June 22, 2010                        HOUSE OF ASSEMBLY PROCEEDINGS                  Vol. XLVI  No. 41


The House met at 1:30 p.m.

MR. SPEAKER (Fitzgerald): Order, please!

Admit strangers.

Statements by Members

MR. SPEAKER: Today the Chair welcomes the following members' statements: the hon. the Member for the District of Port au Port, the hon. the Member for the District of Mount Pearl North, the hon. the Member for the District of Bonavista North.

The hon. the Member for the District of Port au Port.

SOME HON. MEMBERS: Hear, hear!

MR. CORNECT: Mr. Speaker, I rise today in this hon. House of Assembly to congratulate the 708 Stephenville Biathlon Female team: Tamara Head, Sabrina Muise and Hannah Stokes, for winning the Provincial Cadet Biathlon Championship in January of this year, which led to representing the Province in the National Cadet Biathlon Championship in Valcartier, Quebec in March 2010.

Mr. Speaker, the 708 Air Cadet Squadron has a history of producing competitive biathletes and this year was no exception. The female team won the gold in the provincial cadet biathlon championship earning them the right to represent the Province nationally, with Tamara and Hannah also winning individual gold medals in their respective age groups.

In Quebec, the 708 biathlon team won two silver medals, one for the female team relay race and the other for the female patrol race in March. It was very competitive at the national level with representation from ten provinces and three territories, with some biathlon teams having twenty-four members. The 708 Stephenville Female Biathlon team with its performance proved itself to be a force to be reckoned with. The months of training, discipline and hard work were well rewarded.

Mr. Speaker, I ask all hon. Members of the House of Assembly to join with me in congratulating Tamara Head, Sabrina Muise and Hannah Stokes for earning gold and silver medals at both the provincial and national levels in the Cadet Biathlon Championships this year and in wishing the 708 Air Cadet Squadron continued success with their Biathlon teams.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for the District of Mount Pearl North.

SOME HON. MEMBERS: Hear, hear!

MR. KENT: Thank you, Mr. Speaker.

I rise in this hon. House today to congratulate and recognize a young resident of Mount Pearl and recently named Male Youth of the Year, Brian Peach.

Brian is a role model for all youth in Mount Pearl. Not only has he been named Male Youth of the Year, he has also been awarded the Memorial University of Newfoundland Alumni Entrance Scholarship valued at $25,000 and was successful in winning the Rotary Club of St. John's Northwest "Adventure in Citizenship Speak Off earlier this year. For his efforts, Brian received a trip to Ottawa along with 200 other Canadian youth.

Brian graduates this year from O'Donel High School and will attend Memorial University here in the capital city. I have no doubt that his successes in his secondary studies will follow him to Memorial.

To add to this very impressive list of accomplishments, Brian has been named the winner of the Wendy's Crew Classic Achiever Scholarship, which will be presented at O'Donel's closing ceremonies. He also placed first in the Blundon Institute Provincial Competition at MUN and has most recently been awarded The Telegram's 2010 Award of Excellence.

Mr. Speaker, I ask all members of this House to join me in congratulating Brian Peach on all of his accomplishments thus far and wish him all the best as he begins his post secondary studies in the fall. I am certain we will be hearing of future achievements for Brian Peach in the years to come.

Thank you.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for the District of Bonavista North.

SOME HON. MEMBERS: Hear, hear!

MR. HARDING: Mr. Speaker, individuals who dedicate their time, energy, and spirit to the development of opportunities for the youth of our Province are certainly worthy of our recognition and appreciation. Today, I stand in this House to acknowledge the efforts of one such individual.

On Friday, June 4, Mr. Gerald Wheeler of Musgrave Harbour was honoured at the School Sports Newfoundland and Labrador Annual Awards Banquet for his dedication and commitment to the youth of our Province. Mr. Wheeler was presented with the Honour Award, the highest award given by School Sports Newfoundland and Labrador. The award is reserved for individuals who contribute to school sports in a variety of ways over an extended period of time.

For the past thirty-one years Mr. Wheeler has served in almost every capacity with School Sports Newfoundland and Labrador including Zone President, Vice President, and Regional Director. He attended his first AGM in 1978-1979, and still sits today as a member of the Board of Directors. He has represented the Province four times at the Canada Games as an athlete, coach, and as a member of the mission staff. He has served on many district and provincial committees for physical education curriculum development and throughout his tenure as a volleyball coach at Gill Memorial, his teams have won ten provincial titles and two team sportsmanship banners.

For more than three decades Mr. Wheeler has had a positive and lasting impact on the youth of our Province. The time he has spent unselfishly giving, and the care he has shown for the young people in the Musgrave Harbour area, certainly makes him a role model who is worthy of our recognition and appreciation.

Mr. Speaker, I ask all members of this hon. House to join me in congratulating Mr. Gerald Wheeler on receiving the Honour Award and to thank him for his continued contributions to the youth of our Province.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Statements by Ministers.

Statements by Ministers

MR. SPEAKER: The hon. the Minister of Innovation, Trade and Rural Development.

SOME HON. MEMBERS: Hear, hear!

MR. SKINNER: Thank you, Mr. Speaker.

Mr. Speaker, research, innovation, and advances in technology touch all areas of our lives, and every sector of our economy. Whether it is fisher people seeking new ways to maximize their catch or farmers identifying a better means of growing crops, Newfoundlanders and Labradorians are no strangers to using innovation to advance their objectives. In recent years, a progressive business community has forged the Province to the forefront of many exciting industries – we are leaders in ocean technology, in energy, and in genetics research.

To foster continued excellence within our local industries, the provincial government is aggressively implementing its provincial innovation strategy, entitled, Innovation Newfoundland and Labrador: A Blueprint for Prosperity.

A central component of the innovation strategy was to engage the Province's youth and capture their interest in science, engineering and technology. To make the gains that we envision for the Province, connecting today's youth to the opportunities that exist in science, technology, and engineering is paramount. An important step in achieving this goal was made in December 2009 with the commencement of twenty-one projects in schools and organizations across all regions of the Province, totalling more than $460,000.

As the academic school year nears its end, many of the projects have been completed. I am pleased to report that the projects have been highly successful and created valuable learning experiences for our students. For example, Women in Science and Engineering held workshops involving activities to foster closer relations with several Labrador communities and to initiate mentoring of young Aboriginal women.

In Harbour Grace, St. Francis School launched SMART Schools Sharing Space – an on-line initiative intended to inspire students to become involved in science and technology projects while developing problem-solving skills. Students also make valuable connections with the Canadian Space Agency and their peers in Grand Falls-Windsor.

I personally, Mr. Speaker, had the opportunity to attend St. Matthew's Elementary Energy Fair. Upon entering the fair, I was immediately engulfed by projects extending from the gym out through the corridors, as well was engulfed by many enthusiastic students. Their enthusiasm was unmistakable as they turned static materials into innovative applications such as a solar powered oven called the Shake and Bake and calculators that were operated by a mini wind turbine.

Mr. Speaker, our investment was well served as students across the Province were exposed to how science, technology and engineering can be fun and how it also a part of their daily lives.

I would also like to take this opportunity to acknowledge the important role that the teachers and the project administrators had in this valuable initiative, and thank them for their support and their leadership.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for the District of The Straits & White Bay North.

MR. DEAN: Thank you, Mr. Speaker.

I would like to thank the minister for an advance copy of his statement.

Certainly, it is hard to argue with the idea that innovation is good. Innovation is a process of translating knowledge into economic growth and social well-being. Yet, lots of times it does not really come from government money or programs or bureaucrats or whatever, but it really comes from the individuals who are involved in the innovation itself. It sounds new and complicated, but really I guess it is not, innovation comes from looking at new ways of filling an existing need and so on. It is a very old idea; yet, the newest part of it is the name.

It is good government policy to capture student interest in science, but I believe it is more important to make sure that science is taught properly. It is good government policy to encourage schools to develop on-line science and technology initiatives and so on. Yet, the government investment represented by these and other projects have to be able to be weighed, quantified and measured so that we know that we are getting the success that we are looking for there because without weighing, quantifying or measuring the results, then we really do not know – that is really what the results are, what science is all about, I should say.

So, again, it is good to see the success in the schools that are mentioned in this statement and it is nice to be able to speak to it this afternoon.

Thank you.

MR. SPEAKER: The hon. the Member for the District of Signal Hill-Quidi Vidi.

MS MICHAEL: Thank you very much, Mr. Speaker.

I thank the minister for the advance copy of his statement.

These were great projects that ITRD has funded, and I am really glad to hear that they have taken place. Groups like Women in Science and Engineering and, of course, many of our high schools have over the years shown how creative they can be and the ideas they come up with in encouraging young people to get involved in science and technology. Of course, with WISE, which is based at Memorial University, it is a group that is particularly concerned about getting young women into science and technology.

So, it is good that government is putting money into these projects, recognizing the creativity out there in the community and in our schools and supporting them with the money as they have done this time. I hope that this is something that is going to continue, that it is a program that will continue. One of the ways to retain our skilled workers, especially our young people, will be by giving them these types of opportunities while they are in the educational system.

I was interested in some of the projects, particularly the two at St. Matthew's school, and I hope that the government will learn from these innovative, energy-based projects that were done by the St. Matthew's students.

Thank you very much, Mr. Speaker.

MR. SPEAKER: Further statements by ministers?

The hon. the Minister of Business.

SOME HON. MEMBERS: Hear, hear!

MR. WISEMAN: Mr. Speaker, I rise today to inform hon. members of the progress that we are making to execute on a significant industrial benefits agreement that our government negotiated as part of the acquisition of the four new water bombers from Bombardier Aerospace announced last year in October. Our colleague, the Minister of Transportation, announced the arrival of the first one. I think it was in April.

The agreement with Bombardier maximizes the return to the Province from the water bomber procurement. It sets out commitments for industrial benefits worth some $30 million and generating a minimum target of 200,000 person hours of direct employment in Newfoundland and Labrador. These benefits will be realized through the awarding of direct contracts to Newfoundland and Labrador firms to supply services or products to Bombardier and its partners, and through the company supporting initiatives, such as the targeted education and training that build capacity in our Province's aerospace and defence industry.

Mr. Speaker, our businesses have already tapped into Bombardier supply opportunities. Provincial Aerospace, for example, is modifying aircraft on behalf of Bombardier for a key international customer of theirs.

Mr. Speaker, I am pleased to report that we are building on those achievements to date and advancing other initiatives under this agreement.

The next of these activities is happening on June 24, when Bombardier, in partnership with the Department of Business, will host a suppler forum here in St. John's. This will be a unique opportunity for a number of Newfoundland and Labrador companies to gain direct information on how they might access the contracts and add value to Bombardier's extensive supply network.

The companies attending will receive an overview of Bombardier's supply chain and the procurement requirements, as well as a profile of activity and opportunities in Newfoundland and Labrador's vibrant aerospace and defence sector. In addition, Bombardier will hold several one-on-one meetings with local firms to explore potential business partnerships. This will allow Bombardier to scope the capabilities of Newfoundland and Labrador companies, which can help identify potential opportunities for them to do business with their company.

Mr. Speaker, this is a tangible and a productive early step in the agreement with Bombardier. We anticipate that through our ongoing work, additional initiatives will be developed in the near future, and that future benefits to businesses in Newfoundland and Labrador will play a role in further elevating our aerospace and defence industry. The progress being made under this agreement is another example of our government's commitment to supporting business development in the Province, and ensuring that the maximum economic benefits are achieved from investments and initiatives that we undertake.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

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

MR. KELVIN PARSONS: Thank you, Mr. Speaker.

I thank the minister for an advance copy of his statement.

It is indeed good to see any opportunity that comes to this Province which allow our industries to take advantage of new work and new contract opportunities. Particularly, people who have sometimes a tough time getting started in the aerospace industry in this Province - going back to 1999-2000, for example, when they first started up in Gander. This is an opportunity for people like that and provincial airways, for example, to take advantage of these opportunities. All the best to them.

Hopefully, the benefits will materialize, as we thought they would. This contract was sometimes in doubt. It was announced back in the Budget, originally, of 2008-2009, got put on the back burner last April in 2009, because of some difficulties, I would think, in arriving at an actual contract, plus the global circumstances that Bombardier were facing. So, it is good to see that it got back on track.

We would certainly encourage all businesses in this Province who might in any way be able to benefit from partaking in this business opportunity, that they attend the summit that is taking place. Also, educate themselves, of course, participate, and hopefully at the end of the day profit and grow their industries as a result of it.

Thank you.

MR. SPEAKER: The hon. the Member for the District of Signal Hill-Quidi Vidi.

MS MICHAEL: Thank you very much, Mr. Speaker.

I, too, thank the minister for the advance copy of his statement, and echo the words of the Opposition House Leader in that it is good to see that things are up and running because we have heard about the contract with Bombardier over a two-year period. So, it is good to know that things are moving ahead.

I am interested in the partnership. It is a contract, obviously, between the department, the government and Bombardier. I would hope that the partnership does not see government offering money to Bombardier to do the work that it is doing. I know in a contract there were gives and takes on both sides. I hope this is a partnership where Bombardier is holding its own when it comes to putting money into these forums, et cetera, that the minister has spoken about because certainly, Bombardier does not need help from us, the company that it is, but the partnership is a good one. I look forward to receiving, of course, from the minister, of the benefits that do come from what is being set up through the forum and the one-on-one meetings that Bombardier will be having with companies in the Province.

Thank you very much, Mr. Speaker.

MR. SPEAKER: Further statements by ministers?

Oral Questions.

Oral Questions

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

MR. KELVIN PARSONS: Thank you.

Mr. Speaker, we have been receiving a number of complaints related to delays in receiving heart surgery in this Province. The most recent incident involves an individual who has been waiting for emergency surgery for six weeks. Each time he was scheduled for surgery it has been cancelled at the last minute. He was even sedated last week when he was advised that the surgery would not take place. The family has been told that these delays are as a result of the lack of beds in the intensive care unit.

I ask the minister: Is, in fact, a lack of intensive care beds at the Health Sciences Centre resulting in cancellation of life-saving heart surgeries?

MR. SPEAKER: The hon. the Minister of Health and Community Services.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Thank you, Mr. Speaker.

Mr. Speaker, one of the areas in which we are doing well in terms of wait times is cardiac by-pass surgery. Last week, in the Wait Times Alliance report, there were a couple of areas that we were not doing so well in, but, Mr. Speaker, what happens, it is my understanding that we try to have the surgeries completed within the benchmark of 180 days. What will happen is that individuals are called in, their surgery is scheduled but it may be postponed based on other more critical surgeries that need to done, whether emergencies arise and the number of beds available.

Mr. Speaker, I will say however, that in terms of the cardiac surgeries that we have, the 182 day benchmark, we are certainly reaching our target in that area and that there are certain influences that result in surgeries being delayed.

SOME HON. MEMBERS: Hear, hear!

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

MR. KELVIN PARSONS: Thank you.

Mr. Speaker, this is not the only incident that has been brought to our attention over the past couple of weeks. It appears that this is becoming a trend and will become an even bigger problem now that summer hours have started and heart surgeries will be reduced from four to two per day. Doctors are frustrated but they have little recourse available to them.

I ask the minister: What is being done to address this growing problem and ensure that individuals needing this surgery receive it in a timely manner?

MR. SPEAKER: The hon. the Minister of Health and Community Services.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Yes, Mr. Speaker.

Currently, the Province has three full-time cardiac surgeons who perform all of the cardiac surgeries in the Province. They do it at the Health Sciences Centre.

Mr. Speaker, for example, I can give you some of the reasons why there have been, what I will refer to as same-day cancellations over the last period of time. The hon. member is right, that there were forty-one cancelled due to there being no ICU bed available. Three of them were cancelled due to no bed being available on one of the units. Some were cancelled, Mr. Speaker, on the basis that the first surgical case of the day was too long. One was cancelled due to a patient refusing surgery. Thirteen were cancelled due to no available ICU staff, and five were cancelled due to a patient's condition.

So, Mr. Speaker, there are a number of factors that contribute to these same-day surgeries being cancelled. It is an issue that is certainly being looked at. I have discussed it with my officials and we are trying to determine what can be done to ensure that individuals who are coming in to have their surgery done can have it done on the date scheduled.

SOME HON. MEMBERS: Hear, hear!

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

MR. KELVIN PARSONS: Thank you.

Mr. Speaker, the minister talked about wait times and how we are doing pretty good reaching targets when it comes to cardiac surgery. Well, Mr. Speaker, having the minister talk about wait times does nothing to help these families who require immediate surgery.

In light of the fact that these problems will only get worse in the coming months when we are on summer hours, I ask the minister: Do you have a plan to ensure that people who need this immediate attention will get such in a timely fashion, and is government prepared to look at or are you looking at sending people out of the Province if necessary to address this urgent need?

MR. SPEAKER: The hon. the Minister of Health and Community Services.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Yes, Mr. Speaker.

The department has recently received correspondence from Eastern Health with regard to the funding of two new cardiac surgeons who have been recruited to replace two of the existing surgeons who will be retiring over the next few years.

Mr. Speaker, there is a process, I understand, that takes place once a diagnosis of coronary artery diagnosis has been confirmed. The patients are referred to a review committee. Then, Mr. Speaker, the treatment options are discussed and a decision is made regarding surgery, and a surgical list of patients is prioritized. The national benchmark that is set, Mr. Speaker, is one that we try to certainly comply with and we have been complying with that.

However, I do accept what the member opposite is saying, that there are difficulties; that someone who is waiting to receive surgery is told that it is going to be cancelled that same day. There is certainly an anxiety there, there is no question about that, Mr. Speaker, and we will continuously look at new ways to deal with this. In fact, as of Friday last week, I met with a number of officials in my department, told them I was not satisfied with the progress we were making on wait times and I wanted to see further progress and new ideas brought forward.

SOME HON. MEMBERS: Hear, hear!

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

MR. KELVIN PARSONS: Mr. Speaker, I guess we are no further ahead if we have two coming to replace the two that are leaving. It is pretty well the status quo, and that, again, does not give much comfort to those who need the surgery.

Mr. Speaker, the Wait Time Alliance is comprised of fourteen Canadian medical specialty societies. Last week they released their report card on wait times in Canada in which this Province fared very poorly. One of the issues identified by the alliance is the failure to update wait time data for more than a six month period. They classified this lack of data as a worrisome trend.

I ask the minister: Why is your government one of two in Canada that is failing to update key wait time data figures in a timely fashion?

MR. SPEAKER: The hon. the Minister of Health and Community Services.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Thank you, Mr. Speaker.

I read the Wait Times Alliance report closely and I can indicate to the member opposite that the issue of the Web site will be rectified as soon as possible. Mr. Speaker, that also the updating of information is something that will be - further emphasises will be placed upon.

Mr. Speaker, in Budget 2010 we outlined a number of ways to reduce wait times in terms of investments of money. Such as, Mr. Speaker, increasing the number of operating rooms, $1.1 million; $348,000 to help reduce CT wait times; $150,000 for two new speech pathologists. Mr. Speaker, we have invested money to operate the MRI services in Central Newfoundland; a $1.15 million to enhance surgical services at Western Memorial Hospital.

So, we invested for this year, Mr. Speaker, $4.7 million in reducing wait times. There is obvious – there is other work that has to be done. As I indicated on Friday past, I had my officials together, indicated that there will be a committee put in place within the department, a special division to address the wait times issues; that whatever resources were required by that division will be provided to them and that we will continue to address this very serious issue.

SOME HON. MEMBERS: Hear, hear!

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

MR. KELVIN PARSONS: Thank you.

Mr. Speaker, I guess notwithstanding the investments, we still fare very, very poorly on the report card. We have a lot left to do.

Mr. Speaker, every day we receive phone calls from individuals who are very concerned with the amount of time it takes to receive their treatments and surgeries. Unfortunately, as confirmed by the alliance in their report, it is very difficult to get information from this government.

I ask the minister: What actions will you now take from this report to ensure your department's lack of accountability to the people of this Province when it comes to reporting and reducing the wait times?

MR. SPEAKER: The hon. the Minister of Health and Community Services.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Mr. Speaker, all of the e-mails that are sent to my e-mail address come through. None are filtered out, and I can tell you that a lot of them deal with wait times.

I understand, Mr. Speaker, the frustration, the anxiety, the stress of waiting to have a surgical procedure performed, but, Mr. Speaker, the situation is not as dire as the hon. member opposite would have us believe. For example, in hip and knee replacement where we fared very poorly, in Central Health they were 94.7 per cent and 89.7 per cent; Western Health, 100 per cent on hips and 93.3 per cent on knees; in Eastern Health we ran into a problem.

Also, I understand, Mr. Speaker, that in Lab-Grenfell the numbers are suppressed in that we do not have enough surgeries being performed. That is an issue I am going to have to ask Lab-Grenfell to look at considering we have four general surgeons in St. Anthony, and apparently, we also have a hip and knee surgeon. So certainly, we have to look at all of these issues and determine what is going on.

SOME HON. MEMBERS: Hear, hear!

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

MR. KELVIN PARSONS: Thank you, Mr. Speaker.

Let's talk about some of the areas that government does report on. Mr. Speaker, every quarter, this government puts out a press release trying to convince people that they have a handle on wait times in this Province for health procedures. The problem with this approach, as identified in this report, is that the Province only highlights five priority areas, a far cry from the hundreds of complex procedures offered in our health care system. The alliance feels that this reporting must be expanded to include other areas beyond these five priority areas.

I ask the minister: Why doesn't this government report on other areas to ensure that we receive a true picture and that a true picture is given on the entire health care system in this Province, rather than the five areas that you highlight?

MR. SPEAKER: The hon. the Minister of Health and Community Services.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Yes, thank you, Mr. Speaker.

It is my understanding that the Wait Time Alliance was formed in 2004 and it is consortium of fourteen national medical speciality societies and the Canadian Medical Association. The Wait Time Alliance's goal, Mr. Speaker, is to improve wait times in five priority benchmarked areas, being: radiation, cardiac bypass, cataracts, diagnostics, and hip and knee replacement.

So, in addition to the national benchmarks which are set, Mr. Speaker, they have also established consensus-based wait time targets in the following areas, such as: obstetrics, gynaecology, emergency gastroenterology, et cetera.

Mr. Speaker, the ministers get together, and the federal government, a number of years ago, said we will provide money, you have to deal with certain – what wait times are you going to address as a priority. In this particular Province, Mr. Speaker, and you remember earlier this year we signed an agreement with the other provinces if we could not reach the benchmarks in radiation therapy that we would send people outside of the Province.

Mr. Speaker, what we have here –

MR. SPEAKER: Order, please!

The hon. the Opposition House Leader.

MR. KELVIN PARSONS: Thank you, Mr. Speaker.

Mr. Speaker, the Canadian Paediatric Surgical Wait Times Project show that, on average, one-third of children receive surgery past acceptable wait times. The report states, and I quote, "…delays beyond critical times during a child's development may result in a lifelong disability."

I ask the minister: What is this government doing to address these unacceptable wait times in this Province in paediatric surgery?

MR. SPEAKER: The hon. the Minister of Health and Community Services.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Yes, Mr. Speaker, I think if the hon. member had read the report closer he would see that a lot of the criticism in relation to these wait times are outside the Province of Newfoundland and Labrador.

Mr. Speaker, the paediatric section of the report highlights that 73 per cent of children in this country receive surgery within the benchmarks set by the paediatric group; so that is a B grade. There are more than 17,000 waiting longer, Mr. Speaker.

In this Province, it is not an issue here with some of these surgeries, because they undergo surgical treatment - and there are no children currently waiting for either strabismus, which is wandering eye, or cleft lip-palate. There is no one waiting at this point in time for either of these procedures at the Janeway Hospital. So, Mr. Speaker, we are certainly doing well on the paediatric side, and the issues highlighted are certainly serious, but seem to be a bigger problem in the rest of the country.

SOME HON. MEMBERS: Hear, hear!

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

MR. KELVIN PARSONS: Thank you, Mr. Speaker.

I say to the minister, I did read the report and read it very carefully. Actually, the more you read it, the scarier it gets when it comes to some of these procedures in this Province.

Mr. Speaker, on June 8, we questioned the Minister of Environment relating to infrastructure in Placentia Bay to deal with oil spills, including tugboat services that would be required. The minister did not seem to have any information at that time, or interested enough to challenge the federal government on their oil spill response preparedness and the infrastructure needed to react to a spill. We learned last evening, through a CBC story, that Transport Canada actually relaxed the rules related to tugboat services in Placentia Bay in April of this year. The FFAW has expressed concern as to what this could mean in the event of a spill.

I ask the minister: Were you aware of these changes, and if so, why did you not advise the House of Assembly of that information when you were questioned in this House three weeks ago?

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

SOME HON. MEMBERS: Hear, hear!

MS JOHNSON: Thank you, Mr. Speaker.

Mr. Speaker, this is certainly a concern of ours. Anything that happens in the Province of Newfoundland and Labrador, particularly in Placentia Bay for the fisherpeople and the people who live in and around it, certainly is a concern of ours.

Mr. Speaker, when I did hear this, I put a call in to the federal Minister of Transport Canada. They have graciously accepted to take a call from us tomorrow. They are very receptive to the concerns we have, and I will be speaking with them on this tomorrow.

SOME HON. MEMBERS: Hear, hear!

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

MR. KELVIN PARSONS: Thank you, Mr. Speaker.

Over the past several weeks, we have seen the damage that can occur when a major oil spill takes place. Placentia Bay has been identified as the most likely place in Canada for an oil spill to take place, and it is predicted that an oil spill in the range of 10,000 barrels will likely occur there within the next thirty years.

I ask the minister: In light of these concerning statistics, why would any changes be allowed that would weaken the oil response in Placentia Bay; and why have you not been involved in this prior to now when somebody brings it to your attention?

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

SOME HON. MEMBERS: Hear, hear!

MS JOHNSON: Thank you, Mr. Speaker.

Mr. Speaker, we are very involved. Of course, the Department of Environment and Conservation and the Department of Natural Resources are very involved in this. As the hon. member opposite would know, the Minister of Natural Resources and government commissioned Captain Mark Turner to do a complete review; included in that review will be Placentia Bay.

