May 5, 2003 RESOURCE COMMITTEE

The Committee met at 7:00 p.m. in the House of Assembly.

Pursuant to Standing Order 68, Ernie McLean, MHA for Lake Melville replaces

Kevin Aylward, MHA for St. George's-Stephenville East; Eddie Joyce, MHA for

Bay of Islands replaces Roland Butler, MHA for Port de Grave; and Sandra Kelly,

MHA for Gander replaces Mary Hodder, MHA for Burin-Placentia West.

CHAIR (McLean): Order, please!

I think we are ready to call the Estimates meeting to order. This evening we

are going to do the Estimates of the Department of Fisheries and Aquaculture.

The normal course for the evening is to allow the minister opening remarks,

after we have the introduction of the committee and also of the minister and the

officials. Following that, the Vice-Chair will have an opportunity to either

begin to question the department or respond to the minister's comments, but we

will just be back and forth with questions and answers. I would like everybody

to introduce themselves and say their names when they are prepared to speak, for

the record.

I am Ernie McLean, Acting Chair, and we have three acting members of our

committee tonight, and I think there is one acting from the Opposition. I will

ask the Vice-Chair, Trevor, if you want to start introducing yourselves to the

meeting.

MR. TAYLOR: Trevor Taylor, MHA for The Straits & White Bay North.

MR. HARDING: Harry Harding, MHA for Bonavista North.

MR. MATTHEWS: Lloyd Matthews, MHA for St. John's North.

MS KELLY: Sandra Kelly, MHA for Gander District.

MR. JOYCE: Eddie Joyce, MHA for Bay of Islands.

CHAIR: Then our minister.

MS JONES: Yvonne Jones, Minister of Fisheries and Aquaculture.

MR. SAMSON: Mike Samson, Deputy Minister of Fisheries and Aquaculture.

MR. WARREN: Mike Warren, Executive Director of Policy & Planning.

MR. MEANEY: Brian Meaney, Assistant Deputy Minister, Aquaculture.

MS LAYDEN-BARRON: Cynthia Layden-Barron, Director of Communications,

Department of Fisheries and Aquaculture.

CHAIR: Thank you very much.

I think we will ask the minister now to do her short presentation before we

get into the Estimates.

MS JONES: Thank you, Mr. Chairman, and Committee members.

I am pleased to present to you this evening the Budget Estimates for the

Department of Fisheries and Aquaculture for the fiscal year 2002-2003. Is that

right?

WITNESS: (Inaudible).

MS JONES: 2003-2004.

The Department of Fisheries and Aquaculture is responsible for promoting the

harvesting, processing and marketing sectors of the fishing and aquaculture

industries, and for providing input into fisheries and aquaculture science and

management. The department's scope of activity is at the local, provincial,

national and international levels.

Some key strategic objectives of the department are to balance both the

processing capacity with resource availability; maximize the value of fisheries

and aquaculture resources on a sustainable basis; to improve the production of

premium, quality seafood products; to support strategic community-based

fisheries infrastructure; to safeguard the Province's access to an allocation

of fish resources; pursuing cooperation with the federal government on bilateral

and multilateral fisheries management issues; and promoting fish stock recovery

and conservation in industry professionalization.

The value of fish landings in 2002 was $515 million, with a total production

value exceeding $1 billion. Approximately 267,000 tons of fish was landed,

compared with 580,000 tons prior to the moratorium of 1992. The total annual

average employment in the fishing industry was 16,200 individuals, an 11 per

cent increase from 2001. The peak employment increased to 27,100 people in 2002.

A reflection of increased activity in most sectors, particularly the shrimp

sector.

The annual average harvesting employment also increased 12 per cent, to over

8,000 individuals. Increased activity in the seal harvest and higher shrimp

landings contributed to higher harvesting employment.

The shrimp landings increased 8 per cent, to 76,500 tons in 2002. This was

due primarily to an increased effort by the inshore fleet. The landed value of

shrimp in 2002 was $144 million.

The sealing industry experienced a dramatic economic upturn in 2002. With

294,000 animals harvested, the landed value of seals grew to $20 million in that

year; up 138 per cent from 2001, mainly due to the increased pelt prices to

harvesters. The production value was estimated at $45 million. In 2002, the

Province's seal industry employed approximately 350 plant workers and 4,000

sealers.

We also had what was called the Fisheries Diversification Program. There were

141 projects that were approved with an investment of $9.85 million in

government funding, and an equal amount in private sector investment. Successful

projects were completed related to resource surveys, innovative harvesting

technology, quality initiatives, market and product development activities,

environmental awareness and conservation technology. The federal-provincial

diversification program ended March 31, 2003. To continue the success of the

program, in the absence of a cost-shared agreement, funding in the amount of

$500,000 has been allocated in the department's budget. Some of the noteworthy

projects funded under this program - I am not going to get into them but if

there are any questions I would be happy to entertain them.

Just to speak for a minute about aquaculture. The aquaculture industry

continued its strong commercial growth in 2002, with increase in volume and

value in most commercial species. The production value of the industry in 2002

was $20.5 million. Industry development is being guided by the Aquaculture

Strategic Plan for Newfoundland and Labrador. In August, 2002, the department

received $1 million in funding from aquaculture development under the

Comprehensive Economic Development Agreement.

The department is certainly not without its challenges. In our continued

efforts to achieve more valuable and sustainable fishing and aquaculture

industries, we are constantly challenged in terms of the resource and the

environment in which we operate. The recent decision by the hon. Robert Thibault,

the Minister of Fisheries and Oceans, on the Northern Gulf Cod and the Northern

Cod fisheries have certainly had significant impact in this Province. His

announcement that these fisheries may be closed has created an economic

uncertainty and threw a shadow over the future of the fishery in the Province of

Newfoundland and Labrador.

In an historical and unprecedented action that has been taken by the

Newfoundland and Labrador House of Assembly, an all-party committee was

established to prepare a united Newfoundland and Labrador position on this

serious issue. We were greatly disappointed on April 24, when the Government of

Canada rejected most of the committee's recommendations. The final decisions

were made without consultation with the Province or the fishing industry.

