May 28, 1996                                          GOVERNMENT SERVICES ESTIMATES COMMITTEE


Pursuant to Standing Order 87, Wally Andersen, M.H.A., Torngat Mountains, substitutes for Gerald Smith, M.H.A., Port au Port; and Gerry Reid, M.H.A., Twillingate & Fogo, substitutes for Douglas Oldford, M.H.A., Trinity North.

The Committee met at 7:00 p.m. in the House of Assembly.

CHAIR (R. Wiseman): Order, please!

The purpose of this meeting tonight is to review the estimates of the Department of Municipal and Provincial Affairs and the Newfoundland and Labrador Housing Corporation.

I would like to take this opportunity to introduce to you the members of the Committee beginning with the Vice-Chair, Mr. Jack Byrne. We have Mr. Bob French, Mr Wally Anderson who is filling in for Gerald Smith, Anthony Sparrow, and Mr. Gerry Reid filling in for Doug Oldford.

We have established some ground rules prior to the meeting and I think they are pretty standard. What we have done is, we have given the minister fifteen minutes to have an opening statement, if he so desires, and then the Vice-Chair will respond for fifteen minutes. In this case, we have sort of an arrangement here, where the Vice-Chair is going to forego his response time and pass it on to his colleague, Mr. French. We will then alternate for ten minutes between each committee member, if they so desire.

I want to welcome the minister and his staff this evening and ask him if he would be so kind as to introduce his staff and to advise us as to whether he has an opening statement. If not we will have the Clerk call the head and proceed from there.

MR. A. REID: Thank you, Mr. Chairman.

I will introduce, first of all, those from the Newfoundland Housing Corporation. Bob Noseworthy sitting right behind me is the CEO of the Housing Corporation and President and Ed Heath is our financial administrator. Am I right?

WITNESS: Vice-President

MR. A. REID: Vice-President of Finance. On my left is the new Deputy Minister of Municipal and Provincial Affairs, John Abbott, and next to him is Art Colbourne - and I am sure you all know Art - and Winston Hiscock, who is the Director of Human Resources.

I am going to take a couple of minutes. Elizabeth, I have given you a memo that we sent out last week to all municipalities in the Province. By the way, gentleman, I have a cold so you will have to bear with me tonight, Jack, and tell me if I am speaking too low; shout out to me. This letter went out to all municipalities last week and it basically outlines what we have done in the Budget. We are also sending, if we have not already sent, an individualized - it is gone, is it?

WITNESS: Yes.

MR. A. REID: There is a letter to each municipality outlining how much their MOG will be cut this year, per quarter and so on; so they should have that by now. So Elizabeth, if you want to pass that out to the members - you did? Okay.

I have a few opening remarks and I am going to read them if you don't mind, Mr. Chairman. I am not used to reading things but I have to do it tonight because of my voice.

First of all, let me say that I am pleased to be here this evening, to have this opportunity to present the estimates of the Department of Municipal and Provincial Affairs. This is four times I have done that, so I may be setting a record. Over the years, if you go back and look through, there have been some of my friends - Norm Doyle: I think Norm was there for four or five years; and a number of people. I think I am getting to the point where I have probably been the Minister of Municipal and Provincial Affairs as long, if not longer, than most people.

I was talking to John Crosbie on the weekend and he said that he only had two years in Municipal and Provincial Affairs. He was there a number of times and, of course, Mr. Peckford was there too; just a little bit of history.

There are actually two sets of estimates to be presented this afternoon, the main one being Municipal and Provincial Affairs together with the Housing Corporation. Assuming the concurrence of the committee, it would be my intention to present the Department of Municipal and Provincial Affairs and follow that with the Housing Corporation.

For the benefit of the committee, I would like to highlight the major items in the estimates. The total expenditures for the department will be $145.2 million, but that is not the gross expenditures. There are revenues both in current and capital accounts totalling $22 million leaving a net expenditure of approximately $122.9 million.

There are 172 permanent positions in the Department of Municipal and Provincial Affairs operating all divisions. The responsibility for the Government Service Centre, which at one time rested in Municipal and Provincial Affairs, is now with the new department of Government Services and Lands even though we do still play a minor role in the operations of that department, insofar as their finances and their human resources are concerned.

Mr. Chairman, it might be in order at this time to review some of the major budget decisions that were taken as they relate to the Department of Municipal and Provincial Affairs. Government has taken a decision to discontinue funding for 1996-1997 for three community related programs, including the community water and sewer program, the solid waste management facilities program and the fire-fighting equipment purchase program. While program funding will not be in place for this year there will be a budget in the department to deal with emergency situations. Municipalities can continue to request financial assistance for the kind of projects that normally would be financed under the programs that are being discontinued this year. However, funding will be available for emergency situations only. Every case will be assessed on its individual merits and approval will be on the basis of optimum need and use and the availability of municipal funds to cost share projects with the department.

This year the Province will be reducing by 20 per cent the grants to the cities of St. John's and Corner Brook for fire protection services. For St. John's this will mean a reduction of $400,000 and for Corner Brook it represents a $100,000 reduction. Government will be reducing funding under the Municipal Operating Grant by 10 per cent for 1997 with a saving to be achieved in the first quarter of the municipal year. In the first quarter of 1997 it will mean a reduction of $3.4 million, the first quarter of 1997. On average, the reduction to municipalities will be in the range of 8 to 13 per cent which goes anywhere from the smallest amount to a maximum in St. John's, Art, of - how much in MOG reduction in St. John's?

MR. COLBOURNE: Twelve point nine.

MR. A. REID: Twelve point nine million - no?

MR. COLBOURNE: No, percentage.

MR. A. REID: (Inaudible) dollars in St. John's?

MR. COLBOURNE: Oh, about $2 million.

MR. A. REID: Is it that much?

An average reduction is between 8 and 13 per cent. Most of the smaller communities in the Province - when I say smaller communities I mean communities under a 2,000 population - will see a reduction of somewhere between $3,000 and $6,000. Some of the larger ones will see larger - Carbonear for example will lose $40,000.

Beginning this year, government will phase out its subsidy to municipalities for property assessments. This comes on the heels of a request from the Federation of Municipalities, that have been lobbying us for a number of years, to do away with our assessment division. I have been standing firm on that since the first request some three or four years ago. I base my comments on the experience that I have had around the Province, especially in smaller rural areas of the Province, with regard to being able to pay for assessments. We have decided that we will be exploring ways to deliver assessments, recognizing that this is really a municipal service which can be delivered from outside the department rather than inside.

The department will be releasing a consultation paper with respect to assessments to determine if they can best be carried out by the town councils themselves, by a Crown corporation, by a private enterprise or if the department should stay as it is right now, status quo. Regardless of the method adopted after the consultation paper, assessments will be conducted on a full cost recovery basis by the Year 2000. The current fee for real property assessment is .0002 or two-tenths of one mil times the total tax value of assessment role in each municipality. Are you all familiar with that? I hope you are. If you have any questions on that I will explain it to you later on.

To increase cost recovery this year the department is putting in place a minimum fee per parcel, per property. What it means basically is that the municipalities paying less than $10.50 per parcel will now have to pay the bottom rate of $10.50; they will be brought up to $10.50. At the present time municipal contributions range from a high of $24.30 in Mount Pearl to a low of ninety-five cents per household - that is somewhere up on the North West Coast, I believe - per parcel. The change in structure will ensure greater consistency with respect to assessment service fees.

In recognition of the impact that all of these measures will have on municipalities, especially on the smaller ones, the government will continually assess the consequences, and when required, will provide assistance and support to municipalities to allow them to continue to provide basic services to their residents. We are not going to see any communities in a situation where they are going to go bankrupt because of a few dollars. We will help them, if we need to, but it will have to be proven to us, beyond a shadow of a doubt, that they are in dire straits, I guess.

Under Municipal Capital Works: We will continue this year to fund the infrastructure program. There is approximately $40 million left in work not tendered but work that has been committed; $40 million this coming year. There will be at least $40 million of work going on in the Province under the old infrastructure program. This program will generate considerable construction activity in municipalities throughout the Province.

In addition to the $40 million, the government will provide loan guarantees under the Newfoundland Municipal Financial Corporation to any municipality which can fund 100 per cent of its cost obligations for water and sewer, as well as road paving and reconstruction.

As well, government in the current fiscal year will make available an amount of $25 million in additional loan guarantees either directly or through NMFC, for municipal capital works. Government will suspend the current financial formulas in favour of supporting those municipalities which demonstrate to us that they are able to incur a greater share of the cost of financing capital works projects.

As the minister responsible for local government, I am pleased in these difficult financial times that we are able to put some funding into the municipal capital works program. Among other things, the municipal capital works serves to upgrade the quality of physical infrastructure in local communities, and it provides timely and effective opportunities for deployment.

In conclusion, Mr. Chairman, overall the implications for municipalities emanating from the 1996 Provincial Budget will see our municipalities take a greater financial responsibility for their own affairs. Furthermore, I do not see this trend changing in the to near future.

In conjunction with this direction is a move by my department to review all of its policies and programs with a view to removing barriers to more independence for municipal governments, encouraging greater self-sufficiency and promoting regional cooperation in the delivery of certain services where circumstances warrant.

I hope to build on the Fogo Island Regional Council Model and see versions of it adopted in other regions of the Province over the coming months. I am referring to my own area of Conception Bay North, and that one I am going to be concentrating on in the next two or three months, hopefully, to be able to at least get a regional council started in that area.

Mr. Chairman, that concludes my remarks and I will be glad to receive any questions that you might have for me this evening.

CHAIR: Thank you very much, Mr. Minister.

Before we move on, I want to introduce to you Mr. Ed Byrne who has arrived a few minutes late and who is also a member of the committee.

I guess we will ask the Clerk to call the Head.

MADAM CLERK: 1.1.01

CHAIR: Okay, 1.1.01.

I will now go to Mr. French for his fifteen minutes.

MR. FRENCH: Thank you, Mr. Chairman.

First of all, I would like to apologize; I have to leave because of another commitment, so our Vice-Chair has generously allowed me to go first. I have several questions. I will not try and steal Jack's because I know he has quite a few as he goes through.

On page 267, Transportation and Communications in 1995-1996 was budgeted at $52,900, went to $81,200, and is now to $52,900. Could you tell me what that is for?

MR. A. REID: The $81,200 was basically after I was given the new department of Government Services. The Government Services department was added to my department last year. There was no money budgeted for any communication or any travel on behalf of the minister and a number of other officials. That part of my department now is gone, so that is the reason we are back to where we are right now. Government Services was given to me halfway through the year. I don't know exactly when it was, but there was nothing budgeted in my budget for that last year when I took it on, and that is why it went up as high as it did.

CHAIR: Before we move on, I forgot to say that before you speak - the minister is fine, we can identify the minister, and the Committee is fine, but if we go to the officials I would ask that the official identify himself before he speaks for our recording purposes. Thank you.

Mr. French.

MR. FRENCH: Thank you. On the -

MR. A. REID: I will be honest too, Mr. French. There was a trip I made to Turkey in there that cost a fair dollar, last April when I went to represent the Government of Newfoundland on that trip with the now-Premier, representing the battle of Gallipoli, the eightieth anniversary. I think that cost something like $10,000, to be quite honest about it, by the time I went and got back, with the staff that I had and so on. That is included in that as well. That wasn't taken into consideration with the $52,900 when we budgeted to begin with.

MR. FRENCH: In Executive Support, 1.2.01.01, Salaries: They were budgeted at $416,500, went to $528,200, and now we are down to $293,400. Would that be again because of the division moving out?

MR. A. REID: No, that is because we lost an assistant deputy minister, a deputy minister and a number of staff people. Even though the deputy minister was replaced we are still down one assistant deputy minister and secretaries. It is because of the reduction in our staff in the office, basically. Severance as well was in that $528,200. That is what drove it from $416,500 up to $528,200 to begin with.

MR. FRENCH: Could you give me a rough idea of what the severance would have been?

MR. A. REID: Do we know what the severance was?

WITNESS: I would say it was roughly $60,000 for each one.

MR. A. REID: I can provide you with the exact figures, but we are saying it is roughly around $60,000 each, for each one of the two, the deputy minister and the assistant deputy minister.

MR. FRENCH: Around $60,000?

MR. A. REID: Yes.

MR. J. BYRNE: There was more than that actually, wasn't there?

MR. A. REID: The secretary was transferred out to somewhere else so she didn't get severance. There was accumulated leave too. Do you want me to get the exact figures on that for you?

MR. FRENCH: If you can, yes, if you can probably send them to us tomorrow or whatever.

MR. A. REID: I will send them over to you, that isn't a problem. Honestly, I didn't know, I didn't ask. When Clarence left I didn't ask what their severance was. I never had the opportunity to ask.

MR. J. BYRNE: Can I just interject?

MR. A. REID: Sure.

MR. J. BYRNE: With respect to the severance, were there monies over and above the severance that the deputy minister and the ADMs got when they left, in the form of a package?

MR. A. REID: Not that I know of. Wins?

MR. HISCOCK: No.

MR. A. REID: No.