Mr. Speaker, as I mentioned in the House before, we also participate on REET, which is the Regional Environmental Emergencies Team, and that is a very comprehensive team. There is a lot of information sharing that happens there. Certainly, if anything should happen, we would be on the ground to help out in any way possible we can.

The key, Mr. Speaker, is prevention. I have had discussions with the Coast Guard, with the federal minister's office, and the Minister of Transport Canada's office in ensuring that all of the policies and the procedures that they have in place are certainly acceptable.

Mr. Speaker, this review that is being done by Captain Mark Turner will certainly capture all of that. If there is anything we can do to make our waters safer here, we will certainly do it (inaudible).

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for the District of Port de Grave.

MR. BUTLER: Mr. Speaker, the Save Our People Action Committee, it is my understanding, met with government today to discuss the ways of addressing issues related to moose-vehicle collisions. I have to say, this is not the first time that the committee has brought forward issues to the government in trying to get some concrete action to address this problem.

I ask the minister: Did you commit to any new concrete measures or investments that will help address the growing issue in our Province?

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

SOME HON. MEMBERS: Hear, hear!

MS JOHNSON: Thank you, Mr. Speaker.

Yes, the Minister of Natural Resources, the Minister of Transportation and Works, and myself and officials did meet with the committee this morning. It was a lengthy meeting. We had a good discussion for almost two hours.

It was a really good opportunity to share information, to report back to the committee as to the work we have been doing. We have been doing a lot of research with other jurisdictions. I gave them some more information in terms of the moose management plan that we intend to do consultations on in the near future. We explained some further information in terms of the moose management and licensing regime. There were also discussions around fencing, and clearly, the Minister of Transportation and Works highlighted all of the work we are doing in terms of brush cutting around the Province and he showed them areas where they have identified as priorities and we have done.

We have listened to them and we have committed to having further discussions and keeping the communication lines open.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for the District of Port de Grave.

MR. BUTLER: Mr. Speaker, I want to say I am glad the meeting went well.

Mr. Speaker, the committee has brought forward a number of proposals to the government in the past and my understanding according to the media yesterday they were bringing forward eight additional recommendations at this meeting. I was just wondering if any of the issues that have been discussed with regard to including fencing of dangerous sections of our highway or the establishment of the 1-800 number to try and bring the report on nuisance moose on our highways.

I ask the minister: Have they committed to implementing any of the options that have been brought forward by SOPAC?

MR. SPEAKER: The hon. the Minister of Transportation and Works.

SOME HON. MEMBERS: Hear, hear!

MR. HEDDERSON: Yes, Mr. Speaker, we spoke on any number of strategies that would be possible perhaps to make the roads safer with regard to moose-vehicle accidents.

With regard to fencing, obviously that is under review now as we look at the success or lack of success in other jurisdictions and, of course, presented back to the committee today that fencing does entail a lot of challenges, given our geography, given our snowfall, given the road system that is here in Newfoundland and Labrador. We did make a commitment, Mr. Speaker, to the committee that we would be undertaking the proper research to look at the suggestions that they brought forward. We will keep in constant communication with them and report back any progress or any information that is applicable to this particular issue.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for the District of Port de Grave.

MR. BUTLER: Mr. Speaker, we have in the past heard a lot of rhetoric from government on their plans to address the problem of moose-vehicle collisions in this Province, but I have to say, to date we have not seen a lot of action. I know each and every week that goes by we hear talk of accidents where people's lives are changed due to serious injuries.

So, I ask the minister: When will the people of this Province see some real action from this government on the moose problem in Newfoundland and Labrador?

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER WILLIAMS: Mr. Speaker, the people of the Province are seeing some action. I received a letter from a family who had been travelling along the highway, it said: Hi Danny, I just wanted to express my deep appreciation to you and the workers of the Department of Transportation -

MR. SPEAKER: Order, please!

I ask the hon. Premier to paraphrase the letter or to just sum up the content of the letter but not to read directly.

The hon. the Premier.

PREMIER WILLIAMS: Thank you, Mr. Speaker.

They indicated that they were passing along the highway, in the Kona Beach area when a moose came out. Basically, the bottom line on the correspondence that was sent to me, the person said to me that it had been on their mind all day and they felt that they had to contact the Government of Newfoundland and Labrador to say thank you, and on behalf of their family and their coworkers and fellow Newfoundlanders and Labradorians, they expressed to me and to the rest of the members of government: Please continue to clear the brush along the highway because today it saved my life.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for the District of Port de Grave.

MR. BUTLER: Mr. Speaker, I have to concur with what the Premier said, no doubt clearing brush will really help but there is a lot of it that has to be done in various areas of the Province.

Mr. Speaker, the Seniors Resource Centre has been forced to cut two full-time positions and two part-time positions because of funding shortfalls. As a result, the Grocery Bus Program, the Lifelong Learners Program, the Seniors Bridging Cultures Program, and the Friday Friendship Program will have to be cut. The resource centre has asked government for help in addressing these shortfalls but has yet to get a response.

I ask the minister: Is government willing to provide any additional funding so that those programs can be maintained?

MR. SPEAKER: The hon. the Minister of Health and Community Services.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Thank you, Mr. Speaker.

It is my understanding that the Seniors Resource Centre has a budget of approximately $600,000 to $700,000 per year that we provide them with a number of different grants. From my department there is, I think a $50,000 annualized funding and then another $45,000 for a community caregivers program. They also, Mr. Speaker, I understand receive some other money from government. The difficulty with it, Mr. Speaker, and I reviewed this with my officials last week, is that we have no real understanding as to what services they provide and what services other senior centres in this Province provide.

Mr. Speaker, we have numerous seniors organizations, we have seniors groups in every district. So what I have instructed my officials to do is to go back to the - give me a list of all the seniors organizations in this Province, who does what, what can be done by our senior's office within the department, and to determine, Mr. Speaker, what exactly the role of the Seniors Resource Centre is today as compared to what it was when I think they started ten or twenty years ago.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for the District of Port de Grave.

MR. BUTLER: Thank you, Mr. Speaker.

It is a concern, because it was only last year the hon. members, one of his colleagues and myself attended the opening of the Seniors Resource Centre in Spaniard's Bay. So it is not going back ten or fifteen years. This is a resource centre that was only opened last year.

Mr. Speaker, the biggest shortfall in funding comes from the federal government, and the Seniors Resource Centre certainly recognizes that there appears to be a change in culture within the federal system in providing grants to groups such as theirs.

I ask the minister: Is this a concern within the Office for Aging and Seniors, and if so, what is being done to address this change in the federal attitude and will the programs just disappear totally?

MR. SPEAKER: The hon. the Minister of Health and Community Services.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Yes, thank you, Mr. Speaker.

The member opposite has certainly highlighted one of the difficulties that the Seniors Resource Centre finds themselves in today, and that is the cutting in federal funding. Unfortunately, what happens, Mr. Speaker, and I can remember having the conversation with the Seniors Resource Centre when they were going to open up a satellite office. I said: now, the federal government are going to give you funding, will it be sustainable? Of course, it was not, and now they come to us.

What we are doing to do, Mr. Speaker, in both the Office for Aging and Seniors, and in consultation with the development of our long-term care strategy and community service strategy, is look at the services that are provided by various groups to ensure that there is no overlap. Obviously, Mr. Speaker, we are committed to our seniors as a government. We have made gigantic strides, Mr. Speaker, $200,000 recently in Age-Friendly Grants. What we have to do is look at, how can we deliver the services as efficiently and effectively as possible to most of the seniors in this Province and not necessarily support one single group?

SOME HON. MEMBERS: Hear, hear!

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

MR. KELVIN PARSONS: Thank you, Mr. Speaker.

Reports on labour negotiations between Nalcor and the IBEW indicate that talks are going badly. So badly, in fact, that representatives of the IBEW Local 1615 are talking about their first ever strike against Newfoundland and Labrador Hydro. A major stumbling block appears to be Nalcor's refusal to accept government's standard template offer of 20 per cent. According to government statements at the time, this 20 per cent template offer was not optional. The minister was very clear, every public service union was offered this deal and no other deal would be considered.

Can the minister provide an update on these negotiations, and will Nalcor be required to abide by government's 20 per cent template offer?

MR. SPEAKER: The hon. the Minister of Natural Resources and Deputy Premier.

SOME HON. MEMBERS: Hear, hear!

MS DUNDERDALE: Thank you, Mr. Speaker.

Mr. Speaker, the Opposition House Leader is absolutely correct, negotiations are ongoing. Those negotiations, Mr. Speaker, are arm's-length from government. They are between Nalcor and their employees. We encourage both of them to work diligently towards coming to a resolution of the issues. Other than that, Mr. Speaker, I do not have any comment to make on this matter.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for the District of Signal Hill-Quidi Vidi.

MS MICHAEL: Thank you very much, Mr. Speaker.

Mr. Speaker, since 1985 government has received recommendations to make the Human Rights Commission truly independent by making it an agency answerable to the House of Assembly. In 2009, the Auditor General, himself the head of an independent agency answerable to the House, outlined the importance of the commissioners being truly independent.

Mr. Speaker, I ask the Minister of Justice: Why is government still refusing to give the Human Rights Commission true independence?

MR. SPEAKER: The hon. the Minister of Justice and the Attorney General.

SOME HON. MEMBERS: Hear, hear!

MR. F. COLLINS: Mr. Speaker, the Human Rights Commission has been compared to the Child and Youth Advocate's Office and the office of the chief representative, who report to the House of Assembly. These groups, Mr. Speaker, are oversight groups that deal with complaints against the practices, services and policies of government. The Human Rights Commission, on the other hand, Mr. Speaker, deal with the rights and complaints of individuals. Government is not necessarily the focus of these complaints.

Mr. Speaker, as far as the government is concerned and the Human Rights Commission itself is concerned, the system is working fine as it is and that is the way it will stay.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for the District of Signal Hill-Quidi Vidi.

MS MICHAEL: Thank you, Mr. Speaker.

Mr. Speaker, in his 2008 report, the Auditor General spoke to some serious systemic issues related to the functioning of the Human Rights Commission and to something that the minister has just referenced.

There were concerns regarding a perceived conflict of interest when the commission has to hear cases in which government is named as a respondent. So, while the commission has a broader field of area to cover, it also covers cases when the government is a respondent.

The problem is that with these new amendments to the act the minister continues to control the commission's funding, another potential source of conflict of interest. Mr. Speaker, there still is time to make change as we have not yet passed this bill.

So I ask the minister if he would do some more thinking about this issue because the potential for conflict of interest is there and was identified by the Auditor General.

MR. SPEAKER: The hon. the Minister of Justice and Attorney General.

SOME HON. MEMBERS: Hear, hear!

MR. F. COLLINS: Mr. Speaker, if I recall the gist of the report by the Auditor General dealt with a matter of resources that the commission was experiencing several backlogs, did not have the resources to do the job and so on. Since that time, Mr. Speaker, we have invested $500,000 this year alone to provide two extra lawyers and a human rights specialist. We have also put $100,000 into public education. The budget now, Mr. Speaker, of the Human Rights Commission is $1.2 million.

I think, Mr. Speaker, the concerns that were raised by the Auditor General have now been alleviated. Plus the fact there has not been one complaint to date about the independence being in jeopardy with that commission.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for the District of Signal Hill-Quidi Vidi.

MS MICHAEL: Thank you, Mr. Speaker.

I would suggest to the minister that he not cherry pick from the Auditor General's report. Yes, the resource was one issue but the issue of conflict of interest was also an issue that the Auditor General spoke to.

Mr. Speaker, the United Nations adopted a new definition of disability which Canada recognized when we signed a convention on the rights of persons with disabilities in 2007. This new model recognizes that a disability is not something that resides in the individual as the result of some impairment but should be seen as the result of the interaction between a person and his or her environment.

Mr. Speaker, the minister knows this. He knows that is in the UN declaration, yet decided not to include this more modern, inclusive definition in the code.

So I ask the minister: Why wouldn't the government adopt this new definition?

MR. SPEAKER: The hon. the Minister of Justice and the Attorney General.

SOME HON. MEMBERS: Hear, hear!

MR. F. COLLINS: Mr. Speaker, the department took its direction on the issue of disability from the disability office of this government, which is the proper place to take that direction.

Mr. Speaker, it took the form of several discussions back and forth with the disability office. We looked at a number of jurisdictions. After a lot of consultation and a lot of toing and froing, the consensus of opinion was that the definition of disability that we now have in the act was the best one to go with, and that is the one we did.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for the District of Signal Hill-Quidi Vidi.

MS MICHAEL: Thank you, Mr. Speaker.

I am so glad we are better than the United Nations.

Mr. Speaker, transgendered people experience some of the highest rates of violence and discrimination in Canada. Recent human rights cases demonstrate that unless gender identity is specifically included as a prohibited ground of discrimination, the ability of transgendered persons to access employment rights, parental rights, health care, and even basic safety will continue to be challenged.

Mr. Speaker, I ask the Minister of Justice if he will consider amending this bill to include gender identity as a prohibited ground of discrimination in the act.

MR. SPEAKER: The hon. the Minister of Justice and Attorney General.

SOME HON. MEMBERS: Hear, hear!

MR. F. COLLINS: Mr. Speaker, transgendered identity is an evolving issue, and it has a long ways to go before we can pin it down to a definition in an act. In the discussions that we had on this issue, from the other jurisdictions across the country, there was no way you could pin down and define a transgendered identity for the purpose of this act. Mr. Speaker, we were also convinced and persuaded by the Human Rights Commission that any transgendered identity issues can be done under the provision of sex.

MR. SPEAKER: The time allotted for questions and answers has expired.

Presenting Reports by Standing and Select Committees.

Tabling of Documents.

Tabling of Documents

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

MR. MARSHALL: Thank you, Mr. Speaker.

Pursuant to section 26.(5)(a) of the Financial Administration Act, I am tabling one Order in Council relating to funding pre-commitments for the 2011-2012 fiscal year.

Thank you, Mr. Speaker.

MR. SPEAKER: Further tabling of documents?

Notices of Motion.

Notices of Motion

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

MS BURKE: Thank you, Mr. Speaker.

Under Standing Order 37, I request leave to withdraw the motion respecting the reappointment of the Information and Privacy Commissioner, Motion 3.

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

MS BURKE: With that, Mr. Speaker, I give notice that I will ask leave to move the following resolution, resolution respecting the appointment of an Information and Privacy Commissioner.

BE IT RESOLVED by the House of Assembly as follows:

WHEREAS section 42.1 of the Access to Information and Protection of Privacy Act provides that the Information and Privacy Commissioner is to be appointed by the Lieutenant-Governor in Council on a resolution of the House of Assembly;

NOW THEREFORE BE IT RESOLVED that Mr. Ed Ring be appointed as the Information and Privacy Commissioner.

MR. SPEAKER: Further notices of motion?

The hon. the Opposition House Leader.

MR. KELVIN PARSONS: Thank you, Mr. Speaker.

I have a notice of private member's motion. I guess I require leave. Normally, it is given on the Monday proceeding the Wednesday, but yesterday being a provincial holiday we technically need leave of the government to do this.

MR. SPEAKER: Does the hon. the Opposition House Leader have leave to present a private member's motion in lieu of the holiday yesterday?

AN HON. MEMBER: Leave.

MR. SPEAKER: The hon. the Opposition House Leader, by leave.

MR. KELVIN PARSONS: Thank you, Mr. Speaker.

This is moved by the Member for Burgeo & La Poile.

WHEREAS the House of Assembly is the cornerstone of responsible government in Newfoundland and Labrador; and

WHEREAS the smooth and proper function of the House of Assembly is essential to good government, effective legislative process and an open democratic society; and – this is seconded by the way by the Member for Port de Grave.

WHEREAS there is a clear, present and pressing need for reform in the Standing Orders and other rules and conventions which govern the operations of the House of Assembly;

THEREFORE BE IT RESOLVED that this House of Assembly instruct the Standing Orders Committee to recommend changes to the Standing Orders and other conventions governing Oral Questions and the legislative process, and to consider, among other things:

1. Methods of elevating the decorum of all members to strengthen the dignity and authority of the House;

2. Examining the convention that the minister questioned need not respond;

3. Dedicating one question period per week exclusively for questions to the Premier;

4. Establishing guidelines for the advanced release of Ministerial Statements and the full text of bills to ensure that members have sufficient time to examine and analyze their content;

5. Strengthening the operations of standing and special legislative committees to allow analysis of bills with public hearings if required;

6. Prohibiting substantive amendments to private member's motions; and

7. Streamlining the introduction and consideration of private members' bills;

BE IT FURTHER RESOLVED that the Standing Orders Committee reports its finding to the House, with proposed changes to the Standing Orders and other conventions, within six months of the adoption of this order;

AND BE IT FURTHER RESOLVED that the report be made public immediately by posting it to the House of Assembly Web site on the day that it is received.

Thank you, Mr. Speaker.

MR. SPEAKER: Further notices of motion?

Answers to Questions for which Notice has been Given.

Petitions.

Petitions

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

MR. KELVIN PARSONS: Thank you, Mr. Speaker.

Mr. Speaker, I am back again with, what I call a porta-potty petition, I guess. The Minister of Transportation would be very pleased to hear this. First of all, I will read it in for the record, Mr. Speaker.

WHEREAS the people of La Poile must use the provincial ferry system in order to travel to and from La Poile; and

WHEREAS the people of La Poile and visitors are required to wait at the Town of Rose Blanche-Harbour Le Cou from time to time for ferry services – all of the time, actually; and

WHEREAS there is no restroom waiting area at the Town of Rose Blanche-Harbour Le Cou where users of the ferry service may utilize washroom facilities; and

WHEREAS citizens of all ages, including men, women, children, seniors and disabled persons, require washroom facilities as a basic human need in the course of their travels, and particularly while awaiting the transit systems; and

WHEREAS it is an abuse of human dignity as well as health and safety regulations to allow such degrading and dehumanizing circumstances to continue;

WHEREUPON the undersigned, your petitioners, humbly pray and call upon the House of Assembly to urge the Department of Transportation and Works to immediately construct and operate a washroom-restroom facility at the Town of Rose Blanche-Harbour Le Cou such that all users of the provincial ferry system may be able to utilize such waiting area-washroom facilities.

As in duty bound your petitioners will ever pray.

Mr. Speaker, the House will recall that some years ago I brought a similar petition to this House on behalf of the residents of Ramea and Grey River. We called it the porta-potty petition because the government response – not this minister but the prior minister – the government response at the time – it was in the middle of January or February – was to put porta-potties outside the wharf. Now, that is hardly practical, of course, in rural Newfoundland in the middle of winter when people are waiting on a wharf, waiting for the ferry to arrive, and the ferry is late.

Of course, the government, in its wisdom – I think it was eighty-seven petitions after we first started – they built such a facility down in Burgeo to accommodate the people in Ramea and in Grey River who use that coastal service.

It is not only the resident; it is any tourist, for example, who comes to this Province. Nobody arrives at the ferry terminal just in time to drive on board the boat. Quite often, the boat might be late due to weather conditions and so on and people actually need to use the washroom. We had embarrassing incidents previously when children, women, adults, kids, had to use the washroom out on the side of the dock. That might have been acceptable back 200 years ago, but it is certainly not acceptable in this day and age when anybody is using a public transit system.

That is the genesis of this petition, Mr. Speaker. I have gotten several petitions from the people of La Poile in that regard, and I will be bringing those forward as time goes on.

Thank you, Mr. Speaker.

MR. SPEAKER: Further petitions.

The hon. the Opposition House Leader.

MR. KELVIN PARSONS: Thank you, Mr. Speaker.

This petition is on behalf of the community of Grey River.

WHEREAS the community of Grey River is an isolated community which is serviced by the provincial ferry system; and

WHEREAS the provincial ferry service is the only means of travelling between Grey River and Ramea or Burgeo; and

WHEREAS the Gallipoli from time to time services Grey River for the purpose of vehicular transportation; and

WHEREAS the Gallipoli has been unable to provide this service to Grey River for the past number of weeks as a result of mechanical problems; and

WHEREAS the citizens of Grey River are unable to take their vehicles in and out of Grey River; and

WHEREAS residents of Grey River have medical appointments out of the area and need their vehicles to travel from Burgeo to Corner Brook and St. John's for these and other appointments;

WHEREUPON the undersigned, your petitioners, humbly pray and call upon the House of Assembly to urge the Department of Transportation and Works to immediately provide alternate arrangements for the people of Grey River to have their vehicles extracted to and from their community;

And as in duty bound your petitioners will ever pray.

Mr. Speaker, the people on the South Coast of this Province who require and need the coastal service have an understanding of what weather conditions do to the service, and certainly have an understanding of what mechanical breakdowns do to the service. This is not a case of being unappreciative for what exists. It is a very good rate, for example, when anybody travels, and the minister's office has certainly been responsive whenever this member has contacted him to find out what can be done as alternatives; however, they have implored upon me that I bring this petition to the House of Assembly – and that is part of my job as an MHA, of course.

Regardless of what relationship I have in trying to resolve these with the minister and his staff, the residents have implored that I do this, and I feel it is my obligation to do so, and that is why I bring this forward.

For the benefit of those who might be listening, not only will I bring it forward to the minister at this time – which I have done publicly – I will also be speaking with the minister, and he has indicated he will speak with me some time later this afternoon so we can hopefully find some positive resolution to this most unfortunate situation.

Thank you, Mr. Speaker.

MR. SPEAKER: Further petitions.

Orders of the Day.

Orders of the Day

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

MS BURKE: Mr. Speaker, I move Motion 4, pursuant to Standing Order 11, that this House not adjourn at 5:30 p.m. today on Tuesday, June 22, 2010.

Further, Mr. Speaker, I move Motion 5, pursuant to Standing Order 11, that this House not adjourn at 10:00 p.m. today on Tuesday, June 22, 2010.

MR. SPEAKER: The motion is that this House do not adjourn at 5:30 o'clock today, being Tuesday, June 22, 2010.

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, ‘nay'.

The motion is carried.

Motion carried.

MR. SPEAKER: The next motion is that the House do not adjourn at 10:00 o'clock p.m. today, Tuesday, June 22, 2010.

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, ‘nay'.

The motion is carried.

Motion carried.

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

MS BURKE: Mr. Speaker, I move, seconded by the hon. Minister of Justice and Attorney General, that Bill 31, An Act Respecting Human Rights, be now read a third time.

Is it the pleasure of the House to adopt the motion that Bill 31, An Act Respecting Human Rights, be now read a third time?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, ‘nay'.

The motion is carried.

CLERK: A bill, An Act Respecting Human Rights. (Bill 31)

MR. SPEAKER: Bill 31 has now been read a third time and it is ordered that Bill 31 do pass and that its title be as on the Order Paper.

On motion, a bill, "An Act Respecting Human Rights," read a third time, ordered passed and its title be as on the Order Paper. (Bill 31)

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

MS BURKE: Mr. Speaker, I call Order 2, second reading of Bill 3.

Motion, second reading of a bill, "An Act To Amend The Income Tax Act, 2000." (Bill 3)

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

SOME HON. MEMBERS: Hear, hear!

MR. MARSHALL: Thank you, Mr. Speaker.

It is my duty here today, in my capacity as the Finance Minister, to speak to second reading and to urge the passage of Bill 3, which is An Act To Amend The Income Tax Act, 2000.

The Explanatory Note that is on the inside of the bill states that the amendments that are contained in the bill would provide clarification with respect to the amount that the taxpayer may claim for charitable and other donations. It will also clarify when a claim for the research and development tax credit must, in fact, be made or filed, and it will remove an ambiguity contained in the legislation as to whether tax credits may be applied against capital tax payable.

I know everybody is on the edge of their seats, looking forward to the debate here. These amendments could be referred to as technical amendments or housekeeping amendments that we are bringing forward on the recommendation of the Canada Revenue Agency, which administers and which collects and enforces taxes on behalf of our government in accordance with a tax agreement.

There is an agreement that is set out between the Canada Revenue Agency and the Province, and that is a federal-provincial tax collection agreement. Under section 1.4(c) of that agreement it says, "the Province will… maintain, where appropriate, the provisions of the Provincial Act… similar to the provisions of the Federal Act… that relate to the administration, enforcement and collection…" of taxes. Article 4.10 of that same agreement says that the federal government "may… specify the amendments and modifications of the Provincial Act… that the [federal] Minister considers necessary."

So what we are doing with this bill today, we have had discussion over the years with the federal government. They have made a number of recommendations for – particular recommendations to amend the provincial Income Tax Act in order to have greater similarity, greater conformity and greater clarification with federal legislation and our own provincial income tax legislation.

As I said, the provincial Income Tax Act is administered, enforced and collected by the Canada Revenue Agency on behalf of the Province. These proposed technical amendments will provide clarification, or technical amendments or housekeeping amendments, that will not change the way that the CRA administers, enforces or collects our income tax. In other words, what we are doing is bringing the legislation in line with the manner in which the CRA has been administering our legislation.

The first change has to do with charitable donations under section 10 of the act. That allows someone to claim a charitable donation contribution. You can claim in any given tax year for provincial donations as well, and the amendment is to make the amount claim the same. Evidently, what is happening is that the wording of the legislation does not say that the amount claimed for that charitable donation under the federal tax and under the provincial tax has to be the same. I think the words that are used are: up to. The purpose of this amendment is to provide some clarification here.

Basically, the Canada act, the federal act allows a credit in a tax year for any donation that happens to be made in that year or in any of the previous five years if not previously claimed. It is understood that some taxpayers may, for tax planning reasons, want to claim a different donation amount for the provincial credit compared to what they are claiming for the federal credit due to differences in other federal and provincial parameters.

During some discussions in 2001, it was agreed that the same donation amount would be claimed for the calculation of both the federal tax and the provincial donations tax credit in a year. The Canada Revenue Agency advised us that the current wording in our act is not clear regarding the intent of the provincial donation tax credit because section 10.(1) says that the amount claimable for the provincial credit shall not exceed the amount of the federal credit. In other words, it does not say it has to be the same number, the same amount. It says that it shall not exceed it. So, the purpose of this bill is to seek an amendment to the act to clarify and to make certain that contribution amounts claimed in a taxation year for the provincial donations tax credit is the same as the contributions amount claimed in that year for the federal donations tax credit. That is the first one, Mr. Speaker. That is the first of four.

