October 5, 2000

PUBLIC ACCOUNTS COMMITTEE

The Committee met at 9:30 a.m. in Room 5083.

CHAIR (Mr. J. Byrne): Order, please!

My name is Jack Byrne, Chairman of the Public Accounts

Committee. I am the Member for Cape St. Francis. I don't believe we have any

media here so there is no need to address them at this time. Basically, I will

introduce the Committee and then we will go around the table for each individual

to introduce themselves.

I would like to first thank everybody for coming out,

as I said earlier. We don't know how long the meeting may progress, if need be

we will come back this afternoon, if not we will end it this morning. It depends

on the questions and on the length of the answers, and how many questions, of

course.

As I said, I am Jack Byrne. To my right is Tom Lush,

the Member for Terra Nova; he is the Vice-Chair. We have Mary Hodder, the Member

for Burin-Placentia West, and Roger Fitzgerald, the Member for Bonavista South.

From that we go to my left, go around, and then everybody can introduce

themselves.

MS MURPHY: Elizabeth Murphy, Clerk of the

Committee.

MR. J. BYRNE: I am sorry, I should have done this

in the very beginning. When we speak could we turn on the mikes and turn them

off when we are finished.

MR. ANTLE: Kevin Antle, Office of the Auditor

General.

MR. NOSEWORTHY: John Noseworthy, Deputy Auditor

General.

MS MULLALEY: Julia Mullaley, Audit Principal,

Office of the Auditor General.

MR. MOULAND: Gary Mouland, Director of Finance,

Department of Government Services and Lands.

MS KNIGHT: Barbara Knight, Deputy Minister,

Department of Government Services and Lands.

MR. PARROTT: Bill Parrott, Assistant Deputy

Minister, Department of Government Services and Lands.

MR. J. BYRNE: Thank you.

We have some people in the back too from the

department.

WITNESS: Yes.

MR. J. BYRNE: Would you like to name who they are,

please?

WITNESS: Do you guys want to introduce yourselves?

MR. BOGGAN: Wayne Boggan, I am Director of Crown

Lands.

MR. GARLAND: Reg Garland, I am Manager of Planning

with Land Management Division.

MR. CALLAHAN: Rick Callahan, Director of

Communication, Department of Government Services and Lands.

MS RUSSELL: Sandra Russell, Audit Manager, Office

of the Auditor General.

MR. J. BYRNE: Thank you.

What we will do now is swear in the witnesses. The

Auditor General's staff have been sworn in before but this gentleman here has

not been.

Swearing of Witnesses

Kevin Antle

Garfield Mouland

Bill Parrott

CHAIR: Thank you, Elizabeth.

Now, before we get into the questions, basically this

hearing was called as a result of the Auditor General's Report which ended March

31, 1999.

In the report the Auditor General had some concern

with respect to Crown lands and the administration of Crown lands. Some of the

areas that we are going to be looking at, of course, are the land use policies,

application process, monitoring, and the collection of accounts.

What we will do is have some questions from the

committee itself. Individuals in the back, if you have to refer to those people

we may have to get them sworn in at that time, but I expect those people at the

table can answer all the questions. I have known Bill for a long time now.

What we can do now is basically, if we have anybody

from the - John might want to say a few words on behalf of the Auditor General

leading in.

MR. NOSEWORTHY: We have no comment about the

report. I would like to say, just for the record, that the Auditor General

cannot be here today, her father-in-law passed away on Tuesday. The funeral

services are down in Carbonear so she could not be here. I have no statement on

the report.

CHAIR: Okay. Would any witnesses like to have any

opening comments?

Deputy Minister.

MS KNIGHT: Yes, if you don't mine I would like to

read an opening statement.

CHAIR: Yes, sure.

MS KNIGHT: Thank you for the opportunity to appear

before your Committee.

As a department we welcome the review and comments of

the Auditor General and recognize their value in achieving improvements to the

land management program.

I would like to take this opportunity -

CHAIR: (Inaudible) at your mike. Is it on? Is it

working?

WITNESS: They are all working.

CHAIR: I don't see the light on.

MS KNIGHT: Do you want me to start again?

I would like to take the opportunity to address the

major concerns that were identified in the Auditor General's Report and to

advise the Committee on the progress that the department has made since our

initial response to the Auditor General's Report in December 1999.

Lands Branch

Just a little bit of background, which probably is not

necessary for this group, but the Lands Branch is comprised of three divisions.

The Crown Lands Division is responsible for the application and allocation

process, the administration of the Crown titles, legal surveys, land ownership

mapping and the operation of five regional and sub-regional offices. The Land

Management Division is responsible for the coordination of land management

planning for the department, land valuation and coordination of land use

projects with other government departments. The third division, Surveys and

Mapping, is responsible for producing the base maps used by all government

departments and maintaining the geodetic referencing monument system. As you

know, the Auditor General's Report focused mostly on the activities of the Crown

Lands and the Land Management Divisions.

Identification and Use of Crown Lands

One of the concerns the Auditor General noted was the

identification in use of Crown Lands. She noted that there is no comprehensive

and complete land parcel identification system, in the Province. That is

correct, but it is a product of our history, culture and geography.

Whereas much

of Canada was surveyed and mapped before settlement occurred, this Province has

experienced over 300 years of settlement before the first legislation was

introduced in the early 1800's which permitted the local government to issue

land titles. As there is no compulsory land registration system a complete

listing of private land holdings is just not available. In addition, twenty

volumes of Crown titles containing approximately 3,000 documents were burnt in

the Great Fire of 1892 in St. John's; and many early titles have insufficient

survey data to permit location on index maps, while many other titles, as you

know, have their origin in adverse possession claims against the Crown which

entails a period of sixty continuous years occupation prior to 1977. For these

reasons, it is understandable why a system of compulsory land registration with

guaranteed land titles would be an extremely expensive process costing millions

of dollars and would take years and years to complete.

The cost benefits of implementing such a system are

questionable, particularly as the current system, in the department's view, does

not impose an unmanageable impediments to the management of Crown lands. Land

disputes between the Crown and claimants of Crown land are dealt with as they

arise and as claims are settled under the Lands Act and the Quieting of Titles

Act, the resulting survey information is added to the Crown's mapping.

The Geographic Information System (GIS) which the

Lands Branch has implemented within the past year is a tremendous resource that

identifies visually the location of known Crown titles. The GIS, essentially, is

a digital base map with various thematic layers or overlays that can be turned

on or off to select the information required by the user. The Branch continues a

major program to add as many titles to the data base as possible. Currently we

have 70,000 Crown titles of which 62 per cent are displayed on the system. We

are ongoing with our work in terms of putting more titles on the GIS system.

One of the great advantages of this system is that

weekly updated Crown titles information for the entire Province is now available

in the Department's regional offices throughout the Province. It replaces the

old paper based system which was comprised of one original map in the Crown

Lands Registry and copies elsewhere throughout the Province, which, as you can

imagine, was an impossible system to keep updated on a timely basis.

Land Use Policies and Planning

With respect to Land Use Policies and Planning: The

department continues to work with other departments to develop land use policies

to facilitate a coordinated approach to land use and management of Crown Lands

by government. The department made a presentation to the Committee on Outdoor

Resources on the process for large scale consensus based, land use planning.

Even with focusing on areas of higher use conflict, comprehensive land use

planning would involve widespread stakeholder consultation and the dedication of

significant financial and human resources over a number of years. It is

questionable as to whether this would be the most prudent use of our current

resources. Therefore, the department has taken the approach of focusing on

smaller scale plans and a consultative process with its sister departments.

It is important to recognize that a great deal of land

use planning that affects the use of land is going on within government and

being done by other departments, such as Forest Resources and Agrifoods, and

Tourism, Culture and Recreation (Parks). This planning does not take place in

isolation - government departments are regularly consulting with one another and

seeking input from each other. Nevertheless, it does not mean that improvements

in the coordination of planning initiatives can't be made. For this reason, the

department is taking steps to revitalize the Interdepartmental Land Use

Committee; ILUC, as most people might know it by. This process should be

completed by the end of the current year. In addition, our Land Management

Division has been reorganized with a greater focus on provincial land use

policy; and the Lands Branch regional offices have been delegated increased

authority for developing small scale planning projects which permits them to

play a greater role in the regional planning process. This has been made

possible by the recruitment of land management specialists in the regional

offices.

Application Processes

With respect to Application Processing: This process

for Crown lands is an open and transparent one with well documented policies and

procedures that involve extensive record keeping to keep the history of our land

titles and applications. I note that the Auditor General acknowledged that the

department was processing applications in accordance with legislation and

departmental policy. The Auditor General also pointed out though the lengthy

time it is taking to process many applications. As the department stated in our

initial response we were very aware of these delays and had initiated a review

to address these. Government responded to the recommendations that were in our

report and acknowledged that there was a lack of human resources in our regional

operations to sufficiently operate the application and title process and

approved six new positions in our regional offices. The additional new staff has

provided the Branch with the flexibility to reinstitute a more effective

monitoring system, resulting in reductions in the number of outstanding

applications, surveys being processed more quickly and generally faster decision

making. In addition, our computer systems of the application tracking monitoring

procedures have all been revised and policies and procedures implemented to

ensure timely monitoring and processing.

The Crown land referral system, which in effect is a

micro land use planning process, provides for consultation with government

departments, municipalities, federal departments and large timber and mineral

companies to obtain information before decisions are made on Crown land

applications. This process ensures that government speaks with one voice on land

allocation, but many times results in criticism about delays which are the

result of the extensive consultation process that the department is involved in.

Ongoing consultation with referral agencies and the

replacement of our eleven year-old Application Tracking System and Crown Titles

System with new software that will be integrated with the GIS will provide, in

the future, for paperless electronic referrals within government and instant

access by our referral departments to Land Branch information which will allow

for prompt and informed decision making. This combined with the protocol

agreements the department is developing with the various referral agencies, as

well as the continued land use planning initiatives we are undertaking, will

significantly reduce the processing and response times for applications.

Municipal Assessment Agency

The Auditor General noted that there were problems

with our handling with the Municipal Assessment Agency. Her recommendations in

this respect have been fully implemented. The application referral process has

been restructured and unnecessary referrals on land valuation to the Municipal

Assessment Agency have been eliminated.

EDGE

Comments were made on the EDGE program. EDGE leases

are now maintained in a separate file register and a protocol has been developed

with the Department of Industry, Trade and Technology to ensure monitoring of

EDGE companies with land leases. Land leases now include a specific clause

providing for a rent review and market value rentals upon the cessation of EDGE

status. Since the Auditor General's Report no companies with Crown leases have

lost their EDGE status and no new leases have been issued to EDGE companies.

Monitoring of Leases

The monitoring of our leases has been strengthened by

the addition of the aforementioned staff in the regional offices. This has

permitted monitoring of all titles due for compliance and while it is physically

impossible for us to inspect every title, through the use of leaseholder

affidavits and random spot checks, I am confident that the uses for which the

land has been leased are being generally adhered to.

Accounts Receivable .

The Auditor General noted that 89 per cent of our

Accounts Receivable were overdue greater than thirty days. We have not been

successful to date in reducing this percentage. The department, however, has

taken a lot of initiatives that we are confident, that collectively, will

increase the collection of rentals owing and reduce the percentage of

outstanding accounts receivable over time.