MR. J. BYRNE: Straight severance, that was it?

MR. A. REID: That was it, yes. I don't know of any. If there was it certainly didn't come from our department, did it?

WITNESS: If they did receive anything they would have received a redundancy package which is one week's pay up to twenty years (inaudible).

MR. A. REID: Yes, okay. Maybe that is what you meant, the one week's pay up to twenty years and this stuff, is it? Is that what you are referring to? John, do you want to answer that? Deputy Minister, John Abbott.

MR. ABBOTT: Mr. Byrne, what happened, both the former deputy and assistant deputy minister received both the normal severance pay plus the redundancy pay because they were asked to retire.

MR. J. BYRNE: How many years? How many weeks?

MR. A. REID: Clarence had twenty, did he?

MR. ABBOTT: Clarence Randell, the former Deputy Minister, had twenty-five years of service and Don Peckham, the former Assistant Deputy Minister, had thirty-six to thirty-eight years of service. I think he would have received severance based on his thirty-six years.

MR. A. REID: Then the public complains about what us politicians get.

MR. FRENCH: Transportation and Communications: From $59,800 it went to $86,000 and it is now budgeted down to $39,800.

MR. A. REID: That was just a straightforward cut, I believe. There is nothing in particular. You will find out throughout the Estimates that we cut in a number of areas in Transportation and Communications. The new deputy minister has basically put the clamps on travel by any officials. Also, with one ADM less in the department we will save some monies there. So it was just basically taking the $59,000 and cutting $20,000 out of it, to save $20,000. We are going to live within that $39,000 budget.

MR. FRENCH: On page 268, Professional Services was budgeted at $32,100, we spent $13,200 and this year in the Estimates there is $20,100 for Professional Services.

MR. A. REID: Professional Services: That is 06, is it?

MR. FRENCH: 05.

MR. A. REID: 05, Professional Services. Do you want to answer that, Art? Art Colbourne?

I believe, if I am not mistaken, that has to do with a continuation of our computer services, does it not?

WITNESS: No.

MR. A. REID: No, that is Purchased Services. Can you answer that one? Okay. Make a note, and I will get back to you on that one, if you do not mind gentlemen. Go head!

MR. FRENCH: The next one, Purchased Services, $88,300. It was budgeted at $113,300 and we only used $52,400, and this year we are budgeting $88,300.

MR. A. REID: You are not going to be able to answer that for me either, are you, Art? Can you answer that one?

MR. HISCOCK: Winston Hiscock, Director of Administration. That is purchased services which covers the rental of photo copy machines, the funding for the whole department, the cost of -

MR. FRENCH: Excuse me, I cannot hear you.

MR. A. REID: Explain, Wins, what the $88,000 is for, first of all. Tell us what you spent that on.

MR. HISCOCK: It is provided to cover general advertising costs for the whole department; also office equipment, the purchase of photo copying machines, funding to support organizations and any advertising costs, costs of a general nature for the whole department.

MR. FRENCH: In 1.2.02.07, Property, Furnishings and Equipment, $33,600 down from $43,600.

MR. A. REID: That is what we actually spent last year, $43,600, yes.

MR. FRENCH: Yes.

MR. A. REID: We went up to $43,600 last year because we were responsible for furnishing and looking after - you will find in a lot of these the answer to this is the service centre. When the service centre was given to us we had to provide office space, accommodations and a number of things that were not budgeted in our particular budget. So you will find in certain areas that our budget went up actually. The actual expenditures went up last year, but are coming back down to what they normally are this year, because we are rid of the Service Centre.

You may find in Property, Furnishings and Equipment that there may be some monies for furnishings and rentals, or leased space, for a certain number of months until it was passed over. I can get you a full breakdown on that whole heading.

MR. FRENCH: Okay, if you would.

MR. A. REID: I will get you a full breakdown on that whole heading.

MR. FRENCH: Okay. Well then, I won't ask the other question on 1.2.02.12, Information Technology, either. If I could get from 1.2.02.05 to -

MR. A. REID: Yes. I will give you a breakdown on all that; it is not a problem.

MR. FRENCH: Okay, thank you.

I just have one other question. It is on page 269, again Purchased Services, $242,300. It is under 2.1.01.06.

MR. A. REID: That is rental for our regional offices. We have five regional offices in the Province and that is our rental amount for the five offices in the Province, the $242,000.

MR. J. BYRNE: Are those the Government Service Centres you are talking about?

MR. A. REID: No, those are the municipal offices in Gander, Corner Brook, Goose Bay, and on Kenmount Road. That has not changed. That does not change from year to year.

MR. FRENCH: Okay. Thank you, Mr. Minister and staff.

Mr. Chairman, that's it for me. I have another commitment in the district and ask to be excused?

CHAIR: No problem.

MR. FRENCH: Thank you.

CHAIR: Jack, do you want to go for five to make up the fifteen minutes and then we will just check to see if the government members have any questions. If not, we will have to wait on whatever you decide to do.

MR. E. BYRNE: (Inaudible).

CHAIR: So you are going to take up the five?

MR. E. BYRNE: Yes.

CHAIR: Okay, go ahead.

MR. E. BYRNE: I have some questions dealing with the Newfoundland and Labrador Housing Corporation. They have taken a big hit this year, from $14 million to $8 million. What does that mean for the Corporation, not only in the short term but the long term?

MR. A. REID: Do you want to take a chance at that, Bob, or do you want me to answer it?

MR. NOSEWORTHY: It is up to you, sir. I am at your pleasure.

MR. E. BYRNE: If you can, in detail, where possible, explain what services or departments within the corporation have - what has been the impact really on the entire corporation as a result?

MR. A. REID: We are hoping that there will not be any impact on the corporation this year. In fact, we are -

MR. E. BYRNE: Pardon me?

MR. A. REID: We are hoping that there will not be any impact at all on the corporation this year. In removing the $5 million from the Budget, basically what we have been told to do is sell off assets that amount to approximately $5 million. We have a number of assets in the Province that every year generate profits for the Housing Corporation. By escalating the sale of some of our assets that we have we can pick up the $5 million.

It is imperative that nothing happen to the Housing Corporation this year in regards to what we spend at the end of the day, the number of employees we employ in the overall operation of the Housing Corporation because we are in the process right now of negotiating with the federal government and CMHC, for the possible turning over of properties in Newfoundland, held by CMHC, to the Newfoundland and Labrador Housing Corporation. If we do that, considering that up to 75 to 80 per cent, in some cases, of our budget is funded by CMHC and the federal government, then we are trying to keep our base, our bottom line, as high as we can possibly get it because that would give us a better negotiating opportunity when we have to eventually, at the end of this year, sit down and talk to Newfoundland and Labrador Housing.

So really, even though you see a cut, a substantial cut, to Newfoundland and Labrador Housing this year, we will still be trying to spend as much of last year's budget as we possibly can by the disposition of assets and other ways of collecting the extra $5 million.

Bob, if you want to make a comment, you go ahead.

MR. NOSEWORTHY: The minister is exactly right, we are negotiating with the federal government in terms of a block funding arrangement as opposed to the traditional cost-shared 75/25 arrangement that we have been using to deliver social housing over the last thirty years in the Province. What the government has recognized this year is that in order to negotiate that block funding arrangement we should be in a position to try and retain our expenditures at a reasonable level so that we will be able to at least maximize the federal monies coming into the Province. So I think that was number one that was recognized there.

Number two, there will be some reductions in maintenance and operating as it relates to the sale of units. So there will be roughly about 200 units that we will be selling out of our market rental portfolio. When I say market rental portfolio, these are the units of the corporation that are rented on a market basis, and primarily, while probably seven or eight years ago we would have had 1,700 of these units, today we have somewhere in the order of 400. We are selling these to tenants in support of home ownership or the private rental market who would turn around and rent them as private landlords.

The bulk of those that are remaining are in St. John's and we will be selling places like Arnold's Loop, Elizabeth Towers and Churchill Square this year to satisfy, as the minister said, the requirements for an additional $5 million in profit that the government has asked us to achieve this year in terms of lowering our overall grant.

That, in essence, is the reason for the bulk of the reductions through the sale of assets as opposed to reduced expenditures.

MR. E. BYRNE: Where is the housing corporation headed ten years from now? There is a lot of discussion; I think there is anyway. I have had a lot of discussion about the role of Newfoundland and Labrador Housing in the Province, from what it was to what it is today. Questions like: Should Newfoundland and Labrador Housing be involved in developments like Southlands? Is it's role primarily to be involved in social housing and not development programs?

I have my own views on it. I think Newfoundland and Labrador Housing Corporation has an integral role to play, not only in the Department of Municipal and Provincial Affairs but certainly stabilizing the market. I guess it is more of a generic question of where you see the housing corporation going in the next ten years, certainly to the minister and to the Chairman of Newfoundland and Labrador Housing.

MR. A. REID: I think you would be putting the Chairman of Newfoundland and Labrador Housing on the spot if you asked him to react to your question, because it would be pure speculation. I guess it would be pure speculation on my part too, what is going to happen.

MR. E. BYRNE: My question was not meant to ask him what was going to happen but where you, as minister, see the Newfoundland Housing Corporation - what direction is it headed in? Do you see a role for it in the future? I am not asking anyone to predict what may happen ten years from now. I am just trying to get a sense of where government's feelings and intentions are as it relates to the Newfoundland and Labrador Housing Corporation.

MR. A. REID: My feeling, as minister since I have taken over, is that the Newfoundland and Labrador Housing Corporation, out of every other department or agency of government, is probably the most efficient operation that we have, considering that the Province puts $8.2 million in cash into an agency or department and from that $8.2 million there is $123.7 million generated on an annual basis. Now you ask yourself: Where does the money come from? For an $8 million investment, to get a return of $123.7 million, that is not to bad. I doubt if there is any other department in government, even the liquor corporation, who could show you an investment as well as that.

The reason I say that is, if we had to sit down and break down the profits that we have made as a housing corporation over the years and could show you the amounts of money that the housing corporation has made, has generated through developments, such as Southlands for example, the development of those properties around the Province has created a great asset for the Province, because in doing that, the actual sale and investment in these properties has always generated large profits for us. The profits go back into the housing corporation which ultimately go back into social housing. So the government has been getting away with, for the past twenty years, a pretty good deal for very little money.

MR. E. BYRNE: I'm not questioning that. I happen to believe in the Newfoundland and Labrador Housing Corporation and the function and role it plays now in society and in government. What I'm worried about is: Will it be able to continue to play that role and function? Some people have speculated that Newfoundland and Labrador Housing shouldn't be into large-scale private developments. I'm not promoting that viewpoint here from my point of view as a private member. What I'm asking is: Do you see the Newfoundland and Labrador Housing Corporation playing the role it does now over the next decade, and continuing to be a generator of profits, not only for government, that go back into social housing?

MR. A. REID: The answer is, no, I don't think it will. I don't think it will remain as it is today. I say that because after what Bob said a few minutes ago, when we dispose of the 400 rental units that we have left in and around the St. John's area, well, that section of the Housing Corporation will be gone. We also own large tracts of industrial properties around the Province that we will be putting up for sale in the near future. There is low rental housing that I think we will have to maintain from a social housing perspective.

So I think that there will be a change. I just went through a consultation process with the pros and cons of us being involved in Southlands. A number of large developers, who feel we should not be into the private market -

MR. E. BYRNE: Private developers have always felt that the Newfoundland and Labrador Housing Corporation should not be involved in private developments.

I'm not trying to out you on the spot, I'm not trying to trap anybody in terms of the questions I'm trying to ask. When you look at the Housing Corporation ridding itself, or the sale of many of its assets, where does it stop and what type of entity do we have left? What we are left with at the end of the day, whether it is five or seven or ten years from now, compared to what we have today, how much different will it be, and what will be the cost, not only the bottom line financial cost of that but the social cost of that? That is the importance of it, I think, is what I'm trying to get at.

Last question, Mr. Chairman.

MR. A. REID: Let me give you a brief answer. I think there will be a change. I won't say a drastic change. I'm not going to go as far as to say that: No, we won't be into land development and land assembly. I won't say that because I'm waiting now for the report to come back on the meetings that we had. I will say that there will be some entity around here much longer than you and I will be around here that will have to look after the 10,000 social housing units we have in the Province. If it isn't the Newfoundland and Labrador Housing Corporation it is going to have to be Social Services or some other department.

So I think there will always be a role for the Housing Corporation as it relates to the social side of housing. How far we go beyond that in regards to residential development and so on, I'm not in a position right now to say. It wouldn't be fair for me to say that after just going through a consultation process with a number of people in and around the St. John's area. But you may be right.

MR. E. BYRNE: That is fine. Thank you very much, Mr. Chairman. That is good.

CHAIR: Do you guys have any questions?

MR. G. REID: I would like to follow up on what the Member for Kilbride said on the Housing Corporation. You talked about investing $8 million and generating $110 million. Why would we be selling properties that could do that for us?

MR. A. REID: I'm sorry, $123 million not $110 million.

MR. G. REID: Yes.

MR. A. REID: Why would be selling the properties?

