The Committee met at 9:00 a.m. in the House of Assembly.

MR. CHAIRMAN (Oldford): Order, please!

I would like to welcome everyone to the Government Services Committee on the Estimates. Today we're looking at the estimates of the Department of Municipal and Provincial Affairs and Newfoundland and Labrador Housing. We welcome the minister and his staff, and with that I will introduce the committee.

To my left is Roger Fitzgerald, the vice-chair of the committee and the Member for Bonavista South; Mr. Jack Byrne, the Member for St. John's East Extern; Mr. Lloyd Matthews, the Member for St. John's North; Mr. Don Whelan, who is sitting in for John Crane, and Don is the Member for Harbour Main district.

We will allow the minister fifteen minutes to introduce his estimates. Then the vice-chair will have fifteen minutes to question the minister. From there on we will go in ten minute sequences.

I ask the officials to identify themselves each time they speak so that we can keep the records straight for Hansard. We wouldn't want any great historic statements to be credited to the wrong people, so therefore it's important that you introduce yourself each time you respond.

I want to welcome Mr. Walter Noel, who just joined us. Walter is a member of the committee, and the Member for my own district of Pleasantville.

Without further ado, Mr. Minister, if you would begin we will get the proceedings under way. Mr. Minister.

MR. REID: Mr. Chairman and members of the committee, I am pleased to be here to present my department's estimates and to answer the questions which your committee may have following my opening statement. I will be happy to answer any questions for members of the committee; however, there may be some occasions and some technical areas - I don't profess to know my department inside and out - there may be times when I may have to divert to some of my staff to answer some questions.

On my immediate left is the Deputy Minister, Mr. Clarence Randell. Mr. Art Colbourne is the Assistant Deputy Minister, on my right here, and Art is responsible for municipal support services and sports and fitness; Mr. Winston Hiscock, Director of Administration; and Felix Croke, Manager of Financial Operations.

There are two separate sets of estimates this morning, Mr. Chairman, Municipal and Provincial Affairs, and later on, I guess based on how slow or how fast we are in regard to Municipal and Provincial Affairs, I will be calling my people in from Newfoundland and Labrador Housing later on this morning, and then we can hopefully - hopefully, Mr. Chairman - because of the restrictions on the time that I have, and I am sure some of you have as well, we may be able to get through both estimates this morning. I am hoping we can. If we don't, then it will probably be a week or two before I will be able to get back, to be quite honest about it. The reason for it is that I'm tangled up in this infrastructure program and we're working day on night on it right now, and I don't have time to breathe, to tell you the truth.

Anyway, with that said, I'm not going to be too concerned about that. If it's your wish to do Newfoundland and Labrador Housing this morning they're at our beck and call and it's only a matter of me picking up the phone.

Mr. Chairman, the total estimates for the Department of Municipal and Provincial Affairs is $176,804,000. There are revenues in both current and capital accounts totally $35 million, leaving a net expenditure in the department of $141,506,000. There are 227 permanent positions in the department, operating all divisions.

Mr. Chairman, the department is comprised of two main branches, and its delivery services embodies a number of regional offices to ensure the best delivery of services to municipalities and sports and recreation commissions in the most efficient manner.

The Department of Municipal and Provincial Affairs is responsible for matters relating to local government, municipal finance, real property assessment, urban and rural planning, development control, engineering for water and sewerage services, roads construction and reconstruction and, of course, co-ordination of emergency planning to municipalities.

As well, we have under our department the Fire Commissioner's office which makes us, I suppose, responsible for fire prevention and fire protection in the Province. The department is responsible for amateur sports and fitness, and recreation activities as well.

The activities of the department are broken down within the following categories. Executive and Support Services; this activity mainly provides for funding for the operation of our executive and administrative accounting and other financial support services for the whole department. Then there is $15,671,000, that is funding that covers our engineering services to municipalities for water and sewerage installation, street reconstruction and paving program. The provision of town planning for municipalities, provision of assessment services, provision of developmental control and protected roads within municipalities and without, and the maintenance of our industrial water systems around the Province. Funding is also provided to Newfoundland and Labrador Federation of Municipalities, to the local administrators association as well.

Mr. Chairman, we have four regional offices outside of St. John's. One in Labrador, one on the West Coast, one in Central and one in eastern - I am sorry - and our eastern office is located in the metro building even though our department is located in the Confederation Building, we have an eastern office that is run by Keith Warren, and he is located in the metro building and takes care of everything this side of Port Blandford.

The idea of these offices is to have the delivery of services provided in the area that is closer to the communities and groups served by the department, and also provides for better liaison between the department and municipalities and will provide for more timely and meaningful process or response to municipalities and organizations, as departmental employees in the regions can get to know the municipalities needs in cities, in towns, local service districts, sports and recreation groups; all the groups I suppose that operate within a municipality.

These regional offices have been given a considerable amount of authority and latitude to manage the responsibilities within their jurisdiction, and I have to make this comment quite honestly, Mr. Chairman, that since I have become minister, less than a year ago, I remember some years ago, the Federation of Municipalities as well as a number of us in the House, were complaining I suppose about the fact that the government was not decentralized or should be decentralized and some of our departments should be moved throughout rural Newfoundland. In this particular case in my department we have done that.

We have opened up four offices and for some reason or another, I don't know what it is, but some MHAs, through their councils, have a tendency to bypass on a regular basis the regional offices, and we are having a lot of problems with that and the approach that I have taken, on two separate occasions since becoming minister last year, was, I have written the municipalities and basically outlined to them that: look, we do have these offices in place, people in the offices who are more familiar with your problems and I would prefer that you go to the office before you try to get to see me or the deputy minister, and I have to inform the committee that I will be enforcing, I have no other choice but to enforce that rule of thumb, and I will be writing the municipalities in the next couple of weeks and expressing to them my concern about the fact that they are not using their regional offices, and I will be telling them that I refuse to meet with any municipality unless the municipality has gone to the regional office and has been recommended by the regional office that they come to see me.

I am trying to be as fair as I possibly can, but since last year I have seen in my office 168 councils, and that's not counting what some of the MHAs will bring in to the House and I will meet upstairs or I will go out and visit and so on, but actually in my office, and you just can't cope with it; not with 287 incorporated communities and 180-odd local service districts and then the remaining of recreation commissions and communities of which we have over 600 in the Province, so you can imagine on a daily basis, and I know that some of you realize too the amount of time, it sometimes take to set up an appointment to see a council, so I think most people will understand that. We have these people out there, we are paying them decent wages in places like Corner Brook and Labrador. If they are there then I think as the minister I'm responsible to force people in to see these experts or these professionals or whatever.

The real property assessment division operates under a separate act and is responsible for assessment of real property in all municipalities with a real property tax except St. John's. They do their own. At present some 270 communities have adopted a real property tax, and the division has assessed approximately 165,000 properties throughout the Province. This division must continuously conduct reassessment in these municipalities on a rotational basis. To assist the division in its ever growing task my department has purchased and just recently completed the installation of a computerized mass appraisal system, which has automated the assessment process. They are starting to catch up. I'm hoping that within a year we will have everything computerized to the point where we won't need to go out and be doing reassessments and appraisals on any of those properties. We can sit at a computer and actually have the information available.

Using this new system my department will be able to catch up with the backlog of reassessments and new assessments required to be done on overtime. The reassessments which are now conducted every six or seven years will be able to be conducted more frequently and probably every three years. There will be tremendous benefits to municipalities because they will be able to be much more current in their assessed values, and it will eliminate the need for major increases in the taxation value of property which occur every six years due to the large amount of inflation which normally occurs during such a long period of time. It will also have the advantage of allowing the municipalities to earn more revenue through the adoption of an earlier reassessment cycle without having to necessarily increase their mil rate. The new system can also provide information to the private sector which can be sold to them, and therefore produce some revenue to reduce government's operating costs of the new system.

Within the services to other municipality grouping is our inspection division. The small staff of nine inspectors is available on a continuous basis to all municipalities to undertake internal audits when there are financial problems within municipalities, and to offer them advice where they are required for financial planning, or to advise them on general municipal procedures. This service is especially helpful to new councils when they are not familiar with the procedures and operations of councils. When I say "new councils" I also mean every four years when there is a drastic change in a council because of municipal elections. We find that every four years after a municipal election, the general municipal elections held in the Province, in a lot of cases municipalities tend to put a heavy burden on these people, to go out and talk and explain the roles of council and what they should be doing and so on.

There is a local government division with a staff of three people. This group provides general support to the municipal operating section of the department, provides advice to the regional managers on matters of departmental policy and programs.

Mr. Chairman, there is an urban and rural planning division. This division is staffed by professional town planners and supported by planning technicians and other administrative staff. The role of this division is to provide town planning advice, to prepare municipal plans to municipalities, and to advise them on various planning policies and regulations which may be used within the individual municipalities. The department also occasionally hires town planning firms to supplement the work of the urban and rural planning division and cost-shares the development of town plans with some municipalities through this process.

There is also a developmental control section within the urban and rural planning division which is responsible for the establishment and monitoring of policies for the control of the Province's main highways, including the Trans-Canada Highway, and other areas which are placed under this control. This ensures that proper planning is adhered to in areas which are not incorporated but which may be near municipalities or other areas where growth activity is taking place.

There is our engineering services division. This division is responsible for administering the municipal water and sewage, street reconstruction, and paving programs. Within this division also is a planning and design section and an industrial water section. Planning and design group is responsible to review the plans and specifications of water and sewage projects which are approved for municipalities under capital works, infrastructure or whatever method we use. The industrial water service division is responsible for the operation and maintenance of the government industrial water service systems that we have around the Province and there are a number of those.

Grant funding is also provided for community water services. This is separate from other capital water and sewage installations designed to provide domestic water sewer services to local service districts. It's usually comprised of smaller types of systems, artesian wells and we got $900,000 in that envelop this year again. Funding is also provided to assist municipalities with the development of solid waste management facilities. Mr. Chairman, this year approximately $6 million has been provided for the development of water and sewage facilities pursuant to the federal government, federal-provincial cost-share for municipalities in Northern Coastal Labrador, that's separate from our capital projects.

Assistance and Infrastructure support; Mr. Chairman, this section provides funding for water and sewage programs throughout the Province. The amount provided in the estimates is the amount required to meet the repayment of the debt which is financed through the Municipal Financial Corporation on projects that are completed. Some $67 million is available to cover the debt, both provincial and interest payment, for road construction, paving programs and water and sewage subsidies. Provision is also made for special assistance to municipalities. $985,800 is provided to enable my department to respond to requests of municipalities for special assistance when they are in dire need and I can't stress the word `dire.' It covers such items as special assistance to immediate administrative and operational overheads when there are insufficient revenues generated within the town during the year. This fund is managed by the departments finance committee which reviews all requests for the kind of assistance and recommends whether or not funding should be made available and the amount. A considerable amount of funding is also provided for the statutory grants to municipalities this year. $41.5 million will be granted to municipalities under the Municipal Operating Grants. Now you're going to see - I don't know if it's in the estimates or not but that $41.5 million, as of now, is up to $41.8 million because of financial changes and we're not really concerned about that. It's only an extra $300,000.

Cost sharing funding of $1,693,000 is provided for environmental impact projects currently ongoing in the Province. The cost of these projects are shared equally among the federal/provincial municipal governments. Only the federal share of funding is provided here. The provincial and municipal shares financed through Newfoundland and Labrador Finance Corporation. An amount of $35 million is provided for projects under the Canada-Newfoundland Infrastructure Program. This program is cost-shared by the municipalities as well as the federal government. For certain projects in excess of $50,000 only the federal share is funded here under that amount. Even though there's only $35 million in there, showing in the estimates, because of the financing that we have to provide through NMFC that figure will become much greater than that but we can't get a definite amount on it until we actually complete the announcements, the tender documents and so on for projects. So that $35 million may become -I don't know, in the next two years that $35 million may end up being $60 million for sure, wouldn't it?

