The following is an address given by Premier Roger Grimes to the Rotary Club of St. John�s, January 30, 2003:

For Newfoundland and Labrador today, where we have been (particularly in the recent past) is something to learn from, as we determine where we are going, what is our future and what is it we want to spend our time focusing on.

On February 13, I will mark my second anniversary as Premier of this province. Recognizing an anniversary or milestone gives one pause to reflect on what has transpired during that time, I look back since I became Premier and see the accomplishments and record of achievement. I see the commitments that were made and the commitments that were kept. These commitments center on economic development, investment in education and assurance of accessible, quality healthcare and social services for the people of Newfoundland and Labrador.

At this time of year we are making - planning for- a return to the Legislature, to deal with the immediate issues of the short term and the issues of the long term for the place we call home, Newfoundland and Labrador.

Returning to work in the Legislature provides a key opportunity for government to address the people of the province. This will be through the Throne Speech. We will do so with a visionary document as to what the government believes and has learned from the people of Newfoundland and Labrador: what is of importance to us; what is expected of us to move ahead, to grow, to prosper. It is a document of our vision for the next year, for the immediate future of two to three years, and the next 10 years. We know that there are things we are dealing with today that will not come to fruition for a decade or more. You must have that horizon, at least, so you can determine where we as a people can be 10 years from now.

Following the Throne Speech, government will have another opportunity to address the people of the province. We will demonstrate how we will sustain that vision, how we will pay for that vision, how we will fiscally manage that vision. Our budget document will show our strategy to sustain and move forward.

I invite you to pay close attention this year to the Throne Speech, as it will provide a clear understanding to the people of the province of the direction the government is taking not only in 2003, but for several years beyond, for the generation who are depending on us to make decisions that will influence what is happening in the province. For all of this we must present the companion piece of our plan to be fiscally responsible and make our vision for the province happen.

I wanted to bring to the mainstream of life in Newfoundland and Labrador an accountable and open government. A complete revision of the Freedom of Information legislation is one way that was accomplished. If people want information from the government they elected, they will get it. I established the Petroleum Pricing Commission to openly look at the issue of fuel pricing.

A second issue that is quite new is the findings of the Warren Report, released publicly this week, which I committed to following the school support workers strike in September of 2001. Normally, that report would have been studied for two or three weeks before releasing it publicly. Not so for the government I lead. The study was conducted by people with knowledge and experience in this area. I believe it is much better to make these types of documents and reports available to the interested public. This provides the opportunity to study it, discuss it and implement it together.

I am genuinely pleased with work accomplished in the past two years in the domain of advocacy. The offices of Citizens� Representative and Child and Youth Advocate are in full operation. I believe that the people of this province need to be heard, and I firmly believe that there must be an avenue for them to pursue this. These two offices provide another vehicle of communication and accessability.

The whole issue of spousal travel is a perfect example of answering the need for change for the better. My colleagues never brought this concern to me. The Opposition never brought this concern to me - they, too, used the travel policy. The people have [spoken] in the past week, and I have listened to them and the rules for Cabinet ministers have been amended. Effective immediately all spousal travel for the Premier, members of Cabinet, Speaker of the House and the Leader of the Opposition has been suspended. I have asked the Speaker of the House to request the same of the other 28 MHAs whose travel entitlements fall under the rules of the House of Assembly.

I convened a meeting for this afternoon with the Leader of the Opposition and the Leader of the NDP Party to determine the scope, extent and nature of the review of the spousal travel policy which applies to all MHAs. We will determine what, if any, circumstance would allow for spouses of elected officials to travel using taxpayers� money. Government cannot sidestep challenges. Government must not be afraid to listen and heed the advice and the opinions of the people it serves.

The role of government is to create a climate of investment. We are living in a Newfoundland and Labrador where the investment climate has never been better.

This is a time in our province with the lowest businesses taxes since Confederation, the lowest personal income tax, historically (which, between the federal and provincial governments, has decreased five times in the past four year) and the lowest retail sales tax in the last two decades. This is showing increased revenues for government. The school of thought in economics is that if you keep putting more money back in the hands of the people, they will spend it. They have. Retail sales exceeded last year�s estimates and are increasing dramatically again this year.

Last year saw key, specific events that demonstrated we, as a province, are taking control of our destiny. My pro-development agenda is driving the dynamic and strong economy of this province and confirms that Newfoundland and Labrador is a great place to invest in and do business.

There are achievements that will significantly impact the economy of Newfoundland and Labrador for many years to come.

The Terra Nova project continues to produce at impressive levels. The project has been so successful that government granted a production increase to the proponents in December that will see the province receive higher royalties earlier in the project, resulting in hundreds of millions of extra dollars for provincial coffers.

Hundreds of Newfoundlanders and Labradorians are currently employed with the project, and our local service sector continues to expand to meet the demand from our offshore industry partners.

In March, our third major offshore oil project, White Rose, was sanctioned by the proponents, Husky Energy and Petro-Canada. The $2.35 billion project has since steadily grown and now employs over 200 engineers and technical staff in St. John�s, who are completing the detailed engineering work for the project.

