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April 25, 1997
Hansard -- Fri., Apr. 25, 1997

Fifth Session

FRIDAY, APRIL 25, 1997

No. 13, Antigonish Heritage Museum Board Act, Hon. W. Gillis 1019
Res. 220, Health - Reform: Strategic Plan - Introduce, Mr. G. Moody 1020
Res. 221, Health: Parkinson's Research - Moira K. MacPherson (Hfx.):
Contributions - Recognize, Mr. R. Chisholm 1020
Vote - Affirmative 1021
Res. 222, Justice - Abusers: Conditional Sentences - Services Review,
Dr. J. Hamm 1021
Res. 223, Fin. - Accounting Procedures: "Tempest" -
Electoral Consequences, Mr. J. Holm 1022
Res. 224, Agric. - Turkey Producers' Marketing Bd.: Promotion -
Commend, Mr. G. Archibald 1022
Vote - Affirmative 1023
Res. 225, Econ. Dev. & Tourism - Glace Bay Dev. Assoc.: Promotion -
Assist, Mr. A. MacLeod 1023
Res. 226, Econ. Dev. & Tourism - Internet Conf. (Gaelic Col., St. Anns):
Organizers - Congrats., Mr. G. Archibald 1024
Vote - Affirmative 1024
Res. 227, Agric. - Halifax Grain Elevator: Funding Partnership -
Recognize, Hon. G. Brown 1024
Vote - Affirmative 1025
Res. 228, Fin. - Public Accounts: Pub. Aud. - Aud. Gen. Appoint,
Mr. R. Chisholm 1025
Res. 229, Fin. - Budgets (N.S.): Games - Stop, Mr. J. Holm 1026
Res. 230, Women - Right to Vote: Anniv. (79th) N.S. (26/04/97)/
Canada (24/05/97) - Recognize, Hon. E. Norrie 1026
Vote - Affirmative 1027
No. 3, Ardnamurchan Club Act 1028
No. 4, Université Sainte-Anne Act/La Loi de l'Université Sainte-Anne 1028
No. 10, Incorporate the Benevolent and Protective Order of Elks of the
Dominion of Canada Act 1028
Dr. J. Hamm 1028
No. 11, Queens Regional Muncipality Act 1028
No. 12, District of Argyle Financial Assistance Act 1028
No. 9, Bank of Nova Scotia Trust Company Act. 1029
Mrs. F. Cosman 1029
Mr. J. Leefe 1033
Mr. J. Holm 1036
Res. 134, Fin. - Expenditure Add.: Health/Justice - Approval,
Hon. W. Gillis 1040
Mr. R. Russell 1040
Mr. R. Chisholm 1043
Mr. T. Donahoe 1051
Mr. J. Leefe 1059
Dr. J. Hamm 1065
Hon. B. Boudreau 1074
Mr. G. Moody 1082
Res. 231, Health - Donor Awareness Prog.: Carmen Young -
Continuing Influence Recognize, Mr. A. MacLeod 1083
Vote - Affirmative 1083
ADJOURNMENT, House rose to meet again on Mon., Apr. 28th at 2:00 p.m. 1084
H.O. 5, WCB - Appeal Tribunal: Hearings - Awaited, Mr. R. Russell 1085
No. 5, Commun. Serv. - CAPC: Funding - Commitment, Mr. A. MacLeod 1086

[Page 1019]


Fifty-sixth General Assembly

Fifth Session

8:00 A.M.


Hon. Wayne Gaudet


Mrs. Francene Cosman

MR. SPEAKER: Order, please. We will begin with the daily proceedings at this time.







Bill No. 13 - Entitled an Act to Incorporate the Antigonish Heritage Museum Board. (Hon. William Gillis as a private member.)


[Page 1020]

MR. SPEAKER: Ordered that this bill be read a second time on a future day.


MR. SPEAKER: The honourable member for Kings West.


MR. GEORGE MOODY: Mr. Speaker, I hereby give notice that on a future day I shall move the adoption of the following resolution:

Whereas according to the 1995 Auditor General's Report, officials at the Department of Health promised to have a departmental strategic plan prepared by March 1996; and

Whereas according to the 1996 Auditor General's Report, officials at the Department of Health are now promising to have a departmental strategic plan in place by June 1997; and

Whereas the lack of a strategic plan for the Department of Health has not stopped the Liberals from bungling their way through health reform, nor has it stopped the part-time Minister of Health and wannabe Premier from throwing millions of dollars at the physicians before negotiations started;

Therefore be it resolved that the part-time Minister of Health make a full-time decision and stop delaying the introduction of a well-defined strategic plan for health care reform.

MR. SPEAKER: The notice is tabled.

The honourable Leader of the New Democratic Party.


MR. ROBERT CHISHOLM: Mr. Speaker, I hereby give notice that on a future day I shall move the adoption of the following resolution:

Whereas April is Parkinson's Awareness Month in Canada; and

Whereas Parkinson's is a chronic neurological disorder that affects almost 100,000 Canadians; and

Whereas one of those Canadians, Moira K. MacPherson of Halifax, died on April 17th, having dedicated her life and work to the campaign for research into the disease and support for fellow Parkinsonians;

[Page 1021]

Therefore be it resolved that this House recognize the contributions of Moira K. MacPherson to the fight against Parkinson's and urge the government to increase support for Parkinson's research.

Mr. Speaker, I would like to ask members to waive notice.

MR. SPEAKER: Is it agreed that notice be waived?

It is agreed.

Would all those in favour of the motion please say Aye. Contrary minded, Nay.

The motion is carried.

The honourable Leader of the Opposition.


DR. JOHN HAMM: Mr. Speaker, I hereby give notice that on a future day I shall move the adoption of the following resolution:

Whereas the courts have handed out yet another conditional discharge decision in a case of an assault of a spouse; and

Whereas while it is necessary to look at alternatives to a stay in jail, the government should, at the same time, ensure that they help make available the facilities and resources necessary to support the counselling ordered in a conditional sentence; and

Whereas since the government has indicated it is a strong advocate for zero tolerance in the fight against violence towards women, and conditional sentences often involve the release of an individual charged with domestic violence;

Therefore be it resolved that the government review what services are available for the abusers in this province and ensure that if the trend for conditional sentencing continues to rise that the services meet the demands and these offenders are given a chance for rehabilitation and not let off the hook, leaving the victims at the mercy of their attacker.

MR. SPEAKER: The notice is tabled.

The honourable member for Sackville-Cobequid.

[Page 1022]


MR. JOHN HOLM: Mr. Speaker, I hereby give notice that on a future day I shall move the adoption of the following resolution:

Whereas the Premier says the Auditor General's findings that his government used "fundamentally wrong" accounting procedures to manufacture the so-called surplus budget for 1996-97 is a "tempest in a teapot"; and

Whereas a tempest in a teapot shows that his government has tried to mislead the people of Nova Scotia into believing that the province's books have been balanced when they have not been; and

Whereas a reputation for fiscal prudence was the last remnant of credibility attached to a government which, over the last four years, has systematically betrayed Nova Scotians on jobs, health care and fair taxes;

Therefore be it resolved that even though the tide may have turned, the tempest in a teapot will add further to winds that are growing to hurricane strength and will blow this Liberal Government far out to sea in the coming election.

MR. SPEAKER: The notice is tabled.

The honourable member for Kings North.


MR. GEORGE ARCHIBALD: Mr. Speaker, I hereby give notice that on a future day I shall move the adoption of the following resolution:

Whereas the annual meeting of the Nova Scotia Turkey Producers' Marketing Board was recently held in Kings County; and

Whereas the board has undertaken to support a national advertising program for Canadian turkey that will encourage consumers to consider purchasing turkey as an additional healthy food source in their daily diet; and

Whereas besides Nova Scotia, Alberta, British Columbia and Manitoba have agreed to endorse this national advertising campaign at promoting the turkey industry but it is hoped other provinces will soon be onside;

[Page 1023]

Therefore be it resolved that members of the Legislature commend the hardworking efforts of the Nova Scotia Turkey Producers' Marketing Board and wish them every success with their continued plans to get this national advertising program off the ground.

Mr. Speaker, I ask for waiver of notice.

MR. SPEAKER: There has been a request for waiver of notice.

Is it agreed?

It is agreed.

Would all those in favour of the motion please say Aye. Contrary minded, Nay.

The motion is carried.

The honourable member for Cape Breton West.


MR. ALFRED MACLEOD: Mr. Speaker, I hereby give notice that on a future day I shall move the adoption of the following resolution:

Whereas Nova Scotia's downtown business communities employ a total of 27,000 people; and

Whereas the chairperson of the Glace Bay Development Association is encouraging all members of the association and residents of Glace Bay to aggressively promote the area so that more businesses can be attracted to the downtown core; and

Whereas the development association is seeking professional assistance, as plans are undertaken to identify major opportunities, establish guidelines and provide a basis for the creation of new images in downtown Glace Bay;

Therefore be it resolved that the Minister of Economic Development and Tourism, if he has not already done so, contact the Glace Bay Development Association and Chairperson, Mel Bryden, and offer every possible assistance as they continue with their plans to promote the downtown core.

MR. SPEAKER: The notice is tabled.

The honourable member for Kings North.

[Page 1024]


MR. GEORGE ARCHIBALD: Mr. Speaker, I hereby give notice that on a future day I shall move the adoption of the following resolution:

Whereas on Saturday, April 26th, a conference entitled Understanding the Internet, Making It Work For You, will be held at the Gaelic College in St. Anns; and

Whereas this event is sponsored by the Strait-Highlands Regional Development Agency, and the Victoria County Recreation and Tourism Department; and

Whereas the purpose of the conference is to introduce residents of Victoria, Inverness and Richmond Counties to the Internet, inform participants about the Community Access Program and explore educational opportunities and other related issues;

Therefore be it resolved that this House congratulate the organizers of this event for their promotion of Internet and technology training and wish them the very best for a successful conference.

Mr. Speaker, I ask for waiver of notice.

MR. SPEAKER: There has been a request for waiver of notice.

Is it agreed?

It is agreed.

Would all those in favour of the motion please say Aye. Contrary minded, Nay.

The motion is carried.

The honourable Minister of Agriculture and Marketing.


HON. GUY BROWN: Mr. Speaker, I hereby give notice that on a future day I shall move the adoption of the following resolution:

Whereas the Halifax grain elevator which is critical to agriculture and related industries requires a major superstructure repair program to ensure its operation into the 21st Century; and

[Page 1025]

Whereas a working group structured an agreement to secure funding to enable the capital works program for the structure repairs to take place; and

Whereas the funding partners were formally announced at a press conference on Thursday, April 24th;

Therefore be it resolved that this House recognize the successful working partnership arrangement involving Agriculture and Agri-Food Canada, the Nova Scotia Department of Agriculture and Marketing, the Halifax Port Corporation, along with Grain and Forage Nova Scotia, Dover Mills, the Canadian Feed Industry Association, the Nova Scotia Federation of Agriculture and the Halifax-Dartmouth Port Development Commission that has enabled the capital works project to be funded, to secure the future of the Halifax Grain Elevator.

I would ask for unanimous consent on this.

MR. SPEAKER: There has been a request for waiver of notice.

Is it agreed?

It is agreed.

Would all those in favour of the motion please say Aye. Contrary minded, Nay.

The motion is carried.

The honourable Leader of the New Democratic Party.


MR. ROBERT CHISHOLM: Mr. Speaker, I hereby give notice that on a future day I shall move the adoption of the following resolution:

Whereas the Minister of Finance defends his predecessors budget trickery by citing the opinions of Deloitte & Touche of Montreal, a firm under contract and reporting to the Department of Finance; and

Whereas every other jurisdiction in Canada has its financial statements audited by an independent auditor who reports directly to the Legislature; and

Whereas Nova Scotia's peculiar arrangement causes wasteful duplication, consumes scarce resources and serves no useful purpose;

[Page 1026]

[8:15 a.m.]

Therefore be it resolved that this House demands that the Liberal Government proceed immediately to turn over all auditing functions to the provincial auditor since Nova Scotians can no longer afford to spend $100,000 a year just to provide the Minister of Finance with a convenient second opinion.

AN HON. MEMBER: Waive notice.

MR. SPEAKER: I hear several Noes.

The notice is tabled.

The honourable member for Sackville Cobequid.


MR. JOHN HOLM: Mr. Speaker, I hereby give notice that on a future day I shall move the adoption of the following resolution:

Whereas his predecessor played a shell game with $50.9 million in capital spending to create the illusion of a balanced budget in 1996-97; and

Whereas the Auditor General's Report put an end to that shell game and left the Minister of Finance to pay off the bet; and

Whereas the Minister of Finance has begun a new shell game for the 1997-98 budget involving Public Service wage increases, budgeting restructuring costs and the BST pay-off;

Therefore be it resolved that members of the House demand that the Liberal Government stop playing games with the provincial budgets and give the people of Nova Scotia a realistic and responsible accounting of the province's financial situation.

MR. SPEAKER: The notice is tabled.

The honourable Minister of Natural Resources.


HON. ELEANOR NORRIE: Mr. Speaker, I hereby give notice that on a future day I shall move the adoption of the following resolution:

[Page 1027]

Whereas April 26th marks the anniversary of the day in 1918 when Nova Scotian women received the right to vote in provincial elections; and

Whereas May 24th marks the anniversary of the day in 1918 when Canadian women were given the right to vote in federal elections; and

Whereas this year will be the 79th Anniversary of these important gains in the rights of 51 per cent of Nova Scotia's population; and

Whereas the right of all citizens to full participation in the political process is one of the hallmarks of a democratic society;

Therefore be it resolved that this House recognize these anniversaries of important milestones for Nova Scotia's women; and further that those of us in political life encourage the women of our province to participate in the electoral process as candidates as well as voters so that future sessions of this House will show a representation of women which reflects their representation in the population.

Mr. Speaker, I request waiver of notice.

MR. SPEAKER: Is it agreed that notice be waived?

It is agreed.

Would all those in favour of the motion please say Aye. Contrary minded, Nay.

The motion is carried.


MR. SPEAKER: The honourable Government House Leader.

HON. RICHARD MANN: Mr. Speaker, would you please call the order of business, Private and Local Bills for Second Reading.


MR. SPEAKER: The honourable Government House Leader.

HON. RICHARD MANN: Mr. Speaker, would you please call Bill No. 3; and in the absence of the minister I would move second reading.

[Page 1028]

Bill No. 3 - Ardnamurchan Club Act.

Bill No. 4 - Université Sainte-Anne Act/La Loi de l'Université Sainte-Anne.

MR. SPEAKER: The motions are carried.

Ordered that these bills be referred to the Committee on Private and Local Bills.

The honourable Government House Leader.

HON. RICHARD MANN: Mr. Speaker, would you please call Bill No. 10.

Bill No. 10 - Incorporate the Benevolent and Protective Order of Elks of the Dominion of Canada Act.

MR. SPEAKER: The honourable Leader of the Opposition.

DR. JOHN HAMM: Mr. Speaker, this is a bill to repeal an 80 year old Act that is no longer relevant. The Benevolent and Protective Order of Elks across the country are asking that these provincial Acts all be repealed.

MR. SPEAKER: Is the House ready for the question? The motion is for second reading on Bill No. 10. Would all those in favour of the motion please say Aye. Contrary minded, Nay.

The motion is carried.

Ordered that this bill be referred to the Committee on Private and Local Bills.

The honourable Government House Leader.

HON. RICHARD MANN: Mr. Speaker, would you please call Bill No. 11.

Bill No. 11 - Queens Regional Municipality Act.

Bill No. 12 - District of Argyle Financial Assistance Act.

MR. SPEAKER: The motion is for second reading of these bills. Would all those in favour of the motion please say Aye. Contrary minded, Nay.

The motions are carried.

[Page 1029]

Ordered that these bills be referred to the Committee on Private and Local Bills.

The honourable Government House Leader.

HON. RICHARD MANN: Mr. Speaker, would you please call the order of business,

Private Member's Public Bills.


MR. SPEAKER: The honourable Government House Leader.

HON. RICHARD MANN: Mr. Speaker, would you please call Bill No. 9 and, in the absence of the member, I would move second reading.

Bill No. 9 - Bank of Nova Scotia Trust Company Act.

MR. SPEAKER: The motion is for second reading of Bill No. 9. Would all those in favour of the motion please say Aye. Contrary minded, Nay.

The motion is carried.

Ordered that this bill referred to the Committee on Law Amendments.


MR. SPEAKER: The honourable Government House Leader.

HON. RICHARD MANN: Mr. Speaker, would you please call the order of business, Government Motions.


MR. SPEAKER: The honourable Government House Leader.

HON. RICHARD MANN: Mr. Speaker, I move that you do now leave the Chair and that the House resolve itself into a Committee of the Whole House on Supply unto Her Majesty.

MR. SPEAKER: The honourable member for Bedford-Fall River.