Then Protection Services, Mr. Chairman, the fire commissioners office is under my department. We have another million dollars this year in fire fighting equipment. Recreation and sports are also in my department and I announced earlier that we're going to proceed with the Summer Games for 1996 for CBS and we're going to go ahead with our Winter Games in Labrador again next year. Maybe the best thing - one of the nicest things that happened to me I suppose, since becoming minister, is that we've introduced the community recreation capital grants which will allow me and my department a little bit of scope in providing small dollars to municipalities around the Province to help with ball fields and this sort of thing. Now, that was gone, I think, for the past three years but I had it reinstated this year so it is going to give a little bit of latitude to help, especially smaller rural communities, recreation commissions and so on, to help put a fence on a ball field and this sort of thing.

MR. REID: Mr. Chairman, those are my opening remarks. Sorry I went a bit over but I had to cover my whole department and now I am willing to try and answer any questions that might arise.

MR. CHAIRMAN: Thank you, Mr. Minister.

Mr. Fitzgerald.

MR. FITZGERALD: Thank you, Mr. Chairman.

Mr. Minister, I think I fully agree with you when you stated that municipalities should be encouraged to use the district offices, but I suppose that will have to start at my educating the councils because in the past I know people from my area and from my district, it seemed in order to access the local office, had to come to St. John's. If you were coming to St. John's it was always a situation where you wanted to see the minister, the man at the top. In my own experience I did quite a bit of dealing with Mr. Keith Warren who is looking after the area I represent here and I must say he has done an exceptional job. He came out on two occasions and visited all councils.

It is surprising the number of councils that are out there, and especially some of the administrators who have been there in place for years and years, and what is not known about the operation of the Department of Municipal and Provincial Affairs. Those meetings I have had, and I have offered them to every municipality and every local service district in my district, I think is one of the most learning things for me and one of the most information sessions that those people have had, by this gentleman going out and bringing the information from your department.

I think Mr. Warren is doing an excellent job but I still fail to understand why that particular office is located in St. John's.

MR. REID: That was something that was done, Roger, prior to my being minister but it is a good question and I cannot answer it, why it is located in St. John's?

Clarence.

MR. RANDELL: The principle reason why it is located in this immediate area is because by far the major concentration of municipalities in the easter region are directly here on the Avalon Peninsula. I think out of a total of something like 123 about 89 or 96 are actually right in this area, on the Avalon Peninsula.

MR. FITZGERALD: You say it goes as far as Port Blandford?

MR. RANDELL: It does not include Port Blandford but it takes in the Bonavista Peninsula, as you are aware, and also, of course, the Burin Peninsula area, so all points east of that.

MR. FITZGERALD: He certainly makes himself and I compliment the department for freeing him up and allowing him to do that.

There is one particular thing I always failed to understand, and I suppose there is a reason, and if there is I would like to know, why once a community council is formed, why can it not revert back to a local service district if the department agrees that it would function much better as a local service district, and the people who are involved in the community agree as well?

I have several areas in my district right now that find themselves in a situation where it is impossible to meet their financial requirements because water and sewer, this sort of this, was put in in the past and it was always a situation that out of the money they collected they had to pay 20 per cent of their revenue, but now that has changed and they will never, ever, be able to afford to pay their debt if they all were charged $500 a household in a little community in Plate Cove East. Now, the find themselves in a situation where there are a number of local roads, or local lanes there, which are almost like an obstacle course to access, and because this massive amount of money is owing and because somebody in the past convinced them that this cadillac water system was something they needed, they have been saddled for the rest of their lives and it seems like the department is not willing to address that.

The problem, I can assure you, will never go away and I am wondering if the department has plans to look at some of those problems, and if it is possible to have some of those community councils revert to a local service district.

MR. REID: Roger, you're right in your line of thought. I agree with what you're saying, to a certain extent, but the problem with it has been, Roger, and I think I know in a lot of cases it's pure politics -

MR. FITZGERALD: I agree.

MR. REID: - where a previous MHA, regardless of who he was, or who he represented, went in and said: Look, if you become a council I'll give you water and sewerage, not realizing that, and not telling and explaining, I suppose, to the constituents and to the people living the town that sooner or later you're going to have to pay for this; someone is going to have to pay for this.

You're absolutely right, but to take a council and move it back to an LSD, based on the reasons that you gave of not being able to afford to pay off a cadillac system, then if we do that then who has the responsibility to pay off the system?

Sometimes MHAs will say to me: Can you make a special case for a certain municipality? There's no such thing in Newfoundland as a certain municipality, because for every one case there is, like Flatrock, for example, there are twenty out there like that in the same situation.

I've run into numerous communities who have started a cadillac, as you would call it, water and sewerage system. It will have as much as $1 million or $2 million worth of infrastructure in the ground and not servicing one house, but the community has to pay their share towards that. It was the community that accepted that money back five, ten, fifteen or twenty years ago - it doesn't really matter - and at the time, I agree, I doubt very much if it was explained to the residents of a community that, look, if you're going after this you're going to have to start paying for it up front. Even at 20 per cent, Roger, you'll find that most communities out there, even though we changed our system, there are a lot of them that are still hovering around the 20 per cent mark. There are a lot of them that are below the 20 per cent mark, but there are others that are up to as high as 60 per cent. So to change it from a council back to an LSD is practically impossible to do.

I don't know if, what you're referring to, if and when this happens that we bring in a local or a regional council, if that would compensate some of the people in these areas. It probably would, because what our plans are, or what we're looking at, is the possibility of (inaudible) everybody that's in the area, regardless if they're a municipality, an incorporated municipality, an LSD, or nothing. It would probably spread the burden a little thinner and maybe make it easier for certain councils or certain areas to be able to offset the cost.

I agree with what you're saying, but it's sort of a dilemma. You don't know what to do because if you start that, Roger, moving incorporated communities back to LSDs, I would think right now, with the financial situation, some of the municipalities in this Province should have 100 coming in asking to do the same thing. Then, of course, the government would be faced with the debt that was incurred by all of those.

I suppose the only way that you could cope with it would be go to Cabinet and ask for, I was going to say hundreds of millions of dollars; it wouldn't be that much, but it wouldn't be far off, to be written off by the government, and we just can't do that at this particular point in time.

MR. FITZGERALD: It seems a little annoying, I suppose almost ridiculous, for you to go and see people living on those local roads, and because somebody in the past - and you're right, it was politics - somebody in the past had convinced them that a community council was a good thing. Now they're living on those local roads and the municipality can't even afford to put a load of fill on it, or plough it. I think it is ploughed, but I think that comes out of the funding that would be there for them through the Department of Municipal and Provincial Affairs, but it's certainly not kept up in the summer time.

The municipal infrastructure program, communities now that are more than 90 days behind in their payments to Newfoundland and Labrador of municipal financing, are those communities going to be considered for this program?

MR. REID: We've started off with one letter basically outlining the problems that we had with municipalities in regard to their debt charges we went to a second letter, and the last one that we wrote I think was in early March. We basically said to the communities that - there were 114 communities out there that had over ninety day debts to MMFC. We wrote them a letter, I wrote them a letter. I basically told them: We will give you four years to come up with some way to replace or to repay that over ninety day problem. The vast majority of communities came into us. I would say there was well in excess of 90 per cent. There were some that didn't. Bonavista for example was one that didn't, Roger. Ninety per cent or more came back to us and made agreements, talked to Art Colbourne on the phone, or Keith Warren and so on, and came back and said: Yes, we accept the fact that we owe this and we want to pay it off over four years.

Those communities that came back and made those recommendations, we've accepted I think just about every one of them. Where there were problems we've sent our finance people back and worked out the problems. Each one of them will qualify. They are being considered right now under the infrastructure program. We still have twelve or fifteen out there that haven't replied to us at all. They will not - Bonavista will not receive one copper in capital works, infrastructure money, or any funding whatsoever. Not even emergency funding. Because Bonavista - I'm using Bonavista -

MR. FITZGERALD: Yes, (inaudible) that is okay.

MR. REID: - to make a point to you, Roger - because they haven't replied to us as far as we know as of yesterday.

I was shocked, to be quite honest about it to see some of the communities that did that. One community for example not too far from here basically told me to come in and they laughed in my face and said: If you think you will ever live long enough to recover that money we owe you, forget it. I wasn't one bit upset, but they have to realize that governments, not even if there is an emergency in that town tomorrow, under an MC, Minute of Council, they cannot get one copper from the provincial government until that problem is straightened out. But like I said, the vast majority of them did that.

I don't know how many we have, Art. How many do we have left now (inaudible)?

MR. COLBOURNE: (Inaudible) fifteen.

MR. REID: Twelve or fifteen.

MR. COLBOURNE: (Inaudible).

MR. REID: Oh yes.

MR. FITZGERALD: When a municipality replies and agrees that they will assume responsibility and pay back the amount of money over a four-year period, does your department then look at their capabilities of paying it back, even though they say that yes they will?

MR. REID: Oh yes, very much so.

MR. FITZGERALD: Is it a situation that they apply, and because they apply, make an agreement, that they will be considered? Or is it a situation where they apply and they are not considered because you feel that they don't have the ability to assume the payment?

MR. REID: Our people in the department know - it is surprising really. I'm surprised because I'm a new person in the department. You would be surprised how much our finance people know about individual communities off their heads. I can say: How is - and I will name a community - doing financially? They can tell me almost to the cent what they owe and what their debt is and what their long-term debt is. They are pretty well, almost on a daily basis, on top of what is going on in municipalities around the Province. Especially my regional managers and people in my regional offices. Keith Warren is amazing. Keith can almost without any reference to material or anything tell you basically how well a town is doing, whether it is surviving financially or not, without any reference whatsoever.

So yes, you are absolutely right. We received some that were far-fetched, we knew that they couldn't cope with it. We went back and worked a better deal with them and gave them a break here or there and helped them where we could. But now that - they are all being considered for the infrastructure program and the capital works program.

MR. FITZGERALD: Mr. Minister, has your department ever looked at contracting out such services as engineering services and assessments? It seems to me that might be one approach where we can save some money and make better use of some of the people that we have on staff.

MR. REID: I mentioned earlier, in our engineering service I think we have only four or five people in that total department. We don't do any engineering generally. We just retain those engineers in our department to look at what the engineers that are out there in the private sector send in to it. All our engineering basically goes to a consultant, 99.9 per cent of it. We don't have an engineering staff. When the consultants prepare engineering the drawings and so on for projects - water and sewage and roads and that - then there has to be somebody in our department who can scan through that to see if it is legal, aboveboard and so forth.

On the appraisal, yes. I'm in the process right now of doing a complete evaluation of our assessment division. We ran into a bit of a snag in our estimates, and you will notice in the estimates that our appraisal division was cut drastically and it was re-instated.

AN HON. MEMBER: (Inaudible).

MR. REID: I'm sorry, that was planning.

I've been asked by a number of communities and by the Federation of Municipalities why can't some of the communities in the Province do their own assessment. The problem we have with that of course, and I guess the previous government had the same problem because they brought in the system, is that it is quite... a city like St. John's or Corner Brook or some of the wealthier communities around the Province wouldn't have any problems in paying for a private assessor. Get out in Bonavista Bay for example and look at some of your small towns that are incorporated. Would they be able to afford the assessment services of somebody living in St. John's who would charge you up to maybe $400 a day? We looked at some of the prices of the private ones and we found that it was just out of the question. These smaller communities could not afford to pay professional assessors to come into their communities.

In the wisdom of the previous administration they brought in a system whereby they charged everybody at a certain level and that then - the wealthier ones help offset the price of the poorer communities. It is working quite well but I must say there has been a fair amount of pressure on me and on previous ministers to re-evaluate our division. Like I said, I'm in the process of looking at that now, and maybe.... I found that a number of other provinces in Canada tried it and have now reverted to our system. They had our similar system, went to public with it, and now are reverting to a government type of system. They tried it in Alberta and it didn't work, and they reverted, and a number of other (inaudible).