On that same day, the Government of Newfoundland and Labrador announced that Peter Kiewit Sons (PKS), one of North America�s largest construction and fabrication firms, had purchased the Marystown Shipyard. This was the culmination of negotiations between the Department of Industry, Trade and Rural Development�s Industrial Benefits team and Husky Oil, and it led to an agreement that 80 percent of the topsides would be fabricated in Newfoundland and Labrador. Today, approximately 250 people are employed at Marystown in the fabrication work for the White Rose project, and that number is expected to rise to 600 people this year.

Just days after the sanctioning of the White Rose project, the province received more good news from our petroleum resource sector. On April 2^nd, the tribunal hearing the offshore boundary case between Newfoundland and Labrador and Nova Scotia ruled in this province�s favour.

The boundary established by the tribunal provides Newfoundland and Labrador with 70 per cent of the area that was in dispute between the two provinces, an area equivalent to the size of the island of Newfoundland. This area includes 78.5 per cent of the potentially resource-rich Laurentian Sub-basin. This area will be opened to advanced exploration for oil and natural gas, something that has been previously off limits to the petroleum industry. We are hopeful that our goal of new discovery and development will be realized in this new frontier of our offshore.

This leads me to one of the most important accomplishments of my government in 2002. Attention was heavily focused on our resource sector for the past 12 months, and nowhere was this more evident than the Voisey�s Bay file. After years of negotiations, we reached an agreement that sees the development of the Voisey�s Bay nickel-copper-cobalt deposit in northern Labrador.

This estimated 30-year project is a major economic stimulus for the provincial economy. With total employment benefits estimated to be 76,000 direct and indirect person-years and an estimated $11 billion impact on the Provincial GDP, it was easy to understand why the substantial majority of Newfoundlanders and Labradorians embraced this beneficial project. New technologies, new infrastructure, new investment, new opportunities and new benefits are all aspects that will accrue to our citizens.

In 2002 the EDGE program, designed to attract businesses to this province, was strengthened even further to make Newfoundland and Labrador the most competitive jurisdiction in Canada for encouraging new business investment.

EDGE offers enhanced incentives for companies establishing or expanding in rural areas - like Hygenitek, which recently announced a new manufacturing plant in Trepassey that will employ over 50 people.

I believe that the decision government made to target funding to help establish or expand businesses in all parts of the province is working very well. In 2002, the department provided financial assistance to 200 business ventures in strategic economic sectors in communities like Bell Island, Cottlesville, St. John�s, Mount Pearl and Kelligrews. This is a program that we will continue to promote.

Exporting is critical to Newfoundland and Labrador's economic growth and job creation, which is why government has focused on helping local companies enter export markets. Our exports have almost tripled since 1992 and reached over $8 billion in 2001.

The department helps local companies find new export markets through trade missions. In 2002, companies from this province participated in trade missions to Germany, Russia, New York and Boston. While the most recent trade missions to New York, Boston and Ireland are still reporting results, the total estimated value of these deals to date is $168.2 million.

Trade missions will continue to be a critical part of Government�s economic growth and diversification strategy, and local companies will be offered the opportunity to participate in trade missions in Washington, Amsterdam, London and Milan.

In January 2002, I joined members of the business and labour communities to announce a Strategic Partnership Initiative for our province. I said then that this partnership would be important in advancing our overall economic agenda, as set out in the Renewal Strategy for Jobs and Growth. Our intention was to develop new models of economic co-operation and collaboration. These goals are being moving forward.

Small businesses grow our economy and are making a real difference in our economy. Almost 95% of all businesses in our province are small businesses. There are over 20,000 in Newfoundland and Labrador, accounting for over one-third of total employment, creating 80% of all new jobs in our economy. Government�s small business development agenda is helping make this happen, through measures like an increase in the tax-free threshold for the payroll tax, that has removed 95% of all businesses from that tax today. Like our Small Business Seed Capital Equity Program and our new Venture Capital Tax Credit Program and our new Small Business and Market Development Program.

The government I lead has advanced government�s Jobs and Growth Agenda by strengthening and diversifying the province�s economy, with particular attention to rural areas. More than 60 per cent of jobs created in the past few years have been in rural areas of the province.

This year legislation was passed to increase our province�s minimum wage from $5.50 to $6.00 per hour, and that reflects what is happening in the economy in general. Government is mindful of the impact that increasing the minimum wage has on small business, but the economy is strengthening and is now in a position where it can support a minimum wage of $6 per hour. This new rate has brought Newfoundland and Labrador in line with the minimum wage rates in the rest of Atlantic Canada.

The key of the past two years since I have been Premier is the focus, which I will carry into the future, of investing in this province, by investing in our people. It is a fact - historically, it is proven - that societies that invest in education grow and prosper, their communities grow and prosper, their people grow and prosper, their countries grow and prosper. When you look at the nations of the world that are growing and succeeding, you will find a dedicated, committed investment to education.

