandate and their type of governing.

Thank you.

MR. SPEAKER: Does the hon. the Member for St. John's East have leave to address the House?

SOME HON. MEMBERS: By leave.

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

MR. HARRIS: Briefly, Mr. Speaker, I would just like to say that I am also surprised that the government would be waving around this Income Supplementation Program after the Federal Government has already taken the hint, increased the amount of time available, required for unemployment insurance, and the government's plans are to go further and require people to work for a full twenty weeks before they are eligible at all. I think it is going to get worse and we should stop this now.

SOME HON. MEMBERS: Hear, hear!

Oral Questions

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

MR. SIMMS: Mr. Speaker, I have a few direct questions I would like to put to the Premier concerning privatization of Hydro.

I have heard him say on many occasions that a new privately-owned Hydro would be good for the Province because it would be more efficient and it would do a lot to revitalize the private sector. I want to ask him: If that is true, why would new Hydro need massive tax breaks - tax breaks that, in total, are ten times greater than all of the tax breaks you provided in your Budget last Thursday to all the other businesses in the Province?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Hydro is not getting or would not be getting a single tax break that every -

SOME HON. MEMBERS: Oh, oh!

PREMIER WELLS: Listen now. Hydro wouldn't be getting a single tax break that every other business in this Province would not be getting. They pay their full provincial income tax; they would be getting sent back to them, the federal component of the income tax that the federal government would rebate to us. That doesn't go to new Hydro. If that doesn't go to new Hydro, then the electrical rates in the Province get increased by precisely the same amount. It goes right to the cost of electricity just -

MR. WINDSOR: How about what you are selling to Light and Power?

PREMIER WELLS: It is precisely the same as now, as far as Hydro is concerned. They don't pay any tax now so they have nothing; no, they don't need to collect any money to enable them to have money to pay taxes.

MR. WINDSOR: They would before.

PREMIER WELLS: They would before on a privatized basis but the Federal Government pays 85 per cent back to the Province. The Province is giving that back to the electrical industry so that the rates can be reduced by precisely the same amount, so Hydro, as Hydro, is not getting a tax break, it is the taxpayers of this Province. We could do it differently; we could pay it in a different way. We could pay it as a direct subsidy if you wanted to towards electrical rates. Any way you judge it, it goes solely to reduce the electrical power rates, and to categorize it as a tax break for Hydro is totally incorrect.

MR. SPEAKER: Order, please!

A supplementary, the hon. the Leader of the Opposition.

MR. SIMMS: Mr. Speaker, that is simply fancy footwork and nothing else. The Premier has just now admitted there is a tax break, not only for the new Hydro company but also for his old friends at Fortis. That's what it is, a tax break - call it what you want.

Now, I want to ask him this. If a privately-owned Hydro will be so efficient and will revitalize the private sector, as he often claims, why will new Hydro have to raise electricity rates 5 to 10 per cent over the next five years for all customers, including other businesses? In other words, how does he explain how a company that is supposed to revitalize the private sector ends up adding to the cost of all other businesses in the Province? Can he explain that?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: I am just making a couple of notes so that I don't forget the matters he raised.

I emphasize again, there is no tax break for Hydro. The shareholders of Hydro will not benefit one dollar from that, not one dollar. The only people in this Province, or in this country, who will benefit from that will be the rate payers, the hydroelectric rate payers. Now, for the Leader of the Opposition to call that a tax break for Hydro is an atrocious misrepresentation of the truth, Mr. Speaker.

His next question: if the privatized Hydro is going to be so efficient as to revitalize the provincial economy. I never, ever said any such thing and I don't want to allow the Leader of the Opposition to stand in his place and make that allegation without challenging him. A privatized Hydro will make a great contribution to the private sector economy, but it will not and cannot, on its own, revitalize the Newfoundland economy, which is what the Leader of the Opposition just said.

Hydro, itself, will not revitalize the Newfoundland economy. What we are doing, all of the policies that we are implementing, including privatization - at the express request of the people of this Province, we are doing privatization. At the express request of the people of this Province, we are proceeding with our total program of privatization.

MR. TOBIN: (Inaudible) Board of Trade (inaudible)!

PREMIER WELLS: Not just the Board of Trade - everybody who appeared before the Advisory Council on the Economy in the consultation on the Strategic Economic Plan.

SOME HON. MEMBERS: Oh, oh!

MS. VERGE: Why didn't you put it in your report?

MR. SPEAKER: Order, please!

PREMIER WELLS: Why didn't we put it in the report? Why didn't you read the report? It is there. Why didn't you read the report? It is there!

SOME HON. MEMBERS: Hear, hear!

PREMIER WELLS: Could you get it for me, it is on my desk. I will have it sent down. With the consent of the House, Mr. Speaker, before the end of Question Period, I will read precisely what they said.

Mr. Speaker, the next question was: if it is going to be so efficient and so on, why is there a possibility of a rate increase of 5 per cent or 10 per cent, or whatever he said. There is a possibility of a rate increase based on the estimates. They are only estimates that have been put forward. There is a possibility of a rate increase because we had the honesty to make the estimates on the basis of assuming there would be no efficiencies, no improvements and no job loss, that all of the costs that are there now would go forward with no improvement whatsoever.

I have to say that frankly I don't believe there will be no improvement whatsoever. I think there will be significant improvement. I hope there will not be great job loss, and if there is job loss, I hope it will be through attrition or early retirement. I also remind the House that the biggest job losses in Canada, or some of the biggest job losses in Canada, have been in Ontario Hydro and New Brunswick Power - two Crown corporations, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SIMMS: A supplementary, Mr. Speaker.

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

MR. SIMMS: Mr. Speaker, I'm flabbergasted, and frankly, I'm not surprised why the people of this Province don't believe the Premier any more when he talks on this issue. You are totally misleading the people of the Province and you know you are totally misleading them.

Let me ask him this question: If a privatized Hydro will do so good to the economy as he has said, his ads have said on radio and everything else - surely, he has heard his minister saying it here in the House and outside the House - I want to ask him, how come this new Hydro company is going to get the use of our water resources for nothing? Why can't they pay for the use of our water? Can he answer that question?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, I don't believe I am hearing what I am hearing. I don't believe that any person sitting in this House could so misunderstand how the system works as to advocate that. If Hydro had to pay a million dollars tomorrow for the use of water, who is going to provide the million dollars? The rate payers.

Why don't we charge Newfoundland Power for it now? We aren't charging them because we don't want to drive up the rates.

SOME HON. MEMBERS: (Inaudible).

MR. SPEAKER: Order, please!

One question at a time.

PREMIER WELLS: Mr. Speaker, that would be a matter that would go directly to the rates - directly to the rates. If there was a million dollars charged, there would be a million dollars collected, no more, no less - no profit on it, or anything like that.

Mr. Speaker, while I am on my feet, the member asked what about the report of ACE. Here it is. This is the report to the public. Let me remind members of something else. The consultation paper prepared by the government committee did not suggest privatization. You won't find it in the consultation paper anywhere. It didn't originate with government; but here is the report of the Advisory Council on the Economy, having had their sessions all over this Province, in every sector of this Province, and they asked the people what they wanted. When they reported back to government, here is what was said:

Item number 4, of the list of items this was the fourth one, the goals, what ought to be the goals for the Province: Government should not own or operate businesses.

MR. SPEAKER: Order, please!

I am having trouble hearing the hon. Premier.

PREMIER WELLS: Government should not own or operate businesses, and should divest assets and activities to the private sector wherever appropriate. There was a general consensus that government should not be involved as operators of businesses, and that their involvement in existing businesses should be phased out over time. Government, through appropriate and prudent support, should encourage the private sector to be the engine of growth.

When that was received, Mr. Speaker, here is what the government said. Here is my statement: I want to assure you -

MR. SPEAKER: Order, please!

PREMIER WELLS: Here is what I said to people. This will only take ten seconds if they will just be quiet for it, Mr. Speaker. It will only take ten seconds.

Here is my response at the time. I know they don't like truth.

MR. SPEAKER: Order, please!

PREMIER WELLS: I want to assure you that your comments have been heard -

MR. SPEAKER: Order, please!

PREMIER WELLS: - and to the fullest extent possible will be incorporated in the Strategic Economic Plan.

MR. SPEAKER: Order, please!

PREMIER WELLS: Premier Clyde Wells gave that assurance.

MR. SPEAKER: Order, please!

The hon. the Member for Kilbride on a point of order.

SOME HON. MEMBERS: Hear, hear!

AN HON. MEMBER: (Inaudible).

MR. SPEAKER: Order, please!

The hon. the Member for Mount Pearl.

MR. WINDSOR: Mr. Speaker, I have a question for the Minister of Mines and Energy.

Mr. Speaker, a number of days ago the Minister of Mines and Energy confirmed that subsequent to the Opposition producing some documents that apparently came from the Hydro Corporation, particularly dealing with the contracts provided to Mr. Chalker's law firm, we have heard that as a result of that security was tightened up. The minister confirmed that Hydro had tightened up on security.

Mr. Speaker, we are hearing that security has indeed been tremendously tightened up, and that in fact tremendous volumes of materials are being shredded by Newfoundland and Labrador Hydro. Would the minister like to confirm that volumes are being shredded, and would he like to tell us what the great security risk is here.

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

DR. GIBBONS: Mr. Speaker, I have no idea how much or how little might be getting shredded by Hydro or anybody else, not at all.

MR. SPEAKER: A supplementary, the hon. the Member for Mount Pearl.

MR. WINDSOR: Mr. Speaker, if the hon. minister would refer to the public tender exemptions tabled by the Minister of Works, Services and Transportation, the exemptions to the Public Tender Act for January 1994, page 20, he would find, under Newfoundland and Labrador Hydro the lease of one cross-cut shredder; `Tender invitation not advisable shredder urgently required due to security needs.' Would the minister like to tell us what is such an emergency that we had to lease a shredder without going to public tender? What great volumes of documents required this expensive shredder at $14,600, Mr. Speaker, to lease a shredder?

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

AN HON. MEMBER: Like a barrel going down a hill, empty.

DR. GIBBONS: Yes, Mr. Speaker, I'm aware that Hydro has leased a shredder for its executive offices, clearly it would have some materials that it would need to shred and its shredding these materials, it's very appropriate.

MR. SPEAKER: A final supplementary, the hon. the Member for Mount Pearl.

MR. WINDSOR: Mr. Speaker, will the minister not confirm that this is a deliberate breach of the Public Tender Act? That if there is no great emergency then the corporation should have gone to public tender and if there is such an emergency would the minister tell us what it is and stop trying to cover up this breach of privacy here?

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

DR. GIBBONS: Mr. Speaker, there is no breach of the Public Tender Act. What Hydro did was within the rules of the Public Tender Act. It needed a shredder at the time, it obtained it and it obtained it by appropriate means.

MR. WINDSOR: It is not appropriate at all.

MR. SPEAKER: Order, please!

The hon. the Member for Waterford - Kenmount.

MR. HODDER: Mr. Speaker, a question for the Minister of Finance. Can the minister confirm that the tax administration branch of his department has written school principals demanding payment of retail sales taxes plus accumulated interest on chocolate bars and other items sold by kids to raise funds to help the financing of their school programs?

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

MR. BAKER: Thank you, Mr. Speaker. That matter was brought to my attention a few days ago and upon investigation I discovered that there has been a problem with one distributor of such goods to charitable organizations around the Province - one of the many distributors. There is a problem with one of them and some notices have gone out to some of the individual groups that have dealt with that one distributor. Mr. Speaker, I am pleased to inform members of the House that I have since instructed my staff to cease sending out such assessment notices and to notify the people who have already received them that they are to be withdrawn. Within the next two or three days, Mr. Speaker, I guarantee you that we will straighten out that problem with that one distributor. So these have all been now withdrawn, Mr. Speaker.

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

MR. W. MATTHEWS: Thank you very much, Mr. Speaker. I have a question for the Premier. I understand that a good friend and supporter of the Premier's, Mr. Norval Blair, has arranged a series of cocktail parties at his home to raise funds to pay off the debt of the Liberal Party from the last election. I wonder if the Premier could confirm that guests invited to Mr. Blair's home are being asked to pay a minimum fee of $250 for admission to meet the Premier and to drink cocktails with him? Can he confirm that for the House?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, we have, for a couple of years, raised funds by that normal method. I guess it's something like the PC luncheon's that they have and those kinds of things normally used to raise funds or like the $200, $300, $500 or $1000 a plate dinners that the Conservative Party has, like the $500 a plate dinners the Liberal Party has -

AN HON. MEMBER: (Inaudible).

PREMIER WELLS: Oh yes, I'm very much aware of them. You do them for a variety of purposes to raise funds for the party. Yes, Mr. Speaker, that method has been used and frankly I would think it would continue to be used. It seems to me to be an eminently sensible approach. It's a good way to have discussions with people, it's a good way to raise funds and it helps contribute to the political process. I commend it to hon. members if they could get anybody to go.

SOME HON. MEMBERS: Hear, hear!

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

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

Mr. Speaker, the investment brokers, the lawyers and the bankers don't have the same reasons to come to our cocktail parties at $250 a shot as they do going to the Premier's, I say to him.

SOME HON. MEMBERS: Hear, hear!

MR. W. MATTHEWS: Mr. Speaker, let me ask the Premier, in light of the governments tax initiatives and my colleague from Mount Pearl just raised an important issue, can the Premier inform the House whether or not those funds, influence peddling monies, that are being raised at his friend's - Mr. Blair's - home, will they be subject -

AN HON. MEMBER: Sit down, boy!

MR. SIMMS: Listen to the gorilla over there.

MR. W. MATTHEWS: Will these influence peddling monies raised at Mr. Blair's house be subject to provincial tax?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, there are no influence peddling funds raised at Mr. Blair's house. The hon. member's comments are....

AN HON. MEMBER: Offensive.

PREMIER WELLS: Yes, they are offensive, they are insulting, they are dishonest in fact. He has no basis for saying any such thing. To make those kinds of statements are totally incorrect, Mr. Speaker. The question is not worthy of being dignified by an answer.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

Final supplementary, the hon. the Opposition House Leader.