We continue to press the federal government to reverse its decision on the

closure of the cod fisheries and to work with us to prepare a plan for the

rebuilding, management and development of our cod resources. In light of this

issue, we still continue to deal with foreign overfishing. It is a major problem

that is facing the Province's fishing industry. We will continue our efforts

to bring a permanent solution to the problem of foreign overfishing through the

continuation of the foreign overfishing initiative which began in 2002. The

objective is to increase the awareness of, and solutions to, the serious

problems of foreign overfishing of straddling fish stocks outside the Canadian

200-mile limit. Progress has been made on this initiative in 2002 and it is

necessary to maintain the focus and momentum that has been created by our

government on this serious threat to the Province's marine environment and

economy.

Mr. Chairman, the aquaculture sector continues to show great promise for

growth and expansion, and the increased level of private sector interest in

investment bodes well for the future of this industry in our Province.

I have outlined, I guess, a number of positive developments, and I think it

is still critically important that the Province continue to support conservation

and diversification as a means to ensure a sustainable and prosperous fishing

industry in the future. The federal minister must also be guided by the best

scientific advice that is available in setting new groundfish and crab quotas,

and adhering to the advice that is evident in our own Province.

Mr. Chairman and Committee members, let me reiterate that the Department of

Fisheries and Aquaculture, under my stewardship, is committed to a program of

innovation and development within the fishing and aquaculture industries. I

continue that challenge with much enthusiasm and anticipation.

I want to thank you for your attention and, in conclusion, I would also like

to say that in the past two-and-a-half months that I have been in this

department, as minister, it has been a department that has been significantly

challenged in many ways in terms of the fishing industry in Newfoundland and

Labrador. I am very proud of the performance and the competence of the

individuals who work in this department, and the time and effort that they put

into making the fishing industry and the aquaculture industry in Newfoundland

and Labrador the valuable contribution to our society, the resource that can

valuably contribute to our society, in the way that they do. I certainly would

like to acknowledge their efforts on that front.

With that, Mr. Chairman, I turn it back to you.

CHAIR: Thank you, Madam Minister, for your abbreviated

preamble. I think

it wasn't half an hour. It was less than that.

I will ask the Committee, before I ask the Vice-Chair to respond, if we would

open at 1.1.01. and leave it open until discussions are completed and voted.

Mr. Vice-Chair.

MR. TAYLOR: Thank you.

In the interest of time, I am not going to go into much in the way of

commentary. I will just to go into a few questions right off, of a general

nature, about the coming year, or the year that we are into, I guess, probably

more appropriately.

Minister, the aquaculture industry in the Province - I will start off there,

I guess - has been around for quite a number of years now, a couple of decades,

about that, I guess, since we have really started moving down that road. While

there has been some growth in the industry, we are a long way from realizing our

true potential, and a long way from where our Maritime counterparts are. I am

aware of the aquaculture strategic plan, but I find it probably a little bit

general. What are the government's plans, the department's plans, to really

start moving to help facilitate the movement of this industry, this segment of

our fisheries and aquaculture industry, ahead at a little faster pace than it

has been moving, I would say, in the past couple of years? It has moved a bit in

the past couple of years, but certainly it has not moved in any leaps and bounds

over the past ten years, I wouldn't suggest, anyway. That is not to take away

from what the industry has done, because the industry has done some great

things, but we are a long way from the potential. I think we all can agree on

that. The industry agrees on that. What needs to be done, from your perspective,

do you think, and what plans do you have to help get that done?

MS JONES: Thank you.

No doubt aquaculture is one of the industries that we want to grow in the

Province, and we have certainly been focusing a great deal of attention and

energy in that direction over the past few years. I think already we have more

than 216 sites that are licensed in the Province for aquaculture, in mussels,

salmon, steelhead trout and Atlantic cod, and there may be some other species

which Brian might want to elaborate upon after.

We realize that one of the challenges faced in the aquaculture industry is

capital investment. We have been cognizant of that and have met with a number of

groups, as well as the aquaculture industry itself, in terms of looking at what

are some options in being able to raise capital to do some of these

developments.

We do have some funds that are available, we have made available to the

industry, to do everything from research to analysis, to helping people get

started and encouraging them into different directions. We also have made

available all of the expertise that we have within the industry, to people who

are interested, and I guess from here we will continue to work with them to try

and build upon the resources that we have out there. There is no doubt the

interest is there and the potential is there; so, in learning what the

challenges are for them as we go along, we will certainly be prepared to try and

deal with them as best we can.

I do not know if you want to elaborate on that, Brian.

MR. MEANEY: Thank you, Minister.

Other than that, we have made a concerted effort over the last two years on

investment prospecting, trying to identify potential investors within the

Province and without the Province to joint partnerships with Newfoundland firms

in terms of developing the opportunity.

Aquaculture is an expensive business to be involved in. We are talking about

millions of dollars, for example, in a salmon farm. We have been fairly

successful in that we have a company that is just establishing in the Province

this year, for example, that was farming in Nova Scotia, and is now expanding

into Newfoundland.

You mentioned the Maritimes. If you have been following the news, there was

quite a large die-off through super chill in New Brunswick and Nova Scotia over

the winter, and many of the firms that were operating in that area have now

looked to Newfoundland and are actively looking at the opportunities that are

here, because we did not experienced that type of cold weather as they did in

other parts of the Maritimes this winter past, so we have quite a number of

companies from off-island that are interested in looking as well.

In addition to that, we have had discussions with lending agencies, including

ACOA, who has been very helpful in terms of supporting the aquaculture industry,

as well as the Farm Credit Corporation, who are now looking at aquaculture as

being eligible for financing on the federal system. As well, a number of the

larger chartered banks are now taking an interest in aquaculture. We have had

numerous discussions with them in terms of what they need in terms of

information to look at investment opportunities in the Province.

MR. TAYLOR: I know from just one personal experience last year, one of

the frustrations that I have seen from people who want to try - this long, slow

process of site - even though, as you said, there are 240-odd sites now

established, or approved, licensed or whatever. This process of site

identification and site approval is very, very frustrating, to say the least,

for anybody who is trying to get into it.

I just speak from the experience of people in the District of The Straits

& White Bay North. Last year there was a long process there to try to get

approval to go ahead with an experimental licence. The problem was getting the

Coast Guard to do the site evaluation. Because of a conflict with an anchorage

designation from a British admiralty chart from 1700-something - probably that

Mr. Cook surveyed, I would say - the site was held up and relayed to the Coast

Guard. I sailed in and out of St. Lunaire Bay for a good many years and the last

time I saw any ship anchored in St. Lunaire Bay, the Tavener was running

to Labrador - it was not yesterday - or the Springdale or something like

that. It was a long time ago anyway. It was back in the 1970s.