I would like to mention some of the things that we are

doing. Since the Auditor General's Report the Department of Municipal and

Provincial Affairs, which is responsible for handling our accounts receivable,

have restructured the accounts receivable office to ensure that equivalent of

five persons is dedicated to collections instead of the previous two. Collection

policies have been revised and will be forcefully implemented. A program of 300

personal contacts per week with overdue account holders has been implemented.

During the past summer overdue commercial accounts were specifically targeted

which resulted in greater revenue collections for that period.

Government has now implemented a new Financial

Administration System which will enhance our reporting and enable monthly

invoicing statements. Collection letters to be sent to overdue accounts will be

on line later this year. We are hoping that will happen fairly quickly, but it

may be towards the end of the fiscal year before that actually happens. This

completed with the recent issuance of 12,000 statements to overdue accounts and

the personal contact that we are now initiating should result in enhanced

revenue collection.

We are currently looking into the possibility of

charging interest or a late fee on overdue accounts along with the collection of

nominal rentals in advance.

Finally, the Director of Finance and Operations,

Garland Mouland who is with us, is providing reports on accounts receivable on a

routine basis to the department and the accounts receivable staff are spending a

much greater portion of their time working with Lands staff in the Lands

office's to enhance collection and title document administration. We are

confident that over time these initiatives will result in higher collection

rates and a reduction in our overdue accounts.

Geographic Information Systems

Just one last word on our Geographic Information

Systems. The Surveys and Mapping Division continues to build the digital base

maps for provincial use. The Land Management Division has completed the

digitalization of the Land Use Atlas while the Crown Lands Division has an

ongoing process to complete the Crown titles thematic layers. The Crown titles

information is now available through a computer intranet to all the department's

regional offices throughout the Province. These layers are available to all

government users and are fully integrated with the standardized base map

provided by the division which is, as I mentioned before, the foundation of all

government geographic information systems.

The Provincial Geomatics Implementation Strategy is in

the final stages of drafting and has been timed to take maximum advantage of the

developing software that will optimize the existing Internet software and

hardware to make GIS information available throughout the Province at a fraction

of the cost that it would have done a number of years ago.

Computer technology and Internet integration is being

actively pursued to combine the application and planning processes thereby

providing complete up-to-date and timely information to all our government

offices and to our clients.

I think I have addressed most of the concerns that the

Auditor General has raised. I hope I have addressed them satisfactorily or as

the department has, but we will be pleased to answer any questions that you may

have.

Thank you.

CHAIR: Thank you, Ms Knight.

I was going to say we probably should just accept your

report and then adjourn the meeting.

MS KNIGHT: We would have no problem with that.

CHAIR: But I am sure we will come up with a few

questions.

What we can do is move right on into questioning. Does

anybody want to ask some questions? Maybe we will start with Mr. Lush. Would you

like to ask a question?

MR. LUSH: This could be a great learning process

because if there is one thing that is truly a reflection of our culture, as Ms

Knight indicated, it is land. If we knew the right questions to ask it could be

a great learning process for all of us in this particular area.

Our history was a peculiar one and, as I said, land

certainly is one that suggests the peculiarness and the uniqueness of our

culture. It makes it difficult, in terms of the administration, because as

Newfoundlanders we all believe that we own a part of Newfoundland. We take great

advantage of that in terms of building cottages and camps wherever we want, and

that makes it difficult. Maybe we should do what one great Newfoundlander said

and that is divide the land up between all of us, give us a certain amount. I

expect, having said that, that the government is probably one of the richest

provinces with respect to land ownership since we are unique in the terms of not

having a compulsory registration. The way that we were developed, as they said,

I suppose any land that is in question, any land that is not registered, any

land for which there is no title, then the Crown automatically owns it, in

addition to all the land that is rightfully the Crowns. I believe I did see

there somewhere that the Crown does own a considerable amount of land, and land

is wealth.

Realizing the difficulty that our history imposes -

the deputy minister mentioned this and the Auditor General points it out as

well, that we do not have a compulsory land registration - I am just wondering,

though, how we are moving. I know again there was some suggestion that it may be

expensive but obviously the Province, the government, the people, must know what

the land situation is, how much we own, and who owns what. That certainly is a

desirable goal, a desirable objective to achieve. So I am just wondering how

fast we are moving towards that in terms of documenting every bit of evidence

about the land ownership and who owns what, this kind of thing, and the usage

for the land in the Province.

MS KNIGHT: I will address that in a very general

way and then I will ask Bill Parrott, who is our expert resident on this issue,

to follow up, Mr. Lush.

Crown Lands is only responsible for the Crown land of

the Province, which is about 95 per cent of the land base of the Province. That

is all we deal with. Private land ownership is not the responsibility of the

branch.

We have about, as we said, 70,000 Crown titles that

are actually registered that we know of and have put onto our Geographic

Information System. At least 60 per cent of those are on the system and the rest

will be put on over time.

I would like to ask Bill, if he can, to tell you a

little bit more about how we are trying to increase that, but there are a lot of

difficulties in doing so, and we are not moving forward with any kind of

compulsory land ownership. That is not in the cards for the future at all.

MR. PARROTT: Just to talk for a moment on the

Crown titles. As the deputy mentioned, there are 44,000 that have been plotted

and there are in excess of 70,000 that have been issued. Most of the easy ones

to plot have been put onto mapping and have been registered. People can come in

and look at that mapping and understand which is Crown and which is private

land.

We are blessed with the resource of having highly

trained, highly skilled surveyors and a lot of them have been with the

department a long time. The land plotting is a mini puzzle, a trip through

history and geography, to try and track down exactly where that parcel of land

is. So it is a time consuming process to try to plot a lot of these titles on

maps so we can understand where the Crown ends and where the private land

begins. That is an ongoing process, and depending on the priorities within the

department and within government at the time we have to move these surveyors to

other projects, whether it be to issue new titles or to work on special

projects. It is a project that we anticipate will take probably between five and

seven to ten years to get as many titles that have been issued by the Crown in

the past on base maps.

That only addresses the Crown titles. We are plotting

titles issued by the Crown, going back in history to the northern and southern

district courts. We are also plotting quieting and title certificates that are

issued by the Supreme Court of Newfoundland today, which is basically a Crown

title as well. So we have an ongoing process. As quieting titles are issued we

plot those on our mapping so people are aware that there is a title issued on

those pieces of land.

As the deputy said, we do not track subsequent sales,

that is registered in the Registry of Deeds and there is no ongoing program

right now to plot titles that are sold and conveyed through the registry. It is

a paper registry and it is not represented on mapping. On the Crown side of it,

we have an ongoing process and hopefully we will have that completed.

CHAIR: Thank you.

Now just a quick follow up question from my

prospective. The deputy minister referred to the Crown Lands being responsible

for all Crown land in the Province, and that makes up 95 per cent. The Registry

of Deeds comes under the Department of Justice, I believe. Has there been any

talk - because you have two groups within the Province dealing with land issues

and what have you, and of course that in itself could create some problems I

suppose, depending on how you want to look at it. Has there been any discussion,

that you are aware of, of combining both registries and bring them under either

- Government Services and Land, I would think, would be the most logical place

for it to go. Has there been any discussion?

MS KNIGHT: The Registry of Deeds, you are right,

used to be under the Department of Justice. It is under Government Services and

Lands today but it is a different branch. It is under our Commercial and

Corporate Affairs branch, but it is under the one department.

In terms of whether there would be any integration of

the two. No, at this stage there is nothing being discussed in terms of that.

The two systems are very different and it would involve a tremendous amount of

work to do so. I think we would have to look at whether there is an advantage in

doing that kind of integration, given the costs of attempting to do such a

thing.

The Crown Lands, as Bill noted, we are plotting those.

To my knowledge there has been no plotting on mapping of any of the privately

held lands in the same way, and that would be a horrendously expensive

proposition for the government to get into.

CHAIR: With respect to the plotting on the

cadastral maps and the updated maps. I left Crown Lands in 1983. I was there for

seven years and I was involved in that project at the time. Now we are talking

seventeen years later. I was (inaudible) must have been two or three years I

suppose, and twenty years later we are still doing it. Is funding a problem?

MS KNIGHT: Yes, there is never enough funding to

do enough. I will ask Bill, he can probably bring you up to date as to how much

we have done over those seventeen years.

MR. PARROTT: Yes, funding has always been a

problem and as you know, base mapping has been a problem. To actually have the

fundamental base map in a scale large enough that you can plot has been a

problem over the years.

The production of maps has gone down, the costs have

gone down. We actively have a partnering program with industry that allows us,

in many cases, to partner at fifty-cent dollars so we can acquire twice the base

maps as we could normally paying the full shot. Some of those projects have been

down as low as 25 per cent or 20 per cent dollars as we partner with

municipalities, major utilities and sometimes the federal government. That has

been a big help. We get funding for that every year and it has been an ongoing

program. As those maps are produced they go into the system. The new GIS has

been devised so that they automatically go into the system. Any new titles are

automatically plotted on it. We still have surveyors who are assigned a specific

duty to do historical research on other titles that are in an area, to plot them

that are currently not on the system.

Just on a point, on the Chairman's first question

about linking the two registries. The Crown Lands GIS in its design has a parcel

identification number built in so that in the future if the Province starts

mapping the Registry of Deeds then those parcels will be immediately linked to

the Crown Lands data base and the Crown Lands mapping so that the two systems

will work together.

CHAIR: Merge.

Are you finished Tom?

MR. LUSH: No, but we can go on. There are others

questions I have (inaudible).

CHAIR: Roger, would you like to ask any questions?

Mary Hodder.

MS M. HODDER: First I think (inaudible) the

questions that we have here this morning. Barbara you have answered - when you

did your

summary when you began here this morning but one question I am not so

sure was answered. That is the Auditor General noted that the average amount of

time for an application for Crown land is 619 days. She also found that 262 days

were attributed to the applicant, and that leaves 357 days for the departmental

process. Does this seem a very long time?

MS KNIGHT: Yes, to be quite honest Ms Hodder we

are not quite sure where those figures actually came from. We did a study, as we

mentioned earlier. We were aware of the extraordinarily long time that it was

taking to process applications and we did have a detailed study done on that

process. The time frames in that report were given. A review was done, spot

checks were done and a number of applications taken out. The length of time for

all those were detailed in that report which you have in your document.

We have since done some of our own monitoring of the

time that it is taking to process applications. We did a monitoring program in

February of this year. We did a random sample of 100 applications and what we

have found is that our overall processing time for application approvals has

decreased from an average of fifty-two days in 1999 to twenty-nine days in 2000.

In our regional offices in 1999, our figures show that we were taking - this is

just within the Crown Lands portion. It is not the portion that was referred out

to the referral agencies but within our own system.

In the eastern office we were taking sixty days in

1999 and we have that down, in 2000, to thirty-two days. In our central office

we have gone from thirty days to twenty days. In our western office we have gone

from forty days to thirty-three days, and in Labrador we have gone from

seventy-six days to thirty-two days. I think that demonstrates that we have been

making some progress in getting our referrals down. Now on top of that we also

have the length of time that is involved in which the referral out to the other

departments, and that would be added on to the processing time that I have just

mentioned here. There have been tremendous strides made in reducing the length

of time that it is taking, from the first time that the application comes into

our office and the time it goes out as an approved and Crown title.

CHAIR: I just want to note that Mr. Joyce and Mr.

Sweeney just joined us. We will certainly get to you guys with respect to

questioning.

John, do you want to comment on this?