MRS. FRANCENE COSMAN: Mr. Speaker, I am pleased to stand this morning and introduce the debate before we go into Supply. I listened with great interest yesterday to some of the comments made by Opposition Members, particularly when Mr. Gillis was

[Page 1030]

speaking as Minster of Finance on some of the rhetoric that has gone on in this House in the last 48 hours, and I want to reflect on some of my emotional responses to major points in political life in the last period for two decades, I would say.

There were two times in my life when I reacted extremely negatively to events that were happening in the political realm. One of them was the night of the War Measures Act, because I can remember that being announced on television and sitting with a sense of I can't believe this is happening to my country. Another second relevant time for me was 1992-93, when I realized that Nova Scotia was in debt with a deficit of $617 million. I could not grapple with the number of zeros in that figure. I remember being struck by the fact that this is a debt that we cannot handle as a province without huge effort and discipline.

The $617 million deficit on the operating account of this province was staggering, all I could think of was how on earth did this happen in this small province with the small population base. How did the spending happen to put us in that very bad position, let alone the fixed-debt that was in the province? So those are two occasions when I can remember having a genuine sense of despair about the political process.

I think it is probably the deficit that this province incurred in 1992, at the dying end of the Cameron Government, that was one of the major reasons I thought, I am going to run for politics. I had a lot people come to me then and say, we think you should run. It took me three months to make the decision, but I think that was probably one of the big events in my life that year that made me realize something had to change. Whether or not I could have a role in making that change, I didn't know at the time. It certainly was a significant event for me when I realized that this province was in the hole for $617 million in its operating accounts. Now, how on earth did that happen? Well, it only happens in one way and that is when people spend like drunken sailors. (Interruptions)

I often think that the Tory Government of the day could only be known as a blue-ribbon government because it went around cutting blue ribbons every other day of its life. It must have been a lot of fun to be in politics then because when you are spending money and you are making people happy when you are spending it, then it has elements of being sort of fun. It sure is more fun than when you are on the side of trying to cut the deficit back to zero and get a balanced budget. It takes a tremendous amount of discipline and a tremendous amount of effort, as we all know, for the past four years, to get to the point where the deficit is down to zero.

I think it pays to talk about these things sometimes in this House because memories can be short, memories can be glossed over. Certainly, I think it would have made us all feel a lot better if at the time, with that deficit of $617 million, that either the Premier of the day, Premier Buchanan or his follow-up Premier Cameron had stood up and apologized to the Province of Nova Scotia for spending their money, their children's money and their grandchildren's money to the point that the place was bankrupt but that apology never

[Page 1031]

happened, unfortunately. It probably wouldn't have helped in terms of the debt but it might have made people out in the grass roots realize, well, they actually do feel sorry about this stuff. That wouldn't take the debt away but it would have been a nice expression of admission that yes, we spent you into the ground and we spent your children into the ground and we spent your grandchildren into the ground So there we were, May 1993, a record $617 million deficit. Let's face it folks, Nova Scotia was bankrupt and on the very brink of a financial disaster.

Former Finance Minister Chuck MacNeil is a fascinating study because when he was asked in March 1993 when the Tory Government would finally balance its budget, he replied, to put a date on it is crazy. Well, that attitude reflected throughout the government of the day that spending was out of control, it was too much fun cutting blue ribbons and to try to do anything about it was crazy. In truth, to do anything about it requires discipline and diligence to get at the painful kinds of cuts you have to make to balance your books.

How did the Tories manage to get this province in such a mess. Well, I looked at that and I realized that in 1982 there were sweeping tax increases; personal income, corporate income, sales tax, gasoline tax and tobacco taxes all increased. So, the net effect was a huge increase of a burden on individual Nova Scotians and on businesses in this province. But at the same time with these tax increases, which created more revenue, the spending continued to outpace the money that was coming in. Deficit spending continued. Go to the bank and borrow, that was the philosophy. By 1993, this reached a crisis point. The largest deficit in the history of the province was realized in 1993 and it was $617 million. We have heard that figure before and we will hear it again. Just before the spring election reality hit.

Premier Cameron was leading the Tory Government. He started to sell off assets in the year before and I think of the $200 million that was generated from the sale from Nova Scotia Power. That was artificially made to look like, hey, we are doing something about the debt, we are selling our assets. When the store is empty, what do we sell next? What was happening was the hopes of Nova Scotians were being sold.

Now let's look at 1978. The province's net debt in 1978 was $566 million. That was a per capita debt of $669, not bad, right in the middle of the road. But by 1993 the province's net debt had ballooned to $7 billion. That equates per capita with $4,932 per person, the second highest in Canada. That is not something that happens easily, it only happens by spending being out of control.

In 1993, just after the election, when we looked at Mother Hubbard's cupboard to find it extremely bare, let alone ripped off the wall, we realized that we had to put in place a very well thought out plan of action to get things under control. That was the first expenditure control plan that was initiated. We had to bring government spending in line with revenue. We started off by looking at our capital side and our operating side and setting out on a path of a four year reduction.

[Page 1032]

[8:30 a.m.]

We accomplished this with a great degree of difficulty by doing a number of things. We looked at every department of government. We looked at what could be managed more effectively and with more accountability. You have to realize that for more than 20 years Nova Scotians have been living on borrowed money. Governments have been living on borrowed money. So step by step we had to put this province back on the road to fiscal recovery.

In 1993 we had a $546 million deficit. Do not forget we started out with $617 million. So we started to be able to get that under control. In 1994 this was down to $235 million and in 1995 it was down to $201 million. By 1996-97 we managed to show a surplus, a $4.8 million surplus.

In other words, Mr. Speaker, we are no longer paying bills to the banks so that we can borrow more money to run our affairs. Our net direct debt has been reduced by more than $150 million this year. That is the first decrease since 1965 and it is significant.

In September 1996, let's look at our credit rating. Well, we had an upgrade in September 1996. Standard and Poor's revised our outlook from negative to stable. What a difference a day makes. That simple revision from negative to stable meant that if we had to go to the banks and the lending institutions for anything, we would get a better rate on doing so. We did this while absorbing cutbacks from the federal government because our federal counterparts finally are getting down to the nitty-gritty of deficit reduction at the same time.

While we have been tightening the belt and the purse strings in this province, we have also been trying to assimilate the loss of revenues as a result of the federal restraint. So while we did this, what did we do for the most vulnerable in society? I am really proud to say that all the ministers who have served the portfolio of Community Services have managed to hold their budgets at a level and at a growing state of dollars because we did not turn our backs on the most vulnerable in society. We kept their budgets intact and we actually allowed for some growth in them.

We also looked at reducing our foreign currency exposure on the bond markets. Right now it has come down from 66 per cent of foreign currency exposure to just about 46 per cent. That is significant. We have now set a target of moving it down to 20 per cent.

What are the rewards? The rewards are that our children and our grandchildren and our great-grandchildren no longer have a financial noose around their little necks. That is extremely significant because in previous governments all those borrowings were going to be on the backs of those children.

[Page 1033]

We will have a surplus. We had in 1997-98 a $4 million surplus. In 1998-99 we forecast a $4 million surplus and by the year 2000 it starts to move up to $5 million then $11 million. Now, this is a period, at the same time as our surplus is moving up, of a planned' concentrated federal reduction for a number of programs. So, given that we are also at the same time receiving the impact of those cutbacks, then it is obvious that our ability to manage the financial purse is extremely important to get good results.

I think we have met our moral obligation and it was a moral obligation and it continues to be a moral obligation to stop passing on debt to future generations. Governing in the 1990's is not easy and it does not matter if you are in Nova Scotia or if you are in British Columbia or if you are in Ontario or Saskatchewan or New Brunswick or Prince Edward Island, governing is not easy. It is all about good governments. It is all about accountability and it is all about managing the public purse.

I think that we certainly have made many difficult choices over the past four years. We have learned that a fiscally sound government cannot be all things to all people despite the fact that many people would like government to be able to be all things to them. We have learned that fiscal responsibility is possible if you have courage and discipline, and definitely it takes discipline. We know we can have a strong, self-reliant economy in this province; we can have the most competitive tax rates in the country; we can attract business and create jobs and do all of this without the shameful borrowing on the backs of our children and grandchildren.

I am proud of our record, Mr. Speaker, and I thank you for the opportunity to get this sense of pride in our accomplishments on the record before we enter the Supply debate. Thank you.

MR. SPEAKER: The honourable member for Queens.

MR. JOHN LEEFE: Mr. Speaker, I had not intended to rise in debate this morning. What motivates me to rise in debate is a remark made by my honourable colleague and friend as she opened her 15 minute deliberation this morning. I was surprised and distressed when this member - who, as I recall, not too awfully long ago rose on a point of order in this place to say that she was dismayed at a person using the expression "skirting the issue" as an expression which was contrary to the interests of women - stood in this place and refer to drunken sailors.

AN HON. MEMBER: Unbelievable. The government has no regard for the military.

MR. LEEFE: Mr. Speaker, it is always wrong to be stereotypical; it certainly is absolutely wrong to be stereotypical of the men and women who serve this country professionally and honourably in the Armed Forces of Canada, whether they are in the navy, the army or the air force. To talk about drunken sailors, especially as we know the Armed

[Page 1034]

Forces here in Halifax and the long, proud record of service that they have to this country through this city, I think is reprehensible indeed. It is uncalled for and I hope that that member will seize the first opportunity to apologize to the men and women in the Armed Forces of Canada, particularly those who serve here, for stereotyping them in her remarks as drunken sailors.

I know that that was not her intent but, in fact, the result is to further reinforce that kind of stereotyping. It is wrong, it is uncalled for and it is never in order. It reminds me, Mr. Speaker, that the Liberal Party of which she is part, is one which mouths support for the Armed Forces but which, in fact, renders it only infrequently and then immediately in advance of elections.

Just over the past few days we have heard the Prime Minister speaking of the need to arm our Armed Forces with new helicopters, so that the museum pieces that the men and women who risk their lives in daily in rescues and providing defence coverage to this country can finally be put to rest; helicopters that should have been put to rest four years ago, had the federal Liberal Party not taken the contract for the EH-101 and torn it up, and thereby put in further jeopardy the lives of the men and women who serve in the aged Sea King helicopters.

Now the Prime Minister tries to dress himself up in the flag and claim that he is acting in the best interests of Canada and our Armed Forces by equipping them with the helicopters that they need today but which they needed four years ago; the kind of weapons and rescue aircraft which they need now and which they needed then and which the Liberal Government has denied them, possibly believing that anything was good enough for a bunch of drunken sailors.

For four years the Armed Forces has been frozen out of pay raises, and when do they get a modest pay raise? Well, coincidentally from the federal Liberal Party, on the eve of a federal election. How cynical the men and women of the Armed Forces must be with respect to such modesty on the part of the federal government which, up until the eve of the federal election, has denied them an opportunity to be recompensed not only for their professionalism but indeed for putting their lives on the line to serve this country every day of their service.

This is a federal Liberal Government, aided and abetted by the silence of this provincial government, which has downsized the presence of the military here, moving much of it to Ottawa. We have heard not a whimper from this government in support of retaining senior officials here. They simply packed their bags and left and this provincial government applauded their federal partners in making this move.

[Page 1035]

This federal Liberal Government closed Shearwater with hardly a whimper from any Liberals in Nova Scotia, certainly not from the Chair of the Defence Committee, this current Member of Parliament for Halifax who one could hardly say has been aggressive in supporting the Armed Forces presence here in Halifax and in Nova Scotia.

It is interesting that we have now, on the eve of an election, four persons who we know are going to be offering to the people of Halifax for a Member of Parliament. We clearly know that the person who is offering for the Liberal Party is one who has not been a great supporter or fan of the men and women who serve and the service in which they serve, either as Chairman of the Defence Committee or outside. This is an MP, it seems to me, who consistently has spoken not on behalf of her constituents and on behalf of the interests of Halifax but rather has interpreted the best interests of the Liberal Party of Canada to the constituency and the constituents of Halifax.

Then we have Mr. Green, who has decided to come home from Mr. Manning's office and have another run for the Reform Party here in Halifax. To be perfectly honest, I am not quite sure where he stands with representing this city in which I work, along with all the members of this House.

Then we have the Leader of the New Democratic Party. It strikes me that the Leader of the New Democratic Party through the message that she has clearly sent across Canada in her leadership role in that Party, has made it plain that her principal purpose in seeking the election here it to provide her a platform in Ottawa to preach her brand of social democracy, of socialism.

Then we have a fourth person who has thrown his hat in the ring and that is my colleague and long-time friend, Terry Donahoe. I have absolutely no hesitation in saying to this House and to all Haligonians and to any who would care to listen that in the person of Terry Donahoe there is only one reason that he seeks public office as a Member of Parliament for Halifax and that is to speak out loudly, clearly and strongly for the people of Halifax, for the City of Halifax and to make that his rationale for running for public office, no other.

It is clear that with respect to the Armed Forces, except at election time they are out of sight, out of mind and they are out of equipment. With respect to the New Democratic Party, if we look at their record and policies with respect to the Armed Forces, we would find that with an NDP Government or even indeed with an NDP member speaking for this city we would have one who speaks of the Armed Forces being out of NATO, out of NORAD and indeed, for all intents and purposes, out of business. The NDP defence policy would seem to be one which would cause the Canadian Armed Forces to be turned into some kind of a dressed up Peace Corps.

[Page 1036]

[8:45 a.m.]

Mr. Speaker, the Armed Forces have played a significant role in the history of this great city since it was founded in 1749. Men and women from all parts of Canada have served in Nova Scotia in the army, the navy and in the air force and, most particularly, in this great seaport, the honour of the warden of the north, as Kipling called it. Sailors who served in the Royal Canadian Navy and in the current Canadian Armed Forces in the Naval Branch have served and continue to serve this country well. They have served this country well and they continue to serve this country well and they should not, even inadvertently, ever be stereotyped as being a group that could be referred to as a bunch of drunken sailors. Thank you.

MR. SPEAKER: The honourable member for Sackville-Cobequid.

MR. JOHN HOLM: Mr. Speaker, I had not intended to speak this morning going into Supply, but I feel compelled to make a few brief remarks, if I may, with your patience, Mr. Speaker. I must admit that I, like the previous speaker, was slightly taken aback, or more than slightly, was taken aback by the reference made by the member for Bedford-Fall River. I am sure, given how often that member has stood in her place to chastise members of the Opposition when Opposition members have inadvertently made a comment or a reference which if taken literally could have implied something that was slightly disrespectful of a particular group.

I am sure that the member who spoke did so without meaning, without the intent, to cast aspersions against the men and women who serve this country so well and, Mr. Speaker, men and women who we in this country and certainly in this province have grown to have the utmost respect for, as have people around the world who have benefited from the services of our forces. I am sure that the member for Bedford-Fall River will, at the earliest opportunity, stand in her place to make sure that there is no misinterpretation of what she meant in her remarks. I will leave it at that because I am quite confident that that member certainly did not mean to show any kind of disrespect or to denigrate the reputation of these men and women.

I know that in my riding of Sackville-Cobequid, I am fortunate to have within my constituency, many families, hundreds of families, where one member or possibly, in some cases, both members of the family are members of the Armed Forces and they are, indeed, very fine people, upstanding citizens within the community and they contribute so much, not only through their service in the Armed Forces, but also so much to the community life, giving of their time and energies. I can think of countless people who are involved, whether that be in providing sports and recreation for our children, coaching and all other kinds of services. So I am sure that the member did not mean to cast aspersions.

[Page 1037]

I also noted that the member for Queens played a little bit fast and loose with some his comments, suggesting and alleging certain positions of the New Democratic Party in suggesting that the New Democratic Party was anti-forces. The member for Kings North said, yes, it is true. He did make those mis-statements. I have to stand here and I have to point out a couple of things. First of all, we all know that over the last numbers of years, going back over the last 20 or more years, during both Liberal and Tory Regimes, the Armed Forces in this country are being starved. We have seen the manpower of the Armed Forces - the person power I should be saying because I don't want to leave a misrepresentation here - but the membership, the number of people within our Armed Forces have been drastically cut.

Mr. Speaker, the materials, the supplies that they have been given to work with as they are out doing and representing our country around the world, distinguishing themselves, in most cases, in peacekeeping in their efforts around the world on our behalf, we have by and large not provided them with the proper equipment and materials that are necessary to be doing their jobs.

Mr. Speaker, I am very proud to say - and have no hesitation in saying - that I believe that our Armed Forces in this country have a distinguished representation and record, with a couple of minor exceptions. We have been letting those men and women, who serve us so well, down by not providing them with the adequate manpower that they need to do their jobs nor have we been providing them with the proper equipment. Look at it in a business way. A well-run business, every so many years you will be updating, if it is, for example, a trucking industry or something like that, you regularly update the equipment that they have to operate, so that you don't run into a crisis situation where all of your equipment is outdated at the same time. It is a proper, business-like way.