The second amendment deals with the scientific research and experimental development tax credit. Our Income Tax Act provides for a provincial scientific research and experimental development tax credit and the federal legislation provides for a similar tax credit. The program is being jointly administered by the Canada Revenue Agency. The purpose of the amendment contained in the bill is to add a provision to our legislation to ensure that the timeline for filing for the provincial credit is the same as the federal credit.

Under the federal legislation, you must file your application for the credit - I think it is within twelve months of filing your income tax return. It had been intended that those federal administrative details – in other words, the twelve month limitation – would apply to the provincial credit as well. It has subsequently been determined that in the case of filing deadlines, the provincial act does not provide for the twelve month deadline, and our act prescribes the taxpayer may file for the credit. There is no deadline.

We could have a situation where someone would apply for the federal tax credit within twelve months after filing an income tax return and then it might be two or three or four years later the person applies for the provincial tax credit. So the intent is that the filing requirements under both pieces of legislation should be the same. That is what the CRA has, in fact, that is what they have been doing. Without an amendment to our legislation, as I said, a taxpayer could file both credits at different times, and we want to change this to support the Canada Revenue Agency's present practice of administering the provincial credit on the same basis and the same filing timelines that they have been doing for the federal research and development tax credit.

The third amendment, Mr. Speaker, relates to capital taxes. We do not impose, in this Province, a capital tax on business other than banks, trust and loans companies that have permanent establishments within the Province. The capital tax is applied on the taxable paid up capital that is allocated to this Province. It includes paid up capital stock, contributed surplus, retained earnings and reserves.

Now, on November 1, 2008, the legislative authority for our capital tax was moved to the Income Tax Act. The purpose at that time was to enable the Province's capital tax on banks, loans and trust companies to have it harmonized with the federal capital tax. Under our act, under the provincial act, if a company's aggregate paid up capital is less than $10 million, the taxable paid up capital, the amount of the paid up capital on which a tax is paid is less than $5 million.

The Canada Revenue Agency, as the new administrators of the Province's capital tax, has advised us that the Income Tax Act of 2000 should be amended relating to the eligibility of the capital deduction for certain groups. We want to make clear that if groups are related, if there is a related group of affiliated corporations that make up a group, that the deduction will apply to the group and there will not be a separate $5 million deduction for each member of the group. So we are proposing that amendment to ensure that the $5 million allocated is to the group members and is only available if the total capital of the corporation and all the related companies is $10 million or less.

The final amendment, with respect to the capital tax, has to do with the non-deductibility of tax credits. The provincial capital tax is now included in the Income Tax Act. Formerly, as I said earlier, it was included in the Financial Corporation Capital Tax Act, but we moved it to the Income Tax Act because of the relationship between that legislation and our federal-provincial tax collection agreement whereby the CRA is authorized to administer our income and capital tax.

Notwithstanding that, the capital tax in this Province is meant to be a standalone tax within the legislation and is not to be impacted. In particular, the capital tax we charge is not to be reduced by the income tax paid by corporations or a group of corporations in this Province. The distinction between this Province's capital tax and income tax was recognized because when this was being considered initially - the federal government does it differently. The federal government allows the income tax to be deducted from the capital tax and our Province rejected that. Our Province wanted to make sure that the taxes were separate and that the amount of capital tax paid by a corporation or by a group, a corporate group, would not be reduced by the amount of income tax that they were paying. So, it was a conscious decision of our government to reject the federal model, because in this Province capital tax has always been paid in addition to any provincial income tax paid.

On this basis, after consultation with the Canada Revenue Agency, the Department of Finance has recommended that this legislation be brought forward to clarify that provincial capital tax will not be reduced in this Province by any income tax credits in the legislation. This is consistent with how the Canada Revenue Agency has in fact been administering the provincial capital tax anyway because of a shared understanding between the provincial Department of Finance and the CRA on how the Province intended that the provincial capital tax would work.

So, I can see everybody is really interested in these amendments. They are indeed technical amendments. They are a housekeeping matter just to clean up - to make sure that the understandings are in fact properly reflected in the legislation in the law of the land.

I look forward to the debate and would urge passage of this particular legislation.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

I wonder if the hon. Minister of Finance and President of Treasury Board would read into the record that the act be now read a second time and who is seconding this particular second reading.

The hon. the Minister of Finance and President of Treasury Board.

MR. MARSHALL: Mr. Speaker, I would move, seconded by the Minister of Justice and Attorney General, that second reading now proceed and that the bill now be read a second time.

MR. SPEAKER: It is moved and seconded that Bill 3, An Act To Amend The Income Tax Act, 2000 be now read a second time.

The hon. the Member for the District of Signal Hill-Quidi Vidi.

MS MICHAEL: Thank you very much, Mr. Speaker.

I am glad to have the opportunity to speak to this bill. The minister pointed out that the bill itself, being an income tax bill, is pretty dry and technical. He has given a good explanation of why we need this bill, so maybe because it is a finance bill, I can bring up some issues that can be more interesting than the technicalities of the income tax bill itself. We all know that when we have bills that are based in finance and based in issues around government's income that we can, in the House, speak to any issues that pertain to the running of government because they all, in one way or another, fit under the issue of finance and income.

The state that we find ourselves in this Province right now - and it is not something that I am complaining about - is that we have resources as we have not had before. We have said that, many of us in the House, both on the government side and on the Opposition, and both Opposition parties point out that we have resources that we have never had before because of the oil exploration that is going on in the offshore. It is wonderful that we have those resources. It is wonderful that we have a Budget that is well over $6 billion this year. The income that we receive from the oil industry, as we know, is a major piece of the resources that the Province gets. Even though other industries, such as the fishing industry and the mining industry, do contribute a lot to the government coffers, they pale in comparison to the amount of money that we now receive through oil development in our offshore.

It is something that we need to think about from several different perspectives, one of course just from the perspective of the longevity of a non-renewable resource such as oil. We know that it has a lifespan and that while we will continue and can continue to explore and the oil companies are going to continue to explore beyond where they are now, every new well that is found or every new pocket of oil that is found, is still another pocket of a non-renewable resource. There is going to be a day when there will be no finding of any more oil out there.

So we have to take that seriously. We have to take that with great consideration and we have to be using the moment that we are in as a moment for planning for the day when the oil does not exist. If we do not do that, we are going to be in trouble.

The other part to the issue is, knowing that the oil is out there and wanting to do development to get more money from that oil is a responsibility that we have as a Province, a responsibility that we have as a government, and it is also a responsibility of the industry. The responsibility is not just to find the oil that is out there. That is one responsibility, but we also have to do that with care, we have to do that with concern, and we have to make sure that in doing it we are not running risks that could be of danger to the environment, of danger to us a Province. It is a very fine line that we have to walk, Mr. Speaker. A very fine line between wanting to explore, wanting to get as much as possible and the damage that we can be doing by doing that exploration.

So, as we know, right now we have quite a discussion going on, not just in this Province, not just in Canada but worldwide with regard to exploration. It is a major challenge because once you go out into the ocean to do your exploration things becomes much more difficult. Things become much more tricky. There is much more risk involved because we are dealing with oil that is at the bottom of the ocean at depths that are extreme. So, for example, we have the Chevron well that is being dug in the Orphan Basin, the exploratory well being dug at a depth of two point six metres beneath the ocean surface. It is the deepest exploration well that is going on in this country and it is the deepest that we have dug here in Newfoundland and Labrador in our offshore.

Now I know that Chevron is used to doing deepwater wells and I know that other companies are doing deepwater wells. We know, for example, that the well that had the blowout in the Gulf of Mexico that that well was being dug at one point five metres, which is 1,100 metres less deep than the one that we have in the Orphan Basin. We know the companies are out there and that they are doing the work and they do have a lot of experience, but we also know that mistakes happen. We also know that decisions can be made sometimes based on monetary considerations, based on the considerations of if something is taking a longer time to do time means money in any industry, but it certainly means money in the oil industry when so much money has to be expended per hour when you are talking about exploration that time means money. You can get decisions that are sometimes made from a point of view of expediency.

Some of the information that we are getting already from the Gulf of Mexico, while we certainly do not have anywhere near a final answer on what happened in the Gulf of Mexico, some of the information that we are getting is information that is telling us that it is quite likely that BP made those types of decisions, decisions that were being made expeditiously, decisions that were being made without careful thought, decisions that were being made based on: that is going to take too long, and if it is going to take too long it is going to take too much money.

So we do know that companies are out there drilling at depths that in some ways they cannot deal with, especially if there is a blowout. Dealing with blowouts in deep water is very, very difficult. So, companies are out there. Some have done a better job than others, some have a better track record than others, but we have learned from the Gulf of Mexico that mistakes can happen and that if we get a blowout in deep water then we have major problems without a relief well being dug during the exploration stage.

Now, it is an interesting dynamic going on among the oil companies, and some of us – I am sure I am not the only one who was following this in the media last week, where you had the other big players in the world, the other big oil companies who are involved in exploration, and especially in deep water exploration, you had them all pointing the finger at BP and saying: Oh, BP is a bad company. BP made bad decisions a few months ago, and those bad decisions led to the blowout; and BP did not care. BP was trying to save money, and we definitely would not do that. Now you have the major oil companies on the world stage vying with one another, trying to convince governments that this happened because BP was so bad, and we are a good corporation and it would never happen with us.

What is going on in that dynamic is the other oil companies - and BP included, but the other oil companies in particular - concerned that the stoppages that have been put on exploring in deep water by places like the United States - and Norway has now joined that, temporary stoppages that have been put on. We have not done it because we say that we can run the risk, but places where they have put the stoppages, and they are temporary - the companies, of course, are terrified that they are never going to be able to drill again in deep water. So they are all pointing the finger at BP and saying: BP was a bad player on this scene and it can never happen with us. It happened with BP, but it cannot happen with us.

I guess what I have to say, both to the government and to ourselves as a people, is that we know there may be some truth to that, but we know that mistakes can happen with everybody. Mistakes happen all of the time, and we have had some major disasters that have been extremely costly, that have happened. We look at the Ocean Ranger disaster; again, mistakes, mistakes of design, mistakes in operations, all kinds of mistakes that led to that disaster.

Look at something like the Titanic, which is long before any of our memories in this House but which is part of our history as a people, the whole reality of the Titanic going down, the Titanic which could not possibly sink. It was impossible for it to sink, and it sank.

We have to think carefully as we explore. Whether the exploration is under the water in the oceans, or whether the exploration is in outer space where we have also had disasters, we always have to look at what else can be done besides this exploration. Is this exploration the only way to go? Can this exploration be slowed down? Should the exploration be slowed down? These are the questions that have to be asked, and we have to look at all of the factors that come to play.

In the House last week, or the week before, the Premier, in response to a question that I asked, more or less said, okay, we know there is a risk, that doing the deep water drilling is a risk, but, you know, risk - if it happens, we will deal with it, and the risk is worth the billions of dollars that we are going to make from production, for our social programs.

I, as much as anybody in this House - and we all know it; we all know what I speak to in this House - I am absolutely committed to our social programs, there is no doubt about it, but, in spite of that, I cannot say that we run risks in order to make money, in order to pay for our social programs. We have to weigh the risks that we are running. We have to look at how the environment is being impacted by what we are doing. We have to ask questions.

What if, for example, there is a blowout during an exploratory phase and we cannot get a relief well dug until three months after the blowout? What is the issue that we are dealing with there? What about the money that is going to be spent on the cleanup if there is a blowout? We have to look at money from both angles. I am sure that BP is not happy about the fact that it has had to put $10 billion in reserve in responding to the U.S. government, promised to put $10 billion in reserve in case

I am sure that BP is not happy about the fact that it has had to put $10 billion in reserve, in responding to the U.S. government – promised to put $10 billion in reserve, in case $10 billion is needed for the cleanup of the spill in the Gulf of Mexico. It very well could be $10 billion, when we know how much oil is still spewing out on a daily basis. I heard 100,000 barrels today, is what they are saying now. If that is happening every day, and we do not expect a relief well until August, then we can count on the fact that maybe BP will have to use all of that $10 billion.

So, whether we are talking about receiving money down the road for social programs, and the risk of losing that, or whether we are talking about the risk of having a blowout that could cost us billions of dollars, these are two issues that have to be looked at side by side. I think it is a rather specious argument to say that we take risks based on the fact that the money that we are going to make from oil is going to pay for social programs.

I still bring forward to the House that the income that we are going to make in this industry down the road has to be income that we have thought through, and we have to make sure that the decisions that we are making, that the approvals that we are making, are approvals that are good, both for our economy as well as for the environment in which the exploration is being done.

We have an example that came up this week in the media, and it is something that I certainly did not know about until I heard it in the media – I am not sure that the Minister of Environment and Conservation heard about it before hearing it in the media either – but it is the issue of something that the federal government has just done. I find it extremely shocking that the federal government has permitted one of the companies in this Province, North Atlantic Petroleum refinery, has permitted them to change the number of people on the tugboats that bring the tankers up Placentia Bay.

Mr. Speaker, this is something that is extremely problematic, and it is an example of government giving in to a request from a company, giving in to a request that was made by the company itself. Now, we know that companies are there to make money. We know that. That is their bottom line; it is always their bottom line. Even though they will pay attention to regulations that are in place, and as long as regulations are there they will do environmentally what regulations say they have to do, they will also push the limit. They will also see what else they can get. Here we have North Atlantic making a request to the federal government and the federal agency giving permission for them to cut down the number of people on the tugboats from four to two.

Now, I have not researched this in depth but I have heard the representative from the fishermen's union, from the FFAW in the media since yesterday speaking about the major concern of the FFAW - a concern that is quite legitimate, Mr. Speaker. I do not know how tugboats run, but I am going to repeat what I heard the FFAW representative talk about. What he talked about was the fact that if you have – the two designated people who are on the tugboat have two very particular tasks to perform, and if an emergency comes up while those tugboats are operating you do not have extra hands on the tugboat to deal with the emergency, whether that emergency is somebody falling overboard, whether that emergency requires that the tugboat be involved in handling the ropes from the boat. There are all kinds of things that were talked about by the representative from the FFAW.

It seems to me that the federal agency made a decision that we will take the risk. Well, the chances of that happening are small, the chances of all four people being needed all the time is small so we will take the risk. We will allow North Atlantic to go ahead and to only have two people on the tugboats. We will take the risk. It is that attitude, Mr. Speaker, of we will take the risk that is really bothering me. The role of government is not to take the risk; the role of government is to protect. The role of government is to have regulations in place that protect; that protect the people of the Province, that protect the environment in which we live, and that protects our economy as well. It is government's responsibility to make those regulations.

We had another example of that in the mining industry with Long Harbour. We still have real discussions going on and issues going on around the fact that once again the federal government allowed Sandy Pond to be identified as a place where tailings or the equivalent of tailings can be put into the water, where this pond is going to be completely destroyed and an ecosystem is going to be affected by this pond being destroyed. The bottom line is: Well, it is cheaper for the company if they do that and we will help them save money.

What bothers me, Mr. Speaker, is that in both of these cases this was a federal agency that was giving the permit. It was a federal agency that is allowing exceptions to its own rules but our provincial government has gone along with the decisions of the federal agency. Our provincial government has not contested the exception to the rules that have been allowed by the federal agencies. The provincial government - that says to me - has the same attitude. The attitude that has been shown with regard to the exploratory well being dug, yes, I know it costs more money, but, Mr. Speaker, we are talking about - when we talk about oil development in particular and exploration in the oil development - companies that have an amazing amount of money. I do not know what the books say about Chevron. I know it is one of the five largest companies in the world. I do know that BP was able to say to the US government we agree with holding $10 billion in reserve so that we have the money to definitely cover the cost of the clean up in the Orphan Basin. I know they were able to say to their shareholders not that you do not get your regular money but we are going to put on hold any extra dividend to you while we try to handle this situation.

The money is there, Mr. Speaker, and these industries, whether we are talking about oil and gas in particular or talking about mining, are industries where the companies have to recognize that when they come into an area of jurisdiction and any area where they are going to be exploring or areas of jurisdiction under governments, that they have to come in and they have to work under those regulations. Now we do know, and I have many examples and I will not go into all of those examples, but we do know that companies in mining, for example, or in oil and gas, when they go into a country, Mr. Speaker, they look to the regulations of that country. If the country that they are in does not make a particular demand on them they will operate under what that country is asking.

Now I know this in particular for some mining companies that are international mining companies, Mr. Speaker. These mining companies are companies where they have one way of operating in Canada, for example, but another way of operating say on an island in the South Seas, in the South Pacific. The way they operate is not based on: We know that this is the best practice and no matter where we are, we are going to do this practice. It is based on we will work under the regulations of a country. That, to me, shows how important it is that governments think carefully about the regulations that they have in place, because ultimately, it is government's responsibility. Ultimately, the companies will do what governments say is the best for their area, is the best for their people, is the best for their economy. If governments are not on top of that, if governments are not carefully looking at what needs to be done, then companies will do whatever the governments ask.

So, we cannot say that we do not have responsibility. The ultimate responsibility is the governments, Mr. Speaker, and I know that does not make it easy. It does not make it easy when it comes to decision making because they know they hold the responsibility in their hands, but that is part of government. That is an essential part of government. So, government has to have the freedom, it has to have the ability to say no to companies or to make demands of companies. I think one of the things that the oil companies are going to have to realize as they go deeper and deeper under the ocean in looking for oil, that they have a responsibility that government is going to demand from them. They have a responsibility to not destroy the environment as they do that.

We will not know for years the full impact of what has happened in the Gulf of Mexico. We do not know, and this is the concerning issue, what the full impact is of, for example, a blowout in the Orphan Basin. We do not know what the full environmental impact would be if there were a blowout in the Orphan Basin. We do not know how much of the impact would affect what is in the immediate area of where the well is. We talk about, and we hear about how oil that comes to the surface - because of wave action and the size of the ocean - will get dispersed, but dispersal still does not say that something else is not being damaged. The oil may not come to our shore here in Newfoundland and Labrador but something else out on the water is being destroyed.

We can have a pretty cavalier attitude to things such as migratory birds, fish and marine mammals, but every time we destroy something in our environment, every time we do something drastic to a group of migratory birds, every time we do something drastic to a group of marine mammals, what is happening is, Mr. Speaker, we are affecting the whole ecosystem, that things are going into an imbalance. The implications of that are huge, and this is the kind of thing government has to think about. This is the kind of thing. We cannot just make money without thinking about what is happening because we are making that money.

Here in Newfoundland and Labrador, Mr. Speaker, for example, one of the groups of birds that are extremely important to us is the gannets, the northern gannets. Now, we all know how important the gannets are, if for no other reason than our tourism industry in Newfoundland and Labrador. Some of our bird watching tours that take place are specifically because of northern gannets. Now, for people who are not fully aware of the gannets, the northern gannets that are here in our waters in the summer along the Atlantic Coast, but particularly here in Newfoundland and Labrador, they do not stay here in the winter. I think we all know that, we know that they go. Where do they go? They actually go to the Gulf of Mexico region during the winter, the area that has been affected by the blowout.

The gannets who right now are nesting in large colonies on our cliffs here on the Coast of Newfoundland, the gannets who are off Cape St. Mary's, for example, that these gannets we all, a lot of us – I have a visitor coming next week, coming to visit me. One of the things I am going to want to do is bring her to Cape St. Mary's. We will want to see these gannets. They are so beautiful. They are so precious in and of themselves, even just physically to look at them, but when you see them together as a group and see how they operate as a colony, it is absolutely wonderful to think of what exists on our planet and what exists in our environment.

When these gannets, this year, when in the fall they have to leave the cliffs of Newfoundland in order to go south, they are going to be quite shocked. They are not going to know what hit them, because they feed at sea. What happens is they dive, and they dive into the water to find their food. What is going to happen in the fall, and they are telling us that the oil is still going to be there in the Gulf in the fall, that when they go down there and they start diving, number one, they are going to get covered in oil. Number two, they are not going to find food because of the devastation to the food supply in the Gulf of Mexico because of the oil. So we really have no idea of the impact of what has happened in the Gulf of Mexico is going to have on our gannet population here in Newfoundland and Labrador.

From just a crass economic perspective, if we see the loss of a huge percentage of that population over this next year, this time next year in 2011 we will not have that large rock in Cape St. Mary's covered in gannets. We will not have people wanting to go there when they come to Newfoundland and Labrador as tourists. We will not have people in the Province saying we have to go to Cape St. Mary's this year, because of the fact that the gannets will not be there. So, Mr. Speaker, this is one group that is being affected by what is happening in the Gulf of Mexico and it is a group that we need to be concerned about.

Another group we need to think about, Mr. Speaker, and again, it is a direct connection between us here in Newfoundland and Labrador and the Gulf of Mexico, and it is the bluefin tuna. The bluefin tuna is already in danger as a species. It was once a tremendous species here in Newfoundland and Labrador and it existed in abundance. It actually was a sport fishery in Newfoundland, off the waters of Newfoundland. I remember in particular in the 1960s and the 1970s, that sport industry was very, very prosperous. What happened? Governments allowed the fishing industry to overharvest the bluefin tuna for the sake of the making of sushi. Sushi became so important that the tuna was over harvested.

So, what we have on a worldwide basis now is that the numbers of bluefin tuna are dwindling yearly. Now, here is another fish, another mammal, Mr. Speaker, that migrates to Newfoundland, to the waters of Newfoundland in the summer but actually comes from the Gulf of Mexico. The bluefin tuna actually spawns in the Gulf of Mexico right in the region of the spill. So, Mr. Speaker, we have now the potential of actually losing forever the bluefin tuna, which would be an incalculable loss to our environment and to our ecosystem.

So, Mr. Speaker, we have to have this broader picture. We have to look at all of these issues when we are –

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER (Verge): Order, please!

The Chair is having some difficulty hearing the Member for Signal Hill-Quidi Vidi.

MS MICHAEL: Thank you very much, Mr. Speaker, I appreciate that.

What we have is a large picture that we cannot ignore when we are looking at doing exploration in deep water. The exploration that we are doing, has to be done taking into consideration all of these large pictures. So whether we are talking about the life of marine mammals, whether we are talking about the life of seabirds, whether we are talking about the need for money for social programs, we have to look at all of it in the context of the risk that is involved. So, we therefore need to question some of the decisions that are being made in this country from a regulatory perspective.

One of the areas that I have made some reference to in this House over the past months during our debates has been what has happened with regard to offshore regulations – regulations that are put in place by the federal agency, but regulations which when they were put in place by the federal agency we adopted here in Newfoundland and Labrador. There is a major concern that the offshore regulations monitoring drilling in the offshore have been changed to a point that they could, in actual fact, be endangering us when it comes to the drilling that is going on. The regulations that we used to have were quite prescriptive. That means the technology that would be used, for example, in drilling, the technology that would be used in actually producing oil, the technologies were named very clearly and you were actually told how you had to do something.

Now, Mr. Speaker, I understand that we are in a time in our history as peoples that change is happening very, very rapidly and that technologies can change rather rapidly, but they do not change that rapidly. In science, and whether the science is the science of medicine or the science of engineering, whatever the science is that we are talking about, it takes time to come up with new ideas and things have to be tested. So, technology does not change overnight. Methods of doing things do not change overnight. However, what has happened with the new regulations is that they are goal oriented regulations now that have been put in place by the federal government instead of being prescriptive. What happens is a company can now say: We have a goal of drilling in deep water without having blowouts happen and we will put everything in place to meet this goal, but they are not being told what has to be put in place to meet the goal. They are being trusted to come up with the methods to meet that goal as long as they have the goal and they show that they are trying to put methods in place to meet that goal.

What that does, Mr. Speaker, is put a lot of responsibility in the hands of the industries themselves, in this case the oil industry, and it gives less specific regulation and direction to the industry. I have heard people - representatives of the federal government - say that this change from prescriptive regulations to goal oriented regulations is not a weakening of regulations. It is not a watering down of regulations.

I would argue, Mr. Speaker, that in actual fact they are, because what they are doing is lessening the role of government around the regulations, lessening the role of government in its responsibility around drilling for example, around exploratory drilling, around production. In other words, if the company can show that we are really trying to meet this goal of doing it as safely as possible, government cannot stop them as long as they show they are working towards their goal. So, in putting their plans together they show what their goals are and what they are going to try to do. As long as they keep trying to do that, everything is okay. Government, I would argue, has a role in deciding whether or not what they are trying to do, in actual fact, is adequate, and government does have a role in being involved in research and development, and does have a role in working with industries and coming to a decision about whether or not what is being argued by industry is adequate.

Mr. Speaker, this whole thing of coming up with goal oriented instead of prescriptive regulations is extremely problematic and there is a discussion around the world on this. I would like to point out that this government has said they looked to Norway, for example. Well, Norway is certainly a place where they do have prescriptive regulations, Mr. Speaker, and they would not move in this direction of goal oriented. Yes, you have to have goals but there have to be prescriptive as well. I think we have moved way too far into the direction of goal oriented rather than prescriptive.

I would continue to say, in spite of arguments I have heard from government, that if we are really concerned about the protection of the environment and health and safety that we do need an agency like they have in Norway, the Petroleum Safety Authority, with adequate resources given to that authority to be involved in research in a very in-depth way with regard to environment health and safety issues. In Norway, the Petroleum Safety Authority is in charge of risk management, environmental protection and health and safety, but they are also involved in research in those areas. That means putting resources, adequate resources in to do that research. I would argue that government and the academic world have to be involved with industry in doing the research around these issues. You have to have a body whose one goal and one goal only is safety. Whose one goal and one goal only is environmental safety, health safety, worker safety, that they have no other dimension to their concerns. So, making money is not what they are about, what they are about is safety. I would argue, Mr. Speaker, that we really do need an agency like that here in Newfoundland and Labrador, an agency that makes those arguments to government, and for government as well but to government.