WITNESS: It could not have been the Springdale.

MR. TAYLOR: What?

WITNESS: It could not have been the Springdale. How old are you?

MR. TAYLOR: I can remember the Springdale.

WITNESS: I thought you were only a young fellow.

MR. TAYLOR: I can remember the Springdale. I can remember it coming into

L'Anse-au-Loup.

Is there anything being done, or is there anything that can be done to speed

up this process? I know there is probably not a whole lot of requests for -

maybe there are. How many requests do you get for aquaculture sites these days?

MR. MEANEY: On average, we receive about fifty applications per year for

access to sites, and they vary across all the species that the minister

identified.

Just as a point of interest, Canada's national aquaculture trade magazine's

editorial this month was entitled: British Columbia should look to Newfoundland

for its abilities for innovation in site licensing. Last year we issued

thirty-six licences in Newfoundland under the process. There has not been a

licence issued in British Columbia now for over seven years.

We work very innovatively with DFO, in particular with the federal lead

agency -

MR. TAYLOR: It is all relative, isn't it?

MR. MEANEY: We have been very proactive in terms of - instead of reacting

on an individual person to twenty-one or twenty-five different agencies, we have

developed a series of one-stop shopping where our office in Grand Falls is the

single window for an application. We work it then through all of the federal and

provincial agencies whose approvals are required. Generally, assuming that you

have all of your information and everything is straightforward, we can turn an

application around within six months, to eight to ten months, depending on the

complexity of the application.

Most recently, the federal government identified aquaculture as an eligible

activity to be reviewed under the Canadian Environmental Assessment Act. That

was deemed to probably lengthen the time for an application to go somewhere to a

year-and-a-half to two years. We work with the federal government here to reduce

that within the time frame of six to eight months. We have been keeping that

fairly regularly.

In terms of the charts and those types of issues, we had meetings recently

actually with the Coast Guard. They brought in some new technology to do some

rapid mapping of the seabed and we have identified priority areas on the

Northeast Coast and the South Coast that will be used for aquaculture

development, or is of interest for aquaculture development. We have had some

discussions with the Coast Guard in terms of prioritizing those areas.

As well, in terms of the designated anchorages, there are quite a number of

them around the Island. They were preventing aquaculture development because

they had been there - identified for in times when schooners needed safe

anchorages. There was a complete review done over the last two years with

ourselves and the Coast Guard, as well as representatives of the fishing

industry, and many of those anchorages were removed where they were no longer

needed. Some new ones were added for some new and larger vessels, and more in

tune with the technology used on the water today. So there have been some

improvements made in that process.

MR. TAYLOR: Thank you.

Switching gears a little bit now to fisheries licensing. Just a couple of

questions on policy and one thing and another.

Where is the department now on reactivation of inactive licences? There seems

to be - over the course of the past year-and-a-half, to say the least, there

have been conflicting messages coming out of the department; depending on the

time, where a licence was. I will leave it at that, I guess. What is the status

now? There are a number of licences throughout the Province for various species.

You know why I am asking the question because last year there was the refusal to

reactivate an inactive licence in Ramea to transfer it to St. Anthony. If that

is the policy, that is the policy, but in the same breath almost, the then

minister said: However, if there is a proposal that comes forward to reactivate

that licence in Ramea, then we will entertain it.

So the message, to say the least, is a little bit inconsistent. The question

is: Where are you, minister, with this issue? I will leave it at that.

MS JONES: The policy, as it is right now - and Mike might be able to add

to this. Any processing licence can be reactivated for the plant that it is

attached to, with a proposal to government, with the intentions of what they are

going to do with that licence and that facility.

I think the case that you are referring to was a reactivation of a licence,

then a transfer of a licence, and I think it was for a processing licence for a

species that we had already capped licences under. I am going to let Mike

respond to that because I am not entirely sure of that particular situation.

Would you like to do that, Mike?

But, as the policy is now, you can reactivate with a proposal to government

and it would be government's decision as to whether they would reactivate that

licence or not.

MR. TAYLOR: I am not concerned about - I mean the issue of last year is

just about twelve months old now. I want to know where it is on a go-forward

basis, basically. So it cannot be reactivated and transferred but it can be

reactivated. How do you determine, for reactivation purposes, what was....? Do

you have to have a level of activity before you go into reactivation, before you

can - you know?

MS JONES: No, I did not say you could not reactivate it and transfer it,

because you can actually do that. All I was doing was stating what that proposal

was a year ago; but, for the reactivation of a licence, right now the

requirement states that you must submit a proposal to reopen that plant and

reactivate that licence, and the decision is made based on your proposal.

Because, as you will know, we are challenged with trying to match the processing

licences with the availability of resource that we have available to us, and

just by the mere fact that you submit a proposal to reactivate a plant does not

guarantee you that it will happen, especially if it is on the doorstep of

another plant that you could jeopardize that operation, or the economics in a

particular region, or put a whole bunch of people out of work here to do

something there. There really are a number of considerations that would have to

be given to it; but, as the policy is, a proposal to reactive is what is

required and then government would consider it from that perspective.

MR. TAYLOR: Okay, we will leave it at that, I guess, for now.

I am going to move into, in the interest of time, the Budget Estimates. On

page 106, 1.3.01. Planning and Administration, under 01. Salaries, there is a

jump from last year's budget to this year's estimate of $102,000. Why is

this? Is there a person being added in this section, a person or persons being

added, or what? Under 1.3.01.01. Salaries on page 106.

CHAIR: Planning and Administration.

MS JONES: That was extra human resources hired to deal with the foreign

overfishing initiative that we launched last year. There was an individual who

was hired to head that up within the department.

MR. TAYLOR: Hired this year?

MS JONES: This year, I guess so -

WITNESS: (Inaudible).

MS JONES: Yes, last year and this year.

MR. TAYLOR: If they were hired last year, why is there a difference in

the salary level from last year to this year, of $102,000? Under 1.3.01.

Planning and Administration.

MR. SAMSON: I think a couple of things show the change there. Last year's

budget started out at $375,000, it was revised to $361,000, and then the number

for this year is showing $477,000, I believe, Trevor?