MR. NOSEWORTHY: Yes, we certainly went through the

report with the department before it was issued and this would have been

discussed then. We selected a sample of fifteen approved applications and the

details, which I have here in front of me, are broken down by departmental time,

referral time and applicant time. The average of those fifteen is 619 days and

the sample was selected from the system.

CHAIR: Obviously you are working on that?

MS KNIGHT: Absolutely, and as I say, I think the

sample that we did in February was 100 applications. The times that I have

mentioned are just for the times when the application is within the Crown Lands

Division. It does not include the time which it is referred out to an outside

agency and comes back. That time frame would have to be added on to the times

that I have just given you.

CHAIR: Sure.

With respect to that - just before we go - seventeen

years ago we had the same complaint, I think, a long time in processing Crown

land applications for cottage lots, residential or whatever the case may be.

Have we improved?

MS KNIGHT: Yes, I think we certainly have. I think

the figures I have given you have shown that we have improved. We are also

working very hard with the referral agencies, in the referral process, to get

that process down. As I explained, for every application it is sent out to any

department that might have an interest in that piece of land. We have reviewed

that process and that obviously is taking much too long. It is a little bit

outside our hands to ensure that the application is reviewed quickly by other

departments but we have been dialoguing with these departments and they have

agreed to sign protocol agreements with us which will clearly spell out what

their responsibilities are and the time frames in which they have to meet those

responsibilities. We are hoping, over the next several months, that we will

actually be able to sign off on these agreements. Then it will be very clear as

to when they get the application from us, how quickly they are to review it and

get it back to us. That should cut down a lot of the time that it is now taking.

I think it is fair to say, and should be recognized,

that this is a complicated process. A lot of the applications are simple but a

lot of them are not. Even with the most sufficient processes some of them are

going to take a long time. It is just the nature of the beast.

MR. LUSH: There are nine months for which you are

not responsible, just about; 262 days for the applicant, whatever these problems

might be.

MS KNIGHT: Yes, exactly. Once we complete our work

then it has to go to the applicant to get his survey and whatever. That is up to

him, in terms of time, how quickly they get it back.

CHAIR: Mary.

MS M. HODDER: Well this is one of the issues, I

guess, that can become most frustrating for us as MHAs and for the individual,

is the length of time that it takes in the processing. I know that in some cases

I have had to deal with it has well exceeded the 619 days. For example, I know

it is a unique case - and I am sure all of our MHAs or a lot of them have unique

cases - but the Red Harbour situation, which has taken over thirty years, can

you give me a comment on how that is progressing right now? Because the last

time we met we were hoping to get that resolved within the next six months or

so.

MR. PARROTT: Red Harbour is not a normal process.

Red Harbour is related to the resettlement program and there are no Crown lands

applications in the system. We have done considerable research on the topic of

resettlement and so far we can find nothing that would change the decisions that

the department has made over time on that matter.

CHAIR: Okay.

MS M. HODDER: I don't know if anyone is familiar

with the Red Harbour situation but it resulted from the resettlement back in the

1960s. When the people decided - in a lot of the isolated communities like Port

Elizabeth and these communities - to move the people in Port Elizabeth asked

rather than to move into a settled community like Rushoon, Parkers Cove,

Placentia or some of those settled communities, or Marystown, that they

establish another community, the community of Red Harbour. At that time I think

there was probably $1,000 to $3,000 given as a resettlement bonus to people who

would be resettling but these people decided to forego their $1,000, $3,000 or

whatever, to put water and sewer services through the community. They understood

at the time that they would be receiving land for the land that they gave up in

the communities that they left. Up to this date there has been a problem in

getting ownership of that land. Is that correct, Bill?

MR. PARROTT: No, there has been no problem. The

Crown is prepared to issue Crown titles.

MS M. HODDER: But they are asking for the market

value.

MR. PARROTT: Yes, the Crown is asking for the

applications to be processed at the time that the applications are made.

CHAIR: Are you saying now that people - because I

had a question I was going to ask about the resettlement and the lands. Now

people are applying back on various islands. They are applying to get grants on

their old family land type of thing. Are you saying now they have to purchase

that through Crown Lands at the market value?

MS M. HODDER: I am not asking about the land that

they left. I am asking for the land that they acquired when they came to that

area.

CHAIR: Okay, yes. Well that's a question I have.

MR. PARROTT: The land that they acquired, the

resettlement program, when people moved on to land they were supposed to acquire

Crown titles under the system in place at the time. The people in Red Harbour,

for whatever reason, and there are a lot of other people who have not acquired

titles to the property that they were on. There was no program of government to

issue titles to those individuals so throughout the years we have been issuing

titles to people who have resettled, depending on the Crown land policies and

processes in place at the time of application, and that's what happened. That's

the situation in Red Harbour.

MS M. HODDER: That has been a frustration for the

people there because they still don't have clear ownership.

MR. PARROTT: That's right. They have said they

want a free title.

CHAIR: What was the other issue?

MR. PARROTT: Resettled communities. People left

the communities - and going back to the deputy minister's opening comments about

our history and culture. In many of these communities people had lived on the

land for greater than sixty years and they have adverse possession against the

Crown. So they in fact own the property that is back in these communities. We

have not been processing applications under fair market value for people who are

going back onto resettled areas that is in effect private land.

CHAIR: That basically comes under - in my time it

was

section 34 of the Crown lands act when they had made the changes to -

MR. PARROTT: Yes, it is

section 36 now in the new

act. These people have dispossessed the Crown of title if they were there for

sixty years prior to 1977 or twenty years, and they can get a Crown title.

CHAIR: Did they not, at that time, have to have an

application in for that land within a certain period of time or they would not

qualify under

section 34, which is now

section 36?

MR. PARROTT: No.

CHAIR: Okay, Mary.

MS M. HODDER: Has there been any consultation

recently to try and resolve that situation?

MR. PARROTT: Not that I am aware of.

MR. LUSH: What has happened to all of the land on

the islands that were resettled and the people owned then (inaudible) Crown own

it?

MS M. HODDER: Okay, that is one that I will be

bringing up before the end (inaudible).

CHAIR: What is happening with respect to it, as we

were just saying, is the land that had been occupied for many years - say on

various islands and remote areas, for example, Placentia Bay - and were

resettled in the 1960s, the people can either get it through the Crown -

actually apply for it and get their title back on the land - or do it through

quieting titles through the courts; either or but normally go through Crown

Lands because it is much cheaper. The process, is it correct?

MR. PARROTT: Yes, that is correct.

CHAIR: Roger, do you have questions?

MR. FITZGERALD: Yes, first of all, Mr. Chairman,

maybe I can start off with an observation. I am of the firm opinion, contrary to

what the Vice-Chairman said, that we should divide all the land that we have in

the Province among the people who live here. I think we should take the land

that everybody has and nobody should own land. I have always maintained that the

Crown should own the land and should collect a nominal fee for the use of that

land. Why should I go up to a -

MR. LUSH: You should go and join Mr. and Mrs.

Milosovic.

MR. FITZGERALD: Why should I have to go up to a

subdivision in Cowan Heights and pay $40,000 to occupy a piece of land or to buy

a piece of land? You might say that you realize the fair value of that land back

when you sell it but when I go to purchase something I can use the $40,000, I

think, much more so than probably in fifteen or twenty years time or whatever,

when I decide to sell the land.

There have been more bad friends, I think, caused over

land especially in rural areas than there has been in the two World Wars. I

think back to my father-in-law who was a great believer that land was willed. He

had to have a lot of land and he did. He had a fair amount of land out in

Harbour Grace and when he passed away, guess what? My wife was the only person

that did not get a share of that land because he knew what my intention was,

that I would get rid of it immediately. I have a little building lot and that is

all I want, thank you very much.

That is my own thoughts on the land, but getting back

to some of the questions that I have noted here. Barbara, you indicated and you

gave a time frame of how long it was taking now for people to apply for a piece

of land and when it would be finally completed. What would you consider a normal

time frame?

CHAIR: Acceptable time frame.

MR. FITZGERALD: Acceptable time frame.

MS KNIGHT: I think the time frames that we have

gotten our application processing down to, within our system that I have given

you, a month to six weeks is probably - for routine applications that do not

have a lot of problems - a good time frame. We are looking at, with the referral

process out to other departments, we are trying to convince those other

departments to do a turnaround within thirty days. We may not succeed in that

figure with all departments, for various reasons, but that is what we are hoping

to achieve. Some of them may be longer. Then, in terms of once the approval is

gone out to the individual and he has to get back with his survey, I mean that

we cannot control. That is up to the individual how quickly he wishes to

complete that process.

CHAIR: You usually give him a year, don't you, to

have it surveyed?

MS KNIGHT: Yes.

CHAIR: One year.

MR. FITZGERALD: Yes, so if I apply for a piece of

Crown land today, first of all I have to be within the boundaries. If it is a

piece of Crown land for residential purposes do I have to have that piece of

Crown land in the boundaries of a municipality in order for it to be approved?

MS KNIGHT: No, the Crown land can be anywhere in

the Province.

MR. FITZGERALD: For residential purposes?

MR. PARROTT: For residential purposes it is

usually within a community. There are certain conditions such as infilling

limits established on rural communities which is designed to encourage the

development to be in a core area and not strung out along the road which costs

more to service and more for the municipal infrastructure, things like that. So

I guess the short answer is, we direct most residential. Unless there is some

specific reason otherwise, like it is related to a farm or something like an

agricultural project, or something that you need a residence next to the site,

we would direct people towards municipalities, yes.

MR. FITZGERALD: A lot of incorporated

municipalities do not have their boundaries defined. A lot of smaller

unincorporated communities, not only do they not have boundaries but there are

very little services there, other than maybe a garbage collection. So I am

wondering why you have the criteria of having to live within the boundaries or

having to have the land within the boundaries of a municipality or a community?

Because sometimes this is a delaying process as well where you have to go - in

order to get that piece of Crown land approved to build a residence you then

have to get the boundaries of the community extended before it goes any further

towards the process of approval.

MR. PARROTT: That is correct. If there is not land

available within the community then our department, along with the Department of

Municipal and Provincial Affairs Provincial Planning Office, will consider

extending the infilling limits to increase the land area that is available for

residents, yes.

MR. FITZGERALD: A lot of people too, Mr. Parrott,

have a problem with the way government looks at remote cabin lots, what they

consider remote cabin lots. There is a difference in price to acquire one of

those lots. A lot of people today are getting cabin lots. I think that is our

history too, a lot of us want to have a little cabin in the woods somewhere, a

place where we can go; or Florida if you would.

CHAIR: Do you agree with that?

MR. FITZGERALD: Do I agree with what?

CHAIR: Having cabin lots?

MR. FITZGERALD: I agree with somebody having

access to a cabin lot. Whether he should own it or not is another argument.

What constitutes a remote cabin lot versus an

accessible cabin lot, I suppose?

MR. PARROTT: A remote cabin lot is a cabin that is

inaccessible by road or a road cannot be easily built to it, say greater than

1,000 metres. That would be a remote lot.

MR. FITZGERALD: If somebody has access to a cabin

by a trike or by a trail as such, would that be a remote lot if they could not

drive to within 1,000 feet of it by an automobile or a recognized road vehicle,

I suppose?

MR. PARROTT: Yes, we would consider that remote.

MR. FITZGERALD: How about Crown land as it relates

to mining? If I am going to stake a claim and if it is Crown land, land owned by

the Crown, how long do I have access to that piece of Crown land without showing

any indication that there is progress taking place there to carry out a mining

operation?