Never before has that been more evident in this province than in the last 2 years. You have to stand for something. You have to stand for believing in education as being the absolute, fundamental building blocks of investment in people. We invest in early childhood development, beginning with healthy baby initiatives. That investment leads to secure and sound beginnings. Then we invest in pre-kindergarten. We focus on our K-12 system, promoting a culture of literacy, and we are seeing phenomenal results from our students. Millions of dollars to these initiatives pay off. Under my direction government has made the greatest investment in education in Newfoundland and Labrador since Confederation.

More than 80 percent of this province�s high school graduates go on to a post-secondary education. Thirty years ago that number would have been 50 per cent. I committed that post-secondary education be both accessible and affordable for all individuals wishing to pursue that education.

Government has provided Memorial University with funding to enable them to reduce tuition by 20 per cent the last two years, making the current tuition fees $2,675 per year, the lowest in Atlantic Canada and the second lowest in the country. A further 5 per cent reduction of tuition rates at Memorial University will occur in September 2003.

Over the past four years, government implemented a tuition freeze at the College of the North Atlantic and Marine Institute, making current tuition rates among the lowest in the country. We are bucking the national trend. While other provinces in Canada raise tuition, we are lowering it significantly.

Our students know their achievements and success rest in their education.

We are always challenged by parliamentary reform. Looking ahead, government (through the Throne Speech) should signal what it thinks about this. We must, for example, look at if our legislature should still be 48 members, keeping in mind the demographics of this province. This is a question that we need to examine.

What about the size of Cabinet? Should it be any number a premier picks or should it be a prescribed number.

The notion of fixed terms of office is one that I am very interested in. Everything we do in Canadian society follows a fixed term of office - municipal governments, health care boards, education boards - but not the federal or provincial governments. I believe too much time is spent on electioneering rather than doing a job for the people. Everyday should be spent doing something to make life better for the people of the province. Energy gets diverted and wasted on politicking instead of working. I want us to be challenged to work at and debate this issue so that we can better focus on our agenda rather than wonder about an election call.

We are now preparing for this year�s budget. There will be a deficit this year, make no mistake about it. We make no apologies for that.

Ten years ago that would not be an option. You can only have a deficit and plan to reduce it if you have an agenda of growth and development that is tangible, that is measurable. Ten years ago there was no choice but to restrain and cut back. Ten years ago the fishery collapsed. Ten year ago Hibernia was not developed. There was no Terra Nova, no White Rose. The term Voisey�s Bay was not in the lexicon of our language.

These things are now real. They are improving and increasing revenues for the people of the province.

We committed to the people of the province a level of services such as education, health care, infrastructure, services through municipalities, and we will keep these commitments even if it means a deficit. The government I lead will not break a commitment and cut services for the sake of balancing a budget. Further, we will address in our budget the strategy, our plan that government will follow, to manage this short-term deficit of perhaps two to three years.

I spoke with the Prime Minister this morning. We all know now that there will be additional money for health care. Still, we must look at the issues surrounding how much money and how will it be used. I am committed to finding a way to do what is right for the people of the province. We must do the very best we can with the resources that I believe will increase. Realistically, we know that there will never be sufficient money for health care. The needs of the health care system evolve and increase. My government has commitments to the health care system, to our professionals and to our programs and we intend to keep them. Next week Premiers will meet with the Prime Minister about the impact of health care funding - not only for the future, but for this fiscal year as well.

As our province grows and prosper, I determined early in my tenure as Premier that it is vital that we, as a government, seek the input of the public on the direction that we must go to secure our identity and place in the dominion of Canada. To this end I established the Royal Commission on Renewing and Strengthening our Place in Canada.

I was heartened and pleased by the numbers of citizens in this province engaged in the process of examining the direction this province should take. The public sessions and briefs provided a vehicle to discuss the challenges that relate to this province as a whole, but, as well, to individual regions and communities. The Royal Commission gives us guidance in determining how we will be Canadians in Canada.

Following unusually slow growth of 1.1% in 2001 and 1.7% in 2002, the World economy is expected to grow by 2.5% this year. Though higher than the previous two years, projected growth is well shy the 3.9% recorded in 2000 and significantly below long-term potential growth rates.

In the aftermath of a recession in the second half of 2001, the US economy grew by 2.4% in 2002. The US is expected to continue a modest expansion in 2003, with GDP growing by 2.0 to 2.5%.

Major Canadian banks have declared our economy the fastest growing in the country. Our GDP growth has nearly tripled from 2001. Canada�s economy is expected to continue to expand strongly in 2003. Real GDP is anticipated to grow by 3.5% again next year. On a provincial basis, private sector forecasters are predicting that most provinces will post strong real GDP growth in [2002] and 2003. Newfoundland and Labrador is expected to outpace all provinces this year.

Our economy is growing. It has become much more diversified. Employment is increasing. Unemployment is falling. Social assistance caseloads continue a downward trend. Out-migration is slowing. The trend line for all economic indicators is moving in the right direction.

In conclusion, let me say that we are building on two years of strong growth - in particular, strong growth in 2002. There is no reason why strong growth, as all the indicators I addressed in my remarks show, that this should not continue in the same positive direction. Our role as government is to continue to facilitate that, to feed that, to work with everyone who is committed to these good things that are happening in Newfoundland and Labrador.

Thank you

2003 01 31                                        1:00 p.m.