What we have seen under the Liberals and what we saw under the Tories in Ottawa, is they were playing footloose and fancy free and as they head up to an election they would be announcing that we are going to be doing certain things, that we are going to start to treat the military with respect and get them what they need. Then, of course, after an election they cancel what they had announced instead of having a proper, business-like plan to make sure that on a regular, ongoing basis that the equipment, the materials, et cetera, that they need to do their job on behalf of Canadians is, in fact, going to be there.

When you take a look at what has happened here in Nova Scotia, many communities have been devastated as a result of federal government decisions made by the Liberals following through on designs and plans that were started by the Tories, and downsizing the presence of the military here. Take a look at what has happened up in Cornwallis, Mr. Speaker, and all of the jobs and so on that were removed from that area after the promises, made by the Liberals when they were seeking office back in 1993, that they weren't going to allow the Mulroney agenda to proceed. You saw what happened and you saw the broken promises that followed.

[Page 1038]

We have seen other closures. In fact, Nova Scotia which has 3 per cent of the Canadian population, took 16 per cent of the hit of the federal cuts across this country in terms of the federal downsizing; in other words, over five times our population proportion allocation.

MR. ROBERT CARRUTHERS: A question, Mr. Speaker. I have been listening with great interest and I know he has a serious concern in this regard. I just want to know if I understand clearly what he is stating. Is it the position of yourself and your Party, as you were the former Leader of this Party, that you are in favour of increasing the size of Canada's Armed Forces? I just want to understand that that is position.

MR. HOLM: Mr. Speaker, I have been saying for a long time that yes, indeed, I do believe that the manpower in our Armed Forces, I have no hesitation in saying, is getting too small. I mean, if we take a look at it and if we are going to continue to ask our forces to be doing the kinds of jobs, and expecting them to be doing the jobs around the world that we do, and that have made us proud, then obviously you have to have people to do that. I have no hesitation saying that I believe that very definitely we need to have the manpower, the person-power. When I say manpower I mean it in a non-generic way.

MR. ROBERT CHISHOLM: What we need is the training and support so we can avoid things like Somalia.

MR. HOLM: My Leader makes another very important point as well, and what we also need to have for the members of the Armed Forces is we have to provide and have the adequate and proper training for them, the personnel, on an ongoing basis, and the supports so that they can, of course, do those jobs. (Interruption) I have already talked about equipment, I say to the member opposite.

Mr. Speaker, we have seen countless millions of dollars again being squandered as a result of commitments being made. You start to get part way down a contract line and then end up turning around and ripping that contract up. After the election, of course it was ripped up. You make the announcements and you commit the public monies before the election and after the election you cancel those commitments and then we have to pay tens of millions of dollars to buy out of the contracts that the Liberals and Tories started prior to an election, for election purposes. That is a tremendous waste of money. Just think of how much more equipment our forces would have if, in fact, those political games had not been played.

Mr. Speaker, we can take a look around and see what is left in Shearwater; we can take a look at the other bases that have closed down around this province. Down in Mill Cove and other areas, tracking stations, we had within these communities a very strong and important economic base that spun out and around through those communities. Where do these bases, where do these services go that were closed down in our communities? So much of them end up in the centre lanes (Interruption) where the unemployment rate is not as great

[Page 1039]

and where they don't have the facilities necessarily that we have in this part of the country that we could be better utilizing.

So, Mr. Speaker, I have no hesitation saying that I believe very strongly in the integrity of the vast majority of the men and women in our Armed Forces. They have served us well and I have every confidence that they will continue to serve us well.

I hope that the derogatory remarks that were made earlier, unintentionally I say, because I don't believe that they would have been intentional but it doesn't really matter if they are intentional or not, an apology to rectify that matter certainly is always in order so that there would not be any misconceptions left out there.

I also expect that the member for Queens will also correct his position and will stop misquoting the positions that are misrepresented by other political Parties. One might think that the Tory member for Queens was trying to play a little bit of politics, as a federal election was going on. You know conveniently he didn't talk about all of the Mulroney deals and all of the devastation to the military that occurred under the Mulroney Tories, the policies that Jean Chretien adopted immediately, as they came into power. You know the Liberals and the Tories, the same old story. We have seen that in the defence and the betrayal of them.

It would seem that he was trying to play a little bit of politics when he was casting aspersions upon Alexa McDonough and the position of the New Democratic Party. What I think he was really doing was looking in a mirror and probably seeing the kind of policies and so on that the Tories have followed and feeling a little bit embarrassed about those so he is trying to deflect the weaknesses in their past record and practices, deflect them on to somebody else. So I am sure that the member for Queens will also be very apologetic for inadvertently, I am sure, misrepresenting because he would not try to play political games in here, I am sure of that, Mr. Speaker. So I expect that those withdrawals will also be forthcoming from him.

Mr. Speaker, I am sure I could talk a lot more about the importance of our Armed Forces but, as our time is running out, I will save those comments for another day. As I take my place, I have to say and I am very proud to say that I believe my community that I live in, the community of Lower Sackville, has been, is currently and will continue in the future to be greatly enriched because of the men and women who live in my community who are members of the Armed Forces. They not only have served the Canadian public well in their jobs and their official duties, but they have certainly served the people of my community very well because of their many contributions towards improving the quality of life as citizens within my community.

[9:00 a.m.]

MR. SPEAKER: The motion is carried.

[Page 1040]

[9:01 a.m. The House resolved itself into a CWH on Supply with Deputy Speaker Mrs. Francene Cosman in the Chair.]

[1:02 p.m. CWH on Supply rose and the House reconvened with Deputy Speaker Mrs. Francene Cosman in the Chair.]

MADAM SPEAKER: The Chairman of the Committee of the Whole House on Supply reports:

THE CLERK: That the committee has met and reports progress and begs leave to sit again.

MADAM SPEAKER: Is it agreed?

It is agreed.

The honourable Deputy Government House Leader.

MR. RAYMOND WHITE: Madam Speaker, would you please call the order of business, Government Motions.


MADAM SPEAKER: The honourable Deputy Government House Leader.

MR. RAYMOND WHITE: Madam Speaker, would you please call Resolution No. 134.

Res. No. 134, re: Fin. - Expenditure Add.: Health/Justice - Approval - notice given Apr. 22/97 - (Hon. W. Gillis)

MADAM SPEAKER: We have two people standing. The honourable member for Hants West had the floor at the conclusion of the debate before. I will recognize him now.

The honourable member for Hants West.

MR. RONALD RUSSELL: Madam Speaker, could you advise me of how much time I have left?

MADAM SPEAKER: You have 11 minutes left.

[Page 1041]

MR. RUSSELL: Well, that is too bad, Madam Speaker, because I thought I might have sufficient time to repeat my speech from last night. I guess I haven't got sufficient time but, however, I can assure you it is in Hansard and you can read it and perhaps you will pick up a few gems from it.

Madam Speaker, I want to conclude my remarks on this resolution by speaking about something that we keep getting from the other side. It is something that I would call revisionist history. I presume everybody in this Chamber is aware of what revisionist history is. It is something that is normally practised by the CBC. They had The Truth and The Valour. Remember the program on the Avro Arrow? They had another one on Hiroshima and Nagasaki, et cetera. Those things have been revised and revised in the light of time. They have been done without any reference to the true facts of what the situation was at that particular time and that does not make them correct.

Madam Speaker, the present government loves revisionist history. In fact, I think every second speech we get from the government refers back to when you guys - that's us on this side of the House - were in government. I don't know if they lack ideas or what it is but, however, they like to refer back to the time when the Conservative Government was in power.

There are many members of that present government who were members of the Opposition during those years when the Tories were in power. In fact, there are quite a few of them at the present time in the Executive Council who were in the Opposition at that time. I can go through them if you want: the Minister of Municipal Affairs, the Minister of Business and Consumer Services, the Minister of Health and so on. There is a whole bunch of them.

AN HON. MEMBER: Don't forget the big guy.

MR. RUSSELL: The big guy, yes.

AN HON. MEMBER: He's been around a couple of years.

MR. RUSSELL: Yes, indeed. None of these people, Madam Speaker, when they were in Opposition and we were in government, ever spoke about restraint. What was their plea? Spend some more money, please. Give some more to my constituency. Build some more roads; build some more hospitals; build some more schools. When we built hospitals and schools and bridges and roads in their constituency, it was not a matter of wasting money in those days. No, they were needed. That infrastructure was needed and we did put infrastructure into ridings all the way across this province, where it was warranted. We built hospitals. (Interruption)

[Page 1042]

I don't know about yours, my friend, but I can tell you, for instance, I was just looking yesterday at what we did in the riding of Richmond with regard to health care. (Interruption) I will provide the list to the Minister of Finance. I have not got time, obviously, to go through everything, Madam Speaker. However, it is certainly there.

We put that infrastructure in place and what do we have today? We have a deteriorating transportation system. We have highways that are falling apart. They are turning into gravel roads, not paved roads the way they were. Our bridges are falling down and they are not being repaired. In fact, we probably have more unsafe bridges in Nova Scotia today than we have ever had. We have our health care system ripped apart. We have a deteriorating education system. We have an economic mess out there and, on top of that, we have an increasing tax load imposed by this crowd on the poor beleaguered taxpayer of Nova Scotia.

I don't know. This is the record of that government and I think it stacks up pretty poorly against the record of the government that was, Madam Speaker. If they want to live in the past, if they want to keep on going back, fine. Go back to the Regan years. There are some ministers over there now who were in this House when the Regan Government was in power. You talk about big spenders. You go back to when Mr. Regan was the Premier of this province and Mr. Gillis over there was a member of the government. (Interruptions) I know that the Minister of Agriculture was there, too. Those are the same people. But we never go back to those years. We always go back to the 1980's. I don't know why we go back to the 1980's, except that this government can look at the 1980's and say, at least Nova Scotia got by and retained the good health care system, a decent education system and a good transportation system.

I wonder if the people opposite, Madam Speaker, will give me a few extra minutes so I can finish? (Interruptions)

MADAM SPEAKER: I don't think so.

MR. RUSSELL: If they want to go back, Madam Speaker, let them go back to the 1970's when we built Clairtone. Remember Clairtone? Remember we had Industrial Estates? Remember we got in a cruise ship - can you imagine? This Liberal Government got us into the cruise ship business in this province and they didn't even have the cruise ship in Nova Scotia. They were going to operate it out of the Bahamas with a crew from the Bahamas. It didn't create any jobs. It didn't even operate out of Nova Scotia. That was the history of this Party. They never go back that far. It is convenient for them to go back to the 1980's, and they don't even remember the 1980's correctly because of the fact that this government (Interruptions)

MADAM SPEAKER: Order, please. You have 45 seconds left.

[Page 1043]

MR. RUSSELL: Madam Speaker, that is lots of time. It is lots of time to tell the Minister of Finance that I am not going to vote for his resolution. I am going to vote against his resolution and I wish I had time to do this all over again.

MADAM SPEAKER: The honourable Leader of the New Democratic Party.

MR. ROBERT CHISHOLM: Madam Speaker, I am kind of sorry that the member for Hants West doesn't have a little more time. I missed his intervention last night. I understand it was quite entertaining and I, too, like to cast my mind back from time to time and review the record of previous governments and previous members. It is always, I think, an interesting education for us to get an interpretation from different perspectives.

Let me turn my attention to this resolution dealing with the extra appropriation of $139.479 million. You know why we are dealing with this resolution today? We are dealing with this resolution because of the Expenditure Control Act that was introduced in this House back in 1993. The Expenditure Control Act, you may recall, was brought in here with trumpets blaring, talking about how this government was bringing in a new regime of fiscal accountability.

This government was going to be open and transparent with the people of Nova Scotia; they were going to account at an appropriate time; they were going to be true to their word; and they were going to ensure that the money that was spent and the money taken in was accounted for, no problem. They said, with this extra appropriation Act, they weren't going to do what the former administration did and just pass OICs and expropriate for extra appropriations of millions of dollars and do it behind closed doors without advising Nova Scotians what was going on.

We have had this government, under the pretense of being accountable to Nova Scotians, it had to bring in a few resolutions over the past couple of years for extra appropriations. I want to put that into some context. I can't help thinking, when you talk about this government being accountable, I can't help but think of the phrase, "money, money, where is the money?". Right now we are trying to find out where is that contingent liability for the wage demands for 1997-98, for example.

You ask the Minister of the Environment and first of all he says it is in our budget. No, wait, the staff grabs him and he says no, it was in our budget, but it is gone. So I said, who took it? He said, well, the Minister of Finance, and I said oh, okay. I ask the Minister of Education and Culture, what about allowances for providing for the provision . . .

HON. WILLIAM GILLIS: I wonder if the member would kindly permit a question? Madam Speaker, the honourable member is telling the House that there is no money provided in the budget for 1997-98 to resume wage negotiations. That is what I heard him say and maybe the Hansard record will show that; I think that is what the Hansard record will show.

[Page 1044]

My question is, has he looked at Page 1.4 of the estimates? Under Restructuring Costs there is $31.51 million and part of it is for the provision for contract negotiation. (Interruption) It is $31.510 million in a bulk, under Restructuring Costs, it includes several things, but in part it reads, and I am sure you read well, it says; "provision for contract negotiations.".

[1:15 p.m.]

MR. CHISHOLM: Madam Speaker, I always appreciate the interventions by the minister. I had not yet got to that point where I was going to say, and I may well say, that we have not been given the indication that, in fact, there is money available in the budget.

What I am trying to do is paint a little bit of a picture here. I know the Minister of Finance is anxious, he thinks he has got me but he has to wait until I actually get to that point. I encourage the minister to jump to his feet and say he has got me.

Anyway, the point is (Interruptions) Calm down now, you will get your chance. The point is that we have been trying to find out where some of the money is, where it goes, where it has been and people are not necessarily clear. I was going to say about the Minister of Education and he indicated to me yesterday in this House, oh yes, we have allocated, we have made provisions in this budget and we have made promises to the school boards and the municipalities that they are not going to be responsible, it is going to be the Province of Nova Scotia. He doesn't know exactly where the money is but we have made provision for it.

We have been trying to nail down the Minister of Finance over the past couple of weeks since the budget came down, as to where, in fact, that money is provided for, Madam Speaker. He referred us to a restructuring fund and we were told by Finance officials in the lockup that it consisted of partly EDIP, monies for the Early Departure Incentive Program, and partly for a couple of other allowances and I think there was $6 million left over from their calculations that was not accounted for.

I guess the minister is telling us then that what he has done is set aside $6 million to deal with the pent-up demand of 60,000 public sector workers. The point is, though, that we are questioning and we have not been given sufficient evidence to tell us that the government has, in fact, considered any adequate provision for that liability.

I think it is important, given what we are dealing with right here. We are now being asked to approve a resolution that allocates $124 million to the Department of Health. It was moments after the Minister of Health made an announcement back in August 1996 about his budget that they have now been able to balance the budget and they are making some significant headway for 1996-97, that the Minister of Health trotted along, who, a couple of months previous, had been the Minister of Finance, to tell us that we appear to require an extra $65 million at that particular point. That was four months or three months after we dealt with the budget in this House and the Minister of Health, who at that time had been the

[Page 1045]

Minister of Finance, comes before the people of Nova Scotia and says well, we need an extra $65 million because we have underestimated this, that and the other thing. Now suddenly the new Minister of Finance is going to shake that money loose.

Then, of course, in November 1996 we had another opportunity to deal with some money, not for this year but for the previous year. We suddenly found out that the Department of Health had been out of whack to the tune of $51.7 million, from 1995-96. Put that together with what the Auditor General said the other day about the fact that this government inappropriately attributed $50.9 million in capital expenditures on 1995-96, in 1996-97, and you are beginning to get a bit of a sense here that this is a government that is shifting money around so fast and loose that it is hard to expect that anybody can keep their eye on the ball, let alone the Minister of Finance or any of the officials on the Treasury benches. That is what is so bizarre about the fact that here we are once again, the third time in a year almost, a little over a year, we are dealing with another resolution about extra appropriations that are in excess of $200 million. Imagine. This government prides itself on being accountable, transparent and wide open to the people of Nova Scotia.

People might have a bit more faith, perhaps, in that pledge if we saw the province move forward on a commitment that they made prior to 1993 which was to move the accounting of the books of the Province of Nova Scotia into the hands of the Auditor General, like every other administration across this country, to ensure that you had the books of the Province of Nova Scotia looked at by one auditor. (Interruption) Now we have two auditors. The Minister of Community Services and the brain trust of the Executive Council says to me, well, what if he is wrong? You mean like their accounting firm was, like the former Minister of Finance was to the tune of $124 million. Hello, what is he talking about here? What if he is wrong? I mean, the Minister of Finance has not been right yet.

Ministers of those different departments have not been right. We had the new Minister of Health, the former Minister of Finance, who of course approved all the previous Minister of Health's budgets, tell us that they were not managing their budgets. The Department of Health had not been in control of expenditures over the past three years and part of the reason why he was in the new department, I think, was to take things in hand. He started off with the $65 million, a chunk of that went to doctors and now we have him responsible for a total of $124 million in the Department of Health. Is that supposed to fill Nova Scotians with a sense that this government has a handle on the fiscal realities of this province? I say absolutely not.