MR. W. MATTHEWS: Mr. Speaker, I'm not having the $250 cocktail parties, I say to the Premier, he is, so I don't know why he is getting so testy on the issue. I want to ask the Premier, who is attending those cocktail parties? Are they lawyers, investment brokers, and bankers who are paying a minimum of $250 to shake the Premier's hand? Will he table a list of all companies and individuals in this House so we can see who is looking to benefit from the golden handshakes with the Premier? Will he undertake to table a list of companies and individuals who are paying a minimum of $250 a shot to get the golden handshake from the Premier? Will he do that?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, I would go further and report to the House that the full list of everybody in the Province who contributes more than $100 to the Liberal Party will be listed and published for all to see. The full and complete list. I hope the people opposite will do the same, because that is what the law requires. I hope they do the same. Everybody!

SOME HON. MEMBERS: Hear, hear!

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

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

MR. MANNING: Mr. Speaker, my questions today are for the Minister of Environment and Lands. During recent questioning the minister has stated that a study was done for her department that showed that 5 per cent of the garbage in this Province is glass, soft drink bottles. I would like to ask the minister if she would table this study in the House.

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

MS. COWAN: Thank you, Mr. Speaker. It is not my study. It was a study done by the Canadian Soft Drink Association, and whether or not they would choose to make it available when we have a general announcement about our anti-litter program I don't know. I can certainly ask them if it is appropriate. It will be of course up to them whether they decide to release it or not. I imagine that is the study that I was referring to.

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

MR. MANNING: Mr. Speaker, during the summer of 1991 a high school in my District, namely Stella Maris in Trepassey, took the initiative and carried out two different studies on roadside garbage. The details of these studies I've forwarded to the minister today. These results show that approximately 10 to 15 per cent of what they collected was glass soft drink bottles. The minister seems to think we can't have returnable bottle legislation and an education campaign at the same time. Why can't we have both? Why, Minister, do we have to wait and continue to have our environment destroyed with these bottles while with the stroke of a pen you could practically stop all of this type of garbage from being discarded throughout the Province?

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

MS. COWAN: Mr. Speaker, I have never said that the education program and a deposit refund system could not go on together at the same time. In fact, if this program that we are putting in place does not meet certain quotas then that is what will happen. We will have a deposit refund system and we will have an accompanying education program.

It is interesting to look - and I commend Stella Maris High School for their study that they did. I was familiar with it. In fact I think they might have received an environmental award, one of the awards that are given out by the Province and the women's institutes of Newfoundland. I did some quick figuring while I sat here - I didn't have time to get into percentages - but I don't think the 15 per cent is quite accurate, but I don't want to be guilty of what the Opposition is, of living in a fantasy world and fabricating facts and percentages and so on when often they are not exact. I will take a little more time and have a look at it.

What the study does show me is that there is a good deal more litter in this world than aluminium cans, plastic soft drink bottles, and so on. Just listen to some of this litter that they found now: car parts, pieces of wood, pieces of cardboard, clothing - pants, gloves, shirts, sneakers, socks, pieces of rope, oil cans, candy and bar wrappers, wire, broken glass. Am I going to put a deposit refund on all this stuff? What else do we have here? - plastic forks, diapers, Christmas decorations -

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

MS COWAN: I guess I have made my point. I hope I have made my point.

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

MR. MANNING: Madam Minister, when you do your calculations you will find that 12.3 per cent of the garbage collected was soft drink bottles. But, Mr. Speaker, of 126 million bottles of beer produced and sold in Newfoundland every year, 97 per cent, 122 million bottles are returned and refilled because of a bottle deposit and, along with saving the environment, this regulation creates thousands of jobs. In the meantime, the 60 million bottles and cans of soft drink sold in Newfoundland and Labrador annually are producing a very minimal number of jobs but produce 100 per cent garbage. The bottlers include Browning Harvey here in St. John's, and Coca-Cola, who now ship in their garbage from a plant in New Brunswick. I ask the minister today, isn't it time for this government to act decisively to clean up the mess and at the same time create much-needed employment by bringing forward the returnable bottle legislation promised during the election?

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

MS. COWAN: My heavens, Mr. Speaker, that was a speech, I think, instead of a question. It was very, very rhetorical and my answer can simply be what it has been before, that we are aiming at cleaning up this Province; we have already begun to clean it up, making marvellous progress with our old vehicles, our derelict vehicles; they are coming in by the thousands and providing employment and industry for two different companies, Mr. Speaker. And I applaud the government for doing something which a lot of people said could never be done, and is being done.

You can't go out on to the main highway now without passing three or four tractor-trailer loads just of used vehicles - tattered, torn, derelict vehicles, and that is a real, positive. Just on the road between here and Clarenville, you can see that many, so we are on the way to cleaning up. The ATV legislation - terrific! The litter - all these things that I read about, diapers, the whole works, Sobeys bags, whatever else, we are aiming for, as I said before, when spring comes, which is just around the corner, so you don't have much longer to wait and we will be providing employment. Because, Mr. Speaker, and I must emphasize this to the gentleman, the Member for St. Mary's - The Capes, because we are going to be opening up recycling channels. This isn't just simply a matter of going around and picking up garbage, I mean, you have to do something with the garbage afterwards. Are we going to put it into our waste disposal sites? No, we are not. I have been left by the former government with the worst mess of garbage dumps in this Province and we are working towards cleaning those up, too, Mr. Speaker, while we clean up the ditches and the woodlands.

AN HON. MEMBER: Why (inaudible).

MR. SPEAKER: Order, please!

MS. COWAN: I think that you will live, Sir, to congratulate us.

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

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

My question is to the President of Treasury Board.

It appears that the government is headed for a public service strike here in this Province. The President of Treasury Board keeps saying that he wants a negotiated settlement through the collective bargaining process, but, Mr. Speaker, in his Budget Speech, he says that he is going to be taking $50 million from the public sector compensation, one way or another, with or without an agreement. If he has already made up his mind, Mr. Speaker, to take this $50 million, what is there to negotiate?

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

MR. BAKER: Mr. Speaker, our position as put before the public sector unions is simply that we wish to achieve our objective without either, an across-the-board reduction in take-home pay of public servants or - and this is the significant part - or having to resort to layoffs to accomplish our objectives. So we have asked the public sector unions to discuss alternatives with us. We have done that by presenting an opening package to the union leadership and initiating collective bargaining.

Right now, the unions he is referring to specifically, I suppose, are NAPE and CUPE, which are in the process of taking their strike votes, and, Mr. Speaker, after the strike votes have been taken, they have indicated publicly that then they will be coming back to resume negotiations with government.

Mr. Speaker, I will make the point once again, that I am confident we can find a solution to this problem that is mutually acceptable for two reasons. Number one, we understand the hardship that public servants have gone through in the last three years, and, number two, we believe that the public sector unions and their leadership understand the problems that government is facing. I think with that kind of understanding, a solution can ultimately be found.

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

MR. A. SNOW: Mr. Speaker, the minister has confirmed what he has said before publicly, that he is not prepared to negotiate the size of the cut, he is just prepared to let the public service decide how the cut will be done. He won't allow that, Mr. Speaker. In other words, public employees get to decide which poison they have to swallow - that is the choice, Mr. Speaker. Now, the minister knows that unions won't forever continue to cave in on these issues. He knows that. Is he not deliberately setting out the strategy to force a public sector union strike in this Province so that he can save his $50 million in that manner?

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

MR. BAKER: No, Mr. Speaker. I suppose, if we wanted to do that, we could simply bring in legislation and cause an illegal strike in the public sector. I suppose that is an option the government had open to it. No, Mr. Speaker, we do not want to see a strike in the public sector of this Province - we do not want to see our schools closed; we do not want to see our hospitals and nursing homes closed. It is the last thing in the world we want to see, and that, of course, is the ultimate weapon that is at the hands of the public servants of this Province.

MR. SPEAKER: A final supplementary, the hon. the Member for Menihek.

MR. A. SNOW: Mr. Speaker, the people of this Province know that this is not a government that negotiates, it legislates. They are very aware of that. Could he tell this House and the people of this Province what his time line is on this, or will this government introduce legislation to freeze public sector wages for the fourth year in a row, to reduce the wages? Is that what their plan is? What will they do, and when will they do it, Mr. Speaker?

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

MR. BAKER: Thank you, Mr. Speaker. There are a number of issues raised - first of all, his comment that this government simply legislates and doesn't negotiate. I remind hon. members that last year we signed agreements with every single one of our unions through a collective bargaining process and that process, I hope, will work again this year. It is not our intention to legislate. We want to make the process work and we still hope that it will work. Hon. members should understand the collective bargaining process, and the fact that it is a confrontational type of process that all of us, perhaps, wish did not exist, and all of us, perhaps, wish there were a different process in place. But it is a confrontational process and we hope that the results will be positive for everybody.

MR. SPEAKER: Question Period has elapsed.

Petitions

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

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

Mr. Speaker, I am pleased to have the opportunity of presenting a petition on behalf of 1,437 residents of the towns of Labrador City and Wabush, the towns comprising my district of Menihek.

The prayer of the petition, that these 1,437 people have signed, is addressed to the House of Assembly, and I ask the House of Assembly to accept the following prayer:

`Wherefore your petitioners urge the Government of Newfoundland and Labrador to stop immediately the privatization of Newfoundland Hydro, and to hold a referendum to ask the people of the Province their views as to whether Newfoundland Hydro should be privatized or remain a Crown corporation.'

Mr. Speaker, many, many volunteers have, in the last few days in my district, after the Premier was in there last week and spoke - he met some of the demonstrators who are concerned about this, and he is very aware of their concerns up there, and these people are signing this petition. While I have 1,450 names here on this petition, there are probably another 1,500 or 2,000 on their way to me in the mail, or through a package coming down on the airlines.

They are concerned because of the tremendous increases that they face in Hydro and, of course, the fact that we, as people living in Western Labrador, are facing huge increases in the cost, since we consume more because of the nature of our geography and our climate.

They would like more consultation; what they want, before this is passed in the House of Assembly, is to have public input. They don't feel that a process of radio advertising or slick media advertising is the answer to consultation. That's not consultation, Mr. Speaker. That is not consultation, and that is what they want. They want meaningful input into whether or not this should be, whether or not Newfoundland Hydro should be privatized or sold. That is what they want, because they have a direct concern.

There have been suggestions from some of the ministers that the people of this Province don't own this company. Well, they do. One of the ministers is supposed to have said that the people of this Province don't own Newfoundland Hydro, the government does. Now, Mr. Speaker, everybody in this Province recognizes that the people of this Province own a Crown corporation. The Cabinet dictates a public policy purpose, and the government, of Crown corporations, but the people truly own it, and it was established for a very good reason, and the people of this Province, specifically the people in my district, have a concern that it should not be privatized, number one, and that may be a very firm mind-set today, but they say in the prayer of this petition they specifically want to have the consultation, and for the government to stop the process now. That is what they say, because they want the government, before we rush into this decision, they want to be convinced it is the proper decision.

It isn't much different from a husband and wife making a decision to buy or sell a house or a car, a very large expenditure, probably the two largest expenditures most families make in their lifetime, to have consultation with each other, and their family, to decide whether or not they should buy or sell their home. One just doesn't rush out and sell it and say, trust me; it's in our best interest. You usually consult with your partners, your wife and your children, and you get the agreement of your wife and your children. Then you may decide to sell your home and move up or move down depending on what is being dictated by finances.

Mr. Speaker, the people in my district, I would say, are saying the very same thing that thousands of other people in the other fifty-one districts in this Province are saying. It isn't any different in my district from the way it is in your district. The ordinary Newfoundlanders and Labradorians have a very, very heavy concern about the sale of Newfoundland and Labrador Hydro. They specifically want more consultation, public input, and they want the government to put this on hold, and they say this in the prayer.

I wholeheartedly support the prayer of this petition, and I ask that the people in this House would support it, and anybody speaking to it.

Thank you.

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, I'm sort of happy to have an opportunity to make a few comments on the response I found in Labrador West, in the hon. member's district.

They told me of their concerns. They said: `Our member told us we are going to lose all control of Hydro, we are going to lose the right to develop the Churchill River, our costs are going to go through the roof because of this' - a whole lot of other such nonsense. I said: `That isn't so.' They asked: `Well, what is the real situation?' So I spelled out to them exactly the real situation - I don't need to take the time of the House today to do it - all of the things I've dealt with in the past.

They said: `Well, that is quite different - we think you should get on with privatization.' Many of the people I spoke to said: `If we had known that, we would never have made any complaint.' I asked: `Well, why didn't you know that?' They said: `Well, the only thing we got is what our member gave us or what we heard -

MR. TOBIN: Oh, oh!

PREMIER WELLS: `The only thing we got' - they hadn't had it at that time. As a matter of fact, they got it the day after I was there, or the day I was there, I've forgotten which. `The only thing we got is whatever we got from CBC or our member. We don't get NTV.' I told them about the program I had done with NTV that explained the government's position. They said: `We don't get NTV. We don't hear the government side of it, or we didn't hear the government view of it.'

I spoke with the Chamber of Commerce, I spoke with groups of Liberals, I spoke with officials from - groups of workers in Labrador City. I'm just trying to remember what other groups I spoke to now while I was there in about a day-and-a-half period, a little over a day. I spoke to the town council -

AN HON. MEMBER: They are against it.

PREMIER WELLS: I know, they are against it on the basis of the information they had. Unfortunately, there were some other things that we had to talk about. In the brief period the next morning that I had to speak with the town council I didn't have time to go into the detail, but I did indicate to them some of the totally wrong information that they've been getting.

One of the big concerns that I encountered was the impact on the rates. People of Labrador West are quite concerned about the impact on the hydroelectric rates. I explained to them what the impact could be solely because of privatization and said: You weigh that against what the benefits to the people of the Province were and come to your conclusion on that basis.

What I did say to them is it doesn't matter whether there is privatization or not. There is likely to be some significant increase - I don't know when it could be implemented or when it might be implemented or how long a period it might be phased in over or what - but there is likely to be a significant increase in the domestic electric rates in parts of Labrador. I explained to them why. Everybody else in the Province is contributing to the cost of subsidizing the diesel areas. They aren't doing that in Labrador, even though much of the diesel is in Labrador. Even though much of the diesel is there.