MR. TAYLOR: Yes, that is right, that is correct.

MR. SAMSON: A couple of things happened. In last year's budget we had

an allocation for foreign overfishing, and there was a salary amount in that. In

the current year, instead of allocating the foreign overfishing initiative as

one block, it has been broken up. A piece of that money that is attributable to

salaries has been put in that account. In addition, there are costs there

associated with, I think, three other things. The scheduled salary increases of

5 per cent year over year, regular step progression costs as people move up

through the scale, and I believe there are also some costs in that associated

with some reclassifications that have happened in the course of the year. The

whole difference from year to year is not the individual who is associated with

foreign overfishing. It is the combination of those four things that drive it up

to about $100,000.

MR. TAYLOR: A small difference you could understand, in step progression

and what have you, but.... Good enough. Thank you.

Down in the next section, 1.3.02. Resource Policy and Development, in

Salaries again, there is an increase of $31,000. That is just regular or...?

MR. SAMSON: I think, in the case of that, it is scheduled salary

increases, the 5 per cent plus the step progression costs. Step progression

costs tend to vary from division to division, depending on the experience level

of the staff who are associated with that. After awhile what happens, people top

out on their scales at step twenty-five or step three - depending whether you

are on the management scale or the union scale - and then step progression costs

are no longer required. Then it is just regular salary increases.

MR. TAYLOR: Under 03. Transportation and Communications in that same

section, last year you budgeted $71,300 and spent $36,300, and you are budgeting

$81,300 this year. Why such a variance in that sub?

MR. SAMSON: What you see in here, and you also pick it up a little

further on, is that we did a small reorganization in the department last year.

We had a resource policy division and a resource development division. We

eliminated, essentially, the resource development division, and moved the

development piece of that into a new division called Resource Policy and

Development. We amalgamated the two and then the residual shows up as a new

division further back into the Estimates, a Division of Technical Services.

So what is happening is, we have had people being moved in and out along the

way. In addition, the $500,000 that the minister referenced, which is being

allocated to fisheries development work for this year, replacing the FDP, there

is a $10,000 allocation there, built in there, for travel and communications

associated with fisheries development. That is where the additional $10,000 over

last year's budgeted amount comes from.

MR. TAYLOR: Which one was that, did you say? Where is that shown up?

MR. SAMSON: It is still on the same line 1.3.02.03. Transportation and

Communications. The difference between last year's budgeted $71,300, and this

year's budget of $81,300, is a $10,000 increase, which is associated with this

division taking on the new resource development responsibilities.

MR. TAYLOR: Okay. I misunderstood you then. I thought you were talking

about something else for a second.

Down in 06., I am sure there is an obvious explanation that I have missed,

but anyway, under Purchased Services, you budgeted $10,500 last year, you spent

$500, and now you are budgeting $350,500.

MR. SAMSON: Yes. Again, $340,000 of that - the difference between last

year's $10,500 and this year's $350,500 - that is $340,000 associated with

the Fisheries Development Initiative. So $340,000 of the $500,000 in the new

initiative is in that account.

MR. TAYLOR: That is what I was getting at when I asked just now, where

was it? You said, the $500,000, right? I couldn't find the $500,000 figure

anywhere.

MR. SAMSON: It has to divided out that way because where it pitches in

the budget determines the rules of what it can be spent on, so it has to be

divided up. In this instance, what you find is that $340,000 is there in

Purchased Services. There is also $140,000 that shows up two lines below that in

Grants and Subsidies in the same section.

MR. TAYLOR: Okay.

MR. SAMSON: So $140,000 of that $440,000 is also associated with the

Fisheries Development Initiative.

MR. TAYLOR: Now you say where it shows up determines where it can be

spent. What can it be spent on in Purchased Services, and what can it be given

to on Grants and Subsidies?

MR. SAMSON: As best as I understand it - unfortunately, Dave Lewis is not

here. He is closer to this than I am. I think, on Purchased Services, things

like equipment rental, equipment repair, printing services. For example,

sometimes we charter vessels for fisheries development work. We enter into

contracts with the fishermen to test the gear and that sort of stuff. That then

becomes a purchased service in the view of the government.

On the Grants and Subsidies side, if we were doing a fisheries development

project where we wanted to get someone to undertake some kind of product

development, for example, you get a company looking to do a value added product

in mussels, for example, then that could show up as a - that would be a grant or

a subsidy. We would provide a grant to the company in the amount of $20,000 to

offset costs associated with a particular project.

MR. TAYLOR: Okay.

Thank you.

Under Administration and Support Services - Regional Services, Transportation

and Communications, top of the next page, you budgeted $324,900 and you spent

$277,200 and you are up again at $324,900 this year. Is there a reason for a

drop there?

MR. SAMSON: The budgeted amount is the same year over year.

MR. TAYLOR: Yes.

MR. SAMSON: Discretionary expenditures deferred, my notes indicate. I

guess what happened was, the government undertook last year a program of really

putting the brakes on, and what we were instructed to do, as officials, was to

eliminate all non-essential expenditures and all non-essential travel. The issue

would have been here. Normally, we would have had people travelling to meetings,

we might have had people travelling to conferences, or undertaking professional

development type activities that would have been stopped, and looked at as not

absolutely essential to the conduct of departmental business. Discretionary

expenditures were deferred. At the end of the year we did not spend all our

money last year. This would be part of it.

MR. TAYLOR: Related to this here, the description of this

section says,

"Appropriations provide for the operation and administration of the

Department's regional structure including the maintenance and repair of all

Government-owned marine facilities in the Province."

I guess this section, in large part, was responsible for looking after the

marine service centres and those types of operations in past years?

MR. SAMSON: Yes.

MR. TAYLOR: Now with the marine service centres, in large part,

privatized, or through some kind of lease arrangement with companies and

individuals, the role of these individuals would be fairly different from what

it was in the past. Is that fair to say?

MR. SAMSON: I guess what is after happening over a period of time in

departmental activities, we have gone from owning, operating and maintaining in

excess of 400 pieces of infrastructure around the Province to what I believe is

now somewhere in the area of 100 pieces. What has happened over time is that the

role of individuals - we have also, over that period of time, downsized

significantly in terms of the number of staff and things. What has happened is

that individuals have largely been re-deployed into other kinds of work.

MR. TAYLOR: Right.