I get back to the question of the Auditor General. The Auditor General in Nova Scotia, the Auditor General in any jurisdiction in this country, is in fact a servant of the Legislature or, in the case of the federal government, the House of Commons. In other words, a servant of the people through the Legislature, through the members of this House, the duly elected body. Not the government, not the Liberal Party, not the Opposition, but to all members of this House. That is why when the Auditor General does his review of the previous year's books and policies and practices relative to the fiscal management of the

[Page 1046]

Province of Nova Scotia, which is his mandate, he does not table it with the Minister of Finance for his approval. He brings it here. He brings it to us. He brings it to the people to whom he is responsible, members of this Legislature, all members of this House, people who have been elected by the people of Nova Scotia to be responsible in this House of Assembly. That is who it is tabled to.

Madam Speaker, let's take for example the Auditor General's Report that was tabled the other day. I ask members in this House if they can answer this question. I wonder if that report had been tabled first with the government, whether or not we would have seen it that day? Given what the Auditor General said about that whole question of the balanced budget that wasn't in 1996-97, would the government have tabled that document? Would they have asked that adjustments be made to the way that information is presented? Would they have asked government members that there be a disclaimer applied to parts of what the Auditor General had to say? Maybe. That is the problem. That is the point here.

When we ask the government about this discrepancy between the Auditor General and the accounting firm bought and paid for by the Minister of Finance and the discrepancy between their positions, the government says, well, it is an issue between accountants, a difference of opinion. We believe our, and they use the word "our" in a possessive sense, we bought and paid for them, so they were our, not your, in other words, not the people in Nova Scotia, not the Legislature, but our accountants. We accept what they say as opposed to what the Auditor General says, who is responsible for reporting to the Legislature of Nova Scotia about the fiscal realities of the Province of Nova Scotia.

Part of the responsibility of the Auditor General is to ensure not only that the columns add up, but that the government is making decisions relative to the administration of programs and the fiscal decisions relative to this province, that are appropriate and in the best interests of Nova Scotians. That is what the Auditor General does, Madam Speaker, ensures that what the government is doing, the decisions they have made, whether it has to do with evaluation and accountability within departments, whether it is with respect to coming up with four year plans. The Auditor General makes recommendations about whether that needs to be done. The Auditor General makes recommendations about the timely release of financial information, in order that Nova Scotian taxpayers have a better and more accurate sense of how their tax dollars are being expended. That is his job. You know what? On a number of those items, this government has responded and the Auditor General has said so.

I was on the Public Accounts Committee for three years after this government was elected. Each and every year, and again this year, the Auditor General commended this government for making significant progress on issues of timeliness, on issues of planning, on issues of evaluation, on issues of departmental responsibility. That is good and government members say, yes, good for him, clap, clap, clap. But you can't have it both ways. The Auditor General also said that this government is cooking the books and that is the issue here.

[Page 1047]

HON. JOHN MACEACHERN: On a point of order, Madam Speaker. The honourable Leader of the Third Party has been massaging the truth somewhat for the last little while, but that final statement is absolutely untrue. Cooking the books, number one, is illegal, and I will say that very clearly.

AN HON. MEMBER: It is also unparliamentary.

MR. MACEACHERN: It is unparliamentary besides, but if the honourable member has evidence that the Auditor General, somehow, somewhere, has indicated to somebody that this government has, in fact, cooked the books and if I might, Madam Speaker, the allegation toward Deloitte & Touche, as well that the honourable member is making, I want to suggest to you it was not said. The statement was not made in the record. I am reading the record in front of me and the indication of that man that the Auditor General has, in fact, stated that this government has cooked the books is wrong. He is misleading this House, Madam Speaker, and he should withdraw that.

MADAM SPEAKER: I would like to rule on the point of order. I think that it is a very relevant point and I will give the member the opportunity, perhaps, to rethink his words in light of quoting the Auditor General.

MR. CHISHOLM: Madam Speaker, let me respond this way. The Auditor General did not say that this government cooked the books. I said (Interruptions) That is right, okay. The Auditor General did not say that this government cooked the books. (Interruptions) I withdraw that.

MADAM SPEAKER: I thank the honourable member.

MR. CHISHOLM: Let me clarify this. I said this government cooked the books.

MR. MACEACHERN: That's different.

MR. CHISHOLM: The Auditor General said that the government presented information that was inappropriate, that the practices, the decisions they made relative to how they presented the information were inappropriate and contrary to accepted general accounting practices throughout this country, through all jurisdictions, Madam Speaker.

[1:30 p.m.]

The Auditor General's Report presented information which said that if, in fact, it had been properly stated, as is required under the provisions of the Finance Act, that the government be accounted for in the year in which it is accrued and in the year in which it is expended, the information would have concluded that in 1995-96 the government had a deficit of $50.9 million less and in 1996-97 this government had a deficit of $46 million, not

[Page 1048]

the surplus of $4 million that this government told Nova Scotians about and patted themselves on the back for. In other words, because of that material representation, I believe that this government misled Nova Scotians by presenting information in that manner by this government trotting out that data and saying look at us, we have balanced the books for the first time in - I don't know, I think they might have said 150 years. They were into stretching the truth in a long way in that respect.

The reality is, you see, it is like when the Auditor General says you have done a good job, then everybody loves the Auditor General. When the Auditor General presents information that says, you blew it, everybody says, well we don't want him. That is why we retain at an extra cost to taxpayers our own accountant for an extra $100,000. That is why we have that second opinion.

AN HON. MEMBER: Is that all?

MR. CHISHOLM: The member for Sackville-Beaverbank says, is that all? Well, $100,000 may not seem like a lot to that member and it obviously isn't much to the government. It is worth the $100,000 for them to have that cushion in there just in case somebody else says, well I don't know if things are all kosher or not, and they have this second opinion, they have somebody else there who says, well we approved it and we thought it was okay. There is a difference in the roles of those two bodies.

I am not suggesting that Deloitte & Touche did anything wrong, anything illegal. That is not the point here, that is not the issue. Deloitte & Touche were hired to add up the columns. Does this add up? Does that add up? Let's subtract this and add that. That is what they are doing. That is what they do, right?

The Auditor General has a mandate that is specific to public administration with respect to the proper administration of the Public Service and the proper expenditure and management of taxpayers' dollars. That is why, and as a member of the Public Accounts Committee you and some other members of this House know that we have had this discussion in Public Accounts for several years; we had it before this government was elected.

Other jurisdictions are going towards and have moved that way, recognizing the need to have an impartial, in-house review of the books. That is the best way to manage responsible administration of taxpayers' dollars in government. That is what they have done. You go back to 1992, when this government was in Opposition, and they railed away at the Tory Government about their use of a private auditor, paid for by the Minister of Finance, who reported to the Minister of Finance. Oh, they thought that was outrageous. No, no, we need to move to the Auditor General handling the books of the Province of Nova Scotia.

In fact, sufficient pressure was applied to the government of the day under Don Cameron that in, 1992, in November, he made the commitment that in fact he was going to

[Page 1049]

move responsibility for the books of the Province of Nova Scotia away from a private auditor to the Auditor General, but just like everything else this government promised when they were in Opposition and when they were running for election, that was then and this is now, goes the line. No, we want to see those books before they are released publicly; we want to make sure that what comes out is what we want to see come out.

Anyway, that is an issue that, as far as I am concerned, is not going to go away because it has to be dealt with. It has to be dealt with; its got to do with credibility; its all got to do with the responsible fiscal management of the affairs of Nova Scotians, the affairs of this government. This government has fallen down badly on its commitment to be accountable to the people of Nova Scotia in this regard, and this is just another example.

You think about, for example, the budget for 1996-97, another balanced budget. Oh, is it? The year 1995-96 was not; 1996-97 was not. So is 1997-98 going to be balanced? Well, I do not know. In 1996-97, we have this extra $124 million from Department of Health. Thank goodness the government was able to come up with PYAs, prior year adjustments, of upwards of $49 million.

Do you know what is funny about that? The government advised us of that in late fall. Do you know what prior year adjustments are, Madam Speaker? Prior year adjustments are recalculations of taxes, from 1995, that the federal government collects; 1995. Do you know what is interesting? Those are taxes that have to be filed by the spring of 1995 and so the question that came to our mind was, well, the government is kind of saying, look at this windfall, we did not know about this in the fall of 1996. We questioned that. We asked where did this come from? We spoke to the federal Department of Finance and they told us that this government had to have known about those prior year adjustments back in the spring because they knew about it and they told them. The $77 million on debt servicing were other components that allowed this government to go forward and overspend their budgets.

It is not even a question of whether the money was necessary or appropriate, it is a question of who is keeping track and does this extra appropriation for 1996-97 have something to do with the Minister of Health trying to regain some credibility in the whole area of - I don't know, credibility on what? - being able to solve the problem in health.

The Minister of Finance, who is responsible not only for this overexpenditure, this extra appropriation of $124 million, but he is also the Minister of Finance who is responsible for approving the budget that was obviously way underestimated, Madam Speaker. You have to ask yourselves how can we trust that minister to have a handle on the finances of anything? He didn't have a handle on the finances of the province, or at least he was not able to put the figures in the right columns. He approved budgets in Health that year after year suffered overexpenditure, yet here we are now that he is the Minister of Health and he seems to be able to take some satisfaction in presiding over an additional appropriation in that department of $124 million. Madam Speaker, it is truly amazing.

[Page 1050]

The money, of course, for this appropriation has gone into things like home care. We have this reserve for doubtful accounts of $39 million, which I understand has something to do with bad debts, some of the hospitals that have been closed or taken over by the regional health boards (Interruption) What's that? (Interruption)

No, that's a different line item, but it raises significant questions about exactly what this government is and has been doing relative to these issues.

The issue of overspending in the Department of Health is nothing new. We have seen that kind of overspending for the last number of years. In 1993-94; 1995-96 and onwards and upwards, every year the Department of Health has spent more than they budgeted, Madam Speaker. So here we are once again in 1997 being asked to approve an additional $124 million.

Madam Speaker, in my intervention here today I have attempted to suggest that while this government is making significant claims about their ability to manage the finances of the Province of Nova Scotia, I would suggest that they have been a very significant failure in many ways. Yes, the operating deficit has been reduced considerably but the debt servicing charge and the actual debt of the province continues to grow and will grow for the next four or five years, which is at least what this government has been predicting.

The concern that many of us have is because of the lack of commitment to help generate jobs, as a result of the lack of economic activity in this province, as the result of the infamous disastrous BST deal, we are not going to have the revenues to be able to meet our revenue commitments or the expectations of Nova Scotians that they will have a properly funded health care, education and social service system in the Province of Nova Scotia, let alone being able to fill the potholes around this province. That's the question, Madam Speaker.

[1:45 p.m.]

This government's credibility continually is tested. This week I think most Nova Scotians would agree has been in fact a bad week for this government in terms of their credibility on questions of finance. Nova Scotians look at what has happened in health, education, social services, roads and other services to them, to taxpayers, and they wonder exactly what this government has been trying to do other than decimate the public sector in the Province of Nova Scotia and continue to dampen and deteriorate the province's economy, Madam Speaker.

Even under those circumstances, they still can't get it right, because they have completely missed, in so many instances, what their budget revenues and expenditures are going to be. I hate to say this but in many ways it is almost like this government has said, thank goodness the economy has been as bad as it has because we have been able to get more

[Page 1051]

money from the federal government through equalization payments. Thank goodness the economy is so bad in this country that interest rates have stayed low. Thank goodness that the economy continues to do poorly and fares poorly relative to the U.S., therefore the exchange rate is in such a situation that we can at least enjoy some exports.

The point is that the reasons why we are even able to maintain and reduce the increase in debt servicing charges is because of circumstances beyond this government's control. It is almost like thank Heaven because what this government does have control over, they have constantly bungled and mishandled and misrepresented, Madam Speaker. I think Nova Scotians are going to hold this government accountable for what they have done and what they haven't done to the finances and the services that they expect in this province.

So let me say, in conclusion, that I am opposed and I will be voting against this extra appropriation, not because these things need more money but because, Madam Speaker, the Minister of Health has so badly bungled the administration of the Department of Health and that the Department of Finance has so clearly bungled the management of the fiscal affairs of the Province of Nova Scotia that they don't deserve to be let off the hook once again with this extra appropriation. I think it is time, once and for all, that Nova Scotians had the opportunity to render their vote, not only on this resolution, but on the future of this government.

MADAM SPEAKER: The honourable member for Halifax Citadel.

MR. TERENCE DONAHOE: Madam Speaker, I would like to make a couple of observations in relation to Resolution No. 134. This is, as you are aware, Madam Speaker, a resolution brought to us by the Minister of Finance because he says that the Expenditure Control Act by reason of its enactment by this House in 1993, with the intent of limiting expenditures to specific predetermined levels, and in the face of that law, he and his colleagues discover that there are program operating expenditures that will exceed the level authorized under that legislation and they can only be made after a resolution of the kind we now debate is passed by this House.

He says in this resolution that it is necessary to exceed, in certain areas, the amount authorized by this House for the fiscal year 1996-97 and, in particular, as you are aware, he says in this resolution that it was necessary for the Executive Council to pass Orders in Council authorizing sums exceeding $139 million and he now wants approval of this Legislature for that activity. Those were amounts necessary, the Minister of Finance tells us, by way of this resolution, in the Department of Health to the extent of $124 million and to the Department of Justice in the amount of $15.3 million, totalling $139.4 million.

This amount of the Department of Health, which I just read, $124 million, I think is something in the order of about 10 per cent of the total budget of the Department of Health. It really does strike me as rather strange and, frankly, rather shocking that the Cabinet would

[Page 1052]

find it necessary, downstairs in the Cabinet Room, to pass additional appropriations in amounts that equate to something like 10 per cent of the total budget of the Department of Health. It makes one wonder about the effectiveness and efficiency and competence and ability of those who prepared the budgets. That, I suggest, Madam Speaker, reflects directly upon the Minister of Finance and his predecessor, the current Minister of Health.

That same Minister of Health, you will be aware, is the same one who brought us, when Minister of Finance, a 10 per cent increase in the sales tax. He brought us the BST. He brought us casinos. He brought us all kinds of things. He brought us chaos in the health care system by reason of squeezing the budgets in the Department of Health. He brought us chaos in the education system by ripping and raping the budgets in Education to the tune of some $54 million to the point where now, on the eve of an election, he and his colleagues are now saying, as a matter of fact, he, himself, the Minister of Health now, former Minister of Finance, who ripped apart the funding of those fundamental, essential and vital services, now we see and hear him quoted in recent days that he is so excited now because "Now the fun is going to begin.". It isn't fun, Mr. Speaker, and you know it, for those communities out there who are reeling from being strangled financially by this government over the last number of years, particularly in health care and in education.

So here we have a government asking us to say, sure, let's rubber stamp and approve an extra appropriation for $139 million, $124 million of it to Health and the other $15 million for Justice. I repeat, it makes one wonder about the ability and the competence of the planning, not only the budgetary planning, but the program delivery planning, of those in the Department of Health and the Department of Finance, if the Cabinet finds it necessary to pass an Order in Council in the amount relative to Health approximating 10 per cent of that total budget.

This, Mr. Speaker, was a repeat, as you are aware, of an extra appropriation for the Department of Health in 1994-95. If this were happening one time, you might say, well, circumstances overtook the government that could not be foreseen, unusual circumstances over and above the control of the government. But this is coming to be an annual rite whereby this bunch of incompetent budgeters actually come back to this House repeatedly asking all members of this place to ratify approval of Orders in Council made downstairs to make right the budgetary reality of the province. It makes you wonder about the ability of those who are on the Treasury benches to prepare an accurate and an honest budget.

The Minister of Finance, after doing his magic in the Department of Finance and after sacrificing health and education on the altar of deficit reduction, the Minister of Finance, lo and behold, finds himself going to the Department of Health. Isn't it interesting that it is not very long after he gets there that suddenly he, now the Minister of Health, in that incarnation now needs another $60 million.

[Page 1053]

This is the same minister who, weeks before, was squeezing the Department of Health and strangling it and not providing it with sufficient money to do what the Minister of Health of that day said needed to be done. The Minister of Health, as a result of a Cabinet shuffle, moves to the Department of Health, and that same man who was strangling the department has the strength around the Cabinet table, obviously, to walk back into Cabinet a few weeks later and say, ladies and gentlemen, I need $60 million to do what is right in the Department of Health.

What kind of approach is that? What kind of planning is that? What evidence of competence and planned health care delivery and planned and effective and efficient and competent fiscal management is that?

This resolution is here, Mr. Speaker, as you are aware, in part, by reason of the fact that we do have a piece of legislation in this province introduced by this government with considerable fanfare. I remember some of the members opposite almost breaking their arms patting themselves on the back, they were so proud of introducing the expenditure control legislation.