So I don't know. I can't say for sure, I can't make a commitment to you. I can tell you this, that we are looking at it and hopefully we will be able to come up with some answer for you in the next six or eight months or something.

MR. FITZGERALD: The situation that arose in the last municipal election where a fire chief could not be part of a municipal council, I think that has been a thorn in the side of a lot of people out there today who are doing volunteer work. Many times it wasn't uncommon for the fire chief or fire department members to be part of municipal councils. Sometimes in the small rural areas there is only a small number of volunteers that you can draw from. Is your department looking at allowing that to change and to allow those people to also represent their community on their councils?

MR. REID: Mr. Chairman, I would think that I will have my act read probably in the fall. I've got a new municipal act coming forward which tightens up a lot of these loose ends. Yes, you are absolutely right, that will be addressed in that act. I totally agree with you. Our people agree with you as well. That by the time the next election rolls around that particular section of the act will be eliminated and people will be able to qualify.

MR. CHAIRMAN: Thank you, Mr. Minister.

Mr. Matthews.

MR. L. MATTHEWS: Thank you, Mr. Chairman. Newfoundland Labrador and Housing will come in a little later I guess, Mr. Minister.

MR. REID: Yes (inaudible).

MR. L. MATTHEWS: (Inaudible). On the question of the number of municipalities that are out there, incorporated town councils and local service districts, I've long held a view - I guess it is just a personal one - that for a population of 500,000 or 600,000 people we are grossly over-governed, not only at the municipal level but certainly at the school board level and probably even in this Chamber. I know during the last five years amalgamation was a process that was gone through in a lot of areas with mixed reviews, I guess, depending upon what part of the Province you lived in.

Is there any ongoing effort to bring about a further consolidation of municipalities where it is realistic and sensible to do, and I guess the second part of the same question is: what, if any, intentions or value do we see in regional government similar to what we have in a lot of the county governments I guess, and similar to what we have in a lot of other provinces, on the amalgamation issue first and then the regional government one?

MR. REID: I hate to hear that word, regional government because it is not, hopefully, it won't be as long as I am I suppose.

MR. L. MATTHEWS: It is not what?

MR. REID: Regional government, it is not regional government. We are hoping that we won't create another tier of government. I think you will agree with that we have enough government in Newfoundland now, certainly, and I like to refer to it and my department cringes when someone calls it a government as council; a regional council concept and they do have them in other provinces.

We have 289 incorporated communities in the Province and they are spread around, I think it is 5,600 miles of terrain when you go from one end of the Province to the other if you sail in every cove and go up the Labrador Coast. On top of that, we have 185 local service districts and, you are absolutely right, there is no way in this world that a province like Newfoundland and Labrador can cope with trying to provide services to all those particular communities, and especially today when you hear of cases like Catalina and St. Anthony and Bonavista and a number of places; Harbour Grace is a prime example, next door to me and where the backbone of the whole community has been destroyed because of the cod moratorium in this Province (inaudible).

How do they survive? I don't have an answer to that and I don't think there is anyone in this Province who has an answer. I would think that if people wanted to continue to live in Catalina and Bonavista, and Harbour Grace, Seldom and Fogo, then the people who are there are going to have to take more responsibility themselves as to how they are going to survive in the area in which they want to stay; and all of you know that it didn't start in 1989, it started in 1987. The government started to realize that there was less and less money available and the cost to provide services to municipalities, to help these cases and so on were rising and there was less money coming in and I suppose to a certain extent, we have had to face I suppose in the last five years like every other province in Canada.

The concept of regional council is basically to tie together an area of the Province, and, for everybody more or less, to be pitching together for their survival, for the survival of a given area, and I like to use my area for an example, Conception Bay North. You come off Roaches Line in Conception Bay North and you run into a place called South River, that's a town council; you go across the bridge and you are in Clarke's Beach, that's a town council. You go across another bridge and you are in North River and that's a town council, that is less than a mile of road, and I challenge anyone to tell me where the dividing lines are or where the boundary lines are because nobody can tell.

You go over the hill and you have Bay Roberts, I don't know where the boundary for Bay Roberts is because North River and Bay Roberts now I think, are intertwined. You pass along there by Shearstown and then you are in to Spaniard's Bay, and from Spaniard's Bay you are in to Tilting and from Tilting you are in Island Cove and from Island Cove you are in to Harbour Grace South and Riverhead and then from Harbour Grace you are in to Carbonear and then to Victoria and Salmon Cove.

Do you know that in that area we have sixteen fire trucks? I like to use that area as an area where maybe, if we can talk to Clarence Randell or whomever is minister after me, can go out and talk to these mayors and councils and let's come together and let's start purchasing our fuel for example, or gas for our vehicles, let's do it as a package, let's come together and do it. Let us operate one incinerator, and by the way, they are doing it my area; one incinerator takes care of all the waste and garbage in the area.

Let us look at forming a regional fire fighting service instead of having sixteen or twenty fire departments in that area, let's have four or five or maybe we can afford if we get together, to have a paid one. Let's go into Spaniard's Bay and Bay Roberts and see if there's some way that we can tie the water and sewerage system together, the types of things that a regional council would do.

There's one drawback with a regional council idea, and that's this: Whoever lives in that area should basically be paying the same tax. So if you're in an area where there's a local service district, a local service district doesn't pay taxes - no municipal taxes whatsoever - but they would have to be charged for the services that are being provided by the government, by the Department of Works, Services and Transportation.

I'm sorry to go on, but it's something that Hazel Newhook and I basically talked about back in the late seventies and early eighties. Hazel and I - I remember going to a meeting in Harbour Grace and she was the Minister of Municipal Affairs, and we talked to people out there about that concept, and that concept can work if people are willing to come together and try, for the area, for the betterment of the area, not for the betterment of Carbonear and Harbour Grace and Bay Roberts or St. John's or Mount Pearl, but for the area, and you know, Lloyd, there are lots of things we can do in this Avalon East area, the Northeast Avalon area.

The fire fighting problem that I've got to deal with right now in regard to the fire fighting services on (inaudible). There's a prime example. Bring them in, start work, I suppose, hoping that they will work together. There can be savings, then, for each municipality. The government doesn't want it back. We would rather see, if there are savings, let them spend the savings that are created in a given area.

I don't know if that answers your question or not.

MR. L. MATTHEWS: Well, it does. I guess my comment would be that probably the initiative for that type of thing, as in the past, rests with, or will have to come, or should come, from the government, from your department level to... I guess the kicker in it is how to positively encourage these communities to see the value of that type of council, and come on side in terms of their thinking so that they can come together and work out the mechanics of it. That is just a comment that I would commend any activity in that regard.

MR. REID: The parochial differences between some communities are unbelievable. I'm sure each one of you run into it, a catholic community, a protestant community, a community with no council, a community with a council.

MR. L. MATTHEWS: Doesn't it have to be, though, almost that the provincial government has to say: Look, this is the concept and this is the way it has to be. This is a direction for the future, and let's get on with it.

I suppose then it becomes perceived to be amalgamation, and that brings with it all of the problems that you're alluding to, starting with the church and ending up with whatever else.

Thank you, Mr. Minister. I have no further questions, Mr. Chairman.

MR. CHAIRMAN: Mr. Byrne.

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

You were hoping we could get through this this morning, Municipal and Provincial Affairs and Newfoundland and Labrador Housing. I think we can. I don't have a lot of questions, but I have a few general questions which I want to save for the end and specifics.

We are here to do the estimates, so that's what I'm going to jump right into. On page 277 of the Estimates for 1994, under the Executive and Support Services, the Minister's Office, you have the salaries there $181,100 budgeted for 1994 and you spent $261,000 which is $80,000 more. You had $189,000 budgeted for 1994-'95. Why the big difference?

MR. REID: Under salaries, $261,000 down to $189,000; is that what you're saying?

MR. J. BYRNE: From $181,000 up to $261,000 spent in 1993-'94. What you budgeted was $181,000.

MR. REID: Okay, it went up to $261,000 and I will tell you what happened there, Jack. Basically there were two ministers in one year, and we had a number of expenses for (inaudible), severance pay, for example, for some of his staff and that sort of thing. That's where the difference came from. So we're back down again now to our estimate.

MR. J. BYRNE: The $189,000 is still an increase, though, of $8,000 and with the cutbacks and freezes in salaries and stuff, why would that be increasing, from $181,000 up to $189,000?

AN HON. MEMBER: (Inaudible).

MR. REID: He's telling me that we reduced another activity in another section and increased that one. That would be based on -

AN HON. MEMBER: For temporary employment?

MR. REID: - coming from the minister's office. So it still hasn't changed the overall estimates. Do you know where we reduced the other one? Not off-hand?

AN HON. MEMBER: (Inaudible).

MR. REID: Under administrative salaries.

MR. J. BYRNE: The next section -

MR. REID: I don't know Ed, to be honest about it because I haven't got any extra staff over there. So I can't answer.

AN HON. MEMBER: Just in case you wanted extra staff.

MR. REID: Just in case I wanted to, well that's nice of you.

MR. J. BYRNE: No, what I was thinking was really if the salary of the minister would be increased by -

MR. REID: My salary?

MR. J. BYRNE: Yes.

MR. REID: Oh no, no my salary - no, no, no. There's no salary increases, no.

MR. J. BYRNE: That's what I was getting at, there shouldn't be according to the cuts, the freezes and so on.

MR. REID: No, no. I don't believe we received - off the record, we haven't received our 4 per cent back yet have we?

AN HON. MEMBER: No.

MR. J. BYRNE: No, I don't think so.

MR. REID: I haven't got mine.

MR. J. BYRNE: Under Transportation and Communications -

MR. REID: What's that?

AN HON. MEMBER: (Inaudible).

MR. REID: It was supposed to be over April 31 wasn't it?

MR. J. BYRNE: But anyway -

MR. REID: No, no, no, your salaries as ministers, that's set Jack, you can't change that. You can't change that in the department.

MR. J. BYRNE: Yes, but I was just thinking about the freeze was in for one year and you might have got it back - is it continued on or not, I don't know?

MR. REID: It's not there.

MR. J. BYRNE: But anyway, Transportation and Communications; an extra $10,000 spent there.

MR. REID: Transportation, what section is that under, Jack?

MR. J. BYRNE: The minister's office.

MR. REID: That's the same as it was budgeted for 1994.

MR. J. BYRNE: Oh yes but you budgeted $52,900 and you spent $62,900, $10,000 more spent then budgeted.

MR. REID: Yes, I suppose it was a question of -

MR. J. BYRNE: The reason why I'm bringing this up is because when I look at it, it's $52,900 budgeted, you spent $62,900 and then you're back to $52,900. So it had to be something out of the ordinary I would think.

MR. REID: Well yes and you're absolutely right, Jack, it's sort of difficult for me here to be able to illustrate to you the differences. $62,900 is a reflection of, number one; two ministers, number two; this year our conference was held in British Columbia, the ministerial conference and when you go to a ministerial conference - Clarence usually goes with me and one other person. Now Jack, when three people got to go and fly to Vancouver, it doesn't take very long to whack up $5,000 or $6,000 on flights.

MR. J. BYRNE: Yes, I know.

MR. REID: The year before that the conference was in Halifax so that may have something to do with it as well.

MR. J. BYRNE: But you would think that would -

MR. REID: You can see that I lowered, basically my estimates from the previous ministers, put it that way.

MR. J. BYRNE: Okay, the other thing was on the same section as purchased services -

MR. REID: Yes.

MR. J. BYRNE: - it went from $3,700 up to $10,500, what's that extra?

MR. REID: We were told basically to cut back as much as we could on purchased services. Now I can't explain the $10,500 one but Clarence can.