The simple fact is, in Labrador West the rates that are charged for most people, most residents of Labrador West, average out to about 15 mils. In Goose Bay, Central Labrador area, it averages about 30 mils. How can we justify that difference? How can we really justify treating the people of Goose Bay in a manner so totally different from the Menihek district? You really can't do that. Now, either we should drop the rates in Goose Bay to be the same as Labrador West or we should cause them to be levelled somehow to be fair to people. You have to treat people fairly. The people in the Island part of the Province, on average, for residential use, pay about 75 mils. How can we justify that kind of disparity where it is 75 mils in, say, Bonne Bay, but it is 30 mils in Goose Bay, and it is 15 mils in Labrador City? Is that what the people of this Province should do?

I told the people with whom I was speaking, there is going to be a hearing dealing with this whole issue. The matter will be discussed through the Public Utilities Board dealing with this whole issue and they will decide what the adjustment should be. They will hear all sides of the argument and try to come to a fair and balanced decision that will treat everybody with fairness. I have every confidence, Mr. Speaker, that the Public Utilities Board can supervise that kind of a hearing and cause it to happen.

As soon as I explained the full situation to the people of Labrador, they had a far better understanding and I got a lot of expressions of support for the position, Mr. Speaker.

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

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

The Premier gets up, Mr. Speaker, and tries to convince the House that everybody in Labrador West now supports privatization.

PREMIER WELLS: That's not so, as far as I know.

MR. SIMMS: What?

PREMIER WELLS: I don't think everybody in Labrador West (inaudible).

MR. W. MATTHEWS: No, 99 per cent are against it.

MR. TOBIN: I can assure the Premier, the people of Labrador West, like the people of Burin - Placentia West and every other place in this Province, Mr. Speaker, don't support it.

The fact of the matter is, the Premier introduced the piece of legislation in this House and ran away for five out of the eight days and wouldn't come to the House to defend his legislation. Mr. Speaker, his ministers weren't able to do it and he left it to the agents with the St. John's Board of Trade to try to explain it, that's what's happening here, Mr. Speaker. The Premier of this Province, who thought that this bill was powerful enough that he wouldn't put it in the name of his Minister of Energy, he put it in the name of the Premier - what did he do, Mr. Speaker? He packed his bags and got on the first flight leaving St. John's after he introduced the piece of legislation. Why did he do that if he's so comfortable with it? Very simple, Mr. Speaker, because he couldn't defend the indefensible, that's why he did it, and his ministers couldn't do it.

Ninety per cent of the people in Newfoundland and Labrador are against it, Mr. Speaker, except the crowd who are going to benefit, the clique that are going to benefit from this, the money bags of St. John's, in particular.

AN HON. MEMBER: (Inaudible).

MR. TOBIN: There are a lot of people who can't get involved in it, Mr. Speaker. The crowd who can afford to go to a $250-a-drink, that's the crowd, Mr. Speaker.

AN HON. MEMBER: (Inaudible).

MR. TOBIN: I don't know about the Member for St. John's South, Mr. Speaker, but I know a lot of people who can't pay $250 for a drink. Probably he can, Mr. Speaker

MR. SPEAKER: Order, please!

MR. TOBIN: - probably he can, but a lot of people can't - that's who is interested in the privatization of Newfoundland and Labrador Hydro -

SOME HON. MEMBERS: Hear, hear!

MR. TOBIN: - the crowd who can spend $250 a shot to shake the Premier's hand, that's the disgrace that's taking place in this Province. Then you get the Board of Trade out preaching the signs, word for word of what comes from the eighth floor in this building is what the St. John's Board of Trade is preaching. Mr. Speaker, the St. John's Board of Trade are not the people who are concerned if their light bill goes up by four or five dollars a month, I can assure you that. But the men and women in this Province who are out trying to make a dollar, Mr. Speaker, despite the fact that this government is trying to drive it up to twenty weeks to qualify for U.I., those are the people who are going to have a job to put bread and butter on the table.

The $250-a-drink people, Mr. Speaker, are not concerned about the cost of the electric bill, but a lot of them are concerned about the profit they are going to make, Mr. Speaker, a lot of them are concerned about how they are going to pad their pockets, how they are going to skim off the cream from the sale of Newfoundland and Labrador Hydro. That's the crowd who are concerned about this, I say to the members opposite. I say to the Member for St. John's South as well, the crowd who can afford to pay $250 a shot, Mr. Speaker, are more concerned about the cream of Newfoundland and Labrador Hydro then they are concerned about the increase in electric bills.

MR. SIMMS: That's who will buy the shares.

MR. TOBIN: That's what I mean, they are going to skim off the cream, they are going to buy the shares. But I can tell you, Mr. Speaker, there are a lot of people in this Province who cannot afford to buy shares. It is the biggest scam, and nothing, Mr. Speaker, has smelled more like corruption in my days in politics - nothing, Mr. Speaker, nothing.

MR. CRANE: I tell you one thing, you've seen a lot of that.

MR. TOBIN: What's that?

MR. CRANE: I said you've seen a lot of that.

MR. W. MATTHEWS: Yes, he's looking at it now.

MR. TOBIN: Mr. Speaker, I say to the Member for Harbour Grace, when I sit down, you can take your place and get involved in the debate. You can take your place and get up, I say to the Member for Harbour Grace.

But there is something wrong, Mr. Speaker - this smells. I say to members opposite, go to your districts and have public hearings, let the people have input into something as important as selling off a public utility.

MR. MURPHY: (Inaudible).

MR. TOBIN: The Member for St. John's South, Mr. Speaker, doesn't support the privatization of the St. John's dockyard. The Member for St. John's South doesn't have the courage to take a position on privatizing the St. John's dockyard, yet he is out advocating the privatization of a public utility company.

MR. SPEAKER: Order, please!

The hon. member's time has elapsed.

MR. MURPHY: A point of order, Mr. Speaker.

MR. SPEAKER: A point of order, the hon. the Member for St. John's South.

MR. MURPHY: Mr. Speaker, let me say to the hon. the Member for Burin - Placentia West that the Newfoundland dockyard is better off in the hands of where it is right now and I advocate that. Let me say to the Member for Burin - Placentia West that when they offered Marystown for $1.00 they couldn't get a buyer, and now there is $150 million worth of contracts down there, thanks to the Minister of Industry, Trade and Technology. Why don't you smarten up, boy?

MR. SPEAKER: There is no point of order.

MR. TOBIN: Mr. Speaker, quite clearly there is no point of order in what the member had to say. One thing is clear, Mr. Speaker, that the member cannot have it both ways. He cannot speak out of both sides of his mouth at the same time. He cannot say privatize the public utility but don't privatize the St. John's dockyard. You can't have it both ways.

MR. SPEAKER: Order, please!

The hon. member is not speaking to a point of order, I think he is continuing with some of his remarks on the petition.

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

MR. HARRIS: Thank you, Mr. Speaker.

I rise to present a petition on behalf of 250 residents of St. John's, Harbour Grace, Carbonear, Heart's Delight, and Clarenville in the district of Trinity North.

These petitioners, Mr. Speaker, are opposed to the privatization of Hydro. They believe that the sale of Newfoundland and Labrador Hydro has not been proven to be in the best interest of the citizens of the Province and they say that the production of electricity is an essential service. Now, Mr. Speaker, this came to the point that the Premier was trying to flummox the people of this Province with today. It is part of the disinformation program that the government has been carrying out from the beginning. What the Premier is trying to convince members of this House of, and perhaps he is trying to convince his own backbenchers, is that the sale and privatization of Newfoundland and Labrador Hydro is somehow contained in the Strategic Economic Plan asked for by the people of Newfoundland and Labrador, and Mr. Speaker, nothing could be further from the truth. If that were so, why is it that the overwhelming majority of people in this Province, all over this Province, are opposed to the sale of Newfoundland and Labrador Hydro?

Now, I see the Member for Trinity North shaking his head. I say to the Member for Trinity North that people from all walks of life, from all political parties, even die-hard Liberals, are opposed to this plan to sell Newfoundland and Labrador Hydro. If the Premier and if the government is so convinced that the people of Newfoundland support this well, why don't they have public hearings across the Province to explain to people and let people have their say? - ask them: is that what you meant when you said, we don't want the government in business? Do you consider the generation and the distribution of electricity an essential service, a monopoly? Is that the kind of business we were talking about, or is it something else? Mr. Speaker, I think you will find that the people of this Province consider Newfoundland and Labrador Hydro in a very different light than they would consider the government being involved in some sort of private enterprise that was making money and competing with the private sector. The production, generation, and distribution of electricity is a monopoly in this country. It is a monopoly and has been a monopoly since the utilities have developed. They are regarded as public utilities and are considered in a very different light from other types of enterprises.

Now, Mr. Speaker, the Premier may do everything he can to try to convince the people that this is what was contained in the strategic plan but that is not the case. As a matter of fact, when asked specifically - and I do not know if this was before or after the Member for St. John's South was putting up the trial balloon last spring, I know it was before the election - the Premier denied that the sale of Newfoundland and Labrador Hydro was a part of the government's plan. `It was wild speculation,' said the Premier, back in the spring before the election. Now, Mr. Speaker, within a matter of months after the election we have been faced with a decision on the part of the government to get rid of Newfoundland and Labrador Hydro, one way or the other. The first effort failed and now we are at phase two.

Mr. Speaker, if the government is so convinced of the rightness of the cause, then why doesn't it have public hearings which are being demanded across this Province? Why is he now moving into an attempt to salvage this public relations disaster that they have created? Why is he doing that now, instead of saying: Well, let's wait and we will consult widely with the people of Newfoundland, and we will make a decision after that.

Mr. Speaker, these petitioners, along with the thousands of people across this Province who have signed petitions, say that they want to demand the Government of Newfoundland and Labrador not to privatize and sell Newfoundland and Labrador Hydro, and to ensure that Newfoundland and Labrador Hydro remains a Crown corporation.

Thank you, Mr. Speaker.

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

MR. A. SNOW: Mr. Speaker, I am pleased to have the opportunity to rise and speak in favour of this petition that was so ably and capably presented by my colleague from St. John's East.

AN HON. MEMBER: (Inaudible).

MR. A. SNOW: Probably, Mr. Speaker, but that's not what we are talking about, the next election, what we are talking about is the sell-out of one of the best resources we have in this Province, a company, a Crown corporation, that has often been referred to as a 'crown jewel', Mr. Speaker.

The people who signed this petition have asked that this sale not proceed. That is in the prayer of the petition. They want to be consulted. Now consultation used to be, in eighty-nine, a byword of this government, it was a buzz-word, until they got elected. Then there was no more consultation.

Today they feel that the consultation process is going to occur through an avalanche of slick ads, a slick advertising campaign, that is going to be undergone in this Province. Slick advertising is not going to make this a good deal for the people of this Province. It will not. It is snake oil, and that is it.

AN HON. MEMBER: It is not snake oil.

MR. A. SNOW: It is snake oil; that is exactly what it is.

Mr. Speaker, the three slick ads they are talking about here, they are saying municipalities are going to benefit by $1 million three years hence in extra taxes, $1 million to all the municipalities in this Province in extra municipal revenue. What they fail to mention is that the rates are going to go up on the street lights. The Town of Wabush will have to pay 30 to 40 per cent higher for electricity for the street lights.

AN HON. MEMBER: (Inaudible).

MR. A. SNOW: The hon. the Minister of Finance, the President of Treasury Board, is suggesting that I have emptied the galleries. Well maybe I have, Mr. Speaker, but I was also elected to come in here and speak up for the people of Western Labrador, and I am speaking up for the people who signed this petition who couldn't come here. They would stay. The 250 people who signed this petition, if they were in the gallery, they would stay and listen.

Slick ads is not going to make this work. It is not going to make it a good deal for the Province, simply put, because it is not a good deal for this Province. They say in the slick ads, they also mention that this is going to strengthen the economy by privatizing. How does it strengthen the economy by taking money out of the pockets of people living in this Province and sending it off to Shaughnessy, or sending it off to Westmount or Richmond Hill, because that is what happens. The people who are going to buy this are going to be looking for their dividends, paid in spades, in Shaughnessy, or in Richmond Hill, or in Westmount. That is who is going to get the profits out of this.

They also talk about the private sector being strengthened. How can that strengthen the economy in the private sector, when the very people who pay these profits, pay the dividends, are going to be small businesses, too. The small business operators in this Province are going to pay more. The person who owns a store down on Water Street will pay more for electricity. The person who owns a store in Labrador City will pay more for electricity. How does that strengthen the economy, by removing money from a business, who has to charge more to get a return on his or her investment; so what do they do? They charge more to the consumer; the consumer pays more for the product. That removes disposable income from individuals, apart from the fact that they have to pay more for the goods and services they will be getting, and for their own electricity in their own homes.

In this slick advertising they talk about how this is going to improve the debt of this Province. It is going to remove the debt and thus improve the credit rating in this Province. It is not. It has absolutely nothing to do with the debt, no matter how slick their ads are. I don't believe that the people are going to buy it. Now, Mr. Speaker, they won't buy it because it is, as I suggested earlier, it is not true and it is not just my saying it, it is the people who established the credit rating in this Province, have said it time and time again, that privatization of Newfoundland Hydro will have nothing whatsoever to do with affecting the credit rating of this Province, so the slick ads, Mr. Speaker, are misstatements, they are untruths, and they are not going to work into making this a good deal because it is a bad deal, and the people of this Province are sick and tired of cooked-up deals that harm the Province down the road and they won't put up with it anymore.

Thank you, Mr. Speaker.

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

MR. BAKER: Mr. Speaker, any further petitions?

MR. SPEAKER: I think that's it; yes. The hon. the Minister of Finance.

MR. BAKER: Mr. Speaker, I have received a message from His Honour, The Lieutenant-Governor.

SERGEANT-AT-ARMS: All rise.

MR. SPEAKER: The message is to the hon. the Minister of Finance, it is dated March 1, 1994:

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

Sgd.:______________________________

Frederick A. Russell, Lieutenant-Governor.

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

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

Committee of the Whole on Interim Supply

MR. CHAIRMAN (L. Snow): Order, please!

The hon. the Minister of Finance.

MR. BAKER: Thank you, Mr. Chairman.

This is the normal Interim Supply bill that government brings in every year. The function of the Interim Supply bill, as all members know, is to provide funding for government for the period of time when the Budget is being debated and before the Budget is passed in this House.