The original Act was in 1993 and, if I may refer to it, Mr. Speaker, in 1993 the government introduced An Act Respecting the Reduction and Control of Operating and Capital Expenditures of the Province. It said that, "'net capital expenditures' means total expenditures on the capital account less any recoveries in respect of those expenditures;", and, "(b) 'net program operating expenditures' means total expenditures on the current account less gross debt charges, election expenses incurred pursuant to the Elections Act, Government restructuring costs and any recoveries in respect of these expenditures.", and, of course, the Act said that, "The Minister of Finance has the general supervision and management of this Act.".

What that piece of legislation in 1993 did and said, Mr. Speaker, was this; that, "In each of the 1994-95 and 1995-96 fiscal years of the Province the amount appropriated by the Legislature for net program operating expenditures shall be at least 3 per cent less than the amount appropriated by the Legislature in the preceding fiscal year.". The legislation went on to address 1996-97 and 1997-98, but for the moment that is not relevant just yet. A 3 per cent reduction in each of the years 1994-95 and 1995-96 over the amount appropriated by the Legislature in the preceding fiscal year.

So, as my colleague from Hants West pointed out the other day, in effect saying that if, in 1994-95, for the sake of easy mathematics, there was a net operating expenditure, for the sake of discussion, of $100 million, in 1994-95, then the budget for net operating expenditures for 1995-96 had to be $97 million.

[Page 1054]

Well, we obviously hit a little glitch because this same government which produced this legislation and produced all he extra appropriations to which reference has been made, came back with further amendments in 1996.

[2:00 p.m.]

In 1996, they came in and I am making reference to remarks made at Page 1004 of Hansard, April 24, 1997, just yesterday and I think it is worth repeating that as indicated by my colleague, the member for Hants West that the Act to which I just made reference, the 1993 Expenditure Control legislation (Interruption) The member for Hants West reminded us that the 1993 legislation lasted one year and then we got to 1995-96 and we find that we have an amendment to this same legislation. What did they do in 1996 to this Expenditure Control Act? Things didn't quite go the way the government had expected, their planning was again off, their calculations were erroneous so they changed things a little bit.

Now we have, for greater certainty, this part and I am referring now to the original Act, for greater certainty this part applies to 1996-97 and subsequent fiscal years of the province. This is the way it reads now under the particular piece of work, "In each and every fiscal year of the Province commencing with 1996-97 fiscal year, the amount appropriated by the Legislature for net capital expenditures and net program operating expenditures shall not exceed the amount of revenue forecast to be received by the Minister for that fiscal year.". A very fundamental change, a change away from amount expended in the year previous to a benchmark which is revenue forecast to be received by the minister for that fiscal year. In other words, as has been already pointed out in this debate, it bears no relationship to the previous fiscal year. There is no relationship at all to cutting back on program expenditures. It simply says that if you have the revenues you can go ahead and expend it.

You remember, of course, the government has always managed to find more than a little bit of revenue because they have the extra money coming in, in spite of what the minister says, from equalization and federal transfers. They received between $500 million and $600 million additional, over and above what they normally would have received under equalization over the past two years. So we had that Act and the amendment to that Act which freed up the fiscal capacity of this particular government to spend as they wished.

In the last fiscal year - before I say that I should reference the fact that it is like déjà vu all over again - I don't propose because it is not appropriate in this context to debate it but we now have a bill before this Legislature in this session whereby that same piece of legislation is to be amended further to provide this present government with even further flexibility and as far as I am concerned, to even make it more difficult for the taxpayers to frankly, keep track of what this government is doing in terms of their fiscal planning and their budgeting.

[Page 1055]

In the last fiscal year, this government over-shot its expenditures by $139 million but there were other Orders in Council and a most interesting one, here is a government that convened us, our first sitting day if memory serves me correctly April 10, 1997, have I got the right date? April 10, 1997. Well, I am complimented from my friend opposite that I at least got that much right. Well, that is a start.

Here we are in the House April 10, 1997. The budget was introduced just a few days ago and downstairs in the Cabinet Room on April 22nd, this government decides to get into some more additional appropriations and move more money around and to move money from the Department of Community Services, Education and Culture, Housing and Municipal Affairs and the Westray Mine Public Inquiry because the Minister of Finance recommends that pursuant to the Finance Act those additional sums be appropriated accordingly and be charged to the current account for the fiscal year ending March 31, 1997. They have lots of Orders in Council with extra appropriations going.

Let's go back for a moment to February 25, 1997. At the Cabinet meeting of February 25, 1997, we find a shift around of all kinds of money out of Agriculture and Marketing, Business and Consumer Services, Fisheries, Human Resources, Labour, Communications Nova Scotia, Technology and Science Secretariat, Transportation and Public Works, Environment, Finance, Housing and Municipal Affairs again, Natural Resources, Nova Scotia Economic Renewal Agency and on it goes.

This government has become past masters at moving money around by way of additional appropriation and, with respect, hardly has exhibited anything close to competence in the management of the affairs of the province. As important, and perhaps most fundamental in the context of where we are these last few days, I want to make a suggestion to you, Mr. Speaker, that I am absolutely confident that there is not a member in this place who has made as many speeches in the course of his time here in this place in support of the Office of the Auditor General than the man who is today the Minister of Finance of the Province of Nova Scotia.

I would bet my last loonie that if we had effective research done of the record of Hansard of this place, we would find that the Honourable William Gillis, the Minister of Finance in the current government, were to be looked at, were to be checked in terms of the things that he has said over his very long and distinguished career here in this place, that that member, today's Liberal Government Minister of Finance, has said more and more often about the need for this place, for the members of this House to respect the integrity of and the directions of and the rulings of and the recommendations of the Office of the Auditor General. Nobody, but nobody, for all the years that that honourable member has been in the House, I believe, could come close to touching him in terms of the number of times that that member has had that to say.

[Page 1056]

That honourable member is to be applauded. That honourable Minister of Finance is to be applauded for standing up so often, so vigorously, so frequently and to speak as he did in such an impassioned way so often in support of the occupant of the Office of the Auditor General. I think I can recall that the present Minister of Finance actually used a phrase or phrases such as the Report of the Auditor General is the gospel by which the government must be bound and phrases of that kind - the gospel. The gospel according to the Auditor General, so said the Minister of Finance when he was on other benches, when he was on the Opposition benches. (Interruption)

Well, I find it strange and I find it, frankly, a little bit hypocritical that we now hear that same minister suggesting that well, maybe the Auditor General's numbers aren't necessarily any more reliable than "our" auditor's numbers, the government's auditor's numbers.

The Auditor General, Mr. Speaker, as you well now, is a servant of this House. The Auditor General is our Auditor General, ours in the sense of all of the 52 men and women who purport to represent the taxpayers of the Province of Nova Scotia, all of us. The Auditor General is the servant of this House. The Auditor General, I won't get into phrases like cooking the books and so on, has had some pretty strong things to say. It is important that it be understood what he did say. He said, in his most recent report tabled here just the other day: [2:44] "Note 1 of the Province's financial statements titled 'Financial Reporting and Accounting Policies', includes a section titled 'Basis of Accounting', which indicates 'these accounts are maintained on an accrual basis, revenues recorded when earned and expenditures recorded when incurred.'".

It is my recollection that the current Minister of Finance has not yet indicated that that is not the policy of this present government. In fact, I think the opposite is true. I think, in fact, if I recall the other day the Minister of Finance indicated, in response to a question, that that, in fact, was the policy of the government.

Basis of Accounting, "These accounts are maintained on an accrual basis, revenues recorded when earned and expenditures recorded when incurred. Revenues from Personal and Corporate Income Taxes, federal transfers, including Equalization, Established Programs Financing, and the Canada Assistance Plan are accrued in the year earned based upon estimates.". The Auditor General went further and he said, "The $50.9 million adjustment is inconsistent with the Province's stated accounting policies, and is" - and these are really important words, important words from the office occupied by the man whose word we were told, in earlier days when he was in Opposition, by the current Minister of Finance, we should take as gospel - "fundamentally wrong from an accounting principles perspective. The capital commitments do not represent expenditures 'incurred' during fiscal 1995-96, and reporting them as such is inappropriate.".

[Page 1057]

I wonder what part of the word inappropriate the government doesn't understand? I wonder what parts of the phrase "is fundamentally wrong" the government doesn't understand? That is our Auditor General telling us that the way in which this government has handled the books of account of the taxpayers of Nova Scotia is fundamentally wrong. What is the response? The response, Mr. Speaker, is, oh well, we have got some other accountants and they think it is quite all right. This is more than just, as a former deputy of mine might say, a squabble amongst monks. It is a slap in the face. It is a kick in teeth to the Office of the Auditor General of the Province of Nova Scotia, led by the man who stood in this place, year after year, railing against the government of which I was a member and, at other times, saying the word and the Report of the Auditor General must be and is gospel. I remember many times that being said.

The Auditor General, in this report tabled in this place the other day, went further. He said, "Further, reporting them" - this $50.9 million adjustment - "as 1995-96 expenditures materially affects the reported results for that year, as well as comparability to other years. As a result, the Province's results of operations for the year ended March 31, 1996 are not presented in accordance with the disclosed basis of accounting, nor are they reported consistently with the preceding year.".

[2:15 p.m.]

Now what other conclusion can any rational person draw from that analysis, from the Office of the Auditor General? The only rational conclusion is that this government made a conscious effort to display the books of account of the Province of Nova Scotia, to disclose the reality of the taxpayers' money in such a way as to attempt to have the taxpayers of Nova Scotia believe that there was a surplus position in the books of account of the Province of Nova Scotia.

The office of the Auditor General, to put it in a nutshell, has caught them out. Now, what do we get in response, now that they have been caught out? We get well that is just the Auditor General, we have our own boys, we have our own accountants.

AN HON. MEMBER: Pretty good ones.

MR. DONAHOE: I am not suggesting at all that they are not pretty good ones. I am suggesting that we are getting that response from a man who stood, year after year, after year, in this House and pleaded with every member in this House to please understand, honourable members, that the gospel - when it comes to the books of account of the Province of Nova Scotia - is the Report of the Auditor General. When it suits his, and his government's, political purpose to say otherwise, he stands up and does just that; he says otherwise.

[Page 1058]

The truth of the matter is that the books of account, as prepared by this Liberal Government, do not reflect the reality of the taxpayers' money. The Auditor General has explained the way in which it should have and could have been displayed. It could have and should have been displayed in such a way as to disclose clearly that, unfortunately, the taxpayers' circumstances are in deficit and not in surplus, and they are in deficit to something in the tune of $49 million.

So, Mr. Speaker, when I see the resolution which is before us and it asks, by that same man who asked me for years and years when I was a member of the Treasury benches, asked me and my colleagues to please pay attention to the Office of the Auditor General, pleaded with us when recommendations were made by the Auditor General that clearly said he, clearly said his colleagues with him, indeed, in latter years when he was joined by the gentleman who now is the Minister of Health and leadership candidate for the Liberal Party of Nova Scotia, Mr. Boudreau, the Minister of Health, he used to stand on these benches on this side of the House and plead with us as well. Indeed, rather than plead, he used to practically stuff the Report of the Auditor General down our throats, suggesting that that was the document that must carry the day.

There were lots of recommendations in the earlier reports of the Office of the Auditor General and many were acted upon and, in some cases, some were not, but in every case the men and women, who now occupy the Treasury benches in this Savage/Boudreau Government across the way, were here on these Opposition benches. They railed at that government and said, you do wrong by the taxpayers of Nova Scotia if you don't do what the Office of the Auditor General tells you to do in his annual report.

If there had not been such a shallow, transparent, politically motivated and deeply disappointing turn of mind exhibited by the current Minister of Finance, I might be tempted to support the resolution he has before us, but it is impossible, frankly, to put any stock now in the credibility of the resolution which is before us when it comes from that same person who in effect is saying - I presume if he is saying today, well, don't worry about the way we disclosed it because the Auditor General says it is really a deficit but we are telling the taxpayers it is a surplus. Don't worry about that because we have some external auditors who say that what we did is really quite okay. Can you imagine, Mr. Speaker, the slippery slope that that starts us down? Can you imagine?

That is, I think, clearly the first salvo in the initiative which is undoubtedly to be taken by this present government to do away with the Office of the Auditor General. Why have it? Why have the Office of the Auditor General if you are going to stand up, read his report, find him saying that it is inappropriate, it is wrong to do what the government is doing in terms of the display and the presentation of the reality of the taxpayers' money and say, well, don't worry about that; we've got other accountants who will tell us otherwise and are telling us otherwise? Well, why have the Office of the Auditor General?

[Page 1059]

The Office of the Auditor General. This same Minister of Finance, Mr. Speaker, you will recall not only would he on repeated occasions stand and rail at the government of the day and invite that government to toe the line as described by the Auditor General; it was that same member who when on Opposition benches would speak frequently to the effect that if the government of which I happened at that time to be a member really had honesty and equity and openness and fairness in mind, we would move in the direction of having an Opposition member become chairman of the Public Accounts Committee. Well, that was done.

I won't go on ad nauseam. Some members might perhaps think I already exceeded that limit. (Interruption) I just heard the good doctor across the way might be sick. Mr. Speaker, you might want to attend to him.

The long and the short of it is, Mr. Speaker, that the resolution before us is just another in a long, unfortunate, embarrassing string of extra appropriations and resolutions required to cover those extra appropriations by a government which comes in one end of the Legislative Chamber with pieces of legislation saying, we are going to set up all these rules about what you can and can't do and what you can spend and what you can't spend and what the spending limits are and so on, and if you exceed them, you have to do this and you have to do that, and then goes through the other end when they receive a copy of perhaps one of if not the most important servant of this House, namely the Auditor General, and tells all members and every taxpayer in the Province of Nova Scotia, don't pay any attention to the Report of the Auditor General because we have some other accountants who have given us some other opinion. How can you have any confidence or faith or trust that this is a government which is willing to deal honestly with the expression and presentation and display of the finances of the taxpayers of the Province of Nova Scotia?

On that account and for those reasons, Mr. Speaker, it is my intention, sadly, to vote against this resolution. Thank you.

MR. SPEAKER: The honourable member for Queens.

MR. JOHN LEEFE: Mr. Speaker, I, too, welcome the opportunity to rise to speak against the resolution which is placed before this House by the honourable Minister of Finance respecting additional appropriations.

Good planning requires that we have some understanding of where we are going and, therefore, lay out our fiscal plans accordingly such that only infrequently should we find ourselves in the position where we have to make significant additional appropriations in order to conduct the affairs of the people of the province.

[Page 1060]

There may, from time to time, be occasions where a single matter of catastrophic proportions descends upon the public, which requires the expenditure of huge amounts of money and, consequently, additional appropriations to cover occurrences which were not foreseen. I anticipate that probably the flooding situation in Manitoba would be one of those situations. We have not, to the best of my recollection, had a flooding situation in Nova Scotia like they have had in Manitoba or, indeed, such as was experienced in Chicoutimi last year and the Saguenay Valley and which clearly must have resulted in that provincial government having to find additional appropriations to meet that natural disaster.

So not having had natural disasters here, one can only assume that the presence of this particular resolution in this Chamber today is evidence, testimony to poor planning on the part of this government, underfunding its budget in order to present as good a face as possible and then once having come to the close of the year, having to admit that, as a consequence of, at best, poor planning, at worst, subterfuge, it is required to make substantial additional appropriations to pay the bill, the bill that this government clearly understood would be forthcoming at the end of the year in the beginning of the year when they first laid out that budget with the phoney numbers.

It is very clear that the Auditor General, for whom I have great respect, not only with respect to his office, but also with respect to his person, having had the opportunity to work very closely with him as Chairman of the Public Accounts Committee over the past four years, has deep concerns relative to the additional appropriations that this government has made and the way in which these appropriations have occurred. We certainly find that enunciated clearly in the Auditor General's Report of the fiscal year ended March 31, 1996, and I have no doubt that the observations made by the Auditor General in the report which he tabled this year will stand next year with respect to these additional appropriations.

I think it is very important that the people of Nova Scotia listen to what the Auditor General has to say with respect to the way with which this government has handled additional appropriations. He notes for the 1995-96 fiscal period, Section 9 of the Expenditure Control Act, required, "A program operating expenditure . . . that exceeds the amounts authorized to be spent pursuant to this Act may only be made after a resolution has been passed by the House of Assembly authorizing the expenditure.".

Reflecting on the law of the land, and that is precisely what I have just quoted, the law of the land, the Auditor General has these observations to make. "The timing of approvals of additional appropriations continues to be a concern.", says the Auditor General of the Province of Nova Scotia, the public watchdog of the public purse. A person who, through him and through his office, is responsible through this House to the people of Nova Scotia to keep a careful and critical eye open with respect to the expenditure of their hard earned tax dollars. Our Auditor General believes the timing of these approvals for these additional appropriations is a cause for concern. If that was the case last year, certainly this is going to

[Page 1061]

be the case this year because, as I will point out in a moment, the additional appropriations for this year I believe are equal to the additional appropriations for last year.