MR. RANDELL: Thank you. I thank, Mr. Minister. I should point out that the $3,400, there's a figure set -

MR. J. BYRNE: No, $3,700.

MR. RANDELL: $3,700 is set by Treasury Board. In no department in government, in the last thirty years that I've been involved, has it ever been lowered within those confines, it's never happened. The cost of purchase services here which includes; entertainment, it includes activities of the minister, will always range - in fact, even the figure shown there is still considerably lower than in other departments. You have to appreciate the fact that in Municipal and Provincial Affairs where the minister is dealing with 290 municipal councils and a lot of travel allowed that it is impossible to keep within that figure.

MR. J. BYRNE: Then to my mind if you had $3,700 budgeted for 1994-1995 and you spent $10,500, why didn't you budget $10,500 for this year?

MR. RANDELL: We would have sir but the option was not with us as to what would be budgeted.

MR. REID: I would say we will come back next year we will be up to $10,500 again Jack, chances are. That is Treasury Board, they set those figures.

MR. J. BYRNE: On page 278 under Administrative Support, Salaries. Quite an increase. You budgeted $574,900, you spend $549,700, which was $25,000 less, yet you have $614,700 budgeted for this year. Is the minister putting new staff in place - what is the story on that?

MR. RANDELL: The principal reason - if I may, Mr. Minister - for that is that we've added one additional position with the approval of Treasury Board. That is the Director of Systems and Methods, which is set at $43,296. That is a position as a result of the expansion of the database systems within the department.

MR. J. BYRNE: Under the same section, Employee Benefits there. You had $97,100 budgeted, you spent $50,500, and you have $97,100 budgeted again. Why such a decrease in that? It is almost a 50 per cent cut from what you had budgeted and what you actually spent.

MR. REID: Strictly Workers' Compensation, they tell me here. There was a decrease last year in my - you go ahead and answer that if you want to. It was Workers' Compensation?

MR. CROKE: Yes, that money there. That money is there to reimburse Workers' Compensation for expenses that they pay out on behalf of employees injured in the department. We had the $97,000 allocated but the expenses were reduced somewhat from that.

MR. J. BYRNE: So you are saying you had less injuries in the department?

MR. CROKE: There was less injury cost in the department.

MR. J. BYRNE: Very good. Under Purchased Services, again, in the same section. You had $445,400 budgeted and spent $369,000, and you have $395,400 budgeted for 1994-1995. What would those Purchased Services involve?

MR. REID: Clarence?

MR. RANDELL: I've lost -

MR. REID: Purchased Services on page 278.

MR. J. BYRNE: These questions I'm asking, these are the proper types of questions to be asked I suppose at this?

MR. REID: Oh yes, nothing wrong with it. Felix, can you tell us about the Purchased Services.

MR. CROKE: That block of money covers general advertising for the department, repairs to office equipment, rental of photocopiers, and it also allocates a block of funds for financial support to organizations to assist in the cost of receptions and dinners, I'm thinking about sporting organizations and that type, on regional and national events. The money is also there for leased accommodations for parts of departments which are outside Confederation Building.

MR. J. BYRNE: Could I ask for a breakdown of that? Actual details of what that money was spent on and get a copy?

MR. CROKE: It can be provided.

MR. J. BYRNE: Okay, could I have that?

MR. CROKE: Yes.

MR. J. BYRNE: Please. In due course.

The next one I have is Property, Furnishings and Equipment. There was $36,000 budgeted and you spent $53,000. You are back to $40,000 this year. There seems to be quite an override there, $17,000. That is the same page, page 278, under Administrative Support.

MR. REID: Basically it is the replacement of office furniture and office equipment in all divisions of our department. The original amount was $36,000, we went to $53,000 this past year, and we just brought it back to $40,000 this year. That is another question of being cut by Treasury Board, basically.

AN HON. MEMBER: Three photocopiers (inaudible).

MR. REID: Three photocopiers had to be replaced, yes.

MR. J. BYRNE: That had not been budgeted for.

MR. REID: That is right.

MR. J. BYRNE: Page 279, under Administration, 2.1.01.01, Salaries. Twenty-three thousand dollars budgeted more this year than you actually - budgeted $321,700, spent $339,500, and you budgeted $344,200. That is another $18,000 over budget. There must have been some - was that temporary staff or an extra employee or whatever? How come if you are budgeting that the temporary staff wouldn't be included in the original budget? What was budgeted?

MR. REID: I'm sorry?

MR. J. BYRNE: If you had $321,700 budgeted for the year for Salaries, and it increased - and it has happened in a number of occasions - and it has gone up to $339,500, and you say it is for temporary staff, but wouldn't you be budgeting for temporary staff when you put your budget together?

MR. RANDELL: If I may, Mr. Chairman. What you are finding is that we have a total salary allocation within the department.

MR. J. BYRNE: Okay, so you are juggling it around.

MR. RANDELL: You are set figures by Treasury Board and you are asked to confine your total expenditure in salary estimates to that total figure. What you will find here is that where you will see minor increases in some salary estimates because of the identification of additional temporary staff required, other sections will be reduced -

MR. J. BYRNE: Be dropped.

MR. RANDELL: - to stay within that balance. You will find that occurring right throughout the estimates.

MR. J. BYRNE: Under Assessment Services, 2.1.02. You were asked by Roger with respect to going out and having the towns hire their own assessors type of thing. I was mayor for seven years and I always thought that may be a good idea but maybe not. My biggest problem with assessments is delays. You take Logy Bay - Middle Cove - Outer Cove. It was incorporated eight years ago and we haven't had a reassessment done in eight years. They've been after it for the past three years. It is not likely they are going to get it this year. That directly affects of course the amount of revenue that they will get according to the mil rate. When do you really and actually foresee that there will be a real improvement, that they will be happening every four or five years or whatever the case may be? I've been hearing it now for eight years.

MR. REID: You will see an increase in our - as you've said - assessment in regards to Salaries -

MR. J. BYRNE: Yes (inaudible).

MR. REID: - but basically you are absolutely right. We are hiring - approval has been given in this budget for eight new positions: Four new municipal assessors and three file clerks with data entry operators. We are going to have at least four new assessors working with us - well, hopefully when we can get this passed through the House and so on. Yes, there will be an increase in our assessment staff, and I was pleased to really get that. Because when they give us extra money in my department for assessors, to actually hire new people, that is a step as far as I'm concerned in the right direction. So you will definitely see a change this year. Hopefully we will be able to pick up a tremendous amount of that type of thing in the next couple of years.

MR. RANDELL: If I may, Mr. Minister. In actual fact the file servers are more critical to us than even the assessors because that was part of our problem, getting the data down loaded onto the (inaudible).

MR. REID: For that computer system I talked about earlier. So it looks good, Jack. I'm hoping that within a two-year period we will have everything on file and be able to just click it off on the computer. People won't have to wait.

MR. J. BYRNE: There is the other point too, just with respect to the assessments. Because if the towns wait so long and then they get a new assessment done, there has been such a time span, people are hit with these big increases, it is a real shock to them. You know that anyway.

MR. CHAIRMAN: (Inaudible).

MR. WHELAN: Mr. Minister, I have a question with regard to regional garbage disposal. Over the past two years there has been, in the particular area that I'm involved with, a study done. I believe it is called the northeast Avalon garbage disposal study, or something like that. There was a study done and a report drawn up, I understand. What is the status on that now? Has there been any decision made as to the route that is going to be followed? I think there are a number of proposals and a number of options that have been proposed during that time. Has there been any concrete decision made as to which route you are going to go? What would be the status on that report up to this point?

MR. CHAIRMAN: Mr. Randell.

MR. RANDELL: We have not as yet received the final report. We have received a draft report from the consultants and as you are aware the consultants also involved a major firm in that area from the province of New Brunswick working with one of our local firms. We would anticipate that the final report should be available to us by mid June, and I would visualize that at that point in time recommendations would flow then from the technical committee to the minister for appropriate action.

MR. WHELAN: Okay, the next question I am going to ask is one I am asked every day, what is the status on the infrastructure program? When will the announcements be made?

MR. REID: To be quite honest about it I thought I would be able to announce it on Monday past. In fact I spoke to Mr. Tobin, because the federal people are involved in this as well. We did up our proposals and sent them to Ottawa for them to look at as well. I thought I would hear from them by now. In fact I am hoping to get a call from the federal representatives today to tell me to proceed.

I did announce in the House last week that what we planned to do immediately is do these emergency ones. We are going to announce them almost immediately because we have to get some work done. An example of one, and I will tell you what I am talking about with regards to emergency, the sewerage problem we have in Deer Lake, for example. We have to create a lagoon out there. It is a sizable amount of money. It is a big contract and will probably take two years to do, so we are hoping to be able to announce that one. Where there are environmental and health concerns we are going to announce a number of those.

The second batch, or the second amount, we should have ready early next week to send off to our federal counterparts, and hopefully within a week we will hear back. I am striving so that we will have it all announced by the end of the month, everything announced, every cent of spending this year. Within the next two or three weeks you will hear announcements, and I guess I will be questioned in the House and ridiculed for not giving certain people money, and giving more to others and so on, but that is part of the process. I think that within the next few days you will hear the first announcement and then within a week you will hear a second announcement.

MR. WHELAN: Just one more question. Within the fire protection aspect of your department, are there any emergency funds set aside in case a motor goes, or in case there is a pump that gives out in a municipality? Apart for the regular allocations that councils apply for from year to year are there an emergency funds set aside as well?

MR. REID: The answer is, no, basically. We do not have a backup fund to be able to take care of that sort of thing, but in the past we found, and especially if it were in a municipality, that there are other ways we can assist the municipality with regards to a pump, emergency assistance, or permission to borrow. There are all kinds of ways of doing it but there is no such thing as a fund set aside for that type of thing.

We go through $1 million of regional fire fighting equipment and so on. We give that out and then when that is gone basically that's it. That is all that is in that amount.

MR. WHELAN: Thank you. That's it.

MR. CHAIRMAN: Thank you, Mr. Whelan.

Mr. Fitzgerald.

MR. FITZGERALD: Thank you, Mr. Chairman.

Mr. Minister, I would like to refer back to the figure that was mentioned by my friend for St. John's East Extern regarding the minister's office where it shows something like $80,700 from the 1993-94 Budget up to the revised. It went from $181,000 to $261,00 and I thought you indicated there were two ministers and that was probably part of severance pay. Is that not a lot of money to be paid out in severance pay? Considering the other minister was only here for one term. We certainly don't put forward those kind of severance packages, do we?

MR. REID: Well, my notes here - and I'll read them to you, if you don't mind, Mr. Chairman - this provides for salaries of the minister, special assistant, administrative assistant, two secretaries, a temporary position of enquiries officer, minister's car allowance, increase in the 1993-'94 revised budget results from payment of severance, and other salary benefits incurred when the change to the ministry occurred, and the minister's office staff during the fiscal year. So there is severance. I doubt very much if it's that much severance. Clarence, do you have a comment on that or maybe Felix?

MR. CROKE: The outgoing MHAs, under the present system, stay on the payroll for, I think, a certain number of months before they are actually taken off the payroll.

AN HON. MEMBER: (Inaudible).

MR. FITZGERALD: This all new to me, because I was told, when I got into this profession, that as of election day you either have a pay cheque or you haven't; you're on your own. So it's all news to me that somebody would get -

MR. CROKE: (Inaudible) on the payroll and then you've got three months after the election day.

MR. FITZGERALD: So is that just for Cabinet ministers?

MR. CROKE: It's for MHAs.

AN HON. MEMBER: And their staff.

MR. CROKE: Plus Cabinet ministers, yes.

MR. FITZGERALD: So are you saying that if an election was called tomorrow and one of us was defeated that we would draw a pay cheque for three months following that?

MR. CROKE: At least the Cabinet ministers.

MR. FITZGERALD: So is it just for Cabinet ministers or for all elected members?