This year we are asking for the usual three months supply. Last year, Mr. Chairman, the amount was over $1 billion, this year it is slightly under, it is $996,691,800 and that should do us, Mr. Speaker, for the next three months.

Normally, Interim Supply is intended to provide the continuation of ongoing government programs and only the continuation of ongoing government programs. It is not normally intended to fund new projects, however, Mr. Chairman, it is possible for the bill to authorize new capital account and current account expenditures if such items are spelled out for the House of Assembly and I would like to start debate on this bill, Mr. Chairman, by spelling out the new current account and capital account expenditures that this bill would authorize.

This bill would authorize spending for the Federal-Provincial Road-Bridge program of $45,900,000. It would authorize a provincial road-bridge program of $18,500,000; it would authorize new expenditure for the Canada-Newfoundland Infrastructure Program of $35 million and the new expenditure for the John Cabot 500th anniversary celebrations of $1,145,100 for a total new expenditure, Mr. Chairman, of $100,545,000, so, Mr. Chairman, this in general is what the bill is about and I look forward to comments both from members opposite and from members on this side of the House.

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

MR. WINDSOR: Just a short break. I will take up from where I was so rudely interrupted late last night and carry on from there I suppose.

AN HON. MEMBER: Oh, you weren't rudely interrupted (inaudible).

MR. WINDSOR: No, that's true.

Mr. Chairman, there are a few things I would like to pursue with the minister, since some new information that has come to light since last night, I say to the Minister of Finance. If he is alive and well and listening.

I'm told that the minister has advised veterinarians - I don't know if the minister is listening, or who he is listening to. I'm advised that the minister has told the veterinarian profession that first of all veterinary services are taxable under the retail sales tax act. I must confess I wasn't aware of that, but it appears from - maybe the minister could confirm this for me.

MR. BAKER: Oh, sorry.

MR. WINDSOR: I can wait till the House Leader is finished chatting there with him.

SOME HON. MEMBERS: Oh, oh!

MR. WINDSOR: Thank you. I hate to interrupt the hon. gentlemen opposite, Mr. Chairman. There we are. Let's get back to the minister. I'm advised that veterinary services are taxable. Maybe the minister could tell me, is this something new, or how long that has been in the act? It really catches me off guard that professional service, medical service to animals, is any different than services of a doctor or a dentist to others, yet I'm told that is a taxable service. Does the minister want to respond to that?

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

MR. BAKER: If I can remember correctly off the top of my head, a pet is considered as property, and the services on a pet, even though it is alive, are not considered the same as services done on a human. It is considered under the law to be property, real property, and therefore services to real property are taxable under the regulations. This is something that has always existed and the vets have been aware of it for a number of years, but I don't think the law has been enforced.

The other side of that is that things like the pet food and so on that some veterinarians provide for pets, that also is taxable, because that is in competition with other pet food stores and so on that sell the materials as taxable materials, and therefore it is taxable when the vets provide it. So yes, the hon. gentleman is right.

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

MR. WINDSOR: Mr. Chairman, I thank the minister for confirming that. That is my understanding, that apparently the legislation has been in place to tax it. I find it incredible. Certainly we are talking about an animal; we are talking about a live animal here. I'm aware in other jurisdictions where basically it has been ruled that such taxes could be detrimental to the welfare of animals. It has been argued successfully that taxation on veterinary services is a disincentive for persons to give proper medical care and treatment to an animal.

I really would ask the minister to have a look at it. Unless we are getting into a situation where all goods and services are taxable as they are under the Goods and Services Tax Act, which I don't think we are, unless the minister is bit by bit moving towards harmonization here. I realize they are subject to GST. Everything is subject to GST. Haircuts are subject to GST but we don't pay retail sales tax on it. Labour is subject to GST but we don't pay retail sales tax on it. There is a big difference in RST regulations and GST regulations, and I would hope that there always will be. I find it really incredible that services relating to the care of animals is treated any differently under the tax act. I appreciate the minister's explanation.

MR. BAKER: It is spelled out (inaudible) in 1990, I believe, or 1989, or some late-eighties, early-nineties -

MR. WINDSOR: (Inaudible) department issued a tax update.

MR. BAKER: Yes, and the veterinarian association was aware of the issue at that time but it has never been followed through on.

MR. WINDSOR: Never been followed through on.

MR. BAKER: Some vets have got an RST number, some haven't. There is a great deal of disparity out there in the way that is handled.

MR. WINDSOR: The minister has sent the association a letter dated March 4 of this year.

MR. BAKER: Yes, yes.

MR. WINDSOR: I have copy here I'm referring to. The minister has now confirmed that the tax update issued in December of 1990 is in effect. The minister has also confirmed that it is his intention to introduce legislation to make drugs and medications sold and administered by veterinarians also taxable. I don't have an argument when the minister talks about pet food, collars, leashes, brushes, combs, these types of items that are commercial retail items. Simply, they relate to pets or animals. It may not only be pets, it may be farm animals as well. I don't have a problem with those. Those are commercial items that could be purchased in any number of businesses and therefore should be taxable. The veterinarians I don't think have a problem with that.

I do have a problem with drugs and medications being taxable and that is what the minister is suggesting. Is the minister aware that there is no other province in Canada that taxes veterinarian services except Quebec which taxes it at 8 per cent? There is no other province in Canada which taxes drugs except Quebec which taxes at 4 per cent. The minister is proposing to make both taxable in Newfoundland. Would the minister like to explain the rationale behind that? Would he also like to tell me, Mr. Chairman, if he intended to make these changes as he says in his letter: I am proposing to introduce legislation in this session of the Legislature that would remove the exemption provided to drugs sold or used by veterinarians.

Would the minister like to tell me why that was not announced in the Budget Speech? This letter was written on March 4. The minister was fully aware of proposed changes to legislation, tax legislation, on March 4, yet he brought in a budget on March 17 which made no reference to it. Would the minister like to explain that to us?

MR. BAKER: I think if the hon. member goes back two or three years, back to I believe 1990, these changes were announced at that time. The problem has been that the Province has not followed through on the necessary legislative changes to make it clear. This was announced back I believe in 1990, 1989 or 1990, I'm not sure. One of these budgets. The announcements were made at that time and they were meant to come into effect at that time, but I've simply indicated to them that we intend to make it clear in legislation what the situation is. Because this should have been done a while ago. The announcement was already made and the notifications were out back in 1990.

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

MR. E. BYRNE: Thank you, Mr. Chairman. It gives me some pleasure to participate in the debate on Committee of Supply to I guess bring out a couple of points on the Budget Speech that the minister of Finance read into the House last week.

Certainly in the area of provincial student grants and the whole student loan system it amazed me last week that the Minister of Finance announced categorically that the grant system for student aid in this Province would be axed and that would be converted to an entire student loan system. Then, in the same breath, indicated and spun out information that the government would be increasing funding for students in the Province and this somehow would be very beneficial in the long term for students.

He also indicated at that time that there would be a remission portion. That in extreme cases students who upon graduation had high levels of debt load could be forgiven certain amounts of loans. In the questioning that has been taking place in the media on that particular issue in the Budget of late that we've come to discover that really the Province has no rules set out for who would be forgiven loans, at what levels they would be forgiven. The Province has had no rules or regulations designed to that effect.

What the government has done on the one hand, in the short-term they've said: We've increased money for students, we've recognized that there is a need to give more money to students over their University term, but we've converted it all to a loan portion. What they've done, Mr. Chairman, in one fell swoop, one policy change, is that they've doubled the debt load immediately. Effectively, without question, those who would have graduated with $12,000, $14,000 to $15,000 student loans can now look forward to $27,000, $28,000 to $29,000 student loans. That's what the government's policy initiative has done.

In terms of attracting and creating an economic climate by where we can become an educated, prosperous, industrious people, I say to the minister and the government that this particular initiative flies in the face of government's own policy. That it limits accessibility to education and that it will further inhibit those people from rural Newfoundland who want to get an education. It will further inhibit them from doing so and how will it do that?

In Nova Scotia they have a system and in BC a similar student aid system as the minister has announced, where it's a tax credit system, mostly loan portions and they have found that it has cost government more in the long run to operate such a system. More, not from the point of view of handing out money in terms of loans but more from the point of view in that less and less people repay their loans. Students, post-secondary students from University, Cabot Institute, Marine Institute, any of the private colleges, have by far the best repayment rate. Two per cent I believe do not repay loans, which is almost nil, I say to the minister, as he knows, which is exceptional but what this policy on student aid announced by the Budget will do is effectively inhibit ones ability to go to Memorial.

Now the governments say, well that's not necessarily true. They may say we've provided more money up front so that students can pay for the courses but at the end of the day, Mr. Chairman, at the end of the day when a student, upon graduation, who's gone through the student loan program, owes $30,000, that is so far behind the eight ball that he/she is not even on the table. It is not like when the minister graduated from university. He could pick his job wherever he wanted to on the island as a teacher. School boards came to the University and said: where would you like to go? He and colleagues in the Faculty of Education could pick their jobs but today students not only do not have that opportunity but they don't even have a chance or a hope of getting any employment in this Province, a very limited chance of getting employment or a very limited chance of creating a life that they can know they will be here for some time to come.

I also heard the Minister of Mines and Energy indicate that upon graduation he had to go to the States for a couple of years. Sure that's still an option that some students will have to go. What century are we living in, I ask the Minister of Finance? When today where education has been spiralling out of control in terms of costs and accessibility to people, what incentives are we really offering to students to go to university, to go to trade school, to go to the Marine Institute, to hone their skills, sharpen their skills, what is the incentive? The incentive that this government has offered, Mr. Chairman, is a high debt load, a huge monkey on the back of rural Newfoundlanders in particular, who have to come from outside of St. John's to stay at the University, on campus or off campus, and this is what's been offered. The minister and the government surely must have more compassion then that.

Someone asked me the other day: well, why should students be exempt from budgetary cutbacks?.... and a legitimate question. My answer to the minister and the government would be simply this, that students have not been exempt from the tough economic times that we find ourselves in. They have not - categorically have not been exempt. Since 1984, students in all post-secondary institutions in this Province have faced higher tuition costs, higher standards of living, higher costs for books but yet they have faced the same levels of student aid and student grants for the last ten years. Students last year were receiving the same maximums as I did as a student in 1983 and 1984. So they have not been exempt, I say to the minister.

The university itself in concert with the provincial government, whether directly or indirectly, the high increases in university tuition costs over the last five years, some 39 per cent increase and anticipated this year, I say to the minister, as a result of his Budget, that we have not heard yet, that we will see increased tuition costs at other post-secondary institutions such as Memorial and such as Cabot. At Memorial, I can tell the minister, they are today talking about introducing differential fees for different degrees. That is what they are talking about doing today, a second class, third class, first class, sort of university system, as a result of the Budgets, not only this Budget but previous Budgets of this government.

Now, what sort of government on the one hand holds up a document and says Strategic Economic Plan, and the cornerstone of it, its wish and hope for the people of this Province is to be an industrious, well educated, well trained people, so that we can take advantage of a more prosperous life? Now, what government on the one hand walks the walk, or talks the talk on doing that and in one fell swoop on the other hand picks up the Budget and cuts out incentives for students to get a higher education so that they can better themselves? That is a government that does not walk the walk but only talks the talk. It is wrong and someone should hold them accountable.

I ask the Minister of Finance: What was it that drove him and his government to look at limiting the accessibility of education to all students coming out of the high school system in this Province? What was it that drove him to say, yes, we will give you more money each week, each month, for the short-term but in the end you will double what you owe? As a matter of fact what you are going to owe is going to be more than a car, what you would pay for a car payment. What you will owe after coming out of university will be 30 or 40 per cent of what you would have to pay down on a $100,000 house. What drove the government in their thinking to say this was a positive thing, and to stand up in this House and say to the people of the Province, we have given them what they wanted. They wanted more money up front so that is what we have given them. You have given them a huge, huge monkey on their back I say to the Minister of Finance and it is something that can be reconsidered.

The government should reconsider it, and there is a way to do it if the political will exists. I say to the Minister of Finance, if he cares to listen, I will tell him what the impact of this decision will be. In the end this decision will cost government more than $10 million. In the end this decision to develop to a full loan program is going to cost the government many more tens of millions of dollars in terms of people who cannot pay back student loans five or six years from now.

MR. BAKER: You said you have all kinds of ways to (Inaudible).

MR. E. BYRNE: I said to the minister it can be changed if the political will exists to change it.

MR. BAKER: To what?

MR. E. BYRNE: I can tell you this, if you would increase corporate income tax and not try to give incentives to friends of the government and stop putting it on the backs of students, that may be one way that the minister might look at it. I say to the minister that the tax concessions given to Hydro, the $15 million rate adjustment fund, those are some of the things the minister should consider. Do you want me to get into more of the details on it? What about the $2.5 million, or more, spent on the Economic Recovery Commission, an unelected, unaccountable body that decides what social, economic policy is in this Province and not the people in this House? That may be one way the minister may have a look at it.

I say to the minister and his government that in this particular decision it takes political will to make the decision and this government does not have the political will to make the decision for the students and young people of this Province. They have clearly demonstrated, I say to the minister, over the past five years that there was no commitment to the youth of this Province. They have increased their debt loads, they have increased the debt loads they will have upon graduation, and they have decreased the opportunities for young people in this Province and that is where the political will is lacking I say to the minister.

MR. BAKER: (Inaudible).

MR. E. BYRNE: Well, I have just given the minister a couple of examples. If he would like a more detailed analysis of how student aid could be implemented, and a better program could be implemented, then I invite him to call me and I will come down and show him. That is what I say to the Minister of Finance. If he wishes to have a full detailed analysis of how the student aid program could be streamlined, giving more money to students and a better program, give me a call and I would be willing to sit down in his office at any time for an hour, or at length, to -

MR. BAKER: I offer you the opportunity right now.

MR. E. BYRNE: I have ten minutes right now, I say to the minister. I have ten minutes right now.