[2:30 p.m.]

The Auditor General goes on to say that last year there were 16 additional appropriations totalling $142 million for the fiscal year ended March 31, 1996. This year, in fact, the situation is not better but, rather, is worse. This year we find the additional appropriations amount to - and this is in the resolution of the Minister of Finance - a total of $139.479 million. A little bit lower this year; just a tiny bit. It is all as a consequence of overspending, we are told, in two departments; the Department of Health at $124 million and change; and the Department of Justice at $15 million and change.

Isn't it curious that all of those other departments seem to have been able to get by without additional appropriations? As of this year, there is an absolutely huge, additional appropriation for the Department of Health.

Let us bear in mind that the Minister of Finance, who defined the budget which was insufficient and therefore required these additional appropriations, is currently the Minister of Health. Bear in mind that once he found himself caught in the snare of the very portfolio he was starving, the Health portfolio, he was able to use his signal influence in this government and in this Cabinet to be able to drain the Department of Finance of another $124 million so that he could begin to patch up the health care system, and coincidentally, I am sure, his drive for the leadership of the Liberal Party of Nova Scotia, through the infusion of these extra dollars of which he had initially starved that department in the first place.

Is it any wonder that the people of Nova Scotia have become deeply cynical with respect to this government, especially with respect to this now Minister of Health, then Minister of Finance? And as he did with the blended sales tax, so too he is now doing with the additional appropriations which we face, hanging the can on the present Minister of Finance who has to stand here and run the risk of blemishing what, before this time, had been, I think, a good record, and try to defend the indefensible. So the former Minister of Finance lays in waste not only his own reputation, but the reputation of he who followed him and who brings this resolution before this House today.

The Auditor General goes on to speak of special warrants in the same context as additional appropriations. He says that in our view additional funding could have been more appropriately dealt with in the estimates of 1996-97, again underlining for us that the estimates were improperly conceived and were brought in low, in my view, in order to cause the government, at first blush, to be able to put in place a budget which they could try to sell as an austere budget, but one which as a consequence of these additional appropriations is seen to be anything but.

[Page 1062]

The Minister of Finance took great pains in laying the blame for additional appropriations not on his government, which has been in power next month for four years, but rather on the government which four years ago was dispatched from office and sent packing in Opposition. I believe that it is the government of the day which bears the responsibility for making up the budget numbers. When those numbers are wrong, then clearly it is the government of the day which must accept the responsibility for gross miscalculation.

This Minister of Finance and his colleagues are fond of pointing back to the period before May 25, 1993, and referring to the government of which I was a part, Mr. Cameron's Government, Mr. Bacon's Government, Mr. Buchanan's Government, as being spendthrifts.

Again I turn to the neutral party in this debate, the Auditor General and his report, again the selfsame report which was laid before this House the other day. It is interesting that the Auditor General, on Page 220 of his report, Section 1715, lays out a schedule of additional appropriations over the last 10 years. In fact, we now can add an 11th year to it because we have the additional appropriation for 1996-97 before the House this afternoon.

Isn't it interesting that the additional appropriation for this year represents approximately a 3.4 per cent overrun of the provincial budget and that last year this government had a 3.4 per cent overexpenditure on its budget? Now it is interesting to look over the past 11 years and to ask ourselves the question, in what years did the greatest overexpenditure occur and the highest additional expropriation have to be made? The Auditor General tells us that it was the government which held power in 1995-96 and in 1996-97, the present government. The present Liberal Government of Nova Scotia has the record over the past 11 years of having the highest additional appropriations - not the former Progressive Conservative Government but this Liberal Government. In fact, there was one year, 1989-90, when the Progressive Conservative Government came close, 3.3 per cent compared to two years at 3.4 per cent with a Liberal Government.

That Progressive Conservative Government in 1992 was 2.7 per cent; in 1991-92, 2 per cent; in 1990-91, 1.9 per cent; 1986-87, 1.2 per cent; and so on. The average for the seven years shown here when the Progressive Conservative Government was in power, the average for additional appropriations during that time was 2.15 per cent. The average percentage of additional appropriation since this government came to power in 1993 has been 2.66 per cent. In other words, to date this Liberal Government's record in comparison with the record of the Progressive Conservative Government from 1986 to 1993 shows a trend to have additional appropriations running at a rate of 24 per cent higher than the Progressive Conservative Government ran.

I think this Minister of Finance and this Liberal Government should bear in mind that when they point one finger at us, they point three more back at themselves. After four years in government it is time for this Liberal Government to come to grips with the fact that by moving to Mr. Speaker's right, they not only have exercised the power of government but

[Page 1063]

they also must exercise the responsibility of government and that the buck stops there. No longer can they foist off the blame for their miscalculation on anybody else. They have been in power too long to be able to do that any longer.

HON. WILLIAM GILLIS: A question, Mr. Speaker. I took the time to look at the page in the Report of the Auditor General where he talks about extra appropriations as a percentage of expenditures. I am not sure he covered both current and capital. It is true that on the list that Auditor General Salmon provided, on Page 220 of the report there is also capital listed there. I do not think the honourable member for Queens mentioned that. I wonder would he admit that under the government of which he was a part, in fact, maybe if you totalled up the expenditures, you would have surpassed our percentage because in one year - 1992-93 - the current was 2.7 per cent and capital was 8.8 per cent, which is far higher than we have, plus it goes back to 1988-89, 2.5 per cent of current and 12.2 per cent of capital.

I wonder if the member does just not see that part of the table. I ask that the member present the whole picture.

MR. LEEFE: I thank the minister for his intervention and of course, the reason I cited the page in the Auditor General's book was so that we would all understand precisely from what I was quoting. What we are dealing with here, of course, is a resolution which deals with current account and not capital additional appropriations. When a resolution is brought forward . . .

HON. WILLIAM GILLIS: Mr. Speaker, on a point of order. There is no difference in our budgeting today, capital and current are all together. Expropriations, additional appropriations, whether they are capital or operating, it does not matter. We budget the same way so I think to compare apples with apples, you have to look at capital and operating in the past, because it is all together today.

MR. SPEAKER: Thank you. I am not sure that that is an actual point of order, but it is a point of clarification and I recognize it in that way.

MR. LEEFE: That is a matter that the minister and I will indeed have the opportunity to debate. I again welcome his intervention. I notice that the capital for last year was $1.5 million in additional appropriations and he is right. In 1992-93 there were high additional appropriations with respect to capital. I would no more deny that than I would deny the observations of the Auditor General in his report.

My friend and colleague . . .

HON. WILLIAM GILLIS: On a further point of privilege, Mr. Speaker. There was no capital included in the extra appropriation. I handed out a sheet to all honourable members

[Page 1064]

and there was $4.285 million of capital in the extra appropriations under Health. I think that should be recognized, Mr. Speaker.

MR. LEEFE: The minister is correct. There is a small $4.2 million part here. That would mean that the overrun in the Department of Health was not $124 million of current account. It was only $120 million on current account. It is important that we understand that. The department did not overspend $124 million on the operating side. It only overspent $120 million. It is good to have that clarified and I thank the minister for that.

The minister again makes good sense when he speaks of the importance of comparing apples to apples, oranges to oranges, and accounts to accounts. That is why it is so difficult for us and for the public, that is, to be able to understand why it is necessary for us to have two accountants for the province's books; one who audits on behalf of the people of Nova Scotia, independently, reporting to the Legislature, that being the Auditor General, and the other accountant who, in fact, is a private accountant hired by the Minister of Finance and his Cabinet colleagues, to make reports to him, as its private client, and then at a later date for the minister to make that private company's report available to the public. So the public then has two accountants expressing views; a private accountant in the contractual employ of the government and a public accountant in the employ of all of the members of the Legislature representing all of the people in their constituencies.

[2:45 p.m.]

How much better it would be and how much greater the public interest would be met if, in fact, the Auditor General were the sole auditor of the Public Accounts of the Province of Nova Scotia. Then, as the minister has said, we could always be assured that we were comparing apples to apples and oranges to oranges.

There is a disarming trend on the part of this government, up to the introduction of the present budget and I accept the present minister's budget because we won't know until the end of next fiscal year how close to the mark he has been on estimating the real cost of offering government services to the people of Nova Scotia so I don't question him in this respect at all. The only measuring stick we have is the year that is closed.

Very clearly, at least and we hope up until and not after this minister brought in his first budget, the numbers have proven to be very soft, indeed, and have resulted in significant additional appropriations. One can only hope that this minister has been successful in understanding the real needs of Nova Scotians, as expressed in the budgetary demands which he now makes of the taxpayers of the province and on their behalf and that he, unlike his predecessor, has got the number right in the beginning, so that at the end of the year his very fine reputation will remain intact when he comes before this House, seeking approval for additional appropriations that have been made, as there may, indeed, be an appropriation at a far lower figure.

[Page 1065]

Indeed, perhaps this minister who is known for his frugality and for his sharp pencil, may be the first minister in a very long time to be able to avoid additional appropriations altogether. If he is successful in doing that, I know that each and every member of this caucus will commend him for it. That, after all, is the reputation he brought to the portfolio, which again causes me to revisit, just before I sit down, the fact that as was the case with the blended sales tax, so is the case with these additional appropriations, this minister, having to risk his reputation, as a consequence of the decisions taken by his predecessor in this portfolio.

You know, Mr. Speaker, with respect to all of this and with respect to the revelation of the Auditor General in his report, relative to the real, current surplus or indebtedness with respect to balanced budgets, I thought it ironic that in the same days that that debate was swirling about us and still swirls about us, we were handed a discussion paper entitled Smoke Free Places, but it is very clear that there is one place which is not going to become smoke-free, that is the Cabinet Room of this Liberal Government of the Province of Nova Scotia, plenty of smoke and plenty of mirrors in that Cabinet Room. I shall not be supporting the resolution before the House. Thank you.

MR. SPEAKER: The honourable Leader of the Official Opposition.

DR. JOHN HAMM: Mr. Speaker, I welcome the opportunity to make a few remarks on the resolution. The resolution is in response to the Expenditure Control Act and subsequent amendments and is a recognition of the fact that government expenditure has, in fact, in these two departments exceeded the 1 per cent leeway that is provided within the legislation.

One of the, perhaps, peculiar things that occurs to me is that we are debating a resolution that relates very clearly to the last fiscal year. I think then, by inference, that the money has already been spent. If you look, Mr. Speaker, at the legislation, and I am looking at Section 9, which deals in part with a program operating expenditure. We have before us, two program operating expenditures, one from the Department of Health and one from the Department of Justice. Section 9 reads, "A program operating expenditure or capital expenditure that exceeds the amounts authorized to be spent pursuant to this Act . . ." - The amount authorized would be the estimate plus 1 per cent. So, obviously, we have gone over that. - "may only be made after a resolution has been passed by the House of Assembly authorizing the expenditure.".

Unless something is going completely by me, it would seem to me that we have not fulfilled the section of the Act, because clearly the money has been spent and we are now here in the next fiscal year authorizing the expenditure, when the Act is very specific in that it says, ". . . the amounts authorized to be spent pursuant to this Act may only be made after a resolution has been passed by the House of Assembly . . .". Where has the Minister of Finance been? Why didn't this resolution come forward at the appropriate time, before the money was

[Page 1066]

spent? Maybe the Minister of Finance can respond to that? He said he would address it in his closing and I will await his explanation with some degree of anticipation.

I think that opens up a very interesting observation of the government, a government that was very determined to put some real restrictions on the finances of the province, at least that was their verbalization of their approach. But every step along the way, they seem to be breaking their own rules and we will have more to say about that in the course of the discussion here this afternoon. Is it any wonder why when the citizenry of the province, of course, is being regulated to an extent that has never before occurred in the province and people are being required to comply with and be in accord with and to follow many regulations that are set by government? Government tends to be rather restrictive in its interpretation of its own rules, particularly as they apply to others, and very stringent in enforcing these things. As proven, and I think as the cynicism, when it doesn't use that same zeal itself in following those sections of the law that apply to the activities of government and this is just one of them.

Why are we here after the fiscal year 1996-97 doing an appropriation for 1996-97 when the section of the Act clearly said that the money could not be spent until after the resolution was debated in the House and passed. So, once again, the government has set up that double standard that it doesn't have to comply with the rules and the laws of the province but others do.

So we are doing another sort of after-the-fact discussion. So what does that do to the credibility of the discussion? Does that mean we can stand here and debate it and convince government, no, you shouldn't spend that money? That no, that perhaps is not the way the money should be spent it should be spent this way? Absolutely tying the hands of anyone in this Legislature to make a meaningful contribution to what is going on in this province through debate in this place, once again denigrating the activities of this place.

I only bring it up because obviously, we can't turn back the clock but I would hope in the future that future governments, in interpreting this piece of legislation which has a lot really to commend it and I am not trying to indicate to government that I don't think the intent of the legislation that they brought forward is wrong, but on the other hand, they should be able to interpret and follow the direction that the legislation indicates to them. Now we are doing an after-the-fact debate of a resolution about some very significant expenditures.

The two departments, Health and Justice, two of the most important departments in government, in my mind. I look at the appropriation of funds in Justice and look at an additional provision for claims by victims. I would say to government that that was a very difficult one to estimate. I watched when the Minister of Justice was wrestling with that problem and a problem it certainly way in terms of coming up with a reasonable estimate of what those packages would cost his department. I am not prepared to be critical of that particular estimating error but when you get on to Health.

[Page 1067]

We just went through an exercise in which the minister got up and said, these are the Estimates of the Province of Nova Scotia for the fiscal year 1997-98. We are going to give you a balanced budget on the basis of these estimates. Well, that is fine if you know how to estimate but you know when you get up to an error of the magnitude in one department of $124 million, bearing in mind we already have had that area of reasonable error of 1 per cent. So what we are talking about is the estimates, an error of 1 per cent and then $124 million on top of all of that. That is not very good and it is not good enough.

What comfort does that give to Nova Scotians when the government said, we estimate that we are going to have a balanced budget in 1997-98 and oh, by way, we did make an error of $124 million in estimating the cost of health care delivery in 1996-97? I would suggest that we look at the Estimates of the Province of Nova Scotia with that in mind.

The interesting thing is, Health is a very important department in this government and there are many who would suggest that the Ministry of Health perhaps provides the single most important service to many, many citizens, certainly to senior citizens it does. The provision of a first-class medical health care delivery system in this province is one of the things that makes us, as Nova Scotians and us, as Canadians, unique. Most other parts of the world don't have anything that even comes within a country mile of the kind of protection that that program gives us.

When this government took office in 1993 not officially on May 26th, that was the day after the election, there was a little bit of legal work, they had to be sworn in and so on but effectively, they have been in control since May 26, 1993. They very quickly undertook a revision, a reform of our health care delivery system and the idea being is that by most evaluations it was considered to be adequate, that people were receiving a reasonable level of care, it was reasonably accessible, there were a reasonable number of professionals delivering that care. There had been built, by the previous government, a number of first-class institutions.

[3:00 p.m.]

The decision was made that we are going to reform it. The basis on which that decision was made was sound because I think it was felt that a reform process could, in some way, provide a better system. I am talking about a delivery system. I believe wholeheartedly in a home care system. I believe that we were too dependent on institutional care. I, too, believe that we didn't emphasize wellness enough. We, as Nova Scotians, are not as healthy as we should be and there is no doubt that an ounce of prevention is worth at least a pound of cure. I think we needed added emphasis on that part of our health care delivery system.

What did we get? We got a home care system that fell far short and was far to the rear of the rapid disappearance of acute care beds. Over 30 per cent of the beds in this province have disappeared. So we lost 30 per cent of our hospital beds, so that automatically meant

[Page 1068]

that we had to upgrade our home care system because, despite what the Minister of Health would have you believe, we had a very satisfactory home care system in place in 1993 when the government took office. The demands on that system have increased dramatically because of the loss of acute care facilities and the attempt to replace those services with a Home Care Program. The coordination of the loss of beds with the growth of the Home Care Program has received enough criticism over the last few days and I won't belabour it.

What happened with reform? Well, thousands of health care workers have been laid off, Madam Speaker. Hundreds of doctors have left the province. The figures are, in 1993, 1994 and 1995, 145 doctors left this province. We have not yet had the figures for 1996 or 1997, but, with 145 the first three years and some numbers that are still unconfirmed for 1996 and 1997, then hundreds is the proper term. Hundreds of doctors have left since this government took power. That leads to the question, how many have come here? Well, not enough that everybody has a doctor because we still have, in many communities in this province, people walking around with their medical charts under their arm with no family physician. (Interruption)

I don't know. Is this fearmongering? Well, I don't know how you can make anyone more fearful about health care when they have got their chart under their arm and they cannot access a physician. How can I make them any more fearful than they are now? The minister says, are you fearmongering? The minister has his head in the sand. That is what the problem is.

