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May 26,

RESOURCE

COMMITTEE

Pursuant

to Standing Order 68, Calvin Peach, MHA for Bellevue, substitutes for Nick

McGrath, MHA for Labrador West.

Pursuant

to Standing Order 68, Scott Reid, MHA for St. George's Stephenville East,

substitutes for Sam Slade, MHA for Carbonear Harbour Grace.

The

Committee met at 9:02 a.m. in the Assembly Chamber.

CHAIR (Cross):

Good morning, everyone.

MR. GRANTER:

Morning.

CHAIR:

I think everybody has

gathered, Minister all your officials are here.

Welcome

to the Estimates for Forestry and Agrifoods.

A couple of reminders or housekeeping chores before we start: Mr. Peach

is in for Mr. McGrath this morning, and Mr. Reid is filling in for Mr. Slade.

I need a

motion for the minutes of the last meeting.

MR. MITCHELMORE:

Moved.

CHAIR:

Moved by Mr. Mitchelmore;

seconded by Ms Perry.

All

those in favour, 'aye.'

SOME HON. MEMBERS:

Aye.

Carried.

motion, minutes adopted as circulated.

CHAIR:

Okay, routines for today, we

give the minister fifteen minutes to start with an opening statement, if he

wishes, then the spokesman for the Opposition, the first person, could have

fifteen minutes. Then we will move

into ten-minute intervals. As we go

through the morning, we usually break around 10:30.

I will

start first by getting the Committee members, starting with Mr. Mitchelmore, to

identify themselves.

MR. MITCHELMORE:

Christopher Mitchelmore, MHA

for The Straits White Bay North.

MR. MURPHY:

Ian Murphy, Researcher with the Opposition Office.

MR. REID:

Scott Reid, MHA for St.

George's Stephenville East.

MS MICHAEL:

Lorraine Michael, MHA, Signal

Hill Quidi Vidi.

MR. MORGAN:

Ivan Morgan, Researcher, NDP Caucus.

MR. HUNTER:

Ray Hunter, Grand

Falls-Windsor Green Bay South.

MS PERRY:

Tracey Perry, MHA, Fortune

Bay Cape La Hune.

MR. PEACH:

Calvin Peach, MHA, Bellevue,

alternate for Nick McGrath.

MR. GRANTER:

Vaughn Granter, MHA, Humber

West.

MR. EVANS:

Jim Evans, CEO of the Forestry and Agrifoods Agency.

MR. DEERING:

Keith Deering, ADM for Agrifoods Development Branch.

MR. BALSOM:

Steve Balsom, ADM for Forestry Services Branch.

MR. FORSEY:

Clayton Forsey, MHA for the

District of Exploits, Parliamentary Secretary of Forestry and Agrifoods.

MR. IVIMEY:

Philip Ivimey, Departmental Controller.

MR. SCAPLEN:

Roger Scaplen, Director of Communications.

MR. STEAD:

Rob Stead, Executive to Minister Granter.

CHAIR:

Okay, thank you.

One sort

of reminder to all members of the minister's staff is when you request one of

them to update anything that you are doing, you have to say your name before we

start so Hansard will get the right mic turned on.

They have a camera down there, but we are not being filmed.

We will

start with the minister for an opening statement.

We will

call the first heading.

CLERK (Hammond):

Subhead 1.1.01.

CHAIR:

Minister.

MR. GRANTER:

Good morning, everyone, and

welcome to everyone this morning.

I am

going to forego my fifteen minutes and pass it over to questions.

I just remind the people who are questioning that I would really

appreciate it if we stick to the lines in the budget items.

I am going to forego my fifteen minutes so that will give an extra

fifteen minutes of questions. I was

here in a previous meeting the other night and we got pretty tight near the end.

Welcome,

everyone.

CHAIR:

Mr. Mitchelmore.

MR. MITCHELMORE:

I want to certainly welcome

the minister and his staff. I am

looking forward to getting questions answered on Forestry and Agrifoods which, I

guess, based on the government numbers is valued at $250 million for Forestry

and Agrifoods, and the Parliamentary Secretary had stated it is valued at $500

million. So it is an important

department when you look at $750 million value of the industry.

I want

to ask the minister how many employees are with the Forestry and Agrifoods

division.

MR. EVANS:

The total number of positions

we have from our 650, Forestry has 513 and Agrifoods has 137 positons, all of

which are not filled at this point.

MR. MITCHELMORE:

How many are vacant?

MR. EVANS:

Approximately and I will

defer to Keith and Steve now in a moment we generally run a 5 per cent to 6

per cent vacancy rate. With so many

positions and so many employees, we have a lot of turnover as you may expect.

There are continuous vacancies throughout the department while we are

filling jobs or recruiting.

MR. MITCHELMORE:

How many are anticipated to

fall under the attrition plan of being cut over the next five years?

MR. EVANS:

The five-year plan for

Forestry and Agrifoods over the next five years is ten positions, two positions

per year.

MR. MITCHELMORE:

Okay.

Under

line item 1.1.01, Executive Support, the budget had $457,300 and the revised

amount for last year was $407,700, yet the position has a Parliamentary

Secretary. I am just wondering what

positions were vacant or terminated in the Minister's Office?

MR. GRANTER:

The variance is due to a

vacant ADM, from $457,000 to $407,000.

It was a vacant ADM, a Forestry position, during part of the year.

As well, my office numbers would not be included here as they are

accounted for in Fisheries and Aquaculture.

MR. MITCHELMORE:

Okay.

This

year with budget salaries being increased as we have said in other estimates of

the 2 per cent, the numbers are still less than what it would have been budgeted

in 2014-2015. Is there still a

vacant position or is this because your ministerial salary of $54,000-plus is

not accounted for in this?

MR. GRANTER:

That is correct, part of it.

The minister's office would come under Fisheries and Aquaculture.

There is also a secretarial/administrative position that is in the

department, but where the department switched from Natural Resources to

Fisheries and Aquaculture, the actual dollar value is not showing in the budget

line, 01, under $445,100. It is

actually still showing up in Natural Resources.

MR. MITCHELMORE:

Okay, but the

MR. GRANTER:

Even though the position

itself is in Forestry and Agrifoods.

MR. MITCHELMORE:

The work is being carried out

under Forestry and Agrifoods.

MR. GRANTER:

It is.

MR. MITCHELMORE:

So will money be transferred

to Natural Resources to pay for that position?

Why would there be such an irregularity in terms of salary?

MR. EVANS:

That was an error on our part during the budget process.

The position was moved, as the minister said, but the dollars were still

in Natural Resources. That is about

$30,000 approximately, so it should be $475,000, $480,000.

The position is vacant right now and we are in the process of recruiting.

We will find the money internally.

MR. MITCHELMORE:

Okay.

With

this being a separate department from Natural Resources, how many people

actually moved into Forestry and Agrifoods from Natural Resources?

This seemed like it was a separate division on itself as an agency.

Were there other positions where there were errors?

MR. EVANS:

Not that we are aware of. The total

agency, Forestry and Agrifoods Agency, was moved as an entity under Minister

Granter, under Fisheries and Aquaculture.

All positions and salary dollars were moved.

To my knowledge, this is the only error in salary dollars.

MR. MITCHELMORE:

The Transportation and

Communications budget was revised down by about $53,000.

Is this basically because the minister did not go to a number of

conferences or do travel that was budgeted for?

What did not get done?

MR. GRANTER:

That variance is due to

savings as a result of the reduced discretionary travel in the previous year, as

well as due to as I said under 01 the vacant ADM, the forestry position

during the last fiscal year.

MR. MITCHELMORE:

So I go back to my question.

That $93,800 that was spent, did that adequately cover what was needed to

be done in terms of the ministerial work and the executive support?

MR. GRANTER:

From my perspective, I would

say yes.

MR. MITCHELMORE:

So then why would you be

budgeting another $43,300 in Transportation and Communications, bringing your

budget back up to the amount that was budgeted in 2014-2015?

MR. GRANTER:

Because I just said that part

of the reason was there was a vacant ADM position in the division last year.

So if there was a vacant position, a vacant person he or she would not

have been travelling at that particular point in time if he was not in a

particular position. Now that the

position is filled we have to account for any travel associated with that

position.

MR. MITCHELMORE:

The Supplies that were

purchased $3,000. It is down from

$2,500. Is that the reduced

discretionary spending as well, reasons why supplies were reduced?

MR. GRANTER:

No.

Any time when you are looking at supplies, whether it is office supplies,

paper, magazines, newspaper subscriptions that was due to a variance in less

than anticipated expenditures during the last fiscal year.

MR. MITCHELMORE:

Okay.

Purchased Services; what would account for the $500 that would have been spent

on Purchased Services? It is down

$2,400 from what you had budgeted.

MR. GRANTER:

That is a variance due to

lower-than-anticipated Purchased Services expenditures such as rentals, lease of

office equipment, photocopiers, printing services, on-site recycling, and

shredding of materials.

MR. MITCHELMORE:

What does this $500 actually

account for?

MR. EVANS:

I will defer to Philip in a

moment. The $500, as the minister

mentioned, is rental, lease of equipment, meeting room facilities if required

I do not have the exact details printing services, and advertising on site,

these things. I am not sure if

Philip could add to that.

MR. IVIMEY:

Yes, I mean, that is correct.

There is not really one specific item that would be charged to that

subhead. Like Jim and like the

minister referred to, it is more or less for printing services, advertising,

recycling, and shredding services.

The

exact details of what the $500 is I do not have with me right now.

It would be a multitude of individual charges, not one or two particular

Purchased Services shall we say.

MR. MITCHELMORE:

The next line, Property,

Furnishings and Equipment, $300 was budgeted, $300 was what was actually spent,

and $300 is what you anticipate to spend this year.

What was actually purchased for $300?

Is this just a continuous line item of $300 that is constantly purchased?

MR. IVIMEY:

Yes, this is just a continuous line item that provides for regular ongoing

furniture and equipment requirements that would occur there in the Executive

Support area, which we recover for the Deputy Minister, the ADMs, and the

various secretarial and support staff there in that division.

MR. MITCHELMORE:

It seems like a very low

number. I guess in the minister's

office there were savings of over $100,000 in last year's budget.

There are no plans to have that savings of $100,000 this year as the

number is estimated to be basically $100,000 more.

Moving

on down to 1.1.02, Administrative Support, which is capital, the Operating

Accounts under Purchased Services; there was no money budgeted for Purchased

Services, but $183,000 spent. I

would like an explanation from the minister on what that $183,000 was.

MR. GRANTER:

That variance is due to

engineering work required for the Foreign Animal Disease Laboratory project at

the provincial agrifoods building on Brookfield Road in St. John's.

MR. MITCHELMORE:

How come that happened

without being budgeted for?

MR. GRANTER:

It was originally budgeted in

2014-2015 under the Property, Furnishings and Equipment, and was transferred to

Purchased Services during the year.

MR. MITCHELMORE:

Okay, so this is like

Fisheries and Aquaculture where, with the wharf, the funds were in the Property,

Furnishings and Equipment and gets moved up as a service gets spent?

MR. GRANTER:

That is correct.

MR. MITCHELMORE:

The Property, Furnishings and

Equipment in the next line of $588,300; was that actually spent on any type of

service or it did not get spent and it is carried over?

MR. GRANTER:

Forestry and Agrifoods

vehicle replacements for 2014-2015, $588,300.

Originally the budget with replacement was $472,000; however, there was

an additional replacement required during the year, $95,000 for the replacement

of a five-ton cab and a chassis truck for insect control, and an additional

$49,000 related to the replacement of a seeding truck for the silviculture

nursery in Wooddale.

MR. MITCHELMORE:

Right.

All of them would have been planned except the five-ton truck that you

had just mentioned for $95,000?

MR. GRANTER:

Yes.

MR. MITCHELMORE:

Okay.

In this

year's budget it is revised down significantly to $219,300.

What do you plan to purchase here?

MR. GRANTER:

The reason it is budgeted

down to $219,300, the department has had a very aggressive purchase of vehicles

for the division over the last three or four years.

The quality of the vehicles in the division right now is very good,

especially with the purchase of those that I just mentioned in the previous

line. We believe the $219,300 will

adequately support purchase of any new vehicles in this budget year.

MR. MITCHELMORE:

How many vehicles do you have

in your fleet?

MR. IVIMEY:

There are approximately 266 light vehicles, 112 snow machines, and eighty-two

ATVs.

MR. MITCHELMORE:

Okay.

That is in terms of the vehicles that the forestry workers would be

using, in terms of whether it be for enforcement or being on those roads?

MR. EVANS:

Yes, you are correct. For Forestry

and Agrifoods, actually.

MR. MITCHELMORE:

Okay.

Would

there be other vehicles associated with heavier equipment that you would have in

your inventory that should be accounted for here?