Mr. Chairman, what else have we seen in this Budget in Municipal and Provincial Affairs? Let me tell you. Six short months ago, in October, the federal Liberal campaign came down in this Province and they said: We will kick-start the local economy of Newfoundland, a $6 billion infrastructure program, cost-shared by the federal government one-third, the provincial government one-third, municipalities one-third. That was the program, and what is the deal we see today? The people in my district were ecstatic. St. John's City Council allocated three of their top five priorities, and they were for my district, the District of Kilbride, mainly areas in Kilbride and the Goulds, but what will we see now? We are not going to see that because the Province has not lived up to its commitment.

Once again they were willing to stand and talk the talk, but once again they could not walk the walk. That is the problem with this government and this Budget, that they say one thing on the one hand and do something else clearly different on the other hand.

Municipalities -

MR. CHAIRMAN: Order, please!

The hon. member's time is up.

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

MR. BAKER: By leave, Mr. Chairman.

MR. CHAIRMAN: By leave.

MR. E. BYRNE: Municipalities, Mr. Chairman, who have managed their debt loads, who have been good money managers for their taxpayers, have been penalized because of the government's decision on water and sewer.

I ask the minister: What is water and sewer if it is not infrastructure? The city or municipalities, now have to borrow two-thirds - not one-third, two-thirds.

MR. BAKER: Instead of three-thirds. That is not bad.

MR. E. BYRNE: Two-thirds. That was not the deal, I say to the Minister of Finance, and you know it. The deal was one-third funding from the Province, which you agreed to during the election, one-third from the federal government, one-third from municipalities, and you didn't come through. You did not come through, and the people of this Province are paying for it today.

It was a scam to take advantage of federal funding; that's all it was, and now I ask the minister: Was it new money? Somehow I doubt it. As a matter of fact, I know it wasn't.

MR. BAKER: Do you want an answer to that?

MR. E. BYRNE: Yes, go ahead.

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

MR. BAKER: Thank you, Mr. Chairman.

I enjoy listening to the hon. gentleman from Kilbride. He does a good job in making his presentation. He is incorrect in what he is saying, of course, but he does a good job in saying it, so I congratulate him.

In terms of the infrastructure program, we did have a choice. We could have gone with the one-third, one-third, one-third. That would mean, in this Province, that the people who have the money would get the money. That would mean that there may be a dozen of the larger communities in this Province that would be able to take advantage of the program, and the other hundreds and hundreds of communities around the Province would not be able to.

Now we had that choice to make and I suppose we could have chosen it. We could have said: Alright, to heck with all of these small communities around the Province. We won't give one cent to all of rural Newfoundland - not a cent - and we will put it all in St. John's and Gander and Grand Falls and Corner Brook. Being from Gander, you know, it would have been nice for me to announce tens of millions of dollars for Gander.

Mr. Chairman, I don't think that's the fair way to do things in this Province. I don't think it's the fair way to do things, because these larger communities depend upon the smaller communities for their survival. The smaller communities don't have the business base that the larger ones do. The people in the smaller communities spend their money that eventually goes to the businesses in the larger communities, and the councils there tax these businesses and they've got all kinds of money to operate with.

Mr. Chairman, that is the reality of our Province. Had we dealt with the infrastructure money the way the hon. gentleman suggests, very few large communities - the urban parts of the Province would get 99 per cent of the money and all the rest of the communities nothing. We felt there was a fairer way to do it, and we have come up with that fairer way. That's why were are doing it the way we are doing it.

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

MR. E. BYRNE: How are smaller municipalities, with no ability to borrow, going to benefit? Can you explain that, in some detail, to me again? I must have missed something there, obviously. In terms of trying to distribute the money from the infrastructure fund to as many people in the Province as possible, how are those who could not take advantage because they did not have the ability to borrow, because -

MR. BAKER: They don't have the one-third - simple.

MR. E. BYRNE: As simple as that?

MR. BAKER: In all these communities government is paying the full two-thirds.

MR. E. BYRNE: That is how you've done it?

MR. BAKER: That is (inaudible).

MR. FITZGERALD: Just for a point of information. How about the communities that are more than ninety days behind on their funding to Newfoundland and Labrador Financial Services, municipal financial services? Can they avail of that money if they are more than ninety days behind in their payments?

MR. BAKER: At the present time no. It is a basic government position that number one, we deal with the infrastructure money the same way we deal - most of it, about 70 per cent of the infrastructure money, let's put it that way - we deal with it the same way we deal with our regular programs. For recreation centres there would be an 80/20 cost sharing of the two-thirds. For water and sewer it depends upon the ability to pay. It could vary from the Province paying 100 per cent of the two-thirds to the town or city paying 100 per cent of the two-thirds. For municipal roads it would be a 60/40 cost-sharing of the two-thirds.

We felt that by putting that extra money into the regular programs was the best way to distribute the money around the Province. That means that the small municipalities that are already paying to the maximum per household, when they get some work done, then the Province picks up the full cost of the provincial share, which happens to be two-thirds. Whereas places like Gander, Corner Brook, Grand Falls, St. John's, and there are a few others, because they are not up to the maximum per household and have that flexibility, they would end up picking up 100 per cent of the two-thirds. That is only on water and sewer projects. The roads would still be shared 60/40. The recreation facilities would be 80/20, and so on. We felt this is the best way to share it around the Province.

There still is a segment of that money that can be distributed one-third, one-third, one-third. There is a segment of that money that comes outside the normal municipal programs and it is about 30 per cent of the total expenditure. That will be open for other proposals to come in, and that would be one-third, one-third, one third shared.

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

MR. E. BYRNE: Thank you, Mr. Chairman. I may well understand more why the decision was made but it doesn't necessarily mean I have to agree with it. I can tell you that the constituents in my district who have been waiting, especially those living beyond Purcell's Turn and in the old Metro St. John's and Goulds municipality, that immediately when amalgamation was forced upon them - no consent, no discussion - that one of the main attractions put forward by this government was that you would have increased services within five years. The Member for St. John's South and I have talked about this. Was it a good thing or a bad thing in the long term? Many residents are waiting for water and sewer in a very heavily populated residential area and were going to get it, until government made this decision. I can stand here in all honesty and say that I disagree with that. Because my constituents will hurt because of it, and will not receive the services that they hoped they would receive because of it.

MR. BAKER: But now your friend for Bonavista South, your friend for Baie Verte - White Bay, your friend for Humber Valley, and so on, they would look at it the other way.

MR. E. BYRNE: As my friends on the opposite side of the House who represent larger urban areas, I'm sure they looked at it another way. However, this Budget, Mr. Chairman, doesn't offer any hope, in many ways. The Minister of Finance stood up and said that he wanted to tell the people of Canada, and indeed the people of the world, that Newfoundland and Labrador was open for business. I have no problem in endorsing that the private sector is the engine of our economy. But it is the small businessperson, the mom and pop shops, the employers who employ less than fifteen people, they are the real engine. These are the entrepreneurs that we should be helping. Not the large corporations. Our incentives should be aimed at getting more people to work in their local communities. That is through the small business sector.

This government did nothing again. They talked the talk on opening the doors of Newfoundland and Labrador for business, but when it came time to walk the walk with the small businessman or small businesswoman in this Province they failed miserably. The payroll tax. How in the name of heavens is a payroll tax an incentive to small employers in this Province? It is beyond me. What the government says with their payroll tax is: You reach a certain level - $100,000 on the one hand - then we are going to tax you. We will tax you for hiring people. That is what we are doing. They refused to do something about the payroll tax. It is a heavy burden on small business, a heavy burden.

In my district for example there are 116 businesses, ranging from small corner stores to large dairy farmers to sawmill operators to accountants, every time I speak with them, and I do speak with them frequently on a monthly basis, and they tell me that the payroll tax is killing them, it's choking them, it's not an incentive for them; it is hurting them and I would suspect that the small businesses in my district are like the small businesses in every district across this Province.

MR. BAKER: No matter what you say, we are not going to bring back that school tax. You shouldn't be pushing for that.

MR. E. BYRNE: I would say to the Minister of Finance, I was not around in the days when school tax was implemented and I was not around in former decisions, but I can tell you this, that I did not advocate bringing back the school tax but the payroll tax is something that is hurting small businesses, you know it, the members in this House know it and we should clearly do something about it.

Mr. Chairman, I will just conclude my comments with my references to the Department of Education and the Department of Municipal and Provincial Affairs and look forward at some time in the afternoon to get up and speak about a couple of other departments.

Thank you.

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

MR. HODDER: Thank you, Mr. Chairman.

Mr. Chairman, I have a couple of comments relative to the budgetary matters and just to tell the minister that there is a great deal of concern in the student bodies of this Province relative to the decision of the government to change the way in which university and post-secondary education is funded. In fact, over the last several days, since the Budget has been tabled, I have had numerous requests from student council bodies both in this region of the Province and from other parts of the Province as well on that matter.

In fact, just today the Member for Kilbride and I met with the Council of the Students Union executive at Memorial and they have appraised us of their real concerns, and certainly, when you examine the matter from their perspective, and they clearly express the frustrations that they have in the changes which are about to occur and as the minister has indicated, that he is not prepared to look at the grant system to reinstate it, in spite of the fact that his proposals which he is going to implement will mean that there are going to be significant increases in the debt load to the sons and daughters of the ordinary working families in this Province.

In particular, Mr. Chairman, I have been approached by several single parents who are going to post-secondary schools, who find that it is most difficult for them to be able to make ends meet now, and in fact, Mr. Chairman, among other things that have come to my attention, is that a number of post-secondary students now are availing of social programs like food banks, and while the image of the ordinary student at Memorial or at the Cabot Institute or at the Western Community College might be different in the public's mind, the reality is many students are finding it very, very difficult already.

Mr. Chairman, the students who have been talking to my colleague and I, have also expressed the real fear that they have of the impact that it will have on students who cannot go to university and at the same time live at home, and, Mr. Chairman, while we commend the government for their initiative to open first year university courses in Clarenville and to continue the programs they are offering other parts of the Province, the great majority of students in this Province have to live away from home in order to avail of post-secondary education. That means, Mr. Chairman, that they have to buy their text books, they have to pay their rents or their costs of living; they have to pay their tuitions and they, up to this point, have been able to attend because they've been able to get some relief through the grant program.

Mr. Chairman, we know the grant program was designed to specifically target those students who need help. What the government is now saying is that these students must now bear a debt load of, perhaps twice as much as they would have up until now. Mr. Chairman, what that means is that students must now go to about $22,000 in debt before they have any prospect at all of getting any relief from their debt load at the end of their graduating years. Mr. Chairman, what that means is that many students will begin to think twice. The reality is that if you have a son or a daughter who is living in any part of this Province really but more particularly those students who have to live away from home on campus or rent apartments or whatever, these students are going to have to examine carefully what this investment will mean. This has to be examined by families, by students and the reality is that I'm afraid many students will look at the prospects of getting a job and they will probably question whether or not the prospects of future employment are sufficiently encouraging for them to want to invest the $20,000 or $25,000 that will result if all of their funding comes from the student loan program.

Mr. Chairman, we also know that there are other conditions that prevail. The learning institutions do not have the access to bursaries and scholarships you find in other provinces so therefore the student who does not come from well-to-do families, these students are going to face the prospect of having to say: no, they can't go. Therefore, when you say you can't go to post-secondary institutions, what in essence you've done is that you have stifled the educational opportunities of students in the Province.

Mr. Chairman, as well I wanted to comment on the fact that the government has no idea yet as to what conditions will prevail for students to get forgiveness after they finish their post-secondary education when they have accrued a debt of $22,000 or $25,000, there is no criteria. The minister has said that in extreme cases they would look at the possibility of giving these students some relief. Well, Mr. Chairman, that's not encouraging. It doesn't say they will, it says in the extreme cases. So therefore, the change in student loans however logical it might be from the governments perspective, is going to have a disincentive effect in Newfoundland and Labrador, disincentive in terms of encouraging students to pursue post-secondary education.

Mr. Chairman, as well I want to comment on the government's proposal to reduce the number of teachers available in rural parts of Newfoundland and Labrador. In particular, I want to comment on the proposal which is contained in or reflected in the salary allocations for teachers in the Province and it's commonly referred to as the 2 per cent savings clause. Mr. Chairman, the net effect of the 2 per cent savings clause or the changes to it will be to take hundreds of teachers out of rural Newfoundland. Up until this year and I haven't had the data for the 1994-95 teacher allocations from the two large boards in St. John's but up until this year, not one single teacher was protected in the Roman Catholic School Board for St. John's or the Avalon Consolidated School Board in St. John's under the 2 per cent savings.

MR. CHAIRMAN: Order, please!

The hon. member's time is up.

SOME HON. MEMBERS: By leave.

MR. HODDER: That means that the rural parts of the Province, that is where the 2 per cent savings clause will have its greatest effect, and certainly I say to the House that when we look at revisions to the 2 per cent savings clause, the net effect, we have to make sure that the programs and the curriculum and the class sizes in rural Newfoundland are protected.

As I said yesterday in Question Period, we call upon the government to initiate a comprehensive small schools policy, because it certainly will be negatively reflected in achievement if we are to have multigrade classrooms, if we are to have class sizes that are greater than they are now, and we are to decrease the number of teachers available in rural Newfoundland.

Mr. Chairman, as time progresses in this debate I will have further comments, but I yield now to another speaker.

Thank you.

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

MR. FITZGERALD: Thank you, Mr. Chairman.

I rise today to pass a few comments on the 1994-'95 Budget. I must admit that I, too, was very disappointed because it didn't offer any hope for rural Newfoundlanders who are unemployed, or people with any hope of trying to find a job or have any things happening in their own rural communities.

It almost seems like it is another slap in the face to rural Newfoundland, especially when you look at some of the communities. There are some communities in my district, and I am sure that they are no different from communities in other hon. members districts in rural areas when you look at works, services and transportation looking at handing back some of the local roads to municipalities.

Mr. Chairman, I can assure you when you go to a place like Duntara and Keels in rural areas, that those people today, with the amount of taxes that is available because of high unemployment levels and no tax base in their communities, I can assure you they are not capable of charging the top rates for householders in Newfoundland to be able to avail of some of the infrastructure work that is being put forward by the federal and provincial governments.

Mr. Chairman, this is another situation, I think, where we will see that if people want to live in their home communities in rural Newfoundland, then they will have to pay for all services or do without them altogether, and it is probably another way that the Premier is looking at moving people from rural Newfoundland into his seventeen economic centres. They will either have to commute to those centres and do without services where they live, or live within those centres and probably be able to avail of some of the services the government might be willing to subsidize.