There are a few more points I would like to make, Mr. Speaker, and it has to do with spills that are happening in the Province, things that are going on because we have a concern not just for exploration drilling, we also have a concern for what is going on during production as well. In 1997, the Terra Nova development project, the environmental assessment panel for the Terra Nova development project recommended that the board routinely require - and that is the C-NLOPB - seabird observers on rig platforms, especially the Terra Nova platform, and shuttle tankers to gather more data.

Mr. Speaker, I would point out that this is not happening adequately. Our lack of seabird observers on platforms has been very strongly criticized by Bill Montevecchi from Memorial University who is an expert in this area that sometimes the people who are doing this work are not true monitors, observers who can make observations about what is really happening to the birds and to the sea life. Very often, they do not have adequate experience. So, it is not enough to actually have seabird observers on the platform, they have to be seabird observers who have experience in what they are doing.

Now, I do understand from talking to Chevron that with regard to the Orphan Basin, in actual fact, the Stena Carron does have observers on that rig twenty-four seven; they are always there. This is not happening on all of our rigs out there, Mr. Speaker. The oil companies tell us that they have a good spill response, but we know that people who have analyzed the regulations and analyzed the responses with regard to spills say that we have not had any improvement from 2004 to 2008 in terms of the plans for how deal with a big spill. Whether those plans are plans for what would happen in Placentia Bay, or whether those plans are what would happen in the deep waters in the offshore, we know that the plans are inadequate, the plans have not been revised, and I would suggest that because of what is happening in the Gulf of Mexico that we do need a revision.

Now, the Premier did say, on May 5, that he wants a study of our spill response capability. I am glad to hear him say that because I think we absolutely do need a study of our spill response capability. It would be very interesting, now that we have this change in the rules with regard to North Atlantic refinery in Placentia Bay, the change with regard to the number of people on a tugboat, I would now like to know what would happen with fewer numbers of people on tugboats, what would happen with regard to spills out in Placentia Bay with fewer people on the tugboats.

Talking about Placentia Bay, one of the things that I am interested in is the way in which the fishing industry and the workers in the fishing industry are being used in the Gulf of Mexico doing the cleanup because of the blowout in the Gulf of Mexico, and they are doing it because they have no industry, they have no work now. They cannot go fishing because where they fish has been destroyed by the spill, by the blowout. So, they are making money, they are being paid by BP, and they are earning money by being involved in the cleanup. The FFAW has said, and I think it is a really good point, that in actual fact there should be intensive training of people in the fishing industry in Placentia Bay in particular, so that if we did have a spill they are ready and trained adequately to be able to help with that spill.

So, we do not have a good plan in place. There is much more that needs to be done, and I would hope that when the Premier says that he wants a study of our spill responsibility capability, that he is going to follow up on that and we are going to hear that this study is being done.

There are a couple of more points that I would like to make about spills offshore, Mr. Speaker. We have had a number of spills, and some are fairly minor, but on November 21, 2004, there was a spill at Terra Nova of 1,000 barrels of crude oil or 165,000 litres. The Canadian Wildlife Service – and I think we all agree that we can trust the science of the Canadian Wildlife Service – estimated that up to 2,000 seabirds died from the Terra Nova spill. Now, when the government was talking here in this House about a spill offshore, it said that a big spill offshore would not have the same kind of impact as the spill in the Gulf of Mexico because the oil will not come ashore. Well, the thing is, that is not the issue. The concern is the effect of a spill on the local environment, and in this case, with Terra Nova, the local environment meant 10,000 seabirds dying.

So, it is not just: Is the oil going to come to our shores if there is a spill offshore? It is a question of: What is happening to the local environment? If something negative is happening to a local environment that impacts the environments that the local environment interacts with. That is how it works.

In 2008 there was another big spill at White Rose, and the biologist, Ian Jones, says that oil companies and federal authorities have not yet released details of the environmental impacts of that 2008 spill. So, Mr. Speaker, we sort of are being lulled into thinking everything is all right out there in our offshore, and things are going okay, that we do not have major spills going on, that all of the spills are small and we do not have to worry; but, Mr. Speaker, we are now being told that there are many spills going on, on a regular basis, and we now know more than the amounts predicted in the environmental impact statements for White Rose and Terra Nova. They gave an idea, they gave an estimate, of what their spills would be when the environmental study was done, but what they predicted was actually low, and they have actually now had spills that have added up to more than what they had in their environmental statements.

So, we have to stop thinking that small spills are not bad. Small spills accumulate and, when it comes to the seabirds, a few drops of oil will kill a seabird in the water because it loses its insulation and will die of exposure. We can say, oh, well, it is a few birds. It is not just a few birds, number one; it has been thousands of birds; and, number two, affecting our environment in any way negatively affects us, affects us in that environment, and it affects our economy.

With regard to Terra Nova, Mr. Speaker, between 1999 and 2006 there were thirty-three small batch spills; so, each spill was under fifty barrels. Half were spills of one to forty-nine barrels, and half were less than one, so the average annual rate was five point four spills, but the predicted number for the lifetime of the whole project was five point three, and already, in just the short lifespan, they already have gone over what they said was going to be their average spill for the whole lifetime. So the companies out there are not predicting well, Mr. Speaker, what they are going to be doing to our environment.

White Rose has a similar track record. White Rose said, in their environmental assessment, that they predicted two point three eight spills under fifty barrels for the whole project lifetime, that they would have no more than two point three eight spills; however, between 2003 and 2007 they already had three spills of under fifty barrels.

Mr. Speaker, what this information tells us is that in many ways what is going on out there is unpredictable. In many ways what is happening in our offshore is predictable, and I certainly want us to earn money from what is happening in the offshore. I want us to have money that is going to help us live better as a province, that is going to help us have better social programs, that is going to help us be on par with other parts of Canada in terms of our standards around taking care of people; but, Mr. Speaker, neither can we do it at the expense of our environment and at the expense of safety of workers either, Mr. Speaker. I believe that we do need to slow down. I believe that we do need to say to industry: Show us the research that you are doing to deal with a blowout, if a blowout happens in deep water.

They certainly have the technology, because one of the best ways of doing it will be to have a relief well in place during exploration. I know the industry has said, well, nowhere are they demanding that; that has not been demanded around the world. I would like to suggest, because of what is happening in the Orphan Basin, the industry is probably going to see that demand coming in, Mr. Speaker, that the demand is going to be there for the relief well. I can see that coming.

The other thing, Mr. Speaker, that we have to look at is, while we are receiving money from oil development, which is really important, Mr. Speaker, we have to not only put money into our social programs, we also have to look at our own research, and we have to look at our own Crown corporation, Nalcor, and give Nalcor a stronger direction with regard to research into alternative energy sources.

I heard somebody, Mr. Speaker, an expert, an expert with tremendous, I think, qualifications, on the radio on the weekend talking about exploration. I have to say, I agreed with him with regard to the whole thing of alternative energies. His point is, and I totally agree, that we cannot expect, say, in ten years – let's just say Newfoundland and Labrador – we cannot expect, even if we put all of our eggs in the basket of alternative energy, say of wind energy - and we would not do that, but if we put all of our eggs in that basket - it would impossible, within ten years, for us to run ourselves here just on wind energy. Because the changes that have to happen in industry, the changes that have to happen in the things that now use oil, the changes that will have to be made, it is going to take a good, maybe, fifty years before we can really see ourselves moving in a serious way with regard to alternative energy resources; but, if we do not start now, if we do not start putting the things in place now, if we do not start making the investments now - and that is both for industry as well as for governments, if the investments do not start now - and we do not start dealing with the alternative sources, then by the time we start it will still be another twenty or thirty or forty years down the road. So, if we do not start now we could see ourselves really in an extremely difficult way in fifty years' time.

Mr. Speaker, I have exhausted the points I wanted to make here today. I am really appreciative of having the time to make these points. I hope that as government continues in putting its budgets together and doing the economic planning that it needs to do, that it also looks at the risks that we could be taking that could turn things upside down for us rather radically. I also hope that government looks at what we want to see in twenty years time in terms of how we are operating here as a Province, both with regard to how we take care of our people but also with regard to how we are producing energy in this Province.

Thank you very much, Mr. Speaker.

MR. SPEAKER: The Chair recognizes the Opposition House Leader.

MR. KELVIN PARSONS: Thank you, Mr. Speaker.

My comments will be very limited with respect to Bill 3. It is a rather technical bill. I listened to the Minister of Finance and President of Treasury Board. Of course, it does point out the world we live in. Particularly when it comes to taxation, the interplay between the provincial and federal governments is at work to a large extent. Some things we do on our own, retail sales tax for example, but there are lots of areas where there are linkages between the tax regime that we as a Province might adopt and what the federal government might adopt. Because the taxation field is in fact so complicated and complex, you are going to be back here in the House of Assembly from time to time and making amendments to accommodate the new changes that are taking place. So it is an ongoing process. It is not earth shattering that we are here today having this debate. No doubt, we will back here again next year having more debates when it comes to income tax matters.

I did notice the minister commented that the Canada Revenue Agency is the new administrator for the Province's capital tax program. I am not sure exactly how long that has been in place. Maybe the minister might get an opportunity, either when he closes debate or in committee stage, to just elaborate on that a little bit further and give some idea, I guess, to the public of just how many programs we have that the federal CRA does indeed administer for us. I am assuming there is a cost factor here. Most provinces, of course, would have their own tax regimes and different issues and programs, such as the capital tax program, and it is easier for the feds, who have a national scope, a federal jurisdiction to administer them rather than each individual province doing so. I am assuming there is a payback factor to that, and maybe the minister will be able to give us some information in that regard as well.

Other than that, Mr. Speaker, I have no comments to make here. We will be supporting this Income Tax Act, 2000, and look forward to any comments that the minister might have.

Thank you.

MR. SPEAKER: Order, please!

The Chair recognizes the hon. the Member for the Bay of Islands.

SOME HON. MEMBERS: Hear, hear!

MR. LODER: Thank you, Mr. Speaker.

Mr. Speaker, I appreciate the opportunity to speak on Bill 3 here today, An Act To Amend The Income Tax Act, 2000.

Mr. Speaker, the amendment proposed in the Income Tax Act, 2000 will provide clarification with respect to the amount a taxpayer may claim for charitable or other donations. It also clarifies a claim for research and development tax credit that must be made and removed, which basically - it explains it more even when it comes to federal and provincial income tax completions.

I would like to take a few key amendments here and explain them, or read them down through. Basically, the first one we are looking at here, the provincial government is committed to ensuring the Income Tax Act, 2000 accurately reflects legislation and intent and current practices of the government revenue agency, or as it is referred to CRA. The provincial government, of course, has the responsibility to ensure legislation is maintained and continues to meet that commitment. These amendments, of course, also relate to the administration, enforcement and collection of taxes under the federal and provincial tax collections agreement.

In this particular bill, Bill 3, it clarifies the charitable donation amounts claimed in a taxation year. For the provincial donations tax credit it is the same - make sure it is the same as the contribution made or claimed by the federal donation tax credit. It also confirms the CRA administration of the provincial scientific research and experimental development tax credit on the basis that falling timelines are the same as the federal research and development tax credit, and that is within twelve months of filing deadlines for taxpayer general income tax return. So that is some of them there.

Of course, Mr. Speaker, when it comes to taxes, we do, as a government, have to look at how we bring in income or how we displace when it comes to taxation. Sometimes, of course, our government takes the approach of reducing taxes, as we did with the income tax and other areas, such as the insurance tax. We took the approach of doing this to monitor the situation, give our people as residents of Newfoundland and Labrador tax breaks so they could have more disposable income, be able to go out and spend more money and pay more taxes, of course, and that brings it in.

Mr. Speaker, that is one of the areas we are looking at, and by bringing monies in, of course, we can have social development, which would include increasing roads allotments that we could spend on our roads throughout the districts. One area that I would like to expand on would be the actual roads itself, how the money is spent throughout the Province.

In 2010, it states, "The Right Investments For Our Children and Our Future" provides $177.7 million in provincial funding for roads and bridge expenditures. That goes throughout the Province, including rural areas. This funding, when added to the federal government funding, we will have a total of $235.6 million for the year 2010-2011. This provincial government's overall infrastructure strategy includes, of course, investment in municipalities, health care, education, justice and social housing, et cetera.

Now, Mr. Speaker, in order to take advantage of monies allocated for provincial, I feel you have to have an effective MHA in your district. It is not much good to be an MHA with a governing body if you are not effective. I think this is where we missed out in the District of Bay of Islands for years, because basically our roads deteriorated to the point that both sides of the Bay of Islands require total replacement of asphalt. Mr. Speaker, we are taking the approach, we are working with the governments, we are working with the ministers, and we are being effective. I saw that even just this past weekend.

I went for a drive on Sunday, and you would not believe the traffic in the Bay of Islands. I thought, basically, I was following a funeral procession because it was that big a line-up of cars. What it was, Mr. Speaker, it was people enjoying a day out, for a little drive to probably go to a little store for an ice cream, take their kids out for a drive. You could see - it goes right back over the areas that we missed. This is one area, this is on the North Shore of the Bay of Islands, and I am sure it probably would have happened on the other side because people in the district are going out and looking at the beautiful Bay of Islands district. We have great scenery, and of course, we are now having good roads. We are not finished yet. We have more road repairs to do but we are working on them, and you can see the difference. The difference comes through the people themselves going out and having that drive on a Sunday sunny afternoon. It was great to see.

Mr. Speaker, also, we are taking our money and we are investing in social development, of course, and we could see that just two weeks ago when we officially opened the long-term care facility in Corner Brook. The people were all moved in the last couple of days. I heard one story of a gentleman who had tears in his eyes because he is going to this fine private room that he never had before and is going to be well taken care of.

Also, of course within the last couple of weeks, we saw tenders go out municipal services for the extension of the new regional municipal service extension, and that is covering the new regional hospital in Corner Brook. Again, we are putting social policy for our people, for our seniors, and for the health care of the whole West Coast.

Mr. Speaker, I will not take up much more time. I think these technical amendments to the provincial Income Tax Act is administered, of course as I said earlier, by the CRA, which is the Canada Revenue Agency, on behalf of the Province and the proposed technical amendments will simply provide clarifications and will not change the way the CRA administrates our Income Tax Act.

Mr. Speaker, I feel we were going to vote this act in and I will support 100 per cent.

Thank you very much, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

If the hon. the Minister of Finance speaks now, he will close debate in second reading of Bill 3.

The hon. the Minister of Finance.

MR. MARSHALL: Thank you, Mr. Speaker.

I guess this now concludes debate on this very exciting piece of legislation. I know people must be wondering why - on a piece of legislation like this – the Leader of the NDP who spoke for an hour spoke about her concern about shipping in the Gulf and deep sea drilling - not shipping, deep sea drilling, I should say.

Of course, this is a money bill. This is An Act To Amend The Income Tax Act and when a money bill, or an income tax bill is debated in the House, members of the House are not limited to speak about the matters contained in the bill, they are free to speak about whatever matter interests them. For the Leader of the NDP, she had a concern about drilling in the Gulf.

I appreciate the comments made by the Member for Bay of Islands, whose district, I think, is being paved over, from what I am told - lots of headway being made in the Bay of Islands in terms of new road construction, new paving. It is great to see. I commend and congratulate the hon. the Member for the Bay of Islands for what he is doing -

SOME HON. MEMBERS: Hear, hear!

MR. MARSHALL: - to advance the interests of the people of the Bay of Islands in terms of infrastructure, particularly the paving of roads. I understand there is a lot going to happen this year and hopefully next year as well.

Speaking of roads, not too long ago I had the pleasure of joining the hon. member, the Premier, and my colleague, the Minister of Health, as we attended in the City of Corner Brook to open the beautiful long-term care facility. That was the first project, the first committed project of our government.

I remember when the Premier came out and he was campaigning. It was a time we did not know back in 2003, we were not totally familiar with the financial position of the Province and no promises were being made, but one was made and that was a commitment that a new long-term care facility would be built in the City of Corner Brook for the people of the City of Corner Brook who deserved better than what was there, as people want to look after their loved ones, their aging loved ones and people who were suffering from dementia and things like that. The Premier made that one commitment in that campaign, and it was a commitment I am pleased to see was honoured and it was a commitment that was kept.

A lot of people talked about long-term care facilities in the City of Corner Brook, for the Bay of Islands, for the Humber Valley. People talked about it and people promised it, but we finally had someone who came and delivered. It was a pleasure to see people Israel Hann and Minnie Vallis and people who have advocated for this facility for so many years, and to see the looks on their faces and the smiles on their faces when that beautiful facility that will serve the whole West Coast of Newfoundland when it was opened.

Speaking of roads, I am very pleased that there is going to be - it was originally known as a tote road and it is going to run from the dementia unit. As part of the long-term care facility in Corner Brook, there is the main nursing home, which was opened last week, but in addition to that we previously opened what are called four protective care units further up on Wheelers Road. There is a tote road that is going to lead from the new hospital site. There is a new hospital being built very close nearby those four protective care units. Because of the construction that was taking place with the respect to the units, there were a lot of trucks on Wheelers Road. These truck were also going down Wheelers Road, they were coming off the highway, they were coming off the Ring Road and going down Wheelers Road and making traffic on that road quite heavy, and a lot of parents were concerned that one of their kids could get killed, or could be seriously injured. As a result, government agreed to put in what was called a tote road, which I understand to be a temporary road just to get the traffic off Wheelers Road at that point. That tote road is now - tenders are being announced for that road, I understand it is a $6 million road, and it is going to be paved and it is going to have sidewalks and it is going to have sections for bicycles. That road will run from the hospital site down by the protective care units and then down hooking up with - not University Drive, by the Pepsi Centre. So that is certainly something that the people of Corner Brook are looking forward to.

I understand there are long-term care facilities being built right across the Province. I know in Happy Valley-Goose Bay, I saw them there. I think, Mr. Speaker, in your home District of Lewisporte there is a much needed long-term care facility going up. Happy Valley-Goose Bay, I saw the one there. Clarenville – I will always remember that one because that one was announced after the one in Corner Brook but was finished beforehand; a very beautiful long-term care facility there. I understand one in Carbonear is going up as well. Here in St. John's, I understand there is going to be a replacement of Hoyles-Escasoni, and I further understand that the design for the long-term care facility for Hoyles-Escasoni is going to be the same design that was used at the long-term care facility in Corner Brook. I understand there is going to be two buildings of the same design and they are going to be joined together.

To think, as our population ages, we are going to need more and more facilities as our population gets older. I remember years ago we had to build schools in this Province as the baby boom generation was born and became of school age. Now that generation is coming through the other end. We do not need schools for that generation; we now need long-term care facilities.

So I thank everyone for taking part in this debate on this technical bill, and I urge the passage of this legislation.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

Is it the pleasure of the House that the said bill be now read a second time?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, ‘nay'.

Carried.

CLERK: A bill, An Act To Amend The Income Tax Act, 2000. (Bill 3)

MR. SPEAKER: This bill has now been read a second time.

When shall the bill be referred to a Committee of the Whole House?

MS BURKE: Presently, Mr. Speaker.

MR. SPEAKER: Presently.

On motion, a bill, "An Act To Amend The Income Tax Act, 2000", read a second time, ordered referred to a Committee of the Whole presently, by leave. (Bill 3)

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

MS BURKE: Thank you, Mr. Speaker.

I call from the Order Paper, Order 3, second reading of Bill 9, An Act To Amend The Income Tax Act, 2000 No. 2.

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

SOME HON. MEMBERS: Hear, hear!

MR. MARSHALL: Mr. Speaker, it is also my duty today to move and second – I move, seconded by the hon. Attorney General and Minister of Justice, An Act To Amend The Income Tax Act, 2000 No. 2, be now read a second time.

MR. SPEAKER: It has now been moved and seconded that the said bill be read a second time.

Motion, second reading of a bill, "An Act To Amend The Income Tax Act, 2000 No. 2". (Bill 9)

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

MR. MARSHALL: Thank you, Mr. Speaker.

No matter how long we are here, we learn something new every day, and that is a good thing.

As I was saying, it is my duty as the Minister of Finance and President of Treasury Board to stand and move second reading of this bill, which is entitled, An Act To Amend The Income Tax Act, 2000 No. 2. This is the legislation which will codify into law, or pass into law the tax changes that we announced in the Budget for 2010 back in March. It was late march when we brought in the Budget – and the Budget which we have passed already in this House.

The explanatory notes of the bill take us through what were the major tax changes in the Budget, and of course, as we have said in this House many times, this Province, Newfoundland and Labrador, was known throughout Canada and North America as a high-tax jurisdiction. Taxes at one time were very high here, and because of the economic advance and the fiscal advance that we have made here over the past few years, we have been able to change that.

If you recall, what happened was, the first thing this government did after taking office and having the Price Waterhouse report and determining the true financial position of the Province, the government realized it had to get the Province back to surplus. We ran four consecutive surpluses which enabled us to pay down debt, but in addition to paying down our debt - which was handicapping us in a major way because of the interest we had to pay on that debt. Every year we had to pay interest on the debt, and I think in 2003-2004, I think the interest on the debt, of every dollar we were spending there was almost twenty-three cents –twenty-three cents of every dollar was going to interest on the debt. Then after four consecutive surpluses that number got down to eight cents, and it is presently around ten cents. So it is a great improvement, because it is money now we are not sending out of the Province. It is money we are not sending off to our money lenders. It is money that we now have here to do programs and things that we need to do that will advance the economy here.

The next thing we did is we said we are going to take this Province and we are going to make it a lower tax jurisdiction. We are going to take our hands out of people's pockets for a bit, because people in this Province had a lot of bills to pay and we wanted to help people pay those bills. We have helped people with their daily living expenses. Obviously, we have to strike a balance. We have to strike a balance between taxing people, because government needs revenue to pay for programs, very important programs that the people of the Province want to see, especially in health care and especially in education. Also, people need the income they earn. They need to be able to keep so much of the income they earn, which is called their disposable income, because they have bills to pay. They have mortgages to pay, they have car loans to pay, and they have to pay for the price of fuel and on and on.

So, we have to strike a balance. Some governments believe in high taxation. Some governments believe in taking more and more from people so that governments can provide more and more programs. Others believe in low taxation, keeping taxes as low as possible and government should do the least. We believe in taking a balanced approach. We believe in taking an approach midway between the two.

In addition to helping people pay their bills, we also need to attract skilled workers to this Province. We need skilled trades' workers. We need medical professionals, and to get them we not only have to pay them a competitive wage but we have to have as well, a competitive tax system. So that they can keep a lot of their income, because they look at what is left over after taxation.

We are creating, in Newfoundland and Labrador right now, more jobs than we have people to fill them; more jobs than we have people to fill them. So we have to attract those professionals. We have to attract skilled trades' people. We have to attract medical people to this Province, and one way we have to do it is to keep our taxes competitive.

The third thing we have to do is attract investment. We have to attract the type of person who is going to invest their money or their capital that they have accumulated in order to create jobs. Job creation is extremely important. The small business sector is a great creator of jobs in the Province of Newfoundland and Labrador. They many only have six or seven, or maybe ten or twelve employees. They may not have a lot of employees but they do create jobs and that is why we have to help the private sector.

One of the things we did is that we lowered the corporate income tax this year for small business, not for the large corporations, not for the oil companies, not for the large mining companies. We lowered the small business tax rate because we have two different tax rates, corporate tax rates and small business tax rates. So, we have lowered the small business tax rate this year from 5 per cent to 4 per cent. That puts us pretty well in the middle of the pack. We are not the leader. Prince Edward Island is the leader. I think they only charge 2.5 per cent in Prince Edward Island. The other provinces in Atlantic Canada are about 4 per cent. That is a good thing. It helps small business and we like to help small business because small business is a major creator of employment in Newfoundland and Labrador.

The other thing this bill will do is reduce personal income taxes in the second and third bracket. In the second bracket they will go from 12.8 per cent to 12.5 per cent. In the third bracket it is going to go from 15.5 per cent to 13.3 per cent. This will be effective on the first of July.

Now, since we got into office, as I mentioned earlier, we have been reducing taxes in this Province. We have done it steadily over the years. We particularly did it for the low income, the person at the low end of the tax scale. What we are doing this year is that we are now going to let the people in the second and third bracket catch up a bit, because they have been paying – their share of the taxes they are paying has been proportionately higher.

We have reduced taxes over the last six years. While all rates have been reduced, persons at the lower end of the income scale have benefitted proportionately more than those of the higher income. The rate reductions in the 2010 Budget will bring the percent tax saving for people in the second and in the third bracket more in line with those in the first bracket.

We also made a commitment to do this, Mr. Speaker. Number one, we wanted to take our hands out of people's pockets and leave people with more money in their pockets to pay their bills. Number two, we wanted to attract skilled workers and skilled trades and medical professionals. Number three, we made a commitment. In the last election, in our Blue Book, in our platform for the campaign, we made a commitment that we would have the lowest tax rates in Atlantic Canada. It was a commitment we made to the people of the Province. We ran on that commitment. The people elected us. They gave us a mandate to do it and it is a commitment, therefore, that we are keeping.

What happened is that we were already – we had the lowest rate for the first bracket. In the lower tax bracket we were already the lowest. We were substantially the lowest. New Brunswick lowered their rates in their budget in the second and third bracket. What we have done is now we have reduced our rates in order to match the rates in New Brunswick and to keep the commitment that we made. I know we all agree that if politicians make a commitment they should honour it, and I am pleased to see that we are honouring that commitment here today.

So we do have the lowest rates in Atlantic Canada. Now, that does not mean we have the lowest taxes. There are refundable tax rates, non-refundable tax credits, as well, where ours are not as high; although, this year one of the non-refundable tax credits that we did something with was the age amount. There is an age amount; people who are sixty-five years of age do not pay taxes on a certain portion of their income. It was up to about $3,600 and we brought it up to $5,000 – the best in Atlantic Canada - because it is something we wanted to do to help seniors. Seniors need a break. I keep saying seniors, but I am talking about people living on fixed incomes. They need a break. Their incomes are fixed; their cost of living goes up. This was a major help to them, an increase in the age credit, which enabled a number of seniors to receive some additional compensation.