What has happened in health care? Health care workers have, as others who are paid by the province, including myself, have had a 3 per cent roll-back. The first year they had a furlough. Remember the furlough and everybody had to take a few days off? Then, of course, we had the three year wage roll-back and that will be over the last day of October of this year. So there are fewer health care workers and they are making less money. We have fewer beds. Care is less accessible and not only do we have fewer beds, we have fewer hospitals. Madam Speaker, I know there was not a hospital to close in your community, but hospitals have closed. You go into the hospitals today and with the shutdowns of beds, if it is one of the hospitals that was not closed, then, of course, there are empty wards, empty rooms and so on because the beds were closed.

You would have thought, Madam Speaker, that with a well-thought-out health care reform system, that since 1993 this government would have developed a system that provided a reasonable level of care at less cost, because all sorts of cost-cutting measures have been initiated, care is not available, so you would think at least we would have gotten something for our money, or at least for our misery we would have gotten something.

The facts of the case are absolutely, in my mind, astounding. We have ripped and torn the health care system of this province apart. Thousands of Nova Scotians are complaining to government, by way of petitions and letters and phone calls, that health care is not as good

[Page 1069]

as it used to be. The strange thing is, the actual expenditure on health care in this province in 1993-94 - and I know that the member for Hants East is eagerly awaiting these numbers - the expenditure in 1993-94 in this province is $1.273 billion.

Now the estimates here in this book, health care this year, 30 per cent of hospital beds gone, less easy access to less care, thousands of health care workers laid off, health care workers with a 3 per cent roll-back, and we are going to spend $1.286 billion in health care; $9 million more than we spent in 1993. We have ripped and torn this health care system apart in an attempt to provide a more economical delivery of health care, we have ruined the system, and we are paying more money for it. Those are the figures; they are in your books; they are in the estimates; they are available for anyone.

Now it is very interesting. (Interruptions) The important point to be made here is that until this government recognizes the fact that health care reform is a mess, that it is off the rails, and makes a legitimate attempt to improve it, then we have gone through all this pain and misery of health care reform without a single benefit. You know we could have left the health care system alone and we would have been better off financially in this province than we are today. (Interruption)

Now the member for Dartmouth North is suggesting that this is shameful. Is the member for Dartmouth North prepared to get up and indicate that we are not spending more for less in 1997-98 than we did in 1993-94? Those are the figures, that we are spending more for less. (Interruptions)

MADAM SPEAKER: Order, please. The honourable member has the floor and I am hearing a lot from this side and that side, and I have called for order.

DR. HAMM: Thank you, Madam Speaker.

MR. ROBERT CARRUTHERS: Madam Speaker, a question. I have listened with interest to the Leader of the Official Opposition, and it is always a great concern when we see costs and the costs of the health care system in some areas. The numbers that I looked at that were important, I saw that in this past year there have been significantly more medical procedures done; in other words, more people have been treated by this health care system than ever before, in quite significantly larger amounts.

Would you believe that when you couple that with home care, that indeed there have been more health services put out in this province in the last year than the year before, considering those numbers?

[Page 1070]

DR. HAMM: Unless the member is prepared to table the numbers that he is talking about - for example, we talk about in 1973 and I am drawing back now, perhaps the number was 7,000 people were accessing home care and it is now going to 20,000. In 1993, I am sorry. When you are as old as I am, a couple of decades does not make a difference.

The point on home care is this. Naturally, there are more people requiring home care services. That only stands to reason. What you fail to realize is that if there are 20,000 Nova Scotians who will access home care this year, some will access it for a long period of time, some for three or four days. In other words, an early exit from hospital might mean three or four days of hospital home care. It does not necessarily mean that everybody is going to be there for the year. So that number goes up (Interruptions)

The point is, you are saying services. The patient goes in and is hospitalized. That is one service. Under the old system, they would have stayed in the hospital until they were ready to go home and be looked after by their family. Under this system, they go into the hospital and they have a service, be it an operation or a short stay for a medical illness. Then they go home and they have home care for two or three days. That is two services. So naturally there are going to be more services. (Interruptions)

Read your figures. (Interruptions)

MADAM SPEAKER: Order, please.

DR. HAMM: Now I cannot, nor can this government, undo what has been done to health care, but if the Opposition were to achieve one thing by way of debate, it is to convince government that the direction in which it is moving has not resulted in any savings to the province. As a matter of fact, we are going to spend $8 million more. We are spending it for less. The reason we are spending it for less is the whole medical care reform system has been driven by administrative change and there has been no measure of the delivery of care. There has not been enough community involvement. There has not been enough involvement by health care deliverers in the planning of the system. That is why we are in the mess we are in today.

Now, I had made some comments earlier about the government following its own practices and guidelines. The Auditor General in terms of dealing with the expenditures of the province, which have been inappropriately reported by the government, I think served a very useful service. By having somebody at arm's length make observations on the way that government handles its business, its financial affairs, has resulted in a great service to the people of Nova Scotia. Those of us who make political comment on the activities of the government have far less credibility than the Auditor General, particularly when it comes to assessing the financial performance of the government.

[Page 1071]

This government has for the last three years indicated to the people of Nova Scotia that a balanced budget was in fact the direction in which they were intending to go. I have never ever on a single occasion criticized the government in that particular regard.

How does the government report? What is the responsibility of the Minister of Finance in all of this? Well, the Minister of Finance among other things has a responsibility to provide the people of the province with an accurate accounting of the financial affairs of the province. The Minister of Finance must realize that very few people in this province have a chartered accountancy background or a bookkeeping background. We are all pretty simple people. Perhaps the best way we can understand the affairs of the province is if they are presented to us the way we look after our own personal affairs. In other words, we have expenditures and we have income and we try to balance them out in any current fiscal year.

[3:15 p.m.]

We had the situation this year when the government surprised themselves - or would like to think that they surprised themselves - when they finally came in with the forecast for 1996-97 and indicated a surplus. That is good; a surplus is good. But did we have a surplus? The Auditor General a week later said we didn't have a surplus.

AN HON. MEMBER: Would he purposely mislead us?

DR. HAMM: Well, let's look. This is pretty simple stuff. It is written so that even I can understand it. "Note 1 of the Province's financial statements titled 'Financial Reporting and Accounting Policies . . .'", this is how you report your finances and how you do your bookkeeping, ". . . includes a section titled 'Basis of Accounting'" - well, that is pretty understandable - "which indicates 'the accounts are maintained on an accrual basis' . . .". Well, most of us do our bookkeeping on an accrual basis because if you don't, it gets pretty complicated. All that means, the accrual basis, is "'. . . revenues, recorded when earned and expenditures recorded when incurred.'". That is pretty simple.

If the government had followed its own accounting policy, what would the Minister of Finance have said in his Budget Address? Would he have come in here and said, for the year 1996-97 we have a $2 million surplus? Remember when he announced that in the House the members on the government benches pounded their desks and clapped their hands and whistled encouragement to the Minister of Finance and they patted themselves on the back - all at the same time; they were extremely busy.

Was that the accrual method of accounting? Were the revenues reported? We find out from the Auditor General, who reads how it should be done - he knows how it should be done because he's got the book. He said, no, what you did, there was some money that you reported in the year before, 1995-96, when you reported a $2 million deficit, it should only be $150 million, because you didn't spend that money until the next year. You have $50

[Page 1072]

million that you moved forward to allow you to say - try that with Revenue Canada sometime. Decide, well, it would be better if I didn't report this income this year; I will report it next year because it is going to look better. Maybe I won't have as much and I won't have to pay as many taxes. Try that one sometime.

I heard a funny comment and I am sure the Minister of Finance will enjoy the remark. It is not cruel. I was listening to the CBC in my car and someone made the comment, well, I'd like Bill Gillis to do my income tax; certainly he'd do a much better job than my accountant.

What did the Auditor General think about this new method of bookkeeping? He didn't think much of it. What he said is, "The $50.9 million adjustment is inconsistent . . ." - that is the first word, the key word, inconsistent - ". . . with the Province's stated accounting policies . . .". We just went over those in Note 1. Here is the next point. He goes on to say, ". . . and is fundamentally wrong . . .". You know those aren't hard words to understand.

He goes on to say, "The capital commitments do not represent expenditures 'incurred' during fiscal 1995-96, and reporting them as such is inappropriate.". That is just so straightforward that it is absolutely mind-boggling that the province could think for a single moment that they could come up and convince anyone who is used to handling their own personal affairs that this makes any sense and that this is a fair presentation to the people of the province of the financial statements of 1995-96 or 1996-97. This is a bookkeeping trick, a shell game, you are just trying really quickly, you just really don't know under which shell the pea is hiding.

If we could go on with this kind of creative bookkeeping and we could change the rules every time we present the financial picture of the province, goodness knows what kind of a record government could create for itself.

MR. ROBERT CARRUTHERS: Madam Speaker, on a point of order. Sometime earlier during a question the honourable Leader of the Opposition asked me if I would table any document that verified the numbers I was referring to or at least identify the numbers I was referring to. I have circulated this House briefing note on the hospital bed closures. There is a contact person here. Now these procedures that are being talked about are not making a difference between someone who is in the hospital and then went home and therefore doubled the procedures. The procedures outlined here are like knee replacements, hip replacements, cataract extractions. These are not procedures that you do once in the hospital and then you go home and count it as two, these are very significant numbers. I just wanted these numbers to be tabled and to be helpful to the Leader of the Opposition because I know he wouldn't want to proceed under any false assumptions.

[Page 1073]

MADAM SPEAKER: That is not a point of order but it is a point of information.

DR. HAMM: Madam Speaker, I do appreciate the member for Hants East for providing some additional information. He points out quite correctly and I think in fairness, there is an increase in hip replacements, cataract extractions, knee replacements.

The question you have to ask yourself is was it not possible within the health care system with a $1.3 billion budget to accommodate some 400 additional knee replacements, some 100 hip replacements and 1,300 cataract extractions without ripping and tearing the health care system of this province in two, without driving out over 200 of the very best physicians that we had, without laying off thousands of health care workers? The question remains to be answered. Could this not have been done in a reasonable fashion, in a step-wise fashion, following a well-orchestrated plan that was in place from day one? Could we not have had a much better result than we end up with here today? I don't deny and I thank the member for tabling the fact that there are these procedures being done increasingly.

What does this Report of the Auditor General do for us and I wasn't here in earlier days when the Minister of Finance may have even occupied the chair that I have, I'm not sure where he sat and I have listened to my colleagues describe the Minister of Finance as a very aggressive member of the Opposition and a very harsh critic of the finances of the province when they were under the custodianship of the previous government. But it does distress me when I hear that many of the observations and criticisms that he directed to the former government he is now prepared to deflect on crossing the floor and occupying the seat of the Minister of Finance.

The Minister of Finance really doesn't bear all the responsibility because he really jumped into the financial portfolio when many of these initiatives were, in fact, already determined. In other words, he didn't put together the 1995-96 reports of the province. He has been in the portfolio less than a year so I think there are others that bear a lot of the responsibility for this kind of reporting.

Now where does all this leave us? Well, it leaves us with an Expenditure Control Act that allows us to look over the resolution of the additional expenditure in Health and Justice. I think I have made my points clear on Health. I have indicated that I have considerably more empathy for the Minister of Justice in his attempt, because of the particular situation that faced his department when he was minister, in terms of coming up with a reasonable estimate. I think the fact remains, Madam Speaker, that this kind of reporting and this failure of the Department of Finance to follow its own guidelines, its own policies, is absolutely unacceptable.

If the people of the province can't be assured that the accounting from year to year is the same and that the expenditures and the revenues are, in fact, those that occurred that year and are an exact measure of the financial performance of the government that year, then

[Page 1074]

is it any wonder why there is so much cynicism out there on the activities of government? This is a fundamental mistake that this government has made in blowing its horn before, in fact, it had achieved what it indicated it wanted to achieve, that being a balanced budget.

The people of the province deserve an explanation as to why this kind of trickery has been foisted upon them. The people of the province are not chartered accountants, they are not bookkeepers. They deserve a legitimate explanation of the finances of the province that is produced for them by this Minister of Finance and he has failed to do so.

MADAM SPEAKER: The honourable Minister of Health.

HON. BERNARD BOUDREAU: Madam Speaker, I welcome the opportunity, however brief, to address the resolution which is now before the House. It has drawn great comment from the Opposition and much of that comment has been directed not at the resolution itself but, rather, at the fiscal year out of which the resolution arises. There is nothing wrong with that, that is legitimate comment, that is legitimate debate. So I rise to perhaps add some balance to that debate which has occurred to date.

Madam Speaker, the Opposition, as you may have noticed over the last couple of days, has launched into what can only be referred to as a feeding frenzy over the Auditor General's comments.

[3:30 p.m.]

I think before the public or anyone should make any conclusions on this, we should know a little bit about the background and I just want to take a moment to talk a little bit about the background. The issue, really, for the Auditor General, in his comments, was where $50 million of capital spending should be placed. Now, it wasn't hidden. There was no attempt to do anything untoward, behind closed doors. This issue was out front and it has been out front for more than one year. The Auditor General has been aware of it for that period of time, but he has a difference of opinion with the auditors of the province. Now I have to stress that. He has a difference of opinion with the auditors of the province, not with the Minister of Finance, not with the Cabinet, not with the government, with the auditors for the Province of Nova Scotia. They have a difference of opinion.

How did we come to this point where the difference of opinion occurred? Well, it was very interesting. For years, in the Province of Nova Scotia, when one calculated deficits, one took not only the operating expenses, but added in the capital expenses because, after all, a dollar is a dollar is a dollar. If you spend it or if you borrow it, it is still the same amount of money. So in the history of Nova Scotia, the capital expenses and the operating expenses were lumped together and dealt with every year in the budget. However, when the Conservative Government came along, they didn't like this approach, and the reason they

[Page 1075]

didn't like this approach was because it yielded huge deficits and they didn't want to tell the public about these huge deficits, so they had a plan.

The plan of the former government was very simple. They would create a new definition of deficit and the reason they did that, of course, was to reduce what was actually going on for the last 15 years in this province. So they took capital out of the picture all together. They said, no, no, the deficit, from now on, will just involve operating capital. So we will not even talk about the capital used to build hospitals, roads and all of those other things. We will not count that at all. So when they talked deficit over the year, they were just talking current account deficit. They were ignoring capital.

One of the results of them being able to ignore capital - and I cannot understand how, for years and years in this province, no one, including, I might add, the Auditor General, that I recall - ever said, what are you trying to do, telling us what the deficit is and not including capital spending? One of the results was that they used to do two year planning in capital spending. They did a two year budget in capital spending. Of course, if you were not counting the capital spending in your annual deficit, who cares whether it was two years, three years, a ten year budget. It would not make any difference because you were not counting it anyway.

When this government came in, we said, uh uh, no, we want to count everything. Now the result of that decision of wanting to count everything meant, Madam Speaker, that we had to break up a two year capital budget, because that is the way it was always done. We could not do it that way anymore. We wanted to do it year by year and count all of the expenses. So we had to make that decision. We talked to the Auditor General about it and he knew we had to make this decision. It is not a decision that he disagreed with. He said, yes, you obviously have to write that up. You cannot have a two year capital budget now that you are counting everything. Our auditor said, yes, you have to break it up. So we did break it up. We took a two year capital budget, we cut it and we put some of it in one year and we put some of it in another year.

That didn't seem to be a terrible thing, certainly, nothing that we would do behind closed doors. In doing that, Madam Speaker, we ran into a difference of opinion. The auditor for the Province of Nova Scotia said that the way that this is being proposed is entirely appropriate. The Auditor General, subsequently, I might add - not at the time, that I recall - said, no, I disagree, that is not the way to do it. You should not put it in this year. You should put it in that year. Okay. It is my suggestion there is absolutely nothing wrong with a government following the advice of its auditor.

MR. ROBERT CHISHOLM: On a point of order, Madam Speaker. I was interested to hear what the former Minister of Finance had to say there with respect to the Auditor General. I think it is fairly crucial with respect to his explanation. I wonder if he would clarify what he just said about the fact that the Auditor General said one thing at one point and said

[Page 1076]

another at another time; in other words, he is suggesting that the Auditor General changed his tune. He sort of approved of this splitting and said everything is okay, and then, when he dropped the report on the table here this week, he, in fact, changed his tune. I would like to get that clarified because I think, in fact, it impinges upon the reputation of the Auditor General.

MADAM SPEAKER: It is not a point of order.

DR. JOHN HAMM: On a point of order, Madam Speaker. I hope the minister was not confused by my remarks. He seems to be responding to the fact that I made criticism of the (Interruption) Well, you won't know until I am finished.

MADAM SPEAKER: I can't make a judgment on a point of order until the speaker is finished. So the number of members who keep interjecting that this is not a point of order, would you please let me hear it and then I will make a ruling on it.