MR. G. REID: Yes. You were talking about how we are going to sell properties around St. John's this year, and if we continue to do that then we won't continue to generate $123 million, will we?

MR. A. REID: That is correct. It is the policy of government, it has been the policy of government for - five years, Bob, 1989? Longer than 1989?

WITNESS: Probably back to 1986.

MR. A. REID: It has been the policy of consecutive governments since 1986 for the Housing Corporation to unload those types of properties. It comes from a number of areas. It comes from the private sector, it comes from co-operatives, it comes from individuals who are renting these properties and basically want to buy or lease or whatever. We have downscaled the department over the last four or five years. Even since I've been here we have got her down from 1,700 to 400, and I'm expecting that before this year is out those 400 will be gone. But it has been government policy to do that, prior to 1989, during the term of the previous Premier, Mr. Wells and this Premier.

MR. G. REID: Does the Federal Government feel the same way about it? Are they going in the same direction?

MR. A. REID: Well, the Federal Government is going even further. The Federal Government is getting out of housing, period, and they are hoping to be able to convince us and Newfoundland and Labrador Housing to take it over. So the Federal Government will maintain their $2 billion a year that they put into housing but they are going to do it on a one time basis. What is it called, Bob?

MR. NOSEWORTHY: Block funding.

MR. A. REID: Block funding.

The Housing Corporation in Canada was one of the seven sisters. Do you know what I am talking about.

AN HON. MEMBER: Yes, I do.

MR. A. REID: So housing in Canada is basically going to be passed over to the provinces. It is the policy of government to sell off properties, not only on break-even basis, but to lose as well. We are going to lose money on Elizabeth Towers. There are no two ways about it.

MR. G. REID: I don't know, I guess, if I should be (inaudible).

MR. A. REID: Okay. By the way, all these units we are talking about are market rental units; they are not social housing units. They have nothing to do with Social Services. These are people like yourself and me and so on who are living in these and paying the market rental for those units.

MR. G. REID: I did not realize until tonight that maybe I should not be asking these questions.

MR. A. REID: Why?

MR. G. REID: Well, it seems like we have a cash flow in the Housing Corporation. Why should we be selling it off?

MR. A. REID: A good question.

MR. G. REID: I know that private investors are out there saying, we should sell it off because we are competing with them, but if the Housing Corporation goes, then the cost of properties in St. John's, or building lots certainly, are going to rise; and the cost of new housing. I guess the Housing Corporation is sort of keeping us stable right now, isn't it?

MR. NOSEWORTHY: I didn't tell him to say this, boys!

MR. G. REID: Again, Bob did not set me up. I did not realize it tonight, but I do not think we have another agency that makes money like them, except for the Liquor Commission, do we?

AN HON. MEMBER: Hydro. (Inaudible).

MR. G. REID: Yes, and Hydro. That was because we were not taking any money out of it until now.

AN HON. MEMBER: You better stick with housing.

MR. A. REID: It is a basic question of whether or not government should own the properties. Like Churchill Square, for example: Should government own properties like Churchill Square? That is the question you have to ask yourself? The answer apparently, from what I am hearing is, no, we should not.

MR. G. REID: I guess it is a philosophy, whether or not government should be in business.

MR. A. REID: Yes. Well, we are competing against the private sector, there are no two ways about it, when you are talking about rental units around the Province.

CHAIR: Okay, do you want to share your time with Mr. Sparrow, Mr. Reid?

MR. G. REID: No, I am not finished yet.

CHAIR: Okay.

MR. G. REID: On page 272, 2.3.02, Industrial Water Services: It looks like we are going to make a profit on that too, doesn't it? The reason I am asking that question - and Mr. Colbourne will probably answer it. Does the Town of Twillingate have an industrial water supply?

WITNESS: Yes.

MR. G. REID: Do they have to pay the government for the maintenance of that?

AN HON. MEMBER: No.

MR. G. REID: No. So it does not fit under this heading, because it looks like you charged for - under 2.3.02, what services are you talking about there? Are they in particular communities? Industrial Water Services: "Appropriations provide for the routine maintenance and operation of industrial fresh -"

MR. A. REID: We have a number of communities around the Province where we supply water services: To Marystown, for example, yours is another one and Wesleyville is another one. There are how many, Art, twenty-one?

MR. COLBOURNE: Twenty-one.

MR. A. REID: Twenty-one communities around the Province that we have put in. Years ago we put in the water system for a particular reason. It could be a fish plant, it could be -

MR. G. REID: That is what it was in Twillingate, a fish plant

MR. A. REID: Basically, the operation of that is still our responsibility. If the town council is using water from that system then they are billed for so many litres per thousand or cents per thousand. We do try to break even on it. I am told that even though it shows a profit of $115,000 there this year, the maintenance on that particular system will far exceed the $115,000 which will mean that we will basically go in the hole on it. We very seldom in any year make money on that. Art Colbourne take it from there. You can pick up from there.

MR. COLBOURNE: We make very little revenue on it, just to break even, and we lose on all the industrial water systems with the exception of Abitibi and Stephenville.

MR. G. REID: What I was wondering, though, is the amount that the individual towns pay towards the maintenance on that. Would it be greater than if they had their own system?

MR. A. REID: Towns don't pay anything towards the maintenance. We charge the towns fifty cents per thousand gallons for selling the water and the department picks up the operating and maintenance costs of the system.

MR. G. REID: Yes, but what the town of Twillingate is paying your department for the water, would it be over and above what they would be paying if they had their own system in Twillingate?

MR. A. REID: I doubt it very much.

MR. G. REID: The other one is on page 275, 3.2.02, Special Assistance Grants.

MR. A. REID: 3.2.02, the $1,516,800.

MR. G. REID: Yes, it has increased by about $700,000 over last year.

MR. A. REID: Yes it is. That is where that money lies that we talked about, the slush fund that I had to help municipalities, okay? That is the slush fund that I said I could use but now you have to deduct this from the slush fund to start with.

MR. J. BYRNE: Has there been any lush fund in the Budget document?

MR. A. REID: The what?

MR. J. BYRNE: I will get into it later.

MR. A. REID: For example, a special grant to cover the department's share for additional equipment needed to provide essential services to new areas resulting from a boundary expansion to the City of St. John's. That is an agreement that was signed in 1985 for $172,800 a year that we give them for that. That was when the town moved to Shea Heights and Kilbride and so on.

Wabana: This is a special grant to the town of Wabana due to the town's difficult financial situation. The original of that goes back - my God, Art that goes back to the 1960s, does it? It is an agreement was reached back in the 1960s, and that is $160,000 this year. No, I am sorry, last year - the original grant authorizes $160,000. We have told them we are going to phase it out over an equal base over the next five years. One hundred and twelve thousand dollars has to come out of that for Wabana, so that leaves basically an uncommitted vote of approximately $1.23 million. I would think that at least $300,000 of that would have to go to the finance committee that looks after small emergencies that occur in municipalities around the Province, little things that amount to $1,000 or $2,000 and $5,000.

I figure that, at the end of the day if there is about $900,000 left in that fund that is all that's there. That is the fund that we referred to in the Budget Speech as being the fund where we could possibly find some money to help municipalities get over a rough time. Now that is not very much money when you stop and think.

All I need this year is to have one community in Central Newfoundland come down with agaric, a beaver fever problem, and $300,000 to $400,000 of that will disappear overnight. That has happened every year in the past three or four years. So we do not have much to work with. Anything else?

MR. G. REID: One final question. I understand that the banks are getting a bit more lenient or looking to do business with towns in the Province which is unusual, and a sort of public private partnership. Where do you see that going?

MR. A. REID: Would John Abbott like to answer that?

MR. G. REID: I think, if I am not mistaken, it is the first time. I know I worked in the Department of Fisheries and the banks would balk sometimes even with a guarantee by the provincial government. It strikes me as a bit strange that they are now coming forward and offering their services to municipalities. It is either they have so much money that they don't know what to do with, or something strange is happening.

MR. ABBOTT: Over the past six weeks or so, we have had some discussions with various towns as they have come forward looking for assistance in terms of municipal capital works. Up until the Budget we were not sure if any dollars were to be allocated even for loan guarantees. So we talked to them about approaching their banks and seeing if they were prepared to support them in undertaking capital works.

At the same time, we had overtures from a couple of banks here in the Province, their senior people who had approached the department inquiring as to what our policies were with respect to them providing assistance, i.e. loans to banks, and we said: Well, we don't have any restrictions per se, but we don't want to get into competing with NMFC in terms of providing loan guarantees. They said: No, in some cases they would like to work with communities in terms of supporting their capital works as well as refinancing some debt that they probably already have. They were looking at rates lower than we could provide through NMFC, as well, without loan guarantees.

That is where it is to date. We have left them to talk to the communities and vice versa, to see where, in fact, this will go. We have been encouraged by the response to date. The banks themselves have programs structured to finance municipalities which, depending on the municipality's ability to manage it's finances and govern itself, will determine the type of loan, loan arrangements and interest rates that they would charge. So we are going to see how this unfolds in the next couple weeks and months.

MR. G. REID: So they are actually offering interest rates lower than we can do at NMFC?

MR. ABBOTT: Yes.

MR. G. REID: What about programs we used to have such as paving in a community where it was 60-40, was it? How would they operate that? What it would mean, I guess, is that the municipality would have to borrow the entire amount now, wouldn't they?

MR. ABBOTT: Well that is the basis on which we have been talking to them at this point, yes.

MR. G. REID: Why would a community want to do that if they can come to the government and get a 60-40?

MR. ABBOTT: Well, I may now pass it back to the minister, but I think we are trying to move away from that type of arrangement where there is automatic either 60-40 or 100 per cent financing for water and sewer. Where the Province cannot afford it, in some cases the towns can and in some cases they can't; and maybe, we will have to stop there.

MR. G. REID: Granted, there are a number of larger towns in the Province that can afford to go it on their own, but what are you going to do with communities that can't?

MR. A. REID: Continue funding them, I guess, at 100 per cent.

It is interesting, I guess, that we are forced, as a government and especially as a department, to look at ways of helping municipalities. For one, I am not satisfied with every year going to CBS, for example, St. John's or wherever it might be, giving them loose change to do work that needs to be done in the cities and towns around the Province. That is what we have been doing since 1949.

We never reach a point. We continue to give dribs and drabs to communities around the Province to do water and sewer and it takes them twenty to twenty-five years to complete the system, and by that time the system is not fit to operate and you are right around the circle again.

So, one of the ideas we are pursuing - and I don't mind saying this here publicly - one of the ideas that we are pursuing is, the $25 million in capital that we have this year, maybe that could be used to generate, to lever some larger funding. So rather than giving capital dollars to municipalities out of that fund, small amounts to this community and that community, maybe we could go to a community and say: Rather than use that on capital funding, maybe you can use that to help finance bigger projects. The City of St. John's, for example, might go in and do the Goulds and Kilbride, that area.

WITNESS: That was the second priority of the department, (inaudible).

MR. A. REID: That is right.

So, in CBS it is the same thing. CBS is out there and it will take $50 million to finish CBS. We, on an average over the past five or six years, have given CBS $1.5 million to $2 million a year except for the last two years under the infrastructure program. Now, at $2 million a year, it is going to take us twenty-five years to finish the system in CBS. It will take us more than twenty-five because if that is based on this year's $2 million. Twenty-five years from now, that $2 million will be worth about $500,000, so it is going to take us maybe 100 years to finish the job. So why do it on that basis?

What we are suggesting - and I don't know at this point in time whether or not government will accept it, because at the end of the day in certain areas of the Province the government is going to have to provide a guarantee for the money, and a guarantee is basically the same as giving money to a community anyway. So there are pros and cons to everything, and we are weighing that out now. Maybe I might be able to convince my colleagues in Cabinet that at least if we tried one test case this year and we saw that it was working, then we may be able to get into more private-public partnerships around the Province, and that way be able to get more work done.

CHAIR: Thank you very much, Minister.

We will move on now to Mr. Jack Byrne.

MR. J. BYRNE: My colleague would like to ask another couple of questions, so I'm going to give him a few minutes.

CHAIR: Just a minute now. You wanted to do this.

MR. J. BYRNE: Do what?

CHAIR: You wanted an opportunity to ask questions. I'm giving you the opportunity to ask questions. We stopped Ed, we went to Gerry. Now we will go to you, Mr. Byrne, and then we can go (inaudible) -

MR. J. BYRNE: Is his time up?

CHAIR: Yes.

MR. J. BYRNE: Okay.

CHAIR: I wouldn't have called it if his time wasn't up. You are the one who said his time was up, and I agreed, but he was only a minute or so. Anyway, let's get to you.

MR. J. BYRNE: Alright. I'm going to be like the Chinese now, start at the back of the book and go forward.

The Newfoundland and Labrador Housing Corporation: When I looked at this when reviewing the Estimates, I made a couple of comments. One, of course, was that it was obvious to me that - the question would be: Is any part of this being privatized? When we saw such a dramatic decrease in the Grants and Subsidies, I had a note here: Explain what services would be cut. Overall, though, with respect to this breakdown, I'm asking: Can we get a better breakdown, or a more detailed breakdown, for the Newfoundland and Labrador Housing Corporation? I mean, you are really not telling us anything here.