This is the budget, obviously, and we would probably see the amortization

and see the details probably in your financial statements.

MR. EVANS:

All vehicles would be in this inventory list, heavy and light vehicles.

We do not have a lot of heavy vehicles.

There are some in Wooddale tree nursery, and a couple associated with the

fire program and the insect program, and maybe a couple in the Agrifoods

program.

MR. MITCHELMORE:

The Auditor General has

highlighted that a number of government vehicles have gone missing.

Is the department of Forestry and Agrifoods missing any vehicles from its

inventory, based on these numbers of over 400 that would be in your inventory?

MR. EVANS:

No, we are not missing any.

MR. MITCHELMORE:

Okay, great.

I see

that my time is basically up for questioning.

CHAIR:

Thank you, Sir.

Michael.

MS MICHAEL:

Thank you very much, Mr.

Chair.

Good

morning, Minister.

MR. GRANTER:

Good morning.

MS MICHAEL:

Good morning to all your

officials and staff. Thanks for

being here.

Just

before asking questions; we have been receiving the briefing notes that have

been done for ministers at the end of the well, not necessarily right away in

the room, but if I know we are going to get the ones for here that might limit

some questions I might ask. So if we

can just get that established.

Great,

thank you. It has been really

helpful, actually, having these passed over to us.

Okay, I

can start with questions then.

Subhead

2.1.01, under 01, Salaries; we have a revision downward from the budget line in

2014-2015, and in this year's estimated budget we are up a fair bit, $291,800.

Could you just explain that whole line there, Minister, please?

MR. GRANTER:

Yes, I can.

The variance from 2014-2015 budgeted to revised were due to vacancies

within the Administration and Program Planning division, as well as lower than

anticipated overtime and other earnings that would have been paid out.

The

increase for 2015-2016 to $5,313,800 is because we moved three positions from

the silviculture division to this division.

So there are extra positions in this division such that we see an

increase in the salary and you will see a decrease in the salary from that other

division once we get there.

MS MICHAEL:

Okay, thank you.

Have the

vacancies that occurred in 2014-2015 been filled, or are they in the process?

MR. GRANTER:

Those three vacancies?

MS MICHAEL:

Yes.

MR. BALSOM:

Two of those positions are filled and one is going to be abolished under our

current plan.

MS MICHAEL:

Okay, thank you.

Is that

the only position that is being abolished in this division?

It is a general question.

MR. EVANS:

If I understand it correctly, I believe we are abolishing one position but

creating another. I stand to be

corrected on that, but the attrition plan if that is what you are referring

to, Ms Michael?

MS MICHAEL:

Yes.

MR. EVANS:

is two positions per year for five years, for a total of ten.

MS MICHAEL:

Okay.

MR. EVANS:

We have the two identified for this fiscal year.

MS MICHAEL:

Okay.

Thank you very much.

If I can

ask further then, are they attrition by retirement?

MR. EVANS:

I will refer to Keith and Steve again.

One I believe was a vacant position and the other was a retirement.

I will

refer to Steve on that one.

MS MICHAEL:

That is it?

MR. BALSOM:

Yes, that is right. One will be a

retirement.

MS MICHAEL:

Okay.

Thank you very much.

If we

come further down to Professional Services, $284,000 was budgeted in 2014-2015

and only $198,600 was spent. Can we have

an explanation of that, please?

MR. GRANTER:

That variance is due to

reduced professional services due to a delay in ISO 14001 registration plan for

2015-2016.

I will

refer to anyone else for an explanation.

MS MICHAEL:

That is basically it.

MR. EVANS:

Yes, that is correct.

MS MICHAEL:

You retained the base of

$284,600 because you do not expect that to happen again.

MR. EVANS:

Yes, we were planning it for

this fiscal year.

MS MICHAEL:

Okay.

Thank you very much.

Under

Purchased Services, the revision from the budget is down about $702,000 and the

estimate for this year is up, but not as high as the budget of last year.

So if we could just have an explanation across that line.

MR. GRANTER:

The variance in 2014-2015 is

due to a late tendering of inventory

interpretation contracts, therefore limited

payments were incurred during 2014-2015.

Reduced costs in both photo acquisition and lower than anticipated

expenditures associated with wood supply modeling during 2014-2015.

So that is the variance for the past fiscal year.

MS MICHAEL:

Right.

MR. GRANTER:

The $1,502,100 for estimates

is a variance due to a reduction of $125,000 in purchased services related to

government reduction measures. That

is one area where we took some reductions across the department.

MS MICHAEL:

Will there be much of a

negative impact on that, Minister, on the work of the department?

MR EVANS:

No, we feel the budget we

have is sufficient to meet our needs.

MS MICHAEL:

Okay.

Thank you very much.

Turning

over to 2.1.02, looking at Salaries, there is a variance between the budget and

the revision of 2014-2015 of almost $300,000.

Could we have an explanation?

MR. GRANTER:

The forty-one regional

offices in the Province, twenty-five plus sixteen satellite offices for the

entire division of Forestry and Agrifoods.

So the variance is due to vacancies within the regional operations last

year, as well as lower than anticipated overtime and other earning expenditures.

MS MICHAEL:

Okay.

Is that

more than anticipated overtime or less than anticipated overtime?

MR. GRANTER:

Less than anticipated.

MS MICHAEL:

Okay.

MR. GRANTER:

Did I say more than?

MS MICHAEL:

Yes.

MR. GRANTER:

Oh, I am sorry less than

anticipated.

MS MICHAEL:

That is all right, thank you.

Well, I heard more. Whether

you said it or not is another thing.

MR. GRANTER:

It is early.

MS MICHAEL:

Yes, that is right, and I had

a fourteen-hour day yesterday.

Then if

we come to the estimated budget for this year, it is up over $200,000 from last

year's budget.

MR. GRANTER:

The variance is due to

budgeted salary increases for 2015-2016 as per the collective agreement, as well

as funding for any planned salary step increases.

MS MICHAEL:

Okay.

Then the

vacancies that you had last year, have they all been filled in the regions?

MR. EVANS:

Not all, but some have. We have a

continuous vacancy factor, I guess because there is so much turnover and so many

employees.

MS MICHAEL:

Right.

MR. EVANS:

We do recruit actively, but there are still vacancies there, but we do that on

an active basis and assess it as needed.

MS MICHAEL:

What is the reason for the

high turnover? Is it the nature of

the work itself, or other employment opportunities for people involved in the

type of work that happens here under Operations?

MR. EVANS:

My perception is that it is just other opportunities.

People move up the ladder and get other positions and create a vacancy in

their past position.

MS MICHAEL:

Right.

MR. EVANS:

We do not have a lot of people leaving, per se, right.

MS MICHAEL:

Okay, great, thank you.

Under

Supplies, there was a variance upward from the budget to the revision, if we

could have an explanation of what happened there.

MR. GRANTER:

That variance is due to

increased gas consumption the use of vehicles has increased significantly, as

well as gas prices has increased. As

well as purchases this year of tire, uniforms, floatation suits for officers due

to a new snowmobile policy.

MS MICHAEL:

Okay, thank you.

suspect it was more of those than the gas, because in actual fact although it

may have been. Is it diesel that is

used here or just regular? Because

gas actually came down a fair bit during that year, but I suspect the other

things you have mentioned took up a lot of money as well.

MR. GRANTER:

Yes, but to answer your

question, the vehicles are gas.

MS MICHAEL:

Okay, thank you.

Then

under Purchased Services there is a variance there as well between the budget

and the revision, a variance upward, if we could have that explanation.

MR. GRANTER:

Sorry, under Purchased

Services?

MS MICHAEL:

Purchased Services, yes.

MR. GRANTER:

Purchased Services, $447,000

to $507,000.

MS MICHAEL:

Yes.

MR. GRANTER:

That is due to an anticipated

Purchased Services cost associated with the vehicle repairs and maintenance.

MS MICHAEL:

Okay.

So that is mainly what that Purchased Services line is for, is it?

MR. GRANTER:

Yes.

MS MICHAEL:

Thank you very much.

I just

have some seconds left, so I will pass it back.

CHAIR:

Okay.

Mr.

Mitchelmore.

MR. MITCHELMORE:

I would like to start then on

2.1.04, Resource Roads Construction, Capital.

MR. GRANTER:

Sorry, what number again?

MR. MITCHELMORE:

Subhead 2.1.04.

MR. GRANTER:

Subhead 2.1.04?

MR. MITCHELMORE:

Yes, it is Resource Roads

Construction for forestry, pulp, and fuel wood production.

The Purchased Services was estimated to be $5,076,300, $4.8 million was

expended, and this year's budget was $3,164,400.

I assume that this is for the construction or improvements made to the

resource roads itself. Can you

explain why the drop and how many kilometres of road are anticipated, et cetera,

for this value?

MR. GRANTER:

Yes, you are correct.

The variance from the 2014-2015 budget to revised is due to lower than

anticipated volume of road construction during the year.

The variance from revised 2014-2015 to estimates this year is due to a

reduction of $1,900,000, nearly $2 million, in resource roads related to

government reduction measures.

prioritized the operations industry could also build roads and get royalty

reduction from us as well, even though government owns the roads.

MR. MITCHELMORE:

Okay.

What

type of royalty reduction would they be eligible for, if they built their own

roads? Right now they pay us a fee,

a stumpage fee.

MR. BALSOM:

There is a royalty reduction

of approximately $2.23 to build their own road per cubic metre.

MR. MITCHELMORE:

Per cubic metre, okay.

Have you

ever received payment for a company that did their own road and received a

royalty reduction?

MR. BALSOM:

Yes.

I guess we try to stick with building capital roads and encourage the

harvesting contractors to build their operational roads.

This has traditionally been the system that we have used and then they

get a reduction in their royalty for the timber that they access.

MR. MITCHELMORE:

Okay.

How much

revenue was generated from this type of work last year?

MR. EVANS:

The royalty for a reduction

in a contractor building their own roads, I do not have the information here

Philip, I do not know if you have a total royalty number.

I am not sure if we separate that out; we would have to go back because

if somebody does not build a road, we get a higher royalty of $5.56 per metre.

MR. MITCHELMORE:

Yes.

MR. EVANS:

If they get a reduction for

road building, as Steve mentioned, it is $2.50 per metre less.

They get other reductions as well for a slope and difficult terrain and

using environmentally friendly high flotation tires, these types of things.

I do not know if we separate that out.

We will have to dig that out.

Philip, do you have any

MR. IVIMEY:

All those revenues, like the

royalties and for permits and fees, that would all show up under the Department

of Finance; it would not show under Forestry and Agrifoods.

MR. MITCHELMORE:

Right.

Do you

have a total revenue for the royalties that were collected last year?

MR. IVIMEY:

No, I do not have that

information right here.

MR. MITCHELMORE:

Okay.

So I

would write Finance to get that information, not the Forestry and Agrifoods

Agency?

MR. IVIMEY:

Finance should be able to

provide it, but I would assume that we might be able to provide it as well,

internally .

MR. MITCHELMORE:

Okay, thank you.

Under

2.1.05, Forest Industry Diversification, last year there was no money budgeted

but $185,000 was expended. I would

like the minister to explain that $185,000.

MR. GRANTER:

That was related to Holson

Forest Products on the Great Northern Peninsula for $65,000 for insurance of an

asset, and $120,000 to assist in a new business plan for Holson and an

engineering study.

MR. MITCHELMORE:

Okay.

In the

past, last year there was $84,000 investment in Holson Forest Products under the

Forest Industry Diversification Fund.

The amount that was spent this year and last year, why is the department

continuing to pay for insurance of a private company?

I thought under the Forest Industry Diversification Program, the program

had expired?

MR. GRANTER:

Yes, a $7 million investment

that we have in that facility. We

have security on that particular facility, so we would not want to see a

facility that would come to us lapse on insurance.

That is why the $65,000 for insurance for that particular facility this

past year.

MR. MITCHELMORE:

Does the Province have first

charge then on the asset?

MR. EVANS:

Yes, we have first charge on the kiln.

I can get some information on that at a later date, but there is

investment in the kiln and the pellet plant.

We have a first charge on the kiln, but I would like to clarify that

later, if I could.

MR. MITCHELMORE:

So you have first charge on

the kiln, but not on the pellet plant which would be the biggest investment of

that particular facility. Some other

creditor would have first charge on the facility?

MR. EVANS:

I would have to get you that information after, Mr. Mitchelmore.

We do have some security on the pellet mill as well as the kiln.

There is other financing, as you are aware, maybe from other financial

institutions that have security as well.

So I can get you that information after if you like.

MR. MITCHELMORE:

Would the Province be fully

secured, then, in their $7 million investment based on the insurance?

Would the insurance valuation and all the expenditures from other

creditors secure the financial position of the loan investment for the Province?

MR. EVANS:

Yes. We feel we are, yes.