The two colleagues who got up and spoke before me spoke of student grants, which was a big concern. I can assure you, this is a big concern to everybody who lives in rural Newfoundland, when you have to have a son or daughter come to St. John's, pay their room and board, heat and light, tuition fees, books, transportation costs, and all the other hidden costs involved in attending a post-secondary institution. Those people will now come out of university burdened with $20,000 and $25,000 worth of government loans that somebody must pay for.

I think it is an understood thing that a society that is well trained and well educated is a society that will offer many opportunities and very low unemployment levels. I fear that we are going in the other direction and that we will always continue to have the high unemployment levels that we have because even today, in 1994, we are taking an opportunity away from our rural Newfoundland students to be able to travel and avail of post-secondary education because of the costs involved, and I think that is unfair and unfortunate.

The minister challenged the Member for Kilbride to ask him where he would come up with the money. Mr. Chairman, I am sure when you look at the overall Budget there are lots of ways there where we could cut and trim a little bit in order to maintain the level of student grants.

I think of the payroll tax, Mr. Chairman. It is one regressive tax and probably the most regressive tax that we have in our society here today. I have a friend of mine who is a small employer living in my district and I've heard the complaint from him many times, that once he reaches a certain level that that is it. There is no bloody way that he will hire anybody else on because he is not interested and he can't be burdened with the payroll tax that is being brought about by this government.

I can't understand. I fail to understand why a government would bring in a tax that would be a disincentive for people to hire somebody. It bothers me and I'm not so sure where it comes from. I think if the hon. minister has his way that tax would disappear and he would allow people to have a free rein in hiring people and get common Newfoundlanders back to work again.

The Minister of Employment and Labour Relations spoke about changes to lay off electrical inspectors and boiler and pressure vessel staff. He talked about allowing contractors now to do the work and I suppose in a way to have it on their conscience. If they make a mistake that it would be something that their conscience would dictate to them the reason it was done or to justify having made the almighty dollar versus doing a good job. I'm not so sure that will work because as you and I know many people put the almighty dollar before safety and before anything else in this world today.

Being from the same environment I suppose or industry myself I've worked with a lot of contractors down the road, and I can assure you that there were many things down in those days just to get past the inspector. When he went it was changed. I fear now you will see many more things being done, and also you will see very unsafe conditions. Probably the worst of it might be in the common household or in the domestic wiring that we see today in our areas.

I probably wouldn't have a great problem with the minister's statement if he brought in some kind of rules and regulations which would state that if anybody was to draw a permit then he or she would have to be a journeyman plumber or electrician or whatever. At least we would know then that people who were drawing the permits and doing the work would certainly be qualified people. I'm sure that would give us some sense of responsibility and would ease our minds a little bit in knowing that the people who were doing those installations were capable of doing them in a safe and professional manner.

Hospital beds, fifty hospital beds closed. From a government that promised in 1989 that they would open hospital beds and provide people with the health care that they need and they deserve in rural Newfoundland. Or in all of Newfoundland, I suppose, because many people in rural Newfoundland take advantage of the hospital care and professionalism that is offered here in St. John's. I'm sure that we would be living in a dream world if we ever expected to have people of all professions live in rural areas. I think the onus is on government to provide hospital care to people who need it, as well as education, and I know it is a costly venture. Sometimes we have to forget about the dollar and put the meaning of hospital care and health care before saving money.

Atlantic Lotto commission. It was mentioned in the Budget that commissions would be taken back from the owners of hotel establishments and greater returns be given to government. I have no problem with that, in fact I welcome that. Another suggestion that I might add, and some ways that Atlantic Lotto revenues could be used, is to give some of our local athletes a chance to travel and compete. Maybe we should direct some of this money in this direction. I have a situation in my district today in Bonavista South where the Cabot Collegiate team went and competed and won the provincial championship in floor hockey. They've been deprived of going out and competing nationally because they don't have the dollars to do that. I think it would be wise if we could look at some of the revenues that would come from the Atlantic Lottery Corporation. Maybe we could direct it in that kind of a way so we could put it back in our communities and allow our athletes to be able to go on to a much larger arena and compete and bring us pride back here to our Province.

Mr. Chairman, the hon. Minister of Social Services showed us where we are going to have $29 million brought forward in his department, and I applaud him for going to government and making those concerns known, and government allowing him to have $29 million to be able to put forward. I can assure you the need is out there for much more than that and I feel that as the need arises the minister will be vigilant and bring forward the money that is needed in order to address the concerns that will be brought forward at that time.

Mr. Chairman, I would like to ask the minister to make sure that some of that money goes towards emergency funding. I talk to people in my district, and one particular case of a gentleman who is sitting down in Elliston today who is totally blind and his wife confined to bed. His water is frozen and when he gets up in the morning he has to depend on neighbours and call somebody to bring them water. This shows there is a great need there, and I hope that some of this money will be allowed to go to help those people who need it most and are there at the mercy of government and other people, Mr. Chairman.

I know there is funding for the Economic Recovery Commission. That is another way, I think, that we could probably divert money to be used for a more useful purpose. It was with some interest a couple of weeks ago that I attended an explanation of the income support program at Clarenville and it showed everybody there how out of touch the Economic Recovery Commission is with what is really happening in rural Newfoundland and Labrador. One fisherman got up and gave an example of what would happen in his family with this income support program that the Economic Recovery Commission would bring it. It was a situation where his son worked at Hibernia and if that proposal was ever implemented it would be a case where his son would have no other choice but to leave his home in order for him to access any funding whatsoever under the income support program. It is another prime example of families having to break up in order to avail of that particular commission.

Another gentleman got up and made a very good point. At the time he said, Dr. House, in your preamble you said you supported rural Newfoundland and fishermen, but if this is your idea of supporting us and helping us, for God sake stop. We do not need your support and we do not need your help. I think that is a prime example of what a lot of people feel. I think this $2 million, or whatever money was put forward in this particular Budget into the Economic Recovery Commission could certainly be better spent and put in another direction that would help a lot more people.

The $1.2 million that was brought forward to be spent on RNC and RCMP to counteract smuggling, Mr. Chairman. I think eventually down the road we are probably going to have to follow the lead of other provinces. It might be a situation where we have our $1.2 million spent and still have to do it in the meantime in order to be realistic about what is happening and know that it is impossible to service our whole coastline, the post office, and everything else. I think it would cost much more money than the $1.2 million in order to put any kind of a stop to the smuggling we see around our Provinces today when it comes to tobacco and liquor supplies. It might be a situation where we spend our money and eventually have to lower our prices anyway. Then we are taking a black eye and getting a black eye on both causes.

Mr. Chairman, the fear of people out there today losing their jobs. I do not know why but it continues to happen. It seems like Budget after Budget the Minister of Finance -

MR. SPEAKER: The hon. member's time is up.

AN HON. MEMBER: By leave.

MR. FITZGERALD: - that the Minister of Finance continues to show a figure where he must collect somewhere down the road, and I think that is unfair. It is unfair in the fact that everybody who is out there today employed by government is in fear of losing their jobs. They are in fear of spending their money and it reflects back on the family, and I think that is unfair. I think it is also unfair when the Minster of Finance built in, or brought about the severance pay as an item that was put on the table for negotiations. Many teachers out there today - and I met three the other night in one school - stated they were retiring after twenty-nine years without dignity. They were retiring because government has created this environment where they are unsure of what is happening and in order to access money that was negotiated and there for them, now they have to give up their jobs and retire a year before the planning was done for this retirement and to go almost without dignity as if they are being pushed from the school.

So, Mr. Chairman, in conclusion, I don't see any reason why we should be out dancing in the streets because of this Budget. I realize we are living in hard times and money is tight but I believe that there is a lot of places where we could have made cuts and a lot of places where we could have spent money, other than in the direction that was provided by the Minister of Finance last Thursday.

Thank you.

MR. CHAIRMAN: Shall clause 1, carry?

The Chair, if nobody stands, has to call the vote.

The hon. the Member for Humber Valley.

MR. WOODFORD: The Minster of Forestry and Agriculture, Mr. Chairman - I was going to speak on something else but now I think I will speak on access roads. But I have another idea for the minister and I know he will go along with it too; it is just a little further up the road from that, it is almost to Big Falls, almost to Sir Richard Squires Park, Mr. Chairman, and I am sure if the minister came out and we made another trip up there some morning, he could put an access road into one of the best salmon holes on the river.

Mr. Chairman, on a more serious note, I missed the first few comments the Minister of Finance made with regards to Works, Services and Transportation and how much was going to be spent on roads and bridges, but the Budget mentions a figure of $20 million anyway, he said $18 million and the balance was monies that were supposed to be coming from the Canada-Newfoundland Railway Agreement and only for that, Mr. Chairman, I say there would be very little money spent on roads in the Province this year.

Now if there was ever a time when we needed infrastructure money and capital funding spent on roads in the Province, it is now. It is one of the best ways, I have said it before and I will say it again, it is one of the best ways to create jobs and the fact that it is only seasonal work, it would be an asset especially now where the unemployment rate is so high and a lot of construction companies around the Province are having difficulties.

The two areas where we can create jobs and do it with capital funding and something that can be spread out over a number of years, and something that can add to the infrastructure of our Province, one would submit, Mr. Chairman, that the last number of years, anyone who has been driving across the Trans-Canada in this Province in the last four or five years, there has been a real improvement to the transportation sector in this Province.

You can leave now and go across the Province and you can, at least from Deer Lake or St. John's anyway, you can do it easily in a little over six hours or a little over, when just a few short years ago it took almost eight hours to drive from Deer Lake to St. John's and that is driving at the speed limit, Mr. Chairman; that's driving the speed limit I say to the constable in the back. I had to qualify what I was saying because he might be out on the highway probably next weekend when I leave for the West Coast.

When I am talking about transportation, Mr. Chairman, when I look at what has happened this year to the capital funding, I think it was $25 million to $27 million spent on provincial roads programs last year, this year it is cut down to $20 million and I would say it is probably going lower than that before the summer is over. That doesn't auger well for the construction industry and is certainly not going to give to seasonal construction workers in this Province any reason to be positive over the next couple or three months, and that, coupled with the fact that the infrastructural program that was supposed to be administered by the Department of Municipal and Provincial Affairs is not going to have the funding in it that it was supposed to have - it will have the funding with regard to the total sums, when you look at the cost-shared agreement between the feds, the Province, and the municipalities, but when you look at the total capital funding for that department for this year, that is pretty well gone. You can safely say that the $59.6 million that was in capital funding last year is pretty well gone. So that is certainly not going to add anything, and help the employment rate in this Province in the coming year.

Most of the funds from this particular program committed this year will be ongoing for the next two or three years, and that is the danger of it. If we are going to take from a capital program just to make sure that we have the other one in place, by name only, we are certainly not adding, and helping the unemployment problem that we have in this Province.

Mr. Chairman, someone - I think it was the Member for Kilbride - mentioned earlier, the payroll tax, and how bad it was on businesses in the Province. This has been referred to many times as a tax on jobs, and there is no question, this is a tax on jobs. There have been companies around the Province, both small and large, that have been stymied by this particular tax, and there is no doubt about it, it has been one of the obstacles in creating jobs in this Province, especially in these times. If everything were okay, everything number one, the economy going fairly well and so on, everything moving along, then maybe businesses in the Province could sustain something like that, and could probably absorb the costs, but right now, with the way things are, they have to cut corners every way they turn, everywhere they turn, with regard to maintenance, with regard to keeping up their buildings, keeping up their equipment and so on, but everywhere they turn they are hit, and this payroll tax, just because they go out and hire somebody, Mr. Chairman, they are penalized for it.

It is a disincentive to create work. It is a tax on jobs, and members opposite realize the return; you take into consideration the number of businesses in this Province and the total employment rate for the Province in the last number of years, and the fact that the Budget, itself - the Minister of Finance, the other day, admitted that the unemployment rate - what an indictment for the Minister of Finance to stand up and read a Budget and say, up front, that there is going to be no change in the unemployment rate for the year ahead.

Now, if there is ever a time for a Minister of Finance and an administration to send a signal to people in the Province to try to be positive, to try to get over negativity, when the Premier is on television and in the papers every other day of the week saying that we have to change our attitudes, if we don't change our attitudes we are not going to have - and the minister responsible for employment, more specifically, is the one who should be worried about it. Change your attitudes and so on, when the minister himself, and the administration, comes on Budget day and says that the unemployment rate in the Province is not likely to change for this year.

I say to members opposite and especially to the Minister of Finance who, over the years has talked about - I remember when John Crowe was Governor of the Bank of Canada. Members opposite would always get up casting all kinds of aspersions on the Governor of the Bank of Canada - what he was doing with regard to interest rates, what he was charging and so on. Look out, today, Mr. Chairman. Since the administration, last October, took over in Ottawa, Crowe is gone. We have a new fellow there now, and what has happened in the last two months? Inflation is starting to move. The dollar is sinking, especially in conjunction and in comparison with the U.S. dollar, and what is happening to our interest rates? Our interest rates, even on mortgages - last month, gone up. All projections, as of today, say that they are going to move again. Now today is the day for the Bank of Canada rate to move. If the Bank of Canada rate moves today, I can guarantee you that within the next twenty-four hours, the chartered banks are going to move, and they are not only going to move on short-term mortgages, they are going to move on long-term.

AN HON. MEMBER: Oh, oh!

MR. WOODFORD: Bank of Canada, or charter. No, I figured that the Bank of Canada - I didn't see it today, but all projections showed that the Bank of Canada rate would move today. And once that Bank of Canada rate moves over a half of a percentage point, especially in two or three weeks in succession, the chartered banks are soon going to move. What happens then, Mr. Chairman? It comes right on back to the Provincial Government. Whatever the minister projected for the year, interest rates, sooner or later it starts to go up, it costs more for money. It costs the small businessperson more money, it costs the consumer more money, it cuts down on buildings, building permits.

I was talking to a constituent of mine just yesterday who told me that just this year, the price of lumber - and he was talking about studding - a piece of two-by-four is going to wholesale for $5.70 -five dollars and seventy cents for a piece of two-by-four. Last year it wholesaled for $2.37.