MR. SAMSON: People who worked in marine service centres before are now

doing fisheries field representative work, and doubling up as quality assurance

officers in the summer, and those sorts of things.

Yes, there has been a definite shift in the focus of our regional operations.

Yet, we do maintain a very active - for example, this time of the year we have

two refrigeration techs going flat out on baited trawl holding units, providing

assistance to the industry, and those sort of things. There are many things that

we continue to do, but as we move off certain things we shift focus to other

areas of the industry.

MR. TAYLOR: Okay.

There is not a lot of fluctuation here, but I just have a couple of more

questions on the Estimates. I dare say Harry has a few.

On page 108, under Processing and Marketing, 2.2.02.10. Grants and Subsidies,

you budgeted last year $263,000 and spent $163,000. Two things, I guess. What

were those Grants and Subsidies for? Secondly, why was there not complete uptake

on the Grants and Subsidies there?

MR. SAMSON: We were off $100,000 in Grants and Subsidies and up $100,000

in Purchased Services.

MR. TAYLOR: Yes, you are.

MR. SAMSON: There was a straight transfer. Those are costs associated

with the Boston Seafood Show. So, money gets moved back and forth between

accounts depending on what the particular expenditure in relation to the show

would be for.

MR. TAYLOR: You mean the $100,000 is related to the Boston Seafood Show,

or the entire...?

MR. SAMSON: No, the $100,000 would have been moved from, I believe,

Grants and Subsidies to Purchased Services. Yes, it was.

MR. TAYLOR: Yes, it was.

MR. SAMSON: It was moved from Grants and Subsidies to Purchased Services,

and that was associated with costs incurred in the context of the Boston Seafood

Show.

MR. TAYLOR: How much, roughly, would it cost the Province participating

in the Boston Seafood Show (inaudible).

MR. SAMSON: I think the Boston Seafood Show numbers, the last time I

looked, and I could check and get back to you with an absolute number, is in the

area of $250,000, and in that sense it is the single largest marketing event for

the Province in the run of the year. I guess you have been to Boston and it is -

MR. TAYLOR: I tried to talk Gerry into taking me when he was minister,

and he wouldn't.

MS JONES: You didn't ask me.

MR. TAYLOR: I couldn't go this year. The last two years I could have.

I have two more questions. On 2.2.03., on the top of page 109, under

Transportation and Communications, there is a $20,000 difference from a budget

of $83,600 to $103,600 under the Licensing and Quality Assurance section. What

would that extra $20,000 be related to? Are there some special circumstances

that caused that last year?

MR. SAMSON: That over-expenditure is travel costs associated with quality

assurance officers, seasonal staff who were hired. That is the additional twenty

or so seasonal staff who come on in the summer to do the quality assurance

inspections. They are responsible for the $20,000 expenditure. (Inaudible)

incidents of having to find the money in other areas and transfer it, find a few

dollars here and a few dollars there, move it in to cover off travel costs

associated with moving twenty or thirty seasonal staff around the Province

during the fishing season.

MR. TAYLOR: So I understand now, there was just an increase in

transportation. You had the same amount of staff as you had the year before?

MR. SAMSON: I believe last year we may have had two, maybe three,

additional quality assurance officers in the field last summer;

whereas the year

before, you will recall, the one-year approvals we had for our quality assurance

officers were annualized and we had some delays in staffing that year. We had to

go through Public Service Commission competitions in order to bring people in on

a permanent seasonal basis. Last year, we had more people in the field earlier

in the year than we did the year before. As well, the year before, the costs

were off a little because the shrimp fishery was closed.

MR. TAYLOR: Yes, okay.

On Aquaculture Development, 3.1.01.01. under Salaries, last year you budgeted

$935,400 and spent $794,200. This year, you are back up again. Your budget if

roughly the same with, I guess, your expected increase. Why was there $140,000,

basically, not spent on Salaries last year in Aquaculture?

MR. MEANEY: That related to staffing actions as well. We had some

individuals, some positions vacant at the start of the year, and it took awhile

to get the staffing done through, sort of, the time frame in the year. For one

individual, actually, it was almost eight months before the position was finally

staffed. It came from those several positions that were vacant.

MR. TAYLOR: Further down, in 3.1.01.12. Information Technology, what kind

of an expenditure do you anticipate this year to increase that sub by a little

over $100,000?

MR. MEANEY: Treasury Board identifies priorities in terms of

infrastructure requirements for various information technology aspects, so that

could relate to anything through server upgrades, access to improving technology

transfers via Internet access to regional offices, those types of issues.

MR. TAYLOR: It may not necessarily be related to aquaculture, but - go

ahead, sorry.

MR. WARREN: Overall, Trevor, what they did this year was, normally in the

IT sector of the department it was funded under the Department of Forest

Resources and Agrifoods, the three-department arrangement, so what they asked

the department to do was separate it out and put the amounts in each department,

so this now reflects what is spent in our department.

I can give you some highlights of what we are going to do with that, but that

is to explain the difference between this year and last year.

MR. TAYLOR: Sure, give me a couple of highlights of what you are going to

do with it; the Reader's Digest version, not the -

MR. WARREN: The Reader's Digest version, okay.

There is going to be some work on an aquaculture GIS. There is the licensing

information system for the department. That is aquaculture as well. There is

going to be work on that. There is work on aquaculture fish (inaudible), and

marketing contacts - no. Let me see, those are the main ones: aquaculture

licensing information system and aquaculture GIS.

MR. TAYLOR: Thank you.

CHAIR: Mr. Harding.

MR. HARDING: You have just about everything covered now that I had marked

off, but there are two or three things. On the aquaculture side of things, I do

not know if you have had many calls on this. On the aquaculture side, with

respect to licensing, particularly with respect to mussel growers, I have

received several calls from mussel growers who are complaining about the long

time it takes to renew their licences. Has there been anything done with respect

to improving this, or not?

MR. MEANEY: The renewals are done on an automatic basis, based on a form

sent out to each individual operator, mussel grower or salmon grower in the

Province, and they are reviewed internally in the department and licences are

issued as the process goes through. Basically, of the 216 licences issued last

year, the bulk of those, in excess of 190, had been reissued for the current

calendar year by the end of last month. It sometimes takes a little bit of time.

We have three people having to process over 200 licences. It takes a little bit

of time, but normally that is the length of time required.