MR. A. REID: I can certainly provide you with the departmental (inaudible) last year's, I guess.

WITNESS: We have last year's annual report here. We can provide that at the end of the evening. We have enough for everybody.

MR. A. REID: Yes, that isn't a problem, Jack. I can give you all of that.

Jack, let me answer you. You made a comment about a cut. That really wasn't a cut. Let me tell you why it was. I gave it up.

MR. J. BYRNE: Pardon?

MR. A. REID: I basically gave it up. It wasn't something that the government dictated to us. I went in under the advisement of the Chairman of the Housing Corporation. I knew exactly how much we had out there that we could probably generate this year in revenues. Being squeezed like we were, we had to find every possible cent in every budget that we could find. I knew when I went to the table that I could give up x number of dollars from the Housing Corporation. It wasn't a question of us being squeezed out of it; it was money that the Housing Corporation itself gave up to the government this year.

MR. J. BYRNE: Well, that leads me to the next question. What would be the profits for Newfoundland and Labrador Housing for last year?

MR. A. REID: The profits? Gee, that is a heavy question. The overall profits?

MR. J. BYRNE: Yes.

MR. NOSEWORTHY: The grant last year was somewhere in the order of $15.2 million. I guess when you refer to profits from the Housing Corporation, while a portion of our revenue is derived from profits, the minister referred to the fact that, for example, this year we would be receiving $8.2 million, or 7 per cent, of our budget from the Province. I would just like to clarify that of the rest, I guess, 42 per cent of that comes from the federal government in terms of cost-sharing of our social housing programs. In other words, they provide 75 per cent of the cost-sharing for social housing in the Province.

MR. J. BYRNE: Seventy-five per cent of what figure?

MR. NOSEWORTHY: That would be 42 per cent of $123 million.

MR. J. BYRNE: See, that is what we don't have here, that is why I asked. I can't really ask questions with respect to Newfoundland and Labrador Housing Corporation because I don't have the information we had last year.

MR. NOSEWORTHY: We can provide all that, Minister. I guess you had some opening remarks which really covered a lot of the detail of this which you haven't had the opportunity to deliver yet. Indeed, we can provide the detail. It is in our annual report, and we would have no problem in providing you with the detailed breakdown as to what we spend on social housing, what we spend on land development and what we spend on our various activities. That isn't a problem.

MR. J. BYRNE: Where your revenues come from and where your expenditures go, that is what I would like to have.

MR. NOSEWORTHY: Sure.

MR. A. REID: I had a short presentation to make on the Housing Corporation, and my hon. friend and colleague over there asked the first question on housing and we sort of skipped it. What I had planned to do was to do Municipal Affairs and then do Housing.

MR. J. BYRNE: I see. Can you give me a copy of that?

MR. A. REID: I have this statement, and mostly all of the figures are available in this.

MR. J. BYRNE: Fine.

MR. A. REID: So what I can do is to make this available to Elizabeth and she can pass it out to you.

MR. J. BYRNE: Fine. Good.

MR. A. REID: There are a lot of figures in this. Then if you have any other questions, I have no problem with providing any of the information you ask for on the Housing Corporation, none whatsoever.

MR. J. BYRNE: You mentioned revenue of $120 million. Mr. Reid got on to this, I believe, with respect to, it is kind of a contradiction to be selling off the revenue generating residences or buildings or whatever the case may be. Again the Newfoundland Hydro situation, I suppose, why would you be selling of something that is turning over good bucks for the government. I know private industry has been putting pressure on Newfoundland and Labrador Housing not to be competing with the land developments. I suppose, that is where a fair chunk of the bucks come from with respect to housing; the revenues. Correct?

MR. A. REID: Yes, but you have been misled somewhat. I do not know if I misled you or not. In what we are selling off, what we are selling off does not necessarily mean that those properties are providing profit for us. We own Elizabeth Towers, for example. We lose money on Elizabeth Towers? We own Churchill Square. We break even, if I am not mistaken, or close to it.

MR. NOSEWORTHY: We make a small profit, Mr. Minister, on Elizabeth Towers, but it is a small profit.

MR. A. REID: How much, $30,000 or $40,000 last year or something like that?

MR. NOSEWORTHY: Something in the order of $100,000.

MR. A. REID: Okay. So there are properties we have that we do not make profits on. These properties that we are talking about selling off are not basically properties that bring us in large amounts of money, in regards to revenue. It is not those properties that bring the revenue in.

Bob, do you want to take it from there?

MR. NOSEWORTHY: I will. If I may clarify, the involvement of the Housing Corporation, I guess, covers a number of areas. One is our social housing. Indeed our social housing is cost-shared with the Federal Government and there is no intent of selling our social housing portfolio. That is not up for consideration at all.

MR. J. BYRNE: No, I know.

MR. NOSEWORTHY: The second avenue of rental housing that we have is the market rental portfolio and that is the Elizabeth Towers, the Churchill Square, the Pleasantville. We used to have units in Stephenville, Goose Bay, et cetera, et cetera. Some years ago the government decided that basically these are market rental units, they are competing with the private sector and there is absolutely no role for the Housing Corporation in that area to be competing with the private sector. We serve no useful purpose in that business.

So since that point in time, we have been selling off those units at a profit. In other words the profit is generated from the sale of the units much more than it is from the annual operating of the units. In other words, if we sell something like Churchill Square we stand to make $2 million versus perhaps $100,000 a year in the operating. So indeed the profits are made in the sense of the selling market rental units, in terms of the actual sale of the units themselves.

With regard to land development, we do make profits in terms of the selling of serviced land and indeed that is an ongoing annual profit that we generate each year, be it Southlands, be it Mount Pearl, be it land in Corner Brook et cetera, et cetera. As the minister pointed out earlier, the government is reviewing our role in terms of land development and they will make a decision on that, presumably, in due course.

MR. J. BYRNE: Thank you. You just hit on something that I made a note of here, and that is with respect to buildings like Churchill Square, Elizabeth Towers and what have you; you are planning on selling them off.

MR. NOSEWORTHY: Yes.

MR. J. BYRNE: And making - you just used the figure of $2 million. I am looking at the short-term versus the long-term here now. I mean, if you kept those buildings wouldn't you make more money in the long haul, rather than just selling them off. The same thing with the South Coast ferry, selling that off and spending the money. You know, it is going to cost you money in the long haul.

I know it is a decision for government, but to me it really does not make sense.

MR. A. REID: Well, I am not surprised you said that, Jack, to be honest about it, because to some degree I feel the same way.

MR. J. BYRNE: Well why would you do it?

MR. A. REID: I am doing it, number one, because I basically think the Housing Corporation should not be competing directly with the private sector. Now, I don't think land assembly is competing directly with the private sector. There is a difference in my philosophy as it relates to, say, Southlands. I don't think the government should be out renting apartment buildings to people living in St. John's at special market value rentals. I don't think we should be in the market. We are not in a market, we are competing against the private sector and we shouldn't be at it.

There are lots of things in government, of course, that we are competing in and we shouldn't be in. The Liquor Corporation is another one that I believe we should unload and unload immediately. I may have gone too far in saying that, but I feel that way. If there is some way that the private sector can own and operate and generate jobs and revenue for the Province, I would prefer the private sector do it than the government be into it.

You are asking the question: Why are we doing it. Basically the philosophy of government, which I agree with, is that we shouldn't be out there competing in the private sector with things like market rental housing units. When it comes to social units, yes, there is absolutely nothing we can do about that. We have to do that. That is part of our mandate, I think, part of any government's mandate, but not to be out competing with a place like Elizabeth Towers, for example, when there are condos around the city vacant with no one to go into them.

MR. J. BYRNE: Another question with respect to the block funding coming from the federal government, what is being proposed. Central Mortgage and Housing now are basically responsible in St. John's for a number of co-op groups.

MR. A. REID: Yes.

MR. J. BYRNE: There was some discussion, I believe, with Newfoundland and Labrador Housing that Newfoundland and Labrador Housing would take responsibility for those co-ops, I suppose. What is the status on that now?

MR. A. REID: The co-op groups in the city will have the same opportunity as the private sector to negotiate with us when and if we decide at a particular time that those units will go on the market.

MR. J. BYRNE: Has Newfoundland and Labrador Housing come to an agreement with CMHC to take responsibility for those units? Have they actually passed it on to them?

MR. A. REID: No. There have been no negotiations whatsoever conducted as of yet. The only thing that has happened yet with regards to CMHC's - what's the word - downloading on the Province is basically preliminary, between officials only, at this point in time. There haven't been any decisions reached, ad I don't know, quite honestly - I'm hoping to meet with the minister, Diane Marleau, some time in June to discuss the proposal. I honestly don't know at this point in time when and if CMHC will be ready to pass their properties over to the Province, and I don't know if the Province will take them.

MR. J. BYRNE: Leading into that response, you mentioned that the co-op would have the same opportunity as people in the units that Newfoundland and Labrador Housing own.

MR. A. REID: Yes.

MR. J. BYRNE: So, is that the case or not?

MR. A. REID: That will be the case if we take over federal housing. If we take over federal housing, I'm assuming that we will maintain and operate the federal housing stock under the same guidelines as we maintain and operate our own stock; and our own stock is up for sale right now in a lot of those cases.

MR. J. BYRNE: Very good.

CHAIR: Okay. Do you want to change up?

MR. J. BYRNE: Pardon? Did you say finish up?

CHAIR: Change up.

MR. J. BYRNE: It is up to you. I have a lot of questions.

CHAIR: Fine.

MR. J. BYRNE: But with respect to Newfoundland and Labrador Housing, unless these individuals here have questions for them I'm finished.

MR. G. REID: The social housing that the feds participate in, what percentage do they pay into the social housing thing?

MR. NOSEWORTHY: They pay 75 per cent basically of the costs of operating social housing. For the 10,000 units in the Province plus a subsidized mortgage and loan portfolio, next year that will amount to in the order of $93 million.

MR. G. REID: So if we increase the number of social housing units by 2,000, would we get extra money for those 2,000; from the federal government, I mean?

MR. NOSEWORTHY: The portfolio that CMHC administers in the Province is somewhere in the order of 4,000. That portfolio has a myriad of financial arrangements associated with it. What the federal government has said is: We are prepared to transfer the financing to those units over to the Province but we will not be putting any more in over the next few years and you will have to administer it on that basis essentially.

MR. A. REID: Mr. Reid, I don't know if you realize it or not but CMHC is involved in a multitude of things like senior citizens' homes for example, the Pratt Home here in St. John's, the Interfaith Home in Carbonear, a number of the seniors' complexes around Province that are all operated by individual groups like the Legion, senior citizens' groups and different things. They provide -

WITNESS: (Inaudible).

MR. A. REID: Yes, the Masonic Park and there are a number of them. CMHC is involved in a number of those in providing really low interest rates for mortgages. There are mortgages for those buildings with CMHC and that is part of the stock as well.

So, you are not only looking at social housing here as far as CMHC is concerned, you are looking at a whole mass of properties stretching from one end of this Province to the other.

MR. G. REID: No, what I was getting at for social housing, say social assistance recipients who have houses that are supplied by the housing corporation, on an individual house does the federal government pay a percentage, like 75 per cent?

MR. A. REID: Seventy-five per cent.

MR. G. REID: Well, wouldn't it be to our benefit to have more of those if the federal government were paying 75 per cent of them?

MR. A. REID: Oh definitely, but the federal government is not providing any money for any new housing.

MR. G. REID: Yes, well that is what I was asking, they are not going to pay -

MR. A. REID: No.

MR. G. REID: So where do the profits that you get from the sale of lands, like Southlands, go?

MR. A. REID: It goes back into the Budget to help offset cuts from the provincial government that we have had this year and last year. That is basically where they go.

I am almost thinking, you know, and I suppose we won't reach a point now, but we may, it may work out that the Government of Newfoundland and Labrador won't have to put very much money at all into housing; it may become self-sufficient. Bob does not think that but I think it could. If you played with the figures enough and you had enough assets to sell over the next ten or fifteen years, it may become self-sufficient. You are down to $8 million now and when you stop to think about it, $8 million it is not very much. Also, when you say 75 per cent of social housing, every single employee who is involved with social housing in Newfoundland and Labrador, their salaries are being paid from that 75 per cent. The Chairman of the housing corporation, CMHC is paying 60 per cent of his salary.

MR. G. REID: We need to get more employees like him.

MR. A. REID: It is a good way of doing it. So if you think about what I was saying to you, it is very important that we keep the level of funding as high as we can for this year, because, if the feds come back and say, we are going to take a base year, well the higher the amount of funding money we have in the housing corporation, the more money they feds will have to give us. That is why I am saying there is really no cut to the housing corporation's budget. We have to find that $5 million somewhere and we will find it.

WITNESS: Minister we are not supposed to tell the (inaudible).

MR. A. REID: No, I don't want that to be published. We are not supposed to tell them that.

CHAIR: Okay, Gerry -

MR. G. REID: I am finished.