AN HON. MEMBER: Oh, oh!

MR. WOODFORD: Pardon me?

AN HON. MEMBER: That might be $5.70 a thousand.

MR. WOODFORD: No, no. I'm talking about this year's prices for studding and I just talked to two builders down here in the last twenty-four hours who said that they had been quoted at $5.35.

AN HON. MEMBER: What's that? (Inaudible).

MR. WOODFORD: For studding. No, it is not a thousand. I'm talking about studding, per piece. Thousand? For studding, Mr. Chairman.

AN HON. MEMBER: Multiply that by 6.33.

MR. WOODFORD: I know what it is. If the hon. member doesn't know what is in a piece of studding I can tell him. It is two-by-four-by-eight and it is divided by the footage. You divide it by the footage and you will get your footage and your piece of two-by-four, Mr. Chairman.

SOME HON. MEMBERS: Oh, oh!

MR. WOODFORD: But he didn't saw it. When he sold it all he had to do was pick up the cheque. That is what he was interested in. The interesting thing about that, it is not going to last. The next month or so it is going to go way down again. The other interesting thing about it, I say to the Minister of Finance, or the Minister of Forestry and Agriculture, is that we are getting orders from outside the Province. That is the first time in the last two or three years that they've been asked to - got three calls from outside the Province to export lumber. Canfor and Daigle and those bigger companies in the Province now are trying to get their orders in so they are expecting and anticipating a half-decent year. But it is the first time, and it is good. It is excellent for us.

AN HON. MEMBER: (Inaudible).

MR. WOODFORD: Not good -

AN HON. MEMBER: (Inaudible) is too low. (Inaudible) everything across the border (inaudible) pay more for it.

MR. WOODFORD: Yes, but the trick is, for our export market in lumber, we are importing about 72 per cent or 73 per cent, probably more now; probably it is up to 85 per cent, of our lumber. It has gone up. We are importing - you go over to Deer Lake and stop there by the Irving, the big stop there in Deer Lake, and every day of the week there are five, six, eight, ten fifteen tractor trailer loads of lumber passing on through, coming east to St. John's or Gander or Grand Falls or somewhere.

That is one resource that we have today that we could be exporting. In fact, I have a constituent now who is about to put up a - it is not a big thing when you look at the Irvings of the world, but you are looking at one million board feet a year, which is big for a small operator here in this Province.

AN HON. MEMBER: Where is he selling it?

MR. WOODFORD: He is selling it right here in the Province and he has the chance to sell with three companies outside. He has orders to sell, for three companies to export.

AN HON. MEMBER: What is he going to do?

MR. WOODFORD: Everything. Whatever the order calls for, he is going to produce it.

AN HON. MEMBER: (Inaudible).

MR. WOODFORD: Where is the hon. member living? - travel the Province, boy! If you want two-by-ten, two-by-twelve, twenty feet long, I can get it for you. How much do you want?

AN HON. MEMBER: Not (inaudible).

MR. WOODFORD: Yes, you will, Sir.

SOME HON. MEMBERS: Oh, oh!

MR. WOODFORD: Well, boy, that is a good one. Where is the hon. member going to get anything over two-by-six? I can cut two-by-ten, two-by-twelve at the back of my house!

AN HON. MEMBER: Sure, I have it next to my cottage.

MR. WOODFORD: You know you're not going to cut it out in Bowring Park.

AN HON. MEMBER: (Inaudible) 12 feet long, right.

MR. WOODFORD: Yes, boy, yes. If you were fortunate enough (inaudible). But, Mr. Chairman, it is a prime example and I don't - the hon. member just - if he's not gone around the Province the Minister of Forestry -

MR. SPEAKER: Order, please!

The hon. member's time has elapsed.

SOME HON. MEMBERS: By leave.

MR. WOODFORD: Just a minute.

MR. SPEAKER: The member has leave.

MR. WOODFORD: The Minister of Forestry can take you up on White River Road, down in Chouse Brook, or down in the Roddickton area, the Minister of Education's area and I'll guarantee you there is no trouble for him to show you where to get a piece of two-by-six, two-by-eight or two-by-ten.

AN HON. MEMBER: Correct him, `Graham'.

MR. WOODFORD: Oh, no. The member had better go over and talk to his officials.

Do you know the only thing stopping them from sending out tractor trailer loads like that? There is one thing stopping them today, another example of what we did years ago - one thing, not because it's not there -

AN HON. MEMBER: We haven't got it.

MR. WOODFORD: We have got it - but because of the fact that the paper companies have control over most of the resource. One of the things - I told the minister before, I give him credit for it and he's still doing it, made a deal with the paper companies. We have two or three places out our way that's created a good number of jobs out in our area and around this province because we traded on a 60/40 basis - that the loggers get first call on the logs and the company take the rest for pulpwood, and that's the kind of thing we have to do. And now, the good timber in the areas are going to the sawmills - the only place we can create jobs today in the forestry industry is in sawmilling, because the paper companies can only take so much pulpwood, whether it is 200,000 or 300,000 cubic metres a year, that's all they can take. In the sawmilling industry, as the hon. Member for St. John's North knows as well, you can produce all kinds - there's all kinds of sale there for it and no problem selling it. The only thing you have to watch and be careful of is the downturn sometimes during the year. If you happen to saw it all in the summertime and if you don't sell it every week, you could be caught if the price goes down in September or October and you have to store it - the price could down and you'd be caught holding the bag. His department, through Enterprise Newfoundland, got another good program in place. A positive thing whereby all the sawmillers and all the loggers can buy up all the timber during the winter months and in the summertime they can saw this produce and then ship it off and pay their bill back to Enterprise Newfoundland in the fall of the year. Now that's an example of helping out the small -

MR. TULK: I thought you were the minister.

MR. WOODFORD: Yes, I had it in place, it was in place but at least they kept it in place, Mr. Chairman. It is one of the areas - well, the hon. the Member for Fogo wouldn't know unless there was a fin on it. The only way he would know is if there were a fin on it, then he'd probably know - but the trees out our way don't have them.

Mr. Chairman, there are areas that can be positive and there can be a chance to create jobs. I say to members opposite, especially the Minister responsible for Finance, if you're going to help the small businesses in the Province, those same operators with this payroll tax - I know of people around the Province and hon. members know them as well, who have to set up two and three companies. It is nothing to set up a company, only $700 or $800. You only need one name now to set up a company. You used to need three at one time - under the Corporations Act you'd need three names. Now one person can go in and set up a company - and $700 or $800, that's it. The payroll tax charges that company and so on, and it's happening all around the Province. And, you know, there should be some leniency there, some flexibility for areas like that, whereby they can create jobs; and it's fairly good, it's not ten weeks, it's not twenty weeks, it is six, seven, eight and nine months, and some of them cut all winter long, so they can get their resource and supply it all summer long.

AN HON. MEMBER: (Inaudible).

MR. WOODFORD: Yes, the annual allowable cut; the only difference there, like I said, where we get our problem and where we're gaining, out our way, anyway, is because of the 60/40, because we are getting it off the company limits, that is all. Now we are seeing a lot of that because they are selling to the local supplier whereby before it used to pass along the door, the biggest kind of timber going off to the paper mills, and that is cruel. That was cruel. It was a waste.

We see the Irvings in New Brunswick putting out 1 million board feet a day out of their mill in New Brunswick, because everything that comes into the yard is utilized. Going through a sawmill today, as the minister knows, there is sawdust and shavings and slabs all discarded where it could be, if it came into the mill yard and was sawed, it could go through the system and provide another 40 per cent of the raw product that makes paper.

Mr. Chairman I will have a few other opportunities anyway to comment on the Budget, but I just wanted to say those few words.

MR. CHAIRMAN: The hon. the Member for Baie Verte - White Bay.

MR. SHELLEY: Thank you, Mr. Chairman.

I just thought I would take the opportunity today to have a few words on the Budget, as it is my first Budget as an elected politician, to sit down and listen to. I must say, it was a learning experience, to say the least, I guess, and I guess for a lot of hon. members for the first time, to come in and sit down and listen to a Budget, with all the lights and cameras and glitz of a Budget, I guess. It is something to sit back -

AN HON. MEMBER: You've only got three more.

MR. SHELLEY: I've only got three more? We will have to see about that. On this side, yes, only three more on this side; that is right.

I will say that it was an experience. I enjoyed coming in and taking part in the process of listening first-hand to what the minister had to say, instead of going through the media. Of course, a lot of it was done live here, but to sit back, and to say it was a disappointment, or say it was dull, I guess, would be an understatement.

I expected all the incentives and all the glitz of a Budget to come out and just grab you, and get this whole economy going again, but what we saw was something that had no hope. I wish the minister was sitting here now. There was no hope in that Budget, nothing that is going to make any Newfoundlander excited, nothing that is going to make the people who are on fixed incomes, low incomes in this Province, any more optimistic about their future as it sits right now.

We all agree with the realities of the fishery now, the downturn, and the mining sector, the forestry sector, and all those different things, but you expect - people expect, or they would like to expect, I should say - government, when they come to Budget day, for something to reach out and grab them and give them some hope that they can go on and live their lives with a bit of dignity, not to think about resettlement or moving to the mainland, or whatever they have to do, but a Budget you would expect, anyway, for a slight glimmer of hope to come out of it.

Now there is one word - and I would ask the minister when he returns to his seat, probably, I was looking for it a couple of minutes ago but I couldn't find it - the word `consultation' came up very early when he started to read his Budget speech, and the first thing that struck me when he said the consultation process, and I don't know exactly where it was, so I will ask the minister to comment on that after, if he will, but somewhere along the line early in his Budget speech he said the word `consultation'. It took me by surprise because it is one of the things, I think, that is lacking with this particular government, consultation, as we have just seen in the Hydro debate that is going on right now.

I say to the minister, in all honesty, and I will give him a chance to respond to it, I don't know where he said it. Maybe somebody else can tell me, but somewhere early in the Budget `consultation' was mentioned. I don't know what part of the Budget he was talking about.

Now if we move very quickly into the collective bargaining, or the so-called collective bargaining, right now, if there is any consultation in that -

AN HON. MEMBER: (Inaudible).

MR. SHELLEY: Well we missed it.

First of all to start with, for collective bargaining to be effective it has to get started on the right foot, and from what I can gather from unions, it is not just from this year. It is from the year before that, and the year before that, and the year before that, that the atmosphere to start with before you even go and sit down as people to talk to each other, to try to negotiate, and work out who is going to pay what, and how much they are going to be paid, the first thing you need to have is an atmosphere where both sides can feel they are going to have their say.

So if we start off with a process where the government is already saying: Listen, we are going to cut your throat, you just want to tell us how to do it, that is what has happened in this Budget. Government, before they even started, came out and said exactly what they are going to take, and we are taking it one way or another, and here it is. That is not collective bargaining. That is not where you give both sides their chance to have a say. You have to set the atmosphere straight in the beginning by opening up the process and say: Let's sit down to the table and let's be reasonable about this.

It takes two people to tango, as we say. If one person is not willing to budge, or move on that, then you have a problem to start with. Collective bargaining is in jeopardy before you even start.

These people we talk about in the different unions, CUPE, NAPE, teachers, especially nurses, have some great concerns. You can only be pushed so many times, I say to the minister, before you finally have your back against the wall and you say: no more. That is why each of these groups have no confidence left in the collective bargaining process. They do not believe that government will listen anyway so that is why they started off with an atmosphere that is deadened to start with. There is nowhere to turn. How can the government even expect these people to be lenient, to be able to be flexible?

If there is anybody going to be flexible it has to start with the government side talking to these people so that it will give them some hope, some chance that at least by speaking to government that government just does not have two ears plugged and are not really listening, and are just nodding their heads and pretending to listen. The unions in this Province need to know that their government has some flexibility. We all know these are tough times and there is not a lot of room for manoeuvring on the financial aspect of this, but we should also realize that before we even start the process we have to sit down in consultation and with fairness and with some flexibility.

I want to speak just for a couple of minutes on the teacher's issue, in particular. There were comments made many times, and I say it very quickly, I am a former teacher of just five years, not a teacher that has been in the profession for a long time, just five years, and I had a comment made to me, I will not say by whom, it does not really matter I guess, but a comment made that the teachers now run down the students when the bell rings at three instead of the other way around as it was a few years ago, where the students ran down the teachers. People say that changed over. Well, I can tell you from being a teacher, and I can only speak for myself, but I bet I speak for a majority of teachers, and some of my hon. friends on the other side are former teachers and they can only speak for themselves, but I can tell you for the years I have taught it was a very, very, rare evening, as a matter of fact I cannot think of any, where I left that school at 3:10 and went home.

I say I can only speak for myself, but I can also speak for many friends of mine who are teachers and who are still in the profession and it really, really bothers me when I hear somebody say that to me. Somebody once said to me you had to walk in a man's boots for at least a mile before you can say anything about that person. People say the same thing about us as politicians, for sure as politicians, and they say the same thing about teachers. There are bad teachers, there are bad cops, there are bad politicians as we all know. Every profession has them but I am here to tell you today in no uncertain terms that the majority of teachers in this Province put in a lot of good quality time and I admire them. Some of my greatest heroes are teachers. From day one, from kindergarten right on through school, and I would defend a teacher in this Province at any time, any where. Teachers have been pushed too far for too long. They do not mind giving their share.

I have talked to friends of mine now and we talked about this collective bargaining process. They do not mind giving their share. The perception in the public sometimes is that the teachers are the rich people who go off to Florida every year, go to school from 9:00 to 3:00, get all summer off, and have it knocked. Well, I want to say something from my own personal experience; I believed that before I started teaching. I confess to that and I bet a lot of people did. That is why I went into the teaching profession. That is why I went to university for five years and spent a lot of money to become a teacher. I said, my God, what a great profession, all summers off, great money, you can go to Florida every year and leave school at 3:00 every day. Well, I soon found out from the old saying I just quoted that you have to walk at least a mile in a man's boots before you can comment on him, that a teacher is far from that.