MR. CROKE: Well, I'm not sure about the MHAs, but at least for Cabinet ministers. They are paid in departments, whereas MHAs are paid through the House of Assembly, so we wouldn't -

MR. REID: I didn't know that either.

MR. FITZGERALD: The other part of that is, when the minister changes from his department, wouldn't it only be the minister and his executive assistant who would change? The secretaries don't change.

MR. REID: Oh, yes, they do.

MR. FITZGERALD: They do? But it's just the minister's one secretary, I would assume. It wouldn't be a total change in the office of the Minister of Municipal Affairs. The staff stays, the deputy minister stays, the ADMs stay, the secretaries stay. It would only be the minister -

MR. REID: The executive assistant.

MR. FITZGERALD: His executive assistant.

MR. REID: And, in my case, I have an assistant over in Newfoundland and Labrador Housing; what's his name?

AN HON. MEMBER: Don O'Keefe.

MR. REID: Don O'Keefe. He's been there now since - Eric Gullage, I believe, hired him back some years ago. He's under my staff as well. He's under my estimates as well. He does all of my political work and my ministerial work through the Housing Corporation. He's over there in the Housing Corporation even though we're paying through Municipal and Provincial Affairs. So he's sort of an assistant as well. He handles all the things that come in to me as a minister, like enquiries from MHAs, that sort of stuff.

MR. FITZGERALD: I realize some of those figures are probably coming not as a surprise, but it's kind of hard to put your hand right on the answer. Would it be possible to get a breakdown of that figure, that $80,700, to be available to the committee? Is that possible?

MR. REID: Yes, sure, I will provide that.

MR. FITZGERALD: I would appreciate that.

MR. REID: I'm not getting any extra out of it; I can tell you that much. If it's going, it's going to someone else.

MR. FITZGERALD: Sometimes when you get involved in a job you would like to know what benefits are there and what's available for you or anybody else. Sometimes you're questioned about those things, and it's nice to have the answers.

At one time any unincorporated town could always access a decent water supply if they had a committee formed, and I think it was five at that particular time, five people, who would form a committee and seek government funding to put in an artesian well for a community water supply. Some of those have worked very, very well in some of our smaller communities to provide a decent source of water and now that's not available any more. I wonder if the minister is thinking about having such a program re-instated, it is a wonderful program for rural Newfoundland and it was always the situation if I recall correctly, that once the well was dug and the pump was put in place in the house, that it looked after itself after that because most little communities charged a fee and government never had to go back there any more; it was a very, very valuable service. Now I think you have to be a local service district or a community council in order to access that particular service.

MR. REID: That funding is still available. That goes back-

MR. RANDELL: That change came about as far back as 1979-1980. The problem with it was, that under the old, what they called water supply committees, I think that is the one you are referencing, the old water supply committees were nothing other than that; they were ad hoc committees. What was happening in many cases, not in all cases I agree, but in many cases, once the well was dug and the lines were put in place, the water supply committee had no legal existence and generally they fell apart and disappeared and the systems tended to fall down around people's ears. In fact, in a number of instances, individuals claimed they owned the wells and there was litigation in the courts over it and everything else.

Another problem that they experienced because of the fact that they weren't a legal entity, is they had no legal means to collect the rates that they were imposing on the people using the system, so as a result of that, the creation of the local service district committee, under the legislation, under the Municipalities Act, created of course a legal entity which could be held accountable for what was done and of course it had the legal mechanism to collect any water rates owed to them.

MR. REID: With that, the amount for years and years and years for those newly formed local service districts that Clarence was talking about was $500,000. It was through lobbying by myself and Percy Barrett, I believe, and a few others back in, I guess it was '89 or '90, that the government doubled that to a million dollars. That's up to a million dollars today. But I know what you are talking about because I have similar communities and committees in my district and there is absolutely nothing within the act and nothing within government that can accommodate them at all.

MR. FITZGERALD: No doubt you have much greater knowledge about the process than I have, dealing with the overall Province, but some of those have worked really, really well, a lot of them, I know. In one little area in my district they have a big bank account built up and they can buy a pump or they can add other people on because everybody realizes the value of it and the committee have no problem collecting the money and maintaining the water supply and it works very well.

MR. REID: Let me say to you that that's the exception though. There are a lot of good committees out there but for every good one, there are ten bad ones.

MR. FITZGERALD: The municipal grants to which you referred, that you had brought back in again, the small grants for ball fields and what have you; does that fall under the Municipal Infrastructure Program, and the communities that would be able to apply for those grants, would their ability to pay back Newfoundland and Labrador Municipal Financing, if they are in arrears, would that be looked at as far as being eligible for that program?

MR. REID: No. That's totally free money to municipalities, to recreation groups, to almost anybody in the Province who can show us a need. We don't want to go above that $20,000; in fact I am hoping they are going to be $2,000, $3,000, $4,000, $7,000 rather than $20,000 because if they all go into $20,000 it is going to reduce it. It is basically free money that I am going to be able to provide to MHAs and municipalities around the Province and they will be ranked based on their regional sports and recreation people, because we have recreation people around the Province.

Applications will go out, I think most by now have gone out. There's a letter that went out to all municipalities, local service districts and anybody interested. So no, that's got nothing to do with NMFC. It's just free money and if you got somebody in your district; a ball team, a recreation commission, a senior citizens group or almost anybody, ask them to go to the regional office, pick up an application and get it in. We're there to help you.

MR. FITZGERALD: So this will go through - like in our area, Clayton Walsh down in Burin - go through the regional office rather than the municipal affairs office in St. John's?

MR. REID: Yes.

MR. FITZGERALD: Mr. Minister - I fail to understand this one, maybe you can enlighten me on it - sometimes when you award funding to a municipality, it's written up in a proper form and at the end - the amount of money is shown in the beginning - at the end, as it states quite clearly, this is not an approval to borrow. Why wouldn't it be an approval to borrow or why shouldn't the municipality, once they're awarded funding, be able to take that then and go right to the bank and arrange borrowing after it comes from your department? Why would they have to come back seeking further approval to borrow?

MR. RANDELL: The reason that is contained in the letter is purely to point out to councils that the letter itself is not an approval to borrow. The approvals to borrow are issued automatically as the work progresses and the monies are required to be drawn down. What has happened in the past is that people have taken those letters, before that reference was there, to the bank and the banks have lent them the money up front. So effectively what had happened - let's use an illustration, community X have received approval for $500,000 for a phase of water and sewer, say on May 1, 1994. They rush off to the bank with the letter, borrow the $500,000 on May 1, 1994 but they don't even actually start work until after the design work and so on is completed. The work may not start until September and may not be completed until September of the following year. So they've drawn down all this money at the bank, paying interest at the bank really for no good purpose.

AN HON. MEMBER: Great for the banks.

MR. RANDELL: Great for the banks, but terrible for the councils and us.

MR. FITZGERALD: Thank you.

Another situation where I fail to understand the reasoning behind it, maybe you can explain it, is the situation, if I have a water and sewer project and the government puts forward $400,000 for a new water and sewer project that's applied for, the bids come in at $200,000. There's $200,000 left, and that creates a lot of problems out there in some of our communities, knowing that there's $200,000 left on the table, and they feel that it's their money and they feel that they should use it.

Number one is - I think I talked with the minister about this before and we fully agree, and I don't know if he's going to tie this into his proposal that he will bring forward now - are you looking at putting forward the approval to do work rather than the amount of money?

Number two, it's a situation where sometimes government will allow the contract to continue if it's on the main road, or in the same direction that the water and sewer is progressing.

In my district, in the community of Little Catalina, we had just reached the biggest problem in the community, the biggest problem that they had with water and sewer. In fact, it got to the point where those half-a-dozen houses right now are not using their indoor plumbing, can't use it, because it's coming up through the ground. It would have cost, I think government had an estimate back of about $28,000 to service this problem area, and because it was on a byroad, it was still a continuation, it was a matter of going off on a branch versus going straight, government would not allow them to spend $28,000 of probably $70,000 or $80,000 of money that was left over. What's the reason for that?

MR. REID: The reason for that is this. What we do with each project as they come in, they're passed to a committee made up of representatives of the Department of Health, the Department of Environment and Lands, and ourselves. We sit down and rank every project.

Hypothetically, in your situation, the project in Bonavista, was it?

MR. FITZGERALD: Little Catalina.

MR. REID: Catalina.

MR. FITZGERALD: The one that I'm referring to, because that's the one that stands out in my mind.

MR. REID: The first section that they applied for probably ranked at eighty-seven. They also applied for that twenty-seven, or whatever it was, which was a byroad. I know that one in particular ranked much lower than eighty-seven. Up the road, in another community, there was a project that ranked eighty-six. Now, I ask you, who do you give that extra money to that we've got left over because the contract came in lower? Do we give it to the community up the road that ranked eighty-six, or do we continue doing work in that community that ranked much lower than eighty-six?

I contend that if we're using a ranking system, and if there's money left over, like you said, it should go in turn to the people who rank, because if you don't do that then there's no purpose of a ranking system - no purpose having a ranking system there.

So you're absolutely right, but if there's $200,000 left over from a project in Catalina and the next project that Catalina has only ranks sixty, and there's a project in Carbonear that ranks eighty, that $200,000 is taken from Catalina and given to Carbonear, and that's basically how we operate, and that's how we're going to operate under the infrastructure program as well, exactly the same way.

MR. FITZGERALD: But it didn't seem to be a problem with ranking if it was on the main street, if it was a continuation -

MR. REID: No, no.

MR. FITZGERALD: That's the question that's continually asked. When I called, that was the first question put forward. Is it a continuation or is it a branch? If it's a continuation, there's no problem. If it's a branch, you'll have to come back and we will ...

MR. REID: It's based on ranking. If it's a continuation, if you're going down through Water Street in Bonavista and you're stopping half-way down through, and next year, then, you apply for the next section, chances are it's going to rank the same as last year's, if it's a continuation of a project.

If you're going off to a side street it's ranked entirely different, going off on another street. In that particular case, that side street that you were talking about, ranked much lower than the job that you had on the main street, Catalina. It has to do with ranking, nothing else. It has nothing to do with what you're saying. It's ranking, and ranking only. It's got to be.

If that side road ranked the same as the main road, chances are we will give permission to go over and spend your $27,000 or $28,000 or whatever you were looking for. I don't know who is telling you any different than that. I'm hoping that no one -

MR. FITZGERALD: That was my understanding. It could have been continued if it was on the same road that the water and sewer had stopped.

MR. REID: It would have been if it was ranked, yes. If it was on the same road, yes. If the money was left over and it was ranked there would have been no problems with continuing on. There is something else involved here too, it is the continuation of the contract. That is under the public tendering act, right? If you are going along a road and you have an open ditch and you come to the government and ask the government for a continuation because you've got so much money left over, under the public tendering act if they are there on the spot and they are doing the work and it is only a continuation of that contract there is no problem with that. Up to a certain limit, $100,000 or something.

But now, if you are looking at going off that project, if it is not a continuation and it is something new, then the public tendering act won't allow you to do that. There are a number of questions there that have to be raised. You are absolutely right, if it is a continuation of the project there is no problem.

MR. FITZGERALD: How about the announcement of money? Are you looking at announcing the projects rather than money?

MR. REID: I can't do it under infrastructure. We are looking at next year's - under next year's - when we get back I suppose eventually to the capital works program, I'm hoping that is the way we are going to do it, yes.

MR. FITZGERALD: It would certainly do away with a lot of confusion and a lot of phone calls and trips to your office, I would think.

MR. REID: Pardon me? I'm sorry.

MR. FITZGERALD: I said it probably would do away with a lot of phone calls and trips and visits to your office if you announced it as projects rather than money, I would think, because everybody seems to think if the money is announced that it is there.

MR. REID: Under the infrastructure program now I think they are going to get it all anyway, aren't they? There won't be any slippage on the infrastructure, no. The way we are doing the infrastructure program there is no slippage. Whatever the contract costs then the municipalities will get that amount of money and that is the extent of it.