MR. MITCHELMORE:

How much is the insurance

policy for?

MR. EVANS:

Actually, Holson has the insurance policy.

It is not government policy.

MR. MITCHELMORE:

Okay.

Is this

something that government will do for other businesses and industries that it

has loans given to, pay the insurance on facilities and assets, or is this an

exception?

MR. EVANS:

My view is I think government would assess every entity on its own merit,

depending on the investment. I do

not know if there is a specific policy related to that, but I think it would be

on an individual basis determined if you pay the insurance or not.

MR. MITCHELMORE:

The $120,000 for a new

business plan; did the company make a contribution to go forward on the business

plan? Or was this solely funded by

the department of Forestry and Agrifoods?

Who is the consultant?

MR. EVANS:

It was a business plan and an engineering study.

Holson, as you are aware, is in financial difficulty.

They made and I will defer to Steve as well in-kind contributions

with their input into the plan. The

consultant was TS Manufacturing.

They did the engineering study and I believe they did the business plan as well.

MR. MITCHELMORE:

Okay.

Can you provide any other update on this particular project then, what

the status of this business plan is, and if there is anything moving forward?

There is basically no employment at this facility, at the pellet plant

and sawmill or kiln, virtually zero employment currently for the community and

the region that used to employ hundreds of people.

MR. GRANTER:

An update that I can give you

would be that the business plan is done and the engineering study is done.

I know that the business plan and the study have been shopped around for

potential investors. It is a great

potential for the Northern Peninsula with regard to this particular facility in

the future. It is being shopped

around right now.

MR. MITCHELMORE:

Okay, I see my time is

MR. GRANTER:

I do not want to get into any

other details on potential investors.

CHAIR:

Ms Michael.

MS MICHAEL:

Thank you.

Just to

continue, I have one more question with regard to Holson.

Are you aware of it would seem logical so that is why I am asking it

any discussions or any deal in place with Holson and Nalcor with regard to the

timber that is going to be produced during the installation of the

Labrador-Island transmission line?

MR. GRANTER:

Is the question on

availability of timber resource?

MS MICHAEL:

Yes.

I mean this is going to be timber that is going to become available, so I

am just wondering if there are any discussions going on with them around that.

MR. GRANTER:

I do not think the issue with

Holson is the availability of product.

OFFICIAL:

(Inaudible).

MR. GRANTER:

Right.

If you went to the site there is considerable amount of product that is

still stored on site there, so the issue with them is not with regard to timber

resources.

MS MICHAEL:

Right.

I was not making an issue of it, I was just wondering.

MR. GRANTER:

No.

MS MICHAEL:

Okay.

Thank you very much.

If I

could come back to 2.1.03, Silviculture Development; under Silviculture

Development there is a fair bit of variance.

I think we have the answer to the salary variance from earlier on.

Coming

down to Supplies and Purchased Services there was a variance downward in last

year's budget under Supplies. This

year there is a fair bit of increase in the estimate for this year over last

year's budget.

MR. GRANTER:

Okay.

For the downward trend in 2014 to revised, that is lower than anticipated

expenditures such as personal and household supplies required for field staff

we have people out in the field as well as construction and maintenance

supplies, and small tools and field equipment materials related to the

greenhouse and nursery operations.

The

upward one for budget 2015-2016 to $$679,000; there is an additional $190,000

approved in budget 2014-2015 related to plant propagation associated with the

five-year Cranberry Industry Development Program.

So those are the additional funds there.

MS MICHAEL:

Okay.

Coming down to Purchased Services, again there is a variance downward of

almost $524,000 from the budget and the revision.

MR. GRANTER:

The savings are due to a

reduction in silviculture projects.

Savings resulted from less pre-commercial thinning contracts and tree planting

contracts than anticipated last year.

The increase to $3.8 million-and-change is for a one-time re-profiling of

$86,000 from silviculture to the administration and support capital related to

the replacement of a seeding truck in 2015-2016, as well as the reduction of

$150,000 in silviculture related to the government reduction measures.

That is one of the areas where we took funds out.

MS MICHAEL:

Okay.

How are things going with the silviculture around the Province, Minister?

MR. BALSOM:

Steve Balsom, Forestry Services.

MS MICHAEL:

I have to say I love your

last name in Forestry Services.

MR. BALSOM:

Thank you.

MS MICHAEL:

It just dawned on me.

MR. BALSOM:

I guess just to speak about

the silviculture contracts from 2014; we had a very good year and still do have

quite a bit of planting, to the tune of about 3,000 hectares last year.

We did some disc trenching which was almost 1,500 hectares last year;

some plantation maintenance and vegetation management, almost 200 hectares.

We still

have a good program where we are. We

always lag behind the industry and we are still dealing with regeneration

success in different parts of the Province.

So it is still a healthy program.

MS MICHAEL:

Good, thank you.

Minister, with regard to Corner Brook Pulp and Paper and their reforestation,

have they received money over the past year for their program from government?

MR. GRANTER:

Yes.

MS MICHAEL:

How much?

MR. GRANTER:

Steve.

MR. BALSOM:

In the 2014 cost-sharing for the silviculture agreement there was in total $1.4

million paid to Corner Brook Pulp and Paper.

MS MICHAEL:

Okay.

Was that

similar to the year prior, or do you have that figure?

MR. BALSOM:

I do not have that figure with me.

MS MICHAEL:

Maybe you could get that.

MR. BALSOM:

I can provide it if you like.

MS MICHAEL:

Yes, thank you very much.

Okay.

We will move forward now to 2.2.01, Insect Control.

Coming to the Salaries line, there is a lot of variance going on here

between the budget last year and the revision, and now the budget for this year

is up quite a bit from the budget last year.

MR. GRANTER:

Yes.

The variance is due to a smaller 2014-2015 insect control program than

anticipated and reduced survey levels, giving a reduction in the major pest

populations.

The

Estimates for 2015-2016 is budgeted increases as per the collective agreement,

funding for any planned salary and step increases.

There is an additional $150,000 approved as part of Budget 2015-2016 as

part of an increased spray program for the hemlock looper and spruce budworm on

selected areas of the Great Northern Peninsula.

MS MICHAEL:

Right.

Now I presume that most of these positions, we are talking about seasonal

positions are we?

MR. GRANTER:

Yes.

MS MICHAEL:

Yes.

Do we

have numbers for the numbers of people who were hired, for example, last year

under this program?

MR. EVANS:

The numbers that I have for insect control bear with me for a moment.

We can get them for you as we calculate them.

I thought I had it right at my fingertips.

I apologize for that.

MS MICHAEL:

Okay, thank you.

Are

there permanent positions in this division as well under Insect Control?

MR. EVANS:

Keith just did the number.

It is thirty-nine for last year.

MS MICHAEL:

Okay.

All right.

MR. EVANS:

Thirty-nine positions.

MS MICHAEL:

Would they have all been

temporary seasonal?

MR. EVANS:

The majority would be

temporary seasonal in this category.

MS MICHAEL:

Okay.

Thank you very much.

Coming

down to Transportation and Communications, there is a variance upward from the

budget of $390,000 up to $539,000 and now for this year it is up even more to

$641,000. So, an explanation,

please.

MR. GRANTER:

The variance is due to an

increase in sampling required for the fall forecast survey.

The

increase upward for this budgeted year $641,000, there is an additional $250,000

approved as part of Budget 2015-2016 as part of an increased spray program for

the hemlock looper, as I said earlier, and spruce budworm on selected areas of

the Northern Peninsula for this particular year.

MS MICHAEL:

Okay.

These

are basically the only two things that we have to deal with in an intense way

right now with regard to insect?

MR. GRANTER:

I understand with the hemlock

looper, it would be more of a spray this year than the budworm on the Great

Northern Peninsula, and the product uses a biological as opposed to a chemical

spray.

MS MICHAEL:

Okay.

Well, that is good to hear.

Would

the increase in Supplies then be related to all of that?

Because there is a big increase in Supplies.

MR. GRANTER:

The answer to that is, yes.

MS MICHAEL:

Yes, it makes sense.

MR. GRANTER:

It is reflected in Salaries.

It is reflected in all three of those lines; Salaries, as well as the

other two lines that I just mentioned.

MS MICHAEL:

Purchased Services as well?

Because Purchased Services has gone up $200,000 also.

MR. GRANTER:

Yes.

The answer to that question is yes.

MS MICHAEL:

Okay.

Thank

you very much.

CHAIR:

I think your time has

MS MICHAEL:

Yes.

CHAIR:

Mr. Reid.

MR. REID:

Thank you, Mr. Chair.

This is

my first Estimates Committee. I was

recently appointed as the Opposition agriculture critic, so I am going to be

asking some questions I guess to gather a bit more information about the

department. There will be some

general questions related to each of the headings, just for my information, to

give me a better understanding of some of the items that the department does in

relation to the budget.

In terms

of item 3.1.01, Land Resource Stewardship, I am just wondering if I could get a

sort of general idea from the department exactly what is entailed under this

heading, under this expenditure.

MR. GRANTER:

Some of the areas would be

mapping, environmental farm planning, limestone, land consolidation, roads.

All of those would fall under Land Resource Stewardship.

MR. REID:

Okay.

This is

the sort of branch that would identify agricultural land in the Province and

things like that, in terms of Crown land, do soil testing and things like that?

MR. GRANTER:

Yes.

MR. REID:

Okay.

In terms

of Salaries, how many people work for this department?

What are the positions and

MR. DEERING:

There are twenty-nine people

employed in this particular division; 137 in the branch overall, but twenty-nine

people in this division.

MR. REID:

Okay.

In terms

of Professional Services and Purchased Services, what type of items would be

entailed under that line item there?

MR. DEERING:

In Professional Services, we

often have to pay fees for plant and soil analysis in labs outside of the

Province that we cannot do in our own lab.

Purchased Services, it is repairs and rentals on vehicles and lab equipment,

things like that.

MR. REID:

Does a lot of the soil

sampling and stuff like that go out of Province or is most of it done in-house?

Why would you have to go out of the Province?

MR. DEERING:

Most of it is done in-house

but there are certain analyses that have to go outside and certain projects that

we are engaged in that require the samples to be sent outside.

MR. REID:

Okay.

For certification and stuff like that?

MR. DEERING:

Correct.

MR. REID:

Okay.

In terms

of Land Resource Stewardship, for Employee Benefits there was $9,000 budgeted

last year, but the revised figure shows only $1,000.

Why was less money spent than planned?

MR. GRANTER:

Nine thousand?

MR. REID:

Yes.

MR. GRANTER:

I thought you said $90,000 to

$1,000 but

MR. REID:

No, $9,000.

MR. GRANTER:

Okay, $9,000.

That is

lower than anticipated expenditures associated with the registration fees for

seminars and conferences during the last fiscal year primarily related to

vacancies within that particular division.

Some vacancies would not have been attending seminars and conferences, so

that is the reason for the $8,000 difference.

MR. REID:

How many positons are vacant

there now?

MR. DEERING:

How many are vacant?

MR. REID:

Yes.

MR. DEERING:

In this division, we

currently have about four vacancies at the moment.

MR. REID:

Is there a difficulty

recruiting these type of people? Why

are the positons vacant?

MR. DEERING:

We do sometimes have to

extend competitions to find the right people for these positions.

We are taking steps to try to resolve those problems; but, yes, the

reality is graduate agriculturists are not easy to find in Newfoundland and

Labrador, unfortunately.

MR. REID:

What type of people are you

having difficulty recruiting?

MR. DEERING:

Professional agriculture

graduates from recognized universities.

MR. REID:

Okay.

For

Property, Furnishings and Equipment only $10,000 was spent and $35,300 was

budgeted. What is the reason for

this?

MR. GRANTER:

Again that is less than

anticipated purchases primarily related to vacancies within the division.

MR. REID:

Okay.

In terms

of Revenue Provincial the revised amount came in under budget: $10,600

compared to $33,000. Why happened

with the expected revenue?

MR. GRANTER:

That variance is less revenue

due to lower than anticipated laboratory requests that is soils, plant, and

feed laboratory during the year.

MR. REID:

Why is it back up to $33,000

this year why was it down and why are you anticipating that it will be up this

year?

MR. DEERING:

This year we have instituted

new measures in our limestone program which will require baseline information to

be collected prior to approving subsidies for limestone.

Each application will have to include lab analysis of soil conditions on

the farm.

MR. REID:

They will have to sort of

prove that limestone is needed there?

MR. DEERING:

That is correct.

MR. REID:

Okay.

Let's go

down to the next heading there, Limestone Sales; that is a good segue into that

area. How does this program work?

What is the subsidy? How much

MR. DEERING:

Essentially, the subsidy is

intended to cover the cost of transportation costs really to get the limestone

from the quarry in Cormack to locations throughout the Province.

Clearly, the folks who live closer to the limestone quarry would benefit

less from this subsidy and, obviously, the people who live further away from it

would benefit more.