CHAIR: You are finished? Okay. Do you want to go back to Mr. Ed. Byrne? I did not mention it, but we are going to break at 8:30.

MR. A. REID: You will have it all finished by that time, won't you Jack?

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

I would like to pursue an issue that one of the Reid brothers from the District of Twillingate brought up in terms of the notion of public/private partnerships. The minister and I have had at least one, maybe two, conversations on this issue. I know in the district I represent, part of the City of St. John's, it probably has the most acute problems when it comes to municipal infrastructure, at least as great, maybe even greater, than the problems that exist in CBS.

Do you see it going, Minister, do you see this notion of private/public partnership really moving ahead and getting to a point where it can work? I know from the estimates from the City of St. John's that the degree of the problem in the area of the city that I represent is about $57 million. Private sector estimates are about $10 to $12 million less than that, that we have had done. I think it is not a new or novel idea but it is an idea that has come for municipalities that can afford to enter into such arrangements, because it does a couple of things. It provides the service, which is what the taxpayers want ultimately. They want the service based on, of course, as long as the city can approve it and that the government are prepared to enter into a long term arrangement, whether that be over a period of fifteen, twenty, twenty-five years or whatever the case may be, and it provides the service for the people who want it and who are demanding it.

I think, secondly, it gets the work done in an expeditious manner, as you indicated, where it does not take twenty-five years, and by the time we get it done we have to revisit and start again. A third option related to this, I think, is the amount of economic activity generated and the amount of jobs generated.

My question, therefore, to you is: You mentioned something about testing one site this year, do you see this idea taking off in other areas?

MR. A. REID: Let me just give you a little background. You probably know this already. We don't have any control over capital funding in the City of St. John's as it relates to water and sewer.

MR. E. BYRNE: No, I understand that.

MR. A. REID: They do it on their own. They raise their own capital for it.

The City Council of St. John's has to have the will themselves to spend those kinds of dollars in the area that you referred to. They have to have the will. But in saying that, the City of St. John's has set for itself a goal of 17.5 per cent of debt servicing. That is 17.5 per cent of the total annual budget goes toward debt service and once they reach that amount they stop, they won't borrow any more. It is good prudent management, basically. I suppose in your particular case, and in some other cases in the city that have arisen in the last few years, maybe if they wanted to go beyond that on a special deal by going to the private sector to have this done and have it financed over a period of years and come back to the Province - now remember I said we don't give them any money for water and sewer, they borrow it and they do it 100 per cent on their own. As a Province we could look at the possibility of assisting them with anything over the 17.5 per cent of debt servicing.

MR. E. BYRNE: Got you.

MR. A. REID: If they came in to us and said, `Look, we would like to finish the Goulds this year or whatever, what would you contribute to it,' well I would have to go back to Cabinet and say: Look, in order to get this work done this year the council needs a guarantee from us of so much money towards the debt servicing for the next fifteen years or ten years. Now I would do that, I suppose. Whether I could get that or not would be another question.

We spoke to the mayor the other day about it and John, the deputy minister, is having meetings with the staff at city council. To be quite honest about it, we are trying to encourage them to do some extra work this year than they normally had planned to do. When I say extra work I mean work in the - we basically mentioned the Goulds and the Kilbride area to them and we would like to see something done in there. I will give Mayor Murphy the credit here too, he did say to me that if there was going to be any money available this year from the Province, he asked for me to assign it to Kilbride.

MR. E. BYRNE: As I did.

MR. A. REID: As you did, and I have no problems in doing that. I don't know how the council will feel about that but he - and that was a personal comment, he was not speaking on behalf of council. His personal comment was that we need to do some work in Kilbride, we need to do it in a hurry and we need to do a lot of work and whatever money you have for me this year direct it towards Kilbride.

Maybe it is a question of city council having to look at their debt servicing of 17.5 per cent and going out and making some special arrangements to have a particular project like Kilbride done that maybe, John, at the end of the day we might be able to assist them with. Notice I say, `might.' I am certainly sure that there are a lot of banks out there who would love to have the opportunity to do business with the City of St. John's.

I don't know if that answers your question or not, but I am hoping that we can at least get one or two projects this year.

MR. E. BYRNE: We will leave it there for now. I appreciate your response.

MR. A. REID: It is difficult for me, knowing that out of 278 communities in the Province, 200 of those communities are now paying $340 per household towards their debt, and the City of St. John's is paying sixty or sixty-seven dollars. We can pat them on the back for that because it basically means that they are great financiers. It is difficult then for me, when I get a miserable $25 million, to have to take out of that $25 million, boys, $4 million, $5 million or $10 million and give it to St. John's, when I know there are other communities out there that are starving, you know. Do you follow what I am saying?

AN HON. MEMBER: Right, I understand.

MR. G. REID: How do you determine what you give -

CHAIR: Order, please!

Are you finished?

MR. E. BYRNE: Yes, I am finished, Mr. Chairman. I am prepared to let Gerry speak.

CHAIR: Okay.

MR. G. REID: How do you determine how much St. John's gets? For example, you said they raise their own money for water and sewer projects? I mean, obviously they are not paying it all themselves. In other areas of the Province they are getting help from government.

MR. A. REID: No, no. St. John's does not get any help from government for water and sewer, not one cent. Am I correct?

AN HON. MEMBER: (Inaudible).

MR. A. REID: Yes. The only monies that the City of St. John's get from government, up to this point, has been 60/40 cost-sharing on (inaudible).

MR. G. REID: Like the employees of the Housing Corporation we need more towns like St. John's, I guess, eh?

MR. A. REID: I guess we do. That is the reason why they have got the tax base and nobody else has, I guess.

AN HON. MEMBER: Are we taking a break now?

CHAIR: Well we can. Do you want to go for nine minutes, Jack?

MR. J. BYRNE: Take a break now.

CHAIR: Well, okay, we will take a break and be back here at 8:40 p.m. We will break for a few minutes.

 

Recess

 

CHAIR: Okay, everyone, I guess it is time to get started again. I would appreciate it if, when we start off this time, we just have one individual from the committee speaking. The recorder finds it a bit difficult when he tries to go hopping all over the place trying to put words in, and it is important that we get this recorded. Maybe the answers can be a little bit shorter too. It would be a great help because the longer the answer then the longer it is going to take to get this done.

So okay, Mr. Byrne, you're on.

MR. J. BYRNE: Thank you.

Before I get into the estimates for municipal affairs themselves, I would like to address a statement earlier, a circular to municipalities from yourself, with respect to real property assessments. When I was going through the estimates I had a question mark along side the estimates: When would this be privatized? I was expecting it to come.

On the second page, under Real Property Assessments, five sentences down: The current fee for real property assessments is .0002 or two-tenths of one mil times the total taxable value of the assessment role of each municipality. Would this be the same in all areas of the Province, this breakdown?

MR. A. REID: With the exception of St. John's.

MR. J. BYRNE: With the exception of St. John's. So is that an average or is it the same?

MR. A. REID: It is the same for each municipality.

MR. J. BYRNE: If you take, say, the town of Logy Bay - Middle Cove - Outer Cove, with which I am most familiar, Torbay or whatever the case may be, they are paying $6,000 or $7,000 per year, I think, or it used to be, for their assessment.

MR. A. REID: Yes, two-tenths of one mil times their total assessment. Their total assessment could be $15 million for example, for everything in their community.

MR. J. BYRNE: That's the way it is charged out?

MR. A. REID: Yes, that's business and residential.

MR. J. BYRNE: By going to private assessment - because I remember asking questions in the House before about this and this seems to be a complete reversal of your stand in previous times when questions were asked. If this is privatized, the municipalities will hire private assessors to come in, because I checked this out myself. I went and asked appraisers how much would it cost to go in and do, say, 600 properties in a town such as blah, blah, blah. How much of an increase would you see this go to for the municipalities?

MR. A. REID: If it was privatized outright?

MR. J. BYRNE: Which it is going to be by the year 2000.

MR. A. REID: If there was not some government control over it a large number of municipalities would not do assessments, a large number. I would be guessing, but I would say that only the more affluent municipalities, the municipalities with populations of 3,500 to 5,000, up to the City of St. John's, would probably do an assessment every four or five years. You have to remember too that if they were paying for it privately themselves, then if they were in hard times like they are in now, the last thing that they would budget for would be $100,000 to have a property assessment done. So there would be a large number of communities in the Province that would not get -

MR. J. BYRNE: So basically the smaller towns will have to resort to - okay, we have 500 homes in the town and the town council will probably make a decision that it is 500 times x number of dollars and that's it?

MR. A. REID: Yes.

MR. J. BYRNE: To cover the services?

MR. A. REID: Yes.

MR. J. BYRNE: Under Municipal Capital Works in the same document: Government will continue to fund the Canada-Newfoundland Construction Program under which approximately $40 million will be spent in this current fiscal year. Now I have not gotten to the estimates yet. That $40 million, how much of that is allotted now?

MR. A. REID: That's all allotted.

MR. J. BYRNE: That's all allotted? I remember a figure of $21 million being in the estimates: Is that new monies to be spent?

MR. A. REID: No, no. The $21 million in the estimates is to retire debt. That is not money at all; that is only just money that we would have to put in to service the debt, not the $21 million.

MR. J. BYRNE: Well, I will probably pick up on that when I am going through.

MR. A. REID: Yes, you will pick up on that after. The $21 million that is there will be our share this year to service the $128 million that we put out in infrastructure altogether.

MR. J. BYRNE: In the next paragraph you say that basically the 100 per cent of this cost obligation for water and sewer, as well as road paving and reconstruction projects, NMFC: Is that what the boys picked up on earlier, with respect to the private-public funding for water and sewer projects?

MR. A. REID: No, not necessarily. There are thirty-one communities in the Province now, approximately thirty-one, isn't it?

WITNESS: Thirty-five.

MR. A. REID: Thirty-five? There are thirty-five communities in the Province right now which pay their own way anyway. Basically, they come in to me with their five-year plan and say: Mr. Reid, we would like to do water and sewer in the community this year. That is the way it has been since I have been minister and long before that. Basically, if they do that, then all we say to them is: Yes, go ahead and do it, you can do it. Now that is extra money. That is like the Corner Brooks of the world, St. John's, the Stephenvilles, the Labrador Cities, the Goose Bays and those people, who are not up to the $340 per household.

MR. J. BYRNE: The $25 million in the next one is (inaudible).

MR. A. REID: That is the capital program for this year.

MR. J. BYRNE: The last paragraph: I am confident that, in spite of these reductions, mayors and councillors will continue to work in the best interests - I don't know if someone mentioned this earlier, but I remember when I was mayor, and this was over three years ago now, and I was to the point where I was not going to run again for council because of the downloading and the impact that the downloading was having on municipalities; and we had probably one of the better-run towns, better financially-run towns around, I suppose. Would be harder to get people to run for councils, do you think, because of this; and/or councils resigning?

MR. A. REID: Well, believe it or not, we are finding the opposite of what you are saying, and it is surprising to me too.

MR. J. BYRNE: Don't compare Mount Pearl now.

MR. A. REID: No, no. We are finding, basically, the opposite around the Province, if vacancies become available in communities. Now, there are a number of communities you know you are going to have trouble with anyway. We still have tens and tens of communities out there which do not have their full slate of councillors. You will never, for some reason or other, get them.

Believe it or not, if you look at the more affluent communities, the larger communities especially around the Province, and in a number of cases the smaller ones - for example, on Fogo Island when we put the regional council there, you would be surprised at the interest that was in that, which is unbelievable. The Federation of Municipalities brings up the same argument to me and I think they have realized now that, basically, whatever it is about the nature of Newfoundlanders, the tougher it gets and the more complex things get, the more determined Newfoundlanders become. Now, I know that is a general statement, Jack, but that is what is happening. People around the Province are realizing that we are going through rough times and they have accepted the fact that the federal government has to make cuts to balance the budget and the provincial government has to make cuts to balance the budget. Municipalities are accepting it too, so I don't agree with you. We will see next year, in September, the number of people who will be offering themselves. If the time before is any indication, it will be up again like it was last time.

MR. J. BYRNE: Well, according to that then, how tough are you going to make it?

MR. A. REID: Well Jack, in making it tough, I agree - you have to give me a little bit of credit, I suppose, for the fact that I served as Mayor of Carbonear for seven-and-a-half years and I was President of the Federation. I do have, maybe, a better feeling for municipalities than most of my colleagues around the Cabinet table, I think, because of my experience. You know that it hurts me to cut municipalities. I am cutting my own communities here too, Jack. I am cutting Carbonear, Harbour Grace, Victoria and Saddle Cove, places where I have to live on a daily basis and it is difficult for me to do it.

In saying that, John and I have offered all kinds of opportunities to councils. We are not going to see any councils in the Province to the point where they are going to have to resign because of financial difficulties. We will find some way or another to assist that community so that at least they can maintain the services that they have. That is basically the same philosophy that this government took and the previous government took.