A teacher puts in time, not just in school on a 9:00 to 3:00 basis, but the most important time a teacher puts in is after hours. Speaking for myself I can tell you it is very rare to come home at 3:00 o'clock in the day, like I said, probably never and most weekends were taken up with kids on trips, concerts, teams, and everything like that. I can tell you the frustration that teachers are feeling right now is betrayal and the biggest betrayal I have witnessed and experienced this last few weeks is something that really struck me deeply. That is when I saw teachers come to me that I have known for years and years, with twenty-six, twenty-seven, or twenty-eight years in, emotionally in very bad shape, I say to all hon. members. To think that after twenty-six or twenty-seven years of teaching, because of a rumour we say now that severance pay was going to be cut, they had to resign or finish after twenty-nine or thirty years of teaching. It was really incredible to see these teachers come up to me and say I did not want to leave like this. This is not the way I intended to finish my career. It is a real shame and there is nobody to blame but this government at this time.

The atmosphere that was given out is that you have no hope, that we're going to tell you what's going to be best for you - and the rumour they say of the severance, what a rumour. It was an awful big rumour, if that's all it was, a rumour. Four hundred teachers resigned on a rumour? I find that hard to believe. What a way to finish a career of thirty years of teaching - to quit, to give up on a career after thirty years or more of teaching because of a rumour by government that severance was going to be cut. We'll see how much of a rumour it is by the time collective bargaining is over. So I say to the minister, in his budget about giving hope, I mean what kind of hope is there when that's the kind of thing that's happening in our Province? I just don't see it.

I would just like to make a couple of comments on the health care. First, right off the bat again we see fifty beds to be shut down. I don't know how many times it flashes before me - watching the Premier in 1989, I can see it as clear as day, saying we've got to open up hospital beds -

MR. CHAIRMAN: Order, please!

The hon. member's time is up.

MR. SHELLEY: Thank you, Mr. Chairman.

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

MR. HODDER: Mr. Chairman, I welcome the opportunity to speak again. In particular I want to direct a few comments towards the municipal infra-structure program. Mr. Chairman, members on this side of the House are certainly not opposed to any help that the provincial government may extend to small municipalities in this Province. However, when the federal government in its campaign announced the $6 billion infra-structure program it was announced on the basis of $2 billion coming from the federal government, $2 billion from the provincial government and $2 billion from the municipalities. Mr. Chairman, the people of Canada, when they voted, voted in part for the Liberal Government because of that particular campaign promise. Mr. Chairman, we found it very disconcerting when the provincial government decided that they will alter the ground rules.

Now, Mr. Chairman, when the federal election was on, the representatives of the Liberal Party of Newfoundland and Labrador went around and of course supported their Liberal colleagues and they were instrumental in getting seven Liberal members elected in Newfoundland. Now, Mr. Chairman, it is a matter of accountability.

I just refer hon. members back to a time that I can remember when the Premier of the Province of Newfoundland and Labrador in 1964, gave a campaign promise to the people of Mount Pearl, namely that if they voted for and if the people of St. John's West elected Richard Cashin as the Liberal member that he would pave the streets in Mount Pearl. Mr. Chairman, after the election and after Richard Cashin was elected the people of Mount Pearl went to Premier Smallwood and said: would you now please live up to your campaign promise. Mr. Chairman, I am pleased to say that the Premier of that day did not say: well now, Mr. Cashin is elected, the rules have changed. Indeed McNamara Construction was given a contract and the streets of Mount Pearl were paved. Although it might be argued that the contract was awarded on the basis of cost plus, indeed the point I want to make is not how it was awarded but the fact that it was awarded and that the Liberal Government of that day lived up to the promises that they made.

However, in this particular case we have a situation where the people of St. John's, the people of Mount Pearl, and I represent constituents in both municipalities, they voted for an infra-structure program to be paid for one-third by the federal government, one-third by the provincial government and one-third by the municipal government. However, the mayor of St. John's in the last several days has written all of the members of the House of Assembly that represent St. John's districts and he has asked that the St. John's members make representation to the House on the manner in which this particular program has now been decided. In fact, Mr. Chairman, he has indicated that the City of St. John's, at its council meeting on March 15, has passed a resolution expressing dissatisfaction with the manner in which the infra-structure program has been administered by the provincial government.

Now, Mr. Chairman, I wanted to make it quite clear, the Mayor of St. John's and the Mayor of Mount Pearl who have written me as well, have not said that they are against the provincial government giving extra help to the smaller municipalities or those municipalities that have debts in excess of $300 per resident. Mr. Chairman, what they are saying is that the federal government announced its infra-structure program on the basis of sharing equally between the three levels of government, and based on that information the City Council of Mount Pearl and the City Council of St. John's, prepared capital works budgets. Many of them were geared to take advantage of the funds that are necessary to do improvements to water and sewer programs in St. John's and in Mount Pearl but particularly St. John's in the areas of Kilbride and in the areas of the Goulds.

Mr. Chairman, I want to make it clear, that up until this particular time, the City of St. John's, the City of Mount Pearl have not been able to take advantage of the shared funding that had been offered by the provincial government. In other words, the water and sewer components have been, for the most part, paid for by arrangement with the provincial government whereby the municipality pays 100 per cent of the cost, and for St. John's and Mount Pearl, the federal initiative was an opportunity in which they would get some fair treatment.

Mr. Chairman, what the people of St. John's and Mount Pearl are saying is that, they have recently been informed that they will only be able to have the one-third federal funds used in their municipality and that they themselves, the residents of St. John's and Mount Pearl will have to pay two-thirds of the cost, and, Mr. Chairman, that is contrary to the original intent of the federal government to improve municipal infra-structure, and while we acknowledge that the Province is in severe, economic and financial difficulty, we do not think it appropriate that the funds should be made available for the rural municipalities on the basis of the taxpayers of St. John's and Mount Pearl and other areas of the Province that had been denied the one-third provincial funding under this program. In other words, that the provincial government would use its decision-making powers to deny the people of St. John's and Mount Pearl access to one-third of the federal program.

Mr. Chairman, the City of St. John's is on record as being extremely dissatisfied with the fact that the provincial government is not making any contribution to their water and sewer projects whatsoever, and they have asked the provincial government to revert to the original, equal cost sharing program as announced in the federal government's campaign literature, the Liberal Party's campaign literature in the October 25, federal campaign.

Mr. Chairman, I do believe it incumbent upon the government to review this policy to assure that all people of this Province are treated fairly and equally and that the delivery is made on the basis of the campaign promises that were made, and which were endorsed wholeheartedly by the Liberal government and members opposite. To do otherwise is to do something after the election that is contrary to the programs and to the policies put forward during the election.

On behalf of the citizens of St. John's, and particularly Waterford - Kenmount, and I am sure even hon. members on the opposite side who have constituencies in the St. John's area, they know of the concern expressed by the council of St. John's and the council of Mount Pearl, and we ask the government to look again at being fair and being equal in the administration of the federal infra-structure initiative.

Thank you very much.

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

MR. MURPHY: Thank you, Mr. Chairman. I just want to make a few comments behind the Member for Waterford - Kenmount.

I concur and understand exactly where he is coming from because when the federal government came out with the red book and said that the infra-structure program one-third, one-third, one-third, was there, as well, it sounds good and everybody is a little bit excited about it, that there is going to be an extra $150 million, whatever the case might be, for all of us to get involved; but I got the same letter from His Worship today, and I looked at it, and if you are going to spend $30-odd million on a civic centre, and you are going to have other things that are prioritized and what have you, I have some difficulty with that, and I am sure the member understands where I am coming from. I totally support a civic centre, but I only support a civic centre if it's affordable.

AN HON. MEMBER: (Inaudible).

MR. MURPHY: I would suggest to the hon. Member for Menihek to take his time. He left out a lot of information up in his own district the other night, and I am talking to the Member for Waterford - Kenmount. The Premier had to go up and clean up the foolishness that the member had all over Menihek district.

I say we have to be careful now. It is all well and good. The Member for Mount Pearl knows. He was in the position, in the previous government. You cannot find funding for all things, you can only find funding for those on a prioritize basis-

MR. WINDSOR: But you have you priorities all screwed up!

MR. MURPHY: Well, that's the member's opinion and perhaps we do in some areas and should have a second look or what have you because those who are prioritizing, I would say to the hon. member, are some of the same people who prioritize when you were the government which makes me wonder, however, be that as it may, on anything and everything so I say to the Member for Waterford - Kenmount, yes, I do support the infra-structure program and I would hope that government can find its one-third.

I heard the concerns of that great Liberal, Randy Simms this morning on the radio, and I heard some other great concerns expressed by council members in Mount Pearl and I say to the hon. member now, he knows this is 1994, he knows what the economy is all over Canada. You heard again this morning the publicly owned Hydro in Ontario, with another massive layoff, 10,000 have been laid off by Ontario Hydro, the Crown controlled and owned Hydro, so the member knows that it is pretty tough and we are trying to do our best in a very equitable way to distribute the few dollars that government has left over.

I support the water and sewer program in St. John's, but I mean, it is all very well for the councillors of St. John's to pound on their desks and say: find the money for everything, it is just not possible and I think Councillor Grant, is it Councillor Grant in Mount Pearl?... made a very good point. Let us put our application in, let's hope that the provincial government will participate in the program. Hon. members on this side have talked to the minister responsible, the minister knows what he has at his disposal through the Budget, so I say to the hon. member, what's possible is possible and what's not possible of course, we just have to wait for another day; but I think the most important thing right now is to prioritize and as much as a civic centre is needed, I think that the City of St. John's has to look at what the taxpayers expect of it, the same as you as an ex-mayor of the City of Mount Pearl knew what your taxpayers expected.

They expect the essential services to be provided first and if St. John's has to find a few dollars to do up the old stadium and try and live with that, then so be it, but I speak on behalf of the city and I'm here all the time trying to do my best on behalf of the residents. But I'm not naive and foolish enough to think that government can do everything. Because as the hon. the Member for Humber Valley knows, you can have the best of intentions. He knows you can't always find money for everything - as much as you want and as much as you would like, it's just not available. I know where the member is coming from and I respect his opinion, but I want him to try to rationalize the few dollars that government has at this time. Thank you, Mr. Chairman.

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

MR. WINDSOR: Mr. Chairman, I just want to rise - there are only a couple of moments left before we adjourn for the afternoon. I want to just rise to deal with this same issue.

The issue here - and the hon. Member for St. John's South talks about not having money for everything, we know that. Obviously, everybody knows you can't finance everything. What we are talking about here is rank discrimination between larger municipalities and rural Newfoundland and Labrador. We all recognize that communities in rural Newfoundland may well need another level of service or a level of assistance. Maybe it should be a different program.

What my friend, the Member for Waterford - Kenmount is pointing out is that here we have a federal-provincial-municipal program which was to be cost-shared one-third - one-third - one-third, and all of a sudden now the rules have been changed for larger municipalities.

MR. WOODFORD: They have no money in it!

MR. WINDSOR: They have no money in it. That is right. It is all a sham, that is all. Talk about spending $52 million. It is the municipalities that will be spending the money, not the Province.

Mr. Chairman, how does this government justify saying to one municipality that we will pay our one-third share and then say to another one that we won't? There is only so far that residents of the larger municipalities such as St. John's, Mount Pearl, Gander, Corner Brook, Grand Falls and others can go. They are now paying, by far, a greater share of the cost of municipal services than in rural Newfoundland.

Water and sewer systems, for example, are installed in many municipalities in rural Newfoundland and Labrador, and we know they can never hope to pay the interest, in many cases, let alone the principal, whereas, in St. John's or in Mount Pearl, when water and sewer services are installed, the home buyer pays for the entire cost. The cost is fully recovered from the sale of the building lot. The same is true in Gander and Grand Falls and Corner Brook. So there is absolutely no subsidy there, yet, in rural Newfoundland, there can be major subsidy on those systems.

Now we have a program which was to be applied across Canada, this infrastructure program, a national program, and we find that larger municipalities in Newfoundland alone are going to be treated differently. Now, Mr. Chairman, there is absolutely no justification for that. It is not a question of whether there is enough money there. We know how much money is there. We know how many millions of dollars are allocated for this program. All we are saying is, let's treat all municipalities equally and not make chalk of one and cheese of another. I think you will find that not only are home-owners in the larger urban centres paying their fair share, they are probably paying a much higher property tax than anywhere else in the Province. You will also find that there is a much lower level of unemployment in those communities, so that, not only are we paying through our municipal taxes, but because generally speaking residents in larger areas have a better opportunity, or are fortunate enough to have a higher level of employment, are also paying through their income tax for the support of rural Newfoundland, Mr. Chairman.

I am not knocking rural Newfoundland by any stretch of the imagination, and I recognize that obviously, municipalities that aren't able to pay, that is why the Province supports them and guarantees the debt and is paying a considerable amount of principal and interest for many of these municipalities. But to say that in addition to that, larger centres, because they have imposed higher levels of taxation, because they have done a better job of collecting taxes, because the home-owners have paid for their services in the first place, that somehow those people should not be able to enjoy this national program -

AN HON. MEMBER: I disagree with your doing a better job in collecting - they simply have a bigger tax base.

MR. WINDSOR: They have a bigger tax base. There is some argument; I think they are also doing a better job. The larger municipalities are more professional and they have the staff and they collect a higher percentage of their taxes. I say it is almost automatic because in the rural areas, most of the homes are mortgaged and the taxes are collected by the banks and the mortgage companies, whereas in rural Newfoundland, a higher percentage of the homes are owned. They build them as they can afford to build them and you don't have all the same percentage of mortgage on them. So there is a higher percentage collected, but there is also a higher tax assessed in urban Newfoundland, and it is not necessarily for the level of service being provided, but we are paying a higher share of the cost of those services than in many rural municipalities. I think it is just absolutely wrong to discriminate against the larger urban centres that are paying their share and doing a better job at it.

Mr. Chairman, I adjourn the debate.

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

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

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 Trinity - Bay de Verde.

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

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

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

MR. BAKER: Thank you, Mr. Speaker.

I would like to advice members of the House that tomorrow, Wednesday, we will be debating the resolution on agriculture originally put forward by the Member for St. George's. He, however, is going to be absent tomorrow, so the Member for Terra Nova will instead introduce the resolution on his behalf.

Then on Thursday, Mr. Speaker, we will be resuming our debate on Interim Supply. On Friday, the real House Leader will be back again, and I suppose we will then decide -

SOME HON. MEMBERS: Oh, oh!

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

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