Below is an excerpt from the debate:

MR. GRIMES: Thank you, Mr. Speaker.

Mr. Speaker, another question for the alternate to the Minister of Finance and President of Treasury Board. The Premier and the President of Treasury Board consistently claim that they need to do something about future benefits like sick leave - and here is the key, Mr. Speaker - at the urging of the bond rating agencies.

On March 16, the Premier, in the presence of the Minister of Natural Resources, claimed at a press conference that he had - and this is a very important phrase - he had alarming correspondence from the bond rating agencies and, as late as last evening, he said that is why they need to change provisions such as sick leave.

Would the alternate to the Minister of Finance describe to us, and answer for us, what actual correspondence from bond rating agencies is in the hands of government, and could she table it for us?

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

SOME HON. MEMBERS: Hear, hear!

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

Mr. Speaker, given the fact and the acknowledgment that this year’s Budget was a tough piece of work, not unlike what the Leader of the Opposition, in many budgets that he was involved with and brought down himself, has gone through. Given the fact that, even through all of that, the Minister of Finance and President of Treasury Board, on Budget Day and in the Budget Speech, introduced a Budget, recognized that this year’s accrued deficit would be $840 million, much of what we did -

AN HON. MEMBER: (Inaudible).

MR. E. BYRNE: I am about to answer the question, I say to the Member for Twillingate & Fogo.

Much of what we did was on the advice of trying to maintain a balance between ensuring that our current credit rating remains in place - and I know the Leader of the Opposition understands the importance of that, because if there was any downgrade in that, government could be faced with trying to find an additional $55 million to $75 million to $150 million if there was a downgrade.

Now, given the question that the member has just asked me in terms of the correspondence - Can it be tabled? Will I find it? - I can only say on behalf of the government that I will take that matter under advisement and I will report back to the House at the earliest possible opportunity.

SOME HON. MEMBERS: Hear, hear!

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

SOME HON. MEMBERS: Hear, hear!

MR. GRIMES: Thank you, Mr. Speaker.

I appreciate the answer and the undertaking, Mr. Speaker. Maybe I can save the House Leader, who seems to be going to answer the questions instead of the Minister of Health and Community Services, who is the alternate to the Minister of Finance, I will save him some work. As a matter of fact, I have in my hands here a response to a Freedom of Information request that we placed to the government asking for that information, and I will provide him the answer.

The response that we received from the Deputy Minister of Finance is that there is, in fact, no alarming correspondence from the bond rating agencies, as the Premier stated on March 16. As a matter of fact, it goes on to say, with the Deputy Minister of Finance, there is no correspondence from bond rating agencies at all. None whatsoever.

Now we have a government answering in the House today that if the bond rating changes we might have these dire consequences, because again we have a situation being described to the Province other than what actually exists.

Mr. Speaker, let me ask this question: On October 29, as a matter of fact, after the election, with the new government already in place, the Dominion Bond Rating Service, which is one of those bond rating agencies, confirmed the credit rating of Newfoundland and Labrador. It did not say it might be downgraded. It confirmed it and stated, and it is their quote: Trends remain stable. Trends remain stable.

MR. SPEAKER: Order please!

I ask the member now to complete his question.

MR. GRIMES: Yes, Mr. Speaker.

The question is an important one. Why is the government, whoever is speaking or answering on behalf of the government, misinforming the public and trying to justify a totally unnecessary attack on collective bargaining benefit items, with information that is completely and totally at odds with what the bond rating agencies put in the possession of the new government a week after they were elected?

SOME HON. MEMBERS: Hear, hear!

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

SOME HON. MEMBERS: Hear, hear!

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

Mr. Speaker, maybe I should wait and let the leader ask all of his questions. He has asked a question and then stands up - to which an answer he already had, or he believes that he was in possession of.

The fact of the matter is this - and maybe the Leader of the Opposition should write a Freedom of Information request. Maybe he already has. If he has, I am not aware of it. Maybe he should ask for the correspondence of what the fiscal agents of the Province had told the Province and the provincial government sometime in November and December. The response was clear, and the royal commission on our position within Canada, a commission which he started, Mr. Speaker, said exactly the same thing, that the fiscal situation and spending practices of the Province are unsustainable. In other words, we couldn’t spent $1 billion this year more than we had, we couldn’t spend another $1.1 billion next year that we didn’t have, we couldn’t spend $1.2 billion the year after that, or $1.3 billion after that; in doing so, adding almost $4.5 billion to our debt.

The only place that would bring us, Mr. Speaker, is to a point where there would be absolutely no level of service -

MR. SPEAKER: Order, please!

I ask the member now to complete his answer.

MR. E. BYRNE: - for people in Newfoundland and Labrador.

SOME HON. MEMBERS: Hear, hear!

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

SOME HON. MEMBERS: Hear, hear!

MR. GRIMES: Thank you, Mr. Speaker.

The Government House Leader would know, having been in this position, that we ask the questions because we know the answers but the government hasn’t bothered to tell the people of the Province what the answer is, and they need to find out.

Mr. Speaker, let me move again - because the Government House Leader who, I guess, is designated today to answer the questions said: Well, in October that might have been true. That might have been what a bond rating agency said in October, but we got different information in November and December.