MR. PARROTT: Well mining is under the Department

of Mines and Energy, under the Mineral Lands Act. We do not administer mineral

lands in the Crown Lands Division, that is a separate right related to land.

CHAIR: Along the same basic issue, with respect to

the turnaround, has there been any thought given to - because I know you have to

refer applications to Works, Services and Transportation, Environment, whatever,

maybe Justice sometimes. Is there any thought given to having a person from say

Works, Services and Transportation, Environment, from the various departments,

work within Crown Lands itself to handle that and speed it up, or does that make

sense at all?

MR KNIGHT: What we have done with the protocol

agreements that we are going to be negotiating with these departments, what we

have looked at and the arrangement for most of them that we have come up with is

identifying a person within that department - in, for example, Forest Resources

- who the applications would be referred to so that there is a person, that we

know who that person is, and who is responsible for that within that department.

Hopefully, knowing who that contact person is, that will speed things up and

they will be responsible within their department for ensuring the application

gets dealt with.

CHAIR: Okay, that makes sense.

Roger, are you finished or will we move on, because we

can always come back?

MR. FITZGERALD: No, I will give somebody else a

change to ask, and I have a couple of more after.

CHAIR: Mr. Sweeney.

MR. SWEENEY: Thank you, Mr. Chairman.

I do not know who I should address, Barb, either you

or Bill. I have a fundamental problem with regard to Crown land within

municipalities where an applicant or a person finds or discovers a piece of land

within a community and his first step is to the municipality where the council

has the right to say yes or no to that person before he can make an application.

I had an incident last year where an applicant was

basically ignored. He went to a number of council meetings and could not get a

yes or a no as to whether he could proceed to the next step, which was to make

an application to your department. Lo and behold, of course after one or two

council meetings, other people found out and subsequently, I think, at least two

more people went to council and received approval to come to your level. In the

meantime the first guy was left out in the cold.

CHAIR: On the same piece of land?

MR. SWEENEY: The same piece of land, yes.

Now it smells of - there is a little fishy odor at the

town level, but I think and I feel personally is that if it is Crown land it

belongs to the Crown and the Crown should decide whether or not that person

should proceed with his application, not a municipality, which when we get into

small communities -

CHAIR: On that issue, before you answer, I think

you have two points going here. If you find a piece of land, and you say you go

to a municipality, the municipality obviously has to have the right to say if

they are going to approve it for a residence or whatever the case may be, but

the problem arises when Crown Lands, I think - I had a similar situation in Logy

Bay where a piece of land was discovered. It went to the town and then the town

went to the department and said: listen, we will have to put this up on a draw.

Whereas the person who found it in the first place was left out in the cold. So

you have two things going here. What are your views on that?

MR. PARROTT: The process within municipal

boundaries is we have a municipal assessment form that we ask the council to

fill out. The reason behind that is because the councils, being the elective

representatives, have zoning powers and they also have permitting powers within

the municipality. So basically, even though it is a piece of Crown land, people

cannot build on it or use it unless they can get the necessary permits and

approvals in place in the municipality. We would like to work closely with the

municipalities because they are, as well, administering the land from the

regulatory point of view. It is a way that keeps the municipality advised of

exactly what is going on within its boundaries. We even refer the

section 36s,

which are squatters' rights applications, to the municipalities as a courtesy so

the municipalities are in a loop all the way and they are a valuable resource in

information.

Going back to the situation you mentioned there, if

somebody goes to a council and they cannot get the information or whatever, then

they can come back to the Crown and say: Listen, I went to the municipality,

they will not dealing with it. At that point we will take and process the

application.

CHAIR: Yes, but what is the policy though? Is the

policy first-come, first-served or if there is a piece of land identified within

the municipality does the municipality have a right to say to Crown Lands:

listen, we do not think this person should get it just because he found it

first. It should go up on a public draw?

MR. PARROTT: No, we operate on a first-come,

first-served basis, unless there is a freeze on in an area. If an area has been

frozen by the Crown from applications, for whatever reason, then the policy is

that any lots allocated then would be allocated by a public draw which gives

everybody fair and equal opportunity to acquire the land.

CHAIR: Mr. Lush.

MR. LUSH: I am going to ask: What happens in

unincorporated areas and a person wants to build a residence? Do you have the

same restrictions there or do you have a boundary outside of which people cannot

build in unincorporated areas or do you allow people just to build if they

wanted to build in unincorporated areas?

MR. PARROTT: In unincorporated areas, for

administrative purposes, there is what we call infilling limit lines

established. We will accept applications within those limits and we will not

accept them outside those limits unless there is extenuating circumstances. When

the area is built up within the community then we will consider moving the

infilling limits out further after consulting with the various government

departments.

MR. LUSH: I have gotten the feeling over the years

that maybe you are a little too stringent with respect to where people build

residences. I am of the view, (inaudible) there is a mixture. I realize we have

to be careful in terms of ribbon development, and I think we are concerned

mostly about the provision of services.

If we allow people to build half a mile away from his

neighbour in an incorporated area, when the house is built, tomorrow they are

going to be crying for services and they are a half mile away. I can appreciate

that but there are some people who do not want that. They are going to provide

their own services and they want to get away. They want a country place but they

like to build in an unincorporated area. It seems to me that we should allow

people to do that. If they want to provide their own services, their own water

and sewer, within regulations - we have regulations for that - I am not sure

that we should be too restrictive. If a person has the means to build a property

and if it is a mile away from an unincorporated area, or an incorporated area

for that matter, if people want to provide their own services. It is not as if

we are overpopulated. I think sometimes we make it too difficult for people to

build. We are not living in China. We are not living if India. We have land

galore and I do realize, again because this could be seen as thinking I am for

people building anywhere. I am not. I think we have to have some regulations

knowing where people are, this kind of thing, but when it comes to residence -

and most people today want to build a good residence.

I have had many cases of people wanting to get away to

an area. They had a good piece of land. They wanted to get out there and yet we

did not do it because they were not within the boundaries of that town, be it

incorporated or unincorporated. I am not sure that we should put up those

obstacles as long as we know that the person is meeting the building codes in

building a house and that they will take care of their own services. In other

words, I am thinking if that is the case, they should almost be entitled to

build anywhere that they want to build.

CHAIR: I don't know. Does anyone want to comment?

MR. SWEENEY: I would just like to comment, if you

are finished, if anyone does not want to respond to Mr. Lush.

CHAIR: Mr. Sweeney.

MR. SWEENEY: No, with regard to the issue I

raised, I feel that once a piece of Crown land has been established to be a

piece of Crown land let the individual who made application first proceed -

CHAIR: I agree with that.

MR. SWEENEY: - and then go back to the town to

receive the necessary permits. If the necessary permits are not forthcoming

either he has to change the intention for which he wanted the land or the land

reverts back, like cabin lots do. If it is not developed in a certain period of

time it goes back to the Crown; but this particular instance that I got involved

with, it actually made me sick to see it happen. I could not believe it

actually, that it could happen.

To further complicate it, Bill, this individual was

told first: Well, we can't accept your application until the town approves the

use of the land for the intended purpose.

CHAIR: Zoning.

MR. SWEENEY: For the zoning. Again, I think it is

putting the cart before the horse. I think we should let the individual acquire

the land and go on with it. I think that it is probably - maybe from somebody

standing back from a distance saying that it is over-regulated. It is an

impediment to the process.

CHAIR: On that though, I do not know if you should

let the person obtain the land or have title to the land upfront, but at least

once he has his application in on that land no one else can apply for it until

it is dealt with, or something like that.

MR. SWEENEY: Yes.

MS KNIGHT: If I could just make one comment on

that. It is a little bit of a Catch-22 situation, I guess, that we are in in

those situations. If we accepted that application and the individual had his

land surveyed, paid the fees and whatever and his intent was to build a

residential building, and then he went to council to get a permit but was denied

that permit for some reason or other because it was not in-line with the zoning,

then he would be coming back to Crown Lands and saying: But I just purchased

this land to build a building and you allowed me to do that. I paid the money

and now I cannot get a permit from the town to build. So, that individual would

be in a difficult position.

CHAIR: No, I think though, to clarify that, if the

person makes an application to Crown Lands for a particular site you would not

necessarily give him title to the land until he had the approvals from the town,

but another individual would not be able to make an application for that piece

of Crown land until the original person had it dealt with. That would take care

of the situation, I think.

Roger wanted to say something on this, I think.

MR. FITZGERALD: The other part of that too is

buyer beware. If you are pursuing a piece of Crown land the least you should do

within the community is make sure that the intent that you want it for is the

intent that the town will allow it to be used for, but most municipalities have

clear zoning regulations.

CHAIR: That is right, but you would not need title

to it until you had the town approve it anyway. Then you would get the survey

done and then you would get title to it.

WITNESS: Yes.

CHAIR: But once you had your application made, or

whoever -

MR. FITZGERALD: Yes, just to comment further on

that because this is a problem that I think is something we all deal with,

especially the rural members. If somebody applies for a piece of Crown land and

if it is in or near an incorporated municipality the normal procedure is that

that application would go to that municipality for their comments and to have it

approved or not approved; but the one that I am referring to is the

unincorporated areas, the Lethbridges and the Winter Brooks of the world, where

I do not think you are ever going to see any form of local government there.

Their water and sewer is all to be inspected now and designed before anybody is

allowed to build there. They are not looking for any services so the fear of

sidewalks being extended or street lighting or water and sewer is not a reality.

I think we have become too protective in allowing people to build outside, I

suppose, of the general area of those communities. I do not see why we should

have to delay the process to get the boundaries extended.

Now, I think we should do it on protected roads by all

means or the next thing you know you have the speed limit reduced from 90

kilometres per hour down to 60 kilometres per hour because building has taken

place. We should be careful of that, but the other areas outside the perimetres

of what you would call a normal community, I do not see why we should be in fear

of it.

CHAIR: My comment would be, we are probably

getting off on a tangent with respect to the jurisdictions of the Department of

Municipal Affairs rather than Crown Lands.

Mr. Joyce, do you have any questions?

Are you finished, George?

MR. SWEENEY: Yes.

MR. JOYCE: I am just going to make two statements,

and one question to the department. First of all, if you were a common Joe like

myself from rural Newfoundland, the Auditor General's Report would be a lot of

the questions the people from rural Newfoundland would ask. It is a fair report

on a lot of the questions that were asked.

My second statement is, being from rural Newfoundland

I appreciate the problems that come up in the Crown Lands Division because I

know how many people apply for a piece of land, that no one had title to it and

they had another brother disputing for it, so I appreciate that.

From a personal point of view, before I ask my

question, I would like to thank Bill Parrott from Crown Lands because I have

been dealing with your department now for twelve years. I know we do not get

everything we want but I can tell you that on many occasions, especially

yourself and a lot of the staff in Corner Brook, go over and above to try and

accommodate the people in the area. On record, I would like to thank the

department because I know the work that you do and I know it is frustrating. I

get frustrated at times but then again, I know 99 per cent of the time every

person in your department is trying to help out the person who is trying to

build a house or get a cottage lot. So on behalf of the people I deal with,

thank you and your department.

I would just like to ask one question. I know when the

Department of Government, Services and Lands was being set up, especially in

Corner Brook where it is titled as a one-stop shopping centre - if a person puts

an application into Crown Lands and it goes through the process, can the

decision be made in Corner Brook, as I have been told, or does it still have to

come to St. John's for someone in St. John's to make the decision?