Just getting back to the tax credits, the personal tax reductions over the years, in 2007 we brought in what was referred to as the biggest tax cut in the history of Newfoundland and Labrador. In the lower bracket, people in the lower tax bracket were paying 10.5 per cent. That was reduced in the low bracket from 10.5 per cent down to 8.7 per cent. Then, the following year it was reduced by another 1 per cent to 7.7 per cent. That is the lowest tax rate in Atlantic Canada.

In the second bracket, before 2007, it was 16.16 per cent. That was reduced to 13.8 per cent. That was then reduced to 12.8 per cent. So we are 7.7 per cent in the first bracket, 12.8 per cent in the second bracket, and in order to match the reduction in New Brunswick it was reduced by a small amount down from 12.8 per cent to 12.5 per cent this year, the lowest taxes in the middle bracket, because of our commitment that we would have the lower taxes.

In the third bracket, before 2007 that bracket was 18.02 per cent. It was reduced to 16.5 per cent. Then, in the following year, it was reduced again – this is 2008 – to 15.5 per cent, and this year it is now down to 13.3 per cent. So our three brackets are: in the low bracket, 7.7 per cent; in the medium bracket, 12.5 per cent; and in the top bracket 13.3 per cent.

It just goes to show, then, under our system obviously people who make a higher income will pay more taxes. If the tax rates were the same in all brackets, like New Brunswick wants to do, like Alberta is doing - I think Alberta has two tax rates - but if everyone paid the same tax rate, let's say 10 per cent, obviously the more income you make the more taxes you would pay, absolutely, but we also have a progressive tax system. So, in the lowest rate you pay 7.7 per cent, in the medium rate 12.5 per cent, and in the top rate 13.3 per cent. So, people with higher incomes pay more taxes; they also pay relatively more in addition to absolutely more taxes.

Mr. Speaker, I think it would be helpful if we go through the benefits to seniors that were in the Budget this year. I already talked about the age amount, which I said was a non-refundable tax credit that reduces the taxes payable for individuals who are sixty-five years and older. We are going to increase the age amount from $3,681 to $5,000, and the upper income threshold for eligibility will rise from incomes of about $52,000 to $60,000, which increases not only the amount of the credit but the number of people who will be eligible for the credit. That means this year there are about 73,000 people, 73,000 seniors, who are going to receive a benefit of up to $102 this year.

In addition to that, there is a Seniors' Benefit program, which is a different program. That was a program, I think, when we came into office, that was around $400. I know in the Budgets that the Williams' government has brought in, under our Premier, that we have, on three occasions, enhanced the benefit that those seniors receive. I think the first one was, we did an indexation. Then there was an increase to the married couples - because it was only married couples, I believe, that were receiving it. What we learned was that if one of the couples passed, the cost of living for the survivor did not go down that much; so we agreed that the single senior would also receive that benefit, and more seniors benefit there. This year we are going to increase the benefit which was, I think, $376 when we came into office. I may be wrong on that, but we increased it this year to $900; from $800 up to $900. That is quite a substantial increase to seniors over a period of time, since we came into office, about six years. This will result in eligible seniors receiving up to an additional $97 in October 2010, because that is when the cheque arrives. They will get a cheque for $900 in October - it will be added to their GST cheque - and the Low Income Seniors' Benefit will be available to anyone with a family net income of less than $33,884 who is sixty-five years of age at any time during the tax year. It is expected that 42,500 seniors will be eligible for this particular increase.

Again, since 2006 – now, I have the information here – significant enhancements have been made to the Seniors' Benefit. It has been expanded to include more married seniors, and the maximum benefit available to single seniors has increased from $376 to $900. So it is important – I know everybody in this House agrees - that we continue to do things for our seniors, and I am pleased that this Budget, like the Budget in 2008 and the Budget in 2007, enhanced that benefit for our seniors.

Our personal income tax rates are better now. Not only are they the lowest in Atlantic Canada, but also they are lower than Manitoba and Saskatchewan. As part of our tax reduction strategy, this Province has made a decision to focus on rates. As I said, in terms of some of the non-refundable credits, we are lower and we therefore provide a lower benefit than other Provinces. So we still have work to do, but the rate reduction in 2010 certainly will compensate for the lower credit amounts, at least to some degree.

Mr. Speaker, this Province, as I said, is creating more jobs than it has people to fill them. We are moving into periods of unparalleled investments with the Vale hydromet facility, the great expansions in the iron ore industry that are taking place in Labrador West, the oil and gas developments that are taking place here on the East Coast, and, of course, the project that we all anticipate, the great 2,800 megawatt, clean, green hydroelectric facility in the Lower Churchill.

So, attracting a skilled workforce is going to be critical to the success of these various projects. As I said earlier, employers will be required to pay a competitive wage, but we also have to promote a competitive tax environment. We do not have to be the lowest; we had better not be the highest; we have to be competitive, so that people will come here and live here. So, both are complementary to ensuring that we attract and that we maintain a skilled task force.

Regardless of whether the Province is running a deficit, the tax competitive is necessary. Businesses that are looking to locate and to invest and create jobs, they do not just look at the corporate income tax, they do not just look at business tax in a jurisdiction, but they also look at how their employees are going to be taxed, particularly if they intend to relocate people to our Province. So, reducing taxes in all brackets, not just the lower tax bracket where we have put our emphasis over the years, it will be a positive move supporting business attraction as well and that means jobs and more jobs for our people.

I mentioned the small business tax rate, and again, to get back to seniors, I mentioned the age amount credit and the Seniors' Benefit. We have to help all of our seniors. We have some seniors in this Province who have the benefit of three pension plans. We have the Old Age Security plan, which is paid for by the Government of Canada. It is a poverty reduction initiative, a famous one and it is taxable. So, in one case, it is an income redistribution, it takes money from the wealthier and gives it to the people who need it more. It is wonderful program that all Canadians certainly are proud of.

In addition to that, there is a second pillar of retirement planning and it is the Canada Pension Plan and the Registered Pension Plans. The Canada Pension Plan is mandatory. One of the interesting things about the Canada Pension Plan is it is not paid for by Canada. It is a Canada Pension Plan, but it is paid for by employees in this country and it is paid for by their employers, because you cannot have a pension unless you put money into a pension plan. The way the pension comes is that people defer their present income, employees take a part of their income and they invest it in the pension plan and their employers match that, and under the Canada Pension Plan that is mandatory. The investments in that plan grow and provide the pension for when that person is retired.

Another pension plan is Registered Pension Plans that exist in this Province; they work the same way. If you want a pension plan, money has to go into it. It is not provided by the Government of Canada and it is not provided by the Government of Newfoundland and Labrador, it is provided by the people themselves. It is provided by the employees who are incentivized, they are encouraged to save for their retirement. The federal government and the provincial government will allow a deferral on the taxes of that part of the income that the employee puts into the pension fund. The Government of Canada and the Government of Newfoundland and Labrador will give a tax deferral to the employer who matches that employee's investment in the pension plan.

While governments do not pay for the pension, they do allow the deferral of revenue on the contributions that are made into the plan. In addition, the contributions that are in the plan earn income. They earn interest. They earn dividends if they are invested in stocks. They could appreciate in value. Their stocks can appreciate in value. Pension plan money could be invested in real estate. There could be rents coming in. The federal government and the provincial government agreed to defer the taxes on that income until the person retires, but when the person retires, that is when the taxes are paid. When the person retires, starts drawing the income that is when the taxes are paid. It is not a tax break. It is not a tax deduction. It is a tax deferral that is certainly ultimately paid.

So, unfortunately, many of the citizens in this Province do not have that Registered Pension Plan. They have the Old Age Security. Those in a low income can apply for another great program provided by the federal government, the Guaranteed Income Supplement for low-income citizens. Everybody who works has the benefit of the Canada Pension Plan, because that is a mandatory plan, mandated by the Government of Canada. Some, but not the majority, have the benefit of working for an employer that provides a Registered Pension Plan, and will provide a third plan to help replace somebody's income when they retire, but the bulk of citizens in this Province do not have that benefit. Some who do have been in a plan that provides a pension that is not indexed, but the money that was paid into the plan was not meant to pay for taxation. If taxation was needed, more money had to be contributed. Others, especially those who worked for the Government of Canada, have the benefit of an indexed pension plan, but it is something that has been paid for.

We have to make sure that we look after all our citizens. Those that do not have indexed pensions, we have to look out for all people who do not have indexed pensions, and we have to look after all people on fixed incomes who do not have Registered Pension Plans at all, people who are living on Old Age Security and on the Canada Pension Plan. So we have to do other things, and we do things like providing the Seniors' Benefit, which is now $900 a year, and it goes to everybody. It does not just go to people who may have worked for an employer who provided a pension plan, it will go to everybody.

We also provide an HST credit. We provide a home heating fuel rebate. We provide a Fuel Tank Replacement Program. We provide the Low-Income Tax Reduction – I did not mention that. I remember in Minister Sullivan's first Budget, the first Finance Minister of this Administration, we removed people of the lower income entirely from the provincial tax rolls. Then, I think the next year we indexed it so it would up again. Last year, Minister Kennedy, as Finance Minister, increased it again, and that has removed thousands and thousands of people from the provincial tax rolls.

We also offer programs with Newfoundland and Labrador Housing to help people pay their rent, to help seniors pay their rent, people on fixed incomes pay their rent. We have what was always called the Home Repair Program. We put more money into that program to help people stay in their homes. People do not want to go into these facilities, personal care homes, or into long-term care homes. They want to stay in their own homes as long as possible, and we have had programs that did that.

The most beautiful program we have done, in my view, is the drug program. That we helped people deal with payment of their drugs based on their income. I know that one part of the program, it will make sure that nobody is decimated by the high cost of drugs relative to their income. I think there are three parts of that program. I think of all the things the government has done, that is the one that is so impressive. Of course, the federal government offers help to our seniors with programs such as the Old Age Security and the Guaranteed Income Supplement, plus the federal GST credit, and these are all indexed and they go up every three years.

One other thing we did, Mr. Speaker, in this year's Budget, is that we increased the dividend tax credit for dividends from large corporations from 9.7 per cent to 11 per cent; that will be effective on July 1, 2010. We will revise the provisions so that there will no longer be automatic changes in the provincial dividend tax credit rates consequent to changes in the federal tax parameters. What this does is help avoid double taxation, because if you have a corporation that earns income, obviously, it pays income tax to the federal government and to the provincial government, and then it declares a dividend and sends some of that income down to people's pension funds and to people who are on fixed incomes, and they have to pay tax as well. So, we have to ensure that there is not a double taxation, that the same income is not being taxed twice.

So, Mr. Speaker, I believe that these will highlight the four major tax changes that took place in the Budget. A further reduction of personal income taxes; continuing what we have been doing since we came into office; to enable to have our tax system be competitive; to enable people to keep more money in their pockets; to enable people to pay their bills; to help us to attract skilled trades and medical professionals; to help us attract people who are going to invest here.

In addition, the non-refundable tax credit and the age amount for seniors have gone up. We have increased the Seniors' Benefit to $900, something that just a few years ago was $376 is now $900. We increased the Dividend Tax Credit for the purposes of avoiding double taxation, and we reduced the small business corporate income tax rate from 5 per cent to 4 per cent in order to enable small business, who are hit by a lot of increases, like the minimum wage. They have to pay the increase in the minimum wage. They have to pay the coming increases in unemployment insurance. They are going to have to pay, in terms of the Canada Pension Plan, if two-thirds of the provinces, including Quebec and the federal government go ahead with amendments to the Canada Pension Plan, small business employers are going to have to pay that.

So, they do complain a lot about that they are being hit time and time again. It is not one thing. It is the cumulative effect of all of these things. By reducing the small business corporate income tax rate from 5 per cent to 4 per cent, this will provide some help to them; as well as did the removal of the 15 per cent tax on insurance a few years ago. Do you remember how hated that tax was, 15 per cent on insurance? The Federation of Independent Business lobbied the government to reduce that tax over five years. We eliminated the tax in one swoop, and much to their surprise and to the delight of taxpayers in the Province, particularly low income and seniors as well, who had to pay this tax on insurance.

So, Mr. Speaker, I believe this is the summary of the various provisions set out in the Budget and also set out in this legislation, and I would urge the passage of second reading.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER (Kelly): The Chair recognizes the hon. the Member for Port de Grave.

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

I just want to take a few moments with regard to Bill 9, An Act To Amend The Income Tax Act, 2000 No. 2.

There are a few comments I want to make, I guess, after listening to the minister. One of the things I thought was very important was when he mentioned the recognition for the seniors. Certainly, when you reach a certain age level yourself, it is good to hear that type of comment being made.

Mr. Speaker, the other thing I was glad to hear was that he mentioned the name Vale, the mining company. We know they are going through a difficult time now, but I have to say, and I guess when you hear it from the Minister of Finance such comments, that it is good to know that he must think, as well, that this project will turn into being a wonderful project for the people of Newfoundland and Labrador.

Mr. Speaker, as we note, and the minister stated, rightly so, with regard to, by reducing income tax it is beneficial, not only to the people that we have here in our Province at the present time but also to the young skilled tradespeople who are still outside of our Province who are waiting. I know there are many jobs available but many of them have not found the particular job that they need. One thing about it, by reducing taxes, no doubt will help to encourage them to return to their Province once they find that certain skill that they are able to do.

Mr. Speaker, it is good to see that the taxes are being reducing. From the outset, I will admit that we will be supporting this particular bill, and to know that hopefully the day will come when we too can be like P.E.I. probably down in the 2 per cent bracket, but we are moving in the right direction.

As I said, he mentioned the seniors. There is no doubt about it, the seniors, many of them, go through a difficult time. I know the – I think they are called the 50 Plus, they have their conventions every year and they put forward many resolutions to government, where they would like to see government going in different directions with regard to tax deductions on various items and so on. So it is good to see that that has been considered, and hopefully many of their resolutions will be looked at over the next number of months to be able to say that they were satisfied with all the work they had asked government to look into and it has been completed.

So, Mr. Speaker, when it comes to the first part of the explanatory note, with the reduction in the personal income tax from 12.8 per cent to 12.5 per cent, and the higher bracket, 15.5 per cent to 13.3 per cent. As I was sitting here this afternoon, I went through a little calculation with regard to the second tax bracket, and I based it on someone in our Province. I was wondering what would the increases in the percentage, as well as the base portion, what it would mean to an individual in our Province who will be making $40,000.

When you calculate it out, Mr. Speaker, you will notice that last year, in the 2009 tax year, the Newfoundland tax on that amount of money, with the former percentages, would be $3,536.19. With the new percentages, and the base being increased from $2,392 to $2,408, that would mean that in the next taxation year, if it was all to go ahead in that time frame, would equal $3,498.25. So when you look at it from one year to the other, where government has decreased the taxes on those percentages, as well as the base portion, it would be a savings of $37.94. That is someone who would be making $40,000 a year. Now many people might say: Well, what is $37? Personally, I think $37 is $37, whether you want to buy it in groceries, whether you want to buy it in gas, or some fellow might say: well, that is a twelve-pack for me and a pack of cigarettes. Regardless, it is a savings. Maybe not to the point many people would want but it is in the right direction, and based on that, making $40,000, when you do the calculations – I hope I have them done right, and if they are done wrong I hope it is more than what I am saying, but that is what I calculated out Mr. Speaker.

The other portion that the minister mentioned is the age exemption. Once you reach the age of sixty-five, we know that last year, when anyone was doing their taxes, the amount was $3,655. I know it was indexed to $3,681 and now it is being increased to $5,000. I think that is a considerable jump from there. I know the federal government, their age amount it $6,408, but we do not expect to get up to the levels of what everyone else is doing. On that portion alone - I never calculated that out, minister, of how much they would save if they calculated that in there. I never had time to do that part of it. There is a savings, and that is what it is all about.

The other one I want to touch on is the reduction for small business corporate income tax rates from 5 per cent down to 4 per cent. You might say, well that is only 1 percentage, but still for the smaller businesses in our Province that can turn into a considerable amount. Knowing that they have so many fees and licences and so on, any reduction is welcome news.

Mr. Speaker, I just want to touch, for a minute, on small businesses. I do not want to pinpoint one group in my area over another because they are all important, but they are the people who play a major part in the economy of this Province.

I want to take a few moments just to touch on the fishery in my area in one community, and that is in the community of Port de Grave. Just to know what the value is, and a lot of those individuals, their enterprises, I would classify them as small businesses, even though they may go from six up to ten individuals from time to time, so they are not large corporations or anything like that. In that community, Mr. Speaker, just alone, the value of the fishing enterprises that are there if all the boats were in there tied up, is in excess of $50 million, when they are all in the harbour and not out fishing. This harbour also looks after boats from as far away as La Scie, Mary's Harbour, other areas in the Conception Bay area, Bay de Verde, Eastport and so on.

Mr. Speaker, out of the population there, there is approximately 740 people, and 550 of them are directly or indirectly involved in the fishery. Those small businesses, they are the people who carry out those enterprises. There was estimated landing, catch, this year from 18 million to 24 million pounds, and that estimated value anywhere from $27 million to $36 million, with 350 people working directly on the boats, and another approximately 200 people in the plant, plus the offloading crews and the truckers. So for those enterprises – and not only the enterprises, but any individual, whether they are a fisherperson, plant worker, whatever, any reduction, any increase that they can see coming back to them when they file their income taxes, is a welcome sight for sure.

So, Mr. Speaker, those really are the only comments I want to make on Bill 9 with regard – and like I said, the percentages that are used, I think they are very important to the individuals who, when they file their returns to know at the end of the day that they will be receiving an increase over what it was last year. I know some of those regulations come in July 1, 2010, however it is noted under section 7.(2), "Notwithstanding section 6.1, the amounts expressed in subsection (1) shall not be adjusted as prescribed in that section before the 2011 taxation year." Whether it comes into force this year, or in 2011, it is a decrease in the taxes, an increase in the amount of income or return that the people will receive.

So, Mr. Speaker, as I stated, we will be supporting this bill. Like I said anything that can be done to benefit our seniors, to benefit small business in this Province, which is the key component of what we classify as rural Newfoundland and Labrador. I know many times we are told that there is nothing happening in rural Newfoundland and Labrador, but the small businesses that are out there, it is what is keeping it alive today.

Every week when I go home, I go over the Trinity Bay side, over to one of the campgrounds over there. I can tell you, I would venture to say in the four or five campgrounds over there - they are only small businesses, the smaller stores and shops and so on - there is somewhere, I would say, between 500, 600 and 700 people – not individuals, but campers, probably two and three people in each vehicle who travel to that side of the bay. I can tell you, it is a tremendous increase for the small business owners in that particular area.

So once you take into consideration with the percentages that have been put forward, I think it is good news to the consumers of our Province. I will conclude, again, Mr. Speaker, by saying that we will be supporting Bill 9, An Act To Amend The Income Tax Act, 2000 No. 2.

MR. SPEAKER: The Chair recognizes the hon. Member for Signal Hill-Quidi Vidi.

MS MICHAEL: Thank you very much, Mr. Speaker.

I am pleased to stand and speak to Bill 9, An Act To Amend The Income Tax Act, 2000 No. 2. The bill, of course, as the Minister of Finance has pointed out, is the bill that puts into legislative language the changes in income tax that were announced in the Budget, which feels like an awfully long time ago now back in the end of March. The Minister of Finance is nodding; yes, he agrees it feels like a long time ago.

He has said what the changes were and I will just repeat them. The main purpose is to show the decrease in the personal income tax rates for the top two brackets. We have three brackets in this Province, and it was the second and third income bracket that received the decrease in rates from the government in the Budget.

I would like to speak to that for a minute. I did speak to this issue when the Budget came down, and in my response to the Budget I did put out my concerns. Not about a decrease, I do not have a problem with a decrease, but it is the way in which it is done. We have, in Newfoundland and Labrador, three tax brackets. Some provinces have four. The federal government has four. We have three. What happens because of having just three tax brackets is that we have an interesting group of people lumped together.

Our second tax bracket begins with incomes of $31,278. That is not a high income. Then the third tax bracket starts with people who have incomes of $62,556. That third tax bracket goes all the way from people who have incomes of $62,556, right through to the limit, whether someone has an income of $100,000, $250,000, $750,000, $1 million or $2million, they are all in the same tax bracket and they all pay the same rate. I think this is one of the issues I have, Mr. Speaker, with what the government proposed in its tax bracket for this year's Budget.

First of all, two years ago – and the minister alluded to this – they did give a break to people who are in the lowest tax bracket, but even with the people in the lowest tax bracket you have a range as well and you have everything from a number –

SOME HON. MEMBERS: Oh, oh!

MS MICHAEL: It is stopped. Okay, I will keep talking then. I would like to know who caused that to happen.

Even in the lower tax bracket, we have everything from people who live under the poverty line through to people who are just above the poverty line.

The government did, in Budget 2008, change the income tax rate for people in the lowest bracket. My position then, Mr. Speaker, and it is still my position, is that we should have a policy in place where anyone who has an income under the poverty line should not have to pay income tax at all, that if you are living under the recognized poverty line then you should not have to pay tax. I think that would be a very practical step that would really help this government with regard to the reduction of poverty, which is one of its main platforms - its Poverty Reduction Strategy. I keep insisting that there has to be a piece of the Poverty Reduction Strategy that has to do with people's real incomes. By having a policy whereby there would be no income tax for anybody under the poverty line, we would really, I think, help in having more money in the hands of low-income people.

This year the government did not do anything with regard to the lowest tax bracket, so the lowest tax bracket still has the same income tax rate that was given in 2008. As I said, I wish the government - I would love to see, next year, that people who earn less than the poverty line would not have to pay taxes at all. I think that would be something I would really encourage this government to look at for next year.

My concern with the other changes, the change with regard to the second and third bracket, the second bracket, it is very, very important that tax rate has gone down. It has not gone down a lot, but it has gone down enough to make some difference for people in that tax bracket. The rate has gone from 12.8 per cent down to 12.5 per cent. This group is the group of middle income earners, but I would like to suggest that part of the third bracket is also middle income earners - you do have a range in the middle income - and I really do believe that what we need in this Province is what some other provinces have and what the federal government has, that we need four tax brackets. Our top tax bracket, then, that we currently have would be cut, part would become the third bracket, and then the upper part would become the fourth bracket.

I say this, Mr. Speaker, because I do not think that people who earn $63,000 a year should be treated the same as people, for example, who earn $250,000 a year. I think that the people in the lower end of that tax bracket need a better break than the people at the upper end of our third tax bracket, and if we had four tax brackets instead of three then people who earn - and I do not want to put a figure to it but who earn - in the lower part of our current upper bracket, so from $63,000 up to a certain amount, that would be the third bracket and they would have a different percentage, and I would suggest it should be higher than the percentage of those who are in the really top bracket.

Right now, according to our latest figures, we have 841 taxpayers who earn over $250,000. I really think those people should - they do pay more tax, obviously, but if we are going to give tax breaks I think they do not need the same kind of tax break as, for example, a family with an income of $63,000 does. This is something that maybe marks me off from the government in terms of my thinking, but I really would urge this government to look at this issue.

Right now, with the changes to the income tax regime that this government is bringing in, those in the top tax bracket will have an average annual tax cut of $25,500 in that top bracket. I would suggest that those at the lower end of that top bracket, obviously, are going to have less than that, and it is going to be the ones in the upper end who are going to be having much more of a tax break than $25,500.

I think we need to improve two things. We need to improve the tax break for those who are the middle income earners, and for me that includes people who are in the lower end of the top bracket; and we also should have no taxes whatsoever for those who have an income under the poverty line.

Where I have the opportunity to speak to the bill, Mr. Speaker, I wanted to once again put out my position with regard to the income tax and how I think it should go. I think it would go a long way, the suggestion that I am making, especially for the lowest tax bracket; it would go a long way to really reduce poverty here in the Province. I think we would see real changes to our whole social and economic system.

We have to make sure that in our tax regimes - I would like to say to the government that just having the goal of having the lowest tax rate is not an adequate goal. I would also like them to see that we have a tax regime which is more equitable than other tax regimes and that realizes that we have to help those at the bottom more with the income tax regime than those at the top.

These are the main points, Mr. Speaker, that I would like to make. I think there is one more. The minister was speaking about minimum wage, and what I would like to know - and I do not know when the government is going to be ready to talk to us about this. It could be we have to wait until next year's budget, but the government now needs to look at what it is going to do now that the minimum wage will reach the goal that they set of $10 an hour. What happens now? Does that just stagnate; and, even though the economy changes, that stagnates? So, government now have to make sure that putting the minimum wage up to $10, which is where we will soon be, is not the end of the line for them.

The other thing that concerns me, which again relates to income for low-income earners, has to do with the income assistance. Two years ago, in 2008, income assistance, the budget said that we would have a COLA related to income assistance. In other words, every year income assistance would go up a percentage based on the cost of living; but, Mr. Speaker, I would like to say to the Minister of Finance that the income assistance was so low at that time, by having an increase in the cost of living each year based on the low-income assistance that we have means that people are earning again just a little tiny bit more in income assistance. For example, somebody on disability assistance, somebody who needs Income Support because of disability, a single person only receives $360-something every two weeks to live on, and that is supposed to cover everything in terms of - not their medication, because they have drug cards, but - to cover their housing, to cover their food, to cover their personal needs; $360-something every two weeks, Mr. Speaker. If that goes up by the increase in the cost of living, it goes up by pennies; it goes up by nothing. So, when this government put in the fact that inflation would be factored in to Income Support payments, it did not put in, it did not recognize, that they needed to appreciably bring up the Income Support payments, the level of Income Support payments, in order for the inflationary changes to mean anything.

So, we have a long ways to go, Mr. Speaker, with regard to having equity between those who are at the lower end and those who are at the upper end. The gap is growing. Research that is being done at Memorial University shows us that the gap between the lowest and the highest is growing, and I would like that to be the measure that the minister looks at in the budget next year, Mr. Speaker, to looking at what would be equitable tax changes that he would make.