MR. HARDING: On the marketing end for mussels, I know up to a year or so

ago there seemed to be a lot of problems with respect to that. It seemed like it

was dominated by one or two companies. Have there been any improvements made in

that area this year?

MR. MEANEY: There are five processors who are actively processing mussels

in the Province right now. The bulk of our production has been going out, over

the last three years, in a value-added form; frozen mussels in a vacuum packed

bag. Those have been primarily marketed by two Newfoundland companies.

There is increasing production. It is a very competitive marketplace and

these companies are actively increasing their market share, particularly in the

United States market. There is also a movement into increasing our activities in

the fresh product, in fresh mussel sales, into the U.S. and the Eastern Canada

market. It is a process that requires people basically wearing shoe leather down

on the streets, marketing mussels on a regular basis. We have some very tough

competition in the fresh market from Prince Edward Island. Recently we have had

Chilean and Norwegian mussels in the frozen form coming in. So it is a very

competitive market, but our market share is continuing to grow and the product

diversification - we have companies developing new products and that looks like

it is going to expand the marketplace significantly.

MR. HARDING: Thank you, Sir.

I just have one more question now with respect to the inspection for snow

crab. The provincial department has - one of the things was with respect to dead

crab, in particular. The Canadian Food Inspection Agency does not refer to dead

crab as reject. They use: tainted, unwholesome and decomposed. Could there be

some consistency there for the department to also use the same language as the

Canadian Food Inspection Agency?

I mention that because last year, in particular, I know the company in

Valleyfield, Beothic Fish, they took a load of crab from FPI up on the south

coast - it was in the summer - but FPI could not handle it at the time. What

happened, it was over-iced, and you can't do that. That is what killed this

crab by the time it got to Valleyfield. It resulted in that company losing about

$40,000 because an inspection was done and the crab was considered dead.

When I was with the company we did work on dead crab with Dr. (inaudible)

with the university. He determined that dead crab could still be processed and

still be good after twelve or thirteen hours. I was just wondering - I do not

know if you received many complaints on this or not but could the language with

respect to reject crab be consistent with what the federal government has -

using the words decomposed, unwholesome or tainted?

MR. SAMSON: The dead crab-live crab issue remains a constant point of

debate during the summer. I am not sure exactly what the wording used in the

fish inspection act, our legislation is. I think it is fairly consistent with

the federal wording: tainted, unwholesome and decomposed.

I think the issue with dead crab is more one of finding an objective measure

of where you draw the cutoff. With the life-detector that is used now with crab,

I think the place that we sort of pitched, as a Province, is that dead-live is

the most administratively simple place to put the cutoff. We, in fact, where

involved in a prosecution last summer with a company - that company was not

Beothic Fish - on the dead crab-live crab question. It became almost a bit of a

joke, because in court it became: How dead was he? That is what the debate

became about.

I think, having to determine a cut-off point somewhere, the department has

taken the position that dead and live is the cut-off. If it is live, you can

process it. If it is dead, it is rejected and must be dumped.

We understand that from time to time this causes financial hardship with

companies, but on balance we do not run into a lot of those cases in the run of

the summer. In fact, it is a very, very small percentage of crab that actually

gets rejected, unlike years ago, as you know, from being in the business

yourself.

The strides that we have made in the marketplace from a quality perspective,

if you talk to the buyers in the U.S., they speak very, very highly of the

quality of the product that is coming out of here now. At least for the moment,

until someone can find a way to measure decomposition post-death in crab,

dead-live is where we have elected to place the cut-off.

MR. HARDING: Thank you.

CHAIR: Okay, Harry.

Sandra.

MS KELLY: Just one or two questions. My main question is around - I know

last year we were putting great effort into trying to get the federal government

and the public of Canada to understand the grave difficulty that we are having

with foreign overfishing, and I know we were putting some effort into educating

the public about that. I am wondering if we are still doing that, and what our

plans are for this year.

MS JONES: Thank you, Sandra.

We will continue to share with the foreign overfishing campaign. We have had

some successes with it in the last year, especially in creating an awareness

around the issue. Again this year we will focus our energies into the national

and international market in delivering the message of Newfoundlanders and

Labradorians as it relates to that issue, and we will continue to do the

promotional campaign as well as ensure that we have representation at the tables

of NAFO and the other meetings that will occur that we need to be at in terms of

the foreign overfishing issue. We are still very active in that campaign and we

intend to maintain that activity until we have had some successful resolution on

it.

MS KELLY: Just one other question.

I guess in light of all of the discussion going on in our Province at the

moment, the very animated discussion around the fishery closure that has been

recently announced by the federal government, in light of what was happening in

New Brunswick these past few days, which I think is very serious - it was

hurtful last week seeing the Canadian flag burning and being cut up, but I think

what is happening in New Brunswick is very serious indeed in our country. I

understand that today the federal government has been moving from its position

somewhat. Does that give you any optimism, because they could move on an issue,

a fishery related issue in New Brunswick, that they may very well do the same

thing for our Province?

MS JONES: No doubt the incidents that are going on in the Province today

as they relate to the fishing industry and the federal government, and what is

happening in New Brunswick over crab, are quite obvious indicators that there is

a disconnect between the federal government and the Atlantic Provinces when it

comes to fisheries issues and decisions that are being taken.

If the federal government is willing to take a re-look at what is happening

in New Brunswick, obviously it gives me some optimism in terms of what we have

been trying to do in Newfoundland and Labrador.

For the past twelve days now we have been trying to get them to rethink and

reconsider their decision to close down the Gulf and Northeast Coast cod

fisheries. We will continue with that campaign and we will continue to lobby

them to have that decision reversed. Certainly, the federal government has

reconsidered decisions in the past. Last week they reconsidered a decision as it

related to Toronto and then decided to fund a marketing campaign in Toronto to

counteract the SARS issue. They did rethink and reconsider that issue. There is

some indication that they may be doing the same in New Brunswick.

What is really sad about this is when you have to resort to those measures to

get attention. I think that the federal government is sending a very terrible

message to people in Canada. I certainly do not appreciate, as I am sure nobody

does, the actions of what happened in New Brunswick. It shows desperate measures

by desperate people for attention from a national government. It would be quite

a message to send, I would think, if they would be going back reconsidering, in

light of actions like that. I guess we will just have to see what happens over

the next couple of days.