MR. PARROTT: It depends on the location of the

land. Within municipalities and any area with municipal plans the authority to

make the final decision rests in the regional offices. In areas where we have

zoning plans put in place for cottage areas and things like that, the approval

rests with the regional office as well as in protected road zoning areas. That

is the vast majority of the applications. The only applications that are

approved are ad hoc applications outside those areas by the Director of Land

Management. All applications for squatters' rights under

section 36, they are

all approved by the Director of Crown Lands.

MR. JOYCE: In St. John's?

MR. PARROTT: In St. John's, yes.

As our planning process goes on and as we develop more

and more protocols with departments we have been able to put more and more

authority in the regional offices, which is the ultimate aim to have quick and

one-stop shopping so that we can serve the client from A to Z in the one place.

MR. JOYCE: Thank you.

Fine, Mr. Chairman.

CHAIR: Thank you.

Mr. Lush, any questions?

MR. LUSH: Not right now.

CHAIR: I have a few. Anybody else?

On page 1 of your docket. Now, I used the Auditor

General's Report so I am going to have to go back and forth. In the table there,

Crown Lands Administration, spending of $2,896,000 in 1997 and $2,344,000 in

1998. That is a drop of what, $500,000 or so? Now that is Crown Lands

Administration. Why would there be such a drop of $500,000 there in that year?

MR. PARROTT: Yes, Mr. Chairman. The drop was

because in 1997-1998, in that area, we had temporary employees on -

CHAIR: Because of the new policy.

MR. PARROTT: - because of the new policy on

granting. When that large batch of applications had worked their way through the

system then employees were no longer needed.

CHAIR: Okay.

With respect to Land Management, you had $280,000 in

1995 and in 1999 it has gone up to $825,000. There are not too many areas you

see getting more money in government these days. That is $570,000 or something

more. What was the story on that?

MR. PARROTT: Most of that money is in Capital

Account for developing cottage lot subdivisions. Money goes out in survey

contracts, archeological contracts and road construction contracts. The money is

recovered then as the lots are sold.

CHAIR: Okay.

Surveys and Mapping, in the same column there,

$908,000 in 1995 and it went down to $847,000. It seems like that particular

section of the Crown Lands Division, over the years, has dramatically decreased

in their expenditures, in what they used to receive as a budget. I remember that

being in the millions of dollars, and when you are talking about geographical

information systems doing their base mapping or what have you, you would think,

unless you have it all done, that that area would be increasing in dollars.

What's the story on that?

MR. PARROTT: In the normal budgetary process of

the 1990s, Surveys and Mapping, the biggest thing that affected the Surveys and

Mapping was that there was federal-provincial cost-shared agreements. The big

loss in Surveys and Mapping has been in the cost-shared agreements.

CHAIR: Revenues, in the same column, Crown Land

Fees and Sales, in 1998 obviously you went up. In 1997-1998 it went up to $4

million and $5 million in the Revenues and it is down to $1.8 million in 1999.

That is because of the new policy that came in where you force people to buy

their land (inaudible) so much, is that right?

MR. PARROTT: That is correct.

CHAIR: Land Lease Rentals, in 1997 it was $1.4

million in Revenue. It went up to $2.1 million then down to $1.8 million. In

1998 then obviously there had to be more people apply for leases?

MR. PARROTT: No, in 1998 the policy of market

value pricing would be well in effect at that time so the leases would have gone

out at 20 per cent of market value paid over five years instead of a long-term

low lease rate. So there would have been an increase in the accounts receivable.

CHAIR: If anybody wants to ask questions on this,

because I have quite a few here that I can go on to but if anybody wants to jump

in at any time and if somebody wants to ask a question, please let me know. I

will just continue on then.

On page 3, top of the page: "A recent Departmental

report - this is the Auditor General's Report - on the Crowns Land Division

recognized a number of areas that cause delays in the application process that

could be improved including the process..." Okay, we handled that.

Next paragraph: "Information maintained in the

Department's system that tracks the progress of an application is often

inaccurate. This reduces the usefulness of the information to monitor the status

of applications."

John, would you guys be able to comment on that and

then get a comment from the department?

MR. NOSEWORTHY: We checked the application

processing system and determined that in fact some of the dates and other

information entered in there was not correct. Those findings were confirmed by

the department in their own internal reviews, but we found that too when we

sampled.

MS KNIGHT: Yes, and we did not deny that there

are, at times, mistakes in the information that is being put in. We have

instituted new monitoring procedures in terms of our application tracking system

and we think that, given our new policies and procedures, a lot of those errors

will be corrected and will not occur in the future.

CHAIR: Thank you.

On the same page, the fourth paragraph down, the

fourth bullet I suppose, it says: "The Land Management Division does not

maintain adequate information on cottage lot developments, including the status

of the lot sales and the associated costs and revenues." John, would you comment

on that?

MR. NOSEWORTHY: Yes, when we looked at this area

we started off, I guess, expecting to see a complete comprehensive system

identifying all the lots available, lots that had been sold, sales generated

from the sales and all associated costs, but in fact we did not find that. There

was no complete system. There was information available on a regional basis but

there was no comprehensive system in place. When we reviewed the costs that were

being accumulated in fact we found that they were not correct. The costs were

not reconciled to the government's financial management information system. We

selected several years and identified differences. For example, in 1996-1997 the

department had identified $55,425 of costs. The government's records indicated

$132,477 of costs and so on. We did that each year and each year there were

differences. We satisfied ourselves in the fact that this information was not

accurate, therefore we concluded that they did not maintain adequate information

on the cottage lot developments.

CHAIR: In that last comment, the two figures you

threw out, there is almost a difference of $400,000 there.

MR. NOSEWORTHY: No, $55,425 versus $132,477.

CHAIR: Okay.

MS KNIGHT: What we were doing in terms of the

cottage lot development, as John said, we had our records at the regional level.

At the regional level we knew the number of lots that we were developing and

were put out for sale. It was a matter of combining those into a provincial data

base, which we have now done, and that information is now available. We are

tracking the cottage lot development with more preciseness.

In terms of the differences in some of the costs in

revenues. We were not, at the time, including costs of the salary costs, for

instance, associated with the development. We were tracking costs in terms of

the construction of the roads, the surveys, and that type of thing. We are now

incorporating those into our process so that I would suspect, or I would

certainly hope, that if the Auditor General was looking again that they would

show that we are keeping a true record of costs.

CHAIR: I see the coffee is here. I think I will

just ask one more question then we will probably have a break for ten or fifteen

minutes, if you like.

That is on the same page, the EDGE companies. It

seemed to me that the Auditor General had some real concerns with respect to - I

know you addressed it in your opening remarks there, and I highlighted it here

when I was going through the report myself. The concern that I had was, of

course - I thought was a major concern - if I had a company with EDGE status and

had a piece of Crown land and then if the company went out of business, what

criteria is put in place that this company would not - the land would revert

back to the Crown or something of that nature. I see you addressed it somewhat

here in the final comments too, but would you like to comment on that?

MR. PARROTT: Yes, EDGE leases are issued for EDGE

companies, as you know, that have EDGE status. The EDGE lease is basically a

standard Crown land commercial lease except it has a provision for a rental of

one dollar per year. So if a company loses its EDGE status and is still on the

site, then they still have a standard lease in place. There is a rent review

clause every five years so that at the end of whatever the rent review clause

would be then those EDGE companies would go into the market value pricing system

and pay fair market value for the land.

We have amended the EDGE lease document to include a

new clause that states that if they lose EDGE status at any point then they

immediately go into market value pricing and the lease would stay in effect if

there was infrastructure on the site.

CHAIR: Sure.

John, would you like to comment on that? Do you think

that is suffice -

MR. NOSEWORTHY: Yes, I guess when we started to

look at this area we understood the provisions of the EDGE agreement and so we

wanted to see how many companies had this. We thought there would have been a

listing at the department, there wasn't at the time. The Department of Industry,

Trade and Technology had difficulty too in providing it but after some research

and work we were provided with a listing. I guess they have taken the action to

address our last point on page 15, which was there was nothing in the agreement

to address what would happen to this land if the company lost its EDGE status.

CHAIR: Thank you. I think we will have a break for

fifteen minutes and then get right back at it.

Recess

CHAIR: Thank you. Hearing back to order.

Is there anyone else who would like to have a question

or two before I continue on?

MR. FITZGERALD: I have a couple of quick questions

but you can go on. I will be here.

CHAIR: You will be there. Alright, good enough.

MR. FITZGERALD: Until you gets too boring, then we

will (inaudible).

CHAIR: Alright. Well, that is going to take quite

awhile. We are here for the day then.

MR. LUSH: We do not want a lesson in reading. We

do not want to be read to, we can get that in kindergarten.

CHAIR: Well, you know, if that is what you have to

do, you have to do.

On page 2 of your docket, three down.

MR. LUSH: Where?

CHAIR: Page 2.

MS MURPHY: Page 4, I think.

CHAIR: No, it is not, is it? It is too. Sorry

about that, page 4. I used the original report.

Three down: "Although a review of a sample of leases

indicated that billings were properly prepared and recorded in the accounting

records, we noted that for those leases where title to the land will only be

transferred to the lessee after the lease is paid off over 5 years, the

Department has only recorded the current portion or 1/5 of the balance owing in

the accounting records."

Why is this now?

MS KNIGHT: I can address it generally and Garfield

can fill in. That was what we were doing and I guess that was what we had been

told was perfectly correct to do but now that we have moved over to the new

Oracle system as of - is it April 1, Garfield?

MR. MOULAND: April.

MS KNIGHT: April of next year we will be showing

the balance as part of our accounts receivable. We will be addressing that issue

come the end of this fiscal year.

CHAIR: John, do you want to comment on that? I

should have asked you first probably.

MR. NOSEWORTHY: Yes, when we looked at the

receivables we expected to see for these leases the five years. In fact, when we

went through the accounts receivable system we found only one-fifth of that and

our position is that it should have been fully recorded, which I guess they are

doing now.

CHAIR: Did you want to comment?

MR. MOULAND: Yes, that is correct. We were just

showing the current year's receivable and we were not capturing the other four

years or three, whatever was left on the five-year term. The new Oracle system

is now capturing the out years, if you wish, so come March 31, 2001 we will be

able to provide the Public Accounts with that information.

CHAIR: Thank you.

The next one down also, the $1.3 million or 48 per

cent of the accounts receivable March 31 were in excess of one year overdue. I

think you just touched on that in your opening remarks. So that is really being

dealt with?

MS KNIGHT: Yes, as I said, we have not been

successful in reducing the overall amount of our accounts receivable but we have

put in place a lot of procedures which hopefully, over time, are going to see

those amounts decrease.

CHAIR: Okay, thank you.

On page 5, the third paragraph down, last sentence:

"As a result, the Department is unable to account for a complete inventory of

all Crown land that has been transferred to other departments and agencies." How

is that being handled now?

MR. PARROTT: In the past, prior to 1980, there

were a lot of transfers that were done within government between provincial

departments, and from the provincial government to the federal government, that

were not recorded on the base mapping. Since that time all transfers federally

and provincially are recorded and we have a project ongoing now in conjunction

with the Department of Works, Services and Transportation Properties Division to

acquire the data on all their properties they have acquired that came out with

Crown Lands base, and that is being plotted.