DR. HAMM: Madam Speaker, I am rising on the point that the minister seems to be debating the point that I made that the Auditor General was insistent that the Minister of Finance follow his own particular policies in terms of accounting and reporting. The former Minister of Finance, responsible for the 1995-96 budget and the 1996-97 budget, was making comments about the accounting practices of a previous government. But he didn't make the point, and I think perhaps in fairness he should, were they or were they not following their own accounting practices when they were separating the operating and the capital account. Because I think therein lies the point. If those were the accounting practices and policies of the day, was the government following them correctly or not?

MADAM SPEAKER: It is an interesting point but I don't think it is a point of order.

MR. BOUDREAU: Madam Speaker, there are two issues I want to address arising from those interventions. One, the honourable Leader of the Third Party again represents something I didn't say. Clearly in Hansard he is suggesting that I indicated that somehow the Auditor General changed his view, that he gave us one view at one time and another view at another time. I didn't even come close to saying that.

What I said is that we had one view from our auditor, the auditor of the province, and a second view from the Auditor General which is obviously different. But in turn let me reply to the Leader of the Opposition. They followed the previous government - of which many of the associates are still sitting with the honourable Leader of the Opposition - that accounting policy. It was quite unique in the country, I would suggest. It was designed primarily, in my view, to disguise the size of the deficits they were running up. It certainly wasn't an approach that Robert Stanfield used when he was in office, not a bit of it. It wasn't an approach that Premier Regan and Peter Nicholson used when they were in office. It was an approach

[Page 1077]

invented by the Buchanan Government to cover their tracks. But that is not the main point I want to address anyway.

The main point I want to address is that what we have here is a measure that had to take place in order to bring accountability to the budget process. This was done with full knowledge, in the open, to bring accountability so that every year everything would be accounted for, capital and operating. We did it on the advice and with the approval of our auditors, the provincial auditors.

When we get into the silliness and you hear the Opposition using phrases like cook the books, or using trickery, you notice they are not suggesting - I don't think they are suggesting - that an international accounting firm is cooking the books. If they are suggesting that, I would suggest they go outside and suggest it in the corridor where they don't have the protection of immunity. But no, they are saying the government is cooking the books. Indeed, we have an internationally reputed accounting firm who just happen to be the auditors of our province indicating that what we are doing is appropriate. If they are going to attack, they cannot attack without facing that opinion. Of course, they have not. They have engaged in all sorts of rhetoric about trickery and cooking books, and all the rest of it.

Show me where they will say, yes, your auditors in that opinion they gave you, they are involved in cooking your books; this internationally reputed accounting firm, somehow to assist us in misleading someone. That is absolutely ridiculous and they know it and they will not say it outside of this Assembly. (Interruptions) The Auditor General has a different view.

AN HON. MEMBER: He says it distorts.

MR. BOUDREAU: He is entitled to his different view. I will put the view of the internationally reputed accounting firm against the Auditor General on any accounting question at any time, Madam Speaker. They are our accountants and our auditors.

MR. ROBERT CHISHOLM: Madam Speaker, on a point of order. If the former Minister of Finance is going to stand in this House and say that the Auditor General is not worth having in this province, when they can pay and have their own internationally renowned accounting firm, then why don't they just go out and fire the Auditor General? Why are they wasting the taxpayers' money on two auditors, if he is going to speak in that way about the Auditor General of the Province of Nova Scotia?

MADAM SPEAKER: I would like to rule on the point of order. It is not a point of order.

[Page 1078]

MR. BOUDREAU: Once again, the honourable Leader of the Third Party leaps in to attack a statement that nobody made. The auditors of this province, by the way, have served since, I think, about 1920 or 1930, something in that range. They have served successive governments, including Conservative Governments in this province who continually express confidence in that firm.

We have an Auditor General who has a different opinion. I do not begrudge him that opinion. He is entitled to it, but we are entitled to follow the opinion of our auditors. I will tell you how silly it gets when politicians across the way in the Opposition start giving accounting opinions. It goes beyond what the Auditor General's opinion might be. Let me give you one little illustration, if I can do it over the shouting of the Leader of the Third Party.

If, Madam Speaker, I can retain the floor for a moment, I would like to just illustrate how silly this can get.

MADAM SPEAKER: Order, please.

MR. ROBERT CHISHOLM: On a point of order, Madam Speaker. The minister has the nerve to stand in his place and call the members of the Opposition silly because they are raising questions about the books of this province. Why do we have an estimates debate or Supply debate if it is not part of our job to examine and hold this government accountable for the books of the province of Nova Scotia?

MADAM SPEAKER: Again this is not a point of order.

MR. BOUDREAU: The third time, Madam Speaker, he rises to attack something that no one said. They are perfectly at liberty and they should indeed examine the books of the Province of Nova Scotia. That is what estimates is all about. I think where they get silly is when they start talking about cooking the books, trickery, all the sort of rhetoric that we have heard around this House in the last couple of days.

Let me illustrate this one simple point. Let me give you an example. The Opposition, and let me take the Official Opposition, they have come forward and they have said we like the Auditor General's opinion, so let's take $50 million out of 1995-96 and put it in 1996-97 because that is where we think it should be. We like the Auditor General's view on that. Now they are disagreeing with our auditors here, but that is fine. That is what they want us to do. However, at the same time and in this House and in this session they have said, we object to this practice of putting aside reserves for future liabilities. As a matter of fact we had a terrible argument about that last session. They have again, in their response to the budget, taken on the reserves that the minister has quite prudently put aside in that 1996-97 year. I will tell you, those reserves were $39 million in Health, $15 million in Education, $15 million in Justice, for a total of $69 million. Those are reserves in the 1996-97 budget year.

[Page 1079]

[3:45 p.m.]

They object to them; they don't think that is legitimate accounting practice. They say they should not be there. Madam Speaker, they have said that this session. So let's agree with them for a moment and see what happens. We agree with them that the $50 million of capital should go into 1996-97 and we also agree with them that the $69 million of reserves should come out of 1996-97. That leaves us with a net decrease in expenses of $19 million, in fact makes the surplus not $4.7 million but $23.7 million, if we listen to them. (Applause) That is why it gets silly when Opposition politicians attempt to cherry-pick and give accounting opinions.

There is a legitimate difference of opinion here between the Auditor General and our auditors. We are entitled to follow the direction of our auditors, they are an internationally reputable firm, we have done that.

Now where does this leave the public? They are out there trying to figure out what is going on. They are trying to figure out what happened in 1996-97 and they are confused. I don't blame them; especially if they have been listening to the rhetoric of the Opposition, they are bound to be confused. (Interruptions) Well, there is one simple test and I would recommend this test to all of the people of this province; if they want to look at 1996-97 and find out what happened, ask one simple question and I think you will get the right answer. Don't ask what is the accounting definition of a deficit, what criteria should be used in placing capital spending in one year or another? Don't bother with any of that, that is all technical stuff and we have the opinion of auditors. How much money did we borrow in 1996-97 to run government? The answer, not one cent. (Applause) For the first time in over 20 years, Madam Speaker, the province . . .

DR. JOHN HAMM: On a point of order, Madam Speaker. The former Minister of Finance has an excellent handle on the finances of the province (Applause) and he just said that we didn't have to borrow any money for 1996-97 because he borrowed $50 million in 1995-96 and put it on the 1996-97 budget. Absolutely true. What he did, we had a $200 million deficit, as reported, because you moved $50 million forward. The money was borrowed to cover that. You borrowed the money the year before, so the money was borrowed.

MADAM SPEAKER: I will make a ruling on the point of order. It is an interesting point but it is not a point of order.

MR. BOUDREAU: Madam Speaker, I recommend again to the public of Nova Scotia one simple test; did we borrow any money to run the government, in 1996-97? Never mind accruals and all those sorts of accounting concepts because in one area we have different opinions about that. Did we borrow any money in 1996-97 to run government? The answer is no, that's it. By the way, we won't borrow any money in 1997-98 to run government and

[Page 1080]

we won't borrow any money in the years after and, hopefully, never again will any government in this province have to borrow money to run the day-to-day operations. (Applause)

If you want another test of it, and I still recommend the test that is most simple; did we borrow to run government? There is another test that is almost as simple; what happened to the net direct debt of the province for 1996-97? We know what has been happening to it for 15 years, year after year, every year up, what happened to the net direct debt of Nova Scotia in 1996-97, the year that they are making such a big fuss about? Let me tell you, Madam Speaker, the debt went down, for the first time. (Applause)

These are straightforward tests. The rest of it, we can get caught in all sorts of silly arguments. But, I will tell you, Madam Speaker, very clearly, two simple questions. Did we borrow any money to run government? No. Where did the debt go, up or down? It went down. That is it. (Interruptions)

Madam Speaker, the honourable Leader of the Third Party has risen, I think, three times in my address on points of order. He rose a moment ago on what can only be described as a point of departure. (Laughter)

What bothers me a little bit about this whole debate, Madam Speaker, and it does bother me a little bit - the international investment community is not going to be fooled by these arguments of the Opposition. They know what the story is. If anyone has any doubt, just watch what happens when the rating agencies respond to this budget, if they have any doubt at all. So the investment community is not going to get taken up by the silliness we have heard from the Opposition. The business community knows better. The people, I think, who may be misled are all of those Nova Scotians who have sacrificed with us over the past four years to reach this important, critical turning point. In some ways, they may feel that their sacrifices have not yielded the result that we have indicated. That is where I feel the shame of it and the regret that this type of debate would have taken place.

It is not going to fool the investors. It is not going to fool the business community, but it may discourage some of the people who have made these sacrifices over the last four years. So let me speak directly to those people and ask once again the simple questions. Did we borrow money that year to run government? No. Did the debt go up or down? It went down. I think that will be the full answer for anyone who troubles themselves to ask the question.

I would say just in closing, Madam Speaker, that if we had a situation in the 15 years that the previous government occupied office, if we had a achieved the same result in those 15 years, in each of them, that this government has achieved in 1996-97, the year over which they have such terrible anguish, if they had achieved that result in each one of the 15 years, do you know what would happen? Those were good years, too, you might remember. The

[Page 1081]

economy and the revenue of the province were doing well. If they had done what occurred in 1996-97, if they had done in each one of those 15 years the performance that they are so disparaging now and, in fact, if we had run the province without borrowing money, we would have an extra $1 billion to spend every single year. (Applause) Can you imagine?

In this very debate we are up here talking about debating additional appropriations - and we have had to watch every penny, Madam Speaker. We worried about, well, if we took this measure, could we afford the other measure? We have watched and we have agonized and the people of Nova Scotia have agonized with us through every one of those measures. What priorities must we set? When we talk about additional appropriation, how much money can we put aside for victims of abuse in any given year? How much money can we afford to add back to our hospitals? What can we afford to do in rural Nova Scotia to ensure medical services are available?

All of those decisions were difficult. Can you imagine that we would be here today debating additional appropriations if we had an extra $1 billion a year of revenue? - and it isn't just one year, it would be every year - Put your mind to that for a moment. Where would we spend that extra $1 billion? How much of the $1 billion would go to Health? I don't know, what, $300 million, $400 million more in Health? Maybe. How much would be used on roads? Would we have used another $100 million on roads? Can you picture how many rural roads in Nova Scotia would be paved if we could spend an extra $1 billion?

AN HON. MEMBER: Brooke could turn to be a Liberal.

MR. BOUDREAU: Indeed, some of the rural members of the Opposition might well cross the floor if we could promise an extra $100 million.

DR. JOHN HAMM: Madam Speaker, on a point of order. I wonder if the Minister of Health would indicate how many times, when he was in Opposition, did he encourage the government to spend less? How many?

MADAM SPEAKER: I will rule on this point of order. It is a question in the guise of a point of order. It is not a point of order.

MR. BOUDREAU: Madam Speaker, there you have it, it was our fault.

AN HON. MEMBER: The Opposition did it.

MR. BOUDREAU: For 15 years it was the Opposition's fault. If only we had whispered in John Buchanan's ear, we would have set things right instantly.

[Page 1082]

I don't know about other people but I can remember the current Minister of Finance, day after day after day, trying to bring some fiscal sense to the runaway regime of the Buchanan-Cameron years. Day after day, Bill Gillis was the sane voice, but you know what? They weren't interested in listening to him because, when they were in government, the thought of a balanced budget didn't even cross their minds, not for a moment, not even a flicker of thought.

So, again, I ask the public of Nova Scotia, those who aren't chartered accountants, ask the simple questions, you will get the real answers and you will know what the Opposition is up to. Thank you. (Applause)

MADAM SPEAKER: Honourable minister, were you adjourning debate?

MR. BOUDREAU: No, I wasn't.

MADAM SPEAKER: The honourable member for Kings West.

MR. GEORGE MOODY: Madam Speaker, I was wondering if you were ever going to look this way, you were so taken with the Minister of Health.

I am pleased to rise to speak on this resolution. The Minister of Health asked, why is there confusion? I will tell you why there is confusion, because what public will believe a government that promised no new taxes and did they deliver? No, they did not. Did they promise no casinos and did they deliver? No, they did not. They promised more jobs and did they deliver? No, they did not. They said the BST was going to give back money and it didn't. How in the world can you believe a government that has that kind of a record?

MADAM SPEAKER: Honourable member, I wonder if you would adjourn the debate because we have to go back to the order paper for a member's resolution?

MR. MOODY: I was just getting wound up but, anyway, I will adjourn the debate on Resolution No. 134.

MADAM SPEAKER: The debate is adjourned.

The honourable Acting Deputy House Leader.

MR. ROBERT CARRUTHERS: Madam Speaker, would you please revert to the order of business, Notices of Motion.


MADAM SPEAKER: The honourable member for Cape Breton West.

[Page 1083]


MR. ALFRED MACLEOD: Mr. Speaker, I hereby give notice that on a future day I shall move the adoption of the following resolution:

Whereas this week is national Organ Donor Awareness week; and

Whereas Cape Breton teen Carmen Young became a major spokesperson for organ donor awareness as she waited for a lung transplant; and

[4:00 p.m.]

Whereas the brave North Sydney youth lost her battle for a second chance but along the way utilized her strength and spirit to promote the need for organ donations;

Therefore be it resolved that the members of this House recognize the continuing influence that Carmen Young has had on the Donor Awareness Program in Nova Scotia. Her courageous fight encouraged many teens in her community to sign donor cards and influenced countless others of the value of organ donation and the ability to offer, in death, a second chance at life for another.

Madam Speaker, I would ask for wavier of notice and passage without debate.

MADAM SPEAKER: There has been a request for waiver of notice.

Is it agreed?

It is agreed.

Would all those in favour of the motion please say Aye. Contrary minded, Nay.

The motion is carried.

I recognize the Acting Deputy Government House Leader.

MR. ROBERT CARRUTHERS: Madam Speaker, I wish to advise the House that on Monday the Committee of the Whole House on Supply will be called. The Subcommittee on Supply will be meeting in the Uniacke Room. In this Chamber it is going to be Justice and downstairs the Economic Development and Tourism estimates will be heard.

After that we will move on to Resolution No. 134 and/or possibly the Committee of the Whole House on Bills.

[Page 1084]

Madam Speaker, I move that we do now adjourn this House. The hours on Monday will be from 2:00 p.m. until 10:00 p.m. I would so move.

MADAM SPEAKER: The motion is that we will adjourn until Monday at 2:00 p.m.

The motion is carried.

[The House rose at 4:01 p.m.]

[Page 1085]



By: Mr. Ronald Russell (Hants West)

I hereby give notice that on a future day I shall move that an order of this House do issue for a return showing, with respect to the Department of Labour:

(1) The total number of appeals awaiting a hearing with the Workers' Compensation Appeal Tribunal, that is, those which have not received a final decision.

[Page 1086]


Given on April 24, 1997

(Pursuant to Rule 30)


By: Mr. Alfred MacLeod

To: Hon. John MacEachern (Minister of Community Services)

Several years ago, the Government of Canada launched a strategy called the Brighter Futures Initiative. This plan was aimed at promoting the needs of children and families across Canada. Many provinces joined with the federal government to develop programs specific to their jurisdictions. Here in Nova Scotia, the federal government - in consultation with officials from the provincial Departments of Community Services, Health and Education - established the Community Action Program for Children (CAPC).

Nova Scotia was the only province not to provide any funding for this initiative. The CAPC Initiative in Nova Scotia approved 13 special child projects in this province which were funded 100 per cent by the Government of Canada. One of those projects, the Child Help Initiative Program, had a focus on children in the province's aboriginal communities.

The federal government is now looking at cutting part of its funding for the Brighter Futures Initiative. In most provinces, this is not a very serious concern, since the provincial governments have already been assisting with the costs. In Nova Scotia, this will likely be a major blow against the Community Action Program for Children.

My question for the Minister of Communities Services:

(1) Will he commit provincial dollars from this year's budget to this worthwhile program?

(2) If so, how much and from where will he get the funds?