I strongly urge this government to look at changing our tax brackets into a four tax bracket system, as I have said before, which is how it is done federally and which is how it is done in a number of the provinces.

Thank you very much, Mr. Speaker.

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

SOME HON. MEMBERS: Hear, hear!

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

Mr. Speaker, it is certainly a pleasure to get up today and add a few words to Bill 9, An Act To Amend The Income Tax Act, 2000.

Now, this is a bit of a misnomer. I guess 2000 was when sort of a major rejigging of the income tax took place, and since that time there have been over thirty-seven amendments to that act, not including what we are going to do here today.

One of the things that people need to understand about this particular Income Tax Act is that this is what Newfoundland can control in terms of the collecting of taxation. We are not bound by anything that Canada puts together, although we do piggyback a lot of our definitions on what they do. Essentially, this is our opportunity to make definitions this time, what kind of dollars we can bring in, and under what conditions we can bring in the certain amounts. Therefore, this legislation does tend to change as government sees needs to perhaps increase taxes, decrease taxes, change definitions, and that is a lot of what we are seeing here today.

Certainly, when you look at the Income Tax Act, essentially this is the legislation that gives us the ability to collect money in based on people's income. Now, obviously, we have other ways of doing it, whether it be through fees or licences or any number of things like that, but the long and short of it is that the bulk of the revenue that this Province is able to collect directly is through the Income Tax Act, such as the one that we are debating here today.

Now, there are a number of sections that are being looked at here today. The one that I guess will hit most people directly is section 7. Section 7 essentially deals with the amount of tax that is payable. In this, it outlines the different percentages that people will pay depending on what bracket they are in. Now, for those people who are not familiar with it, a bracket essentially defines a range of incomes whereby you will pay a particular percentage if your salary falls within that range. As was pointed out earlier, we have three brackets here with our tax structure in Newfoundland.

In preparing for today's few words, I did a little bit of research on it and realized that in many cases a lot of things that were in place in 2000 are still here. For example, in level one, the top threshold for that personal tax bracket was $29,590. In fact, that has stayed in place even up as far as last year and this is really the first year that this has changed, with an increase of $1,688. Now, with this - there are a couple of reasons to do this. One is a concept that is called bracket creep, where people's incomes might just get above a particular level. Even though they have not made substantially more money, they are into a higher percentage. So this kind of a change does allow for that a little bit, but it also dictates how many people stay within a particular bracket. For example, by changing the upper threshold of level one taxation up to $31,278 there are in fact more people who stay in that lower tax bracket. Like any of us, we all like to pay less taxes and this is just one way to sort of move the bar a little bit.

As was mentioned by the Leader of the NDP, level two is, I think the area where most of us probably find a lot of people being there. Again, a lot of the thresholds - in fact, the threshold stay from $29,590 up to $59,180 right on the whole way through, until this year where we find that those amounts have increased a little bit to the point that the upper part of the threshold, compared to last year, is $3,376. Again, the same type of thing is in effect. You have a certain amount there for a bracket creep but also you have more people who will now stay in that lower tax bracket. Anyone who makes that $3,000 more than the bracket last year is now down into the lower tax bracket. Even though the percentage has changed, it has gone from 12.8 per cent to 12.5 per cent, which on the whole might not be a large decrease but there are more people who are in that bracket.

I would expect that the real sticking point that anyone might have a problem with is with level three. In there we have – if you look at the decreases that have taken place since 2000, and I can say that it has been a steady decrease down, this is probably one of the biggest decreases that we have had. We have gone a grand 2.2. per cent down. A lot of the arguments might be: Well, these people make more money, they should pay higher; but, there are a lot of circumstances that come into play here, Mr. Speaker, and really it speaks to a lot of the other policies that we have been trying to bring forward with this government.

This economy is growing, it is progressing, and it does so on the basis of professional individuals who have education, experience in other jobs, who need to come to our Province. So, we have to present an attractive package for those people to come here. What are some of the things that we can do? Well, obviously, higher wages is one, but a lower tax bracket also says you will keep more of the money that you make. That might seem to be, on the surface of it, just a situation where: Oh, look, I have this chunk of change that is going to sit in the bank. I think history will show that the more money that people make the more that they keep. They, in fact, increase their disposable income. Oftentimes that disposable income does make its way back into the economy, results in better retail sales, better sales in a number of various industries and because of that, those industries grow. As a consequence of that growing, they develop more jobs. As more people have these jobs, well, they pay income tax. So, while it may seem like we are giving away a bit on the back end, we do in fact probably make it up in other areas of the economy.

So, it is a very integrated, very complicated sort of situation. It is sometimes very hard to follow the thread from one thing we do and how it can in fact have positive impacts down the line. Again, this is part of the very professional staff we have at the Department of Finance, the discussions we have with outside economists, whether they be with industry, whether it be in academia. Certainly, they do provide a valuable service in terms of informing us how we should go with taxation.

Moving on from that, Mr. Speaker, going to section 9, which is the age amount. Again, obviously it is a situation where anyone appreciates having to pay lesser tax. In the year 2000, the number $3,482 was a base amount upon which you calculated part of your age tax credit, your non-refundable tax credit. Through indexing, which is also in the legislation - as I believe the Member for Port de Grave indicated, this has been indexed up, and that is part of the legislation. It does account for indexing. So that amount did not stay static in 2000, rather it went up to $3,681. Now we have taken this a step further to make it a nice round $5,000. The net effect of this is that it increases the amount that is calculated for non-refundable tax credits up an additional $1,319. So, again - I stand to be corrected. I do not believe that translates into a direct $1,319 into a pocket, but it certainly means that as you progress through the income tax process that you will in fact pay less.

A couple of other things, just to conclude, section 20 talks about the dividend tax credit for anyone who invests in large corporations. That percentage has gone up. So, in fact, you get to keep more of your dividend. The idea being is that it makes it more attractive to invest, because you know that when you make the dividend less of it will be taken away from you. Again, when you look at investing – and the smart investor will also look down the road to the time when they cash in and realize that: Yes, I can get the money back that I made but I will also lose some of that in tax. This section right here says: Yes, we will take some of it on you but not as much as we did prior to today.

Lastly, section 40 talks about - it is under the category of corporation tax. Corporation tax is relatively hefty – balanced, but it is certainly not cheap. What this bill does is it takes the federal definition of what is a small business – I believe it is section 125 of the federal Income Tax Act which defines what a small business is - and if you fall into this category of being a small business then the Newfoundland portion of what you will be expected to pay goes from 5 per cent down to 4 per cent. Now, Mr. Speaker, that provides some relief in many areas, obviously having more money at your disposal is good for the bottom line, but it also helps when you have to pay perhaps increased premiums, increased fees, increased permits, anything like that that could happen. So again, it allows you to deal with the increase of doing business without, in fact, affecting the bottom line.

Mr. Speaker, this government has had a series of tax measures in the last number of years, starting in 2004. We can look at a pattern of reducing personal income tax and a number of other - I believe it was in 2004 - various fees increased which brought in an extra $26 million in revenue, but as the economy became better, as our bottom line became better, two years later, in 2006, we eliminated thirty-four fees which again brought down our revenue but again went right to the bottom line, to the pocketbook of all consumers.

Mr. Speaker, in conclusion, I would just like to say that these tax measures are more than just what they appear on paper. It is part of a very integrated, well-thought-out system and I will certainly support it today. No big surprise, I suppose, as I am a government MHA, but nonetheless, just from a pure business perspective I think it is good and from a consumer perspective I like the reductions.

Thank you.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: If the hon. the Minister of Finance and President of Treasury Board speaks now, he will close the debate.

The hon. the Minister of Finance and President of Treasury Board.

MR. MARSHALL: Thank you, Mr. Speaker.

I want to thank the hon. members for taking part in this debate and while they were talking it reminded me of what the totals were. Since 2007, there has been a cumulative $1.2 billion in decreased taxes in this Province. On an annualized basis, it is $412 million a year. So, the people of this Province are paying annually $412 million a year less in taxes than they were paying back prior to 2007.

I would like to just briefly respond to a couple of the comments made by the hon. Member for Port de Grave and the Leader of the NDP. The hon. Member for Port de Grave talked about someone in the second bracket, which I think ranges between $32,000 and about $60,000-odd. He said that when he compared the two the break, this year over last year, that the break was only $37 which he said was a small amount, although he did not say they were going to send it back.

I think what you really have to look at is you cannot just take one year and compare it to the next; you have to look at the trend. If you look at that second bracket, since back in 2007, you will see that the tax rate went from 16.16 per cent down to 13.8 per cent, down to 12.8 per cent, down to 12.5 per cent. If you compare last year to this year, you are looking at a drop of 0.3 per cent, but if you look at the trend since 2000, the drop has been almost 4 per cent. The fact is that over the last number of years taxes have fallen drastically, the tax rates have fallen drastically in this Province and people are left with more of their own money to spend.

The Leader of the Opposition talked about taxes have to be equitable and I agree with that. That is one of the principles of a competitive tax system; to be sure that is equity. If you look at the Atlantic Provinces, and you want to take a look at equity, let's take the lowest bracket, let's take the first bracket, the lower income bracket, and in this Province the tax rate there is 7.7 per cent. That is why it did not go lower this year because it was already the lowest in Atlantic Canada. Nova Scotia is 8.79 per cent, Prince Edward Island is 9.8 per cent, New Brunswick is 9.3 per cent, so people in the lowest bracket, lower income citizens who live in Newfoundland and Labrador pay a lesser tax rate on their taxes than in any other jurisdiction in Atlantic Canada and it is also lower than Manitoba and it is lower than Saskatchewan.

In the second bracket, in Newfoundland and Labrador we have reduced it to 12.5 per cent, in Nova Scotia it is 14.95 per cent, in Prince Edward Island it is 13.8 per cent and it is the same as us in New Brunswick. I think when you look at equity; I think people in the Atlantic Provinces will be very pleased at the rates that we are paying in this Province.

In the third bracket, Newfoundland and Labrador is now down to 13.3 per cent, matching New Brunswick. In Nova Scotia you would pay 16.67 per cent and you would pay about the same in Prince Edward Island. The point is that people in this Province are paying the lowest tax rates in Atlantic Canada. We are paying $412 million a year less than we were paying a number of years ago.

The Leader of the Opposition also talked about, she recommended there would be a fourth bracket for people in the $250,000 range. Yes, that would appear at first blush to make good sense, but we are trying to attract to this Province certain people, certain skilled tradespeople, certain medical health professionals, particularly doctors. The doctors we are trying to get, the medical specialists we try to get, the pathologists, the oncologist and the radiologists and what have you, they are making this type of money. As I said earlier in my remarks, we have to make sure it is not just enough of paying them a competitive wage with the rest of the country. They look at what they are going to take home. They look at their disposable income to see what is left. They look at what the tax rates are and if we start charging tax rates in that bracket, then we could not get these people.

Again, it was mentioned that there was no reduction in the first bracket, the lowest bracket this year and that was because it was already the lowest tax rate in Atlantic Canada, so there is no need to do it this year. Of course, our emphasis over the last four years in lowering taxes has been geared to the lower end, the lower income Newfoundlander and Labradorian. This particular year, we decided that since the middle bracket and the highest bracket had not received proportionately as much as an increase as those in the lower bracket, we decided to do something to allow those people who pay substantial taxes, people in the second bracket and the third bracket pay a lot of tax revenue to this Province, and we wanted to give them proportionately more of the same break that we had already given to people in the lower tax bracket.

The Leader of the NDP also mentioned people who should not pay taxes, where taxes should start. It is important to remember that we did, and I mentioned this in my earlier remarks, that we did introduce back in 2004 the Low-income Tax Reduction which removed from the Newfoundland and Labrador tax roll, we cannot remove you from the federal government tax rolls, only the federal government can do that, but we removed people making, individuals making $12,000 or less, were removed from the Newfoundland and Labrador tax rolls and families of $19,000, making $19,000 or less pay no taxes.

In 2007, for individuals, the $12,000 threshold was increased to $13,000 and it was indexed, and for families it was increased from $19,000 to $21,000 and indexed. Then last year, my colleague the then Minister of Finance, the now Minister of Health and Community Services, increased the rate for individuals to $15,911 and for families up to $26,625. So, the low-income tax benefit has been enhanced. It was introduced and enhanced on two occasions. It has removed thousands of people who previously paid taxes in Newfoundland and Labrador and who now pay no taxes at all.

I believe that answers the questions that came up. I thank hon. members for their contribution to this debate, and I urge passage of this legislation that is going to put more money in people's pockets in this Province.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Is it the pleasure of the House that the said bill now be read a second time?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, ‘nay'.

Carried.

CLERK: A bill, An Act To Amend The Income Tax Act, 2000 No. 2. (Bill 9)

MR. SPEAKER: This bill has now been read a second time.

When shall this bill be referred to a Committee of the Whole House?

Now?

Tomorrow?

Presently?

MS BURKE: Presently, Mr. Speaker.

MR. SPEAKER: Presently.

On motion, a bill, "An Act To Amend The Income Tax Act, 2000 No. 2", read a second time, ordered referred to a Committee of the Whole House presently, by leave.

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

MS BURKE: Thank you, Mr. Speaker.

I call from the Order Paper, Order 4, second reading of a bill, An Act To Amend The Portability Of Pensions Act, Bill 22.

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

SOME HON. MEMBERS: Hear, hear!

MR. MARSHALL: Mr. Speaker, I move, seconded by the Minister of Health, that Bill 22, An Act To Amend The Portability Of Pensions Act, be now read a second time.

MR. SPEAKER: Is it moved and seconded that Bill 22, An Act To Amend The Portability Of Pensions Act, be now read a second time.

Motion, second reading of a bill, "An Act To Amend The Portability Of Pensions Act". (Bill 22)

MR. SPEAKER: The hon. the Minister of Justice – or the hon. the Minister of Finance and President of Treasury Board.

MR. MARSHALL: You should work for The Western Star, Mr. Speaker.

Mr. Speaker, I am pleased today to introduce amendments to the Portability of Pensions Act. This act provides a mechanism, Mr. Speaker, for employees to transfer their pensionable service between the public sector pension plans.

Now, Mr. Speaker, pensions in this Province are regulated by the government under the Pension Benefits Act, and that comes within the purview and under the jurisdiction of my good friend and colleague, the Minister of Government Services, who regulates pensions in Newfoundland and Labrador through that legislation. Mr. Speaker, my role in my capacity as Minister of Finance and President of Treasury Board, and Minister Responsible for the Public Service Secretariat, is the five different pension plans that government has – not as government, but that government has – as an employer. For those who listened to my previous remarks during the discussion of the tax bill about pensions, these pension plans that we are referring to are not being provided because it is a government plan, being provided to the people of the Province by government; it is registered pension plans which the government provides as employer, similar to any other employer out in private sector would work with their employees to provide a registered pension plan.

The public sector pension plans we are referring to are: the Public Service Pension Plan, the Teachers' Pension Plan, the Uniformed Services Pension Plan, the Members of the House of Assembly Pension Plan, and the Memorial University Pension Plan. An employee covered under one of these plans, of course, could change employment and can move therefore into another pension plan.

I cannot help but think of the number of teachers who would be covered under the Teachers' Pension Plan and who get elected to the House of Assembly. I can think of a plethora of teachers, and I see them waving to me now from across the hall. I guess they would, when they come into this House and become MHAs, they would transfer their pensionable service under their plan to a new plan. This act merely deals with how we go about doing that.

An example I have, Mr. Speaker, is an employee, say, moving from MUN to the Public Service Plan can transfer the number of years of service they had at Memorial University to the new plan, and have that service count towards their future public service pension.

How do you do this, Mr. Speaker? Under the current provisions of the act, the employee would transfer from his or her old plan the contributions that they have made, and the contributions that their employer has made, and the interest that is earned on those contributions; because, as I said earlier, Mr. Speaker, you do not get a pension plan by waving a magic wand. In order to be a pension plan, there have to be contributions made to that pension plan, and the more that is contributed, and the more the contributions earn out in the market or wherever they are invested, obviously, the more money available for the pension.

In the case of an employee who is transferring, those contributions, plus the employer's contributions, plus the interest earned on those contributions, will be transferred to the Public Service Pension Plan. The matching contributions that Memorial made on behalf of the employee's behalf, plus interest, would also be transferred, so everything would be transferred into the new plan.

On the other side of the transaction, officials of the Department of Finance - there is a Pensions Division of the Department of Finance - they would determine the amount of funds that are required to credit all of the employee's service under the Public Service Pension Plan. This amount would be twice the contributions that would have been paid by the employee had they participated in the Public Service Pension Plan for the period of service they worked at Memorial. The salary and the contribution rate at the date the employee was hired under the Public Service Pension Plan would then we used to calculate the amount required. If the amount available for transfer from MUN is less than the amount required by the Public Service Pension Plan then the employee had an option. Number one, the employee could pay the difference; number two, the employee could be credited with a lesser, lesser period of service.

Mr. Speaker, government is proposing an amendment to this legislation which will change the basis for service transfers between the plans subject to the act. Commencing on January 1 next year, January 1, 2011, transfer amounts would no longer be based on the contributions to the plans plus interest. I think we are the only province left that does transfer pensions using this particular formula. Under the proposed amendment, the transfer amounts to and from plans will be based on actuarial cost of the service at the date of the election to transfer. So, instead of just transferring in the contributions plus interest there would be an actuarial evaluation done. In other words, the amount that would go in, the amount would be transferred, which means the amount that would have to be transferred assuming a particular rate of interest would be earned that will provide the pension when the pension is called upon to be paid.

The actuarial cost, Mr. Speaker, represents the present value of the pension benefit related to the period of service based on the actuarial assumptions used in the plans' most recent actuarial evaluation. It is the current standard under all the plans for transferring service to and from plans outside the provincial public sector.

In other words, if somebody transfers from one of our plans to that of another provincial government, actuarial value is what has been used. Since 1991 it has been the standard for employee purchases of service under the plans. Transfers based on actuarial costs ensure that the transfers are cost neutral to the plan.

So, to continue with the previous example, under the proposed amendment, Mr. Speaker, an employee transferring from MUN to the Public Service Plan will be able to transfer from the MUN plan an amount representing the greater of his termination value under the MUN plan or the actuarial value of his or her pension entitlement under the MUN plan at the date of transfer. On the public service side, the employee will be advised as to the actuarial cost of the period of MUN service under the Public Service Pension Plan based on the actuarial assumptions under that plan using the employee's age and the salary at the date of transfer. Similar to the current arrangement, if the amount available for transfer for MUN is not sufficient to cover the amount required to credit all of the service under the Public Service Pension Plan, the employer will be given an opportunity to either make up the deficiency or to accept a reduced period of credited service under the Public Service Pension Plan.

This change, Mr. Speaker, is being implemented to ensure consistency in costs relating to the crediting of service under the plan. As I noted earlier, the crediting of pensionable service under this act is the only remaining situation which does not reflect the actuarial cost of the service. Currently, if someone purchased prior service or there was a transfer of service between other plans, such as the federal government's plan, they are all based on actuarial cost. So this is the last transfer that needs to move from the old system to a new system where it is based on actuarial cost.

In order to ensure that the affected employees are not negatively impacted, Mr. Speaker, we are going to allow a transition period from the date of Royal Assent of this legislation to December 31, 2010. Employees will be given the opportunity to evaluate their transfer options under both methods, so they can be sure to take the method that will be most beneficial to them.

The Pensions Division of the Department of Finance will provide estimates under both methods to plan members, provided their request to transfer is received by December 31, 2010. Transfer requests received after that date will all be based on actuarial cost. Once the bill receives Royal Assent, all employees under the plan will be notified of the changes. It should be noted, Mr. Speaker, that the changes will only impact those employees who have service in one of the other plans and who have left their contributions un-deposited in the plan. It is anticipated this amendment will impact about 200 to 300 employees and that is less than 1 per cent of the active participants in the pension plan.

Mr. Speaker, I therefore look forward to the comments of other members and would urge passage of second reading of this particular legislation.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER (Fitzgerald): The hon. the Member for the District of The Straits & White Bay North.

MR. DEAN: Thank you, Mr. Speaker.

It is my privilege this afternoon to be able to stand and speak for a few moments to this act, An Act To Amend The Portability Of Pensions Act.

I thank the minister for the explanation that he has given in terms of the actuarial cost clause that is being changed in this act to basically bring it in line with all of the other transfers and acts that have already taken place. My understanding it is the last transfer, as the minister said, to go from the old system to the new system. Certainly, the pension plans are a very important part of the employee's time and efforts that they put into their careers and as they transfer from one department or one pension plan to another, it is important that they have the opportunity that is best to them and so on, to be able to do that.

If I understand the minister correctly in his example that he gave of the MUN employee of the current situation and the current process, if you will, in terms of transfer of contributions is based on what the employee has paid, based on what the employer has paid, and based on the interest that has been accrued in that particular pension plan for the years of service and so on that they have been involved. Then on the proposed change, no longer based on the contribution plus the interest, but on the actuarial evaluation, assuming a rate of support, if I understood the minister correctly, in terms of what that pension would be valued at, at eligibility or pensionable time.

What I would like for the minister to do, if he could explain something for me, just for clarification purposes. Can he tell me if he is aware of what the difference would be on the new plan compared to the old plan of what would be required from an employee, were he or she to want to bring that pension to full value, if you will, rather than coming in at a lesser years of service, if the employee wanted to get the full credit for the years of service that they have been in that pension plan - coming in under the new system will it cost more to do that, or would it be less or would it be basically the same? I do not know if you understand what I am asking, but my understanding is that there probably would be some difference because we are using a different calculation of interest, if you will. So I assume that the figures would be different. If we could have some idea of what that difference would be in terms of percentages or something, then I would appreciate the minister speaking to that.

Again, it is a straightforward change. Not too much to debate really. I just ask the minister if he could speak to that for us, Mr. Speaker.

Thank you.

MR. SPEAKER: The hon. the Member for the District of Signal Hill-Quidi Vidi.

MS MICHAEL: Thank you very much, Mr. Speaker.

I appreciate the opportunity to speak to Bill 22, An Act To Amend The Portability Of Pensions Act, and I thank the minister for his explanation. He might appreciate my saying this, he probably will, he actually made sense of the bill to me. It is not easy making sense of things like this bill, especially when you are dealing with actuarial value et cetera.

I think that the amendment is an important amendment. I think, as the minister pointed out, it is not going to affect a lot of people. I think he said somewhere between 200 and 300, but it does seem to be closing a bit of a loophole and bringing us into, I think, practice that is the practice that is most common across the country. I think it is important for that because right now, a person transferring a pension gets a year to year credit for their pensionable years if they transferred to certain other government pensions but under these amendments that would change to transferring at actuarial value, which will be more realistic in terms of what the value of the pension is. In actual fact, would be more accurate as to the value of the pension. The way it was in the past really was not the actual value. So I think it is extremely important that this happen. I think it will be fairer in terms of justice, in actual fact, in the way that the pension is done.

The pensions are important, and those of us who work in the government sector are people who are fortunate because we do have benefit plans, pension plans that really do give us some security when we get into older age, when we are no longer earning salaries. I think it is very important that we have pension plans. For people who do not work in workplaces with pension plans, and I wish everybody did, but for those who do not, in Canada we show our commitment to people who do not work in places with pension plans through the Canada Pension Plan. The purpose of the Canada Pension Plan is to help everyone have a work related pension when they retire. Now those of us who have public sector pension plans, some actually have - that plan affects what they get from the CPP when they reach CPP. That is not true for all but it is true for some.

It is important that we have work related pension plans which recognize that people who have spent time in the paid workforce, and there are those who would say that it should be for everybody even those who have done unpaid work, should have a pension that recognizes the years that they have put into the pension plan. Of course, as the minister said with regard to the public sector pension plans, it is the same as a CPP. You just do not get the CPP because you worked. You pay into it and payments are made both by the employer and the employee, so the CPP as well is based on the same principle as public service sector plans except the pension plan, the CPP, is there for all people who have paid into it.

It is important, right now there is a discourse going on in the country. I know that the Minister of Finance has been a part of that in meetings with other Ministers of Finance. I think that meeting took place about one week ago, where they actually looked at pension plans. The discourse that is going on is looking at whether or not the pension plans that we have are accurate. Are people, in actual fact, getting into their senior years with adequate economic security? I think everybody would agree that by today's standards, and the cost of living today, we, in actual fact, our Canada Pension Plan is not adequate to help people have economic security. There is discussion going on and the Canadian Labour Congress is leading part of that discussion which would see the Canada Pension Plan become more realistic in terms of really helping people save for an adequate retirement.

Another thing that is being looked at by people who are involved in this discussion is that the Guaranteed Income Supplement also needs to go up. I think the percentage that is being recommended is by 15 per cent because the Guaranteed Income Supplement is for seniors whose income is a poverty income and a GIS gives a supplement to them to help raise their salary, their income. Right now, the GIS is not adequate in lifting people up high enough, lifting seniors up high enough from poverty. The discussion going on now is also that the Guaranteed Income Supplement should go up by 15 per cent because very often you have people who need the GIS who probably did not pay into CPP. Sometimes you may have somebody who paid into CPP at very low levels of wages, so the CPP is not very high, or they paid into it for a very short period of time, and so again the amount of money they get is not very much. So the GIS, the Guaranteed Income Supplement, help seniors who are low income, and as I said, the discussion now is that should be raised to also help. It is not a pension per se, but it is a supplement to help.

The other thing that is being recommended in the discussion that is going on is that we need federal pension insurance so savings are protected. Today, with everything that is going on in our economy and with investment suffering, et cetera, the need to protect savings, I think, is becoming more in people's minds than it has ever been before. So again, this would be federal pension insurance; this would not be provincial. Of course, the CPP is also federal. It is important to see our pensions in the whole package, both what we get from our federal system as well as what we get from our provincial system.

We do have a number of issues around pensions, which I think are extremely important. Of course, in the bill that we are talking about, we are specifically talking about the portability of the government pensions, and I obviously will be voting for this bill. It is something that needs to happen and it is quite logical from every perspective that one can look at it. This is also a time for us to remember that pensions – a lot of pensions are not adequate. Some are and some are not. We have pensioners who are living in poverty.