As well, we eventually - in the process of plotting

all Crown titles. We will be plotting all the titles that were issued to the

federal government in the 1950s, 1960s and 1970s. We work closely with the

federal realty services people and the provincial people on those projects.

CHAIR: Something just popped in my mind when you

were talking about the federal government. Down in Logy Bay, Red Cliff, the land

belonged to, I think, Transport Canada once, when the Americans turned it back

to the feds. Would Crown Lands have any involvement with that?

MR. PARROTT: Part of Red Cliff is back to the

provincial government and part of it is still held by the federal government.

There are still some federal installations there and some of the land is

privately held by private companies for transmitter sites.

CHAIR: So I can send someone in to see you and

have a chat about that?

MR. PARROTT: Yes.

CHAIR: Okay, not a problem.

On page 7, the third paragraph down says: "Our review

of land use planning indicated that there is no approved stated land use policy

and there is no co-ordinated and authoritative approach within Government for

land use." Does anybody want to comment on that?

MS KNIGHT: In my opening remarks I did address

that the coordination of land use planning within government - we did feel that

although there is a lot of planning going on and it was not taking place in

isolation from - departments were talking to one another, were consulting, and

each department has a chance to have an input into what another department is

recommending and going forth with. We did acknowledge that there is the need for

coordination and land use planning needs to be improved. We were hoping to do

this through enhancing and revitalizing the land use committee, ILUC, and that

we are in the process of doing. So there should be some improvement in the

coordination and being more formalized within the next six months or so.

CHAIR: Thank you.

On page 11, the Application Processing itself. We have

had a fair bit of discussion on the Application Processing. As you can see, I

have a fair bit of it highlighted here. I am not going to refer to it all here,

but in the second paragraph, probably in the second sentence there, page 10:

"Our testing of this system indicated that the recorded date in the system

indicating when certain procedures were completed in the application process

were not accurate."

I do not understand why you would not have information

in the system that would not be accurate, especially for people making

applications. I mean it is only the application forms I would think, isn't it?

John, do you want to comment on that?

MR. NOSEWROTHY: Yes, we reviewed the system, the

Application Processing, and determined that in fact there were inaccuracies. You

could also refer to page 40 in your document, which is an internal report

prepared by the department. At the bottom of that they refer to the Accuracy of

Data. They indicate that it is often incomplete and inaccurate, could be one of

three dates, dates entered may be wrong and that sort of thing. So I think they

pick that up themselves in their own report. We found that when we tested too,

and I do not know why, but some of the dates were not correct.

CHAIR: Basically, what that would boil down to is

just quality control, I suppose, the process going through?

MS KNIGHT: Yes, that would be mostly the reasons.

We have put in new monitoring procedures. In terms of dates, where some

confusion was being - a date was being interpreted differently in some of our

regional offices. That has been cleared up and I think a lot of those

inaccuracies should not be occurring in the future.

CHAIR: Thank you.

On page 11, the bottom of the second paragraph there,

New Market Value Pricing System: "The Department projected additional revenues

for the five years ending 31 March 2001 at $15 million. Figure 5 provides

information on these revenue projections giving effect for the new pricing

policy for the five years from 31 March 1997 to 31 March 2001 and the actual

revenues received."

In the diagram there, the bottom line: Above (below)

estimate. In 1997 and 1999 we have $158,000, I suppose, and $1.7 million. Why

would you have been so far below? Do you have any idea on that?

MS KNIGHT: I do not have an explanation. 1997 was

the first year where we would have figures for the new pricing policy. Our

estimates at that time were overly optimistic in terms of the number of people

that we anticipated moving on to that system. I think, as the Auditor General

noted, that overall our estimates, if you look at them on a five year basis or

the three years for which there were figures, that we were pretty much on when

you look at it for the three years that our figures are here. We pretty well met

the targets on a collective basis.

CHAIR: Overall.

MS KNIGHT: Yes.

CHAIR: The year 2000, of course, is not completed

yet. Thank you.

On page 13, Cottage Lot Development, the third

sentence, it says: "The Lands Division could not readily provide us with a

listing of cottage lot developments with the number of developed lots, status of

lots, associated costs and revenues. However, after significant effort by Lands

Division staff, such a listing was prepared as outlined in Figure 6." Why would

it have been such a major undertaking to be able to put something like that

together? You would think that would be like almost an ongoing thing.

MS KNIGHT: We did have information but it was

being compiled in our regional offices. Each regional office had these figures

but we were not compiling it on a provincial basis. That, as I mentioned

earlier, is being done now.

Then the figures with respect to - the Auditor General

noted that we were not including all the costs with respect to these

developments in terms of salaries and things of that nature. Those are now being

factored into our data.

CHAIR: On page 14, the first paragraph bullet, I

think we have addressed that. The next bullet: "The Department does not

maintain, on a Province-wide basis, an on-going record of ...". Okay, we just

handled that.

The third one there: "Overall, the Land Management

Division does not maintain adequate information on cottage lot developments,

including the status of..." and so on. Now, that to me is a bit different than

the previous one. Is that not correct? John, would you like to comment on that

one?

MR. NOSEWORTHY: What this is saying is, we

acknowledged in here that there is some information available on a regional

basis but we expected to see the information, which I think the department is

now keeping it as a central; but is also refers to adequate information with

regards to the cost because the cost, like the salaries, were not included plus

there were some other expense items that our testing indicated were not included

in the expenditures item. I do not think the numbers were being reconciled to

government's accounting system and we did find some instances of survey fees, et

cetera, that were not included in cost that should have been, plus there were

salaries that were not included.

CHAIR: I think we kind of touched on that before,

haven't we, really? I have had questions on Leases to EDGE Companies. We have

addressed that.

The next one, on page 15, Illegal Occupation of Crown

Lands. The second paragraph says: "We also determined that even in areas where

cottage lots are being developed and a public draw is being held, illegal

occupants in this area who built a dwelling before a "freeze" on development was

imposed by the Department, are assessed an illegal occupation fee and required

to pay the fair market value..." Basically, if you have a person illegally

occupying Crown land and you are going to put a development around that

individual, they are not penalized. All they have to do is chalk up whatever

everybody else is doing there and that is it. Is that policy still in place? Do

you follow what I am saying?

MR. PARROTT: If there is somebody there illegally,

they built without title from the Crown, then they are assessed a fee. They pay

$500 for going there without title and then they also pay fair market value on

top of that.

CHAIR: Yes, but that is what anybody would pay. If

you have a new development going around there, there has been no penalties for

the people who are illegally occupying Crown lands in that situation, is there?

MR. PARROTT: Yes there is.

CHAIR: What is it?

MR. PARROTT: If they went there illegally they pay

market value, plus $500.

CHAIR: Above $500?

MR. PARROTT: Plus $500.

CHAIR: But, they are probably getting the prime

location for $500.

MR. PARROTT: Yes.

CHAIR: Right.

An example: I had a problem down in the Bay du Nord

wilderness area. There was an individual there who had a remote site. He used to

fly people in fishing in the summertime and Crown Lands went in and burnt his

cabin. I know they are trying to get other people out of there too, for example,

but then he can go back in each summer, put up tents, and fly people back in

there. That is not logical to me. Why would that be? Do you understand what I am

saying? He had a cabin there, he was flying people back and forth in the

wilderness area, and the problem was that he was taking people into the

wilderness area fishing, or whatever the case may be, so they burnt his cabin.

He wasn't allowed to do that, but he is allowed to go in and put a tent up and

bring people in.

MR. LUSH: It is a different circumstance.

CHAIR: What is it?

MR. LUSH: That is a different license to operate a

tent than to operate a cabin.

CHAIR: Yes, but it is not logical. If it is to

protect the wilderness area, he is still going in there in a plane and landing.

MR. PARROTT: There are two jurisdictions here. One

is Crown Lands, and in their wilderness area, when it was set up, government

made the decision to remove all structures that were in there. Those structures

were removed and -

CHAIR: All of them?

MR. PARROTT: Some of them were grand fathered in -

MR. LUSH: (Inaudible).

MR. PARROTT: - I think there were six or seven

that were removed. Some people removed on their own, others were removed by the

department. The area is now administered as a wilderness area by the parks

division and under their regulations I believe you are allowed a tent, visit the

area, and get a special permit. I could be wrong in this, but I think -

MR. LUSH: I think there are two different sets of

licenses out there -

WITNESS: (Inaudible) a different set.

MR. LUSH: Yes, it is a different set. (Inaudible)

got the cabin, the cottage, and they are allowed to do different things and a

tent is a more temporary thing.

MR. PARROTT: Yes.

MR. LUSH: It is more temporary

whereas the

cottage/cabin is a more permanent thing.

CHAIR: I understand that, what you are saying

there, but the point I am making is that if you have a person -

MR. LUSH: He should have been given the cottage

one.

CHAIR: No, what should have happened - I don't see

the necessity to take it down because if the problem was that it is a wilderness

area and you don't want to be disturbing the wilderness, you don't want planes

flying in and landing in the pond or whatever the case may be, you tore the

cabin down but you still can do it anyway, the exact same thing, just that you

don't have the cabin there. There is not much you can do with it.

MR. LUSH: No, there is a difference.

CHAIR: What the plane lands quicker or takes off

faster or something?

MR. LUSH: No, the tent can be removed out of there

but the cottage can't be. It gives a better control to what they are doing. I am

not saying I agree with it, but I am just saying that is what the thing is.

CHAIR: On the same page, page 15, Management of

Crown land leases, licenses and grants. It says: "The Department manages

approximately 62,000 Crown and leases, licenses and grants..."

MR. LUSH: What page, Jack?

CHAIR: Page 15, bottom of the page. Really Crown

Lands do not manage the grants anymore because once a grant is issued it is out

of Crown Lands' hands. It could be sold fifteen times over and you do not keep

track of that, do you?

MR. PARROTT: No, we do not track the sales of the

grants but a lot of the older grants have conditions in them that are either

conditional in the grant or conditional reflecting back to the old Crown Lands'

acts of the day. There is a lot of administration with these titles. As the

titles are sold developments go on to amend the conditions to delete them.

CHAIR: Thank you, Mr. Parrott.

On page17, top paragraph, last sentence: "As a result,

the Department cannot determine whether Crown land is being used for the

purposes intended when the land was authorized for disposition." Now that is

getting almost back to the last statement you made, with respect to the follow

up on the grants if they have conditions in the lease. According to what the

Auditor General is saying, from what I read there, is that it is not being

properly followed with respect to the conditions. Do you want to address that

John?

MR. NOSEWORTHY: Yes, we looked at the terms of a

lease for an applicant then we wanted to determine what the department would be

doing to make sure that the terms of the lease were complied with, with regards

to this. What we found is that there were very few physical inspections of the

sites. We were told that they use affidavits after a period of time, but then

not all regions are using those affidavits. We concluded, as a result, that the

department was not monitoring this and therefore could not determine whether the

land was used properly.

CHAIR: Comment?

MS KNIGHT: Yes, the leases we give are five year

leases and at the end of the five years we do request affidavits. It is correct

to say, I guess, in some cases affidavits were not being requested and obtained.

We have corrected that and our regional offices are required to ensure that

affidavits are obtained.

In addition to that, it is impossible for the

department to go out and inspect every lease. We just do not have the resources

and I do not think we ever would, but we are doing spot checks at the time of

the five years. Also, our people are in the region throughout the year and they

have been requested to do sort of spot checks during the years. It is not 100

per cent and it never will be, but, I think, we have sufficient processes in

place to ensure that there isn't any real abuse and that the land is being used

for which a lease was granted.