MR. FITZGERALD: Thank you.

MR. CHAIRMAN: Thank you, minister.

Mr. Noel.

MR. NOEL: No, I have nothing, thank you.

MR. CHAIRMAN: Okay.

MR. NOEL: Oh, there is just one thing I would like to ask. I'm not sure if when I was away this was answered. The regional services board. In the St. John's area. What is going on with that? What is the latest?

MR. REID: We are not involved in that.

AN HON. MEMBER: Fire fighting.

MR. REID: Oh, fire fighting regional services? Yes. There is a Cabinet committee in place that has been meeting almost on a regular basis now I suppose for the past year. I've met every council individually and I've met every council and mayor collectively. In the last meeting that I had with them I basically made a number of proposals to them that some of them were pleased with, some weren't. I asked them basically to go back and try to work out a system on their own, where there are some new councillors and a change of council in St. John's and so on.

I thought that there was room for negotiations. They are meeting now on their own and hopefully within the next week I'm going to call them back in. I will be quite honest and say this, Walter. Sooner or later this problem has to be resolved. This has been on the board for the last two years and -

MR. NOEL: That is the point I was making.

MR. REID: Pardon me?

MR. NOEL: That is the point I would make. This has dragged out a hell of a long time.

MR. REID: Yes. This is a last-ditch effort right now on my part to try. Basically the comment I made to them was: Did they want me as the minister to come in and impose unilaterally a decision? Most of them agreed that they would go back and have one last kick at the cat. If that doesn't happen, if they can't get an agreement within the next couple of weeks, then I will be willing to recommend to my Cabinet colleagues a formula and ask for that formula to be introduced and then they will have no other choice. They will have to accept what I'm offering. But I've been trying to be as cooperative as I possibly can with them.

We've suggested changes to the make-up of the board to make it fair, we've suggested a better system, we've suggested that maybe the government could pick up some funding for the 911 service in St. John's, which would offset some of their costs. There were a number of proposals we made. Some of them were almost agreed upon immediately. But there were a couple of other contentious ones and.... You will have an answer on that, sir, before the end of the month.

MR. NOEL: Are you content with how municipal government has worked out in the St. John's region as a result of the changes a few years ago? Have you given any consideration to looking at that again?

MR. REID: Do you want my personal opinion or the opinion of the department?

MR. NOEL: Both.

MR. REID: My personal opinion is that we have a conglomeration of communities on this northeast Avalon who are using the services of the larger city of St. John's and not paying nearly the amount of tax for the services that are being provided. Even though some of them are living outside of St. John's, in the vast majority of cases they're using the St. John's services and that's just one case in particular with the regional fire services. There will be other cases I'm sure come forward.

We have one town, I'm not at liberty to tell which one it is, but we have one town right now that's in pretty strong financial difficulty and maybe they shouldn't be a town. Maybe they should be part of the City of St. John's and be taken under the wing of the City of St. John's. I personally think they'd find things a lot better.

There's no plans to further amalgamate at the present time but I have to be honest and say to you that I haven't just forgotten about the idea. In fact, in my office is a map of the northeast Avalon and I can't in all sincerity say to you that in my time as minister there will never be an amalgamation of some communities in the northeast because I can't. Personally speaking, it should have been done years ago. Now I've gone to far, even in saying that but -

MR. NOEL: Have you gone to far on your own part or on the departments part?

MR. REID: I've gone to far on my own part. The government has no intention, at this particular point in time, of pursuing any further the amalgamation question on the northeast Avalon, at this particular time, but when problems arise like the northeast Avalon fire fighting service, that question arises with it. Maybe the answer to it would be to do it that way but in regards to government itself making any plans to amalgamate any further on these towns, it's not happening, not right now.

MR. NOEL: I think you should look at it a bit more actively because I think serious changes have to be made in the way the municipal government operates in this region. I think the changes that were made have not done the job and as you say, there are lots of inequities in the tax levels of people in communities around St. John's compared to people within the city. My constituents are not happy with that. Could your department provide me with a list of tax levels, mil rates and that, in this region?

MR. REID: No problem.

MR. NOEL: Thank you.

MR. REID: You'll find some drastic differences too.

MR. CHAIRMAN: Thank you Mr. Noel, thank you Mr. Minister. Mr. Byrne.

MR. J. BYRNE: Thank you, Mr. Chairman. With respect to the regional fire services, I was going to bring that up myself to try and find out the story of the situation at this point in time. I've been talking to a couple of the towns myself on this and of course we always had a problem down there with the board make up and that's going to be addressed. The formula that you're talking about now is, I think there was a 10 per cent decrease if you don't have certain services and 10 per cent more if you have none, no water and sewer type of thing. So it would be a 20 per cent decrease.

Take the Town of Logy Bay for example, the government causes problems themselves by requiring in the legislation that certain towns be involved in the regional fire board and not all towns. So if you take a town like Logy Bay-Middle Cove-Outer Cove that went from $30,000 up to $130,000 a year - and if they have a fire in that town, the house burns to the ground, there's no ifs, ands or buts about it. In the past seven or eight years, since I've been down there, we've had three fires and the three houses burned down to the ground. The example was made that we're not getting the same services and all kinds of reasons. I made a presentation to the regional fire committee when I was mayor down there and they scoffed at me. It wasn't even looked at and that's the reason why the problems arose in the first place but if you're going to enforce a formula, that is if you take a small town like Logy Bay-Middle Cove-Outer Cove, they're going to end up paying $100,000 a year for fire fighting services.

That is more than any other small town around on the northeast Avalon or up the Southern Shore from Holyrood Cross over to Witless Bay, and even more than the town of Torbay and Pouch Cove which have their own departments. The town of Logy Bay - Middle Cove - Outer Cove is going to end up paying more than those people are paying per year, and know if a house catches fire the house will burn to the ground - that is a serious consideration. I think you should give some serious consideration to that when you are talking about putting a formula in place.

That town in particular now is getting I think something like $50,000 or $60,000 a year in grants from Municipal and Provincial Affairs, or from the government. That is the total amount of money they are getting, cut back 60 per cent, 70 percent in the past five years, and they are going to end up paying $100,000. It has been a major problem, it has been a sore situation with me since it was first brought in with respect to legislation. Maybe the government should look at excluding that town from the regional fire service and let them go with Torbay. Maybe Torbay and that town can get together. If they have to pay out $100,000 a year they could hire their own people down there and have some permanent, at least during the day, employees in the region.

The situation now where we have four or five towns in the northeast Avalon and the two cities, a regional fire service - it is not, it is a farce, as far as I'm concerned, the whole situation. It is again due to the amalgamation process and the poor thought, poor planning, the whole thing that went into that from the beginning. Anyway, enough said on that.

Back to the estimates. Page 281, Urban and Rural Planning. The salaries were cut by more than half. You mentioned earlier, that you were going to lay off something like fourteen people I think you told me in the House. So they are re-instated and there is no worry about those jobs in the next year or two. I mean, it is -

MR. REID: I can't go that far. There is no worry about those jobs this year. I can't say what is going to happen next year to them. Or anybody in my department, for that matter.

MR. J. BYRNE: No.

MR. REID: Me included, or him for that matter. I can't say. For this year, no, they are re-instated now, they are back to work, and there is no problem at this point in time.

MR. J. BYRNE: So basically was the department coming from the train of thought that this would be a good area to privatize again, to send it out to private industry and let private industry take care of it, and down load it to the municipalities as they have been doing?

MR. REID: I was asked to do a report on that particular aspect of my department. I didn't have the report done. It just happened that on the day that my estimates were being done by Treasury Board they assumed that the report that I was going to come back with was a report similar to a report that they had done some years prior. When I came back and I proved to Treasury Board and to my colleagues in Cabinet that: Here is the case, here is what it would cost towns if we don't do this. It would disrupt planning in the area. Please give me at least some time to go back and study this further and make a further presentation. At that point in time Treasury Board agreed and the Cabinet agreed that that amount of money would be put back into my estimates. Of course, everything was printed prior, before I had a chance to do that, so it doesn't reflect that in the estimate. They are all back to work and they will be there for a year at least.

MR. J. BYRNE: With respect to the study done on the northeast Avalon with respect to the solid waste disposal. I was under the impression, because I was chairman of northeast Avalon towns when that came forward and they asked the northeast Avalon towns to sponsor that or be involved with it. I thought today was that there would be a report made to a certain extent, but before the final report was made with respect to the locations for the dumps or incinerators, or whatever the case may be, there would be a lot of public input, they would be having public hearings, and then before they make the final report all that would be done. Is that the point? Because I was getting the impression the report was coming in mid-June and there have been no public hearings yet.

MR. REID: No, we are. You are absolutely right. That is the route we are taking. That is the route we are going to take. We are going to go to public hearings and get as much input into it as we possibly can.

MR. J. BYRNE: So a final report can't be in June. I was expecting a report the fall.

MR. REID: The final report isn't in yet, we have another month yet. When we get the final report in then we will take it and go on the road with it and we will get as much input into it as we possibly can.

MR. J. BYRNE: But is the final report going to be making these recommendations before they have public hearings? Or would they have the public hearings first and then make the recommendations?

MR. REID: Public hearings first.

AN HON. MEMBER: (Inaudible).

MR. REID: No, the report will come after the public hearings.

MR. J. BYRNE: What is coming in June?

MR. RANDELL: I do not see why the hearings will be delayed until the fall. My understanding is they were going to try and have these completed before the end of June.

MR. J. BYRNE: That quickly? Okay.

On Page 282 under Administration and Planning, Section 5, Professional Services. You had budgeted $105,000, spent $105,000 and yet you have $25,000 budgeted for 1994-95. That is an $80,000 cut. What are those services and why such a cut?

MR. CROKE: In the 1993-94 Budget there was an $80,000 contract to complete the Waterford-Kenmount sewer study. That has been completed now and the funds are not required in the 1994-95 year.

MR. J. BYRNE: Thank you.

On Page 283, Section 2.3.04, Waste Management Facilities, you have Professional Services $50,000 budgeted, you spent $85,000, and you budgeted for 1994-95, $50,000 again. Why the increase of $35,000? On Page 283, Section 2.3.04, Waste Management Facilities, Professional Services. What are the professional services and why an increase of $35,000?

MR. REID: Where is the increase? I do not see an increase of $35,000.

MR. J. BYRNE: Professional Services. You budgeted $50,000 and you spent $85,000.

MR. REID: The increase in the 1993-94 revised Budget results from the approval of a number of studies into regional disposal facilities which will serve several communities, and these studies had to be funded 100 per cent by government. There were a number of studies that needed to be done around the Province so all we did was ask for the extra money, $35,000. There was the one on the Burin Peninsula, the one in Harbour Grace, one down in Summerford- New World Island, in that area - oh, I cannot remember, there were just a number of studies, $10,000 type things.

MR. J. BYRNE: I want to ask a few more questions. I am trying to get through my time.

MR. CHAIRMAN: Actually, you are over time, Mr. Byrne, but we are going to let you go on.

MR. J. BYRNE: Is that right?

On Page 284 under water and sewer servicing - coastal Labrador. Under Sections 5 and 6 you have Professional Services and Purchased Services. You had $178,000 budgeted, you spent $524,000, and you almost have that doubled for 1994-95. Then under Purchased Services you had $2,860,000 budgeted, you spent just over $2 million and yet you have that doubled for 1994-95.

MR. REID: That is basically because the Labrador agreement ran out last year, the Labrador native agreement ran out last year and there was no money being spent last year, or not that much money being spent this year. There is a new agreement in place. It is going to be announced, I think, hopefully on Friday, and we will need that extra money to be able to accommodate the new agreement that the feds are bringing in place.

You know about the Labrador native agreement? Are you familiar with that? That is basically federal government money that we administer, 70/30. This year there will be a lot of money spent on Labrador so we need that extra money to cope with that. Last year the agreement was out and we hardly spent any up there at all.