MS KELLY: I think, minister, if you have any success in turning this

around we will have to get you working on the Port Harmon-Stephenville file, and

also the Gander weather office because those are two battles that we are still

right in the middle of. We have a lot of work to do on all three files.

Thank you for your answers.

CHAIR: You have lots of time to pick at those.

MS JONES: I would appreciate passing along any tips I could, but I can

tell you that my plate is quite full in this department.

MS KELLY: I can well imagine.

MS JONES: Between crab reductions, shrimp allocations and cod closures.

This is a very active fishery that reaches a lot of Newfoundland and Labrador

communities and it has a huge number of participants. It is one of the

industries, I guess, in which we have built our Province and any time we have a

resource that is jeopardized in the way that this is now and impacts so many

people, I think one can only imagine the amount of time that is consumed with

trying to iron through all the issues that are confronting us today. We are on

the job and we have certainly been very active on these files. Everyone in this

department has been very active. We do not apologize for working day and night

and every weekend for the last month to deal with many of the issues that are

out there in the communities right now, and we will do that for as long as it

takes.

MS KELLY: Well, we thank you and good luck.

MS JONES: Thank you.

MS KELLY: That is all my questions, Mr. Chair.

MR. MATTHEWS: Mr. Chair, I am tempted to ask a question and if I were to

ask questions out of interest of being made more knowledgeable, the level of my

knowledge is so low that we would be here all night and tomorrow, but I was

chatting with the Deputy Chair just a minute ago, asking a very honest question.

I would like to ask of the minister and/or the officials, because I honestly

do not know the answer nor have I heard the answer articulated publicly. I know

the position of the government in terms of the decision on the closure of the

Gulf fishery. I know the position of all the local provincial politicians,

because it seems to be similar if not identical, in that they are asking for a

reopening based on a limited effort based on the FRCC report. But I have to

believe - and I do not know what it is. I have not heard it, at least officially

- that the federal government, through the Minister of Fisheries, must have in

his mind and must have had in front of him, and must have had laid before him

and must have had given to him for consideration, some basis on which he made

his decision.

I am just wondering, what fundamentally is the defence of the federal

position? Laying aside the posturing, and laying aside the politics, and laying

aside the bravado, and laying aside the serious impact upon people who are going

to be affected by the closure of the fishery, I would like to know,

notwithstanding all of that, what it is in terms of support that the federal

government has put forward that forms a basis for the decision they have taken?

Because I cannot believe that Robert Thibault woke up one morning, flipped a

coin and said this is my decision. I think there is more to it fundamentally

than that, with great respect for all of our own individual judgements and

sometimes with great suspicion of what the federal officials might be putting

forward as defence. What fundamentally supports the position that the federal

government has taken with respect to the closure of the fishery? If I could have

an answer to that, I would be one more informed Newfoundlander than there was

when we went into the Committee hearings.

MS JONES: Thank you, Mr. Matthews.

I have asked myself that question on a number of occasions and tried to

speculate as to where he could have built the entire basis for his decision. I

guess I would take a stab in just saying this to you: The scientific data that

was provided to Mr. Thibault, which was the only data that would have supported

in any way a closure that he might take, was interpreted by him and interpreted

by his officials to a point that he decided this was the action that was

necessary. Now, that same science was also interpreted by people in our own

Province, through the FRCC, who made a recommendation that was different from

the one that Minister Thibault has taken.

I guess where the question is right now is with the science itself, in terms

of how it is being analyzed by various individuals and various science people,

or people with a scientific background, how the science is acquired, the methods

by which it is acquired, the modules or the models that are used to calculate

the scientific data; and also the input that goes into it. I guess we all know

that you can take any model and, no matter what you input into it, it is going

to determine the outcome at the end. I think there are some serious questions

around all these particular components.

I can only guess that his decision was based on his own analysis of that

information. Our position is based on our own analysis of the same information,

as well as some questions that we have around it. As well, our decision is also

based on the expertise of our own fishing industry. The information that is

gathered by fishers themselves, the harvesters, first-hand, and the input and

the information that we have selected from them, has allowed us to make the

decision that we have.

I do not know if that clarifies anything for you at all. It is only a rough

interpretation, because I certainly would not have anything factual that would

tell me that this fishery should be closed, and I do not know if Minister

Thibault actually had those facts to tell him. I think it was a matter of

interpretation and differences of opinion, with nothing really substantial from

a scientific basis that he could make his decision.

MR. MATTHEWS: Just one supplementary, maybe.

I appreciate that response, Yvonne. I ask it in the context of honestly not

knowing or having heard what the support is for his position, having heard him

or anybody else say it. I suspect that the answer was along the lines that you

gave, which is a fundamental disagreement as to either the scientific work that

has been done or the analysis of that scientific work and the

interpretation of

that scientific work at various levels.

One of the reasons why I ask the question is because, unless I am not hearing

it, unless it is being drowned out by all the political rhetoric and the

posturing - and I do not mean only political here, I mean the unions and people

who are being aggrieved by this - unless I am not hearing it, I am not hearing

or I am not sensing a big debate out in the community about the quality and

interpretation of scientific information.

If what you are saying is correct, I would think that there must be, as

amongst the scientific community, some disagreement or some debate. I am

wondering why we are not hearing that in this whole issue; because if

fundamentally it is a question of who do you believe from the scientific

community, then it would lead me to believe that there must be - or at least

there should be, if there is not - some debate with respect to the evidence that

each is using to support their own position, without questioning - I do not know

which is wrong or which is right, and that is not the question, to make a call

on it, but I am not hearing a big scientific debate ongoing out there and I am

wondering why that might be.

MS JONES: I think first of all we recognize, as a government, and I think

most people in the Province do recognize, that there has been some decline

within the cod stocks in certain areas of the Province over a period of time.

When we looked at this from an all-party committee perspective, we took those

factors into consideration and we consulted with people in the industry and the

science community in the Province in order to achieve the recommendations that

we put forward.

The Fisheries Resource Conservation Council, which is the federal minister's

own conservation council, also looked at scientific information, looked at the

state of the stock, and put forward recommendations. I guess the reason that the

scientific debate has not occurred - and I should point out for the record that

Dr. George Rose, who is the resident scientist in Newfoundland and Labrador, an

individual whom we consider to be an expert in terms of cod science in the

Province, actually questioned Mr. Thibault's decision to close this fishery.