CHAIR: Thank you.

On the same page, and you touched on this in your

opening remarks, I think, with respect to the accounts receivable in the

building. I made a note, I think, that you said: The collection of 89 per cent

is still basically the same, but you are working on it. Do you have any idea

when that figure will come in-line to something that is pretty acceptable? Put

you on the spot.

MS KNIGHT: Yes, that is a difficult question and I

would be hesitant to give a time frame. There are a couple of issues here. One,

it is only natural, I guess, that our accounts receivable are going to increase

over the years because the fact that we have moved to market value pricing and

have changed the amount of rentals for a lot of our properties. So we are just

naturally seeing an increase.

Whereas, we charge - I believe it was $50, Bill,

or $500?

MR. PARROTT: Cottages have gone up to $75

(inaudible).

MS KNIGHT: Yes, $75 to $500 or $600. Because we

have increased the rates we are just naturally going to find an increase,

overall, in the accounts receivable or else everybody is paying them on time,

but even so. So that is going to happen just as a natural occurrence.

We have put in the procedures and I guess it depends

on how quickly we are going to start to see results from those. The Oracle

system that government is putting in that is going to allow us to send out,

automatically, letters demanding collection, that process still has not been

completed. We had hoped that we were going to get the first of those letters out

in the fall but it looks like that system, and it is a new system that

government has put in, is not going to be ready. We are not going to be able to

get these letters out as quickly as we had hoped. It might be the end of the

fiscal year before we are able to, which would mean we would then have to go in

and manually do all these letter, which is a very time consuming process.

I would be reluctant to say when we are going to see

this percentage come down. I can only give assurances that we are doing whatever

we can, with the resources we have, to attack this problem. It is not going

unmonitored, as the Auditor General suggested. It may not have been monitored

closely enough before.

CHAIR: Thank you.

On page 18, under the table there, the Ageing Category

of the Receivables, Between 91 days and 365 days, and Greater than 365 days.

This new system you are talking about is going to address that problem. That is

what you were just saying, right? Okay.

The next one I have, down on that same page, page 18 -

I would like the Auditor General's office to comment on it - that is the first

bullet: "When the Department of Government Services and Lands had the

responsibility for the collection of accounts, there were collection policies

specific to these types of fees." Then it goes on to say in the last sentence:

"However, our review indicated that there is no regular collection activity

performed by the Department of Municipal and Provincial Affairs." Actually, in

fact, the Department of Municipal Affairs is having an impact upon you guys

receiving your receivables. Am I not right on that?

The next one down: "With the exception of the

preparation of the quarterly ageing report that is required to be submitted to

Treasury Board ...". It goes on again to say that it is not monitored by

Treasury Board. Do you have a comment on that, John, then the department?

MR. NOSEWORTHY: Sure.

Yes, Municipal and Provincial Affairs, during the

restructuring back a few years ago, took on the administrative finance duties of

Development and Rural Renewal and Government Services and Lands, I believe, to

administer receivables and that sort of thing. We spoke with people at

Government Services and Lands and understood that, in fact, they had developed

these collection policies. Then we checked with Municipal and Provincial Affairs

after reviewing the ageing of the receivables and seeing that 48 per cent were

in excess of a year old, it seemed like there wasn't much activity here in

collections. We looked at it and talked with officials at Municipal and

Provincial Affairs and found out that they didn't know about these policies,

they were not using those. In fact, very little collection activity was

happening with regards to Municipal and Provincial Affairs. They were basically

keeping the books but there was no follow-up. Furthermore, we would expect these

to be monitored but the only reports that we saw was a Treasury Board

submission. There was no monitoring by either the receivable clerks at the

Department of Municipal and Provincial Affairs or the Crown Lands officers. We

were concerned about the receivables.

CHAIR: My question would be then, if that is the

case, who is ultimately responsible? Would Municipal Affairs, strictly

accounting, keep track of it? Is the Department of Government Services and Lands

responsible for doing a follow-up to make sure the money is in? You are kind of

diluting the responsibilities there. Would one doing it all, would you think, be

better? Could you comment on it?

MS KNIGHT: The system that is setup is for the

three departments: Government Services and Lands; Municipal and Provincial

Affairs; and the Department of Development and Rural Renewal. Those three

departments have what is called a sort of central services division for them in

terms of finances, IT, Information Technology, and Human Resources. There is a

unit just lodged in Municipal Affairs and it serves those three departments in

those functions. The financial and operations division, which is just lodged in

Municipal Affairs, provides that service for three departments rather than the

one. Municipal Affairs officials are the ones who are actually doing the

collections, billings and the actual work. They are responsible for that program

that is within Crown Lands. So in that respect, they are responsible to the

Department of Government Services and Lands for that particular function.

CHAIR: But there must have been some serious

breakdown in communications. They didn't have the policies that Crown Lands had

to follow-up to do the questions.

MS KNIGHT: The policies that I understand

Municipal Affairs were following were the general sort of billing and collection

policies of government. I guess what we are saying now is that we have revised

those policies, tailored them more to the needs of collection for lands. The

relationship between Municipal Affairs and the department has improved. We have

formalized mechanisms in place to ensure that there is communication between

them and our Lands people, both in the regions and between Bill and myself. I

think some of that lack of communication has been addressed.

CHAIR: Thank you.

On page 20, the top paragraph, the middle of the

paragraph. It talks about the GIS system and that there has been a report that

Cabinet adopted back in 1997. They were hoping to have consideration within six

months. It says here: "The Department informed us that the development of an

implementation plan is still ongoing." Three years later.

MR. PARROTT: Yes, the geomatics strategy has been

approved by government. The implementation in government has taken longer

because technology is taking a paradigm shift. What would have cost us millions

and millions of dollars three years ago is down to hundreds of thousands now.

There are three major commercial vendors who are working on an Internet driven

solution which will allow government to take advantage of the existing hardware

and software and not duplicate that in another system. So this has been the main

reason to make sure these things occur first.

CHAIR: So if we wait for another five years we

will get it for nothing. Thank you.

On page 22, Land Use Policy and Planning. The first

paragraph says: "The Department in 1996 initiated a project to draft provincial

land use policies. This project is partially complete and is scheduled for

completion in 2000." What is the status on that now?

MS KNIGHT: We are a little behind in completing

that policy and it will not be completed this year. We did have a dedicated

resource doing this for us but that person has retired so we have not been able

to complete it. We are aiming, hopefully, to get it done within the next

calendar year.

CHAIR: Thank you.

Page 23, Municipal Assessment Agency: "The Department

is restructuring the procedure for submitting referrals on land valuation..."

How is that working out now with respect to the Municipal Assessment Agency,

Crown lands?

MS KNIGHT: What had happened and what was the

cause for the Auditor General to make a comment on this was that when

applications came into the department we were automatically referring them to

the municipal agency for an assessment. What happened, in some cases then, is

that we eventually turned down the application but we already had an assessment

done. We were doing that to try and speed up the process but in doing so we

engaged costs that we did not need to have engaged. We are not continuing to do

that anymore. The application is processed if we think we are going to go

forward with it and if we need the assessment from the municipal agency we are

doing it after the fact. It is delaying the process a little longer but we are

not incurring costs unnecessarily.

CHAIR: Thank you. I am finished with the Auditor

General's Report. I just have a few questions I had highlighted myself.

I had an individual call me, funny enough, last week

on this. What is the department's policy with respect to people outside the

Province applying for Crown land within the Province? Is there a policy on that?

MR. PARROTT: No, people from the rest of Canada

are treated just like Newfoundlanders and Labradorians for applying for land.

The only restriction is applying for land for remote cabins in Labrador, which

you have to be a resident of the Province to make that application.

CHAIR: So, if you had a cottage development out on

Salmonier Line, Hodgewater Line, anywhere at all, and you had fifty lots with

200 applications for it and fifty, 100 or whatever of those applications could

be from outside the Province and they would have the same opportunity to have

access to that Crown land as someone living two miles away?

MR. PARROTT: That is correct.

MR. LUSH: Why not? They are all God's children.

CHAIR: You can join up with that fellow there now.

What is the most recent status on what we used to

refer to as the Reid lots?

MR. PARROTT: Many of the Reid lots were purchased

by government in 1974. In 1994 the Reid lots that had been acquired by Bowaters,

then Kruger and now Corner Brook Pulp and Paper, were purchased back by

government. That means the majority of the former Reid lots, except those that

are owned by Abitibi Consolidated in Central Newfoundland, are now integrated

into the Crown Lands base of the Province.

CHAIR: What kind of money did we pay for that, to

get them back?

MR. PARROTT: The deal in 1994, which included, I

believe, timber rights as well as surface rights was $15 million which

translates to $10 an acre.

CHAIR: Mr. Lush would like to ask a question. I

was almost finished, too.

MR. LUSH: My question is just triggered by Mr.

Byrne's question. I spent a lot of time in Nova Scotia and I was taken to this

cottage development -

CHAIR: Were they allowed to own them up there?

MR. LUSH: Not a very - pardon?

CHAIR: Were they allowed to own them up there?

MR. LUSH: Yes.

Not a very pretty pond. A big area, probably ten

miles. A cottage development. Anyway, this guy proudly took me to this one area

of the pond that was a very exclusive area with humongous cottages, very

elaborate. He explained to me that these were German people who cannot own

property in their own country and delighted to be able to get a little piece of

land on this earth that they call their own. They have this place in Nova

Scotia. I said: What are we doing wrong? He asked: You fellows must have that

down in Newfoundland, where you have such beautiful areas? I said: Not to my

knowledge do we have something like that. You know the tremendous contribution

to the economy of these rather elaborate cottages. I just wondered, are you

aware of that, that that goes on? I mean if there is that kind of business out

there, shouldn't we be going after it? Or are we to insular and to isolated in

our thinking to approach that kind of thing?

MS KNIGHT: If I am correct, Mr. Lush, I think a

lot of the land in Nova Scotia is privately owned.

MR. LUSH: Yes, you are right.

MS KNIGHT: I suspect what you saw was a private

development. I guess if there were private entrepreneurs in this Province who

were interested in doing similar sorts of things, you know they may approach

Crowns Lands to look for the land. I do not expect there would be any reason

why, if it was a good idea and a good project, that it would not be considered.

Crown Lands itself is not into sort of developing cottage or chalet development

of that nature.

MR. LUSH: Again, I have to ask that question.

Would a developer be permitted to do that in Newfoundland, buy up eight or ten

cottages on Terra Nova Lake, for example, and do that with them?

MS KNIGHT: Bill, correct me if I am wrong. I do

not think there is any regulation in place today that would prevent that from

happening.

CHAIR: I think, to clarify here - you mentioned

buying up eight or nine cottages, that is private land, you can do what you want

with it; but the more basic question that needs to be asked: If an individual

went and applied to Crown Lands for a100 acre lot, and he is going to divide it

up into say 90 acres and take the roads out, 90 one acre lots to sell to

anybody, Europeans, Canadians, Americans, whatever the case maybe, would he be

permitted to do that?

MR. LUSH: That is the question, yes. I do not

think we are.

CHAIR: I would be shocked.

MR. LUSH: So that is why I asked the question.

CHAIR: Wait now. (Inaudible).

MS KNIGHT: The sale of large pieces of land like

that would have to be approved by Cabinet. So there is a process in place.

CHAIR: Cabinet approval.

MR. LUSH: That's what I have to start working on.