MR. J. BYRNE: On Page 286, Municipal Councils. You have grants and subsidies. You budgeted $287,000, you spent $291,000 and this year you have $685,000 budgeted. Well, that is double. Why such an increase in that? That is Page 286 under Section 3.2.05, municipal councils, grants and subsidies.

MR. REID: There were four stadiums. (Inaudible) towards debt charges and certain other expenses including the activity and provision and payment of the provincial share of the financial cost of facilities provided under regional recreation facilities. Those regional recreation facilities were, Bonavista North, the Connaigre Peninsula and Port au Choix, $162,700 for Bonavista and the Connaigre and $82,700 for Port de Choix and they were opened last year. They were opened last year and that's our portion which we have to start paying this year.

MR. J. BYRNE: So it is doubled for this year, $685,000?

MR. REID: Yes.

MR. J. BYRNE: While I am on that you talk about regional facilities and this has been a problem that I have been having for a long, long while; we almost had them a few years ago, but down in the northeast Avalon, when you take Logy Bay, New Cove, Outer Cove, Torbay, Flatrock, Pouch Cove, Bauline, all those areas, there is not a stadium down there and with the minor hockey and the hockey in the area, if those five towns came together to make a presentation to get a facility down there, say for the next year, under the Canada/Newfoundland Infrastructure Program, what kind of priority would be given to something from that perspective of coming together rather than just an individual town?

MR. REID: I can't say how much priority they would be given, member, but the first thing you would have to do is, get a number of towns to come together and sign an agreement because the government has a policy they will not fund anything unless it's regional. The formula then would be 80/20. Now if you are talking under the infrastructure program, knock off one-third and then it is 80/20 of the rest, so it is a great time to do it, and if you are going to do it, now is a good time to do it.

AN HON. MEMBER: Up to $1.5.

MR. REID: Up to $1.5 million. I can't say what priority they would have.

MR. J. BYRNE: No, no, I am not asking would they have to do it like that, do they have priority over, say, Bonavista somewhere but, from the perspective of a regional five towns coming together versus one single town.

MR. REID: Oh definitely, oh yes, definitely. That's government policy anyway; they would certainly have priority over that, yes, sure, definitely.

MR. J. BYRNE: Okay. The next one I have to question you on is on page 288. You have the Canada-Newfoundland Infrastructure Program, and I am not quite clear what happened here. The government each year had so much money that they put into the municipalities, $40-odd million I think it was for capital works and that type of stuff. Did the provincial government this year, take the federal government, the Canada infrastructure money, and not put in their own into that program? What is actually going on there?

MR. REID: Well, let me just answer it, going back to what you said first. Every year the government put so much in capital works, okay? If you go back to - and I am not being facetious and I am being honest with you, you can go and check it out, go back to '85, the previous government, you saw them run from $20, 25, 27, 28, 20 million, any given year the capital work budget can change by as much as $20 million. In the past three years, this government has been holding it around the $46, 44 million range, for capital works. I was, and to be quite honest about it, I was told early in the year that our capital works budget in Municipal and Provincial Affairs will have to be drastically cut this year because of the amount of money that we have been financing through Newfoundland Financial Corporation and so on.

If we did not have the infrastructure program this year, I would say that we would have been lucky if we had gotten $25 million. Now that would have been a drop of about $20 million and if you look at John Effort's estimates, you will see the same thing happened to him; you know, exactly the same thing happened to him, he lost so much money this year in capital because of the economic situation in the Province so, let's say that I would have been lucky enough to get $25 million for capital works and then the infrastructure program was announced; what we did with the infrastructure program, it came out first of all on a one-third, one-third basis.

MR. J. BYRNE: Yes.

MR. REID: I had a really serious problem with that one-third, one-third, one-third because you have communities in your district for example that couldn't afford one-third and can't afford one-third. You certainly have them Roger, and I have them in mine. There is no way, if they wanted $100,000 towards a project, they would have to come up with $33,000. Now when you think of some of them looking for $1 million and $2 million, they just couldn't afford to do it.

I went back to Cabinet and I said: look, let's take the infrastructure program and use it on the same criteria and the same basis as we use our capital works, and that basically means that a large number of communities won't have to pay a cent because they are up to the $328 per household for taxes and that sort of thing and it would also mean that the City of St. John's for example, and Corner Brook, the wealthier ones would have to pay the whole shot with the exception of the one-third from the feds.

To shorten this up, you are asking me basically: Are we doing a capital works project this year? In our estimates right now in our department, we are estimating right now that the provincial government could be as high as $60 million. That will be our contribution towards the infrastructure program. If I had only got my $20 million that would be three times larger. That is our contribution, the Province's. The reason our contribution is not the one-third any more - maybe in some cases it is up to 60 per cent, Art, am I right? - we are paying the whole shot is because of the way we have our criteria arranged for capital works. Some communities which are paying up to $328 per household, they've reached that level, so all their water and sewage goes to them now for nothing. They don't have to pay anything towards it. Do you follow me?

MR. J. BYRNE: Yes.

MR. REID: But someone has to pay it, so government picks up 100 per cent of the cost of it.

MR. J. BYRNE: Okay.

MR. REID: So we are up -

AN HON. MEMBER: (Inaudible).

MR. REID: - $60 million that the Province will have to contribute this year to the infrastructure program.

MR. J. BYRNE: I must be getting something confused. Because as you know, over the past four years I suppose the government has been cutting the grants to the municipalities and they've been cut by as much as 60 per cent. That is a fact.

MR. REID: Yes, grants, you are talking MOG, you are talking about municipal operating grants. That has nothing to do with what we were just talking about. That is different altogether.

MR. J. BYRNE: (Inaudible).

MR. REID: That is money that we give them for operating. We are talking capital.

MR. CHAIRMAN: Excuse me for a minute. Thank you, minister. I think Mr. Whelan has a couple of questions, Mr. Byrne, so we will go to him and then we can come back to you -

MR. J. BYRNE: I'm almost finished actually.

MR. CHAIRMAN: - and we will give you another twenty minutes.

Mr. Whelan.

MR. WHELAN: I'm more or less going to pick up where Mr. Byrne left off. With regard to the infrastructure program and the communities which would be completely financed and the communities which would have to pay 60 per cent or 66 per cent themselves, what is the ratio? How many communities are in a situation where you feel that they can't afford to pay their 33 per cent and will be reimbursed for 100 per cent of the projects? What is the ratio? Because it is a very contentious issue in my district, as Mr. Randell knows.

They feel that the only reason they are not in the situation that other people are in is because they haven't been able to get the money to borrow. That is the only reason why they find themselves now out in the cold. The other communities have down through the years received money and received capital funding and they have a lot of facilities that communities which are not in the same position don't have the same amount of debt. They are finding themselves in that situation because they couldn't get the money to borrow and they don't have as many facilities as the communities which have a lot of debt. Now they find themselves they are out in the cold again, because they are not up to the $328 magic number per household per year -

MR. REID: That is only for water and sewage now, don't forget. Not for roads.

MR. WHELAN: Water and sewage and roads too?

MR. REID: You still have to pay your roads. It has to be 60-40. You can't take roads into consideration at all.

MR. WHELAN: Well, even at water and sewer it is still -

MR. REID: Clarence, do you want to answer that? It is going to be a long answer.

MR. RANDELL: Basically, minister, what government has done under the infrastructure program is simply said that they will pursue the same policy as they do under the normal water and sewer program. Basically, government will only provide subsidy where the level of contribution on the local level equates with the rate per household which currently stands at $328 per household. Until a municipality reaches that level they will assume responsibility for the total share of the debt charge.

Basically, most municipalities that are caught in that situation where they are paying all of it and will continue to do so under the infrastructure program will be large centres like St. John's, Mount Pearl, Corner Brook -

AN HON. MEMBER: Carbonear.

MR. WHELAN: Holyrood, Colliers, Conception Harbour, Avondale. Out in the smaller places too.

MR. RANDELL: Yes, there will be a number of smaller places, simply because they have not borrowed and they have not incurred the capital debt up to this point in time. But if you are going to treat everyone fairly, whether they have it now or they are going to acquire it, then you simply set a level as government has done at $328.

I think it would be relatively unfair to say to, say, Holyrood today: You can have the money and it won't cost you, at the same time that Conception Bay South is paying the maximum and are going to be told that you will have to pay in addition to that.

MR. WHELAN: As I mentioned before, the reason they're paying the maximum is because the money was made available to them in years prior and they've received the benefit of the money that they borrowed. If Holyrood had been allowed to borrow or Colliers, Conception Harbour or Avondale to receive these facilities, they would have gladly taken it and it would have been up to the $328 figure but the money just wasn't made available to them.

MR. RANDELL: But Mr. Whelan, whether it was yesterday or today and they're up to the $328, I'm sorry, I don't get the difference.

MR. WHELAN: Yes I know Dave, but what I'm saying is that if the money had been available to them ten years ago for example - and they were applying for it for fifteen years but the money just wasn't made available to them. If it had been, at that time, they would have had to increase their taxes to bring them up to a rate of $328 per year but that money wasn't made available. It wasn't their fault that they find themselves in a situation now where they don't have a lot of debt but that doesn't mean that they can afford any better than the other communities to go out and borrow under this infrastructure program. I don't know if I'm making myself clear or not.

MR. RANDELL: I'm not clear, Sir, in terms of why it's any different for Holyrood now to have to pay $328 and attain a tax level to be able to afford that then it was for Conception Bay South to do the same today. It's only a question of when they reach that level - or I guess the old argument, I could have brought a serviced building lot in St. John's twenty years ago for $15,000. If I want the same lot now in 1994 I'm going to have to pay $60,000.

MR. WHELAN: What is the ratio? I asked you before - there are a number of communities around who just don't fall into the category whereby they come up to the $328 per annum.

MR. REID: About thirty communities.

MR. WHELAN: About thirty communities.

MR. REID: If it's that many. You know there's the Stephenvilles, the Deer Lakes, the Corner Brooks, the Ganders, the Grand Falls, Labrador Cities, Goose Bays -

AN HON. MEMBER: (Inaudible).

MR. REID: - and the ones who only got their first amount of money in the last couple of years. Because as you're giving them money now - if one of your towns applies for money now and they're not up to the $328, basically if they get the money they're still going to have to pay for it until they're up to that level but by the time they have that -

MR. WHELAN: So I believe I have six municipalities in my district and out of the six only two who would apply would qualify for the 100 per cent, I have four that don't. That's a fairly high percentage when you're talking about the Province as a whole.

MR. REID: Yes, but look at the advantage you got as a member only having six communities living so close to St. John's.

MR. CHAIRMAN: Any further questions?

MR. WHELAN: Thank you, Mr. Minister.

MR. CHAIRMAN: Mr. Fitzgerald.

MR. FITZGERALD: I just have one brief question. I'm not clear on this municipal infrastructure program either and when the minister stated that - or did I understand him correctly - that there are some communities who are getting the Newfoundland Provincial-Federal Infrastructure Program through 100 per cent funding?

MR. REID: Yes.

MR. FITZGERALD: Why would you not include the Town of Bonavista, which is one of the biggest communities on the northeast coast, taking into consideration where they find themselves now with the fishery and with little or no tax base in the community, why would those people not be considered for that program?

MR. REID: Because I've asked the Town of Bonavista - I've explained that they have a financial problem, they owe NMFC x number of dollars - I've told them that I'd like for them to come in and sit down and talk to me about their financial problem and we'll work out some sort of a system whereby they can pay it off over - and I'm being nice here - four years -

MR. FITZGERALD: And they haven't responded?

MR. REID: - and they basically said, we don't want to. It's as simple as that.

MR. FITZGERALD: It seems strange because I know it was only the other day I was talking to the deputy mayor and wondering when the infrastructure program funding was going to be announced.