If we can, for example, change the CPP, if on a federal level, we can have the CPP changed, that would actually really benefit people who are on government pensions that are low. Low because of the wage they earned at the time they got it, low because of the numbers of years they worked, et cetera. So the relationship between the Canada Pension Plan and our provincial plans are very connected, and I would encourage the minister, in the talks that are going on between all of the Ministers of Finance, to really give support to the changes in the federal CPP that are being discussed because it definitely would benefit our people, especially those who earn low public service sector pensions, again, as I said, because their wages were low or because they did not work full years of work.

So with that, Mr. Speaker, I move adjournment. I think it is 5:30 p.m. and I think it would be called for me to do that.

AN HON. MEMBER: (Inaudible).

MS MICHAEL: Yes, I really do not have anything left to say. I am willing to leave it at that.

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

MS BURKE: With that, Mr. Speaker, we will recess from 5:30 p.m. to 7:00 p.m. and we will return, as the motion we put down, to continue the debate at 7:00 p.m.

MR. SPEAKER: This House now stands recessed until 7:00 o'clock.


June 22, 2010                        HOUSE OF ASSEMBLY PROCEEDINGS               Vol. XLVI  No. 41A


The House resumed sitting at 7:00 p.m.

MR. SPEAKER (Fitzgerald): Order, please!

The hon. the Government House Leader.

MS BURKE: Thank you, Mr. Speaker.

We will continue debate on Bill 22, second reading of An Act To Amend The Portability Of Pensions Act.

MR. SPEAKER: The hon. the Member for the District of Mount Pearl North.

SOME HON. MEMBERS: Hear, hear!

MR. KENT: Good evening, Mr. Speaker.

It is great to be back. I am pleased to rise just for a few minutes to speak to Bill 22, which is An Act To Amend The Portability Of Pensions Act.

Mr. Speaker, as previous speakers have indicated, we are talking about a really straightforward change here. I think that the question raised by the Member for The Straits & White Bay North will be addressed by our minister. I also would agree with what the Member for Signal Hill-Quidi Vidi said, the explanation provided by the minister at the beginning of the debate today certainly did make sense. We are talking about a piece of legislation that at this point affects only a few hundred people and it is bringing our legislation in line with the practice of other jurisdictions across the country.

In terms of Bill 22, this bill would amend the Portability of Pensions Act and provide for the transfer of pensionable service between pension plans that are guaranteed by the Province based on actuarial cost. For employees who elect to transfer pensionable service before January 1 of next year, this bill would provide them with the option to transfer pensionable service based on actuarial cost or based on the currant arrangements in section 4 and section 6 of the act. For those who elect to transfer pensionable service on or after January 1, the bill would provide for the transfer based on actuarial cost.

Mr. Speaker, I can safely say that this government is committed to ensuring that our pensioners have options available to them in their retirement. Knowing that you have sufficient income in your retirement is vital to one's piece of mind. It is also important to understand the investment options, the opportunities and the liabilities that affect people in retirement. When dealing with uncertain economic times, this is even more important for retirees to explore all the possibilities available to them and select the options that are indeed best for them. Because of this economy that we find ourselves in, we have certainly a very dynamic and active labour force. Our employees are looking for new opportunities, whether it is due to career advancement goals, relocation, layoffs, or simply the desire to change career paths.

So, as a government, we do have a responsibility to plan for this and to help our employees in advance of their potential shift to other career prospects. This legislation in some ways really speaks to these issues. It ensures the portability of pensions, making it easier and more equitable for our employees to transition their retirement savings to other investment plans.

Speaking of pension plans, Mr. Speaker, when this government took office in 2003, there was a serious unfunded liability in the pension plans in this Province. Because of the leadership this government showed in negotiating the $2 billion 2005 Atlantic Accord payment, we have been able to invest over $3 billion of taxpayers' money into the Teachers' Pension Plan, the Public Service Pension Plan, and the Uniformed Services Pension Plan. Even with these major investments, the plans continue to have an unfunded liability, which we will continue to work hard to address.

Mr. Speaker, this is, as I said at the beginning, a really straightforward amendment to the Portability of Pensions Act. We are going to modify the formula for transferring pensionable service between the public sector defined benefit pension plans, which include the Public Service Pension Plan, the Teachers' Pension Plan, the Uniformed Services Pension Plan, the MHA Pension Plan, and the MUN Pension Plan. The current formula requires transfer of the employee and employer contributions, plus interest, to the employee's new employer. This practice is inconsistent, actually, with all other service crediting provisions under the plans which are based on actuarial cost.

So, actuarial cost-based transfers are more equitable for the plan member. The transfer recognizes the value of the accumulated pension in the member's former plan and the cost to provide the same benefit under the new plan. Actuarial based transfers also protect the new plan from inheriting any unfunded liability, as they are cost neutral to the importing plan. This seems to be a very reasonable approach, Mr. Speaker. With this amendment we have provided for sufficient time, as well, to communicate all the changes to the employees that are affected.

Mr. Speaker, on that note, I simply want to say that I fully support Bill 22. I trust that others in this House will do the same, and I look forward to the rest of the debate.

Thank you.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

If the hon. the Minister of Finance and President of Treasury Board speaks now he will close the debate on second reading of Bill 22, An Act To Amend The Portability Of Pensions Act.

The hon. the Minister of Finance and President of Treasury Board.

MR. MARSHALL: Thank you, Mr. Speaker.

I thank the other hon. members of this House for taking part in this debate involving the Portability of Pension Act. Basically, a straightforward amendment which brings us into the twentieth century and will ensure that transfers take place based on actuarial value as opposed to based on an old formula of double contributions plus interest, which was used because we did not have the technology to do it on a more modern basis, quite frankly.

The Leader of the New Democratic Party did remind me to say a few words about the Finance Ministers' meeting in Crowbush, Lakeside, Prince Edward Island, which I attended a few weeks ago. The first Finance Ministers' meeting which dealt with the issue of pensions was held in Whitehorse. I was unable to attend that meeting, but I do know based on discussions I had with my colleague, the Minister of Government Services who attended on our behalf – essentially, coming out of that meeting there were three options that Finance Ministers' wanted further research on before they would have discussion as to which of the options they wanted to pursue.

One was an amendment to the Canada Pension Plan which is an initiative that has really been championed by the Canadian Labour Congress in enhancing benefits to that plan. The Canadian Labour Congress talked about, in terms of Canada Pension Plan, increasing benefits by about 50 per cent. They also made some other suggestions relating to the Guaranteed Income Supplement and have insurance to protect against bankruptcies of pension funds.

The second one that was discussed was a supplemental voluntary defined contribution plan that would be operated and ran by the present Canada Pension Plan. The third one that was under discussion was what can best be called a multi-employer plan for those employers and those employees who presently do not have pension plans. This would be done by senior or large banks and insurance companies. They would provide this opportunity, again for employers and employees who do not have registered pension plans. Given the size, because it would be large, it was expected that because of economies of scale, costs could be kept down. They thought that cost might be an impediment to some people investing enough for their retirement.

There was some research sent around to the various Finance Ministers, but prior to the meeting - it was interesting. The day before the meeting in Prince Edward Island, the federal Finance Minister, Mr. Flaherty, wrote a letter to all of the Finance Ministers suggesting that the middle option, the supplemental voluntary plan, not be accepted and that ministers consider only what he referred to as modest increases – modest was the word he used – in the Canada Pension Plan and the benefits in the Canada Pension Plan, and to go with this multi-employer plan, and of course to do further research or to provide further opportunities for Canadians to increase their understanding – their financial knowledge – to help them plan for the retirements. Interestingly, the same day that Minister Flaherty sent a letter, the Minister from Ontario, Minister Duncan, sent a very similar letter recommending the same thing, except instead of using the word modest, he used the word moderate; a moderate expansion.

When the matter finally did come up at the meeting, during the course of the meeting – it was not the only item on the agenda, but when it did come up the problem that I had and some other ministers had was: Well, what do you mean by modest and what do you mean by moderate? Do you mean a 35 per cent increase in the Canada Pension Plan or a 50 per cent increase in the plan as the Canadian Labour Congress had put forward? Others had said that by simply raising the benefits you were not hitting the people who were not saving. According to the research I saw, that people who, say $35,000 and incomes lower, that they were looking after their retirement. People above $100,000 – well, who cared? The people in the middle, between $35,000 and $100,000, they were the ones that, according to the research, were not putting enough aside to provide for their retirement, and when they did retire, they were going to have a shock.

There were recommendations that rather than increase the benefits under the Canada Pension Plan, that instead increase what is called the YMPE, the yearly maximum pensionable earnings, which I think this year is $47,000. It is my understanding that under the Canada Pension Plan everyone contributes a certain proportion of their income or their earnings – I think it is around 9.9 per cent – up to $47,000, and that is the maximum. One suggestion was to increase the YMPE up to $70,000; another was to increase it to $90,000. The problem, of course, is that in Minister Flaherty's suggestion of a modest increase and Minister Duncan's suggestion of a moderate increase: well, what do you mean? Which one? There had been no decision.

So, they have agreed that there will be a taskforce of officials put together or be referred to a taskforce of officials to look into that in more detail and also look into the other multi-employer plan; which is interesting, in that it will provide an opportunity for those employees who do not have an employer that has a registered plan, it would give them the right to a plan. The problem is it is still a voluntary plan. If it is not mandatory, like the Canada Pension Plan is, the question is: Will the people, who are not saving, will they save under this new format? I suspect they will not, because even though the cost of the plan may be cheaper I do not think that is sufficient inducement to have people go on the plan.

On the other hand, we hear the objection - and I mentioned this earlier, the objection from Members of the Canadian Federation of Independent Business who are opposed to this. Their views, their opposition was echoed by Alberta, by Dr. Ted Morton, the Minister of Finance in Alberta, who felt that the plan was good enough as it was. He felt that governments should not force employees to make more contributions to a pension plan or force their employers to make more contributions to the pension plan. In his view jobs were more important than retirement. That was the view that he expressed.

So, I am looking forward to seeing the final research. I personally like the idea of enhancing the Canada Pension program. On the other hand, there is the concern with forcing people to do things they may not wish to do. Someone might say I prefer to spend my money now. I have a mortgage to pay; I have a car loan to pay. I am trying to put my kids through school, I have enough on my plate now and I want to worry about my retirement later on. In spite of the fact that that thinking may not be right, who are we to say to that person: Well, we do not care what you think; we are going to mandate that you do it. So it is tough. It is quite a debate. It is quite an interesting debate.

In terms of the suggestion from the Leader of the Opposition that we increase the Guaranteed Income Supplement, that is certainly something I would personally support in a major way. Again, the Old Age Security and the Guaranteed Income Supplement are programs of the federal government, of the Government of Canada. They are entirely paid for by the Government of Canada out of their general tax revenues and we have no say in that program.

With respect to the Canada Pension Plan, the provinces are co-stewards with the federal government in terms of the Canada Pension Plan, and to make a change in that plan you require the support of the Government of Canada, and also two-thirds of the provinces, including Quebec – one of them has to be Quebec – that also has two-thirds of the population of the country.

That is the debate that will take place. The debate has been narrowed, it has been narrowed down to these two issues. What it is going to be with the Canada Pension Plan, at this point I do not know. I mentioned the two options. It could be a combination of both of those options. Obviously, that debate is going to be of interest to retirees in this Province, and also to all MHAs in the House of Assembly.

So, with that, Mr. Speaker, I will end debate and look forward to this matter going to committee.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Is it the pleasure of the House that Bill 22, An Act To Amend The Portability Of Pensions Act, be now read a second time?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, ‘nay'.

The motion is carried.

CLERK: A bill, An Act To Amend The Portability Of Pensions Act. (Bill 22)

MR. SPEAKER: Bill 22 has now been read a second time.

When shall this bill be referred to a Committee of the Whole House?

MS BURKE: Now, Mr. Speaker.

MR. SPEAKER: Now.

On motion, a bill, "An Act To Amend The Portability Of Pensions Act", read a second time, ordered referred to a Committee of the Whole presently, by leave. (Bill 22)

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

MS BURKE: Mr. Speaker, I move, seconded by the hon. Minister of Natural Resources, that the House resolve itself into a Committee of the Whole to consider Bills 3, 9, 22, as well as Bills 10 and 28 and the associated resolutions.

MR. SPEAKER: It is properly moved and seconded that this House now resolve itself into a Committee of the Whole and that I do now leave the Chair.

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, ‘nay'.

The motion is carried.

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

 

Committee of the Whole

CHAIR (Kelly): Order, please!

We are now debating Bill 3, An Act To Amend The Income Tax Act, 2000.

MS BURKE: Mr. Chair, I just wanted, for the record, to note that when I read in the bills referred to the Committee of the Whole, I said Bill 28 and the associated resolution but I meant Bill 25 and the associated resolution. I just want to correct that for the record.

A bill, "An Act To Amend The Income Tax Act, 2000". (Bill 3)

CLERK: Clause 1.

CHAIR: Shall clause 1 carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

On motion, clause 1 carried.

CLERK: Clauses 2 and 3.

CHAIR: Shall clauses 2 and 3 carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

On motion, clauses 2 and 3 carried.

CLERK: Be it enacted by the Lieutenant-Governor and House of Assembly in Legislative Session convened, as follows.

CHAIR: Shall the enacting clause carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

On motion, enacting clause carried.

CLERK: An Act To Amend The Income Tax Act, 2000.

CHAIR: Shall the title carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

On motion, title carried.

CHAIR: Shall I report the bill without amendment?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

Motion, that the Committee report having passed the bill without amendment, carried.

CHAIR: Order, please!

We are now debating Bill 9, An Act To Amend The Income Tax Act, 2000 No. 2.

A bill, "An Act To Amend The Income Tax Act, 2000 No. 2". (Bill 9)

CLERK: Clause 1.

CHAIR: Shall clause 1 carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

On motion, clause 1 carried.

CLERK: Clauses 2 to 5 inclusive.

CHAIR: Shall clauses 2 to 5 inclusive carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

On motion, clauses 2 through 5 carried.

CLERK: Be it enacted by the Lieutenant-Governor and House of Assembly in Legislative Session convened, as follows.

CHAIR: Shall the enacting clause carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

On motion, enacting clause carried.

CLERK: An Act To Amend The Income Tax Act, 2000 No. 2.

CHAIR: Shall the title carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

On motion, title carried.

CHAIR: Shall I report the bill without amendment?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

Motion, that the Committee report having passed the bill without amendment, carried.

CHAIR: We are now debating Bill 22, An Act To Amend The Portability Of Pensions Act.

A bill, "An Act To Amend The Portability Of Pensions Act". (Bill 22)

CLERK: Clause 1.

CHAIR: Shall clause 1 carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

On motion, clause 1 carried.

CLERK: Clauses 2 to 6 inclusive.

CHAIR: Shall clauses 2 to 6 inclusive carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

On motion, clauses 2 through 6 carried.

CLERK: Be it enacted by the Lieutenant-Governor and House of Assembly in Legislative Session convened, as follows.

CHAIR: Shall the enacting clause carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

On motion, enacting clause carried.

CLERK: An Act To Amend The Portability Of Pensions Act.

CHAIR: Shall the title carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

On motion, title carried.

CHAIR: Shall I report the bill without amendments?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

Motion, that the Committee report having passed the bill without amendment, carried.

CHAIR: Order, please!

We are now debating the related resolution and Bill 10.

CLERK: That it is expedient to bring in a measure respecting the imposition of taxes on tobacco.

CHAIR: Shall the resolution carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

On motion, resolution carried.

A bill, "An Act To Amend The Revenue Administration Act". (Bill 10)

CLERK: Clause 1.

CHAIR: Shall clause 1 carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

On motion, clause 1 carried.

CLERK: Clauses 2 and 3.

CHAIR: Shall clauses 2 and 3 -

MS MICHAEL: A point of order, Mr. Chair.

CHAIR: The hon. the Member for Signal Hill-Quidi Vidi, on a point of order.

MS MICHAEL: I think this is the first time we are discussing Bill 10, is it? Is the minister speaking to it before we do this or do we just go into it? I do not know; that is why I am asking.

CHAIR: By leave, we can go back up to the resolution.

The hon. the Minister of Finance and President of Treasury Board.

MR. MARSHALL: Thank you, Mr. Chair.

Mr. Chair, I move, seconded by the hon. Minister of Health, that Bill 10, An Act To Amend The Revenue Administration Act be read for the second time.

CHAIR: We are currently debating the resolution.

Shall the resolution carry?

The hon. the Minister of Finance and President of Treasury Board.

MR. MARSHALL: Mr. Chair, this government seeks approval to amend the Revenue Administration Act and the Labrador Border Zones Rebate Regulations, 2006 to put into law the tobacco tax changes that were announced in Budget 2010.

Earlier today I spoke for a while talking about all of the tax reductions that the government has introduced since it came into office in late 2003-2004. This is the first tax increase, and it has to do with the tobacco tax changes that we announced in the Budget.

Effective March 30, 2010 the provincial tobacco tax imposed on cigarettes increased by one cent from eighteen cents to nineteen cents per cigarette. Tobacco tax imposed on fine cut tobacco increased by two cents per gram, from thirty cents per gram – it was thirty cents, it is now thirty-two cents per gram. I understand that the two cent per gram increase is the same as the one cent on cigarettes.

Consequently, Mr. Chair, the Labrador Border Zones Rebate for tobacco products also increased by 1 per cent per cigarette, or two cents per gram of fine cut tobacco. As you can see, Mr. Chair, promoting healthy living is a key concern of this government and many governments in the Province or in the country. Increasing taxes on cigarettes will not only serve as a deterrent, it will also generate an additional $6 million in revenue that will assist existing programs and services. The rebate serves to equalize tobacco prices with Quebec and thus reduce the impact of cross-border shopping on retailers in Labrador; those who sell tobacco and cigarettes in Labrador.

Mr. Chair, I believe that sums up the bill. We know that one of the concerns we have is striking a balance once again between increasing the taxes on tobacco in order to deter people from smoking, but at the same time, we are concerned about the contraband tobacco that is coming in through a reserve that straddles the Ontario and the Quebec and New York borders where we understand, or we are advised by the RCMP that most of the tobacco is coming from. That is the source of supply and that is where enforcement efforts should go, but in the meantime, our tobacco taxes – I think we are the sixth highest in the country in terms of tobacco taxes. In P.E.I. it is twenty-two point four-five cents a cigarette; in Nova Scotia it is twenty-one-and-a-half cents a cigarette; Manitoba is twenty-and-a-half cents a cigarette; Saskatchewan is twenty-one; Alberta is twenty-one, and we have now gone from eighteen to nineteen. So, there is room to grow.

We are the sixth highest rate in Canada, and we are the highest on the fine cut tobacco. We are the highest in the country. There were recently some tobacco court cases that were settled where Newfoundland did receive funding as a result of the settlements with Imperial Tobacco Canada, and with Rothmans, and Benson & Hedges. There was another settlement with JTI-Macdonald Corporation and R.J. Reynolds Tobacco Company.

Mr. Chair, the Lung Association in its pre-budget consultations documented that it firmly believes that the greatest deterrent to smoking is to increase taxes. They went on to request continued government support for tobacco cessation and prevention initiatives and funding for the enforcement of the Tobacco Tax Act. They called upon the government to reinstate significant tax increases with the view to offsetting staggering costs to the health care system due to chronic illness directly caused by smoking and make a significant enough impact that will really make current smokers look to quitting as the best alternative and to introduce comprehensive smoking cessation programs for low-income residents through inclusion in the Newfoundland and Labrador Drug Prescription Program. These sentiments were echoed by the Alliance for the Control of Tobacco who also recommends that we increase tax on all tobacco products.

Mr. Chair, the Minister of Justice can tell us that the RCMP have indicated that after an initial decrease in the number and quantity of tobacco seizures in the Province there has been recently an increase and now more targeted investigations of specific individuals and groups, similar to drug investigations, certainly now taking place.

We have RCMP offices on the West Coast, and here in St. John's as well. Port aux Basques is the primary port of entry into the Province for smuggled product, and the presence of the unit in Corner Brook allows for a more timely response. This will add $6 million to the revenue of the Province and we will continue to examine revenue measures that will deter, or hopefully will deter activities that are not in the best interests of the people of the Province.

With that, I urge passage of this resolution.

SOME HON. MEMBERS: Hear, hear!

CHAIR: The Chair recognizes the hon. the Member for Signal Hill-Quidi Vidi.

MS MICHAEL: Thank you very much, Mr. Chair.

I did want to have some words to say about Bill 10. I think it is an extremely important bill. The minister has outlined somewhat the reason why the government put in the Budget that the taxation on tobacco and cigarettes should go up, and would be going up this year. The situation is that even though we went through a period in this Province of smoking going into decline, that sort of ended around 2005; since 2005 it has remained fairly stable. Right now - the latest statistic I have is for 2008. In 2008, 20.2 per cent of Newfoundlanders and Labradorians were still smoking, which is above the national average. The national average is 17.9 per cent.

As I have said, the decline ended around 2005. The decline did happen in all age groups but it was only slightly among those over forty-five. It was a slight decline for those over forty-five. The good news was that the largest decrease observed between 1999 and 2005 was among those aged fifteen to nineteen. I think that youth has always been a concern for all of us when it comes to smoking. My concern is that it has discontinued declining even among youth. So we do need to do something to make sure that a decline picks up once again.

The interesting thing is that in the Province right now men smoke more than women. I am not sure about this but I think that is a turnabout. I think there was a point at which more women smoked than men. So I find that an interesting statistic right now in the Province. As it is right now, 22.5 per cent of men smoke in the Province and 18.1 per cent of women. So the average, there is quite a difference, it is over two points difference between men and women in the Province.

The issue is whether or not - and I am not sure about this. I am not sure how much research has been done in the area to determine how much decline happens because of the taxation going up. I think the taxation has to go up, but how much of smoking actually declines because of it and how much of it goes underground? The minister has talked about the contraband cigarette and tobacco and the concern that the law enforcement agencies have with regard to the contraband.

So, my question is: Do we really see a real decline in usage when the taxes go up or do we see more contraband coming on the scene? I have to say, I have never been able to understand, from an economic perspective, why somebody smokes. I said that it is really terrible and you do get addicted. It is a terrible addiction, but at $93 for a carton it blows my mind the thought of that much money going up in smoke, literally. I just cannot imagine that much of my own budget going up in cigarettes, $93 a carton. So I assume we do find that there is a high level of contraband because an awful lot of people certainly cannot afford $93 a carton. So, how effective putting the tax up when it comes to decline, I do not know, maybe we will find out. Maybe that is something - it might take a couple of years to see what effect the new increase will have, track it for over a two-year period or so to see if there is a decline because of the taxation going up this year.

The issue I did want to speak to - and that is why I got up on a point of order. I was not sure what was happening. It looked like a discussion was not going to happen. I think it is a serious issue and I wanted to bring it up here in the House, and this is the time to bring it up. It has to do with smoking in cars while children are being carried, are taken around in the car. That does not only mean the day that they are in it, but second-hand smoke will maintain itself in a vehicle for a long period of time. So if a car is being used to transport children, then it is very dangerous for the children, for smoking to be going on in that car.

There is a lot of evidence indicating, as we know, the effects of second-hand smoke. Now there has been quite a bit of study done with regard to second-hand smoke and children in cars. We now have seven provinces and territories which have banned smoking in cars that transport children. The presence of second-hand smoke in enclosed spaces, such as in homes and in cars, really can result in significant morbidity for children. Cars in particular, and homes too, because homes on a regular basis, especially in winter, do not have windows open a lot, the doors are not open and the smoke gets maintained in a confined space. The density in cars, of course, is understandable. Apparently, for some reason, even though people think if they open the windows while they are smoking in a car the smoke will circulate. Apparently, that is not the case. If smoking is going on in a car, the levels of toxicity from the smoke still remain very high in the car even when windows are open.

We have made a lot of strides with regard to banning smoking in public places and we know that educational campaigns have been very effective with regard to banning smoking in public spaces, but we also know that voluntary smoking bans do not work. It has taken education and regulation to stop smoking in public places. It does work. So if we want smoking in vehicles - where children are transported - to stop, then I believe we are going to have to legislate there as well. I think that we have to take seriously the damage that is being done to children who have no control over it. They are in the car, they have no control, and we have to take action. I believe government has to take action to do what the adults in those children's lives will not do, which is recognize that their health is dangerously impaired because of the exposure to second-hand smoke in vehicles.

So, I put that forward for the minister to consider. I think that, obviously, this is something that also involves the Department of Health and Community Services and Justice. I guess all three departments together would have to look at the whole issue of smoking in vehicles and the effect on children of smoke in vehicles.

That is the main point I wanted to make, Mr. Chair, and I am happy to have been able to have the opportunity to make it.

Thank you very much.

CHAIR: The Chair recognizes the hon. the Member for Baie Verte-Springdale.

SOME HON. MEMBERS: Hear, hear!

MR. POLLARD: Thank you, Mr. Chair.

Thank you for the opportunity to say a few words about Bill 10, respecting the imposition of taxes on tobacco. Hopefully, everybody had a good supper and by now, I guess, we are all fed up.

Mr. Chair, since this government took office in 2003, a high priority was given to the promotion of healthy and active living through regular physical activity and by eating nutritious, well-balanced meals. Mr. Chair, today is no different. Seven years later we are still espousing the same message, that we want to promote a healthy, active lifestyle. We have invested significantly and heavily in services and programs to promote that message, Mr. Chair.

Just to depart there for moment to elaborate, as a few examples with regard to children and youth. We have had the Kids Eat Smart program and indirectly the school breakfast programs, of which I was a part in Indian River Academy in Springdale. That school ran a very successful program with the volunteers from the community and the school principal, teachers and staff, and parents of students embracing that program. Furthermore, when I was a phys. ed. teacher I thought I had died and went to heaven because three or four years ago I used to get around $1,000 or $2,000 for physical education equipment, and all of a sudden this letter came in the mail saying you will receive $8,000 for your school. That just blew me away and thank you so much. That was part of this government's financial support with the new phys. ed. curriculum.