Last

year, there was a significant increase in demand for limestone because we have

increased land development year after year.

As well, we had nutrient analysis taking place throughout most farms over

the past two years; this resulted in a higher demand as well.

MR. REID:

The subsidy itself, you pay

for the transportation, the price is consistent across the Province to the farm?

MR. DEERING:

There is a formula that

basically ensures that the subsidy covers the transportation costs.

MR. REID:

Why was the allocation

overspent last year? I think you

covered that

MR. DEERING:

Yes.

Because of increased demand for limestone as a result of increased land

development year by year, as well as farmers becoming more educated on the

dynamics of nutrient management on the farm.

MR. REID:

Okay.

For

Revenue Provincial the revised revenue for last year is higher than budgeted.

What was the source of this additional revenue?

MR. GRANTER:

The variance is due to

increased sales of limestone, as Keith just said, as a result of greater

industry demand for limestone during last year.

MR. REID:

Okay.

In terms

of Land Development, item 3.1.03, can you tell me a little bit about this

heading, what these expenditures are for, in a general way?

MR. GRANTER:

The Land Consolidation

Program is administered by the Land Resource Stewardship Division.

As of 2005, the program is a Province-wide expansion of the existing St.

John's urban regional land consolidation program, which was established in the

1980s. The program was approved by

Cabinet for the purchase of agricultural lands throughout the Province.

Under

the Land Consolidation Program granted, agricultural land is purchased from

retiring farmers and other land owners; once purchased, the land reverts to the

Crown and can then be reallocated to a farmer as an agricultural lease.

MR. REID:

It also includes agricultural

roads I think, is it? I am looking

at Land Development under heading 3.1.03.

MR. GRANTER:

No, it does not include

roads.

CHAIR:

Okay, your time is expired

there, Mr. Reid

MR. REID:

Okay, we will come back to

that.

CHAIR:

So we will move to Ms Michael

and come back to you later.

MR. GRANTER:

Sorry, it does include

agricultural roads.

MS MICHAEL:

Thank you, and I will

continue with that.

Last

year, I think we were told that the department had about thirty negotiations in

process with regard to the sale of land.

I am just wondering where things are right now with regard to the buying

of land and also the passing on of land to new farmers.

MR. DEERING:

I guess that would be kind of

a ballpark average in the numbers of negotiations we have ongoing at any one

point. We did manage to conclude

several negotiations last year and we carried forward a number of negotiations

into this year, as well as we have a number of new transactions that we are

negotiating.

MS MICHAEL:

Right.

Where

are we right now with regard to the number of acres that are being used for

agricultural purposes I think we were told that 100,000 acres is sort of a

point we need to get to for food security in this Province.

MR. DEERING:

At this point, we are still

using the number of about 25,000 acres.

We would have achieved about approximately an additional 1,000 acres,

ballpark estimate, in the last year.

We have recently submitted to the Interdepartmental Land Use Committee a

database containing about 180,000 acres, which obviously would be negotiated

downwards through their process. We

are hopeful that through that process we would achieve an available land base

for agricultural purposes in the range of about 100,000 acres.

MS MICHAEL:

Okay.

Is this

going at the speed you would like, or would you like it to be able to be a bit

more per year, or is it sort of what you see as expected?

MR. DEERING:

I guess we would like to see

a little bit faster progress with this, but with the budgets that we have for

land development and the numbers of new entrants and existing farmers we have

applying for the land, I do not think we could expect any faster development

than that.

MS MICHAEL:

Right, because at this rate

food security looks as far off as women's equality, at the rate we are going.

Let's hope we can get that speeded up.

I am not speaking to you in particular.

I think the government needs to look at that in general.

Thank

you.

Then

coming to the only line item under that well two, I guess, I am curious about;

one is the Property, Furnishings and Equipment.

It was revised downward by $181,000 last year, if we could have an

explanation, Minister.

MR. GRANTER:

Yes.

That is lower than anticipated expenditures related to the purchase of

agriculture properties. As

well, $150,000 was transferred to Grants and Subsidies and utilized for a grant

for Humber Village Limited towards the cost of labour associated with the bridge

repairs.

Thirty

thousand dollars was transferred to Administrative Support, Capital, to cover

overruns on the Foreign Animal Disease Laboratory that were incurred during the

year. The Estimates for 2015-2016;

the variance is due to a reduction of $100,000 related to government reduction

measures.

MS MICHAEL:

Okay.

Thank you.

I think

those are all my questions under that.

Going to

3.2.01, Production and Market Development, under Salaries there is a variance

upward from the budget to the revision last year.

This year we are down below last year's budget, so an explanation.

MR. GRANTER:

The increase was the higher

than anticipated costs associated with a temporary manager of agriculture

research position that was required during the year.

The Estimates budget salary increase for 2015-2016 is per the collective

agreement and also the planned salary step increases; also, a reduction of

$5,300 related to government's attrition management initiative, and a reduction

of $72,000-and-change related to a vacant IDO III position within the division.

MS MICHAEL:

So those two positions are

gone now. Is that what we mean by

that? We are down $40,000 from last

year's budget.

MR. GRANTER:

That is one position.

That is the one position.

MS MICHAEL:

The one position, okay,

relates to that.

Okay.

Thank you.

Under

Purchased Services we have a base budget line of $273,400, but there was a

variance upward last year in that.

MR. GRANTER:

Yes, that increase was the

higher than anticipated repairs of vehicles, including farm equipment, during

the year.

MS MICHAEL:

Okay, so that is basically

what the Purchased Services line there is mainly for, is it?

MR. GRANTER:

Correct.

MS MICHAEL:

Okay.

Thank you.

Under

Property, Furnishings and Equipment, I take it you maintain a baseline of

$73,200 and it

MR. GRANTER:

It is $63,200.

MS MICHAEL:

I am sorry, $63,200.

I saw $63,000 and said $73,000.

I think I had the $17,000 in my mind.

MR. GRANTER:

Yes.

MS MICHAEL:

You maintain that baseline

all the time?

MR. GRANTER:

That is correct.

MS MICHAEL:

Okay.

Under Grants and Subsidies, last year the budget and the real was

$253,500. This year it is going up

by $560,000. Could we have some

information on that line?

MR. GRANTER:

Yes, that increase to

$813,500 from $253,500 is the additional $560,000 that Budget 2014-2015 approved

related to government's five-year Cranberry Industry Development Program.

MS MICHAEL:

Okay and how is that going,

Minister? Are there new entrants

into that program, or is it just the development of the current enterprises that

are happening there?

MR. GRANTER:

Both, but mostly with current

enterprises with the anticipated new entrant in Deadman's Bay, I believe it is.

MS MICHAEL:

I thought I had heard about a

new entrant, but I was not sure.

Thank

you.

I think

that is all under that one. Coming

down then to 3.2.02, to the Marketing Board, there are no big questions there.

In Professional Services it seems like you maintain $45,000, though last

year you only spent $9,000.

MR. GRANTER:

That is correct.

MS MICHAEL:

What would be the

Professional Services under that? What would the $9,000 have been for last year,

for example?

MR. GRANTER:

One would be the Farm

Industry Review Board members.

During the year associated with, they had less appeals and complaints filed

under the Farm Practices Protection Act.

They would cover the cost of board members for meetings.

Also, some of these board members would also attend, I call them,

sub-boards, or they might attend the Egg Marketing Board or the chicken board

meetings as well.

MS MICHAEL:

Okay.

So it is expenses for that, but because they are members of the board,

they are professional services that are being offered.

MR. GRANTER:

Yes.

MS MICHAEL:

Okay.

Thank you very much.

Subhead

3.3.01, Agricultural Business Development; there was a big variance in Salaries

last year from the budget to the revision. Could you explain?

MR. GRANTER:

Yes, that variance is several

vacancies within the division during the year, as well as less overtime

expenditures than originally anticipated.

MS MICHAEL:

Okay.

This year it is up slightly from last year's budget.

MR. GRANTER:

Yes.

Budgeted salary increases, 2015-2016, as part of the collective agreement

and the planned step increases of $45,400, as well as a reduction of $6,700

related to government's attrition management initiative.

MS MICHAEL:

Okay.

I take it your complement of staff is complete in that division?

MR. DEERING:

We currently have three

vacancies in that division.

MS MICHAEL:

Okay, but you are

anticipating filling them I take it.

MR. DEERING:

That is correct.

MS MICHAEL:

Okay.

Thank you very much.

Subhead

3.3.03 and I am sure this would be in your notes when we get it, but could we

just know where exactly these Grants and Subsidies go.

It is $2,250,000. It is

maintained across the board so it seems pretty static.

MR. GRANTER:

Yes.

That is the Provincial Agrifoods Assistance Program, maximum grants of

$40,000, 50 per cent; 50-50 from a proponent as well as the department.

There were 183 projects last year from this fund.

We can provide the grants that were associated with those.

MS MICHAEL:

Okay.

Thank you very much.

I think

my time is up.

CHAIR:

Okay.

Mr.

Reid.

MR. REID:

Yes.

To get back to the issue related to the roads

MR. GRANTER:

What item are you at there,

Mr. Reid?

MR. REID:

It is 3.1.03, Land

Development.

MR. GRANTER:

Subhead 3.1.03?

MR. REID:

Subhead 3.1.03, yes.

MR. GRANTER:

Yes, go ahead.

MR. REID:

As you said, the roads are

included in that.

MR. GRANTER:

That is correct.

MR. REID:

I am just wondering how much

of that allocation is spent related to roads, and how much is spent on land

acquisition.

MR. GRANTER:

Keith.

MR. DEERING:

The $500,000 that you see in

Purchased Services is for access roads and electrical services.

We actually provide opportunities for farmers to build new roads to the

farm gate, as well as construct power lines into the farm.

A majority of this is used to maintain existing roads, but in any given

year you could expect to construct about five kilometres of new access road per

year.

MR. REID:

Okay.

It is just five kilometres overall in the Province?

MR. DEERING:

Right.

As I say, a majority of it is used for maintenance of existing access

roads.

MR. REID:

Okay.

These would be roads to private land or to ?

MR. DEERING:

That is correct.

MR. REID:

Okay.

Is that usually for one farm?

It seems like a small amount maybe to me.

How many people participate in this program?

How many farmers?

MR. DEERING:

We could have twenty-five or

thirty maintenance projects every year.

We may have several farmers who have farms off each one of those roads.

So it is hard to say how many people would exactly benefit from this.

Most new farms are established off existing road networks, but from time

to time we do have to construct small portions of new roads to access currently

un-accessed land base.

MR. REID:

This would include grading of

gravel roads in the spring and things like that.

Would you usually contract the Department of Highways, or how would that

be done?

MR. DEERING:

You are correct, it does

include grading. We hire grading

contractor's right from a government standing offer list.

MR. REID:

Okay.

So it is not necessarily through the department of highways, through

their equipment, it is sometimes a local contractor that is hired.

MR. DEERING:

We would tend not to use the

department of highways services for these purposes.

We exclusively go to outside contractors.

MR. REID:

Yes, okay.

Talking

to some farmers in my area, there is a big agriculture population.

There have been some delays I think this year in getting roads upgraded.

Is that a normal sort of thing, or is it a thing that happens often?

MR. DEERING:

Yes, we would agree that it

has been a late start. We have had a

lot of snow this winter, particularly on the West Coast.

In some of the areas I think you are talking about, there is still snow

in on the end of some of those roads.

So, yes,

you are correct. It has been

somewhat late on the West Coast. It

is pretty much on

schedule out east but on the West Coast it has been a little

bit late.

MR. REID:

Okay.

MR. GRANTER:

I just want to reiterate one

that I was dealing with recently, and as Keith just said, there is still snow on

the road. The snow has not left the

road, so it is difficult to get in there to do repairs when there is still snow

and ice on part of the road, especially on the West Coast.

I think you know what I am talking about as well.

MR. REID:

Yes.

In terms

of land purchase; generally speaking, how is that going?

Land acquisition, how is it going generally?

MR. DEERING:

This is a very important

program for the agriculture sector.

In places like on the Avalon Peninsula where the opportunity to increase the

agriculture footprint through public and private lands is becoming fairly

limited, this program is very important.

It is

hard to overestimate the importance that this has for farmers.

So I guess from our perspective it is an extremely successful program.

The rates we pay vary greatly throughout the Province, but it is an

extremely popular program. We tend

to have a lot of people inquiring about the opportunities to sell property, and

it keeps us pretty busy.

MR. REID:

Yes.

I guess

the idea is generally to bring land that might be lost to agriculture production

to keep it in agriculture production.

I am just wondering about other sort of lands that are owned or leased to

say logging for forestry uses.

One of

the issues that comes up sometimes when I talk to farmers is that there is

agriculture land in the Province that is not being used for agriculture.