When we looked at Baie Verte there a couple of years ago, for example, last year, we had to come up, at the end of the day, with a grant for Baie Verte to keep them alive, and we did it and we will have to do the same thing again. So don't assume that we are the nasty beast that we are sometimes accused of being, because at the end of the day we are not going to allow communities, after we see and assess what is going on there, to disappear or die because the council resigns over the financial difficulties they are in.

MR. J. BYRNE: With respect to that document - and I have been preaching this for awhile now actually, and a lot of the questions I ask lean that way. With the cuts that have been coming down, with downloading to the municipalities, of course, back in probably 1988-1989, the previous minister, Gullage, talked about amalgamation. I see a lot of the government policies basically geared to nineteen regional counties or regional governments in line with the nineteen regional economic zones. You mentioned earlier this evening that I think you are going to start promoting that yourself in your own area?

MR. A. REID: Yes.

MR. J. BYRNE: The bottom line is, that is what we are facing from the government's point of view?

MR. A. REID: Well, no, because I don't believe that we can create nineteen regional councils like the nineteen economic zones. I don't think a regional council will ever work. In Mr. Andersen's district, for example, I don't think it will work in the southern part of Labrador. I don't think it will work on the South Coast of Newfoundland. There are going to be large tracts of land in the Province, and towns in the Province, that will not be able to avail of any services or any good from a regional council. So, no, I don't profess or I don't agree with you when you say that we are going to go with nineteen zones. It might end up being thirty zones; I don't know. There are areas where you cannot do it, Jack.

That is another avenue where we believe, as a department and as a government, we can provide more help to those municipalities that are finding it tough.

The other thing, the bottom line too, Mr. Byrne, is that there is an outcry out there in the Province right now from incorporated municipalities, from the Federation of Municipalities and from a lot of other organizations, asking why it is that local service districts and non-incorporated communities can be provided services in this Province for little or no cost to them and people living in incorporated areas have to pay large sums of taxes. I will be honest and say to you that the plan of the government, in regards to regional government, would be to encompass the whole area, non-incorporated, incorporated, local service districts, under one guise; and one taxing authority for those non-incorporated communities would then be the regional council.

MR. J. BYRNE: Yes. Well, I understand where you are coming from with respect to that. Even when the amalgamation issue was underway, it was not handled properly at that point in time. What needed to be done, I thought, was to show the municipalities and the people in the municipalities the benefits and/or the pros and cons with respect to coming together, and it was never done.

MR. A. REID: I agree, yes.

MR. J. BYRNE: It was a forced issue that was trying to be forced and people got their backs up.

Anyway, I will continue on with some of the questions because we can talk about that all night, the philosophical end of it.

Page 267, Municipal and Provincial Affairs: Some of the questions have already been hit on by previous committee members. Under the Minister's Office, Section 1.1.01.06, Purchased Services, you have $16,000 there up from $3,700. What was that spent on?

MR. A. REID: I haven't the foggiest idea. Do you know Art?

MR. COLBOURNE: Entertainment.

MR. A. REID: My expenses, basically: Entertainment, travel and a number of things that I did during the year.

MR. J. BYRNE: Yes, please.

MR. A. REID: Okay.

MR. J. BYRNE: Next section, Executive Support, 1.2.01.

MR. A. REID: Jack, let me tell you where a lot of that was from. I'm just trying to remember. It was going out and meeting regional councils and different things, and holding meetings around the Province. A lot of that is in that there. And the Federation of Municipalities.

MR. J. BYRNE: Why wouldn't that have been budgeted for now?

MR. A. REID: There would be no reason to budget for it, not under mine. Those are my own personal expenses. That is like going out and having a meeting in your district with a council and taking them to lunch or something, basically.

MR. J. BYRNE: Yes.

MR. A. REID: Right.

MR. J. BYRNE: But you would think you would budget for that. You budgeted $3,700 and it is back to $3,700 this year.

MR. A. REID: Well, I'm not allowed to spend it this year. You will find that over here too, Jack, on page 276, 3.2.03. There is $100,000 in there to assist municipalities right now under the regionalization concept. We have put that in there. That money will be used this year to encourage regional councils to get involved in regionalization. Used well, yes.

MR. J. BYRNE: I had that highlighted. I was going to ask you a question on that.

MR. A. REID: That is what it is for. That will cover off - on Fogo Island, for example, this year we had to provide - what was the grant we provided to them?

WITNESS: (Inaudible).

MR. A. REID: How much?

WITNESS: Twenty-eight thousand dollars.

MR. A. REID: Twenty-eight thousand dollars. We gave an outright grant to Fogo Island regional council to hire a town clerk or whatever you want to call it, and some transition operating money.

MR. J. BYRNE: You only spent $6,000.

MR. A. REID: No, no. Where did it come from, Art, then? It came from what vote, that $28,000?

MR. COLBOURNE: Special Assistance.

MR. A. REID: Special Assistance, okay? In that $16,000 there is a mess of stuff like entertainment, meetings and different things like that. I can provide that, that is not a problem.

MR. J. BYRNE: General Administration, Executive Support, Supplies, $6,200 up from $2,200: What would that have been spent on, $4,000?

MR. A. REID: Can you tell me what that is? What is that in particular?

WITNESS: (Inaudible) description of it there.

MR. A. REID: Where is it? Provided for the purchase of books and subscriptions as well as other miscellaneous supplies not available from the Government Supply Centre. We did go up, didn't we? But it was cut, was it? Where are we, which one is it? We had $2,200 allotted and we spent $6,200.

MR. J. BYRNE: Thank you. Next page, Administrative Support, 1.2.02.

MR. A. REID: Provides for the purchase of books and subscriptions as well as other miscellaneous supplies not available from the Government Service Centre.

CHAIR: Minister, we have gone on now to -

MR. A. REID: What is the next one?

MR. J. BYRNE: Administrative Support. I heard the answer, by the way.

MR. A. REID: Yes, okay.

MR. J. BYRNE: Administrative Support, item 1.2.02.02, Employee Benefits, $78,600, down to $34,400 and back up to $78,600: Why would that be the case?

MR. A. REID: Give us a minute now and we will tell you. Provides for registration at seminars, conferences related to the responsibility of general administration division. Funding is also included here for payments to Workers' Compensation Commission for reimbursement of the costs associated with work-related injuries. So what are we saying here? Are we saying that we had more costs this year than we did last year?

MR. J. BYRNE: You had less (inaudible) -

MR. A. REID: Yes, Workers' Compensation is included in that, so we have it in. I don't know what the reason was that we only spent $34,400, John, just the same.

MR. ABBOTT: The difference there would be contingency in the case of Workers' Comp.

MR. A. REID: Okay, so we may end up with $34,000 again this year.

MR. ABBOTT: Yes.

MR. A. REID: Okay. The year before last we budgeted $78,600, last year it came in for $34,400 and we went back to $78,600 again. It will probably come in for $34,400 again.

MR. J. BYRNE: Why I ask these questions is I picked it up with other departments. I mean, we saw a lot of people being laid off. If you only spent $34,400 last year and you expect that you might only spend $34,400 this year, I mean that is a job or a job-and-a-half I am sure, within the civil service that may have been saved. I see this in a lot of the estimates.

MR. ABBOTT: If I may, Minister. The difference there is in what we will have basically as a contingency in the event that we have any of our employees who have to go on workers' comp. or what have you. So, that would be largely the difference there.

MR. J. BYRNE: Okay. Under section 1.2.02.04, Supplies $59,900 up from $54,900: That is an extra $5,000.

MR. ABBOTT: Yes, if I may, that represents purchase of Supplies for what we call our Administrative Support Division. We have added some staff there because we provide services to the Government Services and Lands Department, Government Service Centre last year. Now that it is a full department we have cut back significantly on that, as you can see, for this year. It just represents routine purchases for the department.

MR. J. BYRNE: Subsection 1.2.02.07, you had $33,600 budgeted and you spent $43,600. I ask the question: Why? I assume it would be for the Government Services that you took over last year, but I heard that same explanation from Work, Services and Transportation, that they were spending money on Property, Furnishings and Equipment for those areas.

MR. A. REID: Works, Services and Transportation would not be spending money on Furnishings and Equipment for those areas. They would be spending money on leasing space, but they don't provide you with Furnishings and Equipment.

MR. J. BYRNE: Well, Property, Furnishings and Equipment.

MR. A. REID: We will provide the details, Jack, but I think, to be honest about it, you are going t find out that a lot of this, even mine over in Purchased Services, is related to that other department that I had. It has thrown everything out of whack this year, everything.

MR. J. BYRNE: Yes, because some of the estimates - I am not sure which department - were impossible to follow, really. Government Services and Lands, you couldn't really do a comparison.

MR. A. REID: No, because we only had them for less than a year you see. If you had had them for a full year, it would have made all the difference in the world.

MR. J. BYRNE: Yes, but even with certain sections within Government Services and Lands transferred over from other departments, you should see in that section what was spent last year and what is going to be spent this year. You should be able to make comparisons, but we could not do it.

MR. A. REID: No, I know what you are saying. I agree with you.

MR. J. BYRNE: Yes. Under Administration, 2.1.01.01, Salaries - I won't bother with that one. Purchased Services, 2.1.01.06, $242,300 - we already did that one so we won't hit on that one again. Section 2.1.02, Assessment Services: "Appropriations provide for the implementation of property assessment services for municipalities in the Province." I have a note here: Privatize, when that would be happening. We already have the answer to that.

MR. A. REID: Yes.

MR. J. BYRNE: I ask a question of the Minister of Government Services and Lands the other day with respect to assessments on Crown land, and he mentioned that Municipal and Provincial Affairs would be doing those assessments.

MR. A. REID: I think there was a misconception; I am not sure. Somebody quoted me your comment today and my immediate reaction to it was that there was some sort of a misunderstanding between your question that you asked the minister and his answer. Crown lands assessment within a municipality would probably be provided based on the assessment done by my people in my department.

MR. J. BYRNE: Yes.

MR. A. REID: There is no way that my assessment people are going to go out in Central Newfoundland and go into the interior and do an assessment. We cannot do it. It is impossible for us to do it. So I do not know what the question was, but when I heard what you had said, I said: There is some misunderstanding between both gentlemen here because there is definitely something missing.

MR. J. BYRNE: My question was quite clear, and that was: Would the $390,000, whatever, extra be for assessments or would assessments be privatized and the applicant be responsible to hire an appraiser to do an assessment? He said: No, Municipal Affairs will be doing the assessments for us. I do not think he clearly understands himself, because I was talking to him again today and he was saying that he has ten people who will be hired for $39,000 a year. He thinks - and I do not know if he should be responding to this - but he believes that those ten individuals will be actually taking applications over the counter - what do you call it - a Crown land administrator type of thing, just taking applications and processing applications. Assessments have to be done.

Also, the point that you made with respect to going out to Central Newfoundland or going out to Ocean Pond or Terra Nova somewhere doing assessments, I mean they are going to have to be done or they cannot come up with the assessed value of 20 per cent. You are saying now, Municipal Affairs will not be doing the assessments?

MR. A. REID: No, and I think there is still a distinction here that has to be made.

MR. J. BYRNE: Oh, there definitely is.

MR. A. REID: Rural remote cottage lots, for example: What is the purpose of assessing a piece of property located on the shores of Jubilee Lake? How do you assess a piece of property located up in the wilderness area, for example, of the Central Avalon?

MR. J. BYRNE: Exactly. But what about doing an assessment on a piece of land in Deer Park or Ocean Pond or out around Terra Nova?

MR. A. REID: Yes, you may be able to do an assessment on a piece of property in Deer Park because there is a set value already established by the numbers of properties that have changed hands over a number of years. I can see us, from my department's point of view, giving an assessed value on a piece of Crown land located downtown St. John's, for example, or located in Irish Town in Carbonear. That is pretty simple to get anyway because all they have to do is go to the rolls of the town council and they have it on the rolls. We have done the assessment on it anyway, so that is not a problem there. I can assure you that I do not have the staff, I do not have the ability, to do that. You know, that is a question that the minister will have to answer for himself, but I am pretty sure, from what John is telling me, that they are addressing that particular question right now on how they are going to handle that.

AN HON. MEMBER: (Inaudible).

MR. A. REID: They have some money made available to do it.

WITNESS: If I might, Mr. Minister, there may have been some confusion in questioning when we came to the assessment of Crown lands for sale purposes and the assessment of municipalities for rate purposes. So I think -

MR. A. REID: Those are two different papers by the way.

MR. J. BYRNE: Pardon?

MR. A. REID: Those are two different papers, Jack. Those are two different papers.

WITNESS: Yes, that is the confusion.

MR. J. BYRNE: I know the difference. I am just wondering if other people know the difference?

WITNESS: But, Jack there may have been some confusion caused.

MR. J. BYRNE: That is a pretty simple question.

WITNESS: When we are into assessment of Crown lands for sale, and we talk about -

MR. A. REID: Give him a chance.

WITNESS: A (inaudible) comes in here with an assessment in municipalities, then it may have caused some confusion. But I think the minister can probably go back to that at some point and help to clarify it.

MR. J. BYRNE: Under that same section, under Revenue - Provincial.

MR. A. REID: Yes.