There are random acts of kindness, anti-bullying programs and drug awareness programs. All these were programs carrying on in a school just to build the self-esteem of students and build positive self images. You cannot forget all the various grants that our government has given out over the past few years pertaining to improving physical infrastructure in your community; recreational infrastructure, such as playgrounds for example. All that geared to help the youth of our Province to adopt a healthy lifestyle and to engage our youth in physical activity because we all know, of course, the importance of being physically fit and eating nutritious meals. Down the road if we do not do that, there will be severe health consequences and would pose severe health problems.

Mr. Chair, not to forget our seniors, by 2026 Statistics Canada estimates that Newfoundland and Labrador will have the highest proportion of seniors in the nation. In other words, we are aging faster than any other province. So we have to be very proactive and that is what we are; as a government we have been proactive, Mr. Chair. What did we do when we formed government back in 2003? There were three distinct entities that were created; (1) a Ministerial Council on Aging and Seniors which would ensure that programs delivered from each department would be delivered effectively and efficiently; (2) a Provincial Advisory Council on Aging was established. That was to advise government on matters and issues concerning seniors' issues; (3) an Office for Aging and Seniors in the Department of Health and Community Services was established to ensure policies and programs and services would meet the needs of seniors.

As a result of all that, Mr. Chair, there were several initiatives targeted towards seniors. For example, (1) a Provincial Healthy Aging Policy Framework; (2) mandatory retirement based on age was eliminated; (3) we introduced and expanded the Home Heating Program to help offset the financial pressure of rising fuel and heating costs; (4) we introduced a campaign designed to promote positive images and attitudes in regard to aging; (5) a Seniors of Distinction Awards Program was introduced; (6) we expanded the Prescription Drug Program to include more low-income families and individuals, including seniors, making the drug program more accessible and more affordable to seniors, Mr. Chair.

Another one, we significantly reduced taxes and we also enhanced the Low Income Seniors' Benefit from $803 to $900, thus benefiting about 42,500 seniors. Furthermore, Mr. Chair, we have invested in wellness grants, Age-Friendly Grants, recreation grants, that all across this great Province of ours seniors have embraced and communities have availed of.

This month, June month, as we all know, is Seniors Month. I would just like to take this opportunity to say how important it is to recognize that seniors of all ages are so important to our society, important members. The contributions of seniors, that they have made over the years, how they have shaped our Province, how they have shaped our nation, how they have shaped our lives, our towns, our communities, their collective experience, their wisdom and their knowledge, has enriched all of our lives and we are better off today because of their wisdom and because of their knowledge, and their willingness to help out and make our communities and our organizations work in our towns.

Now, getting into the tax bill, Mr. Chair, as a government we are moving toward an increase in taxes on tobacco. What we believe is that will act as a deterrent to potential new smokers. Taxation - albeit we know that it is a blunt instrument - is the most effective, as was pointed out earlier by the minister, and practical method of deterring children and youth from smoking. Evidence from a number of studies show that children and youth are less likely to take up smoking if the price of cigarettes rises. Moreover, Mr. Chair, their smoking peers are more likely to quit as well.

Yes, I know, Mr. Chair, such a tax could be a burden on adults, but it could be justified. Why? Because it protects our children who at the tender age may not be fully aware of the health hazards of smoking and may start just for curiosity and just out of peer pressure. Not only that, Mr. Chair, the children at that tender age may underestimate the power of addiction. They may not realize the severe health consequences down the road because they succumb to peer pressure, or what they see modelled by their parents or adults. In fact, it could be argued that it may encourage adults to reduce cigarette smoking as well, Mr. Chair, if you make the cigarettes more expensive.

What I would like to see, Mr. Chair, is that children and our youth would not smoke at all. Also, that children may smoke less as well, given evidence that children's propensity to smoke is influenced by their peers and by their parents. So, we are hoping, and based upon studies, we are told and informed that increasing taxes on cigarettes will act as a deterrent. We hope that education will be as well, as we educate our youth about the severe health consequences.

The second reason, I suppose, that we could implement a tax is it would generate a few extra dollars – $6 million, I suppose – to the coffers to help offset or augment the existing programs and services. As a government, what we like to see is our children and our youth adopting healthy lifestyles in their tender years so that when they grow older they will have healthy lifestyles and they will not be smoking at all, Mr. Chair. As a result, it will not be a burden on the health system.

With that, I will conclude, Mr. Chair.

Thank you very much.

SOME HON. MEMBERS: Hear, hear!

CHAIR: Shall the resolution carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

On motion, resolution carried.

CLERK: Clause 1.

CHAIR: Shall clause 1 carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

On motion, clause 1 carried.

CLERK: Clauses 2 and 3.

CHAIR: Shall clauses 2 and 3 carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

On motion, clauses 2 and 3 carried.

CLERK: Be it enacted by the Lieutenant-Governor and House of Assembly in Legislative Session convened, as follows.

CHAIR: Shall the enacting clause carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

On motion, enacting clause carried.

CLERK: An Act To Amend The Revenue Administration Act.

CHAIR: Shall the long title carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

On motion, title carried.

CHAIR: We are now debating the related resolution and Bill 25.

CLERK: That it is expedient to bring in a measure further to amend the Loan And Guarantee Act, 1957, to provide for the advance of loans to and the guarantee of the repayment of bonds or debentures issued by or loans advanced to certain corporations.

CHAIR: The hon. the Minister of Finance and President of Treasury Board.

MR. MARSHALL: Thank you, Mr. Chair.

Mr. Chair, this bill will amend the schedule to the Loan And Guarantee Act, 1957, in order to ratify new loan guarantees or changes such as an increase in a guarantee or an extension of the term of an existing guarantee.

The actual legislation was passed in 1957. As part of the regular financial administration of the Province, each year from time to time the Minister of Finance will come forward and will present to the House for ratification any guarantees that the government has given to companies or to individuals since the time the last guarantees were presented.

Mr. Chair, I think as everyone is aware, over the years the governments have provided guarantees to support the borrowings of a number of companies; private companies and companies that are owned by the Crown. Except under established programs, such as the Aquaculture Working Capital Loan Guarantee Initiative, or the Fisheries Loan Guarantee Program, the use of loan guarantees to provide financial assistance to companies in the private sector has been reduced substantially. Those few non-program guarantees that are still outstanding essentially represent special circumstances only and they have been in place for many years. Where circumstances permit, it has been this government's strategy to negotiate with the companies and their lending institutions for the gradual reduction and ultimate elimination of this form of financial support. In other words, Mr. Chair, government, in giving support today, prefers to do it by methods other than by way of a guarantee.

As I said, amendments to the schedule of the act are a regular item in the financial administration of the Province, the last amendment having been approved by this House in May of 2009. Under the act, and subsequent to the approval of the Cabinet, the Finance Minister is authorized to provide guarantees to either private sector or Crown corporations, covering a variety of financing requirements, the most common being guaranteeing an operating line of credit at a bank or financial institution. The act requires that all such guarantees that government approves and issues be ratified in this House by the representatives of the people through an amendment to the schedule of the act, and that is what we are doing here tonight.

The current bill includes three amendments to the schedule. One is a new guarantee, and two are changes to existing guarantees. The new guarantee was provided to Gray Aqua Group. It was provided under the Aquaculture Working Capital Loan program to support the establishment of a salmon aquaculture project based in Conne River. The company's business plan indicated that it would create thirty-five permanent jobs in marine operations and an additional forty person-years of employment in the processing sector, while achieving annual product sales levels of $24 million within three years. The government guarantee is based on 80 per cent of the company's operating financing requirement and will range from a low of $1.2 million to a maximum of $6.8 million. The guarantee is scheduled to expire on July 1, 2014. The Minister of Fisheries is here tonight and would be able to answer any questions that hon. members may have.

The first of the two changes to existing guarantees is a recurring one on behalf of the Newfoundland and Labrador Immigration Investor Fund, which is a Crown corporation of this government. That corporation, since 2005, has been the vehicle for the Province's participation in the Government of Canada's Business Immigration Program. I understand under that program immigrants can make a loan to the program and that money is in turn loaned by the Government of Canada to the various provinces. The money comes into Newfoundland and Labrador through the Newfoundland and Labrador Immigrant Investor Fund Limited. The monthly allocation is received by the corporation based on monies received from immigrant investors. Such receipts become repayable after five years. So the fund has to pay back the Government of Canada after five years and the repayment of that money is guaranteed by the provincial government as a condition of the Province participating in the program. The current amendment secures the repayment of almost $52 million related to advances that the corporation has received during the year that ended March 31, 2009.

The final item in this bill relates to the Stephenville Airport Corporation for which the Province has provided a $350,000 guarantee since the year 2005. Approval was recently received from the Cabinet to increase this guarantee to $600,000 to allow the corporation the time and the financial flexibility to pursue a private sector investment or such other strategies to rationalize its operations and to develop a profitable business model. The Minister of Innovation, Trade and Rural Development is here tonight and can answer any further questions with respect to those two guarantees.

So, by introducing this bill, I am seeking the approval of this hon. House for the current year's amendments. Again, any questions, the ministers are here to answer them.

Thank you very much.

CHAIR: The hon. the Opposition House Leader.

MR. KELVIN PARSONS: Thank you, Mr. Chair.

Just a couple of comments with respect to Bill 25 and looking for some explanation, I guess, from the minister or the respective ministers.

The two areas with Aqua are quite straightforward – a bit detailed but understandable – and the Newfoundland and Labrador Immigrant Investor Fund Limited, we certainly dealt with that in Estimates with the Minister of ITRD at length. So we do not have any particular questions about those two.

I am just curious about the Stephenville one. The minister has indicated that that approval came recently. Being a member from the West Coast, of course, the Stephenville Airport Corporation is near and dear to all of us who live out in that area, south and west of Stephenville for sure. We attended a meeting some time ago. The Government House Leader, who is a member for that area as well, and the Member for Port au Port and myself, we sort of had a round table in the airport. At that time there were several issues underway with regard to the continued operations of the airport. One of them involved how to sustain themselves and move forward, or at least stay alive until they could find some viable alternatives to attract business to the airport.

It seems to be an ongoing business. There are several citizens committees that have been struck. I understand the chair has changed again recently because the individual who was there had to leave for work commitments. I am wondering, just how recent is this increase from $350,000 to $600,000 when it comes to the guarantee, and would I be correct in assuming that this money is not drawn down as of yet because we have not approved the legislation? We will – effective, I guess, the passing of this legislation, that we are, in effect, authorizing the Stephenville Airport Corporation to borrow another $250,000. That would be my understanding. I am just curious as to whether those funds have been drawn down yet or what the intended purpose of them would be. I know there are quite some issues as to what the money would be used for.

There was a piece in the paper as recently as today where this company KAZ, that they are dealing with in the United States, people want to know: What is happening? Are they reliable? What kind of due diligence is being done with respect to this company?

So, maybe if the government - you have decided, obviously, to advance the extra $250,000 because that is what we are basically doing here. By giving a guarantee, we are telling the airport corporation that we are going to fund you to another $250,000. I am asking these questions - I do not want to leave any misunderstandings here, because I disagree with that, by the way. I am just curious because we, as south western members, have played or tried to be informed anyway about what is happening with the Stephenville Airport Corp. We often get asked questions about it and this is certainly a new development from what I understand. I have not seen any public releases about it and I am sure the people of Stephenville would be curious to know exactly what this is all about, when it transpired, what the money will be used for and so on. So I would appreciate it if the minister or someone could give us an update on that.

CHAIR: The hon. the Minister of Innovation, Trade and Rural Development.

MR. SKINNER: Thank you very much, Mr. Chair.

I will try to address the questions that the hon. Opposition House Leader has brought forward. The approval of the extra money is actually based upon one final - there was a series of conditions. There is one more condition we are waiting to have satisfied, and I have to be honest, it may have been satisfied in the last couple of days or it may be satisfied in the next day or so but that had to do with government receiving a set of audited financial statements for the year 2009 from the Stephenville Airport Corporation, and they were in the process of having those done. Last week when I inquired, I was told that within a matter of a few days they would have them to us. So, the money will not be advanced until we have that set of statements in our possession. They may already be; I will confirm that for you tomorrow. They may have presented that to us.

Currently, there is a $350,000 line of credit that we guarantee, that the Stephenville Airport Corporation has access to. It was my understanding as of last week, that there was slightly over $100,000 of that drawn down, meaning that there was a couple of hundred thousand dollars, maybe a little bit less, that was left to be drawn down. So they did not actually need the extra money right away; they were managing their finances. My understanding was they may have gotten some money from the Town of Stephenville, but that helped them with what they needed to draw down.

In terms of the extra $250,000 to increase the guarantee from $350,000 to $600,000, basically it is our understanding that the airport corporation is using that money to continue to pay some ongoing operations; to do things like get the audited statements and other financial requirements that they have with their lenders brought up to date, and to explore some opportunities for sustainability and viability of the airport. There may be some costs incurred in exploring some of those opportunities.

For instance, with the group KAZ out of Kissimmee, Florida, there may be requirement that a representative or two from the Stephenville Airport Corporation may need to travel down to Florida to meet with some officials from KAZ. So, some of that money could be used for travel purposes. Some of it is used, as I said, to have the audited statements done, to have some legal work done. There will be legal work required on the agreement that is being done with KAZ, should that agreement come in place.

That money is put there as a buffer, basically, so that they do not need to come to government every time they need $5,000 or $10,000 or $50,000 to do something. We are comfortable with allowing them to have access to $600,000 in total that they can use to try and sustain and make viable the Stephenville Airport and allow the Stephenville Airport Corporation, in consultation with government officials, to do those kinds of negotiations and actions and options that they need to do to try and make sure that that airport survives.

If there is anything further, I will do my best to answer it.

CHAIR: The hon. the Opposition House Leader.

MR. KELVIN PARSONS: Thank you, Mr. Chair.

I appreciate the explanation put forth by the Minister of Innovation, Trade.

I am wondering if the minister could tell us, because based upon the facts you just laid out, we are $100,000 over, or they have drawn down so far, and we are talking about a $600,000 total guarantee, which you are in the neighbourhood or ballpark of half a million dollars still left to draw down. Now, the explanation that we are going to use some of that to travel to Florida, surely - that is a lot of money for that purpose. I am assuming there must be some more detailed purpose for a half a million dollars.

If you have to make a couple of trips or whatever to Florida to flesh out the KAZ deal in Kissimmee, that is one thing, but that seems to be a lot - and the audited statements for example. To have that kind of money for those two ventures, I would think there is something more supposedly in a plan, and I am assuming government would have done some kind of due diligence on the plan in that regard. I am wondering if the minister could provide any further detail around that piece, because it is my understanding that they wanted funds to provide capacity, for example, in tanks and storage capacity at the facility. I am wondering, is that a piece of this at all because that was one of the issues, that they could not store and maintain enough of the fuel products that were needed to service potential customers. That was one of the things that the airport corporation were looking at doing.

I am wondering, is there anything more concrete that the minister can provide us, other than to simply say they can use up to $600,000? Usually, the government attaches some conditions and what the purposes can be that it is used for.

CHAIR: The hon. the Minister of Innovation, Trade and Rural Development.

MR. SKINNER: Thank you again, Mr. Chair.

Mr. Chair, to be clear - and I want to be certain that people hear this - it was not just to travel to Florida. I did indicate that there could potentially be some travel involved with the particular negotiations regarding KAZ, which is based out of Kissimmee, Florida. I also indicated that there would be some legal work that would need to be done around that, which could run into some tens of thousands of dollars. I also indicated that there is some accounting catch-up that needs to be done, and I referenced in particular the 2009 audited statements and other operational types of things like that, that need to be done. General operations are also allowed, for lack of a better word, or the money could be used for any general operations that they may have. Any debt that they may have, short-term debt that they would like to pay off, it is basically for that kind of a purpose.

The issue of the storage tanks, the fuel storage tanks is more of a capital item. The money is not intended for that. There are other avenues and other programs that they might be able to access should they need to access it to be able to deal with fuel storage tanks as there are other, what I would consider to be capital expenditures that the airport may need to undergo in terms of allowing an operator to come in to successfully operate the airport or for anybody who is out there, the Stephenville Airport Corporation as an example, to continue to operate the airport.

So, while there seems to be a significant increase from $100,000, $125,000 – I am not sure of the exact number – up to $600,000, you are quite correct, there is quite a spread there, but the Stephenville Airport Corporation in very recent times did have up to $350,000 of that operating line used. It used to be a little bit less than that and it was increased to $350,000. So that floating amount from zero to $350,000 has been fully utilized in the past, and given what they are going through right now, we felt that an extra $250,000 would be appropriate to allow them to do the kind of work that they needed to do and to allow them to do the necessary operational work that needed to be done so that the people of the area would be able to have the best possible chance to see that airport maintain its operational status, continue to be an airport that would be sustainable and viable, and eventually, hopefully, see it turn into a profitable airport that would not require any loan guarantees from government.

Thank you.

CHAIR: Shall the resolution carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

On motion, resolution carried.

A bill, "An Act To Amend The Loan And Guarantee Act, 1957". (Bill 25)

CLERK: Clause 1.

CHAIR: Shall clause 1 carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

On motion, clause 1 carried.

CLERK: Clause 2.

CHAIR: Clause 2.

Shall clause 2 carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

On motion, clause 2 carried.

CLERK: Be it enacted by the Lieutenant-Governor and House of Assembly in Legislative Session convened, as follows.

CHAIR: Shall the enacting clause carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

On motion, enacting clause carried.

CLERK: An Act To Amend The Loan And Guarantee Act, 1957.

CHAIR: Shall the title carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

On motion, title carried.

CHAIR: Shall I report Bill 25 carried without amendment?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

Motion, that the Committee report having passed the bill without amendment, carried.

CHAIR: The hon. the Government House Leader.

MS BURKE: Mr. Chair, I move that the Committee rise, report Bills 3, 9 and 22, as well as the resolution in Bill 10 and the resolution in Bill 25, and ask leave to sit again.

CHAIR: The motion is that the Committee rise and report Bills 3, 9 and 22 and the resolutions for Bills 10 and 25.

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

Carried.

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

MR. SPEAKER (Fitzgerald): The hon. the Member for Humber Valley and Assistant Deputy Speaker.

MR. KELLY: Mr. Speaker, the Committee of the Whole have considered the matters to them referred and have directed me to report Bills 3, 9 and 22 without amendment.

MR. SPEAKER: The Chair of the Committee reports that the Committee have considered the matters to them referred and have directed him to report Bills 3, 9 and 22 without amendment.

When shall the report be received?

MS BURKE: Now.

MR. SPEAKER: Now.

When shall the said bills be read a third time?

MS BURKE: Tomorrow, Mr. Speaker.

MR. SPEAKER: Tomorrow.

On motion, report received and adopted. Bills ordered read a third time on tomorrow.

MR. SPEAKER: The hon. the Member for Humber Valley and Assistant Deputy Speaker.

MR. KELLY: Mr. Speaker, the Committee of Ways and Means have considered the matters to them referred, have directed me to report that they have adopted certain resolutions and recommend that a bill be introduced to give effect to the same and ask leave to sit again.

MR. SPEAKER: The Chair of the Committee of Ways and Means reports that the Committee have considered the matters to them referred and have adopted certain resolutions and recommended that bills be introduced to give effect to the same and ask leave to sit again.

When shall the reports be received?

MS BURKE: Now, Mr. Speaker.

MR. SPEAKER: When shall the Committee have leave to sit again?

MS BURKE: Tomorrow.

MR. SPEAKER: Tomorrow.

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

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

MS BURKE: Mr. Speaker, as we go through the readings of the resolution, will we break it down and do it twice for Bill 10 and Bill 25 or do we –

AN HON. MEMBER: (Inaudible).

MS BURKE: Okay, so we will refer at this point to Bill 10.

With that, Mr. Speaker, I move, seconded by the hon. Minister of Natural Resources, that the resolution be now read a first time.

MR. SPEAKER: It is moved and seconded that the resolution to Bill 10 be now read a first time.

Is it the pleasure of the House to adopt this motion?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, ‘nay'.

The motion is carried.

CLERK: That it is expedient to bring in a measure respecting the imposition of taxes on tobacco.

On motion, resolution read a first time.

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

MS BURKE: Mr. Speaker, I move, seconded by the hon. Minister of Natural Resources, that the resolution be now read a second time.

MR. SPEAKER: It is moved and seconded that this resolution be now read a second time.

Is it the pleasure of the House to adopt this motion?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, ‘nay'.

The motion is carried.

CLERK: That it is expedient to bring in a measure respecting the imposition of taxes on tobacco.

On motion, resolution read a second time.

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

MS BURKE: Mr. Speaker, I move, seconded by the hon. Minister of Natural Resources, for leave to introduce a bill, An Act To Amend The Revenue Administration Act, Bill 10, and I further move that the said bill be now read a first time.

MR. SPEAKER: It is moved and seconded that the hon. the Government House Leader shall have leave to introduce a bill entitled, An Act To Amend The Revenue Administration Act, Bill 10, and that the said bill be now read a first time.

Is it the pleasure of the House that the hon. Government House Leader shall leave to introduce Bill 10, and that Bill 10 be now read a first time?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, ‘nay'.

The motion is carried.

Motion, the hon. the Government House Leader to introduce a bill, "An Act To Amend The Revenue Administration Act", carried. (Bill 10)

CLERK: A bill, An Act To Amend The Revenue Administration Act. (Bill 10)

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

MS BURKE: Mr. Speaker, I move, seconded by the hon. Minister of Natural Resources, that Bill 10 be now read a second time.

MR. SPEAKER: It is moved and seconded that the said bill be now read a second time.

Is it the pleasure of the House to adopt this motion?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, ‘nay'.

The motion is carried.

CLERK: A bill, An Act To Amend The Revenue Administration Act. (Bill 10)

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

MS BURKE: Mr. Speaker, I move, seconded by the hon. Minister of Natural Resources, that Bill 10 be now read a third time.

MR. SPEAKER: It is moved and seconded that Bill 10, An Act To Amend The Revenue Administration Act, be now read a third time.

Is it the pleasure of the House to adopt this motion?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, ‘nay'.

The motion is carried.

CLERK: A bill, An Act To Amend The Revenue Administration Act. (Bill 10)

MR. SPEAKER: Bill 10 has now been read a third time and it is ordered that Bill 10 do pass and that its title be as on the Order Paper.

On motion, a bill, "An Act To Amend The Revenue Administration Act", read a first, second and third time, ordered passed and its title be as on the Order Paper. (Bill 10)

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

MS BURKE: Thank you, Mr. Speaker.

This is in relation to Bill 25; with that, Mr. Speaker, I move, seconded by the hon. Minister of Natural Resources that the resolution be now read a first time.

MR. SPEAKER: It is moved and seconded that this resolution, accompanying An Act To Amend The Loan And Guarantee Act, Bill 25, be now read a first time.

Is it the pleasure of the House to adopt this motion?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, ‘nay'.

The motion is carried.

CLERK: That it is expedient to bring in a measure further to amend the Loan and Guarantee Act, 1957, to provide for the advance of loans to and the guarantee of the repayment of bonds or debentures issued by or loans advanced to certain corporations.

On motion, resolution read a first time.

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

MS BURKE: Mr. Speaker, I move, seconded by the hon. Minister of Natural Resources that the resolution be now read the second time.

MR. SPEAKER: It is moved and seconded that this resolution be now read a second time.

Is it the pleasure of the House to adopt this motion?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, ‘nay'.

The motion is carried.

CLERK: That it is expedient to bring in a measure further to amend the Loan and Guarantee Act, 1957, to provide for the advance of loans to and the guarantee of the repayment of bonds or debentures issued by or loans advanced to certain corporations.

On motion, resolution read a second time.

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

MS BURKE: Mr. Speaker, I move, seconded by the hon. Minister of Natural Resources for leave to introduce a bill entitled, An Act To Amend The Loan And Guarantee Act, 1957, Bill 25, and I further move that the bill be now read a first time.

MR. SPEAKER: It is properly moved and seconded that the hon. the Government House Leader shall have leave to introduce a bill entitled, An Act To Amend The Loan And Guarantee Act, 1957, Bill 25, and that Bill 25 be now read a first time.

Is it the pleasure of the House to adopt the motion that Bill 25 be now read a first time?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, ‘nay'.

The motion is carried.

Motion, the hon. the Government House Leader to introduce a bill, "An Act To Amend The Loan And Guarantee Act, 1957", carried. (Bill 25)

CLERK: A bill, An Act To Amend The Loan And Guarantee Act, 1957. (Bill 25)

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

MS BURKE: Mr. Speaker, I move, seconded by the hon. Minister of Natural Resources, that Bill 25 be now read a second time.

MR. SPEAKER: It is moved and seconded that Bill 25 be now read a second time.

Is it the pleasure of the House to adopt this motion?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, ‘nay'.

The motion is carried.

CLERK: A bill, An Act To Amend The Loan And Guarantee Act, 1957. (Bill 25)

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

MS BURKE: Mr. Speaker, I move, seconded by the hon. Minister of Natural Resources, that Bill 25 be now read a third time.

MR. SPEAKER: It is moved and seconded that Bill 25 be now read a third time.

Is it the pleasure of the House to adopt this motion?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, ‘nay'.

The motion is carried.

CLERK: A bill, An Act To Amend The Loan And Guarantee Act, 1957. (Bill 25)

MR. SPEAKER: Bill 25 has now been read a third time and it is ordered that the bill do pass and that its title be as on the Order Paper.

On motion, a bill, "An Act To Amend The Loan And Guarantee Act, 1957", read a first, second and third time, ordered passed and its title be as on the Order Paper. (Bill 25)

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

MS BURKE: Mr. Speaker, I move, seconded by the hon. Minister of Finance and President of Treasury Board, that the House do now adjourn.

MR. SPEAKER: It is moved and seconded that this House do now adjourn.

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, ‘nay'.

This House now stands adjourned until 2:00 o'clock tomorrow, being Private Members' Day.

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