It is being used to plant trees and stuff like that.

There does not seem to be a priority given to the agriculture industry in

terms of use of even Crown land and land that has been leased to pulp and paper

companies.

Would

that be an alternative to this sort of purchase of private land?

I am just wondering what the possibilities are there in terms of

expenditures as well.

MR. GRANTER:

I think it is a very good

question. Anything related to food

security and an increase in our ability to grow crops and harvest, and food

security in the Province, I think that is a policy kind of question, but I agree

that as we move forward that more and more consideration will have to be given

to using lands for agriculture and agrifoods development.

MR. REID:

Yes, I guess it is

expenditure. I will not belabour it,

but it is an expenditure question because we are expending money to purchase

land when maybe we already have access to land and it might be a more

cost-effective expenditure to reassign the uses of land that exists.

I am just wondering about that part.

MR. DEERING:

You are correct.

In order for us to achieve the food security objectives that we have laid

out for ourselves we will need to make progress on a number of fronts, including

purchasing private land but also including laying out an agriculture development

area footprint on publicly owned lands.

As I

mentioned to Ms Michael a few minutes ago, we have submitted a database of land

to the Interdepartmental Land Use Committee for about 180,000 acres.

We do not expect at the end of this process that we will have access to

all that. There will be some net

down of that land base but we feel, through that process, we will be able to

establish an agriculture production land base that new entrants and existing

farmers will have some certainty that they can apply to and be successful for

agriculture operations.

MR. REID:

How many purchases are still

pending?

MR. DEERING:

I do not have the exact

numbers in front of me. It is

sometimes very sensitive, particularly where negotiations are ongoing.

So I would not be able to provide specificity in terms of names and

things like that, but at any one point we have about thirty negotiations in

progress. That could be half a dozen

less or half a dozen more at any one point.

MR. REID:

In terms of where you are

purchasing land regionally in the Province, is it mostly on the East Coast or

West Coast, or somewhere else? Where

is the land being purchased?

MR. DEERING:

We like to focus our

attention through this program on opportunities on the East Coast, because the

opportunity for agriculture development on publicly-owned lands is becoming very

limited. Farmers depend on this

program in order to expand their existing operations to a very large extent.

That being said, land prices are coming up on the East Coast, and we have

been making more purchases in other areas of the Province in recent years as

well.

MR. REID:

Yes.

Just to

get a sort of sense of land and land issues, how much agriculture land is

currently available in the Province?

Currently in production, I guess, and currently available.

MR. GRANTER:

Twenty-five thousand.

MR. REID:

Twenty-five thousand acres.

MR. GRANTER:

Yes.

MR. REID:

Did that figure increase last

year? How much farmland was added in

terms of clearing and that sort of thing?

MR. GRANTER:

Yes it did, with a net of

about 1,000 acres.

MR. REID:

Okay.

I think

my time is up now, so rather than move to another heading I will just pass it

back.

CHAIR:

Okay.

We will move to Ms Michael.

I just

remind everybody, after this ten minute session we will have a short break.

MS MICHAEL:

Subhead 3.3.04 Agriculture

and Agrifoods Development Fund. The

fund is budgeted at $2,550,000 and last year we were not quite a million under

that but a fair bit under that in the revision.

MR. GRANTER:

All the detail I can give you

is that the variance is due to a savings related to a project.

MS MICHAEL:

Savings related to a project.

These are grants and subsidies right?

MR. GRANTER:

Yes.

MS MICHAEL:

To me, I would like to see

all the money spent.

MR. EVANS:

This particular fund is

targeted for larger projects of at least a million dollars.

There are a lesser number, if you like, proposing and there was a project

we had there was a delay, and last year we did not get it finalized.

I do not

know if Keith wants to add a little more to that.

MR. DEERING:

Yes, we sometimes have

projects that we intend to start that do not get started for some reason, which

explains the savings. We did have

two major projects that accounted for money that was spent last year, and I can

provide you with this list as well.

We have

an ongoing agreement with the Dairy Farmers of Newfoundland for land

development. It is a five-year

agreement that contributes $750,000 a year.

That largely accounts for the increase in land development for a lot of

it that we would see on a year by year basis.

That comes out of that fund annually.

As well,

we had $663,000 that we had spent to finish a project at Viking Fur in Heart's

Delight.

MS MICHAEL:

Okay.

As you said, they are large-scale investments.

MR. DEERING:

Yes.

MS MICHAEL:

What is your involvement in

encouraging, for example, the processing and value-added sectors within

industry? Do you just sit and wait

for companies to come or are you active in also looking at possibilities,

suggestions, that kind of thing? Do

you have any goals within the department, I guess is my question?

MR. DEERING:

We do a little bit of both. In our

Growing Forward 2 program, which will come up in the next subhead I think, there

is increased emphasis in GF2 on processing, and that is on a national basis.

We are getting a little bit more profile and interest from processors

through that program.

As well,

from time to time we do get interest from individual parties who are interested

in establishing processing opportunities in the Province, and it could happen at

any time. We are in discussions

currently with several people like that.

MS MICHAEL:

Okay.

Since

3.3.05 is the Growing Forward 2 Framework, let's talk a bit about that, because

I see the Grants and Subsidies under that program are budgeted over a million

higher than last year. Do you have

new expectations in this area?

MR. GRANTER:

You are under Grants and Subsidies.

There were 155 projects last year under this particular category.

The budget line 10, the additional $1,089,000-and-change approved in

Budget 2015-2016 is related to a carryover request of unexpended funds from

previous years.

MS MICHAEL:

Could we have an idea, these

are ongoing projects that are part of the program.

CHAIR:

Keith.

MR. DEERING:

programs we are not permitted to overcommit money.

MS MICHAEL:

Okay.

MR. DEERING:

What happens is at the end of every year we will always get projects that either

do not get completed or do not get started at all and will usually result in

savings.

What we

have had to do for the grants portion of this budget this year, we had to ask

for a million dollar carry-forward request, which accounts for the last two

years of the framework agreement.

MS MICHAEL:

Okay.

MR. DEERING:

Without this we would have

been forced to lapse a significant amount of federal funding.

So you likely will not see this in this program again until the last year

of the program. In order to clean up

the accounting in the last year there will be inevitable program savings at

the end of each year, which we will be forced to clean up in the last year.

MS MICHAEL:

Okay.

I may

have heard this, but I cannot remember.

Where are things with this federal-provincial initiative in terms of the

long term? I am not sure of the

length of time that has been allowed for in this.

You had one and now we are into two, so how long is the time frame for

two?

MR. DEERING:

It is again a five-year

framework agreement.

MS MICHAEL:

It is five years.

Okay.

MR. DEERING:

We are in the middle year

this year. Interestingly enough,

ministers are currently already talking about GF3.

Further to that, in 2017 we host the national table of the ministers in

Newfoundland which will be handy about the time we will be signatory to GF3.

MS MICHAEL:

Okay.

That sounds good actually.

I think it is a really important initiative.

There is no doubt about that.

I guess when we get the briefing notes we will be able to see the different

companies that are part of this.

MR. DEERING:

Absolutely.

MS MICHAEL:

Okay, great.

Thank you very much. I will

not get you to go through that now because of that.

I will

just see if I have any particular line items under that.

No. All of it is

self-explanatory.

Under

3.4.01, the budget line for Supplies last year was $509,600, and it was a

variance upward to $835,000.

MR. GRANTER:

That increase was for

purchase of training materials for the animal welfare division, for rabies

management, and increased cost of supplies.

MS MICHAEL:

Okay, thanks.

Under

Revenue Provincial, what is that in this division?

MR. GRANTER:

Is your question on the

increase from $580,000 revenue to $797,000?

MS MICHAEL:

Well what is the source of

the provincial revenue?

MR. GRANTER:

Yes, it would be vet

services.

MS MICHAEL:

Oh right.

Okay, I remember that now from other years.

Last year it was revised upward, quite a bit actually.

MR. GRANTER:

Yes, that was higher than

anticipated revenues as a result of the increased sale of supplies as well as a

change in the call fee schedule.

Basically, one of our farmers in the Province came back into using the

government-provided veterinary services as opposed to private veterinary

services. He was paying vet fees

that were not in the previous year, so that increased the revenue.

MS MICHAEL:

Right.

I think you talked about the veterinary services when we were doing the

Fisheries Estimates, so we have the report on that, where things are with the

vets.

That is

all I have at the moment, Mr. Chair.

CHAIR:

Okay.

We will take a break now and come back at 10:35 o'clock.

MR. GRANTER:

Come back at what time?

CHAIR:

At 10:35 o'clock.

MR. GRANTER:

At 10:30 o'clock, okay.

Recess

CHAIR:

We can start, if we are

ready. Mr. Mitchelmore, we want to

move to

MR. MITCHELMORE:

Subhead 2.1.02, Operations

and Implementation. When this was

being asked about, the vacancies in the regional office and lower overtime by, I

believe, Ms Michael; do you have a calculation of how much overtime was expended

in last year's budget in terms of the department overall?

MR. GRANTER:

No, we do not have that here.

MR. MITCHELMORE:

All of these would include

the smaller satellite offices, regional offices.

I am wondering about the total Annual Allowable Cut, the total AAC for

the Province. We were at 50 per cent

last year based on the estimates.

Are we at 50 per cent in last year's budget in terms of what was cut, or is it

less than that?

MR. GRANTER:

The answer to that is it a

little more than 50 per cent actually it is between 50 per cent and 60 per

cent.

MR. MITCHELMORE:

Between 50 per cent and 60

per cent, okay.

The

five-year plans, are any of the offices or their districts up to have their

plans done in this year's budget?

MR. BALSOM:

We are currently going

through districts ten, eleven, twelve and thirteen; they are underway.

MR. MITCHELMORE:

Will these forestry plans

have any type of impact on current negotiations with the 280,000 cubic metres

for the Central timber supply?

MR. EVANS:

The Annual Allowable Cut is a

sustainable harvest level, and we do not anticipate any significant increases or

decreases in the AAC.

MR. MITCHELMORE:

Okay.

Do you

have an update on the Rentech negotiations that have been going on for quite

some time? Is there dedicated staff

in the budget associated with this?

Do you anticipate being able to move forward in this budgetary year on an

announcement or movement?

MR. GRANTER:

The most recent meeting with

Rentech would have taken place in the last few weeks.

Conversations are still taking place.

As I said in the House, when we get to a stage whereby there will be an

agreement, then we will announce it.

If we get to a point in time when we feel that an agreement cannot be struck,

then we will make that known as well.

MR. MITCHELMORE:

Okay.

The

department is not looking at other Expressions of Interest that were submitted

all the ones that have been currently dropped are dropped and they are gone?

MR. GRANTER:

As a department, we want to

come to some ability to be able to use that resource.

Whether it is with Rentech or some other proponent in the Province or

outside the Province that is where we want to go as a department.

MR. MITCHELMORE:

Okay.

I wanted

to ask about the Silviculture Development on 2.1.03.

It seems like with the AAC being only at 50 per cent to 60 per cent of

its full value if it was all harvested, that is obviously having an impact on

silviculture development and the replanting efforts that the department would be

undertaking. If trees are not being

cut, then they are not going to be replanted.

Is this being sustainable for the long term?

Because right now my understanding is that people are basically getting

fourteen weeks' worth of replanting work.

MR. BALSOM:

You are correct.

As we catch up with the silviculture, we do close that gap on the

harvesting that took place prior to having the three large pulp mills on the

Island. The program itself will be

rightsized eventually to fit the current industry.

Again if successful in getting a proponent to harvest in Central, then it

would have to be adjusted accordingly.

MR. MITCHELMORE:

Okay.

Subhead

2.1.04, Resource Roads Construction, the $2 million change in budget you said is

basically on fiscal restraint; but does some of that have to do with the

priority of the fact that if there is not a high level of harvesting, less roads

and infrastructure is being committed, the same as silviculture development will

eventually decline in terms of what you can invest if you are not cutting the

trees?

MR. GRANTER:

The answer to that question

would be yes.

MR. MITCHELMORE:

Okay.

I want

to go back to 2.1.05 when we were talking about Holson Forest Products under

Loans, Advances and Investments. It

is my understanding, based on the Auditor General's report, that the Forest

Industry Diversification Program had ended.

So, where is this money coming?

Did it get re-profiled from somewhere else in the department?

MR. EVANS:

Yes, you are correct; it did

get re-profiled. The accounts are

still there. To re-profile it, we

had to seek and achieve Treasury Board approval.

MR. MITCHELMORE:

Okay.

This

went to the Treasury Board, got approval, a request obviously went in from the

company, and you would have reviewed their financial statements to ensure that

they could not afford their $65,000 in insurance.

MR. EVANS:

Yes, we have that information

on file.

MR. MITCHELMORE:

The company, subsidiaries of

the company, would not have $65,000 to make payment for the insurance on their

$12 million, $13 million asset, basically?