He certainly felt that there should be a commercial fishery and that it should

be at a level of 3,500 tons, which he felt was sustainable within the industry.

He is a scientist in our own Province who has questioned this decision publicly.

I guess, in addition to that, probably the reason you do not hear the huge

debate around science is because a lot of the people this affects already

understand and know that the science is not conclusive, that the

interpretation

of it is not accurate in this case, and that the decision that was made was

wrong. I guess, for many of them, they have moved past the piece of trying to

legitimize and justify their request to have a fishery reopened and the decision

reconsidered, and that is where you hear more of the political debate between

the people of the Province and the federal minister and the federal government.

I guess, for those people who are affected, they already understand it. They

already know that they are right. They feel they have built their case. I am

sure there are probably many others in the Province who have not followed this

issue from the beginning, and they are not nearly as affected or impacted by it,

who would have the same question that you would have, and I certainly appreciate

that.

MR. MATTHEWS: Thank you.

Thank you, Mr. Chair.

CHAIR: Mr. Taylor.

MR. TAYLOR: I am just going to make a couple of points about Lloyd's

question. Really, there are two issues, Lloyd. One is the validity of the

science, which is not agreed to by everybody, and the other is how to deal with

it, whether you believe the science or not. In other words, what is the

constraint of rebuilding? In the confines of what you can control as resource

managers, how do you ensure, to the extent possible, that the stock rebuilds?

On the first point, on the validity of the science, obviously DFO and the

minister say they believe in the validity of the science that says the stock has

declined by 25 per cent, or something like that, in the last two years; that

there is no survival of the older year classes, and, in large part, they

attribute that to what is being taken by the commercial fishery; that

recruitment is not great, for whatever reason. I think they have pretty much

come to the conclusion that is partly caused by seals. I am talking about a

science perspective here now - that the only action they can take, which would

enable the stock to rebuild, would be a closure of the commercial fishery.

That is their perspective, and the minister says: I have confidence in this

because it was reviewed by - what they call - a regional assessment process or

zonal assessment process, depending on how it is done. It is peer-reviewed. They

bring in scientists from the various regions of DFO into Mon-Jole, Quebec, for

example, where the scientific information is presented by the science community,

the assessment scientists there, and then other scientists from the Newfoundland

region, Nova Scotia region, from the U.K., for example, Iceland and the U.S.

They pick holes in their methodologies and try to say: Is this right? The

minister says that was done. It was peer-reviewed. It stood up to the litmus

test. So, therefore, I have the basis for closing the fishery.

The fishermen and the industry on the other side say: Well, it is not valid

necessarily because the RV survey is tearing up nets. The RV survey does not

catch much more than 500 fish in 300 tows, and the information that you are

taking from the mobile sentinel fishery is not valid this year. Although there

is a decline, it can be explained by the fact that the survey stations have been

changed to deeper water in August when you would expect the fish to be in

shallower water. So these are the types of arguments that come back from the

industry on the validity of science.

Then the FRCC takes all of the information from the industry, DFO science and

wherever, and says: What, in our opinion, is the best approach to take to ensure

stabilization and/or rebuilding of the stock. They listen to what the fishermen

have to say and listen to what the scientific community have to say and then

they decide on what they think the approach is. They do not necessarily suggest

that there is anything outlandishly wrong or wildly wrong with the DFO science

side of it. They think there are some problems but they do not necessarily

disagree with the statement that there has been a reduction in the size of the

stock. What they disagree on is how best to deal with it. The FRCC says: Instead

of closure, you can have a 3,500 ton fishery. As long as you deal with capelin,

as long as you deal with seals, as long as you deal with these other things, you

can still have a 3,500 ton fishery. That is the way I see it anyway, from when I

was there. That was how we differed as FRCC, when I was there for six years,

from science. There was a difference of approach in how best to rebuild.

CHAIR: Are there any further questions?

MS JONES: Was that good, Lloyd?

MR. MATTHEWS: Yes, informative, because you know there are those of us in

the world and there are those of us in the Province, and I would allow a goodly

number in the Province, Mr. Chair, who are not very well-versed or informed

about fisheries issues; either the gory details or the broader, bigger picture.

Because of the uniqueness of the situation, where we have an all-party committee

of the provincial Legislature agreeing on some positions, it seems to me that

there is a responsibility on all of our parts to explain why it is we believe

what we believe. I am always of the view that after the shouting and roaring and

bawling and posturing and politicizing has died down, there then still has to be

a sensible discussion about the issue amongst people who are holding somewhat

level heads in that discussion. Otherwise it is not much more than a he said,

she said argument that is going on publicly, and at the moment that is what we

have in the Province.

I am not alleging blame or responsibility or anything. I sit back and I hear

a federal government making a decision and announcing it; and I sit back and I

hear a unilateral agreement, virtually, amongst provincial politicians as to why

the thing - calling for a change in that position. I hear not a lot of

discussion about the basis on which the decision was made. I think we have a

responsibility as legislators to put forward information to the people of the

Province that sustains a position that we take, regardless of what that position

is and regardless of what the issue is. Whenever we take a position personally,

publicly, or as a larger group, we have a responsibility to explain why we think

the decision that we are aggrieved with is wrong and why it is then we are

supporting an alternate approach to a big, big problem. I think that is an area

where, if I were to ask to comment as a politician for whatever length of time I

have in that public role, I am grossly deficient - somewhere between grossly

deficient and completely uninformed.

I appreciate your help, Mr. Chair, through the members of the committee

tonight.

CHAIR: Are there any further questions for the Estimates? If not, I would

ask the committee to move the Estimates for the Department of Fisheries and

Aquaculture starting at 1.1.01, inclusive without amendment, to 3.1.01.

On motion, subheads 1.1.01 through 3.1.01 carried.

On motion, Department of Fisheries and Aquaculture, total heads, carried.

On motion, minutes of Industry, Trade and Rural Development adopted as

circulated.

CHAIR: I would like to thank the committee. This is the last committee

meeting of the Resource Committee. I would like to thank the committee for their

patience and questions to the ministries that we dealt with. I would like to

thank the department minister and her officials for the review of the

department. Thank you Elizabeth and Janice, and the staff who have been here

pretty well each night to work on this.

Thank you very much and have a good night.

On motion, the Committee adjourned sine die.