MR. REID: Well, we were working last night until 11:00, and I am sure somebody in the group told me last night that we hadn't heard from Bonavista.

MR. FITZGERALD: You might be 100 per cent right.

MR. REID: Because I asked. I was going down through the preliminary list, that second list I'm talking about in infrastructure, and one of the first ones I noticed was Bonavista - where's Bonavista? Somebody looked it up and said: Well, I'm sorry, Minister, but there's an MC saying that we can't give Bonavista any money because they haven't come in and made arrangements with us in regard to their debt charges. So I've got my hands tied, and you've certainly got your hands tied as well on this one.

MR. FITZGERALD: Is it a situation where it's too late for them to consider?

MR. REID: It's a two year program, too, don't forget, so it's probably not too late.

MR. FITZGERALD: Are we just talking about water and sewer, or paving as well?

MR. REID: That's anything. It could be anything.

MR. FITZGERALD: All capital funding?

MR. REID: Yes.

MR. FITZGERALD: Thank you.

MR. CHAIRMAN: If I might make one comment on Bonavista - I'm allowed to do this, by the way - or on the Bonavista Peninsula, we've got 1997 coming up, which is a big year for tourists and tourism, and I think that all of these communities on the tip of the Bonavista Peninsula, if there's any money available to municipalities, they should all be taking up this money so that we can get ready for 1997.

There's a lot of work in a lot of these communities -

MR. REID: Yes, there's going to be a lot of other monies available through tourism, too, for your area. I'm not in a position to announce it, or say anything, but I know there's going to be a fair amount of money available through the provincial and federal government, so you're absolutely right.

MR. CHAIRMAN: Thank you. Mr. Byrne.

MR. J. BYRNE: Mr. Minister, these are related to Newfoundland and Labrador Housing, but they're general and I think you can answer them and maybe we can get through this.

MR. REID: I've got Bob and them out there waiting to come in.

MR. J. BYRNE: There's no need for them to come in.

MR. REID: No need?

MR. J. BYRNE: Not for my questions.

MR. REID: Great.

MR. J. BYRNE: Number one, is there any thought being given to privatizing certain sections or parts of Newfoundland and Labrador Housing with respect to - I understand the need for Newfoundland and Labrador Housing with respect to the subsidized housing and that type of thing, but they're into land development and they're in competition with private industry. Has there been any thought given to privatizing sections of that?

MR. REID: In the past year the approach that we've taken under my ministry and, I suppose, direction from Cabinet, is that we have to try to privatize every possible thing that we can.

We're in the process now of selling Elizabeth Towers. We're in the process of selling Churchill Square.

AN HON. MEMBER: (Inaudible).

MR. REID: Just about all the units in Pleasantville, I believe we've got one building left in Pleasantville. Stephenville is just about all sold and yes, you're absolutely right, privatization.

Now in regard to land development, like Southlands and so on, 99 per cent of the work that will be done on those land development areas from now on will be done by the private sector, and all we'll be doing there is basically providing some sort of direction and control in regard to environmental concerns and that sort of thing.

I don't know, maybe in a year or two down the road that might change as well but yes, we're definitely going towards privatization.

MR. J. BYRNE: But the land development, once you get into putting subdivisions in place and everything, and Newfoundland and Labrador Housing sells the lots, any profit there is going to - they contract out a lot of the work, I understand, the engineering work or whatever the case may be, but any profits from the sale of lots goes to Newfoundland and Labrador Housing which I imagine in turn is used to help subsidize -

MR. REID: Social housing.

MR. J. BYRNE: Social housing, right?

MR. REID: That's right.

MR. J. BYRNE: So there's going to be some kind of a connection that you'll have to look at right there, but the answer is yes.

The other one was, with respect to Newfoundland and Labrador Housing, I understand that housing has a list, or a source list I would imagine, of contractors that they use to do repairs and renovations; if housing buys an old house and are going to do it up type of thing -

MR. REID: That's correct.

MR. J. BYRNE: - and if they're going to build new housing I know they tender it out, type of thing, and people tender on it, but I'm sure there's a list that they have for up to certain amounts of work that could be - like, some individual could phone up Joe Blow and say: Okay, here's a job; do it.

MR. REID: They're called standing offers.

MR. J. BYRNE: Standing offers; that's the word I'm looking for - right on.

MR. REID: We have them all over the Province.

MR. J. BYRNE: Yes. So can I get a list of the contractors, companies and/or individuals, that are on that standing order list -

MR. REID: No problem.

MR. J. BYRNE: - and the breakdown of work that each individual has been asked to do and has done this past year? That should be easily attainable.

MR. REID: Bob is smiling out there. Bob, yes or no? Yes? Okay, no problem. There is no problem, it is just that I'm just wondering how much trouble my staff are going to have to have to go back through and pick it all out.

MR. J. BYRNE: It is only for one year.

MR. REID: I will provide it for you, for one year, no problem.

MR. J. BYRNE: One year shouldn't be a big problem.

MR. REID: No problem, yes.

MR. J. BYRNE: That can be sent directly to me or to the -

MR. REID: I will send it directly to you, sir, personally, from Newfoundland and Labrador Housing.

MR. J. BYRNE: Thank you. That is all I have for now.

MR. REID: You have to remember, and let me just re-emphasize something here to the Committee for the record. The Government of Newfoundland and Labrador next year will only put $15 million - basically $15.3 million - into the total budget of the Housing Corporation.

MR. J. BYRNE: (Inaudible).

MR. REID: That doesn't sound like very much money, does it? That is all the government will put in. We will spend next year maybe $280 million, $300 million, in regards to our social housing program, our connection with the federal government, and everything else. The monies that we make on Southlands, on selling Elizabeth Towers, on selling land in Stephenville and so on, that goes back into our pot. Then we take it, we go out and we help the native community, we help the seniors in the Province, we help the poor in the Province. We will spend with the federal government almost $300 million this year, remembering that the provincial government only puts $15 million into that whole program. That is not very much.

So even though a lot of people say: Newfoundland and Labrador Housing should not be out there doing work that the private sector does, if they are not out there making money then we are going to have to deal with the other side of the coin and ask: Where will the money come from to provide social housing in Bonavista or in Torbay or in Holyrood or wherever it is? Where will the money come from? The government will have to increase its $15 million or whatever it is putting in. If it is not putting it into housing it will have to put it into social services.

That is the rationale behind the Housing Corporation. We've been doing quite well over the years in promoting. I think, to be quite honest about it, attitudes are gradually changing towards the Housing Corporation. Because, number one, we are getting out of a lot of things that some people think we shouldn't be in, but number two, when you go around this Province and you look at some of the housing projects and some of the things that we've done in this Province, the best lay-outs of properties and parks and open areas you will find are Newfoundland and Labrador Housing areas. I think personally as the minister that without them we are going to be in an awful lot of trouble.

MR. J. BYRNE: The question I asked with respect to privatization of housing - I wasn't saying that you should or you should not. I was asking that question merely to get the information of what government is thinking at this point in time. I don't know if you picked up something from my question that wasn't intended.

MR. REID: No.

MR. J. BYRNE: Good enough.

MR. REID: There is no intention at this point in time other than to follow the Order in Council that was issued two or three years ago, and that was divest ourselves of as much of these properties that we have that are basically costing us money every year. That is as far as we've gone at this point in time.

MR. J. BYRNE: Okay.

MR. CHAIRMAN: Thank you Mr. Byrne.

Mr. Whelan, do you have any further questions? No questions. No questions, Mr. Noel?

Mr. Fitzgerald.

MR. FITZGERALD: Just one on housing. Another individual - and I suppose I'm talking about personal cases here, but it is a good forum to get an answer, and I compliment the minister and his staff for the frank way that they are answering questions.

One individual, in fact a doctor in my District, and I've written the minister on this, and I think Housing is probably aware of it as well, is living in a Newfoundland and Labrador Housing dwelling. I think now it is about to be sold. Newfoundland and Labrador Housing has done an assessment of the property and had an appraisal done, which was not to the satisfaction of the occupant at the time, and he had an independent appraisal done. A lot of difference in the two appraisals. Is there any room for negotiations between the two appraisals, or does Newfoundland and Labrador Housing accept their own appraisal and say: That is it, that is the price, that is the value.

MR. REID: To be quite honest about it you know, you are probably aware that if you want to get an appraisal for your house done - if I wanted to get my house appraised in Carbonear tomorrow, I could pick up the phone right now and tell an appraising company in Carbonear: appraise my house for $100,000 and they would have an appraisal in for $100,000.

Now I am not saying that happened in that particular case, but if there is a discrepancy between one appraisal company and the other, Newfoundland and Labrador Housing will sit down with that person and look at the two appraisals and see where the difference is, and yes, make some compromise one way or the other, but if there is a drastic difference, there is something wrong, okay? A light goes on if there is a drastic difference between two appraisals, and when I say drastic, if it is in the thousands of dollars, then there is something wrong so it is either our appraisal is wrong or the other one is wrong; so, yes, bring them together and I will provide you with the opportunity to go to Housing or whomever it is wants to check and we will do it for you, no problem whatsoever.

MR. FITZGERALD: But I think the difference, Mr. Minister, is something like $10,000 with $13,000 of work that was identified that needs to be done in order to bring the house up to standard. The gentleman is a professional person, he is a doctor there and it seems like if he has to pay that price he may vacate the area.

MR. REID: Well in a case like that, to maintain a doctor or something like that, don't let that happen without coming and seeing me and I will take a personal interest in it.

MR. FITZGERALD: You are aware of it, your department -

MR. REID: I know exactly where you are coming from on it and, you know, don't let something like that happen. For God sake, for the sake of a few dollars with regard to a house and so on. Let's have a look at it, sure.

MR. FITZGERALD: There is a letter gone, a piece of correspondence to your attention.

MR. REID: Sure, no problem. I will sit down with you myself if I have to, or with them.

MR. FITZGERALD: The federal government put back, was it $100 million in the RRRAP program? It was something like that anyway, has the Province gone back in with their 25 per cent of the share that they had ordinarily put in that program?

MR. REID: Yes. It is not determined yet exactly how much they are going to be putting into Newfoundland for this year and when that's determined then I will have to go back to Cabinet and set the exact figure but we don't know yet what the exact figures are and we won't know for the next maybe two or three weeks.

MR. FITZGERALD: But you will be taking part in the program again?

MR. REID: Oh definitely, yes.

MR. FITZGERALD: Because it is a good program, it is a shame to even suggest that it be taken away. Many times I think, when we drive along in our rural areas and we see- -

MR. REID: That was the other crowd.

MR. FITZGERALD: Yes, I know. You fellows don't want to be as bad as they were, so when we drive along in many parts of rural communities we can see a lot of good that this RRRAP program has done and it would be a shame to have it disappear.

MR. REID: Just think of the employment it has created over the years.

MR. FITZGERALD: Absolutely. That's it for me, Mr. Chairman.

MR. CHAIRMAN: Shall the subheads 1.1.01 to 5.1.04, carry?

AN HON. MEMBER: (Inaudible).

MR. CHAIRMAN: What the Vice-Chair was asking is that they would agree to the subheads as long as the information is provided that was asked for.

MR. REID: You will have them in a couple of days.

MR. FITZGERALD: Okay, no problem.

On motion, Department of Municipal and Provincial Affairs, subheads carried without amendment.

MR. CHAIRMAN: Thank you. Now we will have to do Newfoundland and Labrador Housing.

On motion, Newfoundland and Labrador Housing Corporation, subheads carried without amendments. Thank you very much.

Before we move adjournment there are minutes from two meetings, April 28 and April 25, that we distributed this morning. Would somebody move that they be adopted?

On motion, minutes adopted as circulated.

MR. CHAIRMAN: Thank you, Mr. Minister and I thank your officials. I thank the members of the Committee.

MR. REID: Thank you, gentlemen.

MR. CHAIRMAN: It has been a pleasure.

The Committee adjourned.