MR. EVANS:

That is what the information indicated.

They do cover insurance. I

believe it is on their sawmill.

Because of the financial difficulties we have opted in some cases not all

cases, all times to cover the cost of insurance on the pellet mill.

MR. MITCHELMORE:

This company received the

wood chip plant from Newfoundland and Labrador Hydro, which was sold for

millions of dollars. I am just

wondering where this is accounted for.

That sale went to Hydro-Quebec, a competitor of Newfoundland and

Labrador. Wouldn't the sale of that

asset, the decommissioning, be able to account for the insurance on such an

asset?

MR. GRANTER:

Yes, I understand some of the

equipment in that facility you referenced was used in his facility and the

remainder was sold. That is a

question that would not fall under the auspices of Forestry and Agrifoods, but

through Natural Resources.

MR. MITCHELMORE:

Right.

I understand that. In terms

of approving the insurance of an asset, you would have to get Treasury Board

approval, which was stated, and you would have to look at the financial

obligations of a company, its subsidiaries and whatnot.

So you would be looking at all departments and doing due diligence to see

if there were funds.

Based on

the public news release of The Telegram

and the Northern Pen newspaper it

stated that the Quebec company saved upwards of $10 million by purchasing the

chip plant. There would have been a

multi-million dollar transaction that would have taken place.

I am just wondering, if the company had made millions of dollars on this

particular sale, why they would not be able to afford $65,000 in insurance.

MR. EVANS:

It was not evident in the financial statements.

MR. MITCHELMORE:

Okay.

The new

business plan that was supplied for $120,000, did this go for a tender of any

sort? Does it meet the guidelines

within the department for hiring a consultant?

The tender, was it sole sourced?

MR. EVANS:

For the $120,000, there were three aspects: one was a business plan, one was the

engineering study, and there was another one for marketing, I believe.

Yes, it

did fit all the categories or qualifications of the tendering.

It was sole sourced to my understanding.

MR. MITCHELMORE:

Okay.

The

$50,000 that was awarded to ship the wood that is rotting in Labrador, the

Muskrat Falls timber; where would this be associated in your forestry budget?

MR. EVANS:

I will refer to Philip in a moment.

Ten thousand dollars came from Aboriginal Affairs and $40,000 came from the

forest industry and services branch in the last fiscal year.

That is correct, yes.

MR. MITCHELMORE:

Okay.

CHAIR:

Okay.

Michael, you are concluded. If you

do need to interject you can just let us know.

We will not run the clock anymore; we will just let Mr. Mitchelmore and

Mr. Reid

MR. MITCHELMORE:

I will go with Mr. Reid then.

He has some questions.

CHAIR:

Mr. Reid.

MR. REID:

Okay.

Let's go

back to agriculture again and this time under heading 3.2.01, Production and

Market Development. I just wanted to

get an overview of what the expenditures under this heading do, specifically

what are the market initiatives that are being undertaken by the agriculture

branch?

MR. GRANTER:

It provides marketing

services, marketing expertise, food safety, quality training, and implementation

of research and development activities.

It initiates market studies and critical assessments to current market

situations, conducts alternative crop research, and technology adoption and

technology transfer projects.

It makes

provisions for product engineering, nutritional formulation, packing technology,

expertise and quality control, and food safety certification.

Along with all of that, it disseminates product findings and marketing

information through technical and marketing briefings and reports, workshops,

information sessions, conferences, and personal communications.

MR. REID:

I notice one of the major

expenditures is Grants and Subsidies.

I wonder can we have a breakdown of the funding under that heading.

Who received the grants and what subsidies were provided.

MR. DEERING:

The largest portion of the grants in that subhead is $560,000 for the Cranberry

Industry Development Program. We are

in our second year of

OFFICIAL:

Five years.

MR. DEERING:

The balance of that is in the

School Milk Program.

MR. REID:

The School Milk Program.

MR. DEERING:

Yes.

MR. REID:

Okay.

I am

just wondering; the School Milk Program, I guess, is a very successful program?

MR. DEERING:

Yes, we would like to think so. Our

portion of the grant covers the packaging costs to put the milk in cartons

because it is not contained in the same cartons that you find on the store

shelves. The supplier, the processor

is not identified on the carton itself.

It has the School Milk label.

Both of the processors, both Central Diaries and Scotsburn, contribute the milk

that is in the carton.

We would

like to think it is a good program because it puts milk in schools.

MR. REID:

Yes, I guess the idea is

locally produced products in schools.

noticed in the news recently there was a private school that is very successful

in bringing local produce in the school.

I am wondering does the department have any initiative to expand that

private-school initiative into public schools.

Is there anything happening in relation to that?

That is a market, I guess.

Are we making any expenditures, or any initiatives to

MR. GRANTER:

Just to identify two

programs; Little Green Thumbs is a program as well as Agriculture in the

Classroom that our department is involved directly with, in the school system,

in the public system.

MR. REID:

Yes.

Those are, I believe, creating awareness of programs.

Sometimes they grow their own food and eat the food as part of that

program. I was more specifically

related into bringing healthy, locally produced foods into schools.

Are there any initiatives related to that?

MR. DEERING:

Currently, we do not provide

funding support to those types of initiatives.

Although through Agriculture in the Classroom and Little Green Thumbs, we

do promote that idea on growing and eating local food, and educating children

where their food is actually coming from.

MR. REID:

In terms of locally produced

foods in restaurants, I think the department has been doing some very good

initiatives in terms of connecting farmers and restaurant owners in the

Province. I do not know if you want

to tell us a bit about that.

MR. DEERING:

Sure.

We have a number of initiatives that we support and participate in.

One of the most popular ones over the last few years is From this Rock

Culinary Tour. We have a dozen or so

locations throughout the Province where we have very high-end chefs preparing

food from locally produced produce and from meat.

That has

become a very important connection between producers and restaurants, and has

resulted in some very interesting developments over the last few years for local

producers.

MR. REID:

Yes, I have gotten some very

good feedback on that from farmers and restaurant owners as well.

I think it is a good initiative that you should continue and expand on.

I am

just wondering in terms of tourism-related initiatives and linking that is one

of the things you are doing in terms of restaurants.

I am just wondering about agricultural operations, that want to sort of

combine what they are doing with tourism in some ways.

Some farmers have told me that, in some ways, government sort of

restricts how they can get building permits or things like that, or the way the

funding operates it sort of restricts if you want to have a combination

farm-tourism facility, if you want to have a market and those sorts of things

I am not sure; is that a concern in terms of marketing and market development?

MR. GRANTER:

All I can say to that would

be a general statement across government but if there are business proposals

that any aspect of industry in the Province wants to make, whether it be through

multiple departments, we are open to those kinds of proposals through individual

departments or across departmental lines.

There is opportunity there for tourism operators as well as with our

department to look at potential business opportunities across all government.

That is all I can say to that.

MR. DEERING:

I can expand on that, if you

wish. Our programs do not provide

opportunities for agri-tourism, although we understand that other departments

do. In our negotiations of Growing

Forward 2, there are very careful steps taken not to include agri-tourism

because of the opportunities that exist nationally for them to do that.

That being said, we do not necessarily discourage it.

Our focus and our programs is on commercial agriculture development.

MR. REID:

I guess some people are

saying that in Newfoundland the model for agriculture and sustaining and

expanding the industry is different than it might be in other parts of Canada

where you have a large-scale industry and the path forward is marketing through

small unfarmed markets and that way.

I am just wondering the rationale for that in terms of

MR. GRANTER:

That would be a policy

discussion that we could have. If

you want to sit and discuss it sometime, we can.

MR. REID:

Okay.

I think

I have another question here related to this heading before I move on to some

other things. In terms of marketing

boards, I am just wondering how many marketing boards are there in the Province

and what products they (inaudible).

MR. DEERING:

Currently, we have three commodity boards: one for dairy, one for chicken, and

one for eggs; one in each out of the three supply managed commodities.

Those are the only ones that exist at the moment.

MR. REID:

Okay.

MR. GRANTER:

Where are you to and what

subhead? Are you still under 3.2.01?

MR. REID:

I just switched to 3.2.02,

Marketing Boards, but I am going to go back to 3.2.01 now in relation to

marketing.

The

question that I was trying to think about there when I moved on: In terms of

food and markets and things like that I am wondering have you sort of

co-operated with any other departments such as the Department of Fisheries in

terms of establishment of local food markets and things like that.

Is that an initiative that you are exploring or that you would consider?

I think that falls under the Marketing heading.

MR. DEERING:

Up to this point, we have not had extensive collaborations with other

departments. We are still trying to

develop enough capacity in production to satisfy our own needs, but certainly we

see that evolution in other provinces where production capacity has been

achieved. We see collaborations

between food processing and other fisheries type sectors.

Eventually, I expect we will get there, but at this point we have not had

extensive collaboration for other departments, no.

MR. REID:

I was not necessarily

thinking about combining the products and marketing it, but establishing

facilities, local markets, where local food could be purchased.

MR. DEERING:

I am glad you made that clarification because we do provide funding supports for

the establishment of farm markets through our funding programs.

We have provided support to that in the past, yes.

MR. REID:

Okay.

I am

going to hand it back to my colleague there now.

MR. MITCHELMORE:

Subhead 2.2.02, Fire

Suppression and Communications. The

Salaries line that was budgeted was $2.25 million.

It was revised to $2.471 million and is now estimated to be $2.3 million.

Given the increase in Salaries for this year's budget, there are

obviously some positions that are likely terminated in this particular

situation. I would ask the minister

to explain this line.

MR. GRANTER:

Yes, the revised from

2014-2015 was due to obviously nobody has any control over the number or the

severity of fires that will take place in the Province in any given fire season.

That was higher than anticipated overtime, as well as shift differential

payments as a result of fires during the year, overtime.

For

2015-2016, the budget salary increase is as per the collective agreement and

steps, as well as a reduction of $9,900 related to government's attrition

management initiatives.

MR. MITCHELMORE:

How much would be accounted

for in terms of salaries and how much is overtime regular benefits and

overtime?

MR. GRANTER:

We can give you that

breakdown here shortly. While we are

looking for that we have had forty-nine fires to date this fire season.

MR. MITCHELMORE:

Forty-nine fires.

How many did we have previously?

Do you have those figures, Minister?

MR. GRANTER:

Last year?

MR. MITCHELMORE:

Yes.

MR. BALSOM:

Last year, we recorded 124

fires on the Island and Labrador. In

2013, the number was 101.

MR. MITCHELMORE:

Okay.

MR. BALSOM:

If we look at the area that

was impacted, in 2014 it was approximately 17,000 hectares

whereas in 2013 it

was 43,000 hectares, the difference being one large project fire that happened

up in Labrador. So the number of

fires really does not give a good indication of the cost of it.

MR. MITCHELMORE:

How much land would be

impacted resource.

MR. BALSOM:

That is right.

One large fire and you really could impact the program.

MR. MITCHELMORE:

While we are waiting for

those figures, Minister

OFFICIAL:

We have them.

MR. MITCHELMORE:

You have them?

Okay.

MR. IVIMEY:

With respect to your question

on the Salaries figures, approximately $260,000 is budgeted for overtime.

There is about $138,000 that is budgeted in other earnings which would

account for standby payments, shift differential and those types of things.

Then the remainder of the Salaries would be for actual permanent and

temporary and seasonal positions.

MR. MITCHELMORE:

Right.

How many employees work in Fire Suppression and Communications?

MR. GRANTER:

We are tallying that number

up. Did you want to move to another

question and once it is tallied, I will give you the answer.

MR. MITCHELMORE:

Yes.

Employee Benefits; in the Budget of 2014-2015 you had expected $40,000,

but yet $400 was spent, and nothing in this year's budget.

Can you explain the $40,000, what that was originally budgeted for that

did not get expended?

MR. GRANTER:

It is my understanding that

was lower than anticipated expenditures, with fees for seminars and conferences,

as well as membership fees and training sessions.

MR. MITCHELMORE:

Training sessions, okay.

So you do not anticipate going to any type of conferences, any type of

training or whatnot in this year's budget at all?

MR. IVIMEY:

Historically, that Employee

Benefits expenditure has been underspent.

If you go back to last year's Estimates, you would probably see a very

minimal amount spent under that subhead as well.

I do not

know if you remember, but when we actually had the Fisheries Estimates Committee

or Natural Resources, I am sorry.

Underneath my division there was a category for training expenditures that were

related to organizational development initiatives.

It was managed by the Human Resources Secretariat.

They

provide training for various types of things for multiple departments for

Natural Resources, Forestry and Agrifoods, and Fisheries.

Some of the training-type initiatives, the seminars and stuff that would

fall under for the Fire Suppression staff, are paid for from that subhead.