MR. J. BYRNE: Revised last year $1,425,300 that is going to $1,976,200. That is the extra money that now -

MR. A. REID: That is the extra $500,000 we will be picking up from municipalities.

MR. J. BYRNE: In your statement here?

MR. A. REID: Yes.

MR. J. BYRNE: Municipal Inspection, Salaries, 2.1.03.01, $279,100: I am just curious as to how many positions that is covering?

MR. A. REID: Nine. That is probably step progression involved in that. From $265,900 to $279,100: I would say it is probably a step progression, is it?

AN HON. MEMBER: Yes and Labrador allowances.

MR. A. REID: And Labrador allowances. Yes, go ahead.

MR. J. BYRNE: Under Section 2.1.04, Project Implementation and Control, it says: "Appropriations provided for the supervision of engineering design, project implementation and administrative requirements relative to municipal capital works." I just wonder, is there is any overlap with respect to Works, Services and Transportation with respect to engineering design? Is it possible that those sections could be combined?

MR. A. REID: No, they cannot be, Jack. I will tell you why. All the municipal supervision - we are down now to how many engineers? We laid off three engineers, was it, last year? We are down to two now or three? Two is it?

WITNESS: They are (inaudible).

MR. A. REID: Yes, we have two.

WITNESS: I'm sorry, these are the regional offices.

MR. A. REID: These are all the regional offices. We are down to a minimum now. What you are saying is: Can that be contracted out? Is that what you are saying, or can it go over to Works, Services and Transportation?

MR. J. BYRNE: I am just wondering if one section could do all the work for Works, Services and Transportation and Municipal and Affairs?

MR. A. REID: Well, the answer to it is, no, because we are reducing our staff and engineering staff in Municipal Affairs, and Works, Services and Transportation just laid off a whack of theirs. I suppose eventually what we are going towards is complete privatization of all of it, both Works, Services and Transportation and ourselves.

MR. J. BYRNE: That's the answer.

MR. A. REID: That's what it seems to be.

MR. J. BYRNE: Yes. In Municipal Assessment - well I had a note made there about privatizing so we will skip ahead of that.

Section 2.2.02, Local Government Policy, item 10, Grants and Subsidies, $61,000. I just have a note: What for?

MR. A. REID: That $61,000 was the grant to the Federation of Municipalities and to the administrators association; $49,000 for the Federation of Municipalities and the rest of it goes to the administrators. Okay?

MR. J. BYRNE: Yes. Urban and Planning.

MR. A. REID: Yes. That's reduced substantially because we did away with practically all of our urban planning last fall and that is reflected there in this year's -

MR. J. BYRNE: I know what is going on there. What kind of an impact is that having on municipalities in the Province with respect to their town plans?

MR. A. REID: Let me ask Mr. Colbourne to answer that, Mr. Byrne, if you don't mind. Go ahead, Art.

MR. COLBOURNE: It is felt that planning will be done locally in the municipalities, for municipalities to contract directly to private enterprise, but at the same time we phased down, so recently, that we have not seen any effect, as far as I can tell, not to this date.

MR. J. BYRNE: There will be extra costs to the municipalities, of course, if they want to get the town plan done?

MR. A. REID: If they want it done, if the municipalities want it done. We are handling the regular routine changes to town plans, we are still doing that, and we are going to continue doing most of it, I suppose, until we reach the point where we get bogged down and we have to say no to a community and say: I am sorry we have too much other work to do.

MR. J. BYRNE: In comparing the salaries, okay, from $979,900 that was spent last year down to $346,700 in urban and rural planning, it is roughly a third this year. Yet when we look at transportation and communications, it is cut from $63,000 to $35,100 which is less than half. Now, why would that be?

MR. A. REID: Because it is going to cost just as much for transportation, I suppose, with the few that we have left, to go to the various places than when we had an extra fifteen. Stan Clinton himself, for example, will have to do more travelling in the Province this year than he did last year because now he is short fifteen staff. In fact, I mentioned the other day that I thought it might be too low. You see, the travelling is still going ahead because we are still doing, as I said, a fair amount of rural and urban planning. You have to remember when we say urban and rural planning here that we are talking about all the roads. We have control over all the roads as well in the Province, all the primary and secondary roads. You understand that, do you, that my department looks after all of that, all planning along primary and secondary roads in the Province?

MR. J. BYRNE: The roads? Oh, yes.

MR. A. REID: Municipal Affairs does all of that too. So if you wanted to build a place out on the main highway or somewhere you would have to come to us for permission. So our people are still going to have to travel a fair amount.

MR. J. BYRNE: Okay, page 272, Section 2.3.01, Administration and Planning, I just have highlighted: community water services and other engineering services. I had a note here: Flatrock situation, which I'm meeting with you to discuss already.

MR. A. REID: Yes.

MR. J. BYRNE: I'm meeting with the deputy minister pretty soon.

Salaries, down from $434,200 to $274,500: Big lay offs there or what?

MR. A. REID: Yes, that is still part of the planning division. Which is he talking about now?

WITNESS: This one up here.

MR. A. REID: Oh, that is the engineering services. Yes, there was a substantial lay off of my engineering people.

MR. J. BYRNE: We saw Professional Services go from $34,400 last year up to $103,000. Is that to compensate for the lay offs?

MR. A. REID: No, it isn't. Professional Services has nothing to do with that at all. Professional Services has to do with a number of studies and different things that we have to do around the Province this year. It has nothing to do with engineering or cost to engineering at all. It is private sector work that we are going to have to go out and contract out.

MR. J. BYRNE: Okay.

MR. A. REID: It is a number of studies: Water and sewer services, garbage services, all kinds of things in that.

MR. J. BYRNE: Industrial Water Services, 2.3.02, under Revenue - Provincial, $874,300 last year, going up to $1,010,000: That is the $0.50 per 1,000 gallons you were talking about earlier on, I think.

MR. A. REID: Yes, it is.

MR. J. BYRNE: Will we see an increase there in the charge to the municipalities for that service? It has gone up by, what, $116,000.

MR. A. REID: Yes, there will be an increase to municipalities for the service.

MR. J. BYRNE: Ten per cent?

MR. A. REID: Pardon me?

MR. J. BYRNE: Over 10 per cent, twelve per cent?

WITNESS: Five cents per 1,000 gallons.

MR. A. REID: Five cents per 1,000 gallons.

MR. J. BYRNE: No. It is $0.50 per 1,000 gallons now.

WITNESS: It is close to $0.55.

MR. J. BYRNE: Close to $0.55.

MR. A. REID: Yes.

MR. J. BYRNE: So it is, as I said, 10 per cent.

MR. A. REID: Yes, that is right. I'm sorry, Jack. Yes, you are right, 10 per cent.

Abitibi-Price in Stephenville is hooked into that same system and that has gone from $0.07 to $0.10. The largest portion of that profit is there in that.

MR. J. BYRNE: Then the breakdown is going to be different, yes.

MR. A. REID: Yes, but they are the biggest users.

MR. J. BYRNE: Yes, okay.

MR. A. REID: They are up to millions a day in Abitibi. They have already been notified of this, by the way, and we haven't heard a comment about it, not a sound. Most of that will come from Abitibi-Price, not from the communities.

MR. J. BYRNE: Section 2.3.03, Community Water Services: Nothing budgeted this year at all, $450,000 cut.

MR. A. REID: Yes. You don't have any local services, Jack.

MR. J. BYRNE: No, but still what impact is that going to have? Is that to put in water and sewer projects or is to maintain?

MR. A. REID: No, not sewer, just water.

MR. J. BYRNE: That is what I meant, water.

MR. A. REID: No, not maintain. They maintain their own. It is to install new ones. Digging artesian wells, basically, and -

MR. J. BYRNE: So, no money this year.

MR. A. REID: That is unincorporated communities, by the way. That is local service districts, unincorporated communities. That is why I can't tell you what I'm going to do with $950,000 million. That is why I can't tell you. To be quite honest about it, I don't know. That $950,000 -

MR. J. BYRNE: (Inaudible) use a quarter of a million.

MR. A. REID: Yes. That $950,000 that I talked about, I called it a slush fund, and that was wrong for me to call it that, but I don't know what other name to put on it. The $950,000 that we have, that we talked about earlier, we don't know how we are going to break that down yet. I don't know. To be honest about it, I don't want to make a commitment to municipalities for a certain amount of money. I would rather wait to see the requests, see how urgent they are, the priorities of the communities, and then do it that way, then set an amount. Because if I set an amount I'm going to have to stick to that amount, and if I have to go over then it isn't going to be easy to be able to go over that. I'm leaving that up in the air. There may be - and you can quote me - some Community Water Services program this year.

MR. J. BYRNE: Thank you.

Section 2.3.04, Waste Management Facilities, Grants and Subsidies, $250,000 budgeted, spent $45,000, nothing this year: Can you explain what is going on there?

MR. A. REID: Which one are you on now, I'm sorry?

MR. J. BYRNE: Section 2.3.04.10, Waste Management Facilities, Grants and Subsidies: $250,000 budgeted, $45,000 spent, and nothing this year.

MR. A. REID: That is the Waste Management Facility Program, that is gone as well. That program is, basically anything under $100,000 previous to this year, we could go out and give communities funding to clean up their dump site, for example, for $10,000, $20,000 or $80,000. There is no money in that budget this year at all for Waste Management. That is in my statement too, by the way.

MR. J. BYRNE: Page 274, 2.3.06, Water and Sewer Servicing-Coastal Labrador, item 06, $2,761,500: Do you know where that is going now?

MR. A. REID: Where it is going now?

MR. J. BYRNE: Has it been allotted? Has it been approved?

MR. A. REID: Yes, it has been allotted. Do you have that sheet there, Art, please?

Now, let me tell you about the community water and sewer services in Labrador. I don't have any control over that; that is done by a committee of representatives of the Inuit Community, the Labrador Community on the South Coast, the federal government and representatives of the provincial government. Never has the provincial government ever interfered with what they decide. They are the ones who decide themselves where the money is being spent in Labrador.

The total budget for Labrador that will be spent this year is $3,115,000. That is the Labrador Agreement which takes in all the Labrador agreements; so that means there would be so much of that already committed. I can't tell you where the $3 million is going. This is last year's stuff, tendered last year: Nain, for example, over a million; Hopedale and Makkovik. Hopedale was tendered last year, Postville was tendered last year. There will be work going on in Nain, Makkovik and Rigolet again this year. That is all I can tell you. I don't know anymore.

MR. J. BYRNE: That's fine.

MR. A. REID: That is all done under contract through that committee, Mr. Byrne.

MR. J. BYRNE: Page 275, Water and Sewer Subsidy, section 3.2.01, Grants and Subsidies, $28,487,500.

MR. A. REID: The $28 million is what the government of this Province will have to pay towards debt financing to the Newfoundland Municipal Financing Corporation for work that has been done over the last fifteen years.

MR. J. BYRNE: Basically, I have a note here: How much is owed by the towns and how much by Municipal and Provincial Affairs? Is that all Municipal Affairs?

MR. A. REID: That is all Municipal Affairs.

MR. J. BYRNE: What is the total amount, then, that is owed to these people?

MR. A. REID: The total amount owed to -

MR. J. BYRNE: NMFC?

MR. A. REID: About half-a-billion dollars, approximately $500 million.

MR. J. BYRNE: Say what?

MR. A. REID: Approximately $500 million.

MR. J. BYRNE: Million, you said $500,000 first.

MR. A. REID: A half-a-billion dollars is owed to NMFC, billion.

MR. J. BYRNE: Okay. Special Assistance: Appropriations provide for special assistance to municipalities. That is your $950,000, is it?

MR. A. REID: That is the $950,000, with Wabana and St. John's taken out of it.

MR. J. BYRNE: That is a good spot to get my money for Flatrock.

MR. A. REID: How much are you looking for for Flatrock?

MR. J. BYRNE: It is only $35,000 a year.

MR. A. REID: What is it for, Jack?

MR. J. BYRNE: I mentioned that to you before when I met with you, at the meeting with the deputy minister.

In the Town of Flatrock, a number of years ago, the policy was that if you put in (inaudible) -

MR. A. REID: Oh yes, yes. We are going to deal with that. That is another one (inaudible).

MR. J. BYRNE: That then could help alleviate the problem down in Flatrock with respect to the water.

MR. A. REID: You never know. Based on how well you treat me tonight, you never know.

MR. J. BYRNE: Can I keep her going, I won't be much longer?

CHAIR: Well I -

MR. A. REID: Let him continue, let him continue.

CHAIR: How much longer do you want?

MR. J. BYRNE: I would say by 9:30 p.m. I will be finished.

CHAIR: Okay, go for it. If the minister keeps his answers short, we could probably make it by 9:29 p.m.

MR. J. BYRNE: I don't know about that.

Regional Co-operation Initiatives, section 3.2.03.

MR. A. REID: That is the $100,000 that will help me convince people to go to regionalization this year.

MR. J. BYRNE: We already addressed that, yes; done.