Let me provide this information and ask this question, Mr. Speaker. Moody’s, which is another bond rating agency, provided information to the government in January of 2004, just before the Premier spoke to the people of the Province on January 5. Here is what they stated, their quote: We assign an A-3 rating to the Province, the highest it has ever had in history, having raised it in May, 2002. The upgrade that we provided recognizes the Province’s - listen to this! - improved debt profile since the mid-1990s, and its brighter -

MR. SPEAKER: Order, please!

I ask the member now to complete his question.

MR. GRIMES: Yes, Mr. Speaker.

- and its brighter economic prospects.

Now, they sat in the Cabinet, they sat in the Caucus, they suggested it. The statement finished by saying - this is January when the Premier was about to go to the people of the Province saying, we are drowning in debt - the Province’s rating outlook is stable.

Mr. Speaker, the question - can the Government House Leader answer on behalf of the Premier? - is that the alarming correspondence that the Premier said in his presence in a press conference on March 16, that he had received from the bond rating agency? Is that what they are talking about?

SOME HON. MEMBERS: Hear, hear!

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

SOME HON. MEMBERS: Hear, hear!

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

Mr. Speaker, we believe, based on the information that has been provided to us, that one of -

MR. GRIMES: (Inaudible).

MR. E. BYRNE: The Leader of the Opposition has asked a question. I listened to his question. I wonder if he would have the courtesy to listen to my answer.

Much of the reason why we have not seen, at this point, or probably will see a downgrade in the Province’s credit rating which would put at risk - admittedly, the Leader of the Opposition shook his head when I talked about it earlier - the Province having to find an additional, anywhere from $50 million to $150 million, depending on the length of the downgrade or how much the downgrade was. Where would we find the money to do all of the other things that we are currently doing?

Mr. Speaker, when we became the government earlier this year, or in the last year, we faced a fiscal situation that was almost three times greater than - when in 1989, as a member of a former government - he faced. Almost three times greater!

Let me say to the Leader of the Opposition, that we took the view that he did. This is what he said then: The problem has always been that if you do not -

MR. SPEAKER: Order, please!

I ask the minister now to conclude his answer.

MR. E. BYRNE: - sooner or later take the bull by the horns, Mr. Speaker, and deal with it, you can always delay, but every week, month or year of delay will put you in a more difficult problem to grapple with it and provide public services to the people of the Province.

That is the situation that we inherited from you and your government, Sir. That is the situation that we are trying to deal with on behalf of everybody.

SOME HON. MEMBERS: Hear, hear!

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

SOME HON. MEMBERS: Hear, hear!

MR. GRIMES: Thank you, Mr. Speaker.

That is the story they have chosen to believe themselves and are trying to foist on the people of the Province. Today we are getting to the truth, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. GRIMES: Mr. Speaker, not the bond rating agencies but the Province’s own financial advisors, a separate group of advisors that they pay rather well to advise the Minister of Finance and the Premier. They advise government that the bond raters who gave us stable ratings, raised our ratings, did not say they were at risk at all, nothing alarming, things are stable. Does the government understand the difference between the situation is stable verus the situation is alarming? What is alarming is what is happening in the Province today, twenty-one days into a strike, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. GRIMES: Mr. Speaker, the government’s own advisors said the bond raters want to see an action plan that is front-end loaded, which is why we do understand that the Premier and the President of Treasury Board are out with the negotiators today, probably talking about a two-year wage freeze. That is front-end loaded, that is action in the early years. Those kinds of things are what is recommended.

MR. SPEAKER: Order, please!

I ask the member now to complete his question.

MR. GRIMES: Yes, Mr. Speaker.

The issue that we have been talking about here and the reason this strike is going into its fourth week is about sick leave, in which there is no savings for the government for years and years and years to come, because they are going to get rid of 4,000 employees in the next four years.

MR. SPEAKER: Order, please!

The Chair appreciates the exchange that is back and forth, but the last set of questions we were nearly two minutes in the asking and we were a minute-and-forty in the response. We are now up to a minute-and-forty in the asking and we should get these exchanges done a lot faster. A few seconds to put the question.

MR. GRIMES: Yes, Mr. Speaker.

The question for the Government House Leader is: Why has this government caused a strike that is now finishing its third week and endanger of going into its forth week over an issue that has nothing whatsoever to do with alarming correspondence or with front-end loading an action plan in the Province?

SOME HON. MEMBERS: Hear, hear!

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

SOME HON. MEMBERS: Hear, hear!

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

Mr. Speaker, we have to come to recognize, and I know the Leader of the Opposition does, that the financial situation that faces all of us - this is not thirty-three members on the government side who have an $840 million deficit. This is a 510,000 people problem in Newfoundland and Labrador. Now, this is what the Leader of the Opposition said when he sat on government. He said: Health board deficits are continuing to grow at an alarming rate; $40 million this year, $50 million in 2001, $65 million in 2002. We are on an extremely dangerous course, if not contained, could lead to financial disaster for Newfoundland and Labrador. The fact, sir, is this: You did nothing about it, you recognized the problem and you left us holding the bag.