What we

have done for the upcoming year, for 2015-2016, is we have actually reallocated

that $40,000 to other subheads because, like I said, in the past number of years

we have not spent it and it has not really been efficiently allocated under that

subhead.

MR. MITCHELMORE:

Okay.

Property, Furnishings oh, you have the numbers, Minister?

MR. GRANTER:

Yes.

With regard to the numbers in the division there are 114 in total.

Five are permanent and the rest are temporary seasonal positions.

MR. MITCHELMORE:

Okay.

Property, Furnishings and Equipment took quite a bit of a jump there.

Is this what was used to purchase a water bomber?

There was a water bomber in last year's Budget I believe.

If so, does that bring our total up to four, or how many do we have?

MR. GRANTER:

That was higher than

anticipated Property, Furnishings and Equipment expenditures in order to

replenish equipment in preparation for the 2015 fire season.

MR. MITCHELMORE:

That was not a water bomber?

MR. GRANTER:

Some examples of that would

be smaller items like water pumps, hoses, and operational items that we would

need for fire discretion.

MR. MITCHELMORE:

Where does the water bomber

fall under in terms of financial

MR. GRANTER:

That falls under

Transportation and Works.

MR. MITCHELMORE:

It is a Transportation and

Works purchase, okay.

Line 02,

Revenue Provincial, $44,100, where would you be getting other provincial

revenue from under Fire Suppression and Communications?

MR. GRANTER:

That would be reimbursement

for cost of fire suppression predominantly in Labrador from the Grand River

Ironsands Inc. and A L Stuckless & Sons Ltd; or, if they were responsible for

actually starting the fire, then they would have to reimburse government.

MR. MITCHELMORE:

Okay.

How many

water bombers do we have that are currently in operation?

MR. GRANTER:

Five.

MR. MITCHELMORE:

Five.

Do you feel that we have sufficient fire suppression resources, teams, in

place to be able to adequately deal with forest fires here in the Province?

MR. GRANTER:

Yes.

MR. MITCHELMORE:

Okay.

I want

to ask a question about

MR. GRANTER:

Just in addition to that, if

circumstances are necessary we can available of services that can be provided by

other jurisdictions as well, like we have done in the past our own selves out to

other provinces.

MR. MITCHELMORE:

Okay.

You had

talked about the silviculture, that $1.4 million was paid to Corner Brook Pulp

and Paper.

MR. GRANTER:

What number are you at now?

MR. MITCHELMORE:

This would be 2.1.03 under

Silviculture Development.

That

money was expended to Corner Brook Pulp and Paper for the services that were

provided. Are there other

investments that you have made to Corner Brook Pulp and Paper this year that we

have not talked about that is within your department?

MR. EVANS:

No, the silviculture is the only they spend the money and we reimburse them.

Additionally to that, there was a five-year agreement.

The government covers the cost of forest inventory and protection on

their limits as well.

MR. MITCHELMORE:

Okay, so the $110 million

that was provided as a loan, which obviously went through Finance, the

Department of Forestry and Agrifoods has no aspect in managing or operating

expenditures, what is drawn on that particular fund or having that type of

dialogue, that would all be handled through Finance?

MR. EVANS:

We work with Finance on that. It is

a Finance file. As an example, any

advance for funding comes through us and Finance.

We review it and approve it as well.

MR. MITCHELMORE:

Okay.

MR. EVANS:

We work together with Finance on that file.

MR. MITCHELMORE:

Is there any particular

update that you can provide on the Corner Brook Pulp and Paper mill and that

particular investment?

MR. EVANS:

The investments prominently in the mill and Deer Lake Power seem to be doing

very well. The mill's cost of

manufacturing paper, they have certainly improved their costs and they are

probably the second or third in North America.

MR. MITCHELMORE:

Okay.

Is there

any plan to look at reinstating the rebate program such as wood pellets that

existed to try and develop a local market?

MR. GRANTER:

That would be a policy

discussion that we would have to have within the department and across

government.

MR. MITCHELMORE:

Okay.

Your

sustainable forest strategy lists primary investment to industry innovation like

bioenergy, biorefining, and value-added solid wood products.

You have a list for investments and grants here under

section 2.1.01 when

it comes to the Administration and Program Planning.

I am

just wondering if there are any funds moving forward to advance bioenergy,

biorefining, and value-added solid wood products do you have any investments

in this year's budget focused on your forest strategy?

MR. EVANS:

The investments would be in the form, primarily, of research in 'bio-products,'

value-added products, and any other products associated with the forest

industry. That would be the primary

investments. Steve, I do not know if

there is anything else

MR. MITCHELMORE:

Is there a line item or a

value attached, because I do not see the research aspects for any of those in

the budget?

MR. EVANS:

I am going to refer to Philip

on that one, just to make sure I am correct.

MR. IVIMEY:

Yes, underneath the subhead

2.1.01 is where the budget for forest research is located, and within that grant

budget there is $623,000 allocated for 2015-2016 for grants related to forest

research and innovation.

MR. MITCHELMORE:

Are they earmarked, or have

they been approved for anything at this point?

MR. EVANS:

Not all.

Some are a carryover from the previous year I would expect.

We do have a list of what was completed last year, but there are some

other new projects coming in line for this year as well.

So a bit of a combination there.

MR. MITCHELMORE:

Okay, great.

I have

some more questions but I know my colleague has some as well.

So just to be fair, I would go back to him at this time.

MR. GRANTER:

If I could, looking at the

clock, I know there are a number of sections we have not looked at; just a

reminder to stick to the line items.

If we get into a policy discussion we may not get through all of the line items.

So just a reminder on that.

CHAIR:

Yes.

Go ahead.

MR. REID:

In that regard, in relation to line item 3.2.01 Production and Market

Development, you mentioned earlier that one of the items of the main grants was

related to cranberries I believe, the cranberry project.

Is that correct? Could you

just give us an update on that cranberry program and how successful it is?

How much money does it actually receive?

How long has it been on the go, and what is the future of it?

MR. GRANTER:

The current industry

development program: $3 million from ACOA, $750,000 from IBRD, and $3.25 million

from Forestry and Agrifoods, for a total of $7 million over the next five years.

To get

to commercially secondary processing within the cranberry industry we need to

get to a minimum of 500 acres. This

investment of $7 million, with current people who are involved with the industry

farmers, along with a new entrant would take us to the 500 acres-plus within

this time frame of five years, which would then look at the ability to have

secondary processing of cranberries in our Province.

From all indications, it is a very high-quality berry that is being

produced here in the Province.

Second to none, really.

MR. REID:

Yes, I think it is a very

good initiative. It is a different way of

looking at agriculture in the Province.

We sort of look at root crops and things like that, while sometimes not

paying attention to the naturally adapted crops in the Province.

relation to cranberries as well; I will just jump ahead a little bit there in

terms of line item 3.3.04 Agriculture and Agrifoods Development Fund.

I notice $2.55 million are allocated under that heading.

That is to stimulate and attract large scale investments in agriculture

and agrifoods projects, particularly in the secondary processing .

The money that is expended there, how was that expended?

MR. GRANTER:

I will let Keith answer that,

but I believe Keith answered that question from Ms Michael earlier.

These

are, as you said, very large scale projects; projects that would require a

million dollar investment. We can

contribute $500,000 and proponents can contribute $500,000, or actually we can

contribute up to a million dollars.

So with that large sum of money, it kind of limits the players in the game as

compared to a project where you can contribute $40,000.

That gives us more people who are able to avail of funding.

I will

let Keith describe some of the projects.

MR. DEERING:

The money that we spent last

year, $750,000 of it was allocated to the second year of a five-year land

development program we have explicitly with the dairy farmers of Newfoundland.

That is exclusively for the purposes of developing forage land to help us

become self-sufficient in feed for livestock.

MR. REID:

Yes.

MR. DEERING:

As I mentioned, this is the

second year of a five-year program, and that will continue for the next three

years after this one.

As well,

we had contributed $663,095 to finish a project for Viking Fur.

That was valued at about $2.2 million for the full project.

This was the second year. It

took two years to finish that project.

MR. REID:

I am just wondering, what

have you been doing to pursue these large scale projects?

Do you go out looking for them, or do you wait for them to come to you,

or do you work with other departments?

How do you attract these?

MR. DEERING:

We certainly like to make

producers and processors aware of these programs because we think they are very

good. Obviously, most of the

existing industry knows about them, but from time to time we do have new

entrants that look for information on these kinds of things.

Also, we

have a website called AgPal.ca that any new entrant can go.

Through a series of dropdown menus you can plug in the information you

are looking for on agriculture programs and it will provide a list of programs

that are available, depending on the questions you ask.

Incidentally, we do have a very healthy appetite for this fund for this year,

and we do highly anticipate that we will be fully committed on this one this

year, on large scale projects.

MR. REID:

Yes, okay.

noticed last year there was about probably a million, close to a million yes,

over a million not spent. So this

year you anticipate it will be fully subscribed or fully used?

MR. DEERING:

Yes.

MR. GRANTER:

Yes.

MR. REID:

Okay, maybe the cranberry

processing plant might be one of them.

I asked

about marketing boards; back to the Professional Services and Purchased Service

under that line item 3.2.01. I am

just wondering what the Purchased Services were for there?

It went over budget this year and the allocation is up again this year,

so I am just wondering what the Purchased and Professional Services were there?

MR. GRANTER:

As I said earlier to a

previous question, that was the higher than anticipated repairs to some farm

equipment during the year.

MR. REID:

Okay.

Under

3.3.01 Agricultural Business Development Administration, in terms of the

Purchased Services and the Professional Services there, what did that involve?

MR. GRANTER:

Is the question on the

variance or a question on what is provided?

MR. REID:

On what is provided.

MR. GRANTER:

The funding is required for

guest speakers who design and deliver workshops for agriculture industry on a

variety of business and financial related issues.

Funding is also required for the hiring of consultants and outside

expertise related to the annual Agrifoods and Garden Show.

Under

Purchased Services, the funds are to provide for vehicle repairs and maintenance

and property assigned to this division.

Printing Services are expenses associated with meeting, training, and

seminars. It also includes building

rental, advertising, and other costs for agriculture fairs and events.

That is under Professional and Purchased Services.

MR. REID:

Under heading 3.3.03,

Agriculture Initiatives that is 3.3.03.

MR. GRANTER:

Yes.

MR. REID:

This is provincial

initiatives. What are some of these

initiatives? Can we get a breakdown

of how this funding was spent?

MR. GRANTER:

Yes, these are maximum

grants, as I said earlier this morning, to $40,000, 50-50.

It could be things like the purchase of tractors or other equipment that

might be on somebody's farm. Yes, we

do have a list that we can provide.

MR. REID:

Okay.

I think

I have asked the questions about the Agriculture and Agrifoods Development Fund.

In terms of item 3.3.05, Growing Forward 2 Framework, the Grants and

Subsidies, I am wondering can we get a list of those Grants and Subsidies under

that program. It is a big

expenditure. I am just wondering can

we get a breakdown of that.

MR. GRANTER:

The answer to that question

is yes.

MR. REID:

Okay.

Did you

want to go, Chris?

MR. MITCHELMORE:

Yes, I have a few more

questions.

MR. REID:

Okay.

MR. MITCHELMORE:

On 3.5.01, Research and

Development, the revenue side; last year the total Research and Development cost

the Province $189,200 because the feds had contributed over $700,000.

This year, it is estimated that Research and Development for agrifoods

will cost the Province $928,000. Can

you explain? Was this one-time

federal funding? Did it expire?

Why are we not pursuing federal monies?

MR. GRANTER:

That is revenue you are

referring to, right?

MR. MITCHELMORE:

Federal revenue

MR. GRANTER:

The $711,700?

MR. MITCHELMORE:

Yes.

MR. GRANTER:

Yes, that would have been

revenue received from the federal government associated, as you said, with the

federal AgriFlexibility cost-shared agreement that was anticipated to be

collected in 2013 and 2014. The

department would have submitted to the federal government the receipts to be

reimbursed that amount of money in the last fiscal year, but the federal

government did not actually get the cheque back to the Province until this

fiscal year. So it had to be

identified as a revenue line for 2014-2015.

MR. MITCHELMORE:

So is there any ability to

recoup any of the Research and Development dollars under this year's budget or

will it simply be zero? I understand

that this came in late and it should have shown up, maybe, in last year the

budget the year before.

MR. GRANTER:

The federal program has

ended. There is no more federal

program.

MR. MITCHELMORE:

Okay.

Thank you.

Back to

3.1.02, the Limestone Sales; I am clear on the sale aspect.

I just want to ask from an operational perspective that we are getting

about $35,000 worth of revenue for every $100,000 in operational costs.

MR. GRANTER:

Did you say 3.1.02?

MR. MITCHELMORE:

This is 3.1.02, Limestone

Sales. The Operating Accounts show

the dollars, $540,000 in the revenues.