Municipal Operating Grants And Adjustments, 3.2.04: There is a 25 per cent cut basically from $41 million down to $31 million. I am just curious now, and you kind of alluded to this in the House and I have been saying it for a number of years, when do you expect that you are going to be down to giving the municipalities nothing for MOGs? I mean it is getting to the point -

MR. A. REID: I have to be honest and say to you, Mr. Byrne, I am expecting another 10 per cent cut next year.

MR. J. BYRNE: Ten per cent for 1996-1997?

MR. A. REID: Well, the following year.

MR. J. BYRNE: 1997-98.

MR. A. REID: It would be 1997-98 which will be a year from January coming; so a year and three-quarters from now.

MR. J. BYRNE: There is $30 million or $3 million in the first quarter?

MR. A. REID: Three million.

MR. J. BYRNE: Three million?

MR. A. REID: Yes.

MR. J. BYRNE: So the whole brunt of that is coming in the first quarter?

MR. A. REID: Yes. It has to, because I have to show the savings in our fiscal year which ends March 31.

MR. J. BYRNE: Right on.

MR. A. REID: So I have to take it in the first quarter which means then that the second, third, and fourth quarter will be readjusted up.

MR. J. BYRNE: But if you take it in the first quarter and you bring in next year's budget, are they going to get hit twice in one year?

MR. A. REID: No, no. They are not being hit twice this year.

MR. J. BYRNE: Well, they got hit back in November sometime.

MR. A. REID: That is right. So they are going to go right on through this year now and they are not going to be hit until January 1 of next year. This is January 1 of next year, see. So if they get hit another 10 per cent it will be January 1, 1998.

MR. J. BYRNE: Okay. Section 3.2.05: Certain municipalities to assist in meeting interest charges. That is: Appropriations provided for the payment of municipal grants to certain municipalities to assist in meeting interest charges. Do you want to explain that?

MR. A. REID: That is a whole host of things, stadiums and different facilities we have put around the Province in the past ten or fifteen years. There are stadiums in it. Do you have them there? I can't tell you the exact facilities but they are in Bishop Falls, Grand Falls, St. John's, Anchor Point and Badgers Quay. In Bay Roberts there is a stadium, in Bishop Falls there is a stadium, in Conception Bay South there is a stadium and in Fortune. I can go on and on and on. There must be 100 of them. Recreation grants, different things that we subsidized under agreements with different municipalities over the past fifteen years, and that is our share towards it each year.

MR. J. BYRNE: Section 3.2.06, Municipal Councils: Appropriations provide for the payment of municipal grants to certain municipalities to assist in meeting principal charges and other expenses.

MR. A. REID: That is the principal payments of what I just said a minute ago. The one before that is the interest payment. The same thing.

MR. J. BYRNE: Debt Servicing, Paving, 3.3.01.

MR. A. REID: That is the interest that we pay every year on 60/40 paving projects that have already been given out from last year.

MR. J. BYRNE: My question was: How much is the total owing by Municipal Affairs?

MR. A. REID: For paving? What portion of the MFC Debt is paving?

MR. J. BYRNE: Wait now, (inaudible).

WITNESS: The total monies owed from that particular program?

Six million dollars is the interest. He wants to know what the total owed is on that project?

MR. A. REID: The total owed is approximately 15 per cent of the $500 million. So five fifteens, what is that? About $75 million.

MR. J. BYRNE: This is a combination of the previous one, where I asked and you told me it was $500 million; this is part of that $500 million?

MR. A. REID: Yes. You asked me what the total debt to MFC was and I told you it was $500 million. In that $500 million, approximately $70 to $100 million is for paving and the other $400 million plus is water and sewer.

MR. J. BYRNE: You misunderstood the question, but that is okay I have the answer now.

MR. A. REID: The next one, 3.3.02 that is the principal we pay. We pay $9,000,000 principal and $6,000,000 interest.

MR. J. BYRNE: Yes, okay.

I had a note made, when I looked at the two of these together, Debt Servicing for Paving and Road Construction and Paving. I was just going to ask the question: What is the different between the two?

MR. A. REID: Road Construction and Paving.

MR. J. BYRNE: Well, it looked to be the same thing to me.

MR. A. REID: It is the same thing.

MR. J. BYRNE: Well, why would you have it broken down twice?

MR. A. REID: Because one is interest and one is principal.

MR. J. BYRNE: It says: "...share of interest payments on debt owing to the Newfoundland," et cetera.

MR. A. REID: Share of interest payments on debt owing.

MR. J. BYRNE: Okay, I missed one word. Good enough, yes, interest on principle.

MR. A. REID: Okay? It says: "...share of principal payments on debt owing...." One is principal, one is interest.

MR. J. BYRNE: Right on. I read that two or three times and missed those two words, you know that?

MR. A. REID: Don't feel bad.

MR. J. BYRNE: Municipal Infrastructure, 3.3.03, Water and Sewer Systems: You have Grants and Subsidies, $25,262,500. That is the money I was talking about earlier. Is that new monies to be spent?

MR. A. REID: No it isn't. That is towards the capital cost of the water and sewer. That money is already spent and that is what we are going to have to pay this year towards it.

MR. J. BYRNE: Next section, blank, blank, blank, 3.3.04: No money again. Is that completed?

MR. A. REID: Yes it is. That fund ran out this year. That is 100 per cent funded by the federal government. That program ran out this year.

MR. J. BYRNE: Under 3.3.05, Canada-Newfoundland Infrastructure Program, amount to be voted, $22,100,000. Federal revenue is $14,300,000, so you put in $7 million, roughly.

MR. A. REID: Yes.

MR. J. BYRNE: Is any of this money allotted?

MR. A. REID: No. Is there any of it allotted?

MR. J. BYRNE: I mean, is this open to applications (inaudible)?

MR. A. REID: No, this is pure payments towards capital funding that has already been allotted.

MR. J. BYRNE: I'm trying to get a few bucks for something.

MR. A. REID: You are going to have trouble. You are going to have to find it in the $25 million or you are going to have to come over and be very, very good to the deputy minister, and he might be able to find you a few dollars.

MR. J. BYRNE: I don't know if I can do that.

MR. A. REID: I don't know where else you are going to find it.

MR. J. BYRNE: Page 280, Emergency Planning, 4.1.02.04, Supplies: You spent $6,000 and that is up to $20,000. Why do you need $20,000 when you only spent $6,000 last year?

MR. A. REID: I asked the same question today and never got an answer.

WITNESS: (Inaudible) more training this year.

MR. A. REID: The Federation of Municipalities and the towns asked us to do more federal-provincial cost-sharing in regards to training this year around the Province. We put on so many courses in the Province each year co-sponsored by the federal government, emergency measures, and they have asked us for more. The Supplies is basic material that we supply to people at these conferences. That is why it has gone from $18,000 to $20,000.

MR. J. BYRNE: No, $6,000 to $20,000.

MR. A. REID: Yes, well, it was $18,000 last year, and we cut back on it last year. Do you see the federal government revenue on that?

MR. J. BYRNE: Yes.

MR. A. REID: If you look at the bottom you will see that there was $127,000 budgeted in 1996. We didn't spend it because the feds had a freeze on their money, so we ended up spending $64,100. That freeze is lifted now and we figure we are going to be able to spend it next year. That is where you see the increase. Over what was budgeted in 1995-1996, the difference is $1,200. You go down to the Total: Emergency Planning department. See what I mean?

MR. J. BYRNE: Okay.

MR. A. REID: The federal contribution towards that $312 million is $184,000. Basically what we are doing is we asked the government to put the same amount in as we had budgeted in 1995-1996.

MR. J. BYRNE: Under that same section, item 07, Property, Furnishings and Equipment, $41,400 up from $30,000: Are you just taking advantage of the situation with the feds or what?

MR. A. REID: Anyone have an answer for me on that? I can guess at it. It is a new piece of -

WITNESS: (Inaudible).

MR. A. REID: It is a new generator for emergency measures. That is why it has gone to that amount.

MR. J. BYRNE: 4.1.03, Disaster Assistance for Infrastructure: That is accurate now, is it?

MR. A. REID: What is that? I'm sorry?

MR. J. BYRNE: 4.1.03, Disaster Assistance for Infrastructure.

MR. A. REID: Disaster Assistance? The reason why Disaster Assistance is up as high as it is is because of what we are going to have to face in regards to our portion of the repayment on the damage that was created by the recent storms on the Burin Peninsula and the West Coast, the big flood we had on the West Coast?

MR. J. BYRNE: Oh yes, I remember.

MR. A. REID: This is basically an emergency disaster fund to which the federal government contributes, and we, more or less, are locked in into the agreement, so we have to budget for ourselves $1.3 million.

MR. J. BYRNE: Very good.

WITNESS: (Inaudible) last year?

MR. A. REID: We didn't have any disasters last year.

MR. J. BYRNE: Page 282, Municipal Fire Operations.

MR. A. REID: Yes? The City of St. John's -

MR. J. BYRNE: Grants and Subsidies, $2 million down from $2,425,000: We have asked questions on that already I believe?

MR. A. REID: That is Corner Brook and St. John's, $400,000 for St. John's and $100,000 for Corner Brook.

MR. J. BYRNE: When do you expect to completely cut that out? How is that for a straightforward question?

MR. A. REID: Cut it all out totally?

MR. J. BYRNE: Yes.

MR. A. REID: Oh, I don't know. I can't guess on that.

MR. J. BYRNE: You can't answer that one, it wouldn't be one answer would it?

MR. A. REID: I would be presumptuous in assuming if any more would be cut. I don't know, I really don't know.

MR. J. BYRNE: Pardon?

MR. A. REID: I can't answer that question.

MR. J. BYRNE: You don't want to answer that one, no.

MR. A. REID: I can't answer it because the answer is: I don't know.

MR. J. BYRNE: When I asked the question the other day, you thought that there is a possibility that the money that has been cut this year could be re-instated next year.

MR. A. REID: No, I said that if the economy turned around, there is a possibility that it might. If you look at Hansard, I don't think I said that it would be put back next year.

MR. J. BYRNE: I never said that. I said, `the possibility'.

MR. A. REID: Possibility. Anything is possible in the (inaudible).

MR. J. BYRNE: You don't pay attention sometimes.

Those are my questions and I thank the minister and his staff for their time tonight.

MR. A. REID: Thank you, sir.

CHAIR: And the Chair, of course for his tolerance.

MR. J. BYRNE: The Chair is too strict, I think, sometimes.

CHAIR: Okay, I sense then that everybody has had an opportunity to ask questions. I sense that there are no more questions, so I will ask the Clerk now to -

MR. ANDERSEN: Mr. Chairman, if I might. The question came up about councils, so I just want to pass on to the Minister that I was a member of council and I resigned when I sought nomination for Torngat Mountains. A short while later, Lawrence O'Brien left the council in Happy Valley-Goose Bay and sought the nomination and won it for the seat of Labrador. The reason I was up and down tonight, there were no less that eleven people who ran for the two seats in the by-election in Goose Bay today and the two winners are Ron Bowles and Jack Chaisson. Again it shows a good interest. There were eleven candidates for two positions there.

MR. A. REID: It goes back to our question earlier, Jack. I wish I had that information to be able to give it to you at that particular time. It is really something, you know, it is hard to believe.

CHAIR: I take it, Mr. Anderson, that that was on a point of privilege, was it?

MR. A. REID: And a good privilege it was too, Mr. Anderson. Thank you very much for the information, and I will send off congratulations to those two people in the morning.

MR. ANDERSEN: They are Ron Bowles and John Chaisson.

CHAIR: Okay, then I will now ask the Clerk to call the subheads, inclusive.

On motion, subheads 1.1.01 through 4.2.03, carried.

On motion, Department of Municipal and Provincial Affairs, total heads, carried.

On motion, subhead 1.1.01, carried.

On motion, Newfoundland and Labrador Housing Corporation, total head, carried.

MR. J. BYRNE: (Inaudible).

CHAIR: Go ahead, Mr. Byrne.

MR. J. BYRNE: How come you never asked (inaudible).

CHAIR: I have been sitting here very quietly all night and I must say it has been difficult when you get into Water and Sewer because of my personal interest that I may have. I thought, of course, that, with the tolerance and understanding that I have shown that you would really have given me some compliments.

So, I understand that you were quite satisfied, I could see the big smile. The minister sort of indicated that he was willing to accommodate your wishes, either him or the deputy. So I think that you would not dare oppose anything that was carried.

Anyway, can we have a motion to adopt the minutes? I think everybody had an opportunity to see the minutes from our last meeting.

MR. J. BYRNE: I don't think so.

CHAIR: You are too serious there, Jack. You missed the minutes that we handed out at the beginning of the meeting.

MR. J. BYRNE: What date?

CHAIR: May 27. I will give you a second or so.

Can we have a motion to adopt the Minutes as read?

On motion, Minutes adopted as circulated.

CHAIR: Carried.

Okay I want to thank everybody tonight for their patience and understanding. I think we are finished now with the Government Services Committee. Hopefully tomorrow we will report to the House. I want to thank the Minister and his staff, but more importantly, I think, I want to thank the Clerk and the recorder for their patience. I believe they are really and truly blessed.

So if we can have a motion now for adjournment.

On motion, Committee adjourned.