CHAIR: Mr. Joyce, pardon?

MR. JOYCE: It is happening now in the Humber River

with the new golf course and putting in the condominiums with time-share. It is

happening now, but it had to be approved by Cabinet.

CHAIR: But condominiums is a bit different than -

MR. LUSH: - the cottages.

MR. JOYCE: (Inaudible) coming in -

CHAIR: Yes, I know what you are saying.

MR. JOYCE: - the new golf course -

CHAIR: Well, that's a great project for you when

you retire. How is that?

MR. LUSH: I was really attracted by that

particular development. I was rather embarrassed to say that we did not have

that in Newfoundland. That we have such attractive areas and this guy thought

for sure that we would have that development here in this Province. I sort of

thought that is was not simple because I knew that a person is only allowed one

and that if you wanted to do something it would have to be by special

concession, by special permit, but it is good to know.

CHAIR: I have two questions left and I am

finished, then anybody else can ask.

What is the most recent status on the old railway

across the Province? I knew there was a lot of work being done with respect to

people occupying the land over the years and trying to make contact with them, I

suppose. I do not know if you are trying to get the land back or whatever. What

is basically the status of the railway now?

MS KNIGHT: The T'Railway across the main branch of

the old railway is under administration by the Department of Tourism so we

cannot speak to what is happening there. The other branch lines, that land is

under Crown Lands. At the moment nothing very much is happening with it. There

are expressions of interest by numbers of groups to manage that land or to take

it over and provide walking trails and things. That is in various stages of

process, but none of that land has been actually turned over - I think I am

correct - to any groups who have been prepared to come, applied for it and want

to administer it themselves.

CHAIR: What about occupation of that railway?

Since it has been abandoned, the railways themselves, obviously there must be

some people occupying various portions of it with cabins and what have you.

MS KNIGHT: I am not aware that they are. If they

have, I don't think any applications have come in formally to the department. I

will let Bill speak to it.

MR. PARROTT: In terms of the main trail way, it is

designated as a provincial park. We are not aware of any activity that goes on

on that because we have transferred that over to Parks. Certain other railway

lands throughout the Province have been vested in the Crown and are treated as

Crown land. Therefore, if anybody illegally occupies them they will be treated

the same as on any other piece of Crown land, and that includes the branch

lines.

CHAIR: Thank you.

Now one other one here, it is one that I have a bit of

a problem with. Back in 1994 or 1995 I would say, I am not sure which now, being

a surveyor I was quite familiar with the reservations on rivers and ponds and

what have you. The legislation was changed to - and I see it sometimes in the

paper, people applying for the access right to the waters edge, either the

thirty-three foot or the fifty foot type of thing. Have you had many complaints

with respect to this happening? Usually there are businesses (inaudible) but it

is supposed to be for commercial purposes and what have you. Do you have very

many complaints about that type of thing, where people will actually fence right

to the waters edge? Actually, you are stopping access from the public to the

waters edge. That is something that was a dramatic change with respect to the

Crown Lands policy when it was implemented. Oftentimes, I see in the paper

people applying for it - because they have to put it in the paper of course,

notices and what have you. When I look at the people who are applying for it, I

think the policy is being really stretched. Do you have any comment on that?

MS KNIGHT: The policy is laid out - well actually

its legislation is very clear in terms of the reservation and as you mentioned,

it has been increased from ten metres now to fifteen metres. All such

applications have to be approved by Cabinet. People put an ad in the paper. The

people have an opportunity to comment and express their concerns or objections

to that, and then that process is carried through into the Cabinet system.

Where people are given the right to build on the

reservation it is normally done with the proviso that they have to provide

another means around, an alternative means around. I am not aware that we have

received a lot of criticisms about people building on the reservation.

CHAIR: Not necessarily that they will build on it.

I think sometimes, depending on the business, that they would fence right to the

waters edge, I would think, and just block the people from access to the

property.

MS KNIGHT: Applications that are approved, as I

say, would be approved with a proviso that they provide an alternative route

around. Perhaps, in some cases that is not possible but I think in the majority

of cases - Bill, am I correct? - that there is the obligation to provide an

alternative route.

CHAIR: Any more questions anybody, on the

Committee?

MR. FITZGERALD: That would be the same thing for a

fresh water body or a salt water body. Did you say fifteen metres?

CHAIR: Yes.

MR. FITZGERALD: From the high water mark?

CHAIR: It used to be. Yes, fifty feet.

Mr. Fitzgerald.

MR. FITZGERALD: Just a couple to ask you about. A

couple of years ago Crown Lands or Government Services and Lands brought in a

policy that affected a fair number of people. I think of my own area. I think of

a little place called Princeton Pond where you had a lot of people with travel

trailers who went to this gravel pit. They would go and spend their summers

there with their family. They had their travel trailers there. They had their

little verandas built on them and it was a little getaway for them. Then Crown

Lands or Works, Services and Transportation sent their people around and put up

notices that they must put the wheels back on their trailer. They must put the

hitch back on their trailer. They must remove their verandas and they were

allowed to have one or two steps only. It caused quite an uproar for the people

who were there for years and years.

I have not heard much about it since. Have you relaxed

those rules again or they are still into effect?

MR. PARROTT: I do not know if that was a Works,

Services and Transportation gravel pit or just a regular gravel pit camping on

Crown land. We take the view that if people have mobile travel trailers and are

camping, then we assume that they are just camping, they are mobile and they

move on. It is when people start building onto the structures, putting down

septic systems, taking the wheels off, making a cabin of them, we look on that -

at that point then it becomes occupation of Crown land and if we cannot legalize

it there we tell them they have to move. Sometimes what they will do is make it

back into a trailer and stay there and camp. That sounds like the situation that

happened.

MR. FITZGERALD: Those rules are still in effect

today?

MR. PARROTT: Yes, they are.

MR. FITZGERALD: How many pieces of Crown land can

Roger Fitzgerald own?

MR. PARROTT: Depending on what Roger Fitzgerald

wants the land for.

MR. FITZGERALD: Residential purposes.

MR. PARROTT: Well, you would have one for

residential at a time.

MR. FITZGERALD: So, I can only own one piece of

Crown land at any one time?

MR. PARROTT: Well, you could have a cabin. You

might have a remote cabin. You might have a business. You might have two or

three businesses, but it depends on your needs.

MR. FITZGERALD: Okay.

You talk about the development of Crown land. You

apply for a piece of Crown land for residential purposes and you go through the

process of approval. Then you have, I think, one year to get the design of the

water and sewer system. Within the same year time frame you must have it

surveyed. You pay $1,500, I think it is, correct me if I am wrong, for the

processing of the application. Then you pay something like 20 per cent of the

cost of processing for a five-year period and at the end of the five years you

must have your land developed. Are you saying that at the end of the five years

you must have a residence there and occupied?

MR. PARROTT: Yes, that is correct. The application

fee is $115, which includes GST. That is a processing fee that covers the cost

of processing the application through the various processes. Once the

application is approved then the individual has a year, from the date of

approval, to come up with a septic system design which he contracts to a private

designer and a contract with a Newfoundland land surveyor to acquire a legal

survey of the property. Based on the legal survey, and if the septic design is

approved, then the Crown will issue a title. The title is based on the fair

market value of the property. If the market value of the property is $2,500 then

there are five payments of $500 a year. At the end of the five-year period the

lease has a condition that a residence has to be built. Upon the full payment of

the $2,500 then a grant, which is (inaudible) ownership, is issued to the

individual and they have no more dealings with the department on that parcel of

land.

MR. FITZGERALD: But is there a fee of $1,500 too,

somewhere along the line that must be paid prior to -

MR. PARROTT: No, there is not.

MR. FITZGERALD: What is the $1,500 for?

CHAIR: A cottage. There are different values. If

it is on a pond I think it is $2,500, $3,000 and $1,500.

MR. FITZGERALD: It says here, Residential: Fifty

year lease with development to be completed within the first five years. A grant

fee to be fixed at $1,500 except in isolated communities or the Coast of

Labrador where the fee will be $750.

MR. PARROTT: Yes, the $1,500 is the minimum for a

residential lot on the Island of Newfoundland, where in remote areas it is set

at $750 if there is no municipal assessment in place. If a municipal assessment

is in place that is the figure that is used but that is broken down into 20 per

cent per year. So, yes there is a total cost but it is basically an

interest-free loan over five years.

MR. FITZGERALD: So, the $1,500 do not have to be

paid -

MR. PARROTT: In addition.

MR. FITZGERALD: - in addition to your rental fee?

MR. PARROTT: No.

MR. FITZGERALD: Your rental fee over the five-year

period will then go towards the assessed value of the land? Before you

(inaudible)?

MR. PARROTT: Yes, that is correct.

MR. FITZGERALD: Okay.

CHAIR: Is that it?

MR. FITZGERALD: That is it.

CHAIR: Just a further question on that, along that

line of thinking. If I have a lease for a Crown land residence and I meet the

conditions and I get a grant - and, as you say, it is outright privately owned

land once I get the grant on it. You are only allowed to have one piece of Crown

land at a time for a residence. Now it is no longer Crown land, it is private

land. Can I go then and get another lease on another piece of land for a

residence?

MR. PARROTT: Yes you can.

CHAIR: Any further questions? Any comments from

the Auditor General's office? Deputy minister, would you like to comment, to

clue up?

MS KNIGHT: No, I think we have covered the issues

that we wanted to ensure that you were aware of.

CHAIR: Okay. Thank you.

MR. FITZGERALD: One last question. Squatters

rights ended when, or is it still in effect?

MR. PARROTT: Squatters rights were extinguished by

legislation in 1977. So any possession of land since 1977 does not count as

possession against the Crown. Adverse possession against federal land was

extinguished in the 1950s so that any of the railway property that came back to

the Province, there was no adverse possession on those. That was clear Crown

land that came back after 1977. That property is dealt with under the 1977

Statute.

CHAIR: But you can have adverse possession against

a private individual or company?

MR. FITZGERALD: Squatters rights would have been

what, possession of the land prior to 1977, for how long?

MR. PARROTT: There are two squatters rights

gives ownership to the individual. If somebody occupied Crown land for a period

of twenty years prior to 1977, what government did in the 1977 Amendment was

said: to simplify matters and to allow people to acquire relatively inexpensive

titles to property, if they have been here for a period of twenty year prior to

1977, government will give them a grant of Crown land for a fee of $50. That is

what is traditionally called squatters rights. We process a lot of those every

year.

CHAIR: Thank you.

Is that it?

I would like to thank the witnesses for coming here

today and being prepared, having the answers, and giving us answers. I am sure

you put a lot of time into it. The staff in the back of course also. I know you

were there just waiting just in case they could not answer, I know you had the

answers. I appreciate you being here. The Auditor General's Office of course,

thank you for your time. The Committee and our staff also.

What we are going to do now, we will meet on this and

any recommendations that may come forward from the Public Accounts Committee

will be presented in the House in a report hopefully no later than the Spring

setting of the House. There may be some recommendations with respect to what we

feel you should or should not be doing and then it is up to the department, and

up to government, to decide what they want to do along that line. Of course, you

probably know that anyway.

Again, I would just like to thank you for your time to

be here today, and certainly the preparation that went into coming here.

Sometimes I think people are a bit apprehensive about coming before the Public

Accounts Committee, but we are usually half decent. We do not give you too hard

a time, unless it is deserves. Anyway, thank you. Hearing Adjourned.

Committee adjourned.