If we look at what was budgeted, what was revised, and what is estimated,

we are operating at about a 65 per cent loss in terms of what it costs to

produce and what we get back.

Can that

be explained? Is there a way to

recoup more money from limestone sales?

Maybe there can be an explanation on that because right now, based on

what it costs to operate and what we are getting, we are losing 65 per cent.

MR. GRANTER:

Yes, the variance is due to

increased sales of limestone, as we discussed earlier.

For this year, we have changed some of the criteria.

We have added a couple of additional criteria that users of this

particular program will have to meet which would have an impact on the revenue

and the cost side.

Keith?

MR. DEERING:

Just a little bit more

background on the way this program works.

The request comes into our office for the limestone from all the farmers

across the Province. They make their

contribution to it as well. It is

not a 100 per cent subsidy, which is where this $174,000 was collected from last

year. Their contribution, more or

less, captures the cost of transportation.

There is

only one quarry in the Province which is located in Cormack.

It is a considerable expense for the folks in Eastern Newfoundland to

make use of limestone. It is

extremely important that farmers make the best use of this because without

proper pH and nutrient balance, productivity becomes fairly limited.

MR. MITCHELMORE:

Absolutely.

I just wanted that clarification around it, just for an understanding.

Somebody looking at these lines would say look at how much this is

costing for the revenue, but that explains it.

We are certainly getting the value back when it comes to the food

production that would come from using the limestone.

I wanted

to ask about the status of implementing the ISO 14001 Environmental Monitoring

System forest certification. I have

asked this in previous Estimates. Is

there a dollar figure associated with doing this implementation, a cost to the

Province?

MR. BALSOM:

Yes, we have been working for two years now on getting ISO 14001 certification.

We have been handling the costs internally with regard to doing the

training. One of the re-profilings

that we discussed earlier, moving one of the positions into administration, was

in relation directly to support this program.

MR. MITCHELMORE:

Okay.

MR. BALSOM:

We will be ready this fall

now to do our third party audit which we anticipate will be between $40,000 and

$50,000 for outside services.

MR. MITCHELMORE:

That would fall under

Purchased Services.

MR. BALSOM:

Correct.

I just

have to clarify, Professional Services.

MR. MITCHELMORE:

Professional Services, okay.

Will

this type of certification be there are different types of certification as

well after ISO. Will the Province be

pursuing land based, like forest certification of a company, people-based

certification, or both? Is that

something the department is undergoing right now?

Is there a dollar figure associated with it?

MR. BALSOM:

We have had an initial look at the various forest certification programs that

might benefit the Province, but right now they are primarily market driven.

Until we have a large-scale exporter, and depending on what market that

might be, it will kind of steer the way we go for certification, or if we need

to, or if a private company would do it similar to Corner Brook Pulp and Paper.

Right now, ISO 14001 will set the foundation for those certification

systems, and then kind of be the first step in achieving that, if we decided

or if we have the need to go down that path.

MR. MITCHELMORE:

Great.

I am very pleased to hear that.

Subhead

3.2.01, Production and Market Development Administration; I just want to ask

about the provincial revenue. It was

budgeted for $54,700 and only $6,300 was collected, yet you anticipate getting

the same amount as budgeted last year.

That is a $48,000 shortfall.

MR. DEERING:

I guess there needs to be an adjustment in future years.

Essentially, the $6,300 is related to the sale of seed potatoes from our

seed potato production facility in Glenwood.

MR. MITCHELMORE:

Okay.

MR. DEERING:

The balance of that in previous years would have been projected for cranberry

plug sales, but in the new program, as part of our contribution to the program

we are providing cranberry plugs free of charge to producers from our facility

in Wooddale. I expect in next year's

Estimates you will see an adjustment here to eliminate that differential you see

here. It will be down to $6,300 in

our anticipated revenues.

MR. MITCHELMORE:

Do you have a cost as to how

much work the Province is spending in giving away cranberry plugs?

MR. DEERING:

Our financial contribution to the propagation process is $190,000.

MR. MITCHELMORE:

It is $190,000.

I am not familiar with cranberry plugs, so maybe we could have a

conversation about this rather than in the particular Estimates around that

process because I would be interested in knowing more.

I wanted

to ask about the Growing Forward 2 Framework, 3.3.05, because from what I heard

is that there is carryover this year and there will be cleanup at the end.

I sat on the Public Accounts Committee when we questioned the Growing

Forward program based on the Auditor General's report when he had talked about

there was a lot of value from the federal government where receipts and things

were not being submitted. There was

a loss, I guess, in terms of what could be collected.

We lost some of the value in the overall agreement.

I am

just wondering, has the department taken steps and measures, and is the feds

allowing more flexibility in terms of the carryovers that take place for

projects that do not get done? At

the end of the agreement, will we be in a similar situation where the Province

is on the hook or will not be able to collect certain dollars from the feds?

MR. EVANS:

As a result of the Auditor General's report we have made modifications to how we

administer the program.

As Keith

said earlier, this is a carry forward mainly to invest the money in the industry

but also to capture the federal money that we would lapse.

So that is a critical part of it.

We may have to do it in year four of the agreement as well.

I do not

know if you want to fill in there, Keith, any more.

MR. DEERING:

Sure. Thank you.

To get

to the other part of your question about the flexibility from the federal

government; in fact, in negotiation of GF2 the federal government wanted to give

us less flexibility. In the initial

framework agreement, the federal government has written into the agreement that

we can carry forward 25 per cent from year to year of their contribution.

They wanted to bring that down in Growing Forward 2, but we managed to

hold it at 25 per cent throughout the multi-level framework negotiation.

It is still 25 per cent.

MR. MITCHELMORE:

Okay, thank you.

Scott,

did you have more questions?

MR. REID:

Just a few more, and then we

can go back to you if you like.

Someone

mentioned to me a program under Animal Health, 3.4.01 Administration and Support

Services. Someone mentioned a

project, the Chinook Project. I am

not sure what it is. I am just

curious as to what it is.

MR. DEERING:

The Chinook Project is a

project that is coordinated through basically the Atlantic Vet College.

Through this program they send practitioners to the North Coast of

Labrador to vaccinate dogs against rabies.

MR. REID:

Okay.

MR. DEERING:

There are a number of

innovative mechanisms they are trying, including chips and things like that.

It has been a very successful program, received very well by North Coast

residents. We anticipate that in

fact, it has already started for this year.

MR. REID:

Okay.

What is

the expenditure on that program?

MR. DEERING:

It is $15,000.

MR. REID:

Okay, interesting.

The

other questions I have are related to Research and Development.

I am just wondering how that fund is administered.

What is the application process?

How are they selected? What

criteria are used for selection?

Exactly what type of research is taking place?

Is it institutions, is it applied research on farms?

What type of research is going on?

MR. DEERING:

Thank you.

I guess

in previous years, I think as Mr. Mitchelmore has already highlighted, the

program used to be much more substantive with a $1.5 million federal

contribution, which expired in 2014.

Through that program, we were able to have an extensive process inviting

proposals from producers to do innovation and R&D projects.

We have

a very large compendium of the results of those projects.

Last year, unfortunately, the program because the federal program had

sunset, our program was reduced to $1 million.

For that we were essentially able to only achieve our own internal

projects, as well a couple of small projects from outside.

The main

project for us last year would have been our grain research.

We have managed to institute a program throughout Newfoundland now that I

think will be a game changer for livestock producers in this Province.

We have been producing spring wheat and winter wheat in various trials

which turned out to be extremely successful.

We also have projects related to soybean production on a potato rotation.

I have a

complete list of the projects we did last year that we can provide as well.

We are currently expanding on a research trial for growing grapes in

Newfoundland, which early results are very promising.

We are expanding on that one this year.

We are into all sorts of alternative property search in our internal

programs.

MR. REID:

Okay, interesting.

You

mentioned that the federal funding had been cut.

I guess there is a lot of possible take up, a lot of demand for this.

I am just wondering, in terms of additional funding for this type of is

there a lot of demand for this type of funding, this type of research going on?

MR. DEERING:

In the face of the AgriFlexibility Agreement sun setting, we tried to make our

case for the federal government to continue their contribution to that

unsuccessfully, unfortunately. They

were in the midst of budget cuts as well.

Collectively, with the other Atlantic provinces, we have now entered into a new

collaborative R&D program with New Brunswick, Nova Scotia, and Prince Edward

Island. We hope that we can build a

case collectively for the federal government to come back to the table on the

basis of this regional collaboration that is taking place in Atlantic Canada,

but we will not know that for sure until the beginning of next year.

Early discussions are promising.

MR. REID:

Okay.

I can

hand it back to you.

CHAIR:

Mr. Mitchelmore.

MR. MITCHELMORE:

Subhead 2.1.02 under

Operations and Implementation. I

just have a question around the wood permits that are issued.

Would this be where domestic wood permits would fall?

These would be the operators, I guess, the staff who would issue the

permits, and they would also issue the sawmilling fees.

In this

year's Budget 2015-2016, we saw a reduction in fees for small and medium sawmill

operators. Is the minister or

someone in the department just able to elaborate on why I think it is a good

move the fees were reduced for small and medium operators?

MR. GRANTER:

Back to your previous

question; it is domestic and commercial permits.

We just readjusted the steps with regard to your second question because

the small operators were paying as much, I believe, as the larger ones.

So we felt that it was better to look at the smaller harvesters with

their potential, compared to the larger ones, and reduce their fees.

MR. MITCHELMORE:

Right.

Those

fees were increased a couple of years ago to all be with the large operator.

Did you have anybody who may have lost their licence over that time, a

commercial licence? If so, would you

look at reinstating those licences?

Is that something the department would do?

MR. GRANTER:

The answer to that question

is no. From my knowledge, we do not

have anyone who would have lost their licence.

MR. MITCHELMORE:

Okay.

I want

to go back to 2.1.05, Forest Industry Diversification.

This allows for maybe a one-year continuation of at least the property of

Holson Forest Products because there is at least insurance covered on this

particular property. What is

actually being done? Will the

departments and staff at least talk to people in the region?

There

have been a lot of people who have lost employment in other industry downturns

like in Lab West and other regions.

When there are fish plant closures there is actually support provided through

the Department of Advanced Education and Skills.

Is there something that will be taken?

Although

this operator is still operating with a small number of limited staff, it is not

the sixty-plus staff that was operating a few years ago.

A lot of people had to leave to go find work and they are unemployed at

this point in time.

MR. GRANTER:

Yes, we understand the

importance of the forest industry to the Great Northern Peninsula.

As we said earlier in these budget lines, Holson has a new business plan.

They are shopping it around.

We have done a study on it.

I guess

the hope that you would have, and the hope that the people in the Roddickton

area and all throughout the Northern Peninsula would have is that they would be

able to shop it around and get some potential investors to partner with and move

an industry forward. I am not saying

the industry, but I am saying an industry forward in that particular region.

minister, I do not have any difficulties at all with my visits to the Northern

Peninsula to visit people in that particular area, the town councils, and the

industry players.

MR. MITCHELMORE:

I think there is a concern

out there based on that. This has

been something that started in 2009.

It was announced prior to this; the pellet plant, kiln, and integrated business

plan. It had a business plan.

It needs

significant investment, I think, to fully operate.

Unless a partner, unless somebody is going to make that investment and

either buy it up or whatever is going to happen in that private business

either that or government is going to have to either invest more money to see

that it be operational, or at some point government has millions of dollars in

loans here that are accountable to the people of the Province.

I guess

that is outside the frame of Estimates.

I think there is a lot of concern out there with the Rentech negotiation

taking years in terms of Central timber.

If we look at the Labrador timber supply just sitting stagnant and now

being subsidized to ship with a new business plan it could be years away

before we see any type of jobs for the people of this region.

There

has been a lot of investment into forestry by governments whether it is this

one or others into a linerboard plant in Roddickton, and in terms of other

sawmills. We are just not seeing

anything go forward. Probably this

conversation should take place outside where we have a meeting with your

officials, Jim, and others to further the conversation as to what really is the

plan for Roddickton and the Great Northern Peninsula.

MR. GRANTER:

As minister I have never shut

a door on a conversation on advancing any of the regions of the Province.

I have not done so in fisheries.

My door

is open for any suggestions from anyone with regard to potential business

opportunities that would exist in the forestry industry anywhere in the

Province. My door is open for that

and I would make my officials available to take any suggestions from anyone,

whether it is in the private sector, business sector, or from you in Opposition.

MR. MITCHELMORE:

Based on that and the

Estimates, I do not think I have any further questions, Minister.

There are certainly a lot of other questions, but they are not

necessarily linked to a line item here.

They can be loosely linked, but there is certainly more that needs to be

discussed when it comes to a number of the topics.

I am looking forward to engaging in dialogue on some of the initiatives

and seeing things as they unfold over the next little while.

May